Turning down the Centre's plea that the court should not go into the issue as it is being looked into by a Parliamentary committee, the apex court said "these are different exercises."

A Bench of Justices R M Lodha and A R Dave said the petition raised serious questions and "it requires explanation from the Government".

"There is difference in exercise done by the Public Accounts Committee (PAC). Parliament and PAC can proceed with the issue on the basis of the CAG report. We don't want to encroach upon their exercise but the petition raises different things altogether. There are sufficient averments which require explanation from you," the court said.

The Bench also made it clear that it is confining itself only to the aspect of guidelines formulated by the Centre for allocation of coal blocks.

The court passed the order while hearing a PIL filed by advocate M L Sharma on the alleged coalgate scam.

The Bench rejected Solicitor General Rohinton Nariman's contention that the petition based on the CAG report was "premature" and should not be entertained.

Saying that the report of a constitutional body like CAG can be relied upon, the bench directed the secretary of Union Coal Ministry to file a counter affidavit within eight weeks dealing with the several aspects involved in allocation of coal blocks.

The Bench said the affidavit shall cover the guidelines framed by the government for the allocation of coal blocks.

It said the secretary should also elaborate the process adopted for allocation of these coal blocks and whether the guidelines had an in-built mechanism to ensure that the allocation of coal blocks does not lead to distribution of largesse unfairly in the hands of few private companies.

The Bench also sought to know whether the guidelines for allocation of coal blocks were strictly followed and whether by their allocation, the objectives of policies were realised.

The Bench also sought the government's response on as to what were the hindrances for not following the policy of "competitive bidding" adopted by in 2004 for allocation of the coal blocks.

Lastly, the court wanted to know what steps were proposed to be taken against the allottees who have not adhered to the terms of allocation or have breached the agreement.

Deallocated coal blocks should be given to power projs: Moily

Power Minister Veerappa Moily said that the coal blocks that are de-allocated by the government after review of their status should be given to the upcoming power projects to meet the capacity addition target of 85,000 MW in the 12th Five Year Plan.

"Yes, definitely. We are going to seek that (the de-allocated coal blocks)," Moily told reporters here after releasing a report "Green Energy Corridors".

He added, "We are always placing our priority because you know coal (which) is provided... that will contribute more to the power sector. That kind of capacity building (85,000 MW in 12th Plan) is in the offing," he said.

The decision to deallocate the blocks was taken after recommendation by an Inter-Ministerial Group (IMG), headed by Additional Secretary (Coal) Zohra Chatterji.