The apex court bench headed by Chief Justice R.M. Lodha reserved the verdict after a day-long hearing on the consequences of its earlier decision, holding that the process of the allocation of these coal mines by the steering committee and under government dispensation was arbitrary and illegal.

At the outset of the hearing, the central government Tuesday told the court that it favoured auction of all the 218 blocks, but if the court so considered then 40 coal blocks which are already in production for years and six other coal blocks in which production can commence any time may be exempted.

Earlier the government on Monday left it to the Supreme Court to decide the fate of 218 coal block allocations held as illegal by it while stating that about 40 blocks are operational and another six are ready to produce 50 million tonnes coal in the current year.

The affidavit filed by the Ministry of Coal incorporated the statements made by the Attorney General Mukul Rohtagi on September 1 that the Centre has no objection to the cancellation of allocations declared as illegal by the Apex Court and was also not insisting on any particular course of action.

Giving details as directed by the Court about the 40 producing blocks and six likely to come under production during the year 2014-15, the affidavit said they ‘Are estimated to produce about 50 million tonnes of Coal in the current year.’

The ministry placed before it the gist of information about mining lease, commencement of production and linked End-Use Production (EUP) investment received from allocatees of these 40 productional coal mines and six on verge of production.

Out of 40 functional mines, two are allocated to an Ultra Mega Power Project (UMPP), which has not been declared as illegal by August 25 judgement, it said.

The affidavit further cited that the six coal blocks which are likely to come under production were determined by the Coal Controller's Organization (CCO), as they have received mine opening permission under Rule 9 of the Colliery Control Rules, 2004 (framed under MMDR ACT, 1957), which is the final step towards opening of the mines.

The ministry, which gave details of information of 15 lignite blocks received from the allocatees, also stated some of the hurdles it was facing as a result of the Apex Court judgement and sought suitable directions.

It said the numbers of allocatees have acquired title of the land in respect of coal blocks which were allocated and now are held as illegal and on re-allocation those previous allocatees be directed to "re-convey" the land to Central government.

"Upon cancellation of the coal block, the title of the land would still remain with the allocatees. In the event of subsequent grant of the coal block, it may not be possible for the grantee to obtain title of the land from the earlier owner," it said.

The affidavit further said, "It is, therefore, suggested in such cases the allocatees be directed to re-convey the land to the Central government or to its nominees etc upon payment of the purchase price of the land."

Secondly, the ministry said in view of the judgement holding as illegal the allocation made from 1993 to 2010, "This court may make it clear that the mining leases executed subsequent to the coal allocation would also be deemed to be void and of no legal effect."

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