Following a probe into alleged allocation of mining licenses, the Indian apex court last week ruled that the licenses issued are arbitrary and illegal.
According to a report compiled by the Indian Comptroller and Auditor General in 2012, the process cost the government as much as $30bn.
Indian Attorney General Mukul Rohatgi was quoted by AFP as saying: "Everything must not go in one brush. Don’t cancel everything.
"Forty six allocations should be exempted. They must be saved because they are in absolute readiness."
Rohatgi was quoted by Reuters as saying that the government is ready to re-auction the blocks if the allocations are cancelled.
The government has been asked to submit a list of operational mines and the court will hold its next hearing on 9 September.
The country produced 565 million tons of coal in the fiscal ended 31 March 2014.
