Economy

Coal case convictions vindicate CAG, again

| Updated on: Mar 28, 2016
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Auditor’s report had pegged govt’s losses at ₹1.86 lakh crore

The first convictions in the coal block allocation cases, pronounced on Monday, have further justified the findings of the Comptroller & Auditor General (CAG) in its 2012 audit report.

The CAG report found possible monetary losses of about ₹1.86 lakh crore to the exchequer due to the allocation process followed by screening committees.

While this had already been justified after the coal auctions held in 2015, Monday’s judgement proves the auditor was right about the need for transparency in award of such an important natural resource.

The Coal Mines (Special Provisions) Act brought in by the Modi-led government sought to address such issues by mandating that award of coal blocks will only be on the basis of competitive auctions.

Apart from transparency, auctions also eliminate fly-by night operators as the participants’ production capacities are assessed in the first stage of bidding or the technical bid stage.

Cloud over ministry

While, the convictions by Justice Bharat Parashar were in a case where no former government official was prosecuted, the role of the Ministry of Coal at the time of granting the allocations has come into question.

Jharkhand Ispat Private Ltd’s (JIPL) directors RC Rungta and RS Rungta were convicted for cheating and criminal conspiracy, on Monday.

The Rungtas were found guilty of misrepresenting facts in order to secure allocation of a coal block.

This was in a case pertaining to irregularities in allocation of the North Dhadu coal block by the 27th and 30th screening committees jointly to JIPL, Electro Steel Casting Ltd, Adhunik Alloys and Power Ltd and Pawanjay Steel and Power Ltd.

The Rungtas’ counsel argued that Coal Ministry officials who were part of the Screening Committees should have been made accused in the case.

Justice Parashar, in his 132-page judgement, said that the non-prosecution of Ministry officials “does not lessen the criminality” of the Rungtas.

However, the defence counsels’ arguments were not dismissed completely. “In this regard, it will be worthwhile to state that undoubtedly the arguments of counsel for the accused persons does not appear to be completely without force in as much as MoC (Ministry of Coal) officers ought to have taken all necessary precautions as could have been taken by them so that important nationalised natural resources of the country, i.e. coal, are not usurped by any unscrupulous person.”

More cases

There are several other cases pending in the special court. Former Coal Secretary HC Gupta is one of the accused in a separate case being heard by the court.

While the CBI has chargesheeted several big names including former Jharkhand Chief Minister Madhu Koda, ex-Minister of State for Coal Dasari Narayana Rao, industrialist Naveen Jindal and others, the court is yet to pass an order on framing charges.

Published on January 20, 2018

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