SC to decide coal e-auction procedure to avoid malpractices

SC to decide coal e-auction procedure to avoid malpractices
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First Published: Sun, May 11 2008. 12 48 PM IST
Updated: Sun, May 11 2008. 12 48 PM IST
New Delhi: The Supreme Court will decide how coal companies should conduct e-auction to ensure participation by greater number of players and restrictions on the number of attempts by any bidder.
The issue has been raised before the apex court in appeals filed by Coal India Ltd (CIL) subsidiaries pointing towards how a couple of bidders indulged in malpractices by bombarding the website server with an abnormal number of requests, thus preventing the genuine bidders from participating in the e-booking.
A bench headed by Justice Arijit Pasayat, hearing the appeals filed by Western Coalfields and South Eastern Coalfields, has posted the matter for hearing after summer vacations.
However, it refused to vacate the stay granted against the Bombay High Court judgement that asked the coal companies not to blacklist or debar the traders from participating in the future e-booking or e-auction of coal.
The High Court while accepting the attempts by traders — Sangita Sales and Victorian Marketing — were abnormal, had prevented CIL’s subsidiaries from taking stringent action in the absence of any prescribed rules that prevented such successive attempts.
According to the coal companies, Sangita Sales and Victorian Marketing, which had got themselves registered with service provider M Junction Services for coal purchase from CIL through e-booking, had hit 311 and 195 times, respectively, and the average time taken for 30 bids was four seconds and 12 seconds.
The parameter adopted in identifying unscrupulous traders was to identify those customers who sent more than 100 requests with frequency of 30 or more requests in 15 or less seconds, it stated.
If a bidder follows the prescribed method of sending booking request, it was not possible to send such large number of repeated requests in such a short span of time without using external pragmatic measures and software, the petition filed through advocate Anip Sachthey stated.
“The use of such software has the potential to cause damage to the server and impede the working of the website both of which are offences under the Information technology Act, 2002,” it said.
He said the service provider during e-booking on 27 September had found that some of the bidders were misusing the user ID and passwords allotted to them and had indulged in robotics and bombarded the server on which the website of M Junction was hosted with an abnormal number of e-booking requests thus prevented the genuine bidders from participating and covered the maximum coal offered for e-booking.
The misuse by such bidders not only clogged up the network but also attempted to obtain an unfair advantage by preventing other purchasers to access the server.
While stating that they had no option but to de-register the users who indulged in such unfair practices, the coal companies said: “Such misuse of the user ID and the use of unfair modes and mechanism could have caused great damage to the servers which in turn could have triggered a collapse of the complete system.”
The CIL had introduced the system of e-booking in October 2007 and stopped issuance of fresh linkages to non-core sector from 2001 as quantitative demand in this sector had exceeded the coal availability in the subsidiary companies.
However, the bench refused to hear an application filed by a coal purchaser challenging the decision to blacklist it and 12 others from participating in the future e-booking and e-auction programme directly or indirectly. It also sought delivery of 50 MT of coal allegedly allocated to them and also refund of excessive deposit made in this regard.
They had sought vacation of the stay granted in February this year by the apex court in view of the fact that their user IDs had been re-activated and they were being allowed to participate in the e-auction.
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First Published: Sun, May 11 2008. 12 48 PM IST