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Big investment can’t save coal firm licences

The Supreme Court on Wednesday pulled up the central government for not cancelling the allocation of coal blocks to the private sector companies on the grounds that they had made huge investment in the projects albeit without getting clearance. The court has asked from the central government that whether it intends to de-allocate those blocks. The government is likely to tell the court its stand on Thursday.

A three-judge bench comprising Justices R M Lodha, Madan B Lokur and Kurian Joseph said that huge investment made by companies in coal blocks without getting all clearance cannot be a ground for not cancelling licences, adding the companies which invested money on blocks without getting proper clearances took the decision at their own risk. Attorney General G Vahanvati told the court that around Rs two lakh crore has been invested in such blocks and it will be difficult to cancel the licence for want of clearances.

‘They must suffer consequences no matter how much investment has been made by them. The alleged illegality cannot be compounded’, said the bench. It said that any investment made in anticipation of clearances cannot be justified and such blocks cannot be protected if the companies fail to get clearances within a time frame fixed under the law. The SC added such investments are made at their own risk if their rights have not matured and all such investments would be unauthorised.

Meanwhile, two Congress-ruled mining states – Maharashtra and Andhra Pradesh – blamed the central government for alleged irregularities in allocation of coal blocks. After observing that the central government was giving contradictory stands on coal block allocation, the Supreme Court had sought the response of seven mining states – Madhya Pradesh, Andhra Pradesh, Odisha, Jharkhand, Maharashtra, Chattisgarh and West Bengal.

West Bengal, Madhya Pradesh, Jharkhand, Odisha and Chhatisgarh have also told the court that the state governments played a minimal role in allocation of coal blocks and had squarely blamed the central government for alleged irregularities in coal blocks allocation. The central government had submitted in the court that its role is confined only to identification of coal blocks.
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