PC Parakh's arbitrary action caused loss to PSU: Court

New Delhi: Former Coal Secretary PC Parakh's acts of "omission and commission" prima facie raised a grave shadow of doubt about his conduct in the entire process of allocation of Talabira II and III coal blocks which resulted in causing loss to a PSU, a Special court observed on Wednesday.

The court said his "arbitrary action" to accommodate HINDALCO in Talabira II and III coal blocks allocation resulted in negating proposal of state-owned PSU Neyveli Lignite Corporation Ltd (NLC) to set up a power plant in Odisha.

 PC Parakhs arbitrary action caused loss to PSU: Court

Former coal secretary PC Parakh. IBNLive

"His (Parakh's) apparent arbitrary action to accommodate M/s HINDALCO in Talabira II and III coal block resulted in negating the proposal of NLC to establish a 2000 MW power plant in Odisha and thereby causing loss to a PSU and windfall profit to a private company," Special CBI Judge Bharat Parashar said.

"Thus these acts of omission and commission prima-facie raises grave shadows of doubts about his conduct in the entire process," the judge observed and also added that he remained silent on the issue of excess coal allocation to HINDALCO.

The court also observed if Parakh's 12 September, 2005 note, proposing HINDALCO's accommodation in the coal block allocation is read, it "prima facie gives an impression that all efforts were being made to accommodate the claim of HINDALCO".

"However, not only wrong facts were mentioned in the note regarding formation of a joint venture company between NLC and MCL (Mahanadi Coalfields Ltd) for setting up the power plant but the note was also silent as to whether any consent of either NLC or of MCL qua the proposals being now propounded by him was obtained or not," it noted.

"It is beyond comprehension as to how Secretary Coal can take any action on their behalf even if MOC (Ministry of Coal) was having some administrative control over them," the court added.

The court said Parakh was not only the Coal Secretary but also the Chairman of 25th Screening Committee and while proposing the new options of accommodating HINDALCO in the coal block, he did not mention anything about already approved guidelines.

"He (Parakh) chose to remain silent as regard the excess coal allocation to HINDALCO even after the new proposal to accommodate HINDALCO in Talabira-II & III Coal Block was approved by the Minister of Coal. This act of silence on his part prima-facie appears to be a conscious decision," it said.

It observed that Parakh even made a "wrong noting" in the file by stating that both NLC and MCL intends to establish the power plant jointly by forming a joint venture company.

"He (Parakh) mentioned the reasons put forward by HINDALCO in their support without stating anything in the note about the veracity or otherwise of the said claims and which reasons as discussed above were in fact contrary to record. This again prima-facie appears to be a conscious decision on his part," it noted.

The judge said that the then Coal Secretary also did not point out in his noting that Talabira III coal block was a reserved coal block for PSU and already stood allotted to MCL.

"He (Parakh) thus compromised the interest of MCL even qua Talabira III by jointly allocating the said coal block also to HINDALCO. In fact Talabira-III coal block was not even on offer to private parties.

"He also did not refer the matter qua HINDALCO to the Screening Committee and chose to over-turn the recommendation of the Screening Committee on his own without any legally sustainable reason or logic," it said.

"The public servants involved in the process thus manifestly failed to observe those reasonable safeguards against detriment to the public interest, which having regard to all circumstances, it was their duty to have adopted," it said.

PTI

Updated Date: Mar 11, 2015 22:36:41 IST