Coal news and updates

The power and steel manufacturers' associations on Thursday trashed the Centre's claim before the Supreme Court that the coal block letters of allocation (LoA) merely identified the mines without conferring mining rights and that the LoAs were not bankable documents. 

 

Appearing for Sponge Iron Manufacturers Association and Indian Power Producers Association, senior advocate Harish Salve said it was erroneous on the Centre's part to tell the court that the LoAs were not bankable and that the industry was hurt by such statements. 

 

Prior to a bench of Justices R M Lodha, Madan B Lokur and Kurian Joseph reserving its verdict on two PILs which sought cancellation of coal block allocations and their auction, Salve said, "To suggest that commercially and as a matter of commercial practicability, such LoA is not bankable is factually erroneous. On the contrary, banks have insisted upon obtaining LoAs as condition to draw down letters in a number of cases." He also criticized the Centre for trying to wash its hand off the controversy and allocations without taking responsibility for it. 

 

Without referring to the government's roadmap to cancel 61 coal block allocations, the associations said they were bothered by the intention of the government to nonchalantly walk away from the allocations it did over the years without thinking twice about its impact on the steel and power industries. 

 

Salve said, "The LoA is not a mere piece of paper to be torn as and when the Centre wishes to. It cannot do so even if one agrees with the government's proposition that these were not conclusive documents. The government cannot just walk away from the LoAs. That is what is bothering us."

 

The associations also said it would not be easy for the Centre to implement its recent decision to give up to six weeks to private parties, who were long back allotted coal blocks which had not become operational because of a variety of reasons, to make their end-use projects functional or face de-allocation of coal blocks. 

 

Salve said a party "whose letter of allotment has been cancelled is not only entitled to be heard in the process but would have full right to legal recourse against any action prejudicial to his interest". 

 

For NGO 'Common Cause', advocate Prashant Bhushan agreed with the other PIL petitioner M L Sharma's argument that the Centre had usurped the role of the states, which were given primacy in coal block allocation under the Mines and Mineral (Development and Regulation) Act. 

 

Sharma had argued that the Centre was to either give or refuse consent to coal block allottees selected by states. But in practice, the Centre chose the allottees and the states merely completed the formalities for grant of mining lease after ensuring that procedural requirements were met. 

 

Bhushan said, "There is nothing in the Coal Mines Nationalization Act which provided that power of allotment vesting with state governments had been transferred to the Centre." Both petitioners sought cancellation of all coal block allocations and their auction on the lines of the judgment in the 2G spectrum case. 

 

After reserving verdict on the validity of coal block allocations, the bench told senior advocate Amarendra Saran that it would consider the CBI's investigation status report on February 10.

 

 

Source: ToI