in the court of sh. bharat parashar, special judge (pc … · 13 (1) (d) p.c. act, 1988 8. all the...

IN THE COURT OF SH. BHARAT PARASHAR, SPECIAL JUDGE (PC ACT) (CBI), ROUSE AVENUE COURT COMPLEX

NEW DELHI

CNR NO. DLCT11-001136-2019Case No. CBI/291/2019RC No. 221 2014 E 0002Branch : CBI/EO-III/New DelhiCBI 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 : 26.04.2017Date 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 AgarwallaLal 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. RayR/o Permanent Address:Mayfair Hotel, Jaidev Vihar,Bhubaneshwar, Odisha Present Address:117, Hauz Khas Enclave,New Delhi. (Convicted)

(5) Pradip Kumar BanerjeeS/o Late Sh. Tulsi Das BanerjeeR/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 GautamR/o F-1/12, Model Town-1,Delhi-110009Present 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. CounselSh. Avijit Mani Tripathi for A-6 N.N. Gautam.


J U D G E M E N TJ U D G E M E N T

INDEX TO THE JUDGMENT

S. NO

HEADING PAGENO(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 by Prosecution by way of Affidavit U/S 296 Cr.PC, but accusedpersons chose not to cross- examine them.

23

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 andRegulation) Act 1957 (MMDR Act, 1957), Coal Mines (Taking overof Management) Act, 1973 (CTM Act, 1973) and Coal Mines(Nationalisation) Act, (CMN Act, 1973).

61

(G) Detailed circumstances in which application dated 09.05.98 of M/sCTL was dealt with in Ministry of Coal (MOC), Coal India Limited(CIL), Central Mine Planning & Design Institute Limited (CMPDIL)and Central Coalfields Limited (CCL).

79

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


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 wasconstituted in MOC.

152

Issue No. (2) Whether Screening Committee was within its rights toconsider allocation of a non-nationalised and consequently anon-identified coal mine.

Issue No. (3) Whether application of M/s CTL seeking identification andallocation of Brahmadiha Coal Block i.e. a non-nationalizedcoal mine and consequently a non-identified coal mine wasrequired to be put up before the Screening Committee or itought to have been closed/rejected in MOC itself.

Issue No. (4) Whether allocation made by 14th Screening Committee in favourof M/s CTL for allocation of said abandoned Brahmadiha coalmining area was in accordance with law.

189

(J) Charge for the offence u/s 13 (1) (d) P.C. Act, 1988 against A-4 DilipRay, 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 ScreeningCommittee.

210

J (i) Role played by A-5 P.K. Banerjee, Additional Secretary Coaland Chairman 14th Screening Committee and A-6 N.N.Gautam, Advisor (Projects) and Member Convenor 14th

Screening Committee.

218

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 andSection 409 IPC against A-4 Dilip Ray

290

(L) Charge for the offence of cheating i.e. u/s 420 IPC against A-1 M/sCTL and A-2 M.K. Agarwalla.

309

(M) Charge for the offence of criminal conspiracy i.e. 120-B IPCagainst A-1 M/s. Castron Technologies Ltd., A-2 Mahendra KumarAgarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 NityaNand Gautam

343


(N) Charge for the offence of theft i.e. Section 379/34 IPC against A-1company M/s. Castron Technologies Ltd. (M/s CTL), A-2 MahendraKumar Agarwalla and A-3 company M/s Castron Mining Ltd. (M/sCML)

349

(O) Whether sanction u/s 197 Cr. PC was required against A-4 DilipRay, A-5 P. K. Banerjee and A-6 N. N. Gautam

370

(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


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


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 purposeof present order and as disclosed in the final report u/s 173 Cr.PCfiled by CBI are as under:

M/s CTL through its director M.K. Agarwalla vide itsapplication dated 09.05.98 applied to Ministry of Coal (MOC) forallotment of “Brahmadiha” Coal Block situated at Giridih,Jharkhand. It was stated in the application that the extracted coalshall be used by the company for washery and power generation.When the said application of the company came to be consideredthen views of Coal India Ltd. (CIL) were sought. However CILsought a report about the viability of the coal block qua variousaspects from Central Mine Planning & Design Institute Limited(CMPDIL). On the basis of report of CMPDIL dated 13/17.08.98submitted to CIL with a copy to MOC, it was conveyed by CIL toMOC vide its letter dated 02.09.98 that as the block whoseallotment was sought for was an abandoned mine area and wasfull of water so it could be dangerous to the adjoining properties ofCentral Coal Fields (CCL) where coal mining activities were beingundertaken through underground mining method. It was alsoobserved that as the coal reserves in the block were very meageri.e. to the tune of 0.7 million tonnes only and not 2.21 million tonnesas indicated by the applicant company M/s CTL so the mining of the


coal block will be highly uneconomical. It was also stated that tomine coal from the barrier between the proposed coal block and theadjoining lease hold mines of CCL, would be against the safetynorms and also against the mining statues. It was also stated thatas per the guidelines approved by MOC for allotment of captive coalblocks, the allotment of the impugned coal block will be contrary tothe said guidelines. Thus on account of the aforesaid scientific andlegal considerations, the proposal of the applicant company M/sCTL was stated to be not viable. Subsequently Sh. N.N. GautamAdviser (P) again wrote a letter dated 06.11.98 to CIL seekingfurther clarification. However in response thereto CIL vide its letterdated 16.03.99 again reiterated its earlier stand and alsohighlighted that the impugned block was not in the list of identifiedcaptive coal blocks to be allocated. It also reiterated the danger tothe adjoining mine of CCL.

However, Sh. N.N. Gautam, the then Adviser(Projects) MOC prepared a detailed note dated 16.04.99 interaliareproducing the observations made by CIL and also mentionedabout a subsequent discussion held with CIL and CMPDIL on13.04.99 and stated that the impugned coal block with limitedreserves was not included in the identified list of captive coal blocksand was also not viable for captive coal mining. He thus proposedthat it will not be possible to allot the said abandoned coal mine toapplicant company M/s CTL. The file thereafter was put up beforethe then Additional Secretary (Coal) Sh. P.K. Banerjee who at thattime was also Chairman of the Screening Committee. Sh. P.K.Banerjee thereafter forwarded the file to Secretary (Coal) on22.04.99 and from the desk of Secretary (Coal), the file went to theoffice of Minister of State for Coal, Sh. Dilip Ray on 23.04.99.However on 12.05.99 applicant company M/s CTL submitted afresh representation to Minister of State for Coal stating that theirapplication may be considered expeditiously. Accordingly on13.05.99 the file came to the desk of Secretary (Coal) from theoffice of Minister of State for Coal with the endorsement by Ministerof State for Coal that in the light of representation received fromapplicant company M/s Castron Technologies Ltd, the case may bere-examined. The file accordingly moved downwards and thereafterAdviser (Projects) MOC, Sh. N.N. Gautam made a fresh detailednote dated 20.05.99. In the said note dated 20.05.99, Sh. N.N.Gautam however made a complete u-turn from his observationsmade in the earlier note dated 16.04.99 stating that in the light ofthe representation of the applicant company received from theoffice of Minister of State for Coal and the subsequent clarificationswhich the representatives of the applicant company M/s CTL have


made to him, the coal block though was not included in theidentified list of captive blocks and though also does not conform tothe guidelines already approved by the MOC but can still beexamined in the Screening Committee as the reserves in the saidcoal block as per the applicant company M/s CTL were about2.215 million tonnes. It was also stated that extraction of coal, if iscarried out @ 0.15 MPTA, then the production will work out to about15 years. He also stated that a fresh clearance from CIL can beobtained for including the impugned coal block in the list of captivemines to be allocated. He also stated that the applicant companyhas reworked the investment to be made in the project and from theearlier projected investment of Rs. 120 crores, the same will be onlyto the tune of Rs. 24.25 crores. He further stated that the applicantcompany M/s CTL has engineering workshop at Dhanbad and asteel foundry having induction furnace and arc furnace lying idledue to erratic power supply and the said installation is proposed tobe re-located by the company. He also observed that there is noworking mine belonging to M/s CCL within the vicinity of 2.5 KM andthat CCL does not have any proposal to work in this area and it willbe in the national interest to exploit these reserves rather thanletting them to be lost for ever or letting them to be left for unsafeillegal mining activity. He thus stated that fresh comments from CILcan thus be again sought. On the basis of said note dated 20.05.99of Sh. N.N. Gautam when the file came to the desk of Sh. P.K.Banerjee, Additional Secretary Coal, he not only approved the saidnote made by Sh. N.N. Gautam but also expressed hope that thesize of the mine/reserves will meet the criteria of minimum sizedecided qua allocation of captive coal mining. The file was againmarked to Sh. N.N. Gautam on 31.05.99 and thereafter on 03.06.99Sh. N.N. Gautam again put up a note in the file wherein whilereiterating the claim made by the applicant company M/s CTL in itsfresh representation also observed that CCL/Coal India has noprogramme of working these reserves at any point of time. Hethough again made a reference to the already approved guidelinesof MOC stating that a captive coal block to be allocated by opencast method must have a minimum production of one million tonnesitself per annum but stated that either the reserves should bepermitted to be exploited by private parties with a small productionof 0.15 million tonnes as proposed by the party or the reserve willnever be exploited at all. He again made a reference to his earliernote dated 20.05.99 and proposed that the matter may be put up forconsideration before the Screening Committee. Sh. P.K. Banerjee,Additional Secretary Coal who also was Chairman of ScreeningCommittee approved the said proposal on 04.06.99 and the matterthus came to be put up in the 14th Screening Committee meeting.


Sh. N.N. Gautam was in fact also Member Secretary of theScreening Committee.

4. In the 14th Screening Committee meeting which was held on18.06.99 and 19.06.99, the application of applicant company M/sCTL alongwith that of various other applicant companies came tobe considered. The Screening Committee though mentioned all thefacts, as above but recommended “Brahmadiha” coal block forallocation to applicant company M/s CTL subject to relaxation ofguidelines by MOC regarding allotment of blocks with minimumextraction capacity of 1 MTPA. However the same ScreeningCommittee while discussing the case of another applicant companyM/s OCL India Ltd. observed that as the requirement of coal hasbeen indicated by the company as 0.17 to 0.20 million tonnes perannum only, so applicant company M/s OCL India Ltd. was noteligible for allotment of a captive coal block as it does not fit into thenew guidelines of a captive coal block and accordingly rejected thecase of the company. Subsequently on the basis of the saidminutes of Screening Committee a note was prepared in the fileseeking relaxation of guidelines qua the claim of applicant companyM/s CTL. It was observed by Sh. T.K. Ghosh, Director that asdesired by Additional Secretary orders of the Government may beobtained and that Adviser (P) may like to obtain orders of MOS(Coal) through Secretary Coal. Accordingly the file moved from thedesk of Adviser (P) and Secretary Coal to the office of Minister ofState (Coal) who vide his signatures dated 23.08.99 approved thesame. 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 on01.09.99 by MOC.

5. However subsequently when allegations of wrong doingand corruption were levelled with respect to allocation of variouscoal blocks by Ministry of Coal, the Central Vigilance Commission(CVC) chose to examine all such files and upon getting primafacie satisfied that the matter requires detailedinquiry/investigation, a reference was made to CBI. As per theprocedure adopted by CBI in all such cases a preliminary inquirywas initially registered and when during the course of preliminaryinquiry it was found that the matter qua M/s Castron TechnologiesLtd. warrants detailed investigation, so a regular case wasregistered vide RC No. 221 2014 (E) 0002.

6. It has been stated in the final report that during the course ofinvestigation, it was found that the company M/s CTL while applyinginitially for allotment of a coal block had not even specified the end


use project for which the extracted coal shall be put to use and hadmerely stated that it would be used for washery and for powergeneration. It was also found that despite strong objection raised byCIL and CMPDIL qua allotment of the said coal block, theScreening Committee and Minister of State for coal stronglyproceeded ahead to allot the said coal block in favour of M/s CTL. Itwas also found that one P.K. Agarwalla who not only was a directorof M/s CTL but was also elder brother of applicant Mahender KumarAgarwalla, was a sitting Member of Parliament. Sh. P.K. Agarwallawas also authorised by the company M/s CTL to pursue the matterfor allocation of a coal block for the company with MOC. It was thusfound that the impugned coal block despite being not included inthe identified list of captive coal blocks came to be allocated to M/sCTL on account of a criminal conspiracy hatched between applicantcompany M/s CTL and its director Mahender Kumar Agarwalla, P.K.Agarwalla and other officers of MOC beside the then Minister ofState 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 dated16.04.99 that it may not be possible to allot the abandoned mine toM/s CTL but took a complete u-turn in his note dated 20.05.99without there being any change in circumstances. It was found thaton account of a representation received by Minister of State forCoal from applicant company M/s CTL, the file was again put intomotion and merely on the basis of certain unverified claims madeby the applicant company M/s CTL, the earlier observations madein the files were over-turned by Sh. N.N. Gautam himself. Similarly ithas been stated that Sh. P. K. Banerjee who was AdditionalSecretary Coal and Chairman Screening Committee also took acompletely different view vide his note dated 31.05.99 even thoughhe had earlier approved of the note dated 16.04.99 of Sh. N.N.Gautam whereby the proposal of the applicant company wasproposed to be rejected.

8. It was also found that CIL vide its letter dated 31.05.99 hadhowever again reiterated its views to MOC as were earlierexpressed in its letter dated 16.03.99 regarding non-viability of theimpugned coal block for allocation for the purposes of mining.

9. It has been also stated that even though the coal requirementof the applicant company M/s CTL did not meet the stipulatedguidelines 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 recommendthe case of applicant company M/s CTL subject to relaxation of


guidelines, while at the same time rejected a similar claim ofanother company i.e. M/s OCL India Ltd on the ground that the coalrequirement as indicated by the said company did not fit into thenew guidelines approved by MOC. It has also been stated that onaccount of an active connivance between the MOC officers i.e. Sh.Pradip Kumar Banerjee, the then Additional Secretary, Ministry ofCoal and Sh. Nitya Nand Gautam, the then Adviser (Projects),Ministry of Coal beside Minister of State for Coal Sh. Dilip Ray andthe company M/s CTL and its director Sh. Mahender KumarAgarwalla and P.K. Agarwalla, the impugned coal block eventhough not falling in the identified list of captive coal blocks wasallocated to the company M/s CTL with a view to cheat Governmentof India of its important nationalised natural resources i.e. coal.During the course of investigation, it was also found that afterallocation of impugned coal block, company M/s CTL startedextracting coal illegally even without grant of any mine openingpermission by the concerned authorities. It has been also statedthat though the coal block was allocated for captive use only but theimpugned coal block came to be allocated to M/s CTL without therebeing any end use project to be established by the company. In factthe illegal extraction of coal was also stated to have been startedwithout any steps having been taken towards setting up of any suchend use project.

10. It has been further stated in the final report that during thecourse of investigation, it was found that in the year 1999 itself afamily settlement was arrived at between Mahender KumarAgarwalla, P.K. Agarwalla and their two other brothers namely D.K.Agarwalla and Y.K. Agarwalla. As per the said family settlement, thecoal mine which was to be allocated in favour of M/s CTL was tostand transferred to P.K. Agarwalla. Accordingly all the shares ofM/s CTL stood transferred in favour of Mahender Kumar Agarwallaand his family members while the coal bock so allocated stoodtransferred in favour of another company namely M/s CastronMining Ltd. (M/s CML) of P.K. Agarwalla. It was also found that M/sCML was also involved in illegal extraction of coal from theimpugned coal block without signing of a mining lease or obtainingmine opening permission. It has been stated that on 01.05.04, M/sCTL had applied for mine opening permission through M.K.Agarwalla and the same came to be issued in favour of M/s CTL on15.02.05. However M/s CML in its monthly returns submitted toDistrict Mining Officer in the month of February 2005 had showncoal having been extracted from the coal block to the tune of 3195tonne. Thus it was found that Sh. P.K. Agarwalla in conspiracy withother accused persons was intensely pursing the case of M/s CTL


for allotment of a coal block in its favour knowing fully well that uponallocation, the coal block would stand transferred to his companyM/s CML and that they will sell the extracted coal block to othercompanies so as to earn undue profit.

11. It has been thus stated that all the aforesaid personsconspired together to cheat MOC for the purposes of allocating acaptive coal block in favour of the company.

[Note: The detailed facts and circumstances including variouscommunications made by company M/s CTL or the notings made by theaccused persons beside the correspondence exchanged between MOC, CIL,CMPDIL and CCL shall be dealt with in detail at a later stage of the presentjudgment.]

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.


(B) Charges Framed

S.No Name of accused

CHARGES FRAMED

(I)Charges Common to all

(II)Charges

separatelyframed

1 A-1 M/s Castron Technologies Ltd. (M/s CTL)

(i) 120-B IPC

(ii) u/s 120-B/409/420 IPC and Section 13 (1) (c) and 13 (1) (d) P.C. Act, 1988

420 IPC; 379/34IPC

2 A-2 Mahendra Kumar Agarwalla

(i) 120-B IPC


420 IPC; 379/34IPC

3 A-3 M/s Castron Mining Ltd. (M/s CML)

_________ 379/34 IPC

4 A-4 Dilip Ray (i) 120-B IPC


(i) Sec. 409 IPC

(ii) 13 (1) (c) / 13 (1) (d) P.C. Act,1988

5 A-5 Pradip Kumar Banerjee

(i) 120-B IPC


13 (1) (d) P.C. Act,1988

6 A-6 Nitya Nand Gautam

(i) 120-B IPC(ii) u/s 120-B/409/420 IPC and Section 13 (1) (c) and 13 (1) (d) P.C. Act, 1988

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


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


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) EvidenceC (i) Prosecution Witnesses

PWNo.

Name and designation ofthe Witness

Deposition/Role of witnesses examined in the present case.

1 Sh. Sushil DewanInspector, EO-III, CBI, New Delhi.

On 08.01.2014 he had led a CBI team to carry outsearch at the office of M/s Castron Mining Limited inKolkata. He accordingly proved the documents whichwere collected by his team during the course of saidsearch operation vide search list Ex. P-80 (D-2).

2 Sh. Parsana KumarSP, CBI, ACB, Kolkata.

On 08.01.2014 he had led a CBI team to carry outsearch at the residence of Mahendera KumarAgarwalla at Dhanbad. He accordingly proved thedocuments which were collected by his team during thecourse of said search operation vide search list Ex. P-6(D-21).

3 Sh. Tej Pal SinghDy. SP. EO-III, CBI, New Delhi.

On 08.01.2014 he had led a CBI team to carry outsearch at the corporate office of M/s Castron MiningLimited in Mumbai. He accordingly proved thedocuments which were collected by his team during thecourse of said search operation vide search list Ex. P-85 (D-11).

4 Bimbhadhar PardhanAdditional Secretary, Ministry of Home Affairs, Government of India

During the period 14.03.1998 till 14.10.1999 he wasposted as Private Secretary to the then Minister ofState for Coal, Government of India, Dilip Ray (A-4).He primarily deposed about letter dt. 21.04.1999 [Partof Ex. P-14 (D-36)] of M/s Castron Technologies Ltdhaving been received in the office of Minister of Statefor Coal on 12.05.1999 and stated that the same wasmarked by A-4 Dilip Ray to Secretary (Coal) with thedirection to re-examine the matter in the light ofrepresentation received from M/s Castron TechnologiesLimited.


5 Sh. Krishna Kumar KhadiyaRetired Director, P&D, CMPDIL.

During the period October 1997 till May 2000 he wasposted as Director (Technical), CMPDIL. He deposedabout processing of application dated 09/05/98 of M/sCastron Technologies Ltd in CMPDIL seekingidentification of Brahmadiha coal mine as was receivedfrom CIL. He accordingly proved the comments, whichwere submitted by CMPDIL to CIL with a copy havingbeen marked to MOC.

6 Sh. Sudhir Kumar VarmaRetired CMD CCL.

During the period 1998-99 he was working as CMD,CMPDIL. He also proved the comments which weresent on behalf of CMPDIL on the application dt.09/05/98 of M/s Castron Technologies Limited seekingallocation of Brahmadiha coal block after the saidapplication was received from CIL for examination andcomments.

7 Sh. Balswamy AkalaRetired CMD, CMPDIL

During the period November 1997 till December 2000he was posted as CMD, CCL. He also proved thecomments which were sent on behalf of CCL on theapplication dated 09/05/98 of M/s CastronTechnologies Limited seeking allocation of Brahmadihacoal block after the said application was received fromCIL for examination and comments.

8 Sh. Vivek Varun PrasadRetired Principal Director General Income Tax

During the period 1998-99 he was posted as Director(Investment Promotion Cell), Ministry of Power,Government of India. He stated that the application ofM/s Castron Technologies Limited received by Ministryof Power from MOC was got examined from CEA and itwas finally conveyed to MOC that as the proposal is foridentification of coal mine area for captive mining andas such CEA has no comments to offer.

9 Sh. Rajinder Paul GuptaRetired General Manager, Western Coalfield Ltd.

After having retired as General Manager, WesternCoalfield Ltd in August 1996 he had joined CentralCollieries Ltd in June 1998, a private coal company,owned by Sh. Govind Daga. He deposed that in thename of one other company namely Central Utilitiesand Investment Ltd which was also got incorporated bySh. Govind Daga in the year 1998, an application forseeking allocation of captive coal block was submittedunder his signatures to MOC. He also appeared onbehalf of applicant company before 14th ScreeningCommittee for making presentation but stated that no


coal block was allotted to their company as theircompany had not provided any information aboutlinkage of washed coal towards captive use in anypower plant.

10 Sh. Gedela Sasibhusana RaoRetired DGM (Legal), OCL.

He was an officer of a company M/s OCL India Ltd. Hedeposed that in 1999 his company M/s OCL India Ltdhad applied for allocation of a captive coal block for usein its cement and refractories and the total coalrequirement was stated as 14000 MT to 17000 MT permonth. He however stated that no coal block wasallotted to their company by 14th Screening Committee.

11 Sh. J. Hari NarayanRetired Chairman IRDA.

In the year 1999 he was posted as Joint Secretary,MOC, Government of India. He deposed that underCoal Mines Nationalization Act, it was specificallyprovided that captive coal blocks could be allocated toonly such companies which were engaged in specifiedend use i.e. generation of power, iron and steel andcement. He further stated that M/s CastronTechnologies Limited and M/s Central Utilities andInvestments Limited were seeking allocation of coalblocks only for use in their washeries and that theywere not engaged in any of the specified end use aswas provided under the Act.

12 Sh. Ravi Ranjan MishraJoint Secretary,Department of Energy, Government of Jharkhand

During the period February 2015 till December 2015 hewas posted as Joint Secretary, Department of Energy,Government of Jharkhand at Ranchi. In September andNovember 2015 he had informed CBI in response totheir query that no proposal was received from M/sCastron Technologies Ltd to establish the captivepower plant in District Giridih either in Department ofIndustries, Government of Jharkand by Jharkhand UrjaSanchran Nigam Ltd or in Department of Energy.

13 Sh. PK SinghAdditional Director General in Directorate of Revenue Intelligence

In December 1998 he was posted as Dy. Secretary inMinistry of Power, Government of India. He alsodeposed that Ministry of Power had responded to MOCas regard the application of M/s Castron Technologiesthat as the proposal is for identification of coal miningarea for captive mining and thus CEA has nocomments to offer. He had also attended 14th

Screening Committee meeting on 18/6/1999 and19/6/1999 as was Chaired by A-5 P.K. Banerjee and


stated that in the meeting the stand of Ministry ofPower as regard the proposal of M/s CastronTechnologies Ltd remained the same.

14 Ms. Neera SharmaDy. Secretary, Department of Investments and Public Assets Management.

During the period 1984 till 2007 she was posted inMOC on different posts. In the year 1998-99 she wasposted as Section Officer, CPAM Section, MOC. Sheproved various files of MOC as were maintained inCPAM Section with respect to coal block allocationmatters. She specifically deposed about processing ofapplication dt. 09.05.1998 of M/s Castron TechnologiesLtd as was received in MOC and the subsequentproceedings whereby comments were received fromCIL, CMPDIL, CCL and other concerned entities. Shealso deposed that subsequently 14th ScreeningCommittee had allotted Brahmadiha coal block infavour of M/s Castron Technologies Ltd and afterprocessing of the same, necessary allocation letter wasissued in favour of the company. She thus provedcomments of various officials of CPAM Section andother senior officers of MOC as were there in the filesof MOC. She also deposed about the subsequentcommunications received from M/s CastronTechnologies Ltd in MOC after allocation of captiveblock was made in favour of the company including theapproval of mining plan.

15 Sh. Naresh Kumar SharmaRetired Chairman, CoalIndia Limited.

During the period 1998-99 he was working as Director(Technical) Coal India Ltd at Kolkata. He deposedabout processing of application of M/s CastronTechnologies Ltd in CIL after the same was receivedfrom MOC for examination and comments. He alsodeposed about comments received from CMPDIL andCCL on the said application and about othercommunications exchanged between CIL and MOC.

16 Sh. Sibabrata BhattacharyaRetired Dy. Chief Geologistfrom CCL

During the period 1997-98 he was posted as Dy. ChiefGeologist in Central Coalfield Ltd, at DarbhangaHouse, Ranchi. He deposed that Brahmadiha patchwas situated in Giridih coalfield of CCL and stated thathe had studied the old geological report and the oldrecords of geological survey of India. He hadaccordingly submitted a report pointing out variousreasons on the basis of which the said patch could nothave been identified for allocation as a captive coal


block. He accordingly proved the comments submittedin this regard by him to his senior officers in CCL.

17 Sh. K. Ravi KumarDirector Industries, Government of Jharkhand

In December 2015 he was posted as Director(Industries), Government of Jharkhand. He deposedthat in December 2015 he had provided information toCBI that M/s Castron Technologies Ltd had notsubmitted any proposal of 2x5 MW captive power plantfor Giridih, Jharkhand and that no proposal was evenreceived for transmission of power to the industriesdepartment.

18 Sh. Santosh Kumar KakkarRetired Dy. Secretary, MOC

He was posted in MOC during the period December1999 till 30.04.2007 as Under Secretary in CA Section.He had dealt with the matter relating to allocation ofBrahmadiha coal block to M/s Castron TechnologiesLtd in April/May 2002 i.e. during the post allocationstage. He accordingly proved the said proceedings aswere undertaken in MOC including the correspondenceexchanged between MOC and M/s CastronTechnologies Ltd as regard the status of opening ofcoal mine by the company.

19 Sh. Upendra Narayan SinghretiredAssistantMining Officer

He was Assistant Mining Officer in District MiningOffice, Giridih, Jharkhand. During the course ofinvestigation he had provided records relating to mineopening permission granted to M/s CastronTechnologies Ltd by the office of District Mining Office.Subsequently, on 10.10.2015, he was part of a teamcomprising CBI officers and officers of the office of coalcontroller and coal India Ltd. which had carried outmeasurement of coal lying extracted at the mine site ofM/s CTL there. He accordingly proved the necessaryrecord in this regard.

20 Sh. Kamleshwari DassDeputy DirectorMines

During the period 25.07.2001 till 13.12.2004 he wasposted as District Mining Officer, Giridih. He deposedabout the proceedings which took place in his officequa execution of mining lease deed by M/s CastronTechnologies Ltd and proved the relevant documents,as were available in file Ex. PW 19/C (Colly) (D-54) ofthe office of District Mining Officer, Giridih.

21 Sh. Shyam Nandan PD

During the period 14.06.2005 till 19.11.2005 he wasposted as District Mining Officer, Giridih. He deposed


VidyahartiAssistantDirector(Geology)

that on the directions of Dy. Commissioner, Giridih, hehad carried out verification qua establishing the coalwashery and power plant by M/s Castron TechnologiesLtd and had submitted his report to Dy. Commissioner,Giridih. He accordingly proved the various documentsas were available in file Ex. PW 19/D (Colly) (D-55) ofthe office of District Mininig Officer, Giridih.

22 Sh. Amrita Acharyaretired CoalController

In the year 2011 he was initially posted as OSD in theoffice of Coal Controller and subsequently he wasworking as Coal Controller till his retirement in June2015. During the course of investigation of the presentcase he had provided various documents/files availablein his office relating to M/s Castron Technologies Ltd toCBI.

23 Sh. Prem Raj Kuarretired Dy.SecretaryDepartment ofConsumerAffairs

He was posted in MOC as Assistant from June 1990 tillJanuary 1996 and thereafter till September 2006 hewas posted as Section Officer, CA Section, MOC. Heproved the proceedings regarding constitution ofScreening Committee in MOC and also theproceedings relating to approval of mining plan of M/sCTL after allocation of impugned coal block in its favourby 14th Screening Committee.

24 Sh. Sunil Kumarsurveyor,Department ofMines andGeology

In the year 2014 he was posted as Mine Inspector atDistrict Mining Office, Giridih. He was also a member ofthe team which had measured the coal stock lying atBrahmadiha coal mine of M/s Castron TechnologiesLtd. He accordingly proved the report Ex. P-108 (Colly)prepared in this regard, which was also signed by himbeside other members of the team.

25 Sh. Ashok Jain. He was a Director of a Mining company called SaumyaMining Ltd based at Kolkata. He deposed that in theyear 2004-05 his company had provided variousmachines on hire basis to M/s Castron TechnologiesLtd at Giridih, Jharkhand for carrying out miningactivities. During the course of investigation he hadprovided all such relevant documents to CBI andaccordingly proved the same during the course of hisdeposition.

26 Sh. Raj Kumar Sachdev

During the period April 1992 till April 1996 he wasworking as Advisor (projects) in MOC. He deposed


retired Advisor(Projects),Ministry of Coal

about the circumstances in which CMN Act 1973 cameto be amended by way of CMN (Amendment) Act, 1993and whereby coal blocks for captive use were decidedto be allocated to private sector companies engaged inspecified end use. He also deposed about variouscommunications which were undertaken between MOCand CIL or its subsidiary companies regardingidentification of coal blocks which could be allocated toprivate sector companies for their captive use inspecified end uses.

27 Sh. Deepak R. HandaSeniorScientificOfficer, CFSL,CBI.

He was a handwriting expert posted in CFSL, CBI. Hehad examined various questioned documents as weresent to him by CBI along with certain specimensignatures of Mahendra Kumar Agarwalla. Heaccordingly proved his report dated 18.12.2016 Ex. PW27/B (part of D-263) opining that the questionedsignatures were that of the person whose specimensignatures were provided to him.

28 Sh. Suman MajumdarUnderSecretary,Ministryof Power

He was working as Under Secretary, Ministry of Powersince August 2011. In September 2015 on the requestof CBI he had provided certain records of his Ministryrelating to the present case.

29 Sh. Ashok Kumar SinghretiredAssistantMining Officer

During the period November 2004 till May 2005 he wasposted as District Mining Officer In-Charge Giridih,Jharkhand. He had carried out inspection of the minearea allotted to M/s Castron Technologies Ltd anddeposed that in the leasehold area he had found 3500tonnes of mineral lying. He also deposed that everycompany engaged in mining of coal is required tosubmit a monthly report about the coal extracted anddispatched from the site. He thus provided to CBIvarious such reports submitted by M/s CastronTechnologies Ltd and subsequently by M/s CastronMining Ltd.

30 Sh. Bhartendu Rairetired MiningConsultant

He was an employee of M/s Castron Technologies Ltdduring the period December 2002 till December 2004.Subsequently, from January 2005 till January 2009 hejoined M/s Castron Mining Limited. He deposed aboutvarious communications undertaken by M/s Castron


Technologies Ltd with the office of Coal Controller andDirector General of Mine Safety with respect toexecution of mine lease and obtaining mine openingpermission. He also deposed that extraction of coalfrom Brahmadiha coal mine started in June 2005 andthat subsequently monthly reports of stock of coal weresubmitted to the office of District Mining Officer, Giridih.

31 Sh. B.B. SinghAdditionalDirector(Mines),Department ofIndustries,Mines andGeology,Government ofJharkhand.

From December 1999 he was posted as Dy. Director(Mines), Ranchi and thereafter in July 2000 he wasgiven additional charge of Additional Director (Mines).He was also posted in the said department in the year2005 and thereafter from year 2007 on-wards. Duringthe course of investigation of the present case, he hadprovided various records from his office relating to M/sCastron Technologies and Brahmadiha Coal Block toCBI.

32 Inspector Pawan Kaushik

He was the Investigating Officer of the case. Hedeposed extensively about the investigation carried outby him and also about the collection of variousdocuments from different authorities by him during thecourse of investigation and proved the final report ofthe investigation prepared by him.

C (ii) PROSECUTION WITNESSES WHOSE EXAMINATION-IN-CHIEF WAS LEDBY PROSECUTION BY WAY OF AFFIDAVIT U/S 296 Cr.PC BUT ACCUSED

PERSONS CHOSE NOT TO CROSS-EXAMINE THEM.

PWNo.

Name and designation ofthe Witness

Deposition/Role of the witness in the present case.

1 S.N. KhanAddl. Superintendentof Police, CBI, EO-III, New Delhi

On 08.01.2014 he led a CBI team to carry out search atthe office premises of M/s Castron TechnologiesLimited at Kolkata and he accordingly proved thesearch list prepared in this regard by him beside alsodeposing about the documents collected during thesearch operation.

2 A. SanjaySahayUnder

During the course of investigation he had provided theMinutes of 21st and 24th meeting of Inter-MinisterialGroup (IMG) which had recommended de-allocation of


Secretary, CA-1 Section,Ministry of Coal

Brahmadiha Coal Block in favour of M/s CastronTechnologies Ltd.

3 Kishore KumarUnder Secretary, CA-1 Section, Ministry of Coal

During the course of investigation, he had providedcertain documents and notings of MOC files pertainingto the period when amendments were being introducedin CMN Act, 1973.

4 Sunit KumarPal,Dy. Supdt. ofPolice,EconomicOffences-III,CBI, NewDelhi.

During the course of PE No. 219 2012 E 0004 EO-I,New Delhi, he had collected various files/documentsfrom MOC by way of different production-cum-seizurememos and he accordingly deposed about the same.

5 ArindamSarkar,Manager,InternalServices,StandardCharteredBank, Kolkata.

During the course of investigation he had providedrecords pertaining to account held in their bank by M/sSaumya Mining Ltd.

6 Debasis Nag,Chief Manager(Mining), CoalIndia Ltd.

During the course of investigation, he had provided toCBI records from his office relating to Brahmadiha CoalBlock in District Giridih as was allotted to M/s CastronTechnologies Ltd., by MOC.

7 U.K. Tripathi,Chief Manager(Geology) CCL(HQ),DarbangaHouse, Ranchi.

During the course of investigation, he had provided toIO records from his office relating to Brahmadiha CoalBlock in District Giridih as was allotted to M/s CastronTechnologies Ltd., by MOC.

8 A. Ravishankar,GeneralManager (CT & Labs),CoalTechnology &Lab Division ofCMPDIL,

During the course of investigation, he had provided toIO records from his office relating to Brahmadiha CoalBlock in District Giridih as was allotted to M/s CastronTechnologies Ltd., by MOC.


Ranchi.

9 Ashok KumarChaudhary,Director,CastronTechnologiesLtd, Jharkhand.

He had also provided to CBI documents relating toBrahmadiha Coal Block in District Giridih allotted to M/sCastron Technologies Ltd, as were available with thecompany.

10 Subhas SurinChief Manager(Geology)CMPDIL,Dhanbad.

He had also provided to CBI documents available intheir office relating to Brahmadiha Coal Block in DistrictGiridih allotted to M/s Castron Technologies Ltd.

11 K.N.Vishwakarma,SuperintendentCentral Excise,Jharkhand.

During the course of investigation he had providednecessary information relating to M/s CastronTechnologies Ltd, M/s Castron Mining Limited and M/sFoundry Fuel Private Limited to the IO from the recordsavailable in their office.

12 SanjibBhattacharya,UnderSecretaryin Estt./ASOSection,Ministry of Coal

During the course of investigation he had providednecessary information from his office records to CBIvide his letter dated 06.07.2015.

13 Manoj KumarAGM, ProjectFinance, StateBank of India,Ballard Estate,Fort, Mumbai

In response to CBI request, he had sent certified truecopy of Account Opening Form of M/s Saumya MiningPvt Ltd A/c No. 01050070022; (ii) certified copy ofMemorandum and Articles of Association andstatement of account no. 01050070022 from August2004 to March 2006, to Inspector of Police, CBI, EO-III,New Delhi.

14 Dileep KumarManager, SBI,JainagarBranch,Kodarma,Jharkhand.

He had also produced documents to IO InspectorPawan Kumar Kaushik, CBI, EO-III, New Delhi, videletter dated 07.11.2015 pertaining to M/s CastronMining Ltd., And M/s Saumya Mining Ltd as wereavailable in their bank records.

15 E. Jaya KumarDirector ofMines Safety,Kodarma

In pursuance to CBI letter dated 09.06.2014, he videletter dated 09.06.2014 addressed to Inspector PawanKumar Kaushik provided the requisite information.


Region Camp,Dhanbad.

16 S.N. UpadhyaySecretary,BokaroIndustrial AreaDevelopmentAuthority,BIADABhawan,Balidih, Bokaro

In pursuance to CBI Email dated 11.03.2015, he videletter dated 04.11.2015 addressed to Inspector PawanKumar Kaushik provided the requisite information.

17 Subir MajumderGeneral Manager (Geology), CIL.

He had produced one file of Coal India Limitedcontaining copies/originals of documents relating to M/sCastron Technologies Ltd (Brahmadiha Coal Block)without any note sheet portion, before Inspector PawanKumar Kaushik.

18 Binay KumarElectrical Superintending Engineer, Electric Supply Circle, Dhanbad, Jharkhand

In pursuance to CBI letter dated 10.10.2015 he videletter dated 20.10.2015 provided the requisiteinformation to IO Inspector Pawan Kumar Kaushik.

19 B. DasGM, District Industry Centre, Dhanbad.

During the course of investigation in response to CBIletter dated 10.10.2015 he had provided necessaryinformation vide letter dated 28.10.2015 to IO InspectorPawan Kaushik.

C (iii) Defence Witnesses

DWNo.

Name and designationof the Witness

Deposition/Role of the witness in the present case.

1 Sh. Sanjib BhattacharyaUnder Secretary,BA/EstablishmentSection, MOC, GOI(examined on behalf ofA-5 P.K. Banerjee)

He was posted as Under Secretary,BA/Establishment Section, Ministry of Coal,Government of India. He produced the recordregarding posting of accused P.K. Banerjee inMOC and his relinquishing the charge witheffect from 22.07.1999.


2 Sh. Dominic DungdungUnder Secretary, CBA-I/CMPF Section, MOC,GOI(examined on behalf ofA-4 Dilip Ray)

He was Section Officer in MOC, Governmentof India since the year 2014. He produced theMinutes of second meeting of ScreeningCommittee held on 13.08.93; Minutes of tenthmeeting of Screening Committee held on3.4.96; Minutes of thirteenth meeting ofScreening Committee held on 24.8.98;Record note of fifteenth meeting of ScreeningCommittee held on 6.3.2000; Record note ofeighteenth meeting of Screening Committeeheld 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


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


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


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


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.No.

Title Citation

1 Choudhury Parveen Sultana Vs. State of West Bengal and Another

CA 8 of 2009 @ SLP (Crl.) No. 2864 of 2007

2 Inspector of Police and Another Vs. Battenapatla Venkata Ratnam And Another

(2015) 13 SCC 87

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 & Ors.

1971 (2) SCC 452

8 Rajiv Kumar V. State of U.P. & Anr. 2017 Cri. L. J. 4734

9 Haraprasad Ghosh V State of West Bengal & Anr.

2018 Cri. L. J. 3815

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


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


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:-


S.No. Case title Citation

1 Manohar Lal Sharma Vs. The Principal Secretary & ors.

(2014) 9 SCC 516

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


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.


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


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


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:



1 State of Punjab Vs. Sarwan Singh (1981) 3 SCC 34

2 K. Hanumantha Rao Vs. K. Narasimha Rao & Ors.

1982 CriLJ 734

3 Chandi Kumar Das Karmarkar and Another Vs. Abanidhar Roy

AIR 1965 SC 585

4 The Superintendent of Stamps, Bombay Vs. Maharashtra Sugar Mills Ltd.

ILR 1951 Bom 226

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 Investments and Holdings Limited & Others

Criminal No. 875 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


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


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:


1 S.K. Kale Vs. State of Maharashtra (1997) 2 SCC 394

2 S.P. Bhatnagar Vs. State of Maharasthra (1979) 1 SCC 535


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. State of Gujarat

(2014) 4 SCC 156

8 Arun Kumar Agrawal Vs. Union of India (2013) 7 SCC 1

9 Narendra Kumar Maheshwari Vs. Union of India & Ors.

(1990) Supp SCC440

10 Centre for Public Interest Litigation Vs. Union of India

(2016) 6 SCC 408

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 Maharashtra & Ors.

(2011) 1 SCC 694

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


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


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 14 th 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


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 14 th 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,


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:


1 N.K. Ganguly Vs. CBI, New Delhi (2016) 2 SCC 143

2 Surinderjit Singh Mand and Another Vs. State of Punjab & Anr.

(2016) 8 SCC 722

3 R. Balakrishna Pillai Vs. State of Kerala & Anr.

(1996) 1 SCC 478

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 and Others

(2009) 8 SCC 617

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


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


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


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 14 th 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.


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:


1 Shreekantiah Ramayya Munipalli Vs. State of Bombay

(1995) 1 SCR 1177


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 through CBI

(2016) 2 SCC 87

(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


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 HighCourt we would like to cite a few decisions on the nature,character and essential proof required in a criminal casewhich rests on circumstantial evidence alone. The mostfundamental and basic decision of this Court is Hanumant V.State of Madhya Pradesh [1952] SCR 1091. This case hasbeen uniformly followed and applied by this Court in a largenumber of later decisions up-to-date, for instance, the casesof Tufail (Alias) Simmi v. State of Uttar Pradesh [1969] 3,SCC 198 and Ramgopal v. State of Maharashtra AIR, 1972SC 656. It may be useful to extract what Mahajan, J. has laiddown in Hanumant case : It is well to remember that in cases where theevidence is of a circumstantial nature, the circumstancesfrom which the conclusion of guilt is to be drawn should inthe first instance be fully established, and all the facts soestablished should be consistent only with the hypothesis ofthe guilt of the accused. Again, the circumstances should beof a conclusive nature and tendency and they should besuch as to exclude every hypothesis but the one proposed tobe proved. In other words, there must be a chain of evidenceso far complete as not to leave any reasonable ground for aconclusion consistent with the innocence of the accused andit must be such as to show that within all human probabilitythe act must have been done by the accused. 153. A close analysis of this decision would show that thefollowing conditions must be fulfilled before a case againstan accused can be said to be fully established: (1) the circumstances from which the conclusion of guilt isto be drawn should be fully established. It may be noted here that this Court indicated that thecircumstances concerned 'must or should' and not 'may be'established. There is not only a grammatical but a legaldistinction between 'may be proved' and "must be or shouldbe proved" as was held by this Court in Shivaji SahabraoBobade v. State of Maharashtra [1973] 2 SCC 793, wherethe following observations were made : [SCC para 19, p. 807: SCC (Cri) p. 1047]


Certainly, it is primary principle that the accused mustbe and not merely may be guilty before a court can convictand the mental distance between 'may be' and 'must be' islong and divides vague conjectures from sure conclusions. (2) the facts so established should be consistent only withthe hypothesis of the guilt of the accused, that is to say, theyshould not be explainable on any other hypothesis exceptthat the accused is guilty, (3) the circumstances should be of a conclusive natureand tendancy, (4) they should exclude every possible hypothesis exceptthe one to be proved, and(5) there must be a chain of evidence so complete as notto leave any reasonable ground for the conclusion consistentwith the innocence of the accused and must show that in allhuman probability the act must have been done by theaccused. 154. These five golden principles, if we may say so,constitute the panchsheel of the proof of a case based oncircumstantial 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


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 14 th Screening


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 neareach other on opposite sides. The precise course of the linemay be uncertain, but no one can come near it withoutknowing that he does so, if he thinks, and if he does so it isfamiliar to the criminal law to make him take the risk."


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 blocksstood allocated to private companies in pursuance of ScreeningCommittee’s recommendations during the period from the 1st

meeting held on 14.07.1993 till the 21st meeting held on19.08.2003. For the period from 04.11.2003 (22nd meeting) to18.10.2005 (30th meeting) in pursuance of ScreeningCommittee’s recommendations, 26 coal blocks stood allocatedto private companies. Following 32nd meeting held on29.06.2006/30.06.2006 till the 34th meeting on07.09.2006/08.09.2006, in pursuance of the recommendationsmade by the Screening Committee, two coking coal blocks


were allocated to private companies and twelve non-cokingcoal blocks were allocated to private companies. In pursuanceof the recommendations made by the Screening Committee in35th and 36th meetings, 33 coal blocks were allocated to privatecompanies. Some of the coal block allocations made to theprivate companies have been de-allocated from time to time.For consideration of legality and validity of allocations made tosuch companies, it is not necessary to deal with de-allocationaspect. It needs no emphasis that assuming that the CentralGovernment had power of allocation of coal blocks yet suchpower should have been exercised in a fair, transparent andnon-arbitrary manner. However, the allocation of coal blocks tothe private companies pursuant to the recommendations madeby the Screening Committee in 36 meetings suffers fromdiverse infirmities and flaws which may be summarized asfollows:

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 betweenthe applicants for the same block. As a matter of fact, for the 21coal blocks allocated to private companies in pursuance ofScreening Committee’s recommendation during the first period,inter se priority or merit of the applicants for the same block had notat all been determined.2. The guidelines do not contain any objective criterion fordetermining the merits of the applicants. The guidelines do notprovide for measures to prevent any unfair distribution of coal in thehands of few private companies. As a matter of fact, no consistentor uniform norms were applied by the Screening Committee toensure that there was no unfair distribution of coal in the hands ofthe applicants.

3. The Screening Committee simply relied upon the informationsupplied by the applicants without laying down any method to verifyapplicant’s experience in the end-use project for which allocation ofcoal block was sought. The guidelines also do not lay down anymethod to allot coal blocks as per the end-use projects coalrequirement.

4. The Screening Committee kept on varying the guidelines frommeeting to meeting. It failed to adhere to any transparent system.

5. No applications were invited through advertisement and thus the


exercise of allocation denied level playing field, healthy competitionand equitable treatment.

6. Certain coal blocks which did not fit into the criteria of captiveblocks were decided to be allocated by applying peculiar approachthat the reserves could either be permitted to be explored by aprivate party or lost forever. For example, Brahmadiha block wasallocated 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 sorecommended 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 ofOrissa of 1.2 million tonnes of capacity for which the requirement of2.2 m.t. of raw coal has been indicated, was discussed. The partyrequested for Utkal-B2 block in Talcher coalfield having 106 m.t. ofreserves. CMD, MCL was of the view that Chendipada block islikely to have better grade of coal and suggested to the party forpreference of Utkal B-2 block. However, the party insisted for UtkalB-2 block and the same was allotted. Similarly, as regards theproposal of M/s. Jayaswal Neco Ltd. for their Sponge Iron Plant,the party had earlier requested for Gare-Palma IV/6 and IV/7blocks for meeting their requirement of 1 m.t. Sponge Iron Plantand a captive power plant. Then they requested for allocation ofGare-Palma IV/4 and IV/8 blocks. On the representation made bythe representative of the party that 125 m.t. of reserves in Gare-Palma IV/4 block will be adequate for meeting the requirement oftheir Sponge Iron Plant for a period of 30 years and 91 m.t. ofreserves in Gare-Palma IV/8 block will be adequate for 30 years lifeof the proposed CPP, the Screening Committee recommendedallocation of Gare-Palma IV/4 and IV/8 blocks to M/s. JayaswalNeco Ltd. The representation made by the party was accepted as itis without any verification.8. Certain blocks with coal reserves on the higher side wererecommended to the companies with lower requirement. Therewere no steps or measures taken to prevent possible misuse ofend-use project of private companies. For example, M/s. PrakashIndustries Limited, being a BIFR company, was denied coal blockearlier. However, the Screening Committee recommended Chotia Iand II coal blocks to M/s. Prakash Industries Limited in 2003 for itsproposed expansion project of 0.4 MTPA Sponge Iron though thecompany was having capacity of only 0.3 MTPA.9. Some coal blocks which were already identified for development


by CIL were offered to the private companies and some of theblocks which were close to the projects of CIL were, in fact,recommended for allocation and ultimately allocated. This wasclearly 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 theparticulars showing consideration of each application forallocation of 23 coal blocks earmarked for non-power sector.There is nothing in the minutes to indicate how and in whatmanner the selected companies meet the norms fixed for interse priority. Many of the selected companies were neitherrecommended by the State Government nor by theAdministrative Ministry. Some of them were recommended bythe State Government but not recommended by theAdministrative Ministry while one of them was notrecommended by the State Government but recommended bythe Administrative Ministry. Many companies which had failed tosecure allocations earlier yet they were recommended. TheScreening Committee failed to consider capability and capacity


of the applicant in implementing the projects.

151. The entire exercise of allocation through ScreeningCommittee route thus appears to suffer from the vice ofarbitrariness and not following any objective criteria indetermining as to who is to be selected or who is not to beselected. There is no evaluation of merit and no inter secomparison of the applicants. No chart of evaluation wasprepared. The determination of the Screening Committee isapparently subjective as the minutes of the ScreeningCommittee meetings do not show that selection was made afterproper assessment. The project preparedness, track recordetc., of the applicant company were not objectively kept inview.”

(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


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 andRegulation) Act 1957 (MMDR Act, 1957), Coal Mines (Taking over ofManagement) 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 14 th


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


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:


Order dated 25.08.2014 (Para No. 12-41):

“12. It is appropriate that we first notice the statutory frameworkrelevant for the issues under consideration. The Mines and Minerals(Development and Regulation) Act, 1948 (for short, ‘1948 Act’) wasenacted to provide for the regulation of mines and oil fields and forthe development of the minerals under entry 36 of the Governmentof India Act, 1935. It received the assent of the Governor General on08.09.1948 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 Listentry 54 provides for regulation of mines and mineralsdevelopment to the extent to which such regulation anddevelopment under the control of the Union is declaredby Parliament by law to be expedient in the publicinterest. On account of this provision it becameimperative to have a separate legislation. In order toprovide for the regulation of mines and the developmentof minerals, the Mines and Minerals (Regulation andDevelopment) Bill was introduced in the Parliament.”

14. 1957 Act has undergone amendments from time to time. Section 2of 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 ofmines 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 shallbe under licence or lease. Sub-section (2) provides that noreconnaissance permit, prospecting licence or mining lease shallbe granted otherwise than in accordance with the provisions of theAct 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 suchpurpose;(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 anyother 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;”


17. Section 5 is a restrictive provision. The provision mandates thatin respect of any mineral specified in the First Schedule, noreconnaissance permit, prospecting licence or mining lease shall begranted except with the previous approval of the CentralGovernment. Coal and Lignite are at item no.1 in Part A under thetitle “Hydro Carbons/Energy Minerals” in the First Scheduleappended to the 1957 Act.18. Section 6 provides for maximum area for which a prospectinglicence or mining lease may be granted. Section 7 makes provisionsfor the periods for which prospecting licence may be granted orrenewed and Section 8 provides for periods for which mining leasesmay be granted or renewed. Section 10 provides that application forreconnaissance permit, prospecting licence or mining lease inrespect of any land in which the minerals vest in the Governmentshall be made to the State Government concerned, inter alia, itempowers the State Government concerned to grant or refuse togrant permit, licence or lease having regard to the provisions of the1957 Act or the Mineral Concession Rules, 1960 (for short ‘1960Rules’).19. Section 11 provides for preferential right of certain persons. Sub-section (1) of Section 11 makes a provision that where areconnaissance permit or prospecting licence has been granted inrespect of any land, the permit holder or the licensee shall have apreferential 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 andcertain conditions as provided therein. Sub-section (2) of Section 11says that where the State Government does not notify in the OfficialGazette the area for grant of reconnaissance permit or prospectinglicence or mining lease and two or more persons have applied for areconnaissance permit, prospecting licence or a mining lease inrespect of any land in such area, the applicant whose applicationwas received earlier, shall have a preferential right to be consideredfor such grant over the applicant whose application was receivedlater. This is, however, subject to provisions of sub-section (1). Thefirst proviso appended thereto enacts that where an area is availablefor grant of reconnaissance permit, prospecting licence or mininglease and the State Government has invited applications bynotification in the Official Gazette for grant of such permit, licence orlease, the applications received during the period specified in suchnotification and the applications which had been received prior to thepublication of such notification in respect of the lands within sucharea or had not been disposed of, shall be deemed to have beenreceived on the same day for the purpose of assigning priority under


sub-section (2). The second proviso indicates that where suchapplications 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 mininglease to one of the applicants as it may deem fit. Sub-section (3)elaborates the matter referred to in sub-section (2), namely, (a) anyspecial knowledge of, experience in reconnaissance operations,prospecting operations or mining operations, possessed by theapplicant; (b) the financial resources of the applicant; (c) the natureand quality of the technical staff employed or to be employed by theapplicant; (d) the investment which the applicant proposes to makein the mines and in the industry based on the minerals; and (e) suchother matters as may be prescribed.20. Section 13 empowers the Central Government to make rules inrespect of minerals. By virtue of the power conferred upon theCentral Government under Section 13(2), the 1960 Rules have beenframed for regulating the grant of, inter alia, mining leases in respectof minerals and for purposes connected therewith. 21. By virtue of Section 17, the Central Government has beengiven special powers to undertake prospecting or miningoperations in certain lands. Section 17-A authorises the CentralGovernment to reserve any area not already held under anyprospecting licence or mining lease with a view to conserve anymineral and after consultation with the State Government bynotification in the Official Gazette.22. Section 18 indicates that it shall be the duty of the CentralGovernment to take all such steps as will be necessary for theconservation and systematic development of minerals in India andfor the protection of the environment by preventing or controlling anypollution which may be caused by prospecting or mining operationsand for such purposes the Central Government may, by notificationin the Official Gazette, make such rules as it thinks necessary.23. Section 18A empowers the Central Government to authorise theGeological Survey of India to carry out necessary investigation forthe purpose of information with regard to the availability of anymineral in or under any land in relation to which any prospectinglicence or mining lease has been granted by a State Government orby any other person. The proviso that follows sub- section (1) ofSection 18A provides that in cases of prospecting licences or miningleases granted by a State Government, no such authorisation shallbe made except after consultation with the State Government.24. Section 19 provides that any prospecting licences and miningleases granted, renewed or acquired in contravention of the 1957 Actor any rules or orders made thereunder shall be void and of no


effect.25. The 1960 Rules were framed by the Central Government, asnoted above, in exercise of the powers conferred by Section 13.26. Chapter IV of 1960 Rules deals with grant of mining leases inrespect of land in which the minerals vest in the Government. Sub-rule (1) of Rule 22 provides that an application for the grant of amining lease in respect of land in which the minerals vest in theGovernment shall be made to the State Government in Form Ithrough such officer or authority as the State Government mayspecify in this behalf. Sub-rule (3) provides for the documents to beannexed with the application and so also that such application mustbe accompanied by a non-refundable fee as prescribed therein. Sub-rule (4) of Rule 22 provides that on receipt of the application for thegrant of mining lease, the State Government shall take decision togrant precise area and communicate such decision to the applicant.The applicant, on receipt of communication from the StateGovernment of the precise areas to be granted, is required to submita mining plan within a period of six months or such other period asmay be allowed by the State Government to the Central Governmentfor its approval. The applicant is required to submit the mining planduly approved by the Central Government or by an officer dulyauthorized by the Central Government to the State Government togrant mining lease over that area. Sub-rule (5) of Rule 22 providesthe details to be incorporated in the mining plan.27. Rule 26 empowers the State Government to refuse to grant orrenew mining lease over the whole or part of the area applied for. Butthat has to be done after giving an opportunity of being heard and forreasons to be recorded in writing and communicated to the applicant.28. Rule 31 provides for time within which lease is to be executedwhere an order has been made for grant of such lease on anapplication. Rule 34 provides for manner of exercise of preferentialrights for mining lease.29. Rule 35 provides that where two or more persons have appliedfor a reconnaissance permit or a prospecting licence or a mininglease in respect of the same land, the State Government shall, forthe purpose of sub-section (2) of Section 11, consider besides thematters mentioned in clauses (a) to (d) of sub-section (3) of Section11, the end use of the mineral by the applicant.30. In short, the 1957 Act provides for general restrictions onundertaking prospecting and mining operations, the procedure forobtaining prospecting licences or mining leases in respect of lands inwhich the minerals vest in the government, the rule-making power forregulating the grant of prospecting licences and mining leases,


special powers of Central Government to undertake prospecting ormining 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, ofthe management of coal mines, pending nationalisationof such mines, with a view to ensuring rational andcoordinated development of coal production and forpromoting optimum utilisation of the coal resourcesconsistent with the growing requirements of the country,and for matters connected therewith or incidentalthereto.”

32. The Coal Mines Management Act received the assent of thePresident on 31.03.1973 but it was made effective from 30.01.1973except 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) themanagement of all coal mines shall vest in the Central Government.By Section 3(2), the coal mines specified in the Schedule shall bedeemed to be the coal mines the management of which shall vest inthe Central Government under sub-section (1). Under the proviso toSection 3(2), if, after the appointed day, the existence of any othercoal mine comes to the knowledge of the Central Government, itshall by a notified order make a declaration about the existence ofsuch mine, upon which the management of such coal mine alsovests in the Central Government and the provisions of the Actbecome applicable thereto.33. Immediately after the Coal Mines Management Act, theParliament enacted the CMN Act. CMN Act was passed,

“to provide for the acquisition and transfer of the right, titleand interest of the owners in respect of coal minesspecified in the Schedule with a view to reorganising andreconstructing any such coal mines so as to ensure therational, coordinated and scientific development andutilisation of coal resources consistent with the growingrequirements of the country, in order that the ownershipand control of such resources are vested in the State andthereby so distributed as best to subserve the commongood, and for matters connected therewith or incidentalthereto.”

34. Section 2(b) of the CMN Act defines a coal mine in the samemanner as the corresponding provision of the Coal MinesManagement Act, namely, a mine “in which there exists one or moreseams 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 thecoal mines specified in the Schedule shall stand transferred to, andshall vest absolutely in the Central Government free from allencumbrances. Section 4(1) provides that where the rights of anowner under any mining lease granted, or deemed to have beengranted, in relation to a coal mine, by a State Government or anyother person, vest in the Central Government under Section 3, theCentral Government shall, on and from the date of such vesting, bedeemed to have become the lessee of the State Government or suchother person, as the case may be, in relation to such coal mine as ifa mining lease in relation to such coal mine had been granted to theCentral Government. The period of such lease is to be the entireperiod for which the lease could have been granted by the CentralGovernment or such other person under the 1960 Rules andthereupon all the rights under the mining lease granted to the lesseeare to be deemed to have been transferred to, and vested in, theCentral Government. By Section 4(2) on the expiry of the term of anylease referred to in sub-section (1), the lease, at the option of theCentral Government, is liable to be renewed on the same terms andconditions on which it was held by the lessor for the maximum periodfor which it could be renewed under the 1960 Rules. Section 5(1)empowers the Central Government under certain conditions to directby an order in writing that the right, title and interest of an owner inrelation to a coal mine shall, instead of continuing to vest in theCentral Government, vest in the Government company. Suchcompany, under Section 5(2), is to be deemed to have become thelessee 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 Governmentor in a government company is freed and discharged from allobligations and encumbrances affecting it. Section 8 requires thatthe owner of every coal mine or group of coal mines specified in thesecond column of the Schedule shall be given by the CentralGovernment in cash and in the manner specified in Chapter VI, forthe vesting in it under Section 3 of the right, title and interest of theowner, an amount equal to the amount specified against it in thecorresponding entry in the fifth column of the Schedule. By Section11(1), the general superintendence, direction, control andmanagement of the affairs and business of a coal mine, the right, titleand interest of an owner in relation to which have vested in theCentral Government under Section 3 shall vest in the Governmentcompany 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 on29.04.1976. The Ordinance was replaced by the Coal Mines


(Nationalisation) Amendment Act, 1976 (for short, ‘1976Nationalisation Amendment Act’). A new section, Section 1-A wasinserted by which it was declared that it was expedient in the publicinterest that the Union should take under its control the regulationand development of coal mines to the extent provided in sub-sections (3) and (4) of Section 3 and sub-section (2) of Section 30 ofthe CMN Act. By sub-section (2) of Section 1-A, the declarationcontained in sub-section (1) was to be in addition to and not inderogation 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. Underclause (a) of the newly introduced sub-section (3) of Section 3, onand from the commencement of Section 3 of the 1976Nationalisation Amendment Act, no person other than (i) CentralGovernment or a Government company or a corporation owned,managed or controlled by the Central Government or (ii) a person towhom a sub-lease, referred to in the proviso to clause (c) has beengranted by any such Government, company or corporation or (iii) acompany engaged in the production of iron and steel, shall carry oncoal mining operation, in India in any form. Under clause (b) of sub-section (3), excepting the mining leases granted before the 1976Nationalisation Amendment Act in favour of the Governmentcompany or corporation referred to in clause (a), and any sub-leasegranted by any such Government, Government company orcorporation, all other mining leases and sub-leases in forceimmediately before such commencement shall insofar as they relateto the winning or mining of coal, stand terminated. Clause (c) of thenewly introduced sub-section (3) of Section 3 provides that no leasefor winning or mining coal shall be granted in favour of any personother than the Government, Government company or corporationreferred to in clause (a). Under the proviso to clause (c), theGovernment, Government company or the corporation to whom alease 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 areaare in isolated small pockets or are not sufficient for scientific andeconomical development in a coordinated and integratedmanner,and (ii) the coal produced by the sub-lessee will not berequired to be transported by rail. By sub-section (4) of Section 3,where a mining lease stands terminated under sub-section (3), itshall be lawful for the Central Government or a Governmentcompany or corporation owned or controlled by the CentralGovernment to obtain a prospecting licence or mining lease inrespect of the whole or part of the land covered by the mining leasewhich stands terminated. Section 4 of the 1976 NationalisationAmendment Act introduces an additional provision in Section 30 of


the principal Act by providing that any person who engages, orcauses any other person to be engaged, in winning or mining coalfrom the whole or part of any land in respect of which no validprospecting licence or mining lease or sub-lease is in force, shall bepunishable with imprisonment for a term which may extend to twoyears and also with fine which may extend to Rs.10,000/-.36. By the Coal Mines (Nationalisation) Amendment Act, 1993 (forshort, ‘1993 Nationalisation Amendment Act’), the CMN Act wasfurther amended. The Statement of Objects and Reasons of the1993 Nationalisation Amendment Act reads thus:

“Considering the need to augment power generation and tocreate additional capacity during the eighth plan, theGovernment have taken decision to allow private sectorparticipation in the power sector. Consequently, it has becomenecessary to provide for coal linkages to power generatingunits coming up in the private sector. Coal India Limited andNeyveli Lignite Corporation Limited, the major producers of coaland lignite in the public sector, are experiencing resourceconstraints. A number of projects cannot be taken up in a shortspan of time. As an alternative, it is proposed to offer new coaland lignite mines to the proposed power stations in the privatesector for the purpose of captive end use. The samearrangement is also considered necessary for other industrieswho would be handed over coal mines for captive end use.Washeries have to be encouraged in the private sector also toaugment the availability of washed coal for supply to steelplants, power houses, etc.

Under the Coal Mines (Nationalisation) Act, 1973, coal mining isexclusively reserved for the public sector, except in case ofcompanies engaged in the production of iron and steel, andmining in isolated small pockets not amenable to economicaldevelopment and not requiring rail transport. In order to allowprivate sector participation in coal mining for captive use forpurpose of power generation as well as for other captive enduses to be notified from time to time and to allow the privatesector to set up coal washeries, it is considered necessary toamend the Coal and Coal Mines (Nationalisation) Act, 1973.

The Coal Mines (Nationalization) Amendment Bill, 1992 seeksto 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 Governmentspecified production of cement to be an end-use for the purposes ofthe CMN Act.39. By another Notification dated 12.07.2007, the CentralGovernment specified production of syn-gas obtained through coalgasification (underground and surface) and coal liquefaction as enduses for the purposes of the CMN Act.40. The background in which Section 3(3) of the CMN Act wasamended to permit private sector entry in coal mining operation forcaptive use has been sought to be explained by the CentralGovernment. It is stated that nationalization of coal through the CMNAct was done with the objective of ensuring “rational, coordinatedand scientific development and utilization of coal resourcesconsistent with the growing requirements of the country” and as afirst step in 1973, 711 coal mines specified in the Scheduleappended to CMN Act were nationalized and vested in the CentralGovernment. By 1976 Nationalisation Amendment Act, the CentralGovernment alone was permitted to mine coal with the limitedexception of private companies engaged in the production of ironand steel. In 1991, the country was facing huge crisis due to (a) thesituation regarding balance of payments; (b) the economy being indoldrums; (c) dismal power situation; (d) shortage in coal production;and (e) inability of Coal India Limited (CIL) to produce coal becauseof lack of necessary resources to maximize coal production amongstother reasons. There was a huge shortage of power in the country.The State Electricity Boards were unable to meet powerrequirements. Post liberalization, in the 8th Five Year Plan (1992-1997) a renewed focus was placed on developing energy andinfrastructure in the country. CIL was not in a position to generate theresources required. It was in this background that in a meeting takenby the Deputy Chairman of the Planning Commission on 31.10.1991,it was decided that “private enterprises may be permitted to developcoal and lignite mines as captive units of power projects”. Theapproval of Cabinet was consequently sought vide a Cabinet notedated 30.01.1992 for “allowing private sector participation in coalmining operations for captive consumption towards generation ofpower and other end use, which may be notified by Governmentfrom time to time”. The Cabinet in the meeting held on 19.02.1992considered the above Cabinet note and it was decided that theproposal may be brought up only when specific projects of privatesector participation in coal mining come to the Government for


consideration. Subsequently, another Cabinet note dated23.04.1992 was placed before the Cabinet containing references tocertain private projects like the two 250 MW thermal power plants ofRPG Enterprises, which had been recommended by the Governmentof West Bengal. The proposal contained in the Cabinet note dated23.04.1992 was approved by the Cabinet on 05.05.1992. On15.07.1992, the Bill for amendment of Section 3(3) of CMN Act wasintroduced 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 ofthe 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 coalmining operations for captive use, it became necessary to select thecoal blocks that could be offered to the private sector for captiveuse. The coal blocks to be offered for captive mining were dulyidentified and a booklet containing particulars of 40 blocks wasprepared 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 undertakingprospecting and mining operations, the procedure for obtainingreconnaissance permits, prospecting licences and mining leasesand the rule making power of regulating the grant ofreconnaissance permits, prospecting licences and mining leases.Clause (a) of sub-section (3) of Section 3 of the CMN Act enablespersons specified therein only to carry on coal mining operation. Inclause (c), it is provided that no lease for winning or mining coalshould be granted in favour of any person other than theGovernment, Government company or corporation referred to inclause (a). Under clause (b) of sub-section (3), excepting the miningleases granted before 1976 in favour of the Government,Government company or corporation referred to in clause (a) andany sub-lease(s) granted by any such Government, Governmentcompany or corporation, all other mining leases and sub-leases inforce immediately before such commencement insofar as they


relate to the winning or mining of coal stand terminated. When asub-lease stands terminated under sub-section (3), sub-section (4)of Section 3 provides that it shall be lawful for the CentralGovernment or the Government company or corporation owned orcontrolled by the Central Government to obtain a prospectinglicence or a mining lease in respect of whole or part of the landcovered by mining lease which stands so terminated. The aboveprovisions in the CMN Act, as inserted in 1976, clearly show thatthe target of these provisions in the CMN Act is coal mines, pureand simple. CMN Act effectively places embargo on granting theleases for winning or mining of coal to persons other than thosementioned in Section 3(3)(a). Does CMN Act for the purposes ofregulation and development of mines to the extent provided thereinalter the legal regime incorporated in the 1957 Act? We do not thinkso. What CMN Act does is that in regard to the matters falling underthe Act, the legal regime in the 1957 Act is made subject to theprescription under Section 3(3)(a) and (c) of the CMN Act. 1957 Actcontinues to apply in full rigour for effecting prescription of Section3(3)(a) and (c) of the CMN Act. For grant of reconnaissance permit,prospecting licence or mining lease in respect of coal mines, theMMDR regime has to be mandatorily followed. 1957 Act and so alsothe 1960 Rules do not provide for allocation of coal blocks nor theyprovide any mechanism, mode or manner of such allocation.

58. Learned Attorney General submits that an application forallocation of a coal block is not dealt with by the 1957 Act and,therefore, consideration of proposals for allocation of coal blocksdoes not contravene the provisions of the 1957 Act. The submissionof the learned Attorney General does not merit acceptance for morethan one reason. First, although the Central Government has pre-eminent role under the 1957 Act inasmuch as no reconnaissancepermit, prospecting licence or mining lease of coal mines can begranted by the State Government without prior approval of theCentral Government but that pre-eminent role does not clothe theCentral Government with the power to act in a manner in derogationto or inconsistent with the provisions contained in the 1957 Act.Second, the CMN Act, as amended from time to time, does nothave any provision, direct or indirect, for allocation of coal blocks.Third, there are no rules framed by the Central Government nor isthere any notification issued by it under the CMN Act providing forallocation of coal blocks by it first and then consideration of anapplication of such allottee for grant of prospecting licence or mininglease by the State Government. Fourth, except providing for thepersons who could carry out coal mining operations and totalembargo on all other persons undertaking such activity, no


procedure or mode or manner for winning or mining of coal mines isprovided in the CMN Act or the 1960 Rules or by way of anynotification. Fifth, even in regard to the matters falling under CMNAct, such as prescriptive direction that no person other than thoseprovided in Sections 3(3) and 3(4) shall carry on mining operationsin the coal mines, the legal regime under the 1957 Act, subject tothe prescription under Sections 3(3) and 3(4), continues to apply infull rigour. Mr. Harish N. Salve, learned senior counsel for theinterveners, is not right in his submission that allocation letter issuedby the Central Government is the procedure which regulates theexercise under Rule 22 of the 1960 Rules. Had that been so, someprovisions to that effect would have been made in the CMN Act orthe 1960 Rules framed thereunder but there is none.”


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 7States - Maharashtra, Madhya Pradesh, Chhattisgarh, Odisha,Jharkhand, Andhra Pradesh and West Bengal – which have coaldeposits, have accepted and acknowledged the source of power ofthe Central Government with regard to allocation of coal blocks isnot fully correct. Odisha has strongly disputed that position.Odisha’s stand is that the system of allocation of coal blocks by theCentral Government is alien to the legal regime under the CMN Actand the 1957 Act. It is true that many of these States have taken theposition that allocation letter confers a right on such allottee to getmining lease and the only role left with the State Government is tocarry out the formality of processing the application and forexecution of lease deed, but, in our view, the source of power of theCentral Government in allocation of coal blocks is not dependant onthe understanding of the State Governments but it is dependantupon whether such power exists in law or not. Indisputably, powerto regulate assumes the continued existence of that which is to beregulated and it includes the authority to do all things which arenecessary for the doing of that which is authorized includingwhatever is necessarily incidental to and consequential upon it butthe question is, can this incidental power be read to empower the


Central Government to allocate the coal blocks which is neithercontemplated 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 astatute requires to do a certain thing in a certain way, the thing mustbe done in that way or not at all. Other methods of performance arenecessarily forbidden 9 . This is uncontroverted legal principle.

60. It is argued by the learned Attorney General that the allocationletter does not by itself confer the right to work mines and theidentification of the coal block does not impinge upon the rights ofthe State Government under the 1957 Act. Learned Attorney Generalargues that allocation of coal block is essentially an identificationexercise where coal blocks selected by the CIL for captive miningwere identified by the Screening Committee for development by anallocatee, after considering the suitability of the coal block (in termsof exercise and quality of reserve) vis-à-vis the requirements of theend-use plant of the applicant. It is submitted by the AttorneyGeneral that a letter of allocation is the first step. It entitles theallocatee to apply to the State Government for grant of prospectinglicence/mining lease in accordance with the provisions of the 1957Act. The right to apply for grant of prospecting licence/mining leasedoes not imply that with the issuance of allocation letter the allocateeautomatically gets the clearances and approval required under the1957 Act, the 1960 Rules, the Forest (Conservation) Act, 1980 andthe Environment (Protection) Act, 1986, etc. According to the learnedAttorney General, after allocation, the following steps are required tobe complied with:

a. The allocatee is required to apply to the StateGovernment for grant of Prospecting Licence in case of anunexplored block, or a Mining Lease in case of an exploredblock.b. On receipt of the application for grant of ProspectingLicense or Mining Lease, as the case may be, the StateGovernment, in the case of Prospecting Licence canprocess the application for Prospecting Licence inaccordance 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 precisearea for the purpose of the lease and communicate suchdecision to the applicant.d. On receipt of the communication from the StateGovernment of the precise area to be granted, the applicantis required to submit a mining plan to the Central

9 Nazir Ahmad v. King Emperor; [(1935-36) 63 IA 372]


Government for its approval. [Rule 22(4)]e. After the mining plan has been duly approved by theCentral Government, the applicant submits the same to theState Government for grant of mining lease over the area.f. After receipt of the duly approved mining plan, the StateGovernment makes a proposal for grant of prior consent bythe Central Government in terms of the proviso to Section5(1) of the 1957 Act.g. In addition to the approved mining plan, the allocatee isrequired to obtain permission under Section 2 of the Forest(Conservation) Act, 1980 if the coal block is located in ascheduled forest. Further, the allocatee is required to submitto the State Government, prior environmental clearance fromthe Ministry of Environment and Forests, Government ofIndia for the project. Forest Clearance and EIA clearanceoperate separately.h. Mining Lease is thereafter granted by the StateGovernment, after verifying that all statutory requirementshave been duly complied with by the allocatee.

61. There seems to be no doubt to us that allocation letter is notmerely an identification exercise as is sought to be made out by thelearned Attorney General. From the position explained by theconcerned State Governments, it is clear that the allocation letter bythe Central Government creates and confers a very valuable rightupon the allottee. We are unable to accept the submission of thelearned Attorney General that allocation letter is not bankable. As amatter of fact, the allocation letter by the Central Government leavespractically or apparently nothing for the State Government to decidesave and except to carry out the formality of processing theapplication and for execution of the lease deed with the beneficiaryselected by the Central Government. Though, the legal regime underthe 1957 Act imposes responsibility and statutory obligation uponthe State Government to recommend or not to recommend to theCentral Government grant of prospecting licence or mining lease forthe coal mines, but once the letter allocating a coal block is issued bythe Central Government, the statutory role of the State Governmentis reduced to completion of processual formalities only. As noticedearlier, the declaration under Section 1A of the CMN Act does nottake away the power of the State under Section 10(3) of the 1957Act. It is so because the declaration under Section 1A of the CMNAct is in addition to the declaration made under Section 2 of the 1957Act and not in its derogation. 1957 Act continues to apply with thesame rigour in the matter of grant of prospecting licence or mininglease of coal mines but the eligibility of persons who can carry


out coal mining operations is restricted to the persons specified inSection 3(3)(a) of the CMN Act.62. In Tara Prasad Singh¹º, a seven Judge Constitution Bench whiledealing 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 beconstrued as a derogation of the principle enunciated in Section 18of the 1957 Act. The Court said:

“Therefore, even in regard to matters falling under theNationalisation Amendment Act which terminates existingleases and makes it lawful for the Central Government toobtain fresh leases, the obligation of Section 18 of the Actof 1957 will continue to apply in its full rigour. Ascontended by the learned Solicitor General, Section 18contains a statutory behest and projects a purposivelegislative policy. The later Acts on the subject ofregulation of mines and mineral development are linked upwith 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 withreference to the policy enunciated in Section 18, in our view, applyequally to the entire legal regime articulated in the 1957 Act. We areof the opinion that nothing should be read in the two Acts, namely,CMN Act and the 1957 Act, which results in destruction of thepolicy, purpose and scheme of the two Acts. It is not right to suggestthat by virtue of declaration under Section 1A of the CMN Act, thepower of the State under Section 10(3) of the 1957 Act has becomeunavailable. The submission of Mr. Harish N. Salve, learned seniorcounsel for the interveners that additional declaration under Section1A of the CMN Act seeks to do away with any vestige of power inthe State in the matter of selection of beneficiaries of the mineral isnot meritorious. Had that been so, Rule 35 of the 1960 Rules wouldnot have been amended to provide that where two or more personshave applied for reconnaissance permit or prospecting licence or amining lease in respect of the same land, the State Governmentshall, inter alia, consider the end-use of the mineral by theapplicant. The declaration under Section 1A has not denuded theStates of any power in relation to grant of mining leases anddetermining of those permitted to carry on coal mining operation.64. The allocation of coal block is not simply identification of the coalblock or the allocatee as contended by the learned Attorney Generalbut 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]


N. Salve, learned senior counsel for the interveners, has taken adefinite position that allocation letter may not by itself conferpurported rights in the minerals but such allocation has legalconsequences and confers private rights to the allocatees forobtaining the coal mining leases for their end-use plants.65. In view of the foregoing discussion, we hold, as it must be, thatthe exercise undertaken by the Central Government in allocating thecoal blocks or, in other words, the selection of beneficiaries, is nottraceable either to the 1957 Act or the CMN Act. No such legislativepolicy (allocation of coal blocks by the Central Government) isdiscernible from these two enactments. Insofar as Article 73 of theConstitution is concerned, there is no doubt that the executive powerof the Union extends to the matters with respect to which theParliament has power to make laws and the executive instructionscan fill up the gaps not covered by statutory provisions but it isequally well settled that the executive instructions cannot be inderogation of the statutory provisions. The practice and procedurefor allocation of coal blocks by the Central Government throughadministrative route is clearly inconsistent with the law alreadyenacted or the rules framed.”


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 09.05.98of M/s CTL was dealt with in Ministry of Coal (MOC), Coal IndiaLimited (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 consideredand dealt with in MOC, CIL, CMPDIL and CCL over a period of morethan one year and on more than one occasions so all suchcircumstances are being mentioned in a sequential manner i.e. in


accordance with the dates when the same was dealt with in theaforesaid organisations. Accordingly, for the sake of clarity and betterappreciation of facts, the proceedings in the aforesaid organizations arebeing 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 aboveproject to the Ministry of Coal. We have not yet heard from the Ministry in thisregard. However, we have been advised to first apply to your goodself for theidentification of the said block for our company.

This application is being made for earmarking of 105.153 hectares of coal miningarea of Brahmadiha project in the District of Giridih, Bihar. A brief note on thescheme of mining, location of the areas, reserves and probable quality of coal,utilisation of coal after mining, environment status etc. is attached to facilitateconsideration of our request.

As will be noticed, the pits and the inclines were abandoned and surrendered in


1916 by the then private company Raniganj Coal Associates. Being abandonedmine, this was not included in the list of taken over mines at the time ofnationalisation in 1973. However, we understand this illegal coal mining and theftof coal from this mine is continuing.

On the basis of detailed techno-economic study by our company, we are confidentthat mineable reserves of 2.215 million tonnes can be extracted from lowerKurhurbaree Seam, at the rate of about 0.15 million tonnes per year. This activitywill provide employment in the area and will energise economic activities. On theother hand, in the absence mining of this coal, these mineable reserves will be lostfor 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 seenfrom the attached key plan and does not include any part of leasehold areas ofCCL. 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 anduneconomical working.

In view of the above, we request that our proposal may be considered at theearliest and the area be earmarked for open cast mining by Castron TechnologiesLtd. 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) 2046235Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387Regd. 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 smallercoalfields of India. The exploitation of the coalfield was started by Bengalcoal company and East India Railway as early as 1871. Since then themining activity has been vigorously continued. There are 13 coalhorizons in this coalfield. However, upto 1942, the major production ofcoal was from lower Kurhurbaree seam (the lower most seam in thearea) due to its superior quality / grade. The mining of younger seamscontaining inferior grade coals was started after 1942. The Giridih


colliery had constructed its own power plant & a coke oven plant with thecapacity to produce 60000 te / yr / bp hard coke. Since nationalisation ofcoal mines in 1973, all the mines in this coalfield are run by centralcoalfield Ltd., a subsidiary of coal India Ltd. (Central Govt. U/T ).

Over 100 pits were sunk and a large number of inclines weredriven by several agencies in this coalfield. Out of the above, 17 pits andabout same number of inclines were driven by Ranigunj coal Associates( a private company ) in the south - east part of the coalfield to work thelower 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 suddencollapses. The pits and inclines had been abandoned and surrenderedby RCA in 1916, long before the nationalisation of coal mines took placein the country in 1973. These abandoned mines of RCA were notincluded in the list of taken over mines as given in the Coal MinesNationalisation Act, 1973. The CCL is unwilling to open this areabecause of high OB to coal ratio & uneconomical workings.

The Promoters of M/s. Castron Technologies Limited have hadthree generations of coal mining experience before nationalisation ofcoal mines by Govt of India in 1973. Now, in view of the acute shortageof coking coal in the country and Govt's policy to invite private sector toimprove economy by opening coal mines for captive use ( i. e for coalwashery, power plant, cement plant etc.), the applicant M/s. CastronTechnologies Limited, intends to open an opencast coal mine in theabandoned RCA area, within the provisions of Mines & Minerals(Regulation & Development) Act, 1957. The applicant with their miningexperts have made detailed techno economic studies of the proposedproject ( after study of the abandonment mine plans of RCA area ) andhave come to the conclusion that remnant coal of lower Kurhurbareeseam in abandoned & surrendered RCA area of which mineable reservecomes to 2.215 Mil. Te., can be produced by opencast mining with amarginal profit. The proposed opencast project has been named as Brahmadihaopencast. The coal produced from the mine, will be mixed with stonesand shales and shall require beneficiation. Therefore a coal washeryhaving a capacity of 0. 15 Million Te. has been planned. The rejects fromthe washery shall be used for power generation by installing a 10 MWpower plant for captive & non-captive use. The proposed integratedproject consisting of coal mining, coal washing and reject based powergeneration, apart from producing superior grade coal will bring all roundprosperity to the backward area of Giridih district. Because of theabandonment of coal mines due to depletion of superior quality coalreserves many of the unskilled and semiskilled workers have becomejobless. The proposed integrated project will provide employment to


about 850 persons in the planned manner. It will not only give a helpinghand to the local economy but will give boost to coal based industries.The coal produced and power generated will generate substantialrevenue for the state in the form of royalty, taxes and cess. It will providebackward integration to the main objectives and activities of thecompany by providing coal and power.

The mining project will employ a capital outlay of Rs. 22.00 croresand overall investment of Rs. 120 crores in the integrated projectincluding coal washery and power plant. Apart from generating directand indirect employment, the restarting of mining activity in the area willhave many added advantages Giridih district is also famous for micatrading. Several mica mines have been working in the district. Due tothese two industrial activities Giridih town has experienced very largescale migration of people from adjacent areas particularly from hillyregions of the district / area. However a large section of the population isilliterate. On the initiation of coal mining it is proposed and expected tostart an industrial training centre here. This centre apart from attemptingto improve the skills of people will also address itself to the task ofremoving illiteracy. It will impart vocational training in trades likecarpentry and furniture making, blacksmithy, fitting, welding, brickmaking, stone mining, cane work and gardening. Skills in suchsupportive crafts will improve local economy. The training centre will alsohave a programme to train people in sericulture and pisiculture. This willhelp the workers to become a part of a self sustaining economy. It is alsoproposed to start a yoga training centre apart from other measures liketree plantations along roads, around colony etc.

Giridih district was originally a part of Hazaribagh district andidentified as a separate district in 1972. The district is a part of ChotaNagpur plateau Geographic area of district is 68892 Sq. Km. with apopulation 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 tothe large scale migration from adjoining districts for seekingemployment. B. Location Proposed Brahmadiha opencast project is situated at about 8 Km in thesouth 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 coveredin 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 isabout 45 Km between Dumri-Deoghar / Giridih road and Giridih Puruliaroad. Proposed lease area is connected with Giridih Purulia PWD road


by about 1. 20 Km fair weather village road. The Giridih District town isabout 6 Km from the project. The Giridih town is also connected by tarroads to Dhanbad and Koderma. Giridih railway station about 8 Kmaway from the project is connected lo Madhupur junction on the railwaymain line from Delhi to Calcutta. A railway siding branching off fromGiridih railway station also passes at a distance of about 1 Km to thewest 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, WaterlooStreet, Calcutta – 700 069

Business AddressLal Bungalow, Dhaiya, P.O. Nagnagar,Dhanbad 826 004

4. Location of the proposed project 8 Kms. south of Giridih Railway StationBounded 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 1:50000scale topo sheet no 72 -L/8.

5. Nearest Railway station Giridih, on Eastern railway, Giridih branch

6. Total area being applied for mining lease

105.153 Ha.

7. Legal status of area Old abandoned area of Raniganj CoalAssociates. Presently not covered by anyvalid mining lease.

8. Name of the seam to be worked Lower Kurhurbaree (Only seam in theproposed mining lease area).

9. (a) Total thickness of seam

(b) Expected percentage of coal left behind which is now being proposed to be produced

6.00 Meters

a) Pillars - 40%b) Goaved area - 30%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 isgoing to deteriorate as the coal to be minedis the remnant of L.K. seam i.e left out coalin old abandoned depillared areas, and willbe mixed with shales and stones. Thereforeactual grade shall be known after analysingthe samples taken from raised coal.


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 (includingaccess trench excavation)

30.63 Million Meter³

16. Average stripping ration (m³/Te) 13.83

17. Annual mine target (M.Te) 0.15

18. Life of project (Years) (includingconstruction, reclamation anddismantling period)

30 Years

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,washery and power plant.

Rupees 98.00 Crores

23. Estimated year of achieving targetedcapacity

5th Year

24. Utilisation of coal produced Washing & captive use for powergeneration from rejects.

ENVIRONMENT PROTECTION MEASURES

(A) Base line information & existing land use pattern

The topography of Giridih coalfield area is undulating. Thecoalfield occupies the low valley portion, while the ground to the northand south is comparatively much higher and is composed of crystallisemetamorphic rocks. The river Barakar flowing from W-N-W to E-S-Edirection on the south of Giridih coalfield is mainly draining coalfieldarea. There are two minor nallas which are originating within theproposed lease hold area and as such there will not be any significantadverse effect on water sources in the neighbouring area of miningoperations.

The climate is humid and sub tropical. Rainfall is confinedbetween June and October, hot and dry summer March to May andwinter from November to February. In summer temp rises up to 42º to46º C. In winter temperature drops down to 5º C at times. Averagerainfall is around 1200 mm per annum. The total area being applied forgrant of ML is 105. 153 Ha. The land inside core zone is barren,unproductive and undulating. There is no inhabitation' and forest landinside the core zone. The project area does not support any fauna.


(B) Water pollution control

(i) Mine water

For the working of the coal project the depillared & abandonedworking in the proposed project which are expected to be partly filledwith water, shall have to be dewatered gradually. The mine water shallbe utilised after treatment for drinking, industrial use and if required foragricultural use, tree plantation etc. It will also be used for dustsuppression by spraying over haul roads, etc. Since Giridih is waterscarcity area, mine water after treatment will be a good source of watersupply for drinking & irrigation etc. Even then if there is any surpluswater it will be collected in sedimentation tanks where the suspendedmatters ( such as grease, oil, dirt particles etc.) in water will settle downbefore discharging the same into the main drainage system. Routinequality checks will be provided if required it will be further treatedaccording to impurities.

Peripheral trench around external dump would be provided toprevent run off from the dumps flowing directly into the drainagesystem.

(ii) Industrial discharge

Discharge from workshop, coal washery, power plant etc. islikely to contain dust, grease, oil etc. Therefore this discharge would becollected and allowed to settle in sedimentation tanks and subsequentlytreated before discharging into main drainage system.

(iii) Domestic sewage disposal

Domestic sewage from the township would be discharged intothe common oxidation pond and the discharge would be treated ifrequired before using for agriculture purposes or before allowing it toflow into the main drainage system.

(C) Air Pollution

Following mitigating measures shall be adopted to keep the airpollution 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 areaand dust generating locations in C. H. P.

iii. proper maintenance of all Internal combustion engines to reducesmoke and exhaust fumes.

iv. Provision & maintenance of proper dust extraction / suppressionsystem of all drills.”



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 CoalCPAM – Section

. . .

Subject: Identification of 105.153 hectares of abandoned coal mining area of Brahmadihaproject, 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 miningarea of Brahmadiha project Dist. Giridih, Bihar for captive miningalonwith enclosures containing a brief note vide pages 2-8/c on thescheme of mining, location of the area, reserves and probable quality ofcoal, utilisation of coal after mining environment status etc. they haveindicated that the pits and inclines were abandoned and surrendered in1916 by the then private company Raniganj Coal Associates. Beingabandoned mine, this was not included in the list of taken over mines atthe time of nationalization in 1973.

The applicant intends to open an opencast coal mine in theabandoned RCA area, within the provisions of MMRD Act, 1957. As pertheir detailed techno-economic study the mineable reserves of 2.215m.t. can be produced from lower Kurhurbaree seam at the rate of about0.15 million tonnes per year by opencast mining with a marginal profit.They have indicated that the area lines on easternmost fringe of the


Giridih coalfield does not include any part of leashold areas of CCL andas such the activities of the nationalised coal sector would not beaffected.

They have further indicated that the proposed project has beennamed as Brahmadiha OC. The coal from the mine will be mixed withstones and shales shall require beneficiation. They have planned toestablish a washery having a capacity of 0.15 M.T. The rejects from thewashery shall be used for power generation by installing a 10 MWpower plant for captive & non-captive use.

On the basis of the above submission, they have requested us toconsider their proposal and the area be earmarked for opencast miningto them.

In this regard it is submitted that a revised policy guidelines forallocation of captive mining block is under consideration. Since M/s.Castron Technologies Ltd.'s request is a fresh proposal, it is forconsideration whether their request may be processed. In themeanwhile, we may obtain comments of CIL/CMPDI/MOPower as inDFA.

Sd/-(R.S. Negi) 30/6/98

Sd/-(Neera Sharma)

7/7/98

US(CPAM)Sd/-

B.L. Das7/7/98

Director (CPAM)”


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.


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-CPAMGOVERNMENT 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 coalmining 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. CastronTechologies Ltd. letter No.CIL/194/98-99/068 dt.9.5.98 on the abovesubject and to request you to examine the proposal and furnish yourcomments to this Ministry at an early date.

Yours faithfully,Sd/-

(B.L. Dass) Under Secretary to the Govt. of India

Encls: As above.”


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 fileDir(CPAM)'s remarks against 'A' on 2/n ante may also kindly beseen.

Sd/- B.L. Dass

18/8/98Director (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 Ltdrequesting allotment of 105.153 of abandoned coal mining area ofBrahmadiha project, Dt. Giridih, Bihar for captive mining.2. The pits and the inclines in the area were abandoned andsurrendered in 1916 by the then private company, M/s Raniganj CoalAssociates. This area was not included in the list of taken over minesin 1973 as this was abandoned.3. M/s Castron Technologies Ltd had surveyed the area andreported a mineable reserves of 2.215 mt in lower Kurhurbaree seamwith expected percentage of coal left behind in Pillars (40%), Goavedarea (30%) Barriers (100%) and out / incrop (50%).4. Though the grade is “A”, deterioration is expected as miningwill be in the left out areas as indicated above. Average strippingratio in the proposed opencast will be 13.83 (cum/te) and annual


mine target with coal mixed with shale & stone is 0.15 mt. Theutilisation of coal is proposed to be for captive use for powergeneration after washing the coal, for which a plant of 10 MWcapacity is to be installed. The rejects will be used for powergeneration. However, the proposal is silent about the utilisation of thewashed coal.5. There is similarity of this proposal with that of M/s BLAindustries where an area of abandoned mining was allocated inWCL. However, the block was listed as an identified block. In thepresent instance, it is not.6. Comments on the proposal have been invited fromCIL/CMPDI vide our letter (9/c) dated 21st July and their response isstill awaited. Apart from the procedural reasons of the area not beingidentified as a potential block for captive mining, the allotment of thearea will help in some economic activity in an otherwise abandonedmining zone.7. In this context, it may be noted that the amendment of theCoal Mines Nationalisation Act (1973) in June 1993 allows washingof coal obtained from a mine as an activity not under the ambit of theNationalisation Act any more. The party may take recourse to thisinter-pretation and will feel not obliged to indicate the use of washedcoal for captive consumption. Though we have, till now, no casewhere washing of coal obtained from a mine has been undertakenwhere downstream linkage / consumption has not been firmed up, itneeds to be clearly spelled out that mine / block can not be given forwashing unless the washed coal is for captive consumption or tiedup with downstream linked consumer.Submitted for necessary directions in this regard.

Sd/-28/8/98

(N.N. Gautam)Addl. Secretary

Addl. Secretary”


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:


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 limitof say three months for disposal of this case one way or theother”

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/98/18/98/472Dated: 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


105.153 hectares of abandoned coal mining area of Brahmadiha project forcaptive mining by Castron Technologies Ltd. The matter has since beenexamined and our views are as follows:-1. The area is an abandoned mining area worked sometime in 1916 byRaniganj Coal Associates and abandoned. You would kindly appreciate thatno proper and accurate mine plans are available for this area and this entireworked-out area is full of water and is thus a source of danger to the adjoiningproperty of Central Coalfields Limited where coal mining is being done throughUK Incline/Central Pit. The area under consideration was worked extensivelythrough several inclines and pits and to the best of our knowledge almost theentire area has been goved out except few isolated patches mostly aroundentries 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 theapplication of M/s Castron Technologies Ltd. and as such the likely availablereserves will be only around 0.70 mt. and not 2.21 mt. as estimated by M/sCatron Technologies Ltd. Accordingly the average stripping ratio will be veryhigh and may be around1:25 which will be highly uneconomical under anymanagement. The proposal to extract barrier between RCA and CCL lease-hold cannot be agreed in the interest of safety and is against the miningstatutes. 3. It is also quite evident that the area identified does not conform to theguidelines issued by the Ministry of Coal and as such cannot be considered asa captive block for mining by the IPPs or any other entrepreneur.

In view of this, in our view, the request of M/s Castron TechnologiesLtd. cannot be agreed to as it is not based on scientific and legalconsiderations.

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 Delhidated 21.7.98 to CMD, CMPDI besides CGM (CP), CIL.)

Phone: (0091-651) 301852, 301853, 313631, 314827 Fax: (0091-651) 305447, 301851 Cable :

MINEPLAN”



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-7Phone : 220-9980, GRAMS : Coal INDIA

Telex : 21-7180 CIL IN Ref. No....................... Date..........

No.CILCGM(CP)/Cap-Min/CTL/1102 Dated 2-9-98

ToThe 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 fromShri 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 asunder:-1. The area is an abandoned mining area worked sometimes during1916 AD by Ranigunj Coal Associates (RCA) and later abandoned, No.proper mine plans are available for this area and the entire worked out areais full of water and is a source of danger to the adjoining property of CCLwhere coal mining activities are being done through UG Incline/Central Pit.The area under consideration was worked extensively through severalincline and pit and to be best of knowledge almost the entire area has beengoved out except few isolated patches mostly around entries and betweenincrop of the seam and mined out zone.


2. The thickness of the seam is 2.5m and not 6m as mentioned in theapplication of M/s Castron Technologies Ltd and as such the likely availablereserves will be only around 0.70 mt. And not 2.21mt. As estimated by M/sCastron Technologies Ltd. Accordingly the average stripping ratio will bevery high and may be around 1:25 which will be highly uneconomical underany management. The proposal to extract barrier between RCA and CCLlease-hold cannot be agreed in the interest of safety and is against themining statues.3. It is also quite evident that the area identified does not conform tothe guidelines issued by the Screening Committee (MOC) for captivemining and as such cannot be considered as a captive block for mining bythe IPPs or any other entrepreneur.

In view of this, the request of M/s Castron Technologies Ltd. cannotbe 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.”


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:


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, 207886Fax: (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 forcaptive mining by Castron Technologies Ltd.

Dear Sir,Please refer to your discussion with our representative on 8 th Sept., 98regarding the use of washed coal that may be available from the coalmining and after washing the same. We beg to submit as follows: 1. After mining the coal and washing the same whatever middling will beavailable will be utilised for the power generation. The washed coal that willbe available will be used for production of metallurgical coke in our owncoke oven unit. 2. Large quantities of Chinese coke is being dumped in India containing12% 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 tomeet the challenge of Chinese coke. As such better quality of coal obtainedfrom the mine after washing will be blended with the coal of BCCL toproduce a better variety of marketable coke.4. In view of the globalisation of economy it is very essential to reduce thecost and produce the better quality of coke. As such we hope that you willkindly complete the process of allocating of mine by the Screeningcommittee and approve our mining plan submitted to you on 14 th Nov.,1997. We assure you coal obtained after washing will be utilised formanufacturing of coke directly by ourselves or it will be got converted inother coke oven plants for our company.


Hope this will meet your query and you will be kind enough to do theneedful.

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 6235Works : 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


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 thefile was under submission.

CMPDI/CIL in response to S.No.3/c(page 9/c), after examining theproposal regarding identification of 105.153 hec. of abandoned coal miningarea of Brahmadiha Project, Dist. Giridih, Bihar for captive mining byCastron Technologies Ltd., have furnished their views as under: -

– The area is an abandoned mining area worked sometimes during1916 AD by Ranigunj Coal Associates (RCA) and later abandoned. Noproper mine plans are available for this area and the entire worked outarea is full of water and is a source of danger to the adjoining property ofCCL where coal mining activities are being done through UG


Incline/Central Pit. The area under consideration was worked extensivelythrough several incline and pit and to the best of knowledge almost theentire are has been goved out except few isolated patches mostly aroundentries 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 theapplication of the party and as such the likely available reserves will beonly around 0.70 mt. and not 2.21 mt. as estimated by M/s CastronTechnologies Ltd. Accordingly the average stripping ratio will be very highand may be around 1:25 which will be highly uneconomical under anymanagement. The proposal to extract barrier between RCA and CCLlease-hold cannot be agreed in the interest of safety and is against themining statues.

– It is also quite evident that the area identified does not conform tothe guidelines issued by the Screening Committee for captive mining andas such cannot be considered as a captive block for mining by the IPPs orany other entrepreneur.

CIL have further indicated that in view of the above, the request ofM/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


(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-CPAMN.N. Gautam Government of IndiaAdviser (Projects) Ministry of Coal

Shastri BhawanRoom No. 309/ANew Delhi-110001Tel. : 3388043Fax. : 3387738

Dear Shri Sharma Dated : 6.11.98

This has reference to letter no. CIL CGM(G)/Cap-Min/CIL/1102 of2nd Sept. 98 for identification of 105.153ha of abandoned coal mining areaof Brahmdiha project located in the district Girdih, Bihar for captive miningby Castron Technologies Ltd.

2. It is contended that the request of M/s Castron Technologies cannotbe agreed to in view of water danger to the adjoining property of CCL safetyconsideration associated with methodology of extraction and the area notconforming to the guidelines issued by the Screening Committee of MOC.

3. The above mentioned observations of CIL do not appear to be muchconvincing. If the existing water body does not pose water danger, howextraction during opencasting will? Besides, the safety aspects of workingalong with plans of working will surely be scrutinised by the DGMS beforeallowing mining to proceed. As regard the economics of operation, it shouldbe best left to the commercial judgement of the intending party.

4. I also fail to understand what is implied by stating the area does notconform to the guidelines issued by the Screening Committee. In thiscontext, identification of Gotitoria East & West block may be recalled; theblock is also an abandoned mining area in WCL. The abandoned area citedin the proposal will not be ever mined by CIL. But its allotment for captivemining to any intending party will help in initiating some economic activity inan otherwise abandoned mining area.

5. You are requested to examine the issue in the light of what havebeen stated above. We are also advising M/s Castron Technologies Ltd todiscuss with CIL the issues raised in para 1&2 of the letter of CGM (CP).

With regards.


Yours sincerely,Sd/-6/11/98

(N.N. Gautam)Shri N.K. SharmaDirector (Technical),Coal India LimitedCALCUTTA”


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 LIMITEDDirector (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 dated6.11.98 on the above subject.

2. The comments sent by CGM (CP) was based on the examination of the


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 touchwith you very soon.

With regards,Yours sincerely,

Sd/-(NK SHARMA)

Shri NN GautamAdviser (Projects)Ministry of CoalNew DelhiC.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:


Letter dated 18/24.11.98 Ex. PW 5/E (available at page 27 in D-103)

“No. Dir(T)/P&D/18/98/68Dated 18/24.11.98

ToShri 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 abandonedcoal mining area of Brahmadiha Project, Dist. Giridih, in the State of Biharfor captive mining by Castron Technologies Limited. In this connection wewould like to mention that we have already intimated our views vide ourletter No.Dir(T)/P&D/98/18/98/472 dated 13.8.98 to your office (a copyenclosed for your ready reference).

We are in agreement with the views expressed earlier and would notlike 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 dated02.9.98 have not been appreciated in the proper perspective of thesituation. It is an abandoned mine worked as far back as 1916 much beforeany of the present regulations came into picture and as such no properabandoned mine plans (AMP) as required by the stature will be availableand as such we have to take all precautions to avoid danger to theadjoining property of Central Coalfields Limited through UG Incline/CentralPit. It is also considered not proper to allot a coal mining block for captivemining to an agency so close to our working which are far away fromcompany's HQs and main areas of operation.

In the light of above we do not find any reason to revise our views onthis 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)


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 INDIATelex : 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-CPAMdated 21st July, 1998 from Shri B.L. Das, Under Secretary to the Govt. of


India on the above subject. The matter may kindly be so examined andconsidered opinion of CCL may please be forwarded for further needful atthis 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 TechnologiesLtd has been studied in detail. The area under consideration refers tothe old leasehold area of Raniganj Coal Association. The available


geological data in respect of the above area of Giridihg Coalfield hasbeen examined and the observations are as under :- 1) The area under consideration was worked extensively by RCAfor mining of Lower Kurhurbaree seam through several incline andpits. Almost entire area has been goaved except few isolated patchesmostly around shafts which are standing on pillars. The mine hasbeen abandoned sometimes in 1916 and at present is a free-holdarea.2) The CL leasehold near UK incline/Central pit area passes justto the west of the area under consideration and a barrier has been leftby CCL to isolate the abandoned water logged working of RCA area.3) It is not true that substantial mineable reserve of 2.215 milliontonnes with 6.0 mtrs. Thickness of only LK seam is available in thearea as indicated in the scheme-submitted. The fact is that only 0.70million tonnes of geological reserve is available in standing pillars aswell as within the area between incrop of seam and mined out zoneshaving 2.5 mts. Of seam thickness. This has been left due to lowcover above the seam.4) The geological reserve available vis-a-vis overburden to benegotiated is envisaged to be abnormally high i.e. 1:25 or so whichdoes not seem to be an economical proposition.5) The reserve locked in barrier between RCA and CCL leaseholdarea has also been proposed to be mined as per the schemesubmitted. But this is not feasible in view of mining activity by CCLaround UK incline & Central pit. However, the area under consideration (RCA area) does notconform to the guidelines set by MOC, GOI for private mining in viewof 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 105.153hectares of abandoned coal mining area of Brahmadiha Project, Distt.Giridih for Captive mining by them. The copy of the said applicationwas forwarded by the Under Secretary to the Govt. of India, MOCvide no. 47011/7(62)/93-CPAM dt. 21.7.98 to CIL and in turn


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 applicationexamined and give the considered opinion of CCL for further action atCIL level. The application was examined and comments are asfollows:-1) The area in question is a free hold area and has not beenconsidered either a CIL or a Non-CIL Block.2) The geological reserves in the area is likely to be of the tune of0.70 million tonnes in Lower Karharbari seam only as most of the areahas been goaved out and the available reserves are in the scatteredpillars as well as within the area between incrop of the seam andmined out zones having about 2.5 mtrs. of seam thickness.3) The Coal :0B cut off ratio is likely to be abnormally high to thetune of 1:25.4) The area in consideration does not conform to the guidelinesset by the Govt. of India for identification of captive mining blocks forthe following reasons :-a) The area in question (RCA) is just adjacent to the CCLleasehold of Giridih Area.b) Adequate infrastructures like road, railway link etc. areavailable 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 approvedthe same may be communicated to CIL & MOC,separately.

Sd/- 14/8

DT (P&P) Sd/- 17/8/98CMDSeen & OK

We may send our comments on above lines.

Sd/- B. Akala 21/8

DT (P&P)”

(Emphasis Supplied)


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)

“CCLCentral Coalfields Limited(A Subsidiary of Coal India Limited)Darbhanga House, Ranchi 834001Phone (0651) 201726, 201687, Fax (91) 0651-3015624, 20479 Gram COLCENT, Telex 0625-201

Ref. No. DG/CCL/Capmin/1662-65Dated 27-8-1998

To,The Chief General Manager (CP)Coal India LimitedCalcutta.

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 ourcomments are as follows:1) The area in question is a free hold area and has not been consideredeither a CIL or a Non-CIL Block.2) The geological reserves in the area is likely to be of the tune of 0.70million tonnes in Lower Karharbari seam only as most of the area has beengoaved out and the available reserves are in the scattered pillars as well aswithin the area between incrop of the seam and mined out zones havingabout 2.5 mtrs. of seam thickness.3) The Coal :OB cut off ratio is likely to be abnormally high to the tuneof 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 followingreasons :-

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.”


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-7PHONE : 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


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 Dated24/27.7.98 enclosing therewith a copy of letter 47011/7(62)/93-CPAM dated21st July, 1998 from Shri B.L. Dass, Under Secretary to the Govt. of India,Ministry of Coal on the above subject and subsequent comments byGeneral Manager(GS), CCL vide his No. DG/CCL/CAPMIN/1662-65 dt.27.8.98. The matter was further discussed with Chairman, CIL. You arerequested to kindly furnish the following information on the above subject:

(i) Whether CCL proposes to take up mining activities in the aforesaid blockand if yes, the timeframe be indicated.

(ii) Whether mining activities in the block will be a source of danger to theadjoining property of CCL.

(iii) Whether the area under consideration conforms to the guidelines set bythe Screening Committee of Ministry of Coal for identification of captivemining blocks. The guidelines set by the Screening Committee of MOC isenclosed 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:


Letter dated 13.11.98 [available at page 28 in D-98].

“Coal India Limited 10, NETAJI SUBHAS ROAD,

CALCUTTA-7PHONE : 220-9980, GRAMS :

COALINDIATELEX : 21-7180 CIL IN

FAXRef. 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 abandonedcoal mining area of Brahmadiha Project, Dt. Giridih, Biharfor 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 ofCoal addressed to Shri N.K. Sharma, Director(Tech), CIL along with a copyof 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


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/98/2483Coal India Ltd., Dated 26/11/98Calcutta.

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 inGiridih coalfield including the aforesaid block.

ii) Apparently mining in this block should not be a source of danger tothe adjoining property of CCL, however, hydrogeological studies may haveto be carried out before starting the mine.

iii) The area under consideration does not conform to the guidelines setby the Screening Committee for the following reasons.

a) Adequate infrastructure like road, rail link etc are availablearound the area. As per the guidelines, preferably blocks in green fieldareas where basis infrastructure like road, rail link etc is yet to bedeveloped should be given to the private sector.

b) The area under consideration is just adjacent to the CCL


leasehold of Giridih Project. As per the guidelines the blocks offered toprivate sector should be at reasonable distance from existing mines andprojects of CIL in order to avoid operational problems.

iv) The context under which Gotetoria East and Est blocks of WCL wasidentified for captive mining is not known to CCL.

A suitable reply may kindly be sent to MOC with a copy to CCL forrecords.

Yours faithfully, Sd/- 26/11 (B.Akala)

Chairman-cum-managing Director, CCL”


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].

“CCLCENTRAL COALFIELDS LIMITED(A Subsidiary of Coal India Limited)DARBHANGA HOUSE, RANCHI 834001Phone (0651) 201726, 201687, Fax (91) 0651-3015624, 20479 Gram COLCENT, Telex 0625-201

The Director (Tech.), Ref. No.......CMD(CCL)/G-1/99/348Coal India Ltd., Dated …....12th March 1999Calcutta.


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 furnishedbelow:

1) The nearest Railway siding is the Central Pit siding of 44/58 boxescapacity, which belongs to CCL and is at a distance of approximately 1.3Kms. from the proposed Brahmadiha Block (RCA Patch). The nearestDistrict Road i.e. Dumri – Giridih Road, is at a distance of approximately 6Kms. from the block.

2) The adjoining working mine belonging to CCL is at a distance of 2.5Kms. from the periphery of the proposed block.

This is also to inform that we do not have any proposal to work inBrahmadiha 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:


Letter dated 16.3.99 Ex. PW 14/D-6 (Available at page 38 in D-36)

“N.K. Sharma COAL INDIA LIMITEDDirector (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 dated6.11.98 on the above subject and our letter No. 007:3483:98 dated 12.11.98acknowledging the receipt of the above letter.

As already indicated, we had referred this matter (BrahmadihaProject, 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 tothe adjoining property to CCL, however, hydrogeological studies may haveto be carried out before starting of mine.2) The nearest Railway siding is the Central Pit siding of 44/58 boxescapacity, which belongs to CCL and is at a distance of approximately 13Kms. from the proposed Brahmadiha Block (RCA Patch). The nearestDistrict Road i.e. Dumri – Giridih Road, is at a distance of approximately 6Kms. from the block.3) The adjoining working mine belonging to CCL is at a distance of 2.5Kms. from the perihery of the proposed block.4) CCL does not have any proposal to work in Brahmadiha Patch in thenear future as the area is free hold area.

However, it is mentioned here that the Brahmadiha Patch is not inthe 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.”



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. letterplaced at S.No. 8/c (p.25/c) regarding identification of 105.153hec. Of abandoned coal mining area of Brahmadiha Project, Dist.Giridih, Bihar for captive mining by Castron Technology Ltd. Thedetails received by them from CCL are as under: -

“1. Apparently mining of this block should not be a source ofdanger to the adjoining property of CCL, however,hydrogeological studies may have to be carried out before startingof mine.

2. The nearest Railway Siding is the Central Pit Siding of 44/58boxes capacity, which belongs to CCL and is at a distance ofapproximately 13 Kms. from the proposed Brahmadiha block(RCA Patch). The nearest Dist. Road i.e. Dumri – Giridih Road, isat a distance of approximately 6 Kms. From the block.

3. The adjoining working mine belonging to CCL is at a distanceof 2.5 Kms. From the periphery of the proposed block.

4. CCL does not have any proposal to work in Brahmadiha Patchin the near future as the area is free hold area.

CIL has further indicated that the Brahmadiha Patch is not in theapproved list of blocks for captive mining.

For consideration please.

Sd/-R.S.Negi 23/3

Sd/-Neera Sharma 30/3/99”

(Emphasis supplied)


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 LtdPh : (0326) 203390, 207886Fax: (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


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 considerationand necessary order :-

1. We applied for grant of mining lease to the State Government of Biharvide our application dated 18.04.96., Along with the application mining planwas also submitted as required for approval. The coal produced from theproposed 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 beutilised for manufacturing of coke and the coke will be utilised for our IronFoundry situated in the Industrial Area of Bokaro.

2. Vide our letter No.CTL/194/97-98/347 dated 24th November 1997 wesubmitted three copies of mining plan in 2 volumes each prepared byapproved 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 andsite clearance.

4. Vide our letter No. CTL/194/98-99/068 dated 9th May 1998 we appliedfor identification and allotment of block although it was not a vergin coalmining block but was an abandoned coal mine.

5. Now we understand that the State Government has recommended ourcase for grant of mining lease for the above abandoned mining area for theapproval of the Coal Ministry.6. We also understand that on reference made by Coal Ministry to the CoalIndia Ltd. (CIL) and Central Coalfields Ltd. (CCL) for their no objection ingrant of mining lease, the said CIL and CCL have cleared the matter asdesired.7. At present the coal is being illegally mined every day in hundreds oftons causing law & order problem in the local area. The State Governmentis not getting any Royalty.

Since the CIL has cleared the matter, State Government has recommendedfor approval of grant of mining lease as per M.M.R.D. Act 1957. We havealso applied to Coal Ministry for identification and clearance of mining asrequired by the executive order of the Ministry, IT IS HUMBLY SUBMITTEDTHAT IDENTIFICATION AND ALLOCATION OF BLOCK MAY BE DONESIMULTANEOUSLY TO AVOID ANY FURTHER DELAY IN THE MATTER.

We hope & trust, you will kindly pass necessary order in the matter andoblige.


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 6235Works : 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 beensubmitted for mining of the abandoned mine. Now application forallocation has been made duly supported by CCL, CIL and theState 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 9 th

May, 1998 had written to Chairman of Screening Committee foridentification of 105.153 ha of abandoned coal mining area of


Brahmadiha block of CCL in the district of Giridih. Alongwith thisletter, a brief note on this mine worked in the past andabandoned in 1916 was also enclosed. In this letter, the partyhas 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 powerplant – Rs. 98 crores➔ Estimated year of achieving trgeted capacity – 5th year➔ Utilisation of coal produced from washing and captiveuse for power generation from rejects

2. The above proposal of M/s Castron Technologies Ltd. wasreferred to Coal India Ltd. And CMPDI for their examination andcomments on 21st July, 1998.

3. This particular abaondoned mine/block is not included in thelist of identified blocks of captive mining. This particular area isnot a greenfield area and as such also does not conform with theguidelines adopted by the Screening Committee of the Ministryof Coal.

4. Coal India vide their letter dated 2.9.98 sent their commentswhich 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 workedextensively through several inclines and pits and to thebest of their knowledge, the entire area has been govedout ecxcept few isolated patches mostly around entriesand between incrop of the seam and mined out zone. ➔ The thickness of the seam is 2.5 metre and not 6 metreas mentioned by M/s Castron Technologies Ltd. ➔ The likely available reserve will be around 0.7 milliontonnes and not 2.21 million tonnes as indicated by M/sCastron Technologies Ltd. ➔ The average stripping ratio will be very high around 1:25 and not 1:13.83 as mentioned by M/s CastronTechnologies Ltd.


5. CMPDI vide their letter dated 17.08.1998 gave the followingadditional comments: -

➔ The mining of this block which has very limitedavailable reserves (around 0.7 million tonnes) will behighly uneconomical. ➔ The proposal to extract barrier betweenabandoned mine and CCL lease-hold cannot be agreedin the interest of safety and is against the mining statues. ➔ The area identified does not conform to theguidelines issued by Ministry of Coal and as such cannotbe considered as a captive block by the IPPs or any otherentrepreneur.➔ In their view, the request of M/s CastronTechnologies Ltd. cannot be agreed to as it is not basedon scientifically legal considerations.

6. The proposal of M/s Castron Technologies Ltd. did not includethe details of the captive end use. During discussion with therepresentatives of M/s Castron Technologies Ltd. on 8 th

September, 1998, this issue was brought to their notice. M/sCastron Technologies Ltd. Vide their letter dated 8 th September,1998 wrote to Advisor (Projects) stating:

➔ After mining the coal and washing the samewhatever middlings available will be utilised for the powergeneration. The washed coal available will be used forproduction of metallurgical coke in their coke oven unit.

➔ The party informed that the coal obtained afterwashing will be utilised for manufacturing of metallurgicalcoke directly by themselves or it will be converted in othercoke oven plants of their company.

7. Taking into account all the information given above, thefollowing emerged: -

➔ The mine was abandoned in 1916. After intensiveextraction of coal in the area, no reliable reserves areavailable in the area. ➔ A very limited reserve of 0.7 million tonnes isavailable in coal stocks/barriers. ➔ The area was worked out and is full of water. Themining activity, if at all possible can only be carried outafter dewatering the entire area. ➔ The party has suggested the annual production of


0.15 million tonnes of coal after a construction period of5 years. Taking the extractable reserves into account, themine will hardly work for 4 to 5 years. ➔ The party has indicated that the overall investmentfor this project will be Rs. 120 crores. With such smallreserve (practically negligible) and the life of the mine tobe only 4 to 5 years, such huge investment does notappear to be viable at all. ➔ M/s Castron Technologies Ltd. have stated in thisletter that middling of the washery shall be used forpower generation but no details of the TPS have beengiven. The block is not in the identified list of captive mining. The block also does not conform to the guidelinesadopted by the Screening Committee as captive blockhas to be in the greenfield area.As the block has not been allotted to the party by theScreening Committee, the question of approval ofrecognition of a competent person to prepare miningplan and submission of mining plan to the StandingCommittee of Ministry of Coal under MMRD Act, 1957did not arise. These facts were communicated to M/sCastron Technologies Ltd by Shri A Banerji, Director,MOC vide his letter dated 6.5.98.➔ The application of M/s Castron Technologies Ltd isdated 9.5.98. Applications after 11.2.97 are not beingconsidered 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 thatthis totally non-viable block with such limited reserves which isnot included in the identified list of captive blocks should not begiven for captive mining to M/s Castron Technologies Ltd.

9. In the light of above, it may not be possible to allot thisabandoned mine to M/s Castron Technologies Ltd.

Sd/-16.4.99

(N.N. Gautam) Advisor (Projects)”



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 toSecretary, 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 youin person on 20.4.99. In this connection we wish to clarify the following:-


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 105hectares (excluding barriers of CCL mines, the geological reserves work out to5.4x105x100x100x1.4 tonnes i.e. 7.49 million tonnes. Taking the coal extracted outof the mine the coal reserves of 5 million tonnes are justifiable in assumption. Thesame can also be confirmed by old plan of the mine, which is available. Thereserves taken for the purpose of mining lease are 2.215 million tonnes. While thereis no reason to doubt the existence of the coal reserves, we agree that in workingthe reserves in coal pillars some difficulty may be faced but the same has beensuccessfully done in several mines of Coal India by opencast mining. We are surethat reserves would be much more than our very conservative assumption of 2.215million tonnes.

2. We propose to wash the coal by setting up a coal washery on non coal bearingarea near the mining project and subsequently install a 10 MW power plant inphases, based on middling/rejects. Until bulk samples of coal are taken, it will not bepossible to estimate the percentage and quality of coal middling and rejects. Wepropose to set up the power plant of 10 MW capacity in 2 phases near the coalwashery. For this purpose we are already in possession of 3 Nos. steam powergeneration sets of 56 MW each (2 sets for installation and one spare).

3. We have engineering workshop at Dhanbad and a Steel Foundry havinginduction furnace and arc furnace which are lying idle at present due to erraticpower supply.

4. We are enclosing herewith a photo copy of the performance budget of Ministry ofPower for 95-96 which clearly specifies at page 45 para 1 that power plantexceeding 25 MW or investment of Rs. 100 crores requires clearance of CEA. Assuch it is not applicable in our case because our investment as well as capacity (10MW) in much less than the specified limit. Apart from the above mentionedcircumstances clearance from State Electricity Board is also not required, becausepower generated will be used by ourselves. We propose to relocate our foundry andengineering works near the power generation facility.

5. We have applied for grant of mining lease for working the reserves left behind inthe abandoned coal mine abandoned in 1916 (not included in list of mines in theNationalization 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 wehave been pursuing the matter vigorously. We understand that the State Govt. afterprocessing the application has forwarded the Coal Ministry for approval of grant ofmining 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 thanthose listed in the list of released blocks. In this connection it is submitted thatalthough not required we have applied for release of this abandoned mine vide ourletter No CTL/194/98-99/068 dated 09.05.98, as pointed by Coal Ministry in courseof discussion to meet the requirement of formality. In this connection our letteraddressed to Secretary Coal letter No. CTL/194/99-2000/025, dated 12.04.99, mayplease be referred, wherein it has been requested that in case of approval of grantof mining lease the formality of allocation of block if required may be completedsimultaneously to avoid unnecessary delay.


7. The area proposed for grant of mining lease has been lying idle since 1916 andas such it is as good as a green field area. No infrastructure has been built in thisarea by CCL who have indicated no intention to work this area because such smallreserve can not be worked by public sector company like CCL, economically. Evennow, we understand working mine of CL at present in Giridih is incurring heavyfinancial loss every year. It may not be out of place to mention that if the lease is notapproved it will encourage illegal mining already going on causing loss to theexchequer and creating loss of life and other law and order problem to life of people.

8. We prepared our investment projection based on reserves theoreticallycalculated and also on the basis of cost of purchase of all new equipments. In viewof the liberalisation of the economy and to be able to compete without efficiency ofthe imported coal at economical level we had to revise our estimation after carefulconsideration, detail of which is given below:

9. Investment Coal Project Investment in Rs.Infrastructure (including land acquisition) 4 CroreHEMM required for OC mining (on Hire purchaseor on lease basis if required) 8.5 CroreCoal Production and OB account 3 CroreContingency 1 CroreWashery (capacity of 1000 Mt tonnes per day 4 CroreTotal 20.5 Crore

As a matter of fact we have an engineering workshop at Dhanbad, and all otherinfrastructure which has designed erected and commissioned a coal washery in oursister concern. Further this washery is working with capacity of 60,000 tonnes of rawcoal per month.

10. Power PlantThree turbines and alternaters(3 Nos. of 5 MW each) already acquired in working condition 75 LakhsBoiler and other accessories 3 CroresTotal 3.75 Crores

11. The previous estimation of investment was based on all new equipments. Wehave also in our mind to put up a irrigation project from the water proposed to bepumped out from the mine for which it was expected that State Govt. will co-operatewith us. Now it is realized that State Govt. is not interested in utilisation of the waterto be pumped out and channelise through irrigation project nor they are prepared togive financial assistance for use of water at this stage. However discussion is goingon and if the project materialises then only the quantum of finance projected by usmay be required at a later date. The high investment shown previously was inexpectation 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 ofclarification of all the points raised in the discussion, Coal Ministry will accord itsapproval to the state govt. as per MMRD Act 1957 for grant of mining lease at theearliest possible.

Thanking you,


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) 2046235Works : Joalgora Basti, P.O.: K.G. Asharam, Dhanbad-828109, Ph. (0326) 203387


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/194/99-2000/058Dated : 21.4.99

To,Additional Secretary, CoalDepartment of CoalMinistry of CoalShastri BhawanNew Delhi

Dear Sir,

We have applied for mining lease for Brahmadiha Coal project in GiridihCoal Field of Bihar on 18.4.96 under MMDR Act 1957. The Coal reservesproposed to be mined in lease area applied by us are reserves left in themine, which got closed in 1916. This mine was not included in the list ofmines given in the coal nationalization acts. Since submitting our application we have been vigorously pursuing thematter. Now the State Govt. after processing our application has forwardedthe same to Ministry of Coal for according approval. Coal India has also


given clearance for this lease as CCL does not want to work this area. Aspointed by Ministry of Coal. We also made a request for allocation of mineto us to meet the requirement of the executive order for allocation ofmine/block passed by Ministry of Coal. As considerable time has elapsedsince we submitted the lease application, we have made a request vide ourletter dated 12.4.99 addressed to secretary coal to complete the formalityby Ministry for allocation of block and approval of our mining leasesimultaneously to save time.We have also discussed the matter with Shri N.N. Gautam, Advisor Coal toclarify all queries, copy of the letter addressed to Shri Gautam in this regardis enclosed. We request you for early action on our application. Thanking you

Sincerely Yours,For Castron Technologies LimitedSd/-Director



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


sheet page 11 in D-38:

“In the light of the representation received from M/s CastronTechnologies 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:


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. GautamAdviser (Projects)Ministry of CoalNew 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 theabove matter our adviser Shri M.L. Dugar met you o 20.04.99 and clarifiedthe points raised by you. In detail, these points were also clarified vide ourletter 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 lastingfor 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%) ofwhich is of fabricated material at our sister concern. But it is out of use atpresent due to lower demand of met coke on account of dumping of coke inIndia. The washery will be shifted near to the proposed mining site. Afterexhaustion of coal this can be again shifted to a new source of coal supplyaccording to the prevalent circumstances at that point of time. Since thiswashery was in use for the last couple of years, the depreciated value ofthis washery is very low.


2. Regarding use of washed coal as stated earlier it is proposed to beused for manufacturing of met coke for our unit in Bokaro Industrial Area.This coke will be manufactured at a unit for which industrial license wasgranted by Coal Ministry. The production capacity of the said coke oven unitis lying idle in view of the uneconomical market condition already statedabove.

We hope and trust this will clarify all the issues and you will be kindenough to recommend our case as proposed by the State Government.

Thanking you,

Sincerely yours,for Castron Technologies Ltd.Sd/-Director.

(Emphasis supplied)



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:


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 98for identification of 105.153 ha of abandoned coal mining area ofBrahmadiha block of CCL in the district of Gridih was examinedand not found feasible as the total investment was shown to beRs. 120 crores for a production level of 0.15mtpa giving a veryhigh specific investment of Rs. 8000 per tonne of coal.

The earlier proposal was also lacking in detail as it did notinclude the details of the captive power plant where the washerymiddlings were supposed to be utilised. The block is not being inthe identified list of captive mining and also not in the greenfieldarea were the other factors not fulfilling the requirementnecessary for allocation of the block for captive enduse.

M/s Castron Technologies Ltd. On 12.5.99 representedtheir case to MOS (C). In the light of the representation receivedfrom the party, MOS(C) directed to re-examine the case (page-11/N). In their representation the party have clarified certainissues as regard to setting up of washery, details of the captivepower plant, investment in the project etc. Based on theseclarifications/revision of the proposal, the case has been re-examined and the following points emerged.

Though the mine was abandoned in 1916, accordingto the party the reserves estimation of 2.215mt is on theconservative side.

The life of the mine @ 0.15mtpa production will workout to about 15 years.

The block could not be included in the captive minelist as it being an abandoned mine. However, aclearance from CIL could be possible.

The proposed washery would have to be providedcoal from some other source after 15 years or thewashery would need to be dismantted/re-located.

The investment in the mine, washery and powerplant has been reworked and will be of the order of Rs.24.25 Crores.

The power plant will have a capacity of 10MW to beachieved in 2 phases of 5MW each. Three steam powergenerating units of 5MW each (2 sets for installationand one spare) are available with the party and shall beshifted to the site.

At a production level of 0.15 mtpa and 100% of the coal


being fed to the washery, the middlings available may only besufficient for a 5MW capacity power plant and not 10MW asproposed by the party.

The party has engineering workshop at Dhanbadand a steel foundry having induction furnace and arcfurnace which are lying idle due to erratic power supply.

These facilities are proposed to be relocated nearthe proposed power generation facility.

The mine is an abandoned mine and there is noworking mine belonging to CCL within the vicinity of2.5km.

CCL does not have any proposal to work in this areaand it will be in the national interest to exploit thesereserves rather than letting them to be lost forever orallowing them to be left for unsafe illegal mining activity.

The party has clarified that the previous estimation ofinvestment was based on all new equipments and also includedan irrigation project based on the water to be pumped out of themine. This has not been considered in the revised proposal asthe State Govt. have not shown interest for the time being.However, before any coal is produced from this area, large scalepumping of water is inescapable and party will have to incureexpenditure in dewatering.

In the light of the clarifications/revisions in the earlierproposals of May, 98 now given by the party specially in respectof feasibility of the project in view of exceptionally highinvestment, captive power plant and use of power generated andthe adequacy of mineable reserves to sustain activity for atleast15 years, it may be considered by the Screening Committee toallot this abandoned mine to M/s Castron Technologies Ltdsubject to the following:

i) The application of the party for allocation of a block is of9.5.98 which is after 11.2.97 - a date on which new coalpolicy was announced. Since then a decision has beentaken in MOC to consider cases of allotment of captiveblocks for applications received after 11.2.97. This casecan now be proceeded with.

ii) Hydrogeological studies to be carried out by the partywith a view to see that dewatering of this mine does notseriously affect the hydrogeological balance of area.

iii) Extraction of coal barrier between the abandoned mine


and CCL lease-hold shall not be permitted.

The representative of M/s Castron Technologies Ltd metthe Adviser (Projects) on 18.5.99 and handed over a letter dtd.18 Th May, 99 giving more clarifications on its earlier proposal. Ithas been clarified by the party that the washery will be relocatedafter exhaustion of coal reserves in the mine. They also clarifiedthat the washed coal will be used for manufacture of met coke intheir coke oven unit presently lying idle for use in another unit oftheir's in Bokaro industrial area.

We may write to CIL to send their comments in thelight of above position.

If this is approved, the proposal can be considered in thenext meeting of the Screening Committee to be held soon.

Sd/- 20.05.99.

(N.N. Gautam)”


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 thecriterion of minimum size decided recently in another file relatingto 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.


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 wasabandoned in 1916 when the major reserves of this mine wereexploited. As per the technology available for working undergrounddeposits in the early part of this century, some mineable reservesmay be left in the mine which is now full of water. The remanantreserves are estimated to be .215 million tonnes. These reservesare very roughly estimated based on some of the old plansavailable. These reserves have been presumed to be lost for everand no large scale mining is possible for these reserves. The partyhas applied for working out these mineable reserves by opencastmining. The party has proposed to have an annual production of0.15 million tonnes from this mine and with this production,considering the estimated reserves given above by the estimatedreserves may last for about 15 years.

2. CCL/Coal India has no programme of working these reserves atany point of time. This abandoned mine cannot be a part of the listof captive mining blocks.

3. As per recent guidelines, captive block to be worked out byopencast method is to have a minimum production of 1.0 milliontonnes per annum. The mine being an abandoned mine andhaving very limited reserves does not get in the criteria of a captiveblock having a minimum output programme of 1.0 million tones perannum. Either the reserves are permitted to be exploited by privateparty with a small production to the tune of 0.15 million tonnes asproposed 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 atpage 12/N. The mine being a abandoned mine, strictly speakingdoes 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 factsmentioned above.

5. The party has informed vide their letter dated 12th April, 1999that they have applied for grant of mining lease to the StateGovernment of Bihar on 18.4.96 (p42/Cor.)

6. If agreed, the matter may be put up for consideration of theScreening Committee with all the facts mentioned above.

For orders.


Sd/-(N N Gautam)

Adv (Projs) 3.6.99

Addl. SecretaryAdvisor (P) As proposed

Sd/- P.K. Banerjee

Additional Secretary.”


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, CastronCastron Dhanbad, Bihar – 826 004 Technologies Ltd.

Ph : (0326) 203390, 207886Fax: (91326) 207455

Ref. No- CTL/194/99-2000/059Date- 02.06.1999

Additional SecretaryMinistry of Coal,Shastri Bhawan,New Delhi.

Sub:- Approval of the Central Government for Grant of Mining Lease ofabandoned Coal Mine for captive use of washing, generation of electricity inGiridih District in Mouzas, Biswasdih, Bhorandiha, Tikodih, Chunjka andBuriadih 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


Dear Sir. In the above matter we have to submit as follows: -

1. The mine was abandoned in 1916 when technology for de-wateringand mining was little known. The foreign company, which was workingthe mine, was least concerned about the conservation of coal. Theprice 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 theonslaught of dumping of coal and coke in India at a price below the costof production in the originating country.

3. In these circumstances we made a lot of research to find out theresources which can be exploited in the changed circumstances ofadvanced technology and with modern equipment to tackle the problemof make of water. This proposal has been prepared by a senior retiredmining engineer Shri M.L. Dugar who had been a Director in CMPDIand had also worked in various capacities in the subsidiaries of CoalIndia Ltd.4. The reserve of the left out coal is more than 7 million tonnes but tobe very conservative, we took a reserve of 2.215 million tonnes, whichat least according to our calculation can economically be mined. It maybe more and not less.

5. As a matter of fact on a reference made by Coal Ministry to CoalIndia Ltd. (CIL) and in turn a reference made by CIL to CCL, it wasreported to your Ministry that they are not interested in working such asmall reserves and the project in question is far away from any of themine being worked in Giridih Coal Fields.

6. According to the provisions of MMRD Act, an application has beenmade by us for grant of mining lease. This said application has beenrecommended for approval as required according to section 2 of theMMRD Act.

7. This is not a greed field area as such question of allotment of blockin this case in our opinion does not arise. To meet the technicalformalities we have already applied for allotment of mine to theScreening Committee. As such in case if it is required this technicalformality may please be complied with along with the consideration ofthe 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 thematter and do the needful at an early date.

Thanking you,Sincerely yours,For Castron Technologies Ltd.Sd/- Director


Copy forwarded to Shri N.N. Gautam, Advisor (Project), Ministry of Coal, NewDelhi with a request that our application may be considered and finalised atthe earliest.

Mumbai Office: 84 Maker Chambers III, Nariman Point, Mumbai – 400 021, Ph : 285 2736 Fax: (022) 204 6235Works : 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 CastronTechno-logies Ltd.

WashedCoal forMetallurgicalcokemanufacturemiddlings ofpowergeneral inCPP

2x5MW

0.15mtparawcoal

Identificationof 105.153hec. ofabandonedcoal miningarea ofBrahmadihaproject,Distt.Giridih,Bihar forcaptivemining.

This is a mine which was abandonedin 1916 whereabout 2.215 mt. ofreserves are likely to be available inthe remanent coal pillars. Theabandoned mine is full of water. Thisbeing an abandoned mine, is doesnot figure in the list of identifiedblocks for captive mining. Thesereserves are not proposed to beexploited by CCL at any point of time.As per the recent guidelines, captiveblock to be worked out by opencastmethod is to have a minimumproduction of 1 mt. Being anabandoned mine with very smallreserve this does not fit in the criteriaof a captive block and the availablereserves would go unexploited. Hereis a proposal for exploitation of thesereserves at the rate of 0.15 mtpa.Screening Committee may considerallotment of the abandoned mine inview of conservation of coal orotherwise.


110. The case of M/s CTL was thereafter considered by the 14 th

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). Hestated that the party has requested for the allotment of 105.153ha. of abandoned coal mining area of Brahmadiha block of CCL


in the district of Giridih which was abandoned in 1916 and is nowfull of water. The extractable reserves available in the mine areroughly estimated to be 2.215 million tonnes in the remanentpillars and no large scale mining is possible for these reserves.The party proposes to extract these reserves by opencastmining @ 0.15 million tonnes per annum. With this productionthe estimated reserves would last for about 15 years.

The representatives of CCL and CIL informed the Committeethat CCL/Coal India has no programme of working thesereserves at any point of time and according to them there is noworking mine belonging to CCL within the vicinity of 2.5km.

On a query on end use of coal, the representative of the partyinformed that the raw coal will be washed in their washery toobtain washed coal for manufacturing metallurgical coke in theircoke oven plant presently lying idle for use in another unit oftheir's in Bokaro industrial area. It was clarified by the party thatthe washery will be relocated after 15 years when the coalreserves in the mine are exhausted.

The middlings produced during washing are proposed to beutilised for generation of power in their 2x5MW CPP which theywould be setting up in two phases of 5MW each.

The Committee noted that as per recent guidelines for opencastcaptive block, the mine does not fit in the criteria of a captiveblock. It further noted that these reserves are either permitted tobe exploited by a private party or the reserves are allowed to belost forever/unsafe illegal mining.

The Screening Committee after detailed deliberation and inview of conservation of coal decided to allot 105.153Ha. ofabandoned coal mining area of Brahmadiha block in GiridihDistrict, CCL subject to the following condition :

i) Hydrogeological studies to be carried out by the partyin consultation with State Ground Water Board with aview to see that dewatering of this mine does notseriously affect the hydrogeological balance of area.

ii) Extraction of coal barrier between the abandonedmine and CCL lease-hold shall not be permitted and incase dams in connection through the barrier are founddamaged shall be effectively reparied.

iii) All precautions will be taken to ensure that fires do notbreak out due to dewatering of the area. If any fire doesbreak 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 becomplied with.

The above will be subject to relaxation of guidelines byMinistry of Coal regarding allotment of blocks with minimumextraction 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 14 th

Screening Committee was processed in the relevant file by Sh. R.S. Negi


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 14 th

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


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:


Note dated 25.05.99, Ex. PW 5/F [Available at page No. 47 in (D-103)]

“No. CMD/SECY/003/127Dated. 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. Agrawalaproposes to send to him. Do we have any comments, on the variousissues 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'sexisting operations. Can it reduce the water availability to CCL, duringsummer months?

Sd/-S.K. Verma

25.4.99D (P & D)

Pl. Study and discuss on 11/5 at 10. 00 AM.

Sd/- (K.K. Khadiya)

7/5GM(PPD)

The matter was discussed on 11/5. Visited RI-III and areport 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 theScreening Committee meeting held on 18/19.6.95.

Sd/- (S.K. Verma) 22.6.99


D(P&D) Sd/- (K.K. Khadiya) 23/6

GM(PPD) Sd/- (B.D. Rudra) 24/6”


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 coalblocks.

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


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 Actwas done on the basis of a Cabinet decision taken in its meeting


held on 5.5.92. In this meeting, the Cabinet considered a Notedated 23.4.92 from the MOC. The proposals in the MOC Notedated 23.4.92 for the Cabinet were, inter-alia, the following :

i) Allowing private sector participation for coal miningfor captive consumption in power generation and otherend-uses which may be notified by the Governmentfrom time to time.

ii) Allowing private sector to invest in, install andoperate coal washeries for the purpose of washing ofcoking and non-coking coal.

3.5.1 The extract of the Cabinet decision in its meeting held on5.5.92 is given below :

“The Cabinet considered the note dated 23.4.92 fromMinistry of Coal and approved the proposals containedin para 10.1 thereof. It was further decided that theusers should be enabled to own the washeries throughlocated in the coal mine area”.

3.5.2 While suggesting a Bill for the June, 1993 amendment tothe Nationalisation Act, the Department of Legal Affairs, Ministryof Law opined that no separate amendment (other than that wasin the 1993 Bill) is needed in the principal Act for allowing theprivate sector to set up coal washeries.

3.5.3 We have not so far allotted any captive coal block for thewashery sector. Since “washery” is also included in the definitionof “mine”, setting up of washeries in the private sector isfacilitated by the June, 1993 amendment but not for extraction ofthe coal by the washery owners. Before the June, 1993amendment, setting up of washeries by private companies wasnot possible. Moreover, washed coal can be sold in the openmarket. The unrestricted end-uses for the washed coal goagainst the spirit of captive consumption for specified end-usesin the June, 1993 amendment. Therefore, it is not possible toallot captive blocks to M/s Castron Technologies Limited and M/sCentral 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


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 newapplicants requirement of coal is for rather small volumeswhich on the face of it can be met by our coal companies.And linked with it is the question of conservation andoptimum size of mining blocks. Economically miningreserves in India are not large and therefore whatever limitedreserves that we have should be exploited wisely.

7. In view of what is stated at paras 2 to 6 above it is forconsideration whether the 17 new applications should betaken up for consideration now or at a more opportune timelater.”

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 pendingbefore can be taken up simultaneously with other applicationsafter the decision has been notified to the nodal ministries andapplications received from them, say in a period of about 14days.

JS (Coal)'s note does make a valid point that every Tom,Dick and Harry should not be able to obtain a captive block. Sowe have to take the precaution for saving our coal blocks fromsuch vultures. Even while proposing the fresh amendment, wehave inserted a clause that the minimum size of the coal mineand such other conditions which may be necessary for the


purpose of coal mining operations by a company can be laiddown by the Government. I have consulted Adv(P) in thisrespect. Scientific mining as an economic unit of coal can bedone in an open cast mine of one million tonnes per yearproduction. Similarly, in under-ground mining, a unit shouldproduce 250 thousands tonnes per year. So MOS(Coal) maykindly lay down the condition that an application for mining of acoal block for quantity less than one million tons per annum inopen cast mining and less than 250,000 tons per annum inunderground mining would not be entertained so as to ensureeconomic/scientific mining of Indian coal.

MOS (Coal) may kindly approve the modification of thisearlier 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/-17/5JS(C)

Sd/-17/5Adv(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


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 14 th 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


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 thereexists 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 smallercoalfields of India. The exploitation of the coalfield was started by Bengal


coal company and East India Railway as early as 1871. Since then themining activity has been vigorously continued. There are 13 coal horizonsin this coalfield. However, upto 1942, the major production of coal wasfrom lower Kurhurbaree seam (the lower most seam in the area) due to itssuperior quality / grade. The mining of younger seams containing inferiorgrade coals was started after 1942. The Giridih colliery had constructed itsown power plant & a coke oven plant with the capacity to produce 60000te / yr / bp hard coke. Since nationalisation of coal mines in 1973, all themines in this coalfield are run by central coalfield Ltd., a subsidiary of coalIndia Ltd. (Central Govt. U/T).

Over 100 pits were sunk and a large number of inclines were drivenby several agencies in this coalfield. Out of the above, 17 pits and aboutsame number of inclines were driven by Ranigunj coal Associates (aprivate company) in the south - east part of the coalfield to work the lowerKurhurbaree seam (the only seam existing in their lease area). The seamhad been fully developed & depillared in whole of their area. However oldplans available show lot of pillars left behind due to sudden collapses. Thepits and inclines had been abandoned and surrendered by RCA in 1916,long before the nationalisation of coal mines took place in the country in1973. These abandoned mines of RCA were not included in the list oftaken 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


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 aswas constituted in MOC.

Issue No. (2): Whether Screening Committee was within its rights toconsider allocation of a non-nationalised and consequently a non-identified coal mine.

Issue No. (3): Whether application of M/s CTL seeking identificationand allocation of Brahmadiha Coal Block i.e. a non-nationalizedcoal mine and consequently a non-identified coal mine wasrequired to be put up before the Screening Committee or it ought tohave 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.


Issue No. (4): Whether allocation made by 14th Screening Committeein favour of M/s CTL for allocation of said abandoned Brahmadihacoal 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


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


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 onundertaking prospecting and mining operations, the procedurefor obtaining prospecting licences or mining leases in respect oflands in which the minerals vest in the government, the rule-making power for regulating the grant of prospecting licencesand mining leases, special powers of Central Government toundertake prospecting or mining operations in certain cases, andfor development of minerals.

31. The Coal Mines (Taking Over of Management) Act, 15 of1973, (for short, ‘Coal Mines Management Act’) was passed,“to provide for the taking over, in the public interest, of themanagement of coal mines, pending nationalisation of suchmines, with a view to ensuring rational and coordinateddevelopment of coal production and for promoting optimumutilisation of the coal resources consistent with the growingrequirements of the country, and for matters connected therewithor incidental thereto.”

32. The Coal Mines Management Act received the assent of thePresident on 31.03.1973 but it was made effective from30.01.1973 except Section 8(2) which came into force at once.Section 3(1) provides that on and from the appointed day (thatis, 31.01.1973) the management of all coal mines shall vest inthe Central Government. By Section 3(2), the coal minesspecified in the Schedule shall be deemed to be the coal minesthe management of which shall vest in the Central Governmentunder sub-section (1). Under the proviso to Section 3(2), if, afterthe appointed day, the existence of any other coal mine comesto the knowledge of the Central Government, it shall by a notifiedorder make a declaration about the existence of such mine,upon which the management of such coal mine also vests in theCentral Government and the provisions of the Act becomeapplicable thereto.

33. Immediately after the Coal Mines Management Act, theParliament 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 coalmines specified in the Schedule with a view toreorganising and reconstructing any such coal minesso as to ensure the rational, coordinated andscientific development and utilisation of coalresources consistent with the growing requirementsof the country, in order that the ownership andcontrol of such resources are vested in the State andthereby so distributed as best to subserve thecommon good, and for matters connected therewithor 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 thesame manner as the corresponding provision of the CoalMines Management Act, namely, a mine “in which there existsone or more seams of coal”. Section 3(1) provides that on theappointed day (i.e., 01.05.1973) the right, title and interest ofthe owners in relation to the coal mines specified in theSchedule shall stand transferred to, and shall vest absolutelyin 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, issatisfied, whether from any information received by itotherwise, that there has been any error, omission or


misdescription in relation to the particulars of a coal mineincluded in the Schedule or particulars of a coal mineincluded in any such coal mine, it may, by notification,correct such error, omission or misdescription and on theissue of such notification, the relevant entries in theSchedule shall be and shall be deemed always to havebeen, 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


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 Actwas further amended. The Statement of Objects and Reasonsof the 1993 Nationalisation Amendment Act reads thus:

“Considering the need to augment power generation andto create additional capacity during the eighth plan, theGovernment have taken decision to allow private sectorparticipation in the power sector. Consequently, it hasbecome necessary to provide for coal linkages topower generating units coming up in the private sector.Coal India Limited and Neyveli Lignite CorporationLimited, the major producers of coal and lignite in thepublic sector, are experiencing resource constraints. Anumber of projects cannot be taken up in a short span oftime. As an alternative, it is proposed to offer new coaland lignite mines to the proposed power stations in theprivate sector for the purpose of captive end use. Thesame arrangement is also considered necessary forother industries who would be handed over coal minesfor captive end use. Washeries have to be encouragedin the private sector also to augment the availability ofwashed coal for supply to steel plants, power houses,etc.


Under the Coal Mines (Nationalisation) Act, 1973, coalmining is exclusively reserved for the public sector,except in case of companies engaged in the productionof iron and steel, and mining in isolated small pocketsnot amenable to economical development and notrequiring rail transport. In order to allow private sectorparticipation in coal mining for captive use for purpose ofpower generation as well as for other captive end usesto be notified from time to time and to allow the privatesector to set up coal washeries, it is considerednecessary to amend the Coal and Coal Mines(Nationalisation) Act, 1973.The Coal Mines (Nationalization) Amendment Bill, 1992seeks to achieve the aforesaid objectives.”

37. Section 3 of the CMN Act was amended and thereby inclause (a) of sub-section (3) for item (iii), the following wassubstituted, 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 CentralGovernment 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


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)


(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 thewashery sector. Since “washery” is also included in the definitionof “mine”, setting up of washeries in the private sector isfacilitated by the June, 1993 amendment but not for extraction ofthe coal by the washery owners. Before the June, 1993amendment, setting up of washeries by private companies wasnot possible. Moreover, washed coal can be sold in the openmarket. The unrestricted end-uses for the washed coal goagainst the spirit of captive consumption for specified end-usesin the June, 1993 amendment. Therefore, it is not possible toallot captive blocks to M/s Castron Technologies Limited and M/sCentral 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 14 th 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/7and Lohara West/Utkal B2 blocks for supply of coal to theirtwo washery projects. The representative of the partyinformed the Committee that the washed coal from these twowasheries 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 ofthe end users mentioned by the party and in view of thatdecided 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.


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 ofCoal 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 heldin the middle of June, 99. You may be aware that earlier CIL with theapproval of CIL Board had identified coal mining blocks for captiveexploitation. Subsequently, additional blocks were also identified andapproved by CIL Board and reported to the Ministry. I shall be grateful ifyou kindly furnish to this Ministry the list of coal mining blocks identifiedand approved by CIL Board as on date (this would include the blocksearlier reported and those additional blocks identified later and reportedto the Ministry) with appropriate modifications, if warranted as this willform the basis for the purpose of allocation of new blocks to the applicantparties in the meeting of the next Screening Committee. The list shouldinclude 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 ofpayment of GR cost in respect of the blocks already allotted. As thisinformation is needed very urgently, may I request that the concernedauthorities may be directed to prepare the requisite information on toppriority basis and available the same to the Ministry latest by 28.5.99positively.

Yours sincerely,

(N.N. Gautam)

Shri P.K. Sengupta,Chairman,10, Netaji Subhas Road,Calcutta.


Copy to:-1. Director (Tech.), Coal India Ltd., 10, Netaji Subhas Road, Calcutta – 700 0012. CMD, CMPDI, Gondwana Place, Kanke Road, Ranchi – 834 008

Sd/- 20/5/99(N.N. Gautam)”


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 Limited10, NETAJI SUBHAS ROAD, CALCUTTA-700001

Phone: 220-9980, GRAMS : COALINDIATELEX: 21-7180 CIL IN

Ref. No. CIL/CCP/Capmin/1699 Dated 27 May, 1999

ToThe 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, CIlwith copy to the undersigned.

As desired by you, I am furnishing the details of captive miningblocks in the annexures as listed below: -

ANNEXURE - 1: First list of identified 56 mining blocks (Western part of Gopal


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, totalgeological reserves, state in which located, etc. including latest status ofpayment of GR cost have been included.

Kindly acknowledge receipt.Yours faithfully,

Encl. : Annexures 1-4Sd/-

(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


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.


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 couldnot have identified a block which is not in the list of identifiedblocks prepared by CIL. First of all, CIL is not the only PSUworking in mining and there are SECL and NLC as well,which are independent of CIL having blocks under theirjurisdiction. Therefore, the identified list prepared by CIL islimited to the blocks under its jurisdiction placed by theGovernment of India after nationalization of blocks by theCMN Act from amongst the schedule of CMN Act and thoseacquired by CIL thereafter under the CBA Act. It is submittedthat the CIL has no jurisdiction whatsoever to include anyblock which is not nationalized or not acquired by it underthe CBA Act. CIL has admitted this position in its faxmessage sent to MoC on 08.11.1995 [Pgs. 74-77 of D-77].The same read as follows:

S.No

Name of the Block & Area Action to be taken

1 Sarisatoli Block Total area of the Block 600 HA

a) Area for which ECL/CILdoes not hold any leasefor 20 hectors approx..

Since the lease is not held byECL/CIL and it was not anationalised mine or lease the stateundertaking power generatingagency can obtain the lease directlyfrom the State Govt. with theconcurrence of Central Govt as perthe provisions of MMRD Act andCoal Mines Nationalisation Act readwith the necessary amendment asexpressed by ED (Legal) in letter no.1128 dated 28.10.95 point No (a)copy enclosed.


2 Tara East Total lease hold area 350HA (approx.)Gardhemo 20HA (approx.)not nationalised andhence no lease exists withECL/CIL

Since the lease is not held byECL/CIL and it was not anationalised mine or lease the Stateundertaking power generatingagency can obtain the lease directlyfrom the state Govt. with theconcurrence of Central Govt. as perthe provisions of MMRD Act andCoal Mines Nationalisation Act readwith the necessary amendment asexpressed 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 inthe lease hold of their subsidiaries it cannot be included bythem in the identified list of captive mines and lease of saidmines can be granted by the concerned State Government,concurrence of Central government, under the MMDR Act,1957. Yet, on specific directions of Screening Committee ofMoC, these 2 blocks were subsequently included in the list ofidentified 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


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


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


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


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-CAGovernment 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 ofCoal from such companies requesting for ownership and operation ofcaptive coal mines. For Screening of such applications/proposals it hasbeen decided to constitute a Screening Committee comprising of thefollowing members: -

1. Additional Secretary, Ministry of Coal - Chairman.2. Adviser (Projects), Ministry of Coal - Member- Convenor3. Joint Secretary & Financial Adviser,

Ministry of Coal - Member4. Representative of Ministry of Railways - Member5. Representative of Ministry of Power - Member


6. Representative of concernedState Govt. (Revenue Deptt.) - Member

The Committee will meet once in a month and examine the proposalsreceived from various parties.

Sd/-(S. Krishnan)

Under Secy. To the Government of India

To1. All Officers.2. All Sections.3. The Chairman, Railway Board, Rail Bhawan, New Delhi4. 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 CompanyLimited, 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


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


under:

OM dated 30.07.93 [available at page No. 38 in file Ex. PW 23/A (colly)]

“No.13011/3/92-CAGovernment 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 evennumber dated 14.7.1992 constituting a Screening Committee forScreening proposals received for captive mining by private sector powergeneration companies, it has been decided to revise partially thecomposition 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-Convenor3. JS & FA, Ministry of Coal, New Delhi - Member4. Representative of Ministry of Railways, New Delhi - Member5. Representative of Ministry of Power, New Delhi - Member6. Representative of concerned State Govt. (Revenue Deptt.) - Member7. Director (Technical) CIL, Calcutta. - Member8. Chairman/Managing Director CMPDIL, Ranchi. - Member9. CMD/of concerned subsidiary companies of CIL - Member

Sd/- 3/8/93(J.L. Meena)

DEPUTY SECY. TO THE GOVERNMENT OF INDIA”


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)


“Agenda Note for the first Meeting of the ScreeningCommittee for Screening proposals for captive mining bypower generation company 14th July, 1993 at 2.30 P.M. inRoom No. COL Wing, Shastri Bhawan, New Delhi.

Agenda item No. 1.Formulation of guidelines for identification and allotment ofsuitable blocks for captive mining.

Considering the need to augment power generation and tocreate additional capacities the Government had taken adecision to allow private sector participation in the private sector.Consequently it has become necessary to provide for coallinkage to power generating units coming up in the private sector.Coal India Ltd. are experiencing resource constraints andtherefore a number of projects cannot be taken up in a shortspan of time. As an alternative it is proposed to offer new coalblocks to the proposed power generating companies / powerstations in the private sector for captive end use. For thispurpose the Coal Mines (Nationalisation) Amendment Act, 1993has been published in the Gazette of India on 9.6.93.

The CIL Board has considered the leasing of blocks to theprivate sector and the Board's decisions are as under:-(i) The blocks in green field areas where basic infrastructurelike road, rail links and power lines are not immediately available,should only be given to private sector. The areas where CIL hasalready invested in creating such infrastructure for opening newmines, should not be handed over to the private sector.(ii) The blocks offered to private sector should be away fromthe existing mines and projects of CIL.(iii) Blocks already identified for development by CIL shouldnot be offered to the private sector.(iv) Private sector should be asked to bear the full cost ofexploration in these blocks which will be offered to them.

The Committee may like to consider these points forformulation of guidelines for identification and allotment ofsuitable 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


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 forscreening proposals relating to captive mining by powergenerating companies held on 14.7.1993 in the Ministry of Coal,Shastri Bhawan, New Delhi. . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . 3. Initiating the discussion, the Chairman outlined theobjectives of the Screening Committee which had been set up bythe Ministry of Coal. The Chairman clarified that primarily theCommittee would be identifying suitable blocks for captivedevelopment by power generating companies.4. Agenda Item No. 1 – Formulation of guidelines.

The discussion proceeded on the basis of draft guidelinescirculated with the agenda papers.

The representatives of the Ministry of Power felt that toorestrictive a framework would demotivate prospective investors.The representatives of the coal sector, however, felt thatunrestricted access to coalfields in the vicinity of the presentworking mines of CIL or in the areas surrounded by such CILworkings would result in avoidable interference. They also feltthat their development plans also should be kept in view whiledeciding blocks to be offered for captive mining. They alsopointed out that significant investments are made by the coalcompanies in the general infrastructure which may be serving inthe proposed blocks. The representatives of the Railwayscautioned that the existing movement plans should not bedisturbed by this policy of allowing private investors to operatemines for their captive use for the power plants.5. While conceding that all these were relevantconsiderations, the Chairman pointed out that the primaryobjective of the new scheme was to mobilise additionalresources for the supply of coal to the expanding power sector.Therefore, we should welcome the private parties entering thefield while at the same time taking proper care of the legitimateconcerns of the coal companies. It is only equitable thatwherever investments have been made by the coal companies in


exploration and specific infrastructural development, privateinvestors taking advantage of the same would have tocompensate the coal companies. Similarly, the location of thesenew blocks would have to take into account operational problemsresulting from too close a proximity to the existing working of thecoal companies. In regard to development plans of thecompanies wherever they are backed by financial resources inhand or in sight, the same will be definitely kept in view. So far asthe railways are concerned it was clarified that the existingprojects and their linked movement plans are not to be affectedby new investment proposals which are only going to result in anadditionality to the operations for which, of course, the railwayswill have to plan to strengthen their infrastructure either on theirown or with “support” investments from the intending privateenterpreneurs.6. Summing up, the chairman mentioned that the proposedguidelines wold only be used as broad parameters in support ofthe new policy and not as rigid boundary lines for excluding theentry 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 basicinfrastructure like road, rail links etc. is yet to be developedshould be given to the private sector. The areas where CIL hasalready invested in creating such infrastructure for opening newmines should not be handed over to the private sector, except onreimbursement of costs,(ii) The blocks offered to private sector should be atreasonable distance from existing mines and projects of CIL inorder to avoid operational problems.(iii) Blocks already identified for development by CIL, whereadequate funding is on hand or in sight should not be offered tothe private sector.(iv) Private sector should be asked to bear full cost ofexploration in these blocks which may be offered.

It was also agreed that while discussing proposals ofpower generating companies and identifying blocks therequirement 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


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.


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 forscreening proposals relating to Captive Mining by powergenerating companies and companies engaged in themanufacture of Iron and Steel held on 27.09.93 at 3 p.m. inthe Ministry of Coal, Shastri Bhawan, New Delhi.”


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 theScreening Committee held on 18/19.6.1999 at ScopeBuilding, Lodi Road, New Delhi, under the Chairmanship ofAdditional Secretary (Coal) for screening proposals relating tocaptive mining by power generating companies andcompanies engaged in the manufacture of Iron, Steel andCement.

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-CPAMGovernment of India

Ministry of Mines and MineralsDepartment 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 engagedin generation of power and manufacture of iron, steel and cement.


In supersession of this Ministry's Office Memoranda No.13011/3/92-CA dated 14.7.92 and 5.8.93, a Screening Committee forscreening proposals for allocation of coal / lignite blocks for manufactureof iron/steel, captive production of power and production of cement in thepublic/private sector is reconstituted as under:

1. Additional Secretary Ministry of Coal - Chairman.2. Adviser (Projects) Ministry of Coal -Member-Convenor3. Joint Secretary & Financial Adviser Ministry of Coal - Member4. Joint Secretary (LA) Ministry of Coal - Member5. Representative of Ministry of Railways New Delhi - Member6. Representative of Ministry of Power New Delhi - Member7. Representative of Concerned State Govt. (Revenue Deptt.) - Member8. Director (Technical), CIL, Calcutta - Member9. 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 7000015. 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”


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


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 14 th 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


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


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 14 th 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 aswas 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.


Issue No. (2): Whether Screening Committee was within its rights toconsider 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 identificationand allocation of Brahmadiha Coal Block i.e. a non-nationalizedcoal mine and consequently a non-identified coal mine wasrequired to be put up before the Screening Committee or it ought tohave 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


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.


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


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 Jagaldaggamine block in Bihar to meet their expansion needs. Thisrequest was not accepted by the Ministry of coal as the blockwas not included in the list of captive mining blocks. Thecompany subsequently requested for Tubed block in theAuranga coalfield having 250 mt. reserves. The Committee feltthat the new block requested for was too large for the needs ofthe company. The Committee advised the company to ineractwith CCL and CMPDIL to examine the possibility of sub-blocking of Tubed block or suitability of mining Chiru blocklikely to contain 87 mt. of reserves. This was agreed to by therepresentative of INDALCO and a report will be submitted tothe Committee within 3 months time. AGENDA ITEM NO. V Sponge Iron Plant (Review)1. M/s.PRAKASH INDUSTRIES LTD. - Sponge Iron Plant inM.P.

The party had earlier been asked to interact with SECL


to ascertain the suitability of Choita block in the Hasdeo-Arandcoalfield. SECL have already recommended that Choita blockregionally explored (60 mt.) can be allocated to M/s PrakashIndustries Ltd. It falls in the Hasdeo Arand coalfield which hasentirely been reserved for captive mining. In the light of thisposition, the Screening Committee will consider allotment ofthe Choita block to M/s Prakash Industries Ltd. Once this blockis included in the list of captive mining block by CIL. Thecompany has agreed to conduct detailed exploration of blockon its own. The screening committee asked CIL to takenecessary action for inclusion of this block in the identified listof captive mining block.”

Minutes of 10 th Screening Committee meeting held on03.04.96 available in file Ex. DW 2/B (Colly) (available atpage 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 blocksrequested for by them is available for captive development atpresent. They were advised to inter-act with CCL to considerwhether any of the blocks identified by that Company would beacceptable to them and report back to the Committee. Theywere also asked to approach the Ministry of Steel for theirspecific recommendation/views.

15...........

16...........

17. M/s Nagpur Alloys Casting Ltd. – Integrated Steel Plantat Siltara, Raipur, M.P.

The Company was informed that none of the blocksrequested for by it was available for captive development atpresent. The company was advised to iner-act with CCL, butthe Company indicated being not interested in obtaining miningblocks in CCL command area. The matter was, therefore,dropped.

18. M/s Nippon Denro Ispat Ltd. – Integrated Steel Plant atDolvi, Raigad, Maharashtra.

The Company was informed that none of the miningblocks requested for by it was avialable for captivedevelopment at present. The proposal was, therefore,dropped.”


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


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, 14 th

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:


“16. M/s Castron Technology Ltd.The details of the proposal were given by Adviser (Projects). Hestated that the party has requested for the allotment of 105.153ha. of abandoned coal mining area of Brahmadiha block of CCLin the district of Giridih which was abandoned in 1916 and isnow full of water. The extractable reserves available in the mineare roughly estimated to be 2.215 million tonnes in the remanentpillars and no large scale mining is possible for these reserves.The party proposes to extract these reserves by opencastmining @ 0.15 million tonnes per annum. With this productionthe estimated reserves would last for about 15 years. The representatives of CCL and CIL informed the Committeethat CCL/Coal India has no programme of working thesereserves at any point of time and according to them there is noworking 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 toobtain washed coal for manufacturing metallurgical coke in theircoke oven plant presently lying idle for use in another unit oftheir's in Bokaro industrial area. It was clarified by the party thatthe washery will be relocated after 15 years when the coalreserves in the mine are exhausted.


The Committee noted that as per recent guidelines foropencast captive block, the mine does not fit in the criteria of acaptive block. It further noted that these reserves are eitherpermitted to be exploited by a private party or the reserves areallowed to be lost forever/unsafe illegal mining. The Screening Committee after detailed deliberation and in viewof conservation of coal decided to allot 105.153Ha. ofabandoned coal mining area of Brahmadiha block in GiridihDistrict, CCL subject to the following condition:i) Hydrogeological studies to be carried out by the party inconsultation with State Ground Water Board with a view to seethat dewatering of this mine does not seriously affect thehydrogeological balance of area.ii) Extraction of coal barrier between the abandoned mine andCCL lease-hold shall not be permitted and in case dams inconnection through the barrier are found damaged shall beeffectively 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 shalleffectively be dealt by the party. iv) All mining operations shall be carried out with due approvalof DGMS and all provision of law shall be complied with.The above will be subject to relaxation of guidelines by Ministryof Coal regarding allotment of blocks with minimum extraction of1.00 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 14 th

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 infavour of any person other than the Government, company or


corporation, referred to in Cl.(a):

Provided that the Government, company or corporation to whoma lease for winning or mining coal has been granted may grant asub-lease to any person in any area on such terms andconditions as may be prescribed in the instrument granting thesub-lease, if the Government, company or corporation is satisfiedthat—

(i) the reserves of coal in the area are in isolated small pockets orare not sufficient for scientific and economical development in aco-ordinated and integrated manner, and

(ii) the coal produced by the sub-lease will not be required to betransported 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.


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 theoffence of cheating and also theft i.e. section 420 IPC and section 379IPC as framed against the private accused persons, I shall be brieflydealing with the circumstances leading to transfer of lease in somefurther 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


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 MININGLIMITED

BRAHMADIHA OPENCAST COALMINE PROJECT

Ref.: CML/BOCP/MoC/2012-13/00915th/24th May, 2012To,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


located in Giridih district of Jharkhand, is leased to our company withmeager resources of approximately 2.2 million tonnes and targeted annualproduction of 1.5 lakh tonnes per annum. We are in a position to go incommercial production in less than six months and seek Ministry of Coal'sclarification and guidance as sought by us by our above referred letters ofFebruary 2006 and July 2011.

We beg to submit briefly the following facts on the issue of allocation ofBrahmadiha coal mine made under Section 3(3)(c) of the CMN Act, 1973by the Ministry of coal and clarification on the end use which was NOTspecified by the Ministry of Coal in the allocation letter.

1) Ministry of Coal allocated Brahmadiha coal mine as per letter1 dated1st 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 detaileddeliberation the Screening Committee had decided to allot 105.153hectares of abandoned coal mining area of Brahmadiha coal mine and forconservation of coal. The above referred Screening Committee minutesare extracted below:

“On a query on end use of coal, the representative of the partyinformed that the raw coal will be washed in their washery toobtain washed coal for manufacturing metallurgical coke intheir coke oven plant presently lying idle for use in another unitin their Bokaro industrial area. It was clarified by the party thatthe washery will be relocated after 15 years when the coalreserves in the mine are exhausted.

The middlings produced during washing are proposed to beutilized for generation of power in their 2x5 MW CPP whichthey would be setting up in two phases of 5 MW each.

The Committee noted that as per the recent guidelines foropencast captive coal block, the mine does not fit in thecriteria of a captive block. It further noted that these reservesare either permitted to be exploited by a private party or thereserves are allowed to be lost forever / unsafe illegal mining.

The Screening Committee after detailed deliberation and inview of conservation of coal decided to allot 105.153 Ha of


abandoned coal mining area of Brahmadiha block in GiridihDistrict, CCL.....” (Emphasis added)

Neither in the allocation letter nor in the Screening Committeeminutes is there any mention of captive use/specified end use as definedunder Section 3(3)(a)(iii) of the CMN Act whereas there is clear mention inthe minutes that the mine does not fit the criteria of captive block. Thisalso amply clarifies that there is no requirement of setting up of a specifiedend use since no end use was defined and associated with the allocatedcoal block.

2) The Screening Committee also recorded in their minutes that the minedoes not fit in the criteria of a captive block. It further noted that thesereserves 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 30 th July 1999

___________________________________________________________Page 3 of 7

are allowed to be lost forever/unsafe illegal mining. During the discussionheld with the company representative with the Screening Committee, thecompany representative informed “that the raw coal will be washed in theirwashery to obtain washed coal for manufacturing metallurgical coke ovenplant. The middlings produced during washing are proposed to be utilisedfor generation of power in their 2x5 MW CPP which they would be settingup in two phases of 5MW each.” HENCE THE END USE AS PERMINUTES OF THE SCREENING COMMITTEE COULD BEMETALLURGICAL COKE WHICH IS AN INTERMEDIARY RAWMATERIAL FOR STEEL MANUFACTURING. Also as per the specifiedend uses mentioned under Section 3(3)(a)(iii) of the CMN Act, the end usecould be washing of coal. However, since Brahmadiha coal mine is asmall and isolated mine and allotted under section 3(3)(c), its allocationwas done without any specified end use under section 3(3)(a)(iii) of CMNAct.

3) Moreover, in the allocation letter no condition pertaining to captive enduse plant is incorporated since the block clearly was an abandoned blockand 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 orpurpose.


5) The mining lease prior approval of the Ministry of Coal was given on18th June 20014. In the mining lease approval surprisingly the conditionwas incorporated that “the coal produced from the captive coal mine shallbe exclusively used in the end use plant.” This somehow was in directconflict with the terms and conditions of the allocation letter and ScreeningCommittee deliberations where the mine is termed as abandoned and notfit as captive block. Moreover, the reserve is of Metallurgical grade coaland hence cannot be used in power generation.

6) After the prior approval was sent to the Govt. of Jharkhand for executingthe mining lease, the State Government interpreted that the said block hasbeen allocated for captive mining for generation of power. The companyrepresented 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, 20004Letter No. 13016/8/99-CA dated 18th June, 2001

Page 4 of 7

clarified to the State Government of Jharkhand on 19th Jul, 20055 thatBrahamadiha coal mine has been allocated as an abandoned mine underSection 3(3)(c) of CMN Act, 1973 on conservation ground for coke makingfrom the washed coal.

7) From the facts enumerated above, the block stands established frominception as an abandoned mine and from the clarification furnished toState Government, the same stands allocated under Section 3(3)(c) of theCMN Act. Clearly, the mine is not for captive purpose as it would notsustain end use project and scientific mining. It may be construed, thatwashing of coal and manufacture of metallurgical coke are the end uses.Here we would like to mention that the End use specific allocations aremade under Section 3(3)(a)(iii) of the said Act. The allocation letter is silenton both these aspects. The above points have been raised by us earlierand Ministry of Coal is still considering our representations of 2006, and2011 mentioned in the beginning.

8) In the meantime, after the Review Committee meeting took place in themonth of January, 2012, the Ministry of Coal has issued a show causenotice on 4th May, 20126 for Brahmadiha coal mine. The company hasbeen asked to explain within a period of 20 days as to why the delay in thedevelopment of coal block should not be held as violation of the terms andconditions of the allotment of Brahmadiha coal mine.


9) We would like to humbly submit that the company attended the ReviewCommittee Meeting and gave a detailed representation about thedevelopment of the coal block vide our letter dated 10 th January, 20127

(copy enclosed). Even in the show cause notice the milestones referred toin the milestones table for development of coal block have been shownachieved by the company except for mine opening permission. As regardsmine opening permission, we would like to state that the company hasprocured 33.659 hectares of surface rights for the mines on 18th August,2006. The DGMS on 15th June, 2010 has granted permission for minesafety under the relevant rules. All other statutory clearances like Ministryof Environment & Forests permission for environmental clearance andpollution control certification from Jharkhand State Pollution Control Boardare also

__________________5Letter No. 13016/8/99-CA-I dated 19th July, 20056Letter No. 13011/48/2012-CA-I dated 4th May, 20127Letter No. CML/BOCP/MoC/007 DATED 10th January, 2012

__________________________________________________________Page 5 of 7

obtained. Thereafter the company applied to Coal Controller'sOrganisation on 25th August, 2010 for mine opening permission. Wefollowed up the mine opening permission with Coal Controller by giving areminder on 6th December, 20108. Since then the matter is pending withthe Coal Controller's organisation. It is submitted that without the grant ofmine opening permission which has to be granted by Coal Controller, weare unable to proceed to start production. Therefore no milestone on thedevelopment of coal block as per the milestone chart shown in theshow cause notice is pending on behalf of us. As regards end useplant, there has been no reference made by the Ministry of Coal fordevelopment of end use plant, hence no mention of this is made herewith.We hope that this explanation would sufficiently reflect our seriousness todevelop the block. We assure the Government of bringing the block intoproduction as soon as the mine opening permission is granted on ourblock.

10) Moreover, we are incurring huge expenses in maintaining mining staff,office, security guards, machinery and equipment and administrativeexpenses at the mine site. To date, we have incurred more than Rs. 15crores in the development of the mine. The mine is ready to achievecommercial production subject to our getting mine opening permission.

11) As Brahmadiha coal mine was allotted under Section 3(3)(c) of theCMN Act, 1973 by the Ministry of Coal and no end use is specified in theallocation letter, we humbly seek categorical clarification on the following


so that the matter is settled once for all and the coal production from themine starts without any further delay and conservation of coal is achieved:

a) The Brahamadiha coal mine is categorised as an abandoned mine asrecorded in the minutes of the screening Committee which recommendedthe allocation and subsequently in the allocation letter same has beenincorporated. There is no mention of specific end use in both these criticaldocuments. The allocation is not made under Section 3(3)(a)(iii) of theCMN 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 Section3(3)(a)(iii) of the Act, Ministry of Coal has already clarified to StateGovernment of Jharkhand by letter dated 19 th July 2005 that the said blockis allocated under Section 3(3)(c) of the CMN Act, 1973. Under thisSection, the captive end-use condition is not envisaged and stipulated inthe CMN Act. This letter posed the condition of development of washeryand coke oven plant by the allocattee party.

c) Metallurgical coke is not a defined end use as per CMN Act, 1973whereas we have been regularly asked to set up a washery and cokeoven plant. Though the company is ready with its coke oven plant andwashery and is all set to commission as and when the Ministry clarifies theabove 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 inthe category of captive block. This means that it can never match captiveblock criteria since the mining and other ground realities of this abandonedblock are completely different. This allocation is, therefore, consideredunder Section 3(3)(c) and allocated on conservation grounds. These basicconditions and qualities of the block stand permanent and would remainuntil the life of the mine.

e) There is no pendency of any milestone by us in developing the coalblock 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 Section3(3)(c) with the coal apparently ear marked for use in coal washery andproduction of metallurgical coke. However, there is confusion in (a)


Ministry of Coal's website of allocated blocks which lists our block ascaptive for iron and steel and (b) in our lease deed which ear marks thecoal 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 ourcontrol are holding our project back and we are not getting mine openingpermission even though we have applied for the same more than 12months ago.___________________________________________________________

Page 7 of 7

PRAYER:

We beg Ministry of Coal to please vacate the show cause notice andissue 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 AgarwallaChairman”

Building warm relationshipsMAIN 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


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


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


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:


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.


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, issatisfied, whether from any information received by it otherwise,that there has been any error, omission or misdescription inrelation to the particulars of a coal mine included in the Scheduleor particulars of a coal mine included in any such coal mine, itmay, by notification, correct such error, omission ormisdescription and on the issue of such notification, the relevantentries in the Schedule shall be and shall be deemed always tohave 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


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.


Section 43 IPC defines ‘illegal’ as under:

““illegal”, “legally bound to do”.- The word “illegal”is applicable toeverything which is an offence or which is prohibited by law, orwhich furnishes ground for a civil action; and a person is said tobe “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


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-4Dilip Ray, Minister of State for Coal, A-5 Pradip Kumar Banerjee,Additional Secretary, Ministry of Coal and Chairman 14th ScreeningCommittee and A-6, Nitya Nand Gautam, Adviser (Projects), Ministryof 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 ofcommission of impugned acts)read as under:

"13. Criminal misconduct by a public servant. -- (1) A publicservant 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


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 ofA-l's conviction under Section 5(2) read with Section 5(1)(d) of thePrevention 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


charges. Before examining the sufficiency or otherwise of thematerial bearing on the charges against both the appellants, weconsider it necessary to have a clear concept of the meaning andambit of the phraseology “by corrupt or illegal means or byotherwise abusing his position as public servant” used in Section5(1)(d) of the Prevention of Corruption Act, 1947 (hereinafterreferred to as “the Act”) for the contravention of which theappellants have been convicted. It will be advantageous in thisconnection 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. (asbe then was) while construing clause (d) of sub-section (1) ofSection 5 of the Act observed:

“The phraseology ‘by otherwise abusing his position aspublic servant’ covers acts done otherwise than bycorrupt or illegal means by an officer abusing hisposition. The gist of the offence under this clause is thata public officer abusing his position as a public servantobtains for himself or for any other person any valuablething or pecuniary advantage. “Abuse” means misusei.e., using his position for something for which it is notintended. That abuse may be by corrupt or illegal meansor 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 inthe clause become surplusage, for on that constructionevery abuse of position is gathered by the clause. Sosome limitation will have to be put on that word and thatlimitation is that it takes colour from the preceding wordsalong with which it appears in the clause, that is to saysomething savouring of dishonest act on his part. Thecontention of the learned counsel is that if the clause iswidely construed even a recommendation made by apublic servant for securing a job for another may comewithin the clause and that could not have been theintention of the Legislature. But in our view suchinnocuous 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 inthe word “abuse” indicate the necessity for a dishonestintention on his part to bring him within the meaning ofthe clause. Whether he abused his position or notdepends upon the facts of each case.”


21. Following the decision in M. Narayanan Nambiar v. State ofKerala (Supra), it was held by this Court in Major S.K. Kale v.State of Maharashtra (Supra) that the abuse of position in orderto come within the mischief of the section must necessarily bedishonest so that it may be proved that the accused causeddeliberate loss to the department It was further held in this casethat it is for the prosecution to prove affirmatively that theaccused, by corrupt or illegal means or by abusing his position,obtained any pecuniary advantage for some other person. Itwould, therefore, be necessary to find out in this case as towhether the accused abused their position and acted dishonestlyor with a corrupt or oblique motive in having the contract inquestion entrusted to A-4. As the courts below have rested theirjudgments on a constellation of circumstances, it would be well tobear in mind the fundamental rule relating to the proof of guiltbased on circumstantial evidence which has been settled by along line of decisions of this Court. The rule is to the effect that incases depending on circumstantial evidence, there is always thedanger that conjecture or suspicion may take the place of legalproof. In such cases the mind is apt to take pleasure in adaptingcircumstances 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 likelyit is, considering such matters, to over-reach and mislead itself, tosupply some little link that is wanting, to take for granted somefact consistent with its previous theories and necessary to renderthem 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.


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 thewords “corrupt or illegal means” and held as under:

“19. The expression “corrupt or illegal means” has notbeen defined in the Act. Illegal would obviously meansomething which the law prohibits. The definition of theexpression “corrupt” in the Shorter Oxford Dictionaryincludes something influenced by bribery. Thisexpression would also include something which ismorally unsound, dishonest, depraved or pervert.Therefore, accepting money as bribe would certainlyamount to use of corrupt means. Since taking orattempting to take bribe is prohibited by law, such anact would also amount to use of illegal means. Theappellant, therefore, is guilty of criminal misconductunder Section 13(1)(d)(i) of the Act since he took Rs.3000/- from the complainant by corrupt and illegalmeans.”

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 actdishonestly in return for money or personal gain’ and as per theOxford dictionary it means ‘cause to act dishonestly in return formoney or personal gain. To change from good to bad in morals,manners, or actions.’

20. Word ‘illegal’ has been defined under Section 43 IPC asunder:—

43. “Illegal”, “Legally bound to do”.—The word “illegal” isapplicable to everything which is an offence or which isprohibited by law, or which furnishes ground for a civil action;and a person is said to be “legally bound to do” whatever it isillegal in him to omit.

21. The amendment as introduced to Section 13(1)(d) PC Actclearly deletes the words ‘in discharge of his officials duties’


which gave a restricted meaning to the provisions of Section13(1)(d) of the PC Act. Pursuant to the amendment, it is notnecessary that the act committed by the officer should be indischarge of his official duty, however, the fact remains whetherdeletion of the words ‘acting in discharge of his official duty’would also take away from the ambit of Section 13(1)(d)(i) of PCAct any act which is not an abuse of his position as publicservant. As held by Hon'ble Supreme Court in the decisionreported as Manshankar Prabhashankar Dwivedi (supra), itwould be appropriate to give a construction where abuse ofposition as a public servant is also a necessary ingredient ofclause (d) of Section 13(1) PC Act as reproduced in para 13.2above.

22. Even in the decision reported as 1999 Cr.L.J 2059 (AP) B.Parmeshwaran v. State of A.P. relied upon by the learnedcounsel for the CBI, Andhra Pradesh High Court noted that“abuse of his position as public servant” is central for an offencedefined under Section 13(1)(d) PC Act, 1988 even if it is by“corrupt or illegal means”. In the said case High Court noted thatthe complainant believed the accused as he was an employee ofSouth Central Railways. Thus there was an element of abuse ofhis position as public servant. Dealing with the PC Act 1988, HighCourt held as under:

12. Further, there appears to be a substantial change in thecomparable provisions under the Prevention of CorruptionAct, 1988, namely, S. 13(1)(d) of the Act of 1988 from theprovision under S. 5(1)(d) under the Prevention ofCorruption Act, 1947. Clause (d) of S. 5(1) mandates thatfor constituting the offence under that clause, the accusedmust have used corrupt or illegal means or otherwiseabused his position as public servant to obtain for himselfor for any other person valuable thing or pecuniaryadvantage. The words “or by otherwise abusing hisposition as public servant” go to indicate that use of corruptor illegal means is considered as one of the modes ofabusing official position. Thus, there is only one conceptinvolved here, namely, abusing one's official position togain valuable thing or pecuniary advantage. Adoption ofcorrupt or illegal means is mentioned illustratively as one ofthe means of abuse of official position. Thus, the conceptof use of corrupt or illegal means has inextricable nexuswith abuse of official position. Abuse of official positionappears to be central to the concept of misconduct andadopting corrupt or illegal means is merely one of the waysand not unrelated to abusing official position. It is for this


reason, the Supreme Court held in that case cited suprathat mere use or adoption of illegal means to obtainvaluable thing or pecuniary advantage unrelated to abuseof official position does not satisfy the ingredient of theoffence under S. 5(1)(d) of the Prevention of CorruptionAct, 1947. But, in the Act, 1988, this nexus betweenadoption of corrupt or illegal means and abuse of officialposition has been severed as can be seen by examiningthe relevant provision:

“13. Criminal Misconduct by a Public Servant: (1) A publicservant is said to commit the offence of criminalmisconduct:

(d) if he, —

(i) by corrupt or illegal means, obtains for himself or for anyother person any valuable thing or pecuniary advantage; or

(ii) by abusing his position as a public servant, obtains forhimself or for any other person any valuable thing orpecuniary advantage; or

(iii) while holding office as a public servant, obtains for anyperson any valuable thing or pecuniary advantage withoutany 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 intothree distinctive parts as extracted above.

A reading of this provision would make it amply clear thatall the three wings of Clause (d) of, S. 13(1) areindependent and alternative and disjunctive for constitutingthe ingredients for the offence under S. 13(1)(d) as is clearfrom the use of the word ‘or’ at the end of each sub-clause.Thus, under S. 13(1)(d)(i) obtaining any valuable thing orpecuniary advantage by corrupt or illegal means by apublic servant in itself would satisfy the requirement ofCriminal misconduct under S. 13(1)(d) of the Prevention ofCorruption Act, 1988. On the same reasoning “obtaining avaluable thing or pecuniary advantage merely by abusingofficial position” as contemplated under S. 13(1)(d)(ii) initself would satisfy the ingredient of Criminal Misconductunder S. 13(1)(d) without any nexus with the adoption ofthe illegal means as contemplated under S. 13(1)(d)(i) ofthe Act, 1988. Thus, it would appear that there is definitechange as to the ingredients of offence of CriminalMisconduct under S. 13(1)(d) of Act, 1988 as distinct from


S. 5(1)(d) of the Prevention of Corruption Act, 1947. Thejudgments of the Supreme Court rendered whileinterpreting the provisions of Prevention of Corruption Act,1947 have to be appreciated taking into account thechanges incorporated in the relevant provisions in thePrevention of Corruption Act, 1988. For this reason also,the facts in this case must be held to be sufficient toconstitute ‘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 essentialelement even if he acts by a corrupt or an illegal mean becausethough the illegal mean would survive, element of corrupt will notarise without an abuse of the official position.”


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 canbe concluded that in order to prove the offence under Section13(1)(d)(ii) of the Act, it must be established that a publicservant has abused his position in order to obtain for himselfor for any other person, any valuable thing or pecuniaryadvantage, and that, in this context, the “abuse” of positionmust involve a dishonest intention.In the light of facts of the said case involving role of a bankofficer in illegally advancing overdraft facility to a customer ofthe bank (co-accused), the Hon'ble court further went on toobserve in para 25 as under:25. Furthermore, the appellant's dishonest intention can beinferred from the facts and circumstances of the case andfrom the conduct of the appellant himself. During the courseof these transactions, the appellant has committed severalirregularities in order to favour Accused 2 and has acted inblatant disregard of the rules and regulations of the Bank


and the terms and conditions of the loan issued to Accused2 and in fact, even compelled PW 18, an officer under hissupervision, to do the same. Therefore, it can be concludedthat the appellant has acted with dishonest intention and hasabused his position as a public servant. Thus, it can beconcluded that all of the necessary elements of the offenceunder Section 13(1)(d)(ii) of the Act have been proved in thiscase.”

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 andChairman 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 beanalysed together as the same is closely interlinked.)


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 14 th

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


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


concern of M/s CTL. However, no details of any such plant were even

tried to be obtained either by MOC or by 14 th 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 14 th

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 theirtwo washery projects. The representative of the party informedthe Committee that the washed coal from these two washerieswill be supplied to the power plants of MSEB, GEB, PSEB, RSEBetc and some cement plants. However, the Committee noted thatthere is no formal tie-up with any of the end users mentioned bythe party and in view of that decided to reject this case.”


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,


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 14 th

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 14 th

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


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.


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 democraticform of Government demands equality and absence ofarbitrariness and discrimination in such transactions'. Theactivities of the Government have a public element and,therefore, there should be fairness and equality. The State neednot enter into any contract with anyone, but if it does so, it mustdo so fairly without discrimination and without unfair procedure.”


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 theGovernment with the public, where the interest sought to beprotected is a privilege. It must, therefore, be taken to be the lawthat where the Government is dealing with the public, whether byway of giving jobs or entering into contracts or issuing quotas orlicences or granting other forms of largess, the Governmentcannot act arbitrarily at its sweet will and, like a private individual,deal with any person it pleases, but its action must be inconformity with standard or norms which is not arbitrary, irrationalor irrelevant.”


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 Shettyv. International Airport Authority of India [1979 (3) SCC 489] that with thegrowth of the welfare state, new forms of property in the shape of


Government largess are developing, since the Government isincreasingly assuming the role of regulator and dispenser ofsocial services and provider of a large number of benefitsincluding jobs, contracts, licences, quotas, mineral rights etc.There is increasing expansion of the magnitude and range ofGovernmental functions, as we move closer to the welfare state,and the result is that more and more of our wealth consists ofthese new forms of property. Some of these forms of wealth maybe in the nature of legal rights but the large majority of them are inthe nature of privileges. The law has however not been slow torecognise the importance of this new kind of wealth and the needto protect individual interest in it and with that end in view, it hasdeveloped new forms of protection. Some interests inGovernment largess, formerly regarded as privileges, have beenrecognised as rights, while others have been given legalprotection not only by forging procedural safeguards but also byconfining, structuring and checking Government discretion in thematter of grant of such largess. The discretion of the governmenthas been held to be not unlimited in that the Government cannotgive largess in its arbitrary discretion or at its sweet will or onsuch terms as it chooses in its absolute discretion. There are twolimitations imposed by law which structure and control thediscretion of the government in this behalf. The first is in regard tothe terms on which largess may be granted and the other, inregard to the persons who may be recipients of such largess.

11. So far as the first limitation is concerned, it flows directly fromthe thesis that, unlike a private individual, the State cannot act asit pleases in the matter of giving largess. Though ordinarily aprivate individual would be guided by economic considerations ofself-gain in any action taken by him, it is always open to himunder the law to act contrary to his self-interest or to obligeanother in entering into a contract or dealing with his property. Butthe government is not free to act as it likes in granting largesssuch as awarding a contract or selling or leasing out its property.Whatever be its activity, the government is still the governmentand is, subject to restraints inherent in its position in a democraticsociety. The constitutional power conferred on the governmentcannot be exercised by it arbitrarily or capriciously or in anunprincipled manner; it has to be exercised for the public good.Every activity of the government has a public element in it and itmust therefore, be informed with reason and guided by publicinterest. Every action taken by the government must be in publicinterest; the government cannot act arbitrarily and without reasonand if it does, its action would be liable to be invalidated. If the


government awards a contract or leases out or otherwise dealswith its property or grants any other largess, it would be liable tobe tested for its validity on the touch-stone of reasonableness andpublic interest and if it fails to satisfy either test, it would beunconstitutional and invalid.12. Now what is the test of reasonableness which has to beapplied in order to determine the validity of governmental action.It is undoubtedly true, as pointed out by Patanjali Shastri, J. inState of Madras v. V.G. Rau,[1952] SCR 597 that in forming his ownconception of what is reasonable, in all the circumstances of agiven case, it is inevitable that the social philosophy and the scaleof values of the judge participating in the decision, would play animportant part, but even so, the test of reasonableness is not awholly subjective test and its contours are fairly indicated by theConstitution. The concept of reasonableness in fact pervades theentire constitutional scheme. The interaction of Articles 14, 19 and21 analysed by this Court in Maneka Gandhi v. Union of India[1978]

2 SCR 621 clearly demonstrated that the requirement ofreasonableness runs like a golden thread through the entire fabricof fundamental rights and, as several decisions of this Courtshow, this concept of reasonableness finds its positivemanifestation and expression in the lofty ideal of social andeconomic justice which inspires and animates the directiveprinciples. 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 thatArticle 14 strikes at arbitrariness in State action and since theprinciple of reasonableness and rationality, which is legally as wellas philosophically an essential element of equality or non-arbitrariness, is protected by this article, it must characteriseevery governmental action, whether it be under the authority oflaw or in exercise of executive power without making of law. Soalso the concept of reasonableness runs through the totality ofArticle 19 and requires that restrictions on the freedoms of thecitizen, in order to be permissible, must at the best be reasonable.Similarly Article 21 in the full plenitude of its activist magnitude asdiscovered by Maneka Gandhi case, insists that no one shall bedeprived of his life or personal liberty except in accordance withprocedure established by law and such procedure must bereasonable, fair and just. The Directive Principles concretise andgive shape to the concept of reasonableness envisaged inArticles 14, 19 and 21 and other Articles enumerating thefundamental rights. By defining the national aims and theconstitutional goals, they setforth the standards or norms ofreasonableness which must guide and animate governmental


action. Any action taken by the Government with a view to givingeffect to any one or more of the Directive Principles wouldordinarily, subject to any constitutional or legal inhibitions or otherover-riding considerations, qualify for being regarded asreasonable, while an action which is inconsistent with or runscounter to a directive principle would prima facie incur thereproach of being unreasonable.

13. So also the concept of public interest must as far as possiblereceive its orientation from the directive principles. Whataccording to the founding fathers constitutes the plainestrequirement of public interest is set out in the directive principlesand they embody par excellence the constitutional concept ofpublic interest. If, therefore, any governmental action is calculatedto implement or give effect to a directive principle, it wouldordinarily, subject to any other overriding considerations, beinformed with public interest.

14. Where any governmental action fails to satisfy the test ofreasonableness and public interest discussed above and is foundto be wanting in the quality of reasonableness or lacking in theelement of public interest, it would be liable to be struck down asinvalid. It must follow as a necessary corollary from thisproposition that the Government cannot act in a manner whichwould benefit a private party at the cost of the State; such anaction would be both unreasonable and contrary to public interest.The government, therefore, cannot, for example, give a contractor sell or lease out its property for a consideration less than thehighest that can be obtained for it, unless of course there areother considerations which render it reasonable and in publicinterest to do so. Such considerations may be that some directiveprinciple is sought to be advanced or implemented or that thecontract or the property is given not with a view to earningrevenue but for the purpose of carrying out a welfare scheme forthe benefit of a particular group or section of people deserving itor that the person who has offered a higher consideration is nototherwise fit to be given the contract or the property. We havereferred to these considerations to only illustratively, for there maybe an infinite variety of considerations which may have to betaken into account by the government in formulating its policiesand it is on a total evaluation of various considerations whichhave weighed with the government in taking a particular action,that the Court would have to decide whether the action of thegovernment is reasonable and in public interest. But one basicprinciple which must guide the Court in arriving at itsdetermination on this question is that there is always a


presumption that the governmental action is reasonable and inpublic interest and it is for the party challenging its validity to showthat it is wanting in reasonableness or is not informed with publicinterest. This burden is a heavy one and it has to be dischargedto the satisfaction of the Court by proper and adequate material.The Court cannot lightly assume that the action taken by thegovernment is unreasonable or without public interest because,as we said above, there are a large number of policyconsiderations which must necessarily weigh with the governmentin taking action and therefore the Court would not strike downgovernmental action as invalid on this ground, unless it is clearlysatisfied that the action is unreasonable or not in public interest.But where it is so satisfied, it would be the plainest duty of theCourt under the Constitution to invalidate the governmentalaction. This is one of the most important functions of the Courtand also one of the most essential for preservation of the rule oflaw. It is imperative in a democracy governed by the rule of lawthat governmental action must be kept within the limits of the lawif there is any transgression the Court must be ready to condemnit. It is a matter of historical experience that there is a tendency inevery government to assume more and more powers and since itis not an uncommon phenomenon in some countries that thelegislative check is getting diluted, it is left to the Court as the onlyother reviewing authority under the Constitution to be increasinglyvigilant 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 thisground of invalidity, namely, that the governmental action isunreasonable or lacking in the quality of public interest, isdifferent from that of malafides though it may, in a given case,furnish evidence of mala-fides.

15. The second limitation on the discretion of the government ingrant of largess is in regard to the persons to whom such largessmay be granted. It is now well settled as a result of the decision ofthis Court in Ramana D. Shetty v. International Airport Authority ofIndia that the government is not free like an ordinary individual, inselecting the recipients for its largess and it cannot choose to dealwith any person it pleases in its absolute and unfettereddiscretion. The law is now well established that the Governmentneed not deal with anyone but if it does so, it must do so fairlywithout discrimination and without unfair procedure. Where theGovernment is dealing with the public, whether by way of givingjobs or entering into contracts or granting other forms of largessthe government cannot act arbitrarily at its, sweet will and, like aprivate individual, deal with any person it pleases, but its action


must be in conformity with some standard or norm which is notarbitrary, irrational or irrelevant. The governmental action mustnot be arbitrary or capricious, but must be based on someprinciple which meets the test of reason and relevance. This rulewas enunciated by the Court as a rule of administrative law and itwas also validated by the Court as an emanation flowing directlyfrom the doctrine of equality embodied in Article 14. The Courtreferred to the activist magnitude of Article 14 as evolved in E. P.Royappa v. State of Tamil Nadu and Maneka Gandhi case andobserved that it must follow

as a necessary corollary from the principle of equality enshrinedin Article 14 that though the State is entitled to refuse to enter intorelationship with anyone, yet if it does so, it cannot arbitrarilychoose any person it likes for entering into such relationship anddiscriminate between persons similarly circumstanced, but it mustact in conformity with some standard or principle which meets thetest of reasonableness and non-discrimination and any departurefrom such standard or principle would be invalid unless it can besupported or justified on some rational and non-discriminatoryground. (SCC p. 512, para 21)

This decision has reaffirmed the principle of reasonableness andnon-arbitrariness in governmental action which lies at the core ofour entire constitutional scheme and structure.”


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


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


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


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


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 afterwashing will be blended with the coal of BCCL to produce abetter 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


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


(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


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


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


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.


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


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


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


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.


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


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


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


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:


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-99Shri N.N. GautamAdviser (Projects)Ministry of CoalNew 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 theabove matter our adviser Shri M.L. Dugar met you o 20.04.99 andclarified the points raised by you. In detail, these points were alsoclarified vide our letter no. CTL/194/99-2000/057, dated 21.04.99 (copyenclosed).

In course of our meeting today following issues were raised :

3. What will be the use of the washery after exhaustion of coallasting 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 useat present due to lower demand of met coke on account of dumping ofcoke in India. The washery will be shifted near to the proposed miningsite. After exhaustion of coal this can be again shifted to a new source ofcoal supply according to the prevalent circumstances at that point of


time. Since this washery was in use for the last couple of years, thedepreciated value of this washery is very low.

2. Regarding use of washed coal as stated earlier it is proposed tobe used for manufacturing of met coke for our unit in Bokaro IndustrialArea. This coke will be manufactured at a unit for which industrial licensewas granted by Coal Ministry. The production capacity of the said cokeoven unit is lying idle in view of the uneconomical market conditionalready stated above.

We hope and trust this will clarify all the issues and you will bekind enough to recommend our case as proposed by the StateGovernment.

Thanking you,Sincerely yours,for Castron Technologies Ltd.

-Sd/- Director.




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


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:


8 M/sCentralUtilities&In ve s tme n t sL t d .

TwoWasheryprojectsSupply towaterplants.

3 mt.each

Rawcoal - 4mt.

Washedcoal -3mt.

Gare- Palma Block: -

Sub block -IV/6 - 1st

p r e f e r e n c e

S u b b l oc k - I V / 7 -2 n d p r e f e r e n c e

L o h a r a Wes t - 1 s t

p r e f e r e n c e

U t k a l B 2 b l o c k ; -2 n d p r e f e r e n c e .

The party has corresponded withMSEB, GEB, PSEB, RSEB GVKPower Krishnapatnam and CementManufacturers for linkage ofwashed coal. The utilities and theCement Manufacturers Associationshave asked for more details aboutthe project before making anycommitment.

CIL have indicated that details of theproposed washeries have not beenfurnished by the party. However, nocaptive sub blocks are available inUtkal-II and Utkal-III. Sub block IV/7in Gare-Palma is underconsideration for allotment to M/sJaiswals Neco Ltd. CIL have furtherindicated that Lohara (W) block hasbeen placed before CIL Board in itsl82nd meeting in May 1999 forwithdrawal from the list of captiveblocks.Sub block IV/7 of Gare-Palma isalso required by M/s. ChhatisgarhElectricity 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


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


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


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


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


consequently non-identified abandoned coal mining area in 14 th

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). Hestated that the party has requested for the allotment of 105.153ha. of abandoned coal mining area of Brahmadiha block of CCLin the district of Giridih which was abandoned in 1916 and isnow full of water. The extractable reserves available in the mineare roughly estimated to be 2.215 million tonnes in theremanent pillars and no large scale mining is possible for thesereserves. The party proposes to extract these reserves byopencast mining @ 0.15 million tonnes per annum. With thisproduction the estimated reserves would last for about 15 years.

The representatives of CCL and CIL informed the Committeethat CCL/Coal India has no programme of working thesereserves at any point of time and according to them there is noworking mine belonging to CCL within the vicinity of 2.5km.

On a query on end use of coal, the representative of the partyinformed that the raw coal will be washed in their washery toobtain washed coal for manufacturing metallurgical coke in theircoke oven plant presently lying idle for use in another unit oftheir's in Bokaro industrial area. It was clarified by the party thatthe washery will be relocated after 15 years when the coalreserves in the mine are exhausted.



The Committee noted that as per recent guidelines foropencast captive block, the mine does not fit in the criteria of acaptive block. It further noted that these reserves are eitherpermitted to be exploited by a private party or the reserves areallowed to be lost forever/unsafe illegal mining.

The Screening Committee after detailed deliberation and in viewof conservation of coal decided to allot 105.153Ha. ofabandoned coal mining area of Brahmadiha block in GiridihDistrict, CCL subject to the following condition :

i) Hydrogeological studies to be carried out by the party inconsultation with State Ground Water Board with a view to seethat dewatering of this mine does not seriously affect thehydrogeological balance of area.

ii) Extraction of coal barrier between the abandoned mine andCCL lease-hold shall not be permitted and in case dams inconnection through the barrier are found damaged shall beeffectively reparied.

Iii) All precautions will be taken to ensure that fires do notbreak out due to dewatering of the area. If any fire does break itshall effectively be dealt by the party.

iv) All mining operations shall be carried out with due approvalof DGMS and all provision of law shall be complied with.

The above will be subject to relaxation of guidelines by Ministryof Coal regarding allotment of blocks with minimum extraction of1.00 mtpa”.


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


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 proposedguidelines would only be used as broad parameters in support ofthe new policy and not as rigid boundary lines for excluding theentry 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 basicinfrastructure like road, rail links etc. is yet to be developedshould be given to the private sector. The areas where CIL hasalready invested in creating such infrastructure for opening newmines should not be handed over to the private sector, except onreimbursement of costs,The blocks offered to private sector should be at reasonabledistance from existing mines and projects of CIL in order to avoidoperational problems.Blocks already identified for development by CIL where adequatefunding is on hand or in sight should not be offered to the privatesector. Private sector should be asked to bear full cost of exploration inthese blocks which may be offered.It was also agreed that while discussing proposals of powergenerating companies and identifying blocks, the requirement ofcoal 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 14 th

Screening Committee are completely silent in this regard. In fact, the


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 inthe list of identified blocks of captive mining. This particulararea is not a greenfield area and as such also does notconform with the guidelines adopted by the ScreeningCommittee 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 miningand also not in the greenfield area were the other factors notfulfilling the requirement necessary for allocation of the blockfor 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


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


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 acoal block for a quantity less than 1 m. tes. per annum inopencast mining and less than, 250,000 per annum inunderground mining would not be entertained so as toensure economic/scientific extraction of India coal. This maykindly be kept in view while screening the applications andmaking appropriate recommendations for consideration ofthis 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


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


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


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


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 civilwrong but a breach of trust with an ingredient of mens reawould 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.


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


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


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


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 forthe washery sector. Since “washery” is also included in thedefinition of “mine”, setting up of washeries in the privatesector is facilitated by the June, 1993 amendment but not forextraction of the coal by the washery owners. Before theJune, 1993 amendment, setting up of washeries by privatecompanies was not possible. Moreover, washed coal can besold in the open market. The unrestricted end-uses for thewashed coal go against the spirit of captive consumption forspecified en-uses in the June, 1993 amendment. Therefore,it is not possible to allot captive blocks to M/s CastronTechnologies Limited and M/s Central Utilities andInvestments 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 newapplicants requirement of coal is for rather small volumeswhich on the face of it can be met by our coal companies.And linked with it is the question of conservation andoptimum size of mining blocks. Economically miningreserves in India are not large and therefore whatever limitedreserves that we have should be exploited wisely.

7. In view of what is stated at paras 2 to 6 above it is forconsideration whether the 17 new applications should betaken up for consideration now or at a more opportune timelater.”

305. It was thereafter that the file with a detailed note dated 07.05.99 of


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 thosepending before can be taken up simultaneously with otherapplications after the decision has been notified to the nodalministries and applications received from them, say in aperiod of about 14 days.

JS (Coal)'s note does make a valid point that everyTom, Dick and Harry should not be able to obtain a captiveblock. So we have to take the precaution for saving our coalblocks from such vultures. Even while proposing the freshamendment, we have inserted a clause that the minimumsize of the coal mine and such other conditions which may benecessary for the purpose of coal mining operations by acompany can be laid down by the Government. I haveconsulted Adv(P) in this respect. Scientific mining as aneconomic unit of coal can be done in an open cast mine ofone million tonnes per year production. Similarly, in under-ground mining, a unit should produce 250 thousands tonnesper year. So MOS(Coal) may kindly lay down the conditionthat an application for mining of a coal block for quantity lessthan one million tons per annum in open cast mining and lessthan 250,000 tons per annum in underground mining wouldnot be entertained so as to ensure economic/scientific miningof Indian coal.

MOS (Coal) may kindly approve the modification ofthis 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


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


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


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


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


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,


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 IvorJennings has described in his book -- Cabinet Government,Third Ed. p. 85 the ministry that was formed by Mr. Churchillin England after the war before and pending the Generalelection in 1945 as care-taker Government. But anextraordinary situation like the present, in my opinion, callsfor a care-taker Government and therefore, the respondentNo. 1 and his Council of Ministers can only carry on day-to-day administration in office which are necessary for carryingon "for making alternative arrangements". In effect thePresident, in my opinion is therefore, not obliged toaccept the advice that the respondent No. 1 and hisCouncil of Ministers tender to him except for day-to-dayadministration and the Council of Ministers and therespondent No. 1 should not make any decisions whichare not necessary except for the purpose of carrying onthe administration until other arrangements are made.This in effect means that any decision or policy decisionor any matter which can await disposal by the Council ofMinisters responsible to the House of People must notbe tendered by the respondent no. 1 and his Council ofMinisters. With this limitation the respondent No. 1 and theCouncil of Ministers can only function. And in case whethersuch advice is necessary to carry on the day-to-dayadministration till "other arrangements are made" or beyondthat, the President, in my opinion, is free to judge.”


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:


“We have considered the aforesaid submissions of thelearned counsel. It is true that the exercise of power underArticle 356 may be subject to judicial review after deletion ofclause (5) by the 44th Amendment. But the question is as towhether there are any genuine apprehensions on the part ofthe petitioner that the power under Article 355 would not beproperly exercised, more particularly, when there has been astatement made by the care-taker Government that it has nointentions to impose President's Rule. It has also beensubmitted before us that the President has not beenaccepting the advice of the care-taker Government. ThePresident has refused to make appointments, as advised bythe care-taker Government. That also shows that thePresident is acting in a manner knowing fully well thelimitations of the care-taker Government. Postponing ofdecisions and policies and actions of care-taker Governmentby the President shows that the President is not beingcarried away by the advice of the care-taker Government.This being so, we feel that it would not be proper for thisCourt to issue any directions as sought by the petitioner afternotice to the respondents.”


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 Assemblyshould be dissolved and an election can be held early, heshould normally ask the outgoing Ministry to continue as aCare-taker Government. Here, a convention should beadopted that a Care-taker Government should not take anymajor 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


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 Governorshould explore all possibilities for having a Governmentenjoying majority support in the Assembly. If it is not possiblefor such a Government to be installed and if fresh electionscan be held without avoidable delay, he should ask theoutgoing Ministry, if there is one, to continue as a caretakerGovernment, provided the Ministry was defeated solely on amajor policy issue, unconnected with any allegations ofmaladministration or corruption and is agreeable to continue.The Governor should then dissolve the Legislative Assembly,leaving the resolution of the constitutional crisis to theelectorate. During the interim period, the caretakerGovernment should be allowed to function. As a matter ofconvention, the caretaker Government should merely carryon the day-to-day Government and desist from taking anymajor policy decision.

At the same time, we are inclined to say, havingregard to the constitutional scheme obtaining under ourConstitution, that the recommendations do merit seriousconsideration.”


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.


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 ofSecretary (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 itwas proposed that a condition may be laid down that an application


for mining of coal block for quantity less than one million tonnesper annum in opencast mining and less than 250,000 tonnes perannum in underground mining would not be entertained so as toensure 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


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 toconsider applications received after 11.02.1997 to be consideredfor allocation of captive coal blocks, as was proposed by SecretaryCoal in the same note dated 07.05.99. The said act facilitatedconsideration of applications received after 11.02.1997 includingthat of M/s CTL beside 15 other applications of various othercompanies.

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


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 dated21.04.99 recieved from P. K. Agarwalla on behalf of M/s CTL on12.05.99 only to Ministry of Coal for re-examination (available atpage 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


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.


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 14 th

Screening Committee for relaxation of guidelines as were earlierapproved by him on 12.05.99 for allotment of coal blocks byopencast mining, so as to facilitate M/s CTL in obtaining allocationof the impugned non-nationalized abandoned coal mining area inDistrict 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.


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 acontract should not have been awarded. Undoubtedly,Respondent 4 is guilty of proceeding in haste and that


amounts to arbitrariness.28. While dealing with the issue of haste, this Court inBahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia[(2004) 2 SCC 65] , referred to S.P. Kapoor (Dr.) v. State ofH.P. [(1981) 4 SCC 716 : 1982 SCC (L&S) 14 : AIR 1981 SC2181] and held that: (Jagdishbhai M. Kamalia case [(2004) 2SCC 65] , SCC p. 75, para 25)

“25. … when a thing is done in a post-hastemanner, 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 betermed as arbitrary and cannot be condoned inlaw….”

30. Thus, in case an authority proceeds in undue haste, theCourt may draw an adverse inference from such conduct. Itfurther creates a doubt that if there was no sufficient reasonof urgency, what was the occasion for Respondent 4 toproceed in such haste and why fresh tenders had not beeninvited.”

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 theentire sequence of events, starting from applying forallotment of a residential plot under Scheme III of 1994 andsecuring an allotment in Sector 14-A by undergoing twoconversions, undue haste shown in getting Plot No. 27 inSector 14-A allotted is evident from more than one aspect.Firstly, on the very same day i.e. 27-9-1994 on which PlotNo. B-86 in Sector 51 was allotted to the appellant, heapplied for conversion of the plot to a smaller plot in Sector14-A. Secondly, on the very same day i.e. 15-10-1994, whenPlot No. A-36 in Sector 44 was allotted to him, appellantRajiv Kumar made application, Ext.Ka-32 requesting forallotment 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 PlotNo. A-36 in Sector 44 (450 sq m) to a smaller plot in Sector14-A and the same was approved by Neera Yadav on the


very same day i.e. 15-10-1994. It passes one'scomprehension as to how quickly everything happened onthe same day. That apart, immediately the demand of theappellant 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 tohim. 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. Sofar as the nominated officers are concerned, whereas a notecontaining 90 pages was sent to the Chief Secretary ofPunjab on 22-5-2002, the services of all the officers wereterminated on the next day. Apart from the materials whichhave been relied on in the report, no further evidence wasprobably brought in between 23-5-2002 and 24-8-2002 whenthe services of the executive officers were terminated. 72. It is, thus, furthermore, beyond anybody's comprehensionas to why action had to be taken in undue haste.73. We do not intend to suggest that in any emergency it wasnot permissible but we have not been shown that any suchemergent situation existed. It was in any event necessary forthe State to show as to how the records moved so as tosatisfy the conscience of the court that there had been properand due application of mind on the part of the authoritiesconcerned. An action taken in undue haste may be held to bemala fide. (See Bahadursinh Lakhubhai Gohil v. JagdishbhaiM. 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:


“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 thatwhen a thing is done in a post-haste manner, mala fidewould be presumed, stating: (SCC p. 739, para 33)

“33. … The post-haste manner in which thesethings have been done on 3-11-1979 suggeststhat some higher-up was interested in pushingthrough the matter hastily when the RegularSecretary, Health and Family Welfare was onleave.”

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 actedgives the impression that it was willing to sacrifice the rule oflaw for the benefit of the mining leaseholders and theexplanation of satisfying the needs of some sections ofsociety for their livelihood (after keeping them in the lurch formore than two years) was a mere fig leaf. The real intentionof the second renewal was to satisfy the avariciousness ofthe mining leaseholders who were motivated by profits to bemade through the exploitation of natural resources.111. The undue haste also needs to be looked at in thecontext of the statement made in the final paragraph of theGrant of Mining Leases Policy to the effect that this Policy isan in-principle decision and would be notified after it is vettedfor legal requirements “from specific necessities as also fromfinancial viewpoints”. In other words, the Grant of MiningLeases Policy as published on 4-11-2014 was not a finalpolicy statement but only an intent that would take finalshape after due vetting. The Grant of Mining Leases Policywas eventually published on 20-1-2015 but it was acted uponeven before it was gazetted.114. These facts must also be appreciated in the context thatmining operations were suspended in Goa with effect from10-9-2012 due to an order passed by the State of Goa.Therefore, mining operations having been suspended formore than two years, the State could have certainly waitedfor a few weeks more and taken an informed and reasoned


decision on granting a second renewal to mining leases —but waiting for a few weeks could have led to anuncomfortable situation that would have compelled the Stateof Goa to auction the mining leases, hence the haste.121. The undue haste with which the State granted thesecond renewal of mining leases particularly after theamendments proposed to the MMDR Act were placed in thepublic domain by the Government of India (relating to theauction of mining leases) is a clear indication that thedecision of the State was not based on relevant material andnot necessarily triggered by the interests of mineraldevelopment. The very large number of renewals grantedover a comparatively brief period is a clear indication that theState did not have “mineral development” in mind but hadsome other non-statutory interests while taking its decision togrant a second renewal to the mining leases. The haste withwhich the State took its decision also needs to be understoodin the background of the fact that mining had beensuspended by the State in September 2012 that is more thantwo years prior to the grant of second renewals. The urgencysuddenly 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


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 andSection 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


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


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 anymanner entrusted with property, or with any dominionover property, dishonestly misappropriates or converts tohis own use that property in violation of any direction oflaw prescribing the mode in which such trust is to bedischarged, or of any legal contract, express or implied,which he has made touching the discharge of such trustor willfully suffers any other person so to do, commits“criminal breach of trust”.

“409. Criminal breach of trust by public servant, or bybanker, merchant or agent.—Whoever, being in anymanner entrusted with property, or with any dominionover property in his capacity of a public servant or in theway of his business as a banker, merchant, factor, broker,attorney or agent, commits criminal breach of trust inrespect of that property, shall be punished withimprisonment for life, or with imprisonment of eitherdescription for a term which may extend to ten years, andshall 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')


“13. Criminal misconduct by a public servant-- (1) A publicservant is said to commit the offence of criminal misconduct-

(a) . . . . .

. . . . .

(b) . . . . .

. . . . .

(c) if he dishonestly or fraudulently misappropriates orotherwise converts for his own use any property entrusted tohim or under his control as a public servant or allows anyother 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 underSection 409 IPC. For the offence of Criminal Breach of Trust bya public servant the punishment is provided under Section 409IPC. We must also in this respect have regard to the provision ofS 405 which defines Criminal Breach of Trust :

405. Criminal Breach of trust. Whoever , being inany manner entrusted with property, or with anydominion over property, dishonestlymisappropriates or converts to his own use thatproperty in violation of any direction of lawprescribing the mode in which such trust is to bedischarged, or of any legal contract, express orimplied, which he has made touching thedischarge of such trust or willfully suffers any otherperson so to do, commits `criminal breach of trust'.

168. Punishment for criminal breach of trust is provided inSection 406. Punishment for an aggravated form of criminalbreach of trust is provided in Sections 407 to Section 409.


169. The terms of the section are very wide. They apply to onewho is in any manner entrusted with property or dominion overproperty. The section does not require that the trust should be infurtherance of any lawful object. It merely provides, inter alia,that if such a person dishonestly misappropriates or converts tohis own use the property entrusted to him; he commits criminalbreach of trust. This section requires

1) Entrusting any person with property or with dominionover property.

2) That person entrusted (a) dishonestly misappropriatesor converts to his own use that property; or (b) dishonestlyuses or disposes of that property or willfully suffers anyother person so to do in violation -

(i) of any direction of law prescribing the mode inwhich such trust is to be discharged, or

(ii) of any legal contract made touching thedischarge of such trust.

169. In Onkar Nath Mishra and Ors. vs. State (NCT of Delhi) andAnr., [(2008) 2 SCC 561] this court noted that in the commissionof the offence of criminal breach of trust, two distinct parts areinvolved. The first consists of the creation of an obligation inrelation to the property over which dominion or control isacquired by the accused. The second is a misappropriation ordealing with the property dishonestly and contrary to the terms ofthe obligation created.

170. In Jaikrishnadas Manohardas Desai and Anr. v. State ofBombay, [AIR 1960 SC 889], this Court observed :

To establish a charge of criminal breach of trust, theprosecution is not obliged to prove the precise mode ofconversion, misappropriation or misapplication by theaccused of the property entrusted to him or over whichhe has dominion. The principal ingredient of theoffence being dishonest misappropriation orconversion which may not ordinarily be a matter ofdirect proof, entrustment of property and failure, inbreach of an obligation, to account for the propertyentrusted, if proved, may in the light of othercircumstances, justifiably lead to an inference ofdishonest misappropriation or conversion. Convictionof a person for the offence of criminal breach of trustmay not, in all cases, be founded merely on his failureto account for the property entrusted to him, or over


which he has dominion, even when a duty to accountis imposed upon him but where he is unable to accountwhich is untrue, an inference of misappropriation withdishonest intent may readily be made."

171. However, Sections 407 to 409 make special provisions forvarious cases in which property is entrusted to the enumeratedcategories of persons who commit the offence.

172. Criminal breach of trust by a Public servant is dealt withunder S. 409.

"409. Criminal breach of trust by public servant, or bybanker, merchant or agent.- Whoever, being in anymanner entrusted with property or with any dominionover property in his capacity of a public servant or inthe way of his business as a banker, merchant, factor,broker, attorney or agent, commits criminal breach oftrust in respect of that property shall be punished withimprisonment of life, or with imprisonment of eitherdescription 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 ofsuch persons are of a highly confidential character, involvinggreat powers of control, over the property entrusted to them anda breach of trust by such persons may often induce seriouspublic and private calamity. High morality is expected of thesepersons. They are to discharge their duties honestly.

174. The following are the essential ingredients of the offenceunder this section :

1) The accused must be a public servant;

2) He must have been entrusted, in such capacity withthe property ;

3) He must have committed breach of trust in respectof such property.

175. In Raghunath Anant Govilkar Vs. State of Maharashtra andOrs. 2008 (2) SCALE 303 the court noted that Section 406 whichprovides the punishment for criminal breach of trust simplicitorand 409 of IPC are cognate offences in which the commoncomponent is criminal breach of trust. When an offencepunishable 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.


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 mustnecessarily take place after the creation of a legallycorrect entrustment or dominion over property. Theentrustment may arise in any manner whatsoever.That manner may or may not involve fraudulentconduct of the accused. Section 409 IPC, coversdishonest misappropriation in both types of cases;that is to say, those where the receipt of property isitself fraudulent or improper and those where thepublic servant misappropriates what may have beenquite properly and innocently received. All that isrequired is what may be described as entrustment oracquisition of dominion over property in the capacityof a public servant who, as a result of it, becomescharged with a duty to act in a particular way, or,atleast honestly."

177. In Chelloor Mankkal Narayan Ittiravi Namhudiri v. State ofTravancore, 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 ofall that the accused was entrusted with some propertyor with any dominion or power over it. It has to beestablished further that in respect of the property soentrusted, there was dishonest misappropriation ordishonest conversion or dishonest use or disposal inviolation of a direction of law or legal contract, by theaccused himself or by someone else which hewillingly suffered to do."

178. In Ram Narayan Popli (supra), this Court stated the law,thus :-

"81. To constitute an offence of criminal breach oftrust, there must be an entrustment, there must bemisappropriation or conversion to one's own use, oruse in violation of legal direction or of any legalcontract: and the misappropriation or conversion ordisposal must be with a dishonest intention. When aperson allows others to misappropriate the moneyentrusted to him that amounts to a criminalappropriation of trust as defined by Section 405. Thesection relatable to property in a positive part and a


negative part. The positive part deals with criminalmisappropriation or conversion of the property and thenegative part consists of dishonestly using ordisposing of the property in violation of any directionand of law or any contract touching the discharge oftrust."

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.


(Supra), in relation to applicability of CTM Act, 1973:

“30. In short, the 1957 Act provides for general restrictions onundertaking prospecting and mining operations, the procedurefor obtaining prospecting licences or mining leases in respectof lands in which the minerals vest in the government, the rule-making power for regulating the grant of prospecting licencesand mining leases, special powers of Central Government toundertake prospecting or mining operations in certain cases,and for development of minerals.

31. The Coal Mines (Taking Over of Management) Act, 15 of1973, (for short, ‘Coal Mines Management Act’) was passed,

“to provide for the taking over, in the public interest,of the management of coal mines, pendingnationalisation of such mines, with a view toensuring rational and coordinated development ofcoal production and for promoting optimumutilisation of the coal resources consistent with thegrowing requirements of the country, and for mattersconnected therewith or incidental thereto.”

32. The Coal Mines Management Act received the assent of thePresident on 31.03.1973 but it was made effective from30.01.1973 except Section 8(2) which came into force at once.Section 3(1) provides that on and from the appointed day (thatis, 31.01.1973) the management of all coal mines shall vest inthe Central Government. By Section 3(2), the coal minesspecified in the Schedule shall be deemed to be the coal minesthe management of which shall vest in the Central Governmentunder sub-section (1). Under the proviso to Section 3(2), if,after the appointed day, the existence of any other coal minecomes to the knowledge of the Central Government, it shall bya notified order make a declaration about the existence of suchmine, upon which the management of such coal mine alsovests in the Central Government and the provisions of the Actbecome applicable thereto.33. Immediately after the Coal Mines Management Act, theParliament enacted the CMN Act. CMN Act was passed,

“to provide for the acquisition and transfer of theright, title and interest of the owners in respect ofcoal mines specified in the Schedule with a view toreorganising and reconstructing any such coal minesso as to ensure the rational, coordinated andscientific development and utilisation of coalresources consistent with the growing requirements


of the country, in order that the ownership andcontrol of such resources are vested in the State andthereby so distributed as best to subserve thecommon good, and for matters connected therewithor 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 CentralGovernment on the appointed day.- (1) On and from the appointed day, the management of all coalmines 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 bedeemed, for the purposes of this Act, to be the coal mines themanagement of which shall vest, under sub-section (1), in theCentral Government:

Provided that if, after the appointed day, the existence ofany other coal mine comes to the knowledge of theCentral Government, whether after an investigation or inpursuance of an intimation given to it under sub-section(5) , or otherwise, the Central Government shall, by anotified order, make a declaration about the existence ofsuch mine, and on and from the date of suchdeclaration-(i) the management of such coal mine shall be deemed,for the purposes of this Act, to vest in the CentralGovernment; and(ii) such coal mine shall be deemed to be included in theSchedule, and thereupon the provisions of this Act shallbecome applicable thereto subject to the modificationthat for the words "appointed day", wherever they occur,the words, brackets and figures "date of the declarationmade 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 relationto the name or address of the owner of a coal mine, the owner ofsuch mine shall, within thirty days from the date on which thisAct receives the assent of the President, being such error oromission to the notice of the Central Government.


(4) If, after the appointed day, the Central Government issatisfied, whether from any information received by it orotherwise, that there has been any error, omission ormisdescription in relation to the particulars of a coal mineincluded, or deemed to be included, in the Schedule or the nameand address of the owner of any such coal mine, it may, bynotified order, correct such error, omission or misdescription, andon the issue of such notified order the relevant entries in theSchedule shall stand corrected accordingly:

Provide that no such correction in relation to the ownershipof a coal mine shall be made where such ownership is indispute.

(5) Every person in charge, immediately before the date onwhich this Act receives the assent of the President, of themanagement of any coal mine, being a coal mine not included ordeemed to be included on the said date in the Schedule, shall,within thirty days from the said date, intimate to the CentralGovernment the name and location of such mine and the nameand address of the owner thereof.(6) Where there is a dispute with regard to the declaration madeby the Coal Board under the Coking Coal Mines (EmergencyProvisions) Act, 1971, (64 of 1971) to the effect that a coal minecontains Coking coal, the management of such coal mine shall,notwithstanding anything contained in the said Act, vest in theCentral Government under this Act and nothing contained in thefirst-mentioned Act shall apply, or be deemed ever to haveapplied, 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 theCoal Mines (Taking Over of Management) Act, 1973 by whichthe management of coal mines in India was vested in theCentral Government on and from the appointed date, i.e., 30-1-1973. The coal mines specified in the Schedule to the Act weredeemed to be the mines of which the management vested inthe Central Government by virtue of the provisions of Section3(2). It was further provided that, if after the appointed day, theexistence of any other coal mine came to the knowledge of the


Central Government, whether after an investigation or inpursuance of an intimation given to it under sub-section (5) orotherwise, the Central Government was empowered to issue anorder making a declaration about the existence of such mine onand from the date of such declaration. The management ofsuch mines was also deemed to have vested in the CentralGovernment and such coal mines were deemed to have beenincluded in the Schedule. Sub-sections (3), (4), (5) and (6) ofSection 3 provided as under:

“3. (3) If any error or omission is noticed in the Schedulein relation to the name or address of the owner of a coalmine, the owner of such mine shall, within thirty days fromthe date on which this Act receives the assent of thePresident, bring such error or omission to the notice of theCentral Government.(4) If, after the appointed day, the Central Government issatisfied, whether from any information received by it orotherwise, that there has been any error, omission ormisdescription in relation in the particulars of a coal mineincluded, or deemed to be included, in the Schedule orthe name and address of the owner of any such coalmine, it may by notified order, correct such error, omissionor misdescription and on the issue of such notified orderthe relevant entries in the Schedule shall stand correctedaccordingly:Provided that no such correction in relation to theownership of a coal mine shall be made where suchownership is in dispute.(5) Every person in charge, immediately before the dateon which this Act receives the assent of the President, ofthe management of any coal mine, being a coal mine notincluded or deemed to be included on the said date in theSchedule, shall, within thirty days from the said date,intimate to the Central Government the name and locationof such mine and the name and address of the ownerthereof.(6) Where there is a dispute with regard to the declarationmade by the Coal Board under the Coking Coal Mines(Emergency Provisions) Act, 1971, to the effect that acoal mine contains coking coal, the management of suchcoal mine shall, notwithstanding anything contained in thesaid Act, vest in the Central Government under this Actand nothing contained in the first mentioned Act shallapply, or be deemed ever to have applied, to the said coalmine.”


13. For the purpose of this case, it is important to note that theSchedule appended to the Act was not treated as final andconclusive. Every person in charge of management of coalmine which was not included in the Schedule had a duty tointimate to the Central Government, the name and location ofsuch mine and the name and address of the owner thereof.The words specifically not defined in Section 2 were assignedthe meanings given to them in Section 3 of the Mines Act,1952. ‘Mine’, however, was given a very wide meaning underSection 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


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 notspecified either in the schedule to the Management Act or inthe Schedule to the Nationalisation Act, the management ofthe colliery of Subodhchandra Mondal, Respondent 4 wasneither taken over by the Central Government nor was itnationalised under the Nationalisation Act. In the absence ofnationalisation of the said colliery, the petitioner and otheremployees, even if they had been working in the said collierycould not get benefit of Section 14 of the Nationalisation Actas Section 14 protects the interest of those workmen whomay have been working in a coal mine, specified in theschedule to the Nationalisation Act. The employees of aprivate owner even though working in a coal mine are notentitled to be treated as employees of the CentralGovernment unless the coal mine is nationalised andspecified in the schedule to the Nationalisation Act. SinceNatundihi Pahariabera Colliery was not specified in theschedule to the Nationalisation Act the workmen which mayhave been under the employment of Subodhchandra Mondalare not entitled to the benefit of Section 14 of theNationalisation Act. Faced with this situation counsel for thepetitioner urged that Natundihi Pahariabera Colliery was acoal mine as defined by Section 2(b) of the Management Acton the appointed day, but the same was not specified in theschedule to the Act due to some error. He further urged thatsince the Central Government had acquired knowledgeabout the existence of the mine it was under a legal duty toissue a notified order making declaration about the existenceof such mine and to take over its management. Proviso toSection 3(2) of the Management Act confers power on theCentral Government to make declaration about the exisenceof a coal mine for the purpose of taking over of itsmanagement if the existence of such coal mine comes to itsknowledge after the appointed day. This provision


presupposes the existence of the coal mine as defined bySection 2(b) of the Management Act on the appointed daynamely, January 31, 1973. The legal duty cast on the CentralGovernment to issue a notified order about a coal mine forthe purpose of including the same to the schedule under theManagement Act would arise if such coal mine as defined bythe Management Act existed on the appointed day, no suchlegal obligation would be on the Central Government to issueany notified order making declaration as contemplated bySection 3(2) of the Management Act even though the CentralGovernment may have acquired knowledge about theexistence of coal mine. The prerequisite for the exercise ofthe power is the existence of a coal mine on the appointedday as defined by Section 2(b) of the Act. There is a seriousdispute about the existence of Natundihi PahariaberaColliery on the appointed day namely January 31, 1973.Since this question is a question of fact we would determinethis 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


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


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 notrequired that misappropriation must necessarily take placeafter the creation of a legally correct entrustment ordominion over property. The entrustment may arise in anymanner whatsoever. That manner may or may not involvefraudulent conduct of the accused. Section 409 IPC, coversdishonest misappropriation in both types of cases; that is tosay, those where the receipt of property is itself fraudulent orimproper and those where the public servantmisappropriates what may have been quite properly andinnocently received. All that is required is what may bedescribed as entrustment or acquisition of dominion overproperty in the capacity of a public servant who, as a resultof 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


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,


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.


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-1M/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.


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


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 todeliver any property to any person, or to consent that anyperson shall retain any property, or intentionally induces theperson so deceived to do or omit to do anything which hewould not do or omit if he were not so deceived, and whichact or omission causes or is likely to cause damage or harmto that person in body, mind, reputation or property, is said to“cheat”.

Explanation. —A dishonest concealment of facts is adeception 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


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 thatit can be conveniently divided into two parts. The first partmakes it necessary that the deception by the accused of theperson deceived, must be fraudulent or dishonest. Suchdeception must induce the person deceived to either: (a)deliver property to any person; or (b) consent that anyperson shall retain any property. The second part alsorequires that the accused must by deception intentionallyinduce the person deceived either to do or omit to doanything which he would not do or omit, if he was not sodeceived. Furthermore, such act or omission must cause ormust be likely to cause damage or harm to that person inbody, mind, reputation or property. Thus, it is evident thatdeception is a necessary ingredient for the offences ofcheating under both parts of this section. The complainant,therefore, necessarily needs to prove that the inducementhad been caused by the deception exercised by theaccused. Such deception must necessarily produce theinducement to part with or deliver property, which thecomplainant would not have parted with or delivered, but forthe inducement resulting from deception. The Explanation tothe section would clearly indicate that there must be nodishonest concealment of facts. In other words, non-disclosure of relevant information would also be treated as amisrepresentation 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 keepthe investors in dark about the Iridium system and gave themall necessary information in respect of various aspects of thesystem. In coming to the aforesaid conclusion, the HighCourt observed that "a bare perusal of the complaint showsthat there is no reference to the Stock Purchase Agreementsof 1993 and 1994. In fact, these two important documentscontain acknowledgments of the investors about theircapability of evaluating the merits and risks of the purchaseof the shares and their relying upon their own advisors." The


High Court, therefore, negated the submission that there hasnot been a complete and candid disclosure of the entirematerial which has resulted in the deception / inducement ofthe appellant to make huge investment in the Iridium. Thisconclusion reached by the High Court did not take notice ofthe Explanation to Section 415. The aforesaid Explanationgives a statutory recognition to the legal principlesestablished through various judicial pronouncements thatmisleading statements which withhold the vital facts forintentionally inducing a person to do or to omit to dosomething would amount to deception. Further, in case it isfound that misleading statement has wrongfully causeddamage to the person deceived it would amount to cheating.

“73. It would at this stage be appropriate to notice theobservations made by the House of Lords in Central RailwayCo. of Venezuela v. Kisch (1867 LR 2 HL 99) which would beof some relevance to the issue under consideration. In thiscase, the House of Lords examined the duty of those whoissued a prospectus inviting investments from the generalpublic and held that they were required to make a true andfull disclosure of all the relevant facts. The House of Lordsquoted with approval the observations made in NewBrunswick and Canada Railway Co. v. Muggeridge [(1860) 1Dr & Sm 363 at pp. 381-82 : 62 ER 418] wherein it has beenobserved as follows: (ER p. 425)

“… those who issue a prospectus holding out to thepublic the great advantages which will accrue topersons who will take shares in a proposedundertaking, and inviting them to take shares on thefaith of the representations therein contained, arebound to state everything with strict and scrupulousaccuracy, and not only to abstain from stating asfacts that which is not so, but to omit no one factwithin their knowledge the existence of which mightin any degree affect the nature, or extent, or qualityof the privileges and advantages which theprospectus holds out as inducements to takeshares;”

74.The House of Lords went on to observe that it is noanswer to a person who has been deceived that he wouldhave known the truth by proper inquiry. It would be appositeto reproduce here the observations made by the House ofLords on this aspect of the matter: (Kisch case[1867 LR 2 HL


99] , LR pp. 120-21)“But it appears to me that when once it is establishedthat there has been any fraudulent misrepresentation orwilful concealment by which a person has been inducedto enter into a contract, it is no answer to his claim to berelieved from it to tell him that he might have known thetruth by proper inquiry. He has a right to retort upon hisobjector, ‘You, at least, who have stated what is untrue,or have concealed the truth, for the purpose of drawingme into a contract, cannot accuse me of want of cautionbecause I relied implicitly upon your fairness andhonesty.’ I quite agree with the opinion of LordLyndhurst, in Small v. Attwood [ You 407 : 159 ER1051] , that:

‘where representations are made with respect tothe nature and character of property which is tobecome the subject of purchase, affecting the valueof that property, and those representations afterwardsturn out to be incorrect and false, to the knowledge ofthe party making them, a foundation is laid formaintaining an action in a court of common law torecover damages for the deceit so practiced; and in aCourt of equity a foundation is laid for setting asidethe 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 theproposition, which was an action for deceit in falselyrepresenting the amount of the business done in apublic house, the purchaser was held to be entitled torecover damages, although the books were in thehouse, and he might have had access to them if hethought proper.Upon the whole case I think the decree of LordsJustices ought to be affirmed, and the appealdismissed 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


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


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.


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


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,


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 exclusivelyfor captive use. First of all, it will be washed. Middling willbe utilised for generation of power. The washed coal will beutilised for manufacturing of coke and the coke will beutilised for our iron foundry situated in the industrial areaBokaro.”

383. Subsequently, vide another communication dated 21/04/1999


(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 coalwashery near the mining project and subsequently locating10 MW power plant in phases based on middling/rejects.Until bulk samples of coal are taken, it will not be possible toestimate the percentage and quality of middling and rejects.We propose to set up the power plant of 10 MW capacity in 2phases near the coal washery. We are already inpossession of 3 numbers steam power generation sets of 5MW each”. It was further stated that we have engineeringworkshop at Dhanbad and our steel foundry having inductionfurnace and arc furnace, which are lying idle at present dueto 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


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 14 th 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 14 th

screening committee on 18/19.06.99, any reference was made to the


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 CoalMine in Giridi, Bihar in the name of Castron TechnologiesLtd and in case the said lease is granted then in such eventthe Third Party hereto agree that the Directors of CastronTechnologies Ltd (Castron) shall assign and transfer theright title and interest of Castron in the said lease-holdproperty in favour of the First Party or his nominees.

5.1. All costs and expenses so far incurred or is likely to beincurred in the matter of obtaining such lease from the dateof application till the grant of lease and thereafter have beenand shall be paid by the First Party and the Third Party shallnot be liable on account of such costs and expenses.

5.2. The First Party will be entitled to follow up theapplication for grant of lease on behalf of CastronTechnologies Ltd.

5.3. Until the transfer as contemplated in Clause 5hereinabove is made, the Third Party agrees to havegranted from Castron an irrevocable registered Power ofAttorney in favour of the First Party or his nominee to do allacts, deeds and things as may be required in connectionwith the said Coal Mine in Giridi.

5.4 It is clarified that upon grant of the lease of the saidCoal Mine, the First Party shall have absolute right, title andinterest in the said Coal Mine and be entitled to deal with thesame in any manner as he may deem fit and proper and theother parties hereto shall not have any claim or demand inthe said Coal Mine in any manner whatsoever.”

388. The first party to the said memorandum of family arrangement was


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 beincurred in the matter of obtaining such lease from the dateof application till the grant of lease and thereafter have beenand shall be paid by the First Party and the Third Party shallnot 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


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


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


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


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


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


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


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


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-CANo.

GOVERNMENT OF INDIAMINISTRY OF COAL

6.5.1998Shastri Bhavan, New Delhi, the


ToM/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 24.11.97regarding the subject mentioned above, your attention is invited to thisMinistry’s letter of even number dated 21.6.96 and 2.1.96 wherein it wasclarified that the application for the recognition of Shri M L Dugar toprepare the mining plan for the above mentioned coal project can beconsidered only after your company receives a letter from the Ministryconveying offer of Bramhadiha coal block to your company for captiveconsumption. Since the above mentioned block is yet to be offered to yourcompany for captive consumption, it is not possible for this Ministry toconsider the application of Shri Dugar for recognition as a qualified personto prepare the mining plan and also to consider the mining plan, forapproval 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 arereturned 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


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 ofIndia, (1980) 4 SCC 179] , a seven-Judge ConstitutionBench while dealing with the purposiveness of the CMN Act,as amended in 1976, vis-à-vis the 1957 Act, stated thatnothing in this Act (CMN) could be construed as aderogation of the principle enunciated in Section 18 of the1957 Act. The Court said: (SCC pp. 196-97, para 36)

“36. …Therefore, even in regard to matters fallingunder the Nationalisation Amendment Act whichterminates existing leases and makes it lawful forthe Central Government to obtain fresh leases, theobligation of Section 18 of the 1957 Act will continueto apply in its full rigour. As contended by thelearned Solicitor General, Section 18 contains astatutory behest and projects a purposive legislativepolicy. The later Acts on the subject of regulation ofmines and mineral development are linked up withthe policy enunciated in Section 18.”

(emphasis supplied)

67.The observations made by this Court in Tara PrasadSingh [Tara Prasad Singh v.Union of India, (1980) 4 SCC179] about interplay between the CMN Act and the 1957 Actwith reference to the policy enunciated in Section 18, in ourview, apply equally to the entire legal regime articulated inthe 1957 Act. We are of the opinion that nothing should beread in the two Acts, namely, the CMN Act and the 1957 Act,which results in destruction of the policy, purpose andscheme of the two Acts. It is not right to suggest that byvirtue of declaration under Section 1-A of the CMN Act, the


power of the State under Section 10(3) of the 1957 Act hasbecome unavailable. The submission of Mr Harish N. Salve,learned Senior Counsel for the interveners that additionaldeclaration under Section 1-A of the CMN Act seeks to doaway with any vestige of power in the State in the matter ofselection of beneficiaries of the mineral is not meritorious.Had that been so, Rule 35 of the 1960 Rules would not havebeen amended to provide that where two or more personshave applied for reconnaissance permit or prospectinglicence or a mining lease in respect of the same land, theState Government shall, inter alia, consider the end use ofthe mineral by the applicant. The declaration under Section1-A has not denuded the States of any power in relation togrant of mining leases and determining of those permitted tocarry on coal mining operation.

68. The allocation of coal block is not simply identification ofthe coal block or the allocatee as contended by the learnedAttorney General but it is in fact selection of beneficiary. As amatter of fact, Mr Harish N. Salve, learned Senior Counselfor the interveners, has taken a definite position thatallocation letter may not by itself confer purported rights inthe minerals but such allocation has legal consequencesand confers private rights to the allocatees for obtaining thecoal mining leases for their end-use plants.

69. In view of the foregoing discussion, we hold, as it mustbe, that the exercise undertaken by the Central Governmentin allocating the coal blocks or, in other words, the selectionof beneficiaries, is not traceable either to the 1957 Act or theCMN Act. No such legislative policy (allocation of coal blocksby the Central Government) is discernible from these twoenactments. Insofar as Article 73 of the Constitution isconcerned, there is no doubt that the executive power of theUnion extends to the matters with respect to whichParliament has power to make laws and the executiveinstructions can fill up the gaps not covered by statutoryprovisions but it is equally well settled that the executiveinstructions cannot be in derogation of the statutoryprovisions. The practice and procedure for allocation of coalblocks by the Central Government through administrativeroute is clearly inconsistent with the law already enacted orthe rules framed.”

401. Thus considering either way, it can not be even presumed for the


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


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


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 theappellant deceived the Government of Madras anddishonestly induced it to deliver something in the form ofsalary to the appellant. It is urged that the appointment to thepost lay with the Government and not with the ServiceCommission and that 'the Government would not haveappointed him to the post in the Medical Service if it had notbelieved that the appellant possessed the necessaryqualifications which, in his case, would be a degree of M.B.,B.S., and that such a belief was entertained by theGovernment on account of the deception practised by theappellant in misrepresenting in his application that he heldsuch a degree. On the other hand, it is contended for theappellant that the delivery of 'property' is to be by the persondeceived, in view of the language of Section 415 I.P.C., andthat the person deceived, if any, was the ServiceCommission and not the Government, the applicationcontaining the misrepresentation having been made to theService Commission and not to the Government.12. We accept the contention for the respondent. Theappointments to the Medical Services are made byGovernment. The Service Commission simply selected thecandidates and recommends their names to Government forappointment. This is clear from letter Exhibit P. 47 from theSecretary to the Service Commission to the Surgeon-General with the Government of Madras. The letter refers tothe enclosing of a list containing the names and other


particulars of the candidates who were successful at theexamination, their names being arranged in order of merit. Itrefers to the relaxing of a certain rule in view of the paucity ofcandidates and states that they may be appointed, ifnecessary, pending receipt of the certificate of physicalfitness and a further communication from the commission. 13. This is also clear from the provisions of the Governmentof India Act, 1935. Section 241 provided that appointmentsin connection with the affairs of a Province will be made bythe Governor of the Province. Sub-Section (1) of Section 266makes it a duty of the Provincial Public Service Commissionto conduct examinations for appointments to the Services ofa Province. Clause (a) of sub-s. (3) provides that theProvincial Public Service Commission shall be consulted onall matters relating to methods of recruitment to civil servicesand for civil posts and cl. (b) provides that it shall beconsulted on the principles to be followed in makingappointments to civil services and posts and on thesuitability of candidates for such appointments. The PublicService Commission is constituted in pursuance of theprovisions of Section 264. It is thus a statutory body andindependent of the Government. This aspect of a PublicService Commission was emphasized in State of U.P. v.Manbodhan Lal Srivastava when considering thecorresponding provisions of Article 320 of the Constitution.This Court said: "Once, relevant regulations have been made, theyare meant to be followed in letter and in spirit and it goeswithout saying that consultation with the Commission onall disciplinary matters affecting a public servant has beenspecifically provided for in order, first, to give anassurance to the Services that a wholly independentbody, not directly concerned with the making of ordersadversely affecting public servants, has considered theaction proposed to be taken against a particular publicservant, with an open mind; and, secondly, to afford theGovernment unbiassed advice and opinion on mattersvitally affecting the morale of public services".

It is in view of these provisions that the Public ServiceCommission invites applications for appointment to thevarious posts under the Government and subsequentlymakes a selection out of the candidates for appointment tothose posts. The selection may be after holding a writtenexamination or after interviewing candidates or after doing


both. Names of the candidates selected are arranged inorder of merit and forwarded to the Government. TheGovernment is expected, as a rule, to make appointments tothe posts from out of the list, in the same order. It has,however, discretion not to appoint any part of the persons soselected and securing a place in the order of merit whichwould have ordinarily led to his appointment. 14. Any representation made in an application forappointments is really a representation made to theGovernment, the appointing authority, and not only to thePublic Service Commission to which the application ispresented and which has to deal with that application in thefirst instance. up to the stage ,of selection. The object of theapplicant was to secure an appointment and not merely todeceive the Public Service Commission and sit at theexamination or to appear at the interview. The deceptionwas practised for that purpose and therefore there seems tobe no good reason for holding that the deception came to anend once the Service Commission was deceived and hadtaken action on it as a result of the deception. A falserepresentation in an application to the Service Commissioncontinues and persists to be so till the application isconsidered by the final authority responsible for making theappointments and must therefore be deemed to be made tothat final authority as well. In the instant case, when therecommendation of the Service Commission was sent to theGovernment, the qualifications of the recommendedcandidates, including the fact that the appellant had passedthe M.B.,B.S. examination were mentioned. TheGovernment therefore believed that the appellant possessedthe degree of M.B.B.S., that as the Service Commission hadscrutinized the application in that regard and had satisfieditself that the appellant possessed that degree. Theconsequence of that is that the Government were led tobelieve that fact, which thus became a false representation. We are therefore of opinion that the appellant's mis-representation to the Service Commission continued andpersisted till the final stage of the Government passing anorder of appointment and that therefore the Governmentitself was deceived by the misrepresentation he had made inhis application presented to the Service Commission.”


406. Coming now to the case in hand, it is thus crystal clear that the


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 letteris not merely an identification exercise as is sought to bemade out by the learned Attorney General. From the positionexplained by the concerned State Governments, it is clearthat the allocation letter by the Central Government createsand confers a very valuable right upon the allottee. We areunable to accept the submission of the learned AttorneyGeneral that allocation letter is not bankable. As a matter offact, the allocation letter by the Central Government leavespractically or apparently nothing for the State Government todecide save and except to carry out the formality ofprocessing the application and for execution of the leasedeed with the beneficiary selected by the CentralGovernment. Though, the legal regime under the 1957 Actimposes responsibility and statutory obligation upon theState Government to recommend or not to recommend to theCentral Government grant of prospecting licence or mininglease for the coal mines, but once the letter allocating a coalblock is issued by the Central Government, the statutory roleof the State Government is reduced to completion ofprocessual formalities only. As noticed earlier, the declaration


under Section 1A of the CMN Act does not take away thepower of the State under Section 10(3) of the 1957 Act. It isso because the declaration under Section 1A of the CMN Actis in addition to the declaration made under Section 2 of the1957 Act and not in its derogation. 1957 Act continues toapply with the same rigour in the matter of grant ofprospecting licence or mining lease of coal mines but theeligibility of persons who can carry out coal miningoperations is restricted to the persons specified in Section3(3)(a) of the CMN Act.

. . . . . .

. . . . . .

. . . . . .

73. Assuming that the Central Government has competenceto make allocation of coal blocks, the next question is,whether such allocation confers any valuable rightamounting to grant of largesse?

74. The Learned Attorney General argues that allocation ofcoal blocks does not amount to grant of largesse since it isonly the first statutory step. According to him, the questionwhether the allocation amounts to grant of largesse must beappreciated not from the perspective whether allocationconfers any rights upon the allocatee but whether allocationamounts to conferment of largesse upon the allocatee. Anallocatee, learned Attorney General submits, does not getright to win or mine the coal on allocation and, therefore, anallocation letter does not result in windfall gain for theallocatee. He submits that diverse steps, as provided inRules 22A, 22B, and 22(5) of the 1960 Rules and the otherstatutory requirements, have to be followed and ultimatelythe grant of prospecting licence in relation to unexploredcoal blocks or grant of mining lease with regard to exploredblocks entitles the allocatee/licensee/lessee to win or minethe coal.

75. We are unable to accept the submission of the learnedAttorney General that allocation of coal block does notamount to grant of largesse. It is true that allocation letter byitself does not authorize the allottee to win or mine the coalbut nevertheless the allocation letter does confer a veryimportant right upon the allottee to apply for grant ofprospecting licence or mining lease. As a matter of fact, it isadmitted by the interveners that allocation letter issued by


the Central Government provides rights to the allottees forobtaining the coal mines leases for their end-use plants. Thebanks, financial institutions, land acquisition authorities,revenue authorities and various other entities and so alsothe State Governments, who ultimately grant prospectinglicence or mining lease, as the case may be, act on thebasis of the letter of allocation issued by the CentralGovernment. As noticed earlier, the allocation of coal blockby the Central Government results in the selection ofbeneficiary which entitles the beneficiary to get theprospecting licence and/or mining lease from the StateGovernment. Obviously, allocation of a coal block amountsto grant of largesse.

76. The Learned Attorney General accepted the position thatin the absence of allocation letter, even the eligible personunder Section 3(3) of the CMN Act cannot apply to the StateGovernment for grant of prospecting licence or mining lease.The right to obtain prospecting licence or mining lease of thecoal mine admittedly is dependant upon the allocation letter.The allocation letter, therefore, confers a valuable right infavour of the allottee. Obviously, therefore, such allocationhas to meet the twin constitutional tests, one, the distributionof natural resources that vest in the State is to sub-serve thecommon good and, two, the allocation is not violative ofArticle 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


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 IPCagainst A-1 M/s. Castron Technologies Ltd., A-2 Mahendra KumarAgarwalla, A-4 Dilip Ray, A-5 Pradip Kumar Banerjee and A-6 NityaNand 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 ofconspiracy may be summarized though, as the nameimplies, a summary cannot be exhaustive of the principles.

Under Section 120A IPC offence of criminal conspiracy iscommitted when two or more persons agree to do or causeto be done an illegal act or legal act by illegal means. Whenit is legal act by illegal means overt act is necessary. Offenceof criminal conspiracy is exception to the general law whereintent alone does not constitute crime. It is intention tocommit crime and joining hands with persons having thesame intention. Not only the intention but there has to beagreement to carry out the object of the intention, which is anoffence. The question for consideration in a case is did allthe accused had the intention and did they agree that thecrime be committed. It would not be enough for the offenceof conspiracy when some of the accused merely entertaineda wish, howsoever, horrendous it may be, that offence be


committed.

Acts subsequent to the achieving of object of conspiracymay tend to prove that a particular accused was party to theconspiracy. Once the object of conspiracy has beenachieved, any subsequent act, which may be unlawful, wouldnot make the accused a part of the conspiracy like givingshelter to an absconder.

Conspiracy is hatched in private or in secrecy. It is rarelypossible to establish a conspiracy by direct evidence.Usually, both the existence of the conspiracy and its objectshave to be inferred from the circumstances and the conductof the accused.

Conspirators may, for example, be enrolled in a chain - Aenrolling B, B enrolling C, and so on; and all will be membersof a single conspiracy if they so intend and agree, eventhough each member knows only the person who enrolledhim and the person whom he enrolls. There may be a kind ofumbrella-spoke enrollment, where a single person at thecenter doing the enrolling and all the other members beingunknown to each other, though they know that there are tobe other members. These are theories and in practice it maybe difficult to tell whether the conspiracy in a particular casefalls into which category. It may, however, even overlap. Butthen there has to be present mutual interest. Persons maybe members of single conspiracy even though each isignorant of the identity of many others who may have diverserole to play. It is not a part of the crime of conspiracy that allthe conspirators need to agree to play the same or an activerole.

When two or more persons agree to commit a crime ofconspiracy, then regardless of making or considering anyplans for its commission, and despite the fact that no step istaken by any such person to carry out their commonpurpose, a crime is committed by each and every one whojoins in the agreement. There has thus to be twoconspirators and there may be more than that. To prove thecharge of conspiracy it is not necessary that intended crimewas committed or not. If committed it may further helpprosecution to prove the charge of conspiracy.

It is not necessary that all conspirators should agree to thecommon purpose at the same time. They may join with otherconspirators at any time before the consummation of theintended objective, and all are equally responsible. What part


each conspirator is to play may not be known to everyone orthe fact as to when a conspirator joined the conspiracy andwhen he left.

A charge of conspiracy may prejudice the accused becauseit is forced them into a joint trial and the court may considerthe entire mass of evidence against every accused.Prosecution has to produce evidence not only to show thateach of the accused has knowledge of object of conspiracybut also of the agreement. In the charge of conspiracy courthas to guard itself against the danger of unfairness to theaccused. Introduction of evidence against some may resultin the conviction of all, which is to be avoided. By means ofevidence in conspiracy, which is otherwise inadmissible inthe trial of any other substantive offence prosecution tries toimplicate the accused not only in the conspiracy itself butalso in the substantive crime of the alleged conspirators.There is always difficulty in tracing the precise contribution ofeach member of the conspiracy but then there has to becogent and convincing evidence against each one of theaccused charged with the offence of conspiracy. Asobserved by Judge Learned Hand that "this distinction isimportant today when many prosecutors seek to sweepwithin the dragnet of conspiracy all those who have beenassociated in any degree whatever with the main offenders".

As stated above it is the unlawful agreement and not itsaccomplishment, which is the gist or essence of the crime ofconspiracy. Offence of criminal conspiracy is complete eventhough there is no agreement as to the means by which thepurpose is to be accomplished. It is the unlawful agreement,which is the graham of the crime of conspiracy. The unlawfulagreement which amounts to a conspiracy need not beformal or express, but may be inherent in and inferred fromthe circumstances, especially declarations, acts, andconduct of the conspirators. The agreement need not beentered into by all the parties to it at the same time, but maybe reached by successive actions evidencing their joining ofthe conspiracy.

It has been said that a criminal conspiracy is a partnership incrime, and that there is in each conspiracy a joint or mutualagency for the prosecution of a common plan. Thus, if two ormore persons enter into a conspiracy, any act done by any ofthem pursuant to the agreement is in contemplation of law,the act of each of them and they are jointly responsibletherefore. This means that everything said, written or done


by any of the conspirators in execution or furtherance of thecommon purpose is deemed to have been said, done, orwritten by each of them. And this joint responsibility extendsnot only to what is done by any of the conspirators pursuantto the original agreement but also to collateral acts incidentto and growing out of the original purpose. A conspirator isnot responsible, however, for acts done by a co-conspiratorafter termination of the conspiracy. The joinder of aconspiracy by a new member does not create a newconspiracy nor does it change the status of the otherconspirators, and the mere fact that conspirators individuallyor in groups perform different tasks to a common end doesnot 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 amerely passive attitude towards an existing conspiracy. Onewho commits an overt act with knowledge of the conspiracyis guilty. And one who tacitly consents to the object of aconspiracy and goes along with other conspirators, actuallystanding by while the others put the conspiracy into effect, isguilty 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 criminalconspiracy, though the illegal act agreed to be done has notbeen done. So too, it is not an ingredient of the offence thatall the parties should agree to do a single illegal act. It maycomprise the commission of a number of acts. UnderSection 43 of the Indian Penal Code, an act would be illegalif it is an offence or if it is prohibited by law. Under the firstcharge the accused are charged with having conspired to do


three categories of illegal acts, and the mere fact that all ofthem could not be convicted separately in respect of each ofthe offences has no relevancy in considering the questionwhether the offence of conspiracy has been committed.They are all guilty of the offence of conspiracy to do illegalacts, though for individual offences all of them may not beliable.”

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


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


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 againstA-1 company M/s. Castron Technologies Ltd. (M/s CTL), A-2Mahendra Kumar Agarwalla and A-3 company M/s Castron MiningLtd. (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


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


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.


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


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


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 thewordings used in Section 22, in our considered opinion, theprovision is not a complete and absolute bar for taking actionby the police for illegal and dishonestly committing theft ofminerals including sand from the river bed. The Court shalltake judicial notice of the fact that over the years rivers inIndia have been affected by the alarming rate of unrestrictedsand mining which is damaging the eco-system of the riversand safety of bridges. It also weakens riverbeds, fishbreeding and destroys the natural habitat of manyorganisms. If these illegal activities are not stopped by theState and the police authorities of the State, it will causeserious repercussions as mentioned hereinabove. It will notonly change the river hydrology but also will deplete theground water levels.70. There cannot be any dispute with regard to restrictionsimposed under the MMDR Act and remedy provided therein.In any case, where there is a mining activity by any person incontravention of the provisions of Section 4 and othersections of the Act, the officer empowered and authorizedunder the Act shall exercise all the powers including makinga complaint before the Jurisdictional Magistrate. It is also notin dispute that the Magistrate shall in such cases takecognizance on the basis of the complaint filed before it by aduly authorized officer. In case of breach and violation ofSection 4 and other provisions of the Act, the police officercannot insist Magistrate for taking cognizance under the Acton the basis of the record submitted by the police allegingcontravention of the said Act. In other words, the prohibitioncontained in Section 22 of the Act against prosecution of aperson except on a complaint made by the officer is attractedonly when such person sought to be prosecuted forcontravention of Section 4 of the Act and not for any act oromission which constitute an offence under the Penal Code.71. However, there may be a situation where a personwithout any lease or licence or any authority enters into riverand extracts sand, gravel and other minerals and remove ortransport those minerals in a clandestine manner with anintent to remove dishonestly those minerals from the


https://indiankanoon.org/doc/1569253/


possession of the State, is liable to be punished forcommitting such offence under Sections 378 and 379 of thePenal Code.72. From a close reading of the provisions of MMDR Act andthe offence defined under Section 378, IPC, it is manifestthat the ingredients constituting the offence are different. Thecontravention of terms and conditions of mining lease ordoing mining activity in violation of Section 4 of the Act is anoffence punishable under Section 2 of the MMDR Act,whereas dishonestly removing sand, gravel and otherminerals from the river, which is the property of the State, outof State’s possession without the consent, constitute anoffence of theft. Hence, merely because initiation ofproceeding for commission of an offence under the MMDRAct on the basis of complaint cannot and shall not debar thepolice from taking action against persons for committing theftof sand and minerals in the manner mentioned above byexercising power under the Code of Criminal Procedure andsubmit a report before the Magistrate for taking cognizanceagainst such person. In other words, in a case where there isa theft of sand and gravels from the Government land, thepolice can register a case, investigate the same and submit afinal report under Section 173, Cr.P.C. before a Magistratehaving jurisdiction for the purpose of taking cognizance asprovided in Section 190 (1)(d) of the Code of CriminalProcedure.73. After giving our thoughtful consideration in the matter, inthe light of relevant provisions of the Act vis-à-vis the Code ofCriminal Procedure and , the Indian Penal Codewe are of thedefinite opinion that the ingredients constituting the offenceunder the MMDR Act and the ingredients of dishonestlyremoving sand and gravel from the riverbeds withoutconsent, which is the property of the State, is a distinctoffence under IPC. Hence, for the commission of offenceunder Section 378 Cr.P.C., on receipt of the police report, theMagistrate having jurisdiction can take cognizance of thesaid offence without awaiting the receipt of complaint thatmay be filed by the authorized officer for taking cognizance inrespect of violation of various provisions of the MMRD Act.Consequently the contrary view taken by the different HighCourts cannot be sustained in law and, therefore, overruled.Consequently, these criminal appeals are disposed of with adirection to the concerned Magistrates to proceedaccordingly.”










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 anymoveable property out of the possession of any personwithout that person’s consent, moves that property in orderto 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 itbecomes capable of being the subject of theft as soon as itis severed from the earth.

Explanation 2.—A moving effected by the same act whichaffects the severance may be a theft.

Explanation 3.—A person is said to cause a thing to move byremoving an obstacle which prevented it from moving or byseparating it from any other thing, as well as by actuallymoving it.

Explanation 4.—A person, who by any means causes ananimal to move, is said to move that animal, and to moveeverything which, in consequence of the motion so caused,is moved by that animal.

Explanation 5.—The consent mentioned in the definition maybe express or implied, and may be given either by theperson in possession, or by any person having for thatpurpose authority either express or implied.”

425. Before proceeding further, It will be also appropriate to refer to

illustration (a) to section 378 IPC:


Illustration(a) A cuts down a tree on Z’s ground, with the intention ofdishonestly taking the tree out of Z’s possession without Z’sconsent. Here, as soon as A has severed the tree in order tosuch 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


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


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.


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


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 outto Parmeshwar Kumar Agarwalla of Dhanbad.2. On an application made by our company, M/s. Castron TechnologiesLtd., a public limited company, which was recommended by the StateGovernment and prior approval was obtained from the CentralGovernment, lease was granted in our favour. Therefore, other detailsof the news item are irrelevant and do not require any explanation.3. So far as points raised by Director (Mines), Government ofJharkhand is concerned, we beg to submit that washery is alreadyestablished 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 afterascertaining the quality and quantity of middling available after washingof coal. You will appreciate that it is an old and abandoned mine inwhich case it is not known how much coal will be available and howmuch of the middling will be available after washing the coal. Therefore,in absence of this data, it is not possible to make huge investments onpower plant, which costs approximately Rs.18 crores in our case.However, we can assure you that not an ounce of middling will be soldin 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 provisionof law, this quality of coal cannot be used for generation of power. In ourcase the captive use is making of coke as directed by the Central


Government in course of discussion when the mining lease was beingapproved 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 theState Government will appreciate that at least in our leasehold area,illegal mining will stop and life of people involved in illegal mining will besaved. State Government will get royalty and sales tax and willgenerate extra revenue instead of losing this coal, whatever meagerreserve is available for exploitation of coal illegally from this abandonedmine like many other illegal mines where people are losing their livesevery now and then. Thanking you,

Yours faithfully,For CASTRON Technologies Ltd.,

Sd/B. RAIGeneral Manager (Mines)

Mumbai Office: 84, Maker Chambers III, Nariman Point, Mumbai-21, Tel.: 2285 2736 *Fax 22046235 Regd. Office: 8, waterloo Street, Kolkata 700 069. Tel.. 2248 9975/2248 6442Works ; 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


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.


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 CASTRONDate: 17th May, 2007 MINING

LIMITEDTo BRAHMADIHA OPENCAST

COAL MINE PROJECTThe 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 atBrahmadiha Opencast Coalmine Project, we commenced miningoperation.


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 directedunder para 3 of your permission letter dated 15th February, 2005.

We were also directed under clause 5 of the said letter to get the minedcoal tested by C.F.R.I. Dhanbad. In compliance of the same we requestedthe C.F.R.I. to collect sample and provide us the Test Report. On theirdemand we paid a sum of Rs. 1,71,664/- (Rupees One lac seventy onethousand six hundred sixty four only) through Bank Draft dated 17 th 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 CalcuttaHigh Court order dated 13th May, 2003, that all properties, rights andinterest of “Castron Technologies Limited” (in whose name the lease andpermission was granted) has vested in “Castron Mining limited. TheC.F.R.I. collected testing fee from “Castron Mining Limited”. However, theyare refusing to hand over the Test Report to us. We have been followingwith C.F.R.I. vigorously but of no result. A copy of letter addressed toC.F.R.I. by Managing Director, Castron Mining Limited, dated 28 th April2006 is enclosed which speaks for itself.

Denial of such Test Report by C.F.R.I. has caused us financial loss as wecould not dispatch our coal in absence of determination of grade,deterioration of Calorific Value and Coking Properties of coal. We have notbeen able to decide on installation of power plant (2 x 5 MW) as containedunder para 5 of your permission letter.

Coal is lying in stock since May – June, 2004. We stopped adding coal toexisting stock since November 2005. Coal was mined from the left overpillars after extraction of coal in past. For production of 1 tonne of coal wehad to remove 15 cum of Overburden. Thus we had to invest heavily inextracting about 20,000 tonnes of coal, which could not be sold. Quality ofcoal in the stock coal has deteriorated to the extent that it can no longerbe used for manufacturing “Coke”.

Under the circumstances brought out above request for your kindintervention 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


Sd/-17-5-07BHARTENDU RAIDirector.

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


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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 oflimitation – (1) Except as otherwise provided elsewhere inthis Code, no Court, shall take cognizance of an offence ofthe category specified in sub-section (2), after the expiry ofthe 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 imprisonmentfor a term not exceeding one year;


(c) three years, if the offence is punishable withimprisonment for a term exceeding one year but notexceeding three years. [(3) For the purposes of this section the period of limitation,in relation to offences which may be tried together, shall bedetermined with reference to the offence which is punishablewith the more severe punishment or, as the case may be, themost 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


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 followingpersons 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, andpersons accused of receiving or retaining, or assisting in thedisposal or concealment of, property possession of which isalleged to have been transferred by any such offencecommitted by the first-named persons, or of abetment of orattempting 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


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 DilipRay, 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


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


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


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


(AIR 1956 SC 44) it was held:-

“The offence alleged to have been committed (by theaccused) must have something to do, or must be related insome manner with the discharge of official duty...... theremust be a reasonable connection between the act and thedischarge of official duty; the act must bear, such relation tothe duty that the accused could lay a reasonable (claim) butnot a pretended or fanciful claim, that he did it in the courseof 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 committedby him while acting or purporting to act in the discharge of hisofficial duty” employed in Section 197(1) of the Code, arecapable of a narrow as well as a wide interpretation. If thesewords are construed too narrowly, the section will berendered altogether sterile, for, “it is no part of an official dutyto commit an offence, and never can be”. In the wider sense,these words will take under their umbrella every actconstituting an offence, committed in the course of the sametransaction in which the official duty is performed or purportsto be performed. The right approach to the import of thesewords lies between these two extremes. While on the onehand, it is not every offence committed by a public servantwhile engaged in the performance of his official duty, which isentitled to the protection of Section 197(1), an act constitutingan offence, directly and reasonably connected with his officialduty will require sanction for prosecution under the saidprovision. 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 CriminalProcedure 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:-


“The protection is limited only when the act done by publicservant is reasonably connected with the discharge of hisofficial duty and is not merely a cloak for doing anobjectionable 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 punishableunder Section 120B read with Section 409 of Indian PenalCode is concerned and also Section 5(2) of the Preventionof Corruption Act are concerned they cannot be said to be ofthe nature mentioned in Section 197 of the Code ofCriminal Procedure. To put it shortly, it is no part of the dutyof a public servant, while discharging his official duties, toenter into a criminal conspiracy or to indulge in criminalmisconduct. Want of sanction under Section 197 of the Codeof 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 allegedagainst the public servant is committed by him “while acting orpurporting to act in the discharge of his official duties”. In order tofind out as to whether the alleged offence is committed while actingor purporting to act in the discharge of his official duty, the following


yardstick is provided by this Court in Budhikota Subbarao [State ofMaharashtra v. Budhikota Subbarao, (1993) 3 SCC 339 : 1993SCC (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 theact or omission for which the accused was charged hadreasonable connection with discharge of his duty then itmust be held to be official to which applicability of Section197 of the Code cannot be disputed.”

16. This principle was explained in some more detail in RaghunathAnant 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: (SCCpp. 298-99, para 11)

“11. ‘7. … “66. … On the question of the applicability ofSection 197 of the Code of Criminal Procedure, theprinciple laid down in two cases, namely, ShreekantiahRamayya Munipalli v. State of Bombay [AIR 1955 SC 287 :1955 Cri LJ 857] and Amrik Singh v. State of Pepsu [AIR1955 SC 309 : 1955 Cri LJ 865] was as follows: (AmrikSingh case [AIR 1955 SC 309 : 1955 Cri LJ 865] , AIR p.312, para 8)

‘8. … It is not every offence committed by a publicservant that requires sanction for prosecution underSection 197(1) of the Criminal Procedure Code; noreven every act done by him while he is actuallyengaged in the performance of his official duties; butif the act complained of is directly concerned withhis official duties so that, if questioned, it could beclaimed to have been done by virtue of the office,then sanction would be necessary….’

The real question therefore, is whether the actscomplained of in the present case were directlyconcerned with the official duties of the three publicservants. As far as the offence of criminal conspiracypunishable under Section 120-B read with Section 409 ofthe Penal Code is concerned and also Section 5(2) of thePrevention of Corruption Act, are concerned they cannotbe said to be of the nature mentioned in Section 197 ofthe Code of Criminal Procedure. To put it shortly, it is nopart of the duty of a public servant, while discharging hisofficial duties, to enter into a criminal conspiracy or toindulge in criminal misconduct. Want of sanction underSection 197 of the Code of Criminal Procedure is,


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) 5SCC 326 : 1997 SCC (Cri) 676 : AIR 1997 SC 2102] , the Courtdealt with the subject in the following manner: (SCC p. 328, para 5)“5. The question is when the public servant is alleged to havecommitted the offence of fabrication of record or misappropriationof public fund, etc. can he be said to have acted in discharge of hisofficial duties? It is not the official duty of the public servant tofabricate the false record and misappropriate the public funds, etc.in furtherance of or in the discharge of his official duties. The officialcapacity only enables him to fabricate the record or misappropriatethe public fund, etc. It does not mean that it is integrally connectedor inseparably interlinked with the crime committed in the course ofsame transaction, as was believed by the learned Judge. Underthese circumstances, we are of the opinion that the view expressedby the High Court as well as by the trial court on the question ofsanction is clearly illegal and cannot be sustained.”

18. The ratio of the aforesaid cases, which is clearly discernible, isthat even while discharging his official duties, if a public servantenters into a criminal conspiracy or indulges in criminal misconduct,such misdemeanour on his part is not to be treated as an act indischarge of his official duties and, therefore, provisions of Section197 of the Code will not be attracted. In fact, the High Court hasdismissed the petitions filed by the appellant precisely with theseobservations, namely, the allegations pertain to fabricating the falserecords which cannot be treated as part of the appellants' normalofficial duties. The High Court has, thus, correctly spelt out theproposition of law. The only question is as to whether on the factsof 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 Centrefor Public Interest Litigation (supra), is to find if the omissionor neglect to commit the act complained of would have madethe public servant answerable for charge of dereliction of his


official duty. He may have acted “in excess of his duty”, butif there is a “reasonable connection” between the impugnedact and the performance of the official duty, the protectiveumbrella of Section 197 CrPC cannot be denied, so long asthe discharge of official duty is not used as a clock for illicitacts.”

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 protectionunder Section 197 of the Code is available to the public servantswhen an offence is said to have been committed “while acting orpurporting to act in discharge of their official duty”, but where theacts are performed using the office as a mere cloak for unlawfulgains, such acts are not protected. The statements of law insome of the earlier decisions were culled out by this Court inInspector of Police v. Battenapatla Venkata Ratnam [Inspector ofPolice 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 allegedcriminal conduct, they had been working as public servants.The question is not whether they were in service or on dutyor not but whether the alleged offences have beencommitted by them ‘while acting or purporting to act indischarge of their official duty’. That question is no more resintegra. 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 allegedto have committed the offence of fabrication of recordor misappropriation of public fund, etc. can he be saidto have acted in discharge of his official duties. It isnot the official duty of the public servant to fabricatethe false records and misappropriate the public funds,etc. in furtherance of or in the discharge of his officialduties. The official capacity only enables him tofabricate the record or misappropriate the public fund,etc. It does not mean that it is integrally connected orinseparably interlinked with the crime committed in the


course of the same transaction, as was believed bythe learned Judge. Under these circumstances, weare of the opinion that the view expressed by the HighCourt [Shambhoo Nath Mishra v. State of U.P., 1995SCC OnLine All 492 : (1995) 32 ACC 775] as well asby the trial court on the question of sanction is clearlyillegal and cannot be sustained.’

8. In Parkash Singh Badal v. State of Punjab [ParkashSingh Badal v. State of Punjab, (2007) 1 SCC 1 : (2007) 1SCC (Cri) 193] , at para 20 this Court held that: (SCC pp.22-23)

‘20. The principle of immunity protects all acts whichthe public servant has to perform in the exercise ofthe functions of the Government. The purpose forwhich they are performed protects these acts fromcriminal prosecution. However, there is an exception.Where a criminal act is performed under the colour ofauthority but which in reality is for the public servant'sown pleasure or benefit then such acts shall not beprotected 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.


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


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


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


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 tobe prospective in operation, unless made retrospective,either expressly or by necessary intendment, whereas aStatute which merely affects procedure, unless such aconstruction is texturally impossible, is presumed to beretrospective in its application, should not be given an

33 AIR 1994 SC 2623


extended meaning, and should be strictly confined to itsclearly defined limits. (ii) Law relating to forum and limitation is procedural innature, whereas law relating to right of action and right ofappeal, even though remedial, is substantive in nature. (iii) Every litigant has a vested right in substantive law, but nosuch right exists in procedural law.(iv) A procedural Statute should not generally speaking beapplied retrospectively, where the result would be to createnew disabilities or obligations, or to impose new duties inrespect of transactions already accomplished.(v) A Statute which not only changes the procedure but alsocreates a new rights and liabilities, shall be construed to beprospective in operation, unless otherwise provided, eitherexpressly 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 petitionerclaiming immunity from the prosecution on the ground offailure to obtain sanction for prosecuting him takingadvantage of explanation by Act 16 of 2018, which came intoforce with effect from 26.07.2018, but such amendmentcreated/imposed new obligation or duty on the prosecution toobtain sanction to prosecute even retired governmentservant. Earlier sanction is required only to prosecute thepublic servant, and when a person retired from service, nosanction is required. On account of change of law due toaddition of explanation to Section 19 (1) of the P.C.Act, nowsanction is required even to prosecute retired governmentservant. If this provision is given retrospective effect, allretired government servants, against whom prosecutions are


pending will sneak out from the prosecutions, it is nothing butaccommodating retired Government Servant to escape frompending prosecution under the P.C.Act irrespective ofseriousness of offence. The intention of the legislature is toprevent bribery among the public servants, which is a seriousthreat to the society now and increasing day by day.Therefore, amendment to Section 19 (1) of the P.C. Actthough deals with procedure, which cannot be givenretrospective effect as it created or imposed new obligationor duty on the prosecution to obtain sanction after more than7 years from the date of filing charge sheet and takingcognizance against the petitioner. Therefore, I find that suchinterpretation as sought for by the learned counsel for thepetitioner 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 forprosecuting a public servant. When such amendmentimposes new obligation or creating disability, in the absenceof any provision giving retrospective effect, the same cannotbe given retrospective effect to defeat all pendingprosecutions against the retired Government Servants. Ifsuch interpretation is given to explanation to Section 19 (1)of P.C. Act by Act 16 of 2018, it will have devastating effecton the pending prosecutions and it amounts to paving path tothe accused persons, who are retired public servants tosneak away from prosecutions though they committedserious offences, and such interpretation is against theintendment of the Act itself as observed in “M.NarayananNambiar v. State of Kerala” (referred supra). Therefore, it isdifficult to accept the contention of the learned counsel forpetitioner to give retrospective effect to the amendedprovision i.e. Section 19 (1) of the P.C.Act, which permits thepetitioner 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 madeout for quashing of the proceedings for the reason that theinvestigating agency intentionally waited till the retirement of


the Accused Officer. The question as to whether a sanctionis necessary to prosecute the Accused Officer, a retiredpublic servant, is a question which can be examined duringthe 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), thisCourt has held that if an investigation was not conducted bya police officer of the requisite rank and status requiredunder Section 17 of the Act, such lapse would be anirregularity, however unless such irregularity results incausing prejudice, conviction will not be vitiated or be bad inlaw. Therefore, the lack of sanction was rightly found not tobe a ground for quashing of the proceedings. 37. Mr. Guru Krishna Kumar further refers to a Single Benchjudgment of the Madras High Court in M. Soundararajan v.State through the Deputy Superintendant of Police, Vigilanceand Anti Corruption, Ramanathapuram to contend thatamended provisions of the Act as amended by Act XVI of2018 would be applicable as the Amending Act came intoforce before filing of the charge sheet. We do not find anymerit in the said argument. In the aforesaid case, thelearned trial court applied amended provisions in the Actwhich came into force on 26 th July, 2018 and acquitted boththe accused from charge under Section 13(1)(d)read with13(2) of the Act. The High Court found that the order of thetrial court to apply the amended provisions of the Act wasnot justified and remanded the matter back observing thatthe offences were committed prior to the amendments beingcarried out. In the present case, the FIR was registered on9th November, 2011 much before the Act was amended inthe year 2018. Whether any offence has been committed ornot has to be examined in the light of the provisions of thestatute as it existed prior to the amendment carried out on26 th July, 2018.38. In view thereof, we do not find any merit in thereasonings recorded by the High Court in respect ofcontentions raised by the Accused Officer. The argumentsraised by the Accused Officer can not be accepted inquashing the proceedings under the Act. Accordingly,Criminal Appeal No. 1663 of 2019 filed by the AccusedOfficer is dismissed whereas Criminal Appeal No. 1662 of2019 filed by the State is allowed.”


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.


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:

S.No

Name ofaccused

CHARGES FRAMED

FINAL DECISION (I)

Charges Commonto all

(II)Charges

separatelyframed

1 A-1 M/s Castron Technologies Ltd. (M/s CTL)

(i) 120-B IPC

(ii) u/s 120-B/ 409/ 420 IPC and Section13 (1) (c) and 13 (1) (d) P.C. Act, 1988

420 IPC; 379/34IPC

Convicted for the offenceu/s 120-B IPC; 420 IPC;379/34 IPC; 120-B IPC r/wS. 409/420 IPC andSection 13 (1) (c)/13(1)(d) P.C. Act, 1988.

2 A-2 MahendraKumar Agarwalla

(i) 120-B IPC

(ii) u/s 120-B/409/ 420 IPC and Section13 (1) (c) and 13 (1) (d) P.C. Act, 1988

420 IPC; 379/34IPC

Convicted for the offenceu/s 120-B IPC; 420 IPC;379/34 IPC; 120-B r/w S.409/420 IPC and Section13 (1) (c)/13(1)(d) P.C. Act,1988

3 A-3 M/s Castron Mining Ltd. (M/s CML)

_________

379/34 IPC Convicted for the offenceu/s 379/34 IPC

4 A-4 Dilip Ray (i) 120-B IPC


(i) Sec. 409 IPC

(ii) 13 (1) (c) / 13 (1) (d) P.C. Act, 1988

Convicted for the offenceu/s 120-B IPC; 409 IPC;Section 13 (1) (c) andSection 13 (1) (d) P.C.Act,1988 and Section 120-B r/w 409/420 IPC; Section13 (1) (c) and Section 13(1) (d) P.C. Act, 1988.

5 A-5 Pradip Kumar Banerjee

(i) 120-B IPC


13 (1) (d) P.C. Act, 1988

Convicted for the offenceu/s 120-B IPC; Section 13(1) (d) P.C. Act, 1988 andSection 120-B r/w 409/420IPC and Section 13(1)(c)/13(1)(d) P.C. Act, 1988.


6 A-6 Nitya Nand Gautam

(i) 120-B IPC


13 (1) (d) P.C. Act, 1988

Convicted for the offenceu/s 120-B IPC; Section 13(1) (d) P.C. Act, 1988 andSection 120-B r/w 409/420IPC and Section 13(1)(c)/13(1)(d) P.C. Act, 1988.

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