The Opposition is demanding Prime Minister Manmohan Singh's resignation after Additional Solicitor General Harin P Raval wrote a letter to Attorney General GE Vahanvati accusing him of interfering with the CBI's case in the coal scam
The Supreme Court said that the suppression by the Central Bureau of Investigation (CBI) that it shared the coal scam status report with the law minister is not ordinary. The court came down heavily on the CBI and has told the agency not to take any instructions from its political masters.
The court questioned as to why it was kept in the dark about sharing of information with government officials in the coal scam. The Supreme Court has also said, “The CBI's independent position must be restored. Our first exercise will be to liberate CBI from political interference.”
The apex court has said that the details in the CBI affidavit on the coal scam are “very disturbing”. “There has been a massive breach of trust that has shaken our foundation,” the apex court said. The court said sharing information with the government has shaken the entire process.
Media reports indicate that changes were made in the status report on the coal scam after a meeting with law minister Ashwani Kumar. CBI sources said they will not hide anything from the Supreme Court, which was hearing the case and will decide whether the government tried to influence the CBI probe.
The political fall-out of the Supreme Court criticism of the law minister and CBI is severe. The Opposition is demanding prime minister Manmohan Singh's resignation after Additional Solicitor General Harin P Raval wrote a letter to Attorney General GE Vahanvati accusing him of interfering with the CBI's case in the scam.
The counsel of the Sahara Group said there was no case of wilful disobedience of the apex court order as the documents have been supplied to SEBI and on 5 December 2012, the issue of depositing money was also considered by the court
The Sahara group and its promoter Subrata Roy Monday told the Supreme Court that no case of contempt is made out against them as they have complied with its directions on the issue of supplying documents to SEBI and has started refunding Rs24,000 crore to its investors.
The Sahara group mentioned this before a bench headed by Justice KS Radhakrishnan and said they have filed affidavits relating to the contempt notice and need more time to file a response in relation to the application by the stock market regulator seeking civil arrest or detention of Roy and other directors.
The bench said it will consider its plea on 2nd May.
Sahara's plea was mentioned by senior advocate Ram Jethmalani and advocate Keshav Mohan.
Sahara and its promoters filed around 10 affidavits and two additional affidavits are likely to be filed soon.
The counsel said there was no case of wilful disobedience of the apex court order as the documents have been supplied to the Securities and Exchange Board of India (SEBI) and on 5 December 2012, the issue of depositing money was also considered by the court.
During the last hearing, the apex court had pulled up the Sahara Group and Roy for not refunding Rs24,000 crore to their investors and accused them of “manipulating courts” by approaching different forums for relief.
The court had also slammed the group and its chief for not filing a response on SEBI’s contempt plea against them. It had also issued a notice to them on the market regulator’s plea to detain Roy and the two male directors—Ashok Roy Choudhary and Ravi Shankar Dubey—to get investors” money back from them.
The bench, which at one time had asked Roy’s counsel to make a statement that he will not leave the country or it will pass directions, however refrained from doing so and granted one week’s time to him and his two companies to file their response.
The bench had also expressed its anguish when SEBI said Sahara India has filed a petition in the Allahabad High Court after the apex court had passed the order for attaching the properties of the group's two companies if they failed to deposit Rs24,000 with the market regulator.
SEBI had contended Roy was very much part of the order passed by the apex court which had also indicted Sahara India in its order on 31 August 2012.
It had submitted that the Sahara Group and its two companies—Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)—have not followed the provision of Companies Act and details of investors given by them is vague.
The bench had then said SEBI was open to deposit money of untraced investors of Sahara with the Centre and that its 31st August order was clear that it was not for the market regulator to verify the addresses of untraced investors.
“If they (Sahara) don’t give the documents relating to investors, then you (SEBI) can keep the money which will go to the government. They will have to give you genuine information. You don’t have to search for documents,” the bench had told SEBI.
SEBI had also urged the court to allow it to “take measures for arrest and detention in civil prison of Subrata Roy, Ashok Roy Choudhary and Ravi Shankar Dubey after giving reasonable opportunity of hearing.”
The Sahara Group and SEBI are locked in legal dispute over the refunding of Rs24,000 crore by its two companies—SIREC and SHIC—to over three crore investors.
Earlier, the Supreme Court had dismissed its plea for more time to refund the amount.
SIREC and SHIC along Roy are facing contempt proceedings in the apex court which had on February 6 allowed SEBI to freeze accounts and seize properties of its two companies for defying court orders by not refunding the money to investors.
The recent Supreme Court ruling on the mining industry has far reaching repercussions. Exports of iron ore have stopped and we have lost a foothold in the world market. Our own industry would now need time to revive. Could we have adopted any other way to stop the illegal activities but maintain the tempo of exports and overcome the current impasse?
It all began with the findings of the Lokayukta report on the state of affairs of the mining industry in Bellary, in particular, and Karnataka, in general, resulting in the debarring of iron ore exports and the illegalities associated with it.
The Supreme Court had appointed the Central Empowered Committee (CEC) to investigate the matter. After a detailed study, the recommendations were submitted to the Supreme Court, as a sequel to which, 49 mining leases were cancelled in Karnataka. Mines on the border of Andhra-Karnataka have also been debarred from carrying out any mining operations until clear land-border demarcation has taken place. No time-frame has been fixed for this demarcation to take place.
The CEC had classified the mines into three categories; those with no illegalities were grouped as ‘A’ while those with maximum illegalities were put in category ‘C’. The apex court had observed that sales made by these ‘C’ category mines should be forfeited to the state. The court has lifted the embargo on the issue of granting fresh (or new) mining leases.
In the case of mines classified as ‘B’, they have been directed to compensate the exchequer for the losses caused by them. Full details are to be studied further.
Prima facie, the 45 mines in ‘A’ category and the 70 in ‘B’ category would now be able to re-start their operations. However, as these mines were closed down in 2011, it is not an easy task to revive the operations overnight. The logistics are daunting; experienced labour may have possibly moved to other areas; all the unused, rusted and abandoned equipment will have to be completely checked, possibly overhauled and maintenance repairs carried out before they can be put into operational use. The industry has shown relief that at least now 115 mines can plan their revival programmes.
It will therefore, take some time and great efforts to start and increase the production to 20 million tonnes (MT) to 21 MT, a reachable target, once all other things are in place. But this may be possible over a span of 16 to 18 months at the earliest, if the owners are able to put their heart and soul into the mines.
China, the main importer, in the meantime, has also located other sources of supply and the steel industry, on the whole, did not have a great year or two to report! Now, when India wants to revive its Chinese connection, it is most likely that they may demand their pound of flesh!
In such a scenario, it is most likely that the iron ore produced would find its way to meet the demand of the indigenous producers themselves and would help the industry. The international prices are lower today than they were two years ago and so the recovery factor is too early to predict.
On top of these, various clearances and approvals that are part of the relicensing procedure for mining to recommence production will have to be complied with. It is anybody's guess if it can be achieved in a short span of time and if so, at what cost?
And this is probably the first time such a major event has taken place in our mining history.
Just a thought—would it have helped if instead of simply banning the exports in totality, allowing the shipments to take place without hindrance, carrying on the investigations, but realise the payment and keep it in an escrow account with the government, till the matter was resolved?
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)