The CBI and the Centre clashed over the coalgate scam today with the agency telling the Supreme Court that there have been "arbitrary allotments without scrutiny" in the coal blocks allocation during UPA-I tenure and the government vehemently refuting the findings.

The apex court, which perused the latest status report filed in a sealed cover, asked the CBI director to insulate itself from the political executive in the investigation into the coal scam.

In a status report filed by CBI in the scam, the agency said that the coal block allocation during 2006-09 was done without verifying the credentials of companies which allegedly misrepresented facts about themselves and no rationale was given by the Coal Ministry in giving coal blocks to them.

A three-judge bench headed by Justice R M Lodha, which asked the CBI director not to share information of the probe with "political executive", said that the report prima facie alleges arbitrary allocations done without proper scrutiny, but Attorney General G E Vahanvati aggressively hit back on the findings saying, "CBI is not the final word on this."

He, however, clarified that the government has no problem with CBI probe and pleaded with the court to supply him with some part of the probe report on which he would respond.

"I am not trying to pre-empt the inquiry. I have no problem with it. Let CBI probe the allocation," the AG said.

The bench said the government should make a statement cautiously as it might affect the ongoing CBI probe.

"Any of your comments must not prejudice CBI inquiry in the case. If you are challenging the very conspiracy angle of the controversy, then it would affect the probe," the bench, also comprising justices J Chelameswar and Madan B Lokur, said.

Reading out a portion of the report, Justice Lodha said, "CBI report does indicate that no uniform policy has been followed by the Centre and there was no system in place to verify the financial strength, track record of companies some of whom got coal blocks by misrepresenting facts about themselves." 

Indicating that the entire allocation might be cancelled if no legal procedure was followed, the apex court directed the government to explain why a small group of companies have been "picked and chosen" for allocation of coal blocks out of the large number of companies that applied for it.

"Whether the consideration has been objective or it was just pick and choose policy? You must explain," it said pointing out that of 2100 applications, only 151 companies were allocated the blocks.

The court also asked the CBI director to file an affidavit assuring it that the status reports submitted by the agency are "vetted by him and not shared with political executives".

The court was hearing a PIL filed by various members of civil society including former CEC N Gopalaswami, ex-Navy chief L Ramdas and former Cabinet Secretary T S R Subramanian and advocate M L Sharma seeking a SIT probe into the scam.

During the hearing, when it was told that the apex court appointed central-empowered committee can also be involved in the inquiry, the bench said it was not going into individual cases, as it was not required.

"We are not on individual case broadly. It has to be seen that whether guidelines were followed or not. The entire allocation goes if no procedure was followed," it observed.

The AG also expressed displeasure on policy matter of government being challenged in the court saying "it is very frustrating".

"Every policy of government is challenged. Let's take it to the logical conclusion. Let's go to the stone age. It is very frustrating," he said.

The bench said in democracy "these things are going to happen. You cannot avoid".