First verdict in coal scam: Court convicts Jharkhand Ispat, its two directors

New Delhi: The coal blocks allocation scam that had created a political storm during the UPA-II regime on Monday witnessed the first conviction, with a special court holding Jharkhand Ispat Private Limited (JIPL) and its two Directors guilty of various charges including deceiving and defrauding the government to bag a coal block in the state.

The court convicted JIPL and its directors R S Rungta and R C Rungta for the offence of cheating and criminal conspiracy under the IPC, observing that they had "fraudulently" and with a dishonest intention "deceived" the government in allocating the North Dhadu coal block in Jharkhand to the firm.

"Coming now to the case in hand, it is crystal clear that accused persons (JIPL and Rungtas) fraudulently with dishonest intention deceived Screening Committee, MOC (Ministry of Coal), and thereby Government of India on the basis of false representation qua the issue of land and as regard the installed/projected capacity of their end use project so as to procure allotment of a coal block in favour of M/s JIPL," Special CBI Judge Bharat Parashar said.

In its 132-page judgement, the court held that the "false representation" by the convicts "continued to hold ground even when the file containing recommendation of Screening Committee went to Minister in Charge, Coal, Government of India for final approval and thus it was primarily the Government which was deceived into making allotment of a coal block in favour of M/s JIPL while believing all such representations to be true, which in fact they were not."

"The intention to defraud on the part of accused persons is writ large on the face of record," the court said.

It observed that offence of cheating under section 420 of the IPC was made out against the three convicts as their act resulted in "delivery of a valuable security",that is issuance of allocation letter for allotment of coal block to the firm.

The Rungtas, who were out on bail and were present in the courtroom when the verdict was pronounced, were ordered to be taken into custody and the court has now fixed the matter for March 31 for hearing arguments on quantum of sentence.

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

In its verdict, the court observed that from the overall facts and circumstances of the case, it was crystal clear that the actions of "accused in making all such false claims knowing them to be false were actuated with an intention to deceive MOC and thereby Government of India."

The court observed it was clear that JIPL and the Rungtas knew that their claims about actual land possessed by them or steps taken to acquire any further piece of land besides existing installed capacity of their end-use project and the proposed capacity were "false".

"It is also clear that the accused persons, knowing fully well that the said facts were false, represented them to be true or as existing facts and thus misled Screening Committee and thereby Ministry of Coal to believe in the existence of said facts as true and thereby inducing it to part with the important nationalised natural resources of the country i.e. coal," it said.

"By way of their said misrepresentations, the accused persons also induced Screening Committee and thereby Ministry of Coal to part with much higher quantity of coal in their favour than was warranted, if at all allocation of any coal block was to be made," the court noted.

Regarding the conspiracy amongst these convicts, the court observed that they had consciously made false representation at different stages of processing of their application for allotment of coal block before the Ministries of Steel and Coal.

"Different roles were played by the accused persons in order to support the claim made by each other before different Government authorities. The existence of a common agreement amongst the accused persons is thus writ large on the face of record," the court said.

It said the representations made by them were "per-se false" and it "does not require any far-fetched arguments to conclude that the same were made with a dishonest intention as they wanted to present a better status/stage of their preparedness towards establishing the end use project."

"The mens rea (criminal intent) on the part of accused persons in making the said false representations right from the stage of submitting their application to Ministry of Steel seeking allotment of a captive coal block and till the issuance of final allocation letter with respect to allotment of a coal block in favour of company M/s JIPL is writ large on the face of record and that too while having complete knowledge that all such representations were false," it said.

The court observed that the facts and circumstances beside evidence led by CBI and cross-examination of the prosecution witnesses, coupled with defence evidence led by the accused, does not show that there was any failure of justice.

In its judgement, the court acquitted R C Rungta for the alleged offences under IPC sections 467 (forgery of valuable security), 468 (forgery for the purpose of cheating) and 471 (using a forged document as genuine) saying they were not proved against him.

Similarly, the court acquitted R S Rungta for the alleged offences under sections 468 and 471 of the IPC.

The court dealt with the contentions of the accused that no such members of screening committee, who could have said that on account of misrepresentations they were deceived in parting away with the allocation of coal block in favour of JIPL, were examined during the trial.

It held that person deceived in the case was primarily MoC through the Screening Committee route and due to the false representations made by the accused, the committee "believing them to be true chose to make a recommendation in favour of M/s JIPL".

"Thereafter, it was on the basis of said recommendation of the Screening Committee that Minister of Coal approved the allocation of North Dhadu coal block in favour of M/s JIPL.

"Thus by non-examination of any other member of Screening Committee, no prejudice can be said to have been caused to the accused persons as minutes of the Screening Committee followed by approval from Minister of Coal and consequent issuance of letter of allocation speak for themselves," it said.

Referring to the minutes of the 27th Screening Committee, the court said it was clear that committee had also placed strong reliance upon the claims made by JIPL at the time of presentation regarding its stage of preparedness with respect to its end use project.

It said that CBI has rested its allegations in the case on misrepresentation by the accused on acquisition of land and installed or projected capacity of its end use project.

The court referred to documents placed before it and said that the accused had consistently changed their stands about the actual land acquired by them.

"A bare perusal of the said documents coupled with the presentation made by accused R S Rungta, show that there has been consistently changing stand taken by the accused persons both before Ministry of Steel and Screening Committee, Ministry of Coal about the actual land having been acquired by them or steps taken towards acquiring the remaining land required for establishing the proposed end use project," it said adding that all such claims were "completely false".