SC questions govt on coal blocks allotment, strongly defends CAG

Coal Blocks
THERE was fresh trouble Friday for the Centre over the coal block allotment controversy as the Supreme Court asked it to explain if guidelines for distributing these "mines of largesse" had been strictly followed. The apex court also questioned what it called the "coincidence" that several blocks were secured by "politicians, their associates and a few private companies".

Directing the Coal Ministry secretary to file an affidavit explaining the allotments and the reasons for not adopting the 2004 policy of competitive bidding, a bench of Justices R M Lodha and A R Dave also dismissed the Centre's objections to the case relying on the Comptroller and Auditor General's (CAG) report on the alleged irregularities in the allotments. The CAG is a "constitutional authority" and that its report is "not a piece of trash", the court said.

"Issues require explanation from you. After all, it is not distribution of a state property in a small way. These are mines of largesse and rightly described by the petitioner, not just tonnes of largesse, being distributed," the bench said. "You may have well laid down policy but was it implemented? Is it a sheer coincidence that a large number of beneficiaries were either politicians or their relatives or associates? Let us have a very objective approach. We intend to concentrate on allocation."

The court also turned down Solicitor General Rohinton Nariman's contention that the petition was "premature" since it heavily relied on the CAG report, which is due to be considered by Parliament's Public Accounts Committee (PAC) starting September 20.

"Keep in mind that the CAG has its own value. There is nothing wrong in relying on its report. Moreover, there is difference in exercise done by the PAC. Parliament and PAC can proceed with the issue on the basis of the CAG report. We don't want to encroach upon their exercise but the petition raises different things altogether. There are sufficient averments which require explanation from you," the judges said.

Seeking a response from the government in eight weeks, the court also made it clear that at this juncture, their queries were related to only one prayer of the PIL by lawyer M L Sharma. The petition seeks to cancel the allotment of 194 coal blocks on grounds of arbitrariness, illegality, unconstitutionality and public interest.The bench said that the reply should explain the guidelines framed by the Centre for allotment of coal blocks and the actual process adopted.

"Whether the guidelines constituted an in-built mechanism to ensure that allocation of the subject coal blocks does not lead to distribution of largesse unfairly in the hands of a few private company," the court asked. It also sought to know whether the guidelines for allotment of coal blocks were strictly followed and whether by their allotment, the objectives of policies were realised.

The bench also asked the Centre to apprise it of "hindrances" for not following the policy of "competitive bidding" adopted in 2004 for allotment of the coal blocks. Lastly, the court sought to know what steps have been taken as well as proposed against companies which have not followed the terms of allotment or have breached the agreement.

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