2011 (8) TMI 1321 - HC - Money Laundering

Taken-up Writ Petition - Misappropriation of public property - Seeking investigation by CBI - illegal gratification for exchange of official favours from the then Chief Minister - validity or genuineness of every investment and every business venture and to compare and verify as to whether the same is linked with any corresponding Quid Pro Quo benefit received by such investor from the State of Andhra Pradesh - seeking relief to call for and examine the records connected with three G.Os - HELD THAT - Prima facie, it emerges from the record forming part of the writ petitions including pleadings of the parties that from May, 2004 onwards, respondent No.52 floated number of companies wherein Quid Pro Quo investments have been made out of the benefits received by the investors / beneficiaries from the decisions of the State Government in various forms like SEZs, irrigation contracts, relaxation/permission for real estate ventures, mines etc. besides payment of huge premium amounts paid in the shares and invested in the companies by such beneficiaries and the money so paid is nothing but corrupt money attracting Section 3 of the Prevention of Money Laundering Act, 2002. The investigation by the Income Tax authorities with respect to assessment orders of M/s. Jagathi Publications for the year 2008-09 shows huge unexplained cash credit. Similarly, huge escalated face value of shares to the extent of 35 times also was not accepted by the Income Tax authorities and respondent No.52 is directly or indirectly connected with some of the companies which are showing phenomenal growth and these facts make it necessary to ascertain the role of individuals/firms/public servants in the group companies of respondent No.52. keeping in view the scope of the public interest litigation as settled by the decisions of the Supreme Court referred to above, we have confined ourselves to the considerations of prima facie satisfaction and regard being had to the manner in which the investments in the group companies of respondent No.52 have been made vis- -vis the benefits and official favours received by the investors from the Government of Andhra Pradesh, prima facie we are satisfied that there are violations of the provisions of the Indian Penal Code, Prevention of Corruption Act, Prevention of Money Laundering Act apart from criminal conspiracies and commission of other related offences involving huge magnitude of investment by local and foreign companies, some located in tax haven countries, for which registration of a crime and investigation to remedy the public interest which has suffered, is just and necessary by a well-equipped and specialized agency, having expertise to handle such situations and has the credibility. Analysing as such, the most appropriate agency would be the CBI. We have also made it clear in the judgment rendered in Writ Petition that the preliminary report was resealed after perusal and it shall remain sealed, among other things in view of the contention of some of the appearing learned counsel for the respondents that in case report of the CBI becomes public, their clients may have to face condemnation in the eyes of the public by unwarranted media publicity even before completion of the investigation. For the reasons mentioned in this paragraph, we have resealed the report. Accordingly, Writ Petition are disposed of directing the Central Bureau of Investigation to register a crime and investigate into the accusations indicated hereinabove and other aspects relevant thereto and take the investigation to its logical end in accordance with law. So far as the deficiencies in the affidavit and verification of the affidavit and the bonafides required of a petitioner, who approaches the Court in public interest, are concerned, the objections raised by the learned senior counsel appear to be tenable. The petitioner himself states in para 10 of the affidavit that he is aware of Taken-up Writ Petition pending before this Court. The basic contentions raised by him are already covered by the material produced in Taken-up Writ Petition as well as connected Writ Petition. This writ petition is, therefore, only a reiteration of the self-same pleas and is based upon the downloaded documents from the internet. The present writ petition, therefore, does not satisfy the requirements as per rules of this Court for a public interest litigation and as such, is not entertainable, as the petitioner has failed to explain and substantiate the source and authenticity of the information relied upon. Even otherwise, the aspects sought to be contended in this writ petition are already under consideration in Takenup Writ Petition. We, therefore, decline to entertain Writ Petition No.6979 of 2011 and it is accordingly dismissed

Summary

Issues Involved:
1. Misappropriation of public property and quid pro quo investments.
2. Maintainability of the writ petitions.
3. Allegations of political vendetta and mala fide intentions.
4. Requirement of a thorough investigation by a central agency.
5. Compliance with principles of natural justice.
6. Specific allegations against various respondents and their defenses.

Detailed Analysis:

1. Misappropriation of Public Property and Quid Pro Quo Investments:
The petitioner, an MLA, alleged that the late Chief Minister of Andhra Pradesh misappropriated public property by extending benefits like land allotments, mineral rights, and SEZ rights to various corporations and individuals. These beneficiaries allegedly made quid pro quo investments in the businesses of the Chief Minister's son, resulting in a significant increase in his wealth. The court noted that prima facie evidence suggested that these investments were linked to official favors, indicating a need for a thorough investigation.

2. Maintainability of the Writ Petitions:
The respondents opposed the maintainability of the writ petitions, arguing that they were politically motivated and lacked substance. However, the court held that the petitions involved substantial public interest and were maintainable. The court emphasized that the allegations of corruption and misappropriation of public property warranted judicial scrutiny.

3. Allegations of Political Vendetta and Mala Fide Intentions:
The respondents contended that the petitions were filed out of political vendetta and were aimed at gaining political advantage. The court acknowledged the political background of the petitioners but stated that the seriousness of the allegations and the public interest involved justified the continuation of the proceedings. The court appointed an Amicus Curiae to assist in the matter, ensuring that the political motivations of the petitioners did not influence the judicial process.

4. Requirement of a Thorough Investigation by a Central Agency:
The court found that the allegations involved violations of the Indian Penal Code, Prevention of Corruption Act, and Prevention of Money Laundering Act, among others. Given the magnitude of the alleged corruption and the involvement of local and foreign companies, the court concluded that a specialized agency like the CBI was best suited to conduct a thorough investigation. The court directed the CBI to register a crime and investigate the allegations to their logical end.

5. Compliance with Principles of Natural Justice:
The respondents argued that they should be given access to the CBI's preliminary report to respond to it. The court clarified that it had not relied on the preliminary report for its decision and had resealed it to prevent unwarranted media publicity. The court assured that principles of natural justice would be adhered to during the investigation.

6. Specific Allegations Against Various Respondents and Their Defenses:
Several respondents, including corporations and individuals, were accused of receiving benefits from the state in return for investments in the businesses of the Chief Minister's son. The respondents denied these allegations, claiming that their investments were legitimate business decisions. The court noted that it was not feasible to examine each allegation in detail within the scope of the writ petition and emphasized the need for a detailed investigation by the CBI.

Separate Judgment for Writ Petition No. 6979 of 2011:
An advocate filed this petition seeking an investigation into specific government orders favoring certain companies. The court found deficiencies in the petition and noted that the issues raised were already covered in the other writ petitions. Consequently, the court dismissed Writ Petition No. 6979 of 2011.

Conclusion:
The court directed the CBI to register a crime and conduct a thorough investigation into the allegations of misappropriation of public property and quid pro quo investments. The court emphasized the importance of transparency and probity in governance and underscored the need for a specialized agency to handle the investigation. The court dismissed Writ Petition No. 6979 of 2011 due to its deficiencies and overlap with other petitions.