The case branches out from an investigation into alleged allocation of more than 200 mining licenses, by the Indian Comptroller and Auditor General in 2012, which concluded that the process cost the government around $30bn.
The three-judge special bench said it will take a final decision on whether to impose penalty or cancel the licenses in its hearing on 1 September.
Power and Coal Minister Piyush Goyal was quoted by Reuters as saying that the court’s decision would be in the interest of the country.
"I would look forward to finality in the matter of coal block allocations which have for several years now kept the sector in limbo and with the finality that one can expect very soon, I hope the sector can start progressing," Goyal added.
In the fiscal ended 31 March 2014, the country produced 565 million tons of coal.
Coal Ministry former bureaucrat Parakh told CNBC TV18 channel that the blocks cannot be cancelled as wholesale.
"A coal mine takes in our country anywhere between eight to 10 years to start operating. We are already in serious shortage of coal in the country.
"If these coal blocks are cancelled we will be at least five years behind in terms of production of coal, which can have serious implications for our power sector."
