Apr 092012
 

Shubhashish asks some tough questions on how the tareeq pe tareeq mode of functioning in courts is eroding & corroding sectors.

This is cross posted on his blog. and it has been reposted here without a single correction of a comma, a full stop or an exclamation :D

 

Near shutdown situation for Karnataka steelmakers as SC adjourns case, again

My view on the Karnataka mining, steel-makers and the SC.

March 30 was a regular day in the Supreme Court of India with many cases heard and many deferred. One of the cases was of the steel-makers in Karnataka crying for iron ore supply in order to sustain steel production. On that day, the Supreme Court of India adjourned the hearing of the iron ore mining case for the 13th time.

Given the fact that Karnataka accounts for over 20 per cent of India’s steel production and close to half of iron ore production, you may very well imagine the impact. Also, steel sector is said to be at the core of the infrastructure development. And we know that the government is stress on infrastructure development like Bollywood heroines’ stress on developing fake bosoms/lips. That serious.

Anyway, this slow hearing process has seriously affected the viability of steel-making in the state as the quality of ore is worsening by the day.

Out of the 27 times that the case was listed in the Supreme Court, the hearing has been deferred 13 times. Means nearly every second hearing was deferred/adjourned or whatever legal jargon you want to give. (PS: Dear Supreme Court, I am in complete knowledge of your guidelines for court reporters and let me assure you that I am not a court reporter).

Out of these 13 adjournments, five have happened consecutively since February 24, the latest one being the one on March 30. On March 16, the hearing was adjourned as one of the judges wasn’t available and March 23 hearing was adjourned because the CEC panel failed to submit its report to the SC bench.  The Supreme Court, in a notice on its website on March 14, said, “Due to non-availability of Honourable Mr Justice Aftab Alam for hearing forest bench matters, special bench comprising of Honourable The Chief Justice, Honourable Mr Justice Aftab Alam and Honourable Mr Justice Swatanter Kumar for hearing the matter will not sit on Friday, the 16 March 2012.”

This case if a matter of national importance and the stakes are high. And even though nearly half of the scheduled hearings getting cancelled due to one reason or the other, companies/stakeholders/everyone who is affected by this, are keeping their mouth shut fearing a showdown by the SC.

And this is what I want to ask today. Is it wrong to disagree with the Supreme Court in India? Why is is that disagreeing with a SC order or the way its proceedings are held, in a specific case or in general, are taken as a contempt of the judiciary in India?

The companies are silent. They are scared that whatever they may say will be taken against them by the SC. So, is it that even the SC, the guardian of citizens’ rights in this country doesn’t tolerate freedom of expression/speech even when its done keeping in mind all the clauses of the constitution?

Is it that difficult to disagree with the Supreme Court or its judgement?

The steel industry in Karnataka is again staring at a near shut down situation because of these delays. Even though the SC had given a respite to the industry in the state by allowing e-auctions every month from the 25 million tonne of stockpiles and allowing NMDC to mine, the industry is unhappy as the grades of ore has been deteriorating sharply.

Steel-makers say that the CEC, in its report to the SC, recommended category ‘A’ mines to function as no illegalities were found there. ” All we are asking the SC to consider this recommendation as soon as possible so that the steel production can carry on,” they say.

Currently, with no solution in sight, only a “few” months iron ore supplies are left in the state. Over half of the sponge iron makers in Karnataka have already drawn shutters and rest are bleeding money profusely in the hope of a judgement. The mega steel plants in the state, too, are slowly cutting production.

If the SC allows these mines to function again, then 8.5 million tonne of iron ore will available for steel-making annually.

The steel-making in the state would have shut down last year itself if the SC did not allow e-auctions of the iron ore from the state stock-piles. The companies are relieved by the move, but, are again getting flustered.

They say, “Iron ore is available from the stock-piles but the low grades are affecting the blast furnaces. As a result, cost of producing steel is going up. If relief doesn’t come from the SC then the industry will face closure yet again.”

A top official from an affected steel company, said, “Out of the 25 million tonne, 17 million tonne has been e-auctioned, however, mostly it has been iron ore fines. The grades of ore has also reduced which is affecting the blast furnaces.”

Iron ore is available in two forms, lumps and fines. Lumps are the chunks of iron ore in solid form whereas fines are the ore in powdered form which remain at the mines after lumps are taken out. Ore is fed into the blast furnace with other raw material to make steel.

The total steel capacity in Karnataka is 16 million tonne, of that 3 million tonne is sponge iron. Most of this sponge iron production has been shut down and steel plants are running at low capacities.

JSW Steel, the biggest steel-maker in the state and the second largest in India,  production in the month of February fell down by 24 per cent sequentially, at 6.10 lakh tonne. The company, on March 5, said, “As the stock pile of 25 million tonne is getting exhausted, the quality of iron ore being offered in E-auction is deteriorating substantially. Further certain iron ore in E-auctions contained high Alumina, Silica, Manganese and Low Fe which led to poor Sinter quality, high slag formation and low productivity in the Blast Furnaces.”

So, I ask the question again. Till when are we going to stick our heads in the sand and ignore the stark realities that face us? The argument that Indian courts are over-worked with millions of cases pending, is valid. But, such cases where the future of our economic development depends, can’t be left to such frequent adjournments.

Also, the demons of ‘contempt of court’ if we say anything against the court or its order, has to be taken out. Else, we are not free.

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