The Supreme Court on Wednesday suggested to the Centre to cancel coal blocks that have not received environmental clearance. The court said huge investments could not be a ground for not scrapping the licence.

A three-judge Bench, comprising R.M. Lodha, Madan B. Lokur and Kurian Joseph asked Attorney General G.E. Vahanvati “why not de-allocate coal blocks in which companies do not have forest and environmental clearance. You have already de-allocated 40 blocks. Why don’t you do it for the 29 blocks of private companies?”

When Mr. Vahanvati said that it would be difficult to cancel the licences as the companies had invested about Rs.2 lakh crore, Justice Lodha said “any amount of investment will not give them the right if they have only allocation letters, and no clearances and prospective licences. The companies which invested money on blocks without getting clearances took the decision at their own risk. They must suffer consequences no matter how much investment has been made.”

When the bench wanted to know whether the government “intends to de-allocate such allocations,” Mr. Vahanvati said: “We are reviewing it and we need time to inform the court.” Justice Lodha said, “Any investment made in anticipation of clearances cannot be justified and such blocks cannot be protected if the companies fail to get clearances within a time frame fixed under the law.”

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