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The Supreme Court needs to be aware of the consequences of
cancelling the coal mine allocations since 1993 it has held to be illegal,
should it choose to follow the example of Justices Singhvi and Ganguli who
ordered cancellation of telecom licences en masse in 2012. If these coal mine
allocations are taken back, the economy will go sick. It is not just a few
score steel, cement, power and aluminium companies that would be affected, but
the entire economy.
The total investment in projects that use coal from the
illegally allocated mines is estimated to be close to.`4 lakh crore. If that
investment turns infructuous, the companies concerned would go sick. So would
their parent industrial houses. So, also, would the banks that lent them money.
Stalled lending would put the brakes on incipient growth revival.
The court can easily avert such a disaster. It can very well
make a distinction between allocations that have seen no follow-up investment
and those that have. Now that the mining law has been amended to allow the
central government to allocate captive coal mines via auction, it is feasible
to cancel all allocations where subsequent investment has been nil to minimal.
These can be reallocated on the basis of auctions. It is fair to make a
conceptual distinction between illegal allocation of mines and entirely
legitimate business carried out using coal from those mines.
It is entirely
plausible that very few of the industrial licences that were issued prior to
1991 would stand a rigorous test of compliance with Article 14's promise of
equality before the law. But the licences and businesses built on their basis
are facts of history that cannot now be rolled back and undone.
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