1999 (12) TMI 885 - SC - Indian Laws

Summary

Issues Involved:
1. Investigation into allegations and criminal proceedings.
2. Validity of the power project agreement and bidding process.
3. Prima facie sufficiency of evidence for further investigation.
4. Financial and technical capability of project sponsors.
5. Approval process and governmental scrutiny.
6. Allegations of bribery and corruption.
7. Judicial review of techno-economic clearances.

Detailed Analysis:

1. Investigation into allegations and criminal proceedings:
The High Court directed the respondent State to register an FIR with the CBI under the Delhi Special Police Establishment Act for various cognizable offences without naming any accused. The investigation was to be conducted under the supervision of a Deputy Director General of the CBI, commenced without delay, completed within a year, and monthly progress reports submitted to the court. The court also mandated cooperation from all parties and allowed the petitioners to be associated with the investigation.

2. Validity of the power project agreement and bidding process:
The petition sought to set aside the power project agreement between Karnataka Electricity Board (KEB) and Mangalore Power Corporation (MPC) and to reallocate the project through an open bidding process. The High Court granted some reliefs, leading to appeals by both petitioners and respondents.

3. Prima facie sufficiency of evidence for further investigation:
The High Court observed that the facts and documents presented warranted further investigation. It noted that the allegations and circumstances were not frivolous or baseless and required a probe to ascertain the truth, especially regarding the expenditure of 191 million Hong Kong dollars and potential kickbacks related to the power project.

4. Financial and technical capability of project sponsors:
The petitioners questioned the financial and technical capability of the project sponsors. The Government of India had considered these aspects at various stages, granting approvals and amendments. The court found that the approvals and financial structures were scrutinized and could not be challenged collaterally in these proceedings.

5. Approval process and governmental scrutiny:
The project underwent multiple reviews and approvals by different governments and agencies, including the Central Electricity Authority and the Ministry of Power. The court noted that the project had been scrutinized under three different governments and various statutory and other agencies, which validated the process.

6. Allegations of bribery and corruption:
The allegations of bribery, particularly against Mr. Deve Gowda, were based on dubious material. The court found no foundation for these claims, noting that the balance sheet and reports did not substantiate the allegations. The court emphasized that criminal investigations require reasonable suspicion based on credible evidence, not mere conjecture or suspicion.

7. Judicial review of techno-economic clearances:
The court highlighted that techno-economic clearances and project approvals by the Central Electricity Authority and other agencies could not be re-examined by the courts. The detailed project report and objections were thoroughly reviewed, and the clearances granted were based on established guidelines.

Conclusion:
The Supreme Court set aside the High Court's order, stating that the investigation ordered was based on insufficient material and mere suspicion. The court emphasized that criminal investigations must be grounded in reasonable suspicion and credible evidence. The order does not preclude future actions based on appropriate material presented to authorized agencies. The appeal by the other side was dismissed, and parties were directed to bear their own costs.