Delhi High Court Suspends Sentence Of Company Executive In Coal Block Scam | Declines Suspension Of Conviction Citing Public Interest And Evidence Of Forgery
Sanchayita Lahkar
The High Court of Delhi Single Bench of Justice Amit Sharma, on 1st August 2025, partly allowed an application seeking suspension of the conviction and sentence passed against an appellant in connection with a coal block allocation case. The Court directed that while the judgment of conviction dated 09.12.2024 would not be stayed, the sentence awarded under the said conviction was suspended. The appellant was granted bail during the pendency of the appeal. The decision was rendered on an application filed under Section 430 read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking ad-interim stay of the conviction and sentence. The Court declined to stay the conviction, observing that the appellant failed to demonstrate that the case fell within the exceptional circumstances required for such relief. However, the Court found it appropriate to suspend the sentence in view of factors including the appellant’s age, lack of prior arrest, and cooperation with the investigation and trial.
The application was filed challenging the judgment of conviction dated 09.12.2024 and the order on sentence dated 11.12.2024 passed by the learned Special Judge (PC Act) (CBI), Coal Block Cases-01, RADC, New Delhi, in a case arising out of FIR No. RC 221 2016 E 002. The charges included offences under Section 120B read with Sections 420 and 471 of the Indian Penal Code, 1860.
The trial court convicted the appellant, along with his brother (Convict No.1) and the company M/s AIPL (Convict No.3), for conspiracy and cheating in the procurement of coal blocks. Specifically, the conviction pertained to misrepresentation before the 24th Screening Committee and the submission of forged documents for securing coal block allocations in Jharkhand. The appellant was sentenced to rigorous imprisonment for three years for each offence and fined a total of Rs. 20 lakhs, with a default sentence of four months simple imprisonment for each offence. All sentences were directed to run concurrently.
Before the High Court, the appellant’s senior counsel argued that the conviction was factually and legally unsustainable. It was submitted that the separation of the family business occurred in 2002, post which the appellant became part of the "Neco Group" while Convict No.1 managed AIPL independently. The appellant, it was argued, had no role in the affairs of AIPL at the relevant time in 2004.
Reference was made to the order on charge dated 03.06.2022, and the chargesheet, to state that the key allegations and the management of AIPL were attributed to Convict No.1. It was further submitted that the appellant was not a director or authorized signatory of AIPL at the relevant time and had ceased to hold any official position in the company in 2002.
Counsel contended that the prosecution failed to produce any witness or documentary evidence implicating the appellant in the forgery or misrepresentation. The only witness examined on the issue of Screening Committee meetings was PW-14, A.K. Srivastava. It was argued that PW-14 did not specifically name the appellant as the person who made representations before the Committee, and that it was Convict No.1 who had answered the queries.
It was also argued that the trial court had summoned and relied upon records from other coal scam cases which were not put to the appellant under Section 313 CrPC and not produced during the trial. This, it was submitted, violated principles of fair trial.
Further, it was contended that the conviction would lead to irreversible consequences under Section 196 of the Companies Act, 2013, which disqualifies a person from serving as Managing Director if convicted and sentenced for more than six months. The appellant is currently Managing Director of a listed company, JNIL, with over 9500 employees, significant public investment, and a crucial role in industrial development.
The respondent, represented by the CBI, opposed the application. It was submitted that disqualification under Section 196(3)(d) is mandatory and not dependent on whether the offence involves moral turpitude, unlike the earlier provision under the Companies Act, 1956. The CBI further submitted that the judicial discretion under Section 389(1) CrPC to stay a conviction should be used sparingly and only in exceptional circumstances.
The CBI referred to the Supreme Court’s decision in K.C. Sareen v. CBI and others to argue that stay of conviction should be rare and based on irreversible harm. It was also pointed out that the appellant is facing prosecution in another coal block case in his capacity as a key functionary of JNIL, which the appellant failed to disclose.
The CBI also cited decisions such as Manohar Lal Sharma v. Principal Secretary and Girish Kumar Suneja v. CBI to state the public interest implications of coal block allocation cases, arguing that such cases form a distinct and serious category involving large-scale corruption.
Justice Amit Sharma, after considering the submissions, stated in paragraph 21, "There is no gainsaying that in order to suspend the conviction of an individual, the primary factors that are to be looked into, would be the peculiar facts and circumstances of that specific case, where the failure to stay such a conviction would lead to injustice or irreversible consequences."
In examining whether such exceptional circumstances were made out, the Court noted in paragraph 31, "In view of the aforesaid, it cannot be stated, at this stage, that the judgment of conviction is prima facie unsustainable."
Addressing the impact of the conviction on the appellant’s role in JNIL, the Court quoted from the application in paragraph 23, "The Applicant’s ability to function in the corporate world would impact: a. Large workforce/employees... b. Equity Shareholders... c. Secured Lenders..." but also noted the appellant was facing another prosecution in a coal block case.
In paragraph 35, the Court recorded, "In the present case, it has come on record that the present appellant along with company, M/s JNIL, are also facing prosecution in the coal block matter. It has come on record that the present appellant is facing prosecution in his capacity as key personnel of the said company, M/s JNIL."
Further, in paragraph 34, the Court stated, "As rightly pointed out by the learned Senior Counsel appearing on behalf of the respondent/CBI, disqualification in Companies Act, 1956, would come into effect if the person concerned has at any time been convicted of an offence involving moral turpitude. However, the same has now been amended to the extent that, it will come into effect if the person has been convicted of an offence and sentenced for a period of more than six months irrespective of the nature of the offence."
The Court examined the evidence against the appellant and stated in paragraph 30, "The present appellant had, in his written statement under Section 313(5) of the CrPC, stated that he was briefed about the information submitted with Ministry of Steel (MoS) however, he has not stated anything in respect of the submissions attributed to him in the minutes of the Screening Committee."
On the legal test for granting relief, the Court reiterated from the Supreme Court judgement in Rama Narang that "while granting a stay of or suspension of the order of conviction the Court must examine the pros and cons and if it feels satisfied that a case is made out for grant of such an order, it may do so."
Ultimately, the Court found that the irreversible consequences pleaded did not meet the threshold of exceptional circumstances, especially given the pending prosecution in another case of similar nature.
The Court concluded, "In view of the aforesaid facts and circumstances of the present case, the present application so far as it seeks suspension of impugned judgment of conviction dated 09.12.2024 is dismissed."
However, the Court ordered, "The sentence of the appellant is suspended and he is directed to be released on bail on his furnishing personal bond in the sum of Rs.1,00,000/- along with one surety of the like amount to the satisfaction of the learned Trial Court/Link Court."
The Court imposed further conditions: "In case of any change of address, the applicant is directed to inform the same to this Court by way of an affidavit... The applicant shall not leave India without the prior permission of this Court... The applicant is directed to give all his mobile numbers to the Investigating Officer and keep them operational at all times... The applicant shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case."
"The present application is partly allowed and disposed of accordingly".
It was recorded, "Interim order dated 08.01.2025 is made absolute in the aforesaid terms."
"Needless to state that, nothing mentioned hereinabove, is an opinion on the merits of the present appeal or the case of co-convicts and any observations made herein are only for the purposes of the present application"
"Copy of the judgment be sent to the learned Trial Court as well as concerned Jail Superintendent for necessary information and compliance".
Advocates Representing the Parties:
For the Petitioners: Mr. Siddharth Aggarwal, Senior Advocate, Mr. Faraz Maqbool, Mr. Rahul Pandey, Ms. Sana Juneja, Ms. A. Sahitya Veena, Ms. Vismita Diwan, Ms. Arshiya Ghosh, Advocates
For the Respondents: Mr. R.S. Cheema, Senior Advocate, Ms. Tarannum Cheema, Mr. Akshay Nagarajan, Mr. Akash Singh, Mr. Sadeev Kang, Advocates
Case Title: Ramesh Kumar Jayaswal v. Central Bureau of Investigation
Neutral Citation: 2025: DHC:6327
Case Number: CRL.A. 14/2025
Bench: Justice Amit Sharma
