Coal scam: HC Gupta’s conviction is in order but Manmohan Singh's acquittal can be questioned

The CBI court was perhaps wrong to hold that the country’s top political executive – in this case Manmohan Singh – should be let off completely on the pretext that he was misled by the civil servants

NR Mohanty May 23, 2017 10:47:01 IST
Coal scam: HC Gupta’s conviction is in order but Manmohan Singh's acquittal can be questioned

A CBI court on Monday (22 May) awarded a two-year jail term to three IAS officers – a retired coal secretary and a two serving bureaucrats – for cheating and criminal conspiracy in a coal block allocation case. The conviction of H C Gupta, the retired IAS officer, on corruption charges is a first for a secretary-rank officer in the union government to face imprisonment in what is now known as the coal scam.

Gupta has been hauled up for taking certain decisions between 2006 and 2009 when he served as the coal secretary and, in that capacity, as the presiding officer of the screening committee that recommended allocation of the coal blocks. Gupta and others have also been charged with misrepresenting facts to the then Prime Minister Manmohan Singh who was in charge of the coal ministry during a major part of this period.

Coal scam HC Guptas conviction is in order but Manmohan Singhs acquittal can be questioned


The verdict indicting Gupta “has jolted the bureaucracy”, The Times of India reported.

The report quoted sources in the higher bureaucracy, without identifying them, to make two different points: one, since the screening committee had, apart from the coal secretary, representatives of other departments, state governments, Coal India and other agencies, why should the coal secretary be singled out for corruption charges?

The anonymous IAS officers were quoted saying: “... Decision-making would be affected if one person has to pay for decisions taken by a committee and where there is no evidence of any personal gain.”

The second point the report made quoting sources in the higher bureaucracy was the following: “The committee only decided based on the facts submitted to it and it is not possible to check each and every fact that is presented before it. In addition, the guidelines did not require the panel to do so. If you start checking facts in each case, decision-making will come to a halt.”

Seeking a reprieve for Gupta and others, the unidentified officers are quoted saying: “The committee and procedure framed for its conduct, arise from administrative decisions whose violation cannot attract criminal liability.”

According to the report, the IAS lobby did not stop there. It also indirectly questioned the acquittal of the then Coal Minister Manmohan Singh who approved decisions “based on these facts.”
After all, they argued, “the screening committee was a recommendatory body, with the decision-making power with the minister.”

Why should the minister be spared if the bureaucrat has to be hauled up in the same case, they asked.

There may be some merit in the argument as to why the minister concerned must not be personally accountable for the decisions taken by him, even if that decision is squarely based on the advice of the bureaucracy. But to argue that a screening committee did not need to check the claims made by the parties bidding for the allocation of coal blocks that involved thousands of crores of rupees worth scarce resource is to wink at the basic tenets of the bureaucratic accountability.

Consider the facts: When the coal scam came to the public domain – by the CAG report and other selective leaks in the media – as expected, the matter went to the court and the case was handed over to the CBI for enquiry in 2012. Of the 204 coal blocks allocated by the government of India between 1993 and 2011, the CBI was asked to enquire which of them were acquired by illegal means. The CBI narrowed down the list to a list of 39 cases.

The allocation of the coal block to Kamal Sponge Steel and Power Limited (KSSPL) in Madhya Pradesh, which has been the basis for the conviction of Gupta and others, falls in this list.

Let us look at the history. When the United Progressive Alliance (UPA) government came to power, Shibu Soren, the Jharkhand Mukti Morcha (JMM) leader and a member of the UPA, demanded and got the coal portfolio. He began the process of handing over the coal blocks at his whims. The then coal secretary PC Parakh stubbornly opposed this move and insisted on auctions to institutionalise coal block sanctions.

But Parakh’s successor, HC Gupta, who became coal secretary in early 2006 decided to play along with the policy of Soren. Unfortunately for Soren, he was indicted for conspiracy in a murder charge and had to quit office towards the end of the same year. Subsequently, then Prime Minister Manmohan Singh took charge of the coal ministry.

The PMO appointed a screening committee headed by Gupta to decide on the coal blocks. And it was under Gupta’s stewardship – between 2006 and 2009 – that the largest number of captive coal blocks were allocated.

Mind you, those were the heydays for coal. In the period between June 2004 and June 2008, the global price of coal went up almost three times – from $63.8 per tonne to $ 171.16 per tonne. And our government was handing out large coal blocks to private parties for free.

Not surprising that anyone and everyone – bidi company owners, truck operators, garment dealers -- with connections in high places applied for the coal block. Look at the credentials of the KSSPL. It was supposed to be a sponge steel and power company but it did not enclose the audited balance sheet for three years as per the stipulations of the guidelines advertised by the coal ministry simply because it was unable to do so – it had filled in imaginary, inflated, numbers.

Nevertheless, KSSPL was invited to present their case before the screening committee. And it did this with an elan. The company claimed that they were a big player in the sponge steel industry and the screening committee, in its wisdom, accepted the claim.

What is interesting – rather startling – is that all the official papers of this period leading to the allocation of the coal blocks are missing from the records. The CBI submitted that most of the presentations made by the applicants like KSSPL and the notes and comments made by the different members of the screening committee have simply disappeared from the files.

Bharat Parasher, the special CBI judge, held it as an evidence of foul play. In fact, the fraud was magnified by the fact that KSSPL which was allocated a 30.76 million tonne coal block for production of sponge iron diverted almost its entire stock to the market and earned a windfall.

Was there a conspiracy between KSSPL and members of the screening committee headed by Gupta? If there a money trail to prove it, the CBI could not establish it.

But the upright CBI judge was convinced that the country’s scarce natural resource being doled out to fraudulent private parties resulting in their illegal income of thousands of crores of rupees could not be dismissed lightly.

The judge rightly held that India’s top bureaucracy has to be made responsible for the huge loss to the national exchequer. But the judge was perhaps wrong to hold that the country’s top political executive – in this case Manmohan Singh – should be let off completely on the pretext that he was misled by the civil servants. The constructive responsibility for the fraudulent allocation must also extend to the political executive, a point rightly made by the anonymous senior IAS officers in the ToI report.

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