Former Coal Secretary HC Gupta intentionally misled the then Prime Minister Manmohan Singh who was also the coal minister, a sessions court has found.

"Dishonest representation made by the accused persons before the Screening Committee continued even before Prime Minister as Minister of Coal when he approved the recommendation of Screening Committee," Additional Sessions Judge (ASJ) Bharat Parashar said in his 350-paged judgment. "The Screening Committee was admittedly constituted to deal with all applications received for allotment of various coal blocks and to make its recommendation thereafter.

The Prime Minister as minister of coal was thus to act upon the said recommendation only. Accordingly the dishonest misrepresentation made before the Screening Committee continued even before the Prime Minister as minister of coal when he approved the recommendations of the Screening Committee," the order read.

A sessions court here on Friday found the company Kamal Sponge Steel and Power Limited (KSSPL) and four others guilty of cheating and conspiracy in the coal scam case. The case, which was heard at the Patiala House Court, is the third conviction in the coal scam.

Among those found guilty, former coal secretary HC Gupta and KS Kropha are the first among the public servants to be convicted.

"All the five accused persons ie accused company M/s KSSPL, Pawan Kumar Ahluwalia, HC. Gupta, KS Kropha and director KC Samria stand convicted for the offences u/s 120B IPC r/w section 420 IPC and section 13 (1)(d) (ii)/13(1)(d)(iii) of Prevention of Corruption Act, 1988," Parashar said. "Accused Amit Goyal is, however, acquitted of all charges," he added.

In the order, the judge also found "the accused Ministry of Coal (MOC) officers seems to have worked in the most casual and arbitrary manner despite the fact that they were senior officers of the rank of Secretary, Government of India, Joint Secretary and Deputy Secretary and were dealing with the allocation of important Nationalised natural resources of the country ie coal. The fact that the then Prime Minister of the country Dr Manmohan Singh thought it appropriate to retain the charge of Ministry of Coal with himself only, clearly shows as to how important the work of said Ministry was."

Arguments on quantum of sentencing took place on Friday itself. Accordingly, the order for sentencing will be pronounced on Monday.

Gupta was charged under sections 120-B r/w Section 409/420 of the Indian Penal Code (IPC) and Section 13(1)(c)/13(1)(d) of the Prevention of Corruption Act, 1988. In October 2014, the court had summoned Gupta as an accused dismissing the closure report filed by CBI.

During the arguments for framing of charges, Gupta had stated that the "final approval" on the allocation of the Rudrapur coal block in Madhya Pradhesh to KSSPL was taken by former Prime Minister and then Coal Minister Manmohan Singh. However, the CBI had refuted his claim stating that Singh was "kept in the dark," and the then Coal Secretary had misled the senior officials in the Prime Minister's Office (PMO).

In March 2014, a draft report released by the Comptroller and Auditor General (CAG) stated that the government exchequer lost Rs 1.86 crore because it chose to allot the coal blocks to private entities and Public Sector Units (PSU) instead of auctioning it during the years 2004-2009. However in 2012, following a complaint lodged by Bharatiya Janata Part (BJP) – the opposition party at the time, the Central Bureau of Investigation (CBI) initiated an inquiry to probe allegations of corruption. Consequently, a First Information Report report was filed by the probe agency that accused almost a dozen firms overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocations.