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Monday, May 22, 2017

Coal Allocation Scam - Former coal secretary HC Gupta, 2 others get 2-year jail term; granted bail immediately Monday May 22,2017

Former Coal Secretary H C Gupta and two serving senior officials were Monday May 22,2017 awarded two-year jail term by a Delhi court for irregularities in the allocation of a coal block in Madhya Pradesh to a private firm.
Besides Gupta, who was the Coal Secretary from December 31, 2005 to November 2008, then joint secretary K S Kropha and then director K C Samaria in the Coal Ministry have also been awarded two-year jail term.
Soon after the pronouncement of the sentence, special CBI court granted bail to all the convicts in the case.
CBI had in October 2012 lodged an FIR in the matter, but on March 27, 2014 it filed a closure report in the case.
The court rejected the closure report on October 13, 2014 and summoned Gupta and others as accused.
The CBI had alleged that the firm had misrepresented its net worth and the existing capacity, adding that the state government had also not recommended the firm for the allocation of any coal block.
The court had on October 14 last year framed charges against the accused, observing that former prime minister Manmohan Singh was kept in the "dark" by Gupta, who had prima facie violated the law and the trust reposed in him on the issue of coal block allocation.
As many as ten more coal cases are pending against Gupta and the proceedings are going on individually. 

The Supreme Court of India(SCI) had last year dismissed his plea seeking joint trial in all these cases

What is Coal Scam ?

A report by the Comptroller and Auditor General of India showed inefficient and possibly illegal allocation of coal blocks between 2004 and 2009. It estimated loss to the exchequer to the tune of Rs 10.7 lakh crore but it later toned this amount down to Rs 1.86 lakh crore in the final report.
The central point of the CAG report that showed improper allocation was that the government had the authority to allocate the coal blocks. However, this was to be done via competitive bidding. But the government chose to take another route and avoided competitive bidding, the CAG report said. CAG observed the revenue secured from the allottees for allocation was much less than what could have been if there was competitive bidding–hence presumptive loss to the exchequer.
The presumptive loss was factored in to estimate the windfall gains to allottees first at Rs 10.673 lakh crore and later toned down to ₹ 1.856 lakh crore. After the CAG submitted its final report to Parliament, then Prime Minister Manmohan Singh read a statement that rebutted the report in the alleged/presumptive loss as well as the reading of the law. He had also said that the observations of the CAG were disputed.
The initial CAG report didn’t talk about corruption, rather inefficient allocation. However, after BJP filed a complaint with the Central Vigilance Commission, the CVC directed CBI to probe the matter for corruption. At least a dozen companies were named in the FIR that resulted in a criminal investigation. Accusations ranged from malicious means for securing allocation, overstating net worth, non-disclosure of prior allocation and hoarding rather than the development of allocated resources.

Industrialists like Naveen Jindal and Kumar Mangalam Birla have also found their name in FIRs in the Coal Scam probe. A report of the parliamentary standing committee said that the allocation of blocks between 1993 and 2008 had been unauthorised. It recommended deallocation of all blocks where construction had not started and forfeiture of bank guarantees in others. Over the course of the investigation, Supreme Court constituted a special court to try all cases related to the coal scam.

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