NGO asks SC to cancel all coal block allocations

The Supreme Court should cancel all the coal blocks allocated to private and public sector companies in a non-transparent and unfair manner and in violation of rules, a petitioner said Thursday.

Petitioner NGO Common Cause has sought the cancellation of coal blocks allocated to state-owned companies which had in turn entered into joint venture agreements with the private companies conceding substantial gains to the latter.

While the June 16, 2004 coal secretary's note favouring competitive biddings was being tossed up and down in the power corridors, the government between 2006-09 allocated 150 coal blocks to its favoured few, said counsel Prashant Bhushan, appearing for the NGO.

The apex court bench of Justice R.M. Lodha, Justice Madan B. Lokur and Justice Kurian Joseph was told that what could have been achieved by an administrative order was allowed to hang for years and the intervening period was used to allocate coal blocks at whims.

The court was told that the allocations were in breach of the provision of Coking Coal Mines (Nationalisation) Act and the coal blocks were also given to those proposing to supply coal to companies engaged in production of iron and steel, power generation and cement and even to those who proposed to enter these sectors.

"In flowing Ganga who does not want to wash hands," observed Justice Lodha, as Bhushan said that it was like government distributing largesse to its "cronies" and favoured few.

Bhushan referred to the Central Bureau of Investigation FIRs which said that crimes under the Prevention of Corruption Act were committed during the allotment of coal blocks.

"The arbitrary allocation of coal blocks resulted in a windfall gain to few private parties running into lakhs of crores of rupees, and a corresponding loss to the public exchequer," he said.

Addressing the query from the court about the interplay between the Coking Coal Mines (Nationalisation) Act, 1973 and the Mines and Minerals (Development & Regulation) Act, Bhushan told the court that though under the latter law the coal mines belonged to the states but their recommendation for allocation needed the consent of the central government.

"The state governments tacitly agreed to the centre's recommendations," observed Justice Lokur, as Bhushan hinted at a give and take between states and the central government.

The court would next hear the matter Tuesday.