Delhi District Court
Central Bureau Of Investigation vs M/S Sks Ispat And Power Ltd on 23 May, 2026
IN THE COURT OF MS. SUNENA SHARMA: SPECIAL
JUDGE (PC ACT) (CBI)(COAL BLOCK CASES)-02
ROUSE AVENUE DISTRICT COURTS
NEW DELHI
CC No. 276/2019
CNR No. DLCT11-001098-2019
RC No. 219 2014 (E) 0016
Branch: CBI, EO-I, New Delhi
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
U/s. 120-B r/w 420 IPC and
substantive offence u/s 420 IPC
Date of order on cognizance : 26.05.2017
Date of framing of charge : 02.06.2023
Date on which judgment was
reserved : 12.05.2026
Date of judgment : 23.05.2026
Central Bureau of Investigation (CBI)
Versus
1.M/s SKS Ispat & Power Ltd.
(earlier known as M/s SKS Ispat Ltd.)
Through AR Sh. Rajeev Trivedi
Regd. Address: 501-B, Elegamt Business
Park, Andheri, Kurla Road, J.B. Nagar,
Andheri (East) Mumbai,
Maharashtra
...Accused no.1
2. Anil Gupta
S/o Sh. Mahavir Prasad Gupta
R/o Plot No. 45, 4th Floor,
Nirmal Prabhu Road No. 7,
Digitally
JVPD Scheme, Vile Parle (W)
signed by
SUNENA Mumbai-49
SUNENA SHARMA
SHARMA Date: ...Accused no.2
2026.05.23
11:40:39
+0530
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 1 of 271
3.Deepak Gupta
S/o Sh. Mahavir Prasad Gupta
R/o 6/24, Krishna Kunj,
Civil Lines, Raipur-492001,
Chhattisgarh
...Accused no.3
4.Amrit Singh
S/o Late Sh. Raj Roshan Singh
R/o RZ-30A, Vaishali Extension,
Gali No. 3, Dabri Palam Road,
New Delhi - 110045.
...Accused no.4
5. Sudhir Kumar Sahay
S/o Late Sh. Brajdeo Sahay
R/o Ranibagan, Bariatu,
Ranchi, Jharkhand - 834009
...Accused no.5
INDEX
S.No Particulars Page no.
1. Introduction 4-7
2. Factual background as per FIR 7-9
3. Allegations in the FIR in nutshell 9-10
4. Factual Matrix as per Chargesheet 10-18
5. Result of Investigation 18-24
6. Cognizance 24
7. Framing of Charge 24-27
8. Prosecution Evidence 27-119
1. Witnesses/Employees of M/s SKS Ispat 27-39
& Power Ltd (A-1).
2. Witnesses from Government of 39-41
Chattisgarh/MOU
3. Witnesses Related to Environment and 41-52
Water Resource Clearance.
4. Witnesses related to status of land/title 52-57
deed.
5. Witnesses related to calculation of 57-63
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 2 of 271
networth
6. Witnesses from PMO Office 63-66
7. Witnesses from Ministry of Coal 66-90
8. Witnesses from Ministry of Steel 90-98
9. Witnesses related to Role of Sudhir 98-101
Kumar Sahai (A-5)
10. Witnesses to specimen signature, 101-102
search and seizure
11. Witnesses from Central Excise 102-105
pertaining to EUP Capacity
12. Witnesses from CFSL 105-106
13. Witnesses from CBI 106-118
14. Others 118-119
9. Statement of Accused under Section 313 119-131
Cr.P.C/ Defence Evidence
10. Prosecution Arguments 131-136
11. Defence Arguments. 136-147
12. Discussion and Analysis of material by the 147-258
Court
Undisputed Facts 148-157
Contentious issues 158
Points of Determination 1 to 6 159
Relevant legal provisions and 160-169
precedents
Points of Determination No. (1) to (3) 169-216
*Misrepresentation regarding 176-200
Networth and Investment.
*Misrepresentation regarding 200-204
Environment Clearance and
Production Capacity.
*Misrepresentation with regard to 204-216
available land.
Point of Determination no. (4) 216-252
Point of Determination no. (5) 252
Point of Determination no. (6) 253-258
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 3 of 271
13. Conclusion 259-270
14. Final Conclusion 270-271
15. List of witnesses Annexure 'A'
16. List of documents admitted under Section Annexure 'B'
294 Cr.PC
17. List of documents exhibited during trial Annexure 'C'
JUDGMENT
Introduction
1. The instant CBI case no.276/2019 is arising out of the chargesheet filed in RC No. 219 2014 (E) 0016 dated 04.08.2014, registered by CBI, EO-I, New Delhi. The case is pertaining to allocation of 'Vijay Central Coal Block' situated in the state of Chhattisgarh to M/s SKS Ispat & Power Ltd. (hereinafter referred as 'SKS') by the 36th Screening Committee, Ministry of Coal, Government of India. The FIR/RC is the outcome of the Preliminary Enquiry No. 219 2012 E 0002 dated 01.06.2012, which was registered by CBI on the reference made by Central Vigilance Commission in the matter of alleged malpractices and corruption in the allocation of coal blocks to the private companies during period 2006-09. This reference was made by CVC vide its letter No. 012/COL/ 020/171661 dated 13.04.2012.
1.1. The present RC/FIR was registered on 04.08.2014 U/s 120-B r/w Sec. 420 of Indian Penal Code, 1860 & Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 ("PC Act") against (1) M/s SKS Ispat & Power Ltd. (2) Promoters/Directors of SKS (A-1), (3) Unknown officials of Ministry of Coal, Government of India, New Delhi and (4) Other unknown persons for allocation of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 4 of 271 Vijay Central coal block, Chhattisgarh to SKS (A-1) for its sponge iron End Use Plant (EUP) at Siltara, Raipur, Chhattisgarh.
General Procedure Adopted at Ministry of Coal for Allocation of Captive Coal Block
2. Before delving deep into the factual matrix of this case, it is deemed necessary to first note the stepwise procedure adopted by the Ministry of Coal, Government of India for allocation of captive coal blocks. As per the prevailing policy at the relevant time, the Ministry of Coal, Government of India used to allocate captive coal blocks to the eligible private sector companies for their End Use Plants (EUPs) in steel, cement or power sectors based on the recommendations of Screening Committee chaired by the Secretary, Ministry of Coal. In accordance with the extant prescribed guidelines, Ministry of Coal was required to advertise coal blocks for allocation to the companies and pursuant thereto, the desirous companies were required to apply for the same to the Ministry of Coal in the prescribed format along with the requisite documents, as detailed in the guidelines (in total 05 sets).
2.1 After verifying the completeness of the applications in relation to the requisite accompaniments, the Ministry of Coal, after retaining one set thereof, was required to forward one set each to the concerned Administrative Ministry, concerned State Government where coal block was located, the State Government where End Use Plant (EUP) was proposed to be set up and CMPDIL for their views/comments. After receiving the recommendations/ views from all the stakeholders, the Screening Committee was authorized to afford an CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 5 of 271 opportunity to all the applicant companies for presenting their respective cases. Thereafter, the Screening Committee was empowered to make recommendations to the Ministry of Coal for allocation of the particular coal block to the specified applicant company, singly or jointly with other companies after taking into account the following factors for determination of inter se priority amongst the applicants:-
(1) Status (Stage) level of progress and state of preparedness of the projects;
(2) Net worth of the applicant company (or in case of a new SPV/JV, the net worth of their principals);
(3) Production capacity as proposed in the application;
(4) Maximum recoverable reserve as proposed in the application;
(5) Date of commissioning of captive mine as proposed in the application;
(6) Date of completion of detailed exploration (in respect of unexplored blocks only) as proposed in the application;
(7) Technical experience (in terms of existing capacities in coal/ lignite mining and specified end- use);
(8) Recommendations of the Administrative Ministry concerned;
(9) Recommendations of the State Government concerned (i.e. where the captive block is located);
and (10) Track record and financial strength of the company.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 6 of 271 2.2 The present case relates to 36 th Screening
Committee, that was Chaired by Secretary (Coal) and its Members included the representatives of the concerned State Governments and representatives of Administrative Ministries in addition to the representatives of the other Departments concerned.
Factual background as per FIR
3. On 13.11.2006, the Ministry of Coal, Government of India published an advertisement inviting applications for allocation of 38 coal blocks including Vijay Central Coal Block in the State of chhattisgarh. Out of 38 coal blocks, 15 coal blocks were earmarked for power generation and 23 coal blocks were available for other specified end uses. The preference was accorded to the power sector and steel sector. Within the power sector, priority was to be accorded to projects with more than 500 MW capacity. Similarly, in the steel sector, priority was to be given to steel plants with more than 1 MTPA capacity.
3.1 In response to the said advertisement, total 64 applications from different companies including SKS (A-1) were received in the Ministry of Coal for said coal block. Vide its application dated 12.01.2007, SKS (A-1), who was earlier allocated Rawanwara North Block for their EUP at Siltara, Raipur, Chattisgarh, by 34nd Screening Committee, sought for the allocation of Vijay Central Coal Block for its same EUP with ultimate capacity of 1.1 MTPA at Siltara, Raipur in the state of Chhattisgarh. The application dated 12.01.2007 was filed through its authorized representative Sh. Amrit Singh (A-4).
3.2 As per the advertisement, application in 5 copies CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 7 of 271 addressed to Director (CA-I), Ministry of Coal were to be submitted in Coal India Ltd. office, Scope Minar, 5th Floor, Laxmi Nagar District Centre, Delhi and the last date to apply was 12.01.2007. Advertisement also mentions that for the details such as application format, documents to be enclosed, details regarding coal blocks on offer and other guidelines etc. could be obtained from www.coal.nic.in.
3.3 Thereafter, as per the prescribed procedure, the copies of all the applications received for all the coal blocks including Vijay Central Coal Block were sent to the concerned Administrative Ministries and State Governments for their comments/ review/recommendations, if any. Similarly, the copies of the application of SKS (A-1) were also sent to the Administrative Ministry i.e. Ministry of Steel and the State Government of Chhattisgarh for the afore- mentioned purpose.
3.4 Vide an Official Memorandum/Notice dated 16.11.2007, uploaded by Ministry of Coal on its website for screening proposals relating to captive mining of coal blocks for non-power sector in 36 th meeting of the Screening Committee to be held on 07.12.2007, 08.12.2007, 17.12.2007 and 18.12.2007, the applicants for all the coal blocks for non-power sector including SKS (A-1) were instructed to give their presentations and submit feedback forms as per the feedback format annexed with the said memorandum regarding the latest status of End Use Plant (EUP) for which application for the block had been made.
3.5 SKS (A-1) made presentation before 36 th Screening Committee on 07.02.2008. As per the attendance sheet, A-2 Anil Gupta (MD), A-5 Sudhir Kumar Sahay CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 8 of 271 (Director), A-4 Amrit Singh (Manager) and Rohit Jaiswal, Manager had attended the presentations on 07.02.2008 before 36th Screening Committee, on behalf of SKS (A-1) and they all appended their signatures on the attendance sheet. A-2 Anil Gupta however, made the presentation before 36th Screening Committee. A feedback form duly signed by A-4 Amrit Singh was also submitted before 36 th Screening Committee (D-29).
3.6. In the final meeting of 36th Screening Committee held on 03.07.2008, Vijay Central coal block was recommended for allocation jointly to SKS (A-1) and M/s PIL. But allocation of Vijay Central block was delayed due to litigation. Vide allocation letter dated 01.11.2011, Vijay Central Coal Block was allocated by Ministry of Coal to M/s Coal India Limited (CIL)(as a leader) and M/s. SKS (A-1) (as an associate) for its end use plant ("EUP") of 0.585 MTPA at Raipur, Chhattisgarh and thus satisfaction level of said EUP of company reached 100%.
Allegations in the FIR in nutshell
4. The allegations in this FIR are as follows:-
(1) As per the application dated 12.01.2007 of SKS (A-1), the total requirement of land was 500 acres and they had already acquired 300 acres.
While as per the feedback form submitted by the company (A-1) during presentation before Screening Committee on 07.02.2008, the total requirement of the land was shown as 500 acres and the company had already acquired 500 acres.
(2) Whereas, the inquiry revealed that as on the date of application i.e on 12.01.2007, the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 9 of 271 company (A-1) was having possession of 225 acres of land at the main plant area and as on the date of presentation i.e 07.02.2008, it was having possession of about 266 acres of land at the main plant area.
(3) Thus the company (A-1) misrepresented the area of land in its possession, both in the application and the feedback form and due to said willful and deceptive concealment and deception, the company obtained undue advantage by showing an advanced state of preparedness, which according to extent guidelines was an important factor to be taken into account by the Screening Committee while making its recommendation.
Factual Matrix as per Chargesheet
5. SKS (A-1) was incorporated on 17.4.2000 as "SKS Ispat Pvt. Ltd.", and on 11.01.2005, its name was changed to "SKS Ispat Ltd.". On 29.12.2006, its name was again changed to M/s SKS Ispat and Power Ltd. Sh. Anil Gupta (MD) and Sh. Deepak Gupta (Joint MD) were its Promoter-Directors. The business of SKS (A-1) was manufacturing of Power, Sponge Iron/Steel etc. In response to the advertisement dated 13.11.2006 of Ministry of Coal, SKS (A-1) submitted an application dated 12.01.2007 (D-5) for allocation of Vijay Central Coal block for its integrated steel plant at Siltara, Raipur, Chhattisgarh 5.1 As per minutes of meeting of Board of Director of SKS (A-1) held on 14.12.2006 signed by Anil Gupta MD (A-2), Amrit Singh (A-4), the then Manager in Delhi office, was authorised to deal with and to sign all related matters CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 10 of 271 with all the authorities as may be applicable to the office at Delhi. Through Amrit Singh, SKS (A-1) submitted its application to Ministry of Coal for allocation of Vijay Central Coal Block. The application dated 12.01.2007 (D-5) as well as the forwarding letter were signed by Amrit Singh as authorized representative of SKS (A-1). With the application dated 12.01.2007 (D-5), following documents were enclosed:
(i) Forwarding Letter dated 12.01.2007 signed by Sh. Amrit Singh, Manager, SKS (A-1).
(ii) Copy of Memorandum of Association and article of Association of SKS (A-1) including certificate of incorporation and certificate of change of name etc. This document is certified by Company Secretary.
(iii) Authorisation Letter dated 09.01.2007 signed by Sh. N.K. Agarwal, Company Secretary.
It is mentioned in this letter that Shri Anil Gupta, MD, Shri Deepak Gupta, Jt. MD and Shri Amrit Singh, Manager, Delhi Office are authorised to sign documents in the matter of allotment of captive coal blocks.
(iv) Copy of Annual reports of year 2005-06, 2004-05 and 2003-04 of SKS (A-1) prepared/signed by Auditors M/s R G Mehta and Company, Charted Accountants, Shivchaya, Sir M V Road, Anderi East, Mumbai.
(v) Copy of MOU dated 06.10.2006 between Government of Chhattisgarh and SKS (A-1).
(vi) Copies of IEM Registrations.
(vii) Copy of MoEF Clearance dated 25.08.2006.
(viii) A note on Scheme of disposal of
carbonaceous unusables.
(ix) A note on detailed schedule of
implementation for coal mining.
(x) Bar charts.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 11 of 271
(xi) Techno Economic Feasibility Report
(January, 2007) for 0.6 million tonne additional integrated facilities in phase III expansion at Raipur-Chattisgrah of SKS (A-1) prepared by Korus Engineering Solutions Pvt. Ltd.
(xii) Detailed Appraisal Report (February, 2006) for integrated steel plant-phase II of SKS (A-1) prepared by SBI Capital Markets Limited.
(xiii) Detailed Appraisal Note (September, 2004) for Sponge Iron Plant, Steel Melt Shop, Rolling Mill and Captive Power Plant at Raipur of SKS (A-1) prepared by SBI Capital Markets Limited.
5.2 During the meetings of the 36th Screening Committee held on 07.12.2007, 08.12.2007 and 07.02.2008, various applicant companies had made presentation before 36th Screening Committee. SKS (A-1) had made presentation before 36 th Screening Committee on 07.02.2008. As per the attendance sheet, A-2 Anil Gupta (MD), A-5 Sudhir Kumar Sahay (Director), A-4 Amrit Singh (Manager) and Rohit Jaiswal, Manager had attended the presentations on 07.2.2008 before 36th Screening Committee, on behalf of SKS (A-1) and they all appended their signatures on the attendance sheet. A-2 Anil Gupta however, made the presentation before 36th Screening Committee. A feedback form duly signed by A-4 Amrit Singh was also submitted before 36 th Screening Committee (D-29).
5.3 Vide separate letter dated 19/28.02.2007, Ministry of Coal forwarded the applications (including that of SKS (A-1) for Vijay Central Coal block) alongwith all the accompaniments, to Chief Secretary, Government of Chhattisgarh and to the CMD, CMPDIL for examination and furnishing comments to the Ministry of Coal. Ministry of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 12 of 271 Coal, vide letter dated 19.02.2007/12.03.2007 addressed to Secretary, Ministry of Steel, forwarded the applications along with documents for examination and called for the comments from Ministry of Steel by 31.3.2007. For consideration of allotment of coal blocks, Ministry of Steel adopted the guidelines formed in the said ministry and vide OM dated 06.12.2007, Ministry of Steel forwarded its recommendations to Ministry of Coal with two annexures i.e. Annexure-I and Annexure-II regarding coking and non- coking blocks respectively. In Annexure-II i.e. recommendation regarding non-coking coal block, the name of SKS (A-1) was indicated at S.No. 107 and this company was categorized as per guidelines of Ministry of Steel, the name of SKS (A-1) was kept in category V (b). Ministry of Steel worked out the proposed capacity of A-1 company as 0.315 MTPA as per its norm of 300 days operation.
5.4 As per the guidelines formed by Ministry of Steel, category V (b) pertains to companies having existing capacity less than eligible capacity (0.3 mT or 0.5 mT as the case may be) but their proposed expansion capacity which is likely to be commissioned by December, 2010 would enable them to have eligible capacity and having partial coal linkage, captive coal block with less than 50 % satisfaction level. SKS (A-1) was having MOU's dated 16.08.2004 and 06.10.2006 Ex.P-277/PW-25(Colly.)(part of D-211) with Government of Chhattisgarh for setting up of Steel Plant in state of Chhattisgarh.
5.5 Government. of Chhattisgarh, however, did not send any recommendation letter to 36th Screening Committee for allocation of coal block including Vijay Central CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 13 of 271 Coal block. In the Screening Committee meeting dated
3.7.2008, the then Chief Secretary Sh. Shivraj Singh and then Secretary, Mineral Resource Deptt., Sh. B. L. Thakur, attended the meeting as representatives of State of Chhattisgarh and they orally put forth the stand of the State Government. The representative of State Government inter alia supported request for captive coal block of the applicants who had entered into MOU with State Government. for establishing EUP in Chhattisgarh.
5.6 Vide Letter no. F7-13/2005/12(1) dated 04.07.2008, Government of Chhattisgarh furnished information regarding MOUs executed with companies shortlisted for recommendation of coal blocks for establishment of iron / steel plants in Chhattisgarh State.
5.7 The final meeting of 36 th Screening Committee was held on 03.07.2008 and as per its minutes and recommendation sheet in respect of coal blocks earmarked for non-power sector, SKS (A-1) and M/s Prakash Industries Ltd. ("PIL") were jointly recommended for allocation of Vijay Central coal block in Chhattisgarh State. Ministry of Coal vide note dated 10.07.2008 processed the recommendations of the 36th Screening Committee through the then Ministry of Steel (Coal) for approval of competent authority the then Prime Minister as Minister of Coal. While processing joint allocation of Vijay Central block in favour of SKS (A-1) and M/s PIL, Ministry of Coal worked out the share of quantities by taking into account the availability of coal from existing allocated blocks to these companies for the same project. In respect of SKS (A-1) availability of 0.4 MTPA of coal from previously allocated Rawanwara North coal block had been CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 14 of 271 taken into account. 5.8 The Ministry of Coal had worked out the
satisfaction level on the basis of tentative mine capacity and requirement of the company on the yearly basis. The satisfaction level of joint allocatee of Vijay Central Block was more than 100% as the requirement of the two parties as per norms applied came out to be only 0.626 MTPA whereas, mine capacity of the block is 1.36 MTPA. The remaining reserves in the block was 0.734 MTPA. During processing in Ministry of Coal, a decision was sought to be required for the same. While processing, it was also mentioned that Ministry of Coal had received representation from SKS (A-1) that the existing capacity indicated in the application form of M/s PIL was not correct upon which, the matter was referred to Ministry of Steel for verification and report.
5.9 While the process was going on, M/s PIL filed a Writ Petition No. 6449/2008 in Delhi High Court contending that Ministry of Coal had imposed a ceiling for recommended allocatees and distribution of coal quantity was being made on basis of 1.2 MTPA whereas, in the advertisement no such condition of ceiling was mentioned. Hon'ble High Court of Delhi vide its order dated 03.09.2008 directed the respondents to maintain status quo with respect to allocation of coal blocks to the petitioner. The issue of petition filed by M/s PIL was conveyed vide OM dated 09.9.2008 of Ministry of Coal to PMO for taking the same into consideration while taking decision on the file. Vide note dated 22.9.2008, the Director, PMO conveyed that PM as Minister of Coal had approved that the matter about CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 15 of 271 allocation of Vijay Central and Urtan Coal blocks may be referred back to Ministry of Coal for further examination in the light of orders of the Hon'ble High Court.
5.10 Sh. Subodh Kant Sahai, the then Minister of State for Food Processing Industries, vide letter dated 05.02.2008 addressed to the then PM Dr. Manmohan Singh brought to notice that SKS (A-1) had applied for two coal blocks for their steel plant in state of Chhattisgarh and Jharkhand and requested for personal intervention. A brief note in that regard was also enclosed with his letter along with copy of presentation to Screening Committee. Vide PMO ID No. 200/31/C/11/2008 ES.I dated 06.02.2008, the copy of above said letter submitted by Sh. Subodh Kant Sahai along with a brief note and copy of presentation of SKS (A-1) made before to the Screening Committee was sent to Secretary, Ministry of Coal for action as appropriate. Subsequently, vide PMO letter dated 25.03.2008, the comments of Ministry of Coal were further sought on PMO ID dated 06.02.2008.
5.11 The PMO ID dated 06.02.2008 was processed in Ministry of Coal and after approval of Secretary, Coal Shri H.C. Gupta Shri V.S. Rana, Under Secretary, Ministry of Coal, vide O.M. No. 38039/8/2008- CA-I dated 31.03.2008 replied to PMO that the Screening Committee in its meeting recently held on 07.12.2007 & 08.12.2007 and 07.02.2008 & 08.02.2008 considering the relative merits of each case, had scrutinized the applications for allocation of Vijay Central and Kesla North coal blocks earmarked for non-power sector including the application received from SKS (A-1) and after detailed deliberations the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 16 of 271 Screening Committee had decided that concerned State Governments and nodal Ministries would furnish their comments/views on tentative extractable reserves and likely annual mine capacity to the Ministry. Screening Committee would again meet to finalise its recommendation. Application of SKS (A-1) was to be considered along with other applicants on merits.
5.12 Vide order dated 02.07.2010, Hon'ble High Court of Delhi modified / vacated the stay order dated 03.09.2008 to the extent that order dated 03.09.2008 passed by the court would not affect the allocation made to SKS (A-1) and further clarified that the said order was absolute qua PIL alone. Subsequently, Ministry of Coal attended the matter related to M/s PIL in light of various orders passed by Hon'ble High Court of Delhi including in contempt case filed by M/s PIL. In pursuance of order dated 23.02.2011 of High Court of Delhi, a meeting of Screening Committee under chairmanship of Secretary, Coal Shri Alok Perti was held on 04.10.2011. The Screening Committee after detailed deliberations recommended the following :
i. That the request of M/s PIL for any additional amount of coal from Vijay Central Coal Block beyond quantity already recommended by the Screening Committee in its meeting held on 03.07.2008 is not justified and therefore, it does not recommend any additional allocation of coal from this block.
ii. The balance coal available in the block be allocated to Coal India Ltd. the committee further recommends that CIL be made leader for the block and other allocates be designated as associates.
5.13 Vide letter dated 01.11.2011 under signature of Shri PSS Reddy, Director, Ministry of Coal issued CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 17 of 271 allocation letter allocating Vijay Central Coal block to Coal India Ltd. ("CIL") and SKS (A-1). The share of SKS (A-1) was 16.08 MT. In this arrangement M/s CIL was the leader and SKS (A-1) was an associate. The allocation was made as per option III.
Result of Investigation
6. During the course of investigation, details of shareholding of SKS (A-1), unquoted shares and loans and advances were obtained from the company. The details of shareholding were also collected from concerned Registrar of Companies (ROC), Mumbai. The scrutiny of these documents revealed that Sh. Sudhir Kumar Sahay (A-5) was neither having any shareholding in SKS (A-1) nor he was ever its director nor he had received any loan and advances from SKS (A-1).
6.1 Vide letter dated 11.12.2007, addressed to Director, Ministry of Coal (D-219), A-5 Sudhir Kumar Sahay, Director, SKS (A-1) had requested for allocation of Vijay Central Coal block for their existing integrated steel plant at Raipur in Chhattisgarh and also enclosed company profile presentation with said letter. Further, he had enclosed letter dated 10.12.2007 of A-3 Deepak Gupta (D-219) as well with letter dated 11.12.2007. During investigation, presentation booklet submitted by SKS (A-1) before 36 th Screening Committee for allocation for Vijay Central coal block was also obtained from Ministry of Coal vide its letter dated 28.01.2015. In this presentation, the name of Sudhir Kumar Sahay was mentioned as Director of the company.
6.2 During the course of investigation, in response to notice U/s 91 Cr.P.C, SKS (A-1) informed that Sudhir CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 18 of 271 Kumar Sahay had never been the Director of the company. Thus, investigation has revealed that Sudhir Kumar Sahay was not the Director of SKS (A-1) but, he misrepresented himself as Director of company vide his letter dated 11.12.2007 to Ministry of Coal and also during presentation before the Screening Committee.
6.3 Investigation also revealed that the application dated 12.01.2007 (D-1) and the feedback form (undated) submitted with the Screening Committee on 07.02.2008 (D-
29) were containing false facts and figures with regard to networth; existing/proposed capacity of EUP; status of land in possession and the investments already made.
6.4 Following claims in respect of Networth were made in the application format and feedback form:
Application dated 12.01.2007 Networth Amts (Rs.)
i) 2005-06 198.88 Cr.
ii) Upto 31.12.2006 252.99 Cr.
Feedback form submitted on 07.02.2008
Networth Amount (Rs.)
(As on 31.03.2006) 352.89 Crores
(As on 31.03.2007) 468.60 Crores
(As on 31.12.2007) 524.53 Crores
6.5 Investigation revealed that the claim of
applicant company SKS (A-1) regarding their networth of Rs.198.88 crores for year 2005-06 as mentioned in their application form and networth of Rs. 352.89 crores as on 31.3.2006, Rs.468.60 crores as on 31.3.2007 as claimed in their feedback were false and incorrect. During investigation CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 19 of 271 their actual networth was found to be Rs.146.084 crores as on 31.3.2006 and Rs.191.349 crores as on 31.3.2007.
6.6 Following claims in respect of investment were made in the application format and feedback form:
Application dated 12.02.2007 Others Amts (Rs.)
i) Total envisaged investment 1470 Cr
ii) Investment already made up to 700 Cr.
31.12.2006 Feedback Form submitted on 07.02.2008 Finance
(a) Total envisaged (a) Rs.2600 Crores investment
(b) Financial Closure (b) Financial Closure for Phase I & II already completed.
(c) Investment already (c) Rs. 1100 Crores made 6.7 However, during investigation, the investment by SKS (A-1) as on 31.3.2006 was found to be Rs. 294.78 crores; on 31.03.2007, it was found to be Rs. 466.25 crores and on 31.03.2008, the investment was Rs. 585.83 crores. SKS (A-1) had misrepresented the aforementioned facts by fraudulently inflating the figures of networth and investment in the Application and the Feedback Form to show its better preparedness.
6.8 In the application form dated 12.01.2007, regarding clearances for the proposed end-use plant, the company SKS (A-1) claimed as under :-
24. CLEARANCES FOR THE PROPOSED END USE PLANT:
(i) Mention the All clearance almost obtained clearances applied for CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 20 of 271
(ii) Mention the Chattisgarh State Electricity Board,
clearances obtained Pollution Control Clearance,
Environmental Clearance, Water
Availability, railway Siding.
(iii) Likely Date of N.A
obtaining all
clearances
(iv) Others All Clearance almost obtained.
6.9 However, the investigation revealed that SKS (A-
1) misrepresented the facts also in respect of pollution clearance in the application form dated 12.01.2007. As per investigation, the company (A-1) had installed Sponge Iron kilns of capacity 0.27 MTPA (1st & 2nd kiln of 100 TPD each and 3rd & 4th kiln of 350 TPD each) before the date of application. But the consent to operate for 4th kiln of 350 TPD was granted by Chhattisgarh Environment Conservation Board (CECB) only on 05.04.2007 i.e. much after the date of said application. Further, the company (A-1) was not having pollution clearance for any additional proposed capacity of sponge iron plant other than 0.27 MTPA. Thus, the company was neither having pollution clearance in respect of 4th kiln contributing towards 0.27 MTPA of existing capacity nor that for proposed capacity of 0.33 MTPA.
6.10 Following claims in respect of status of land availability/possession were made in the application format and feedback form:
Application dated 12.01.2007 LAND YES NO Remarks, if any
i) Requirement 500 Vide MOU's dt. 16 Aug 2004 and (Sq.Km/Hectare) Acre 06 Oct 2006 with Govt of Chhatisgarh providing all CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 21 of 271
required assistance for
procurement of coal, iron and
water from any sources. Copies
of MOU's enclosed
ii) Identification 500
Acre
iii) Applied for 500
Acquisition Acre
iv) Partly Acquired 300 We had aquired at Siltara
Acre Industrial Growth Centre, Phase-
II, 18th Mile Stone, Bilaspur
Road, Raipur, Chhattiasgarh.
v) Likely date of full 31-
possession 12-07
vi) In possession 300
Acre
Vii) Others -
Feedback Form submitted on 07.02.2008
Land
(a) Total requirement 500 Acres
(b) Already acquired 500 Acres
6.11 During the course of investigation, it has
transpired that SKS (A-1) dishonestly and fraudulently claimed to have 300 acres of land in its possession in the application form and 500 acres of land in the feedback form.
During the course of investigation, Company SKS (A-1) could only produce registered sale deeds in respect of 268.37 acres of land in the name of SKS (A-1) at the time of making application to the Ministry of Coal i.e. on 12.01.2007 and 305.82 acres of land at the time of making presentation before the 36th Screening Committee meeting i.e. as on 07.02.2008. Hence, SKS (A-1) misrepresented to the Ministry of Coal even qua possession of land.
6.12 Investigation revealed that at the time of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 22 of 271 making application by SKS (A-1) to Ministry of Coal on 12.01.2007, SKS (A-1) was having 237.39 acres of land at the main plant area and at the time of submitting of feedback form/ presentation on 07.02.2008, it was having 266.41 acres of land at main plant area. SKS (A-1) had made contradictory claims qua the acquiring of land and same was evident from the fact that Techno Economic Feasibility Report (TEFR) filed with the application dated 12.01.2007, it was specifically mentioned in para 8.1 that the plot in which the plant was spread, was admeasuring 8,30,000 m2 (205 Acres) and additional 100 Acres land has to be procured for the second Rolling Mill and 3 x 350 TPD DRI Plants. The said Techno Economic Feasibility Report (TEFR) (January, 2007) for 0.6 million tonne additional integrated facilities in phase III expansion at Raipur- Chhattisgarh of SKS (A-1) was prepared by Korus Engineering Solutions Pvt. Ltd. and was submitted by SKS (A-1) with the Ministry of Coal with its application dated 12.01.2007.
6.13 During investigation, opinion of CFSL was sought in the instant case. Vide Report No. CFSL-2015 / D- 608 dated 21.10.2015 of Sh. Anil Sharma, SSO-II, received from CFSL vide their Letter No. CFSL-2015-D-608/3547 dated 29.10.2015, positive opinion was given on questioned signature Q-1 to Q-8, Q-10 and Q-11, questioned signatures of Sh. Amrit Singh (his signatures on Application & Feedback Form and his handwriting on the Attendance Sheet and also on Q-14 in respect of Sh. Sudhir Kumar Sahay (his signature on letter dated 11.12.2007).
6.14 On the basis of above investigation, it was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 23 of 271 concluded that due to aforementioned willful concealments and deceptions, the company SKS (A-1) was able to secure the allocation of vide Central Coal Block in its favour. Based on said false claims and figures, an advanced state of preparedness was shown, which according to the extant guidelines, was an important factor to be taken into account by the Screening Committee while making its recommendations.
Cognizance
7. As per chargesheet, no incriminating evidence had come forth against the other directors of SKS (A-1) or against the officials of the Ministry of Coal, Ministry of Steel and officers of State Government of Chhattisgarh and therefore, only five private persons (A-1 to A-5) were chargesheeted before the court for the offence u/s 120-B r/w 420 IPC and substantive offences thereof. Vide order dated 26.05.2017, cognizance was taken in the matter and all the five accused were summoned by this court.
Framing of Charge 7.1 Vide a detailed order dated 17.05.2023, charge for the offences of criminal conspiracy punishable u/s 120-B r/w 420 IPC and substantive offence of cheating punishable under Section 420 IPC was ordered to be framed against all the five accused persons i.e. A-1 Company SKS (A-1), A-2 Anil Gupta (Managing Director), A-3 Deepak Gupta (Joint Managing Director), A-4 Amrit Singh (Authorized representative/ Manager) and A-5 Sudhir Kumar Sahay (Designated Director). On 02.06.2023, formal charge against all the accused persons were accordingly framed to which they pleaded not guilty and claimed trial.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 24 of 271 Allegations in the Formal Charge
8. All the accused persons have been charged for the offence punishable under Section 120-B r/w 420 IPC and Section 420 IPC, with following allegations.:-
1. They entered into a criminal conspiracy to cheat Ministry of Coal, Government of India so as to procure allocation of a captive Coal Block in favour of SKS (A-1) by making various false claims about networth, land, investment and clearances.
2. In pursuance of said criminal conspiracy, Anil Gupta (A-2) and Deepak Gupta (A-3) got prepared application dated 12.01.2007 in the name of company (A-1), for allocation of coal block; Amrit Singh (A-4) signed the said application dated 12.02.2007 and 'Sudhir Kumar Sahai (A-5)' wrote a letter dated 11.12.2007 in the capacity of Director of SKS (A-1).
3. In pursuance to the afore-mentioned conspiracy, SKS (A-1) made following false claims in its application dated 12.01.2007:-
a) In column No. 10, A-1 made false claim about its net worth as on 31.03.2006 as Rs. 252.94 crore against actual net worth of only Rs. 146.084 crore;
b) In column no. 18, A-1 made false claim about purchase of 300 acres of land against actual possession of only 268.37 acres of land as on 12.01.2007;
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 25 of 271
c) In column No. 26, A-1 made false claim
about existing capacity of Sponge Iron Plant as 0.27 MTPA whereas, it was found that consent to operate the 4th kiln was given only on 05.04.2007;
d) In Column No. 25(ii), A-1 made false claim of total investment of Rs. 700 crore upto 31.12.2006.
e) In Column No. 24, A-1 made false claim about having received almost all Clearance as on 12.01.2007 whereas, consent to operate of 4th kiln was granted by CECB only on 05.04.2007 and thus, false claim was made regarding clearance;
4. In pursuance to the afore-mentioned conspiracy, accused Anil Gupta (A-2), Amrit Singh (A-4) and Sudhir Kumar Sahai (A-5) attended the meeting of 36th Screening Committee held on 07.02.2008, where accused Anil Gupta (A-2) made presentation on behalf of the SKS (A-1) and Amrit Singh (A-4) submitted a feed back form dated 07.02.2008, containing following false claims :
a) In column no. 4, A-1 made false claim
about net worth of Rs. 352 crores as on
31.03.2006 whereas, the actual networth as on said date was only Rs. 146 crore.
b) In column no.5, A-1 made false claim about 500 acres of land in possession of the company as against the actual land in possession to be only 305.82 acres as on said date;
c) In Column No. 10 (c), A-1 made false claim about investment of Rs. 1100 crores.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 26 of 271
5. In furtherance of common object of the criminal conspiracy as described above, all the accused made aforementioned false claims in the application dated 12.01.2007, Feedback form dated 07.02.2008 and the letter dated 11.12.2007 and thereby, all the accused dishonestly and fraudulently deceived the Ministry of Coal, Government of India and induced it to allocate Vijay Central Coal Block situated in the State of Madhya Pradesh in the name of A-1 vide allocation letter dated 01.11.2011 and thereby, committed an offence punishable under Section 120-B r/w 420 IPC and Section 420 IPC.
Admission/Denial of Documents
9. Admission/denial of the documents u/s 294 CrPC was carried out by all the accused persons wherein, various documents were admitted and same were exhibited as Ex.P- 1 to Ex.P-123. Prosecution also proved said documents during trial through various prosecution witnesses. During prosecution evidence, the numbering of exhibited documents started from Ex.P-123 onwards.
Prosecution Evidence
10. In order to prove its case, as many as 40 witnesses were examined by the prosecution and through said witnesses prosecution exhibited document from Ex. P- 124/PW-1 to Ex. P-417/PW-40, their examination-in-chief is succinctly discussed herein below. All the witnesses were cross examined at length by the Ld. Defence Counsels. For the sake of convenience, witnesses have been categorized in following broad categories:-
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 27 of 271
A. Witnesses/Employees of SKS (A-1).
B. Witnesses from Government of Chattisgarh/MOU
C. Witnesses Related to Environment and Water Resource
Clearance.
D. Witnesses related to status of land/title deed
E. Witnesses related to calculation of networth
F. Witnesses from PMO Office
G. Witnesses from Ministry of Coal
H. Witnesses from Ministry of Steel
I. Witnesses related to Role of Sudhir Kumar Sahay(A-5)
J. Witnesses to specimen signature, search and seizure
K. Witnesses from Central Excise pertaining to EUP
Capacity
L. Witnesses from CFSL
M. Witnesses from CBI
N. Others
A. Witnesses/Employees of SKS (A-1).
(1) Sh. Amit Kumar, Assistant Manager (Legal) in SKS (A-
1) (PW-6)
(2) Sh. Rohit Jaiswal (PW-7)
(3) Sh. Ajay Vishnoi (PW-8)
(4) Sh. Sandeep Bhardwaj Marketing Officer, SKS (A-1)
(PW-23)
B. Witnesses from Government of Chattisgarh/MOU
(1) Sh. Sanjay Kankane, Directorate of Geology & Mining,
Government of MP (PW-25)
(2) Sh. K.L.Uike, Joint Director in State Investment
Promotion Board, Chhattisgarh (PW-35) C. Witnesses Related to Environment and Water Resource Clearance (1) Sh. Anoop Kumar Behre, Superintending Engineer in Head Office, Chhattisgarh Environment Conservation Board (CECB) (PW-1) (2) Sh. Sunder Singh, UDC from Record Room, Ministry of Environment, Forest & Climate Change, Indira Paryavaran Bhawan, ND( PW-2) (3) Sh. Madan Lal Sahu, Assistant Engineer in Water Resources Department Office, Raipur, Chhattisgarh (PW-10) CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 28 of 271 (4) Sh. Ajay Kumar Shrivastava the Executive Engineer
from Water Resources Department Office, Raipur, Chhattisgarh (PW-11).
(5) Sh.E.V. Thomas, Dy. Secretary in Ministry of Environment, Forest & Climate Change (PW-24) (6) Sh. Ashok Kumar, Under Secretary in Vigilance Division of Ministry of Environment, Forest & Climate Change, Government of India (PW-30) D. Witnesses related to status of land/title deed (1) Sh. Murari Ram Bhuvarya, Sub-Registrar, Jagdalpur, Chhattisgarh (PW-9).
(2) Sh. H.G. Aggarwal, Consultant for Steel Industries and Head of Korus Engineering Solutions Pvt. Ltd (PW-12) (3) Sh. Shailendar Dani, Sub-Registrar from Sub-
Registrar Office, Khairagadh, Chhattisgarh (PW- 13) (4) Sh. Mahendra Agrawal, Registration Clerk, Office of Sub-Registrar, Kurud, Chhattisgarh (PW-34) (5) Sh. Mukesh Verma, AGM (Finance and Accounts), M/s SKS Ispat and Power Limited (PW-36) (6) Sh. Rajeev Kumar Agrawal, Relationship Manager, Commercial Branch of State Bank of India at Raipur, Chhattisgarh (PW-37) E. Witnesses related to calculation of networth (1) Sh.Virendra Kumar Jain, Charted Accountant, Power Finance Corporation (PW-3) (2) Dr. Raj Singh, Regional Director (Southern Region) Ministry of Corporate Affairs, Chennai (PW-5) F. Witnesses from PMO Office (1) Sh. Santosh D. Vaidya, Director, PMO (PW-26) (2) Ms. Vini Mahajan, Director, PMO (PW-28).
(3) Sh. Sanjay Lohiya, Director in Prime Minister Office
(PW-38)
G. Witnesses from Ministry of Coal
(1) Sh. V.S. Rana,Under Secretary, Ministry of Coal
(PW-17)
(2) Sh. A. Sanjay Sahay, Under Secretary, Ministry of
Coal, Government of India (PW-19)
(3) Sh. Ram Naresh, Section Officer, Ministry of Coal,
Government of India (PW-27)
(4) Sh. Ved Parkash Sharma, Section Officer CA-1
Section, Ministry of Coal (PW-39)
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 29 of 271
H. Witnesses from Ministry of Steel
(1) Sh. Nihar Ranjan Dash, Director, Ministry of Steel
under Central Staffing Scheme (PW-16)
I. Witnesses related to Role of Sudhir Kumar Sahay
(A-5)
(1) Sh. Mahendra Arya (PW-14)
(2) Sh.Rajesh Srivastava, Chartered Accountant. Rajesh
Srivastava & Co at Ranchi (PW-15)
(3) Sh. Subodh Kant Sahai, Union Cabinet Minister (PW-
31)
J. Witnesses to specimen signature, search and
seizure
(1) Sh. H.K. Gulati, Lead District Office, Hathras in Canara
Bank (PW-29)
(2) Sh.Sudhakar Bhai Tripathi, Sr. Manager (Legal),
Regional Office, Bank of Baroda, Raipur, Chhattisgarh (PW-33) K. Witness from Central Excise (1) Sh.Swapan Kumar Khan,Superintendent, Central Excise, Range-II, Civil Lines, Raipur (PW-4) (2) Sh. Dharamjeet Kumar, Dy. Commissioner, Central Excise, Raipur ( PW-22) L. Witnesses from CFSL (1) Sh. Anil Sharma, Forensic Expert (PW-18) M. Witnesses from CBI (1) Sh. K.P. Singh, Malkhana Incharge, CBI, EO-I, Delhi (PW-32) (2) IO/Dy. SP Sh. Manish Raj Atrey, Investigating Officer (IO) PW-40 N. Others (1) Sh. Piyush Goyal, Technical Director, NIC, New Delhi (PW-20).
(2) Sh.Rakesh Kumar Sahu, Registrar of Companies- cum-
Official Liquidator, Chhattisgarh (PW-21) A. Witnesses/Employees of SKS (A-1)
11. PW-6 Sh. Amit Kumar, is the Assistant Manager (Legal) in SKS (A-1). He deposed that during CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 30 of 271 investigation of the present case, he had submitted certain documents to the CBI. He identified the signatures of Sh. Anil Gupta (A-2), Managing Director of SKS (A-1) on the letter dated 24.09.2014 (D-55) and on the annexure/list of the Sale Deeds containing the details of land Ex. P-4 (Colly.) (Page 1 to 22 of D-55). He (PW-6) also identified his signatures/initials on copies of Sale Deeds Ex. P-5 to Ex. P- 23 (Colly.) (D-56 to D-74).
11.1.1 He further deposed that as per records, at the time of making application for coal block allocation SKS (A-1) was having land about 308 acres and at the time of submission of feedback form, SKS (A-1) was having land around 430 acres. He was cross-examined on behalf of A-1 and A-3 but nothing material was asked in his cross- examination, because the said position of land available with SKS(A-1) is even otherwise admitted, in view of the documents supplied by the accused (A-2) during the course of investigation.
11.2.1 PW-7 is Sh. Rohit Jaiswal, who was also working with SKS (A-1) during the relevant period. As per his version, Sh. Anil Gupta was the Managing Director and Sh. Deepak Gupta was Joint MD of A-1. Apart from him (PW-7), Sh. Amrit Singh and Sh. Sandeep Bhardwaj also used to work at Delhi office. He deposed that he had also participated in presentation in respect of application for coal block allocation. PW-7 identified the signature of Amrit Singh on the application Ex. P-1 (D-5) and feedback form Ex. P-2 (D-29) for the coal block at Vijay Central (D-5). He identified his signature on the Attendance Sheet Ex. P-156 (Part of D-27) at srl. no. 156, of the presentation made CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 31 of 271 before the screening committee where Anil Gupta, Sudhir K. Sahai/Sahay and Amrit Singh were also present. He deposed that at the time of presentation, he was not aware of status of Sudhir K. Sahay in the company SKS (A-1) but the day to day affairs of the company regarding marketing and production used to be looked after by Deepak Gupta. Anil Gupta being MD also used to look after the affairs of the company.
11.2.2 During examination-in-chief, PW-7 was asked to identify the purported signature of Sudhir Kumar Sahay (A-5) on the letter dated 11.12.2007 Ex. P-154/PW-7 (D-219) on the letterhead of our company i.e.SKS (A-1) but he deposed that he was unable to identify the signatures on said document. He however, denied the purported signature of Sh. Deepak Gupta (A-3) at point A on the letter dated 10.12.2007 (page 2 & 3/ D-219) Ex. P- 155/PW-7, annexed with the aforementioned letter dated 11.12.2007 of A-5. PW-7 also identified signatures of Anil Gupta on various documents which were already admitted.
11.2.3 As per record, the PW-7 was cross-
examined by Ld. Sr.PP u/s 154 of Indian Evidence Act, wherein he identified his signature and also the signature of other attendees Sh. Anil Gupta, MD, Sh. Sudhir Kumar Sahai, Director, Sh. Amrit Singh, Manager (Delhi office). He admitted that due to lapse of time, he could not identify Sudhir K. Sahay or his handwriting or signature.
11.2.4 In his cross-examination on behalf of A-1, he deposed that application Ex. P-1 was neither prepared by him nor upon his dictation nor in his presence. As per his version, Anil Gupta used to work from Mumbai office and CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 32 of 271 Deepak Gupta used to work from Raipur office of the company (A-1). In his cross-examination on behalf of A-3 Deepak Gupta, he (PW-7) stated that he had no personal knowledge about contents of Ex. P-155/PW-7 i.e. letter dated 10.12.2007. In his cross-examination on behalf of A-4 Amrit Singh, he deposed that the print out of the application Ex. P-1 (Colly.) was taken out one day before it was submitted to Ministry of Coal i.e. on 11.01.2007. He stated that print out of one more application was taken out regarding another coal block which application was also submitted on 12.01.2007. He stated that all the enclosures were also brought from Mumbai office. He stated that print out of the Feedback form was also taken out at Delhi office.
11.3.1 PW-8 is Sh. Ajay Vishnoi. As per his version, during the year 2015, he was working with M/s SKS Power Generation (C.G.) and it had two companies i.e. SKS Power Generation (C.G.) and SKS (A-1). Sh. Anil Gupta was the Managing Director and Sh. Deepak Gupta was Joint Managing Director of SKS (A-1). During examination in chief, PW-8 identified the signatures of Sh. Anil Gupta on various documents put to him i.e. the Letter dated 24.09.2014 (Ex. P-4), vide which certified copies of the Sale Deeds {Ex. P-5 to P-23 (D-56 to D-74)} in the name of SKS (A-1) in 19 volumes were submitted to CBI.
11.3.2 Similarly, he identified signature of Sh. Anil Gupta on various other letters vide which original sale deeds/certified copies of sale deeds of different lands were handed over to CBI. Said letters are exhibited as under :-
a. Ex. P-72 (Colly.) (D-153), Ex. P-73 (Colly.) (D-
154), Ex. P-74 (Colly.) (D-155) and Ex. P-75 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 33 of 271
(Colly.) (D-156)].
b. Letter dated 13.04.2015 (D-121, Ex. P-48
(Colly.), vide which total 87 original sale deeds Ex.
P-49 (Colly.) (D-122, part 1 to part 7) were submitted to CBI.
c. Letter dated 24.12.2014 (Ex. P-50 (Colly.), vide which 10 original sale deeds were submitted to the IO Sh. Bodh Raj Hans of RC 17 E 2014, the copies of the sale deeds are already Ex. P-51 (Colly.) (D-
124).
11.3.3. During examination in chief, PW-8 identified signature of Deepak Gupta on the letter dated 12.01.2015 (Ex. P-58 (Colly.), vide which, 74 original sale deeds as per the Annexure-II Ex. P-59 (Colly.) (D-134), Ex. P-60 (Colly.) (D-135), Ex. P-61 (Colly.) (D-136), Ex. P-62 (Colly.) (D-137), Ex. P-63 (Colly.) (D-138), Ex. P-64 (Colly.) (D-139) and Ex. P-65 (Colly.) (D-140) were submitted to the IO Sh. Bodh Raj Hans in RC 17 E 2014. He further deposed that out of total sale deeds in 19 volumes, 113 original sale deeds (submitted by the bank in RC 17 E 2014) were submitted with State Bank of India, Commercial Branch, Pachpedi Naka, Raipur.
11.3.4. PW-8 identified his signatures on the production-cum-receipt memo Ex. P-66, vide which three sale deeds Ex. P-67 (Colly.), the details of which are mentioned therein, were handed over to the CBI. He further deposed that the letter dated 24.09.2014 Ex. P-4 (Colly.) which was handed over by him to the CBI contained the details of the land situated in villages Siltara, Munrethi and Parstarai, owned by SKS (A-1). Apart from these CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 34 of 271 villages, lands situated in village Mova and Parsabuda were also owned by SKS (A-1). Rest of the land which were situated in other villages were either owned Shri Krishna Structures Pvt. Ltd., Anil Gupta, Deepak Gupta or Mahavir Prasad Gupta. The area of the land as on 12.01.2007 and 07.02.2008 was also mentioned in the details of the land in Ex. P-4 (Colly.).
113.5 In his cross-examination on behalf of A-3 Deepak Gupta, he (PW-8) admitted that Deepak Gupta used to look after marketing, production and maintenance of plant at Raipur. He further admitted that Anil Gupta used to look after banking, finance and corporate affairs from Mumbai office. He further admitted that Deepak Gupta was residing in Raipur, Chhattisgarh.
11.3.6 In his cross-examination on behalf of A-4, PW-8 stated further that he (PW-4) had joined SKS (A-1) in 01.01.2011 as AGM (Corporate Affairs) and he used to look after various issues related to different government departments. He further stated that the documents which were forwarded vide letters referred to in his examination- in-chief, were submitted on instructions of the management.
11.4.1 PW-23 is Sh. Sandeep Bhardwaj. As per his version, in the year 2006, he had joined SKS (A-1) as Marketing Officer and he worked there for about 1+ year and thereafter, he joined IGL. During his tenure in SKS (A-
1), he used to sit in Delhi office of A-1 company at Naraina Industrial Area and in said office, Sh. Amrit Singh (A-4) and one Sh. Srivastava also used to work. Amrit Singh used to look after all the liaisoning work with the ministries etc. As per his version, Deepak Gupta used to look after work of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 35 of 271 Delhi office and Raipur plant. 11.4.2 PW-23 identified signature of Amrit Singh
in the application form Ex. P-1 (colly)(D-5) and also on the questioned signature Q-1 to Q-7. He also identified signature of accused Amrit Singh at point Q-8 at the feed back form Ex,P-2 (colly)(D-29). He also identified the handwriting of Amrit Singh at point Q-10 and Q-12 on Ex. P- 247/PW-18 (part of D-27).
11.4.3 In his cross examination on behalf A-1, he admitted that the name of Deepak Gupta was not appearing on the attendance sheet Ex. P-247/PW-18. In his cross- examination on behalf of A-4 Amrit Singh, he deposed that they used to work as per the instructions received from the head office, Raipur.
11.5.1 PW-36 is Sh. Mukesh Verma. He deposed that he had joined SKS (A-1) as an accountant on 07.09.2004 and during the year 2005-06, Sh. Deepak Gupta was the Joint Managing Director and Sh. Anil Gupta was Managing Director in said company and he (PW-36) had worked with them. He identified the signature of Sh. Anil Gupta on the letter dated 24.09.2014 Ex. P-4 (Colly.), (D-
55), vide which, the details of the land available with the company (A-1) as on 07.02.2008 in respect of Vijay (Central) Coal Block, were forwarded to CBI and the details of the land were annexed with the letter from Page 3 to 22. At page 3, the details of the land situated in fourteen villages as on 12.01.2007 and 07.02.2008, were mentioned. He further deposed that copies of sale deeds in a Volume-9 of D-64, Ex. P-13 (Colly.), are the copies of sale deeds of the land in respect of village Gogaon, which was purchased CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 36 of 271 by Anil Gupta, Deepak Gupta and Prem Lata Gupta and the total land situated in village Gogaon was 7.10673 acres.
11.5.2 He identified the signature of Sh. Anil Gupta on the following letters vide which, various documents and information were forwarded to CBI :-
S.No Documents/letters Documents/information furnished
1. Letter dated 13.04.2015 87 numbers of original sale deeds Ex. P-48 (Colly.), D-121 Ex. P-49 (Colly.) (D-122)
2. Letter dated 24.12.2014 Details of land held by M/s SKS Ex. P-50 (Colly.), D-123 Ispat & Power Ltd with original documents, as per Annexure II-A
3. Letter dated 08.04.2015 Details of the land alongwith the annexures, Ex. P-72 (Colly.), D-153
4. Letters of different dates Ex. P-73 (D-154), P-74 (D-155), admitted under Section P-75 (D-156), P-76 (D-157), P-77 294 CrPC (D-158) and P-78 (D-159)
5. Letter dated 29.09.2014 Documents as per attached already Ex. P-80 (Colly.) annexures 11.5.3 He further deposed that he used to work at plant office of SKS (A-1) at Siltara. As per his version, from Siltara the distance of village Gogaon was about 12 Km; for village Mova it was about 21 Km; for Parsabuda, it was about 60 Km; for Nardha village it was about 21 Km and that for Saddu village, the distance was about 20 Km.
11.5.4 PW-36 was cross-examined on behalf of A-
1, wherein he stated that the land brokers used to deal with the farmers for the purchase of land and thereafter, agreements used to be entered with the farmers on payment of earnest money. The company used to take lands into possession. Thereafter, search report and other formalities used to be completed and sale deeds used to be executed. He further stated that one Sh. Sandeep Aggarwal, Sh. S.K. Domohe and others were some of the local land CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 37 of 271 brokers and usually, 2-3 months time was needed for execution of sale deeds after execution of agreements. Some of the lands were purchased at some distance from the main plant area as provisions for ash dumping, staff welfare, logistics etc. had to be made.
11.5.5. He stated that the land at Pandripani was purchased which was 300 Km away from the main plant because an iron ore crusher plant was to be established at Pandripani. The iron ore was to be received from NMDC at Jagdalpur by railways and after processing the iron ore in the crusher plant, the fines could be sold off at Pandripani and sized ore used to be transported to the main plant. He further stated that the ash generated from the main plant could not be dumped at public place and it was required to be dumped at a distant place. He admitted that Mahabir Prasad Gupta, Anil Gupta and Deepak Gupta were the shareholders and promoters of SKS (A-1) and that M/s Shree Krishna Structures Pvt. Ltd. was also shareholder and an associate company of SKS (A-1). Ld. Counsel for A-2, A- 3 and A-4 adopted the cross-examination conducted on behalf of A-1.
11.5.6 During cross-examination on behalf of A-5, he identified Sh. Sudhir Kumar Sahay and deposed that he used to visit the plant sometimes as raw material procurement was under him as he was designated as Director (Raw Material).
11.5.7 The witness PW-36 was re-examined by Ld. Sr.PP with the permission of the court regarding designation of A-5 as Director (Raw Material) to which PW- 36 deposed that no document to show that A-5 was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 38 of 271 designated as Director (Raw Material) existed in the Accounts Section of the Company. B. Witnesses from Government of Chattisgarh/MOU 12. PW-25 is Sh. Sanjay Kankane. As per
his version, he had joined Directorate of Geology & Mining, Government of MP in 1991 as Assistant Geologist. He deposed that in the year 2014, he was posted as Under Secretary in Mineral Resource Department, Government of Chhattisgarh, Raipur and had provided certain documents and information from their department to the CBI.
12.1.1 He proved his signature on the letter dated 24.11.2014 (Ex. P-274/PW-25) (D-210) at point A and deposed that vide said letter it was informed to the CBI that during the 36th Screening Committee for allocation of coal blocks, Chhattisgarh Government had not sent any recommendation in respect of any coal block. He had also forwarded the documents mentioned in the letter to the CBI. He further identified the signature of Sh. B.L. Thakur, the then Secretary, Chhattisgarh Government at point A on the letter dated 04.07.2008 (Ex. P-275/PW-25) (part of D-211).
12.1.2 He further proved on record the document Ex. P-276/PW-25 (part of D-211), which contains details of MoUs signed with state government by the companies in whose favour coal blocks were to be allotted. He further deposed that alongwith the letter Ex. P-274/PW-25, certified and original copies of MoUs signed between Chhattisgarh State Industrial Development Corporation Ltd. and SKS (A-
1) as well as Government of Chhattisgarh and SKS (A-1) were also forwarded which were received from Chhattisgarh State Industrial Development Corporation Ltd. vide letter CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 39 of 271 dated 19.11.2014. The copy of letter dated 19.11.2014 and abovestated MoUs dated 16.08.2004, 06.10.2006 and 08.08.2008 are available on record as Ex.P-277/PW- 25(Colly.)(part of D-211). PW-25 further deposed that alongwith letter Ex. P-274/PW-25, he had also forwarded copy of letter dated 16.11.2012 alongwith its annexures Ex. P-278/PW-25 (Colly.) (part of D-211).
12.1.3 In his cross-examination on behalf of A-1 company, he stated that in letter Ex. P-274/PW-25, it was mentioned that the then Chief Secretary, Government of Chhattisgarh, Sh. Shivraj Singh and Secretary, Mineral Resources Department, Sh. B.L. Thakur had attended the meeting dated 03.07.2008 of the Screening Committee as representative of the Government of Chhattisgarh and orally presented the views of the said government.
12.1.4 He admitted that in MoU dated 16.08.2004 Ex.P-277/PW-25(Colly.)(part of D-211), it was mentioned as under:
"Whereas, "CSIDC" acting on behalf of the Government of Chhattisgarh agrees to provide all help in obtaining prevailing incentives and facilitate clearances necessary for aforesaid projects in the State of Chhattisgarh through the intervention of the STATE INVESTMENT PROMOTION BOARD under the Chhattisgarh Audyogik Nivesh Protsahan Adhiniyam, 2002 (hereinafter referred to as the "ADHINIYAM") including allotment of land required for setting of these projects, as well as facilitate recommendation of the State Government to concerned Ministries/ Departments for grant of lease for Coal, Iron Ore for the project's requirements as per existing policy of the State Government."
12.1.5 He further admitted that in the MoUs dated 06.10.2006 (part of Ex. P-277/PW-25 (Colly.) (D-), it was mentioned as under:
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 40 of 271 "AND WHEREAS, the Government of Chhattisgarh agrees to provide all help, in prevailing incentives and facilitate clearances necessary for aforesaid projects in the State of Chhattisgarh through the intervention of the STATE INVESTMENT PROMOTION BOARD constituted under the Chhattisgarh Audyogik Nivesh Protsahan Adhiniyam, 2002 including allotment of land required for setting of these projects, recommendation of the State Government to concerned Ministries/ Departments of the Government of India as per the existing policy of the State Government, wherever such recommendations are required."
12.1.6 During his cross-examination, PW-25 further deposed that the parameters considered by the Government of Chhattisgarh for making recommendations for coal block allocations and rationale thereof were mentioned in para II of the Annexure-I of letter dated 16.11.2012 (Ex. P-278/PW-25).
12.2.1 PW-35 is Sh. K.L. Uike. He deposed that during the year 2015, he was posted as Joint Director in State Investment Promotion Board, Chhattisgarh and in response to letter of CBI dated 19.01.2015 regarding the clarification of correction in the MoU, he sent a letter dated 26.02.2015 alongwith the certified copy of MoU, certified by Sh. Arun Vaidya, the then Assistant Director Ex. P-315/PW- 35 (Colly.) (D-214) to CBI. PW-35 identified his signatures on the said letter dated 26.02.2015. He identified his signatures on the letter dated 14.11.2014 (part of Ex. P-
277/PW-25 (Colly.), vide which he had forwarded two MoUs dated 06.10.2006 and 08.08.2008 to Sh. Sanjay Kankane, Under Secretary, Mineral Resource Department, Chhattisgarh. Ld. Defence Counsels chose not to cross- examine this witness.
C. Witnesses Related to Environment and Water Resource Clearance.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 41 of 271 13. PW-1 Sh. Anoop Kumar Behre, who at the relevant time in the year 2014, was posted as Superintending Engineer in Head Office, Chhattisgarh Environment Conservation Board (CECB). As per his
examination-in-chief, during that period, Sh. Devendra Singh was posted Member-Secretary in CECB, Chhattisgarh and Sh. A.C.Maloo, as Executive Engineer and he identified their signature on the letter dated 30.09.2014 (D-188) Ex. P-124/PW-1, vide which information was given regarding certain queries raised by the IO M.R. Atrey and two files in two volumes i.e. Volume-I (D-189) Ex. P-88 (Colly.) in respect of SKS (A-1) and Volume-II (D-190) Ex. P-89 (Colly.) (both files admitted u/s 294 CrPC) were handed over to him (IO). During his (PW-1) examination-in-chief, he referred to certain specific pages of said files, which were separately marked as follows:-
S.No Document
A File (Volume-I)(Ex. P-88) (Colly.)
Document Signatures Exhibit/ Page
identified no.
1. Letter for permission dated Sh. Anil Ex. P-125/PW-
20.07.2004 vide which consent Kumar 1 (Colly.)
for establishment was issued to Sharma, the (at page 262 to M/s SKS Ispat Pvt. Ltd. for then Chief 267) production of sponge iron Engineer 192000 MTPA and OSD
2. Letter for consent dated As above Ex. P-126/PW-
14.02.2006, vide which consent 1 (Colly.)page under section 25/26 of the 268 to 284 Water (Prevention and Control of Pollution) Act, 1974 to operate sponge iron plant of capacity 192000 MTPA was issued to M/s SKS Ispat Pvt. Ltd
3. Letter for consent dated As above Ex. P-127/PW-
14.02.2006, vide which consent 1 (Colly.)page under section 21 of the Air 285 to 290 (Prevention and Control of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 42 of 271 Pollution) Act, 1981 to operate sponge iron plant of capacity 192000 MTPA was issued to M/s SKS Ispat Pvt. Ltd.
4. Letter for consent dated As above Ex. P-128/PW-
03.09.2005, vide which consent 1 (Colly.) page under section 25/26 of the 291 to 307 Water (Prevention and Control of Pollution) Act, 1974 to operate steel billets for the capacity of 120000 MTPA and steel re-rolled products for the capacity 116400 MTPA was issued to M/s SKS Ispat Ltd
5. Letter for consent dated As above Ex. P-129/PW-
03.09.2005, vide which consent 1 (Colly.) page under section 21 of the Air 308 to 312 (Prevention and Control of Pollution) Act, 1981 to operate steel billets for the capacity of 120000 MTPA and steel re-
rolled products for the capacity 116400 MTPA was issued to M/s SKS Ispat Ltd B. File (Volume-II)(Ex. P-89) (Colly.)
1. Letter dated 12.10.2006 for Sh. K. Ex. P-130/PW-
permission to establish for Subramania 1 (Colly.) page proposed expansion in existing m, the then 740 to 747 plant for sponge iron from Member 192000 TPA to 270000 TPA, Secretary, steel division from 120000 TPA CECB to 331500 TPA, rolling mill production from 116400 TPA to 384000 TPA etc. was issued to M/s SKS Ispat Ltd
2. Letter dated 26.10.2006 for - Ex. P-131/PW-
request to issue consent to 1 (Colly.) page
operate for expansion of 578 to 582
production capacity in existing
plant under Air and Water Act,
filed by M/s SKS Ispat Ltd
3. Letter dated 23.10.2006 - Ex. P-132/PW-
regarding expansion of 1 (Colly.)page
integrated steel plant and 60 583 to 589
MW coal based thermal power
plant at Siltara, Raipur filed by
M/s SKS Ispat Ltd
4. In response to the letter dated Sh. K. Ex. P-133/PW-
26.10.2006, CECB, vide letters Subramania 1 (Colly.) Page CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 43 of 271
dated 05.04.2007, granted m, Member 748 to 773
consent to M/s SKS Ispat Ltd. Secretary, for operation of expansion of CECB sponge iron plant and other activity
5. Letter dated 07.08.2007CECB, Sh. K. Ex. P-134/PW-
vide which consent under Water Subramania 1 (Colly.) page and Air Acts, was issued to M/s m, Member 774 to 777 SKS Ispat Ltd. vide Secretary, CECB
6. Vide letter dated 10.02.2006, Sh. Anil Ex. P-135/PW-
CECB issued NOC for obtaining Sharma, 1 (Colly.) page Environmental clearance from Member 785 to 793 Govt. of India for expansion in Secretary, existing plant for sponge iron CECB from 192000 TPA to 270000 TPA, steel division from 120000 TPA to 331500 TPA etc.
7. Letter dated 25.08.2006 of Ex. P-136/PW-
Govt. of India, Ministry of 1 (Colly.) page Environment and Forests, vide 794 to 798 which, environmental clearance was issued to M/s SKS Ispat Ltd. for their expansion of plant at Siltara, Raipur, Chhattisgarh 13.1.1 In his examination-in-chief, PW-1 further deposed that subsequent to 05.04.2007, SKS (A-1) was granted consent to operate for production of sponge iron to the capacity of 270000 TPA but prior to 05.04.2007,SKS (A-
1) was having the permission to operate sponge iron plant of capacity of only 192000 TPA.
13.1.2 In his cross-examination on behalf of A-1 company, PW1 upon being shown the letter dated 23.04.2005 Ex. P-89 (colly) (at Page no. 313 of D-190), deposed that vide said letter SKS (A-1) had sought permission for expansion for environmental clearance but, he did not remember whether on the date of NOC dated 10.02.2006, he or his office had the information that 4 th Kiln of the company (A-1) was under construction or not.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 44 of 271 13.1.3 In response to the question that whether
he had made any complaint against the company in January, 2006 in the Court of CMM, Raipur for constructing 4 th Kiln without obtaining any permission from their office, he replied that he did not remember the date but he had filed one complaint. PW1 admitted his signature at point A on various pages on the photocopy of one complaint dated 05.01.2006 (Ex. P-137/PW-1). He admitted that in Para 6 of said complaint, it was mentioned that the company (A-1) had started expansion work without obtaining consent. He further admitted that the information regarding expansion work by the company was in their knowledge on 10.02.2006 as well as 12.10.2006.
13.1.4 He admitted that the company (A-1) had submitted a letter dated 31.08.2006 (page 546, Volume-II) (Ex.P-89) (Colly.), vide which it had requested for issuance of consent to establish expansion project and in response to said letter, letter dated 12.10.2006 (Ex. P-130/PW-1) was issued.
13.1.5 In response to the question as to whether his office had received any letter dated 25.11.2006 (Mark P- 138/PW-1) of the company (A-1), he replied that as he was not posted in the office of Member Secretary, Head Office, CECB, Raipur, therefore, he couldn't say whether said letter was received or not. He however, identified that the stamp dated 28.11.2006 of Regional Office, CECB at point X on said letter regarding receipt of said letter in that office however, he could not identify the initial of the receiver.
13.1.6 In response to the question that whether an application for obtaining consent to operate is filed after CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 45 of 271 the plant is installed and ready for commissioning, he replied that it should have been. He volunteered that some companies file it prior to completion of installation but those applications are rejected.
13.1.7 He admitted that the inspection of the plant of sponge iron was carried out after receiving letter dated 26.10.2006 of the company (A-1) and the consent to operate was issued on the basis of actual position of the plant as per inspection. He further admitted that said letter dated 26.10.2006 was processed and consent to operate was issued by CECB on 05.04.2007 and the request letter dated 26.10.2006 for issuing consent to operate was in respect of 4th Kiln of the sponge iron plant.
13.2.1 PW-2 Sh. Sunder Singh, is UDC from Record Room, Ministry of Environment, Forest & Climate Change, Indira Paryavaran Bhawan, ND. He deposed that in the year 2015, Sh. Satish Garkoti was the head of Impact Assessment-II Division, MoEF & CC. He identified his noting at Notesheet page no. 9 at portion X & X1 in the File No. J-11011/99/2006-IA-II(I), Ex.P-139/PW-2 (Colly.) (D-
193), in respect of environmental clearance for expansion of integrated steel plant at Chhattisgarh by SKS (A-1) which was forwarded vide letter dated 17.03.2015 (D-192) of Sh. E.V. Thomas, Dy. Secretary, Government. of India). PW2 deposed that the said file was maintained in their division of MoEF & CC.
13.2.2 PW-2 also identified in aforementioned file the application dated 01.03.2006 in respect of environmental clearance for expansion of sponge iron unit and power plant at village Siltara, Raipur at page 1/C to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 46 of 271 21/C; questionnaire for environmental appraisal and other documents which were filed on behalf of company SKS (A-1) at page 22/C to 111/C and the objective of the Project regarding the expansion of integrated steel plant in Phase-II mentioned at page no.3 of the said application form, and same was separately marked as Ex. P-140/PW-2 (Colly.).
13.2.3 PW-2 further deposed that the said application form was processed in their department and environmental clearance for expansion of integrated steel plant and 60 MW coal based thermal power plant at Siltara, Raipur was granted to the company vide letter dated 25.08.2006 by Addl. Director Sh. P.B. Rastogi Ex. P-141/PW- 2 (at page 245/C to 249/C of the abovesaid file Ex.P- 139/PW-2-colly.). In his cross-examination on behalf of A-1 company, he admitted letter dated 25.08.2006P-141/PW-2 was issued after processing the application Ex P-140/PW-2.
13.2.4 In his cross-examination on behalf of A-1 company, he admitted that letter dated 09.03.2006 (at page 134/C of File Ex. P-139/PW-2 (Colly.)) was sent by their office toSKS (A-1), to which the reply dated 28.03.2006 (at page 135/C of the abovesaid file) was received from the company SKS (A-1) and the letter and its reply are exhibited on record as Ex. P-142/PW-2 (Colly.). He identified the notes dated 20.03.2006 and 16.06.2006 at pages 2/N to 4/N and page 5/N respectively in the File Ex. P-139/PW-2 (Colly.)) and same were separately marked as Ex. P-143/PW-2 (Colly.).
13.3.1 PW-10 Sh. Madan Lal Sahu, Assistant Engineer in Water Resources Department Office, Raipur, Chhattisgarh. As per his version, H.R.Kutare was the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 47 of 271 Engineer in chief and he (H.R.Kutare) vide his letter dated 29.09.2014 (D-170) Ex. P-159/PW-10 alongwith annexures forwarded certain documents to CBI.
13.3.2 He deposed that the two Orders dated 16.11.2004 (page 1 to 3 of D-171) Ex. P-160/PW-10 and order dated 26.11.2007 (page no. 4 to 7 of D-171) Ex. P- 161/PW-10 were in respect of allotment of water for integrated steel and captive power plant of SKS (A-1) at Siltara, Raipur and same were attested by him under his signature and seal of his office at point A. None of the accused persons preferred to cross-examine said witness. All the accused persons preferred not to cross-examine the witness.
13.4.1 PW-11 Sh. Ajay Kumar Shrivastava is the Executive Engineer from Water Resources Department Office, Raipur, Chhattisgarh. As per his version, during 2014, he furnished the requisite information to CBI vide his letter dated 29.09.2014 (D-168) Ex. P-162/PW-11 (page 1). The annexure to said letter Ex. P-163/PW-11 (page 2) was stated to contain the information sought by CBI. PW-11 deposed that the order dated 16.11.2004 and 26.11.2007 were certified by him under his signature. He also identified the original agreement for supply water to SKS (A-1) and exhibited them collectively Ex. P-164 /PW-11 (Colly.) (D-
169). He deposed that as per order dated 16.11.2004, the company (A-1) had started drawing water from Kharoon river in the month of January, 2008 and the agreement was signed in the year 2010, but no steps were taken drawing the water from Shivnath river till supply of the documents to the CBI.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 48 of 271 13.4.2 In his cross-examination on behalf of A-1
company, he (PW-11) deposed that he had not personally dealt with files relating to allocation of water to the company/A-1. He admitted that the letter dated 06.01.2015 Ex.P-165/PW-11 (D-173) bearing his signature at point A, was written by him to the IO Sh. M.R. Attrey and vide said letter, he had supplied the annexures bearing no. 1 to 39 Ex. P-166/PW-11 (Colly.) (D-174), to the CBI. He specifically referred to page no.5 of Ex. P-166/PW-11 (Colly.) of Proforma-I saying that it contained the details of the allocation of water made vide letter dated 16.11.2004. He also referred to page no. 6, i.e. letter dated 16.11.2004; and page 9 to 13 i.e. minutes of meeting dated 13.08.2004 of Ministry of Water Resources Department, Government of Chhattisgarh.
13.4.3 He admitted that as per the Agenda item no. 2.5 of the minutes of meeting dated 13.08.2004, allocation of water was made to SKS (A-1) and at page 14 was the letter dated 11.10.2004 issued by the Chief Engineer, Mahanadi Godavari Basin, Raipur, Chhattisgarh; at page 16 was the letter dated 03.07.2004 written by Sh. Shivraj Singh, Chief Secretary-cum-Convener, SIPB, Chhattisgarh; and at page 19 to 21 was the application dated 11.06.2004 alongwith the calculation of total water requirement of the project of the company.
13.4.4 PW-11 deposed that at page no. 22 of Ex. P-166/PW-11 (Colly.) was Proforma-II, giving details of the allocation of water vide letter dated 26.11.2007; at page no. 23 to 26 was the letter dated 26.11.2007; at page 27 was the letter dated 10.08.2007; at page 28 to 31 was the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 49 of 271 minutes of meeting dated 09.08.2007 of Ministry of Water Resources Department, Government of Chhattisgarh. He admitted that as per the Agenda item no. 2.13.5, allocation of water was made in the meeting to SKS (A-1) and at page 32 was the letter dated 27.10.2007 issued by the Executive Engineer, Water Resources Division, Raipur Chhattisgarh; at page 33-A to 38 was the application dated. 08.08.2006 alongwith the calculation of total water requirement of the project of SKS (A-1); and at page no.39 was the letter dated 06.08.2007, written by SKS (A-1) to the Principal Secretary for allocation of additional water. Further he deposed that from September, 2014 to August, 2017, he was posted in the office of Executive Engineer, Water Resources Division, Raipur.
13.4.5 He admitted that being the Department of Government of Chhattisgarh, the Water Resources Department was bound to follow directions of the State Government. He further admitted that allocation of water vide letter dated 26.11.2007 was for the proposed expansion of the captive power plant of the company situated at Siltara, Raipur. He deposed that he was unaware of any order of the Government of Chhattisgarh issued by Commerce & Industries Ministry whereby the government had imposed a ban on establishing new sponge iron plant and coal based thermal power plant at Siltara, Distt. Raipur.
13.4.6 PW-11 admitted that vide copy of letter dated 12.12.2007 (Mark P-167/PW-11) issued by the Commerce & Industry Ministry, Government of Chhattisgarh, such a ban was imposed till further orders. He denied that the company (A-1) had laid down a pipeline in the year CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 50 of 271 2005 for the purpose of drawing water from Kharoon river. He stated that he was unaware if the company could not have taken the steps for drawing additional water from Shivnath river because of the ban imposed by the State Government vide said letter dated 12.12.2007. He stated between 2014 to 2017, he had not inspected the plant of the company as they were concerned only with drawing of water. He admitted that there was no requirement of any permission of Water Resources Department, Government of Chhattisgarh to draw ground water for the purpose of sponge iron plant.
13.5.1 PW-24 is Sh. E.V. Thomas. As per his version, he was as Dy. Secretary in Ministry of Environment, Forest & Climate Change in Vigilance Division. He deposed that vide letter dated 17.03.2015 (Ex. P-271/PW-24) (D-
192), he had forwarded the documents mentioned therein including File D-193 (Ex. P-139/PW-2), D-194 (Ex. P-90 (Colly.)) and D-195 (Ex. P-91 (Colly.)) to the CBI in response to their letter dated 19.02.2015. He deposed that vide said letter, he also intimated CBI that despite the best efforts, the file no. J-11011/43/2008-IA-II (I) was not traceable.
13.5.2 He further deposed that vide letter dated 03.06.2015 (D-196), he had forwarded the copy of reply of IA Division regarding the non-traceability of the file (Ex. P- 272/PW-24 (Colly.)). He further proved his signature on the letter dated 18.03.2016 (D-197) through which he had forwarded the copy of letter dated 18.01.2016 furnished by IA-II Section and the letter dated 18.03.2016 alongwith letter dated 18.01.2016, which are available on record as CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 51 of 271 Ex. P-273/PW-24 (Colly.). He deposed that the files
mentioned above were received from the office record of the ministry and same were forwarded to the CBI. There was no cross-examination of this witness.
13.6.1. PW-30 is Sh. Ashok Kumar. In the year 2016, he was posted as Under Secretary in Vigilance Division of Ministry of Environment, Forest & Climate Change, Government of India. He proved the letter dated 18.03.2016 as Ex. P-273/PW-24 (Colly.), D-197), vide which CBI was intimated that File No. J-11013/58/2015-IA-II(M) of 36th Screening Committee was not traceable and he had also forwarded the copy of the letter dated 18.01.2016 received from the Impact Assessment Division, alongwith said letter. PW-30 was not cross-examined by any of the Defence Counsels despite opportunity.
D. Witnesses related to status of land/title deed
14. PW-9 Sh. Murari Ram Bhuvarya is Sub-
Registrar, Jagdalpur, Chhattisgarh. He deposed that during the investigation of present case, vide letter dated 27.09.2014 (D-118) Ex. P-158/PW-9, he had provided certified copies of four sale deeds Ex. P-46 (Colly.) to the CBI, executed between different parties in respect of land situated in village Pandripani, Jagdalpur wherein, the purchaser of the non-irrigated agricultural lands were Mahavir Prasad Gupta, Deepak Kumar Gupta, Anil Gupta and Deepak Gupta respectively. He deposed that Jagdalpur was 300 Km away from Raipur.
14.1.1 In his cross-examination on behalf of A-1 company, he (PW-9) deposed that there were mines of National Mineral Development Corporation (NMDC) in the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 52 of 271 area of Jagdalpur. However, he was not aware if these were iron ore mines. He admitted that Bastar Parivahan Sangh was in Jagdalpur. A-2, A-3 and A-5 adopted the cross- examination done on behalf of A-1 while A-4 preferred not to cross-examine the witness.
14.2.1 PW-12, Sh. H.G. Aggarwal is the Consultant for Steel Industries and Head of Korus Engineering Solutions Pvt. Ltd, which had the expertise in setting up of fresh steel plants or their expansion. He deposed that in the year 2006, M/s SKS Ispat Ltd. (now M/s SKS Ispat & Power Ltd.) had approached them for setting up of a rolling mill in their existing plant at Siltara, Raipur, Chhattisgarh and later on, it wanted to expand its existing plant and asked them to prepare a report i.e. Techno Economic Feasibility Report (TEFR) regarding expansion for setting up of 0.6 Million Ton steel plant and for said purpose, he alongwith his team visited the existing plant of the company and prepared the report (TEFR) and same was submitted to the company in January, 2007.
14.2.2 During examination, PW-12 was shown the copy of TEFR annexed with the application for allocation of coal block part of Ex. P-1 (colly) (D-5) and deposed that it was the same report prepared by their organisation i.e. Korus Engineering Solutions Pvt. Ltd. As per his version, Section 8, para 8.1 (page 310), of said report contained the features of the layout planning. As per said report area in which the plant was spread was 205 acres and area additionally required/ to be procured for second rolling mill and 3X350 TPD DRI plants was 100 acres. He further deposed that the difference in the figure of land which was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 53 of 271 mentioned as 205 acres at page 310 and 300 acres as mentioned at page 326 of the said TEFR was due to typing error and the figure 300 acres should be 205 acres.
14.2.3 PW-12 further deposed that vide letter dated 21.01.2015 Ex.P-168/PW-12 (D-151), they had provided the drawing of the layout plan of the proposed and existing plant Ex. P-7 (Colly.) (D-152) and annexure-II of Ex. P-7 (Colly.) was the master plant layout wherein they had incorporated 12000 sq. m. area for slag dumping. He identified his signatures and that of Sh. M.P. Bhardwaj, his (PW-12) colleague.
14.2.4 In his cross-examination on behalf of A-1 company, he admitted that installed capacity of the existing plant when they had visited the same was "Two (2) Nos. 100 TPD + Two (2) Nos. 350 TPD DRI Kilns" and these were in working condition. He further admitted that as per TEFR, the production of all the four Kilns was 97,736 MTPA. He further stated that the installed capacity of the plant for sponge iron was 2,70,000 TPA on the date of their visit.
14.2.5 He admitted that on the date of the visit for the preparation of report, there was existing 14 inch pipeline (14 inch main) with huge storage lake to hold about 2,00,000 cubic meter of water. He further admitted that the land as mentioned in their report measuring about 205 acres was within the boundary. He deposed that the officers of the company had told them that they would be acquiring 100 acres additional land for expansion.
14.2.6 He admitted that the iron ore crushing plant was an essential part of sponge iron plants and it should be preferably near the iron ore mines. He further CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 54 of 271 admitted that for a big plant like that of SKS (A-1), the railway siding, stock yard for the raw material and finished products, township, guest house and city office were essential and when they prepared the report, these facilities were not available at the site except guest house. He told that they had not visited any other site or facility of the company except the plant.
14.2.7 In his cross-examination on behalf of A-2, he denied that except visiting plant at Siltara, Raipur, they had not visited the land for ash dumping at Magadlodh, Distt. Dhamtari, railway siding at Urkura, Distt. Raipur, iron ore crushing plant at Jagdalpur, township at Baroda/Shadhu, Distt. Raipur and stock yard at Gogoan, Distt. Raipur of the company.
14.3.1 PW-13, Sh. Shailendar Dani is the Sub- Registrar from Sub-Registrar Office, Khairagadh, Chhattisgarh. As per his version, during year 2014, he was posted as Registry Clerk at Sub-Registrar Office, Raipur and Sh. R.L. Sahu was the Sub-Registrar. He deposed that vide letters Ex. P-169/B to Ex.PW-190/B, upon which he identified his signatures and that of Sh. R.L. Sahu, their office had provided various documents/ certified copies sale deeds Ex. P-26 to Ex. P-34, Ex. P-36 to Ex.P-45 and Ex. P- 68 to Ex. P-70 to CBI.
14.3.2 He deposed that the abovesaid documents were provided from the office record maintained at their office of Sub-Registrar at Raipur. None of the accused preferred to cross-examine this witness.
14.4.1 PW-34, Sh. Mahendra Agrawal deposed that during the year 2014, he was posted as Registration CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 55 of 271 Clerk in the Office of Sub-Registrar, Kurud, Chhattisgarh and Smt. Margret Toppo was posted there as Sub-Registrar. He identified his signatures on the letter dated 27.09.2014 (D-
96), vide which list of the certified documents and certified copies of registered documents Ex. P-314/PW-34 (Colly.) were provided to CBI. He further deposed that certified copies of the registered documents Ex. P-35 (Colly.) (D-97) were certified by him and bearing his signature and seal of the office on each page. The certified copies were provided from the office records maintained in their office in the due course of business. Ld. Defence Counsels chose not to cross-examine this witness.
14.5.1 PW-37 is Sh. Rajeev Kumar Agrawal. He deposed that in the year 2015, he was posted as Relationship Manager, in Commercial Branch of State Bank of India at Raipur, Chhattisgarh and Mr. Bhaskar Bandopadhyaya was posted as Deputy General Manager and Branch Head. He deposed that in response to the letter received from the CBI, he had submitted 113 title deeds (in original) at Lodhi Road office of CBI in case of RC 17 E 2014. He further deposed that the letter dated 27.02.2015 (D-
126) and its 5 page Annexures Ex. P-316/PW-37 (Colly.) contained the details of the title deeds pertaining to SKS (A-
1), all bearing his signatures and the letter dated 27.02.2015 (D-126) was bearing signature of Sh. Bhaskar Bandopadhyaya also.
14.5.2 He further deposed that the copies of the documents i.e. Sale Deeds Ex. P-52 (Colly.) to Ex. P-57 (Colly.), D-127 to D-132 were the same photocopies of the original Sale Deeds, which were submitted by him vide letter CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 56 of 271 Ex. P-316/PW-37 (Colly.). The said Sale Deeds were kept as securities with their bank against the loan granted by the bank for their (A-1) steel plant. PW-37 was not cross- examination by any of the accused persons.
E. Witnesses related to calculation of networth 15.1.1 PW-3 Sh. Virendra Kumar Jain, is a Charted Accountant. As per his deposition during the year 2014-15, he was working in Power Finance Corporation and was deputed as DGM, PFC Consulting Ltd., which was a wholly owned subsidiary of PFC. Initially, he was deputed in Core Division of UMPP (Ultra Mega Power Project) to carry out the work relating to award of UMPP based on standard bidding process. Being DGM, he was also looking after the work of Finance Executive in the company.
15.1.2 He further deposed that he alongwith Sh.Manish Kumar Agrawal, Company Secretary and Sh. Kamlesh Menon were deputed in CBI by PFC to carry out the calculation of financial figures of various applicants companies and they calculated the turn over, profit and net worth of the companies on the basis of standard bidding documents for tariff based bidding process for procurement of power on long term basis notified by Ministry of Power, Government of India and also analysed the annual report of the companies provided by CBI.
15.1.3 PW-3 proved his report dated 08.01.2015 Ex. P-144/PW-3 (D-166) in respect of SKS (A-1), in which at portion X he had mentioned the formula for calculation of net worth of the company. He identified his signatures and that of Sh. Manish Kumar Agrawal on said report. He further deposed that they had analysed the annual reports for the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 57 of 271 years 2004 to 2008 (which are part of D-162 and D-164) for deriving the calculations mentioned in his report Ex. P- 144/PW-3. As per said report Ex. P-144/PW-3, the networth of SKS (A-1) for the year ending on 31.03.2006, 31.02.2007 and 31.03.2008 were found to be Rs. 146.084 crores, Rs. 191.349 crores and Rs. 317.184 crores respectively. As per the feedback form Ex. P-2 (Colly.) (D-29), the networth of SKS (A-1) for the year ending on 31.03.2006, 31.03.2007 and 31.03.2008 were Rs. 352.89 Crores; Rs. 468.60 Crores and Rs. 524.53 Crores respectively.
15.1.4 During his examination-in-chief, PW-3 further deposed that after going through the Annual Reports of the years 2005-06 [already Ex. P-81/3 (Colly.), part of D- 162], 2006-07 [already Ex. P-81/4 (Colly.), part of D-162] and 2007-08 [already Ex. P-83 (Colly.), D-164], the values of networth mentioned in the feedback form were derived by the company by adding the share application money, preference share capital and deferred tax liability etc. which was not in accordance with the formula prescribed for calculation of networth for UMPP.
15.1.5 In his cross-examination, PW-3 deposed that UMPP projects were envisaged for establishment of 4000 NV power projects on tariff based bidding process. He admitted the suggestion that the application of the company (A-1) Ex. P-1 (colly) was for allocation for coal block for use in sponge iron plant of the company and it was not for UMPP project. In response to the question that no formula for calculating networth was mentioned in the notification of Ministry of Power bearing no. 23/11/2000-R&R (Vol.II) containing the guidelines for Determination of Tariff by CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 58 of 271 Bidding Process for Procurement of Power Distribution Licences of, he deposed that as per said notification, the financial requirement, which were to be met by the bidder, were to include minimum networth as per the document to be provided by the procurer in RFQ under bidding process.
15.1.6 He further deposed that the standard bidding document for UMPP containing the formula for calculating the networth was available with them. He denied the suggestion that said formula was not in existence in the year 2007 or that it was introduced only in the year 2010 or for that reason it was not in their possession nor it was given to the IO or filed in the court. He deposed that he could not say whether said formula was only meant for UMPP projects. He volunteered that in PFC, it was used for UMPP projects. He feigned ignorance about any office order/memo/directions for adopting UMPP formula for non- UMPP projects. As per his version, he was also unaware about any such office order/memorandum/direction issued by MoP for calculating networth of the projects other than power projects during the year 2007. He admitted that all the figures used to calculate the networth of the company (A-1) were available in the annual reports for the year 2004-2008. He deposed that he could not comment, if there were more than one method of calculating networth as per the relevant accounting practice.
15.1.7 He admitted that office memorandum dated 30.11.2010 Ex. P-146/PW-3, issued by Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises, Government of India, a method had been provided to calculate networth of a company as per CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 59 of 271 annexure 1 titled as 'Definition of Financial Parameters'. He expressed his lack of knowledge about the fact that as on 08.01.2015, which was the date of calculation of networth in his report, there were atleast two methods of calculating the networth as per two different ministries of Government of India. He admitted that the share application money to the extent non-refundable shall be shown under the head of Equity in Annual Report/balancesheet.
15.1.8 He deposed that it was not entirely correct to say that share application money to the extent refundable shall be separately shown under the head of 'Other Current Liability', in the annual report/balancesheet. He volunteered that if on the date of balancesheet, status of share application money was not known then it was generally shown under the head 'Equity' under the head 'Share Application Money' and in case the status was known, then it could be shown under the head 'Other Current Liabilities' subject to the condition that the share application money was refundable.
15.1.9 In his cross-examination on behalf of A-1 company, he told that as per the Director's Report in the annual report for the year 2004-05 [Ex. P-81/2 (Colly.)] of SKS (A-1). it was mentioned that "the promoters brought in their contribution fully, a part of which was converted into equity with allotment of equity at premium and balance was retained as the share application money account, against which equity shares would be allotted at an appropriate time during the current financial year". He admitted that in the Notes to Accounts forming part of annual report in para 7, company had disclosed the parties in respect of which, the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 60 of 271 company (A-1) was a joint venture or associate. He further admitted that as per the Director's Report in the annual report for the year 2006-07 [Ex. P-81/4 (Colly.)] of SKS (A-
1), on Page 8 in the portion marked X to X, the details about share allotment were mentioned.
15.1.10 He denied the suggestion that as per annual reports, the amount received towards the share application money in the years 2004-05, 2005-06, 2006-07 and 2007-08 was non-refundable towards the issuance of shares as a contribution for funding the integrated steel plant. He further denied the suggestion that the share application money is not a debt of a company and therefore should be included in the calculation of networth. He admitted that as per the annual reports, the entire share application money was adjusted towards issue of shares to the applicants in the years 2007-08 and 2008-09 and that the issuance of shares during the year 2008-09 was correct. He admitted that a liability depending upon a contingency was not a debt in presenti or in future till the contingency had happened.
15.1.11 In response to the question that SKS (A-1) has correctly included the share application money while calculating its networth, he replied that as per their networth formula, share application money could not be included in networth. Upon being asked as to whether he had verified the networth of the group/associate companies of SKS (A-1) while calculating the networth, he replied that as per UMPP formula, networth of sole company was only to be considered.
15.1.12 He denied the suggestion that the formula CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 61 of 271 adopted by him was not applicable for non UMPP projects or that his report (Ex. P-144/PW-3) was false or that the same was prepared at the instance of CBI. He however, admitted that the difference in the networth calculated by him and that stated by the company was only on account of the difference in the calculation methods.
15.2.1 PW-5, Dr. Raj Singh, is the Regional Director of Southern Region in the Ministry of Corporate Affairs at Chennai. He deposed that formula used for calculating networth was equity share capital + free reserves - misc. expenditure to the extent of not written off. After going through the Annual Report for the year 2005-06 (part of D-162) Ex. P-81/3 of the company (A-1)), he deposed that the networth of the said company as per said Annual Report was 146 Crore which was calculated as Equity share capital (15 Crore) + Reserve and surplus (131 Crore) rounded off) - Misc. Expenditure to the extent not written off (0.14 Crore), which came out to be Rs. 146 Crore (rounded off). The abovesaid formula might have been applied for calculation of networth in other Annual Reports/Balance Sheets of the company.
15.2.2. In cross-examination on behalf of A-1 company in response to the question that whether there was any provision under which a company registered with the RoC concerned is required to file Annual Report with regard to its networth in the concerned RoC Office, he deposed that all companies registered with the Office of RoC were required to file a financial statement in the form of balance sheet annually with the RoC and also required to file an annual return containing particulars of share holding and CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 62 of 271 directorship of the company. 15.2.3 PW-5 admitted that as on the date
16.12.2014, when he had calculated the networth, there were atleast two methods/formulas for calculating networth i.e. one used by him and another as given in Ex. P-146/PW- 3, which was notified by Ministry of Heavy Industries & Public Enterprise, Government of India. He volunteered that share application money pending allotment was not included in the networth because that was merely an application money and unless it was accepted and acted upon, it had no relevance because, the application money would become share application money only after allotment and for this reason he did not include the share application money in the networth of the company (A-1). He denied the suggestion that he had calculated networth of the company wrongly by applying wrong formula.
F. Witnesses from PMO
16. PW-26 is Sh. Santosh D. Vaidya. As per his version, in the month of April 2015, he was posted as Director in PMO, New Delhi. He deposed that vide letter dated 16.04.2015 (Ex. P-284/PW-26), (D-223), he forwarded original file NO. 200/31/C/11/2008-ES-I (D-
224) alongwith one notesheet (Ex. P-285/PW-26 (Colly.), (D-224) to CBI.
16.1.1 In his cross-examination on behalf of A-1 company, he admitted that he had personally not dealt with the file Ex. P-285/PW-26 (Colly.). Rest of the accused persons adopted the cross-examination conducted by A-1.
16.2.1 PW-28 is Ms. Vini Mahajan. She deposed that from the year 2006 till 2008, she was posted CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 63 of 271 in PMO initially as Director and subsequently, as Joint Secretary and during her posting in PMO, she was looking after the work of Ministry of Coal besides the other work. She deposed that Dr. Manmohan Singh was the Prime Minister during that period and he was also holding the charge of Ministry of Coal and Sh. T.K.A. Nair was the Principal Secretary to Prime Minister during that period. She deposed that Sh. Ashish Gupta was the Director concerned in PMO dealing with coal ministry matters. She further deposed that she was well acquainted with their handwriting and signatures as she was posted in PMO alongwith them. She further deposed that during that period, Secretary Coal was Sh. H. C. Gupta.
16.2.2 She proved copy of PMO File no.
200/31/C/83/06 ES-1 as P-306/PW-28 (Colly.) and referred to notesheet at page no. 52/n to 58/n where a note was put up regarding allocation of coal blocks for specified end use other than power and in para 9 of the said Note, it was mentioned that SKS (A-1) had represented that the existing capacity (0.8 MTPA) as indicated in the application form of M/s Prakash Industries Ltd. was not correct as the actual capacity for sponge iron was only 0.3 MTPA at that time and the matter was referred to the Ministry of Steel for verification and report. Thereafter, vide Note dated 16.07.2008 in Para 16, she recommended for approval of allocation of coal blocks to the allocates recommended by the screening committee as indicated in the table in Para 6 except Urtan, Beharaband North Ext. and Vijay Central Coal Blocks. The Note was approved by Prime Minister Dr. Manmohan Singh vide his signature dated 17.07.2008. The Notesheet at pages 52 to 59 are separately marked as Ex.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 64 of 271 P-307/PW-28 (Colly.). 16.2.3 PW-28 also proved another Note at page
60/n to 63/n in File Ex. P-306/PW-28 (Colly.)) and deposed that in Para 11 of the said Note, it was recommended that the matter about the allocation of Vijay Central and Urtan coal blocks might be referred back to Ministry of Coal for further examination in the light of the orders of the Hon'ble High Court. The said Note was approved by Prime Minister Dr. Manmohan Singh vide his signature dated 20.09.2008. The Notesheet (page 60/n to 63/n) are Ex. P-308/PW-28 (Colly.).
16.2.4 During her examination-in-chief, PW-28 further referred to File Ex. P-285/PW-26 (Colly.) (D-224) (at page 1/n) and deposed that at page 1/c, there was a letter dated 05.02.2008 of Sh. Subodh Kant Sahai (Ex. P-309/PW-
28) wherein, there were endorsements at portion A on the said letter and in the said endorsement, it was mentioned by Sh. B.V.R. Subramanium, PS to Prime Minister "given to PM" and marked to her and she recorded "coal secretary for a/a" i.e. action as appropriate and marked to Sh. Ashish Gupta.
16.2.5 In her cross-examination on behalf of A-1 company, she stated that letters similar to Ex. P-309/PW-28 used to be received occasionally in PMO in connection with coal block allocation matters. She further deposed that one such letter at page 48 in File (Ex. P-306/PW-28 (Colly.)) is a letter dated 20.09.2007 by Sh. Sushil Kumar Shinde, the then Minister of Power. She stated that she had dealt with this letter and recorded as follows "Coal Secretary for urgent comments on relevant file" and marked it to Sh. Ashish CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 65 of 271 Gupta on 21.09.2007. 16.2.6 PW-28 further deposed that another such
letter was at page 63 in File Ex. P-306/PW-28 (Colly.) which was a letter dated 14.02.2008 by Sh. Sharad Pawar, the then Minister of Agriculture & Consumer Affairs. She deposed that one more such letter was at Page 74 in File Ex. P-306/PW-28 (Colly.) which was a letter dated 27.08.2008 by Sh. Vilas Muttemwar, the then Minister of State (New & Renewable Energy). PW-28 stated that during her tenure in PMO, no complaint was received from any person that any Screening Committee had taken decision for recommending allocation of coal blocks under any influence. Other accused persons adopted the cross-examination done on behalf of A- 1 and A-5.
16.3.1 PW-38 is Sh. Sanjay Lohiya. As per his version, in the year 2012, he was posted as Director in Prime Minister Office and during that period, he had handed over certain documents to the CBI. He proved on record the copy of the letter dated 17.08.2012 (D-40) as Ex. P- 317/PW-38, vide which, photocopy of PMO File No. 200/31/C/83/2006 ES1, was forwarded to Sh. Ravi Kant, HOB, CBI, EOI, New Delhi. He further deposed that the original File was already forwarded by him to Sh. O.P. Galhotra vide his letter dated 07.06.2013 which is Ex. P- 318/PW-38 (OSR). The copy of File is already Ex. P-306/PW- 28 (Colly.) (D-41). PW-38 was not cross-examined by any of the accused persons.
G. Witnesses from Ministry of Coal
17. PW-17 is Sh. V.S. Rana, is one of the most material witnesses of prosecution as he was posted as CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 66 of 271 Under Secretary in Ministry of Coal during relevant time. As per his version, from September 2005 till August 2007, he was having main charge of Vigilance Section in Ministry of Coal but additional charge of CA-1 Section was also given to him during that CA-1 Section, Ministry of Coal was dealing with matters of allocation of captive coal blocks to private parties. He deposed in detail about the process of allocation of the coal blocks in general and of Vijay Coal Block in particular.
17.1.1 In his examination-in-chief, he (PW-17) deposed that in November, 2006, Ministry of Coal issued an advertisement inviting applications for allocation of 38 coal blocks for captive use. Thereafter, upon receipt of applications, they were segregated block-wise, state-wise, end use-wise and they were sent to concerned state governments, administrative ministries and CMPDIL for their comments/views.
17.1.2 After receipt of comments/views, file was moved for fixing date for holding Screening Committee meeting. After the date were fixed, the intimation was sent to the applicant companies to make their presentation before the Screening Committee on the given date. Thereafter, recommendations for allocation of various coal blocks to different applicant companies for their captive use, were made by Screening Committee and said recommendations were processed in Ministry of Coal and were sent to competent authorities for obtaining the final approval. After final approval was accorded by the competent authorities, the allocation letters/option letters were issued.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 67 of 271 17.1.3 As per the version of PW17, during the
period 2006-2008, Sh. Shibu Soren was initially the Minister of Coal but thereafter, Prime Minister Dr. Manmohan Singh himself was holding the charge of Minister of Coal and during this period Sh. H.C. Gupta was Secy. (Coal) and Sh. K.S. Kropha was Jt. Secy. (Coal). Sh. Sanjiv Mittal was Director, CA-1, probably till March/April 2006 and thereafter, for some period the charge of Director, CA-1 remained as additional charge with some Mr. Aggarwal. Thereafter, Sh. K.C. Samria took over as Director, CA-1. Sh. Samria was initially Deputy Secretary, Ministry of Coal and subsequently, he was promoted as Director.
17.1.4 PW-17 claimed that he was well acquainted with the handwriting and signatures of Sh. H.C. Gupta, Sh. K.S. Kropha, Sh. K.C. Samria, Sh. Sanjiv Mittal, Dr. Manmohan Singh and Sh. Shibu Soren as while working in Ministry of Coal, he had seen them writing and signing or had seen documents carrying their signatures and handwriting and thus he could identify the same, if shown to him. PW-17 further deposed that during the period 2006-08, Sh. Prem Raj Kuar followed by Sh. R.N. Singh and thereafter, Sh. L.S. Janoti were the Section Officer, CA-1 Section. Sh. R.S. Negi was the dealing Assistant with respect to the matters related to captive coal blocks allocation to private companies and he was well acquainted with their handwriting and signatures as well for the same reasons.
17.1.5 PW-17 explained that the applications for seeking allocation of captive coal blocks were required to be submitted in five sets. He told that in the advertisement, all CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 68 of 271 the detailed guidelines specifying as to where to apply, how to apply etc. were duly mentioned. PW-17 deposed that he had dealt with the documents D-34 Ex.P-201/PW-17 (colly) and D-35 Ex. P-202/PW-17 (colly) i.e. copies of the files of Ministry of Coal pertaining to issuance of advertisement in November 2006.
17.1.6 PW-17 identified his signatures on File (D-34) Ex.P-201/PW-17(colly.) containing various notesheets i.e. the note sheet pages from 1-49 (Ex. P- 203/PW-17 (colly.) and the correspondence side pages from pg. 1-233 Ex. P-204/PW-17(colly.). PW-17 also identified the advertisement and detailed guidelines at Pg. 73-94 in file Ex. P-201/PW-17 (colly.) and same were exhibited as Ex.P-205/PW-17 (colly). As per said advertisement, the applications were to be submitted in the Coal India Limited office, Scope Minar, Laxmi Nagar, Delhi and the last date for submission of the application was 12.01.2007. He stated that that the other details such as application format, documents to be enclosed, details regarding the coal blocks on offer and guidelines etc. were stated to be available on Ministry of Coal website i.e. www.coal.nic.in. The advertisement was issued in the newspaper under the signatures of Sh. K.S. Kropha, Joint Secretary, Ministry of Coal.
17.1.7 The witness PW17 deposed that the advertisement along with detailed guidelines available at pages 73-94 in File Ex. P-201/PW-17 (Colly.) separately exhibited as Ex. P-205/PW-17 (Colly.), was forwarded by him to the Director, DAVP for getting it published in prominent dailies vide letter dated 06.11.2006, the office CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 69 of 271 copy of which (page 69) is Ex. P-206/PW-17. Through another letter dated 06.11.2006 (page 70) of the correspondence side (Ex. P-204/PW-17 {Colly.}), Sh. Krishna Kumar, CGM, Coal India Limited was requested to ensure the early publication of the advertisement through DAVP for wide publicity. The office copy of this letter is Ex. P-207/PW-17.
17.1.8 He deposed that the advertisement along with guidelines was also sent by him on 06.11.2006 to Sh. Piyush Goel (Technical Director) NIC, Ministry of Coal for their uploading on the Ministry of Coal website. The office copy of this letter (page 71) is Ex. P-208/PW-17. PW17 further deposed that applications for allocation of coal blocks for the non-power sector were considered in the 36th Screening Committee meetings, chaired by Secretary (Coal), and Joint Secretary (Coal) acting as Member Convener of the Screening Committee.
17.1.9 During his examination-in-chief, PW-17 deposes further that the note dated 04.11.2006 on note sheet page 4 of Ex. P-203/PW-17 was initiated by Sh. R.N. Singh, Section Officer at point A and the hand written note by Sh. K.S. Kropha, JS, Ministry of Coal at point B. The approval of the advertisement was granted by Secretary (Coal) Sh. H.C. Gupta on notesheet page 5 of Ex. P- 203/PW-17 (Colly.). In the meeting held on 14.09.2006, it was decided that out of 81 coal block, Secretary (Coal) would identify in consultation with Secretary (Power) the coal blocks to be earmarked qua Power Sector. This witness proved the ID Note dated 25.07.2006 from PMO {pages 38- 40 on correspondence side Ex. P-204/PW-17 (Colly.)} in File CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 70 of 271 Ex. P-201/PW-17 (Colly.) containing the summary of the 7th Energy Coordination Meeting held on 19.07.2006 received in Ministry of Coal and exhibited it as Ex. P-209/PW-17.
17.1.10 PW-17 deposed that the draft advertisement was available at pages 1-29 of the correspondence side (Ex. P-204/PW-17 (Colly.) in File Ex. P- 201/PW-17 (Colly.), and corrections/additions on pages 2, 7, and 14 were made in hand by Sh. K.S. Kropha. As per the guidelines issued by Ministry of Coal under the title "How to apply, the details of documents which were required to be annexed with the application were given and it was specifically mentioned that applications not accompanied with the requisite documents would be treated as incomplete and rejected. As per the advertisement, preference was stated to be accorded to the Power Sector and the Steel Sector and within the Power Sector, the priority was to be given to projects having capacity of more than 500 MW. Similarly, in the Steel Sector, priority was to be given to steel plants with more than one million tonnes per annum (1 MTPA). The said provisions regarding preference were also mentioned in the detailed guidelines uploaded on the website of the Ministry of Coal.
17.1.11 He further deposed that in the guidelines factors for deciding inter se priority amongst the competing applicants, which were required to be considered for allocation of captive block were duly mentioned. Since said factors already find mention in para no. 2.1 of this judgment hence, the part of PW-17 deposition noting down said factors has been skipped for brevity sake.
17.1.12 PW-17 deposed further that the register CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 71 of 271 (D-3) Ex. P-210/PW-17 contained the entries of applications submitted by applicant companies for allocation of coal blocks and the entries at Serial Nos. 331 and 332 (at page
39) in said register were related to the two applications of SKS (A-1) for allocation of Kesla North and Vijay Central Coal Blocks, which he (PW17) had dealt with in Ministry of Coal. PW-17 identified the application of SKS (A-1) (Ex. P-1 Colly., D-5) as the same application entered at Serial No. 332 of said register.
17.1.13 PW-17 testified that as per guidelines, applications were required to be scrutinized for eligibility and completeness before being sent to Administrative Ministries and State Governments. However, no such scrutiny was carried out due to the large number of applications and shortage of competent staff. As directed by senior officers, one set of each application was sent to the concerned Ministries and State Governments after approval on file.
17.1.14 PW-17 deposed that a letter dated 19/28.02.2007 addressed to the Chief Secretary, Government of Chhattisgarh alongwith its annexures (Ex. P- 212/PW-17 (Colly.)) was sent under his signatures at point A. Similarly, vide another letter dated 19/28.02.2007 (Ex. P- 213/PW-17) {page 199/C in D-34, Ex. P-204/PW-17 (Colly.)}, one set of the application was sent to CMPDIL. He also referred to letters dated 19.02.2007 and 18.03.2007 alongwith annexures Ex. P-214/PW-17 (Colly) at page 169 in D-35, Ex. P-202/PW-17 (Colly.), and deposed that one set of the applications was sent to the Ministry of Steel.
17.1.15 PW-17 deposed that alongwith all the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 72 of 271 aforesaid letters, list of applicant companies whose applications were sent to concerned Administrative
Ministries or State Governments was also enclosed and accordingly, application of SKS (A-1) as received for Vijay Central coal block was also sent to the concerned State Government i.e. Government of Chhattisgarh, Ministry of Steel and CMPDIL. It was stated by PW17 that recommendations/comments from the Government of Chhattisgarh were received vide letter dated 04.07.2008 Ex. P-215/PW-17 and said letter was placed at page 377-379 of the File D-27, bearing signature of Sh. K.S. Kropha at point A and that of Sh. K.C. Samria at point B. He deposed that he had dealt with the File Ex. P-216/PW-17 (Colly.), (D-27) as it was maintained in their ministry.
17.1.16 The views/comments/recommendations from the Ministry of Steel were received through office memorandum dated 06.12.2007 {Ex. P-192/PW-16 (Colly.), page No. 830-855 (D-27)} under the signatures of Sh. N.R. Dash, Director, Ministry of Steel, vide Annexure-I and Annexure-II, as deposed by PW17. He deposed that an office memorandum dated 14.12.2007 Ex. P-193/PW-16 (Colly.), issued under the signatures of Sh. N.R. Dash, Director, Ministry of Steel, along with the Annexure containing guidelines for consideration of allotment of coal block, was received for internal use. The OM is available on pages 288-290/224-225 in file D-23 {Ex. P-217/PW-17 (Colly.)}. As per the version of PW17, in the annexures (page 853 in Ex. P-192/PW-16 (Colly.), the name of SKS (A-
1) was mentioned at Serial No. 107 and said company was placed in Category V(b).
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 73 of 271 17.1.17 In his examination-in-chief, PW-17 deposed further that the 36th Screening Committee
meetings were held on 07.08.2007 and 07.08.2008, in addition to the final meeting held on 03.07.2008. The dates of the Screening Committee meeting were finalized with the approval of Secretary Coal. Notice to various applicant companies and to members of Screening Committee were not only separately issued but information in this regard was also uploaded on the website of Ministry of Coal.
17.1.18 PW-17 deposed that a feedback form was also uploaded on the website of Ministry of Coal and all the applicant companies were directed to submit said feedback form duly filled up at the time of presentation, along with 25 copies of the same. He deposed that as a considerable time had elapsed since the applications were received, therefore, the information was sought through said feedback form for knowing the latest status/stage of preparedness of the company regarding their end use projects. PW-17 referred to the feedback format at pages 104-105 and 111-112 of file D-23 Ex. P-217/PW-17, (Colly.) and copy of the format of feedback form was exhibited as Ex. P-218/PW-17. The schedule for presentation was available at pages 106-113 of D-23, and a copy was exhibited as Ex. P-219/PW-17.
17.1.19 PW-17 also referred to various office memorandum Ex. P-220/PW-17 to Ex. P-226/PW-17 in connection to various steps taken in Ministry of Coal for processing and uploading relevant information on Ministry of Coal website. He also referred to already exhibited attendance sheet of various meetings of Screening Committee held on 07.12.2007, 08.12.2007, 08.07.2008 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 74 of 271 and 03.07.2008 available on record as Ex. P-194/PW-16 to Ex. P-198/PW-16 respectively.
17.1.20 PW-17 identified the recommendation sheets dated 03.07.2008 Ex. P-227/PW-17 (Colly.) (Pages 714-720/369-375, D-27) and stated that these were filled by Sh. K.C. Samria and signed by various members and as per said document, Vijay Central Coal Block was recommended for allocation to M/s Prakash Industries Ltd. and SKS (A-1). PW-17 deposed that minutes of the meetings were prepared in Ministry of Coal under directions of Sh. K.S. Kropha and Sh. K.C. Samria, Director CA-I and the said notes were put up for approval beside proposal for allocation of coal block to be sought from Minister, Incharge.
17.1.21 He deposed that as per directions of Sh. K.S. Kropha and Sh. K.C. Samria, a detailed note dated 10.07.2008 {Ex. P-228/PW-17 (Colly.), Pages 36-43, D-24} was prepared in the Section and same was forwarded by PW17 to Sh. K.C. Samria who forwarded the same to Secretary (Coal) and the file is Ex. P-229/PW-17 (Colly.). Thereafter, the note dated 14.07.2008 signed by Sh. H.C. Gupta at point A, was marked to Minister of State (Coal) and said note is exhibited as Ex. P-230/PW-17. He also identified the minutes of the 36th Screening Committee Ex. P-231/PW-17 (Colly.), at Pages 872-928 of D-24. PW-17 deposed that approval from PMO vide Office Memorandum dated 21.07.2008 signed by Sh. Ashish Gupta, Director, PMO was received and same is available at page 752 in D-
27. PW17 proved said note as Ex. P-232/PW-17 by identifying his signature and that of other signature. In para 2(b) of the said ID note , it was mentioned that CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 75 of 271 Ministry of Coal in consultation with Ministry of Steel might re-examine the issues regarding some of the proposed allocatees of the Urtan, Behraband North Extension and Vijay Central Coal Blocks.
17.1.22 PW-17 deposed that in the application for the Vijay Central Coal Block filed by SKS (A-1) Ex. P-1 (Colly.) filed by Sh. Amrit Singh, Manager, the company's turnover was mentioned as Rs. 109 Crores (2003-04), Rs. 116.68 Crores (2004-05), Rs. 278.74 Crores (2005-06), and Rs. 535.81 Crores up to 31.12.2006 and the net worth was shown as Rs. 198.88 Crores (2005-06) and Rs. 252.99 Crores up to 31.12.2006. He further deposed that existing sponge iron capacity of 2.7 LTPA and proposed capacity of 3.3 LTPA were mentioned. Further that, 300 acres of land was shown to have been partly acquired and acquisition of 500 acres had been applied for as per said application. It was also stated that almost all clearances had been obtained i.e. from CSEB, Pollution Control, Environment, Water availability, and Railway Siding authorities.
17.1.23 He further deposed that the feedback form Ex. P-2 (Colly.), was submitted by authorised signatory of SKS (A-1) during the Screening Committee meeting. Wherein, networth figures of Rs. 352.89 Crores as on 31.03.2006, Rs. 468.60 Crores as on 31.03.2007 and Rs. 524.53 Crores as on 31.12.2007, were mentioned in the column of networth of the company. It was stated that 500 acres of land had already been acquired against the total requirement of 500 acres. He further deposed that environmental clearance for Phases I & II and partly for Phase III was stated to have been cleared and TOR for the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 76 of 271 balance had been submitted. 17.1.24 As per the version of PW-17, after receipt
of PMO ID Note dated 21.07.2008 (Ex P-232/PW17), a note dated 26.07.2008 was initiated by Sh. Sewak Paul (page no. 46-48/n of File Ex. P-229/PW-17 (Colly.) (D-24)), proposing re-examination of allocation issues of Urtan, Behraband North Extension, and Vijay Central Coal Blocks. PW17 forwarded the said note to Sh. K.C. Samria. The said note was approved by Secretary Sh. H.C. Gupta on 28.07.2008 vide his signature at point D and thereafter, the matter relating to Vijay Central was processed in separate files.
17.1.25 PW-17 proved the Minutes of the meeting held on 25.07.2008 to revisit the issues regarding allocation of Urtan, Behraband North Extension, and Vijay Central Coal Blocks as Ex. P-233/PW-17 and issues concerning Vijay Central were mentioned in Paras 6-8 of the said minutes. After said meeting a note dated 04.08.2008 at page 4/n of File D-24 was prepared wherein, it was proposed that the matter about allocation of Vijay Central Coal Block might be referred back to the Screening Committee and that approval of the Prime Minister as Minister of Coal be obtained. The proposal was further approved by Sh. H.C. Gupta on 20.08.2008, and he further forwarded the said note to Minister of State (Coal) and the approval of the Prime Minister was later communicated.
17.1.26 PW-17, also referred to various development which took place in Ministry of Coal and PMO pursuant to filing of Writ petition by M/s Prakash Industries before Hon'ble High court. He also referred to various communications which took place between Ministry of Coal CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 77 of 271 and Ministry of Steel and between Ministry of Coal and PMO during the period w.e.f 03.09.2008 when Hon'ble high court passed an interim order of status quo vide Ex. P-235/PW-17 till the Hon'ble Delhi High Court passed the order dated 02.07.2010 Ex. PW 239/PW 17(D-9) (page 318-320) wherein, it was clarified that interim order dated 03.09.2008, could not affect the allocation made to respondent no.4 (SKS (A-1)) and in that reference, a note dated 21.12.2010 was put up by Sh. Sewak Paul {page 19- 24 in the File Ex. P-238/PW-17 (Colly.)} and it was marked to Director Sh. K.C. Samria. The Notesheet page 19-28 was marked as Ex. P-246/PW-17 (Colly.).
17.1.27 PW-17 further proved the note dated 07.10.2011 (pages 46/n to 51/n) as Ex. P-259/PW-17 (Colly.) and deposed that vide note sheet at pg 46/n to 50/n, it was proposed that the allocation of Vijay Central Coal Block to SKS (A-1) shall be made as per the recommendations of screening committee meeting held on 03.07.2008 for share of 16.08 MT Geological Coal Reserves from the said recommended block as an associate and the remaining coal reserve in the Vijay Central Coal Block may be allocated to Coal India Ltd. as the leader for development of said block. The said note was forwarded by Secretary (Coal) vide his signature dated 10.10.2011 at point B to Minister (Coal) and Minister of Coal Sh. Sriprakash Jaiswal approved the said proposal vide his signature dated 11.10.2011 at Notesheet page 51/n.
17.1.28 He further deposed that vide note at page 55/n to 57/n, it was proposed that a draft allocation letter for Vijay Central coal Block to M/s Coal India Ltd. as the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 78 of 271 leader and SKS (A-1) as the associate under option-III may be approved. The said note was marked by Secretary (Coal) vide his signature at point D. The Minister of Coal Sh. Sriprakash Jaiswal approved the said note vide his signature dated 28.10.2011 at point E. 17.1.29 Accordingly, an allocation letter was issued to SKS (A-1) and M/s Coal India Ltd. The said allocation letter dated 01.11.2011 at page 1192 to 1195 in Ex. P- 238/PW-17 (Colly.) was stated to bear the signature of Sh. P.S.S. Reddy at point A and it was proved as Ex. P-262/PW-
17. It is stated that in the said allocation letter, EUP capacity of SKS (A-1) was calculated as 0.585 MTPA and share of the coal was allocated to the extent 16.08 MT calculating the requirement of coal to the extent of 0.536 MTPA.
17.1.30 He identified the File No. 38039/8/2008- CA-I (Ex. P-263/PW-17 (Colly.), being maintained in their office and deposed that it was dealt with by him (PW17). He further deposed that in the said file, PMO reference received from Sh. Subodh Kant Sahai, Minister of State for Food Processing Industries was dealt and at page 1, there was a notesheet dated 27.03.2008 vide which draft reply to the PMO was put up for approval on the PMO ID No. 200/31/C/11/2008 ESI dated 06.02.2008. The note alongwith the PMO ID and its annexures has been proved as Ex. P-264/PW-17 (Colly.). PW-17 further deposed that OM dated 31.03.2008 was sent to PMO in reply to PMO ID dated 06.02.2008 & 25.03.2008 and proved it as Ex. P-265/PW-
17. It was further deposed that letter dated 11.12.2007 Ex. P-154/PW-7 was received from Sh. Sudhir K. Sahay (A-5), Director, SKS (A-1) and said letter alongwith the enclosures CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 79 of 271 was marked to Sh. R.N.Singh. He deposed that said letter was not dealt with in this file.
17.1.31 In his cross-examination by Ld. Counsel for A-1 company, he admitted that the applications for allocation of coal blocks were forwarded to the States where coal blocks were situated and where the EUP was existing or proposed to be set up by the applicant. He stated that almost same procedure was followed for the applications considered by the 34th Screening Committee. He stated that the minutes of the 36th Screening Committee meetings held on 07&08.12.2007, 07&08.02.2008 and 03.07.2008 (already Ex. P-231/PW-17 (Colly.), D-24) were prepared and put up by the CA-I Section based on the inputs available in CA-I Section and inputs received from the senior officers of Ministry of Coal. He further stated that the CA-I Section had available inputs on the basis of information mentioned in the applications given by the applicant companies.
17.1.32 PW-17 further stated that the senior officers used to add their inputs in the rough draft prepared by the Section and thereafter, final draft used to be prepared and processed. However, the said minutes were not circulated in this case as recommendations had already been accepted by the members of the screening committee during the final meeting of 36th screening committee. He deposed further that as per his memory, no dissent or protest was received from any members of the screening committee in the File Ex. P-229/PW-17 (Colly.).
17.1.33 In response to the question that if the decision in the screening committee was taken with consensus of all the members, he replied that there used to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 80 of 271 be discussions in the meetings but how decision was taken i.e. with consensus or not was not within his knowledge.
17.1.34 He deposed that no such minimum requirement of networth of an applicant company seeking allocation of coal block to be eligible for allocation, was specified by Ministry of Coal in the advertisement or guidelines Ex. P-205/PW-17 (Colly.) (D-34) nor any such requirement of maximum worth was specified by screening committee for evaluating inter se priority between the applicant companies. In response to the question as to whether Ministry of Coal or Screening Committee had prescribed any specific method for calculating the networth of an applicant companies, he replied that no such method was specified in the files of Ministry of Coal or Screening Committee. In response to the question if Ministry of Coal or the Screening Committee had got the networth of the applicant companies verified at its own end, he replied that as per his knowledge, no such instructions were issued in Ministry of Coal or the Screening Committee.
17.1.35 In response to the question as to whether the advertisement or the guidelines Ex. P-205/PW-17 (Colly.) published by Ministry of Coal had prescribed for any minimum requirement of land and its possession by the applicant company seeking allocation of coal block to be eligible for allocation, PW17 replied that no such minimum requirement of land and its possession was specified either by Ministry of Coal or by Screening Committee for evaluating inter-se priority between the applicant companies. Likewise he deposed that there was no minimum requirement of installed capacity specified by CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 81 of 271 Ministry of Coal in the advertisement or the guidelines Ex. P- 205/PW-17 (Colly). He deposed that he could not comment if the significance of amount of land in possession of the applicant company was relevant only to the extent of its requirement for setting up of the proposed EUP.
17.1.36 In response to the question that as on the date of the allocation of the coal block in favour of SKS (A-
1), it had required land in possession sufficient for setting up of the proposed EUP as described in the Project Report, he replied that he could not answer as he had not seen the Project Report nor he is a technical person. He deposed that as per his knowledge there was no such rule adopted by screening committee that recommendation of the State Government and Administrative Ministry would be binding upon it while considering applications for allocation.
17.1.37 He stated that he did not remember any instance where the screening committee had changed the purpose for allocation of the coal block. It was deposed further that the applications of the applicant companies, the recommendations of the state governments and the administrative ministries were kept in a file maintained by the Ministry of Coal but they were not made available to the members of the 36th screening committee. He volunteered that only the Agenda and available recommendations of state governments/administrative ministries were provided to them. He admitted that those files were maintained in Ministry of Coal. But he volunteered to add that there was no separate Secretariat for the 36th screening committee and the files were maintained in Ministry of Coal.
17.1.38 He deposed that only concerned state CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 82 of 271 governments and the concerned administrative ministries had given comments/recommendations in writing and but from other members, no the comments/recommendations were sought in writing. He admitted the suggestion that that a company which was allotted a coal block for captive purpose could not have mined the coal without establishing the proposed EUP. PW-17 admitted that in the writ petitions bearing no. WP(C) No. 6449/2008, titled as 'M/s Prakash Industries Ltd. Vs. Union of India & Ors.' and WP(C) No. 7135/2008, titled as 'M/s Prakash Industries Ltd. Vs. Union of India & Ors.' filed before Hon'ble Delhi High Court, Ministry of Coal was one of the respondents. He further admitted that he had dealt with these writ petitions and filed affidavits in the same in his official capacity.
17.1.39 He stated that the counter affidavit to the writ petition dated 31.10.2008 in WP(C) No. 6449/2008, his reply affidavit to CMA No.5039/2009 in WP(C) No. 6449/2008 dated 16.07.2009, certified copy of WP(C) No. 6449/2008 was Ex. P-279/PW-17 (Colly.) and his counter affidavit dated 31.10.2008 Ex. P-280/PW-17 and his reply affidavit dated 16.07.2009 Ex. P-281/PW-17, all were bearing his signatures. He further stated that the counter affidavit to the writ petition WP(C) No. 7135/2008 dated 07.11.2008 and the certified copy of WP(C) No. 7135/2008 is Ex. P-282/PW-17 (Colly.) and his counter affidavit dated 07.11.2008 Ex. P-283/PW-17, were also bearing his signatures.
17.1.40 In his cross-examination, PW-17 further stated that there was no minimum benchmark set by Ministry of Coal or Screening Committee regarding CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 83 of 271 investment to be made by the applicant companies in the EUP in the guidelines nor there was any separate criteria laid down by Screening Committee for making recommendations for allocation. He deposed that as per clause (2) of guidelines regarding "how to apply" any person authorised by the company could have signed the application on its behalf or appear in presentation. In response to the question as to whether it is correct that no one except the members of the Screening Committee had any say in decision making process by the Screening Committee, he replied that as per the guidelines issued by Ministry of Coal, it was the job of Screening Committee.
17.1.41 Upon being shown File Ex. P-238/PW-17 (Colly.), D-10, PW-17 admitted the content of para 1 (iii) and 1(iv) and para 2 of the Notesheet dated 15.09.2010 at page 9/n, which were reproduced in his cross-examination but for brevity sake not referred herein. He admitted that that the affidavits Ex. P-280/PW-17, Ex. P-281/PW-17 and Ex. P-283/PW-17 were filed without any undue influence or coercion after taking approval from the competent authority. He admitted that as per reply to para 28 to 32 of the petition in his affidavit Ex. P-280/PW-17, the Chief Secretary of State of Chhattisgarh had attended the meeting of Screening Committee and recommended the allocation of Vijay Central captive coal block to M/s Prakash Industries & SKS (A-1) jointly. The decision arrived at the meeting were unanimous and due regard was given to the submissions made by the members incorporated wherever needed. It is further stated that no communication had been received by the State Government after circulation of minutes or placing the same on the website and he had never withdrawn his CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 84 of 271 abovesaid affidavits. 17.1.42 In his cross-examination by on behalf of A-
5 Sudhir Kumar Sahay, PW-17 admitted the contents of para 6&7 and para 9&10 in his affidavit (Ex. P-281/PW-17). PW-17 further admitted that that after the reply dated 31.03.2008 Ex. P-265/PW-17, no further action had taken place in Ministry of Coal on the letter dated 05.02.2008 Ex. P-309/PW-28. He admitted that there was a post called Director in Ministry of Coal. He further admitted that if any letter was received in the ministry then a file noting was done in the concerned file. He stated that he could not tell as to whether letter dated 11.12.2007 (Ex. P-154/PW-7) was dealt with in any other file of Ministry of Coal or not, but it was not dealt with in File D-219. He further stated that as far as he remembered, above letter dated 11.12.2007 was not dealt with in any file related to allocation of Vijay Central Coal Block which were on record of this case.
17.2.1 PW-19 is Sh. A. Sanjay Sahay. As per his version, in the year 2015 he was posted as Under Secretary in Ministry of Coal, Government of India and during that period, he had supplied certain documents/information to CBI in connection with the present case. He deposed that vide letter dated 28.01.2015 (Ex. P-266/PW-19) (D-218) bearing his signature at point A, he forwarded two letters i.e. dated 11.12.2007 (Ex. P- 154/PW-7) and letter dated 10.12.2007 along with a presentation booklet (Ex. P-155/PW-7) to CBI.
17.2.2 In his cross-examination on behalf of A-5 Sudhir Kumar Sahay, he was put a question as to how in CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 85 of 271 his letter dated 28.01.2015 (Ex. P-266/PW-19), it was mentioned that those letter were furnished before the 36 th Screening Committee. In response, he stated that they were available in the records of Ministry of Coal pertaining to 36th Screening Committee. In his cross-examination on behalf of A-3 Deepak Gupta, he admitted that there was no mark of receiving given on the letter dated 10.12.2007 (Ex. P-155/PW-7). He also admitted that the presentation booklet appeared to have not been enclosed with the letter dated 10.12.2007. He further admitted that there were no signatures/initials of any officials on pages 4 to 43 of Ex. P- 155/PW-7. Rest of the accused adopted the cross- examination done on behalf of A-3 and A-5.
17.3.1 PW-27 is Sh. Ram Naresh. He deposed that in the year 2012, he was posted as Section Officer in the Ministry of Coal, Government of India and handed over various documents to the CBI. He proved the production- cum-receipt memo dated 23.07.2012 as Ex. P-286/PW-27 (D-4) vide which he had handed over the documents mentioned therein including the application form of SKS (A-1) Ex. P-1(Colly.) for allocation of coal block at Vijay Central, mentioned at Sr. no. 13 of said memo.
17.3.2 He further proved the memo dated 14.08.2013 (Ex. P-287/PW-27 (D-6)), vide which he handed over file Ex. P-264/PW-17 (Colly.) (D-7) maintained in Ministry of Coal to CBI. He further proved the production- cum-receipt memo dated 18.09.2012 as Ex. P-288/PW-27 (D-8), vide which he handed file Ex. P-289/PW-27 (D-9) and file Ex. P-238/PW-17 (Colly.) (D-10) maintained in their office to CBI.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 86 of 271 17.3.3 He proved production-cum-receipt memo
dated 18.09.2012 (Ex. P-288/PW-27) (D-8) vide which he had handed over two files of their office i.e. the file No. 38011/2/2007-CA-I(Part-II) Ex. P-289/PW-27 (D-9) and file Ex. P-238/PW-17 (Colly.) (D-10). Vide another handing over-cum-receipt memo dated 06.06.2012 Ex. P-290/PW-27 (D-11), PW27 had handed over Agendas of the Screening Committees marked as Ex. P-291/PW-27 to P-300/PW-27 (D-12 to D-21). Vide production-cum-receipt memo dated 06.07.2012 Ex. P-301/PW-27 (D-36), he had handed over registers containing entries in respect of application forms received in response to the advertisement of September 2005 and November 2006. He proved the copy of register Ex. P-210/PW-17 (D-37), the original of which was handed over vide said memo Ex. P-301/PW-27.
17.3.4 He also proved the copy of production- cum-receipt memo dated 20.06.2012 as Ex. P-302/PW-27 (D-50) vide which he handed over various files mentioned therein including the file No. 13016/30/2009-CA-I(Vol. I) Ex. P-3 (Colly.) (D-51) and file No. 13016/30/2009-CA-I(Vol. II) Ex. P-303 /PW-27 (Colly.) (D-52). He proved the photocopy of memo dated 22.06.2012 as Ex. P-304 /PW-27 (Colly.) (D-53) vide which he handed over the documents mentioned therein including the file No. 13016/31/2011-CA- I, mentioned at serial No. 5 of said memo and same has been separately marked as Ex. P-305/PW-27 (Colly.) (D-
54). He deposed that all the abovesaid documents/files were handed over from the records of Ministry of Coal.
17.3.5 In his cross-examination on behalf of A-1 company, PW-27 admitted that he had personally not dealt CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 87 of 271 with any of the above files. PW-27 deposed that initially some letters were received from CBI for requisition of documents but later on, it was decided by senior officers to give all the files relating to allocation of coal blocks to CBI. He deposed that no identification mark was put over the files before handing over the same to CBI. The other accused persons had adopted the cross-examination done on behalf of A-1 company.
17.4.1 PW-39 is Sh. Ved Parkash Sharma. As per his version, on 30.06.2013, he had retired as Section Officer CA-1 Section, Ministry of Coal. He used to deal with the allocation of coal blocks to government companies. He deposed that CBI had registered some Preliminary Enquiries (PEs) pertaining to the allocation of various coal blocks to different companies and in said PEs, the CBI officers used to ask for various files and documents from the ministry pertaining to allocation of various coal blocks to different companies and he had also supplied certain files to CBI in the instant case.
17.4.2 He proved on record the photocopy of seizure memo dated 07.06.2012 (D-22) Ex. P-319/PW-39, vide which he had handed over the documents mentioned therein i.e. original files Ex. P-217/PW-17 (Colly.) (D-23); Ex. P-229/PW-17 (Colly.) (D-24); Ex. P-216/PW-17 (Colly.) (D-27); File No. 38011/2/2007-CA-I (Part III) (D-25); and File No. 38011/2/2007-CA-I (Part II) (D-26) to the CBI and he exhibited the File No. 38011/2/2007-CA-I (Part III) (D-
25) and File No. 38011/2/2007-CA-I (Part II) (D-26) as Ex. P-320/PW-39 (Colly.) & Ex. P-321/PW-39 (Colly.) respectively.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 88 of 271 17.4.3 He also proved on record the photocopy of
handing over-cum-receipt memo dated 08.06.2012 (D-28) as Ex. P-322/PW-39 vide which, various feedback forms and other documents were submitted to the CBI. After going through one of the feedback form of SKS (A-1) Ex. P-2 (Colly.), he deposed that same was also handed over to CBI vide aforementioned memo. Similarly, he proved the photocopy of handing over-cum-receipt memo dated 12.06.2012 (D-30) Ex. P-323/PW-39 vide which documents mentioned therein were submitted to the CBI. Similarly, vide memo Ex. P-323/PW-39 the original File No. 47011/4/2003-CB-CA(PT) (D-31) and File No. 38011/6/2005-CA-I (D-32) Ex. P-324/PW-39 (Colly.) & Ex. P-325/PW-39 (Colly.) respectively were handed over to CBI.
17.4.4 He also identified his signature on the photocopy of Production-cum-receipt memo dated 18.06.2012 Ex. P-326/PW-39 (D-33) vide which, the documents mentioned therein were submitted to the CBI. After perusing the copies, he deposed that vide said memo Ex. P-326/PW-39, the original file Ex. P-201/PW-17 (Colly.) and Ex. P-202/PW-17 (Colly.), were submitted to the CBI. Similarly, PW-39 identified his signatures on the photocopy of Production-cum-receipt memo dated 27.09.2012 (D-42) and proved it as Ex. P-327/PW-39, vide which, original of Files bearing no. 13011/3/92 (D-43); 13011/5/2003-CA (Part-I) (D-44); and 13016/35/2005-CA-I (C. No. 4374) (D-
45), were handed over by him to CBI and said files were exhibited as Ex. P-328/PW-39 (Colly.), Ex. P-329/PW-39 (Colly.) and Ex. P-330/PW-39 (Colly.) respectively.
17.4.5 He further deposed that vide Production-
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 89 of 271 cum-receipt memo dated 21.06.2012 (D-46) and
02.06.2012 (D-48) as Ex. P-331/PW-39 and Ex. P-333/PW- 39 respectively, vide which he handed over to CBI the original of File No. 38011/2/2007-CA-I (Volume-II, part-I) (D-47) and File No. 38011/11/2006-CA-I (Volume-IV) (D-
49), which were filed by CBI in some other cases of coal block.
H. Witnesses from Ministry of Steel
18. PW-16 Sh. Nihar Ranjan Dash is one of material witnesses of the prosecution case. As per his version, during the period 2006-2011, he was posted as Director in the Ministry of Steel under Central Staffing Scheme. He was however, looking after ID Wing of Ministry of Steel, in which matters related to coal block applications were dealt with during the period from October 2006 to February 2009. He further deposed that Mr. KAS Deo was the Joint Secretary in charge of ID wing upto September 2007. Thereafter, Sh. U.P. Singh joined as Joint Secretary during the time of consideration of 36 th Screening Committee coal blocks. Sh. R.S. Pandey was the Secretary, Ministry of Steel during said time of consideration for 36 th Screening Committee coal block applications. During his tenure in the Ministry of Steel, the other Secretaries of the Ministry were Sh. Rastogi, Sh. Atul Chaturvedi and Sh. P.K. Mishra.
18.1.1 As per versions of PW-16, the applications pertaining to 36th Screening Committee i.e. the applications qua non-power coal blocks were dealt within Ministry of Steel by him and the applications only qua Steel sector projects were received in February/March 2007 from CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 90 of 271 Ministry of Coal for the views and comments of Ministry of Steel. He deposed that as he was In-Charge of ID wing therefore, all such applications were received in his wing and he remained associated with the process of submitting the views/comments of Ministry of Steel to Ministry of Coal. Such applications were categorized by them primarily on the basis of the existing/proposed production capacity of their End Use Project (EUP) on a defined cut off date and accordingly, the same procedure was followed at the time of examining and considering the applications pertaining to 36th Screening Committee.
18.1.2 He further deposed that there were different cut off dates and different capacities of the EUP with respect to Coking and non-coking coal blocks and qua the companies engaged in sponge iron production (DRI) or pig iron production (Blast Furnace). The minimum capacity of the EUP for coking coal block was fixed at 0.5 MTPA and for non-coking coal blocks it was fixed at 0.3 MTPA both for existing as well as proposed capacity to be achieved by December 2010. Accordingly, they examined the various applications and sent the recommendations to Ministry of Coal.
18.1.3 PW-16 identified his signatures on original office memorandum dated 06.12.2007 (D-27) page 830-855 alongwith two enclosed annexures (Ex. P-192/PW-16 (Colly.)), which was sent by him to the Ministry of Coal on the subject - Verification of application for captive coal block for End Use by Steel Projects. Annexure-I contained status of applicants who applied for captive coking coal blocks and Annexure-II contained the status of applicants who applied CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 91 of 271 for captive non/coking coal blocks. 18.1.4 PW-16 further deposed that in para 6 of the aforementioned OM, following parameters were
suggested to the Screening Committee for consideration while making its recommendations:
(i) Progress made in respect of the steel capacity projects for which the application for coal block has been submitted.
(ii) Potential and credibility of the applicants in setting up capacity addition in steel sector.
(iii) Efforts made towards development of natural resources allocated earlier.
Further, it was also mentioned in the OM that:
"7.0 The allocation of coal block should be need based and project specific to meet its coal requirement as per the capacity either installed or proposed. 8.0 Applicants who have already achieved substantial growth in steel sector without availing any captive iron ore/coal block resources may be appropriately considered. 9.0 Since the number of captive coal blocks is limited and there are a number of deserving applicants, a rational apportionment of the quantity of coal block to a steel project irrespective of the intended capacity should be considered.
10.0 Nearly one year has passed after submission of applications, the current status of the respective projects should be taken into consideration by Screening Committee.
11.0 The letter of allocation should stipulate the provision for time-bound implementation of the intended steel projects and simultaneous development of the allocated captive coal blocks.
12.0 with the above views, the status on each applicant, separately for coking (Annexure-I) and non-coking (Annexure-II) is sent herewith for further necessary action."
18.1.5 He deposed that OM dated 14.12.2007 alongwith Annexure-III {Ex. P-193/PW-16 (Colly.) (D-23)} was issued to Ministry of Coal by him detailing the guidelines on categorization, which were inadvertently not CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 92 of 271 enclosed in the last OM dated 06.12.2007. (the original OM dated 06.12.2007 and 14.12.2007 are available as D-22 in CC no. 03/2014 tiled as G.K.Basak and anr.). He further deposed that vide letter dated 19.02./12.03.2007 alongwith annexures (page 169-200 in File D-35), sent by Ministry of Coal to Ministry of Steel, copies of application forms were sent to Ministry of Steel for examination and comments.
18.1.6 Upon being shown D-27, Page 853, Annexure-II srl. no. 107, which refers to recommendations with regard to SKS (A-1) at Siltara, Raipur, Chhattisgarh, he deposed that the company/A-1 was kept in category V(b), which was for those companies having less than eligible capacity (0.3 MTPA or 0.5 MTPA as the case may be) but their proposed expansion capacity which was likely to be commissioned by December 2010 would enable them to have eligible capacity and having partial coal linkage, captive coal block with less than 50% satisfaction level and the company had proposed 0.33 MTPA (3X350 TPD) by 31.12.2008. He further deposed that as per Ministry of Steel norms, sponge iron capacity was calculated for 300 working days. As such, the proposed sponge iron capacity worked out to be 0.315 MTPA (1050 TPD X 300 days). Further he deposed that taking into account the existing capacity as per application as 0.27 MTPA, the recommended capacity by December, 2010 worked out to be 0.585 MTPA (0.27 MTPA + 0.315 MTPA). As per his version, the companies falling in higher categories were given a preference as compared to the companies falling in lower categories.
18.1.7 As per his version, he had attended the last meeting of the Screening Committee held on CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 93 of 271 03.07.2008, but, his join Secretary Mr. U.P.Singh was present in all the meetings of the Screening Committee. During examination-in-chief of PW-16, he identified his signatures as well as of Sh. Udai Pratap Singh, the then Joint Secretary Ministry of Steel on the attendance sheets of officers/executives participating in the 36 th Screening Committee meeting chaired by Secretary (Coal), which are are follows:-
S.No Documents Exhibit
1. Attendance sheet of officers/executives Ex. P-194/PW-16 participating in the 36th Screening (D-23 Page 218/175) Committee meeting held on 07.12.2007 for screening proposals relating to captive mining of coal blocks for non power blocks under the chairmanship of Secretary Coal at Scope Minar, Laxmi Nagar, Delhi
2. Attendance sheet of officers/executives Ex. P-195/PW-16 participating in the 36th Screening (D-23 Page 220/177) Committee meeting held on 08.12.2007 for screening proposals relating to captive mining of coal blocks for non power blocks under the chairmanship of Secretary Coal at Scope Minar, Laxmi Nagar, Delhi
3. Attendance sheet of officers/executives Ex. P-196/PW-16 participating in the 36th Screening (D-27, Page 352- Committee meeting held on 07.02.2008 353/5 & 6) for screening proposals relating to captive mining of coal blocks for non power blocks under the chairmanship of Secretary Coal at Scope Minar, Laxmi Nagar, Delhi
4. Attendance sheet of officers/executives Ex. P-197/PW-16 participating in the 36th Screening (D-27, Page 361- Committee meeting held on 08.02.2008 362/14 & 15) for screening proposals relating to captive mining of coal blocks for non power blocks under the chairmanship of Secretary Coal at Conference Room No. 353A, 3rd Floor, Shashtri Bhawan, New Delhi
5. Attendance sheet of officers/executives Ex. P-198/PW-16 participating in the 36th Screening (D-27,Page 460/116) CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 94 of 271 Committee meeting held on 03.07.2008 for screening proposals relating to captive mining of coal blocks for non power blocks under the chairmanship of Secretary Coal at Conference Room No. 353A, 3rd Floor, Shashtri Bhawan, New Delhi 18.1.8 PW-16 deposed that page 714-720/369A- 375 of D-27 is the recommendation sheet which was prepared on 03.07.2008, containing the recommendations of the 36th meeting of the Screening Committee in respect of coal blocks earmarked for non power sector and in this recommendation sheet, the Vijay Central coal block was decided to be recommended for its allocation in favour of SKS (A-1) and M/s Prakash Industries Ltd. He identified the signatures of Sh. U.P. Singh, Joint Secretary, Ministry of Steel at point A on page 718 (Ex. P-199/PW-16).
18.1.9 PW-16 identified his signatures at Sr. No. 5 at point A on list of participants (Ex. P-200/PW-16, D-35, Page 93) who attended the Screening Committee Meeting on 11.05.2007 in the office Chamber of Secretary (Coal). PW-16 deposed that these were the minutes of the meeting dated 11.05.2007 (Page 102-104 of D-35), which was called to discuss possible modalities for scrutiny and evaluation of applications received for allocation of 38 coal blocks for captive use.
18.1.10 During his examination-in-chief, PW-16 further deposed that since he was not the member of Screening Committee and had simply accompanied the Joint Secretary of Ministry of Steel in the meeting of the 36 th Screening Committee held on 03.07.2008, his signatures were not taken on the recommendation sheet dated CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 95 of 271 03.07.2008. He deposed that he had not participated in
the deliberations and his role was to provide his inputs or suggestion to the Joint secretary (Steel). He further deposed that during the initial meetings of the 36 th Screening Committee, a compilation chart detailing the details of information contained in the applications were circulated to the Members of the Screening Committee but, there was never any inter se seniority list circulated by the Ministry of Coal.
18.1.11 In his cross-examination on behalf of A-1 company, he admitted that the applications were diligently examined by Ministry of Steel before the OM dated 06.12.2007 was sent to Ministry of Coal and correct information was mentioned in it and further that was no specific recommendation in respect of any particular company or in respect of any particular block under consideration by the 36th Screening Committee. He admitted that no category was given in the Annexures sent with OM dated 06.12.2007, to the companies which were not found eligible by the Ministry of Steel as per the guidelines approved by the Secretary (Steel).
18.1.12 He further admitted that the eligibility criteria adopted by Ministry of Steel as per Annexure-III sent to Ministry of Coal on 14.12.2007, Ex. P-193/PW-16 (Colly.), approved by Secretary (Steel), provided that the following factors shall be considered by Ministry of Steel for deciding the eligibility of the applicants :-
0.3 mT(million metric Ton) or more capacity of production of sponge iron either existing or proposed up to December, 2010.
0.5mT(million metric Ton) or more capacity of production of pig iron either existing or proposed up to December, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 96 of 271
2010.
Background of the company-whether associated with steel, sponge iron, pig iron or mining activity. Financial status of the company and the extent of financial tie up.
Coal washery should be envisaged in the project. Capacity of the company to quickly undertake development of coal mines based on experience or any credible effective steps.
18.1.13 PW-16 admitted that Sh. Deepak Kumar and Sh. R.S. Rao were in the ID Wing of Ministry of Steel. It is also correct that Sh. S.S.Tak was also attached with ID Wing as Asstt. Industrial Advisor in Ministry of Steel. He admitted that the Annexures I & II to the OM dated 06.12.2007 (already Ex. P-192/PW-16 (Colly.)) were prepared by the ID Wing. In response to the question, whether he had examined/considered the Annexure I & II mentioned above before approving the same and getting it approved from the Joint Secretary, ID Wing and the Secretary, Ministry of Steel, he (PW-16) replied that he had gone through the Annexures himself. But, he personally had not examined the applications. He deposed that there was no minimum threshold of existing capacity for eligibility for category V in the guidelines of Ministry of Steel. He admitted that as per the guidelines for category V of the Ministry of Steel, the existing capacity of sponge iron plant of an applicant company could be 0.10 MTPA to 0.29 MTPA but, it should not be a case of nil existing capacity for Category V. 18.1.14 He stated further that there was no discussion regarding the guidelines of Ministry of Steel in the screening committee meeting dated 03.07.2008. In response to the question if the Joint Secretary, Ministry of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 97 of 271 Steel, Sh. U.P. Singh being representative of Ministry of Steel had agreed to the recommendation of the 36 th screening committee in favour of SKS (A-1), he replied that as far as he remembered, there was no dispute regarding recommendation in favour of SKS (A-1) by 36 th Screening Committee but, he did not remember about the discussion that had taken place regarding application of SKS (A-1). He admitted that per the guidelines of Ministry of Steel for categorization, availability of land was not a relevant factor.
Rest of the accused adopted the cross-examination done on behalf of A-1.
I. Witnesses related to Role of Sudhir Kumar Sahai
19. PW-14 is Sh. Mahendra Arya, having transport business by the name of Sri Srinivasa Road Lines. He deposed that he knew Sh. Anil Gupta as their wives were cousins. During examination in chief he deposed that Sh. Sudhir Kumar Sahay (A-5) was his senior in Birla Institute of Technology, Mesra, Ranchi in B. Sc. (Engineering) and he correctly identified Sudhir Kumar Sahay during his examination. PW-14 further deposed that Sh. Anil Gupta wanted to establish a steel plant in Jharkhand and he suggested the name of Sh. Sudhir Kumar Sahay to him (Anil Gupta) but he (PW-14) showed his ignorance about the meeting of Sh. Anil Gupta and Sh. Sudhir Kumar Sahay.
19.1.1 In his cross-examination on behalf of Sudhir Kumar Sahay (A-5), he stated that he had suggested name of Sh. Sudhir Kumar Sahay to Sh. Anil Gupta as Sh. Sahay and he had studied at the same institute and he knew that Sh. Sahay had good knowledge of the State of Jharkhand and he was also an engineer in the field. The CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 98 of 271 other accused preferred not to cross-examine said witness.
19.2.1 PW-15 is Sh.Rajesh Srivastava, who was practicing as Chartered Accountant in the name and style of Rajesh Srivastava & Co at Ranchi. He correctly identified Sudhir Kumar Sahay (A-5) being the director in M/s Mac Rold Strips Pvt. Ltd. and deposed that he (PW-15) used to audit accounts of the said company. PW-15 identified his signature on the balance sheets of the company M/s Mac Rold Strips Pvt. Ltd. The witness identified the signatures of Sudhir Kumar Sahay at page 13 which is the certified copy of Form 20-B of M/s Mac Rold Strips Pvt. Ltd (Ex. P-191/PW-15) received from office of Registrar of Companies, Patna (D-310/3).
19.2.2 In his cross-examination on behalf of Sudhir Kumar Sahay (A-5), he stated that he had known Sh. Sudhir Kumar Sahay since 2008-09 and also heard the name of M/s ABC & Co., a proprietorship concern of Sh. Sudhir Kumar Sahay. He stated that he was unaware that M/s Mac Rold Strips Pvt. Ltd. was earlier a proprietorship concern by the name M/s Chota Nagpur Metal Complex of Sh. Sudhir Kumar Sahay. The other accused preferred not to cross-examine said witness.
19.3.1 PW-31, Sh. Subodh Kant Sahai deposed that in the year 2008, he was Union Cabinet Minister and he was having the independent charge of Ministry of Food Processing Industries. He stated that accused Sudhir Kumar Sahay was his younger brother. He deposed that he knew SKS (A-1) as one Anil Gupta who was its promoter had met him sometime in 2005-06 in Ranchi with one person, whose name he did not recollect but he was friend of his younger CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 99 of 271 brother Sudhir Kumar Sahay. He stated that as far as he remember, the said person was relative of the said Anil Gupta. He deposed that the said person had studied together with his (PW31's) younger brother Sudhir Kumar Sahay. PW31 stated that Sudhir Kumar Sahay was not associated with SKS (A-1) in any manner.
19.3.2 He proved the letter dated 05.02.2008 (Ex. P- 309/PW-28, D-224) written by him to the then Prime Minister Dr. Manmohan Singh vide which he forwarded the copy of presentation of SKS (A-1). He deposed that he had written this letter as it was represented by Sh. Anil Gupta that their company wanted to establish Power/Steel Project in Jharkhand and since he belonged to Jharkhand, he had found the representation of Sh. Anil Gupta to be genuine and therefore, in order to promote industrial development of the State, he sent the said letter. PW-31 further deposed that when he had met Sh. Anil Gupta and his relative for the first time in Ranchi, his younger brother Sudhir Kumar Sahay had come with them and had introduced them to him. He correctly identified Sudhir Kumar Sahai who was present in the court.
19.3.3 In his cross-examination by Ld. Counsel for A-5 Sudhir Kumar Sahay, PW-31 deposed that the letter Ex. P-309/PW-28 was prepared and issued from his office at Delhi and on that date, he had not met his younger brother Sudhir Kumar Sahay. PW-31 admitted that letter Ex. P- 309/PW-28 was not issued upon instance of Sudhir Kumar Sahay. He further admitted that he had filed his replies alongwith affidavits in the two writ petitions which were filed before Hon'ble Delhi High Court. These were WP(C) No. CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 100 of 271 6449/2008 (Ex. P-279/PW-17 (Colly.)) and WP(C) No. 7135/2008 (Ex. P-282/PW-17 (Colly.)) and the reply and affidavit dated 09.07.2009 in WP(C) No. 6449/2008 was Ex. P-310/PW-31 (Colly.). He further stated that reply and affidavit dated 09.07.2009 in WP(C) No. 7135/2008 was Ex. P-311/PW-31 (Colly.) Other accused persons had adopted the cross-examination of this witness done on behalf of A-5.
J. Witnesses to specimen signature, search and seizure 20.1.1 PW-29 is Sh. H.K. Gulati, who at the relevant time was posted as Lead District Office, Hathras in Canara Bank and during that period, he had visited CBI Office at New Delhi and he acted as independent witness at the time when specimen signatures of Sh. Sudhir Kumar Sahay were taken. PW-29 proved the handwriting/signatures of Sh. Sudhir Kumar Sahay at S-61 to S-70 of (part Ex. P-106 (Colly.), D-250) bearing his signatures at point A on each page. The signatures were taken in his presence. He correctly identified Sh. Sudhir Kumar Sahay present in the court. Nothing material was asked in his cross-examination.
20.2.1 PW-33 is Sh. Sudhakar Bhai Tripathi. He deposed that during the year 2014, he was posted as Sr. Manager (Legal), Regional Office, Bank of Baroda, Raipur, Chhattisgarh and was called by the CBI to witness a search operation. He alongwith his colleague Mr. Neeraj Nirala met CBI Officers near Tativan Chowk, Raipur and went to the factory premises of SKS (A-1) near Raipur and the search of said factory premises was conduced in the presence of Security Officers and Company Officers and vide search list CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 101 of 271 dated 05.08.2014 (D-332) Ex.P-313/PW-33, some documents mentioned therein were seized. He identified his signatures on the said list, which was also signed by Sh. Neeraj Nirala. PW-33 also identified his signatures/initials on the File Ex. P-122 (Colly.) (D-333) and File Ex. P-123 (Colly.) (D-334) mentioned at Sr. no. 4 and 7 respectively in the search list Ex. P-313/PW-33. This witness was also not cross-examined by the any of the defence counsels.
K. Witnesses from Central Excise pertaining to EUP Capacity 21.1.1 PW-4 is Sh. Swapan Kumar Khan. He deposed that in the year 2014, he was posted as Superintendent, Central Excise, Range-II, Civil Lines, Raipur. After going through the letter dated 30.09.2014 of the Office of Commissioner Customs & Central Excise, Dhamtari Road, Tikrapara, Raipur (D-178), he deposed that vide said letter, the documents mentioned therein were forwarded to CBI. He deposed that he had certified the certified copies of ER-4 returns for the year 2006-07 (Pg. 1-5); certified copy of annual report (Pg. 6-7) and certified copy of ER-1 return for the year 2006-07 (Pg. 8-44) Ex. P-147/PW-4 (colly) (part of D-179), and same were provided from the office record maintained in their office. PW4 identified his signatures and that of Inspector Jeetendra Nishad and official seal on Ex. P-147/PW-4 (colly). However, objection was raised by Ld. Counsel Sh. Narender Maan for A-1 as to the mode of proof.
21.1.2 PW-4 also identified the original ER-1 return for the year 2007-08 (page 45-88 of D-179) and original ER-7 returns for the years 2007-08, 2008-09 and 2009-10 (page 89-94 of D-179) of SKS (A-1), Siltara, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 102 of 271 Raipur as Ex. P-148/PW-4 (colly.). He also identified the certified copy of ER-7 returns for the year 2010-11, 2011-12 and 2012-13 (page 95-99 of D-179) as Ex. P-149/PW-4 (Colly.) and identified his signatures and that of Inspector Jeetendra Nishad and official seal on the same. He proved the letter dated 29.09.2014 (page 100-102, D-179) Ex. P- 150/PW-4, bearing his signatures, vide which he had forwarded point-wise details to the Superintendent, Vigilance, Central Excise Headquarters, in response to the letter of CBI dated 24.09.2014.
21.1.3 As per version of PW-4, vide seizure memo dated 16.10.2014 (D-180), he had handed over letter dated 26.09.2007 of SKS (A-1), (regarding the commissioning of nitrogen and oxygen plant the details of which were mentioned in the letter itself), consignment note and envelope to the CBI. The memo alongwith the letter, consignment note and envelope were exhibited as Ex. P- 151/PW-4 (Colly.).
21.1.4 He further deposed that the letter dated 11.02.2015 (D-184) was addressed to IO Sh. M.R. Attrey, vide which the search report dated 30.10.2014 (part of D-
184) regarding the search of document in respect of commencement of commercial production of each kiln including other main machineries etc. ofSKS (A-1) was forwarded. He identified his signatures and that of Inspector Jeetendra Nishad on the same. The letter dated 11.02.2015 alongwith search report were exhibited as Ex. P- 152/PW-4 (Colly.). He further deposed that vide ER-7 return for the year ending on 31.03.2008 [Part of Ex. P- 148/PW-4 (Colly.)], the company SKS (A-1) informed about CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 103 of 271 the details of installed capacity of the factory in para No. 6 and 7 of the said return.
21.1.5 In his cross-examination on behalf of A-1 company, PW4 admitted that as per ER-7 return as on 31.03.2008, the 4th kiln of sponge iron was installed on 26.07.2006. He further admitted that as per letter dated 26.09.2007 (Part of Ex. P-151/PW-4), the company had informed that the plant activity in operation with regard to sponge iron was 2 X 100 TPD and 2 X 350 TPD. He stated further that in the year 2007-08, he was not posted at Range-II, Raipur. He admitted that the sponge iron production was an excisable item and chargeable to central excise duty under central excise tariff.
21.1.6 PW4 admitted that as per the Central Excise Rules, officers of the Central Excise Department were authorised to carry out general inspection, scrutiny and verification of document of a unit, registered within their jurisdiction. He further admitted that at the time of handing over the abovesaid documents to CBI, there was nothing in the records of the Excise Department of the area in the form of any note etc to show that the information provided by the company was incorrect. He admitted that when a person applies for the registration of a new unit under the Central Excise Act, the officers of the Excise Department carry out an inspection/verification of the said unit. He stated that the department used to only carry out the inspection of the premises.
21.1.7 He admitted that a person/company who were producing goods which were subject to excise duty irrespective of whether the said unit was registered with the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 104 of 271 Central Excise Department or not. He further admitted that even if a unit was not registered with the PPF, Sales Tax, Labour Department, Factories Act and producing the excisable goods, it was under a legal obligation to pay excise duty. He admitted the suggestion that under the Central Excise Act, the term 'installed capacity of a unit' and 'commencement of actual production of excisable goods' were two different terms.
21.2.1 PW-22 is Sh. Dharamjeet Kumar. As per his version, in the year 2014, he was posted as Dy. Commissioner, Central Excise, Raipur. He proved the letter dated 30.09.2014 (Ex. P-269/PW-22)(D-178), vide which he had forwarded documents Ex. P-147/PW-4 (Colly.) to Ex. P- 149/PW-4 (Colly.) to the CBI. He also proved his letter dated 20.10.2014 (Ex. P-270/PW-22) (D-183), vide which he had informed regarding the constitution of committee to trace the file of SKS (A-1). He further deposed that vide letter dated 11.02.2015 ((Ex. P-152/PW-4 (Colly.), D-184) bearing his signature at point A, he had forwarded the search report dated 30.10.2014 to CBI. Accused persons preferred not to cross-examine this witness despite opportunity.
L. Witnesses from CFSL 22.1.1 PW-18 Sh. Anil Sharma is a forensic
expert, who proved his report dated 21.10.2015 as Ex. P- 248/PW-18, which was forwarded to CBI vide letter dated 29.10.2015 by the then CFSL Director, Dr. Rajender Singh, whose signature he (PW-18) identified at point A on said letter. As per his version, he had given his positive opinion in respect of the questioned signatures marked Q-14 attributed to accused Sudhir Kumar Sahay (A-5) and CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 105 of 271 question signature and writing marked Q-1 to Q-8 and Q-10 to Q-11 attributed to accused Amrit Singh (A-4) on the documents, which are part of attendance sheets Ex. P- 216/PW-17 and Ex. P-156/PW-7 (colly), after comparing them with the specimen signature of said accused. The cross-examination of this witness remained nil as none of the accused preferred to cross-examine him.
M. Witnesses from CBI 23.1.1 PW-32 Sh. K.P. Singh, deposed that
during the relevant period he was posted as Malkhana Incharge, CBI, EO-I, Delhi and during 2014, on the directions of SP, CBI, EO-I, he handed over the original records and copies of the certain records to the IO of the present case, which were seized during the preliminary inquiry of coal block allocation cases. He identified his signatures and that of Sh. M.R. Atrey on the handing over- taking over memo dated 16.09.2014 (D-3) and proved it as Ex. P-312/PW-32 (Colly. and deposed that vide said memo he (PW-32) had handed over the documents mentioned therein to the IO. PW-32 was not cross-examined on behalf of any of the accused.
23.2.1 PW-40 is IO/Dy. SP Sh. Manish Raj Atrey. He is the Investigating Officer (IO) of the present case. He deposed on the lines of the prosecution case as set out in the chargesheet. Therefore, his entire testimony is not reproduced herein for brevity sake. IO deposed that he collected relevant documents and files pertaining to allocation of Vijay Central Coal Block to SKS (A-1) from Representatives/Directors/MDs SKS (A-1), Ministry of Coal, Ministry of Steel, Prime Minister Office, Government of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 106 of 271 Chhattisgarh, State Industrial corporation Ltd. (SICL), Government of Chhattisgarh, CMPDIL, Coal India Limited, SECL, MRDC, Chhattisgarh. He also collected relevant documents pertaining to the claims raised by SKS (A-1) in the application form/feedback form/presentation regarding various clearances, land acquisition/purchases and networth, from Chhattisgarh Environment Conservation Board (CECB), Ministry of Environment, Forest and Climate Change, Water Resource Department, Government of Chhattisgarh, concerned Sub-Registrar offices of Chhattisgarh, State Bank of India and Bank of Baroda, Raipur, Chhattisgarh, Power Finance Corporation (PFC), Office of Central Excise, Raipur, Registrar of Companies, Raipur, Chhattisgarh, CFSL and NIC, Delhi.
23.2.2 PW-40 further referred to various documents which were either admitted under Section 294 CrPC or already exhibited through other prosecution witnesses.
23.2.3 PW-40 deposed that during the investigation, he got calculated the networth, turnover and profit of SKS (A-1) and in this regard, vide letter dated 19.12.2014 Ex. P-340/PW-40 (D-165) Sh. Ravi Kant, the then HoB, CBI, EO-I, New Delhi made a request to the CMD, Power Finance Corporation for deputing Chartered Accountant employed with PFC, who was well versed with the networth calculation methodology. He deposed that pursuant to that, PFC deputed Sh. V.K. Jain, CA, the then DGM, PFC and Sh. Manish Kumar Aggarwal, CS, the then Manager, PFC, who examined the Annual Reports and calculated the turnover, profit, networth and investments CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 107 of 271 made by SKS (A-1) and they submitted their report already exhibited as Ex. P-144/PW-3 (D-166).
23.2.4 As per version of PW-40, during the investigation, he had collected photocopy of production- cum-receipt memo (Ex. P-97) and copy of minutes of the meeting (Ex. P-98) from Sh. Sanjay Sehgal, IO of RC 219 2014 (E) 0015. PW-40 referred to letter dt. 15.01.2015 Ex. P-99 (D-239) vide which he had requested to Sh. Anil Gupta to provide certain information and in response to said letter, he forwarded his letter dt. 21.01.2015 Ex. P-100 (D-
240). PW-40 referred to the letters/notices Ex. P-101 (D-
241) and Ex. P-103 (D-243)) addressed to Sh. Anil Gupta and in response to said letters, Sh. Anil Gupta forwarded his replies Ex. P-102 (D-242) and Ex. P-104 (Colly.) (D-244)).
23.2.5 PW-40 proved the photocopies of relevant pages of Seized Property Register and relevant pages of Documents Temporary Issue Register of Malkhana, CBI, EO- I, New Delhi (Ex. P-417/PW-40 (Colly.)) (D-336). He deposed that during the investigation, he had also recorded statements of various witnesses and in the investigation, it was revealed that SKS (A-1) and other accused persons in conspiracy with each other misrepresented to Ministry of Coal and obtained allocation of Vijay Central Coal Block on the basis of false claims in respect of networth, investment, environmental clearance and land etc. 23.2.6 PW-40 further deposed that during the investigation, it was revealed that actual networth of the company was found to be Rs. 146.084 Crores and Rs. 191.349 Crores as on 31.03.2006 and 31.03.2007 respectively and it was also revealed that the company had CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 108 of 271 only made investment of Rs. 294.78 Crores, Rs. 466.25 Crores and Rs. 585.83 Crores as on 31.03.2006, 31.03.2007 and 31.03.2008 respectively. He deposed that the company had also misrepresented regarding the clearance for proposed EUP in their application and feedback form. The company had not obtained pollution clearance/consent to operate in respect of 4th kiln and falsely claimed existing capacity of 0.27 MTPA as on 12.01.2007.
23.2.7 PW-40 further deposed that the company and other accused persons also misrepresented regarding the land in possession of company and during the course of investigation they could only produce registered sale deeds in respect of 268.37 acres of land in the name of SKS (A-1) as on 12.01.2007 and 305.82 acres of land at the time of making of presentation before the 36th Screening Committee meeting on 07.02.2008. He deposed that during the investigation, it was also revealed that accused Sudhir Kumar Sahay, who misrepresented himself as Director of SKS (A-1) before Ministry of Coal, was never a Director of SKS (A-1).
23.2.8 In his cross-examination on behalf A-1 company, PW-40 deposed tat he did not remember if he had enquired from the Ministry of Steel or the State Government of Chhattisgarh or Ministry of Coal or any witness examined from said authorities regarding any specific method or criteria employed by them for calculating the networth of iron and steel manufacturing company. He admitted that the annual reports of SKS (A-1) for the years 2003-04 to 2007-08 was available with him when he got calculated the networth of the company and further that, in addition to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 109 of 271 annual reports, other documents of SKS (A-1) such as application of SKS (A-1) and its annexures, feedback form, letter dated 29.09.2014 of company etc, were also seen by Sh. V.K.Jain.
23.2.9 PW-40 deposed that he did not remember if any material was found during investigation to indicate that the share application money shown in the annual report for the year 2004-05 was ever refunded back. PW-40 further deposed that he could not say if the share application money was ever returned by the company or the equity shares were issued against the share application money brought in by the promoters as their contribution. PW-40 deposed that Sh. V.K. Jain being financial expert himself used the standard formula for calculating the networth of the company and the standard formula used by him in calculating the networth was also used for UMPP Projects.
23.2.10 Further as per his version, he (PW40) was not aware that Ministry of Heavy Industries had issued OM dt. 30.11.2010 (Ex. P-146/PW-3) for calculation of the networth of a heavy industry. He denied the suggestion that the calculation of networth by Sh. V.K. Jain was incorrect for the reason that it was not done in accordance with the formula so provided in OM. PW-40 denied the suggestion that he had not asked the Ministry of Steel if there was any method of calculation of networth of applicant companies of the steel sector as the networth was not a criteria for the Ministry of Steel for sending their recommendations/categorization. PW-40 denied the suggestion that the networth or possession of land was not mandatory and was not considered by either the Ministry of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 110 of 271 Coal/Screening Committee/Ministry of Steel/State Government of Chhattisgarh for allocation of coal block to SKS (A-1).
23.2.11 PW-40 further denied that the networth calculated and mentioned by SKS (A-1) in the application and feedback form was correct as per the annual reports of the company for the relevant time period. PW-40 denied the suggestion that for calculation of networth Sh. V.K. Jain had applied wrong formula which was prescribed for UMPP Project or that the networth was not a criteria for allocation of coal block for an applicant having an existing EUP.
23.2.12 PW-40 denied the suggestion that on the date of the application, the applicant company was having 300 acres of land available with it. He volunteered that the company was not having 300 acres of land in its name on the date of the application. PW-40 admitted that as per the application Ex. P-1 (Colly.) (D-5), the existing capacity of the sponge iron plant was stated as 2.7 LTPA and proposed capacity was 3.3 LTPA. PW-40 further deposed that the company had to further get the consent to establish the kilns and after constructing them, consent to operate the kilns had to be obtained.
23.2.13 PW-40 admitted that A-1 had obtained NOC from CECB, Government of Chhattisgarh for obtaining Environment Clearance from Ministry of Environment & Forest, Government of India for expansion of its EUP from 1,92,000 to 2,70,000 TPA vide letter dated 10.02.2006 and 25.08.2006 Ex. P-136/PW-1 (Colly.); and that A-1 was given consent to establish the proposed expansion from 1,92,000 to 2,70,000 TPA by the CECB, State Government of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 111 of 271 Chhattisgarh vide letter dated 12.10.2006 Ex. P-130/PW-1 (Colly.). PW-40 also admitted that the company A-1 had applied for issuance of consent to operate the proposed expansion from 1,92,000 to 2,70,000 TPA to the CECB, State Government of Chhattisgarh vide letter dated 26.10.2006 (Ex. P-131/PW-1 (Colly.).
23.2.14 Upon being shown Ex. P-148/PW-4 (Colly.), D-179, PW-40 admitted that in para 7 of the Form- ER7, item no.8, kiln no.4 (sponge iron of 350 TPD), date of installation is given as 26.07.2006. In response to the question as to whether he had examined any officer of Customs & Excise Department to verify the correctness/authenticity of the information given in the Form-ER7, PW40 replied that as far as he remembered, he had examined officer from Excise Department and he had told that whatever figures were provided by the companies in the Form ER-7, same were taken as correct and they did not use to verify the same physically.
23.2.15 In response to the question as to whether during investigation, he had verified that 4th Kiln of the company was in existence on 26.07.2006 and on the date of application i.e. 12.01.2007, PW-40 replied that as per letter dated 12.10.2006 Ex. P-130/PW-1 (Colly.), only the consent to establish was granted on that date, therefore, there was no question of 4th Kiln being in existence before that date. He stated that the consent to operate 4th Kiln was granted only on 05.04.2007, therefore, claim made in the application regarding 4th Kiln was found to be false.
23.2.16 In response to the question as to whether he had collected any material from Ministry of Coal or CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 112 of 271 Ministry of Steel or the State Government to show that there was any requirement of minimum existing capacity of the EUP of an applicant company for allocation of a coal block, PW-40 replied that as far as he remembered, it was provided in the advertisement/ guidelines that preference would be given to plants manufacturing 1 MTPA or more of sponge iron/steel. He stated that as far as minimum capacity is concerned, he did not remember whether any minimum capacity was required or not. He denied the suggestion that he was deliberately showing ignorance about minimum capacity as there was no such requirement of minimum existing capacity of an EUP for allocation of coal block.
23.2.17 In response to the question as to whether he could point out from the record of the case any guideline/office order issued by the Ministry of Coal, Ministry of Steel or any State Government wherein any minimum criteria qua existing capacity of an EUP was mentioned, PW- 40 replied that no minimum or maximum criteria for existing capacity of an EUP was there but, there were certain guidelines issued by Ministry of Steel which were regulating categorization of applicant companies based on the capacity of an EUP. In response to the suggestion that the date of commissioning of plant and date of commencement of commercial production were the two different terms as the date of commissioning of plant denoted that the installation was complete and commercial production would start only after permission to operate the plant was obtained from the competent authority, PW-40 replied that according to him, the consent to operate was required to start commercial production and the date of commencement of commercial CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 113 of 271 production was to be regarded as date of commissioning of the plant.
23.2.18 PW-40 deposed that during investigation the information about land mentioned in the TEFR was got separately verified but he did not remember as to whether he had considered the other contents of TEFR as correct. He also admitted that apart from DRI plant, there were other main production units which were also proposed in the expansion plan as mentioned in the TEFR. In response to a question as to whether Ministry of Coal had allocated the coal block to SKS (A-1) on the recommendation/categorization of the Ministry of Steel for its proposed expansion of sponge iron plant of 0.330 MTPA for its ultimate plant of 0.600 MTPA, he replied that Ministry of Coal had allocated the coal block to the company for its specified End Use Project in its application.
23.2.19 Upon being shown Ex. P-192/PW-16 (Colly.), part of D-27, from page 830 to 855, PW-40 admitted that Ministry of Steel had considered for categorization the proposed expansion of 0.330 MTPA (3X350 TPD) and existing plant of 0.27 MTPA for allocation of coal block to SKS (A-1). However, it was also mentioned that the proposed expansion was to be done by 31.12.2008. In response to the question as to whether he had collected any material during investigation as to how much land was required for installation of 3X350 TPD Kilns for the expansion of existing plant of SKS (A-1), PW-40 replied that witnesses from Korus Engineering Solutions Pvt. Ltd. who had prepared TEFR for company had told that for 0.6 MTPA Integrated Steel Plant of company 300 acres land was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 114 of 271 required and for 1.1 MTPA Integrated Steel Plant of company as mentioned in the application, total requirement of land was 500 acres. However, no query was made about land required for establishing 3X350 TPD Kilns.
23.2.20 As per his version, though no minimum area of land was required but, land was an important aspect as per the guidelines to assess the preparedness of an applicant company. PW-40 denied the suggestion that the land in possession of an applicant company was relevant only in cases where the company was proposing to set up a new plant and not where it was proposing expansion of an existing plant. PW-40 admitted that EUP of SKS (A-1) was for Integrated Steel Plant and it was not a UMPP.
23.2.21 PW-40 admitted that as per the Minutes of Meeting dated 03.07.2008 [Ex. P-231/PW-17 (Colly.), D-24 at page 872 to 929] the decision of the screening committee was unanimous and no member had given any dissenting opinion with regard to the allocation of the Vijay Central Coal Block to SKS (A-1) and other companies. PW-40 denied the suggestion that SKS (A-1) had correctly calculated its networth or correctly disclosed about existing capacity of its EUP in the application and feedback form or that the networth, possession of land and existing/proposed capacity of the EUP were not a criteria for consideration by the Screening Committee for the purpose of allocation of Coal Block or that there was no misrepresentation by SKS on account of land, networth, installed capacity or environment clearances.
23.2.22 PW-40 admitted that M/s. Ind Synergy Ltd. was allotted Behraband North East Coal block, M/s Vini Iron CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 115 of 271 and Steel Udyog Ltd. was allotted Rajhara North coal block in Jharkhand, M/s Contisteel Ltd. was allotted Hurilong coal block in Jharkhand, M/s IST Steel and Power was allotted Khappa Dahegaon / Makardhokra coal block in Maharashtra, M/s. AMR Iron and Steel Ltd. was allotted Bander coal block in Maharashtra, M/s. Topworth Steel Pvt. Ltd. was allotted Rajgamar Dipside coal block in Chhattisgarh, M/s Rathi Udyog Ltd. was allotted Kesla North block in Chhattisgarh, M/s. Electrotherm (India) Ltd. was allotted Bhaskarpara block in Chhattisgarh by the 36th Screening Committee.
23.2.23 PW-40 further admitted the suggestion that as per the respective applications of following companies (applicant's who were allocated other coal blocks by 36th Screening Committee), their networth as on 31.0.3.2026 were as under :
S.No Name of the company Networth
1. M/s. Ind Synergy Ltd. Rs. 118 Crores
2. M/s. Vini Iron and Steel Udyog Ltd Rs. 85.79 Crores
3. M/s. Contisteel Ltd. Rs. 44.14 Crores
4. M/s. IST Steel and Power not mentioned - newly
incorporated company
5. M/s. AMR Iron and Steel Ltd Rs. 1.96 Crores
6. M/s. Topworth Steel Pvt. Ltd. Rs. 66 Crores (approx.)
7. M/s Rathi Udyog Ltd. Rs. 68.54 Crores
8. M/s. Electrotherm (India) Ltd. Rs. 73 Crores
23.2.24 PW-40 further deposed that he did not
remember if letter dated 11.12.2007 (Ex. P-154/PW-7, D-
219) was processed in any file of Ministry of Coal or not. In response to the question if there was any file noting or any noting on the letter dated 11.12.2007 showing that the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 116 of 271 letter was to be put up before the Screening Committee, he replied that there was no such noting on said letter but, there were some markings showing that letter was dealt with by officials of Ministry of Coal.
23.2.25 In his cross-examination on behalf of A-5, PW-40 in response to the question as to whether it was correct that whenever any letter was processed in the Ministry of Coal, the same used to be kept in the relevant file with a file noting in that regard, he replied that the letter was used to be put in relevant file but it was not always necessary that file noting was made because, many a times, noting is made on the letter itself.
23.2.26 PW-40 feigned ignorance if he had specifically asked members of the Screening Committee who attended the meeting on 07.02.2008, as to whether they were aware during the Screening Committee meeting that Sudhir Kumar Sahay was brother of Sh. Subodh Kant Sahai or that if any such member had informed to have been either contacted or influenced by Subodh Kant Sahai (PW-
31) or Sudhir Kumar Sahay (A-5) for purposes of allocation of coal block to SKS (A-1) or that they had received or seen said letter dated 11.12.2007 Ex. P-154/PW-7 (D-219).
23.2.27 PW-40 deposed that he did not remember if there was any guideline or requirement of Ministry of Coal that any particular person connected to the company could only attend the Screening Committee meeting. In response to the question if there was no restriction under the Companies Act that only a person on the board of the company could use the designation "Director" , he (IO/Pw-
40) replied that as per his understanding, the only the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 117 of 271 persons who were in Board of Directors could use the said designation.
23.2.28 PW-40 denied the suggestion that A-5 Sudhir Kumar Sahay was a designated Director in SKS (A-1) for raw material or that he was responsible for coal handling on behalf of the company or that in that regard, the company (A-1) had filed affidavits before Hon'ble High Court in WP(C) No. 6449/2008 (Ex. P-279/PW-17 (Colly.)) and WP (C) No. 7135/2008 (Ex. P-282/PW-17 (Colly.)), which was filed about four years before the Preliminary Enquiry was registered in respect of coal block allocation matters or that said aspect had been intentionally ignored by him in the investigation or that, he had intentionally not made said petitions.
23.2.29 In his cross-examination on behalf of A-4, in response to a question that the application form and feedback form were prepared at Mumbai office of the company, he replied that drafts were prepared at Mumbai office but finalized at Delhi office and signed by A-4 Amrit Singh. PW-40 denied the suggestion that A-4 Amrit Singh had signed said documents only as an employee of A-1 under the instructions and directions of the Directors.
N. Others 24.1.1 PW-20 is Sh. Piyush Goyal. As per his
version, in the year 2015, he was posted as Technical Director, NIC at New Delhi. He proved his letter dated 18.09.2015 (D-221) through which he had supplied the certified copy of the advertisement uploaded on the website of Ministry of Coal on 06.11.2006 to CBI and and its supporting certificate under Section 65-B of the Indian CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 118 of 271 Evidence Act in support thereof as Ex. P-267/PW-20 (Colly.).
24.2.1 PW-21 is Sh. Rakesh Kumar Sahu. As per his version, in the year 2015, he was posted as Registrar of Companies-cum-Official Liquidator, Chhattisgarh at Bilaspur and during said period, vide his letter dated 09.04.2015 (D-234), he had provided certified copy of Certificate of Incorporation of Shree Krishna Structures Pvt. Ltd., dated 21.04.1995, certified copy of Form 18 under the Companies Act of the abovesaid company and Register of Directors as per MCA-21 record dated 07.04.2015 to the CBI and the letter alongwith documents were exhibited as Ex. P- 268/PW-21 (Colly.).
24.2.2 In his cross-examination on behalf of A-3 Deepak Gupta, he deposed that no certificate u/s 65-B of Indian Evidence Act was provided with the downloaded copies given to the IO. He volunteered that the documents are admissible as per the provisions of Sec. 397 & 399 of the Companies Act. A-5 had adopted the cross-examination done on behalf of A-3. A-1, A-2 and A-4 had not preferred to cross-examine this witness.
Statement of Accused under Section 313 Cr.P.C
25. After conclusion of prosecution evidence, statement of all the accused persons were recorded under Section 313 CrPC wherein, all the incriminating evidence, which had come on record against them during trial, was put to them but they all denied it to be wrong and incorrect. Accused specifically denied any misrepresentation of facts and figures as attributed to them by CBI in respect of the information furnished in the application form dated 12.01.2007 (D-5) or feedback form dated 07.02.2008 (D-
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 119 of 271
29), as well as any fraudulent or dishonest intention on their part to cheat the Screening Committee or the Ministry of Coal as alleged against them. All the accused pleaded their innocence by submitting that they have been falsely implicated by the CBI in the instant case simply on the basis of presumptions and assumptions without any concrete evidence.
26. Liberty was given to the accused persons to file their written statement under Section 313(5) Cr.P.C. All the accused filed their statement under Section 313(5) Cr.P.C. In their respective statements under Section 313/ 313(5) Cr.P.C., the accused came up with the following common defence pleas in respect of alleged misinformation contained in the application dated 12.01.2007 (D-5) and Feedback form dated 07.02.2008 (D-29) :-
Defence plea in respect of Networth and Investment
1. That the information in the application form dated 12.01.2007 in relation to networth and investment were based on the audited balance sheets and the books of accounts of the SKS/A-1, which were duly annexed with said application. Even the net-worth calculated by the prosecution is also based on the figures given in the annual reports of A-1, which are nowhere alleged to be false even by the prosecution.
2. That PW-3, Sh. Virendra Kumar Jain, from whom the investigating officer got calculated the net-worth of SKS/A-1 is not an expert witness in terms of Section 45 of the Indian Evidence Act and his report dated 08.01.2015 Ex. P- 144/PW-3 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 120 of 271 (D-166) is an incorrect report as the same is based on a wrong formula which was applicable only for UMPP projects envisaged for establishment of 4000 MW power projects whereas, the application of SKS/A-1 was for allocation of coal block for use in its EUP sponge iron plant at Siltara. Even as per the version of PW-3, Share application money can be added to equity, if the same is non-refundable.
3. That the annual reports of SKS/A-1 for 2004-05 to 2008-09, also show that from time to time, SKS/A-1 had issued/allotted equity share capital out of share application money which had become NIL in the year 2008-09, but that aspect was never investigated or taken note of by the IO/PW-40.
4. That no criteria or guidelines were issued by the Ministry of Coal or the Screening Committee prescribing any minimum threshold of net-worth or investment of the applicant companies for them to become eligible for applying for allocation of captive coal block which is also clear from the fact that various companies with lesser net-worth than the net-worth of A-1, had been allotted coal blocks by the Screening Committee. Further, no specific formula/method was prescribed for calculating the net-worth of an applicant company.
5. That the prosecution has failed to consider the Office Memorandum dated CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 121 of 271 30.11.2010 Ex. P-146/PW-3, issued by Ministry of Heavy Industries and Public Enterprise which provided the meaning of net-worth as paid up capital, share application money pending allotment and reserves less accumulated losses and deferred revenue expenditure to the extent not written off.
6. Even in the project report, which was prepared by independent financial expert, the net- worth was calculated on the basis of figures given in the annual reports and same formula was adopted while calculating the net-worth as was adopted by SKS/A-1. Therefore, the calculation of networth as mentioned in the application form and the feedback form was made with a bonafide belief that the formula used for calculating networth is correct.
7. That since no minimum criteria was fixed for net-worth or investment nor any specific formula/method was prescribed for calculating the same, the said parameters cannot be said to be the determinative factors so as to lead to any deception or consequential inducement of Screening Committee or Ministry of Coal for allotment of Vijay Central Coal Block in favour of SKS/A-1.
8. That the difference between the investment calculated by the A-1 company and that done by the IO is only because of the inclusion/exclusion of the 'current assets'. Since CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 122 of 271 the aspect of investment made by the applicants was important for determining their preparedness for the project therefore, the funds invested by SKS/A-1 into the project was to include both the working capital and current assets of SKS/A-1 as well as of its group companies and calculation of investment was accordingly made under said bonafide belief.
9. That in view of the fact that annual reports of SKS/A-1 submitted with the ROC were duly accepted, the accused company/A-1 and its directors were under bonafide belief that the facts and figures given in said reports were in accordance with law. Furthermore, said annual reports were filed with the application dated 12.01.2007 and available with Ministry of Coal/Screening Committee for their perusal and verification.
Defence plea in respect of EUP Capacity
10. That in column 11 of the application dated 12.01.2007, it was indicated that the End Use Project of the SKS/A-1 was the Sponge iron plant of 2.7 LTPA i.e 0.27 MTPA at Siltara, Raipur and as on date of submitting said application, the A-1 company did have the installed capacity for sponge iron of 0.27 MTPA and the same is clear from the letter dated 25.11.2006 of Surender Singh, GM, SKS (A-1), Mark P-138/PW-1, vide which, CECB was requested for consent to operate the 4th kiln of its sponge iron plant, which was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 123 of 271 stated to be ready for trial commissioning.
11. That the consent to operate is required only to commence the commercial production in the plant and same is obtained only after the plant is installed and ready for commissioning and therefore, lack of consent to operate does not have any bearing on the fact that the SKS/A-1 had a sponge iron plant with installed capacity of 0.27 MTPA on the date of application.
12. That sponge iron production is an excisable item and chargeable to central excise duty under the central excise tariff and as per ER- 7 return dated 31.03.2008 Ex. P-148/PW-4 (Colly), (D-179), the 4th kiln of sponge iron plant of A-1 was installed on 26.07.2006. Further, as per the Central Excise Rules, officers of the Central Excise Department are authorized to carry out general inspection, scrutiny and verification of documents of a unit registered within their jurisdiction and there was nothing in the records of the Excise Department of the area that the information provided by the A-1 company was incorrect.
13. That "the date of commissioning of plant" and "date of commencement of commercial production" are different terms. The date of commissioning of plant denotes that the installation is complete and commercial production starts only after permission to operate the plant is obtained from the competent authority.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 124 of 271
14. That there was no minimum threshold even for the installed capacity of the applicant companies fixed by the Ministry of Coal or Screening Committee. Even as per the guidelines of Ministry of Steel, which were never in public domain and were only meant for their internal purposes, in the Category V(b) where the name of SKS/A-1 was mentioned, the existing capacity of the plant may fall anywhere between 0.10 MTPA to 0.29 MTPA and even PW-16 has stated so in his examination recorded before the court.
15. That even the version of PW-1, who admitted to have filed a complaint dated 05.1.2006 P-137/P-1 against A-1 for having expanded the work by constructing 4th kiln as well as by making the plant operational without obtaining the consent from CECB, makes it clear that CECB was well aware of the expansion of the EUP plant of SKS/A-1.
16. That SKS/A-1, vide letter dated 25.08.2006 Ex.P-136/PW-1(D-190 page no. 794-
798) had obtained clearance from Ministry of Environment and Forest in respect its 0.27 MTPA capacity sponge iron plant which included all 04 kilns of EUP and only after obtaining said clearance and production trial, the application for grant of consent to operate was submitted by SKS/A-1 but, due to space constraint in the application format, the information regarding each CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 125 of 271 clearance received for each kiln could not be furnished by SKS/A-1.
Defence plea in respect of possession of Land
17. That the quantum of land in possession of an applicant company was relevant and significant only to the extent of the applicant's requirement for setting up the proposed End Use Project (EUP). The information with respect to land given in the application form was given in light of the MoU dated 16.08.2004 and 6.10.2006 Ex.P- 277/PW-25(Colly.)(part of D-211) entered into with the State Govt of Chhattisgarh whereby, the State Govt had agreed to facilitate all necessary assistance in procuring optimum land to set up a sponge iron and steel plant within 02 years.
18. That the net-worth, investment or possession of land or existing/proposed capacity of the EUP, were never the determinative factor for the Ministry of Coal/Screening Committee/Ministry of Steel/State Government of Chhattisgarh for allocation of coal block to SKS/A-1 company.
19. That as on the date of application, A-
1 was having more than 300 acres of land in possession and as on the date of feedback form it had more than 500 acres of land for its project. However, the process of acquiring land used to take minimum 3-4 months time after execution of agreement to sell with the farmers and in that regard, the affidavits of the brokers were provided to the IO, who for reasons best known to him, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 126 of 271 chose not to examine them as witness in this case.
Defence plea in respect of Environmental Clearance
20. That the prosecution has falsely conflated the terms 'Environmental Clearance' received by the SKS/A-1 from MoEF and 'consent to operate' received from CECB just to mislead the Court. The consent to operate is required only to commence the commercial operation of the plant and the same is limited for that purpose only.
21. That the applicants company including SKS/A-1 were never asked for kiln-wise details. Further, at no point of time SKS/A-1 claimed to have obtained all clearances for the purpose of its EUP and instead it mentioned in the application "all clearances almost obtained". Furthermore, A-1 had applied for consent to operate the 4th Kiln since 26.11.2006, i.e. even prior to the date of application form and SKS/A-1 was under the impression that same would be received any time soon.
Additional specific pleas taken by accused Sh. Deepak Gupta (A-3)
22. A-3 came up with the plea that he had no role in the preparation or submission of the application and feedback forms, nor did he attend any of the Screening Committee meetings relating to the allocation of the Vijay Central coal block. At the relevant time, A-3 was looking after the production and marketing work of the company (A-1) at Raipur. It was further stated that CBI has done selective, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 127 of 271 impartial and incomplete investigation to prejudice A-3 and same is evident from the fact that the letter dated 10.12.2007, which is alleged to be signed by A-3 was never sent to CFSL for comparison of his signature.
Additional specific pleas taken by accused Sh. Amrit Singh (A-4)
23. A-4 came up with the plea that he was not involved in the preparation of the application and the feedback form, which he had signed in good faith as per the instruction of his employer Sh. Anil Gupta (A-2), the Managing Director of SKS (A-1). He (A-4) stated that he (A-4) was merely an employee of SKS/A-1 and was working and looking after the affairs of the company at its Delhi office. He completely denied his role in any decision making of the company (A-1) or in any presentation made before the Screening Committee.
Additional specific pleas taken by accused Sudhir Kumar Sahay (A-5)
24. A-5 admitted the fact that he was never on the Board of Directors of the SKS/A-1 and he was merely the "Designated Director" of SKS/A-1 and was looking after coal handling activities of the company (A-1) and being a Designated Director of SKS (A-1), he was authorized by the Company to sign the letter dated 11.12.2007 Ex. P- 154/PW-7 (D-219), which was though never dealt with in any file related to allocation of Vijay Central Coal Block nor it was taken into consideration by the Ministry of Coal or Screening CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 128 of 271 committee for the allocation of Vijay Central Coal Block in favour of A-1 and same is evident from the reply affidavit dated 16.07.2009 and 08.05.2009 of PW-17 filed on behalf of Union of India in the Writ petition no. 6449/2008 and 7135/ 2008 respectively.
25. The meeting dated 07.02.2008 was attended by him with the MD Anil Gupta (A-2), in the capacity of a designated Director of A-1, but no misrepresentation was made to deceive anyone. The presentation in said meeting dated 07.02.2008 was made by A-2 and the feedback form which was filed thereafter, was signed by A-4 and he (A-5) simply had accompanied them as designated Director of the company.
Defence Evidence
27. In defence, only accused company/A-1 examined one witness Sh. Rakesh Gunvantray Mehta as DW1. DW1 is a Chartered Accountant and his sole proprietorship firm namely M/s R.G. Mehta & Company was the Statutory Auditor of SKS (A-1) and audited their books of account for the financial years from 2002-2003 to 2007- 08 and also prepared audit report for said financial years. After going through the annual reports Ex. P-81/2 (Colly.) for the year 2004-05, Ex. P-81/3 (Colly.) for the year 2005- 06 and Ex. P-81/4 (Colly.) for the year 2006-07, DW-1 deposed that his firm had prepared said audit reports for the said financial years as per the guidelines/accounting standards issued by the Institute of Chartered Accountants of India and as per the guidelines of relevant period, the net CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 129 of 271 worth included share capital, share application money (pending allotment), reserves and surplus, share premium account and deferred tax liability. As per the version of DW- 1, share application money falls under the heading of 'share capital' and it was shown under the same head in the balance sheet for the financial year 2004-05 [Ex. P-81/2 (Colly.)] and 2005-06 [Ex. P-81/3 (Colly.)].
27.1 DW-1 deposed that on receipt of notice dated 19.03.2015 of Inspector Bodh Raj Hans, Ex.D-1/DW-1 (OSR) in connection with investigation of the RC 219 2014 (E) 0017, he (DW-1) had appeared before him (IO) on 10.04.2015 and was examined by CBI officials. In order to show his visit to Delhi on said date DW-1 exhibited copy of his boarding pass as Ex. D-2/DW-1 (OSR). He further deposed that during examination by the CBI officials, he had explained about the calculation of networth of the A-1 company and on asking he calculated the networth of the A- 1 company to be Rs. 124.51 Crores for the year 2004-05.
27.2 In his cross-examination by Ld. Sr. PP Sh. V.K. Pathak for CBI, in response to the question regarding paid up capital, he (DW-1) replied that it was the capital where money was received and shares were issued. He admitted that share paid up capital was the aggregate amount of money credited/received as paid up which is equivalent to amount credited/received as paid up in respect of shares issued. He denied the suggestion that share application money pending allotment was a liability of the company.
27.3 He further deposed that as per Companies Act, 2013, 'share application money' was not considered for the purpose of 'share capital' and for that reason, it was not CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 130 of 271 considered for calculation of networth. He admitted that 'share application money pending allotment' was never part of 'paid up share capital' and deposed that it fell under the heading of 'share capital'.
Final Arguments
28. Arguments were advanced at length by Ld. Senior Counsel Sh.Pawan Narang assisted by Advocates Sh. Atul Shanker Mathur, Sh. Prabal Mehrotra and Sh. Umang Katariya for A-1 and A-2; Sh.Yuganshu Sharma and Sh. Sarthak Vashisth, Ld. Counsel for A-3; Sh. Arvind Verma, Ld. Counsel for A-4 and Sh. Neeraj Chaudhari, Ld Counsel for A-5. On behalf of CBI, the arguments were addressed by Ld. Sr.PP, Sh.V.K.Pathak. Written submissions were also filed on behalf of CBI as well as the accused persons. I have given my thoughtful consideration to the rival contentions raised from both the sides and also carefully perused the entire record including the written submissions and the supporting judgments filed on record by the parties.
Submissions on behalf of CBI/Prosecution
29. Sh. V.K.Pathak, Ld. Sr. PP for CBI assisted by the IO/Dy. SP Sh. Manish Raj Atrey has argued that CBI has been able to prove its case beyond any reasonable doubt. He has contended that through cogent and credible evidence which has been duly proved on record, CBI has been able to successfully prove the allegations against all the accused persons beyond reasonable doubts. Following are the broad arguments advanced on behalf of CBI:-
1. It was argued that in the 7 th Meeting of the Energy Co-ordination Committee held on 19.07.2006 under the Chairmanship of Prime CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 131 of 271 Minister for discussing various issues in the coal sector, it was decided that the coal Ministry will invite fresh applications for allocation of coal blocks and it should be clearly mentioned in the application that the preference will be accorded to power and steel sectors and within the power sector, priority should be accorded to the projects with more than 500 MW capacity and for steel sector, the plants with more than 1 MTPA capacity should be given preference. In this regard he referred to document Ex.P-209/PW-17 (D-33 page
38).
2. On the line of said decisions taken by Energy Co-ordination Committee, the advertisment published by the Ministry of Coal for inviting application for allocation of 38 coal block for captive coal mining duly incorporated the aforementioned preferences for the power sector plant of more than 500MV capacity and for steel plant of more than 1 MTPA capacity. In this regard, Ld. Sr.PP drew attention to the guidelines for allocation of captive coal blocks, which are part of the said advertisement Ex.P-205/PW-17 (D-34).
3. It was argued that the aforementioned guidelines clearly spelt out the parameters, which were required to be taken into consideration by the Screening Committe while deciding the inter se priority for allocation of block among competing applicants, which inter alia included status (stage) level of progress and state CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 132 of 271 of preparedness of the projects, networth of the applicant company, production capacity of the proposed EUP, track report and financial strength of the company and recommendation of the concerned State government and concerned administrative ministries.
4. It was argued that in the light of aforementioned guidelines, it was incumbent upon the applicants including SKS (A-1) to make true disclosure of the requisite facts and figures to provide authentic information in the application as well as in the feedback form. Whereas, the accused herein in conspiracy with each other presented false information regarding networth, investment, land availability, plant capacity and clearance with a dishonest intention to induce the Screening Committee to recommend its name for allocation of Vijay Central Coal Block and thereby, induced both the Screening Committee and as a consequence thereof, induced Ministry of Coal for issuance of allocation letter dated 01.11.2011 in favour of SKS (A-1) on the basis of said recommendation.
5. It has been argued by Ld. Sr.PP that based upon the conclusive evidence led by the prosecution, it is evident that the accused persons not only had a reason to believe but actually knew that the claims made by them qua the networth, investment, land clearnace and actual production capacity were false. It is also clear that the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 133 of 271 accused persons knowing fully well that the said facts were false represented them to be true and thus, misled Screening Committee and thereby, Ministry of Steel, Ministry of Coal, Government of India to believe in the existence of said facts as true and thereby, inducing it to part with the important nationalized natural resources of the country i.e. coal.
6. It has been further argued that by way of said misrepresentations the accused persons also induced Screening Committee and thereby Ministry of Coal, Government of India to part with much higher quantity of coal in their favour than was warranted, if at all allocation of any coal block was to be made. He had further contended that based upon the cogent and uncontroverted evidence led by the prosecution, the respective charges against all the accused persons have been duly proved and consequently, they are liable to be convicted for the same.
7. Ld. Sr. PP has argued that there is ample evidence on record to establish the charges of criminal conspiracy and cheating against the accused persons and he highlighted the relevant testimonies and documents and submitted that through said documents and testimonies, CBI has successfully established that accused persons made various false claims in their application, feedback form and presentation made before the Screening Committee. He submitted that the said CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 134 of 271 series of misrepresentations were made with an intention to deceive the Screening Committee and Ministry of Coal to dishonestly and fraudulently secure the recommendation and the allocation letter for Vijay Central Captive Coal Block.
8. He further argued that through cogent and credible evidence, CBI has been able to prove all the essential ingredients of the offence of cheating and criminal conspiracy against all the accused. He drew attention of the court to the testimony of various prosecution witnesses more specifically, Sh.Virendra Kumar Jain, CA from PFC (PW-3), Dr. Raj Singh from Ministry of Corporate Affairs (PW-5), Sh. Nihar Ranjan Dash, from Ministry of Steel (PW-16) Sh. V.S. Rana from Ministry of Coal (PW-17), Sh. Rohit Jaiswal from SKS/A-1 (PW-7), Sh. Anoop Kumar Behre from CECB (PW-1), Sh. H.G. Aggarwal from Korus Engineering Solutions Pvt. Ltd (PW-12), Sh. Mukesh Verma from SKS/A-1 (PW-36) and IO/Dy. SP Sh. Manish Raj Atrey (PW-40). Through all said witnesses, CBI is said to have established on record the dishonest misrepresentation on the part of accused persons to deceive Ministry of Coal, Government of India for securing allocation of Vijay Central Captive Coal Block.
9. Ld. Sr.PP has also relied upon the judgments titled as Deependra Chauhan v. Phool Kumari Chauhan (Civil Revision No.12 of 2024)(Allahabad High Court); Teq Green CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 135 of 271
Power XIII Private Ltd.vs REMC Limited
{WP(C) 17599/2022 High Court of Delhi};
Ramesh Chand (D) Thr. LRs vs. Suresh Chand and anr. (Civil Appeal No.6377 of 2012 Supreme Court) and Ishwarlal Girdharlal Parekh v. State of Maharahtra and ors 1969 AIR 40 in support of his above arguments.
Submissions on behalf of accused
30. The arguments on behalf of accused persons are more or less on the lines of their respective written statements filed under Section 313(5) Cr.P.C, which have already been noted in detail in the preceding paras. Hence, in order to avoid repetition and for brevity sake, those points of arguments are not mentioned again. On the issue of alleged misrepresentation and valuable security, the arguments advanced by Ld. Senior Counsel Sh. Pawan Narang for A-1 and A-2, have been adopted on behalf of accused no. 3,4 and 5. The broad common arguments advanced by Ld. Senior Counsel Sh. Pawan Narang are as under :-
1. That no evidence has been adduced on record in the form of testimony of any of the members of the Screening Committee or in any other manner to suggest that the alleged misinformation of facts and figures as attributed to accused by CBI ever formed the basis for the alleged inducement of the Screening Committee in recommending Vijay Central Coal Block to SKS (A-1).
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 136 of 271
2. Neither in guidelines nor in the advertisement nor in the extant policy, there was any minimum threshold of these parameters of networth, investment, land or production capacity for deciding the eligibility of the applicant. Rather, there were multiple instances where coal blocks were allocated to companies with far less networth, investment, land and production capacity than that of SKS (A-1) as attributed to it by CBI. In view thereof, there was no ulterior reason or motive for SKS (A-1) to inflate said figures. Thus, the allegation of the prosecution that the said misrepresentations were made dishonestly with an intention to gain priority over other deserving applicants is unfounded.
3. That the information in the application (D-5) and feedback form (D-29), was furnished on behalf of SKS (A-1) for allocation of Vijay Central Coal Block for captive mining for meeting the requirement of its EUP at Siltara, Chattisgarh. Whereas, the mining rights in said coal block were given to Coal India Limited and not to SKS (A-1). Therefore, any alleged misinformation in the said documents remained inconsequential as it did not lead to any inducement of the Screening Committee in arriving at its decision in recommending the name of SKS (A-1) for allocation of Vijay Central Coal Block.
4. Further, there is no evidence on record to suggest that the letter dated 05.02.2008 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 137 of 271 Ex. P-309/PW-28 (D-224) of Sh. Subodh Kant Shahai, the brother of A-5 was instrumental in decision of Screening Committee to recommend Vijay Central Coal Block in favour of SKS (A-1). There is no evidence on record to manifest that the said letter was even placed before the Screening Committee for consideration. Therefore, the said letter was irrelevant and inconsequential in the recommendation of Vijay Central Coal Block to SKS (A-1) so as to impute any conspiracy on the part of A-5.
5. That no valuable security in the nature of a bankable document has accrued to the SKS (A-1) so as to attract the implications of section 420 of IPC. Because, neither any mining rights were created in favour of SKS (A-1) nor any offer letter was given to the A-1 to choose the mode of allocation. Vide allocation letter dated 01.11.2011, the Option-III was thrusted upon SKS/A-1 and the same was basically a linkage.
6. It is clear that allocation to SKS (A-
1) of Vijay Central Coal Block was scrutinized multiple times and approved by the Hon'ble High Court of Delhi while adjudicating writ petitions no. 6449/2009 and 7135/2009 filed by M/s Prakash Industries challenging the joint recommendations, wherein, no fault was found with SKS (A-1). The joint allocation letter dated 01.11.2011, was issued pursuant to the recommendation made by the Screening Committee meetings held in 2011, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 138 of 271 therefore, the allegations pertaining to year 2007 contained in the charges framed are not sustainable and accused are liable to be acquitted.
7. The reliability of the prosecution's expert evidence (PW-3) has been vehemently challenged on the ground that CBI vide letter dated 19.12.2014 (D-165) sought an expert from Power Finance Corporation who was conversant with the net worth calculation methodology used for UMPP / Ministry of Power bid evaluations, even though A-1's application was related to an integrated sponge iron plant and not an ultra-mega power project. According to the defence, this makes the prosecution's approach inapplicable to the facts of the present case.
8. The expert witness PW-3 merely excludes share application money, but does not satisfactorily explain why that exclusion was compulsory in the coal block allocation context. As such, the prosecution's figure of ₹146.084 crores for networth is not proof of falsity, but only the result of applying a different and inapplicable methodology resulting in a figure of networth lower than what the company SKS (A-1) calculated from the same annual reports used by prosecution witness Sh.V.K.Jain/PW-3.
9. That the figures disclosed by SKS (A-
1) were not invented or created outside the books of account, they were derived from the company's audited balance sheets/annual reports, which were CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 139 of 271 collected during investigation and also forms part of the record of the present case. The prosecution has not alleged, much less proved, that said audited financial statements were forged, manipulated, backdated, or falsely prepared. Therefore, once the figures taken for calculating the networth are emanating from the audited financial statements maintained in the ordinary course of business, the very foundation for alleging an intention to cheat vanishes.
10. That in absence of a notified or prescribed formula, SKS (A-1) could not be faulted for adopting a recognised accounting approach based on its audited balance sheet and statutory auditor's understanding. A subsequent investigative preference for a different formula cannot retrospectively make SKS/A-1's disclosure dishonest or fraudulent.
11. That even assuming that there was a difference in calculation, the prosecution has failed to establish that such difference induced the allocation decision of Screening Committee/Ministry of Coal. Further, to show inducement attributable to SKS (A-1) under Section 420 of IPC, there is no evidence on record to show that if the figure of networth given by SKS (A-1) was false to the knowledge of accused persons.
12. In 'CIT, Madras v Lucas TVS Ltd.', (2001) 10 SCC 544, the Hon'ble Supreme Court CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 140 of 271 held that amounts shown as Share Application Money pending allotment and used to set up new plants are capital, not debt, and treated them as part of capital for Section 80-J, Wealth Tax Act. In 'Winner Estates (P) Ltd. v DCIT, 2004 SCC OnLine ITAT 58', ITAT treated Share Application Money pending allotment, where non-refundable and intended to be converted to equity, as part of capital. In 'Teq Green Power XIII Private Limited v Remc Limited', W.P.(C) No. 17599 of 2022, the Hon'ble High Court of Delhi held that preference shares can be included in the definition of networth.
13. The Hon'ble Supreme Court has repeatedly held that where more than one legitimate method of valuation exists, adoption of one in preference to another cannot, by itself, be treated as fraudulent. The judgment in 'Commissioner of Gift Tax v. Ambalal Sarabhai', (1988) Supp SCC 115, recognises that where two or more alternative modes of valuation are equally valid, parties may adopt any one, such a choice is not evidence of wrongdoing.
14. In 'Hriday Ranjan Prasad Verma v. State of Bihar', (2000) 4 SCC 168), the Hon'ble Supreme Court held that cheating requires fraudulent or dishonest intention at the time of making the representation. Here, there is no material suggesting that the accused persons knew that the information furnished on the basis of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 141 of 271 audited financial statement of accused company were false or that they furnished it despite such knowledge to deceive Ministry of Coal.
15. The crux of the prosecution case is that the prosecution treated only land covered by registered sale deeds as land "acquired". In other words, the prosecution's case appears to proceed on the footing that unless title had passed by way of registered sale deeds, SKS (A-1) could not have claimed such land as acquired. Therefore, according to the prosecution, there was a discrepancy between the land claimed by SKS (A-
1) in the application/feedback forms and the land which, as per the prosecution's calculation, was actually owned by SKS (A-1) on the relevant dates.
16. That in respect of controversy pertaining to land claim, the central legal issue is whether, in the context of the application process, land could be treated as acquired when A-1 had already entered into agreements to sell, paid consideration, and obtained substantial control, even though formal sale deeds were executed later.
17. That "acquisition" is a broader concept than bare registered ownership. Acquisition may include substantial control, beneficial interest, or rights arising from an agreement to sell coupled with payment, and need not be confined only to transfer of title by registered sale deed. Once agreements to sell had CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 142 of 271 been executed and consideration had been paid, A- 1 had acquired a legally recognisable interest in the land and even Section 53-A of Transfer of Property Act, 1882 protects such possessory title of the vendee. Hence, on that basis, disclosure of land acquired was bona fide and legally sustainable.
18. The defence relies on the Environmental Clearance letter dated 25.08.2006 and TEFR to contend that SKS (A-1) required only about 62.5 hectares i.e. 154.5 acres for running the plant with the proposed expansion, whereas it had land far in excess of that requirement. Therefore, even if the prosecution's narrower calculation were accepted, the alleged discrepancy did not impair SKD/A-1's preparedness or ability to set up/operate the end-use project.
19. That the figures to the queries regarding land were disclosed on a bona fide understanding of "acquired land", supported by agreements to sell, payments, subsequent execution of sale deeds and actual project use. The prosecution has artificially introduced a distinction between the "main plant area" and other lands used for project purposes. It was contended that the application process had required disclosure of land for the end-use project in a composite manner and did not require segregation between the plant site, railway siding, ash dumping area, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 143 of 271 stockyard, township, iron ore crushing plant, or other functional project lands.
20. A-1 was already in possession of the land required for the EUP and therefore, any discrepancy pertaining to surplus land is immaterial. Even otherwise, the requirement of land holding applied only to applicants who were setting up a plant and not to existing EUP like the A-1. That without prejudice, it is submitted that even if it is assumed that there was alleged misrepresentation by the SKS (A-1) qua the acquired land holding, the deficit/ misrepresentation was limited to 10% of the land holding and would not have affected the outcome of the decision of Screening Committee even otherwise.
21. That A-1's disclosure was based not only on the actual land required to set up its EUP but also on its bona fide understanding of "acquired land", including land covered by agreements to sell, payments made, and subsequent execution of sale deeds. There was no prescribed requirement that only land held by registered sale deed could be disclosed. In any event, SKS (A-1) had sufficient land for its end-use project, and the alleged discrepancy was neither material nor decisive for allocation.
22. That the mere fact that the formal Consent to Operate for the 4th kiln was granted on 05.04.2007 does not mean that the 4 th kiln was not CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 144 of 271 already installed or that A-1's installed capacity was not 0.27 MTPA on the application date, when in-fact the Consent to Operate could have been applied only after installation of the kiln. As regard environment clearance, the use of the word "almost" indicates that the disclosure was qualified and not absolute. Therefore, the prosecution is misreading the Application Form by attributing to SKS (A-1) a representation, which it never made.
23. That there was no inducement to either the Ministry of Steel or the Ministry of Coal. The companies having eligible capacity of less than 0.3 MTPA were placed in Category II(A) under the Ministry of Steel guidelines. Therefore, whether SKS's capacity was treated as 0.192 MTPA or 0.27 MTPA, SKS (A-1) would still fall below 0.3 MTPA and A-1 would remain in the same category.
24. In conclusion, the allegation pertaining to EUP capacity qua A-1 does not establish any false representation or dishonest intention. The 4th kiln had already been installed prior to the Application Form, and the claim of 0.27 MTPA is duly supported by contemporaneous records.
25. A-5 was a designated Director of the company, who was assigned to look after raw material activities of the company. No PW has stated that either presence of the A-5 at the 36 th Screening Committee meeting on 07.02.2008 or the A-5's letter dated 11.12.2007 Ex. P-154/PW-7 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 145 of 271 had an effect/influence in the recommendation in favour of coal block to the A-1.
26. That to attract the offence of criminal conspiracy, the meeting of minds is an essential ingredient which is missing in the present case. There is no evidence to show that there was any discussion about the alleged intention to cheat the Ministry of Coal. There is also no evidence to show that any illegal means were conspired to be adopted between any of the accused persons with the alleged intent to cheat the Ministry of coal.
27. As per CBI's owns case, the representative of State Government, who were present in the meeting of the Screening Committee held on 03.07.2007, had supported request for captive coal block of the applicants who had entered into MoU with State Government for establishing EUP in Chhattisgarh. Thus, it is clear that a positive nod from the State Government for recommendation of name of SKS (A-1) had come on account of the fact that SKS (A-1) had already entered into MoU with the State Government.
28. Even Ministry of Steel gave recommendation in favour of SKS (A-1) as its name was indicated at S.No. 107 in the category V
(b), which pertains to companies having existing capacity of less than 0.3 MTPA as its proposed capacity, likely to be commissioned by December, 2010 was worked out to be 0.315 MTPA by the Ministry of Steel.
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29. That the coal block allocations were cancelled for lack of objectivity in the assessment of merits of the applicants, lack of disclosure how inter se priority was fixed and non-transparency of the process. That no illicit gain to SKS (A-1) ever accrued as no mining ever took place nor SKS (A-
1) was supplied with any coal by Coal India Limited, the leader in furtherance to the allocation letter.
Discussion and Analysis of material by the Court
31. Accused is presumed to be innocent till he is proved guilty, is an age old principle of criminal jurisprudence. Suspicion howsoever strong, can never take the place of proof. Thus, all the essential of charge framed, are required to be conclusively proved by the prosecution to allay this presumption of innocence in favour of accused. Evidence is the only way to prove or disprove any fact or circumstance. Documentary evidence and oral testimony are the only ways through which evidence is brought on record. In this case, the prosecution has adduced both the oral and documentary evidence but, the case is primarily based on documentary evidence. The accused faced trial for the following two charges framed against them:-
(i) Charge for substantive offence of cheating punishable under Section 420 IPC; and
(ii) Charge for the offence of criminal conspiracy punishable under Section 120-B IPC r/w Section 420 IPC.
32. It is a settled principle of criminal jurisprudence that the prosecution case has to stand on its own legs and it has to prove its case against the accused CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 147 of 271 beyond any reasonable doubt by leading conclusive evidence. Burden of proving its case exclusively lies upon the prosecution and in order to succeed, it has to discharge the said burden. If the prosecution case appears to be improbable or lacks credibility, the benefit of doubt necessarily goes to the accused.
Undisputed Facts
33. Before culling out the points of determination, it is necessary to first identify the disputed and undisputed facts emerging out of the record. The relevant undisputed/admitted facts which also stand corroborated during the course of trial are delineated as under:-
(1) An advertisement dated 06.11.2006 Ex.P-
205/PW-17 (Colly) (D-34, page Nos.73 to 94 including guidelines) was published by the Ministry of Coal, Government of India for inviting applications in prescribed format for allocation of 38 coal blocks located at different places in India including Vijay Central Coal Block in the State of Chhattisgarh. In response to the said advertisement, total 64 applications from different companies including SKS (A-1) were received in the Ministry of Coal for the said coal block;
(2) In its application dated 12.01.2007 Ex.P-1 (D-5) filed by SKS (A-1) through Sh. Amrit Singh (A-4), it sought allocation of Vijay Central Coal Block, Sendurgarh for its 0.27 MTPA Integrated Steel Plant at Siltara Raipur, Chhattisgarh. The said application was filed along CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 148 of 271 with duly filled prescribed application format and requisite documents.
(3) In the said application form, SKS (A-
1) claimed its networth in the year 2005-2006 as 198.88 crore and Rs.252.99 crore up to 31 st December 2006; land in possession as 300 acres out of required 500 acres of land; and the existing capacity of the sponge iron plant was mentioned as 0.27 MTPA while the proposed capacity was mentioned as 0.33 MTPA. In column no. 24 (ii) of the application, A-1 claimed to have obtained pollution control clearance for its proposed EUP.
(4) In response to the recommendations/views sought by Ministry of Coal from State Government of Chhattisgarh, the State Government did not send any recommendation to the Screening committee for allocation of Coal blocks including Vijay Central Coal Block. Since, SKS was having MOUs dated 16.08.2004 and 10.06.2006 Ex.P-277/PW-25(Colly.)(part of D-211) with the Government of Chhattisgarh for setting up of Steel plant in the State of Chhattisgarh, the Chief Secretary Sh. Shiv Raj Singh and Secretary (Mineral Resource Department) Sh. B.K.thakur, who attended the meeting of the Screening Committee dated 03.07.2008, as representative of State of Chhattisgarh orally put forth the stand of the State Govt. and inter alia supported the request for captive coal block of the applicants, who had entered into MOU with the State CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 149 of 271 Government for establishing EUP in Chhattisgarh. Subsequently, the Government of Chhattisgarh vide letter F.7-13/2005/12(1) dated 4th July, 2008, Ex. P-275/PW-25 (part of D-211) furnished information regarding MOUs executed with the companies shortlisted for recommendations of coal blocks to Ministry of Coal;
(5) In response to the recommendations/views sought by Ministry of Coal from the concerned Administrative Ministry i.e. Ministry of Steel qua the applications related to coal blocks including Vijay Central Coal Block proposed to be used for the prospective Iron & Steel Plant, an Office Memorandum dated 06.12.2007 Ex. P-192/PW-16 (Colly.) (D-27, page no 830) was written by Sh. N.R. Dash, Director, Ministry of Steel to Joint Secretary, Ministry of Coal whereby, Ministry of Steel forwarded its recommendation to Ministry of Coal with two annexures i.e. Annexure-1 and Annexure-2 regarding coking and non-cocking blocks respectively. In Annexure-2 containing recommendation for non-coking block, the name of SKS (A-1) was mentioned at serial no. 107 and it was placed in category V(b), as per the guidelines of Ministry of Steel. The proposed capacity of SKS (A-1) was worked out as 0.315 MTPA as per its norms of 300 days operation.
(6) On 16.11.2007, Ministry of Coal uploaded an Official Memorandum/Notice Ex.P-
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 150 of 271 220/PW-17 (D-23, page 84) on its website for screening proposals relating to captive mining of coal blocks for non-power sector in 36 th meeting of the Screening Committee to be held on 07.12.2007, 08.12.2007, 17.12.2007 and 18.12.2007 whereby, the applicants for all the coal blocks for non-power sector including SKS (A-1) were instructed to give presentations and submit feedback forms as per the feedback format annexed with the said memorandum regarding the latest status of End Use Plant (EUP) for which application for the block had been made.
(7) In response to said memorandum of Ministry of Coal, SKS(A-1) made presentation before 36th Screening Committee on 07.02.2008 and Sh. Anil Gupta (A-2), Sh. Sudhir Kumar Sahay (A-5), Amrit Singh (A-4) and Rohit Jayaswal attended the presentation on behalf of A-1. Sudhir Kumar Sahay (A-5) attended said meeting as Director of SKS (A-1) and Anil Gupta (A-2) made the presentation as MD of SKS (A-1) while the feedback form Ex P-2 (Colly) (D-23) on behalf of A-1 was submitted under the signature of Amrit Singh (A-4), on behalf of the company (A-1).
(8) In the feedback form Ex P-2 (Colly) (D-23), SKS (A-1) claimed its networth as on 31.03.2006 as Rs. 352.89 crore; as on 31.03.2007 as Rs. 468.60 crore; and as on 31.12.2007 as Rs. 524.53 crores.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 151 of 271 (9) During investigation, A-2 vide letter dated 24.09.2014 Ex. P-4 (D-55) handed over to IO 19 volumes of photocopies of sale deeds of 308.52 acres of land as on 12.01.2007 and 439.211 acres of the land as on 07.02.2008, which SKS (A-1), its directors and associated companies were owning as on said date for the purpose of its steel plant at Siltara, Raipur. Since some of said land parcels were lying mortgaged with the banks, photocopies of sale deeds of said land were given to the IO, who got it verified from the concerned banks and Sub- Registrar offices, during the course of investigation.
(10) Sh. Sudhir Kumar Sahay (A-5), vide letter dated 11.12.2007 Ex. P-154/PW-7 to Ex. P- 157/PW-7 (D-219), wrote to Ministry of Coal as Director of SKS (A-1) for allocation of Vijay Central Coal Block in favour of SKS for its existing integrated steel plant at Raipur, Chhattisgarh and also enclosed profile presentation of A-1. Admittedly, Sudhir Kumar Sahay (A-5) was never the director of A-1 as per the records of Registrar of Companies, Mumbai.
(11) Vide letter dated 05.02.2008 addressed to the then Hon'ble Prime Minister Dr. Manmohan Singh, Sh. Subodh Kant Sahai, the brother of A-4, who was the then Hon'ble Minister of State for Food Processing Industries, had made a request for personal intervention in connection with the allocation of two coal blocks applied by CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 152 of 271 SKS for its steel plant in the state of Chhattisgarh and Jharkhand.
(12) Vide PMO ID note dated 06.02.2008 Ex. P-309/PW-28 (Colly.) D-224 (at page no. 1/c), the copy of said letter dated 05.02.2008, alongwith brief note and copy of presentation to the Screening Committee, was sent to Secretary, Ministry of Coal for appropriate action and in reply thereto, Secretary Coal vide OM no.
38039/8/2008-CA-1 dated 31.03.2008, reported to PMO that the Screening Committee in its meetings held on 07/08.12.2007 and 07/08.02.2008 had scrutinized the application on the basis of relative merits of each case and the application of SKS will be considered along with other applicants on merits.
(13) In the final meeting of 36th Screening Committee held on 03.07.2008, SKS (A-1) and M/s Prakash Industries Limited (PIL) were jointly recommended for allocation of Vijay Central Coal Block in Chhattisgarh. Vide note dated 10.07.2008, Ministry of Coal processed the recommendation of 36th Screening Committee through the then Minister of Steel (Coal) for approval of competent authority. However, pursuant to a representation received from SKS (A-1) regarding some discrepancies of the existing capacity indicated in the application form of M/s PIL, the matter was referred to Ministry of Steel for verification and report.
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RC No. 219 2014 (E) 0016 Page No. 153 of 271
(14) Vide PMO ID no. 200/31/C/83/06
ES.I dated 21.07.2008 Ex. P-232/PW-17 (D-27 at page no 53 ), Director PMO Sh. Ashish Gupta, gave directions for re-examination of the issues with regard to proposed allocatees of coal blocks including Vijay Central Coal Block. As per said directions, the issues were revisited in a meeting held on 25.07.2008 and Ministry of Steel was assigned the task for spot verification of installed capacity of M/s PIL.
(15) Vide note dated 04.08.2008 (D-24, page 2-4/N) of Sh. L.S.Janoti at CA Section, Ministry of Coal, matter was referred back by the Screening Committee for approval of the Prime Minister as Minister of Coal. However, pursuant to the order dated 03.09.2008 of Hon'ble Delhi High Court in a Writ Petition no. 6449/2008 filed by M/s PIL, Director, PMO vide note dated 22.09.2008, referred back the matter regarding allocation of Vijay Central and Urban coal blocks to the Ministry of Coal for further examination in the light of the aforementioned order.
(16) After the aforementioned order dated 03.09.2008 was modified/vacated by the Hon'ble Delhi High Court qua SKS (A-1) by its subsequent order dated 02.07.2010, the Screening Committee in its meeting held on 04.10.2011, declined PIL's request for additional amount of coal from Vijay Central Coal Block beyond the quantity already recommended by the Screening Committee CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 154 of 271 in its meeting held on 03.07.2008 and the balance coal available in the block was recommended for allocation to Coal India Limited as leader with other allocatees as associates.
(17) In the note sheet dated 07.10.2011 Ex. P-259/PW17 (D-10, page 46/N to 50/N), as regard the above recommendation of the screening committee in its meeting held on 04.10.2011 for allocation of balance coal of Vijay Central Coal Block, it was recorded that allocation of Vijay Central Coal Block to SKS/A-1, shall be made as an associate as per the recommendation of the Screening Committee made in the meeting held on 03.07.2008 for share of 16.08 MTPA geological coal reserve from the said recommended Block and the remaining coal reserves may be allocated to Coal India Limited as the leader for the development of said Block. The said note sheet further recorded that the offer letter may be processed under Option-III.
(18) Vide note sheet 55/N dated
24.10.2011, Part of D-10 Ex.PW-238/PW-17
(Colly), as regard the draft allocation letter for Vijay Central Coal Block to Coal India Limited as leader and SKS as associate as per option-III, it was recorded that Central Government exercised the option-III only when the proposed joint allocatees were unable to exercise option I or II for joint working of the coal block. However, no precedent similar to the instant case was found CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 155 of 271 where the coal blocks have been allocated to joint allocatees under Option-III, except in cases mentioned in clauses (a) and (b) of Para 10 of said note sheet, where Central government exercised Option-III and allocation letter was issued without any offer letter.
(19) The note sheet 57/N dated
24.10.2011 of D-10 Ex.P-238/PW-17(colly)
recorded that "The coal block (Vijay Central) may be allotted under Leader Associate model to Coal India Limited and M/s SKS Ispat Power Limited.
The offer was used to be made to private companies. Here the block is being allotted to Coal India Limited with a minor share of M/s SKS. We may, therefore, issue allocation letter as per DFA. Approval of minister may be obtained."
(20) Vide allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10, page 1192- 1195), issued under the signature of Sh.
P.S.S.Reddy, Director of Ministry of Coal, Vijay Central Coal Block was jointly allocated to Coal India Limited as leader and SKS (A-1) as associate with 16.8 MT share to SKS as per Option-III.
(21) Vide note sheet 61/N dated
24.02.2012 {part of D-10 Ex.PW-238/PW-17
(colly)}, the request of SKS for revision of share from 16.8MT to 26.48 MT was declined by observing that share of coal to the recommended allocatees is based on the geological reserve of coal and not on mineable or extractable reserve of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 156 of 271 coal and that as per the allocation letter dated 01.11.2011, SKS had been allocated its share of 16.08 MT as per the recommendation of 36th screening committee meeting held on 3 July 2008, and Coal India Ltd had been allocated the remaining coal reserve of 40.671 MT of Vijay Central Coal Block from the total available geological reserve of 56.751 MT. Hence, no coal reserves remained to be allocated from Vijay Central Coal Block.
(22) Vide note sheet 64/N dated
22.02.2012 {part of D-10 Ex.PW-238/PW-17
(colly)}, which seems to the last note sheet of file D-10, the Joint Secretary coal opined to seek the opinion of the law ministry for consideration of the matter that if in the light of the stay granted by Hon'ble High Court of Chattisgarh in WP No.6056/2011, the allocatees Coal India Limited and SKS (A-1) can go ahead with the development of the Block.
(23) However, before the matter relating to development of Vijay Central Coal Block could proceed further, the entire allocation of Coal Blocks including Vijay Central Coal Block came to be cancelled by the Ministry of Coal and same was done pursuant to the judgment of Hon'ble Supreme Court in 'Manohar Lal Sharma Vs. Principal Secretary and ors' (2014) 9 SCC
516. CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 157 of 271 Contentious issues
34. Based on the disputed factual and legal position emerging out of record, rival contentions of parties, the averment contained in the chargesheet and the evidence adduced on record, following contentious issues have arisen in this case:-
1. Whether SKS (A-1) misrepresented the facts before 36th Screening Committee by knowingly raising false claims regarding its networth, investment, land, existing capacity and clearances in its application dated 12.01.2007 Ex.P- 1 (D-5) and feedback form dated 07.12.2008 Ex.P- 2 (D-29)?
2. Whether the aforementioned false claims were made dishonestly or fraudulently with an intention to cheat the Ministry of Coal, Government of India?
3. Whether the said misrepresentation induced the 36th Screening Committee to recommend the allocation of Vijay Central Coal Block in favour of SKS (A-1), in its meeting held on 03.07.2008 and Ministry of Coal to issue allocation letter dated 01.11.2011 to SKS (A-1)?
4. Whether, the allocation letter dated 01.11.2011 is a valuable security for SKS (A-1) within the meaning of Section 420 IPC?
5. Whether there was any prior meeting of mind amongst the accused persons for the commission of alleged offences punishable under Section 420 IPC?
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 158 of 271 Points of Determination
35. Now, based on the aforementioned disputed & undisputed facts and contentious issues, the following points of determination are framed in the present case:-
(1) Whether any misrepresentation(s) was/were made by the accused persons A-1 to A-5 to Ministry of Coal/ Screening Committee/Government of India during the process of seeking allocation of captive Vijay Central Coal Block?
(2) Whether those misrepresentations were made dishonestly and fraudulently with an intention to cheat the Ministry of Coal, Government of India?
(3) Whether those misrepresentation induced Screening Committee to recommend SKS (A-1) for allocation of said coal block and Ministry of Coal to issue allocation letter dated 01.11.2011 in favour of SKS (A-1)?
(4) Whether allocation letter dated 01.11.2011 is a valuable security? If so, whether it was issued as a result of any inducement?
(5) Whether the offence of cheating under Section 420 IPC is made out against A-1 to A-5?
(6) Whether there was any criminal conspiracy? If so, what was the object of said conspiracy and who all were the part of it?
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 159 of 271 Relevant legal provisions and precedents
36. Before reverting to the evidence adduced on the above issues and its appraisal in the light of rival contentions of the parties, it would be appropriate to first refer to the relevant provisions of law dealing with the offence of cheating and also to navigate through the legal landscape by referring to some important case law relating to said offence.
Cheating
37. Since the allegations pertain to year 2007-2008, the provisions of IPC, which stood repealed w.e.f 01.07.2024, shall apply. Primarily, the offence concerning the present accused is the offence of cheating u/s 420 IPC (Section 318(4) BNS, 2023 is the corresponding provision). For making out a case under section 420 IPC, element of cheating must be there as required under section 415 IPC. The word 'cheating' is defined u/s 415 IPC (Section 318(1) BNS, 2023 is the corresponding provision) and it 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."
38. Section 420 IPC reads as under:
"420. Cheating and dishonestly inducing delivery of property.--
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 160 of 271 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."
39. In the light of above provisions, following are the ingredients of the offence of cheating under section 415 IPC:-
(i) there should be fraudulent or dishonest inducement of a person by deceiving him;
(ii) (a) the person so deceived should be induced to 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.
40. The ingredients to constitute an offence under Section 420 are as follows:-
i) A person must commit the offence of cheating under Section 415; and
ii) The person cheated must be dishonestly induced to:
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.
41. Cheating is an essential ingredient for an act to constitute an offence under section 420 IPC. In 'Mariam CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 161 of 271 Fasihuddin vs State By Adugodi Police Station', Crl. Appeal no. 235 to 2024, decided on 17 September, 2021, Hon'ble Apex Court held that in order to attract the provision of Section 420 IPC, the prosecution has to prove not only the act of cheating but it also needs to prove that the act of cheating resulted into an inducement to deliver the property resulting in a loss to the person induced. Relevant portion of the judgment reads as under:-
"10. Section 420 IPC provides that 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 valuable security, or anything, which is signed or sealed, and which is capable of being converted into a valuable security, shall be liable to be punished for a term which may extend to seven years and shall also be liable to fine. Further, Section 415 IPC distinctly defines the term 'cheating'. The provision elucidates that an act marked by fraudulent or dishonest intentions will be categorised as 'cheating' if it is intended to induce the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, causing damage or harm to that person.
11. It is thus paramount that in order to attract the provisions of Section 420 IPC, the prosecution has to not only prove that the accused has cheated someone but also that by doing so, he has dishonestly induced the person who is cheated to deliver property. There are, thus, three components of this offence, i.e. (i) the deception of any person, (ii) fraudulently or dishonestly inducing that person to deliver any property to any person, and (iii) mens rea or dishonest intention of the accused at the time of making the inducement. There is no gainsaid that for the offence of cheating, fraudulent and dishonest intention must exist from the inception when the promise or representation was made.
12. It is well known that every deceitful act is not unlawful, just as not every unlawful act is deceitful. Some acts may be termed both as unlawful as well as deceitful, and such acts alone will fall within the purview of Section 420 IPC. It must also be understood that a statement of fact CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 162 of 271 is deemed 'deceitful' when it is false, and is knowingly or recklessly made with the intent that it shall be acted upon by another person, resulting in damage or loss. 'Cheating' therefore, generally involves a preceding deceitful act that dishonestly induces a person to deliver any property or any part of a valuable security, prompting the induced person to undertake the said act, which they would not have done but for the inducement."
13. The term 'property' employed in Section 420 IPC has a well defined connotation. Every species of valuable right or interest that is subject to ownership and has an exchangeable value - is ordinarily understood as 'property'. It also describes one's exclusive right to possess, use and dispose of a thing. The IPC itself defines the term 'moveable property' as, "intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth." Whereas immoveable property is generally understood to mean land, benefits arising out of land and things attached or permanently fastened to the earth.
42. It will also be fruitful to note definitions of 'dishonestly' and 'fraudulently'. 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".
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.
43. 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.
"Wrongful loss".--"Wrongful loss" is the loss by CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 163 of 271 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.
44. To know the meaning of the phrase "deceiving any person" as used in the definition of cheating as provided in Section 415 IPC, we may refer to the case in Swami Dhirendra Brahamchari Vs. Shailendra Bhushan, 1995 Cr. L.J. 1810 (Delhi), wherein 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. 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. Hon'ble Supreme Court in the case of Ellerman & Bucknall Steamship Co. Ltd. vs Sha Misrimal Bherajee, AIR 1966 SC 1892, explained "deceit" as a false statement of a fact made by a person knowingly or recklessly with the intent that it shall be acted upon by another who does act upon it and thereby suffers damage.
45. 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 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 164 of 271 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 provides that a dishonest concealment of facts is a deception within the meaning of this section.
46. 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 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.
47. As regards inducing fraudulently or dishonestly, Hon'ble Supreme Court, in the case of 'Dr. Vimla vs Delhi Administration AIR' 1963 SC 1572, 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 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 165 of 271 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.
48. 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 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.
49. 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.
50. It is also a settled position in law that for proving the offence of cheating, it must be shown that the fraudulent or dishonest intention was existing right at the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 166 of 271 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 pd. 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."
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51. Here we may also refer the judgment 'Jupally Lakshmikantha Reddy Vs. State of Andhra Pradesh & Anr.' 2025 INSC 1096, wherein Hon'ble Apex Court concluded that dishonest use of fake NOC from the Fire Department to obtain recognition/renewal of affiliation to run the Education Institution is not sufficient to attract the offence of cheating unless the said document was necessary for grant of such recognition/renewal as in its absence, the said NOC could not have induced the Education Department to grant recognition/renewal. The relevant portion in the said judgment is reproduced as under:-
"16. It is strenuously argued the appellant had used a fake NOC from the Fire Department and thereby held out a false representation that he possessed a valid NOC to obtain recognition/renewal of affiliation for his institution. Uncontroverted allegations in the charge sheet including the order in the writ proceedings, unequivocally show NOC from the Fire Department was not necessary for grant of such CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 167 of 271 recognition/renewal of affiliation as the height of the appellant's building was below 15 metres. Given this situation, the representation of the appellant that he possessed a valid NOC cannot be said to have induced the Education Department to grant recognition or renew the affiliation. To attract penal consequences, it must be shown that the false representation was of a material fact which had induced the victim to either part with property or act in a manner which they would not otherwise do but for such false representation. In the absence of such vital link between the alleged false representation and the issuance of recognition/renewal of affiliation, the essential ingredient of offence is not satisfied."
52. Hence, it is quite clear that mere dishonest misrepresentation is not sufficient to attract the offence of cheating punishable under Section 420 IPC unless the said representation is material and induced the deceived person to part away with the property.
53. The deception within the meaning of section 415 IPC can happen through misrepresentation. In the present case, the prosecution has alleged that A-1 company had misrepresented about various facts regarding its networth, existing capacity of EUP, investment, land and clearances etc in the application dated 12.01.2007 Ex.P-1 (D-5) as well as in the feedback form dated 07.02.2008 Ex.P-2 (D-29). As per record, both the said documents or their contents are not in dispute. However, it has been strenuously contended on behalf of the accused persons that the claims made in said documents were neither false nor the same were made with any fraudulent or dishonest intention to deceive anyone as alleged by the prosecution.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 168 of 271
54. As per the prosecution case, SKS (A-1), through A-2 to A-5, dishonestly and fraudulently misrepresented the facts before the 36 th Screening Committee at different stages of process of allocation of Vijay Central Coal Block and same was done with a dishonest intention to cheat the Ministry of Coal/Government of India for securing the allocation of Vijay Central Coal Block.
55. For adjudication of contentious issues involved in this case, it is necessary to carefully scrutinize the evidence and make the analysis of rival contentions in the light of factual and legal position on record. For said purpose, points of determination framed as above, shall be taken up one by one.
Points of Determination No. (1) to (3) (1) Whether any misrepresentation(s) was/were made by accused persons (A-1 to A-5) to Ministry of Coal/Screening Committee/Government of India during the process of seeking allocation of captive Vijay Central Coal Block?
(2) Whether those misrepresentations were made dishonestly and fraudulently with an intention to cheat the Ministry of Coal, Government of India?
(3) Whether those misrepresentation induced Screening Committee to recommend A-1 for allocation of said coal block and Ministry of Coal to issue allocation letter dated 01.11.2011 in favour of SKS (A-1)?
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 169 of 271
56. For discussion, the first three points of determination are taken together as the evidence adduced on said issues is common and interlinked. For deciding the aforementioned points of determination, following questions will fall for consideration before this court:-
1. Whether the aforementioned claims of SKS (A-1) regarding networth, investment, existing capacity of EUP, availability of land and clearances, in its application and feedback form, were actually false claims, if so, whether they were made with the knowledge of the accused persons?
2. Whether said misrepresentations were made with dishonest and fraudulent intention to induce the Screening Committee to recommend the name of SKS (A-1) for the allocation of Vijay Central Coal Block in favour of SKS (A-1) and based on said recommendations, induced Ministry of Coal to issue the allocation letter in its favour?
3. Whether the said misrepresentation induced the 36th Screening Committee to recommend the allocation of Vijay Central Coal Block in favour of SKS (A-1), in its meeting held on 03.07.2008 and Ministry of Coal to issue allocation letter dated 01.11.2011 to SKS (A-1)?
Misrepresentation of facts in the Application Form dated 12.01.2007 and Feedback Form dated 07.02.2008
57. As evident from the case law referred in the preceding paras of the judgment, for proving the offence of cheating it is sufficient to not only prove that the false CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 170 of 271 representations have been made, but it must also be proved that the representation were false to the knowledge of accused and was made dishonestly to deceive the complainant. Often the transactions labeled as cheating falter without proven initial dishonest intent. In absence of fraudulent and dishonest intention right at the beginning of the transaction, no case of cheating can be made out.
58. To put it differently, the prosecution is required to prove that the representations made by the accused persons were misrepresentations being false statements and that they were false to the knowledge of the accused persons and further that the misrepresentations were made with the intent that they should be acted upon. Prosecution is also required to show that the dishonest intention existed from the inception of the transaction. Guided as above, the acts of the accused persons have to be evaluated.
59. Before referring to the evidence adduced in this regard, it is necessary to take a look of the relevant contents of the application form dated 12.01.2007 and its covering letter Ex. P-1 (Colly) (D-5). For ready reference, the covering letter is reproduced as under:-
SKS ISPAT AND POWER LIMITED Ref: SKS/CB Dated 12/01/2007 To, Shri Sanjiv Mittal Director (CA-I) Ministry of Coal, New Delhi -110092 Sub: - Application for the Coal Block at VijayCentral (Sendurgarh) in Chhattisgarh for 1.1 Million Tonne Integrated Steel Plant in the State of Chhattisgarh.
Respected Sir, We here by are submitting the application form for the Coal Block for 1.1. Million Tonne Integrated Steel Plant in the State of Chhattisgarh.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 171 of 271 The application form is in 5 copies as notified by the Ministry of Coal alongwith the D.D. of Rs.10,000/-
Kindly acknowledge the same.
Thanking you.
Yours Sincerely Amrik Singh (Manager) Enclo:
1. Application Form along with D.D in favour of PAO: Ministry of Coal
2. Certificate of Registration of Company & Certified MOA-5 Copies
3. Authorization Letter - 5 Copies
4. Audited Annual Accounts/Reports of Last 3 years - 5 Copies
5. Copy of MOU with State Government of Chhattisgarh - 5 Copies
6. Copies of IEM Registration - 5 Copies
7. Copies of Ministry of Environment and Forests Clearance - 5 Copies
8. Scheme For Disposable unusable obtained during Mining with Bar Chart - 5 Copies
9. Detailed Appraisal note for ISP by SBI Caps - 5 Copies
10. Detailed Appraisal note for ISP by SBI Caps for Phase II - 5 Copie
11. Techno Economic Feasibility Report For 0.6 MT in Phase III Expansion- 5 Copies
12. CD MS Excel- 1 CD Delhi Office : A/18C, Naraina Industrial Area, Phase-II, New Delhi -110028 Tel : 011-25897779. Fax : 011-25897899 Email : [email protected] Head Office : 501'B; Elegant Business Park, Andheri Kurla Road. J.B.Nagar, Andheri (E), Mumbai- 400059 Tel : 022-30807000, Fax:022-30807080/30807070, Email : corporateoffice @sksispat.com Works : Siltara Industrial Growth Centre, Phase-II, 18th Mile Stone, Billaspur Road, Raipur- 493111, Chhattisgarh Tel : Ph 07721-264379 to 204384. Fax : 07721-264378, E-mail : [email protected] www.sksispat.com Application form dated 12.01.2007
60. In the enclosed application form, under the heading "Track Record of the Applicant" the details of turn-over, profit and net-worth of the applicant company SKS (A-1) were mentioned as under:-
2003-04 2004-05 2005-06 Upto 31/12/2006 8 TURNOVER IN THE LAST 109 Cr 116.68 Cr 278.74 Cr 535.81 Cr 3 YEARS 9 PROFIT IN LAST 3 YEARS 2.64 Cr 10.36 Cr 18.94 Cr 31.99 Cr PBT 10 NETWORTH Rs. 198.88 Cr 252.99 Cr
61. Further, as regard the details of the "existing capacity of end use project", the following particulars were mentioned in the application:
III PROPOSED END USE (PROJECT) POWER/IRON &STEEL/SPONGE IRON/CEMENT (Tick the main end use project, associate and use not to be indicated) CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 172 of 271
Capacity of end use plant LINK LINK LINK Remarks, if any
MW/MTPA AGE AGE AGE
Quanti Grade Source
ty
MTPA
11 EXISTING Sponge Iron 2.7 LTPA 1.58. F SECL Vide MOU's dt. 16 Aug 2004 and
CAPACITY Power Plant 55 MW, SMS LTPA 06 Oct 2006 with Govt. of
4.43 LTPA, Rolling Mills Chhatisgarh providing all required
3.7 LTPA, Coal Washery assistance for procurement of coal,
1.0 MTPA iron and water from any sources.
Copies of MOU's enclosed
12 PROPOSED Sponge Iron 3.3 LTPA - - -do-
CAPACITY Power Plant 100 MW,
SMS 8.0 LTPA, Rolling
Mills 6.0 LTPA, Blast
Furnace 6.0 LTPA, Ferro
Allows 2x9 MVA, Sinter
Plant 11.0 LTPA.
13 ULTIMATE 1.2 MTPA of Saleable - - -do-
CAPACITY Steel and 155 MW Captive
(TOTAL) Power Plant
14 ROM COAL 3.8 mtpa (24 LTPA for - - -do-
REQUIREME Sponge Iron, 14 LTPA for
NT Captive Power Plant and 4
LTPA Coking Coal for
Blast Furnace)
15 LOCATION SILTARA INDUSTRIAL - - -do-
(District, GROWTH CENTRE,
State) RAIPUR-
(CHHATTISGARH)
62. As regard the land requirement, under the heading "project status", the following facts were mentioned in the application qua the availability of land :
VI PROJECT STATUS
18 LAND YES NO Remarks if any
i) Requirement (Sq. 500 Acre Vide MOU's dt 16 Aug 2004 and 06 Oct
Km/Hectare) 2006 with Govt. of Chhatisgarh
providing all required assistance for
procurement of coal, iron and water
from any sources. Copies of MOU's
enclosed.
ii) Identified 500 Acre
iii) Applied for Acquisition 500 Acre
iv) Partly Acquired 300 Acre WE had acquired at Siltara Industrial
Growth Centre, Phase-II, 18th Mile
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 173 of 271
Stone, Bilaspur Road, Rajpur,
Chhattisgarh.
v) Likely date of full 31-12-07
possession
vi) In possession 300 Acres
vii) Others
63. Under the heading "clearances for the end use plant", the following facts were mentioned qua clearances:-
24. CLEARANCES FOR THE PROPOSED END USE PLANT I) Mention the clearances applied for
i) Mention the clearances All clearance almost obtained applied for
ii) Mention the clerances Chhattisgarh State Electricity Board, Pollution Control obtained Clearance, environmental Clearances, Water Availability, railway Siding
iii) Likely Date of obtaining all NA clearances
iv) Others All clearance almost obtained
64. Under the heading "others", the following facts were mentioned in the application qua investment:
25.OTHERS
i) Total envisaged investment 1470 Cr
ii) Investment already made up to 31.12.2006 700 Cr
65. Under the heading "Phasing of Project", following information furnished in the application dated 12.01.2007 for end use project:
VI. PHASING OF PROJECT CAPACITY COMMISSIONIN Remarks, if any G DATE
26. END 2.7 LTPA Sponge Iron Under Operation Vide MOU's dt.16 Aug 2004 and USE 06 Oct 2006 with Govt. of PROJECT Chhatisgarh providing all required assistance for procurement of coal, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 174 of 271 iron and water from any sources.
Copies of MOU's enclosed 4.43 LTPA Steel Under Operation melting Shop 3.7 LTPA Rolling Mills Under Operation 1 MTPA Coal Washery Commissioned and under trial run.
25 MW Power Plant Under Operation 30 MW Power Plant Commissioned and under rial run.
Ferro Alloys 2x9 MVA By 31.12.2007
Blast Furnace 5 LTPA By 31.12.2008
Sinter Plant 11 LTPA,
SMS 8 LTPA
3.3 LPTA Sponge Iron By 31.12.2008
Rolling Mills Special By 31.12.2008
Steel 6 LTPA
50 MW Power Plant By 31.12.2008
50 MW Power Plant By 31.12.2008
66. Relevant columns of FEEDBACK FORM dated 07.02.2008 submitted under the signature of A-4 are reproduced as under :-
1 Name of the applicant SKS Ispat and Power Limtied xxx
4. Net Worth (As on 31.03.2006) 352.89 Crores (As on 31.03.2007) 468.60 Crores (As on 31.12.2007) 524.53 Crores
5. Land
(a) Total requirement 500 Acres
(b) Already acquired 500 Acres xxx
10. Finance
(a) Total envisaged investment (a) Rs. 2600 Crores
(b) Financial closure (b) Financial Closure for Phase I and II already completed.
(c) Investment already made Rs.1100 Crores
11. Status of environment clearance for end use Environment clearance for Phase I &II and plant partly for Phase III has already been cleared and for balance we have submitted the TOR.
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RC No. 219 2014 (E) 0016 Page No. 175 of 271
67. As per chargesheet, during the course of investigation, it was found that SKS (A-1) has grossly mis- represented about number of facts in the application form dated 12.01.2007 filed with the Ministry of Coal as well as in the feedback form submitted to 36th Screening Committee, in its meeting held on 07.02.2008. It is an undisputed position that SKS (A-1) furnished the aforementioned information in the application form dated 12.01.2007 and feedback form dated 07.02.2008. The application dated 12.01.2007 was filed with all the requisite documents. There is no controversy regarding submission of any of said documents by SKS on said dates and their contents. We shall be now dealing with alleged misrepresentation under following three heads :
1. Misrepresentation regarding Networth and Investment.
2. Misrepresentation regarding Environment Clearance and Production Capacity.
3. Misrepresentation with regard to available land.
Misrepresentation regarding Networth and Investment
68. As per the guidelines for allocation of captive coal blocks mentioned in the advertisement dated 06.11.2006 Ex. P-205/PW-17 (D-34, page 73 to 94), the Screening Committee was empowered to make recommendations to the Ministry of Coal for allocation of the particular coal block to the specified applicant company, singly or jointly with other companies and following were CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 176 of 271 the determinative factors for deciding the inter se priority amongst the applicants:-
(1) Status (Stage) level of progress and state of preparedness of the projects;
(2) Net worth of the applicant company (or in case of a new SPV/JV, the net worth of their principals); (3) Production capacity as proposed in the application; (4) Maximum recoverable reserve as proposed in the application;
(5) Date of commissioning of captive mine as proposed in the application;
(6) Date of completion of detailed exploration (in respect of unexplored blocks only) as proposed in the application;
(7) Technical experience (in terms of existing capacities in coal/ lignite mining and specified end-use); (8) Recommendations of the Administrative Ministry concerned;
(9) Recommendations of the State Government concerned (i.e. where the captive block is located); and (10) Track record and financial strength of the company.
69. As is evident from above, financial strength and level of progress and state of preparedness of the project, were some of the determinative parameters for deciding the inter se priority amongst the applicants.
70. As per the charge, the allegations are that all accused persons in conspiracy with each other raised a false claim regarding networth of the accused company SKS(A-1) in its application (D-5) and the feed back form (D-29) submitted with the Ministry of Coal. In Column no. 10 of the application form, the networth as on 31.03.2006 was falsely claimed to be Rs. 198.88 Crores (wrongly mentioned as 252.99 crore in the formal charge) against the actual networth of only Rs. 146.08 crore. Whereas, in the feedback form in column no. 4, the networth as on 31.03.2006 was claimed to be 352.89 crore whereas, the actual networth as CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 177 of 271 on that date was only Rs. 146.08 crore. For ready reference the relevant extract of the application and feed back form are reproduced as under :-
Application form dated 12.01.2007 2003-04 2004-05 2005-06 Upto 31/12/2006 10 NETWORTH Rs. 198.88 Cr 252.99 Cr Feedback form dated 07.02.2008
4. Net Worth (As on 31.03.2006) 352.89 Crores (As on 31.03.2007) 468.60 Crores (As on 31.12.2007) 524.53 Crores
71. In this regard, Prosecution has examined two witnesses PW-3 Virender Kumar Jain and PW-5 Dr. Raj Singh. PW-3 Virender Kumar Jain is a Chartered Account, who at the relevant time was deputed as DGM in Power Finance Corporation Limited (PFC). Initially, he was deputed in the Core Division of Ultra Mega Power Project (UMPP) to carry out the work relating to award of UMPP based on standard biding process. But being DGM, he was also looking after work of Finance Executive in the Company. As per his version, he was conversant with the bidding criteria relating to evaluation of financial documents of UMPP.
72. As per record, vide letter dated 19.12.2014, (D-
165), CBI had approached CMD, PFC, to depute any CA from PFC, who was well versed with the networth calculation methodology adopted by PFC/Ministry of Power for bidding evaluation of UMPP and pursuant to said request, PW-3 was deputed to join the investigation for said purposes.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 178 of 271 Accordingly, PW-3 prepared the report regarding calculation of networth of the accused company based on their financial documents i.e. Annual Report/balancesheets.
73. PW-3 proved his report dated 08.01.2015 as Ex. P-144/PW-3 (D-166). As per his report, the networth of SKS (A-1) for the year ending on 31.03.2006, 31.03.2007 and 31.03.2008 were found to be Rs.146.084 crores, Rs.191.349 crores, Rs. 317.184 crores respectively. Whereas, as per the feedback form the figures of networth as on aforementioned dates were given as Rs.352.89 crores, Rs.468.60 crores and Rs.524.53 crores respectively.
74. Perusal of the report Ex. P-144/PW-3 (D-
166) shows that the networth was computed as per the formula for computing networth given in standard bidding documents notified by the Ministry of Power for UMPP and the formula is as under :-
Networth = Equity share capital Add: Reserves Subtract: Revaluation reserves Subtract: Intangible Assets Subtract: Miscellaneous Expenditure to the extent not written off and carry forward losses As on As on As on Comments 31.03.2006 31.03.2007 31.03.2008 (Rs in Cr.) (Rs in Cr.) (Rs in Cr.) Equity share capital 15.199 15.199 32.70 Non convertible/ Add:Reserves 131.025 176.255 284.69 redeemable Subtract: preference Revaluation shares and reserves share application Subtract: Intangible money has not Assets been Subtract: 0.140 0.105 0.206 considered.
Miscellaneous Expenditure to the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 179 of 271 extent not written off and carry forward losses Networth 146.084 191.349 317.184 75. As per the version of PW-3, his
aforementioned report is based on the information given in the Annual Reports of SKS(A-1) for the years 2005-06 Ex. P-81/3 (Colly.) (part of D-162), 2006-07 Ex. P-81/4 (Colly.) (part of D-162) and 2007-08 Ex. P-83 (Colly.) (part of D-
164), which were annexed with the application form dated 12.01.2007 (D-5). He deposed that the values of networth mentioned in the feedback form were derived by the company (A-1) by adding the share application money, preference share capital and deferred tax liability etc. which was not in accordance with the formula prescribed for calculation of networth for Ultra Mega Power Project (UMPP).
76. As is evident from the aforementioned report and the deposition of PW-3, it is only on account of the addition of share application money (Rs. 42.65 crore) and the value of non-convertible/redeemable preference shares (Rs.10 crore) in the paid up capital, there occurred a difference of Rs. 52.65 crore in the figure of networth given by the company in the application form (D-5) and that calculated by PW-3 in his report and same is also discernible from the Annual Report of the year 2005-06 Ex.P-81/PW-3 (Annexure 3, page no.13) wherein, under the heading of source of funds, the value of share capital is mentioned as Rs. 25.19 crore, share application money as Rs. 42.65 crore and reserves & surplus as Rs.131 crore and sum total of all said figures comes out to be 198.8 crore, which is taken as a total networth and mentioned so in the application form CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 180 of 271 dated 12.01.2007. Similarly, the networth as on 31.03.2007 appears to have been taken from the Annual report 2006-07 Ex. P-81/PW-4 (colly) (Annexure 4 page 25), wherein, said figure is shown to be Rs. 272.54 crore under the heading share holder fund.
77. Indisputably, the accused company SKS(A-1) was engaged in the business of manufacture of iron and steel and had also applied for the allocation of coal block for captive mining of Vijay Central Coal Block for the purpose of its integrated steel plant (EUP) at Siltara, Raipur, Chattisgarh. In said circumstances, there lies no reason for the IO to get the calculation of networth done according to the formula applicable to Ultra Mega Power Plant engaged in the business of Power Generation. Even in his deposition before the court, the IO/PW40 did not come out with any plausible explanation as to why the formula used for bidding evaluation of UMPP was chosen for calculating the networth of SKS (A-1), which was not a power generation company but was engaged in the business of steel production.
78. Ld. Sr. PP has referred to the definition of 'networth' provided under Section 2 (29A) of the Companies Act, 1956 and submitted that as per said definition paid up capital is the part of networth alongwith free reserves and as per the defence own witness examined as DW-1 Sh. Rakesh Gunvantray Mehta, paid up capital includes the amount of money credited/received as paid up in respect of shares issued and as per the annual report of A-1 company for the relevant years Ex. P-81/PW-2, Ex. P-81/PW-3 and Ex. P-81/PW-4 (D- page 12), share capital under the head 'issued subscribed and paid up', was mentioned as Rs. 15.19 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 181 of 271 crore. DW-1 also admitted that share application money, pending allotment was never the part of paid up capital.
79. On the other hand, the above contention was strongly opposed by the Ld. Senior Counsel for A-1, who submitted that the share application money is always mentioned under the head of share capital and it was so shown even in the balance-sheets and annual reports of the accused company SKS (A-1), which were duly annexed with the application form dated 12.01.2007 (D-5). Therefore, no fault lies with the accused company in calculating the networth by adding the share application money. He further contended that the guideline of Ministry of Coal were completely silent on the formula to be used for calculation of networth and therefore, A-1 calculated its networth based on the figures given in its audited annual report/balance sheets of the relevant years, which were already filed with the office of Registrar of Companies. While in the feedback form the networth of applicant and its group companies were added to give aforementioned figures as large investment for said EUP of SKS (A-1) had come from its group companies. But again the figures were based on audited annual report and balance sheets of said companies.
80. Ld. Senior Counsel Sh. Pawan Narang, further contended that many companies like M/s IND Synergy Limited having networth Rs. 118 crore; M/s Vinni Iron Steel Udyog Ltd with networth of Rs. 85.79 crore and M/s AMR Pvt. Limited with networth, as low as Rs.1.96 crore, were also allocated coal blocks by the 36 th Screening Committee, showing thereby, that the companies with far lesser networth than the networth of the SKS (A-1) were also CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 182 of 271 considered eligible and deserving for the allocation thereby, clearly ruling out the possibility of any inducement of the 36th Screening Committee on account of alleged false claim of networth and investment of the accused company SKS (A-1). It was argued that even IO of this case PW-40, during his cross-examination fairly conceded to this fact that many companies with far lesser networth than the networth of A-1, were allocated coal blocks by the 36 th Screening Committee.
81. I have given my thoughtful consideration to the rival contention of the parties on the issue of alleged misinformation regarding networth.
82. As per the deposition of PW-3, the value of networth mentioned in the feedback form (D-29) was derived from adding share application money, preference share capital and deferred tax liability, which was not as per the formula prescribed for calculation of networth of UMPP. There is however, no outright denial to the suggestion that there were more than one method of calculating networth as per the relevant accounting practice adopted to calculate the networth. To said suggestion, PW-3 vaguely responded that he could not comment on the same. In view of his said response, possibility of more than one method for calculating the networth could not be ruled out.
83. Furthermore, upon being shown the office memorandum dated 30.11.2010 issued by Ministry of Heavy Industries and Public Enterprises, Dept. of Public Enterprises, Division of MOU, Government of India, PW-3 admitted that as per Annexure 1 of said office memorandum Ex. P-146/PW-3, titled as 'Definition of financial parameters', CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 183 of 271 networth meant to include paid up capital, share application money pending allotment and reserves less accumulated losses and deferred revenue expenditure to the extent not written off.
84. PW-3 also admitted that the share application money to the extent not refundable shall be shown under the head of equity in the annual report/ balance-sheet. He however, deposed that it would not be entirely correct to say that share application money to the extent refundable shall be separately shown under the head of 'other current liability' in the annual report/balance-sheet. He volunteered to say that if on the date of balance-sheet, status of application money was not known then it was generally shown under the head 'equity' but if the status is known to be refundable, it could be shown under the head 'current liability'.
85. Although PW-3 denied the suggestion that the share application money in the year 2004-05, 2005-06, 2006-07 and 2007-08 was non-refundable towards issuance of shares as a contribution for funding the steel plant. But, he admitted the suggestion to the extent that entire share money was adjusted towards issue of share to the applicants during 2008-09. He also admitted the suggestion that the liability depending upon a contingency was not a debt in presenti or in future till the contingency had happened. He also admitted that the difference in the networth calculated by him and as shown by the applicant company (SKS/A-1) was only because of use of different methods in calculating the networth.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 184 of 271
86. Here, we may also refer to the testimony of PW-5 Dr. Raj Singh, Regional Director of Southern region in Ministry of Corporate Affairs at Chennai, who deposed that the formula used for calculating networth was equity share capital + free reserves - misc. expenditure to the extent of not written off. However, testimony of said witness does not disclose from where he had derived said formula to calculate networth.
87. PW-5 also in his cross-examination admitted that as on the date 16.12.2014, when he had calculated the networth, there were atleast two methods/formulas for calculating networth i.e. one used by him and another as given in Ex. P-146/PW-3, which was notified by Ministry of Heavy Industries & Public Enterprise, Government of India.
88. I have considered the deposition of both the above witnesses in the light of material brought on record.
89. As per para 5.4 (i) of the notification of bearing no. 23/11/2004-R&R (Vol.II)-Guidelines for 'Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licenses' Ex. P-145/PW-3, which was shown to PW-3 during his cross-examination, the bidders were required to meet the financial requirements of minimum networth, revenues etc. with necessary proof of the same as outlined in the bid documents.
90. Indisputably, the guidelines of the Ministry of Coal Ex. P-205/PW-17 (colly) (D-34 page 73 to 94) are silent both on the minimum criteria for networth as well as on the formula for calculating the same. In other words, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 185 of 271 there was no eligibility criteria for the networth fixed by the Ministry of Coal or by the Screening Committee for the applicants seeking allocation of coal blocks for captive mining nor any formula was prescribed for calculating networth.
91. In the above circumstances, when there was no formula prescribed for calculating the networth and further no minimum eligibility criteria in that regard was fixed by the Ministry of Coal, the applicants were left unguided and were constrained to apply the formula for calculation of said information as per their own subjective understanding. An argument has been raised on behalf of prosecution that since only companies were the applicants before the 36th Screening Committee/Ministry of Coal, therefore, even in absence of any prescribed formula, the networth was required to be calculated only as per the definition given in the Companies Act, 1956.
92. However, I do not find any force in said contention for the reason that even in the year 2010 when the aforementioned OM no. 3(9)/2010- DPE (MoU) Ex. P- 146/PW-3 was issued by the Ministry of Heavy Industries and Public Enterprises, the definition of networth was very well existing under Section 2(29A) of the Companies Act, 1956. Nevertheless, the Ministry of Heavy Industries and Public Enterprises in the guidelines for MoU between Central Public Sector Enterprises (CPSE) and Government Department/Ministry for the year 2011-12, which were issued vide aforementioned OM Ex. P-146/PW-3, prescribed a different definition of networth, which included even the share application money pending allotment. The networth CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 186 of 271 defined in said guidelines under the heading 'Definitions of Financial Parameters' in Annexure 1 reads as under :-
"Networth :- means paid up capital, share application money pending allotment and reserves less accumulated losses and deferred revenue expenditure to the extent no written off."
93. The mere fact that said notification of Ministry of Heavy Industries and Public Enterprises was not existing in the year 2007 when the information of networth was furnished by the accused company (A-1), does not make any difference because, the fact remains that different definitions/ formulas for calculation of networth were applied by the different ministries while entering into commercial transactions with the companies, despite a specific definition of networth existing in Companies Act, 1956. Had it not been the position, IO of this case, would not have approached PFC for getting the networth calculated and would have simply got it calculated as per the definition given in the Companies Act, 1956.
94. Even, in the definition of networth given in Section 2(29A) of Companies Act, 1956, there is no specific exclusion of share application money as it only says that that networth would mean the sum total of paid up capital and free reserves after deducting the provision or expenses as may be prescribed. Since, in the audited annual reports of SKS (A-1), the share application money was also mentioned under the heading 'share holder's fund', the same was taken as a part of paid up capital/share capital by the accused company(A-1).
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 187 of 271
95. In view of the fact that different Ministries of the Government of India have prescribed different meaning to the term 'networth' in their commercial transactions with the corporate entites, the conduct of the accused company SKS (A-1) in including the share application money in the calculation of networth is innocuous and cannot be said to be actuated with any malafide so as to raise it to the level of criminality. Especially when, the guidelines of Ministry of Coal were silent on the formula to be applied for calculation of networth and also did not provide for any minimum threshold in this regard for the eligibility of the applicants.
96. Further, the said subjective opinion of the IO or that of PW-3 regarding application of UMPP formula is not corroborated by any of the officials of Ministry of Coal. In these circumstances, the subjective opinion of PW-3 or IO (PW-40) cannot be held to be in consonance with the intention of the Ministry of Coal that had sought details of net worth in the application form through its advertisement. The guidelines for allocation of captive blocks are also conspicuously silent about the specific nature of net worth of the applicants that was sought to be provided in the application. Rather, it was a general query that left the applicants in the quandary to give information of net worth based upon their subjective comprehension. In these obscure circumstances lacking requisite clarity, no fault can be imputed to the accused company (A-1).
97. As noted above, mens rea/dishonest intention is the foremost requirement for the offence of cheating and the element of mens rea can also be gathered from the surrounding circumstances of the transaction, which may CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 188 of 271 include the chain of events happening prior to the transaction or even subsequent to that. The bonafide on the part of the SKS (A-1) is evident from the fact that the share application money was adjusted towards issue of share to the applicant promoters in the subsequent years, same is also manifested from the testimony of PW-3, where he has admitted that entire share application money was adjusted towards issue of share to the applicant during the year 2008-09. The same is also evident from the annual reports of A-1 for the period from 2004-05 to 2008-09, which are part of record. Had the intention been malafide only to secure allocation based on inflated claims by showing share application money as part of share capital/paid up capital, there was no need for SKS (A-1) to subsequently issue shares against said money especially, after its name was recommended for allocation by the Screening Committee on 03.07.2008.
98. In this regard, we may also refer to the cross- examination of PW-3, where he admitted that as per Director's report for the year 2004-05 (Ex. P-81/2) of SKS (A-1), it was mentioned that "the promoters brought in their contribution fully, a part of which was converted into equity with allotment of equity at premium and balance was retained as the share application money account, against which equity shares would be allotted at an appropriate time during the current financial year".
99. The 2nd alleged false financial claim is stated to be of investment. As per the prosecution case, the accused company A-1 had made a false disclosure of investment in its application form dated 12.01.2007 (D-5) CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 189 of 271 wherein, the investment as on 31.12.2006 was projected as 700 crore and in the feedback form dated 07.02.2008, it was projected as 1100 crore. Whereas, as per the report dated 08.01.2015 Ex.P-144/PW-3(D-166) of PW-3, the investment as on 31.03.2007 was Rs. 466.24 crore and as on 31.03.2008 it was Rs.585.83 crore.
100. In that regard, it has been vehemently argued on behalf of accused persons that the prosecution has miserably failed to prove the alleged falsity of the claim relating to investment. It was argued that PW-3 simply identified his signature on the report dated 08.01.2015 (D-
116) and proved the same as Ex.P-144/PW-3. Thereafter, his entire deposition is relating to the aspect of networth. Even in his aforementioned report Ex.P-144/PW-3, he had mentioned the formula only for calculation of networth. On the 2nd page of his report Ex.P-144/PW-3, in the last column, he had mentioned the investment of the applicant as on 31.03.2007 as Rs. 466.24 crore and on 31.03.2008 as Rs. 585.83 crore and the same appears to have been calculated by adding the gross block of fixed asset and capital work in progress.
101. However, both the report as well as his (PW-3's) deposition are completely silent as to from where the said formula for calculating the investment has been derived by the PW-3. It was further argued that PW-3, who was asked to carry out the calculation of financial figures furnished by A-1 was not asked even a single question relating to investment. As per the deposition of PW-3, they had calculated the turn over, profit, networth of the companies on the basis of standard bidding process for CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 190 of 271 procurement of power on long term basis notified by Ministry of Power, Government of India. As regard investment calculation or the formula employed to calculate it, his testimony is completely silent.
102. On behalf of accused, it was further contended that the charge of investment is borne out of the fact that A-1 has considered working capital/work in progress investment, which has not been considered by the prosecution. A-1 has also included "current assets" while calculating its investment, which amount has also been excluded by the prosecution without providing any reasons for excluding the said amounts. It is submitted that it is impossible to run a plant without infusing any working capital in a plant. As all monies infused for running a plant have to be considered as investment and therefore, there is no basis for the prosecution to exclude said amount from the investment.
103. It was argued that the difference between the investment calculated by the A-1 company and done by PW-3 is only on account of the inclusion/exclusion of the 'current assets'. In the feedback form (D-29), the investment made in the project as mentioned therein is said to have included also the investment made by the group companies of A-1. The defence has further come up with the plea that since the aspect of investment made by the applicants was important for determining their preparedness for the project therefore, the funds invested by A-1 into the project was to include both its working capital and current assets of A-1 as well as of its group companies and accordingly, the calculation were made.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 191 of 271
104. In this regard, Ld. Sr. PP has fairly conceded to the fact that PW-3 is a witness of fact and not an expert witness and also that in his deposition, PW-3 has not specifically mentioned about the formula employed by him for calculation of investment of the accused company. Ld. Sr. PP however, forcefully argued that said infirmity in the deposition of PWs is not fatal at all because, in his (PW- 3's) report Ex.P-144/PW-3, the formula used for calculation of investment is specifically mentioned as gross block of fixed assets + capital work in progress, in the table containing the data of investment on the 2nd page.
105. I have considered the above submissions in the light of the material on record. Careful perusal of the testimony of PW-3 shows that said witness has remained silent on the calculation made with regard to investment. His entire deposition appears to be revolving around the issue of networth only. In view of the fact that PW-3 was not an expert witness, his report filed with the IO during investigation, shall be treated only as his statement under Section 161 Cr.P.C and such report cannot be adduced in the evidence except to contradict him. The contents of such reports cannot be proved just by exhibiting them as same is impermissible due to the bar 162 Cr.P.C (corresponding Section 181 of BNSS, 2023). While the witness (PW-3) has remained silent as to the calculation made by him with regard to the claim of investment made by accused company. His testimony is also silent on the formula employed by him to calculate the investment. Admittedly, the term 'investment' was neither defined in Companies Act, 1956 nor in Companies Act, 2013.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 192 of 271
106. In this regard, I may refer to the judgment C. Chenga Reddy and ors v. State of Andhra Pradesh (1996) 10 SCC 193 decided on 12.07.1996, wherein, one of the issue before by the Hon'ble Apex Court was that whether technical reports prepared during investigation are admissible or hit by bar of Section 162 Cr.P.C and it was held that the technical reports prepared during investigation are hit by Section 162 Cr.P.C and cannot be relied upon except to contradict the witness. The relevant para of the judgment reads under :-
"20. It appears to us that the trial court and the High Court were greatly influenced by the technical report Ex. P-11 prepared by PW 12 Shri K. Ram Mohan Rao to hold the appellants guilty. In this report, PW 12 inter alia pointed out various irregularities committed by the appellants while preparing the estimate, nomination of the contractor for the execution of the work and drawing up of the agreement with the contractor etc. He also opined that the corrections had been made in the estimate Ex. P-4 with a view to conceal facts and project a false fact situation. This report is the sheet- anchor of the prosecution case but in our opinion it could not have been relied upon as it was clearly inadmissible in evidence and the opinion of the High Court to the contrary is not acceptable. PW 12 Shri K. Ram Mohan Rao was serving in the Irrigation Department when he was entrusted with the task of assisting the investigating officer of ACB during the investigation in this case. Perusal of Ex. P-32 shows that he had been issued specific orders to report to the ACB and assist the investigating agency. He prepared his report Ex. P-12, during the course of the investigation and submitted it to PW 19, the investigating officer on 30-6-1984 after the FIR in this case, Ex. P-24, was registered by PW 19 on 17-5-1982. PW 12 was examined by the investigating officer after he had submitted the report and his report forms a part of his statement recorded by ACB under Section 161 CrPC. Under these circumstances the observations contained in report Ex. P-11, which technically and factually form a part of the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 193 of 271 statement of PW 12, recorded during the investigation of the case by PW 19 are hit by Section 162 CrPC. No statement made by any person to a police officer during the course of investigation can be used for any purpose at any enquiry or trial in respect of any offence under investigation at the time when such statement was made, except for the purpose of contradicting a witness as provided under Section 145 of the Evidence Act, 1872. Admittedly, Ex. P-11 has not been used for any of the purposes envisaged by Section 145 of the Evidence Act but as a substantive piece of evidence. The opinion of the courts below that the statement contained in Ex. P-11 was not hit by Section 162 CrPC on the ground that PW 12 was an expert within the meaning of Section 45 of the Evidence Act and his report Ex. P-11 submitted to the investigating officer was as such not hit by Section 162 CrPC is clearly erroneous as PW 12 does not qualify as an expert within the meaning of Section 45 of the Evidence Act. Even in his own deposition, he has nowhere stated about his technical 'qualifications', 'expertise' or 'experience' in this particular field to render "expert opinion". There is no material on the record to show that PW 12 possessed any particular skill which entitled him to "draw conclusions" relevant to the matter entrusted to him by the investigating officer. We are, therefore, of the opinion that PW 12 is not an 'expert' within the meaning of Section 45, Evidence Act and Ex. P-11 was hit by the bar of Section 162 CrPC and was inadmissible in evidence and could not have been relied upon in the criminal trial to fasten criminal liability on the appellants."
107. Considering the fact that PW-3 has nowhere deposed about the calculations allegedly made by him regarding investment on the basis of financial documents of the accused company, his report Ex.P- 144/PW-3 cannot be read in evidence to prove said fact as the same shall be hit by provision of Section 162 Cr.P.C (181 of BNSS, 2023). Pertinently, even the other witness PW-5 did not depose anything on the investment issue nor he had filed any report in this regard.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 194 of 271
108. Even with respect to investment, there was no minimum benchmark laid down in the guidelines of Ministry of Coal or the Screening Committee nor the Ministry of Coal provided any defined formula for calculating the investment by the applicant companies. The lack of any objective criteria in the guidelines became the reason for said ambiguities in the meaning of these financial terms, which were interpreted by applicants as per their own subjective understanding. In view thereof, no criminality can be attributed to accused persons for furnishing said information, which they bonafidely believed to be true.
109. Even otherwise, all the figures used for calculation of investment and networth were taken from the annual reports and balance-sheets, which were duly annexed with the application form (D-5) and were readily available to the Screening Committee/Ministry of Coal to cross-check the authenticity of the data provided by the accused company/A-1. The genuineness of said documents has nowhere been disputed by CBI.
110. As regard the discrepancies of the financial figures in the feedback form, I may note that filing of feedback form and presentation before the Screening Committee were the chance events, which were never contemplated by Ministry of Coal at the time of inviting application for allocation of captive coal block. This additional stage was introduced just to ascertain the latest status/stage of preparedness of the applicant companies with respect to their EUPs as there happened to be a delay of 11 months since the submission of the application form.
111. Even the absence of feedback form or CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 195 of 271 presentation was not a disqualification for consideration of the applicant for its suitability for allocation of coal block by the Screening Committee and same is evident from Para Nos.6 and 7(1) of the minutes of the meeting of 36 th Screening Committee held on 03.07.2008 Ex. P-231/PW-17 (Colly.), D-24 wherein, it was mentioned that the companies who did not appear for the presentation despite notices issued to them, their applications have been considered as per the information submitted by them in their application forms.
112. In view of the above discussion, there is no justifiable reason to presume that the alleged inflated claims of the accused company SKS (A-1) qua its net worth or investment in its application (D-5) or feedback form (D-29) were false to the knowledge of accused persons or that they were made with any dishonest intention. The material on record is highly insufficient to establish any mens rea on the part of accused to cheat Ministry of Coal by raising said inflated claims.
113. Assuming for the sake of argument that the networth and investment necessarily bear the same meaning as sought to be attributed by the prosecution and the information regarding networth and investment furnished by the accused is false. Nevertheless, the mere existence of an alleged factual incorrectness does not ipso facto attract criminal liability unless it induces anyone or leads to any deception.
114. As is evident from the record, the Screening Committee had allocated coal blocks to various companies, which were having far lesser networth than SKS (A-1). It CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 196 of 271 clearly shows that even the networth of Rs. 146 crores as attributed by CBI to be the actual networth of SKS (A-1) as on 12.01.2007, would not have put any embargo upon the Screening Committee to consider SKS (A-1) for allocation of coal block especially, when the case of SKS (A-1) was not of any proposed EUP but it was already having an established integrated steel plant of 0.27 MTPA capacity as on the date of application. As pointed out above, the companies like M/s AMR Limited with the networth of only 1.96 crore, had also been allocated coal blocks by the Screening Committee for their proposed EUP of iron and steel plant, which was yet to be established. Pertinently, the capacity of the EUP proposed to be achieved by AMR was 1 MTPA though as per Ministry of Steel's norms it was assessed to be 0.3 MTPA to be commissioned before December, 2010. Whereas, the case of SKS (A-1) was on far better footing as it was not the case of any proposed EUP. At the time of filing application SKS (A-
1) already had the EUP with already installed capacity of 0.27 MTPA.
115. An argument has been raised on behalf of CBI that the aforementioned fact that Screening Committee had allocated coal block to many other companies with lesser financial strength, has no bearing on the instant case for the reason that all the allocations were subsequently cancelled by the Hon'ble Apex Court in Manohar Lal Sharma (Supra) on account of the malpractices adopted by the members of the Screening Committee in the allocation of coal blocks. However, I am of the opinion that in absence of any allegation of connivance of any public servant with the present accused, the said argument is precarious and liable to be rejected. Lack of objective CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 197 of 271 criteria in the guidelines framed by the Ministry of Coal and lack of transparency in the allocation process, were few major reasons which led to cancellation of allocation of coal blocks. The entire process of allocation was found to be marred by opaque governing policies and procedural improprieties and the same led to the scrapping of coal block allocation.
116. Moreover, as per prosecution own witness PW-3, the calculations made by him regarding networth of SKS (A-
1) were based on the information contained in the annual reports/balance-sheets of SKS (A-1), which were provided to him by the IO at the time of preparing the report dated 08.01.2015 Ex.P-144/PW-3(D-166). Pertinently, both the said documents i.e. annual reports and balancesheets were duly annexed by the company SKS (A-1) with its application dated 12.01.2007 (D-5). Thus, the Screening Committee also had the access to said documents and could have verified the authenticity of the financial information furnished by SKS (A-1). It is nowhere the prosecution case that any false information was provided in said documents or that said documents annexed with the application were fabricated or forged.
117. It is worthwhile to mention that during investigation, IO had examined number of members of the Screening Committee and also recorded their statement under Section 161 Cr.P.C but for reason best known to prosecution, none of said witnesses were examined during trial to prove the fact that the alleged misinformation contained in the application (D-5) or in the feedback form (D-29), had influenced the decision of Screening Committee CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 198 of 271 in recommendation of name of SKS (A-1) for allocation of Vijay Central Coal Block or to say that on the basis of actual financial figures as attributed to SKS (A-1) by CBI, the Screening Committee would not have recommended its name for allocation of Vijay Central Coal Block or that, but for said inflated figures, its name was liable to be not recommended for allocation of said coal block by the Screening Committee. CBI has also failed to adduce any iota of material to show that any unsuccessful applicant of Vijay Central Coal Block was more deserving for having higher networth and investment than the networth and investment of SKS (A-1), as attributed to it by CBI.
118. The mere fact that as per guidelines issued by the Ministry of Coal, financial strength of the applicant company was one of the determinative factor for deciding the inter se seniority does not ipso facto establish it that alleged exaggerated claims of networth and investment were acted upon and led to inducement of the Screening Committee. Inducement being one of the essential ingredient of the offence of cheating, has to be necessarily proved as an independent fact with cogent and concrete evidence and cannot be presumed merely from these guidelines.
119. In view of the above discussion, prosecution case qua false claim of networth and investment is bound to fail on all the three essential ingredients of Section 420 IPC. The prosecution has failed to adduce any concrete and conclusive evidence to prove that said financial claims were false to the knowledge of accused; or that they were intentionally made to cheat the Screening Committee CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 199 of 271 or Ministry of Coal to procure the allocation of coal block; or that the Screening Committee or Ministry of Coal got induced by the alleged inflated claims.
Misrepresentation regarding Environment Clearance and Production Capacity
120. As per the prosecution case, both in the application form dated 12.01.2007 Ex.P-1 (D-5) and the Feedback form dated 07.02.2008 Ex.P-2 (D-29), SKS (A-1), claimed existing capacity of its EUP as 0.27 MTPA, which purportedly included its 4 th kiln (1x350 TPD). Whereas, investigation revealed that the consent to operate 4 th kiln was granted in its favour only on 05.04.2007 by Chhattisgarh Environment Conservation Board (CECB) vide letter dated 05.04.2007 Ex. P-133/PW-1 (page 748-773), meaning thereby, SKS (A-1) neither had the existing capacity of its plant as 0.27 MTPA nor it had the requisite environment clearance for 4th Kiln as on the date of filing of said documents.
121. For ready reference, the relevant portion of the feedback form (D-29) is reproduced hereunder:-
24. CLEARANCES FOR THE PROPOSED END USE PLANT I) Mention the clearances applied for
i) Mention the clearances All clearance almost obtained applied for
ii) Mention the clearances Chhattisgarh State Electricity Board, Pollution Control obtained Clearance, environmental Clearances, Water Availability, railway Siding
iii) Likely Date of obtaining all NA clearances
iv) Others All clearance almost obtained
122. Ld. Senior Counsel for A-1 and A-2 repelled the above contention with a strenuous argument that lack of consent to operate 4th Kiln has no bearing on the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 200 of 271 fact that A-1 had a sponge iron plant with installed capacity of 0.27 MTPA as on the date of its application and feedback form. It was argued that the application for obtaining the consent to operate a plant/kiln is filed only after the same is installed and ready for commissioning and in the instant case, SKS (A-1) vide letter dated 25.11.2006 Ex.P-138/PW- 1, had applied with CECB for the consent to operate the 4 th kiln of sponge iron plant and that itself shows that the same was ready for trial commissioning even prior to 25.11.2006. It was further argued that since sponge iron was an exercisable item, ER-7 return dated 31.03.2008 Ex. P- 148/PW-4 (colly) (D-179), was filed with excise department, wherein 4th kiln of iron sponge plant of SKS (A-1) was shown to be installed on 26.07.2006.
123. With regard to the aforementioned issue of misrepresentation in respect of requisite clearance from CECB, both the prosecution as well as the defence has drawn attention to the testimony of PW-1 Anoop Kumar Behre, who at the relevant time was posted as Superintendent Engineer in Head Office, CECB. PW-1 had handed over the relevant files Ex.P-88 (D-189) and Ex. P-89 (D-190) pertaining to the request of SKS (A-1) for different clearances filed with CECB from time to time.
124. Perusal of the file Ex.P-89 (D-190), shows that vide letter dated 31.08.2006 (D-190, page 546), SKS (A-1) had applied CECB for consent to establish expansion of their plant in respect of which, Ministry of Environment and Forest (MOEF) had already accorded environment clearance on 25.08.2006 and CECB had already given its No Objection vide letter dated 10.02.2006. Pursuant to said CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 201 of 271 request of SKS (A-1), the permission to establish the proposed expansion (from 0.192 MTPA to 0.27 MTPA) was accorded by the CECB vide its letter dated 12.10.2006 Ex. P-130/PW-1.
125. Subsequently, vide letter dated 26.10.2006 Ex.P-131/PW-1 (D-190 page 578 to 582) and letter dated 25.11.2006 Ex. P-138/PW-1, SKS (A-1) applied to CECB for consent to operate for expansion of production capacity under Air and Water Act and only pursuant to said letters, consent to operate was accorded by CECB in its favour vide letter dated 05.04.2007 Ex. P-133/PW-1 (D-190, page 748 to 773).
126. It is necessary to point out that in the formal charge, the false claim regarding clearances is alleged to have been made only in the application dated 12.01.2007 and there is no allegation of any false claim regarding environment clearance in the feedback form. As per the formal charge, since there was no consent to operate the 4th kiln, which was inclusive in the alleged existing capacity of sponge iron plant of 0.27 MTPA, even the claim regarding existing capacity was a false claim.
127. Careful perusal of the application dated 12.01.2007 (D-5) shows that in column 24, against Query
(i) regarding 'Clearances applied for', it was mentioned 'All clearances almost obtained'. Against Query (ii) qua 'clearances obtained', the response given was 'Chhattisgarh State Electricity Board, Pollution Clearance, Water availability, Railway siding'. The very mention of the word 'almost' in the response to Query (i), indicates that the company SKS (A-1) was in the process of obtaining CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 202 of 271 clearances meaning thereby, that some of the clearances were yet to come, though the process had already been initiated. As noted, even the permission to operate the 4 th Kiln or to start its commissioning, had already been applied with CECB vide letter dated 26.10.2006 Ex. P-131/PW-1 (D- 190 page 578-582) i.e. much prior to the filing of application dated 12.01.2007 (D-5).
128. From the aforementioned correspondence between SKS (A-1) and CECB, it is quiet clear that SKS (A-
1) was already having installed capacity of 0.27 MTPA as on the date of application and before installation of said capacity, it had sought various requisite clearances from the Ministry of Environment and Forest (MOEF). However, the application of SKS (A-1) for obtaining permission for the commissioning of its sponge iron plant of 0.27 MTPA capacity was pending consideration with CECB on the date of application dated 12.01.2007 (D-5) and the consent for commissioning of the plant was accorded to it only on 05.04.2007. It appears only in view of said pending application, the SKS (A-1) in its application dated 12.01.2007, did not outrightly said that all the clearances had been obtained rather, the disclosure was to the effect that the clearances had been 'almost' obtained.
129. Even with regard to the capacity of the EUP, I do not find any falsity of claim. Because, at the time SKS (A-1) had applied for the consent for operation of the expanded capacity of 0.27 MTPA vide its letter dated 26.10.2006, which was accorded to the company vide letter dated 05.04.2007, it already had the installed capacity of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 203 of 271 0.27 MTPA, which was ready for commissioning and operation.
130. Even assuming for the sake of argument that the claim regarding the clearance and capacity were false but, again the same will not ipso facto attract criminal liability unless it was done with some dishonest intention. For the reason that SKS (A-1) had already applied for requisite permission for operation of commissioning of 4 th Kiln much before it had applied for allocation with the Ministry of Coal, there appears to be no such dishonest intention on their part to cheat the Ministry of Coal or Government of India, as alleged by the prosecution. The application dated 26.10.2006 Ex. P-131/PW-1 filed by SKS (A-1) for seeking consent to operate 4 th kiln was already pending with CECB and said application was moved much prior to the filing of the application dated 12.01.2007.
131. Furthermore, copy of the letter dated 25.08.2006 of the Ministry of Environment and Forest vide which permission for expansion of plant from 0.192 MTPA upto 0.27 MTPA was accorded to SKS (A-1), was duly attached with the application dated 12.01.2007 (D-5), which also shows intention was never to hide any material information or to mislead the Screening Committee or Ministry of Coal with any false claim in this regard.
Misrepresentation with regard to Land
132. Now moving to the third allegation relating to misrepresentation in respect of availability of land with the accused company SKS (A-1). As per prosecution case, SKS (A-1) dishonestly and fraudulently claimed to have 300 acres and 500 acres of land in its possession as on the date CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 204 of 271 of application form dated 12.01.2007 (D-5) and feedback form dated 07.12.2008 (D-29) respectively. The relevant extract are reproduced as under :-
Application form dated 12.01.2007 (D-5) 18 LAND YES NO Remarks if any
i) Requirement (Sq. 500 Acre Vide MOU's dt 16 Aug 2004 and 06 Oct 2006 with Km/Hectare) Govt. of Chhatisgarh providing all required assistance for procurement of coal, iron and water from any sources. Copies of MOU's enclosed.
ii) Identified 500 Acre
iii) Applied for 500 Acre
Acquisition
iv) Partly Acquired 300 Acre WE had acquired at Siltara Industrial Growth Centre,
Phase-II, 18th Mile Stone, Bilaspur Road, Rajpur, Chhattisgarh.
v) Likely date of 31-12-07
full possession
vi) In possession 300 Acres
vii) Others
Feedback form dated 07.02.2008 (D-29)
5. Land
(a) Total requirement 500 Acres
(b) Already acquired 500 Acres
133. As per prosecution case, the registered sale deeds provided by SKS (A-1) during the course of investigation however, showed availability of only 268.37 acres of land in the name of SKS (A-1) as on 12.01.2007 and 305.82 acres on 07.02.2008. Rest of the sale deeds were found to be of land parcels, which were either in the individual names of the directors Anil Gupta, Deepak Gupta or Mahavir Prasad Gupta or in the name of its group company Shri Krishna Structures Pvt. Ltd.
134. As per chargesheet, investigation also revealed that the main plant area of the land in possession of the accused company as on 12.01.2007 was only 237.39 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 205 of 271 acres and 266.41 acres as on 07.02.2008. Even as per the Techno Economic Feasibility Report (TEFR) filed by SKS (A-
1) with the application form dated 12.01.2007, the plot in which the EUP plant was spread over was 8,30,000 meter sq. (205 acres) and the additional land of 100 acres was required to be procured for the additional capacity of 3 x 350 TPD DRI plants, thereby, making it clear that the claim of SKS (A-1) regarding having acquired 300 acres of land at Siltara, Raipur at the time of filing application dated 12.01.2007 was contrary to aforementioned report.
135. The Defence Counsels however, vehemently opposed the above allegations by submitting that TEFR was the project report prepared by a technical expert where tentative requirement of additional land for proposed expansion of plant was given, but it has nothing to do with the actual status of land in possession with the company (SKS/A-1). Hence, any inference regarding claim of available land, drawn by CBI from said report is totally unjustified.
136. It was further argued that as on the date of application dated 12.01.2007, the company had 313.47 acres of land in its possession, out of which 268.36 acres of land was in its own name; 25.99 acres of land was in name of Anil Gupta (A-2), Deepak Gupta (A-3) and Mahavir Prasad Gupta, who are the directors of the company SKS (A-1) and 19.12 acres of the land was in the name of its group company Shri Krishna Structures Private Limited, having share holding of more than 40 % in SKS (A-1). It was argued that lands in the name of above mentioned directors and group companies were also purchased only for CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 206 of 271 the purpose of said EUP at Siltara, Raipur and were in possession of SKS (A-1).
137. The above position of land holding in the name of SKS (A-1) and in the name of its directors and the group company, has not been denied even by the prosecution during the course of arguments. However, it has been forcefully contended by Ld. Sr.PP that since SKS (A-1) was the applicant before the Screening Committee, it was required to disclose the status of only its own land i.e. the land which was in the name of the company and there was no justification for A-1 or its directors A-2 and A-3 to include the land which was in the individual name of the directors or other group companies.
138. On the issue of land, CBI has examined 06 witnesses, out of them PW-9, PW-13 and PW-34 are the witnesses from Sub-Registrar offices, who had brought the record of the title documents pertaining to the some of the subject land parcels. PW-37 is the witness from the State Bank of India, who also brought the record of few land parcels lying mortgaged with the bank. But as already noted above, the title documents of the subject land collected during the investigation have not been disputed from either side.
139. PW-12 and PW-36 are other two material witnesses pertaining to the issue of land. PW-12 Sh. H.G. Aggarwal is the Head of Korus Engineering Solutions Pvt. Ltd, who had prepared the Techno Economic Feasibility Report for the integrated steel plant project of the accused company and said report was enclosed as one of the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 207 of 271 documents with the application dated 12.01.2007 (D-5) filed by SKS (A-1).
140. However, the testimony of PW-36 Mukesh Verma, AGM (Finance and Accounts), M/s SKS Ispat and Power Limited is material in this regard. As per his version, he had joined said company as Accountant on 07.09.2004. He proved on record various letters of Anil Gupta (A-2) vide which he (A-2) had handed over records pertaining to the land purchased by the company A-1 or its directors or its group companies for the purpose of their integrated steel plant at Village Siltara, Raipur, Chhattisgarh. The said letters as well as the accompanying documents are part of chargesheet and were admitted by accused under Section 294 Cr.P.C and same are available on record as Ex. P- 4(colly) to Ex. P-25 (colly) Ex.P-49 (colly), Ex. P-50(colly), Ex. P-72(colly) to Ex.P-78(colly) and Ex.P-80(colly). As per the version of said witness, the main plant of SKS Ispat and Power Ltd (A-1), was at Siltara and the villages Gogaon, Mowa, Parsaduda, Nardha and Saddu were at a distance of 12 km, 21 km, 60 km, 21 km and 20 km respectively from village Siltara.
141. In his cross-examination, PW-36 deposed that some of the land parcels were purchased at some distance from the main plant area for making the provisions for ash dumping, staff welfare, logistics and iron ore crusher. He deposed that iron ore was to be received from Jagdalpur by railways and after processing it in the crusher plant, the sized ore used to be transported to the main plant. He further deposed that the ash generated from the plant could not be dumped at a public place and it was required to be CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 208 of 271 dumped at a distant place. He admitted that M/s Shri Krishna Structure Pvt. Ltd was a shareholder and associate company of SKS (A-1).
142. As per material on record, A-1 had entered into two MoUs with the Chhattisgarh State Industrial Development Corporation Limited, Raipur (CSIDC) and both the said MoUs were filed by A-1 with its application dated 12.01.2007 (D-5). The first MoU dated 16.08.2004 is part of Ex.P-277/PW-25(Colly.)(D-211), which was executed at the time when SKS (A-1) was desirous of setting up its sponge iron plant of 0.27 MTPA capacity in Raipur, Chhattisgarh. In said MoU, CSIDC assured SKS (A-1) to facilitate it with all necessary assistance for procuring optimum land required for the project and for securing expeditious approvals under the purview of State Government for speedy implementation of the project. The 2nd MoU was executed between SKS (A-
1) and the State of Chhattisgarh on 06.10.2006, which is also part of D-211 Ex. P-277/PW-25 (Colly). The said MoU was executed at the time when SKS (A-1) was intending to expand the capacity of its aforementioned EUP from 0.27 MTPA to 0.33 MTPA. It is on account of said MoUs, the representatives of State Government, who were present in the Screening Committee meeting held on 02.07.2008, gave their positive nod in favour of SKS (A-1).
143. It was argued on behalf of the defence that land for the project was purchased from villagers directly or through some brokers from time to time but on account of various reasons including the adjudication of stamp duty, availability of stamp paper and availability of vendor and vendee, there used to happen a delay of few CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 209 of 271 months in the execution of sale deeds. However, the entire payments/sale consideration used to be made to the sellers at the time of execution of agreement to sell and possession of land also used to be immediately handed over by the vendors upon receipt of sale consideration.
144. It was further argued that vide letter dated 22.05.2015 Ex. P-78 (Colly)(D-159 page 44 to 47), A-2 had provided the IO with the certified copies of the sale deeds of 75.96 acres of land purchased by A-1 and its group companies as Annexure A-I and A-II. The agreement to sell in respect of said land were executed much before 07.02.2008, which is the date of feedback form and the sale deeds in respect of all of said land parcels were executed in the same very year before July, 2008 i.e even prior to recommendation of Screening Committee made in its meeting held on 03.07.2008.
145. I have carefully perused the aforementioned letter dated 22.05.2015 (D-159) and the documents annexed therewith, which were duly verified by the IO during the course of investigation. As per the details of area of said land parcels mentioned in the Annexure I and II of said letter (D-159), 31.88 acres of land was purchased in the individual name of the company A-1 on different dates before July, 2008. It is claimed by the defence that the agreement to sell in respect of all said parcels of land were executed much prior to the date of feedback form.
146. It is a matter of record that A-1 had moved an application for seeking permission to examine the vendors of said land parcels in defence evidence but the application was dismissed by my Ld. Predecessor vide order CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 210 of 271 dated 19.09.2025 with a liberty given to A-1 to argue said issue with the assumption that payments were made prior to the date of registration of the sale deeds. The court also observed that "as far as the agreements to sell are concerned the agreements are always entered into prior to the date of sale deed".
147. At the cost of repetition, I may note here that the SKS (A-1) had not applied for allocation of coal block for any new EUP as its steel plant of 0.27 MTPA capacity in Siltara, Raipur, for which the allocation of coal block was sought, was already established. Even the Techno Economic Feasibility Report (TEFR) filed by SKS (A-1) with the application form dated 12.01.2007 (D-5), the said plant of 0.27 MTPA capacity was spread over the area of 205 acres of land and the additional land of 100 acres was required for the additional capacity of 3 x 350 TPD DRI plants i.e. for the proposed expansion of its plant capacity, only 100 acres of more land was required.
148. Even going by the title documents provided to the IO by A-2 during the course of investigation, the company SKS (A-1) had around 270 acres of land in its individual name as on the date of application i.e. on 12.01.2007. Rest of the land around 45.11 acres was in the name of its directors and associate company. It has been vehemently argued on behalf of the accused that even said land was meant for the use of integrated plant at Siltara, Raipur and was in possession of company SKS (A-1) only.
149. Assuming for an argument sake that 47.45 acres of land, which was registered in SKS (A-1) individual name subsequent to 07.02.2008, was also in its possession CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 211 of 271 prior to said date and entire payment was already made to vendors, even in that scenario, the total land available with SKS (A-1) as on 07.02.2008, comes out to be 315.82 acres only. Meaning thereby, that the claim of SKS (A-1) having acquired 300 acres of land as on 12.01.2007 and 500 acres of land on 07.02.2008 was incorrect. The land parcels in the individual name of the directors of the company (A-1) or its group companies cannot be treated as the land belonging to A-1 especially, in absence of any agreement entered into by A-1 with the directors or the group companies that they would be transferring their lands in the name of A-1 after the allocation of coal block or anytime before that.
150. Now, the question that arises is whether the actual status of available land with SKS (A-1) i.e. approx. 270 acres on the date of application (12.01.2007) and 348 acres (316 acres+31.8 acres) as on 07.02.2008 i.e on the date of feedback form, would have taken the accused company SKS/A-1 out of consideration by the Screening Committee for recommending its name for allocation of Vijay Central Coal Block, especially, when even as per Techno Economic Feasibility Report (TEFR) of January 2007, which was annexed with the application dated 12.01.2007 (D-5) only 100 acres of more land was required for expanding the existing capacity of the plant of 0.27 MTPA to 0.33 MTPA, which SKS (A-1) was required to achieve by 2010.
151. Indisputably, there was no benchmark of any minimum threshold for networth, investment, EUP capacity or even for land availability for considering the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 212 of 271 eligibility of the applicant for allocation of Coal Blocks. Nevertheless, said factors were cumulatively determinative for ascertaining the preparedness of the applicant for the development of proposed EUP as well as for development allocated coal block. The availability of land, networth and investment with the applicant were certainly going to give it a competitive edge over the other competing applicants with lesser available land, networth and investment.
152. But, admittedly, based on above parameters, no comparative chart of seniority of competing applicants had been prepared by the Screening Committee. No material has been brought on record by CBI to suggest that based on said false claims any other more deserving applicant had been ignored by the Screening Committee for recommending its name for said coal block. No witness from the Screening Committee has been examined, who could throw some light as to what all weighed in the mind of the members of Screening Committee for recommending the name of SKS (A-1) for Vijay Central Coal Block or to tell the court whether said false claims had influenced their decision in recommending the name of SKS (A-1) for said coal block.
153. It is important to point out that in para 18 of the application form dated 12.01.2007 (D-5), wherein information regarding land was sought from the applicants, there were 07 specific queries against which the responses were sought in 'Yes' or 'No'. The responses given to the queries were as under :-
18 LAND YES NO
i) Requirement (Sq. Km/Hectare) 500 Acre
ii) Identified 500 Acre
iii) Applied for Acquisition 500 Acre CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 213 of 271
iv) Partly Acquired 300 Acre
v) Likely date of full possession 31-12-07
vi) In possession 300 Acres
vii) Others
154. As is evident from the above table, immediately after a query regarding 'Applied for Acquisition', there are queries 'Partly Acquired', 'Likely date of full possession' and 'In Possession'. To both the queries 'Partly Acquired' and 'In possession', same response '300 acres', has been given in the application dated 12.01.2007 (D-5). The phrase 'Partly Acquired', is an ambiguous term because, it may mean land partly acquired out of total identified land. It may also mean to be the land in respect of which acquisition is partly done i.e. the process for acquisition has been initiated but yet not complete and that may include those land parcels where agreement to sell had been entered into with the vendors but sale deeds were yet to be executed. Even in the instant case, many of the land parcels in respect of which agreement to sell were executed and possession were also handed over, the sale deeds were executed after the date of application but, much before the date when the Screening committee recommended the name of SKS (A-1) for coal allocation i.e. prior to 03.07.2008. Such unclear and ambiguous terms in the application format were amenable to different interpretation by different persons as per their own subjective understanding.
155. As regard the prosecution argument relating to deficiency of land in the main plant area, to my understanding this distinction of main plant area and other CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 214 of 271 land is too far fetched. Because, the applicants were required to disclose about the land availability for their end use project in a composite manner. From such restrictive format of answers, no such intention of the Ministry of Coal to seek disclosure for the available land only for the main plant area, can be gathered. Had their been any such intention to ask for the available land for main plant and not the land for other ancillary purposes relating to the EUP, the queries could have been easily put in a modified manner. Indeed, in the application format the responses in column no. 18 pertaining to land, have been sought only in 'yes' or 'no'. Such restrictive format of answers tend to leave the responses unclear and unexplained. Now, making someone liable for having given wrong and incorrect figures and attributing criminal intent upon him for doing so, is completely unjustifiable.
156. In view of above discussion there is no conclusive evidence to establish any element of mens rea on the part of A-1 or its representatives/directors (A-2 to A-5) for the alleged misrepresentation in respect of the available land. Material on record is also highly insufficient to prove that the decision of Screening Committee in recommending SKS (A-1) for allocation of Vijay Central Coal Block was induced by the said inflated claim of accused persons.
Finding on Point of Determination nos. (1),(2) and (3)
157. In the light of aforementioned discussion on the alleged false claims in the application dated 12.01.2007 (D-5) and feedback form dated 07.02.2008 (D-
29) i.e. Misrepresentation regarding (1) Networth and Investment; (2) Environment Clearance and Production CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 215 of 271 Capacity and (3) available land, the Point of Determination no.1, 2 and 3 are answered in negative in favour of the accused and against the prosecution.
Point of Determination no. (4) (4) Whether allocation letter dated 01.11.2011 is a valuable security? If so, whether it was issued as a result of any inducement?
158. In the instant case, in order to determine the culpability of the accused persons for the offence punishable under Section 420 IPC, it is also necessary to consider the following issue :-
"Whether, the allocation letter dated 01.11.2011 is a valuable security for SKS (A-1) within the meaning of Section 420 IPC? If so, whether it was induced on account of the misinformation furnished by SKS (A-1) in the application form (D-5) and feedback form (D-29)?"
Valuable Security
159. As already noted above, for attracting any liability under section 420 IPC, mere existence of an alleged factual incorrectness does not ipso facto attract criminal liability unless it induces anyone or leads to delivery of any 'property' or 'valuable security' by the person so deceived. Thus, to attract the provision of Section 420 IPC, the prosecution has to prove not only the act of cheating but it also needs to prove that the act of cheating resulted into an inducement to deliver any property to any person; or to make, alter or destroy, the whole or any part of valuable security, or anything, which is signed or sealed, and which is capable of being converted into a valuable security.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 216 of 271
160. To put it differently, the ingredients of the offence are that the person deceived delivers to someone a 'valuable security' or 'property' and he was dishonestly induced to do so in consequence of having been deceived by the accused. Although in the preceding paras, this aspect of inducement as a consequence of alleged deception has already been discussed under different heads of misrepresentations alleged against the accused i.e. alleged false claims pertaining to (i) Networth and investment; (ii) Environment clearance and production capacity and (iii) Available land. However, it is necessary to discuss this issue also in reference of the nature of rights created in favour of SKS (A-1) under the allocation letter dated 01.11.2011.
161. Because, it has been vehemently contended on behalf of the accused that in said allocation letter, Coal India Ltd. was designated as a leader and was given the right of mining lease to extract the entire geological reserve of said block, while SKS (A-1) was made an associate and out of total 57.471 MT geological reserve of said block, SKS (A-1) was given a small share of 16.08 MT for its End Use Project at Siltara, Raipur, Chhattisgarh. The said rights created in favour of SKS (A-1) were more in the nature of coal linkage whereas, the parameters of networth, financial strength, land availability EUP capacity and environment clearance were determinative only for the purpose of assigning mining rights for captive use to the applicant. Therefore, when SKS (A-1) was not assigned any mining rights by the Screening Committee or Ministry of Coal, there is no question of said factors having weighed in the mind of members of Screening Committee so as to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 217 of 271 influence them to recommend SKS (A-1) for allocation of Vijay Central Coal Block.
162. Admittedly, in the instant case, pursuant to allocation, not a single gram of coal was either extracted by Coal India Limited from Vijay Central Coal Block nor any coal was supplied to SKS (A-1). After the issuance of allocation letter dated 01.11.2011, no legally binding and enforceable agreement as contemplated in para (vii) of allocation letter, was filed with the Ministry of Coal, by the allocatees nor any mining lease was executed by the State Government in favour of Coal India Limited (designated leader) in respect of Vijay Central Coal Block. Ultimately, pursuant to the directions of Hon'ble Apex Court in Manohar Lal Sharma (Supra), all the allocation of coal blocks through Screening Committee route including the subject allocation in the instant case, came to be cancelled/revoked by the Central Government.
163. It has been strenuously argued on behalf of accused persons that the allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10), vide which Vijay Central Coal Block was jointly allocated in favour of SKS (A-1) and Coal India Limited, cannot be construed as 'valuable security' within the meaning of Section 420 IPC because, no bankable right has been created in favour of SKS (A-1) vide said document. Rather, in said allocation letter, the right of mining and to get a mining lease executed with the State Government for said purpose, has been exclusively given to Coal India Ltd.
164. The above contention has been strongly repelled by Ld. Senior PP for CBI by placing reliance on the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 218 of 271 judgment of Hon'ble Apex Court in 'Manohar Lal Sharma Vs. Principal Secretary and ors' (2014) 9 SCC 516, wherein allocation letter issued by the Ministry of Coal was held to be a valuable security.
165. In order to appreciate the above rival contentions of the parties, it is necessary to first understand the meaning of valuable security. In common parlance, a valuable Security is any document that acts as a legal proof of ownership, a financial debt, or a right to property. It is a document that holds a monetary or legal value and can be bought, sold, transferred or used to prove that a person has a legal right to something or is under a legal obligation. Valuable security is a term generally used to refer to a document that represents an interest in property, such as a sale deed, promissory note, share certificate, debenture bond etc.
166. Section 30 of Indian Penal Code also defines valuable security as under:-
Section 30: "Valuable security"
The words "valuable security" denote a document which is or purports to be a document whereby any legal right is created extended transferred restricted extinguished or released or whereby any person acknowledges that he lies under legal liability or has not a certain legal right.
Illustration A writes his name on the back of a bill of exchange as the effect of this endorsement is to transfer the right to the bill to any person who may become the unlawful holder of it the endorsement is a valuable security.
167. I have carefully perused the allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10 page 1192), CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 219 of 271 vide which Vijay Central Coal Block was allocated in joint names of SKS (A-1) and Coal India Limited (CIL). As per said allocation letter, the mining lease shall be obtained in the name of Coal India Limited, the leader company, which shall make all the investments and undertake all mining operations to develop and extract coal from the allocated block and the production from the mine shall be shared between the leader and the associate as per their respective specified proportion i.e 40.671 MT in favour of Coal India Limited & 16.8 MT in favour of SKS.
168. It was contended by the Ld Defence Counsels that the above arrangement in the allocation letter 01.11.2011 for supply of coal to SKS (A-1) of its specified share from the total mined produce of Vijay Central Coal Block, is more in the nature of coal linkage, which SKS (A-1) was already having with Coal India Limited and its subsidiaries for meeting the requirement of same very EUP at Siltara, Raipur and same was also clear from the allocation letter itself, which also mentioned that the coal produced from the block shall not replace any coal linkage given to associate company by Coal India Limited/its subsidiaries without prior permission of this Ministry. As per the allocation letter, the leader company shall supply the specified share of coal (16.8 MT) as recommended by the 36th Screening Committee, to the associate company (SKS/A-1) at a transfer price to be determined by the Government.
169. Pertinently, Coal India Limited, was never the applicant before the 36th Screening Committee. Rather, Coal India Limited itself was the part of 36 th Screening CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 220 of 271 Committee. Vijay Central Coal Block was initially recommended for allocation in the joint name of the applicants SKS (A-1) and M/s. Prakash Industries Ltd. (PIL) by the 36th Screening Committee in its meeting held on 03.07.2008. However, said recommendation for joint allocation in the name of SKS (A-1) and PIL never got the final approval of the competent authority on account of various intervening reasons.
170. Vijay Central Coal Block came to be finally allocated in the joint name of SKS (A-1) and Coal India Limited after the recommendations made by the Screening Committee in 03.07.2008 were revised in the subsequent meeting of the Screening Committee held on 04.10.2011 whereby, the proportion of the share 16.8 MT given to SKS (A-1) in the meeting of 03.07.2008 was held to be the same, though it was given to SKS (A-1) as an associate partner in the joint allocation with the Coal India Limited, who was designated as leader. The remaining share in the geological reserve of Vijay Central Coal Block to the extent of 40.671 MT was allocated in favour of Coal India Limited as leader.
171. The delay of about 03 years in the final allocation occurred on account of various issues which had cropped up at the end of competent authority in the Ministry of Coal and PMO. Firstly, the issues arose in relation to the surplus coal reserve of 0.734 MTPA of Vijay Central Coal Block as even after the adjusting the allocated shares of joint allocatees SKS and PIL (initial allocatees), there still remained a balance coal reserve.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 221 of 271
172. Secondly, some objections were raised by SKS/A-1 in its letter dated 07.07.2008 regarding false claim raised by PIL in respect of its existing capacity of the Plant as also noted in note sheet 36/N dated 10.07.2008 Ex- 228/PW17 (D-24), which led to re-examination of the matter by Ministry of Coal in consultation with Ministry of Steel.
173. The 3rd reason for the delay was the WP(C) 6449/2008 filed by PIL before Hon'ble Delhi High Court wherein, vide order dated 03.09.2009, the process of allocation of Vijay Central Coal Block was put to halt and the Central Government was directed to maintain status quo with respect to allocation of coal blocks to PIL. Subsequently, vide order dated 02.07.2010, after the SKS (A-1) moved an application as an intervener and was permitted to be impleaded in said writ petition, the Hon'ble High Court was pleased to clarify that the afore-mentioned order dated 03.09.2009, shall not create any fetter on the Central Government in making the final allocation to SKS (A-1).
174. Subsequently, pursuant to meeting of 36th Screening Committee held on 04.10.2011, a note dated 07.10.2011 Ex. P-259/PW-17 (Colly.) (pages 46/n to 50/n) was prepared vide which, it was proposed that the allocation of Vijay Central Coal Block to SKS (A-1) shall be made as per the recommendations of screening committee meeting held on 03.07.2008 for share of 16.08 MT Geological Coal Reserves from the said recommended block as an associate and the remaining coal reserve in the Vijay Central Coal Block may be allocated to Coal India Ltd. as the leader for CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 222 of 271 development of said block.
175. The aforementioned note was approved by the then Hon'ble Minister of Coal Sh. Sriprakash Jaiswal under his signature dated 11.10.2011 on the note sheet at page 51/n of D-10 Ex. P-242/PW-17. Vide note at page 55/n to 57/n of D-10, it was proposed that a draft allocation letter for Vijay Central coal Block to M/s Coal India Ltd. as the leader and SKS (A-1) as the associate under option-III may be approved. The said note was also marked by Secretary (Coal) to the then Hon'ble Minister of Coal Sh. Sriprakash Jaiswal, who approved it under his signature on 28.10.2011.
176. Pursuant to above, the allocation letter dated 01.11.2011 came to be finally issued by the Ministry of Coal. I have carefully perusal the allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10), issued in the name of Coal India Limited (CIL) and SKS(A-1), as well as the minutes of meeting of the Screening Committee dated 03.07.2008 containing recommendation of allocation of Vijay Central Coal Block in the joint name of SKS (A-1) and PIL (initial allocatees) and minutes of meeting dated 04.10.2011, proposing the allocation in the joint name of SKS (as associate) and Coal India Limited (as leader).
177. I have also carefully gone through the guidelines framed by Ministry of Coal for allocation of identified coal blocks for captive mining by the companies for their specified end use plants. The said guidelines are part of the advertisement published by the Ministry of Coal and were duly proved during the course of trial as Ex. P- 205/PW-17 (D-34, page 73 to 94). Para 6 of said guidelines CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 223 of 271 mentions that in order to promote scientific and proper mining, the larger blocks shall not be sub blocked into the smaller ones. It appears that in order to avoid sub blocking of the larger blocks, the Ministry of Coal also made the provision for allotment of captive blocks to the consortium of group of companies and in this regard following guidelines were framed in Para 7, which reads as under :-
"7. Allotment of Captive blocks to consortium of group of companies:-
(i) If requirement of coal by an applicant does not match with the reserves in a natural block then clubbing of requirements may be resorted to and in case a number of applicant companies form a consortium for utilisation of a block for their captive use, the same may be considered for allocation under a legally tenable arrangement.
(ii) More than one eligible and deserving companies will be allowed to do captive mining of coal by forming a joint venture coal mining company. The constituent applicant companies would hold equity in the joint venture company, in proportion to their assessed requirement of coal and the coal produced would be exclusively consumed in their respective end use projects. Distribution of coal would be in proportion to their respective assessed requirements.
(iii) One or more companies (to be called leader companies) from amongst the selected, could be allowed to do mining of coal in one or more captive blocks and the other companies (to be called associate companies) would get coal from the captive block in proportion to their assessed requirements. The local Coal India subsidiary could facilitate this arrangement by taking a nominal service charge. Leader companies will deliver coal to associate companies at a transfer prices to be determined by the Central Government."
178. As is clear from the above guidelines, in cases of joint allocations, three options were available with the shortlisted applicants. The 1 st option was to form a consortium under a legally tenable agreement. The 2 nd option was to form joint venture coal mining company CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 224 of 271 wherein the joint allocatees would hold equity in proportion to their assessed requirement of coal. Under the 3 rd option, one or more companies (leader company) from amongst selected companies could do the mining of the captive coal block and the other companies (associate companies) would get the coal in proportion to their assessed requirements. In case of 3rd option any local coal subsidiary on payment of nominal service charges, would facilitate the leader company to deliver coal to the associate companies at a transfer prices to be determined by the Central Government.
179. In the light of aforementioned guidelines, wherever the recommendations for any coal blocks are made for joint allocation in the name of two or more companies, the Ministry of Coal, before issuing any allocation letter in favour of joint allocatees, would first send them an option letter to call upon them to exercise one of the three aforementioned options and submit a legally tenable agreement duly signed by all the parties concerned to the Ministry within 30 days from the date of issue of said letter with the rights reserved with the government to reconsider allocation of block to the contemplated allottees in case, no response is received within the stipulated time.
180. One of such option letters, which is the part of Ex. P-320/PW-39 (colly) (D-25, page 57 to 59), is part of record. I have carefully perused the said option letter dated 07.10.2008 (D-25 page 57 to 59) issued in favour of 5 joint allocatees namely M/s Essar Steel Limited, M/s Ispat Industries Limited, M/s Mukund Limited and M/s IND Synergy Limited and M/s Kalyani Steel Limited, by the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 225 of 271 Ministry of Coal in respect of allocation of Behraband North Extension Coking Coal Block in the State of M.P.
181. With regard to the procedure which was required to be adopted in the cases of joint allocation, we may also refer to the note-sheet dated 26.07.2008 Ex. P- 32/PW-17 (colly) (D-24 page 46/N to 48/N) prepared by CA- I Section, Ministry of Coal, wherein it was recorded that in the light of PMO note no. 200/31/C/83/0-ES.I dated 21.07.2008, the Ministry may go ahead with the allocation of coal blocks already approved by the PMO. As per said note-sheet, in terms of Phase II, which was concerning the cases of joint allocation, it was decided to first seek the acceptance of the joint allocatees on the pattern of mining arrangement under any of the following 03 options devised by the Ministry of Coal:-
"Option I: The mining be carried out in consortium of two or more allocatees in any given block by constituting a joint venture/special purpose vehicle company wherein there would be equity stake and management participation from all the consortium partners. The production from the mine could be distributed among the consortium partners in proportion to their assessed requirement at the time of allocation, net of linkages, if any. The equity shares should be held in proportion to the assessed requirement of all the consortium partners.
Option-II: In this option, one allocatee company would be designated as the leader for the block and other allocatees would be designated as the associates for that block. The allocation would be made to the leader and the associates but the mining lease will be granted to the leader, all investments will be made by the leader, all mining operations will be carried out by the leader and the production from the mine will be shared between the leader and the associates in the ratio of their respective CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 226 of 271 assessed requirement at the time of allocation. The price at which the coal will be given to the associates would be determined by the Central Government/its agency and would be called the 'transfer price'.
Option:III In this option, for each block one allocatee would be chosen as the leader and other allocatees as associates. The allocation will be made to the group of leader and associates jointly but the mining lease of each block would be given to the designated leader who would make the investment and carry out the mining operations. The production from the mine will be shared between the leader and the associates in proportion to their actual requirement/assessed requirement at the time of allocation, whichever is less. In this option, the local CIL subsidiary company will have a role to play. They would arrange the transfer of coal from the leader to the associates as per the ratio determined at the time of allocation, at a price to be determined by the Central Government/its agency. The CIL subsidiary would be permitted to charge some nominal service charges."
182. As per afore-mentioned note-sheet dated 26.07.2008 Ex.P-32/PW-17 (colly) (D-24 page 46/N to 48/N), the allocation in respect of Urban Behraband North Extension and Vijay Central Coal Blocks as well as the cases of joint allocations where allocatees were earlier also allocated coal blocks, were decided to be re-examined as per the directions of PMO. But, in respect of all other cases where the approval was received from the PMO, Ministry of Coal decided to go ahead with the process of final allocation by first seeking the acceptance from the joint allocatees on the pattern of mining under any of the three options mentioned above.
183. However, in the instant case, on account of M/s Prakash Industries Ltd. (PIL) getting embroiled in the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 227 of 271 litigation and subsequently in the controversies of alleged false claims, which also led to CBI registering a case against PIL, the Screening Committee decided to allocate Vijay Central Coal Block in favour of SKS(A-1) jointly with Coal India Ltd. But, since Coal India Ltd. was a Public Sector Undertaking owned by Government of India and the other allocatee (SKS/A-1) was a private company, no option letter, as was issued in other cases for joint allocation, was issued to SKS (A-1) for seeking its acceptance to the joint allocation proposed by the Screening Committee in favour of Coal India Limited as leader and SKS/A-1 as associate and the Ministry of Coal straightaway issued the final allocation letter dated 01.11.2011 Ex. P-262/PW-17 (D-10, page 1192).
184. In this regard, note sheet 55/N (part of D- 10 Ex.P-238/PW-17) may also be referred, where it was recorded that no precedent similar to the instant case was found where the coal blocks have been allocated to joint allocatees under Option-III, except in two cases mentioned in clauses (a) and (b) of Para 10 of said notesheet, where Central Government had exercised Option-III and allocation letter was issued without any offer letter. In one case, one of the joint allocatees was some applicant government company and in other case, the shortlisted joint allocatee companies were unable to submit the option for development of allocated coal block.
185. It is worthwhile to also refer to note sheet 57/N dated 24.10.2011 (part of D-10 Ex.P-238/PW-17), which records that "The coal block (Vijay Central) may be allotted under Leader Associate model to Coal India Limited CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 228 of 271 and M/s SKS Ispat Power Limited. The offer was used to be made to private companies. Here the block is being allotted to Coal India Limited with a minor share of M/s SKS. We may, therefore, issue allocation letter as per DFA. Approval of minister may be obtained."
186. The above discussion makes it quiet clear that the arrangement of Leader Associate model for Coal India Limited and M/s SKS Ispat Power Limited for allocation of Vijay Central Coal Block is in deviation from extant guidelines contained in the advertisement issued by the Ministry of Coal for allocation of captive coal blocks, which are available on record as part of Ex. P-205/PW-17(D-34, page 73 to 94).
187. As per said guidelines, the allocation of captive coal blocks through the route of 36 th Screening Committee, was meant for the companies, who had applied with Ministry of Coal for allocation of identified coal blocks for the purpose of captive mining. Coal India Limited, which is a Central Government PSU operating under the control of Ministry of Coal, was however, never the applicant as it had never applied for the allocation of any coal block to the Ministry of Coal or Screening Committee. Indeed, Coal India Limited itself was the part of the 36th Screening Committee.
188. Coal India Limited (CIL) primarily conducts commercial mining to supply coal to various sectors, rather than acting as a captive miner for its own end-use projects. While Coal India Limited operates nearly all of its own mines but captive mining of identified coal blocks for which route of Screening Committee was adopted by the Central Government, is typically done by other companies engaged CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 229 of 271 in the business of manufacture of steel, cement and power generation for meeting fuel requirement of their plants.
189. As per the extant guidelines, the allocation of any identified coal block could be made in favour of the selected applicant companies either singly or jointly with other one or more shortlisted applicants. In case of a joint allocation in favour of two or more applicants, the option letter was required to be first issued to the joint allocatees wherein, they were given a choice to exercise one of the three options (I to III) given in the option letter and submit an agreement duly signed by all the concerned parties to the Ministry within 30 days of the issuance of the option letter.
190. The same is also evident from the above referred option letter dated 07.10.2008 Ex. P-320/PW-39 (colly) (D-25, page 57 to 59) issued by the Ministry of Coal in respect of allocation of Behraband North Extension Coking Coal Block. Vide said option letter dated 07.10.2008, the joint allocatees were given the choice to select for any of the three options for mining of the allocated coal block and were asked to decide the modalities mutually acceptable to them and enter into a final legally binding enforceable agreement opting any of the three options/arrangements. As per said letter, in case of exercise of option III, a tripartite agreement between the leader, associates and the local Coal India Limited subsidiary was required to be entered into and submitted with the Ministry of Coal within 30 days of the date of the allocation letter.
191. However, in the instant case, unlike other cases of joint allocation, no option letter/offer letter was CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 230 of 271 issued to SKS (A-1) for seeking its acceptance to the joint allocation contemplated by the Ministry of Coal and the reason for this is manifestly clear from the notesheet 57N dated 24.10.2011, already referred hereinbefore in Para
185. In said circumstances, the decision to designate Coal India Limited as leader and vesting it with the mining rights in respect of Vijay Central Coal Block and designating SKS (A-1) merely as an associate, was a unilateral decision of the Ministry of Coal without sending any offer to SKS (A-1) in this regard and without any acceptance coming from the side of allocatee SKS (A-1).
192. As per the allocation letter dated 01.11.2011, the production from the mine was to be shared between the leader and the associate as per their respective proportion i.e. 40.671 MT in favour of Coal India Limited (leader) and 16.8 MT in favour of SKS (associate). It also required the leader and associate to enter into an agreement as per option-III and submit it with the Ministry of Coal within 30 days of issuance of said letter. However, there is nothing on record that any such agreement was entered into between SKS (A-1) and Coal India Limited or submitted with Ministry of Coal at any point of time.
193. In order to correctly understand as to what nature of rights and obligations were created in favour of Coal India Limited and SKS (A-1) in the allocation letter dated 01.11.2011, it is necessary to minutely analyse its content in the light of the above referred guidelines issued by the Ministry of Coal. For ready reference, the allocation letter dated 01.11.2011, is reproduced as under:-
No.38011/2/2007-CA-1 (Part-III) Government of India CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 231 of 271 Ministry of Coal .....
New Delhi, dated 1" November, 2011 To (1) The Chairman-cum-Managing Director, (2) The Chairman-cum-Managing Director Coal India Ltd., M/s SKS Ispat & Power Limited, 10, Netaji Subash Road, 501-B, Elegant Business Park, Kolkata Andheri Kurla Road, J.B.Nagar, Andheri (East), Mumbai-400059, Maharashtra Subject: Allocation of Vijay Central coal block in the State of Chattisgarh for captive mining of coal by M/s SKS Ispat & Power Ltd. and M/s Coal India Limited.
Sir, I am directed to state that the Government has decided to make joint allocation of Vijay Central non-coking coal block in the State of Chattisgarh for captive mining of coal by M/s SKS Ispat & Power Ltd. for meeting their proportionate share of requirement of coal in their specified end use project (as per their application for Vijay Central coal block) as an associate and M/s Coal India Limited as the leader as per the details given in the table below:-
S. Name of the Block, Geological Name of Location EUP Share Requirement No Exploration Status Reserves(In Company of end Capacity (In MT) of Coal(per and UGIOC MT) use plant (in annum) MTPA) 1 Vijay Central 56.75 1 Coal India Allot the mined coal 40671 (E,OC/UG) 1 Ltd to specified end users 2 SKS ispat & Power Lid Siltara 0.585 16.08 0.536 Industria l Growth Center, Raipur, Chhattis garh
2. This allocation is in pursuance of the provisions contained in Section 3(3)(a)(iii) of the Coal Mines (Nationalization) Act, 1973 and is subject to the following conditions :
i) The allocation of the Vijay Central coal block to M/s SKS Ispat & Power Ltd. as an associate to meet the coal requirement of their proposed end-use plant as mentioned in the table above and M/s Coal India Ltd. as the leader to allot the mined coal to specified end uses as prescribed in the Coal Mines (Nationalization) Act, 1973
ii) Coal extracted from the block is meant for captive use in the specified end use projects of the associate company as mentioned in the their application and M/s Coal India Ltd. will allot the mined coal to specified end uses as prescribed in the Coal Mines (Nationalisation) Act, 1973.
iii) Mining lease shall be obtained in the name of M/s Coal India Ltd., the leader company.
iv) M/s Coal India Ltd. the leader company shall make all the investments and undertake all mining operations to develop and extract coal from the allocated block.
v) Production from the mine shall be shared between the leader and the associate in CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 232 of 271 the proportion as mentioned in the above table and as per the mining plan.
vi) The leader company shall supply the associate's share of coal to the associate company at a transfer price to be determined by the Government.
vii) In accordance with the Option-III as indicated above, the both allocatees may discuss the modalities mutually acceptable to them and finalise a legally binding and enforceable agreement. The agreement should be in conformity with the provisions of the Coal Mines (Nationalisation) Act, 1973 and the guidelines issued in this regard. The agreement may cover, inter-alia, issues such as share in equity, production sharing, rights and liabilities, penalties etc. Under Option III an agreement between the leader and the associate has to be entered into. You are required to submit a legally tenable agreement, duly signed by both the parties to this Ministry within 30 days from the date of issue of this letter regarding working of the Vijay Central Coal block. In case no response is received within the stipulated time, the Government reserves the right to reconsider allocation of block to the contemplated allocatees.
viii) The block is meant for captive use in its own specified end use projects of associate company to be set up as per the details given in the table above. The coal produced from the block shall not replace any coal linkages given to associate company by the Coal India Ltd. / its subsidiary without prior permission of this Ministry.
ix) Middlings generated in the process of washing the coal shall be used for power generation in their own power plant i.e., the useable middlings/rejects generated during beneficiation shall be used captively by the associate company. The modalities of disposal of surplus coal/middlings/rejects, if any, would be as per the prevailing policy/instruction of the government at the relevant point in time and could also include handing over such surplus coal/middling/rejects to the local CIL subsidiary or to any person designated by it at a transfer price to be determined by the Government.
x) Coal production from the captive block shall commence within 36 months (42 months in case the area is in forest land) in case of open cast mine and in 48 months (54 months in case the area falls under forest land) in case of underground mine from the date of this letter. The end-use project schedule and the coal mine development schedule should be modified accordingly and submitted to the Ministry within 3 months from the date of this letter. A copy of the indicative milestone chart is enclosed.
xi) The leader company shall buy geological report from CMPDIL within six weeks from the date of this letter.
xii) The leader company shall submit a bank guarantee for Rs.13.92 crore (equal to one year's royalty amount based on mine capacity of 1.36 MTPA assessed by CMPDIL, grade of coal D to F and the average royalty @ Rs.102.33 per tonne) within three months from the date of this letter. Subsequently, upon approval of the mining plan, the Bank Guarantee amount will be modified based on the final peak/rated capacity of the mine.
(a) 50% of the bank guarantee shall be linked to the milestones (time schedule) set for development of captive block, and the remaining 50% to the guaranteed production. The bank guarantee shall be liable to be encashed in the following eventuality:
(b) There shall be an annual review of progress achieved by an allocattee company.
In the event of lapses, if any, in the achievements vis-à-vis the milestones set for that year, a proportionate amount shall be encashed and deducted from the bank guarantee.
(c) Once production commences, in case of any lag in the production of coal/lignite, a percentage of the bank guarantee amount will be deducted for the year. This percentage will be equal to the percentage of deficit in production for the year with respect to the rated/peak capacity of the mine, e.g., if rated/peak capacity is 100, production as per the approved mining plan for the relevant year is 50 and actual production is 35, then (50-35)/100x100= 15% will lead to deduction of 15% of the original bank guarantee amount for that year. Upon exhaustion of the bank guarantee amount, the block shall be liable for de-allocation/cancellation of mining lease.
(d) The allocattee shall ensure that the bank guarantee remains valid at all times till CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 233 of 271 the mine reaches its rated capacity or till the bank guarantee is exhausted. Any lapses on this count shall lead to de-allocation/ cancellation of mining lease.
xiii) The leader company shall submit a mining plan for approval by the competent authority under the Central Government within six months from the date of this letter.
xiv) The leader company and the associate company shall be required to comply with the guidelines/rules laid down by the Central Government from time to time relating to mine closure (both progressive and final). The leader company shall be required to submit mine closure plan alongwith the mining plan as per the guidelines issued in this regard.
xv) No coal shall be sold, delivered, transferred or disposed of except for the stated captive mining purposes, and except with the previous approval of the Central Government.
xvi) Mining of coal from the allocated captive coal block shall be carried out in accordance with the applicable Statutes/Rules/Orders/governing the mining of coal in the country.
xvii) Those of the above conditions relevant at the time of grant of mining lease shall be included as additional conditions in the mining lease in addition to any further conditions imposed by or agreed to by the Central Government.
xviii) The State Government at the time of seeking previous approval for the grant of mining lease shall submit a draft of the mining lease containing the above relevant conditions for vetting by the Central Government. The final mining lease shall be as vetted/modified by the Central Government Any deviation from the vetted/modified draft shall render the mining lease deed ab-initio null and void and without effect.
3. Allocation / mining lease of the coal block may be cancelled, inter-alia, on the following grounds :-
a) Unsatisfactory progress of implementation of their end use power plant.
b) Unsatisfactory progress in the development of coal mining project.
c) For breach of any of the conditions of allocation mentioned above.
The de-allocation/cancellation of mining lease shall be without any liability to the Government or its agencies, whatsoever. Any expenses incurred by the allocatee or any right or liability arising on the allocattee out of the measures taken by him shall solely be to his account and in no way be transferred to or borne by the Government or its agencies.
4. M/s Coal India Ltd., the leader company, may approach CMPDIL for the geological report and contact the State Government authorities concerned for the necessary permissions/clearances etc. for attaining mining rights and related matters. The arrangement of transport of coal will have to be worked out by the company in consultation with the Ministry of Railways / the Ministry of Surface Transport depending on the mode of transport.
Yours faithfully, (P.S.S. Reddy) Director Encls. As above.
To:
1. Secretary, Ministry of Steel, Udyog Bhavan, New Delhi. 2 Chief Secretary, Government of Chhattisgarh, Dau Kalyan Singh Bhavan, Raipur, Chhattisgarh.
3. Chairman-cum-Mng-Director, Central Mine Planning and Design Institute Ltd., Gondwana Place, Kanke Road, Ranchi, Jharkhand.
4. Chairman-cum-Managing Director, South Eastern Coalfields Ltd., Seepat Road, Bilaspur, Chhattisgarh.
5. The Coal Controller, Office of the Coal Controller, 1, Council Street, Kolkata 700001
6. CPAM Section/CPD Section/ Guard file of CA-1 Section.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 234 of 271
194. As per Clause (vii) of the allocation letter, the allocatees i.e. the leader (CIL) and associate (SKS/A-1) were asked to enter into a mutual agreement and submit said agreement with the Ministry within 30 days from the date of issuance of said letter. The said clause further mentions that "In accordance with the Option-III as indicated above, the both allocatees may discuss the modalities mutually acceptable to them and finalise a legally binding and enforceable agreement." But interestingly, the letter does not contain any such option III in accordance with which, the mutual agreement was required to be prepared by the joint allocatees. For the purpose of clarity, Clause (vii) of the allocation letter dated 01.11.2011 is reproduced separately as hereunder:-
"vii) In accordance with the Option-III as indicated above, the both allocatees may discuss the modalities mutually acceptable to them and finalise a legally binding and enforceable agreement. The agreement should be in conformity with the provisions of the Coal Mines (Nationalisation) Act, 1973 and the guidelines issued in this regard. The agreement may cover, inter-alia, issues such as share in equity, production sharing, rights and liabilities, penalties etc. Under Option III an agreement between the leader and the associate has to be entered into. You are required to submit a legally tenable agreement, duly signed by both the parties to this Ministry within 30 days from the date of issue of this letter regarding working of the Vijay Central Coal block. In case no response is received within the stipulated time, the Government reserves the right to reconsider allocation of block to the contemplated allocatees."
195. In the light of the fact that in the instant case, one of the joint allocatees was a Government owned company and it was not even an applicant before the 36 th CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 235 of 271 Screening Committee or Ministry of Coal, the relevance of asking the joint allocatees to enter into a mutual agreement inter alia covering the issues, such as, share in equity, production sharing, rights and liabilities, penalties etc, is beyond comprehension. Because, modalities like equity sharing etc, are usually required to be decided only in cases of consortium of companies (option-I) or joint venture mining company (option-II), which was not the case herein.
196. For more clarity, we may again refer to the option letter dated 07.10.2008 (D-25 page 57 to 59) issued to 05 joint allocatees of Behraband North Extension Coal Block and same is reproduced as under :-
No 38011/2/2007-CA-I Government of India Ministry of Coal New Delhi, dated the 7 October To (1) MESSAR Steel Ltd, (2) M/s Ispat Industries Ltd., Prakash Deep, 10th Floor, 7, Mining Deptt., 7th Floor, Nirmal Towers, Tolostoy Marg, New Delhi-1. Nariman Point, Mumbai-400021 (3) M/s Mukund Ltd. (4) M/s IND Synergy Ltd., 3rd Floor, Bajaj Bhavan, Jamnalal Bajaj 201, Shrikrishnan Apartment, Marg, 226, Nariman Point, Mumbai-21 10-Daga Layout, North Ambazari Road Nagpur, 440033.
(5) M/s Kalyani Steels Limited, Corporate Building, 2nd Floor, Mundhwa, Pune-411036.
Subject: Allocation of Behraband North Extension coking coal block in the Star Madhya Pradesh for captive mining of coal by M/s ESSAR Steel & Po Ltd., M/s Ispat Industries Ltd, M/s Mukund, M/s Kalyani Steels Ltd. M/s IND Synergy Ltd. -Calling of Options thereof.
Sir, I am directed to inform that Government is contemplating to make joint allocation Behraband North Extension coking coal block in the State of Madhya Pradesh for capti mining of coal by M/s ESSAR Steel Ltd., M/s Ispat Industries Ltd, M/s Mukund Lte M/s Kalyani Steels Ltd. and M/s IND Synergy Ltd. for meeting their proportionate sha of requirement of coal. Based on the mineable capacity of the total geological reserves ar requirement of coal as assessed by CMPDIL, tentative proportionate share of reserves indicated in the table below :-
S. Name of Geological Tent Name of EUP Share of Require Satisfaction No the Block, Reserves Extractabl Company Capacity Coal (In ment of level Explorati (In MT) e (in MT) Coal o n Status Reserves ΜΤΡΑ) and (In MT) UG/OC CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 236 of 271
1. Beharaba 174.8 65 1. ESSAR 1.6 60.839 1.6 43.49 nd North Steel Ltd.
Extn (E,
2. Ispat 3.5 76.049 2 43.49 UG) Industries Ltd.
3.a) 0.62 13.819 0.62 43.49 Mukund Ltd.
b) Kalyani 9.755
Steels Ltd.
4. IND 0.379 14.411 0.379 43.49
Synergy
Ltd.
* M/s. Mukund Ltd. and, M/s.Kalyani Steels are sharing a common steel making
facility at Ginigera, (Hospet) in the State of Karnataka which is jointly owned by both the Companies. Since the purpose of coal block is meant for integrated steel production and not for stand alone pig iron production, the joint production facility of both the Companies, at Ginigera is treated as a single production unit.
2. In case of joint allocation, the block can be mined by the joint allocatees under any of the three options as given below :-
Option I: The mining be carried out in consortium of two or more allocattees in any given block by constituting a joint venture/special purpose vehicle company wherein there would be equity stake and management participation from all the consortium partners. The production from the mine could be distributed among the consortium partners in proportion to their assessed requirement at the time of allocation, net of linkages, if any. The equity shares should be held in proportion to the assessed requirement of all the consortium partners.
Option-II: In this option, one allocattee company would be designated as the leader for the block and other allocattees would be designated as the associates for that block. The allocation would be made to the leader and the associates but the mining lease will be granted to the leader, all investments will be made by the leader, all mining operations will be carried out by the leader and the production from the mine will be shared between the leader and the associates in the ratio of their respective assessed requirement at the time of allocation. The price at which the coal will be given to the associates would be determined by the Central Government/its agency and would be called the 'transfer price'.
Option-III: In this option, for each block one allocattee would be chosen as the leader and other allocatees as associates. The allocation will be made to the group of leader and associates jointly but the mining lease of each block would be given to the designated leader who would make the investinent and carry out the mining operations. The production from the mine will be shared between the leader and the associates in proportion to their actual requirement/assessed requirement at the time of allocation, whichever is less. In this option, the local CIL subsidiary company will have a role to play. They would arrange the transfer of coal from the leader to the associates as per the ratio determined at the time of allocation, at a price to be determined by the Central Government/its agency. The CIL subsidiary would be permitted to charge some nominal service charges.
3. In accordance with the three options as indicated above, the joint allocatees may discuss the modalities mutually acceptable to them and finalise a legally binding and enforceable agreement, opting for any one of the above mentioned three arrangements. The agreement should be in conformity with the provisions of the Coal Mines (Nationalisation) Act, 1973 and the guidelines issued in this regard. The agreement may cover, inter-alia, issues such as share in equity, production sharing, rights and liabilities, penalties etc. In case Option III is preferred, then a tripartite agreement between the leader, associates and the local Coal India subsidiary such that no liability devolves on the local CIL subsidiary in any case including in cases of no or less production by the leaders or no or less offtake by the associates, and CIL subsidiary is fully indemnified against any liability, has to be entered into.
4. You are required to exercise the requisite option and to submit an agreement, duly signed by all the parties concerned and legally tenable, to this Ministry within 30 days from the date of issue of this letter. In case no response is received within the stipulated time, the Government reserves the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 237 of 271 right to reconsider allocation of block to the contemplated allocatees.
Yours faithfully (V.S. Rana) Under Secretary to the Govt. of India.
197. As per the above letter, the government was contemplating to make joint allocation of Behraband North Extension Coal Block in the State of Madhya Pradesh for captive mining of coal to five applicant companies who were issued said letter. Based on the mineable capacity of the total geological reserve of Behraband North Extension Coal Block, the joint allocatees were informed about their tentative proportionate share of reserve and a choice was given to them to select one of the three options for the mining of allocated coal block.
198. Whereas, in the instant case, the language of the allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10) clearly shows that the decision to designate Coal India Limited as leader and assigning it with the mining lease right, was the unilateral decision of the Ministry of Coal. SKS (A-1) was never given any choice to opt for any of the three options of mining arrangements as was given to the allocatees of other joint allocation cases, where all the allocatees were chosen from amongst the applicants.
199. Pertinently, option III in accordance with which, the SKS (A-1) and Coal India Limited were asked to enter into a mutually acceptable agreement is nowhere mentioned in the allocation letter dated 01.11.2011. Whereas, the option letter dated 07.10.2008, Part of Ex. P- 320/PW-39 (colly) (D-25, page 57 to 59) as referred hereinbefore in Para 104, do contain said options and under option III, the joint allocatees themselves decide that who CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 238 of 271 among them would be the leader and who would be the associate(s). The only role played by the local Coal India Limited subsidiary company under said option (option III) is to make arrangement for transfer of coal from the leader (who would be carrying out the mining operation) to associates as per the ratio determined at the time of allocation and at the price to be determined by the Central Government/Agency.
200. Indisputably, in 'Manohar Lal Sharma v. Principal Secretary and ors' (2014) 9 SCC 516, the allocation letter issued by the Ministry of Coal was held to be a valuable security by the Hon'ble Apex Court. A vehement argument has however, been raised by Ld Senior Counsel Mr. Narang that, the allocation letter issued by the Ministry of Coal was held to be a valuable security only where it had created mining lease rights in favour of the beneficiary selected by the Central Government. But in the instant case, Coal India Limited is the beneficiary in whose favour mining rights have been created in the allocation letter and therefore, said allocation letter dated 01.11.2011 cannot be said to be a valuable security qua accused company SKS (A-
1).
201. It was further argued that under said allocation letter, SKS (A-1) is neither the beneficiary of grant of largesse nor the beneficiary (Coal India Limited) had been selected by SKS to be the leader in said arrangement. The decision to designate Coal India Limited as leader and vesting it with the mining rights and getting the mining lease executed with the State Government in respect of Vijay Central Coal Block was the unilateral decision of the CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 239 of 271 Central Government as no consent was obtained from SKS (A-1) before issuing said allocation letter dated 01.11.2011 nor its willingness was taken for any such arrangement.
202. On coal block allocation, Manohar Lal Sharma (Supra), upon which a strong reliance has been placed by both the sides to advance their rival contentions, is a pivotal judgment wherein, a challenge was raised on the legality and constitutionality of coal block allocations made by the Central Government through the route of Screening Committee during the period between 1993 to 2012. In said case, the core issues revolved around the question as to whether Central Government possessed the authority to allocate coal blocks directly to private entities without adhering to the prescribed legal framework under Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Nationalisation) Act, 1973 (CMN Act). With regard to the nature of rights created in favour of allocatees of the coal block by virtue of allocation letter, following arguments were raised by Ld. Attorney General:-
(1) An allocation letter does not by itself confer the right to work mines and the identification of the coal block does not impinge upon the rights of the State Governments under the 1957 Act.
(2) Allocation of coal block is essentially an identification exercise where coal block selected by Coal India Limited for captive mining were identified by the Screening Committee for development by an allocatee after considering the suitability of the coal block vis-a-vis the requirement of the EUP of the applicant.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 240 of 271 (3) The allocation letter merely entitles the allocatee to apply to State Government for grant of prospecting licence/mining lease in accordance with the provisions of 1957 Act.
(4) The right to apply for grant of prospecting licence deed does not imply that with the issuance of allocation letter, the allocatees automatically gets the requisite statutory clearances and approvals.
(5) The mining lease is granted to the allocatee only after it obtains the requisite approvals and clearances from the concerned competent authorities and submit said approvals with the State Government.
203. The above arguments of Ld. Attorney General however, did not find favour with the Hon'ble Supreme Court as a contrary view was taken to the effect that the allocation of coal block is not simply identification of the coal block, but it does carry with it legal consequences and confers private rights to the allocatees for obtaining the coal mining leases for their end-use plants . The relevant paras of the judgment read as under:-
"65. There seems to be no doubt to us that allocation letter is not merely an identification exercise as is sought to be made out by the learned Attorney General. From the position explained by the concerned State Governments, it is clear that the allocation letter by the Central Government creates and confers a very valuable right upon the allottee. We are unable to accept the submission of the learned Attorney General that allocation letter is not bankable. As a matter of fact, the allocation letter by the Central Government leaves practically or CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 241 of 271
apparently nothing for the State
Government to decide save and except to
carry out the formality of processing the application and for execution of the lease deed with the beneficiary selected by the Central Government. Though, the legal regime under the 1957 Act imposes responsibility and statutory obligation upon the State Government to recommend or not to recommend to the Central Government grant of prospecting licence or mining lease for the coal mines, but once the letter allocating a coal block is issued by the Central Government, the statutory role of the State Government is reduced to completion of procedural formalities only. ...
xxx
68. The allocation of coal block is not simply identification of the coal block or the allocatee as contended by the learned Attorney General but it is in fact selection of beneficiary. As a matter of fact, Mr. Harish N. Salve, learned senior counsel for the interveners, has taken a definite position that allocation letter may not by itself confer purported rights in the minerals but such allocation has legal consequences and confers private rights to the allocatees for obtaining the coal mining leases for their end- use plants.
xxxx
73. Assuming that the Central Government has competence to make allocation of coal blocks, the next question is, whether such allocation confers any valuable right amounting to grant of largesse?
74. Learned Attorney General argues that allocation of coal blocks does not amount to grant of largesse since it is only the first statutory step. According to him, the question whether the allocation amounts to grant of largesse must be appreciated not from the perspective whether allocation confers any rights upon the allocatee but whether allocation amounts to conferment of largesse upon the allocatee. An allocatee, learned Attorney General submits, does not get right to win or mine the coal on allocation and, therefore, an allocation letter does not result in windfall gain for the allocatee. He submits that diverse steps, as provided in Rules 22A, 22B, and 22(5) of the 1960 Rules and the other statutory CBI Vs. M/s SKS Ispat & Power Ltd. & Ors. RC No. 219 2014 (E) 0016 Page No. 242 of 271 requirements, have to be followed and ultimately the grant of prospecting licence in relation to unexplored coal blocks or grant of mining lease with regard to explored blocks entitles the allocatee/licensee/lessee to win or mine the coal.
75. We are unable to accept the submission of the learned Attorney General that allocation of coal block does not amount to grant of largesse. It is true that allocation letter by itself does not authorize the allottee to win or mine the coal but nevertheless the allocation letter does confer a very important right upon the allottee to apply for grant of prospecting licence or mining lease. As a matter of fact, it is admitted by the interveners that allocation letter issued by the Central Government provides rights to the allottees for obtaining the coal mines leases for their end- use plants. The banks, financial institutions, land acquisition authorities, revenue authorities and various other entities and so also the State Governments, who ultimately grant prospecting licence or mining lease, as the case may be, act on the basis of the letter of allocation issued by the Central Government. As noticed earlier, the allocation of coal block by the Central Government results in the selection of beneficiary which entitles the beneficiary to get the prospecting licence and/or mining lease from the State Government. Obviously, allocation of a coal block amounts to grant of largesse."
204. Reverting back to the instant case, the beneficiary of the mining lease herein is not SKS/A-1 but a government owned PSU Coal India Limited, who was never the applicant before 36th Screening Committee rather, it was part of the Screening Committee. The decision to make Coal India Limited as a leader and vesting it with the mining right in respect of Vijay Central Coal Block was the unilateral decision of the Central Government without any prior consent obtained from SKS (A-1) in this regard.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 243 of 271
205. The advertisement of Government of India for inviting applications for allocation of identified coal block to the desirous companies either singly or jointly with one or more other applicants was for captive mining for specified End Use Plants (steel, power and cement) of the applicant companies. Pursuant to said advertisement, SKS/A-1 had applied for allocation of Vijay Central Coal Block for captive mining for meeting the fuel requirement of its integrated steel plant at Siltara, Raipur, Chattisgarh. However, vide allocation letter dated 01.11.2011 Ex. P-262/PW-17 (D-10 page 119), SKS was allocated said coal block jointly with Coal India Limited. Whereas, Coal India Limited was neither the applicant before 36th Screening Committee nor the mining it was assigned to undertake, was for its own consumption and use.
206. As per allocation letter dated 01.11.2011, Coal India Limited was required to supply 16.8 MT of mined coal reserve to SKS (A-1) and rest of the coal reserve falling in the share of Coal India Limited, was to be used for specified uses i.e. for plants engaged in generation of power, manufacture of steel and cement. Admittedly, Coal India Limited, is a mining company engaged in the business of commercial mining and not in any of these specified businesses. From said backdrop of circumstances, it is manifestly clear that the allocation letter dated 01.11.2011 did not confer any right to SKS (A-1) for the prospecting licence or mining lease from the State Government. There is nothing on record to show that any agreement as contemplated in clause (vii) of para 4 of the allocation letter was ever filed by the SKS (A-1) with the Ministry of Coal.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 244 of 271
207. Indeed, the above condition of entering into an agreement as required under clause (vii) of the allocation letter dated 01.11.2011 is practically inapplicable in the instant case because, the other joint allocatee (Coal India Limited) was a government owned company, which was not the end user of the coal reserve. Probably for this reason, no options to choose the mining arrangement with the joint allocatee (Coal India Limited) were afforded to SKS (A-1). It appears that the content of said clause (vii) of the allocation letter were mechanically picked up from the last two paras of the option letter dated 07.10.2008 (D-25, Page 57 to 59), issued in respect of Behraband North Extension Coal Block, vide which acceptance was sought from the joint allocatees of said coal block, who all were private companies.
208. In the above circumstances, the allocation letter dated 01.11.2011 Ex. P-262/PW-17 (D-10 page 1192), cannot be equated with the allocation letters issued by the Ministry of Coal in other cases of joint allocation recommended by the 36th Screening Committee. In absence of any right created in favour of SKS (A-1) to get the prospecting licence or mining lease from the State Government or SKS having chosen Coal India Limited to be the leader for assignment of mining rights in respect of the allotted coal block Vijay Central, the allocation done vide said letter dated 01.11.2011, cannot be treated as grant of largesse in favour of SKS (A-1) so as to be construed as 'valuable security' for SKS (A-1) qua said right conferred to Coal India Limited in the allocation letter.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 245 of 271
209. In the allocation letter dated 01.11.2011, the only right created in favour of SKS (A-1) was to get its proportionate share 16.8 MT (i.e. 0.56 MT per annum for 30 years) of the total mined production of the coal at a transfer price to be determined by the Central Government. The said right created in favour of SKS (A-1) was more in the nature of coal linkage. But in my considered view, even a coal linkage especially, when secured under a long-term contract allows the stable operation of end-use plants and hence, it also creates a valuable and tradeable interest which can be used to leverage financing, thus placing it within the legal definition of a "valuable security". Hence, even for creating such valuable rights, the Screening Committee and Ministry of Coal were certainly required to assess the suitability of the applicant i.e. if it actually had the necessary worth and preparedness for running the established EUP or for achieving the proposed capacity of the plant, for meeting the fuel requirement of which the allocation/coal linkage was sought.
210. But, the question that arises is that whether such kind of arrangement like grant of coal linkage to the allocatees, was ever in contemplation of the Screening Committee at the time of deciding the proportionate share of the joint allocatees of Vijay Central Coal Block, in its meeting held on 03.07.2008, so as to have a possibility of getting induced for creation of such rights in favour of SKS (A-1) by way of issuance of allocation letter dated 01.11.2011, on account of alleged inflated claim of SKS (A-1).
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 246 of 271
211. It is worthwhile to mention here that in said meeting dated 03.07.2008, Vijay Central Coal Block was recommended to be allocated jointly in the favour of two applicant companies namely, SKS (A-1) and PIL. However, later on, because of the various issues already discussed above, the PIL went out of picture and the allocation came to be made jointly in the name of Coal India Limited and SKS (A-1) by the Screening Committee in its subsequent meeting held on 04.10.2011. The minutes of said meeting are available on record as Ex. P-253/PW-17 (D-10 page 952).
212. During the aforementioned meeting held on 04.10.2011, the Screening Committee reiterated the observation made in its last meeting dated 29.06.2011 and declined to review its earlier decisions taken on the assessment of coal requirement of the allocatees of Vijay Central Coal Block and in Para 7 of the minutes of aforementioned meeting held on 04.10.2011, the Committee made following recommendations :
"(i) In view of the factual position as stated in para 6 above and the mandate of the committee, the committee is of the opinion that the request of M/s PIL for any additional amount of coal from Vijay Central Coal Block beyond quantity already recommended by the screening committee in its meeting held on 03.07.2008 is not justified and therefore it does not recommend any additional allocation of coal from this block.
(ii) For the balance coal available in the block, it be allocated to Coal India Ltd. The committee further recommends that CIL be made leader for the block and other allocatees be designated as associates."
213. As per note sheet 46/n dated 07.10.2011, it was recorded that the allocation of Vijay Central Coal CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 247 of 271 block to SKS Ispat and Power Ltd (A-1), shall be made as per the recommendation of the meeting held on 3.07.2008 for share of 16.8 MT geological coal reserve from the said recommended block as an associate and the remaining coal reserve in the Vijay Central Coal Block may be allowed to Coal India Limited as the leader for development of said block.
214. However, the alleged misinformation in the application (D-5) and feedback form (D-29) were never intended to secure any coal linkage nor the guidelines issued by the Ministry of Coal ever provided for allotment of any coal linkage to the applicants. Vide advertisement Ex. P- 205/PW-17 (D-34 page no. 73 to 94) Ministry of Coal had sought application for allocation of identified coal block for captive mining for the specified end use plants of the applicant companies. As per the extant guidelines, the allocation of the identified coal block to the selected applicants can be either made singly or jointly with the other one or more applicants.
215. Ld. Sr. PP has argued that based on similar allegations of false claims of networth, investment, land availability, EUP capacity and environment clearance, raised before the Screening Committee in connection with the allocation of Rawanwara Coal block, CBI had registered RC no. 219 214 (E) 0017, against SKS, it's director Deepak Gupta and authorised representative Amrit Singh, who all have been arrayed herein as A-1, A-3 and A-4 respectively, and in said case, a conviction had been recorded by Ld. Predecessor of this court vide judgment dated 26.12.2025 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 248 of 271 against all the said accused. Hence, on same lines, accused deserve to be convicted even in the present case.
216. I have considered the above submission and also perused the judgment dated 26.12.2025, passed by my Ld. Predecessor in RC no. 219 214 (E) 0017. In this regard, I may note that each case has its own facts and its outcome depends on the evidence adduced on record to support the rival claims of the parties. Even otherwise, the judgment of a coordinate bench does not form a binding precedence for this court. Moreover, for the following reasons, the instant case stands on a different footing:-
1. The SKS/A-1 was allocated Rawanwara Coal block singly in its own name for captive mining with a right to get the mining lease executed in its favour from the State Government. Whereas, in the instant case Vijay Central Coal block was allocated to SKS/A-1 jointly with Coal India Ltd, a Government owned mining company who does only commercial mining and does not do it for its own consumption and further Coal India Limited was never the applicant before the Screening Committee.
2. In that case, allocation letter created mining rights to extract coal from the allocated block for captive use in favour of SKS/A-1. Whereas, in the instant case, rights for mining and for execution of prospecting lease with the State Government were created in favour of Coal India Limited with a limited right in the nature of a coal linkage given to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 249 of 271 SKS (associate) for supply of specified quantity of coal from Coal India Limited (designated leader).
3. In RC no. 219 214 (E) 0017, before issuance of final allocation letter, prior consent and willingness was sought from SKS/A-1 vide an option letter dated 13.03.2007, issued by the Ministry of Coal. Whereas, in the instant case, after a gap of more than 04 years from the date of first recommendation of 03.07.2008, the allocation letter was straight away issued whereby, Coal India Limited was unilaterally designated as a leader company with all mining rights vested in it for development of Vijay Central coal block by the Ministry of Coal and SKS (A-1) was given share of 16.8 MT from total mined produce of coal.
217. In the light of above reasons, the said judgment dated 26.12.2025, is of no help to the prosecution.
218. It must also be kept in mind that development of any coal block for the purpose of coal extraction involves a huge cost and investment. If a company undertakes operationalization of a coal block for captive use, it would require investments both for the development of the coal block as well as for establishment of End Use Plant. In the instant case, the coal block was assigned to Coal India Limited and not to SKS (A-1) and hence, SKS (A-1) was not required to make any investment for the development of coal block, which task was specifically assigned to Coal India Limited. Furthermore, SKS (A-1) already had an established plant of 0.27 MTPA CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 250 of 271 installed capacity at the time it applied for allocation of Vijay Central Coal Block on 12.01.2007.
219. At the time when the Screening Committee recommended the name of SKS (A-1) for allocation of Vijay Central Coal Block in its meeting held on 03.07.2008, the financial strength of the applicant was to be kept in mind not only for assessing its preparedness for achieving its proposed capacity of End Use Plant but also for carrying out mining operations and development of coal block.
220. Given the fact that as per prosecution case, the actual networth of SKS (A-1) as on 31.03.2007 was Rs.191.349 crores, total investment as on 31.03.2007 was Rs. 466.25 crores and total available land with SKS (A-1) as on 07.02.2008 was 305.82 acres, even the difference of figures on account of alleged inflated claims would not have had much bearing on the decision of the Screening Committee in allocating the aforementioned share of 16.8 MT in favour of SKS from Vijay Central Coal Block, which was later on decided to be supplied to SKS (A-1) as associate from Coal India Limited, a designaed leader, who was assigned the task of carrying out the mining work after entering into a mining lease with the State Government.
221. Hence, even assuming for the sake of arguments that claims regarding networth, possession of land, EUP capacity and environment clearances as put forth by SKS (A-1) in the application (D-5) and feedback form (D-
29) were false and made fraudulently and dishonestly for securing allocation of captive coal block. Then also, in absence of SKS (A-1) having been granted any mining rights CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 251 of 271 in the allocated coal block, there is no question of any inducement of Screening Committee or Ministry of Coal on account of the alleged inflated claims. At the cost of repetition, I may note that except the guidelines of Ministry of Coal, which are part of advertisement Ex.P-201/PW-17 (Colly.)(Pg. 73-94), CBI has miserably failed to adduce any positive evidence to establish that the 36 th Screening Committee or Ministry of Coal were induced to create said rights in favour of SKS (A-1) on account of said inflated claims.
Finding on Point of Determination no. (4)
222. In the light of the aforementioned discussion, it is concluded that the allocation letter dated 01.11.2011, to the extent it created rights in favour of SKS (A-1) regarding supply of 16.8 MT coal from Coal India Limited, was a valuable security but, it was not issued as a result of any inducement as alleged by CBI. The Point of Determination no.4 is answered accordingly.
Point of Determination No. 5(5) Whether the offence of cheating under Section 420 IPC is made out against A-1 to A-5?
223. In the light of my findings on aforementioned Points of Determination no.1 to 4, the prosecution has not been able to prove beyond reasonable doubt any of the essential ingredients of the offence of cheating. Accordingly, I feel no hesitation in holding that no offence of cheating under Section 420 IPC has been made out against any of the accused persons.
Finding on Point of Determination no. (5) CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 252 of 271
224. Accordingly, the Point of Determination no.5 is answered in negative.
Criminal Conspiracy
Point of Determination No. 6
(6) Whether there was any criminal
conspiracy? If so, what was the object of said conspiracy and who all were the part of it?
225. The above point of determination involves the following contentious issue:-
"Whether there was any prior meeting of mind amongst the accused persons for the commission of alleged offences?"
226. Criminal conspiracy is a substantive and independent offence under Indian law. A conspiracy precedes the commission of the crime and thus, acquittal of accused for the substantive offence does not automatically negate the charge of conspiracy. The gist of the offence is the "meeting of minds" or the agreement to commit an illegal act and not the successful completion of the act itself. Hence, an accused can be convicted for the offence of criminal conspiracy under Section 120B IPC even if the substantive offence for which the conspiracy was allegedly hatched has failed or the accused is acquitted of it. The offence of conspiracy is complete the moment two or more persons agree to do an illegal act, or a legal act by illegal means.
227. Section 120A of Indian Penal Code defines 'criminal conspiracy' as an agreement of two or more CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 253 of 271 persons to do or cause to be done an illegal act, or an act not illegal by illegal means. This section will apply in cases where either the ultimate object or means of committing the act is illegal. As per the proviso to this section, actus reus i.e some act besides the agreement is required to be done in pursuance of said agreement except in agreement to commit an offence.
228. In the instant case, the offence of Criminal conspiracy under Section 120B IPC has been framed against all the accused persons on the allegations that they entered into a criminal conspiracy with each other, to cheat the 36th Screening Committee and Ministry of Coal, Government of India for securing the allocation of Vijay Central Coal Block in favour of SKS (A-1) by adopting various illegal means such as:-
(i) SKS (A-1), Anil Gupta (A-2), Deepak Gupta (A-
3) and Amrit Singh (A-4) made various false claims in the application and the feedback form.
(ii) A-5 falsely presented himself as Director of SKS (A-1) in the meeting to Screening Committee held on 03.07.2008.
(iii) A-5 wrote a request letter dated 11.12.2007 Ex.P-154/PW-7 (D-219), to the Ministry of Coal for allocation of Vijay Central Coal Block to SKS for its subject EUP at Siltara, Raipur wherein, he allegedly raised an exaggerated claim regarding investments made by SKS(A-1) in said plant.
(iv) With the aforementioned letter dated 11.12.2007 letter, A-5 also enclosed the copy of the letter dated 10.12.2007, written by A-3 Deepak CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 254 of 271 Gupta to the Ministry of Coal with the similar request based on some exaggerated claim.
(v) A-5 also tried to influence the Screening Committee to recommend SKS (A-1) for allocation of Vijay Central Coal Block through his brother Sh. Subodh Kant Sahai (PW-31), the then Minister of State for Food Processing Industries, who allegedly wrote a recommendatory letter dated 05.02.2008 Ex. P-309/PW-28 (D-224) to Hon'ble Prime Minister for seeking his personal intervention for the allocation of coal blocks to SKS (A-1).
229. It is in furtherance of aforementioned conspiracy, the accused allegedly committed the substantive offence of cheating under Section 420 IPC. However, for the purpose of bringing the charge of criminal conspiracy read with Section 420 IPC, the prosecution is required to establish the offence by applying the same legal principles which are otherwise applicable for the purpose of bringing home the charges of alleged substantive offence. We are not oblivious of the fact that often conspiracies are hatched in secrecy and for proving the said offence, substantial direct evidence may not be possible to be obtained, but it can be very well proved by way of circumstantial evidence.
230. In the light of the findings recorded hereinbefore on Points of Determination No. 1 to 5, the prosecution has failed to prove the charge of the substantive offence of cheating under Section 420 IPC, for the commission of which the criminal conspiracy was allegedly hatched by the accused persons. Even for the offence of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 255 of 271 criminal conspiracy, which is an independent offence, there is no direct or indirect evidence to establish the prior meeting of mind amongst the accused person.
231. There is absolutely no evidence on record to show that the aforementioned recommendatory letters written by A-5 and his brother Subodh Kant Sahai were considered by the Screening Committee or even placed before it so as to induce its decision on the allocation of coal block in favour of SKS (A-1). In this regard, the testimony of prosecution witness Vinni Mahajan (PW- ) and V.S.Rana (PW-) can be referred wherein, they did not come out with anything incriminatory with regard to aforementioned communication, to support the prosecution case.
232. PW-17 in his cross-examination although admitted that aforementioned letter dated 11.12.2007 of A- 5 Ex. P-154/PW-7 was received in their office but, as per his version, said letter was never dealt with in any file related to allocation of Vijay Central Coal Block. Further as per CBI's own witness Rohit Jaiswal (PW-7), the letter dated 10.12.2007 Ex.P-155/PW-7, annexed with the aforementioned letter dated 11.12.2007 of A-5 does not bear the signature of Deepak Gupta (A-3). Admittedly, the purported signatures of Deepak Gupta appearing on said letter dated 10.12.2007, were never sent to CFSL for the purpose of comparison by CBI.
233. There is no dispute to the fact that A-5 had attended the Screening Committee meeting dated 07.02.2008. But, he neither signed the feedback form (D-
29), which was signed by Amrit Singh (A-4) nor A-5 made the representation, which was made by Anil Gupta (A-2). A-
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 256 of 271 5 Sudhir Kumar Sahay (Director) simply attended the presentations on 07.02.2008 before 36 th Screening Committee with A-2 Anil Gupta (MD), A-4 Amrit Singh (Manager) and Rohit Jaiswal (Manager), on behalf of SKS (A-1).
234. Admittedly, A-5 was not on the Board of Directors of the accused company SKS (A-1). As per the defence plea, A-5 was merely the "Designated Director" of SKS (A-1) and was looking after coal handling activities of the company (A-1) and being a Designated Director of SKS (A-1), he was authorized by the Company to sign the letter dated 11.12.2007 Ex.P-154/PW-7 (D-219).
235. As regard the allegation of mis-
representation on the part of A-5 for having presented him as director of A-1 at the time of presentation on 07.02.2008, I may note that even prior to the registration of the present FIR by CBI, the said fact was disclosed by Amrit Singh (A-4) in the reply dated 08.07.2009 filed by him on behalf of SKS (A-1) before the Hon'ble High Court in Writ Petition (Civil) 6449/2008 Ex.P-279/PW-17(colly), wherein, it was specifically stated that A-5 was a designated director, who was looking after raw material activities of the company SKS (A-1). In view of said circumstances, no malafides can be attributed to A-5 in attending the presentation before Screening Committee on 07.02.2008. Even otherwise, his presence even as a director of the company had made no difference on the decision of the Screening Committee and same is also evident from the reply affidavit dated 16.07.2009 Ex. P-281/PW-17 of PW-17 V.S.Rana filed on behalf of Union of India WPC no.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 257 of 271 6449/2008, wherein PW-17 stated that merely attending the meeting cannot influence the concerned officers to be treated as having any undue influence for making such allocation, as alleged. In said affidavit PW-17 also referred to the Ministry of Coal OM no. 38039/2009-CA-1 dated 31.03.2009 wherein, PW-17 responded in respect of the aforementioned recommendatory letter of Subodh Kant Sahai and stated that it would be considered with other applications on merits.
236. In the backdrop of aforementioned circumstances, no conspiracy can be inferred even from the admitted facts or from the circumstances proved on record. There is absolutely no evidence on record to show that the aforementioned recommendatory letter dated 05.02.2007 written by Sh. Subodh Kant Sahai allegedly at the behest of A-5 or the aforementioned letter dated 11.12.2007 of A-5 were ever placed before the Screening committee so as to influence its decision. Hence, all the circumstances through which prosecution seeks to prove the charge of criminal conspiracy have also remained unproved for lack of any cogent and credible evidence. The entire case of prosecution for the offence of criminal conspiracy is based on conjectures and surmises without any substantial basis.
Finding on Point of Determination no. (6)
237. In view of above discussion, I feel no hesitation in holding that the prosecution has remained unsuccessful even in proving the charge of conspiracy for lack of any evidence to arrive at any such conclusion of prior meeting of mind amongst the accused persons. Hence, the Point of Determination no.6 is also answered in negative.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 258 of 271 CONCLUSIONS
238. The conclusions arrived at by the court while deciding aforementioned points of determination can be summarised as under:-
1. The arrangement of leader-associate model devised by the Ministry of Coal (for joint allocation of Vijay Central Coal Block) in favour of Coal India Limited and M/s SKS Ispat Power Limited is in deviation from extant guidelines Ex. P-205/PW-17(D-34, page 73 to 94). As per said guidelines, the allocation of captive coal blocks through the route of 36th Screening Committee, was meant for the companies engaged in the business of steel, cement or power generation and for captive mining only i.e. for End Use Plants of the applicants only.
2. Whereas, in the instant case, Coal India Limited, (the leader) who was granted mining rights for development of Vijay Central Coal Block, had neither applied for the allocation of any coal block nor it was engaged in any of specified businesses. Indeed, Coal India Limited (CIL) is primarily engaged in commercial mining and supplies coal to various sectors, rather than acting as a captive miner for its own end-use projects. Further, Coal India Limited itself was part of 36th Screening Committee.
3. As per the extant guidelines, in cases of a joint allocation, the option letter was required to be first issued to the joint allocatees. However, in the instant case, the decision to designate Coal India Limited as leader and vesting it with the mining rights in respect of Vijay Central Coal Block and designating SKS (A-1) merely as an associate, was a unilateral decision of the Ministry of Coal.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 259 of 271 SKS (A-1) was never sent any option letter/offer letter prior to the issuance of the allocation letter dated 01.11.2011 Ex.P-262/PW-17 (D-10).
4. In absence of any right created in favour of SKS (A-1) to get the prospecting licence or mining lease from the State Government, the allocation letter dated 01.11.2011, cannot be treated as grant of largesse in favour of SKS (A-1) so as to be construed as 'valuable security' for SKS (A-1) qua said right conferred to CIL in the allocation letter.
5. In the allocation letter dated 01.11.2011, the only right created in favour of SKS (A-1) was to get its proportionate share 16.8 MT (i.e. 0.56 MT per annum for 30 years) from CIL at a transfer price to be determined by the Central Government, which is more in the nature of coal linkage. But, even a coal linkage , when secured under a long-term contract allows the stable operation of end-use plants and creates a valuable and tradeable interest which can be used to leverage financing, thus, placing it within the legal definition of a "valuable security". Undoubtedly, even for creating such valuable right, the Screening Committee and Ministry of Coal were required to assess the suitability of the applicant to ascertain its worth and preparedness for establishing and running the End Use Plant for meeting the fuel requirement of which the coal linkage was sought.
6. However, such kind of arrangement like grant of coal linkage to the allocatees of coal block was never in contemplation of Screening Committee at the time of deciding the proportionate share of the joint allocatees of Vijay Central Coal Block in its meetings held on 03.07.2008, CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 260 of 271 so as to have any possibility of being induced for creation of such rights in favour of SKS (A-1).
7. Even the alleged misinformation regarding inflated claims of networth, investment, land or capacity or clearance can not be said to have been made with any such intention to secure any coal linkage as it was nowhere contemplated in the guidelines forming part of advertisement Ex. P-201/PW-17 (Colly.)(Pg. 73-94). Besides that, the evidence adduced on record is awfully lacking to establish that any of said claims in application dated 12.01.2007 (D-5) and Feedback form dated 07.02.2008 (D-29), were false to the knowledge of accused or were made with any dishonest intention to cheat the Screening Committee or Ministry of Coal.
8. As regard the alleged inflated claim of networth, there was no formula prescribed for calculating the same in the guidelines. In absence of any formula, applicants were left unguided and were constrained to apply the formula as per their own subjective understanding, especially, when different Ministries of the Government of India were using different formulas for calculation of networth while entering into commercial transactions with the corporate entities. In said circumstances, the conduct of the accused in including the share application money in the calculation of networth cannot be said to be actuated with any malafide so as to raise it to the level of criminality. More so, when the guidelines of Ministry of Coal did not provide for any minimum threshold of networth for the eligibility of the applicants.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 261 of 271
9. The subjective opinion of the IO or that of PW- 3 regarding application of UMPP formula for calculation of networth of SKS (A-1) is not corroborated by any of the officials of Ministry of Coal. In view thereof, the subjective opinion of PW-3 or IO (PW-40) cannot be held to be in consonance with the intention of the Ministry of Coal that had sought details of net worth in the application form through its advertisement. The guidelines for allocation of captive blocks are also conspicuously silent about the specific nature of net worth of the applicants that was sought to be provided in the application. Rather, it was a general query that left the applicants in the quandary to give information of net worth based upon their subjective comprehension. In said obscurity lacking any clarity, no fault can be imputed to the accused company in interpreting and calculating it as per their own subjective understanding.
10. Mens rea/dishonest intention is the foremost requirement for the offence of cheating and the element of mens rea can be gathered from the surrounding circumstances of the transaction, which may include the chain of events happening prior to the transaction or even subsequent to that. The bonafide on the part of the SKS (A-
1) is evident from the fact that the share application money was adjusted towards issue of share to the applicant promoters in the subsequent years. Had the intention been malafide only to secure allocation based on inflated claims by showing share application money as part of share capital/paid up capital, there was no need for SKS (A-1) to subsequently issue shares against said money that too after its name was recommended for allocation by the Screening Committee on 03.07.2008.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 262 of 271
11. Indisputably, the term 'investment' was neither defined in Companies Act, 1956 nor it has been defined in Companies Act, 2013. While the report dated 08.01.2015 Ex. P-144/PW-3 (D-166) prepared by PW-3 Sh. Vijender Kumar Jain as well as his deposition are completely silent as to from where the formula used for calculating the investment has been derived by the PW-3. In the entire examination-in-chief, PW-3, who was asked to carry out the calculation of financial figures furnished by A-1, was not asked even a single question relating to investment. As regard investment calculation or the formula employed to calculate it, his testimony is completely silent.
12. In view of the fact that PW-3 was not an expert witness, his report Ex. P-144/PW-3 filed with the IO during investigation, is liable to be treated only as his statement under Section 161 Cr.P.C and such report cannot be adduced in the evidence except to contradict him. The content of said report cannot be proved just by exhibiting it as same is impermissible due to the bar 162 Cr.P.C (corresponding Section 181 of BNSS, 2023). Reliance in this regard is placed on the judgment of Hon'ble Apex court in C. Chenga Reddy and ors v. State of Andhra Pradesh (1996) 10 SCC 193 decided on 12.07.1996.
13. Considering the fact that PW-3 has nowhere deposed about the calculations made by him regarding investment, the content of his report Ex.P-144/PW-3 cannot be read in evidence to prove said fact as the same shall be hit by provision of Section 162 Cr.P.C (181 of BNSS, 2023). Pertinently, even the other witness PW-5 did not depose anything on the investment issue nor he had prepared any CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 263 of 271 report as prepared by PW-3. Even with respect to investment, there was no minimum benchmark laid down in the guidelines nor the guidelines provided any defined formula for calculating the investment by the applicant companies.
14. Assuming for the sake of argument that the networth and investment necessarily bear the same meaning as sought to be attributed by the prosecution and the information regarding networth and investment furnished by the accused is false. Nevertheless, the mere existence of an alleged factual incorrectness does not ipso facto attract criminal liability unless it induces anyone or leads to any deception.
15. The companies like M/s AMR Limited with the networth of only 1.96 crore, had also been allocated coal blocks by the Screening Committee for their proposed EUP of iron and steel plant, which was yet to be established. Pertinently, the capacity of the EUP proposed to be achieved by AMR was 1 MTPA though as per Ministry of Steel's norms it was assessed to be 0.3 MTPA to be commissioned before December, 2010. Whereas, the case of SKS (A-1) was on far better footing as its case was not the case of any proposed EUP. At the time of filing application dated 12.01.2007 (D-
5), SKS (A-1) already had an established EUP with installed capacity of 0.27 MTPA. In view of the fact that the Screening Committee had allocated coal blocks to various companies, which were having far lesser networth than SKS (A-1), even the networth of Rs. 146 crores as attributed by CBI to be the actual networth of SKS (A-1) as on 12.01.2007, would not have put an embargo upon the Screening Committee to CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 264 of 271 recommend SKS (A-1) for allocation of coal block.
16. The figures of networth and investment disclosed by SKS (A-1) were not invented or created outside the books of account, they were derived from the company's audited balance sheets/annual reports, which were duly enclosed with the application dated 12.01.2007 (D-5). Thus, said documents were readily available to Screening Committee and could have been accessed to check the correctness of the financial information furnished by SKS (A-1). The prosecution has not alleged, much less proved, that said audited financial statements were forged or manipulated.
17. It is worthwhile to note that during investigation, IO had examined numerous members of 36 th Screening Committee and also recorded their statements under Section 161 Cr.P.C. Nevertheless, the prosecution preferred not to examine any of said witnesses and withheld the best evidence available to it to prove the fact that the alleged misinformation contained in the application (D-5) and feedback form (D-29), had influenced the decision of Screening Committee in recommendation of name of SKS (A-1) for allocation of Vijay Central Coal Block. There is absolutely nothing on record to suggest that on the basis of actual financial figures as attributed to SKS (A-1) by CBI, the Screening Committee would not have recommended its name for allocation of Vijay Central Coal Block or that, but for said inflated figures, the name of SKS (A-1) would not have been recommended for allocation of said coal block by the Screening Committee. CBI has also failed to adduce any iota of material to show that any unsuccessful applicant of CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 265 of 271 Vijay Central Coal Block was more deserving than SKS (A-1) based on the actual figures of networth as attributed to it by CBI.
18. The mere fact that financial strength of the applicant company was one of the determinative factor for deciding the inter se seniority does not ipso facto establish it that alleged exaggerated claims of networth and investment were acted upon or led to inducement of the Screening Committee. Inducement being one of the essential ingredient of the offence of cheating, has to be necessarily proved as an independent fact with cogent and concrete evidence and cannot be presumed merely from these guidelines.
19. The very mention of the word 'almost' in the response to Query (i) of column no.24 of the application dated 12.01.2007 (D-5), indicates that the company SKS (A-1) was in the process of obtaining clearances meaning thereby, that some of the clearances were yet to come, though the process had already been initiated. Even the permission to operate the 4th Kiln or to start its commissioning, had already been applied by SKS (A-1) with CECB vide letter dated 26.10.2006 Ex. P-131/PW-1 (D-190 page 578-582) i.e. much prior to the filing of said application dated 12.01.2007 (D-5) and at that time its EUP at Siltara, Raipur already had the installed capacity of 0.27 MTPA, which was ready for operation and commissioning. The permission for same was however, granted by CECB on 05.04.2007 vide its letter dated Ex. P-133/PW-1 (D-190, page 748).
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 266 of 271
20. Even assuming for the sake of argument that the claim regarding the clearance and capacity were false but again, the same will not ipso facto attract criminal liability unless it was done with some dishonest intention. For the reason that SKS (A-1) had already applied for requisite permission for operation and commissioning of 4 th Kiln much before it had applied for allocation with the Ministry of Coal, there appears to be no such dishonest intention on their part to cheat the Ministry of Coal or Government of India, as alleged by the prosecution. The application dated 26.10.2006 Ex. P-131/PW-1 filed by SKS (A-1) for seeking consent to operate 4 th kiln was already pending with CECB and said application was moved much prior to the filing of the application dated 12.01.2007.
21. Indisputably, there was no benchmark of any minimum threshold for networth, investment, EUP capacity or even for land availability for considering the eligibility of the applicant for allocation of Coal Blocks. Nevertheless, said factors were cumulatively determinative for ascertaining the preparedness of the applicant for the development of proposed EUP as well as for development allocated coal block. The availability of land, networth and investment with the applicant were certainly going to give it a competitive edge over the other competing applicants with lesser available land, networth and investment.
22. But, based on above parameters, no comparative chart of seniority of competing applicants had been prepared by the Screening Committee. No material has been brought on record by CBI to suggest that based on said false claims any other more deserving applicant had CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 267 of 271 been ignored by the Screening Committee for recommending its name for said coal block. No witness from the Screening Committee has been examined, who could throw some light as to what all weighed in the mind of the members of Screening Committee for recommending the name of SKS (A-1) for Vijay Central Coal Block or to tell the court whether said false claims had influenced their decision in recommending the name of SKS (A-1) for said coal block.
23. It is important to point out that in para 18 of the application form dated 12.01.2007 (D-5), wherein information regarding land was sought from the applicants, immediately after a query regarding 'Applied for Acquisition', there is a query 'Partly Acquired'. The phrase 'Partly Acquired', is an ambiguous term because, it may mean land partly acquired out of total land applied for acquisition. It may also mean to be the land in respect of which acquisition is partly done i.e. the process for acquisition has been initiated but yet not complete and that may include those land parcels where agreement to sell had been entered into with the vendors but sale deeds were yet to be executed. Such unclear and ambiguous terms in the application format were amenable to different interpretation by different persons as per their own subjective understanding.
24. In the application (D-5), the responses in column no. 18 pertaining to land, have been sought only in 'Yes' or 'No'. The prosecution argument relating to deficiency of land in the main plant area by creating a distinction of 'main plant area' and 'other land' is too far fetched. From such restrictive format of answers, no such intention of the Ministry of Coal to seek disclosure for the available land only CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 268 of 271 for the main plant area, can be gathered. Had there been any such intention to ask for the available land for main plant only and not for the land for composite purpose including other ancillary purposes relating to the EUP, the queries could have been easily put in a different manner. With such restrictive format of answers, which tend to leave the responses unclear and unexplained, making someone liable for not having mentioned the correct figures and attributing criminal intent upon him for doing so, is completely unjustifiable.
25. The prosecution case in respect of all the alleged false claims of networth, investment, land, EUP capacity and clearance, has remained unproved on all the three essential ingredients of Section 420 IPC. For lack of any cogent, concrete and conclusive evidence, the prosecution has failed to establish that said claims in the application dated 12.01.2007 (D-5) or feedback form dated 07.02.2008(D-29), were false to the knowledge of accused; or that they were intentionally made to cheat the Screening Committee or Ministry of Coal to procure the allocation of coal block; or that the Screening Committee or Ministry of Coal had got induced because of said exaggerated and false claims.
26. Even for the offence of criminal conspiracy, which is an independent offence, there is no direct or indirect evidence to establish the prior meeting of mind amongst the accused person. No conspiracy can be inferred even from the admitted facts or from the circumstances proved on record. There is absolutely no evidence on record to show that the recommendatory letter dated 05.02.2007 CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 269 of 271 written by Sh. Subodh Kant Sahai or the letter dated 11.12.2007 of A-5 were ever placed before the Screening committee so as to influence its decision.
27. All the circumstances through which prosecution seeks to prove the charge of criminal conspiracy have also remained unproved for lack of any cogent and credible evidence. The entire case of prosecution for the offence of criminal conspiracy is based on conjectures and surmises without any substantial basis.
FINAL CONCLUSIONS
239. In the light of above discussion and the findings recorded by the court, all the points of determination framed in this case are answered in negative with following final conclusions:-
1. That the evidence adduced on record is highly insufficient to conclusively establish any of the essential ingredients viz. deception, inducement, dishonest intention or wrongful gain for the alleged offence of cheating punishable under Section 420 IPC.
The prosecution has failed to substantiate the allegations for said offence against any of the accused beyond reasonable doubt. In view thereof, A-1 to A-5 are acquitted for the offence of cheating under Section 420 IPC.
2. The prosecution case for the charge of criminal conspiracy under Section 120-B IPC, has also failed miserably against all the accused for lack of any iota of evidence, direct or indirect, to establish any prior meeting of mind amongst the accused persons for the commission of alleged offence. Accordingly, all CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 270 of 271 accused are acquitted for the offence of criminal conspiracy under Section 120-B IPC r/w Section 420 IPC.
240. In view of the aforementioned final conclusions drawn by this court, all the five accused namely, M/s SKS Ispat & Power Ltd (A-1), Anil Gupta (A-2), Deepak Gupta (A-3), Amrit Singh (A-4) and Sudhir Kumar Sahay (A-5) are hereby, acquitted from the charges of both the offences of cheating and criminal conspiracy framed against them.
241. Bail Bonds in compliance to Section 437A Cr.P.C be furnished by the accused. File be consigned to record room after due compliance. Digitally signed by SUNENA (Announced in the open court SUNENA SHARMA SHARMA Date:
on 23rd May, 2026) 2026.05.23
11:40:49
+0530
(SUNENA SHARMA)
Special Judge, (PC Act), (CBI)
(Coal Block Cases)-02
Rouse Avenue District Courts
New Delhi
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
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