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Coal court convicts second firm - Rathi Steel, three officials

All the necessary ingredients of the offence of cheating coupled with dishonesty inducing delivery of property having been carried out in furtherance of the common object of a criminal conspiracy hatched by the accused persons thus clearly stands proved beyond doubt, the court said.

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In its second conviction in a coal scam, a special court here on Tuesday held Delhi-based Rathi Steel and Power Ltd. (RSPL) and three officials guilty of illegal allocation of Chhattisgarh's Kesla North coal block. "I am holding you all guilty," the judge said, ordering the convicts be taken into custody.

Special CBI (Central Bureau of Investigation) judge Bharat Parashar held the firm and three officials -- Pradeep Rathi, Managing Director (MD), Udit Rathi, Chief Executive Officer (CEO) and Kushal Aggarwal, AGM (Project and Finance) -- guilty of various offences Indian Penal Code (IPC) including cheating (section 420) and criminal conspiracy (section 120-B).

"All the necessary ingredients of the offence of cheating coupled with dishonesty inducing delivery of property having been carried out in furtherance of the common object of a criminal conspiracy hatched by the accused persons thus clearly stands proved beyond doubt," the court said.

In its charge sheet filed on February 20, 2015, the CBI had alleged that RSPL had allegedly given false data about its land holdings and capacity to get a coal block in Chhattisgarh. The CBI further alleged that in its application for coal blocks allocation, the company had claimed that it was in possession of 250 acres of land whereas it had only 150 acres. To prove its case, the prosecution examined 20 witnesses whereas, the defence called just four.

On August 5, 2008, RSPL was allocated the Kesla North coal block in Korba, Chhattisgarh.

"...it is crystal clear that the accused persons with a dishonest intention and in pursuance to the common intention and in pursuance to the common object of a criminal conspiracy hatched amongst themselves deceived the screening committee and thereby ministry of coal, government of India on the basis of false representation qua the issue of land showing a higher status/stage of progress made by them towards establishing the end use project so as to procure allotment of a coal block in favour of RSPL," the court said.

In an unusual move, the defence led by senior advocates N Hariharan and Rebecca John appealed for arguments on the quantum on sentencing on the same day itself. During their submission, Hariharan and Rebecca appealed for a minimum sentence saying that the accused had behaved in an exemplary manner during the investigation as well as during the course of the trial. "Not a single gram of coal was extracted, hence, there was no loss to the exchequer," Hariharan added.

However, VK Sharma, senior public prosecutor for CBI, vehemently opposed this plea and appealed for maximum punishment. "The behaviour of the accused was exemplary no doubt, except when they continued to fool the court at all stages," Sharma submitted.

The court will decide the quantum of sentencing on Wednesday. The maximum sentence the convicts may get is up to seven years.

The coal scam refers to a draft report released in March, 2014, by the Comptroller Audit General (CAG) stated that the government exchequer lost Rs1.86 crore since it allotted the coal blocks to private entities and Public Sector Units (PSU) instead of auctioning it during the years 2004-2009. However in 2012, following a complaint lodged by Bharatiya Janata Party (BJP) – the opposition party at the time, the Central Bureau of Investigation (CBI) initiated an inquiry to probe allegations of corruption. Consequently, an First Information Report (FIR) report was filed by the probe agency that accused almost a dozen firms overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocations.

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