New Delhi: Acts of alleged omission or administrative oversight on the part of former coal secretary H.C. Gupta and ex-joint secretary K.S. Kropha can be mistakes or lapses but cannot be considered criminal acts, a trial court held as it discharged the two in one of the coal block allocation scam cases.
Additional sessions judge (ASJ) Sanjay Bansal, who heads one of the two special courts hearing the cases, gave a clean chit to Gupta and Kropha after a detailed analysis of the evidence gathered by the Central Bureau of Investigation (CBI).
In a 100-page judgment, Bansal demolished every CBI allegation against the bureaucrats while upholding that the case concerned was not of corruption because there was no demand for a reward in exchange for the improper execution of public duties, if any.
With the charges under the anti-corruption law not made out, the court refused to proceed to the next stage of the criminal trial during which witnesses appear before the judge and get examined.
The case concerns a mine allocation to M/s Kohinoor Steel Private Limited (M/s KSPL).
ASJ Bansal faulted the CBI for booking only Gupta and Kropha even though the screening committee, which recommended M/s KSPL for the coal block allocation, contained more members.
In this case, there were committee members from the administrative ministry, the Ministry of Steel, and a senior official from Jharkhand, where the mines lay. Moreover, the committee’s recommendation was sent to the coal minister for final approval.
On a perusal of all documents collated and presented by the CBI before the court, the judge said, “As already observed, doing the task of making recommendations improperly is not similar to committing [the] offence of corruption. Accused-3 (Gupta) and Accused-4 (Kropha) may be departmentally liable, but they are not criminally liable for these acts.”
Gupta and Kropha face 19 cases in the coal block allocation scam. Since Gupta was the coal secretary from January 2006 to November 2008, he headed the screening committee recommending the allocations under the CBI lens for irregularities. Initiated in 2012, the CBI investigation followed a Supreme Court judgment, which, considering a Comptroller and Auditor General report, had cancelled the allocations.
Out of the 19 cases against Gupta and Kropha, the trial court, so far, has decided eight, including the present M/s KSPL one.
Of the remaining seven, two resulted in acquittal, and five in convictions. Appeals against their convictions are still pending in the Delhi High Court.
The remaining 11 cases are in various stages in the trial courts.
Gupta’s advocate Rahul Tyagi told ThePrint that the CBI’s allegations against his client are similar in all the cases.
“The judgment has come as a ray of hope for the public servants who are being prosecuted for systemic lapses without any allegation of corruption. The learned trial court has for the first time dealt with some of the fundamental issues, such as if systemic administrative lapses can amount to criminal offence, and if a single individual can be held responsible for the recommendations of a committee of many. The courts are finally realising that officers of the Ministry of Coal have been treated very unfairly in these prosecutions for minor administrative lapses committed not by them, but by others,” Tyagi said.
“Whereas officers of state and administrative ministries, who were instrumental in making these recommendations, and whose role and nexus with the companies is apparent, have been given a free pass by the CBI. This realisation perhaps is turning the tide. Though the judgment is a significant victory, these unfortunate public servants still have a long ordeal to undergo because of the sheer number of cases pending against them.”
According to the CBI, Gupta and Kropha, as the screening committee’s crucial members, had cleared M/s KSPL’s application in violation of then-existing guidelines for coal block allocation.
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Witness statement & 2022 court order
The CBI’s first allegation—at the initial stage, the duo did not follow coal ministry guidelines to check the application of M/s KSPL. As a result, the exercise to determine company eligibility and application completeness was skipped.
However, upon scrutinising the witness statements of coal ministry officials, the court held that the duo followed guidelines, and the company completed the application.
The court, however, rejected the statement of a prosecution witness. The witness had told the CBI that since M/s KSPL did not submit its audited annual accounts, starting three years before its application, it should not have appeared along with companies that completed their paperwork in the list placed before the screening committee for consideration.
ASJ Bansal pointed out that the CBI recorded the witness statement nearly four years after the witness’s initial statement. The supplementary statement, he noted, was diametrically opposite to the earlier one.
Citing the delay on the part of the investigating officer, as well as the volte-face of the witness, the court rejected the statement concerned.
ASJ Bansal also drew support from a July 2022 judgment to strike down the CBI accusation of non-scrutiny of applications.
The July 2022 order delivered by a special court in a separate coal block scam case concluded that the scrutiny of applications came before the respective state governments and administrative ministries received the screening committee recommendations for further process.
The judgment from 2022 related to the 34th screening committee’s same meeting, from which the M/s KSPL case emerged, with ASJ Bansal relying on the 2022 decision.
Missing annual audited accounts of KSPL
The CBI’s second allegation was that since M/s KSPL’s application was incomplete and the company never provided audited accounts of its group companies, the screening committee should have rejected it.
While filling out its application, M/s KSPL claimed over Rs 56 crore net worth of its 28 companies, 21 in Nepal and seven in India. However, upon going through the records and statements of witnesses, the court found there was no requirement to annex the audited annual accounts of the group’s companies.
Moreover, the court noted that M/s KSPL was on the list of companies whose applications were complete. So, the application could not be considered incomplete. Instead, the screening committee erroneously considered M/s KSPL for the coal block allocation, the court said, adding that Gupta and Kropha cannot be held responsible or criminally liable for that.
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Duty of verification of KSPL’s claims
The CBI’s third allegation was that Gupta and Kropha did not bother to verify M/s KSPL’s claims in its application. The court, however, concluded that under due procedure, the coal ministry was not supposed to verify the information filled up by the applicant company. That, the court held, was the job of the administrative ministry or the state government, where the coal mine lay.
The court finding relied on witness statements, documentary evidence, and the 2022 judgment mentioned earlier. The court also referred to discussions and decisions taken in prior meetings of the screening committee, 14th and 18th, to make its point that the steel ministry kept M/s KSPL in the list.
On the CBI’s assertion that a coal ministry verification would have exposed M/s KSPL’s false claims, the judge said: “This emphasis of prosecution gets uprooted when it is found that Ministry of Steel, the Administrative Ministry, kept [the] name of KSPL in Category II (a), which was the highest category.”
If the CBI’s allegations of false claims by M/s KSPL are true, it was astonishing to see the company’s high rank in the list prepared by the Ministry of Steel, ASJ Bansal said while wondering whether the steel ministry officials had any reason to take a stand favourable to M/s KSPL.
Moreover, the coal ministry, he noted, did not have the expertise to analyse the data relating to the steel sector, and the steel ministry could have detected any shortcomings or false claims.
Hence, the judge dismissed the CBI’s allegation that Gupta and Kropha favoured M/s KSPL.
Collective decision by screening committee
Based on the statements of prosecution witnesses, the court said the duo can not be held responsible for the collective decision of the screening committee.
The records showed no “dissent from any member of the screening committee to recommend the name of KSPL for [the] Medinirai Coal Block”, the ASJ said.
Crucially, the screening committee had allocated the coal block jointly to two companies, with M/s KSPL being one of them. The second was M/s RML, which the Jharkhand government recommended. M/s RML was one of the two companies the state suggested, with M/s JSMDCL the second. M/s JSMDCL, the court highlighted, had not even applied for any coal block.
The state list also mentioned M/s KSPL for the Sitanala coal block. However, since the coal block was unsuitable for sponge iron production, the screening committee, the court further noted, recommended M/s KSPL for the Medinirai coal block. The court observed that significantly, M/s RML was allocated a big share, up to three-fourths of the block. In such a scenario, the court found no fault in the committee recommending a joint allocation.
The court dismissed the CBI’s emphasis on statements of some screening committee members, who, the agency claimed, appeared unaware of the methodology adopted for the allocation and so could not have consented to it.
The court noted that all these objections had come up during the registration of the scam cases, followed by the investigations, with no dissent note made by any screening committee member at any point in time. “What is visible is none of such persons ever raised any objection to the recommendations at the time of making them or soon thereafter,” it said.
KSPL’s proposal to set up plant
Another CBI allegation was that the screening committee recommended M/s KSPL, an ineligible applicant, considering it did not have a sponge iron plant but proposed to construct one. The CBI said for the company to be eligible, it should have already engaged in iron and steel production.
However, companies that proposed to set up production units were also eligible, according to the laws existing at the time of the allocation, ASJ Bansal said, in alignment with an Orissa High Court judgment.
The Orissa HC had held that a company proposing to engage in power production is an eligible applicant for a mining lease. Though Subsequently overruled, the Orissa HC order was the law when the allocation happened, opined the court.
ASJ Bansal said the Orissa HC order showed it was common understanding at the time or at least a possible connotation or interpretation of the law, so the anti-corruption law did not apply to Gupta and Kropha. To rule out any criminal liability, he said, taking a particular view about guidelines and provisions, especially when such a view was possible, cannot be an offence.
(Edited by Madhurita Goswami)
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