Govt urges SC not to give direct relief in scam cases

NEW DELHI: The Centre on July 6 filed an affidavit in the Supreme Court suggesting there was a trend of people accused in highvalue economic offences approaching the top court directly — instead of an appropriate court — to get protection from arrest, and that in 44 such instances, the court had granted relief to them, affecting the ability of investigative agencies to go about their probes into these cases.

It wanted the court to address the issue, vacate the interim relief orders, and ask the petitioners to follow the prescribed legal route by appearing before lower courts.

The affidavit was filed in a matter pertaining to Bhushan Steel Ltd, involving the company’s former CFO Nittin Johari, and may be taken up by a bench headed by CJI SA Bobde on July 24.

The list of cases appended in the affidavit include the Bhushan Steel Ltd case involving an

amount of ~20,000 crore, a bank fraud case against Nilesh Parekh of Shree Ganesh Jewellers worth ~2,762 crore, a case against Vikram Kothari of Rotomac worth ~3,770 crore. Solicitor General Tushar Mehta brought up the issue on Wednesday, speaking of how agencies are finding it difficult to do their work because of the accused often approaching SC for relief -- and getting it.

Mehta referred to around 60 cases under PMLA, Companies Act and GST Act, etc, including the case against former finance minister P Chidambaram. To be sure, Chidambaram’s case may be different. The former finance minister first moved the Delhi HC for bail. After the court rejected it, he appealed to the Supreme Court. He adopted the same route for anticipatory bail.

GOVT ASKS COURT TO VACATE RELIEF ORDERS, DIRECT PETITIONERS TO FOLLOW PRESCRIBED LEGAL ROUTE, THROUGH THE LOWER COURTS

NEWDELHI:The Union government on July 6 filed an affidavit in the Supreme Court suggesting there was a trend of people accused in high-value economic offences approaching the Supreme Court directly — instead of an appropriate court — to get protection from arrest, and that in 44 such instances, the court had granted relief to them, significantly affecting the ability of investigative agencies to go about their probes into these cases.

It wanted the court to address the issue, vacate the interim relief orders, and ask the petitioners to follow the prescribed legal route by appearing before the appropriate lower courts.

The affidavit was filed in a matter pertaining to Bhushan Steel Ltd, involving the company’s former CFO Nittin Johari, and may be taken up by a threejudge bench headed by Chief Justice of India (CJI) SA Bobde on July 24.

The list of cases appended in the affidavit include the Bhushan Steel Ltd case involving an amount of ~20,000 crore, a bank fraud case against Nilesh Parekh of Shree Ganesh Jewellers worth ~2,762 crore, a case against Vikram Kothari of Rotomac worth ~ 3,770 crore, and other such matters.

However, Solicitor General (SG) Tushar Mehta brought up the issue on Wednesday while representing the Union government in a case against Jinofer Bhujwala, arrested in June 2019 in a ~134 crore Gujarat Maritime Board (GMB) fraud case, and spoke of how investigative agencies are finding it difficult to do their work because of the accused often directly approaching the apex court for relief — and getting it.

The CJI has asked for a list of such cases heard by different benches and has listed the matter “along with other similar matters” for two weeks from now.

Mehta referred to around 60 cases under investigation under the Prevention of Money Laundering Act (PMLA), 2002, Companies Act and GST Act etc, including the case against former finance minister P Chidambaram, and the former promoters of Bhushan Steel.

He argued that in these largescale financial frauds, the accused were consciously not resorting to the remedy available under the law — applying to the court of sessions or high court for bail – under section 438 of the CrPC (criminal procedure code) or other statutory remedies. Mehta declined to comment. Senior advocate and Congress leader Abhishek Manu Singhvi told HT that he was ready to argue the issue.

“I am appearing in more than one case, including P Chidambaram and DK Shivakumar. The mere dates for listing and hearing have been given. We are ready to argue. Significant issues of law are raised, and we would welcome a decision on such significant issues of law. The issues are important, not individuals,” he said.

To be sure, Chidambaram’s case may be different. The former finance minister first moved the Delhi high court for bail. After the court rejected it, he appealed to the Supreme Court. He adopted the same route for anticipatory bail. The high court rejected it, and he was arrested while waiting to be heard by the Supreme Court.

Shivakumar was granted bail by Delhi high court last October. The SC dismissed a plea by the Enforcement Directorate seeking cancellation of Shivakumar’s bail.

“Every person has the right to move the Supreme Court under

Article 32 if his fundamental right is violated. Moreover, for violation of any law whether it be Companies Act, PMLA, or GST, the prosecution must follow the procedure prescribed under CrPC. If there is a cognisable offence, an FIR must be registered first and there would be an investigation and a police diary would be maintained. The FIR would be uploaded online allowing an accused to challenge the FIR and seek bail.

“Now the ED in these [economic] offences do not follow the FIR system. They register a report in their records which nobody including the accused knows about and suddenly there is a knock on the door and the accused is picked up. So our argument is that such a procedure is not valid and affects the liberty of the individual. There is already a judgment of the Supreme Court delivered eight years ago that it is mandatory to follow CrPC but they don’t follow it. That is why these cases have been filed and interim relief was granted,” senior counsel Mukul Rohatgi, who is appearing for Nittin Johari, told HT.

Senior advocate Siddhartha Dave, who is representing Jinofer Bhujwala, told HT: “On their argument that high courts have to be moved first, I would only like to point out how the Supreme Court has been hearing and striking down IPC [Indian Penal Code] provisions criminalising homosexuality and adultery in public interest litigations for violation of fundamental rights. The PMLA cases are one which affect the accused himself. So it is strange that the Centre is raising this argument that high court should be approached first. Besides, various high courts might give different orders. So, in order to avoid such contradictions, SC would be the appropriate forum.”

“…in many of the cases, proceedings before the competent court are stayed and investigations have come to a standstill for the reason that the Supreme Court has directed ‘no coercive steps to be taken’”, the affidavit said urging the court to vacate such orders. HT has reviewed a copy of the affidavit.

The affidavit said that the accused deliberately do not resort to the remedies available under the law, namely to apply to the sessions court or high court for bail under the code of criminal procedure or other applicable laws. Instead they approach the Supreme Court directly under Article 32 of the Constitution for protection from arrest by investigating agencies, the affidavit added.

The grounds cited for claiming such relief is usually that the constitutional validity of the special laws under which action is being taken against them, are under challenge.

“In all these matters, such interim reliefs are prayed for on the ground that some or the other provisions of special legislations like Prevention of Money Laundering Act, Companies Act and Central Goods and Service Tax Act are under challenge”, the affidavit said.

The affidavit was filed by Arvind Saran (Director in Department of Revenue Director).

It said that in some of the cases, interim orders of releasing the accused have been passed by the high courts while hearing the challenge to constitutional validity of the provision.

“Further, orders in the nature of bail or staying the trial have been passed without the accused resorting to remedy under Section 439 CrPC (special powers to sessions/high courts to grant bail),” the affidavit added.

The Centre further argued in the affidavit that “a very challenge to the constitutional validity may not be a ground to prevent statutory authorities from exercising its statutory powers of arrest etc”.

Due to the interim relief, the affidavit claimed, “proceedings in many of the cases before the competent courts have stayed and investigations have come to a standstill for the reason that this court (SC) has directed ‘no coercive action to be taken’.”