Centre to reply to SC on re-examining allocation of coal blocks

New Delhi, Jan 8: The central government will Thursday inform the Supreme Court whether it was inclined to re-examine the 32 coal blocks — allocated after 2006 to private companies by the screening committee of the coal ministry — that are core to the coal block allocation scam.

“If you are going to cancel it, then we will have to look differently from the point of view of law. Then we will look (at allocations of coal blocks) prior to 2005,” said the bench of Justice R.M. Lodha, Justice Madan B. Lokur and Justice Kurian Joseph.

The court said it would look into pre-2005 allocations because after the incorporation of Section 11(a) in the Mines and Minerals (Development and Regulation) Act, all future allocations of coal blocks would be on the basis of auction only.

The court, which is looking into the legality of the coal block allocations, said the criminality dimension of the allocations was being probed by the Central Bureau of Investigation.

The possibility of the centre taking a different take came in the course of the hearing of submissions by counsel Vivek Tankha, who appeared for Maharashtra.

The issue cropped up as Attorney General G.E. Vahanvati sought to dispel the impression that there was variance in the centre’s position spelled out by him and the one being articulated by Tankha on the procedure of allocating the coal blocks.

Explaining the procedure followed in the allocation, Vahanvati said that in coal blocks allocated post 2006, no development has taken place so far.

At this, the court asked him: “Why don’t you de-allocate them?”

“It is possible,” said Vahanvati, seeking time to take instructions on that count from the government. He said he would get back to the court Thursday.

As he said he would get back on whether the government would like to re-examine the allocation of 32 coal blocs, the court said it was willing to give him 15 days time and could hold hearing on the 16th day.

However, for pre-2005 allocations, Vahanvati said 46 coal blocks were allocated from 1993 to 2005 to private companies and only in respect of 17 allocations, mining leases were issued by states and the rest are in different stages of clearances.

Answering in affirmative to the court’s query if any time frame is being given to these allottees of coal blocks to start mining activities, Vahanvati said: “My problem is that if I de-allocate the coal blocks, it would lead to litigation.”

Pointing out that merely holding an allocation letter does get mining lease unless you meet three conditions under the MMRD Act, the court said that under the Act, “No reconnaissance permit, prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder.”

The court said that without satisfying the conditionalities under the MMRD Act, even if Rs.1 lakh crore is spent, it goes down the drain.

“An alleged illegal act is compounded by an unauthorised act. Even if one makes investment of Rs.1 lakh crore, it goes to drain. There are three steps that give semblance of right (to mine)”, said Justice Lokur.

However, appearing for Madhya Pradesh, counsel Mukul Rohtagi contested Vahanvati’s submission that allocation of coal block does not bestow any right to the allottees.

“Allocation creates a very valuable right for the allottee. It is precursor to my right to mining lease,” Rohtagi told the court.

He said these were not small investments. The bench mark is that Rs.5 crore is spent for producing one MW of electricity.

IANS