No criminality: Delhi court closes coal scam case against Aditya Birla Group's Hindalco

A Delhi court recently closed a decade-old coal block allocation case registered by the Central Bureau of Investigation (CBI) against Hindalco, an aluminium and copper manufacturing company of the Aditya Birla Group.

Special Judge (PC Act) Dheeraj Mor of the Rouse Avenue Courts also closed the case against the company’s former President and Chief Executive Officer (CEO) SK Tamotia and General Manager (Corporate Affairs) PRS Mani. 

The Court ruled that the CBI failed to establish any of the act committed by the accused as illegal and that the central agency could not establish a prima facie case of criminal breach of trust, cheating or criminal conspiracy. 

“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 offence,” the Court said in its May 30 order.

The case centred on allegations that Hindalco had violated conditions attached to the 1994 allocation of the Talabira-I coal block in Odisha by using coal from the mine in its existing 67.5 MW captive power plant at Hirakud rather than only in proposed power projects. 

It was alleged that during the years 2004-05 to 2010-11, the company extracted 4.80 million tonnes more than its estimate coal reserves of approximately 15 million tonnes thereby, deriving undue gain in the said process. 

The CBI also alleged that company officials made misleading representations to the Ministry of Coal while seeking approval for a revised mining plan.

However, the Court found that the disputed restriction - on using the coal block only for the proposed plants and not the existing one - contained in the original allocation letter was not incorporated into the mining lease executed between the Odisha government and the company in 2003. It held that the mining lease, rather than the allocation letter, governed the legal rights and obligations relating to the coal block.

Judge Dheeraj Mor added that “by no stretch of reasonable imagination” can it be said that any alleged misrepresentation by Hindalco officials induced government authorities to approve actions they would otherwise have rejected.

“The allegations in this regard are also devoid of merit and deserves rejection,” the Court said. 

Therefore, it discharged all three accused persons. 

[Read Judgement]