The BJP's apparent climbdown produced no breakthrough in the Parliament deadlock with Prime Minister Manmohan Singh rejecting the demands for immediate cancellation of 142 coal block allocations and an independent probe into the allotments.
Any signs of a thaw following Friday's telephonic talk on between Congress President Sonia Gandhi and Leader of the Opposition Sushma Swaraj were dispelled when BJP continued to disrupt both the Houses today demanding Singh's resignation.
After the talk, Swaraj and others in BJP said a debate in Parliament on the allocations can begin if the government cancels 142 allotments immediately and sets up an independent probe.
However, the Prime Minister, who met some senior Cabinet collegues, ruled out any immediate cancellation of the coal blocks and made it clear that the government would fight it out.
Finance minister P Chidambaram rubbished the demand for Singh's resignation as "outrageous" and rejected the two other demands of the BJP.
"The demand for cancellation of all 142 coal blocks allocated after 2004 is not founded on sound logic.... It (cancellation) cannot be done through dictat or arbitrary orders," Chidambaram told reporters in New Delhi.
He made a "fervent request" to the Opposition to start the debate in Parliament. "All of us are ready to begin the debate. It is only through a face-to-face debate that clarity will emerge," the finance minister said.
"There is a procedure for it (cancellation) and that procedure is underway.. This is a fair procedure," Chidambaram said while pointing out an Inter-Ministerial Group (IMG) was going into the allocations made since 1993 and is expected to give its recommendations by September 15.
Seeking to turn tables on BJP, Chidambaram said Gujarat chief minister Narendra Modi had made a strong pitch for speedier allocation of coal blocks for captive power and steel plants at a meeting of power ministers on May 28,2007.
The IMG, headed by Zohra Chatterjee, additional secretary in the coal ministry, met this afternoon and reviewed the performance of 58 allottees. The Group will meet again on September 6.
Calling BJP's demand for independent probe as "a little belated", he said "if there are irregularities or any illegalities, then the CBI will go into it. It is the criminal aspect... What is the purpose of a judicial inquiry?"
Reacting to the government's stand, senior BJP leader Arun Jaitley said there were two pre-conditions for a Parliament debate. That did not preclude the party's demand for the Prime Minister's resignation.
He said cancellation of blocks would itself be an admission of guilt and a ground for Singh to step down.
Jaitley said Swaraj's offer provided an opportunity to the government to prove its bonafide and fairness. But by rejecting the demands, the government has demonstrated it has "vested interest" in continuing this "arbitrary and discretionary" allocation.
Questioning the cut-off date of 2004 for probing allocations, Chidambaram said "if the policy is flawed, it is flawed since 1993."
Coal Minister Sriprakash Jaiswal said the IMG is reviewing the performance of 58 coal blocks and a decision will be taken after the Committee submits its report latest by September 15.
Of the 58, 20 are those reviewed by the CAG. The IMG has sent notices to owners of 58 coal blocks, including 25 private companies, for failing to develop the mines allotted for captive use within the given time-frame.
Companies like Reliance Power, Tata Power, Hindalco, Grasim Industries, ArcelorMittal, GVK Power and MMTC figure in the list of 58 that have been issued show-cause notices.
The IMG today discussed actions, including guidelines for seizure of bank guarantees of the owners of blocks where mining has not taken place.
It was decided that representatives of the 58 allottees, to which notices have been issued, would be called before the IMG on September 6, 7 and 8 and a report would be finalised by September 10.
Chidambaram said that in 32 coal block allocations, the allottees have been cautioned, while in 58 cases show cause notices have been served.
"But opportunity is to be given to the party to present their side before deciding whether the allocations of coal blocks are to be cancelled or not. It cannot be done through a dikstat in an arbitrary order," he said, adding the Government will surely take action if any irregularities are reported.
With the BJP stepping up its campaign, Congress has decided to launch a counter offensive by deputing key Union ministers, Congress general secretaries and spokespersons across the country to counter "disinformation" against the government over coal block allocations and CAG report.
They will try to explain to the people how the CAG's report was "flawed", Congress sources said.