P C Parakh's arbitrary action caused loss to PSU: Court

NEW DELHI: Former Coal Secretary P C Parakh's acts of "omission and commission" prima facie raised a grave shadow of doubt about his conduct in the entire process of allocation of Talabira II and III coal blocks which resulted in causing loss to a PSU, a Special court observed today.

The court said his "arbitrary action" to accommodate HINDALCO in Talabira II and III coal blocks allocation resulted in negating proposal of state-owned PSU Neyveli Lignite Corporation Ltd (NLC) to set up a power plant in Odisha.

"His (Parakh's) apparent arbitrary action to accommodate M/s HINDALCO in Talabira II and III coal block resulted in negating the proposal of NLC to establish a 2000 MW power plant in Odisha and thereby causing loss to a PSU and windfall profit to a private company," Special CBI Judge Bharat Parashar said.

"Thus these acts of omission and commission prima-facie raises grave shadows of doubts about his conduct in the entire process," the judge observed and also added that he remained silent on the issue of excess coal allocation to HINDALCO.

The court also observed if Parakh's September 12, 2005 note, proposing HINDALCO's accommodation in the coal block allocation is read, it "prima facie gives an impression that all efforts were being made to accommodate the claim of HINDALCO".

"However, not only wrong facts were mentioned in the note regarding formation of a joint venture company between NLC and MCL (Mahanadi Coalfields Ltd) for setting up the power plant but the note was also silent as to whether any consent of either NLC or of MCL qua the proposals being now propounded by him was obtained or not," it noted.

"It is beyond comprehension as to how Secretary Coal can take any action on their behalf even if MOC (Ministry of Coal) was having some administrative control over them," the court added.