Coal Block allocation can be cancelled even if huge investments are made: SC

The Supreme Court of India on 8 January 2014 directed that the huge investments made by the companies in coal blocks without getting clearance cannot be a ground for not cancelling the licences. The Court has also asked the Centre to respond whether it intends to de-allocate such allocations.

The Supreme Court’s bench that comprised three members was headed by Justice R L Lodha. The bench said that the companies, which have invested money on blocks without getting clearances, took the decision at their own risk. It said that the companies will have to suffer the consequences also in case that investment has been made by them as illegality cannot be compounded. This was observed by Court, when the Attorney General, G E Vahanvati informed the court that around two lakh crore rupees has been invested and it will be difficult to cancel the licenses on the issue of clearances.

The Supreme Court in its decision mentioned that might be possible that investments were made in anticipation of clearances but it cannot be justified. It also said that it cannot be protected if the companies fail to get the clearances with the structured time frame under the law. The court asked the Centre to respond whether it intends to de-allocate such allocations.

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