Supreme Court cancels allocation of 214 coal blocks, spares 4

24 Sep 2014


The Supreme Court has cancelled all but four of the 218 coal mining licences awarded by the government between 1993 and 2010 after it found that the procedure for allocation of the coal blocks were non-transparent and arbitrary.

However, the apex court granted permit holders of 46 operational coal blocks six months' time to file reply to the notice of winding up business.

A Supreme Court bench comprising Chief Justice R M Lodha and justices Madan B Lokur and Kurian Joseph spared only four blocks, including one belonging to NTPC and SAIL each and two allocated to ultra mega power projects.

The court ordered companies that have not started mining operations even past the deadline,  to pay a fine to the government for "non-operation".

The apex court has accepted the Comptroller and Auditor General's (CAG) estimate that there was a loss of Rs295 per mega tonne due to the non-operation of the mines and directed the permit holders of all cancelled coal blocks to pay the penalty.

SC cancelled allocations of 168 blocks with immediate effect while granting holders of 46 operational blocks six months "breathing time" to file reply to the notice. The SC said the government can auction blocks post March 2015.

The Supreme Court last month said the licences were illegal since they were allocated in an "arbitrary" manner.

The court, which examined the allocation of 218 blocks in pre-auction era till 2010, had held that they were done in an illegal manner by an "ad-hoc and casual" approach "without application of mind" and "Common good and public interest have, thus, suffered heavily" due to lack of fair and transparent procedure resulting in "unfair distribution" of the "national wealth" - coal - "which is king and paramount Lord of industry."

It said that the inquiry by the CBI into the case will continue and that its observations and findings on the issue will have no bearing on the probe.

India is one of the largest producers of coal in the world and more than half of its commercial energy needs are met by coal. The SC ruling will have major implications for the country's energy sector.

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