Allocation of coal blocks: Apex Court judgment today

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  • Monday, September 1, 2014
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  • The Supreme Court will begin a crucial hearing on Monday to decide the fate of 218 coal blocks, whose allocation it had declared "illegal and arbitrary" a week ago while slamming the government for not adopting transparent procedures and violating rules to "distribute largesse".

    Going by a hint dropped by the bench headed by Chief Justice R.M. Lodha, the apex court is not expected to order immediate de-allocation of all the blocks, given the ramification for the economy in view of the decision in the 2G spectrum case.

    In February 2012, the court had cancelled all 122 2G spectrum licences on the ground of arbitrariness.

    The court is expected to appoint a committee of retired apex court judges and an amicus curiae (senior lawyer to assist the court) to help the judges arrive at a decision. It is also believed that uncertainty over the coal contracts will add to confusion among investors about doing business in India.

    The court had stopped short of de-allocating the blocks-155 allotted by the previous UPA regime and 63 by the NDA-and said the issue required further deliberation. The matter will come up for hearing again on Monday.

    "As we have found allocations made both under the screening committee route and government dispensation route are arbitrary and illegal, what should be the consequences is the issue which remains to be tackled. We are of the view that, to this limited extent, the matter requires further hearing," the bench headed by Lodha ruled on August 25.

    "Entire allocation by screening committee from 14.07.1993 in 36 meetings and the allocation through the government dispensation route suffers from arbitrariness and legal flaws. 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 court said in its 163-page judgment.

    "On many occasions, guidelines have been honoured more in their breach. There was no objective criteria, no criteria for evaluation of comparative merits. The approach had been casual. There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily. Hence, the allocation of coal blocks based on the recommendations made in all the 36 meetings of the screening committee is illegal."

    The court scrutinised the allocations after PILs were filed by lawyers Prashant Bhushan and M.L. Sharma, seeking their cancellation on the ground that rules were flouted and certain companies were favoured. After the judgment, Bhushan had said the Supreme Court's order virtually meant the cancellation of most licences as only a few of the firms that got allocations had signed mining leases and begun mining, while large number of them were still holding allocation letters which now had no legal effect.

    Attorney General G.E. Vahanvati had during the hearing pleaded against de-allocation of the coal blocks, saying companies holding letters of allotment deserved to be shown mercy after investing more than Rs.1,000 crore, but the bench shot back, saying, "They have done it at their own risk, in anticipation. It has gone down the drain...why did they do it in contemplation? Investment per se does not create a right in their favour."

    Source: India Today


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