Coal news and updates

A special court on Monday sentenced Jharkhand Ispat Pvt Ltd (JPIL) directors RS Rungta and RC Rungta to four years’ imprisonment in connection with the coal block allocation scam in the state’s North Dhadu block.

The Rungtas, who were convicted for cheating and criminal conspiracy, were also fined Rs 5 lakh each, and the company was penalised Rs 25 lakh.

“It is on account of such kind of unscrupulous businessmen and industrialists that despite 69 years of independence, our country is still lagging behind than most of the countries in the world in industrial/infrastructural development,” said Judge Bharat Parashar.

This is the first case to receive judgement after the coal block allocation scam rocked the UPA-II dispensation. Nineteen other cases investigated by the Central Bureau of Investigation (CBI) are pending before the special court, set up to exclusively deal with the matter. Two other cases probed by the Enforcement Directorate are also pending.

Though, the industrialists’ counsel argued that JIPL suffered a loss because no coal was mined from the blocks, the court noted that this in itself showed the damage the directors and the firm caused the exchequer.

“Non-availability of sufficient raw materials such as coal has, in fact, resulted in the lack of infrastructural/industrial development of the country,” said the court. “Had coal been allocated to a deserving applicant company (which) would have proceeded ahead to extract coal and to also establish its end use project, achieving the ultimate capacity, then it would have certainly added to the infrastructural/industrial development of the country.”

The court added that the loss caused to the exchequer was incalculable in terms of money as the exercise of allocating the resource to a deserving party had been thwarted altogether. “Non-extraction of coal and non-completion of the end use project...has caused huge loss to the nation,” said the court.

In the charge sheet filed by the CBI, it was alleged that JIPL “grossly misrepresented” a number of aspects before the Ministry of Steel and the Ministry of Coal, which prompted the screening committee to allocate the coal block to them. The accused pleaded not guilty and appealed for a trial last March.

The CBI also charged the government’s screening committee with making no attempt to verify the claims made by the firms and said the steel ministry hadn’t developed any method to assess the competency of the companies. The coal ministry’s records related to the case were stated to be missing.

On March 21 last year, the court framed charges of conspiracy, forgery and cheating against the accused. All the accused pleaded not guilty and denied the allegations.

Last December, the court dismissed RS Rungta’s plea to summon former Prime Minister Manmohan Singh and ex-minister of state for coal Dasari Narayan Rao as defence witnesses.

The special court on March 28 found JIPL and its directors guilty of cheating the government to illegally bag a mining block in the state. Arguments on their sentencing took place on March 31.

Arguing before the court, Rungtas’ counsel pleaded that his clients deserved leniency because the criminal charges against them were economic in nature and not a heinous offence.

“We have already got the punishment,” the counsel said, adding that the company suffered a loss of “over Rs 200 crore”.

However, special judge Bharat Parashar said, “The intention to defraud on the part of accused persons is writ large on the face of record... It is also thus crystal clear that all the acts committed by the accused persons have been fraudulently done with a dishonest intention”.

The maximum punishment for cheating in India is up to seven years of imprisonment.

The scam came to light after audit watchdog CAG (Comptroller and Auditor General) flagged irregularities in allocation of coal blocks from 2004, under the Manmohan Singh government. The estimated loss to the exchequer initially pegged at Rs 10 lakh crore was later whittled down to Rs 1.86 lakh crore.

The Rungtas were convicted in the case pertaining to the allocation of Jharkhand’s North Dhadu coal block to JIPL and other companies.

“It is crystal clear that the actions of the accused persons in making all such false claims knowing them to be false were actuated with an intention to deceive MOC (ministry of coal) and thereby the government of India,” the court said in its 132-page judgement.

The court added that the Rungtas had taken contradictory defences not just to each other and their company, but at times also against their own admitted evidence in an effort to “wriggle out” of the charges against them.

However, no charges of forgery were made out against the Rungtas, it said. Calling the coal block allocation letter received by JIPL from the government a “valuable security”, the court said charges of cheating were made out as the convicts had committed a false act with the knowledge that it would result in the “delivery of a valuable security”.

Regarding the ministry, the court observed that the accused persons’ defence that “MOC officers ought to have taken all necessary precautions as could have been taken by them so that the important nationalised natural resources of the country, such as coal, are not usurped by any unscrupulous person” was not “completely without force”.

Nonetheless, it said this did not absolve the company and its directors of cheating and conspiracy.

Source: Hindustan Times