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Explained: What coal blocks cases are ED, CBI investigating, and what is their status?

The Supreme Court has asked the Enforcement Directorate to file a status report on over 50 cases by July 15. What cases involving coal blocks allocation are the ED and the CBI investigating, and what is their status?

Written by Deeptiman Tiwary | New Delhi |
Updated: May 19, 2022 11:40:00 am
Workers at a coal mine in Jharkhand. (Partha Paul/Express Archive)

The Supreme Court last week asked the Enforcement Directorate to file by July 15 a status report on the over 50 cases of money laundering it is probing in connection with the coal blocks allocation scam. The directions came in a case where the ED had pleaded that four officers be relieved since their tenure in the agency was complete.

Why has the court sought a report?

The coal scam cases are under strict monitoring of the Supreme Court, which periodically seeks status reports from the CBI and ED, the two agencies probing the cases. According to SC directions, officers associated with the coal blocks cases cannot be transferred without its permission and so agencies approach it whenever an officer has to be relieved.

During the latest hearing, lawyer Prashant Bhushan of NGO Common Cause had raised the issue of cases pending investigation for over a decade. In 2017 too, the SC had expressed concern over delay in investigation and observed that it appeared as if the investigation “would not come to an end”.

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Why has there been a delay?

Sources in the CBI and the ED cited the sheer enormity of the case, and alleged that the influence of corporates too delayed court proceedings.

“You have to understand that when the Supreme Court gave the investigations to the CBI in 2012, there were more than 300 preliminary enquiries conducted. Given the limited resources that the agency has, this itself took a few years to complete. Following this, more than 55 FIRs were registered. It was a massive task since records from as far back as 1993 had to be examined. Bureaucrats and officials then involved, had retired and they had to be traced and examined by teams going across the country,” a senior CBI officer said.

Sources said the agency had put 33 officers on the job. “This was a complex case since a lot of angles were involved. There were cases which had (former CBI director) Ranjit Sinha’s shadow over them which the SC asked us to probe. Then many cases came from the CVC after scrutiny. Then there are big corporates involved who hire the best of lawyers and proceedings are delayed,” the CBI officer said.

Who were involved in the cases?

Some big names of the political and corporate world got embroiled in the coal blocks allocation controversy, including Congress politician and industrialist Naveen Jindal and Dasari Narayan Rao (now dead), RJD’s Prem Chand Gupta and BJP’s Ajay Sancheti. The CBI even examined former PM Singh at a later stage.

A special CBI court in 2020 convicted Dilip Ray, then Union Minister of State for Coal in the government under Atal Bihari Vajpayee of 1999-04, for his alleged involvement in the coal block allocation scandal. The court observed that Ray “abused his official position”, as his decision of “relaxation of policy without any logical or legal basis amounts to gross abuse of his powers by the minister”.

Last year, a Delhi court sentenced former Coal Secretary H C Gupta to three years imprisonment after convicting him in the Moira-Madhujore coal blocks allocation case. Former bureaucrats K S Kropha and K C Samria were also handed three-year jail sentences in the case. Gupta has earlier been convicted in two other cases of coal blocks allocation.

The CBI filed its last chargesheet against Gupta in December last year.

What is the status?

Despite the constraints, CBI sources said the agency has done well to take a significant number of cases to their logical conclusion. “In the 12 cases where trial has been completed, conviction has been achieved in 10. Around 45 chargesheets have been filed. Our investigations are almost complete. The only cases pending are the ones in which either prosecution sanction from the Centre has not been received or three-four cases involving investigations in foreign countries,” Special Public Prosecutor in coal scam cases for CBI R S Cheema said.

CBI sources said sanction for prosecution is pending with the government in about seven cases.

Sources said since the ED registers cases only on the basis of CBI FIRs and chargesheets, it has faced the same obstacles as the CBI and its cases have been similarly delayed.

The ED has much less manpower than the CBI.

“In another six months, the investigations should be complete,” another CBI officer said.

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Total recall: What the coal blocks cases are about

In the early 1990s, the government decided to allocate to private companies coal blocks that were not part of the production plan of the public sector Coal India Ltd and the Singareni Collieries Company Limited (SCCL). A list of 143 coal blocks was prepared initially and inflated to 216 later.

At that time, there were no concrete guidelines for allocation of coal blocks as coal mining was largely restricted to PSUs and many geographic locations were seen as unsuitable for profitable mining. The guidelines were periodically revised through 1993, 1998 and 2003.

Between 1993 and 2005, a total of 70 coal mines were allocated. Then between 2006 and 2010, a further 146 blocks were allocated, but some blocks were also de-allocated owing to companies not starting work. The final list stood at 194.

In March 2012, a leaked draft report of the Comptroller and Auditor General (CAG) revealed irregularities in the allocation and pegged the loss to the exchequer at Rs 10.76 lakh crore. The CAG’s final report as tabled in Parliament in August 2012, however, whittled down the loss to Rs 1.8 lakh crore. This was still the biggest scam India had seen.

The CAG argued that the government had the authority to auction the coal blocks but chose not to, and allottees as received a “windfall gain”.

As the Opposition attacked the Manmohan Singh government on corruption, BJP leaders Prakash Javadekar and Hansraj Ahir approached the Central Vigilance Commission (CVC) with complaints. The CVC referred them to the CBI, which over the next few months registered over 40 FIRs.

Meanwhile, a Parliamentary Standing Committee report said coal blocks distributed between 1993-2008 were done in unauthorised manner, bringing even the NDA period under the scanner. The Supreme Court took cognisance of the case and directed the CBI to directly report to it. not the government. In 2014, it cancelled allocation of 214 coal blocks.

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