Genesis Of Coal Block Scam In India

Several national-level frauds by governmental officials have occurred in India over the years. One such fraud was the Coalgate scandal, in which the UPA government was accused of assigning coal blocks without a competitive bidding procedure. These coal blocks are often awarded to businesses through an auction, with the highest bidder obtaining control of the block. The government gains money from the sale of these blocks, which are utilised for government activities.

Coalgate scam

The Coal Allocation Scam, often known as the Coalgate Scam, occurred during the UPA government’s tenure. It became relevant in 2012, when the then-Comptroller and Auditor General (CAG) levelled charges against the government over the distribution of coal blocks to public and private firms. Between 1993 and 2010, a total of 216 coal blocks were awarded, with 194 coal blocks sold to various public and commercial entities for captive usage.

The CAG study addressed concerns about arbitrary administrative choices made when awarding coal blocks that did not follow the specific protocol of competitive bidding.

Guidelines For Coal Allocation

The Ministry of Coal released certain criteria for coal allocation in 2011, with a preference for the electricity and steel industries. There were ten requirements that had to be followed in order to be a competing application for a captive block:

• The applicant’s net worth
• Production capacity is recommended in the application.
• The status of project progress and readiness
• The application proposes a maximum recoverable reserve.
• The proposal proposes a date for the permitting of a captive mine.
• Technical knowledge related to coal mining capacities 
• Estimated completion date of the exploration outlined in the application
• Ministry of Administration Recommendation
• Recommendation of the state government (of the block’s location)
• Analysing the company’s track record and economic strength

Legal Considerations

The Coalgate swindle had legal ramifications that must be examined in depth in order to comprehend its significance and avoid repeating it in the future. These components are as follows:

• Government authority oversteps its bounds

In this coal distribution case, the federal government was questioned for exceeding the powers granted to it by the legislation regulating coal and natural resource mining in India. The government took the initiative to assign coal blocks without holding an auction which led to the coal block allocation case.

•  Allocations are invalid, yet they are not cancelled.

The Supreme Court ruled the case of Manohar Lal Sharma v. The Principle Secretary & Others, in which the petitioner was successful in showing the government action of awarding coal blocks without auction as a form of prejudice. The accused were charged in accordance with the provisions of the 1988 Prevention of Corruption Act. The Supreme Court ruled that the allocations were unjust and objected to the government’s conduct to favour firms in the process. 

• Making administrative decisions

Administrative decision making is an area of Administrative Law in India that has evolved via the growth of other legislation and judicial declarations rather than being associated with any one act. The screening committee was formed to make choices on coal block allocation.

• Transparency is being improved through administrative support.

The law oversees rules that are sanctioned by legislative provisions but does not apply to rules or regulations that do not exist. It does not operate on assumed rules unless expressly mentioned in the legislation regulating the directives. 

Legal Alterations Following The Scam

1973 Amendment to the Coal Mines (Nationalisation) Act

The main reason for the government to offer tenders for any project is to invite public or private firms to participate in the company while giving maximum production to meet the needs of the country’s people. As a result, every action taken by the government is for the benefit of the people. The revision to the Coal Mines (Nationalisation) Act of 1973 would allow domestic and international enterprises to participate in the coal block allocation case & process.

The revised legislation, which would make auctions mandatory for the distribution of coal blocks after 2010, would leave no room for the administrative power to be biassed or capricious. The competitive spirit among local and foreign corporations to buy the blocks would benefit the country since they would bid based on who could extract the most from the specific mine. This excavated coal may be marketed in India to compete with other monopoly-based enterprises.

Conclusion 

In this article we learnt about the coal block allocation case, Indian coal allocation scam, facts about the coal block allocation scam and other topics related to the Genesis of Coal Block Scam in India.

The Coalgate scandal, which exposed all of the governing government’s wrongdoings, was a black stain on the UPA’s time in India from 2004 to 2014. The swindle included a controversy in the allocation of coal blocks to rival enterprises, which lacked the necessary auction mechanism in which the highest bidder might obtain the block.