Delhi District Court
Cbi vs . M/S Gondwana Inspat Ltd & Ors on 27 April, 2018
IN THE COURT OF SH. BHARAT PARASHAR, SPECIAL JUDGE
(PC ACT) (CBI)-7, NEW DELHI DISTRICT
PATIALA HOUSE COURTS, NEW DELHI
CNR No. DLND01-001493-2016
CC NO. 8570/2016 (OLD CC No. 01/16)
RC No. 221 2014 E 0016
Branch : CBI/EO-III/NEW DELHI
CBI Vs. M/s Gondwana Inspat Ltd & Ors
U/s. 120-B r/w Sec. 420 IPC.
Date of order on cognizance : 07.01.2016
Date of framing of charge : 16.05.2016
Date of final arguments : 24.02.2018
Date of judgment : 27.04.2018
In re:
Central Bureau of Investigation (CBI)
Vs.
(1) M/s Gondwana Ispat Ltd,
Through its AR Sh. Sanjiv Kumar Chaudhary
Registered office:
10th Floor, 5, Maker Chamber, Nariman Point,
Mumbai-21, Maharashtra.
Corporate office: Gondwana Ispat Ltd,
Khasra No. 97, 101, 190 Village Salari Yensa,
Post Chinora, Tah. Warora, Chandrapur,
Maharashtra-14. (Convicted)
(2) Sh. Ashok Daga,
S/o Late Sunder Lal Daga,
R/o 5, Temple Road, Civil Lines,
Nagpur, Maharashtra. (Convicted)
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 1 of 216
APPEARANCES
Present : Ld. Senior Advocate, Sh. R.S. Cheema, Special P.P.,
alongwith Ld. Senior PP Sh. Sanjay Kumar, Ld. DLA,
Sh. V. K. Sharma, Ld. Senior P.P. Sh. A.P. Singh and
Advocate Ms. Tarannum Cheema for CBI.
Ld. Counsels Sh. Subhash Gulati, Ms. Seema Gulati,
Sh. Manoj Arora and Sh. Sumit Saini for A-1 M/s
Gondwana Ispat Limited.
Ld. Senior Advocate Sh. Mohit Mathur alongwith
Ld. Counsels Sh. D.S. Kohli, Sh. Harvinder Singh,
Sh. Devansh Arya And Ms. Sonam Gupta for A-2
Ashok Daga.
JUDGEMENT
1. Briefly stated the necessary facts of the prosecution case as stands disclosed from the report u/s 173 Cr.PC are as under:
On 22.04.2000, Ashok Daga representing himself as director of M/s Gondwana Ispat Ltd. (hereinafter referred to as M/s GIL) applied to Ministry of Coal (MOC) for allotment of "Ekarjuna Extension" coal block, Tehsil- Warora, District Chandrapur, Maharashtra in favour of M/s GIL for setting up a washery cum sponge iron plant of 60,000 tonne per year capacity in Warora area.
However vide letter dated 01.06.2000, MOC rejected the application of the company stating that as per existing guidelines, an application for mining of a coal block for quantity less than 1 MTPA in open cast mining and less than 2,50,000 tonnes per annum in underground CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 2 of 216 mining is not permissible in order to ensure economic/scientific mining of Indian coal. It was also stated that accordingly the coal requirement of 0.7-0.8 lac ton per year also does not conform to the said guidelines. It was also stated that even otherwise "Ekarjuna Extension" coal block was not in the list of identified captive mining blocks. Subsequently on 25.09.2001, Ashok Daga again representing himself to be a director of M/s GIL applied afresh to MOC for allotment of "Warora West" coal block [For the sake of convenience "Warora West Coal Block" shall be herein-after referred to as "Warora Coal Block" as in certain documents to be referred herein-after the said coal block has been referred to as Warora North coal block lying West of Warora City and thus in order to avoid any confusion as regard the identity of coal block being referred to, it will be appropriate to refer it in this judgment only as "Warora Coal Block".] at District Chandrapur, Maharashtra in favour of M/s GIL for setting up 1.2 lakh tonne per annum washery cum sponge iron plant. On 25.09.2001 itself another application was submitted by Ashok Daga representing himself as Director of M/s GIL to Ministry of Steel seeking its recommendation in favour of the company to MOC for allotment of a coal mining block. Thereafter on 01.10.2001 an application was submitted to Directorate of Geology and Mining, Government of Maharashtra, Nagpur purporting to be on behalf of M/s GIL under the signatures of an authorised officer of "Gondwana Ispat Ltd.". In the said application request was made for making recommendation in favour of the company to Ministry of Steel qua "Warora Coal Block". In the said letter, it was also claimed that Western Coalfields Ltd. (WCL) has no objection for the release of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 3 of 216 "Warora Coal Block". Accordingly Directorate of Geology and Mining, Government of Maharashtra, Nagpur vide its letter dated 12.10.2001 requested Ministry of Steel to consider the request of M/s GIL and to make its recommendation to MOC in this regard. Thereafter on 13.06.2002 M/s GIL in continuation of its earlier application dated 25.09.2001 requested MOC to consider allotment of "Majra-Belgaon"
coal blocks having extractable reserve of 8 to 10 million tonnes as an alternate to "Warora Coal Block".
2. The company M/s GIL vide another letter dated 13.06.2002 itself also requested Ministry of Steel to suggest "Majra-Belgaon" coal blocks as an alternate coal blocks to MOC for allocation to the company. However Ministry of Steel vide its letter dated 01.08.2002 requested the company for making a proper fully justified proposal with all relevant details regarding allocation of "Majra-Belgaon" coal blocks as an alternate coal block. MOC however vide letter dated 01.11.2002 asked M/s GIL to route their request dated 13.06.2002 for allotment of coal block for the proposed washing-cum-sponge iron project through Ministry of Steel. The company thereafter vide its letters dated 11.02.2003, 18.02.2003 and 16.04.2003 requested Ministry of Steel to suggest and recommend their case to MOC. In the meantime vide letter dated 17.02.2003 M/s GIL requested Directorate of Geology and Mining, Government of Maharashtra, Nagpur for recommendation in favour of the company qua "Majra- Belgaon" coal blocks for their proposed washery cum sponge iron plant with a capacity 1.2 LTPA. Accordingly Directorate of Geology and Mining, Government of Maharashtra, Nagpur vide their letter CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 4 of 216 dated 24.02.2003 requested Special Secretary, Screening Committee, MOC to consider allocation of "Majra-Belgaon" coal blocks in favour of M/s GIL.
3. Thereafter MOC in its 18th Screening Committee meeting held on 05.05.2003 considered the application of M/s GIL and that of M/s Chandrapur Ispat Ltd. (CIL) for allocation of "Majra-Belgaon" coal block. A-2 Ashok Daga who appeared before the Screening Committee on behalf of Company M/s GIL however represented about the status of the proposed project stating that Maharashtra Industrial Development Corporation (MIDC) has been approached for land and necessary finances have been tied up with financial institutions and that for iron ore tie up has been made from Orissa.
4. Subsequently in the 20th Screening Committee meeting held on 06.06.2003, the representative of Ministry of Steel stated that they have supported the project of M/s GIL for allocation of a suitable coal block in the year 2001 itself. On the other hand A-2 Ashok Daga who again appeared as a representative of the company stated that they have approached MIDC for land and that they have given consent for 20 acres. Certain other facts qua availability of iron ore from Orissa and the extractable reserves available in "Majra-Belgaon" coal block were also stated. The Screening Committee after considering all the facts offered to reserve "Majra" coal block for the company beside also providing temporary coal linkage subject to the company achieving financial closure within one year. The representative of the company was also explained in the meeting itself by the Screening CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 5 of 216 Committee, the mechanism of reservation and allocation of block after financial closure and the temporary tapering coal linkage concept. It was when A-2 Ashok Daga, the representative of A-1 M/s GIL agreed to the said offer of Screening Committee so "Majra" coal block was accordingly decided to be reserved in favour of the applicant company i.e. M/s GIL while asking the company to submit a detailed project schedule/milestone/bar chart in the meantime for its proposed end use project and mine development within a month. Ministry of Steel was however in the meantime requested by MOC vide letter dated 23.06.2003 of Sh. S.K. Kakkar to provide its comments. Ministry of Steel in response accordingly informed vide OM dated 04.07.2003 that the ROM coal requirement of the company has been reassessed as 4.8 LTPA qua its proposed end used project. In the meantime company M/s GIL vide its letter dated 12.09.2003 submitted following documents to MOC :
"1. Certificate of incorporation attested and stamped by Company Secretary.
2. Memorandum and Articles of Association.
3. Details of Gondwana Ispat Ltd.
4. Auditor Report for the year 2002-03 by M/s Agarwal Chhalani and Company, Chartered Accountant, 51, New Colony, Nagpur.
5. A bar chart (which was not received)."
5. Again vide letter dated 03.10.2003, company M/s GIL further submitted following documents to MOC:
"1. Undertaking in the form of an affidavit.
2. Copy of Board of Directors Resolution dated 25.03.2002.
3. Bar Chart for Majra-Belgaon Coal Blocks & Sponge Iron CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 6 of 216 Project.
4. Harmonograph for Majra-Belgaon Coal Block & Sponge Iron Project."
6. It has been further stated that based on the aforesaid documents submitted by the company and the representation so made, MOC issued letter dated 29.10.2003 reserving "Majra" coal block for M/s GIL subject to certain conditions regarding development of the coal block and specific end use of the coal extracted from the said coal block. The mining plan submitted by the company was also subsequently approved and company was informed about its approval vide letter dated 14.05.2007. Thereafter a mining lease was executed on 16.09.2009 between the District Mining Officer, office of the Collector of District Chandrapur, Government of Maharashtra and M/s GIL with certain conditions.
7. It has been further stated that subsequently on the recommendation of 23rd Inter-Ministerial Group meeting (IMG) held on 24 & 25.10.2013, "Majra" coal block was however deallocated by MOC vide letter dated 07.01.2014 as not only various clearances i.e. forest clearance, land acquisition and mine opening permission were still pending but even the end use plant was not yet set up by the company.
8. In the meantime when allegations of wrong doing and corruption were levelled with respect to allocation of various coal blocks by Ministry of Coal, the Central Vigilance Commission (CVC) chose to examine all such files and upon getting prima facie satisfied that the matter requires detailed inquiry/investigation, a reference was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 7 of 216 made to CBI. As per the procedure adopted by CBI in all such cases a preliminary inquiry was initially registered and when during the course of preliminary inquiry it was found that the matter qua M/s Gondwana Ispat Limited warrants detailed investigation, so a regular case was registered vide RC No. 221 2014 (E) 0016.
9. During the course of investigation it was found that as on the date of application submitted by A-2 Ashok Daga on behalf of M/s GIL seeking allocation of "Ekarjuna Extension" coal block i.e. on 22.04.2000 or even on the date of submission of subsequent applications to various Government departments seeking allocation of "Warora coal block", the company M/s GIL was not yet registered with ROC and was thus not in existence. It was thus found that A-2 Ashok Daga has misrepresented to MOC and Ministry of Steel while signing the said application as Director, M/s GIL and that too after drafting the said communications on the letter heads purporting to be that of "Gondwana Ispat Ltd.". It was also found that even on 01.10.2001 when the application of M/s GIL was submitted to Directorate of Geology and Mining, Government of Maharashtra, Nagpur, then also M/s GIL was still not incorporated and was not in existence. Alongwith the said letter dated 01.10.2001 copy of application dated 25.09.2001 submitted to Ministry of Steel by A-2 Ashok Daga was also enclosed. It was however found that M/s GIL came to be registered with ROC Mumbai only on 05.10.2001. Thus as under Coal Mines (Nationalisation) Act, 1973 only a company could have been allocated a coal block so it was found that accused Ashok Daga misrepresented himself to be a Director of M/s GIL while no such CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 8 of 216 company actually existed on that date. It was also found during the course of investigation that even Western Coalfields Ltd. (WCL) had not issued any "No objection" for release of "Warora coal block" in favour of the company and thus M/s GIL was again found to have misrepresented to Directorate of Geology and Mining, Government of Maharashtra, Nagpur in that regard. It was also found that necessary certificate for commencement of business from ROC Mumbai, Maharashtra was obtained by the company M/s GIL on 25.10.2001 i.e. much after submission of its application to MOC and Ministry of Steel or to Directorate of Geology and Mining, Government of Maharashtra, Nagpur.
10. It has been further stated in the final report that subsequent to the allocation of Majra coal block Ashok Daga who was the main promoter of M/s GIL transferred 25,000 shares of the company as were held by his two companies i.e. M/s Auric Commercial Pvt. Ltd and M/s Caspack Finvest (I) Pvt. Ltd. in favour of Mrs. Sudha Devi Daga W/o Sh. Govind Dass Daga. In the aforesaid two companies A-2 Ashok Daga was a major share holder alongwith his wife Ms. Madhuri Daga.
11. It was also found during the course of investigation that though after allocation of the coal block in the year 2003 Ashok Daga had filed an undertaking in the form of an affidavit to MOC stating that he will install plant/extension of plant and develop the coal mine but in fact after allocation of the coal block he sold off the company while earning huge profit. It was found that Ashok Daga has disposed off CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 9 of 216 the company without installing the plant and developing the coal mine by entering into an agreement for sale of remaining 25,000 equity shares of M/s GIL on 28.10.2005 with Nand Kishore Sarda and Govind Dass Daga. As per the said agreement he received Rs. 10 lakhs as initial payment and an amount of Rs. 2.75 crores was to be received by him in installments of Rs. 25 lacs based on production and disposal of coal from the allocated coal mine. However as Govind Das Daga owned 50% equity in yet another company i.e. M/s B.S. Ispat Limited so initially efforts were made to merge M/s GIL into M/s B.S. Ispat Ltd., but when the same could not materialise so M/s GIL became a 100% subsidiary company of M/s B.S. Ispat ltd.. Subsequently the entire share holding of M/s B.S. Ispat Ltd. in M/s GIL were transferred/sold to M/s Oriental Iron Casting Ltd. (OICL) in December 2011. It was at that stage that both Sarda and Daga group negotiated and reduced the liability of Ashok Daga from 2.75 crores to 1.55 crores. A termination agreement was executed between Ashok Daga, Nand Kishore Sharda and Govind Das Daga in this regard on 30.12.2011 and a sum of Rs. 1.55 crores was received by Ashok Daga from Oriental Iron Casting Ltd.
12. It was also found during the course of investigation that Ashok Daga had made unsubstantiated claims even towards financial preparedness and tie up qua iron ore from Orissa. It was in the aforesaid circumstances, found that as during that period MOC was not following any system of checking the falsity or otherwise of the information provided by an applicant company so M/s GIL and its director Ashok Daga in furtherance of a criminal conspiracy CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 10 of 216 misrepresented to various Government authorities as above and thereby induced them to reserve/allocate "Majra" coal block in favour of M/s GIL.
13. Upon filing of report u/s 173 Cr.PC as above this Court considered the same at length and vide a detailed order dated 07.01.2016 summoned accused company M/s Gondwana Ispat Ltd. (M/s GIL) and its Director Ashok Daga for the offences u/s 120-B/420 IPC and also for the substantive offence u/s 420 IPC.
14. Subsequently, when both the accused persons put in their appearance, copies of the charge sheet were supplied to them. After due compliance of Section 207 Cr.PC, when the matter was fixed for arguments on the point of charge, Ld. Counsels for the accused persons very fairly conceded that though charges may be framed against the accused persons for the offences u/s 120-B/420 IPC but they shall be demonstrating, during the course of trial, that the allegations levelled against the accused persons are false.
15. Accordingly, vide order dated 16.05.2016 charge for the offences as are mentioned in the table below were framed against the accused persons.
CHARGES FRAMED
S. (I) (II)
Name of accused Charges Common to both Charges separately
No
framed
1 A-1 M/s Gondwana (i) Section 120-B IPC
Ispat Ltd. (M/s GIL) (ii) Section 420 IPC
----
(Under two separate heads)
(iii) Section 120-B IPC r/w Sec. 420 IPC
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 11 of 216 2 A-2 Ashok Daga (i) Section 120-B IPC 420 IPC
(ii) Section 420 IPC (Under two separate heads) (Under five
(iii) Section 120-B IPC r/w Sec. 420 IPC separate heads) Note: The detailed charges under each head shall be referred to at a later stage of the present judgment.
Both the accused persons however pleaded not guilty to the charges so framed against them and claimed trial.
16. Prosecution thereafter in order to prove its case examined 17 witnesses. (Examination-in-chief of three witnesses namely Insp. Sunit Kumar Pal, Additional SP, S.N. Khan and Deputy SP, S.P. Rana was however led by way of affidavit u/s 296 Cr.PC as their evidence was of formal character. Though all the said three witnesses were also offered for cross-examination to the accused persons but they chose to cross-examine only one of them namely PW Insp., Sunit Kumar Pal. He was accordingly examined as PW-15. The deposition of other two witnesses namely Additional SP, S.N. Khan and Deputy SP, S.P. Rana thus remained completely unimpeached). Statement of accused persons were thereafter recorded u/s 313 Cr.PC. Liberty was also given to both the accused persons to file their written statements u/s 313 (5) Cr.PC. Accordingly, A-1 M/s GIL and A-2 Ashok Daga both filed their written statements u/s 313 (5) Cr.PC. Thereafter only one witness namely DW-1 Mahesh D. Gupta was examined in defence by A-2 Ashok Daga. A-1 M/s GIL however did not examine any witness in defence.
17. Detailed final arguments in the matter were thereafter heard as were addressed by Ld. Special P.P./Sr. Advocate Sh. R.S. CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 12 of 216 Cheema and by Ld. Sr. P.P. Sh. Sanjay Kumar on behalf of prosecution and by Ld. Counsel Sh. Subhash Gulati for A-1 M/s GIL and by Ld. Sr. Advocate Sh. Mohit Mathur and Ld. Counsel Sh. D.S. Kohli for A-2 Ashok Daga.
Written submissions in support of the oral arguments so addressed were however also filed on behalf of both the accused persons.
18. 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 and the sole defence witness examined in the present trial.
PROSECUTION WITNESSES (PWs)
PW Name and Deposition/Role of the witness in the present
No. designation of case.
the Witness
1 R.S. Negi He was an official of Ministry of Coal posted initially
in CPAM Section and then subsequently in CA
Section where coal block allocation matters were being dealt with. As the concerned dealing assistant he was associated with the processing of applications received in Ministry of Coal for allocation of captive coal block including that of M/s Gondwana Ispat Limited. He thus proved various files/notings/documents as were prepared in Ministry of Coal either by him or by other officers/officials of Ministry of Coal in this regard during the relevant period.
2 R.S. Meena In the year 2015 he was posted as Dy. Registrar of Companies-cum-Dy. Official Liquidator, Jaipur, Rajasthan. During the course of investigation he had provided to CBI the certificate of incorporation dated 05.10.2001 of M/s Gondwana Ispat Limited and certificate of commencement of business dated CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 13 of 216 25.10.2001 issued to M/s Gondwana Ispat Limited. He also provided names of directors of M/s Gondwana Ispat Limited as of the year 2004 and subsequently of the year 2007. He also provided to CBI certified true copy of record relating to other companies i.e. M/s Navdeep Agriculture & Properties Pvt. Ltd., M/s Auric Gem & Jewellery Pvt. Ltd., M/s Caspack Finvest (India) Pvt. Ltd. and M/s Tangerine Finvest Pvt. Ltd. as were available in their office.
3 Ram Naresh From June 2009 till October 2014 he was posted as Section Officer, CA-1 (A Section), Ministry of Coal. During the course of preliminary enquiry registered by CBI with respect to coal block allocation matters, he handed over various files/documents of MOC relating to coal block allocation matters to Dy. SP Sh. S.P. Rana.
4 Abhash During the year 2015 he was working as General Chandra Manager in Western Coalfield Ltd. (WCL), Singh Chandrapur area. Upon receipt of letter dated 16.12.2015 from Inspector Rajbir Singh of CBI along with copy of letter dated 01.10.2001 of "M/s Gondwana Ispat Limited" and as addressed to Director Geology and Mining, Government of Maharashtra. He had informed that as per the records available in their office neither M/s Gondwana Ispat Limited ever requested WCL to release Warora Coal Block nor any "no objection"
was issued by WCL for release of Warora Coal Block to the said company. He accordingly proved his reply so sent to CBI.
5 Deepak During the period July 2001 to July 2006 he was Anurag working as Dy. Secretary/Director in Ministry of Steel, Government of India and was looking after the charge of Industrial Development Wing (IDW). While being posted in Ministry of Steel he had dealt with the request of "M/s Gondwana Ispat Limited"
for allocation of Warora Coal Block and subsequently for allocation of Majra-Belgaon Coal Blocks. He accordingly proved various documents/files of Ministry of Steel beside proving various notings as were prepared by different officers/officials of Ministry of Steel.
6 Rajiv R. In September 2014 he was posted as Income Tax CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 14 of 216 Bankar Inspector in the office of Dy. Commissioner of Income Tax, Central Circle-1(4), Nagpur. On 16.09.2014 he had handed over to CBI one original agreement dated 28.10.2005 relating to sale of equity shares of M/s Gondwana Ispat Limited 7 Vishwas During the year 2001 he was posted as Director, Sawakhande Directorate of Geology and Mining, Govt. of Maharashtra. While being posted in the said department he had dealt with the request of M/s Gondwana Ispat Limited dated 01.10.2001 for being recommended to Ministry of Steel for allocation of a coal block. He accordingly proved various notings/documents/files of Directorate of Geology and Mining, Govt. of Maharashtra as were prepared by him and by other officers of the department. He had also attended 18th and 20th Screening Committee meetings in MOC as a representative of Government of Maharashtra.
8 Rohidas In May 2015 he was posted as Assistant General Sonawane Manager in Central Bank of India Nagpur main branch. On 13.05.2015 he had handed over various documents to Inspector Rajbir Singh pertaining to M/s Oriental Iron Casting Ltd and that of Caspack Finvest (INDIA) Pvt. Ltd.. He had handed over the printout of specimen signatures of Sh. Ashok Daga and Mrs. Madhuri Daga after obtaining the same from the scanned record of their account maintained in their bank and accordingly deposed about the same.
9 Anil Sharma He was posted as Senior Scientific Officer in CFSL, CBI. He had examined and compared various questioned documents with the admitted/specimen signatures of Ashok Daga and opined that the questioned signatures that of Ashok Daga himself. He accordingly proved his report prepared by him in this regard.
10 Gopal He was an officer of Maharashtra Industrial W.Sonsare Development Corporation (MIDC). He deposed that during the course of investigation of the present case he had informed IO Inspector Rajbir Singh that in the year 2001 M/s Gondwana Ispat Limited had applied to MIDC for allotment of approximately 10- 20 acres of land but vide letter dated 21.05.2003 they were asked by MIDC to produce certain CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 15 of 216 documents in order to fulfill the procedure of application. He further stated that the company however failed to furnish the said documents and accordingly the application of the company for allotment of land was closed. He had thus stated that no land was allotted to M/s Gondwana Ispat Limited by MIDC. He accordingly proved the replies sent by MIDC to IO Insp. Rajbir Singh in this regard. 11 Nand Kishore He was a businessman dealing in steel Re-rolling Sarda Mill business in Nagpur. He deposed that in the year 2005 he had entered into an agreement for purchase of 50 per cent equity of "M/s Gondwana Ispat Limited" with Sh. Ashok Daga and Sh. Govind Daga and thus proved the necessary agreement entered into by them in this regard. He further deposed that the said agreement however could not be completely acted upon between the parties as coal could not be extracted from the mine so allotted and accordingly a termination agreement dated 30.12.2011 was executed between them. He further deposed that subsequently he sold his 25000 shares of "M/s Gondwana Ispat Limited" to "M/s B.S. Ispat Limited" and who further sold the same to "M/s Oriental Iron Casting Ltd". He thus stated that on his behalf a payment of Rs. 1.55 crore was paid to Ashok Daga by "M/s Oriental Iron Casting Ltd".
12 Ravindra Khot He was an officer of Axis Bank, Nagpur branch. He deposed that on 14.05.2015 he had supplied statement of account of "M/s B.S. Ispat Limited" for the period 25.12.2011 to 30.12.2011 to CBI beside also supplying one original bank draft for a sum of Rs. 5,00,000/- issued in favour of Ashok Daga and stated that he said amount of Rs. 5,00,000/- was debited from the account of M/s B.S. Ispat Limited as was maintained in their branch.
13 Inspector He was the Investigating Officer of the case. He Rajbir Singh deposed extensively about the investigation carried out by him and also about the collection of various documents from different authorities by him during the course of investigation.
14 Sunil Patki He was an officer of ICICI Bank posted in the year 2015 at Civil Lines, Nagpur branch. During the course of investigation of the present case he CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 16 of 216 handed over the original account opening form of M/s Auric Gems and Jewellery Pvt. Ltd and other documents as were available in their records pertaining to the account of the company maintained in their bank. He also handed over the account opening forms of another saving bank account held jointly in the name of Ashok Daga, Madhuri and Neha Daga alongwith copy of statement of account beside also handing over similar record qua another joint saving bank account held in the name of Ashok Daga and Neha Daga in their bank alongwith certificate u/s 2-A of the Banker's Book of Evidence Act and certificate u/s 65-B Indian Evidence Act. He accordingly proved the record so handed over by him to IO Inspector Rajbir Singh.
15 Inspector He was associated with the preliminary enquiry no.
Sunit Kumar 219 2012 E 0002 registered by CBI with respect to Pal coal block allocation matters. On the directions of enquiry officer he had collected various files/documents from Ministry of Steel and subsequently the same to IO Insp. Rajbir Singh.
16 Additional S.P. He was the CBI officer who was initially entrusted S.N. Khan with the preliminary enquiry number 219 2012 E 0004 registered by CBI with respect to coal block allocation matters. During the course of inquiry, he had collected original termination agreement dated 30.12.2011 executed between A-2 Ashok Daga, PW 11 Nand Kishore Sarda and Govind Das Daga from A-2 Ashok Daga vide production cum receipt memo dated 09.06.2014. Subsequently, during the course of investigation of the present case he had handed over the original termination agreement dated 30.12.2011 to IO Inspector Rajbir Singh.
17 Deputy S.P. He was the CBI officer who was initially entrusted S.P. Rana with the preliminary enquiry number 219 2012 E 0002 registered by CBI with respect to coal block allocation matters. During the course of inquiry, he had collected various files/documents from Ministry of Coal and deposited them in the Malkhana of EO-I, CBI.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 17 of 216 DEFENCE WITNESS (DW) DW Name and Deposition/Role of the witness in the present No. designation of the case.
Witness
DW-1 Sh. Mahesh D. He was engaged in the business of Iron Ore and
Gupta
Coal at Nagpur. He deposed that in the year 2001
(examined on
behalf of A-2 or so Ashok Daga and his cousin Govind Daga had
Ashok Daga).
expressed their requirement of about 10000-15000 MT of Iron Ore per month from Orissa for their proposed sponge iron plant to be established by them through their company "M/s Gondwana Ispat Limited". He further deposed that he accordingly told them that the said quantity of iron ore can be supplied by him but the finalization of rates was deferred as the same were to be decided as and when requirement of iron ore was to be raised. He further deposed that subsequently in the year 2005 he came to know that no such plant was established by Ashok Daga as he had some differences with his brother Govind Daga, who was the other co-promoter of M/s Gondwana Ispat Limited and he thus stated that no iron ore was supplied by him to M/s Gondwana Ispat Limited.
19. After having briefly mentioned the deposition of various witnesses as were examined by the prosecution and the accused 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. The deposition of the aforesaid prosecution witnesses and defence witness so examined shall be CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 18 of 216 however referred to in detail wherever required in the later part of the present judgment.
Arguments on behalf of Prosecution
20. It was submitted by Ld. Sr. P.P. Sh. Sanjay Kumar on behalf of prosecution that the facts and circumstances of the present case clearly show as to how A-2 Ashok Daga misrepresented to various Government departments i.e. MOC, Ministry of Steel and Department of Geology and Mining, Government of Maharashtra by submitting applications for allocation of a coal block in the name of a non- existent entity i.e. GIL. It was submitted that u/s 3 Coal Mines Nationalization Act, 1973 (hereinafter referred to as CMN Act, 1973), only a company registered under Indian Companies Act, 1956 could have applied for allocation of a coal block. It was thus submitted that A-2 Ashok Daga despite knowing fully well that GIL has not yet been incorporated, still submitted an application to MOC for allotment of "Ekarjuna Extension" coal block and signed the said application as Director, GIL. It was submitted that though the said application came to be rejected by MOC, Government of India on account of less requirement of coal and thereby not meeting the stipulated guidelines of MOC for allocation of a coal block but the said act clearly amounted to an act of attempting to cheat. It was submitted that thereafter A-2 Ashok Daga again submitted an application to both MOC and Ministry of Steel seeking allocation of "Warora coal block"
while once again signing the application as Director, GIL knowing fully well that the company has not yet been incorporated. It was further CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 19 of 216 submitted that one other application was thereafter submitted to Department of Geology and Mining, Government of Maharashtra on behalf of "Gondwana Ispat Ltd." at the instance of A-2 Ashok Daga seeking recommendation in favour of a non-existent entity i.e. "Gondwana Ispat Ltd." to Ministry of Steel for allocation of a coal block and once again till that time also "Gondwana Ispat Ltd." was not yet incorporated. It was thus submitted that A-2 Ashok Daga deliberately concealed the factum of "Gondwana Ispat Ltd." having been not yet registered from all the aforesaid authorities only with a view to deceive them and thereby to induce them to allot a captive coal block in favour of "Gondwana Ispat Ltd.". It was also submitted that admittedly "Gondwana Ispat Ltd." came to be incorporated on 05.10.2001 and certificate of commencement of business was issued to the company on 25.10.2001. It was also submitted that though subsequently another application was submitted on behalf of M/s GIL in the year 2002 for allocation of "Majra-Belgaon" coal blocks under the signatures of A-2 Ashok Daga but before the 18 th Screening Committee and 20th Screening Committee where the request of company M/s GIL came up for consideration, misrepresentations were made by A-2 Ashok Daga on behalf of A-1 M/s GIL. It was submitted that before 18th Screening Committee it was falsely claimed by A-2 Ashok Daga that tie-up for finances has been made with financial institutions and that tie-up for supply of iron ore from Orissa has also been made knowing fully well that neither any tie-up of finances with any financial institution has yet been made nor any such tie-up for supply of iron ore has been made with any supplier of iron ore. It was also submitted that even before 20 th Screening CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 20 of 216 Committee A-2 Ashok Daga falsely represented that MIDC has consented for 20 acres of land and that iron ore will be sourced from Orissa. It was submitted that A-2 Ashok Daga knew fully well that neither any land has been consented to be allotted to the company by MIDC nor any tie-up for supply of iron ore has yet been made with any one.
21. It was also submitted by Ld. Sr. P.P. Sh. Sanjay Kumar that A- 2 Ashok Daga also misrepresented to Department of Mining and Geology, Government of Maharashtra that Western Coalfield Ltd. has given their no objection for release of "Warora coal block" to the company. It was thus submitted by Ld. Sr. P.P. that from the facts and circumstances of the case, coupled with the evidence led on record by the prosecution, it is crystal clear that A-2 Ashok Daga repeatedly attempted to cheat MOC, Ministry of Steel and Department of Geology and Mining at different point of time so as to procure allocation of a coal block and finally on the basis of misrepresentation made before the Screening Committee succeeded in obtaining allocation of "Majra" coal block in its favour. It was also submitted that guilty intention of A-2 Ashok Daga was also evident from the fact that despite having given undertaking to MOC to develop the coal mine and establish the end use project, no steps were taken in that regard and rather A-2 Ashok Daga by selling off his equity earned undue profit over the allotment of said coal block to the time of Rs. 1.55 crores. The prosecution was thus stated to have been successful in proving its case against both the accused persons and they were accordingly prayed to be convicted.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 21 of 216
22. Ld. Senior P.P. Sh. Sanjay Kumar further placed reliance upon the following case law in support of his submissions:
S. Title Citation
No.
1 Iridium India Telecom Limited vs Motorola (2011) 1 Supreme
Incorporated and Others Court Cases 74
2 Maharashtra State Electricity Distribution (2010) 10 Supreme
Company Limited and Another vs Datar Court Cases 479 Switchgear Limited and Others 3 Sunil Bharti Mittal vs Central Bureau of (2015) 4 Supreme Investigation Court Cases 609 4 Rabinarayan Das vs State 1992 CriLJ 269, 1991 II OLR 381 5 Makhan Lal Jain and Anr. vs. The Amrit AIR 1953 ALL 326, Banaspati Co. Ltd. 1953 23 Comp Cases 100 All 6 Deo Nandan Deceased by LRs vs. Chhote AIR 1983 ALL 9 7 V. Shankar Ram vs. Mrs. Sukanya (1997) 2 MLJ 170 8 Durgadas Tulsiram Sood vs. State AIR 1955 Bom 82.
Arguments on behalf of A-1 M/s GIL
23. It was submitted by Ld. Counsel Sh. Subhash Gulati on behalf of A-1 M/s GIL that there was no pre-condition that allocation of a captive coal block was only to be made to the companies registered with ROC. It was also submitted that in the explanation to Section 31 (2), CMN Act, 1973, it is mentioned that "Company" means any body corporate and includes a firm or other association of individuals and a "Director" in relation to a firm means a partner in the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 22 of 216 firm. Reference was also made to minutes of 2 nd, 3rd and 4th Screening Committee wherein not only in the body of minutes there is reference to representatives of firms/power generating companies but also in annexure-II containing the attendance of representatives of applicants, it is mentioned as "Names of representatives of firms/Power generating companies who were in attendance". Reference was also made to Model firm of mining lease i.e. Form-K wherein also information from lessee was sought as to whether it was an individual, a registered firm or a registered company. It was also submitted that MOC also never issued notice to any applicant on the ground that the applicant entity was not a registered company. It was thus submitted that none of the applicant was disqualified on the ground that it was not a registered company. It was also submitted that it is not the case of prosecution that the so called rule of applicant necessarily being a company was legally required to be strictly followed and that the concerned officers who were under a duty to scrutinize the applications, were hauled up for connivance and/or negligence in performance of their duties. It was submitted that even at the time of de-allocation of "Majra" coal block it was no where mentioned by MOC that allocation of coal block was obtained by the company by fraudulent means.
24. As regard the application dated 22.04.2000 submitted to MOC for allocation of "Ekarjuna Extension" coal block, it was stated that as the said application was rejected by MOC on technical ground so MOC did not get cheated in anyway on the said application. It was also submitted that though at the most it could be an attempt to cheat CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 23 of 216 but the said act was again an impossible act as admittedly "Ekarjuna Extension" coal block was not available as per the existing guidelines and was also not in the list of identified captive coal blocks available for allocation. As regard the charge of conspiracy between A-1 M/s GIL and A-2 Ashok Daga, it was submitted that no conspiracy could have been entered into between a natural person and fictional juristic person without separately specifying the distinct human face of the company allegedly agreeing for the purposes of conspiracy.
25. As regard the application dated 25.09.2001 submitted for allocation of Warora West coal block, it was submitted that there was no guilty intention or mensrea to cheat anybody as the company was in the process of getting registered and intended to commence a legitimate and genuine business. It was submitted that A-2 Ashok Daga had already applied for availability of company name "Gondwana Ispat Ltd." with ROC in September 2001 and on 18.09.2001, ROC, Mumbai confirmed the availability of the name. It was also submitted that M/s GIL had also filed Industrial Entrepreneur Memorandum (IEM) with the Ministry of Commerce and Industry on 24.09.2001 i.e. prior to applying for "Warora coal block" and in the said application in the column titled "Registrar of Companies Registration No.", the word "Applied" was mentioned. It was thus submitted that there has been no guilty intention at any point of time to cheat anyone or misrepresenting the facts. It was further submitted that subsequently A-1 M/s GIL vide its letter dated 13.06.2002 to MOC made a request to consider allotment of "Majra-Belgaon" coal block as an alternate to "Warora coal block". It was thus submitted CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 24 of 216 that the said application dated 13.06.2002 could be treated as a fresh application as prior to it there was only preparation or non- maintainable applications which were either impossible of culmination or were otherwise legally permissible as pre-incorporation transactions by the promoters who eventually ratified and confirmed the same. It was thus submitted that accused company was/is not a "Fly by Night" operator.
26. While referring to the provisions of Specific Relief Act, it was submitted that law does recognize pre-incorporation contracts by the promoters of a company and creates rights in favour of the company to seek specific performance of the contract after the company has accepted and ratified the contract and similarly section 19 (e) Specific Relief Act creates liability against the company for such contracts upon the same conditions of acceptance and ratification. While referring to the provisions of the Companies Act, it was also submitted that u/s 7 Companies Act, 2013 any offence qua affairs of company if committed by the promoters of the company before its incorporation shall be the sole liability of the promoters and persons involved.
27. As regard charge for the offence of cheating Ministry of Steel, it was submitted that it was not in the domain of Ministry of Steel to check whether the applicant was an incorporated company or not and the recommendation was to be made by it purely on the basis of financial and technical capability of the company/entity. Deposition of PW-5 Deepak Anurag was extensively referred to in this regard.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 25 of 216 Similarly as regard the role of Director of Geology and Mining, Government of Maharashtra, it was submitted that its role was limited to only provide technical information about the given mining block. Deposition of PW-7 Vishwas Sawakhande was referred to in this regard.
28. As regard false submissions made before 18 th and 20th Screening Committee, it was submitted that the minutes of 18 th Screening Committee were wrongly recorded qua M/s GIL and as the said fact came to the notice of the company after the 20 th Screening Committee meeting wherein reservation of "Majra" coal block in favour of company M/s GIL was already made so the earlier wrong recording of minutes of 18 th Screening Committee had become inconsequential and on account of the same, no objection in this regard was raised with MOC. As regard supply of iron ore from Orissa, it was submitted that DW-1 Mahesh D. Gupta has deposed that in the year 2001, A-2 Ashok Daga and Govind Daga had contacted him for supply of iron ore. It was also submitted that in its reply dated 06.11.2015 submitted by A-2 Ashok Daga to IO during the course of investigation, it was specifically stated that supply of iron ore would be made from different mine owners in Orissa/ other iron ore rich states.
29. As regard financial tie-up with financial institutions and consent qua land given by MIDC, it was submitted that not only the minutes of 18th Screening Committee were wrongly recorded but even after 20th Screening Committee wherein reservation for a coal CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 26 of 216 block was made in favour of M/s GIL repeated communications were undertaken by the company with MOC to convert the reservation into allotment as the financial institutions will not consider the proposal for financial tie-up on the basis of reservation of a coal block. It was also pointed out that on 10.05.2003 company itself wrote to Secretary, MOC that they are taking necessary steps for procurement of land etc. and had accordingly taken necessary steps and MIDC had conveyed availability of land to the company.
30. As regard the charge of non taking of necessary steps to develp "Majra" coal block, it was submitted that the same took place on account of delay caused by different authorities/Ministries in granting necessary permissions at different stages to the company. It was thus denied that A-1 M/s GIL had any intention of not developing the coal block or of not establishing the proposed EUP.
31. As regard de-allocation letter dated 07.01.2014, it was submitted that the same was issued by MOC without considering the reply of A-1 M/s GIL. It was also submitted that IO Insp. Rajbir Singh did not carry out free and fair investigation by taking into consideration all the relevant facts and circumstances as were brought to his knowledge during the course of investigation.
32. A-1, Company M/s GIL was thus stated to have been falsely implicated and was accordingly prayed to be acquitted.
33. In support of his submissions for A-1 M/s GIL, Ld. Counsel Sh. Subhash Gulati placed reliance upon the following case law:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 27 of 216 S. Title Citation No. 1 Kelner Vs Baxter (1866) LR 2 CP 174 2 Newborne Vs Sensolid (Great Britain) Ltd. 1994] 1 QB 45 3 Prabir Kumar Misra Vs. RamaniRamaswamy [2010]104SCL174 4 Commissioner of Income Tax, Tamil Nadu Vs. AIR 1996 SC 2888 City Mills Distributors (P) Ltd Arguments on behalf of A-2 Ashok Daga
34. On behalf of A-2 Ashok Daga, it was submitted by Ld. Senior Advocate Sh. Mohit Mathur that prosecution has miserably failed to prove its case against A-2 Ashok Daga on any count of charge framed against him. It was submitted that while the initial application dated 22.04.2000 submitted by A-2 Ashok Daga for allotment of Ekarjuna Extension Coal Block was rejected by Ministry of Coal on technical grounds but even otherwise by the time said application was moved by A-2 Ashok Daga the name "Gondwana Ispat Limited"
was already made available to him by the office of Registrar of Companies for registration of the proposed company. It was also submitted that no property even came to the delivered by Ministry of Coal in pursuance to said application and thus none of the ingredients of the offence of cheating were made out against A-2 Ashok Daga. It was also submitted that even otherwise, the said application dated 22.04.2000 was in the nature of pre-incorporation agreement which is permissible under law.
35. As regard the subsequent application dated 25.09.2001 moved by A-2 Ashok Daga seeking allocation of "Warora coal block", CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 28 of 216 it was submitted that the said application was not pursued further as subsequently another application in the year 2002 was submitted for allocation of Majra-Belgaon Coal Blocks by the company A-1 M/s Gondwana Ispat Limited. It was also submitted that even otherwise along with application dated 25.09.2001 the copy of application filed by "Gondwana Ispat Ltd." towards filing of Industrial Entrepreneur Memorandum (IEM) with Department of Industries was submitted to Ministry of Steel and in the said application for IEM it was specifically stated that registration of the company has been applied for. It was thus submitted by Ld. Senior Advocate Sh. Mohit Mathur that at all points of time it was well within the knowledge of concerned authorities that A-1 Gondwana Ispat Limited has not yet been registered under Companies Act. It was however further submitted that even otherwise from the deposition of prosecution witnesses itself it has come on record that while making its recommendation to Ministry of Coal in favour of "Gondwana Ispat Ltd." the factum of registration of applicant as a company was not at all relevant to Ministry of Steel and it was only concerned with an assessment of amount of coal required by the company for its proposed project for a period of 30 years. Similarly, as regard the application submitted to Directorate of Mines and Geology, Government of Maharashtra it was submitted that PW 7 Vishwas Sawakhande in his deposition stated that they were merely concerned with the technical aspects of the project to be established. It was thus submitted that the factum of applicant Gondwana Ispat Limited being a registered company or not was also not relevant to the Directorate of Mines and Geology, Government of Maharashtra. It was also submitted that even CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 29 of 216 otherwise the mere recommendation made by Directorate of Mines and Geology, Government of Maharashtra for allocation of a captive coal block in favour of Gondwana Ispat Limited or the recommendation made by Ministry of Steel to Ministry of Coal in favour of Gondwana Ispat Limited does not amount to delivery of any property as the said recommendations were neither binding on Ministry of Coal nor on the Screening Committee. It was thus submitted that the ingredients of the offence of cheating either qua Ministry of Steel or as regard Directorate of Mines and Geology, Government of Maharashtra were not made out. It was also submitted that from the application dated 25.09.2001 of A-1 M/s Gondwana Ispat Limited it was clear that copy of application filed with Department of Industries Promotion and Policy (DIPP) by "Gondwana Ispat Ltd." towards filing of IEM was duly submitted to Ministry of Steel but at the time of seizure of file of Ministry of Steel during the course of investigation, the pages of the relevant file were tampered with in as much as copy of application qua IEM filed by A-2 Ashok Daga was removed. It was submitted that during the course of cross-examination of various prosecution witnesses it has clearly come on record that the pagination of the file of Ministry of Steel has been tampered with. It was thus reiterated that in the information furnished to Department of Industries while applying for IEM it was clearly mentioned by A-2 Ashok Daga that Gondwana Ispat Limited has not yet been registered under Companies Act. It was further submitted that even otherwise no guilty intention on the part of A-2 Ashok Daga or A-1 M/s Gondwana Ispat Limited can be read into as admittedly on 05.10.2001 A-1 M/s Gondwana Ispat Limited was got CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 30 of 216 registered under Indian Companies Act, 1956 and thereafter on 25.10.2001 the certificate of commencement of business was also issued by Registrar of Companies. It was also submitted that subsequently when Ministry of Coal sought various information and documents including certificate of incorporation of the company then the same were duly submitted by the company. It was thus submitted that there was no guilty intention on the part of A-2 Ashok Daga in submitting various applications to different authorities. It was also reasserted that it was legally permissible for a promoter of a company to enter into pre-incorporation contracts in the name of the proposed company and the subsequent ratification of such contracts by the company after its incorporation makes all such acts legal. It was also stated that mere making of applications for allocation of a coal block does not amount to commencement of business prior to issuance of certificate of commencement of business on 25.10.2001.
36. As regard the application dated 13.06.2002 submitted by A-1 M/s Gondwana Ispat Limited seeking allocation of Majra-Belgaon Coal Blocks it was submitted that the same was a fresh application as pursuant to submitting the said application Ministry of Coal had asked the company to get the application routed through Ministry of Steel. It was thus submitted that pursuant to the aforesaid directions of Ministry of Coal fresh application for allotment of Majra-Belgaon Coal Blocks was submitted both to Ministry of Steel and to Directorate of Mines and Geology, Government of Maharashtra for recommending the same to Ministry of Coal. It was also pointed out that on this occasion on account of change of policy in Ministry of Steel it was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 31 of 216 only the coal requirement of the company which was communicated by Ministry of Steel to Ministry of Coal and no specific recommendation was made in favour of any company much less in favour of A-1 M/s Gondwana Ispat Limited. It was also submitted that when the matter came up before 18th Screening Committee in the meeting held on 05.05.2003 then no final decision was taken as the Majra-Belgaon Coal Blocks were included in the list of captive coal blocks for the first time in the said meeting only and it was thought appropriate to put them in public domain for some period. As regard the facts recorded in the minutes of 18 th Screening Committee that the representatives of the company A-1 M/s Gondwana Ispat Limited informed that finances have been tied up with financial institutions and iron ore has been tied up from Orissa, it was submitted that said facts have not been correctly recorded in the minutes. It was pointed out that from the subsequent proceedings of 20 th Screening Committee and the communications undertaken thereafter by A-1 M/s Gondwana Ispat Limited with Ministry of Coal and other government authorities it was clear that no financial tie up was yet made with any of the financial institutions. As regard supply of iron ore from Orissa it was submitted that though some talks were held with various suppliers for supply of iron ore from Orissa but in the absence of firm allocation of a coal block no final contract was entered into. It was also submitted that since the minutes of 18 th Screening Committee were admittedly received by A-1 M/s Gondwana Ispat Limited after the meeting of 20th Screening Committee held on 06.06.2003 and wherein Majra Coal Block was reserved for A-1 M/s Gondwana Ispat Limited, so no objection was raised by the company qua wrong facts CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 32 of 216 recorded in the minutes of 18 th Screening Committee thinking them to be irrelevant. It was also submitted that subsequently in the 20 th Screening Committee while Majra Coal Block was reserved for A-1 M/s Gondwana Ispat Limited, the company was also offered temporary coal linkage from Western Coalfield Limited (WCL) subject to the condition that the financial closure be achieved within a period of one year. It was submitted that subsequent to aforesaid decision of 20th Screening Committee when the company A-1 M/s Gondwana Ispat Limited approached WCL for coal linkage then the same was refused stating that the same is not possible on account of their limited production of coal and even the financial institutions in the absence of firm allocation of a coal block in favour of the company refused to finally tie up for finances with the company merely on the basis of reservation of a coal block. It was pointed out that company A-1 M/s Gondwana Ispat Limited accordingly undertook number of correspondence with Ministry of Coal, Ministry of Steel and Directorate of Mines and Geology, Government of Maharashtra requesting for waiver of condition of achieving financial closure and for converting reservation of a coal block into allocation.
37. It was also submitted that even otherwise mere reservation of a coal block do not amount to grant of any largecy in favour of a company as against allocation of a coal block. Reference was also made to the observations of Hon'ble Supreme Court as were made in order dated 25.08.2014 in the case Manohar Lal Sharma vs Union of India, (2014) 9 SCC 516, wherein difference between the concept of reservation of a coal block viz-a-viz allocation of a coal block was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 33 of 216 also highlighted.
38. It was thus submitted that on account of aforesaid facts most important ingredient of the offence of cheating i.e. u/s 420 IPC viz. delivery of property was not made out as no property stood delivered to A-1 M/s Gondwana Ispat Limited.
39. As regard the fact recorded in the minutes of 20 th Screening Committee meeting that representatives of the company stated that they have approached MIDC for land and who have given consent for 20 acres of land, it was submitted that the said fact was correctly recorded and the company made no misrepresentation in this regard before the Screening Committee. Reference in this regard was made to communication made by the company with MIDC seeking allocation of 10-20 acres of land in Chandrapur area, Maharashtra. It was submitted that MIDC had conveyed to the company that 10-20 acres of land in Warora Industrial area is available and the company was called upon to submit all necessary documents for seeking allocation of the land. It was however submitted that on account of their being no firm allocation of a coal block in favour of the company so the necessary documents were not submitted to MIDC. It was however pointed out that from the aforesaid communication of MIDC regarding availability of 10-20 acres of land, it was clearly inferable that land was available with MIDC and which it was willing to allot to A-1 M/s Gondwana Ispat Limited. It was this consent of MIDC to allot land which was stated before the 20 th Screening Committee.
40. As regard non development of coal mine and establishing of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 34 of 216 end use plants or transfer of equity by A-2 Ashok Daga in favour of Nand Kishore Sarda and thereby earning undue amount of Rs. 1.55 crore, it was submitted that from the evidence led on record it is crystal clear that on account of difference between A-2 Ashok Daga and his brother Sh. Govind Das Daga who was also the co-promoter of A-1 M/s Gondwana Ispat Limited, A-2 Ashok Daga had to transfer his equity. It was also submitted that no undue amount was earned by A-2 Ashok Daga as Rs. 1.55 crore was only towards sweat money ie. towards the hard work put in by A-2 Ashok Daga in carrying out various works on behalf of A-1 M/s Gondwana Ispat Limited.
41. It was also submitted that admittedly there was no restriction put by Ministry of Coal or by any other department towards transfer of equity by shareholder of any allocattee company and thus the said transfer of shares does not constitute violation of any condition much less any offence of cheating. It was also submitted that prosecution has miserably failed in proving that there was any malafide intention on the part of A-2 Ashok Daga at any point of time much less from the time allocation of captive coal block was sought in favour of A-1 M/s Gondwana Ispat Limited.
42. As regard the charge of conspiracy, it was submitted that as per the prosecution case itself A-2 Ashok Daga was the brain behind all the acts of A-1 M/s Gondwana Ispat Limited and thus A-2 Ashok Daga could not have conspired with himself qua commission of any offence of conspiracy. It was submitted that the company being a juristic person could not have acted on its own and thus if A-2 Ashok CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 35 of 216 Daga was the brain behind the acts of A-1 M/s Gondwana Ispat Limited then the mandatory requirement of there being two minds to enter into any agreement of conspiracy does not stand fulfilled. Charge of conspiracy was also thus stated to be not made out. It was in the light of aforesaid arguments submitted that prosecution has miserably failed in proving charge for any offence against A-2 Ashok Daga. He was thus prayed to be acquitted.
43. In support of his arguments Ld. Senior Advocate placed reliance upon the following case law:
S. Title Citation
No.
1 Hira Lal Hari Lal Bhagwati v CBI, New Delhi (2003) 5 SCC 257
2 GV Rao v LHV Prasad & Ors (2000) 3 SCC 693
3 Sait Tarajee Khimchand & Others v. Yelamarti (1972) 4 SCC 562
Satyam
4 Ramji Dayawala & Sons (P) Ltd v. Invest (1981) 1 SCC 80
Import
5 Rakesh Mohindra v. Anita Beri & Others (2016) 16 SCC 483
6 Govindaraju @ Govinda v. State by (2012) 4 SCC 722
Shriramapuram Police Station & Another
7 Takhaji Hiraji v. Thakore Kubersing (2001) 6 SCC, 3 Judge
Chamansing Bench
8 Aher Raja Khima v. State of Saurashtra (1955) 2 SCR 1285 (3
Judge Bench)
9 Hate Singh Bhagat Singh v. State of Madhya AIR 1953 SC 468, (3
Pradesh Judge Bench)
10 Jai Narain Parasrampuria (Dead) and Others (2006) 7 SCC 756
v. Pushpa Devi Saraf and Others
11 Asian Hotels Ltd v. Delhi Development 1998 (46) DRJ, Delhi
Authority High Court
12 G.K. Palaniswami v. Sri Nandhi Transports (P) ILR 1967 (3) Madras 80
Ltd & Others
13 Radhakrishna Ananta Prabhu and Others v. 1992 Mh. L.J. 836
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 36 of 216
M/s Giri Construction and others Bombay High Court
14 Lindsay International Pvt. Ltd v. Laxmi Niwas 2017 SCC Online Cal
Mittal 14920
15 Commissioner of Wealth Tax Madras v. AIR 1967 SC 509
Ramaraju Surgical Cotton Mills Ltd.
16 Western India Vegetable Products Ltd v. AIR 1955 Bombay 13
Commissioner of Income Tax, Bombay City
44. Subsequently written arguments were also filed on record by Ld. Counsels for both the accused persons.
45. I have carefully perused the record.
46. Before I advert on to discuss the prosecution case qua various head of charges framed against the accused persons, it will be appropriate to briefly deal with one argument though raised very feebly by Ld. Sr. Advocate Sh. Mohit Mathur while addressing oral arguments on behalf of A-2 Ashok Daga. It was submitted by Ld. Senior Advocate that the charges framed against the accused persons are not correctly framed. It was submitted that the necessary ingredients of the offence of cheating have not been mentioned in the various charges framed against the accused persons and thus on account of the same the entire trial was bad in law. It was submitted that nothing was mentioned in the charges as regard any deception made by the accused or any authority be it Ministry of Coal, Ministry of Steel or Department of Mining and Geology, Government of Maharashtra, having been induced by any such deception to deliver any property. The charges so framed were thus stated to be defective.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 37 of 216
47. In order to appreciate the said contention it would be however appropriate to first reproduce the charges so farmed in the present matter.
CHARGE-I "CHARGE I, Bharat Parashar, Special Judge, CBI (PC Act) (CBI-07) New Delhi District, Patiala House Courts, New Delhi do hereby charge you i.e. Ashok Daga S/o Late Sunder Lal Daga, the then Director M/s Gondwana Ispat Ltd., 5, Temple Road, Civil Lines, Nagpur, Maharashtra.
That during the year 2000, you Ashok Daga submitted an application dated 22/04/2000 to Ministry of Coal, Govt. of India for allocation of coal block by falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Secondly, during the year 2001, you Ashok Daga submitted another application dated 25/09/2001 to Ministry of Coal, Govt. of India for allocation of Warora West Coal block falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Thirdly, during the year 2001, you Ashok Daga submitted an application dated 25/09/2001 to Ministry of steel, Govt. of India for seeking recommendation of Ministry of Steel to Ministry of Coal for allocation of Warora West Coal block in favour of Gondwana Ispat by falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Fourthly, during the year 2001, an application dated 01/10/2001 was submitted in the name of M/s Gondwana Ispat Ltd. to the Director, Geology and Mining, Govt. of Maharashtra for seeking recommendation of Govt. of Maharashtra to Ministry of Steel for consideration of their case CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 38 of 216 by falsely mentioning that Western Coalfields Ltd. has given no objection for release of Warora Block in favour of Gondwana Ispat and falsely showing Gondwana Ispat as a Ltd. Company. Whereas on that date Gondwana Ispat was not a registered company and thereby you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Fifthly, during the period between 2005 to 2011 you Ashok Daga despite an undertaking/affidavit to Ministry of Coal, did not develop the coal mine and also did not set up the End Use Plant and sold your entire shareholding in Gondwana Ispat Ltd. and thereby obtained undue financial gain of Rs. 1.55 crores over the nationalized natural resources of the country and thereby cheated Govt. of India and thus you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
And I hereby direct you to be tried by this Court for the said offences. Sd/-
(BHARAT PARASHAR) SPECIAL JUDGE, (PC ACT)(CBI-07), NDD/PHC/16.05.2016 The above said charge has been read over and explained to the accused and he is questioned as under:-
Q. Have you understood the charge?
Ans.
Yes.
Q. Do you plead guilty or claim trial?
Ans.
No. I claim trial.
Q. Do you have any objection, if the evidence in trial is recorded in English?
Ans.
No.
RO & AC Sd/-
(BHARAT PARASHAR)
SPECIAL JUDGE, (PC ACT)(CBI-07),
NDD, PATIALA HOUSE COURTS,
16.05.2016/NEW DELHI"
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 39 of 216 CHARGE-II "CHARGE I, Bharat Parashar, Special Judge, CBI (PC Act) (CBI-07) New Delhi District, Patiala House Courts, New Delhi do hereby charge both of you i.e. i. M/s Gondwana Ispat Ltd., 10th Floor, 5, Maker Chamber, Nariman Point, Mumbai - 21, Maharashtra, ii. Ashok Daga S/o Late Sunder Lal Daga, the then Director M/s Gondwana Ispat Ltd., 5, Temple Road, Civil Lines, Nagpur, Maharashtra.
That during the year 2003, both of you in furtherance of the common object of the criminal conspiracy hatched between you both and as described in detail in the separate charge framed, with a view to procure allocation of "Majra coal block"
in favour of M/s Gondwana Ispat Ltd., made false Submission before the 18th Screening Committee about financial tie up with financial institutions and tie up for supply of Iron Ore from Orissa and thereby both of you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Secondly, during the year 2003, both of you in furtherance of the common object of the criminal conspiracy hatched between you both and as described in detail in the separate charge framed, with a view to procure allocation of "Majra coal block" in favour of M/s Gondwana Ispat Ltd., made false Submission before the 20th Screening Committee about procurement of land and tie up for supply of Iron Ore from Orissa and thereby both of you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
And I hereby direct that both of you to be tried by this Court for the said offences.
Sd/-
(BHARAT PARASHAR) SPECIAL JUDGE, (PC ACT)(CBI-07), NDD/PHC/16.05.2016 The above said charge has been read over and explained to both the accused persons and they are questioned as under:-
Q. Have you both understood the charge? Ans.
1. Yes.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 40 of 216
2. Yes.
Q. Do you both plead guilty or claim trial?
Ans.
1. No. I claim trial.
2. No. I claim trial.
Q. Whether you both have any objection, if the evidence in trial is recorded in English?
Ans.
1. No.
2. No. RO & AC Sd/-
(BHARAT PARASHAR) SPECIAL JUDGE, (PC ACT)(CBI-07), NDD, PATIALA HOUSE COURTS, 16.05.2016/NEW DELHI"
CHARGE-III "CHARGE I, Bharat Parashar, Special Judge, CBI (PC Act) (CBI-07) New Delhi District, Patiala House Courts, New Delhi do hereby charge both of you i.e. i. M/s Gondwana Ispat Ltd., 10th Floor, 5, Maker Chamber, Nariman Point, Mumbai - 21, Maharashtra, ii. Ashok Daga S/o Late Sunder Lal Daga, the then Director M/s Gondwana Ispat Ltd., 5, Temple Road, Civil Lines, Nagpur, Maharashtra.
That during the period between 2000 to 2011 at Maharashtra, Delhi and other places, both of you entered into a criminal conspiracy, the object of which was to cheat Ministry of Coal, Ministry of Steel, Government of India and Govt. of Maharashtra and thereby procure allocation of "Majra Coal Block" situated in Chanderpur District of Maharashtra in favour of M/s Gondwana Ispat Ltd. by making false submissions and by falsely showing M/s Gondwana Ispat as a registered limited company and by making false representation about financial preparedness and tie up of supply of Iron Ore from Orissa to gain undue financial gain and thereby both of you committed the offence of criminal conspiracy being punishable u/s 120-B IPC and within my cognizance.
Secondly, during the aforesaid period and in furtherance of the aforesaid common object of the criminal conspiracy as described above, both of you did various acts of cheating as CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 41 of 216 menitioned in the separate charges framed against you Ashok Daga and M/s Gondwana Ispat Ltd. and thereby committed the offence punishable u/s 120-B r/w 420 IPC and within my cognizance.
And I hereby direct that both of you to be tried by this Court for the said offences.
(BHARAT PARASHAR) SPECIAL JUDGE, (PC ACT)(CBI-07), NDD/PHC/16.05.2016 The above said charge has been read over and explained to both the accused persons and they are questioned as under:-
Q. Have you both understood the charge?
Ans.
1. Yes.
2. Yes.
Q. Do you both plead guilty or claim trial?
Ans.
1. No. I claim trial.
2. No. I claim trial.
Q. Whether both of you have any objection, if the evidence in trial is recorded in English?
Ans.
1. No.
2. No. RO & AC Sd/-
(BHARAT PARASHAR) SPECIAL JUDGE, (PC ACT)(CBI-07), NDD, PATIALA HOUSE COURTS, 16.05.2016/NEW DELHI"
[For the sake of convenience of referring the various head of charges in the subsequent part of present judgement the three sets of charges have been numbered as "Charge-I, Charge-II and Charge-III"]
48. A bare perusal of the aforesaid charges so framed however clearly show that the manner of committing the alleged offences has been duly mentioned beside also specifically mentioning that thereby the offence of cheating has been committed by the accused so charged. Thus even if the specific words that deception was fraudulently or dishonestly made or thereby the authority concerned CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 42 of 216 was induced to deliver any property or to do any act or omit to do anything which he would not do or omit if he were not so deceived, is not mentioned in the charge, still as the offence for which the accused persons have been charged i.e. offence of "cheating" has been specifically mentioned so in my considered view, accused duly understood not only the offences for which he has been charged but also the facts constituting the said offences including the acts for which he has been tried. Moreover it has not been the case of accused at any point of time right upto the stage of final arguments that he in any manner stood prejudiced by the language used in the framing of charge. Not only the manner of committing the offence has been duly spelled out in the charges so framed but even the specific name of the offence "Cheating" has been clearly mentioned in the charges. In fact in the written submissions filed on behalf of the two accused persons no such plea was at all taken. A perusal of the written submissions rather also show that the charges for which the two accused persons were tried were well understood by them and they contested the case of prosecution accordingly. Thus though at the cost of repetition, it is stated that while there is no error in the framing of charge but even if omission of any specific fact in the language used is considered as an error then in view of S. 215 Cr.PC, the said error becomes completely immaterial as the accused was not misled by any such error or omission and neither it has been claimed that any failure of justice has taken place nor any such omission has resulted in any failure of justice.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 43 of 216 Whether a company registered under Indian Companies Act, 1956, could only apply for allocation of a coal block under Coal Mines (Nationalization) Act, 1973 as it stands amended by CMN (Amendment) Act, 1993.
49. I thus now proceed to deal with the case of prosecution qua each head of charge. One of the main issue raised by prosecution in the present case is that only a company registered under Indian Companies Act, 1956 could have applied for allocation of a captive coal block under section 3 of Coal Mines (Nationalisation) Act, 1973 (CMN Act, 1973). It has been submitted that as the company "Gondwana Ispat Ltd." admittedly got registered only on 05.10.2001 so all the applications submitted by A-2 Ashok Daga on behalf of "Gondwana Ispat Ltd." to various Government departments i.e. Ministry of Coal, Ministry of Steel or to Department of Mining and Geology, Government of Maharashtra prior to 05.10.2001 while representing himself to be a director of the company were clearly intentional acts undertaken dishonestly so as to cheat all such authorities and thereby obtaining allocation of a captive coal block from MOC. It was submitted that all these facts so concealed from Ministry of Coal were to the knowledge of A-2 Ashok Daga as being false.
50. On the other hand both A-1 M/s GIL and A-2 Ashok Daga have vehemently denied that only a registered company could have applied for allocation of a captive coal block under CMN Act, 1973. It was submitted that under CMN Act, 1973, the restriction provided in Section 3 was that mining operations shall be carried out only by a company registered under Indian Companies Act, 1956 and by no CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 44 of 216 one else. It was thus submitted that there was no restriction under CMN Act, 1973 on an individual or a firm much less a company to apply for allocation of a coal block.
In these circumstances, it will be thus appropriate that the aforesaid issue is first discussed as a finding on the said issue will have a direct bearing in appreciating the evidence led by the prosecution qua various head of charges so framed.
51. The main crux of the prosecution case is primarily on the fact that on 22.04.2000, an application seeking allocation of "Ekarjuna Extension" coal block was submitted to MOC by A-2 Ashok Daga on a letter head purporting to be that of "Gondwana Ispat Ltd." and he signed the application as Director thereof, knowing fully well that no such company actually exists. While relying upon the provisions of Section 3 CMN Act, 1973, it has been asserted by the prosecution that only a company engaged in the production of iron ore and steel, generation of power, washing of coal obtained from a mine or in such other end use as the Central Government by way of a notification specify could have applied for allocation of a coal mine. The definition of a company as given in S. 2 (c), CMN Act, 1973 was also referred to as meaning a company defined in S. 3 of the Companies Act, 1956. It was thus submitted that A-2 Ashok Daga knowingly and dishonestly misrepresented himself to be a Director of GIL when in fact no such company actually existed. It was thus submitted that A-2 Ashok Daga clearly attempted to cheat MOC by inducing them to allot a coal block in favour of a non-existent entity. It was further CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 45 of 216 submitted that fortuitously it was on account of certain technical reasons i.e. the requirement of coal stated in the application being less than the stipulated quantity as per the guidelines of MOC and "Ekarjuna Extension" coal block, was not included in the list of identified captive coal blocks and thus the said application dated 22.04.2000 came to be rejected by MOC.
52. On the other hand, it has been argued on behalf of A-2 Ashok Daga that as per Section 3, CMN Act, 1973, the restriction is only to the effect that a company engaged in specific end use as are mentioned therein shall only carry out coal mining operation. It was thus submitted that there is no restriction in the Act that for submitting an application for allotment of a coal block, the applicant need to be a company duly registered under Indian Companies Act, 1956 only. It was submitted that an individual, a firm or association of persons could have also applied for allocation of a captive coal block.
53. Reliance in this regard was also placed by Ld. Defence Counsels on the minutes of 2 nd Screening Committee Ex. PW 13/DX- 15 (Colly) (D-69), minutes of 3rd Screening Committee Ex. PW 1/DX- 16 (D-69) and minutes of 4th Screening Committee (Ex. PW 13/DX- 16 (D-70), stating that not only in the body of the minutes of the Screening Committee there is a reference to the "representatives of firms/Power generating companies" but also in annexure-II of the said minutes where the names of representatives of various applicants who were in attendance is mentioned, the title at the top, read as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 46 of 216 "Names of representatives of firms/power generating companies who were in attendance"
54. The format of mining lease form Ex. PW 13/DX-17 (D-4) was also referred to while submitting that the same refers to even the cases where the lessee is an individual or are more than one individual or is a registered firm. It was thus submitted that as per the said format of mining lease i.e. Form-K provided in the Mineral Concession Rules, 1960 it is clear that an individual or more than one individual or a registered firm could have also applied for allocation of a captive coal block to MOC. It was also argued by Ld. Counsel for A- 2 Ashok Daga that even otherwise the acts of accused stood ratified by the company M/s GIL after it got incorporated on 05.10.2001. It was also submitted that the application dated 22.04.2000 submitted by A-2 Ashok Daga should be thus treated as a pre-incorporation agreement and the same was permissible under the law. It has also been submitted by Ld. Counsel that even at the time of moving of the said application i.e. on 22.04.2000, the name "Gondwana Ispat Ltd." was already approved by Registrar of Companies as being available for registration of the proposed company. It was further submitted that the said name as per the rules of registration of a company was thus available to A-2 Ashok Daga who was a co-promoter of the company for a period of 6 months for getting a company registred in the said name.
55. At the same time Ld. Counsel Sh. Subhash Gulati for A-1 M/s Gondwana Ispat Ltd. also submitted that the word "company" means any body corporate and included a firm or other association of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 47 of 216 individuals. Reference in this regard was made by him to explanation provided under section 31, CMN Act, 1973 wherein "company" was stated to mean any body corporate and including a firm or other association of individuals.
MY DISCUSSION AND CONCLUSION
56. In order to appreciate the aforesaid arguments it would be appropriate to first have a glance over Section 2 (c), Section 3 and Section 31 of CMN Act, 1973. The said Sections read as under:
"2. Definitions. In this Act, unless the context otherwise requires,--
(a) . . . . . .
(b) . . . . . .
(c)" company" means a company as defined in section 3 of the Companies Act, 1956 (1 of 1956 ), and includes a foreign company within the meaning of section 591 of that Act;
. . . . . .
. . . . . .
. . . . . .
3. ACQUISITION OF RIGHTS OF OWNERS IN RESPECT OF COAL MINES. (1) On the appointed day, the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all incumbrances. (2)1 (x x x x x) (3) On and from the commencement of Section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976:--
(a) no person, other than--
(i) the Central Government or a Government, company or a corporation owned, managed or controlled by the Central Government, or
(ii) a person to whom a sub- lease, referred to in the proviso to Cl. (c), has been granted by any such Government, company or corporation, or CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 48 of 216
(iii) a company engaged in--
(1) the production of iron and steel, (2) generation of power, (3) washing of coal obtained from a mine, or (4) such other end use as the Central Government may, by notification, specify.
shall carry on coal mining operation, in India, in any form;
(b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in Cl. (a), and any sub-lease granted by any such Government, company or corporation, all other mining leases and sub-leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated;
(c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in Cl. (a):
Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sub- lease to any person in any area on such terms and conditions as may be specified in the instrument granting the sub- lease, if the Government, company or corporation is satisfied that--
(i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a co- ordinated and integrated manner, and
(ii) the coal produced by the sub-lease will not be required to be transported by rail.
. . . . . .
. . . . . .
. . . . . .
31. Offences by companies.
(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 49 of 216 company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub- section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.-- For the purposes of this section,--
(a) " company" means any body corporate and includes a firm or other association of individuals; and
(b) " director", in relation to a firm, means a partner in the firm.
(Emphasis supplied by me)"
57. A bare perusal of the aforesaid sections clearly show that in so far as the meaning of the word "Company" has been mentioned in Explanation to S. 31 CMN Act, 1973, the same is only for the purposes of said section only and not for other provisions of the Act. The explanation starts with the words "For the purposes of this Section". Similarly S. 2 which provides definition of various terms used in the Act starts with the Clause "In this Act, unless the context otherwise requires".
58. Thus the submission of Ld. Counsel for A-1 M/s GIL that the word "Company" for the purposes of Section 3 of the Act be read as CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 50 of 216 meaning any body corporate and including a firm or other association of individuals does not hold ground at all as for the purposes of S. 3 CMN Act, 1973, the meaning of the word "Company" has to be read as the one given in S. 2 (c) CMN Act, 1973 i.e. a company as defined in S. 3 of Companies Act, 1956. Further Section 3 (1) (i) Companies Act, 1956 defines "Company" as under:
"3. (1) (i) "company" means a company formed and registered under this Act or an existing company as defined in clause (ii);
(i) . . . . . .
. . . . . ."
59. As regard the submission of Ld. Counsel for A-2 Ashok Daga that Section 3 CMN Act, 1973, only mandates that the mining operation shall not be carried out by anyone except a company and it does not bar any person other than a company to apply for allocation of a coal block, it will be worthwhile to reproduce certain observations of Hon'ble Supreme Court as were made in its order dated 25.08.2014 passed in the case Manohar Lal Sharma V. Union of India, (2014) 9 SCC 516. In the said order Hon'ble Supreme Court extensively dealt with the provisions of various Acts governing mining operations in the country qua various types of minerals and especially coal. The provisions of Mines and Minerals Development and Regulation Act, 1957 (MMDR Act, 1957). Coal Mines (Taking over of Management) Act, 1973, Coal Mines (Nationalization Act) 1973, Coal Mines (Nationalization) Amendment Act, 1976, Coal Mines (Nationalization) Amendment Act, 1993 and other notifications dated 15.03.1996 and 12.07.2007 were extensively dealt with beside also dealing with the interplay between the provisions of MMDR Act, 1957 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 51 of 216 and CMN Act, 1973.
Para 30 to Para 39 from the said order dated 25.08.2014 would be thus worth referring to at this stage of the matter.
"30. In short, the 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining prospecting licences or mining leases in respect of lands in which the minerals vest in the government, the rule- making power for regulating the grant of prospecting licences and mining leases, special powers of Central Government to undertake prospecting or mining operations in certain cases, and for development of minerals.
31. The Coal Mines (Taking Over of Management) Act, 15 of 1973, (for short, 'Coal Mines Management Act') was passed, "to provide for the taking over, in the public interest, of the management of coal mines, pending nationalisation of such mines, with a view to ensuring rational and coordinated development of coal production and for promoting optimum utilisation of the coal resources consistent with the growing requirements of the country, and for matters connected therewith or incidental thereto."
32. The Coal Mines Management Act received the assent of the President on 31.03.1973 but it was made effective from 30.01.1973 except Section 8(2) which came into force at once. Section 3(1) provides that on and from the appointed day (that is, 31.01.1973) the management of all coal mines shall vest in the Central Government. By Section 3(2), the coal mines specified in the Schedule shall be deemed to be the coal mines the management of which shall vest in the Central Government under sub-section (1). Under the proviso to Section 3(2), if, after the appointed day, the existence of any other coal mine comes to the knowledge of the Central Government, it shall by a notified order make a declaration about the existence of such mine, upon which the management of such coal mine also vests in the Central Government and the provisions of the Act become applicable thereto.
33. Immediately after the Coal Mines Management Act, the Parliament enacted the CMN Act. CMN Act was passed, "to provide for the acquisition and transfer of the right, title and interest of the owners in respect of coal mines specified in the Schedule with a view to reorganising and reconstructing any such coal mines so as to ensure the rational, coordinated and CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 52 of 216 scientific development and utilisation of coal resources consistent with the growing requirements of the country, in order that the ownership and control of such resources are vested in the State and thereby so distributed as best to subserve the common good, and for matters connected therewith or incidental thereto."
34. Section 2(b) of the CMN Act defines a coal mine in the same manner as the corresponding provision of the Coal Mines Management Act, namely, a mine "in which there exists one or more seams of coal". Section 3(1) provides that on the appointed day (i.e., 01.05.1973) the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in the Central Government free from all encumbrances. Section 4(1) provides that where the rights of an owner under any mining lease granted, or deemed to have been granted, in relation to a coal mine, by a State Government or any other person, vest in the Central Government under Section 3, the Central Government shall, on and from the date of such vesting, be deemed to have become the lessee of the State Government or such other person, as the case may be, in relation to such coal mine as if a mining lease in relation to such coal mine had been granted to the Central Government. The period of such lease is to be the entire period for which the lease could have been granted by the Central Government or such other person under the 1960 Rules and thereupon all the rights under the mining lease granted to the lessee are to be deemed to have been transferred to, and vested in, the Central Government. By Section 4(2) on the expiry of the term of any lease referred to in sub-section (1), the lease, at the option of the Central Government, is liable to be renewed on the same terms and conditions on which it was held by the lessor for the maximum period for which it could be renewed under the 1960 Rules. Section 5(1) empowers the Central Government under certain conditions to direct by an order in writing that the right, title and interest of an owner in relation to a coal mine shall, instead of continuing to vest in the Central Government, vest in the Government company. Such company, under Section 5(2), is to be deemed to have become the lessee of the coal mine as if the mining lease had been granted to it. By Section 6(1), the property which vests in the Central Government or in a government company is freed and discharged from all obligations and encumbrances affecting it. Section 8 requires that the owner of every coal mine or group of coal mines specified in the second column of the Schedule shall be given by the Central Government in cash and in the manner specified CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 53 of 216 in Chapter VI, for the vesting in it under Section 3 of the right, title and interest of the owner, an amount equal to the amount specified against it in the corresponding entry in the fifth column of the Schedule. By Section 11(1), the general superintendence, direction, control and management of the affairs and business of a coal mine, the right, title and interest of an owner in relation to which have vested in the Central Government under Section 3 shall vest in the Government company or in the Custodian, as the case may be.
35. The CMN Act came to be amended by the Coal Mines (Nationalisation) Amendment Ordinance which was promulgated on 29.04.1976. The Ordinance was replaced by the Coal Mines (Nationalisation) Amendment Act, 1976 (for short, '1976 Nationalisation Amendment Act'). A new section, Section 1-A was inserted by which it was declared that it was expedient in the public interest that the Union should take under its control the regulation and development of coal mines to the extent provided in sub-sections (3) and (4) of Section 3 and sub-section (2) of Section 30 of the CMN Act. By sub-section (2) of Section 1-A, the declaration contained in sub-section (1) was to be in addition to and not in derogation of the declaration contained in Section 2 of the 1957 Act. By Section 3 of the 1976 Nationalisation Amendment Act, a new sub-section (3) was introduced in Section 3 of the principal Act. Under clause (a) of the newly introduced sub-section (3) of Section 3, on and from the commencement of Section 3 of the 1976 Nationalisation Amendment Act, no person other than
(i) Central Government or a Government company or a corporation owned, managed or controlled by the Central Government or (ii) a person to whom a sub-lease, referred to in the proviso to clause (c) has been granted by any such Government, company or corporation or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation, in India in any form. Under clause (b) of sub- section (3), excepting the mining leases granted before the 1976 Nationalisation Amendment Act in favour of the Government company or corporation referred to in clause (a), and any sub-lease granted by any such Government, Government company or corporation, all other mining leases and sub-leases in force immediately before such commencement shall insofar as they relate to the winning or mining of coal, stand terminated. Clause (c) of the newly introduced sub- section (3) of Section 3 provides that no lease for winning or mining coal shall be granted in favour of any person other than the Government, Government company or corporation referred to in clause (a). Under the proviso to CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 54 of 216 clause (c), the Government, Government company or the corporation to whom a lease for winning or mining coal has been granted may grant a sub-lease to any person in any area if, (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner, and (ii) the coal produced by the sub-lessee will not be required to be transported by rail. By sub-section (4) of Section 3, where a mining lease stands terminated under sub-section (3), it shall be lawful for the Central Government or a Government company or corporation owned or controlled by the Central Government to obtain a prospecting licence or mining lease in respect of the whole or part of the land covered by the mining lease which stands terminated. Section 4 of the 1976 Nationalisation Amendment Act introduces an additional provision in Section 30 of the principal Act by providing that any person who engages, or causes any other person to be engaged, in winning or mining coal from the whole or part of any land in respect of which no valid prospecting licence or mining lease or sub-lease is in force, shall be punishable with imprisonment for a term which may extend to two years and also with fine which may extend to Rs.10,000/-.
36. By the Coal Mines (Nationalisation) Amendment Act, 1993 (for short, '1993 Nationalisation Amendment Act'), the CMN Act was further amended. The Statement of Objects and Reasons of the 1993 Nationalisation Amendment Act reads thus:
"Considering the need to augment power generation and to create additional capacity during the eighth plan, the Government have taken decision to allow private sector participation in the power sector. Consequently, it has become necessary to provide for coal linkages to power generating units coming up in the private sector. Coal India Limited and Neyveli Lignite Corporation Limited, the major producers of coal and lignite in the public sector, are experiencing resource constraints. A number of projects cannot be taken up in a short span of time. As an alternative, it is proposed to offer new coal and lignite mines to the proposed power stations in the private sector for the purpose of captive end use. The same arrangement is also considered necessary for other industries who would be handed over coal mines for captive end use. Washeries have to be encouraged in the private sector also to augment the availability of washed coal for supply to steel plants, power houses, etc. Under the Coal Mines (Nationalisation) Act, 1973, coal mining is exclusively reserved for the public sector, except in case of companies engaged in the production of iron and steel, and mining in isolated small CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 55 of 216 pockets not amenable to economical development and not requiring rail transport. In order to allow private sector participation in coal mining for captive use for purpose of power generation as well as for other captive end uses to be notified from time to time and to allow the private sector to set up coal washeries, it is considered necessary to amend the Coal and Coal Mines (Nationalisation) Act, 1973.
The Coal Mines (Nationalization) Amendment Bill, 1992 seeks to achieve the aforesaid objectives."
37. Section 3 of the CMN Act was amended and thereby in clause (a) of sub-section (3) for item (iii), the following was substituted, namely,
(iii) a company engaged in - (1) the production of iron and steel, (2) generation of power, (3) washing of coal obtained from a mine, or (4) such other end use as the Central Government may, by notification, specify.
38. By further Notification dated 15.03.1996, the Central Government specified production of cement to be an end-use for the purposes of the CMN Act.
39. By another Notification dated 12.07.2007, the Central Government specified production of syn-gas obtained through coal gasification (underground and surface) and coal liquefaction as end uses for the purposes of the CMN Act."
60. Thus from the aforesaid observations of Hon'ble Supreme Court, it is clear that the argument that CMN Act, 1973 only mandates that the coal mining operations shall not be carried out by anyone except a company and that it does not bar any person other than a company to apply for allocation of a coal block is per se fallacious.
61. By virtue of the Amendment Act of 1993 vide which CMN Act, 1973 was amended by Government of India, the mining of coal blocks by private companies engaged in specific end uses was permitted. It was pursuant to the said amendment only that number of private companies started applying for allocation of various coal blocks for their captive use. It is also an undisputed position that the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 56 of 216 coal blocks were permitted to be alloted for captive use only. Even in the present case allocation of "Ekarjuna Extension" coal block or "Warora Coal Block" or "Majra-Belgaon" coal blocks was being sought by the accused persons for captive use only. Thus if an application for allocation of a coal block could have been made by any entity other than a company as defined under S. 2 (c) CMN Act, 1973 than the same would have been allotted to the said entity only by MOC for its captive use. In that situation if the said entity was not a company registered under Indian Companies Act, 1956 then as per S. 3 CMN Act, 1973 no coal mining operation could have been carried out by the said allocatee entity. The very purpose of allocating the coal block would have thus stood frustrated. Thus the aforesaid argument that Section 3 CMN Act, 1973 does not bar an entity other than a company to apply for a captive coal block emanates completely from a misreading of the provisions of the Act and is contrary to the objects and reasons for which CMN (Amendment) Act, 1993 was introduced. It is thus crystal clear that only a company as defined in S. 2(c) CMN Act, 1973 i.e. a company registered under Indian Companies Act, 1956 could have applied for allocation of a coal block for its captive use. Further Section 2 (j) defines a " Mining Company" as a company owning a coal mine and thus once again it is clear that coal mining operation as mentioned in Section 3 of the Act could have been carried out by a company owning a coal mine only. Accordingly it is only a company duly registered under Indian Companies Act, 1956 which could have applied for allocation of a coal block for captive use.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 57 of 216
62. As regard the contention of Ld. Counsels for the accused persons that in the minutes of 2 nd, 3rd and 4th Screening Committee meetings there is reference to the words "Representatives of the firms/power generating companies" and the said fact show that entities other than companies were also being entertained by MOC, it would be suffice to state that the said minutes of 2 nd, 3rd and 4th Screening Committee meetings clearly appear to have been recorded very loosely. The said conclusion is also inferable from the fact that the title of the said minutes on the other hand only talks of "power generating companies" and of no other entity. It is only while referring to the representatives present that the minutes in the body as well as in annexure-II, mentions the words "Representatives of the firms/power generating companies". Moreover in the minutes of 3 rd Screening Committee, Ex. PW 1/DX-16 (D-69), it is mentioned in the body itself that the functions of the Committee have been extended to consider proposals for captive mining received from companies engaged in the manufacturing of iron and steel. The minutes further also talks of power generating companies. Thus in these circumstances from the mere fact that while referring to the representatives present the words "Firm/power generating companies" have been mentioned, it can not be inferred that the "firms" could have also applied for allocation of a captive coal block. Moreover minutes of subsequent Screening Committee meetings and especially that of 18th and 20th Screening Committee meetings which are relevant to the facts of present case does not talk of any such firms or individual applying for allocation of a captive coal block. In this regard it will be also worthwhile to mention that even otherwise CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 58 of 216 the aforesaid minutes of 2nd, 3rd or 4th Screening Committee meetings can not have overriding effect over the provisions of Statute i.e. CMN Act, 1973 or that of Companies Act, 1956.
63. As regard the mining lease form i.e. Form-K Ex. PW 13/DX- 17, it would be suffice to state that the said Form-K is a general form for execution of mining lease(s) as provided in Rule 31 of Mining Concession Rules, 1960. The said rules have been framed u/s 13 of MMDR Act, 1957 which deals with various kinds of minerals and their mining operations. Thus Form-K as provided in the Mining Rules, 1960 deals with the mining lease to be so executed by the State Governments qua various such minerals and accordingly the prescribed format under the rules gives alternate options so that appropriate mining leases for different kinds of minerals may be executed in accordance with the said prescribed format while deleting non-applicable portions. Thus it can not be stated that as the prescribed format talks of lessee being an individual or more than one individual or a firm, so the said prescribed format will have the overriding effect over the provisions of CMN Act, 1973 as stood amended by Coal Mines (Nationalisation) Amendment Act, 1993.
In this regard it will be also worthwhile to now refer to some further observations of Hon'ble Supreme Court as were made in its order dated 25.08.2014 passed in the case Manohar Lal Sharma V. Union of India (Supra), as regard the inter play between MMDR Act, 1957 and CMN Act, 1973. Para 57 and Para 58 of the order will be worth reproducing in this regard.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 59 of 216 "57. 1957 Act provides for general restrictions on undertaking prospecting and mining operations, the procedure for obtaining reconnaissance permits, prospecting licences and mining leases and the rule making power of regulating the grant of reconnaissance permits, prospecting licences and mining leases. Clause (a) of sub-section (3) of Section 3 of the CMN Act enables persons specified therein only to carry on coal mining operation. In clause (c), it is provided that no lease for winning or mining coal should be granted in favour of any person other than the Government, Government company or corporation referred to in clause (a). Under clause (b) of sub- section (3), excepting the mining leases granted before 1976 in favour of the Government, Government company or corporation referred to in clause (a) and any sub-lease(s) granted by any such Government, Government company or corporation, all other mining leases and sub-leases in force immediately before such commencement insofar as they relate to the winning or mining of coal stand terminated. When a sub-lease stands terminated under sub-section (3), sub-section (4) of Section 3 provides that it shall be lawful for the Central Government or the Government company or corporation owned or controlled by the Central Government to obtain a prospecting licence or a mining lease in respect of whole or part of the land covered by mining lease which stands so terminated. The above provisions in the CMN Act, as inserted in 1976, clearly show that the target of these provisions in the CMN Act is coal mines, pure and simple. CMN Act effectively places embargo on granting the leases for winning or mining of coal to persons other than those mentioned in Section 3(3)(a). Does CMN Act for the purposes of regulation and development of mines to the extent provided therein alter the legal regime incorporated in the 1957 Act? We do not think so. What CMN Act does is that in regard to the matters falling under the Act, the legal regime in the 1957 Act is made subject to the prescription under Section 3(3)(a) and (c) of the CMN Act. 1957 Act continues to apply in full rigour for effecting prescription of Section 3(3)(a) and (c) of the CMN Act. For grant of reconnaissance permit, prospecting licence or mining lease in respect of coal mines, the MMDR regime has to be mandatorily followed. 1957 Act and so also the 1960 Rules do not provide for allocation of coal blocks nor they provide any mechanism, mode or manner of such allocation.
58. Learned Attorney General submits that an application for allocation of a coal block is not dealt with by the 1957 Act and, therefore, consideration of proposals for allocation of coal blocks does not contravene the provisions of the 1957 Act. The submission of the learned Attorney General does not merit CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 60 of 216 acceptance for more than one reason. First, although the Central Government has pre-eminent role under the 1957 Act inasmuch as no reconnaissance permit, prospecting licence or mining lease of coal mines can be granted by the State Government without prior approval of the Central Government but that pre-eminent role does not clothe the Central Government with the power to act in a manner in derogation to or inconsistent with the provisions contained in the 1957 Act. Second, the CMN Act, as amended from time to time, does not have any provision, direct or indirect, for allocation of coal blocks. Third, there are no rules framed by the Central Government nor is there any notification issued by it under the CMN Act providing for allocation of coal blocks by it first and then consideration of an application of such allottee for grant of prospecting licence or mining lease by the State Government. Fourth, except providing for the persons who could carry out coal mining operations and total embargo on all other persons undertaking such activity, no procedure or mode or manner for winning or mining of coal mines is provided in the CMN Act or the 1960 Rules or by way of any notification. Fifth, even in regard to the matters falling under CMN Act, such as prescriptive direction that no person other than those provided in Sections 3(3) and 3(4) shall carry on mining operations in the coal mines, the legal regime under the 1957 Act, subject to the prescription under Sections 3(3) and 3(4), continues to apply in full rigour. Mr. Harish N. Salve, learned senior counsel for the interveners, is not right in his submission that allocation letter issued by the Central Government is the procedure which regulates the exercise under Rule 22 of the 1960 Rules. Had that been so, some provisions to that effect would have been made in the CMN Act or the 1960 Rules framed thereunder but there is none."
(Emphasis supplied by me)
64. Thus from the aforesaid discussion it is crystal clear that for seeking allocation of a captive coal block under CMN Act, 1973 as amended by CMN (Amendment) Act, 1993 it is mandatory that the applicant should be a company duly registered under Indian Companies Act, 1956.
65. Having so concluded, I now propose to deal with the case of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 61 of 216 prosecution qua various head of charges as have been reproduced earlier. Initially the prosecution case shall be discussed qua the charges framed against A-2 Ashok Daga only.
CHARGE-I
(i) "That during the year 2000, you Ashok Daga submitted an application dated 22/04/2000 to Ministry of Coal, Govt. of India for allocation of coal block by falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance."
66. It is an undisputed and well established fact on record that when on 22.04.2000, the application Ex. PW 1/D (Colly) (D-3) was submitted to MOC for allocation of "Ekarjuna Extension" coal block for captive use by A-2 Ashok Daga on a letter head purporting to be that of "Gondwana Ispat Ltd." and signing it as "Director, Gondwana Ispat Ltd." then at that point of time no such company "Gondwana Ispat Ltd." actually existed. Till that date "Gondwana Ispat Ltd." was admittedly not yet registered as a company under Indian Companies Act, 1956. It is also an undisputed fact that the said request for allocation of "Ekarjuna Extension" coal block was rejected by MOC on the ground that the requirement of coal as mentioned in the application for the purposed sponge iron plant was less than the prescribed quantity as was mentioned in the existing guidelines of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 62 of 216 MOC for allotment of captive coal blocks. It was also found that "Ekarjuna Extension" coal block was also not yet included in the list of identified captive mining blocks which were to be allotted to private parties by MOC. Admittedly these facts were duly communicated to "Gondwana Ispat Ltd." by MOC vide letter dated 01.06.2000 Ex. PW 1/D-1 (D-3).
67. It is in the aforesaid factual matrix, Ld. Counsels for the accused persons have argued that as the impugned application dated 22.04.2000 Ex. PW 1/D (Colly) submitted by A-2 Ashok Daga for allocation of "Ekarjuna Extension" coal block was outrightly rejected by MOC so no offence much less that of cheating was made out as no one stood deceived on the basis of said application and the same also did not result in delivery of any property. Alternatively it was also argued that even otherwise the said application dated 22.04.2000 submitted by A-2 Ashok Daga was in the nature of a pre-incorporation agreement on behalf of the proposed company "Gondwana Ispat Ltd.". It has also been argued that there was no malafide intention on the part of A-2 Ashok Daga in submitting the said application dated 22.04.2000 as prior to it he had applied to the office of ROC seeking availability of the name "Gondwana Ispat Ltd." for getting the proposed company registered and the said name was also made available to him by the office of ROC.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 63 of 216 MY DISCUSSION AND CONCLUSION
68. As regard the contention of Ld. Counsel for A-2 Ashok Daga that there was no guilty intention or mensrea on the part of A-2 Ashok Daga in submitting application dated 22.04.2000 to MOC, it would be suffice to state that mensrea is an element which is always to be inferred from the facts and circumstances of a case. In other words the same is to be seen and inferred from the acts committed by the accused in the overall facts and circumstances of a given case.
69. In a case Devender Kumar Singla Vs Baldev Krishan Singla (2005) 9 SCC 15, relating to the offence of cheating only Hon'ble Supreme Court as regard the proof of dishonest intention observed as under:
"8. As was observed by this Court in Shivanarayan Kabra v. State of Madras, AIR (1967) SC 986 it is not necessary that a false pretence should be made in express words by the accused. It may be inferred from all the circumstances including the conduct of the accused in obtaining the property. In the true nature of things it is not always possible to prove dishonest intention by any direct evidence. It can be proved by number of circumstances from which a reasonable inference can be drawn."
70. Thus, before proceeding further, it would be appropriate to first have a glance over the said application dated 22.04.2000 Ex. PW 1/D (Colly) (D-3) as was submitted by A-2 Ashok Daga on a letter head purporting to be that of "Gondwana Ispat Ltd." and while signing the application as a "Director" of "Gondwana Ispat Ltd.".
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 64 of 216 Gondwana Ispat Ltd.
Ref : GIL/2000 22 April 2000 The Chairman Screening Committee for Captive Coal Block Ministry of Coal Government of India Shastri Bhawan NEW DELHI FAX No. 011 3381670 SUB : APPLICATION FOR ALLOTMENT OF COAL BLOCK FOR CAPTIVE COAL
MINING" EKARJUNA EXTENSION" TEHSIL WARORA - DISTRICT CHANDRAPUR (M.S.) Dear Sir, We are putting up a Sponge Iron Plant of 60,000 Tons/Year capacity in Warora MIDC Industrial Area. We require 0.7 to 0.8 lac ton per year of coal of Ash content < 2096.
We have identified a small 100 Hectare coal Block namely "Ekarjuna Extension" falling within the villages Warora Sahar and Warora Colliery as per enclosed Index/Site Plan in Tehsil Warora, District Chandrapur ( Command Area of WCL ) having approximately 3 Million Tons extractable COAL reserves and is a part of an old ABANDONED MINE, nearly 2 Million Tons coal shall be mined out of the 3 Million Tons Coal reserves. We propose to wash this coal to bring down the Ash content to below 20% and Sulphur content to 0.5% at 75% washing yield, we will be able to extract 1.5 Million Tons of Coal which will serve our requirement for 15 to 20 years.
This Block is not in WCL's Production programme and since this Block is too small in size it would not be economical for WCL to work, also from conservation view point the Coal reserves will be lost for ever, as RAPID encroachment of this coal bearing area is taking place.
In view of the above we request the Screening Committee to allocate this small Coal Block to us for our Captive use for Sponge Iron Plant.
Thanking you, Yours faithfully FOR GONDWANA ISPAT LIMITED Sd/ (Ashok Daga) DIRECTOR.
Encl : Index Map.
Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 65 of 216
71. Thus if the impugned application dated 22.04.2000 is seen then it is apparent on the face of record that there was a deliberate intention on the part of A-2 Ashok Daga in drafting the application in such a manner on a letter head purporting to be that of "Gondwana Ispat Ltd." even though no such company actually existed and by also signing the application as a director of the said company so that no one could ever have any doubt that the applicant entity i.e. "Gondwana Ispat Ltd." is not a registered company or in other words that no such company actually exists.
72. Not only the entire application is completely silent that the applicant entity "Gondwana Ispat Ltd." is not yet registered under Companies Act, 1956 but even by signing the application as a director instead of signing it as a promoter of the proposed company, A-2 Ashok Daga consciously made an effort to dishonestly conceal true and correct facts from MOC. It is also the admitted case of A-2 Ashok Daga that till 22.04.2000 despite ROC having conveyed to him the availability of the name "Gondwana Ispat Ltd." in February 2000 for registration of the proposed company he had not taken any steps towards getting the company registered. No further communication was made by him with ROC in this regard. Thus it was clearly in the realm of presumptions and assumptions that when A-2 Ashok Daga would have taken steps to get the company registered then still the name of "Gondwana Ispat Ltd." would have been made available to him by ROC. I am consciously mentioning the aforesaid fact as it is the admitted case of A-2 Ashok Daga that when in the month of February 2000, the name "Gondwana Ispat Ltd." was made available CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 66 of 216 to him by the office of ROC then the same remained valid for a period of six (6) months only but during the said period of six (6) months he had not taken any steps to get the proposed company registered. It is also the claim of A-2 Ashok Daga only that subsequently in the month of September 2001, i.e. after a gap of about 18 months he had again applied for making the name "Gondwana Ispat Ltd." available to him for getting the proposed company registered and which though was again made available by the office of ROC. The legal position however remains that after expiry of a period of six months of initial availability of a name for the proposed company as conveyed by ROC, no claim could have been made by A-2 Ashok Daga, if some other company would have stood registered with the said name or the said name would have been made available to someone else by ROC for getting a company registered. It was only in September 2001 that the necessary documents were submitted by him to the office of ROC and the company was finally got registered with the name "Gondwana Ispat Ltd." on 05.10.2001 only.
73. Be that as it may, the fact remains that till the time application dated 22.04.2000 was submitted to MOC no steps for getting the company registered was taken by A-2 Ashok Daga except seeking availability of name "Gondwana Ispat Ltd." from the office of ROC for the proposed company. Moreover, in the written submissions submitted on behalf of A-2 Ashok Daga itself it has been stated that mere use of letter head containing the name of a proposed company is at the most a mere violation/contravention of Section 631 of Companies Act, 1956 and which entails imposition of fine only.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 67 of 216 However the important point to be noted over here is that the law prohibits use of letter head of a proposed company. Certainly in the present proceedings we are not concerned with the violation of the provisions of Companies Act, 1956 but only with the fact as to with what intention A-2 Ashok Daga used a letter head purporting to be that of "Gondwana Ispat Ltd." when the company was still not registered under Companies Act, 1956. No explanation at all has been put forward as to why in the application it was not stated by A-2 Ashok Daga that the applicant entity "Gondwana Ispat Ltd." is not yet registered with ROC or that he intends to apply for registration of the same and that he is signing the application only as a promoter of the proposed company. The very fact that he signed the application as Director "Gondwana Ispat Ltd." clearly shows existence of guilty intention on his part. The aforesaid facts and circumstances thus clearly shows his guilty intention in dishonestly misrepresenting to Chairman, Screening Committee, MOC, Government of India, the true status of the applicant entity. This very fact also shows that A-2 Ashok Daga was also well aware that under CMN Act, 1973, it is only a company registered under Companies Act, 1956 which could apply for allocation of a captive coal block. His other submission that he had no knowledge of any such requirement of law is also thus clearly not tenable and is even otherwise not permissible in law.
74. It is however true that fortuitously, the said application dated 22.04.2000 of A-2 Ashok Daga came to be rejected by MOC on certain other technical issues i.e. the requirement of coal expressed in the application was less than the one mentioned in the guidelines CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 68 of 216 issued by MOC for allocation of captive coal blocks. The second equally more important issue was that "Ekarjuna Extension" coal block was not yet included in the list of captive coal blocks which could be allotted to private parties for mining of coal for their captive use. However a perusal of letter dated 01.06.2000 Ex. PW 1/D-1 issued by MOC to M/s Gondwana Ispat Ltd. informing about the aforesaid two grounds on account of which the application dated 22.04.2000 can not be considered further shows that MOC was clearly deceived by letter dated 22.04.2000 submitted by A-2 Ashok Daga in believing that applicant entity "Gondwana Ispat Ltd." actually exists. It is for this reason only that the communication dated 01.06.2000 Ex. PW 1/D-1 of MOC was addressed to "M/s Gondwana Ispat Ltd." only. MOC was thus clearly induced to believe that the applicant entity actually exists being a duly incorporated company. Certainly in the absence of any other facts having been not disclosed in the application dated 22.04.2000 submitted by A-2 Ashok Daga there was no way for the MOC officers to know or even entertain any doubt that the applicant entity is not a registered company under Companies Act, 1956.
75. As regard the submission of Ld. Counsels for the accused persons that the application dated 22.04.2000 can be treated as a pre-incorporation agreement duly recognized under law, I may state that the same is also a completely untenable argument for a variety of reasons.
Firstly the mere submission of an application in the name CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 69 of 216 of a proposed company to a Government authority can not amount to an agreement. What the law recognizes is a "pre-incorporation agreement/contract". Thus mere submission of application could at the most be treated as a prelude for entering into an agreement/contract. In other words, the submission of an application, can at the most be termed as an "offer". The said offer was however rejected by MOC and thus clearly no agreement/contract came into existence. Thus the question of any pre-incorporation agreement/contract having come into existence does not arise.
76. Moreover as already mentioned it was no where disclosed in the application by A-2 Ashok Daga that the same is being submitted on behalf of a proposed company or that he is signing the application as a promoter thereof. It is also not the case of either A-2 Ashok Daga or that of A-1 M/s GIL that at any point of time the act of submitting application dated 22.04.2000 to MOC for seeking allocation of "Ekarjuna Extension" coal block was ratified by the company after it got registered with ROC on 05.10.2001. It is rather the argument put- forth on behalf of the accused persons that their subsequent application submitted on 25.09.2001 for allocation of "Warora coal block" and thereafter another application letter dated 13.06.2002 for allocation of "Majra-Belgaon" coal blocks as an alternate to "Warora coal block" ought to be treated as separate acts and not be considered as part of a series of acts. Nothing has been even argued or placed on record to show that at any point of time company "Gondwana Ispat Ltd." by any overt or covert act ratified the act of submission of application dated 22.04.2000 by A-2 Ashok Daga to CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 70 of 216 MOC for seeking allocation of "Ekarjuna Extension" coal block. In fact it was also vehemently argued by Ld. Counsels for the accused persons that consequent to rejection of application dated 22.04.2000 by MOC vide their letter dated 01.06.2000 Ex. PW 1/D-1, the said chapter came to an end completely. In these circumstances, I even do not think it necessary to go into the other aspects of the concept of "pre-incorporation agreement/contract" at this stage of the matter. If required, the issue as to in what circumstances an agreement/contract entered into by a promoter of a proposed company prior to incorporation of the company can be treated as a "pre-incorporation agreement/contract" binding upon the company after registration of the company shall be discussed at a subsequent stage of the present judgement, for the same is not at all relevant for the present discussion.
77. Thus from the aforesaid circumstances, it is clear that there was an act of deliberate and dishonest concealment of facts from MOC by A-2 Ashok Daga with a view to deceive MOC so as to induce it to allot "Ekarjuna Extension" coal block in the name of a non- existent entity, i.e. "Gondwana Ispat Ltd.". However as the said application submitted by A-2 Ashok Daga came to be rejected by MOC so even though he could not succeed in cheating MOC but his acts clearly amounted to an act of attempting to cheat MOC.
78. In this regard, it would be worthwhile to refer to observations of Hon'ble Supreme Court made in the case Abhyanand Mishra Vs. The State of Bihar, 1962 SCR (2) 241 qua the circumstances when CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 71 of 216 an act committed moves beyond the realm of preparation to the area of attempt.
In the said case the appellant Abhyanand Mishra had applied to Patna University for permission to appear at the M.A. examination as a private candidate representing that he was a graduate having obtained his B.A. Degree in 1951 and that he had been teaching in a certain school. Believing his statements the University authorities gave him the necessary permission, and on his remitting the requisite fees and sending copies of his photograph, as required, a proper admission card for him was dispatched to the Headmaster of the School. However subsequently as a result of certain information received by the University, an investigation was made and it was found that the appellant was neither a graduate nor a teacher as represented by him and that in fact he had been de- barred from taking any University examination for a certain number of years on account of his having committed corrupt practice at a University examination. He was prosecuted and convicted under section 420 read with Section 511 of the Indian Penal Code i.e. for the offence of attempting to cheat the University by false representations by inducing it to issue the admission card, which if the fraud had not been detected would have been ultimately delivered to him. However in his appeal before Hon'ble Supreme Court, it was contended that the admission card had no pecuniary value and was therefore not property under Section 415 IPC and also that in any case, the steps taken by him did not go beyond the stage of preparation for the commission of the offence of cheating and did CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 72 of 216 not therefore make out the offence of attempt to cheat.
79. Hon'ble Supreme Court on the aforesaid two issues however observed as under:
"We do not accept the contention for the appellant that the admission card has no pecuniary value and is therefore not 'property'. The admission card as such has no pecuniary value, but it has immense value to the candidate for the examination. Without it he cannot secure admission to the examination hall and consequently cannot appear at the Examination. In Queen Empress v. Appasami, (1889) I.L.R. 12 Mad. 151, it was held that the ticket entitling the accused to enter the examination room and be there examined for the Matriculation test of the University was 'property'.
In Queen Empress v. Soshi Bhushan, (1893) I.L.R. 15 All. 210, it was held that the term 'property' in s. 463, Indian Penal Code, included the written certificate to the effect that the accused had attended, during a certain period, a course of law lectures and had paid up his fees.
We need not therefore consider the alternative case regarding the possible commission of the offence of cheating by the appellant, by his inducing the University to permit him to sit for the examination, which it would not have done if it had known the true facts and the appellant causing damage to its reputation due to its permitting him to sit for the examination. We need not also therefore consider the further question urged for the appellant that the question of the University suffering in its reputation is not immediately connected with the accused's conduct in obtaining the necessary permission."
As regard the other contention that the acts of the accused did not go beyond the stage of preparation, the Hon'ble Supreme Court observed as under:
"Another contention for the appellant is that the facts proved do not go beyond the stage of preparation for the commission of the offence of `cheating' and do not make out the offence of attempting to cheat. There is a thin line between the preparation for and an attempt to commit an offence. Undoubtedly, a culprit first intends to commit the offence, then makes preparation for committing it and CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 73 of 216 thereafter attempts to commit the offence. If the attempt succeeds, he has committed the offence; if it fails due to reasons beyond his control, he is said to have attempted to commit the offence. Attempt to commit an offence, therefore, can be said to begin when the preparations, are complete and the culprit commences to do something with the intention of committing the offence and which is a step towards the commission of the offence. The moment he commences to do an act with the necessary intention, he commences his attempt to commit the offence. This is clear from the general expression 'attempt to commit an offence' and is exactly what the provisions of s. 511, Indian Penal Code, require. The relevant portion of s. 511 is:
"Whoever attempts to commit an offence punishable by this Code......... or to cause such an offence to be committed and in such attempt does any act towards the commission of the offence, shall, where no express provision is made by this Code for the punishment of such attempt, be punished........."
These provisions require that it is only when one, firstly, attempts to commit an offence and, secondly, in such attempt, does any act towards the commission of the offence, that he is punishable for that attempt to commit the offence. It follows, therefore, that the act which would make the culprit's attempt to commit an offence punishable, must be an act which, by itself, or in combination with other acts, leads to the commission of the offence. The first step in the commission of the offence of cheating, therefore, must be an act which would lead to the deception of the person sought to be cheated. The moment a person takes some step to deceive the person sought to be cheated, he has embarked on a course of conduct which is nothing less than an attempt to commit the offence, as contemplated by s. 511. He does the act with the intention to commit the offence and the act is a step towards the commission of the offence.
It is to be borne in mind that the question whether a certain act amounts to an attempt to commit a particular offence is a question of fact dependent on the nature of the offence and the steps necessary to take in order to commit it. No exhaustive precise definition of what would amount to an attempt to commit an offence is possible. The cases referred to make this clear.
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CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 74 of 216 . . . . . . .
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While referring to Queen Vs. Paterson, (1) I.L.R. 1 All. 316 it was further observed as under:
"The distinction between preparation to commit a crime and an attempt to commit it was indicated by quoting from Mayne's Commentaries on the Indian Penal Code to the effect:
"Preparation consists in devising or arranging the means or measures necessary for the commission of the offence; the attempt is the direct movement towards the commission after the preparations have been made."
In Regina v. Padala Venkatasami, (1881) I.L.R. 3 Mad. 4, the preparation of a copy of an intended false document, together with the purchase of stamped paper for the purpose of writing that false document and the securing of information about the facts to be inserted in the document, were held not to amount to an attempt to commit forgery, because the accused had not, in doing these acts, proceeded to do an act towards the commission of the offence of forgery. In the matter of the petition of Riasat Ali, (1881) I.L.R. 7 Cal. 352, the accused's ordering the printing of one hundred receipt forms similar to those used by a company and his correcting proofs of those forms were not held to amount to his attempting to commit forgery as the printed form would not be a false document without the addition of a seal or signature purporting to be the seal or signature of the company. The learned Judge observed at p. 356:
"........... I think that he would not be guilty of an attempt to commit forgery until he had done some act towards making one of the forms a false document. If, for instance, he had been caught in the act of writing the name of the Company upon the printed form and had only completed a single letter of the name, I think that he would have been guilty of the offence charged, because (to use the words of Lord Blackburn) 'the actual transaction would have commenced, which would have ended in the crime of forgery, if not interrupted'."
The learned Judge quoted what Lord Blackburn said in Reg. v. Chessman, Lee & Cave's Rep. 145 "There is no doubt a difference between the preparation antecedent to an offence and the actual attempt; but if the actual CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 75 of 216 transaction has commenced, which would have ended in the crime if not interrupted, there is clearly an attempt to commit the crime.", He also quoted what Cockburn, C. J., said in M'Pher son's Case:
"The word 'attempt' clearly conveys with it the idea, that if the attempt had succeeded, the offence charged would have been committed. An attempt must be to do that which, if successful, would amount to the felony charged."
It is not necessary for the offence under s. 511, Indian Penal Code, that the transaction commenced must end in the crime or offence, if not interrupted."
80. Reference in this regard can also be made to another case titled Sudhir Kumar Mukherjee and Sham Lal Shaw Vs.State of West Bengal, 1973 AIR 2655, wherein also Hon'ble Supreme Court observed that Section 511 IPC was not meant to cover only the penultimate act towards the completion of an offence; acts precedent, if those acts are done in the course of the attempt to commit the offence, and were done with the intent to commit it and done towards its commission were also covered.
81. Thus in view of my aforesaid discussion, it is crystal clear that the very act of A-2 Ashok Daga in submitting an application for allocation of "Ekarjuna Extension" coal block to MOC after drafting it on a letter head purporting to be that of "Gondwana Ispat Ltd." and also signing the application as a director of "Gondwana Ispat Ltd." knowing fully well that no such company actually exists and in the process also concealing from MOC that no such company in the name of "Gondwana Ispat Ltd." has been registered clearly amounted to an act of "attempt to cheat", Screening Committee, MOC. The malafide intention on the part of A-2 Ashok Daga is thus writ large on CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 76 of 216 the face of record. In these circumstances, though the charge of cheating u/s 420 IPC is not made out against A-2 Ashok Daga as there was no delivery of property in consequence to said deception practiced by him but prosecution has clearly succeeded in proving beyond shadows of all reasonable doubts the offence of attempt to cheat i.e. u/s 420/511 IPC against A-2 Ashok Daga.
A-2 Ashok Daga is thus held guilty of the offence of attempt to cheat i.e u/s 420/511 IPC and is accordingly convicted thereunder as regard the present head of charge under discussion.
Whether submission of application dated 25.09.2001 by A-2 Ashok Daga to MOC for seeking allocation of "Warora coal block" followed by various other communications to other authorities prior to registration of "Gondwana Ispat Ltd." as a company on 05.10.2001 can be termed as part of a series of acts including acts undertaken subsequently by him i.e. after registration of the company in procuring allocation of a coal block from MOC.
82. Before I proceed further to discuss the prosecution case qua other head of charges, another important aspect which needs to be seen and analysed is whether the acts of submitting applications dated 25.09.2001 to MOC and to Ministry of Steel by A-2 Ashok Daga for seeking allocation of "Warora coal block" coupled with various other acts committed by him prior to 05.10.2001 or done at his instance i.e. prior to the date when "Gondwana Ispat Ltd." got registered under Indian Companies Act, 1956 can be considered as part of a series of acts undertaken by him subsequent to 05.10.2001 in procuring allocation of a coal block from MOC in favour of A-1 M/s GIL.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 77 of 216
83. It has been submitted by Ld. Senior PP Sh. Sanjay Kumar that from the overall facts and circumstances of the case coupled with the language used in various communications made by A-2 Ashok Daga himself with different government authorities and the response given by them, it is clearly apparent that all such acts were part of a series of acts undertaken by A-2 Ashok Daga initially before registration of company and subsequently after registration of the company as a representative of A-1 M/s GIL so as to procure allocation of a captive coal block from MOC. It was submitted that all these acts taken together clearly show existence of guilty intention at the initial stage itself on the part of accused in deceiving various Government departments so as to induce MOC to allocate a captive coal block in favour of "Gondwana Ispat Ltd.".
84. On the other hand Ld. Sr. Advocate Sh. Mohit Mathur for A-2 Ashok Daga has vehemently argued that submission of applications dated 25.09.2001 to Ministry of Coal and to Ministry of Steel or submission of application dated 01.10.2001 to Department of Mining and Geology, Government of Maharashtra, were separate independent acts and were not connected in any manner with the act of submitting the subsequent application dated 13.06.2002 for allocation of Majra-Belgaon Coal Blocks to MOC or making of any submissions either before 18th or 20th Screening Committee. It was submitted that as per prosecution case itself the application dated 25.09.2001 for allocation of "Warora coal block" was never processed by MOC as in the meantime another request of company M/s GIL for allocation of Majra-Belgaon coal blocks was received in MOC. It was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 78 of 216 thus argued that the said request for allocation of "Warora coal block" came to an end on its own and thus cannot form part of any series of acts leading to allocation of Majra coal block. It was also submitted that prosecution has even otherwise miserably failed in establishing any guilty intention on the part of A-2 Ashok Daga in submitting the application dated 25.09.2001 to MOC for allocation of "Warora coal block" or in submitting an even dated application to Ministry of Steel for recommending it to MOC for allocation of "Warora coal block", much less in submission of application dated 01.10.2001 to Department of Mining and Geology, Government of Maharashtra, for recommending "Gondwana Ispat Ltd." to Ministry of Steel for further recommending the company to MOC for allocation of a captive coal block. It was submitted that admittedly company "Gondwana Ispat Ltd." got registered with ROC Mumbai on 05.10.2001 i.e. within 10 days of submitting the applications dated 25.09.2001 to MOC or to Ministry of Steel and in fact the name "Gondwana Ispat Ltd." was again made available to A-2 Ashok Daga by ROC on 18.09.2001 itself for getting the proposed company registered in the said name. It was also submitted that on 24.09.2001, an application towards filing of IEM (Industrial Entrepreneur Memorandum) was also submitted to Department of Industries by A-2 Ashok Daga and in the said application it was clearly stated that "Gondwana Ispat Ltd." has applied for registration. It was submitted that copy of the said IEM application was duly submitted to Ministry of Steel alongwith application dated 25.09.2001 by A-2 Ashok Daga and thus it can not be stated that there was any concealment of facts of any nature whatsoever by A-2 Ashok Daga regarding status of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 79 of 216 "Gondwana Ispat Ltd." at any point of time.
85. As regard the contention of prosecution that only acknowledgment of IEM issued by Department of industry was submitted to Ministry of Steel alongwith application dated 25.09.2001 and not the copy of application as was submitted on behalf of "Gondwana Ispat Ltd." to Department of Industries, it was vehemently argued by Ld. Counsel for A-2 Ashok Daga that during the course of prosecution evidence it has been clearly established on record that the file of Ministry of Steel as was seized by PW-15 Inspector Sunit Kumar Pal was tampered with as the pagination of various pages in the file was changed number of times.
It was thus submitted that the acts pertaining to submission of applications dated 25.09.2001 and 01.10.2001 can not be considered as part of a series of acts connected with acts undertaken subsequent to registration of company M/s GIL.
MY DISCUSSION AND CONCLUSION
86. In order to appreciate the aforesaid issue, it would be worthwhile to revisit the various steps as were undertaken by A-2 Ashok Daga both before and after registration of the company A-1 M/s GIL while also keeping in mind the contents of various communications made by him or at his instances to different Government departments. The steps taken by all such Government departments will also be required to be looked into as to whether all such acts were considered by them as part of a series of acts or not.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 80 of 216 Admittedly as on 25.09.2001 when the application for allocation of "Warora coal block" was submitted by A-2 Ashok Daga on letter heads purporting to be that of "Gondwana Ispat Ltd." either to MOC or to Ministry of Steel while representing himself as Director "Gondwana Ispat Ltd.", no such company actually existed. Similarly, it is also not in dispute that when on 01.10.2001, an application was submitted to Department of Mining and Geology, Government of Maharashtra, on a letter head purporting to be that of "Gondwana Ispat Ltd." under the signatures of some person signing the application as authorised officer, "Gondwana Ispat Ltd.", no such company was still in existence. However alongwith the said application dated 01.10.2001 copy of application dated 25.09.2001 Ex. PW 5/C (Colly) submitted earlier to Ministry of Steel by A-2 Ashok Daga for recommending to MOC for release of "Warora coal block"
was enclosed. Moreover, from my earlier discussion, it has been also clearly established that under CMN Act, 1973, as amended by CMN (Amendment) Act, 1993, it was only a company registered under Indian Companies Act, 1956 which could have applied for allocation of a captive coal block. Further, from a bare perusal of the applications dated 25.09.2001 submitted either to MOC or to Ministry of Steel or from application dated 01.10.2001 submitted to Department of Mining and Geology, Government of Maharashtra, it is clear that in the said applications it was no where disclosed that "Gondwana Ispat Ltd." has not yet been registered or that no such company actually exists. On the other hand, the format of the various applications clearly show that they were consciously drafted on letter heads purporting to be that of "Gondwana Ispat Ltd." so as to conceal CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 81 of 216 true and correct facts that no such company actually existed. Moreover, the two applications dated 25.09.2001 were signed by A-2 Ashok Daga as Director, "Gondwana Ispat Ltd.", the application dated 01.10.2001 was signed by some person representing himself to be an authorised officer of "Gondwana Ispat Ltd." so that no one can ever have an iota of doubt that "Gondwana Ispat Ltd." is not even in existence i.e. the company has not yet been registered. All the applications were moved on similar letter heads purporting to be that of "Gondwana Ispat Ltd." on which the earlier application dated 22.04.2000 for allocation of "Ekarjuna Extension" coal block was moved. It is thus crystal clear that there was a conscious effort made towards concealment of a material fact i.e. about the identity of "Gondwana Ispat Ltd." as being not in existence as on the date of the said applications and the said fact was well to the knowledge of A-2 Ashok Daga.
(I shall be dealing at a slightly later stage with the submissions of Ld. Counsel for A-2 Ashok Daga that a copy of application dated 24.09.2001 as was submitted to Department of Industries towards filing of IEM by "Gondwana Ispat Ltd." was submitted alongwith application dated 25.09.2001 to Ministry of Steel and that the file of Ministry of Steel as was seized by CBI during the course of investigation has been tampered with. However it will be worth pointing out that it is not the claim of accused himself that copy of any such application of IEM dated 24.09.2001 was filed either with MOC or with Department of Mining and Geology, Government of Maharashtra.) CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 82 of 216
87. Thus in the light of the aforesaid undisputed fact that "Gondwana Ispat Ltd." was not in existence as on 25.09.2001 or even as on 01.10.2001 it needs to be now examined as to whether the said acts of submitting applications dated 25.09.2001 to MOC and Ministry of Steel and application dated 01.10.2001 to Directorate of Mining and Geology, Government of Maharashtra can be termed as acts forming part of a series of acts undertaken by A-2 Ashok Daga both before and after registration of company "Gondwana Ispat Ltd." with a view to procure allocation of a captive coal block. If the answer to the aforesaid issue is found to be in affirmative then it will be required to be seen as to whether the said acts show existence of any malafide intention on the part of accused right from the initial stage or not.
88. As earlier also mentioned the malafide intention or guilty intention is to be often seen and gathered from the overall facts and circumstances of a given case and in that regard prosecution can not be expected to lead any direct evidence. It is the circumstances in which an act or a series of acts are found to have been committed by an accused which may provide an indication as to the existence of guilty intention or malafides on the part of accused right from the initial stage.
89. At the outset, I may state that from the contents of various applications submitted to different Government entities so as to procure allocation of a captive coal block from MOC coupled with the manner in which the same were dealt with in different Government CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 83 of 216 Departments it is clearly apparent that all such acts were not only undertaken as a series of acts by A-2 Ashok Daga himself but even the various Government departments considered them so.
90. From the files of MOC Ex. PW1/A (Colly) (D-3) and Ex. PW 1/B (Colly) (D-4) it is clear that the initial application dated 25.09.2001 Ex. PW 1/E (Colly) submitted by A-2 Ashok Daga seeking allocation of "Warora coal block" after being received in Ministry of Coal on 26/09/2001 travelled through the desk of various officers before finally reaching the desk of Ms. Neera Sharma, Section Officer on 28/9/2001. She however further marked the application to PW-1 R.S. Negi, the concerned dealing Assistant in the section on 28/9/2001 itself.
91. In the meantime the company "Gondwana Ispat Ltd." got registered on 05.10.2001. However on 17.10.2001 a letter was sent to Advisor, Project, MOC by one Ashok Kumar, authorised representative of "Gondwana Ispat Ltd." stating that in furtherance of their earlier letter dated 25.09.2001 they are also putting up induction furnaces to manufacture steel billets and ingots of all grade of capacity 1,00,000 tonnes per annum (TPA) at Tehsil Warora, District Chandrapur, Maharashtra in addition to the sponge iron plant. Copy of IEM acknowledgement issued by the Ministry of Commerce and Industry qua steel billets and ingots was also enclosed. Subsequent thereto yet another letter dated 22.10.2001 was sent to Chairman, Screening Committee, MOC on behalf of "Gondwana Ispat Ltd." under the signatures of A-2 Ashok Daga, Director, "Gondwana Ispat CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 84 of 216 Ltd.". Vide the said letter, it was stated that as the Screening Committee meeting is scheduled to be held on 29.10.2001 and applications for captive blocks are to be considered for recommendation and allocation but it is learnt that sponge iron cases are not being considered. A request was thus made on behalf of the company that its application submitted for allocation of a captive coal block for the sponge iron project be also considered.
92. It is however certainly correct that qua the application dated 25.09.2001, Ex. PW 5/C (Colly) (D-3) submitted to MOC by A-2 Ashok Daga no note was put up in any file till 21.10.2002 and in the meantime not only "Gondwana Ispat Ltd." got registered as a company but another application dated 13.06.2002 Ex. PW 1/E-2 (D-
3) seeking allocation of Majra-Belgaon coal blocks as an alternate to "Warora coal block" was also received in MOC on behalf of company "Gondwana Ispat Ltd." under the signatures of A-2 Ashok Daga only. However a perusal of note dated 21.10.2002 put up by PW-2 R.S. Negi in file Ex. PW 1/B (Colly) (D-4) shows that the same primarily pertained to application dated 25.09.2001 i.e. Ex. PW 5/C (Colly) though it also mentioned that in the meantime company has submitted another application for allocation of "Majra Belgaon" coal blocks as an alternate of "Warora coal block".
93. PW-1 R.S. Negi, in his said note also made a reference to the recommendations of Ministry of Steel dated 09.10.2001 Ex. PW 1/E-1 received in favour of the company for allocation of proposed captive block i.e. "Warora coal block". Thus after noting all the developments CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 85 of 216 which had taken place till then he proposed that the said references may be sent to CIL/WCL for comments. As regard the request dated 13.06.2002, Ex. PW 1/E-2 of the company qua allocation of "Majra- Belgaon" coal blocks as on alternate of "Warora coal block" he proposed that the party may be asked to route their request through Ministry of Steel. However when the file with the aforesaid note went to the desk of senior officers then it was decided that as the party has revised its recommendations so instead of sending the earlier references to CIL/WCL for comments, the party may only be asked to route their request for allocation of "Majra-Belgaon" coal blocks through Ministry of Steel.
Accordingly vide letter dated 01.11.2002 Ex. PW 1/E-3, Ms. Neera Sharma, Section Officer asked M/s "Gondwana Ispat Ltd." to route their request through Ministry of Steel.
94. Moreover, a perusal of application dated 13.06.2002 Ex. PW 1/E-2 submitted to MOC on behalf of A-1 M/s GIL further shows that in the said application also it was stated by A-2 Ashok Daga that earlier they had requested for "Warora coal block" in Warora Tehsil, District, Chandrapur but as new blocks have been added in the list of captive coal blocks so MOC may consider allotment of "Majra- Belgaon" coal blocks as an alternate to "Warora coal block".
95. As already mentioned an application dated 25.09.2001 Ex. PW 5/C (Colly) was also submitted by A-2 Ashok Daga on a similar letter head purporting to be that of "Gondwana Ispat Ltd." to Ministry of Steel requesting it to recommend allocation of a mining block CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 86 of 216 (Warora coal block) in favour of "Gondwana Ispat Ltd." to MOC. The dealing Assistant in ID Wing, Ministry of Steel however processed the application on 03.10.2001. From a bare perusal of the said note dated 03.10.2001 [Available at note sheet page 1 in note sheet pages Ex. PW 5/B (Colly) in file Ex. PW 5/A (Colly) (D-6)], it is clear that officials of Ministry of Steel had no doubts of any nature whatsoever that "Gondwana Ispat Ltd." is not yet registered under Indian Companies Act, 1956. In fact in the note it was proposed that the "company" may be requested to furnish certain additional information. The said note came to be put up before Sh. D. Kashiva, Joint Industrial Advisor, Ministry of Steel and who vide his detailed note dated 04.10.2001 proposed recommending the case of "company" for allotment of proposed captive mining coal block. In the said note after mentioning various effective steps taken by the company, Sh. D. Kashiva, observed that as the proposal falls within the parameters of the guidelines followed in MOC and in Ministry of Steel so there may be no objection in recommending the case for allotment of proposed captive coal mining block subject to certain conditions as were mentioned in the note. The file thereafter moved through the desk of Joint Secretary, Steel on 08.10.2001 and on 09.10.2001 Secretary, Steel approved the proposal put up by Sh. D. Kashiva vide his note dated 04.10.2001. An office memorandum dated 09.10.2001 Ex. PW 1/E-1 was accordingly sent to MOC under the signatures of Sh. D. Kashiva, recommending allocation of "Warora Coal Block" to "Gondwana Ispat Ltd.".
96. However, subsequently an application dated 13.06.2002 Ex.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 87 of 216 PW 5/D-4 for allocation of "Majra Belgaon" coal blocks, was also submitted to Ministry of Steel by A-2 Ashok Daga on behalf of "Gondwana Ispat Ltd." requesting the Ministry to kindly suggest "Majra-Belgaon" coal blocks as an alternate block to MOC. It was also stated in the said communication that despite the earlier recommendation of Ministry of Steel to MOC for allotment of "Warora coal block", no action has yet been taken by the Screening Committee and thus as "Majra-Belgaon" coal blocks have also since been released by Western Coalfields Ltd. (WCL) so they are requesting for allocation of the said coal blocks. The said application was duly processed in Ministry of Steel and vide letter dated 01.08.2002 Ex. PW 5/DX-3 Sh. D. Kashiva, Joint Industrial Advisor asked M/s GIL to make a proper, fully justified proposal with all relevant details regarding allocation of "Majra-Belgaon" coal blocks.
97. However in the meantime as MOC vide letter dated 01.11.2002 had also asked "Gondwana Ispat Ltd." to get their application for allotment of "Majra-Belgaon" coal blocks routed through Ministry of Steel so vide letter dated 11.02.2003 Ex. PW 5/DX-5, A-2 Ashok Daga submitted all relevant details to Ministry of Steel. In his said communication reference was made by A-2 Ashok Daga not only to the application dated 13.06.2002 seeking allocation of Majra-Belgaon coal blocks but also to letter dated 01.08.2002 of Ministry of Steel asking the company to submit a justified proposal with all relevant details. He however also enclosed copy of letter dated 01.11.2002 of MOC asking the company to get their request for allocation of Majra-Belgaon coal blocks routed through Ministry of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 88 of 216 Steel. A copy of said communication dated 11.02.2003 as was submitted to Ministry of Steel was also sent to Advisor, MOC by M/s GIL. In the meantime a communication dated 24.02.2003 Ex. PW 1/E-5 was received in MOC from Director, Department of Mining and Geology, Government of Maharashtra, requesting to consider allotment of "Majra-Belgaon" coal blocks to M/s GIL. A copy of said communication dated 24.02.2003 was also sent to Secretary, Ministry of Steel, Government of India by Department of Mining and Geology, Government of Maharashtra.
98. The request of the company M/s Gondwana Ispat Ltd. for allocation of Majra-Belgaon coal blocks thus came to be considered initially in the 18th Screening Committee meeting held on 05.05.2003 and thereafter in the 20 th Screening Committee meeting held on 06.06.2003. While the final decision qua allotment of any coal block in favour of M/s Gondwana Ispat Ltd. came to be deferred in the 18 th Screening Committee meeting but in the 20 th Screening Committee meeting, Majra coal block was decided to be reserved in favour of M/s Gondwana Ispat Ltd. subject to certain conditions. [I shall be however dealing with the said proceedings of 18 th Screening Committee and 20th Screening Committee meetings at a later stage of the present judgment as the same is not relevant for the purposes of present issue under consideration].
99. Thereafter on 23.06.2003, Sh. S.K. Kakkad, Under Secretary, MOC sent an office memorandum Ex. PW 5/DX-6 to Ministry of Steel requesting it for their comments qua the application dated 11.02.2003 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 89 of 216 Ex. PW 5/DX-5 of "Gondwana Ispat Ltd.", as the Screening Committee in its 20th meeting held on 06.06.2003 has offered reservation of a block to the company. In response to the said office memorandum dated 23.06.2003 of MOC, Sh. Ranjeet Singh, Under Secretary, Ministry of Steel sent an office memorandum dated 04.07.2003 to MOC. In his said communication, Sh. Ranjeet Singh while referring to their earlier office memorandum dated 09.10.2001 Ex. PW 1/E-1 (Vide which company was recommended by Ministry of Steel for allocation of "Warora Coal Block") intimated MOC about the reassessed requirement of ROM coal for the proposed washing-cum- sponge iron project of the company. At this stage it will be also pertinent to mention that even in the 20 th Screening Committee meeting held on 06.06.2003 during the course of discussion on the proposal of "Gondwana Ispat Ltd.", the representative of Ministry of Steel informed the Committee that they have supported the project for allocation of a suitable block in October 2001 itself.
Accordingly in accordance with the decision taken in 20 th Screening Committee meeting to reserve Majra coal block in favour of the company, a letter of reservation dated 29.10.2003 Ex. PW1/E- 12 was issued to "Gondwana Ispat Ltd." under the signatures of Sh. Sujit Gulati, Director, MOC. In the said letter of reservation the earlier communications of "Gondwana Ispat Ltd." dated 25.09.2001, 17.10.2001, 13.06.2002, 11.02.2003 and 10.05.2003 were duly referred to.
100. Thus, from the aforesaid detailed discussion of various steps CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 90 of 216 taken by the accused persons initially for allotment of "Warora Coal Block" and subsequently for allocation of "Majra-Belgaon" coal blocks as an alternate to "Warora Coal Block" and the processing of the said applications by MOC, Ministry of Steel and Department of Mining and Geology, Government of Maharashtra, finally culminating in the issuance of letter of reservation dated 29.10.2003 qua "Majra" coal block Ex. PW 1/E-12 by MOC, it is crystal clear that the various applications submitted by A-2 Ashok Daga initially before registration of company for seeking allocation of "Warora Coal Block" and subsequently after registration of the company seeking allocation of "Majra Belgaon" coal blocks as an alternate of "Warora Coal Block", and which finally resulted in reservation of "Majra" coal block in its favour by the 20th Screening Committee were not only considered as part of a series of acts by accused persons themselves but even by the authorities in MOC, Ministry of Steel and Department of Mining and Geology, Government of Maharashtra. In his communication dated 13.06.2002 A-2 Ashok Daga himself referred to his earlier application for allocation of "Warora Coal Block" and stated that their present request for allocation of "Majra Belgaon" coal blocks be considered as an alternate to "Warora Coal Block". As already mentioned in the 20th Screening Committee meeting the representative of Ministry of Steel stated that they have already supported the claim of company "Gondwana Ispat Ltd." for allocation of a suitable coal block in the year 2001 itself. Clearly the said letter of support was issued by Ministry of Steel vide office memorandum dated 09.10.2001 i.e. in response to application dated 25.09.2001 of "Gondwana Ispat Ltd." for allocation of "Warora Coal Block". While CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 91 of 216 submitting its comments in the year 2003 qua the request of the company for allocation of "Majra-Belgaon" coal blocks also the earlier office memorandum dated 09.10.2001 was referred to by Ministry of Steel. As also already pointed out, the letter of reservation dated 29.10.2003 qua "Majra" coal block issued by MOC also refers to all the earlier communications made by A-2 Ashok Daga including application dated 25.09.2001 for allocation of "Warora Coal Block".
101. In these circumstances, it is crystal clear, beyond shadows of all reasonable doubts that all these acts as were undertaken by A-2 Ashok Daga before and after registration of " Gondwana Ispat Ltd." were part of a series of acts. The various authorities in MOC, Ministry of Steel and Department of Mining and Geology, Government of Maharashtra, also considered various communications made by A-2 Ashok Daga as part of a series of acts towards seeking allocation of a captive coal block in favour of the company.
102. The claim now being put forth by Ld. Counsels for the accused persons that the request dated 13.06.2002 Ex. PW 1/E-2 seeking allocation of Majra-Belgaon coal blocks be considered as an independent act having no co-relation with the earlier requests submitted qua allocation of "Warora coal block" is thus completely not tenable. No new interpretation can now be put on the said acts especially when the inference drawn above is writ large on the face of record.
103. In the light of aforesaid discussion, I now proceed to deal with the prosecution case qua other head of charges framed against A-2 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 92 of 216 Ashok Daga and also the important question as to whether the guilty intention on the part of accused existed from beginning itself or not.
CHARGE-I "Secondly, during the year 2001, you Ashok Daga submitted another application dated 25/09/2001 to Ministry of Coal, Govt. of India for allocation of Warora West Coal block falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance."
104. Ld. Sr. P.P. Sh. Sanjay Kumar has submitted that from a bare perusal of application dated 25.09.2001 it is crystal clear that the same has been consciously written on a letter head purporting to be that of "Gondwana Ispat Ltd." and despite being aware that no such company actually exists, the letter was still signed by A-2 Ashok Daga as director of "Gondwana Ispat Ltd.". It was also submitted that nowhere in the application it has been disclosed that "Gondwana Ispat Ltd." has not yet been registered. It was submitted that the application has been deliberately written in such a manner that no one may even think that the applicant "Gondwana Ispat Ltd." is a non- existent entity. It was thus argued that such an act per se amounts to dishonest concealment of facts. The existence of malafide intention on the part of A-2 Ashok Daga in doing so was also thus stated to per-se evident from the record. The offence of cheating was stated to have been clearly made out against A-2 Ashok Daga.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 93 of 216
105. Ld. Counsel for A-2 Ashok Daga has however vehemently argued that as on 17.09.2001, the name of "Gondwana Ispat Ltd." was already made available by ROC for getting the company registered and soon after submitting the application dated 25.09.2001, the company infact was got registered on 05.10.2001 so it is clear that there was no malafide intention on the part of A-2 Ashok Daga in misleading MOC in any manner. It has also been argued that even otherwise further processing of application by MOC was admittedly undertaken on 21.10.2002 only when another application dated 13.06.2002 Ex. PW 1/E-2 was already received in MOC on behalf of "Gondwana Ispat Ltd." for allocation of "Majra- Belgaon" coal blocks and by that time the company already stood registered with ROC, Mumbai. It was thus submitted that the question of any deception having been carried out by A-2 Ashok Daga accordingly does not arise and more so when admittedly no property was delivered in pursuance to application dated 25.09.2001. No offence of cheating was thus stated to have been made out.
MY DISCUSSION AND CONCLUSION
106. In order to undertake any discussion qua this head of charge, it would be appropriate to first have a glance over the application dated 25.09.2001 Ex. PW 1/E (Colly) as was submitted to MOC by A-2 Ashok Daga. The said application has been reproduced hereunder:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 94 of 216 Gondwana Ispat Ltd.
Ref : GIL/2001 Dated : 25.09.2001
The Advisor,
Ministry of Coal
Government of India
Shastri Bhawan
New Delhi-110001
Sub: APPLICATION FOR ALLOTMENT OF COAL BLOCK FOR
MINING : COAL BLOCK "WARORA WEST LYING NORTH OF
WARORA CITY" DISTRICT: CHANDRAPUR (M.S.) FOR
WASHERY CUM SPONGE IRON PROJECT.
Dear Sir,
We propose to set up a 1.20 lakhs Tonnes per annum Washery cum
Sponge Iron Plant. The detailed project report of the Sponge Iron
Plant is enclosed in Annexure-I.
The Plant would be set in Warora Tehsil, Distt. Chandrapur
(M.S.) We have applied to M.I.D.C. for allotment of 10-20 acres
of land. (letter enclosed).
The Sponge Iron Plant would consume approx. 2.8 lakhs tonnes/
annum of raw Coal. The Coal would be washed in our washery
with 70% recovery and 30% rejects which will be used for land
filling. There will be no midlings for our Sponge Iron Plant. As
we are setting up our washery cum sponge iron project in Warora
Tehsil, Distt. Chandrapur, we are placing our request for
allotment of a small coal bearing area lying North of Warora city
West of the main Delhi-Chennai railway line. The location of the
block is barely about 10K.M. from our washery cum sponge iron
project.
We are enclosing a location Map of Warora West lying North of
Warora city, in Warora Tehsil. The total reserve in the earmarked
block estimated to be 11-13 millions tonnes. However depending
upon the encroachment and town expansion on the mine land we
expect the extractable reserves to be about 8 million tonnes. It is
basically an underground mine, with an output of 0.28 million
tonnes per annum.
Contd...2
Address : No. 3 & 4, Auric Gems,
Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 95 of 216
Gondwana Ispat Ltd.
-2-
It is pertinant to point out that the main coal bearing Warora Area has been encroached by Warora township and hence would not be economically viable for Western Coalfield Ltd. to work, also from conservation view point the above mentioned coal reserve will be lost in wake of the rapid encroachment and developments.
In view of the above we request the Screening Committee to allocated the small coal block to us for our captive use for washery cum sponge iron project.
Thanking you, Yours sincerely, FOR GONDWANA ISPAT LIMITED Sd/-
(ASHOK DAGA) DIRECTOR.
C.C. to the Chairman-Cum-Managing Director, Coal India Ltd., 10, Netaji Subhash road, Calcutta-1 Encls: As above.
Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273
107. As already discussed that as on 25.09.2001 when the application for allocation of "Warora Coal Block" was submitted by A- 2 Ashok Daga representing himself to be a director of "Gondwana Ispat Ltd." then on that date no such company was in existence. It has also been discussed and demonstrated that u/s 3 CMN Act, 1973, only a company registered under Indian Companies Act, 1956 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 96 of 216 could have applied for allocation of a captive coal block.
108. However, in order to appreciate the submissions of Ld. Sr. P.P. and that of Ld. Counsel for A-2 Ashok Daga one would have to again resort back to the observations made by Hon'ble Supreme Court in the case Abhyanand Mishra (supra) as were made while explaining the difference between preparation and an attempt to commit a crime. The said observations were earlier also reproduced in the discussion relating to charge framed against A-2 Ashok Daga qua submission of earlier application dated 22.04.2000 to MOC for allocation of "Ekarjuna Extension" coal block.
109. At the cost of repetition, it would be worthwhile to reiterate the said observations of Hon'ble Supreme Court as made in the case Abhyanand Mishra (supra) over here also.
"Another contention for the appellant is that the facts proved do not go beyond the stage of preparation for the commission of the offence of `cheating' and do not make out the offence of attempting to cheat. There is a thin line between the preparation for and an attempt to commit an offence. Undoubtedly, a culprit first intends to commit the offence, then makes preparation for committing it and thereafter attempts to commit the offence. If the attempt succeeds, he has committed the offence; if it fails due to reasons beyond his control, he is said to have attempted to commit the offence. Attempt to commit an offence, therefore, can be said to begin when the preparations, are complete and the culprit commences to do something with the intention of committing the offence and which is a step towards the commission of the offence. The moment he commences to do an act with the necessary intention, he commences his attempt to commit the offence. This is clear from the general expression 'attempt to commit an offence' and is exactly what the provisions of s. 511, Indian Penal Code, require. The relevant portion of s. 511 is:
"Whoever attempts to commit an offence punishable by this Code......... or to cause such an offence to be committed and in CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 97 of 216 such attempt does any act towards the commission of the offence, shall, where no express provision is made by this Code for the punishment of such attempt, be punished........."
These provisions require that it is only when one, firstly, attempts to commit an offence and, secondly, in such attempt, does any act towards the commission of the offence, that he is punishable for that attempt to commit the offence. It follows, therefore, that the act which would make the culprit's attempt to commit an offence punishable, must be an act which, by itself, or in combination with other acts, leads to the commission of the offence. The first step in the commission of the offence of cheating, therefore, must be an act which would lead to the deception of the person sought to be cheated. The moment a person takes some step to deceive the person sought to be cheated, he has embarked on a course of conduct which is nothing less than an attempt to commit the offence, as contemplated by s. 511. He does the act with the intention to commit the offence and the act is a step towards the commission of the offence.
It is to be borne in mind that the question whether a certain act amounts to an attempt to commit a particular offence is a question of fact dependent on the nature of the offence and the steps necessary to take in order to commit it. No exhaustive precise definition of what would amount to an attempt to commit an offence is possible. The cases referred to make this clear. . . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
While referring to Queen Vs. Paterson, (1) I.L.R. 1 All. 316 it was further observed as under:
"The distinction between preparation to commit a crime and an attempt to commit it was indicated by quoting from Mayne's Commentaries on the Indian Penal Code to the effect:
"Preparation consists in devising or arranging the means or measures necessary for the commission of the offence; the attempt is the direct movement towards the commission after the preparations have been made."
In Regina v. Padala Venkatasami, (1881) I.L.R. 3 Mad. 4, the preparation of a copy of an intended false document, together CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 98 of 216 with the purchase of stamped paper for the purpose of writing that false document and the securing of information about the facts to be inserted in the document, were held not to amount to an attempt to commit forgery, because the accused had not, in doing these acts, proceeded to do an act towards the commission of the offence of forgery. In the matter of the petition of Riasat Ali, (1881) I.L.R. 7 Cal. 352, the accused's ordering the printing of one hundred receipt forms similar to those used by a company and his correcting proofs of those forms were not held to amount to his attempting to commit forgery as the printed form would not be a false document without the addition of a seal or signature purporting to be the seal or signature of the company. The learned Judge observed at p. 356:
"........... I think that he would not be guilty of an attempt to commit forgery until he had done some act towards making one of the forms a false document. If, for instance, he had been caught in the act of writing the name of the Company upon the printed form and had only completed a single letter of the name, I think that he would have been guilty of the offence charged, because (to use the words of Lord Blackburn) 'the actual transaction would have commenced, which would have ended in the crime of forgery, if not interrupted'."
The learned Judge quoted what Lord Blackburn said in Reg. v. Chessman, Lee & Cave's Rep. 145 "There is no doubt a difference between the preparation antecedent to an offence and the actual attempt; but if the actual transaction has commenced, which would have ended in the crime if not interrupted, there is clearly an attempt to commit the crime.", He also quoted what Cockburn, C. J., said in M'Pher son's Case:
"The word 'attempt' clearly conveys with it the idea, that if the attempt had succeeded, the offence charged would have been committed. An attempt must be to do that which, if successful, would amount to the felony charged."
It is not necessary for the offence under s. 511, Indian Penal Code, that the transaction commenced must end in the crime or offence, if not interrupted."
(Emphasis supplied by me)
110. Thus the moment an application concealing true and correct CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 99 of 216 facts and especially the facts which to the knowledge of applicant Ashok Daga were false was submitted to MOC and after signing it as director "Gondwana Ispat Ltd.", the accused A-2 Ashok Daga is deemed to have taken a step towards attempting to commit an offence i.e. he moves ahead beyond the stage of preparing to commit the offence. Knowing fully well that "Gondwana Ispat Ltd." is not yet a registered company, A-2 Ashok Daga still proceeded to draft the application in such a manner so that no one can have even slightest of doubt that the applicant i.e. "Gondwana Ispat Ltd." in whose name the application has been submitted is not yet registered with ROC or that no such company actually exists. Moreover malafide intention on the part of A-2 Ashok Daga is also writ large on the face of record as he also signed the application as director "Gondwana Ispat Ltd." again in order to conceal and correct facts. In other words signing the application as Director, "Gondwana Ispat Ltd." clearly amounted to stating false facts and which fact A-2 Ashok Daga also knew to be false. The said acts thus clearly amounts to dishonest concealment of facts and that too with malafide intention and thereby amounting to deception for the purposes of offence of cheating.
111. A question may however arise at this stage as to why A-2 Ashok Daga proceeded to submit an application in such a manner and that too prior to getting the company registered with ROC. The question though is hypothetical but answer to the said question is very crucial in appreciating the existence of guilty intention on the part of A-2 Ashok Daga. As earlier also mentioned that in February 2000 A-2 Ashok Daga had applied to ROC Mumbai for availability of name CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 100 of 216 "Gondwana Ispat Ltd." for getting a company registered. The said name was stated to be available by ROC Mumbai. Admittedly any such name stated to be available by ROC for getting the proposed company registered remains valid for a period of six months only. However it is the case of A-2 Ashok Daga himself that no further steps were taken by him towards registration of the company for about another 18 months and in September 2001 he again applied to ROC Mumbai seeking availability of name "Gondwana Ispat Ltd." for getting the proposed company registered. No explanation has been furnished by A-2 Ashok Daga as to why during all this period he did not take any further steps to get the company registered except stating that as his earlier application for allocation of "Ekarjuna Extension" coal block dated 22.04.2000 was rejected by MOC so he did not take steps to get the company registered. It is also the case of A-2 Ashok Daga himself as stated by him in response to question No. 143 in his statement u/s 313 Cr.PC that on 21.09.2001 he had applied to MIDC seeking availability of land for the proposed project. However the urgency to submit an application to MOC or to Ministry of Steel on 25.09.2001 and another application dated 01.10.2001 to Department of Mining and Geology, Government of Maharashtra, is evident from two other communications made to MOC on 17.10.2001 and 22.10.2001 and also from application dated 01.10.2001 submitted to Department of Mining and Geology, Government of Maharashtra. In his communication dated 17.10.2001, A-2 Ashok Daga submitted that in addition to sponge iron project they are also putting up induction furnaces to manufacture steel billets and ingots of all grade of capacity 1 lakh TPA. Copy of IEM registration dated CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 101 of 216 17.10.2001 issued by Ministry of Commerce and Industries in this regard was also enclosed with the said letter. However in the subsequent communication dated 22.10.2001, A-2 Ashok Daga not only made a reference to the aforesaid acknowledgment of IEM dated 17.10.2001 issued by Department of Industries qua steel billets and ingots but also stated to Chairman, Screening Committee that he is well aware that the Screening Committee meeting is likely to take place on 29.10.2001. He also stated that he has come to know that the applications qua sponge iron plant are not being considered. He thus made a request for considering their application also alongwith that of steel plants being considered by the Screening Committee.
Thus it is clear from these circumstances that A-2 Ashok Daga was well aware that a Screening Committee meeting was likely to be held shortly and accordingly in order to not miss the bus he proceeded to submit the application on behalf of "Gondwana Ispat Ltd." (a non-existent entity) to all the concerned authorities while still not taking complete steps to get the company first registered with ROC.
112. This conclusion further gets fortified from a perusal of the contents of application dated 01.10.2001 submitted under the signatures of some authorised officer, "Gondwana Ispat Ltd." to Department of Mining and Geology, Government of Maharashtra.
The said letter dated 01.10.2001 Ex. PW 7/B (D-58) read as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 102 of 216 Gondwana Ispat Ltd.
Ref: GIL/2001 1 October, 2001 The Director, Geology and Mining Government of Maharashtra Old Secretariat Building, Civil Lines NAGPUR 440 001
SUB: REQUEST FOR RECOMMENDING OUR CASE FOR RELEASE OF COAL BLOCK TO MINISTRY OF STEEL Dear Sir, We are proposing to set up a Sponge Iron Plant in Warora MIDC, Warora. We have applied to Ministry of Steel for recommending to Ministry of Coal for the release of Warora North Captive Coal Block which is in the Northern part of abandoned Warora Coal Mine (Khanji Village Area). Copy of our application and the Block Area is enclosed. We are given to understand from Western Coalfields Ltd., that they are not going to work the Warora Block west of the Railway Line and hence they have No Objection to release the property requested by us. As per WCL this property has extractable reserves of 6 to 8 million tons. When we discussed this matter with the Ministry of Steel, they have requested us to obtain a recommendatory letter from the Director, Geology & Mining. The matter has become urgent as we understand that the Screening Committee Meeting is due to take place on 29th October, 2001. If our case is to be included in the meeting, the recommendation of Ministry of Steel will have to be received by the Ministry of Coal by the 14th October, 2001. This means that the Ministry of Steel will have to process our case and sent the recommendation by the 8th of October, 2001. Hence the urgency of the matter.
We are aware that DGM has been strongly supporting and helping Private Entrepreneurs to take up Coal Mining in Maharashtra. In view of the same and looking to the urgency of the matter we request you to kindly write to the Ministry of Steel to consider our case at the earliest.
Thanking you, Sd/ Yours faithfully For: Gondwana Ispat Ltd.
Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 103 of 216 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 103 of 216
113. Alongwith the said letter, copy of application dated 25.09.2001 submitted to Ministry of Steel by A-2 Ashok Daga was also enclosed. The aforesaid facts per-se explains the urgency on account of which A-2 Ashok Daga proceeded to submit application dated 25.09.2001 not only to MOC but also to Ministry of Steel and another application dated 01.10.2001 was submitted to Department of Mining and Geology, Government of Maharashtra without first getting the company registered with ROC.
114. Apart from the aforesaid facts, the malafide intention or the existence of guilty intention on the part of A-2 Ashok Daga in somehow procuring allocation of a coal block is also evident even otherwise from the record. Admittedly A-2 Ashok Daga had initially submitted an application dated 22.04.2000 to MOC seeking allocation of "Ekarjuna Extension" coal block while stating that the said coal block is required for captive use in their proposed washing-cum- sponge iron plant of 60,000 TPA. The said application however was rejected by MOC on the ground that as per existing guidelines an application for mining of coal block for quantity less than 1 MTPA in CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 104 of 216 opencast mining and for quantity less than 2,50,000 MTPA in underground mining is not permissible in order to ensure economic/scientific mining of Indian coal. It was thus found that coal requirement of 0.7-0.8 lac TPA did not confirm to the existing guidelines of MOC. This rejection of application dated 22.04.2000 was duly communicated by MOC vide letter dated 01.06.2000 Ex. PW 1/D-1 to "Gondwana Ispat Ltd." at the address given by A-2 Ashok Daga in his application dated 22.04.2000. Subsequently in the application dated 25.09.2001, A-2 Ashok Daga stated that the proposed washing-cum-sponge iron plant to be established is of capacity 1.20 lac TPA. Consequently the requirement of raw-coal was also enhanced to approximately .28 lac TPA. In the said letter it was also mentioned that as the plant would be set up in Warora Tehsil, District Chandrapur so they have applied to MIDC for allotment of 10- 20 acres of land. Copy of the said letter Ex. PW 10/E was also enclosed with the application. However a perusal of said copy of letter written to MIDC, shows that the land was sought for establishing a sponge iron plant of capacity 60,000 MTPA only at Warora Tehsil, District Chandrapur. The purpose of highlighting the aforesaid fact is that in the application dated 25.09.2001, the capacity of proposed washery-cum-sponge iron plant was stated as 1.20 lac MTPA with coal requirement of approximately .28 lac MTPA so as to meet the existing guidelines of MOC but actually the land was still being sought from MIDC for a plant of capacity 60,000 MTPA only. This fact rather lends support to the argument of Ld. Sr. P.P. that there was actually no intention of A-2 Ashok Daga at any point of time to establish any such plant be that of 60,000 MTPA or that of 1.20 lac CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 105 of 216 MTPA and his whole objective was to somehow procure allocation of a captive coal block and thereafter sell it off in the market so as to earn undue profits. Certainly if there was a genuine intention of A-2 Ashok Daga in establishing the proposed washing-cum-sponge iron plant of capacity 1.20 lac MTPA then the land from MIDC would have also been sought for the plant of capacity 1.20 lac MTPA only and not for a plant of 60,000 MTPA capacity.
115. Thus, in the overall facts and circumstances of the case, it is seen that not only there was dishonest concealment of true and correct facts by A-2 Ashok Daga in submitting the application dated 25.09.2001 for seeking allocation of "Warora Coal Block" but it is also apparent that there was no intention of actually establishing any such plant of whatever capacity at any point of time. From the communication dated 01.10.2001 sent to Department of Mining and Geology, Government of Maharashtra and communication dated 22.10.2001 of A-2 Ashok Daga, sent to MOC, it is also clear that A-2 Ashok Daga was well aware that a Screening Committee meeting is likely to take place on 29.10.2001 and so he wanted to ensure that applications for allocation of a captive coal block are submitted well in time to all concerned authorities. As earlier mentioned on 17.10.2001 one other application was also submitted by A-2 Ashok Daga wherein it was stated that in addition to sponge iron plant they are also putting up induction furnaces to manufacture steel billets and ingots of all grade of capacity 1 lac TPA. Copy of IEM registration dated 17.10.2001 issued by Ministry of Commerce and Industry was also enclosed. Thereafter in the communication dated 22.10.2001 there is CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 106 of 216 again a reference to the IEM dated 17.10.2001, submitted to Industries Department and request was also made to consider their application. A conjoint reading of the communications dated 17.10.2001 and 22.10.2001 also shows that the IEM for manufacturing of Steel billets and ingots in addition to sponge iron plant was also submitted on urgent basis with Department of Industries only with a view to ensure that the application for allocation of a captive coal block may be considered in the forthcoming Screening Committee meeting itself be it qua their proposed sponge iron plant or for the proposed steel billets and ingots plant. Admittedly no other supporting document be it project report or techno-economic feasibility report in support of the new proposal to manufacture steel billets or ingots was submitted at any point of time.
116. Though at this stage, I may also state that various question marks also arises as regard the working of MOC. The private parties were not only having all the information of internal working of MOC but were also submitting various self-contradictory communications so as to fulfill the formality of moving an application for seeking allocation of a captive coal block. However the fact that MOC officers or that of any other Ministry were not careful in their working or that their conduct was not aboveboard can not absolve the present accused persons of their acts.
117. Be that as it may, from the aforesaid discussion, it is clear that A-2 Ashok Daga had in fact no intention at any point of time to establish any end use plant, be that of washery or of sponge iron CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 107 of 216 plant and he simply moved one or the other application in the name of "Gondwana Ispat Ltd." so as to procure allocation of a captive coal block. The subsequent discussion qua other head of charges will again reinforce this conclusion.
118. Thus it is clear that application dated 25.09.2001 was submitted by A-2 Ashok Daga knowing fully well that no such company actually exists and his act of signing the application as director of the said company was clearly towards dishonestly concealing the true and correct facts from MOC and thereby amounted to deception qua the offence of cheating.
119. At this stage, it will be also worthwhile to reproduce the following observations of Hon'ble Supreme Court as were made in the case Shivanarayan Kabra Vs. State of Madras, AIR 1967 SC 986, regarding the offence of cheating. A direct analogy can be drawn from the facts of the said case over here.
"4. It was argued, in the first place, on behalf of the appellant that on the admitted or proved facts no case of cheating has been made out against the appellant and therefore his conviction under Section 420 of the Indian Penal Code was illegal. We are unable to accept this argument as correct. It has been found that the appellant sent a letter, Ex. P- 34 along with a copy of the business terms, Ex. 34(a) "on which we undertake business of our clients". In this document the appellant has made the representation that he could do business in forward contracts in cotton, grains, seeds, bullion, black pepper etc. in accordance with the pucca adatia system and "in accordance with the usual practice and usage of the various associations concerned". In Ex. P-33 the appellant sent a telegram to PW 2 intimating that "buying is advisable for quick profits". The appellant knew fully well that he had no right to do forward business and that he was not a member of any recognised association and that he could not lawfully advertise to PW 2 for investment in forward contracts. It is not necessary that a false CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 108 of 216 pretence should be made in express words by the appellant. It may be inferred from all the circumstances including the conduct of the appellant in obtaining the property and in Ex. P- 34(a) the appellant stated something which was not true and concealed from PW 2 the fact that he was not a member of any recognised association and that he was not entitled to carry on the forward contract business. It is clear that PW 2 would not have parted with the sum of Rs. 12,000 but for the inducement contained in Ex. P-34 and the representation of the appellant that he could lawfully carry on forward contract business."
(Emphasis supplied by me)
120. The offence of attempt to cheat also came under consideration before Hon'ble Supreme Court in yet another case titled Bashirbhai Mohamedbhai Vs. State of Bombay, AIR 1960 SC 979, wherein following observations were made.
"5. The last point argued was that there was no attempt to cheat because the complainant had not been deceived. It is true that the complainant had not been taken in. He had never believed that the accused could actually duplicate currency notes. He feigned belief only in order to trap the accused. That however clearly makes no difference so far as an attempt to cheat is concerned. The accused had attempted to cheat the complainant. That they had failed in their attempt is irrelevant in considering whether they had committed the offence of attempting to cheat. This view of the matter has been accepted in the High Courts uniformally. In Government of Bengal v. Umesh Chunder Mitter (ILR 16 Cal 310, 316) it was observed that " A man may attempt to cheat, although the person he attempts to cheat is forewarned, and is therefore not cheated."
This is clearly the right view."
121. At this stage it would be also worthwhile to deal with one other submission put-forth by Ld. Counsels for the accused persons that the act of submission of application dated 25.09.2001 to MOC by A-2 Ashok Daga stood ratified by A-1 M/s GIL and thus being a pre- incorporated agreement/contract, it assumes the character of a CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 109 of 216 perfectly legal act. In this regard, it will be suffice to state that though the said principle of pre-incorporation agreements/contracts do not apply to the facts under consideration as no agreement or contract was at all entered into but the issue can be viewed from another angle also. As demonstrated above A-2 Ashok Daga had committed an illegal act by dishonestly concealing true and correct facts from MOC while submitting application dated 25.09.2001 that "Gondwana Ispat Ltd." is not yet in existence having been not yet registered with ROC. Can in such circumstances, the company M/s GIL say that it owes up the responsibility for such an illegal act. Can the illegality [The aforesaid act of A-2 Ashok Daga can in now way be described as a mere irregularity] so committed by A-2 Ashok Daga can be rectified by the company M/s GIL by ratifying the said act. The answer to all these questions is a big "No". In fact the case law relied upon by Ld. Counsel for A-2 Ashok Daga is of no help as in none of the said cases there was any issue of dishonest concealment of facts involved as is there in the present case. Had A-2 Ashok Daga disclosed in his application dated 25.09.2001 the actual status of "Gondwana Ispat Ltd." or his own relation with the proposed company then one could have said that by virtue of letter dated 17.10.2001, 22.10.2001 and 13.06.2002 the said act of A-2 Ashok Daga was adopted by A-1 M/s GIL and thereby ratified. However as already stated no one can say that an illegal act was subsequently ratified and thereby the illegality attached to the said act got removed or the act became legal. In fact the moment application dated 25.09.2001 was submitted to MOC by A-2 Ashok Daga deliberately concealing true and correct facts, the offence of attempt to cheat stood committed. It is however certainly CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 110 of 216 correct that as in response to the said application no property came to be delivered by MOC so the offence of cheating itself does not stand proved. However as regard the offence of attempt to cheat, all the necessary ingredients duly stands proved beyond shadows of all reasonable doubts.
I accordingly hold A-2 Ashok Daga guilty of the offence of attempt to cheat i.e. u/s 420/511 IPC and convict him thereunder as regard the present head of charge under discussion.
CHARGE-I Thirdly, during the year 2001, you Ashok Daga submitted an application dated 25/09/2001 to Ministry of steel, Govt. of India for seeking recommendation of Ministry of Steel to Ministry of Coal for allocation of Warora West Coal block in favour of Gondwana Ispat by falsely showing Gondwana Ispat as a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
122. On 25.09.2001 A-2 Ashok Daga also submitted an application along with covering letter dated 25.09.2001 Ex. PW 5/C (colly) (D-6) to Ministry of Steel seeking its recommendation to Ministry of Coal in favour of "Gondwana Ispat Limited" for allotment of a coal mining block having capacity of 0.28 MTPA. Both the application and the covering letter were written on the letterheads purporting to be that of "Gondwana Ispat Limited" and were signed by CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 111 of 216 Ashok Daga as Director "Gondwana Ispat Limited". Along with the said application "PROMOTER GROUP PROFILE" was also submitted on yet another letterhead purporting to be that of "Gondwana Ispat Limited" and the same was also bearing signatures of Ashok Daga as Director "Gondwana Ispat Limited". Copy of an acknowledgement of IEM issued by Ministry of Commerce and Industry dated 25.09.2001 with respect to manufacture of sponge iron was also enclosed beside "Index Map" of coal block "Warora (West) lying North of Warora city". Copy of an undated letter submitted to MIDC seeking allotment of 10-20 acres of industrial land in Warora- MIDC industrial estate for sponge iron plant of capacity 60,000/- MTPA was also enclosed beside the project report of the proposed sponge iron plant of 1,20,000/- MTPA.
123. It has been submitted by Ld. Sr. P.P. Sh. Sanjay Kumar that once again A-2 Ashok Daga intentionally and dishonestly concealed true and correct facts from Ministry of Steel that "Gondwana Ispat Ltd." has not yet been registered with ROC and is thus a non-existent entity. It was submitted that A-2 Ashok Daga thus clearly deceived Ministry of Steel so as to induce them to issue a recommendation letter to MOC in favour of "Gondwana Ispat Ltd." for allotment of a captive coal block and in fact he even became successful in obtaining such a recommendation letter. The offence of cheating was thus clearly stated to have been made out.
124. On the other hand Ld. Counsel for A-2 Ashok Daga has strongly argued that no offence of cheating is made out against the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 112 of 216 accused. It was submitted that alongwith application dated 25.09.2001 Ex. PW 5/C (Colly) A-2 Ashok Daga had not only attached the promoters profile but also copy of application for IEM as was submitted by him to Ministry of Commerce and Industry. It was pointed out that in the said application it was clearly stated that registration of "Gondwana Ispat Ltd." has been "APPLIED". It was however further submitted that CBI has deliberately tampered with file Ex. PW 5/A (Colly) (D-6) i.e. file of Ministry of Steel so as to falsely implicate the accused. It was submitted that the copy of application of IEM so filed by A-2 Ashok Daga alongwith his application was deliberately removed and was replaced by the acknowledgement of IEM issued by Ministry of Commerce and Industry. It was also submitted by Ld. defence counsel that from the said application of IEM as was allegedly enclosed with the application dated 25.09.2001, it would have been clear to Ministry of Steel that "Gondwana Ispat Limited" was not yet registered as a company. In support of his assertion that file of Ministry of Steel has been tampered with, Ld. Defence Counsel relied upon the depositions of PW 5 Deepak Anurag, Joint Secretary, Ministry of Steel, PW 15 Inspector Sunit Kumar Pal who had seized the said file from Ministry of Steel and that of PW 13 IO Inspector Rajbir Singh. It was also submitted that admittedly there were cutting over the page numbers mentioned on various pages of the file and which clearly pointed out that the file has been tampered with so as to remove the application of IEM submitted by "Gondwana Ispat Limited" to Ministry of Commerce and Industry.
125. As regard the issue of inducement, Ld. Counsel for A-2 Ashok CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 113 of 216 Daga vehemently argued that admittedly the office memorandum dated 09.10.2007 Ex. PW 5/D vide which recommendation was made by Ministry of Steel to Ministry of Coal in favour of "Gondwana Ispat Limited" for allotment of proposed coal block was issued after registration of the company with ROC and thus no inducement at all took place. Ld. Counsel for A-2 Ashok Daga also argued that the recommendation letter issued by Ministry of Steel cannot be termed as property within the meaning of Section 420 IPC. It was thus submitted that none of the ingredients of the offence of cheating u/s 420 IPC thus stood made out.
126. On the other hand, prosecution has vehemently disputed the fact that the file of Ministry of Steel Ex. PW 5/A (colly) has been in any manner tampered with. It has been rather submitted that from the application dated 25/09/2001 Ex. PW 5/C (colly) itself it was clear that only acknowledgement received from Ministry of Industry qua filing of IEM was enclosed and not the application as was submitted to the Ministry of Commerce and Industry.
MY DISCUSSION AND CONCLUSION
127. Before proceeding to deal with the substantive issues raised by Ld. Counsel for A-2 Ashok Daga, I first intend to deal with the issue of tampering of file. I may however state at the outset itself that though some suggestions in this regard were put by Ld. defence counsels to the prosecution witnesses but all such suggestions have been vehemently denied by them. Even otherwise from a perusal of file Ex. PW 5/A (Colly) (D-6) of Ministry of Steel itself, it is clear that CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 114 of 216 the said submission regarding tampering of file is completely without any basis. In fact if the application dated 25.09.2001 Ex. PW 5/C (colly) submitted by A-2 Ashok Daga to Ministry of Steel is seen then it is clear that what was attached with the application was IEM received from Ministry of Industry. This fact finds mention in the copy of very application submitted to Ministry of Steel under the signatures of A-2 Ashok Daga. Thus, if in place of said acknowledgment issued by Ministry of Commerce and Industry, the very application which was submitted on behalf of "Gondwana Ispat Limited" to Ministry of Commerce and Industry would have been attached then A-2 Ashok Daga would have accordingly stated so instead of stating that IEM received from Ministry of Industry is attached. The said acknowledgement attached with the application dated 25.09.2001 was in fact the document which was issued by Ministry of Commerce and Industry. The application towards filing of IEM was rather submitted on behalf of "Gondwana Ispat Ltd." to the Ministry of Commerce and Industry. At this stage it would be worthwhile to reproduce Clause 15 of the application as was submitted to Ministry of Steel by A-2 Ashok Daga under his own signatures. [Application is part of Ex. PW 5/C (colly) (D-6)].
"15. STATUS OF PROJECT
1. LAND APPLIED TO M.I.D.C. (COPY ENCLOSED).
2. IEM RECEIVED FROM MINISTRY OF INDUSTRY ATTACHED.
3. APPLIED FOR FINANCIAL ASSISTANCE."
(Emphasis supplied by me)
128. Similarly, it is found that when copy of a letter dated 17.10.2001 was submitted on behalf of A-1 M/s Gondwana Ispat CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 115 of 216 Limited to Ministry of Coal regarding putting up of Induction Furnace to manufacture steel billets and ingots in addition to sponge iron plant then also what was enclosed with the said letter was copy of acknowledgement issued by Ministry of Commerce and Industry. Though no conclusion is however being drawn from the said letter dated 17.10.2001 but the same has been mentioned to only highlight that it is only the acknowledgement of filing of IEM which is issued by Ministry of Commerce and Industry and after an application in this regard is submitted to Ministry of Commerce and Industry by the company concerned. Thus it is clear that what was filed by A-2 Ashok Daga alongwith his application dated 25.09.2001 was the IEM received from Ministry of Industry i.e. the acknowledgement issued by Ministry of Industry. The said acknowledgement is thus duly available on record. Moreover from a perusal of note dated 03.10.2001 and 04.10.2001 recorded in file Ex. PW 5/A (Colly) (D-6) it is clear that the step taken by "Gondwana Ispat Ltd." towards filing of IEM has been duly acknowledged in the said notes while mentioning the effective steps taken by the company towards implementing the proposed project. Clearly this fact emanates from a combined reading of the application dated 25.09.2001 submitted by A-2 Ashok Daga coupled with the acknowledgement issued by Ministry of Commerce and Industry as was enclosed with the application.
129. As regard the issue of cutting of page numbers on various pages of file Ex. PW 5/A (colly) (D-6) it will be worthwhile to reproduce the following answers given by PW 15 Inspector Sunit Kumar Pal in his cross-examination conducted by Ld. Counsel for A-2 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 116 of 216 Ashok Daga. Inspector Sunit Kumar Pal had in fact collected the said file from Ministry of Steel during the course of Preliminary Enquiry No. PE 219 2012 0004 registered by CBI with respect to coal block allocation matters. PW 13 Inspector Rajbir Singh, IO, of the present case had subsequently collected the said file from him during the course of investigation of the present case. In his cross-examination PW-15 Insp. Sunit Kumar Pal stated as under:
"It is correct that on the note sheet pages and correspondence side pages there are more than one serial number qua pagination thereof. I am not aware as to how so many serial numbers qua pagination came to be put up by the Ministry of Steel officers as at the time of seizure I had separately got all the pages inside the file serially numbered and the independent witness in whose presence the file in question was seized signed/ initialed on each of the pages.
Attention of the witness has been drawn to certain numbering on the top of note sheet pages which have been struck off and upon enquiry witness stated that at times if at thetime of seizure of the files any serial number given on the pages by the Ministry is not found to be in seriatim then we put fresh numbering on the pages after cutting of the initial numbers. "
130. Thus in view of my aforesaid discussion and keeping in view the overall facts and circumstances of the case coupled with the record available, I am of the considered opinion that Ld. Counsel for the accused persons have clearly failed in substantiating their allegation even for the purposes of preponderance of probabilities that the file Ex. PW 5/A (colly) (D-6) of Ministry of Steel has been tampered with by CBI. I thus do not find any reason to even presume for the sake of arguments that file Ex. PW 5/A (colly) of Ministry of Steel has been tampered with. It thus cogently stands proved from the records available that alongwith application dated 25.09.2001 Ex.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 117 of 216 PW 5/C (colly) it was only the acknowledgement of filing of IEM issued by Ministry of Commerce and Industry which was filed and not the copy of application as was filed by A-2 Ashok Daga with Ministry of Commerce and Industry towards filing of IEM.
131. With the aforesaid background, I now propose to discuss the prosecution case further so as to examine whether any offence of cheating is made out against A-2 Ashok Daga on the basis of evidence led by the prosecution. At the cost of repetition, it will be worthwhile to however reiterate the essential ingredients required to prove the offence of cheating i.e. u/s 420 IPC as under:
"(i) Cheating;
(ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security; and
(iii) the mens rea of the accused at the time of making the inducement. The making of a false representation is one of the ingredients for the offence of cheating under Section 420.
Further, to constitute the offence of cheating as defined in Section 415 IPC, the section requires -
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."
132. However before proceeding further, it will be also worthwhile to first reproduce the letter dated 25.09.2001 and the application submitted by A-2 Ashok Daga to Ministry of Steel. The same read as under.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 118 of 216 Gondwana Ispat Ltd.
Ref : GIL/2001 Dated : 25.09.2001
The Secretary,
Ministry of Steel
Udyog Bhawan
New Delhi-110001
Sub: APPLICATION FOR ALLOTMENT OF CAPTIVE COAL MINING
WARORA TEHSIL DISTRICT: CHANDRAPUR FOR OUR
PROPOSED WASHERY CUM SPONGE IRON PROJECT.
Dear Sir,
We propose to set up a 1.20 lakhs Tonnes per annum Washery cum
Sponge Iron Plant. The detailed project report of the Sponge Iron
Plant is enclosed in Annexure-I.
The Plant would be set in Warora Tehsil, Distt. Chandrapur
(M.S.) We have applied to M.I.D.C. for allotment of 10-20 acres
of land. (letter enclosed).
The Sponge Iron Plant would consume approx. 2.80 lakhs tonnes/
annum of raw Coal. The Coal would be washed in our washery
with 70% recovery and 30% rejects which will be used for land
filling. There will be no midlings for our Sponge Iron Plant. As
we are setting up our washery cum sponge iron project in Warora Tehsil, Distt. Chandrapur, we are placing our request for allotment of a small coal bearing area lying North of Warora city West of the main Delhi-Chennai railway line. The location of the block is barely about 10K.M. from our washery cum sponge iron project.
We are enclosing a location Map of Warora West lying North of Warora city, in Warora Tehsil. The total reserve in the earmarked block estimated to be 11-13 millions tonnes. However depending upon the encroachment and town expansion on the mine land we expect the extractable reserves to be about 8 million tonnes. It is basically an underground mine, with an output of 0.28 million tonnes per annum.
Contd...2 Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 119 of 216 Gondwana Ispat Ltd.
-2-The Project will not be burdened because of mining as most of the mining equipment, raising, transportation would be on lease/contract basis.
Basically the mining cost parameters has been considered with a view that as if the entire mining would be underground mining because of the encroachment in the mine area.
The washery would be setup with a cost outlay of Rs.1.25 crores to recover 70% washed coal. The washing would be barral washing or equivalent technology to achieve optimum washed coal results with minimum rejects.
We have appointed M/s Scholar Consultant and Engineering Services, 6, 'SANDEEP', South Ambajhari Road, Laxmi Nagar, Nagpur as our consultant for complete implementation of project.
We request you to kindly recommend allocation of a Mining Block to the Ministry of Coal having capacity of .28 M.T./Annum.
Thanking you, Yours sincerely, FOR GONDWANA ISPAT LIMITED Sd/-
Ashok Daga DIRECTOR.
Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 120 of 216 Gondwana Ispat Ltd.
APPLICATION FOR CAPTIVE COAL BLOCK
1. NAME : GONDWANA ISPAT LTD.
2. ADDRESS : SHOP NO.3 & 4, POONAM CHAMBERS, CHAONI, NAGPUR13
3. ACTIVITY OF COMPANY : a. MANUFACTURE OF SPONGE IRON. b. WASHING OF COAL.
c. COAL MINING.
4. CAPACITY : a. SPONGE IRON - 1.20 LAKHS TONS/ ANNUM b. MINING COAL - 2.80 LAKHS TONS/ ANNUM
5. LOCATION : PLANT - WARORA TEHSIL, DISTRICT :
CHANDRAPUR.
MINING - WARORA WEST LYING NORTH OF WARORA CITY.
DIST. CHANDRAPUR.
6. COAL REQUIREMENT : a. RAW COAL - 2.8 LAKHS TON/ANNUM. b. WASHED COAL - 1.96 LAKHS TON/ ANNUM.
7. BLOCK APPLIED FOR : WARORA WEST LYING NORTH OF WARORA CITY.
8. GRADE OF COAL : DF
9. QUALITY : HIGH ASH, HIGH SULPHUR
10. METHOD OF MINIG : BASICALLY UNDERGROUND
11. PROSPECTED BY : DIRECTOATE OF GEOLOGY & MINING NAGPUR.
12. RESERVES : APPROX. 12 MILLION TONNES.
Contd....2 Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 121 of 216 Gondwana Ispat Ltd.
2
13. DISTANCE BETWEEN PANT : ABOUT 10 K.M. AND MINE
14. PROMOTORS : AURIC GEMS & JEWELLERY PVT. LTD.
& ASSOCIATES.
15. STATUS OF PROJECT : 1. LAND APPLIED TO M.I.D.C. (COPY ENCLOSED)
2. IEM RECEIVED FROM MINISTRY OF INDUSTRY ATTACHED.
3. APPLIED FOR FINANCIAL ASSISTANCE.
for: GONDWANA ISPAT LTD.
Sd/ Ashok Daga DIRECTOR Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273
133. The "Promotors Group Profile" enclosed with the application read as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 122 of 216 Gondwana Ispat Ltd.
PROMOTORS GROUP PROFILE GROUP BACKGROUND:
The Group hails from Rajasthan Bikaner and has been in various forms of industrial ventures and businesses for the past 200 years having establishments in various parts of India Major business included Cotton Mills, Banks, Coal, Barytes, Dolomite Mining etc. The Group controlled 'M/s Ballarpur Collieries Company' one of the largest coal mining organization and coal producers of Central India prior to Nationalization.
PROFILE:
Being an industrial group we have expanded our business activities to achieve repute and success in the field of Gems & Jewellery wherein we are not only hosting a jewellery show room in the name and style of M/s Auric Gems & Jewellery Pvt. Ltd. at Nagpur but are involved in the manufacture of ethanic Indian Jewellery having establishments of manufacture in Rajasthan and Mumbai.
Our group turnover from all the activities is around 25 crores and we are in the wake of entering the export market for export of expertly crafted Indian and Diamond/Gems studded jewellery.
Success has come to us from determination and years of hard work.
for GONDWANA ISPAT LTD.
Sd/ Ashok Daga DIRECTOR Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 123 of 216
134. Thus, in so far as the issue of deception is concerned, it has already been discussed at length in the discussion qua First and Second head of charges that there was dishonest concealment of true and correct facts by A-2 Ashok Daga as on 25.09.2001 when the application in question was submitted to Ministry of Steel, that "Gondwana Ispat Limited" was not yet registered with ROC. Moreover, A-2 Ashok Daga also knew fully well that the facts being represented by him were false. The manner in which the said application and accompanying letter alongwith "Promoters Group Profile" was drafted on the letterheads purporting to be that of "Gondwana Ispat Ltd." coupled with signing of all the said documents by A-2 Ashok Daga as Director "Gondwana Ispat Limited" clearly shows that not only there was dishonest concealment of facts but the said acts were intentional in nature as he knew knowing fully well that he is not director of any such company and more so when the company actually does not exists. Thus, it is crystal clear that dishonest and intentional deception was made by A-2 Ashok Daga with Ministry of Steel in submitting its application dated 25.09.2001 and thereby requesting it to make the recommendation in favour of "Gondwana Ispat Limited" to Ministry of Coal for allotment of proposed captive coal block.
Moreover no explanation has been furnished as to why it was not disclosed in any of the said communications by A-2 Ashok Daga that "Gondwana Ispat Limited" is not yet registered with ROC or that the application is being submitted on behalf of a proposed company. Again no explanation has been furnished as to why A-2 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 124 of 216 Ashok Daga signed various documents as "Director, Gondwana Ispat Limited" and not as a promoter thereof.
135. As regard the issue of Ministry of Steel having been induced on the basis of said deception, it would be worthwhile to note the processing of application dated 25.09.2001 Ex. PW 5/C (colly) in Ministry of Steel. The said application upon being received in Ministry of Steel was processed by the concerned dealing assistant Ms. Kiran in Industrial Development Wing (IDW) on 03.10.2001. In the said note the dealing assistant after reproducing the facts as were mentioned in the application dated 25.09.2001 by A-2 Ashok Daga further proposed that company may be asked to furnish certain additional information. The file thereafter came to the desk of Joint Industrial Advisor Sh. D. Kashiva and who vide his detailed note dated 04.10.2001 [Available at note sheet page 2-4 in note sheet pages Ex. PW 5/B (colly) in file Ex. PW 5/A (colly) (D-6)], while again mentioning various facts as were stated in the application dated 25.09.2001 further gave his comments interalia as under:
Note dated 04.10.2001 of Sh. D. Kashiva, Joint Industrial Advisor, Ministry of Steel.
". . . . .
. . . . .
. . . . .
Comments.
As per the norms followed in the Ministry, their sponge iron grade non coking coal requirement would be 1.92 lakhs tonnes per annum. Considering 70% yield as indicated by them (against 40% as per the norms of this Ministry), their ROM coal requirement works out to 2.74 lakhs TPA for proposed sponge iron capacity. For 30 years plant life, their ROM requirement would be 8.22 Million Tonnes which is almost equal of the extractable reserves indicated by the company.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 125 of 216 Since proposal falls within the parameters of the guidelines followed in the Ministry of Coal and this Ministry, we may have no objection to recommend their case for allotment for proposed captive coal mining block subject to the following conditions:-
(i) The proposed block is included in the list of blocks available for Private Sector and also that the application meets the policy guidelines fixed by Ministry of Coal for allocation of captive mining blocks.
(ii) Allocation of coal block may be cancelled in case of unsatisfactory progress of implementation of their sponge iron project and coal mining activity as per the provisions of MMR&D Act, 1957.
(iii) Claim of the company regarding geological reserve, extractable reserves, grades of coal & yield etc. may be verified by Ministry of Coal.
Submitted for Orders.
Sd/-
(D. Kashiva) Joint Industrial Adviser 4.10.2001"
(Emphasis supplied by me).
136. Thus, with the said proposal that Ministry of Steel may have no objection in recommending the case for allotment of proposed captive coal mining block, the file came to the desk of Joint Secretary (Steel) and who while referring to the note of Sh. D. Kashiva as above further forwarded it to Secretary (Coal) with his note dated 08.10.2001 that proposal put up by Sh. D. Kashiva may be approved.
Thereafter, Secretary (coal) approved the said proposal on 08.10.2001 itself and the file traveled back to the desk of Sh. D. Kashiva on 09.10.2001. It was thereafter that Sh. D. Kashiva sent an office memorandum dated 09.10.2001 Ex. PW 5/D to Ministry of Coal under his signatures recommending allotment of proposed captive coal block to "Gondwana Ispat Limited".
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 126 of 216
137. From the aforesaid processing of application dated 25.09.2001 Ex. PW 5/C (colly), it is thus clear that not only the application was processed in Ministry of Coal prior to 05.10.2001 i.e. prior to the registration of company but in fact on 04.10.2001 itself it was proposed by the Joint Industrial Advisor that Ministry of Steel may recommend the company for allotment of proposed captive coal block. In his deposition PW 5 Sh. Deepak Anurag the then Director Ministry of Steel specifically stated that had this fact been to the knowledge of Ministry of Steel that "Gondwana Ispat Limited" has not been yet registered as a company with Registrar of Companies then they would not have made any such recommendation. As regard the submission of Ld. Counsel for A-2 Ashok Daga that proposal of making recommendation to the Ministry of Coal was approved on 08.10.2001 by Secretary (coal) and by that time the company "Gondwana Ispat Limited" already stood registered, it would be suffice to state that admittedly from 25.09.2001 i.e. when the application was submitted by A-2 Ashok Daga till 09.10.2001 i.e. when office memorandum Ex. PW 5/D was sent to Ministry of Coal by Sh. D. Kashiva no communication was made by A-2 Ashok Daga that "Gondwana Ispat Limited" has since been registered with ROC. In fact the occasion of making any such communication by A-2 Ashok Daga or Ministry of Steel seeking any clarification from him in this regard did not arise at all as the very application was submitted by him in such a manner that nobody may even have any iota of doubt that "Gondwana Ispat Limited" in whose name the application has been moved is even not in existence or that it has not been registered with ROC. It is thus a completely fallacious argument that after CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 127 of 216 05.10.2001 the deception which was earlier played by A-2 Ashok Daga ceases to hold ground. Clearly the matter was processed in Ministry of Steel believing the application dated 25.09.2001 of A-2 Ashok Daga to be stating true and correct facts. As already stated the manner in which the application was drafted on the letterhead purporting to be that of "Gondwana Ispat Limited" coupled with signing of the application by A-2 Ashok Daga as Director "Gondwana Ispat Limited" gave no occasion whatsoever to Ministry of Steel, officers to even doubt that applicant entity "Gondwana Ispat Limited"
was not yet registered with Registrar of Companies.
138. Moreover, in the letter dated 25.09.2001 Ex. PW 5/C (colly) the only request made to Ministry of Steel by A-2 Ashok Daga was to recommend allocation of a mining block in favour of "Gondwana Ispat Limited" to Ministry of Coal having capacity of 0.28 MTPA. Thus, vide letter dated 09.10.2001 Ex. PW 5/D (colly) recommendation in favour of "Gondwana Ispat Ltd." was accordingly sent to Ministry of Coal by Ministry of Steel. It is thus clear that on account of deception played by A-2 Ashok Daga Ministry of Steel was indeed induced to issue a letter of recommendation to Ministry of Coal for allotment of proposed captive coal block in favour of "Gondwana Ispat Limited". In these circumstances the other submission of Ld. Counsel for A-2 Ashok Daga that the mere issuance of recommendation letter as above by Ministry of Steel can not be termed as delivery of any property within the meaning of Section 420 IPC is also not tenable especially in the light of observations of Hon'ble Supreme Court as were made in the case Abhyanand Mishra (Supra), as regard the meaning of the term CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 128 of 216 "Property" vis-a-vis the offence of cheating. The said observations will be worth reproducing again over here:
"We do not accept the contention for the appellant that the admission card has no pecuniary value and is therefore not 'property'. The admission card as such has no pecuniary value, but it has immense value to the candidate for the examination. Without it he cannot secure admission to the examination hall and consequently cannot appear at the Examination.
In Queen Empress v. Appasami (1) it was held that the ticket entitling the accused to enter the examination room and be there examined for the Matriculation test of the University was 'property'.
In Queen Empress v. Soshi Bhushan (2) it was held that the term 'property' in s. 463, Indian Penal Code, included the written certificate to the effect that the accused had attended, during a certain period, a course of law lectures and had paid up his fees."
139. Thus, in the present case also the letter of recommendation issued by Ministry of Steel was of immense value to A-2 Ashok Daga as it facilitated him in procuring allocation of a coal block from Ministry of Coal in favour of "Gondwana Ispat Limited". Admittedly Ministry of Coal had insisted that application for allocation of captive coal blocks be routed through Ministry of Steel as it was the concerned Administrative Ministry. Moreover, even at the time of 20 th Screening Committee meeting where reservation of "Majra Coal Block" was made in favour of "Gondwana Ispat Limited", Ministry of Steel representative had referred to the said letter dated 09.10.2001 while stating that Ministry of Steel had already recommended the case of the company in October 2001 itself. In view of my aforesaid discussion it is thus clear that letter of recommendation dated 09.10.2001 Ex. PW 5/D was a property " within the meaning of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 129 of 216 Section 420 IPC" as it was of immense value to the accused in procuring allocation of a captive coal block from MOC.
140. At this stage it would be also worthwhile to deal with yet one other contention of Ld. Counsel for A-2 Ashok Daga that had Ministry of Steel made some enquiry or properly considered the matter then it would have come to know from the copy of application of IEM submitted by A-2 Ashok Daga alongwith application dated 25.09.2001 that "Gondwana Ispat Ltd." is not yet registered with ROC or that the same has been applied for.
141. Though, I have already concluded in the earlier part of my discussion that no such copy of application as was allegedly submitted to Ministry of Commerce and Industry towards filing of IEM was actually filed by A-2 Ashok Daga with Ministry of Steel and what was enclosed with the application dated 25.09.2001 was only the acknowledgement issued by Ministry of Commerce and Industry, but even otherwise it is no argument that had Ministry of Steel made proper enquiry or scrutiny than it would have come to know that "Gondwana Ispat Ltd." was not yet registered with ROC.
142. In this regard observations of Hon'ble Supreme Court made in the case "Iridium India Telecom Limited Vs. Motorola Incorporated and Others. (2011) 1 SCC 74 are worth taking note of. While dealing with the issue of willful concealment of facts which were material and ought to have been disclosed, but were intentionally withheld so as to deceive the appellant into advancing and spending a sum of Rs. 500 crores. Hon'ble Supreme Court in CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 130 of 216 para 73 to Para 74 observed as under:
"73. It would at this stage be appropriate to notice the observations made by the House of Lords in Central Railway Co. of Venezuela v. Kisch which would be of some relevance to the issue under consideration. In this case, the House of Lords examined the duty of those who issued a prospectus inviting investments from the general public and held that they were required to make a true and full disclosure of all the relevant facts. The House of Lords quoted with approval the observations made in New Brunswick and Canada Railway Co. v. Muggeridge wherein it has been observed as follows: (ER p.
425) "..Those who issue a prospectus holding out to the public the great advantages which will accrue to persons who will take shares in a proposed undertaking, and inviting them to take shares on the faith of the representations therein contained, are bound to state everything with strict and scrupulous accuracy, and not only to abstain from stating as facts that which is not so, but to omit no one fact within their knowledge the existence of which might in any degree affect the nature, or extent, or quality of privileges and advantages which the prospectus hold out as inducements to take shares;"
74. The House of Lords went on to observe that it is no answer to a person who has been deceived that he would have known the truth by proper inquiry. It would be apposite to reproduce here the observations made by the House of Lords on this aspect of the matter: (Kisch case, LR pp.120-21) "But it appears to me that when once it is established that there has been any fraudulent misrepresentation or willful concealment by which a person has been induced to enter into a contract, it is no answer to his claim to be relieved from it to tell him that he might have known the truth by proper inquiry. He has a right to retort upon his objector, 'You, at least, who have stated what is untrue, or have concealed the truth, for the purpose of drawing me into a contract, cannot accuse me of want of caution because I relied implicitly upon your fairness and honesty.' I quite agree with the opinion of Lord Lyndhurst, in Small v Attwood, that:
'Where representations are made with respect to the nature and character of property which is to become the subject of purchase, affecting the value of that property, and those representations afterwards turn out to be incorrect and false, to the knowledge of the party making them, a foundation is laid for CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 131 of 216 maintaining an action in a court of common law to recover damages for the deceit so practiced; and in a Court of equity a foundation is laid for setting aside the contract which was founded upon that basis.' And in Dobell v Stevens, to which he refers as an authority in support of the proposition, which was an action for deceit in falsely representing the amount of the business done in a public house, the purchaser was held to be entitled to recover damages, although the books were in the house, and he might have had access to them if he thought proper. Upon the whole case I think the decree of Lords Justices ought to be affirmed, and the appeal dismissed with costs."
(Emphasis supplied by me)
143. Thus even if for the sake of arguments it is presumed that copy of application filed with Ministry of Commerce and Industry towards filing of IEM was enclosed with application dated 25.09.2001 then also in view of deliberate concealment of true and correct facts in the application that "Gondwana Ispat Ltd." is not yet registered with ROC coupled with signing of application and other documents by A-2 Ashok Daga as "Director, Gondwana Ispat Ltd.", it can not be argued that after proper inquiry Ministry of Steel could have known that "Gondwana Ispat Ltd." is not yet registered with ROC. From the manner in which the application dated 25.09.2001 was processed in Ministry of Steel as has been discussed in detail above, it is clear that on account of deception played by A-2 Ashok Daga, Ministry of Steel officers were clearly induced in issuing a letter of recommendation dated 09.10.2001 in favour of "Gondwana Ispat Ltd." to MOC for allotment of proposed "Warora Coal Block".
144. Before parting away with the discussion qua the present head of charge under discussion, I would also like to deal with yet one CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 132 of 216 other submission of Ld. Counsel for A-2 Ashok Daga. It was submitted that soon after filing of application i.e. memorandum towards IEM with Ministry of Commerce and Industry, a copy of the memorandum was sent to Ministry of Steel and thus by that channel, the copy of memorandum so filed by "Gondwana Ispat Ltd." was available with Ministry of Steel. However PW-5 Deepak Anurag, the then Director, Ministry of Steel in his cross-examination stated that he does not remember having received any such office memorandum.
Even otherwise no such office memorandum is available in the files of Ministry of Steel. Moreover even if it is presumed that such an office memorandum was received then also in view of my aforesaid discussion and the well settled position of law, the Ministry of Steel could not have been expected to make inquiry to find out the actual facts and especially as regard the fact as to whether applicant entity "Gondwana Ispat Ltd." actually exists or not. Moreover, necessity of making any such inquiry would have arose only if there was any occasion to Ministry of Steel to have any doubts about the very existence of applicant entity "Gondwana Ispat Ltd.". As already discussed the deception was made so cleverly by A-2 Ashok Daga that no one in Ministry of Steel could have entertained even a single doubt that "Gondwana Ispat Ltd." is a non-existent entity having been not registered with ROC.
145. It was also submitted by Ld. Counsel for A-2 Ashok Daga that Ministry of Steel was primarily concerned with the technical aspects of the project proposal submitted to it by A-2 Ashok Daga and was not at all concerned with the fact as to whether "Gondwana Ispat Ltd." on CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 133 of 216 whose name the application was submitted was a registered company or not. In this regard, I may however state that even if it is presumed for the sake of arguments that the comments of Ministry of Steel were essential only qua the technical aspects of the proposal but still it will be a completely fallacious argument to say that the said comments on technical aspects of the project would have been furnished by Ministry of Steel on any proposal whether received from company duly registered under Indian Companies Act or by a partnership firm or by an individual. Certainly the exercise of submitting comments even qua the technical aspects on a given project pre-supposes that the application vide which the project proposal has been submitted is otherwise in complete order in as much as it meets all the requirements of law. Thus as the applicant seeking allocation of a coal block for captive use was necessarily to be a company under CMN Act, 1973 so the submission of comments by Ministry of Steel even as regard technical aspects of the proposed project, pre-supposed that the applicant entity i.e. "Gondwana Ispat Ltd." in the present case was a duly registered company with ROC. It thus can not be stated that Ministry of Steel was not at all concerned with the status of applicant entity.
146. As regard another submission of Ld. Counsel for A-2 Ashok Daga that alongwith application dated 25.09.2001 the "Promotors Group Profile" was also filed, it would be suffice to state that the said document as already mentioned was also prepared on a letterhead purporting to be that of "Gondwana Ispat Ltd." and was signed by A-2 Ashok Daga as Director "Gondwana Ispat Ltd.". Thus the said CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 134 of 216 "Promotors Group Profile" also rather goes to show that the company "Gondwana Ispat Ltd." has been promoted by the said persons only. By no stretch of imagination the said document conveys or signifies that "Gondwana Ispat Ltd." is not yet registered with ROC.
147. In view of my aforesaid discussion, I am thus of the considered opinion that prosecution has clearly been successful in proving beyond shadows of all reasonable doubts the offence of cheating i.e. u/s 420 IPC against A-2 Ashok Daga as regard the present head of charge under discussion.
148. I accordingly hold A-2 Ashok Daga guilty of the offence of cheating i.e. u/s 420 IPC for cheating Ministry of Steel qua the present head of charge under discussion and accordingly convict him thereunder.
CHARGE-I "Fourthly, during the year 2001, an application dated 01/10/2001 was submitted in the name of M/s Gondwana Ispat Ltd. to the Director, Geology and Mining, Govt. of Maharashtra for seeking recommendation of Govt. of Maharashtra to Ministry of Steel for consideration of their case by falsely mentioning that Western Coalfields Ltd. has given no objection for release of Warora Block in favour of Gondwana Ispat and falsely showing Gondwana Ispat as a Ltd. Company. Whereas on that date Gondwana Ispat was not a registered company and thereby you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance."
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 135 of 216
149. On 01.10.2001 an application was submitted to Department of Mining and Geology, Government of Maharashtra, purportedly on behalf of "Gondwana Ispat Ltd." seeking a recommendation letter to Ministry of Steel to consider their request as already submitted to them for recommending their case to MOC for allotment of "Warora Coal Block". Alongwith the said application, copy of application dated 25.09.2001 earlier submitted by A-2 Ashok Daga on behalf of "Gondwana Ispat Ltd." to Ministry of Steel for making recommendation to MOC in favour of "Gondwana Ispat Ltd." for allotment of "Warora Coal Block" alongwith map of the block area was also enclosed.
150. It has been argued by Ld. Sr. P.P. Sh. Sanjay Kumar that deception was once again played with Department of Mining and Geology, Government of Maharashtra, at the instance of A-2 Ashok Daga so as to obtain recommendation in favour of a non-existent entity i.e. "Gondwana Ispat Ltd." for allotment of a captive coal block knowing fully well that no such company actually existed on the said date. It was also submitted that the application was submitted in such a format that no officer in Government of Maharashtra could even have slightest of doubt that no such entity "Gondwana Ispat Ltd." actually existed. It was also submitted that the said application was processed in Department of Mining and Geology, Government of Maharashtra on 03.10.2001 and after the file moved through the desk of various officers, a letter of recommendation in favour of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 136 of 216 "Gondwana Ispat Ltd." was indeed sent to Ministry of Steel for allocation of "Warora Coal Block" on 12.10.2001. It was however submitted that PW-7 Sh. Vishwas Sawakhande, who was the then Director, Department of Mining and Geology, Government of Maharashtra, has specifically deposed that on the day of sending the letter dated 12.10.2001 Ex. PW 7/B [available in file, Ex. PW 5/A (Colly) (D-6)] to Ministry of Steel, he was not aware as to whether "Gondwana Ispat Ltd." was registered or not. He also deposed that had he been aware that "Gondwana Ispat Ltd." was not yet registered with ROC then no such recommendation would have been sent by him to Ministry of Steel. It was thus submitted by Ld. Sr. P.P. Sh. Sanjay Kumar that all the ingredients of the offence of cheating thus stood satisfied as the letter of recommendation issued by Department of Mining and Geology, Government of Maharashtra, was of immense value to A-2 Ashok Daga in seeking allocation of a captive coal block from MOC and accordingly the said letter of recommendation dated 12.10.2001 Ex. PW 7/B was clearly a "Property" within the meaning of Section 420 IPC.
151. On the other hand Ld. Counsel for A-2 Ashok Daga has vehemently argued that admittedly the application dated 01.10.2001 was not submitted under the signatures of A-2 Ashok Daga and the prosecution has failed to prove as to under whose signatures the said application was submitted. It was also submitted that the said application might have been moved at the instance of co-promoter or of "Gondwana Ispat Ltd." namely Sh. Govind Das Daga and thus A-2 Ashok Daga can not be held liable for any such act. It was also CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 137 of 216 submitted that admittedly the letter of recommendation by Department of Mining and Geology, Government of Maharashtra, was sent to Ministry of Steel on 12.10.2001 and by that time "Gondwana Ispat Ltd." was already registered with Government of Maharashtra and thus no deception qua any fact whatsoever took place. The prosecution was thus stated to have miserably failed in proving the said charge against A-2 Ashok Daga.
MY DISCUSSION AND CONCLUSION
152. Before proceeding further, it will be worthwhile to first have a glance over the said application dated 01.10.2001 Ex. PW 7/B (D-58) as was submitted to Department of Geology and Mining, Government of Maharashtra purportedly on behalf of "Gondwana Ispat Ltd.". The said application has been reproduced hereunder:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 138 of 216 Gondwana Ispat Ltd.
Ref: GIL/2001 1 October, 2001 The Director, Geology and Mining Government of Maharashtra Old Secretariat Building, Civil Lines NAGPUR 440 001
SUB: REQUEST FOR RECOMMENDING OUR CASE FOR RELEASE OF COAL BLOCK TO MINISTRY OF STEEL Dear Sir, We are proposing to set up a Sponge Iron Plant in Warora MIDC, Warora. We have applied to Ministry of Steel for recommending to Ministry of Coal for the release of Warora North Captive Coal Block which is in the Northern part of abandoned Warora Coal Mine (Khanji Village Area). Copy of our application and the Block Area is enclosed. We are given to understand from Western Coalfields Ltd., that they are not going to work the Warora Block west of the Railway Line and hence they have No Objection to release the property requested by us. As per WCL this property has extractable reserves of 6 to 8 million tons. When we discussed this matter with the Ministry of Steel, they have requested us to obtain a recommendatory letter from the Director, Geology & Mining. The matter has become urgent as we understand that the Screening Committee Meeting is due to take place on 29th October, 2001. If our case is to be included in the meeting, the recommendation of Ministry of Steel will have to be received by the Ministry of Coal by the 14th October, 2001. This means that the Ministry of Steel will have to process our case and sent the recommendation by the 8th of October, 2001. Hence the urgency of the matter.
We are aware that DGM has been strongly supporting and helping Private Entrepreneurs to take up Coal Mining in Maharashtra. In view of the same and looking to the urgency of the matter we request you to kindly write to the Ministry of Steel to consider our case at the earliest.
Thanking you, Sd/ Yours faithfully For: Gondwana Ispat Ltd.
Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 139 of 216 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 139 of 216
153. From a bare perusal of the aforesaid application dated 01.10.2001 as was submitted to Department of Mining and Geology, Government of Maharashtra, it is clear that the same was drafted in such a manner on a letter head purporting to be that of "Gondwana Ispat Ltd." so that no one can have even slightest of doubt that the applicant entity "Gondwana Ispat Ltd." on whose behalf the application was submitted does not exist or has not yet been registered with ROC. No doubt the signatory of the said letter could not be identified during the course of investigation and accordingly no evidence in this regard could be led by the prosecution. However an important aspect to be noted in this regard is that alongwith the said letter dated 01.10.2001 copy of application dated 25.09.2001 Ex. PW 5/C (Colly) as was earlier submitted by A-2 Ashok Daga to Ministry of Steel seeking their recommendation in favour of "Gondwana Ispat Ltd." to MOC for allocation of a captive coal block was duly enclosed. As already discussed above, the said application dated 25.09.2001 was submitted to Ministry of Steel under the signatures of A-2 Ashok Daga. Thus, it was incumbent upon A-2 Ashok Daga to explain as to under what circumstances, copy of application dated 25.09.2001 and copy of map of block area as was also submitted by him to Ministry of Steel came to be enclosed with letter dated 1.10.2001 Ex. PW 7/B submitted to Department of Mining and Geology, Government of Maharashtra. Thus even if application dated 01.10.2001 Ex. PW 7/B, is presumed to have been moved on behalf of Govind Das Daga as argued by Ld. Counsel for A-2 Ashok Daga then also from the facts and circumstances of the case and the contents of letter dated 01.10.2001, Ex. PW 7/B, it is crystal clear that the said letter was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 140 of 216 submitted to Department of Mining and Geology, Government of Maharashtra, not only with the knowledge of A-2 Ashok Daga but with his consent only. In the letter dated 01.10.2001, it has been specifically stated that when the matter was discussed with Ministry of Steel then they had requested them to obtain a recommendatory letter from Department of Mining and Geology, Government of Maharashtra. Thus it is clear that letter dated 01.10.2001 Ex. PW 7/B was submitted to Department of Mining and Geology, Government of Maharashtra, only because Ministry of Steel had asked for a recommendation from Department of Mining and Geology, Government of Maharashtra. Even the other facts mentioned in the letter dated 01.10.2001 Ex. PW 7/B also correspond with the facts mentioned by A-2 Ashok Daga in his communication dated 22.10.2001 to MOC and which again fortifies the conclusion that letter dated 01.10.2001 was submitted to Department of Mining and Geology, Government of Maharashtra, at the instance of A-2 Ashok Daga only.
154. In the aforesaid facts and circumstances, it becomes completely inconsequential that prosecution has been unable to lead any evidence to show as to under whose signatures the said letter dated 01.10.2001 Ex. PW 7/B was submitted to Department of Mining and Geology, Government of Maharashtra. Since no such company "Gondwana Ispat Ltd." was in existence so a question arises as to from whom the IO could have made enquiries to know as to under whose signatures the said application has been submitted.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 141 of 216
155. Since various other acts, qua submitting of other applications to MOC and Ministry of Steel were found to have been undertaken by A-2 Ashok Daga only so in the light of said facts coupled with the fact that copy of application dated 25.09.2001 submitted by him to Ministry of Steel was enclosed with letter dated 01.10.2001 Ex. PW 7/B, so u/s 106 Indian Evidence Act, 1872, it was for A-2 Ashok Daga only to explain as to under whose signatures the said letter dated 01.10.2001 was submitted to Department of Mining and Geology, Government of Maharashtra. Clearly this is a fact which could be to his exclusive knowledge only and no adverse inference can thus be drawn against the prosecution in this regard.
156. Proceeding further it will be worthwhile to reiterate that it is no longer in dispute that as on 01.10.2001 no such company with the name "Gondwana Ispat Ltd." was in existence. Thus the acts of signing the letter dated 01.10.2001 Ex. PW 7/B on behalf of "Gondwana Ispat Ltd." and that too after drafting the letter on a letter head purporting to be that of "Gondwana Ispat Ltd." were clearly conscious and intentional acts so as to give an impression that the application in question is being submitted on behalf of a company "Gondwana Ispat Ltd.". At the same time concealing of the fact that "Gondwana Ispat Ltd." was not yet registered with ROC and thus does not exist clearly amounted to dishonest concealment of facts and thereby constituted deception in terms of explanation to Section 415 IPC which read as under:
"415. Cheating.-- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 142 of 216 person shall retain any property, or intentionally induces the person so deceived 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, is said to "cheat".
Explanation.--A dishonest concealment of facts is a deception within the meaning of this section.
157. There is yet another aspect relating to the said letter dated 01.10.2001. It was stated in the letter that they have been given to understand from the Western Coalfields Ltd. that they are not going to work the Warora block West of the railway line and hence they have no objection to release the property requested by them. In this regard when during the course of investigation PW-13 Insp. Rajbir Singh made enquiries from Western Coalfields Ltd. then vide letter dated 19.12.2015, Ex. PW 4/B (Colly), it was informed by General Manager, P&P, Western Coalfields Ltd. that neither M/s Gondwana Ispat Ltd. had ever requested Western Coalfields Ltd. to release "Warora Coal Block" nor any "no objection" was issued by Western Coalfields Ltd. for release of "Warora Coal Block" to that company. In fact during the course of entire trial neither any communication, if made either by A-2 Ashok Daga or by "Gondwana Ispat Ltd." with Western Coalfields Ltd. seeking release of Warora coal block in favour of "Gondwana Ispat Ltd." nor any communication, if received from Western Coalfields Ltd. giving "no objection" for release of said coal block was placed on record. Moreover as already mentioned that on 01.10.2001 "Gondwana Ispat Ltd." was not in existence so any such communication could not have been made by the company but could have been made either by A-2 Ashok Daga himself or by some CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 143 of 216 other person on his behalf. Thus it was yet another wrong statement of fact mentioned in the letter dated 01.10.2001. Moreover in the cross-examination of PW-4 Abhash Chandra Singh, General Manager, Western Coalfields Ltd. examined by the prosecution in this regard, nothing material could be elicited which could either favour the accused or may lead me to disbelieve the case of prosecution in this regard.
158. At this stage, I would also like to deal with yet one other issue raised by Ld. Counsel for A-2 Ashok Daga, that if any inconsequential information, has not played any role in inducing any authority to do any act which it would not have done otherwise then even if the said information is found to be false then also no offence of cheating can be said to have been committed. It was further submitted that the issue of grant of "No objection" was a completely inconsequential fact and the same in no manner induced Department of Mining and Geology, Government of Maharashtra, in issuing the recommendation letter. In this regard, I may however state that since by virtue of letter dated 01.10.2001 Ex. PW 7/B recommendation in favour of "Gondwana Ispat Ltd." towards allotment of "Warora Coal Block" was being sought so the aforesaid representation that Western Coalfields Ltd. had given their no objection was in no manner inconsequential as the said coal block was within the jurisdiction of Western Coalfields Ltd. In fact in the overall facts and circumstances of the matter it was an important fact in procuring recommendation of Department of Mining and Geology, Government of Maharashtra, for allocation of said coal block in favour of "Gondwana Ispat Ltd.". It thus CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 144 of 216 can be easily stated that the mentioning of false fact as above in the letter dated 01.10.2001 qua "No objection" given by Western Coalfields Ltd. while having knowledge that no such consent has been given by WCL was clearly part of deception played upon Department of Mining and Geology, Government of Maharashtra by A-2 Ashok Daga and the same was also an important fact which induced the said department in issuing a letter of recommendation to Ministry of Steel in favour of "Gondwana Ispat Ltd.".
159. Moreover from the processing of letter dated 01.10.2001, it is clear that not only the said request received allegedly on behalf of "Gondwana Ispat Ltd."was processed in Department of Mining and Geology, Government of Maharashtra, on 03.10.2001 itself but even otherwise till 12.10.2001 i.e. when letter of recommendation Ex. PW 5/D-2 (D-6) was sent to Ministry of Steel, there was no communication either from A-2 Ashok Daga or on behalf of "Gondwana Ispat Ltd." which in the meantime got registered on 05.10.2001 that the company which was earlier not registered has since been registered. In fact as earlier also mentioned the letter dated 01.10.2001 Ex. PW 7/B was drafted in such a manner that no one could even have slightest of doubts that the applicant entity i.e. "Gondwana Ispat Ltd." does not exist or that it has not yet been registered with ROC. Thus it is clear from the facts and circumstances as discussed above that the letter dated 01.10.2001 Ex. PW 7/B was processed in Department of Mining and Geology, Government of Maharashtra with the belief that the applicant entity i.e. "Gondwana Ispat Ltd." was a registered company with ROC. The CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 145 of 216 department processed the application dated 01.10.2001 submitted by A-2 Ashok Daga with the belief that the application states true and correct facts. PW-7 Vishwas Sawakhande in fact deposed that had he known that "Gondwana Ispat Ltd." was not yet registered with ROC then he would not have sent any recommendation letter to Ministry of Steel. Once again in the cross-examination of PW-7 Vishwas Sawakhande also as was conducted on behalf of accused persons nothing could be elicited which could favour the accused persons or may lead me to disbelieve the case of prosecution.
160. It will be now also pertinent to mention that in the letter dated 01.10.2001 Ex. PW 7/B, Department of Mining and Geology, Government of Maharashtra, was only requested to write to Ministry of Steel to recommend the case of "Gondwana Ispat Ltd." for allotment of a coal block to MOC. Thus vide letter dated 12.10.2001 Ex. PW 7/D the Department of Mining and Geology, Government of Maharashtra, had accordingly written to Ministry of Steel to make a recommendation in favour of "Gondwana Ispat Ltd." to MOC for allocation of proposed coal block. The said letter of recommendation dated 12.10.2001 Ex. PW 7/D read as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 146 of 216 No. TEC/1535/2001/4878____: :
Directorate of Geology and Mining.
Government of Maharashtra.
Old Secretariat Building. Ist Floor.
Civil Lines, Opposite - G.P.O..
NAGPUR-440001:
Dated. Nagpur the: 12 OCT 2001 To:
The Secretary, Ministry of Steel, Udyog Bhavan, NEW DELHI-110 001 :
Through: The Secretary, Trade, Commerce & Mining, Mantralaya, Mumbai.
Subject: Request for recommending to release the Warora North Captive Coal Block in favour of Gondwana Ispat Limited. Ref'nce: Letter No. GIL/2001, dt. 25-9-2001, from Gondwana Ispat Limited, Nagpur.
-- x --
Sir, With reference to above, M/s. Gondwana Ispat Limited, Nagpur has sent a request application for allotment of Warora North Captive Coal block in their favour and has requested this Directorate for recommending their case to your ministry. Since the applicant/company has proposed to install a Sponge Iron Plant for which the washed coal from this area shall be utilised. The company has, therefore, decided to set up Washery also based on coal from this area.
In view of above, you are kindly requested to consider the request of M/s Gondwana Ispat Ltd. and submit your recommendations to Ministry of Coal at the earliest, so that the case of Gondwana Ispat can be decided in the next Screening Committee Meeting by Ministry of Coal, Government of India.
Yours faithfully, Sd/-
Director of Geology and Mining.
Government of Maharashtra, Nagpur Advance copy submitted to : -
(1) The Secretary, Ministry of Steel, Govt. of India, New Delhi, for information.
(2) Copy for information to : -
Gondwana Ispat Limited, Nagpur.
Sd/-
Director of Geology and Mining.
Government of Maharashtra, Nagpur.
--x--
_____________ ((HHB:12102001)) (Emphasis supplied by me) CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 147 of 216
161. Thus from the aforesaid discussion, it is clear that on account of the deception played at the instance of A-2 Ashok Daga, the Department of Mining and Geology, Government of Maharashtra, was clearly induced to issue a letter of recommendation in favour of "Gondwana Ispat Ltd." to Ministry of Steel requesting it to recommend the company for allotment of a captive coal block to MOC. Advance copy of the said recommendation letter dated 12.10.2001 was also sent to MOC and also to "Gondwana Ispat Ltd.".
162. The other contention of Ld. Counsel for A-2 Ashok Daga that the said letter of recommendation issued by Department of Mining and Geology, Government of Maharashtra, can not be termed as property within the meaning of Section 420 IPC. The said issue I may however state has already been discussed by me in detail in the discussion qua third head of charge but still it will be worthwhile to reiterate the observations of Hon'ble Supreme Court in this regard as were made in the case Abhyanand Mishra case (supra). While dealing with the issue as to whether issuance of an admission card to sit in examination can be termed as "Property" within the meaning of Section 420 IPC, Hon'ble Supreme Court in the said case observed as under:
"We do not accept the contention for the appellant that the admission card has no pecuniary value and is therefore not 'property'. The admission card as such has no pecuniary value, but it has immense value to the candidate for the examination. Without it he cannot secure admission to the examination hall and consequently cannot appear at the Examination. In Queen Empress v. Appasami, (1889) I.L.R. 12 Mad. 151, it was held that the ticket entitling the accused to enter the examination room and be there examined for the Matriculation test of the University was 'property'.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 148 of 216 In Queen Empress v. Soshi Bhushan, (1893) I.L.R. 15 All. 210, it was held that the term 'property' in s. 463, Indian Penal Code, included the written certificate to the effect that the accused had attended, during a certain period, a course of law lectures and had paid up his fees."
163. Further in the case Ishwar Lal Vs. State of Maharashtra, 1969 Cr.L. J. 271 SC, the assessment order passed by an Income Tax Officer was also held to be "Property" within the meaning of Section 420 IPC. Hon'ble Supreme Court in the said case observed as under:
"The word 'property' occurring in S. 420 I.P.C. does not necessarily mean that the thing of which a delivery is dishonestly desired by the person who cheats, must have a money value or a market value, in the hand of the person cheated. Even if the thing has no money value, in the hand of the person cheated, but becomes a thing of value, in the hand of the person, who may get possession of it, as a result of the cheating practised by him, it would still fall within the connotation of the term property in S. 420 IPC. The communicated order of assessment determining the total income of the assessee and the tax payable on the basis of such assessment is property since it is of great importance to assessee as containing a computation of his total income and as a determination of his tax liability. There can also be delivery of the said assessment order, and as such an offence under S. 420 can be committed in respect of such an assessment order by dishonestly inducing the Income-Tax Officer, to deliver the particular property, viz., the assessment order, as passed by him, in and by which a considerably low amount has been determined, as the total income of the assessee, on the basis of which the amount of tax has been fixed."
164. Similar observations were also made by Hon'ble Supreme Court in the case N.M. Chakraborty Vs. State of West Bengal, 1977 Cr.LJ, 961, SC as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 149 of 216 "The word "property" does not necessarily mean that the thing, of which delivery was dishonestly desired by the person who cheats, "must have a money value or a market value, in the hand of the person cheated". Even if the thing has no money value, in the hand of the persons cheated, but becomes a thing of value, in the hand of the person, who may get possession of it, as a result of the cheating practised by him, it would still fall within the connotation of the term 'property' in S. 420 IPC."
165. Thus in the present case also the letter of recommendation dated 12.10.2001 Ex. PW 7/D issued by Department of Mining and Geology, Government of Maharashtra, to Ministry of Steel, Government of India was of immense value to A-2 Ashok Daga as admittedly Ministry of Steel had asked A-2 Ashok Daga to obtain a recommendatory letter from Director, Department of Mining and Geology, Government of Maharashtra. In the letter dated 01.10.2001 itself it was stated that on account of impending Screening Committee meeting likely to take place on 29.10.2001, the matter has become urgent as the recommendation of Ministry of Steel will have to be received by MOC by 14.10.2001 if their case is to be included in the meeting. It was also stated that Ministry of Steel will have to thus process their case and sent the recommendations to MOC by 08.10.2001.
Thus, it is clear that letter of recommendation dated 12.10.2001 Ex. PW 7/D was a "Property" within the meaning of Section 420 IPC.
166. In view of my aforesaid discussion, it is thus crystal clear that on account of dishonest concealment of true and correct facts and by also stating false facts in the communication dated 01.10.2001, as CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 150 of 216 have been discussed above, intentional and dishonest deception was made with Directorate of Department of Mining and Geology, Government of Maharashtra, at the instance of A-2 Ashok Daga and thereby officers of Department of Mining and Geology, Government of Maharashtra, were indeed induced to make a recommendation in favour of "Gondwana Ispat Ltd." to Ministry of Steel for recommending the application of the company to MOC for allocation of proposed captive coal block.
167. A question may however arise that admittedly the recommendations of Ministry of Steel were sent to MOC vide letter dated 09.10.2001 and thus receipt of recommendation letter dated 12.10.2001 Ex. PW 7/D from Department of Mining and Geology, Government of Maharashtra, thereafter in Ministry of Steel was of no use at all. However in this regard, it would be suffice to state that the offence of cheating stood completed, the moment letter of recommendation dated 12.10.2001 Ex. PW 7/D was issued by Department of Mining and Geology, Government of Maharashtra, and it does not matter at all as to whether the same proved to be of any use to M/s GIL finally or not. Moreover a copy of said recommendation letter dated 12.10.2001 was also sent to MOC and where the Screening Committee much later decided to reserve Majra coal block in favour of "Gondwana Ispat Ltd.". In the 20th Screening Committee meeting both Ministry of Steel and Government of Maharashtra representatives supported the claim of "Gondwana Ispat Ltd." for allocation of a captive coal block. It thus can not be stated that recommendation of Department of Mining and Geology, CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 151 of 216 Government of Maharashtra, was of no use.
168. In view of my aforesaid discussion, I am thus of the considered opinion that prosecution has been successful in proving the offence of cheating i.e. u/s 420 IPC against A-2 Ashok Daga beyond shadows of all reasonable doubts as regard the present head of charge under discussion.
169. I accordingly hold A-2 Ashok Daga guilty of the offence of cheating u/s 420 IPC i.e. for cheating Department of Mining and Geology, Government of Maharashtra, qua the present head of charge under discussion and accordingly convict him thereunder.
Note: The fifth head of charge under Charge-I pertaining to sale of 50% equity in A-1 M/s GIL by A-2 Ashok Daga for a total sale consideration of Rs. 1.55 crores shall be however dealt with by me at a later stage of the judgment.
CHARGE-II "That during the year 2003, both of you in furtherance of the common object of the criminal conspiracy hatched between you both and as described in detail in the separate charge framed, with a view to procure allocation of "Majra coal block" in favour of M/s Gondwana Ispat Ltd., made false Submission before the 18th Screening Committee about financial tie up with financial institutions and tie up for supply of Iron Ore from Orissa and thereby both of you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Secondly, during the year 2003, both of you in CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 152 of 216 furtherance of the common object of the criminal conspiracy hatched between you both and as described in detail in the separate charge framed, with a view to procure allocation of "Majra coal block" in favour of M/s Gondwana Ispat Ltd., made false Submission before the 20th Screening Committee about procurement of land and tie up for supply of Iron Ore from Orissa and thereby both of you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance."
170. The case of the prosecution qua the aforesaid two head of charges is proposed to be discussed together as the discussion on the said two counts of charge will overlap.
171. The primary allegations qua the present two head of charges against both the accused persons i.e. A-1, M/s GIL and A-2 Ashok Daga are that before 18 th and 20th Screening Committee meetings, wrong facts were stated by A-2 Ashok Daga as a representative of A- 1 M/s GIL, knowing fully well that the facts being stated by him as regard the steps taken by "Gondwana Ispat Ltd." towards establishing the proposed end use project were false. While referring to the record notes of 18th Screening Committee meeting held on 05.05.2003, it has been submitted by Ld. Sr. P.P. Sh. Sanjay Kumar that A-2 Ashok Daga deliberately stated wrong facts before the 18 th Screening Committee about the status of the proposed project to be established by A-1 M/s GIL by stating that MIDC has been approached for land, finances have been tied-up with financial institutions and that iron ore has been tied-up from Orissa. It was however pointed out that during the course of investigation it became clear that no such tie-up with CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 153 of 216 financial institutions was ever arrived at much less till 05.05.2003 and also no tie-up qua supply of iron ore from Orissa was actually entered into by "Gondwana Ispat Ltd." with any iron ore supplier. It was also submitted that the request made to MIDC for allotment of land was also for a project of capacity 60,000 MTPA whereas in the application submitted to MOC, the project proposed to be established was of capacity 1.20 lac MTPA. It was further submitted by Ld. Sr. P.P. that in the 18th Screening Committee meeting final decision qua allocation of any coal block in favour of "Gondwana Ispat Ltd." was deferred as two new coal blocks i.e. "Majra-Belgaon" were added in the list of captive coal blocks in the said meeting only and thus it was thought appropriate to keep the said coal blocks in public domain for some time before they were formally allotted. It was however submitted that from the evidence led on record, it stands clearly proved that a decision to allot a captive coal block in favour of "Gondwana Ispat Ltd." was in principal taken in the 18th Screening Committee meeting itself. As regard 20th Screening Committee meeting held on 06.06.2003 it was submitted by Ld. Sr. P.P. that A-2 Ashok Daga, who again appeared before the Screening Committee on behalf of A-1 M/s Gondwana Ispat Ltd., stated to the Committee that they have approached MIDC for land and MIDC has given consent for 20 acres of land. It was also reiterated by A-2 Ashok Daga before the Committee that iron ore will be sourced from Orissa. It was thus submitted by Ld. Sr. P.P. that believing the said false statements as were made by A-2 Ashok Daga on behalf of A-1 M/s GIL, initially in the 18th Screening Committee meeting and thereafter in the 20 th Screening Committee meeting to be true, "Majra" coal block was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 154 of 216 reserved in favour of M/s GIL by the 20 th Screening Committee with the condition to achieve financial closure within a period of one year and in the meantime company was also provided temporary coal linkage from Western Coalfields Ltd. It was thus submitted by the prosecution that both A-2 Ashok Daga and A-1 M/s GIL in furtherance of the common object of a criminal conspiracy hatched by them deceived both 18 th and 20th Screening Committee, MOC on the basis of aforesaid false facts and thereby induced 20 th Screening Committee, MOC to reserve "Majra" coal block in favour of A-1 M/s Gondwana Ispat Ltd. while also offering temporary coal linkage from Western Coalfields Ltd. The offence of cheating in furtherance of common object of a criminal conspiracy was thus clearly stated to have been made out against both the accused persons.
172. On the other hand Ld. Counsels for both A-1 M/s GIL and A-2 Ashok Daga vehemently disputed the aforesaid claim on various grounds. As regard the facts recorded in the record notes of 18 th Screening Committee meeting, it was submitted that the same have been wrongly recorded. In order to support their said claim, it was argued that had there been any tie-up with financial institutions already arrived at then there was no reason for the 20 th Screening Committee to again put a condition of achieving financial closure within one year while offering reservation of "Majra" coal block to M/s Gondwana Ispat Ltd.. It was also submitted that admittedly the minutes of 18th and 20th Screening Committee meetings were received by M/s GIL vide letter dated 23.06.2003 of Sh. S.K. Kakkar, Under Secretary, MOC, i.e. after 20th Screening Committee meeting CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 155 of 216 was already held and where reservation of a coal block was already made in favour of the company. It was thus submitted that in these circumstances when reservation of a coal block was already made available to A-1 M/s GIL so it was not thought appropriate to challenge the said 18th Screening Committee meeting minutes since the same had become irrelevant. As regard the issue of tie-up of iron ore from Orissa, it was submitted that keeping in view the location of proposed end use project and that of captive coal block being sought, the iron ore could have been sourced from Orissa only and in this regard talks were already held with various iron ore suppliers but no final tie-up could have been entered into unless any coal block was made available to the company by MOC. In support of their submission, reference was also made by them to the deposition of DW-1, Mahesh D. Gupta who stated himelf to be a supplier of iron ore.
173. As regard the facts recorded in the minutes of 20 th Screening Committee meeting, it was submitted that not only in the year 2000, MIDC was approached for allocation of land in Warora Industrial area but in the year 2001 also a letter for allocation of 10-20 acres of land was submitted to MIDC and a copy thereof was filed alongwith letter dated 25.09.2001 vide which allocation of Warora Coal Block was sought for. It was submitted that subsequently after 18 th Screening Committee meeting fresh request was made to MIDC for allocation of land and MIDC had duly conveyed availability of land in Warora Industrial area and Tadali Industrial area and had asked the company to submit necessary documents for making available the said land. It CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 156 of 216 was submitted that again in the year 2003 also matter was pursued with MIDC for allotment of land and on 21.05.2003 MIDC had again informed "Gondwana Ispat Ltd." that land in Tadali District was available. It was thus submitted that on account of aforesaid circumstances, it was stated before the 20 th Screening Committee meeting held on 06.06.2003 that MIDC has given consent for allotment of land. It was thus submitted that there was no misrepresentation by A-1 GIL or by A-2 Ashok Daga as regard procurement of land from MIDC. It was further submitted that as subsequently MIDC was not having any suitable land on account of encroachments having taken place and there being scarcity of water so A-1 M/s GIL never complied with the requirement of submission of necessary documents as were asked for by MIDC.
174. Again as regard supply of iron ore from Orissa, it was submitted that various suppliers of iron ore were approached by A-2 Ashok Daga and he had discussion with them about the proposed requirement of iron ore and they had assured to supply the same from Orissa and thus in these circumstances, it was stated before the 20th Screening Committee that iron ore will be sourced from Orissa. It was also submitted that in the absence of firm allocation of a coal block in favour of "Gondwana Ispat Ltd." no final, contract or tie-up could be even later on made with such iron ore suppliers. It was thus submitted by Ld. Counsels for the accused persons that no misrepresentation of any nature whatsoever was made either before 18th Screening Committee meeting or before 20 th Screening Committee meeting which could be termed as deception within the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 157 of 216 meaning of Section 415 IPC. It was also submitted that in fact no property stood delivered as per 18 th Screening Committee meeting minutes and thus no offence of cheating stood made out at all against A-1, M/s GIL or A-2 Ashok Daga qua the said Screening Committee meeting. As regard decision of 20 th Screening Committee meeting, it was submitted that it has come on record that despite offering of temporary coal linkage from Western Coalfields Ltd. (WCL) no such coal linkage was made available to A-1 M/s GIL by WCL stating scarcity of resources. It was also submitted that even the letter of reservation of "Majra" coal block can not be termed as a "property" as on the basis of mere reservation letter neither any financial institution came forward to extend any financial assistance to the company nor the company could undertook any activity towards establishing the proposed end use project. The ingredients of the offence of cheating i.e. u/s 420 IPC were thus stated to have been not made out against either of the two accused persons.
MY DISCUSSION AND CONCLUSION
175. Since a discussion qua various issues raised by Ld. Counsels for the accused persons will revolve around the facts recorded in the minutes of 18th and 20th Screening Committee meetings in so far as the same pertains to "Gondwana Ispat Ltd." so it will be appropriate to reproduce the relevant portion of the minutes of the two Screening Committee meetings over here.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 158 of 216 Record note of 18th Screening Committee meeting [Ex. PW 1/E-15 (D-48)]:
"Record note of discussion of the 18 th Meeting of the Screening Committee held on 5.5.2003 at 11.00 A.M. in the Tagore Hall, Scope Complex, Lodhi Road, New Delhi under the Chairmanship of the Secretary (Coal) for the screening proposals relating to captive mining of coal / lignite by power generating companies and companies engaged in the manufacture of iron & steel and production of cement."
9. M/s Spong 2.74 Majra The party informed about the status of Gondwana e iron Itpa (31.04 the project. MIDC has been approached Ispat plant mt) for land, finances have been tied up with Limited Belgaon financial institutions, Iron ore has been (15 mt) tied up from Orissa. The plant is to be located in Warora (district Chandrapur).
Requirement of coal is 30 mt for 30 years.
The representative of Government of Maharashtra supported the case.
The Screening Committee informed that as these 2 blocks have been included in the list of identified captive coal blocks in this meeting itself they cannot be considered for allocation till they are put in the public domain for a reasonable time.
Decision on the case was deferred till the next meeting.
Record note of 20th Screening Committee meeting [Ex. PW 5/G (Colly) (D-
51)]::
"Record note of discussion of the 20th meeting of the Screening Committee held on 6.6.2003 at 10.00 am in the Tagore Hall, SCOPE Complex, Lodhi Road, New Delhi under the Chairmanship of the Secretary (Coal) for the screening proposals relating to captive mining of coal/lignite by power generating companies and companies engaged in the manufacture of iron & steel and production of cement.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 159 of 216 S.No. Name Block/Reserve Project/Enduse Requirement mt 9 M/s Gondwana Majra (31.04 mt) Sponge iron plant 2.74 Itpa Ispat Limited Belgaon (15 mt) Ministry of Steel informed that they had supported the project for allocation of a suitable block in October 2001.
Representative of the Company stated that they had approached the MIDC for land who have given consent for 20 acres. Iron ore will be sourced from Orissa (700 to 800 kms) and the coal block if allocated would be about 25 kms from the end use plant. He stated that reserves in Majra are 31 MT but extractable reserves are only 15 MT. After washing only 6 MT would be available and the mining would be done through underground method and therefore another block viz, Belgaon may be allocated. The Screening Committee offered reservation of a block and temporary tapering coal linkage subject to the outer limit for achieving financial closure being one year. The party was explained the mechanism of reservation and allocation of block after financial closure and the temporary tapering coal linkage concept. The representative of the Company agreed to this offer. He was requested by the Screening Committee to give a detailed project schedule/milestones/bar chart for end use project and mine development within a month. The Screening Committee decided to reserve Majra block for the applicant company. Adequacy of reserves and allocation of an additional block were decided to be examined separately."
176. However before adverting further, it would be worthwhile to mention that the proceedings of 18 th Screening Committee meeting and 20th Screening Committee meeting are to be read as part of a series of acts.
As earlier also discussed and demonstrated that the various acts of A-2 Ashok Daga in submitting applications dated 25.09.2001 for allocation of "Warora Coal Block" to MOC and Ministry of Steel or submission of application dated 01.10.2001 to Department of Mining and Geology, Government of Maharashtra at his instance CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 160 of 216 followed by applications dated 17.10.2001 and 22.10.2001 to MOC by him and thereafter submission of application dated 13.06.2002 to MOC for allocation of "Majra Belgaon" coal blocks were all part of a series of acts whereby efforts were made by A-2 Ashok Daga to somehow procure allocation of a coal block from MOC in the name of "Gondwana Ispat Ltd.". It is in that series of events only that the proceedings of 18th and 20th Screening Committee meetings are to be also read and considered as part of the said series of acts. Moreover the aforesaid conclusion is not being drawn by me either on the basis of any presumptions or assumptions or on the basis of any conjectures and surmises. In fact the accused persons themselves also considered the various applications so submitted and the proceedings of 18th and 20th Screening Committee meetings as part of a series of acts which ultimately led to reservation of "Majra" coal block in favour of A-1 M/s GIL. In this regard it would be worthwhile to refer to a communication dated 10.05.2003 Ex. PW 9/D (D-3) made by A-2 Ashok Daga on behalf of "Gondwana Ispat Ltd." to Secretary Coal, Government of India. The same read as under:
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 161 of 216 Gondwana Ispat Ltd.
Ref : GIL/2003 Dated : 10th May, 2003 To, The Secretary (Coal) Ministry of Coal Government of India Shastri Bhawan New Delhi110 001 Sir,
We wish to extend our gratitude for inviting us to attend the Screening Committee Meeting which was held on the 5 th of May 2003 and for giving us a patient hearing.
Your authority was kind enough to appreciate the efforts taken by us to prevent encroachment in "Warora coal block" area and the reasons for asking alternate blocks for our Washery cum Sponge Iron Project namely BelgaonMajra coal block.
Your authority was kind enough to convey to us in the Screening Committee Meeting the decision to allot us the block in principle though the final allotment would be issued in the forthcoming meeting on 26 th May, 2003.
Accordingly you had kindly advised us to proceed with the procurement of the land for our Sponge Iron Project.
As desired by your authority we are taking necessary steps for procurement of land etc. for setting up our Sponge Iron Project. Please find enclosed herewith a copy of our communication to the Regional Officer, MIDC, Maharashtra for procurement of land.
This is for your kind information.
Thanking you, Yours sincerely, For: GONDWANA ISPAT LTD.
Sd/ ASHOK DAGA DIRECTOR Address : No. 3 & 4, Auric Gems, Poonam Chambers, Chhaoni, Nagpur 13.
Tel. : 541176/ 523273 Fax : 523273 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 162 of 216 (Emphasis supplied by me.) CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 162 of 216
177. From a bare perusal of the contents of the said letter dated 10.05.2003 written by A-2 Ashok Daga, it is clear that in the 18 th Screening Committee meeting itself the decision to allot a captive coal block to "Gondwana Ispat Ltd.", was not only arrived at in-
principle but was also conveyed to A-2 Ashok Daga though it was stated that the final allotment will be made in the next meeting to be held on 26.05.2003. In the meantime "Gondwana Ispat Ltd." was advised to proceed with the procurement of land for their sponge iron plant. It was in accordance with the said advice that A-2 Ashok Daga submitted yet another application dated 09.05.2003 to MIDC for allotment of land for their proposed sponge iron plant of capacity, 1,20,000 MTPA and copy of the said letter was also enclosed with letter dated 10.05.2003 submitted to Secretary, Coal.
Though I shall be discussing the issue regarding the consent for allotment of land given by MIDC as was claimed before 20th Screening Committee, at a slightly later stage but it would be worthwhile to point out over here that the copy of letter dated 09.05.2003 as was stated to have been enclosed with letter dated 10.05.2003 Ex. PW 9/D submitted to Secretary, Coal was in fact received in MIDC on 12.05.2003.
178. Be that as it may, the fact remains that assurance of allotment of a coal block in-principle was given to "Gondwana Ispat Ltd." in the 18th Screening Committee meeting itself and pursuant to which necessary steps were being taken by them for procurement of land. A perusal of 20th Screening Committee meeting minutes would further CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 163 of 216 show that what was stated before the Screening Committee by A-2 Ashok Daga was the further status of land i.e. "They had approached the MIDC for land who have given consent for 20 acres". A-2 Ashok Daga also reiterated before the 20 th Screening Committee that iron ore will be sourced from Orissa. Thus from the said facts as stands recorded in the minutes of the two meetings, it is clear that the proceedings of 18th and 20th Screening Committee meetings were connected with each other in as much as "in-principle" decision to allot a coal block in favour of M/s GIL was taken in 18 th Screening Committee meeting and the said decision was formally finalized in 20th Screening Committee meeting by reserving "Majra" coal block in their favour while also offering them temporary coal linkage from Western Coalfields Ltd. Thus it is clear that the accused persons themselves also considered the two meetings as part of a series of meetings which ultimately led to reservation of Majra coal block in their favour and also in allocation of temporary coal linkage from Western Coalfields Ltd.
179. With the aforesaid background, I now come to one of the main submission of Ld. Counsels for the accused persons that the minutes of 18th Screening Committee meeting have been wrongly recorded.
180. At the outset, I may state that the aforesaid contention of Ld. Counsels for the accused persons is per-se not tenable and is only an attempt to wriggle out from the various false claims made before the Screening Committee by A-2 Ashok Daga on behalf of A-1 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 164 of 216 "Gondwana Ispat Ltd." regarding the status of progress made by the company towards establishing the proposed end use project. In fact accused persons have miserably failed to substantiate their allegation in this regard even for the sake of preponderance of probabilities or even in raising some reasonable doubts about the correctness of the minutes. The reasons for the said conclusion have been discussed hereunder.
181. In support of their submissions that the minutes of 18 th Screening Committee meeting have been wrongly recorded, Ld. Counsels for the accused persons have pointed out that had the representatives of "Gondwana Ispat Ltd." stated before 18th Screening Committee that finances have been tied up with financial institutions then there was no reason as to why in the 20 th Screening Committee meeting while offering reservation of a coal block any condition of achieving financial closure within a period of one year would have been put by the Screening Committee. It has also been submitted that as per prosecution case itself the minutes of 18 th Screening Committee meeting were sent to A-1 M/s GIL vide letter dated 22.06.2003 of Sh. S.K. Kakkar, Under Secretary, MOC after the 20th Screening Committee in its meeting held on 06.06.2003 had already reserved a coal block in favour of "Gondwana Ispat Ltd." and thus no objection was raised by A-1 M/s GIL or by A-2 Ashok Daga as regard the facts recorded in the minutes of 18 th Screening Committee meeting finding them to have since become irrelevant.
182. In this regard, it would be pertinent to mention that in the light CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 165 of 216 of illustration (e) to Section 114 Indian Evidence Act, 1872 a presumption exists that all the official acts have been regularly performed even though the said presumption is rebuttable.
Section 114, Indian Evidence Act, 1872, read as under:
"114. Court may presume existence of certain facts. --The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case."
Illustration (e) to Section 114, Indian Evidence Act, 1872 further read as under:
"(e) That judicial and official acts have been regularly performed."
Thus in the light of the aforesaid well settled legal position, it needs to be seen as to whether accused persons have been able to raise even some iota of reasonable doubts as to the correctness of the contents of the minutes of 18 th Screening Committee meeting or not. Undoubtedly the accused is not required to establish his claim in this regard conclusively but at the same time mere bald allegations also can not be given much credence if the record proved by the prosecution in this regard does not support any such claim at all.
183. Admittedly there has been no challenge at all during the course of trial that a meeting of 18th Screening Committee meeting did take place on 05.05.2003 and that A-2 Ashok Daga appeared as a representative of applicant company M/s GIL before the Committee. It has also not been challenged that the 18 th Screening Committee CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 166 of 216 did enquire from representative of A-1 M/s GIL in the meeting as to the status of progress made towards establishing the proposed project. Similarly the factum of recording of minutes by MOC officers subsequent to the meeting has also not been challenged. Thus in the light of aforesaid undisputed facts the question of drawing any presumption also does not arise as it stands well established on record that proceedings of 18th Screening Committee were conducted by MOC officers in the routine course of discharge of their official duties and that the minutes of the meeting were also subsequently recorded in the routine course of discharge of their official duties by them.
184. Coming now to the important issue of correctness of the contents of the said minutes as regard "Gondwana Ispat Ltd.", it would be worthwhile to mention that in order to prove the said minutes prosecution examined PW-1 R.S. Negi, the then Office Superintendent, MOC, PW-5 Sh. Deepak Anurag, the then Director, Ministry of Steel, who had attended the 18 th Screening Committee meeting as a representative of Ministry of Steel and PW-7 Sh. Vishwas Sawakhande, Director, Department of Mining and Geology, Government of Maharashtra who also was present in the two Screening Committee meetings held on 05.05.2003 (18 th Screening Committee meeting) and 06.06.2003 (20 th Screening Committee meeting).
185. While PW-1 R.S Negi deposed about approval of said minutes in MOC by Secretary Coal and on the the other hand both PW-5 Deepak Anurag and PW-7 Vishwas Sawakhande specifically CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 167 of 216 deposed about the facts stated by representative of A-1 M/s GIL in the 18th meetig of Screening Committee. However neither in the cross examination of PW-1 R.S. Negi nor in the cross-examination of PW-5 Deepak Anurag as was conducted by Ld. Counsels for the accused persons, any question or suggestion was at all put that the minutes of 18th Screening Committee meeting have not been correctly recorded. In fact PW-5 Deepak Anurag after seeing the record note of discussion of 18th Screening Committee meeting specifically stated in his examination-in-chief that in the said Screening Committee meeting "Gondwana Ispat Ltd." had informed about the status of their proposed project and the steps taken by them in that regard. He further stated that the company informed that MIDC has been approached by them for land and that finances have been tied up with financial institutions and that iron ore has been tied-up from Orissa.
186. Similar facts were deposed to by PW-7 Vishwas Sawakhande also in his examination-in-chief. However in his cross-examination also he was though asked by Ld. Counsel for A-2 Ashok Daga as to whether the minutes of 18th Screening Committee meeting have been correctly recorded or not and to which he claimed his inability to comment anything but apart from the said question put to the witness no other question or suggestion was at all put to him on behalf of the accused persons that the minutes of 18 th Screening Committee meeting have not been correctly recorded.
187. In these circumstances, it is thus clear that the plea now raised subsequently by Ld. Counsels for the accused persons that CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 168 of 216 the minutes of 18th Screening Committee meeting have not been correctly recorded, is clearly an after thought. I thus do not find any reason whatsoever to even presume for the sake of arguments that the minutes of 18th Screening Committee meeting have not been correctly recorded. In other words the accused have clearly failed in substantiating their claim in this regard even for the sake of preponderance of probabilities. They have clearly failed in raising even an iota of doubt much less a reasonable doubt as regard the correctness of the contents of the record notes of 18 th Screening Committee meeting Ex. PW 1/E-15.
188. It is in these circumstances only the submissions of Ld. Counsels for the accused persons that as the minutes of 18 th Screening Committee meeting were received by them after the 20 th Screening Committee in its meeting held on 06.06.2003 had already reserved Majra coal block in their favour so they were of the view that minutes of 18th Screening Committee even though incorrectly recorded have since become irrelevant and were thus not challenged by them, needs to be seen and appreciated. In fact it is the case of A- 2 Ashok Daga himself that subsequent to reservation of Majra coal block by 20th Screening Committee meeting subject to the condition that financial closure be achieved within a period of one year, a number of communications were sent on behalf of A-1 M/s GIL to MOC, Ministry of Power and Department of Mining and Geology, Government of Maharashtra, requesting for waiver of the condition of achieving financial closure. However in none of the said communications as has been relied upon by Ld. Counsels for the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 169 of 216 accused persons any such fact was ever mentioned that the minutes of 18th Screening Committee have not been correctly recorded. The said plea is thus also again a feeble attempt being now made to wriggle out of the said misrepresentations.
189. At this stage, I would also like to deal with yet one other submission of Ld. Counsels for the accused persons that if before 18th Screening Committee, it was stated that finances have already been tied up with financial institutions then there was no reason as to why condition of achieving financial closure would have been put by the 20th Screening Committee in its meeting held on 06.06.2003.
190. In this regard, I may state that the two concepts of "tie-up of finances with financial institutions" and "Achieving financial closure"
are not only two different steps towards making available the finances for any given industrial project but even the Screening Committee has so understood and used the two phrases. In fact in the written submissions filed on behalf of A-2 Ashok Daga, Ld. Counsel has himself referred to the following definition of the term "financial closure" as has been stated in a circular issued by Reserve Bank of India.
"RBI/2009-10/424 UBD.BPD.PCB.Cir.No. 59 /09.14.000/ 2009-10 April 23, 2010 For greenfield projects, financial closure is defined as a legally binding commitment of equity holders and debt financiers to provide or mobilise funding for the project. Such funding must account for a significant part of the project cost which should not be less than 90 per cent of the total project cost securing the construction of the facility."
(Emphasis supplied by me) CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 170 of 216
191. Thus it is clear that the term "Financial Closure" means existence of a legally binding commitment by the financial institutions to the creditors seeking loan/finances for their industrial project. On the other hand though the word "tie-up of finances with financial institutions" has not been defined in any Statute, Rule, Regulation or circular but from the definition of the word "tie-up", it is easily inferable that the same is a step prior to achieving financial closure. The word "tie-up" is defined as a link or connection, especially between commercial companies. The Collins English Dictionary defines "tie- up" as a Noun signifying a business communication or an arrangement between two organizations. The Financial Times/Lexicon defines "tie-up" as "An agreement to become business partners". The synonym of the word "tie-up" as given in Thesaurus are "a link, link up, association, relationship, liaison, deal, bargain, contract, arrangement, business arrangement". Thus in commercial world a "tie-up" is referred to as a link or communication especially one between commercial companies.
192. Accordingly, in the overall facts and circumstances of the case and keeping in view the meaning of the word "tie-up", the same can be easily referred to as issuance of a letter of intent or a letter of comfort by a financial institution to a creditor assuring of supply of finances for the proposed industrial project. Though the said letter of comfort or letter of intent may in the given circumstances and keeping in view the language used may not create a legally binding assurance but it certainly creates a morally binding assurance.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 171 of 216
193. Thus it is clear that the two concepts of "tie up of finances with financial institutions" and "financial closure" are two different stages of a process followed by an industrial enterprise desirous of establishing a large industrial project in order to make finances available for the project. It is common knowledge that whenever large finances are to be obtained by an industrial enterprise from any financial institution then a proposal is first submitted by it to the said financial institution who in turn after examining the proposal give its in-principle consent to associate with the proposed project by way of providing necessary equity. However the said initial expression of interest by the financial institution can not be termed as a legally binding commitment on its part to provide the necessary finances even though such a letter of expression of interest is usually obtained in the commercial world by the industrial houses in order to obtain various other clearances or other benefits from different Government authorities. The said letter of expression of interest, if issued by a financial institution goes a long way in establishing the bonafides of the industrial house towards establishing the proposed project.
However the stage of "financial closure" as already mentioned comes thereafter i.e. when upon completion of all necessary documentary and other formalities as may be required by a financial institution a legally binding agreement/contract is arrived at between the financial institution and the industrial house desirous of obtaining financial assistance from it.
194. Thus at the cost of repetition, it is stated that the stage of "tie CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 172 of 216 up of finances with financial institutions" is a stage prior to the stage of achieving financial closure and are thus two different aspects. In these circumstances, I thus do not find any force in the submissions of Ld. Counsels for the accused persons that if before the 18 th Screening Committee, it was stated that finances have been tied up with financial institutions then the 20 th Screening Committee while reserving Majra coal block would not have put a condition to achieve financial closure within next one year. Since the two concepts pertain to two different stages of making available funds for any given industrial project so it was rather logical for the 20 th Screening Committee meeting to direct that financial closure be achieved within next one year as in the 18 th Screening Committee, it was already represented by the representative of A-1 M/s GIL that finances have been tied up with financial institutions.
195. However in the present matter we are not concerned with any such letter of intent or letter of comfort but only with the issue that before 18th Screening Committee meeting the representative of "Gondwana Ispat Ltd." stated that finances have been tied-up with the financial institutions beside also stating that iron ore has been tied-up from Orissa and that MIDC has been approached for land.
196. In fact it is apparent from the record notes of 18 th Screening Committee as have been reproduced above coupled with the communication dated 10.05.2003 made by A-2 Ashok Daga to Chairman, Screening Committee that in-principle decision to allocate a coal block was taken and duly conveyed to A-2 Ashok Daga in the CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 173 of 216 18th Screening Committee meeting itself. It is thus clear that the 18 th Screening Committee considered the applicant company "Gondwana Ispat Ltd." as having taken substantial steps towards establishing the proposed end use project and thereby believed in the bonafides of the company. Though no final allocation or reservation of a coal block was made in the 18th Screening Committee meeting on account of the fact that "Majra Belgaon" coal blocks were added in the list of captive coal blocks in the said meeting itself and they were thus required to be first put in public domain but in-principle decision to allocate a coal block was certainly taken. It was on account of the said in-principle assurance that the company was asked to take necessary steps for procuring of land etc for setting up their sponge iron project. Accordingly in the letter dated 10.05.2003 Ex. PW 9/D, it was stated by A-2 Ashok Daga as under:
"As desired by your authority we are taking necessary steps for procurement of land etc. for setting up our sponge iron project. "
197. The matter can be viewed now from another angle also. If no such facts were stated before 18th Screening Committee meeting by the representative of A-1 M/s GIL then keeping in view the fact that status of progress made by the company towards establishing its proposed project was asked by the Committee so the onus shifts upon A-2 Ashok Daga only who was present before the 18 th Screening Committee meeting on behalf of A-1 M/s GIL as to what facts were stated by him in this regard to the Committee. What steps were stated to have been taken till then by the company towards establishing the proposed end use project. Had no such steps would CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 174 of 216 have been spelled out then there was no reason for 18 th Screening Committee meeting to even agree in-principle to allot a block in favour of A-1 M/s GIL. The said decision to allot a block in principle as is stated in his own communication by A-2 Ashok Daga dated 10.05.2003 Ex. PW 9/D could have been taken by 18 th Screening Committee meeting only when some substantial steps towards setting up the proposed end use project were found to have been taken by the company. There is thus no reason to even presume for the sake of arguments that even in the absence of any steps having been taken by "Gondwana Ispat Ltd." towards setting up the proposed end use project, the 18 th Screening Committee would have still proceeded ahead to convey to the representative of "Gondwana Ispat Ltd." that decision to allocate a coal block to them has been taken in-principal. Similarly there would have been no reason for the 18th Screening Committee to advise the representative of A-1 M/s GIL to take necessary steps for procurement of land etc. for setting up their sponge iron project. It is in the light of the aforesaid circumstances only the proceedings of 20 th Screening Committee meeting rather needs to be seen and appreciated. In the said meeting held on 06.06.2003 after deciding to reserve Majra coal block in favour of A-1 M/s GIL, the Screening Committee laid down a condition that financial clsoure should be achieved within a period of one year from the date of allocation. In the said meeting held on 06.06.2003, it was stated by A-2 Ashok Daga who appeared as a representative of "Gondwana Ispat Ltd." that MIDC has been approached for land and they have given consent for 20 acres. It was reiterated that iron ore will be sourced from Orissa. Thus if the said CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 175 of 216 submissions made before 20th Screening Committee are read in continuation with the submissions made before 18 th Screening Committee meeting then it is found that the 20 th Screening Committee while believing as true the earlier submissions of representative of A- 1 M/s GIL made before the 18 th Screening Committee meeting that finances have been tied up with financial institutions and iron ore has been tied up from Orissa not only offered reservation of a coal block and temporary linkage from Western Coalfields Ltd. but also put a condition that financial closure should be achieved within a period of one year.
198. Similarly as regard the issue of land also the representative of A-1 M/s GIL stated before the 18 th Screening Committee meeting that MIDC has been approached for land. Thereafter in the 20 th Screening Committee meeting, it was stated by the representative of the company that they have approached MIDC for land and who have given consent for 20 acres of land. As earlier also mentioned, in his communication dated 10.05.2003 Ex. PW 9/D made to Secretary Coal, A-2 Ashok Daga had informed that as advised by MOC they have approached MIDC for allotment of land. However when during the course of investigation enquiry was made from MIDC by IO Insp. Rajbir Singh then it was found that though A-2 Ashok Daga had written to MIDC for making available 10-20 acres of land for the proposed sponge iron project then MIDC conveyed in response that while the land is available but the company is required to submit necessary documents alongwith processing fees so that the request for allotment of land may be considered. It was however found that no CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 176 of 216 steps were at all taken either by A-2 Ashok Daga or by A-1 M/s GIL in this regard. It is in fact the stand of the accused persons themselves, during the course of trial that no such documents were submitted to MIDC or in other words no further steps were taken by them for seeking land from MIDC. The accused persons have however offered an explanation in this regard stating that no such steps were taken as no suitable land was available with MIDC, since the land in Warora Industrial area was already encroached upon and there was scarcity of water. However, without going into the correctness or otherwise of the said claim of the accused persons for which they allegedly did not undertake any further steps for obtaining allotment of land from MIDC, the fact remains that before 20 th Screening Committee meeting, it was stated by representative of A-1 M/s GIL that MIDC has been approached for land and they have given consent for 20 acres. This statement is however per-se wrong as it was well within the knowledge of A-2 Ashok Daga who was representing A-1 M/s GIL before 20th Screening Committee that no such consent has been given by MIDC till than. The said communication of MIDC merely stating that land is available and the company is required to submit necessary documents and processing fee so that its request may be considered can in no way be stated as a consent given by MIDC to "Gondwana Ispat Ltd." for allocation of 20 acres of land. Prosecution in this regard examined PW-10 Gopal Sonsare, Assistant Area Manager, MIDC who in his deposition clearly stated that till date "Gondwana Ispat Ltd." has not deposited any documents which were asked from them towards allotment of land and they have also not deposited any money with MIDC and accordingly till date no land has CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 177 of 216 been allotted to "Gondwana Ispat Ltd." by MIDC, Nagpur. However in his cross-examination as was conducted by Ld. Counsels for the accused persons I have been unable to find any circumstance which could lead me to either disbelieve his deposition or to even presume for the sake of preponderance of probabilities that MIDC had given any consent for any piece of land to "Gondwana Ispat Ltd." much less for 20 acres of land. During the course of arguments, it was sought to be stressed upon that as land was stated to be available by MIDC and the company was only asked to fulfill certain documentary requirements so it is clear that MIDC was willing to allot the said land. In this regard, I may however mention that in the earlier part of my judgment I have pointed out that while proposing to establish a sponge iron project of capacity 1.20 lacs MTPA, land was still sought from MIDC for a project of 60,000 MTPA only. Though in the year 2003 fresh communications were made to MIDC stating that the proposed project is being established of a capacity 1.20 MTPA and the land as was being asked for from MIDC was 10-20 acres. In these circumstances, it is thus highly unbelievable that when the request being made was still vague in as much as, request was being made for allocation of 10-20 acres of land, so even if MIDC stated that land is available with them and the applicant company may fulfill all documentary requirement alongwith deposit of necessary fees so that their request may be considered then also by what logic or reason such a communication from MIDC can be considered as consent given by them for 20 acres. As already stated the applicant company itself was not yet sure as to whether it was asking for 10 or 20 acres of land or allotment of how much land it actually desires.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 178 of 216
199. Similarly if the submissions of representative of A-1 "Gondwana Ispat Ltd." before the 18th Screening Committee meeting and 20th Screening Committee meeting are considered with respect to supply of iron ore from Orissa then it is found that while before 18 th Screening Committee meeting, it was stated on behalf of A-1 M/s GIL that "Iron ore has been tied up from Orissa" and subsequently before 20th Screening Committee meeting, it was stated that "Iron ore will be sourced from Orissa". Thus if the aforesaid two facts stated in the two Screening Committee meeting are read in conjunction and coupled with the fact that the request for allotment of a captive coal block made by "Gondwana Ispat Ltd." was being considered by the Screening Committee, MOC in continuity from 18 th to 20th Screening Committee meeting then while the first statement made before 18 th Screening Committee meeting i.e. "iron ore has been tied up from Orissa" clearly conveys that necessary arrangements have been made for supply of iron ore. Once again the use of word "tie-up" qua supply of iron ore again signifies that some arrangement like in the nature of letter of intent or letter of comfort have been made with certain suppliers of iron ore from Orissa. Similarly the statement made before 20th Screening Committee meeting that "Iron ore will be sourced from Orissa" clearly signifies a reiteration of the earlier stand taken on behalf of A-1 M/s GIL before 18 th Screening Committee meeting. However the stand now taken by the accused persons during the course of investigation or trial that only talks were held with certain iron ore suppliers and who in-turn had told them that as and when they will raise a requirement, the iron ore will be supplied to them again appears to be a vague and futile attempt to wriggle out CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 179 of 216 from the earlier false statements made before the two Screening Committee meetings. In support of this fact DW-1 Mahesh D. Gupta was also examined by A-2 Ashok Daga. DW-1 Mahesh D. Gupta deposed that in the year 2001 or so A-2 Ashok Daga and his brother Govind Das Daga had approached him stating that they are intending to establish a sponge iron project and for which they will be requiring 10,000-15,000 MT of iron ore per month and upon which he told them that the said quantity of iron ore can be supplied by him. DW-1 however further stated that A-2 Ashok Daga and Govind Das Daga wanted to bind him on the rates at which iron ore shall be supplied but he told them that as and when the requirement of iron ore will be raised then the same will be supplied at the prevailing market price.
200. Though DW-1 Mahesh D. Gupta upon being cross-examined by Ld. Sr. P.P. failed to produce any documentary proof to show that he was indeed involved in the trading of iron ore much less from Orissa but still, I may state that from his deposition which merely mentions about oral talks between him and A-2 Ashok Daga and his brother Govind Dass Daga, it can not be stated that there was any tie up of supply of iron ore between him and A-1 M/s GIL, as was claimed by A-2 Ashok Daga, the representative of A-1 M/s GIL before the 18th Screening Committee.
201. Another important issue raised by Ld. Counsels for the accused persons was that admittedly the temporary coal linkage allotted in favour of Gondwana Ispat Limited from WCL by 20 th Screening Committee was not made available to the company as CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 180 of 216 WCL had expressed its inability to provide any such coal linkage from its existing resources. Similarly, it was submitted that as regard reservation of Majra Coal Block provided to Gondwana Ispat Limited by 20th Screening Committee, the same also proved to be of no use as none of the financial institutions agreed to act merely on the basis of reservation of a coal block. It was thus submitted that in these circumstances neither mere reservation of a coal block nor offering of temporary coal linkage can be termed as "Property" within the meaning of Section 420 IPC.
202. However, in the overall facts and circumstances of the case, I may state that the aforesaid submissions of Ld. Counsels for the accused persons is not at all tenable. In fact it was on account of reservation of a coal block made available to "Gondwana Ispat Limited" by 20th Screening Committee that the company "Gondwana Ispat Limited" was able to undertake various correspondence with Ministry of Coal, Ministry of Steel, Government of Maharashtra and also with CMPDIL. Finally, on the representations made by the company "Gondwana Ispat Limited" the Ministry of Coal agreed to not insist for achieving financial closure and thereby the said reservation of coal block got converted into allocation of coal block. Finally a mining lease was also executed in favour of the company by the Sate Government of Maharashtra, in favour of company "Gondwana Ispat Limited". At this stage it would be also worthwhile to mention that during the course of 20th Screening Committee meeting itself the representative of company "Gondwana Ispat Limited" was explained by the 20th Screening Committee that initially reservation of a coal CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 181 of 216 block is being offered subject to the condition that financial closure shall be achieved within a period of one year and in the meantime temporary coal linkage is also being provided from WCL. It is further recorded in the minutes of 20th Screening Committee meeting held on 06.06.2003 that the representative of A-1, Gondwana Ispat Limited was also explained the concept of reservation of a coal block subject to certain conditions as above and also that upon achieving financial closure the said reservation would lead to allocation of the coal block. In fact it is the case of accused persons themselves that armed with the said reservation letter they interacted with different authorities such as with M.I.D.C. for allotment of land or with financial institutions for achieving financial closure etc. It is certainly altogether a different matter that company "Gondwana Ispat Limited" as per its claim could not succeed in either obtaining any land or achieving financial closure or in even obtaining temporary coal linkage from Western Coalfields Ltd. However what is to be seen is that A-2 Ashok Daga as a representative of A-1 M/s GIL upon being explained about the concept of reservation of a coal block agreed to accept the same with the condition that financial closure shall be achieved within a period of one year and he also accepted temporary coal linkage from Western Coalfields Ltd. Thus it cannot be stated that a thing which at the time of delivery was of immense value in the hands of accused ceases to have the status of "property" within the meaning of Section 420 IPC simply because for certain subsequent developments the said thing (property) could not be put to any use. In fact the important ingredient of the offence of cheating i.e. u/s 420 IPC stood proved as soon as the letter of reservation and letter providing temporary coal CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 182 of 216 linkage was issued in favour of A-1 M/s GIL by MOC. In fact after issuance of letter of reservation, the Screening Committee, MOC could not have even considered the said "Majra" coal block for allocation in favour of any other company.
203. Moreover, it is the case of A-2 Ashok Daga himself that after some time certain disputes arose between him and the other co- promoter i.e. Sh. Govind Dass Daga and finally as the proposed project could not take off so he agreed to transfer his equity to Sarda Group. However after certain other developments the said equity finally stood transferred in favour of M/s Oriental Iron Casting Ltd. for a total consideration of 1.55 crores. A-2 Ashok Daga has however called the said sale consideration as "Sweat Money" i.e. the money towards efforts made by him in formation of A-1 M/s GIL and in setting up its business including obtaining allocation of a coal block. The fact thus remains that all these developments could take place only because A-1 M/s GIL was initially provided with reservation of a coal block by 20th Screening Committee. [In fact my subsequent discussion would show that it was on account of raising one or the other unnecessary issues raised by A-2 Ashok Daga on behalf of A-1 M/s GIL that no progress was made in establishing the end use project or in developing the coal mine.]
204. Thus keeping in view the earlier discussion under taken by me under other head of charges as regard the meaning of "property" within the four corners of the offence of cheating, I am of the considered opinion that letter of reservation so issued by Ministry of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 183 of 216 Coal pursuant to recommendation of 20th Screening Committee meeting held on 06.06.2003 and also temporary coal linkage so awarded by it to A-1 M/s GIL clearly amounted to property within the meaning of Section 420 IPC.
205. From my aforesaid discussion it thus clearly stands proved that A-2 Ashok Daga who appeared before both 18 th Screening Committee meeting held on 05.05.2003 and 20 th Screening Committee meeting held on 06.06.2003 as a representative of A-1 M/s GIL had intentionally stated false facts while knowing them to be not true, as regard tie up qua finances with financial institutions or as regard tie up qua iron ore from Orissa or as regard grant of consent of 20 acres of land by M.I.D.C. and believing all such representations qua steps taken towards progress made by Gondwana Ispat Limited in establishing its proposed end use project to be true, the 18 th Screening Committee in-principle decided to allocate a coal block to Gondwana Ispat Limited and thereafter the 20 th Screening Committee in its meeting held on 06.06.2003 finally decided to reserve Majra Coal Block in favour of Gondwana Ispat Limited subject to its achieving financial closure within a period of one year and also simultaneously offered temporary coal linkage from WCL.
206. At this stage it would be also worthwhile to mention though at the cost of repitition that admittedly temporary coal linkage was also of value in the hands of applicant company as in the absence of any such orders the coal which is a valuable raw material for any industry be it involved in production of Iron and Steel or generation of power CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 184 of 216 or in production of cement could not have been obtained by "Gondwana Ispat Limited" from any Government coal producing company. It is altogether a different matter that subsequently WCL when approached in this regard by Gondwana Ispat Limited expressed its inability to provide any such temporary coal linkage on account of limited resources available with it.
Thus as earlier also stated, for the offence of cheating, it is completely immaterial as to what use any property which was obtained by accused by inducing any person to deliver any such property on the basis of deception played by accused was put or could have been put to. What is important is that at the time of commission of offence of cheating the property so delivered had value in the hands of person obtaining the said property by deception.
207. Taking an analogy from Abhyanand Mishra case (Supra), an admission ticket issued to a candidate to appear in an examination may have value only till the time the said examination is being held and after the said examination is over the said admission ticket may cease to have any value. Thus, it cannot be argued that if after the time when admission ticket was obtained by way of cheating the accused for any reason failed to appear in the said examination then the said examination ticket ceases to have any value in the eyes of law or in other words cannot be termed as "property" within the meaning of Section 420 IPC i.e. for the offence of cheating as the offence stood committed as soon as University was induced to issue admission ticket on the basis of deception made by the accused and CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 185 of 216 the University acted on such false representation believing it to be true.
208. Thus keeping in view my aforesaid discussion and the overall facts and circumstances of the case coupled with the fact that proceedings of 18th and 20th Screening Committee meetings are to read as part of a series of acts, so I am of the considered opinion that reservation of Majra coal block in favour of A-1 M/s GIL was a result of deception made on behalf of the company A-1 M/s GIL by its director i.e. A-2 Ashok Daga initially in the 18th Screening Committee meeting held on 05.05.2003 and subsequently in the 20 th Screening Committee meeting held on 06.06.2003 by way of false claims as regard the status of progress made by the company A-1 M/s GIL towards establishing the proposed end use project and the Screening Committee so acted while believing the said false claims to be true.
209. Thus, as the delivery of property i.e. letter of reservation qua Majra Coal Block and temporary coal linkage from WCL was a cumulative effect of deception played by accused persons in the 18 th Screening Committee meeting followed by that made in 20 th Screening Committee meeting so in these circumstances, instead of holding the accused persons separately liable for the offence of cheating for false claims made before each of the two Screening Committee meetings, they are liable to be held guilty of the offence of cheating i.e. u/s 420 IPC cumulatively under the two head of charges by treating them as a single offence.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 186 of 216 I accordingly hold A-1 M/s GIL and A-2 Ashok Daga guilty of the offence of cheating i.e. u/s 420 IPC for the two head of charges as are under discussion jointly and accordingly convict them thereunder.
CHARGE-III "That during the period between 2000 to 2011 at Maharashtra, Delhi and other places, both of you entered into a criminal conspiracy, the object of which was to cheat Ministry of Coal, Ministry of Steel, Government of India and Govt. of Maharashtra and thereby procure allocation of "Majra Coal Block" situated in Chanderpur District of Maharashtra in favour of M/s Gondwana Ispat Ltd. by making false submissions and by falsely showing M/s Gondwana Ispat as a registered limited company and by making false representation about financial preparedness and tie up of supply of Iron Ore from Orissa to gain undue financial gain and thereby both of you committed the offence of criminal conspiracy being punishable u/s 120-B IPC and within my cognizance.
Secondly, during the aforesaid period and in furtherance of the aforesaid common object of the criminal conspiracy as described above, both of you did various acts of cheating as menitioned in the separate charges framed against you Ashok Daga and M/s Gondwana Ispat Ltd. and thereby committed the offence punishable u/s 120-B r/w 420 IPC and within my cognizance."
210. It has been argued by prosecution that undisputedly, A-1 M/s GIL was a separate and distinct legal entity, different from its officers/directors. It was also submitted that from a catena of CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 187 of 216 judgments of Hon'ble Supreme Court, it has been now well established that a company even though having only a juristic personality can be held liable for offences involving mensrea and also for such offences where imprisonment in addition to fine has been mandatorily provided by the Legislature. It was thus further submitted that A-2 Ashok Daga who admittedly was one of the Director of A-1 M/s GIL was in fact controlling the affairs of the closely held family company and thus in conspiracy with the said company he cheated 18th and 20th Screening Committee MOC so as to procure allocation of a captive coal block in favour of "Gondwana Ispat Ltd.". The existence of conspiracy between A-1 M/s GIL and A-2 Ashok Daga was thus stated to be writ large on the face of record. It was also submitted that prosecution has also been able to prove that the various acts of deception committed by A-2 Ashok Daga before 18 th and 20th Screening Committee meeting so as to procure allocation of a captive coal block were acts done in furtherance of the common object of a criminal conspiracy. The prosecution was thus stated to have been successful in proving existence of a conspiracy between the two accused.
211. On the other hand, it was vehemently argued by Ld. Counsels for the accused persons that though it is not disputed that a company having a juristic personality can be prosecuted for an offence involving mens rea and also for an offence which prescribes mandatory term of imprisonment but it was submitted that prosecution has miserably failed in proving that there was any meeting of mind or prior agreement between any two persons which CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 188 of 216 was a sine qua non for the existence of the offence of criminal conspiracy. It was submitted that admittedly for a criminal conspiracy, existence of two persons is required who may enter into an agreement to do an illegal act or a legal act by illegal means so as to constitute a criminal conspiracy. It was submitted that even though A-1 M/s GIL was having a juristic personality but in order to carry out its function it acted through its director A-2 Ashok Daga as per the prosecution case itself. It was thus submitted that as per the prosecution case the various acts stated to have been committed by A-2 Ashok Daga could not have acquired two dimensions in as much as they were committed by him as a natural person and also as an alter ego of A-1 M/s GIL. It was thus submitted that prosecution is trying to attribute two personalities or two minds to a single mind in order to establish the charge of conspiracy. It was also submitted that prosecution has not alleged that A-1 M/s GIL was acting through some other person qua its various actions and all the actions on its behalf are stated to have been undertaken by A-2 Ashok Daga only. It was thus submitted that in the absence of any allegation of the prosecution suggesting the presence and participation of another guilty mind, the offence of criminal conspiracy can not be said to have been made out. It was also submitted that as per the charge framed against the accused persons the period and place of conspiracy is stated as being from 2000-2011 at Maharashtra, Delhi and other places but it was submitted that when admittedly A-1 M/s GIL came into existence on 05.10.2001 so there could not have been any conspiracy entered into by the company prior to its incorporation. It was thus submitted that prosecution has miserably failed in proving CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 189 of 216 existence of any criminal conspiracy between the two accused persons much less commission of any act having been undertaken in furtherance of the common object of any such criminal conspiracy.
MY DISCUSSION AND CONCLUSION
212. Before adverting further, it would be pertinent to mention as to what all ingredients are required to be proved by the prosecution in order to bring home the charge of criminal conspiracy.
Ingredients of the offence of criminal conspiracy are:
"1.) That there should be an agreement between the persons who are alleged to conspire; and
2.) That the agreement should be: (i) For doing of an illegal act, or (ii) Doing by illegal means an act which may not itself be illegal."
213. At this stage, it would be also worthwhile to reproduce the broad principles governing law of conspiracy as were summarised by Hon'ble Supreme Court in the well known case "State through Superintendent of Police, CBI/SIT Vs. Nalini", 1999 (5) SCC 235. The said observations read 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, CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 190 of 216 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 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 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 191 of 216 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 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, CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 192 of 216 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 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."
214. 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 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 193 of 216 (4) SCC 659; Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC 596:
"―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."
215. Thus as already stated the legal position that a company though having juristic personality can be prosecuted and convicted for an offence involving mensrea and also for an offence involving a mandatory term of imprisonment in addition to fine is well settled. Reference in this regard can be made to the now well known case of Sunil Bharti Mittal Vs. Central Bureau of Investigation, (2015) 4 SCC 609, wherein the Hon'ble Supreme Court while extensively referring to the development of law with respect to liability of a corporation as developed in India and in other foreign jurisdictions reiterated the principle that a company can certainly be held liable for an offence involving mensrea and can even be held guilty of offences which provides mandatory term of imprisonment as a punishment in addition to imposition of fine. It was held that in such cases the company may be subjected to fine only as the other punishment prescribed i.e. of imprisonment is impossible to execute. However as CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 194 of 216 regard the liability of a company for offences involving mensrea there may be certain exceptions such as those offences where the personal malice of the person committing an act is an essential ingredient of the offence such as murder, robbery, rape etc. In those cases a company may not be held vicariously liable. However without going into any further length of the matter as to the situation where a company can be held liable for the offences involving mensrea, it will be suffice to state that a company can certainly be prosecuted and held liable for an offence of criminal conspiracy or for offences committed in pursuance to the common object of any such criminal conspiracy such as the offence of cheating, provided the facts and circumstances of the given case warrants such conclusion.
Reference in this regard may be had to the case "Iridium India Telecom Limited Vs. Motorola Corporation and Others. (Supra).
216. Thus in the light of the aforesaid well settled position of law, the only question which is now left to be examined in the present matter is whether such a charge of criminal conspiracy holds ground in the facts and circumstances of the present case or not. Though it has been argued by Ld. Counsels for the accused persons that if there is only one director of the company controlling all the actions on behalf of the company i.e. when the controlling mind of the company is a sole director and through him only all the actions of the company are undertaken then in such a situation can the sole director be held to have conspired with company so as to constitute an CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 195 of 216 offence of criminal conspiracy.
217. However before adverting to the said issue of existence of criminal conspiracy between A-1 M/s GIL and A-2 Ashok Daga, I may also mention that though the charge of criminal conspiracy as framed in the present matter states that the said criminal conspiracy was hatched during the period 2000-2011 but now at the end of trial, I may state that in view of the discussion made earlier qua various head of charges framed against A-2 Ashok Daga all the acts undertaken by him may not be stated to have been undertaken in furtherance of the common object of a criminal conspiracy hatched between A-1 M/s GIL and A-2 Ashok Daga. The act of submission of application dated 22.04.2000 by A-2 Ashok Daga for allocation of "Ekarjuna Extension" coal block or the submission of applications dated 25.09.2001 to MOC or to Ministry of Steel for allocation of "Warora Coal Block" and also the act of submission of application dated 01.10.2001 to Department of Mining and Geology, Government of Maharashtra, at the instance of A-2 Ashok Daga may not be stated to have been undertaken by A-2 Ashok Daga in furtherance of any criminal conspiracy, for A-1 M/s GIL was not even in existence on that day i.e. till before 05.10.2001. However subsequent thereto when A-1 M/s GIL got incorporated on 05.10.2001 then it is the claim of the accused persons themselves that all such acts of A-2 Ashok Daga were ratified by the company. Thus in these circumstances, the accused persons can not now blow both hot and cold stating that the said acts undertaken by A-2 Ashok Daga can not be attributed to A-1 M/s GIL. Thus the criminal conspiracy can be stated to have come CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 196 of 216 into existence only from the date of incorporation of M/s GIL i.e. from 05.10.2001 only and not before.
However, the important issue raised by Ld. Counsels for the accused persons as to whether A-2 Ashok Daga who was the sole controlling mind of the company can still be held liable for having hatched a criminal conspiracy with the company, needs to be still looked into.
218. In this regard, it will be however pertinent to mention that as per the record of ROC relating to A-1 M/s GIL, A-2 Ashok Daga was not the sole director of the company. In fact A-2 Ashok Daga has also taken a stand that the company was jointly promoted by him and his brother Govind Das Daga. It is also an undisputed fact that A-2 Ashok Daga alongwith his wife Madhuri Daga and daughter Priya Daga were all directors of A-1 M/s GIL from 25.03.2002 and was controlling 50% equity of the company. In fact as per the memorandum of association the company A-1 M/s GIL was initially formed by seven (7) persons i.e. Vijay V. Kusrey, Y.M. Salve, Rajesh Tandekar and Balu Bageshwar beside three (3) juristic persons i.e. M/s Tanerine Finvest Pvt. Ltd., M/s Auric Gem & Jewellery Pvt. Ltd. and M/s Caspack Finvest (India) Pvt. Ltd.
Moreover, it has also come on record that A-2 Ashok Daga and his wife Madhuri Daga were directors of M/s Caspack Finvest (India) Pvt. Ltd. from 11.02.1994. Similarly in M/s Auric Gem & Jewellary Pvt. Ltd. also A-2 Ashok S. Daga and his wife Madhuri Ashok Daga were directors since 25.01.1995. However when on CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 197 of 216 25.03.2002 A-2 Ashok Daga and his wife Madhuri Daga and his daughter Priya Daga became directors of A-1 M/s GIL then at that time the earlier directors resigned from the board of directors.
219. Thus from the aforesaid circumstances it is clear that A-2 Ashok Daga himself and his wife Madhuri Daga were primarily controlling the affairs of A-1 M/s GIL from the time of its incorporation but from 25.03.2002 he alongwith his wife Mrs. Madhuri Ashok Daga and daughter Ms. Neha Ashok Daga alone formed the board of directors of M/s GIL. Accordingly vide board resolution dated 25.03.2002 passed by the board of directors of A-1 M/s GIL, both A-2 Ashok S. Daga and Mrs. Madhuri A. Daga; I.e the two directors of the company A-1 M/s GIL were authorised to act on behalf of the company.
220. Thus the claim of Ld. Counsels for the accused persons that A-1 M/s GIL could not have conspired with A-2 Ashok Daga on the ground that one single mind undertaking any action can not be attributed two separate personalities i.e. a natural personality and a legal personality, thus per se does not hold ground. As per the claim of A-2 Ashok Daga himself there was one co-promoter of A-1 M/s GIL namely Govind Dass Daga. Similarly there were other directors also of A-1 M/s GIL at different point of times. Moreover A-2 Ashok Daga and his family members were holding only 50% equity in A-1 M/s GIL and thus A-2 Ashok Daga may be one of the person taking active interest in the affairs of A-1 M/s GIL but it will be completely fallacious to state that the two separate personalities i.e. A-1 M/s GIL and A-2 CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 198 of 216 Ashok Daga got merged into one or that one single mind is sought to be ascribed the role of two minds. The misrepresentations made by A-2 Ashok Daga before 18th and 20th Screening Committee were certainly on behalf of A-1 M/s GIL. The company subsequently by undertaking one issue or the other with respect to reservation of "Majra" coal block, with Government authorities such as waiver of the condition of achieving financial closure before final allocation of coal blocks, can not now claim that it did not at any point of time agreed with the actions of A-2 Ashok Daga in procuring allocation of a captive coal block from Screening Committee, MOC. At the same time from the facts that A-2 Ashok Daga clearly knew that the various representations being made by him on behalf of A-1 M/s GIL before 18th and 20th Screening Committees with respect to status of progress made by the company towards establishing the proposed end use project, were false, his active agreement in all such actions with A-1 M/s GIL is writ large on the face of record. The agreement constituting the offence of criminal conspiracy between A-1 M/s GIL and A-2 Ashok Daga is thus apparent on the face of record.
221. It is well settled that evidence qua the offence of criminal conspiracy is undoubtedly hard to come up but the same is to be ascertained from the overall facts and circumstances of a given case. Thus if all the acts as were undertaken by A-2 Ashok Daga as a representative of A-1 M/s GIL before the Screening Committee as have been discussed in detail above are considered then it is found that there was a clear agreement in existence between A-1 M/s GIL and A-2 Ashok Daga with the sole object of procuring allocation of a CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 199 of 216 captive coal block in favour of "Gondwana Ispat Ltd." even by making false representations and thereby concealing true and correct facts as regard the progress made by A-1 M/s GIL towards establishing the project and thus inducing Screening Committee, MOC to allot a coal block in favour of A-1 M/s GIL. As already discussed, during the course of 20th Screening Committee meeting when the concept of reservation of a coal block in favour of the company with the condition of achieving financial closure within one year was explained and temporary coal linkage from WCL was also offered then A-2 Ashok Daga who was present in the meeting as a representative of A-1 M/s GIL immediately accepted the same. Subsequently continuous efforts were made to get the condition of achieving financial closure within one year were made and when finally MOC agreed to waive the said condition then the said reservation of "Majra" coal block got converted into allocation of the said coal block in favour of A-1 M/s GIL, Thus the object of criminal conspiracy so hatched was finally achieved.
222. Thus in view of my aforesaid discussion, it is clear that a criminal conspiracy was indeed hatched by A-1 M/s GIL and A-2 Ashok Daga so as to procure allocation of a captive coal block from MOC, Government of India. The various misrepresentations made by A-2 Ashok Daga as a representative of A-1 M/s GIL before 18th and 20th Screening Committee as discussed above were also made in furtherance of the common object of the said criminal conspiracy. I have also already concluded that the said acts of misrepresentations made by A-2 Ashok Daga as a representative of A-1 M/s GIL before 18th and 20th Screening Committee constituted deception and CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 200 of 216 believing all such deceptions to be true Screening Committee, MOC was induced to reserve "Majra" coal block in favour of A-1 M/s GIL and it also offered temporary coal linkage to the company.
Thus the prosecution, in my considered opinion has been clearly successful in proving the offence of criminal conspiracy i.e. u/s 120-B/420 IPC against both the accused persons i.e. A-1 M/s GIL and A-2 Ashok Daga and I accordingly hold them guilty for the said offence and accordingly convict them thereunder.
CHARGE-I "Fifthly, during the period between 2005 to 2011 you Ashok Daga despite an undertaking/affidavit to Ministry of Coal, did not develop the coal mine and also did not set up the End Use Plant and sold your entire shareholding in Gondwana Ispat Ltd. and thereby obtained undue financial gain of Rs. 1.55 crores over the nationalized natural resources of the country and thereby cheated Govt. of India and thus you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
223. It is the case of prosecution that despite having obtained allocation of "Majra" coal block, A-2 Ashok Daga neither established the proposed end use project nor developed the impugned "Majra" coal block so allocated to A-1 M/s GIL. It was pointed out that since A-2 Ashok Daga had no intention from beginning itself of establishing or developing the coal mine so he finally sold the 50% equity held by CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 201 of 216 him and his family members in M/s GIL to Sarda Group and who further transferred the same to another company i.e. M/s Oriental Iron Casting Ltd. (OICL). It was also submitted that in lieu of transfer of his equity A-2 Ashok Daga and his family members received a sum of Rs. 1.55 crores and which amount was clearly an undue profit earned by him by way of sale of nationalized natural resources of the country. It was thus submitted that A-2 Ashok Daga had thus procured allocation of said coal block from MOC after having induced Screening Committee, MOC to initially reserve the said coal block in favour of M/s GIL and subsequently to convert it into allocation on the basis of deception played by him. The offence of cheating was thus stated to have been made out against A-2 Ashok Daga.
224. On the other hand it was vehemently argued by Ld. Counsel for A-2 Ashok Daga that there was no bar put by MOC upon transfer of equity in the allocatee company. It was submitted that it has been well established during the course of trial of the present case that A-2 Ashok Daga had to sell his equity in A-1 M/s GIL on account of differences with his brother Govind Das Daga who was a co-promoter of A-1 M/s GIL. It was also submitted that A-2 Ashok Daga always had the intention to not only establish the proposed end use project but to also develop the coal mine but on account of apathy shown by various Government departments necessary action could not be undertaken by him. It was further submitted that it has also been proved on record by the accused from the evidence led by prosecution itself that even the boundaries of "Majra" coal block was not clearly defined by CMPDIL on account of which even the GR CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 202 of 216 charges could not be either estimated or deposited for a period of about one year. It was also submitted that as initially only reservation of a coal block was accorded in favour of A-1 M/s GIL so none of the financial institutions agreed to deal with A-1 M/s GIL so as to achieve financial closure merely on the basis of reservation of a coal block and they all insisted for allocation of a coal block from MOC. It was submitted that A-1 M/s GIL had accordingly undertaken various communications with Ministry of Steel, Department of Mining and Geology, Government of Maharashtra, and MOC so as to request them to waive the condition of achieving financial closure. It was also submitted that various clearances such as environment clearance etc were delayed from different Government departments on account of which neither the coal mine could be developed nor the proposed end use project could be established. As regard the dispute with Govind Dass Daga and Sarda Group, it was submitted by Ld. Counsel for A-2 Ashok Daga that a writ petition was also filed by A-2 Ashok Daga before Hon'ble High Court raising various such issues. As regard receiving of Rs. 1.55 cores towards sale of equity, it was submitted that the same was on account of sweat money i.e. towards efforts put by A-2 Ashok Daga in the formation of A-1 M/s GIL and towards making efforts for establishing the business of the company. No charge for the offence u/s 420 IPC was stated to have been thus made out in the given facts and circumstances as it was submitted that even the basic ingredients of the offence of cheating were not proved by the prosecution.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 203 of 216 MY DISCUSSION AND CONCLUSION
225. Before adverting on to any discussion qua the ingredients of the offence u/s 420 IPC, I may mention that though during the course of trial a constant effort has been made by A-2 Ashok Daga to show that, as the boundaries of "Majra" coal block were not clearly defined by CMPDIL so the necessary GR charge could not be deposited by A-1 M/s GIL with CMPDIL initially for a period of about two years. It was also sought to be impressed upon that the development of coal mine could not take place as per the milestone chart earlier submitted to MOC on account of the lackadaisical attitude of various Government departments. However in this regard it would be instructive to refer to certain notings in the file of MOC i.e. D-4 Ex. PW 1/B (Colly) recorded by various officers of MOC during the said period of time.
Note sheet pages 25, 26 and 27 from MOC file Ex. PW 1/B (Colly) (D-4).
"Shri Ashok Daga of M/s Gondwana Ispat Limited met JS (Coal) and Director (CA) on 4.10.2005. This meeting was granted on directions of Secretary (Coal) whom Shri Ashok Daga met earlier. Mr. Daga reiterated his request for alteration of the block boundary of captive block of Majra allocated to him. The grounds put forward by him were that:
2. Coal deposits are at a depth of 200 meter and more. The surface has geographical features like factory and habitation. Such deep mining is not possible especially under habitated area where stand stowing is required and since sand is not available, this portion of Majra is to be deleted.
3. He stated that he has been requesting for alteration in block boundary accordingly and in the absence of this being done he is not in a position to pay the charges and buy the GR and proceed further in the matter.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 204 of 216
4. It was explained to him that GR has got very little to do with which area he wishes to take up for mining out of the totally allocated mine and which area he finds undesirable for mining. These details would come out in the mining plan. However, the GR for the entire block would need to be purchased because this cannot be apportioned to any other captive block and therefore he has no reason not to have bought the GR earlier.
5. This matter was referred to CMPDIL on his request in the year 2004 also and CMPDIL had very categorically stated that the coal below 200 meters is being mined in WCL and it is technically possible to mine this coal. Therefore, the contention of the applicant is not borne out from the facts on record. Shri Ashok Daga was very much aware of this response of CMPDIL and had also mentioned this response in \his letter written in July 2004 to the Ministry. The issue of alteration of block boundary, it was explained, is unnecessarily being raised.
6. Shri Daga then stated that the GR rates had gone up and he is being asked to pay the increased rates. It was explained to him that if he continues to not buy the GR in time, there would be periodical revision in the rate of drilling meterage and accordingly the price of the GR would keep on increasing. The failure to buy GR in time has entirely been on account of M/s Gondwana Ispat Limited and therefore he should not expect the Government to make any concession.
7. He stated that DGM has also done some exploration in the area. It was clarified to him that the block has been allocated to him by the Screening Committee. The block boundary has been given by CMPDIL/WCL. He should make payment to WCL/CMPDIL and in case DGM have any claim that also should be met. In case it is found that there is any overlap the same amount can always be refunded. He was also reminded that recently in September, 2005 he had written a letter to WCL/CMPDIL marking a copy to this Ministry promising that he would buy the GR by 30th September and it is found that he has failed to do so. In case he continues in this manner, the Ministry will be left with no option but to proceed for dereservation. It was explained to him that the block has not been allocated to him but only reserved, his being a Greenfield project.
8. On the end use project also no progress has been made/reported. The applicant requested some more time for purchase of GR. It was explained to him that he was CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 205 of 216 communicated in writing for purchase of GR within six weeks a very long time back and he should purchase forthwith or face dereservation. He agreed to buy the GR at the earliest.
9. Subsequently, CMPDIL in their letter dated 7.10.2005 have re-examined the issue and are of the categorical view that CMPDIL cannot recommend any change in the block boundaries. The mining can be carried out beyond 200 meters depth and in case of scarcity of sand for the purpose of stowing the extraction of coal may be limited to driving development galleries below the surface features (F/A).X Letter from GIL at 8.10.05 at flag 'B' pl. | 'B' XP 170-71/C File is submitted for suitable decision in the matter.
Sd/-
(Sujit Gulati) Director CA/13.10.05 Another communication has come from him, 'A' since that meeting. That may also be kept be processed and put up immediately.
Sd/-
(K.S. Kropha)/20/X JS (Coal) Communication referred to at 'A' above is already indicated at "B' above and is kept at flag 'B'. Nothing new has been said in this communication that was not discussed and mentioned in above note except that portion in the last para of the communication which the JS (C) in his margin observations has observed that "no such assurance was given." No subsequent communication has been received so far thereafter.
Submitted for suitable decision pl.
Sd/-
(Sujit Gulati)/21.X.05 Director (CA) Secretary (C) may kindly recalled his minute at p.24/N.
2. The party concerned (Sh. Ashok Daga) had met us in person, and the issue of demarcation/alteration in block boundary was discussed at length. The portion was explained to him, and the requirement of meeting the milestone in development of mine as well as the end use CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 206 of 216 plant was reiterated to him.
3. He has acknowledged the discussion in his communication at F/'B' (pp 172-174/C).
4.He has however not yet paid for the GR to CMPDIL/WCL, and instead has written to DGM, Maharashtra to get the information about payment required to be paid to him.
5. He has also sought 6 weeks time to pay the GR charges ('X' of p.173/C).
In the light of the note of pp.25-26/N, and above 'A' at p. 23/N is submitted for kind orders.
Sd/-
(K.S. Kropha)/24/X/05 JS (Coal) Please issue him notice for cancellation of block.
Sd/-
Secretary (Coal)/26.X.05"
(Emphasis supplied by me)
226. From a bare perusal of the aforesaid noting dated 13.10.2005 of Sh. Sujit Gulati, Director, CA Section, MOC, it is thus clear that despite the issue of boundary of "Majra" coal block having been clarified by CMPDIL, the accused persons for reasons best known to them were still continuing to harp on the said issue. The purpose of referring to the aforesaid notings of the MOC as were recorded at that time is only to highlight the views of MOC officers with respect to all such issues as were raised by A-2 Ashok Daga on behalf of A-1 M/s GIL. However in the present proceedings, I do not intend to sit in any appeal over the said views formed by MOC officers qua all those issues as the purpose of present proceedings is not to substitute the said decision of MOC by any fresh opinion or view. The primary objective of the present exercise is to see whether there existed any malafide intention in the actions of A-1 M/s GIL and A-2 Ashok Daga CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 207 of 216 or not. However the existence of malafide intention in the various acts committed by A-1 M/s GIL and A-2 Ashok Daga has already been demonstrated and well established in the earlier part of the present judgment and the same need not be reiterated again over here.
227. However, I find considerable force in the submissions of Ld. Counsels for the accused persons that various ingredients of the offence of cheating i.e. u/s 420 IPC qua the present head of charge does not stand established. Though it is an undisputed fact that 50% equity in A-1 M/s GIL was sold by A-2 Ashok Daga for a sum of Rs. 1.55 crores but in my considered opinion the was in fact the end product of various acts of deception and to be more specific, the various acts of cheating undertaken by A-1 M/s GIL and A-2 Ashok Daga in procuring allocation of a captive coal block from MOC. The sale consideration as above in fact goes to reinforce the earlier conclusion that the letter of reservation so obtained by the accused persons from MOC was of immense value in the hands of accused persons. From the deposition of PW-11 Sh. Nand Kishore Sarda and the various agreements entered into by A-2 Ashok Daga at different points of time clearly shows that on account of availability of a coal block with A-1 M/s GIL a higher amount of sale consideration was being fixed towards the 50% equity holding of A-2 Ashok Daga and his family members. Thus the said sale of equity by A-2 Ashok Daga for a sum of Rs. 1.55 crores was the final end product of the various acts of deception undertaken by the accused persons but the same in my considered opinion can not constitute a separate or distinct offence of cheating in itself. Admittedly there was no bar put by MOC CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 208 of 216 in the letter of reservation issued qua "Majra" coal block or in any subsequent communication that an existing shareholder of A-1 M/s GIL could not transfer his equity. Thus the said act of transfer of equity in itself independent of other acts does not constitute any offence much less that of cheating.
In view of my aforesaid discussion, I am thus of the considered opinion that prosecution has miserably failed in proving its case qua the offence of cheating i.e. u/s 420 IPC as regard present head of charge under discussion.
228. I accordingly hereby acquit A-2 Ashok Daga for the offence of cheating u/s 420 IPC under the present head of charge.
FINAL DECISION
229. Thus in view of my aforesaid discussion the final decision qua various head of charges as framed against the accused persons is as under:
S. Name of Charge framed Final decision No accused 1 A-2 Ashok CHARGE-I Daga That during the year 2000, you Ashok Convicted for the Daga submitted an application dated offence of 22/04/2000 to Ministry of Coal, Govt. of attempt to cheat India for allocation of coal block by falsely i.e. u/s 420/511 showing Gondwana Ispat as a Ltd. IPC Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 209 of 216 Secondly, during the year 2001, you Convicted for the Ashok Daga submitted another application offence of dated 25/09/2001 to Ministry of Coal, Govt. attempt to cheat of India for allocation of Warora West Coal i.e. u/s 420/511 block falsely showing Gondwana Ispat as IPC a Ltd. Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Thirdly, during the year 2001, you Convicted for the Ashok Daga submitted an application offence of dated 25/09/2001 to Ministry of steel, Govt. cheating i.e. u/s of India for seeking recommendation of 420 IPC Ministry of Steel to Ministry of Coal for allocation of Warora West Coal block in favour of Gondwana Ispat by falsely showing Gondwana Ispat as a Ltd.
Company and signing as Director of Gondwana Ispat Ltd. whereas on that date Gondwana Ispat was not a registered company and thereby you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
Fourthly, during the year 2001, an Convicted for the application dated 01/10/2001 was offence of submitted in the name of M/s Gondwana cheating i.e. u/s Ispat Ltd. to the Director, Geology and 420 IPC Mining, Govt. of Maharashtra for seeking recommendation of Govt. of Maharashtra to Ministry of Steel for consideration of their case by falsely mentioning that Western Coalfields Ltd. has given no objection for release of Warora Block in favour of Gondwana Ispat and falsely showing Gondwana Ispat as a Ltd.
Company. Whereas on that date Gondwana Ispat was not a registered company and thereby you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 210 of 216 Fifthly, during the period between 2005 Acquitted for the to 2011 you Ashok Daga despite an offence of undertaking/affidavit to Ministry of Coal, cheating i.e. u/s did not develop the coal mine and also did 420 IPC not set up the End Use Plant and sold your entire shareholding in Gondwana Ispat Ltd. and thereby obtained undue financial gain of Rs. 1.55 crores over the nationalized natural resources of the country and thereby cheated Govt. of India and thus you Ashok Daga committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
2 A-1 M/s CHARGE-II GIL and That during the year 2003, both of you in A-2 Ashok furtherance of the common object of the Daga criminal conspiracy hatched between you both and as described in detail in the separate charge framed, with a view to procure allocation of "Majra coal block" in favour of M/s Gondwana Ispat Ltd., made false Submission before the 18th Screening Committee about financial tie up with financial institutions and tie up for supply of Iron Ore from Orissa and thereby both Convicted of you committed the offence of cheating under the punishable u/s 420 of IPC and within my two head of cognizance.
charges Secondly, during the year 2003, jointly for both of you in furtherance of the common the offence object of the criminal conspiracy hatched of cheating between you both and as described in i.e. u/s 420 detail in the separate charge framed, with IPC.
a view to procure allocation of "Majra coal block" in favour of M/s Gondwana Ispat Ltd., made false Submission before the 20th Screening Committee about procurement of land and tie up for supply of Iron Ore from Orissa and thereby both of you committed the offence of cheating punishable u/s 420 of IPC and within my cognizance.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 211 of 216
3. A-1 M/s CHARGE-III GIL and That during the period between 2000 to 2011 at Maharashtra, Delhi and other A-2 Ashok places, both of you entered into a criminal Daga conspiracy, the object of which was to cheat Ministry of Coal, Ministry of Steel, Government of India and Govt. of Maharashtra and thereby procure allocation of "Majra Coal Block" situated in Chanderpur District of Maharashtra in favour of M/s Gondwana Ispat Ltd. by making false submissions and by falsely showing M/s Gondwana Ispat as a Convicted registered limited company and by making under the false representation about financial two head of preparedness and tie up of supply of Iron charges Ore from Orissa to gain undue financial jointly for gain and thereby both of you committed the offence the offence of criminal conspiracy being u/s punishable u/s 120-B IPC and within my 120-B/420 cognizance.
IPC Secondly, during the aforesaid period and in furtherance of the aforesaid common object of the criminal conspiracy as described above, both of you did various acts of cheating as menitioned in the separate charges framed against you Ashok Daga and M/s Gondwana Ispat Ltd.
and thereby committed the offence punishable u/s 120-B r/w 420 IPC and within my cognizance.
Certain observations and directions regarding practice and procedure followed by CBI officers with respect to seizure of files/documents during the course of preliminary enquiries (PE) and in the investigation of cases.
230. Before parting away with the present judgment I however deem it appropriate to make certain observations regarding the practice and procedure adopted by CBI while collecting various files/documents during the course of either any preliminary enquiry or CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 212 of 216 in the investigation of a case. It is often found that while seizing various files/documents from any government department or even during the course of search and seizure operation no uniform practice is adopted by the investigating officers especially as regard the pagination of the pages inside the said files/documents. At times the various pages in any given file are found to be carrying more than one number given to them by the officials of the concerned department to whom the said file/document belongs to. However, the CBI officers at the time of seizing of the said files/documents usually put a cross to all such numbers and give fresh numbers to all the pages. Even in this process it is found that when any given file of a government department contains some note sheet pages and some pages on the correspondence side then certain officers while seizing them assign numbers to various pages from front cover of the file itself to the end cover or the numbering starts from the fist note sheet page in the file and goes in continuity till the last correspondence side page of the file. It is also noticed that in certain cases the officers assign separate set of numbers to the note sheet pages starting from number one (1) and the correspondence side pages are also assigned a separate set of numbers i.e. again starting from number one (1). It is also noticed that certain officers start the numbering of pages from the back side of the file. It is also usually found that certain officers assign odd numbers to the pages of the file i.e. 1,3,5,7.... and thereby assigning the even numbers i.e. 2,4,6,8.... to the back side of all pages irrespective of the fact as to whether some matter is written on the back side of all the pages or not. At the same time certain officers are found to have assigned one single number to CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 213 of 216 a page including its front and back side and thus the number moves as 1,2,3,4,5....It has also been noticed in certain cases that certain officers assign numbers only to such pages be it on the front side or back side where some or other typed or hand written matter exists.
231. Though the aforesaid practice and procedure adopted by different investigating officers may not be termed as illegal but certainly it causes problem during the course of trial when various pages or documents inside any file/document are being referred to. It also leads to raising of avoidable doubts as to the total number of pages available in a file and consequently it also leads to avoidable lengthy cross-examination of prosecution witnesses on such issues.
232. Similarly, it is also noticed by this Court during the course of trial of various cases that after various files/documents are collected by the officers of CBI from different government departments or during the course of search and seizure operations then the same are handed over to Malkana In-charge of Malkhana of their concerned unit for safe custody. However, on account of voluminous nature of documents the Malkhana In-charge often takes sometime in verifying as to whether all the pages in the given file/document are intact or not i.e. are in accordance with the details mentioned in the seizure memo or not. Thus it is found that the date of entry of the said documents in the Malkhana is normally mentioned as the date when Malkhana In-charge finally deposit all such files/documents in the Malkhana after finding them to be in proper order. There is however no explanation mentioned in the registers maintained by him as regard the time period which gets elapsed CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 214 of 216 during the period when the files/documents after seizure by any investigating officer were handed over to him and the date when after finding them in order he deposits them in the Malkhana. Similarly, it is also found that when during the course of investigation of any case certain documents are sought from the Malkana by any investigating officer then usually no entry of the handing over of photocopies of documents is maintained though entry qua handing over of any original document is maintained in the register of the malkhana. As a result of the aforesaid practice and procedure it is often found that during the course of trial lengthy avoidable cross-examination of the prosecution witnesses takes place in an attempt to prove certain avoidable doubts.
233. In the aforesaid facts and circumstances, I am thus of the considered opinion that if a Standard Operating Procedure (SOP) is laid down by CBI as regard the manner in which the pagination of the various pages in any given file/document at the time of its seizure shall be carried out or where numbers have already been assigned to the pages of any file/document by the officials of the office concerned from where the files/documents have been seized then in order to avoid any confusion as to the numbers put by the CBI offficers at the time of seizing of any such file/document, specific colours of inks may be prescribed to be used by the CBI officers to put numbers on the pages in the file/document at the time of seizure. It may also be specified as to in what manner pagination of various pages of a file/document needs to be undertaken or whether the back side pages, even if blank or not are to be assigned any number or not.
CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 215 of 216 Similar SOP also needs to be laid down for depositing of documents be it original or photocopy in the Malkhana and their release subsequently including maintenance of registers in the Malkhana. The aforesaid exercise will certainly go a long way in expediting the trial process in the Courts as a lot of cross-examination on such avoidable issues will no longer be necessary or required.
234. It is accordingly directed that a copy of this judgment containing the aforesaid observations be placed before Director CBI for his information and necessary action, through IO Inspector Rajbir Singh. It is expected that SOP which shall be so laid down be thereafter communicated not only to this Court but also to all the CBI Digitally signed courts for information. BHARAT by BHARAT PARASHAR PARASHAR Date: 2018.04.27 15:05:44 +0530 Announced in the Open Court (Bharat Parashar) Today on 27.04.2018 Special Judge, (PC Act), (CBI-07), New Delhi District Patiala House Courts New Delhi CBI Vs. M/s Gondwana Ispat Ltd. & Ors. Judgment dated 27.04.2018 Page No. 216 of 216