Coalgate:Court summons ex-coal Secy HC Gupta, othrs as accused

Former Coal Secretary H C Gupta and five others were today summoned as accused in a coal blocks allocation case by a special court which refused to accept CBI's closure report, observing that probe carried out by it was "sketchy" and its conclusion "apparently wrong".

The agency was seeking closure of a case involving Madhya Pradesh-based Kamal Sponge Steel and Power Limited (KSSPL), its officials and some unknown officials of the Ministry of Coal in a coalscam case.

CBI's report appeared to be more of a "defence" given by accused persons and there was "hardly any understanding" of the facts while seeking closure of the case, the court said.

"At the outset, I may however state that the investigation as has been carried out in the present matter is not only sketchy in nature but seems to have been carried out while first deciding the end result and thereafter to carry out the investigation and prepare the final report accordingly. Infact no investigation worth the name has been carried out in the present matter," Special CBI Judge Bharat Parashar said in his 31-page order.

Besides Gupta, the court also summoned Coal Ministry's then Joint Secretary K S Kropha, then Director (Coal Allocation-I section) K C Samaria, Managing Director of KSSPL Pawan Kumar Ahluwalia, Chartered Accountant Amit Goyal and the firm as accused for October 31.

All the accused were summoned for the offences punishable under sections 120-B (criminal conspiracy), 409 (criminal breach of trust by public servant) and 420 (cheating) under the IPC. The court also summoned Gupta for offences under the Prevention of Corruption Act.

The order came on CBI's closure report in the case in which KSSPL, its directors, Pawan, Kamaljeet Ahluwalia, Prashant Ahluwalia, Goyal and some unknown public servants were named as accused in the FIR for allegedly misrepresenting facts,including inflated net worth, to acquire Thesgora- B/Rudrapuri coal block in Madhya Pradesh.

The court, in its order, said, "In fact the report appears to be more of a statement of plea of defence of the accused persons i.e of M/s KSSPL and its Directors and that of the officers of MOC (Ministry of Coal) rather than the report of any investigation".

"A bare perusal of the closure report filed in the present matter clearly shows that the investigation has not proceeded further even beyond the first stage i.e to ascertain and collect all facts and circumstances under which the alleged offence was found to have been committed," the judge said.

"There is hardly any understanding of the said facts and circumstances much less an analysis of the facts so collected. It is for this reason precisely that the final conclusion arrived at by the investigating agency is apparently wrong being not based on any sound logical reasoning much less any legally admissible reasoning or logic," the court said.

The court also did not accept the contentions of the CBI's investigating officer (IO) that the application given by KSSPL to MOC seeking allocation of coal blocks were not properly scrutinized by the officers of the ministry as there was shortage of manpower there.

"The mere statement that due to shortage of manpower they (ministry officials) could not do so is no explanation in the eyes of law. Strangely enough no one right up to the screening committee deliberations, ever cared to enquire as to whether the applications have been scrutinized with regard to their completeness and eligibility in all respects or not," it said.

"Thus, prima facie it cannot be accepted that due to shortage of man power, the applications could not be scrutinized for their eligibility and completeness by MOC," the court said.

It also observed that ministry officials were duty bound to scrutinize all the applications and by not doing so, they "facilitated ineligible companies or companies who had made false representation either about their technical or financial capabilities or in other aspects to procure allotment of coal blocks to the detriment of other applicant companies."

"....It is crystal clear that omissionon the part of officers of MOC to not to scrutinize the applications as regard their eligibility and completeness was a deliberate act," it said.

The court also observed that the way KSSPL acquired coal blocks by allegedly making false claims about its net-worth or its production capacity in its application form, it was not possible without "active collusion" of its officials with the officers of the ministry and the screening committee members.

"Thus, prima facie the reason could be none else but the fact that the screening committee was in active collusion with M/s KSSPL and its directors and the entire proceedings of screening committee was merely an eye-wash," it said.
It also noted that the matter involved huge financial implications both for the government and private companies.

"It was the natural resources of the country which were being dealt with by them (MOC officials and members of the screening committee). For being an important scarce natural resource of the country and the availability of which was very essential for the infrastructural development of the country the same ought to have been dealt with not only with due care and caution but also in an objective and transparent manner," it observed.

The judge noted that the three officers of the Ministry of Coal, who have been summoned as accused, "facilitated" KSSPL and its directors to obtain pecuniary advantage by disposing of the natural resources of the country in violation of the trust imposed on them.

The court also said that they allowed "mis-appropriation of the important natural resources of the country by M/s KSSPL and its Directors" who were not eligible for allotment of coal blocks.

It also said that as per the admitted case of the CBI, KSSPL had given false statement about its annual turnover for two financial years that is 2004-2005 and 2005-2006 in their application form while applying for coal block allocation.
"In these circumstances, the mere assertion by the IO (investigating officer) that upon enquiry with MOC officers, it was stated by them that net worth of applicant companies was not of any relevance while considering the applicants seems to be per-se strange," it said.

The court, in its order, also observed that both the IO and the ministry officials "conveniently overlook" the fact that in the guidelines for coal blocks allocation, net-worth or production capacity of the applicant firms were relevant for deciding their inter-se priority.

"Thus, to state that the MOC officers were unable to explain as to for what purpose the technical capability of the applicant companies was asked for is not an argument but apparently an attempt by persons involved in entire conspiracy to shield themselves and IO unfortunately chose to buy the said lame excuse and blindly relied and accepted it for reasons best known to him," it said.

It also termed as "interesting" the aspect that screening committee recommended coal blocks allocation to KSSPL despite the fact that government of Madhya Pradesh, where the blocks were situated, had not recommended the same.

Referring to the Supreme Court's judgement holding as "illegal" the coal blocks allotment and its subsequent order cancelling such allotments, the special court said that the issue regarding allocation of coal blocks in an illegal and arbitrary manner is no longer in dispute.

Detailing the roles of the accused, the court said that the public servants allegedly abused their official positions and acted against public interest due to which KSSPL obtained pecuniary advantage.

Regarding Ahluwalia, Goyal and KSSPL, the court said they allegedly cheated the government in conspiracy with the government servants by acquiring coal blocks by giving false representations.

"Accordingly summons of the case be issued to accused company M/s KSSPL, its Managing Director Pawan Kumar Ahluwalia, Amit Goyal, Chartered Accountant, H C Gupta, the then Secretary, MOC, K S Kropha, the then Joint Secretary, MOC and K C Samaria, the then Director CA-I section, MOC for the offences under sections 120-B/409/420 IPC and against H C Gupta, the then Secretary, MOC also for the offence under section 13(1)(d) read with section 13(2) of Prevention of Corruption Act, 1988," it said.

It also added that at this stage, prima facie no active roles seems to have been played by any other public servants and others in the case but if during the trial, evidence comes up on record regarding their involvement, then law will certainly take its own course.