NEW DELHI: The Delhi High Court has observed that the rejection of winning bids of Jindal Power & Steel Ltd (JSPL) for two coal blocks in Chhattisgarh was ‘prima facie’ wrong as the government was making a mistake in comparing the bids with quotes received for other blocks.Following the report, the stock surged 6.5 per cent intraday. It closed the day at Rs 157.00; up 4.53%.The government rejected the bids, which were much lower than the price quoted for other blocks, on the ground that they did not reflect the fair value of the blocks. The court in the course of hearings on Thursday, observed that this did not seem fair, and amounted to comparing apples with oranges.The high court will again hear the case on Friday and asked the government to work out an interim arrangement for the blocks.The court’s observations are seen as a setback for the government, which has seen several legal challenges to auction of coal blocks, particularly by firms that lost out. However, the Centre is pleased about the auction as a whole as it has received high bids. It plans to auction more blocks next month.The court’s observations also come as a relief to JSPL and Bharat Aluminum Company (Balco) that took legal recourse after the coal ministry on Friday cancelled auction process for three blocks for which the companies emerged as successful bidders. On Monday, a bench of justices BD Ahmed and Sanjeev Sachdeva had restrained the government from allotting the Tara mine to Coal India.The government had disapproved bids for JSPL’s Gare Palma IV/2&3 and Tara mine and Gare Palma IV/1 for which Balco emerged as the best bidder. The coal ministry allotted these mines to Coal India Ltd . Both these blocks are operational mines and as per Supreme Court’s September 2014 verdict that cancelled 204 captive mine allotments, producing mines have to be surrendered by the previous allottee.JSPL made the best bid for the Gare Palma IV2&3 coal block at a price of Rs 108 per tonne while foregoing the mining cost. Tara coal block auction closed at Rs 126 per tonne. Balco emerged as the best bidder for the Gare Palma IV/1 at a price of Rs 1,585 per tonne.After rejection of its bid, JSPL had said it was “puzzled” by the government’s decision. It said it had followed a consistent and prudent bidding strategy throughout the coal auction with a serious long-term business perspective.