The government is not empowered to distribute scarce natural resources to ?favoured companies as largesse? without following any competitive, transparent and objective process of selection, counsel Prashant Bhushan, appearing for Common Cause, an NGO, told the Supreme Court on Thursday.
Stating that the entire allocation of coal blocks to private companies is illegal & unconstitutional, he argued before the bench headed by Justice RM Lodha that allowing private companies to make windfall gains amounted to violation of the principle of trusteeship of natural resources.
Under the Mines and Minerals (Development & Regulation) Act 1957, though leases/mining plans need the approval of the central government, it is the state government which scrutinises applications for mining leases, including for coal blocks, he said. However, in the case of coal, the entire process for grant of coal blocks for captive consumption since 1993 is completely the opposite, Bhushan argued. ?Here the central government was receiving the applications, deciding whom to allocate, for what end use and in which area. Only after the decision has been taken, state governments were signing the mining leases as per the Act. On this ground alone, all the allocations for captive coal blocks made since 1993 are illegal, against mandatory statutory procedure and are liable to be set-aside,? Common Cause stated.
Seeking cancellation of all allotments made to private companies and to public sector companies either through the screening committee or the government dispensation route, it said that the screening committee not only failed to follow any criterion, it also did not give any reason for the final selection either in its decision or in its minutes, it added.
According to the NGO, since the screening committee had itself been constituted through an executive order, the government did not find any legal hurdle in introduction of competitive bidding by an executive order.