Tata Power announed that the Supreme Court has held that all coal block allocations made since 1993 till 2010 have been done in an illegal manner by an 'ad-hoc and casual' approach 'without application of mind'.

However, the consequences arising from the verdict of such coal blocks will be considered after further hearing by the apex court. This ruling by the Supreme Court also includes the Tubed and Mandakini coal blocks allotted to The Tata Power Company.

The 120 MT Tubed coal block in the Latehar district in Jharkhand was allotted jointly to Tata Power (40% share of coal) and Hindalco Industries (60% share of coal) in August 2007. The annual yield of the coal block was expected to be 6 MTPA. Tata Power's share of coal from Tubed was to be utilized in the end use power plant being developed at Tiruldih in Jharkhand.

The 290 MT Mandakini coal block in Angul district in Odisha was allotted jointly to Tata Power, Monnet Ispat and Jindal Fotofilm, each with a third of the share of coal, in January 2008. The annual yield of the coal block was expected to be 7.5 MTPA. Tata Power's share of coal from Mandakini was to be utilized in the end use power plant at Naraj Marthapur or an alternate end use plant in the state of Odisha, which is under final approval of Government of Odisha.

Shares of the company declined Rs 2.5, or 2.77%, to settle at Rs 87.85. The total volume of shares traded was 802,926 at the BSE (Tuesday).