Delhi High Court
Dr. Subramaniam Swamy vs Union Of India (Uoi) And Ors. on 31 May, 2002
Author: A.K. Sikri
Bench: S.B. Sinha, A.K. Sikri
JUDGMENT A.K. Sikri, J.
1. This petition is filed by the petitioner under Article 226 of the Constitution of India seeking issuance of writ of "continuous mandamus" for monitoring the investigation of cases registered by the respondents against Mr. Romesh Sharma, Mr. Dawood Ibraim and Reliance Industries Ltd. for ensuring impartial, effective and expeditious investigation and trial to uphold the majesty of law. The petition is filed by way of Public Interest Litigation. In the first para of the petition, the petitioner has given his credentials stating that he is the President of the Janta Party since 1990. He is a member of the Parliament from 1974 till date and was a Union Minister for Commerce, Law & Justice during 1990-91. He held the post of Chairman of the Commission on Labour Standards and International Trade with the rank of a Cabinet Minister during 1994-96. He was an Assistant Economics Affairs Officer in the United Nations in 1963. He taught Economics at Harvard University, USA for more than a decade from which famous university, he had also received his Ph.D. after researching with two Nobel laureates in Economics. He has also been a Professor of Economics at the IIT, Delhi from 1971 till 1991.
2. According to the petitioner, the aforesaid persons have committed various cognizable offences including the hawala transaction, kidnapping, extortion offences and under the Prevention of Corruption Act. However, the Government agencies including the CBI as well as the Revenue authorities have failed to perform their statutory obligations and are in fact eager to hush up the matter. He has nurtured these apprehensions because of various circumstances narrated in the petition.
3. It may be stated at the outset that in the writ petition, the petitioner has alleged various illegalities and criminal acts committed by these persons and has also alleged that investigation into these offences by the concerned authorities is not proper. The respondents in the writ petition are the Union of India, CBI, the Commissioner of Police, Delhi, the Director, Enforcement Directorate, the Registrar of Companies and Reliance Industries Ltd. The Reliance Industries Limited (RIL), the respondent No. 6, was added as a party at a later stage. The show cause notice was issued to the respondents. The respondents No. 2, 3, 4 and 6 have filed their replies. Various other additional affidavits are also filed by different respondents pursuant to directions issued by this court from time to time reference to which would be made at an appropriate stage. The orders passed in this writ petition from time to time would reveal that the court has been taking note of the progress made in some of the cases registered and/or pending against the RIL and others. It was, for this reason, to ascertain the latest position in respect of some of these cases the respondents were directed to file the additional affidavits from time to time.
4. As already mentioned above, although number of grievances are made by the petitioner in the present writ petition, when the matter was finally heard on 16th March, 2002 the Petitioner, who appeared in person, handed over a note which related to five alleged offences by the RIL the prosecution of which the petitioner has sought to be monitored by this court, and therefore, the submissions of the parties were also confined to the alleged offences mentioned in this note.
A. Enforcement Directorate Cases:
The petitioner has mentioned three cases under this head. One case which involved financial scams being investigated by the CBI. The fifth case he puts in the category of `others'. The note handed over by the petitioner describes the alleged offences and the progress as on the date of filing of the writ petition and the progress made in respect of these cases under monitoring by this court. It would be apposite to reproduce this note which gives a fair indication for the issues involved.
S.No. Offence Progress as on the date of filing of the Writ Petition. Progress under monitoring by the Hon'ble Court.
A. ENFORCEMENT DIRECtorATE CASES
1. Parking abroad of ECB proceeds In contravention of FERA and the conditions for grant of permission to to raise ECB's abroad Nothing was done ; and the proceeds continued to be kept abroad; and were utilised thereby RIL, interalia for manipulation of share prices.
In or about 2000-2001, RIL finally repatriated the entire amount of ECB proceeds parked abroad, including interest accrued thereon, totaling 1,30,257 million U.S. dollars and 173.02 million pounds. So far they have not been penalised for this stupendous infraction of the law and the conditions of grant of permission to raise funds abroad.
On 23.4.2001, the RBI opined that the "irregularities committed by the Company may not be construed as warranting any action under FERA or FEMA."
In June 2001, the ED has asked RIL to inform the purpose for raising ECB abroad and its utilisation, Its reply, submitted on 7.8-2001 was under scrutiny in August 2001, at last count.
The spectacular success of this investigation in bringing back all the aforesaid proceeds has been achieved only since the filing of the instant writ petition and due only to the monitoring of this Hon'ble Court.
2. In May 1985, letters of credit for the import of PTA worth about Rs. 180 crores, were backdated Investigation was started only in April 1996. The cases filed Five Banks are being prosecuted :(a) Banque Indo-Suez: Investigation completed; show cause notices were issued to the Bank, its against RIL had been adjourned at least 16 times. officials, RIL and Mr.V.T.Pai, General Manager Finance of RIL on13. 10.2000.
(b) Standard Chartered Bank Draft Show Cause Notices dated 16.2.2001, to be issued to the Bank, its official, RIL and Mr.V.T.Pai, were sent back by the Special Director Enforcement on 30.4.2001, stating that "no useful purpose will be served by issuing of proposed show cause notice unless further evidence if forthcoming". Thereafter the Dy. Director Mumbai vide letter dated 1.6.2001 has re-submitted the proposal; and a show cause notice was finallyissued on 29.7.2001.
(c) Case against State Bank has been dropped as the letter of credit was cancelled, unutilised-even though backdating per se is an office.
(d) Societe General Bank:Draft show cause notice has been Bent to the Special Director Enforcement on 5.7.2001.
(e) For Canara bank:Draft show cause notice has been sent to the Special Director Enforcement on 26.7.2001. Thereafter there has been no progress report.
Thus in nearly 17 years even the notice to show cause stage has only been achieved in the last approximately two years,
1. under this Hon'ble Court's monitoring.
3. 1993 Export of Masur Dal in substitution ofP.O. Yarn 12 RILemployees were arrested and released on bail. No progress was made thereafter. Summons have been issued to Mr.Mukund Pathak, Mr.Rajiv Pathak and Avinash Samant on 10.11.2000, thereafter on 30.11.2000, thereafter on 26-28.2.2001-till which time no one appeared. Finally on 8.4.2001, recording of Mukund Pathak'sevidence was started; and a proposal to launch prosecution against Rajiv Pathak for non-appearance was mooted; a directive to RIL was sent on 25.8.2000, calling for informations the reply thereto was scrutinised; a final report Was sent to the Special Director Enforcement, Mumbai on 5.7.2001 for consideration and issue of show cause notice. Thereafter there has been no progress report.Thus in nearly 10 years, the stage of issue of show cause notice has only been reached in the last approximately two years.
B. FINANCIAL SCAMS BEING INVESTIGATED BY C.B.I.
1. Conspiracy of purchase of RIL shares of Rs.944 crores on private placement to UTI etc at inflated prices; and also acceptance of RIL duplicate shares already Mr.Y.P.Singh, an officer of the CBI produced a 40 page report and sought permission from the Finance Ministry to proceed further in the matter. He was transferred This Hon'ble Court commenced looking into the matter only on 24.8.2001, where after the CBI was directed to product the file re: the self contained note dated 24.9.1996 to which reference was made in the CBI's affidavit dated 16.5.2000 (This affidavit sold to others out of the CBI and the investigation was out on hold. adverted to the fact that the CBI had closed the file only on the direction of the Finance Ministry. The file was produced on 20.9.2001 in a sealed cover their Lordship, after perusal, observed that it did not appear to contain any direction for closure of the case.
Hence it is submitted that this Hon'ble Court must monitor further investigation/follow up of Mr.Y.P.Singh's report.
C. OTHERS.
1.Between April 1990 and October 1995, RIL was alleged to have altered 70.30 lakh share transfer deeds, rendering them defective and incapable of being acted upon for effecting transfer In 1996, 29 criminal cases were filed by the Registrar of Companies Maharashtra. Summons were issued on 13.7.1996 by the Addl. Chief Metropolitan Magistrate Mumbai against Dhirubhai Ambani, his two sons and six others. No progress has been made thereafter. This Hon'ble Court has not yet looked into the matter and the same appears to have not progressed further.
5. The submission of the petitioner was that the alleged commission of irregularities in the aforesaid case was almost admitted even by the respondents in their counter affidavits on the basis of which they had investigated the matter and initiated proceedings. However, the petitioner was at pains to point out that the investigation and/or prosecution in all these cases were going at snail's pace and in fact it was only after the progress was monitored by this court and orders were passed from time to time in this behalf, that the respondents speeded up the investigation and filing of charge-sheet in the court of law. Therefore, his submission was that the court should continue to monitor the progress of the cases.
6. On behalf of the CBI, Mr. K.N. Bhatt, learned senior counsel had made the submissions. The CBI investigation relates to the issue of purchase of shares of RIL by the Unit Trust of India, and therefore, would be dealt with at appropriate stage when the said issue is being discussed.
7. Mr. Vikas Mehta, Advocate appeared for the Enforcement Directorate and referring to the various affidavits including the last affidavit filed on 9th August, 2001 stressed about the progress being made in the investigations relating to various cases on the basis of which he submitted that since the Enforcement Directorate was itself looking into the matter, no directions need be given nor any monitoring was required by the court.
8. Mr. Ashok H. Desai, learned senior counsel appeared for the RIL. With vehemence he opposed the present writ petition contending that it was a politically motivated petition filed by the petitioner who had leveled reckless and malicious allegations. These allegations were not only aimed at the officials of RIL and officers of some of the Government Undertakings, infact the petitioner had not even spared the PMO, Union Home Minister, former Chief Minister, Delhi and other such highly placed persons who were not even made parties in their personal capacity in the writ petition. Referring to such allegations against these high dignitaries in the writ petition. Mr. Desai submitted that sheer motive of the petitioner was to malign these persons and it was enough to expose the motives behind such a petition which was in fact not a petition in public interest. He also argued that as per the petitioner's own showing in all five cases pointed out by the petitioner either the charge-sheet had been filed I the court or conscious decision taken not to take particular action or show cause notices had been issued. In such circumstances, according to the learned senior counsel, it was not appropriate for this court to give any directions at this stage as the court was not to issue such directions when the matter was pending investigation by the police or when the matter was pending before the appropriate court after the charge-sheet had been filed. To sum up, his submission was as under:
a) There should not be any direction for prosecution of the case as that would affect fair trial and right of the accused inasmuch as if such direction is issued by a superior court, the trial court of competent jurisdiction would be influenced by such direction with lurking impression at the back of mind that the superior court has found some substance in the charge against the accused and that would not only affect the rights of the accused but fair trial of the case as well.
b) When the matter was pending investigation by the police, the court would be slow in giving directions as the investigation was the demand of police authorities.
c) Likewise, once the charge-sheet was filed in the court of law or appropriate authority had taken the decision one way or the other in a matter, or when show cause notice was issued for eliciting further information and was pending consideration at the level of appropriate authority, the court should not interfere in a Public Interest Litigation and issue any directions in the matter which was seized by the aforesaid authorities.
9. In respect of aforesaid propositions, strong reliance was placed on the following judgments:
1. Emperor v. Khwaja Nazir Ahmad .
"In their Lordships' opinion however, the more serious aspect of the case is to be found I the resultant interference by the court with the duties of the police. Just as it is essential that every one accused of a crime should have free access to a Court of Justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with police in matters which are within their province and into which the law imposes upon them the duty of enquiry. In India as has been shown there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court. The functions of the judiciary and the police are complementary not overlapping and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Court to intervene in an appropriate case when moved under Section 491, Criminal P.C., to give directions in the nature of habeas corpus. In such a case as the present, however, the Court's functions being when a charge is preferred before it and not until then..."
2. Abhinandan Jha and Ors. v. Dinesh Mishra .
"The question can also be considered from another point of view. Supposing the police send a report, viz., a charge-sheet, under Section 170 of the Code. As we have already pointed out, the Magistrate is not bound to accept, that report, when he considers the matter judicially. But, can he differ from the police and call upon them to submit a final report, under Section 169? In our opinion, the Magistrate has no such power. If he has no such power, in law, it also follows that the Magistrate has no power to direct the police to submit a charge-sheet when the police have submitted a final report that no case is made out for sending the accused for trial. The functions of the Magistracy and the the police, are entirely different, and though, in the circumstances mentioned earlier, the Magistrate may or may not accept the report, and take suitable action, according to law, he cannot certainly infringe upon the jurisdiction of the police, by compelling them to change their opinion, so as to accord with his view.
Therefore, to conclude, there is no power, expressly or impliedly conferred, under the Code, on a Magistrate to call upon the police to submit a charge-sheet, when they have sent a report under Section 169 of the Code, that there is no case made out for sending up an accused for trial."
3. Director, Central Bureau of Investigation and Ors. v. 'Niyamavedi' represented by its Member K. Nandini, Adv. and Ors., "...The Division Bench, therefore, should have refrained from disclosing in its order, material contained in these diaries and statements, especially when the investigation in the very case was in progress. It should also have refrained from making any comments on the manner in which investigation was being conducted by the CBI, looking to the fact that the investigation was far from complete. Any observations which may amount to interference in the investigation, should not be made. Ordinarily the Court should refrain from interfering at a premature stage of the investigation as that may derail the investigation and demoralize the investigation. Of late, the tendency to interfere in the investigation is on the increase and courts should be wary of its possible consequences. We say no more. However, we clarify that certain directions given to the Director or CBI in regard to the investigation matters do not meet with our approval and may be ignored. In short the adverse comments against the CBI were, to say the least, premature and could have been avoided. Ignoring the innuendoes the court was, however, right in expressing a general view that the investigation agency is expected to act in an efficient and vigilant manner without being pressurized and in dismissing the appeal."
4. Vineet Narian and Ors. v. Union of India and Anr. .
"In this proceeding, we are not concerned with the merits of the accusations or the individuals alleged to be involved, but only with the performance of the legal duty by the government agencies to fairly, properly and fully investigate into every such accusation against every person, and to take the logical final action in accordance with law.
In case of persons against whom a prima facie case is made out and a charge-sheet is filed in the competent court, it is that court which will then deal with that case on merits, in accordance with law.
However, if in respect of any such person the final report are full investigation is that no prima facie case is made out to proceed further, so that the case must be closed against him, that report must be promptly submitted to this Court for its satisfaction that the authorities concerned have not failed to perform their legal obligations and have reasonably come to such conclusion. No such report having been submitted by the CBI or any other agency till now in this Court, action on such a report by this Court would be considered, if and when that occasion arises. We also direct that no settlement should be arrived at nor any offence compounded by any authority without prior leave of this Court."
5. Anukul Chandra Pradhan v. Union of India and Ors. .
"A note of caution may be appropriate. No occasion should arise for an impression that the publicity attaching to these matters has tended to dilute the emphasis on the essentials of a fair trial and the basic principles of jurisprudence including the presumption of innocence of the accused unless found guilty at the end of the trial. This requirement, undoubtedly has to be kept in view during the entire trial. It is reiterated, that any observation made by this Court for the purpose of the proceedings pending here has no bearing on the merits of the accusation, and is not to influence the trial in any manner. Care must be taken to ensure that the credibility of the judicial process is not undermined in any manner."
6. Union of India and Ors. v. Sushil Kumar Modi and Ors. .
"According to Code of Criminal Procedure, 1973 the formation of the opinion as to whether or not there is a case to place the accused for trial is that of the police officer making the investigation and the final step in the investigation is to be taken only by the police and by no other authority, see Abhinandan Jha v. Dinesh Mishra, . This must be borne in mind as also that the scope and purpose of a proceeding like the present is to ensure a proper and faithful performance of its duty by the police officer by resort to the prerogative writ of mandamus."
d) His further submission was that even in a case where no action was taken by the police, the appropriate remedy of the complainant was to file a complaint under Section 220 of Cr.P.C. before the Magistrate having jurisdiction to take cognizance of the offences and the complainant was not entitled to approach the High Court by filing a writ petition seeking a direction to conduct an investigation by the CBI. In support of this submission, he relied upon the judgment in the case of All India Institute of Medical Sciences Employees' Union (Regd.) through its President v. Union of India and Ors. .
e) Further submission of Mr. Desai was that the petitioner had based his petition on news items appearing in various news items and this court should not take cognizance of any such news item as per which well established principle of law. In support of this proposition, reliance was place on the judgment of the Apex Court in the case of Samant N. Balakrishna etc. v. George Fernandez and Ors. (Para 47).
"...A news item without any further proof of what had actually happened through witnesses is of no value. It is at best a second-hand secondary evidence. It is well known that reporters collect information and pass it on to the editor who edits the news item and then publishes it. In this process the truth might get perverted or garbled. Such news items cannot be said to prove themselves although they may be taken into account with other evidence if the other evidence is forcible...."
10. He also relied upon the judgment of the Supreme Court in the case of Laxmi Raj Shetty and Anr. v. State of Tamil Nadu and particularly the following observations of the court:
"As to the first, the accused Laxmi Raj Shetty was entitled to tender the newspaper report from the Indian Express of the 29th and the regional newspapers of the 30th along with his statement under Section 313 of the Code of Criminal Procedure, 1973. Both the accused at the stage of their defense in denial of the charge had summoned the editors of Tamil dailies Malai Murasu and Makkal Kural and the news reporters of the Indian Express and Dina Thanthi to prove the contents of the facts stated in the news item but they dispensed with their examination on the date fixed for the defense evidence. We cannot take judicial notice of the facts stated in a news item being in the nature of hearsay secondary evidence, unless proved by evidence aliunde. A report in a newspaper is only hearsay evidence. A newspaper is not one of the documents referred to in Section 78(2) of the Evidence Act, 1872 by which an allegation of fact can be proved. The presumption of genuineness attached under Section 81 of the Evidence Act to a newspaper report cannot be treated as proof of the facts reported therein."
f) Another preliminary submission of Mr. Desai was that the writ petition itself was barred by principles of res judicata. In the aid of this contention, the learned senior counsel pressed into service the order dated 5th October, 1999 passed by this court in CWP No. 337/99 dismissing the said writ petition which was also in the nature of Public Interest Litigation and issue of purchase of shares by the Unit Trust of India was involved in that case as well.
11. Apart from the aforesaid objections taken to the maintainability of the writ petition, the learned senior counsel also referred to the progress in each case on the basis of which it was argued that the writ petition be given quietus without passing any further directions thereon inasmuch as issues were seized of by the competent authorities and were getting appropriate attention at the levels of such authorities.
12. While we have extracted above the portions from the aforesaid judgments as highlighted by learned counsel, it would also be opportune to reproduce from some of these judgments other relevant excerpts:
1. Anukul Chandra Pradhan v. Union of India and Ors. .
"We may also observe, that the court concerned dealing with the above matters has to bear in mind that utmost expedition I the trial and its early conclusion is necessary for the ends of justice and credibility of the judicial process. Unless prevented by any dilatory tactics of the accused, all trials of this kind involving public men should be concluded most expeditiously, preferably within three months of commencement of the trial. This is also the requirement of speedy trial read into Article 21."
2. Vineet Narain and Ors. v. Union of India and Anr. .
"We may add that on account of the great public interest involved in this matter, the CBI and other government agencies must expedite their action to complete the task and prevent pendency of this matter beyond the period necessary. It is needless to observe that the results achieved so far do not math the available time and opportunity for a full investigation ever since the matter came to light. It is of utmost national significance that no further time is lost in completion of the task."
3. Union of India and Ors. v. Sushil Kumar Modi and Ors. .
"The true purpose and scope of a proceeding of this nature clearly emerges from the above-quoted orders passed in the cases pending in this Court. Some of the orders are indicated above. The required guidance to the CBI and other government agencies as well as to the courts' monitoring such investigation is available from the same. The delicate task of ensuring implementation of the rule of law by requiring proper performance of its duty by the CBI and other government agencies, while taking care to avoid the likelihood of any prejudice to the accused at the ensuing trial because of any observation made on the merits of the accusation in the present proceeding, has to be performed with the dexterity and tact needed in the conduct of such a proceeding. We have no doubt that all concerned, including the High Court, would bear in mind this aspect to prevent any reasonable impression of erosion in the credibility of the judicial process."
13. These are the principles laid down by the Hon'ble Supreme Court in various judgments dealing with ambit and scope of the writ petitions filed in public interest. We have to obviously deal with the present writ petition keeping in view the aforesaid principles.
14. Keeping in view the aforesaid guide-lines in mind as laid down by the Supreme Court, it is now stage to examine the issues raised by the petitioner.
I. RE: ECB Proceeds:
15. Admittedly the entire amount of ECB proceeds including interest accrued thereon stand repatriated to this country. As per the petitioner, the total amount is 1302.57 million US dollars and 173.02 million pounds. The grievance of the petitioner which now remains is that no action has been taken so far as to penalize the erring persons for stupendous infraction of the provisions of the FERA. He referred to the Minutes of Eights High Level Committee Meeting of monitoring of offences for the financial year 1998-99 held on 17th February, 1999 wherein the proposal of RIL for pre-payment of their outstanding ECBs by utilizing ECB proceeds parked abroad was discussed. As per these minutes it was admitted that the ECB proceeds were being parked abroad and that request of RIL for retention of these proceeds abroad had been rejected by the Reserve Bank of India vide its letter dated 30th November, 1998 as the company had not brought proceeds of the said ECB into the country even after the expiry of stipulated period of thirty days allowed to them by the Reserve Bank of India from 30th November, 1998. These minutes also disclose that the ECB had not been utilized for the intended end-use, which was pre-requisite for withholding tax exemption and therefore the RIL would not be entitled for withholding tax exemption under the Income Tax Act, 1961. The minutes also disclose that non-compliance of the provisions of the extant ECB/RBI guide-lines could also have implication in terms of FERA and the Reserve Bank of India was asked to take appropriate action in this regard. It was submitted that inspite of this the Reserve Bank of India had opined on 23rd April, 2001 that the irregularities committed by the RIL may not be construed as warranting any action under FERA or FEMA.
16. It may be mentioned that in the additional affidavit dated 20th April. 2001 sworn by Mr. V.K. Aggarwal, Assistant Director in the office of Enforcement Directorate, this issue is dealt with by stating as under:
"Since the ECB proceeds have been repatriated by RIL, hence no further investigation is required in the matter.
However letter has been sent to RBI on 8.3.2001 and followed by reminder on 10.4.2001 for furnishing the details as follows:
(i) Copies of letters granting permission to RIL by the Govt. of India for raising ECB abroad along with registration certificate of RBI.
(ii) Copies of letters from RBI to RIL granting them permission to retain the ECB proceeds abroad beyond the stipulated period.
It is respectfully submitted that all necessary steps are being taken by the answering respondent to complete the investigation and ensure that necessary action in law is taken at the earliest possible."
17. Thereafter, another additional affidavit dated 6th July, 2001 sworn by the same official was filed updating the position in the following manner:
"RBI vide letter dated 23.4.2001 furnished the documents called for and also opined that the irregularities committed by the company in retaining funds abroad beyond the stipulated period may not be construed as warranting action Under FERA, 1973/FEMA, 1999.
In order to verify that no contravention under FERA has been committed, RIL have been asked to inform the purpose for raising ECB abroad and its utilization for the averred purpose in June, 2001. RIL have requested for sometime to reply Vide letter dated 19.6.2001.
It is respectfully submitted that all necessary steps have been taken by the answering respondent to complete the investigations and ensure that necessary action in law is taken at the earliest possible."
18. Yet another affidavit dated 9th August, 2001 was filed by Mr. P.K. Bharti, Assistant Director, Enforcement Directorate which carriers the matter further in the following manner:
"In order to verify that no contravention under FERA has been committed, RIL have been asked to inform the purpose for raising ECB abroad and its utilization for the averred purpose in June. 2001. RIL have requested for sometime to reply vide letter dated 19.6.2001. RIL has submitted letter dated 1st August, 2001 received by this office on 7.8.2001 which is under scrutiny."
19. The stand taken in these affidavits would show that notwithstanding Reserve Bank of India's opinion dated 23rd April, 2001 the matter is receiving adequate attention at the hands of the Enforcement Directorate. However, the last affidavit was dated 9th August, 2001 as per which the matter was under scrutiny. Therefore, the only direction which can be given at this stage is that the Enforcement Directorate should complete the investigation without any further delay inasmuch as sufficient time has already elapsed in the matter. The enforcement Directorate is therefore to take final view in the matter within a period of two months from the date of receipt of copy of this order.
II. RE: Import of Purified Terepthallc Acid worth about Rs. 180 crores:
Admittedly the matter is pending in the court of Metropolitan Magistrate, Mumbai. The only grievance of the petitioner is that the cases filed against the RIL have been adjourned by the court atleast 16 times. Since the matter is pending before the competent court of law, it would not be appropriate to issue any directions in a pending matter that too in a petition under Article 226 of the constitution of India and further when the matter is pending before the Metropolitan Magistrate under the superintending jurisdiction of Mumbai High Court.
20. However, as far as alleged involvement of five banks is concerned, as per the affidavit dated 9th August, 2001 of Mr. P.K. Bharti, Assistant Director, the investigation had started way back in April, 1996 on the basis of inquiry report received from the CBI regarding ante-dating of letters of credit opened for import of PTA during the last week of May, 1985 and the matter is at show cause stage except in the case of State Bank of India where the Directorate is of the opinion that no further investigation is required as the letter of credit has been calcelled unutilised. The grievance of the petitioner is therefore justified to the extent that the matter is not proceeding with the pace it is expected in such a case. The alleged irregularity is of May, 1985. The CBI gave report almost 11 years thereafter, i.e., in April, 1996. It is almost six years when the investigation started thereafter and 17 years have passed since the commission of alleged irregularity. Therefore, abnormal delay has taken place and even as of today in some cases only show cause notices had been issued and in some cases the matter is pending consideration for issuance of show cause notices. Many times delayed action may be fatal for so many reasons and it would not be appropriate at this stage to spell out the same. Suffice is to state that the matter requires immediate decision and appropriate action for prosecuting the erring officials if the Enforcement Directorate is convinced about the involvement of some of the Banks so far and their officials in the alleged offences. The Enforcement Directorate is accordingly directed to complete the process within two months from the date of receipt of copy of this order.
III. RE: 1993 Export of Masur Dal in Substitution of P.O. Yarn:
21. Here again, admittedly the criminal cases are pending in the competent court of law at Mumbai and the grievance of the petitioner now is against tardy progress of the cases. Therefore, it would not be appropriate to issue any directions in a pending matter that too in a petition under Article 226 of the Constitution of India and further when the matter is pending before the MM, Mumbai.
IV. RE: Purchase of RIL shares of Rs. 944 crores by UTI:
22. The complaint of the petitioner is that there was a conspiracy in purchase of RIL's shares of Rs. 944 crores by the Unit Trust of India as these shares were purchased at inflated rates.
23. In its reply filed by the CBI, the position in respect to the aforesaid purchase is given in the following manner:
"A self Contained Note was sent to the Ministry of Finance by CBI on 24.5.1996 regarding alleged irregularities in the placement of funds to the tune of Rs. 945 crores by UTI, LIC and GIC in Reliance equities. Concurrence was sought from the Ministry of Finance to investigate the matter further. In response thereto, Ministry of Finance vide their letter dated 24.12.1996 stated that registration of a Regular Case for further investigation did not seem to be warranted. The Ministry of Finance also enclosed an Audit Report on the RIL investments made by UTI, the comments of UTI on the Audit Report, SEBI's comments thereon and the response of UTI and LIC-GIC to the allegations made in the Self Contained Note.
The information contained in the said Note was re-examined in the CBI in the light of the Ministry's response and the various other documents received therewith. The matter was also taken up with the concerned Regulatory Authorities, namely, SEBI and the Department of Company Affairs, who categorically informed that neither any SEBI guidelines had been violated in these transactions nor had any violation of Companies Act taken place. Further, Chief Vigilance Officer of UTI was requested to probe the role of their officials and advise us if there was any negligence, misrepresentation of facts during the decision making process leading to these investments. The CBI was informed that the investments in Reliance equity by the UTI had been scrutinised by three independent Auditors and all of them had reported that no adverse role of any official of the UTI had come to notice. The decision was taken at the highest level by the Board of Trustees after due process. The other two financial institutes namely, LIC and GIC had only followed the lead of major investors namely the UTI.
In view of the above, intervention of the CBI has not been considered necessary at this stage.
It is, not true that Sh. Y.P. Singh was transferred out of CBI due to this matter. He was repatriated to his parent cadre for different reasons. The matter was adjudicated by the CAT, Mumbai and all allegations of malafide against the CBI/Govt. were rejected. The W.P. filed against this decision is pending before the Hon'ble High Court, Bombay."
24. This court had summoned the file of CBI in respect of self contained note dated 24th September, 1996 to which reference has been made by the CBI in the aforesaid reply dated 16th May, 2000. It was directed that file be produced in a sealed cover. On the next date i.e. 20th September, 2001 the file was produced before the court. The CBI was directed to submit the status report on the aspects highlighted in court's order dated 24th August, 2001 regarding the self contained note dated 24the May, 1996. A perusal thereof thereof reveals that the matter was examined by the CBI and in the process the report/views of the Chief Vigilance Officer, Ministry of Finance, Joint Secretary, Ministry of Law, Justice and Company Affairs, SEBI, Director, Department of Company Affairs were also taken and ultimately the CBI opined that its intervention was not considered necessary.
25. At this stage, it may also be mentioned that Mr. Ashok H. Desai, learned senior counsel appearing for the RIL submitted that CWP No. 337/99 which was also a petition filed in public interest for enquiry into the working of the Unit Trust of India was dismissed by this court vide order dated 5th October, 1999 and he relied upon the following observations made in the said order:
"VII being an investment company has to invest. One of the avenues of investments is in shares. Market decisions based on market positions at time of purchase cannot be termed as fraudulent only because the value of the shares purchased goes down. It is well know that for the past few years the share market has been depressed. It is also well know that at one stage shares of Reliance were very much in demand and were considered to be a good investment. In our view except for making vague allegations there is absolutely no proof that there is anything wrong in the transactions of purchase of shares of Reliance and/or in the working of VII. There is no material to show that any fraud is being perpetrated on anyone."
26. Mr. Desai also referred to that portion of the affidavit filed on behalf of RIL wherein the position in respect of purchase of these shares of RIL to financial institutions including the Unit Trust of India has been explained. It was submitted that the shares were allotted in accordance with the then prevailing guide-lines issued by the Securities and Exchange Board of India (SEBI). The shares when sold at the relevant time the prevailing rate was Rs. 385/- per share. It was submitted that the value of those shares, after the purchase, had doubled and the Unit Trust of India had made huge profits in the process. The share market being volatile and fluctuating, there could not be any guarantee to the effect that the prices of the share would remain firm or would always have upward trend only. The lock-in period was as per the SEBI norms. Therefore, at the time when the purchase was made it was in normal course of business and there was nothing wrong with the same.
27. Keeping in view the aforesaid aspects coupled with the fact that the matter has been examined by the CBI as well as the Ministry of Finance and after such detailed examination the authorities have decided to close the matter, we don not deem it appropriate in the facts and circumstances of the case to order any further investigation. This is more so when a petition raising similar question i.e. CWP No. 337/99 has also been dismissed by this court earlier.
V. RE: Alleged alteration of Rs. 70.30 lacs share transfer deeds by RIL rendering them defective:
28. As per the statement produced by the petitioner himself, these allegations are subject matter of 29 criminal cases which are filed by the Registrar of Companies, Maharashtra. The cases are pending before the Additional Chief Metropolitan Magistrate, Mumbai. Therefore, for the reasons stated above, in respect of other such cases pending before the court of Metropolitan Magistrate, Mumbai, it would not be appropriate to pass any further directions in this writ petition.
29. Before parting with, we may point out that the learned senior counsel for the RIL had raised the question of territorial jurisdiction of this court as well on the ground that almost all the irregularities were allegedly committed in Mumbai, most of the parties were in Mumbai, investigations had taken place by the authorities in Mumbai and even where the cases were filed, the same were filed in Mumbai. There may be substance in the plea raised by the learned senior counsel. However, since this writ petition has been pending in this court since 1999 and as the court had taken cognizance of this writ petition and passed various orders from time to time and the matter was finally heard at length, it was appropriate to deal with the writ petition on merits. It is clarified that merely because the writ petition is entertained, it is not to suggest that we have decided the question of territorial jurisdiction of this court.
30. The writ petition stands disposed of without any order as to costs.