New Delhi: The screening committee’s recommendation to allot Mahuagarhi coal block to JICPL was a collective decision for which one or two individuals cannot be held responsible, a special CBI court observed last week, acquitting former senior bureaucrats H.C.Gupta and K.S.Kropha in a coal block allocation case.
The court held there was no illegality in the allocation of the coal block, which was done as per the existing policy that was based on an Odisha High Court judgement. Further, it found no evidence to prove that the screening committee gave preferential treatment to the company.
To the CBI’s allegation that Gupta and Kropha had not checked JICPL’s application, it said being secretary and joint secretary of the coal ministry, the two were not supposed to personally check the applications for completeness and eligibility.
Gupta and Kropha were members of the screening committee that cleared JICPL’s application in June 2008. The company was one of the 15 applicants considered for the power sector.
The CBI had accused the duo of recommending the JICPL without confirming if it was eligible for coal mining. This was done to gain pecuniary benefits, the CBI alleged, slapping the Prevention of Corruption Act (PCA) against them.
However, after 10 years of trial, the court of additional sessions judge (ASJ) Sanjay Bansal, discarded the corruption allegations against the duo. Besides, the judge said that the former bureaucrats cannot be singled out for a collective decision, rejecting the CBI’s contention that since Gupta was the head of the committee and Kropha the convenor, the two were personally liable for the alleged “illegal allocations.”
Observing that the screening panel had representatives of other stakeholders such as the Ministry of Power (MoP), West Bengal and Jharkhand governments, the court said none objected to the recommendation and, rather, everyone had approved the decision with signatures.
“Thus, after so many years, it cannot be stated that the said decision was of A-3 (Gupta) and A-4 (Kropha) alone,” Bansal pointed out. Even if there were omissions by the two officers, their acts do not amount to a criminal offence, he ruled.
Both the power ministry (the administrative ministry) and Bengal had forwarded JICPL’s application with inputs for consideration and approval. Both had given a nod, but had a divergent opinion on the location of the coal mine. Bengal’s recommendation suggested Mahuagarhi, while Jharkhand–where this coal mine lay–proposed another company for the allocation.
From the perusal of documents and official records, the ASJ opined that Gupta and Kropha did not force either the MoP or any state to make recommendation in favour of JICPL. Instead, the ministry and Bengal did so on their own and on the basis of their evaluation. Their representatives were also present in the meeting, the judge highlighted.
The judge also exonerated the third bureaucrat, K.C. Samria, whom the CBI blamed for not checking JICPL’s application diligently for its completeness and the company’s eligibility. During the trial, the ASJ found Samria was not posted with the CA-I department at the relevant time when the applications were processed.
As reported by ThePrint earlier, Samria was transferred to the department in March 2007, whereas the applications were forwarded between November 2006 and January 2007. This means, the exercise of checking the applications took place before he joined the section.
In view of the contesting recommendations made by the ministry as well as the state government, the screening committee was tasked with working out a solution to balance the interest of all stakeholders, the ASJ said.
“As a consequence, allocation of coal blocks was made in favour of some companies which had recommendation of only MoP and some which had recommendation of only the concerned state government,” he added.
Case background
The present case stems from the 2006-2007 coal block allocation process that was set aside by the Supreme Court in 2014 for being arbitrary.
JICPL had applied for Jharkhand’s Mahuagarhi coal block for a proposed 1,215 MW power plant. After being scrutinized by the administrative committee and the states where the proposed coal blocks were located, the screening committee in its 35th meeting recommended JICPL and CESC in January 2008 for Mahuagarhi.
Subsequent to the SC judgement, a reference was made by the Central Vigilance Commission (CVC) to the Central Bureau of Investigation (CBI), which initiated a preliminary enquiry into the coal block allocation process.
Though the CBI registered a regular case against the company, its directors of cheating, criminal conspiracy, and corruption under the Indian Penal Code (IPC) and the PCA, it filed closure reports in April and October 2014. The CBI had then taken a stand that dishonest intention could not be established against the accused.
However, the then presiding judge of the special CBI court, ASJ Bharat Parashar, rejected the CBI’s closure report in November 2014.
He went a step ahead by not even waiting for a proper sanction order to prosecute Gupta and Kropha. Given that the CBI’s request to the Department of Training and Personnel was pending, ASJ Parashar proceeded with the case on the basis of “deemed sanction.”
Also Read: Coal block allocation case: How court junked each charge levelled against 2 UPA-era officials by CBI
SC judgement did not touch upon criminality
ASJ Bansal clarified that the SC 2014 judgement, which declared the procedure adopted to allocate coal blocks arbitrary and cancelled them, did not touch upon, directly or indirectly, on whether there was an element of criminality in the allotments.
In fact, he said, the judgement specifically confined itself to the prayer for quashing the allocations.
What the Supreme Court had decided was civil consequences of administrative action. The apex court had not decided criminal liability for those actions, the judge said.
The interpretation of Sec. 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act given by the Supreme Court in 2014 was relevant for cancellation of allocation of coal blocks but the same cannot be the basis for drawing inference about criminal liability for acts done and omissions made in 200, the ASJ said.
The judge reiterated the “strange trend” noticed in cases arising out of the alleged wrongful allocation of coal mines.
He said the CBI has in its case against public servants—Gupta, Kropha and Samria—taken non-scrutiny of applications (filed by companies) as a strong ground to prosecute them. Non-checking of applications has been cited as a major lapse of the accused public servants in the CBI’s chargesheets, as was done in the present case against the three bureaucrats, he said.
However, the same minutes of the screening committee, which were labelled as “wrongly recorded” in cases against Gupta, Kropha and Samria, have been relied as correct recordings in those matters where only private companies are listed as accused and no government officers are charged.
ASJ Bansal had given a similar finding when he discharged Gupta and Kropha in a case concerning mine allocation to Kohinoor Steel Private Limited (KSPL).
With the present judgement, the two former civil servants are acquitted in three of the 19 cases lodged against them. So far, the trial court has decided nine, of which they were discharged in one and convicted in five. Appeals against their convictions are still pending in the Delhi High Court.
Advocate Rahul Tyagi, who represented Gupta, Kropha and Samria, told ThePrint that the trial court judgement is a reaffirmation of the established legal principle that one person cannot be held responsible for a collective decision.
“Had this principle not been ignored by the court initially there would have been no case made out against MoC (Ministry of Coal) officers. The CBI had not prosecuted them for this reason and the fact that there was not even allegation of any quid pro quo,” he said.
“Finally, justice is being served and hopefully the officers will be vindicated in all remaining cases,” Tyagi said, adding that the “impartial justice system would prevent further injustice that was done to the honest officers.”
CBI vs defence arguments
According to the CBI, the grant of coal mining lease to JICPL was in violation of the guidelines of the coal ministry, which clearly stated the applications, after receipt, would be checked for their completeness and eligibility before processing further.
Applications without specified accompaniments were to be treated as incomplete and liable to be rejected forthwith. In the present case, the application was processed by Gupta and Kropha and a coal block was allotted to the company.
JICPL never disclosed if it was a Joint Venture or a Special Purpose Vehicle, the CBI alleged, adding that the company falsely claimed that its core business included iron and steel making and never provided the appraisal report of its Detailed Project Report (DPR).
The guidelines, as per the CBI, required the coal ministry to check the applications before they were sent to the power ministry and state governments for inputs. Despite these shortcomings in its application, the screening committee, instead of rejecting JICPL, cleared its license for Mahuagarhi.
Gupta and Tyagi argued that checking of the applications for completeness and eligibility was to be done by the coal ministry whereas verification of the claims made in those applications was to be done by the administrative ministries and the state governments.
They submitted that checking of the applications was done before sending them to administrative ministries and state governments. In this backdrop, if a recommendation was false, then fault was with the state government or the administrative ministry.
Moreover, the decision was of the panel and not of an individual officer, and non-observance of some administrative guidelines cannot be called illegal or criminal.
It was also argued that allocation guidelines were not binding and their violation cannot lead to prosecution. There was no cash upon Gupta and Kropha to check the applications for their eligibility and completeness, the defence had claimed.
Also Read: CBI’s ‘selective approach’ & ‘strange’ trends in its probes, flagged by court in coal scam case
Allocation as per existing policy
While declaring that the screening committee was empowered to make recommendations as per the policy decision of the government, the court said various such panels started laying down its own procedures to screen the proposals and make recommendations in an objective and transparent manner.
The fresh guidelines governing allocation of captive coal blocks became the foundation for the decisions taken by the 35th and 36th Screening Committee. Therefore, the court disagreed with the defence’s contention that the guidelines were not binding.
The purpose behind the guidelines was to rule out any element of arbitrariness in the allocation process and, thus, the officers of the department issuing those guidelines were clearly bound to follow them.
The court also opined that the allocations were made according to the existing policy, which authorised the Centre to do so through the screening committee route. This policy was valid and sanctified as per the common practice and procedure that was prevalent at that time, until the Supreme Court judgement pronounced in 2014.
ASJ Bansal faulted the CBI for arguing that the policy excluded a prospective power producing company from consideration, referring to an Orissa High Court decision that a company proposing to engage in power production was eligible and that the primary requirement for every applicant was that it should be registered under the Indian Companies Act.
The judge concluded that the eligibility of the company had to be decided according to the then existing guidelines, which was that companies proposing to engage in power production were eligible to apply for allocation of coal blocks.
‘Completeness didn’t mean to ascertain truthfulness’
The guidelines made it imperative for the officials to check the applications for completeness. However, this did not mean that the officers of the coal ministry were required to ascertain the truth or correctness of the claims and information mentioned in the application, the judge said.
The court held that scrutiny of an application was different from checking its completeness.
Scrutiny, he said, is an exercise to verify the truthfulness and correctness of claims made by the applicant companies. And, in the present case, he added, it was the domain of the administrative ministry and state governments, and not of the coal ministry.
Verification of the claims was to be done by the administrative ministry in consultation with the state government as the technical expertise for the power sector was available with MoP and not the coal ministry. This verification was to be done by the administrative ministry and the state government where the coal mines lay before the files were sent to the screening committee.
The role of administrative ministry and state governments was traceable to 14th and 18th screening committee meetings, the judge said, pointing out the verification or scrutiny of claims made in the applications was the task of these stakeholders.
Coal ministry checked applications
The court, however, said that before the copies of applications were sent to the administrative ministries and state governments, the coal ministry was required to check the applications as regard to completeness and eligibility.
In the present case, the instances of incompleteness were rather instances of false statements or incorrect statements, it said.
Though the CBI relied heavily on a coal ministry official to show that no checking was done, the court held otherwise, noting that circumstances indicated it was done.
“It is noteworthy that there is no noting in the Ministry of Coal file that no checking was ever done. There is further no noting that the fact of non-checking was ever brought to notice of superior officers,” the court added.
“It must be kept in mind that this checking is not to be confused with scrutiny of applications for the purpose of evaluation because that exercise is related to finding out truthfulness and correctness of the claims.”
(Edited by Tony Rai)