The Supreme Court said on Tuesday that the allocation of coal blocks prima facie seemed arbitrary and the procedure the government adopted did not appear legal.
A Bench of Justices R.M. Lodha, J. Chelameswar and Madan B. Lokur also made it clear to the Centre that it had no power to allocate coal blocks to private companies and sought a legal explanation from Attorney-General G.E. Vahanvati.
The Bench asked the Central Bureau of Investigation (CBI) Director to file an affidavit stating that he had gone through the status reports filed by the agency and no details of the probe were being shared with the political executive.
The court was hearing a public interest litigation petition filed by various members of civil society, including the former Chief Election Commissioner, N. Gopalaswami, the former Navy Chief, L. Ramdas, the former Cabinet Secretary, T.S.R. Subramanian, and advocate M.L. Sharma, seeking a probe by a Special Investigation Team into the scam.
After going through the report submitted by the CBI, the Bench warned that the allocations would be cancelled if the procedures were not followed. It asked Mr. Vahanvati how the 100-odd applicants were selected from a pool of more than 2,000.
Justice Lodha observed that no proper procedure was followed in the evaluation of the bidders. He told Mr. Vahanvati: “There are two issues: one relating to the legality of the allotments and the other relating to the criminal investigation. First, we would hear on the question of legality of allocation.”
Counsel Prashant Bhushan, appearing for Common Cause and others, said all the allotments were illegal since the coal blocks were given away free without any auction, and for extraneous considerations.
In the status report, the CBI said the allocation during 2006-2009 was done without verification of the credentials of the companies that had allegedly misrepresented facts about themselves.
When Justice Lodha referred to the CBI report which “prima facie alleges irregularities,” the Attorney General said: “The CBI is not the final word on this.” But he said the government had no problem with the probe and wanted the court to give him a copy of the report. “I am not trying to pre-empt the inquiry. I have no problem with it. Let the CBI probe the allocation.”
Justice Lodha said: “The government should make a statement cautiously as it might affect the ongoing probe. Your comments must not prejudice the inquiry. If you are challenging the very conspiracy angle of the controversy, then it would affect the probe.”
Mr. Sharma submitted that if the allotment went against the law, it was liable to be cancelled.
Mr. Bhushan said the screening committee did not follow any criterion, nor did it give any reason for the selection either in its decision or in its minutes.
