Live Markets »News & Advice»Latest Stories»Latest Stories Details
Latest Stories Details

Coal scam case: IAS officers feel betrayed by H C Gupta conviction

Subhomoy Bhattacharjee/ 20 May 17 | 02:05 PM

Image via Shutterstock

The conviction of former coal ministry secretary Harish Chandra Gupta in one of the so called “coal scam" cases makes it the first among them where a government employee has been successfully prosecuted -- that too a secretary-level officer. Along with him, former joint secretary in the ministry, K C Kropha, and the then director, K C Samaria have also been convicted. It has also become a test case to decide to what extent a government officer should take the rap for taking decisions on competing commercial interests.

Related Stories

    No Related Stories Found
Widgets Magazine

From the list of 204 coal mines or blocks allocated by the government of India since 1993 to 2011, the CBI was asked by the courts to decide which of those were made illegally. The prosecuting agency settled on a list of 39 such cases. The allocation of Thesgora-BRudrapuri coal block in Madhya Pradesh to Kamal Sponge Steel and Power by the ministry in November 2008 fell in that list. Incidentally, like in the case of most blocks post 2003, the allocation of this block was a joint one, made to Kamal Sponge along with Revati Cement Private Limited.

These cases were difficult to pursue for a simple reason. The original records of many of these allocations, including those in the case Gupta has been convicted, have disappeared. The CBI has developed the case diary in these cases from secondary sources and then often made the officers in the dock concerned, vet the same as original. In the case of Rudrapuri block for instance, Gupta too had confessed he did not have the original papers but could not prove to the court of Bharat Parasher, that those prepared by CBI were inaccurate.

It is these missing links which has proved the undoing of Gupta and the two other officers. The papers are the records of the allocations to the 289 companies (many of them were joint owners) by a process known as that of the screening committee, chaired by successive coal secretaries. These committees were interdepartmental committees set up by the coal ministry right from the first allocation in 1993 by the then coal minister P C Sangma. They expanded gradually to bring in more ministries in the consultations and also the concerned state governments. It worked well initially though there was a lot of subjectivity in the final allotments. But post 2003 as the demand for coal mines expanded the coal ministry got overwhelmed by the paperwork and lost the plot.  

By the time the UPA government took charge in 2004, coal minister Shibu Soren began to hand out coal blocks by shovels, often overruling his prime minister and a zealous coal secretary, P C Parakh. The rush was intense. At one stage, the ministry received 1,422 applications for 38 blocks on offer. Companies were willing to try any stratagem to get a piece of coal. Movie makers, bidi company owners, truck owners and garment dealers, all lined up outside Soren’s office. Money and recommendations flew through the government, including even a forged one from the Prime Minister’s Office.

While Parakh had pushed for auctions to bring sanity to the allocations, Soren over ruled him. As Parakh’s successor, Gupta was willing to play along with the flawed system. Worse, during his term from 2006 and 2008 the coal ministry’s records went into shambles. Often presentations made by the prospective companies along with the file notes about the same made by the screening committee disappeared. This was pointed out in the damning audit report by the CAG under Vinod Rai, which led to the filing of the cases from 2012 onwards.

The CBI and the courts held the lack of evidence was a clear indication of foul play. But Gupta and even Parakh claimed the absence of papers could not be held as the sole reason to prove it was. Yet as of now it is the perceived conspiracy that has got Gupta into trouble. The CBI special court has held that it is not just missing papers but a case where the company was given coal from the 30.76 million tonne block to only manufacture sponge iron but instead diverted the mineral to the markets, a case of malafide. Without the papers, in none of these cases it is possible for the ministry to argue that a transparent system of decision making was adopted. Unfortunately the bulk of them happened during Gupta’s term from 2006 to 2008. Post retirement, he had joined the Competition Commission of India as a member but as the charges got closer home, he had to resign.

The larger impact of his conviction is the sense of betrayal IAS officers feel they are prone to, for taking decisions among competing economic forces. The coal cases and the earlier 2G airwaves allocation are, according to them examples of what can happen, when the political masters try to escape responsibility by pinning blame on them. Last year, when Gupta broke down in the court saying he could not afford the fees of hiring a lawyer, the IAS officers’ association not only rallied behind him and offered to pay the fees but also raised the issue of culpability in decision making. CEO of Niti Aayog, Amitabh Kant Tweeted in his support, saying genuine errors in commercial decision-making must be decriminalised. Kant’s expression of support says penalising bureaucrats, will again create a policy paralysis if there is a jail term awaiting them for a decision, gone wrong. The court has however not agreed it is a case of genuine error.Subhomoy Bhattacharjee is the author of a recently released book, India’s Coal Story

Widgets Magazine


Company Price Gain (%)
ICICI Bank297.551.47
Reliance Inds.1,032.351.22
H D F C1,855.250.47
Tata Motors306.550.31


Currently No Poll Available.

Online Portfolio

You can create Online Portfolio here using the below button.

Widgets Magazine