Coal scam case: Former coal secretary HC Gupta gets 3-year jail term

A Special court here on Monday sentenced former Coal Secretary HC Gupta to three years imprisonment and former Joint Secretary K S Kropha to two years jail term in a case related to the allocation of the Lohara East Coal block in Maharashtra.

Special CBI Judge Arun Bhardwaj also imposed a fine of Rs 1 lakh on Gupta, and Rs 50,000 on Kropha for conspiring to cheat the government for the allocation of Grace Industries Ltd, Nagpur.

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Grace Industries was fined Rs 2 lakhs, and its Director and another accused in the case Mukesh Gupta was sentenced to four years imprisonment. He was also fined Rs 2 lakhs.

On July 29, the CBI court convicted the accused in relation to the crime. "The evidence on record as encapsulated above shows that there was criminal conspiracy amongst Grace Industries Ltd, Mukesh Gupta, HC Gupta and KS Kropha for procuring recommendation of allocation of Lohara East Coal Block in favour of Grace Industries," the special judge Arun Bhardwaj had said while convicting them in the coal scam case.

The coal block, located in an area of 3.5 sq km and was having estimated geological reserves of approximately 57 million tons, was jointly allocated to Grace Industries along with Murli Industries Ltd.

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As per the CBI statement, during the investigation, it was revealed that Grace Industries had secured an allocation of 16.14 million tons of coal reserves in the Lohara East coal block on the basis of false information about net worth, capacity, equipments and status of procurement and installation of plant.

It was found that the said private company, in its application, claimed its net worth as Rs 120 crore whereas its own net worth was Rs 3.3 crore and falsified its existing capacity as 1,20,000 TPA against actual project capacity of 30,000 TPA.

The company claimed two kilns in production and 3 kilns under installation whereas as on September 7, 2006, it had only one kiln in operation.

After allocation of coal block, Mukesh Gupta sold the entire equity/share of his company to another person at a profit of about Rs 20 crore.

It was found that 51 private Companies had applied for the said coal block, however, criteria for inter se priority was not followed to determine the most suitable company.

The company had also submitted an incomplete application, which as per the guidelines of the Coal Ministry, was liable to be rejected.

However, officials concerned of the Ministry did not ensure scrutiny of applications. Moreover, the application of the company was also not sent to the Steel Ministry, the administrative ministry concerned, for its assessment.

It was also found that the company was recommended for allocation of coal block without the recommendations of the Ministries of Steel and Power and the Maharashtra government.

Moreover, excess coal was allotted to the company despite a written complaint made by the other allottee company.