Top court cancels 214 coal field permits, spares four

Companies will have to return coal blocks to the govt

New Delhi

Coal blocks allocated to two mega power projects of Anil Ambani-led Reliance and one each of public sector Sail Authority of India Limited (SAIL) and National Thermal Power Corporation (NTPC) were spared in the final order of the Supreme Court in the coal scam case on Wednesday.

The Bench headed by Chief Justice R M Lodha cancelled the rest 214 coal block allocations since 1993 that it had declared as illegal and arbitrary in its August 25 verdict.

The companies will have to return the blocks to the government. The apex court allowed the government to either auction the blocks or allot them to central companies.

Reliance was spared since it had won the mining rights in a bidding process on the price at which it will sell electricity. The court, however, made it clear that it cannot sell any coal except to extract for own use.

On the Centre’s request to save 40 functional coal blocks and six ready-to-function ones, the court allowed 42 of them to function for six months till March 31, 2015 to give the government “breathing space to manage the emerging situation.”

The allottees would, however, have to pay an additional levy of Rs 295 per metric tonnes for all coal extracted. This rate was worked out by the Comptroller and Auditor General (CAG) to make up for the losses to the exchequer.

The payment is to be made “within three months or in any case on or before December 31.”

Chief Justice Lodha, who will retire in two days, pronounced the judgment with Justices Madan B Lokur and Kurian Joseph as the other two judges on the Bench, saying they were opting for the “natural consequence of the August 25 judgment after the Centre’s affidavit that it is “fully prepared” to face the cancellation of the coal block allocations and will not have any difficulty to take the coal industry forward.

Reacting to the order on the PIL of NGO Common Cause, Attorney-General Mukul Rohatgi said: “The government would now decide which of the blocks will be auctioned and which not to.”

He said the six-month gap in implementation of cancellation of 42 functional coal blocks would ensure that the transition would happen with the “least disturbance” as “private industries can come back in the auction.”

On August 25, the court had said coal blocks were allotted through an “ad-hoc and casual” approach “without application of mind,” and as a result “common good and public interest suffered heavily in the unfair distribution of the national wealth, coal, which is king and paramount Lord of industry.” Coal miners and power producers had argued that a huge investment was at stake and the cancelling of allotments should be taken up case by case. The allotment of coal blocks to steel, cement and power companies without an auction process has been at the centre of the so-called ‘coalgate’ scandal, estimated to have cost the exchequer a loss of as much as Rs 1.86 lakh crore.

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