Coal news and updates

That's the implicit message from the CBI's action of closing four of the 18 cases in the controversial coal-block allotments and its indication that more are likely to follow. But more than a clean chit, this is an admission by the CBI that it is unsure about making charges stick.

 

Of the 18 cases filed by the country's highest investigating authority in the allotments of coal blocks for captive use, Vikash MetalBSE 3.77 % & Power was number eight.Filed in September 2012, it accused Vikash Metal of mis-representation in its application for a coal block, which resulted in it being one of the six companies to bag the Moira-Madhujore block in West Bengal—the 14th largest of the 195 blocks given out by the government since 1993.

 

According to an official of the Central Bureau of Investigation who is involved in the coal probe and who spoke on the condition of anonymity, the Kolkata-based company claimed in its application it had been allocated 300 acres of land in Begusarai, Bihar, for a steel plant. But the CBI found that the Bihar Area Development Authority had had de-allocated this land a year before Vikash applied for the coal block.

 

On March 27, the CBI announced it was closing this case. CBI spokesperson KanchanBSE -4.97 % Prasad declined to provide details on the basis of which the case against Vikash Metal was closed. "We will not be able to give specific answers for two reasons," she said. "Some of the cases are still under investigation and the entire matter is sub judice at this time."

 

But the unnamed CBI official quoted above shared details of the case against Vikash, a company whose steel plant in West Bengal has been shut for the last three years and which is now a penny stock. "Two of the five companies that got the block along with Vikash also did not have land," he says. "It is clear that land was not a criterion. In that sense, even if they had not misrepresented, they might have still landed the block."

 

Similar logic runs through the CBI's explanation of why it has closed three other cases: against Jas Infrastructure and JLD Yavatmal, the latter owned by Congress MP Vijay Darda; Green Infrastructure; and Kamal Sponge Steel & Power. "Misrepresentation is a civil wrong," says Abhishek Manu Singhvi, Supreme Court lawyer and Congress leader, without referring to these cases. "It has to be coupled with intent to qualify as cheating. Misrepresentation could also emerge from a bonafide error."

 

The agency says it did not find enough evidence to prove criminal conspiracy or cheating within the legal framework of which coal blocks were allotted. Nor did it find evidence of any malafide association or quid pro quo between the accused company and bureaucrats and ministers involved in the allotment process.

 

The coal-block allotment case came under the scanner in July 2012, when the auditor to the government came down heavily on the lack of processes and accountability in the allotment of 137 coal blocks between 2004 and 2008. The subsequent uproar and scrutiny sullied the UPA government, brought Parliament to a standstill, and claimed a minister and the second-highest law officer. The CBI filed a string of FIRs (first information reports) and the Supreme Court took over the monitoring of the investigation.

 

At the moment, the CBI is chasing time. The SC had asked it to finish its investigations by April 30. On May 7, the CBI is due to update the SC about its investigation. Of the 18 FIRs filed, two have resulted in chargesheets (against Navbharat Power, and AMR Iron and Steel). Four cases have been closed because the CBI is unsure about making the charges stick. And more are likely to be closed, on similar grounds, adds the unnamed CBI official.

 

Interpreting misrepresentation

 

There's a difference, inside and outside the CBI, on how to assess the cases against companies. The CBI is examining the cases within the legal framework of the process used by the government to allot blocks to companies in the power, steel and cement business.

 

As frameworks go, it was poorly defined and allowed for a certain degree of discretion, says the unnamed CBI official. So, for example, it did not specify how one company would be chosen from many companies that applied for applied for a block. Similarly, it did not specify under what conditions could a company add its partner's net worth while applying through a joint venture.

 

As a result of the allotment framework leaving several aspects open-ended, the CBI is running into difficulties as it tries to convert FIRs into chargesheets. "Suppose we chargesheet a company and they turn up in court and ask, 'where, in the coal ministry's communiques inviting companies to apply for captive blocks, does it say that land (or net worth) was a prerequisite'?" the official says. "This does not constitute the offence of cheating. Cheating is when you cause a deception and a property is delivered, which would not have been the case if there was no deception."

 

But a second CBI official has another take. He says all the data provided by companies, while not explicitly stated in the framework, was considered for the purpose of deciding whether a company was worthy of a coal block. "If companies were being compared on 10 factors, a company that does well on four factors is necessarily better than one which is better than another that does well on three factors," he says, on the condition of anonymity.

 

"That's why submitting false information is misrepresentation." It does not matter if a piece of information was considered or not for the purpose of taking a decision; what matters is whether it is true, says Shyam Divan, a Supreme Court lawyer. "According to the IPC (Indian Penal Code), if a false representation is made to obtain an advantage, that is cheating," he adds. "You can either make a false representation or conceal information, and both will amount to cheating."

 

Chargesheet logic

 

Given how poorly defined the allocation framework was, the CBI is veering to the view that it can convert FIRs into chargesheets only if any of the following three conditions are met. One, obvious contradictions in the application that were overlooked. For example, a company applies for a project in one place in its application, but changes it to another in its presentation to the screening committee, contrary to the records. 

 

 

Source: ET