Apex court seeks logic behind coal allocation

Manmohan favoured bidding, says government

The Supreme Court on Tuesday appeared unhappy with the Centre’s contention that Prime Minister Manmohan Singh was in favour of competitive bidding during his tenure at the helm of the Coal Ministry.

The apex court instead asked the Centre to explain the decision-making process behind coal block allocations.

A three-judge bench headed by Justice R M Lodha asked the government why competitive bidding was not followed during the allocations, though the idea was mooted in 2004.

Attorney General G E Vahanvati defended the Centre and said, “The person who came out with the competitive bidding policy was none other than the prime minister.”

“That’s all right, but we are more concerned about the decision-making process here,” the apex court said.

Vahanvati said changes in the law to allow private participation in the coal block allocations for captive consumption were required in the wake of a severe economic crisis in 1991.

The bench, also comprising justices Madan B Lokur and Kurian Joseph, asked Vahanvati to establish validity of the procedure followed by the Centre in granting approvals to state governments for leasing out coal blocks.

The court also asked Vahanvati to explain if a screening committee functioned on the rules framed by itself or the government.

The court asked why the screening committee was set up to decide the coal block allocations, which was earlier done by Central Mine Planning and Design Institute Limited (CMPDIL).

“The CMPDIL was supposed to identify coal blocks and not the screening committee. It (CMPDIL) became an extra player as its role was played by the screening committee.

CMPDIL is entirely different from the committee. You must tell us what were the reasons for departure from that system,” the court told Vahanvati.