Supreme Court terms coal block allocations 'illegal'

Bench headed by chief justice says Centre made the allocations in an arbitrary and unfair manner
Supreme Court terms coal block allocations 'illegal'

The Supreme Court of India has termed illegal all coal block allocations made since 1993, saying they were not made in a “fair and transparent” manner and did not serve public interest, according to media reports. 

The order came in response to a petition, filed in 2012, by non-profit Common Cause and other eminent citizens, including former cabinet secretary T S R Subramanian, former chief election commissioner N Gopalaswami. The petition had questioned the legality of allocation of coal blocks to private companies from 1993 onwards.

The petition followed a Comptroller Auditor General of India reports that said the government exchequer incurred a loss of Rs 1.86 lakh crore because of allocation of coal blocks to private companies without taking a proper auction route. Essar, Tata and Jindal Steel and Power were among the beneficiaries named in the report. The allocations were made by a government screening committee.

Earlier in January, the three judge-bench headed by Chief Justice R M Lodha had observed that any investment made by private companies in anticipation of environmental clearances cannot be justified and cannot be made ground for grant of permission to mine. This was after Attorney General Goolam E Vahanvati told the court that approximately Rs 2 lakh crore has been invested in such coal blocks and that cancelling licences for want of clearances would lead to huge financial losses. When the Centre submitted that 40 coal blocks were de-allocated, the court had suggested de-allocation of 29 blocks allotted to private companies as well.

The bench on Monday said now it will hear from parties what should be done with the coal blocks, according to one news report.

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