The Telegraph
Thursday , January 9 , 2014
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Court talks tough on coal mess

New Delhi, Jan. 8: The Supreme Court is not prepared to accept the argument that coal block allocations made between 1993 and 2012 ought not to be cancelled because the allottees had pumped in Rs 2 lakh crore into these ventures even though they hadn’t received all the necessary approvals.

The court said the allottees must suffer the consequences of their gross violations of acceptable practices irrespective of how much investment was made.

“No law will help them,” the court said as it spurned the government’s submission that precipitate action would hurt investors.

“We are not bothered. Let the amount go down the drain. An alleged illegality cannot be compounded by another unauthorised action,” the apex court told attorney-general G.E. Vahanvati appearing for the Centre.

A three-judge bench of Justices R.M. Lodha, Madan B. Lokur and Kurien Joseph said the companies that invested money in blocks without getting all clearances took the decision at their own risk.

The court said any investment made in anticipation of clearances could not be justified and such blocks could not be protected if the companies failed to get clearances within a time frame fixed under the law.

“My goodness! What right has accrued to you! It is like saying someone in anticipation of purchasing a land has already started digging the place and laying the foundation!

“It (allocation) does not mature into a right. All these investments and expenditure must be in contemplation of a right. If the right has not matured, no equity or right accrues,” Justice Lodha, who heads the bench, observed.

The court asked the Centre to respond whether it intended to deallocate such blocks.

Vahanvati had tried to impress upon the bench that as the allocations had been made since 1993 and considerable investments had been made, the decision to cancel, or otherwise, be left to the Centre.

Vahanvati’s contention was that while some of the projects had become operational, certain others were at various stages of completion. He, however, offered to report back to the court on Thursday as to whether the Centre was willing to deallocate about 32 projects awarded after 2005 but yet to become operational.

The bench granted the attorney-general time till tomorrow to place the government’s view.

The apex court made the observation while dealing with a plea — filed by M.L. Sharma, an advocate, and NGO Common Cause of advocate Prashant Bhushan — alleging large scale illegal allocation of coal mine blocks in the country between 1993 and 2010, which reportedly resulted in an estimated loss of over Rs 1.75 lakh crore to the exchequer.

Meanwhile, in an embarrassment to the Centre, Maharashtra (which is a Congress-ruled state) also submitted before the apex court that the allocation of coal blocks was “entirely controlled and regulated” by the Union government and the state was just a subordinate party.

The state contradicted the stand taken by Vahanvati that the Centre’s role was confined to just the identification of coal blocks.

The Andhra Pradesh government had views similar to Maharashtra. Bengal, Madhya Pradesh, Jharkhand, Odisha and Chhattisgarh had earlier told the apex court that they played a minimal role in allocation and had blamed the Centre for alleged irregularities.

Fresh cases

The CBI has filed two new FIRs covering the 1993-2005 period against BLA Industries and its managing director and BJP leader Anup Agarwala, Castron Technologies, and Castron Mining for the highly irregular allocations of coal blocks.

The CBI has alleged in its FIR that BLA Industries, which has its registered office in Mumbai, got two coal blocks in Madhya Pradesh and was selling coal in the open market. The coal being sold in the open market was worth at least Rs 100 crore annually, official sources claimed.

The firm had got coal blocks on June 21, 1996 during the tenure of former Prime Minister H.D. Deve Gowda.

In its second FIR naming Calcutta-based Castron Mining and Jharkhand-based Castron Technologies, the CBI alleged the coal block in Jharkhand was allocated in violation of guidelines. The block was allocated on September 1, 1999 during the BJP government’s tenure.