New Delhi: A Delhi court has closed a decade-old coal block allocation case filed by the Central Bureau of Investigation (CBI) against Aditya Birla Group’s aluminium and copper manufacturing company, Hindalco, citing the CBI’s failure to establish any act as “illegal”.
The case was related to allegations that the coal and aluminium company had violated conditions attached to a 1994 allocation of the Talabira-I coal block in Odisha by using coal from the mine in its existing 67.5 MW captive power plant at Hirakud rather than only in proposed power projects.
“There is neither any evidence on record nor any justifiable reason to infer that they entered into criminal conspiracy to commit any illegal act, including the offence of criminal breach of trust or cheating,” said Special Judge, Prevention of Corruption Act, Dheeraj Mor, of the Rouse Avenue courts on 30 May.
The court said the CBI cannot attribute any criminality to policy decisions or to policy changes by public authorities while discharging their official functions only because it allegedly benefited a private entity.
It is “legally untenable to selectively characterise the very policy outcome as criminal merely because a consequential benefit is alleged to have accrued to a private entity”, the court said.
The court also noted that the prosecution had not made any allegations against any Ministry of Coal officials for consciously omitting, diluting or disregarding the conditions of the mining plan.
The court also noted that the CBI had cited public servants of the Ministry of Coal as prosecution witnesses, but their statements materially undermined the prosecution’s case.
The prosecution’s case regarding the allegations of criminal breach of trust rested upon the premise that the Talabira-1 Coal Block was allocated to Hindalco under the condition that prohibited extracting coal for purposes outside of its proposed power plant.
The court rejected the CBI’s claims, saying there was no legal prohibition restricting the company from using coal extracted from the coal block in its existing power plant.
While a mining lease is a statutory document governing the entire mining operations of a coal mine, a letter of allocation does not have any such statutory backing per se, the court said.
The court clarified that the conditions in the allocation letter cannot be read as a part of the mining lease deed unless they are expressly incorporated in it.
Consequently, the violation of the letter’s conditions, which were not included in the 2003 mining deed, could not attract the provisions relating to the criminal breach of trust against the accused persons, the court said.
The Ministry of Coal’s allocation letter also conferred “a valuable right” amounting to the “grant of largesse” in favour of the company, thereby giving it a preferential right to be considered for the creation of an interest in the coal block, the court said.
The prosecution argued that at different points in 2004, 2005, 2010, and 2011, Hindalco extracted 4.80 million tonnes more than its estimated coal reserves of approximately 15 million tonnes.
It also said that Hindalco employees made misleading representations to the Coal Ministry in the process of obtaining approval for a revised mining plan.
Also Read: CBI chargesheet hauls Jindal over the coals, cites ‘coal secy meeting, 3.7 mn tonnes excess mining’
Why the CBI initiated the case
The Ministry of Coal allocated coal blocks for captive purposes to private companies engaged in power generation as well as the iron, steel and cement sectors, starting in 1993, the prosecution told the court.
According to the CBI, the company began mining operations in 2003 without prior permission from the coal controller to open the coal mine.
Importantly, although the Ministry of Coal had prohibited the use of coal extracted from the Talabira-1 coal block in the existing power plant at Hirakud, the company went ahead with its utilisation.
In 2004, the ministry rapped the company for illegally consuming coal, but it continued its mining activities. The FIR alleged that, despite this, public servants of the coal ministry did not take any action against them, adding that there could be suspected collusion with unidentified public servants.
The CBI also said that although the coal company was allocated the coal block exclusively for its proposed power plant, Hindalco used the coal extracted from it for its other existing power plant. Moreover, the proposed power plant was never even established, the complaint said.
In January 2015, an FIR was filed for criminal conspiracy and criminal breach of trust under the IPC and under Section 13 of the Prevention of Corruption Act, which addresses “criminal misconduct by a public servant”. The FIR names Hindalco’s authorised representative Vivek Kumar, president S.K. Tamotia and general manager P.R.S. Mani.
Even Ministry of Coal officials were named in the complaint, which broadly alleged malpractice and illegalities in the allocation of the Talabira-1 Coal Block in Odisha by the ministry to Hindalco.
The court also ruled that the accused persons in the case were entitled to be discharged, as there was no evidence on record, nor any justifiable reason to conclude that they entered into a criminal conspiracy to commit an illegal act.
“In absence thereof, there is neither any evidence on record nor any justifiable reason to infer that they entered into criminal conspiracy to commit any illegal act including the offence of criminal breach of trust or cheating,” the court said.
The court dismissed the claims, saying there was no evidence on record to demonstrate that the alleged misrepresentation induced anyone, including officials of the Ministry of Coal, the Centre, or any other public authority, to part with public property or took any action they would not have otherwise undertaken.
(Edited by Sugita Katyal)