THEBUSINESSBYTES BUREAU

NEW DELHI, JUNE 3, 2026

In a significant legal victory for Hindalco Industries Ltd, a Delhi court has discharged the company and two of its former senior executives from a long-running case related to the alleged misuse of coal from Odisha’s Talabira-I coal block, bringing a major chapter of the coal allocation controversy to a close.

Special Judge Dheeraj Mor ruled that the Central Bureau of Investigation (CBI) had failed to establish any illegal act on the part of Hindalco Industries Ltd or its former executives, S.K. Tamotia and P.R.S. Mani. The court observed that there was no material on record to support allegations of criminal conspiracy, criminal breach of trust or cheating against the company or the accused officials.

"In the absence thereof, there is neither any evidence on record nor any justifiable reason to infer that they entered into a criminal conspiracy to commit any illegal act, including the offence of criminal breach of trust or cheating. Therefore, they are entitled to be discharged for the said offence," the judge said in an order dated May 30.

The case originated from a 2015 FIR concerning the allocation of the Talabira-I coal block to Hindalco in 1994. Investigators had alleged that coal extracted from the block was diverted for use at the company’s Hirakud power plant instead of being exclusively utilised for a proposed expansion project, as purportedly indicated in the initial allocation letter.

However, the court found that the contested stipulation regarding exclusive coal usage did not form part of the mining lease deed executed in 2003. It held that the allocation letter merely reflected the government’s intent and could not be treated as a binding contract conferring vested rights or creating an entrustment relationship.

Rejecting the CBI’s theory of criminal breach of trust, the court clarified that the legal relationship between the government and Hindalco crystallised only after the execution of the mining lease in June 2003.

"Accordingly, when the allottee (Hindalco) had not acquired any vested right to extract or utilise coal prior to execution of the mining lease, it would be difficult to hold that a mere pre-lease allocation letter constituted 'entrustment of property' or 'dominion over the property' to attract the ingredients of criminal breach of trust," the court said.

The judge further noted that there was no allegation that Hindalco had violated any condition contained in the mining lease deed itself.

The court also dismissed allegations that the company had secured regulatory approvals through misleading communications with the Ministry of Coal. The CBI had alleged that a 2006 communication from P.R.S. Mani falsely stated that mining operations had commenced after obtaining all statutory clearances and that another response regarding coal linkage status had influenced approval of a revised mining plan.

After examining the evidence, the court concluded that there was no proof that any alleged misrepresentation induced government authorities to take decisions they would otherwise not have taken.

"There is no evidence on record to demonstrate that the alleged misrepresentation induced anyone, including officials of the Ministry of Coal, Government of India, or any other public authority, to part with the property or undertake any act which it would otherwise not have undertaken. Consequently, no criminality whatsoever can be attached thereto," the court observed.

Addressing the revised mining plan approval, the court said the record did not indicate that approval would have been denied solely because of changes in coal linkage arrangements, especially when policymakers were already dealing with a broader coal shortage situation.

"Consequently, by no stretch of reasonable imagination, the approval of the revised mining plan in the year 2006 can be held to have been procured through deception or inducement based upon the alleged misrepresentation...," the court said.

The ruling effectively dismantles the prosecution’s case and represents a major legal reprieve for Hindalco, one of India’s largest metals companies. The judgment reinforces the distinction between policy decisions and criminal liability, underscoring that business and regulatory decisions cannot be retrospectively criminalised in the absence of evidence demonstrating dishonest intent or unlawful conduct.