In Offence Of Corruption, Criminal Activity & Generation Of Proceeds Of Crime Are Like Siamese Twins: SC Allows ED Probe Against TN Minister In Cash-For-Jobs Scam

A Supreme Court Bench of Justice Krishna Murari and Justice V Ramasubramanian has allowed the ED to probe against a Tamil Nadu Minister in the jobs-for-cash scam.

The Court observed, "In the case of an offence of corruption, the criminal activity and the generation of the proceeds of crime are like Siamese twins."

SG Tushar Mehta appeared for the ED. Senior Counsel Gopal Sankaranarayan, Senior Counsel Prashant Bhushan and Counsel Balaji Srinivasan appeared for the victims and an NGO. Senior Counsel Kapil Sibal, Senior Counsel CA Sundaram, Senior Counsel Sidharth Luthra and Senior Counsel Mukul Rohatgi appeared for the accused. Senior Counsel V Mohana and Senior Counsel Siddharth Agrawal appeared for the de facto complainants. Senior Counsel Ranjit Kumar appeared for the State of Tamil Nadu.

In this case, the matter emerged from the jobs-for-cash scam of 2011-2015, wherein a Tamil Nadu Minister was also involved. Three FIRs alleged that the accused had committed offences by taking illegal gratification for providing appointments to several persons in the Public Transport Corporation. In one case it is alleged that a sum of more than Rs 2 crores had been collected and in another case, a sum of Rs 95 lakhs had been collected.

One complainant was Devasagayam, and another was Gopi.

Multiple appeals were filed against an order passed by the Madras High Court, wherein the Court had passed an order for a de novo investigation, set aside the summons issued by the ED, permitted the ED to inspect the records of the Trial Court and refused to grant an extension of time to complete investigation. 

On detailed deliberation, the Court finally observed that:

(i) The appeals arising out of the order for de novo investigation were allowed, and the direction issued in that regard was set aside. It was ordered that the Investigating Officer shall proceed with further investigation in all cases by including the offences under the PC Act. In that context, the Apex Court observed that it appeared that while Devasagayam originally seemed to have a genuine grievance against the culprits, he later turned out to be a Trojan horse, willing to sabotage the investigation against influential persons. It also opined that the grounds on which Devasagayam sought de novo investigation were quite strange. In that context, the Apex Court further said that "If Devasagayam leapfrogged several miles to protect the actual culprits, the High Court seems to have gone one step further by ordering de novo investigation on a point not canvassed in the petition filed by Devasagayam". In that vein, the Court further observed that "What is interesting is that the order directing de novo investigation in all the three cases, has actually inured to the benefit of the accused, but the High Court put it on the ground that the credibility of the investigation should not be eroded. In fact, the accused did not seek de novo investigation on the ground of slackness on the part of the Investigating Officer, but it was Devasagayam who sought it, with the able assistance of the Investigating Officer".

(ii) The writ petitions challenging the initiation of the proceedings by ED were dismissed. In that context, it was observed that "the information about all complaints, the nature of the complaints, the amount of money allegedly collected towards illegal gratification had all come into public domain. To say that the ED should have adopted an Ostrich like approach, without trying to find out where and to whom the huge money generated in the scam had gone, is something unheard of". In furtherance, it was also said that "the accused is not entitled at all either to seek a reference to a larger Bench or to seek to defer the matter till a decision is rendered in the matters involving larger issues". 

(iii) The appeal challenging the order passed by the High Court regarding the permission to the ED to inspect the records of the Special Court trying the predicate offences was dismissed. In that context, it was said that "The grievance of the appellant in this appeal is that the High Court has overlooked the provisions of Rule 231(3) of the Rules, 2019 and also Section 65B of the Indian Evidence Act, 1872. But both the above contentions are without substance. Rule 231 primarily deals with the grant of certified copies of certain other documents to the accused, before filing of the Final Report. Rule 231(3) states that certified copies of unmarked documents shall not be given. The High Court has not passed any order directing the grant of certified copies of unmarked documents. All that the High Court has done is permitting the ED to have an inspection of the documents under Rule 237 and thereafter to file a proper copy application. This is not contrary to Rule 231(3). We do not know how an argument revolving around Section 65B of the Evidence Act is raised. Section 65B concerns the admissibility of electronic records. Without certification, ED may not be able to use those electronic records in evidence, in the prosecution under PMLA. But it does not mean that they cannot even have a look at the electronic record".

(iv) The appeal challenging the orders of the High Court relating to the extension of time for completion of the investigation were dismissed. The Court observed that "worried about the fate of further investigation, the victim has come up with the above appeal. But the worry of the appellant is baseless. Merely because the High Court has not granted extension of time, it does not mean that the direction to conduct further investigation has become infructuous. On the contrary, a Final Report has already been filed under Section 173(8) of the Code on 08.03.2021 in CC No.3627 of 2017 and the same has now become CC No.24 of 2021".

(v) The Contempt Petitions were dismissed. In that context, it was observed that "The entire case turned out to be a match where it became impossible to identify who was playing for which team. Despite this Court’s order dated 08.09.2022, the High Court passed the order dated 31.10.2022, which practically has the effect of wiping out the directions issued by this Court. In its order dated 31.10.2022, the High Court referred to our order at various places and eventually destroyed the effect of the order of this Court. Therefore, the Police Officers alone cannot be held guilty of wilful disobedience. Hence, the contempt petitions are dismissed. However, if the future course of investigation shows any disobedience of the orders of this Court, it will always be open to the petitioner to come up again".

Cause Title: Y Balaji v. Karthik Desari & Anr. Etc.

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