Bihar Sponge Iron Limited (BSIL) has faced a setback in its legal battle against South Eastern Coal Fields Ltd. (SECL) as the Chhattisgarh High Court dismissed the company's writ petition on October 27, 2025. The dispute centers around a penalty of Rs. 215.28 lacs imposed by SECL for short lifting of coal quantity under a Fuel Supply Agreement (FSA) from the fiscal year 2011-12.

Legal Proceedings and Attempts at Resolution

The legal journey for BSIL has been ongoing, with several key developments:

1. The Chhattisgarh High Court had previously directed both parties to appear before SECL's General Manager (Marketing & Sales) on April 21, 2025, with the aim of reaching a mutual settlement within 60 days.
2. Following an unsuccessful meeting at SECL's office, where BSIL's concerns were not addressed to their satisfaction, the company decided to pursue further legal action.
3. BSIL filed a new writ petition (WPC/24721 of 2025) against SECL's order/decision.
4. This latest petition was dismissed by the Chhattisgarh High Court on October 27, 2025.

Financial Implications and Company Response

Despite the court's decision, BSIL maintains that the financial impact of this ruling will not be material, considering the size of the company's operations. The company has stated that it is consulting with its legal advisors to determine the appropriate next steps in response to this development.

Upcoming Board Meeting

In a separate announcement, BSIL has informed that its Board of Directors is scheduled to meet on November 12, 2025, to consider and approve the un-audited financial results for the second quarter and half-year ended September 30, 2025. As per regulatory requirements, the trading window for the company's shares will remain closed for insiders until 48 hours after the declaration of these financial results.

Conclusion

The dismissal of BSIL's writ petition marks a significant point in the ongoing dispute with SECL. While the company downplays the financial impact, the legal setback may have implications for its operations and relationships with coal suppliers. Investors and industry observers will likely be watching closely for any further developments in this matter, as well as the upcoming financial results, to gauge the overall health and direction of Bihar Sponge Iron Limited.

Bihar Sponge Iron Limited (BSIL) has escalated its legal battle against South Eastern Coalfields Limited (SECL) by filing a new writ petition in the Chhattisgarh High Court. The dispute centers around penalties amounting to Rs 215.28 lacs imposed by SECL on BSIL for short lifting of coal quantity under their Fuel Supply Agreement (FSA) during the fiscal year 2011-12.

Legal Proceedings and Attempted Resolution

The Chhattisgarh High Court had previously directed both parties to appear before SECL's General Manager (Marketing & Sales) on April 21, with the aim of resolving the matter within 60 days. Following this directive, a meeting was held at SECL's office in Bilaspur to address the ongoing disputes.

However, BSIL claims that SECL's General Manager did not adequately address the concerns raised by the company during this meeting. Consequently, BSIL has decided to pursue legal recourse, leading to the filing of a new writ petition (WPC/24721) against SECL's order/decision before the Chhattisgarh High Court.

Background of the Dispute

The conflict stems from penalties imposed by SECL on BSIL for allegedly falling short of the coal lifting quantity agreed upon in their Fuel Supply Agreement for the financial year 2011-12. BSIL has been contesting these penalties, arguing that they were unjustly imposed.

Company's Stance and Financial Impact

In its disclosure to the BSE, Bihar Sponge Iron Limited stated that the legal dispute is not expected to have a material impact on the company, considering the size of its operations. This suggests that while the disputed amount of Rs 215.28 lacs is significant, it does not pose a substantial threat to the company's overall financial health.

Regulatory Compliance

BSIL has filed this disclosure in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company's Company Secretary and Compliance Officer, Vimal Prasad Gupta, has certified that the information provided in the disclosure is true, correct, and complete to the best of their knowledge and belief.

As the legal proceedings unfold, stakeholders will be watching closely to see how this dispute impacts both Bihar Sponge Iron Limited and its relationship with South Eastern Coalfields Limited. The outcome of this case could have implications for future fuel supply agreements and dispute resolution processes in the coal sector.