A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva, while issuing notice to the government and seeking its response by February 23, also said that auction of Tokisud north coal block in Jharkhand would be subject to the final outcome of GVK's plea.

Tokisud north coal block was earlier allotted to GVK but the allocation was cancelled by the Supreme Court in August last year.

However, the company was allowed to run the mine till March 31, 2015, as it was an operational coal block.

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The court was hearing GVK's plea that compensation or capital cost of Rs 57 crore determined by the government on January 28 was made "illusory" by a February 1 corrigendum which provided for the possibility of an upward revision.

Senior advocate P Chidambaram, appearing for GVK, contended that till a final amount is fixed, it would be difficult for any company, including itself, to bid for the block.

He said the final date for making the initial price offer was at 12 noon today and after this, the bottom 50 per cent would qualify for submitting their final price offer on February 14-15.

Only the bottom 50 per cent would proceed to next round as they are bidding for mines to run power units. It is a reverse auction process in which a bid ceiling has been fixed below the level which everyone has to bid.

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He said without knowing the final capital cost, GVK cannot submit an initial price which would be lower, as there is a possibility of upward revision of the amount.

Chidambaram also said that since GVK thinks the compensation or capital cost should be between Rs 276 crore and Rs 350 crore as it had invested that much in the mine, it

would not be able to bid low enough to qualify to next round as others would bid on the basis of Rs 57 crore.

"How can the government offer a natural resource for auction without finally determining the capital cost," he asked.

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