Madras High Court
K.C.Palaniswamy vs The State Of Tamil Nadu on 19 October, 2011
Author: K.Chandru
Bench: K.Chandru
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.10.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.Nos.29495 to 29497 of 2010 and Connected Miscellaneous Petitions K.C.Palaniswamy ...Petitioner in all the WPs Vs. 1.The State of Tamil Nadu, Represented by the Home Secretary, Secretariat, Chennai. 2.The Deputy Superintendent of Police, Economic Offence Wing -2, EOW-2 Head Quarters, Chennai - 600 040. 3.The Director General of Police, State of Tamil Nadu, Post Box No.601,Dr.Radhakrishnan Salai, Chennai - 600 004. 4.The Union of India, Rep. By its Secretary, Department of Telecommunication, Sanchar Bhavan, 20, Ashoka Road, New Delhi. 5.The Union of India, Rep. By its Secretary, Ministry of Finance North Block, New Delhi (amended as per order dated 24.06.2011 by KCJ in M.P.No.1/2011) 6.Central Bureau of Investigation, Represented by its Superintendent of Police, Economic Offence Wing, Rajaji Bhavan, Chennai - 600 009. 7.Reserve Bank of India, Fort Glacis, Chennai. Rep. By its General Manager ...Respondents in all WPs W.P.No.29495 of 2010 preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus, directing the 2nd respondent to transfer all the investigations of FIR Nos.4 and 5 of 2009 to the 6th respondent herein and to appoint officers in whose integrity, independence and competence this Hon'ble Court has confidence for supervising the said investigations order and pass such further orders thereby render justice. W.P.No.29496 of 2010 preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus, directing the 7th respondent to conduct the investigation and further report on the letter dated 19th December 2008 issued by it under the RTI Act, 2005 against all the concerned persons. W.P.No.29497 of 2010 preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus, directing the respondent Nos.4,5,6 and 7 to take steps to recover the amounts siphoned off from the company DAIL by initiating appropriate action against all the persons so found involved in the siphoning. For Petitioner : Mr.H.Karthik Seshadri (in all WPs) For Respondents : Mr.RM.Muthukumar,G.A for R1 to R3 Mr.Philip Aravindan Jesudoss for R4 and R5 Mr.N.Chandrasekaran,Spl.P.P. For R6 (in all WPs) C O M M O N O R D E R
All the three writ petitions came to be posted on being specially ordered by the Hon'ble Chief Justice vide order dated 21.06.2011.
2. The petitioner is one and the same in all the writ petitions. In the first writ petition (W.P.No.29495/2010), the petitioner seeks for a direction to the Deputy Superintendent of Police, Economic Offence Wing-2, Chennai to transfer the investigation pending in FIR Nos.4 and 5 of 2009 to the Central Bureau of Investigation, represented by its Superintendent of Police, Economic Offence Wing, Chennai shown as 6th respondent and to appoint officers in whose integrity, independence and competence this Court may have confidence for supervising the said investigation.
3.In the second writ petition (W.P.No.29496/2010), the petitioner seeks for a direction to the Reserve Bank of India, Chennai to conduct the investigation and further report on the letter dated 19th December 2008 issued by it under the RTI Act, 2005 against all the persons concerned.
4. In the third writ petition (W.P.No.29497/2010), the petitioner seeks for a direction to respondents 4 to 7 to take steps to recover the amounts siphoned off from the company Data Access India Ltd (for short DAIL) by initiating appropriate action against all the persons so found involved in the siphoning of the funds. Though the petitioner initially described 5th respondent, the Union of India being represented by Ministry of Defence, subsequently, he filed an application to amend the cause title to make it as Union of India represented by Ministry of Finance and that application was ordered on 24.06.2011.
5. Heard the arguments of Mr.H.Karthik Seshadri for M/s.Iyer and Thomas, counsel for the petitioner, Mr.RM.Muthukumar, learned Government Advocate takes notice for respondents 1 to 3, Mr.Philip Aravindan Jesudoss, learned counsel for respondents 4 and 5, Mr.N.Chandrasekaran, learned Special Public Prosecutor for 6th respondent and Mr.Vijay Narayan, learned Senior counsel appearing for Mr.A.R.Karunakaran, counsel for the intervener in W.P.No.29497 of 2010.
6. When these writ petitions came up for admission on 23.12.2010, notice was directed to be served on the respondents and private notice was also permitted. Respondents were also served privately and proof of service was filed along with affidavit of service.
7. The case of the petitioner was that he was a resident of Coimbatore and former Member of Legislative Assembly of the State of Tamil Nadu. He is also the Managing Director of a company viz., Cheran Enterprises Private Limited (CEPL). The said company was formed for the purpose of establishing a joint venture between CG Holdings Private Limited, ORE Holdings Limited, Mauritius and one Nandakumar Athappan. As part of the Joint Venture business CEPL looked for acquiring a Telecom Company called DAIL, which was a Delhi based company involved in the business of International Long Distance Telephony Services and Internet Services.
8. It was further stated the DAIL was promoted by one Siddharth Ray (who is the intervener in W.P.No.29497 of 2010) and one Purva Rakesh through SPA Enterprises Pvt. Limited which later entered into a tie up with Pacific Century Cyber Works Group of Hong Kong (PCCW) in June 2000. The said Siddharth Ray was an employee of the PCCW and he was described as 'trojan horse' of the company to carry on business in India in a sector of business that had restrictions in foreign direct investment. This was in complete violation of the policy adopted in the Telecom Sector and the arrangement was made to circumvent the policy. PCCW group had established a Mauritius based entity called Pacific Convergence (Mauritius) Limited (PCML) and they had 49% holding in DAIL and also nominated directors on the Board of Directors of DAIL.
9. In August 2000, SPA Enterprises and PCML jointly floated a company known as PNI. PNI had acquired 51% of shares in DAIL and PCML was holding 49% of shares in DAIL. In October 2003, SPA acquired 25% stake of PCML in PNI. Thus, the shareholding in PNI was76% : 24% between SPA and PCML. In November 2003, SPA acquired 25% of shares of the company. As a result, the shareholding of PNI, PCML and SPA became 51% : 24% : 25%. Thus while the company remained as a subsidiary of PNI, SPA, holding 75% of PNI, a controlling stake, and with a direct holding 25% of DAIL, SPA is a predominant player of DAIL. The entire management of DAIL was controlled and operated by SPA. Siddharth Ray and PCCW group embarked on a systematic siphoning off funds from DAIL in clear violation of Foreign Exchange Management Act (FEMA) and RBI Regualations, thereby causing huge loss to DAIL and it was made to face imminent liquidation. In order to get over the situation, DAIL came out with a public issue to defraud the public shareholders. However, one day before the issuance, pubic issue was withdrawn. The intervener approached the company for a "bailout plan" and assured that liability of DAIL will not be exceeding Rs.300 Crores and made a number of representations. An agreement came to be executed in May 2004 by which CEPL agreed to acquire controlling interest of DAIL which was later done through a wholly owned subsidiary of CEPL namely Cheran Holdings Private Limited (CHPL) and KCP Associates Holdings Private Limited (KCPAHPL) for regulatory reasons.
10. The two companies (CHPL and (KCPAHPL) were made to part with about Rs.33 Crores in acquiring the controlling interest in DAIL and agreed to arrange an investment of Rs.75 Crores for its revival. The two companies arranged through their joint venture partners ORE's parent company Odyssey America Reinsurance Corporation, USA to provide the sum as capital on the strength of the undertaking given by the Indian Joint Venture Partner. But the intervener and his associates tampered with the foreign remittance instructions and attempted to appropriate the entire amount. Thereafter, collusively a winding up petition was filed in the High Court at Delhi and DAIL was ordered to be wound up.
11. The petitioner had preferred a complaint on 09.03.2005 with the CBI for the misappropriation of US$ 17 million. The complaint related to defrauding the petitioner approximately Rs.108 Crores, defrauding of M/s.Canara Bank and Syndicate Bank, public sector undertakings, Income Tax Department, diversion of funds from India to abroad in violation of FEMA and nexus between various public servants of public sector banks. Even when the complaints were pending, the Police belonging to State of Tamilnadu tried to close the investigation at the behest of the intervener. Therefore, the petitioner filed Crl.O.P.No.31375 of 2006, seeking for transfer of investigation of Crime No.23 of 2005 to the CBI. Crl.O.P.Nos.7005 and 7017 of 2005 were also filed before this Court to direct the investigating agencies to register a compliant on the basis of the complaints dated 01.03.2005 and 09.03.2005. This Court dismissed both the petitions by stating that the nature of investigation is bound to take time as it involves several charges. The State Police were directed to complete the investigation within six months. But instead of completing the investigation, the Police have filed false criminal cases against the petitioner and he was directed to appear in different Courts at Chennai, Nagercoil and Dindigul. The petitioner filed one more petition in Crl.O.P.No.17191 of 2008 for further investigation of Crime No.23 of 2005 through the CBI. That petition was disposed of by an order dated 30.07.2009 with a direction to complete the investigation within a time frame.
12. The intervener at that stage filed a Special Leave Petition before the Supreme Court in SLP (Crl) MP.No.17905 of 2005, challenging the direction issued by this Court. The petitioner also filed SLP No.8549 of 2009. However, both the petitions were dismissed as withdrawn vide order dated 13.11.2009. In the meanwhile, the second respondent viz., Deputy Superintendent of Police, EOW, Chennai -2, registered a criminal case in FIR Nos.4 and 5 of 2009 on 08.10.2009. The two FIR's though registered has not been investigated properly. The petitioner under the RTI Act, sought information from the Reserve Bank of India on his letter dated 12.08.2007 to which the Reserve Bank of India had replied that it had received instructions from the Government of India, Ministry of Finance to conduct an investigation into the losses suffered by Canara Bank and Syndicate Bank consortium in the account connected with the DAIL. Therefore, since the investigation have not been conducted properly, it is a fit case where this Court can direct for transfer of investigating agency and for a direction to the RBI to initiate action against all concerned persons.
13. The petitioner also filed various letters received by him viz., the leader of the opposition dated 15.09.2007, Ministry of Panchayat Raj dated 09.09.2007, Ministry of State for Communication and Information Technology dated September 2007, Finance Ministry addressed to the Minister of Panchayat Raj dated 17.09.2007 for contending that he was informed that the Ministry is looking into the complaint. He had also enclosed a report on the Global Financial Integrity Report on India released during November 2010 for establishing that there is large scale Illicit financial flows and India should do more to stop the existing loss.
14. A common counter affidavit was filed by the second respondent. In the counter affidavit, it was stated that he was the Investigating Officer in Crime No.23 of 2005 and the investigation discloses that the averments made by the petitioner was not correct and a draft final report was submitted for perusal by the Supervisor to be filed in the Court. In the meanwhile, the petitioner filed Crl.O.P.No.17191 of 2008 for reinvestigation and transfer of the case to the CBI. But this Court only ordered for re-investigation of the case by the Special Economic Offences Wing and to submit a final report after giving sufficient opportunity to the complainant to furnish his evidence. It was stated in the counter affidavit that investigation was started and is pending for the examination of the witnesses and collection of the evidence.
15. It was further stated that a leading independent management consultants viz., Price Water Coopers conducted a due diligence at the instance of the petitioner. The independent consultants have not indicated any siphoning of funds by DAIL or by anybody. The petitioner himself purchased the controlling interest of DAIL by way of shares from SPA company controlled by the intervener at the rate of Rs.4/- per share, which is below the face value of Rs.10/- and far below the offer price of Rs.17 to 20. The petitioner paid only Rs.33 crores whereas the face value was Rs.82.5 crores and the offer price was Rs.140.25 crores to Rs.164 Crores with a pre condition to procure an unsecured loan of Rs.75 Crores at a current borrowing rate of interest @ 11.5% as per the agreement dated 01.07.2004 between the petitioner and the intervener. The loan was received from ABN AMRO Bank, Chennai Branch account on 19.08.2004 on behalf of DAIL. The petitioner was the sole signatory of the account and using this power, diverted 17 million U.S.$ (equivalent to Rs.78.45 Crores) to Cheran Holdings Private Limited on the very same day. Under the new management of the company by the petitioner, the debts of the company was increased from Rs.300 crores to 540 crores by September of the same year and all post-dated cheques issued by the previous administration was not honored by the new management. It was because of this reason, the Pacific Convergence Corporation Ltd., filed a winding up petition to wind up the DAIL at the High Court of Delhi. On this petition, the Delhi High Court ordered winding up of the company and with a further direction to re-transfer the amount received from ABN Amro Bank. This order of the Delhi High Court was not complied with by the petitioner till date. The petitioner gave new complaint with old allegation and filed Crl.O.P.No.31375 of 2006 for transferring the case to CBI. The petitioner also filed two petitions in Crl.O.P.Nos.7005 and 7017 of 2005. The CrL.O.Ps were disposed of by a common order rejecting the request of transfer to CBI and a direction was issued to the State Investigating Agency to expedite the investigation. The allegation made by the petitioner was investigated by EOW II in Cr.No.23 of 2005 and the petitioner has been filing case after case. A final report was submitted to the Chief Metropolitan Magistrate. The petitioner is blocking the judicial process by filing such writ petition. His appeal to Supreme Court in SLP was withdrawn on his own accord. The petitioner further filed complaints and those complaints were also registered in Cr.Nos.4 and 5 of 2009 on 08.09.2009 and they were investigated by the second respondent. Therefore, it was stated that there are no fresh circumstances warranting any transfer of investigating agency.
16. The intervener in his application for impleadment in M.P.No.2 of 2011 submitted that the petitioner was guilty of making false allegations which has got no foundational backing. The Delhi High Court by a judgment dated 18.11.2005 directed the writ petitioner's companies M/s.Cheran Holdings, KCP Associates Holding Pvt. Ltd., Cheran Enterprises Pvt. Ltd., Sporting Pastime India Ltd., to remit 78.5 Crores which had been received in the account of DAIL but had been transferred out on the same day in favour of his own companies. The Delhi High Court made a prima facie finding against the petitioner and rejected the defence taken by him. The money was not even remitted back even after the order of the Delhi High Court. Hence, a contempt petition was filed by the Canara Bank in CCP.No.31 of 2005. It is only to create a false defence in the contempt petition, he has been filing such cases. He had also filed appeals before the Division Bench of the Delhi High Court challenging the order of winding up dated 18.11.2005. Those appeals were dismissed by the Division Bench by an order dated 20.11.2009 and the Division Bench specifically noted that the order of the Company Judge does not call for any interference. The petitioner's request to keep the contempt petition in abeyance was also rejected.
17. It was also stated that the Delhi High Court very recently on 20.01.2011 in the Company Petition No.292 of 2004 and other applications recorded the following findings:-
"it is apparent from the facts stated above that CEPL, SPIL, KCPHAL and CHPL have all been dragging prolonging the matter and trying to stall the implementation of the directions given in paras 70 to 72 in the order/judgment dated 08.11.2005. In terms of the directions issued in the said order/judgment money i.e. Rs.78.45 Crores must come into the bank account in Canara Bank. Inspite of more than 5 years, this has not happened. The said companies cannot be permitted and allowed to stall compliance of the directions issued....
...numerous litigation have come up and have been filed by severl parties to keep control and retain hold of the money. It is stated on behalf of Mr.KC Palanisamy that CEPL is the holding company of Cherran Properties Pvt. Ltd., which in turn is a holding company of SPIL. Similarly, CHPL is a subsidiary of CEPL and KCPAHL is a subsidiary of CHPL. Prima facie, it does appear that all the companies were fully aware and conscious of the transfer of the money in ABN-AMRO bank and the claim of Canara Bank..."
18. Therefore, it was contended that it is the petitioner who is the perpetrator of many illegalities in the process of purchase by him of DAIL in July 2004. There has been several criminal cases lodged against the petitioner and the some of the cases against the petitioner, is set out in para 7, which is as follows:-
"...A charge sheet was apparently filed before the Hon'ble Judicial Magistrate No.1 at Coimbatore u/s 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document), 472 (making or posessing counterfeit seal with intent to commit forgery) of the Indian Penal Code. The said charge sheet notes that Mr.K.C.Palaniswamy (the writ petitioner) joined with common intention of committing forgery of valued security and using them as genuine knowing them as forged documents and falsiied the accounts of Cheran Chit Funds Pvt. Ltd and thereafter used the said forged documents as genuine for the claim petition that the writ petitioner filed against the complainant himself. The said matter was quashed in view of S.195(1)9d) of Cr.P.C by the High Court of Madras. The Supreme Court however, allowed the appeal agaisnt the quashing order and directed that the trial against the writ petitioner be proceeded with in accordance with law."
19. The cases pending against the petitioner in various provisions of IPC including Section 420 IPC, there were as many as 9 cases in Coimbatore alone. They are as follows:-
"a) Coimbatore City Crime Branch Cr.No.37/99 u/s 420 IPC
b) Coimbatore City Crime Branch Cr.No.17/2000 u/s 420 IPC
c) Coimbatore City Crime Branch Cr.No.62/2000 u/s 420 IPC
d) Coimbatore City Crime Branch Cr.No.18/2001 u/s 420 IPC
e) Coimbatore City Crime Branch Cr.No.25/2001 u/s 420 IPC
f) Coimbatore City Crime Branch Cr.No.29/2001 u/s 384 IPC
g) Coimbatore City Crime Branch Cr.No.20/2002 u/s 467, 468, 471, 472 and 477(A) IPC
h) Coimbatore Economic Offences Wing Cr.No.03/2001 u/s 408 IPC
i) Coimabtore City Crime Branch Cr.No.26/2003 u/s 406 IPC"
20. It was stated that the modus operandi of the petitioner was to defraud a person or an entity and thereafter approach the courts with multiple petitions in order to distract attention from his own misdeeds. It was also claimed that the petitioner has earlier filed a writ petition in W.P.No.49987 of 2006 for taking action on his representation dated 22.11.2006 to monitor the investigation by EOW. That writ petition was dismissed as withdrawn on 25.01.2007. The petitioner's Crl.O.P.No.31375 of 2006, Crl.O.P.No.7005 of 2005 and 7017 of 2005 were all dismissed on 22.02.2007. Crl.O.P.12754 of 2007 was dismissed by this Court on 08.02.2008. The petitioner also filed a writ petition in W.P.No.39412 of 2008 through an Advocate praying for formation of Committee for non-recovery of monies in DAIL and that writ petition is yet to be disposed of. The writ petitions in W.P.Nos.13820 and 13821 of 2007 instituted by SPIL (one of the petitioner company) seeking for a direction against the Income Tax authorities from refunding amounts relating to tax to any other entity, despite the I.T.Authorities have refunded the amount to Canara Bank is pending. W.P.No.32444 of 2006 was filed by CEPL, one of the petitioner company for refund of the amount from the I.T. Authorities, wherein this Court ordered that the amount will not be refunded to any party until further orders. The petitioner's Crl.O.P.No.12631 of 2007 against the Director General of Police was dismissed on 11.02.2008. Cr.O.P.No.17191 of 2008 was dismissed in all respects except for reinvestigation of Crime No.23 of 2005.
21. It was further stated that the petitioner had not disclosed the pendency of an FIR registered against him in FIR No.323 of 2005 by the Delhi Police. He has also not disclosed that the CBI is investigating the complaint filed by the Canara bank wherein the petitioner is arrayed as an accused in respect of the same transaction. The petitioner has also committed several frauds and FIR has been lodged against him in Chennai in Cr.No.246 of 2008 for forgery and cheating, Crime No.87 of 2008 at Central Crime Branch, Chennai for misappropriation and Cr.No.54 of 2008 at Central Crime Branch for forgery and cheating. The petitioner was arrested by the Chennai police and was detained in judicial remand for several times. The last of the complaint mentioned above in Cr.No.54 of 2008 at Central Crime Branch was given by one Ramasamy Athappan for forgery and cheating.
22. It will be interesting to note that the application filed by the said Ramasamy Athappan before this Court in the original side came to be considered by a learned Judge of this Court reported in 2009 3 MLJ 84 [Ramasamy Athappan and another v. Secretariat of the Court, International Chamber of Commerce, France and others], wherein, very same petitioner was arrayed as 6th defendant in the suit and he had filed similar cases against several other persons which are set out in paragraph 45 of the said judgment. This is only referred to show that allegation made by the respondents against the petitioner and others that his modus operandi of filing criminal case indiscriminately against other persons in order to intimidate them is not without basis.
23. The petitioner has filed a reply affidavit refuting some of the allegations and once again reiterated that the earlier direction issued by this Court was not followed and the complaint is still being investigated by the Deputy Superintendent of Police and not by Superintendent of Police. It was stated that the allegations made by the intervener, who himself is an accused in the FIR should not be taken seriously by this Court.
24. Mr.Karthik Seshadri, learned counsel for the petitioner placed reliance on the judgment of the Supreme Court reported in 1998 AIR SCW 645 [Vineet Narain and others v. Union of India and another] to contend that inertia of investigating agencies to investigate into offences involving persons holding high offices issuance of mandamus directing agencies to perform would have become futile. Therefore, the Court must keep the issue pending and monitor the investigation by calling the agencies to report the progress of investigation, which will ensure continuance of the investigation. Therefore, he pleaded that this Court must not only direct the CBI to conduct the investigation by transferring the case to CBI but also continuously monitor the investigation to unearth the large scale siphoning of funds from this country by the accused named in the FIR.
25. The learned counsel also referred to the judgment of the Supreme Court reported in 2001 SCC (Cri) 1048 [T.T.Antony v. State of Kerala and others), wherein it was held that the right of the police to investigate though held to be a statutory right, the Court do not possess any supervisory jurisdiction under Cr.PC. The plenary power of the police to investigate a cognizable offence is not unlimited and a just balance between the fundamental rights of the citizens and the expansive power of the Police. Where the police transgresses its statutory power of investigation the High Court under Section 482 CrPC or under Articles 226/227 of the Constitution in an appropriate case can interdict the investigation to prevent abuse of the process of the court or otherwise to secure the ends of justice.
26. He also referred to the judgment of the Supreme Court reported in (2010) 3 SCC 571 [State of West Bengal and others v. Committee for Protection of Democratic Rights, West Bengal and others] for contending that the restriction imposed under Section 6 of the Delhi Special Police Establishment Act, 1946 restricting the power of the Central Government to extend powers and jurisdiction of CBI to State only with the consent of Government of State would not mutatis mutandis apply to constitutional courts exercising power under Article 226 or 32 of the Constitution. The State has a duty to ensure such investigation against any person including its own officers, accused of commission of cognizable offence. In such cases, the accused or victim and in certain other situations even a witness to the crime can seek for enforcement of their rights.
27. He also referred to the judgment of the Supreme Court reported in (2011) 1 SCC 560 [Centre for Public Interest Litigation and others v. Union of India and others], wherein the Supreme Court on a public interest litigation is monitoring the investigation into the 2G Spectrum Scandal case.
28. However, this Court is not inclined to accept the request made by the petitioner. The petitioner is not an innocent party in filing such complaints and he himself has not obeyed the order passed by the Delhi High Court in the application for winding up and asking him to refund the amount siphoned off by him which was obtained as a loan by DAIL. Parties who comes to Court must come with clean hands. Not only the petitioner has come to this Court with unclean hands, but he himself being an accused in several cases had also suppressed the entire proceedings of the Delhi High Court including the order directing the company to retransfer the money siphoned of from DAIL.
29. In this context it is necessary to refer to a recent decision of the Supreme Court in State of M.P. Vs Narmada Bachao Andolan reported in 2011 (7) SCC 639@ 705 & 706 . In Paragraphs 163 to 167, it was held as follows:
"163.Whenever the court comes to the conclusion that the process of the court is being abused, the Court would be justified in refusing to proceed further with the matter. This rule has been evolved out of the need of the courts to deter a litigant from abusing the process of the court by deceiving it. However, the concealed fact must be a material one in the sense that had it not been suppressed, it would have an effect on the merit of the case/order. The legal maxim jus ex injuria non oritur means that a right cannot arise out of a wrongdoing, and it becomes applicable in a case like this. (Vide Ramjas Foundation v. Union of India (1993 Supp (2) SCC 20 : AIR 1993 SC 852), Noorduddin v. Dr.K.L.Anand ((1995) 1 SCC 242) Ramniklal N.Bhutta v State of Maharashtra ((1997) 1 SCC 134: AIR 1997 SC 1236), Sabia Khan v.State of U.P. ((1999) 1 SCC 271). S.J.S. Business Enterprises (P)Ltd. v.State of Bihar ((2004) 7 SCC 166 and Union of India v.Shantiranjan Sarkar ((2009) 3 SCC 90: (2009) 1 SCC (L&S) 575).
164.It is a settled proposition of law that a false statement made in the court or in the pleadings, intentionally to mislead the court and obtain a favourable order, amounts to criminal contempt, as it tends to impede the administration of justice. It adversely affects the interest of the public in the administration of justice. Every party is under a legal obligation to make truthful statements before the court, for the reason that causing an obstruction in the due course of justice "undermines and obstructs the very flow of the unsoiled stream of justice, which has to be kept clear and pure, and no one can be permitted to take liberties with it by soiling its purity".(Vide Naraindas v. Govt. of M.P.((1975) 3 SCC 31: 1974 SCC (Cri) 727:AIR 1974 SC 1252). Advocate General, State of Bihar v.M.P.Khair Industries (1980) 3 SCC 311: 1980 SCC (Cri) 688:AIR 1980 SC 946 and Afzal v.State of Haryana ((1996) 7 SCC 397: 1996 SCC (Cri) 424)).
165. In K.D.Sharma v.SAIL ((2008) 12 SCC 481) this Court held that:(SCC p.492, para 34) "34.....Prerogagtive writs.....are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ court must come with clean hands, put forward all the facts before the court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the court, his petition may be dismissed at the threshold without considering the merits of the claim"
(emphasis added)
166.While deciding the said case this Court relied upon upon the leading case of R.v.Kensington Income Tax Commissioners ((1917) 1 KB 486 (CA), wherein it had been observed as under (KB p.514) ".....when an applicant comes to the court to obtain relief on an exparte statement he should make a full and fair disclosure of all the material facts -(it says) facts, not law. He must not misstate the law if he can help it-the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the court will set aside any action which it has taken on the faith of the imperfect statement".
(emphasis added) "36....If the applicant makes a false statement or suppresses material fact or attempts to mislead the court, the court may dismiss the action on that ground alone.....The rule has been evolved in the larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it".
(emphasis supplied)
167.In such a case the person who suppresses the material facts from the court is guilty of suppressio veri and suggestio falsi i.e. Suppression or failure to disclose what a party is bound to disclose, which may amount to fraud."
30. The Supreme Court while considering the scope of ordering a transfer of investigation to be done by CBI has set out the parameters for making such direction vide its judgment in Secretary, Minor Irrigation & Rural Engineering Services, U.P. v. Sahngoo Ram Arya reported in (2002) 5 SCC 521. In paragraphs 5 and 6, it was held as follows:-
"5. While none can dispute the power of the High Court under Article 226 to direct an inquiry by CBI, the said power can be exercised only in cases where there is sufficient material to come to a prima facie conclusion that there is a need for such inquiry. It is not sufficient to have such material in the pleadings. On the contrary, there is a need for the High Court on consideration of such pleadings to come to the conclusion that the material before it is sufficient to direct such an inquiry by CBI. This is a requirement which is clearly deducible from the judgment of this Court in the case of Common Cause1. This Court in the said judgment at paragraph 174 of the Report has held thus: (SCC p. 750, para 174) 174. The other direction, namely, the direction to CBI to investigate any other offence is wholly erroneous and cannot be sustained. Obviously, direction for investigation can be given only if an offence is, prima facie, found to have been committed or a person's involvement is prima facie established, but a direction to CBI to investigate whether any person has committed an offence or not cannot be legally given. Such a direction would be contrary to the concept and philosophy of LIFE and LIBERTY guaranteed to a person under Article 21 of the Constitution. This direction is in complete negation of various decisions of this Court in which the concept of LIFE has been explained in a manner which has infused LIFE into the letters of Article 21.
6. It is seen from the above decision of this Court that the right to life under Article 21 includes the right of a person to live without being hounded by the police or CBI to find out whether he has committed any offence or is living as a law-abiding citizen. Therefore, it is clear that a decision to direct an inquiry by CBI against a person can only be done if the High Court after considering the material on record comes to a conclusion that such material does disclose a prima facie case calling for an investigation by CBI or any other similar agency, and the same cannot be done as a matter of routine or merely because a party makes some such allegations. In the instant case, we see that the High Court without coming to a definite conclusion that there is a prima facie case established to direct an inquiry has proceeded on the basis of ifs and buts and thought it appropriate that the inquiry should be made by CBI. With respect, we think that this is not what is required by the law as laid down by this Court in the case of Common Cause1."
31. In the present case, the petitioner has filed series of Crl.OPs including the prayer which has been made in the writ petitions and they were negatived by this Court more than once. All that this Court held was that investigation should be conducted by the State Police and a report should be filed expeditiously and that has been done in this case as noted in the counter affidavit filed by the second respondent.
32. In this context, it is necessary to refer to the judgment of the Supreme Court in Shashikant v. Central Bureau of Investigation, (2007) 1 SCC 630. In paragraph 30 and 32, it was observed as follows:-
"30. The first respondent is a statutory authority. It has a statutory duty to carry out investigation in accordance with law. Ordinarily, it is not within the province of the court to direct the investigative agency to carry out investigation in a particular manner. A writ court ordinarily again would not interfere with the functioning of an investigative agency. Only in exceptional cases, it may do so. No such case has been made out by the appellant herein. The nature of relief prayed for in the writ petition also is beyond the domain of a writ court save and except, as indicated hereinbefore, an exceptional case is made out.
32. So far as the decision of the first respondent herein, not to register a regular case so as to take up an investigation into the allegation against the officers concerned, is concerned, the appellant may have to pursue his own remedy keeping in view the fact that the first respondent before this Court has furnished the details of its findings in the preliminary inquiry as also the result of the departmental proceedings initiated against the delinquent officers."
33. In fact the earlier Crl.OP filed by the petitioner was rejected by a learned Judge of this Court after referring to the case relating to Sakiri Vasu v. State of Uttar Pradesh reported in (2008) 2 SCC 409. In that case, the Supreme Court in paragraphs 31,33,34 and 35 has held as follows:-
"31. No doubt the Magistrate cannot order investigation by CBI vide CBI v. State of Rajasthan13 but this Court or the High Court has power under Article 136 or Article 226 to order investigation by CBI. That, however, should be done only in some rare and exceptional case, otherwise, CBI would be flooded with a large number of cases and would find it impossible to properly investigate all of them.
33. In Secy., Minor Irrigation & Rural Engg. Services, U.P. v. Sahngoo Ram Arya15 (SCC vide para 6) this Court observed that although the High Court has power to order a CBI inquiry, that power should only be exercised if the High Court after considering the material on record comes to a conclusion that such material discloses prima facie a case calling for investigation by CBI or by any other similar agency. A CBI inquiry cannot be ordered as a matter of routine or merely because the party makes some allegation.
34. In the present case, we are of the opinion that the material on record does not disclose a prima facie case calling for an investigation by CBI. The mere allegation of the appellant that his son was murdered because he had discovered some corruption cannot, in our opinion, justify a CBI inquiry, particularly when inquiries were held by the army authorities as well as by GRP at Mathura, which revealed that it was a case of suicide.
35. It has been stated in the impugned order of the High Court that GRP at Mathura had investigated the matter and gave a detailed report on 29-8-2003. It is not clear whether this report was accepted by the Magistrate or not. If the report has been accepted by the Magistrate and no appeal/revision was filed against the order of the learned Magistrate accepting the police report, then that is the end of the matter. However, if the Magistrate has not yet passed any order on the police report, he may do so in accordance with law and in the light of the observations made above.
34. Therefore, in the light of the above, there is no case made out to grant any direction sought for by the petitioner either in the first writ petition or to call for a report from RBI as demanded in the second writ petition or for any direction to the Central Government to take steps to retransfer the funds siphoned off from this Country. The petitioner has not made out any prima facie case for grant of any such direction and he has suppressed the information relating to winding up proceedings before the Delhi High Court. The petitioner himself is not a person aboveboard and faced with several criminal cases under Section 420 IPC not only as revealed in the affidavit filed in support of the petition for impleadment but also as noted by this Court in the decision cited in Ramasamy Athappan' case (cited supra). The petitioner himself is guilty of several commissions and omissions and at his instance no direction can be granted by this Court.
35. In view of the above, all the three writ petitions will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
19.10.2011 Index : Yes Internet : Yes svki To
1.The Home Secretary, The State of Tamil Nadu, Secretariat, Chennai.
2.The Deputy Superintendent of Police, Economic Offence Wing -2, EOW-2 Head Quarters, Chennai - 600 040.
3.The Director General of Police, State of Tamil Nadu, Post Box No.601,Dr.Radhakrishnan Salai, Chennai - 600 004.
4.The Secretary, The Union of India, Department of Telecommunication, Sanchar Bhavan, 20, Ashoka Road, New Delhi.
5.The Secretary, The Union of India, Ministry of Finance North Block, New Delhi
6.The Superintendent of Police, Central Bureau of Investigation, Economic Offence Wing, Rajaji Bhavan, Chennai - 600 009.
7.The General Manager Reserve Bank of India, Fort Glacis, Chennai.
K.CHANDRU,J.
svki ORDER IN W.P.Nos.29495 to 29497 of 2010 19.10.2011