Coal Block allocation since 1993 by the Central Government illegal

Supreme Court: Pronouncing the much awaited judgment, the 3 judge bench of R.M. Lodha, CJI and Madan B. Lokur and Kurian Joseph, JJ declared the allocation of coal blocks since 1993 by the Central Government to be illegal and unconstitutional. Taking into account the allocations made through, both, the Screening Committee route and the Government dispensation route, the Court held that the approach of the Screening Committee has been ad-hoc and casual and there was no fair and transparent procedure, all resulting in unfair distribution of the national wealth.

Regarding the allocation of coal blocks through Government dispensation route, it was held that the same was invalid as per the Coal Mines (Nationalisation) Act, 1973 as under Section 3 of the said Act; no State Government or public sector undertakings of the State Governments are eligible for mining coal for commercial use. The Court elucidated upon the said provision and said that only an undertaking satisfying the eligibility criteria referred to in Section 3(3) of the CMN Act, viz., which has a unit engaged in the production of iron and steel and generation of power, washing of coal obtained from mine or production of cement, is entitled to the allocation in addition to Central Government, a Central Government company or a Central Government corporation.

The order of the Court came upon the subject matter of group Public Interest Litigations by Manohar Lal Sharma appearing-in-person  and Common Cause represented by Prashant Bhushan. Goolam E. Vahanvati, arguing on behalf of the Central Government, vehemently argued in order to justify the allocation of coal blocks by saying that the Central Government was not only empowered but was duty bound to take the lead in allocation of coal blocks and that is what it did. The said contentions of the respondents were rejected by the Court, thereby, declaring the allocation of coal blocks to be illegal; however, it was held that the issue relating to consequences of declaring the allocations illegal and arbitrary required further hearing. Manohar Lal Sharma v. Principal Secretary, Writ Petition (Crl.) No. 120 of 2012, decided on 25.08.2014

To read the full Order, refer SCCOnLine

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