The high-profile legal battle between The Children's Investment (TCI) Fund and Coal India Ltd (CIL) has taken a curious turn with state-run Damodar Valley Corporation (DVC) and R P Sanjiv Goenka Group flagship company CESC gearing up to be a party to the case.
“As per information we have got, both the DVC and CESC want to be a party in the case,” confirmed a lawyer, who is handling the case for TCI. According to legal experts, the priorities of power sector players such as CESC and DVC are different and that they would not like to have an increase in price or taking the CIL prices to international parity, as TCI wants.
When contacted, the legal department of CIL, too, confirmed the development and indicated that CESC has approached the court on December 12 wanting to be party to the case. While DVC chairman R N Sen confirmed the development, CESC officials chose not to comment.
The Kolkata-based power major also did not respond to queries by Business Standard.
TCI had approached the Calcutta High Court recently with a representative suit on behalf of 650,000 shareholders of CIL. It has even demanded a compensation Rs 2,15,250 crore from the Indian government on behalf of shareholders of the state-owned miner as compensation for losses caused by CIL’s policy to price coal substantially below market prices. TCI had estimated its losses starting from November 2010 to March 2013 for 861 million tonnes of coal sales under fuel supply agreements.
The investment fund is also against the reversal of price hike that happened in January 2012. “It is up to the court to decide how we can be a party on this. But we want to safeguard our interests,” Sen said. However, a top CESC official said that though it is aware about the developments, the firm has not yet decided on its stand.
According to legal experts, both the firms want to intervene as it is a public matter and their interests are at stake. TCI had even come out with an advertisement asking shareholders to be a part of it.
In August 2012, TCI had filed a writ petition in the Delhi High Court over the interference of the Centre in the functioning of CIL by way of instructing the firm to revise the price hike based on gross calorific value made in December 2011.