Supreme Court quashes allocation of 214 coal blocks
25 Sept 2014 5:35 AM IST
The ruling came as a major setback for the coal companies and the former prime minister Manmohan Singh, who was reportedly warned by his Cabinet colleagues and former CAG officials about the irregularities and undue favours being given to private players while allocating the coal blocks.
The apex court observed that licences to the coal blocks were illegal and arbitrary, and a transparent process for their bids was not followed.
There was respite for the four coal blocks run by the central government agencies. Attorney general Mukul Rohatgi said that four coal blocks had been spared because they were being used for ultra mega power projects and were being used by state companies.
The court has also directed that all the companies that have been mining coal have to pay for all the coal that they have mined or used until 31 March 2015. ‘Total 214 coal block allocations have been cancelled. Four coal blocks remain, two of which belong to Steel Authority of India and the National Thermal Power Corporation,’ the Attorney General said.
Following the cancellation of these coal blocks, the government can auction them afresh after end of six months in March, 2015. The apex court has also asked the companies running the coal blocks for the next six months to pay Rs. 295 per tonne of coal they extract. ‘They also have to pay the same amount per tonne for the coal they have already extracted from the blocks,’ senior Supreme Court lawyer Prashant Bhushan said.
‘The entire allocation of coal blocks as per recommendations made by the Screening Committee from July 14, 1993 in 36 meetings and the allocation through the government dispensation route suffer from the vice of arbitrariness and legal flaws,’ the bench headed by Chief Justice RM Lodha had said in its 163-page order.
The order further said, ‘The Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding factors, there was no transparency and guidelines have seldom guided it.’
The allocation of the coal blocks to various companies had become controversial after it was found that the scam had cost the exchequer Rs.1.86 lakh crore as per the CAG audit report in 2012.
Reacting over the SC’s ruling, former coal secretary PC Parakh said: ‘It’s a welcome move and the impact of the ruling will now depend on how quickly the government responds to the verdict and how procedure for reallocation of coal block is followed.’
Aam Aadmi Party (AAP) founder Arvind Kejriwal too welcomed the directive and tweeted, ‘Congratulations to Prashant Bhushan. It is time to remember our struggle, koyla kranti of 26 August, water cannons, jail, lathis.’
Meanwhile, industry body Assocham has termed the ruling as ‘a bit harsh’ citing reason that it will lead to higher imports. ‘Our main concern is on the kind of negative impact on the economy which has just been showing signs of recovery after over two years of slowdown,’ Assocham president Rana Kapoor told media persons.
The CBI, which is investigating the multi-crore scam, has alleged that for several years, mining licences were given arbitrarily to private companies without a transparent bidding process.
The Congress faced huge embarrassment as investigation into coal scam directly implicated the office of prime minister Manmohan Singh, who briefly held the coal portfolio. The CBI had registered 20 FIRs which are an off-shoot to three preliminary enquiries related to coal block allocation between 2006 and 2009, between 1993 and 2004 and projects given under a government scheme.
Surprisingly, senior BJP and Congress leaders have decided to keep silent on the ruling.
The apex court observed that licences to the coal blocks were illegal and arbitrary, and a transparent process for their bids was not followed.
There was respite for the four coal blocks run by the central government agencies. Attorney general Mukul Rohatgi said that four coal blocks had been spared because they were being used for ultra mega power projects and were being used by state companies.
The court has also directed that all the companies that have been mining coal have to pay for all the coal that they have mined or used until 31 March 2015. ‘Total 214 coal block allocations have been cancelled. Four coal blocks remain, two of which belong to Steel Authority of India and the National Thermal Power Corporation,’ the Attorney General said.
Following the cancellation of these coal blocks, the government can auction them afresh after end of six months in March, 2015. The apex court has also asked the companies running the coal blocks for the next six months to pay Rs. 295 per tonne of coal they extract. ‘They also have to pay the same amount per tonne for the coal they have already extracted from the blocks,’ senior Supreme Court lawyer Prashant Bhushan said.
‘The entire allocation of coal blocks as per recommendations made by the Screening Committee from July 14, 1993 in 36 meetings and the allocation through the government dispensation route suffer from the vice of arbitrariness and legal flaws,’ the bench headed by Chief Justice RM Lodha had said in its 163-page order.
The order further said, ‘The Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding factors, there was no transparency and guidelines have seldom guided it.’
The allocation of the coal blocks to various companies had become controversial after it was found that the scam had cost the exchequer Rs.1.86 lakh crore as per the CAG audit report in 2012.
Reacting over the SC’s ruling, former coal secretary PC Parakh said: ‘It’s a welcome move and the impact of the ruling will now depend on how quickly the government responds to the verdict and how procedure for reallocation of coal block is followed.’
Aam Aadmi Party (AAP) founder Arvind Kejriwal too welcomed the directive and tweeted, ‘Congratulations to Prashant Bhushan. It is time to remember our struggle, koyla kranti of 26 August, water cannons, jail, lathis.’
Meanwhile, industry body Assocham has termed the ruling as ‘a bit harsh’ citing reason that it will lead to higher imports. ‘Our main concern is on the kind of negative impact on the economy which has just been showing signs of recovery after over two years of slowdown,’ Assocham president Rana Kapoor told media persons.
The CBI, which is investigating the multi-crore scam, has alleged that for several years, mining licences were given arbitrarily to private companies without a transparent bidding process.
The Congress faced huge embarrassment as investigation into coal scam directly implicated the office of prime minister Manmohan Singh, who briefly held the coal portfolio. The CBI had registered 20 FIRs which are an off-shoot to three preliminary enquiries related to coal block allocation between 2006 and 2009, between 1993 and 2004 and projects given under a government scheme.
Surprisingly, senior BJP and Congress leaders have decided to keep silent on the ruling.
Next Story
