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 investigationCBI 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 forCBI 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 allCBI 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-40N. 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.) annexures11.5.3 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 ofCBI 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-3CBI 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 PrimeCBI 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.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
RC No. 219 2014 (E) 0016 Page No. 146 of 271
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.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
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 factCBI 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.”
{
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 suchCBI 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, ChhattisgarhTel : Ph 07721-264379 to 204384. Fax : 07721-264378, E-mail : [email protected]
www.sksispat.comApplication 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 YEARS9 PROFIT IN LAST 3 YEARS 2.64 Cr 10.36 Cr 18.94 Cr 31.99 Cr
PBT10 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.
CBI Vs. M/s SKS Ispat & Power Ltd. & Ors.
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 lossesAs 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 theCBI 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 (1×350 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 237.39CBI 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 IndiaCBI 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, MaharashtraSubject: 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-Ã -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)/100×100= 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 CoalNew 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/OCCBI 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 orCBI 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 statutoryCBI 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 toCBI 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 DeepakCBI 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.
RC No. 219 2014 (E) 0016 Page No. 271 of 271
