Orissa High Court Gives Direction To Resolve Dispute Between NALCO & Mahanadi Coalfields Regarding Coal Supply; Meeting To Be Held Tomorrow

At the outset, the Court was informed that pursuant to its order dated 22nd April, 2022, the East Coast Railway (ECoR) supplied one rake on 23rd April for carrying the coal from the pit head of MCL at Bharatpur and Talcher to NALCO's Smelter plant at Angul and four rakes on 24th April, 2022. It was also conveyed that three rakes are being arranged for today, i.e. 25^th April.

Ms. Pami Rath, counsel appearing for the NALCO pointed out that the coal supply from MCL has been reduced to 60% of the contracted demand and NALCO is making up the remaining required quantity by purchasing it through e-auction. She also stated that NALCO's Smelter plant totally depends on its Captive Power Plant (CPP) which is a thermal power plant which in turn depends entirely on coal supply from MCL. If the CPP cease to generate enough power to keep the smelter plant going, it will have to shut down.

She highlighted that NALCO's Alumina refinery at Damanjodi also faces the same crisis. It was stated that the stocks available with the NALCO can keep its units going only for three more days. It is therefore prayed that MCL should be ordered to restore the full supply of coal as agreed between the parties so that the smelter plant does not cease to operate.

Mr. Debaraj Mohanty, counsel appearing for MCL, sought modification of the interim order passed by the Court on the ground that MCL should not be compelled to supply only to NALCO through rakes as it is required to supply coal to power plants as well.

He urged that NALCO should be asked to lift coal as per the reduced agreed quantity by other modes, viz., by road and the 'Merry Go Round'(MGR), which is an exclusive dedicated rail line connecting the coalmine pit head with NALCO's Smelter plant. However, Mr. Subir Palit, counsel appearing for the petitioner and Ms. Pami Rath, counsel appearing for NALCO informed the Court that the MGR is not fully functional and transporting by road would be both cumbersome and hazardous.

Having regard for the above submissions, the Court held that since the essential dispute concerns two Central Government Public Sector Undertakings (PSUs) i.e. MCL on the one hand and NALCO on the other, and also involves the role of the Railways which is the third Central Government undertaking in the picture, the Secretaries of Power, Coal and Mines Departments and the Chairman of Railway Board should sit together in virtual or hybrid mode with the Managing Directors (MDs) of MCL and the NALCO not later than 6 PM tomorrow i.e. 26th April 2022 to find the way to resolve the crisis with a view to ensure that the smelter plant of NALCO at Angul and its Alumina refinery at Damanjodi are not forced to shut down.

The Court also directed that minutes of the deliberations of the above meeting to be placed before it on the next date of hearing, i.e. 27 April.

Case Title: NALCO Officers' Association, Angul v. Union of India & Ors.

Case No.: W.P.(C) No. 10260 of 2022

Order Dated: 25 April 2022

Coram: Chief Justice Dr. S. Muralidhar and Justice Radha Krishna Pattanaik

Counsel for the Petitioner: Mr. Subir Palit, Advocate and Ms. Pami Rath, Advocate

Counsel for the Respondents: Mr. P.K. Parhi, Assistant Solicitor General and Mr. Debaraj Mohanty, Advocate for MCL