SC quashes charges framed against Karnataka-based private firm accused of illegal sale of coal rejects

PTI, Aug 24, 2024, 8:19 AM IST

New Delhi: The Supreme Court on Friday set aside a Delhi court order framing charges against a Karnataka-based private firm, accused of facilitating illegal sale of coal rejects through another firm, saying the CBI embarked on a “roving and fishing inquiry” based on a Comptroller and Auditor General (CAG) report.

A joint-venture agreement was executed between the Karnataka Power Corporation Limited (KPCL) and M/s Eastern Mineral and Trading Agency (EMTA) for a period of 25 years for the development of captive coal mines and supply of coal to a thermal power plant of the KPCL — the Bellary Thermal Power Station (BTPS).

The KPCL was allocated three coal blocks in Maharashtra by the Centre for the development and operation of coal mines dedicated to feeding the BTPS.

It was alleged that EMTA entered into a criminal conspiracy with an objective to facilitate illegal sale of coal rejects by GCWL (M/s Gupta Coalfields and Washeries Limited) that were generated during washing of coal and gained undue pecuniary advantage to the tune of Rs 53.37 crore.

The special CBI court in Delhi, on March 3, 2022, framed charges of criminal conspiracy, breach of trust and other offences under the Prevention of Corruption Act.

“We are of the opinion that the respondent — CBI — embarked on a roving and fishing inquiry on the strength of the audit report of the CAG and then started working backwards to sniff out criminal intent against the appellants.

“The underpinnings of what was a civil dispute premised on a contract between the parties, breach whereof could at best lead to determination of the contract or even the underlying lease deed, has been painted with the brush of criminality without any justification. This criminal intent has been threaded into the dispute by the respondent, CBI, by misinterpreting the clauses of the agreements governing the parties and by heavily banking on the observations made in the audit report of the CAG that has not attained finality till date,” said a bench comprising Justices Hima Kohli and Ahsanuddin Amanullah in its judgment.

The bench termed the infirmities “glaring” and quashed the trial court’s order framing charges against the EMTA and its officials.

Writing a 101-page verdict, Justice Kohli said it would be sufficient to arrive at a prima facie view that the allegations levelled against the firm have “pre-dominant contours of a dispute of a civil nature” and do not have the makings of a criminal offence.