Photo: Ramesh Pathania/Mint
Photo: Ramesh Pathania/Mint

Coal scam: CBI court convicts Jharkhand Ispat, two directors

The CBI court found Jharkhand Ispat and its two directors guilty of criminal conspiracy and cheating

New Delhi:Jharkhand Ispat Pvt. Ltd. (JIPL) and two of its directors became the first convicts in the coal blocks allocation case on Monday when a special court found them guilty of criminal conspiracy and cheating.

Special Central Bureau of Investigation (CBI) judge Bharat Parashar ordered that the directors, R.S Rungta and R.C Rungta, be immediately taken into custody. He will pronounce the sentence on 31 March.

They were convicted in a case related to the North Dhadu coal block in the eastern state of Jharkhand.

The verdict is the first on numerous cases involving suspected irregularities in the allocation of coal blocks that rocked the previous Congress-led United Progressive Alliance (UPA) government. The Comptroller and Auditor General of India (CAG) said in a 2012 report that the allocation of coal blocks had led to a notional loss of 1.86 trillion for the exchequer.

Scandals surrounding the coal block allotments and the 2008 allocation of telecom spectrum and licences damaged the image of the UPA government and contributed to its defeat in the 2014 general election.

In 2014, the Supreme Court cancelled the allocation of more than 200 coal blocks, finding the process arbitrary and illegal.

Monday’s special court may pave the way for faster disposal of other coal allocation cases.

“In the coming months, all cases pertaining to the coal scam will reach a logical conclusion," said G.V.L. Narasimha Rao, national spokesperson for the ruling Bharatiya Janata Party (BJP).

“Such convictions will affect Congress both in the long run and short term. The question is law has taken its own course," said A.K. Verma, Kanpur-based political analyst and political science professor at Christ Church College.

During the course of investigations, JIPL was found to have “grossly misrepresented" to the ministry of steel and ministry of coal a number of aspects to inflate its claim to the North Dhadu coal block, the prosecution said.

Lawyers for JIPL and the Rungtas argued that the prosecution’s case of criminal conspiracy and cheating was not sustainable, given that the coal ministry hadn’t allocated the block to the company.

In a 132-paged verdict, however, the court observed that the accused had made “false claims" “fraudulently" with the intention of deceiving the government of India.

It was clear that the activities of the two directors at various points in time were directed towards the “common objective of securing allotment" of the coal block in favour of JIPL, the verdict said.

The court, however, set aside charges of forgery against the accused.

In its verdict, the court observed that it was crystal clear that the actions of the “accused in making all such false claims knowing them to be false were actuated with an intention to deceive MOC (ministry of coal) and thereby Government of India".

Many corporate houses and political luminaries are accused in the multiple cases related to alleged wrongdoing in coal block allocations. Most cases are at the pre-trial stage and on some, trial proceedings have begun.

Nineteen other cases investigated by CBI are pending before the court, which was set up to deal exclusively with coal block allocation matters. Two other cases probed by Enforcement Directorate are also pending before the court.

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