Delhi Court Discharges Aditya Birla Group's Hindalco, Former Executives In Talabira Coal Block Case

A Special CBI Court in Delhi has discharged Hindalco Industries Ltd, its former President and CEO S.K. Tamotia, and former General Manager (Corporate Affairs) P.R.S. Mani in a case arising from allegations relating to the utilisation of coal from the Talabira-1 coal block. The case also involved allegations of misrepresentations made during the approval process for a revised mining plan.

Special Judge (PC Act) (CBI) Dheeraj Mor of the Rouse Avenue Courts held that the prosecution had failed to establish that any act attributed to the accused was illegal. The Court consequently found no basis to proceed on the allegations of criminal breach of trust, cheating or conspiracy.

“In the instant case, the prosecution/CBI has failed to establish that any of the act of accused persons in relation to the present case is illegal. In absence thereof, there is neither any evidence on record nor any justifiable reason to infer that they entered into criminal conspiracy to commit any illegal act including the offence of criminal breach of trust or cheating. Therefore, they are entitled to be discharged for the said offense., the oourt noted

The case arose from a CBI FIR registered in January 2015 concerning the allocation and utilisation of the Talabira-1 coal block in Odisha. According to the prosecution, Hindalco had utilised coal extracted from the block in its existing 67.5 MW captive power plant at Hirakud.

The CBI alleged that this was contrary to a stipulation in the 1994 allocation letter under which the block had been identified for proposed captive power projects.

The prosecution also alleged that P.R.S. Mani, acting on behalf of the company, made misrepresentations in letters dated January 18, 2006 and April 14, 2006. These letters were submitted while the company's revised mining plan for enhanced production capacity was under consideration by the Ministry of Coal.

Examining the allegation of criminal breach of trust, the Court held that the stipulation relied upon by the prosecution was not incorporated into the mining lease executed on June 3, 2003. It therefore held that the stipulation did not govern the entrustment created under that lease.

“In view of the aforesaid material, it is evident that the impugned stipulation was neither mandated by the statute nor compulsarily required to be incorporated into the mining lease deed. The applicable guidelines in relation to such stipulation were neither rigid nor immutable and evolved in accordance with the prevailing circumstances concerning the supply and availability of coal in the country. Be that as it may, once the impugned stipulation was not incorporated in the mining lease deed dated 03.06.2003, the same did not govern the entrustment created thereunder.”, the court ruled

The Court further held that the material on record did not support the allegation that the representations attributed to the accused had induced any authority to part with property. Nor was there any evidence that any authority had taken a decision it would not otherwise have taken because of those representations.

“Furthermore, there is no evidence on record to demonstrate that the alleged misrepresentation induced anyone, including officials of Ministry of Coal, Government of India or any other public authority to part with the property or undertake any act which it would otherwise not have undertaken. Consequently, no criminality whatsoever can be attached thereto.”, the court observed.

The Court also held that there was no material to show that the alleged misrepresentations influenced the approval of the revised mining plan. It further noted that issues relating to commencement of mining operations, excess coal extraction, environmental approvals and the change in the name of the lessee either were not attributed any criminality in the charge-sheet or were not made the subject matter of the present proceedings.

Concluding that the accused were entitled to discharge, the Court ordered,

“Considering the above foregoing detailed discussion, all the three accused persons namely (i) M/s Hindalco Industries Limited; (ii) Sh. S.K. Tamotia S/o Late Sh. S.L. Tamotia; and (iii) Sh. P.R.S. Mani S/o Late Sh. S. Raman (accused nos.1 to 3 respectively) are entitled to be discharged for all the offences for which they have been charge-sheeted. Accordingly, they all are ordered to be discharged.”