National Aluminum Company deviation from the requirement recorded in it January 14 judgment: SC issues contempt notice

While hearing a petition was filed by Vedanta citing “willful disobedience” of its January judgment that allowed its UK-based arm to take part in the state-run aluminum producer’s tender for the sale of surplus 30,000 MT of metallurgical-grade calcined alumina, the Supreme Court has issued a contempt notice to the top brass of the National Aluminum Company (Nalco). Notice has also been issued to its executive director (Marketing) R N Mohapatra and CMD Tapan Kumar Chand.


Facts: The SC had allowed Vedanta Resources (VRL) to bid for Nalco’s alumina tenders meant for exports. It has said the distribution consignment would take place at Visakhapatnam. Similarly, it would have been for use in Vedanta’s SEZ unit at Jharsuguda. Nalco had previously opposed the participation of Vedanta’s Jharsuguda unit. It said the tender for alumina exports can be issued only to the overseas customers, so due to this Vedanta cannot participate in its tender. The VRL on June 24 acquired the spot tender for the sale of 30,000 MT of metallurgical Grade (sandy type) calcined alumina. Nalco refused to allow the UK firm to take the assignment to its SEZ unit and also contended on dismissing the transaction at the Visakhapatnam Port. The producer asked VRL to obtain the Let Export Order, an essential condition for completion of the transaction, from the Customs authorities at the port.


Contentions: Appearing for Vedanta Senior advocate Mukul Rohtagi, submitted that Nalco was demanding that the goods should be taken overseas and could not be utilized by Vedanta at its SEZ unit.
The CMD effectively asked to undo the SC direction concerning the certificate since the LEO under the Customs Act is issued for consignment to be shipped overseas. The emphasis on the issuance of an LEO is a cover to deny VRL usage of the consignment at their SEZ plant.


Held: SC barred Vedanata from bidding and issued contempt notice against Nalco.

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