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Monday, June 25, 2018

Supreme Court reserves order on scrapping of coal blocks allocations

Private companies favour a case-to-case analysis to decide which allocations should be scrapped.

New Delhi | Published: January 16, 2014 8:30:55 pm
16 months of arguments later, SC holds back coal blocks allocation verdict (PTI) 16 months of arguments later, SC holds back coal blocks allocation verdict (PTI)

A three-judge bench headed by Justice R M Lodha, which had agreed to look into the alleged irregularities in coal block allocation on September 14, 2012, wrapped up the proceedings which witnessed the Centre itself putting in motion the process of de-allocating some coal blocks.
The bench heard the arguments of all concerned parties involved in the allocation, including the seven mining states and the association of mining companies.
Private companies contended any order of the apex court should have prospective effect and all the allocations should not be scrapped in one go and it should be decided on a case-to-case basis.
“It is submitted that as far as the system of allocation is concerned, any challenge, even if successful, could have prospective effect where people have acted in a bona fide manner, assuming the machinery was in accordance with law. If there are irregularities in the grant, it is submitted that it would depend on the facts of an individual case as to the degree of the irregularities and whether it has resulted in a miscarriage of justice, in which case there could be a wholesale invalidation,” senior advocate Harish Salve, appearing for associations of Sponge Iron Manufacturers Association, said.
The court was hearing petitions filed by members of civil societies including former CEC N Gopalaswami, ex-Navy chief L
Ramdas and former Cabinet Secretary T S R Subramanian and lawyer M L Sharma seeking cancellation of coal block allocations.
The petitioners contended the entire allocation made through the screening committee and government dispensation route by the central government after 1993 is in violation of the clear provisions of law and therefore illegal.
“Instead of acting on the categorical stand of the Coal Secretary in favour of competitive bidding, the government delayed its introduction for 8 years till February 2012. Since the screening committee had itself been constituted through an executive order, there was no legal hurdle in introduction of competitive bidding by an executive order,” advocate Prashant Bhushan, appearing for some petitioners, said.
“With the proposed introduction of competitive bidding pending, this led to huge rush for the coal blocks under the old allotment system and the government allotted as many as 142 coal blocks between 2004 to 2009, with billions of tonnes of coal. Most of the blocks did not have an end-use plant in place and ultimately have not started coal production even after elapse of several years,” he said, pleading with the court to scrap the allocation.
He said the policy followed in allocation of coal block was illegal and the state governments and its people are at great loss as they by themselves cannot raise the royalty.
This submission prompted the bench to ask why the states have not so far raised this issue.
“It is shocking that in the past decades no state asked for enhancing the royalty,” the bench said while Bhushan and Sharma said the law was not correctly followed in the allocation of coal in which the Centre has taken the role of state governments.
The bench said the states should have raised this issue in their submissions which is also not there in their affidavits.
“Instead of the state governments recommending the applications, it is the Centre which is approving the applicants, that is why the states are saying that their role remains formal,” Bhushan said.
He said it was wrong to say that the power of allocation for coal blocks vested with the Centre.

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