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SC rules as illegal all coal blocks granted in 16 years since 1993

NEW DELHI, Aug 25 (Agencies) : The Supreme Court on Monday held as illegal all coal blocks allocated by the government to various companies between 1993 and 2009, and said a final decision on the fate of the coal blocks would be taken next week.

About 200 coal blocks were awarded during this period to private steel, cement and power companies for their own consumption.

”There was no transparency by the companies as well as the central government,” Chief Justice of India R.M. Lodha said in his observations. “On many occasions guidelines had been breached, the approach casual and at times illegal.”

Amit Anand Tiwari, a lawyer for the Central Bureau of Investigation (CBI), which is also investigating illegalities in coal-mine allocations, said wrongful grant of blocks had cost the public exchequer Rs 29,000 crore.

Earlier in the day, the CBI had said it was likely to close a coal scam case against billionaire Kumar Mangalam Birla and a former coal secretary that surfaced in 2012 after a report by the Comptroller & Auditor General of India.

The CAG had alleged that the government's under-priced sale of coal blocks may have cost the exchequer revenues of Rs 200,000 crore, although industry watchers and the previous government had cast doubts on the figure.

The CBI is likely to file a closure report on the case against Birla and former coal secretary P.C. Parakh very soon, CBI spokesperson Kanchan Prasad told Reuters.

“Obviously if a closure report is being filed there's no criminality (on the part of Birla and Parakh),” she said.

The CBI filed the case against Birla and Parakh late last year in relation to a block allocated in 2005 to Hindalco, part of the $40 billion Aditya Birla Group. Kumar Mangalam Birla is the chairman of the group.

The case had sparked widespread condemnation from industry leaders and politicians alike given Birla's stature as a leading Indian entrepreneur.

Hindalco had denied any wrongdoing and even the then Prime Minister Manmohan Singh, who was in charge of the coal ministry when the allocation took place, defended the decision to award the block to Hindalco.

Accusations of crony capitalism in allocating India's resources from coal to mobile telephone bandwidth had dogged the government of Manmohan Singh.


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