Govt attorney to SC: No rules violated during coal block allocation

Economic crisis then threatening country necessitated change of policy in allocation of coal blocks

Attorney General G E Vahanvati today valiantly defended the government on its coal allocation policy and told the Supreme Court that there was no violation of the guidelines and the process was approved by the screening committee at every stage.

Replying to the allegations of irregularities and corruption in the coal block allocations, counsel said that the coal nationalization law was amended to attune to the new policies of the government since liberalization in the early 1990’s.

The economic crisis then threatening the country necessitated change of policy in allocation of coal blocks. Without privatization, the country would have faced a huge energy crisis, he said.

Citing Manmohan Singh, who was then finance minister, Vahanvati told a bench headed by Justice R M Lodha that the country had only Rs 2,500 crore in foreign exchange to stay afloat for two weeks. The country needed Rs 1,25,000 crore to generate power alone.

The Planning Commission had no objection to privatizing the coal mining sector for power generation. Therefore, private companies were inducted in this sector to save the economy. There was nothing irregular in this policy and it was backed by required amendments in the related laws, counsel said.

The court has before it public interest petitions which alleged flouting of laws to benefit private companies. The hearing has branched out into several issues, like the independence of the CBI which is conducting the probe into the alleged scam and the subsequent ‘disappearance’ of key records dealing with the issue.