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Coal block allocations since 1993 illegal: SC

Says guidelines were breached, no criteria followed while allocating the blocks

BS Reporter  |  Mumbai 

The Supreme Court today declared that the entire allocation of coal blocks from 1993 till 2010 was illegal, arbitrary, non-transparent and without application of mind and guidelines.

The screening committee which had sat 36 times to take decisions did not make any objective evaluation while distributing national wealth, the judgment delivered by a bench headed by Chief Justice R M Lodha said. The allocations both under the screening committee route and the government dispensation route, were arbitrary and illegal, according to the three-judge bench.

The court did not pass any consequential order nor cancel allocations but those issues will be considered on September 1 in continuation of the hearing of two public interest cases which started it all.

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In regard to the allegation that the government has allowed diversion of coal from ultra mega power projects(UMPP) for commercial exploitation, the court directed that the coal blocks allocated for UMPPs would be used only for those projects and no diversion of coal for commercial exploitation would be permitted.

The court has been hearing the PILs moved by Common Cause, advocate Manohar Lal Sharma and a few others challenging the allocations as tainted with corruption and nepotism. They had sought cancellation of all such allocations.

The court had asked the CBI to investigate the allegations and had monitored the probe over the past two years calling for interim status reports. During this period, the government itself had cancelled several allocations with glaring illegality. The rest of the allocations will be examined in the future hearings.

The Chief Justice observed that the court was thinking of setting up a committee headed by a retired judge of the court to examine individual cases. Earlier, the figures given by the central government were contested by the state governments. Therefore there was no certainty about the data. The proposed committee will sort out these issues, the judge remarked after passing the judgment.

The judgment said that allocation of coal blocks through Government dispensation route, however laudable the object may be, also is illegal since it is impermissible as per the scheme of the Coal Mines Nationalisation Act. No State Government or public sector undertakings of the State Governments are eligible for mining coal for commercial use.Joint venture arrangements with ineligible firms is also impermissible.

Equally, there is also no question of any consortium / leader / association in allocation. Only an undertaking satisfying the eligibility criteria referred to in the Act,which has a unit engaged in the production of iron and steel and generation of power, washing of coal obtained from mine or production of cement, is entitled to the allocation in addition to Central Government, a Central Government company or a Central Government corporation, the judgment clarified.

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First Published: Mon, August 25 2014. 20:32 IST