The Supreme Court has declared captive coal mines allocation made between 1993 and 2010 as illegal and arbitrary. Attributing these block allocations as unfair distribution of the national wealth, the apex court stated that common good and public interest have suffered heavily due to these allocations as there was no fair and transparent procedure. However, the consequences arising from the verdict of such coal blocks will be considered on September 1, taking into account the investments made by companies for various projects and the procedure to be adopted for cancellation.
A bench headed by Chief Justice R M Lodha clarified that apex Court could cancel these coal block auctions where competitive bidding was held at the lowest tariff based on the recommendations made in all the 36 meetings of the Screening Committee. The Bench also stated that the Government dispensation route of coal block auctions virtually violated the legislative policy in the Coal Mines Nationalisation (CMN) Act and winning and mining of coal mines has resultantly gone in the hands of private companies for commercial use.
Among 218 allocated blocks, 105 blocks allocated to private companies, 99 were to state-owned firms, 12 went to ultra mega power projects (UMPP) and two to coal-to-liquid projects.
The Bench clarified that coal block allocations made through competitive bidding for the lowest tariff for power for UMPPs might not be cancelled.However, the coal blocks allocated to UMPPs would only be used for that purpose and diversion of coal for commercial exploitation would not be permitted.
