Supreme Court cancels 214 of 218 coal block allocations; gives operational mines 6 months to wrap up

The Supreme Court has deallocated 214 coal blocks out of the 218 coal blocks allocated since 1993. The 4 coal blocks which are exempt from the verdict arerun by the Central government with no joint venture with the private sector. Two of them are with NTPC and SAIL, and the other two have been allocated for ultra mega power projects udner competitive bidding.

The Supreme Court said that it saw no reason to save the blocks as the allocations were arbitrary. All the companies have also be fined at Rs 295 per mega tonnne for the loss suffered by the country, and in this case, the Court has accepted CAG's estimation of the loss.

For all the blocks deallocated, the government is now free to hold auctions or give them to the central firm, Coal India.

It has asked coal blocks which are already operational will get 6 months to wrap up their operations. After 6 months, the blocks will be handed over to Coal India. But the power producers dependent on these coal blocks will not suffer as even after Coal India takes them over, it will continue to provide coal to the power producers.

For the CBI enquiry that is already on against the coal allocations during the UPA regime, the court said that the enquiry will continue. The Court has also said that coal from captive mines can be used only to generate power and cannot be used for any competitive bidding.

On August 25, the Supreme Court had said that the coal block allocations were illegal since 1993. It had said that the government did not adhere to proper guidelines and no objective criteria were being followed either. However it has not deallocated coal blocks yet and said that would require further hearing to see if it needed to deallocate 218 coal blocks. 

Jindal Steel and Power lost 11% immediately after the verdict. It is trading at Rs 188.25 at 2.45 pm. Hindalco lost 1.2% and is trading at Rs 155. Coal India is up 3.8% at Rs 347.25.

Aam Aadmi Party leader Yogendra Yadav tweeted immediately after the verdict thanking Prashant Bhushan for "saving" the money of billions of people in the country.

Thanks Prashant Bhushan ji for saving india's reputation and billions of people's money. This is true patriotism. #AAPkaPrashantBhushan

— Yogendra Yadav (@AapYogendra) September 24, 2014

BJP spokeperson Sambat Patra said, he welcomes the Supreme Court judgment.

We welcome SC's judgement,today our stand has been vindicated : Sambit Patra,BJP on SC's verdict on coal blocks pic.twitter.com/9aqLNk8okr

— ANI (@ANI_news) September 24, 2014