SC reserves verdict on coal blocks

The Supreme Court Tuesday reserved its verdict on the fate of 218 coal blocks whose allocation since 1993 it had held to be arbitrary, non-transparent and illegal.

A bench of Chief Justice R.M. Lodha, Justice Madan B. Lokur and Justice Kurian Joseph reserved the verdict after a day-long hearing on the consequences of its decision declaring the allocation process by the steering committee and under government dispensation arbitrary and illegal.

The hearing saw the government opposing the plea by the coal block allottees and other stake holders - power producers and sponge iron manufacturers - represented by their associations, for the grant of individual hearing by a committee to determine their innocence and look into the investments already made by them on the coal blocks allocated to them.

"According to me, individual hearing is not required. We don't want another impact of the judgment" and illegal allocations must go, said Attorney General Mukul Rohatgi.

The apex court Aug 25 had suggested a three member committee headed by a retired apex court judge to go into each of the cases before taking a final call on their fate, but the suggestion was opposed by the government in the subsequent hearing of the matter on Sep 1.

At the outset of the hearing Tuesday, the government told the court that it favoured auction of all the 218 blocks, but if the court so agreed, then 40 coal blocks which are already in production for years and six other coal blocks in which production can commence any time may be exempted.

Defending the classification of 40 plus six, Rohatgi said that they were already in production and in some cases for years and they were both in public and private holdings.

He reiterated that the court's Aug 25 verdict had held that coal blocks were allocated in an illegal, arbitrary, non-transparent and thus its logical consequence is that all must be cancelled.

"This (allocation) is found to be illegal and the result of illegality is that all must go and be cancelled", Rohatgi said, adding that "this is the only way we can go forward and we have applied our mind to all the options."

He said that one option is let the 40 mines go, on as it is, till an alternate transaction takes place or alternately state-run Coal India Ltd would step in to take over the operation without affecting the existing work force.

Appearing for an association representing 26 coal block allottees, senior counsel K.K.Venugopal drew the court's attention on the impact of cancellation on the economy, power sector, iron and steel industry, and socio-economic development of the areas where the blocks are.

He cited statistics to show the colossal loss that would be caused to the economy if the allocations were cancelled, and advocated each person should be heard by a committee which in turn should send its report to the apex court. He also resisted imposing Rs.295 penalty per tonne of coal.

Saying that he was not finding any fault with the apex court judgment, senior counsel Harish Salve told the court that the central government had misled it but the court objected to this

"This is not a fact. You must not say that," the court said.

"Your argument that you (client) have not done anything wrong will not take us forward. We are not concerned whether you have done any wrong. We are concerned that a wrong procedure was followed (in allocations)," Chief Justice Lodha told Salve.

Senior counsel Dushyant Dave, appearing for one of the private parties, urged the court not to distinguish between 46 mining leases and others as it "distorts the level playing field" and merely because someone gets mining leases earlier than others and commences mining operations, he could not escape the consequences visiting other allottees.