Why CBI FIR Naming K.M. Birla, P.C. Parakh & P.M.O. Raising Debate The Way It Is?

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The ‘Coalgate’ fire raising for quite some time, seems to have now spread into a VIP area and seems headed to engulf, among others, some truly big guns. The one representing big industrial house of Birlas – KM Birla, the other a former top civil servant, P C Parakh, ex-Coal Secretary and last but not the least, none other than the PMO (by implication the Prime Minister, Manmohan Singh) find themselves in the midst of this fire none had even imagined, and the least as far as the threesome were concerned.

CBI, in a way, seems to be setting itself free – or perhaps giving an impression of doing so – from the status of a ‘caged parrot’, a tag earlier given to it by the Supreme Court. It now also seems to be singing a tune that’s distinctly different from the one earlier played under the direction of ‘his master’s voice’. Suddenly the Central Bureau of Investigation seems to have sort of metamorphosed itself and bringing in, in its wake, the kind of interest and curiosity in the Coalgate scam cases not witnessed earlier. Much of the credit for this, however, should go to the Apex Court for the way it has put its foot down and stamped its authority while monitoring the Coalgate cases.

Talking about the latest CBI FIR involving KM Birla, P C Parakh and the PMO, one thing seems pretty certain that the central investigating agency must have checked and re-checked a thousand times the documentary evidences in its possession before ‘venturing’ to name them, among others. It seems inconceivable otherwise that ahead of throwing its net around the personalities as big as the ones here, the CBI might have lapsed in its concentration and in application of its mind.

Big personalities as the threesome are, they otherwise are also well aware that they are faced with one of the most serious challenges at their very own personal levels given the way the laws of the land, mutatis mutandis, seem to be closing on them. Notwithstanding India Inc as also the political class coming out in full support of KM Birla; the ruling Congress party throwing its weight and support behind Prime Minister Manmohan Singh and the top level bureaucracy attempting to protect its own citadel in the process of defending Parakh, the CBI seems to be sticking on to its own initial finding, at least up till now. Any knowledgeable and discerning observer looking at the way this case has shaped, may not perhaps be agreeable to brush aside the CBI FIR as the one purely bordering on adventurism.

PC Parakh, in his defence, admits that if he, as the then Coal Secretary, is held accountable in this case, then, the then Coal Minister (i.e. Prime Minister who held Coal portfolio as well) is equally accountable. Parakh’s contention seems administratively correct for his proposal to overturn the Coal Ministry’s “Screening Committee” recommendation to accommodate KM Birla’s HINDALCO was approved by the Coal Minister.

KM Birla says he has done nothing wrong while renewing his request for allotment of Talabira II coal block under Mahanadi Coal Limited (MCL) in Odisha for his company HINDALCO and getting it. Originally his company had applied for this particular coal block which wasn’t agreed to and allotted by the Ministry’s Screening Committee and instead, the same was allotted jointly to NLC (Neyveli Lignite Company) in Tamil Nadu and MCL – both central PSUs. On Birla’s renewed request, the same was however, accepted and allotted in his company’s favour. He, in no way, therefore, can be charged with any criminal conspiracy in this case.

PMO, in its turn, has sought to explain its position on behalf of the Prime Minister who as the then Coal Minister had approved the proposal submitted by his Ministry. In addition, the PMO also says that while having a re-look at the request of KM Birla the fact that the then Odisha Chief Minister (Navin Patnaik) under whose jurisdiction the said coal block falls, too had recommended in August 2005 in favour of HINDALCO as a top priority. PMO had asked the Coal Ministry to re-examine the matter in the light of CM’s letter. The Prime Minister had finally endorsed the Coal Ministry’s proposal to overturn the Screening Committee recommendation to accommodate KM Birla’s HINDALCO. This was also necessarily keeping in mind India’s federal democratic polity to conform to – the PMO thus also seems to be suggesting this aspect as an important factor while reviewing an earlier decision, in its report given to the CBI.

Coal Mine in IndiaHowever, in order to make an appraisal and appreciation of the whole issue at this stage, the role of the Coal Ministry Screening Committee needs to be elaborated and dealt with at some length. It was in 1992-93 when in the wake of India’s economic reforms measures taking off, the Coal Ministry had conceived of an idea to open up and allocate some of the coal mines to private players also. This was felt so for the reason that Coal India Limited (CIL) and its subsidiary coal companies in various states were then not able to keep pace with the demands for the power grade coal for the coal fired thermal power stations. Additionally, the need for captive thermal power plants that the private companies intended to set up for captive use, was also taken into account.

Under the Coal Mines (Nationalisation) Act, 1973, coal mining was mostly reserved for the public sector. This Act was amended in June 1993 to allow coal mining for captive consumption for generation of power, washing of coal obtained from mines and other end uses to be notified by the government from time to time, in addition to existing provision of captive coal mining for production of iron and steel. This paved the way for private players to enter the coal mining.

Around this time (1992-96), I was posted as Director in the Coal Ministry and happened to have witnessed the launching of the “Screening Committee” for processing of all such applications received from the private companies and other PSUs and make recommendations in each case.

The first ever such Screening Committee had Additional Secretary (Mr B N Makhija, IAS) as its Chairman, and Advisor (Coal Projects) (Mr R K Sachdeo, a Mining Engineer) and a Joint Secretary – as members – all 3 from the Coal Ministry. Other members were drawn from Ministries of Power, Steel, Railways, Environment & Forests and from concerned State Governments apart from Director (Technical) of CIL, Kolkata, CMD, CMPDIL, Ranchi and CMDs of concerned subsidiaries of CIL.

I, as Director in Coal Ministry, assigned to handle the subject of appraisal of coal projects, was there to assist the Screening Committee. If my memory serves me right, this Committee was sort of an empowered committee whose recommendations were to be implemented after the same were duly approved by the competent authority, that is, the Coal Minister. In the event of any query or clarifications or need for any review arising ahead of the final decisions, the same needed to be referred back to this Committee.

In the instant case of Talabira II under MCL in Odisha, the Screening Committee had recommended for its allotment jointly in favour of MCL and NLC – both central PSUs. HINDALCO, the other applicant for this coal block, was not recommended. KM Birla in May, 2005 approached the Prime Minister (who also held Coal portfolio) and impressed upon him the need for this coal block in favour of HINDALCO. In August 2005, Prime Minister received a letter from Chief Minister of Odisha strongly backing the allotment of Talabira II to HINDALCO on ‘top most priority’. The PMO asked the Coal Ministry to re-examine the matter in the light of this letter. On perusing the noting of Coal Secretary, PC Parakh, the Prime Minister finally in October, 2005 endorsed the proposal to overturn the Screening Committee recommendation to accommodate KM Birla’s HINDALCO.

The CBI in the process of its investigation of the Coalgate scam, seems to have picked on in the instant case the procedural lapses whereby the role of the Coal Ministry’s Screening Committee – a body technically competent and empowered to take decisions in the matter – was usurped. This Committee was sort of by-passed by the Coal Secretary as also by the ‘competent authority’, the Coal Minister while reviewing and eventually overturning Committee’s original recommendations. CBI seems to have further construed this as collusive criminal intent and criminal conspiracy and an act of corruption on the part of the three individuals named in the FIR. What CBI seems to be suggesting that ahead of taking a final decision in the instant case, going by the Coal Ministry’s Guidelines on this, the Screening Committee should have necessarily been involved, yet again. This was not done. Instead, circumventing the procedure and rule prescribed in this regard, Screening Committee’s decision was conveniently ignored to extend an undue favour to a private company – that’s how the CBI seems to be viewing the whole issue. PMO, on its part, however, seems to be maintaining this action to be ‘entirely appropriate’ decision having no traces of any criminal conspiracy and corruption whatsoever.

As things stand today, the whole matter seems to be very delicately poised. This being a Supreme Court monitored case, the CBI has submitted to the court this Tuesday, 22nd Oct, 2013, the latest status report concerning the whole lot of Coalgate cases, including the one discussed here. CBI is also reported to have asked the PMO to submit the files relating to allotment of coal blocks to HINDALCO.

Supreme Court is likely to hear further the Coalgate cases on 29th October, 2013. We may keep our fingers crossed till then.

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Narendra Bhagat

Written by

A retired I.A.S. officer, Mr. Narendra Bhagat spends part of his time to blog and write for our magazine. He has authored two books.


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8 comments / Add your comment below

  1. The way Delhiites have voted shows that they have shaken off the ‘status quoism’ and have shown their preference for ‘vibrant democracy’….it’s a good sign ….however, as it is, hung Assembly is not the one they had bargained for….should , therefore , a re-election alongside 2014 Lok Sabha elections get linked up, the onus would be on the voting class to express its intent more firmly than the one it has been this time round….

  2. Hemen Parekh says:

    World is Watching !

    It is not only India

    Entire world is watching what has happened – and continues to happen – in Delhi

    Oppressed people of Tunisia , Libya , Iraq , Egypt , Yemen , and now Syria , took up arms and fought bloody battles to liberate themselves from the tyranny of dictators

    Of course , in no small measure , due to covert help from the Western world

    But India is the land of Gandhi ( – the ancient one , not the Dynasty ! )

    And peace-loving people of Delhi needed no outside help to throw out Congress and give a mandate to BJP and AAP

    But a fractured mandate that gives no party a clear majority !

    Apparently , people of Delhi failed to appreciate that a coalition government is a government that gets blackmailed by its coalition partners , whose sole aim is to make a ton of money !

    Exactly what has been happening at the Centre for the past 5 years , rendering UPA -2 , a Spineless Spectacle !

    Arvind Kejriwal realized this a long time back and over the past 6 months , repeatedly said ,

    ” We will neither support any party , nor seek support from anyone ”

    He is absolutely right when he refuses to form a minority-led government , under constant threats from corrupt partners

    What next ?

    Although President’s Rule is an immediate possibility , it is a pointless postponement of what is inevitable , viz :


    Let us get over it fast

    Let us face the harsh reality of parliamentary democratic process

    If people of Delhi want a stable / accountable / corruption-free government , then let them go to the polling booths ONCE AGAIN , and give AAP , at least 40 SEATS

    Let their message ring loud and clear , across the length and breadth of India , proclaiming :

    ” Brothers and Sisters,

    If you want to get rid of corruption , give AAP , an ABSOLUTE
    MAJORITY in 2014 National Elections


    If you hesitate , and split your vote , you will have only yourself to
    blame for your continued suffering ”

    * hemen parekh ( 10 Dec 2013 )

  3. Hemen Parekh says:

    Whose Bapu ?

    There was a time
    When you were our Bapu,
    A Mahatma ;

    For a life-time long
    A tortured Atma ;

    To wash away the sins of your children
    You died a martyr’s death ;

    Now those very children
    Have opened-up a shop
    To sell ” Gandhi-ism ” ;

    They are even maintaining
    Two separate books of accounts,
    One for income from ” Unknown Sources “,
    Strictly as required by the law !

    Even out of curiosity
    Do not venture
    Anywhere near ;

    No one will recognize you
    Without your NSG / Z+ bodyguards !

    And children from city slums
    Will chase you , shouting ,
    ” Ben Kingsley , Ben Kingsley “,

    And when they ask you for your autograph ,
    Do not sign,
    ” Mo Ka Gandhi ” !

    Just pretend that you are Ben Kingsley,
    TV cameras , Reporters , Anchors
    Will follow in your footsteps ;

    Just forget that
    You were our Bapu !

    Free translation from my Gujarati poem , dated 30, Jan 1984

    * hemen parekh ( 13 Nov 2013 )

  4. Hemen Parekh says:

    Ban Pre-poll Opinion Surveys ?

    Congress has asked Election Commission to ban pre-poll opinion surveys of voters

    Congress says , these are inaccurate , manipulated , misleading

    What it failed to say is ,

    ” We are frightened to death ! ”

    What Congress refuses to believe is that these surveys are confirming that the UPA has failed to come up to the expectations of people , who are , now looking for an alternative

    For UPA , this is a self-inflicted wound !

    – by refusing to ,

    * Accept CAG findings in umpteen scams

    * Asking concerned ministers to resign immediately

    * Offering the entire Government machinery for CBI inquiry

    Can you believe that this is the party which claims ” legacy ” of Lal Bahadur Shashtry , who resigned , within hours of a train accident when he was Railway Minister ?

    – by taking moral responsibility

    – without waiting to appoint an ” Inquiry Commission ” ( ala 1984 Delhi / 2002 Godhra riots ) , to submit its report within a few years , fixing the blame on faulty equipment / human error

    When Nehru died , Lal Bahadur was the first choice for the post of PM

    Without any Opinion Survey !

    When will Congress re-learn its lessons in forgotten art of ” morality ” ?

    * hemen parekh ( 04 Nov 2013 )

    1. See, Hemen…. Political parties these days often tend to come up with politically expedient statements to suit their own needs – the present stance/s on the issue on the part of Congress, SP, BSP,DMK n AIDMK and the one oppsite to it as taken by the BJP, therefore, hardly provide any surprises….However, in all fairness, all such pre-poll opinion surveys should necessarily spell out, beforehand, the the name/s of agency/ organisations conducting such surveys and the details of funding – source and quantum – relating thereto …It should be more transparent – a fact that’s sorely missing in such surveys …..

      1. Hemen Parekh says:

        Dear Narendra

        I entirely agree with you re the need to spell out ,

        > Population Universe
        > Sample size
        > Stratification
        > Confidence level ( 2 Sigma / 3 Sigma )
        > Geographical Spread ..etc



  5. Thanks, Hemen ….. None of the political parties these days ever thinking in terms of ‘Kamraj Plan’ it’s a closed option…. But for the Supreme Court intervening in a big way lately we’d have been in a situation far worse ….

  6. Hemen Parekh says:

    Kamraj Plan is now Scam-raj Plan !

    Some 50 years ago , Congress President , Kamraj Nadar realized that the ideals on which Congress was founded , were decaying. Congress had started rotting from within because of power-hungry politicians

    So he came up with “ Kamraj Plan “, under which , senior congress leaders were required to resign from their ministerial posts and devote themselves to re-vitalizing the party

    Six Union Ministers and six State Chief Ministers resigned

    50 years later , the current version of Kamraj Plan is “ Scam-raj Plan “ !

    Under this new “ Scam-raj Plan “ ,

     Ministers need not resign as long as they are involved in no more than one scam at a time

     Ministers may ignore any adverse comments made against them , either by CAG or by Supreme Court

     Ministers shall conveniently misplace / lose , scam related files

     Ministers may continue to chair GoM appointed to investigate irregularities of their own ministries

     Ministers shall have triple reporting relationships , viz :

    • Congress President

    • Congress Vice President

    • Prime Minister

    ( strictly in that order ! )

     Ministers shall not hesitate to appoint their near-and-dear relatives to sundry Government posts , as Chair-persons

     Ministers shall ensure that all Government contracts / orders above Rs 100 crores , are mandatorily given out to each other’s relatives , in a quid-pro-quo basis , without fear or favour !

    Then there are many other minor “ Dos and Don’ts “ which readers may wish to add , by way of comments / replies

    Who authored this “ Scam-raj “ plan ?

    That is a “ Scam Raaz “ ! Relevant file is missing !

    • hemen parekh ( 30 Oct 2013 )

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