Supreme Court asks Nalco to supply alumina to Vedanta unit at Visakhapatnam

The Supreme Court on Wednesday directed National Aluminium Company (Nalco) to ensure delivery of 30,000 MT of metallurgical-grade calcined alumina to Vedanta firm at Visakhapatnam on FOB basis, though the same will be for use in Vedanta’s SEZ unit at Jharsuguda, Orissa.

Vedanta Resources (VRL) had emerged successful bidder for Nalco’s alumina tenders meant for exports, but the leading producer of low-cost metallurgical-grade alumina had refused to allow the UK firm to take the consignment to its SEZ unit and had insisted on terminating the transaction at Visakhapatnam Port. Besides, the producer had also asked VRL to obtain Let Export Order (LET), a mandatory requirement for completion of the transaction, from the Customs authorities at Visakhapatnam Port — a stand contrary to the SC’s January directions that asked the Anil Agarwal firm to get documentation from SEZ authorities.

Vedanta had filed the contempt petition alleging “wilful disobedience” of its January order. A Bench led by Chief Justice SA Bobde, while disposing of the Vedanta’s contempt petition on Wednesday, said both Nalco and VRL had agreed to abide by its January order. “Nalco has no difficulty in delivering the consignment at Visakhapatnam port on FOB basis, though the same is meant to be used by Vedanta SEZ unit at Jharsuguda,” the order stated, while noting the Vedanta’s statement that it will accept the goods at Visakhapatnam port.

However, senior counsel Mukul Rohtagi, appearing for Vedanta, wanted the SC to keep its contempt petition pending, stating he had serious doubts about Nalco abiding by the apex court order as “they (Nalco) wants to give the tender to our competitors.”

“If they (Vedanta) are otherwise eligible, then you (Nalco) must not discriminate. You better comply with our order. You are unnecessarily creating problems. You should allow, otherwise we will haul you for contempt. We are disappointed with your client…,” the CJI told Nalco’s senior counsel SK Bagaria.

Even Nalco executive director (Marketing) R N Mohapatra was present before SC during the virtual hearing as he was summoned by the apex court earlier this month. It had then sought response from the top Nalco brass as to why contempt should not be initiated against them for “clear deviation from the requirement recorded in it January 14 judgment,” as alleged by Vedanta.

The top court had in January allowed VRL to bid for Nalco’s alumina tenders meant for exports but said the delivery of consignment would take place at Visakhapatnam on FOB basis. Nalco had then opposed the participation of Vedanta’s Jharsuguda unit, saying the tender for alumina exports can be issued only to overseas customers.

Rohtagi argued that Nalco was making repeated attempts to wriggle out of the SC order. By refusing to raise the invoice in the VRL’s SEZ office, Nalco officials are “purposely and wilfully trying to circumvent the SC’s directions… The judgment is pending compliance since seven months and this is indicative of the lackadaisical and tardy manner in which the transaction has been carried on especially with the intent to frustrate the mandate of the SC,” the contempt petition filed through counsel PS Sudheer stated.