Court asks CBI to record Manmohan statement in coal scam

New Delhi, December 16

The CBI was today directed by a special court to record statements of former Prime Minister Manmohan Singh, who was holding charge as the Coal Minister in 2005, and others in a coal blocks allocation scam case allegedly involving top industrialist Kumar Mangalam Birla.

Refusing to accept CBI's closure report filed in the matter, Special CBI Judge Bharat Parashar said: "I have ordered further investigation. I desire that statements of the then minister of coal (Manmohan Singh) be recorded besides other officials."

The court also directed the agency to file status report of its further probe in the case on January 27, next year.

The court passed the order in a case in which an FIR was lodged against Birla, former Coal Secretary PC Parakh and others relating to allocation of Talabira II and III coal blocks in Odisha in 2005 to Hindalco.

Earlier, on December 12, court had reserved its order for today on the CBI's closure report filed in the matter, in which the agency had also submitted the case diary and crime files in a sealed cover.

On November 25, the CBI had come in for some tough questioning from the court which had asked why the agency did not question former Prime Minister Singh, who was also holding the Coal portfolio between 2005 and 2009.

The court's observations had came after CBI had submitted that initially it felt Singh's examination was required, but later it was found to be not necessary.

Singh was heading the Coal Ministry when Birla's firm Hindalco was allocated Talabira II & III coal blocks in 2005.

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

CBI had booked Birla, Parakh and other Hindalco officials under various IPC sections, including criminal conspiracy and criminal misconduct on part of government officials.

On November 10, CBI had told the court that there was "prima facie enough material" to proceed against some private parties and public servants in the case.

The Supreme Court-appointed special public prosecutor (SPP) RS Cheema for CBI had submitted before the judge that the court can take cognisance of the offences mentioned in the closure report as there was prima facie "evidence against the accused to show their involvement".

The court, in its detailed order, observed that documents recovered during the probe coupled with the fact that Birla had met Manmohan Singh, Parakh and others and had also written two letters to then Prime Minister showed that a "concerted effort" was being made to "manipulate" the entire system.

"Thus if in the light of the aforesaid documents recovered, the subsequent meetings which Kumar Mangalam Birla had initially with the Prime Minister and thereafter with P C Parakh or with Dasari Narayan Rao (the then Minister of State for Coal and Mines) are seen coupled with the two letters dated May 7, 2005 and June 17, 2005 written by him to the Prime Minister requesting for allocation of Talabira-II coal block, then it is found that a concerted effort was being made to manipulate the entire Government machinery so as to protect the interest of M/s HINDALCO," the court said.

It, however, clarified that there cannot be any objection if the head of a leading industrial house met the Prime Minister or other top officials "but when such meetings are seen in the over all facts and circumstances as mentioned above coupled with the follow up action which resulted at the administrative level in the government then it certainly raises eye brows."

It also said that in the final report submitted by CBI, it was stated that even the reasons mentioned by Birla to Parakh for accommodating HINDALCO in allotment of Talabira-II coal block which were reproduced by Parakh in one of his notes in August 2005, were "found to be not correct".

While directing CBI to question Manmohan Singh and others, the court observed that members of the screening committee and Ministry of Coal, including the ministers heading it, were acting as trustees of important nationalised natural resources of the country.

"In a democratic society, it is incumbent on such persons having dominion over the nationalised natural resources of the country to ensure that the said resources are handled and distributed in an objective and transparent manner with equal opportunities to one and all. With the aforesaid directions, I am accordingly sending the matter back to CBI for further investigation," the judge said.

Referring to the documents placed before it by the CBI, the court observed that certain "loose ends" were required to be tied up first so that a "clear and comprehensive picture" may come up on the record.

"There are certain circumstances which need to be elaborated/explained especially as regard the manner and the circumstances under which the matter was taken up in PMO or under what circumstances recommendations of the 25th screening committee (in which HINDALCO was not considered favourable for allocation of Talabira-II block) were set aside even though it already stood approved," it said.

The judge also said that it was needed to be clarified as to under what circumstances the settled procedure of making allocation of various coal blocks through screening committee route was "not adhered to" in this matter.

In its order, the court also referred to an August 17, 2005 letter written by Orissa's Chief Minister Naveen Patnaik requesting the then Prime Minister to provide required coal linkage to important project of HINDALCO.

The court, however, clarified that it was not questioning the discretion vested either with the screening committee or the Prime Minister as Minister of Coal but it was primarily the manner in which "this discretion has been exercised which is subject to judicial review."

"The moot question to be examined is as to whether the procedure laid down as per law or the guidelines earlier framed were duly followed in the entire process of allocation of coal block to HINDALCO or not. It also needs to be seen as to under what circumstances a deviance from the settled rules/ regulations or the guidelines laid down was effected," it noted.

"Whether the entire matter was dealt with at all levels in an objective manner or the subjectivity prevailed so much that the objectivity or the rule of law lost its relevance in the entire process completely," the judge observed.

Detailing the probe done by the CBI, the court said that during the search conducted at the office of M/s Aditya Birla Management Corporation Pvt Ltd in New Delhi, not only a huge sum of Rs 25,01,41,100 was recovered but certain letters written by Subendu Amitabh, its Group Executive President, to HINDALCO's MD were also recovered.

It said that during the probe, CBI recorded statements of a number of officers of the Ministry of Coal and the PMO while Birla and various officers of the Aditya Birla Group were also examined.

In its order, the court said after Birla wrote a letter to Manmohan Singh on May 7, 2005, a report from the Ministry of Coal was sought and when no response was received, repeated reminders were sent to the ministry to expedite their reply.

It said that Birla's second letter of June 17, 2005 to the Prime Minister was also followed up in "right earnest" by the officers of PMO.

"I may also again mention that there may not be anything abnormal or wrong if any such letter is forwarded by the PMO to the concerned ministry for necessary action or a report is called for but if in the overall facts and circumstances as discussed above the number of reminders which were sent by the PMO as well as repeated telephonic requests seeking an early response from the MoC are seen then entire process raises grave shadows of suspicion," the judge said.

The court said despite the fact that the matter relating to allocation of Talabira-II coal block was already dealt with earlier, the issue was sought to be "re-opened" pursuant to the two letters written by Birla to Manmohan Singh.

It said when MoC's then section officer Premraj Kuar had observed that it would not be possible to accede to request of allocation of Talabira-II coal block to HINDALCO, the said note "was conveniently overlooked/not approved at the higher levels."

It said fresh proposals were made by Parakh primarily to accommodate HINDALCO in allocation of Talabira-II coal block but Dasari Narayan Rao had cautioned that any deviation from screening committee recommendations will not be appropriate.

The court also appeared to agree with the submission of Supreme Court-appointed special public prosecutor (SPP) R S Cheema who had argued before it that he does not agree with the conclusion drawn in the final report that no criminal offence has been committed in the entire process.

"In fact, the submission of SPP RS Cheema appears to be a logical conclusion flowing out not only from the various documents which were seized during the course of investigation but also from the manner in which the entire process was undertaken by the MOC and the PMO," it said. — PTI