2015 (7) TMI 1430 - HC - Indian Laws

Corruption and amassing of uncounted money - seeking reference to the Central Bureau of Investigation (CBI) to take up, enquire and register First Information Reports and investigate into the dealings of the ninth respondent - ninth respondent was prior to his suspension, Chief Engineer in New Okhla Industrial Development Authority NOIDA, Greater Noida Industrial Development Authority, Greater NOIDA and Yamuna Expressway Authority - HELD THAT - In the present case, an important aspect of the matter which merits emphasis is that initially on 13 June 2012, an FIR was lodged in Case Crime No. 371 of 2012 under Sections 409, 420, 466, 467, 469, 471 and 120-B of the Penal Code and under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 against the ninth respondent and one Ramendra, the then Project Engineer and two construction companies. The allegation in the FIR related to the disbursement of an amount of Rs. 954 crores of various departments of Noida in respect of which agreement bonds were executed within a span of eight days. There were various other allegations in regard to the carrying out of work even before the finalization of tenders resulting in a loss to NOIDA. The investigation was transferred by the State Government to the CBCID at the behest of a partner of a construction company which was one of the co-accused on 3 November 2012, following the receipt of a request on 22 October 2012. The essence of the allegation is that the ninth respondent has been able to use his personal proximity in the corridors of power with successive governments in State by indulging in corruption, amassing wealth for conferring favours on himself, the members of his family and business associates. The ninth respondent has, it is alleged, been able to shield himself due to his proximity with the corridors of power both in the previous government and the present government in the State of Uttar Pradesh. There are several reasons why the submission of the State, that based on the constitution of a Commission of Inquiry further action be deferred or held in abeyance, cannot be accepted. Firstly, the terms of reference of the Commission of Inquiry are evidently confined to the ninth respondent and ninth respondent alone. The Commission of Inquiry would have no jurisdiction to enquire into wider allegations of the misuse of power or to investigate into the interrelationship of the ninth respondent with other persons in respect of whom there is no reference to the Commission. Secondly, the report of the Commission may or may not be accepted or acted upon by the State Government. A non-binding report of a Commission of Inquiry is no substitute for a proper, fair and objective investigation into alleged criminal offences - There is a serious case to be probed on whether as alleged the activities of the ninth respondent have benefactors in high places in the State who have been associated through their close relatives and associates with the business dealings of the ninth respondent and his family. In our view, having due regard to the admittedly complex nature of the case, the wide ramifications involving corruption by persons in public offices and the gravity of the allegations required to be probed, a fit and proper case has been made out for investigation by the CBI. The Central Bureau of Investigation shall conduct an investigation into all allegations of corruption and amassing of uncounted money by the ninth respondent and in regard to all transactions, persons and entities connected thereto - Petition disposed off.

Summary

Issues Involved:
1. Request for CBI investigation into the dealings of the ninth respondent.
2. Allegations of corruption and misconduct against the ninth respondent.
3. State Government's response to the Union Government's request for CBI investigation.
4. Validity of the State Government's Commission of Inquiry.
5. Jurisdiction and authority of the High Court under Article 226 of the Constitution.
6. Compliance with the Supreme Court's order regarding the SIT on black money.
7. Justification for transferring the investigation to CBI.

Detailed Analysis:

1. Request for CBI Investigation into the Dealings of the Ninth Respondent:
The proceedings were initiated by a social activist seeking a CBI investigation into the dealings of the ninth respondent, who was the Chief Engineer in NOIDA, Greater NOIDA, and Yamuna Expressway Authority. The ninth respondent was accused of corruption and misconduct, leading to the registration of an FIR under various sections of the Indian Penal Code and the Prevention of Corruption Act. The petitioner argued that the investigation should be transferred to the CBI due to the alleged bias and apathy of the State Government towards the ninth respondent.

2. Allegations of Corruption and Misconduct Against the Ninth Respondent:
The ninth respondent faced allegations of executing agreement bonds for Rs. 954.38 crores in favor of contractors within a short period, causing a huge revenue loss to NOIDA. Additionally, it was alleged that underground wiring work commenced before finalizing the tender document. The investigation was initially handled by the CBCID, which submitted a final report closing the case. However, income tax raids conducted later revealed substantial assets and documents suggesting corruption and unaccounted wealth.

3. State Government's Response to the Union Government's Request for CBI Investigation:
The Union Government, following instructions from the SIT on black money, requested the State Government to hand over relevant material to the CBI for investigation. The State Government responded by stating that a Commission of Inquiry had been constituted to investigate the allegations against the ninth respondent and that further action would depend on the report of the Commission and the Court's directions.

4. Validity of the State Government's Commission of Inquiry:
The State Government constituted a Commission of Inquiry headed by a former Judge to investigate the ninth respondent's promotions, grant of contracts, and allegations of corruption. However, the Court found that the Commission's terms of reference were limited and would not suffice for a comprehensive investigation into the broader allegations of corruption and misuse of power involving multiple individuals and entities.

5. Jurisdiction and Authority of the High Court under Article 226 of the Constitution:
The Court emphasized that its power under Article 226 to direct a CBI investigation should be exercised sparingly and with caution. However, in exceptional situations where credibility and confidence in the investigation are at stake, or where the case has national or international ramifications, the Court can direct a CBI investigation. The Court found that the present case warranted such an investigation due to the gravity and complexity of the allegations.

6. Compliance with the Supreme Court's Order Regarding the SIT on Black Money:
The Supreme Court's judgment in Ram Jethmalani vs. Union of India mandated the formation of an SIT to investigate unaccounted money and required all governmental authorities to cooperate with the SIT. The Union Government's request to the State Government for CBI investigation was in line with the SIT's instructions. The Court held that the State Government was obligated to comply with the Supreme Court's order and facilitate the CBI investigation.

7. Justification for Transferring the Investigation to CBI:
The Court concluded that the State Government's reliance on the Commission of Inquiry was insufficient to address the serious allegations of corruption. The Court noted that the ninth respondent's alleged proximity to political powers and the scale of corruption required an independent and credible investigation by the CBI. The Court directed the CBI to investigate all allegations of corruption and unaccounted money involving the ninth respondent and related entities.

Conclusion:
The Court allowed the petition and directed the CBI to conduct an investigation into the allegations of corruption and amassing of unaccounted money by the ninth respondent. The petition was disposed of with no order as to costs.