Was Birla allocated coal blocks as per norms: Court asks CBI

A special court on Monday asked the Central Bureau of Investigation to clarify whether "rule of law" was followed in allocation of coal blocks to top industrialist Kumar Mangalam Birla's Hindalco.

During the hearing on the closure report filed by the CBI in its FIR lodged against Birla, former coal secretary P C Parakh and others, the court asked the agency whether there was an act of "omission or commission" in the allocation of blocks to Hindalco.

"You (CBI) have to clarify three things. First, whether the rule of law was followed or not. Second is whether there was an act of omission or commission in it and the last one is whether the act of omission or commission, if any, has an element of criminality," Special CBI Judge Bharat Parashar said.

During the hearing, the CBI's investigating officer told the court that during their probe, they have not found any criminality in allocation of coal blocks to Hindalco.

The IO said that initially the screening committee had not recommended allocation of coal blocks to Hindalco but later on it reviewed its decision at the request of Birla and said that blocks be given to Hindalco.

The judge, however, asked the IO, "whether this route was permissible to accommodate him like this."

The court also said, "We are not here to see whether coal blocks were rightly allocated. We have to see whether rule of law was followed."

However, when the judge posed the queries to the IO, he said that special public prosecutor R S Cheema would address the court on these issues.

"Further clarification has been sought. IO said that in the absence of special public prosecutor (SPP), he is not in a position to make any submission and he may be given sometime to brief the SPP so that response to the query being made by the court is accordingly given," the judge said and fixed the matter for September 12.

The CBI, on August 28, had filed a closure report in the case in which it had earlier lodged FIR against Birla, Parakh and others in one of the coal blocks allocation scam cases.

The FIR against Birla, Parakh and others was registered in October last year by CBI which had alleged that Parakh had reversed his decision to reject coal block allocation to Hindalco within months "without any valid basis or change in circumstances" and shown "undue favours".

The FIR related to allocation of Talabira II and III coal blocks in 2005 and CBI had booked Birla, Parakh and other officials of Hindalco under various IPC sections, including criminal conspiracy and criminal misconduct on the part of government officials.

During the investigation, CBI, however, had found that there was no "quid pro quo" on the part of Parakh and there was no wrongdoing in allocation of coal blocks to Hindalco.

In its FIR, the agency had alleged that during the 25th Screening Committee meeting, chaired by Parakh, applications of Hindalco and Indal Industries were rejected for mining in Talabira II and III "citing valid reasons".

On the recommendations of the Screening Committee, the coal blocks were allocated to Mahanadi Coalfields and Neyveli Lignite Corporation, both public sector undertakings.

These recommendations were placed before the "Competent Authority" which agreed with Parakh, who later issued letters of allocation to the PSUs on June 16 and July 15 of 2005.

Within days, a "personal meeting" took place between Parakh and Birla in which the industrialist requested for the allocation of Talabira II coal block, CBI had said.

"Pursuant to these letters and personal meeting between Parakh and Birla, Parakh, by abusing his official position as a public servant recommended the allocation of Talabira II along with Talabira III coal block to Hindalco Industries Ltd, along with other two companies without any valid basis or change in circumstances and with the sole intention to show undue favours to Hindalco Industries Limited," the agency had alleged in its FIR.

CBI had alleged that Parakh recommended formation of a joint venture between Mahanadi Coalfields, Neyveli Lignite and Hindalco with equity share holding of 70 per cent, 15 per cent and 15 per cent respectively.

The FIR had alleged that inclusion of Hindalco reduced the share of Neyveli Lignite in the coal field.

"Due to this arrangement, the proposed power project of the NLC could not take off as planned," it had alleged.

Defending his decision, Parakh had earlier said, "There is absolutely nothing wrong with the decision. It was a very fair and correct decision that we took. I don't know why CBI thought that there is a conspiracy."