Delhi Court Acquits Former Coal Secretary, 4 Others In 2012 Coal Block Allocation Corruption Case

The Court also acquitted the Managing Director of  M/s Navabharat Power Pvt. Ltd (NPPL) Y. Harish Chandra Prasad and its Chairman P. Trivikrama Prasad. Kropha was the then Joint Secretary (Coal) and Member Secretary, Screening Committee and Samria was the then Director, CA-I, Ministry of Coal (MoC).

Special Judge (PC Act) Sanjay Bansal of Rouse Avenue District Court found that the prosecution failed to prove criminal misconduct by the MoC officials and further cheating and criminal conspiracy among the accused. With respect to the offences alleged against the public servants the court said:

"The various acts of omission and commission as were allegedly committed by the accused public servants cannot be stated to have been committed by them while acting or purporting to act in the discharge of their official duties. Assuming that those acts were committed in discharge of their duties, then it was their position as such public servants which provided them the opportunity to commit such acts of omission and commission while choosing to enter into a criminal conspiracy with the private parties involved and it cannot be stated that they so acted either in the discharge of their official duties or in the purported discharge of their official duties". 

The case against the accused was registered in September 2012 on the basis of a reference made by the Central Vigilance Commission (CVC). The CVC had recommended investigation against the MoC officials for alleged corruption in allocation of coal blocks to private companies during the period 2006 to 2009.

The prosecution's case was that for obtaining the coal block, the NPPL made fraudulent misrepresentations through its MD Y. Harish Chandra and Chairman P. Trivikrama Prasad regarding its networth and land.

It was alleged that despite these false claims/fraudulent misrepresentations, the MoC allocated the coal blocks to NPPL.

It was alleged that the officials of MoC in pursuance of the criminal conspiracy did not scrutinize the false claims and facilitated the company in getting undue advantage in allocation of the coal blocks.

A FIR was registered under Section 13 (criminal misconduct by a public servant) of the Prevention of Corruption Act along with Section 120-B (cheating) and 420 (criminal conspiracy) IPC.

The Court noted that the NPPL had received various permissions from different authorities and had made substantial progress for development of the coal block as well as completion of its power project. It stated that these factors showed that NPPL was a competent company and allocation of coal block to it was not a wrong decision.

It observed that as NPPL was found to be an eligible applicant and it was recommended by the Ministry of Power and Orissa State government, the public servants cannot be held accountable for any offence.

“When the application has been found to be complete and the applicant has been found to be an eligible applicant, and allocation was recommended to a company which had recommendation from MoP and state government of Orissa, the accused public servants cannot be held accountable for any offence. For any lapse on their part, the accused public servants may be administratively liable but are certainly not criminally liable, in the facts and circumstances of the present case,” it said.

On the offence of cheating, the prosecution alleged that after obtaining allocation of the coal block, HC Prasad and Trivikrama Prasad sold off their shares in NPPL and earned huge profits. It was alleged that they sold their shares for combined value of Rs. 231 crores to M/s Essar Power Ltd. (EPL).

Looking into the evidence, the Court however said that the high value of the shares of NPPL was not because of the coal block but it is traceable to various other factors.

Referring to the statement of a prosecution witness, it said “When the witness belonging to EPL himself is giving details of the factors contributing to high value of the shares, and which factors include coal block allocation as one of the factors only and that too as a minor factor, nothing survives in this charge u/s 406 IPC. The prosecution did not counter this witness on this aspect at all and seems to have accepted his version. The witness has clearly stated that the purchaser company i.e. EPL saved at least two years of time as NPPL had already obtained various permissions. This saving on time contributed to high value for the most part. The valuation done by EPL was of the project and not of coal block alone.”

It also said that there was no legal bar for the sale of shares of a company after the allocation of coal block.

It thus held that the offence of cheating was not made out as there was no entrustment of any property.

The Court thus acquitted the 5 accused of all the charges.

Case title: CBI vs. Y. Harish Chandra Prasad & ors.