The Supreme Court on Tuesday reserved its verdict on the 218 coal blocks that it had declared illegal on August 25, as coal companies vehemently opposed the government's suggestion that the allotments be cancelled.
The Centre told the bench, headed by Chief Justice RM Lodha, that if it cancelled all the 218 blocks, Coal India Limited could take over the 46 coal blocks that are already operational or are on the verge of production.
Strongly opposing the Centre's stand, coal producers, power companies and sponge iron manufacturers demanded a high-powered committee comprising retired SC judges be set up to hear out each allottee and suggest a course of action to the court.
Attorney general Mukul Rohatgi opposed this. "In our (government's) view, there is no need for hearing individuals. Before passing the judgment all were heard including the associations representing the coal block," he said.
On whether to cancel the 46 blocks or not, Rohatgi said when pressed by the judges for a clear answer: "Their retention may be considered as they are already mining. It's up to your lords."
Asked to spell out the Centre's contingency plan if the blocks are cancelled, Rohatgi said the court could fix a six to seven-month deadline for the blocks to be auctioned. Till then, the current allottees could be allowed to operate the mines. "Once the auction is complete the new allottee can take over," he said.
An alternate measure, he said, would be to let CIL operate the mines till the auction. The employees could be retained and continue to be paid at current salary levels.
The AG said that of the 46 blocks, two were ultra mega power projects (UMPPs) and thus exempted, as per the verdict. Of the remaining 44, three fully state-run mines too should be protected. The rest can go, he said.
The coal producers and power companies claimed fresh auctions would not be possible for at least two years. Cancellation of blocks could result in power outages and blackouts in remote areas, they warned.
"This would have global ramifications, affect the banking industry and have a negative impact on investors," senior advocate KK Venugopal, appearing for coal producers, told the court.
Senior counsels Harish Salve and Abhishek Singhvi, appearing for the other two associations, accused past governments of misleading the court, and asked that the parties be given a chance to present their cases in detail.
However, the CJI dismissed the contention saying "The government is only articulating its position. Screening committee meetings speak for themselves that no procedure was followed."