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Why some companies favoured in mineral allocation: SC to Centre

The Supreme Court questioned the Centre on why certain companies are always favoured in the allocation of mines and minerals which has resulted in creating "monopoly" for them.

New Delhi: The Supreme Court on Wednesday questioned the Centre on why certain companies are always favoured in the allocation of mines and minerals which has resulted in creating "monopoly" for them.

At the outset of proceedings in coal block allocation scam, a bench headed by Justice RM Lodha said the names of the companies in the list of coal allottees are same as those figuring in other cases pertaining to extraction of iron ore mines.

"Same companies are there in iron ore mines cases also which I heard earlier. You are creating monopoly in hands of certain companies. Same companies are there whether it is coal, iron ore or other resources," the bench, also comprising justices Madan B Lokur and Kurian Joseph, said without naming the companies.

Attorney General GE Vahanvati, however, said that no rule was violated by the Centre while allocating coal blocks to companies.

He submitted that coal blocks allocation is merely a letter of intent and does not confer any right to the companies over the natural resource which is decided by the state government.

Pushed on the backfoot by the Supreme Court on the various procedural infirmity in allocation, the AG submitted that decision of coal block allocation to companies is the first stage and firms get rights over coal only when they start mining for which they have to take various clearances.

"No right is created in favour of companies by allocating coal blocks. At the most it can be said that it is letter of intent," the AG said, adding that all procedure was followed in the allocations. The apex court also raised questions on delay in granting forest clearance to those companies which have been allocated coal blocks since 1993.

"Forest clearance which has to be given must have some reasonable meaning which must be given in a reasonable time. If no time-limit is fixed, it defeats the purpose," the bench observed while noting that even after more than 15 years of allotment of coal blocks there have been no forest clearance for several projects.

"The question is can it be a indefinite waiting for forest clearance. If it takes 20 years for forest clearance, is it not coming in the way of whole object of the coal block allocation," the bench said.

The bench also said in the scheme of things there is no idea how the Centre was thinking about the coal block allocation.

"The centre and its executives which took the decision never thought upon it to discuss allocation of coal blocks. The Centre and the PSU were only thinking to grant lease," the bench said, adding that "there was absolutely no contemplation of allocation".


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