NEW DELHI (TIP): A year after turning the searchlight on alleged irregular allotment of coal blocks, the Supreme Court on September 26 sought to know the role played by the seven coal producing states in the entire process, starting from allocation by the Centre to commencement of mining operations by private parties. A bench of Justices R M Lodha, Madan B Lokur and Kurian Joseph formulated four questions and sought responses to them from Jharkhand, Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, Andhra Pradesh and Maharashtra by October 29.

With majority of these states ruled by parties who are not on the same political plane as the Congress-led UPA, they would not lose an opportunity to score brownie points against the Centre given the proximity of assembly polls and general elections. The issuance of notices to the states to understand their role in the coal block allocation process had become imperative after attorney general G E Vahanvati argued that the Centre had discharged its statutory role of a regulator by merely identifying the coal blocks while the rest of the formalities – signing of mining lease and all environment and forest clearances — squarely rested in the domain of states.

Vahanvati had also said that coal block allocation letters, “at the highest”, could be treated as letters of intent conferring zero right on allottees as far as mining was concerned. “It is not a bankable document,” he had said. Apart from answering the issues raised in the two petitions – one by advocate M L Sharma and the other by NGO ‘Common Cause — the court asked the seven states to respond to four more questions: * How did the states understand the allocation of coal blocks by the central government? * What was the role of state governments in the allocation of coal blocks? * What was the role of state governments in the subsequent steps having regard to the provisions of Mines and Mineral (Development and Regulation) Act, 1957? * The details of agreements entered into by state public sector undertakings (PSUs), which were allotted coal blocks, with private parties in coal blocks located in their states.

The last question about the status of joint ventures came to be included after intervenor Sudiep Srivastava through advocate Sanjay Parikh alleged that these joint ventures were illegally entered into by the PSUs, giving away coal mining rights to private parties. Moreover, many of the private allottees had no financial and technical capabilities to undertake the task. The court also sought the states’ view on competitive bidding. Vahanvati said, “States were crucially involved in coal mining operations.When the decision relating to competitive bidding was floated, most of them opposed it. They are the owners and that was their view.”

He said the coal block allocation letter was mere initiation of the process, which was evident from the fact that many private companies, which were allotted coal blocks, were yet to sign mining leases given the reluctance of state governments to feed coal to projects situated outside their states. “As many as 27 mining leases in a particular state have not been executed and held up because it is saying why should it give coal to private parties whose projects are located outside the state,” the AG said. Though the AG did not take the name of the state, it was obvious that the state in question was Odisha.

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The AG said, “The state is saying why not use the coal for its own PSUs.We have taken up the matter with the chief minister and are persuading him that coal is a national asset. It is a very sensitive issue.” But the bench saw the flip side of such reluctance on the part of the states and asked, “If this is the ground reality after 11 years of allocation of coal blocks, they why did the Centre go on allocating fresh coal blocks without sorting out the issues with the states.”

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