Coal scam: Rungtas get 4 years jail, to pay Rs 5 lakh fine each

Directors of Jharkhand Ispat Pvt Ltd (JIPL), R C Rungta and R S Rungta, were today jailed for four years in a coal scam case by a special court which lamented that India was still lagging behind in development due to such "unscrupulous businessmen"

Coal scam: Rungtas get 4 years jail, to pay Rs 5 lakh fine each

New Delhi: Directors of Jharkhand Ispat Pvt Ltd (JIPL), R C Rungta and R S Rungta, were today jailed for four years in a coal scam case by a special court which lamented that India was still lagging behind in development due to such "unscrupulous businessmen".

In the first judgement delivered in the coal blocks allocation scam cases, Special CBI Judge Bharat Parashar noted that such "white collar crimes" were more dangerous to society than ordinary crimes due to the much higher financial losses and damages inflicted on the public morale.


The court also observed that coal was an important element for industrial and infrastructural development of a developing country like India.

"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," the court said in its 15-page order on sentence.

Besides the jail term, the court imposed a total fine of Rs five lakh each on R S Rungta, 79, and R C Rungta, 60, who were convicted on March 28 for the offences of cheating and criminal conspiracy under the IPC.

It also slapped a fine of Rs 25 lakh on the company JIPL which was held guilty, along with Rungtas who were taken into custody after being convicted by the court.

The judge clarified that in case Rungtas, who were present in the courtroom when the sentence was pronounced, do not pay the fine, then they will have to further undergo imprisonment for one more year each.

Rungtas and JIPL are the first ones to be convicted among the several coal scam cases pending before the special court which had convicted them saying they had "fraudulently" and with a dishonest intention "deceived" government in allocating the North Dhadu coal block in Jharkhand to the firm.

Besides this, 19 other cases investigated by the CBI are pending before the court, which was set up to exclusively deal with all coal scam matters. Two other cases probed by ED are also pending before the court.

Dealing with arguments advanced by the defence counsel that there was no "identifiable victim", the judge said, "I may state that not only under our criminal justice administration system, State is the representative of the interest of the community but as already mentioned, it is the country as a whole which has suffered loss on account of such unscrupulous acts of the convict persons."

Regarding arguments of defence counsel that no coal wasextracted by the convicts and thus no loss was caused to the exchequer, the court observed that "non-availability of sufficient raw materials such as coal has in fact resulted in the lack of infrastructural/industrial development of the country."

"Had coal been allocated to a deserving applicant company who would have proceeded ahead to extract coal and to also establish its end-use project achieving the final ultimate capacity then it would have certainly added to infrastructural /industrial development of the country," it said.

The court also observed that non-extraction of coal and non-completion of the end-use project "in itself has caused huge loss to the nation which is difficult to be computable in monetary terms."

Referring to "white collar crimes", the court said that of late, anti-social activities of persons of the upper socio- economic strata of the society have attracted attention.

"White collar criminals have came to be defined as 'a person of the upper socio-economic class who violates the criminal law in the course of his occupational or professional activities'.

"Such 'white collar crimes' are in fact more dangerous to the society than ordinary crimes firstly because the financial losses are much higher and secondly because of the damages inflicted on public morale," it said.

"The average loss from ordinary crimes such as burglaries, robberies and larcenies etc may run into few thousand rupees only but the loss which the 'white collar crimes' may cause run not only in lakhs but in crores of rupees," the court said.

It noted that finding criminality in such acts committed by "white collar criminals" is often a difficult task, as they are committed after much deliberations and planning.

"The only reason which may however explain such behaviour of 'white collar criminals' is their greed or lust to acquire maximum material resources in the name of their business, taking benefit of open competition, economy and individual freedom," it said.

The court also said that even if all the applicant firms were allotted coal blocks by 27th screening committee, which along with 30th screening committee had dealt with allocation of North Dhadu coal block, then also "it cannot justify the acts of cheating committed by the convict persons."

The court said if the coal block was not allotted to JIPL, it would have been given to some other deserving applicant firm which would have proceeded to extract coal.

"The fact, however, remains that a coal block came to be allocated to M/s JIPL on account of the acts of cheating committed by the convict persons pursuant to a criminal conspiracy hatched by them," it said.

The court noted in its order that initially applications were moved by the defence counsel seeking release of Rungtas on probation in the matter but it was later on withdrawn.

"Even otherwise, keeping in view the nature and gravity of the offence, I do not deem it appropriate to extend the benefit of probation to the two convict persons," it said.

Referring to the Supreme Court's August 25, 2014 order passed in the coal matter, the court said, "It is in the light of aforesaid observations about the importance of coal as an important element in the industrial life of developing India, that the crucial issue of arriving at a just proportion between punishment and offence needs to be looked into."


In the case pertaining to irregularities in allocation of North Dhadu coal block by 27th and 30th screening committees jointly to JIPL and three other firms M/s Electro Steel Casting Ltd, M/s Adhunik Alloys and Power Ltd and M/s Pawanjay Steel and Power Ltd, the court had earlier summoned two other persons -- Ramabatar Kedia and Naresh Mahto -- as accused, along with JIPL and the Rungtas.

However, the court was later informed that both Kedia and Mahto had died after which proceedings against them were abated.