S Kumars loses defamation appeal against Narmada activists

Narmada Bachao Andolan cites cheating and fraud cases registered by police in support of its press statement against S Kumars and state financial institutions

 
By Anupam Chakravartty
Last Updated: Saturday 04 July 2015

The Bombay High Court has dismissed an appeal seeking to restrain activists of the Narmada Bachao Andolan from making defamatory statements against the developer of the Maheshwar hydroelectric project on the river Narmada. The appeal was filed by Shree Maheshwar Hydel Power Corp Ltd (SMHPC), a sister concern of textile company S Kumars, which is constructing the Maheshwar dam in Madhya Pradesh's Khargone district.


NBA said former officials from Madhya Pradesh State Industrial Development Corporation (MPSIDC) are reportedly being investigated by the Economic Offences Wing of the state police department for giving a loan of Rs 44.75 crore to S Kumars' sister concern, Induj Enertech, now renamed Entegra
The loan amount exceeded the legally allowed loan limit of Rs 3 crore and was handed over without securing return of the amount. After obtaining the loan, Shree Maheshwar Hydel Power Corp Ltd (SMHPC) defaulted on repayment
Cases were filed by the Economic Offences Wing of the state police against S Kumars' director, Mukul Kasliwal, under charges of criminal conspiracy, cheating and fraud
When the S Kumars refused to pay back, MPSIDC declared Induj Enertech or Entegra as a wilful defaulter in September 2001 and took over the Maheshwar dam site lands and properties belonging to the S Kumars, bringing the work on the project to a complete halt for five years from 2001 up to November 2005
 
The company had originally filed a defamation suit in a Mumbai civil court in 2001, objecting to a press note issued by NBA activists. The press note stated that “officers of the Indian public financial institutions and industrialists such as S Kumars have connived to siphon off and loot hundreds of crores and of rupees of public money—money that is the lifetime savings of common Indian citizens”. Leaders of NBA are fighting for the rights of people from 61 villages who will be displaced by the dam. The company has failed to provide proper resettlement to all the 9,500 families affected by the dam. 

The civil court had dismissed the defamation suit in February 2010, saying the petitioners had not able to establish the jurisdiction of the court to adjudicate the matter. SMHPC then filed an appeal in the high court.

In the nine years between the filing of the defamation suit and the final decision of the civil court, the Maheshwar project saw many twists and turns. NBA pointed out discrepancies in the project and rehabilitation of the affected people. The project ran into trouble in 1999 when several German companies which were collaborating in the project backed out. The project estimates also shot up. The statutory Central Electricity Authority that cleared the dam project had said the project would be “techno-economically” viable at an estimated cost of Rs 1,670 crore. The project cost now is over Rs 3,000 crore.

Excess loan without security

During arguments in court, NBA defended its press note alleging loot of public money. It said that former officials from Madhya Pradesh State Industrial Development Corporation (MPSIDC) are reportedly being investigated by the Economic Offences Wing of the Madhya Pradesh Police Department for giving a loan of Rs 44.75 crore to S Kumars' sister concern, Induj Enertech, now renamed Entegra. This amount exceeds the legally allowed loan limit of Rs 3 crore and was handed over without securing return of the amount. After obtaining the loan, SMHPC defaulted on repayment.

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Cases were filed by the Economic Offences Wing of the State government against S Kumars' director, Mukul Kasliwal, under charges of criminal conspiracy, cheating and fraud. When the S Kumars refused to pay back, in September 2001, the MPSIDC declared Induj Enertech or Entegra as a wilful defaulter, and took over the Maheshwar dam site lands and properties belonging to the S Kumars, bringing the work on the project to a complete halt for five years from 2001 up to November 2005.

State bails out company


In 2005, the government-owned Power Finance Corporation was asked to bail out the project while a settlement was signed with S Kumars under which the Government of Madhya Pradesh was the guarantor. Among the conditions, S Kumars was asked to issue post-dated cheques of up to Rs 55 crore to MPSIDC so that the loans could be recovered. But the cheques worth Rs 55 crores bounced leading to the police complaints against Kasliwal and his brother Warij.

Despite a poor financial track record, state government and central state-owned financial institutions acted as the project’s guarantor. On May 7, 2011, the Central Ministry of Environment and Forests (MoEF), which had imposed a ban on the construction of the dam in 2010, allowed the company to build five gates, citing that monsoon might damage the existing structure at site. MoEF had banned the construction stating that the terms of reference for environment clearance was not met by the company. After the ban was lifted, 25,000 project-affected-persons held protests calling for the scrapping of the dam project as it would destroy the local economy dependent on Narmada river.

In a statement issued to the media following the high court order, activist Chittaroopa Palit said the verdict makes it clear that “such companies are resorting to such baseless prosecutions and abuse of the legal process in order to suppress valid criticism about the misuse of public money in such unviable projects and the failure of the project authorities to rehabilitate the oustees, and to suppress the voice of the common people of this country, people’s movements as well as the press.”
The Maheshwar dam is one of the large dams of the Narmada Valley Development Project, which envisages construction of 30 large and 135 smaller dams in the Narmada valley.

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