SC questions government’s power to allocate coal blocks

Though what the the apex court has said is just an observation, it is still a big setback to the Centre, which is already rattled by the adverse remarks made by the Comptroller and Auditor (CAG) in a recent performance audit of coal blocks. The CAG observed that private companies got undue benefits of R1.85 lakh crore because of a delay in the auction of coal blocks.

“There is absolutely no power given to the Centre under the Mines and Minerals (Development and Regulation) Act, 1957. There is no provision overriding the Act. You require to give a lot of legal explanation,” the court said, adding that “allocation of coal blocks, prima facie, does not seem to be backed by any statutory provision and that surprises us.

The situation raises a few fundamental legal questions right away regarding your (Centre's) authority. If there has been no amendments in the Act, it is doubtful that you can do it through executive decisions.”

Critical of the current policy, the bench said that the government's actions amounted to “putting a cart before the horse” since there was no discretion left with the state governments in the matter of allocation.

“It strikes at the root of all the allocation…Can you override the statutory process by administrative or executive orders? The fundamental question is if there are provisions empowering the government to allocate coal blocks without following the procedure contemplated in the Act,” the bench

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