timmy Posted September 24, 2014 Report Posted September 24, 2014 NEW DELHI: The Supreme Court today cancelled all but four of 218 coal block allocations it declared illegal in August, in a landmark verdict with major implications on the energy sector. All private firms allotted coal blocks by various governments between 1993 and 2011 stand to lose. Only four blocks linked to Ultra Mega Power Projects of the government have been spared.Metal stocks fell sharply after the Supreme Court verdict. Sensex also fell over 200 points but recovered later.The court has given six months' breathing time for the blocks to wind up operations.Allottees have been asked to pay a fine of Rs. 295 per tonne from the time the coal was mined, which could amount to a total of 8,000 to 10,000 crores, say some estimates. The government is now free to auction or allot the blocks to central firms.The Centre had asked the court to exempt nearly 40 coal blocks that have either started production or are near it.On August 25, the court had said coal blocks were allotted through an "ad-hoc and casual" approach "without application of mind". It said, "Common good and public interest suffered heavily in the unfair distribution of the national wealth - coal - which is king and paramount Lord of industry."Coal miners and power producers had argued that a huge investment was at stake and the cancelling of allotments should be taken up case by case.The allotment of coal blocks to steel, cement and power companies without an auction process has been at the centre of the so-called "Coalgate" scandal, estimated in a 2012 audit report to have cost the exchequer as much as $33 billion or Rs. 1.86 lakh crore.
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