SC says coal blocks allotment flawed, asks govt to explain

In fresh trouble for the government in the coal blocks allotment controversy, the Supreme Court Tuesday said the allotments, prima facie, seem to be arbitrary and irrational and the procedures adopted do not appear to be proper and legal.

Pointing out what it called a huge loss to the exchequer and a "new dimension" added by the CBI's investigation, a bench led by Justice R M Lodha questioned the manner in which 1,950 applications for coal blocks were rejected while approving applications by 151 firms for 68 blocks between 2006 and 2009.

"For what reasons 1,950 applications were found ineligible is anybody's guess. You will have to tell us whether among the applicants the consideration was objective or simply pick and choose," the bench asked Attorney General G E Vahanvati.

Warning that the entire allotment could be scrapped if no parameters were adopted for allotment, the court said it would not go into individual cases but would certainly want to know if there was a well-defined and structured policy or not.

"The procedure the government is talking about, prima facie, does not seem to be proper and legal," the bench said, asking Vahanvati to explain another "fundamental question" as to why the policy of competitive bidding, decided in 2004, was not implemented until 2012.

Hearing PILs by lawyer M L Sharma and NGO 'Common Cause', the court relied on the CBI's inquiry report submitted as per its last order. Citing the report, the bench said the CBI has found "there was no system in place to verify the vital facts and claims of a company regarding its track records, financial strength and preparedness".

Several companies got coal blocks on "misrepresentation" and that records pertaining to the allotment of 53 coal blocks did not reveal the rationale behind recommending or not recommending a particular entity, according to the CBI.

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