 "SC scraps 214 coal blocks, spares only four: Key highlights")
The Supreme Court ruled on Wednesday that companies will have to return most of the coal blocks allocated illegally to them by the government since 1993, which could worsen an already severe shortage of the fuel in the short-term and raise imports.
The court ruled last month that the country’s decades-old method of granting coal mining concessions was illegal and arbitrary, putting investments worth billions of dollars at risk.
The ruling sent shares of Jindal Steel and Power , Hindalco Industries and Tata Powe sharply lower. The firms have already spent heavily on steel and power plants based around the coal blocks.
Here are the highlights of the verdict:
SC quashes allocation of 214 coal blocks alloted since 1993 but spares four government run blocks, which include coal blocks allocated to PSU-SAIL, NTPC and two Ultra Mega Power Projects
SC says there is no reason to save these blocks and allocation are arbitrary.
Supreme Court allows illegal coal mines to keep producing until March 31, 2015. Hence it has allowed six months “breathing time” to companies whose blocks were cancelled to wind up business
Govt is free to auction all the blocks deemed cancelled post 31 March, 2015
SC accepts CAG’s estimate that there was loss of Rs 295 per mega tonne due to the non-operation of mine
The court has imposed a penalty of Rs 295 per tonne on all cancelled block holders
SC directs companies to pay the loss as compensation for the non-operation of the mine
Coal India will carry out mining activity till auctions held
SC verdict in coal block case will become operational after six months
The inquiry by the CBI into the case will continue. The court’s observations and findings on the issue will have no bearing on the probe
Hindalco, Jindal Steel, Tata Power have already spent heavily on steel and power plants based around the coal blocks. Jindal Steel slumps over 13 percent; Hindalco down over 4 percent
The apex court on August 25 had held that all coal blocks allocations since 1993 by various regimes at the Centre have been made illegally and arbitrarily. The apex court however, had stopped short of cancelling them saying, “what should be the consequences, is the issue which remains to be tackled.”
With inputs from Reuters
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