Govt ready to auction coal blocks

September 02, 2014 - 12:00:00 am

New Delhi: The government yesterday told the Supreme Court that it stood by the court’s verdict holding allocation of coal blocks since 1993 as illegal, and was ready to auction these blocks if they were cancelled, but sought exceptions for some mines that are operational.

Attorney General Mukul Rohatgi urged the bench of Chief Justice R M Lodha, Justice Madan B Lokur and Justice Kurian Joseph to consider making exceptions in the case of 46 coal mines, out of which 40 are operational and six are ready for operations and their end-use plants are also in place.

The court was told that there were 218 coal blocks that came under its scanner. Of this, 80 were cancelled by the earlier government and exemption sought for 46.

Endorsing the position taken by the attorney general, the court said: “Best way is what Rohatgi says, that is auction. The process (of allocation of coal blocks) has been held illegal at every stage and in every form and you (allottees of coal block) can’t take advantage of it.”

“They (the government) don’t mind if entire 218 coal blocks go under the hammer,” it said as senior counsel K K Venugopal, appearing for the miners, urged the court to balance different interests, including public, national and that of the allottees.

He argued that the allottees, who had done nothing wrong, could not suffer if the government had gone wrong and its methodology of allocation was wrong. He said cancellation would create problems even for the banks as there would be defaults.

Favouring the auction of the coal blocks, whose allocation it has held illegal, the court said that the existing allottees would get preference to match the bid, otherwise “good luck and goodbye”.

Noting that seven percent of the total coal requirement of the industry, be it power, steel or cement, was met from coal, the court said: “It is not going to make much difference.”

The government opposed the court’s earlier suggestion to set up a committee headed by a retired apex court judge to go into the decision’s consequences.

The apex court, in a verdict on August 25, had said: “As we have already found that the allocations made, both under the screening committee route and the 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.”

One of the ways suggested by the court was to appoint a committee headed by a retired apex court judge so that its report could help the court have an objective view on the options available.

Setting the tone of the hearing, Attorney General Rohatgi told the court: “We don’t want a committee. We don’t want to save anybody. If court wants all have to go, then they will go.”

“We want the court to decide, so that we can get out and auction and don’t want a committee. We want to start with an auction. The position of power is bleak. We want to finish the chapter and go ahead.”

Adjourning the matter after a two-hour-long hearing, the court asked all parties, including the central government, miners association and others, to file affidavits stating their respective stands by September 8 as it fixed Septmber 9 as the next date of hearing.