india

Updated: Oct 01, 2019 12:25 IST

In the first ever dismissal of the Enforcement Directorate’s proceedings against a private company in the coal block allocation case, a Prevention of Money Laundering Act (PMLA) appellate tribunal has released the assets of Jharkhand Ispat Pvt Ltd (JIPL) and its promoters RC Rungta and RS Rungta stating that the company never received any benefits from the allocation of the coal block, which meant there was no question of it generating “proceeds of crime”.

The tribunal, through its order on September 6, released properties worth over Rs 19 crore belonging to the Rungtas in Jharkhand, which were attached by ED in September 2016 after it alleged that the company received SAM (share application money) from various individuals/companies amounting to Rs 25 crore from 2004-05 to 2008-09 on account of the coal block allocation.

The coal ministry had jointly allocated North Dhadu coal block in Jharkhand to JIPL alongwith other companies for captive mining of coal for its sponge iron plant at Hazaribagh.

The coal block allocation fraud rocked the UPA government following which CBI and ED registered multiple cases against different private companies, officials of the ministry of coal, and state government employees.

Justice Manmohan Singh (retired), chairman of PMLA appellate tribunal, stated in his order on September 6: “The transactions pertaining to receipt of SAM from various other companies are duly documented, above-board and legal transactions”.

“There is no conduct, act or omission on the part of JIPL that has been shown which would lead the ED to believe that the alleged proceeds of crime are likely to be concealed, transferred or dealt with any manner which may result in frustrating any proceedings under Chapter 2 of PMLA,” he added.

Singh noted that JIPL has been a running concern (entity) since 2003 and has paid taxes amounting to Rs 231 crore from 2003-04 up to December 2016.

The tribunal continued : “...no investor has protested or has filed the civil suit for recovery of investment amount after cancelling the block by the Supreme Court. Even no contrary evidence is available on record to show that the investment money was/is the tainted money.”

The Rungtas’ counsel Arshdeep Singh,declined comment. An ED spokesperson didn’t respond to queries.