SC questions government’s power to allocate coal blocks

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The Supreme Court on Thursday questioned the Centre's power to allocate coal blocks to firms. (Reuters) The Supreme Court on Thursday questioned the Centre's power to allocate coal blocks to firms. (Reuters)
Summary'Relevant Act in fact empowers only states to undertake this task.'

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 told the Centre.

Attorney general GE Vahanvati said he does not want to give 'off the cuff' answers to these questions and sought time to go into these issues.

"From your affidavit itself it appears that minerals-and-mining lease has to be executed by the state and not by the Centre. It strikes at the root of all allocations," the bench said.

“As per law, the Centre will do allocation but terms and conditions of allocation have to be in consonance in the Coal Mine Nationalisation Act and the MMDR Act,” said Dilip Kumar Jena, senior consultant and knowledge manager, PWC. “Unless states grant mining leases, allocatee cannot start mining.”

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