Conviction of former coal minister in NDA govt Dilip Ray in 1999 Jharkhand Coal Scam: Excerpts from judgment

A Special CBI Judge on Tuesday convicted former Union Minister of State Dilip Ray for his involvement in the 1999 Jharkhand Coal Scam.

Special Judge Bharat Parashar convicted Ray and others for the offence of criminal conspiracy and other offences. In his judgment, the Special Judge states that the guilt of the accused has been established by the prosecution beyond "shadows of all reasonable doubts"

Dilip Ray has been convicted of conspiracy, cheating, and criminal breach of trust under Sections 120-B, 409, and 420 of the Indian Penal Code. Additionally, he has been found to have violated provisions of the Prevention of Corruption Act; converting property for his own use and for taking illegal gratification.

Apart from Ray, the court also convicted two former senior officials of the Ministry of Coal Pradip Kumar Banerjee and Nitya Nand Gautam, as well as the Director of Castron Technologies Limited, Mahendra Kumar Aggarwalla.

The case pertains to irregularities in the allocation of a Jharkhand coal block in 1999, when Ray was Minister of State for Coal in the Atal Bihari Vajpayee government.

There was a question raised by the accused as to the legal validity of the chargesheet filed against them by the CBI and the cognizance taken on the basis of this. It was argued that prior sanction was required before proceedings were initiated against them, since Ray, Gautam, and Banerjee were public servants. The Special Judge observed that all of them had demitted office at the time the chargesheet was filed and so they were no longer public servants for the application of the Prevention of Corruption Act, insofar as their prosecution was concerned.

The amendment to the Act (Section 19) that required sanction to be obtained prior to initiating criminal prosecution even against retired public servants was held as not applicable to the accused. The judge arrived at the conclusion because their prosecution commenced before the Amendments took effect, and that changes in procedural law did not ordinarily operate retrospectively.

The sentence is expected to be pronounced on October 14.

All of the accused in the case have been summoned to the Special Court in Delhi for the verdict.

The 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. by 14th Screening Committee, Ministry of Coal (MOC), Government of India.

Here are some relevant extracts from the judgment:

Investigation by CBI

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 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.

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. (A3) (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 (A5) 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.

All the accused persons however pleaded not guilty to the charges so framed against them and claimed trial.

In order to prove its case prosecution examined 51 witnesses. Out 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.

Defense on behalf of Dilip Ray

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 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.

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 coaccused persons or hatching of any criminal conspiracy in between them.

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, cannot hold ground against him. A-4 Dilip Ray was thus prayed to be acquitted.

Acts attributed to Dilip Ray

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 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.

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.

...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 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.

Decision taken during tenure of caretaker govt

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.

....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.

... the marking of said representation for reexamination could in no way be termed as an action required to be undertaken for running day to day administration by a Minister of a Caretaker 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.

Ray abused his official position

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.

...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.

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.

Conviction under Section 409 IPC

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.

...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.

...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.

Conviction under Section 420 IPC (cheating)

...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 reasonable doubts. Charge for the offence u/s 420 IPC accordingly stands proved.

Conviction under Section 120B IPC (criminal conspiracy)

...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 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.

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.