Special Judge Dheeraj Mor said the Central Bureau of Investigation (CBI) had failed to establish “any illegal act” by Hindalco Industries Limited, S K Tamotia and P R S Mani.
“In the absence thereof, there is neither any evidence on record nor any justifiable reason to infer that they entered into a criminal conspiracy to commit any illegal act, including the offence of criminal breach of trust or cheating. Therefore, they are entitled to be discharged for the said offence,” the judge said in an order dated May 30.
The case stems from a 2015 FIR regarding the allocation of the Talabira-I coal block to Hindalco in 1994, alleging that the company committed criminal breach of trust by using coal extracted from the block for its power plant at Hirakud, despite an initial allocation letter stipulating that the coal was meant only for a proposed expansion unit.
However, the court rejected this contention, noting that the “impugned stipulation” regarding the exclusive use of coal for the expansion unit was conspicuously absent from the formal mining-lease deed executed in 2003.
It rejected as “wholly misconceived” the CBI’s contention that the allocation letter of February 25, 1994, constituted a concluded contract of entrustment of the Talabira-1 coal block for carrying out mining operations.
The court said the letter was a mere expression of government intent subject to the fulfilment of statutory formalities and continued government discretion, instead of conferring any vested rights on Hindalco.It said the legal relationship giving rise to entrustment crystallised only upon the execution of the mining-lease dated June 3, 2003.
“Accordingly, when the allottee (Hindalco) had not acquired any vested right to extract or utilise coal prior to execution of the mining lease, it would be difficult to hold that a mere pre-lease allocation letter constituted ‘entrustment of property’ or ‘dominion over the property’ to attract the ingredients of criminal breach of trust,” the court said.
Significantly, there is no allegation against the company that it defied, violated, breached or acted in derogation of any stipulation contained in the mining-lease deed, the court added.
Rejecting the charge of criminal breach of trust, it said, “In the absence of any allegation that the decision-making process itself stood vitiated by criminal intent or extraneous consideration, an investigating agency cannot retrospectively convert matters of policy into allegations of criminal misconduct through inferential reasoning or hindsight scrutiny.”
The court also trashed the CBI’s allegation that Mani, on the company’s behalf, addressed a communication in June 2006 to the Union Ministry of Coal, “falsely representing” that mining operations in the Talabira-1 coal block had commenced on October 29, 2003, after obtaining all other necessary statutory clearances.
The CBI had alleged that as requisite statutory clearances were not obtained from the coal controller and the State Pollution Control Board, the said statement amounted to misrepresentation.
“There is no evidence on record to demonstrate that the alleged misrepresentation induced anyone, including officials of the Ministry of Coal, Government of India, or any other public authority, to part with the property or undertake any act which it would otherwise not have undertaken. Consequently, no criminality whatsoever can be attached thereto,” the court said.
Regarding the CBI’s allegation that in response to a query raised by the Technical Committee of the Standing Committee dealing with the approval of the revised mining plan of the Talabira-1 coal block for enhancement of production capacity, Mani submitted a communication of April 2006 to the coal ministry, where answering the query of “the existing linkage should not be withdrawn”, a false response was written to the effect that “status quo maintained”.
This false response misled the ministry and procured the approval for the revised mining plan in May 2006, the federal agency had alleged.
“The record does not suggest that the approval of the revised mining plan would have been refused solely on account of discontinuance of coal linkage, particularly when the ministry itself was conscious of the prevailing factual position and had, by then, altered its approach in light of acute shortage of coal.
“Consequently, by no stretch of reasonable imagination, the approval of the revised mining plan in the year 2006 can be held to have been procured through deception or inducement based upon the alleged misrepresentation…,” the court said.
It added that dishonest inducement for the offence of cheating was also not satisfied in the case.