The Supreme Court on Wednesday said huge investment made by companies in coal blocks without getting clearance cannot be a ground for not cancelling licences and asked the Centre to respond whether it intends to de-allocate such allocations.
A three-judge bench headed by Justice R L Lodha said that the companies which invested money on blocks without getting all clearances took the decision at their own risk.
"They (companies) must suffer consequences no matter how much investment has been made by them. The alleged illegality cannot be compounded," the bench said when the Attorney General contended that around Rs two lakh crore has been invested in such blocks and it will be difficult to cancel the licence for want of clearances.
"All such investments would go in drain and it cannot be a defence and no law would help them," the bench said.
The apex court said any investment made in anticipation of clearances cannot be justified and such blocks cannot be protected if the companies fail to get clearances within a time frame fixed under the law.
"Such investments are made at their own risk if their rights have not matured. All such investments would be unauthorised," the bench said.
The court asked the Centre to respond whether it intends to de-allocate such allocations.
Meanwhile, in an embarrassment to the Centre, Maharashtra which is a Congress-ruled state also submitted before the apex court that coal blocks allocation is "entirely controlled and regulated" by the Union of India and the state government is just a subordinate party.
The state government's stand assumes significance as it virtually puts the blame on the Centre for the alleged irregularities in the coal blocks allocation and contradicted the stand taken by Attorney General G E Vahanvati who had contended that Centre's role is confined just to identification of coal block.
Andhra Pradesh Government also took a stand similar to Maharashtra.