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Coal scam: three directors of Rathi group convicted, but questions remain

Saurav Datta | Updated on: 26 July 2016, 17:16 IST

Over the last three years, the coal scam drama has played out before the public eye. Power and steel corporations, which blatantly violated the provisions of the Coal Bearing Areas Act, continue to be in the eye of the storm.

On Tuesday, 26 July, the Supreme Court-appointed special court headed by Additional Sessions Judge Bharat Parashar handed out the second conviction in the scam, among the total of 21 cases it is hearing.

Three directors of Rathi Steel and Power Ltd (RSPL) - managing director Pradeep Rathi, CEO Udit Rathi and additional general manager Kushal Aggarwal - were held guilty of restoring to fraud and bribery to secure the Kesla North coal block in Chhattisgarh. The total quantum of land acquired was 250 acres.

The three men convicted are RSPL MD Pradeep Rathi, CEO Udit Rathi and Addl GM Kushal Aggarwal

The CBI had chargesheeted the trio for illegally acquiring land, without carrying out any social impact assessment, misrepresenting facts before the legally-mandated screening committee - all in connivance with government officials.

During arguments, the accused had contended that neither had they caused any wrongful loss to the government, nor secured any private profit. However, Senior Advocate RS Cheema, appointed by the Supreme Court as Special Public Prosecutor, managed to convince the court that the trio had indeed indulged in cheating.

The first conviction

The first conviction had come in March this year, against two top directors of the Jharkhand Ispat Pvt Ltd in March last year - RC Rungta and RS Rungta.

The duo was held guilty of criminal conspiracy and fraud. The company, owned by the Rungta Group, was also slapped with a fine of Rs 25 lakh. The directors were ordered to personally pay fines of Rs 5 lakh rupees each.

Convicted on 28 March this year, the Rungtas moved the Delhi High Court. A bench headed by Justice Siddharth Mridul granted them interim bail in May this year, and the case is still pending.

Political overtones

The massive scam - on a scale hitherto unseen in India - is alleged to have occurred when the Congress-led UPA was in power at the Centre.

However, when the BJP-led NDA government came to power, Solicitor General Ranjit Kumar contended before the Supreme Court that it should not take too tough a stance in the matter.

The apex court had ruled that all appeals and even applications - even interim ones, should be filed only before it; the accused were disallowed from moving the high courts. But subsequently, it softened its stance and held that the accused and the convicted could approach the high courts which had jurisdiction.

In April this year, the Special Court framed charges against steel and power baron Naveen Jindal and five of his company's top officials. Jindal was an elected Congress MP and a minister under the UPA regime.

Hearings are on, but it would be interesting to see the final outcome of the case, because it has the potential to be laden with political overtones.

Corporate criminal liability

In the field of environmental jurisprudence, there exists a 'trusteeship principle'. This means that all natural resources belong to the public. The government is only a trustee, not the owner.

So, charges of cheating, and especially the conviction of top honchos of private corporations, does mark a watershed moment in India's law, because, the concept of corporate criminal liability is still a nascent one in India.

However, the Special Court, which is yet to pronounce its sentence in the present case, seems to have followed the ruling of the Supreme Court's January 2015 ruling in the Sunil Bharti Mittal v Central Bureau of Investigationcase.

The court held that senior officials of corporations, even privately held ones, can be prosecuted and convicted for illegal acts.

But then, some important questions remain unanswered:

Should the companies' owners be allowed to escape liability?And why hasn't a single government employee been prosecuted or convicted yet?

Edited by Shreyas Sharma

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First published: 26 July 2016, 17:16 IST
 
Saurav Datta @SauravDatta29

Saurav Datta works in the fields of media law and criminal justice reform in Mumbai and Delhi.

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