H C Gupta was earlier convicted in three other coal scam cases and his appeal against those convictions is pending before Delhi High Court
A Delhi Court on Friday convicted former Coal Secretary H C Gupta and former joint-Secretary in the Ministry of Coal (MoC), K S Kropha, for criminal conspiracy, criminal breach of trust, cheating, and corruption in a coal scam case related to irregularities in allocation of a coal block in Maharashtra.
Special Judge Arun Bhardwaj also convicted Grace Industries Ltd. (GIL) and its Director Mukesh Gupta for criminal conspiracy and cheating, and posted the matter for August 4, when the court will hear augments on the quantum of sentence to be awarded to four convicts.
The case relates to the allocation of the Lohara East coal block.
This is the 11th conviction in coal scam cases secured by the prosecution.
The convict persons face a maximum of seven-year jail term while the company faces the imposition of the fine.
H C Gupta was earlier convicted in three other coal scam cases and his appeal against those convictions is pending before Delhi High Court. He is currently on bail, along with other convict persons in the case.
In its judgement on Friday, the court noted that H C Gupta made three misrepresentations in discussions with Principal Secretary to the then Prime Minister.
In the first instance, he gave a false impression that Screening Committee’s decision to allocate coal block among competing applicants was based on inter-se priority, the court said adding that again, he concealed information that GIL’s application was not sent to the Ministry of Steel (MoS) for its mandatory comment.
He further made misrepresentations regarding recommendations for the company’s power plant.
H C Gupta was the chairperson of the then Screening Committee.
The court noted that the Secretary had received a complaint letter making serious allegations against the accused company which were supported by documentary evidence.
“In ordinary circumstances, it should have set alarm bells ringing. But nothing of the sort happened. The letter was given a quiet burial in MoC,” the judge noted.
He said that in the light of alarming information received by the Secretary, the normal course of action should have been to give urgent directions on the letter before marking it to the Joint Secretary for promptly processing the same and putting up with a detailed note.
“The Secretary and the Joint Secretary, both senior officers were steel frame of the country. Not only no noting for prompt action was noted on the complaint letter but they never cared to follow it up and never enquired from the Section (concerned for action on the letter) the fate of the complaint letter,” the judge said.
The fact that the Secretary/the Joint Secretary simply marked a serious complaint without any direction for prompt action on the same tantamounts to silence on their part, the judge noted, adding that it was an important circumstance against public servants for proving the charge of criminal misconduct.
He further noted that the Screening Committee ignored the views of the state government as well as the MoS, without giving any “detailed reason” or “justifiable grounds” for the decision, and that the committee did not follow guidelines laid down by itself.
The judge further noted that excess coal allocation was made in favour of GIL in spite of the fact that the excess allocation was brought to the notice of H C Gupta and Kropha by one Murli Agro Products Limited.
Regarding the company, the court observed that it made false claims before the Screening Committee about its net worth and the existing production capacity of its sponge iron plant.
“GIL, under signatures of Mukesh Gupta, had given false information to MoC as well as Screening Committee that it has installed infrastructure for five kilns and production is pending for want of coal/ it has got two kilns under production and three kilns under installation,” the court said.
It further said that the application of the GIL was incomplete in the absence of three years of audited annual accounts.
“GIL was not eligible to apply for allocation of a coal block in its favour as it had come into existence only in the year 2003 and had not completed three years of business and was not having balance sheets for the last three years which were required to be filed along with application form. It was not in a position to disclose its turnover and profits for 2002-03, 2003-04, 2004-05 and was therefore ineligible to apply for allocation of a coal block,” the judge said.
The trial of the case was conducted by Senior Advocate R S Cheema, Deputy Legal Advisor for CBI Sanjay Kumar, and senior public prosecutor A P Singh.
According to the CBI, between 2005 and 2011, the accused persons hatched a criminal conspiracy and cheated MoC, and the Government of India by dishonestly and fraudulently inducing the MoC to allocate 'Lohara East Coal Block' in favour of GIL based on false information about net worth, capacity, equipment, and status of procurement and installation of the plant.
CBI also stated that the company, in its application, claimed its net worth as Rs 120 crore whereas its networth was only Rs 3.3 crore and that the company also falsified its existing capacity as 1,20,000 TPA against 30,000 TPA.
The Supreme Court on August 25, 2014, cancelled the entire allocations of coal blocks.