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Coal allocation scam and the role of PIL Judgement

Coal allocation scam is one of the biggest scams in India and the PIL Judgement on this issue gave major contribution for a solution. Coal allocation scam became one of the biggest scams in India which disturbed the roots of then ruling UPA government. The PIL Judgement on this issue gave major contribution to the changes in coal block auctioning later.

History of coal allocation scam in India

Coal was first mined in India for commercial purpose during 1774 in Raniganj coalfield, West Bengal. And then came the invention of steam engines, the commencement of the first world war and the industrial revolution globally. Coal became a very essential part of life due to the former events. Since then exploitation of workers and scam in coal mines were huge.

According to CAG draft report on 2012

An insight of coal allocation scam in India

Eventually in 1993, a Screening Committee was set up by the Ministry of Coal to provide recommendations on allocations for captive coal mines.  All allocations to private companies were made through the Screening Committee.  For government companies, allocations for captive mining were made directly by the ministry. 

Additionally, certain coal blocks were allocated by the Ministry of Power for Ultra Mega Power Projects (UMPP) through tariff-based competitive bidding (bidding for coal-based on the tariff at which power is sold).  Between 1993 and 2011, 216 coal blocks were allocated to both public and private companies under the CMN Act.

Sequence of events

1992–2010 coal allocation scam in India

Initially, a list was prepared that consist of coal mines. In addition, they were not under the control of government agencies such as Coal India Ltd and the Singareni Collieries Company Limited (SCCL). The allocation in coal blocks between 1992 to 2010 are

Year of allocationgovernment companies private companiespower projectsTotal no. of blocks
Up to 20052941070
20063215653
20073417152
2008320124
2009112316
20100011
Total9910512216
Number of coal blocks allocated since 1992 to various sectors

March 2012 Draft CAG Report on Coal scam

In short, the key points of the CAG(Comptroller and Auditor general of India) Draft Report is that

  • the Government had the legal authority to auction the coal but chose not to do so.
  • Any losses as a result of coal allocations, between 2005 and 2009 are seen by the CAG as being the responsibility of the Government.

Coal mine allocation case 2014

Above all, the scam activities in Indian coal mines came to the limelight after the PIL(Public Interest Litigation) judgement in 2014 by the apex court.

Advocate Manohar Lal Sharma was the first person to file a petition before the Supreme Court regarding the Indian coal allocation scam. Furthermore, the case mainly focused on the coal allocation during the period between 1993 to 2012. Likewise, The court-supervised the enquiry on the scam during these years.

Meanwhile, in the PIL judgement, the court mentioned that

  • the procedure for allocating coal blocks was irrelevant with Mines and Minerals ( Development and Regulation) act 1957 or MMDR act, Coal Mines (Nationalization) act 1973.
  • The state governments were powerless which was contrary to the MMDR act 1957.
  • The letters of allocation was issued by the central government. This made the licensing and mining lease process easy.

Consequences after the PIL judgement

  1. Court requested the government to do not to interfere in matters regarding natural resources anywhere in the country
  2. There was a CBI investigation on the coal mines that indulged in scam and fines were imposed.
  3. The central government brought several acts regarding auctions or tenders to private sectors
    1. Coal Mines (Special Provision) Act 2015
    1. Coal Block Allocation Rules 2017

In September 2014, the Supreme Court declared all allocations of coal blocks, made through the Screening Committee and Government Dispensation route since 1993, as illegal.  It cancelled the allocation of 204 out of 216 coal blocks.

Central governments’ reaction after the verdict

Recently in 2020, the central government arranged an auction for 41 coal blocks worth Rs. 30000 crore of investment in the coming years. Foreign investment also added benefit to this. By the Mineral Act (Amendment) Bill  2020, privatisation of coal allocation became possible. According to this act the permission to sell coal is only under strict restrictions.

Supreme court asks Delhi high court to change the Judge on coal scam case

The chief justice of India SA Bobde received a letter from the registrar general of Delhi high court to replace special judge Bharat Parashar. He was appointed by the apex court in 2014. The registrar general added that the special judge is taking too much time to deal with the case. Moreover, he is in this position for more than 6 years

Final thoughts

Finally, the supreme court and the PIL judgement played a massive role in bringing out changes in the coal mine sect

Also, the Supreme court balanced the economic importance and legal liability in matters regarding auctions and coal block allocations. Privatization is a huge step in the coal mining sector.


Authored by Indhirani k

Featured image : llionline

Also read : The Boarded Out: Not all cadets get to step on the ‘Antim Pag’

Indhirani K

Hii..This is Indhirani.. working as Junior content writer in Akashbaani and delivering the essence of day to day events!!!

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