What’s in a name? - Rajib Maitra
This story too began innocently when sometime in August 2007, a written complaint was received by Vigilance Department of CIL from one Binod Agarwal, purportedly a businessman from Assam, alleging manipulation and corruption in coal linkage of Ms. S.K.J. Coke Limited (formerly Mahabir Coke Industries) from North Eastern Coalfields (NEC), Assam
Upon receipt, the complaint was forwarded by the Vigilance Department to the Marketing Division of CIL for examination and comments. Prima facie examination of the complaint raised doubts about the authenticity of the unit and Mr. S K. Ranganath, the then Director Marketing, recommended that coal supply to the unit be kept in abeyance till the entire matter was investigated. On the basis of this, Mr. N. C. Jha, the then Director (Technical) CIL and Director-in-Charge of NEC, advised Chief General Manager, NEC to take necessary action as recommended by Director (Marketing). No further action was taken by the Vigilance department on the clarifications submitted by Sales & Marketing department, till October 2008.
Documents available with Core Sector reveal that Coal India had agreed to supply low ash coal from NEC to Mahabir Coke Industries in September 1989, as a “deemed” linked consumer, at prices notified by the Government of India. The consumer was not issued any formal linkage by the non-core sector linkage committee. However, notifications of Liberalized Sales Scheme by Government of India empowered CIL to fix the price of coal in respect of non-linked consumers. Following this scheme, CIL determined the price of coal for Mahabir Coke Industries accordingly. Mahabir Coke Industries objected to such determination of price and filed a writ petition in 1997 against such action and obtained a stay order on charging higher prices by CIL during the pendency of the proceeding.
This interim order was vacated by CIL in September 2001 which declared the price charged by CIL as valid. After protracted litigation, in January 2009, High Court at Calcutta
As a fall out of the above order, CIL demanded Rs. 87.88 million as principal and Rs. 67.44 million as interest, totaling Rs. 135.32 million. The entire matter is still under litigation. It is learnt that Mahabir Coke Industries submitted Rs. 20 million only, as bank guaranteed till date.
The complaint file by Binod Agarwal gains credence, as against this back drop of having huge financial liability towards CIL, Mahabir Coke Industries, a small partnership unit, merged with SKJ Coke Limited, a much larger private limited company, which did not have any coal linkage. This merger was illegally vetted by one C. P. Sinha, the then Superintendent Engineer (CP) working in Sales & Marketing discipline, without any formal approval of CIL management. It is not very difficult to understand that this merger was a premeditated move on the part of the two units, perhaps aided by colluding officials of CIL and NEC, to avoid paying the dues of CIL on one hand, while extending benefit of coal linkage to the other at a time when issue of linkage was no longer valid. It is also a million dollar question which the vigilance department avoided addressing in their hurry to prove the complaint baseless, whether Mahabir Coke Industries actually changed its name to SKJ Coke Limited as stated by Hansraj Jain the managing partner of Mahabir Coke Industries in his affidavit dated 3 August 2005, or was it merged with SKJ Coke Limited, as per deed of merger dated 18 November 2004.
In both cases there are serious grey areas. The criteria of change of name and merger are clearly stated in Section 23 of the Companies Act, 1956. If it was a mere change of name, as stated by C. P. Sinha, Superintending Engineer (CP), CIL, in his letter dated 8 August 2005, how was it that S. K. J. Coke Limited existed as a separate entity much before the application for such change of name was made by Mahabir Coke Industries? Similarly, if it was a case of merger of Mahabir Coke Industries with S.K.J. Coke Limited, how was the transfer of so called ‘linkage’ allowed at all? Coal linkage, if at all given to Mahabir Coke Industries was given for the coal burning equipment and not the unit per se. In this case, the unit of Mahabir Coke Industries seems to have been dismantled totally and only the management of both the units merged.
A matter of serious concern and perhaps some sinister connotation as well, is that this complaint of Binod Agarwal on which the CIL Vigilance Department had remained silent for quite some time, was ultimately handed over to B. N. Mishra, the present Technical Secretary of CVO and some say an officer of substantial notoriety, for investigation. How the investigation was conducted by this top notch vigilance honcho is anybody’s guess. However, at the end of the day, B. N. Mishra through his letter no. CIL/VIG/ND-812/1169 dated December 24, 2008 issued his verdict that no merit was found in the complaint. He also ventured to add a line in his report without any apparent reason that the Vigilance Department had no role with regard to the decision on suspension / resumption of coal supply to the party. The entire matter happened with the approval of CVO, CIL.
The collusion of NEC officials in the matter becomes apparent when one considers the speed with which the matter of resumption of coal supply to the consumer was initiated. Mishra’s letter dated December 24, 2008 was officially received by NEC, Margherita on December 30, 2008. Yet a note-sheet for resumption of supplies was moved by Area Sales Manager on December 27, 2008 and the same was put up before the Director-in-Charge, NEC on December 30, 2008.
Apart from the illegality and shortcomings of the entire vigilance enquiry which made a factual and verifiable complaint look baseless, the entire process of resumption of linkage and execution of FSA with a consumer which manipulated its deemed linkage into an FSA is fraught with misdemeanor and indiscretion at all levels. It is a matter of record that the entire process of resumption was not even informed to the Sales & Marketing department of CIL.
It is a fact that the matter is now under investigation by Central Bureau of Investigation. It is also a fact that the initial RC filed by CBI, Anti-Corruption Wing, named both the CVO and his technical secretary as accused. However, it is also learnt that, the CVO using his bureaucratic connections in the CVC had his name as well as that of Mishra’s dropped from the RC and the case was transferred from the Anti Corruption Wing to the less effective Economic Offence Wing.
Core Sector is confounded as to why appropriate agencies of the Government of India have allowed manipulations to get the better of corruption at highest level when the entire country is looking forward to the Lokpal Bill. Is the CVC or the Director, CBI listening?
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