IN THE COURT OF SH. BHARAT PARASHAR, SPECIAL JUDGE (PC ACT) (CBI), ROUSE AVENUE COURT COMPLEX NEW DELHI
CNR NO. DLCT11-001136-2019 Case No. CBI/291/2019 RC No. 221 2014 E 0002 Branch : CBI/EO-III/New Delhi CBI Vs. M/s. Castron Technologies Ltd. & Ors. U/s. 120-B IPC; 379/34 IPC; 409 IPC, 420 IPC; Section 13 (1) (c) and Section 13 (1) (d) P.C. Act, 1988 and also 120-B IPC r/w Section 409/420 IPC and Section 13 (1) (c)/13(1)(d) P.C. Act, 1988.
Date of order on cognizance : 15.01.2016 Date of framing of charge : 26.04.2017 Date on which judgment was reserved : 12.03.2020 Date of judgment : 06.10.2020
In re:
Central Bureau of Investigation (CBI) Vs. (1) M/s Castron Technologies Ltd. Registered office: Lal Bunglow, Nag Nagar, Dhaiya, Dhanbad, Jharkhand (Convicted)
(2) Mahendra Kumar Agarwalla S/o Late Sh. Banwari Lal Agarwalla Lal Bunglow, Nag Nagar, Dhaiya, Dhanbad, Jharkhand-826004 (Convicted)
(3) M/s Castron Mining Ltd. R/o Registered office 504, Diamond Prestige, 41-A, Acharya Jagdish Chandra Bose Road, Kolkata (West Bengal) – 700014 (Convicted)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 1 of 389 (4) Dilip Ray S/o Sh. H.K. Ray R/o Permanent Address: Mayfair Hotel, Jaidev Vihar, Bhubaneshwar, Odisha Present Address: 117, Hauz Khas Enclave, New Delhi. (Convicted)
(5) Pradip Kumar Banerjee S/o Late Sh. Tulsi Das Banerjee R/o D-42, DG(S) Apartment, Plot No. 6, Sector – 22, Dwarka, New Delhi - 110075 (Convicted)
(6) Nitya Nand Gautam S/o Late Sh. Hari Prakash Gautam R/o F-1/12, Model Town-1, Delhi-110009 Present Address: D-8, 2nd Floor, Greater Kailash Enclave-2, New Delhi - 110048 (Convicted)
APPEARANCES Present : Ld. Senior Advocate, Sh. R.S. Cheema, Special P.P., alongwith Ld. Senior P.P. Sh. A.P. Singh, Ld. DLA Sh. V. K. Sharma, Ld. DLA Sh. Sanjay Kumar, and Ld. Advocate Ms. Tarannum Cheema for CBI.
Ld. Counsel Sh. Ajay Gaggar for A-1 M/s CTL, Ld. Counsel Sh. P.K. Dubey for A-2 Mahendra Kumar Agarwalla, Ld. Counsels Sh. Siddharth Aggarwal and Sh. Kumar Vaibhav for A-3 M/s CML, Ld. Senior Advocate Dr. Abhishek Manu Singhvi, Ld. Senior Advocate Sh. Ashok Parija, Ld. Counsels Sh. Manu Sharma and Sh. Balaji Subramaniam for A-4 Dilip Ray, Ld. Counsel Sh. K.K. Patra for A-5 P.K. Banerjee and Ld. Counsel Sh. Avijit Mani Tripathi for A-6 N.N. Gautam.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 2 of 389 JUDGEMENT
INDEX TO THE JUDGMENT
S. HEADING PAGE NO NO(s) (A) Introduction 5 A (i) Investigation by CBI 5 A (ii) Proceedings before the Court. 6 (B) Charges Framed 14 (C) Evidence 16 C (i) Prosecution Evidence 16 C (ii) Prosecution Witnesses whose Examination-in-Chief was led 23 by Prosecution by way of Affidavit U/S 296 Cr.PC, but accused persons chose not to cross- examine them. C (iii) Defence Evidence 26 (D) Arguments 27 D (i) Arguments on behalf of Prosecution 27 D (ii) Arguments on behalf of company A-1 M/s CTL 31 D (iii) Arguments on behalf of A-2 Mahender Kumar Agarwalla 34 D (iv) Arguments on behalf of company A-3 M/s CML 35 D (v) Arguments on behalf of A-4 Dilip Ray 39 D (vi) Arguments on behalf of A-5, Pradip Kumar Banerjee 42 D (vii) Arguments on behalf of A-6 Nitya Nand Gautam 46 (E) Prelude to my discussion of the prosecution case. 51 (F) Inter play between Mines & Minerals (Development and 61 Regulation) Act 1957 (MMDR Act, 1957), Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973) and Coal Mines (Nationalisation) Act, (CMN Act, 1973). (G) Detailed circumstances in which application dated 09.05.98 of M/s 79 CTL was dealt with in Ministry of Coal (MOC), Coal India Limited (CIL), Central Mine Planning & Design Institute Limited (CMPDIL) and Central Coalfields Limited (CCL). G (i) Proceedings in MOC (Part-1) 80 G (ii) Proceedings in CIL and CMPDIL (Part-1) 92 G (iii) Proceedings in MOC (Part-2) 95
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 3 of 389 G (iv) Proceedings in CIL and CMPDIL (Part-2) 101 G (v) Proceedings in CCL (Part-1) 104 G (vi) Proceedings in CIL (Part-3) 114 G (vii) Proceedings in MOC (Part-3) 116 G (viii) Some Additional Proceedings in CMPDIL 142 (H) Guidelines laid down in MOC for allotment of captive coal blocks. 144 (I) My discussion of the prosecution case 149 Issue No. (1) What was the mandate of Screening Committee as was constituted in MOC. Issue No. (2) Whether Screening Committee was within its rights to consider allocation of a non-nationalised and consequently a 152 non-identified coal mine. Issue No. (3) Whether application of M/s CTL seeking identification and allocation of Brahmadiha Coal Block i.e. a non-nationalized coal mine and consequently a non-identified coal mine was required to be put up before the Screening Committee or it ought to have been closed/rejected in MOC itself. Issue No. (4) Whether allocation made by 14th Screening Committee in favour 189 of M/s CTL for allocation of said abandoned Brahmadiha coal mining area was in accordance with law. (J) Charge for the offence u/s 13 (1) (d) P.C. Act, 1988 against A-4 Dilip 210 Ray, Minister of State for Coal, A-5 Pradip Kumar Banerjee, Additional Secretary, Ministry of Coal and Chairman 14th Screening Committee and A-6, Nitya Nand Gautam, Adviser (Projects), Ministry of Coal and Member Secretary, 14th Screening Committee. J (i) Role played by A-5 P.K. Banerjee, Additional Secretary Coal 218 and Chairman 14th Screening Committee and A-6 N.N. Gautam, Advisor (Projects) and Member Convenor 14th Screening Committee. J (ii) Role played by A-4 Dilip Ray, Minister of State for coal. 266 (K) Charge for the offence under Section13 (1) (C) P.C. Act and 290 Section 409 IPC against A-4 Dilip Ray (L) Charge for the offence of cheating i.e. u/s 420 IPC against A-1 M/s 309 CTL and A-2 M.K. Agarwalla. (M) Charge for the offence of criminal conspiracy i.e. 120-B IPC 343 against A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 4 of 389 (N) Charge for the offence of theft i.e. Section 379/34 IPC against A-1 349 company M/s. Castron Technologies Ltd. (M/s CTL), A-2 Mahendra Kumar Agarwalla and A-3 company M/s Castron Mining Ltd. (M/s CML) (O) Whether sanction u/s 197 Cr. PC was required against A-4 Dilip 370 Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam (P) Effect of Prevention of Corruption (Amendment) Act, 2018. 380 (Q) Conclusion 387
(A) Introduction
1. The present case pertains to allocation of 105.153 hectares of non- nationalized, abandoned coal mining area in district Giridih, Jharkhand in favour of M/s. Castron Technologies Ltd. (hereinafter referred to as M/s CTL) by 14th Screening Committee, Ministry of Coal (MOC), Government of India.
A (i) Investigation by CBI.
2. When the allegations of wrong doing and corruption came to be levelled against the public servants especially that of MOC, Government of India in the allocation of various coal blocks to private companies then all such cases of allocation were examined by Central Vigilance Commission (CVC). Upon finding sufficient material liable to be looked into further, the CVC chose to make a reference to CBI. Initially CBI registered certain Preliminary Enquiries in the matter. However, when sufficient incriminating material qua some such allocation of coal blocks came on record during the course of PE warranting detailed investigation then a number of regular cases were registered including the present case against company M/s CTL, company M/s CML, their directors and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 5 of 389 also against unknown public servants and private persons for the offences u/s 120-B/420 IPC and 13 (1) (d) r/w Section 13 (2) P.C. Act, 1988.
3. Upon completion of investigation, CBI filed a final report u/s 173 Cr.PC charge-sheeting six accused persons i.e. company M/s. Castron Technologies Ltd. (A-1) (hereinafter referred to as M/s CTL), its director Mahendra Kumar Agarwalla (A-2), company M/s Castron Mining Ltd. (A- 3) (hereinafter referred to as M/s CML), Dilip Ray, the then Minister of State for Coal (A-4), Pradip Kumar Banerjee, the then Additional Secretary, Ministry of Coal and Chairman 14th Screening Committee (A- 5) and Nitya Nand Gautam, the then Adviser (Projects), Ministry of Coal and Member Convenor, 14th Screening Committee (A-6) for the offences u/s 120-B/420 IPC and 13 (2) r/w 13 (1) (d) PC Act, 1988 beside substantive offences thereof.
4. The final report also stated that one other accused namely Sh. P.K. Agarwalla (elder brother of A-2 M.K. Agarwalla), the then Member of Parliament, is not being recommended for prosecution as he has since expired.
A (ii) Proceedings before the Court:
5. After considering all the facts and circumstances as were mentioned in the final report filed u/s 173 Cr.PC cognizance of the offence u/s 120-B IPC and offence u/s 120-B/420/409 IPC and 13 (1) (c) r/w 13 (1) (d) of Prevention of Corruption Act, 1988 was taken against all the six charge-sheeted accused persons vide a detailed order dated
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 6 of 389 15.01.2016. Cognizance for the substantive offence i.e. for the offence of cheating u/s 420 IPC was also taken against A-1 M/s CTL, A-2 M.K. Agarwalla and A-3 M/s CML beside also taking cognizance for the offence u/s 409 IPC and for the offences u/s 13 (1) (c)/13 (1) (d) P.C. Act, 1988 against the three accused public servants i.e. A-4 Dilip Ray, A-5 P.K. Banerjee and A-6 N.N. Gautam.
6. The case of the prosecution as stood disclosed from the final report u/s 173 Cr.PC was mentioned in some details in the order of cognizance dated 15.01.2016. For the sake of brevity the relevant paragraphs of the said order are being reproduced over here:
Order dated 15.01.2016 (Para No. 3 to 11)
3. Briefly stated the necessary facts as required for the purpose of present order and as disclosed in the final report u/s 173 Cr.PC filed by CBI are as under: M/s CTL through its director M.K. Agarwalla vide its application dated 09.05.98 applied to Ministry of Coal (MOC) for allotment of “Brahmadiha” Coal Block situated at Giridih, Jharkhand. It was stated in the application that the extracted coal shall be used by the company for washery and power generation. When the said application of the company came to be considered then views of Coal India Ltd. (CIL) were sought. However CIL sought a report about the viability of the coal block qua various aspects from Central Mine Planning & Design Institute Limited (CMPDIL). On the basis of report of CMPDIL dated 13/17.08.98 submitted to CIL with a copy to MOC, it was conveyed by CIL to MOC vide its letter dated 02.09.98 that as the block whose allotment was sought for was an abandoned mine area and was full of water so it could be dangerous to the adjoining properties of Central Coal Fields (CCL) where coal mining activities were being undertaken through underground mining method. It was also observed that as the coal reserves in the block were very meager i.e. to the tune of 0.7 million tonnes only and not 2.21 million tonnes as indicated by the applicant company M/s CTL so the mining of the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 7 of 389 coal block will be highly uneconomical. It was also stated that to mine coal from the barrier between the proposed coal block and the adjoining lease hold mines of CCL, would be against the safety norms and also against the mining statues. It was also stated that as per the guidelines approved by MOC for allotment of captive coal blocks, the allotment of the impugned coal block will be contrary to the said guidelines. Thus on account of the aforesaid scientific and legal considerations, the proposal of the applicant company M/s CTL was stated to be not viable. Subsequently Sh. N.N. Gautam Adviser (P) again wrote a letter dated 06.11.98 to CIL seeking further clarification. However in response thereto CIL vide its letter dated 16.03.99 again reiterated its earlier stand and also highlighted that the impugned block was not in the list of identified captive coal blocks to be allocated. It also reiterated the danger to the adjoining mine of CCL. However, Sh. N.N. Gautam, the then Adviser (Projects) MOC prepared a detailed note dated 16.04.99 interalia reproducing the observations made by CIL and also mentioned about a subsequent discussion held with CIL and CMPDIL on 13.04.99 and stated that the impugned coal block with limited reserves was not included in the identified list of captive coal blocks and was also not viable for captive coal mining. He thus proposed that it will not be possible to allot the said abandoned coal mine to applicant company M/s CTL. The file thereafter was put up before the then Additional Secretary (Coal) Sh. P.K. Banerjee who at that time was also Chairman of the Screening Committee. Sh. P.K. Banerjee thereafter forwarded the file to Secretary (Coal) on 22.04.99 and from the desk of Secretary (Coal), the file went to the office of Minister of State for Coal, Sh. Dilip Ray on 23.04.99. However on 12.05.99 applicant company M/s CTL submitted a fresh representation to Minister of State for Coal stating that their application may be considered expeditiously. Accordingly on 13.05.99 the file came to the desk of Secretary (Coal) from the office of Minister of State for Coal with the endorsement by Minister of State for Coal that in the light of representation received from applicant company M/s Castron Technologies Ltd, the case may be re-examined. The file accordingly moved downwards and thereafter Adviser (Projects) MOC, Sh. N.N. Gautam made a fresh detailed note dated 20.05.99. In the said note dated 20.05.99, Sh. N.N. Gautam however made a complete u-turn from his observations made in the earlier note dated 16.04.99 stating that in the light of the representation of the applicant company received from the office of Minister of State for Coal and the subsequent clarifications which the representatives of the applicant company M/s CTL have
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 8 of 389 made to him, the coal block though was not included in the identified list of captive blocks and though also does not conform to the guidelines already approved by the MOC but can still be examined in the Screening Committee as the reserves in the said coal block as per the applicant company M/s CTL were about 2.215 million tonnes. It was also stated that extraction of coal, if is carried out @ 0.15 MPTA, then the production will work out to about 15 years. He also stated that a fresh clearance from CIL can be obtained for including the impugned coal block in the list of captive mines to be allocated. He also stated that the applicant company has reworked the investment to be made in the project and from the earlier projected investment of Rs. 120 crores, the same will be only to the tune of Rs. 24.25 crores. He further stated that the applicant company M/s CTL has engineering workshop at Dhanbad and a steel foundry having induction furnace and arc furnace lying idle due to erratic power supply and the said installation is proposed to be re-located by the company. He also observed that there is no working mine belonging to M/s CCL within the vicinity of 2.5 KM and that CCL does not have any proposal to work in this area and it will be in the national interest to exploit these reserves rather than letting them to be lost for ever or letting them to be left for unsafe illegal mining activity. He thus stated that fresh comments from CIL can thus be again sought. On the basis of said note dated 20.05.99 of Sh. N.N. Gautam when the file came to the desk of Sh. P.K. Banerjee, Additional Secretary Coal, he not only approved the said note made by Sh. N.N. Gautam but also expressed hope that the size of the mine/reserves will meet the criteria of minimum size decided qua allocation of captive coal mining. The file was again marked to Sh. N.N. Gautam on 31.05.99 and thereafter on 03.06.99 Sh. N.N. Gautam again put up a note in the file wherein while reiterating the claim made by the applicant company M/s CTL in its fresh representation also observed that CCL/Coal India has no programme of working these reserves at any point of time. He though again made a reference to the already approved guidelines of MOC stating that a captive coal block to be allocated by open cast method must have a minimum production of one million tonnes itself per annum but stated that either the reserves should be permitted to be exploited by private parties with a small production of 0.15 million tonnes as proposed by the party or the reserve will never be exploited at all. He again made a reference to his earlier note dated 20.05.99 and proposed that the matter may be put up for consideration before the Screening Committee. Sh. P.K. Banerjee, Additional Secretary Coal who also was Chairman of Screening Committee approved the said proposal on 04.06.99 and the matter thus came to be put up in the 14th Screening Committee meeting.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 9 of 389 Sh. N.N. Gautam was in fact also Member Secretary of the Screening Committee. 4. In the 14th Screening Committee meeting which was held on 18.06.99 and 19.06.99, the application of applicant company M/s CTL alongwith that of various other applicant companies came to be considered. The Screening Committee though mentioned all the facts, as above but recommended “Brahmadiha” coal block for allocation to applicant company M/s CTL subject to relaxation of guidelines by MOC regarding allotment of blocks with minimum extraction capacity of 1 MTPA. However the same Screening Committee while discussing the case of another applicant company M/s OCL India Ltd. observed that as the requirement of coal has been indicated by the company as 0.17 to 0.20 million tonnes per annum only, so applicant company M/s OCL India Ltd. was not eligible for allotment of a captive coal block as it does not fit into the new guidelines of a captive coal block and accordingly rejected the case of the company. Subsequently on the basis of the said minutes of Screening Committee a note was prepared in the file seeking relaxation of guidelines qua the claim of applicant company M/s CTL. It was observed by Sh. T.K. Ghosh, Director that as desired by Additional Secretary orders of the Government may be obtained and that Adviser (P) may like to obtain orders of MOS (Coal) through Secretary Coal. Accordingly the file moved from the desk of Adviser (P) and Secretary Coal to the office of Minister of State (Coal) who vide his signatures dated 23.08.99 approved the same. On the basis of the said approval accorded by Sh. Dilip Ray, the then Minister of State for coal, letter of allotment of “Brahmadiha” coal block in favour of M/s CTL was issued on 01.09.99 by MOC. 5. However subsequently when allegations of wrong doing and corruption were levelled with respect to allocation of various coal blocks by Ministry of Coal, the Central Vigilance Commission (CVC) chose to examine all such files and upon getting prima facie satisfied that the matter requires detailed inquiry/investigation, a reference was made to CBI. As per the procedure adopted by CBI in all such cases a preliminary inquiry was initially registered and when during the course of preliminary inquiry it was found that the matter qua M/s Castron Technologies Ltd. warrants detailed investigation, so a regular case was registered vide RC No. 221 2014 (E) 0002. 6. It has been stated in the final report that during the course of investigation, it was found that the company M/s CTL while applying initially for allotment of a coal block had not even specified the end
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 10 of 389 use project for which the extracted coal shall be put to use and had merely stated that it would be used for washery and for power generation. It was also found that despite strong objection raised by CIL and CMPDIL qua allotment of the said coal block, the Screening Committee and Minister of State for coal strongly proceeded ahead to allot the said coal block in favour of M/s CTL. It was also found that one P.K. Agarwalla who not only was a director of M/s CTL but was also elder brother of applicant Mahender Kumar Agarwalla, was a sitting Member of Parliament. Sh. P.K. Agarwalla was also authorised by the company M/s CTL to pursue the matter for allocation of a coal block for the company with MOC. It was thus found that the impugned coal block despite being not included in the identified list of captive coal blocks came to be allocated to M/s CTL on account of a criminal conspiracy hatched between applicant company M/s CTL and its director Mahender Kumar Agarwalla, P.K. Agarwalla and other officers of MOC beside the then Minister of State for Coal Sh. Dilip Ray. 7. It has been stated that Adviser (Project), MOC, Sh. N.N. Gautam though had earlier observed in his detailed note dated 16.04.99 that it may not be possible to allot the abandoned mine to M/s CTL but took a complete u-turn in his note dated 20.05.99 without there being any change in circumstances. It was found that on account of a representation received by Minister of State for Coal from applicant company M/s CTL, the file was again put into motion and merely on the basis of certain unverified claims made by the applicant company M/s CTL, the earlier observations made in the files were over-turned by Sh. N.N. Gautam himself. Similarly it has been stated that Sh. P. K. Banerjee who was Additional Secretary Coal and Chairman Screening Committee also took a completely different view vide his note dated 31.05.99 even though he had earlier approved of the note dated 16.04.99 of Sh. N.N. Gautam whereby the proposal of the applicant company was proposed to be rejected. 8. It was also found that CIL vide its letter dated 31.05.99 had however again reiterated its views to MOC as were earlier expressed in its letter dated 16.03.99 regarding non-viability of the impugned coal block for allocation for the purposes of mining. 9. It has been also stated that even though the coal requirement of the applicant company M/s CTL did not meet the stipulated guidelines of MOC of there being minimum extraction of 1 MTPA, the Screening Committee headed by Sh. P.K. Banerjee and Sh. N.N. Gautam as its Member Secretary, proceeded to recommend the case of applicant company M/s CTL subject to relaxation of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 11 of 389 guidelines, while at the same time rejected a similar claim of another company i.e. M/s OCL India Ltd on the ground that the coal requirement as indicated by the said company did not fit into the new guidelines approved by MOC. It has also been stated that on account of an active connivance between the MOC officers i.e. Sh. Pradip Kumar Banerjee, the then Additional Secretary, Ministry of Coal and Sh. Nitya Nand Gautam, the then Adviser (Projects), Ministry of Coal beside Minister of State for Coal Sh. Dilip Ray and the company M/s CTL and its director Sh. Mahender Kumar Agarwalla and P.K. Agarwalla, the impugned coal block even though not falling in the identified list of captive coal blocks was allocated to the company M/s CTL with a view to cheat Government of India of its important nationalised natural resources i.e. coal. During the course of investigation, it was also found that after allocation of impugned coal block, company M/s CTL started extracting coal illegally even without grant of any mine opening permission by the concerned authorities. It has been also stated that though the coal block was allocated for captive use only but the impugned coal block came to be allocated to M/s CTL without there being any end use project to be established by the company. In fact the illegal extraction of coal was also stated to have been started without any steps having been taken towards setting up of any such end use project. 10. It has been further stated in the final report that during the course of investigation, it was found that in the year 1999 itself a family settlement was arrived at between Mahender Kumar Agarwalla, P.K. Agarwalla and their two other brothers namely D.K. Agarwalla and Y.K. Agarwalla. As per the said family settlement, the coal mine which was to be allocated in favour of M/s CTL was to stand transferred to P.K. Agarwalla. Accordingly all the shares of M/s CTL stood transferred in favour of Mahender Kumar Agarwalla and his family members while the coal bock so allocated stood transferred in favour of another company namely M/s Castron Mining Ltd. (M/s CML) of P.K. Agarwalla. It was also found that M/s CML was also involved in illegal extraction of coal from the impugned coal block without signing of a mining lease or obtaining mine opening permission. It has been stated that on 01.05.04, M/s CTL had applied for mine opening permission through M.K. Agarwalla and the same came to be issued in favour of M/s CTL on 15.02.05. However M/s CML in its monthly returns submitted to District Mining Officer in the month of February 2005 had shown coal having been extracted from the coal block to the tune of 3195 tonne. Thus it was found that Sh. P.K. Agarwalla in conspiracy with other accused persons was intensely pursing the case of M/s CTL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 12 of 389 for allotment of a coal block in its favour knowing fully well that upon allocation, the coal block would stand transferred to his company M/s CML and that they will sell the extracted coal block to other companies so as to earn undue profit. 11. It has been thus stated that all the aforesaid persons conspired together to cheat MOC for the purposes of allocating a captive coal block in favour of the company. [Note: The detailed facts and circumstances including various communications made by company M/s CTL or the notings made by the accused persons beside the correspondence exchanged between MOC, CIL, CMPDIL and CCL shall be dealt with in detail at a later stage of the present judgment.]
7. After all the accused persons had put in their appearance and were admitted to bail, copy of the final report u/s 173 Cr. PC was supplied to them. After due compliance of Section 207 Cr. PC arguments on the point of charge were heard. However during the course of arguments Ld. Counsels for the accused persons submitted that though they dispute the correctness of the allegations levelled by the prosecution against the various accused persons but in the overall facts and circumstances of the case they were of the opinion that during the course of trial when the prosecution will lead its evidence and all the accused persons will get a chance to lead their evidence then they will be in a better position to demonstrate that the allegations levelled by the prosecution against the accused persons were completely false.
Accordingly vide order sheet dated 26.04.2017 charges for various offences as under were framed against the accused persons, since the same were found to be prima facie made out against them.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 13 of 389 (B) Charges Framed
CHARGES FRAMED (I) (II) S.No Name of accused Charges Common to all Charges separately framed 1 A-1 M/s Castron (i) 120-B IPC 420 IPC; 379/34 Technologies Ltd. IPC (M/s CTL) (ii) u/s 120-B/409/420 IPC and Section 13 (1) (c) and 13 (1) (d) P.C. Act, 1988 2 A-2 Mahendra (i) 120-B IPC Kumar Agarwalla 420 IPC; 379/34 (ii) u/s 120-B/409/420 IPC and Section IPC 13 (1) (c) and 13 (1) (d) P.C. Act, 1988 3 A-3 M/s Castron Mining Ltd. ______379/34 IPC (M/s CML) 4 A-4 Dilip Ray (i) 120-B IPC (i) Sec. 409 IPC
(ii) u/s 120-B/409/420 IPC and Section (ii) 13 (1) (c) / 13 (1) (c) and 13 (1) (d) P.C. Act, 1988 13 (1) (d) P.C. Act, 1988 5 A-5 Pradip Kumar (i) 120-B IPC Banerjee 13 (1) (d) P.C. Act, (ii) u/s 120-B/409/420 IPC and Section 1988 13 (1) (c) and 13 (1) (d) P.C. Act, 1988
6 A-6 Nitya Nand (i) 120-B IPC 13 (1) (d) P.C. Act, Gautam (ii) u/s 120-B/409/420 IPC and Section 1988 13 (1) (c) and 13 (1) (d) P.C. Act, 1988
8. All the accused persons however pleaded not guilty to the charges so framed against them and claimed trial. Admission/ denial of documents u/s 294 Cr.PC was thereafter carried out qua all the documents as were relied upon by the prosecution and case was thereafter adjourned for recording of prosecution evidence.
9. In order to prove its case prosecution examined 51 witnesses. Out
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 14 of 389 of them examination-in-chief of 19 witnesses was however led by way of affidavits u/s 296 Cr.PC as their evidence was of formal character only. Though all the said 19 witnesses were also tendered for cross- examination to the accused persons but they chose not to cross-examine them.
Statement of all the six accused persons was thereafter recorded u/s 313 Cr.PC. Liberty was also given to all the accused persons to file their written statements u/s 313 (5) Cr.PC but only A-2 M.K. Agarwalla, A-3 M/s CML and A-6 N.N. Gautam chose to file their written statements u/s 313 (5) Cr.PC. A-4 Dilip Ray on the other hand stated that he has given detailed explanation in answer to question No. 730 of his statement u/s 313 Cr.PC.
10. Thereafter A-4 Dilip Ray and A-5 P.K. Banerjee both examined one witness each in their defence. However none of the other four accused persons led any evidence in their defence.
11. Detailed final arguments in the matter were thereafter heard as were addressed by Ld. Sr. P.P. Sh. A.P. Singh on behalf of prosecution; by Ld. Counsel Sh. Ajay Gaggar for A-1 M/s CTL; by Ld. Counsel Sh. P.K. Dubey for A-2 Mahendra Kumar Agarwalla; by Ld. Counsel Sh. Siddharth Aggarwal for A-3 M/s CML; by Ld. Senior Advocate Dr. Abhishek Manu Singhvi for A-4 Dilip Ray; by Ld. Counsel Sh. K.K. Patra for A-5 P.K. Banerjee and by Ld. Counsel Sh. Avijit Mani Tripathi for A-6 N.N. Gautam.
12. After having briefly mentioned the proceedings which took place in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 15 of 389 the Court, it will be now worthwhile to briefly refer to the deposition of various prosecution witnesses and defence witnesses as were examined in the present trial. [The deposition of the witnesses shall be referred to in detail wherever required in the later part of the judgment.]
(C) Evidence C (i) Prosecution Witnesses PW Name and Deposition/Role of witnesses examined in the No. designation of present case. the Witness 1 Sh. Sushil On 08.01.2014 he had led a CBI team to carry out Dewan search at the office of M/s Castron Mining Limited in Inspector, EO- Kolkata. He accordingly proved the documents which III, CBI, New were collected by his team during the course of said Delhi. search operation vide search list Ex. P-80 (D-2). 2 Sh. Parsana On 08.01.2014 he had led a CBI team to carry out Kumar search at the residence of Mahendera Kumar SP, CBI, ACB, Agarwalla at Dhanbad. He accordingly proved the Kolkata. documents which were collected by his team during the course of said search operation vide search list Ex. P-6 (D-21). 3 Sh. Tej Pal On 08.01.2014 he had led a CBI team to carry out Singh search at the corporate office of M/s Castron Mining Dy. SP. EO-III, Limited in Mumbai. He accordingly proved the CBI, New documents which were collected by his team during the Delhi. course of said search operation vide search list Ex. P- 85 (D-11). 4 Bimbhadhar During the period 14.03.1998 till 14.10.1999 he was Pardhan posted as Private Secretary to the then Minister of Additional State for Coal, Government of India, Dilip Ray (A-4). Secretary, He primarily deposed about letter dt. 21.04.1999 [Part Ministry of of Ex. P-14 (D-36)] of M/s Castron Technologies Ltd Home Affairs, having been received in the office of Minister of State Government of for Coal on 12.05.1999 and stated that the same was India marked by A-4 Dilip Ray to Secretary (Coal) with the direction to re-examine the matter in the light of representation received from M/s Castron Technologies Limited.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 16 of 389 5 Sh. Krishna During the period October 1997 till May 2000 he was Kumar Khadiya posted as Director (Technical), CMPDIL. He deposed Retired about processing of application dated 09/05/98 of M/s Director, P&D, Castron Technologies Ltd in CMPDIL seeking CMPDIL. identification of Brahmadiha coal mine as was received from CIL. He accordingly proved the comments, which were submitted by CMPDIL to CIL with a copy having been marked to MOC.
6 Sh. Sudhir During the period 1998-99 he was working as CMD, Kumar Varma CMPDIL. He also proved the comments which were Retired CMD sent on behalf of CMPDIL on the application dt. CCL. 09/05/98 of M/s Castron Technologies Limited seeking allocation of Brahmadiha coal block after the said application was received from CIL for examination and comments.
7 Sh. Balswamy During the period November 1997 till December 2000 Akala he was posted as CMD, CCL. He also proved the Retired CMD, comments which were sent on behalf of CCL on the CMPDIL application dated 09/05/98 of M/s Castron Technologies Limited seeking allocation of Brahmadiha coal block after the said application was received from CIL for examination and comments.
8 Sh. Vivek During the period 1998-99 he was posted as Director Varun Prasad (Investment Promotion Cell), Ministry of Power, Retired Government of India. He stated that the application of Principal M/s Castron Technologies Limited received by Ministry Director of Power from MOC was got examined from CEA and it General was finally conveyed to MOC that as the proposal is for Income Tax identification of coal mine area for captive mining and as such CEA has no comments to offer.
9 Sh. Rajinder After having retired as General Manager, Western Paul Gupta Coalfield Ltd in August 1996 he had joined Central Retired Collieries Ltd in June 1998, a private coal company, General owned by Sh. Govind Daga. He deposed that in the Manager, name of one other company namely Central Utilities Western and Investment Ltd which was also got incorporated by Coalfield Ltd. Sh. Govind Daga in the year 1998, an application for seeking allocation of captive coal block was submitted under his signatures to MOC. He also appeared on behalf of applicant company before 14th Screening Committee for making presentation but stated that no
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 17 of 389 coal block was allotted to their company as their company had not provided any information about linkage of washed coal towards captive use in any power plant.
10 Sh. Gedela He was an officer of a company M/s OCL India Ltd. He Sasibhusana deposed that in 1999 his company M/s OCL India Ltd Rao had applied for allocation of a captive coal block for use Retired DGM in its cement and refractories and the total coal (Legal), OCL. requirement was stated as 14000 MT to 17000 MT per month. He however stated that no coal block was allotted to their company by 14th Screening Committee.
11 Sh. J. Hari In the year 1999 he was posted as Joint Secretary, Narayan MOC, Government of India. He deposed that under Retired Coal Mines Nationalization Act, it was specifically Chairman provided that captive coal blocks could be allocated to IRDA. only such companies which were engaged in specified end use i.e. generation of power, iron and steel and cement. He further stated that M/s Castron Technologies Limited and M/s Central Utilities and Investments Limited were seeking allocation of coal blocks only for use in their washeries and that they were not engaged in any of the specified end use as was provided under the Act.
12 Sh. Ravi During the period February 2015 till December 2015 he Ranjan Mishra was posted as Joint Secretary, Department of Energy, Joint Secretary, Government of Jharkhand at Ranchi. In September and Department of November 2015 he had informed CBI in response to Energy, their query that no proposal was received from M/s Government of Castron Technologies Ltd to establish the captive Jharkhand power plant in District Giridih either in Department of Industries, Government of Jharkand by Jharkhand Urja Sanchran Nigam Ltd or in Department of Energy.
13 Sh. PK Singh In December 1998 he was posted as Dy. Secretary in Additional Ministry of Power, Government of India. He also Director deposed that Ministry of Power had responded to MOC General in as regard the application of M/s Castron Technologies Directorate of that as the proposal is for identification of coal mining Revenue area for captive mining and thus CEA has no Intelligence comments to offer. He had also attended 14th Screening Committee meeting on 18/6/1999 and 19/6/1999 as was Chaired by A-5 P.K. Banerjee and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 18 of 389 stated that in the meeting the stand of Ministry of Power as regard the proposal of M/s Castron Technologies Ltd remained the same.
14 Ms. Neera During the period 1984 till 2007 she was posted in Sharma MOC on different posts. In the year 1998-99 she was Dy. Secretary, posted as Section Officer, CPAM Section, MOC. She Department of proved various files of MOC as were maintained in Investments CPAM Section with respect to coal block allocation and Public matters. She specifically deposed about processing of Assets application dt. 09.05.1998 of M/s Castron Technologies Management. Ltd as was received in MOC and the subsequent proceedings whereby comments were received from CIL, CMPDIL, CCL and other concerned entities. She also deposed that subsequently 14th Screening Committee had allotted Brahmadiha coal block in favour of M/s Castron Technologies Ltd and after processing of the same, necessary allocation letter was issued in favour of the company. She thus proved comments of various officials of CPAM Section and other senior officers of MOC as were there in the files of MOC. She also deposed about the subsequent communications received from M/s Castron Technologies Ltd in MOC after allocation of captive block was made in favour of the company including the approval of mining plan.
15 Sh. Naresh During the period 1998-99 he was working as Director Kumar Sharma (Technical) Coal India Ltd at Kolkata. He deposed Retired about processing of application of M/s Castron Chairman, Coal Technologies Ltd in CIL after the same was received India Limited. from MOC for examination and comments. He also deposed about comments received from CMPDIL and CCL on the said application and about other communications exchanged between CIL and MOC.
16 Sh. Sibabrata During the period 1997-98 he was posted as Dy. Chief Bhattacharya Geologist in Central Coalfield Ltd, at Darbhanga Retired Dy. House, Ranchi. He deposed that Brahmadiha patch Chief Geologist was situated in Giridih coalfield of CCL and stated that from CCL he had studied the old geological report and the old records of geological survey of India. He had accordingly submitted a report pointing out various reasons on the basis of which the said patch could not have been identified for allocation as a captive coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 19 of 389 block. He accordingly proved the comments submitted in this regard by him to his senior officers in CCL.
17 Sh. K. Ravi In December 2015 he was posted as Director Kumar (Industries), Government of Jharkhand. He deposed Director that in December 2015 he had provided information to Industries, CBI that M/s Castron Technologies Ltd had not Government of submitted any proposal of 2x5 MW captive power plant Jharkhand for Giridih, Jharkhand and that no proposal was even received for transmission of power to the industries department.
18 Sh. Santosh He was posted in MOC during the period December Kumar Kakkar 1999 till 30.04.2007 as Under Secretary in CA Section. Retired Dy. He had dealt with the matter relating to allocation of Secretary, Brahmadiha coal block to M/s Castron Technologies MOC Ltd in April/May 2002 i.e. during the post allocation stage. He accordingly proved the said proceedings as were undertaken in MOC including the correspondence exchanged between MOC and M/s Castron Technologies Ltd as regard the status of opening of coal mine by the company.
19 Sh. Upendra He was Assistant Mining Officer in District Mining Narayan Singh Office, Giridih, Jharkhand. During the course of retired investigation he had provided records relating to mine Assistant opening permission granted to M/s Castron Mining Officer Technologies Ltd by the office of District Mining Office. Subsequently, on 10.10.2015, he was part of a team comprising CBI officers and officers of the office of coal controller and coal India Ltd. which had carried out measurement of coal lying extracted at the mine site of M/s CTL there. He accordingly proved the necessary record in this regard.
20 Sh. During the period 25.07.2001 till 13.12.2004 he was Kamleshwari posted as District Mining Officer, Giridih. He deposed Dass about the proceedings which took place in his office Deputy Director qua execution of mining lease deed by M/s Castron Mines Technologies Ltd and proved the relevant documents, as were available in file Ex. PW 19/C (Colly) (D-54) of the office of District Mining Officer, Giridih.
21 Sh. Shyam During the period 14.06.2005 till 19.11.2005 he was Nandan PD posted as District Mining Officer, Giridih. He deposed
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 20 of 389 Vidyaharti that on the directions of Dy. Commissioner, Giridih, he Assistant had carried out verification qua establishing the coal Director washery and power plant by M/s Castron Technologies (Geology) Ltd and had submitted his report to Dy. Commissioner, Giridih. He accordingly proved the various documents as were available in file Ex. PW 19/D (Colly) (D-55) of the office of District Mininig Officer, Giridih.
22 Sh. Amrita In the year 2011 he was initially posted as OSD in the Acharya office of Coal Controller and subsequently he was retired Coal working as Coal Controller till his retirement in June Controller 2015. During the course of investigation of the present case he had provided various documents/files available in his office relating to M/s Castron Technologies Ltd to CBI.
23 Sh. Prem Raj He was posted in MOC as Assistant from June 1990 till Kuar January 1996 and thereafter till September 2006 he retired Dy. was posted as Section Officer, CA Section, MOC. He Secretary proved the proceedings regarding constitution of Department of Screening Committee in MOC and also the Consumer proceedings relating to approval of mining plan of M/s Affairs CTL after allocation of impugned coal block in its favour by 14th Screening Committee.
24 Sh. Sunil In the year 2014 he was posted as Mine Inspector at Kumar District Mining Office, Giridih. He was also a member of surveyor, the team which had measured the coal stock lying at Department of Brahmadiha coal mine of M/s Castron Technologies Mines and Ltd. He accordingly proved the report Ex. P-108 (Colly) Geology prepared in this regard, which was also signed by him beside other members of the team.
25 Sh. Ashok Jain. He was a Director of a Mining company called Saumya Mining Ltd based at Kolkata. He deposed that in the year 2004-05 his company had provided various machines on hire basis to M/s Castron Technologies Ltd at Giridih, Jharkhand for carrying out mining activities. During the course of investigation he had provided all such relevant documents to CBI and accordingly proved the same during the course of his deposition.
26 Sh. Raj Kumar During the period April 1992 till April 1996 he was Sachdev working as Advisor (projects) in MOC. He deposed
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 21 of 389 retired Advisor about the circumstances in which CMN Act 1973 came (Projects), to be amended by way of CMN (Amendment) Act, 1993 Ministry of Coal and whereby coal blocks for captive use were decided to be allocated to private sector companies engaged in specified end use. He also deposed about various communications which were undertaken between MOC and CIL or its subsidiary companies regarding identification of coal blocks which could be allocated to private sector companies for their captive use in specified end uses.
27 Sh. Deepak R. He was a handwriting expert posted in CFSL, CBI. He Handa had examined various questioned documents as were Senior sent to him by CBI along with certain specimen Scientific signatures of Mahendra Kumar Agarwalla. He Officer, CFSL, accordingly proved his report dated 18.12.2016 Ex. PW CBI. 27/B (part of D-263) opining that the questioned signatures were that of the person whose specimen signatures were provided to him.
28 Sh. Suman He was working as Under Secretary, Ministry of Power Majumdar since August 2011. In September 2015 on the request Under of CBI he had provided certain records of his Ministry Secretary, relating to the present case. Ministry of Power 29 Sh. Ashok During the period November 2004 till May 2005 he was Kumar Singh posted as District Mining Officer In-Charge Giridih, retired Jharkhand. He had carried out inspection of the mine Assistant area allotted to M/s Castron Technologies Ltd and Mining Officer deposed that in the leasehold area he had found 3500 tonnes of mineral lying. He also deposed that every company engaged in mining of coal is required to submit a monthly report about the coal extracted and dispatched from the site. He thus provided to CBI various such reports submitted by M/s Castron Technologies Ltd and subsequently by M/s Castron Mining Ltd.
30 Sh. Bhartendu He was an employee of M/s Castron Technologies Ltd Rai during the period December 2002 till December 2004. retired Mining Subsequently, from January 2005 till January 2009 he Consultant joined M/s Castron Mining Limited. He deposed about various communications undertaken by M/s Castron
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 22 of 389 Technologies Ltd with the office of Coal Controller and Director General of Mine Safety with respect to execution of mine lease and obtaining mine opening permission. He also deposed that extraction of coal from Brahmadiha coal mine started in June 2005 and that subsequently monthly reports of stock of coal were submitted to the office of District Mining Officer, Giridih.
31 Sh. B.B. Singh From December 1999 he was posted as Dy. Director Additional (Mines), Ranchi and thereafter in July 2000 he was Director given additional charge of Additional Director (Mines). (Mines), He was also posted in the said department in the year Department of 2005 and thereafter from year 2007 on-wards. During Industries, the course of investigation of the present case, he had Mines and provided various records from his office relating to M/s Geology, Castron Technologies and Brahmadiha Coal Block to Government of CBI. Jharkhand. 32 Inspector He was the Investigating Officer of the case. He Pawan Kaushik deposed extensively about the investigation carried out by him and also about the collection of various documents from different authorities by him during the course of investigation and proved the final report of the investigation prepared by him.
C (ii) PROSECUTION WITNESSES WHOSE EXAMINATION-IN-CHIEF WAS LED BY PROSECUTION BY WAY OF AFFIDAVIT U/S 296 Cr.PC BUT ACCUSED PERSONS CHOSE NOT TO CROSS-EXAMINE THEM. PW Name and Deposition/Role of the witness in the present case. No. designation of the Witness 1 S.N. Khan On 08.01.2014 he led a CBI team to carry out search at Addl. the office premises of M/s Castron Technologies Superintendent Limited at Kolkata and he accordingly proved the of Police, CBI, search list prepared in this regard by him beside also EO-III, New deposing about the documents collected during the Delhi search operation.
2 A. Sanjay During the course of investigation he had provided the Sahay Minutes of 21st and 24th meeting of Inter-Ministerial Under Group (IMG) which had recommended de-allocation of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 23 of 389 Secretary, CA- Brahmadiha Coal Block in favour of M/s Castron 1 Section, Technologies Ltd. Ministry of Coal 3 Kishore Kumar During the course of investigation, he had provided Under certain documents and notings of MOC files pertaining Secretary, CA- to the period when amendments were being introduced 1 Section, in CMN Act, 1973. Ministry of Coal 4 Sunit Kumar During the course of PE No. 219 2012 E 0004 EO-I, Pal, New Delhi, he had collected various files/documents Dy. Supdt. of from MOC by way of different production-cum-seizure Police, memos and he accordingly deposed about the same. Economic Offences-III, CBI, New Delhi. 5 Arindam During the course of investigation he had provided Sarkar, records pertaining to account held in their bank by M/s Manager, Saumya Mining Ltd. Internal Services, Standard Chartered Bank, Kolkata. 6 Debasis Nag, During the course of investigation, he had provided to Chief Manager CBI records from his office relating to Brahmadiha Coal (Mining), Coal Block in District Giridih as was allotted to M/s Castron India Ltd. Technologies Ltd., by MOC. 7 U.K. Tripathi, During the course of investigation, he had provided to Chief Manager IO records from his office relating to Brahmadiha Coal (Geology) CCL Block in District Giridih as was allotted to M/s Castron (HQ), Technologies Ltd., by MOC. Darbanga House, Ranchi. 8 A. Ravishankar, During the course of investigation, he had provided to General IO records from his office relating to Brahmadiha Coal Manager Block in District Giridih as was allotted to M/s Castron (CT & Labs), Technologies Ltd., by MOC. Coal Technology & Lab Division of CMPDIL,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 24 of 389 Ranchi. 9 Ashok Kumar He had also provided to CBI documents relating to Chaudhary, Brahmadiha Coal Block in District Giridih allotted to M/s Director, Castron Technologies Ltd, as were available with the Castron company. Technologies Ltd, Jharkhand. 10 Subhas Surin He had also provided to CBI documents available in Chief Manager their office relating to Brahmadiha Coal Block in District (Geology) Giridih allotted to M/s Castron Technologies Ltd. CMPDIL, Dhanbad. 11 K.N. During the course of investigation he had provided Vishwakarma, necessary information relating to M/s Castron Superintendent Technologies Ltd, M/s Castron Mining Limited and M/s Central Excise, Foundry Fuel Private Limited to the IO from the records Jharkhand. available in their office. 12 Sanjib During the course of investigation he had provided Bhattacharya, necessary information from his office records to CBI Under vide his letter dated 06.07.2015. Secretary in Estt./ASO Section, Ministry of Coal 13 Manoj Kumar In response to CBI request, he had sent certified true AGM, Project copy of Account Opening Form of M/s Saumya Mining Finance, State Pvt Ltd A/c No. 01050070022; (ii) certified copy of Bank of India, Memorandum and Articles of Association and Ballard Estate, statement of account no. 01050070022 from August Fort, Mumbai 2004 to March 2006, to Inspector of Police, CBI, EO-III, New Delhi. 14 Dileep Kumar He had also produced documents to IO Inspector Manager, SBI, Pawan Kumar Kaushik, CBI, EO-III, New Delhi, vide Jainagar letter dated 07.11.2015 pertaining to M/s Castron Branch, Mining Ltd., And M/s Saumya Mining Ltd as were Kodarma, available in their bank records. Jharkhand. 15 E. Jaya Kumar In pursuance to CBI letter dated 09.06.2014, he vide Director of letter dated 09.06.2014 addressed to Inspector Pawan Mines Safety, Kumar Kaushik provided the requisite information. Kodarma
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 25 of 389 Region Camp, Dhanbad. 16 S.N. Upadhyay In pursuance to CBI Email dated 11.03.2015, he vide Secretary, letter dated 04.11.2015 addressed to Inspector Pawan Bokaro Kumar Kaushik provided the requisite information. Industrial Area Development Authority, BIADA Bhawan, Balidih, Bokaro 17 Subir He had produced one file of Coal India Limited Majumder containing copies/originals of documents relating to M/s General Castron Technologies Ltd (Brahmadiha Coal Block) Manager without any note sheet portion, before Inspector Pawan (Geology), CIL. Kumar Kaushik. 18 Binay Kumar In pursuance to CBI letter dated 10.10.2015 he vide Electrical letter dated 20.10.2015 provided the requisite Superintending information to IO Inspector Pawan Kumar Kaushik. Engineer, Electric Supply Circle, Dhanbad, Jharkhand 19 B. Das During the course of investigation in response to CBI GM, District letter dated 10.10.2015 he had provided necessary Industry information vide letter dated 28.10.2015 to IO Inspector Centre, Pawan Kaushik. Dhanbad.
C (iii) Defence Witnesses DW Name and designation Deposition/Role of the witness in the No. of the Witness present case. 1 Sh. Sanjib He was posted as Under Secretary, Bhattacharya BA/Establishment Section, Ministry of Coal, Under Secretary, Government of India. He produced the record BA/Establishment regarding posting of accused P.K. Banerjee in Section, MOC, GOI MOC and his relinquishing the charge with (examined on behalf of effect from 22.07.1999. A-5 P.K. Banerjee)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 26 of 389 2 Sh. Dominic Dungdung He was Section Officer in MOC, Government Under Secretary, CBA- of India since the year 2014. He produced the I/CMPF Section, MOC, Minutes of second meeting of Screening GOI Committee held on 13.08.93; Minutes of tenth (examined on behalf of meeting of Screening Committee held on A-4 Dilip Ray) 3.4.96; Minutes of thirteenth meeting of Screening Committee held on 24.8.98; Record note of fifteenth meeting of Screening Committee held on 6.3.2000; Record note of eighteenth meeting of Screening Committee held on 5.5.2003.
13. Before adverting further, it will be now also appropriate to briefly mention the rival contentions of both prosecution as well as that of Ld. Counsels for the accused persons.
(D) ARGUMENTS D (i) Arguments on behalf of Prosecution
14. It was submitted by Ld. Sr. PP Sh. A.P. Singh that the facts and circumstances of the present case clearly points to the hatching of a criminal conspiracy by the private parties and the public servants i.e. accused public servants involved in the process of allocation of impugned coal block. It was submitted that admittedly Brahmadiha coal block was not a nationalised coal mine. Accordingly the said coal block was not included by CIL or its subsidiary companies in the identified list of captive coal blocks to be allocated by MOC. It was thus submitted that as Brahmadiha coal block was not an identified captive coal block to be allocated to private parties, so even the screening committee was not competent to consider its allocation to any company much less to M/s CTL. The very purpose/mandate of Screening Committee as was
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 27 of 389 constituted in MOC was also referred to while submitting that screening committee was competent to make recommendation for allocation of only such coal blocks as were already identified for allocation for captive use and that too in favour of companies engaged in generation of Power, Production of Iron & Steel or production of cement.
15. It was also submitted that even the officers of CIL, CCL and CMPDIL pointed out these facts repeatedly to Ministry of Coal officers and even A-6 N.N. Gautam himself also highlighted this aspect initially in all the notings made by him. It was thus submitted that the very procedure adopted by the screening committee in considering the allocation of said coal block in favour of M/s CTL was thus contrary not only to law but also to the practice and procedure followed by MOC.
16. It was also submitted that A-4 Dilip Ray who at that time was Minister of State for Coal had himself approved the guidelines of MOC stating that no coal block shall be allocated for captive mining to a company engaged in production of iron and steel or sponge iron if the annual production capacity is less than 1 MTPA in opencast mining but in the case of M/s CTL he agreed to relax the said guidelines so as to extend undue benefits to the private parties involved.
17. It was also submitted that despite strong objections having been raised by CIL, CCL and CMPDIL, A-6 N.N. Gautam took a U-turn and presented wrong facts to the Screening Committee by stating that CIL had no plan to mine the said coal block ever. It was pointed out that CIL had merely communicated to MOC that in the near future CIL had no
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 28 of 389 intention to mine the said coal block but it was not claimed that CIL never wanted to mine the said coal block.
18. Ld. Sr. PP Sh. A.P. Singh also referred to various notings recorded by the officers of MOC to show that after a representation was received by A-4 Dilip Ray from M/s CTL on 12.05.99 then a complete u-turn was made in the files of MOC and suddenly a case was sought to be made out that the claim of M/s CTL can be considered by the screening committee. As regard the repeated claim of accused public servants that the re-examination of application of M/s CTL was carried out at the instance of Secretary, Coal, S.S. Boparai. It was submitted that though Secretary, Coal, S.S. Boparai marked a representation received from company M/s CTL to A-6 N.N. Gautam, Advisor (Projects) for examination but at that time A-6 N.N. Gautam vide his note dated 16.04.99 stated that it may not be possible to allot the said abandoned mine to M/s CTL. It was further submitted that subsequently when direction for re-examination were received from A-4 Dilip Ray then A-6 N.N. Gautam vide his note dated 20.05.99 proposed that the matter may be considered in the Screening Committee meeting and A-5 P.K. Banerjee, Additional Secretary, Coal agreed to the said proposal but at that time the file was never put up before Secretary Coal, S.S. Boparai. It was submitted that subsequently when the Screening Committee considered the application of M/s CTL and recommended allocation of Brahmadiha coal block in favour of M/s CTL subject to relaxation of guidelines then A-4 Dilip Ray, Minister of State for coal approved relaxation of the said guidelines so as to favour M/s CTL. It was also
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 29 of 389 submitted that as on 23.08.99, when A-4 Dilip Ray approved the relaxation of guidelines so as to favour M/s CTL then he was only part of a caretaker Government and was thus not supposed to take any policy decisions.
19. It was also submitted by Ld. Sr. PP that even though a family settlement was arrived at between the brothers M.K. Agarwalla and P.K. Agarwalla and their two other brothers in the year 1999 but still the said family settlement was never brought to the notice of Ministry of Coal and Sh. P.K. Agarwalla who was a sitting member of Parliament continued to represent M/s CTL by exercising his influence as Member of Parliament and after allocation P.K. Agarwalla and his family members got the coal block illegally transferred in the name of M/s CML. It was also submitted that even before the grant of mine opening permission, M/s CTL started illegally extracting coal from the said coal block so allotted to it and subsequently M/s CML also started extracting coal illegally much before the time the mining lease came to be transferred in its name. It was also submitted that from the various communications made by M/s CTL prior to allocation and as also duly stand supported by the subsequent communications made by the lessee company, it is clear that the company M/s CTL never intended to establish any end use project for captive use of coal and the only intention in procuring allotment of coal block was to sell the coal. The intention of the accused persons was thus stated to be malafide since beginning.
20. All the accused persons were thus stated to have conspired to procure allocation of a coal block in favour of M/s CTL and thereafter to
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 30 of 389 transfer it in the name of M/s CML. The allocation was thus obtained without the Screening Committee even specifying the end use in which the coal to be extracted would be used.
21. It was thus submitted that all the charges as were framed against the accused persons stand cogently proved. Prosecution was thus stated to have been successful in proving its case against all the accused persons. They were thus prayed to be convicted.
22. In support of his arguments, Ld. Sr. P.P. Sh. A.P. Singh placed reliance on the following case law:
S. Title Citation No. 1 Choudhury Parveen Sultana Vs. State of West CA 8 of 2009 @ SLP Bengal and Another (Crl.) No. 2864 of 2007 2 Inspector of Police and Another Vs. Battenapatla (2015) 13 SCC 87 Venkata Ratnam And Another 3 Bhagwan Prasad Srivastava V. N.P. Misra 1970 AIR 1661 4 Malhu Yadav & Ors. V. State of Bihar (2002) 5 SCC 724 5 Sukh Ram Vs. State of Himachal Pradesh Criminal Appeal No. 224 of 2012 decided on 25.07.2016 6 Sukhdev Singh Vs. State of Haryana (2013) 2 SCC 212 7 Guman Singh & Ors. Vs. State of Rajasthan & 1971 (2) SCC 452 Ors. 8 Rajiv Kumar V. State of U.P. & Anr. 2017 Cri. L. J. 4734 9 Haraprasad Ghosh V State of West Bengal & 2018 Cri. L. J. 3815 Anr.
D (ii) Arguments on behalf of company A-1 M/s CTL
23. As regard company A-1 M/s CTL it was submitted by Ld. Counsel
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 31 of 389 Sh. Ajay Gaggar that Brahmadiha coal mine was an abandoned coal mine since 1916 having been last operated by “Raniganj Coal associates” and who after having extracted the coal surrendered the lease way back in 1916 to the State Govt. In these circumstances the said abandoned coal mining area was not nationalized by Govt of India under Coal Mine Nationalization Act, 1973 [(CMN) Act, 1973]. It was thus submitted that Brahmadiha coal mine was not governed by CMN Act, 1973 and the only statute under which its allocation could have been made was Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act,1957). Accordingly, as per the procedure provided under MMDR Act, 1957, an application for grant of mining lease was submitted by the company to Govt of Bihar and accordingly as per the provisions of the Act, Govt of Bihar recommended the case of M/s CTL to the Central Govt for prior approval. It was also submitted that with the availability of new technology, the remaining coal reserves which could not be extracted earlier in the year 1916, were proposed to be extracted. It was submitted that the company M/s CTL accordingly submitted a mining plan to the Central Govt and it was only after the company was directed by MOC to submit an application to MOC seeking prior identification of the coal mine in favour of company by MOC, Govt of India, that a fresh application was submitted on 09.05.1998 to MOC. It was also submitted that A-1 company M/s CTL carried out a brief survey of the said mine and while relying upon the old mine plans prima facie concluded that the area was having an estimated coal reserve of 2.215 million tonnes. It was also submitted that in the application submitted to Govt of Bihar itself, it was stated that the coal obtained from the mine shall be used in the washery
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 32 of 389 to be installed by A-1 and the middlings from the same shall be used for generation of power.
24. It was also submitted that State Govt of Bihar had recommended the application of company M/s CTL to Central Govt. only after it found the application to be complete in all respects and the State Govt. was satisfied with the merits of the proposal and to be also in conformity with the procedure as provided under the Mineral Concession Rules, 1960. It was also submitted that even screening committee, MOC decided to allot the said abandoned mine with very meager coal reserves to M/s CTL, for otherwise the coal reserves would have been lost forever or would have been subjected to illegal mining. It was also submitted that CIL in its subsequent communication to MOC clarified that there was no danger to the adjoining property of CIL and that the coal reserve can be extracted by open cast method. It was also submitted that even otherwise the allotment was subject to approval of mining plans by DGMS and other restrictions placed by Screening committee. The company M/s CTL was thus stated to have not misrepresented in any manner either to State Govt of Bihar or to Central Govt. while seeking allotment of abandoned coal mine and thus no offence whatsoever was made out much less the offence of cheating or of hatching of any criminal conspiracy with other co-accused persons. A-1 M/s CTL was thus prayed to be acquitted.
25. In support of his arguments Ld. Defence Counsel placed reliance upon the following case law:-
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 33 of 389 S.No. Case title Citation 1 Manohar Lal Sharma Vs. The Principal (2014) 9 SCC 516 Secretary & ors.
D (iii) Arguments on behalf of A-2 Mahender Kumar Aggarwal
26. As regard A-2 Mahender Kumar Aggarwal, it was submitted by Ld. Counsel Sh. P.K. Dubey that admittedly no misrepresentation of any nature was made either by M/s CTL or by A-2 M.K. Agarwalla who was director of M/s CTL. It was submitted that as Brahmadiha coal mine was not included in the list of nationalized coal mines under CMN Act, 1973 so consequently it was also not included in the identified list of captive coal blocks. Accordingly, M/s CTL had submitted an application to State Govt. of Bihar under MMDR Act,1957 only seeking mining lease of Brahmadiha coal block which was an abandoned coal mine. It was thus submitted that A-2 M.K. Agarwalla followed the due procedure as was provided under MMDR Act, 1957. It was further submitted that whatever initial objections were raised by CIL or CMPDIL to MOC, the same were rejected by A-6 N.N. Gautam and subsequently both CIL and CMPDIL also stated that there was neither any danger to the adjoining property of CCL nor CIL had any plans in the near future to mine the coal block. It was further submitted that Screening Committee on its own chose to consider the application of M/s CTL despite being aware that the said coal block was not nationalized and consequently was also not there in the identified list of coal blocks. It was also submitted that subsequently M/s CTL was though recommended for allocation of Brahmadiha coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 34 of 389 block but the same was subject to certain conditions as were stipulated by Screening committee including relaxation of guidelines by MOC. It was also submitted that subsequent transfer of coal block in favour of M/s CML or the subsequent transfer of mining lease from M/s CTL to M/s CML was duly agreed to by Central Govt and was in pursuant to orders of Hon'ble High Court of Calcutta.
27. It was thus submitted that in the aforesaid facts and circumstances, no offence was at all made out against A-2 M.K. Agarwalla as he did not misrepresent any fact either to Govt of Bihar or to Central Govt.
A-2 M.K. Agarwalla was thus prayed to be acquitted.
D (iv) Arguments on behalf of company A-3 M/s CML
28. As regard A-3 M/s CML, it was submitted by Ld. Counsel Sh. Siddharth Aggarwal that in the entire coal block allocation process M/s CML had no role to play. It was submitted that admittedly the initial application for grant of mining lease was submitted to Collector Distt. Giridih, Bihar by A-1 M/s CTL on 16/18.04.96 under the signatures of A-2 M.K. Agarwalla. Subsequently on 09.05.98 A-2 M.K. Agarwalla submitted a letter to Chairman Screening Committee MOC under his own signatures for considering the proposal of M/s CTL in relation to Brahmdiha project. It was thus submitted that in the entire process till that time or even subsequent thereto till the stage of allocation of coal block in favour of M/s CTL by MOC, M/s CML had no role to play. It was also submitted that even after allocation of coal block the application for grant of mining lease was submitted to State Govt. by A-2 M.K.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 35 of 389 Agarwalla on behalf of M/s CTL and the mining lease was also signed with Govt of Jharkhand on behalf of M/s CTL by A-2 M.K. Aggatwala in 2002. It was thus submitted that even till that stage also M/s CML had no role to play. It was also submitted by Ld. Counsel Sh. Sidharth Aggarwal that as per the prosecution case itself whatever communications or actions were undertaken by Sh. P.K. Agarwalla with MOC, were on behalf of M/s CTL and not on behalf of M/s CML. It was thus submitted that as per the prosecution case itself the alleged conspiracy to procure allocation of a coal block in favour of M/s CTL had come to an end with the allocation of the said coal block by MOC and thus any act subsequent to the said period, if at all committed by any of the accused persons cannot form part of the said conspiracy.
29. As regard the incorporation of M/s CML it was submitted by Ld. Counsel that initially a company with the name International Alliance Pvt. Ltd. (IAPL) was incorporated on 24.06.96 and the name of the company was subsequently changed to International Alliance Ltd. On 05.04.2000 and thereafter the name of the company was changed to Castron Mining Ltd. On 08.06.2000. It was thus submitted that even the company M/s IAPL was not in existence on the date when the initial application for grant of mining lease was submitted by M/s CTL to Collector Distt. Giridih, Bihar. It was also submitted that on 26.05.99 a memorandum of family arrangement was entered into between late Sh. P.K. Agarwalla, B.K. Agarwalla, Sh. M.K. Agarwalla and Sh. Y.K. Agarwalla so as to ensure complete separation of various industrial establishments amongst the four brothers and also for efficient management of various companies
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 36 of 389 held by the parties. In the said family arrangement, it was decided that in the event of grant of mining lease of a coal block in favour of M/s CTL, A- 2 M.K. Agarwalla and his family shall assign and transfer their rights, title and interest in M/s CTL with respect to the said coal block in favour of Sh.P.K. Agarwalla and his nominees. It was thus submitted that the name of either M/s IAPL or M/s CML was not even mentioned in the said family arrangement. It was also submitted that had there been any criminal conspiracy involving M/s CML then A-2 M.K. Agarwalla or P.K. Agarwalla in the light of family settlement already arrived at would have made any further representation to MOC in the name of M/s CML only.
30. It was also submitted by Ld. Counsel that in March 2002, M/s CTL and M/s CML filed a scheme of arrangement in accordance with the family settlement arrived at between the four brothers before Hon'ble High Court of Calcutta and notice in the said petition was issued to Central Government also but the Government also did not raise any objection to the approval of said scheme of arrangement. Thus, in pursuant to orders of Hon'ble High Court of Calcutta dated 13.05.2003 with the appointed date as 31.10.2001 all the proceedings and/or suits and/or appeals pending by or against M/s CTL relating to the mining division including Brahmdiha open cast coal project were to be continued by or against M/s CML. It was further submitted that despite passing of aforesaid order by Hon'ble High Court of Calcutta, accused M.K. Agarwalla and his family members continued to be in control of M/s CML and it was only in the year 2005 that control of M/s CML was transferred to the family members of late Sh. P.K. Agarwalla. It was thus
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 37 of 389 submitted that the said transfer was effected in accordance with the family arrangement earlier referred to and there was no sale of the shares of the company. It was also pointed out that subsequently M.K. Agarwalla also initiated various court proceedings against M/s CML and its new management but Govt of Jharkhand after obtaining prior permission from Govt of India transferred the mining lease earlier executed in favour of M/s CTL in favour of M/s CML.
31. It was thus submitted by Ld. Counsel Sh. Siddharth Aggarwal that in the aforesaid facts and circumstances the prosecution of M/s CML which is a body corporate is clearly contrary to the settled position of law on corporate liability in as much as for any wrong act committed by any agent, the company itself cannot be held liable. It was also submitted that if any wrong act was committed by M/s CTL then also the said corporate liability cannot be transferred upon M/s CML by any implication. It was also submitted that even otherwise the very cognizance of the offence u/s 379 IPC taken by this Court was bad in law, as it was much beyond the statutory period of limitation and no application seeking condonation of delay was ever moved by the prosecution and consequently no order was passed by the Court to condone the delay.
Company M/s CML was thus prayed to be acquitted as no offence whatsoever was made out against it.
32. In support of his submissions Ld. Counsel Sh. Sidharth Aggarwal placed reliance upon the following case law:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 38 of 389 S.No. Case title Citation 1 State of Punjab Vs. Sarwan Singh (1981) 3 SCC 34 2 K. Hanumantha Rao Vs. K. Narasimha Rao & 1982 CriLJ 734 Ors. 3 Chandi Kumar Das Karmarkar and Another Vs. AIR 1965 SC 585 Abanidhar Roy 4 The Superintendent of Stamps, Bombay Vs. ILR 1951 Bom 226 Maharashtra Sugar Mills Ltd. 5 Gurucharan Singh Vs. The State AIR 1965 All 543 6 Dr. Puchalapalli Ramachandrareddi Vs. AIR 1960 AP 569 7 State (NCT of Delhi) Vs/ Sanjay (2014) 9 SCC 772 8 Birla Corporation Limited Vs. Adventz Criminal No. 875 Investments and Holdings Limited & Others of 2019 [Arising out of SLP (Crl.) No. 9053 of 2016
D (v) Arguments on behalf of A-4 Dilip Ray
33. As regard A-4 Dilip Ray it was argued by Ld. Sr. Advocate Dr. Abhishek Manu Singhvi that from the records of the prosecution case itself, it is clear that accused Dilip Ray who was Minister of State for Coal, had no role to play in the decision of Screening Committee which primarily decided to allocate Brahmadiha Coal block in favour of M/s CTL. It was submitted that the only allegation against A-4 Dilip Ray is that upon receipt of a representation from M//s CTL he merely referred the same to Ministry of Coal asking it to re-examine the matter in the light of the representation so received. It was also submitted that as per the prosecution case itself A-4 Dilip Ray was not in Delhi during the period 16.04.99 till 12.05.99 and thus he never met the representatives of the company and also did not discuss the matter with the officers of MOC. It was only after joining the office on 12.05.99 and after examining
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 39 of 389 the case on merits and the representation so received he directed the case to be re-examined. It was thus submitted that the said mere direction of re-examination given by A-4 Dilip Ray cannot be construed as his participation in any criminal conspiracy hatched for obtaining allocation of a coal block from MOC in favour of M/s CTL. It was also submitted that from the acts imputed to A-4 Dilip Ray no dishonest intention on his part can be inferred much less to draw any conclusion as regard the offence of criminal misconduct. It was also submitted that even from the various communications which MOC had with CIL and CMPDIL, it was clear that the concerns expressed by them regarding allocation of Brahmadiha coal block were not well-founded. The only issue which was left to be considered was that the said coal block was not in the approved list of captive coal blocks. It was in this regard only that note dated 16.04.99 was recorded in the files.
34. It was also submitted by Ld. Sr. Advocate that as is evident from the records of the case, the decision to allocate the said abandoned mine having little reserves was primarily taken in the national interest of conservation of coal, for otherwise the reserves would have been lost forever or would have been subjected to illegal mining. It was further submitted that when after the matter was considered by the screening committee headed by A-5 P.K. Banerjee with A-6 N.N. Gautam as Member Convenor, the file was marked to him then Secretary Coal Sh. S.S. Boprai did not record any observation of his and merely forwarded the file. It was thus submitted that in order to save the little reserves available in the abandoned coal mine the relaxation of guidelines as was
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 40 of 389 already proposed and approved by MOC officers was also approved by A-4 Dilip Ray and thus from his mere act of approving relaxation of guidelines, no criminality can be attributed to him.
35. As regard the allegation that the Brahmadiha coal block was never put in public domain inviting applications from general public, it was submitted that at the relevant time there was no requirement of public notification for the availability of any captive coal mine u/s 11 MMDR Act, 1957 and the mines were allotted on first come, first serve basis.
It was thus submitted by Ld. Sr. Advocate Dr. Abhishek Manu Singhvi that prosecution has failed to bring on record any evidence which could suggest any meeting of mind between A-4 Dilip Ray and other co- accused persons or hatching of any criminal conspiracy in between them.
36. As regard the offence u/s 409 IPC or u/s 13 (1) (c) P.C. Act, 1988, it was submitted that as A-4 Dalip Ray was not exercising any dominion over the coal block in question, so the charge of criminal breach of trust or that of Section 13 (1) (c) P.C. Act, 1988, can not hold ground against him. A-4 Dilip Ray was thus prayed to be acquitted.
37. In support of his submissions Ld. Counsel placed reliance upon the following case law:
S.No. Case title Citation 1 S.K. Kale Vs. State of Maharashtra (1997) 2 SCC 394 2 S.P. Bhatnagar Vs. State of Maharasthra (1979) 1 SCC 535
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 41 of 389 3 Subramanian Swamy Vs. A. Raja (2012) 9 SCC 257 4 Arun Kumar Agrawal Vs. Union of India (2014) 2 SCC 609 5 Common Cause Vs. Union of India (1999) 6 SCC 667 6 R. Sai Bharathi Vs. J. Jayalalitha (2004) 2 SCC 9 7 Pathan Mohammed Suleman Rahmatkhan Vs. (2014) 4 SCC 156 State of Gujarat 8 Arun Kumar Agrawal Vs. Union of India (2013) 7 SCC 1 9 Narendra Kumar Maheshwari Vs. Union of (1990) Supp SCC India & Ors. 440 10 Centre for Public Interest Litigation Vs. Union (2016) 6 SCC 408 of India 11 R. Balakrishna Pillai Vs. State of Kerala (1996) 1 SCC 478 12 Madan Lal Vs. State of Punjab (1967) 3 SCR 439 13 Siddharam Satlingappa Mhetre Vs. State of (2011) 1 SCC 694 Maharashtra & Ors. 14 Kapur Chand Pokhraj Vs. State of Bombay (1959) SCR 250 15 Union of India Vs. Sukumar Pyne (1966) 2 SCR 34 16 K.S. Paripoornan Vs. State of Kerala & Ors. (1994) 5 SCC 593 17 Bira Kishore Naik Vs. Coal India Limited (1986) 3 SCC 338 18 Basheer alias N.P. Basheer Vs. State of Kerela (2004) 3 SCC 609 19 Rajib Ranjan & Others Vs. R. Vijaykumar (2015) 1 SCC 513
D (vi) Arguments on behalf of A-5, Pradip Kumar Banerjee
38. As regard A-5 P.K. Banerjee, it was submitted by Ld. Counsel Sh. K.K. Patra that as the application of M/s CTL, submitted to State Government of Bihar was found complete in all respects, be it qua the issue of end use project or the area of coal mine, eligibility of the applicant company or compliance with other statutory requirements, so for the said reason only the State Government had written to Central Government seeking prior approval before grant of mining lease in favour
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 42 of 389 of applicant company M/s CTL. It was also submitted that even in MOC, the application dt. 09.05.98 submitted subsequently by M/s CTL was processed by the concerned officials/officers. The file however came to be put up before A-5 P.K. Banerjee only after a note dated 28.08.1998 of A-6 Nitya Nand Gautam, Adviser (Projects) was recorded in it and even thereafter A-5 P.K. Banerjee merely stated that though he agrees with the proposal but directed that the matter be decided one way or the other within a time limit of three months. It was also pointed out that A-5 P.K. Banerjee had even opposed the consideration of applications of 17 private companies including that of A-1 M/s CTL vide his note dated 16.03.1999 as the said applications were received after 11.02.1997. It was also pointed out that A-5 P.K. Banerjee even also suggested that Coal India Ltd. (CIL) may be asked to provide coal linkage to M/s CTL and 16 other companies whose requirement of coal was small but the said view was over-ruled by Secretary, Coal on 07.05.1999 and the Minister of State for Coal also agreed with the said view of Secretary, Coal vide his note dated 12.05.1999. It was further pointed out that in the mean time the applicant company M/s CTL had approached Secretary, MOC vide letter dated 12.04.1999 and vide endorsement dated 13.04.1999 made on the letter itself Secretary Coal directed Advisor (Projects) that the matter be examined and be put up before him. It was also pointed out that Secretary, Coal instead of marking the file to Additional Secretary as ought to be in the routine course of discharge of business in the Ministry, marked the letter directly to Adviser (Projects) ignoring Additional Secretary. It was further submitted that Advisor (Projects) thereafter prepared a detailed note dated 16.04.1999 and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 43 of 389 placed the file before A-5 P.K. Banerjee, Additional Secretary, Coal and as the file was to be put up before Secretary, Coal as per his directions contained in note dated 13.04.1999 so A-5 P.K. Banerjee without furnishing any of his comments submitted the file to Secretary Coal on 22.04.1999 and who further forwarded the file to Minister of Coal on 23.04.1999. It was further submitted that thereafter Minister of Coal i.e. A-4 Dilip Ray vide his noting dated 12.05.1999 directed that in the light of representation received from M/s CTL, the case may be re-examined.
39. It was further submitted by Ld. Counsel that as per the directions of Minister of State for Coal, the proposal was re-examined and accordingly Advisor (Projects) had put up a note dated 20.05.1999 before A-5 P.K. Banerjee stating that the proposal can be considered in the next meeting of the Screening Committee and A-5 P.K. Banerjee as Additional Secretary and Chairman Screening Committee agreed to the said proposal, since the Screening Committee was the only authorised body as per the policy of Government to recommend allocation of a coal mine to any applicant company. It was also submitted that A-5 P.K. Banerjee being Additional Secretary, Coal and Chairman 14th Screening Committee was alone not competent to decide allocation of any coal block as the same was the sole prerogative of the Screening Committee as a joint body.
40. It was further submitted that after discussion the Screening Committee unanimously decided to allot “Brahmadiha” Coal Block to M/s CTL subject to relaxation of guidelines and obtaining of necessary permission from concerned authorities beside complying with other
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 44 of 389 provisions of law. It was also submitted that subsequently the proposal of Screening Committee was forwarded to Minister of State for Coal for approval and who finally approved the relaxation of guidelines on 23/08/1999.
41. It was further submitted that minutes of 14th Screening Committee were thereafter sent to all participants and the said minutes subsequently also came to be approved in the 15th Screening Committee meeting. It was thus submitted by Ld. Counsel Sh. K.K. Patra that A-5 P.K. Banerjee merely dealt with the policy issues and maintained detachment from individual cases like that of M/s CTL. It was also submitted that A-5 P.K. Banerjee was well aware of his mutually exclusive roles, both in the MOC and in the Screening Committee. It was also submitted that had A-5 P.K. Banerjee being in conspiracy with the applicant company then no restrictions would have been imposed upon the allottee company by the Screening Committee. It was also submitted that primary intention behind the impugned allocation was to ensure that whatever little coal reserves were available in the abandoned mine are duly extracted, for otherwise the same would have been lost forever.
42. As regard the amount of coal reserves available in the said abandoned mine, it was submitted that as per the study of CIL and CMPDIL, coal reserve of 0.5 MT was available in the said coal block. It was also submitted that the file seeking relaxation of guidelines was routed through Secretary Coal but for reasons best known to the prosecution, Secretary Coal has not been prosecuted in the present case. A-5 P.K. Banerjee was thus stated to have not violated any rules,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 45 of 389 regulations or provisions of law while dealing with the matter in question. Prosecution was thus stated to have miserably failed in proving its case against the accused.
A-5 P.K. Banerjee was thus prayed to be acquitted.
43. In support of his submissions Ld. Counsel Sh. K.K. Patra placed reliance upon the following case law:
S.No. Case title Citation 1 N.K. Ganguly Vs. CBI, New Delhi (2016) 2 SCC 143 2 Surinderjit Singh Mand and Another Vs. State (2016) 8 SCC 722 of Punjab & Anr. 3 R. Balakrishna Pillai Vs. State of Kerala & (1996) 1 SCC 478 Anr. 4 Major S.K. Kale Vs. State of Maharashtra (1977) 2 SCC 394 5 S. P. Bhatnagar Vs. State of Maharashtra (1979) 1 SCC 535 6 Saju Vs. State of Kerala (2001) 1 SCC 378 7 State of Mahdya Pradesh Vs. Sheetla Sahai (2009) 8 SCC 617 and Others 8 Sri Rabindra Kumar Dey Vs. State of Orissa (1976) 4 SCC 233 9 P.K. Narayanan Vs. State of Kerala (1995) 1 SCC 142
D (vii) Arguments on behalf of A-6 Nitya Nand Gautam
44. As regard A-6 Nitya Nand Gautam it was submitted by Ld. Counsel Sh. Avijit Mani Tripathi that initially A-1 M/s CTL submitted its application dated 18.04.1996 to State of Bihar seeking grant of mining lease to mine “Brahmadiha” Coal Block which was an abandoned coal mine, since 1916. Subsequently, the company M/s CTL on 24.04.1997 submitted
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 46 of 389 mining plan for approval to MOC as per the provisions of MMDR Act,1957. However the mining plan was returned by MOC on 15.04.1998 on the ground that the said block has not been allotted to A-1 M/s CTL by the MOC. It was thereafter that M/s CTL submitted an application dated 09.05.1998 to Chairman Screening Committee seeking allotment of “Brahmadiha” abandoned coal mine. It was however submitted that while comments from M/s CIL were still awaited in the matter, A-6 Nitya Nand Gautam being Adviser (Projects) discussed the merits of the application in the file vide his note dated 28.08.1998 and stated that coal washery can not be taken as an end use project as claimed by the company and the said note was duly approved by Additional Secretary, MOC.
45. It was further submitted that in the meantime MOC received comments from CIL wherein they raised issues regarding safety of mines of CCL arising out of proposed operation of “Brahmadiha” Coal Mine. However at the same time, CIL though stated that they were not having any mine plan of the area but it also quantified the likely reserves available without proper examination of the facts. It was in these circumstances, that A-6 Nitya Nand Gautam wrote back to CIL stating his observations and disagreement with respect to the comments received from CIL. Subsequent thereto Director Technical, CIL vide his letter dated 16.03.1999 categorically stated that “Brahmadiha” coal mine shall not be a source of danger to neighbouring CCL mines and it was also stated that CCL does not have any proposal to work in “Brahmadiha” patch in the near future as the area is free hold area. It was further submitted that subsequently on 12.04.1999, A-1 M/s CTL submitted a letter to
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 47 of 389 Secretary, MOC seeking allocation of “Brahmadiha” Coal Block and Secretary Coal vide his endorsement dated 13.04.1999 marked the said letter to A-6 Nitya Nand Gautam, Adviser (Projects) to examine and put up the same. In response thereto A-6 Nitya Nand Gautam accordingly gave his comments on 16.04.1999 expressing his objections that it may not be possible to allot the said abandoned mine to M/s CTL. However subsequently a representation dated 21.04.1999 was purportedly received in the office of Minister of State for Coal on 12.05.1999 and wherein a direction was given by Minister of State for Coal to re-examine the application of M/s CTL in the light of facts stated in the representation. The said representation through proper channel came to be marked to A-6 Nitya Nand Gautam on 14.05.1999. It was further submitted that in the meantime on 12.05.1999, MOS, Coal had also permitted consideration of applications received after 11.02.1997 for allotment of mines for captive use even though A-6 Nitya Nand Gautam had objected to the lifting of said embargo. It was further submitted that upon receipt of directions from his senior officers regarding the representation of M/s CTL submitted to MOS, Coal, he again re- examined the matter and found that in the new representation so submitted by M/s CTL the company had scaled down the proposed investment to a realistic level and has provided better details of the coal to be extracted and that application was also accompanied by a mining plan prepared by a former Director of CMPDIL giving details of available coal reserves in the mine.
46. Accordingly after recording the aforesaid facts, A-6 Nitya Nand
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 48 of 389 Gautam vide his note dated 20.05.1999 stated that though the application of M/s CTL was not adhering to the guidelines issued by the Screening Committee but also mentioned the reasons as to under what circumstances the application can be considered by the Screening Committee. The file thereafter pursuant to the orders of A-5 P.K. Banerjee who was Additional Secretary, MOC as well as Chairman Screening Committee came to be put up before the 14th Screening Committee which was comprising of nine members representing different entities. It was further submitted that the Screening Committee having regard to the fact that “Brahmadiha” coal mine was an abandoned mine for the past about 80 years and that nobody was coming forward to exploit the left over reserves so with a view to conserve the same from being lost forever for variety of reasons including illegal mining, decided to recommend allocation of the said coal mine in favour of M/s CTL. However the allotment was made subject to certain conditions including that of relaxation of guidelines as were issued by MOC. Subsequently the guidelines issued by MOC came to be relaxed by Minister of State for Coal i.e. A-4 Dilip Ray. It was thus submitted by Ld. Counsel that in all his notings A-6 Nitya Nand Gautam who was merely an Advisor (Projects) has reproduced the facts which were either mentioned by the company M/s CTL in its various communications or were submitted by CMPDIL or CIL in their comments. It was further submitted that at no point of time any wrong fact was stated by A-6 Nitya Nand Gautam. It was also submitted that neither as Advisor (Projects) nor as Member Convenor, Screening Committee, he was competent to take any decision for allocation of any coal block in favour of M/s CTL.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 49 of 389 47. Ld. Counsel Sh. Avijit Mani Tripathi also submitted that coal mine in question was in fact not a coal block as is commonly understood but only some coal which was left out in the said abandoned mine on account of safety considerations in the year 1916 and the said remaining coal was now proposed to be extracted by adopting new open casting mining technology which was earlier not available in the year 1916.
48. As regard the observations of Screening Committee qua M/s OCL that the coal requirement of the said company was less than the stipulated guidelines issued by MOC it was submitted that the company M/s OCL wanted to exploit ".15 MTPA" of coal from a huge coal block having reserves of 300 million tonnes and above and accordingly objection was raised in the Screening Committee qua the case of M/s OCL as allotment of said coal block to M/s OCL would have blocked the entire coal block for a period of more than 300 years. It was thus submitted that from the evidence led by the prosecution, it was clear that A-6 Nitya Nand Gautam was completely fair, objective and transparent in dealing with the matter of M/s CTL and that there is no evidence on record which could suggest that he was in any conspiracy with the other accused persons. A-6 Nitya Nand Gautam was thus prayed to be acquitted.
49. In support of his submissions, Ld. Counsel placed reliance upon the following case law:
S.No. Case title Citation 1 Shreekantiah Ramayya Munipalli Vs. State (1995) 1 SCR 1177 of Bombay
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 50 of 389 2 Amrik Singh v. State of Pepsu AIR 1955 SC 309
3 Rajib Ranjan v. R. Vijaykumar, (2015) 1 SCC 513
4 Devinder Singh & Others v. State of Punjab (2016) 2 SCC 87 through CBI
(E) Prelude to my discussion of the prosecution case.
50. Before I advert on to discuss the case of prosecution in the light of evidence led on record and the detailed arguments addressed on behalf of prosecution and the accused persons, it will be worthwhile to mention that like other coal block allocation matters pending before this Court, the present case is also primarily based on circumstantial evidence. All such circumstances are sought to be proved by the prosecution mainly from the documents and file notings available in the files of MOC, CIL, CMPDIL, CCL and that of Government of Bihar. The documents recovered in the search operation carried out in the offices of M/s CTL and M/s CML or at the residences of their directors have also been referred to beside also the documents of other Government departments.
51. Thus in order to appreciate the conduct of accused public servants or that of the private parties involved, various such documents and file notings will be extensively referred to in my discussion herein-after. In fact in order to appreciate various circumstances the said documents and file notings will have to be repeatedly referred to at a number of places.
52. In the aforesaid background, it will be thus appropriate to first refer to the often quoted observations of Hon'ble Supreme Court regarding
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 51 of 389 cases based on circumstantial evidence. Hon'ble Supreme Court in the case Sharad Birdhichand Sarda Vs. State of Maharashtra, AIR 1984 SC 1622 in para 152, 153 and 154 observed as under:
"152. Before discussing the cases relied upon by the High Court we would like to cite a few decisions on the nature, character and essential proof required in a criminal case which rests on circumstantial evidence alone. The most fundamental and basic decision of this Court is Hanumant V. State of Madhya Pradesh [1952] SCR 1091. This case has been uniformly followed and applied by this Court in a large number of later decisions up-to-date, for instance, the cases of Tufail (Alias) Simmi v. State of Uttar Pradesh [1969] 3, SCC 198 and Ramgopal v. State of Maharashtra AIR, 1972 SC 656. It may be useful to extract what Mahajan, J. has laid down in Hanumant case : It is well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused. 153. A close analysis of this decision would show that the following conditions must be fulfilled before a case against an accused can be said to be fully established: (1) the circumstances from which the conclusion of guilt is to be drawn should be fully established. It may be noted here that this Court indicated that the circumstances concerned 'must or should' and not 'may be' established. There is not only a grammatical but a legal distinction between 'may be proved' and "must be or should be proved" as was held by this Court in Shivaji Sahabrao Bobade v. State of Maharashtra [1973] 2 SCC 793, where the following observations were made : [SCC para 19, p. 807 : SCC (Cri) p. 1047]
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 52 of 389 Certainly, it is primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions. (2) the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty, (3) the circumstances should be of a conclusive nature and tendancy, (4) they should exclude every possible hypothesis except the one to be proved, and (5) there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. 154. These five golden principles, if we may say so, constitute the panchsheel of the proof of a case based on circumstantial evidence."
53. Thus in the light of aforesaid well settled principles relating to appreciation of evidence in cases based on circumstantial evidence the facts and circumstances of the present case are required to be examined. It will be seen as to what all incriminating circumstances the prosecution has been successful in proving against the accused persons. Thereafter it will be seen whether all such incriminating circumstances which stands conclusively proved on record form such a chain of incriminating evidence which unerringly point towards the guilt of accused persons only or not. In other words, whether the said chain of incriminating circumstances rule out any conclusion which may be consistent with the innocence of the accused persons or not.
54. At this stage, I may also put a mark of caution that during the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 53 of 389 course of trial including at the time of addressing final arguments it has been stated by Ld. Counsels for the accused public servants that to frame a given policy is the sole discretion of the Government of the day and the Court cannot substitute its decision/discretion over the decision/discretion exercised by the concerned officers of MOC or by Minister of State (Coal) or even by the Screening Committee. Judicial review of the said decisions was thus stated to be beyond the purview of the present proceedings.
55. In this regard, I may state that Ld. Counsels for the accused persons are certainly right in stating that in the present proceedings this Court can not substitute its decision/discretion over that of officers of MOC or of Minister of State for Coal or even that of Screening Committee. Certainly, all such officers were vested with such discretion and power to take a decision by virtue of the position held by them. However, it will be worthwhile to mention that in the present proceedings this Court at no point of time is attempting to substitute the decision taken by any of the aforesaid officers and what is being examined is whether the decision taken or discretion which stood vested in the aforesaid authorities was exercised for any extraneous consideration or whether in exercise of the power so vested in them by law, they abused their position as a public servant. Thus in the present proceedings this Court is simply examining as to whether there was any malice or malafide intention in the exercise of discretion which stood vested in these authorities or in other words whether the decision to allot Brahmadiha coal block in favour of M/s CTL by the 14th Screening
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 54 of 389 Committee and consequent approval of said decision by Minister of State for Coal by relaxing the guidelines was actuated for some extraneous consideration or was taken on certain considerations which were not permissible under law or was in violation of law. The sum and substance of the aforesaid exercise being undertaken in the present proceedings is to examine whether there exists any element of culpability in the exercise of discretion by the accused public servants or the decision so taken by them in favour of M/s CTL amounts to commission of any offence for which charges have been framed against the accused public servants or not. Thus in these circumstances, it can not be argued that this Court in the present proceedings can not examine the process as well as the procedure undertaken by the accused public servants which finally led to allocation of Brahmadiha coal block in favour of M/s CTL. It is only after such an examination that it can be ascertained and concluded as to whether the said decision in favour of M/s CTL or exercise of discretion by the concerned authorities was actuated by any malice or malafides or that their actions were bridled with criminality or not. Thus at the cost of repetition, it is stated that while undertaking the aforesaid exercise the question of substituting the decision taken by any of the authorities involved in any manner whatsoever does not arise.
56. In this regard, it would be also apt to refer to the following passage of Justice Holmes in United States Vs. Wurzbach 1930 (280) US 396. "Whenever the law draws a line there will be cases very near each other on opposite sides. The precise course of the line may be uncertain, but no one can come near it without knowing that he does so, if he thinks, and if he does so it is familiar to the criminal law to make him take the risk."
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 55 of 389 57. In fact the judicial review of the actions of officers of MOC or that of the Screening Committee so constituted to make recommendations for allocation of various captive coal blocks in favour of different applicant companies, was undertaken by Hon'ble Supreme Court in the case Manohar Lal Sharma V. Union of India, (2014) 9 SCC 516. The said exercise of judicial review undertaken by Hon'ble Supreme Court finally resulted in cancellation of allocation of all coal blocks as were allotted pursuant to the recommendations of all the 36 Screening Committees of MOC in favour of different applicant companies. The work of all the 36 Screening Committees was closely scrutinized by Hon'ble Supreme Court in its order dated 25.08.2014 and while making detailed observations as regard their functioning, all the allocations so made were held to be illegal.
At this stage, it will be appropriate to briefly refer to the observations so made by Hon'ble Supreme Court as regard the functioning of various Screening Committees, in its order dated 25.08.2014 and especially with respect to 14th Screening committee:
Order dated 25.08.2014 in case Manoharlal Sharma Vs. U.O.I (Supra)
“150. From the above discussion, it is clear that 21 coal blocks stood allocated to private companies in pursuance of Screening Committee’s recommendations during the period from the 1st meeting held on 14.07.1993 till the 21st meeting held on 19.08.2003. For the period from 04.11.2003 (22nd meeting) to 18.10.2005 (30th meeting) in pursuance of Screening Committee’s recommendations, 26 coal blocks stood allocated to private companies. Following 32nd meeting held on 29.06.2006/30.06.2006 till the 34th meeting on 07.09.2006/08.09.2006, in pursuance of the recommendations made by the Screening Committee, two coking coal blocks
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 56 of 389 were allocated to private companies and twelve non-coking coal blocks were allocated to private companies. In pursuance of the recommendations made by the Screening Committee in 35th and 36th meetings, 33 coal blocks were allocated to private companies. Some of the coal block allocations made to the private companies have been de-allocated from time to time. For consideration of legality and validity of allocations made to such companies, it is not necessary to deal with de-allocation aspect. It needs no emphasis that assuming that the Central Government had power of allocation of coal blocks yet such power should have been exercised in a fair, transparent and non-arbitrary manner. However, the allocation of coal blocks to the private companies pursuant to the recommendations made by the Screening Committee in 36 meetings suffers from diverse infirmities and flaws which may be summarized as follows: 1 st Meeting to 21 st Meeting
1. The guidelines framed and applied by the Screening Committee for the period from 14.07.1993 (1st meeting) to 19.08.2003 (21st meeting) are conspicuously silent about inter se priority between the applicants for the same block. As a matter of fact, for the 21 coal blocks allocated to private companies in pursuance of Screening Committee’s recommendation during the first period, inter se priority or merit of the applicants for the same block had not at all been determined. 2. The guidelines do not contain any objective criterion for determining the merits of the applicants. The guidelines do not provide for measures to prevent any unfair distribution of coal in the hands of few private companies. As a matter of fact, no consistent or uniform norms were applied by the Screening Committee to ensure that there was no unfair distribution of coal in the hands of the applicants. 3. The Screening Committee simply relied upon the information supplied by the applicants without laying down any method to verify applicant’s experience in the end-use project for which allocation of coal block was sought. The guidelines also do not lay down any method to allot coal blocks as per the end-use projects coal requirement. 4. The Screening Committee kept on varying the guidelines from meeting to meeting. It failed to adhere to any transparent system. 5. No applications were invited through advertisement and thus the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 57 of 389 exercise of allocation denied level playing field, healthy competition and equitable treatment. 6. Certain coal blocks which did not fit into the criteria of captive blocks were decided to be allocated by applying peculiar approach that the reserves could either be permitted to be explored by a private party or lost forever. For example, Brahmadiha block was allocated to M/s. Castron Technology pursuant to the recommendations made by the Screening Committee in the 14 th meeting. 7. If a certain party requested for a particular block, it was so recommended without objectively considering the merit of such request. For example, in the 14th meeting, the proposal of M/s. Monnet Ispat Ltd. for a new Sponge Iron plant in Keonjhar area of Orissa of 1.2 million tonnes of capacity for which the requirement of 2.2 m.t. of raw coal has been indicated, was discussed. The party requested for Utkal-B2 block in Talcher coalfield having 106 m.t. of reserves. CMD, MCL was of the view that Chendipada block is likely to have better grade of coal and suggested to the party for preference of Utkal B-2 block. However, the party insisted for Utkal B-2 block and the same was allotted. Similarly, as regards the proposal of M/s. Jayaswal Neco Ltd. for their Sponge Iron Plant, the party had earlier requested for Gare-Palma IV/6 and IV/7 blocks for meeting their requirement of 1 m.t. Sponge Iron Plant and a captive power plant. Then they requested for allocation of Gare-Palma IV/4 and IV/8 blocks. On the representation made by the representative of the party that 125 m.t. of reserves in Gare- Palma IV/4 block will be adequate for meeting the requirement of their Sponge Iron Plant for a period of 30 years and 91 m.t. of reserves in Gare-Palma IV/8 block will be adequate for 30 years life of the proposed CPP, the Screening Committee recommended allocation of Gare-Palma IV/4 and IV/8 blocks to M/s. Jayaswal Neco Ltd. The representation made by the party was accepted as it is without any verification. 8. Certain blocks with coal reserves on the higher side were recommended to the companies with lower requirement. There were no steps or measures taken to prevent possible misuse of end-use project of private companies. For example, M/s. Prakash Industries Limited, being a BIFR company, was denied coal block earlier. However, the Screening Committee recommended Chotia I and II coal blocks to M/s. Prakash Industries Limited in 2003 for its proposed expansion project of 0.4 MTPA Sponge Iron though the company was having capacity of only 0.3 MTPA. 9. Some coal blocks which were already identified for development
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 58 of 389 by CIL were offered to the private companies and some of the blocks which were close to the projects of CIL were, in fact, recommended for allocation and ultimately allocated. This was clearly in breach of the guidelines for selection of captive blocks...... 22 nd Meeting to 30 th Meeting 10...... 11...... 12...... 13...... 14...... 15...... 16...... 17...... 18...... 32 nd Meeting to 36 th Meeting 19...... 20...... 21...... 22. The minutes of the 36th meeting do not contain the particulars showing consideration of each application for allocation of 23 coal blocks earmarked for non-power sector. There is nothing in the minutes to indicate how and in what manner the selected companies meet the norms fixed for inter se priority. Many of the selected companies were neither recommended by the State Government nor by the Administrative Ministry. Some of them were recommended by the State Government but not recommended by the Administrative Ministry while one of them was not recommended by the State Government but recommended by the Administrative Ministry. Many companies which had failed to secure allocations earlier yet they were recommended. The Screening Committee failed to consider capability and capacity
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 59 of 389 of the applicant in implementing the projects. 151. The entire exercise of allocation through Screening Committee route thus appears to suffer from the vice of arbitrariness and not following any objective criteria in determining as to who is to be selected or who is not to be selected. There is no evaluation of merit and no inter se comparison of the applicants. No chart of evaluation was prepared. The determination of the Screening Committee is apparently subjective as the minutes of the Screening Committee meetings do not show that selection was made after proper assessment. The project preparedness, track record etc., of the applicant company were not objectively kept in view.” (Emphasis supplied by me)
58. It was however argued by Ld. Counsels for the accused persons that the observations made by Hon'ble Supreme Court in the said order dated 25.08.2014 can not be referred to by this Court in the present proceedings as Hon'ble Supreme court in the said matter never dealt with the issue of criminality of the persons involved and had only discussed the circumstances in which various coal blocks came to be allotted to different applicant companies in contravention of the provisions of MMDR Act, 1957 and CMN Act, 1973.
In this regard, I may clarify at the threshold itself that no conclusion as regard the criminality in the acts of persons involved in the present case is intended to be drawn on the basis of the aforesaid observations of Hon'ble Supreme Court. However, by no stretch of arguments can it be stated that the observations made by Hon'ble Supreme Court in its order dated 25.08.2014 are not relevant to the facts in issue involved in the present case. Thus to the extent the said observations are found to be relevant within the four corners of the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 60 of 389 provisions of Indian Evidence Act,1872 the same can always be referred to and will be referred to. At the cost of repetition, I may however reiterate that in the present proceedings this Court shall be examining only as to whether the acts of all persons arrayed as accused in the present case were actuated with any malice or malafides or not and thereby reflecting criminality in their actions or not.
(F) Inter play between Mines & Minerals (Development and Regulation) Act 1957 (MMDR Act, 1957), Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973) and Coal Mines (Nationalisation) Act, (CMN Act, 1973).
59. One of the main arguments of the prosecution has been that the mining area from out of Giridih coalfield whose allocation was being sought by M/s CTL, was not a nationalized coal mine under CMN Act, 1973 and consequently was also not an identified coal mine and thus could not have been allocated for captive mining by the Screening Committee. It has been submitted that since the said patch of mining area was admittedly never nationalised under CMN Act, 1973 so it could not have been even identified by CIL or any of its subsidiary companies or for that matter by any other authority for being alloted to any company in terms of Section 3 CMN Act, 1973. It has thus been submitted that the Screening Committee was not empowered to allot the said area to any private company for captive mining much less to M/s CTL. It has also been the contention of prosecution that since the allocation of said mining area was being sought by M/s CTL only for the purpose of establishing a washery without mentioning any specified end use where the washed coal was to be used, so for the said reason also 14th
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 61 of 389 Screening Committee could not have even considered the application of M/s CTL for allocation of the said coal block much less to allocate it in favour of M/s CTL.
60. The aforesaid contentions have been emphatically refuted by Ld. Counsels for the accused persons stating that not only washery was recognised as a valid end use under CMN Act, 1973 but even otherwise it was duly clarified by company M/s CTL to MOC that while the middlings obtained during washing of coal will be used in a power plant of 10 MW capacity to be established in two stages i.e. of 5 MW each, the washed coal was to be used by the company towards production of metallurgical coke and thereafter the same will be used in their foundry. It has been also submitted on behalf of the accused persons that since the area whose identification was being sought was admittedly an abandoned coal mine having been abandoned in the year 1916 and was a freehold area so it was not nationalised under CMN Act, 1973 and consequently it was not mentioned in the identified list of captive coal blocks as was prepared by CIL. It has been however submitted that M/s CTL sought identification of the said mining area under the provisions of Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957) from State Government of Bihar. However, when the mining plan of the company was subsequently sent to MOC for seeking approval then the company was advised to first apply to Screening Committee, MOC seeking identification of the said coal block. It was in the said circumstances, the company applied to Chairman, Screening Committee, MOC vide letter dated 9.5.98 seeking identification of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 62 of 389 105.153 hectares of abandoned coal mining area. It has also been submitted on behalf of accused public servants that all the applications received in MOC for seeking allocation of captive coal blocks were to be placed before the Screening Committee for consideration and thus Screening Committee which was constituted to identify and allocate coal blocks to various applicant companies for captive use was very well empowered to consider and take a decision on all such applications.
61. In the aforesaid factual matrix coupled with the nature of arguments put-forth by both the sides, it will be appropriate that before detailed facts and circumstances relating to processing of the request of M/s CTL for identification and allocation of said mining area of 105.153 hectares of coal mining area in district Giridih, Bihar in its favour are considered in a sequential manner, a brief glance is made over the scheme of Mines & Minerals (Development and Regulation) Act 1957 (MMDR Act, 1957), Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973) and Coal Mines (Nationalisation) Act, CMN Act, 1973 and also their inter-play.
62. The scheme of the aforesaid three Acts in the light of their respective statutory framework has been very elaborately dealt with by Hon'ble Supreme Court in its detailed order dated 25.08.2014 passed in the case Manohar Lal Sharma Vs. The Principal Secretary & Ors. (Supra), whereby allocation of various coal blocks allotted by MOC from the year 1993 to 2006 were held to be illegal by the Hon'ble Court. Thus for the sake of brevity, the relevant paragraphs of the said order are being reproduced over here:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 63 of 389 Order dated 25.08.2014 (Para No. 12-41):
“12. It is appropriate that we first notice the statutory framework relevant for the issues under consideration. The Mines and Minerals (Development and Regulation) Act, 1948 (for short, ‘1948 Act’) was enacted to provide for the regulation of mines and oil fields and for the development of the minerals under entry 36 of the Government of India Act, 1935. It received the assent of the Governor General on 08.09.1948 and came into effect from that date. 13. 1948 Act was repealed by the 1957 Act. The introduction of the 1957 Act reads: “In the Seventh Schedule of the Constitution in Union List entry 54 provides for regulation of mines and minerals development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest. On account of this provision it became imperative to have a separate legislation. In order to provide for the regulation of mines and the development of minerals, the Mines and Minerals (Regulation and Development) Bill was introduced in the Parliament.” 14. 1957 Act has undergone amendments from time to time. Section 2 of the 1957 Act reads: “Declaration as to the expediency of Union Control - it is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided.” 15. Sections 3(a), (c), (d), (e), (f), (g) and (h) define: “minerals”, “mining lease”, “mining operations”, “minor minerals”, “prescribed”, “prospecting licence”, and “prospecting operations”1, respectively. 16. Section 4 mandates that prospecting or mining operations shall be under licence or lease. Sub-section (2) provides that no reconnaissance permit, prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of the Act and the rules made thereunder.
1“3(a) "minerals” includes all minerals except mineral oils; (c) "mining lease” means a lease granted for the purpose of undertaking mining operations, and includes a sub-lease granted for such purpose; (d) “mining operations" means any operations undertaken for the purpose of winning any mineral; (e) "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral; (f)"prescribed" means prescribed by rules made under this Act; (g) "prospecting licence" means a licence granted for the purpose of undertaking prospecting operations; (h)"prospecting operations" means any operations undertaken for the purpose of exploring, locating or proving mineral deposit;”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 64 of 389 17. Section 5 is a restrictive provision. The provision mandates that in respect of any mineral specified in the First Schedule, no reconnaissance permit, prospecting licence or mining lease shall be granted except with the previous approval of the Central Government. Coal and Lignite are at item no.1 in Part A under the title “Hydro Carbons/Energy Minerals” in the First Schedule appended to the 1957 Act. 18. Section 6 provides for maximum area for which a prospecting licence or mining lease may be granted. Section 7 makes provisions for the periods for which prospecting licence may be granted or renewed and Section 8 provides for periods for which mining leases may be granted or renewed. Section 10 provides that application for reconnaissance permit, prospecting licence or mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government concerned, inter alia, it empowers the State Government concerned to grant or refuse to grant permit, licence or lease having regard to the provisions of the 1957 Act or the Mineral Concession Rules, 1960 (for short ‘1960 Rules’). 19. Section 11 provides for preferential right of certain persons. Sub- section (1) of Section 11 makes a provision that where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting licence or mining lease, as the case may be, in respect of that land over any other person. This is, however, subject to State Government’s satisfaction and certain conditions as provided therein. Sub-section (2) of Section 11 says that where the State Government does not notify in the Official Gazette the area for grant of reconnaissance permit or prospecting licence or mining lease and two or more persons have applied for a reconnaissance permit, prospecting licence or a mining lease in respect of any land in such area, the applicant whose application was received earlier, shall have a preferential right to be considered for such grant over the applicant whose application was received later. This is, however, subject to provisions of sub-section (1). The first proviso appended thereto enacts that where an area is available for grant of reconnaissance permit, prospecting licence or mining lease and the State Government has invited applications by notification in the Official Gazette for grant of such permit, licence or lease, the applications received during the period specified in such notification and the applications which had been received prior to the publication of such notification in respect of the lands within such area or had not been disposed of, shall be deemed to have been received on the same day for the purpose of assigning priority under
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 65 of 389 sub-section (2). The second proviso indicates that where such applications are received on the same day, the State Government, after taking into consideration the matter specified in sub-section (3), may grant the reconnaissance permit, prospecting licence or mining lease to one of the applicants as it may deem fit. Sub-section (3) elaborates the matter referred to in sub-section (2), namely, (a) any special knowledge of, experience in reconnaissance operations, prospecting operations or mining operations, possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; (d) the investment which the applicant proposes to make in the mines and in the industry based on the minerals; and (e) such other matters as may be prescribed. 20. Section 13 empowers the Central Government to make rules in respect of minerals. By virtue of the power conferred upon the Central Government under Section 13(2), the 1960 Rules have been framed for regulating the grant of, inter alia, mining leases in respect of minerals and for purposes connected therewith. 21. By virtue of Section 17, the Central Government has been given special powers to undertake prospecting or mining operations in certain lands. Section 17-A authorises the Central Government to reserve any area not already held under any prospecting licence or mining lease with a view to conserve any mineral and after consultation with the State Government by notification in the Official Gazette. 22. Section 18 indicates that it shall be the duty of the Central Government to take all such steps as will be necessary for the conservation and systematic development of minerals in India and for the protection of the environment by preventing or controlling any pollution which may be caused by prospecting or mining operations and for such purposes the Central Government may, by notification in the Official Gazette, make such rules as it thinks necessary. 23. Section 18A empowers the Central Government to authorise the Geological Survey of India to carry out necessary investigation for the purpose of information with regard to the availability of any mineral in or under any land in relation to which any prospecting licence or mining lease has been granted by a State Government or by any other person. The proviso that follows sub- section (1) of Section 18A provides that in cases of prospecting licences or mining leases granted by a State Government, no such authorisation shall be made except after consultation with the State Government. 24. Section 19 provides that any prospecting licences and mining leases granted, renewed or acquired in contravention of the 1957 Act or any rules or orders made thereunder shall be void and of no
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 66 of 389 effect. 25. The 1960 Rules were framed by the Central Government, as noted above, in exercise of the powers conferred by Section 13. 26. Chapter IV of 1960 Rules deals with grant of mining leases in respect of land in which the minerals vest in the Government. Sub- rule (1) of Rule 22 provides that an application for the grant of a mining lease in respect of land in which the minerals vest in the Government shall be made to the State Government in Form I through such officer or authority as the State Government may specify in this behalf. Sub-rule (3) provides for the documents to be annexed with the application and so also that such application must be accompanied by a non-refundable fee as prescribed therein. Sub- rule (4) of Rule 22 provides that on receipt of the application for the grant of mining lease, the State Government shall take decision to grant precise area and communicate such decision to the applicant. The applicant, on receipt of communication from the State Government of the precise areas to be granted, is required to submit a mining plan within a period of six months or such other period as may be allowed by the State Government to the Central Government for its approval. The applicant is required to submit the mining plan duly approved by the Central Government or by an officer duly authorized by the Central Government to the State Government to grant mining lease over that area. Sub-rule (5) of Rule 22 provides the details to be incorporated in the mining plan. 27. Rule 26 empowers the State Government to refuse to grant or renew mining lease over the whole or part of the area applied for. But that has to be done after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant. 28. Rule 31 provides for time within which lease is to be executed where an order has been made for grant of such lease on an application. Rule 34 provides for manner of exercise of preferential rights for mining lease. 29. Rule 35 provides that where two or more persons have applied for a reconnaissance permit or a prospecting licence or a mining lease in respect of the same land, the State Government shall, for the purpose of sub-section (2) of Section 11, consider besides the matters mentioned in clauses (a) to (d) of sub-section (3) of Section 11, the end use of the mineral by the applicant. 30. In short, the 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining prospecting licences or mining leases in respect of lands in which the minerals vest in the government, the rule-making power for regulating the grant of prospecting licences and mining leases,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 67 of 389 special powers of Central Government to undertake prospecting or mining operations in certain cases, and for development of minerals. 31. The Coal Mines (Taking Over of Management) Act, 15 of 1973, (for short, ‘Coal Mines Management Act’) was passed, “to provide for the taking over, in the public interest, of the management of coal mines, pending nationalisation of such mines, with a view to ensuring rational and coordinated development of coal production and for promoting optimum utilisation of the coal resources consistent with the growing requirements of the country, and for matters connected therewith or incidental thereto.” 32. The Coal Mines Management Act received the assent of the President on 31.03.1973 but it was made effective from 30.01.1973 except Section 8(2) which came into force at once. Section 3(1) provides that on and from the appointed day (that is, 31.01.1973) the management of all coal mines shall vest in the Central Government. By Section 3(2), the coal mines specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1). Under the proviso to Section 3(2), if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order make a declaration about the existence of such mine, upon which the management of such coal mine also vests in the Central Government and the provisions of the Act become applicable thereto. 33. Immediately after the Coal Mines Management Act, the Parliament enacted the CMN Act. CMN Act was passed, “to provide for the acquisition and transfer of the right, title and interest of the owners in respect of coal mines specified in the Schedule with a view to reorganising and reconstructing any such coal mines so as to ensure the rational, coordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and for matters connected therewith or incidental thereto.” 34. Section 2(b) of the CMN Act defines a coal mine in the same manner as the corresponding provision of the Coal Mines Management Act, namely, a mine “in which there exists one or more seams of coal”. Section 3(1) provides that on the appointed day (i.e.,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 68 of 389 01.05.1973) the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all encumbrances. Section 4(1) provides that where the rights of an owner under any mining lease granted, or deemed to have been granted, in relation to a coal mine, by a State Government or any other person, vest in the Central Government under Section 3, the Central Government shall, on and from the date of such vesting, be deemed to have become the lessee of the State Government or such other person, as the case may be, in relation to such coal mine as if a mining lease in relation to such coal mine had been granted to the Central Government. The period of such lease is to be the entire period for which the lease could have been granted by the Central Government or such other person under the 1960 Rules and thereupon all the rights under the mining lease granted to the lessee are to be deemed to have been transferred to, and vested in, the Central Government. By Section 4(2) on the expiry of the term of any lease referred to in sub-section (1), the lease, at the option of the Central Government, is liable to be renewed on the same terms and conditions on which it was held by the lessor for the maximum period for which it could be renewed under the 1960 Rules. Section 5(1) empowers the Central Government under certain conditions to direct by an order in writing that the right, title and interest of an owner in relation to a coal mine shall, instead of continuing to vest in the Central Government, vest in the Government company. Such company, under Section 5(2), is to be deemed to have become the lessee of the coal mine as if the mining lease had been granted to it. By Section 6(1), the property which vests in the Central Government or in a government company is freed and discharged from all obligations and encumbrances affecting it. Section 8 requires that the owner of every coal mine or group of coal mines specified in the second column of the Schedule shall be given by the Central Government in cash and in the manner specified in Chapter VI, for the vesting in it under Section 3 of the right, title and interest of the owner, an amount equal to the amount specified against it in the corresponding entry in the fifth column of the Schedule. By Section 11(1), the general superintendence, direction, control and management of the affairs and business of a coal mine, the right, title and interest of an owner in relation to which have vested in the Central Government under Section 3 shall vest in the Government company or in the Custodian, as the case may be. 35. The CMN Act came to be amended by the Coal Mines (Nationalisation) Amendment Ordinance which was promulgated on 29.04.1976. The Ordinance was replaced by the Coal Mines
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 69 of 389 (Nationalisation) Amendment Act, 1976 (for short, ‘1976 Nationalisation Amendment Act’). A new section, Section 1-A was inserted by which it was declared that it was expedient in the public interest that the Union should take under its control the regulation and development of coal mines to the extent provided in sub- sections (3) and (4) of Section 3 and sub-section (2) of Section 30 of the CMN Act. By sub-section (2) of Section 1-A, the declaration contained in sub-section (1) was to be in addition to and not in derogation of the declaration contained in Section 2 of the 1957 Act. By Section 3 of the 1976 Nationalisation Amendment Act, a new sub- section (3) was introduced in Section 3 of the principal Act. Under clause (a) of the newly introduced sub-section (3) of Section 3, on and from the commencement of Section 3 of the 1976 Nationalisation Amendment Act, no person other than (i) Central Government or a Government company or a corporation owned, managed or controlled by the Central Government or (ii) a person to whom a sub-lease, referred to in the proviso to clause (c) has been granted by any such Government, company or corporation or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation, in India in any form. Under clause (b) of sub- section (3), excepting the mining leases granted before the 1976 Nationalisation Amendment Act in favour of the Government company or corporation referred to in clause (a), and any sub-lease granted by any such Government, Government company or corporation, all other mining leases and sub-leases in force immediately before such commencement shall insofar as they relate to the winning or mining of coal, stand terminated. Clause (c) of the newly introduced sub-section (3) of Section 3 provides that no lease for winning or mining coal shall be granted in favour of any person other than the Government, Government company or corporation referred to in clause (a). Under the proviso to clause (c), the Government, Government company or the corporation to whom a lease for winning or mining coal has been granted may grant a sub- lease to any person in any area if, (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner,and (ii) the coal produced by the sub-lessee will not be required to be transported by rail. By sub-section (4) of Section 3, where a mining lease stands terminated under sub-section (3), it shall be lawful for the Central Government or a Government company or corporation owned or controlled by the Central Government to obtain a prospecting licence or mining lease in respect of the whole or part of the land covered by the mining lease which stands terminated. Section 4 of the 1976 Nationalisation Amendment Act introduces an additional provision in Section 30 of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 70 of 389 the principal Act by providing that any person who engages, or causes any other person to be engaged, in winning or mining coal from the whole or part of any land in respect of which no valid prospecting licence or mining lease or sub-lease is in force, shall be punishable with imprisonment for a term which may extend to two years and also with fine which may extend to Rs.10,000/-. 36. By the Coal Mines (Nationalisation) Amendment Act, 1993 (for short, ‘1993 Nationalisation Amendment Act’), the CMN Act was further amended. The Statement of Objects and Reasons of the 1993 Nationalisation Amendment Act reads thus: “Considering the need to augment power generation and to create additional capacity during the eighth plan, the Government have taken decision to allow private sector participation in the power sector. Consequently, it has become necessary to provide for coal linkages to power generating units coming up in the private sector. Coal India Limited and Neyveli Lignite Corporation Limited, the major producers of coal and lignite in the public sector, are experiencing resource constraints. A number of projects cannot be taken up in a short span of time. As an alternative, it is proposed to offer new coal and lignite mines to the proposed power stations in the private sector for the purpose of captive end use. The same arrangement is also considered necessary for other industries who would be handed over coal mines for captive end use. Washeries have to be encouraged in the private sector also to augment the availability of washed coal for supply to steel plants, power houses, etc. Under the Coal Mines (Nationalisation) Act, 1973, coal mining is exclusively reserved for the public sector, except in case of companies engaged in the production of iron and steel, and mining in isolated small pockets not amenable to economical development and not requiring rail transport. In order to allow private sector participation in coal mining for captive use for purpose of power generation as well as for other captive end uses to be notified from time to time and to allow the private sector to set up coal washeries, it is considered necessary to amend the Coal and Coal Mines (Nationalisation) Act, 1973. The Coal Mines (Nationalization) Amendment Bill, 1992 seeks to achieve the aforesaid objectives.” 37. Section 3 of the CMN Act was amended and thereby in clause (a) of sub-section (3) for item (iii), the following was substituted, namely, (iii) a company engaged in – (1) the production of iron and steel, (2) generation of power,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 71 of 389 (3) washing of coal obtained from a mine, or (4) such other end use as the Central Government may, by notification, specify. 38. By further Notification dated 15.03.1996, the Central Government specified production of cement to be an end-use for the purposes of the CMN Act. 39. By another Notification dated 12.07.2007, the Central Government specified production of syn-gas obtained through coal gasification (underground and surface) and coal liquefaction as end uses for the purposes of the CMN Act. 40. The background in which Section 3(3) of the CMN Act was amended to permit private sector entry in coal mining operation for captive use has been sought to be explained by the Central Government. It is stated that nationalization of coal through the CMN Act was done with the objective of ensuring “rational, coordinated and scientific development and utilization of coal resources consistent with the growing requirements of the country” and as a first step in 1973, 711 coal mines specified in the Schedule appended to CMN Act were nationalized and vested in the Central Government. By 1976 Nationalisation Amendment Act, the Central Government alone was permitted to mine coal with the limited exception of private companies engaged in the production of iron and steel. In 1991, the country was facing huge crisis due to (a) the situation regarding balance of payments; (b) the economy being in doldrums; (c) dismal power situation; (d) shortage in coal production; and (e) inability of Coal India Limited (CIL) to produce coal because of lack of necessary resources to maximize coal production amongst other reasons. There was a huge shortage of power in the country. The State Electricity Boards were unable to meet power requirements. Post liberalization, in the 8th Five Year Plan (1992- 1997) a renewed focus was placed on developing energy and infrastructure in the country. CIL was not in a position to generate the resources required. It was in this background that in a meeting taken by the Deputy Chairman of the Planning Commission on 31.10.1991, it was decided that “private enterprises may be permitted to develop coal and lignite mines as captive units of power projects”. The approval of Cabinet was consequently sought vide a Cabinet note dated 30.01.1992 for “allowing private sector participation in coal mining operations for captive consumption towards generation of power and other end use, which may be notified by Government from time to time”. The Cabinet in the meeting held on 19.02.1992 considered the above Cabinet note and it was decided that the proposal may be brought up only when specific projects of private sector participation in coal mining come to the Government for
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 72 of 389 consideration. Subsequently, another Cabinet note dated 23.04.1992 was placed before the Cabinet containing references to certain private projects like the two 250 MW thermal power plants of RPG Enterprises, which had been recommended by the Government of West Bengal. The proposal contained in the Cabinet note dated 23.04.1992 was approved by the Cabinet on 05.05.1992. On 15.07.1992, the Bill for amendment of Section 3(3) of CMN Act was introduced in Rajya Sabha and the same was passed on 21.07.1992. The Bill was passed in Lok Sabha on 19.04.1993 and got assent of the President on 09.06.1993. 41. The Central Government has highlighted that once Section 3(3) of the CMN Act was amended to permit private sector entry in coal mining operations for captive use, it became necessary to select the coal blocks that could be offered to the private sector for captive use. The coal blocks to be offered for captive mining were duly identified and a booklet containing particulars of 40 blocks was prepared which was revised from time to time.” (Emphasis supplied by me)
63. After having mentioned the scheme of MMDR Act, 1957, CTM Act, 1973 and CMN Act, 1993, the Hon'ble Court further went on to discuss the inter-play between MMDR Act, 1957 and CMN Act, 1973 as under:
(Para No. 57 and 58):
“57. 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining reconnaissance permits, prospecting licences and mining leases and the rule making power of regulating the grant of reconnaissance permits, prospecting licences and mining leases. Clause (a) of sub-section (3) of Section 3 of the CMN Act enables persons specified therein only to carry on coal mining operation. In clause (c), it is provided that no lease for winning or mining coal should be granted in favour of any person other than the Government, Government company or corporation referred to in clause (a). Under clause (b) of sub-section (3), excepting the mining leases granted before 1976 in favour of the Government, Government company or corporation referred to in clause (a) and any sub-lease(s) granted by any such Government, Government company or corporation, all other mining leases and sub-leases in force immediately before such commencement insofar as they
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 73 of 389 relate to the winning or mining of coal stand terminated. When a sub-lease stands terminated under sub-section (3), sub-section (4) of Section 3 provides that it shall be lawful for the Central Government or the Government company or corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of whole or part of the land covered by mining lease which stands so terminated. The above provisions in the CMN Act, as inserted in 1976, clearly show that the target of these provisions in the CMN Act is coal mines, pure and simple. CMN Act effectively places embargo on granting the leases for winning or mining of coal to persons other than those mentioned in Section 3(3)(a). Does CMN Act for the purposes of regulation and development of mines to the extent provided therein alter the legal regime incorporated in the 1957 Act? We do not think so. What CMN Act does is that in regard to the matters falling under the Act, the legal regime in the 1957 Act is made subject to the prescription under Section 3(3)(a) and (c) of the CMN Act. 1957 Act continues to apply in full rigour for effecting prescription of Section 3(3)(a) and (c) of the CMN Act. For grant of reconnaissance permit, prospecting licence or mining lease in respect of coal mines, the MMDR regime has to be mandatorily followed. 1957 Act and so also the 1960 Rules do not provide for allocation of coal blocks nor they provide any mechanism, mode or manner of such allocation. 58. Learned Attorney General submits that an application for allocation of a coal block is not dealt with by the 1957 Act and, therefore, consideration of proposals for allocation of coal blocks does not contravene the provisions of the 1957 Act. The submission of the learned Attorney General does not merit acceptance for more than one reason. First, although the Central Government has pre- eminent role under the 1957 Act inasmuch as no reconnaissance permit, prospecting licence or mining lease of coal mines can be granted by the State Government without prior approval of the Central Government but that pre-eminent role does not clothe the Central Government with the power to act in a manner in derogation to or inconsistent with the provisions contained in the 1957 Act. Second, the CMN Act, as amended from time to time, does not have any provision, direct or indirect, for allocation of coal blocks. Third, there are no rules framed by the Central Government nor is there any notification issued by it under the CMN Act providing for allocation of coal blocks by it first and then consideration of an application of such allottee for grant of prospecting licence or mining lease by the State Government. Fourth, except providing for the persons who could carry out coal mining operations and total embargo on all other persons undertaking such activity, no
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 74 of 389 procedure or mode or manner for winning or mining of coal mines is provided in the CMN Act or the 1960 Rules or by way of any notification. Fifth, even in regard to the matters falling under CMN Act, such as prescriptive direction that no person other than those provided in Sections 3(3) and 3(4) shall carry on mining operations in the coal mines, the legal regime under the 1957 Act, subject to the prescription under Sections 3(3) and 3(4), continues to apply in full rigour. Mr. Harish N. Salve, learned senior counsel for the interveners, is not right in his submission that allocation letter issued by the Central Government is the procedure which regulates the exercise under Rule 22 of the 1960 Rules. Had that been so, some provisions to that effect would have been made in the CMN Act or the 1960 Rules framed thereunder but there is none.” (Emphasis supplied by me)
64. The Hon'ble Court thereafter while analysing the procedure actually followed in allocation of coal blocks by the Central Government further observed as under:
(Para No. 59-65):
“59. The submission of the learned Attorney General that the 7 States - Maharashtra, Madhya Pradesh, Chhattisgarh, Odisha, Jharkhand, Andhra Pradesh and West Bengal – which have coal deposits, have accepted and acknowledged the source of power of the Central Government with regard to allocation of coal blocks is not fully correct. Odisha has strongly disputed that position. Odisha’s stand is that the system of allocation of coal blocks by the Central Government is alien to the legal regime under the CMN Act and the 1957 Act. It is true that many of these States have taken the position that allocation letter confers a right on such allottee to get mining lease and the only role left with the State Government is to carry out the formality of processing the application and for execution of lease deed, but, in our view, the source of power of the Central Government in allocation of coal blocks is not dependant on the understanding of the State Governments but it is dependant upon whether such power exists in law or not. Indisputably, power to regulate assumes the continued existence of that which is to be regulated and it includes the authority to do all things which are necessary for the doing of that which is authorized including whatever is necessarily incidental to and consequential upon it but the question is, can this incidental power be read to empower the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 75 of 389 Central Government to allocate the coal blocks which is neither contemplated by the CMN Act nor by the 1957 Act? In our opinion, the answer has to be in the negative. It is so because where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden 9. This is uncontroverted legal principle. 60. It is argued by the learned Attorney General that the allocation letter does not by itself confer the right to work mines and the identification of the coal block does not impinge upon the rights of the State Government under the 1957 Act. Learned Attorney General argues that allocation of coal block is essentially an identification exercise where coal blocks selected by the CIL for captive mining were identified by the Screening Committee for development by an allocatee, after considering the suitability of the coal block (in terms of exercise and quality of reserve) vis-à-vis the requirements of the end-use plant of the applicant. It is submitted by the Attorney General that a letter of allocation is the first step. It entitles the allocatee to apply to the State Government for grant of prospecting licence/mining lease in accordance with the provisions of the 1957 Act. The right to apply for grant of prospecting licence/mining lease does not imply that with the issuance of allocation letter the allocatee automatically gets the clearances and approval required under the 1957 Act, the 1960 Rules, the Forest (Conservation) Act, 1980 and the Environment (Protection) Act, 1986, etc. According to the learned Attorney General, after allocation, the following steps are required to be complied with: a. The allocatee is required to apply to the State Government for grant of Prospecting Licence in case of an unexplored block, or a Mining Lease in case of an explored block. b. On receipt of the application for grant of Prospecting License or Mining Lease, as the case may be, the State Government, in the case of Prospecting Licence can process the application for Prospecting Licence in accordance with Chapter III of the 1960 Rules. c. In the case of application for Mining Lease (in Form I), the State Government has to take a decision to grant precise area for the purpose of the lease and communicate such decision to the applicant. d. On receipt of the communication from the State Government of the precise area to be granted, the applicant is required to submit a mining plan to the Central
9 Nazir Ahmad v. King Emperor; [(1935-36) 63 IA 372]
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 76 of 389 Government for its approval. [Rule 22(4)] e. After the mining plan has been duly approved by the Central Government, the applicant submits the same to the State Government for grant of mining lease over the area. f. After receipt of the duly approved mining plan, the State Government makes a proposal for grant of prior consent by the Central Government in terms of the proviso to Section 5(1) of the 1957 Act. g. In addition to the approved mining plan, the allocatee is required to obtain permission under Section 2 of the Forest (Conservation) Act, 1980 if the coal block is located in a scheduled forest. Further, the allocatee is required to submit to the State Government, prior environmental clearance from the Ministry of Environment and Forests, Government of India for the project. Forest Clearance and EIA clearance operate separately. h. Mining Lease is thereafter granted by the State Government, after verifying that all statutory requirements have been duly complied with by the allocatee. 61. There seems to be no doubt to us that allocation letter is not merely an identification exercise as is sought to be made out by the learned Attorney General. From the position explained by the concerned State Governments, it is clear that the allocation letter by the Central Government creates and confers a very valuable right upon the allottee. We are unable to accept the submission of the learned Attorney General that allocation letter is not bankable. As a matter of fact, the allocation letter by the Central Government leaves practically or apparently nothing for the State Government to decide save and except to carry out the formality of processing the application and for execution of the lease deed with the beneficiary selected by the Central Government. Though, the legal regime under the 1957 Act imposes responsibility and statutory obligation upon the State Government to recommend or not to recommend to the Central Government grant of prospecting licence or mining lease for the coal mines, but once the letter allocating a coal block is issued by the Central Government, the statutory role of the State Government is reduced to completion of processual formalities only. As noticed earlier, the declaration under Section 1A of the CMN Act does not take away the power of the State under Section 10(3) of the 1957 Act. It is so because the declaration under Section 1A of the CMN Act is in addition to the declaration made under Section 2 of the 1957 Act and not in its derogation. 1957 Act continues to apply with the same rigour in the matter of grant of prospecting licence or mining lease of coal mines but the eligibility of persons who can carry
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 77 of 389 out coal mining operations is restricted to the persons specified in Section 3(3)(a) of the CMN Act. 62. In Tara Prasad Singh¹º, a seven Judge Constitution Bench while dealing with the purposiveness of the CMN Act, as amended in 1976, vis-à-vis the 1957 Act, stated that nothing in this Act (CMN) could be construed as a derogation of the principle enunciated in Section 18 of the 1957 Act. The Court said: “Therefore, even in regard to matters falling under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of Section 18 of the Act of 1957 will continue to apply in its full rigour. As contended by the learned Solicitor General, Section 18 contains a statutory behest and projects a purposive legislative policy. The later Acts on the subject of regulation of mines and mineral development are linked up with the policy enunciated in Section 18.” (emphasis supplied by us) 63. The observations made by this Court in Tara Prasad Singh10 about interplay between the CMN Act and the 1957 Act with reference to the policy enunciated in Section 18, in our view, apply equally to the entire legal regime articulated in the 1957 Act. We are of the opinion that nothing should be read in the two Acts, namely, CMN Act and the 1957 Act, which results in destruction of the policy, purpose and scheme of the two Acts. It is not right to suggest that by virtue of declaration under Section 1A of the CMN Act, the power of the State under Section 10(3) of the 1957 Act has become unavailable. The submission of Mr. Harish N. Salve, learned senior counsel for the interveners that additional declaration under Section 1A of the CMN Act seeks to do away with any vestige of power in the State in the matter of selection of beneficiaries of the mineral is not meritorious. Had that been so, Rule 35 of the 1960 Rules would not have been amended to provide that where two or more persons have applied for reconnaissance permit or prospecting licence or a mining lease in respect of the same land, the State Government shall, inter alia, consider the end-use of the mineral by the applicant. The declaration under Section 1A has not denuded the States of any power in relation to grant of mining leases and determining of those permitted to carry on coal mining operation. 64. The allocation of coal block is not simply identification of the coal block or the allocatee as contended by the learned Attorney General but it is in fact selection of beneficiary. As a matter of fact, Mr. Harish
¹º Tara Prasad Singh and others v. Union of India and others; [(1980) 4 SCC 179]
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 78 of 389 N. Salve, learned senior counsel for the interveners, has taken a definite position that allocation letter may not by itself confer purported rights in the minerals but such allocation has legal consequences and confers private rights to the allocatees for obtaining the coal mining leases for their end-use plants. 65. In view of the foregoing discussion, we hold, as it must be, that the exercise undertaken by the Central Government in allocating the coal blocks or, in other words, the selection of beneficiaries, is not traceable either to the 1957 Act or the CMN Act. No such legislative policy (allocation of coal blocks by the Central Government) is discernible from these two enactments. Insofar as Article 73 of the Constitution is concerned, there is no doubt that the executive power of the Union extends to the matters with respect to which the Parliament has power to make laws and the executive instructions can fill up the gaps not covered by statutory provisions but it is equally well settled that the executive instructions cannot be in derogation of the statutory provisions. The practice and procedure for allocation of coal blocks by the Central Government through administrative route is clearly inconsistent with the law already enacted or the rules framed.” (Emphasis supplied by me)
65. In the light of aforesaid scheme of MMDR Act, 1957, CTM Act, 1973 and CMN Act, 1973 (as it further stood amended in the year 1993 and 1996), it will be now appropriate to first recapitulate the sequence of events in which the application of M/s CTL came to be considered in MOC, Coal India Ltd. (CIL), Central Mine Planning & Design Institute Limited (CMPDIL) and Central Coalfields Limited (CCL).
(G) Detailed circumstances in which application dated 09.05.98 of M/s CTL was dealt with in Ministry of Coal (MOC), Coal India Limited (CIL), Central Mine Planning & Design Institute Limited (CMPDIL) and Central Coalfields Limited (CCL). (Since the application dated 09.05.98 of M/s CTL was considered and dealt with in MOC, CIL, CMPDIL and CCL over a period of more than one year and on more than one occasions so all such circumstances are being mentioned in a sequential manner i.e. in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 79 of 389 accordance with the dates when the same was dealt with in the aforesaid organisations. Accordingly, for the sake of clarity and better appreciation of facts, the proceedings in the aforesaid organizations are being mentioned under separate sub-headings.) G (i) Proceedings in MOC (Part-1)
66. On 09.05.98 M/s CTL submitted an application Ex. PW 14/C alongwith a brief note on scheme of mining, to Chairman, Screening Committee, MOC, Government of India seeking “Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha project, District Giridih, Bihar for captive mining by M/s CTL”. For a ready reference the said application read as under:
Application dated 9.5.98, Ex. PW 14/C [Part of Ex. P-14. (available at page 2-3 in D-36)] “No. CTL/194/98-99/068 P.O. Nag Nagar, Dhaiya, Castron Dhanbad, Bihar – 826004 Technologies Ltd May 9, 1998 Ph : (0326) 203390, 207886 Fax: (91326) 207455 The Chairman, Screening Committee, Ministry of Coal, Shastry Bhawan, New Delhi.
Reg : Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha project, Dist. Giridih, Bihar for captive mining by Castron Technologies Ltd.
Sir,
On 14th Nov., 1997 we had submitted three copies of mining plans for the above project to the Ministry of Coal. We have not yet heard from the Ministry in this regard. However, we have been advised to first apply to your goodself for the identification of the said block for our company. This application is being made for earmarking of 105.153 hectares of coal mining area of Brahmadiha project in the District of Giridih, Bihar. A brief note on the scheme of mining, location of the areas, reserves and probable quality of coal, utilisation of coal after mining, environment status etc. is attached to facilitate consideration of our request. As will be noticed, the pits and the inclines were abandoned and surrendered in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 80 of 389 1916 by the then private company Raniganj Coal Associates. Being abandoned mine, this was not included in the list of taken over mines at the time of nationalisation in 1973. However, we understand this illegal coal mining and theft of coal from this mine is continuing. On the basis of detailed techno-economic study by our company, we are confident that mineable reserves of 2.215 million tonnes can be extracted from lower Kurhurbaree Seam, at the rate of about 0.15 million tonnes per year. This activity will provide employment in the area and will energise economic activities. On the other hand, in the absence mining of this coal, these mineable reserves will be lost for ever, and the state Government will not get any revenue as Royalty. The area lines on the easternmost fringe of the Giridih Coal Field as can be seen from the attached key plan and does not include any part of leasehold areas of CCL. As such, the activities of the nationalised coal sector would not be affected. In fact, the CCL is unwilling to open this area due to high OB to coal ratio and uneconomical working. In view of the above, we request that our proposal may be considered at the earliest and the area be earmarked for open cast mining by Castron Technologies Ltd. Further formalities will be initiated on hearing from your goodself. Thanking you,
Yours faithfully, For CASTRON TECHNOLOGIES LTD. Sd/- Director.
Encl : Brief Note on Scheme of Mining.”
Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 2046235 Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442 (Emphasis supplied)
Brief note on scheme of mining (available at page No. 4-8 in D-36)
BRIEF NOTE ON SCHEME OF MINING
A. Introduction Giridih coalfield is developed in a shallow intracratonic trough. The coalfield spreads over 27.5 sq. Km of area and is one of the smaller coalfields of India. The exploitation of the coalfield was started by Bengal coal company and East India Railway as early as 1871. Since then the mining activity has been vigorously continued. There are 13 coal horizons in this coalfield. However, upto 1942, the major production of coal was from lower Kurhurbaree seam (the lower most seam in the area) due to its superior quality / grade. The mining of younger seams containing inferior grade coals was started after 1942. The Giridih
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 81 of 389 colliery had constructed its own power plant & a coke oven plant with the capacity to produce 60000 te / yr / bp hard coke. Since nationalisation of coal mines in 1973, all the mines in this coalfield are run by central coalfield Ltd., a subsidiary of coal India Ltd. (Central Govt. U/T ). Over 100 pits were sunk and a large number of inclines were driven by several agencies in this coalfield. Out of the above, 17 pits and about same number of inclines were driven by Ranigunj coal Associates ( a private company ) in the south - east part of the coalfield to work the lower Kurhurbaree seam ( the only seam existing in their lease area). The seam had been fully developed & depillared in whole of their area. However old plans available show lot of pillars left behind due to sudden collapses. The pits and inclines had been abandoned and surrendered by RCA in 1916, long before the nationalisation of coal mines took place in the country in 1973. These abandoned mines of RCA were not included in the list of taken over mines as given in the Coal Mines Nationalisation Act, 1973. The CCL is unwilling to open this area because of high OB to coal ratio & uneconomical workings. The Promoters of M/s. Castron Technologies Limited have had three generations of coal mining experience before nationalisation of coal mines by Govt of India in 1973. Now, in view of the acute shortage of coking coal in the country and Govt's policy to invite private sector to improve economy by opening coal mines for captive use ( i. e for coal washery, power plant, cement plant etc.), the applicant M/s. Castron Technologies Limited, intends to open an opencast coal mine in the abandoned RCA area, within the provisions of Mines & Minerals (Regulation & Development) Act, 1957. The applicant with their mining experts have made detailed techno economic studies of the proposed project ( after study of the abandonment mine plans of RCA area ) and have come to the conclusion that remnant coal of lower Kurhurbaree seam in abandoned & surrendered RCA area of which mineable reserve comes to 2.215 Mil. Te., can be produced by opencast mining with a marginal profit. The proposed opencast project has been named as Brahmadiha opencast. The coal produced from the mine, will be mixed with stones and shales and shall require beneficiation. Therefore a coal washery having a capacity of 0. 15 Million Te. has been planned. The rejects from the washery shall be used for power generation by installing a 10 MW power plant for captive & non-captive use. The proposed integrated project consisting of coal mining, coal washing and reject based power generation, apart from producing superior grade coal will bring all round prosperity to the backward area of Giridih district. Because of the abandonment of coal mines due to depletion of superior quality coal reserves many of the unskilled and semiskilled workers have become jobless. The proposed integrated project will provide employment to
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 82 of 389 about 850 persons in the planned manner. It will not only give a helping hand to the local economy but will give boost to coal based industries. The coal produced and power generated will generate substantial revenue for the state in the form of royalty, taxes and cess. It will provide backward integration to the main objectives and activities of the company by providing coal and power. The mining project will employ a capital outlay of Rs. 22.00 crores and overall investment of Rs. 120 crores in the integrated project including coal washery and power plant. Apart from generating direct and indirect employment, the restarting of mining activity in the area will have many added advantages Giridih district is also famous for mica trading. Several mica mines have been working in the district. Due to these two industrial activities Giridih town has experienced very large scale migration of people from adjacent areas particularly from hilly regions of the district / area. However a large section of the population is illiterate. On the initiation of coal mining it is proposed and expected to start an industrial training centre here. This centre apart from attempting to improve the skills of people will also address itself to the task of removing illiteracy. It will impart vocational training in trades like carpentry and furniture making, blacksmithy, fitting, welding, brick making, stone mining, cane work and gardening. Skills in such supportive crafts will improve local economy. The training centre will also have a programme to train people in sericulture and pisiculture. This will help the workers to become a part of a self sustaining economy. It is also proposed to start a yoga training centre apart from other measures like tree plantations along roads, around colony etc. Giridih district was originally a part of Hazaribagh district and identified as a separate district in 1972. The district is a part of Chota Nagpur plateau Geographic area of district is 68892 Sq. Km. with a population density of 251.2 persons / Sq. Km. (1981 census), 13.05% ST, 12.98% SC and 85.75% rural population. The thick density is due to the large scale migration from adjoining districts for seeking employment. B. Location Proposed Brahmadiha opencast project is situated at about 8 Km in the south east of Giridih Rly. Station and about 1.5 Km to the west of Giridih- Purulia PWD district road. The project area is bounded by Lat. 24º 08' 15" & 24º 09'18" N and Long. 86° 19' 10" & 86° 20' 00" E and is covered in survey of India's 1 : 50000 scale topo sheet No 72 L/8. C. Communication G.T. road passes through Dumri town from where the project is about 45 Km between Dumri-Deoghar / Giridih road and Giridih Purulia road. Proposed lease area is connected with Giridih Purulia PWD road
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 83 of 389 by about 1. 20 Km fair weather village road. The Giridih District town is about 6 Km from the project. The Giridih town is also connected by tar roads to Dhanbad and Koderma. Giridih railway station about 8 Km away from the project is connected lo Madhupur junction on the railway main line from Delhi to Calcutta. A railway siding branching off from Giridih railway station also passes at a distance of about 1 Km to the west of the project.
D. Salient features of the project 1. Name of the proposed project Brahmadiha Opencast Project (old R.C.A. Area) 2. Name of coalfield Giridih, Bihar 3. Name and address of the entrepreneur Castron Technologies Limited 8, Waterloo Street, Calcutta – 700 069
Business Address Lal Bungalow, Dhaiya, P.O. Nagnagar, Dhanbad 826 004 4. Location of the proposed project 8 Kms. south of Giridih Railway Station Bounded by Lat 24º -08' -15" N & 24º -09' -18" N, & Lon 86° -19' -10"E & 86° -20' -00" E covered in Survey Of India's 1:50000 scale topo sheet no 72 -L/8. 5. Nearest Railway station Giridih, on Eastern railway, Giridih branch 6. Total area being applied for 105.153 Ha. mining lease 7. Legal status of area Old abandoned area of Raniganj Coal Associates. Presently not covered by any valid mining lease. 8. Name of the seam to be worked Lower Kurhurbaree (Only seam in the proposed mining lease area). 9. (a) Total thickness of seam 6.00 Meters
(b) Expected percentage of coal a) Pillars - 40% left behind which is now being b) Goaved area - 30% proposed to be produced c) Barriers - 100% d) Out / incrop - 50% 10. Gradient of seam 1 in 6 average 11. Quality Grade of L.K. seam is 'A'. However it is going to deteriorate as the coal to be mined is the remnant of L.K. seam i.e left out coal in old abandoned depillared areas, and will be mixed with shales and stones. Therefore actual grade shall be known after analysing the samples taken from raised coal.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 84 of 389 12. Maximum quarry depth 60 Meters 13. Gross Reserves 2.215 Million Tonnes 14. Mineable coal reserves by opencast 2.215 Million Tonnes 15. Overburden to be removed (including 30.63 Million Meter³ access trench excavation) 16. Average stripping ration (m³/Te) 13.83 17. Annual mine target (M.Te) 0.15 18. Life of project (Years) (including 30 Years construction, reclamation and dismantling period) 19. Manpower required 200 Mining (850 for integrated project) 20. OMS 2.50 Tonnes 21. Initial total capital outlay Rupees 22.00 Crores 22. Capital requirement for township, Rupees 98.00 Crores washery and power plant. 23. Estimated year of achieving targeted 5th Year capacity 24. Utilisation of coal produced Washing & captive use for power generation from rejects.
ENVIRONMENT PROTECTION MEASURES
(A) Base line information & existing land use pattern The topography of Giridih coalfield area is undulating. The coalfield occupies the low valley portion, while the ground to the north and south is comparatively much higher and is composed of crystallise metamorphic rocks. The river Barakar flowing from W-N-W to E-S-E direction on the south of Giridih coalfield is mainly draining coalfield area. There are two minor nallas which are originating within the proposed lease hold area and as such there will not be any significant adverse effect on water sources in the neighbouring area of mining operations. The climate is humid and sub tropical. Rainfall is confined between June and October, hot and dry summer March to May and winter from November to February. In summer temp rises up to 42º to 46º C. In winter temperature drops down to 5º C at times. Average rainfall is around 1200 mm per annum. The total area being applied for grant of ML is 105. 153 Ha. The land inside core zone is barren, unproductive and undulating. There is no inhabitation' and forest land inside the core zone. The project area does not support any fauna.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 85 of 389 (B) Water pollution control (i) Mine water For the working of the coal project the depillared & abandoned working in the proposed project which are expected to be partly filled with water, shall have to be dewatered gradually. The mine water shall be utilised after treatment for drinking, industrial use and if required for agricultural use, tree plantation etc. It will also be used for dust suppression by spraying over haul roads, etc. Since Giridih is water scarcity area, mine water after treatment will be a good source of water supply for drinking & irrigation etc. Even then if there is any surplus water it will be collected in sedimentation tanks where the suspended matters ( such as grease, oil, dirt particles etc.) in water will settle down before discharging the same into the main drainage system. Routine quality checks will be provided if required it will be further treated according to impurities. Peripheral trench around external dump would be provided to prevent run off from the dumps flowing directly into the drainage system. (ii) Industrial discharge Discharge from workshop, coal washery, power plant etc. is likely to contain dust, grease, oil etc. Therefore this discharge would be collected and allowed to settle in sedimentation tanks and subsequently treated before discharging into main drainage system. (iii) Domestic sewage disposal Domestic sewage from the township would be discharged into the common oxidation pond and the discharge would be treated if required before using for agriculture purposes or before allowing it to flow into the main drainage system. (C) Air Pollution Following mitigating measures shall be adopted to keep the air pollution within prescribed limits. i. Generous tree plantation to make green barrier around colony, industrial areas, O.B. dumps and along haul and colony roads. ii. Water spraying on roads over burden dumps, coal stacking area and dust generating locations in C. H. P. iii. proper maintenance of all Internal combustion engines to reduce smoke and exhaust fumes. iv. Provision & maintenance of proper dust extraction / suppression system of all drills.” (Emphasis supplied by me)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 86 of 389 67. The said application dated 09.05.98 of M/s CTL upon being received in MOC was marked down to CPAM Section after being routed through the desk of senior officers including Advisor (Projects) Sh. N.N. Gautam (A-6) and Sh. Parvesh Sharma, Director, CPAM. The application was thereafter processed by Sh. R.S. Negi, the concerned Dealing Assistant in CPAM Section, vide note dated 30.06.98.
The said note dated 30.06.98 of Sh. R.S. Negi read as under:
Available at Note sheet pages No. 1 and 2 in D-38.
“Ministry of Coal CPAM – Section . . .
Subject: Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha project, Dist. Giridih, Bihar for captive mining. S.No. 1 (R) S.No. 2 (R)
This is a reference received from M/s. Castron Technologies Ltd. Regarding identification of 105.153 hectares of abandoned coal mining area of Brahmadiha project Dist. Giridih, Bihar for captive mining alonwith enclosures containing a brief note vide pages 2-8/c on the scheme of mining, location of the area, reserves and probable quality of coal, utilisation of coal after mining environment status etc. they have indicated that the pits and inclines were abandoned and surrendered in 1916 by the then private company Raniganj Coal Associates. Being abandoned mine, this was not included in the list of taken over mines at the time of nationalization in 1973. The applicant intends to open an opencast coal mine in the abandoned RCA area, within the provisions of MMRD Act, 1957. As per their detailed techno-economic study the mineable reserves of 2.215 m.t. can be produced from lower Kurhurbaree seam at the rate of about 0.15 million tonnes per year by opencast mining with a marginal profit. They have indicated that the area lines on easternmost fringe of the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 87 of 389 Giridih coalfield does not include any part of leashold areas of CCL and as such the activities of the nationalised coal sector would not be affected. They have further indicated that the proposed project has been named as Brahmadiha OC. The coal from the mine will be mixed with stones and shales shall require beneficiation. They have planned to establish a washery having a capacity of 0.15 M.T. The rejects from the washery shall be used for power generation by installing a 10 MW power plant for captive & non-captive use. On the basis of the above submission, they have requested us to consider their proposal and the area be earmarked for opencast mining to them. In this regard it is submitted that a revised policy guidelines for allocation of captive mining block is under consideration. Since M/s. Castron Technologies Ltd.'s request is a fresh proposal, it is for consideration whether their request may be processed. In the meanwhile, we may obtain comments of CIL/CMPDI/MOPower as in DFA. Sd/- (R.S. Negi) 30/6/98 Sd/- (Neera Sharma) 7/7/98
US(CPAM) Sd/- B.L. Das 7/7/98 Director (CPAM)”
(Emphasis supplied by me)
68. The note dated 30.06.1998 of Sh. R.S. Negi after travelling through the desk of Section Officer PW-14 Neera Sharma, Under Secretary Sh. B.L. Das and Director (CPAM), Sh. Pravesh Sharma reached the desk of A-6 N.N. Gautam. He also agreed with the note of Sh. R.S. Negi and decided that till the time new policy of captive coal blocks is finalised in MOC, the comments of CIL/CMPDIL and Ministry of Power be obtained.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 88 of 389 Accordingly vide letter dated 21.07.98 [Ex. PW 14/D (available at page 9 in D-36)] both CIL and CMPDIL were requested to examine the proposal of M/s CTL and to submit comments to MOC. [copy of letter dated 09.05.98 of M/s CTL was also enclosed with the said letter].
The letter dated 21.07.98 of Under Secretary, Sh. B.L. Dass read as under:
Letter dated 21.07.98, Ex. PW 14/D (available at page 9 in D-36):
“Gram : COAL No. 47011/7(62)/93-CPAM GOVERNMENT OF INDIA MINISTRY OF COAL Shastri Bhavan, New Delhi, the 21st July, 1998 To, 1. Chief General Manager (CP), Coal India Limited, 10-Netaji Subash Road, Calcutta-700001 2. The Chairman/Managing Director, CMPDI, Gondwana Place, Kanke Road, Ranchi-834008.
Sub: Identification of 105. 153 hectares of abandoned coal mining area of Brahmadiha project, Distt. Giridih, Bihar for captive mining by Castron Technologies Ltd. ______Sir,
I am directed to forward herewith a copy of M/s. Castron Techologies Ltd. letter No.CIL/194/98-99/068 dt.9.5.98 on the above subject and to request you to examine the proposal and furnish your comments to this Ministry at an early date. Yours faithfully, Sd/- (B.L. Dass) Under Secretary to the Govt. of India Encls: As above.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 89 of 389 69. However, while the comments from CIL and CMPDIL were still awaited, A-6 N.N. Gautam, Advisor (Projects), MOC and Member Convenor in the meantime again sought the file from CPAM section by way of a telephonic message on 18.08.98. Sh. B.L. Dass, Under Secretary (CPAM) Section accordingly recorded a note dated 18.08.98 at note sheet page 3 in file Ex. PW 4/DX-1 (Colly) (D-38) as under:
“Adv(P) desired on phone today morning, to see their file Dir(CPAM)'s remarks against 'A' on 2/n ante may also kindly be seen. Sd/- B.L. Dass 18/8/98 Director (CPAM) - On Tour Adv. (P) ”
70. Upon receipt of file, as above, A-6 N.N. Gautam suo-moto recorded a detailed note dated 28.08.98 [available at note sheet page 3- 4 (D-38)]. The said note read as under:
Note dated 28.8.98 available at note sheet page 3-4 in (D-38)
“1. This is a proposal (2-8/c) from Castron Technologies Ltd requesting allotment of 105.153 of abandoned coal mining area of Brahmadiha project, Dt. Giridih, Bihar for captive mining. 2. The pits and the inclines in the area were abandoned and surrendered in 1916 by the then private company, M/s Raniganj Coal Associates. This area was not included in the list of taken over mines in 1973 as this was abandoned. 3. M/s Castron Technologies Ltd had surveyed the area and reported a mineable reserves of 2.215 mt in lower Kurhurbaree seam with expected percentage of coal left behind in Pillars (40%), Goaved area (30%) Barriers (100%) and out / incrop (50%). 4. Though the grade is “A”, deterioration is expected as mining will be in the left out areas as indicated above. Average stripping ratio in the proposed opencast will be 13.83 (cum/te) and annual
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 90 of 389 mine target with coal mixed with shale & stone is 0.15 mt. The utilisation of coal is proposed to be for captive use for power generation after washing the coal, for which a plant of 10 MW capacity is to be installed. The rejects will be used for power generation. However, the proposal is silent about the utilisation of the washed coal. 5. There is similarity of this proposal with that of M/s BLA industries where an area of abandoned mining was allocated in WCL. However, the block was listed as an identified block. In the present instance, it is not. 6. Comments on the proposal have been invited from CIL/CMPDI vide our letter (9/c) dated 21st July and their response is still awaited. Apart from the procedural reasons of the area not being identified as a potential block for captive mining, the allotment of the area will help in some economic activity in an otherwise abandoned mining zone. 7. In this context, it may be noted that the amendment of the Coal Mines Nationalisation Act (1973) in June 1993 allows washing of coal obtained from a mine as an activity not under the ambit of the Nationalisation Act any more. The party may take recourse to this inter-pretation and will feel not obliged to indicate the use of washed coal for captive consumption. Though we have, till now, no case where washing of coal obtained from a mine has been undertaken where downstream linkage / consumption has not been firmed up, it needs to be clearly spelled out that mine / block can not be given for washing unless the washed coal is for captive consumption or tied up with downstream linked consumer. Submitted for necessary directions in this regard. Sd/- 28/8/98 (N.N. Gautam) Addl. Secretary Addl. Secretary” (Emphasis supplied by me)
71. The file was thereafter put up before A-5 P.K. Banerjee, the then Additional Secretary, MOC and Chairman, Screening Committee and who at note sheet page 4 itself recorded the following endorsement while agreeing with the approach of A-6 N.N. Gautam:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 91 of 389 Note dated 31.8.98 available at note sheet page 4 in (D-38)
“I agree with the above approach. However, let us fix a time limit of say three months for disposal of this case one way or the other” Sd/- P.K. Banerjee 31.8.98”
G (ii) Proceedings in CIL and CMPDIL (Part-1)
72. In the meantime PW-5 K.K. Khadiya, Director (Technical), P&D, CMPDIL submitted response of CMPDIL on the application dated 09.05.98 of M/s CTL to CIL vide communication dated 13.8.98 observing that the request of the company M/s CTL can not be agreed to as it is not based on scientific and legal considerations. Copy thereof was also marked to Sh. B.L. Dass, Under Secretary, MOC, Government of India. The said communication, Ex. PW 5/C dated 13.08.98, [Available at page No. 16-17 in (D-103)] of PW-5 K.K. Khadya read as under:
Letter dated 13.8.98 Ex. PW 5/C [Available at page No. 16-17 in (D-103)] “Central Mine Planning & Design Institute Limited. (A subsidiary of Coal India Limited) Gondwana Place, Kanke Road, Ranchi 834008 (Bihar) INDIA No.Dir (T)/P&D/98/18/98/472 Dated: 13.8.98 To The Chief General Manager (CP), Coal India Limited, 10, Netaji Subhas Road, Calcutta-1.
Dear Sir, Kindly refer to letter No. 47011/7(62)/93-CPAM dated 21.7.98 from Shri B.K. Dass, Under Secretary to the Govt. of India regarding identification of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 92 of 389 105.153 hectares of abandoned coal mining area of Brahmadiha project for captive mining by Castron Technologies Ltd. The matter has since been examined and our views are as follows:- 1. The area is an abandoned mining area worked sometime in 1916 by Raniganj Coal Associates and abandoned. You would kindly appreciate that no proper and accurate mine plans are available for this area and this entire worked-out area is full of water and is thus a source of danger to the adjoining property of Central Coalfields Limited where coal mining is being done through UK Incline/Central Pit. The area under consideration was worked extensively through several inclines and pits and to the best of our knowledge almost the entire area has been goved out except few isolated patches mostly around entries and between incrop of the seam and mined out zone. 2. The thickness of the seam is 2.5m. and not 6m. as mentioned in the application of M/s Castron Technologies Ltd. and as such the likely available reserves will be only around 0.70 mt. and not 2.21 mt. as estimated by M/s Catron Technologies Ltd. Accordingly the average stripping ratio will be very high and may be around1:25 which will be highly uneconomical under any management. The proposal to extract barrier between RCA and CCL lease- hold cannot be agreed in the interest of safety and is against the mining statutes. 3. It is also quite evident that the area identified does not conform to the guidelines issued by the Ministry of Coal and as such cannot be considered as a captive block for mining by the IPPs or any other entrepreneur. In view of this, in our view, the request of M/s Castron Technologies Ltd. cannot be agreed to as it is not based on scientific and legal considerations.
Thanking you, Yours faithfully, Sd/- (K.K. Khadiya) Director (T)/P&D Copy to: Shri B.L. Dass, Under Secretary to the Govt. of India, Ministry of Coal, Shastri Bhavan, (This has reference to his letter No. 47011/7(62)/93-CPAM New Delhi dated 21.7.98 to CMD, CMPDI besides CGM (CP), CIL.)
Phone: (0091-651) 301852, 301853, 313631, 314827 Fax: (0091-651) 305447, 301851 Cable : MINEPLAN” (Emphasis supplied by me)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 93 of 389 73. Based on the aforesaid views/observations of CMPDIL, Sh. D.K. Biswas, CGM (CP), CIL accordingly sent the views of CIL to Advisor (Projects), MOC vide letter dated 2.9.98, Ex. PW 14/D-1 [available at page No. 18-19 in D-36], stating that the request of M/s CTL can not be agreed to. The said letter read as under:
Letter dated 02.09.98, Ex. PW 14/D-1 [Available at page No. 18-19 in D-36]
“Coal India Limited 10, Netaji Subhas Road, Calcutta-7 Phone : 220-9980, GRAMS : Coal INDIA Telex : 21-7180 CIL IN Ref. No...... Date......
No.CILCGM(CP)/Cap-Min/CTL/1102 Dated 2-9-98
To The Adviser, (Projects) Ministry of Coal, Shastri Bhavan, NEW DELHI
Sub: Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Distt. Giridih, Bihar for captive mining by Castron Technologies Ltd. Dear Sir, Kindly refer to letter No. 47011/7(62)/93-CPAM dated 21.7.98 from Shri B.L. Dass, Under Secretary to the Govt. of India on the above subject: The matter has since been examined by CMPDI and CIL's views are as under:- 1. The area is an abandoned mining area worked sometimes during 1916 AD by Ranigunj Coal Associates (RCA) and later abandoned, No. proper mine plans are available for this area and the entire worked out area is full of water and is a source of danger to the adjoining property of CCL where coal mining activities are being done through UG Incline/Central Pit. The area under consideration was worked extensively through several incline and pit and to be best of knowledge almost the entire area has been goved out except few isolated patches mostly around entries and between incrop of the seam and mined out zone.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 94 of 389 2. The thickness of the seam is 2.5m and not 6m as mentioned in the application of M/s Castron Technologies Ltd and as such the likely available reserves will be only around 0.70 mt. And not 2.21mt. As estimated by M/s Castron Technologies Ltd. Accordingly the average stripping ratio will be very high and may be around 1:25 which will be highly uneconomical under any management. The proposal to extract barrier between RCA and CCL lease-hold cannot be agreed in the interest of safety and is against the mining statues. 3. It is also quite evident that the area identified does not conform to the guidelines issued by the Screening Committee (MOC) for captive mining and as such cannot be considered as a captive block for mining by the IPPs or any other entrepreneur. In view of this, the request of M/s Castron Technologies Ltd. cannot be agreed to.
Yours faithfully, Sd/- 2/9 (D.K. Biswas) CGM (CP)
Copy to 1. CMD, CCL, Ranchi. 2. Shri B.L. Dass, Under Secretary to the Govt. of India Ministry of Coal, New Delhi. This is in reference to the letter No. 47011/7(62)/93-CPAM dated 21.7.98.” (Emphasis supplied by me)
G (iii) Proceedings in MOC (Part-2)
74. The file Ex. PW 4/DX-2 (colly) (D-36) of MOC however shows that A-6 N.N. Gautam in the meantime had some discussion with the representative of M/s CTL on 08.09.98 regarding the use of washed coal and pursuant to which a letter dated 08.09.98 [Part of Ex. P-14, available at page 20 in D-36]. was submitted by M/s CTL to A-6 N.N. Gautam. The said letter dated 08.09.98 read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 95 of 389
Letter dated 08.09.98 [Part of Ex. P-14, available at page 20 in D-36].
“No. CTL/194/98-99/260 P.O. Nag Nagar, Dhaiya, Castron Dhanbad, Bihar - 826004 Technologies Ltd September 8, 1998 Ph : (0326) 203390, 207886 Fax: (91326) 207455
To, Mr. N.N. Gautam, Advisor (Projects) Ministry of Coal, Shastri Bhawan, New Delhi.
Sub : Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha project, Dist. Giridih, Bihar for captive mining by Castron Technologies Ltd.
Dear Sir, Please refer to your discussion with our representative on 8 th Sept., 98 regarding the use of washed coal that may be available from the coal mining and after washing the same. We beg to submit as follows: 1. After mining the coal and washing the same whatever middling will be available will be utilised for the power generation. The washed coal that will be available will be used for production of metallurgical coke in our own coke oven unit. 2. Large quantities of Chinese coke is being dumped in India containing 12% to 15% ash for landed cost of Rs. 4,000/- =. 3. Our sister concern producing coke namely Foundry Fuel Products Ltd. which has been established after obtaining industrial license is unable to meet the challenge of Chinese coke. As such better quality of coal obtained from the mine after washing will be blended with the coal of BCCL to produce a better variety of marketable coke. 4. In view of the globalisation of economy it is very essential to reduce the cost and produce the better quality of coke. As such we hope that you will kindly complete the process of allocating of mine by the Screening committee and approve our mining plan submitted to you on 14th Nov., 1997. We assure you coal obtained after washing will be utilised for manufacturing of coke directly by ourselves or it will be got converted in other coke oven plants for our company.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 96 of 389 Hope this will meet your query and you will be kind enough to do the needful.
Thanking you,
Sincerely yours, For Castron Technologies Ltd. Sd/- Director.
Mumbai Office: 84 Maker Chamers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 204 6235 Works : III/B-4, B-5, Bokaro Industrial Area, Balidih, Bokaro – 827014 Ph : 50211, 50111 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442
(Emphasis supplied)
75. The letter dated 08.09.98 of M/s CTL Ex. P-14 was marked to Director CPAM by A-6 N.N. Gautam and who further marked it to CPAM Section, MOC.
76. It will be important to mention over here that nothing is evident from the files as to what prompted A-6 N.N. Gautam to suddenly call for the file of M/s CTL from CPAM Section telephonically on 18.08.98 and for what reason he proceeded to record note dated 28.08.98 raising a query regarding the proposal being silent about the utilization of washed coal. Even though he pointed out the procedural reasons for which the area in question was not identified for captive mining but still he went on to support the proposal of M/s CTL stating that the allotment of the area will help in some economic activity in an otherwise abandoned mining zone. Nothing is even ascertainable as to in what manner the query raised by A-6 N.N. Gautam vide his note dated 28.08.98 regarding non-specifying the end-use of washed coal by applicant company M/s CTL was communicated to the company or in what circumstances the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 97 of 389 representative of M/s CTL was called or he came to meet A-6 N.N. Gautam.
[In fact during the course of subsequent discussion, it will be pointed out at many places that whenever any objection/query used to be raised either by MOC officers or by CIL/CMPDIL/CCL officers then strangely the applicant company M/s CTL without there being any formal communication to it from MOC or any other authority submitted one or the other communication providing some explanation qua the said objection/query]
77. In the meantime the comments of CMPDIL and CIL as were received in MOC vide letters dated 13.08.98 and 02.09.98 respectively were processed in MOC by Sh. R.S. Negi vide his note dated 26.10.98 (available at note sheet page 5 in D-38). In the light of views expressed by CIL and CMPDIL he also proposed that the request of CTL can not be agreed to. The said note dated 26.10.98 of Sh. R.S. Negi read as under:
Note Dt. 26.10.98 Part of Ex. PW 14/A (Colly) [available at note sheet page 5 in D-38]
“Ref. Note at pre-page. As desired, comments of CMPDI/CIL has already been received vide S. No. 5 & 6/c (pages 19-22/c). These comments could not be put up as the file was under submission. CMPDI/CIL in response to S.No.3/c(page 9/c), after examining the proposal regarding identification of 105.153 hec. of abandoned coal mining area of Brahmadiha Project, Dist. Giridih, Bihar for captive mining by Castron Technologies Ltd., have furnished their views as under: - – The area is an abandoned mining area worked sometimes during 1916 AD by Ranigunj Coal Associates (RCA) and later abandoned. No proper mine plans are available for this area and the entire worked out area is full of water and is a source of danger to the adjoining property of CCL where coal mining activities are being done through UG
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 98 of 389 Incline/Central Pit. The area under consideration was worked extensively through several incline and pit and to the best of knowledge almost the entire are has been goved out except few isolated patches mostly around entries and between incrop of the seam and mined out zone. – The thickness of the seam is 2.5 m. and not 6m as mentioned in the application of the party and as such the likely available reserves will be only around 0.70 mt. and not 2.21 mt. as estimated by M/s Castron Technologies Ltd. Accordingly the average stripping ratio will be very high and may be around 1:25 which will be highly uneconomical under any management. The proposal to extract barrier between RCA and CCL lease-hold cannot be agreed in the interest of safety and is against the mining statues. – It is also quite evident that the area identified does not conform to the guidelines issued by the Screening Committee for captive mining and as such cannot be considered as a captive block for mining by the IPPs or any other entrepreneur. CIL have further indicated that in view of the above, the request of M/s. Castron Technologies Ltd. cannot be agreed to. Submitted please. Sd/- (R.S. Negi) 26/x”
78. The file after moving from the desk of various senior officers i.e. from the desk of Section officer, Under Secretary and Director (CPAM) came to be put up before Advisor (Projects). However A-6 N.N. Gautam, Advisor (Projects), MOC prepared a letter under his own signatures making number of observations about the comments received from CIL and accordingly requested CIL to again examine the matter. He also stated in the letter that M/s CTL has also been advised to discuss with CIL the issues raised in para No. 1 and 2 of the letter of CGM (CP). He thereafter marked the file back to Director (CPAM) with the endorsement that signed letter may please be issued. Accordingly letter dated 06.11.98 [Part of Ex. P-14 (Available at page 22 of D-36)] under the signatures of A-6 N.N. Gautam and as addressed to Sh. N.K. Sharma, Director
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 99 of 389 (Technical), CIL, was issued. For a ready reference the said letter dated 06.11.98 of A-6 N.N. Gautam read as under:
Letter dated 6.11.98, Part of Ex. P-14 [Available at page 22 in D-36]
“D.O. 47011/7 (62)/93-CPAM N.N. Gautam Government of India Adviser (Projects) Ministry of Coal Shastri Bhawan Room No. 309/A New Delhi-110001 Tel. : 3388043 Fax. : 3387738
Dear Shri Sharma Dated : 6.11.98
This has reference to letter no. CIL CGM(G)/Cap-Min/CIL/1102 of 2nd Sept. 98 for identification of 105.153ha of abandoned coal mining area of Brahmdiha project located in the district Girdih, Bihar for captive mining by Castron Technologies Ltd. 2. It is contended that the request of M/s Castron Technologies cannot be agreed to in view of water danger to the adjoining property of CCL safety consideration associated with methodology of extraction and the area not conforming to the guidelines issued by the Screening Committee of MOC. 3. The above mentioned observations of CIL do not appear to be much convincing. If the existing water body does not pose water danger, how extraction during opencasting will? Besides, the safety aspects of working along with plans of working will surely be scrutinised by the DGMS before allowing mining to proceed. As regard the economics of operation, it should be best left to the commercial judgement of the intending party. 4. I also fail to understand what is implied by stating the area does not conform to the guidelines issued by the Screening Committee. In this context, identification of Gotitoria East & West block may be recalled; the block is also an abandoned mining area in WCL. The abandoned area cited in the proposal will not be ever mined by CIL. But its allotment for captive mining to any intending party will help in initiating some economic activity in an otherwise abandoned mining area. 5. You are requested to examine the issue in the light of what have been stated above. We are also advising M/s Castron Technologies Ltd to discuss with CIL the issues raised in para 1&2 of the letter of CGM (CP). With regards.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 100 of 389 Yours sincerely, Sd/- 6/11/98 (N.N. Gautam) Shri N.K. Sharma Director (Technical), Coal India Limited CALCUTTA” (Emphasis supplied by me)
G (iv) Proceedings in CIL and CMPDIL (Part-2)
79. Pursuant to receipt of aforesaid letter dated 06.11.98, Sh. N.K. Sharma Director (Technical), CIL informed A-6 N.N. Gautam vide letter dated 12.11.98 (available at page 23 in D-36) that the earlier comments were sent on the basis of examination of the case by CMPDIL and that the matter has now been referred to CCL for their comments.
The letter dated 12.11.98 of Sh. N.K. Sharma read as under:
Letter dated 12.11.98, Ex. PW 14/D-2 [available at page 23 in D-36]
“N.K. Sharma COAL INDIA LIMITED Director (Technical) (A Govt. of India Enterprise) COAL BHAWAN 10, Netaji Subhas Road Calcutta-700001
CIL:DT: 007:3483:98 12.11.98
Dear Shri Gautam,
Sub: Identification of 105.153 hectres of abandoned coal mining area of Brahmadiha Project, Dt. Giridih, Bihar for captive mining by Castron Technologies Ltd ------
I am in receipt of your letter No. 47011/7 (62)/93-CPAM dated 6.11.98 on the above subject. 2. The comments sent by CGM (CP) was based on the examination of the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 101 of 389 case by CMPDI. I have already referred this matter (Brahmadiha Projects, Dt. Giridih, Bihar for captive mining) to CCL for their comments and shall be in touch with you very soon. With regards, Yours sincerely, Sd/- (NK SHARMA) Shri NN Gautam Adviser (Projects) Ministry of Coal New Delhi C.C.: CGM (CP), CIL - along with a copy of the letter under reply.”
80. Copy of the said letter dated 12.11.98 was also sent by PW-15 Sh. N.K. Sharma to CGM (CP), CIL alongwith copy of letter dated 6.11.98 of A-6 N.N. Gautam. Accordingly vide letter dated 13.11.98, Ex. PW 5/D (Colly) (available at page 22 in D-103) dated 13.11.98 Sh. D.K. Biswas CGM (CP), CIL marked the said letter dated 12.11.98 of PW-15 Sh. N.K. Sharma alongwith letter dated 6.11.98 of A-6 N.N. Gautam to PW-5 K.K. Khaidya, Director (Technical), CMPDIL with the request to arrange examination of the letter of Advisor (Project) MOC and to submit the views by written fax.
81. PW-5 K.K. Khadiya accordingly sent his comments to D.K. Biswas vide his letter dated 18/24.11.98 Ex. PW 5/E (available at page 27 in D- 103) observing that they do not find any reason to revise their views on the aspect even after considering the observations of Advisor (Projects) contained in his DO letter dated 06.11.98. For a ready reference the said letter read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 102 of 389 Letter dated 18/24.11.98 Ex. PW 5/E (available at page 27 in D-103)
“No. Dir(T)/P&D/18/98/68 Dated 18/24.11.98 To Shri D.K. Biswas, Chief General Manager (CP), Coal India Limited, 10, Netaji Subhas Road, Calcutta-700001
Dear Sir, Kindly refer to your letter No. CIL : CGM(CP):Cap-Min:CTL:1200 dated 13.11.98 regarding identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Dist. Giridih, in the State of Bihar for captive mining by Castron Technologies Limited. In this connection we would like to mention that we have already intimated our views vide our letter No.Dir(T)/P&D/98/18/98/472 dated 13.8.98 to your office (a copy enclosed for your ready reference). We are in agreement with the views expressed earlier and would not like to make any further comments on the observations of Adviser (Projects) as all the aspects brought out by CGM(CP), Coal India in his letter dated 02.9.98 have not been appreciated in the proper perspective of the situation. It is an abandoned mine worked as far back as 1916 much before any of the present regulations came into picture and as such no proper abandoned mine plans (AMP) as required by the stature will be available and as such we have to take all precautions to avoid danger to the adjoining property of Central Coalfields Limited through UG Incline/Central Pit. It is also considered not proper to allot a coal mining block for captive mining to an agency so close to our working which are far away from company's HQs and main areas of operation. In the light of above we do not find any reason to revise our views on this aspect even after considering the observations of Adviser(Projects) contained in his DO letter No.47011/7/(62)/93-CPAM dated 6.11.98. Thanking you, Yours faithfully Sd/- 24/11 Encl: As above (K.K. Khadiya) Director(T)/P&D Copy to: CGM(PMD/PPD)” (Emphasis supplied by me)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 103 of 389 82. PW-6 Sh. S.K. Verma, the then CMD, CMPDIL had also duly approved the said reply dated 18/24.11.98 of Sh. K.K. Khadiya sent to Sh. D.K. Biswas.
G (v) Proceedings in CCL (Part-1)
83. The record also shows that the initial application dated 09.05.98, Ex. P-14/C of M/s CTL as was received in CIL from MOC for comments vide letter dated 21.07.98 of Sh. B.L. Dass, Under Secretary was also sent to Chairman-cum-managing Director, Central Coalfields Ltd. (CCL) Ranchi by Sh. D.K.Jain, Chief General Manger (P&P), CIL for examination and opinion. The said letter dated 24/27.07.1998 Ex. PW 7/A (available at page 11 in D-98) read as under:
Letter dated 24/27.07.1998 Ex. PW 7/A [available at page 11 in D-98]
“Coal India Limited 10, Netaji Subhas Road, Calcutta-700 001 Phone : 220-9980, GRAMS : COAL INDIA Telex : 21-7180 CIL IN Ref. No...... Date...... No.CIL/CCP/CAP-MIN/1044 24/27.07.1998
Chairman-cum-Managing Director, Central Coalfields Ltd. Ranchi
Sub: Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Distt. Giridih, Bihar for Captive Mining by Castron Technologies Ltd.
Dear Sir,
Placed below is a copy of letter No. 47011/7(62)/93-CPAM dated 21st July, 1998 from Shri B.L. Das, Under Secretary to the Govt. of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 104 of 389 India on the above subject. The matter may kindly be so examined and considered opinion of CCL may please be forwarded for further needful at this end. Thanking you, Yours faithfully, Sd/- (D.K. Jain) Chief General Manager(P&P) Enclo. as stated.”
84. A reminder was also issued to Chairman-cum-managing Director, CCL by Sh. D.K. Jain, Chief General Manager (CP) CIL vide letter dated 04.08.98 (available at page 73 in D-98) to send comments on the application dated 09.05.1998 of M/s CTL. Finally the said application of M/s CTL dated 09.05.1998 alongwith the mining scheme was processed in CCL by Sh. S. Bhattacharya, Deputy CG, CCL vide a detailed note dated 11.08.98, followed by another detailed note dated 12.08.98 of Sh. A. Mukherjee, Deputy Chief of Geology, CCL(Available at note sheet page 12-13 in D-98). The said comments were thereafter finally approved by PW-7 Sh. B. Akala, the then CMD, CCL.
For a ready reference the said comments and endorsement read as under:
Note dated 12.08.98 (Available at note sheet page 12-13 in D-98)
“ Department of Geological Services: CCL (Hqrs.) Ranchi
Sub: Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Distt. Giridih, Bihar for Captive Mining by Castron Technologies Limited. ______
The mining scheme submitted by M/s Castron Technologies Ltd has been studied in detail. The area under consideration refers to the old leasehold area of Raniganj Coal Association. The available
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 105 of 389 geological data in respect of the above area of Giridihg Coalfield has been examined and the observations are as under :- 1) The area under consideration was worked extensively by RCA for mining of Lower Kurhurbaree seam through several incline and pits. Almost entire area has been goaved except few isolated patches mostly around shafts which are standing on pillars. The mine has been abandoned sometimes in 1916 and at present is a free-hold area. 2) The CL leasehold near UK incline/Central pit area passes just to the west of the area under consideration and a barrier has been left by CCL to isolate the abandoned water logged working of RCA area. 3) It is not true that substantial mineable reserve of 2.215 million tonnes with 6.0 mtrs. Thickness of only LK seam is available in the area as indicated in the scheme-submitted. The fact is that only 0.70 million tonnes of geological reserve is available in standing pillars as well as within the area between incrop of seam and mined out zones having 2.5 mts. Of seam thickness. This has been left due to low cover above the seam. 4) The geological reserve available vis-a-vis overburden to be negotiated is envisaged to be abnormally high i.e. 1:25 or so which does not seem to be an economical proposition. 5) The reserve locked in barrier between RCA and CCL leasehold area has also been proposed to be mined as per the scheme submitted. But this is not feasible in view of mining activity by CCL around UK incline & Central pit. However, the area under consideration (RCA area) does not conform to the guidelines set by MOC, GOI for private mining in view of the following:- a) Adjacent CCL leasehold area of Giridih Coalfield. b) Adequate infrastructure like road, rail-link and power etc. are available around the area. Sd/- 11/8/98 (S. Bhattacharya)
Encl:- Copy of Guidelines approved by Screening Committee. GM (GS)
-2n- M/s Castron Technologies Ltd. has applied to...... Chairman, Screening Committee, New Delhi for identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Distt. Giridih for Captive mining by them. The copy of the said application was forwarded by the Under Secretary to the Govt. of India, MOC vide no. 47011/7(62)/93-CPAM dt. 21.7.98 to CIL and in turn
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 106 of 389 CGM(P&P), CIL vide his letter no. CIL.CCP/Cap.Min/1044 dt. 24.7.98 (photocopies enclosed) to CMD, CCL requested to get the application examined and give the considered opinion of CCL for further action at CIL level. The application was examined and comments are as follows:- 1) The area in question is a free hold area and has not been considered either a CIL or a Non-CIL Block. 2) The geological reserves in the area is likely to be of the tune of 0.70 million tonnes in Lower Karharbari seam only as most of the area has been goaved out and the available reserves are in the scattered pillars as well as within the area between incrop of the seam and mined out zones having about 2.5 mtrs. of seam thickness. 3) The Coal :0B cut off ratio is likely to be abnormally high to the tune of 1:25. 4) The area in consideration does not conform to the guidelines set by the Govt. of India for identification of captive mining blocks for the following reasons :- a) The area in question (RCA) is just adjacent to the CCL leasehold of Giridih Area. b) Adequate infrastructures like road, railway link etc. are available around the area. Put up for kind perusal and for further necessary action. Encl: As above. Sd/- 12/8/98 (A. Mukherjee) Dy. Chief of Geology. CGM (P & P) The comments may kindly be perused and if approved the same may be communicated to CIL & MOC, separately. Sd/- 14/8 DT (P&P) Sd/- 17/8/98 CMD Seen & OK
We may send our comments on above lines. Sd/- B. Akala 21/8 DT (P&P)” (Emphasis Supplied)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 107 of 389 85. The comments of CCL as above were thereafter communicated to CIL vide letter dated 27.08.98 Ex. PW 7/C (available at page 14 in D-98) of Sh. R.K. Chaudhary, General Manager (GS). The said letter read as under:
Letter dated 27.08.98 (available at page 14 in D-98)
“CCL Central Coalfields Limited (A Subsidiary of Coal India Limited) Darbhanga House, Ranchi 834001 Phone (0651) 201726, 201687, Fax (91) 0651- 3015624, 20479 Gram COLCENT, Telex 0625-201
Ref. No. DG/CCL/Capmin/1662-65 Dated 27-8-1998 To, The Chief General Manager (CP) Coal India Limited Calcutta.
Sub: Identification of abandoned coal mining area of Brahmadiha Project, Dt. Giridih, Bihar for captive mining by Castron Technologies Ltd Ref. Your letter no. CIL/CCP/CAP-MIN/1052 dt. 4th August, 1998.
Dear Sir, The proposal of M/s Castron Technologies Ltd for identifying Brahmadiha Project, Dist. Giridih for captive mining was examined and our comments are as follows: 1) The area in question is a free hold area and has not been considered either a CIL or a Non-CIL Block. 2) The geological reserves in the area is likely to be of the tune of 0.70 million tonnes in Lower Karharbari seam only as most of the area has been goaved out and the available reserves are in the scattered pillars as well as within the area between incrop of the seam and mined out zones having about 2.5 mtrs. of seam thickness. 3) The Coal :OB cut off ratio is likely to be abnormally high to the tune of 1:25. 4) The area in consideration does not conform to the guidelines set by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 108 of 389 the Govt. of India for identification of captive mining blocks for the following reasons :- a) The area in question (RCA) is just adjacent to the CCL leasehold of Giridih Area. b) Adequate infrastructures like road, railway link etc. are available around the area.
This is for your kind perusal and for further necessary action.
Yours faithfully, Sd/- (R.K. Choudhary) General Manager (GS) cc to : 1. D(T) (P&P) – for his kind information. 2. TS to CMD, CCL. 3. GCM (P&P), CCL.”
(Emphasis supplied by me)
86. However upon receipt of communication dated 06.11.98 of Sh. N. N. Gautam, Advisor (Projects), MOC, answers to certain queries were also sought from CCL by PW-15 N.K. Sharma, Director (Technical) CIL vide letter dated 10.11.98 Ex. PW 7/F (available at page 30 in D98). The said communication read as under:
Letter dated 10.11.98 Ex. PW 7/F [available at page 30 in D98].
“Coal India Limited 10, NETAJI SUBHAS ROAD, CALCUTTA-7 PHONE : 220-9980, GRAMS : COAL INDIA TELEX : 21-7180 CIL IN
Ref. No CIL/CCP/CAP-MIN/CTL/1185 Date10.11.1998
Chairman-Cum-Managing Director, Central Coalfields Ltd. Ranchi.
Sub: Identification of 105.153 hectares of abandoned coal mining
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 109 of 389 area of Brahmadiha Project, Dist. Giridih, Bihar for Captive Mining by Castron mining by Castron Technologies Ltd.
Dear Sir, Kindly refer to letter No. CIL/CCP/CAP-MIN/CTL/1044 Dated 24/27.7.98 enclosing therewith a copy of letter 47011/7(62)/93-CPAM dated 21st July, 1998 from Shri B.L. Dass, Under Secretary to the Govt. of India, Ministry of Coal on the above subject and subsequent comments by General Manager(GS), CCL vide his No. DG/CCL/CAPMIN/1662-65 dt. 27.8.98. The matter was further discussed with Chairman, CIL. You are requested to kindly furnish the following information on the above subject: (i) Whether CCL proposes to take up mining activities in the aforesaid block and if yes, the timeframe be indicated. (ii) Whether mining activities in the block will be a source of danger to the adjoining property of CCL. (iii) Whether the area under consideration conforms to the guidelines set by the Screening Committee of Ministry of Coal for identification of captive mining blocks. The guidelines set by the Screening Committee of MOC is enclosed for ready reference. These are urgently required for sending further comments to Adviser (Projects), MOC. Yours faithfully,
Sd/- (N.K. Sharma) Director (Tech.)
Enclo. as stated. cc : Chairman, CIL.”
87. Sh. D.K. Biswas, CGM (CP), CIL however also forwarded a copy of letter dated 06.11.98 of A-6 N.N. Gautam to Chairman-cum-Managing Director, CCL vide letter dated 13.11.98 (available at page 28 in D-98) for examination and comments.
The said letter dated 13.11.98 read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 110 of 389 Letter dated 13.11.98 [available at page 28 in D-98].
“Coal India Limited 10, NETAJI SUBHAS ROAD, CALCUTTA-7 PHONE : 220-9980, GRAMS : COALINDIA TELEX : 21-7180 CIL IN FAX Ref. No CIL/CGM(CP)/Cap-Min/CTL/ Date13-11-98
To, Chairman-Cum-Managing Director, Central Coalfields Ltd. Darbhanga House, Ranchi.
Sub: Identification of 105.153 hectares of abandoned coal mining area of Brahmadiha Project, Dt. Giridih, Bihar for Captive mining by Castron mining by Castron Technologies Ltd.
Dear Sir, In continuation of this office letter No. CIL/CCP/Cap- Min/CTL/1185 dated 10.11.1998, I am to forward herewith a copy of D.O. letter dated 6.11.98 from Shri N.N. Gautam, Adviser (Project), Ministry of Coal addressed to Shri N.K. Sharma, Director(Tech), CIL along with a copy of interim reply from Director (Tech), CIL and this office letter dated 2-9-98. I would request to kindly arrange to examine Adviser(Project), MOC's letter and send your valued comments at the earliest.
Yours faithfully, Sd/- 19/x1 (D.K. Biswas) CGM(CP) Enclo. as above.”
88. The said two letters dated 10.11.98 and 13.11.98 of CIL were thereafter processed in CCL and Sh. R.K. Chaudhary, General Manager (GS) put up a draft reply vide his note dated 18.11.98 (available at page 32 in D-98). After approval of the same the response/comments of CCL to letter dated 10.11.98 of Sh. N.K. Sharma, Director (Technical), CIL was
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 111 of 389 sent vide letter dated 26.11.98 under the signatures of PW7 B. Akala, Chairman-cum-Managing Director, CCL. The said communication dated 26.11.98 read as under:
Letter dated 26.11.98, Ex. PW 7/E [available at page 31 in D-98]
“CCL Central Coalfields Limited (A Subsidiary of Coal India Limited) Darbhanga House, Ranchi 834001
To, Phone (0061) The Director (Tech.), Ref. No. DG/CCL/98/2483 Coal India Ltd., Dated 26/11/98 Calcutta.
Sub: Identification of 105.153 hectres of abandoned coal mining area of Brahmadiha Project, Dt. Giridih, Bihar for captive mining by Castron Technologies Ltd ------
Ref. Your letter no. CIL/CCP/CAP-MIN/CTL/1185 dt. 10.11.98
Dear Sir,
Please refer to your above letter and subsequent letter no. CIL/CGM(CP)/Cap-Min./CTL/ dt. 13.11.98 of CGM (CP) on the subject. Itemwise information as sought is given below: i) CCL is examining the feasibility to open mines in certain patches in Giridih coalfield including the aforesaid block. ii) Apparently mining in this block should not be a source of danger to the adjoining property of CCL, however, hydrogeological studies may have to be carried out before starting the mine. iii) The area under consideration does not conform to the guidelines set by the Screening Committee for the following reasons. a) Adequate infrastructure like road, rail link etc are available around the area. As per the guidelines, preferably blocks in green field areas where basis infrastructure like road, rail link etc is yet to be developed should be given to the private sector. b) The area under consideration is just adjacent to the CCL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 112 of 389 leasehold of Giridih Project. As per the guidelines the blocks offered to private sector should be at reasonable distance from existing mines and projects of CIL in order to avoid operational problems. iv) The context under which Gotetoria East and Est blocks of WCL was identified for captive mining is not known to CCL. A suitable reply may kindly be sent to MOC with a copy to CCL for records. Yours faithfully, Sd/- 26/11 (B.Akala) Chairman-cum-managing Director, CCL” (Emphasis supplied by me)
89. Subsequently, Sh. R.K. Chaudhary GM (GS), CCL put up a note dated 01.03.99 (available at page 85 in D-98) stating that subsequent to sending of earlier reply vide letter dated 26.11.98, further study has been conducted. He accordingly put up a draft reply for perusal and approval of CMD through Technical Secretary to CMD. Finally a letter dated 12.03.99 Ex. PW 7/G (available at page 86 in D-98) was sent by PW-7 B. Akala, Chairman-cum-Managing Director to Director (Technical), CIL in response to letter dated 10.11.98. The said letter dated 12.03.99 read as under:
Letter dated 12.03.99 Ex. PW 7/G [Available at page 86 in D-98].
“CCL CENTRAL COALFIELDS LIMITED (A Subsidiary of Coal India Limited) DARBHANGA HOUSE, RANCHI 834001 Phone (0651) 201726, 201687, Fax (91) 0651- 3015624, 20479 Gram COLCENT, Telex 0625-201
The Director (Tech.), Ref. No...... CMD(CCL)/G-1/99/348 Coal India Ltd., Dated …....12th March 1999 Calcutta.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 113 of 389 Dear Sir,
Sub: Identification of 105.153 Ha of abandoned coal mining area of Brahmadiha Project, Dist. Giridih, Bihar for Captive mining by Castron Technologies Ltd
Ref. Your letter No. CIL/CCP/Cap-Min/CTL/1185 dated 10.11.98
Kindly refer to your above letter and my discussions at CIL, Calcutta on 11.3.99, on the subject. The information desired by you are furnished below: 1) The nearest Railway siding is the Central Pit siding of 44/58 boxes capacity, which belongs to CCL and is at a distance of approximately 1.3 Kms. from the proposed Brahmadiha Block (RCA Patch). The nearest District Road i.e. Dumri – Giridih Road, is at a distance of approximately 6 Kms. from the block. 2) The adjoining working mine belonging to CCL is at a distance of 2.5 Kms. from the periphery of the proposed block. This is also to inform that we do not have any proposal to work in Brahmadiha Patch in the near future as the area is free hold area.
Yours faithfully,
Sd/- 12/3 (B.Akala) Chairman/Mg. Director Copy to: CM (GS) with all papers”
G (vi) Proceedings in CIL (Part-3)
90. Thereafter vide letter dated 16.3.99 Ex. PW 14/D-6 (available at page 38 in D-36), the comments of CIL based on the observations of CCL were communicated by Sh. N.K. Sharma, Director (Technical), CIL to A-6 N.N. Gautam Advisor (Projects) MOC and Member Convenor. The same read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 114 of 389 Letter dated 16.3.99 Ex. PW 14/D-6 (Available at page 38 in D-36) “N.K. Sharma COAL INDIA LIMITED Director (Technical (A Govt. of India Enterprise) Coal Bhawan 10, Netaji Subhas Road, Calcutta-700001 D.O. No. CIL/CCP/Capmin/CTL/1504 Date : 16 March, 1999 Dear Shri Gautam,
Sub: Identification of 105.153 hectres of abandoned coal mining area of Brahmadiha Project, Dt. Giridih, Bihar for captive mining by Castron Technologies Ltd ------
Please refer to your DO letter No. 47011/7(62)/93-CPAM dated 6.11.98 on the above subject and our letter No. 007:3483:98 dated 12.11.98 acknowledging the receipt of the above letter. As already indicated, we had referred this matter (Brahmadiha Project, Dt. Giridih, Bihar for captive mining) to CCL for their comments. The details received are as under : 1) Apparently mining of this block should not be a source of danger to the adjoining property to CCL, however, hydrogeological studies may have to be carried out before starting of mine. 2) The nearest Railway siding is the Central Pit siding of 44/58 boxes capacity, which belongs to CCL and is at a distance of approximately 13 Kms. from the proposed Brahmadiha Block (RCA Patch). The nearest District Road i.e. Dumri – Giridih Road, is at a distance of approximately 6 Kms. from the block. 3) The adjoining working mine belonging to CCL is at a distance of 2.5 Kms. from the perihery of the proposed block. 4) CCL does not have any proposal to work in Brahmadiha Patch in the near future as the area is free hold area. However, it is mentioned here that the Brahmadiha Patch is not in the approved list of blocks for captive mining. With kind regards, Yours sincerely, Sd/- (N.K. Sharma) Shri N.N. Gautam, Adviser (Projects), Ministry of Coal, New Delhi.” (Emphasis supplied by me)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 115 of 389 G (vii) Proceedings in MOC (Part-3)
91. The said letter dated 16.3.99 of Sh. N.K. Sharma was processed by Sh. R.S. Negi vide his note dated 23.03.99 (available at note sheet page 8 in D-38). The same read as under:
Note dated 23.03.99 (Available at note sheet page 8 in D-38) “ S.No. 13 (I) S.No. 14 (R) – FR CIL has sent this reference in response to this Ministry's d.o. letter placed at S.No. 8/c (p.25/c) regarding identification of 105.153 hec. Of abandoned coal mining area of Brahmadiha Project, Dist. Giridih, Bihar for captive mining by Castron Technology Ltd. The details received by them from CCL are as under: - “1. Apparently mining of this block should not be a source of danger to the adjoining property of CCL, however, hydrogeological studies may have to be carried out before starting of mine. 2. The nearest Railway Siding is the Central Pit Siding of 44/58 boxes capacity, which belongs to CCL and is at a distance of approximately 13 Kms. from the proposed Brahmadiha block (RCA Patch). The nearest Dist. Road i.e. Dumri – Giridih Road, is at a distance of approximately 6 Kms. From the block. 3. The adjoining working mine belonging to CCL is at a distance of 2.5 Kms. From the periphery of the proposed block. 4. CCL does not have any proposal to work in Brahmadiha Patch in the near future as the area is free hold area. CIL has further indicated that the Brahmadiha Patch is not in the approved list of blocks for captive mining. For consideration please. Sd/- R.S.Negi 23/3 Sd/- Neera Sharma 30/3/99”
(Emphasis supplied)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 116 of 389 92. However, when the said file came to be put up before Sh. B.L. Dass, Under Secretary, CPAM then beside drawing attention to the earlier note of Director, CPAM at note sheet page 2, he also interalia observed that CIL has indicated that Brahmdiha patch is not in the approved list of blocks for captive mining. The file thereafter moved upward from the desk of Under Secretary, to Director, CPAM who further forwarded it to Advisor (Projects) for directions.
93. In the meantime M/s CTL through Sh. P.K. Agarwalla, Member of Parliament had submitted an application dated 12.4.99, Ex. PW 4/DX-3 [Available at page 39-40 in (D-36)] to Secretary, MOC requesting again that identification and allocation of Brahmadiha coal block may be done simultaneously to avoid further delay in the matter.
For a ready reference the said letter dated 12.04.99 of M/s CTL read as under:
Note dated 12.04.99, Ex. PW 4/DX-3 [Available at page 39-40 in (D-36)]
“P.O. Nag Nagar, Dhaiya, Castron Dhanbad, Bihar - 826004 Technologies Ltd Ph : (0326) 203390, 207886 Fax: (91326) 207455
Ref. : CTL/194/99-2000/025 Date : April 12, 1999
The Secretary, Ministry of Coal, Shastri Bhawan, NEW DELHI
Sub : Approval of the Central Government for grant of mining lease of abandoned coal mine for captive use of washing, generation of electricity in Giridih District in Mouzas
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 117 of 389 Biswasdih, Bhorandiha, Tikodih, Chunjka and Buriadih over an area of 105.153 hectares in the State of Bihar. Dear Sir,
In the above matter we beg to submit as follows for your kind consideration and necessary order :-
1. We applied for grant of mining lease to the State Government of Bihar vide our application dated 18.04.96., Along with the application mining plan was also submitted as required for approval. The coal produced from the proposed mining is exclusively for captive use. First of all it will be washed. Middling will be utilised for generation of power. The washed coal will be utilised for manufacturing of coke and the coke will be utilised for our Iron Foundry situated in the Industrial Area of Bokaro. 2. Vide our letter No.CTL/194/97-98/347 dated 24th November 1997 we submitted three copies of mining plan in 2 volumes each prepared by approved person Shri M.L. Dugar for the approval of Coal Ministry. 3. Vide our letter dated 15.04.98 written to Shri A. Banerjee, Director, Ministry of Coal, we reminded about the approval of the Coal Ministry and site clearance. 4. Vide our letter No. CTL/194/98-99/068 dated 9th May 1998 we applied for identification and allotment of block although it was not a vergin coal mining block but was an abandoned coal mine. 5. Now we understand that the State Government has recommended our case for grant of mining lease for the above abandoned mining area for the approval of the Coal Ministry. 6. We also understand that on reference made by Coal Ministry to the Coal India Ltd. (CIL) and Central Coalfields Ltd. (CCL) for their no objection in grant of mining lease, the said CIL and CCL have cleared the matter as desired. 7. At present the coal is being illegally mined every day in hundreds of tons causing law & order problem in the local area. The State Government is not getting any Royalty. Since the CIL has cleared the matter, State Government has recommended for approval of grant of mining lease as per M.M.R.D. Act 1957. We have also applied to Coal Ministry for identification and clearance of mining as required by the executive order of the Ministry, IT IS HUMBLY SUBMITTED THAT IDENTIFICATION AND ALLOCATION OF BLOCK MAY BE DONE SIMULTANEOUSLY TO AVOID ANY FURTHER DELAY IN THE MATTER.
We hope & trust, you will kindly pass necessary order in the matter and oblige.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 118 of 389 Thanking you,
Yours faithfully, For Castron Technologies Ltd.,
Sd/- Director
Mumbai Office: 84 Maker Chamers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 204 6235 Works : III/B-4, B-5, Bokaro Industrial Area, Balidih, Bokaro – 827014 Ph : 50211, 50111 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442”
94. The said letter was marked by Secretary Coal directly to Advisor (Projects) vide his endorsement dated 13.4.99 as under:
“Presented by Sh. P.K. Agarwalla, MP. He stated that an application/mining plan had already been submitted for mining of the abandoned mine. Now application for allocation has been made duly supported by CCL, CIL and the State Government. He requested for expeditious examination. Please examine and put up”. Sd/- (Sh. S.S. Boparai) Secretary Coal/13.4.99
Adv (P) ”
95. The Advisor (Projects) i.e. A-6 N.N. Gautam thereafter recorded a detailed note dated 16.4.99 (available at page 9-11 in D-38) opining that it may not be possible to allot this abandoned mine to M/s CTL. For a ready reference the said detailed note read as under:
Note dated 16.4.99 (available at note sheet page 9-11 in D-38)
“The observations of Secretary (Coal) on page 42/Cor. may be perused. M/s Castron Technologies Ltd. vide their letter dated 9th May, 1998 had written to Chairman of Screening Committee for identification of 105.153 ha of abandoned coal mining area of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 119 of 389 Brahmadiha block of CCL in the district of Giridih. Alongwith this letter, a brief note on this mine worked in the past and abandoned in 1916 was also enclosed. In this letter, the party has given the following details:
➔ Total thickness of seam – 6 metres ➔ Gradient – 1 in 6 ➔ Maximum quarrable depth – 60 metres ➔ Average stripping ratio (M3/Te) – 13.83 ➔ Annual mine production – 0.15 million tonnes ➔ Total capacity outlay – Rs. 22 crores ➔ Captial requirement for township, washery and power plant – Rs. 98 crores ➔ Estimated year of achieving trgeted capacity – 5th year ➔ Utilisation of coal produced from washing and captive use for power generation from rejects
2. The above proposal of M/s Castron Technologies Ltd. was referred to Coal India Ltd. And CMPDI for their examination and comments on 21st July, 1998.
3. This particular abaondoned mine/block is not included in the list of identified blocks of captive mining. This particular area is not a greenfield area and as such also does not conform with the guidelines adopted by the Screening Committee of the Ministry of Coal.
4. Coal India vide their letter dated 2.9.98 sent their comments which are given below: - ➔ No proper mine plans are available for this area. ➔ The entire worked out area is full of water. ➔ The entire area under consideration was worked extensively through several inclines and pits and to the best of their knowledge, the entire area has been goved out ecxcept few isolated patches mostly around entries and between incrop of the seam and mined out zone. ➔ The thickness of the seam is 2.5 metre and not 6 metre as mentioned by M/s Castron Technologies Ltd. ➔ The likely available reserve will be around 0.7 million tonnes and not 2.21 million tonnes as indicated by M/s Castron Technologies Ltd. ➔ The average stripping ratio will be very high around 1: 25 and not 1:13.83 as mentioned by M/s Castron Technologies Ltd.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 120 of 389 5. CMPDI vide their letter dated 17.08.1998 gave the following additional comments: - ➔ The mining of this block which has very limited available reserves (around 0.7 million tonnes) will be highly uneconomical. ➔ The proposal to extract barrier between abandoned mine and CCL lease-hold cannot be agreed in the interest of safety and is against the mining statues. ➔ The area identified does not conform to the guidelines issued by Ministry of Coal and as such cannot be considered as a captive block by the IPPs or any other entrepreneur. ➔ In their view, the request of M/s Castron Technologies Ltd. cannot be agreed to as it is not based on scientifically legal considerations.
6. The proposal of M/s Castron Technologies Ltd. did not include the details of the captive end use. During discussion with the representatives of M/s Castron Technologies Ltd. on 8 th September, 1998, this issue was brought to their notice. M/s Castron Technologies Ltd. Vide their letter dated 8 th September, 1998 wrote to Advisor (Projects) stating:
➔ After mining the coal and washing the same whatever middlings available will be utilised for the power generation. The washed coal available will be used for production of metallurgical coke in their coke oven unit.
➔ The party informed that the coal obtained after washing will be utilised for manufacturing of metallurgical coke directly by themselves or it will be converted in other coke oven plants of their company.
7. Taking into account all the information given above, the following emerged: -
➔ The mine was abandoned in 1916. After intensive extraction of coal in the area, no reliable reserves are available in the area. ➔ A very limited reserve of 0.7 million tonnes is available in coal stocks/barriers. ➔ The area was worked out and is full of water. The mining activity, if at all possible can only be carried out after dewatering the entire area. ➔ The party has suggested the annual production of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 121 of 389 0.15 million tonnes of coal after a construction period of 5 years. Taking the extractable reserves into account, the mine will hardly work for 4 to 5 years. ➔ The party has indicated that the overall investment for this project will be Rs. 120 crores. With such small reserve (practically negligible) and the life of the mine to be only 4 to 5 years, such huge investment does not appear to be viable at all. ➔ M/s Castron Technologies Ltd. have stated in this letter that middling of the washery shall be used for power generation but no details of the TPS have been given. The block is not in the identified list of captive mining. The block also does not conform to the guidelines adopted by the Screening Committee as captive block has to be in the greenfield area. As the block has not been allotted to the party by the Screening Committee, the question of approval of recognition of a competent person to prepare mining plan and submission of mining plan to the Standing Committee of Ministry of Coal under MMRD Act, 1957 did not arise. These facts were communicated to M/s Castron Technologies Ltd by Shri A Banerji, Director, MOC vide his letter dated 6.5.98. ➔ The application of M/s Castron Technologies Ltd is dated 9.5.98. Applications after 11.2.97 are not being considered for allotment of captive blocks.
8. This matter was discussed once again with CIL and CMD, CMPDI in Calcutta on 13.4.99. In this meeting, it emerged that this totally non-viable block with such limited reserves which is not included in the identified list of captive blocks should not be given for captive mining to M/s Castron Technologies Ltd.
9. In the light of above, it may not be possible to allot this abandoned mine to M/s Castron Technologies Ltd.
Sd/- 16.4.99 (N.N. Gautam) Advisor (Projects)”
(Emphasis supplied by me)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 122 of 389 96. The file thereafter moved to the desk of Additional Secretary A-5 P.K. Banerjee who forwarded it to Secretary Coal vide his signatures dated 22.4.99 and Secretary Coal forwarded the file to Minister of State for Coal Sh. Dilip Ray vide his signatures dated 23.4.99.
97. The record however shows that a letter dated 21.04.99 Ex. PW 14/E (available at page 49-51 in D-36) was also in the meantime submitted to A-6 N.N. Gautam by A-2 Mahendra Kumar Agarwalla on behalf of A-1 M/s CTL. In the said letter the cost of the proposed coal project and the power plant was scaled down by stating that the earlier proposal was based on new equipments but now they intend to shift their old equipments.
For a ready reference the said letter dated 21.04.99 of M/s CTL addressed to A-6 N.N. Gautam read as under:
Letter dated 21.04.99 Ex. PW 14/E (available at page 49-51 in D-36)
“No. CTL/194-99-2000/057 P.O. Nag Nagar, Dhaiya, Castron Dhanbad,Bihar – 826004 Technologies Ltd Dated : 21.04.1999 Ph : (0326) 203390, 207886 Fax: (91-326) 207455 To Shri N.N. Gautam, Advisor Coal, Ministry of Coal, Shastry Bhawan, New Delhi.
Ref. : Our letter CTL/194/99-2000/025, dated 12.04.99 addressed to Secretary, Coal and subsequent discussion with your good self on 20.04.99.
Dear Sir,
We are thankful to you for giving us time to discuss and clarify certain points to you in person on 20.4.99. In this connection we wish to clarify the following:-
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 123 of 389 1. Reserves of coal in RECA property has been assessed as 5.00 million tonnes. Taking the seam thickness of lower Kurharbari seams as 5.40 m. and area of 105 hectares (excluding barriers of CCL mines, the geological reserves work out to 5.4x105x100x100x1.4 tonnes i.e. 7.49 million tonnes. Taking the coal extracted out of the mine the coal reserves of 5 million tonnes are justifiable in assumption. The same can also be confirmed by old plan of the mine, which is available. The reserves taken for the purpose of mining lease are 2.215 million tonnes. While there is no reason to doubt the existence of the coal reserves, we agree that in working the reserves in coal pillars some difficulty may be faced but the same has been successfully done in several mines of Coal India by opencast mining. We are sure that reserves would be much more than our very conservative assumption of 2.215 million tonnes. 2. We propose to wash the coal by setting up a coal washery on non coal bearing area near the mining project and subsequently install a 10 MW power plant in phases, based on middling/rejects. Until bulk samples of coal are taken, it will not be possible to estimate the percentage and quality of coal middling and rejects. We propose to set up the power plant of 10 MW capacity in 2 phases near the coal washery. For this purpose we are already in possession of 3 Nos. steam power generation sets of 56 MW each (2 sets for installation and one spare). 3. We have engineering workshop at Dhanbad and a Steel Foundry having induction furnace and arc furnace which are lying idle at present due to erratic power supply. 4. We are enclosing herewith a photo copy of the performance budget of Ministry of Power for 95-96 which clearly specifies at page 45 para 1 that power plant exceeding 25 MW or investment of Rs. 100 crores requires clearance of CEA. As such it is not applicable in our case because our investment as well as capacity (10 MW) in much less than the specified limit. Apart from the above mentioned circumstances clearance from State Electricity Board is also not required, because power generated will be used by ourselves. We propose to relocate our foundry and engineering works near the power generation facility. 5. We have applied for grant of mining lease for working the reserves left behind in the abandoned coal mine abandoned in 1916 (not included in list of mines in the Nationalization Act) as per MMRD Act, 1957 vide our application dated 18th April, 96. Copy of form-'D' for receipt of mining lease application is enclosed. Since then we have been pursuing the matter vigorously. We understand that the State Govt. after processing the application has forwarded the Coal Ministry for approval of grant of mining lease vide letter No. 1395, dated 27.03.99. 6. By an executive order, Coal Ministry formulated a policy for allocation of blocks. We also understand that in few cases, allotment of block has been made other than those listed in the list of released blocks. In this connection it is submitted that although not required we have applied for release of this abandoned mine vide our letter No CTL/194/98-99/068 dated 09.05.98, as pointed by Coal Ministry in course of discussion to meet the requirement of formality. In this connection our letter addressed to Secretary Coal letter No. CTL/194/99-2000/025, dated 12.04.99, may please be referred, wherein it has been requested that in case of approval of grant of mining lease the formality of allocation of block if required may be completed simultaneously to avoid unnecessary delay.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 124 of 389 7. The area proposed for grant of mining lease has been lying idle since 1916 and as such it is as good as a green field area. No infrastructure has been built in this area by CCL who have indicated no intention to work this area because such small reserve can not be worked by public sector company like CCL, economically. Even now, we understand working mine of CL at present in Giridih is incurring heavy financial loss every year. It may not be out of place to mention that if the lease is not approved it will encourage illegal mining already going on causing loss to the exchequer and creating loss of life and other law and order problem to life of people. 8. We prepared our investment projection based on reserves theoretically calculated and also on the basis of cost of purchase of all new equipments. In view of the liberalisation of the economy and to be able to compete without efficiency of the imported coal at economical level we had to revise our estimation after careful consideration, detail of which is given below: 9. Investment Coal Project Investment in Rs. Infrastructure (including land acquisition) 4 Crore HEMM required for OC mining (on Hire purchase or on lease basis if required) 8.5 Crore Coal Production and OB account 3 Crore Contingency 1 Crore Washery (capacity of 1000 Mt tonnes per day 4 Crore Total 20.5 Crore
As a matter of fact we have an engineering workshop at Dhanbad, and all other infrastructure which has designed erected and commissioned a coal washery in our sister concern. Further this washery is working with capacity of 60,000 tonnes of raw coal per month. 10. Power Plant Three turbines and alternaters (3 Nos. of 5 MW each) already acquired in working condition 75 Lakhs Boiler and other accessories 3 Crores Total 3.75 Crores
11. The previous estimation of investment was based on all new equipments. We have also in our mind to put up a irrigation project from the water proposed to be pumped out from the mine for which it was expected that State Govt. will co-operate with us. Now it is realized that State Govt. is not interested in utilisation of the water to be pumped out and channelise through irrigation project nor they are prepared to give financial assistance for use of water at this stage. However discussion is going on and if the project materialises then only the quantum of finance projected by us may be required at a later date. The high investment shown previously was in expectation of the approval of irrigation project by the State Govt. at any early date. We hope and trust that in view of the circumstances stated above and in the light of clarification of all the points raised in the discussion, Coal Ministry will accord its approval to the state govt. as per MMRD Act 1957 for grant of mining lease at the earliest possible. Thanking you,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 125 of 389 Sincerely yours, For CASTRON TECHNOLOGIES LTD. Sd/- Director. Encl : as stated above.
Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 2046235 Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442”
98. Yet another letter dated 21.04.99 Ex. PW 14/E-1 (available at page 94 in D-36) was also submitted to A-5 P.K. Banerjee by A-1 M/s CTL under the signatures of A-2 Mahendra Kumar Agarwalla. Vide the said letter early action on their application was requested.
For a ready reference, the said letter read as under:
Letter dated 21.04.99 Ex. PW 14/E-1 (available at page 94 in D-36) “P.O. Nag Nagar, Dhaiya, Castron Dhanbad,Bihar – 826004 Technologies Ltd Ph : (0326) 203390, 207886 Fax: (91-326) 207455 Ref.No. : CTL/194/99-2000/058 Dated : 21.4.99
To, Additional Secretary, Coal Department of Coal Ministry of Coal Shastri Bhawan New Delhi
Dear Sir,
We have applied for mining lease for Brahmadiha Coal project in Giridih Coal Field of Bihar on 18.4.96 under MMDR Act 1957. The Coal reserves proposed to be mined in lease area applied by us are reserves left in the mine, which got closed in 1916. This mine was not included in the list of mines given in the coal nationalization acts. Since submitting our application we have been vigorously pursuing the matter. Now the State Govt. after processing our application has forwarded the same to Ministry of Coal for according approval. Coal India has also
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 126 of 389 given clearance for this lease as CCL does not want to work this area. As pointed by Ministry of Coal. We also made a request for allocation of mine to us to meet the requirement of the executive order for allocation of mine/block passed by Ministry of Coal. As considerable time has elapsed since we submitted the lease application, we have made a request vide our letter dated 12.4.99 addressed to secretary coal to complete the formality by Ministry for allocation of block and approval of our mining lease simultaneously to save time. We have also discussed the matter with Shri N.N. Gautam, Advisor Coal to clarify all queries, copy of the letter addressed to Shri Gautam in this regard is enclosed. We request you for early action on our application. Thanking you
Sincerely Yours, For Castron Technologies Limited Sd/- Director Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 2046235 Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442”
99. Subsequent thereto Sh. P.K. Agarwalla wrote another letter dated 26.04.99 Ex. PW 4/DX-2 to Secretary Coal, Sh. S. S. Boparai to consider and finalise their matter at the earliest possible.
100. The record however shows that a letter dated 21.4.99 Ex. P-14 available at page 74 in D-36 was also submitted by CTL to A-4 Dilip Ray Minister of State for Coal on 12.05.99. [Though the letter was originally addressed to Additional Secretary, Coal, Department of Coal but the said words were cut and were replaced by the words “Dilip Ray, MOS(Coal)]. The said letter carries endorsement in the hand of PW-4 Bimbadar Pardhan, PS to MOS (Coal) dated 12.5.99 directing it to be placed in file. At the top he also mentioned in his hand the words “submitted by hand personally”.
101. The said letter was also marked to Secretary Coal by A-4 Dilip Ray, Minister of State for Coal vide the following endorsement at note
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 127 of 389 sheet page 11 in D-38:
“In the light of the representation received from M/s Castron Technologies Ltd., the case may be re-examined” Sd/- (Dilip Ray) MOS(C)” 102. The file was thereafter received in the office of Secretary, Coal on 13.05.99 who further marked it to A-5 P.K. Banerjee, Additional Secretary (Coal) on 14.05.99, and who further marked the file to Advisor (Projects) i.e. A-6 N.N. Gautam. The file thereafter got marked to Director (CPAM) with the endorsement “examine in file” by A-6 N.N. Gautam. Director (CPAM) thereafter marked the file to Under Secretary (CPAM) and who further marked it to Section Officer (CPAM).
103. However, the matter in the file despite having been marked to Section Officer (CPAM) was not processed by the section and instead the record shows that A-6 N.N. Gautam himself recorded a detailed note in the file, without the file having been processed or put up before him by the section concerned. However before I advert on to said aspect, it will be pertinent to mention that there exists one more communication dated 18.05.99 of M/s CTL (available at page 75-76 in D-36) addressed to A-6 N.N. Gautam on record and it refers to a meeting which representative of M/s CTL had with A-6 N.N. Gautam on 18.05.99 itself and it further sought to provide explanation to some of the issues raised by A-6 N.N. Gautam.
For a ready reference letter dated 18.05.99 read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 128 of 389 Letter dated 18.05.99 Part of file Ex. PW 4/DX-2(Colly) [ available at page 75-76 in D-36]
“P.O. Nag Nagar, Dhaiya, Castron Dhanbad,Bihar – 826004 Technologies Ltd Ph : (0326) 203390, 207886 Fax: (91326) 207455
Ref: CTL/194-99-2000/058 (D) Date: 18-May-99
Shri N.N. Gautam Adviser (Projects) Ministry of Coal New Delhi.
Sub:- Approval of the Central Government for Grant of Mining Lease of abandoned Coal Mine for captive use of washing, generation of electricity in Giridih District in Mouzas, Biswasdih, Bhorandiha, Tikodih, Chunjka and Buriadih over an area of 105.153 hectares in the State of Bihar.
Ref:- letter to the Secretary, Coal, no-CTL/194/99-2000/025, dated 12.04.99 and subsequent letter to your goodself no. CTL/194/99-2000/057, dated 21.04.99
Dear Sir,
Please refer to our above quoted two letters (copies enclosed). In the above matter our adviser Shri M.L. Dugar met you o 20.04.99 and clarified the points raised by you. In detail, these points were also clarified vide our letter no. CTL/194/99-2000/057, dated 21.04.99 (copy enclosed). In course of our meeting today following issues were raised : 1. What will be the use of the washery after exhaustion of coal lasting for a period of 10-12 years? 2. What will be the use of washed coal? On the above mentioned query our reply is as follows:- 1. As intimated earlier we have a running washery, major part (90%) of which is of fabricated material at our sister concern. But it is out of use at present due to lower demand of met coke on account of dumping of coke in India. The washery will be shifted near to the proposed mining site. After exhaustion of coal this can be again shifted to a new source of coal supply according to the prevalent circumstances at that point of time. Since this washery was in use for the last couple of years, the depreciated value of this washery is very low.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 129 of 389 2. Regarding use of washed coal as stated earlier it is proposed to be used for manufacturing of met coke for our unit in Bokaro Industrial Area. This coke will be manufactured at a unit for which industrial license was granted by Coal Ministry. The production capacity of the said coke oven unit is lying idle in view of the uneconomical market condition already stated above. We hope and trust this will clarify all the issues and you will be kind enough to recommend our case as proposed by the State Government.
Thanking you,
Sincerely yours, for Castron Technologies Ltd. Sd/- Director. (Emphasis supplied)
Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 2046235 Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442”
104. The relevant note sheet pages in file Ex. PW 4/DX-1 (Colly) (D-38) where letter of M/s CTL pursuant to directions of A-4 Dilip Ray, Minister of State for Coal for re-examination was processed, however shows that even though the said letter of M/s CTL was marked to Section Officer (CPAM) but it does not contain signatures of either the Section Officer or any other official of CPAM section and on the very next note sheet pages i.e. at pages 12-14 their exists a detailed note dated 20.05.99 (available at note sheet page 12-14 in D-38) under the signatures of A-6 N.N. Gautam wherein after reproducing all the development which had taken place in the case, he proposed that clearance from CIL could be possible and at the end of the detailed note he observed that comments of CIL may be obtained and also that the proposal can be considered in the next meeting of the Screening Committee to be held soon. For a ready reference the said note dated 20.5.99 of A-6 N.N. Gautam read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 130 of 389 Note dated 20.05.99 (Available at note sheet page 12-14 in D-38)
“M/s Castron Technologies Ltd's earlier proposal of May 98 for identification of 105.153 ha of abandoned coal mining area of Brahmadiha block of CCL in the district of Gridih was examined and not found feasible as the total investment was shown to be Rs. 120 crores for a production level of 0.15mtpa giving a very high specific investment of Rs. 8000 per tonne of coal. The earlier proposal was also lacking in detail as it did not include the details of the captive power plant where the washery middlings were supposed to be utilised. The block is not being in the identified list of captive mining and also not in the greenfield area were the other factors not fulfilling the requirement necessary for allocation of the block for captive enduse. M/s Castron Technologies Ltd. On 12.5.99 represented their case to MOS (C). In the light of the representation received from the party, MOS(C) directed to re-examine the case (page- 11/N). In their representation the party have clarified certain issues as regard to setting up of washery, details of the captive power plant, investment in the project etc. Based on these clarifications/revision of the proposal, the case has been re- examined and the following points emerged.
Though the mine was abandoned in 1916, according to the party the reserves estimation of 2.215mt is on the conservative side. The life of the mine @ 0.15mtpa production will work out to about 15 years. The block could not be included in the captive mine list as it being an abandoned mine. However, a clearance from CIL could be possible. The proposed washery would have to be provided coal from some other source after 15 years or the washery would need to be dismantted/re-located. The investment in the mine, washery and power plant has been reworked and will be of the order of Rs. 24.25 Crores. The power plant will have a capacity of 10MW to be achieved in 2 phases of 5MW each. Three steam power generating units of 5MW each (2 sets for installation and one spare) are available with the party and shall be shifted to the site. At a production level of 0.15 mtpa and 100% of the coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 131 of 389 being fed to the washery, the middlings available may only be sufficient for a 5MW capacity power plant and not 10MW as proposed by the party. The party has engineering workshop at Dhanbad and a steel foundry having induction furnace and arc furnace which are lying idle due to erratic power supply.
These facilities are proposed to be relocated near the proposed power generation facility. The mine is an abandoned mine and there is no working mine belonging to CCL within the vicinity of 2.5km. CCL does not have any proposal to work in this area and it will be in the national interest to exploit these reserves rather than letting them to be lost forever or allowing them to be left for unsafe illegal mining activity. The party has clarified that the previous estimation of investment was based on all new equipments and also included an irrigation project based on the water to be pumped out of the mine. This has not been considered in the revised proposal as the State Govt. have not shown interest for the time being. However, before any coal is produced from this area, large scale pumping of water is inescapable and party will have to incure expenditure in dewatering. In the light of the clarifications/revisions in the earlier proposals of May, 98 now given by the party specially in respect of feasibility of the project in view of exceptionally high investment, captive power plant and use of power generated and the adequacy of mineable reserves to sustain activity for atleast 15 years, it may be considered by the Screening Committee to allot this abandoned mine to M/s Castron Technologies Ltd subject to the following: i) The application of the party for allocation of a block is of 9.5.98 which is after 11.2.97 - a date on which new coal policy was announced. Since then a decision has been taken in MOC to consider cases of allotment of captive blocks for applications received after 11.2.97. This case can now be proceeded with. ii) Hydrogeological studies to be carried out by the party with a view to see that dewatering of this mine does not seriously affect the hydrogeological balance of area. iii) Extraction of coal barrier between the abandoned mine
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 132 of 389 and CCL lease-hold shall not be permitted. The representative of M/s Castron Technologies Ltd met the Adviser (Projects) on 18.5.99 and handed over a letter dtd. 18 Th May, 99 giving more clarifications on its earlier proposal. It has been clarified by the party that the washery will be relocated after exhaustion of coal reserves in the mine. They also clarified that the washed coal will be used for manufacture of met coke in their coke oven unit presently lying idle for use in another unit of their's in Bokaro industrial area. We may write to CIL to send their comments in the light of above position. If this is approved, the proposal can be considered in the next meeting of the Screening Committee to be held soon. Sd/- 20.05.99. (N.N. Gautam)”
(Emphasis supplied by me)
105. The file was thereafter put up before Additional Secretary, Coal i.e. A-5 P.K. Banerjee who approved the said note of A-6 N.N. Gautam by way of following endorsement dated 31.5.99:
“As proposed I hope the size of the mine/reserves meet the criterion of minimum size decided recently in another file relating to policy issues of captive coal mining blocks allotment” Adv. (P) Sd/- 31/5/99”
106. The file thus again came to be marked to Advisor (Projects) i.e. Sh. N.N. Gautam who thereafter recorded a note dated 3.6.99 [available at note sheet page 14 in file Ex. PW 4/DX-1 (Colly) (D-38)] in response to the query raised by Additional Secretary (Coal) P.K. Banerjee (A-5) in his endorsement dated 31.05.99. He once again proposed that the matter may be put up for consideration of Screening Committee.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 133 of 389 The note dated 03.06.99 read as under:
Note dated 3.6.99 [available at note sheet page 14 in file Ex. PW 4/DX-1 (Colly) (D-38)]
“As has been mentioned on page 10/N, this mine in question was abandoned in 1916 when the major reserves of this mine were exploited. As per the technology available for working underground deposits in the early part of this century, some mineable reserves may be left in the mine which is now full of water. The remanant reserves are estimated to be .215 million tonnes. These reserves are very roughly estimated based on some of the old plans available. These reserves have been presumed to be lost for ever and no large scale mining is possible for these reserves. The party has applied for working out these mineable reserves by opencast mining. The party has proposed to have an annual production of 0.15 million tonnes from this mine and with this production, considering the estimated reserves given above by the estimated reserves may last for about 15 years. 2. CCL/Coal India has no programme of working these reserves at any point of time. This abandoned mine cannot be a part of the list of captive mining blocks. 3. As per recent guidelines, captive block to be worked out by opencast method is to have a minimum production of 1.0 million tonnes per annum. The mine being an abandoned mine and having very limited reserves does not get in the criteria of a captive block having a minimum output programme of 1.0 million tones per annum. Either the reserves are permitted to be exploited by private party with a small production to the tune of 0.15 million tonnes as proposed by the party or the reserves will never be exploited at all. 4. These details have been given in paras 1 and 2 of the notes at page 12/N. The mine being a abandoned mine, strictly speaking does not fall within the guidelines of the captive block for allotment. Abandoned mines have not been considered for exploitation. It is, therefore, necessary to view the matter in the light of the facts mentioned above. 5. The party has informed vide their letter dated 12th April, 1999 that they have applied for grant of mining lease to the State Government of Bihar on 18.4.96 (p42/Cor.) 6. If agreed, the matter may be put up for consideration of the Screening Committee with all the facts mentioned above. For orders.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 134 of 389 Sd/- (N N Gautam) Adv (Projs) 3.6.99 Addl. Secretary Advisor (P) As proposed Sd/- P.K. Banerjee Additional Secretary.”
(Emphasis supplied by me)
107. The said proposal of A-6 N.N. Gautam was approved by A-5 P.K. Banerjee vide his signatures dated 4.6.99 and the file was marked back to Advisor (Projects) MOC i.e. A-6 N.N. Gautam. There however exists on record yet one other communication dated 02.06.99 made by M/s CTL (available at page 92-93 in D-36) to Additional Secretary, Coal but the same as per endorsement on the letter appears to have been received in the office of Additional Secretary, Coal on 07.06.99. For a ready reference the said letter read as under:
“P.O. Nag Nagar, Dhaiya, Castron Dhanbad, Bihar – 826 004 Technologies Ltd. Ph : (0326) 203390, 207886 Fax: (91326) 207455 Ref. No- CTL/194/99-2000/059 Date- 02.06.1999 Additional Secretary Ministry of Coal, Shastri Bhawan, New Delhi. Sub:- Approval of the Central Government for Grant of Mining Lease of abandoned Coal Mine for captive use of washing, generation of electricity in Giridih District in Mouzas, Biswasdih, Bhorandiha, Tikodih, Chunjka and Buriadih over an area of 105.153 hectares in the State of Bihar. Ref: letter to your goodself, no- CTL/194/99-2000/058, dated 21.04.99
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 135 of 389 Dear Sir. In the above matter we have to submit as follows: - 1. The mine was abandoned in 1916 when technology for de-watering and mining was little known. The foreign company, which was working the mine, was least concerned about the conservation of coal. The price of the coal was too low to be economical at that point of time. 2. It is becoming difficult for Indian Industry to compete with the onslaught of dumping of coal and coke in India at a price below the cost of production in the originating country. 3. In these circumstances we made a lot of research to find out the resources which can be exploited in the changed circumstances of advanced technology and with modern equipment to tackle the problem of make of water. This proposal has been prepared by a senior retired mining engineer Shri M.L. Dugar who had been a Director in CMPDI and had also worked in various capacities in the subsidiaries of Coal India Ltd. 4. The reserve of the left out coal is more than 7 million tonnes but to be very conservative, we took a reserve of 2.215 million tonnes, which at least according to our calculation can economically be mined. It may be more and not less. 5. As a matter of fact on a reference made by Coal Ministry to Coal India Ltd. (CIL) and in turn a reference made by CIL to CCL, it was reported to your Ministry that they are not interested in working such a small reserves and the project in question is far away from any of the mine being worked in Giridih Coal Fields. 6. According to the provisions of MMRD Act, an application has been made by us for grant of mining lease. This said application has been recommended for approval as required according to section 2 of the MMRD Act. 7. This is not a greed field area as such question of allotment of block in this case in our opinion does not arise. To meet the technical formalities we have already applied for allotment of mine to the Screening Committee. As such in case if it is required this technical formality may please be complied with along with the consideration of the approval of grant of mining lease as requested by us earlier also. We hope and trust your goodself will be kind enough to look into the matter and do the needful at an early date. Thanking you, Sincerely yours, For Castron Technologies Ltd. Sd/- Director
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 136 of 389 Copy forwarded to Shri N.N. Gautam, Advisor (Project), Ministry of Coal, New Delhi with a request that our application may be considered and finalised at the earliest.
Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400 021, Ph : 285 2736 Fax: (022) 204 6235 Works : III/B-4, B-5, Bokaro Industrial Area, Balidih, Bokaro – 827 014 Ph : 50211, 50111 Regd. Office : 8 Waterloo Street, Calcutta – 700 069, Ph : 248 9975, 248 6442 (Emphasis supplied by me]
108. Subsequently, Additional Secretary, Coal i.e. A-5 P.K. Banerjee who was also Chairman, Screening Committee gave his approval to holding of 14th meeting of Screening Committee on 18.6.99 and 19.06.99 in a separate MOC file Ex. P-131 (colly) (D-62).
109. Accordingly an agenda note for the said meeting Ex. PW 14/D-13 (colly) (available at page 33 in D-62) also came to be prepared and wherein the following facts were mentioned as regard M/s CTL:
Agenda note Ex. PW 14/D-13 (available at page 33 in D-62)
9 M/s Washed 2x5 0.15 Identification This is a mine which was abandoned Castron Coal for MW mtpa of 105.153 in 1916 whereabout 2.215 mt. of Techno- Metallurgical raw hec. of reserves are likely to be available in logies coke coal abandoned the remanent coal pillars. The Ltd. manufacture coal mining abandoned mine is full of water. This middlings of area of being an abandoned mine, is does power Brahmadiha not figure in the list of identified general in project, blocks for captive mining. These CPP Distt. reserves are not proposed to be Giridih, exploited by CCL at any point of time. Bihar for As per the recent guidelines, captive captive block to be worked out by opencast mining. method is to have a minimum production of 1 mt. Being an abandoned mine with very small reserve this does not fit in the criteria of a captive block and the available reserves would go unexploited. Here is a proposal for exploitation of these reserves at the rate of 0.15 mtpa. Screening Committee may consider allotment of the abandoned mine in view of conservation of coal or otherwise.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 137 of 389 110. The case of M/s CTL was thereafter considered by the 14th Screening Committee in its meeting held on 19.06.99. The meeting of 14th Screening Committee was chaired by A-5 P.K. Banerjee and beside other officers of MOC, A-6 N.N. Gautam was also present over there as Member Convenor of the Committee. On behalf of CIL, Sh. N.K. Sharma, Director (Technical) (PW-15) and Sh. D.K. Biswas, Chief General Manager (CP) were present. Sh. S.K. Verma, Chairman-cum-Managing Director represented CMPDIL (PW-6) in the meeting and Sh. B. Akala, Chairman-cum-Managing Director, CCL (PW-7) alongwith Sh. R.K. Chaudhary, General Manager represented Central Coalfields Ltd in the said meeting. Presentation on behalf of M/s CTL was made before the Screening Committee by one Sh. M.L. Doogar, Advisor and RQP of M/s CTL. In the said meeting the Screening Committee decided to allot the said abandoned coal mining area of Brahmadiha block in Giridih District to M/s CTL, subject to certain conditions as were mentioned in the minutes. The allotment was made subject to relaxation of guidelines as were earlier approved in MOC regarding allotment of opencast captive blocks. The said note of discussion of 14th Screening Committee Ex. PW 15/DX-4 (Colly) (available at page 150-151 in D-62) was subsequently prepared and approved in MOC. As regard M/s CTL the following facts were recorded over there:
Part of Record notes of discussion of 14 th Screening Committee (available at page 150-151 in D-62)
“16. M/s Castron Technology Ltd. The details of the proposal were given by Adviser(Projects). He stated that the party has requested for the allotment of 105.153 ha. of abandoned coal mining area of Brahmadiha block of CCL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 138 of 389 in the district of Giridih which was abandoned in 1916 and is now full of water. The extractable reserves available in the mine are roughly estimated to be 2.215 million tonnes in the remanent pillars and no large scale mining is possible for these reserves. The party proposes to extract these reserves by opencast mining @ 0.15 million tonnes per annum. With this production the estimated reserves would last for about 15 years. The representatives of CCL and CIL informed the Committee that CCL/Coal India has no programme of working these reserves at any point of time and according to them there is no working mine belonging to CCL within the vicinity of 2.5km. On a query on end use of coal, the representative of the party informed that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke in their coke oven plant presently lying idle for use in another unit of their's in Bokaro industrial area. It was clarified by the party that the washery will be relocated after 15 years when the coal reserves in the mine are exhausted. The middlings produced during washing are proposed to be utilised for generation of power in their 2x5MW CPP which they would be setting up in two phases of 5MW each. The Committee noted that as per recent guidelines for opencast captive block, the mine does not fit in the criteria of a captive block. It further noted that these reserves are either permitted to be exploited by a private party or the reserves are allowed to be lost forever/unsafe illegal mining. The Screening Committee after detailed deliberation and in view of conservation of coal decided to allot 105.153Ha. of abandoned coal mining area of Brahmadiha block in Giridih District, CCL subject to the following condition : i) Hydrogeological studies to be carried out by the party in consultation with State Ground Water Board with a view to see that dewatering of this mine does not seriously affect the hydrogeological balance of area. ii) Extraction of coal barrier between the abandoned mine and CCL lease-hold shall not be permitted and in case dams in connection through the barrier are found damaged shall be effectively reparied. iii) All precautions will be taken to ensure that fires do not break out due to dewatering of the area. If any fire does break it shall effectively be dealt by the party. iv) All mining operations shall be carried out with due
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 139 of 389 approval of DGMS and all provision of law shall be complied with. The above will be subject to relaxation of guidelines by Ministry of Coal regarding allotment of blocks with minimum extraction of 1.00 mtpa”.
111. The draft minutes of 14th Screening Committee titled “Record notes of discussion” were put up for approval by PW-14 Ms. Neera Sharma vide her endorsement dated 17.7.99 at note sheet page 27 in MOC file Ex. P-131 (colly) (D-62). When the said file reached the desk of A-5 P.K. Banerjee, Additional Secretary, then he observed that orders for relaxation qua M/s CTL should be obtained in the relevant file. He accordingly marked the file to Advisor (Projects) and who vide his endorsement dated 20/7 directed that the corrected minutes, as directed by Additional Secretary, may be put up and that the file for approval as regard M/s CTL be also put up. Subsequently, Sh. R.S. Negi vide his note dated 30/7 had put up the corrected minutes while also stating that the case relevant to M/s CTL shall be put up on file. However in the meantime PW-14 Ms. Neera Sharma put up a note dated 9.8.99 that as minutes of 14th Screening Committee meeting held on 18/19.6.99 have already been sent to appropriate agencies so if approved the relevant extracts of the minutes may also be sent to individual private parties. As regard M/s CTL it was however stated that decision on relaxation of guidelines by MOC is under consideration in the relevant file and the same would be intimated to the parties separately.
112. In the meantime the case of M/s CTL as was approved by 14th Screening Committee was processed in the relevant file by Sh. R.S. Negi
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 140 of 389 vide note dated 22.07.99 [available at note sheet page 15-16 in D-38]. In the upward movement of the file Under Secretary, CPAM Section, MOC observed that as the policy was approved by MOS (C) so the relaxation also should be at the level of MOS (C). Accordingly, the file after being routed through the desk of senior officers including, Sh. T.K. Ghosh, Director, A-6 N.N. Gautam, Advisor (Projects) MOC/Member Convenor and Sh. S.S. Boparai, Secretary (Coal) went to the desk of A-4 Dilip Ray, the then Minister of State for Coal. A-4 Dilip Ray thereafter vide his signatures dated 23.08.99 approved the recommendation of 14th Screening Committee and thereby permitted relaxation of the guidelines as were earlier stipulated for open cast mining. The said approval thus facilitated allotment of impugned coal mining area to be made in favour of M/s CTL in terms of the recommendation of 14th Screening Committee.
113. Accordingly pursuant to the relaxation of guidelines as approved by MOS(C), the allocation of Brahmadiha coal block to M/s CTL was communicated vide letter dated 01.09.99 by Sh. B.L. Dass, Under Secretary, MOC. Vide another letter dated 06.09.99 issued under the signatures of Secretary (Coal) Sh. S.S. Boparai, information about the allotment made in favour of M/s CTL was also communicated to Sh. P.K. Agarwalla, Member of Parliament, who in fact was aggressively pursuing the case of M/s CTL.
[Note: The events/circumstances post issuance of allocation letter shall be dealt with at a later stage of the judgment.]
114. However, before I advert on to discuss various aspects of the prosecution case in the light of aforesaid facts and circumstances, it will
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 141 of 389 be also pertinent to mention certain other proceedings which were also found to have been carried out in file Ex. PW 32/S-2 (Colly) (D-103) of CMPDIL.
G (viii) Some Additional Proceedings in CMPDIL
115. The file Ex. PW 32/S-2 (colly) (D-103) of CMPDIL also shows that a note dated 25.4.99 was recorded therein by PW-6 Sh. S.K. Verma, the then CMD, CMPDIL stating that on 21.4.99 certain papers were given to him by A-6 N.N. Gautam, Advisor (Projects), MOC and Member Convenor in New Delhi stating it to be a draft letter which Sh. Agrawalla proposed to sent to him. Sh. S.K. Verma accordingly marked the said letter to Director (P&D), to give his comments on the various issues as were brought out in the draft letter.
116. The note sheet Ex. PW 5/F further shows that the said draft letter was marked to GM, PPD by PW-5 Krishan Kumar Khaidya, Director (P&D) with the endorsement “Pl. study & discuss”. Subsequently Sh. B.D. Rudra, the then GM, PPD submitted a report vide endorsement dated 20.5.99 and the said note of Sh. B.D. Rudra was accordingly forwarded to CMD, CMPDIL Sh. S.K. Verma by PW-5 Sh. K.K. Khadiya. However when the file reached the desk of PW-6 Sh. S.K. Verma on 22.6.99 then he recorded on the said note sheet that the said issue has already been discussed in the last meeting of the Screening Committee meeting held on 18/19.6.99. For a ready reference the said note sheet Ex. PW 5/F (available at page 47 in D-103) read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 142 of 389 Note dated 25.05.99, Ex. PW 5/F [Available at page No. 47 in (D-103)]
“No. CMD/SECY/003/127 Dated. 26-4-99 No. PPD/147 7.5.99 Sub: Allotment of blocks in Giridih CF. (Mr. Agrawala) MP.
Enclosed papers were given to me by Sh. N.N. Gautam Adv. (P), MOC at N. Delhi on 21.4.99. Earlier, CMPDI has opined against the allotment of this block to the private parties. D(P&D) may kindly see the draft letter. which Sh. Agrawala proposes to send to him. Do we have any comments, on the various issues brought out in this draft letter? Secondly, if the parties pumps out the water to work the deposit, is this lowering of water level will cause any adverse impact on CCL's existing operations. Can it reduce the water availability to CCL, during summer months? Sd/- S.K. Verma 25.4.99 D (P & D) Pl. Study and discuss on 11/5 at 10. 00 AM.
Sd/- (K.K. Khadiya) 7/5 GM(PPD) The matter was discussed on 11/5. Visited RI-III and a report prepared on that basis is enclosed. Sd/- (B.D. Rudra) 20/5 Director T/P&D) Note enclosed. Sd/- (K.K. Khadiya) 20/5 CMD This has already been discussed in the last meeting of the Screening Committee meeting held on 18/19.6.95. Sd/- (S.K. Verma) 22.6.99
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 143 of 389 D(P&D) Sd/- (K.K. Khadiya) 23/6 GM(PPD) Sd/- (B.D. Rudra) 24/6” (Emphasis supplied by me)
Accordingly the report of Sh. B.D. Rudra Ex. PW 5/F-1 was not further acted upon by PW-6 S.K. Verma.
117. Before adverting further, it will be appropriate to also refer to the guidelines as were approved in MOC regarding allotment of captive coal blocks for opencast mining and under ground mining as has also been referred to in the minutes of 14th Screening Committee.
(H) Guidelines laid down in MOC for allotment of captive coal blocks. 118. The MOC file Ex. P-130 (Colly) (D-81) shows that pending consideration of some proposed amendment in CMN Act, 1973, applications received after 11.02.97 for allocation of captive mining blocks were not being considered. One of the prime reason for not considering all such applications received after 11.02.1997 was that a policy was being considered in MOC that for allocation of captive coal blocks an advertisement be issued for inviting applications from interested companies. However subsequently it was decided that for the time being the existing system of allotment of coal blocks may be continued. Various notings of MOC officers in file Ex. P-130 (Colly) (D- 81) thus show that pursuant to notings made by various officers of MOC including A-6 N.N. Gautam Adviser (Projects) dated 27.01.99 and that of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 144 of 389 A-5 P.K. Banerjee, Additional Secretary, Coal dated 01.02.99, the matter came to be put up before Secretary, Coal, Sh. S.S. Boparai who vide a detailed note dated 03.02.99 (available at note sheet page 8 in D-81), proposed that as the amendment in CMN Act, 1973 will come in its own time and it may not affect the present policy so the existing policy of allocation of captive coal blocks may be continued instead of issuing an advertisement inviting applications for allotment of captive coal blocks. He thereafter marked the file to Minister of State for Coal and who vide his signatures dated 10.02.99 approved the note dated 03.02.99 of Secretary Coal. It was thus decided in MOC to continue with the existing system of allotment of coal blocks. Accordingly, the 17 applications which were received after 11.02.97 were also decided to be considered in accordance with the existing policy being followed for allocation of captive coal blocks.
119. The file Ex. P-130 (Colly) (D-81) thereafter came to be put up before Joint Secretary, Coal, Sh. J. Hari Narayan (PW-11) for his views on the said 17 applications received in MOC after 11.02.1997. He accordinly examined all the said 17 applications as were received after 11.02.97 and recorded a detailed note dated 10.03.99 in the file. (available at note sheet pages 15-20 in D-81). As regard the applications of M/s CTL and M/s Central Utilities and Investments Ltd. who intended to establish washeries, he observed inter-alia in his note as under:
Note dated 10.03.99 (available at page 15-20 in D-81)
“3.5 Washery Sector The June, 1993 amendment to the Nationalisation Act was done on the basis of a Cabinet decision taken in its meeting
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 145 of 389 held on 5.5.92. In this meeting, the Cabinet considered a Note dated 23.4.92 from the MOC. The proposals in the MOC Note dated 23.4.92 for the Cabinet were, inter-alia, the following : i) Allowing private sector participation for coal mining for captive consumption in power generation and other end-uses which may be notified by the Government from time to time. ii) Allowing private sector to invest in, install and operate coal washeries for the purpose of washing of coking and non-coking coal. 3.5.1 The extract of the Cabinet decision in its meeting held on 5.5.92 is given below : “The Cabinet considered the note dated 23.4.92 from Ministry of Coal and approved the proposals contained in para 10.1 thereof. It was further decided that the users should be enabled to own the washeries through located in the coal mine area”. 3.5.2 While suggesting a Bill for the June, 1993 amendment to the Nationalisation Act, the Department of Legal Affairs, Ministry of Law opined that no separate amendment (other than that was in the 1993 Bill) is needed in the principal Act for allowing the private sector to set up coal washeries. 3.5.3 We have not so far allotted any captive coal block for the washery sector. Since “washery” is also included in the definition of “mine”, setting up of washeries in the private sector is facilitated by the June, 1993 amendment but not for extraction of the coal by the washery owners. Before the June, 1993 amendment, setting up of washeries by private companies was not possible. Moreover, washed coal can be sold in the open market. The unrestricted end-uses for the washed coal go against the spirit of captive consumption for specified end-uses in the June, 1993 amendment. Therefore, it is not possible to allot captive blocks to M/s Castron Technologies Limited and M/s Central Utilities and Investments Limited, for coal washing.” (Emphasis supplied)
120. The file was thereafter marked by him to A-6 N.N. Gautam, Advisor (Projects) and Member Convenor and who vide his note dated 11.03.99 marked it to Additional Secretary, Coal. Subsequently vide a detailed
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 146 of 389 note dated 16/17.03.99, A-5 P.K. Banerjee, Additional Secretary, Coal marked the file to Secretary Coal. As regard the 17 new applications so received after 11.021997, A-5 P K Banerjee interalia observed as under:
“6. Another issue meriting consideration is that the 17 new applicants requirement of coal is for rather small volumes which on the face of it can be met by our coal companies. And linked with it is the question of conservation and optimum size of mining blocks. Economically mining reserves in India are not large and therefore whatever limited reserves that we have should be exploited wisely. 7. In view of what is stated at paras 2 to 6 above it is for consideration whether the 17 new applications should be taken up for consideration now or at a more opportune time later.” 121. Thereafter vide a detailed note dated 07.05.99 (available at Note sheet pages 24-26 in Ex. P-130 (Colly) (D-81) Sh. S.S. Boparai, Secretary Coal, dealt with various issues as were raised till then by the officers below in the matter and as regard the applications received after 11.02.1997, he inter-alia observed as under:
Note dated 07.05.99 (available at Note sheet pages 24-26 in D-81)
“...... Applications received after 11.2.1997 and those pending before can be taken up simultaneously with other applications after the decision has been notified to the nodal ministries and applications received from them, say in a period of about 14 days. JS (Coal)'s note does make a valid point that every Tom, Dick and Harry should not be able to obtain a captive block. So we have to take the precaution for saving our coal blocks from such vultures. Even while proposing the fresh amendment, we have inserted a clause that the minimum size of the coal mine and such other conditions which may be necessary for the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 147 of 389 purpose of coal mining operations by a company can be laid down by the Government. I have consulted Adv(P) in this respect. Scientific mining as an economic unit of coal can be done in an open cast mine of one million tonnes per year production. Similarly, in under-ground mining, a unit should produce 250 thousands tonnes per year. So MOS(Coal) may kindly lay down the condition that an application for mining of a coal block for quantity less than one million tons per annum in open cast mining and less than 250,000 tons per annum in underground mining would not be entertained so as to ensure economic/scientific mining of Indian coal. MOS (Coal) may kindly approve the modification of this earlier decision to the extent stated above in my note. Sd/- (Swarn Singh Boparai, K.C.) Secretary 07.05.99 Sd/- 12.5.99 (Dilip Ray) MOS (Coal)
Sd/- (For further action please.) 14/5 Secretary
Sd/- AS(C) Sd/- 17/5 JS(C)
Sd/- 17/5 Adv(P)” (Emphasis supplied)
122. The record shows and as shall be discussed in detail later, while discussing the role played by A-4 Dilip Ray, that when the said note dated 07.05.99 of Secretary Coal came to be put up before A-4 Dilip Ray, Minister of State for Coal on 12.05.99 then he approved the same on that day itself. Thus the policy of minimum extraction of coal for allotment of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 148 of 389 captive coal blocks by opencast mining and underground mining was approved by A-4 Dilip Ray on 12.05.99 while approving the said note dated 07.05.99 of Secretary Coal beside also according permission to consider applications received after 11.02.1997.
123. Be that as it may, it is clear from the aforesaid notings that pursuant to approval so accorded by Minister of State for Coal a decision was thus taken in MOC that an application for mining of coal blocks for quantity less than one million tonnes per annum in opencast mining and less than 250,000 tonnes per annum in underground mining would not be entertained so as to ensure economical/scientific mining of Indian coal.
124. It was the aforesaid guidelines/conditions so approved by Minister of state for Coal which were proposed to be relaxed by 14th Screening Committee in the case of M/s CTL and which were finally decided to be relaxed pursuant to approval granted by A-4 Dilip Ray, Minister of State for coal on 23.08.99 in file Ex. PW 4/DX-1 Colly (D-38) (available at note sheet page 18).
(I) My Discussion of the Prosecution Case
125. It is in the light of aforesaid factual matrix, that I now propose to deal with various issues arising in the present matter. The arguments of prosecution and that of the accused persons will also be simultaneously discussed and analysed.
126. However, before proceeding further, it will be important to note that the coal mining area measuring 105.153 hectares (259.839 Acres) in district Giridih, Bihar whose allocation was being sought, was a small
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 149 of 389 part of a large coalfield spread over 27.5 Sq. Km. (i.e. 2750 Acres). Since the impugned area measuring 105.153 hectares(259.839 Acres) contained a coal seam called “Karharbari Seam” so the same has been referred to as a coal mine in accordance with the definition of “Coal mine” as provided in Section 2 (b) Coal Mines (Nationalization) Act, 1973.
“Section 2(b) : “Coal mine” means a mine in which there exists one or more seams of coal.” 127. Though various other mines in the said Giridih coalfield were stated to be run by Central Coalfield Ltd., a subsidiary of Coal India Ltd., but the area measuring 105.153 hectares whose allocation was being sought by M/s CTL being an abandoned coal mining area was a free hold area. The said area was stated to have been earlier mined by one company called “Raniganj Coal Associates” (RCA) and the area after excavation was abandoned and surrendered in the year 1916. However, identification and allotment of said area was being sought as it was claimed that some coal reserves were still available in that area.
128. All the aforesaid facts find mention in the “Brief Note on scheme of Mining” as was enclosed by company M/s CTL with its application dated 09.05.98 (available at page No. 2-8 in D-36).
For a ready reference the relevant portion of the “Brief Note on Scheme of Mining” read as under:
“BRIEF NOTE ON SCHEME OF MINING
A. Introduction Giridih coalfield is developed in a shallow intracratonic trough. The coalfield spreads over 27.5 sq. Km of area and is one of the smaller coalfields of India. The exploitation of the coalfield was started by Bengal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 150 of 389 coal company and East India Railway as early as 1871. Since then the mining activity has been vigorously continued. There are 13 coal horizons in this coalfield. However, upto 1942, the major production of coal was from lower Kurhurbaree seam (the lower most seam in the area) due to its superior quality / grade. The mining of younger seams containing inferior grade coals was started after 1942. The Giridih colliery had constructed its own power plant & a coke oven plant with the capacity to produce 60000 te / yr / bp hard coke. Since nationalisation of coal mines in 1973, all the mines in this coalfield are run by central coalfield Ltd., a subsidiary of coal India Ltd. (Central Govt. U/T). Over 100 pits were sunk and a large number of inclines were driven by several agencies in this coalfield. Out of the above, 17 pits and about same number of inclines were driven by Ranigunj coal Associates (a private company) in the south - east part of the coalfield to work the lower Kurhurbaree seam (the only seam existing in their lease area). The seam had been fully developed & depillared in whole of their area. However old plans available show lot of pillars left behind due to sudden collapses. The pits and inclines had been abandoned and surrendered by RCA in 1916, long before the nationalisation of coal mines took place in the country in 1973. These abandoned mines of RCA were not included in the list of taken over mines as given in the Coal Mines Nationalisation Act, 1973. The CCL is unwilling to open this area because of high OB to coal ratio & uneconomical workings.” 129. The applicant company M/s CTL however named its proposed project as “Brahmadiha opencast project”. Accordingly, in all the communications and notings in different departments as have been re-produced earlier the said area has been referred to as abandoned coal mining area of Brahmadiha project.
Thus, in the present judgment also the said area for the sake of brevity and convenience has been referred either as “Abandoned coal mining area of Brahmadiha Project” or as “Brahmadiha Coal Mining Area”.
Moreover, as the words “coal mine” and “coal block” have been interchangeably used in various notings and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 151 of 389 communications to refer to the said “Brahmadiha Coal Mining Area”, so accordingly in the present judgment also the said two words have been interchangeably used to refer to the said area for the sake of convenience.
130. From the application dated 09.05.98 moved by company M/s CTL itself and also from the subsequent notings made in the files of MOC by various officers and communications exchanged between the officers of MOC, CIL, CMPDIL and CCL, it has come on record as an undisputed fact that the Brahmadiha coal mining area whose allocation was being sought by M/s CTL was not a nationalised coal mine under CMN Act, 1973 and consequently, it was never identified by CIL or any of its subsidiary companies for allocation to private sector companies for captive use. Thus, in the light of aforesaid undisputed facts following issues crops up for consideration:
Issue No. (1): What was the mandate of Screening Committee as was constituted in MOC. Issue No. (2): Whether Screening Committee was within its rights to consider allocation of a non-nationalised and consequently a non- identified coal mine. Issue No. (3): Whether application of M/s CTL seeking identification and allocation of Brahmadiha Coal Block i.e. a non-nationalized coal mine and consequently a non-identified coal mine was required to be put up before the Screening Committee or it ought to have been closed/rejected in MOC itself. In case 14th Screening Committee is held to be competent or is presumed for the sake of arguments to be competent to consider the application of M/s CTL then following further issue arises.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 152 of 389 Issue No. (4): Whether allocation made by 14th Screening Committee in favour of M/s CTL for allocation of said abandoned Brahmadiha coal mining area was in accordance with law. 131. The other aspects of the prosecution case shall be thereafter dealt with in accordance with the answers to the aforesaid four issues. I accordingly propose to decide the various issues as under:
Issue No. (1), (2) and (3)
132. The first three issues are proposed to be answered together as the discussion and analysis of the facts and legal aspects qua them will overlap.
133. It is the case of prosecution that since Screening Committee was constituted pursuant to amendment effected in CMN Act, 1973 by virtue of CMN (Amendment) Act, 1993, so the Screening Committee could have considered only such applications as were received for seeking allocation of one or the other coal mines as stood covered by CMN Act, 1973. It has been further submitted that since Brahmadiha coal mining area was never nationalised under CMN Act,1973 and accordingly the same was never identified by CIL or any of its subsidiary companies for allocation to private sector companies for captive use, so the said mine could not have been considered for allocation by 14th Screening Committee. It has been also submitted that CIL in consultation with its subsidiary companies used to identify coal mines for allocation to private parties for captive use. However only such coal mines used to be identified by them which they themselves were not inclined to mine and were preferably in greenfield areas. A list of all such identified coal mines
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 153 of 389 used to be sent by them to MOC for allocation to private companies for their captive use. It has been thus submitted that accordingly all such identified coal mines were to be from out of nationalized coal mines only. It has been thus submitted that the application of M/s CTL ought to have been rejected/closed in MOC itself and was not at all liable to be put up before the Screening Committee.
134. On the other hand, it has been vehemently argued by Ld. Counsels for the accused persons, that all the applications as were received in MOC for seeking allocation of captive coal blocks were liable to be put up before the Screening Committee for its consideration and MOC was not competent to either reject or close the applications on its own. It has been also submitted that earlier on a number of occasions various coal blocks which were not yet identified by CIL or any of its subsidiary companies were considered for allocation by different Screening Committees and CIL was also requested by the Screening Committees to include the said coal blocks in the identified list of coal blocks to be allotted for captive use. Reference in this regard was also made to certain coal blocks where a part thereof was not nationalised under CMN Act, 1973 but the same were still considered by the Screening Committee for allocation to private parties for captive use. Sarisatoli coal block, Tara-East coal block and Tara-West coal block have been referred to in this regard.
My Discussion 135. In order to appreciate the present three issues, it will be appropriate to once again refer to some observations of Hon'ble
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 154 of 389 Supreme Court as were made in order dated 25.08.2014 in the case Manohar Lal Sharma Vs. The Principal Secretary & Ors. (Supra) regarding the circumstances in which and purpose for which CMN Act, 1973 came to be enacted.
Para No. 30 to 33 of order dated 25.08.2014: 30. In short, the 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining prospecting licences or mining leases in respect of lands in which the minerals vest in the government, the rule- making power for regulating the grant of prospecting licences and mining leases, special powers of Central Government to undertake prospecting or mining operations in certain cases, and for development of minerals.
31. The Coal Mines (Taking Over of Management) Act, 15 of 1973, (for short, ‘Coal Mines Management Act’) was passed, “to provide for the taking over, in the public interest, of the management of coal mines, pending nationalisation of such mines, with a view to ensuring rational and coordinated development of coal production and for promoting optimum utilisation of the coal resources consistent with the growing requirements of the country, and for matters connected therewith or incidental thereto.” 32. The Coal Mines Management Act received the assent of the President on 31.03.1973 but it was made effective from 30.01.1973 except Section 8(2) which came into force at once. Section 3(1) provides that on and from the appointed day (that is, 31.01.1973) the management of all coal mines shall vest in the Central Government. By Section 3(2), the coal mines specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1). Under the proviso to Section 3(2), if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order make a declaration about the existence of such mine, upon which the management of such coal mine also vests in the Central Government and the provisions of the Act become applicable thereto. 33. Immediately after the Coal Mines Management Act, the Parliament enacted the CMN Act. CMN Act was passed,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 155 of 389 “to provide for the acquisition and transfer of the right, title and interest of the owners in respect of coal mines specified in the Schedule with a view to reorganising and reconstructing any such coal mines so as to ensure the rational, coordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and for matters connected therewith or incidental thereto.”
136. Further in para 34 Hon'ble Supreme Court interalia observed as under:
“34. Section 2(b) of the CMN Act defines a coal mine in the same manner as the corresponding provision of the Coal Mines Management Act, namely, a mine “in which there exists one or more seams of coal”. Section 3(1) provides that on the appointed day (i.e., 01.05.1973) the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all encumbrances...... ”
137. Thus, it is important to note that under CMN Act, 1973 right, title and interest of the owners in relation to only such coal mines stood transferred to Central Government as were mentioned in the schedule to the Act. It is no doubt true that Section 3 (5) of the Act further provides as under:
“(5) If, after the appointed day, the Central Government, is satisfied, whether from any information received by it otherwise, that there has been any error, omission or
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 156 of 389 misdescription in relation to the particulars of a coal mine included in the Schedule or particulars of a coal mine included in any such coal mine, it may, by notification, correct such error, omission or misdescription and on the issue of such notification, the relevant entries in the Schedule shall be and shall be deemed always to have been, corrected accordingly.”
138. It is however not the case of either the prosecution or that of any of the accused persons that the schedule to CMN Act, 1973 stood amended at any future date so as to include any such abandoned patch of Giridih Coalfield, District Giridih, Bihar i.e. the abandoned coal mining area of Brahmadiha open cast project whose allocation was being sought by M/s CTL.
139. Thus, the necessary and only corollary which follows from the aforesaid discussion is that CMN Act, 1973 did not apply to any such coal mine which was not mentioned in the schedule to CMN Act, 1973.
140. In fact, the aforesaid position was well known to the applicant company, M/s CTL and also to the accused public servants besides being to the knowledge of officers of CIL, CCL and CMPDIL, as is evident from their various communications. The brief note on scheme of mining as was enclosed with the application dated 09.05.1998 by company M/s CTL clearly stated “these abandoned mines of RCA were not included in the list of taken over mines as given in the Coal Mines Nationalization Act, 1973”. It was further stated that the applicant company intends to open an opencast coal mine in the abandoned RCA area within the provisions of Mines and Minerals (Regulation and Development) Act, 1957. Thus from the aforesaid submissions made by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 157 of 389 company M/s CTL itself it was clear that Brahmadiha coal mining area being not a nationalised coal mine was not governed by the provisions of CMN Act, 1973.
141. It is also an undisputed case that by way of an amendment introduced in CMN Act, 1973 in the year 1993 i.e. by way of Coal Mines (Nationalization) Amendment Act, 1993 participation in coal mining activities by private sector companies engaged in specified end uses was permitted. In this regard, it will be worthwhile to once again refer to the observations of Hon'ble Supreme Court as were made in para No. 36 to 38 of order dated 25.08.2014 in the matter Manohar Lal Sharma Vs. The Principal Secretary & Ors. (supra):
(Para 36 to 38): “36. By the Coal Mines (Nationalisation) Amendment Act, 1993 (for short, ‘1993 Nationalisation Amendment Act’), the CMN Act was further amended. The Statement of Objects and Reasons of the 1993 Nationalisation Amendment Act reads thus: “Considering the need to augment power generation and to create additional capacity during the eighth plan, the Government have taken decision to allow private sector participation in the power sector. Consequently, it has become necessary to provide for coal linkages to power generating units coming up in the private sector. Coal India Limited and Neyveli Lignite Corporation Limited, the major producers of coal and lignite in the public sector, are experiencing resource constraints. A number of projects cannot be taken up in a short span of time. As an alternative, it is proposed to offer new coal and lignite mines to the proposed power stations in the private sector for the purpose of captive end use. The same arrangement is also considered necessary for other industries who would be handed over coal mines for captive end use. Washeries have to be encouraged in the private sector also to augment the availability of washed coal for supply to steel plants, power houses, etc.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 158 of 389 Under the Coal Mines (Nationalisation) Act, 1973, coal mining is exclusively reserved for the public sector, except in case of companies engaged in the production of iron and steel, and mining in isolated small pockets not amenable to economical development and not requiring rail transport. In order to allow private sector participation in coal mining for captive use for purpose of power generation as well as for other captive end uses to be notified from time to time and to allow the private sector to set up coal washeries, it is considered necessary to amend the Coal and Coal Mines (Nationalisation) Act, 1973. The Coal Mines (Nationalization) Amendment Bill, 1992 seeks to achieve the aforesaid objectives.”
37. Section 3 of the CMN Act was amended and thereby in clause (a) of sub-section (3) for item (iii), the following was substituted, namely, (iii) a company engaged in – (1) the production of iron and steel, (2) generation of power, (3) washing of coal obtained from a mine, or (4) such other end use as the Central Government may, by notification, specify.
38. By further Notification dated 15.03.1996, the Central Government specified production of cement to be an end- use for the purposes of the CMN Act.”
142. Thus from the aforesaid amendment effected in the year 1993 pursuant to introduction of Coal Mines (Nationalization) Amendment Bill, 1992 and also the subsequent notification issued in the year 1996, it is clear that the companies engaged in specified end uses i.e. production of iron and steel, generation of power, washing of coal obtained from a mine or production of cement were permitted to undertake coal mining operations for captive use. The word “captive use” need no emphasis to understand its meaning. The companies mining coal were permitted to use the extracted coal in their specified end use project(s) only and were
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 159 of 389 not permitted to sell the same in the open market. The said end use projects must be either for generation of power or production of iron and steel or production of cement. Though companies engaged in washing of coal have also been permitted to mine coal under the Act but as is evident from the consistent file notings of various MOC officers including that of A-6 N.N. Gautam, the overall object of permitting private parties to establish washeries was only for use of the middlings and the washed coal captively in the specified end uses i.e. generation of power, production of iron and steel and production of cement. A-6 N.N. Gautam in his noting dated 28.08.98 (Page 3/N – 4/N in D-38) mentioned that till now, no case where washing of coal obtained from a mine has been undertaken where downstream linkage/consumption has not been firmed up. He in fact had clearly observed that as the proposal of M/s CTL was silent about the utilization of washed coal so it needs to be clearly spelled out that mine/block can not be given for washing unless the washed coal is for captive consumption or tied up with downstream linked consumer. A-5 P.K. Banerjee thereafter vide his endorsement at page No. 4/N (D-38) agreed with the said approach of A-6 N.N. Gautam.
143. In fact subsequent thereto, A-1 M/s CTL submitted a letter dated 08.09.98 [Part of Ex. P-14, available at page 20 in D-36] to A-6 N.N. Gautam specifying that after mining the coal and washing the same whatever middlings will be available will be utilized for power generation and the washed coal will be used for production of metallurgical coke in their own coke oven unit.
144. As earlier also mentioned, in another file of MOC Ex. P-130 (colly)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 160 of 389 (D-81), the then Joint Secretary Coal Sh. J. Hari Narayan recorded a detailed note dealing with the requests made by various parties for seeking allocation of coal blocks. In the said note dated 10.03.99 (available at note sheet pages 15-20 in D-81) as regard the request of M/s CTL and M/s Central utilities and Investments Ltd. he interalia observed in para No. 3.5.3 as under:
Note dated 10.03.99 (available at note sheet pages 15-20 in D-81)
3.5.3 We have not so far allotted any captive coal block for the washery sector. Since “washery” is also included in the definition of “mine”, setting up of washeries in the private sector is facilitated by the June, 1993 amendment but not for extraction of the coal by the washery owners. Before the June, 1993 amendment, setting up of washeries by private companies was not possible. Moreover, washed coal can be sold in the open market. The unrestricted end-uses for the washed coal go against the spirit of captive consumption for specified end-uses in the June, 1993 amendment. Therefore, it is not possible to allot captive blocks to M/s Castron Technologies Limited and M/s Central Utilities and Investments Limited, for coal washing. 145. The record note of 14th Screening Committee Ex. PW 6/F (colly) (available from page 133-164 in D-62) also shows that the claim of M/s Central Utility and Investment Ltd was rejected on similar grounds by the 14th Screening Committee. For a ready reference, the observations made qua M/s Central Utility and Investment Ltd by 14th Screening Committee have been reproduced here under:
“15. M/s. Central Utility and investment Ltd. The party had requested allotment of Gare-Palma IV/6, IV/7 and Lohara West/Utkal B2 blocks for supply of coal to their two washery projects. The representative of the party informed the Committee that the washed coal from these two washeries will be supplied to the power plants of MSEB, GEB, PSEB, RSEB etc and some cement plants. However,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 161 of 389 the Committee noted that there is no formal tie-up with any of the end users mentioned by the party and in view of that decided to reject this case.”
146. In fact, subsequently in letter dated 12.04.99 Ex. PW 4/DX-3 addressed to Secretary Coal submitted by company M/s CTL under the signatures of A-2 Mahender Kumar Agarwalla, it was stated that the washed coal will be utilized for manufacturing of coke and the coke will be utilized in their Iron Foundry situated in the Industrial Area of Bokaro.
147. Thus from the aforesaid discussion, it is clear that no coal mine was to be allotted to any company who only intended to establish a washery and did not intend to captively use the coal in any of the specified end use project i.e. either for generation of power or for production of iron & steel or for production of cement.
148. In the light of aforesaid facts and circumstances, it needs to be examined as to whether the application of M/s CTL ought to have been closed in MOC itself or that all applications received in MOC irrespective of the eligibility were to be placed before the Screening Committee.
149. Proceeding further, it would be now appropriate to refer to a letter dated 20.05.99, Ex. PW 14/DX-8 (available at page 128 in D-82) written by A-6 N.N. Gautam to Sh. P.K. Sengupta, Chairman, CIL. Vide the said letter A-6 N.N. Gautam requested Chairman CIL to furnish to the Ministry the list of coal mining blocks identified and approved by CIL board as on date, since the same will form the basis for the proposed allocation of coal blocks to the applicant companies in the next Screening Committee meeting.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 162 of 389 For a ready reference the letter dated 20.05.99 of A-6 N.N. Gautam has been reproduced over here:
Letter dated 20.05.99, Ex. PW 14/DX-8 (available at page 128 in D-82)
“D.O.No. 47011/15/95-CPAM N.N. Gautam, Adviser (Projects) New Delhi, the 20th May, 1999 Dear Shri The Screening Committee functioning in the Ministry of Coal to decide allocation of coal mining blocks for captive purposes i.e. steel making, setting up of power plants and cement plants is to be held in the middle of June, 99. You may be aware that earlier CIL with the approval of CIL Board had identified coal mining blocks for captive exploitation. Subsequently, additional blocks were also identified and approved by CIL Board and reported to the Ministry. I shall be grateful if you kindly furnish to this Ministry the list of coal mining blocks identified and approved by CIL Board as on date (this would include the blocks earlier reported and those additional blocks identified later and reported to the Ministry) with appropriate modifications, if warranted as this will form the basis for the purpose of allocation of new blocks to the applicant parties in the meeting of the next Screening Committee. The list should include among other things the name of the coalfield, name of the block, area, total coal seam thickness, likely grade, total geological reserves, State in which located, whether allotted or not as also the latest status of payment of GR cost in respect of the blocks already allotted. As this information is needed very urgently, may I request that the concerned authorities may be directed to prepare the requisite information on top priority basis and available the same to the Ministry latest by 28.5.99 positively. Yours sincerely, (N.N. Gautam) Shri P.K. Sengupta, Chairman, 10, Netaji Subhas Road, Calcutta.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 163 of 389 Copy to:- 1. Director (Tech.), Coal India Ltd., 10, Netaji Subhas Road, Calcutta – 700 001 2. CMD, CMPDI, Gondwana Place, Kanke Road, Ranchi – 834 008 Sd/- 20/5/99 (N.N. Gautam)” (Emphasis supplied by me)
150. In response thereto PW-15 N.K. Sharma Director (Technical), CIL vide letter dated 27.05.99 Ex. PW 15/A (colly) (available from page 143- 159 in D-82) sent status of the identified blocks as were identified till then alongwith their present status. The said letter read as under: Letter dated 27.05.99 Ex. PW 15/A (colly) (available at page 143-159 in D-82)
“Coal India Limited 10, NETAJI SUBHAS ROAD, CALCUTTA-700001 Phone: 220-9980, GRAMS : COALINDIA TELEX: 21-7180 CIL IN
Ref. No. CIL/CCP/Capmin/1699 Dated 27 May, 1999
To The Adviser (Projects), Ministry of Coal, Shastri Bhawan, New Delhi.
Dear Sir,
Sub: Details of Captive Mining Blocks. Ref: D.O. No. 47011/15/98-CPAM dated 20th May, 1999.
Please refer to letter mentioned above addressed to Chairman, CIl with copy to the undersigned. As desired by you, I am furnishing the details of captive mining blocks in the annexures as listed below: -
ANNEXURE - 1: First list of identified 56 mining blocks (Western part of Gopal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 164 of 389 Prasad West Block was withdrawn from the list of captive mining block in MCL and Khiloni block in WCL has been included in the list). ANNEXURE - 2: Additional list of identified 49 Nos. approved by CIL Board and sent to the Ministry vide letter No. CIL/CCP/Capmin/837 dated 9.3.99. ANNEXURE - 3: Present status of allotment of captive mining blocks. 24 Blocks/Sub Blocks allotted to 20 different Cos. ANNEXURE - 4: Details of 4 blocks which had been placed before 182nd CIL Board held on 24.5.99 for withdrawal from the list of captive mining blocks.
While preparing the lists, the details like name of the coalfield, name of the block, area, coal seam thickness, likely grade, total geological reserves, state in which located, etc. including latest status of payment of GR cost have been included. Kindly acknowledge receipt. Yours faithfully,
Encl. : Annexures 1-4 Sd/- (N.K. Sharma) Director (Technical)”
151. Thus, the coal blocks which stood nationalized under CMN Act, 1973 formed the main category from which certain coal blocks were identified by CIL and its subsidiary companies for being given to private sector companies. Accordingly, said identified coal blocks formed a sub- category from out of the main category of nationalized coal blocks. This fact is also apparent even otherwise from the scheme of CMN (Amendment) Act, 1993. Since the private sector companies were permitted to undertake coal mining operations for captive use by way of an amendment introduced in CMN Act, 1973, so only such coal blocks were decided to be allotted to private sector companies which were identified for the said purpose from out of the nationalized coal blocks.
152. Accordingly, at the cost of repetition it would be worthwhile to state
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 165 of 389 that since CMN Act, 1973 dealt with certain coal mining areas which stood nationalized under the Act so by way of amendment introduced in 1993, it was only such coal mines as were identified from out of said nationalized coal mines which could have been allotted to private sector companies for their captive use. It is for the said reason only that in its various communications, CIL, CMPDIL and CCL informed MOC that the area under consideration being a free-hold area is not an identified coal mine and the said abandoned coal mining area does not fall under the command area of CCL. Moreover from communication dated 20.05.99 of A-6 N.N. Gautam Ex. PW 14/D-8 addressed to CIL it is clear beyond any doubt that the list of identified coal blocks to be provided by CIL was to form the basis for the purpose of allocation of new blocks to the applicant companies in the forthcoming meeting of Screening Committee.
153. These facts thus clearly show that the Screening Committee was competent to consider only such applications as were for identification and allocation of coal blocks which stood covered under CMN Act, 1973.
154. At this stage, it would be pertinent to menion that the first list of identified 56 mining blocks enclosed as Annexure-I by PW-15 N.K. Sharma Director (Technical), CIL alongwith his letter dated 27.05.99 Ex. PW 15/A (colly) sent to Advisor Projects,MOC(available from page 143- 159 in D-82)mentions the names of “Sarisatoli”, “Tara (West)” and “Tara (East)” coal blocks in Raniganj Coalfield at serial No. 7, 8 and 9 respectively (available at page 144 in D-82).
155. At this stage it would be appropriate to refer to one other argument of Ld. Counsel for accused A-6 N N Gautam.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 166 of 389 156. In his statement u/s 313 (5) Cr.PC A-6 N N Gautam has extensively referred to a fax message dated 08.11.95 Ex. PW 26/DX-4 (colly) (available from page 74 to 77 in D-77) sent by CIL to the then Adviser (Projects) PW-26 R. K. Sachdev. For the purpose of ready reference, it will be appropriate to reproduce the averments made by A-6 N.N. Gautam in his statement u/s 313 (5) Cr.PC in this regard:
Statement u/s 313(5) Cr.PC of A-6 N.N. Gautam:
“xxxv. The other allegation is that screening committee could not have identified a block which is not in the list of identified blocks prepared by CIL. First of all, CIL is not the only PSU working in mining and there are SECL and NLC as well, which are independent of CIL having blocks under their jurisdiction. Therefore, the identified list prepared by CIL is limited to the blocks under its jurisdiction placed by the Government of India after nationalization of blocks by the CMN Act from amongst the schedule of CMN Act and those acquired by CIL thereafter under the CBA Act. It is submitted that the CIL has no jurisdiction whatsoever to include any block which is not nationalized or not acquired by it under the CBA Act. CIL has admitted this position in its fax message sent to MoC on 08.11.1995 [Pgs. 74-77 of D-77]. The same read as follows: S. Name of the Block & Area Action to be taken No 1 Sarisatoli Block Total area of the Block 600 HA a) Area for which ECL/CIL Since the lease is not held by does not hold any lease ECL/CIL and it was not a for 20 hectors approx.. nationalised mine or lease the state undertaking power generating agency can obtain the lease directly from the State Govt. with the concurrence of Central Govt as per the provisions of MMRD Act and Coal Mines Nationalisation Act read with the necessary amendment as expressed by ED (Legal) in letter no. 1128 dated 28.10.95 point No (a) copy enclosed.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 167 of 389 2 Tara East Since the lease is not held by Total lease hold area 350 ECL/CIL and it was not a HA (approx.) nationalised mine or lease the State Gardhemo 20HA (approx.) undertaking power generating not nationalised and agency can obtain the lease directly hence no lease exists with from the state Govt. with the ECL/CIL concurrence of Central Govt. as per the provisions of MMRD Act and Coal Mines Nationalisation Act read with the necessary amendment as expressed by ED (Legal) in letter no. 1128 dated 28.10.95 point No (a) copy enclosed.
xxxvi. That CIL had specifically stated that qua block not in the lease hold of their subsidiaries it cannot be included by them in the identified list of captive mines and lease of said mines can be granted by the concerned State Government, concurrence of Central government, under the MMDR Act, 1957. Yet, on specific directions of Screening Committee of MoC, these 2 blocks were subsequently included in the list of identified captive blocks.” 157. In this regard, it would be suffice to state that not only with respect to Sarisatoli Coal Block or Tara East coal block, the legal position was well explained by CIL that wherever the entire coal block or part thereof was not nationalised under CMN Act,1973 then CIL was not holding any leasehold rights over such an area or part thereof and the right to allot the said area was with the concerned State Government only and the procedure to be followed was the one provided in MMDR Act,1957. In fact the said legal position as conveyed by M/s CIL to MOC in the year 1995 itself was not even disputed by MOC at any point of time. Accordingly, the present accused MOC officers were also well aware of the said communication sent by CIL. I may thus state that there can not be any two opinion qua the legal status of coal blocks which were not nationalised under CMN Act, 1993. As observed by Hon'ble Supreme Court also in the case Manohar Lal Sharma Vs. The Principal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 168 of 389 Secretary & Ors. (Supra) that till nationalization of coal blocks took place by virtue of CMN Act, 1973, the regulations of Mines and the development of minerals in the country stood regulated by MMDR Act 1957. The 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining prospecting licences or mining leases in respect of lands in which the minerals vest in the government, the rule-making power for regulating the grant of prospecting licences and mining leases, special powers of Central Government to undertake prospecting or mining operations in certain cases, and for development of minerals. In these circumstances, it will be suffice to state that even if any such coal block or part thereof which was not nationalised under CMN Act,1973 was considered by any previous screening committee for allocation then the said action was also beyond the mandate of said screening committee. As earlier mentioned, vide the said fax message CIL had in fact conveyed the correct legal position with respect to such areas. Moreover the said earlier illegal act, if committed by any previous screening committee can not clothe the act of present accused public servants with any degree of legality and especially when the said fax message was already received in MOC from CIL.
158. As earlier mentioned, the Coal Mines Nationalization Act,1973 came to be enacted so as to provide for the acquisition and transfer of the right, title and interest of the owners in support of coal mines specified in the schedule to the Act. Accordingly, by virtue of the said Act of 1973, the ownership and control of all such resources stood vested in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 169 of 389 the Central Government.
159. Thus, the bottom line emerging from the objects and reasons of CMN Act, 1973 is that as regard coal mines which were mentioned in the Schedule to the Act, the ownership and control of such resources stood vested in the Central Government. Accordingly by no rule of interpretation, the CMN Act,1973 can be held to extend to coal mines which did not find mention in the Schedule to the Act. Thus, as CMN Act,1973 was passed so as to provide a special treatment to a particular nature of minerals i.e. coal in the country, so with respect to the minerals which did not stand covered under CMN Act, 1973, the governing statute remained MMDR Act, 1957 only. The aforesaid position was in fact well to the knowledge of the applicant company M/s CTL and also to the accused public servants beside also to the knowledge of officers of CIL, CCL and CMPDIL as is evident from their own communications. Furthermore, the submissions made by A-6 N.N Gautam in his written statement u/s 313 (5) Cr.PC as have been reproduced earlier also corroborates the said fact.
160. There thus does not remain any dispute that Brahmadiha coal block being not a nationalized coal block was not governed by the provisions of CMN Act, 1973. Moreover the argument that all the coal blocks so nationalised did not belong to CIL or that SECL and NLC were also having coal blocks under their jurisdiction, independent of CIL, clearly does not require any detailed discussion to be brushed aside. Firstly no instance has been pointed out that any such coal block under
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 170 of 389 the jurisdiction of SECL and NLC were ever considered by the Screening Committee for allocation. Moreover, if it was so then why A-6 N N Gautam never called upon SECL and NLC to also provide a list of coal blocks identified by them for allocation to private sector companies for captive mining.
161. At this stage, it would be also pertinent to mention that when minutes of any Screening Committee meeting talks of identification and allotment of suitable blocks then it primarily refers to identifying(selecting) a suitable or appropriate block for any given applicant company under consideration, from out of the coal blocks already identified for allocation to private companies. In case an applicant company applied for identification and allotment of any coal mine which was not in the list of already identified coal mines but was a nationalized coal mine and the Screening Committee found any such coal mine to be suitable for the said applicant company, then it either used to ask the said applicant company to discuss with CIL or its subsidiary companies about the inclusion of said coal block in the list of identified coal blocks to be allotted to private companies for captive mining or the Screening Committee on its own used to request CIL to include the said coal block in the list of identified coal blocks.
Thus, in either of the two situations the coal blocks being considered by the screening committee were from out of the nationalized coal blocks only.
162. It has been however also sought to be argued, that the initial
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 171 of 389 Screening Committee as was constituted vide office memorandum dated 14.07.1992 in MOC, was prior to passing of Coal Mines Nationalization (Amendment) Act, 1993 and thus the competence of Screening Committee could not have been limited to coal blocks covered by CMN Act, 1973 only.
163. I may however state that the said contention is completely fallacious. In order to appreciate the said issue, it will be appropriate to first refer to office memorandum Ex. PW 23/A-3 dated 14.07.1992 vide which Screening Committee for the first time was constituted [Available at page 29 in file Ex. PW 23/A (colly) (D-75)]. The same read as under:
Office memorandum Ex. PW 23/A-3 dated 14.07.1992 [ Available at page 29 in file Ex. PW 23/A (colly) (D-75) ]
“No.13011/3/92-CA Government of India Ministry of Coal ….. New Delhi, the 14th July, 1992
OFFICE MEMORANDUM
Subject: Constitution of a Screening Committee for screening proposals received for captive mining by private power generation companies. ….. In the context of participation of private power generation companies in power generation, proposals are also being received in the Ministry of Coal from such companies requesting for ownership and operation of captive coal mines. For Screening of such applications/proposals it has been decided to constitute a Screening Committee comprising of the following members: - 1. Additional Secretary, Ministry of Coal - Chairman. 2. Adviser (Projects), Ministry of Coal - Member- Convenor 3. Joint Secretary & Financial Adviser, Ministry of Coal - Member 4. Representative of Ministry of Railways - Member 5. Representative of Ministry of Power - Member
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 172 of 389 6. Representative of concerned State Govt. (Revenue Deptt.) - Member
The Committee will meet once in a month and examine the proposals received from various parties. Sd/- (S. Krishnan) Under Secy. To the Government of India
To 1. All Officers. 2. All Sections. 3. The Chairman, Railway Board, Rail Bhawan, New Delhi 4. The Secretary, Ministry of Power, Sharam Shakti Bhawan, New Delhi. 5. Chief Secretaries of State Govts. 6. Chiarman Coal India Limited, 10, Netaji Subhash Road, Calcutta. 7. Chairman Managing Director, Singareni Colliery Company Limited, Kothagudem Collieries, Distt. Khammam, Andhra Pradesh. (It is requested that names of their representatives may please be intimated to this Ministry at an early date.)”
164. No doubt, a bare perusal of the said office memorandum shows that the same was constituted for screening proposals received for captive mining by private power generation companies, but the purpose of constituting the said Screening Committee in the year 1992 needs to be understood in the light of proceedings which were going on in Ministry of Power during the said period. Finding acute crunch in generation of power in the country, it was decided in Ministry of Power that private sector companies who were inclined to set up power projects should be encouraged to do so by providing necessary coal. Various notings in MOC file Ex. P-23/A (colly) (D-75) and file Ex. PW 32/T-15 (colly) (D-145) shows that pending passing of Coal Mines Nationalization (Amendment) Act, 1993, it was discussed in a meeting held by the Planning commission that private sector participation in coal mining be permitted for captive use of coal in power generation projects. Accordingly, in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 173 of 389 year 1991-1992 when the bill towards amendment of CMN Act, 1973 so as to permit private sector companies to mine coal was still pending consideration before the Parliament, that such a decision was arrived at in Ministry of Power in consultation with MOC. Accordingly, the MOC being the nodal Ministry for coal decided to constitute a Screening Committee on 14.07.1992 for screening proposals received for captive mining by private power generation companies. However the impugned exercise was being undertaken in MOC only as a preparatory step towards putting in place a mechanism to screen all such proposals as will be received subsequent to coming into force the Amendment Act. In fact no meeting of the screening committee ever took place before the Amendment Act came into force. Moreover, prior to amendment introduced in CMN Act,1973, the coal blocks were not even permitted to be allocated to the private sector companies for captive mining and thus no such coal block could have been even otherwise allotted .
165. The office memorandum dated 14.07.1992 made representatives of concerned State Governments and that of Administrative Ministries as members of the Screening Committee and accordingly communication dated 19.08.1992 of MOC [available at page 30 in file Ex. PW 23/A (colly) (D-75)] was sent to Chief Secretaries of various State Governments asking them to inform the name, address and telephone numbers of the representatives of their State Governments nominated to the Screening Committee. Accordingly, the Screening Committee was re- constituted vide OM dated 30.07.93 Ex. PW 23/A-4 i.e. subsequent to coming into force of CMN (Amendment) Act, 1993. The same read as
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 174 of 389 under:
OM dated 30.07.93 [available at page No. 38 in file Ex. PW 23/A (colly)] “No.13011/3/92-CA Government of India Ministry of Coal ….. New Delhi, the 30th July, 1993
OFFICE MEMORANDUM
Subject: Constitution of a Screening Committee for Screening proposals received for captive mining by private power generation companies-Matter regarding. In continuation of this Ministry's Office Memorandum of even number dated 14.7.1992 constituting a Screening Committee for Screening proposals received for captive mining by private sector power generation companies, it has been decided to revise partially the composition of the said Screening Committee as under: -
1. Additional Secretary Ministry of Coal, New Delhi - Chairman. 2. Adviser (Projects) Ministry of Coal, New Delhi -Member-Convenor 3. JS & FA, Ministry of Coal, New Delhi - Member 4. Representative of Ministry of Railways, New Delhi - Member 5. Representative of Ministry of Power, New Delhi - Member 6. Representative of concerned State Govt. (Revenue Deptt.) - Member 7. Director (Technical) CIL, Calcutta. - Member 8. Chairman/Managing Director CMPDIL, Ranchi. - Member 9. CMD/of concerned subsidiary companies of CIL - Member
Sd/- 3/8/93 (J.L. Meena) DEPUTY SECY. TO THE GOVERNMENT OF INDIA”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 175 of 389 166. Though certain changes in the constitution of Screening Committee were affected but the purpose/mandate of Screening Committee remained the same i.e. for screening proposals received for captive mining by private power generation companies. Thereafter the first meeting of the Screening Committee for screening proposals relating to captive mining by power generation companies was held on 14.07.93 i.e. after CMN (Amendment) Act, 1993 had already come into force on 09.06.1993.
167. Thus, it will be completely fallacious to state that as the Screening Committee came to be constituted prior to coming into force of the CMN (Amendment) Act, 1993 so its mandate to identify and allocate coal blocks travelled beyond CMN Act, 1973. As mentioned above the first Screening Committee meeting took place on 14.07.1993 only i.e. after CMN (Amendment) Act, 1993 had already come into force on 09.06.93.
168. At this stage, it would be also pertinent to mention that the guidelines, for identifying and allotment of suitable blocks for captive mining were in fact formulated by the Screening Committee in its first meeting held on 14.07.1993. In this regard, it would be appropriate to first refer to the relevant portion of the Agenda Note of first meeting of the Screening Committee (Available at page 10 in D-170) wherein CIL Board had proposed guidelines which should be followed for identifying coal blocks for captive mining.
Agenda Note of 1 st meeting of the Screening Committee (Available at page 10 in D-170)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 176 of 389 “Agenda Note for the first Meeting of the Screening Committee for Screening proposals for captive mining by power generation company 14th July, 1993 at 2.30 P.M. in Room No. COL Wing, Shastri Bhawan, New Delhi.
Agenda item No. 1. Formulation of guidelines for identification and allotment of suitable blocks for captive mining. Considering the need to augment power generation and to create additional capacities the Government had taken a decision to allow private sector participation in the private sector. Consequently it has become necessary to provide for coal linkage to power generating units coming up in the private sector. Coal India Ltd. are experiencing resource constraints and therefore a number of projects cannot be taken up in a short span of time. As an alternative it is proposed to offer new coal blocks to the proposed power generating companies / power stations in the private sector for captive end use. For this purpose the Coal Mines (Nationalisation) Amendment Act, 1993 has been published in the Gazette of India on 9.6.93. The CIL Board has considered the leasing of blocks to the private sector and the Board's decisions are as under:- (i) The blocks in green field areas where basic infrastructure like road, rail links and power lines are not immediately available, should only be given to private sector. The areas where CIL has already invested in creating such infrastructure for opening new mines, should not be handed over to the private sector. (ii) The blocks offered to private sector should be away from the existing mines and projects of CIL. (iii) Blocks already identified for development by CIL should not be offered to the private sector. (iv) Private sector should be asked to bear the full cost of exploration in these blocks which will be offered to them. The Committee may like to consider these points for formulation of guidelines for identification and allotment of suitable blocks for captive development.”
169. Based on the said agenda note the first meeting of the Screening Committee took place on 14.07.1993. The relevant portion of the minutes of said first meeting inter-alia mentions the following facts regarding guidelines finalised for identifying coal blocks to be allocated for captive
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 177 of 389 development by power generation companies.
Minutes of 1 st Screening Committee meeting, Ex. PW 14/DX-3 Colly (Available at page 150-158 in D-165)
“Minutes of the first meeting of the Screening Committee for screening proposals relating to captive mining by power generating companies held on 14.7.1993 in the Ministry of Coal, Shastri Bhawan, New Delhi...... 2 ...... 3. Initiating the discussion, the Chairman outlined the objectives of the Screening Committee which had been set up by the Ministry of Coal. The Chairman clarified that primarily the Committee would be identifying suitable blocks for captive development by power generating companies. 4. Agenda Item No. 1 – Formulation of guidelines. The discussion proceeded on the basis of draft guidelines circulated with the agenda papers. The representatives of the Ministry of Power felt that too restrictive a framework would demotivate prospective investors. The representatives of the coal sector, however, felt that unrestricted access to coalfields in the vicinity of the present working mines of CIL or in the areas surrounded by such CIL workings would result in avoidable interference. They also felt that their development plans also should be kept in view while deciding blocks to be offered for captive mining. They also pointed out that significant investments are made by the coal companies in the general infrastructure which may be serving in the proposed blocks. The representatives of the Railways cautioned that the existing movement plans should not be disturbed by this policy of allowing private investors to operate mines for their captive use for the power plants. 5. While conceding that all these were relevant considerations, the Chairman pointed out that the primary objective of the new scheme was to mobilise additional resources for the supply of coal to the expanding power sector. Therefore, we should welcome the private parties entering the field while at the same time taking proper care of the legitimate concerns of the coal companies. It is only equitable that wherever investments have been made by the coal companies in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 178 of 389 exploration and specific infrastructural development, private investors taking advantage of the same would have to compensate the coal companies. Similarly, the location of these new blocks would have to take into account operational problems resulting from too close a proximity to the existing working of the coal companies. In regard to development plans of the companies wherever they are backed by financial resources in hand or in sight, the same will be definitely kept in view. So far as the railways are concerned it was clarified that the existing projects and their linked movement plans are not to be affected by new investment proposals which are only going to result in an additionality to the operations for which, of course, the railways will have to plan to strengthen their infrastructure either on their own or with “support” investments from the intending private enterpreneurs. 6. Summing up, the chairman mentioned that the proposed guidelines wold only be used as broad parameters in support of the new policy and not as rigid boundary lines for excluding the entry of private investors. The members endorsed this approach. 7. Based on this, the following guidelines were approved: (i) Preferably blocks in green field areas where basic infrastructure like road, rail links etc. is yet to be developed should be given to the private sector. The areas where CIL has already invested in creating such infrastructure for opening new mines should not be handed over to the private sector, except on reimbursement of costs, (ii) The blocks offered to private sector should be at reasonable distance from existing mines and projects of CIL in order to avoid operational problems. (iii) Blocks already identified for development by CIL, where adequate funding is on hand or in sight should not be offered to the private sector. (iv) Private sector should be asked to bear full cost of exploration in these blocks which may be offered. It was also agreed that while discussing proposals of power generating companies and identifying blocks the requirement of coal for about 30 years would be considered.” 170. Thus it is clear that the 1st screening committee merely finalised and thereby formulated the guidelines, which were to be followed by CIL and its subsidiary companies in identifying the coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 179 of 389 blocks which could be allocated for captive use to the private sector companies. This fact however can also be appreciated from yet another angle. As earlier mentioned, and as has been stated by PW-6 Sudhir Kumar Verma, PW-7 Balaswamy Akala and PW-15 Naresh Kumar Sharma in their deposition that CCL, CMPDIL and such other companies were functioning under CIL being its subsidiary companies. In turn, Ministry of coal was having administrative control over CIL and its subsidiary companies. Moreover, Joint Secretary, Coal was a member of CIL board. Thus, even though MOC was the nodal Ministry for allotment of coal blocks and the Screening Committee was also constituted in MOC, but as all the nationalised coal mines situated across the country were primarily under the control of CIL and its subsidiary companies and who only prior to amendment carried out in CMN Act, 1973 in the year 1993, were mainly carrying out mining operations in India with very few exeptions, so it was left to those companies only to decide as to which coal blocks, they were willing to let go for allocation to private sector companies. Thus, the proposed guidelines were submitted to screening committee, MOC by CIL Board, for consideration and finalisation. Accordingly, the Screening Committee, which in fact was headed by Additional Secretary, coal with Advisor (Projects) MOC as member convenor i.e. was comprising of senior officers of MOC, the nodal Ministry, decided in the first Screening Committee as to on what basis various coal blocks shall be identified for being allocated to private sector companies. In fact, as earlier mentioned prior to holding of 14th screening committee meeting on 18/19.06.1999, a communication dated 20.05.1999 was sent by A-6 N.N.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 180 of 389 Gautam to Chairman CIL asking him to provide the list of identified coal blocks which could be considered for allocation to private sector companies for their captive use in the forthcoming meeting of the Screening Committee. In response thereto, PW-15 N. K. Sharma, Director Technical, CIL submitted a list of such identified coal blocks to Ministry of coal vide letter dated 27.05.1999.
171. Thus, it is apparent from the record that the screening committee merely formulated and finalized the guidelines on the basis of which coal blocks were to be identified by CIL or its subsidiary companies for allocation to private sector companies for their captive use, but the actual job of identifying various coal blocks on the basis of said guidelines actually remained with CIL and its subsidiary companies only. It is also clear that the CIL Board used to undertake such an exercise on the basis of inputs received from its subsidiary companies only and the said list used to form the basis for allocation of various coal blocks in favour of different applicant companies, by the Screening Committee.
172. The file of MOC Ex. P-130 (colly) (D-81) further shows that by the time meeting of 3rd Screening Committee was held on 27.09.93, the mandate of the Screening Committee came to be expanded. The heading of the minutes of 3rd Screening Committee as is available from page 36-43 in file Ex. P-130 (colly) (D-81) read as under:
“Minutes of the third meeting of the Screening Committee for screening proposals relating to Captive Mining by power generating companies and companies engaged in the manufacture of Iron and Steel held on 27.09.93 at 3 p.m. in the Ministry of Coal, Shastri Bhawan, New Delhi.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 181 of 389 173. All the subsequent Screening Committee meetings including 14th Screening Committee meeting where the case of M/s CTL was discussed were also having the same mandate except that pursuant to CMN (Amendment) Act, 1996, cement was also added as an end use. Title of the record notes of discussion of 14th Screening Committee meeting Ex. PW 15/DX-4 (colly) (available at page 133-162 in D-62) read as under: “Record Notes of discussion of the 14th meeting of the Screening Committee held on 18/19.6.1999 at Scope Building, Lodi Road, New Delhi, under the Chairmanship of Additional Secretary (Coal) for screening proposals relating to captive mining by power generating companies and companies engaged in the manufacture of Iron, Steel and Cement. 174. For reference purposes, it will be also pertinent to mention that though after 14th Screening Committee meeting, the constitution of the Committee was modified qua certain aspects vide office memorandum dated 26/28.10.99, Ex. PW 14/H-1 (available from page 99-100 in D-81) but its mandate remained the same. The relevant office memorandum dated 26/28.10.99 issued in this regard by MOC read as under:
OM dated 26/28.10.99, Ex. PW 14/H-1 (available from page 99-100 in D-81) “ No.47011/15/95-CPAM Government of India Ministry of Mines and Minerals Department of Coal New Delhi, the 26th / 28th October, 1999.
OFFICE MEMORANDUM
Subject: Constitution of a Screening Committee for screening proposals received for captive mining by companies engaged in generation of power and manufacture of iron, steel and cement.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 182 of 389 In supersession of this Ministry's Office Memoranda No. 13011/3/92-CA dated 14.7.92 and 5.8.93, a Screening Committee for screening proposals for allocation of coal / lignite blocks for manufacture of iron/steel, captive production of power and production of cement in the public/private sector is reconstituted as under: 1. Additional Secretary Ministry of Coal - Chairman. 2. Adviser (Projects) Ministry of Coal -Member-Convenor 3. Joint Secretary & Financial Adviser Ministry of Coal - Member 4. Joint Secretary (LA) Ministry of Coal - Member 5. Representative of Ministry of Railways New Delhi - Member 6. Representative of Ministry of Power New Delhi - Member 7. Representative of Concerned State Govt. (Revenue Deptt.) - Member 8. Director (Technical), CIL, Calcutta - Member 9. Chairman-cum-Managing Director, CMPDIL Ranchi - Member 10. CMD of concerned subsidiary company of CIL/NLC -Member
Sd/- 26/10/99 (T.K. Ghosh) Director-cum To 1. The Chairman, Railway Board, Ministry of Railways, Rail Bhawan, New Delhi. 2. The Secretary, Ministry of Power, Shram Shakti Bhawan, New Delhi. 3. Chief Secretaries of State Governments. 4. Chairman, Coal India Ltd., 10, Netaji Subhas road, Calcutta 700001 5. CMDs of all the subsidiaries companies of CIL, Calcutta. 6. Chairman-cum-Managing Director, NLC, P.O. Neyveli, Distt- South Acrot, Tamil Nadu.
Copy to:- All Officers. All Sections. Sd/- 26/10/99 (T.K. Ghosh) Director-cum”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 183 of 389 175. Thus, from the aforesaid constitution of Screening Committee(s) it is clear that the Committee was constituted for screening proposals relating to captive mining by power generating companies and companies engaged in the manufacture of iron and steel and cement. What is however important to note is that the Screening Committee was neither constituted nor it ever met to consider applications received from companies who proposed to establish washeries only, even though washery was mentioned as a specified end use under CMN (Amendment) Act, 1993 for allotment of a captive coal block to private sector companies.
176. Thus from the aforesaid discussion, it is clear that the Screening Committee was competent to consider only such applications as were received for seeking allocation of a coal block which was governed by CMN Act,1973 and that too where the captive use of the coal was to be made either for generation of power or for production of iron and steel or cement. Accordingly, all other a pplications wherein the proposal did not fit into the eligibility criteria as above, ought to have been filtered out in MOC itself for the same would have been beyond the scope of consideration of the Screening Committee. This course of action was not only in accordance with the scheme of CMN Act, 1973, but is also the only logical and legal conclusion arising from out of the overall facts and circumstances as discussed above. Accordingly, as regard the application of M/s CTL also this was to be the most prudent, logical and legal course of action, since it also did not propose to use the washed coal in any of the above stated end use. I shall be discussing at a slightly
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 184 of 389 later stage that the company M/s CTL had not provided or even claimed any tie up in this regard with any other company which was engaged in any of the said end use and the accused public servants did not care to ask for the same from the company at any point of time. It will be also pertinent to mention that the agenda note for the 14th Screening Committee meeting was approved by A-6 N.N. Gautam, Advisor (Project) and Member Convenor, screening committee and A-5 P.K. Banerjee, Additional Secretary, Coal and chairman screening committee. They both were clearly acting in their dual capacity, as above.
177. The conclusion that the application of M/s CTL ought to have been closed in MOC itself and should not have been placed before 14th screening committee for consideration is also supported from similar action undertaken by Ministry of Coal officers with respect to other applicant companies. A perusal of note dated 19.05.99 of Sh. R.S. Negi, Dealing Assistant, CPAM Section, [available from note sheet page 28-30 in MOC file Ex. P-130 (Colly) (D-81)] shows that while seeking approval from senior officers to send the applications received in MOC to Administrative Ministries and CIL for their comments, he observed that one application of M/s Oswal Chemical and Fertilizers, seeking allocation of a mining block is for a fertilizer complex. He further stated that since the said request does not confirm to the laid down policy for allocation of coal mining blocks so the said application has to be excluded from the purview of consideration of allocation of mining blocks. Similarly, he also made certain observations about another application pertaining to M/s Bhadra Chalam Power Company Ltd and while referring to some prior
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 185 of 389 proceedings undertaken in MOC and earlier Screening Committee meetings about similar request of the said company for seeking allocation of a coal mining block, he proposed in para No. 4 of his note that the said case needs to be treated as closed one. Accordingly, the note proceeded to deal with the remaining 25 applications. The said note after travelling through the desk of Smt. Neera Sharma, Section Officer and Under Secretary, Sh. B.L. Dass went to the desk of Advisor (Projects) and Member Convenor, A-6 N.N. Gautam and he approved the said note vide his signatures dated 20.05.99 and recorded an endorsement “Pl. issue today”. The purpose of referring to the aforesaid note dated 19.05.99 of Sh. R.S. Negi is not to look into the correctness or otherwise of the reasons for which the application of M/s Oswal Chemical and fertilizers or that of M/s Bhadra Chalam Power Company Ltd. were closed in MOC but only to show that the applications which were either found to be not covered within the provisions of CMN Act, 1973 or were otherwise not deemed appropriate to be put up before the screening committee were closed in MOC itself. This course of action was also duly approved by A-6 N.N. Gautam. Thus, it will be completely wrong to state that all applications received in MOC seeking allocation of a captive coal block were required to be put up before the Screening Committee for consideration, irrespective of the fact as to whether the request made was beyond the scope of CMN Act, 1973 or was beyond the mandate of Screening Committee or not.
178. Thus, when it was well to the knowledge of both the accused MOC officers that the Brahmadiha coal mining area whose allocation is being
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 186 of 389 sought by company M/s CTL is not a nationalised coal block under CMN Act, 1973 and consequently could not have been identified either by CIL or its subsidiary companies or could not have been even recommended by the Screening Committee to CIL for including in the list of identified coal blocks, so the application of M/s CTL for identification and allocation of said abandoned coal mining area could not have been considered by the Screening Committee. In fact, for the said reason only 14th Screening Committee did not even make any recommendation to CIL or any of its subsidiary companies to include the said abandoned coal mining area in the list of identified coal blocks to be allocated to private sector companies much less to M/s CTL for captive use, as was otherwise used to be done by the various screening committees.
The three issues under consideration accordingly stands answered as under: Issue No. (1): What was the mandate of Screening Committee as was constituted in MOC. Ans. The mandate of Screening Committee constituted in MOC was to consider only such applications received for allocation of coal blocks for captive use, where the applicant companies intended to use the coal either towards generation of power or production of Iron & Steel or towards production of cement. The applications of the companies which only intended to establish washery without any proposal to use the middlings or washed coal in any of the specified end use(s) i.e. generation of power, production of iron and steel or production of cement were clearly beyond the scope and mandate of the Screening committee.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 187 of 389 Issue No. (2): Whether Screening Committee was within its rights to consider allocation of a non-nationalised and consequently a non- identified coal mine. Ans. No. The screening committee was competent to consider allocation of only nationalised coal blocks and thus it was not within its rights to consider allocation of a non-nationalised and consequently a non- identified coal block.
Issue No. (3): Whether application of M/s CTL seeking identification and allocation of Brahmadiha Coal Block i.e. a non-nationalized coal mine and consequently a non-identified coal mine was required to be put up before the Screening Committee or it ought to have been closed/rejected in MOC itself. Ans. The application of M/s CTL seeking identification and allocation of a non-nationalised and consequently a non- identified coal block thus could not have been placed before 14th Screening Committee for its consideration and the impugned application in fact should have been closed/rejected in MOC itself as was the decision taken in MOC qua some other applications.
179. From the aforesaid discussion, it stands conluded that the application of M/s CTL ought not to have been placed before 14 th Screening Committee and should have been closed/rejected in MOC itself, for the same was for identifying and allocation of a non- nationalized coal block. However, I still proceed to deal with the prosecution case further in the light of submissions of Ld. Counsels for the accused persons that all the applications received for allocation of a coal block for captive use were liable to be put up before the Screening Committee by MOC irrespective of the fact whether the coal block whose
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 188 of 389 allocation was sought was nationalized or not. In other words, even if it is presumed that MOC had no power to reject any application at its own level than what ought to have been the proper course of action to be undertaken by 14th Screening Committee under the law or whether 14th Screening Committee was well within its right under the relevant provisions of law to allocate such a non-nationalized abandoned coal mining area having small reserves in isolated pockets in favour of M/s CTL.
Issue No. (4): Whether allocation made by 14th Screening Committee in favour of M/s CTL for allocation of said abandoned Brahmadiha coal mining area was in accordance with law. 180. As already discussed at length, the Screening Committee was primarily constituted by MOC so as to deal with the applications which sought identification and allocation of a nationalised coal block for their captive use. As also discussed, such captive use of coal ought to be in one or more of the three specified end uses. It has also been discussed and demonstrated that CIL in consultation with its subsidiary companies used to identify coal blocks from out of nationalized coal blocks for allocation to private companies for their captive use. As also pointed out, the guidelines for identification of such coal blocks were proposed by CIL Board and on the basis of same the first Screening Committee formulated the guidelines which were to form primarily the basis of identifying such coal blocks by CIL and its subsidiary companies. As also earlier mentioned there were certain nationalized coal blocks considered by the Screening Committee, which were not yet identified by CIL and its subsidiary companies for allocation to private sector companies for
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 189 of 389 captive use, but their allocation was sought by certain applicant companies. Thus wherever the Screening Committee found any such coal block to be suitable for allocation to any applicant company then it either used to ask the said applicant company to discuss it with CIL and its subsidiary companies to get the coal block included in the list of identified coal mines or on its own the Screening Committee used to request CIL to include it in the identified list of coal mines so that the same could be allocated to private companies for captive use. Certain illustrative cases can be pointed out in this regard from the minutes of earlier screening committee meetings. Minutes of 12th Screening Committee meeting held on 03.04.1998 with respect to Agenda item IV and Agenda Item V makes an interesting reading in this regard.
Minutes of 12 th Screening Committee meeting available at page 8 in file Ex. D-2 (Colly): “AGENDA ITEM NO.IV Proposal yet to be discussed fresh proposal (Power Sector) 1. M/s. INDIAN ALUMINIUM CO. LTD. - Expansion plan of Muri Alumina plant M/s INDALCO has submitted a request for Jagaldagga mine block in Bihar to meet their expansion needs. This request was not accepted by the Ministry of coal as the block was not included in the list of captive mining blocks. The company subsequently requested for Tubed block in the Auranga coalfield having 250 mt. reserves. The Committee felt that the new block requested for was too large for the needs of the company. The Committee advised the company to ineract with CCL and CMPDIL to examine the possibility of sub- blocking of Tubed block or suitability of mining Chiru block likely to contain 87 mt. of reserves. This was agreed to by the representative of INDALCO and a report will be submitted to the Committee within 3 months time. AGENDA ITEM NO. V Sponge Iron Plant (Review) 1. M/s.PRAKASH INDUSTRIES LTD. - Sponge Iron Plant in M.P. The party had earlier been asked to interact with SECL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 190 of 389 to ascertain the suitability of Choita block in the Hasdeo-Arand coalfield. SECL have already recommended that Choita block regionally explored (60 mt.) can be allocated to M/s Prakash Industries Ltd. It falls in the Hasdeo Arand coalfield which has entirely been reserved for captive mining. In the light of this position, the Screening Committee will consider allotment of the Choita block to M/s Prakash Industries Ltd. Once this block is included in the list of captive mining block by CIL. The company has agreed to conduct detailed exploration of block on its own. The screening committee asked CIL to take necessary action for inclusion of this block in the identified list of captive mining block.” Minutes of 10 th Screening Committee meeting held on 03.04.96 available in file Ex. DW 2/B (Colly) (available at page No. 194 in D-79): 14. M/s Malvika Steel Products / M/s Usha (India) Ltd. – Integrated Steel Plants. The company was informed that none of the blocks requested for by them is available for captive development at present. They were advised to inter-act with CCL to consider whether any of the blocks identified by that Company would be acceptable to them and report back to the Committee. They were also asked to approach the Ministry of Steel for their specific recommendation/views. 15...... 16...... 17. M/s Nagpur Alloys Casting Ltd. – Integrated Steel Plant at Siltara, Raipur, M.P. The Company was informed that none of the blocks requested for by it was available for captive development at present. The company was advised to iner-act with CCL, but the Company indicated being not interested in obtaining mining blocks in CCL command area. The matter was, therefore, dropped. 18. M/s Nippon Denro Ispat Ltd. – Integrated Steel Plant at Dolvi, Raigad, Maharashtra. The Company was informed that none of the mining blocks requested for by it was avialable for captive development at present. The proposal was, therefore, dropped.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 191 of 389 181. Similarly the minutes of 13th Screening committee meeting Ex. DW 2/C (Colly) held on 24.08.98 show that while reviewing the blocks already alloted to M/s Nippon Denro Ispat Ltd., the committee decided to allot Kilhoni block to the company while observing interalia that since WCL will not be able to optimally mine the said coal block so in order to ensure mining of coal from the said block in an optimal manner, it be alloted to M/s Nippon Denro Ispat Ltd., as they will be also mining the adjacent block. The committee thereafter directed CIL to include the said coal block in the list of captive mining blocks.
182. Thus a bare perusal of the aforesaid observations clearly show that the primary job of identification of coal blocks, which could be released for allocation to private sector companies for captive mining was that of CIL and it used to send a list of all such coal blocks to MOC for further allocation to private sector companies. Screening Committee, MOC thereafter only used to identify (select) the most suitable coal block from out of said list of coal blocks prepared by CIL. However in both the situation the main category to which any such coal block, be it already identified by CIL or was requested subsequently to be included in the list of identified coal blocks was from out of the generic list of nationalised coal mines only i.e. The coal blocks which stood covered by CMN Act, 1973.
183. Thus, as Brahmadia Coal block was not a nationalised coal block, so it was for the said reason only that 14th Screening Committee while recommending allocation of Brahmadiha coal mining area in favour of M/s CTL neither asked the applicant company to request CIL to include it
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 192 of 389 in the list of identified coal blocks nor itself requested CIL to include the said coal mining area in the identified list of coal blocks. It was well to the knowledge of A-5 Pradip Kumar Banerjee, Additional Secretary, Ministry of Coal and Chairman 14th Screening Committee and A-6 Nitya Nand Gautam, Adviser (Projects), Ministry of Coal and Member Convenor, 14th Screening Committee that the said abandoned coal mining area was not a nationalised coal mine under CMN Act, 1973. They knew it well from the earlier communications received from CIL, CMPDIL and CCL and also from the notings of various officers/officials of MOC itself that the said abandoned coal mining area being not nationalized could not have been identified for allocation to private companies for captive use. In fact, applicant company M/s CTL had also mentioned in its application dated 09.05.1998 that the area whose allocation is being sought is an abandoned coal mine and was thus not mentioned in the schedule to CMN Act, 1973.
184. Thus the earlier conclu sion that the Screening Committee could not have alloted any such non-nationalized abandoned coal mining area in favour of any company much less to M/s CTL further gets reinforced.
The aforesaid issue however can also be appreciated from another view point.
As mentioned earlier, 14th Screening Committee while recommending allocation of said abandoned coal mining area in favour of M/s CTL inter-alia observed as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 193 of 389 “16. M/s Castron Technology Ltd. The details of the proposal were given by Adviser (Projects). He stated that the party has requested for the allotment of 105.153 ha. of abandoned coal mining area of Brahmadiha block of CCL in the district of Giridih which was abandoned in 1916 and is now full of water. The extractable reserves available in the mine are roughly estimated to be 2.215 million tonnes in the remanent pillars and no large scale mining is possible for these reserves. The party proposes to extract these reserves by opencast mining @ 0.15 million tonnes per annum. With this production the estimated reserves would last for about 15 years. The representatives of CCL and CIL informed the Committee that CCL/Coal India has no programme of working these reserves at any point of time and according to them there is no working mine belonging to CCL within the vicinity of 2.5km. On a query on end use of coal, the representative of the party informed that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke in their coke oven plant presently lying idle for use in another unit of their's in Bokaro industrial area. It was clarified by the party that the washery will be relocated after 15 years when the coal reserves in the mine are exhausted. The middlings produced during washing are proposed to be utilised for generation of power in their 2x5MW CPP which they would be setting up in two phases of 5MW each. The Committee noted that as per recent guidelines for opencast captive block, the mine does not fit in the criteria of a captive block. It further noted that these reserves are either permitted to be exploited by a private party or the reserves are allowed to be lost forever/unsafe illegal mining. The Screening Committee after detailed deliberation and in view of conservation of coal decided to allot 105.153Ha. of abandoned coal mining area of Brahmadiha block in Giridih District, CCL subject to the following condition: i) Hydrogeological studies to be carried out by the party in consultation with State Ground Water Board with a view to see that dewatering of this mine does not seriously affect the hydrogeological balance of area. ii) Extraction of coal barrier between the abandoned mine and CCL lease-hold shall not be permitted and in case dams in connection through the barrier are found damaged shall be effectively reparied. Iii) All precautions will be taken to ensure that fires do not break
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 194 of 389 out due to dewatering of the area. If any fire does break it shall effectively be dealt by the party. iv) All mining operations shall be carried out with due approval of DGMS and all provision of law shall be complied with. The above will be subject to relaxation of guidelines by Ministry of Coal regarding allotment of blocks with minimum extraction of 1.00 mtpa”. (Emphasis supplied)
185. Thus the two prime considerations which governed the discretion exercised by the Screening Committee in favour of M/s CTL were that the reserves available in the impugned abandoned coal mining area are very small i.e. only to the tune of 2.215 million tonnes and that too in the remnant pillars and thus no large scale mining was possible to extract the same. Another reason as noted by the Committee was that the said reserves if not permitted to be exploited by a private party then the same will be lost forever or will be subjected to unsafe illegal mining. It is for the said two considerations that the Screening Committee with a view to ensure conservation of coal decided to allot the said abandoned coal mining area in favour of M/s CTL.
186. However, in this regard if Section 3(c) CMN Act, 1973 is seen then it is apparent on the face of record that the reasons for which the said small reserves were permitted to be mined by M/s CTL by making allocation of the said coal block in favour of the company by 14th Screening Committee, were clearly in contravention to the said provision. Before adverting further, it will be thus worthwhile to have a brief glance over Section 3 (c), CMN Act, 1973:
“3(c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 195 of 389 corporation, referred to in Cl.(a): Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sub-lease to any person in any area on such terms and conditions as may be prescribed in the instrument granting the sub-lease, if the Government, company or corporation is satisfied that— (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a co-ordinated and integrated manner, and (ii) the coal produced by the sub-lease will not be required to be transported by rail”
187. Thus from a bare reading of Section 3 (c), CMN Act, 1973, it is clear that where the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner and also that the coal produced will not be required to be transported by rail then the said area can be given to a person only by way of a sub-lease and that too by a Government Company or Corporation. Thus, it is clear that Brahmadiha coal mining area which was having small reserves in isolated pockets could not have been allotted in favour of any private company directly by the Screening Committee. In fact, the post-allocation notings made by MOC officers in the files of MOC made in connection with the approval of mining lease in favour of M/s CTL also contains similar observations about the applicability of Section 3 (c), CMN Act, 1973. Moreover, as the company M/s CTL had stated vide its application dated 22.04.99 that the washed coal will be used in their iron foundry in Bokaro so it also became clear that the coal so washed will be required to be transported to Bokaro.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 196 of 389 However, the said issue becomes inconsequential as to whether the coal was required to be transported by rail or by any other means of transport as 14th Screening Committee while allocating the said abandoned coal mining area in favour of M/s CTL did not mention anything about the proposed end use of washed coal. Nothing was mentioned as to where the washed coal would be captively used. This fact was also noticed by MOC officers in their notings in the subsequent years whenever the issue relating to development of end use project by M/s CTL came into consideration.
188. It will be pertinent to mention that the mining lease qua Brahmadiha coal mining area as was initially executed in favour of M/s CTL pursuant to allocation made by 14th Screening Committee, came to be subsequently transferred in favour of another company i.e. A-3 Castron Mining Ltd., owned by Sh. P.K. Agarwalla (accused since deceased), brother of A-2 M.K. Agarwalla.
(At a slightly later stage while dealing with the charge for the offence of cheating and also theft i.e. section 420 IPC and section 379 IPC as framed against the private accused persons, I shall be briefly dealing with the circumstances leading to transfer of lease in some further details). 189. At this stage, it will be however suffice to mention that in the year 2012, MOC after long drawn proceedings had proposed to cancel the allocation of impugned abandoned coal mining area as was made in favour of M/s CTL. Since by that time the mining lease was transferred in the name of M/s CML, so a reply to the said show cause notice was submitted by M/s CML under the signatures of its Chairman Sh. Anup
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 197 of 389 Agarwalla s/o Mr P.K. Agarwalla. The said reply makes a very interesting reading in as much as it also shows the true intention of M/s CTL and its directors in obtaining allocation of impugned abandoned coal mining area from 14th Screening Committee.
190. For a ready reference the said reply dated 15/24.05.2012 (available from page 150-158 in D-50) has been reproduced here under:
Reply dated 15/24.05.2012 (available from page 150-158 in D-50)
“REGD. OFFICE: 504, DIAMOND PRESTIGE, 41A A.J.C. BOSE ROAD, KOLKATA-700017 TEL: (033) 3022 1393 FAX: (033) 22319121 CASTRON MINING LIMITED BRAHMADIHA OPENCAST COALMINE PROJECT
Ref.: CML/BOCP/MoC/2012-13/009 15th/24th May, 2012 To, The Under Secretary, Ministry of Coal, Government of India, Shastri Bhavan, New Delhi.
Sub: Reply to show cause notice and seeking guidance from Ministry of Coal on difficulties being faced by us in starting commercial operation of our small and isolated Brahmadiha Opencast Coalmine Project having meager reserves of 2.2 million tonnes granted to us under Section 3(3)(c) of Coal Mines (Nationalisation) Act, 1973.
Ref: (1) Ministry of Coal letter No. 13011/48/2012-CA-I dated 4th May, 2012. (2) Our letter No. CML/BOCP/MoC/2011-12/006 dated 11/18th July 2011. (3) Our letter No. CML/BOCP/MoC/2006/0208 dated 8th February 2006.
Dear Sir,
Brahmadiha coal mine is an abandoned small and isolated coal mine
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 198 of 389 located in Giridih district of Jharkhand, is leased to our company with meager resources of approximately 2.2 million tonnes and targeted annual production of 1.5 lakh tonnes per annum. We are in a position to go in commercial production in less than six months and seek Ministry of Coal's clarification and guidance as sought by us by our above referred letters of February 2006 and July 2011.
We beg to submit briefly the following facts on the issue of allocation of Brahmadiha coal mine made under Section 3(3)(c) of the CMN Act, 1973 by the Ministry of coal and clarification on the end use which was NOT specified by the Ministry of Coal in the allocation letter.
1) Ministry of Coal allocated Brahmadiha coal mine as per letter 1 dated 1st September 1999 based on the recommendations of the 14th Screening ______1Letter No. 47011/(13)/99-CPAM dated 1st September 1999 ______Page 2 of 7
Committee meeting held on 18th / 19th June 19922. After detailed deliberation the Screening Committee had decided to allot 105.153 hectares of abandoned coal mining area of Brahmadiha coal mine and for conservation of coal. The above referred Screening Committee minutes are extracted below:
“On a query on end use of coal, the representative of the party informed that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke in their coke oven plant presently lying idle for use in another unit in their Bokaro industrial area. It was clarified by the party that the washery will be relocated after 15 years when the coal reserves in the mine are exhausted.
The middlings produced during washing are proposed to be utilized for generation of power in their 2x5 MW CPP which they would be setting up in two phases of 5 MW each.
The Committee noted that as per the recent guidelines for opencast captive coal block, the mine does not fit in the criteria of a captive block. It further noted that these reserves are either permitted to be exploited by a private party or the reserves are allowed to be lost forever / unsafe illegal mining.
The Screening Committee after detailed deliberation and in view of conservation of coal decided to allot 105.153 Ha of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 199 of 389 abandoned coal mining area of Brahmadiha block in Giridih District, CCL.....” (Emphasis added)
Neither in the allocation letter nor in the Screening Committee minutes is there any mention of captive use/specified end use as defined under Section 3(3)(a)(iii) of the CMN Act whereas there is clear mention in the minutes that the mine does not fit the criteria of captive block. This also amply clarifies that there is no requirement of setting up of a specified end use since no end use was defined and associated with the allocated coal block.
2) The Screening Committee also recorded in their minutes that the mine does not fit in the criteria of a captive block. It further noted that these reserves are permitted to be exploited by a private party or the reserves ______2Screening Committee Meeting held on 18th / 19th June 1999 recommendations circulated to the members and others concerned vide Ministry of Coal's OM No. 47011/13/99-CPAM dated 30th July 1999 ______Page 3 of 7
are allowed to be lost forever/unsafe illegal mining. During the discussion held with the company representative with the Screening Committee, the company representative informed “that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke oven plant. The middlings produced during washing are proposed to be utilised for generation of power in their 2x5 MW CPP which they would be setting up in two phases of 5MW each.” HENCE THE END USE AS PER MINUTES OF THE SCREENING COMMITTEE COULD BE METALLURGICAL COKE WHICH IS AN INTERMEDIARY RAW MATERIAL FOR STEEL MANUFACTURING. Also as per the specified end uses mentioned under Section 3(3)(a)(iii) of the CMN Act, the end use could be washing of coal. However, since Brahmadiha coal mine is a small and isolated mine and allotted under section 3(3)(c), its allocation was done without any specified end use under section 3(3)(a)(iii) of CMN Act.
3) Moreover, in the allocation letter no condition pertaining to captive end use plant is incorporated since the block clearly was an abandoned block and therefore could not be fitted in the criteria of a captive coal block.
4) We got the mining plan approval from Ministry of Coal on 2nd March, 20033 wherein also there is no mention of any specified end use plant or purpose.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 200 of 389 5) The mining lease prior approval of the Ministry of Coal was given on 18th June 20014. In the mining lease approval surprisingly the condition was incorporated that “the coal produced from the captive coal mine shall be exclusively used in the end use plant.” This somehow was in direct conflict with the terms and conditions of the allocation letter and Screening Committee deliberations where the mine is termed as abandoned and not fit as captive block. Moreover, the reserve is of Metallurgical grade coal and hence cannot be used in power generation.
6) After the prior approval was sent to the Govt. of Jharkhand for executing the mining lease, the State Government interpreted that the said block has been allocated for captive mining for generation of power. The company represented to the Ministry of Coal to clarify the position in this regard. Ministry of Coal after examination of the representation ______3Letter No. 13016/8/99-CA dated 2nd March, 2000 4Letter No. 13016/8/99-CA dated 18th June, 2001
Page 4 of 7
clarified to the State Government of Jharkhand on 19th Jul, 20055 that Brahamadiha coal mine has been allocated as an abandoned mine under Section 3(3)(c) of CMN Act, 1973 on conservation ground for coke making from the washed coal.
7) From the facts enumerated above, the block stands established from inception as an abandoned mine and from the clarification furnished to State Government, the same stands allocated under Section 3(3)(c) of the CMN Act. Clearly, the mine is not for captive purpose as it would not sustain end use project and scientific mining. It may be construed, that washing of coal and manufacture of metallurgical coke are the end uses. Here we would like to mention that the End use specific allocations are made under Section 3(3)(a)(iii) of the said Act. The allocation letter is silent on both these aspects. The above points have been raised by us earlier and Ministry of Coal is still considering our representations of 2006, and 2011 mentioned in the beginning.
8) In the meantime, after the Review Committee meeting took place in the month of January, 2012, the Ministry of Coal has issued a show cause notice on 4th May, 20126 for Brahmadiha coal mine. The company has been asked to explain within a period of 20 days as to why the delay in the development of coal block should not be held as violation of the terms and conditions of the allotment of Brahmadiha coal mine.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 201 of 389 9) We would like to humbly submit that the company attended the Review Committee Meeting and gave a detailed representation about the development of the coal block vide our letter dated 10th January, 20127 (copy enclosed). Even in the show cause notice the milestones referred to in the milestones table for development of coal block have been shown achieved by the company except for mine opening permission. As regards mine opening permission, we would like to state that the company has procured 33.659 hectares of surface rights for the mines on 18th August, 2006. The DGMS on 15th June, 2010 has granted permission for mine safety under the relevant rules. All other statutory clearances like Ministry of Environment & Forests permission for environmental clearance and pollution control certification from Jharkhand State Pollution Control Board are also ______5Letter No. 13016/8/99-CA-I dated 19th July, 2005 6Letter No. 13011/48/2012-CA-I dated 4th May, 2012 7Letter No. CML/BOCP/MoC/007 DATED 10th January, 2012 ______Page 5 of 7
obtained. Thereafter the company applied to Coal Controller's Organisation on 25th August, 2010 for mine opening permission. We followed up the mine opening permission with Coal Controller by giving a reminder on 6th December, 20108. Since then the matter is pending with the Coal Controller's organisation. It is submitted that without the grant of mine opening permission which has to be granted by Coal Controller, we are unable to proceed to start production. Therefore no milestone on the development of coal block as per the milestone chart shown in the show cause notice is pending on behalf of us. As regards end use plant, there has been no reference made by the Ministry of Coal for development of end use plant, hence no mention of this is made herewith. We hope that this explanation would sufficiently reflect our seriousness to develop the block. We assure the Government of bringing the block into production as soon as the mine opening permission is granted on our block.
10) Moreover, we are incurring huge expenses in maintaining mining staff, office, security guards, machinery and equipment and administrative expenses at the mine site. To date, we have incurred more than Rs. 15 crores in the development of the mine. The mine is ready to achieve commercial production subject to our getting mine opening permission.
11) As Brahmadiha coal mine was allotted under Section 3(3)(c) of the CMN Act, 1973 by the Ministry of Coal and no end use is specified in the allocation letter, we humbly seek categorical clarification on the following
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 202 of 389 so that the matter is settled once for all and the coal production from the mine starts without any further delay and conservation of coal is achieved:
a) The Brahamadiha coal mine is categorised as an abandoned mine as recorded in the minutes of the screening Committee which recommended the allocation and subsequently in the allocation letter same has been incorporated. There is no mention of specific end use in both these critical documents. The allocation is not made under Section 3(3)(a)(iii) of the CMN Act which specifies the end uses for captive allocation. ______8Letter No. CML/BOCP/2010-2011/1206 dated 6th December, 2010 ______Page 6 of 7
b) Since the allocation letter did not mention any end use under Section 3(3)(a)(iii) of the Act, Ministry of Coal has already clarified to State Government of Jharkhand by letter dated 19 th July 2005 that the said block is allocated under Section 3(3)(c) of the CMN Act, 1973. Under this Section, the captive end-use condition is not envisaged and stipulated in the CMN Act. This letter posed the condition of development of washery and coke oven plant by the allocattee party.
c) Metallurgical coke is not a defined end use as per CMN Act, 1973 whereas we have been regularly asked to set up a washery and coke oven plant. Though the company is ready with its coke oven plant and washery and is all set to commission as and when the Ministry clarifies the above position and Coal controller grants us the mine opening permission.
d) It may be noted that the said block is an abandoned mine and is not in the category of captive block. This means that it can never match captive block criteria since the mining and other ground realities of this abandoned block are completely different. This allocation is, therefore, considered under Section 3(3)(c) and allocated on conservation grounds. These basic conditions and qualities of the block stand permanent and would remain until the life of the mine.
e) There is no pendency of any milestone by us in developing the coal block and we are only awaiting the mine opening permission of the CCO. The explanation to show cause notice is already given above.
SUMMARY:
Brahmadiha is a small and isolated mine and allotted to us under Section 3(3)(c) with the coal apparently ear marked for use in coal washery and production of metallurgical coke. However, there is confusion in (a)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 203 of 389 Ministry of Coal's website of allocated blocks which lists our block as captive for iron and steel and (b) in our lease deed which ear marks the coal for use in power plant even though the coal is of metallurgical grade. This lack of clarity in our various documents due to reasons beyond our control are holding our project back and we are not getting mine opening permission even though we have applied for the same more than 12 months ago. ______Page 7 of 7
PRAYER:
We beg Ministry of Coal to please vacate the show cause notice and issue appropriate orders as follows:
1) To clarify that Brahmadiha opencast coal block is granted under Section 3(3)(c) of the Coal Mines (Nationalisation) Act, 1973, by correcting the entry for end-use at Serial Number 15 in the list of coal blocks uploaded in the Ministry's website from 'Iron and Steel' to that of 'allocated under section 3(3)(c)'. 2) To remove the conditions imposed in Coal Controller's permission for opening of coal seam of Brahmadiha coal block that erroneously earmarks the coal for use in power plant. 3) To instance Government of Jharkhand for incorporating the above clarifications appropriately in the lease deed. 4) To grant us mine opening permission.
Thanking you,
Yours sincerely, For Castron Mining Limited. Sd/- Anup Agarwalla Chairman” Building warm relationships MAIN ROAD, P,O. PACHAMBA, GIRIDIH – 815316, JHARKHAND, TEL: (06532) 250449, 250450. FAX: (06532) 250747 CORP. OFFICE: 84, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI – 400021. TEL: +91 22 40600700. FAX: +91 22 4060 0705 (Emphasis supplied by me)
191. Thus from the aforesaid reply of company M/S CML also it is once again clear that neither in the allocation letter nor in the record note of 14th Screening Committee meeting there was any mention of captive use of washed coal in any specified end use as provided in CMN Act, 1973
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 204 of 389 and also that there is a clear mention in the minutes that the mine does not fit the criteria of captive block. The allottee company in fact further went on to state in its reply to the show cause notice that from the minutes of Screening Committee and the consequent allocation letter issued it was amply clear that there was no requirement of setting up any specified end use since no end use, was defined and associated with the allotted coal block. It also went on to point out that during the discussion held with the Screening Committee, the company representative informed that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke and that the middlings produced during the washing are proposed to be utilized for generation of power in their 2 X 5 MW CPP which would be set up in two phases of 5 MW each. It was further stated that the end use as per the minutes of the Screening Committee could thus be metallurgical coke and which is only an intermediatery raw material for steel manufacturing. It was further stated that as per Section 3 (3) (a) (iii) of CMN Act, 1973, the end use could be washing of coal but since Brahmadiha coal mine was a small and isolated mine and allotted under u/s 3 (3) (c) of CMN Act, 1973 so its allocation was done without any specified end use under Section 3 (3) (a) (iii) of CMN Act, 1973. It was reiterated that in the allocation letter no condition pertaining to captive end use was incorporated since the block was an abandoned block and could not fit in the criteria of captive block.
192. It was also mentioned in the reply submitted by the company that metallurgical coke is not a defined end use as per CMN Act, 1973. It thus sought clarification from MOC to clarify that Brahmadiha opencast coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 205 of 389 block was allotted under u/s 3 (3) (c) of CMN Act, 1973 and that necessary correction qua end use being iron and steel as was mentioned on the website of MOC may be done.
193. Thus when the claim of allocatee company as submitted in its reply to showcause notice is seen and considered in the light of the minutes of 14 th screening committee meeting and the allocation letter subsequently issued by MOC, it becomes clear that the allocation made by 14 th Screening Committee in favour of M/s CTL for allocation of said abandoned coal mining area was neither in accordance with law nor in tune with the objects which CMN (Amendment) Act, 1993 sought to achieve . The allocation so made was thus clearly an illegal act.
Accordingly issue no. (4) stands answered as under:
Issue No. (4): Whether allocation made by 14th Screening Committee in favour of M/s CTL for allocation of said abandoned Brahmadiha coal mining area was in accordance with law. Ans. The allocation of impugned non-nationalised and consequently non-identified coal block and that too having small coal reserves in isolated pockets by 14th Screening Committee in favour of M/s CTL was thus clearly not in accordance with law.
194. Before proceeding ahead, I would however also like to deal with yet another aspect as to what ought to have been the appropriate course of action for the 14th Screening Committee in case application of M/s CTL had come to be placed before it for consideration and it also thought it fit to identify and allot the said non-nationalized abandoned coal mining area in favour of M/s CTL.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 206 of 389 195. Though I am conscious that in the present proceedings, the Court is not required to substitute its own decision in place of that of Screening Committee or to even suggest any appropriate course of action but the same is required over here as it will show as to how by not adopting the procedure provided in law the screening committee yet again violated, its mandate. The discussion on the aforesaid aspect will only go to show that the course adopted by 14th Screening Committee headed by A-5 P.K. Banerjee with A-6 N.N. Gautam as Member Convenor thereof was clearly contrary to the legal provisions.
196. As earlier also mentioned under CMN Act, 1973 right, title and interest of the owners in relation to only such coal mines stood transferred to Central Government as were mentioned in the schedule to the Act. However u/s 3 (5) CMN Act, 1973, it was further provided as under:
“(5) If, after the appointed day, the Central Government, is satisfied, whether from any information received by it otherwise, that there has been any error, omission or misdescription in relation to the particulars of a coal mine included in the Schedule or particulars of a coal mine included in any such coal mine, it may, by notification, correct such error, omission or misdescription and on the issue of such notification, the relevant entries in the Schedule shall be and shall be deemed always to have been, corrected accordingly.”
197. Thus, if at all the Screening Committee was desirous of allocating the impugned non-nationalized abandoned coal mine in favour of any private sector company and was not inclined to follow the procedure laid down in Section u/s 3 (3) (c) of CMN Act, 1973 and it found that the said small area from out of the large Girdih coalfield has been omitted to be
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 207 of 389 mentioned in the schedule then it ought to have first made a recommendation to the Central Government to include the said abandoned coal mining area also in the schedule in accordance with Section 3 (5) CMN Act, 1973. In such a circumstance, the Central Government would have proceeded to consider the said recommendation of Screening Committee and in case, the said abandoned coal mining area was decided to be included in the schedule to CMN Act, 1973 then the same could have been requested to be considered by CIL Board for inclusion in the identified list of captive coal blocks to be allocated to private sector.
198. On the other hand, if the Screening Committee found the said piece of free hold coal bearing area to be belonging to State Government, as has also been argued by the accused public servants while relying upon some communication of CIL regarding some free hold areas of otherwise nationalized coal blocks, than the allotment of said free hold area would have been governed by the provisions of MMDR Act,1957. In such a situation also the screening committee could not have and ought not to have proceeded to allot the said coal block to M/s CTL on its own.
199. Thus, at the cost of repetition, it is reiterat ed that viewed either way the decision to allot said non-nationalized abandoned coal mining area in favour of M/s CTL by 14 th Screening Committee was clearly contrary to the clear and unambiguous provisions of law and was accordingly an illegal act.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 208 of 389 Section 43 IPC defines ‘illegal’ as under: ““illegal”, “legally bound to do”.- The word “illegal”is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be “legally bound to do” Whatever it is illegal in him to omit.”
200. Thus, from the aforesaid definition of the word ‘illegal’ it is clear that the allocation of impugned non-nationalised and consequently non- identified coal block and that too having small coal reserves in isolated pockets was clearly contrary to the provisions of CMN Act, 1973. It was thus clearly illegal for the 14th Screening Committee headed by A-5 P K Banerjee with A-6 N N Gautam as Member Convenor, to identify and allocate the said coal block in favour of M/s CTL.
201. In view of my aforesaid discussion, it thus stands well established that the application of M/s CTL ought to have been rejected/closed in MOC itself and should not have been even placed before the Screening Committee for consideration. It has also been discussed at length and concluded that even if the application of M/s CTL came to be considered by 14 th Screening Committee then also it ought to have rejected the same, as M/s CTL was seeking identification and allocation of a free hold and non-nationalised abandoned coal mining area. It has also been discussed at length and also concluded that even otherwise the allocation of said abandoned coal mining area made in favour of M/s CTL by 14 th Screening Committee was clearly in contravention of the provisions of CMN Act, 1973 and was thus an illegal act.
202. It is in the aforesaid background, that I now propose to deal with
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 209 of 389 the charges for various offences as have been framed against the accused persons. First of all, I propose to deal with the case against the accused public servants for the offence u/s 13 (1) (d) P.C. Act, 1988.
(J) Charge for the offence u/s 13 (1) (d) P.C. Act, 1988 against A-4 Dilip Ray, Minister of State for Coal, A-5 Pradip Kumar Banerjee, Additional Secretary, Ministry of Coal and Chairman 14th Screening Committee and A-6, Nitya Nand Gautam, Adviser (Projects), Ministry of Coal and Member Secretary, 14th Screening Committee. 203. Before proceeding to analyse the charge for the offence u/s 13 (1) (d) P.C. Act, 1988 as framed against the three accused public servants, it will be worthwhile to first have a glance over the said provision of law.
Section 13 (1) (d) P.C. Act, 1988 (as it stood at the time of commission of impugned acts)read as under:
"13. Criminal misconduct by a public servant. -- (1) A public servant is said to commit the offence of criminal misconduct, - (a)...... (b)...... (c)...... (d) if he, - (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) While holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or (e)...... "
204. A bare perusal of section 13(1)(d) PC Act, show that the three clauses thereof are though independent and alternative and disjunctive
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 210 of 389 but the factum of obtaining a valuable thing or pecuniary advantage is a common essential ingredient of all the three sub-clauses. Thus, clause (i) shall be applicable if while obtaining for himself or for any other person any valuable thing or pecuniary advantage, the public servant uses corrupt or illegal means. Similarly, under clause (ii) a public servant shall be liable if for obtaining for himself or for any other person any valuable thing or pecuniary advantage, he abuses his position as a public servant. As regard clause (iii) a public servant shall be however liable if he obtains for any person any valuable thing or pecuniary advantage, without any public interest.
205. As regard the circumstances when any given act can be said to have been done by a public servant by way of corrupt or illegal means or by abusing his position as a public servant Ld. counsels for the accused persons, have placed reliance upon the case Major S. K. Kale vs State of Maharashtra (1977) 2 SCC 394 and S.P. Bhatnagar vs State of Maharashtra, (1979) 1 SCC 535. The two cases however pertain to section 5(1) (d) of old PC Act,1947. The following observations as were made inter-alia by Hon’ble Supreme Court in the S. P. Bhatnagar case (Supra) with resect to interpretation of section 5(1) (d) of old PC
Act,1947 were referred to:
“20...... We will accordingly be concerned with the question of validity of A-l's conviction under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act only but so far as A-2 is concerned, we will have to examine the validity of his conviction under all the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 211 of 389 charges. Before examining the sufficiency or otherwise of the material bearing on the charges against both the appellants, we consider it necessary to have a clear concept of the meaning and ambit of the phraseology “by corrupt or illegal means or by otherwise abusing his position as public servant” used in Section 5(1)(d) of the Prevention of Corruption Act, 1947 (hereinafter referred to as “the Act”) for the contravention of which the appellants have been convicted. It will be advantageous in this connection to refer to two decisions rendered by this Court in M. Narayanan Nambiar v. State of Kerala [AIR 1963 SC 1116 : (1963) Supp 2 SCR 724 : (1963) 2 SCJ 582] and Major S.K. Kale v. State of Maharashtra [(1977) 2 SCC 394 : 1977 SCC (Cri) 356 : AIR 1977 SC 822] . In the first case, Subba Rao, J. (as be then was) while construing clause (d) of sub-section (1) of Section 5 of the Act observed: “The phraseology ‘by otherwise abusing his position as public servant’ covers acts done otherwise than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. “Abuse” means misuse i.e., using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word ‘otherwise’ has wide connotation and if no limitation is placed on it, the words ‘corrupt’, ‘illegal’ and ‘otherwise’ mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause. So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say something savouring of dishonest act on his part. The contention of the learned counsel is that if the clause is widely construed even a recommendation made by a public servant for securing a job for another may come within the clause and that could not have been the intention of the Legislature. But in our view such innocuous acts will not be covered by the said clause. The juxtaposition of the word ‘otherwise’ with the words “corrupt or illegal means” and the dishonesty implicit in the word “abuse” indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause. Whether he abused his position or not depends upon the facts of each case.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 212 of 389 21. Following the decision in M. Narayanan Nambiar v. State of Kerala (Supra), it was held by this Court in Major S.K. Kale v. State of Maharashtra (Supra) that the abuse of position in order to come within the mischief of the section must necessarily be dishonest so that it may be proved that the accused caused deliberate loss to the department It was further held in this case that it is for the prosecution to prove affirmatively that the accused, by corrupt or illegal means or by abusing his position, obtained any pecuniary advantage for some other person. It would, therefore, be necessary to find out in this case as to whether the accused abused their position and acted dishonestly or with a corrupt or oblique motive in having the contract in question entrusted to A-4. As the courts below have rested their judgments on a constellation of circumstances, it would be well to bear in mind the fundamental rule relating to the proof of guilt based on circumstantial evidence which has been settled by a long line of decisions of this Court. The rule is to the effect that in cases depending on circumstantial evidence, there is always the danger that conjecture or suspicion may take the place of legal proof. In such cases the mind is apt to take pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely it is, considering such matters, to over-reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.”
206. However, after the Prevention of Corruption Act,1988 came into force, there has been substantial changes made in the defination of the offence of criminal misconduct as provided u/s 13(1)(d) of the new Act. Since the present accused persons are being prosecuted under the Act of 1988 so it will be fruitful to refer to the interpretation of the offence of criminal misconduct as defined u/s 13(1)(d) of the new Act, as given by higher courts of the land in contradistinction to section 5(1)(d) of PC Act,1947.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 213 of 389 207. The interplay between section 5(1)(d) of PC Act,1947 and section 13(1)(d) PC Act,1988 has been dealt at length by Hon’ble Delhi High Court in the case Manoj Kumar Mishra v. CBI, 2018 SCC OnLine 9146. The observations made in this regard in the said case will be worth referring to:
“18. This Court in the decision reported as (2014) 1 HCC (Del) 178 Mahesh Pal Singh v. State (NCT of Delhi) interpreted the words “corrupt or illegal means” and held as under: “19. The expression “corrupt or illegal means” has not been defined in the Act. Illegal would obviously mean something which the law prohibits. The definition of the expression “corrupt” in the Shorter Oxford Dictionary includes something influenced by bribery. This expression would also include something which is morally unsound, dishonest, depraved or pervert. Therefore, accepting money as bribe would certainly amount to use of corrupt means. Since taking or attempting to take bribe is prohibited by law, such an act would also amount to use of illegal means. The appellant, therefore, is guilty of criminal misconduct under Section 13(1)(d)(i) of the Act since he took Rs. 3000/- from the complainant by corrupt and illegal means.” 19. Word ‘corrupt’ has not been defined either in Penal Code, 1860 or the PC Act. As per the Cambridge dictionary, word ‘corrupt’ means ‘having or showing a willingness to act dishonestly in return for money or personal gain’ and as per the Oxford dictionary it means ‘cause to act dishonestly in return for money or personal gain. To change from good to bad in morals, manners, or actions.’ 20. Word ‘illegal’ has been defined under Section 43 IPC as under:— 43. “Illegal”, “Legally bound to do”.—The word “illegal” is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be “legally bound to do” whatever it is illegal in him to omit. 21. The amendment as introduced to Section 13(1)(d) PC Act clearly deletes the words ‘in discharge of his officials duties’
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 214 of 389 which gave a restricted meaning to the provisions of Section 13(1)(d) of the PC Act. Pursuant to the amendment, it is not necessary that the act committed by the officer should be in discharge of his official duty, however, the fact remains whether deletion of the words ‘acting in discharge of his official duty’ would also take away from the ambit of Section 13(1)(d)(i) of PC Act any act which is not an abuse of his position as public servant. As held by Hon'ble Supreme Court in the decision reported as Manshankar Prabhashankar Dwivedi (supra), it would be appropriate to give a construction where abuse of position as a public servant is also a necessary ingredient of clause (d) of Section 13(1) PC Act as reproduced in para 13.2 above. 22. Even in the decision reported as 1999 Cr.L.J 2059 (AP) B. Parmeshwaran v. State of A.P. relied upon by the learned counsel for the CBI, Andhra Pradesh High Court noted that “abuse of his position as public servant” is central for an offence defined under Section 13(1)(d) PC Act, 1988 even if it is by “corrupt or illegal means”. In the said case High Court noted that the complainant believed the accused as he was an employee of South Central Railways. Thus there was an element of abuse of his position as public servant. Dealing with the PC Act 1988, High Court held as under: 12. Further, there appears to be a substantial change in the comparable provisions under the Prevention of Corruption Act, 1988, namely, S. 13(1)(d) of the Act of 1988 from the provision under S. 5(1)(d) under the Prevention of Corruption Act, 1947. Clause (d) of S. 5(1) mandates that for constituting the offence under that clause, the accused must have used corrupt or illegal means or otherwise abused his position as public servant to obtain for himself or for any other person valuable thing or pecuniary advantage. The words “or by otherwise abusing his position as public servant” go to indicate that use of corrupt or illegal means is considered as one of the modes of abusing official position. Thus, there is only one concept involved here, namely, abusing one's official position to gain valuable thing or pecuniary advantage. Adoption of corrupt or illegal means is mentioned illustratively as one of the means of abuse of official position. Thus, the concept of use of corrupt or illegal means has inextricable nexus with abuse of official position. Abuse of official position appears to be central to the concept of misconduct and adopting corrupt or illegal means is merely one of the ways and not unrelated to abusing official position. It is for this
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 215 of 389 reason, the Supreme Court held in that case cited supra that mere use or adoption of illegal means to obtain valuable thing or pecuniary advantage unrelated to abuse of official position does not satisfy the ingredient of the offence under S. 5(1)(d) of the Prevention of Corruption Act, 1947. But, in the Act, 1988, this nexus between adoption of corrupt or illegal means and abuse of official position has been severed as can be seen by examining the relevant provision: “13. Criminal Misconduct by a Public Servant: (1) A public servant is said to commit the offence of criminal misconduct: (d) if he, — (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or (Emphasis supplied) Sub-Clause (d) of S. 13(i) which is equivalent to Sub- Clause (d) of S. 5(1) of the Act, 1947 has been divided into three distinctive parts as extracted above. A reading of this provision would make it amply clear that all the three wings of Clause (d) of, S. 13(1) are independent and alternative and disjunctive for constituting the ingredients for the offence under S. 13(1)(d) as is clear from the use of the word ‘or’ at the end of each sub-clause. Thus, under S. 13(1)(d)(i) obtaining any valuable thing or pecuniary advantage by corrupt or illegal means by a public servant in itself would satisfy the requirement of Criminal misconduct under S. 13(1)(d) of the Prevention of Corruption Act, 1988. On the same reasoning “obtaining a valuable thing or pecuniary advantage merely by abusing official position” as contemplated under S. 13(1)(d)(ii) in itself would satisfy the ingredient of Criminal Misconduct under S. 13(1)(d) without any nexus with the adoption of the illegal means as contemplated under S. 13(1)(d)(i) of the Act, 1988. Thus, it would appear that there is definite change as to the ingredients of offence of Criminal Misconduct under S. 13(1)(d) of Act, 1988 as distinct from
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 216 of 389 S. 5(1)(d) of the Prevention of Corruption Act, 1947. The judgments of the Supreme Court rendered while interpreting the provisions of Prevention of Corruption Act, 1947 have to be appreciated taking into account the changes incorporated in the relevant provisions in the Prevention of Corruption Act, 1988. For this reason also, the facts in this case must be held to be sufficient to constitute ‘Criminal Misconduct’ within the meaning of S. 13(1)(d) of the Prevention of Corruption Act, 1988. 23. Thus, abuse of the position by the accused is an essential element even if he acts by a corrupt or an illegal mean because though the illegal mean would survive, element of corrupt will not arise without an abuse of the official position.” (Emphasis supplied by me)
208. In Chittaranjan Shetty Vs. State by CBI Bangalore, (2015) 15 SCC 569, Hon'ble Supreme Court while referring to the observations made in the case M. Narayanan Nambiar v. State of Kerala, AIR 1963 SC 116 and the case Major S. K. Kale v. State of Maharashtra (supra) and S. P. Bhatnagar v. State of Maharashtra (Supra) went on to observe in para 22 as under :
“22. On a perusal of the abovementioned judgments, it can be concluded that in order to prove the offence under Section 13(1)(d)(ii) of the Act, it must be established that a public servant has abused his position in order to obtain for himself or for any other person, any valuable thing or pecuniary advantage, and that, in this context, the “abuse” of position must involve a dishonest intention. In the light of facts of the said case involving role of a bank officer in illegally advancing overdraft facility to a customer of the bank (co-accused), the Hon'ble court further went on to observe in para 25 as under: 25. Furthermore, the appellant's dishonest intention can be inferred from the facts and circumstances of the case and from the conduct of the appellant himself. During the course of these transactions, the appellant has committed several irregularities in order to favour Accused 2 and has acted in blatant disregard of the rules and regulations of the Bank
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 217 of 389 and the terms and conditions of the loan issued to Accused 2 and in fact, even compelled PW 18, an officer under his supervision, to do the same. Therefore, it can be concluded that the appellant has acted with dishonest intention and has abused his position as a public servant. Thus, it can be concluded that all of the necessary elements of the offence under Section 13(1)(d)(ii) of the Act have been proved in this case.”
209. Similarly in the case M. Sankaranayanan IAS v. State of Karnataka,(1993) 1 SCC 54, Hon'ble Supreme Court observed that it may not always be possible to demonstrate malice in fact with full and elaborate particulars and it may be permissible in an appropriate case to draw reasonable inference of malafide from the facts pleaded and established. But such inference must be based on factual matrix and such factual matrix cannot remain in the realm of insinuation, surmise or conjecture.
210. Thus in the light of aforesaid interpretation of law as given by higher courts of the land, it will be appropriate that before any conclusion is arrived at as to whether charge of criminal misconduct u/s 13(1)(d) is made out against the three accused public servants, or not, the role played by them is first delineated. Subsequently, at a later stage the role played by them shall also be analysed cumulatively to see as to whether they alongwith the private parties involved acted in pursuance of any criminal conspiracy, or not.
J (i) Role played by A-5 P.K. Banerjee, Additional Secretary Coal and Chairman 14th Screening Committee and A-6 N.N. Gautam, Advisor (Projects) and Member Convenor 14th Screening Committee. (The role played by these two MOC officers is proposed to be analysed together as the same is closely interlinked.)
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 218 of 389 211. As regard the role played by A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam, it would be suffice to state that the very act of placing the application of M/s CTL before 14th Screening Committee for consideration, despite being aware that the applicant company is seeking allocation of a non-nationalized and consequently a non- identified abandoned coal mining area, was per-se an illegal act undertaken by them by abusing their official positions. Both A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam were well aware of the fact that consideration of the said abandoned non-nationalized and consequently a non-identified coal mine was beyond the scope/mandate of the screening committee. It was for the said reason A-6 Nitya Nand Gautam in his note dated 20/05/1999 stated that clearance from CIL could be possible. Moreover, both A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam were also well aware that the said abandoned coal mining area did not meet the minimum criteria of opencast mining in terms of the policy approved by Minister of State for Coal with respect to captive coal mine block allotment. In fact they both had every reason to believe that the said abandoned coal mining area even did not meet the criteria formulated by the 1st screening committee for identification of captive coal blocks. As pointed out earlier, in the minutes of 14th screening committee meeting it was specifically mentioned that the mine does not fit into the criteria of a captive block. It has been well established on record that there were repeated assertion in various communications by CIL officers and that of its other subsidiary companies that the said abandoned coal mining area does not meet the guidelines as were laid down by the Screening Committee for
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 219 of 389 identification of captive coal blocks and also that the said area was a free hold area and was thus not within the control of CIL or its subsidiary companies. The two accused officers of MOC however chose to ignore all such comments and rather decided to place the application of M/s CTL before 14th Screening Committee for consideration by abusing their official position as Additional secretary and Chairman 14th Screening Committee and Advisor(projects) and Member Convenor 14th Screening Committee, respectively .
212. The matter has also been examined in the earlier part of the judgment from an alternative point of view i.e. even if the said application of M/s CTL was liable to be put up before 14th Screening Committee for consideration then also the only prudent, logical and legal course of action available to 14th Screening Committee was to reject the said application on the basic premise that the applicant company was seeking allocation of a non-nationalized coal block. It has also been discussed and demonstrated that even otherwise the decision of 14th Screening Committee to allot said abandoned coal mining area having small coal reserves and that too in isolated pockets was contrary to the clear and unambiguous provisions of CMN Act, 1973. The two public servants can not claim ignorance of said provision of law. Moreover M/s CTL had clearly stated that it intended to establish a washery to wash the coal and had proposed to use the middlings so generated in the 10 MW power plant to be established by them. The only use of washed coal was stated as manufacturing of metallurgical coke and thereafter use of said metallurgical coke in an iron foundry at Bokaro belonging to a sister
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 220 of 389 concern of M/s CTL. However, no details of any such plant were even tried to be obtained either by MOC or by 14th Screening Committee where the two accused public servants i.e. A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam were acting in their dual capacity i.e. as Chairman and Member Convenor respectively. The minutes of 14th Screening Committee as already discussed also show that while making the allotment nothing was mentioned as regard the end use where the washed coal would be used even though the two accused public servants were well aware of the said requirement. In fact, the said minutes of 14th Screening Committee Ex. PW 15/DX-4 (Colly) (available from page 133 -164 in D-62) shows that immediately before considering the application of M/s CTL, the Screening Committee had also considered the application of M/s Central Utility and Investments Ltd. However, the request of said company for allotment of Gare-Palma IV/6, IV/7 and Lohara West/Utkal B2 blocks for supply of coal to their two washeries was rejected on the ground that there was no formal tie-up as regard the end use of the said washed coal. For a ready reference the observations of 14th Screening Committee qua the application of M/s Central Utility and Investment Ltd. as made in the minutes thereof read as under: “15. M/s. Central Utility and investment Ltd. The party had requested allotment of Gare-Palma IV/6, IV/7 and Lohara West/Utkal B2 blocks for supply of coal to their two washery projects. The representative of the party informed the Committee that the washed coal from these two washeries will be supplied to the power plants of MSEB, GEB, PSEB, RSEB etc and some cement plants. However, the Committee noted that there is no formal tie-up with any of the end users mentioned by the party and in view of that decided to reject this case.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 221 of 389 213. Thus, in the case of M/s CTL the Screening Committee did not care to even enquire as to whether there was any tie up between M/s CTL and the company which was having the Iron Foundry at Bokaro to whom the metallurgical coke was proposed to be supplied after manufacturing. No doubt, the two companies were stated as sister concerns, but they being two separate legal entities so there ought to have been some formal tie-up/agreement or at least some board resolution of the two companies in this regard. The two accused public servants neither cared to enquire about the same in MOC when the agenda note was approved nor subsequently in the screening committee meeting when he application of M/s CTL was considered. In fact, the company in the year 2012 in its reply to the show cause notice issued regarding cancellation of coal block earlier allotted even stated that they are not obliged to establish any end-use project.
214. Moreover, as also already discussed at length such an abandoned coal mining area having small and isolated reserves could have been mined by a private company only under a sub-lease issued by any Government, company or corporation to whom the area could have been allotted by MOC. The sub-lease to mine such an area thus could have been given only by a Government company or corporation too whom such a coal mining area would have been allote under the law. The very observation made by 14th Screening Committee that the impugned abandoned coal mining area does not fit in the criteria of a captive block was in fact a sufficient reason in itself to make the application of M/s CTL beyond the scope/mandate of 14th Screening Committee. Undisputedly,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 222 of 389 the Screening Committee was constituted to screen the proposals so received from companies seeking allocation of coal blocks for captive use only. Accordingly, if the said abandoned coal mining area did not fit in the criteria of a captive coal block than the application of M/s CTL seeking allocation of said coal block was clearly beyond the mandate of Screening Committee. It is thus clear that viewing from any angle the impugned allotment made by 14th Screening Committee was clearly not in accordance with the provisions of CMN Act, 1973 and was accordingly an illegal act on the part of the two public servants i.e. A-5 P.K. Banerjee and A-6 N.N. Gautam undertaken by them by abusing their official positions i.e. as Additional Secretary, MOC and chairman 14th screening committee and as Advisor (Projects), MOC and Member Convenor 14th screening committee, respectively.
215. Thus, from the overall facts and circumstances of the case as discussed above, it is clear that the two accused public servants i.e. A-5 P K Banerjee, Additional Secretary, Ministry of Coal and Chairman 14th Screening Committee and A-6 Nitya Nand Gautam, Adviser (Projects), Ministry of Coal and Member Convenor, 14th Screening Committee not only acted illegally but also clearly abused their position as such public servants in order to obtain allocation of abandoned coal mining area in favour of A-1 M/s CTL. The manner in which the matter was handled inter-se between them while getting the application of M/s CTL put up before the Screening Committee (The entire sequence of events along with notings made by them has been already discussed at length in the earlier part of the judgment) for consideration speaks volumes about
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 223 of 389 their dishonest intention. The entire proceedings in fact suggest that they both were leaving no stone un-turned in ensuring allocation of impugned coal block in favour of company M/s CTL, by overcoming all objections.
216. Though from the aforesaid discussion itself, it is clear that all the necessary ingredients of the offence of criminal misconduct u/s 13(1)(d) (ii) PC Act, 1988 stands proved against both A-5 P.K. Banerjee and A-6 N.N. Gatuam, beyond shadows of all reasonable doubts, but, I shall be discussing various other aspects of the case also so as to fortify the said conclusion.
217. As regard the offence u/s 13 (1) (d) (iii) P.C. Act, 1988 not much discussion is required as it is clear that both the accused public servants acted with complete disregard to public interest in obtaining allocation of abandoned coal mining area in favour of A-1 M/s CTL much less without any public interest. As a mark of caution, I may mention over here that while considering as to whether the offence u/s 13 (1) (d) (iii) P.C. Act 1988 is made out or not against both the accused public servants, the issue as to whether any mens rea or guilty intention on the part of accused public servants is required or not, ceases to have any significance as the guilty intention of the accused MOC officers in the entire matter stands already well proved beyond shadows of all reasonable doubts.
218. At this stage, it will be also worthwhile to first refer to some observations of Hon'ble Supreme Court in cases where Government was dealing with private persons in matters relating to award of contracts, grant of largess etc.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 224 of 389 219. In the case Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal (1975) 1 SCC 70, it was observed by Hon'ble Supreme Court as under:
“When the Government is trading with the public, 'the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions'. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.”
(Emphasis supplied by me)
220. The aforesaid observations were again approved by Hon'ble Supreme Court in the case Ramana Dayaram Shetty Vs. International Airport Authority of India 1979 (3) SCC 489 as under: “This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant.”
(Emphasis supplied by me)
221. In Kasturi Lal Lakshmi Reddy Vs. State of J&K, 1980 4 SCC 1, Hon'ble Supreme Court while again referring to Ramana Dayaram Shetty case (Supra) further observed as under: “10. It was pointed out by this Court in "Ramana Dayaram Shetty v. International Airport Authority of India [1979 (3) SCC 489] that with the growth of the welfare state, new forms of property in the shape of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 225 of 389 Government largess are developing, since the Government is increasingly assuming the role of regulator and dispenser of social services and provider of a large number of benefits including jobs, contracts, licences, quotas, mineral rights etc. There is increasing expansion of the magnitude and range of Governmental functions, as we move closer to the welfare state, and the result is that more and more of our wealth consists of these new forms of property. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. The law has however not been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights, while others have been given legal protection not only by forging procedural safeguards but also by confining, structuring and checking Government discretion in the matter of grant of such largess. The discretion of the government has been held to be not unlimited in that the Government cannot give largess in its arbitrary discretion or at its sweet will or on such terms as it chooses in its absolute discretion. There are two limitations imposed by law which structure and control the discretion of the government in this behalf. The first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess. 11. So far as the first limitation is concerned, it flows directly from the thesis that, unlike a private individual, the State cannot act as it pleases in the matter of giving largess. Though ordinarily a private individual would be guided by economic considerations of self-gain in any action taken by him, it is always open to him under the law to act contrary to his self-interest or to oblige another in entering into a contract or dealing with his property. But the government is not free to act as it likes in granting largess such as awarding a contract or selling or leasing out its property. Whatever be its activity, the government is still the government and is, subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner; it has to be exercised for the public good. Every activity of the government has a public element in it and it must therefore, be informed with reason and guided by public interest. Every action taken by the government must be in public interest; the government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 226 of 389 government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid. 12. Now what is the test of reasonableness which has to be applied in order to determine the validity of governmental action. It is undoubtedly true, as pointed out by Patanjali Shastri, J. in State of Madras v. V.G. Rau,[1952] SCR 597 that in forming his own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judge participating in the decision, would play an important part, but even so, the test of reasonableness is not a wholly subjective test and its contours are fairly indicated by the Constitution. The concept of reasonableness in fact pervades the entire constitutional scheme. The interaction of Articles 14, 19 and 21 analysed by this Court in Maneka Gandhi v. Union of India[1978] 2 SCR 621 clearly demonstrated that the requirement of reasonableness runs like a golden thread through the entire fabric of fundamental rights and, as several decisions of this Court show, this concept of reasonableness finds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the directive principles. It has been laid down by this Court in E.P. Royappa v. State of Tamil Nadu [1974] 2 SCR 348 , and Maneka Gandhi case that Article 14 strikes at arbitrariness in State action and since the principle of reasonableness and rationality, which is legally as well as philosophically an essential element of equality or non- arbitrariness, is protected by this article, it must characterise every governmental action, whether it be under the authority of law or in exercise of executive power without making of law. So also the concept of reasonableness runs through the totality of Article 19 and requires that restrictions on the freedoms of the citizen, in order to be permissible, must at the best be reasonable. Similarly Article 21 in the full plenitude of its activist magnitude as discovered by Maneka Gandhi case, insists that no one shall be deprived of his life or personal liberty except in accordance with procedure established by law and such procedure must be reasonable, fair and just. The Directive Principles concretise and give shape to the concept of reasonableness envisaged in Articles 14, 19 and 21 and other Articles enumerating the fundamental rights. By defining the national aims and the constitutional goals, they setforth the standards or norms of reasonableness which must guide and animate governmental
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 227 of 389 action. Any action taken by the Government with a view to giving effect to any one or more of the Directive Principles would ordinarily, subject to any constitutional or legal inhibitions or other over-riding considerations, qualify for being regarded as reasonable, while an action which is inconsistent with or runs counter to a directive principle would prima facie incur the reproach of being unreasonable. 13. So also the concept of public interest must as far as possible receive its orientation from the directive principles. What according to the founding fathers constitutes the plainest requirement of public interest is set out in the directive principles and they embody par excellence the constitutional concept of public interest. If, therefore, any governmental action is calculated to implement or give effect to a directive principle, it would ordinarily, subject to any other overriding considerations, be informed with public interest. 14. Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some directive principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property. We have referred to these considerations to only illustratively, for there may be an infinite variety of considerations which may have to be taken into account by the government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the government in taking a particular action, that the Court would have to decide whether the action of the government is reasonable and in public interest. But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 228 of 389 presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction of the Court by proper and adequate material. The Court cannot lightly assume that the action taken by the government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the government in taking action and therefore the Court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. This is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law. It is imperative in a democracy governed by the rule of law that governmental action must be kept within the limits of the law if there is any transgression the Court must be ready to condemn it. It is a matter of historical experience that there is a tendency in every government to assume more and more powers and since it is not an uncommon phenomenon in some countries that the legislative check is getting diluted, it is left to the Court as the only other reviewing authority under the Constitution to be increasingly vigilant to ensure observance with the rule of law and in this task, the court must not flinch or falter. It may be pointed out that this ground of invalidity, namely, that the governmental action is unreasonable or lacking in the quality of public interest, is different from that of mala- fides though it may, in a given case, furnish evidence of mala-fides. 15. The second limitation on the discretion of the government in grant of largess is in regard to the persons to whom such largess may be granted. It is now well settled as a result of the decision of this Court in Ramana D. Shetty v. International Airport Authority of India that the government is not free like an ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well established that the Government need not deal with anyone but if it does so, it must do so fairly without discrimination and without unfair procedure. Where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess the government cannot act arbitrarily at its, sweet will and, like a private individual, deal with any person it pleases, but its action
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 229 of 389 must be in conformity with some standard or norm which is not arbitrary, irrational or irrelevant. The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance. This rule was enunciated by the Court as a rule of administrative law and it was also validated by the Court as an emanation flowing directly from the doctrine of equality embodied in Article 14. The Court referred to the activist magnitude of Article 14 as evolved in E. P. Royappa v. State of Tamil Nadu and Maneka Gandhi case and observed that it must follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with anyone, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground. (SCC p. 512, para 21) This decision has reaffirmed the principle of reasonableness and non-arbitrariness in governmental action which lies at the core of our entire constitutional scheme and structure.” (Emphasis supplied by me)
222. Thus, from the overall facts and circumstances as have been discussed above, it can not be said that the allocation of impugned non- nationalized abandoned coal mining area in favour of M/s CTL was in furtherance of any public interest but it was rather undertaken to serve the interest of a private company and that too to the detriment of public interest and in violation of the unambiguous provisions of law. Thus, on account of aforesaid circumstances, it clearly stands well established that the two accused public persons i.e. A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam clearly abused their official position and not only acted illegally but also without any public interest while acting as such
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 230 of 389 public servants, in order to obtain allocation of a non-nationalized abandoned coal mining area in favour of M/s CTL.
223. However, I deem it appropriate to also discuss various other acts of the two accused public servants, undertaken by them during the processing of application of M/s CTL in MOC as the same will further re- inforce the conclusion regarding abusing of their offices, by them as such public servants. All those acts have been though already discussed extensively in the earlier part of the judgment, but it will be worthwhile now to consider them briefly over here in the light of various arguments raised by Ld. Counsels for the accused persons.
224. As earlier pointed out when the application dated 09.05.98 of M/s CTL was sent for comments by MOC to CIL and CMPDIL and the comments from the said bodies were still awaited then A-6 N.N. Gautam summoned the file from CPAM Section on telephone and recorded a detailed note dated 28.08.98 on the file. However nothing is available on the file as to in what circumstances the file was required to be summoned telephonically or what led to recording of note dated 28.08.98 and even no explanation has been furnished in this regard during the course of trial. Be that as it may, a careful perusal of said note and the subsequent proceedings show that A-6 N.N. Gautam even while mentioning the fact that the said abandoned coal mining area was not a nationalized coal block and also that the proposal is silent about the utilisation of washed coal, still observed that the allotment of the area will help in some economic activity in an otherwise abandoned mining zone. He however did not mention in his note that applications received after
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 231 of 389 11.02.97 are not being processed in MOC.
225. The subsequent note of A-5 P.K. Banerjee is also quite strange. As the other proceedings going on in MOC in other files show that applications received after 11.02.97 were not being processed but still he observed that the case of M/s CTL be disposed of one way or the other within three months.
226. Ordinarily these kind of notings may appear to be innocuous, but when the subsequent proceedings coupled with the conduct of accused public servants is seen then it becomes clear that either they were acting under some pressure to expedite the processing of said application of M/s CTL or they were acting in cahoot with the private parties involved.
227. As earlier pointed out, immediately after the aforesaid two notings dated 28.08.98 and 31.08.98 were made by the two accused public servants, a letter dated 08.09.98 was submitted by M/s CTL wherein it was stated that the washed coal will be utilized for manufacturing metallurgical coke.
228. Thus, it is clear from the aforesaid circumstances that note dated 28.08.98 of A-6 N.N. Gautam and note dated 31.08.98 of A-5 P.K. Banerjee came to be recorded as the matter of M/s CTL was being actively pursued in MOC. Though it has been argued on behalf of accused persons that all the applicant companies use to pursue their applications in MOC and in this regard, various communications used to be made by them in order to meet the objections raised at different level of officers. Certainly, every applicant company will pursue its application
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 232 of 389 submitted to MOC but as earlier also pointed out undue interest and favour was being shown by the accused public servants qua the application of M/s CTL. Moreover, nothing has been shown on record by the accused persons with respect to similar communications being made by other applicant companies so as to meet the objections, if any, raised by the officers of MOC qua their applications. Since this has been the claim made by the accused persons so in order to establish the said claim at least by preponderance of probabilities, some evidence ought to have been led by them in support of their claim. Moreover, in the case of M/s CTL, it is apparent from the record that without there being any formal communication from MOC at any level intimating the company of any objection raised in their matter, there used to be some communication or the other submitted by the company immediately thereafter so as to meet all such objections.
229. However, subsequent to recording of note dated 28.08.1998, when the comments of CIL and CMPDIL were received wherein they categorically stated that the request of M/s CTL cannot be agreed to, then A-6 N.N. Gautam again wrote back a letter dated 06.11.98 under his own signatures to CIL. In the said letter A-6 N.N. Gautam sought to discredit all the claims made by CIL and CMPDIL.
230. At this stage, it will be pertinent to mention that in his written statement u/s 313 (5) Cr.PC, A-6 N.N. Gautam stated that the observations in letter dated 06.11.98 were made as both CIL and CMPDIL had made their observations without any logical and scientific basis while on the other hand applicant company M/s CTL had made the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 233 of 389 proposal after studying the old mine plans available. This explanation on the face of it appears to be strange as from the comments of CMPDIL or that of CIL, it is not apparent that the comments made by them were on the basis of assumptions or without any scientific basis. Moreover, CMPDIL was a specialized technical body (A subsidiary company of CIL) involved in identifying coal mines for exploration as well as planning and designing of mines which could be worked upon and A-6 N.N. Gautam on mere assumptions sought to disagree with its comments. However, for reasons best known to A-6 N.N. Gautam neither in his letter dated 06.11.98 nor in the notings made in MOC files he chose to mention that manufacturing of metallurgical coke was not a recognized end use under CMN Act, 1973. In fact, in its communication dated 08.09.98 addressed to A-6 N.N. Gautam, the company M/s CTL as regard use of washed coal had only stated that it intends to produce a better variety of marketable coke. The company interalia had observed as under:
“As such better quality of coal obtained from the mine after washing will be blended with the coal of BCCL to produce a better variety of marketable coke.” 231. Thus, for reasons best known to A-6 N.N. Gautam he did not choose to highlight this fact even though in his earlier note dated 28.08.98 he had specifically observed that mine/block can not be given unless the washed coal is for captive consumption or tied up with downstream linked consumer.
232. Moreover from the overall facts and circumstances in which the application of M/S CTL was considered in MOC right from the initial stages till the issuance of allocation letter in its favour, it is clear that the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 234 of 389 accused public servants chose to rely upon all the claims made by company M/s CTL without getting them verified but as regard the comments made by its own specialized bodies, they chose to discredit them as soon as the comments were received. At no point of time right upto the final allocation, verification of any claim made by the company was sought even by way of any documentary proof such as project report or balance sheets of the applicant company or its relationship with other companies which were stated to be having washeries already installed with them or in whose iron foundry the metallurgical coke was proposed to be used.
233. Even as regard the comments received from CCL, it will be seen that the officers over there had also raised number of substantial objections to the request of M/s CTL in seeking allocation of impugned abandoned coal mining area. The noting dated 11.08.98 of Sh. S. Bhattacharya, followed by that of Sh. A. Mukherjee, Deputy Chief of Geology dated 12.08.98 (Available at note sheet page 12-13 in D-98) (Also reproduced in the earlier part of judgment) clearly highlights all such objections. PW-8 B. Akala, Chairman, CCL also approved all such objections and subsequently the same were duly communicated to CIL vide letter dated 27.08.98 by Sh. R.K. Chaudhary, General Manager (GS), CCL.
234. However, despite receipt of letter dated 06.11.98 of A-6 N.N. Gautam, the officers of CMPDIL still stood with their earlier comments and vide letter dated 18/24.11.98 sent to CIL it was stated that they do not find any reason to revise their views. Thus, the technical body of CIL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 235 of 389 (Even though working under the administrative control of MOC) again after analysing the matter and considering the observations made by A-6 N.N. Gautam in his communication dated 06.11.98 chose to observe that the request of M/s CTL can not be agreed to. Thus, in ordinary circumstances the matter should have come to an end at that stage itself. The application of M/s CTL ought to have been closed in MOC upon receipt of such comments from CIL and CMPDIL. However, that was not to be so, as the subsequent proceedings would show that the accused public servants and especially A-6 N.N. Gautam was determined to ensure that the impugned non-nationalised abandoned coal mining area gets allotted to M/s CTL.
235. In fact, CCL also in its comments as communicated to CIL vide letter dated 26.11.98 i.e. subsequent to receipt of letter dated 06.11.98 of A-6 N.N. Gautam, was again not in support of the request of M/s CTL. Though the record shows that after about four months a fresh communication dated 12.03.99 was sent by PW-7 B. Akala, Chairman, CCL to CIL and in the said communication some softening of stand of CCL towards the request of M/s CTL started appearing.
236. Based on the said two communications dated 26.11.98 and 12.03.99 of CCL the comments of CIL were sent to A-6 N.N. Gautam, Advisor (Projects) MOC vide letter dated 16.03.99. In the said communication beside stating about the rail/road infrastructure in the area it was stated that mining of the block should not be a source of danger to the adjoining property of CCL, though hydro-geological studies may have to be carried out. It was also communicated that CCL does not
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 236 of 389 have any proposal to work in the Brahmadiha patch in the near future as the area is free hold area. It was however also reiterated that the area is not in the approved list of blocks for captive mining.
237. The files of MOC (available at note sheet page 8 in D-38) further shows that by the time the aforesaid communication dated 16.03.99 of CIL came to be processed in MOC by Sh. R.S. Negi vide his note dated 23/03/99 and the file after getting routed through the desk of various officers was pending at the desk of A-6 Advisor (Projects) that Sh. P.K. Agarwalla, Member of Parliament submitted an application dated 12.04.99 on behalf of M/s CTL to Secretary, MOC requesting identification and allocation of block simultaneously. Strangely enough in the said communication dated 12.04.99 of M/s CTL it was specifically stated that as desired the matter has been cleared by CIL and CCL by giving their no objection. There is however nothing on record to show that any communication was made with the company either by MOC or by CCL or CIL in this regard at any point of time during the intervening period.
238. Once again the aforesaid fact shows that the matter with CIL and CCL was also being actively pursued by M/s CTL and the same also explains the softening of comments made by CCL and CIL as contrasted from their earlier stand and also as opposed to the view of CMPDIL i.e. the technical body of CIL regarding planning and design of mines. However, the fact that CIL and its subsidiary companies had actually not agreed to the proposal of company M/s CTL is evident from the subsequent noting dated 16/04/99 of A- 6 N N Gautam himself. In the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 237 of 389 said note he specifically mentioned that the matter was discussed once again with CIL and CMD, CMPDIL in Calcutta on 13/04/99. It was further stated in the note that in the said meeting it emerged that this totally non- viable block with such limited reserves, and being also not included in the identified list of captive blocks should not be given for captive mining to M/s Castron Technologies Ltd.
239. Though in his written statement u/s 313 (5) Cr. PC, A-6 N.N. Gautam has stated that in his note dated 16.04.99 he observed that it may not be possible to allot the abandoned mine to M/s CTL for a number of reasons such as the project cost shown i.e. Rs. 120 crores was not at all commensurate with the reserves shown in the coal block and also there was no clarity about the end use. It was also pointed out that applications received after 11.02.97 were not being processed in MOC.
240. However, from note dated 16.04.1999 of A-6 N N Gautam it is clear on the face of record that despite softening of stand by CCL and as communicated by them to CIL and who in turn communicated to MOC vide their letter dated 16.03.99 that mining of impugned abandoned coal mining area will not be a source of danger to the adjoining mine of CCL, the stand of CIL and CMD CMPDIL in the meeting with A-6 N.N. Gautam held on 13.04.99 in Calcutta was that the block in question with limited reserves should not be given for captive mining to M/s CTL.
241. Be that as it may, immediately after A-6 N.N. Gautam recorded the detailed note dated 16.04.99 highlighting the economic non-viability of the block in question, a fresh communication dated 21.04.99 was
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 238 of 389 submitted to him by M/s CTL. In the said communication while referring to a discussion which company representative had with him i.e. A-6 N.N. Gautam on 20.04.99 the economic parameters of the entire project were scaled down from Rs. 120 crores to Rs. 24.25 crores.
242. Thus it is clear that immediately after an adverse note came to be recorded in MOC files against the request of M/s CTL, the company representatives met A-6 N.N. Gautam on 20.04.99 and submitted a detailed representation scaling down the proposed investment to be made in the project. Clearly the earlier proposed investment of Rs. 120 crores was one of the major objection mentioned in his note dated 16.04.99 by A-6 N.N. Gautam. The other major objection i.e. reluctance on the part of CIL, CCL and CMPDIL was also sought to be done away when draft of a letter proposed to be submitted by Mr. Agarwalla of M/s CTL to A-6 N.N. Gautam was handed over to PW-6 S.K. Verma, CMD, CMPDIL on 21.04.99 in New Delhi by A-6 N N Gautam.
243. Though A-6 N.N. Gautam has denied handing over any such papers to PW-6 S.K. Verma but the said denial on the face of it is clearly an after thought for a number of reasons. Firstly, the said draft letter which PW-6 S.K. Verma has stated was given to him by A-6 N.N. Gautam was identical in contents to letter dated 21/04/99 as was submitted on behalf of the company M/S CTL to A-6 N N Gautam.
244. Secondly PW-6 S.K. Verma immediately after returning to his office marked the said papers to Director (P&D) to give his comments on the various issues as were brought out in the draft letter. The said draft letter was thereafter duly processed in a file in CMPDIL and PW5 K.K.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 239 of 389 Khadiya, Director (P&D) further marked it to General Manager, PPD. Thereafter Sh. B. D. Rudra, GM (P&D) submitted his report dated 20.05.99 and through the desk of PW-5 K.K. Khadiya, the same reached the desk of PW-6 S.K. Verma, CMD, CMPDIL.
245. It is however altogether a different matter that by the time the said comments of Sh. B.D. Rudra, GM (PPD) reached the desk of PW-6 S.K. Verma, the matter relating to the request of M/s CTL was already discussed in 14th Screening Committee meetings held on 18/19.06.99 and thus the comments of Sh. B.D. Rudra were not further processed.
[All the aforesaid proceedings have been mentioned in detail in the earlier part of the judgment under the heading “Some Additional Proceedings in CMPDIL”].
246. However, the processing of said papers during the relevant period under the signatures of various officers of CMPDIL has also been admitted to by the officers of CMPDIL i.e. by PW-6 S.K. Verma and PW -5 K K Khadiya during the course of their deposition. The same clearly takes away the very ground beneath the stand now taken by A-6 N.N. Gautam that no such papers were ever given by him to PW-6 S.K. Verma.
247. Reference in this regard can also be made to illustration (e) to Section 114, Indian Evidence Act, 1872 which states that the Court having regard to the common course of human conduct and public business in relation to the facts of the case in hand may presume that a particular event or fact must have happened and thus the Court in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 240 of 389 facts of the present case will be right in presuming that the impugned official acts must have been regularly performed.
248. Moreover, nothing has been shown as to why the aforesaid officers of CMPDIL would have chosen to fabricate any official records and especially when at the relevant time there was neither any enquiry nor investigation in the matter pending nor could have been foreseen. In fact, the impugned sequence of events rather gives an impression that officers of CMPDIL were being repeatedly pressed upon to change their opinion about the claim of M/s CTL and thus PW-6 S.K. Verma, CMD, CMPDIL chose to once again obtain comments of concerned officers in his organization. This fact also shows that subsequent to meeting held on 13.04.99 in Calcutta between A-6 N N Gautam and CIL and CMD,CMPDIL it was felt necessary that clearance from CIL and its subsidiary companies was still required and that the earlier comments received from CIL vide letter dated 16.03.1999 will not serve any purpose. This fact is also evident from the subsequent noting dated 20.05.99 of A-6 N N Gautam wherein he stated that clearance from CIL could be possible and that CIL may be asked to send their comments.
249. Once again, I may mention that as regard the frequent meetings with representatives of applicant companies, it has been submitted that it was a usual practice being followed in MOC and nothing should be read against the accused persons on account of any such meetings. However in this regard, it would be suffice to state that even if such meetings with company representatives are treated as part of normal practice, then also it is beyond comprehension as to how objections being raised by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 241 of 389 MOC officers or by CIL, CMPDIL or CCL officers came to the knowledge of company M/s CTL every time whenever any objection to the claim of company was raised and that too without their being any communication to the company and the company used to submit one or the other written communication so as to obviate the said objection(s). As shall be shown in the subsequent discussion also that even after submitting a communication dated 21.04.99 to A-6 N.N. Gautam and to A-5 P.K. Banerjee, the company made number of other communications so as to ensure that all the objections being raised by the officers are duly met atleast on papers.
250. Be that as it may, nothing substantial however could come out in the cross-examination of either PW-5 K.K. Khadiya or PW-6 S.K. Verma which could raise any iota of doubt as regard their deposition that a draft letter was indeed given to PW-6 S.K. Verma, CMD, CMPDIL by A-6 N. N. Gautam in Delhi on 21.04.99. There is nothing on record which may lead me to disbelieve their deposition in this regard.
In fact, a copy of said proposed draft letter dated 20.04.99 is also available in MOC file Ex. PW 4/DX-2 (Colly) (D-36) from page 54A to 73.
251. Yet another important objection being raised by all officers in MOC was that applications received after 11.02.97 were not being processed in MOC. The said hurdle was also overcome when A-4 Dilip Ray on 12.05.99 approved the proposal put up by MOC that applications received after 11.02.97 be also considered. It was on 12.05.99 itself that in another file, A-4 Dilip Ray had marked a communication of company
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 242 of 389 M/s CTL dated 21.04.99 received in his office on 12.05.99 only to MOC for re-examination.
252. The significance of aforesaid actions undertaken by A-4 Dilip Ray and especially of date 12.05.99 shall be discussed separately when the role played by A-4 Dilip Ray shall be discussed and analysed. However, it will be suffice to state that as on 12.05.99 A-4 Dilip Ray was part of a care-taker Government, since the Government at the Centre by that time had lost the vote of confidence in the Parliament. Accordingly actions of A-4 Dilip Ray as on 12.05.99 or subsequently on 23.08.99 when he decided to relax the guidelines in favour of M/s CTL shall be discussed in the light of duties and responsibilities of a care taker Government or in other words the functions which a care-taker Government could have performed or undertaken.
253. Proceeding further, it is noticed that a letter dated 21.04.99 Ex. PW 14/E-1 (Available at page 94 in D-36) was also submitted to Additional Secretary, Coal i.e. to A-5 P.K. Banerjee by company M/s CTL. The same was received in his office on 23.04.99. In the said communication it was stated by A-2 Mahendra Kumar Agarwalla, Director M/s CTL that they have been vigorously pursuing their matter for grant of mining lease for Brahmadiha coal project in Giridih beside also stating that as CCL does not wish to work in the said area so CIL has also given clearance for the lease. It was also stated that all the queries raised by A-6 N.N. Gautam have been clarified. The said application was also marked down to CPAM Section after it got routed through the desk of senior officers in its downward movement from the desk of Additional Secretary, Coal.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 243 of 389 However, there is no further processing of said letter of M/s CTL in the MOC files by CPAM section.
254. On the other hand, in their eagerness to obtain the allocation of said mining block yet another letter dated 26.04.99 Ex. PW 4/DX-2 (Available from page 103-109 in D-36) was submitted to Secretary Coal Sh. S. S. Boparai by company M/s CTL under the signatures of Sh. P.K. Agarwalla. Copies of letters written to Additional Secretary Coal, i.e. A-5 P.K. Banerjee and to Advisor (Projects) i.e. A-6 N.N. Gautam were also enclosed. The said communication also came to be marked to CPAM section after getting routed through the desk of various senior officers.
255. In fact, Section Officer CPAM Section, PW-14 Ms. Neera Sharma even made an endorsement of “VIP Ref” on the said letter while marking it to Sh. R.S. Negi, the Dealing Assistant in the Section. Sh. P K Agarwalla (accused since deceased), was not only a sitting Member of Parliament but was also a member of the consultative committee of parliament on power and Steel. In fact a family arrangement was arrived at in between the Agarwalla family and in terms of the same, the coal block in question was to come in the share of Mr P K Agarwalla and his family. Thus for the said reason, Mr P. K. Agarwalla was personally making efforts in the matter and by virtue of his position was having easy access to various authorities not only in MOC but also in CIL and its other subsidiary companies. These facts tend to throw some light as to why extra interest was being shown by all concern in the matter of M/s CTL and in what circumstances the objections as and when raised by any officer used to come in the knowledge of representatives of M/s CTL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 244 of 389 and they used to promptly respond to the same.
256. Mr P K Agarwalla in the meantime thought of also making a request to A-4 Dilip Ray, the then Minister of State for Coal. However, as has been stated by PW-4 Sh. Bimbadhar Pardhan, the then Principal Secretary to A-4 Dilip Ray, Minister of State for Coal, that the Minister was not available during the said period as the Government in power had lost vote of confidence in the Parliament on 13.04.99. He however stated that A-4 Dilip Ray came to office only on 12.05.99.
257. The matter was however being pursued so vigorously and with a great deal of hurry on behalf of M/s CTL by Sh. P.K. Agarwalla that he submitted copy of letter dated 21.04.99 itself as was earlier submitted to Additional Secretary, Coal, to Minister of State for Coal. He even didn’t bother to get a fresh application typed which was specifically addressed to the Minister. As is evident from the deposition of PW-4 Bimbadhar Pardhan, the words “Additional Secretary, Coal, Department of Coal” mentioned at the top in the said copy of letter were cut by hand and the words “Dilip Ray, MOS(Coal)” were handwritten above them. In fact, PW- 4 Bimbadhar Pradhan also stated that the words “MOS (Coal)” were written by him in his own hand. It appears that as soon as it came to the notice of Mr P K Agarwalla that the Minister has come to the office on 12.05.99, he immediately went to meet him carrying his earlier communications made to different officers in MOC and after meeting the Minister it came to be decided to submit one such letter directly to the Minister so as to get the matter re-examined. This can be the only plausible explanation of the circumstances in which copy of letter dated
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 245 of 389 21.04.99 submitted earlier to Additional Secretary, Coal, itself was submitted to the Minister by making correction in hand itself at the top in the name of addressee.
258. Be that as it may, A-4 Dilip Ray immediately on 12.05.99 itself marked the representation to Secretary (Coal) for re-examination. Though the said direction of re-examination of A-4 Dilip Ray, Minister of State for Coal appears to be innocuous and it has been so argued also very strongly by his Ld. Counsel but if the past events which took place in MOC qua the request of M/s CTL for allocation of Brahmadiha coal project are seen, then it is clear that due to repeated objections being raised by CIL and CMPDIL, the MOC officers were finding it difficult to agree to the request of M/s CTL. In fact CPAM section in MOC also appeared to be reluctant to process the application(s) of M/s CTL any further. Accordingly, the direction by Minister of State for Coal for re- examination of the matter led to re-opening of the entire issue. The said direction of re-examination would have not mattered much but for the manner in which the file was thereafter dealt with in MOC by the present two accused MOC officers. For reasons best known to them during the entire exercise of re-examination, the matter till the time it came to be considered in 14th Screening Committee held on 18/19.06.1999, was never referred back to CIL, CCL or to CMPDIL for any fresh comments or even to CPAM section.
259. In fact, the proceedings which took place in MOC qua re- examination of the matter pursuant to directions of A-4 Dilip Ray makes an interesting reading. It is found that even though the file in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 246 of 389 downward movement from the desk of Secretary (Coal) reached CPAM Section on 14.05.99 itself after getting routed through the desk of various senior officers but the very next note available in the file from note sheet page 12-14 is that of A-6 N.N. Gautam dated 20.05.99 only. There is no other processing of the letter of M/s CTL as was received from the desk of A-4 Dilip Ray in CPAM section. The file is also silent as to in what manner the file from CPAM Section again came to be put up before A-6 N.N. Gautam. There is nothing on record to show as to in what circumstances A-6 N N Gautam chose to call for the file from CPAM section and directly recorded a note over there without there being any processing note from the section or from any other officer below. Even during the trial no explanation has been furnished by A-6 N N Gautam in this regard. Certainly, it was for the accused to furnish some explanation of the said circumstances, for he could have only explained the same. No reason or explanation much less any plausible reason or explanation has been put forward in this regard.
260. However, there is on record yet another communication dated 18.05.99 of M/s CTL addressed to A-6 N.N. Gautam (available at page 75-76 in D-36). The said letter refers to a meeting which representative of M/s CTL had with A-6 N.N. Gautam on 18.05.99 itself and the letter in question was submitted so as to answer two queries of A-6 N.N. Gautam which were raised in the said meeting itself by A-6 N N Gautam. The two queries raised in the meeting itself and the answers given thereof by way of a written reply were as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 247 of 389 Letter dated 18.05.99 Part of file Ex. PW 4/DX-2(Colly) [available at page 75-76 in D-36] “P.O. Nag Nagar, Dhaiya, Castron Dhanbad,Bihar – 826004 Technologies Ltd Ph : (0326) 203390, 207886 Fax: (91326) 207455
Ref: CTL/194-99-2000/058 (D) Date: 18-May-99 Shri N.N. Gautam Adviser (Projects) Ministry of Coal New Delhi.
Sub:- Approval of the Central Government for Grant of Mining Lease of abandoned Coal Mine for captive use of washing, generation of electricity in Giridih District in Mouzas, Biswasdih, Bhorandiha, Tikodih, Chunjka and Buriadih over an area of 105.153 hectares in the State of Bihar.
Ref:- letter to the Secretary, Coal, no-CTL/194/99-2000/025, dated 12.04.99 and subsequent letter to your goodself no. CTL/194/99-2000/057, dated 21.04.99
Dear Sir,
Please refer to our above quoted two letters (copies enclosed). In the above matter our adviser Shri M.L. Dugar met you o 20.04.99 and clarified the points raised by you. In detail, these points were also clarified vide our letter no. CTL/194/99-2000/057, dated 21.04.99 (copy enclosed). In course of our meeting today following issues were raised : 3. What will be the use of the washery after exhaustion of coal lasting for a period of 10-12 years? 4. What will be the use of washed coal? On the above mentioned query our reply is as follows:- 1. As intimated earlier we have a running washery, major part (90%) of which is of fabricated material at our sister concern. But it is out of use at present due to lower demand of met coke on account of dumping of coke in India. The washery will be shifted near to the proposed mining site. After exhaustion of coal this can be again shifted to a new source of coal supply according to the prevalent circumstances at that point of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 248 of 389 time. Since this washery was in use for the last couple of years, the depreciated value of this washery is very low. 2. Regarding use of washed coal as stated earlier it is proposed to be used for manufacturing of met coke for our unit in Bokaro Industrial Area. This coke will be manufactured at a unit for which industrial license was granted by Coal Ministry. The production capacity of the said coke oven unit is lying idle in view of the uneconomical market condition already stated above. We hope and trust this will clarify all the issues and you will be kind enough to recommend our case as proposed by the State Government.
Thanking you, Sincerely yours, for Castron Technologies Ltd.
-Sd/- Director.
Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400021, Ph : 2852736 Fax: (022) 2046235 Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387 Regd. Office : 8 Waterloo Street, Calcutta – 700069, Ph : 2489975, 248 6442” (Emphasis supplied by me)
261. What is quite interesting to note about letter dated 18.05.99 of M/s CTL is that while it talks of establishing a washery near the proposed mining area but the said washery was stated to be an old one belonging to a sister concern of M/s CTL. Similarly, as regard the use of washed coal it was stated that the same will be used for manufacturing of met coke at a unit for which industrial license was granted by Coal Ministry. It was also stated that met coke will be manufactured for their unit in Bokaro Industrial Area. Strangely enough nothing was stated as to whether the said unit for which industrial license was granted by coal Ministry was that of applicant company M/s CTL itself or of some other company. Similarly, nothing was stated as to whether the unit in Bokaro
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 249 of 389 Industrial area where met coke was proposed to be used was also that of M/s CTL or of some other company.
262. These issues gain material importance as the subsequent proceedings would show that the said washery or the met coke manufacturing unit were not that of M/s CTL but were stated to be of some sister companies of M/s CTL. However, at no point of time i.e. even till the issuance of letter of allocation for the impugned abandoned coal mining area, any tie up with the said companies was even asked for by MOC much less to even confirm whether any such units exist or not. No project report or even confirmation from Board of Directors of said other companies (the alleged sister concerns) were asked for. Moreover, since as per the family arrangement the coal block was to be transferred in the name of P. K. Agarwalla and his family so it was also not known or disclosed that the sister companies were owned and controlled by P. K. Agarwalla and his family or by M K Agarwalla and his family.
263. In fact, as earlier also mentioned, the 14th Screening Committee meeting rejected the claim of M/s Central Utilities & Investments Ltd. on the ground that there is no formal tie-up of the applicant company regarding the use of washed coal with any of the proposed end use companies.
264. Even in the agenda note of 14th Screening Committee (available at page 76 in D-62) similar facts were mentioned regarding M/s Central Utilities & Investments Ltd. The same read as under:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 250 of 389 8 M/s Two 3 mt. Raw Gare- Palma Block: - The party has corresponded with Central Washery each coal - 4 MSEB, GEB, PSEB, RSEB GVK Utilities projects mt. Sub block -IV/6 - 1st Power Krishnapatnam and Cement & Supply to p r e f e r e n c e Manufacturers for linkage of I n v e s t water washed coal. The utilities and the Sub block -IV/7 - m e n t s plants. Washed Cement Manufacturers Associations 2 n d preference L t d . coal - have asked for more details about 3mt. the project before making any commitment. Lohara West- 1 s t p r e f e r e n c e CIL have indicated that details of the proposed washeries have not been Utkal B2 block; - n d furnished by the party. However, no 2 preference. captive sub blocks are available in Utkal-II and Utkal-III. Sub block IV/7 in Gare-Palma is under consideration for allotment to M/s Jaiswals Neco Ltd. CIL have further indicated that Lohara (W) block has been placed before CIL Board in its l82nd meeting in May 1999 for withdrawal from the list of captive blocks. Sub block IV/7 of Gare-Palma is also required by M/s. Chhatisgarh Electricity Supply Company Ltd. (Sl.No.14).
265. Thus it is clear from the above that while accommodating the request of M/s CTL all the guidelines or basic mandatory checks were thrown to wind in the name of conservation of coal but the claims/requests of almost similarly placed other applicant companies were sought to be rejected by citing those very checks and balances.
266. Be that as it may, the said letter dated 18.05.99 of company M/s CTL was never marked to CPAM section by A-6 N.N. Gautam and he himself proceeded to record a detailed note dated 20.05.99 in the file. In the said note dated 20.05.99 A-6 N N Gautam started taking a U-turn from his earlier observations recorded in various notings, despite being aware that the block in question was not included in the captive mining blocks identified by CIL for allocation to private companies as it was an abandoned mine and was also a free hold area. He however, still
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 251 of 389 observed that a clearance from CIL could be possible. However, he though further stated that comments from CIL may be obtained but further went on to observe in the said note itself that the proposal of M/s CTL can be considered in the next meeting of Screening Committee to be held soon.
267. The file with the said note dated 20.05.99 of A-6 N.N. Gautam reached the desk of A-5 P.K. Banerjee and who returned it back to A-6 N.N. Gautam on 31.05.99 after approving note dt. 20.05.99 and also expressed hope that the size of the mine/reserves meet the criterion of minimum size as was decided in another file relating to policy issues of captive coal mining blocks for allotment.
268. However, A-6 N.N. Gautam again recorded a note dated 03.06.99 at note sheet page 14 (D-37). In the said note he again proposed that the proposal of M/s CTL may be put up before the Screening Committee for consideration. He however also stated that though the coal block does not meet the minimum extraction criteria and does not meet the criteria of a captive coal block but being an abandoned mine having very little reserves, so if the small reserves available are not permitted to be exploited by a private party with a small production, then the same will never be exploited at all.
269. He however also made some addition of his own to the earlier comments of CCL as were received from CIL. The stand of CCL as was communicated by CIL vide its letter dated 16.03.99 was that CCL does not have any proposal to work in Brahmadiha patch in the near future as the area is a free hold area. The said comments were however modified
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 252 of 389 by A-6 N.N. Gautam by stating that CCL/Coal India Limited has no programme of working these reserves at any point of time.
270. Thus A-6 N.N. Gautam presented a picture that CCL has no plan to work in the said reserves at any point of time even though Sh. B.D. Rudra, G.M. (PPD), CMPDIL in his comments dated 20.05.99, Ex. PW 5/F-2 (Colly) (Available at page 35 in D-103) had observed that in the past CCL was of the view that due to prime coking coal in this block the same can be worked if SAIL is willing to share the cost.
271. Thereafter on 04.06.99 A-5 P.K. Banerjee approved note dated 03.06.99 of A-6 N.N. Gautam and thus the proposal of M/s CTL was decided to be placed before the 14th Screening Committee for consideration.
272. However, what is important to note over here is that this decision qua M/s CTL was taken inter-se A-5 P.K. Banerjee and A-6 N.N. Gautam and in between the aforesaid notings the file neither travelled to the desk of any senior officer nor it travelled down to either Director CPAM or to Under Secretary, CPAM or even to CPAM Section where the file was originally marked upon receipt of a letter of M/s CTL from the office of Minister of State for Coal for re-examination.
273. However, before proceeding further, I would also like to refer to some communications which were made with CIL by MOC under the signatures of various officers including A-6 N.N. Gautam during this period itself but strangely enough in none of the said communications anything was mentioned about seeking clearance about the impugned
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 253 of 389 coal block.
274. After the policy for allotment of captive coal blocks as was proposed by Secretary (Coal) in consultation with A-6 N.N. Gautam was approved by A-4 Dilip Ray on 12.05.99 then in another MOC file Ex. P- 130 (colly) (D-81), A-6 N.N. Gautam recorded a note dated 18.05.99 (Available at note sheet page 27 in D-81) wherein he not only acknowledged the policy decision so taken by Minister of State for Coal but also directed that as the next meeting of Screening Committee is now proposed to be held on 18.06.99 so letters to Administrative Ministries be written. Preparation of agenda and other necessary actions were also directed to be taken.
275. Thereafter Sh. R.S. Negi, the Dealing Assistant in CPAM Section had put up a detailed note dated 19.05.99 (Available from page 28-30 in D-81) and he proposed that Chairman, CIL may be requested to furnish to MOC the total number of coal mining blocks identified for captive mining as on date duly approved by CIL Board as the same will form the basis for the purpose of allocation of blocks to the applicant companies. Accordingly, a letter dated 20.05.99 under the signatures of A-6 N.N. Gautam himself was sent to Chairman CIL (Available at page 128 in D- 82). At the same time in another file of MOC Ex. P-28(colly)(D-82) vide another letter dated 20.05.99 Ex. PW 14/D-7 itself the 25 applications including that of M/s CTL were sent to Chairman, CIL for comments (Available at page 1 in D-82).
276. However, in none of the aforesaid two communications addressed to Chairman CIL anything was specifically mentioned as regard
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 254 of 389 clearance for the impugned abandoned coal mining area as was proposed in his note dated 20.05.99 itself by A-6 N.N. Gautam. There is no other communication available in the records addressed to Chairman, CIL for considering grant of any such clearance.
277. In the meantime comments of CIL on the applications sent to them by MOC vide letter dated 20.05.99 were received vide letter dated 31.05.99 Ex. PW 15/B (Colly) (available at page 88-93 in D-62) of Sh. D.K. Biswas, Chief General Manager (CP), CIL. In the said comments as regard M/s CTL it was stated that the CIL comments have already been sent to Advisor (Projects), MOC vide letter dated 16.03.99. Thus, no further comments were sent by CIL qua the proposal of M/s CTL.
278. However once again no clearance from CIL was asked qua allotment of impugned abandoned coal mining area despite receiving of said comments from CIL. At this stage it will be pertinent to recollect that subsequent to sending letter dated 16.03.99 the officers of CIL and CMPDIL had in a meeting held with A-6 N N Gautam in Calcutta on 13.04.99 stated that it may not be possible to allot the impugned coal block in favour of M/s CTL. Thus, there was no change in the earlier stand of CIL as was already communicated to MOC by them vide letter dated 16.03.99 and subsequently in a meeting held with A-6 N.N. Gautam on 13.04.99 and which fact was duly recorded by A-6 N.N. Gautam in his note dated 16.04.99.
279. It was in the aforesaid background that both A-5 P.K. Banerjee and A-6 N.N. Gautam decided to place the request of M/s CTL for identification and allotment of impugned non-nationalized and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 255 of 389 consequently non-identified abandoned coal mining area in 14th Screening Committee meeting held on 18/19.06.99.
280. The decision taken by 14th Screening Committee qua M/s CTL has already been discussed in as much as in the name of conservation of coal the impugned abandoned coal mining area was decided to be allotted to M/s CTL subject to relaxation of guidelines earlier issued by MOC regarding allotment of blocks with minimum extraction of 1.00 mtpa.
281. For a ready reference, it will be appropriate to once again refer to the facts mentioned in the record notes of 14th Screening Committee qua M/s CTL.
“16. M/s Castron Technology Ltd. The details of the proposal were given by Adviser (Projects). He stated that the party has requested for the allotment of 105.153 ha. of abandoned coal mining area of Brahmadiha block of CCL in the district of Giridih which was abandoned in 1916 and is now full of water. The extractable reserves available in the mine are roughly estimated to be 2.215 million tonnes in the remanent pillars and no large scale mining is possible for these reserves. The party proposes to extract these reserves by opencast mining @ 0.15 million tonnes per annum. With this production the estimated reserves would last for about 15 years. The representatives of CCL and CIL informed the Committee that CCL/Coal India has no programme of working these reserves at any point of time and according to them there is no working mine belonging to CCL within the vicinity of 2.5km. On a query on end use of coal, the representative of the party informed that the raw coal will be washed in their washery to obtain washed coal for manufacturing metallurgical coke in their coke oven plant presently lying idle for use in another unit of their's in Bokaro industrial area. It was clarified by the party that the washery will be relocated after 15 years when the coal reserves in the mine are exhausted.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 256 of 389 The middlings produced during washing are proposed to be utilised for generation of power in their 2x5MW CPP which they would be setting up in two phases of 5MW each. The Committee noted that as per recent guidelines for opencast captive block, the mine does not fit in the criteria of a captive block. It further noted that these reserves are either permitted to be exploited by a private party or the reserves are allowed to be lost forever/unsafe illegal mining. The Screening Committee after detailed deliberation and in view of conservation of coal decided to allot 105.153Ha. of abandoned coal mining area of Brahmadiha block in Giridih District, CCL subject to the following condition : i) Hydrogeological studies to be carried out by the party in consultation with State Ground Water Board with a view to see that dewatering of this mine does not seriously affect the hydrogeological balance of area. ii) Extraction of coal barrier between the abandoned mine and CCL lease-hold shall not be permitted and in case dams in connection through the barrier are found damaged shall be effectively reparied. Iii) All precautions will be taken to ensure that fires do not break out due to dewatering of the area. If any fire does break it shall effectively be dealt by the party. iv) All mining operations shall be carried out with due approval of DGMS and all provision of law shall be complied with. The above will be subject to relaxation of guidelines by Ministry of Coal regarding allotment of blocks with minimum extraction of 1.00 mtpa”. (Emphasis supplied by me)
282. At this stage, it will be also worthwhile to point out that though the impugned Brahmadiha coal mining area was decided to be allotted to M/s CTL by 14th Screening Committee subject to relaxation of guidelines pertaining to minimum extraction of 1.00 mtpa coal in opencast mining but there were other guidelines also which appear to have been not considered at all much less complied with while making the impugned
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 257 of 389 allocation.
283. As earlier mentioned on the basis of recommendation of CIL Board, the 1st Screening Committee adopted the following guidelines for identifying the coal blocks for captive mining:
“6. Summing up, the Chairman mentioned that the proposed guidelines would only be used as broad parameters in support of the new policy and not as rigid boundary lines for excluding the entry of private investors. The members endorsed this approach. 7. Based on this, the following guidelines were approved: (i) Preferably blocks in green field areas where basic infrastructure like road, rail links etc. is yet to be developed should be given to the private sector. The areas where CIL has already invested in creating such infrastructure for opening new mines should not be handed over to the private sector, except on reimbursement of costs, The blocks offered to private sector should be at reasonable distance from existing mines and projects of CIL in order to avoid operational problems. Blocks already identified for development by CIL where adequate funding is on hand or in sight should not be offered to the private sector. Private sector should be asked to bear full cost of exploration in these blocks which may be offered. It was also agreed that while discussing proposals of power generating companies and identifying blocks, the requirement of coal for about 30 years would be considered.”
284. Thus, as per the said guidelines approved by 1st screening committee, preferably blocks in greenfield areas where basic infrastructure like road, rail links etc were yet to be developed were to be given to private sector. However, these guidelines were not at all considered by the 14th screening committee while deciding about allotment of impugned coal block to M/s CTL as the record notes of 14th Screening Committee are completely silent in this regard. In fact, the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 258 of 389 company M/s CTL in its own communication dated 02.06.99 addressed to Additional Secretary (Coal) i.e. A-5 P.K. Banerjee had stated that the area in question is not a greenfield area and as such question of allotment of block in their opinion does not arise. It was further stated by the company that to meet the technical formalities they have already applied for allotment of mine to the screening committee. In fact, A-6 N.N. Gautam in his note dated 16.04.99 while referring to letter dated 09.05.98 of M/s CTL had also interalia mentioned in para 3 as under:
“3. This particular abandoned mine/block is not included in the list of identified blocks of captive mining. This particular area is not a greenfield area and as such also does not conform with the guidelines adopted by the Screening Committee of the Ministry of Coal.” 285. Again A-6 N.N. Gautam in his subsequent detailed note dated 20.05.99 observed inter-alia as under:
“The block is not being in the identified list of captive mining and also not in the greenfield area were the other factors not fulfilling the requirement necessary for allocation of the block for captive end use.” 286. Thus even though in the record notes of 14th Screening Committee meeting it was mentioned that as per recent guidelines for opencast captive block the mine does not fit in the criteria of a captive block but there was no mention in the entire minutes as to which aspects of the guidelines were not getting fulfilled. Towards the end of recommendations, the allotment was stated to be subject to relaxation of guidelines by MOC regarding allotment of blocks with minimum extraction of 1.00 mtpa only. Thus, a bare reading of the record notes of 14th screening committee clearly gives the necessary and logical
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 259 of 389 inference that from out of all the guidelines for allotment of captive coal blocks the only condition being not fulfilled was the minimum extraction capacity of 1.00 mtpa. There was even no mention in the record notes that the impugned mining area is an abandoned mine and was not nationalized under CMN Act, 1973. Even though CIL & CCL had repeatedly stated that the said abandoned coal mining area is a free hold area and does not belong to CCL but still A-6 N.N. Gautam stated before the Screening Committee that the party has sought allotment of 105.153 hectares of abandoned coal mining area of Brahmadiha block of CCL in district Giridih. This statement was factually incorrect. In fact, from the various communications earlier received in MOC from CIL, CMPDIL and CCL and that of company M/s CTL itself this fact was very much to the knowledge of both A-5 P.K. Banerjee and A-6 N.N. Gautam that the said area does not belong to CCL or CIL.
287. Moreover, nothing was mentioned in the minutes about obtaining of clearance from CIL board as was earlier proposed by A-6 N.N. Gautam in his note dated 20.05.99.
288. The purpose of highlighting the above facts is two-fold. Firstly, both A-5 P.K. Banerjee and A-6 N.N. Gautam consciously omitted to mention all such facts in the minutes as could have made their recommendation to allot the said non-nationalized abandoned coal mining area to M/s CTL per se illegal.
289. Secondly, the very fact that recommendation of allotment was made subject to relaxation of guidelines by Ministry of Coal regarding allotment of blocks with minimum extraction of 1.00 mtpa itself shows
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 260 of 389 that the accused public servants considered the said guidelines to be having a binding force.
290. In fact, on 20.05.99 itself A-6 N.N. Gautam sent various communications to Secretary, Ministry of Steel Ex. PW 14/D-9, (Available at page 129 in D-82) Secretary, Ministry of Power Ex. PW 14/D-10 (Available at page 131 in D-82) and Secretary, Ministry of Industry Ex. PW 14/D-11 (Available at page 132 in D-82) under his own signatures. Vide the said communications various applications as were received in MOC for seeking allocation of captive blocks for use in different end use projects were sent to the concerned Administrative Ministries with the request to send their recommendations to MOC in the enclosed proforma. In all the above communications the following facts were also mentioned in para 2:
“It has recently been decided that application for mining of a coal block for a quantity less than 1 m. tes. per annum in opencast mining and less than, 250,000 per annum in underground mining would not be entertained so as to ensure economic/scientific extraction of India coal. This may kindly be kept in view while screening the applications and making appropriate recommendations for consideration of this Ministry in each individual case.” 291. Thus, the aforesaid facts as communicated by A-6 N.N. Gautam to various Administrative Ministries clearly show that the officers in MOC considered the said guidelines to be having a binding effect. It thus can not be argued that the guidelines of minimum extraction were not binding.
292. However, the question which arises for consideration at this stage is whether the guidelines for identification of captive blocks as were
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 261 of 389 formulated by the first screening committee in its meeting held on 14.07.1993 were having any binding or at least persuasive force upon the accused public servants or not.
293. It has been however argued by Ld. Counsels for the accused public servants that a bare perusal of the minutes of first Screening Committee meeting Ex. PW 14/DX-3 (Colly) (available at page No.152-158 in D-165) clearly shows that the guidelines approved for identification of captive coal blocks to be allocated to private sector companies were only to be used as broad parameters in support of the new policy of the Government to allocate captive coal blocks to private sector companies engaged in specified end uses and that the said guidelines were not to operate as rigid boundary lines for excluding the entry of private investors. It has also been submitted that even as per the said guidelines there was no bar in allocating such areas to private sector companies where basic infrastructure like road, rail links etc. were already developed and it was only mentioned in the guidelines that preferably blocks in greenfield areas where basic infrastructure like road, rail link etc. were yet to be developed should be given to the private sector. It was also pointed out that the other guidelines so approved mandated that the blocks offered to private sector companies should be at reasonable distance from existing mine and project of CIL in order to avoid operational problems. It was thus submitted that CIL had already communicated to MOC that the Brahmadiha coal mining area was at a reasonable distance from the working mine of CCL. It was also submitted by Ld. Counsel for accused public servants that in accordance
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 262 of 389 with the said guidelines M/s CTL had deposited the full cost of exploration with CMPDIL. It has thus been submitted that there has been no violation of the said guidelines.
On the other hand Ld. Sr. PP has submitted that not only the existing working mine of CCL was situated at a distance of only 2.5 kilometers from Brahmadiha coal mining area but even otherwise it was not a greenfield area where basic infrastructure like road, rail link etc were already developed other there.
294. At the outset, I may state that clearly the guidelines approved by the first Screening Committee were in the nature of broad parameters only so as to support the new policy of the Government to allocate captive coal blocks to private sector companies. However in my considered opinion, when it was being specifically mentioned not only by the applicant company itself but by CCL, CIL and by the officers of MOC including A-6 N.N. Gautam that the block was not in a greenfield area then the least expected of the Screening Committee was to mention some reasons as to why such a block was being considered for allocation. No doubt in the guidelines so formulated the word “preferably” has been used but the use of said word itself suggest that allocation of a block in greenfield area where basic infrastructure like road, rail link etc. are yet to be developed should be the ideal choice i.e. if possible be given to private sector companies. It thus clearly means that if the ideal position as prescribed by the guidelines can not be followed then the Screening Committee ought to have mentioned some logical reasons for not being able to follow the said guidelines. The purpose of formulating
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 263 of 389 the said guidelines was to rule out any element of arbitrariness in the exercise of discretion by the public servants involved in the process of allocation of captive coal blocks. The said guidelines undisputedly provided the logical and reasoned steps as to how the MOC officers and the Screening Committee shall undertake the decision-making process vide which allocation of captive coal blocks in favour of private applicant companies will be made.
295. Ld. Counsels for A-5 P K Banerjee and A-6 N N Gautam have also argued that as the decision to allot Brahmadiha coal Mining area was taken by the Screening Committee jointly and unanimously, so the present two accused persons cannot be made solely liable for the said acts. In this regard, it would be suffice to state that as Chairman and Member Convenor it was their prime responsibility to ensure that the proceedings of the meeting are conducted in accordance with the established practice and procedure and that all the applicable rules and regulations are duly complied with. Thus irrespective of the responsibility of other members of the screening committee the present two accused persons can not say that as other members of the screening committee are not being prosecuted, so they be also not prosecuted. At the cost of repetition, I may state that these two accused persons were not only officers of the Nodal Ministry i.e. of MOC but were also the Chairman and Member Convenor of the screening committee and were thus duty bound to ensure that all the decisions are taken not only in MOC but also in the Screening Committee in accordance with law.
296. At this stage, it would be however pertinent to mention once
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 264 of 389 again that in the present proceedings this Court is primarily examining as to whether the actions of accused public servants i.e. of MOC officers involved in the process of allocation of Brahmadiha coal block in favour of company M/s CTL had any element of malafide intention i.e. whether there was any culpability in the said actions or not. In the case Sudhir Shantilal Mehta (Supra), Hon'ble Supreme Court while examining the actions of certain bank officers who acted in violation of guidelines issued by RBI also dealt with the issue of criminal liability of the officers and interalia observed as under in para 64:
“The act of criminal breach of trust per se may involve a civil wrong but a breach of trust with an ingredient of mens rea would give rise to a criminal prosecution as well.”
297. As has been amply discussed in the earlier part of the judgment, that allotment qua small reserves and in isolated patches could not have been directly made by the Screening Committee. With respect to such reserves the procedure given in Section 3 (C) CMN Act, 1973 was to be followed and that too only with respect to coal blocks which stood covered by CMN Act,1973. Moreover, conservation of coal though may be a loudable objective but to achieve the said end, law provided a specific course of action which ought to have been followed by the accused public servants. Further in the name of conservation of coal the other primary policy objectives for regulating participation of private sector companies in captive coal mining were completely overlooked. There was no specified end use in which the washed coal was to be used.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 265 of 389 298. From my aforesaid discussion, it is thus crystal clear that the two accused public servants i.e. A-5 P.K. Banerjee and A-6 N.N. Gautam, facilitated allocation of impugned coal block in favour of A-1 company M/s CTL in complete violation of the direction of law by abusing their official position with a malafide intention and that too without any public interest. The charge for the offence of Criminal Misconduct u/s 13(1)(d) thus clearly stands proved against both the accused public servants i.e. A-5 P.K. Banerjee and A-6 N.N. Gautam, beyond shadows of all reasonable doubts.
299. In fact, after discussing the role played by A-4 Dilip Ray, it will become apparent that all the aforesaid acts undertaken by the accused public servants were in pursuance to a well planned course of action which were being adopted primarily at the instance of Sh. P.K. Agarwalla, brother of A-2 M.K. Agarwalla so as to obtain allocation of impugned non- nationalized abandoned coal mining area in favour of M/s CTL.
300. Having thus discussed the role played by A-5 P.K. Banerjee and A- 6 N.N. Gautam, it will be now appropriate to discuss the role played by A- 4 Dilip Ray, the then Minister of State for Coal.
J (ii) Role played by A-4 Dilip Ray, Minister of State for Coal.
301. As regard A-4 Dilip Ray, Minister of State for Coal primarily four acts have been attributed to him. Three such acts attributed to him are dated 12.05.99. It is the case of prosecution that on 12.05.99 he approved note dated 07.05.99 of Secretary coal [available at note sheet page 26 in file Ex. P–130 (Colly.)(D-81) and also available at page
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 266 of 389 17/N in file Ex. PW 32/M (D-62)] whereby two things were proposed by secretary Coal. Firstly, it was proposed that a condition may be laid down that an application for mining of coal block for quantity less than one million tonnes per annum in opencast mining and less than 250,000 tonnes per annum in underground mining would not be entertained so as to ensure economic/scientific mining of India coal. Secondly, it was also proposed in the same note that applications received after 11.2.1997, and those pending before can be taken up simultaneously with other applications after the decision had been notified to the nodal ministries and applications received from them, say in a period of about 14 days. Further on 12.05.99 itself, A-4, Dilip Ray in another file also directed for re-examination of the case of M/s CTL pursuant to receipt of application dated 21.04.1999 from Mr. P. K. Agarwalla on behalf of company M/s CTL [Available at page 11/N in file Ex. PW4/DX-1(Colly.)(D-38)]. The fourth act attributed to A-4 Dilip Ray is that subsequently on 23.08.99 pursuant to recommendations of 14th Screening Committee in favour of M/s CTL for allocation of Brahmadiha Coal Mining Area, he agreed to relax the guidelines as were earlier approved by him for allotment of captive coal blocks by opencast mining and thereby facilitated allotment of said non-nationalized abandoned coal mining area in favour of M/s CTL. [Available at page 17/n in File Ex. 4/DX-1 (Colly.)(D-38)].
(As earlier also mentioned, similar proceedings/notings are there in more than two files, as it appears that whenever any file was pending before some senior officer than further proceedings were carried out in some part file created for the said proceedings and later on the files were
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 267 of 389 merged and photocopy of the proceedings carried out in part file were than placed in the main file also. It is for the said reason that same proceedings/notings are available in more than one file.)
302. However, in order to appreciate the conduct or the role played by A-4 Dilip Ray, it would be appropriate to revisit briefly the events which took place during the time when the directions dated 12.05.99 were passed by him for re-examination of the matter of M/s CTL and also for permitting applications received after 11.02.1997 to be considered for allocation of captive coal blocks.
303. As has already been discussed, A-6 N.N. Gautam vide a detailed note dated 16.04.99 (available at page 9/n to 11/n in D-38) stated that for the reasons mentioned in the notings it may not be possible to allot the abandoned coal mine area to M/s CTL. He had also mentioned in his note that the application of M/s Castron Technologies Ltd is dated 9.5.98 and that applications received after 11.2.97 are not being considered for allotment of captive blocks. He also mentioned in his note that the matter was discussed again with CIL and CMD, CMPDIL in Calcutta on 13.04.99. In this meeting, it emerged that this totally non-viable block with such limited reserves which is not included in the identified list of captive blocks should not be given for captive mining to M/s CTL.The file containing the said note of A-6 N N Gautam was duly forwarded by A-5 P.K. Banerjee to Secretary, Coal and who vide his signatures dated 23.04.99 forwarded it to A-4 Dilip Ray i.e. Minister of State for Coal.
At the same time yet another file Ex. P – 130 (Colly.)(D-81) was being processed by MOC officers. As already mentioned in the said file
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 268 of 389 Joint Secretary Coal Sh. J Harinarayan had recorded a detailed note at note sheet pages 6/n to 11/n wherein he recorded his detailed comments qua the 17 applications which were received after 11.02.97 and as regard M/s Castron Technologies Ltd. he mentioned the following facts in para 3.5.3 :
“3.5.3 We have not so far allotted any captive coal block for the washery sector. Since “washery” is also included in the definition of “mine”, setting up of washeries in the private sector is facilitated by the June, 1993 amendment but not for extraction of the coal by the washery owners. Before the June, 1993 amendment, setting up of washeries by private companies was not possible. Moreover, washed coal can be sold in the open market. The unrestricted end-uses for the washed coal go against the spirit of captive consumption for specified en-uses in the June, 1993 amendment. Therefore, it is not possible to allot captive blocks to M/s Castron Technologies Limited and M/s Central Utilities and Investments Limited, for coal washing.” 304. The file after being routed through the desk of A-6 N N Gautam and A-5 P. K. Banerjee came to be put up before Secretary Coal, Sh. S S Boparai vide note dated 16/17.03.99 of A-5 P K Banerjee. In his said note, he made the following observations qua the 17 new applicants:
“6. Another issue meriting consideration is that the 17 new applicants requirement of coal is for rather small volumes which on the face of it can be met by our coal companies. And linked with it is the question of conservation and optimum size of mining blocks. Economically mining reserves in India are not large and therefore whatever limited reserves that we have should be exploited wisely. 7. In view of what is stated at paras 2 to 6 above it is for consideration whether the 17 new applications should be taken up for consideration now or at a more opportune time later.” 305. It was thereafter that the file with a detailed note dated 07.05.99 of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 269 of 389 Secretary Coal Sh. S. S. Boparai came to be put up before A-4 Dilip Ray. As earlier mentioned Secretary Coal Sh. S. S. Boparai in his note dated 07.05.99 had interalia proposed as under:
Note dated 07.05.99 (available at Note sheet page s 15- 17 in D-62)
“...... Applications received after 11.2.1997 and those pending before can be taken up simultaneously with other applications after the decision has been notified to the nodal ministries and applications received from them, say in a period of about 14 days. JS (Coal)'s note does make a valid point that every Tom, Dick and Harry should not be able to obtain a captive block. So we have to take the precaution for saving our coal blocks from such vultures. Even while proposing the fresh amendment, we have inserted a clause that the minimum size of the coal mine and such other conditions which may be necessary for the purpose of coal mining operations by a company can be laid down by the Government. I have consulted Adv(P) in this respect. Scientific mining as an economic unit of coal can be done in an open cast mine of one million tonnes per year production. Similarly, in under- ground mining, a unit should produce 250 thousands tonnes per year. So MOS(Coal) may kindly lay down the condition that an application for mining of a coal block for quantity less than one million tons per annum in open cast mining and less than 250,000 tons per annum in underground mining would not be entertained so as to ensure economic/scientific mining of Indian coal. MOS (Coal) may kindly approve the modification of this earlier decision to the extent stated above in my note. Sd/- (Swarn Singh Boparai, K.C.) Secretary 07.05.99”
306. However, the record shows that thereafter pursuant to receipt of representation of M/s CTL in the office of A-4 Dilip Ray, Minister of State
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 270 of 389 for Coal on 12.05.99, he completely ignored the earlier observations made by various officers of MOC in both the aforesaid files and directed re-examination of the representation received from Sh. P K Agarwalla on behalf of M/s CTL. Though on the face of it, the said endorsement for re- examination of the representation may appear to be an innocuous act, but a careful perusal of the sequence of events which followed it show that it was a conscious and deliberate direction given by A-4 Dilip Ray for re-examination. It was immediately pursuant to his aforesaid directions for re-examination that a turn-around took place in MOC as regard the application of M/s CTL. The company was till then stated to be not entitled for allotment of impugned abandoned coal mine. However A-4 Dilip Ray the then Minister of State for coal on 12.5.99 itself while approving note dated 07.05.99 of Secretary Coal, in another file not only approved the policy of minimum extraction of coal by opencast mining and underground mining but also accorded permission to consider applications received after 11.2.1997 for allocation of captive coal blocks. Ld. Counsel for accused has however stated approval of note dated 07.05.99 also to be an innocuous act, from which no adverse inference can be drawn against the accused much less existence of any malafide intention in his actions. However, my subsequent discussion would show that it is not so and that malafide intention on the part of A-4 Dilip Ray is writ large on the face of record. Certain facts however needs to be reiterated in order to appreciate the role played by A-4 Dilip Ray.
307. Pursuant to directions for re-examination passed by A-4 Dilip Ray, the application of the company was suddenly proposed to be placed
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 271 of 389 before the Screening Committee for consideration by A-6 N N Gautam vide his note dated 20.05.99 (available from page 12/n-14/n in D-37). The company was also suddenly opined to be entitled for allotment of said abandoned coal mining area subject to relaxation of guidelines and it was also stated in the light of observations made in the note that clearance from CIL could be possible and that CIL may be asked to send their comments in the light of facts recorded in the note. Strangely enough the file containing the said note dated 20.05.99 of A-6 N.N. Gautam, travelled only till the desk of A-5 P.K. Banerjee and who made an observation vide note dated 31.05.99 (available at page 13/n in D-37 and also at note sheet page 14/n in D-38) as to whether the mining block was meeting the criteria of minimum size as was approved in another file relating to policy issues of captive coal mining blocks allotment or not. Thereafter, A-6 N.N. Gautam again put up a detailed note dated 03.06.99 (available at page 14/n in D-37) and wherein he again proposed that the proposal of M/s CTL may be put up before the Screening Committee for consideration. He however also stated that though the coal block does not meet the minimum extraction criteria and does not meet the criteria of a captive coal block but being an abandoned mine having very little reserves, so if the small reserves available are not permitted to be exploited by a private party with a small production, then the same will never be exploited at all. He however also made some addition of his own to the earlier comments of CCL as were received from CIL. The stand of CCL as was communicated by CIL vide its letter dated 16.03.99 was that CCL does not have any proposal to work in Brahmadiha patch in the near future as the area is a free hold area. The said comments
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 272 of 389 were however modified by A-6 N.N. Gautam by stating that CCL/Coal India has no programme of working these reserves at any point of time. He also stated that this abondoned mine can never be a aprt of the list of captive mining blocks.
308. Thus A-6 N.N. Gautam presented a picture that CCL has no plan to work in the said reserves at any point of time even though Sh. B.D. Rudra, G.M. (PPD), CMPDIL in his comments dated 20.05.99, Ex. PW 5/F-2 (Colly) (Available at page 35 in D-103) had observed that in the past CCL was of the view that due to prime coking coal in this block the same can be worked if SAIL is willing to share the cost.
309. Thereafter on 04.06.99 A-5 P.K. Banerjee approved the note dated 03.06.99 of A-6 N.N. Gautam and thus the proposal of M/s CTL was decided to be placed before the 14th Screening Committee for consideration.
310. However, as already mentioned, this decision qua M/s CTL was taken inter-se A-5 P.K. Banerjee and A-6 N.N. Gautam and in between the aforesaid notings the file neither travelled to the desk of any senior officer nor it travelled down to either Director CPAM or to Under Secretary, CPAM or even to CPAM Section where the file was originally marked upon receipt of a letter of M/s CTL from the office of Minister of State for Coal for re-examination. However at the same time A-6 N N Gautam had also put up another note dated 03.06.99 in another file D-62 for the Screening Committee meeting to be held on 18/19.06.99. Vide the said note he had put up the agenda note qua all the applications including that of M/s CTL to be put up before the Screening Committee
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 273 of 389 for consideration and to which A-5 P.K. Banerjee agreed vide his signatures dated 04.06.99. On this occasion also the file did not travel beyond the desk of Additional Secretary, Coal to any senior officer and all the applications including that of M/s CTL thereafter came to be directly placed before 14th Screening Committee for consideration. As also earlier discussed, the 14th Screening Committee thereafter proceeded to allot said non-nationalised abandoned coal mining area in favour of M/s CTL in clear contravention of the provisions of CMN Act, 1973.
311. At this stage, it will be pertinent to recollect that in the meantime comments of CIL on the applications sent to them by MOC vide letter dated 20.05.99 Ex. PW 14/D-7 (D-82), were received vide letter dated 31.05.99 Ex. PW 15/B (Colly) (available at page 88-93 in D-62) of Sh. D.K. Biswas, Chief General Manager (CP), CIL. In the said comments as regard M/s CTL it was stated that the CIL comments have already been sent to Advisor (Projects), MOC vide letter dated 16.03.99. Thus, no further comments were sent by CIL qua the proposal of M/s CTL. Furthermore, as also earlier discussed, subsequent to sending letter dated 16.03.99 By Director Technical, CIL, the officers of CIL and CMPDIL had in a meeting held with A-6 N N Gautam on 13.04.99 i Calcutta stated that it may not be possible to allot the impugned coal block in favour of M/s CTL. Thus, there was no change in the earlier stand of CIL as was already communicated to MOC by them vide letter dated 16.03.99 and subsequently in a meeting held with A-6 N.N. Gautam on 13.04.99.
It is in the aforesaid background that the acts attributed to A-4
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 274 of 389 Dilip Ray needs to be examined.
312. However, before proceeding further, it will be important to point out an important event which had taken place during those days. Admittedly on 13.04.99 the then Central Government in power had lost the vote of confidence in Parliament. Accordingly, as per the past practice the Hon'ble President of India asked the same Government to act as a Care- taker Government. Necessary notification dated 26.04.99 towards dissolving the Lok Sabha was also issued by the Hon'ble President of India. Subsequently Election Commission of India also issued a Press note dated 11.07.99 announcing the schedule for holding General elections to elect a new Lok Sabha. It also stated that consequent to the announcement of general elections through the said Press note, the Model Code of Conduct for the guidance of political parties and candidates comes into operation with immediate effect in the entire country. (Certainly judicial notice of all such facts can be taken by the court u/s 57 Cr.PC)
313. Thus, all the acts as have been now attributed to A-4 Dilip Ray pertain to the said period when he was acting as part of a Care-taker Government. It will be thus appropriate to first discuss as to what all nature of functions such a Care-taker Government could have performed. Hon'ble Supreme Court and various Hon'ble High Courts have observed in different cases as regard the power and functions which may be performed or undertaken by such a Care-taker Government.
314. In the case Madan Murari Verma Vs. Chaudhary Charan Singh,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 275 of 389 AIR 1980 Calcutta 95, Hon'ble Calcutta High Court as regard the role and functions of a Care-taker Government observed as under:
“There is no mention of any care-taker Government as such, in our Constitution or in the constitutional law, though Sir Ivor Jennings has described in his book -- Cabinet Government, Third Ed. p. 85 the ministry that was formed by Mr. Churchill in England after the war before and pending the General election in 1945 as care-taker Government. But an extraordinary situation like the present, in my opinion, calls for a care-taker Government and therefore, the respondent No. 1 and his Council of Ministers can only carry on day-to- day administration in office which are necessary for carrying on "for making alternative arrangements". In effect the President, in my opinion is therefore, not obliged to accept the advice that the respondent No. 1 and his Council of Ministers tender to him except for day-to-day administration and the Council of Ministers and the respondent No. 1 should not make any decisions which are not necessary except for the purpose of carrying on the administration until other arrangements are made. This in effect means that any decision or policy decision or any matter which can await disposal by the Council of Ministers responsible to the House of People must not be tendered by the respondent no. 1 and his Council of Ministers. With this limitation the respondent No. 1 and the Council of Ministers can only function. And in case whether such advice is necessary to carry on the day-to-day administration till "other arrangements are made" or beyond that, the President, in my opinion, is free to judge.” (Emphasis supplied by me)
315. Subsequently in the case Sudarshan Goel Vs. UOI, 1991, SCC online Del 299, Hon'ble Delhi Court while referring to the observations of Hon'ble Calcutta High Court in the case Madan Murari Verma (Supra) further observed as under as regard the role and functions of a Care- taker Government:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 276 of 389 “We have considered the aforesaid submissions of the learned counsel. It is true that the exercise of power under Article 356 may be subject to judicial review after deletion of clause (5) by the 44th Amendment. But the question is as to whether there are any genuine apprehensions on the part of the petitioner that the power under Article 355 would not be properly exercised, more particularly, when there has been a statement made by the care-taker Government that it has no intentions to impose President's Rule. It has also been submitted before us that the President has not been accepting the advice of the care-taker Government. The President has refused to make appointments, as advised by the care-taker Government. That also shows that the President is acting in a manner knowing fully well the limitations of the care-taker Government. Postponing of decisions and policies and actions of care-taker Government by the President shows that the President is not being carried away by the advice of the care-taker Government. This being so, we feel that it would not be proper for this Court to issue any directions as sought by the petitioner after notice to the respondents.” (Emphasis supplied by me)
316. In fact in the year 1988 the Justice Sarkaria Commission report on Center-State relations had also made the following observations regarding a Care-taker Government in Chapter-IV titled “Role of Governor”:
4.11.27 : If the Governor concludes that the Assembly should be dissolved and an election can be held early, he should normally ask the outgoing Ministry to continue as a Care-taker Government. Here, a convention should be adopted that a Care-taker Government should not take any major policy decisions.
317. The said recommendations of Justice Sarkaria Commission report were referred to by Hon'ble Supreme Court in the case S.R. Bommai Vs. Union of India (1994) 3 SCC 1. As regard the role and functions
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 277 of 389 which could be performed by a Care-taker Government, the Hon'ble Court observed as under:
“6.8.04.(a) In a situation of political breakdown, the Governor should explore all possibilities for having a Government enjoying majority support in the Assembly. If it is not possible for such a Government to be installed and if fresh elections can be held without avoidable delay, he should ask the outgoing Ministry, if there is one, to continue as a caretaker Government, provided the Ministry was defeated solely on a major policy issue, unconnected with any allegations of maladministration or corruption and is agreeable to continue. The Governor should then dissolve the Legislative Assembly, leaving the resolution of the constitutional crisis to the electorate. During the interim period, the caretaker Government should be allowed to function. As a matter of convention, the caretaker Government should merely carry on the day-to-day Government and desist from taking any major policy decision. At the same time, we are inclined to say, having regard to the constitutional scheme obtaining under our Constitution, that the recommendations do merit serious consideration.” (Emphasis supplied by me)
318. The recommendations of Justice Sarkaria Commission were also reiterated by Justice M.M. Punchi Commission on Center-State relations in its March 2010 report.
319. Thus, from the aforesaid judicial pronouncements, it is clear that a Care-taker Government is required to undertake only such functions or take only such decisions as are required for running day to day administration. The Council of Ministers should not make any decisions which are not necessary except for the purpose of carrying on the administration until other arrangements are made.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 278 of 389 320. Accordingly, in the light of aforesaid limitation on the role and power of A-4 Dilip Ray, the then Minister of State for coal, being part of a Care-taker Government, his actions are required to be seen and discussed. It needs to be analysed as to whether the actions undertaken by him were required for day to day administration or the same could have awaited decision by a duly elected Government. This would be an important indicator of the intention of the accused in undertaking the impugned actions despite being part of a care-taker government. Later on, I shall be also examining the significance of actions of A-4 Dilip Ray taken by him in such haste that he joined his office on 12.05.99 only (As deposed to by PW 4 Sh. Bimbadhar Pardhan, Principal Secretary to A-4, the then Minister of State for Coal) and cleared the path for re- examination of the application of company M/s CTL despite observations to the contrary recorded in the file by various officers of MOC, that the request of company M/s CTL cannot be acceded to.
321. I thus first propose to deal with the various acts of A-4 Dilip Ray individually and thereafter cumulatively so as to examine whether the same indicates existence of any malafides in his impugned actions and also whether he undertook the said acts consciously as part of a criminal conspiracy alongwith other accused public servants so as to favour M/s CTL in obtaining allocation of impugned coal mining area.
The acts attributed to A-4 Dilip Ray are as under:
1.) A-4 Dilip Ray on 12.05.99 approved a note dated 07.05.99 of Secretary (Coal) [Available at page 17/n in file Ex. P-131 Colly (D- 62)and also available at page 17/n in file Ex. P-130 (D-81)] whereby it was proposed that a condition may be laid down that an application
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 279 of 389 for mining of coal block for quantity less than one million tonnes per annum in opencast mining and less than 250,000 tonnes per annum in underground mining would not be entertained so as to ensure economic/scientific mining of India coal. 322. Certainly, the said decision had the effect of making certain companies having less requirement of coal ineligible for obtaining allotment of a coal block, but at the same time it benefited companies having large requirement. Undoubtedly, the approval of said guidelines for allotment of captive coal blocks for opencast mining and underground mining amounts to taking a major policy decision and which A-4 Dilip Ray as part of a Care-taker Government should not have taken. The question which however requires examination is as to whether the impugned decision was necessary for day to day administration or it could have waited until the new elected Government was formed.
323. Certainly, there cannot be any clear-cut answer to the aforesaid proposition, but it appears that as coal was an important raw material required for the industrial development of the country, so there was an urgency to take a decision on the pending applications received for allotment of captive coal blocks. Accordingly, approval of the said guidelines as was proposed by MOC could be considered as a decision to not to stall consideration of applications already received in MOC for seeking allocation of captive coal blocks, lest it may impact the industrial development of the country. I thus deem it appropriate to extend benefit of doubt to A-4 Dilip Ray qua his said action. However, it would have been desirable, if while approving the said policy guidelines, he would have recorded a note as to why despite being part of a care taker
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 280 of 389 Government he is still proceeding ahead with the approval of said policy decision.
2.) A-4 Dilip Ray on 12.05.99 itself, also accorded permission to consider applications received after 11.02.1997 to be considered for allocation of captive coal blocks, as was proposed by Secretary Coal in the same note dated 07.05.99. The said act facilitated consideration of applications received after 11.02.1997 including that of M/s CTL beside 15 other applications of various other companies. 324. Apparently, permitting consideration of applications received after 11.02.1997 and thereby changing the earlier policy decision taken in MOC can not be stated as an action required for running day to day administration and was clearly in the nature of a policy decision. The said decision in fact resulted in directly benefiting various companies including M/s CTL. Thus, it is clear on the face of record that A-4 Dilip Ray being part of a care-taker government, ought not to have taken such a decision or at-least he ought to have mentioned the special circumstances under which or for which, he was taking the said decision during that period. Thus taking of said decision and thereby directly benefiting company M/s CTL like 15 other companies is a strong indicator of the intention of A-4 Dilip Ray and especially when the said action is seen and considered in the light of his other acts undertaken in relation to the matter relating to M/s CTL, as is being examined in the present matter.
325. Thus at the cost of repetition, it may be mentioned that the impugned approval of note dated 07.05.99 of Secretary Coal by A-4 Dilip Ray, can by no stretch of arguments be termed as decisions taken for running the day to day administration, but the two decisions were in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 281 of 389 nature of policy decisions taken by him. It would have been thus desirable that while taking the said policy decisions, a specific note about the urgency of the matter would have been also recorded by him in the file. The same would have shown as to why policy decisions are being taken by a Minister of a Care-taker Government. The said decisions thus can not be termed as innocuous decisions by any stretch of arguments.
3.) A-4 Dilip Ray on 12.05.99 also referred a representation dated 21.04.99 recieved from P. K. Agarwalla on behalf of M/s CTL on 12.05.99 only to Ministry of Coal for re-examination (available at page 11/n in D-38). 326. Though the act of referring the representation of M/s CTL as was received in the office of A-4 Dilip Ray on 12.05.99 to MOC for re- examination is also stated to be an innocuous act by Ld. Counsel for accused, but a careful perusal of the proceedings which had taken place in MOC till than or subsequent thereto presents a completely different picture.
327. The impugned file of MOC i.e. file Ex. PW 4/DX-1 (Colly) (D-38) had come to be placed before A-4 Dilip Ray, the then Minister of State for coal pursuant to a detailed note dated 16.04.99 of A-6 N.N. Gautam, Advisor (Projects), MOC and Member Convenor. [The note dated 16.04.99 has already been reproduced and discussed in detail in the earlier part of the judgment.]
328. A-6 N.N. Gautam, Advisor (Projects), MOC and Member Convenor had after reproducing all the proceedings which had taken place till then specifically stated that the abandoned coal mining area can not be allotted to M/s CTL. The said note was also forwarded by Additional
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 282 of 389 Secretary, (Coal) and Secretary (Coal) to A-4 Dilip Ray, Minister of State for Coal, without making any further observation in the file. Thus, there was no occasion left for re-examination of the claim of M/s CTL as was directed by A-4 Dilip Ray, and especially when the claim of the company was already considered by all the concerned officers in the Ministry.
329. Though in his written submissions, it has been claimed by A-4 Dilip Ray that after considering the notings recorded by the officers of MOC, the Minister referred the representation of M/s CTL for re-examination in view of the facts mentioned in the representation. However, if A-4 Dilip Ray had considered the previous notings in the file, then the representation of M/s CTL could not have been at all referred for re- examination since the coal block in question was an abandoned coal mining area and which was never nationalized. The said coal mining area thus could have been never allotted for captive mining by the screening committee.
330. Moreover, the significance of said act of directing re-examination has already been discussed in as much as the same resulted in a complete U-turn in MOC while re-considering the application of M/s CTL. In fact 12.05.99 appears to be a date from when the accused public servants openly entered the bandwagon of criminal conspiracy as was already hatched by the private parties involved. It will be all together a different matter that the accused officers joined the conspiracy voluntarily on their own or under pressure from higher ups. The said fact however becomes irrelevant as the fact remains that they undisputedly became part of the criminal conspiracy.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 283 of 389 331. Further as the policy for minimum extraction of coal by opencast mining was approved on 12.05.99 itself by A-4 Dilip Ray, so for the said reason also the representation of M/s CTL which clearly was not meeting the said policy decision/requirement ought not to have been marked for re-examination.
332. Be that as it may, the marking of said representation for re- examination could in no way be termed as an action required to be undertaken for running day to day administration by a Minister of a Care- taker Government and in view of the peculiar nature of the impugned coal block having coal reserve in small and isolated pockets and being also a non-nationalised coal block, so its allocation could have always waited for a decision by a duly elected Government, for its allocation was clearly in contravention of the unambiguous provisions of CMN Act,1973.
4.) A-4 Dilip Ray on 23.08.1999 approved the proposal of 14th Screening Committee for relaxation of guidelines as were earlier approved by him on 12.05.99 for allotment of coal blocks by opencast mining, so as to facilitate M/s CTL in obtaining allocation of the impugned non-nationalized abandoned coal mining area in District Giridih, Bihar. [available at page 17/n in file Ex.14/B (colly) (D-37)].
333. The act of A-4 Dilip Ray in approving relaxation of guidelines in favour of M/s CTL on 23.08.99 can in no way be termed as an act required to be undertaken for running day to day administration. The act of according permission to relax the earlier policy decision so as to extend benefit to one particular company was certainly a policy decision beyond the ambit and mandate of a care-taker Government.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 284 of 389 334. If at all approval of the said policy of minimum extraction is considered as an action requiring urgency and which could not have waited for the formation of a regular Government, then relaxation of said policy decision in favour of one particular company certainly can not be stated to be a decision which could not have waited till a duly elected Government was in place. Thus, irrespective of the merits of the decision, it is clear that the decisions were clearly beyond the scope and mandate of the Minister of a Care-Taker Government. He also seems to be acting in undue haste to somehow facilitate allocation of impugned coal block in favour of company M/s CTL and in the process exceeded not only his authority as a Minister of a Care Taker Government but also did not deem it appropriate to wait for a new elected government to take over.
335. At this stage, it will be also appropriate to consider the significance of undue haste with which A-4 Dilip Ray acted initially on 12.05.99 in taking various decisions which directly benefited M/s CTL and subsequently on 23.08.99 by approving the relaxation of guidelines in favour of M/s CTL. In this regard, some observations of Hon'ble Supreme Court made while dealing with some such instances will be worth referring to:
336. In the case NOIDA Entrepreneurs Assn. v. NOIDA, (2011) 6 SCC 508, Hon'ble Supreme Court as regard the issue of haste observed as under: “27…In view of the fact that there was no urgency, such a contract should not have been awarded. Undoubtedly, Respondent 4 is guilty of proceeding in haste and that
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 285 of 389 amounts to arbitrariness. 28. While dealing with the issue of haste, this Court in Bahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia [(2004) 2 SCC 65] , referred to S.P. Kapoor (Dr.) v. State of H.P. [(1981) 4 SCC 716 : 1982 SCC (L&S) 14 : AIR 1981 SC 2181] and held that: (Jagdishbhai M. Kamalia case [(2004) 2 SCC 65] , SCC p. 75, para 25) “25. … when a thing is done in a post-haste manner, mala fides would be presumed….” 29. In Zenit Mataplast (P) Ltd. v. State of Maharashtra [(2009) 10 SCC 388] this Court held: (SCC p. 399, para 39) “39. Anything done in undue haste can also be termed as arbitrary and cannot be condoned in law….” 30. Thus, in case an authority proceeds in undue haste, the Court may draw an adverse inference from such conduct. It further creates a doubt that if there was no sufficient reason of urgency, what was the occasion for Respondent 4 to proceed in such haste and why fresh tenders had not been invited.” 337. In another case titled Rajiv Kumar v. State of U.P., (2017) 8 SCC 791, Hon'ble Supreme Court as regard the issue of undue haste observed as under:
“33.Undue haste in conversion and allotment: In the entire sequence of events, starting from applying for allotment of a residential plot under Scheme III of 1994 and securing an allotment in Sector 14-A by undergoing two conversions, undue haste shown in getting Plot No. 27 in Sector 14-A allotted is evident from more than one aspect. Firstly, on the very same day i.e. 27-9-1994 on which Plot No. B-86 in Sector 51 was allotted to the appellant, he applied for conversion of the plot to a smaller plot in Sector 14-A. Secondly, on the very same day i.e. 15-10-1994, when Plot No. A-36 in Sector 44 was allotted to him, appellant Rajiv Kumar made application, Ext.Ka-32 requesting for allotment of plot in Sector 14-A. On the very same date i.e. on 15-10-1994, Ext.Ka-34 was put up for conversion of Plot No. A-36 in Sector 44 (450 sq m) to a smaller plot in Sector 14-A and the same was approved by Neera Yadav on the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 286 of 389 very same day i.e. 15-10-1994. It passes one's comprehension as to how quickly everything happened on the same day. That apart, immediately the demand of the appellant was fulfilled and within two days i.e. on 17-10- 1994, Plot No. 27 of 300 sq m in Sector 14-A was allotted to him. Undue haste only leads to an adverse inference.”
338. Furthermore, in the case titled Inderpreet Singh Kahlon v. State of Punjab, (2006) 11 SCC 356, Hon'ble Supreme Court as regard the issue of undue haste observed as under:
“71. Furthermore, a decision in undue haste was taken. So far as the nominated officers are concerned, whereas a note containing 90 pages was sent to the Chief Secretary of Punjab on 22-5-2002, the services of all the officers were terminated on the next day. Apart from the materials which have been relied on in the report, no further evidence was probably brought in between 23-5-2002 and 24-8-2002 when the services of the executive officers were terminated. 72. It is, thus, furthermore, beyond anybody's comprehension as to why action had to be taken in undue haste. 73. We do not intend to suggest that in any emergency it was not permissible but we have not been shown that any such emergent situation existed. It was in any event necessary for the State to show as to how the records moved so as to satisfy the conscience of the court that there had been proper and due application of mind on the part of the authorities concerned. An action taken in undue haste may be held to be mala fide. (See Bahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia [(2004) 2 SCC 65] .)” 339. In the case Bahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia, (2004) 2 SCC 65, Hon'ble Supreme Court while referring to the observations made in the case S.P. Kapoor (Dr) v. State of H.P. [(1981) 4 SCC 716 : 1982 SCC (L&S) 14 : AIR 1981 SC 2181] observed as under as regard the issue of post-haste:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 287 of 389 “25. In S.P. Kapoor (Dr) v. State of H.P. [(1981) 4 SCC 716 : 1982 SCC (L&S) 14 : AIR 1981 SC 2181] this Court held that when a thing is done in a post-haste manner, mala fide would be presumed, stating: (SCC p. 739, para 33) “33. … The post-haste manner in which these things have been done on 3-11-1979 suggests that some higher-up was interested in pushing through the matter hastily when the Regular Secretary, Health and Family Welfare was on leave.”
340. In the case titled Goa Foundation v. Sesa Sterlite Ltd., (2018) 4 SCC 218 : 2018 SCC OnLine SC 98, while discussing the issue of undue haste, following observations were made by Hon'ble Supreme Court:
“110. Unfortunately, the undue haste in which the State acted gives the impression that it was willing to sacrifice the rule of law for the benefit of the mining leaseholders and the explanation of satisfying the needs of some sections of society for their livelihood (after keeping them in the lurch for more than two years) was a mere fig leaf. The real intention of the second renewal was to satisfy the avariciousness of the mining leaseholders who were motivated by profits to be made through the exploitation of natural resources. 111. The undue haste also needs to be looked at in the context of the statement made in the final paragraph of the Grant of Mining Leases Policy to the effect that this Policy is an in-principle decision and would be notified after it is vetted for legal requirements “from specific necessities as also from financial viewpoints”. In other words, the Grant of Mining Leases Policy as published on 4-11-2014 was not a final policy statement but only an intent that would take final shape after due vetting. The Grant of Mining Leases Policy was eventually published on 20-1-2015 but it was acted upon even before it was gazetted. 114. These facts must also be appreciated in the context that mining operations were suspended in Goa with effect from 10-9-2012 due to an order passed by the State of Goa. Therefore, mining operations having been suspended for more than two years, the State could have certainly waited for a few weeks more and taken an informed and reasoned
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 288 of 389 decision on granting a second renewal to mining leases — but waiting for a few weeks could have led to an uncomfortable situation that would have compelled the State of Goa to auction the mining leases, hence the haste. 121. The undue haste with which the State granted the second renewal of mining leases particularly after the amendments proposed to the MMDR Act were placed in the public domain by the Government of India (relating to the auction of mining leases) is a clear indication that the decision of the State was not based on relevant material and not necessarily triggered by the interests of mineral development. The very large number of renewals granted over a comparatively brief period is a clear indication that the State did not have “mineral development” in mind but had some other non-statutory interests while taking its decision to grant a second renewal to the mining leases. The haste with which the State took its decision also needs to be understood in the background of the fact that mining had been suspended by the State in September 2012 that is more than two years prior to the grant of second renewals. The urgency suddenly exhibited by the State therefore seems to be make- believe and motivated rather than genuine.”
341. Coming now to the case in hand, I may state that the overall facts and circumstances in which the issues relating to M/s CTL were dealt with by A-4 Dilip Ray while being part of a Care Taker Government and which ultimately led to allocation of the coal block in question in favour of the company, unerringly point towards his malafide intentions in taking various such decisions directly benefitting company M/s CTL. It is clear on the face of record that A-4 Dilip Ray abused his official position in taking various decisions and in doing so he not only acted beyond his capacity as Minister of a care-taker Government but also in contravention of the unambiguous provisions of CMN Act,1973. It is also clear that he so acted with a view to facilitate and obtain allocation of impugned non- nationalized Brahmadiha coal block in favour of company M/s CTL. As
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 289 of 389 already discussed, the very relaxation of policy without any logical or legal basis amounts to gross abuse of his powers by the Minister and as also earlier discussed while discussing the role played by the other two accused public servants, that the decision to allocate the impugned coal block in favour of M/s CTL was also without any public interest and was in fact against public interest.
342. Thus the offence of criminal misconduct i.e. under Section 13 (1) (d) PC Act, 1988 stands proved against A-4 Dilip Ray beyond shadows of all reasonable doubts.
(K) Charge for the offence under Section 13 (1) (c) P.C. Act and Section 409 IPC against A-4 Dilip Ray 343. A-4 Dilip Ray, the then Minister of State for Coal has also been charged and tried for the offences u/s 13 (1) (c) P.C. Act 1988 and Section 409 IPC.
344. It has been submitted on behalf of the prosecution that A-4 Dilip Ray while acting as Minister of State for Coal was holding independent charge of the Ministry of Coal and was thus exercising dominion over all the coal mines situated in the country. It was submitted that even prior to CMN Act, 1973, Government of India had come up with a Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973) as a prelude to nationalization of coal mines. It has been submitted that under CTM Act, 1973, the management of all coal mines in the country vested in the Central Government under Section 3 of the Act. It was further submitted that since at the time of nationalization of coal mines some coal mines including Brahmadiha coal mining area were left out of the purview of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 290 of 389 nationalisation, so all such left out areas continued to be governed by the provisions of CTM Act, 1973. It was thus submitted that A-4 Dilip Ray while holding the post of Minister of State for Coal was exercising dominion over Brahmadiha coal mining area on behalf of Central Government and he while acting as such public servant permitted misappropriation of said coal reserves by M/s CTL and he thus clearly committed the offence punishable u/s 13 (1) (c) P.C. Act and also under section 409 IPC.
345. On the other hand, Ld. Senior Advocate for A-4 Dilip Ray strongly opposed the said submissions stating that a Minister does not on becoming the Minister assumes the role of a trustee in the real sense and no trust comes into existence in respect of the Government property. Reliance in this regard has been placed on the observations of Hon'ble Supreme Court as made in the case Common Cause vs. Union of India, (1999) 6 SCC 667 and R. Sai Bharathi vs. J. Jayalalitha, (2004) 2 SCC 9. It was also submitted that even under CTM Act, 1973 Brahmadiha coal mining area is not mentioned in the schedule to the Act and thus management of the said mining area can not be presumed to have been vested in the Central Government. It was thus submitted that the most essential and important ingredient of the offence of Section 13 (1) (c) P.C. Act and Section 409 IPC does not stand satisfied and consequently the prosecution has clearly failed in proving its case against the accused. It was also submitted that not only A-4 Dilip Ray was not exercising any dominion over the said coal mining area but even otherwise the allocation of the said coal mining area in favour of M/s CTL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 291 of 389 took place pursuant to acts of officers of MOC and that of Screening Committee. It was thus submitted that prosecution has clearly failed in proving its case against A-4 Dilip Ray both for the offence u/s 13 (1) (c) P.C. Act and also for the offence under section 409 IPC.
My Discussion
346. Before proceeding to consider the submissions of both the sides, it would be appropriate to first have a brief glance over Section 405 IPC, which defines the offence of criminal breach of trust and Section 409 IPC which makes such an act if committed by a public servant punishable.
“405. Criminal breach of trust.—Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust or willfully suffers any other person so to do, commits “criminal breach of trust”. “409. Criminal breach of trust by public servant, or by banker, merchant or agent.—Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.”
347. It will be also worthwhile to refer to Section 13 (1) (c) P.C. Act, 1988 (As it stood prior to its substitution by 'The Prevention of Corruption (Amendment) Act,2018')
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 292 of 389 “13. Criminal misconduct by a public servant-- (1) A public servant is said to commit the offence of criminal misconduct- (a) ...... (b) ...... (c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or”
348. While defining the offence of criminal breach of trust committed by a public servant, Hon'ble Supreme Court in the case R. Venkatakrishnan Vs. Central Bureau of Investigation, Criminal Appeal Nos. 76, 90, 92, 101, 147 and 164 of 2004 (Decided on 07.08.2009) observed as under: (Para No. 167 to 178)
“CRIMINAL BREACH OF TRUST 167. The next charge we have to deal with is one arising under Section 409 IPC. For the offence of Criminal Breach of Trust by a public servant the punishment is provided under Section 409 IPC. We must also in this respect have regard to the provision of S 405 which defines Criminal Breach of Trust : 405. Criminal Breach of trust. Whoever , being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust or willfully suffers any other person so to do, commits `criminal breach of trust'. 168. Punishment for criminal breach of trust is provided in Section 406. Punishment for an aggravated form of criminal breach of trust is provided in Sections 407 to Section 409.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 293 of 389 169. The terms of the section are very wide. They apply to one who is in any manner entrusted with property or dominion over property. The section does not require that the trust should be in furtherance of any lawful object. It merely provides, inter alia, that if such a person dishonestly misappropriates or converts to his own use the property entrusted to him; he commits criminal breach of trust. This section requires 1) Entrusting any person with property or with dominion over property. 2) That person entrusted (a) dishonestly misappropriates or converts to his own use that property; or (b) dishonestly uses or disposes of that property or willfully suffers any other person so to do in violation - (i) of any direction of law prescribing the mode in which such trust is to be discharged, or (ii) of any legal contract made touching the discharge of such trust. 169. In Onkar Nath Mishra and Ors. vs. State (NCT of Delhi) and Anr., [(2008) 2 SCC 561] this court noted that in the commission of the offence of criminal breach of trust, two distinct parts are involved. The first consists of the creation of an obligation in relation to the property over which dominion or control is acquired by the accused. The second is a misappropriation or dealing with the property dishonestly and contrary to the terms of the obligation created. 170. In Jaikrishnadas Manohardas Desai and Anr. v. State of Bombay, [AIR 1960 SC 889], this Court observed : To establish a charge of criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he has dominion. The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure, in breach of an obligation, to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion. Conviction of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 294 of 389 which he has dominion, even when a duty to account is imposed upon him but where he is unable to account which is untrue, an inference of misappropriation with dishonest intent may readily be made." 171. However, Sections 407 to 409 make special provisions for various cases in which property is entrusted to the enumerated categories of persons who commit the offence. 172. Criminal breach of trust by a Public servant is dealt with under S. 409. "409. Criminal breach of trust by public servant, or by banker, merchant or agent.- Whoever, being in any manner entrusted with property or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property shall be punished with imprisonment of life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine." 173. This section classes together public servants, bankers, merchants, factors, brokers, attorneys and agents. The duties of such persons are of a highly confidential character, involving great powers of control, over the property entrusted to them and a breach of trust by such persons may often induce serious public and private calamity. High morality is expected of these persons. They are to discharge their duties honestly. 174. The following are the essential ingredients of the offence under this section : 1) The accused must be a public servant; 2) He must have been entrusted, in such capacity with the property ; 3) He must have committed breach of trust in respect of such property. 175. In Raghunath Anant Govilkar Vs. State of Maharashtra and Ors. 2008 (2) SCALE 303 the court noted that Section 406 which provides the punishment for criminal breach of trust simplicitor and 409 of IPC are cognate offences in which the common component is criminal breach of trust. When an offence punishable under Section 406 is committed by a public servant (or holding any one other of the positions listed in the Section) the offence would escalate to Section 409 of the Penal Code.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 295 of 389 176. In Superintendent and Remembrancer of Legal Affairs, W.B. v. S.K. Roy, (1974) 4 SCC 230, this Court held: "12. To constitute an offence under Section 409 IPC, it is not required that misappropriation must necessarily take place after the creation of a legally correct entrustment or dominion over property. The entrustment may arise in any manner whatsoever. That manner may or may not involve fraudulent conduct of the accused. Section 409 IPC, covers dishonest misappropriation in both types of cases; that is to say, those where the receipt of property is itself fraudulent or improper and those where the public servant misappropriates what may have been quite properly and innocently received. All that is required is what may be described as entrustment or acquisition of dominion over property in the capacity of a public servant who, as a result of it, becomes charged with a duty to act in a particular way, or, atleast honestly." 177. In Chelloor Mankkal Narayan Ittiravi Namhudiri v. State of Travancore, Cochin, AIR 1953 SC 478, this Court held: "... to constitute an offence of criminal breach of trust, it is essential that the prosecution must prove first of all that the accused was entrusted with some property or with any dominion or power over it. It has to be established further that in respect of the property so entrusted, there was dishonest misappropriation or dishonest conversion or dishonest use or disposal in violation of a direction of law or legal contract, by the accused himself or by someone else which he willingly suffered to do." 178. In Ram Narayan Popli (supra), this Court stated the law, thus :- "81. To constitute an offence of criminal breach of trust, there must be an entrustment, there must be misappropriation or conversion to one's own use, or use in violation of legal direction or of any legal contract: and the misappropriation or conversion or disposal must be with a dishonest intention. When a person allows others to misappropriate the money entrusted to him that amounts to a criminal appropriation of trust as defined by Section 405. The section relatable to property in a positive part and a
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 296 of 389 negative part. The positive part deals with criminal misappropriation or conversion of the property and the negative part consists of dishonestly using or disposing of the property in violation of any direction and of law or any contract touching the discharge of trust."
349. Even though the ingredients for the two offences are almost similar but it is well settled that if the acts alleged constitute an offence falling within two or more separate definitions of any law in force for the time being by which offences are defined or punished, the person accused of them may be charged with, and tried at one trial for each of such offences. [see : Section 220(3) Cr.PC)]. However, before the accused could be held liable for any of such offence, the ingredients thereof must stand duly proved beyond shadows of reasonable doubts. [see: State vs. Sanjay (2014) 9 SCC 772)].
350. Thus in the aforesaid background, it is required to be seen as to whether A-4 Dilip Ray in his capacity as Minister of State for Coal was holding or exercising any dominion over the impugned Brahmadiha coal mining area, or not. In other words whether A-4 Dilip Ray was exercising any control over the said Brahmadiha coal mining area as such public servant or not.
351. Answer to this important proposition is crucial for examining the case of prosecution for both the offences i.e. for the offence u/s 13 (1) (c) P.C. Act 1988 and also for the offence under section 409 IPC. However before proceeding to deal with this important issue it will be appropriate to refer to certain observations made by Hon'ble Supreme Court in the case Manohar Lal Sharma Vs. The Principal Secretary & Ors.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 297 of 389 (Supra), in relation to applicability of CTM Act, 1973:
“30. In short, the 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining prospecting licences or mining leases in respect of lands in which the minerals vest in the government, the rule- making power for regulating the grant of prospecting licences and mining leases, special powers of Central Government to undertake prospecting or mining operations in certain cases, and for development of minerals. 31. The Coal Mines (Taking Over of Management) Act, 15 of 1973, (for short, ‘Coal Mines Management Act’) was passed, “to provide for the taking over, in the public interest, of the management of coal mines, pending nationalisation of such mines, with a view to ensuring rational and coordinated development of coal production and for promoting optimum utilisation of the coal resources consistent with the growing requirements of the country, and for matters connected therewith or incidental thereto.” 32. The Coal Mines Management Act received the assent of the President on 31.03.1973 but it was made effective from 30.01.1973 except Section 8(2) which came into force at once. Section 3(1) provides that on and from the appointed day (that is, 31.01.1973) the management of all coal mines shall vest in the Central Government. By Section 3(2), the coal mines specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1). Under the proviso to Section 3(2), if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order make a declaration about the existence of such mine, upon which the management of such coal mine also vests in the Central Government and the provisions of the Act become applicable thereto. 33. Immediately after the Coal Mines Management Act, the Parliament enacted the CMN Act. CMN Act was passed, “to provide for the acquisition and transfer of the right, title and interest of the owners in respect of coal mines specified in the Schedule with a view to reorganising and reconstructing any such coal mines so as to ensure the rational, coordinated and scientific development and utilisation of coal resources consistent with the growing requirements
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 298 of 389 of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and for matters connected therewith or incidental thereto.”
352. At this stage, it will be also worthwhile to refer to Section 3 of Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973). the same read as under:
“3. Management of coal mines to vest in the Central Government on the appointed day.- (1) On and from the appointed day, the management of all coal mines shall vest in the Central Government. (2) Without prejudice to the generality of the provisions of sub- section (1) , the coal mines specified in the Schedule shall be deemed, for the purposes of this Act, to be the coal mines the management of which shall vest, under sub-section (1), in the Central Government: Provided that if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, whether after an investigation or in pursuance of an intimation given to it under sub-section (5) , or otherwise, the Central Government shall, by a notified order, make a declaration about the existence of such mine, and on and from the date of such declaration- (i) the management of such coal mine shall be deemed, for the purposes of this Act, to vest in the Central Government; and (ii) such coal mine shall be deemed to be included in the Schedule, and thereupon the provisions of this Act shall become applicable thereto subject to the modification that for the words "appointed day", wherever they occur, the words, brackets and figures "date of the declaration made by the Central Government under sub-section (2) of section 3" shall be substituted. (3) If any error or omission is noticed in the Schedule in relation to the name or address of the owner of a coal mine, the owner of such mine shall, within thirty days from the date on which this Act receives the assent of the President, being such error or omission to the notice of the Central Government.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 299 of 389 (4) If, after the appointed day, the Central Government is satisfied, whether from any information received by it or otherwise, that there has been any error, omission or misdescription in relation to the particulars of a coal mine included, or deemed to be included, in the Schedule or the name and address of the owner of any such coal mine, it may, by notified order, correct such error, omission or misdescription, and on the issue of such notified order the relevant entries in the Schedule shall stand corrected accordingly: Provide that no such correction in relation to the ownership of a coal mine shall be made where such ownership is in dispute. (5) Every person in charge, immediately before the date on which this Act receives the assent of the President, of the management of any coal mine, being a coal mine not included or deemed to be included on the said date in the Schedule, shall, within thirty days from the said date, intimate to the Central Government the name and location of such mine and the name and address of the owner thereof. (6) Where there is a dispute with regard to the declaration made by the Coal Board under the Coking Coal Mines (Emergency Provisions) Act, 1971, (64 of 1971) to the effect that a coal mine contains Coking coal, the management of such coal mine shall, notwithstanding anything contained in the said Act, vest in the Central Government under this Act and nothing contained in the first-mentioned Act shall apply, or be deemed ever to have applied, to the said coal mine.”
353. Further, while dealing with the definition of mine, Hon'ble Supreme Court in the case Bharat Coking Coal Ltd. v. Madanlal Agrawal, (1997) 1 SCC 177 made the following observations with respect to Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973):
“12. A much more extended meaning of ‘mine’ was given in the Coal Mines (Taking Over of Management) Act, 1973 by which the management of coal mines in India was vested in the Central Government on and from the appointed date, i.e., 30-1- 1973. The coal mines specified in the Schedule to the Act were deemed to be the mines of which the management vested in the Central Government by virtue of the provisions of Section 3(2). It was further provided that, if after the appointed day, the existence of any other coal mine came to the knowledge of the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 300 of 389 Central Government, whether after an investigation or in pursuance of an intimation given to it under sub-section (5) or otherwise, the Central Government was empowered to issue an order making a declaration about the existence of such mine on and from the date of such declaration. The management of such mines was also deemed to have vested in the Central Government and such coal mines were deemed to have been included in the Schedule. Sub-sections (3), (4), (5) and (6) of Section 3 provided as under: “3. (3) If any error or omission is noticed in the Schedule in relation to the name or address of the owner of a coal mine, the owner of such mine shall, within thirty days from the date on which this Act receives the assent of the President, bring such error or omission to the notice of the Central Government. (4) If, after the appointed day, the Central Government is satisfied, whether from any information received by it or otherwise, that there has been any error, omission or misdescription in relation in the particulars of a coal mine included, or deemed to be included, in the Schedule or the name and address of the owner of any such coal mine, it may by notified order, correct such error, omission or misdescription and on the issue of such notified order the relevant entries in the Schedule shall stand corrected accordingly: Provided that no such correction in relation to the ownership of a coal mine shall be made where such ownership is in dispute. (5) Every person in charge, immediately before the date on which this Act receives the assent of the President, of the management of any coal mine, being a coal mine not included or deemed to be included on the said date in the Schedule, shall, within thirty days from the said date, intimate to the Central Government the name and location of such mine and the name and address of the owner thereof. (6) Where there is a dispute with regard to the declaration made by the Coal Board under the Coking Coal Mines (Emergency Provisions) Act, 1971, to the effect that a coal mine contains coking coal, the management of such coal mine shall, notwithstanding anything contained in the said Act, vest in the Central Government under this Act and nothing contained in the first mentioned Act shall apply, or be deemed ever to have applied, to the said coal mine.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 301 of 389 13. For the purpose of this case, it is important to note that the Schedule appended to the Act was not treated as final and conclusive. Every person in charge of management of coal mine which was not included in the Schedule had a duty to intimate to the Central Government, the name and location of such mine and the name and address of the owner thereof. The words specifically not defined in Section 2 were assigned the meanings given to them in Section 3 of the Mines Act, 1952. ‘Mine’, however, was given a very wide meaning under Section 2(g).”
354. Thus a bare perusal of section 3 (1) of the Act shows that from the appointed date i.e. 31.01.1973, the management of all coal mines stood vested in the Central Government. Though clause (2) specifies names of certain coal mines as provided in the schedule to the Act, whose management stood vested under sub-section (1) in the Central Government but the said sub clause starts with the words “Without prejudice to the generality of the provisions of sub-section (1)”. Thus under clause (1) the management of all the coal mines, without any qualification or distinction, vested in the Central Government. Section 2(b) of the Act also defines a coal mine to be a mine in which there exists one or more seams of coal. Thus as already discussed, Brahmadiha coal mining area clearly fell under the definition of a mine under the Act, as there existed Karharbari seam in the said mining area. Accordingly, in view of the general provision of Section 3(1) of Coal Mines (Taking over of Management) Act, 1973 (CTM Act, 1973), the management of Brahmadiha coal mining area also stood vested in the Central Government.
However an important issue which requires consideration at this stage is that since the name of Brahmadiha coal mining area didn't
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 302 of 389 find mention in the schedule to CTM Act,1973, so can any presumption be drawn that management of the said coal mining area also vested in the Central Government. In this regard, Ld. Counsel for A-4 Dilip Ray has placed reliance upon the following observations of Hon'ble Supreme Court as were made in the case Bira Kishore Naik vs. Coal India Limited & Ors. (1986) 3 SCC 338 :
“8. Admittedly Natundihi Pahariabera Colliery was not specified either in the schedule to the Management Act or in the Schedule to the Nationalisation Act, the management of the colliery of Subodhchandra Mondal, Respondent 4 was neither taken over by the Central Government nor was it nationalised under the Nationalisation Act. In the absence of nationalisation of the said colliery, the petitioner and other employees, even if they had been working in the said colliery could not get benefit of Section 14 of the Nationalisation Act as Section 14 protects the interest of those workmen who may have been working in a coal mine, specified in the schedule to the Nationalisation Act. The employees of a private owner even though working in a coal mine are not entitled to be treated as employees of the Central Government unless the coal mine is nationalised and specified in the schedule to the Nationalisation Act. Since Natundihi Pahariabera Colliery was not specified in the schedule to the Nationalisation Act the workmen which may have been under the employment of Subodhchandra Mondal are not entitled to the benefit of Section 14 of the Nationalisation Act. Faced with this situation counsel for the petitioner urged that Natundihi Pahariabera Colliery was a coal mine as defined by Section 2(b) of the Management Act on the appointed day, but the same was not specified in the schedule to the Act due to some error. He further urged that since the Central Government had acquired knowledge about the existence of the mine it was under a legal duty to issue a notified order making declaration about the existence of such mine and to take over its management. Proviso to Section 3(2) of the Management Act confers power on the Central Government to make declaration about the exisence of a coal mine for the purpose of taking over of its management if the existence of such coal mine comes to its knowledge after the appointed day. This provision
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 303 of 389 presupposes the existence of the coal mine as defined by Section 2(b) of the Management Act on the appointed day namely, January 31, 1973. The legal duty cast on the Central Government to issue a notified order about a coal mine for the purpose of including the same to the schedule under the Management Act would arise if such coal mine as defined by the Management Act existed on the appointed day, no such legal obligation would be on the Central Government to issue any notified order making declaration as contemplated by Section 3(2) of the Management Act even though the Central Government may have acquired knowledge about the existence of coal mine. The prerequisite for the exercise of the power is the existence of a coal mine on the appointed day as defined by Section 2(b) of the Act. There is a serious dispute about the existence of Natundihi Pahariabera Colliery on the appointed day namely January 31, 1973. Since this question is a question of fact we would determine this question on appraisal of the material on record.”
355. Thus if in the light of aforesaid observations, the facts of the present case are seen then it is the undisputed case of all that Brahmadiha coal mining area was in existence since 1916 i.e. much before the appointed date i.e. January 31, 1973, as mentioned in CTM Act, 1973. Thus the moment knowledge about the existence of said coal mining area came to Central Government, a duty was casted upon the Government to notify it so as to include it in the schedule to the Act. Thus it is clear that as and when knowledge about the existence of said coal mining area came to Central Government then the said area came to be governed by the provisions of CTM Act,1973. Moreover, the argument that since no such notification was actually issued can also not hold ground as the accused public servants and especially A-4 Dilip Ray dealt with the said mining area as if he as Minister In-charge was exercising complete control/power over the said area on behalf of Central Government. (The provisions of Section 3 of CTM Act, 1973 are clearly
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 304 of 389 different from Section 3 of CMN Act, 1973 and thus under CMN Act any coal mine if is not already included in the schedule to the Act then even if it was existing from prior to the enactment of CMN Act, 1973, it doesn't get automatically included in the schedule).
356. However, the matter can also be viewed from another angle. A-4 Dilip Ray can never claim that he while acting on behalf of the Central Government was not exercising any dominion or control over the said Brahmadiha coal mining area, for otherwise, there was no reason for him to take any decision with respect to allocation of said area in favour of any company much less in favour of M/s CTL. Certainly, the accused can not be permitted to blow both hot and cold, for if there was no right vested in the Central Government over the said coal mining area then the question of considering its allocation under any provision of law by Ministry of Coal does not arise. Thus in my considered opinion A-4 Dilip Ray, Minister of State for Coal, holding independent charge was exercising a dominion or in other words control over the said Brahmadiha coal mining area on behalf of Central Government and it was for this reason only that the final allocation of the said coal mining area in favour of M/s CTL was made pursuant to his approval of the minutes of 14 th Screening Committee.
357. Moreover, even if it is presumed for the sake of arguments that no such dominion or control over the Brahmadiha coal mining area existed in the Central Government or vested in the Central Government then still the accused public servants undisputedly were acting under the bonafide belief that they exercised control over the said area and were thus
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 305 of 389 competent to make its allocation.
358. In this regard, it will be worthwhile to reiterate the observations made by Hon'ble Supreme Court in the case Superintendent and Remembrancer of Legal Affairs, W.B. Vs. S.K. Roy, (1974) 4 SCC 230. The Hon'ble Court held as under:
"12. To constitute an offence under Section 409 IPC, it is not required that misappropriation must necessarily take place after the creation of a legally correct entrustment or dominion over property. The entrustment may arise in any manner whatsoever. That manner may or may not involve fraudulent conduct of the accused. Section 409 IPC, covers dishonest misappropriation in both types of cases; that is to say, those where the receipt of property is itself fraudulent or improper and those where the public servant misappropriates what may have been quite properly and innocently received. All that is required is what may be described as entrustment or acquisition of dominion over property in the capacity of a public servant who, as a result of it, becomes charged with a duty to act in a particular way, or, atleast honestly."
359. Thus viewing from any angle, the inescapable conclusion which emerges is that A-4 Dilip Ray proceeded to deal with the issue of allocation of Brahmadiha coal mining area on all occasions i.e. when he directed re-examination of the application of company M/s CTL on 12.05.1999 and subsequently when he approved the relaxation of the guidelines as was proposed by 14th Screening committee so as to facilitate allocation of the impugned coal block in favour of M/s CTL, under the belief that he while acting as Minister of State for Coal holding independent Charge was having dominion or control over the said Brahmadiha coal mining area on behalf of Central Government. He thus can not now turn around and say that he was not having any dominion or
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 306 of 389 control over the said coal block while working as Minister of State for coal (Independent Charge).
360. Having thus established that A-4 Dilip Ray was having dominion over the Brahmadiha coal mining area, the other ingredients of the offence u/s 13 (1) (c) P.C. Act, 1988 or Section 409 IPC does not require any elaborate discussion.
361. While discussing the role of A-4 Dilip Ray for the offence u/s 13 (1) (d) P. C. Act, it has already been concluded that he acted with a dishonest and malafide intention and that too in clear violation of the unambiguous provisions of law.
362. However, as regard the submissions of Ld. Counsel for A-4 Dilip Ray while placing reliance upon the case Common Cause Vs. Union of India (Supra) and R. Sai Bharathi vs. J. Jayalalitha (Supra) that a Minister does not on becoming a Minister assume the role of a trustee in the real sense or that no trust comes into existence with respect to Government properties, I may state that in the present matter also it is not being claimed that A-4 Dilip Ray was holding any trust in the impugned Brahmadiha coal mining area on behalf of the Central Government. In this regard, it will be important to understand that the phrase “Central Government” is in fact a term given to a group of persons led by the Prime Minister to execute the functions of the Government. Since all the persons forming part of the Government can not be expected to undertake work of all the Ministries together, so a system of administration has been created and whereby under Transaction of Business Rules, 1961 and Allocation of Business Rules,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 307 of 389 1961, the work relating to specific Ministries are assigned to different Ministers. It was in this allocation of business of the Government that A-4 Dilip Ray was appointed as Minister of State for Coal (independent charge) by the President of India. It was thus his duty to ensure that the powers and functions of Central Government with respect to all the matters falling under the jurisdiction of MOC are duly exercised and carried out as per law. Thus the dominion or the control over the impugned abandoned coal mining area which vested in the Central Government was to be exercised by the concerned Minister in-charge. If the answer to the aforesaid proposition is taken as “No” then no person can ever be held responsible for exercising the powers which vested in the Central Government. Thus the control over the impugned coal mining area is to be considered with the person who is responsible for exercising the powers of the Central Government in connection with the said area or issues connected therewith.
363. It also goes without saying that the exercise of powers by the Minister on behalf of the Central Government was to be in accordance with the direction of law and at the same time it was his duty to ensure that the officers working under him in the Ministry acts as per law. It is no doubt true that the officers in their own individual capacity were also duty bound to act as per law, but the Minister Incharge and who at the same time is now claiming to have gone through the entire matter at length when the files came to him, was certainly duty bound to ensure that the Ministry officers acts as per law and that the matters are dealt with in accordance with law.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 308 of 389 364. Thus, from the detailed discussion as held above, it is clear that A-4 Dilip Ray dishonestly facilitated allocation of the said abandoned non-nationalised coal mining area in favour of company M/s CTL and that too in violation of the direction of law. He thus dishonestly allowed misappropriation of the said coal mining area by company M/s CTL.
365. From my aforesaid discussion, it is thus crystal clear that the prosecution has been successful in proving all the necessary ingredients of the offence u/s 409 IPC and also that of the offence u/s 13 (1) (c) P.C. Act, 1988 against A-4 Dilip Ray, the then Minister of State for Coal holding independent charge beyond shadows of all reasonable doubts.
Charge for the offence u/s 13 (1) (c) P.C. Act 1988 and for the offence u/s 409 IPC thus stands proved against A-4 Dilip Ray.
(L) Charge for the offence of cheating i.e. u/s 420 IPC against A-1 M/s CTL and A-2 M.K. Agarwalla.
366. It has been argued by the prosecution that both A-1 M/s CTL and A-2 M.K. Agarwalla had malafide intention since beginning to cheat MOC, Government of India. It has been submitted that the company never had any intention to establish any end use project where the washed coal could be used and for the said reason only it continued to change its stand in its various communications made to MOC. It was also submitted that A-2 M.K. Agarwalla with-held both from MOC and the Screening Committee, the information about family arrangement having been already entered into by him on 26.05.99, whereby the coal block immediately after allocation was to be transferred in favour of P.K.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 309 of 389 Agarwalla and his family members. All the communications sent to MOC even after formally entering into the said family arrangement on 26.05.99 were silent in this regard. No such information was even disclosed to the screening committee on 18/19.06.1999 when the matter of M/s CTL was taken up.
367. It has been submitted that as evident from the terms of said family arrangement, the parties knew it well even before formally entering into the said family arrangement on 26.05.99 that the impugned coal block immediately after allotment will be transferred in favour of P.K. Agarwalla and his family members and thus from beginning itself both company A-1 M/s CTL and A-2 M.K. Agarwalla had no intention to establish any end use project and their only intention was to somehow procure the allotment of impugned coal block from MOC by deceiving it on the basis of false representations and by concealing material facts and to thereafter sell the coal.
The charge for the offence of cheating was thus stated to have been clearly proved against both the accused persons.
368. On the other hand, Ld. Counsels for both A-1 M/s CTL and A-2 M.K. Agarwalla have vehemently opposed the aforesaid submissions of Ld. Sr. P.P. It was submitted that for the offence of cheating the prosecution was required to prove existence of malafide intention from the beginning itself but it has clearly failed in its said endeavour. It was also submitted that irrespective of family arrangement having been arrived at inter-se family members of A-2 M.K. Agarwalla, the de-merger of the company took place pursuant to orders of Hon'ble High Court of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 310 of 389 Calcutta only and even the subsequent transfer of lease took place in favour of M/s CML with the permission of Central/State Government. It was also submitted that the allocatee company was always willing to establish the end use project and, in that direction, had even obtained a number of permissions/clearances from various concerned authorities.
The prosecution was thus stated to have miserably failed in its endeavor to prove the charge for the offence of cheating against both the accused persons.
My Discussion
369. Before entering into a discussion on the present issue, it will be worthwhile to first have a glance over the definition of the offence of cheating as given in Section 415 IPC. "415. Cheating.—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. Explanation. —A dishonest concealment of facts is a deception within the meaning of this section."
370. At this stage, the observations of Hon’ble Supreme Court while dealing with the offence of cheating in the case Iridium India Telecom Ltd vs Motorola Incorporated and others (2011) 1 SCC 74, will also be worth referring to. In the said case a company with a view to fund a project being developed by it sought investment from large and successful companies worldwide on the basis of a prospectus, allegedly
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 311 of 389 containing certain false claims/information about the project. Hon’ble Supreme Court made the following observations as regard the offence of cheating i.e. u/s 415 IPC: “68. A bare perusal of the aforesaid section would show that it can be conveniently divided into two parts. The first part makes it necessary that the deception by the accused of the person deceived, must be fraudulent or dishonest. Such deception must induce the person deceived to either: (a) deliver property to any person; or (b) consent that any person shall retain any property. The second part also requires that the accused must by deception intentionally induce the person deceived either to do or omit to do anything which he would not do or omit, if he was not so deceived. Furthermore, such act or omission must cause or must be likely to cause damage or harm to that person in body, mind, reputation or property. Thus, it is evident that deception is a necessary ingredient for the offences of cheating under both parts of this section. The complainant, therefore, necessarily needs to prove that the inducement had been caused by the deception exercised by the accused. Such deception must necessarily produce the inducement to part with or deliver property, which the complainant would not have parted with or delivered, but for the inducement resulting from deception. The Explanation to the section would clearly indicate that there must be no dishonest concealment of facts. In other words, non- disclosure of relevant information would also be treated as a misrepresentation of facts leading to deception.”
371. The Hon'ble Court thereafter while examining the facts of the said case further observed in para 72 to 74 as under: “72. According to the High Court, Respondent 1 did not keep the investors in dark about the Iridium system and gave them all necessary information in respect of various aspects of the system. In coming to the aforesaid conclusion, the High Court observed that "a bare perusal of the complaint shows that there is no reference to the Stock Purchase Agreements of 1993 and 1994. In fact, these two important documents contain acknowledgments of the investors about their capability of evaluating the merits and risks of the purchase of the shares and their relying upon their own advisors." The
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 312 of 389 High Court, therefore, negated the submission that there has not been a complete and candid disclosure of the entire material which has resulted in the deception / inducement of the appellant to make huge investment in the Iridium. This conclusion reached by the High Court did not take notice of the Explanation to Section 415. The aforesaid Explanation gives a statutory recognition to the legal principles established through various judicial pronouncements that misleading statements which withhold the vital facts for intentionally inducing a person to do or to omit to do something would amount to deception. Further, in case it is found that misleading statement has wrongfully caused damage to the person deceived it would amount to cheating. “73. It would at this stage be appropriate to notice the observations made by the House of Lords in Central Railway Co. of Venezuela v. Kisch (1867 LR 2 HL 99) which would be of some relevance to the issue under consideration. In this case, the House of Lords examined the duty of those who issued a prospectus inviting investments from the general public and held that they were required to make a true and full disclosure of all the relevant facts. The House of Lords quoted with approval the observations made in New Brunswick and Canada Railway Co. v. Muggeridge [(1860) 1 Dr & Sm 363 at pp. 381-82 : 62 ER 418] wherein it has been observed as follows: (ER p. 425) “… those who issue a prospectus holding out to the public the great advantages which will accrue to persons who will take shares in a proposed undertaking, and inviting them to take shares on the faith of the representations therein contained, are bound to state everything with strict and scrupulous accuracy, and not only to abstain from stating as facts that which is not so, but to omit no one fact within their knowledge the existence of which might in any degree affect the nature, or extent, or quality of the privileges and advantages which the prospectus holds out as inducements to take shares;”
74.The House of Lords went on to observe that it is no answer to a person who has been deceived that he would have known the truth by proper inquiry. It would be apposite to reproduce here the observations made by the House of Lords on this aspect of the matter: (Kisch case[1867 LR 2 HL
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 313 of 389 99] , LR pp. 120-21) “But it appears to me that when once it is established that there has been any fraudulent misrepresentation or wilful concealment by which a person has been induced to enter into a contract, it is no answer to his claim to be relieved from it to tell him that he might have known the truth by proper inquiry. He has a right to retort upon his objector, ‘You, at least, who have stated what is untrue, or have concealed the truth, for the purpose of drawing me into a contract, cannot accuse me of want of caution because I relied implicitly upon your fairness and honesty.’ I quite agree with the opinion of Lord Lyndhurst, in Small v. Attwood [ You 407 : 159 ER 1051] , that: ‘where representations are made with respect to the nature and character of property which is to become the subject of purchase, affecting the value of that property, and those representations afterwards turn out to be incorrect and false, to the knowledge of the party making them, a foundation is laid for maintaining an action in a court of common law to recover damages for the deceit so practiced; and in a Court of equity a foundation is laid for setting aside the contract which was founded upon that basis.’ And in Dobell v. Stevens [3 B&C 623 : 107 ER 864] , to which he refers as an authority in support of the proposition, which was an action for deceit in falsely representing the amount of the business done in a public house, the purchaser was held to be entitled to recover damages, although the books were in the house, and he might have had access to them if he thought proper. Upon the whole case I think the decree of Lords Justices ought to be affirmed, and the appeal dismissed with costs.”
372. In the case Swami Dhirendra Brahamchari Vs. Shailendra Bhushan, 1995 Cr. L.J. 1810 (Delhi), Hon'ble Delhi High Court while dealing with the word deceiving as used in Section 415 IPC, observed that generally speaking “deceiving” is to lead into error by causing a person to believe what is false or to disbelieve what is true and such
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 314 of 389 deception may be by words or by conduct. A fraudulent representation can be made directly or indirectly.
373. Hon'ble Allahabad High Court in the case P.M. Natrajan Vs. Krishna Chandra Gupta, 1975 Cr. L.J. 899 (All.) explained the word “deceive” as indicating inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine.
374. Hon'ble Supreme Court in the case Ellerman & Bucknall Steamship Co. Ltd. vs Sha Misrimal Bherajee, AIR 1966 SC 1892, explained “deceit” as a false statement of a fact made by a person knowingly or recklessly with the intent that it shall be acted upon by another who does act upon it and thereby suffers damage.
375. Thus in all such cases of deception the object of the deceiver is fraudulent. He intends to acquire or retain wrongful possession of that to which some other person has a better claim. Thus, where a person parted away with a property while acting on such a representation of an accused believing in the truth thereof, it clearly amounts to deceiving the person. However, it is also important that the person practicing the deceit knows or has reason to believe the said representation to be false. Though in the true nature of things, it is not always possible to prove dishonest intention by direct evidence. It can be however proved by number of circumstances only from which a reasonable inference can be drawn.
376. More over the explanation to Section 415 IPC i.e. cheating states that a dishonest concealment of facts is a deception within the meaning
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 315 of 389 of this section.
377. It is in the light of aforesaid well-settled position of law that the acts of the accused persons needs to be examined. It needs to be seen as to whether company M/s CTL and A-2 M K Agarwalla either misrepresented any facts or withheld any information from Ministry of Coal, Government of India, which would have otherwise prevented the Ministry of Coal from allocating the impugned coal block in favour of the company. It is also certainly true that such misrepresentation or withholding of information by the company must have been with a malafide intention. Ld. Counsel for the accused persons are also right in stating that in order to bring home the charge of cheating against the accused persons, the malafide intention must be shown to be existing from the beginning and it cannot be a mere breach of promise.
378. The first allegation levelled by the prosecution is that the company in fact never intended to establish any end use project, where the extracted coal was to be used. It has been further alleged that the factum of entering into a family arrangement on 26/05/99 whereby the coal block in question after allocation was to be transferred in favour of P K Agarwalla, was not disclosed either to MOC in any communication made prior to allocation or to the Screening Committee either at the time of presentation or even subsequently when the lease deed was being executed. It has been also alleged that the company M/s CTL misrepresented in its communication dated 21.04.99 issued under the signatures of A-2 M K Agarwalla, that CCL does not wish to work in this area.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 316 of 389 379. However, in order to examine these allegations various communications sent by the company at different point of time needs to be seen and discussed in two separate compartments, though not mutually exclusive. Initially, an attempt shall be made to examine as to whether various such communications sent by the company indicate existence of any malafide intention or not, on its part. Subsequently, it shall be examined as to whether any crucial or important information which could have been of material bearing on the allocation of impugned coal block in favour of the company was withheld or was misrepresented. The other ingredients of the offence of cheating as to whether Ministry of Coal, Government of India finally stood induced on the basis of said deception in parting away with the property or not, shall be examined thereafter.
380. Before adverting further, I would however like to mention that the allegations, against the present two private accused qua the offence of cheating or their having deceived or induced MOC in allocating the impugned coal block needs to be seen and appreciated in the light of the fact that the accused public servants involved in the process had grossly abused their official positions, as has been discussed and concluded above, in facilitating allocation of the impugned coal block in favour of Company M/s CTL. Thus, it needs to be seen as to whether the offence of conspiracy was the root and the specific instances or acts on the part of company and its directors/officers whose falsity could have been easily found by the accused public servants were the offshoots or the means adopted and the final allocation of the coal block was the fruit
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 317 of 389 thereof. I have already discussed at length while discussing the role played by the accused public servants that even with a reasonable degree of prudence and caution or even with the same degree of prudence and caution, as was undertaken and shown by the accused public servants with respect to the applications of other applicant companies, the falsity in the claims or representations made on behalf of company M/s CTL could have been easily found.
381. Coming now to deal with the allegation of prosecution that the malafide intention of the accused persons is evident from beginning as the accused company had been changing its stand with respect to use of coal in its various communications, it will be worthwhile to point out that in its application for mining lease dated 16/18.04.1996 Exhibit P-7 (D 22) submitted to Government of Bihar it was stated that the mineral which shall be extracted from the mine will be washed and will be used captively in power generation from rejects. As against the column whether the mineral will be exported to foreign countries, it was stated that the same will be done, if permitted. It was also stated that depending on demand in international market the use and stage of preparation will be decided. As regard the use of coal in the country it was stated that the same will be used for power generation, low ash coke making and metallurgical coke. Subsequently, in the Scheme of Mining annexed with its application dated 09.05.1998 (D-36) submitted to Chairman Screening Committee MOC, it was stated by the company that the coal extracted will be washed and the rejects will be used for power generation for captive and non-captive use. Nothing was, however,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 318 of 389 stated in the application as regard the use of washed coal. As earlier pointed out A-6 N.N. Gautam, Project Advisor, Ministry of coal in his note dated 28.08.1998, pointed out that the company has not mentioned about the use of washed coal for captive consumption. However, the company M/s CTL immediately thereafter submitted a representation dated 08/09/1998 to A-6 N. N. Gautam stating that “After mining the coal and washing the same whatever middling will be available will be utilised for power generation. The washed coal that will be available will be used for production of metallurgical coke in our own coke oven unit.” It was also stated that, “our sister concern producing coke namely Foundry Iron products Ltd, which has been established after obtaining industrial license is unable to meet the challenge of Chinese coke. As such, better quality of coal obtained from the mine after washing will be blended with the coke of BCCL to produce a better variety of marketable coke”. It was further stated that, “the coal obtained after washing will be utilised for manufacturing of coke directly by ourselves or it will be got converted in other coke oven plants of our company”.
382. Subsequently, vide another communication dated 12/04/1999 (D-36), the company M/s CTL communicated to Secretary, Ministry of Coal regarding use of coal to be extracted from the mine as under:
“The coal produced from the proposed mining is exclusively for captive use. First of all, it will be washed. Middling will be utilised for generation of power. The washed coal will be utilised for manufacturing of coke and the coke will be utilised for our iron foundry situated in the industrial area Bokaro.” 383. Subsequently, vide another communication dated 21/04/1999
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 319 of 389 (D-36), the company informed A-6 N.N. Gautam about the use of coal as under:
384. “we propose to wash the coal by setting up of coal washery near the mining project and subsequently locating 10 MW power plant in phases based on middling/rejects. Until bulk samples of coal are taken, it will not be possible to estimate the percentage and quality of middling and rejects. We propose to set up the power plant of 10 MW capacity in 2 phases near the coal washery. We are already in possession of 3 numbers steam power generation sets of 5 MW each”. It was further stated that we have engineering workshop at Dhanbad and our steel foundry having induction furnace and arc furnace, which are lying idle at present due to erratic power supply. 385. In yet another communication dated 18/05/1999 (D-36) addressed by the company to A-6 N. N. Gautam, it was stated that we have a running washery of our sister concern, but is out of use at present due to lower demand of Met coke on account of dumping of coke in India. It was stated that the washery will be shifted near to the mining site and after exhaustion of coal this can be again shifted to a new source of coal supply, according to the prevalent circumstances at that point of time.
As regard use of washed coal, it was stated in the said communication that, “as stated earlier it is proposed to be used for manufacturing of met coke for our unit in Bokaro industrial area. This coke will be manufactured at a unit for which industrial license was granted by Coal Ministry. The production capacity of the said coke oven unit is lying idle in view of the uneconomical market condition already stated above.”
386. In yet another communication dated 02/06/1999 (D-36) addressed
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 320 of 389 to Additional Secretary, MOC by company M/s CTL, it was stated in the subject of the letter itself that the allocation is being sought for captive use of washing and for generation of electricity in Gridih. The letter was however silent about the use of washed coal.
387. The purpose of mentioning the use of coal as referred to in its various communications by the company is two-fold. Firstly, except for stating that the coal after washing will be used to manufacture metallurgical coke, nothing further has been explained or stated about the use of metallurgical coke thereafter i.e. its use in one or the other recognised end use under CMN Act,1973. However, as is evident from the various subsequent communications made by M/s CTL and M/s CML i.e. after allocation of coal block, neither any washery was ever established nor any steps were taken to establish the power plant, much less to even manufacture metallurgical coke. As has also been earlier mentioned, even in the minutes of 14th screening committee while recommending allocation of Brahmadiha Coal Block in favour of company M/s CTL, no end use was even mentioned by the screening committee. These facts when seen in the overall facts and circumstances, clearly show that whenever any objection used to be raised by any officer in Ministry of Coal or by officers of CIL or its subsidiary companies about the claims made by the company M/s CTL, there used to be a communication from the company so as to meet that objection, at least on paper. Secondly, neither in the communication dated 02/06/1999, nor at the time of making presentation before 14th screening committee on 18/19.06.99, any reference was made to the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 321 of 389 family arrangement dated 26/05/1999 (D-139) entered into by the family members of A-2 M. K. Agarwalla and P. K. Agarwalla and their two other brothers. It was clearly mentioned in the deed of family arrangement that soon after allocation of impugned coal block in favour of company M/s CTL, the same shall be transferred in favour of P. K. Agarwalla and his family. Clause 5 of the said family arrangement dated 26/05/1999 read as under:
“5. The First Party has applied for grant of lease of a Coal Mine in Giridi, Bihar in the name of Castron Technologies Ltd and in case the said lease is granted then in such event the Third Party hereto agree that the Directors of Castron Technologies Ltd (Castron) shall assign and transfer the right title and interest of Castron in the said lease-hold property in favour of the First Party or his nominees. 5.1. All costs and expenses so far incurred or is likely to be incurred in the matter of obtaining such lease from the date of application till the grant of lease and thereafter have been and shall be paid by the First Party and the Third Party shall not be liable on account of such costs and expenses. 5.2. The First Party will be entitled to follow up the application for grant of lease on behalf of Castron Technologies Ltd. 5.3. Until the transfer as contemplated in Clause 5 hereinabove is made, the Third Party agrees to have granted from Castron an irrevocable registered Power of Attorney in favour of the First Party or his nominee to do all acts, deeds and things as may be required in connection with the said Coal Mine in Giridi. 5.4 It is clarified that upon grant of the lease of the said Coal Mine, the First Party shall have absolute right, title and interest in the said Coal Mine and be entitled to deal with the same in any manner as he may deem fit and proper and the other parties hereto shall not have any claim or demand in the said Coal Mine in any manner whatsoever.”
388. The first party to the said memorandum of family arrangement was
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 322 of 389 Mr P. K. Agarwalla who signed it as Karta of HUF comprising of himself and his two sons. The third party to the said memorandum of family arrangement was A-2 M K Agarwalla who signed it as Karta of HUF comprising of himself and his son. The said family arrangement stands proved as Exhibit P-79 (Colly) (D-139).
389. Thus, it is clear from a bare perusal of clause 5 of said memorandum of family arrangement that both A-1 company M/s CTL and A-2 M K Agarwalla knew very well even prior to allocation of the impugned coal block by MOC, that it is not going to establish any end use project for use of coal to be extracted therefrom and that the coal block soon after its allocation will be transferred to his brother P. K. Agarwalla (Accused since deceased). In fact, a perusal of clause 5 also shows that the understanding between the parties regarding transfer of coal block in favour of P K Agarwalla was there even before the company M/s CTL applied for allocation of impugned coal block. In this regard Clause 5.1 of the family arrangement will be worth referring to again:
“5.1. All costs and expenses so far incurred or is likely to be incurred in the matter of obtaining such lease from the date of application till the grant of lease and thereafter have been and shall be paid by the First Party and the Third Party shall not be liable on account of such costs and expenses.”
390. Thus it is crystal clear that all the costs and expenses in the matter were being incurred by P K Agarwalla and his family since beginning. These facts also explains as to why the application for seeking allocation of impugned coal block in favour of M/s CTL was being strongly pursued by P K Agarwalla at all stages. At this stage, it would be also pertinent to
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 323 of 389 mention that P K Agarwalla was not only a sitting Member of parliament but was also a member of the Consultative Committee of Power and Steel, in Parliament. This also explains the special interest being shown in the application of M/s CTL by all concern as has been elaborately discussed earlier.
At this stage, it will be however also worthwhile to mention that Interestingly during the entire process of allocation of coal block P K Agarwalla was neither a director nor an officer or authorised representative of the applicant company M/s CTL .
391. Thus it is clear from the aforesaid facts mentioned in the family arrangement that the understanding between the parties was already arrived at and by way of the said memorandum of family arrangement only the terms and conditions were subsequently reduced into writing. A perusal of the memorandum of family arrangement also shows that the parties had already arrived at an understanding and were already managing their businesses independently but by way of the said memorandum of family arrangement the said understanding was being only formally reduced into writing. However as various parties were still holding equity in each other's companies so by way of the family arrangement it was decided to formally release all such equity holding in each other's companies. Moreover, as coal block application was submitted in the name of M/s CTL so it was being pursued in the name of A-2 M. K. Agarwalla. A question may however arise that if the business of various members of Agarwalla family were already separated then why coal block application was submitted on behalf of M/s CTL i.e. in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 324 of 389 name of a company controlled by A-2 M. K. Agarwalla and his family. The answer to the said question is very simple and apparent from the face of record itself. Admittedly A-3 CML i.e. a company belonging to P K Agarwalla and his family and in whose name the coal block was finally transferred was an old company. Its original name was “International Alliance Private limited” having been registered on 24.06.96. Its Memorandum of Association and Articles of Association (D-135) shows that mining or related activities were never its objectives and thus application in the name of said company could not have been submitted to MOC. However subsequently not only the name of the company was changed to M/s Castron Mining limited (CML) on 09.06.2000 but its objectives were also amended and mining thus became its one of the objective (See:Memorandum of Association, available in D-4). Thus subsequently the coal block came to be transferred in the name of M/s CML and prior to change of objectives, the application for seeking allocation of coal block was submitted on behalf of M/s CTL i.e. a company having mining and other related activities as its objectives, even through the said company was controlled by A-2 M. K. Agarwalla and his family.
392. The aforesaid circumstances explains as to why the matter was being so strongly pursued by P. K. Agarwalla, since it was a clear understanding between him and A-2 M. K. Agarwalla that the coal block soon after allocation will be transferred to his share. It was in these circumstances that he was leaving no stone un-turned by exercising his influence over all concern, whosoever dealt with the matter. This
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 325 of 389 conclusion is not being drawn on the basis of any conjectures or surmises, but is clearly evident from the manner in which the matter was dealt with in Ministry of coal and also by CIL and its subsidiary companies. As was earlier mentioned, there had been a repeated change in stand of all these authorities and finally on the basis of representation submitted by P.K. Agarwalla to A-4 Dilip Ray, Minister of State for Coal, a complete U-turn took place qua the fate of application of M/s CTL in MOC. At this stage, it would be also worthwhile to mention that though transfer of coal block was sought to be carried out by demerger of the mining division of M/s CTL and even permission in this regard was sought from Government of Bihar and subsequently from Central Government, but at no point of time, it was disclosed that the said demerger is being carried out on the basis of impugned 'Family Arrangement ' or understanding already arrived at. It was rather stated that since the company is involved in a number of activities, so in order to better manage the coal mining activities the said division is sought to be separated in a new company. Further, a perusal of said family arrangement also shows that division of various companies inter-se family members of the Agarwalla family was not simply to manage the affairs of the companies better, but was to ensure that the assets of the family are divided among all the four brothers and their family members. It thus cannot be stated that the said division of assets was without any consideration i.e. of having exclusive control of the various assets of the family to the exclusion of others. Moreover, it was a clear understanding at that time itself that M. K. Agarwalla will cease to have any concern with the said coal block and similarly applicant company M/s CTL will
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 326 of 389 also have no concern with the new company, which will be holding all the rights, title and interest in the coal block. Thus, there was to be an outright transfer of coal mining block from M/s CTL to a company controlled by P. K. Agarwalla and his family and finally the coal block actually came to be transferred in favour of M/s CML i.e. a company contolled by P K Agarwalla and his family. Thus both A-1 M/s CTL and A-2 M. K. Agarwalla knew very well from even prior to allocation of impugned coal block by the Screening Committee, MOC or in fact even from the time of applying for its allocation, that the coal block is not going to be developed by them and that it will be transferred to P. K. Agarwalla and his family.
393. Similarly, any reliance on the orders of Hon’ble High Court of Calcutta approving the scheme of demerger also cannot be of any help to the parties in the present matter, as a bare perusal of the orders of Hon’ble High Court of Calcutta clearly show that in the said proceedings, also nothing was mentioned about the family arrangement and the Hon’ble High Court was thus merely concerned with the merger/demerger of the companies which were involved in the said Company Petition. Moreover, this court is not required to go into the details of the said orders of Hon’ble High Court of Calcutta or the legal effect of said proceedings, as all the aforesaid discussion is being made only with a view to ascertain as to whether there existed any malafide intention on the part of company A-1 M/s CTL and A-2 M K Agarwalla since beginning in somehow procuring the allotment of impugned coal block from Ministry of coal, or not. Had it been disclosed before the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 327 of 389 Screening Committee or to MOC that soon after allocation of impugned mining block the same will be transferred to some other company or to PK Agarwalla and his family and that it will no longer be with the applicant company M/s CTL, then one cannot see any reason as to why the Ministry of coal would have proceeded to allot the impugned mining block in favour of applicant company M/s CTL. Thus, all the communications made by company M/s CTL regarding establishment of any washery or power plant or use of washed coal for manufacturing of metallurgical coke ceases to be of any consequence. The entire claim regarding use of facilities of its sister concerns also looses all significance. Whose sister concerns, M/s CTL or M/s CML. Furthermore, the real intention of transferee company M/s CML also stands evident from the subsequent communication made by its director Anup Agarwalla s/o P. K. Aggarwala, who in his reply dated15/24.05.2012 (available from page 150-158 in D-50) to the show cause notice issued by Ministry of Coal, seeking to cancel the allocation of impugned coal block, stated that the company as per the allocation made was not obliged to establish any end use project. Even the conduct in the year 2012 shows that no end use project was ever established and in fact, no steps towards establishing the end use project were at all taken. Thus, even if, any permission or clearances were sought or obtained by the company for opening of coal mine then also the same are of no consequence in showing the readiness on the part of the company to fulfil its commitment towards establishing the end use projects. It was clearly stated in the mining lease as well as in a number of communications subsequently sent by Ministry of coal that the coal mine should be so developed along
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 328 of 389 with the establishment of end use project that the coal produced is captively used.
394. The subsequent conduct of the allocatee company in not taking any steps to establish the end use project can always be referred to ascertain the malafide intention on the part of the company. Thus, from the overall facts and circumstances as discussed above, the malafide intention on the part of A-1 company M/s CTL and A-2 M. K. Agarwalla since beginning is writ large on the face of record. As earlier also mentioned and discussed at length, since the accused public servants were in active connivance or in other words, were hands in glove with the private parties involved, so no efforts were at all made at any point of time to even ascertain the techno-economic viability of the applicant company M/s CTL to establish the proposed end use project. Further,, even though metallurgical coke was not recognised as an end use under CMN Act, 1973 for allocation of captive coal blocks, to private sector companies, but still 14th Screening Committee proceeded ahead to allocate the impugned coal block in favour of applicant company M/s CTL. I have also already discussed that the said allocation was in itself illegal, being in clear violation of the provisions of CMN Act,1973, but interestingly, even in the recommendation made by the screening committee, no reference was made to the proposed end use project for which the coal block was being allotted.
395. From my aforesaid discussion, it is thus crystal clear that all out efforts were being made by the private parties involved in connivance with the accused public servants that on the basis of one or the other
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 329 of 389 false representation or by withholding true facts, Ministry of coal be induced to allocate the impugned coal block in favour of company M/s CTL. It is these overall facts and circumstances which rather also goes to corroborate the existence of a criminal conspiracy in between the accused persons. Thus, conspiracy was the root and the aforesaid specific instances were the offsoot or the means and the final allocation of the impugned coal block was the fruit thereof.
396. At this stage, it will be worthwhile to mention that though vide note dated 16/04/1999 of A-6 N N Gautam, the application of company M/s CTL was proposed to be rejected for allocation of any coal block and thus even if it is presumed for the sake of arguments, that no malafide intention existed on the part of accused public servants from the beginning to join the criminal conspiracy hatched by A-1 M/s CTL, A-2 M K Agarwalla and P K Agarwalla (accused since deceased), then also the actual turn of events took place from 12.05.99 when the representation of company M/s CTL was directed to be re-examined by Minister of State for Coal and from when the actual change in the views of officers of the Ministry of coal i.e. accused public servants took place.
397. It was during the said period that the Agarwalla family had also formally reduced into writing the said family arrangement and the first representation made by A-2 M. K. Agarwalla subsequent thereto was to Additional Secretary, Coal i.e. A-5 P. K. Banerjee on 02/06/1999, where there was no reference to the said family arrangement and there was also no reference to the proposed end use project where the washed coal will be captively used. Again, when the representatives of company
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 330 of 389 M/s CTL appeared before the 14th Screening Committee on 18/19-06- 1999, then also they withheld the information about the said family arragement and thereby not disclosing that the coal block soon after allotment will be handed over to P. K. Agarwalla and his family and that company M/s CTL will not be developing it or establishing any end use project.
398. At this stage, I may also deal with yet another submission of Ld. Defence counsel that the company M/s CTL had in fact applied to Government of Bihar seeking allocation of impugned coal block under the provisions of MMDR Act, 1957 and that they had submitted to MOC their mining plan for approval. It has been submitted that MOC instead of according approval to the mining plan, called upon them vide letter dated 06.05.98 that the company must first apply to MOC seeking allocation of impugned coal block. It has been thus submitted that pursuant to directions of MOC only that the company applied to the Screening Committee seeking allocation of impugned coal block.
399. Before proceeding to consider the said submission, it will be worthwhile to have a glance over the said letter dated 06.05.98, Ex. PW 32/DX-6, issued by A. Banerji, Director: Letter dated 06.05.98 (available at page 15 in D-37)
“13016/14/96-CA No. GOVERNMENT OF INDIA MINISTRY OF COAL 6.5.1998 Shastri Bhavan, New Delhi, the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 331 of 389 To M/s Castron Technologies Lid. 8, Waterloo Street, Calcutta 700 089
Sub: Mining Plan for Brahmdiha Opencast Project in Giridih Coalfield prepared by Shri M L Dugar.
Sir, With reference to your letter No. CTL/194/97-98/347 dated 24.11.97 regarding the subject mentioned above, your attention is invited to this Ministry’s letter of even number dated 21.6.96 and 2.1.96 wherein it was clarified that the application for the recognition of Shri M L Dugar to prepare the mining plan for the above mentioned coal project can be considered only after your company receives a letter from the Ministry conveying offer of Bramhadiha coal block to your company for captive consumption. Since the above mentioned block is yet to be offered to your company for captive consumption, it is not possible for this Ministry to consider the application of Shri Dugar for recognition as a qualified person to prepare the mining plan and also to consider the mining plan, for approval under the relevant provisions of the Mineral Concession Rules, 1960 and the MMRD Act, 1957. 2. In view of above, two copies of mining plan sent by your company are returned herewith. Yours faithfully, Sd/- (A Banerji) Director Encl: As above”
400. A bare perusal of the said letter dated 06.05.98 shows that Sh. A. Banerji, Director, MOC merely stated in the letter that as the block in question is yet to be offered to the company for captive consumption so it is not possible for the Ministry to consider the application for the recognition of Sh. M.L. Dugar to prepare a mining plan for the coal project in question or to even consider the mining plan. Thus, it is clear that in the said letter it was never stated that the company must apply to
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 332 of 389 the Screening Committee for allocation of impugned coal block. Certainly as per the practice prevalent in MOC, the allocation of coal blocks were being done by MOC only, even though the said practice was not in accordance with the procedure laid down in MMDR Act, 1957. In fact CMN Act, 1973 did not provide for any procedure for allocation of coal blocks. In this regard, the following observations of Hon'ble Supreme Court made in order dated 25.08.2014 passed in the case Manohar Lal Sharma v. Principal Secy. (supra), would be worth referring to:
66. In Tara Prasad Singh [Tara Prasad Singh v. Union of India, (1980) 4 SCC 179] , a seven-Judge Constitution Bench while dealing with the purposiveness of the CMN Act, as amended in 1976, vis-à-vis the 1957 Act, stated that nothing in this Act (CMN) could be construed as a derogation of the principle enunciated in Section 18 of the 1957 Act. The Court said: (SCC pp. 196-97, para 36) “36. …Therefore, even in regard to matters falling under the Nationalisation Amendment Act which terminates existing leases and makes it lawful for the Central Government to obtain fresh leases, the obligation of Section 18 of the 1957 Act will continue to apply in its full rigour. As contended by the learned Solicitor General, Section 18 contains a statutory behest and projects a purposive legislative policy. The later Acts on the subject of regulation of mines and mineral development are linked up with the policy enunciated in Section 18.” (emphasis supplied) 67.The observations made by this Court in Tara Prasad Singh [Tara Prasad Singh v.Union of India, (1980) 4 SCC 179] about interplay between the CMN Act and the 1957 Act with reference to the policy enunciated in Section 18, in our view, apply equally to the entire legal regime articulated in the 1957 Act. We are of the opinion that nothing should be read in the two Acts, namely, the CMN Act and the 1957 Act, which results in destruction of the policy, purpose and scheme of the two Acts. It is not right to suggest that by virtue of declaration under Section 1-A of the CMN Act, the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 333 of 389 power of the State under Section 10(3) of the 1957 Act has become unavailable. The submission of Mr Harish N. Salve, learned Senior Counsel for the interveners that additional declaration under Section 1-A of the CMN Act seeks to do away with any vestige of power in the State in the matter of selection of beneficiaries of the mineral is not meritorious. Had that been so, Rule 35 of the 1960 Rules would not have been amended to provide that where two or more persons have applied for reconnaissance permit or prospecting licence or a mining lease in respect of the same land, the State Government shall, inter alia, consider the end use of the mineral by the applicant. The declaration under Section 1-A has not denuded the States of any power in relation to grant of mining leases and determining of those permitted to carry on coal mining operation. 68. The allocation of coal block is not simply identification of the coal block or the allocatee as contended by the learned Attorney General but it is in fact selection of beneficiary. As a matter of fact, Mr Harish N. Salve, learned Senior Counsel for the interveners, has taken a definite position that allocation letter may not by itself confer purported rights in the minerals but such allocation has legal consequences and confers private rights to the allocatees for obtaining the coal mining leases for their end-use plants. 69. In view of the foregoing discussion, we hold, as it must be, that the exercise undertaken by the Central Government in allocating the coal blocks or, in other words, the selection of beneficiaries, is not traceable either to the 1957 Act or the CMN Act. No such legislative policy (allocation of coal blocks by the Central Government) is discernible from these two enactments. Insofar as Article 73 of the Constitution is concerned, there is no doubt that the executive power of the Union extends to the matters with respect to which Parliament has power to make laws and the executive instructions can fill up the gaps not covered by statutory provisions but it is equally well settled that the executive instructions cannot be in derogation of the statutory provisions. The practice and procedure for allocation of coal blocks by the Central Government through administrative route is clearly inconsistent with the law already enacted or the rules framed.”
401. Thus considering either way, it can not be even presumed for the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 334 of 389 sake of arguments that A. Banerji, Director, MOC ever asked the company to apply for allocation of the coal block to the Screening Committee. At the most the company could have applied to MOC and then MOC would have proceeded to consider the application as per their understanding but at the cost of repetition I may state that as the coal mine in question was not a nationalised coal mine so the question of applying to the Screening Committee for its allocation or it considering its allotment does not arise. These circumstances also takes care of the arguments put-forth by Ld. Counsels for the accused persons that A. Banerji, Director, MOC ought to have been also arrayed as an accused. The said arguments in the overall facts and circumstances as mentioned above is completely devoid of all merits.
402. Before adverting further, it will be also pertinent to mention that in its communication dated 21.04.99 submitted to A-6 N.N. Gautam, Ex. PW 14/E (available from page 49-51 in D-36) and whose copy was also subsequently submitted to other officers on behalf of company M/s CTL, it was stated that CCL has already indicated that they have no intention to work in the area. As already discussed in the earlier part of the judgment, the said claim being made on behalf of CCL was not correct and in fact not only the company but A-6 N.N. Gautam had also wrongly stated in his noting that CCL had no intention to work in the said area at any point of time.
403. Thus from the overall facts and circumstances, as discussed above, it becomes crystal clear that both A-1 M/s CTL and A-2 M.K. Agarwalla not only misrepresented various facts before MOC and
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 335 of 389 Screening Committee but also with-held material facts i.e. regarding the family arrangement entered into between A-2 M.K. Agarwalla and his brother P.K. Agarwalla (accused since deceased) and that disclosure of true facts would have materially affected the decision of MOC in allocating the impugned coal block in favour of applicant company M/s CTL. These facts clearly show that such misrepresentation and concealment of material facts were fraudulently undertaken with a dishonest intention so as to deceive Screening Committee and thereby inducing MOC, Government of India to allocate impugned coal mining area in favour of M/s CTL.
404. At this stage, it will be also worthwhile to refer to certain observations of Hon'ble Supreme Court in the case Kanumukkala Krishnamurthy @ Kaza Krishnhamurthy Vs. State of Andhara Pradesh, AIR 1965 SC 333, with respect to the issue as to whether misrepresentation made before Screening Committee, MOC amounts to cheating Government of India also or not. The issue involved in the said case and the present case in hand are almost similar.
405. In the said case accused Kanumukkala Krishnamurthy had applied for appointment of Assistant Surgeon in Madras Medical Services in pursuant to notification published by Madras Public Service Commission inviting applications. However, later on, it was found that the accused had misrepresented himself by impersonating as some other person and also misrepresented about his parentage and place of birth. It was also found that accused was not even holding minimum educational qualification i.e. degree of MBBS and thus he misled the Public Service
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 336 of 389 Commission Authorities to believe the said misrepresentation to be true. Upon final conviction of the accused for the offence U/s 419 IPC i.e. cheating by impersonation by Hon'ble High Court of Madras, the accused challenged his conviction before Hon'ble Supreme Court by way of Special Leave Petition. The issue as to whether by way of said case of misrepresentation/impersonation, the accused deceived Government of Madras or not came up for consideration. While discussing various aspects of the offence of cheating and thereby that of cheating by impersonation, the observations made by Hon'ble Supreme Court will be worth referring to: “11. The only other question to determine now is whether the appellant deceived the Government of Madras and dishonestly induced it to deliver something in the form of salary to the appellant. It is urged that the appointment to the post lay with the Government and not with the Service Commission and that 'the Government would not have appointed him to the post in the Medical Service if it had not believed that the appellant possessed the necessary qualifications which, in his case, would be a degree of M.B., B.S., and that such a belief was entertained by the Government on account of the deception practised by the appellant in misrepresenting in his application that he held such a degree. On the other hand, it is contended for the appellant that the delivery of 'property' is to be by the person deceived, in view of the language of Section 415 I.P.C., and that the person deceived, if any, was the Service Commission and not the Government, the application containing the misrepresentation having been made to the Service Commission and not to the Government. 12. We accept the contention for the respondent. The appointments to the Medical Services are made by Government. The Service Commission simply selected the candidates and recommends their names to Government for appointment. This is clear from letter Exhibit P. 47 from the Secretary to the Service Commission to the Surgeon- General with the Government of Madras. The letter refers to the enclosing of a list containing the names and other
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 337 of 389 particulars of the candidates who were successful at the examination, their names being arranged in order of merit. It refers to the relaxing of a certain rule in view of the paucity of candidates and states that they may be appointed, if necessary, pending receipt of the certificate of physical fitness and a further communication from the commission. 13. This is also clear from the provisions of the Government of India Act, 1935. Section 241 provided that appointments in connection with the affairs of a Province will be made by the Governor of the Province. Sub-Section (1) of Section 266 makes it a duty of the Provincial Public Service Commission to conduct examinations for appointments to the Services of a Province. Clause (a) of sub-s. (3) provides that the Provincial Public Service Commission shall be consulted on all matters relating to methods of recruitment to civil services and for civil posts and cl. (b) provides that it shall be consulted on the principles to be followed in making appointments to civil services and posts and on the suitability of candidates for such appointments. The Public Service Commission is constituted in pursuance of the provisions of Section 264. It is thus a statutory body and independent of the Government. This aspect of a Public Service Commission was emphasized in State of U.P. v. Manbodhan Lal Srivastava when considering the corresponding provisions of Article 320 of the Constitution. This Court said: "Once, relevant regulations have been made, they are meant to be followed in letter and in spirit and it goes without saying that consultation with the Commission on all disciplinary matters affecting a public servant has been specifically provided for in order, first, to give an assurance to the Services that a wholly independent body, not directly concerned with the making of orders adversely affecting public servants, has considered the action proposed to be taken against a particular public servant, with an open mind; and, secondly, to afford the Government unbiassed advice and opinion on matters vitally affecting the morale of public services". It is in view of these provisions that the Public Service Commission invites applications for appointment to the various posts under the Government and subsequently makes a selection out of the candidates for appointment to those posts. The selection may be after holding a written examination or after interviewing candidates or after doing
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 338 of 389 both. Names of the candidates selected are arranged in order of merit and forwarded to the Government. The Government is expected, as a rule, to make appointments to the posts from out of the list, in the same order. It has, however, discretion not to appoint any part of the persons so selected and securing a place in the order of merit which would have ordinarily led to his appointment. 14. Any representation made in an application for appointments is really a representation made to the Government, the appointing authority, and not only to the Public Service Commission to which the application is presented and which has to deal with that application in the first instance. up to the stage ,of selection. The object of the applicant was to secure an appointment and not merely to deceive the Public Service Commission and sit at the examination or to appear at the interview. The deception was practised for that purpose and therefore there seems to be no good reason for holding that the deception came to an end once the Service Commission was deceived and had taken action on it as a result of the deception. A false representation in an application to the Service Commission continues and persists to be so till the application is considered by the final authority responsible for making the appointments and must therefore be deemed to be made to that final authority as well. In the instant case, when the recommendation of the Service Commission was sent to the Government, the qualifications of the recommended candidates, including the fact that the appellant had passed the M.B.,B.S. examination were mentioned. The Government therefore believed that the appellant possessed the degree of M.B.B.S., that as the Service Commission had scrutinized the application in that regard and had satisfied itself that the appellant possessed that degree. The consequence of that is that the Government were led to believe that fact, which thus became a false representation. We are therefore of opinion that the appellant's mis- representation to the Service Commission continued and persisted till the final stage of the Government passing an order of appointment and that therefore the Government itself was deceived by the misrepresentation he had made in his application presented to the Service Commission.” (Emphasis supplied by me)
406. Coming now to the case in hand, it is thus crystal clear that the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 339 of 389 accused persons fraudulently and with dishonest intention deceived MOC, Government of India, on the basis of impugned misrepresentation and withholding of material facts and which acts clearly amounts to deception. It is also clear that the accused persons thereby intentionally induced MOC, Government of India to allocate impugned Brahmadiha coal block in favour of A-1 M/s CTL, and which it would not have otherwise done, had no such deception taken place.
407. Another important issue raised by Ld. Counsels for accused persons was that mere issuance of allotment letter can not amount to parting away with the property as mentioned in Section 420 IPC. In this regard, the observations of Hon'ble Supreme Court of India as made in its orders dated 25.08.14, passed in the Manohar Lal case (Supra) in para 65, 73, 74,75 and 76, will be worth referring to:
"65. There seems to be no doubt to us that allocation letter is not merely an identification exercise as is sought to be made out by the learned Attorney General. From the position explained by the concerned State Governments, it is clear that the allocation letter by the Central Government creates and confers a very valuable right upon the allottee. We are unable to accept the submission of the learned Attorney General that allocation letter is not bankable. As a matter of fact, the allocation letter by the Central Government leaves practically or apparently nothing for the State Government to decide save and except to carry out the formality of processing the application and for execution of the lease deed with the beneficiary selected by the Central Government. Though, the legal regime under the 1957 Act imposes responsibility and statutory obligation upon the State Government to recommend or not to recommend to the Central Government grant of prospecting licence or mining lease for the coal mines, but once the letter allocating a coal block is issued by the Central Government, the statutory role of the State Government is reduced to completion of processual formalities only. As noticed earlier, the declaration
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 340 of 389 under Section 1A of the CMN Act does not take away the power of the State under Section 10(3) of the 1957 Act. It is so because the declaration under Section 1A of the CMN Act is in addition to the declaration made under Section 2 of the 1957 Act and not in its derogation. 1957 Act continues to apply with the same rigour in the matter of grant of prospecting licence or mining lease of coal mines but the eligibility of persons who can carry out coal mining operations is restricted to the persons specified in Section 3(3)(a) of the CMN Act...... 73. Assuming that the Central Government has competence to make allocation of coal blocks, the next question is, whether such allocation confers any valuable right amounting to grant of largesse? 74. The Learned Attorney General argues that allocation of coal blocks does not amount to grant of largesse since it is only the first statutory step. According to him, the question whether the allocation amounts to grant of largesse must be appreciated not from the perspective whether allocation confers any rights upon the allocatee but whether allocation amounts to conferment of largesse upon the allocatee. An allocatee, learned Attorney General submits, does not get right to win or mine the coal on allocation and, therefore, an allocation letter does not result in windfall gain for the allocatee. He submits that diverse steps, as provided in Rules 22A, 22B, and 22(5) of the 1960 Rules and the other statutory requirements, have to be followed and ultimately the grant of prospecting licence in relation to unexplored coal blocks or grant of mining lease with regard to explored blocks entitles the allocatee/licensee/lessee to win or mine the coal. 75. We are unable to accept the submission of the learned Attorney General that allocation of coal block does not amount to grant of largesse. It is true that allocation letter by itself does not authorize the allottee to win or mine the coal but nevertheless the allocation letter does confer a very important right upon the allottee to apply for grant of prospecting licence or mining lease. As a matter of fact, it is admitted by the interveners that allocation letter issued by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 341 of 389 the Central Government provides rights to the allottees for obtaining the coal mines leases for their end-use plants. The banks, financial institutions, land acquisition authorities, revenue authorities and various other entities and so also the State Governments, who ultimately grant prospecting licence or mining lease, as the case may be, act on the basis of the letter of allocation issued by the Central Government. As noticed earlier, the allocation of coal block by the Central Government results in the selection of beneficiary which entitles the beneficiary to get the prospecting licence and/or mining lease from the State Government. Obviously, allocation of a coal block amounts to grant of largesse. 76. The Learned Attorney General accepted the position that in the absence of allocation letter, even the eligible person under Section 3(3) of the CMN Act cannot apply to the State Government for grant of prospecting licence or mining lease. The right to obtain prospecting licence or mining lease of the coal mine admittedly is dependant upon the allocation letter. The allocation letter, therefore, confers a valuable right in favour of the allottee. Obviously, therefore, such allocation has to meet the twin constitutional tests, one, the distribution of natural resources that vest in the State is to sub-serve the common good and, two, the allocation is not violative of Article 14."
408. Thus in view of the aforesaid observations of Hon'ble Supreme Court, the allocation letter issued by MOC in favour of accused company M/s CTL followed by execution of mining lease clearly amounts to delivering of property i.e. a valuable and natural resource of the country. The letter of allocation was thus a valuable security in itself much less a document which was capable of being converted into a valuable security and the same was indeed followed by execution of a mining lease. 409. In view of my aforesaid discussion, I am thus of the considered opinion that prosecution has been successful in proving its case against both A-1 company M/s CTL and A-2 M.K. Agarwalla for the offence of cheating beyond shadows of all
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 342 of 389 reasonable doubts. Charge for the offence u/s 420 IPC accordingly stands proved.
(M) Charge for the offence of criminal conspiracy i.e. 120-B IPC against A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam. 410. Since the five accused persons namely A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam have also been charged for the offence of criminal conspiracy i.e. for the offence u/s 120-B IPC so before adverting further, it would be appropriate to refer to the observations of Hon'ble Supreme Court on the issue of criminal conspiracy as were made in the case State through Superintendent of Police, CBI/SIT Vs. Nalini & Ors.(1999) 5 SCC 253. Hon'ble Supreme Court summarized the broad principles governing the law of conspiracy as under:
“591. Some of the broad principles governing the law of conspiracy may be summarized though, as the name implies, a summary cannot be exhaustive of the principles. Under Section 120A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is legal act by illegal means overt act is necessary. Offence of criminal conspiracy is exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence. The question for consideration in a case is did all the accused had the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accused merely entertained a wish, howsoever, horrendous it may be, that offence be
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 343 of 389 committed. Acts subsequent to the achieving of object of conspiracy may tend to prove that a particular accused was party to the conspiracy. Once the object of conspiracy has been achieved, any subsequent act, which may be unlawful, would not make the accused a part of the conspiracy like giving shelter to an absconder. Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused. Conspirators may, for example, be enrolled in a chain - A enrolling B, B enrolling C, and so on; and all will be members of a single conspiracy if they so intend and agree, even though each member knows only the person who enrolled him and the person whom he enrolls. There may be a kind of umbrella-spoke enrollment, where a single person at the center doing the enrolling and all the other members being unknown to each other, though they know that there are to be other members. These are theories and in practice it may be difficult to tell whether the conspiracy in a particular case falls into which category. It may, however, even overlap. But then there has to be present mutual interest. Persons may be members of single conspiracy even though each is ignorant of the identity of many others who may have diverse role to play. It is not a part of the crime of conspiracy that all the conspirators need to agree to play the same or an active role. When two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one who joins in the agreement. There has thus to be two conspirators and there may be more than that. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy. It is not necessary that all conspirators should agree to the common purpose at the same time. They may join with other conspirators at any time before the consummation of the intended objective, and all are equally responsible. What part
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 344 of 389 each conspirator is to play may not be known to everyone or the fact as to when a conspirator joined the conspiracy and when he left. A charge of conspiracy may prejudice the accused because it is forced them into a joint trial and the court may consider the entire mass of evidence against every accused. Prosecution has to produce evidence not only to show that each of the accused has knowledge of object of conspiracy but also of the agreement. In the charge of conspiracy court has to guard itself against the danger of unfairness to the accused. Introduction of evidence against some may result in the conviction of all, which is to be avoided. By means of evidence in conspiracy, which is otherwise inadmissible in the trial of any other substantive offence prosecution tries to implicate the accused not only in the conspiracy itself but also in the substantive crime of the alleged conspirators. There is always difficulty in tracing the precise contribution of each member of the conspiracy but then there has to be cogent and convincing evidence against each one of the accused charged with the offence of conspiracy. As observed by Judge Learned Hand that "this distinction is important today when many prosecutors seek to sweep within the dragnet of conspiracy all those who have been associated in any degree whatever with the main offenders". As stated above it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement, which is the graham of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts, and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy. It has been said that a criminal conspiracy is a partnership in crime, and that there is in each conspiracy a joint or mutual agency for the prosecution of a common plan. Thus, if two or more persons enter into a conspiracy, any act done by any of them pursuant to the agreement is in contemplation of law, the act of each of them and they are jointly responsible therefore. This means that everything said, written or done
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 345 of 389 by any of the conspirators in execution or furtherance of the common purpose is deemed to have been said, done, or written by each of them. And this joint responsibility extends not only to what is done by any of the conspirators pursuant to the original agreement but also to collateral acts incident to and growing out of the original purpose. A conspirator is not responsible, however, for acts done by a co-conspirator after termination of the conspiracy. The joinder of a conspiracy by a new member does not create a new conspiracy nor does it change the status of the other conspirators, and the mere fact that conspirators individually or in groups perform different tasks to a common end does not split up a conspiracy into several different conspiracies. A man may join a conspiracy by word or by deed. However, criminal responsibility for a conspiracy requires more than a merely passive attitude towards an existing conspiracy. One who commits an overt act with knowledge of the conspiracy is guilty. And one who tacitly consents to the object of a conspiracy and goes along with other conspirators, actually standing by while the others put the conspiracy into effect, is guilty though he intends to take no active part in the crime.”
411. In the case, E.G. Barsay Vs. State of Bombay, AIR, 1961 SC 1762, the view whereof was affirmed and applied in several later decisions, such as Ajay Aggarwal Vs Union of India 1993 (3) SCC 609; Yashpal Mittal Vs. State of Punjab 1977 (4) SCC 540; State of Maharashtra Vs. Som Nath Thapa 1996 (4) SCC 659; Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC 596, Hon'ble Supreme Court also observed as under:
“―The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done. So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. Under Section 43 of the Indian Penal Code, an act would be illegal if it is an offence or if it is prohibited by law. Under the first charge the accused are charged with having conspired to do
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 346 of 389 three categories of illegal acts, and the mere fact that all of them could not be convicted separately in respect of each of the offences has no relevancy in considering the question whether the offence of conspiracy has been committed. They are all guilty of the offence of conspiracy to do illegal acts, though for individual offences all of them may not be liable.”
412. Thus while direct evidence qua the offence of criminal conspiracy is hard to come up but the same is to be ascertained from the overall facts and circumstances of a given case.
413. From the detailed discussion of the various facts and circumstances as undertaken above not only the existence of malafide intention on the part of all the three accused public servants as well as on the part of A-1 company M/s CTL, A-2 M.K. Agarwalla in procuring allocation of Brahmadiha Coal Block in favour of company A-1 M/s CTL has been well established but it is also apparent that they all were acting in cahoot.
414. It stands well proved that A-1 company M/s CTL, A-2 M.K. Agarwalla alongwith P.K. Agarwalla (accused since deceased) were all working in pursuance of a well planned strategy so as to obtain allocation of impugned non-nationalized Brahmadiha coal mine in favour of company A-1 M/s CTL by adopting various illegal means. It is also apparent that despite stiff resistance and opposition from officers of CIL, CCL, CMPDIL and other officers/officials of MOC including that of CPAM Section, A-5 P.K. Banerjee and A-6 N.N. Gautam left no stone un-turned in ensuring allocation of impugned non-nationalized coal block in favour of M/s CTL. A-4 Dilip Ray not only facilitated the said process by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 347 of 389 directing re-examination of application of M/s CTL and pursuant to which direction A-5 P.K. Banerjee and A-6 N.N. Gautam interse decided to get the matter listed before 14th Screening Committee of which they themselves were the Chairman and Member-Convenor respectively. In the 14th Screening Committee meeting also they ensured that recommendation in favour of M/s CTL is made for allocation of the said coal block, even in violation of the unambiguous provisions of CMN Act, 1973. A-4 Dilip Ray finally sealed the allocation of said coal block in favour of company M/s CTL by permitting relaxation of the guidelines by abusing his official position and even acting beyond the powers conferred on him by law, being part of a Care-Taker Government. The existence of a criminal conspiracy in the entire process with P.K. Agarwalla (accused since deceased) being the central axis is thus writ large on the face of record. P. K. Agarwalla by virtue of his position of being a Member of Parliament and a Member of Consultative Committee on Power and Steel exercised his influence over all concern. A-1 company M/s CTL and A-2 M. K. Agarwalla while acting on behalf of the applicant company M/s CTL also actively participated in the entire criminal conspiracy and withheld crucial and material information both from MOC and screening Committee.
415. Thus in the light of the overall facts and circumstances, as discussed above, the charge of criminal conspiracy i.e. for the offence u/s 120-B IPC clearly stands proved against all the five accused persons i.e. A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 348 of 389 Banerjee and A-6 Nitya Nand Gautam, beyond shadows of all reasonable doubts.
416. Accordingly charge for the offence u/s 120-B IPC, 120-B/409/420 IPC and Section 13 (1) (c) and 13 (1) (d) P.C. Act, 1988 stands proved against all the five accused persons i.e. A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam.
(N) Charge for the offence of theft i.e. Section 379/34 IPC against A-1 company M/s. Castron Technologies Ltd. (M/s CTL), A-2 Mahendra Kumar Agarwalla and A-3 company M/s Castron Mining Ltd. (M/s CML) 417. Under this head of charge the allegation levelled against the three accused persons i.e. A-1 company M/s. Castron Technologies Ltd. (M/s CTL) A-2 Mahendra Kumar Agarwalla and A-3 company M/s Castron Mining Ltd. (M/s CML) by prosecution is that after allocation of Brahmadiha coal mining area and after execution of mining lease the allocatee company was required to obtain mine opening permission from Director General of Mines Safety (DGMS) but A-1 company M/s. Castron Technologies Ltd. (M/s CTL) A-2 Mahendra Kumar Agarwalla and A-3 company M/s Castron Mining Ltd. (M/s CML) in furtherance of their common intention started extracting coal from the impugned mining area even prior to grant of said mine opening permission in their name.
418. In response thereto, it has been however submitted by Ld. Counsels for the accused persons that as per Rule 28 of Mineral Concession Rules, 1960 if mining operations are not commenced within
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 349 of 389 a period of one year from execution of mining lease, the State Government has the authority to declare the mining lease as lapsed. It has been further submitted that as the impugned mining area was an old abandoned mine having been abandoned in the year 1916 so before undertaking the actual mining operation a lot of over head was required to be removed and thus before undertaking the actual mining operation or opening of the mine a lot of steps were required to be undertaken and it was in that process only that some coal came out and the same was accordingly kept at the pit-head of the mine. It has been further submitted that as per the prosecution case itself the entire coal as was extracted remained within the lease hold area and even dead rent as stipulated under MMDR Act,1957 was being paid by the company. It was thus submitted that there has been no dishonest intention on the part of accused persons in extracting any amount of coal. Arguments were also addressed regarding monthly filing of returns in the name of A-1 M/s CTL and A-3 M/s CML with the office of Director General of Mines Safety (DGMS) and Director of Mines Safety regarding raising of coal and stock thereof and it has been argued that all such issues primarily cropped up due to inter-se family dispute between A-2 M.K. Agarwalla and his family on one side and that of his elder brother P.K. Agarwalla (accused since deceased) and his family on the other side. It was submitted that the said disputes could be finally resolved in favour of M/s CML only in the year 2009-2010, even though pursuant to orders of Hon,ble High Court of Calcutta passed in the company petition in between M/s CTL and M/s CML, the scheme of arrangement ought to have come into effect from 31.10.2001. It has been thus submitted that there has been no violation
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 350 of 389 of the provisions of MMDR Act, 1957 and even as regard the offence of theft, it has been alleged that no dishonest intention on the part of accused persons in extracting the coal has been proved on record by the prosecution. Lastly it has been also alleged that since the offence of theft i.e. Section 379 IPC is punishable with a maximum period of imprisonment of 3 years only so the present prosecution for the said offence against the three accused persons was also barred by limitation, as cognizance of the said offence has been taken much after the lapse of statutory period of 3 years as provided in section 468 Cr.PC.. It was submitted that there has been no condonation of delay sought by the prosecution at the time of cognizance and consequently no orders in this regard were even passed by the Court.
My Discussion
419. At the outset, I may state that in light of the detailed discussion earlier held with respect to the offence of criminal conspiracy and that of the offence of cheating, while discussing the role played by A-1 M/s CTL, and A-2 Mahendra Kumar Agarwalla, it is clear that dishonest intention on their part as shared with P.K. Agarwalla (accused since deceased) existed in the entire process right from beginning i.e. when application for seeking allocation of impugned coal mining area was submitted to MOC. Thus, not much argument is required to conclude that there existed dishonest intention on the part of the private parties involved since beginning so as to procure allocation of impugned coal bock and thereafter to sell the coal in the market so as to earn undue profit.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 351 of 389 420. No doubt, A-3 M/s CML came into the picture later on i.e. when in terms of the family arrangement dated 26.05.99 the coal block in question soon after allocation was to be transferred in favour of P.K. Agarwalla (accused since deceased) and his family and was thus finally got transferred in favour of M/s CML by them i.e. a company controlled by P.K. Agarwalla (accused since deceased) and his family. I have already discussed and demonstrated that it was already agreed in between the family of two brothers i.e. M.K. Agarwalla and P.K. Agarwalla that the allocation of coal block is though being sought in the name of M/s CTL i.e. a company controlled by A-2 M.K. Agarwalla and his family but soon after its allocation, it will be transferred in favour of P.K. Agarwalla and his family. However since coal mining operation could have been undertaken only by a company and not by an individual so it was essential that the coal block allotted in favour of M/s CTL is transferred in favour of some company only. The said company was thus chosen to be M/s CML by P.K. Agarwalla and his family. I have already discussed that though M/s CML was an old company having been registered in the year 1996 in the name of M/s International Alliance Pvt. Ltd., but no application in the name of said company for seeking allocation of coal block could have been initially moved as at that time, mining or other related activities did not form part of objectives of the said company. It was only in the year 2000 when the objectives of the company were changed to also include mining and other related activities and the name of the company was also changed to M/s CML, that the coal block in question came to be transferred in favour of M/s CML in terms of the family arrangement already arrived at. It is also an
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 352 of 389 undisputed case that M/s CML is a company controlled by P.K. Agarwalla and his family. I have also already discussed that the proceedings which took place before Hon'ble High Court of Calcutta in the Company Petition are of no relevance in the present matter especially since the said proceedings were primarily concerned with the demerger and amalgamation of one operation of the company with another company and there was absolutely no reference to the impugned family arrangement in the said proceedings. However, what is being looked into in the present proceedings is as to whether there existed any malafide intention on the part of accused persons in undertaking various such acts, as are under discussion in the present matter, or not.
421. Be that as it may, in the present discussion for the offence of theft this court is primarily concerned with the issue as to whether the ingredients of the offence of theft i.e. u/s 378 IPC and as punishable u/s 379 IPC stands proved, or not.
The ingredients of the offence of theft are as under: (i) Dishonest intention to take property. (ii) The property must be movable. (iii) It should be taken out of the possession of another person. (iv) It should be taken without the consent of that person and (v) There must be some removal of the property in order to accomplish the taking of it.
422. Coming now to the submissions raised by Ld. Counsels for the accused persons, I may state that from the case law relied upon by Ld. Counsel for A-3 M/s CML i.e. State Vs. Sanjay, 2014 (9) SCC, it is clear that if the ingredients of the offence of theft are made out from the facts
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 353 of 389 of the case, then irrespective of any prosecution under MMDR Act, 1957, the prosecution u/s 378 IPC can still continue. In this regard, it will be worthwhile to reproduce para No. 69 to 73 of the said judgment.
“69. Considering the principles of interpretation and the wordings used in Section 22, in our considered opinion, the provision is not a complete and absolute bar for taking action by the police for illegal and dishonestly committing theft of minerals including sand from the river bed. The Court shall take judicial notice of the fact that over the years rivers in India have been affected by the alarming rate of unrestricted sand mining which is damaging the eco-system of the rivers and safety of bridges. It also weakens riverbeds, fish breeding and destroys the natural habitat of many organisms. If these illegal activities are not stopped by the State and the police authorities of the State, it will cause serious repercussions as mentioned hereinabove. It will not only change the river hydrology but also will deplete the ground water levels. 70. There cannot be any dispute with regard to restrictions imposed under the MMDR Act and remedy provided therein. In any case, where there is a mining activity by any person in contravention of the provisions of Section 4 and other sections of the Act, the officer empowered and authorized under the Act shall exercise all the powers including making a complaint before the Jurisdictional Magistrate. It is also not in dispute that the Magistrate shall in such cases take cognizance on the basis of the complaint filed before it by a duly authorized officer. In case of breach and violation of Section 4 and other provisions of the Act, the police officer cannot insist Magistrate for taking cognizance under the Act on the basis of the record submitted by the police alleging contravention of the said Act. In other words, the prohibition contained in Section 22 of the Act against prosecution of a person except on a complaint made by the officer is attracted only when such person sought to be prosecuted for contravention of Section 4 of the Act and not for any act or omission which constitute an offence under the Penal Code. 71. However, there may be a situation where a person without any lease or licence or any authority enters into river and extracts sand, gravel and other minerals and remove or transport those minerals in a clandestine manner with an intent to remove dishonestly those minerals from the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 354 of 389 possession of the State, is liable to be punished for committing such offence under Sections 378 and 379 of the Penal Code. 72. From a close reading of the provisions of MMDR Act and the offence defined under Section 378, IPC, it is manifest that the ingredients constituting the offence are different. The contravention of terms and conditions of mining lease or doing mining activity in violation of Section 4 of the Act is an offence punishable under Section 2 of the MMDR Act, whereas dishonestly removing sand, gravel and other minerals from the river, which is the property of the State, out of State’s possession without the consent, constitute an offence of theft. Hence, merely because initiation of proceeding for commission of an offence under the MMDR Act on the basis of complaint cannot and shall not debar the police from taking action against persons for committing theft of sand and minerals in the manner mentioned above by exercising power under the Code of Criminal Procedure and submit a report before the Magistrate for taking cognizance against such person. In other words, in a case where there is a theft of sand and gravels from the Government land, the police can register a case, investigate the same and submit a final report under Section 173, Cr.P.C. before a Magistrate having jurisdiction for the purpose of taking cognizance as provided in Section 190 (1)(d) of the Code of Criminal Procedure. 73. After giving our thoughtful consideration in the matter, in the light of relevant provisions of the Act vis-à-vis the Code of Criminal Procedure and , the Indian Penal Codewe are of the definite opinion that the ingredients constituting the offence under the MMDR Act and the ingredients of dishonestly removing sand and gravel from the riverbeds without consent, which is the property of the State, is a distinct offence under IPC. Hence, for the commission of offence under Section 378 Cr.P.C., on receipt of the police report, the Magistrate having jurisdiction can take cognizance of the said offence without awaiting the receipt of complaint that may be filed by the authorized officer for taking cognizance in respect of violation of various provisions of the MMRD Act. Consequently the contrary view taken by the different High Courts cannot be sustained in law and, therefore, overruled. Consequently, these criminal appeals are disposed of with a direction to the concerned Magistrates to proceed accordingly.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 355 of 389 423. Thus, the various issues raised by Ld. Counsels for the accused persons regarding compliance with different provisions of MMDR Act,1957 need not be gone into as they are not at all relevant for the purpose of considering as to whether offence of theft has taken place or not.
424. At this stage, it will be also appropriate to refer to the definition of the offence of theft as given in Section 378 IPC alongwith the explanation to it.
“378. Theft.—Whoever, intending to take dishonestly any moveable property out of the possession of any person without that person’s consent, moves that property in order to such taking, is said to commit theft. Explanation 1.—A thing so long as it is attached to the earth, not being movable property, is not the subject of theft; but it becomes capable of being the subject of theft as soon as it is severed from the earth. Explanation 2.—A moving effected by the same act which affects the severance may be a theft. Explanation 3.—A person is said to cause a thing to move by removing an obstacle which prevented it from moving or by separating it from any other thing, as well as by actually moving it. Explanation 4.—A person, who by any means causes an animal to move, is said to move that animal, and to move everything which, in consequence of the motion so caused, is moved by that animal. Explanation 5.—The consent mentioned in the definition may be express or implied, and may be given either by the person in possession, or by any person having for that purpose authority either express or implied.”
425. Before proceeding further, It will be also appropriate to refer to illustration (a) to section 378 IPC:
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 356 of 389 Illustration (a) A cuts down a tree on Z’s ground, with the intention of dishonestly taking the tree out of Z’s possession without Z’s consent. Here, as soon as A has severed the tree in order to such taking, he has committed theft.”
426. Thus from the aforesaid illustration (a) and Explanation 1 to section 378 IPC, it is clear that the moment coal which was attached to the Earth was removed, it became a movable property capable of being the subject matter of the offence of theft. Moving further, it will be pertinent to mention that it is an undisputed case that approximately 19,700 metric tonne of coal was extracted from the impugned coal mine prior to grant of mine opening permission in the name of company M/s CTL or in the name of company M/s CML. Thus it needs no further elaboration that coal from the mine was extracted without the permission/consent of the concerned authorities.
427. In these circumstances, it can not be a valid argument that during all this time various inspections were carried out by different officers/officials of concerned mining department or that any intimation in this regard was sent to them by the company. It may be a case where all those officers/officials might not have taken notice of activities relating to extraction of coal either on account of some negligence on their part or they being also in connivance with the private parties involved but certainly no conclusion in this regard can be drawn or ought to be drawn by this Court in the present proceedings. In fact, all these issues may be relevant in some other proceedings, if initiated under the provisions of MMDR Act, 1957, but are completely alien to a prosecution for the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 357 of 389 offence of theft under IPC in he present matter.
428. Undisputedly, the allocation of a coal block by MOC, Government of India followed by execution of a mining lease merely makes an allottee a lessee of the coal mine in question, but the Government remains the owner thereof. In order to regulate the said mining operations the various provisions/conditions have been put in place by the Government to be followed by an allottee company before proceeding to extract coal. Some such measures are execution of mining lease or applying for various clearances and thereafter obtaining mine opening permission from the concerned authorities before starting with the actual mining operations. Thus what precisely is the purpose of allotting a given mining area and thereafter executing a mining lease in favour of the allottee company or subsequently permitting the company to open the mine and carry out extraction of coal is that the company has been given right to extract coal from the lease hold area in accordance with the terms of allotment and the mining lease. The Government in fact also regulates as to how the coal extracted shall be used or disposed of by the allottee company. Furthermore, after the coal is extracted from a given mining area then the said area after the expiry of the lease period reverts back to the Government. Moreover, if during the process of extraction of coal any other mineral or article is found inside the mining area then the same has to be reported back to the Government and the Government remains the owner of all such articles or minerals, so found. Thus it is clear from the overall facts and circumstances that extraction of coal prior to obtaining mine opening permission clearly amounts to severing/extracting coal
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 358 of 389 from the Earth without the consent of Government, which is actually the owner of the mineral so extracted.
429. The next submission of Ld. Counsels for the accused persons which requires consideration is that the extracted coal was not taken out of the lease hold area and that it remained at the pit-head of the mine itself. In this regard, I may reiterate that as mentioned in illustration (a) to Section 378 IPC and also in Explanation 1 to section 378 IPC, as soon as coal is extracted from the earth with a dishonest intention of taking it away, the offence of theft is complete. In these facts and circumstances, the issue that the extracted coal was still lying within the lease-hold area or that dead rent was being paid by the company or that regular inspection was carried out by the mining officers of the Government or that regular information was being submitted to the Government authorities by the company, as earlier stated, ceases to be of any significance for the purpose of ascertaining as to whether there was any removal of property in order to accomplish the taking of it, or not. These all aspects as earlier observed, may be relevant in some proceedings, if initiated under MMDR Act, 1957 or under any other law relating to mining operations but are certainly not relevant for the purpose of present proceedings.
430. The next question and in fact is the most important issue which arises in the overall facts and circumstances for consideration is, whether the extraction of coal took place with a dishonest intention of illegally disposing it of, or not.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 359 of 389 In this regard, not much discussion is however required as in the earlier part of the judgment, it has been elaborately discussed and demonstrated that a dishonest intention existed on the part of A-1 M/s CTL and A-2 Mahesh Kumar Agarwalla as was shared with P.K. Agarwalla (accused since deceased) from beginning in somehow procuring allocation of impugned coal block. In fact, M/s CML was used as a vehicle by P.K. Agarwalla and his family in getting the coal block transferred in their favour. Thus it is clear that M/s CML also subsequently shared the said dishonest intention with A-1 M/s CTL and A-2 Mahesh Kumar Agarwalla as was required for the commission of the offence of theft. Undisputedly, P K Agarwalla acted on behalf of M/s CML in getting the coal block transferred in its name. The dishonest intention, as discussed above is also evident from the fact that since beginning there was no intention to establish any end use project where the extracted coal was to be used. In fact on 24.06.2004, PW 30 Bhartendu Rai, General Manager Mines, CTL wrote a letter to District Mining Officer Giridih Ex. PW 20/H (available at page 194-193 in D-54) wherein it was inter-alia mentioned with respect to the question of establishing power plant that the same will be established only after ascertaining the quality and quantity of middlings available after washing of coal.
431. It will be worthwhile to reproduce the said letter over-here for a ready reference:
Letter dated 24.06.2004 available at page 194-193 in D-54
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 360 of 389 CASTRON Technologies Limited. BRAHMADIEA OPENCAST COALMINE PROJECT Office: Main Road. P.O- Pachamba, Giridih - 815316 (Jharkhand) Phone / Fax - (06532) 228919 Date: 24" June 2004 To, The District Mining Officer, Giridih.
Sub: Coal mining by our Company in an abandoned and closed mine vis-A-vis Buff sheet written to your department by Hon’ble Minister of Power dated 11'" May 2004 and as per news item appeared in Prabhat Khabar and Show Cause Notice thereof.
Ref: Your letter No: 1276/M dated 3 June 2004
Dear Sir, With reference to the above, we beg to submit as follows: 1. It is absolutely baseless and false that the mine has been leased out to Parmeshwar Kumar Agarwalla of Dhanbad. 2. On an application made by our company, M/s. Castron Technologies Ltd., a public limited company, which was recommended by the State Government and prior approval was obtained from the Central Government, lease was granted in our favour. Therefore, other details of the news item are irrelevant and do not require any explanation. 3. So far as points raised by Director (Mines), Government of Jharkhand is concerned, we beg to submit that washery is already established by our sister concern as explained to Ministry of Coal, Government of India. 4. So far as power plant is concerned, it will be established only after ascertaining the quality and quantity of middling available after washing of coal. You will appreciate that it is an old and abandoned mine in which case it is not known how much coal will be available and how much of the middling will be available after washing the coal. Therefore, in absence of this data, it is not possible to make huge investments on power plant, which costs approximately Rs.18 crores in our case. However, we can assure you that not an ounce of middling will be sold in the open market. 5. It will not be out of place to mention here that coal is of coking quality, which will be used for manufacturing of coke only. Under the provision of law, this quality of coal cannot be used for generation of power. In our case the captive use is making of coke as directed by the Central
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 361 of 389 Government in course of discussion when the mining lease was being approved for grant of prior approval. 6. We have not violated any condition of instrument for grant of mining lease. We hope this will clarify the actual situation. We further hope that the State Government will appreciate that at least in our leasehold area, illegal mining will stop and life of people involved in illegal mining will be saved. State Government will get royalty and sales tax and will generate extra revenue instead of losing this coal, whatever meager reserve is available for exploitation of coal illegally from this abandoned mine like many other illegal mines where people are losing their lives every now and then. Thanking you,
Yours faithfully, For CASTRON Technologies Ltd.,
Sd/ B. RAI General Manager (Mines)
Mumbai Office: 84, Maker Chambers III, Nariman Point, Mumbai-21, Tel.: 2285 2736 *Fax 2204 6235 Regd. Office: 8, waterloo Street, Kolkata 700 069. Tel.. 2248 9975/2248 6442 Works ; Jealgora Basti, PO K G Ashram, Dhanbad - 828 109. Tel. 0326-2203 387”
432. Thus from a bare perusal of the aforesaid letter, it is clear that M/s CTL was not even interested in establishing the power plant as was their claim since beginning both before MOC and Screening Committee. It was clearly stated in the said communication that not much is known as to how much middlings will be available and that in the absence of said data, it will not be possible to make huge investment in power plant. It was further mentioned that since the quality of coal available is coking, so under the provisions of law the same can not be used for generation of power and thus the same will be used for manufacturing of coke only. These submissions made at this stage on behalf of M/s CTL clearly contradicted the earlier claims made by the company to MOC while
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 362 of 389 seeking allotment of impugned coal mining area. These facts rather goes to show that all such claims regarding quantity and quality of coal available or establishing the washery and use of middlings in power plant were earlier made solely with a view to induce MOC, Government of India to allot the impugned coal mining area in favour of M/s CTL. In fact, as earlier also mentioned even in the year 2014 when the allocation of coal block in question came to be cancelled, no end use project was still established. This fact reinforces the conclusion that there had never been any intention of establishing any end use project, where the extracted coal could be captively used either on the part of A-1 M/s CTL or A-2 Mahesh Kumar Agarwalla or still on the part of P.K. Agarwalla and his family much less on the part of M/s CML,
In the aforesaid letter written in June 2004 there is also a specific denial that the mine has been leased out to Parmeshwar Kumar Agarwalla of Dhanbad. Thus even though Hon,ble High Court of Calcutta in the company petition filed in between M/s CTL and M/s CML had already passed orders for transfer of Brahmadiha open cast project in favour of M/s CML from M/s CTL but still the said fact was not disclosed in the letter sent by PW 30 Bhartendu Rai. Even if there was some dispute in between the families of two brothers then also fair disclosure about the said proceedings and about the family arrangement ought to have been made. These facts again goes to reinforce the conclusion that all along the entire process there was dishonest intention on the part of the accused private parties involved in the matter so as to withheld and conceal true and correct facts from MOC.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 363 of 389 433. Thus from the aforesaid circumstances, it is clear that the sole purpose of extracting coal was to not use it captively in any of their end use project but to dispose it of illegally in the market. This conclusion is not in any manner presumptuous or based on conjectures and surmises but is evident from the face of record and in fact is the only logical corollary flowing from the facts proved on record by the prosecution. In this regard, it will be also worthwhile to refer to a letter dated 17.05.07 written to coal controller on behalf of M/s CML (available at page 474- 475 in D-49) wherein permission was sought to sell the coal lying in stock at Brahmadiha opencast coal mine project, Giridih. For a ready reference the said letter read as under:
Letter dated 17.05.2007 available at page 474-475 in D-49
“MAIN ROAD, P.O. PACHAMBA, GIRIDIH – 815316, JHARKHAND. TEL: (06532) 250449, 250450. FAX : (06532) 250747
Ref: CML/C.C/JNS/07/645 CASTRON Date: 17th May, 2007 MINING LIMITED To BRAHMADIHA OPENCAST COAL MINE PROJECT The Coal Controller, Office of the Coal Controller, Ministry of Coal, Govt. of India, 1, Council House Street, Kolkata 700001.
Sub: Permission for selling of coal lying in Stock at Brahmadiha Opencast Coalmine Project, Giridih.
Dear Sir,
On receipt of your permission to open Karharbari (Lower) seam at Brahmadiha Opencast Coalmine Project, we commenced mining operation.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 364 of 389 We also received clearance from D.G.M.S., EMP clearance from M.o.E.F., Ground Water Clearance from Central Ground Water Authority as directed under para 3 of your permission letter dated 15th February, 2005. We were also directed under clause 5 of the said letter to get the mined coal tested by C.F.R.I. Dhanbad. In compliance of the same we requested the C.F.R.I. to collect sample and provide us the Test Report. On their demand we paid a sum of Rs. 1,71,664/- (Rupees One lac seventy one thousand six hundred sixty four only) through Bank Draft dated 17th March, 2005. C.F.R.I. Scientists collected 14.970 tonnes of Coal Sample on 8 th April 2005. They were also intimated through copy of Hon'ble Calcutta High Court order dated 13th May, 2003, that all properties, rights and interest of “Castron Technologies Limited” (in whose name the lease and permission was granted) has vested in “Castron Mining limited. The C.F.R.I. collected testing fee from “Castron Mining Limited”. However, they are refusing to hand over the Test Report to us. We have been following with C.F.R.I. vigorously but of no result. A copy of letter addressed to C.F.R.I. by Managing Director, Castron Mining Limited, dated 28th April 2006 is enclosed which speaks for itself. Denial of such Test Report by C.F.R.I. has caused us financial loss as we could not dispatch our coal in absence of determination of grade, deterioration of Calorific Value and Coking Properties of coal. We have not been able to decide on installation of power plant (2 x 5 MW) as contained under para 5 of your permission letter. Coal is lying in stock since May – June, 2004. We stopped adding coal to existing stock since November 2005. Coal was mined from the left over pillars after extraction of coal in past. For production of 1 tonne of coal we had to remove 15 cum of Overburden. Thus we had to invest heavily in extracting about 20,000 tonnes of coal, which could not be sold. Quality of coal in the stock coal has deteriorated to the extent that it can no longer be used for manufacturing “Coke”. Under the circumstances brought out above request for your kind intervention and order. (i) to advise/instruct C.F.R.I. to handover the Test Report to us or to you. (ii) Permit us to sell coal lying in stock since May – June 2004 measuring about 20,000 tonnes to the parties on negotiated price. We will be obliged for your just and kind intervention and order.
Yours faithfully, For CASTRON MINING LIMITED
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 365 of 389 Sd/- 17-5-07 BHARTENDU RAI Director.
Encl: As above. Building warm relationships
REGD. OFFICE: 3RD FLOOR, PUNWANI CHAMBERS, 7B, KIRAN SHANKAR ROY ROAD, KOLKATA – 700001. TEL: (033) 30221393. FAX: (033) 22319121 www.castronmining.co.in”
434. In these circumstances, the other issues being raised by A-1 M/s CTL and A-3 M/s CML that the monthly returns of November 2004, December2004 and January 2005 in the name of M/s CTL were wrongly filed by PW 30 Bhartendu Rai or other similar claims made on behalf of M/s CML regarding subsequent monthly returns, need not be gone into as it already stands well established that the accused private parties had a dishonest intention since beginning to somehow procure allocation of impugned coal mining area and thereafter not to establish any end use project so as to captively use the extracted coal and to rather dispose of the coal in the market, in order to earn undue profit. As earlier mentioned M/s CML also subsequently shared the same common intention with A-1 M/s CTL and A-2 M. K. Agarwalla in this regard. Moreover the claim of M/s CML that mine opening permission was in fact received in February 2005 and thus extraction of coal subsequent there to can not be termed as illegal is also completely without any force. Admittedly the mine opening permission in favour of M/s CML was transferred by the concerned authorities in the year 2009 only and thus any extraction of coal prior to it by company M/s CML was apparently illegal. Thus whether the said mine opening permission could not be transferred due to some
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 366 of 389 litigation pending between the families of two brothers, or not, the fact remains that prior to the year 2009 M/s CML was also not authorised to extract coal from the mine in question.
Thus, in view of my aforesaid discussion, I am of the considered opinion that all the ingredients of the offence of theft stands well proved beyond shadows of all reasonable doubts.
435. Lastly, I propose to deal with the issue of limitation as has been raised by Ld. Counsel for A-3 M/s CML. It has been stated that since the cognizance of the offence of theft has been taken much beyond the period of three years of alleged commission of the offence of theft and that too without there being any condonation of delay sought by the prosecution, so the very cognizance of the said offence is bad in law. In support of his submissions Ld. Counsel for A-3 M/s CML has placed reliance on State of Punjab Vs. Sarwan Singh (1981) 3 SCC 34 and K. Hanumantha Rao Vs. K. Narasimha Rao & Ors., 1982 CriLJ 734.
436. I may however state at the outset, that the said contention of Ld. Counsel for A-3 M/s CML is also completely devoid of any merits. In this regard, it would be appropriate to first have a brief glance over Section 468 Cr.PC which read as under:
“468. Bar to taking cognizance after lapse of the period of limitation – (1) Except as otherwise provided elsewhere in this Code, no Court, shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation. (2) The period of limitation shall be – (a) six months, if the offence is punishable with fine only; (b) one year, if the offence is punishable with imprisonment for a term not exceeding one year;
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 367 of 389 (c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. [(3) For the purposes of this section the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment.]”
437. No doubt, the offence of theft is punishable with a maximum imprisonment of 3 years and the period of limitation for taking cognizance of the said offence is also 3 years under section 468(2) Cr. PC, but in my considered opinion, the present case stands squarely covered by Section 468 (3) Cr.PC. The said sub clause states that the period of limitation in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment.
438. In the present matter, A-3 M/s CML is though being tried together with A-1 M/s CTL and A-2 Mahesh Kumar Agarwalla for the offence u/s 379/34 IPC only but A-1 M/s CTL and A-2 Mahesh Kumar Agarwalla are also being tried in the same trial for the offence u/s 120-B/420 IPC also. In view of the detailed discussion made herein-above, it is also clear that the offence of theft as is made out in the present case is clearly linked to the offence of cheating and criminal conspiracy in as much as it is an offshoot of the same. In fact, had P.K. Agarwalla not expired then he would have also faced trial for the offences u/s 120-B/420 IPC and also for the offence u/s 379 IPC since A-3 M/s CML was used by him and his family only as a vehicle to get the coal block in question transferred in
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 368 of 389 their favour. Thus as offence u/s 420 IPC is punishable with imprisonment upto 7 years and trial for the offence of theft is also being conducted in the same proceedings where other offences are also being tried together, so clearly the bar of limitation as provided u/s 468(2) Cr.PC does not apply. Reference in this regard can also be had to section 223(e) Cr.PC which provides as to which all persons may be tried jointly. Section 223(e) Cr. PC read as under:
“223. What persons may be charged jointly. The following persons may be charged and tried together, namely:-
(a) ...... (b) ...... (c) ...... (d) ...... (e) persons accused of an offence which includes theft, extortion, cheating, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of, property possession of which is alleged to have been transferred by any such offence committed by the first-named persons, or of abetment of or attempting to commit any such last- named offence; (f) ...... (g) ...... ”
439. As regard the two case law cited by Ld. Counsel for A-3 M/s CML, it would be suffice to state that in the case State of Punjab Vs. Sarwan Singh (Supra), the accused was though tried for the offence u/s 408 IPC but was ultimately convicted for the offence u/s 406 IPC only and Hon'ble Supreme court thus found that the offence u/s 406 IPC was punishable with a maximum imprisonment of 3 years only. The bar of section 468 (2) (c) Cr.PC was clearly found to be applicable to the case and the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 369 of 389 cognizance taken in the matter was held to be barred by limitation and consequently the subsequent prosecution was held to be bad in law. Similarly in the case K. Hanumantha Rao Vs. K. Narasimha Rao & Ors., (Supra), the prosecution was for the offence u/s 324 IPC and ultimately the appellant was convicted for the offence u/s 323 IPC only and the bar of limitation was thus found to be applicable, as the offence u/s 323 IPC was punishable with a maximum period of imprisonment of one year only. Thus the said two cases are clearly distinguishable in the facts and circumstances of the present case.
440. In view of my aforesaid discussion, I am thus of the considered opinion that prosecution has been clearly successful in proving the charge for the offence u/s 379/34 IPC against all the three accused persons i.e. A-1 M/s CTL, A-2 Mahesh Kumar Agarwalla and A-3 M/s CML beyond shadows of all reasonable doubts.
441. I now intend to discuss certain other miscellaneous issues as were raised by Ld. Counsels for the accused persons. The said issues were not earlier dealt with as in my considered opinion the discussion qua said issues or consequent decision as shall be followed hereinafter shall have no affect on the finding qua various offences as against different accused persons as has been recorded by me herein above.
(O) Whether sanction u/s 197 Cr. PC was required against A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam 442. Ld. Counsels for the three accused public servants i.e. A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam have also vehemently
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 370 of 389 argued that since all the acts attributed to the accused public servants in the entire coal block allocation process were done by them in the discharge of their official duties so cognizance of the offence u/s 120-B IPC against them or that of the offence u/s 409 IPC against A-4 Dilip Ray without statutory sanction u/s 197 Cr.PC was clearly bad in law.
443. However, before proceeding to discuss the aforesaid issue, I may mention that I had consciously not dealt with the present issue at an earlier stage of the judgment since I first intended to examine as to for which offence(s) under IPC the prosecution may succeed, in proving against the accused persons.
444. At the outset, I may state that the various acts of omission and commission committed by the accused public servants and as have been extensively discussed in the present judgment cannot be stated to have been committed by them while acting or purporting to act in the discharge of their official duties. In fact, it was their position as such public servants which provided them an occasion to commit such acts of omission and commission while they chose to join hands in the impugned criminal conspiracy with the accused private parties involved. It is in fact apparent on the face of record that they all simply abused their official positions as such, so as to extend undue benefit to the accused private parties involved by facilitating allocation of impugned coal block in favour of company M/s CTL.
445. In the case Rajib Ranjan & Ors vs R. Vijay Kumar, (2015) 1 SCC 513 and Inspector of Police & Anr. Vs Battenapatla Venkata Ratnam &Anr., C.A. No. 129 of 2013 (SC), it has been categorically held by
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 371 of 389 Hon’ble Supreme Court that when a public servant enters into a criminal conspiracy or indulges in criminal misconduct, such misdemeanour on his part is not to be treated as an act in discharge of his official duties and therefore, provisions of Section 197 Cr. PC will not be attracted. Reference in this regard can also be had to K. Satwant Singh vs State of Punjab, 1960 (2) SCR 89; Amrik Singh vs State of Pepsu, 1955 (1)SCR 1302.
446. Ld. Counsels for the accused public servants however while relying upon the case R. Balakrishna Pillai vs. State of Kerala, (1996) 1 SCC 478 and N. K. Ganguly Vs. CBI (2015) SCC On-line SC 1205 have strongly argued that for the acts allegedly committed by the accused public servants no cognizance of the offences under IPC can be taken without a prior sanction u/s 197 Cr.PC. It has been submitted that it cannot be held as a general proposition that whenever there is a charge of criminal conspiracy levelled against a public servant, the bar of section 197 Cr.PC will not apply.
447. At the outset, I may state that there cannot be any disagreement with the aforesaid proposition and thus each case has to be decided in the facts and circumstances of the said case and it cannot be held as a general rule that whenever there is a charge of criminal conspiracy levelled against a public servant, the bar of section 197 Cr.PC will not apply. Similarly, in the case N. K. Ganguly (Supra), Hon'ble Supreme Court has primarily reiterated the basic principle of law that for an act which is alleged to have been committed in discharge of official duty by accused the previous sanction u/s 197 Cr. PC is a pre-requisite
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 372 of 389 condition.
448. However with utmost respect, I may state that in the facts and circumstances of the present case in view of the nature of acts of omission and commission committed by the accused public servants and as have been discussed at length in the present judgment, it cannot be stated that the said acts were done by the accused MOC officers in the discharge of their official duties or even in the purported discharge of their official duties. As already discussed above the facts of the present case clearly show that the acts of entering into a criminal conspiracy to commit offence of criminal misconduct as defined under Prevention of Corruption Act, 1988 or that of criminal breach of trust cannot be deemed to have been done by the accused public servants in the discharge of their official duty or even in the purported discharge of their official duties. It is altogether a different matter that the position of the accused persons either as Minister of State for Coal, or as Additional Secretary, Coal and Chairman 14th Screening Committee or as Advisor (Projects) MOC and Member Convenor 14th Screening Committee, provided them an opportunity to undertake such acts of criminal misconduct while choosing to enter into the criminal conspiracy hatched by the accused private persons involved. However, all the acts as stands proved against the accused public servants i.e. A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam are such that if questioned they cannot claim that they were acting in the discharge of their official duties.
449. At this stage, I will be also pertinent to mention some of the relevant judgments on this issue. In Matajog Dobey Vs. H.C. Bhari
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 373 of 389 (AIR 1956 SC 44) it was held:-
“The offence alleged to have been committed (by the accused) must have something to do, or must be related in some manner with the discharge of official duty...... there must be a reasonable connection between the act and the discharge of official duty; the act must bear, such relation to the duty that the accused could lay a reasonable (claim) but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.”
450. In B. Saha & Ors. Vs. M.S. Kochar, 1979 (4) SCC 177, it was held by Apex Court :- “17. The words “any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty” employed in Section 197(1) of the Code, are capable of a narrow as well as a wide interpretation. If these words are construed too narrowly, the section will be rendered altogether sterile, for, “it is no part of an official duty to commit an offence, and never can be”. In the wider sense, these words will take under their umbrella every act constituting an offence, committed in the course of the same transaction in which the official duty is performed or purports to be performed. The right approach to the import of these words lies between these two extremes. While on the one hand, it is not every offence committed by a public servant while engaged in the performance of his official duty, which is entitled to the protection of Section 197(1), an act constituting an offence, directly and reasonably connected with his official duty will require sanction for prosecution under the said provision. As pointed out by Ramaswami, J., in Baijnath v. State of M.P. [AIR 1966 SC 220, 227 : (1966) 1 SCR 210 : 1966 Cri LJ 179] , “it is the quality of the act that is important, and if it falls within the scope and range of his official duties, the protection contemplated by Section 197 of the Criminal Procedure Code will be attracted”.
451. Further Apex Court in another case titled as P. Arul Swami Vs. State of Madras, AIR 1967 SC 766 held that:-
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 374 of 389 “The protection is limited only when the act done by public servant is reasonably connected with the discharge of his official duty and is not merely a cloak for doing an objectionable act.”
452. The Apex Court in Harihar Prasad Vs. State of Bihar, (1972) 3 SCC 89 (SCC p.115.para 66) observed: “As far as the offence of criminal conspiracy punishable under Section 120B read with Section 409 of Indian Penal Code is concerned and also Section 5(2) of the Prevention of Corruption Act are concerned they cannot be said to be of the nature mentioned in Section 197 of the Code of Criminal Procedure. To put it shortly, it is no part of the duty of a public servant, while discharging his official duties, to enter into a criminal conspiracy or to indulge in criminal misconduct. Want of sanction under Section 197 of the Code of Criminal Procedure is, therefore, no bar”.
453. The aforesaid view has been reiterated by the Hon,ble Apex Court in State of Himachal Pradesh Vs. M. P. Gupta (2004) 2 SCC 349, wherein it has been pointed out that offence under Section 467, 468 and 471 IPC relating to forgery of valuable security, documents, respectively cannot be a part of the duty of a public servant while discharging his official duties. Therefore, want of sanction under Section 197 of the Code may not be a bar for prosecution of such public servant.
454. It will be worthwhile to once again refer to the case Rajib Ranjan & Ors. Vs. R. Vijay Kumar, (Supra) wherein Hon'ble Apex Court also made the following observations:
“15. The sanction, however, is necessary if the offence alleged against the public servant is committed by him “while acting or purporting to act in the discharge of his official duties”. In order to find out as to whether the alleged offence is committed while acting or purporting to act in the discharge of his official duty, the following
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 375 of 389 yardstick is provided by this Court in Budhikota Subbarao [State of Maharashtra v. Budhikota Subbarao, (1993) 3 SCC 339 : 1993 SCC (Cri) 901 : (1993) 2 SCR 311] in the following words: (SCC p. 347, para 6) “6. … If on facts, therefore, it is prima facie found that the act or omission for which the accused was charged had reasonable connection with discharge of his duty then it must be held to be official to which applicability of Section 197 of the Code cannot be disputed.” 16. This principle was explained in some more detail in Raghunath Anant Govilkar v. State of Maharashtra [(2008) 11 SCC 289 : (2009) 1 SCC (Cri) 130] , which was decided by this Court on 8-2- 2008 in SLP (Crl.) No. 5453 of 2007, in the following manner: (SCC pp. 298-99, para 11) “11. ‘7. … “66. … On the question of the applicability of Section 197 of the Code of Criminal Procedure, the principle laid down in two cases, namely, Shreekantiah Ramayya Munipalli v. State of Bombay [AIR 1955 SC 287 : 1955 Cri LJ 857] and Amrik Singh v. State of Pepsu [AIR 1955 SC 309 : 1955 Cri LJ 865] was as follows: (Amrik Singh case [AIR 1955 SC 309 : 1955 Cri LJ 865] , AIR p. 312, para 8) ‘8. … It is not every offence committed by a public servant that requires sanction for prosecution under Section 197(1) of the Criminal Procedure Code; nor even every act done by him while he is actually engaged in the performance of his official duties; but if the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary….’ The real question therefore, is whether the acts complained of in the present case were directly concerned with the official duties of the three public servants. As far as the offence of criminal conspiracy punishable under Section 120-B read with Section 409 of the Penal Code is concerned and also Section 5(2) of the Prevention of Corruption Act, are concerned they cannot be said to be of the nature mentioned in Section 197 of the Code of Criminal Procedure. To put it shortly, it is no part of the duty of a public servant, while discharging his official duties, to enter into a criminal conspiracy or to indulge in criminal misconduct. Want of sanction under Section 197 of the Code of Criminal Procedure is,
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 376 of 389 therefore, no bar.” [Ed.: As observed in Harihar Prasad v. State of Bihar, (1972) 3 SCC 89, 115, para 66 : 1972 SCC (Cri) 409.] ' [Ed.: Quoted from State of Kerala v. V. Padmanabhan Nair, (1999) 5 SCC 690, 692, para 7 : 1999 SCC (Cri) 1031.] ” 17. Likewise, in Shambhoo Nath Misra v. State of U.P. [(1997) 5 SCC 326 : 1997 SCC (Cri) 676 : AIR 1997 SC 2102] , the Court dealt with the subject in the following manner: (SCC p. 328, para 5) “5. The question is when the public servant is alleged to have committed the offence of fabrication of record or misappropriation of public fund, etc. can he be said to have acted in discharge of his official duties? It is not the official duty of the public servant to fabricate the false record and misappropriate the public funds, etc. in furtherance of or in the discharge of his official duties. The official capacity only enables him to fabricate the record or misappropriate the public fund, etc. It does not mean that it is integrally connected or inseparably interlinked with the crime committed in the course of same transaction, as was believed by the learned Judge. Under these circumstances, we are of the opinion that the view expressed by the High Court as well as by the trial court on the question of sanction is clearly illegal and cannot be sustained.” 18. The ratio of the aforesaid cases, which is clearly discernible, is that even while discharging his official duties, if a public servant enters into a criminal conspiracy or indulges in criminal misconduct, such misdemeanour on his part is not to be treated as an act in discharge of his official duties and, therefore, provisions of Section 197 of the Code will not be attracted. In fact, the High Court has dismissed the petitions filed by the appellant precisely with these observations, namely, the allegations pertain to fabricating the false records which cannot be treated as part of the appellants' normal official duties. The High Court has, thus, correctly spelt out the proposition of law. The only question is as to whether on the facts of the present case, the same has been correctly applied.”
455. Further Hon'ble High Delhi High Court in the case “State Vs. Mukesh Kumar Singh & Anr., Crl. Rev. P. 462/2017” decided on 03.04.2018 has observed:-
“The “safe and sure test”, as laid down in the case of Centre for Public Interest Litigation (supra), is to find if the omission or neglect to commit the act complained of would have made the public servant answerable for charge of dereliction of his
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 377 of 389 official duty. He may have acted “in excess of his duty”, but if there is a “reasonable connection” between the impugned act and the performance of the official duty, the protective umbrella of Section 197 CrPC cannot be denied, so long as the discharge of official duty is not used as a clock for illicit acts.” 456. Recently Hon’ble Supreme court in the case CBI v. B.A. Srinivasan, (2020) 2 SCC 153, as regard requirement of sanction u/s 197 Cr. PC observed as under:
“14. Again, it has consistently been laid down that the protection under Section 197 of the Code is available to the public servants when an offence is said to have been committed “while acting or purporting to act in discharge of their official duty”, but where the acts are performed using the office as a mere cloak for unlawful gains, such acts are not protected. The statements of law in some of the earlier decisions were culled out by this Court in Inspector of Police v. Battenapatla Venkata Ratnam [Inspector of Police v. Battenapatla Venkata Ratnam, (2015) 13 SCC 87 : (2016) 1 SCC (Cri) 164] as under: (SCC pp. 89-90, paras 7-9)
“7. No doubt, while the respondents indulged in the alleged criminal conduct, they had been working as public servants. The question is not whether they were in service or on duty or not but whether the alleged offences have been committed by them ‘while acting or purporting to act in discharge of their official duty’. That question is no more res integra. In Shambhoo Nath Misra v. State of U.P. [Shambhoo Nath Misra v. State of U.P., (1997) 5 SCC 326 : 1997 SCC (Cri) 676] , SCC para 5, this Court held that: (SCC p. 328) ‘5. The question is when the public servant is alleged to have committed the offence of fabrication of record or misappropriation of public fund, etc. can he be said to have acted in discharge of his official duties. It is not the official duty of the public servant to fabricate the false records and misappropriate the public funds, etc. in furtherance of or in the discharge of his official duties. The official capacity only enables him to fabricate the record or misappropriate the public fund, etc. It does not mean that it is integrally connected or inseparably interlinked with the crime committed in the
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 378 of 389 course of the same transaction, as was believed by the learned Judge. Under these circumstances, we are of the opinion that the view expressed by the High Court [Shambhoo Nath Mishra v. State of U.P., 1995 SCC OnLine All 492 : (1995) 32 ACC 775] as well as by the trial court on the question of sanction is clearly illegal and cannot be sustained.’ 8. In Parkash Singh Badal v. State of Punjab [Parkash Singh Badal v. State of Punjab, (2007) 1 SCC 1 : (2007) 1 SCC (Cri) 193] , at para 20 this Court held that: (SCC pp. 22-23) ‘20. The principle of immunity protects all acts which the public servant has to perform in the exercise of the functions of the Government. The purpose for which they are performed protects these acts from criminal prosecution. However, there is an exception. Where a criminal act is performed under the colour of authority but which in reality is for the public servant's own pleasure or benefit then such acts shall not be protected under the doctrine of State immunity.’
457. Thus, as regard the requirement of sanction under Section 197 Cr. PC for taking cognizance of offence under section 120-B IPC against A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam or for the offence u/s 409 IPC against A-4 Dilip Ray, is concerned, it is clear that the alleged acts committed by A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam cannot be said to have been done by them in the discharge of their official duties or in the purported discharge of their official duties. The said office merely provided them an opportunity to commit such acts of misdemeanor. The acts of entering into the criminal conspiracy with the accused private persons involved thus cannot be deemed to have been done in discharge of their official duty. Hence, the provision of Section 197 Cr. PC are not attracted in the facts and circumstances of the present case. There have been serious acts of omissions and commissions on the part of A-4 Dilip Ray, A-5 P. K.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 379 of 389 Banerjee and A-6 N. N. Gautam and the same cannot be termed as mere irregularities.
458. Accordingly, in view of my aforesaid discussion, I am of the considered opinion that no sanction u/s 197 Cr. PC is required for the impugned acts of the accused public servants of entering into the criminal conspiracy either to commit offence of criminal misconduct under Prevention of Corruption Act, 1988, as stands duly proved against all the three accused public servants i.e. A-4 Dilip Ray, A-5 P. K. Banerjee and A-6 N. N. Gautam or even for the offence u/s 409 IPC which stands proved against A-4 Dilip Ray.
(P) Effect of Prevention of Corruption (Amendment) Act, 2018.
459. It is been vehemently argued by learned Senior Advocate for A-4 Dilip Ray that subsequent to passing of Prevention of Corruption (Amendment) Act, 2018, section 19 of PC Act, 1988, has been amended. The Act now provides that sanction for prosecution of a public servant for an offence under section 7, 11, 13 and 15 shall also be required even if the concerned public servant has retired or demitted his office. It has been submitted that the purpose of introducing the said amendment is primarily to prevent the harassment of honest public servants by extending them the protection of requirement of previous sanction to prosecute them even when they have demitted the office. Section 19 PC Act 1988, was thus stated to have been now brought on the same footing as section 197 Cr.PC. It has been submitted that as sanction is in the realm of procedural law so such an amendment has to be applied
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 380 of 389 retrospectively, since it is a well settled proposition of law that procedural law is generally presumed to be retrospective, unless specifically provided otherwise. In support of his arguments learned Senior Advocate placed reliance upon the following case law:
(1) Kapur Chand Pokhraj vs State of Bombay (1959) SCR 250; (2) Union of India vs Sukumar Pyne (1966) 2 SCR 34; (3) Rao Shiv Bahadur Singh Singh vs State of Vindhya Pradesh (1953) SCR 460. It has been further submitted by Ld. Senior Advocate that the said intention of legislature was even expressed while introducing the Prevention of Corruption (Amendment) Bill, 2013, and subsequently in the report of Parliamentary standing committee to which the said Bill was referred to by the Parliament. It was further submitted that such an amendment being beneficial to the accused and being procedural in nature has to be thus given effect retrospectively and A-4 Dilip Ray thus ought to be given the said benefit. It has been thus submitted that as the prosecution has not obtained the requisite sanction to prosecute A-4 under section 19 PC Act, so he must be acquitted for the offence under PC Act,1988 for want of sanction.
461. On the other hand, Ld. Senior P.P. strongly opposed the said submissions stating that the intention of legislature in introducing the said amendment cannot be to scuttle the ongoing proceedings. It was submitted that when charge-sheet was filed by CBI and the court proceeded to take cognizance of the offences under Prevention of Corruption Act against the accused then at that time there was no requirement of sanction under section 19 PC Act since by that time A-4
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 381 of 389 had already demitted the office during which the impugned offence was committed. It was also submitted that had there been any intention of the legislature to make the operation of said amendment retrospective in nature, then it would have specifically provided for the same in the Amending Act itself. It was also submitted that the prosecution cannot be now burdened with the additional responsibility/liability of obtaining sanction to prosecute the accused. It was also submitted that if such a requirement/amendment is held to be retrospective in nature than it will have devastating effect on all such cases where public servants who have since retired are facing trial under PC Act. It was further submitted that such an amendment cannot be categorised as procedural in nature, since the same will affect the substantive rights of the parties and thus it has to be held to be prospective in operation only. It was submitted that undoubtedly after the introduction of said amendment, if a retired public servant is to be now prosecuted, even for an offence committed prior to the passing of Amendment Act, 2018, then also before taking cognizance against the said retired public servant prior sanction for prosecution u/s 19 PC Act,1988 will be required.
My Discussion 462. At the outset, I may state that undoubtedly sanction is an important protection which has been introduced by the legislature with the sole object to prevent the harassment of honest public servants. However, at the same time, it is an undisputed fact that as on the date when the charge sheet in the present case was filed by CBI and this court proceeded to take cognizance against the accused persons, including
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 382 of 389 A-4 Dilip Ray vide order dated 15.01.2016 then, at that time all the accused public servants had already demitted their office during which the impugned offences were allegedly committed. Not only A-5 P.K. Banerjee and A-6 Nitya Nand Gautam had retired from government service, but A-4 who was a member of Rajya Sabha had also retired as the term of said Rajya Sabha had already come to an end. Thus, insofar as order taking cognizance on the impugned date i.e. 15.01.2016 is concerned, there is no dispute that as on that date there was no requirement of obtaining sanction to prosecute retired public servants. It is only after the Prevention of Corruption (Amendment) Act, 2018, came to be passed by the Parliament that such objections are being raised by retired public servants in various cases where cognizance was taken prior to passing of Amendment Act.
463. Before I proceed to deal with the issues raised by Ld counsel for accused public servants it will be worthwhile to refer to some observations made by Hon'ble Supreme Court with respect to retrospective and prospective operation of statutes.
464. In “Hitendra Vishnu Thakur v. State of Maharashtra33” the Apex Court laid down certain guidelines with regard to interpretation of laws, which are as follows:
“(i) A statute which affects substantive rights is presumed to be prospective in operation, unless made retrospective, either expressly or by necessary intendment, whereas a Statute which merely affects procedure, unless such a construction is texturally impossible, is presumed to be retrospective in its application, should not be given an
33 AIR 1994 SC 2623
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 383 of 389 extended meaning, and should be strictly confined to its clearly defined limits. (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even though remedial, is substantive in nature. (iii) Every litigant has a vested right in substantive law, but no such right exists in procedural law. (iv) A procedural Statute should not generally speaking be applied retrospectively, where the result would be to create new disabilities or obligations, or to impose new duties in respect of transactions already accomplished. (v) A Statute which not only changes the procedure but also creates a new rights and liabilities, shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.”
465. Coming now to the issues raised by Ld. Counsels for accused public servants, I may mention that all the said issues have been very extensively dealt with by Hon’ble Telangana High Court in the case Katti Nagaseshanna Vs. The State of Andhra Pradesh, Criminal Petition No. 9044 of 2018.
I thus find it appropriate to refer to the following observations made by the Hon’ble Judge in the said case:
“The facts of the case are distinguishable as the petitioner claiming immunity from the prosecution on the ground of failure to obtain sanction for prosecuting him taking advantage of explanation by Act 16 of 2018, which came into force with effect from 26.07.2018, but such amendment created/imposed new obligation or duty on the prosecution to obtain sanction to prosecute even retired government servant. Earlier sanction is required only to prosecute the public servant, and when a person retired from service, no sanction is required. On account of change of law due to addition of explanation to Section 19 (1) of the P.C.Act, now sanction is required even to prosecute retired government servant. If this provision is given retrospective effect, all retired government servants, against whom prosecutions are
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 384 of 389 pending will sneak out from the prosecutions, it is nothing but accommodating retired Government Servant to escape from pending prosecution under the P.C.Act irrespective of seriousness of offence. The intention of the legislature is to prevent bribery among the public servants, which is a serious threat to the society now and increasing day by day. Therefore, amendment to Section 19 (1) of the P.C. Act though deals with procedure, which cannot be given retrospective effect as it created or imposed new obligation or duty on the prosecution to obtain sanction after more than 7 years from the date of filing charge sheet and taking cognizance against the petitioner. Therefore, I find that such interpretation as sought for by the learned counsel for the petitioner is against the intendment of the Statute. Coming to the present facts of the case, Section 19 (1) of the P.C.Act relates to procedure to be followed for prosecuting a public servant. When such amendment imposes new obligation or creating disability, in the absence of any provision giving retrospective effect, the same cannot be given retrospective effect to defeat all pending prosecutions against the retired Government Servants. If such interpretation is given to explanation to Section 19 (1) of P.C. Act by Act 16 of 2018, it will have devastating effect on the pending prosecutions and it amounts to paving path to the accused persons, who are retired public servants to sneak away from prosecutions though they committed serious offences, and such interpretation is against the intendment of the Act itself as observed in “M.Narayanan Nambiar v. State of Kerala” (referred supra). Therefore, it is difficult to accept the contention of the learned counsel for petitioner to give retrospective effect to the amended provision i.e. Section 19 (1) of the P.C.Act, which permits the petitioner to escape from the prosecution.”
466. Further, Hon’ble Supreme Court has also in the case “The State of Telangana Vs. Sri Managipet @ Mangipet Sarveshwar, Criminal Appeal No. 1662 of 2019 (arising out of SLP (CRIMINAL) No. 3632 of 2019) observed as under:-
“36. The High Court has rightly held that no ground is made out for quashing of the proceedings for the reason that the investigating agency intentionally waited till the retirement of
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 385 of 389 the Accused Officer. The question as to whether a sanction is necessary to prosecute the Accused Officer, a retired public servant, is a question which can be examined during the course of the trial as held by this Court in K. Kalimuthu. In fact, in a recent judgment in Vinod Kumar Garg v. State (Government of National Capital Territory of Delhi), this Court has held that if an investigation was not conducted by a police officer of the requisite rank and status required under Section 17 of the Act, such lapse would be an irregularity, however unless such irregularity results in causing prejudice, conviction will not be vitiated or be bad in law. Therefore, the lack of sanction was rightly found not to be a ground for quashing of the proceedings. 37. Mr. Guru Krishna Kumar further refers to a Single Bench judgment of the Madras High Court in M. Soundararajan v. State through the Deputy Superintendant of Police, Vigilance and Anti Corruption, Ramanathapuram to contend that amended provisions of the Act as amended by Act XVI of 2018 would be applicable as the Amending Act came into force before filing of the charge sheet. We do not find any merit in the said argument. In the aforesaid case, the learned trial court applied amended provisions in the Act which came into force on 26 th July, 2018 and acquitted both the accused from charge under Section 13(1)(d)read with 13(2) of the Act. The High Court found that the order of the trial court to apply the amended provisions of the Act was not justified and remanded the matter back observing that the offences were committed prior to the amendments being carried out. In the present case, the FIR was registered on 9th November, 2011 much before the Act was amended in the year 2018. Whether any offence has been committed or not has to be examined in the light of the provisions of the statute as it existed prior to the amendment carried out on 26 th July, 2018. 38. In view thereof, we do not find any merit in the reasonings recorded by the High Court in respect of contentions raised by the Accused Officer. The arguments raised by the Accused Officer can not be accepted in quashing the proceedings under the Act. Accordingly, Criminal Appeal No. 1663 of 2019 filed by the Accused Officer is dismissed whereas Criminal Appeal No. 1662 of 2019 filed by the State is allowed.”
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 386 of 389 467. Thus it is clear from the aforesaid well settled position of law, that there will no retrospective operation of Section 19 PC Act. Accordingly, the contentions of Ld. Counsels for accused public servants, in this regard, is liable to be rejected.
(Q) Conclusion
468. Since it has been now concluded beyond shadows of all reasonable doubts that all the five accused persons i.e. A-1 M/s. Castron Technologies Ltd., A-2 Mahendra Kumar Agarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam conspired together so as to procure allocation of a captive coal block i.e. Brahmadiha coal block in favour of A-1 M/s CTL and finally achieved the said object of the criminal conspiracy by undertaking various acts of cheating MOC, Government of India by A-1 M/s CTL and A-2 M.K. Agarwalla and by various acts constituting the offence of criminal misconduct as defined under P.C. Act, 1988 by A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 Nitya Nand Gautam and also the offence of criminal breach of trust by public servant by A-4 Dilip Ray, so I accordingly hold them guilty of the offences u/s 120-B IPC, 120-B/409/420 IPC and Section 13 (1) (c) and 13 (1) (d) P.C. Act, 1988 and convict them thereunder beside also convicting them for the substantive offences as already discussed in the earlier part of the judgment.
469. The three accused persons i.e. A-1 M/s CTL, A-2 Mahesh Kumar Agarwalla and A-3 M/s CML are also held guilty for the offence u/s 379/34 IPC and I accordingly convict them thereunder.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 387 of 389 470. In view of the detailed discussion and the conclusions drawn by me here-in-above, my final conclusion as regard various offences for which charges were framed against the accused persons may be now summarized as under:
CHARGES FRAMED
S. Name of (I) (II) FINAL DECISION No accused Charges Common Charges to all separately framed 1 A-1 M/s (i) 120-B IPC 420 IPC; 379/34 Convicted for the offence Castron IPC u/s 120-B IPC; 420 IPC; Technologies (ii) u/s 120-B/ 409/ 379/34 IPC; 120-B IPC r/w Ltd. 420 IPC and Section S. 409/420 IPC and (M/s CTL) 13 (1) (c) and 13 (1) Section 13 (1) (c)/13(1) (d) P.C. Act, 1988 (d) P.C. Act, 1988.
2 A-2 Mahendra (i) 120-B IPC 420 IPC; 379/34 Convicted for the offence Kumar IPC u/s 120-B IPC; 420 IPC; Agarwalla (ii) u/s 120-B/409/ 379/34 IPC; 120-B r/w S. 420 IPC and Section 409/420 IPC and Section 13 (1) (c) and 13 (1) 13 (1) (c)/13(1)(d) P.C. Act, (d) P.C. Act, 1988 1988
3 A-3 M/s 379/34 IPC Convicted for the offence Castron ______u/s 379/34 IPC Mining Ltd. (M/s CML) 4 A-4 Dilip Ray (i) 120-B IPC (i) Sec. 409 IPC Convicted for the offence u/s 120-B IPC; 409 IPC; (ii) u/s 120-B/409/ (ii) 13 (1) (c) / Section 13 (1) (c) and 420 IPC and Section 13 (1) (d) P.C. Section 13 (1) (d) P.C. 13 (1) (c) and 13 (1) Act, 1988 Act,1988 and Section 120- (d) P.C. Act, 1988 B r/w 409/420 IPC; Section 13 (1) (c) and Section 13 (1) (d) P.C. Act, 1988. 5 A-5 Pradip (i) 120-B IPC 13 (1) (d) P.C. Convicted for the offence Kumar Act, 1988 u/s 120-B IPC; Section 13 Banerjee (ii) u/s 120-B/409/ (1) (d) P.C. Act, 1988 and 420 IPC and Section Section 120-B r/w 409/420 13 (1) (c) and 13 (1) IPC and Section 13(1) (d) P.C. Act, 1988 (c)/13(1)(d) P.C. Act, 1988.
CBI Vs. M/s. Castron Technologies Ltd. & Ors. (Judgement dated 06.10.2020) Page No. 388 of 389 6 A-6 Nitya (i) 120-B IPC 13 (1) (d) P.C. Convicted for the offence Nand Gautam Act, 1988 u/s 120-B IPC; Section 13 (ii) u/s 120-B/409/ (1) (d) P.C. Act, 1988 and 420 IPC and Section Section 120-B r/w 409/420 13 (1) (c) and 13 (1) IPC and Section 13(1) (d) P.C. Act, 1988 (c)/13(1)(d) P.C. Act, 1988.
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