Under the law, coal block allocations are the Centre's prerogative, although it requires to ascertain the views of the states, which are the licensing authorities.
Accusing the government of exercising pervasive control in the matter of allocation of coal blocks and, consequently, the grant of mining leases, it told a bench headed by Justice RM Lodha that in some cases allocation letters came with recommendations and, many a time, the Centre overlooked the state government's recommendations.
The Naveen Patnaik-led government said that it had objected to some applications, but the Centre government still allocated them.
The Jharkhand government also supported the Orissa government in arguing that allocations were made by the Centre and the power to regulate and develop coal mines lies exclusively with the Centre. Answering a query by the bench, it said the state government can refuse to accept the Centre's allocation if the proposed lessee does not secure clearances or land rights, etc.
However, Prashant Bhushan said there was not a single case of rejection by the state government.
The Chhattisgarh government also argued that it had refused to proceed till allocations were made by the Centre. Allocations were final and binding and the states had only a limited role in the identification of parties or coal blocks, it added.
Earlier, the Centre had asserted its lead role in allocation of coal blocks to entities, saying it could not be bound by the recommendations of the state governments in all cases since it had to take care of the requirement of the country as a whole.
It was imperative for the central government to take a lead in the allocation process. This is because coal is a resource of national importance, but it is primarily concentrated in seven states. If the power to allocate coal blocks had been left to the states, then state governments might have allotted coal blocks to companies with end-use plants located in such states, the coal ministry said in its affidavit.
The ministry has pointed out that the Centre had to take a lead role in allocation of coal blocks, but states' views were taken into account by the screening committee. It is obvious that the central government's decision on allocation had to be final, and that it could not be bound by the recommendations of the state governments in all cases because the states may not have allowed coal blocks in their states to be allotted for end-use plants in other states, it said.