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Updated: Aug 26, 2014 01:12 IST

In a major verdict, the Supreme Court on Monday declared illegal all coal block allocations between 1993 and 2010, saying these were done in an unfair, arbitrary and non-transparent manner without following any objective criteria.

Read:Chronology of coal block scam



A special bench headed by the Chief Justice of India, RM Lodha, however said further hearing was required to determine whether there is a need for cancelling around 200 coal block allocations.

The apex court held that 36 screening committees breached guidelines and that the coal block allocations were made without following any objective criteria.



“Allocation of coal blocks done under screening committee route and government dispensation suffers from illegality,” the court said. “The approach had been ad hoc and casual,”

The bench, also comprising Justice MB Lokur and Justice Kurian Joseph, fixed September 1 for further hearing to decide what action can be taken against the illegal coal blocks allocations, most of which were made by the Manmohan Singh government.

Regarding 12 Ultra Mega Power Projects (UMPP) for which coal blocks were allocated through competitive bidding, the SC said the companies involved can extract coal from these blocks only for the power projects these were meant for, and not for other commercial purposes. This was done in view of allegations that in some cases the government had allowed diversion of coal from UMPP to other end uses.



The bench suggested that a committee headed by a retired SC judge may be set up to examine what should be done for the re-allocation of these coal blocks. However, it clarified that it was open to any better option.



The order came on petitions filed by an NGO, Common Cause, and a lawyer, ML Sharma, seeking cancellation of coal block allocations over allocations of large scale corruption and favouritism.

The petitions were based on the Comptroller and Auditor General’s (CAG) report that the exchequer suffered a loss of Rs 1.64 lakh crore due to the arbitrary allocations of coal blocks.

The coal blocks allocated to private companies between 2004 to March 2010 are situated in Jharkhand, Chhattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh.

The top court has been monitoring the CBI probe into the scam and additional sessions judge Bharat Parashar at Patiala House Court has been appointed as a special judge to exclusively deal with cases arising out of it.