Mahuagarhi coal case: Ex-Coal Ministry officials acquitted; Jas Infra, Director Jayaswal convicted

A Special CBI Court in New Delhi has acquitted three former senior officials of the Ministry of Coal in the Mahuagarhi coal block allocation case, while convicting Jas Infrastructure Capital Pvt Ltd (JICPL) and its director Manoj Kumar Jayaswal for conspiracy and cheating in connection with the fraudulent allocation of the Jharkhand-based coal block [Central Bureau of Investigation Vs JAS Infrastructure].

In a judgment delivered on June 6, Special Judge Sanjay Bansal held that there was no material to establish that former public servants HC Gupta (then Secretary, Ministry of Coal), KS Kropha (then Joint Secretary) and KC Samria (then Director, CA-I) acted with any dishonest intent or pecuniary motive in the decision-making process that led to the joint allocation of the Mahuagarhi block to JICPL and CESC Limited in 2008.

The case stems from the 2006-2007 coal block allocation process when the Ministry of Coal invited applications for 38 coal blocks, including 15 for the power sector.

JICPL applied for the Mahuagarhi coal block in Jharkhand for a proposed 1,215 MW power plant through a complex web of corporate arrangements and inflated financial claims. The allocation process involved multiple stakeholders including the Ministry of Power, various State governments, and the 35th Screening Committee, which ultimately recommended the joint allocation to JICPL and CESC Limited in January 2008.

The case originated from a reference made by the Central Vigilance Commission to the Central Bureau of Investigation (CBI), which initiated a preliminary enquiry into this coal block allocation process. After finding sufficient reasons to investigate further, the CBI registered a regular case against JICPL and its directors for offences of cheating, criminal conspiracy, and corruption under the Indian Penal Code (IPC) and Prevention of Corruption Act.

However, after completing its investigation, the CBI recommended closure of the case through reports filed in April and October 2014. The agency concluded that no offence was found to have been committed by any of the accused persons or public servants involved in the coal block allocation process, stating that while some incriminating evidence existed, it was not sufficient to warrant prosecution. The CBI's position was that dishonest intention could not be established against the accused parties.

The predecessor judge disagreed with the CBI's closure recommendation and rejected it through a detailed order in November 2014.

The Court observed that the private parties appeared to have committed cheating by obtaining allocation of the coal block based on false representations and found evidence of active connivance between them and public servants.

The Court identified preliminary evidence of cheating by private parties, criminal conspiracy and criminal misconduct by public servants under anti-corruption laws and concluded that the case warranted prosecution despite the CBI's reluctance to proceed.

Following the Court's intervention, proceedings moved forward with the Court addressing sanction requirements under anti-corruption laws for prosecuting public servants,

It took cognizance of offences and framed charges in December 2016. The trial that followed concluded with the current judgment in June 2025

The judgment detailed how JICPL systematically misled authorities to secure the Mahuagarhi coal block allocation through multiple false claims. The company, with an actual net worth of merely ₹1 lakh, inflated its financial profile by wrongfully including the net worth of IL&FS (Infrastructure Leasing & Financial Services) worth ₹812.03 crores and Inertia Iron & Steel Industries Private Limited worth ₹206.48 crores.

The Court found JICPL falsely claimed to be a Special Purpose Vehicle managed by these entities when no such legal arrangement existed.

Most significantly, while the company applied for the coal block for an end-use power plant in West Bengal's Burdwan district, it made presentations for a project in Bihar's Bhagalpur district for which no separate application had been filed.

The Court also noted JICPL's deliberate concealment of previous coal block allocations to associated companies in the Abhijeet Group. It found that four coal blocks - Brinda, Sisai, Meral, and Chitarpur - had been previously allocated to group companies with poor development records, providing clear motive for the deception.

It also identified false claims regarding project appraisal and debt syndication, noting that no proper appraisal report existed despite claims of IL&FS appraisal, and the claimed syndication of ₹4,445 crores was premature since even the detailed project report was incomplete at the time of application.

However, the Court found insufficient evidence to establish criminal misconduct or conspiracy between the officials and private parties.

The court noted that the three accused officials - HC Gupta (former Secretary, Ministry of Coal), KS Kropha (former Joint Secretary), and KC Samria (former Director, CA-I Section) - had acted within established procedures and that any lapses were administrative rather than criminal in nature.

The judgment emphasized that the coal block allocation was ultimately a collective decision by the 35th Screening Committee, with all members signing the recommendation sheets, making it inappropriate to single out individual officials for criminal liability.

"In view of the above discussion, A-1 M/s Jas Infrastructure & Capital Pvt. Ltd. (now known as M/s Jas Infrastructure & Power Ltd.) and A-2 Manoj Kumar Jayaswal are held guilty and both are convicted for the offence punishable u/s 420 IPC [cheating and dishonestly inducing delivery of property] and also u/s 120-B/420 IPC [criminal conspiracy to commit cheating]," the judge held.

However, on the officials, the court held "HC Gupta, KS Kropha and KC Samria are hereby acquitted of all the charged."

On the private parties' systematic deception, Judge Bansal found:

"Both A-1 and A-2 are thus held responsible for making misrepresentations about net worth and promoters which also involves location of EUP, about appraisal and syndication and also about previous allocations; and dishonestly or fraudulently inducing the Screening Committee, MoC and Govt. of India to allocate Mahuagarhi Coal Block to A-1 company."

The court definitively established the prosecution's case against JICPL and Manoj Kumar Jayaswal.

"Prosecution has proved the charge u/s 420 IPC against A-1 and A-2," it concluded.

On the conspiracy charge, the court concluded that both were in conspiracy to cheat Government of India."

Senior Advocate RS Cheema appeared as Special Public Prosecutor for the CBI along with Senior Public Prosecutor VK Pathak, DLA AP Singh and DLA NP Srivastava along with advocate Akshay Nagarajan.

Advocate Umang Katariya appeared for Kannan Tiruvengadam, Liquidator of JICPL.

Advocates Mudit Jain, Kanishka Bhati, Garima Singh and Khonish appeared for accused Manoj Kumar Jayaswal.

Advocate Mathew M Philip appeared for HC Gupta, KS Kropha and KC Samria.

[Read Judgment]