Delhi District Court
Cbi vs . M/S Pawanjay Steel And Power Limited & ... on 13 November, 2019
IN THE COURT OF SH. BHARAT PARASHAR
SPECIAL JUDGE (PC ACT) (CBI),
ROUSE AVENUE DISTRICT COURT, NEW DELHI
CNR No. DLCT11-000468-2019
CC No. 107/2019 (Old CC No. 72/16)
RC No. 219 2015 (E) 0007
Branch: CBI/EO-I/New Delhi
CBI Vs. M/s Pawanjay Steel and Power Limited & Ors.
U/s. 120-B IPC, 120-B r/w Section 420 IPC & Section 420 IPC
Date of order on cognizance : 28.09.2016
Date of framing of charge : 31.07.2017
Date on which judgment was reserved : 25.09.2019
Date of judgment : 13.11.2019
In re:
Central Bureau of Investigation (CBI)
Vs.
(1) M/s Pawanjay Steel and Power Ltd. (M/s PSPL)
Lohardaga, Jharkhand (Convicted)
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 1 of 144
(2) Gyanchand Prasad Agarwal
S/o Late Sh. Lakhan Lal Agarwal
R/o East Gola Road, Upper Bazar,
Lohardagar, Jharkhand (Convicted)
(3) Umesh Chand Agarwal
S/o Sh. Gyanchand Agarwal
R/o Y-20, Civil Township,
Rourkela, Odisha (Convicted)
(4) S.K. Kanungo
S/o Late Sh. K.C. Mohanty
R/o E/3, Kalvik Sipra Imperial,
Patia, Bhubaneswar, Orissa (Convicted)
APPEARANCES
Present : Ld. Senior Advocate, Sh. R.S. Cheema, Special P.P.,
alongwith Ld. Senior P.P. Sh. A.P. Singh, Ld. Senior
P.P. Sh. Sanjay Kumar, Ld. DLA, Sh. V. K. Sharma,
and Advocate Ms. Tarannum Cheema for CBI.
Ld. Counsel Sh. P.K. Dubey and Sh. Anurag Andley for
A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal and
A-3 Umesh Chand Agarwal and Ld. Counsel
Sh. K.K. Patra for A-4 S.K. Kanungo.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 2 of 144
JUDGEMENT
1. The present case pertains to allocation of "North Dhadhu coal block" situated in the state of Jharkhand in favour of M/s Pawanjay Steel & Power Ltd (hereinafter referred to as M/s PSPL) by 27th Screening Committee, Ministry of Coal, Government of India.
(A) FACTS
2. Briefly stated the necessary facts of the prosecution case as stands disclosed from the report u/s 173 Cr.PC are as under:
3. Company M/s PSPL submitted an application to the Chairman, Standing Screening Committee/Linkage Committee, Ministry of Coal (MOC) on 27.04.2004 for allotment of a captive coal block for their proposed Sponge Iron plant and captive power plant at Distt. Lohardaga, Jharkhand. Alongwith the application the company submitted its Article and Memorandum of Association, certificate of incorporation and a project report of the proposed end use project. A CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 3 of 144 copy of the said application was also sent by the company to Director of Mines, Government of Jharkhand. Subsequently the company M/s PSPL submitted yet another application dated 05.06.2004 to Chairman, Standing Screening Committee, MOC, Secretary MOC, Secretary Ministry of Power, Secretary, Ministry of Steel and also to Director of Mines & Geology, Government of Jharkhand. Alongwith the said application also all the documents as were enclosed with the earlier application were also again submitted. The company M/s PSPL however submitted yet another application dated 23.07.2004 to all the aforesaid authorities requesting for allotment of either "North Dhadhu"
or "Seregarha" or "Chatti Bariatu" coal blocks for its proposed end use project.
4. However Ministry of Steel in response to letter dated 05.06.2004 of the company sent a letter dated 29.07.2004 to the company for providing the following information in connection with their request for allocation of a captive coal block. The said letter dated 29.07.2004 read as under:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 4 of 144 By Reg. Post No. 21(14)/2004-IDW GOVERNMENT OF INDIA MINISTRY OF STEEL ***** Udyog Bhawan, New Delhi Dated 29 July, 2004.
To, M/s Pawanjay Steel & Power Ltd., East Gola Road, Upper Bazar, Lohardaga-835302 Jharkhand.
Subject: Request for allocation of captive coal block for the proposed sponge iron project.
Sir, I am directed to refer to your letter No. Nil dated 5.6.2004 on the above mentioned subject and to request you to furnish the following information:-
i. Group turnover.
ii. Annual reports for the last three years. iii. Financial tie-up, if any with Commercial Bank/Financial Institutions. iv. Phased requirement of non-coking coal. v. Details of the proposed coal block like geological reserve, mineable reserves, grades of coal etc. with documentary evidences.
vi. Suitability of proposed block / scope for further sub-blocking viz-a-viz your coal requirement duly certified by a Mining Consultant / Geologist. vii. Proper detailed Techno Economic Feasibility Report covering the proposed ultimate sponge iron capacity coal mining and washery activities alongwith financial parameters like BEP, IRR, ROR, DSCR etc including bar charts(s) of the implementation schedule for the proposed project. viii. Documentary evidences regarding details of effective steps like procurement of land, placement of order for major plant & machinery with specifications including rotary kiln(s) & coolers(s) and confirmation of the same from the suppliers, power sanction, pollution clearance etc. taken for the whole project.
2. Further action will be taken after the receipt of your reply.
Yours faithfully, Sd/-
(D. Kashiva) Joint Industrial Adviser (Emphasis Supplied) CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 5 of 144
5. The company M/s PSPL in response thereto submitted a letter to Ministry of Steel on 31.08.2004 under the signatures of its Managing Director Umesh Chand Agarwal furnishing the necessary information as was asked for by Ministry of Steel. Some documents were also annexed with the said communication.
For a ready reference the said letter of Umesh Chand Agarwal read as under:
PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584 To, Mr. D. Kashiva, Joint Industrial Adviser, Ministry of Steel, Govt. of India, Udyog Bhawan, New Delhi.
Sub: Allocation of Captive Block for the proposed Iron Project.
Sir, With reference to your letter no. 21(14)/2004-IDW dated 29th July, 2004, we are furnishing below the information as required:-
1. Group turnover for the years 2001 - 02, 2002 - 03, 2003 - 04 is attached as Annexure - I.
2. Annual Reports for the last three years attached as Annexure - II.
3. Documents related to financial tie up with commercial Banks/Financial Institution is enclosed as Annexure - III.
4. Phased requirement of Coal.
Requirement of coal - 3 lac Ton DRI x 1.2 = 3,60,000 TPA (Considering 1.2 T of Coal is required for producing IT of DRI) R.O.M Coal assuming 35% Washary yield considering 5% shale in the R.O.M. Coal = 10,28,571 TPA CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 6 of 144 Total R.O.M. Coal - 10,28,706 TPA Say - 1.80 Million TPA REQUIREMENT OF COAL FOR 30 YEARS - 1.08X30 = 32.4 Million TPA Reserves required are - 32.4/0.7 - 46.28 Million tons The usable ROM Coal will be 1028571 T containing
a) Clean Coal - 3,60,000 T with 25% ash (For DR Plant)
b) Middlings - 668571 T with 56% ash (for power plant) Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected] PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584
5. Out of 5 Coal blocks we are interested in Coal Block Chatti Bariatu details as per availability of data
- the reserve is as under -
Coal field - North Karanpura Block - Chatti Bariatu Area - 5.4 Square Km Total Coal Thickness - 25 - 35 m Likely Grade - D-G Reserve in (Mt) - 243
5. Coal Block is suitable for our plant after washing. Non washed Coal will be used in our Captive power plant.
6. The required details are given in our project report.
7. Documentary evidence for land acquisition etc is enclosed herewith as well as a copy of MOU is enclosed for your ready reference.
We hope the details as mentioned above will fulfill your requirement for allocation Coal Block for our project. Thanking you, For Pawanjay Steel & Power Limited Sd/-
(Umesh Prasad Agarawal) Managing Director Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected] (Emphasis Supplied) CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 7 of 144
6. However, Ministry of Steel finding the information so furnished by Umesh Chand Agarwal to be incomplete sent another letter dated 04.10.2004 to company M/s PSPL calling upon it to furnish further information. The said letter read as under:
No. 21 (14)/2004-IDW GOVERNMENT OF INDIA MINISTRY OF STEEL ***** Udyog Bhawan, New Delhi Dated October 4, 2004 To, M/s. Pawanjay Steel & Power Limited, East Gola Road, Upper Bazar, Lohardaga-835302 Jharkhand (Fax No.0661-24001413) Subject: Request for allocation of captive coal block for the proposed sponge iron plant.
Sir, I am directed to refer to your letter No. Nil dated on the above mentioned. From your request, it has been noted that you have not furnished the following information: -
i. Group activities ii. Details of the proposed coal block like geological reserve, mineable reserves,
grades of coal etc. with documentary evidences. iii. Suitability of proposed block / scope for further sub-blocking viz-a-viz your coal requirement duly certified by a Mining Consultant / Geologist. iv. Proper detailed Techno Economic Feasibility Report covering ultimate sponge iron capacity, coal mining and washery activities alongwith financial parameters like BEP, IRR, ROR, DSCR etc. alongwith implementation schedule in bar chart(s). v. Documentary evidences regarding details of effective steps like procurement of land, placement of order for major plant & machinery and acceptance of the same by suppliers, pollution clearance, power sanction etc. CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 8 of 144
2. You are once again requested to furnish the same.
3. Further action will be taken after the receipt of your reply.
Yours faithfully, Sd/-
(D.S. Yadav) Section Officer
7. The application of M/s PSPL in the meantime came up for consideration before 24th Screening Committee MOC in its meeting held on 09.12.2004. However, no decision could be taken in the said meeting on the application of M/s PSPL as representative of Ministry of Steel stated that they had asked for details of the proposed project from the company but the company has failed to provide satisfactory details so far. The applicant company was accordingly given 15 days time to provide all details to Ministry of Steel and who in turn were requested to form their views and inform MOC/Screening Committee.
The relevant portion of the minutes of 24 th Screening Committee read as under:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 9 of 144 Minutes of the 24th meeting of the Screening Committee held on 9.12.2004 in the Council Room, 3rd Floor, Federation House, FICCI, Tansen Marg, New Delhi List of participants is placed at Annexure I.
2. . . . . . . . .
. . . . . . . .
. . . . . . . .
. . . . . . . .
Name of applicant company: M/s Pawanjay Steel & Power Ltd.
Name of Block: Dumri, Brinda "Representative of the applicant stated that they have 60,000 tonnes per annum sponge iron plant in Orissa, for which they have also a long-term linkage. They are seeking coal blocks for sponge iron projects to be set up in Lohardaga district of Jharkhand State at an investment of Rs.200 crores. They stated that they are also in the business of mining of bauxite and dolomite; that they would begin mining operations without any delay if coal blocks are allocated to them. Representative from Ministry of Steel stated that they have very little idea about the applicant's project. The applicant was asked to provide details for their assessment, but have failed to provide satisfactory details so far and, therefore, they are not in a position to recommend the case. The applicant company sought one month for providing the necessary details to Ministry of Steel. The Chairman, after deliberations in the Screening Committee, CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 10 of 144 agreed to give them 15 days' time and requested Ministry of Steel to form their views and inform Ministry of Coal/Screening Committee."
8. Thereafter, Gyanchand Prasad Agarwal vide two separate letters dated 17.12.2004 addressed to Ministry of Steel provided further information/ documents under his own signatures. Initially the said information was furnished by way of an unsigned letter dated 17.12.2004 by Gyanchand Prasad Agarwal. However subsequently he submitted another copy of the same, duly signed by him. However Gyanchand Prasad Agarwal also signed, the said letter as Managing Director of company M/s PSPL. In the letter dated 17.12.2004 request was also made for consideration of the application of company M/s PSPL for allocation of one of the four coal blocks i.e. North Dhadu, Chatti Bariatu, Seregara and Dumri.
9. Alongwith the said letter dated 17.12.2004 submitted by Gyanchand Prasad Agarwal to Ministry of Steel various documents in support of effective steps taken like procurement of land, placement of order for major plant and machinery and acceptance of the same by suppliers were enclosed. A purchase order dated 08.09.2004 typed on the letter head of "Pawanjay Steel & Power Ltd." though issued CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 11 of 144 under the signatures of one H.P. Pai, Director, Pawanjay Sponge Iron Ltd was submitted wherein it was stated that a purchase order for manufacture and supply of kilns and cooler arrangement and its accessories for 4 X 100 TPD sponge iron plant has been placed on M/s Hari Machines Ltd. A confirmation letter dated 10.12.2004 allegedly issued by M/s Hari Machines Ltd. towards having received the said purchase order along with an advance amount of Rs. 10 lacs was also submitted. The said confirmation letter was issued under the signatures of one Sh. S.K. Kanungo on behalf of M/s Hari Machines Ltd.
10. Yet one more letter dated 05.01.2005 was also submitted to Ministry of Steel by Gyanchand Prasad Agarwal under his own signatures. The said letter was in fact a reproduction of earlier letter dated 17.12.2004 but on this occasion it was signed by Gyanchand Prasad Agarwal as Director of M/s Pawanjay Steel and Power Ltd. However yet one more letter dated 05.01.2005 was also submitted by Gyanchand Prasad Agarwal to Ministry of Steel submitting alongwith it a revised Techno Economic Feasibility Report in place of Techno Economic Feasibility Report (TEFR) already submitted alongwith letter dated 17.12.2004.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 12 of 144
11. Subsequently, vide letter dated 07.02.2005 Sh. S.K.Kakkar, Under Secretary, Ministry of Coal called upon various applicant companies including company M/s PSPL to submit latest information in an agenda form which was uploaded on the website of Ministry of Coal for facilitating quick, objective and transparent decision making by the Screening Committee based on the said latest information. Accordingly, company M/s PSPL vide their letter dated 10.02.2005 submitted the filled up agenda form to Ministry of Coal under the signatures of Gyanchand Prasad Agarwal.
12. The applications of various applicant companies including that of M/s PSPL thereafter came to be considered by 27th Screening Committee in its meeting held on 01.03.2005. During the course of said Screening Committee Meeting the applicant companies were called upon to make presentation regarding their claim. Accordingly on behalf of company M/s PSPL, Gyanchand Prasad Agarwal and one B.D. Rudra appeared before the Screening Committee to make presentation. Thereafter, the Screening Committee relying upon the information furnished by the applicant company and the fact that both Ministry of Steel and Govt. of Jharkhand supported allocation of a coal block to M/s PSPL, accordingly chose to recommend the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 13 of 144 company M/s PSPL for joint allocation of North Dhadhu Coal Block alongwith M/s Tata Power Ltd, M/s Adhunik Alloys & Power Ltd and M/s Jharkhand Ispat Pvt. Ltd.
13. For a ready reference the relevant portion of the minutes of 27 th Screening Committee read as under:
Minutes of the 27th meeting of the Screening Committee held on 1.3.2005 in Bhaba Hall, Scope Building, New Delhi List of participants is placed at Annexure I.
2. . . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
13. M/s Pawanjay Steel and Power Ltd.
M/s Pawanjay Steel and Power Ltd. has requested for the North Dhadu and Dumuri coal blocks to meet coal requirement for their 0.4 mtpa ultimate sponge iron capacity to be located at Lohar Daga in Jharkhand. They have an existing sponge iron capacity of 0.036 mtpa for which they have been granted coal linkage of 0.043 mtpa F-grade coal from the Mahanadi Coalfield Ltd. The company has in its presentation stated its turn-over, profit and net-worth to be Rs. 14 crore. Rs. 4 crore and Rs. 7.5 crore respectively at the end of March 2004. The sponge iron project is proposed to be installed in three phases involving the time period of about 57 months from the date of allocation of block. They also propose to develop the captive mine in 36 months. As informed they had partly acquired land CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 14 of 144 and water is plentifully available for their project from the adjoining rivers. Also orders for kilns etc. have already been placed and funds have been negotiated with the Bank of India for the project. Ministry of Steel and Govt. of Jharkhand representatives supported the allocation to the applicant."
14. After the minutes of the 27th Screening Committee were subsequently finalized in Ministry of Coal a meeting of all the joint allocatees was called by Joint Secretary, MOC so as to discuss and workout the arrangements to be made for captive mining of coal and for sharing the produce between the joint-allocatees. A notice dated 01.06.2005 was accordingly sent to M/s PSPL in this regard. During the course of said discussion M/s Tata Power however expressed its inability to mine "North Dhadu coal block" and accordingly M/s Electro Steel Casting Limited subsequently came to be introduced as one of the joint allocatee company alongwith M/s Pawanjay Steel and Power Limited, M/s Adhunik Alloys and Power Limited and M/s JIPL qua "North Dhadu coal block". All the four companies also expressed their willingness to jointly mine the "North Dhadu coal block" and to share the produce. Thereafter, 30th meeting of the Screening Committee was accordingly convened on 18.10.2005 to consider the said subsequent developments. An agenda for the said meeting was prepared wherein details of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 15 of 144 aforesaid arrangement for "North Dhadu coal block" as jointly agreed to by the four companies was duly mentioned. After consideration the 30th Screening Committee meeting accordingly decided to recommend joint allocation of "North Dhadu coal block" in favour of M/s Electro Steel Casting Limited, M/s Adhunik Alloys and Power Limited, M/s Pawanjay Steel and Power Limited and M/s JIPL. After approval of the said recommendation of Screening Committee by the Competent Authority a letter of joint allocation dated 13.01.2006 of "North Dhadu coal block" was issued to all the four companies including M/s PSPL. All the four companies thereafter decided to form a joint venture company amongst themselves. A joint venture agreement dated 31.03.2008 followed by another agreement dated 06.05.2008 Ex. PW 7/M-3 (colly) (D-20) was entered into by all the four companies. On behalf of M/s PSPL the said agreement was signed by accused Gyanchand Prasad Agarwal.
15. Subsequently, when allegations of wrong doing and corruption came to be levelled against the public servants qua the allocation of coal blocks to private companies then all the cases were examined by Central Vigilance Commission (CVC). Upon finding sufficient material liable to be looked into further, the CVC chose to make a CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 16 of 144 reference to CBI. Accordingly CBI lodged a preliminary inquiry in the matter. However, when sufficient incriminating material qua allocation of coal block to M/s PSPL came on record during the course of preliminary inquiry warranting further investigation , the CBI chose to register a regular case against M/s PSPL its various directors/officers and other unknown persons for the offences U/S 120 B read with Section 420 IPC.
(i) Investigation by CBI
16. During the course of investigation it was found that the company M/s PSPL has grossly misrepresented about its status and stage of preparedness and also supported its claims with false documents. It was found that while the company M/s PSPL had claimed its existing capacity to be 0.036 MTPA at Lohardaga, Jharkhand in the agenda form dated 10.02.2005 but actually no such plant was yet established by the company. It was also found that the purchase order as was submitted to Ministry of Steel by Gyanchand Prasad Agarwal towards purchase of four kilns from M/s Hari Machines Ltd. or the confirmation letter issued on behalf of M/s Hari Machines Ltd. under the signatures of S.K. Kanungo were forged and fabricated by the accused persons in furtherance of a criminal CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 17 of 144 conspiracy hatched amongst themselves so as to deceive Ministry of Steel to believe that the company M/s PSPL has made substantial progress towards establishing its end use project and thereby inducing Ministry of Steel to make a recommendation in favour of M/s PSPL to MOC for allotment of a coal block.
17. The final report further states that during the course of investigation when enquiries were made from M/s Hari Machines Ltd. then it was found that no such order of purchase of any number of kilns much less four kilns was ever placed by M/s PSPL with M/s Hari Machines Ltd. and no payment much less an advance payment of Rs. 10 lacs was made by company M/s PSPL to M/s Hari Machines Ltd. During the course of investigation, Sh. Sabyasachi Mishra, Managing Director of M/s Hari Machines Ltd. stated that though their company had received a purchase order of some kilns from company M/s Pawanjay Sponge Iron Ltd. and the said amount of Rs. 10 lacs was also received by them as part payment towards a purchase order placed by company M/s Pawanjay Sponge Iron Ltd. for their plant at Rourkela, Orissa but no such order for purchase of kilns or any advance payment was ever received by them on behalf of company M/s PSPL. The final report filed u/s 173 Cr.PC also states that during CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 18 of 144 the course of investigation it was found that though M/s Pawanjay Sponge Iron Ltd. was a group concern of M/s Pawanjay Steel & Power Ltd., but it was wrongly represented on behalf of company M/s PSPL to Ministry of Steel and thereby to Ministry of Coal that purchase order of 4 kilns has been placed by applicant company M/s PSPL with M/s Hari Machines. It was also found that in order to lend credibility to the said purchase order a confirmation letter dated 10.12.2004 was also got prepared by company M/s PSPL and its directors in collusion with S.K. Kanungo, Chief Manager (Marketing), M/s Hari Machines Ltd.. Sh Sabyasachi Mishra, Managing Director, M/s Hari Machines Ltd. however denied that any such confirmation letter was issued by their company. In fact he stated that their company never issues such kind of confirmation letters.
18. It was thus concluded in the final report that company M/s PSPL and its two directors Sh. Gyanchand Prasad Agarwal and Umesh Chand Agarwal along with S.K. Kanungo hatched a criminal conspiracy with a view to deceive Ministry of Coal so as to induce it to allocate a captive coal block in favour of company M/s PSPL. During the processing of their application they also furnished wrong information supported with false documents to Ministry of Steel so as CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 19 of 144 to deceive them and thereby inducing them to make a recommendation in favour of company M/s PSPL to Ministry of Coal for allotment of a coal block.
19. It was also found during the course of investigation that company M/s PSPL had also submitted wrong information about the land actually acquired by them at the proposed project site in Jharkhand. It was found that till the date of submission of its application with Govt. of Jharkhand on 27.07.2004 company M/s PSPL had not acquired any land and in fact the company started acquiring/purchasing land w.e.f. 03.12.2004 onwards only. It was also found that the accused persons had furnished false information to Ministry of Steel and to Govt. of Jharkhand also so as to deceive them and thereby inducing them to make a recommendation in favour of company M/s PSPL to Ministry of Coal, Govt. of India for allotment of a captive coal block.
(ii) Proceedings before the Court
20. Upon completion of investigation a report u/s 173 Cr. PC was accordingly filed against company, M/s Pawanjay Steel & Power Ltd, its two directors namely Gyanchand Prasad Agarwal and Umesh CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 20 of 144 Chand Agarwal and S.K. Kanungo, Chief Manager (Marketing), M/s Hari Machines Ltd. This Court considered the report at length and vide a detailed order dated 28.09.2016 summoned all the four accused persons i.e. M/s Pawanjay Steel & Power Ltd (A-1), its two directors namely Gyanchand Prasad Agarwal (A-2) and Umesh Chand Agarwal (A-3) and S.K. Kanungo (A-4), Chief Manager (Marketing), M/s Hari Machines Ltd.. for the offences u/s 120-B/420 IPC. Cognizance of the offence u/s 420 IPC was also taken against company M/s Pawanjay Steel & Power Ltd., its directors Gyanchand Prasad Agarwal and Umesh Chand Agarwal.
21. Subsequently, when all the four accused persons put in their appearance, copies of the charge sheet were supplied to them. After due compliance of Section 207 Cr.PC. extensive arguments on the point of charge were heard. Subsequently, vide a detailed order dated 31.07.2017 charge for the offence u/s 120-B IPC and for the offence u/s 120-B/420 IPC was ordered to be framed against M/s Pawanjay Steel & Power Ltd, its two directors namely Gyanchand Prasad Agarwal and Umesh Chand Agarwal and S.K. Kanungo, Chief Manager (Marketing), M/s Hari Machines Ltd.. Charge for the substantive offence i.e. u/s 420 IPC was also ordered to be framed against accused company M/s Pawanjay Steel & Power Ltd. and its CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 21 of 144 two directors i.e. accused Gyanchand Prasad Agarwal and accused Umesh Chand Agarwal. The accused persons however pleaded not guilty to all the charges so framed against them and claimed trial.
Admission/denial of documents as were placed on record by the prosecution was thereafter got conducted u/s 294 Cr.PC from the accused persons.
22. Prosecution thereafter in order to prove its case examined 20 witnesses. However examination-in-chief of seven witnesses namely Sh. S. N. Khan, Additional SP, CBI, Sh. S.P. Rana, DSP, CBI, Sh. Sanjay Sehgal, DSP, CBI, Head Constable K.P. Singh, Ms. Geeta Paul, Malkhana Incharge, Sh. Ram Naresh and Sh. V.P. Sharma was however led by way of affidavits u/s 296 Cr.PC as their evidence was of formal character only. Though all the said seven witnesses were also tendered for cross-examination to the accused persons but they chose not to cross-examine them.
23. Statement of accused persons were 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. However they chose not to file any written statement u/s 313 (5) Cr.PC. Except A-4 S.K. Kanungo all the other accused persons even did not lead any evidence in their CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 22 of 144 defence.
A-4 S.K. Kanungo however examined one DW-1 Sh.
Ranjka Nidhi Manasingh in his defence.
24. Detailed final arguments in the matter were thereafter heard as were addressed by Ld. Senior P.P. Sh. A.P. Singh on behalf of prosecution and by Ld. Counsel Sh. P.K. Dubey on behalf of A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal and also by Ld. Counsel Sh. K.K. Patra for A-4 S.K. Kanungo.
Written submissions in support of their arguments were however also filed on behalf of all the accused persons.
PROSECUTION EVIDENCE
25. Thus in the aforesaid factual matrix before adverting further it will be worthwhile to give a brief reference of the deposition of various prosecution witnesses so examined in the present trial. Their deposition shall be however referred to in detail wherever required in the later part of the present judgment.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 23 of 144 PROSECUTION WITNESSES (PWs) PW Name and Deposition/Role of the witness in the present case.
No. designation of the
Witness
1 Sh. K. Ravi Kumar, He was director Industries, Government of Jharkhand. During
Director Industries,
the course of investigation he had supplied documents Government of Jharkhand relating to M/s PSPL as were available in his office and had also informed that no certificate was ever issued by the Industries department for commencement of production to M/s PSPL for its sponge iron plant at Lohardaga District.
2 Sh. Dilip Kumar, He deposed that in Lohardaga District no sponge iron plant Assistant was established till date. He further deposed that as per their Environmental Engineer, State office record M/s PSPL had not submitted any application for Pollution Control obtaining either consent to establish or consent to operate a Board, Jharkhand sponge iron plant at Lohardaga, Jharkhand since July 2004 till 03.11.2015.
3 Sh. Sabyasachi He deposed that during the year 2004-2005 he was Chief Mishra, Managing Executive Officer of M/s Hari Machines Ltd.. He further Director M/s Hari Machines Ltd. deposed that their company had neither received any Kolkata purchase order for manufacture and supply of kilns and cooler arrangements and its accessories for 4 X 100 TPD sponge iron plant from M/s PSPL nor received any payment of Rs. 10 lacs from M/s PSPL. He also deposed that documents of the nature dated 10.12.2004 titled "to whom it may concern" Ex. P-20 for confirmation of any order received by M/s Hari Machines Ltd. were ever issued to any client/customer by their company.
4 Sh. Ashok Kumar He deposed that he had handed over certain original
Under Secretary,
files/documents of their department regarding environment (IFS-I), Ministry of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 24 of 144 Environment and clearances applied for by M/s Pawanjay Steel and Power Ltd Forest, Government to Insp. Manoj Kumar.
of India 5 Dr. Motipalli He was posted as Scientist-D in the Ministry of Environment, Ramesh, Scientist-
forest and Climate Change, Government of India. He deposed D, Ministry of Environment, forest that during the period 2010-2012 M/s PSPL had applied for and Climate environmental clearance from their department. He further Change, Government of stated that as per their records the proposal of M/s PSPL for India seeking environmental clearance was received in MOEF, Government of India on 18.01.2011. However vide letter dated 13.04.2011 Ex. PW 5/A certain documents/information were sought from the company but as no further communication was received from the company so no further action took place in the Ministry. He however stated that the proposed plant could not have been established by the company without first obtaining the necessary environmental clearance from Ministry of Environment, forest and Climate Change, Government of India.
6 Sh. R.S. Malasi He was an official of Ministry of Coal, Government of India Assistant (Retired), who worked in MOC from 2001-2016 in different capacities. MOC, Government of India He deposed that as per their record no coal linkage was ever made available to M/s Pawanjay Steel and Power Ltd. though coal linkage was issued in favour of M/s Pawanjay Sponge Iron Ltd. for their sponge iron plant at Sundergarh, Orissa. During the course of investigation, he had accordingly provided the necessary file Ex. PW 6/A (colly) of MOC to IO Insp. Manoj Kumar.
7 Sh. Prem Raj Kuar He was associated with the processing of application of M/s Deputy Secretary in PSPL for allotment of a captive coal block as was received in Department of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 25 of 144 Consumer Affairs, MOC. He was also associated with the holding of Screening Govt. of India Committee meetings and the subsequent processing of minutes of the meeting beside issuance of allocation letters to successful allocatee companies.
8 Sh. Deependra He was also associated with the processing of application of
Kashiva, Retired
M/s PSPL for allotment of a coal block in Ministry of Steel. He Additional (Advisor), Ministry also calculated the coal requirement of the company on the of Steel, basis of information supplied by the company. After finalization Government of India of the comments of Ministry of Steel, he had also attended the Screening Committee meeting in Ministry of Coal alongwith Sh. Deepak Anurag, Director Ministry of Steel.
9 Sh. H. Pandhurang He was working as director in M/s Pawanjay Sponge Iron Ltd.
Pai Retired Director, and was looking after the financial matters of the company. He M/s Pawanjay Sponge Iron Ltd. deposed that he never held any position in the company M/s PSPL at any point of time. He also stated that letter dated 08.09.2004 Ex.PW 9/A written on the letter head of M/s PSPL was signed by him on the directions of accused Gyanchand Prasad Agarwal as was conveyed to him through Sh. N.K. Singh, Manager (Liaison) M/s Pawanjay Sponge Iron Ltd. He further stated that after signing the letter he handed over the same to Sh. N.K. Singh and he himself further did not pursue the movement of the said letter.
10 Sh. Sushil Ignatius He was Incharge, Director Mines, Government of Jharkhand
Minz, Retired
in May 2018. He deposed that in the year 2004-05 the Incharge Director Mines, Government application of M/s PSPL was received in department of Mines of Jharkhand and Geology, Ranchi with the request that as company had applied to MOC, Government of India seeking allocation of captive coal block so recommendation in favour of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 26 of 144 company may be made by the State Government to MOC. He thus deposed about processing of the said letter in their department. Subsequently during the course of investigation of the present case he had handed over the documents to M/s PSPL as were available in his office to IO Insp. Manoj Kumar.
11 IO Insp. Manoj He was the IO of the case. He issued various authorization Kumar letters u/s 165 Cr.PC to different CBI officers authorizing them to carry out search operations at the office premises of accused company M/s PSPL and that of its director/officers and also at their residence. He had thereafter collected various documents and information from various Government departments and other entities so as to check the veracity of the various claims made by the company M/s PSPL and its directors. He thus upon completion of all necessary investigation had submitted a report u/s 173 Cr.PC charge- sheeting the present four accused persons.
12 Sh. Balai Chand He was an employee of accused Gyanchand Prasad Agarwal Kuila, Employee of under whose signatures agenda form Ex. PW 7/G-8 (colly) of accused Gyanchand Prasad M/s PSPL was submitted to Screening Committee, MOC. He Agarwal further stated that the information mentioned on the first and third page of the agenda form was filled by him on the asking of Gyanchand Prasad Agarwal but page 2 of the agenda form was not filled by him. He also stated that the information on the said two pages was filled up by him from the draft format received from Rourkela office of the company where the information was already mentioned in pencil. He also identified the signatures of Gyanchand Prasad Agarwal on all the three pages of the agenda form and the covering letter dated 10.02.2005. He however claimed ignorance as to who CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 27 of 144 filled page 2 of the agenda form.
13 Sh. G.R. Paliwal, He retired as Deputy General Manager (Finance), Steel
(Retired) Deputy
Authority of India Limited (SAIL). During the course of General Manager (Finance), Steel investigation of the present case. He at the request of IO Insp. Authority of India Manoj Kumar had calculated the net-worth of company M/s Limited (SAIL) PSPL from the audited balance sheets of the company. He had also calculated the net-worth of five entities i.e. M/s Pawanjay Sponge Iron Ltd, M/s Dolomite Mining Corporation, Shri Gyanchand Prasad Agarwal, Shri Umesh Chand Agarwal and that of M/s Pawanjay Steel and Power Limited.
PROSECUTION WITNESSES WHOSE EVIDENCE WAS LED BY WAY OF AFFIDAVITS U/S 296 CR. PC.
S. Name and Deposition/Role of the witness in the present case.
No. designation of the
Witness
1 Sh. S. N. Khan, The affidavit tendered by him towards his examination-in-chief
Additional SP, CBI,
under section 296 Cr.PC stands proved as Ex.PW 11/Q-1. He proved various production-cum-seizure memos vide which various files/documents were collected by him from SI Sunit Pal of CBI or from Sh. Ram Naresh, Section Officer, MOC. 2 Sh. Sanjay Sehgal, The affidavit tendered by him towards his examination-in-chief DSP, CBI, under section 296 Cr.PC stands proved as Ex.PW 11/Q-2. He had led the search party which conducted search operation at the office premises of accused company M/s Pawanjay Steel & Power Ltd at Y-20, Civil Township, Rourkela, Orissa. 3 K.P. Singh, The affidavit tendered by him towards his examination-in-chief I/c Malkhana, under section 296 Cr.PC stands proved as Ex.PW 11/Q-3. He CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 28 of 144 CBI, EO-I, New Delhi was Incharge Malkhana, EO-1, CBI, New Delhi. He thus proved the relevant entries of the register maintained in the malkhana by him vide which various files/documents/memos were deposited by various CBI officers initially during the course of preliminary enquiry and subsequently during the course of investigation.
4 Insp. Geeta Paul, I/C The affidavit tendered by her towards her examination-in-chief (Malkhana Incharge, under section 296 Cr.PC stands proved as Ex.PW 11/Q-4. She EO-III, CBI), New Delhi was Incharge Malkhana EO-III CBI, New Delhi. She proved the relevant entries of the register maintained in the malkhana by her vide which various files/documents/memos were deposited by Inspector Manoj Kumar during the course of preliminary enquiry and subsequently during the course of investigation. 5 Ram Naresh, Under The affidavit tendered by him towards his examination-in-chief Secretary, Ministry of under section 296 Cr.PC stands proved as Ex.PW 11/Q-5. In the Agriculture, Govt of India, New Delhi year 2012, he was working as Section Officer, CA-1 (A) Section, Ministry of Coal. He had handed over various documents/files relating to coal block allocation matters to Dy. SP S.P. Rana during the course of preliminary inquiry registered by CBI vide receipt memo dated 06.06.2012.
6 Ved Prakash Sharma, The affidavit tendered towards his examination-in-chief under
Retired Section
section 296 Cr.PC as Ex.PW 11/Q-6. In the year 2012 he was Officer, CA-1, Section, Ministry of Coal working as Section Officer CA-1 (B) section, Ministry of Coal. He too had handed over various files/ documents of MOC to Dy. SP S.P. Rana CBI and who seized them vide production-cum-receipt memo dated 02.06.2012, 12.06.2012, 15.06.2012, 21.06.2012, 27.09.2012 and 08.11.2012 during the course of preliminary inquiry No. PE 219-2012-E-0002 registered by CBI.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 29 of 144 7 Sh. S.P. Rana, DSP, The affidavit tendered by him towards his examination-in-chief CBI, under section 296 Cr.PC stands proved as Ex. PW 11/Q-7. He was initially entrusted with the preliminary enquiry No. 219 2012 E 0002 and No.219 2012 E 0004 EO-I registered by CBI with respect to coal block allocation matters. He had collected various files/documents from MOC during the course of PE and deposited them in Malkhana of EO-I, CBI, New Delhi.
DEFENCE EVIDENCE
1. Sh. Ranka Nidhi He was production Engineer in M/s Hari Machines Ltd at Manasingh, Rajgangpur, Odisha. He deposed that vide letter dated Production Engineer, Hari Machines Ltd. 08.09.04 Ex. PW 9/A a purchase order was placed at Hari Rajgangpur, Odisha Machines Ltd. By company M/s PSPL and further stated that (Examined on behalf of A-4 S.K. Kanungo) vide letter dated 10.12.04 issued under the signatures of S.K. Kanungo a confirmation in this regard was issued by the company M/s Hari Machines Ltd in favour of M/s PSPL. He also stated that he had knowledge of the said purchase order received by M/s Hari Machines Ltd. as in a meeting their Managing Director had mentioned about the same.
26. After having briefly mentioned the deposition of various witnesses examined by the prosecution or by the accused persons during the course of trial, it will be now appropriate to briefly mention the rival contentions of both prosecution as well as that of Ld. Counsels for the accused persons.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 30 of 144 (D) ARGUMENTS
(i) Arguments on behalf of Prosecution
27. It was submitted by Ld. Sr. P.P. Sh. A.P. Singh that prosecution has clearly succeeded in proving its case against all the accused persons. It was pointed out that in the project report submitted alongwith the application dated 27.04.2004 by the company M/s PSPL seeking allocation of a captive coal block, it was clearly stated that the land for the proposed project has already been acquired. It was submitted that during the course of investigation the said claim of the company was found to be false as even on the date of submission of agenda form and making presentation before the Screening Committee only 9.7 acres of land was found to have been acquired. It was also submitted that even in the agenda form, the company mentioned inflated figures of turn-over, profit and net-worth and during the course of investigation stated that the said figures were of group companies. It was submitted that the said inflated figures of financial strength were submitted only with a view to present a higher status/stage of preparation towards establishing the proposed end use project so as to deceive MOC, Government of India to allocate a captive coal block to the company. It was also submitted that the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 31 of 144 company also misrepresented in its agenda form that the clearances have been obtained even though the most important clearance i.e. environmental clearance was even not yet applied for by the company. It was also pointed out that the company falsely claimed to be having existing capacity of 0.3 MTPA even though no such project was even established at the proposed place i.e. Lohardaga District, Jharkhand. It was also submitted that the company also misrepresented towards having placed orders for purchasing equipments and in this regard the company and its directors even entered into a criminal conspiracy with A-4 S.K. Kanungo, an employee of M/s Hari Machines Ltd so as to prepare a false and forged confirmation letter on behalf of M/s Hari Machines Ltd. It was thus submitted by Ld. Sr. P.P. Sh. A.P. Singh that the accused persons hatched a criminal conspiracy so as to deceive MOC, Government of India and thereby inducing it to allocate a captive coal block in favour of M/s PSPL. It was also submitted that soon after allocation of captive coal block, accused Gyanchand Prasad Agarwal sold away his shares in company M/s PSPL and the said fact clearly shows that the accused persons never had any intention to establish the proposed end use project.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 32 of 144 The prosecution was thus stated to have succeeded in proving its case for the offence of criminal conspiracy and the offence of cheating against the accused persons. All the accused persons were thus prayed to be convicted.
In support of his submissions Ld. Senior P.P. relied upon the following case law:
S. Title Citation No.
1. Irridium India Vs. Motorola Corporation Ltd. & 2010, Supreme Court Ors
2. State through Superintendent of Police, 1999 (5) SCC 235 CBI/SIT Vs. Nalini
(ii) Arguments on behalf of A-1 M/S PSPL, A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal.
28. It was argued by Ld. Counsel Sh. P.K. Dubey for A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal that prosecution has miserably failed to prove any misrepresentation having been made either by the accused company or by any of its two directors. It was submitted that prosecution has primarily relied upon four allegations i.e. there was misrepresentation CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 33 of 144 as regard land available with the company, its net-worth, clearances applied for by the company and the orders placed for procuring equipments for the proposed sponge iron plant. It was submitted that from a bare perusal of the application dated 27.04.2004 vide which request was made to MOC for allocating captive coal block, the company had merely stated that the site for the project has been selected and that Department of Industry, Government of Jharkhand has been applied for obtaining the site clearances. It was submitted that nowhere it was claimed in the said letter that the company has already acquired the land in question. It was also pointed out that subsequently in other communications sent to MOC, Ministry of Steel, Ministry of Power or to Chairman Standing Screening Committee or to Department of Mines and Geology, Government of Jharkhand, dated 05.06.2004 also it was nowhere stated that the land for the proposed project has been acquired. In fact in the said communication it was only stated that the site has been selected and that the Department of Industry, Government of Jharkhand has been applied for obtaining site clearances. It was thus submitted that the mere statement in the project report accompanied with the application dated 27.04.2004 that the land has already been acquired, can not be construed as a misrepresentation. It was also submitted that in fact at a later point of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 34 of 144 time when the presentation was made before the Screening Committee and the agenda form was submitted containing the latest updated information about the proposed project, it was only stated that land measuring 9.07 acres has been acquired and the process of acquiring the remaining land was in progress. It was further submitted that Ministry of Steel also noted the said fact in its communication sent to MOC, that the company has only acquired partial land and the process of acquiring remaining land is in progress. It was also pointed out that in the MOU entered into with Government of Jharkhand it was only stated that Government of Jharkhand shall extend all necessary assistance to the company in acquiring land for the proposed project. The minutes of 27th Screening Committee were also pointed out and wherein also the Screening Committee had recorded that the company has acquired partial land for the project.
29. In the aforesaid circumstances it was thus argued by Ld. Defence Counsel that from the documents relied upon by the prosecution itself it is clear that no misrepresentation was ever made by the company or its directors to any government department much less to Government of Jharkhand, Ministry of Steel or to Screening Committee, MOC. It was thus submitted that consequently no one CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 35 of 144 was ever misled or deceived into believing that the entire land for the project has been acquired. An important ingredient of the offence of cheating was thus stated to be missing.
30. As regard the clearances obtained, it was submitted by Ld. Counsel Sh. P.K. Dubey that during the course of investigation, it was found that the water and electricity clearances were already obtained by the company. It was submitted that the only allegation of the prosecution that the company had not applied for environmental clearance was without any basis as it was never specified by MOC or Ministry of Steel or even by Government of Jharkhand that any particular nature of clearance was essential to be obtained before either applying for allocation of a captive coal block or before actual allocation of any coal block by MOC, Government of India. It was also submitted that IO Inspector Manoj Kumar, admitted in his cross- examination that he did not remember as to what all clearances were obtained by the company and also that in the agenda form Ex. PW 7/J there was no mention of any specific clearance to be obtained by the company.
31. In the aforesaid circumstances it was submitted that not only investigation carried out in the present matter was half-hearted and CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 36 of 144 was not even fair but even otherwise the prosecution has clearly failed to prove on record as to in what manner obtaining of environmental clearance was essential before applying for allocation of a captive coal block or before actual allocation of the coal block by MOC.
32. As regard the allegation that the company misrepresented about its existing capacity or availability of coal linkage, it was submitted that during the cross-examination of various prosecution witnesses and the documents relied upon by CBI, itself it has come on record that MOC during the process of considering the applications of various applicant companies seeking allocation of captive coal blocks had received information about availability of coal linkage to a group company of M/s PSPL. It was also pointed out that from the minutes of 27th Screening Committee itself it was clear that the Screening Committee was well aware and conscious of the fact that the existing capacity of coal linkage was available with the applicant company in Orissa and not in Lohardaga, Jharkhand where the plant in question was proposed to be established.
It was thus submitted that no misrepresentation of any nature whatsoever was made by the company in this regard.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 37 of 144
33. As regard the financial status of the company it was submitted that as per the documents relied upon by the prosecution itself Sh. D. Kashiva, Joint Industrial Advisor, Ministry of Steel had admittedly sought information of the group companies of the applicant company M/s PSPL and the same was accordingly supplied to them. It was also submitted that admittedly the company M/s PSPL was incorporated in the year 2002 only and thus the question of there being any turn-over, net-worth or profit of the company in the past three years does not arise at all. It was submitted that the information as was submitted in the agenda form was of the group companies and that too in consonance with the information sought by Ministry of Steel. It was also submitted that the definition of group companies as was now sought to be put forward by the prosecution can not be relied upon at this stage of the matter as during the actual process of considering the applications of applicant companies seeking allocation of captive coal blocks no such definition of group companies was at all provided for and the accused persons had accordingly provided information as per their contemporaneous understanding of the matter. It was also submitted that as regard the issue of orders having been placed for procuring equipments from M/s Hari Machines Ltd, the prosecution has clearly failed to prove that the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 38 of 144 confirmation order issued by M/s Hari Machines Ltd. under the signatures of A-4 S.K. Kanungo was forged and fabricated. It was stated that from the deposition of PW-3 Sabya Sachi Mishra, it has come on record that the record produced by him in the Court was not complete and even the register produced by him of the year 2005 was having number of discrepancies. It was also submitted that no reliance thus can be placed on the said record produced by PW-3 Sabya Sachi Mishra. It was further submitted that even otherwise PW-3 Sabya Sachi Mishra has admitted the fact of adjustment of the impugned advance amount of Rs. 10 lacs given to them against an earlier running order of M/s Pawanjay Sponge Iron Ltd. and he also stated that M/s Hari Machines Ltd was not a stranger to the practice of setting off the money from one account of a company to the account of its sister concern. It was also submitted that as per PW-3 Sabya Sachi Mishra there were 2-3 persons working in the marketing department and they all used to make entries in the booking register. It was also pointed out that the said persons have not been examined by the prosecution and thus the register in question can not be relied upon at all.
34. As regard Umesh Chand Agarwal it was submitted by Ld. CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 39 of 144 Counsel Sh. P.K. Dubey that except for one letter Ex. PW 8/A-5 (colly) (D-10) no other document was signed by him or submitted by him to any of the Government authorities. It was submitted that even in the said letter as was received in Ministry of Steel on 31.08.2004, no falsity has been shown by the prosecution which could show involvement of Umesh Chand Agarwal in any manner with the entire coal block allocation process. While relying upon the observations of Hon'ble Supreme Courts given in the case Sunil Bharti Mittal Vs. CBI (2015) 4 SCC 609, it was submitted that no vicarious liability can thus be imposed upon accused Umesh Chand Agarwal.
35. In support of his submissions Ld. Counsel Sh. P.K. Dubey placed reliance on the following case law:
S No. Title Citation 1 Iridium India Telecom Ltd vs Motorola (2011) 1 SCC 74. Incorporated and Ors 2 M.L. Sharma vs The Principal Secretary 3 Sunil Bharti Mittal vs CBI (2015) 4 SCC 609 4 Maksud Saiyed vs State of Gujarat (2008) 5 SCC 668 5 Pepsi Food & Ors. vs Special Judicial (1998) 5 SCC 768 Magistrate & Anr 6 M/s Pushp Steel and Power Ltd vs CBI, Order on charge dated (CC No. 298/2019) 19.02.2016 passed by this Court CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 40 of 144
Prosecution was thus stated to have failed in proving its case against the three accused persons. They all three were thus prayed to be acquitted.
(iii) Arguments on behalf of A-4 S.K. Kanungo.
36. As regard A-4 S.K. Kanungo, it was submitted by Ld. Counsel Sh. K.K. Patra that prosecution has clearly failed in proving that the confirmation order issued under the signatures of A-4 S.K. Kanungo, who was an employee in M/s Hari Machines Ltd was a forged and fabricated document. It was submitted that deposition of PW-3 Sabyasachi Mishra in fact raises more doubts about the veracity of the prosecution case in as much as complete record of the company for the relevant period was neither seized by the IO nor was produced during the course of trial. It was submitted that in the register so produced by PW-3 Sabyasachi Mishra a number of discrepancies were pointed out and which clearly raises grave shadows of doubts as regard the correctness of his deposition. While relying upon the deposition of DW-1 Sh. Ranka Nidhi Manasingh, it was further submitted that not only in his cross-examination as conducted by Ld. Sr. P.P. Sh. A.P. Singh, nothing could be elicited which could favour the case of prosecution in any manner but even otherwise from his CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 41 of 144 deposition, it stood well proved that order for supply of four kilns was indeed placed with M/s Hari Machines Ltd by M/s PSPL i.e. applicant company.
Prosecution was thus stated to have miserably failed in proving its case against A-4 S.K. Kanungo. He was accordingly prayed to be acquitted.
Prelude to my discussion
37. It is in the light of aforesaid factual matrix and the arguments put-forth by prosecution and Ld. Counsels for the accused persons that I now intend to deal with the evidence led on record by the prosecution to prove its case.
38. However before adverting further, I may state that like all other coal block allocation matters, the present case is also primarily based on circumstantial evidence. However the said circumstances are sought to be proved by the prosecution primarily on the basis of various documents seized during the course of investigation coupled with deposition of various prosecution witness examined during the course of trial. The documents so relied upon in the present case are CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 42 of 144 the files of MOC, Government of India, files of the office of Prime Minister as the then Prime Minister was also holding the charge of Minister of Coal. The files of Government of Chattisgarh have also been relied upon by the prosecution in this regard. Accordingly during the course of my subsequent discussion, I will be repeatedly referring to various such documents and the deposition of various prosecution witnesses.
39. However at this stage, it will be also appropriate to reiterate the often quoted observations of Hon'ble Supreme Court regarding cases based on circumstantial evidence as were made in the case Sharad Birdhichand Sarda Vs. State of Maharashtra, (1984) 4 SCC 116. Hon'ble Supreme Court in paras 152, 153 and 154 observed as under:
"152. Before discussing the cases relied upon by the High Court we would like to cite a few decisions on the nature, character and essential proof required in a criminal case which rests on circumstantial evidence alone. The most fundamental and basic decision of this Court is Hanumant V. State of Madhya Pradesh1. This case has been uniformly followed and applied by this Court in a large number of later decisions up-to- date, for instance, the cases of Tufail (Alias) Simmi v. State of Uttar Pradesh17 and Ramgopal v. State of Maharashtra 18. It may be useful to extract what Mahajan, J. has laid down in Hanumant case :
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 43 of 144 It is well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
153. A close analysis of this decision would show that the following conditions must be fulfilled before a case against an accused can be said to be fully established:
(1) the circumstances from which the conclusion of guilt is to be drawn should be fully established.
It may be noted here that this Court indicated that the circumstances concerned 'must or should' and not 'may be' established. There is not only a grammatical but a legal distinction between 'may be proved' and "must be or should be proved" as was held by this Court in Shivaji Sahabrao Bobade v. State of Maharashtra19 where the following observations were made : [SCC para 19, p. 807 : SCC (Cri) p. 1047] Certainly, it is primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions. (2) the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty, (3) the circumstances should be of a conclusive nature and tendancy, (4) they should exclude every possible hypothesis except CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 44 of 144 the one to be proved, and (5) there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused.
154. These five golden principles, if we may say so, constitute the panchsheel of the proof of a case based on circumstantial evidence."
40. 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. Moreover as one of the main charge framed against the accused persons is of hatching a criminal conspiracy in between them so it will be also appropriate to refer to the observations of Hon'ble Supreme Court as regard the offence of criminal conspiracy as were made in the case "State through Superintendent of Police, CBI/SIT Vs. Nalini", 1999 (5) SCC 235. The said observations have been consistently followed in all the cases till date. The evidence led by the prosecution will also have to be read and considered in the light of said observations of Hon'ble Supreme Court in order to assess as to whether the charge of criminal conspiracy is made out against the accused persons or not.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 45 of 144
41. In the said case, Hon'ble Supreme Court summarized the broad principles governing the law of conspiracy as under:
"591. Some of the broad principles governing the law of conspiracy may be summarized though, as the name implies, a summary cannot be exhaustive of the principles.
1. Under Section 120A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is legal act by illegal means overt act is necessary. Offence of criminal conspiracy is exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence. The question for consideration in a case is did all the accused had the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accused merely entertained a wish, howsoever, horrendous it may be, that offence be committed.
2 Acts subsequent to the achieving of object of conspiracy may tend to prove that a particular accused was party to the conspiracy. Once the object of conspiracy has been achieved, any subsequent act, which may be unlawful, would not make the accused a part of the conspiracy like giving shelter to an absconder.
3 Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused.
4 Conspirators may, for example, be enrolled in a chain - A enrolling B, B enrolling C, and so on; and all will be members of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 46 of 144 a single conspiracy if they so intend and agree, even though each member knows only the person who enrolled him and the person whom he enrolls. There may be a kind of umbrella- spoke enrollment, where a single person at the center doing the enrolling and all the other members being unknown to each other, though they know that there are to be other members. These are theories and in practice it may be difficult to tell whether the conspiracy in a particular case falls into which category. It may, however, even overlap. But then there has to be present mutual interest. Persons may be members of single conspiracy even though each is ignorant of the identity of many others who may have diverse role to play. It is not a part of the crime of conspiracy that all the conspirators need to agree to play the same or an active role.
5 When two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one who joins in the agreement. There has thus to be two conspirators and there may be more than that. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy. 6 It is not necessary that all conspirators should agree to the common purpose at the same time. They may join with other conspirators at any time before the consummation of the intended objective, and all are equally responsible. What part each conspirator is to play may not be known to everyone or the fact as to when a conspirator joined the conspiracy and when he left.
7 A charge of conspiracy may prejudice the accused because it is forced them into a joint trial and the court may consider the entire mass of evidence against every accused. Prosecution has to produce evidence not only to show that each of the accused has knowledge of object of conspiracy but also of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 47 of 144 agreement. In the charge of conspiracy court has to guard itself against the danger of unfairness to the accused. Introduction of evidence against some may result in the conviction of all, which is to be avoided. By means of evidence in conspiracy, which is otherwise inadmissible in the trial of any other substantive offence prosecution tries to implicate the accused not only in the conspiracy itself but also in the substantive crime of the alleged conspirators. There is always difficulty in tracing the precise contribution of each member of the conspiracy but then there has to be cogent and convincing evidence against each one of the accused charged with the offence of conspiracy. As observed by Judge Learned Hand that "this distinction is important today when many prosecutors seek to sweep within the dragnet of conspiracy all those who have been associated in any degree whatever with the main offenders".
8 As stated above it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement, which is the graham of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts, and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy. 9 It has been said that a criminal conspiracy is a partnership in crime, and that there is in each conspiracy a joint or mutual agency for the prosecution of a common plan. Thus, if two or more persons enter into a conspiracy, any act done by any of them pursuant to the agreement is in contemplation of law, the act of each of them and they are jointly responsible therefore. This means that everything said, written or done by any of the conspirators in execution or furtherance of the common purpose is deemed to have been said, done, or written by each CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 48 of 144 of them. And this joint responsibility extends not only to what is done by any of the conspirators pursuant to the original agreement but also to collateral acts incident to and growing out of the original purpose. A conspirator is not responsible, however, for acts done by a co-conspirator after termination of the conspiracy. The joinder of a conspiracy by a new member does not create a new conspiracy nor does it change the status of the other conspirators, and the mere fact that conspirators individually or in groups perform different tasks to a common end does not split up a conspiracy into several different conspiracies.
10. A man may join a conspiracy by word or by deed. However, criminal responsibility for a conspiracy requires more than a merely passive attitude towards an existing conspiracy. One who commits an overt act with knowledge of the conspiracy is guilty. And one who tacitly consents to the object of a conspiracy and goes along with other conspirators, actually standing by while the others put the conspiracy into effect, is guilty though he intends to take no active part in the crime."
42. In this regard, it will be also worthwhile to quote certain other observations with regard to the offence of criminal conspiracy as were made by Hon'ble Supreme Court 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 Maharastra Vs. Som Nath Thapa 1996 (4) SCC 659; Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC 596:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 49 of 144 "―The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done. So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. Under Section
43 of the Indian Penal Code, an act would be illegal if it is an offence or if it is prohibited by law. Under the first charge the accused are charged with having conspired to do three categories of illegal acts, and the mere fact that all of them could not be convicted separately in respect of each of the offences has no relevancy in considering the question whether the offence of conspiracy has been committed. They are all guilty of the offence of conspiracy to do illegal acts, though for individual offences all of them may not be liable."
43. Thus in order to constitute a conspiracy, meeting of minds of two or more persons for doing an illegal act or an act by illegal means is the first and primary condition and it is not necessary that all the conspirators must know each and every detail of the conspiracy. Neither is it necessary that every one of the conspirators takes active part in the commission of each and every conspiratorial acts. The agreement amongst the conspirators can be inferred by necessary implication. In most of the cases, the conspiracies are however proved by circumstantial evidence, as the conspiracy is seldom an open affair. The existence of conspiracy and its objects are usually deduced from the circumstances of the case and the conduct of the accused involved in the conspiracy. Criminal conspiracy is an CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 50 of 144 independent offence in the Penal Code. The unlawful agreement is sine qua non for constituting offence under the Penal Code and not an accomplishment. Conspiracy consists of the scheme or adjustment between two or more persons which may be expressed or implied or partly expressed or partly implied. Even Section 10 of the Evidence Act introduces the doctrine of agency and if the conditions laid down therein are satisfied, the act done by one is admissible against the co- conspirators.
44. Thus in the light of aforesaid well settled position of law, it will be appropriate that the allegations which have been levelled by the prosecution against the accused persons be first delineated. Thereafter, I propose to examine as to whether each of the said circumstances/allegations stand cogently proved by the prosecution or not, for than only can it be examined as to whether such proved facts and circumstances form such a continuous chain of circumstances which is consistent only with the hypothesis of guilt of the accused persons, or not or that they do not leave any reasonable ground for a conclusion consistent with the innocence of accused. In other words whether the said facts and circumstances so proved are of such conclusive nature and tendency that they tend to exclude CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 51 of 144 every other hypothesis then the one proposed to be proved.
45. I have carefully perused the record.
46. The case of the prosecution primarily rests on four allegations against the accused persons. Firstly it has been alleged that the company M/s PSPL made false claims about availability of land with it for establishing the proposed end use project. Secondly it has been alleged that the accused persons made false claims as regard the existing capacity of their sponge iron plant before the Screening Committee. Thirdly it has been alleged that the company also misrepresented about its financial strength before the Screening Committee. Fourthly it has been alleged that the accused persons misrepresented to Ministry of Steel and also to Screening Committee, MOC as regard steps taken towards procuring the equipments for the purposes of establishing the proposed end-use project including making an advance payment of Rs. 10 lacs to M/s Hari Machines Ltd in lieu thereof. In support of the said claim it has been alleged that A-2 Gyanchand Prasad Agarwal furnished to Ministry of Steel a false purchase order and thereby showing that A-1 M/s PSPL has placed order for purchase of 4 kilns, cooler etc for the proposed sponge iron project to be established at Lohardaga, Jharkhand upon M/s Hari CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 52 of 144 Machines Ltd. In order to further substantiate the said claim A-2 Gyanchand Prasad Agarwal also produced a false confirmation letter issued under the signatures of A-4 S.K. Kanungo so as to show that M/s Hari Machines Ltd has not only received such an order for purchase of 4 X 100 TPD kilns, cooler etc but also an advance payment of Rs. 10 lacs from M/s PSPL. It has also been alleged by the prosecution that after allocation of coal block in favour of M/s PSPL, accused Gyanchand Prasad Agarwal and Umesh Chand Agarwal sold away 50% shares of M/s PSPL so as to earn undue profits and this fact show that they actually never had any intention to either mine the coal block or to establish the proposed end use project.
47. I shall be thus first discussing as to whether there was any misrepresentation qua any of the aforesaid four aspects or qua any one of them on the part of accused persons or not. If the said allegations are found to be proved by the prosecution then the effect of such misrepresentation shall be discussed and analysed as to whether the same amounted to dishonest or fraudulent misrepresentation and if yes then whether it had the desired effect of playing deception upon Ministry of Steel and upon Screening CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 53 of 144 Committee, MOC and thereby upon the Government of India, resulting in allocation of North Dhadu coal block in favour of company M/s PSPL. It will be also discussed as to whether on the basis of said deception not only Ministry of Steel was induced to make a recommendation in favour of M/s PSPL to MOC for allocation of a captive coal block but also whether MOC, Government of India was induced to allocate a coal block in favour of the applicant company or not.
Alongwith the aforesaid various aspects it will be also seen as to whether all the accused persons acted in furtherance of any criminal conspiracy so as to cheat MOC, Government of India in procuring allocation of a captive coal block in favour of company M/s PSPL or not.
I. Whether company M/s PSPL misrepresented about land already acquired by it.
48. It was submitted by Ld. Sr. P.P. Sh. A.P. Singh that in the feasibility report of the proposed end use project as was enclosed with the application of the company received in MOC on 27.04.2004, it was mentioned at two different places that the company has already acquired the land required for establishing the proposed end use CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 54 of 144 project near Lohardaga. It was submitted that even subsequently when A-3 Umesh Chand Agarwal submitted letter dated 29.07.2004 to Ministry of Steel under his signatures then also he drew attention of Ministry of Steel officers to the said project report already submitted. It was pointed out that the said project report containing similar claims about land having been already acquired was once again submitted by accused Gyanchand Prasad Agarwal to Ministry of Steel vide letter dated 05.01.2005. It was thus argued by Ld. Sr. P.P. that the company M/s PSPL has been falsely claiming all through that the land required for the proposed project has already been acquired.
49. On the other hand it has been vehemently argued by Ld. Counsel Sh. P.K. Dubey that in the application as was received in MOC on 27.04.2004 and whereby the company had applied to MOC seeking allocation of a captive coal block, it was merely stated that the company has applied for site clearance to the Department of Industry, Government of Jharkhand. It has thus been stated that neither in the said application nor in any other subsequent communication made by the company either to MOC or to Ministry of Steel or even to Government of Jharkhand, it was ever claimed that the company has already acquired the land required for establishing CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 55 of 144 the proposed end use project. It was also pointed out that in the agenda form Ex. PW 7/J (D-21) submitted to 27 th Screening Committee, MOC, the words "partly acquired, rest in progress" were mentioned as regard land. It was also submitted that even in the minutes of 27th Screening Committee meeting it has been specifically recorded that the company has partly acquired land. It was thus submitted that the company did not misrepresent at any point of time regarding land in its possession to any authority whatsoever.
MY DISCUSSION
50. In order to appreciate the present issue it would be worthwhile to first refer to various claims as were made qua status of land by company M/s PSPL in its communications or in the enclosed documents submitted to Ministry of Coal, Ministry of Steel and to State Government of Jharkhand.
51. In the initial application of company M/s PSPL (A-1) as was submitted to MOC on 27.04.2004 under the signatures of A-2 Gyanchand Prasad Agarwal, it was stated that they have applied for site clearance to the Department of Industry, Government of Jharkhand. Following facts were interalia mentioned in the said CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 56 of 144 application as regard land:
"We have applied for site clearance to the Department of Industries, Govt. of Jharkhand as well as we are monitoring the same with the District Authority and it is very near to finalization. We are intending to commence production by the end of this year."
However alongwith the said application a project report titled "Feasibility report for integrated steel complex via DRI-IF route at Lohardaga Jharkhand" was also submitted. In the said report under chapter 3, titled "Site clearance for the proposed plant" the following facts were mentioned in the first para itself.
"Pawanjay Group wishes to establish a 0.3 million ton / annum Sponge Iron plant alongwith Captive Power Plant and Steel Melt Shop project near Lohardaga in Jharkhand for which they had already acquired suitable land, 4 kms from Lohardaga Town and near Shankh river. The proposed Railway line from Ranchi to Lohardaga is passing through the site. Further, Pawanjay is applying for suitable iron ore and coal mining lease in the State of Orissa and Jharkhand. Detailed study of probable mining lease is under progress."
(Emphasis supplied) Subsequently at another place in Chapter 3 itself, while justifying the reasons for selecting Lohardaga as the proposed place for establishing the proposed end use plant as compared to Raigarh CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 57 of 144 in Chattisgarh or Talcher in Orissa where iron ore and coal were stated to be available in abundance, the company gave a comparative analysis of the three locations qua various factors and further stated as under:
"From the above analysis, it is proposed to locate the plant either in Talcher area or near Lohardaga. Since Pawanjay had already acquired the suitable land and the group is getting the all necessary help from the Jharkhand State, it is proposed to locate the plant near Lohardaga in Jharkhand State. The proposed site is appx. 4 kms from Lohardaga Town."
(Emphasis supplied)
52. The company M/s PSPL again submitted a communication dated 05.06.2004 addressed to Chairman, Standing Screening Committee, MOC, Secretary MOC, Secretary Ministry of Power, Secretary Ministry of Steel and Director of Mines and Geology, Government of Jharkhand. In the said communication the following facts were mentioned interalia qua land:
"We are undertaken for implementation of a project consisting of Sponge Iron, Captive Power Plant, Steel Melting Shop, Rolling Mill. We have already made application to various department viz Department of Industries etc. We have already finalized the technical consultancy and financial resources for first phase of our project. We have selected the site for this project near Lohardaga on Lohardaga - Ranchi Road. Lohardaga district of Jharkhand State is a very backward district from industrial CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 58 of 144 development point of view as there is no any industry. We have applied for site clearance to the Department of Industries, Govt. of Jharkhand as well as we are monitoring the same with the District Authority and it is very near to finalization. We are intending to commence production by the end of this year."
(Emphasis supplied)
53. Alongwith the said communication also a short summary of project report for incorporated steel project at Lohardaga, Jharkhand was enclosed. In the said project report also in Chapter 3, the following facts were mentioned as regard availability of land at two different places:
"Pawanjay Group wishes to establish a 0.3 million ton/annum Sponge Iron plant alongwith Captive Power Plant and Steel Melt Shop project near Lohardaga in Jharkhand for which they had already acquired suitable land 4 Kms from Lohardaga Town and near Shankh river. The proposed Railway line from Ranchi to Lohardaga is passing through the site. Further, Pawanjay is applying for suitable iron ore and coal mining lease in the State of Orissa and Jharkhand. Detailed study of probable mining lease is under progress.
54. Again at another place in the said feasibility report itself, after giving comparative analysis of the probable locations for establishing the proposed end use project in Jharkhand, Chhatisgarh and Orissa, the justification for establishing the proposed end use project at CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 59 of 144 Lohardaga, Jharkhand was stated as under:
"From the above analysis, it is proposed to locate the plant either in Talcher area or near Lohardaga. Since Pawanjay had already acquired the suitable land and the group is getting the all necessary help from the Jharkhand State, it is proposed to locate the plant near Lohardaga in Jharkhand State. The proposed site is approx. 4 kms from Lohardaga Town."
55. The company M/s PSPL thereafter submitted yet another communication dated 23.07.2004 addressed to Chairman, Standing Screening Committee, MOC, Secretary MOC, Secretary Ministry of Power, Secretary Ministry of Steel and Director of Mines and Geology, Government of Jharkhand and the same was received in MOC on 30.07.2004. In the said communication the interest of the company in seeking allocation of one of the three coal blocks namely North Dhadu, Dumri and Chaitti Bariatu was expressed. However nothing was mentioned as regard land in the said communication though copy of earlier communication dated 05.06.2004 was enclosed with the said communication.
56. The application of the company M/s PSPL in the meantime came to be considered by 24th Screening Committee meeting held on 09.12.2004. However in the said meeting representative of Ministry of Steel stated that as the company M/s PSPL has failed to provide CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 60 of 144 details of the proposed end use project so they are not in a position to recommend the case. Accordingly the Screening Committee gave 15 days time to the company to provide the requisite details to Ministry of Steel.
57. Accordingly on 17.12.2004 the company M/s PSPL submitted a communication to Ministry of Steel. The said communication, as mentioned in the letter itself, was written pursuant to discussion held in the 24th Screening Committee meeting held on 09.12.2004. Vide the said communication information about various group companies was submitted to Ministry of Steel. As regard M/s PSPL it was stated that the company is acquiring 250 acres of land. It was also stated that appropriate detailed techno-economic feasibility report covering ultimate sponge iron capacity and other documents, evidences regarding effective steps taken like procurement of land, placing of orders for major plant and machinery are enclosed. However as the said letter was not carrying the signatures of any person though name of accused Gyanchand Prasad Agarwal was mentioned as signatory of the letter so on 17.12.2004 itself another copy of the said letter under the signatures of Gyanchand Prasad Agarwal was received in Ministry of Steel.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 61 of 144 A copy of the said communication dated 17.12.2004 was however also submitted by the company to MOC and the same was received in MOC on 19.01.2005.
58. The company M/s PSPL however also submitted yet another communication dated 17.12.2004 Ex. PW 7/G-7 (colly) addressed to Chairman, Standing Screening Committee, MOC, Secretary MOC, Secretary Ministry of Power, Secretary Ministry of Steel and Director of Mines and Geology, Government of Jharkhand. The said communication was received in MOC on 30.12.2004. Vide the said communication a request was made for allotment of Dumri coal block. In the said communication however nothing was stated as regard availability or acquisition of land.
59. The company M/s PSPL thereafter submitted yet another communication dated 05.01.2005 Ex. PW 8/A-10 (D-10) seeking allocation of a captive coal block for the proposed sponge iron project at Lohardaga. In the said communication also it was stated that company is acquiring 250 acres of land. Alongwith the said communication a map of the land where the steel plant was to be established was enclosed beside copies of some sale deeds. Copies of certain correspondence made by the company with Department of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 62 of 144 Industries, Government of Jharkhand in connection with allocation of about 170 acres of land were also enclosed.
60. However on 05.01.2005 itself company M/s PSPL through A-2 Gyanchand Prasad Agarwal submitted yet another Revised Techno Economic Feasibility Report in place of Techno Economic Feasibility Report already submitted. However in the said Revised Techno Economic Feasibility Report Ex. PW 8/B (colly) (D-11) also same claims were made as regard land as were made in the report submitted earlier. It was stated in the revised TEFR also that the land for the project has already been acquired near Lohardaga in Jharkhand.
61. One other communication dated 17.12.2004 Ex. PW 8/A-8 (colly) (D-10) addressed to Chairman, Standing Screening Committee, MOC, Secretary Steel and Director Mines, Government of Jharkhand requesting for allotment of Dumri coal block was also received in Ministry of Steel on 05.01.2005. In the said communication however nothing was mentioned as regard land.
62. In fact company M/s PSPL had also in the meantime entered into an MOU dated 01.06.2004, Ex. PW 10/G (D-14) [Part of Ex. P-9 CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 63 of 144 (colly)] with Government of Jharkhand wherein it was stated that Government of Jharkhand will assist in obtaining land required for putting up manufacturing and other related activities to complete the project.
63. Subsequently in the agenda form submitted to 27 th Screening Committee vide letter dated 10.02.2005, the company submitted information regarding land as having been partly acquired and rest in progress. The 27th Screening Committee in the minutes of meeting held on 01.03.2005 recorded the following facts while making its recommendation in favour of M/s PSPL for allocation of North Dhadu Coal block.
"13. M/s Pawanjay Steel and Power Ltd.
M/s Pawanjay Steel and Power Ltd. has requested for the North Dhadu and Dumuri coal blocks to meet coal requirement for their 0.4 mtpa ultimate sponge iron capacity to be located at Lohar Daga in Jharkhand. They have an existing sponge iron capacity of 0.036 mtpa for which they have been granted coal linkage of 0.043 mtpa F-grade coal from the Mahanadi Coalfield Ltd. The company has in its presentation stated its turn-over, profit and net-worth to be Rs. 14 crore. Rs. 4 crore and Rs. 7.5 crore respectively at the end of March 2004. The sponge iron project is proposed to be installed in three phases involving the time period of about 57 months from the date of allocation of block. They also propose to develop the captive mine in 36 months. As informed they had partly acquired land CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 64 of 144 and water is plentifully available for their project from the adjoining rivers. Also orders for kilns etc. have already been placed and funds have been negotiated with the Bank of India for the project. Ministry of Steel and Govt. of Jharkhand representatives supported the allocation to the applicant."
(Emphasis supplied)
64. However subsequent to 27th Screening Committee meeting held on 01.03.2005, Ministry of Steel sent a communication dated 23.03.2005 Ex. PW 8/A-11 (D-10) to MOC mentioning the various steps, company M/s PSPL had taken to establish the proposed end use project. It was mentioned in the said communication that the company has acquired 10.8 acres of private land and has submitted the correspondence with the State Government of Jharkhand regarding allotment of 170.315 acres land.
65. It is in the light of aforesaid factual matrix, it is to be analysed as to whether company M/s PSPL misrepresented regarding land in its possession or not.
66. However before adverting further, I may state at the outset itself that the stand of the company as regard status of land has all along been ambiguous. For reasons best known to the accused persons there has not been a categorical statement in any of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 65 of 144 communications referred to above that the land in question has not yet been acquired. On the other hand in the documents enclosed with the said communication(s) or the documents referred to in the said communication(s) there was a specific averment that suitable land has been acquired. Though in the initial application dated 27.04.2004 Ex. PW 7/G-1 (colly) or communication dated 05.06.2004 Ex. PW 7/G-2 (colly), it was stated by the company that they have applied for site clearance to the Department of Industry, Government of Jharkhand but when the said statement is read alongwith the project report enclosed with the said letter then the un-mistakeble impression which one gets is that suitable land has already been acquired by the company for establishing the proposed project but clearance of the said site from Department of Industry, Government of Jharkhand has been applied for.
67. As earlier mentioned the claim of having acquired suitable land for the proposed project has been made at two different places in the feasibility report/Techno Economic Feasibility Report (TEFR) submitted by the company alongwith its various communications sent to Ministry of Steel, Ministry of Coal and to Government of Jharkhand. As earlier pointed out A-3 Umesh Chand Agarwal, the Managing CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 66 of 144 Director of M/s PSPL in his communication Ex. PW 8/A-5 (colly) as was received in Ministry of Steel on 31.08.2004 under his signatures also referred to the said project report. Even subsequently when A-2 Gyanchand Prasad Agarwal submitted the revised TEFR alongwith his communication dated 05.01.2005 to Ministry of Steel seeking to replace the earlier report submitted then in the said revised TEFR Ex. PW 8/B (colly) (D-11) also a similar claim regarding suitable land having been already acquired by the company at Lohardaga, Jharkhand was made at two places. It is also an undisputed case that all such communications as were made either by A-3 Umesh Chand Agarwal or by A-2 Gyanchand Prasad Agarwal with Ministry of Steel were made in response to letter dated 29.07.2004 Ex. PW 8/A-4 issued by PW-8 D. Kashiva, Joint Industrial Advisor, Ministry of Steel and letter dated 04.10.2004 Ex. PW 8/A-6 issued by Sh. D.S. Yadav, Section Officer, Ministry of Steel. As earlier mentioned vide the said two letters Ministry of Steel had asked the company to furnish various information in furtherance to the earlier communication dated 05.06.2004 Ex. PW 8/A-3 (colly) submitted to Ministry of Steel.
68. In the aforesaid facts and circumstances it becomes important to see as to why the accused persons chose to make such CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 67 of 144 ambiguous claims regarding availability/acquiring land in its various communications or in the documents enclosed.
69. Since Ministry of Steel was the concerned Administrative Ministry with respect to sponge iron plants so in terms of the guidelines issued by MOC governing allocation of captive coal blocks the recommendation of Administrative Ministry was an important factor to be considered by the Screening Committee in arriving at its recommendations. Furthermore as earlier mentioned the representative of Ministry of Steel in the 24 th Screening Committee meeting held on 09.12.2004 had stated that they are not in a position to recommend the case of company M/s PSPL as the company has failed to provide satisfactory details despite having been asked to do so.
In this regard it will be pertinent to refer to the relevant portion of the minutes of 24 th Screening Committee meeting held on 09.12.2004. The same read as under:
Minutes of the 24th meeting of the Screening Committee held on 9.12.2004 in the Council Room, 3rd Floor, Federation House, FICCI, Tansen Marg, New Delhi List of participants is placed at Annexure I.
2. . . . . . . .
. . . . . . . .
. . . . . . . .
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 68 of 144 Name of applicant company: M/s Pawanjay Steel & Power Ltd.
Name of Block: Dumri, Brinda "Representative of the applicant stated that they have 60,000 tonnes per annum sponge iron plant in Orissa, for which they have also a long-term linkage. They are seeking coal blocks for sponge iron projects to be set up in Lohardaga district of Jharkhand State at an investment of Rs.200 crores. They stated that they are also in the business of mining of bauxite and dolomite; that they would begin mining operations without any delay if coal blocks are allocated to them. Representative from Ministry of Steel stated that they have very little idea about the applicant's project. The applicant was asked to provide details for their assessment, but have failed to provide satisfactory details so far and, therefore, they are not in a position to recommend the case. The applicant company sought one month for providing the necessary details to Ministry of Steel. The Chairman, after deliberations in the Screening Committee, agreed to give them 15 days' time and requested Ministry of Steel to form their views and inform Ministry of Coal/Screening Committee."
70. Thus it is clear that the only object of submitting various communications to Ministry of Steel by M/s PSPL either prior to 24 th Screening Committee meeting or subsequent thereto was to obtain recommendation from Ministry of Steel to be made to MOC in favour of company M/s PSPL for allotment of a captive coal block.
71. Thus contrary to the claim of Ld. Defence Counsel we have a case where a TEFR was submitted by the company alongwith CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 69 of 144 various communications and the said TEFR contained false claims that land required for establishing the proposed end use project has already been acquired. No doubt in the communications sent by the company it was stated that the company has applied for site clearance to Department of Industries, Government of Jharkhand. However as earlier mentioned vide communication dated 05.01.2005 the company sought to replace the earlier TEFR with a revised TEFR and while in the said communication dated 05.01.2005 nothing was mentioned as regard the status of land but in the revised TEFR enclosed therewith, similar claims towards having already acquired land at near Lohardaga were made at two places.
72. In fact neither during the course of investigation nor during the course of trial anything has been explained by the accused persons as to in what circumstances or for what purpose the revised TEFR was filed.
Moreover the mere fact mentioned in its communications by the company that it has applied for site clearance to the Department of Industries, Government of Jharkhand it can not be perse construed that no land has yet been acquired by the company. On the other hand, when the said communications are read in the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 70 of 144 light of averments made in the enclosed TEFR then it appears to convey that though company has already acquired the land but its clearance from Department of Industries, Government of Jharkhand is being sought for the purpose of establishing the proposed end use project. However nothing has been explained on the part of accused persons during the course of entire trial as to in what context the words site clearance were used in the various communications or in what circumstances claims regarding land having been already acquired were made in the TEFR so submitted to Ministry of Steel or to MOC alongwith the said communications.
73. However it is also true that in the Agenda Form Ex. PW 7/J (D-
21) submitted to 27th Screening Committee on behalf of A-1 M/s PSPL under the signatures of A-2 Gyanchand Prasad Agarwal, it was stated that part land has been acquired and remaining is in progress. Accordingly, 27Th Screening Committee also recorded in its minutes that the company has partly acquired land.
74. Further as earlier mentioned Ministry of Steel also in its communication dated 23.03.2005 sent to MOC subsequent to 27 th Screening Committee meeting held on 01.03.2005 mentioned that the company has acquired 10.8 acres of land and that correspondence CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 71 of 144 with the State Government of Jharkhand for allotment of 170.315 acres of land has been made by the company.
75. Thus in the aforesaid circumstances though it can not be stated that Ministry of Steel or Screening Committee, MOC were in any manner finally deceived or induced on account of any such claim made by the company regarding land in its possession but it can not be denied that the claim of the company as regard land in its possession has all along been ambiguous. In fact my subsequent discussion will further show that the accused persons in fact made misleading and false claims even as regard other issues also so as to present a higher status/stage of preparation towards establishing the proposed end use project.
76. Thus in the overall facts and circumstances of the case as discussed above, though it can be stated that the claims of M/s PSPL as regard land in its possession were ambiguous but the same can not be termed as misrepresentation in the strict sense of the term. In fact towards the final submission of information regarding the latest status/stage of progress made towards establishing the end use project it can not be stated that there was any misrepresentation or concealment of information by the company as regard land in its CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 72 of 144 possession either to MOC or to Ministry of Steel.
77. The prosecution thus in my considered opinion has not been successful in proving that the accused persons misrepresented either to Ministry of Steel or to MOC regarding land acquired by it for establishing the proposed sponge iron project.
II. Whether there has been a misrepresentation regarding existing capacity and availability of coal linkage.
78. It has been alleged by the prosecution that in the agenda form submitted before 27th Screening Committee by applicant company M/s PSPL, the following claims were made regarding proposed end use project:
III Proposed End Use (Project) √ Power Iron Sponge Cement Linkage Iron Quantity Grade Source (MW) mtpa 10 Existing Capacity 0.036 .. 0.043 F Mahandi 11 Proposed Capacity 0.36 .. .. .. ..
12 Ultimate Capacity (Total) 0.4 .. .. .. ..
13 Location (District State) At Lohardaga, Jharkhand.
It was thus submitted by prosecution that as the end-use project for which allocation of captive coal block was sought was not CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 73 of 144 yet established so the question of there being any existing capacity did not arise. It was also submitted that no such coal linkage was even available to the applicant company for its proposed project to be established at Lohardaga and thus the said information submitted by the applicant company was also false.
79. On the other hand Ld. Counsel Sh. P.K. Dubey strongly opposed the submissions made by the prosecution stating that both Ministry of Steel and MOC knew well that a group company i.e. M/s Pawanjay Sponge Iron Ltd was having its existing running sponge iron plant in Orissa and for which it was also having a coal linkage from Mahanadi Coalfield Ltd. It was submitted that from the documents/notings available in the files of MOC and that of Ministry of Steel, it is clear that both the Ministries knew very well about the availability of such a coal linkage to a group company in Orissa. It was also submitted that as in the agenda form and in all earlier communications sent to MOC or Ministry of Steel it was stated that the company has been incorporated in the year 2003 only and the sponge iron plant is yet to be established so the question of there being any misrepresentation did not arise.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 74 of 144 MY DISCUSSION
80. At the outset, I may state that certainly the correctness of the claim of Ld. Defence Counsel that both Ministry of Steel and MOC were well aware of availability of such a coal linkage to a company called M/s Pawanjay Sponge Iron Ltd. is borne out from the records of both MOC and Ministry of Steel. In this regard it would be worthwhile to refer to note dated 17.02.2005 [available at note sheet page 7 in Ministry of Steel file Ex. P-7 (colly) (D-10)] and wherein it has been recorded that the company has coal linkage @ 43000 TPA for their 2 X 50 TPD sponge iron kiln at Rourkela location. It was also mentioned that the company has applied for coal linkage for their third sponge iron kiln capacity of 50 TPD for the same location. The said noting was followed by another note dated 21.02.2005 of PW-8 D. Kashiva, Joint Industrial Advisor, MOC. In the said note, it was mentioned that company M/s PSPL has been incorporated in the year 2003. It was also mentioned that the group is involved in the mining of bauxite, dolomite, lime stone and is also having coal based sponge iron plant in Orissa. It was pursuant to the said note which was finally approved by Secretary, Steel that a communication dated 23.03.2005 was sent to MOC regarding the request of company M/s PSPL seeking CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 75 of 144 allotment of a captive coal block. Thus from the aforesaid notings recorded in the file of Ministry of Steel, it is clear that Ministry of Steel was well aware about the existing sponge iron plant of a company owned by the promoters of the applicant company at Rourkela, Orissa and was also aware that for the said sponge iron plant, the said company is having coal linkage of 43000 TPA.
81. As regard MOC, it would be worthwhile to refer to a communication sent by Sh. Sujit Gulati, Director, Ministry of Steel to Sh. P.R. Mondal of Coal India Ltd. (CIL) seeking information about the coal linkage available to various applicant companies whose applications were to be considered by the Screening Committee in its meeting to be held on 01.03.2005 [available at page 140 in file Ex. PW-7/H (colly) (D-18)] In reply thereto Sh. P.R. Mondal of CIL sent a fax message to Sh. Sujit Gulati, Director, Ministry of Coal on 24.02.2005 [available from page 141-142 in file Ex. PW 7/H (colly) (D-
18)]. In the said communication, the following information was mentioned against the name of M/s PSPL:
"Approved linkage of 43200 TPA exists from MCL, in the name of M/s Pawanjay Sponge Iron Ltd."
82. Thus from the aforesaid information received by Sh. Sujit CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 76 of 144 Gulati, Director, Ministry of Coal, on 24.02.2005 i.e. prior to the 27 th Screening Committee meeting held on 01.03.2005, it is clear that Ministry of Coal was also having information that a company M/s Pawanjay Sponge Iron Ltd is having coal linkage with it. In this regard if the minutes of 24th Screening Committee meeting held on 09.12.2004 wherein the application of M/s PSPL initially came up for consideration are again referred to then it is found that the Screening Committee was also well aware of the availability of such a coal linkage to another company of the promoters of M/s PSPL for their sponge iron plant in Orissa.
83. The relevant facts recorded in the minutes of 24 th Screening Committee meeting held on 09.12.2004 [available from page 20-31 in file Ex. PW 7/E (D-28)] as regard M/s PSPL read as under:
Name of applicant company: M/s Pawanjay Steel & Power Ltd.
Name of Block: Dumri, Brinda "Representative of the applicant stated that they have 60,000 tonnes per annum sponge iron plant in Orissa, for which they have also a long-term linkage." . . . . . . . .
. . . . . . . .
.. . . . . . .
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 77 of 144
84. Again when the application of company M/s PSPL came up for consideration before 27th Screening Committee in its meeting held on 01.03.2005 the following facts were interalia recorded as regard the availability of coal linkage:
"13. M/s Pawanjay Steel and Power Ltd.
M/s Pawanjay Steel and Power Ltd. has requested for the North Dhadu and Dumuri coal blocks to meet coal requirement for their 0.4 mtpa ultimate sponge iron capacity to be located at Lohar Daga in Jharkhand. They have an existing sponge iron capacity of 0.036 mtpa for which they have been granted coal linkage of 0.043 mtpa F-grade coal from the Mahanadi Coalfield Ltd. . . . . . . . . .. . . . . . .
.. . . . . .
. . . . . .
85. Thus from the aforesaid minutes of the two Screening Committee meetings and the communication dated 24.02.2005 sent to Sh. Sujit Gulati, Director, MOC by Sh. P.R.Mondal, CIL, it is clear that the Screening Committee and MOC both were well aware of the availability of such a coal linkage to a company M/s Pawanjay Sponge Iron Ltd. owned and promoted by the promoters of applicant company M/s PSPL.
Thus from the aforesaid circumstances it is clear that neither Ministry of Steel nor MOC or even Screening Committee at CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 78 of 144 any point of time was under a belief that the applicant company M/s PSPL was having any existing capacity at Lohardaga, Jharkhand or existing coal linkage for their proposed sponge iron project at Lohardaga, Jharkhand. In fact the minutes of 24 th and 27th Screening Committee as have been reproduced above further shows that the Screening Committee was well aware that the sponge iron plant at Lohardaga, Jharkhand is yet to be established.
86. It would be however worthwhile to mention over here that in the agenda form, the applicant company M/s PSPL was required to mention the details of the proposed end use project and not of the other companies owned or controlled by the promoters of M/s PSPL. To this extent the information mentioned in the agenda form was certainly wrong. The mentioning of said facts in the agenda form was thus certainly not as per the information sought by MOC in the prescribed proforma.
87. However once again we have a situation where the company M/s PSPL made ambiguous claims as regard the existing capacity of the end use project of M/s PSPL in the agenda form and also as regard availability of coal linkage to M/s PSPL, but in the view of the overall facts and circumstances as discussed above, it can not be CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 79 of 144 stated that the said claims acted as a misrepresentation either with Ministry of Steel or with MOC or with Screening Committee in any manner.
III. Whether the company misrepresented about placing of orders for procuring equipments for the proposed sponge iron plant at Lohardaga, Jharkhand.
88. It has been submitted by the prosecution that when during the course of processing of the application dated 05.06.2004 of company M/s PSPL in Ministry of Steel, further information was sought from the company about effective steps taken towards establishing the proposed end use project then accused Gyanchand Prasad Agarwal submitted a purchase order dated 08.09.2004 issued in favour of M/s Hari Machines Ltd under the signatures of PW-9 H.P. Pai for purchase of 4 kilns, coolers and other accessories. He also submitted a certificate of confirmation issued in this regard by A-4 S.K. Kanungo on behalf of M/s Hari Machines Ltd and as per which an amount of Rs. 10 lacs was stated to have been received from M/s Pawanjay Steel & Power Ltd. as advance payment in furtherance of orders of 4 sets of kilns, coolers and accessories for 100 TPD sponge iron plant placed by M/s PSPL. It has been further submitted that subsequently in the agenda form dated 10.02.2005 Ex. PW 7/J (D-21), as was CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 80 of 144 submitted before 27th Screening Committee by the company M/s PSPL, it was stated that orders have been placed for procuring equipments for the proposed end use project. It has been however submitted that during the course of investigation all such claims and the supporting documents submitted by A-2 Gyanchand Prasad Agarwal were found to be false. It was also submitted that PW-3 Sabyasachi Mishra, Chief Executive Officer M/s Hari Machines Ltd also stated that no such orders were ever received from M/s PSPL.
89. On the other hand Ld. Counsels for the accused persons strongly opposed the submissions of Ld. Sr. P.P. stating that the deposition of PW-3 Sabyasachi Mishra is not at all credible and even the record produced by him was also not reliable. It was submitted that PW-3 Sabyasachi Mishra admitted that they used to set off payment received on behalf of one company against the running account of another sister concern. It was thus submitted that prosecution has failed to prove beyond reasonable doubt that no such orders for procuring equipments was placed on Hari Machines Ltd.
MY DISCUSSION
90. In order to appreciate the present issue it will be worthwhile to CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 81 of 144 revisit certain facts.
91. As earlier mentioned vide letter dated 17.12.2004 accused Gyanchand Prasad Agarwal submitted certain documents as proof of effective steps having been taken by the company M/s PSPL in procuring equipments for the end use project to be established at Lohardaga, Jharkhand. Alongwith the said communication a letter dated 08.09.2004 Ex. PW 9/A [available from page 201-202 in file Ex. PW 8/A (colly) (D-10)] addressed to M/s Hari Machines Ltd purporting to be a purchase order issued on behalf of M/s PSPL under the signatures of PW-9 H.P. Pai was submitted beside copy of a confirmation letter dated 10.12.2004 allegedly issued by A-4 S.K. Kanungo acknowledging the receipt of said purchase order and advance payment of Rs. 10 lacs.
92. Before adverting further it will be appropriate to have a glance over the said two documents submitted by A-2 Gyanchand Prasad Agarwal. The letter dated 08.09.04 issued under the signatures of PW-9 H.P. Pai read as under:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 82 of 144 PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584 Ref : PSPL/HARI/P.O./03/2004-2005 Date : 08.09.2004 To HARI MACHINES LIMITED, RAJGANGPUR - 770 017 DIST: SUNDERGARH (ORISSA) KIND ATTENTION: Mr. SABYASACHI MISHRA/Mr. S.K. KUNANGO Dear Sir, With reference to the verbal discussion, you had with our Director, Sri Gyanchand Prasad Agrawal, we are pleased to release our Purchase order for manufacture & Supply of Kiln and Cooler arrangement and its accessories for 4 x 100 TPD Sponge Iron Plant.
SCOPE OF WORK Scope of work will include manufacture, fabrication & supply of Kiln & Cooler arrangement for 4 X 100 TPD kiln & coolers - complete set.
PRICE:
The total Ex-works price for manufacture and supply of four sets of 100 TPD Kiln & cooler arrangement along with accessories shall be Rs.1,73,00,000/- (Rupees One Crore Seventy Three Lakhs only) each.
Freight charges and Transit insurance upto our site shall be paid by us.
TAXES AND DUTIES:
All taxes and duties as applicable at the time of dispatch shall be borne by us.
DELIVERY PERIOD Delivery should commence from 01.04.2005 onwards and completed by 31 st October, 2005.
PAYMENT TERMS Token Adv. Rs.10,00,000/- (Rupees Ten Lakhs only) and the balance shall be paid against proforma invoice prior to dispatch.
Cont....P/2 Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected] CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 83 of 144 PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584 #2# INSPECTION Inspection will be carried out by us at your factory premises.
WARRANTY The equipment manufactured by you shall be warranted against any manufacturing defects within 12 (Twelve) months from the date of commissioning or 18 (Eighteen) months from the date of dispatch.
Thanking you, Yours faithfully, For Pawanjay Sponge Iron Limited Sd/-
(H.P. Pai) Director Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected]
93. The impugned confirmation letter dated 10.12.2004 issued under the signatures of A-4 S.K. Kanungo read as under:
Hari Machines Ltd Regd. Office & Works : Rajgangpur - 770017 (Orissa), India, Phone : EPABX (06624) 220141, 220161, Sales : 220165 Stores: 220160, Cable : Harimachine, Fax : (00624) 220151, e-mail : [email protected], [email protected] ______________________________________________________________________ 10 Dec 2004 TO WHOM IT MAY CONCERN This is to confirm that M/s Pawanjay Steels & Power Ltd., Upper Bazar, East Gola Road, Mahavir Chowk, Lohardaga, Jharkhand have placed order for four sets kiln, Cooler & accessories for 100TPD Sponge Iron Plant on us which will be dispatched as per our CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 84 of 144 delivery term of their purchase order. They have made us advance payment of Rs. 10 lacs against the said order and they will release further advance shortly as progress payment.
Their order is now being processed at a very fast pace in order to meet the delivery schedule of their purchase order.
Sd/-
(S.K. KANUNGO) for HARI MACHINES LIMITED Liaison Office : 12C, Stephen House, 4, B.B.D. Bagh, Kolkata - 700 001 Phone : 033 - 22487612, 2248 - 4451, Fax : 033 - 22487155, E-mail : [email protected] Internet : http://www.harimachines.com
94. A bare perusal of letter dated 08.09.04 Ex. PW 9/A shows that an order for manufacture and supply of kilns and coolers and its accessories for 4 X 100 TPD sponge iron plant was allegedly placed upon M/s Hari Machines Ltd. Similarly certificate of confirmation dated 10.12.2004 issued in this regard by A-4 S.K. Kanungo is also for 4 sets of kilns, coolers and accessories for 100 TPD sponge iron plant.
However in its communication dated 23.03.2005 Ex. PW 8/A-11 (D-10) vide which Ministry of Steel sent information to MOC about the effective steps taken by the company to establish the proposed end use project it was specifically stated by Ministry of Steel that the said claim of placing orders for 4 X 100 TPD sponge iron plant was contrary to the requirement mentioned in the project report wherein 3 kilns of 1.10 LTPA each capacity have been only envisaged.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 85 of 144
95. The relevant portion of the said communication dated 23.03.2005 Ex. PW 7/G-9 (D-8) sent by Ministry of Steel interalia read as under:
"5. To implement the above project, the company has taken following effective steps:-
• Filed IEM.
• Acquired 10.8 acres private land and has submitted the
correspondences with the State Govt. of Jharkhand regarding the allotment of 170.315 acres land.
• Signed MOU with the State Govt. of Jharkhand for putting up 2 LTPA sponge iron, 42,000 tpa steel melt shop involving a total investment of Rs. 200 cr.
• Placed orders of 4 x 100 TPD sponge iron kilns.
Note: This is contrary to the project report wherein 3 kilns of 1.10 LTPA each capacity have been envisaged. • Submitted a letter from Bank of India expressing their readiness to finance proposed greenfield project."
(Emphasis supplied)
96. The aforesaid fact duly stands corroborated from the feasibility report of the proposed end use project submitted by the accused persons with MOC or with Ministry of Steel and wherein also the proposed project was envisaged with only 3 kilns of 100 TPD each. Similarly in the correspondence sent by accused persons to Ministry of Steel dated 17.12.2004 Ex. PW 8/A-7 (colly) and alongwith which CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 86 of 144 the aforesaid purchase order and confirmation letter issued by A-4 S.K. Kanungo were submitted, the proposed DRI Plant of M/s PSPL was again stated to be comprising of 3 number of Rotary kilns of 1 lakh TPA capacity only. Accused Gyanchand Prasad Agarwal had also enclosed his bio-data [available from page 180-181 and also from page 195-196 in file Ex. P-7 (colly) (D-10)] alongwith letter dated 17.12.2004. In his biodata also accused Gyanchand Prasad Agarwal mentioned the profile of various companies/firms promoted by him. Therein also as regard M/s PSPL he again mentioned the project to be comprising of 3 number of rotary kilns of 1 lakh TPA capacity only.
Thus irrespective of the correctness or otherwise of the record produced by PW-3 Sabyasachi Mishra nothing at all has been explained by the accused persons as to in what circumstances when the proposed project at Lohardaga was to comprise of 3 number of rotary kilns only then why an order for procuring 4 number of rotary kilns, coolers and accessories was placed upon M/s Hari Machines Ltd for the said project. This fact in itself takes away the very basis beneath the arguments put-forth by Ld. Defence Counsels.
97. Apart from the aforesaid glaring ambiguity in the said purchase order or the confirmation letter there are number of other interesting CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 87 of 144 aspects which also raises grave shadows of doubts about the correctness or veracity of the said two documents produced by A-2 Gyanchand Prasad Agarwal.
It will be pertinent to mention that the purchase order dated 08.09.2004 Ex. PW 9/A as was submitted to Ministry of Steel was apparently the original purchase order itself and PW-3 Sabyasachi Mishra who was Chief Managing Director of M/s Hari Machines Ltd clearly stated that no such order was ever received by their company. Though one may argue that the document submitted to Ministry of Steel was the duplicate office copy which was also carrying original signatures of PW-9 H.P. Pai but neither any such endorsement of it being office copy has been mentioned on the said document nor during the course of recording of deposition of PW-9 H.P. Pai any such fact was put to him. Thus in these circumstances, there is no reason to believe that the letter submitted to Ministry of Steel was the office copy or that it was not the original letter itself which was signed by PW-9 H.P. Pai. Moreover, PW-9 H.P. Pai categorically stated that he was never employed with M/s PSPL. He also stated that he was working in M/s Pawanjay Sponge Iron Ltd i.e. a company owned by the family of A-2 Gyanchand Prasad Agarwal CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 88 of 144 and his son Umesh Chand Agarwal (A-3). He also stated that the letter dated 08.09.2004 was signed by him on the letter head of M/s PSPL at the asking of accused Gyanchand Prasad Agarwal. He further stated that after signing the letter he handed over the same to Sh. N.K. Singh, another employee of Sh. Gyanchand Prasad Agarwal and who in fact had brought the same to him for signing. He thus claimed complete ignorance as to what happened with the said letter subsequent to his signing the same. Further a perusal of letter dated 08.09.04 Ex. PW 9/A clearly shows that the same has been very cleverly drafted. While the said letter has been prepared on the letter head of M/s Pawanjay Steel & Power Ltd but the same was signed by PW-9 H.P. Pai as director of M/s Pawanjay Sponge Iron Ltd. Moreover in the entire body of the letter nothing at all has been mentioned as to on behalf of which company i.e. Pawanjay Steel & Power Ltd or Pawanjay Sponge Iron Ltd the said purchase order was being issued. It is also not ascertainable from the letter as to for which plant the equipment is sought to be procured or where the delivery of equipments is to be made, be it at Orissa where admittedly the sponge iron plant of M/s Pawanjay Sponge Iron Ltd existed or at Lohardaga, Jharkhand where the proposed sponge iron plant of M/s Pawanjay Steel and Power Ltd was proposed to be established.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 89 of 144 Thus apparently the entire communication has been consciously prepared in ambiguous terms.
98. Similar is the nature of language used in the confirmation letter dated 10.12.04 issued under the signatures of A-4 S.K. Kanungo.
The confirmation letter though states that order for four sets of kilns, coolers and accessories has been placed by M/s Pawanjay Steel and Power Ltd but it also is completely silent as to for which project the said purchase order has been placed or where the delivery of equipments is to be made. The words "Lohardaga, Jharkhand" have been mentioned only as address of the company M/s PSPL.
Yet another interesting aspect of the said document is that it is titled "To Whom It May Concern". It is beyond comprehension as to how such a confirmation letter dated 10.12.2004 was issued in rem by M/s Hari Machines Ltd. Any such confirmation of receiving the purchase order or the payment ought to have been in the name of the client company placing the order. Thus the said document perse does not inspire confidence and appears to have been got prepared solely with a view to support the false claim made by M/s PSPL to Ministry of Steel and subsequently before the Screening Committee, MOC.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 90 of 144
99. However during the course of investigation accused Gyanchand Prasad Agarwal on the asking of IO Inspector Manoj Kumar not only submitted the original confirmation letter dated 10.12.2004 issued by A-4 S.K. Kanungo but also stated that an advance amount of Rs. 10 lacs was paid against the purchase order. The said communication dated 31.03.2016 Ex. P-20 (Colly) has been admitted u/s 294 Cr.PC by A-1 M/s PSPL and A-2 Gyanchand Prasad Agarwal. Furthermore A-3 Umesh Prasad Agarwal also during the course of investigation submitted to IO Inspector Manoj Kumar a letter dated 12.07.2016 stating that the payment of Rs. 10 lacs was made to M/s Hari Machines Ltd. on 17.06.2004 vide a cheque issued from the bank account of their sister concern namely M/s Pawanjay Sponge Iron Ltd. The said letter dated 12.07.2016 addressed to IO Inspector Manoj Kumar was admitted u/s 294 Cr.PC by A-3 Umesh Prasad Agarwal and has been exhibited as Ex. P-21 (D-45).
100. Accordingly in the aforesaid circumstances it was for the accused persons to explain at least by preponderance of probabilities as to how and in what circumstances the purchase order dated 08.09.2004 signed by PW-9 H.P. Pai or the confirmation letter dated 10.12.2004 issued by A-4 S.K. Kanungo allegedly on behalf of M/s CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 91 of 144 Hari Machines Ltd pertained to the proposed sponge iron project of M/s PSPL to be established at Lohardaga, Jharkhand.
101. As regard the deposition of PW-3 Sabhyasachi Mishra or the record produced by him, I may however state that in his cross- examination, nothing could be elicited or brought on record which could raise any doubts about the correctness or veracity of his deposition or as regard the record produced by him.
PW-3 Sabyasachi Mishra was the Chief Executive Officer of M/s Hari Machines Ltd. In his deposition he categorically stated that as per the register maintained in the company containing details of all the orders received by the company during the year 2004, no order of any nature whatsoever was received from company M/s PSPL. He however deposed that earlier during the year 2003-04 Gyanchand Prasad Agarwal had placed orders with their company for supply of 50 TPD kilns for their sponge iron project at Kumarmunda near Rourkella for his company Pawanjay Sponge Iron Ltd. He further stated that the said order was complied with and necessary equipments were supplied to Pawanjay Sponge Iron Ltd and that subsequently Pawanjay Sponge Iron Ltd had placed order for supply of another 2 X 100 TPD kilns and for the same an advance amount of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 92 of 144 Rs. 10 lacs was also paid to their company. He however further stated that the said order was never processed as neither Pawanjay Sponge Iron Ltd ever asked their company to process the order nor for such a small advance amount order for such a large quantity could have been processed. He further stated that despite their request no further advance payment was made by M/s Pawanjay Sponge Iron Ltd and accordingly the said amount of Rs. 10 lacs was adjusted against the earlier running order of 50TPD kilns which was being processed by their company.
102. PW-3 Sabyasachi Mishra further claimed complete ignorance as regard M/s PSPL and stated that they at M/s Hari Machines Ltd never had any business transaction with the said company. He also deposed that whenever any confirmation of receipt of order is issued by their company to any client/customer then the same is sent in the form of a letter duly addressed to the concerned customer and also mentioning over there the order number against which any payment has been received beside the cheque details or demand draft details vide which the payment has been received. He thus stated that the letter dated 10.12.2004 titled "to whom it may concern" as has been issued under the signatures of A-4 S.K. Kanungo could have never CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 93 of 144 been issued by their company upon receipt of any purchase order. He also specifically denied having received any purchase order dated 08.09.04 Ex. PW 9/A (D-10) from M/s PSPL.
103. In his cross-examination, Ld. Defence Counsels however pointed out various entries in the order booking register for the year 2004 wherein the word "verbal" was mentioned against certain entries and thus the claim of the witness as was stated by him in his examination-in-chief that company M/s Hari Machines Ltd used to process any order only upon receipt of written purchase orders alongwith advance payment was sought to be contradicted. However the witness explained that such entries pertaining to verbal requests were made usually with respect to any order for spare parts received from any existing client. He explained that many times when the production in any company used to be stopped on account of non- availability of any spare part then a call used to be made by the client in the nature of SOS and such verbal requests were also often followed by written purchase orders. Certain entries were also pointed out in the order booking register by Ld. Defence Counsels wherein there was no mention of any advance having been received or entry qua any purchase order was found to have been made prior to the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 94 of 144 purchase order date and to which the witness stated that normally the practice followed by them was to make entry only upon receipt of a purchase order but at times entries used to be also made upon receipt of any letter of intent from the client concerned. Similarly he also explained that entries qua some of the purchase orders were made much later than the date mentioned in the purchase order as on certain instances the payment in respect of such purchase order must have been received at a later date.
104. The purpose of mentioning all the aforesaid portions of the deposition of PW-3 Sabyasachi Mishra is primarily to show that nothing substantial could come out in the cross-examination of the witness which could either raise even any reasonable doubt about the correctness or veracity of his deposition or as regard the record produced by him.
105. A-4 S.K. Kanungo in his defence also examined DW-1 Ranka Nidhi Manasingh who also was an ex-employee of M/s Hari Machines Ltd. The said witness stated that he used to work as a Production Engineer in M/s Hari Machines Ltd. at Rajgangpur, Orissa. He deposed that whenever any client company used to place any purchase order with their company then the Planning and CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 95 of 144 Coordination Department of the company used to generate work order on the basis of said purchase order. He further stated that a meeting used to be held in between various departments of the company such as Planning and Coordination Department, Production Department, Sales Department and Quality Assurance Department. He deposed that in the said meeting, chaired by Managing Director of the company, it used to be decided as to how any given order received by the company is to be processed. He also deposed that in one such meeting the Managing Director had informed that an advance payment of Rs. 10 lacs has been received from M/s PSPL for 4 sets of kilns coolers and accessories for 100 TPD sponge iron plant and that he directed all to work at a fast pace to deliver the machine.
However it will be worthwhile to point out at this stage that in the cross-examination of PW-3 Sabyasachi Mishra, no such facts as were deposed to by DW-1 Ranka Nidhi Manasingh were put. It was also not even suggested to him that any such meetings in between various departments of the company M/s Hari Machines Ltd. used to be held upon receipt of any purchase order. No question was even asked about generation of any work order on the basis of any such purchase order. Moreover in view of the categorical deposition of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 96 of 144 PW-3 Sabyasachi Mishra that no confirmation letter of the nature of letter dated 10.12.2004 [Part of Ex. P-20 (colly) (D-44)] used to be issued by M/s HML qua any Client nothing at all was even asked from DW-1 Sh. Ranka Nidhi Manasingh as to whether such kind of confirmation letters used to be issued by M/s HML or not. No doubt the witness upon being shown confirmation letter dated 10.12.04 identified the signatures of A-4 S.K. Kanungo upon it but nothing at all was asked from the witness as to whether such kind of confirmation letters in rem used to be issued by M/s Hari Machines Ltd or not. In fact in his cross-examination DW-1 Ranka Nidhi Manasingh stated that A-4 S.K. Kanungo used to report to PW-3 Sabyasachi Mishra and also that there was no direct link between the production department i.e. where DW-1 Ranka Nidhi Manasingh was working and the sales department of the company where A-4 S.K. Kanungo was working. He also stated that any order, used to be first of all received at the reception in their company and from there it used to be marked to Sales Department and thereafter only it used to travel to planning department for generation of work order. He also claimed ignorance as to when and by what mode any payment qua the impugned purchase order Ex. PW 9/A dated 08.09.2004 was received in their company.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 97 of 144
106. Thus in the light of my aforesaid discussion it is clear that had all such facts were put to PW-3 Sabya Sachi Mishra then his response to the same would have made the things clear. As no such facts were put to PW-3 Sabyasachi Mishra so the only inevitable conclusion is that the same are an after-thought. Thus in these circumstances the deposition of DW-1 Ranka Nidhi Manasingh does not inspire any confidence and clearly appears to be an after-thought.
107. However at the cost of repetition, it would be worthwhile to mention that the accused persons have failed to show even by preponderance of probabilities that the impugned purchase order dated 08.09.2004 and the confirmation letter dated 10.12.2004 pertains to the proposed sponge iron plant of M/s PSPL to be established at Lohardaga in Jharkhand.
108. In view of my aforesaid discussion, it is thus clear that the documents submitted by Gyanchand Prasad Agarwal to Ministry of Steel alongwith his communication dated 17.12.2004 regarding orders having been placed with M/s Hari Machines Ltd for procuring equipments for the sponge iron plant and the consequent confirmation letter dated 10.12.04 allegedly issued by A-4 S.K. Kanungo were false documents having been prepared and provided CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 98 of 144 to Ministry of Steel solely with a view to deceive it and induce it to make a recommendation to MOC in favour of M/s PSPL for allotment of a captive coal block.
Consequently the information furnished in this regard in the agenda form Ex. PW 7/J (D-21) that order for procuring of equipments has been placed was also false. The accused persons thus clearly misrepresented both before Ministry of Steel as well as Screening Committee, MOC with a view to procure allocation of a captive coal block in favour of M/s PSPL. The purpose was once again to present a higher status/stage of preparation towards establishing the proposed end use project.
IV. Whether company M/s PSPL misrepresented about its financial strength in the agenda form submitted to the Screening Committee.
109. It has been submitted by Ld. Sr. P.P. that in the agenda form Ex. PW 7/J (D-21) submitted on behalf of M/s PSPL, the figures qua the financial strength of the company were wrongly mentioned. It was submitted that while the applicant company M/s PSPL had no turn- over or annual profit for the last three years or net-worth as on 31.03.2004 but still with a view to deceive MOC, Government of India CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 99 of 144 by presenting a higher status/stage of preparedness towards establishing the end-use plant, the accused persons deliberately mentioned the figures of financial strength of companies owned or promoted by A-2 Gyanchand Prasad Agarwal or A-3 Umesh Chand Agarwal.
110. On the other hand Ld. Counsels for the accused persons submitted that as during the course of processing of their application in Ministry of Steel, information about the group companies was sought including information about the financial strength of the group companies so under that belief only, information about the group companies was provided in the agenda form also. It was however submitted that during the course of investigation, CBI could not find anything wrong in the said figures i.e. as regard the figures of financial strength of the group companies mentioned in the agenda form. It was also pointed out that in the agenda form itself it was mentioned that the applicant company has been incorporated on 07.07.2003 only and thus in view of the said fact there could not have been any such annual turn over or annual profit for the past three years or net-worth as on 31.03.2004.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 100 of 144 MY DISCUSSION
111. In order to appreciate the aforesaid issue it would be worthwhile to first refer to the information as was asked for by MOC from the applicant companies and also the information as was submitted by M/s PSPL in the agenda form: The relevant portion of the agenda form read as under:
TRACK RECORD OF THE APPLICANT.
4 Date of Incorporation as a company under the Companies Act 7 July' 2003.
5 Core Business Iron Ore Mining, Sponge Iron.
6 Since (Years) 5 Years.
7 Highest Annual Turnover in the last 3 years (Rs. In crore) 14 cores (2004-05 upto 10-2-05 - 27 Cores).
8 Highest Annual Profit in lat 3 Years (Rs. In crore) 1.66 cores.
9 Networth (as on) 31st March 2004 (Rs. In crore) 7.5 cores.
112. Prosecution in order to substantiate its claim that the figures of financial strength mentioned in the agenda form were not of the applicant company but that of other companies/entities owned and controlled by A-2 Gyanchand Prasad Agarwal or A-3 Umesh Chand CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 101 of 144 Agarwal, examined PW-13 G.R Paliwal, a qualified Chartered Accountant. He had retired as Deputy General Manager (Finance) Steel Authority of India Ltd. During the course of investigation he had calculated the net-worth of various companies which were claimed to be group companies by the accused persons. However I do not intend to go into the issue as to whether all such entities could have been termed as group companies of applicant company M/s PSPL or not or whether the net-worth of the said entities as was calculated by PW-13 G.R. Paliwal during the course of investigation was correct or not as it is not in dispute on the part of accused persons that the figures of financial strength as were mentioned in the agenda form were not of the applicant company M/s PSPL. Thus the short issue which is left for consideration is whether the information mentioned in the agenda form in this regard can be termed as a misrepresentation or not on the part of the accused persons.
113. From a bare perusal of the agenda form, it is clear that information qua the financial strength was sought only as regard the applicant company. In fact in the entire agenda form at no place any information about the group companies was asked for and all the information was required to be furnished for the applicant company CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 102 of 144 only. Thus there is no reason as to why any information other than that of applicant company was to be furnished in the agenda form. Thus the submission of Ld. defence Counsel that information about group companies was furnished on the assumption that earlier Ministry of Steel had also sought information about group companies is perse a lame excuse or is merely a feeble attempt to cover up the earlier deliberate misrepresentations.
114. In fact the intention of the accused persons in furnishing such inflated figures as that of applicant company becomes apparent when the same are read and considered in the light of guidelines issued by MOC governing inter-se priority of the applicant companies.
115. As per guidelines which were issued by MOC, governing allocation of captive coal blocks, the following factors were relevant for deciding the interse priority for allocation of a given coal block:
Additional Guidelines for allocation of Captive Blocks and guidance to applicants.
1.) . . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 103 of 144
13.) Inter-se-priority for allocation of a block among competing applicants for captive coal blocks may be decided as per the following guidelines.:-
1. Main factors to be considered:-
• Suitability of coal grade in the block.
• Techno economic viability/Feasibility of the project.
• Status/stage/level of progress and state of preparedness of
the project.
• Track record of the applicant.
• Recommendation of the concerned Administrative Ministry
and the views of the concerned State Govt.
• The views of the concerned State Governments.
• Matching of requirement of the applicant with the
mineable reserves available.
2. All factors above being equal, from the coal mining development and conservations point of view, the larger the per annum extraction planned the higher shall be the priority.
(Emphasis supplied)
116. Thus from the aforesaid guidelines it is clear that Techno Economic viability/feasibility of the project, track record of the applicant, status/stage/level of progress and state of preparedness of the project were important factors to be considered by the Screening Committee for deciding the interse priority amongst various applicant companies for allocation of a given coal block. Thus in these circumstances when the aforesaid information so furnished by the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 104 of 144 applicant company is considered then there is no reason for this Court to hold that such an information was either inadvertently furnished or was furnished under some misconception or that the same does not amount to mis-representation. In fact if the said wrong information about the financial strength of the company is further considered alongwith the other information mentioned in the agenda form and which as discussed above was also found to be wrong then the only inevitable conclusion arising is that the accused persons furnished such wrong information solely with a view to present a better status/stage/level of preparedness towards establishing the proposed end use project and also a better financial capability to establish the said project.
117. In view of my aforesaid discussion it is thus clear that the figures of financial strength as were mentioned in the agenda form by A-2 Gyanchand Prasad Agarwal were clearly mentioned with a view to bolster the claim of company M/s PSPL so as to procure allocation of a captive coal block in favour of M/s PSPL.
Accordingly I hold that accused persons misrepresented about the financial strength of the applicant company in the agenda form as was submitted to 27th Screening Committee.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 105 of 144 V. Whether the company M/s PSPL misrepresented about clearances applied for.
118. It has been argued by Ld. Sr. P.P. that in the agenda form dated 10.02.2005 submitted to 27th Screening Committee, the company stated that the clearances have been applied for. It was submitted that during the course of investigation it was found that the most important clearance i.e. environmental clearance was not yet even applied for by the company till that time. It has been thus submitted that the company misrepresented on the said count also.
119. On the other hand Ld. Counsel Sh. P.K. Dubey strongly opposed the submissions of Ld. Sr. P.P. stating that at no point of time either MOC or Ministry of Steel or Government of Jharkhand ever stipulated that any particular nature of clearance was essential to be obtained before either applying for allotment of a captive coal block or before actual allotment of a captive coal block by MOC in favour of any applicant company. As regard the environmental clearance, it was submitted that PW-5 Dr. Motipalli Ramesh who was an officer of Ministry of Environment, Forest and Climate Change, Government of India deposed that there was no requirement for even applying for environmental clearance for the proposed end use project either CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 106 of 144 before applying for allocation of a captive coal block or before actual allocation of a captive coal block. The submissions of Ld. Sr. P.P. were thus stated to be misconceived.
MY DISCUSSION
120. At the outset, I may state that I find myself in complete agreement with the submissions of Ld. Counsel for the accused persons. Undoubtedly in the agenda form it has been stated that the clearances for the proposed end use project have been applied for. However nothing could be shown during the course of trial as to whether any particular nature of clearance be it water clearance, electricity clearance or environmental clearance was essential to be applied for before any company could submit its application to MOC seeking allocation of a captive coal block. Nothing could even be shown that any such clearance was required before MOC could allocate a captive coal block in favour of the company.
121. In fact PW-11 IO Insp. Manoj Kumar also in his cross- examination stated that he did not remember as to what all clearances were applied for by the company or were obtained by it. He also claimed complete ignorance as to whether the necessary CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 107 of 144 water and electricity clearances were obtained by the company or not. He also stated that no rule or regulation or notification came to his notice during the course of investigation which mandated that all or any particular nature of clearance ought to have been obtained by an applicant company before it may apply for allocation of a captive coal block. Further more PW-5 Dr. Motipalli Ramesh also did not state anything that the environmental clearance to be obtained from Ministry of Environment, Forest and Climate Change, Government of India, was a pre-condition for an applicant company to apply to MOC for seeking allocation of a captive coal block or that no such coal block could have been allocated by MOC if any specific clearance was not applied for or obtained by the applicant company.
122. It has also come on record during the course of trial that before submission of agenda form dated 10.02.2005, the company M/s PSPL had applied for water and electricity clearances to the concerned departments of Government of Jharkhand and thus the claim made in the agenda form that clearances have been applied for can not be termed in any manner as wrong.
123. In view of my aforesaid discussion, I am thus of the considered opinion that the prosecution has miserably failed in proving the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 108 of 144 present allegation that the company M/s PSPL had misrepresented in any manner by stating in the agenda form that the clearances for the proposed end use project have been applied for.
VI. The reason for which all such ambiguous and false claims were made.
124. In the light of my aforesaid discussion it becomes important to first examine as to why the accused persons chose to make such false claims as regard the financial status of M/s PSPL or that orders for procuring equipments for the proposed end use project have been placed and also supported the said claim with false documents. It also needs to be examined as to why ambiguous claims as regard land in possession of the applicant company or the existing capacity of the end use project were made both to Ministry of Steel and to Ministry of Coal.
125. In this regard it will be worthwhile to first refer to the guidelines issued by MOC governing allocation of coal blocks. As per PW-7, Sh. Prem Raj Kuar, the then Section Officer, CA-1 Section, MOC , guidelines governing allocation of coal blocks titled "Additional Guidelines for allocation of captive blocks and guidance to applicants"
were approved by the Minister of State for Coal, Sh. Karia Munda.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 109 of 144 The said guidelines stands proved on record as Ex. PW-7/D (available from page No. 18 to 22 in file D-23). He also stated that as per the directions of the then Coal Secretary, Dr. P.K. Mishra, the said additional guidelines were decided to be made applicable for allocation after 04.11.2003. The said guidelines also laid down the criteria for deciding the interse priority amongst different applicant companies for allocation of a given coal block. The guidelines were also duly uploaded on the website of MOC.
The relevant portion of the said guidelines read as under:
"Additional Guidelines for allocation of Captive Blocks and guidance to applicants.
"1.) Applications for allocation/reservation of coal blocks for captive mining for the specified end uses shall be made to the Screening Committee in the Ministry of Coal in five copies. The application shall be accompanied by the following in addition to any other relevant documentation that the applicant may submit. • Certificate of registration showing that the applicant is a Company registered under S.3 of the Indian Companies Act. This document should be duly signed and stamped by the Company Secretary of the company.
• Document showing the person/s, who have been authorized to sign on behalf of the applicant Company while dealing with any or all matters connected with allocation of the sought coal block/s for captive mining with the Government/its agencies. This document should be duly signed and stamped by the Company Secretary of the Company. • Certified copy of the Memorandum and Articles of Association of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 110 of 144 applicant company and the last 3 years audited annual accounts/reports.
• Line of business and track record of the applicant company. • The status and stage of the proposed end use project for which the coal block is sought in terms of land, finance, equipment, other required inputs, technical know how etc. The applicant may also submit a project report. If such a project report is appraised by a lender the same may also be submitted.
• Detailed schedule of implementation for the proposed end use project and the proposed coal mining development project in the form of bar charts of Harmonographs.
• Details of coal linkages applied for or granted to the applicant company including those for the end use project for which the coal block is sought.
• Scheme for disposal of unusable containing carbon obtained during mining of coal or at any stage thereafter including washing. This scheme must include the disposal/use to which the midlings, tailings, rejects etc from the washery are proposed to be put. This is intended to avoid the applicant approaching the Government at a latter stage for seeking permission to sell such materials.
Applications without the above accompaniments would be treated as incomplete and would not be processed further.
*Firm tie up for raw material inputs like Iron ore, limestone etc in case required in the end use project, would be a perquisite for considering the application for allocation of Captive Coal mining block.
2.) . . . . . .
3.) . . . . . .
4.) . . . . . .
5.) . . . . . .
6.) . . . . . .
7.) . . . . . .
8.) . . . . . .
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 111 of 144
9.) . . . . . .
10.) . . . . . .
11.) . . . . . .
12.) . . . . . .
13.) Inter-se-priority for allocation of a block among competing applicants for captive coal blocks may be decided as per the following guidelines.:-
1. Main factors to be considered:-
• Suitability of coal grade in the block.
• Techno economic viability/Feasibility of the project. • Status/stage/level of progress and state of preparedness of the project.
• Track record of the applicant.
• Recommendation of the concerned Administrative Ministry and the views of the concerned State Govt.
• The views of the concerned State Governments. • Matching of requirement of the applicant with the mineable reserves available.
2. All factors above being equal, from the coal mining development and conservations point of view, the larger the per annum extraction planned the higher shall be the priority.
3. All factors above being equal, order of priority based on status of the applicant would be as under:
i. Central Govt, PSU for captive use.
ii. State Govt. PSU for captive use.
Iii. Private sector captive use.
4. Order of priority in case of captive mining, all factors being equal, on the basis of end-use amongst (I), (ii) and (iii) in 3 above may be as follows:
a) Power/Independent Power producer.
b) Iron & Steel with captive power plant & washery.
c) Cement with captive power plant and washery.
d) Iron & steel without captive power plant/washing
e) Cement without captive power plant."
(Emphasis supplied) CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 112 of 144
126. A bare perusal of the aforesaid guidelines clearly show that documents relating to status and stage of the proposed end use project qua which the coal block was sought in terms of land, finance, equipments, other required inputs and technical know how etc were to be filed alongwith the application form. The applicants were also required to submit a project report beside submitting detailed schedule of implementation of the proposed end use project and the proposed coal mining development project. Similarly the interse priority guidelines also stated that the status/stage/level of progress and state of preparedness of the project were relevant factors to be considered. Various other factors such as suitability of the coal grade in the block, tehcno economic viability/feasibility report of the project and track record of the applicant were some other relevant factors to be considered by the Screening Committee beside recommendation of the concerned Administrative Ministry and that of the State Government.
127. Thus, it does not require any far-fetched argument to appreciate that all such highly inflated claims cumulatively had the effect of showing a higher level of preparedness qua status/stage/level of progress and state of preparedness of the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 113 of 144 proposed end use project for which allocation of a coal block was being sought for. The accused persons wanted to leave no stone unturned in ensuring that their application is given a higher priority by the Screening Committee as compared to the application of any other company. They made both Ministry of Steel and Screening Committee, Ministry of Coal believe in their such inflated and false claims showing higher level of status/stage/level of progress and state of preparedness of their end use project knowing fully well that the claims being made are false.
VII. Whether all such claims were made by the accused persons with a dishonest intention.
128. As already discussed at length, the various claims such as orders having been already placed for procuring the equipments for the proposed sponge iron project or as regard financial strength of the applicant company made by the accused persons were false to their knowledge also. It has also been discussed that all such claims were made by the accused persons with the sole purpose to present a better status/stage/level of progress and state of preparedness towards establishing the proposed end use project. Thus the dishonest intention in making such highly inflated claims is writ large CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 114 of 144 on the face of record.
129. In fact, the mensrea on the part of accused persons in making both ambiguous and false representations right from the stage of submitting their application to MOC seeking allotment of a captive coal block or to Ministry of Steel so as to procure a recommendation to MOC in favour of company M/s PSPL for allotment of a captive coal block is also evident from the fact that the accused persons had complete knowledge that all such claims/representations were false. The submission of false documents to Ministry of Steel so as to also support such false claims further clearly establishes the mensrea on the part of accused persons in making all such claims.
130. Thus the dishonest intention on the part of accused persons in making the said misrepresentations/false claims stand categorically established on record. In this regard however it also needs to be examined at this stage as to whether such representations/false claims beside having been made with a dishonest intention were also fraudulently made or not.
131. Section 24 and Section 25 IPC respectively define the words "dishonestly" and "fraudulently" as under:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 115 of 144 "24. "Dishonestly".--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly".
25. "Fraudulently".--A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise."
132. Though the said two concepts i.e. "dishonestly" and "fraudulently" have been extensively dealt with by Hon'ble Supreme Court in a number of cases but it will be appropriate to refer to the observations of Hon'ble Supreme Court in the well known case i.e. Dr. Vimla Vs. Delhi Administration AIR 1963, SC 1572 wherein the basic ingredients of the two acts have been delineated.
133. Hon'ble Supreme Court after extensively referring to various case law on the issue, observed that while the definition of "dishonestly" involves a pecuniary or economic gain or loss but as regard "fraudulently", it is primarily the intent to defraud which is an important ingredient. The word "defraud" includes an element of deceit. It was also observed that by way of their very definition as provided under IPC, the word "fraudulently" by its construction excludes the element of pecuniary economic gain or loss. It was observed that if the expression "fraudulently" were to be held, to involve the element of injury to the persons or the persons deceived, CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 116 of 144 it would be reasonable to assume that the injury should be something other than pecuniary or economic loss. Though almost always an advantage to one causes loss to another and vice-versa, it need not necessarily be so. It should be held that the concept of fraud would include not only deceit but also some injury to the person deceived. It would be thus appropriate to hold by analogy drawn from the definition of "dishonestly" that to satisfy definition of "fraudulently" it would be sufficient if there was a non-economic advantage to the deceiver or non-economic loss to the deceit. Both need not co-exists. It was also observed by Hon'ble Supreme Court that the Juxtaposition of the two expressions "dishonestly" and "fraudulently" used in the various sections of the Code indicate their close affinity and therefore the definition of one may give colour to the other. The aforesaid observations of Hon'ble Supreme Court culling out the difference between the words "dishonestly" and "fraudulently" have been followed consistently in all subsequent cases involving the issue of cheating.
134. Thus, when in the light of aforesaid observations of Hon'ble Supreme Court, the overall facts and circumstances of the present case are seen then it is crystal clear that the actions of the accused CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 117 of 144 persons in making all such false claims knowing them to be false were actuated with an intention to deceive MOC and thereby Government of India so as to procure allocation of a captive coal block. The intention to defraud on the part of accused persons is writ large on the face of record. It is also thus crystal clear that all the acts committed by the accused persons have been fraudulently done with a dishonest intention.
135. The next issue to be examined is whether all such fraudulent acts done with a dishonest intention to deceive MOC, Government of India actually had the effect of deceiving Ministry of Steel and Screening Committee, Ministry of Coal and thereby Government of India or not. In other words the accused persons by way of such fraudulent acts done with dishonest intention actually deceived Ministry of Steel and Screening Committee, Ministry of Coal or not and thereby inducing MOC, Government of India to deliver a property to them.
136. The question which however now arises for consideration is as to what is the meaning of the phrase "deceiving any person" as used in the definition of cheating as provided in Section 415 IPC.
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137. 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 S. 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.
138. 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.
139. 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.
140. Thus, it is clear that 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.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 119 of 144 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.
Further the explanation to Section 415 IPC states that a dishonest concealment of facts is a deception within the meaning of this section.
141. Coming to the facts of the case in hand, it is clear that the accused persons not only had a reason to believe but actually knew that the claims made by them qua their financial strength or as regard the status of placing orders for procuring equipments as was mentioned in the agenda form Ex. PW 7/J (D-21) were false. The accused persons knowing fully well that the said facts were false represented them to be true or as existing facts and thus misled firstly Ministry of Steel in believing the said claim to be true and thereby inducing it to make a recommendation in favour of M/s PSPL for CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 120 of 144 allocation of a captive coal block. Secondly they misled 27 th Screening Committee, Ministry of Coal, Government of India by deceiving it to believe in the existence of such claims as true and thereby inducing it to make a recommendation for allotment of a captive coal block in favour of M/s PSPL.
VIII Whether offence of cheating and dishonestly inducing delivery of property i.e. offence u/s 420 IPC stands proved.
142. In this regard it will be appropriate to first have a glance on the ingredients of the offence of cheating as defined in Section 415 IPC which are as follows:
"1. Deception of any person.
2. (a) Fraudulently or dishonestly inducing that person:
(i) to deliver any property to any person, or
(ii) to consent that any person shall retain any property, or
(b) Intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.
However when in pursuance of deception so exercised, any property is delivered, the said act of cheating becomes punishable u/s 420 IPC."
143. In the light of my aforesaid discussion regarding various misrepresentations/claims made by the accused persons and the reason or purpose for which the same were made coupled with the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 121 of 144 fact that not only 27th Screening Committee, MOC placed strong reliance upon all such false claims made by the accused persons believing them to be true but Ministry of Steel also while relying upon all such claims made by the accused persons chose to make a recommendation in favour of M/s PSPL to MOC for allotment of a captive coal block. The representative of Ministry of Steel supported the claim of M/s PSPL for allocation of a captive coal block initially in the 27th Screening Committee meeting and subsequently sent a communication dated 23.03.2005 Ex. PW 7/G-9 (D-8) to MOC supporting the recommendation made by 27 th Screening Committee in favour of M/s PSPL for allotment of a captive coal block.
144. In this regard it would be worthwhile for a ready reference to once again refer to the relevant portion of the minutes of 27th Screening Committee meeting as were pertaining to M/s PSPL. The same read as under:
"13. M/s Pawanjay Steel and Power Ltd.
M/s Pawanjay Steel and Power Ltd. has requested for the North Dhadu and Dumuri coal blocks to meet coal requirement for their 0.4 mtpa ultimate sponge iron capacity to be located at Lohar Daga in Jharkhand. They have an existing sponge iron capacity of 0.036 mtpa for which they have been granted coal linkage of 0.043 mtpa F-grade coal from the Mahanadi Coalfield Ltd. The company has in its presentation stated its turn-over, CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 122 of 144 profit and net-worth to be Rs. 14 crore. Rs. 4 crore and Rs. 7.5 crore respectively at the end of March 2004. The sponge iron project is proposed to be installed in three phases involving the time period of about 57 months from the date of allocation of block. They also propose to develop the captive mine in 36 months. As informed they had partly acquired land and water is plentifully available for their project from the adjoining rivers. Also orders for kilns etc. have already been placed and funds have been negotiated with the Bank of India for the project. Ministry of Steel and Govt. of Jharkhand representatives supported the allocation to the applicant."
145. Since MOC finally allotted the captive coal block based on the recommendations of the Screening Committee so it is clear that on account of the aforesaid acts, Ministry of Coal, Government of India stood cheated in allocating captive coal block in favour of applicant company M/s PSPL while relying on such false claims believing them to be true.
146. Having thus concluded that the offence of cheating stood committed, it becomes important to also see as to whether both directors of company M/s PSPL i.e. A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal can be held liable for the said offence or not. Though as regard A-2 Gyanchand Prasad Agarwal or as regard company M/s PSPL (A-1) neither any arguments have been put forth that he was not responsible for the various acts undertaken CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 123 of 144 by him on behalf of M/s PSPL in the entire coal block allocation process nor that the company A-1 M/s PSPL can not be held liable or bound by the said acts undertaken by A-2 Gyanchand Prasad Agarwal. However as regard A-3 Umesh Chand Agarwal it has been vehemently argued that since he was not looking after the day to day affairs of the company so he can not be vicariously held liable for any such acts committed by the company or by A-2 Gyanchand Prasad Agarwal.
147. I accordingly propose to examine the role played by A-3 Umesh Chand Agarwal so as to examine as to whether he too can be held liable for the impugned acts committed by company M/s PSPL, or not.
IX. Role of A-3 Umesh Chand Agarwal
148. Ld. Sr. P.P. strongly argued that company M/s PSPL was a closely held family company and both A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal were the active directors of the company. It was submitted that both A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal were actively involved in the processing of the application of company M/s PSPL in MOC and Ministry of Steel in order to procure allocation of a captive coal block.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 124 of 144 It was submitted that in response to letter dated 29.07.2004 Ex. PW 8/A-4 (D-10) written by Sh. D. Kashiva to M/s PSPL seeking further information pursuant to the application dated 05.06.2004 of the company received in Ministry of Steel, A-3 Umesh Chand Agarwal submitted a reply on behalf of company M/s PSPL vide letter Ex. PW 8/A-5 (colly) (D-10). The said letter signed by A-3 Umesh Chand Agarwal as Managing Director of M/s PSPL was received in Ministry of Steel on 31.08.2004. It was thus submitted that accused A-3 Umesh Chand Agarwal is also liable for all the acts of the company M/s PSPL. It was also submitted that subsequently A-3 Umesh Chand Agarwal also signed the share transfer agreement vide which the shares held by A-2 Gyanchand Prasad Agarwal were transferred to Rungta group.
149. On the other hand Ld. Defence Counsel strongly opposed the submissions of Ld. Sr. P.P. stating that the affairs of company M/s PSPL were looked after by A-2 Gyanchand Prasad Agarwal only and by virtue of the principle of vicarious liability, A-3 Umesh Chand Agarwal can not be held liable. It was submitted that prosecution has failed to lead any evidence on record which could show that A-3 Umesh Chand Agarwal was actively involved in the affairs of M/s CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 125 of 144 PSPL. It was submitted that the communication Ex. PW 8/A-5 (Colly) (D-10) was sent by A-3 Umesh Chand Agarwal to Ministry of Steel as A-2 Gyanchand Prasad Agarwal was not available at that time. In support of his submissions Ld. Counsel also relied upon the observations of Hon'ble Supreme Court as made in the case Sunil Bharti Mittal (Supra) that a director of a company can not be held liable on the basis of vicarious liability and in order to hold him liable some over act undertaken by him ought to be proved.
MY DISCUSSION
150. At the outset, I may state that Ld. Counsel Sh. P.K. Dubey is certainly right that a director of a company can not be held liable merely on the basis of vicarious liability. Managing director or a director of a company can not be simplicitor held liable for any acts committed by the company or any of its officers or other directors, unless evidence of some overt or covert act attributable to the said Managing Director or director comes on record.
151. In these circumstances what is thus required to be seen is as to whether prosecution has been successful in proving on record any overt or covert act attributable to A-3 Umesh Chand Agarwal which CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 126 of 144 may make him liable for any of the acts committed by or on behalf of A-1 M/s PSPL. In this regard I may state that Ld. Sr. P.P. has rightly pointed out that vide letter dated 29.07.2004 Ex. PW 8/A-4, written by Sh. D. Kashiva, Joint Industrial Advisor, Ministry of Steel, company M/s PSPL was asked to furnish further details in reference to its earlier application dated 05.06.2004 seeking allocation of a captive coal block. As earlier mentioned the sole purpose of submitting the said application dated 05.06.2004 to Ministry of Steel by A-2 Gyanchand Prasad Agarwal was to obtain recommendation from Ministry of Steel to MOC in favour of M/s PSPL for allocation of a captive coal block. The said communication was responded to by A-3 Umesh Chand Agarwal vide his letter Ex. PW 8/A-5 (colly) and which was received in Ministry of Steel on 31.08.04. Beside providing the necessary information in the said communication certain documents were also annexed with the same. It was pursuant to the said communication received in Ministry of Steel that further information was sought by Ministry of Steel vide letter dated 04.10.2004 Ex. PW 8/A-6 of Sh. D.S. Yadav, Section Officer. The said communication was thereafter responded to by A-2 Gyanchand Prasad Agarwal and further information and documents were submitted by him to Ministry of Steel.
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152. Coming back to the communication sent by A-3 Umesh Chand Agarwal, it will be pertinent to mention that as regard the queries/requirements raised by Sh. D. Kashiva in his letter dated 29.07.2004, i.e. information regarding suitability of proposed block/scope for further sub-blocking vis-a-vis coal requirement duly certified by Mining Consultant/Geologists, A-3 Umesh Chand Agarwal referred to the project report as was already submitted to Ministry of Steel by A-2 Gyanchand Prasad Agarwal. Towards the end A-3 Umesh Chand Agarwal also expressed hope that the details as mentioned in the said letter will fulfill the requirement of Ministry of Steel for allocating coal block for their project.
For a ready reference it will be worthwhile to reproduce the said communication sent to Ministry of Steel by A-3 Umesh Chand Agarwal. The same read as under:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 128 of 144 PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584 To, Mr. D. Kashiva, Joint Industrial Adviser, Ministry of Steel, Govt. of India, Udyog Bhawan, New Delhi.
Sub: Allocation of Captive Block for the proposed Iron Project.
Sir, With reference to your letter no. 21(14)/2004-IDW dated 29th July, 2004, we are furnishing below the information as required:-
1. Group turnover for the years 2001 - 02, 2002 - 03, 2003 - 04 is attached as Annexure - I.
2. Annual Reports for the last three years attached as Annexure - II.
3. Documents related to financial tie up with commercial Banks/Financial Institution is enclosed as Annexure - III.
4. Phased requirement of Coal.
Requirement of coal - 3 lac Ton DRI x 1.2 = 3,60,000 TPA (Considering 1.2 T of Coal is required for producing IT of DRI) R.O.M Coal assuming 35% Washary yield considering 5% shale in the R.O.M. Coal = 10,28,571 TPA Total R.O.M. Coal - 10,28,706 TPA Say - 1.80 Million TPA REQUIREMENT OF COAL FOR 30 YEARS - 1.08X30 = 32.4 Million TPA Reserves required are - 32.4/0.7 - 46.28 Million tons The usable ROM Coal will be 1028571 T containing
a) Clean Coal - 3,60,000 T with 25% ash (For DR Plant)
b) Middlings - 668571 T with 56% ash (for power plant) Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected] CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 129 of 144 PAWANJAY STEEL & POWER LTD.
Regd Office : East Gola Road, Upper Bazar, Lohardaga - 835302 (Jharkhand) Tel: 06526 - 224075, 224584
5. Out of 5 Coal blocks we are interested in Coal Block Chatti Bariatu details as per availability of data
- the reserve is as under -
Coal field - North Karanpura Block - Chatti Bariatu Area - 5.4 Square Km Total Coal Thickness - 25 - 35 m Likely Grade - D-G Reserve in (Mt) - 243
5. Coal Block is suitable for our plant after washing. Non washed Coal will be used in our Captive power plant.
6. The required details are given in our project report.
7. Documentary evidence for land acquisition etc is enclosed herewith as well as a copy of MOU is enclosed for your ready reference.
We hope the details as mentioned above will fulfill your requirement for allocation Coal Block for our project.
Thanking you, For Pawanjay Steel & Power Limited Sd/-
(Umesh Prasad Agarawal) Managing Director Correspondence Address : Y - 6, Civil Township, Rourkela - 769004. Tel: 0661 - 2400112, 2400652, 2401413, Fax: 0661 - 2400112, 24001413, E-mail: [email protected] (Emphasis Supplied)
153. Thus from the aforesaid act itself it is clear that A-3 Umesh Chand Agarwal was not only actively involved in the affairs of company A-1 M/s PSPL but was also pursuing the application of M/s PSPL submitted to MOC and Ministry of Steel for allocation of a captive coal block.
154. At this stage it would be also pertinent to mention that PW-9 CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 130 of 144 Sh. H.P. Pai who was director in another company, promoted by A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal stated that the company M/s PSPL was promoted by A-2 Gyanchand Prasad Agarwal and his family and was run by them. He also stated that company M/s PSPL was a closely held family company of A-2 Gyanchand Prasad Agarwal. His said contention was not at all disputed by the accused persons. Furthermore subsequent to the allocation of North Dhadu coal block in favour of company M/s PSPL by MOC, accused persons entered into an agreement dated 16.04.2004 with one R.S. Rungta and his family members and thereby 50% share holding in the company M/s PSPL held by A-2 Gyanchand Prasad Agarwal was transferred to said Rungta family. Not only the said share-holders agreement Ex. P-22 (colly) (D-46) was also signed by A-3 Umesh Chand Agarwal beside other share holders of the company M/s PSPL but the only consequence of the said transfer of shares was that on behalf of the family of A-2 Gyanchand Prasad Agarwal, the sole person controlling the affairs of company M/s PSPL was A-3 Umesh Chand Agarwal and none else.
155. However one may argue that the execution of the said share- holder's agreement was an act subsequent to allocation of coal block CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 131 of 144 in favour of M/s PSPL i.e. when the alleged common intention shared by the accused persons had already come to an end. In this regard it would be suffice to state that though the execution of the said share- holder's agreement was indeed a subsequent act but the purpose of referring to the same over here is not to infer any conclusion regarding existence of any criminal conspiracy in between the accused persons but to only show that accused Umesh Chand Agarwal was actively involved in the day to day affairs of company M/s PSPL and was thus responsible for various act committed by or on behalf of the company or in turn the company stood bound by the acts undertaken by accused Umesh Chand Agarwal.
156. At this stage it would be also pertinent to mention that during the course of investigation the said share holder's agreement and other information was also provided to IO Insp. Manoj Kumar by A-3 Umesh Chand Agarwal himself under his own signatures. I accordingly keeping in view the observations of Hon'ble Supreme Court as made in the case Sunil Bharti Mittal (Supra) am of the considered opinion that prosecution has been successful in proving on record that A-3 Umesh Chand Agarwal was actively involved in the day to day activities of company M/s PSPL and was also controlling CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 132 of 144 its affairs alongwith A-2 Gyanchand Prasad Agarwal. The liability of A- 3 Umesh Chand Agarwal thus cogently stands proved on record without there being any principle of vicarious liability.
X. Whether offence of criminal conspiracy i.e. offfence u/s 120-B IPC stands proved.
157. The next issue which now crops up for consideration is as to whether all the four accused persons entered into any criminal conspiracy or as to whether various acts committed by them were undertaken in furtherance of any criminal conspiracy, so as to cheat Ministry of Steel and MOC with a view to obtain allocation of a captive coal block in favour of M/s PSPL.
158. From the evidence led on record by the prosecution and as has been discussed herein-above, it is apparent on the face of record that the accused persons A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal acted in agreement so as to obtain allocation of a captive coal block in favour of M/s PSPL. Thus as both of them were working on behalf of company M/s PSPL so their acts binds the company and thus their criminal intent stands imputed to the company. Accordingly it stands well proved on record beyond shadows of all reasonable doubts that all the three accused persons CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 133 of 144 hatched a criminal conspiracy so as to cheat Ministry of Steel and MOC with a view to obtain allocation of a captive coal block in favour of M/s PSPL.
Furthermore the role played by A-4 S.K. Kanungo in issuing the impugned confirmation letter under his signatures and purporting it to be shown as having been issued on behalf of M/s Hari Machines Ltd. clearly shows that he too joined the said criminal conspiracy with a view to facilitate the other accused persons in procuring allotment of a captive coal block in favour of M/s PSPL on the basis of said false document so as to support their claim of a higher status/stage/level of preparedness towards establishing the proposed end use project.
159. Thus it is crystal clear that all the four accused persons entered into a criminal conspiracy so as to cheat Ministry of Steel and Ministry of Coal with a view to obtain allocation of a captive coal block in favour of M/s PSPL. In fact accused persons even succeeded in achieving the common object of the said criminal conspiracy by undertaking various illegal acts, as already discussed herein-above in detail.
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160. Having discussed and concluded that the offence of cheating and criminal conspiracy stands well proved beyond shadows of all reasonable doubts, I now intend to deal with some other miscellaneous issues raised by Ld. Counsels for the accused persons.
161. It was submitted by Ld. Counsel for accused persons that the prosecution has failed to examine any member of the Screening Committee who could have said that on account of the misrepresentations made by the accused persons they were deceived in parting away with the allocation of coal block in favour of accused company M/s PSPL. In this regard, it will be suffice to state that prosecution did examine PW-8 Sh. D. Kashiva who attended the Screening Committee meeting alongwith Sh. Deepak Anurag, Director Ministry of Steel, as a representative of Ministry of Steel.
162. Prosecution also examined PW-7 Sh. Premraj Kuar, the then Section Officer, MOC. He stated that he was associated with the processing of application of accused company in MOC and with the holding of the Screening Committee meetings. Further a perusal of the minutes of 27th Screening Committee meeting clearly shows that strong reliance was placed on the submissions made by the accused CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 135 of 144 persons by way of their agenda form and the presentation made before the Screening Committee as regard the advanced status/stage/level of preparedness and the progress made towards establishing the proposed end use project.
163. Thus by non-examination of any other member of the Screening Committee, no prejudice can be said to have been caused to the accused persons as minutes of the Screening Committee followed by approval from Minister of Coal and consequent issuance of letter of allocation speak for themselves.
164. It was also argued that prosecution has failed to prove that Ministry of Coal, Government of India was in any manner cheated as no misrepresentation was made to it.
165. In this regard it will be worthwhile to refer to certain observations of Hon'ble Supreme Court as made in the case Kanumukkala Krishnamurthy @ Kaza Krishnhamurthy Vs. State of Andhara Pradesh, AIR 1965 SC 333. The issue involved in the said case and the present case in hand are almost similar.
166. In the said case accused Kanumukkala Krishnamurthy had applied for appointment of Assistant Surgeon in Madras Medical CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 136 of 144 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 the appellant deceived the Government of Madras and dishonestly induced it to deliver something in the form of salary to the appellant. It is urged that the appointment to the post lay with the CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 137 of 144 Government and not with the Service Commission and that 'the Government would not have appointed him to the post in the Medical Service if it had not believed that the appellant possessed the necessary qualifications which, in his case, would be a degree of M.B., B.S., and that such a belief was entertained by the Government on account of the deception practised by the appellant in misrepresenting in his application that he held such a degree. On the other hand, it is contended for the appellant that the delivery of 'property' is to be by the person deceived, in view of the language of Section 415 I.P.C., and that the person deceived, if any, was the Service Commission and not the Government, the application containing the misrepresentation having been made to the Service Commission and not to the Government.
12. We accept the contention for the respondent. The appointments to the Medical Services are made by Government. The Service Commission simply selected the candidates and recommends their names to Government for appointment. This is clear from letter Exhibit P. 47 from the Secretary to the Service Commission to the Surgeon-General with the Government of Madras. The letter refers to the enclosing of a list containing the names and other particulars of the candidates who were successful at the examination, their names being arranged in order of merit. It refers to the relaxing of a certain rule in view of the paucity of candidates and states that they may be appointed, if necessary, pending receipt of the certificate of physical fitness and a further communication from the commission.
13. This is also clear from the provisions of the Government of India Act, 1935. Section 241 provided that appointments in connection with the affairs of a Province will be made by the Governor of the Province. Sub-Section (1) of Section 266 makes it a duty of the Provincial Public Service Commission to conduct examinations for appointments to the Services of a Province. Clause (a) of sub-s. (3) provides that the Provincial Public Service Commission shall be consulted on all matters relating to CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 138 of 144 methods of recruitment to civil services and for civil posts and cl.
(b) provides that it shall be consulted on the principles to be followed in making appointments to civil services and posts and on the suitability of candidates for such appointments. The Public Service Commission is constituted in pursuance of the provisions of Section 264. It is thus a statutory body and independent of the Government. This aspect of a Public Service Commission was emphasized in State of U.P. v. Manbodhan Lal Srivastava when considering the corresponding provisions of Article 320 of the Constitution. This Court said:
"Once, relevant regulations have been made, they are meant to be followed in letter and in spirit and it goes without saying that consultation with the Commission on all disciplinary matters affecting a public servant has been specifically provided for in order, first, to give an assurance to the Services that a wholly independent body, not directly concerned with the making of orders adversely affecting public servants, has considered the action proposed to be taken against a particular public servant, with an open mind; and, secondly, to afford the Government unbiased advice and opinion on matters vitally affecting the morale of public services".
It is in view of these provisions that the Public Service Commission invites applications for appointment to the various posts under the Government and subsequently makes a selection out of the candidates for appointment to those posts. The selection may be after holding a written examination or after interviewing candidates or after doing both. Names of the candidates selected are arranged in order of merit and forwarded to the Government. The Government is expected, as a rule, to make appointments to the posts from out of the list, in the same order. It has, however, discretion not to appoint any part of the persons so selected and securing a place in the order of merit which would have ordinarily led to his appointment.
14. Any representation made in an application for appointments is really a representation made to the Government, CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 139 of 144 the appointing authority, and not only to the Public Service Commission to which the application is presented and which has to deal with that application in the first instance. up to the stage ,of selection. The object of the applicant was to secure an appointment and not merely to deceive the Public Service Commission and sit at the examination or to appear at the interview. The deception was practised for that purpose and therefore there seems to be no good reason for holding that the deception came to an end once the Service Commission was deceived and had taken action on it as a result of the deception. A false representation in an application to the Service Commission continues and persists to be so till the application is considered by the final authority responsible for making the appointments and must therefore be deemed to be made to that final authority as well. In the instant case, when the recommendation of the Service Commission was sent to the Government, the qualifications of the recommended candidates, including the fact that the appellant had passed the M.B.,B.S. examination were mentioned. The Government therefore believed that the appellant possessed the degree of M.B.B.S., that as the Service Commission had scrutinized the application in that regard and had satisfied itself that the appellant possessed that degree. The consequence of that is that the Government were led to believe that fact, which thus became a false representation.
We are therefore of opinion that the appellant's mis- representation to the Service Commission continued and persisted till the final stage of the Government passing an order of appointment and that therefore the Government itself was deceived by the misrepresentation he had made in his application presented to the Service Commission."
(Emphasis supplied) CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 140 of 144
167. Thus on similar lines in the present case also, it is clear that the dishonest misrepresentation as were made by the accused persons before the Screening Committee continued even before Prime Minister as Minister of Coal also when he approved the recommendation of Screening Committee. The Screening Committee was admittedly constituted to deal with all applications received for allotment of various coal blocks and to make its recommendations thereafter. The Prime Minister as Minister of Coal was thus to act upon the said recommendations only. Accordingly the dishonest misrepresentation made before the Screening Committee continued even before the Prime Minister as Minister of Coal when he approved the recommendations of the Screening Committee.
168. Thus the person deceived in the present matter was primarily MOC, Government of India through the Screening Committee route. Certainly false representations were initially made before Ministry of Steel which coaxed it to make a recommendation in favour M/s PSPL to MOC for allotment of a captive coal block. Again believing the said false representations to be true, Screening Committee chose to make a recommendation in favour of M/s PSPL for allotment of a captive coal block. Thereafter, it was on the basis of said recommendation of CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 141 of 144 the Screening Committee that Minister of Coal approved the allocation of "North Dhadu coal block" in favour of M/s PSPL and the same led to issuance of allocation letter in favour of M/s PSPL by MOC, Government of India. The delivery of property in favour of company M/s PSPL accordingly took place pursuant to acts of cheating undertaken by the accused persons.
FINAL CONCLUSION
169. In view of my aforesaid discussion it is thus crystal clear that the overall facts and circumstances of the case unerringly point out to one and only one hypothesis and which is consistent with the guilt of the accused persons only and also that the circumstances are not explainable on any other hypothesis, much less consistent with the innocence of the accused persons. The prosecution in my considered opinion has clearly been successful in proving its case against all the four accused persons i.e. A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal, A-3 Umesh Chand Agarwal and A-4 S.K. Kanungo for the offence of criminal conspiracy i.e. 120-B IPC and for the offences u/s 120-B/420 IPC beyond shadows of all reasonable doubts.
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 142 of 144 Prosecution has also clearly succeeded in proving its case against A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal for the offence of cheating i.e. u/s 420 IPC beyond shadows of all reasonable doubts.
170. I accordingly hereby hold all the four accused persons i.e. A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal, A-3 Umesh Chand Agarwal and A-4 S.K. Kanungo guilty of the offence u/s 120-B IPC and for the offence u/s 120-B/420 IPC. A-1 M/s PSPL, A-2 Gyanchand Prasad Agarwal and A-3 Umesh Chand Agarwal are however also held guilty for the substantive offence of cheating i.e. u/s 420 IPC and are accordingly convicted thereunder.
171. 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:
CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 143 of 144 CHARGES FRAMED S. Name of (I) (II) No accused Charges Common to all Charges Final Decision separately framed 1 A-1 M/s (i) 120-B IPC 420 IPC Convicted for the offence PSPL u/s 120-B IPC; 120-B IPC
(ii) u/s 120-B IPC r/w Sec. r/w S. 420 IPC and S. 420 420 IPC IPC.
2 A-2 (i) 120-B IPC 420 IPC Convicted for the offence Gyanchand u/s 120-B IPC; 120-B IPC Prasad (ii) u/s 120-B IPC r/w Sec. r/w S. 420 IPC and S. 420 Agarwal 420 IPC IPC.
3 A-3 Umesh (i) 120-B IPC 420 IPC Convicted for the offence Chand u/s 120-B IPC; 120-B IPC Agarwal (ii) u/s 120-B IPC r/w Sec. r/w S. 420 IPC and S. 420 420 IPC IPC. 4 A-4 S.K. (i) 120-B IPC --- Convicted for the offence Kanungo u/s 120-B IPC and 120B (ii) u/s 120-B IPC r/w Sec. r/w 420 IPC 420 IPC Digitally signed by BHARAT BHARAT PARASHAR PARASHAR Date: 2019.11.13 12:10:01 +0530 ANNOUNCED IN THE OPEN COURT (BHARAT PARASHAR) TODAY ON 13.11.2019 SPECIAL JUDGE, (PC ACT) (CBI) ROUSE AVENUE COURTS COMPLEX NEW DELHI CBI Vs. M/s. Pawanjay Steel & Power Ltd. Judgment dated 13.11.2019 Page No. 144 of 144