Delhi District Court
Central Bureau Of Investigation vs M/S B.S. Ispat Ltd on 27 May, 2024
IN THE COURT OF SH. SANJAY BANSAL:
SPECIAL JUDGE (PC ACT)(CBI)(COAL BLOCK CASES) - 02:
ROUSE AVENUE DISTRICT COURTS: NEW DELHI.
CNR No. DLCT110011462019
CBI Case No. 294/2019,
RC No. 221 2015 E 0005
Branch: CBI/EO-III/New Delhi
CBI Vs. M/s B.S. Ispat Ltd. & Ors.
U/s 120-B r/w Section 420 and 406 IPC
Date of order on cognizance : 22.12.2016
Date of framing of charge : 03.05.2019
Date on which judgment
was reserved : 29.04.2024
Date of judgment : 27.05.2024
Central Bureau of Investigation (CBI)
Vs.
(1) M/s B.S. Ispat Ltd.
Through AR Sh. Rishabh Basra
Company Address: Khasra No.97,
101 & 190, Village-Salori Yensa,
Post-Chinora, Tehsil-Warora,
District Chandrapur,
Maharashtra-442914 (Convicted)
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 1 of 194
(2) Mohan Agrawal
S/o Late Bindraban Agrawal
R/o 100, Ground Floor, Pritam Apartments,
behind HDFC House, Pandit R.S. Shukla Marg,
Civil Lines, Nagpur - 444 001.
Present Address: H. No. 300, Chitanvis Marg,
Opposite Hislop College,
Civil Lines, Nagpur - 440001,
Maharashtra. (Convicted)
(3) Rakesh Agrawal
S/o Sh. Satyanarayan Agrawal
R/o Flat No. 2, Temple Ball, Sri Nagar
Colony, Hyderabad - 700034.
Present Address: Flat No. 902, C-Block,
My-home Abhra, Hitech City,
Hyderabad - 500051. (Convicted)
APPEARANCES
Present : Ld. Senior Advocate, Sh. R.S. Cheema, Special
PP and Ld. Advocate Ms. Tarannum Cheema
(through VC), alongwith Ld. DLA Sh. A.P.
Singh, Ld. ALA Sh. Sanjay Kumar, Ld. DLA
Sh. N.P. Srivastava, Ld. Sr. P.P. Sh. V.K. Pathak
and Advocate Sh. Akash Singh for CBI.
Ld. Counsel Sh. Simarjeet Singh for A-1
company, Ld. Counsels Sh. Kumar Vaibhav and
Ms. Somaya Gupta for A-2 Mohan Agrawal and
Ld. Counsel Sh. Hemant Shah for A-3 Rakesh
Agrawal.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 2 of 194
JUDGMENT:
TABLE OF CONTENTS PARTICULARS PARAGRAPH PAGES NUMBERS PART-A 1 to 47 4-22 THE ALLEGATIONS PART-B 48 to 52 22-25 THE CHARGE PART-C THE 53 to 292 25-106 PROSECUTION EVIDENCE PART-D STATEMENTS OF 293 to 296 106-107 ACCUSED PERSONS U/S 313 CRPC PART-E 297 to 334 107-116 THE ARGUMENTS PART-F 335 to 525 116-194 THE ANALYSIS AND DECISION OF THE COURT CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 3 of 194 PART - A THE ALLEGATIONS
1. The present case pertains to allocation of 'Marki Mangli-I' coal block situated in the state of Maharashtra in favour of M/s B.S. Ispat Ltd. (for short "M/s BSIL" or "BSIL").
2. The FIR No. RC 221 2015 E 0005 in the present case was registered pursuant to the findings of Preliminary Enquiry No. 219 2012 E 0004 which was initiated by the CBI on the reference of Central Vigilance Commission.
3. As per the chargesheet, BSIL had applied to Ministry of Coal, Govt. of India, ("MoC") on 28.06.1999 for allocation of Marki Mangli coal block for captive coal mining. The application was made on the letter head of M/s BSIL. The coal block was sought for meeting out coal requirement of Sponge Iron Plant ("SIP") of the company of 3 LTPA capacity. It was also mentioned in the application that the coal in the Marki Mangli block was having high ash and sulphur content and thus needed washing. It was proposed to set up a washery at the site. Mining was proposed through underground method.
4. Investigation has revealed that M/s BSIL was not incorporated till 28.06.1999 on which date it applied for allocation of the coal block. Investigation has revealed that M/s BSIL was incorporated only on 01.12.1999. The certificate to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 4 of 194 commence business was issued only on 27.04.2000.
5. The application for allocation of coal block dated 28.06.1999 was signed by Mohan Agrawal as Director of M/s BSIL. Further, Rakesh Agrawal also made an application dated 23.07.1999 as Director of M/s BSIL to the Collector, Yavatmal District, Maharashtra for allocation of Marki Mangli coal block. He had enclosed Memorandum of Association and Articles of Association of the company M/s BSIL alongwith the application. It is alleged that annexing Memorandum of Association and Articles of Association with the application dated 23.07.1999 amounted to misrepresentation as it was represented as if the company M/s BSIL was a duly incorporated company on the said date.
6. The application dated 23.07.1999 was forwarded by the Collector to the Directorate of Geology and Mining, Nagpur which in turn forwarded it to the Department of Trade Commerce and Mining, Govt. of Maharashtra.
7. Investigation further revealed that Secretary, Govt. of Maharashtra sent letter dated 19.07.1999 to Secretary, MoC enclosing copy of letter of Director, Geology and Mining, Nagpur recommending application of M/s BSIL for Marki Mangli coal block. He also informed that Govt. of Maharashtra would take a detailed view on the application and the project in the State Level Committee constituted for coal.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 5 of 194
8. Rakesh Agrawal as Director of M/s BSIL vide letter dated 03.09.1999 sent to Advisor (Projects), MoC referred to its earlier letter dated 28.06.1999 and again requested for allocation of Marki Mangli coal block for captive mining. Another letter dated 03.09.1999 was submitted by the company to Joint Secretary, Ministry of Steel ("MoS") for recommending its case to MoC. The MoS vide OM dated 24.09.1999 sent to MoC recommended allocation of Marki Mangli coal block to M/s BSIL.
9. Investigation also revealed that Mohan Agrawal, as Director of M/s BSIL, had also made application dated 28.06.1999 to Director, Geology and Mining for allocation of the Marki Mangli coal block. He had also annexed copy of the application dated 28.06.1999 made to Advisor (Projects), MoC. Mohan Agrawal also submitted letter dated 03.07.1999 as Director of M/s BSIL to Secretary Mines, Govt. of Maharashtra. He sent a copy to Director, DGM, Maharashtra. He also sent further correspondences dated 08.07.1999 and 12.07.1999 to DGM Maharashtra.
10. It is mentioned in the chargesheet that as per Section 3 of Coal Mines (Nationalisation) Act, 1973 ("CMN Act"), only a company can apply for allocation of coal block. Further as per Section 2(c) of CMN Act, company means a company as defined in Section 3 of the Companies Act, 1956. Further as per Section 3 of the Companies Act 1956, company means a company formed CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 6 of 194 and incorporated under the said Act. As such, M/s BSIL was not a company when it applied for allocation of coal block.
11. Investigation also revealed that MoC had constituted Screening Committee for purpose of screening applications for allocation of coal blocks. The members of the Screening Committee were changed from time to time. However, it remained an inter-ministerial and inter-governmental in character.
12. Investigation has revealed that the following first set of guidelines adopted by Screening Committee in the year 1993 were applicable in the instant case-
i. "The blocks in green field areas where basic infrastructure like road, rail links and power lines are not immediately available, should only be given to private sector. The areas where CIL has already invested in creating such infrastructures for opening new mines, should not be handed over to the private sector.
ii. The blocks offered to private sector should be away from the existing mines and projects of CIL. iii. Blocks already identified for development by CIL should not be offered to the private sector.
iv. Private sector should be asked to bear the full cost of exploration in these blocks which will be offered to them.
v. The requirement of coal for about 30 years would be considered."
13. Investigation has revealed that the applications were CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 7 of 194 processed in the MoC and placed before the Screening Committee meeting from time to time. Notices were issued to the members and representative of the companies for attending the meeting of Screening Committee by the MoC. The Screening Committee held its meetings and the applicants whose cases were listed in the agenda of the meeting, would also attend it. Screening Committee would identify captive coal blocks to be allocated to the applicant private companies. Similarly, after the Screening Committee meeting, the draft minutes were prepared and approved by the Chairman of the Screening Committee. The allocation letter or relevant extracts of the meetings used to be issued to the concerned companies/authorities as per the approved minutes.
14. Investigation further revealed that case of M/s BSIL was considered by the State Level Committee of Govt. of Maharashtra on 30.09.1999. It was also found that Rakesh Agrawal had sent letter dated 25.08.1999 as Director of M/s BSIL to Secretary, Trade Commerce and Mining Department, Govt. of Maharashtra. Rakesh Agrawal also submitted an application dated 12.07.1999 to Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Govt. of India for obtaining Industrial Entrepreneur Memorandum ("IEM"). One IEM was also issued on 13.07.1999.
15. Investigation has revealed that the case of the M/s BSIL was one of the proposals to be considered in the 15th CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 8 of 194 meeting of the Screening Committee. An agenda for the meeting of the Screening Committee proposed to be held on 22.12.1999 was prepared in the MoC after the approval of Sh. C.D. Arha, the then Addl. Secretary (Coal), who was the Chairman of the Screening Committee.
16. Investigation has revealed that the meeting of the Screening Committee was scheduled to be held in January, 2000 but could be convened only on 06.03.2000. The proposal of M/s BSIL was dealt with in the said Screening Committee. The minutes of the meeting were approved by Sh. C.D. Arha, the then Addl. Secretary (Coal) as per note dated 03.04.2000. The Committee decided to allocate Marki Mangli block to M/s BSIL subject to the conditions that the party would furnish to Department of Coal the guidelines of MSEB/Govt. of Maharashtra indicting that 'NOC' for the CPP was not necessary, it would wash the coal in a washery and the middlings produced during washing of coal would be used in the CPP.
17. Investigation has revealed that as per the approved minutes, M/s BSIL was communicated the decision of the meeting after obtaining approval from Sh. T.K. Ghosh, the then Director (CPAM), MoC. The MoC vide letter dated 25.04.2000 conveyed the decision of 15th meeting of the Screening Committee to M/s BSIL intimating that the Screening Committee after detailed deliberation decided, in principle, to allocate Marki Mangli block for development as a captive source of supply of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 9 of 194 coal for the sponge iron plant of 3 LTPA capacity subject to the conditions mentioned in the minutes and formal order would be issued after the above conditions be fulfilled.
18. Investigation has revealed that M/s BSIL sent a letter dated 02.05.2000 addressed to Addl. Secretary/Chairman, Screening Committee, Deptt. of Coal intimating that in compliance with the condition No. 1 of the Screening Committee, they were putting up the CPP at Wani Tehsil in Yavatmal District which was under D Plus Zone of Maharashtra State. As per the guidelines of Government of Maharashtra, CPP in D Plus Zone in Maharashtra was permitted. The company enclosed copies of letters dated 25.04.2000 and 26.04.2000 from Govt. of Maharashtra confirming that CPP in D Plus Zone in Maharashtra State was permitted. In compliance with condition 2 & 3 of the decision of the Screening Committee the company informed that the non-coking coal of the Marki Mangli captive mining block would be washed in washery and the clean coal would be used in the sponge iron plant. The middling fraction of the coal would be used for power generation in CPP.
19. The matter was put up by the subordinate officers of MoC to Sh. C.D. Arha, the then Additional Secretary (Coal), for obtaining approval of issuance of formal allocation order to the party. He directed to issue a fresh notice to the party, asking them to submit formal recommendation of Govt. of Maharashtra. Accordingly, a letter dated 11.08.2000 addressed to M/s BSIL CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 10 of 194 was sent by the MoC intimating that the approval of the Govt. of India, conveyed to them for development of Marki Mangli block vide letter dated 07.07.2000 was based on incomplete data and pending the receipt of the requisite recommendation of the State Govt., it was withdrawn.
20. M/s BSIL requested MoC vide its letter dated 23.08.2000 to withdraw the letter dated 11.08.2000 since the Screening Committee had made the allocation in which Govt. of Maharashtra was a member and the committee had consented to allocate the block in its favour. Investigation has revealed that the Screening Committee Meeting in which the block was allocated to the party was not attended by any member from Govt. of Maharashtra.
21. Investigation has revealed that Sh. M.R. Patil, Under Secretary, Trade, Commerce & Mining Deptt., Mantralaya, Mumbai vide his letter dated 18.09.2000 and another letter dated 11.09.2000 informed that as per the decision taken in 2 nd meeting of the State level Committee of Maharashtra for Coal, it was finally recommended to the MoC to allot Marki Mangli coal block to M/s BSIL.
22. Investigation has revealed that the Development Commissioner (Industry), Nagpur vide letter dated 9.3.2001 informed MoC that M/s BSIL, Nagpur had filed Industrial Entrepreneurs Memorandum No. 1428/SLA/IMO/99 dated 13.7.99 with Govt. of India in Ministry of Industry, Secretariat CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 11 of 194 for Industrial Assistance, New Delhi. As per the Notification dated 25.7.91 of Govt. of India, sponge iron did not fall in Schedule-I or Schedule-II, hence no industrial license was required by M/s BSIL and the IEM filed by the unit was sufficient for setting up a sponge iron plant. It was further confirmed by Ministry of Commerce & Industry (Department of Industrial Policy & Promotion) vide letter dated 22.03.2001.
23. Investigation has revealed that after receipt of the above mentioned clarifications from different authorities finally Sh. C.D. Arha, AS (Coal) approved the proposal for issuing order to release the coal block in favour of the party. The MoC conveyed final allocation of Marki Mangli coal block to BSIL for captive mining vide letter dated 25.04.2001.
24. The company M/s BSIL sought allocation of additional coal block namely Marki Mangli-II, III & IV after it came to know that Marki Mangli-I was already divided into four coal blocks. The request however remained inconclusive and no additional coal block was allocated. Later on, mining plan of the company was approved by MoC vide letter dated 19.07.2005. The company also applied to Govt. of Maharashtra for grant of mining lease which was ultimately granted on 07.05.2010. Vide letter dated 17.05.2010, M/s BSIL informed MoC that M/s Gondwana Ispat Ltd. ("GIL") had merged into M/s BSIL. Mine opening permission was granted on 24.05.2010. Production in the coal blocks started on 18.03.2011. Coal mining was done by the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 12 of 194 company till March 2015 after which coal block was taken over by WCL as per orders of the Hon'ble Supreme Court vide which it deallocated all the coal blocks given to the private companies. It is mentioned that annual quantity of coal mined by the company was within the projected annual capacity of the approved mining plan.
25. Investigation has revealed that the company commissioned EUP of 60000 TPA of Sponge Iron production and started manufacturing of sponge iron since the year 2011-12. It had consumed 137336.38 MT coal for production of Sponge Iron and generation of power during the period 2011-12 to 2014-
15. The company commissioned CPP of 15 MW capacity and started power generation since the year 2013-14.
26. Investigation has revealed that the promoters/ shareholders of M/s BSIL in the year 2011 decided to sell their respective shareholding of BSIL. Accordingly, they entered into an agreement with a buyer i.e. M/s Oriental Iron Casting Ltd. (OICL). On 02.12.2011 a Share Purchase Agreement ("SPA") was signed amongst, OICL, MVPL and RFSPL whereby the entire shareholding of RFSPL held by Sarda Group and Agrawal group and MVPL held by Govind Daga Group was sold and transferred to OICL. A total payment of Rs. 116.58 crores was made to the existing shareholders by the buyers. The new management did not change the name of the company and continued with the same line of business of the company.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 13 of 194
27. Investigation has revealed that as per the prevalent system, the claim of the company was taken on face value and there was no system to verify the existence of the company in any of the concerned Departments, be it MoC, MoS or State Govt. offices. Therefore, no criminal action can be attributed to the public servants, who dealt with this matter, on this count.
28. It is stated that from the above mentioned facts and circumstances, it has been revealed that the Company in question was not incorporated with the Registrar of Companies under the provisions of the Companies Act, 1956 when it made applications to MoC, MoS and Authorities of Govt. of Maharashtra for allocation of the Coal block or for pursuing its case. As such the applicant was inherently ineligible for allocation of the coal block. In spite of this, repeated applications were made for the allocations which have either been signed by Rakesh Agrawal or Mohan Agrawal.
29. There are overt acts on the part of Mohan Agrawal and Rakesh Agrawal in making correspondences as Directors of M/s BSIL knowing well that it was not yet incorporated. Companies Act, 1956 restricts the use of words "Limited" and "Private Limited". These words can be used by the entities duly incorporated with limited liability, or duly incorporated as a private company with limited liability, as the case may be. Mohan Agrawal and Rakesh Agrawal have used the word Limited suffixing it with M/s BSIL giving it a colour of an entity CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 14 of 194 duly incorporated. The use of the word Limited on the letterheads of M/s BSIL while submitting applications deceived the concerned authorities to believe that theirs was the company which had applied for the coal block.
30. It is stated that in the above facts, it is clear that misrepresentation was done by Mohan Agrawal and Rakesh Agrawal. Mohan Agrawal corresponded with MoC as Directors of the Company even when they were not. He was formally appointed Director of the company on 31.10.2003 and remained Director till 25.12.2007. After that he resigned and re-appointed as Additional Director on 05.02.2009 and worked till 02.01.2012. Investigation has revealed that almost all the correspondences with MoC and other authorities have been done by him under his signature as Director prior to his appointment and also after appointment as Director.
31. It is also stated that it is established that there was prima facie misrepresentation by Rakesh Agrawal and Mohan Agrawal when they made correspondence with MoC and other authorities as Directors of M/s BSIL when it was not incorporated. Acting upon those submissions they obtained allocation of the coal block.
32. After completion of investigation, initially CBI filed a final report in the form of chargesheet u/s 173 CrPC against three accused persons namely A-1 company M/s BSIL, A-2 Mohan Agrawal and A-3 Rakesh Agrawal for the offences u/s CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 15 of 194 120-B/420 IPC and substantive offences thereof. However at that time itself, it was stated by the investigating agency that further investigation qua certain other aspects was in progress and supplementary report would be filed on conclusion of the same. Accordingly vide order dated 22.12.2016, my Ld. Predecessor took cognizance of the offences u/s 120-B/420 IPC and Section 420 IPC against all the accused persons i.e. A-1 company M/s B.S. Ispat Ltd., A-2 Mohan Agrawal and A-3 Rakesh Agrawal.
33. All the accused persons appeared and were admitted to bail. Company M/s BSIL appointed Sh. Vipin Dhyani as its AR u/s 305 CrPC. Copies of the chargesheet and documents were supplied to the accused persons as per Section 207 CrPC. However, later on, Sh. Rishabh Basra was made the AR.
34. While proceedings u/s 207 CrPC were in progress, the report of further investigation u/s 173 (8) CrPC was filed by the IO Dy. SP Subhash Pandey on 30.07.2018 wherein it was stated that offence u/s 406 IPC was also committed by company M/s B.S. Ispat Ltd.
35. It is stated that further investigation has revealed that at the time of application of the coal block, Mohan Aggarwal in his letter dated 26.08.1999 mentioned that coal mined from the block would be washed in washery to reduce high ash and sulphur contents and for that he had proposed to set up washery at pit head. The proposal of the party was processed in the MoC CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 16 of 194 and in the agenda of the 15 th meeting of the Screening Committee, this fact was mentioned. It was also mentioned that the middlings generated during washing of coal would be utilised for generation of power. When the proposal of the party was considered in the 15th Screening Committee meeting, the minutes contained these fact as well. M/s B.S. Ispat Ltd. was conveyed relevant extract of the minutes of the Screening Committee meeting dated 06.03.2000 vide letter dated 25.04.2000 of MOC.
36. It is also revealed that when decision of 15th Screening Committee meeting regarding in principle allotment of Marki Mangli block to the company was communicated to the company for complying with the above mentioned conditions for getting formal order issued, the company vide letter dated 02.05.2000 had confirmed that non coking coal of the block would be washed in washery and clean coal would be used in sponge iron plant, the middlings fractions would be used for power generation in CPP.
37. It is revealed that prior approval dated 10.09.2009 was issued by Central Govt. u/s 5(1) MMDR Act, 1957 subject to the following relevant conditions:-
"(iii) No coal shall be sold, delivered, transferred or disposed off except for the stated captive mining purposes and except with the previous approval from the Central Govt. in writing.
(ix) The party will wash the coal in a washery and the middlings produced by washing non coking coal for its sponge iron plant will be used in the CPP".
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 17 of 194
38. It is further revealed that above mentioned conditions were also mentioned at Sl. No.10 (iii) and 10 (ix) of Part-IX of Mining Lease signed by M/s B.S. Ispat Ltd. with District Mining Officer, Yavatmal for Marki Mangli-I coal block.
39. It has been revealed that mining of coal in the block was started on 18.03.2011 which continued till March 2015. Washing of the coal was started in the year 2011-12. Investigation has revealed that the company got the mined coal washed through three washeries namely M/s Indo Unique Flame Limited, M/s Bhatia Coal Washeries Ltd. and M/s Kartikay Coal Washeries Pvt. Ltd. since the year 2011-12. The company started manufacturing of Sponge Iron since the year 2011-12. The commissioning of CPP of 15 MW capacity was done in the year 2013-14.
40. It has been revealed that the MoC vide OM No. 47011/1(9)/1999-CPAM/CA-I(Vol.VI) dated 17.04.2014 constituted an Inter-Ministerial Committee (hereinafter referred to as IMC) for examination of allegation of diversion/theft of coal mined from Marki Mangli-I coal block allocated to M/s B.S. Ispat Ltd. It had members from Ministry of Coal, Ministry of Steel, Ministry of Power, Coal Controller Organization (CCO), Govt. of Maharashtra and a member from CMPDIL. Terms of reference given to the IMC include examination of total quantity of coal produced in the block and dispatched to the EUP;
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 18 of 194 examination about the capacity of Power Plant linked with the coal block; examination of the actual consumption of coal extracted from the coal block in the power plant since start of production; assessment of total amount of surplus/excess coal produced since start of coal production in the coal block; examination of coal washing aspects and disposal of washery rejects; to carry out spot inspection of the coal block and end use plant, etc.
41. Investigation has revealed that the IMC visited factory premises of M/s B.S. Ispat Ltd., coal block and washeries where coal of M/s BSIL was being washed, on 24.03.2015 and obtained information like production and dispatch of coal from the coal block, details of washing of the coal, receipt of the coal in the factory premises, production data and other relevant information and further examined capacity of Sponge Iron Plant (SIP) and Captive Power Plant (CPP) of M/s BSIL and actual coal consumption in the SIP and the CPP. The IMC submitted recommendations to the MoC on the above mentioned points, total production of coal since beginning till 31st March 2015, average specific coal consumption in sponge iron production, coal consumption in CPP, etc.
42. Further investigation has revealed that the end use plant was in production till September 2015 after which the production in the end use plant of M/s B.S. Ispat Ltd was stopped, which means that M/s BSIL continued utilisation of coal CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 19 of 194 till September 2015. This period was not under examination by IMC. Therefore, in order to cover two points i.e. (1) whether M/s BSIL complied with the conditions of allocation of the coal block and (2) utilisation of coal since beginning from March, 2011 till September, 2015 by the company, further investigation was conducted. The data of coal consumption since beginning till 2015-16 was obtained from the company vide its letter bearing reference No. BSIL/Director/2016-17/38 dated 21.11.2016. It has submitted details of coal production in the block since beginning till mining was stopped on 31.03.2015. It has further submitted details of coal despatched from coal block to plant of the company and 3 washeries mentioned above during the year 2011- 12 to 2015-16. Data of grade wise coal received at the end use plant from coal mine and from each washery was also provided with this letter. Further, consumption of different grades of coal (Run of Mine/raw coal, washed coal, fine coal/middlings and reject coal) in its SIP and CPP for the period 2011-12 to 2015-16 was also made available.
43. It has revealed that the company has used 4691 MT raw coal, 40,965 MT washed coal, 1,513 MT fine coal/middlings and 163 MT reject coal in the SIP. It has also procured 1,553 MT coal from market and used it in the SIP. Thus, it has used a total quantity of 48,885 MT of different grade of coal (Run of Mine/raw coal, washed coal, fine coal/middlings and reject coal) in the SIP.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 20 of 194
44. Investigation has revealed that the company has used 16,484 MT raw coal, 7,782 MT washed coal, 57,966 MT fine coal/middlings and 36,910 MT reject coal totalling 1,19,142 MT coal in the CPP.
45. Investigation has revealed that the company has used 1,513 MT middlings coal in SIP whereas it should have used the same in the CPP. Such use of coal is against the conditions of allocation. The company was allocated the coal block for using coal as per the conditions mentioned in the allocation letter which were further mentioned in the mining lease also but the company utilized the coal in violation of the said conditions which falls under definition of criminal breach of trust.
46. Investigation has revealed that the company has utilized the coal by violating the conditions mentioned in the allocation letter, previous approval and mining lease and thus committed criminal breach of trust. The company has used raw coal, washed coal and middlings in contravention to the allocation conditions mentioned in prior approval u/s 5(1) MMDR Act and also against the conditions of mining lease. Hence, the company has not used/disposed the property i.e. coal block as per the prescribed conditions mentioned in various legal documents and thus company has also committed offence of criminal breach of trust which is punishable u/s 406 IPC.
47. Accordingly, my Ld. Predecessor also took CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 21 of 194 cognizance of the offence u/s 406 IPC against A-1 company M/s BSIL vide order dated 23.08.2018.
PART - B THE CHARGE
48. While arguments on the charge were being heard on behalf of prosecution, it was stated by Ld. Counsels for accused persons that in so far as the charge for the offences u/s 120-B/420 IPC is concerned as against A-1 M/s B.S. Ispat Ltd., A-2 Mohan Agarwal and A-3 Rakesh Agarwal though the allegations were denied but at the stage of charge same were not being disputed and they had no objection if the charge against all accused person was framed as during the course of trial they would be able to show that all such allegations were false. Similarly, qua charge u/s 406 IPC it was stated on behalf of the company that they had no objection to framing of the charge as they would prove their defence during trial.
49. Thereafter, my Ld. Predecessor, vide order dated 03.05.2019, ordered framing of charge for offence u/s 120-B IPC and u/s 120-B/420 IPC against all the three accused persons i.e. A-1 M/s B.S. Ispat Ltd., A-2 Mohan Agrawal and A-3 Rakesh Agrawal besides substantive charge for the offence u/s 420 IPC. Charge for the offence u/s 406 IPC was also ordered to be framed against A-1 M/s B.S. Ispat Ltd. and accordingly on the same date i.e. 03.05.2019, charges for the aforesaid offences were framed CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 22 of 194 against the all accused persons. All the accused persons however pleaded not guilty to the said charges and claimed trial.
50. The charges so framed are being reproduced here for ready reference, as follows:
CHARGE A-1 to A-3 That during the year 1999-2003 at Nagpur, New Delhi and other places you all i.e. M/s B.S. Ispat Ltd., Mohan Agrawal and Rakesh Agrawal entered into a criminal conspiracy to cheat Ministry of Coal (MOC), Government of India so as to procure allocation of a captive coal block by adopting various illegal means viz. by making false claims about status of applicant i.e. B.S. Ispat Ltd. with respect to its incorporation that applicant B.S. Ispat Ltd. is an incorporated company as on 28.06.1999 i.e. when application for allocation was made to MOC for allocation of coal block in the name of B.S. Ispat Ltd. and you Mohan Agrawal and Rakesh Agrawal also undertook correspondences with MOC and other authorities representing yourself as directors of M/s B.S. Ispat Ltd. knowing fully well that no such company has yet been incorporated and consequently no such directors exist and in the process got recommendations from Ministry of Steel in favour of applicant B.S. Ispat Ltd. vide letter dated 23/24.09.1999 and by way of various such acts of omission and commission amounting to criminal conspiracy and cheating and thereby induced Screening Committee, MOC to make a recommendation in favour of applicant B.S. Ispat Ltd. on 06.03.2000 even though the company got incorporated on 01.12.99 i.e. much after the submission of its application to MOC and thereafter got certificate of commencement of business only on 27.04.2000 and you all thereby 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 common object of the criminal CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 23 of 194 conspiracy as described above you all did various acts of cheating, as described above and in the substantive charge framed separately and you all thereby committed offences punishable u/s 120-B r/w 420 IPC and within my cognizance."
CHARGE A-1 to A-3 That during the year 1999-2003 at Nagpur, New Delhi and other places you all i.e. M/s B.S. Ispat Ltd., Mohan Agrawal and Rakesh Agrawal in furtherance of the common object of the criminal conspiracy (as described in detail in the separate charge framed) cheated MOC, Government of India so as to induce it to allocate "Marki Mangli" coal block situated in the state of Maharashtra to M/s B.S Ispat Ltd believing your representation/claims to be true i.e. as regard the status of applicant B.S. Ispat Ltd. qua its incorporation as on 28.06.99 i.e. when the application seeking allocation of a captive coal block was made to MOC, Government of India and you Mohan Agrawal and Rakesh Agrawal also made various correspondences with MOC and other authorities as directors of company B.S. Ispat Ltd., knowing fully well that no such company stands incorporated and thus no such directors exist and thereby induced Ministry of Steel so as to make a recommendation in favour of applicant B.S. Ispat Ltd. to MOC vide letter dated 23/24.09.99 and in the process obtained allocation of "Marki Mangli" coal block from MOC in favour of applicant B.S. Ispat Ltd. on 03.04.2000 even though the company got incorporated on 01.12.99 i.e. much after the submission of its application to MOC and got certificate of commencement of business only on 27.04.2000 and you all thereby committed offence u/s 420 IPC and within my cognizance.
CHARGE CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 24 of 194 A-1 That M/s B.S Ispat Ltd. was allotted "Marki Mangli" coal block by MOC, Govt. of India in the year 2000 and while allotting the said coal block Screening Committee mentioned in its minutes of meeting that the middlings produced by washing non-coking coal for its sponge iron plant will be used in the captive power plant (CPP) and accordingly the company i.e. M/s B.S Ispat Ltd. executed a lease deed dated 07.08.2010 with District Mining Officer, Yavatmal, Maharashtra after receiving approval of Central Government dated 10.09.2009 and you thus having been entrusted with the said coal block and thereby exercising dominion over the coal reserves available in the said coal block used the extracted coal in violation of the legal contract/trust as per which the said coal was to be used and dishonestly used 1513 MT middlings directly in the sponge iron plant even though the middlings obtained after washing were directed to be used by you in the captive power plant and you thereby committed criminal breach of trust i.e. offence punishable u/s 406 IPC and within my cognizance.
51. Thereafter admission/denial of documents u/s 294 CrPC was carried out by all the accused persons. Various documents were admitted and were marked/exhibited during the said proceedings. These are Ex. P-1 to P-191.
52. Thereafter, prosecution examined its witnesses.
PART - C THE PROSECUTION EVIDENCE
53. Prosecution, thereafter, in order to prove the charges, examined 31 witnesses. However, examination-in-chief of witnesses namely Dy. SP Pradeep Kumar, Insp. S.C. CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 25 of 194 Bhagwat, Insp. Sudhir Kumar, Dy. SP Sunit Pal (all from CBI), Sh. Shriram Pandurang Kadoo, Sh. Rishan Rytathiang, Sh. Samin Ansari and Sh. Sujoy Majumdar was led by way of affidavits u/s 296 CrPC as their evidence was of formal character only. All the three accused persons did not cross-examine any of these witnesses whose affidavits were filed u/s 296 CrPC.
54. Affidavit u/s 296 CrPC was also filed by CBI on behalf of PWs Sh. R.S. Meena and Sh. Sanjay Ingle. However, they were later on examined by the prosecution as PW-15 and PW-19 respectively.
55. On 27.02.2020, as the correctness of the letters written by PWs Sh. Pramod Chhabra, Sh. Hariom Choudhary to CBI vide which various information and documents were supplied by them to CBI was not disputed by Ld. Counsels for the accused persons, the documents and letters pertaining to PWs Sh. Pramod Chhabra and Sh. Hariom Choudhary were exhibited as under:
i. The letter dated 16.11.2016 (available at pg. 1-2 in D-180) of Sh. Pramod Chhabra, General Manager (A&C), M/s Bhatia Coal Washeries Ltd along with the documents supplied by him vide the said letter are Ex. PX-1 (Colly.).
ii. The letter dated 26.08.2015 (available in D-146) and letter dt. 07.12.2015 (available in D-111) of Sh. Hariom Choudhary, Managing Director, Indo-Unique Flame Ltd, Nagpur are Ex. PX-2 and Ex. PX-3 respectively.
iii. The letter dated 18.11.2016 (available at pg. 168 in D-182) CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 26 of 194 of Sh. Hariom Choudhary, Managing Director, Indo- Unique Flame Ltd, Nagpur is Ex. PX-4.
iv. The letter dated 18.11.2016 (available at pg. 166-167 in D-
182) of Sh. Hariom Choudhary, Managing Director, Indo-
Unique Flame Ltd, Nagpur is Ex. PX-5.
v. The letter dated 15.11.2017 (available at pg. 1 in D-119) along with the documents (as are available in D-119) supplied by Sh. Hariom Choudhary, Managing Director, Indo-Unique Flame Ltd, Nagpur is Ex. PX-6 (Colly.).
56. For the purpose of clear understanding, the witnesses can be grouped as follows:
Witness(es) from: PW's Number & Name
Office of Registrar of PW-1 Sh. M.S. Pachauri
Companies PW-15 Sh. R.S. Meena
M/s B.S. Ispat Ltd. PW-12 Sh. Surendra Nath Mishra
PW-14 Sh. Bhawani Prasad Mishra
PW-16 Sh. S.S. Karnawat
PW-17 Sh. Aditya Malhotra
Ministry of Coal PW-2 Ms. Neera Sharma
PW-4 Sh. Sewak Paul
PW-6 Sh. Charan Dass Arha
PW-11 Sh. S. Krishnan
PW-22 Sh. Rajendra Singh Negi
Sh. Rishan Ryntathiang (By Affidavit)
Ministry of Steel PW-3 Sh. Deependra Kashiva
Sh. Samin Ansari (By Affidavit)
Sh. Sujoy Majumdar (By Affidavit)
IMC PW-7 Sh. Peeyush Kumar
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 27 of 194
PW-8 Sh. Rajendra Kalamkar
Coal India Ltd. PW-5 Sh. Naresh Kumar Sharma
PW-18 Sh. Amrita Acharya
Independent Witness of PW-9 Sh. Prashant Suresh Bakhle
Search & Seizure
Govt. of Maharashtra PW-13 Sh. Milind P. Barhanpurkar
PW-19 Sh. Sanjay Shankarrao Ingle
PW-20 Sh. Anand Ghate
PW-21 Sh. Maruti Ramchandra Patil
Sh. Shriram Pandurang Kadoo
(By Affidavit)
Kartikeya Coal Washeries PW-10 Sh. Mahendrajit Singh Saluja
Pvt. Ltd.
CBI PW-23 IO/Dy. SP Subhash Pandey, CBI.
Dy. SP Pradeep Kumar (By Affidavit)
Insp. S.C. Bhagwat (By Affidavit)
Insp. Sudhir Kumar (By Affidavit)
Dy. SP Sunit Pal (By Affidavit)
FROM OFFICE OF REGISTRAR OF COMPANIES
57. PW-1 is M. S. Pachauri. He is from Ministry of Corporate Affairs ("MoCA"). He deposed about the procedure of getting a company incorporated. He also told that when an incorporated company files its annual return and balance sheet with RoC annually, a company can be stated to have been in existence.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 28 of 194
58. He told that vide letter dated 18.11.2016 (page 1, D-
163), he had provided the master data, signatory details, incorporation certificate, Memorandum of Association, Articles of Association, Form No. 32 (2006 to 2012), DIR-12 (year 2014 and 2015) and Form-18 (year 2007, 2010 and 2013) with attachments of company M/s BSIL. The letter dated 18.11.2016 is Ex. PW 1/A. The documents of company M/s BSIL available from page 2-221 in D-163 are Ex. PW 1/B (Colly.).
59. In cross-examination on behalf of A-3, he was confronted with his statement u/s 161 CrPC dated 15.11.2016 wherein no fact of handing over of documents of RoC to CBI had been mentioned. The statement u/s 161 CrPC is Ex. PW 1/DX-1.
60. He told that he was not aware about the concept of pre-incorporation agreements/contracts. He was also not aware about the concept of ratification by a company after its incorporation of any acts undertaken by the promoters prior to incorporation of the company. He was cross-examined on similar lines by other accused persons as well.
61. PW-15 is Sh. R.S. Meena. During the year 2015, he was posted as Deputy Registrar in the Office of Registrar of Companies, Maharashtra at Mumbai.
62. He deposed that vide letter dated 08.04.2015 (both English and Hindi version) (page 1 & 2, D-36), he had provided documents pertaining to M/s BSIL. The letters alongwith the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 29 of 194 documents (Page 1 to 83) are Ex. PW15/A (Colly.) [Page 5 to 83 are Ex. P-13 (Colly.)]. He identified his affidavit dated 08.02.2021. The said affidavit alongwith its enclosures is Ex. PW15/B (Colly.).
63. There is no cross-examination.
FROM M/S B.S. ISPAT LTD.
64. PW-12 is Sh. Surendra Nath Mishra. He had worked with M/s BSIL as Mines Manager from March, 2010 to September, 2011. He told that as Mines Manager at M/s BSIL, he was supposed to obtain various permissions such as from DGMS, Coal Control, District Collector's etc.
65. He identified the Mining Lease executed between M/s BSIL and DMO, Yavatmal, on 07.05.2010. The Mining Lease which was already Ex. P-7 was again marked as Ex. PW12/A (Colly.) [Page 73 to 153, (D-20)].
66. There is no cross-examination.
67. PW-14 is Sh. Bhawani Prasad Mishra. He had been working with M/s BSIL since 2013. He joined M/s BSIL in the year 2013 as General Manager, Production & Project. Thereafter, in the year 2016, he was promoted as Director of the company. He told that in the year 2013, Sh. Aditya Malhotra, Sh. Ashish Pandit, Sh. Yogesh Kapoor and Sh. Rajeev Kapoor were the Directors of the company.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 30 of 194
68. He identified letter dated 31.08.2015 of Sh. Aditya Malhotra (D-31), whereby the information as sought for by CBI was provided. The said letter (1-10 Pages) alongwith annexures (11-116 Pages) is Ex. PW14/A (Colly.).
69. He identified his letter dated 29.10.2015 (D-148) (Ex. P-51) whereby he had provided various documents to CBI. These documents are Ex. PW14/B (D-102), Ex. PW14/C (Colly.) (D-103) and Ex. PW14/D (Colly.) (D-104).
70. He identified his another letter dated 28.10.2015, [Ex. P-30 (D-95)] whereby he had provided various documents to CBI. These documents are Ex.PW14/E (Colly.) (D-96), Ex.PW14/F (Colly.) (D-97), Ex.PW14/G (Colly.) (D-98), Ex.PW14/H (Colly.) (D-99) and Ex.PW14/I (Colly.) (D-100).
71. He identified his another letter dated 27.10.2015 (D-
116), whereby the information as sought for by CBI was provided. The said letter alongwith annexures is Ex.PW14/J (Colly.). He further proved his letters dated 21.11.2016 (D-161), 09.11.2016 (D-164), and 24.08.2017 (D-198). The letters alongwith enclosures are Ex. P-53 (Colly.) (Page 1 to 38); Ex. P- 54 (Colly.) (Page 1 to 334) and Ex. P-59 (Colly.) (Page 1 to 64)
72. He also identified the letters dated 03.11.2015 (D-
114) (having annexures Page 1 to 5), letter dated 14.04.2016 (D-
118) (having annexures Page 1 to 62), and letter dated 25.04.2016 (D-119) (having annexures Page 1 to 8) of Sh. Aditya CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 31 of 194 Malhotra, whereby the information as sought for by CBI was provided. The said letters alongwith annexures are Ex. P-33 (Colly.), Ex. P-34 (Colly.) and Ex. P-35 (Colly.) respectively.
73. Similarly, he proved another letter dated 01.05.2015 of Sh. Aditya Malhotra (D-143), whereby the information as sought for by CBI was provided. The said letter is Ex. P-49. The documents are already Ex. P-8 (Colly.). He also proved letter dated 22.05.2015 of Sh. Aditya Malhotra as Ex. P-50 (D-145), vide which the following documents were provided to CBI:
(1) Notarised copy of the Certificate of Incorporation of B.S. Ispat Limited. (File No.1) (D-
25).
(2) Notarised copy of the Certificate of Commencement of Business of B.S. Ispat Limited. (File No.1) (D-26).
(3) Copy of Memorandum of Association & Articles of Association of B.S. Ispat Limited at the time of incorporation. (File No.1) (D-27). (4) Original Minutes Book of B.S. Ispat Limited Since incorporation (Board Meeting, Annual General Meeting, Extra-ordinary General Meeting).
(File No.2 & File No.3, (1-64) (1-42), File No.2 A (1-15) (D-28).
(5) Original Statutory Register of B.S. Ispat Limited (I) Register of Members (ii) Register of Share Transfer (iii) Register of Directors. (File No.4) (D-
29).
74. The documents D-25 is already Ex. P-5, D-26 is already Ex. P-6, D-27 is already Ex. P-7, D-28 is already Ex. P- 11 (Colly.), and D-29 is already Ex. P-12 (Colly.).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 32 of 194
75. He further proved letter dt. 20.07.2016 (D-159) (already Ex. P-52), written by Sh. Aditya Malhotra to Inspector Subhash Pandey (D-159), vide which he had provided document D-160 to CBI, which is Ex. PW14/K (Colly.).
76. He also told that an Inter Ministerial Committee ("IMC") visited the mines, washery and plant in March, 2015 and physically inspected the coal and the plant. It had also conducted physical measurement of the coal stock and obtained various data of coal production, sponge iron production and power generation. The aforesaid data as provided to IMC was also provided to CBI.
77. There is no cross-examination.
78. PW-16 is Sh. S.S. Karnawat. He had retired from Coal India Limited ("CIL") as Chief General Manager in August 2010. Thereafter, he had joined M/s BSIL as Chief Executive Mines.
79. He told that vide letter dt. 12.04.2011 (available in D-73), M/s BSIL had placed a work order for washing/beneficiation of raw coal pertaining to Marki Mangli Coal Mine. This order was placed under the signatures of Sh. A.K. Saxena, CEO upon M/s Indo-Unique Flame Ltd., Nagpur. The photocopy of this work order was certified by him. The work order dated 12.04.2011 is Ex. PW16/A (Colly.).
80. He identified the year wise details, coal dispatch and closing stock at washery (D-102)(Ex. PW14/B) and stated that CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 33 of 194 total quantity of 5,533.17 MT coal was dispatched from the mine to M/s Indo-Unique for washing and a quantity of 4,960.96 MT was received at the plant after washing of coal during the year 2011-12.
81. He also identified the year wise details of opening coal stock, receipts, consumption, closing stock and production at CPP and SIP unit [(D-104) (Ex. PW14/D (Colly.)] and stated that during the year 2011-12, a total quantity of 4,900.11 MT in Sponge Iron Plant was consumed. A quality of coal extracted from Marki Mangli Mines was not of good quality and needed washing for consumption in SIP.
82. There is no cross-examination.
83. PW-17 is Sh. Aditya Malhotra. He is working with M/s BSIL since 2011 as Director. He identified his various letters as are referred to in evidence of PW-14 above.
84. There is no cross-examination.
FROM MINISTRY OF COAL
85. PW-2 is Ms. Neera Sharma. She is from MoC.
86. She deposed that in the year 1998-99, she was posted as Section Officer of CPAM Section, MoC. The CPAM Section used to deal with matters relating to coal block allocation both for Government as well as private companies. In the year CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 34 of 194 2003, the work relating to coal block allocation matter was transferred to CA Section from CPAM section so she was associated with such work of coal block allocation matter only till the year 2003 and not thereafter.
87. She told that during that period, Sh. S.S. Boparai was Secretary (Coal), Sh. P.K. Banerjee was Additional Secretary and Sh. N.N. Gautam was Advisor (Projects). After the retirement of Sh. P.K. Banerjee, C.D. Arha was posted as Additional Secretary. Sh. M.K. Thapar, K.P. Verma and APVN Sarma also remained posted as Joint Secretaries/Advisor (Projects). Sh. T.K. Ghosh, Parvesh Sharma and S. Choudhary were the Directors posted in MoC, looking after the work of CPAM section at different points of time. Sh. B.L. Dass and Shyam Sunder were Under Secretaries MoC. Sh. R.S. Negi was her Dealing Assistant in CPAM Section dealing with coal block allocation matters. Sh. S. Krishnan was the Deputy Secretary, MoC. She told that she could identify the handwriting and signatures of the aforesaid officers of MoC.
88. She explained the processing of applications for allocation of coal blocks which was prevalent at that time. She told that during the period 1999, applications used to be received in CPAM Section from different companies interested in seeking allocation of captive coal blocks after they were marked by Senior Officers. Thereafter they used to seek comments from CIL, CMPDIL and the concerned coal company, if required. The CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 35 of 194 applications used to be processed in the file and the same used to be put up for consideration of senior officers. In case the end use project was identified, then comments were also obtained from the concerned Administrative Ministry such as MoP, MoS, Ministry of Industry etc.
89. After receiving comments from various entities as above, the same used to be put up in the relevant file for consideration of senior officers. If the senior officers used to put or raise any query then the same used to be answered and if they directed that the given application(s) be put up for consideration before the Screening Committee then whenever the next Screening Committee meeting used to be fixed then in the agenda of the same the said application(s) used to be put up for consideration.
90. She also told that in case the officers of MoC who had attended Screening Committee meeting made any remarks qua any of the companies in the agenda then on the basis of the same a rough sketch of the minutes of the meeting used to be prepared. She further told that since CPAM section was not having any technical expertise with respect to coal blocks to be allocated so the application(s) used to be put up in the agenda as per the directions of senior officers and similar was the matter with respect to preparation of minutes. The rough draft of the minutes used to be prepared on the basis of the observations made by the officers of MoC qua various companies mentioned CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 36 of 194 in the agenda and the minutes used to be finalized only as per the directions and guidance of senior officers.
91. She told that after necessary directions used to be received from the senior officers then the rough draft agenda used to be put up before senior officers and it used to be finalized as per their direction and guidance. Thereafter notices used to be issued to the members of the Screening Committee and also to the applicant companies whose applications were to be considered in the given Screening Committee meeting for the date fixed by the senior officers. After that applicant companies who have to make presentation before the Screening Committee of their respective cases were called.
92. She told that the Screening Committee meetings used to be chaired by Additional Secretary, MoC. The Advisor (Project) MoC and Joint Secretary MoC were the member of the Screening Committee. The representatives of State Governments and that of Administrative Ministries also used to attend Screening Committee meetings.
93. She proved various files of MoC relating to the processing of the application of A-1 company/BSIL. She told that she had dealt with MoC file bearing No. 47011/1(9)/99- CPAM/CA(Vol-1) available in D-1. The file is Ex. PW 2/A (Colly.). The note sheet pages from page 1-5 are Ex. PW 2/A-1 (Colly.) and the correspondence side pages from page 1-199 are Ex. PW 2/A-2 (Colly.).
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94. She told that she had dealt with MoC file bearing No. 47011/1(9)/1999-CPAM/CA(Vol-6) available in D-6. The said file is Ex. PW 2/B (Colly.). The note sheet pages from page 1-123 are Ex. PW 2/B-1 (Colly.) and the correspondence side pages from page 1-470 are Ex. PW 2/B-2 (Colly.).
95. She identified the application moved by A-2 as Ex. P-60 (Colly.) [Page 1-2 in file Ex. PW 2/A (Colly.) (D-1)] and stated that the said application dated 28.06.1999 of M/s BSIL (addressed to Advisor (Project) MoC, seeking allocation of Marki Mangli block for their steel plant) was received on 15.7.99. She also pointed out that in the said application the company had stated that they were setting up a sponge iron plant of capacity 3 lacs tonne per annum. She told that the communication dated 19.7.99 [Ex. P-61 (Colly.)] was sent by Secretary, Trade Commerce and Mining Department, Government of Maharashtra, addressed to Secretary, MoC, recommending M/s BSIL, Nagpur for allocation of Marki Mangli block in Yavatmal District but it was further stated that a detailed review of the application and the project would be taken later on and thereafter the final recommendations would be sent by Govt. of Maharashtra. Alongwith the said communication, a letter dated 13.7.99 of Director Geology and Mining and as addressed to Secretary, Trade Commerce and Mining Department, Mumbai was also enclosed, wherein also the same facts were reiterated.
96. She told that vide note dated 17.8.99 [Page 1, in CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 38 of 194 note sheet pages Ex. PW 2/B-1 (Colly.), in file Ex. PW 2/B (Colly.) (D-6)], the application Ex. P-60 (Colly.) of M/s BSIL alongwith the recommendation of Govt. of Maharashtra, received vide communication Ex. P-61 (Colly.) were dealt with and it was proposed that comments of MoS might be obtained. She told that vide communication dt. 27.08.99 [Page 5 in file Ex. PW 2/A (Colly.) (D-1)], both CIL and CMPDIL were requested to submit their comments on the application of M/s BSIL. A copy of the said letter was also sent to MoS. Copy of the application of the company was also enclosed with her letter. Office copy of letter dt. 27.08.99 is Ex. PW 2/A-3 (Colly.).
97. She told that a detailed application dated 03.09.99 of company M/s BSIL for allotment of Marki Mangli Coal Block was received on 07.09.99. The said application of M/s BSIL is Ex. PW 2/A-4 (Colly.) [Page 8-24 in D-1, Ex. P-63 (Colly.), P- 64, P-65 and P-66 (Colly.) are part of Ex. PW 2/A-4 (Colly.)].
98. She told that vide Office Memorandum dt.
23/24.9.99 [Page 25-26 in D-1], MoS had recommended allocation of Marki Mangli Coal Block for the proposed sponge iron plant of M/s BSIL, and the same was received in MoC. The said OM of MoS is Ex. PW 2/A-5 (D-1).
99. She told that the application of M/s BSIL [Ex. PW 2/A-4 (Colly.)] and the comments of MoS [Ex. PW 2/A-5] were dealt with by Sh. R.S. Negi vide his note dt. 25.10.99 [note sheet pg. 2-3 in file Ex. PW 2/B (Colly.) (D-6)] and the same was seen CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 39 of 194 by her. In the said note, R.S. Negi had proposed to send a reminder to CIL/CMPDIL for obtaining their comments. She told that vide office copy of a letter dt. 25.10.99 [Page 27 in file Ex. PW 2/A (Colly.) (D-1)], both CIL and CMPDIL were requested to send their comments. The office copy of letter dt. 25.10.99 is Ex. PW 2/A-6 (D-1).
100. She further told that in response thereto, the reply of CMPDIL was received vide letter dt. 5.11.99 wherein CMPDIL had stated that M/s BSIL could be considered for allotment subject to obtainment of No Objection Certificate from MoS and Ministry of Industries and also indicated technical details about their sponge iron plant, quality of coal requirement, etc. before detailed comments could be submitted by CMPDIL. The letter dt. 5.11.99 is Ex. PW 2/A-7. She told that another letter dt. 9.11.99 addressed to CIL with copy marked to Section Officer, MoC was received in MoC from CMPDIL, wherein it was stated that qua Marki Mangli Block they had already sent their reply vide letter dt. 5/8.11.99. The letter of CMPDIL dt. 9.11.99 is Ex. PW 2/A-8.
101. She told that vide letter dt. 26.11.99 [Page 32 in D-1], Director Geology and Mining, Govt. of Maharashtra had informed Secretary Coal that with respect to status report and soundness of party, report has been called from concerned state department and the recommendations will be submitted to Govt. of India after receipt of said comments. The letter dt. 26.11.99 as above is Ex. PW 2/A-9.
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102. She told that vide letter dated 01.03.2000 [Page 34 in D-1], CIL had recommended M/s BSIL for allotment of Marki Mangli coal block on the basis of certain details submitted by M/s BSIL about the project. The letter dt. 01.03.2000 of CIL is Ex. PW 2/A-10.
103. She told that she had dealt with MoC file bearing no. 47011/23/99-CPAM (D-33). The file is Ex. PW 2/C (Colly.) (D-33). The note sheet from pages 1-8 in the file are Ex. PW 2/C- 1 (Colly) and the correspondence side from page 1 to 266 are Ex. PW 2/C-2(Colly).
104. She identified the file Ex. PW 2/C (Colly) (D-33) and stated that the Agenda of 15th Screening Committee was prepared in the section as per directions of Advisor (Project). The said agenda was approved by Additional Secretary C.D. Arha vide his note dated 22.12.1999 [available on page 2/N]. Thereafter, notices were issued to various members of the Screening Committee informing about the meeting of 15 th Screening Committee. The initial date of meeting of Screening Committee Meeting was fixed as 17.01.2000 but it was finally held on 06.03.2000 at Scope Complex.
105. She further told that Office Memorandum dated 28.02.2000 [Page 188-189 in file D-33 Ex. PW2/C(Colly)] was sent to Screening Committee Members for the Screening Committee meeting to be held at Scope Complex on 06.03.2000. The Office Memorandum dated 28.02.2000 is Ex. PW2/C-3.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 41 of 194
106. She also told that along with the office memorandum dated 28.02.2000 (Ex. PW2/C-3), the agenda note of the 15th Screening Committee meeting [Pages 190 to 260] relating to coal blocks to be allocated was also sent to the Screening Committee members. The said Agenda Note is Ex. PW-2/C-4. The Agenda pertaining to M/s. B.S. Ispat Ltd. is available on page 254 in file D-33 which is as under :-
"The party has requested for allocation of Marki-Mangli block for meeting the coal requirement of 5-6 ltpa of their sponge iron plant of 3 ltpa capacity. They also propose to set up a washery at pit head. The middlings generated during washing of coal are proposed to be utilized for generation of power using FBC technology. Department of Steel have opined that washed coal requirement of the party works out to be 4.8 ltpa for which ROM coal requirement will be 1.2 mtpa. They have recommended allocation of Marki-Mangli block to M/s. B.S. Ispat Ltd. with the condition that the allocation may be cancelled in case of unsatisfactory progress of implementation the sponge iron plant and mining activity.
CIL whose comments were called for have informed that whereas the party has indicated that this block is likely to be worked by underground method of mining but this block can easily be worked by opencast method. Besides this, the details such as commissioning schedule, details of investment proposals, copy of application to Ministry of Industry and Ministry of Steel and their comments are also not available. The block can, however, be considered for allotment if the above criteria are fulfilled. The party has also not indicated the details and status of the CPP in which the middlings are proposed to be utilized. Screening Committee to take a view."
107. She told that vide letter dated 23.02.2000, [Page 166 in file Ex. PW2/C (Colly) (D-33)], intimation about meeting of 15th screening committee to be held on 06.03.2000 at Scope CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 42 of 194 Building, Lodhi Road, New Delhi was sent. The letter as above is Ex. PW2/C-5 (D-33). She told that vide letter dated 10.01.2000, [available at page 95 in D-33, Ex. PW-2/C (Colly)], company M/s BSIL was informed about the 15th Screening Committee meeting to be held on 17.01.2000. The said letter is Ex. PW-2/C-
6.
108. She told that she had dealt MoC file bearing no. 47011/23/99-CPAM/(Part) (D-32). The file is Ex. PW 2/D (Colly.) (D-32). The note sheet from pages 1-16 in the file are Ex. PW 2/D-1 (Colly) and the correspondence side pages from page 1 to 239 are PW 2/D-2(Colly).
109. She further told that the Screening Committee meeting held on 06.03.2000 was Chaired by Additional Secretary (Coal), Sh. C.D. Arha. She and Sh. R.S. Negi used to be present during the meeting only for the purposes of providing any assistance, if required by the Chairman or other members thereof. In the said meeting, besides C.D. Arha, other officers of MoC were also present on behalf of MoC. During the course of said meeting signatures of all members of Screening Committee other than that of MoC officers were obtained on main attendance sheet. However, as regard MoC officers who were present in the meeting, their names were only mentioned in the attendance sheet but their signatures were not obtained over there. She identified the attendance sheet dated 06.03.2000 [Page 1 and 2 in file D-32 Ex. PW 2/D(Colly)] of officers who had participated in CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 43 of 194 15th Screening Committee. The Attendance Sheet is Ex. PW 2/D- 3(Colly). She told that on the attendance sheet [Page 3 to 5 in file D-32 Ex. PW 2/D (Colly)], signatures of representatives of applicant companies who participated in the 15th Screening Committee meeting were obtained. The said Attendance Sheet is Ex. PW 2/D-4.
110. She told that on 06.03.2000, in the Screening Committee meeting the representatives of various applicant companies were present at the venue. During the course of discussion of various applications by the Screening Committee members, the representatives of concerned applicant companies used to enter inside the meeting hall and if any query was raised by the Screening Committee members, the same used to answered by the representatives of the applicant companies. The Screening Committee members used to have discussion amongst themselves and after the meeting was concluded then minutes thereof were prepared. Since during the course of Screening Committee meetings CPAM section officials did not use to participate in the discussion so the officers of MoC who were participating in the Screening Committee meetings used to make their observations in the agenda note itself qua each item mentioned over there. The said agenda note thereafter used to be received in CPAM section and on the basis of said observations the CPAM section used to prepare a rough sketch of minutes. She further stated that even the rough sketch of minutes used to be prepared in consultation with the senior officers as even on CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 44 of 194 certain occasions the observations made in the agenda note could not be understood being not legible. Accordingly after the draft minutes used to be prepared then the same were put up by the section to the senior officers for their approval. The senior officers at times also used to make some corrections in the said draft minutes and if no fair draft had been asked for from the section then at times even the said draft minutes with all such necessary corrections as were made by senior officers used to be approved by the Additional Secretary.
111. She told that vide note dated 16.03.2000, [available at note sheet pages 1 onwards in file Ex. PW-2/D(Colly (D-32)] prepared by R.S. Negi and forwarded by her, draft minutes of Screening Committee meeting held on 06.03.2000 were put up for approval which were approved. She also told that vide office memorandum dated 04.04.2000 [Page 30-32, in file Ex. PW-2/D (Colly (D-32)], the record notes of discussion of 15 th Screening Committee meeting held on 06.03.2000 and being referred as minutes in the note sheet pages were sent to all members of Screening Committee. The Office Memorandum dated 04.04.2000 along with record minutes of meeting of 15th Screening Committee meeting [page 33 to 60] is Ex. PW-2/D-5 (Colly). In the said minutes as regard M/s. B.S. Ispat Ltd. the following facts were mentioned [At page 50 in file Ex. PW 2/D (Colly.) (D-32)]:
"Fresh Proposals CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 45 of 194
1. ........
2.......
3. M/s B.S. Ispat Ltd.
"The party requested for Marki-Mangli block for their sponge iron plant of 3 ltpa capacity requiring about 1.2 mtpa of raw coal.
The representative of the company informed the Committee that they proposed to set up their own washery at the pit-head and the middlings generated during washing would be used for generation of power in a 20 MW co- generation CPP.
In reply to a query regarding availability of 'NOC' from the MSEB, the representative of the party informed that under the existing guidelines of the Govt. of Maharashtra/MSEB, it was not necessary for the proposed 20 MW size of the CPP to be set up by them. The representative of the Ministry of Steel informed that they had already recommended the proposal for allocation of the block to the party. DGM, Govt. of Maharashtra as well as CIL also recommended allocation of the Marki-Mangli block to the company.
After due deliberation, the Committee decided to allocate Marki-Mangli block in WCL's command area to M/s. B.S. Ispat Ltd. subject to the following conditions :
i). This party will furnish to Department of Coal the guidelines of MSEB/Govt. of Maharashtra indicting that 'NOC' for the CPP is not necessary.
ii). The party will wash the coal in a washery; and
iii). The middlings produced by washing non-coking coal for its sponge iron plant will be used in the CPP.
The Committee, however, directed that the guidelines referred to above when received in the Department of Coal would be examined to ascertain its adequacy before issuance of sanction."
112. She also told that the allocation letter dated 25.04.2000 [Page 161-162 in file Ex. PW-2/D(Colly (D-32)], was sent to M/s. B.S. Ispat Ltd. The extracts of minutes of 15 th CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 46 of 194 Screening Committee meeting held on 06.03.2000 were also sent alongwith the allocation letter. The allocation letter along with extracts of Minutes of meeting is Ex. PW-2/D-6 (Colly).
113. She told that after reiterating the conditions laid down by the Screening Committee in its meeting with respect to allocation of Marki Mangli coal block to M/s BSIL, it was further stated as under:
"Formal order will be issued after the above conditions are fulfilled. Issuance of formal sanction will also be subject to examination of the guidelines referred to in (i) above, by the Department of Coal to ascertain its adequacy."
114. It was also mentioned in the allocation letter that the Screening Committee after detailed deliberation had decided in- principle to allot Marki Mangli coal block to M/s BSIL subject to the conditions as mentioned in the record notes. The aforesaid letters were processed in file Ex. PW-2/D(Colly) (D-32) on the note-sheet pages 2 and 3.
115. Thereafter various correspondence [available in file Ex. PW 2/A (Colly.) (D-1)] were made by M/s BSIL under the signatures of its directors and officers. The said correspondences were dealt with in the note-sheet pages in the relevant file. Finally vide letter dated 25.04.2001, the final allocation of Marki Mangli coal block in favour of M/s BSIL was made. The said final allocation letter was issued under the signatures of Sh. S. Krishnan, Deputy Secretary, MoC. She identified the office copy CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 47 of 194 of the said letter available at page 193-194 in file Ex. PW 2/A (Colly.) (D-1) bearing signatures of Sh. S. Krishnan. The following facts were mentioned in the said allocation letter:
"I am directed to refer to this Ministry's letter No. 47011/23/99-CPAM dated 25.4.2000 conveying the decision of the Screening Committee taken in its meeting held on 6.3.2000 to allot, in principle, Marki-Mangli block for development by M/s B.S. Ispat Limited as a captive source of supply of coal for the sponge iron plant of 3 Itpa capacity subject to compliance of certain conditions. Since the conditions stipulated in the letter under reference have been complied with, the approval of the Ministry of Coal is hereby conveyed to the development of Marki-Mangli block by M/s B.S. Ispat Limited.
2. You are requested to take necessary action for obtaining the mining lease and to comply with various legal / commercial requirements for development of the block within six months. Exploration cost in respect of the block payable to CIL/WCL/Government of Maharashtra may also be deposited within a period of six months. You are also requested to finalise the arrangements for transport of coal in consultation with the Ministry of Railways.
3. The progress in this regard should be reported to this Ministry every three months from now.
116. The office copy of allocation letter dated 25.04.2001 is Ex. PW 2/A-11 (D-1).
117. She identified MoC file bearing No. 47011/1(9)/99- CPAM/CA(Vol-II) [available in D-2], and stated that while being posted in MoC she has dealt with the said file. She pointed out her signatures/initials over various documents available in the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 48 of 194 file. The file of MoC as above is Ex. PW 2/E (Colly) (D-2).
118. In cross-examination on behalf of A-2, PW-2 admitted that vide letter dt. 11.08.2000 [Page 56/c to 57/c in file Ex. PW-2/A (Colly.)], it was conveyed by MoC that earlier intimation vide letter dt. 07.07.2000 was being withdrawn. She further admitted that vide letter dated 21.09.2000 addressed to M/s BSIL, pursuant to the note dated 14.09.2000 of Sh. T.K. Ghosh, the company was informed that the earlier allocation of Marki Mangli block to it and which was conditional allotment should be treated as withdrawn as the formal recommendation of State Govt. of Maharashtra was not received. The letter dated 21.09.2000 as above is Ex. PW 2/DX-1/A-2.
119. She admitted that vide letter dated 11.09.2000, [Ex. P-79 of Government of Maharashtra addressed to Sh. T.K. Ghosh Director MoC, Page 68/c-69/c, Ex. PW-2/A (Colly.), D-1], the final recommendation of Government of Maharashtra in favour of M/s BSIL was received in MoC. She however further stated that the said copy of recommendation of Government of Maharashtra was received in MoC vide letter dated 21.09.2000 Ex. P-78 of M/s BSIL [available at page 67/c in file Ex. PW 2/A (Colly.) (D-1)].
120. She was also cross-examined on behalf of other accused persons.
121. PW 4 is Sewak Paul. He had joined MoC in CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 49 of 194 November 1998 as UDC and since then he had been posted in MoC in one or the other section at different positions. In November 1998, he was posted as UDC in Administration Section and thereafter in March 2008, he was posted as UDC in CA-I Section, MoC.
122. He deposed that in March 2008, Sh. R.N. Singh was the Section Officer, CA-I Section, MoC. Sh. R.S. Negi and Smt. Malashree Sarkar were the other dealing hands working in CA-I Section, MoC at that time alongwith him. Sh. V.S. Rana was the Under Secretary, MoC, Sh. K.C. Samria was the Director, CA-I Section, MoC, Sh. K.S. Kropha was the Joint Secretary, Coal and Secretary, Coal was Sh. H.C. Gupta. He told that he was well acquainted with their handwriting and signatures/initials and could identify the same. In March 2008, he was one of the dealing hand in CA-I Section, MoC, dealing with work relating to allocation of captive coal blocks.
123. He told that he had dealt with file relating to M/s BSIL. He has deposed about the process of grant of mining lease to A-1 company/BSIL. He identified the MoC file Ex. PW 2/B (Colly.) (D-6) and stated that while being posted in MoC, he had dealt with the said file and pointed various note sheet pages bearing his signatures/initials. He also identified MoC file bearing No. 47011/1/(09)/99-CPAM-/CA-I-Vol.-III, (D-3) and stated that he had dealt the same while being posted in MoC. The said file is Ex. PW 4/A (Colly.).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 50 of 194
124. He told that communication dated 11.12.2007 [Pages 544-549, in file Ex. PW 4/A (Colly.) (D-3)] [documents Ex. P-163, Ex. P-164 and Ex. P-165 are part of Ex. PW 4/A (Colly.)], was received from M/s BSIL in MoC with the request for grant of approval of their mining lease already pending with MoC. He identified the note dated 24.03.2008 [Page 50/n, in file Ex. PW 2/B (Colly.) (D-6)] and stated that the communication dated 11.12.2007 of M/s BSIL was processed by him vide his note dated 24.03.2008. He told that vide the office copy of a letter dated 01.04.2008 written by Sh. R.N. Singh, Section Officer, [available at page 599, in file Ex. PW 4/A (Colly.) (D-3)], Govt. of Maharashtra was requested to furnish its comments/views with regard to the proposal for grant of prior approval of Central Government u/s 5 (1) of MMDR Act, 1957 qua mining lease submitted by M/s BSIL. The office copy of letter dated 01.04.2008 is Ex. PW 4/A-1.
125. In response thereto, Govt. of Maharashtra sent a communication dated 15.04.2008 to Secretary Coal, stating that the related Court matter has since been disposed of by Hon'ble High Court, Nagpur Bench and thus the mining lease submitted by M/s BSIL might be processed for approval. The letter dated 15.04.2008 is Ex. PW 4/A-2 [Page 600 in D-3)].
126. He identified office copy of the communication dated 10.09.2009 [Page 652-677 in file Ex. PW 4/A (Colly.) (D-3)], and stated that vide the said letter, the administrative CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 51 of 194 approval of the Central Government u/s 5 (1) MMDR Act, 1957 for grant of mining lease in favour of M/s BSIL over an area of 682.78 hectares at village Marki (Kh), Marki (Bk), Pandharkawda, Ganeshpur and Pardi District, Yavatmal was conveyed. The letter dated 10.09.2009 is Ex. PW 4/A-3 (Colly.).
127. He told that vide communication dated 12.01.2010 addressed to Joint Secretary, Coal [Page 678-701 in file Ex. PW 4/A (Colly. (D-3)], company M/s BSIL had sought permission for use of balance middlings left after meeting requirement of their 20 MW CPPC to be used captively in their proposed IPP to be set up by M/s BSIL. The letter dated 12.01.2010 of M/s BSIL is Ex. PW 4/A-4 (Colly.). The said communication was dealt with by CA-1 section vide note dt. 25.02.2010 [note sheet page 79-80 in file Ex. PW 2/B (Colly.) (D-6)]. Subsequently company M/s BSIL vide letter dt. 17.05.2010 addressed to Secretary (Coal) [Page 702-1187 in file of MoC bearing No. 47011/1/(9)/99- CPAM/CA-1 (Vol. IV) (D-4)] sought approval for transfer of coal mining rights as held by M/s Gondwana Ispat Ltd in Majra Belgaon Coal Block allocated to the company in M/s BSIL as the company M/s Gondwana Ispat Ltd had since been merged in M/s BSIL pursuant to Orders of Hon'ble High Court of Bombay dt. 04.07.2008.
128. He told that he had also dealt with file of MoC bearing No. 47011/1/(9)/99-CPAM/CA-1 (Vol. IV) (D-4) while being posted in MoC and pointed out the relevant note sheet CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 52 of 194 pages available in D-6 while dealing with the aforesaid communication of M/s BSIL. The said MoC file is Ex. PW 4/B (Colly.) (D-4). The communication of M/s BSIL dt. 17.05.2010 available from pg. 702-1187 in D-4 is Ex. PW 4/B-1 (Colly.).
129. He further told that the said communication was subsequently dealt with by him vide a detailed note dt. 15.06.2010 [Page 81/n to 82/n in file Ex. PW 2/B (Colly.) (D-6)].
130. He identified another file of MoC file bearing no. 47011/1/(09)/99-CPAM/CA-1 (Vol. V) (D-5) which was dealt with by him while being posted in MoC. The said file also contains correspondence undertaken between company M/s BSIL and MoC pertaining to the request of company seeking merger of M/s Gondwana Ispat Ltd with M/s BSIL. The file is Ex. PW 4/C (Colly.) (D-5). The file Ex. PW 2/B (Colly.) (D-6) also contains certain portion of the correspondence undertaken in this regard between M/s BSIL and MoC.
131. There is no cross-examination.
132. PW-6 is Charan Dass Arha. He was posted in MoC, Govt. of India from August 1999 till October 2002 as Additional Secretary and thereafter till April 2003, he was posted as Special Secretary.
133. He deposed that during the said period the applications received for seeking allocation of coal blocks for captive use from companies engaged in production of iron and CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 53 of 194 steel, generation of power, production of cement were being considered by a Screening Committee as was constituted in MoC under the chairmanship of Additional Secretary. The said Screening Committee was an inter-ministerial and inter- departmental Committee comprising representatives from various Administrative Ministries, State Govts. and that of CIL and its subsidiary companies. In the said Screening Committee meetings, the applicant companies were also given a chance to make a presentation of their case and the Committee members after deliberation and discussion used to take decision as to which of the coal blocks under consideration be allotted to any given applicant company. The minutes of the said meetings used to be subsequently prepared in MoC and were circulated to all the members of the Committee who were present in the said meeting. As per the Govt. of India policy, private investment in the coal sector was permitted and accordingly any private company engaged in production of iron and steel, or cement or generation of power were eligible to apply for allocation of a coal block for their captive use. He told that as Chairman of one such Screening Committee he had dealt with the application of B.S. Ispat Ltd.
134. He told that he had dealt with MoC file Ex. PW 2/D (Colly.) bearing No. 47011/23/99-CPAM (part) (D-32). He identified the record note of discussion of 15th Screening Committee meeting held on 06.03.2000 at 11.00 AM at Scope Building, Lodhi Road, New Delhi stating it to be the minutes of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 54 of 194 15th Screening Committee meeting which was Chaired by him.
135. He told that he had also dealt MoC file bearing no. 47011/1(9)/1999-CPAM/CA-1 (Vol. VI) [Ex. PW 2/B (Colly.) (D-6)].
136. He told that subsequently Director, CPAM vide his note dt. 10.08.2000 had put a draft letter to be sent to M/s B.S. Ispat Ltd. in terms of his directions contained in note dt. 09.08.2000. The said draft letter is the same as is available from pg. 54-55 in MoC file [Ex. PW 2/A (Colly.) (D-1)] and he in his own hand had made certain corrections in the said draft letter. The said draft letter is Ex. PW 6/A (D-1). He identified the office of letter dt. 11.08.2000, Ex. P-75 [available at pg. 56-57 in file Ex. PW 2/A (Colly.) (D-1)], issued to M/s B.S. Ispat Ltd under the signatures of Sh. T.K. Ghosh Director CPAM.
137. He told that subsequently CPAM section put up a note dt. 18.10.2000 (at note sheet page 17) stating that M/s B.S. Ispat Ltd. had yet not submitted final recommendation of Govt. of Maharashtra in terms of Screening Committee decision and the orders of Additional Secretary, Coal and till the time the said condition was fulfilled the allotment of the block to it should be treated as withdrawn. It was also informed that vide letter dt. 21.09.2000 party was again advised to expedite the formal recommendation of Govt. of Maharashtra failing which MoC will refer the issue again to Screening Committee for appropriate action including cancellation. It was also informed that party had CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 55 of 194 been advised not to go ahead with various activities concerning development of the block till then. Thereafter it was stated that Govt. of Maharashtra vide letter dt. 11.09.2000 and 18.09.2000 had recommended to allot Marki Mangli Coal Block to M/s B.S. Ispat Ltd for captive mining of coal for their 3 LTPA sponge iron plant. Orders were thus sought as to whether orders restoring the blocks to the party may be issued. When the matter came to his desk then he enquired as to how many blocks the Group had taken. Accordingly, after enquiry CPAM section put up a note dt. 02.11.2000 that M/s B.S. Ispat Ltd had been allotted only one block i.e. Marki Mangli.
138. He told that finally allocation letter of Marki Mangli block for captive mining in favour of M/s B.S. Ispat Ltd for their sponge iron plant of 3 LTPA capacity dt. 25.04.2001 [Ex. PW 2/A-11] was issued.
139. In cross-examination on behalf of A-1 company, PW-6 was generally questioned regarding meaning of the word "company" for the purpose of applying for allocation of coal block. PW-6 replied that provisions of MMDR Act, 1957 and CMN Act 1973 might be looked into.
140. In cross-examination on behalf of A-3, copy of one letter dated 25.04.2000 issued to M/s Jayaswal Neco Ltd. (Page 156-157 in D-32) was marked as Ex. PW 6/DX-1/A-3 (D-32). Similarly, copy of letter dt. 25.04.2000 issued to M/s Raipur Alloys and Steel Ltd was also marked as Ex. PW 6/DX-2/A-3 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 56 of 194 (Page 160 in D-32). Copy of another letter dt. 25.04.2000 issued to M/s Central Collieries Company Ltd. by MoC with respect to allocation of part of Takh-Jane-Bellora Coal Block was also marked as Ex. PW 6/DX-3/A-3 (Page 163 in D-32). Another letter dt. 29.01.2001 (Page 110-111 in D-1) was also shown to the witness and same was marked as Ex. PW 6/DX-4/A-3 (Colly.). Copy of statement u/s 161 Cr. PC dt. 03.06.2015 of PW- 6 was also marked as Ex. PW 6/DX-5/A-3.
141. Nothing substantial has come in cross-examination on behalf of A-2.
142. PW 11 is Sh. S. Krishnan. He had retired as Dy. Secretary, MoC, Government of India in June 2002. In the year 1992, he was posted as Under Secretary in MoC itself.
143. He told that he had dealt with MoC file bearing No. 13011/3/92-CA (as is available in D-168). The copy of the MoC file is Ex. PW 11/A (Colly.) (D-168) and the note sheet pages from pg. 1-6 are Ex. PW 11/A-1 (Colly.) and the correspondence side pages 1-46 are Ex. PW 11/A-2 (Colly.).
144. He identified page no. 29 on correspondence side and stated that vide the said OM dt. 14.07.92 issued under his signatures, the constitution of a Screening Committee for screening proposals received for captive mining by private power generation companies as was decided to be constituted in MoC was notified. The office copy of OM dt. 14.07.92 is Ex. PW CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 57 of 194 11/B.
145. He identified the office copy of a communication dt. 19.08.92 (Page 30) issued to Chief Secretary of Govt. of Bihar, Maharashtra, Madhya Pradesh, Orissa, West Bengal, Assam, Andhra Pradesh, Uttar Pradesh and Meghalaya under his signatures, communicating the composition of Screening Committee as above in MoC and they all were requested to inform the name, address and telephone number of the representative of State Govts. as had been nominated to the Screening Committee by the concerned State Governments. Office copy of letter dt. 19.08.92 is Ex. PW 11/B-1. After seeing pg. no. 38 witness said vide the said OM dt. 30.07.93, the composition of Screening Committee was further modified by MoC. He told that the said OM was issued under the signatures of Sh. J.L. Meena, Dy. Secretary, MoC and he is well acquainted with his signatures and handwriting. The office copy of OM dt. 30.07.93 is Ex. PW 11/B-2.
146. There is no cross-examination.
147. PW-22 is Sh. Rajender Singh Negi. He was working in MoC since 1981. In the year 2003, he was promoted as Office Suptd. and thereafter retired from service on 31.10.2020.
148. He deposed that during the year 1999-2001, he was posted in the CPAM Section as a Sr. Clerk. He told that he had CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 58 of 194 dealt with MoC File [Ex. PW2/A (Colly.) (D-1)] and [Ex. PW2/B (Colly.) (D-6)]. He told that vide Note dated 09.08.2000 of Sh. C.D. Arha, the then Additional Secretary (available on Page 12/N of D-6) he had directed to issue a fresh notice to the party requesting it to submit formal recommendation of "GOMAH" and until that was done, no further action be taken.
149. He identified the letter dated 11.08.2000 issued under the signature of Sh. T.K. Ghosh, the then Director, MoC (available in File D-1 on Page 56-57), already Ex. P-75 and stated that vide this letter, M/s B.S. Ispat Ltd. was informed as under:
" The approval of the Govt. conveyed to M/s B.S. Ispat Ltd. for development of Marki-Mangli block as captive source of supply of coal to their sponge iron plant of 3 Itpa capacity vide this Ministry's letter of even number dated 7.7.2000, based on incomplete data and pending the receipt of the requisite recommendation of the State Govt. referred to above is withdrawn.
You are, therefore, advised to approach the State Govt. to expedite submission of their formal recommendation in regard to your application for allocation of Marki-Mangli block for captive use for supply of coal to your sponge iron plant to the Ministry of Coal and until this is done, development of this block (Marki-Mangli) allotted to you should be treated as withdrawn. A copy of this letter is being endorsed to the Govt. of Maharashtra, Trade, Commerce and Mining Department also".
150. He told that in response to letter dt. 11.08.2000 (Ex. P-75), M/s B.S. Ispat Ltd. vide letter dt. 23.08.2000 (available on CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 59 of 194 Page 60/C in File D-1) requested to withdraw the letter dated 11.08.2000. The letter dated 23.08.2000 is already Ex. P-76.
151. He identified his Note dated 14.09.2000 (available on Page 14/N in File D-6) which was put up before the Section Officer Ms. Neera Sharma and stated that vide this Note, the response of M/s B.S. Ispat Ltd. dated 23.08.2000 was put up. Ms. Neera Sharma forwarded this Note on 14.09.2000. The Note was put up before the Additional Secretary and he asked the Director to speak. Thereafter, Sh. T.K. Ghosh vide Note dated14.09.2000 (available on Page 15/C of D-6) recommended as under:
" If the recommendation of Govt. of Maharashtra is not received then MoC will have no option but to take it to the Screening Committee for its cancellation. We may inform the party that unless recommendation of Govt. of Maharashtra is received and MoC allots the block to them, the question of their going ahead with their various activities concerning development of the block does not arise. After AS's approval, draft will be put up".
152. He told that the aforesaid Note was approved by Sh. C.D. Arha on 14.09.2000. Accordingly, a letter dated 21.09.2000 (Pages 61 to 63 in D-1) to M/s B.S. Ispat Ltd. which is Ex. P-77 (Colly.) Vide this letter, MoC observed as under:
" You were, therefore, advised to approach the State Govt. to expedite submission of their formal recommendation in regard to your application for allocation of Marki-Mangli block for captive use for supply of coal to your sponge iron plant to this Ministry and until this is done, the conditional allotment of this block (Marki-Mangli) allotted to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 60 of 194 you should be treated as withdrawn as the conditions stipulated have not been full-filled. The above advice is reiterated and you are once again advised to expedite the formal recommendation of the State Govt. of Maharashtra in this case and if the recommendation of the Govt. of Maharashtra is not received, then Ministry of Coal will have no option but to refer the issue in its entirely to the Screening Committee for further appropriate action, including cancellation. Further, unless recommendation of the Govt. of Maharashtra is not received and Ministry of coal order withdrawing the allotment of the block to you is not rescinded, the question of your going ahead with various activities concerning development of the block does not arise and will be construed as gross violation".
153. He told that vide letter dated 11.09.2000 (Page 75/c, D-1), Govt. of Maharashtra recommended MoC to allot Marki Mangli Coal Block of Yavatmal District to M/s B.S. Ispat Ltd. for captive mining of coal for their 3 MTPA capacity sponge iron plant. The said letter is Ex. PW22/A.
154. He identified the letter dated 18.09.2000 (Page 74/c, D-1), and stated that this letter was received from Govt. of Maharashtra in MoC on 04.10.2000. The said letter is Ex. PW22/B.
155. He told that both these letters dated 11.09.2000 (Ex. PW22/A) and dated 18.09.2000 (Ex. PW22/B) were dealt with in File D-1 on the Note-sheet Page 17/N vide Note dated 18.10.2000. He identified the final allocation letter dated 25.04.2001 [Page 193/C, Ex. PW2/A-11, D-1], issued under the signature of Sh. S. Krishnan, the then Deputy Secretary.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 61 of 194
156. In cross-examination on behalf of A-2, he admitted that while processing the issue of final approval to be granted to M/s B.S. Ispat Ltd., a question was raised by Sh. C.D. Arha about the number of coal blocks owned by this group. He further admitted that vide letter dt. 31.01.2001, a certificate issued by Sh. Manish Pande dt. 27.01.2001 [Ex. P-95 (Colly.)] was communicated to the MoC wherein inter alia the registration number of M/s B.S. Ispat Ltd. was specifically communicated to the MoC. The letter dt. 31.01.2001 is Ex. PW22/DX-1. He further admitted that before issuance of the final allocation letter dt. 25.04.2001 (Ex.PW2/A-11), the MoC was already informed about the fact of registration of M/s B.S. Ispat Ltd.
FROM MINISTRY OF STEEL
157. PW-3 is Deependra Kashiva. He is from MoS. During the period 1999-2000 he was posted as Development Officer in Industrial Development Wing (IDW), MoS.
158. He explained the procedure relating to processing of applications for allocation of coal blocks received by MoS from MoC. He told that the IDW of MoS used to deal with matters related to private sector pertaining to sponge iron, pig iron and steel for their raw material requirement, technology related issues etc. IDW also used to deal with coal block allocation matters in MoS. As Development Officer he was to examine the applications received qua the aforementioned issues from the point of view of technical aspects only. For coal block allocation CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 62 of 194 matters his job was to ascertain the relationship between the proposed item of manufacture and the proposed coal block whose allocation was sought for and to also assess the requirement of coal for the proposed end use project in accordance with the prescribed norms of MoS.
159. He told that during the period from 1999-2000 Ms. Anita Chawla was the dealing assistant, Sh. Shiv Kumar was the Section Officer, Ms. Neel Kamal was the Dy. Secretary; Sh. S. Manoharan was Joint Secretary (Steel) and Sh. A. C. R. Dass, Deputy Industrial Advisor. He stated that he is well acquainted with their handwriting and signatures/ initials and could identify the same
160. He told that he had dealt with the file of M/s B.S. Ispat Ltd. He identified MoS file bearing No. 15(10)/99-IDS (available in D-115) and stated that while being posted in Ministry of Steel he had dealt with the same. The said file is Ex. PW 3/A (Colly.) (D-115); the note sheet pages from page 1-48 are Ex. PW 3/A-1 (Colly.) and the correspondence side pages i.e. from page 1-186 are Ex. PW 3/A-2 (Colly.).
161. He told that vide letter dated 27.08.99 [Page 1 on correspondence side pages Ex. PW 3/A-2 (Colly.)], copy of application of M/s BSIL dated 28.06.99 seeking allocation of Marki Mangli coal block for captive use in their steel plant was received for comments on the proposal. He identified the application of M/s BSIL (Page 2 and 3), to be the same which CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 63 of 194 was received alongwith letter dated 27.08.99 of MoC. The letter alongwith application of M/s BSIL is Ex. PW 3/A-3 (Colly.).
162. He told that another application of M/s BSIL dated 03.09.99 [Page 4-21 on correspondence side pages in file Ex. PW 3/A (Colly.)], was directly received in MoS and stated that he marked it to the Section Officer. The application dated 03.09.99 of company M/s BSIL is Ex. PW 3/A-4 (Colly.). He identified the note sheet page 1-5 in file Ex. PW 3/A (Colly.) and stated that both the applications of M/s BSIL i.e Ex. PW 3/A-3 (Colly.) and Ex. PW 3/A-4 (Colly.) were jointly processed in IDW, MoS vide note dated 15.09.99 of Ms. Anita Chawla and the file was thereafter put up before Section Officer. Vide note dated 15.09.99, the Section officer marked the file to him and he after examining the applications vide his note dated 17.09.99 forwarded it to Joint Secretary as Deputy Secretary was not available, being away to tour. However, subsequently the file was again marked to the Deputy Secretary by the Joint Secretary and vide note dated 22/9, the Deputy Secretary again forwarded the file to Joint Secretary with the proposal that recommendation in favour of the company for allocation of a captive coal block may be made to MoC as the proposal of the company is in accordance with the policy of MoS in recommending companies for allocation of captive coal blocks. After approval of the said proposal by the Joint Secretary, the file moved down and in that process, he marked it to the Section Officer. Thus in accordance with the approval granted by Joint Secretary (Steel), the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 64 of 194 recommendation of MoS in favour of M/s BSIL for allocation of Marki Mangli captive coal block was sent to MoC vide office memorandum dated 23/24-9-1999 issued under his signatures. The office memorandum (Page 22-23 on correspondence side) is Ex. PW 3/A-5.
163. He identified his signatures and that of A.C.R. Dass on the attendance sheet of the officers who participated in the 15 th Screening Committee meeting held on 06.03.2000 Ex. PW 2/D-3.
164. He told that vide office memorandum dated 04.04.2000, [Page 25-26, in file Ex. PW 3/A (Colly.) (D-115)], extracts from the minutes of 15th Screening Committee meeting held on 06.03.2000 pertaining to M/s BSIL were received from MoC. He identified the extracts of minutes available from page 27-28 to be the same which were received alongwith office memorandum dated 04.04.2000. The said office Memo is Ex. PW 3/A-6 and the extracts of minutes are Ex. PW 3/A-7.
165. He identified the letter dated 25.04.2000 [available at page 29-31, in file Ex. PW 3/A (Colly.)] and stated that copy of allocation letter issued in favour of M/s BSIL by MoC qua allocation of Marki Mangli coal block for captive use in the sponge iron plant 3 LTPA capacity of the company was marked to him by Deputy Secretary and he marked it to IDS i.e. Industrial Development Section. The said copy of allocation letter is Ex. PW 3/A-8 (Colly.).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 65 of 194
166. In cross-examination on behalf of A-2, he admitted that in the note dated 22/9 of Ms. Neel Kamal Deputy Secretary, Ministry of Steel, available at note sheet page 5 in file Ex. PW 3/A (Colly.) (D-115), while stating that the proposal of the company was as per policy and that MoS might recommend to MoC for allocation of captive coal block, it was also stated that the recommendation might be made with the condition that the allocation would be cancelled if the project implementation progress was not satisfactory. He admitted that the recommendation of MoS to MoC was thus conditional to the effect that the allocation might be cancelled in case the project implementation progress was not satisfactory. He admitted that in letter dated 03.09.99 [Ex. PW 3/A-4 (Colly.) (D-115)], the company M/s BSIL had also mentioned about their two group companies i.e. M/s Abhishek Steel Mills Ltd. as having two plants located in Secundarabad and Nagpur to produce structural steel and another company M/s Gautam Rolling Mills (P) Ltd. having a plant at Hyderabad to produce wire rods and CTD bars.
167. Upon being asked as to what was the policy of Ministry of Steel in compliance with which recommendation in favour of any company used to be made by Ministry of Steel to MoC for allocation of a captive coal block and to which witness stated that as mentioned in para 5 of his note dated 17.09.99 available from page 4-5 in note sheet pages Ex. PW 3/A-1 (Colly.) in file Ex. PW 3/A (Colly.) (D-115) that the effective steps must have been taken by the applicant company towards CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 66 of 194 establishing the proposed plant. However no further classification or definition of the said term "effective steps" was laid down. Witness however further stated that if an applicant company has applied for IEM from Ministry of Industries, Government of India or has taken some effective steps for obtaining or procuring land for the plant and similar steps for procuring machinery for the plant then the applicant company could have been termed as having undertaken effective steps towards establishing the proposed project.
168. He admitted that M/s BSIL had submitted another letter dated 01.03.2001 to Sh. A.K. Agrawal, Secretary, Ministry of Steel, Government of India stating that earlier the Screening Committee in its meeting held on 06.03.2000 had allocated Marki Mangli coal block in favour of M/s BSIL and MoC had also communicated about allocation of the coal block vide its letter dated 07.07.2000 but later on vide letter dated 11.08.2000, MoC asked us for getting the formal recommendation of Government of Maharashtra expedited. It was also stated that Government of Maharashtra has since forwarded their final recommendation to MoC vide letter dated 11.09.2000 and 18.09.2000 for allotment of the said coal block. It was also stated that as Ministry of Steel on one or the other ground is not giving clearance to the company to proceed further with development of the said coal block so a request was made that Secretary, Ministry of Steel may use his own office to ask MoC to give green signal to proceed with the developed of captive coal block.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 67 of 194 It was also mentioned that earlier in a meeting held on 27.01.2001, Secretary, Steel had promised to take up the said matter with Secretary, Coal. The said letter was processed in Ministry of Steel and bears my signatures dated 7/3 at point A. The letter dated 01.03.2001 of M/s BSIL as above is Ex. PW 3/DX-1.
169. He admitted that OM dated 12.04.2001 was issued under his signatures [available at page 64 in file Ex. PW 3/A (Colly.) (D-115)], the copy of application received from M/s BSIL was sent to MoC for sympathetic consideration. The OM dated 12.04.2001 as above is Ex. PW 3/DX-2.
170. He admitted that vide letter dated 25.04.2001, MoC had conveyed its approval to M/s BSIL for development of Marki Mangli coal block stating that as the condition stipulated in the letter dated 25.04.2000 [Ex. PW 3/A-8 (Colly.) available from page 29-30 in D-115] have since been complied with. A copy of the said letter was also received in Ministry of Steel. The said letter also bears my initials dated 20/4. The letter dated 25.04.2001 available at page 65-66 in D-115 is Ex. PW 3/DX-3.
171. He was not cross-examined on behalf of other accused persons.
FROM INTER-MINISTERIAL COMMITTEE
172. PW-7 is Sh. Peeyush Kumar. During the period CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 68 of 194 2014-15, he was posted as Director (Technical), MoC.
173. He deposed that during 2013-14, a complaint was received in MoC from one Sh. Hansraj Ahir regarding theft of coal being committed by M/s BSIL. In order to inquire into the said complaint, an Inter-Ministerial Committee ("IMC") was constituted in MoC and he was appointed as Chairman of the said Committee. The representatives of MoP, MoS, CMPDIL, Office of Coal Controller and State Govt. of Maharashtra were members of the said Committee. A "Terms of Reference" was also given to the Committee qua which the committee was to inquire into. He deposed that the Committee members including himself visited the said coal block i.e. Marki Mangli-I and the power plant site and the steel plant site and that of the washery of the company in Maharashtra. The committee members interacted with the officers of BSIL at the aforesaid site and also obtained certain information from them besides obtaining certain record/information from the office of coal controller, Govt. of Maharashtra, MoP and MoS. He further deposed that after analyzing the aforesaid record and information, the Committee prepared its report and submitted the same to MoC. Copy of the said record and report were also provided to CBI. He identified "IMC Report" [at Page 3-20 in D-92]. The report is Ex. PW 7/A (Colly.).
174. In cross-examination on behalf of A-3, Office Memorandum dt. 17.04.2014 vide which IMC as above was CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 69 of 194 constituted by MoC [Page 50-65 in D-23] was marked as Ex. PW 7/DX-1/A-3 (Colly.) (D-23).
175. In cross-examination on behalf of A-1 company, PW-7 stated that as per the documents submitted by M/s BSIL, there did not appear to be any loss or theft of coal. The extracted coal found lying at the site of coal mine, power plant, washery and the sponge iron plant was got measured.
176. PW-8 is Sh. Rajendra Kalamkar. He deposed that during the period 2013-2015, he was working as Joint Director in Directorate of Geology and Mining, Govt. of Maharashtra, Nagpur. He was also part of the Inter-Ministerial Committee ("IMC") constituted by MoC to inquire into a complaint of theft of coal received by them. He deposed about producing certain records from their office pertaining to Marki Mangli-I coal block as was allotted to M/s BSIL. The said documents were seized by IO vide production-cum-seizure memo dt. 09.04.2015 and the same is Ex. PW 8/A (D-140).
177. He identified the file bearing No. MLV-Y-202/99 of the office of Directorate of Geology and Mining, Govt. of Maharashtra and the same is Ex. PW 8/B (Colly.) (D-16). He identified the mining plan for Marki Mangli coal project (Vol. I) of November 2002 submitted by M/s BSIL (available in D-17). The said mining plan is Ex. PW 8/C (Colly.) (D-17). He identified the revised mining plan for Marki Mangli coal project CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 70 of 194 of March 2003 which was submitted by M/s BSIL (available in D-18) which is Ex. PW 8/D (Colly.) (D-18). He had also provided certain other records from his office pertaining to Marki Mangli-I coal block as was allotted to M/s BSIL which were seized by IO vide production-cum-seizure memo dt. 07.12.2015 and the same is Ex. PW 8/E (D-151). He also identified the file bearing No. TECH 1513/98 of the office of Directorate of Geology and Mining, Govt. of Maharashtra (available in D-108), and the same is Ex. PW 8/E-1 (Colly.) (D-108). He also identified the file bearing No. TECH 1535/1999 of the office of Directorate of Geology and Mining, Govt. of Maharashtra (available in D-109), which is Ex. PW 8/E-2 (Colly.) (D-109).
178. He told that during the course of investigation, he had also provided certain other records from his office pertaining to Marki Mangli-I coal block which were seized by IO vide production-cum-seizure memo dt. 15.01.2016 which is Ex. PW 8/F (D-152). He identified the Geological Report on exploration for coal in Marki Mangli-Mukutban Area, Tahsil Jhari-Jamni, District : Yavatmal prepared by Directorate of Geology and Mining, Government of Maharashtra, Nagpur, Report No. 278 [Pages 1-301 along with Maps 1-33 as is available in D-110] to be same file report which was handed over by him to IO Inspector Subhash Pandey vide memo dt. 15.01.2016. The geological report is Ex. PW 8/F-1 (Colly.) (D-110).
179. He told that vide letter dt. 30.03.2016, addressed to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 71 of 194 Inspector S.C. Bhagwat of CBI, the old record pertaining to constitution of State Level Committee ("SLC") in Govt. of Maharashtra for making recommendation to MoC qua allocation of various coal blocks to different applicant companies was provided. He identified the 32 pages available along with his letter dt. 30.03.2016 to be the same which were so provided by him and were duly certified by him under his signatures and stamp. The letter dt. 30.03.2016 along with its enclosures as above are Ex. PW 8/G (Colly.) (D-170).
180. In cross-examination on behalf of A-1 company, he was confronted with portion A to A and B to B of his statement u/s 161 Cr. PC dt. 15.01.2016. The statement u/s 161 Cr. PC dt. 15.01.2016 is Ex. PW 8/DX-1/A-1.
FROM COAL INDIA LTD.
181. PW-5 is Naresh Kumar Sharma. During the period 1998-99, he was working as Director (Technical), Coal India Ltd. and was posted at Kolkata.
182. He deposed about procedure for identification of coal block for captive use to Govt. and private companies engaged in generation of power, production of iron and steel and cement. He explained that the identification of coal blocks by CIL thus meant as those coal blocks on which CIL or any of its subsidiary companies were not likely to work for a considerable CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 72 of 194 period of time. Moreover these blocks used to be greenfield areas and not adjoining to the already working mines of CIL or its subsidiary companies.
183. He proved letter dated 15.12.99 [Page 33 in MoC file Ex. PW 2/A (Colly.) (D-1)], vide which CIL had informed MoC that the Marki Mangli block could be considered for allocation to M/s BSIL provided other criteria were met by the company i.e. meeting minimum 1 MTPA production level norm from open cast mining. The letter dated 15.12.99 is Ex. PW 5/A (D-1).
184. He had attended 15th Screening Committee meeting at MoC. He identified the record note of discussion of 15 th Screening Committee held on 06.03.2000 at Scope Building, Lodhi Road i.e. Ex. PW 2/D-5 (Colly.) (D-32), stating them to be the minutes of 15th Screening Committee meeting which was attended by him.
185. There is no cross-examination.
186. PW-18 is Sh. Amrita Acharya. Prior to 2011, he was working in the Office of Coal Controller, Kolkata as Officer on Special Duty ("OSD").
187. He identified the production-cum-seizure memo dated 26.11.2015 (D-150), vide which Sh. Sujoy Majumdar produced the following files before Inspector Subhash Pandey, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 73 of 194 CBI:
(i) One file of Govt. of India, Ministry of Coal, Office of the Coal Controller relating to Mine opening permission of Marki Mangli-I coal block allocated to M/s B.S. Ispat Ltd. containing pages 1 to 93 and note pages 1 to 7 (D-106); and
(ii) One File of Office of the Coal Controller relating to annual coal production reports and annual grade declarations of Marki Mangli-I coal block allocated to M/s B.S. Ispat Ltd. containing pages 1 to 71 (D-107).
188. The said production-cum-seizure memo is Ex. PW18/A. The File (D-106) is Ex. PW18/B (Colly.) and File (D-
107) is Ex. PW18/C (Colly.).
189. He told that he had dealt with the File (D-106). The noting portion from Page 1 to 7 is Ex. PW18/B-1 (Colly.) and correspondence side from pages 1 to 93 is Ex. PW18/B-2 (Colly.). He also identified the letter dated 25.05.2010 issued under his signatures [Page 92 in File (D-106)] and stated that vide this letter, prior permission was granted for opening Top Seam and Bottom Seam at Marki Mangli coal block of M/s BSIL. The letter is Ex. PW18/B-3. He identified the revised application dated 13.01.2010 of M/s BSIL regarding permission under Clause 9(1) of Colliery Control Rules, 2004, which was received in the Office of Coal Controller, Kolkata on 21.01.2010 and bears his signature and endorsement. The application dated 13.01.2010 [available in File D-106 from Page 87 to 33] is Ex.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 74 of 194 PW18/B-4 (Colly.).
190. There is no cross-examination.
INDEPENDENT WITNESS OF SEARCH & SEIZURE
191. PW- 9 is Sh. Prashant Suresh Bakhle. He was posted as Branch Manager, Nagpur Nagrik Sahakari Bank Ltd, Lakadganj Branch, Nagpur since May 2017. He had handed over certain documents to CBI.
192. He identified the letter dt. 31.07.2017 (Page 1 in D-
195), addressed to Dy. SP CBI and issued under his signatures vide which he had handed over the original account opening form and specimen signatures card of current account no. 952 favouring Mohan Kumar Brindaban Agrawal. He had also provided to CBI the original cheques, which were issued in Current Account No. 952 and the details of the same were mentioned in a tabular chart enclosed with the letter (at pg. 2 in D-195). All the aforesaid documents were provided by him to CBI in reference to their letter dt. 04.05.2017. The said letter along with the documents as above was received by Dy. SP Subhash Pandey of CBI. The letter dt. 31.07.2017 is Ex. PW 9/A (Colly.) (D-195). He identified 09 original cheques (available from D-204 to D-212) which were issued under the signatures of Sh. Mohan Lal Bindraban Agrawal and stated that he handed over these cheques to Dy. SP Subhash Pandey vide his letter dt.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 75 of 194 31.07.2017. The nine original cheques are Ex. PW 9/B (Colly.) [available in D-204 to D-212].
193. He identified the original specimen signature card and the original account opening form with respect to current account no. 952 (as are available in D-213 and D-214 respectively), to be the same documents which were handed over by him to Dy. SP Subhash Pandey vide his letter dt. 31.07.2017. The original specimen signature card and the original account opening form are Ex. PW 9/C (D-213) and Ex. PW 9/D (Colly.) (D-214).
194. There is no cross-examination.
FROM GOVT. OF MAHARASHTRA
195. PW-13 is Sh. Milind P. Barhanpurkar. In the year 2010, he was posted as District Mining Officer ("DMO") at Yavatmal, Maharashtra. He had retired from service in July, 2020.
196. He identified the Mining Lease executed between M/s BSIL and DMO Yavatmal on 07.05.2010 (D-20) [Ex. PW12/A (Colly.)], signed by him as DMO of Yavatmal.
197. He identified the Lease File of M/s BSIL. Marki Mangli Coal Block, File-II containing Pages from 1 to 266 (D-
20) and stated that he had dealt with this file as DMO. The said CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 76 of 194 file is Ex. PW13/A (Colly.)
198. There is no cross-examination.
199. PW-19 is Sh. Sanjay Shankarrao Ingle. He is Joint Secretary in the Department of Revenue & Forest at Mantralaya, Mumbai, Maharashtra. He deposed that from 2014 to 2020, he was posted as Deputy Secretary in the Department of Industries, Labour & Energy, Govt. of Maharashtra, Mumbai.
200. He told that vide production-cum-seizure memo dated 27.04.2015, he had handed over one file of Department of Industries, Labour & Energy, Government of Maharashtra bearing no. MMN/1120/8079/IND-9, pertaining to Mining Lease of M/s B.S. Ispat Ltd., Nagpur for Marki Mangli Coal Block (containing note sheet pages 1 to 31 and correspondence pages 1 to 557) to Inspector Subhash Pandey. The said production-cum- seizure memo is Ex. PW19/A (D-142). The file as mentioned above (as available in D-15) is Ex. PW-19/B (Colly.). He told that he had also filed an affidavit dated 02.09.2020 regarding handing over file [D-15, Ex. PW-19/B (Colly.)] vide production- cum-seizure memo (Ex.PW19/A). The said affidavit is Ex. PW- 19/C. He identified the letter dated 24.05.2017, vide which he had submitted the English translated copies of 126 Marathi documents from file regarding Marki Mangli Coal Block of M/s B.S. Ispat Ltd. through government approved translator Sh. D.J. Kanojia alongwith his certification. The letter dated 24.05.2017 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 77 of 194 alongwith translated copies is Ex. PW-19/D (Colly).
201. There is no cross-examination.
202. PW-20 is Sh. Anand Ghate. In the year 1999, he was posted in the Head Office, Directorate of Geology & Mining, Nagpur.
203. He deposed that he could identify the writing and signatures of Sh. R.G. Deshmukh, Director, Geology & Mining, Nagpur and that of Sh. B.T. Kottawar, who was either Deputy Director or Joint Director, as he had worked with them.
204. He told that vide letter dated 13.07.1999, already Ex. P-62 [as available in File D-1 (already Ex. PW2/A (Colly.)], it was informed to Secretary, Trade Commerce and Mining Department, Mantralaya, Mumbai "Government of Maharashtra may therefore inform Government of India accordingly stating that final recommendation in this regard will be sent after due scrutiny by the newly constituted State Level Committee".
205. He identified file of Department of Geology & Mining, Nagpur pertaining to M/s B.S. Ispat Ltd. which was dealt by Sh. R.G. Deshmukh and identified the signature of Sh. R.G. Deshmukh on notesheet Page 3/N. The File is Ex. PW20/A (Colly) (D-16). The noting portion from Page 1 to 58 is Ex. PW- 20/A-1 (Colly.) and correspondence side is Ex. PW-20/A-2 (Colly.).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 78 of 194
206. He identified the letter dated 15.05.2017 and the signature of Smt. Meena Shyamrao Nikhare, Deputy Director on it. The said letter alongwith translated copies of File are Ex. PW-20/B (Colly.). He identified the signatures of Sh. Mohan Agarwal (as available in D-226, from S-1 to S-15) and Sh. Rakesh Agarwal (as available in D-227, from S-16 to S-30) and stated that the same were taken in his presence. The specimen signature sheets bear his signatures. The said specimen signature sheets are Ex. PW-20/C (Colly.) and Ex. PW-20/D (Colly) respectively.
207. There is no cross-examination.
208. PW-21 is Sh. Maruti Ramchandra Patil. Between 19.01.1999 and 07.02.2002, he was posted as Under Secretary in the Department of Trade, Commerce and Mining Department, Govt. of Maharashtra.
209. He deposed that he used to report to Sh. J.P. Dange, Secretary of the department and stated that he can identify his signatures.
210. He identified the record notes of the discussion of the first meeting of State Level Committee for coal held on 30.09.1999 and stated that he had attended the said meeting alongwith Sh. J.P. Dange, the then Secretary. His name is at serial No. 6 on the attendance sheet (available at page 20). He CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 79 of 194 told that in the said meeting, case of M/s B.S. Ispat Ltd. was discussed. As per the notes, following observation was made:
"(3) M/s B.S. Ispat Ltd.
The proposal is for Sponge Iron Project and Washery. The company's application is for Marki- Mangli block which figures in the list of captive mining block identified by the Screening Committee (CIL). The Member Secretary informed the members that this is the case of the 3rd claimant of Marki-Mangli block. The earlier two applicants have withdrawn their claims over this block. Application has been forwarded to the Screening Committee by the Government of Maharashtra and final observations of the scrutiny by the State Level Committee need to be forwarded to the Government of India. The Chairman directed the Member Secretary to process this application in view of the criteria and guidelines of the Central as well as State Government by initiating action earnestly. Incidentally, the Member Secretary remarked for the information of the participants that the constraints of this block namely high sulphur content and the discontinuous nature of the deposit, have been brought to the notice of the party during the personal discussion with them."
211. The record notes of the discussion are available in file D-109, [already Ex. PW-8/E-2 (Colly)]. The record notes are Ex. PW-21/A (Page 9 to 22). He identified the file D-15, [already Ex. PW-19/B (Colly)]. He identified the letter dated 11.09.2000 (available in D-15 on page 154), addressed to Sh. T.K. Ghosh, Director, MoC, Govt. of India and stated that vide said letter he had informed that Industries, Energy and Labour Department of Maharashtra vide their letter No. IS/1099/RR-717/IND-2, dated 21.10.1999 had recommended to consider the request of M/s B.S. CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 80 of 194 Ispat for iron ore, lime stone and coal mines to support putting up their sponge iron project in the Yavatmal District. In view of this as per the decision taken in second meeting of the State Level Committee for coal, it was finally recommended to the MoC to allot Marki Mangli coal block of Yavatmal District to M/s B.S. Ispat Ltd. for captive mining of coal for their 3 MTPA capacity sponge iron plant. The said letter is Ex. PW 21/B.
212. Vide another letter dated 18.09.2000 (available in D- 15 on page 173), addressed to Sh. T.K. Ghosh, Director, MoC, Govt. of India, he had informed about the letter of even number dated 11.09.2000 on the subject cited above and stated that the capacity of sponge iron plant should be read as 3 LTPA instead of 3 MTPA capacity. The said letter is Ex. PW 21/C. He told that the letters were sent after taking approval from the competent authority i.e. Secretary, Trade and Commerce.
213. He also identified the letter dated 19.07.1999, issued under the signatures of Sh. J.P. Dange to the Secretary, MoC, whereby he had sent the letter of Director Geology and Mining, Maharashtra state, Nagpur, recommending the application of M/s B.S. Ispat Ltd. Nagpur for captive coal mining of the Marki Mangli coal block in Yavatmal District. It was further informed that Govt. of Maharashtra will take a detailed review of this application and project in the State Level Committee and then will forward the final recommendation immediately. The original letter dated 19.07.1999 alongwith enclosure is Ex. P-61 and P-62 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 81 of 194 (D-1).
214. In cross-examination on behalf of A-2, he admitted that in the first meeting of the State Level Committee for coal held on 30.09.1999, it was decided that the State Level Committee would inter alia see that the company was incorporated under the Companies Act, 1956 before sending the final recommendation to the MoC. He further admitted that in the second meeting of the State Level Committee for coal held on 14.01.2000, the case of M/s B.S. Ispat Ltd. was decided to be forwarded to Govt. of India with due recommendations for grant of the coal block applied for. The minutes of the said meeting are already part of Ex. PW 8/G (Colly). He also admitted that letter Ex. PW 21/B was in reference to letter No. 47011/1(9)/99-CPAM dated 11.08.2000 sent by Director, MoC to M/s B.S. Ispat Ltd.
FROM KARTIKEYA COAL WASHERIES PVT. LTD.
215. PW-10 is Mahendrajit Singh Saluja. He had been working as Senior Manager (Sales and Marketing) in Kartikeya Coal Washeries Private Limited since 2008 and was posted at Nagpur office. He told that their company is having its own washeries where washing of coal is undertaken.
216. He deposed that in the year 2014 their company had certain business deals with M/s BSIL. A work order was placed upon their company by M/s BSIL for washing of about 2289 MT of coal and they had accordingly returned back the said coal after CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 82 of 194 washing as per their requirement and specification. The said order was placed upon them by M/s BSIL on trial basis. In this regard the documents as were available with them were subsequently handed over to CBI.
217. He told that vide his letter dt. 15.11.2017 (Page 1 in D-200), the work order copy placed upon their company by M/s BSIL, coal received statement, coal dispatch statement after washing and invoice copy as was raised by their company upon M/s BSIL with respect to the aforesaid washing of coal work undertaken by them were provided to CBI. He also identified the documents (Page 4-14 in D-200) to be the same which were supplied by him after duly certifying them under his signatures and stamp of his company. The letter dated 15.11.2017 along with its enclosures is Ex. PW 10/A (Colly.) (D-200).
218. He told that apart from the aforesaid work undertaken by their company qua M/s BS Ispat Ltd, no other order for washing of coal was received by them for washing of coal from the said company.
219. Nothing has come out in cross-examination.
FROM CBI
220. PW-23 is IO/Dy. SP Subhash Pandey. He deposed that in March 2015, a regular case relating to coal block allocation matter was assigned to him for investigation and the said case pertained to M/s BSIL. He told that since a number of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 83 of 194 coal block allocation matters were being enquired into or investigated by CBI, so a large number of documents which were relevant to various such matters were collected by CBI in original during the course of preliminary enquiry itself. Accordingly, the documents which were specific to the present case were collected in original and other documents which had their relevance in various other matters also were collected in photocopies. The documents were collected from malkhana of CBI.
221. He told that the investigation of the present case was handed over to him on 31.03.2015. At that time, Sh. P.V. Harikrishna, the then SP, was posted in EO-III branch whereas Sh. Amit Kumar DIG was Head of the Branch. He told that he could identify their handwriting and signatures. He identified copy of RC No. 221 2015 E0005 (available in D-139) and identified the signatures of Sh. P.V. Harikrishna on it. The copy of FIR/RC is Ex. PW-23/A.
222. He told that in the said FIR/RC, there were allegations against the company M/s BSIL, Mohan Agarwal and unknown persons as they had misrepresented before the 15 th Screening Committee, MoC with a view to procure allocation of a captive coal block, i.e. Marki Mangli coal block in Maharashtra.
223. He told that during the course of investigation, on 01.04.2015 searches were conducted at four places u/s 165 CrPC. He identified the search list dated 01.04.2015 (D-136). The CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 84 of 194 search list along with its annexures is Ex. PW-23/B (Colly). He collected various documents from Malkhana EO III and which are Ex. PW-23/B-1 (Colly.) to B-24 (Colly.) and Ex. PW16/A (Colly.) (D-66 to D-90).
224. He identified the affidavit dated 26.08.2020, u/s 296 CrPC of Sh. S.C. Bhagwat filed before this Court. The said affidavit alongwith its annexures is Ex. PW-23/B-25 (Colly.).
225. He also identified the search list dated 01.04.2015 (D-137) alongwith the signatures of Sh. Sudhir Kumar, the then Inspector. The said search list alongwith its annexures is Ex. PW- 23/C (Colly.). He had collected documents Ex. PW 23/C-1 to C- 28 (D-38 to D-65).
226. He identified the affidavit dated 31.08.2020, u/s 296 CrPC of Inspector Sh. Sudhir Kumar filed before this Court. The said affidavit alongwith its annexures is marked as Ex. PW-23/C- 29 (Colly.).
227. He told that after completion of searches, he filed a Compliance Report dated 08.04.2015 before this Court vide Ex. PW-23/C-30 (Colly.). The Compliance Report was accepted in the court vide order dt. 08.04.2015.
228. He identified the Production-cum-Seizure Memo dated 06.04.2015 (D-138) as Ex. PW-23/D (Colly.). He told that the documents mentioned in the Production-cum-Seizure Memo dated 06.04.2015 (D-138) were received by Sh. Sunit Pal, the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 85 of 194 then Sub Inspector from the concerned officers which was duly reflected in the said Memo under the heading note which is reproduced as under :-
(Note - The documents mentioned at serial no. 1 to 7 were received through Production-cum-Receipt Memo dated 22.11.2012, serial No. 8 through Production-cum-Receipt Memo dated 01.10.2013 from Ministry of Coal by Sh.
Sunit Kumar Pal, Sub Inspector, CBI, EO-III, New Delhi in connection with PE 219 2012 E 0004 pertaining to allocation of coal blocks. The documents mentioned at serial 9 & 10 were received through Production-cum- Receipt Memo dated 17.09.2013 from Ministry of Coal by Sh. Suresh Kumar, SI, CBI, EO-I, New Delhi in connection with PE 219 2012 E0002, since these documents pertain to PE 219 2012 E0004, the same were taken over by Sh. Sunit Kumar Pal in PE 219 2012 E0004 through Receipt Memo dated 19.09.2013. The documents mentioned at serial no. 11,12, & 13 were received from Central Excise and the documents mentioned at serial no. 14 were received from ROC, Mumbai during the PE 219 2012 E0004. (Photocopies of all the Production-cum- Receipt Memos are enclosed).
229. He also identified the various documents available in D-1 to D-14 to be the same which were seized vide Production-cum-Seizure Memo dated 06.04.2015 (D-138) Ex. PW-23/D (Colly). The documents are Ex. PW23/D-1 to D-10 and others which were already exhibited.
230. The affidavit dated 21.09.2020, u/s 296 CrPC of Sh. Sunit Pal is Ex. PW-23/D-11 (Colly.).
231. He identified the Production-cum-Seizure Memo dated 27.04.2015 (D-142) Ex. PW-19/A. He also identified the document available in D-15 to be the same which was seized CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 86 of 194 vide Ex. PW-19/A. He identified the Production-cum-Seizure Memo dated 09.04.2015 (D-140) already Ex. PW-8/A. He also identified the various documents (available in D-16 to D-18) to be the same which were seized vide Ex. PW-8/A. He identified the Production-cum-Seizure Memo dated 09.04.2015 (D-141), Ex. PW-23/E. He also identified the various documents (available in D-19 to D-22 & D-91) to be the same which were seized vide Ex. PW-23/E. The same are exhibited PW 23/E-1 to E-4 and few already exhibited.
232. He identified the affidavit of Sh. Pandurang Kadoo sworn on 25.08.2020 and identified the signatures of Shri Sriram Pandurang Kadoo on it. The affidavit dated 25.08.2020 is Ex. PW-23/E-5(Colly).
233. He told that vide Production-cum-Seizure Memo dated 19.05.2015 (D-144), various documents as is mentioned over there were seized from Sh. Sewak Paul, Asstt. MoC, New Delhi. The Production-cum-Seizure Memo dated 19.05.2015 is Ex. PW-23/F. He told that vide this memo, various documents were seized which are Ex. PW23/F-1 (Colly.) and F-2 (Colly.).
234. He deposed about receiving various documents from various persons which documents have already been referred to earlier.
235. He identified the copy of Production-cum-Seizure Memo dated 28.01.2015 (D-175), and stated that vide this Memo CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 87 of 194 various documents as are mentioned over there were seized from Sh. Sunit Kumar Pal, the then Sub Inspector, CBI, EO-III, New Delhi. He identified his signatures and that of Sh. Sunit Kumar Pal on it. The said Production-Cum-Seizure Memo is Ex. PW- 23/G.
236. He told that vide letter dated 21.03.2016 (D-34) of B.S. Ispat Ltd., the company had provided the details of share transfer, consideration and mode of payment pertaining to the share purchase agreement dated 2nd December, 2011 along with the share transfer forms and copies of Demand draft. The letter alongwith the documents is Ex. P-9 (Colly.)
237. He identified the letter dated 25.11.2015 (D-35) of Mohan Agrawal, addressed to Inspector, Rajbir Singh of CBI, EO-III and stated that vide this letter Mohan Agrawal submitted MoU and Agreement dated 15.10.2007 executed between Agrawal Group and Sarda Group and Share Holders Agreement dated 15.04.2008 between Shri Govind Dass Daga and Rose Fiscal Services Pvt. Ltd. The letter along with the documents is Ex. PW-23/H (Colly) (D-35).
238. He told that vide letter dated 24th February, 2016 (D-156), Sh. Rishan Ryntathiang, Under Secretary, MoC, Govt. of India, New Delhi provided the IMC Report in respect of Marki Mangli-I Coal Block allocated to B.S. Ispat Ltd. I identified his signatures on it. The said letter dated 24.02.2016 (D-156) is Ex. PW-23/I. He identified the affidavit dated 26.08.2020 of Shri CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 88 of 194 Rishan Ryntathiang. The said affidavit is Ex. PW-23/J (Colly.).
239. He told that vide letter dated 24.06.2015 (as available at D-94), Directorate Geology and Mining Govt. of Maharashtra, Nagpur got translated in English copies of notesheets originally in Marathi of Marki Mangli Coal Block allocated to B.S. Ispat Ltd. The letter alongwith the copies of English translation is Ex. PW-23/K (Colly).
240. He told that vide letter dated 14.10.2015 (D-101) of Ministry of Commerce & Industry Department of Industrial Policy & Promotion, New Delhi, office copies of the IEM acknowledgments were issued to the BS Ispat Ltd. It contains application given by BS Ispat for IEM and other correspondence. The letter alongwith the documents is Ex. PW-23/L (Colly.) (D-
101).
241. He identified the letter dated 04.11.2015 (as available at D-105) and told that vide this letter, Sh. J.S. Bagadi of Industries, Energy & Labour Department, Govt. of Maharashtra, Mumbai got translated in English copies of notesheets originally in Marathi of Marki Mangli Coal Block allocated to B.S. Ispat Ltd. He identified his signatures on this letter. The letter along with the copies of English translation is Ex. PW-23/M (Colly.) (D-105).
242. He identified the affidavit dated 16.09.2020 of Sh. Sujoy Majumdar, notorised by the notary at Kolkata. The CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 89 of 194 affidavit dated 16.09.2020 is Ex. PW-23/N (Colly).
243. He told that vide production-cum-Seizure Memo dated 15.01.2016 (D-152), one document as mentioned over there was seized from Sh. Rajendra Shivdas Kalamkar, the then Director (I/c), Govt. of Maharashtra. He identified his signatures and that of Sh. Rajendra Shivdas Kalamkar on it. He also identified the document (available in D-110) to be the same which was seized vide this Production-cum-Seizure Memo. This Production-cum- seizure memo is Ex. PW-23/O. D-110 is Geological Report which is already Ex. PW8/F-1 (Colly.).
244. He told that vide letter dated 07.12.2015 (D-111) of M/s. Indo Unique Flame Ltd. for production of documents for the year 2011-2012, the company replied and confirmed about non- availability of documents with the company for the year 2011- 2012. The said letter is already Ex. P-31 (Colly.)
245. He identified the letter dated 03.11.2015 (D-114), whereby the information as sought for by CBI was provided. He identified his signatures and that of Sh. B.P. Mishra on it. The said letter alongwith annexures (Page 1 to 5) is Ex. P-23/P (Colly.) He told that the aforesaid reply was submitted by Sh. B.P. Mishra in response to his letter dated 29.10.2015 (D-130). The letter is Ex. P-45.
246. He also identified the copy of Production-cum- Seizure Memo dated 05.11.2015 (D-149), and stated that vide CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 90 of 194 this Memo one file of MoS as is mentioned over there was seized from Sh. Samin Ansari, Section Officer, MoS, Udyog Bhawan, New Delhi. He identified his signatures and that of Sh. Samin Ansari on it. The Memo dated 05.11.2015 is Ex. PW-23/Q. He also identified the affidavit dated 07.10.2022 of Sh. Samin Ansari which is Ex. PW-23/Q-1 (Colly).
247. He also identified the following letters:
(i) Letter dated 27.10.2015 of Sh. B.P. Mishra written to him [(D-116) Ex. PW14/J (Colly.)], whereby the information as sought for by CBI was provided.
(ii) Letter dated 16.02.2016 of Mohan Agrawal (D-117) vide which Mohan Agrawal had provided the information qua group of companies. The letter is Ex. PW-23/R (Colly) (D-117). The reply was submitted by Mohan Agrawal in response to his notice dated 08.02.2016 (D-154) issued u/s 91 CrPC. The said notice is Ex. PW-23/R-1 (D-154).
(iii) Letter dated 14.04.2016 alongwith enclosures [1 to 62 Pages, D-118], [Ex. P-34 (Colly.)] of Aditya Malhotra, Director M/s. B.S. Ispat Ltd., whereby the information as sought for by CBI was provided by Aditya Malhotra to him.
248. He also identified the following letters:
(i) Letter dated 06.04.2015 (D-120), [already Ex. P-36], in response to which Sh. Sewak Paul, the then Assistant, MoC vide production-cum-seizure memo dated 19.05.2015 (D-144), CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 91 of 194 already Ex. PW-23/F had provided the two files (as available in D-23 & D-24). The said files are already Ex. PW23/F-1 (Colly.) & Ex. PW23/F-2 (Colly.).
(ii) Letter dated 06.04.2015 (D-121), [already Ex. P-37] in response to which vide production-cum-seizure memo dated 27.04.2015 [(D-142), already Ex. PW-19/A], Sh. Sanjay Ingle, the then Deputy Secretary, Department of Industries, Labour & Energy, Govt. of Maharashtra, Mumbai had provided one file (as available in D-15). The said file is already Ex. PW19/B (Colly.).
(iii) Letter dated 06.04.2015 (D-123), [already Ex. P-39] in response to which Sh. Rajendra Shiv Das Kalamkar, the then Joint Director, Directorate of Geology & Mining, Govt. of Maharashtra vide production-cum-seizure memo dated 09.04.2015 [(D-140), Ex. PW-8/A] had provided two files [as available in D-16, Ex. PW8/B (Colly.) & Ex.PW20/A (Colly.) and D-17, Ex. PW8/C (Colly.)].
249. He further identified the following documents:
(i) His Letter dated 09.10.2015 (D-125) [Ex. P-41].
addressed to Principal Secretary, Industry & Labour Department, Govt. of Maharashtra, Mumbai for getting translated the files of Marathi language in English.
(ii) His Letter dated 13.10.2015 (D-126) [Ex. P-42] addressed to Jt. Secretary & CVO, MoS, Govt. of India, New Delhi for providing MoS file pertaining to the comments of the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 92 of 194 Ministry on the project of M/s B.S. Ispat Ltd. including notesheets and correspondences with MoC and the party.
(iii) His Letter dated. 13.10.2015 (D-127) addressed to K.K. Sinha, Industrial Advisor, Ministry of Commerce and Industries, Govt. of India, New Delhi for providing the file of Ministry of Commerce & Industries pertaining to IEM given to M/s. B.S. Ispat Ltd. including notsheets and correspondences with the party. This letter is Ex. PW-23/S-1.
(iv) His Letter dated 28.10.2015 (D-128) [Ex. P-43], in response to which Sh. J.S. Bagdi vide letter dated 04.11.2015 [Ex. PW 3/M (Colly) (available in D-105)] provided the translated copies of the files containing Marathi language in English to CBI.
(v) His Letter dated 29.10.2015 (D-129) addressed to Director (Technical), MoC, Govt. of India, New Delhi for providing the concerned file regarding constitution of inter ministerial committee and the report of the committee in original. This letter is Ex. P-44.
(vi) His Letter dated 29.10.2015 Ex. PW23/S-2 (D-131) addressed to Govind Das Daga, Director, M/s. Central Collaries Company Ltd., Nagpur for providing Annual Returns for the period 1999-2000 and 2000-2001 of M/s. Central Collaries Company Ltd., Shareholder Register and Directors Register in original. In response to which Shri Govind Das Daga vide letter dated 02.11.2015 (as available in D-93) intimated about non availability of aforesaid information. The said letter is Ex. PW-
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 93 of 194 23/S-3 (Colly.).
(vii) His Letter dated 30.10.2015 (D-132) addressed to Sh. Sunil Kumar Pandey, Section Officer, MoS, Govt. of India, New Delhi for providing the MoS file pertaining to the comments of the Ministry on the project of M/s B.S. Ispat Ltd. including notesheets and correspondences with MoC and the party. This letter was issued as reminder to MoS for providing the requisite information as sought for earlier by CBI. This letter is Ex. P-46.
(viii) His Letter dated 16.12.2015 (D-134) addressed to Director (Technical), MoC, Govt. of India, New Delhi for providing the concerned file regarding constitution of inter ministerial committee and the report of the committee in original. This letter was issued as reminder to Director (Technical) for providing the requisite information as sought for earlier by CBI. This letter is Ex. P-48.
(ix) His Letter dated 09.02.2016 (D-135) addressed to Jt. Secretary & CVO, MoC, Govt. of India, New Delhi for providing the Report of IMC in original. This letter is Ex. PW- 23/S-4.
(x) Letter dated 26.08.2015 (D-146) vide which Sh. Hari Om Choudhary, Managing Director, Indo Unique Flame Ltd., Nagpur provided the information with respect to raw coal receipt and dispatched to M/s B.S. Ispat Ltd. The letter is Ex. PW-23/S-
5.
(xi) Letter dated 16.10.2015 (D-147) vide which Sh.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 94 of 194 Govind Daga, Director, M/s Central Collaries Company Pvt. Ltd., Nagpur provided the information as sought for. The letter is Ex. PW-23/S-6.
250. He identified the notice u/s. 91 CrPC dated 08.02.2016 (D-153) Ex. PW-23/S-7 issued under his signatures to Govind Das Daga, the then Director, M/s B.S. Ispat Ltd., Nagpur for production of following documents :-
i. Details of Bank accounts of M/s. B.S. Ispat Ltd., Nagpur ii. Details of Bank accounts of all the shareholders of M/s. B.S. Ispat Ltd., Nagpur where payments of share transfer were deposited in 2011.
iii. Reason for valuation of M/s. B.S. Ispat Pvt. Ltd. by E & Y in the year 2009.
251. He identified the letter/reply dated 12.02.2016 (D-155) and stated that vide this letter, Sh. Govind Daga had provided the following information as sought for vide notice dated 08.02.2016 (D-153) :-
i. Details of Bank accounts of M/s. B.S. Ispat Ltd., Nagpur;
ii. Details of Bank accounts of all the shareholders of M/s. B.S. Ispat Ltd., Nagpur where payments of share transfer were deposited in 2011;
iii. Reason for valuation of M/s. B.S. Ispat Pvt. Ltd. by E & Y in the year 2009.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 95 of 194
252. The aforesaid letter/reply is Ex. PW-23/ S-8 (Colly).
253. He identified the letter dated 11.05.2016 (D-157), addressed to Director (CFSL), CGO Complex, Lodhi Road, New Delhi and stated that vide this letter, the questioned documents along with specimen signatures of accused Mohan Agrawal and Rakesh Agrawal were sent to CFSL for expert opinion. The said letter was forwarded to Director (CFSL) by Sh. P.V. Harikrishna, the then Supdt. of Police, CBI, New Delhi. The letter alongwith Annexures is Ex. PW-23/S-9 (Colly).
254. He also identified the letter dated 18.07.2016 (as available in D-158) and stated that vide this letter, Mohan Agrawal provided the information as sought for by me from the company. The letter alongwith Annexures is Ex. PW-23/S-10 (Colly).
255. He deposed about receiving various letters from Aditya Malhotra whereby the information as sought for by CBI was provided to him.
256. Various similar letters received from other persons are Ex.P-53 (Colly.) (Page 1 to 38 of D-161), Ex.PW23/K (Colly.) (D-94), Ex. PW-23/S-11 (D-162).
257. He identified the copy of file captioned Government of India, MoC and marked F-No.47011/7/93-CPA (available in D-165 containing notesheet pages 1 to 53 and correspondence pages 1 to 363) and copy of file marked F-No.47011/7/93-CPA CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 96 of 194 Vol. 1-B (available in D-166) and stated that it pertains to 1st Screening Committee meeting held on 14.07.1993 and other initial meetings. The copy of this file was taken by him from the Malkhana Incharge, EO-III and original was seized in case RC.221/2015/0002/CBI/EO-III New Delhi. The file (D-165) is Ex. PW-23/S-12 (Colly) and the file D-166 is now marked as Ex. PW-23/S-13 (Colly).
258. He also identified the letter dated 22.11.2016 of Dr. V.M. Motghare, Joint Director (Air Pollution Control), MPCB (D-167), whereby the information as sought for by CBI with respect to the consent to establish and consent to operate in respect of the units of M/s. B.S. Ispat Ltd. was provided. The said letter alongwith enclosures is Ex. PW-23/S-14 (Colly.) (Page 1 to
114).
259. He also prove seizure of copy of file captioned Government of India, Ministry of Coal and marked F-
No.13011/3/92-CA (CF No. 7720) (available in D-168 containing notesheet pages 1 to 6 and correspondence pages 1 to
46) vide Production cum Seizure Memo dated 16.10.2014 (D-
177) by Inspector Pawan Kumar Kaushik. The memo dt. 16.10.2014 is Ex. PW-23/S-15.
260. He identified the copy of file captioned Govt. of India, MoC and marked F-No.13011/5/2003-CA-Part (CF No.
982) (available in D-169 containing notesheet pages 1 to 8 and correspondence pages 1 to 48) pertaining to to re-constitution of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 97 of 194 Screening Committee. He told that he had taken the copy of this file from the Malkhana Incharge, EO-III and original was seized in case RC.221/2014/0002/CBI/EO-III New Delhi vide Production cum Seizure Memo dated 16.10.2014 (D-177) by Inspector Pawan Kumar Kaushik, already Ex.PW23/S-15. The file D-169 is Ex. PW-23/S-16 (Colly).
261. He identified the copy letter dated 30 March, 2016 (as available in D-170), already Ex. PW8/G (Colly.). Vide this letter, DGM, Directorate of Geology, Govt. of Maharashtra, Nagpur had sent the documents including the record notes of discussion of 2nd meeting of the state level committee for coal held on 14.01.2000. Vide this letter the documents from page 1 to 30, a letter and index page were provided to Inspector S.C. Bhagwat.
262. He also proved his letters requiring production of documents. He told that M/s. Kartikey Coal Washerries Pvt. Ltd. Nagpur under the signatures of Shri J.B. Ullah Baig vide letter dated 17.11.2016 (D-181) had provided the requisite information as sought for vide letter dated 17.11.2016 (D-174) to me. The letter is Ex. PW-23/S-17 (Colly) (D-181).
263. He identified the letter dated 16.11.2016 of Sh. Pramod Chabra, GM (A&C), vide which Bhatia Coal Washeries Ltd. vide which the details of coal washing done by the washery for M/s. B.S. Ispat Ltd were provided. The same is Ex. PW-23/S- 18 (Colly) (D-180).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 98 of 194
264. He also identified the letter dated 18.11.2016 (D-
182) vide which Sh. Hari Om Choudhary, Managing Director, Indo Unique Flame Ltd., Nagpur provided the information with respect to details of coal washing done for M/s. B.S. Ispat Ltd. This letter is Ex. PW-23/S-19 (Colly.)
265. He also proved letter dated 11.11.2016 (D-183) of Sh. Vijay Verma, Sr. Scientific Officer, CFSL, CBI, New Delhi vide which CFSL had asked for admitted signatures of Mohan Agrawal and Rakesh Agrawal as Ex. PW-23/S-20 (D-183); letter dated 23.11.2016 from Sh. N. Ravi, I/C, Director, CFSL, CBI, New Delhi as Ex. PW-23/S-21 (D-184); and letter dated 01.04.2017 as Ex. PW-23/S-22 (D-185).
266. He told that vide letter dated 01.04.2017 (D-186) he had requested Principal Secretary, Industry, Energy & Labour Department, Govt. of Maharashtra, Mumbai for getting translation of notesheets of relevant file provided to the said office earlier. The letter dated 01.04.2017 is Ex. PW-23/S-23.
267. He told that vide e-mail dated 05.04.2017 he had requested Branch Manager, Nagpur Co-operative Bank, Lakarganj Branch, Nagpur for providing the account opening form, specimen signature card and ten instruments of each of these accounts bearing signatures of Mohan Agrawal and Rakesh Agrawal. The print out of e-mail dated 05.04.2017 is Ex. PW- 23/S-24 (D-187).
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 99 of 194
268. He told that vide e-mail dated 05.04.2017 he had requested Branch Manager, IDBI Bank, Basheer Bagh Branch, Hyderabad for providing the account opening form, specimen signature card and ten instruments of the account bearing signatures of Rakesh Agrawal. The said print is Ex. PW-23/S-25 (D-188).
269. He told that vide letter dated 04.05.2017 he had requested Branch Manager, IDBI Bank, Basheer Bagh Branch, Hyderabad, for providing account opening form, specimen signature card and ten instruments of the account bearing signatures of Rakesh Agrawal. The bank official provided the original account opening form of account no. 002104000136624. The said letter is Ex. PW-23/S-26.
270. He identified the letter dated 26.05.2017 of IDBI Bank vide which he had received 10 cheques bearing signatures of Rakesh Agrawal. The letter alongwith the list of cheques is Ex. PW-23/S-27 (Colly.) (D-190).
271. He told that vide letter dated 29.06.2017 he had requested Director, Directorate of Geology & Mining, Govt. of Maharashtra for getting translation of notesheets/documents of relevant files provided to the said office earlier. The letter is Ex. PW-23/S-28 (D-191).
272. He told that vide e-mail dated 07.12.2017, Sh. Sujoy Majumdar was requested for providing Annual Coal CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 100 of 194 Production from Marki Mangli Coal Block allocated to M/s B.S. Ispat Ltd. since beginning. The print out of said e-mail is Ex. PW23/S-29 (D-192).
273. He told that vide letter dated 13/17.07.2017 (D-193), received from Sh. Indradeep Roy Chowdhury, Dy. Director, MoC, office of Coal Controller, Kolkata, he had provided the information regarding production of annual raw coal figures of Marki Mangli Coal Block from 2010-11 to 2014-15 (since start) as Annexure-A. The letter alongwith Annexure-A is Ex. PW23/S-30 (Colly.).
274. He identified the letter dated 18.07.2017, received from District Mining Officer, Office of Collectorate, Yavatmal and stated that vide this letter he had provided the information regarding production and dispatch data of coal of Marki Mangli Coal Block from 2011-12 to 2014-15. The letter is Ex. PW23/S- 31 (Colly.)(D-194).
275. He told that vide letter dated 31.07.2017, addressed to Dy. SP, CBI, EO-III, New Delhi, Sh. Prashant Bakhle, Branch Manager, Lakarganj Branch of Nagpur Nagrik Sehkari Bank Ltd. had provided account opening form and specimen signature card of the current account number 952 of Mohan Kumar Agrawal. The letter is Ex. PW9/A (Colly.) (D-195).
276. He told that vide letter dated 11.08.2017 (D-196), he had sent the admitted documents mentioned therein to Director, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 101 of 194 CFSL, CGO Complex, Lodhi Road, New Delhi. The letter is Ex. PW23/S-32.
277. He identified the letter dated 12.08.2017 (D-197), vide which Sh. Sunil M. Jamankar, DGM, F&A, M/s B.S. Ispat Ltd. had provided the requisite information. The letter alongwith Annexures is Ex. PW23/S-33 (Colly.).
278. He also identified the letter dated 24.08.2017 (D-
198) [already marked as Ex. P-59 (Colly.)].
279. He told that vide letter dated 15.11.2017 (D-199), received from Sh. Hari Om Choudhary, Managing Director, M/s Indo Unique Flame Ltd., he had provided the requisite information. The letter alongwith Annexures is Ex. PW23/S-34 (Colly.).
280. He also identified the letter dated 16.11.2017 (D-
201), vide which Sh. M.A. Ansari, Director, M/s Bhatia Coal Washeries Ltd. had intimated that the requisite information as sought for had already been provided to CBI. The letter is Ex. PW23/S-35 (Colly.).
281. He told that vide letter dated 06.02.2018 (D-202), received from Incharge, Director, CFSL, CBI, New Delhi, CFSL report dated 31.01.2018 was received. The letter is Ex. PW23/S- 36 (Colly.).
282. He identified the certificate issued u/s 65 B of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 102 of 194 Evidence Act, 1872 by Sh. Yogesh Kapoor, Director, M/s B.S. Ispat Ltd. (D-203) which is Ex. PW23/S-37.
283. He told that vide endorsement made on CBI letter dated 04.05.2017 [already Ex. PW-23/S-26, (D-189)], Branch Manager, IDBI Bank, Basheer Bagh Branch, Hyderabad, had provided the account opening form of account no. 002104000136624 of Rakesh Agrawal, specimen signature card and ten instruments of the account bearing signatures of Rakesh Agrawal to CBI. The documents which were provided are as under:
(i) Account opening form of account no. 002104000136624 alongwith enclosures in the name of Rakesh Agrawal maintained in IDBI Bank, Basheer Bagh Branch, Hyderabad (D-215). The same is Ex. PW23/S-38 (Colly.). The cheques from D-216 to D-
225 are Ex. PW23/S-39 (Colly.).
284. He identified the affidavit dated 26.08.2020 of Sh. Pradeep Kumar, Addl. SP, CBI, EO-III. The said affidavit is Ex. PW23/S-40.
285. He deposed that during the course of investigation, investigation was carried out on allegation about misrepresentation done by the accused persons Mohan Agrawal and Rakesh Agrawal with an intention to cheat MoC, Govt. of India in furtherance of criminal conspiracy entered into by them. These accused persons made several correspondences CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 103 of 194 representing themselves as Director of M/s B.S. Ispat Ltd. even when the company was not in existence. They applied for allocation of Marki Mangli Coal Block with the concerned authorities namely MoC, MoS and State Govt. of Maharashtra. The Company was incorporated on 01.12.1999 and certificate of commencement of business was issued on 27.04.2000. Whereas, these accused persons made correspondences with the authorities starting from 28.06.1999 onwards. Vide letter dated 03.09.1999 they corresponded with MoS requesting for recommendation of their request of allocation of the coal block to MoC and got the recommendation of the MoS in favour of M/s B.S. Ispat Ltd.
286. He further deposed that during further investigation, it was revealed that the Marki Mangli Coal Block was allocated to M/s B.S. Ispat Ltd. in the 15th Screening Committee Meeting held on 06.03.2000 on the conditions that M/s B.S. Ispat Ltd. would wash the mined coal for its proposed sponge iron plant (SIP) and use washed coal in SIP and use the middlings generated during washing in its proposed captive power plant (CPP). These conditions were also incorporated in the prior approval issued by Govt. of India and mining lease executed between the company and State Govt. of Maharashtra. He also told that the Company utilised 4691 MT raw coal and 1513 MT middlings in its SIP. Further, the company M/s B.S. Ispat Ltd. violated these conditions and utilised 16484 MT raw coal and 7782 MT washed coal in the CPP. He stated that utilization of coal in the above manner was done in violation of the guidelines of allocation, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 104 of 194 prior approval and mining lease. During the course of investigation, he had recorded the statements of various witnesses. Upon completion of investigation, he had filed chargesheet against accused Mohan Agrawal, Rakesh Agrawal and M/s B.S. Ispat Ltd., u/s 120-B r/w S. 420 IPC and substantive offences thereof. One supplementary chargesheet was also filed by him upon completion of further investigation against M/s B.S. Ispat Ltd., u/s 406 IPC.
287. In cross-examination on behalf of A-2, he told that the application submitted by M/s B.S. Ispat Ltd. in the present instance was not in response to any advertisement or public notice issued by any department. He told that during investigation, he did not come across any public dissemination of information about how an applicant was expected to apply for a coal block, the terms and conditions, the eligibility criteria or any other stipulation in that regard. He admitted that during June- July, 1999, when this application was made, there was no fixed format or any specific set of details required in an application for allocation of coal block. He found out that applications were being processed in terms of screening committee guidelines framed in the first screening committee meeting in 1993.
288. He admitted that the 1993 guidelines did not have any stipulation requiring an applicant to be a registered company or to provide any documentation in support thereof. However, he clarified that this stipulation that an applicant must be a CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 105 of 194 registered company was under the CMN Act.
289. One statement of Sh. Bhubneshwar Lal Das dt. 16.10.2015, u/s 161 CrPC was marked as Ex. PW23/DX-1.
290. He admitted that the registration number of the company M/s B.S. Ispat Ltd. had been provided to the MoC on 31.01.2001 through Ex. PW-22/DX-1 (D-1) and the company had intimated the MoC that its date of incorporation was 01.12.1999. He also stated that he found that the MoC or any other Govt. Department did not initiate any action for de- allocation of coal block of M/s B.S. Ispat Ltd. on the basis that it had filed an application prior to its incorporation or that it had withheld any information from the department.
291. In cross-examination on behalf of A-3, he admitted that an organisation need not be a company. He admitted that in Ex. PW2/A (Colly.), at srl. no.1, the term used is 'name of organisation'.
292. He was cross-examined on behalf of A-1 regarding IMC report. He admitted that in Ex.14/A (Colly.) it is mentioned that the raw coal mined had high sulphur in the coal.
PART - D STATEMENTS OF ACCUSED PERSONS U/S 313 CRPC CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 106 of 194
293. Statement of all the accused persons were thereafter recorded u/s 313 CrPC in detail. Liberty was also given to all the accused persons to file their written statements u/s 313 (5) CrPC. However, only A-2 Mohan Agrawal filed his written statement u/s 313 (5) CrPC. The three accused persons did not lead any evidence in their defence.
294. AR of A-1 company stated that it is a false case against the company. He stated that the company made sincere efforts to abide by the terms and conditions related to allocation of captive coal block. He also stated that investigation was not done fairly. He further told that power generated from CPP was used only in SIP and no profit was made therefrom. He also told reasons for high consumption of coal in the plant.
295. A-2 in his statement u/s 313 CrPC stated that the case was improperly investigated. He stated that there were no guidelines regarding eligibility and thus there was no misrepresentation. He stated that the company was got incorporated by making contemporaneous efforts on 01.12.1999.
296. A-3 in his statement u/s 313 CrPC has simply stated that it is a false case against him. He stated that he did not deceive anyone or misrepresent anything.
PART - E THE ARGUMENTS CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 107 of 194
297. Detailed final arguments in the matter were heard as addressed by Sh. A.P. Singh, Ld. DLA on behalf of CBI; by Sh. Manoj Arora, Ld. Counsel for A-1 company; by Sh. Siddharth Aggarwal, Ld. Senior Advocate on behalf of A-2 Mohan Agrawal; and by Sh. Hemant Shah, Ld. Counsel on behalf of A-3 Rakesh Agrawal.
298. Written submissions, in support of the arguments, were also filed. I have gone through the same as well.
ARGUMENTS ON BEHALF OF PROSECUTION
299. Sh. A.P. Singh, Ld. DLA submitted that A-1 company was not an incorporated company on the date when the application was made for allocation of the coal block i.e. 28.06.1999 (date of the application) or 15.07.1999 (date of submission of the application to MoC). Ld. DLA argued that the application made in the name of a non-existing company was liable to be rejected but it was misrepresented to MoC that the company was in existence.
300. He referred to the provisions of CMN Act and submitted that as per Section 3 thereof, only a company could mine the coal.
301. Highlighting the roles of A-2 and A-3, Ld. DLA submitted that despite the company/A-1 not in existence prior to 01.12.1999, A-2 and A-3 misrepresented themselves as directors CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 108 of 194 of the said company in various correspondences. He submitted that A-1 company, after its incorporation, too joined the conspiracy and pursued the matter of allocation.
302. It was submitted by Ld. DLA that the facts and circumstances of the present case clearly show as to how A-2 Mohan Agrawal and A-3 Rakesh Agrawal misrepresented to various Government departments i.e. MoC, MoS and Department of Geology and Mining, Govt. of Maharashtra by submitting applications/letters for allocation of coal block in the name of a non-existent entity i.e. M/s BSIL.
303. Ld. DLA argued that the prosecution has proved its case beyond reasonable doubts. Referring to the testimonies of the witnesses and the documents, he submitted that the prosecution has proved the charges including conspiracy. He emphasized that the conspiracy among the accused persons stands established and the offences of cheating and criminal misappropriation are clearly made out.
ARGUMENTS ON BEHALF OF A-1 COMPANY M/S BSIL
304. Sh. Manoj Arora, Ld. Counsel for A-1 company made detailed submissions on its behalf.
305. He contended that it is prosecution's own case that when the application was made to MoC, A-1 company was not in CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 109 of 194 existence. Therefore, A-1 cannot be made liable for whatever was done by A-2 and A-3 prior to its incorporation. He contended that A-1 company cannot be held responsible to misdemeanour of its promoters. He argued that there is no evidence that those acts were ratified by the company after its incorporation.
306. He also contended that no offence of conspiracy is made out against A-1 company. Repeating the same reasoning about date incorporation of A-1 company, he submitted that when the conspiracy took birth, A-1 was not in existence. Therefore, A-1 cannot be roped in any conspiracy. If there was any conspiracy, it was between A-2 and A-3 only.
307. Regarding the charge of cheating, Ld. Counsel submitted that allocation letter cannot be considered as property for the purposes of Sec. 415 or 420 IPC. As such, the offence of cheating is not made out.
308. Regarding the charge u/s 406 IPC, Ld. Counsel contended that there was high consumption of coal due to various factors which were beyond control of A-1 company. He also referred to report of Inter-Ministerial Committee (IMC) which did not find anything adverse against the company.
309. He prayed for acquittal of A-1 for all the charges.
ARGUMENTS ON BEHALF OF A-2 MOHAN AGRAWAL CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 110 of 194
310. Sh. Siddharth Aggarwal, Ld. Sr. Advocate, made detailed submissions on behalf of A-2 Mohan Agrawal.
311. His first and foremost contention is that there was no requirement of an applicant being an incorporated company for obtaining coal block, at the relevant time. He submitted that incorporation was not mandatory.
312. He further contended that the fact of non- incorporation did not lead to any cheating. He pointed out that the accused persons had made contemporaneous disclosures to various authorities regarding the status of the applicant company. Those disclosures were considered by these authorities and only thereafter recommendation/allocation was made. As such, there was no mens rea on the part of any of the accused.
313. Ld. Sr. Counsel also submitted that status of BSIL had no connection to allocation. He pointed out that BSIL was the only applicant for Marki Mangli coal block. As such, no benefit had accrued to it by claiming itself to be a company before 01.12.1999. He also contended that MoS was also not induced as recommendation made by it was not based on status of incorporation of the BSIL but rather was based on technical aspects.
314. He forcefully submitted that on the date when the first allocation of the coal block was made/recommended by the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 111 of 194 Screening Committee i.e. 06.03.2000, the company had been incorporated with the concerned RoC.
315. He further submitted that by the date second allocation was made/recommended i.e. 25.04.2001, the company had already got certificate to commence business. As such, there was no misrepresentation or inducement on the part of A-2 regarding incorporation.
316. Ld. Sr. Counsel referred to various documents in this regard. He also referred to the provisions of CMN Act, 1973.
317. Regarding A-2 describing himself as "Director" of A-1 company, Ld. Sr. Counsel submitted that it was not specified in the application that A-2 was describing himself as director on the Board of Directors of the company. He suggested that 'director' can be a designation also. He contended that the company/A-1 has not countered the correspondences done by A- 2 describing himself as director. Thus there was no misrepresentation.
318. Ld. Senior Counsel also emphasized that acts of A-2 were never disowned by A-1 company after incorporation. He later on became its director also. He submitted that these acts are covered under the concept of pre-incorporation agreements. He asserted that these can be specifically enforced also in courts of law.
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319. He prayed for acquittal of A-2.
ARGUMENTS ON BEHALF OF A-3 RAKESH AGRAWAL
320. Ld. Counsel Sh. Hemant Shah made detailed submissions on behalf of A-3.
321. More or less, he canvassed the same contentions as were made on behalf of A-2. Ld. Counsel also referred to concept of pre-incorporation contracts and submitted that A-3 cannot be held liable for the same.
322. Ld. Counsel contended that acts of A-3 cannot be tranced to inception of the transaction and, therefore, A-3 is not liable for cheating.
323. He also prayed for acquittal of A-3.
REBUTTAL ARGUMENTS ON BEHALF OF CBI
324. Ld. DLA for CBI rebutted all the contentions of the Ld. defence Counsels.
325. Regarding the contention that the company cannot be held responsible for the acts done by the promoters, Ld. DLA submitted that the company, after its incorporation, had continued to pursue the application for allocation of coal block which is sufficient to show that it had accepted the previous acts CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 113 of 194 of its promoters. Ld. DLA referred to Section 11 IPC which defines 'person'.
326. Rebutting contentions made on behalf of A-2, Ld. DLA submitted that A-2 became director of the company/A-1 only on 31.10.2003. He referred to minutes of the first meeting of the board of directors dated 22.12.1999 in which name of A-2 does not figure as a director or promoter. Further he referred to the minutes of the first Annual General Meeting ("AGM") dated 30.09.2000 wherein also name of A-2 is not mentioned. Ld. DLA contended that no where in these minutes, there is any reference of any application for allocation of coal block. He thus submitted that A-2 acted to misrepresent and induce the Govt. of India for allocation of the coal block.
327. He referred to Form 1-A regarding availability of name of the company and submitted that it was not certain at that time whether the name of the company will be B.S. Ispat Ltd. or not but at the very same time, A-2 and A-3 not only made correspondence on the letter head containing the name B.S. Ispat Ltd. but they also describe themselves as its directors.
328. Regarding the requirement of an applicant being a company, registered under the Companies Act, as required u/s 3 of CMN Act, Ld. DLA referred to an earlier decision made by my Ld. Predecessor in the case CC NO. 8570/2016, titled CBI Vs. M/s Gondwana Inspat Ltd & Ors. dealing with the same CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 114 of 194 issue. My Ld. Predecessor had held that it was required that an applicant must have been a company duly registered under the Companies Act.
329. Regarding the contention that allocation letter cannot be construed as property, Ld. DLA referred to the observations of the Hon'ble Supreme Court in the case of Manohar Lal Sharma (supra). He particularly referred to para 71 thereof:
"71. Learned Attorney General accepted the position that in the absence of allocation letter, even the eligible person under Section 3(3) of the CMN Act cannot apply to the State Government 53 for grant of prospecting licence or mining lease. The right to obtain prospecting licence or mining lease of the coal mine admittedly is dependant upon the allocation letter. The allocation letter, therefore, confers a valuable right in favour of the allottee. Obviously, therefore, such allocation has to meet the twin constitutional tests, one, the distribution of natural resources that vest in the State is to sub- serve the common good and, two, the allocation is not violative of Article 14."
330. Regarding contentions made on behalf of A-2, Ld. DLA submitted that A-1 company was not registered with RoC as on 28.06.1999 or till 01.12.1999. A-2 was in no way a director of the said company but he still described himself as such which amounts to misrepresentation.
331. Ld. DLA also pointed out that the company A-1 on one hand, and A-2 and A-3 on the other hand, are making CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 115 of 194 contrary submissions. While A-2 and A-3 are describing their acts as acts on behalf of the company/A-1 and as pre- incorporation agreements, but on the other hand company A-1 is disowning those acts and contending that only A-2 and A-3 are liable for those acts as those were not ratified.
332. Ld. DLA referred to few more decisions of my Ld. Predecessor made in the case CC No. 05/14, titled CBI Vs. M/s Jharkhand Ispat Pvt. Ltd. & Ors.; CC No.01/15, titled CBI Vs. M/s. Rathi Steel & Power Ltd. and CC NO. 8570/2016, titled CBI Vs. M/s Gondwana Inspat Ltd & Ors. and submitted that these issues had also cropped up in those cases and were decided accordingly.
333. Regarding the charge u/s 406 IPC, Ld. DLA clarified that coal was used by the company in violation of the mining conditions.
334. All the contentions of the learned counsels will be noted in detail in the next part.
PART -- G THE ANALYSIS AND DECISION OF THE COURT
335. I have considered the arguments advanced by Ld. Counsels for the parties. I have perused the record. I have also gone through their written submissions.
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336. Primarily, the offence concerned in the present case is of cheating. The offence of cheating is defined u/s 415 IPC. Section 415 of IPC reads 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 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."
337. Section 420 IPC reads as under:
"420. Cheating and dishonestly inducing delivery of property.--
Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
338. From perusal of the above-noted provisions, it is found that the ingredients of the offence of cheating are:
(i) there should be fraudulent or dishonest inducement of a person by deceiving him;
(ii) (a) the person so deceived should be induced to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 117 of 194 deliver any property to any person, or to consent that any person shall retain any property; or
(b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and
(iii) in cases covered by (ii)(b) above, the act or omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.
(As held in Ram Jas v. State of UP (1970) 2 SCC 740)
339. It will also be fruitful to note definitions of 'dishonestly' and 'fraudulently'. Fraudulently has been defined under S. 25 IPC as under:
25. "Fraudulently".--A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.
340. Dishonestly has been defined under S. 24 IPC as under:
24. "Dishonestly".--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly".
341. What is wrongful gain and wrongful loss are provided in S. 23 IPC. as under:
23. "Wrongful gain".--"Wrongful gain" is gain by unlawful means of property to which the person gaining is not legally entitled.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 118 of 194 "Wrongful loss".--"Wrongful loss" is the loss by unlawful means of property to which the person losing it is legally entitled.
Gaining wrongfully, losing wrongfully.--A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.
342. What is the meaning of the phrase "deceiving any person" as used in the definition of cheating as provided in Section 415 IPC?
343. In the case of Swami Dhirendra Brahamchari Vs. Shailendra Bhushan, 1995 Cr. L.J. 1810 (Delhi), Hon'ble Delhi High Court while dealing with the word deceiving as used in S. 415 IPC, observed that generally speaking "deceiving" is to lead into error by causing a person to believe what is false or to disbelieve what is true and such deception may be by words or by conduct. A fraudulent representation can be made directly or indirectly.
344. Hon'ble Allahabad High Court in the case of P.M. Natrajan Vs. Krishna Chandra Gupta, 1975 Cr. L.J. 899 (All.) explained the word "deceive" as indicating inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine.
345. Hon'ble Supreme Court in the case of Ellerman & CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 119 of 194 Bucknall Steamship Co. Ltd. vs Sha Misrimal Bherajee, AIR 1966 SC 1892, explained "deceit" as a false statement of a fact made by a person knowingly or recklessly with the intent that it shall be acted upon by another who does act upon it and thereby suffers damage.
346. Thus, it is clear that in all such cases of deception, the object of the deceiver is fraudulent. He intends to acquire or retain wrongful possession of that to which some other person has a better claim. So, where a person parts away with a property while acting on such a representation of an accused believing in the truth thereof, it clearly amounts to deceiving the person. However, it is also important that the person practicing the deceit knows or has reason to believe the said representation to be false. Though in the true nature of things, it is not always possible to prove dishonest intention by direct evidence. It can be, however, proved by number of circumstances from which a reasonable inference can be drawn. Further the explanation to Section 415 IPC i.e. cheating states that a dishonest concealment of facts is a deception within the meaning of this section.
347. Deception is not defined under Indian Penal Code. However, it is now well settled through various decisions that a person deceives another when he causes that another to believe what is false or misleading as to a matter of fact, or leads him into error. A willful misrepresentation of a definite fact with intent to defraud constitutes an offence of cheating. Further, it is CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 120 of 194 not sufficient to prove that a false representation had been made but it must be proved that the representation was false to the knowledge of the accused and was made to deceive the complainant.
348. The deception within the meaning of section 415 IPC can happen through misrepresentation. In the present case, the prosecution has alleged that misrepresentation about status of applicant company BSIL was made by the accused persons. This misrepresentation was made on several occasions.
349. As regards inducing fraudulently or dishonestly, Hon'ble Supreme Court after extensively referring to various case law on the issue in the case of Dr. Vimla (supra), observed that while the definition of "dishonestly" involves a pecuniary or economic gain or loss but as regard "fraudulently", it is primarily the intent to defraud which is an important ingredient. The word "defraud" includes an element of deceit. It was also observed that by way of their very definition as provided under IPC, the word "fraudulently" by its construction excludes the element of pecuniary economic gain or loss.
350. It was observed that if the expression "fraudulently" were to be held, to involve the element of injury to the persons or the persons deceived, it would be reasonable to assume that the injury should be something other than pecuniary or economic loss. Though almost always an advantage to one causes loss to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 121 of 194 another and vice-versa, it need not necessarily be so. It should be held that the concept of fraud would include not only deceit but also some injury to the person deceived. It would be thus appropriate to hold by analogy drawn from the definition of "dishonestly" that to satisfy definition of "fraudulently" it would be sufficient if there was a non-economic advantage to the deceiver or non-economic loss to the deceit. Both need not co- exist. It was also observed by Hon'ble Supreme Court that the juxtaposition of the two expressions "dishonestly" and "fraudulently" used in the various sections of the Code indicate their close affinity and therefore the definition of one may give colour to the other. The aforesaid observations of Hon'ble Supreme Court culling out the difference between the words "dishonestly" and "fraudulently" have been followed consistently in all subsequent cases involving the issue of cheating.
351. The issue which comes up is whether the acts of accused persons were fraudulent acts done with a dishonest intention to deceive MoC, Govt. of India and whether those acts actually had the effect of deceiving Screening Committee, MoC and thereby Govt. of India or not. In other words, whether the accused persons by way of such fraudulent acts done with dishonest intention actually deceived Screening Committee, Ministry of Coal or not and thereby induced it to deliver a property to them.
352. It is also a settled position in law that for proving an CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 122 of 194 offence of cheating, it must be shown that the fraudulent or dishonest intention was existing right at the beginning of the transaction. Reference may be made to Hira Lal Hari Lal Bhagwati v. CBI, (2003) 5 SCC 257 wherein it was observed that:
"40. It is settled law, by a catena of decisions, that for establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were required to be complied with after importation of the machine. Since the GCS could not comply with it, therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as office-bearers right at the time of making application for exemption."
353. Guided as above, the acts of the accused persons have to be evaluated.
354. Let us take notice of points of for determination in the present case.
POINTS FOR DETERMINATION
355. Based on the arguments and submissions of the learned counsels for the parties, the following points for determination arise in the present case:
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a) Whether any misrepresentation(s) was/were made by accused persons to MoC?
b) Whether those misrepresentations deceived any person?
c) Who is responsible for making those misrepresentations and thereby deceiving and fraudulently or dishonestly inducing the said person?
d) Whether there was any conspiracy among all the accused persons?
e) Whether the offence of cheating is made out against A-1 to A-3?
f) Whether the offence u/s 406 IPC is made out against A-1 company?
POINT FOR DETERMINATION NO. (a):
WHETHER ANY MISREPRESENTATION(S) WAS/WERE MADE BY ACCUSED PERSONS TO MoC?
356. It is essential to find out whether there was/were any misrepresentation(s) or not because only if there was/were such misrepresentation(s), the prosecution can sustain its case. This is because only if there was/were misrepresentation(s), there could be deception and ultimately dishonest or fraudulent inducement.
357. Sh. A.P. Singh, Ld. DLA submitted that A-1 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 124 of 194 company was not an incorporated company on the date when the application [Ex. P-60 (Colly.), D-1] was made for allocation of the coal block i.e. 28.06.1999 (date of the application) or 15.07.1999 (date of submission of the application to MoC). Ld. DLA argued that the application made in the name of a non- existing company was liable to be rejected but it was misrepresented to MoC that the company was in existence.
358. Ld. DLA referred to the certificate of incorporation [Ex. P-5, D-25] as per which the company was incorporated on 01.12.1999 only. He also referred to certificate of commencement of business which is dated 27.04.2000 [Ex. P-6, D-26]. Ld. DLA thus contended that before 01.12.1999, A-1 company was not even in existence and it could not commence business before 27.04.2000.
359. He referred to the provisions of CMN Act and submitted that as per Section 3 thereof, only a company could mine the coal. Referring to further provisions of CMN Act, namely Section 2(c), Ld. DLA submitted that 'company' meant a company registered under the Companies Act, 1956.
360. Referring to the application for allocation dated 28.06.1999 [Ex. P-60 (Colly.), D-1], Ld. DLA pointed out that the application was moved by A-2 Mohan Agrawal and he signed thereon as director of A-1 company. He referred to documents from Office of Registrar of Companies containing details of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 125 of 194 directors [Ex. P-13 (Colly.) which is part of Ex. PW-15/A (Colly.), D-36] and submitted that A-2 became director in A-1 company only on 31.10.2003. He referred to the minutes of first AGM dt. 30.09.2000 [Ex. P-11 (Colly.)]. He submitted that perusal of the same shows that A-2 was not present in the said AGM nor it is mentioned that he was either promoter or director of A-1 company.
361. He also pointed out that A-3 Rakesh Agrawal too made correspondences representing himself as director of the company. He referred to detailed application dt. 03.09.1999 [Ex. PW 2/A-4 (Colly.), page 8-24, D-1] submitted to MoC and detailed application dt. 03.09.1999 [Ex. PW-3/A-4 (Colly.), page 4-21, D-115] submitted to MoS. Both have been signed by A-3 as director of A-1 company. It was again misrepresented that BSIL was a company and A-3 was a Director.
362. Ld. DLA forcefully submitted that MoS issued recommendation in favour of A-1 company vide letter dated 23/24.09.1999 [Ex. PW-2/A-5, page 25-26, D-1 or Ex. PW-3/A- 5, page 22-23, D-115] upon inducement by the accused persons. He submitted that CMPDIL also made its recommendation vide letter dated 05.11.1999 [Ex. PW2/A-7, page 28, D-1] in favour of the company. Similarly, CIL made recommendation in favour of A-1 company vide letter dated 01.03.2000 [Ex. PW 2/A-10, page 34, D-1].
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363. He then referred to the meeting of the 15th Screening Committee held on 06.03.2000. The meeting was attended by A- 2 on behalf of A-1 company as per the attendance sheet [Ex. PW- 2/D-4 (Colly.), page 3-5, D-32]. A-2 had made presentation also on behalf of the company. He submitted that even on this date, A-2 was not a director of A-1 company. The 15 th Screening Committee made its recommendation in favour of A-1 company on 06.03.2000 vide minutes [Ex. PW 2/D-5 (Colly.), page 33-60, D-32]. Pursuant to this, allocation letter dated 25.04.2000 [Ex. PW 2/D-6 (Colly.), page 161-162, D-32] was issued to the company. However, due to incomplete processing at the end of the State Govt. of Maharashtra, this allocation letter was withdrawn and company was asked to approach the State Govt. of Maharashtra. After company so approached the State Government, fresh recommendation was issued by the State Govt. vide letter dated 11.09.2000 [Ex. PW 21/B, D-15, page 154, D-15]. Thereafter, MoC issued final allocation dated 25.04.2001 [Ex. PW 2/A-11, page 193-194, D-1].
364. Ld. DLA thus contended that accused persons were able to obtain allocation of Marki Mangli coal block on the basis of their misrepresentations and inducements.
365. Sh. Manoj Arora, Ld. Counsel for A-1 company argued that none of the members of the Screening Committee were examined as witness to prove any inducement. He relied upon Hriday Ranjan Verma Vs. State of Bihar & Anr., AIR 2000 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 127 of 194 SC 2341, in this regard. He contended that none of the witnesses who have been examined have stated that they were induced by the misrepresentations made by the accused persons. Ld. Counsel submitted rather on the date of consideration of the application by the Screening Committee, and its in-principle approval on 06.03.2000, the A-1 company had already been incorporated on 01.12.1999. Therefore, there was no occasion for any misrepresentation.
366. Sh. Siddharth Aggarwal, Ld. Sr. Advocate for A-2 contended that there was no requirement of an applicant being an incorporated company for obtaining coal block. He submitted that incorporation was not mandatory. He contended that A-2 is accused of misrepresenting the status of the A-1 company. He emphasized that this case stems from misconception of the investigating agency that it was a requirement that an applicant had to be a company incorporated under the Companies Act.
367. He forcefully submitted even this requirement was met by A-1 company. He pointed out that on the date when the first allocation of the coal block was made/recommended by the Screening Committee i.e. 06.03.2000, the company had been incorporated with the concerned RoC on 01.12.1999. He further submitted that by the date second/final allocation was made/recommended i.e. 25.04.2001, the company had already got certificate to commence business. He referred to testimonies of the witnesses and submitted that they have admitted that at the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 128 of 194 relevant time, there was no fixed format of application or any set criteria for applicants seeking allocation. As such, there was no misrepresentation or inducement on the part of A-2 regarding incorporation. Ld. Sr. Counsel referred to various documents in this regard. He also referred to the provisions of CMN Act, 1973.
368. He referred to OM dated 14.07.1992, [Ex. PW-11/B, D-168] and submitted that there was no requirement at that time that an applicant should be a company. He further referred to the minutes of the first meeting of the Screening Committee held on 14.07.1993 [Ex. PW-23/S-13 (Colly.), D- 166] and mentioned that the word "Firms" has been used in the said minutes and their representatives were present as noted in the minutes.
369. He then referred to letter dated 29.06.1999, [Ex. 8/E-2 (Colly.), D-109] vide which constitution of State Level Committee was proposed at the level of Govt. of Maharashtra. Ld. Sr. Counsel submitted that the overall genuineness of an applicant was the main concern to be addressed by the State Level Committee. He then referred to the record notes of the first State Level Committee meeting dated 30.09.1999, [Ex. PW-8/E- 2 (Colly), D-109] and pointed out that for the first time, it was decided to check whether the applicant was a company registered under the Companies Act, 1956 or not. He also referred to letter dated 13.07.1999 [Ex. PW 2/A-4, page 19, D-1] which was issued by the Director, G&M, Govt. of Maharashtra to Secretary CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 129 of 194 (Trade, Commerce & Mining Department), Govt. of Maharashtra and the Directorate expressed its prima facie approval for allocation of Marki Mangli block to M/s BSIL but it was also conveyed that final recommendation would be made after due scrutiny by the State Level Committee.
370. He referred to application for NOC dated 03.07.1999 [Ex. PW-8/E-1 (Colly.), D-108] made by BSIL to Govt. of Maharashtra. Next he referred to IEM dated 12.07.1999 [Ex. PW-23/L, D-101 and Ex. PW-23/S-13, D-85] and pointed out that in column III of the IEM wherein details of the registration number of the company were to be mentioned, the company had mentioned as "Applied". Thus, Ld. Sr. Counsel strongly contended that no wrong statement was made by the accused.
371. Ld. Sr. Counsel had also referred to Form 1A [Ex. PW-14/J (Colly.), D-116] dated 03.07.1999 and pointed out that the promoters had applied for availability of name of the company as early as on 03.07.1999 which shows their bona fides in incorporating the company.
372. He then referred to Acknowledgement dated 13.07.1999 [Ex. PW 2/A-4, D-1]. He then referred to various documents submitted by the promoters to the office of RoC, Maharashtra on 14.07.1999 [Ex. PW 14/J, D-116].
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373. Ld. Sr. Counsel referred to the record notes of the second meeting of State Level Committee dated 14.01.2000 [Ex. PW 8/G (Colly.), D-170] and pointed out that case of the company BSIL was considered and after due discussion, recommendation was made in favour of BSIL for Marki Mangli coal block. Thereafter, he referred to the minutes of the 15 th Screening Committee meeting held on 06.03.2000 [Ex. PW 2/D- 5, D-32] wherein Marki Mangli coal block was recommended for allocation to BSIL subject to certain conditions. The recommendation was conveyed vide letter dated 25.04.2000 [Ex. PW-2/D-6, D-32]. However, vide letter dated 11.08.2000 [Ex. P- 73, D-1], the MoC withdrew the recommendation/allocation conveyed vide letter dated 25.04.2000 due to incomplete data i.e. non-receipt of comments/recommendations of the State Level Committee of the Govt. of Maharashtra.
374. Thereafter, Govt. of Maharashtra finally recommended in favour of BSIL vide letter dated 11.09.2000 [Ex. PW 21/B, D-15, page 154, D-15] and sent the same to MoC. In its turn, the MoC finally allocated Marki Mangli coal block to BSIL vide letter dated 25.04.2001 [Ex. PW 2/A-11, D-1].
375. Ld. Sr. Counsel thus vehemently submitted that the allocation to BSIL was not a result of any misrepresentation or inducement. On the contrary, rather it was a decision taken after due deliberations and discussions. According to Ld. Sr. Counsel, when such high level of scrutiny had been conducted by CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 131 of 194 stakeholders i.e. the MoC, the MoS and Govt. of Maharashtra, it cannot be said to be a case of cheating at any point of time. He contended that the decision to allocate Marki Mangli coal block to BSIL was an informed decision.
376. Referring to provisions of CMN Act, Ld. Sr. Counsel submitted that according to provisions of this Act, one is not required to be a company at the time of application for allocation of coal block. Rather the requirement of being a company is to be seen only at the time of mining. He pointed out that when BSIL started mining the coal, it was very much a registered company having certificate of commencement of business as well.
377. Ld. Sr. Counsel argued that the promoters had taken contemporaneous steps to get the company incorporated. These steps show their intention and bona fides. He referred to Form 1A dt. 03.07.1999 wherein availability of name of company was sought for and to first copy of Memorandum of Association and Articles of Association dt. 14.07.1999 [both part of Ex. PW-14/J, D-116]; to revised copy of Memorandum of Association and Articles of Association dt. 17.11.1999 [Ex. PW-23/D-10, D-14]; to certificate of incorporation dt. 01.12.1999 [Ex. P-5, D-25]; and finally to certificate of commencement of business dt. 27.04.2000 [Ex. P-6, D-26]. He argued that these steps show that accused had all the intentions to get BSIL incorporated as soon as possible and which they did.
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378. He also pointed out that contemporaneous disclosures were also made to various authorities disclosing the status of BSIL. As such there was no mens rea. He referred to letter dt. 29.01.2001 [Ex. PW-2/A (Colly.), D-1]; letter dt. 01.05.2001 [Ex. P-195, D-8]; and mining plan dt. November, 2002 [Ex. PW-23/D-5, D-9] which were in knowledge of MoC. He referred to relevant part of cross-examination of PW's also in this regard wherein they have admitted that fact of incorporation of BSIL had come to the knowledge of MoC. Similarly, he referred to file of Industries Dept. of Govt. of Maharashtra [Ex. PW-19/B, D-15] wherein fact of registration was brought to their knowledge. He also referred to IEM dt. 12.07.1999 [Ex. PW- 23/L, D-101 and Ex. PW-23/S-13, D-85] wherein 'applied' was mentioned at the relevant coloumn. This document was forwarded to MoS and Director of Industries, Govt. of Maharashtra.
379. Ld. Sr. Counsel has also vehemently submitted that no official of MoC has been made accused which means that there was no discrepancy in their decision making process. He wanted to convey that in such a scenario, the prosecution cannot sustain its case since all material facts had been disclosed to MoC and if even after that allocation has been made in favour of BSIL, the same is not a result of any cheating. He contended that there is no complaint from MoC nor they had cancelled allocation later.
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380. He also contended that there is no charge of any misrepresentation to MoS. He submitted that there could be none as recommendation made by MoS is not based on status of BSIL. Rather it is based upon technical aspects as is visible from documents of MoS. He contended that incorporation was not a condition precedent for MoS. He referred to testimony of PW-3 in this regard. Moreover, the status of BSIL was always in knowledge of MoS as copy of IEM was sent to it and regular updates were being submitted to the said ministry.
381. Ld. Sr. Counsel submitted that vide order dated 26.09.2023, this Court had discharged the accused persons in CC. 249/2019 in case titled CBI Vs. Suresh Kumar Sharma & Anr. Ld. Counsel further submitted that mining was permitted to be done by a company which was not even in existence at the time of application and yet mentioning its name in the application form was not considered a fraudulent act as long as it was eventually incorporated. The same also demonstrates that there was no direct nexus between the embargo stipulated in the CMN Act and the process of application for captive coal block.
382. Relying upon the case G.V. Rao Vs. L.H.V. Prasad & Ors. (2000) 3 SCC 693 and M N G Bharateesh Reddy Vs. Ramesh Ranganathan & Anr. 2022 SCC OnLine SC 1061, Ld. Counsel submitted that in order to constitute the offence of cheating, delivery of property should be a consequence of the alleged misrepresentation/deception. Ld. Counsel further CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 134 of 194 submitted that there is sufficient material on record to demonstrate that the allocation of coal block was not a consequence of the alleged misrepresentation by BSIL.
383. Ld. Counsel further relied upon Mariam Fasihuddin & Anr. Vs. State by Adugodi Police Station & Anr., 2024 SCC OnLine SC 58, N. Raghavender Vs. State of Andhra Pradesh, (2021) 18 SCC 70 and Dr. Vimla Vs. Delhi Administration, AIR 1963 SC 1572 and submitted that the use of the word 'Limited' as a suffix in the present case can at best qualify as an offence under the Companies Act for its improper use at a time when the company was not incorporated. However, the same cannot be conflated to qualify as 'deceitful' in the present case. He also submitted that not every unlawful act automatically qualifies as 'deceitful' and the Court must evaluate whether the motivations prompting such purportedly illegal acts are rooted in deceit, whether the same confer any undue benefit upon the accused and also the role that such acts played in delivery of property.
384. Ld. Counsel submitted that when two views are possible, the one favouring the accused person should be adopted.
385. Sh. Hemant Shah, Ld. Counsel for A-3 made almost similar submissions with respect to A-3. He too relied on Mariam Fahisuddin (supra).
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386. Rebutting the submissions of learned counsels for the defence, Ld. DLA submitted that the IEM was never submitted to MoC or MoS or Govt. of Maharashtra. He pointed out that only acknowledgement of IEM was submitted to Govt. of Maharashtra.
387. Regarding the requirement of an applicant being a company, registered under the Companies Act, as required u/s 3 of CMN Act, Ld. DLA referred to an earlier decision made by my Ld. Predecessor in the case CC NO. 8570/2016, titled CBI Vs. M/s Gondwana Ispat Ltd & Ors. dealing with the same issue. My Ld. Predecessor had held that it was required that an applicant must have been a company duly registered under the Companies Act.
388. Ld. Sr. Counsel for A-2 submitted that there are significant differences between the case of Gondwana Ispat Ltd ("GIL") and BSIL and, therefore, the judgment dated 27.04.2018 passed in GIL is not applicable to the present case.
389. He submitted that no steps were taken to get GIL registered as a company for 18 months even after being informed about availability of name. However, contemporaneous steps were taken to get BSIL registered within 3 months of applying for the coal block, and before the all the material dates on which the case was considered. In the case of GIL, the pre-incorporation acts were not ratified by any overt or covert act of seeking CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 136 of 194 allocation of concerned coal block. However, there was ratification of pre-incorporation expenses in the present case vide the first Board Meeting and the company never objected to any of pre-incorporation actions. In fact, the company complied with all the claims made by A-2 Mohan Agrawal in his communications. In the case of GIL, there was concealment not only about the status but even there was no actual intention to set up EUP. Also there was no project report or techno-economic feasibility report submitted in support of the new proposal to manufacture steel billets. However, in the present case, registration of the company was bonafide, and not dependent on the outcome of the application. Even there is no allegation of any discrepancy or misrepresentation in the steps taken by BSIL in relation to setting EUP. Thus, it was submitted that mens rea was demonstrable from all the aforesaid distinguishable facts and circumstances in the case of GIL which do not exist in the case of BSIL. Therefore, the said judgment is not applicable in the present case.
390. I have considered the submissions.
391. The issue at hand is dependent on Sec. 3(3)(a) of the CMN Act. The requirement of an applicant desirous of obtaining a coal block should be a company or not is traceable to this provision.
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392. It will be appropriate to note provisions of Section 3(3)(a) of CMN Act which reads as under:
3. ACQUISITION OF RIGHTS OF OWNERS IN RESPECT OF COAL MINES.
(1) xxxx
(2) xxxx
(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
(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) xxxx
393. It is apparrent that only a company can be allocated a coal block because only a company can mine the coal. On the contrary, Ld. Counsels for the accused have submitted that the requirement of being a company was relevant only at the time of mining of the coal and not prior to that. It was 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 138 of 194 block. They focussed on the words 'shall carry on mining operation'.
394. Mining operation is preceded by allocation of the coal mine. There cannot be mining operation without allocation of a coal mine. The defence wants to restrict meaning of the phrase 'mining operation' to actual mining i.e. extraction of coal. Such restrictive meaning is uncalled for and unjustified. If the intrepretation given by the defence is accepted, then anyone can get a coal mine allocated and involve a company to mine the coal. This was never the intent and purpose of the amendment to CMN Act. In my view, from the very inception i.e. filing of application for allocation of coal block, the applicant is required to be a company.
395. Ld. Senior Counsel for A-2 had contended that at the time when application was made by A-2, there were no guidelines of MoC that an applicant was required to be a company. He highlighted 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:
"Names of representatives of firms/power generating companies who were in attendance"
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396. To appreciate the contentions of Ld. Counsels, at this stage, it is appropriate 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 ("CMN Act") and other notifications dated 15.03.1996 and 12.07.2007 were extensively dealt with. Besides, it also dealt with the interplay between the provisions of MMDR Act, 1957 and CMN Act, 1973. Para 30 to Para 39 from the said order dated 25.08.2014 read as under:
"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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 140 of 194 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 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 141 of 194 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 in Chapter VI, for the vesting in it under Section 3 of the right, title and interest of the owner, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 142 of 194 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, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 143 of 194 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 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 144 of 194 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 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 145 of 194 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."
397. Thus from the aforesaid observations of Hon'ble Supreme Court also, it is crystal clear that the argument that CMN Act, 1973 does not require an applicant to be a company or that the requirement of incorporation comes up only when the coal is to be mined is per se misconceived and fallacious.
398. 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 a number of private companies started applying for allocation of various coal blocks for their captive use. It is also an undisputed position that the coal blocks were permitted to be allocated for captive use only. Even in the present case, allocation of Marki Mangli 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 146 of 194 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 amply 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.
399. Further Section 2(j) defines a " Mining Company" as a company owning a coal mine and thus once again it is apparent 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.
400. 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 must be observed that merely from these words, it cannot be deduced that there was no requirement of being a company. The wordings of the minutes cannot change CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 147 of 194 the meaning of letter of the law. The CMN Act is very clear that an applicant had to be a company. Otherwise also, if wording of the minutes is any indication, then title of the said minutes convey something else as the same only talks of " firms/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 3rd 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 cannot 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.
401. It will be also fruitful to refer to some further observations of Hon'ble Supreme Court in the case Manohar Lal Sharma V. Union of India (supra), as regard the inter play CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 148 of 194 between MMDR Act, 1957 and CMN Act, 1973. Para 57 and Para 58 of the order will be worth reproducing in this regard:
"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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 149 of 194 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 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 150 of 194 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."
402. Thus from the aforesaid discussion, it is very 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.
403. Alternatively, even if the contentions of the defence are taken as correct, still it makes no difference as BSIL, as at the time of application, cannot be considered even as a Firm. It had no legal status of being a Firm either on the said date. Thus, considered from any angle, contentions of the defence are liable to be rejected.
404. Having held that there was requirement of applicant being a company, now it is to be seen what was the actual effect of acts of A-2 and A-3.
405. The application in question is Ex. P-60 (Colly.). The same reads as under:
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 151 of 194 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 152 of 194 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 153 of 194
406. As is visible, this application is on letterhead of A-1 company. It is signed by A-2. At the first glance, the impression generated by this application is that B.S. Ispat Ltd. is a company. The use of letterhead is indicative of the intention of the accused persons. The formal character of the application shows that accused wanted to convey clearly that B.S. Ispat Ltd. was a company. However, as a matter of fact, it was not so. B.S. Ispat Ltd. became a company only on 01.12.1999.
407. In addition to the application dt. 28.06.1999, A-2 and A-3 had sent various other communications also describing themselves as Directors of A-1. These are (i) Letter dated 28.06.1999 signed by A-2 given to DGM, Govt. of Maharashtra [Part of Ex. PW 8/E-1 (Colly.), D-108]; (ii) Letter dated 08.07.1999 signed by A-2 given to DGM, Govt. of Maharashtra [Part of Ex. PW 8/E-1 (Colly.), D-108]; (iii) Letter dated 12.07.1999 signed by A-2 given to DGM, Govt. of Maharashtra for issuing NOC; (iv) Detailed application dated 03.09.1999 [Ex. PW 2/A-4 (Colly.), page 8-24, D-1] signed by A-3 submitted to MoC; (v) Detailed application dated 03.09.1999 [Ex. PW-3/A-4 (Colly.), page 4-21, D-115] signed by A-3 submitted to MoS; (vi) Form-1 dated 23.07.1999 signed by A-3 given to Collector, Yavatmal District, Maharashtra [Ex. PW 19/B (Colly.), page 4- 14, D-15]; and (vii) Letter dated 25.08.1999 signed by A-3 given to Secretary, (Trade, Commerce & Mining Department, Govt. of Maharashtra) [Ex. PW 19/B (Colly.), page 3/c, D-15].
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 154 of 194
408. The inevitable conclusion is thus that it was misrepresented that BSIL was an incorporated company. The cumulative effect of all these correspondences and applications/letters was to create an impression about BSIL was a corporate entity which was complete falsehood.
409. The defence has pinned its hope on few admissions by witnesses. They rely on the admissions (i) that in the IEM, in the coloumn regarding details of registration of BSIL, it was mentioned as 'applied'; and (ii) that MoC was told about date of incorporation as 01.12.1999.
410. However, these admissions are of no help to them. Merely mentioning 'applied' in the IEM does not take the case out of realm of misrepresentation because what was significantly represented in the application for allocation was that BSIL was a company. The piece of information in IEM was too little and too less. It was almost insignificant. No one would have noticed those two words sneaked in by the accused in IEM. If the accused really had good intentions, they would not have used letterhead of BSIL and A-2 and A-3 would not have described themselves as Directors.
411. Accused persons have utterly failed to explain why in the first instance BSIL was described as company and why A- 2 and A-3 described themselves as Directors. They have failed to explain why letterhead of BSIL was used. This failure assumes CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 155 of 194 importance. Nowhere in the application it was mentioned that BSIL was yet to be incorporated.
412. They have also failed to explain what was the hurry to file an application in the name of BSIL when it was not even incorporated. Not a word has been stated in this regard. The onus to explain was on the accused persons.
413. The defence has taken shelter in the contention that it was not mandatory to be a company to obtain a coal block at the relevant time. Even if this contention is assumed to be correct, still accused had no justification to apply for coal block in the name of a fictitious entity. BSIL did not fall under category of 'firm' also. As a matter of fact, it did not fall under any category of any business organisation. Thus judged from their own contention, they are still guilty of misrepresentation.
414. Informing MoC about date of incorporation later on does not serve any purpose. First allocation letter had already been issued on 25.04.2000. Date of incorporation was told to MoC on 01.05.2001 (as stated by PW-23/IO). It is true that first allocation letter was withdrawn. The second/final allocation letter was issued on 25.04.2001. As such, information to MoC about date of incorporation of BSIL as 01.12.1999 on 01.05.2001 was of no value. Further, the defence is forgetting that what was of immense importance was earning the recommendation of the Screening Committee which was earned on 06.03.2000 and which was traceable to application dt. 28.06.1999. After CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 156 of 194 withdrawal of first allocation letter, the matter was only processed in MoC after receipt of recommendation from Govt. of Maharashtra. The matter was not put up before Screening Committee again. It was a continuous process traceable to 15 th Screening Committee.
415. The facts of the case CBI Vs. Suresh Kr. Sharma (decided by this court) were different. In that case, application was not made in the name of a fictitious entity. Thus no support can be drawn by Ld. Sr. Counsel from that case.
416. Thus is is held that there were misrepresentations made by accused persons.
POINT FOR DETERMINATION NO. (b):
WHETHER THOSE MISREPRESENTATIONS DECEIVED ANY PERSON?
417. Ld. DLA for CBI contended that the misrepresentations made by the accused persons A-1 to A-3 had induced the MoC and ultimately of the Govt. of India. He argued that only because of these misrepresentations, the Govt. of India was induced to issue the letter of allocation of coal block to A-1 company.
418. Ld. counsels for the accused vehemently submitted that the prosecution has miserably failed to prove inducement. They argued that no witness has been produced by the prosecution to prove that there was any inducement or anybody CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 157 of 194 was induced. They referred to testimonies of various witnesses and highlighted that no witness has stated that he was induced by the misrepresentations of the accused persons.
419. Ld. Prosecutor rebutted these submissions. He submitted that the term 'person' includes the Govt. He relied upon Kanumukkala Krishna Murthy vs. State of AP, (supra).
420. I have considered the submissions.
421. Inducement like any other fact can be proved directly or through circumstantial evidence as well. After perusing the entire material on record, it cannot be said that there is no material to prove inducement.
422. It is not necessary always to examine a witness to prove inducement directly. It can be inferred from circumstances also. The emphasis of the defence on non-examination of members of Screening Committee is misplaced. Further, it has been established that the portrayal of the applicant as a company was taken note of and considered by the Screening Committee. Nowhere it was specified by the accused persons that the application was being made on behalf of a company which was yet to be incorporated. On the contrary, the application was made as if M/s BSIL was a duly incorporated company since beginning.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 158 of 194
423. It has to be kept in mind that the ultimate person cheated is the Govt. of India. The inducement of the Govt. can be established from documents as well.
424. From the files relating to the coal block allocation, it is amply clear that description of A-1 as a company was duly considered and acted upon.
425. The fact of incorporation of the company later on does not obliterate the offence. The fact situation at the time of inception of the transaction is to be considered.
426. After perusing Kanumukkala's case (supra), it is clear that MoC, Govt. of India can be considered as 'person' deceived.
427. Thus it is held that prosecution has established that there was inducement. It has established that Screening Committee, MoC, the MoS and Govt. of Maharashtra were induced to issue recommendations and Govt. of India was induced to issue the allocation letter.
POINT FOR DETERMINATION NO. (c):
WHO IS RESPONSIBLE FOR MAKING THOSE MISREPRESENTATIONS AND THEREBY DECEIVING AND FRAUDULENTLY OR DISHONESTLY INDUCING THE SAID PERSON?
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 159 of 194
428. Ld. DLA contended that A-1, A-2 as well as A-3 are liable for making misrepresentations to MoC. He further submitted that A-1 company though was not incorporated earlier and as such was non-existent on 28.06.1999 but after incorporation on 01.12.1999, the company too became part of the conspiracy and pursued the matter for allocation of coal block and therefore A-1 company is also liable for making misrepresentations.
429. Highlighting the roles of A-2 and A-3, Ld. DLA submitted that despite the company/A-1 not in existence prior to 01.12.1999, A-2 and A-3 misrepresented themselves as directors of the said company. Referring to the application for allocation dated 28.06.1999 [Ex. P-60 (Colly.), D-1], Ld. DLA pointed out that the application was moved by A-2 Mohan Agrawal and he signed thereon as director of A-1 company. He referred to [Ex. P- 13 (Colly.), also as Ex. PW-15/A (Colly.)] and submitted that A- 2 became director only on 31.10.2003. He referred to the minutes of first AGM dt. 30.09.2000 [Ex. P-11 (Colly.)]. He submitted that perusal of the same shows that A-2 was not present in the said AGM nor it is mentioned that he was either promoter or director of A-1 company.
430. He also pointed out that A-3 Rakesh Agrawal too made correspondences representing himself as director of the company. He referred to Ex. PW 2/A-4 (Colly.) and Ex. PW-3/A- 4 (Colly.). Both are letters dated 03.09.1999 on which A-3 has CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 160 of 194 signed as director of A-1 company.
431. Ld. DLA forcefully submitted that MoS issued recommendation in favour of A-1 company vide letter dated 23/24.09.1999 [Ex. PW-2/A-5] upon inducement by the accused persons. He submitted that CMPDIL also made its recommendation vide letter dated 05.11.1999 (Ex. PW2/A-7) in favour of the company. Similarly, CIL made recommendation in favour of A-1 company vide letter dated 01.03.2000 (Ex. PW 2/A-10).
432. He then referred to the meeting of the 15th Screening Committee held on 06.03.2000. The meeting was attended by A- 2 on behalf of A-1 company as per the attendance sheet [Ex. PW- 2/D-4 (Colly.)]. A-2 had made presentation also on behalf of the company. He submitted that even on this date, A-2 was not a director of A-1 company. The 15th Screening Committee made its recommendation in favour of A-1 company on 06.03.2000 vide minutes [Ex. PW 2/D-5 (Colly.)]. Pursuant to this, allocation letter dated 25.04.2000 [Ex. PW 2/D-6 (Colly.)] was issued to the company. However, due to incomplete processing at the end of the State Govt. of Maharashtra, this allocation letter was withdrawn and company was asked to approach the State Govt. of Maharashtra. After company so approached the State Government, fresh recommendation was issued by the State Govt. vide letter dated 11.09.2000 [Ex. PW 21/B, D-15, page 154, D-15]. Thereafter, MoC issued final allocation dated CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 161 of 194 25.04.2001 [Ex. PW 2/A-11]. Ld. DLA thus contended that accused persons were able to obtain allocation of Marki Mangli coal block on the basis of their misrepresentations and inducements.
433. Ld. DLA also submitted that as per Memorandum & Articles of Association of BSIL, initially there were four directors namely Rakesh S. Agrawal, Ashish M. Agrawal, Kishore H. Daga and Ms. Swarna G. Daga. A-2 Mohan Agrawal was not the initial director of the company despite that he made correspondences as Director of A-1 company BSIL.
434. Ld. DLA submitted that A-2 and A-3 were controlling the affairs of A-1 company BSIL. On 03.07.1999 A-2 had submitted another letter to Secretary (Mines), Govt. of Maharashtra for allocation of Marki Mangli captive coal block. Vide application dated 23.07.1999 A-3 as director of BSIL moved an application to the Collector, Yavatmal, Maharashtra for allocation of Marki Mangli Coal Block and also for mining lease. A-3 wrote a letter dated 25.08.1999 to Secretary Trade Commerce & Mining, Maharashtra and letter dated 12.07.1999 to Department of Industrial Policy respectively.
435. He further submitted that A-2 had attended 15th Screening Committee meeting held on 06.03.2000 on behalf of BSIL. However, A-2 and A-3 were formerly appointed as director of A-1 company M/s BSIL on 31.10.2003 and CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 162 of 194 01.12.1999 respectively.
436. It was thus submitted that A-2 and A-3 knowing fully well that neither A-1 company M/s BSIL was registered with RoC as on 28.06.1999 till 01.12.1999 nor they were the directors of the company, got recommendation in favour of A-1 company from MoS and CMPDIL and, therefore, cheated MoC, Govt. of India.
437. Ld. Counsel Sh. Manoj Arora for A-1 company submitted that prosecution has not brought any evidence to prove that the company had ratified the pre-incorporation acts of the Directors. He contended that qua the pre-incorporation contracts, only promoters/initial management are personally liable and not the company. He further submitted that at the time of the formation of the pre-incorporation contract, the company was not in existence, so neither did the principal-agent relationship exist, nor did the company become a party to these acts.
438. Ld. Counsel relied upon Kelner Vs. Baxter (1866) LR 2 CP 174 and Newborne Vs Sensolid [1954] 1 QB 45 and submitted that before the incorporation, the company can not be in existence, and if it is not in existence, then the acts, which the promoters of the unformed company have carried out or contracts signed would also be not in existence.
439. While referring to Section 9 of the Companies Act, CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 163 of 194 2013, Ld. Counsel submitted that an offence qua the 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. Therefore, any liability qua the company could only arise from the date of incorporation of A-1 company. He relied upon Solomon Vs. Solomon & Co. Ltd. [1897] AC 22. He contented that a company becomes a corporate entity only on the date of its incorporation. He also relied upon Commissioner of Income-Tax, Tamil Nadu Vs. City Mills Distributions (P) Ltd. 1996 SCC (2) 375, in this regard.
440. Ld. Counsel thus contended that A-1 is not liable for any misrepresentation.
441. Sh. Siddharth Aggarwal, Ld. Sr. Counsel for A-2 contended that acts of A-2 are covered under the concept of pre- incorporation agreements. Regarding pre-incorporation agreements, Ld. Sr. Counsel also relied upon, The Weaver Mills Ltd., Rajapalayam v. Balkis Ammal & Ors, 1967 SCC OnLine Mad 194 and Jai Narain Parasrampuria v. Pushpa Devi Saraf & Ors., (2006) 7 SCC 756.
442. He contended that contracts entered into for and on behalf of a company before its incorporation become enforceable after incorporation if ratified by the company. He contended that acts of A-2 were never repudiated by A-1 company after its incorporation. He also pointed out that rather A-2 had been CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 164 of 194 authorised by the company to represent it before the 15 th Screening Committee. He submitted that claims made by A-2 were never belied by the company.
443. He referred to Sec. 15(h) of the Specific Relief Act, 1963 and argued that specific performance can be obtained in respect of such agreements. He further referred to Sec. 149 of the Companies Act, 1956 and contended that such contracts become binding on the date of commencement of business.
444. Regarding the description as 'Director' by A-2, Ld. Sr. Counsel contended that by describing oneself as 'Director', it is not always conveyed that he is director on Board of Directors. The term 'Director' can be used as a designation also for a person. Moreover, he pointed out that A-2 ultimately became director on 31.10.2003 in the company.
445. He thus contended that A-2 is not liable for any misrepresentation.
446. Sh. Hemant Shah, Ld. Counsel for A-3 also made similar submissions. He too referred to concept of pre- incorporation agreements. He submitted that A-3 is also not liable for any misrepresentation. He relied upon Commissioner of Income Tax Vs. Bhurangya Coal Co., MANU/SC/0072/1958; Asian Hotels Ltd. Vs. Delhi Development Authority, 1998 (46) CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 165 of 194 DRJ; and Jai Narain Parasrampuria & Ors. Vs. Pushpa Devi Saraf & Ors., (2006) 7 SCC 756).
447. He submitted that for being made liable, it was required of the prosecution to show that A-3 was over all incharge of day to day business of A-1 company. He relied upon Girdhari Lal Gupta Vs. D. H. Mehta & Anr., 1971(3) SCC 189.
448. In rebuttal, regarding the contention that the company cannot be held responsible for the acts done by the promoters, Ld. DLA submitted that the company, after its incorporation, had continued to pursue the application for allocation of coal block which is sufficient to show that it had accepted the previous acts of its promoters. Ld. DLA referred to Section 11 IPC which defines 'person'.
449. Rebutting contentions made on behalf of A-2, Ld. DLA submitted that A-2 became director of the company/A-1 only on 31.10.2003. He referred to minutes of the first meeting of the board of directors dated 22.12.1999 in which name of A-2 does not figure as a director or promoter. Further he referred to the minutes of the first Annual General Meeting ("AGM") dated 30.09.2000 wherein also name of A-2 is not mentioned. Ld. DLA contended that no where in these minutes, there is any reference of any application for allocation of coal block. He thus submitted that A-2 acted to misrepresent and induce the Govt. of India for allocation of the coal block.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 166 of 194
450. He referred to Form 1-A regarding availability of name of the company and submitted that it was not certain at that time whether the name of the company will be B.S. Ispat Ltd. or not but at the very same time, A-2 and A-3 not only made correspondence on the letter head containing the name B.S. Ispat Ltd. but they also describe themselves as its directors.
451. The emphasis of Ld. Counsel for A-3 on the aspect of ratification of expenses towards pre-incorporation contracts in the minutes of the meeting of the board of director, according to Ld. DLA, was misplaced. Ld. DLA contended that no such agreement has been brought on record. He also contended that criminal acts are being sought to be passed on as ratified which is not permissible.
452. I have considered the submissions.
453. The mere submission of an application in the name of a proposed company to a Government authority cannot amount to an agreement. What the law recognizes is a " pre- incorporation agreement/contract".
454. Moreover, as can be seen, it was nowhere disclosed in the applications by A-2 and A-3 that the same was being submitted on behalf of a proposed company or that they were signing the application as a promoter thereof. Rather, they signed as Directors of the company. It is also not the case of A-1 M/s BSIL that at any point of time the act of submitting application CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 167 of 194 dated 28.06.1999 to MoC for seeking allocation of Marki Mangli coal block was ratified by the company after it got registered with ROC on 01.12.1999. On the contrary, the case of A-2 and A-3 is that it was so ratified. It is apparent that the accused persons are shifting the blame upon each other. A-1 company did accept allocation of the coal block and thus cannot argue that it did not approve of the acts of A-2 and A-3. Still, even after such approval, the acts do of A-2 and A-3 do not fall in the category of pre-incorporation agreements.
455. The reliance upon provisions of Specific Relief Act is also misconceived and unwarranted. Those provisions are not attracted to the facts of the present case.
456. 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 and A-3 with a view to deceive MoC so as to induce it to allot Marki Mangli coal block in the name of a non-existent entity, i.e. BSIL. The company A-1 had joined A-2 and A-3 later in the conspiracy and is thus also liable.
457. It is concluded that A-1 (accused company), A-2 and A-3 (both Directors) all are responsible for making the misrepresentations and thereby deceiving and dishonestly or fraudulently inducing the MoC and the Govt. of India.
POINT FOR DETERMINATION NO. (d):
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 168 of 194 WHETHER THERE WAS ANY CONSPIRACY AMONG ALL THE ACCUSED PERSONS?
458. Ld. DLA submitted that all the accused persons are liable for the offence of conspiracy. He argued that prosecution has proved that there was conspiracy between all the accused persons to the cheat the MoC and the Govt. of India to obtain the allocation of coal block.
459. Specifying role of each accused, ld. DLA submitted that A-2 and A-3 made various applications/correspondences with MoC, MoS, Govt. of Maharashtra etc. A-1 company, after being born on 01.12.1999, also joined them.
460. Ld. DLA referred to State through Superintendent of Police, CBI/SIT Vs. Nalini & Ors., (1999) 5 SCC 253. He also referred to the provisions of S. 120-A and 120-B IPC.
461. Ld. Counsel for A-1/company contended that there could not have been any conspiracy between A-1 company on one side and A-2 and A-3 on the other side. He submitted that A- 1 company was not even incorporated when the application for allocation was filed. All the acts were done by A-2 or A-3 prior to incorporation of the A-1 company. He referred to IEM wherein information about date of incorporation was replied to by the company as "applied". He also relied upon Manoj Kumar Soni Vs. State of MP, 2023 SCC OnLine SC 1009, to contend CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 169 of 194 that at least two persons are required to show offence u/s 120-B IPC.
462. Ld. Sr. Counsel for A-2 and Ld. Counsel for A-3 both again referred to concept of pre-incorporation agreements and contended that there was no conspiracy regarding any offence. Their acts were rather for and on behalf of the company.
463. I have considered the submissions.
464. Section 120-A and 120-B IPC read as under:
Definition of criminal conspiracy Section 120 A IPC: When two or more persons agree to do, or cause to be done --
(a) an illegal act; or
(b) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:
Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
Explanation -- It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object.
Section 120 B IPC Punishment of criminal conspiracy CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 170 of 194 (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, or imprisonment for a term of 2 years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punishable with for 10 years and with fine.
465. Regarding the offence of conspiracy, the observations of Hon'ble Supreme Court on the issue of criminal conspiracy as were made in the case State through Superintendent of Police, CBI/SIT Vs. Nalini & Ors., (1999) 5 SCC 253 would also be worth referring to. Hon'ble Supreme Court summarized the broad principles governing the law of conspiracy as under:
"591. Some of the broad principles governing the law of conspiracy may be summarized though, as the name implies, a summary cannot be exhaustive of the principles. Under Section 120A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is legal act by illegal means overt act is necessary. Offence of criminal conspiracy is exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence. The question for consideration in a case is did all the accused had the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accused CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 171 of 194 merely entertained a wish, howsoever, horrendous it may be, that offence be committed.
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.
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.
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.
When two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one who joins in the agreement. There has thus to be two conspirators and there may be more than that. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy. 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 172 of 194 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.
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".
As stated above it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement, which is the graham of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts, and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy. 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 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 173 of 194 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.
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."
466. Further, in the case titled E.G. Barsay Vs. State of Bombay, AIR, 1961 SC 1762, the view whereof was affirmed and applied in several later decisions, such as Ajay Aggarwal Vs Union of India 1993 (3) SCC 609; Yashpal Mittal Vs. State of Punjab 1977 (4) SCC 540; State of Maharastra Vs. Som Nath Thapa 1996 (4) SCC 659; Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC 596, Hon'ble Supreme Court had observed as under:
"―The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 174 of 194 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."
467. It was further observed in State through Superintendent of Police, CBI/SIT Vs. Nalini & Ors., ( supra) as under:
"Thus the offence of criminal conspiracy certainly requires a prior agreement between two or more persons to do or cause to be done an illegal act, or an act which is legal by illegal means. However, when it is legal act by illegal means overt act is necessary. It is also equally true that direct evidence of existence of a criminal conspiracy is seldom available and has to be inferred from the over all facts and circumstances of the case. Clearly from the overall facts and circumstances of the present case as already discussed above. It is evident that the accused persons consciously made false representation at different stages of processing of their application for allotment of a coal block in Ministry of Coal. Different roles were played by the accused persons in order to support the claim made by each other before different Govt. authorities. The existence of a common agreement amongst the accused persons is thus writ large on the face of record."
468. Thus, it is settled law that direct evidence of conspiracy is seldom available as conspiracies are hatched in secrecy. It has to be inferred from the facts and circumstances of the case.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 175 of 194
469. In the present case, it has been established that A-2 filed the application for allocation of coal block vide application Ex. P-60 (Colly.); that A-2 had signed the said application; that A-2 had attended meeting of the Screening Committee and made presentation; that A-3 had also signed on detailed application dt. 03.09.1999 [Ex. PW 2/A-4 (Colly.), page 8-24, D-1] submitted to MoC and detailed application dt. 03.09.1999 [Ex. PW-3/A-4 (Colly.), page 4-21, D-115] submitted to MoS. All these acts have been fully established. Prosecution has also established the accused persons dishonestly induced the MoC and the Govt. of India to issue coal block allocation letter.
470. From these facts and circumstances, it can be safely inferred conclusively that there was conspiracy amongst them.
471. It is settled position in law that a person can join a conspiracy at any point of time. A person may come and go during the existence of the conspiracy. It is not necessary that a person must be part of the conspiracy from the beginning. It is true that initially the company was not in existence and therefore it cannot be said to have conspired with other accused persons. However, the company was born on 01.12.1999 and thereafter it vehemently pursued the cause of allocation of coal block. In other words, the company joined the conspiracy later on. It is settled law that a person may join a conspiracy at any time before it ends. His joining the conspiracy will make him liable for all the acts, even if done prior to his joining.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 176 of 194
472. Earning the recommendation of the Screening Committee was the event which can be said to have achieved the object of the conspiracy. After all, earning the recommendation of the Screening Committee was one of the aims of the conspiracy. Obtaining letter of allocation was the other aim and which was a natural consequence after obtaining recommendation of Screening Committee or atleast the same was facilitated by the recommendation.
473. Upon consideration of the entire material, it is held that prosecution has proved that there was conspiracy and accused persons were members of the said conspiracy. Having considered the material on record, it is more than apparent that there was conspiracy between the accused persons. All the accused acted in concert to achieve the common object of the conspiracy.
POINT FOR DETERMINATION NO. (e):
WHETHER THE OFFENCE OF CHEATING IS MADE OUT AGAINST A-1 TO A-3?
474. Ld. DLA forcefully submitted that MoS issued recommendation in favour of A-1 company vide letter dated 23/24.09.1999 [Ex. PW-2/A-5] upon inducement by the accused persons. He submitted that CMPDIL also made its recommendation vide letter dated 05.11.1999 (Ex. PW2/A-7) in favour of the company. Similarly, CIL made recommendation in CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 177 of 194 favour of A-1 company vide letter dated 01.03.2000 (Ex. PW 2/A-10).
475. He then referred to the meeting of the 15th Screening Committee held on 06.03.2000. The meeting was attended by A- 2 on behalf of A-1 company as per the attendance sheet [Ex. PW- 2/D-4 (Colly.)]. A-2 had made presentation also on behalf of the company. He submitted that even on this date, A-2 was not a director of A-1 company. The 15th Screening Committee made its recommendation in favour of A-1 company on 06.03.2000 vide minutes [Ex. PW 2/D-5 (Colly.)]. Pursuant to this, allocation letter dated 25.04.2000 [Ex. PW 2/D-6 (Colly.)] was issued to the company. However, due to incomplete processing at the end of the State Govt. of Maharashtra, this allocation letter was withdrawn and company was asked to approach the State Govt. of Maharashtra. After company so approached the State Government, fresh recommendation was issued by the State Govt. vide letter dated 11.09.2000 [Ex. PW 21/B, D-15, page 154, D-15]. Thereafter, MoC issued final allocation dated 25.04.2001 [Ex. PW 2/A-11]. Ld. DLA thus contended that accused persons were able to obtain allocation of Marki Mangli coal block on the basis of their misrepresentations and inducements.
476. Ld. DLA submitted that the offence of cheating stands duly proved in this case. He referred to:
a) Mobarik Ali Ahmed Vs. State of Bombay; 06/09/1957 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 178 of 194 Supreme Court of India;
b) Abhayanand Mishra Vs. State of Bihar decided on 24/04/1961Supreme Court of India;
c) Chandran alias Manichan alias Manyan and others Vs. State of Kerala (2011) 5, Supreme Court cases, Page 161; and
d) State of Rajasthan Vs. Chetan Jeff (On suppression of facts) decided on 11 May, 2022, Supreme Court of India.
477. He also referred to S. 24 and S. 25 of IPC which define the words "dishonestly" and "fraudulently".
478. He submitted that the said two concepts i.e. "dishonestly" and "fraudulently" have been extensively dealt with by Hon'ble Supreme Court in a number of cases. He relied upon the observations of Hon'ble Supreme Court in the well known case of Dr. Vimla Vs. Delhi Administration, ( supra) wherein the basic ingredients of the two acts have been delineated.
479. Ld. Counsel for A-1 argued that allocation letter cannot be construed as property for the purpose of Sec. 415/420 IPC. He relied upon observations made by Hon'ble Delhi High Court in Prakash Industries Vs. ED, 2022 SCC OnLine Del 2087.
480. He argued that no loss was caused to MoC or the Screening Committee by issuance of allocation letter in favour of A-1 company. He further contended that the A-1 company also did not gain anything from allocation letter and thus the said letter cannot be construed as property. Hence no offence u/s 420 CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 179 of 194 IPC is made out.
481. He referred to Mariam Fasihuddin & Anr. Vs. State by Adugodi Police Station & Anr. (2024 INSC 49), to explain what are the ingredients of the offence of cheating. He further referred to Hari Sao Vs. State of Bihar, (1969) 3 SCC 107, to contend that inducement has to be of the person concerned and not a third party. He also referred to Hira Lal Hari Bhagwati Vs. CBI, AIR 2003 SC 2545 and Iridium India Telecom Ltd. Vs. Motorola Incorporated & Ors., AIR 2011 SC 20, regarding ingredients of the offence of cheating.
482. Ld. Counsel also contended that there could not have been suo motu complaint/FIR in respect of offence of cheating. He contended that there is no aggrieved party as neither the Screening Committee nor MoC filed any complaint against accused persons of cheating them. He referred to Sec. 2(wa) of CrPC defining 'victim'. He contended that the chargesheet is nothing but opinion of the IO. He relied upon Abdul Razak Pane Mangalore Vs. State of Karnataka, 2020 SCC OnLine Kar 3715. Ld. Counsel also referred to judgment of Sh. Arun Bhardwaj, Ld. Special Judge, (PC Act) (CBI), Coal Block Cases-02, RADC passed in CBI Vs. AES Chhatisgarh Energy Pvt. Ltd. & Ors., CBI Case 251 of 2019, submitting that on similar facts, accused were acquitted in the said case.
483. He also contended that no damage was caused to CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 180 of 194 any person and therefore no offence of cheating is made out.
484. Sh. Siddharth Aggarwal, Ld. Sr. Counsel for A-2 contended that no offence of cheating is made out since there is no connection between alleged misrepresentation and allocation of coal block. He submitted that allocation of coal block by MoC is not a result of any misrepresentation regarding status of BSIL. He argued that there is no nexus between these alleged deception and delivery of property.
485. He pointed out that there was no other applicant for Marki Mangli coal block except BSIL. Therefore, no benefit has accrued to it. According to him, it is not a case of any special benefit to the company. He pointed out that application of BSIL was duly processed at various levels and recommendation/ allocation was made on the basis of many factors except status of incorporation of BSIL. Once again, he stressed that allocation made initially was withdrawn and finally it was made on 25.04.2001. He pointed out that the company was incorporated on 01.12.1999 and commencement of business certificate was obtained on 27.04.2000.
486. Sh. Hemant Shah, Ld. Counsel for A-3 made similar submissions.
487. I have considered the submissions.
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488. From the material on record, the prosecution has proved that A-2 had signed application dt. 28.06.1999 [Ex. P-60 (Colly.), D-1] and submitted the same on 15.07.1999 to MoC. The application was made on a letterhead bearing name of M/s B.S. Ispat Ltd. The description of the name of applicant was such which conveyed as if it was a company duly incorporated. The making of the application in the name of a non-existent company was clearly a misrepresentation aimed to induce MoC and Govt. of India.
489. It is an admitted position that when the application dated 28.06.1999 for allocation of coal block was signed by A-2 Mohan Agrawal, the company BSIL was not in existence. A-2 signed on the application as a Director of BSIL. All these facts and circumstances do show that the intention of the accused was to represent as if BSIL was an incorporated company. They wanted to conceal that it was not yet incorporated. Admittedly, the incorporation happened only on 01.12.1999.
490. It was no where disclosed in the application dt. 28.06.1999 that BSIL was yet to be incorporated. The argument of the defence that the application was actually submitted on 15 th July 1999 and by that time process for incorporation had been initiated and thus there was no cheating cannot be accepted. The fact that even name of the company was not finalized till 28.06.1999 and Form 1A was only submitted on 03.07.1999 itself shows that the intention was to deceive MoC.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 182 of 194
491. Making of the application for allocation does not qualify as a pre-incorporation agreement or contract. The application cannot be termed agreement. BSIL merely applied for allocation of coal block and the application was processed and coal block was ultimately allocated. These events do not fall in the category of pre-incorporation agreements or contracts. It takes atleast two parties and reciprocal promises to form an agreement or contract. However, in the present facts, there were no reciprocal promises. Further, name of a non-existent entity was described falsely as an existent entity. Hence, it cannot be called the case of pre-incorporation agreements or contracts.
492. On 28.06.1999 or later on upto 01.12.1999, neither A-2 nor A-3 could describe themselves as Directors of BSIL. They did not possess that designation till 01.12.1999. Rather to be precise, A-2 became director only on 31.10.2003. As such, when A-2 or A-3 stated themselves to be Directors of BSIL, said acts amounted to misrepresentation. Their purpose was to induce the MoC, Govt. of India to allocate coal block to BSIL.
493. It has been contended that when the allocation was actually made i.e. 25.04.2000 or 25.04.2001, BSIL had already been incorporated and thus no offence is committed. This contention also merits rejection. The company BSIL was in fact incorporated on 01.12.1999. However, it is important to note that the application made by the accused persons is dated 28.06.1999 which was submitted on 15.07.1999 to MoC. The said CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 183 of 194 application, in view of the fact of non-incorporation of the company, was liable to be rejected outrightly. The said application did not merit to be processed and considered by MoC. The subsequent act of incorporation did not rectify the initial lack of incorporation.
494. It cannot be said that requirement of incorporation arise only at the time of mining the coal. Reading of the provisions of CMN Act do not lead to this conclusion. Rather it is very much apparent that an applicant was required to be a company right from the time of application. In fact, Hon'ble Supreme Court has also observed so in Manohar Lal Sharma's case (supra).
495. Reference to IEM by the defence is only a feeble attempt by them to wriggle out of the prosecution. Merely mentioning 'applied' in the IEM is of no benefit. Firstly, it was not submitted to MoC and rather was given to Govt. of Maharashtra. Secondly, it was furnished in such a way that it was impossible to detect that registration number was not mentioned by the company.
496. There is also no force in the contention that the first allocation was withdrawn and thus whatever was stated in the application was of no effect. After the first allocation was withdrawn, the company approached Govt. of Maharashtra and again obtained recommendation which was forwarded to MoC.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 184 of 194 Thereafter, the MoC again allocated coal block to the company but the application remained the same i.e. application dated 28.06.1999. The said application cannot be delinked from the second allocation.
497. If the accused persons had bona fide intentions, they should have first got the company incorporated and thereafter applied to MoC for allocation of coal block. However, they did not wait for incorporation and went ahead with their plan. This haste shows the mens rea on their part. They were able to get allocation of coal block on the basis of the application which was liable to be rejected at the threshhold.
498. The explanation of A-2 in his statement u/s 313 CrPC is also without any substance. He has been unable to explain as to why he signed on the application as a director. He had attended the meeting of the 15th Screening Committee held on 06.03.2000 on behalf of the company whereas he had no connection with the company even till that date. He became director only 31.10.2003.
499. Similarly, A-3 has also been unable to explain his claim of being a director of BSIL in various correspondences.
500. Accused A-1 company too has offered no explanation u/s 313 CrPC.
501. It cannot be said that allocation letter is not property CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 185 of 194 for the purpose of Sec. 415/420 IPC. This argument has long been rejected in various judgements and orders passed by my Ld. Predecessor as well as by myself. The case of Prakash Industries (supra) is in relation to offence under PMLA and not offence of cheating. As such, allocation letter is not property for the purposes of PMLA but it is certainly so for purposes of Sec. 415/420 IPC.
502. It cannot be said that A-1 company did not gain anything from allocation letter. It was on the basis of allocation letter only that the company was able to get mining lease. This contention is also rejected.
503. Further, the contention that there could not have been suo motu complaint/FIR is also to be rejected as criminal law can be set in motion by anyone, particularly in case of cognizable offences. What is even more noteworthy is that the investigation was initiated pursuant to orders of Hon'ble Supreme Court. Thus, no fault can be found in registration of FIRs.
504. Thus, when the overall facts and circumstances of the present case are seen in the light of aforesaid observations of Hon'ble Supreme Court in Manohar Lal Sharma (supra), then it is crystal clear that the actions of the accused persons in making all such false claims knowing them to be false were actuated with an intention to deceive MoC and thereby Govt. of India. The CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 186 of 194 intention to defraud on the part of accused persons is writ large on the face of record. It is also clear that all the acts committed by the accused persons have been fraudulently done with a dishonest intention. But for the deception and resulting dishonest and fraudulent inducement caused to the Screening Committee, the MoC and thus to the Govt. of India, there would have been no allocation of coal block to the accused company.
505. From the above, it can be safely concluded that the accused persons A-1 to A-3 cheated the Screening Committee, the MoC and the Govt. of India in the abovesaid manner. Thus the offence of cheating is made out against them.
506. In view of above, the it is held that the offence of cheating u/s 420 IPC is clearly made out against A-1 to A-3.
POINT FOR DETERMINATION NO. (f):
WHETHER THE OFFENCE U/S 406 IPC IS MADE OUT AGAINST A-1 COMPANY?
507. The charge of this offence is only against A-1 company.
508. Arguing with respect to charge u/s 406 IPC, Ld. DLA submitted that the allocation of the coal block was subject to some conditions. The manner of use of the mined coal was specified vide Mining Lease dt. 07.05.2010 [Ex. P-7, D-20]. He submitted that, however, the company did not use the mined coal CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 187 of 194 as per the said terms. The company used 1513 MT of fine coal in the Sponge Iron Plant (SIP) whereas it was to be used in the Captive Power Plant (CPP). He referred to the testimony of PW- 6 in this regard.
509. Ld. DLA further submitted that BSIL was allotted Marki Mangli Coal Block by MoC in the year 2000. However, while allotting the said coal block, the Screening Committee mentioned in its minutes of meeting that the middlings produced by washing non-coking coal for its SIP will be used in CPP and accordingly BSIL executed a lease deed dated 07.08.2010 with District Mining Officer, Yavatmal, Maharashtra after receiving approval of Central Govt. dated 10.09.2009. BSIL in violation of legal contract/trust, dishonestly used 1513 MT middlings directly in SIP though the middlings obtained after washing were directly to be used in the CPP. He further submitted that the company was allocated the coal block for using coal as per the conditions mentioned in the allocation letter, which were further mentioned in the mining lease also but the company had utilised the coal in violation of the said conditions causing criminal breach of trust.
510. Per contra, Ld. Counsel for A-1 contended that the IMC report has determined that quantity of coal consumed in CPP during the year 2014-15 matches with the data provided by the A-1 company. He further submitted that high ash was seen in the coal as per report of the IMC. Therefore, high ash coupled with low fixed carbon, high moisture, other technical issues like CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 188 of 194 turbine rated capacity of 25 MW against total boiler capacity of 15 MW might have been the reasons for high rate of consumption. He also pointed out that in the IMC report, it was also opined that there was no surplus coal produced and there was negligible transit and ground loss of coal.
511. Ld. Counsel contended that after initially using the raw coal from the mine, technical team of A-1 observed high sulphur in the SIP. This was attributed to high ash & sulphur in the coal. Thus, the A-1 company decided to get the coal washed to reduce ash & sulphur. The company A-1 entered into contracts with the washeries. He further contended that during the washing of coal there is a process loss of the coal. It further stated that the company has internal and external agencies for testing of coal parameters. As an external agency SGS India Ltd. was appointed on 02.06.2012 and for internal inspections company has trained and experienced staff at the plant. A-1 company had a well equipped lab at mines & in Warora Plant to carry out all the Chemical & Physical parameter testing of all minerals like coal, iron ore dolomite for ash and sulphur contents.
512. He also contended that the high consumption of coal in SIP by A-1 company is attributed to the following reasons:
a. After taking over the SIP in December 2011, the plant was non-operational for a long therefore, and equipment was rusted and jammed. To solve the same, A-1 company took CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 189 of 194 equipment for overhauling, maintenance, some modifications and repair of refractory inside the kiln.
b. In the year 2012-13 total of three campaigns were operated & specific coal consumption was high as maximum raw coal is used in these campaigns with low FC & high ash content. After the plant takeover it was the first trial run of kiln-1, so initially A-1 was following slow heating of the kiln as advised by the technical team to de-moisturize the refractory as castable repaired and long stoppage of the kiln.
c. In November 2012, A-1 company commissioned kiln no.2 and went for a trial run for commissioning & initial refractory heat up the use of coal was on the higher side and this quantity was loaded in the campaign production. During the commissioning trial run of the plant the sponge produced by the process was substandard. Therefore, the A-1 re-processed this material to maintain the market standard for this extra coal. In this total process approx. 402 MT of coal was consumed for the kiln trial run. Most importantly in the initial period, there were so many breakdowns.
d. In the year 2013-14, four campaigns including very short campaigns were operated the causes were the commissioning of Waste Heat Recovery Boiler (WHRB's) unavailability of iron ore & inconsistent quantity of coal FC, camp life was very short.
e. In the year 2014-15, there were lots of breakdowns in power plants. Campaigns running from July to August had high CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 190 of 194 coal consumption due to high moisture content in coal, irregularities of coal supply, fines coal unavailability, iron ore scarcity, frequent raw material circuit break down, belt conveyor siding and groundhopper filled by water. Since there were lots of breakdowns in the Plant, A-1 had to hold the kiln due to pollution constraints. That low feed rate is also another reason for high coal consumption as the company was only using 60-70% of full capacity.
513. He thus prayed for acquittal qua this charge also.
514. I have considered the submissions.
515. It will be useful, at this stage, to once again reproduce the contents of the charge u/s 406 IPC. The same reads as under:
A-1 That M/s B.S Ispat Ltd. was allotted "Marki Mangli" coal block by MOC, Govt. of India in the year 2000 and while allotting the said coal block Screening Committee mentioned in its minutes of meeting that the middlings produced by washing non-coking coal for its sponge iron plant will be used in the captive power plant (CPP) and accordingly the company i.e. M/s B.S Ispat Ltd. executed a lease deed dated 07.08.2010 with District Mining Officer, Yavatmal, Maharashtra after receiving approval of Central Government dated 10.09.2009 and you thus having been entrusted with the said coal block and thereby exercising dominion over the coal reserves available in the said coal block used the extracted coal in violation of the legal contract/trust as per which the said coal was to be used and dishonestly used 1513 MT middlings directly in the sponge iron plant even though the middlings obtained after washing were directed to be used by you in the CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 191 of 194 captive power plant and you thereby committed criminal breach of trust i.e. offence punishable u/s 406 IPC and within my cognizance.
516. Thus the charge is regarding use of 1513 MT middlings in SIP instead of CPP.
517. The Mining Lease is Ex. P-7 or Ex. PW12/A (Colly.) [Page 73 to 153, (D-20)]. It was agreed by the company that it would get the coal washed and would use middlings in its CPP. The IO has explained that middlings is also called fine coal.
518. As per chart of consumption of coal (part of Ex. P- 53, D-161), the company/A-1 had used 1513 MT of Fine Coal/Middlings in its SIP. However, as per agreed terms, middlings were to be exclusively used in CPP.
519. The chart, however, also shows that A-1 company had used 57,965 MT of Fine Coal/Middlings in CPP. It is to be noted that 1513 MT is just 2.6% of 57,965 MT of middlings. Thus there was substantial compliance with the terms of allocation and mining lease. Moreover, it is not violation of allocation if the company used fine coal in SIP because fine coal is a waste product obtained through washing of raw coal. As waste material obtained through washing of coal was to be used in CPP, the chart shows that A-1 used 57,965 MT of middlings in the CPP. In addition to it, it also used 36,910 MT of reject coal CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 192 of 194 in CPP. Thus the company was complying with the agreed terms substantially.
520. Further, using miniscule quantity of waste product obtained through washing of coal in SIP is not to be viewed as violation of terms of allocation. It would have been violation if the company used superior coal/washed coal in CPP. There is no such charge against the company.
521. Therefore, it is held that prosecution has failed to prove this charge u/s 406 IPC.
FINDINGS:
522. In view of the above discussion, it is held that the prosecution has proved the charges except u/s 406 IPC.
523. All the three accused persons i.e. the company M/s B.S. Ispat Ltd. (A-1), Mohan Agrawal (A-2) alongwith Rakesh Agrawal (A-3) are hereby held guilty and convicted for the offence u/s 120-B IPC and u/s 120-B r/w 420 IPC. All the three accused are also held guilty and convicted for the substantive offence u/s 420 IPC.
524. However, accused M/s B.S. Ispat Ltd. (A-1) is acquitted for the offence u/s 406 IPC.
CBI Vs. M/s B.S. Ispat Ltd. & Ors. Judgment Dt. 27.05.2024 Page No. 193 of 194
525. Let the convicts be heard on sentence.
Digitally
signed by
SANJAY
SANJAY BANSAL
Announced in the Open Court BANSAL Date:
2024.05.27
on this 27th Day of May, 2024 16:27:06
+0530
(Sanjay Bansal)
Special Judge, (PC Act)(CBI),
(Coal Block Cases)-02,
Rouse Avenue District Courts,
New Delhi.
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