The government Monday told the Supreme Court that they stood by its verdict holding allocation of coal blocks since 1993 as illegal, and was ready to auction these blocks if they are cancelled but sought exceptions for some mines which were operational.
Telling the court that the government wasn't oblivious to the hardship of the court's declaration being taken to its local conclusion, Attorney General Mukul Rohatgi said: "We stand by the judgment and (taking) auction (route for their reallocation)".
He, however, urged the bench of Chief Justice R.M. Lodha, Justice Madan B. Lokur and Justice Kurian Joseph to consider making exceptions in the case of 46 coal mines out of which 40 are already operating and six are ready for operations and their end-use plants are also in place.
The court was told that there were 218 coal blocks that came under its scanner. Of this, 80 were cancelled by the earlier government and exemption sought for 46.
Endorsing the position taken by the attorney general, the court said: "Best way is what Rohatgi says, that is auction. The process (of allocation of coal blocks) has been held illegal at every stage and in every form and you (allottees of coal block) can't take advantage of it."
"They (the government) don't mind if entire 218 coal blocks go under the hammer," it said as senior counsel K.K. Venugopal, appearing for the miners, urged the court to balance different interests including public, national and that of the allottees.
He argued that the allottees who have done nothing wrong could not suffer if the government went wrong and its methodology of allocation was wrong. He said cancellation would create problem even for the banks as there would be a default and it would affect their non-performing assets (NPA).
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Favouring the auction of the coal blocks, whose allocation was held illegal, the court said that existing allottees would get preference to match the bid otherwise "good luck and goodbye".
Noting that seven percent of the total coal requirements of the industry, be it power, steel or cement, is met from the indigenous source, the court said: "It is not going to make much difference. It is better that we start with a clean slate... government does as far as possible, leaving 46 coal blocks. 93 percent is the total deficiency. Let us all help remove darkness bit by bit."
The government opposed the court's earlier suggestion to set up a committee headed by a retired apex court judge to go into the decision's consequences.
The apex court by its Aug 25 verdict had said: "As we have already found that the allocations made, both under the screening committee route and the government dispensation route, are arbitrary and illegal, what should be the consequences, is the issue which remains to be tackled. We are of the view that, to this limited extent, the matter requires further hearing."
One of the way suggested by the court was to appoint a committee headed by a retired apex court judge, so its report may help the court to have an objective view on the options available.
Setting the tone of the hearing, Attorney General Rohatgi told the court: "We don't want a committee. We don't want to save anybody. If court wants all have to go, then they will go."
"We want the court to decide, so that we can get out and auction and don't want a committee. We want to start with an auction. The position of power is bleak. We want to finish the chapter and go ahead."
Making it clear that government was not oblivious that cancellation would create problems, Rohatgi said: "We are faced with a situation where everything is illegal. All must go under Section 11-A of the MMRD Act that mandates from Feb 13, 2012, any grant of 'reconnaissance permit or prospecting licence or mining lease in respect of an area containing coal or lignite can be made only through selection through auction by competitive bidding even among the eligible entities under section 3(3)(a)(iii) (of CMN Act, 1972)'."
Adjourning the matter after a two hour long hearing, the court asked all the parties including the central government, miners association and others to file affidavits stating their respective stand by Sep 8 as it fixed Sep 9 as the next date of hearing.