Big investments without clearances no defence against cancellation of coal block licences : SC

OST Bureau

New Delhi, Jan 8 :

In a significant and tough stance, the apex court today said that huge investment made by companies in coal blocks in anticipation of getting mandatory clearances cannot be a ground for not cancelling their licences.

A three-judge bench of the Supreme Court headed by Justice R L Lodha asked the Centre whether it would consider de-allocating such allocations.

The apex court made a significant observation saying the companies which invested money on coal blocks without getting all clearances did so at their own risk and must suffer consequences of illegalities involved, irrespective of the amount invested by them.

This observation came in response to  the Attorney General’s contention that around Rs two lakh crore have been invested in such blocks and that would make it difficult to cancel the licence just on the ground that they have not got the clearances.

The bench said all such investments would ‘go in drain’ and cannot become an excuse to get away with the law.

The apex court said any investment made in anticipation of clearances cannot be used as a pretext to protected the companies if they fail to get clearances within the time frame fixed as per law.

Meanwhile Maharashtra submitted before the apex court that coal blocks allocation is “entirely controlled and regulated” by the Central government and the state government plays a secondary role.

Earlier, in response to  the apex court’s order to submit affidavits stating their position vis a vis coal block allocations, coal bearing states like Andhra Pradesh, West Bengal, Madhya Pradesh, Jharkahand, Odisha and Chhatisgarh governments had made it clear that they play a marginal role in coal blocks allocation while it is the Centre which has the upper hand.

The stand taken by the state governments contradicts the Centre’s submission before the apex court in September last year that allocation by it is limited to identification of blocks and at the most issuing a letter of intent to the concerned companies which does not confer any right to them over the mineral resource. The effective part is played by the state government, the Attorney General had told the apex court.

The Supreme Court is currently scrutinising coal block allocation since 1993 in response to three PILs seeking cancellation of blocks on the ground that rules were flouted while giving away precious and non-renewable natural resources, only to benefit certain companies..