Coalgate: SC asks govt to explain `coincidence' of politicians cornering coal blocks news
15 September 2012

The Supreme Court has issued notice to the central government asking it to explain the so-called ''coincidence'' in the allocation of coal blocks to politicians, their kin and friends. The SC also sought to know what action the government proposed to take against illegal allotments and those allottees who breached terms of contract.

Accepting a public interest litigation (PIL) on alleged irregularities in the allocation of coal blocks to private companies, the Supreme Court also allayed concerns of the government over parallel scrutiny of the issue both by the Supreme Court and the Parliament's Accounts Committee.

Meanwhile, investigations in the last few weeks have shown that a senior minister had lobbied on behalf of his brother's firm to get a coal block. The CBI has also found that some companies that lied about their financial and technical track record to corner coal blocks were linked to politicians and their families.

"Is it a coincidence that the relatives of politicians benefitted?" asked the judges.

The Supreme Court has directed the secretary in the ministry of coal to file affidavit specifically answering the six questions posed by the public interest petition (PIL) seeking cancellation of the allocation of all 194 controversial coal blocks.

The SC also posed the following questions to the government:

  • Why competitive bidding process was not followed for allocation of coal blocks?
  • What were the guidelines for allocation of coal blocks and whether there was any deviation during actual allocation?
  • Why so many politicians and their relatives figure among the alleged irregular allottees?
  • Whether the guidelines for allocation overlooked the safety mechanism to render the allotments as largesse in favour of private parties?
  • Whether government's objective in coal block allocation has been achieved through the present mode of allocation, which was faulted by the CAG?

The coal secretary has been asked to file a response in eight weeks.

Turning down the centre's plea that the SC need not go into the issue of coal block allocation since a Parliamentary committee is already looking into the issue, the court observed: ''These are different exercises''.

The bench of justices R M Lodha and A R Dave said the petition raised serious questions and "it requires explanation from the government."

"There is difference in exercise done by the Public Accounts Committee (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 court said.

In a face-saving exercise, the coal ministry on Thursday decided to cancel allocation of four coal blocks - Bramhadih Block in Jharkhand, allocated to Castron Mining Ltd in 1996; Chinora and Warora (southern part) blocks in Maharashtra, given to Fieldmining and Ispat Ltd in 2003; Lalgarh (North) block in Jharkhand allotted to DOMCO Smokeless Fuels Pvt Ltd in 2005 (See: Coalgate: Government cancels allocation of 4 captive coal blocks).

The decision was taken following recommendations of an inter-ministerial group headed by additional secretary (coal) Zohra Chatterji.

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Coalgate: SC asks govt to explain `coincidence' of politicians cornering coal blocks