Coal block allocation review: natural justice, cancellation of illegal allotments, and a compensatory levy based on estimated loss.

Coal block allocation challenges were discussed in terms of whether separate individual hearings were needed before cancellation and whether a compensatory levy could be imposed. The text explains that class-wide hearing through associations and affected States was treated as sufficient in the circumstances, and that reopening individual allotments through a committee would amount to collateral reconsideration. It also notes that allocations made through the Screening Committee route and Government dispensation route were treated as illegal and arbitrary, with only specified public sector and UMPP allotments retained, while a compensatory levy was upheld as a reasonable estimate of loss.

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Issues: (i) Whether a committee or separate hearing was required before cancelling the coal block allotments. (ii) Whether the coal block allotments were liable to be cancelled and whether an additional levy of Rs. 295 per metric ton was payable.

Issue (i): Whether a committee or separate hearing was required before cancelling the coal block allotments.

Analysis: The allotments were challenged on the basis that individual allottees had not been separately heard and that a committee should examine each case. The Court held that the earlier judgment had dealt with the legality of the overall allocation process and not with individual allotments, and that reopening the matter through a committee would amount to collateral reconsideration of the judgment. The associations representing the allottees and the affected States had already been heard, so the requirements of natural justice were satisfied in the circumstances.

Conclusion: No committee was required and the objection based on want of separate individual hearing was rejected.

Issue (ii): Whether the coal block allotments were liable to be cancelled and whether an additional levy of Rs. 295 per metric ton was payable.

Analysis: The Court reaffirmed that the allocations made through the Screening Committee route and the Government dispensation route were illegal and arbitrary. It divided the allotments into categories, retained only the specified allocations in favour of the public sector and UMPP allotments, and cancelled the remaining allotments. The cancellation was deferred for six months to enable transition. The Court also accepted the compensatory levy of Rs. 295 per metric ton as a reasonable estimate of loss and directed payment within the stipulated time.

Conclusion: The impugned coal block allotments, save the specified exceptions, were cancelled and the additional levy was upheld.

Final Conclusion: The legality of the coal block allocation process stood affirmed against the allottees, the bulk of the allotments were annulled with limited exceptions, and a compensatory payment mechanism was confirmed for the extracted coal.

Ratio Decidendi: Where a class-wide allocation process is held illegal and arbitrary, individual reconsideration is not required before giving effect to the consequence of cancellation, and a compensatory levy may be imposed on a reasonable assessment of loss.

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