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Centre cites SC on coal

New Delhi, Aug. 30: The government today dug out a 2006 verdict to argue that the Supreme Court was against auction of coal blocks as law minister Salman Khurshid questioned the presumptive revenue loss of Rs 1.86 lakh crore in the allocation of 57 blocks.

Congress spokesperson Manish Tewari, who addressed a joint media conference with Khurshid, read out the verdict that had nullified the NDA government’s plan for e-auction of coal blocks.

The verdict had said the central government and coal companies were expected to “harmonise the business potential of a country to benefit the common man”, and the state, while fixing the price for the purpose of equitable distribution or otherwise, “cannot be actuated purely by a profit motive”.

“It should not discharge its functions in such a way as to aspire to earn huge profit especially at the cost of those who are fully dependent upon them for the supply of a monopoly item like coal. The methodology for allocation of coal to a bidder of e-auction is thus inequitable, irrational and fatuous. The scheme of e-auction, is therefore, ultra vires of the Constitution of India.”

Khurshid said the government could not have ignored this view while formulating policies. He also referred to the presidential reference the government has moved in the Supreme Court on auction of valuable natural resources in the context of a 2G verdict that made auction of such resources mandatory.

Khurshid then proceeded to question the Rs 1.86 lakh crore figure in the CAG report, which said the loss resulted because of the allocation of the 57 blocks without competitive bidding.

“In the same paragraph where this amount is mentioned in the report, the CAG says a part of this financial gain could have been tapped by the government by taking timely decision on competitive bidding for allocation of coal blocks,” he said.

This means, he argued, even the CAG is not saying anybody caused a loss of Rs 1.86 lakh crore.

Khurshid said the CAG should have clarified what portion of this amount could the government have tapped. “Majority of it, half of it, 25, 15 or 5 per cent, how much? Out of this amount, the companies have to pay royalty of 14 per cent, which some estimates put at 90,000 crore. The earning will then attract corporate tax. Even the price depends on grade of coal and net present value.”

Asked about the demand for cancelling the allocations, he said: “No de-allocation will happen because of the CAG report or the Opposition’s ruckus.”

Bills passed

The government today passed the Chemical Weapons Convention (Amendment) Bill and the All India Institute of Medical Sciences (Amendment) Bill in the Lok Sabha by voice vote without discussion.