The Supreme Court's verdict to scrap 214 out of the 218 coal blocks allocations drew sharp criticism from the corporate sector, which feared that the decision would have an adverse impact on the economy.
Director General of the Association of Power Producer, Ashok Khurana, said the verdict will have far reaching effects for investment climate in India and its now to be seen what the government plans so that this has minimum impact.
"The Supreme Court judgment brings an end to an uncertainty prevailing since the last three to four years. However, it also causes and deepens the crisis for the coal deficit. The Supreme Court has given six months to the government to draw out a mitigation plan. It is now to be seen how the government draws out the mitigation plan to ensure a seamless transfer of these mines from private to public," said Khurana.
"The mitigation plan needs to be drawn in full consultation with the developers and the bankers so that their views are also incorporated. Further litigation in this matter needs to be avoided because it will have adverse consequences for coal and power production," he added.
Khurana said the developer has become the victim due to the government's illegal actions.
"All those who did something wrong are already with the CBI. The developers applied for the allocation as per the government rules," he added.
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Khurana further said that if a government action is questioned by the court after 20 years then it creates trust deficit.
The Executive Vice President at Jindal Steel and Power Limited, Pradeep Tandon, said the Supreme Court's verdict will have huge implications for them and it will affect their production costs, product cost and economy in the long-run.
"For us it will be a huge implication because all our products, all our manufacturing processes are based on coal, so coal has played a very vital role. We have huge capacities in terms of power plants, steel manufacturing, so power will no doubt affect us, the de-blocking, the coal blocks that we had got and they are now deciding to re-route them, re-route the entire process," said Tandon.
"So, it will have huge implications on us, it will affect our production process, production cost, product cost in the long run. It will also hit the economy because products may go costlier because of the higher cost that someone may give," he added.
Tandon further said "The company is not at wrong, it was a procedure by which the coal blocks were given to us, so if something has gone wrong, the government had taken that stand and decided that modality. We were only the beneficiary of that policy, as a user because we had decided to put up our end user plant."
"The government had decided and at that time it was the best thing that had happened at that time, now after it started, boomed and worked out, now it's too late to decide that it was not fair," he added.
Former coal minister Sriprakash Jaiswal, however, appreciated the verdict and said that the court has accepted his demand of considering the coal block allocations from 1993.
In a landmark judgement, the apex earlier today decided to cancel 214 out of the 218 coal block allocations.
The four spared from the judgment belonged to the central government, and out of them two that is one belonging to Steel Authority of India Limited (SAIL) the other to National Thermal Power Corporation (NTPC) have been saved.
In total, there are 218 blocks, of which 80 have already been cancelled. Out of the remaining 138, these 46 blocks can be further exempted. Of these, 12 are ultra power projects that have already been exempted by the apex court.
A bench headed by Chief Justice R M Lodha had last month held that all coal blocks allocations since 1993 by various regimes at the Centre have been made illegally and arbitrarily.