SC cancels 214 of 218 coal block allocations

The Supreme Court on Wednesday cancelled all coal block allocations except for government-run blocks that operate on a non-JV basis.

The criteria fits just four of the 218 blocks that were deemed illegal by the court in its August order.

Media reports said exempted coal blocks included allocations to NTPC, SAIL and Sasan UMPP.

The apex court in its order said that there was no reason to save the other blocks as the allocations were arbitary.

The order will be operational after six months, the apex court said, adding the government could hold auctions for these blocks post 31 March, 2015.

A penalty of Rs 295/tonne will also be imposed on all cancelled block holders.

"Coal India Limited has been asked to take over operational blocks for 6 months," the Attorney General said.

On August 25, a Supreme Court Bench headed by Chief Justice R M Lodha had said that entire allocation of coal blocks from 1993 till 2010 was illegal, arbitrary, non-transparent and without application of mind and guidelines.

The screening committee which had sat 36 times to take decisions did not make any objective evaluation while distributing national wealth, the judgment delivered by a bench headed by Chief Justice R M Lodha said.

The allocations both under the screening committee route and the government dispensation route, were arbitrary and illegal, according to the three-judge bench.

The court was hearing PILs moved by Common Cause, advocate Manohar Lal Sharma and a few others challenging the allocations as tainted with corruption and nepotism. They had sought cancellation of all such allocations.

Subsequently, the government asked the apex court to exempt 46 blocks that were either already active in production or were in an advanced stage or readiness for production. The remaining blocks allotted could be auctioned, Attorney-General Mukul Rohatgi told a Bench headed by Chief Justice R M Lodha.

Around 40 of the 105 blocks with private companies are producing coal and six are ready for production. These mines produce 53 million tonnes of coal, about 10 per cent of the total projected output from all blocks, and feed 26,000 Mw of power output and 12 million tonnes of steel production.

An estimated half of the 63 dormant blocks are awaiting mining leases from state governments.