The violation of the terms resulted in a loss of Rs 49 crore to KPCL as well as to the Centre, according to the ED.

Mumbai: The Enforcement Direct-orate (ED) has provisionally attached assets worth Rs 49 crore of a joint-venture firm that was allocated coal blocks in Wardha, Nagpur for captive mining for power-generation in Bellary, Karnataka.

The ED money-laundering probe against the firm is based upon a Central Bureau of Investigation (CBI) case against it for allegedly selling the residue remains generated during washing of the mined coal to the tune of Rs 49 crore, instead of using it exclusively for the end-use, power generation, as per the allocation terms.

The Centre allocated the coal block in 2003 for power generation at the Bellary thermal power station. “The coal block was allocated under a condition that the residues generated while washing the mined coal will be exclusively used for the end-use and not for commerce or other purposes,” said an ED source.

The joint-venture firm had entrusted the work of washing the mined coal to another firm. During 2008-09 to 2012-13, around 8,03,859 metric ton of residues worth Rs 49 crore were generated and the same was allegedly sold in the open market in contravention of the allocation terms.

The coal block was allocated to the Karnataka Power Corporation Ltd (KPCL), which formed a joint-venture firm, Karnataka EMTA Coal Mines Ltd. (KECML), with a Kolkata-based company. The violation of the terms resulted in a loss of Rs 49 crore to KPCL as well as to the Centre, according to the ED.

In March 2015, the CBI had registered a case against the joint-venture firm and the firm entrusted to run the washery, along with a few officers of KPCL, for the irregularities. The ED had initiated its probe based on the CBI case.

“During investigation, it was noticed that proceeds of crime to the extent of Rs 49 crore was generated by the accused, after which a term deposit worth Rs 49 crore of the accused was attached provisionally,” the source said.