Govt rules out relief for cancelled coal block owners

The Centre on Thursday told the Supreme Court that those having plants and factories in the cancelled coal blocks would not be provided any compensation in the proposed auction of over 200 blocks on February 14.


Attorney General Mukul Rohatgi submitted before a bench of Justices J Chelameswar and R F Nariman that there was no move on the part of the government to acquire plants and factories of the coal block allottees.

He referred to the apex court order of September 24 quashing allocation of 214 out of 218 coal blocks alloted to various companies since 1993, terming it as "fatally flawed" and allowed the Centre to take over operation of 42 such blocks which were functional.

“The order is very clear, we are not acquiring anybody’s end-use plants or factories. If anyone files a writ petition, everything would come to standstill. In such a situation, there would energy crisis in the country. We need coal for energy and steel industry,” Rohatgi said.

He was responding to the contention of senior advocate Kapil Sibal, who said that the government’s recent ordinance for auction was silent as to what was going to happen to structures created in those coal blocks likely to be put to auction.  Sibal, appearing for Sova Ispat Ltd, a West Bengal-based company, submitted that the company had invested about Rs 400 crore for creating its plant in the coal block. The company has sought interim stay on the auction on the coal block attached to an operational steel plant.

“There is no process for compensation. What is going to happen to our structure. Let them put the structure for auction as well. Why should I suffer for the wrong policy of this or the previous government,” he submitted on behalf of the firm.

“There are hundreds of end-use plants. We can't do it (provide compensation) since the participating bidders may not be interested in acquiring the plants,” Rohatgi responded.

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