The Centre has informed the Supreme Court that it might cancel 41 coal block allocations made between 1993 and 2009 that were yet to be mined. The government submitted on Wednesday that in the case of 61 other allocations, companies had been asked to remove deficiencies within four to six weeks.
The Supreme Court pulled up the Centre for its "laxity" in de-allocating coal blocks of companies that held them for long without obtaining necessary clearances, and questioned the working of the screening committee which purportedly gave preference to certain private firms during 2007-08 without any recommendation from the Central Electricity Authority and the Ministry of Power.
The court sought to know from Attorney-General G.E. Vahanvati the guidelines followed by the screening committee, observing that minutes of the meetings did not show any.
The Supreme Court on Wednesday put a spanner in the Centre's works to put 'Coalgate' on the backburner by asking how 11 private firms which never went though the screening process were allocated coal blocks during a period when Prime Minister Manmohan Singh held charge of coal ministry.
The court, in fact, asked the Centre to dispel lurking doubts about 'arbitrariness' in allotment of coal blocks.
The poser came immediately after attorney general G E Vahanvati informed the court about the Centre's decision to give between 4 to 6 weeks to 61 private coal block allottees to convert their allocation into firm mining lease or face cancellation. Vahanvati's offer was part of a move by the Centre to disengage the PMO from the 'Coalgate' stink, as well as head off the prospect of SC ordering blanket cancellation of the allocations like in the 2G spectrum scam.
Being seen as ready for cancellation of the unutilized coal blocks would help the government impress upon the bench of Justices R M Lodha, Madan B Lokur and Kurian Joseph that it had no vested interest in protecting the allocations.
But with the judges not letting go of the matter yet, the government and Congress may have to live with the fear of adverse pronouncements and, even, setbacks in the politically sensitive case which along with other corruption cases sapped the goodwill of UPA-2.
The hearing on Wednesday saw Vahanvati clarifying that the roadmap for de-allocation of coal blocks was irrespective of the ongoing CBI investigation. The court agreed with the AG and said, "The criminality aspect of allocations will still be investigated by the CBI even if some of the allocations get cancelled."
On coal block allocations between 2006-08 when the PM held charge of coal ministry, the bench sought to know what were the criteria adopted by the screening committee to reject nearly 100 applications by private parties.
From the records, the bench found that there were over 178 applicants who gave presentation seeking allocation of coal blocks for setting up power plants. Of these, the list was pruned to 115 on pre-qualification scrutiny and 44 were shortlisted as serious contenders. Later, only 28 were recommended to the screening committee by the power ministry for allocation of coal blocks. But the committee found only 20 suitable and allocated coal blocks.
The bench said, "We do not know how and why the final allotment figure came down to 20. It also says 11 more companies were recommended by the screening committee. How did the screening committee introduce this 11? Where and how screening committee gets this 11, we need explanation.
"Of the 28 recommended by the CEA and approved by the power ministry, 20 were accepted by the screening committee. But what criteria were adopted by the screening committee to reject eight. How were 11 added without these being part of the screening process? So, what were the parameters on which competitive merits were assessed by the committee?"
On the submissions of advocate Prashant Bhushan, the bench also asked the Centre to clarify how many of these power plants, which were allocated coal blocks on the promise that they would make the plants functional in five years, have actually started producing electricity. All these clarifications will be provided by the Centre on Thursday.
The queries from the bench came after Vahanvati informed the court that the Centre had decided to give 4 to 6 weeks time to 61 coal block allocations from 1993 to 2008 to translate their allocations into mining leases.
Vahanvati said, "Coal blocks where environmental and forest clearance have not been obtained, three weeks time will be given to allottees to obtain and submit proof of clearances, failing which a decision will be taken to de-allocate blocks within one week thereafter." Most of the allocations fall within this category.
However, the court asked the Centre not to proceed in five cases, where it had intended to give three weeks for the allottee to acquire mining licence from the state government or face cancellation.
The Supreme Court appreciated the "methodical" work done by attorney general G E Vahvanvati and his team of juniors in presenting documents relating to allocation of coal blocks during the hearing on PILs seeking their cancellation alleging that they were done in an irregular manner.
When the bench headed by Justice Lodha commended the manner of presentation of Centre's case, the AG immediately directed the appreciation towards his junior Rohit Sharma.
Sharma had caught the eye of the court as the bench said, "Yes, we find him having on the tip of his tongue the page number where a particular document could be found. We do not know what will happen to the coal block allocations, but Sharma's work methods have been a pleasure to watch."
A Bench headed by Justice R.M. Lodha and including Justices Madan B. Lokur and Kurian Joseph sought an explanation for the screening committee decision to accept 20 of the 28 recommendations from the competent authorities, reject the rest and, on its own, add applications of 11 other private firms for allocation.
In a related development, the Central Bureau of Investigation sought permission from the court to forward a proposal to the Union Home Ministry for issuance of a Letter Rogatory to Malaysia.
The agency proposes to send the judicial request seeking information on a Malaysian company which was shown as part of the consortium of a company named as accused in one of the coal block cases registered in 2012.
CBI investigations indicated that the Rs.4,600-crore Malaysian firm had only sent an expression of interest to enter into an agreement, but the accused company, worth about Rs.2 lakh, while applying for a coal block in Chhattisgarh, allegedly inflated its worth by including that of the Malaysian company.