Coal Allocation between 1993 and 2009 illegal, arbitrary, non-transparent and were devoid of any procedure; Supreme Court

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In a landmark Judgment the Supreme Court today declared the Coal allocation between 1993 and 2009 illegal, arbitrary, non-transparent and were devoid of any procedure. A three Judge Bench headed by Chief Justice Lodha declared that the  entire  allocation  of  coal  block  as  per recommendations made by  the  Screening  Committee  from  14.07.1993  in  36 meetings and  the  allocation  through  the  Government  dispensation  route suffers from the vice  of  arbitrariness  and  legal  flaws.  “The  Screening Committee has never been consistent, it has not been transparent,  there  is no proper application of mind, it has acted on no material  in  many  cases, relevant factors  have  seldom  been  its  guiding  factors,  there  was  no transparency and guidelines have  seldom  guided  it.   On  many  occasions, guidelines have been honoured more in their breach.  There was no  objective criteria, nay, no  criteria  for  evaluation  of  comparative  merits.   The approach had been ad-hoc and casual.  There  was  no  fair  and  transparent procedure, all resulting in unfair  distribution  of  the  national  wealth.Common good and public interest have, thus, suffered  heavily.   Hence,  the allocation of coal blocks based on the recommendations made in  all  the  36 meetings of the Screening Committee is illegal”, held the Supreme Court.

The PILs were filed by ‘Common Cause’ and Advocate Manohar Lal Sharma. It is also held that “the allocation of coal blocks  through  Government  dispensation route, however laudable the object may be,  also  is  illegal  since  it  is impermissible as per the scheme of the CMN  Act.   No  State  Government  or public sector undertakings of the State Governments are eligible for  mining coal for commercial use.   Since allocation of coal is permissible  only  to those categories under Section 3(3) and (4), the joint  venture  arrangement with ineligible firms is also impermissible.   Equally,  there  is  also  no question of any consortium / leader / association in  allocation.   Only  an undertaking satisfying the eligibility criteria referred to in Section  3(3) of the CMN Act, viz., which has a unit engaged in  the  production  of  iron and steel and generation of power, washing of coal  obtained  from  mine  or production of cement, is entitled to the allocation in addition  to  Central Government,  a  Central  Government  company   or   a   Central   Government corporation.

It is also clarified that “As we have already found that the allocations made,  both  under the Screening Committee route and the  Government  dispensation  route,  are arbitrary and illegal, what should be the consequences, is the  issue  which remains to be tackled.  We are of the view that,  to  this  limited  extent, the matter requires further hearing.” The next hearing of the case will be on 1^st September.