Coal blocks put Centre in legal trouble

Expressing doubts over the procedure and manner in which 218 coal blocks with reserves of about 50 billion tonne were allotted to some private and public sector companies, the Supreme Court on Thursday told the central government that it will have to give a lot of “legal explanation” for such allocations, which the comptroller and auditor general (CAG) alleges had made the exchequer suffer a loss of Rs1.86 lakh crore.

A bench comprising justices RM Lodha and J Chelameswar directed the Centre to examine Mines and Minerals (Development and Regulation) Act, 1957, and the Coal Mines (Nationalisation) Act carefully to determine if it had the power to allocate blocks of the natural resource.

“There is absolutely no power given to the Centre under these legislations,” the bench said while hearing two public interest litigations (PILs)  seeking cancellation of the allocations. It observed that the “grant of mining leases must be by the state.”

“The question is does the Centre have the power under the Acts and does it have the power to undermine the entire statutory mechanism? Can you override the statutory provision? It is very doubtful, legally perhaps,” it said.

Attorney general Goolam E Vahanvati said he did not want to give “off-the-cuff answers’’ to the court’s queries and sought time to go into these issues again.

The court also ordered him to place before it its judgment in the petrol pump allocation scam, in which it had appointed a panel to look into all allocations. The court adjourned the hearing for six weeks.