Govt asks SC to spare 46 coal blocks

The court did not pass any order on Monday and adjourned the hearing until September 9

To minimise the impact of mass deallocation, the Centre on Monday requested the Supreme Court not to cancel the permits for 46 coal blocks that were functioning or were about to start production. The remaining blocks allotted could be auctioned, Attorney-General Mukul Rohatgi told a Bench headed by Chief Justice R M Lodha.

The Supreme Court was hearing all parties on follow-up action after ruling last Monday that the Centre’s allocation of coal blocks between 1993 and 2010 was illegal.

The court considered appointing a committee headed by a retired judge to study individual cases. However, Rohatgi said the government was against such a committee.

The court did not pass any order on Monday and adjourned hearing until September 9, awaiting more information from the government and several industry associations.

The attorney-general also said allottees without power-purchase agreements could be asked to refund the government profits made from subsidised coal at the rate of Rs 295 for every tonne produced.

Recounting events since the court initiated the investigation, Rohatgi said of the 218 blocks in question, 80 were cancelled after the Central Bureau of Investigation (CBI) probed allocations monitored by the court in the past two years. Of the remaining 138, he said 40 were supplying coal to the power and steel industries and six were about to start operations.

Regarding cancellation of blocks from 1993 till 2010, Rohatgi said some hardship was unavoidable in implementing the court’s order. In future, the government would impose strict conditions to avoid such a situation, he added.

Associations of the coal and steel industries pointed out their investments would suffer if allocations were cancelled. They said the coal blocks were near their plants and economical. If the blocks were cancelled, coal would have to be imported from South Africa or Australia at unaffordable costs, they added.

Judge Lodha observed the cancellation affected only a small percentage of the output. However, the associations said its impact would be harsh on the economy.

Of the 218 coal blocks allotted since 1993, 12 are with giant power projects, two with coal-to-liquid projects, 105 with private companies and the rest with state governments.

Around 40 of the 105 blocks with private companies are producing coal and six are ready for production. These mines produce 53 million tonnes of coal, about 10 per cent of the total projected output from all blocks, and feed 26,000 Mw of power output and 12 million tonnes of steel production.

An estimated half of the 63 dormant blocks are awaiting mining leases from state governments.

The public interest petitioners, including non-government organisation Common Cause, wanted cancellation of all blocks held to be illegal. Counsel Prashant Bhushan said the end users could get coal from Coal India.

CBI gave another interim report on the scam to the court. It also told the court that R S Cheema had been appointed special public prosecutor for the trial.

Meanwhile, a special court on Monday asked CBI to clarify whether “rule of law” was followed in allocation of coal blocks to industrialist Kumar Mangalam Birla’s Hindalco.