SC questions Centre’s authority to allot coal blocks, says coal a state mineral

Enumerating the legal provisions, the court noted that coal was a state mineral, falling in the appropriate schedule of the Act, which accorded legal control to state governments over the blocks. However, the state apparently has no power since the Central government approves allocation and the states are left with no choice but to enter into agreement with such allottees, the court said.

"The problem is that there is absolutely no power given to the Central government under the Act. The question is if the government's power of prior approval extends to you the authority to allocate coal blocks by overriding the entire statutory mechanism under the Act? Can you override the statutory process by administrative or executive orders?" asked the bench.

Critical of the current policy, the bench said the Centre's actions amounted to "putting a cart before the horse" since there was no discretion left with the state governments in the matter of allocation. "It strikes at the root of all allocation," said the bench.

The court, which went through the Coal Secretary's affidavit in response to a bunch of PILs challenging the allocation of coal blocks, further noted that while the Ministry of Coal had approved the allocation in some cases, the screening committee had also cleared a few cases.

"Under the Rule of Business, has the Screening Committee been given any power? If it has not been authorised under the Rule of Business, the whole exercise had to be deemed extra legal," said the court. The screening committee is an inter-ministerial group chaired by the Coal Secretary.

Justice Lodha, who had last year authored a significant judgment in the Monnet Ispat energy case relating to grant of leases of iron ore mines in Jharkhand, told the AG that unlike in the Monnet case, the Centre had not acquired coal and hence states continued to remain the owners.

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