The right vests with States, Supreme Court tells Centre

The Supreme Court on Thursday made it clear to the Centre that it had no power to allocate coal blocks to private companies and sought legal explanation from Attorney-General G.E. Vahanvati for making the allotments.

A Bench of Justices R.M. Lodha and J. Chelameswar told the AG that there was absolutely no power given to the Centre under the Mines and Minerals (Development and Regulation) Act, 1957. It was vested only with the States.

The Bench was hearing a petition filed by a group of prominent citizens and Common Cause, a non-governmental organisation, seeking cancellation of the allocation of captive coal blocks made from 1993 and a probe by a special investigation team. The petitioners included T.S.R. Subramanian, former Cabinet Secretary; N Gopalaswami, former Chief Election Commissioner; Ramaswamy R. Iyer, former Secretary, Government of India; Admiral (retd.) R.H. Tahiliani; Sushil Tripathi, former Secretary, Government of India; and Admiral (retd.) L. Ramdas.

They said that according to the CAG’s conservative estimates, the allocation between 2004 and 2010 caused a windfall gain of Rs. 1.86 lakh crore to private companies, making it a bigger scandal than the ‘2G scam’. There was a related loss to the public exchequer. “Various political and commercial vested interests joined forces to block competitive bidding [auction].”

A petition by advocate M.L. Sharma was tagged with this plea.

The Bench wanted to know from the AG whether the Centre derived any power to allocate coal blocks to private companies under the Coal Mines (Nationalisation) Act. Justice Lodha told Mr. Vahanvati: “You are required to give a lot of legal explanation. The question is: does the Centre have power under the MMDR Act and does it have the power to undermine the entire statutory mechanism? Can you override the statutory provisions of the Act? It is very doubtful, legally perhaps.”

Mr. Vahanvati said he did not want to give off-the-cuff answers. “I need time to go into these issues.”

Justice Lodha told the AG: “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.” Referring to counsel Prashant Bhushan’s submission that the Coal Secretary had filed an affidavit on how the blocks were decided by a Screening Committee, Justice Lodha observed: “This seems to be extra legal.”

Earlier, Mr. Bhushan wanted the CBI to file a status report on the probe conducted so far after it had registered three preliminary enquiries on coal allocations.

“Strange statement”

When Additional Solicitor-General Harin Raval expressed reservations about sharing the CBI probe details, Justice Lodha said: “ This is a very strange statement on your part. This is not the first case and probably will not be the last case in which the Supreme Court will be monitoring the investigations.”

The ASG assured the court that nothing would be kept back and detailed information of the probe would be provided. The CBI had already registered 12 First Information Reports and a comprehensive investigation was on. The probe would be completed in four months and a status report would be filed.

The Bench posted further hearing to March 12.