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All coal block allocations since 1993 illegal, says Supreme Court

The apex court bench headed by chief justice RM Lodha and comprising justices Madan Lokur and Kurien Joseph said no objective criteria were followed and guidelines were breached in coal block allocations.

The SC said that issue of de-allocation requires further hearing and it will take a decision on whether there is need for cancelling 218 coal block allocations on 1 September, 2014. While pronouncing its judgment on a batch of petitions seeking quashing of 194 coal blocks allocations during the previous Congress-led United Progressive Alliance regime, the apex court said no objective criteria was followed and guidelines were breached in coal block allocations. ‘Coal block allocation done by screening committee was not fair and transparent,’ SC said.

This judgement adversely affected the stock market as shares of Jindal Steel & Power slumped 13.97 per cent to Rs 253.15 on the Bombay Stock Exchange (BSE). The stock was the worst performer among the 30-Sensex scrips. Hindalco Industries plunged 9.56 per cent, while Tata Steel lost 4.79 per cent and JSW Steel went down by 3.52 per cent on the BSE.

The Central Bureau of Investigation (CBI) has alleged that mining licences were given arbitrarily to private companies close to the ruling party for several years, without a transparent bidding process.

A special bench headed by Chief Justice RM Lodha delivered the verdict on the two-year-old petitions that were based on Comptroller Auditor General’s (CAG) report, estimating a loss of Rs. 1.64 lakh crore caused due to the arbitrary allocations.

The SC said all allocation made in 36 meetings of screening committee since 1993 are illegal and arbitrary. The coal blocks allocated are in Jharkhand, Chhattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh. These were allotted to private companies between 2004 to March 2011.

The petitions alleged these blocks were given in violation of the guidelines. The bench has been monitoring the CBI probe in the scam and special court has been set up to exclusively deal with the prosecution of cases arising out of it in which politicians and businessmen have been named as
accused.

The apex court on 14 September, 2012 had for the first time issued notice on the PIL filed by advocate ML Sharma and later an NGO, Common Cause and other public spirited persons joined him in the matter which saw CBI facing tough time and government getting pulled up for alleged interference in the probe.

Reacting on the issue, Congress leader Shakeel Ahmad said, ‘This had been the UPA government’s stand earlier as well. It was during the NDA government’s rule that coal blocks were allocated without any advertisement, whereas during the UPA rule not a single coal block was allocated without an advertisement. There is no denying that the process should have been more transparent, which is why the Supreme Court in all its wisdom has given such a verdict.’

BJP’s Sambit Patra said, ‘The observation underlined the need for formulating a clear and transparent policy in the country for the allocations of coal blocks. Govt will formulate a policy to provide a conducive atmosphere for investors.’

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