SC asks if Centre intends to cancel coal blocks allocated after 2005
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A bench led by Justice RM Lodha asked the Attorney General (AG) to communicate the government's intent to the court, saying consideration of legal issues relating to the allocation of coal blocks will be entirely different if the Centre came forward to cancel all allocation post 2005.
"Are you intending to cancel all the allocation after 2005? The scope of the case will be different in that case. If the allocation of this period is gone, we will have to see only those allocated prior to 2005," said the court.
It also told AG G E Vahanvati that the court was open to issue some directives where the allocation had not resulted into execution of leases.
Noting that there have been instances where no development had occurred even after five years of allocation, the bench also questioned the government for not taking action in case of such allocation where, as the AG put it, "milestones" had not been achieved by the entities regarding at least 32 allocation.
The bench dismissed Vahanvati's contention that around Rs 2 lakh crore has already been invested by the companies after allocation and cancellation of allocation would now cause great harm to their interests.
"How did they invest? Mere allocation did not create any rights in their favour. All such investments, at best, could in contemplation of certain substantial rights which were yet to be created. No law, no equity can help them. All such investments would go in drain and it cannot be a defence and no law would help them," said the court.
The AG sought time to return with required instructions from the government as the court clarifies that a court order for cancellation of blocks would not need a complaint by anyone since the loss to national exchequer would be of paramount consideration.
Meanwhile, the court also questioned the manner in which the Central government received and processed the application for allocation of coal blocks although under the existing legal regime, all such application had to be essentially received first by the state governments.
"Here the situation is entirely different. The state governments do not even touch the application and wait for the Centre to receive and process them. We have not been able to find the provision which allowed the central government to directly receive the application," said the bench, as Vahanvati assured he would satisfy the court on the issue on Thursday.
Also, Congress-ruled states Maharashtra and Andhra Pradesh also took a stand that allocation of coal blocks was entirely controlled and regulated by the Centre. West Bengal, Madhya Pradesh, Jharkahand, Orissa and Chhatisgarh also told the apex court that they played a minimal role in the allocation and squarely blamed the Centre for alleged irregularities in coal blocks allocation. Their argument contradicts AG's statement that Centre's role was confined only to identification of coal blocks.