Kataka: The Orissa High Court Thursday dismissed a petition filed by Vedanta Ltd seeking restoration of the earlier pricing mechanism for bauxite supplied by state-owned Odisha Mining Corporation (OMC) to its alumina refinery at Lanjigarh in Kalahandi district.
A division bench comprising Chief Justice Harish Tandon and Justice M S Raman held that Vedanta could not seek revival or indirect enforcement of agreements that had already been terminated. “While dismissing the writ petition having found no merit, the interim orders passed in the matter stand vacated.
The op posite parties (including OMC) are at liberty to take follow-up action in accordance with law,” the court said in its judgment. The dispute between Vedanta and OMC relates to the supply of bauxite to the company’s Lanjigarh refinery. Vedanta had contended that it made substantial investments in the state based on assurances of long-term bauxite availability and a stable pricing mechanism.
The company had entered into agreements with OMC for supply of 150 million tonnes of bauxite at a price linked to the cost of production plus 50 per cent royalty. Subsequently, under the 2018 Long Term Linkage (LTL) Policy, 70 per cent of saleable mineral stock was earmarked for end-user industries and the remaining 30 per cent for national e-auction.
Vedanta and OMC thereafter entered into LTL sale agreements. Vedanta argued that OMC subsequently altered the pricing mechanism following the 2019 amendment to Rule 45 of the Mineral Concession Rules, contending that the amended provision applied to mine block auctions and not commercial sales.
After OMC rejected its representation seeking restoration of the earlier pricing formula, Vedanta approached the High Court. Arguing on behalf of the state, advocate general Pitam bar Acharya noted that the writ petition, so far as it relates to the amended prayer seeking supply of 150 Million Tonnes of Bauxite at the pricing mech anism contemplated under the Joint Venture Agreements dat ed October 5, 2004 and Febru ary 18, 2009 read with the MoUs dated June 7, 2003 and April, 2007, is wholly misconceived, hopelessly barred by delay, laches, waiver and acquies cence and, therefore, liable to be dismissed.
Acharya said the original MoU dated June 7, 2003 stood superseded upon execution of the subsequent MoU dated April 4, 2007. The said MoU itself was valid only for a period of two years, till April 3, 2009, and admittedly no extension thereof was ever granted by the state government. The MoUs, being non-statutory in nature, cannot be specifically enforced after lapse of more than sixteen years, he argued.
The court noted that the original joint venture arrangement between OMC and Vedanta was terminated in September 2015 after amendments to Mines and Minerals (Development and Regulation) Act changed the legal framework governing mining operations and govt-company joint ventures.
The termination was never challenged by Vedanta and had attained finality, the bench observed. The bench further held that under Section 17A of MMDR Act and Rule 45 of the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016, the OMC was justified in determining the pricing mechanism and raising demands accordingly.
Meanwhile, Vedanta Aluminium issued a statement saying, “The company is evaluating the order and the legal recourse available to it. The order does not impact the supply of bauxite to Vedanta Aluminium.”