Coal block awards are illegal: India top court
August 26, 2014, 12:05 am TWN
NEW DELHI--India's top court ruled on Monday that all coal block allocations made by the government between 1993 and 2009 were illegal, throwing the already energy-starved country's power sector into turmoil.
The court said there were "legal flaws" in the process of awarding coal blocks in India, which relies on the black fuel for two-thirds of its power generation.
The allocation of coal mines has long been beset by allegations of corruption, which came to the fore under the previous Congress government in a scandal dubbed "coalgate."
"The allocation of coal blocks (between 1993 and 2009) based on the recommendations made in all the 36 meetings of the (coal block) screening committee is illegal," said Supreme Court Chief Justice Rajendra Mal Lodha.
"There was no transparency and guidelines have seldom guided it (the screening committee)," the judge said.
He added that the process suffered from "legal flaws and arbitrariness" and declared that "common good and public interest have thus suffered heavily."
Critics had charged state officials had colluded with private companies to underprice coalfields at public cost running to billions of dollars.
Many of the mining blocks had been awarded during the tenure of the previous Congress government, led by former Prime Minister Manmohan Singh.
Singh, who also served as coal minister between 2006 and 2009, had strongly denied any wrongdoing in the allocation of the coal blocks.
Lawyer Prashant Bhushan who had been a key figure in the legal fight against the allocations called the Supreme Court ruling "historic."
The Supreme Court said that a further hearing would be held on September 1 to consider the "consequences" of its ruling.
Some of the coal block allocations are still lying idle, but mining is underway in others.
India has one of the biggest proven reserves of coal in the world, but disarray in the sector means demand still outstrips supply.
Power shortages routinely cause electricity outages lasting hours in some parts of India and are seen as impeding economic growth.
Meanwhile hundreds of millions of people in the country of 1.25 billion are completely without electricity.