ON THE TRAIL OF HARVESTS OF `GOLDEN' APPLES IN HIMACHAL PRADESH
In the context of media reports of dubious transactions involving Shri Virbhadra Singh, former Union Minister of Steel, our counsel, Shri Prashant Bhushan, had requested the Central Vigilance Commission and the Central Bureau of Investigation in January 2013 to act on the unrebutted documentary evidence of corruption against Shri Singh. One of the charges pertained to the revision by Shri Virbhadra Singh of his Income Tax returns for the assessment years from 2009-10 to 2011-12, revising the tax exempt agricultural income of his apple orchard from Rs. 47.35 lakh to Rs. 6.57 crore. Evidently, Shri Singh must have had a belated realization that his orchard had miraculously yielded harvests of truly golden apples during the years of his stewardship of the Steel Ministry!
We followed up the issue with letters to the Chief Vigilance Commissioner and the Director, CBI, urging them to discharge their statutory responsibilities as apex anti-corruption bodies. The letters addressed by the Society only elicited a formal response from the CVC to the effect that the matter had been referred to the Chief Vigilance Officer of the Ministry of Steel. Hence, Common Cause proceeded to file a writ petition in the Delhi High Court, seeking a court-supervised probe by the CBI/Director General, Income Tax (Investigations), in view of the documented allegations of corruption and amassing of assets disproportionate to known sources of income by Shri Singh.
Our petition came up before a division bench of Chief Justice N.V. Ramana and Justice Manmohan. At the hearing on November 27, 2013, the Court was informed that the CBI had received the complaint and was investigating the case. The Court sought a status report from the CBI within six weeks and posted the matter for February 12, 2014. Meanwhile, Common Cause submitted fresh documentary evidence to show that the huge increase in agricultural income claimed in Shri Singh's revised Income Tax returns was limited to a 3 year period corresponding to his tenure as the Minister of Steel.
Subsequently, new allegations of corruption relating to Shri Singh's current term of office came to light. Some of the allegations had also been levelled by Shri Arun Jaitley. Under the circumstance, Common Cause filed an interim application on January 2014 seeking a thorough, independent investigation in regard to these charges. The matter is now listed for March 12, 2014.
We give below an abstract of the Petition along with a recapitulation of the subsequent developments in the case.
THE HIGH COURT OF DELHI, AT NEW DELHI
Writ Petition (Civil) No. 7240 Of 2013
In the matter of:
Common Cause Versus Union of India & Ors
The Hon'ble Chief Justice of Delhi and his Companion Justices of the Hon'ble High Court of Delhi
4. That the respondents in this petition are the Union of India, the CBI, the CVC, the DG Income Tax (Investigations) and Shri Virbhadra Singh, and other unidentified persons whom the CBI may identify if a thorough an investigation is carried out. To the knowledge of the petitioner, no other persons/ bodies/ institutions are likely to be affected by the orders sought in the writ petition.
5. The Petitioner, Common Cause, is a registered society. Shri Kamal Kant Jaswal, Director of Common Cause, is authorized to file this PIL.
6. That the petitioner's counsel Shri Prashant Bhushan made detailed complaints to the CVC and the CBI on 11.01.2013. After 6 months, the CVC replied on 10.07.2013 that it had forwarded the complaint to the Ministry of Steel. The petitioner wrote to the CVC and the CBI on 16.08.2013, reminding them of the urgency and the seriousness of the matter. The CVC responded to the said letters on 04.09.2013 stating that they had forwarded the complaint to the Ministry of Steel and the Prime Minister's Office. The CBI did not respond to the complaints made by the petitioner and its counsel.
The Case in Brief
8. That the Petitioner is filing the present writ petition in public interest in order to bring to the notice of this Hon'ble Court a very serious case of corruption involving Respondent No. 5, Shri Virbhadra Singh, Former Union Steel Minister and the present Chief Minister of Himachal Pradesh,. According to newspaper reports, which are corroborated by primary documents like Income Tax returns, affidavit filed along with nomination paper, agreements, bank statements, Shri Virbhadra Singh, while holding the office of Union Minister of Steel, received and invested large sums of money that could not properly be accounted for. The relevant facts are recapitulated below:
· Respondent No. 5 filed income tax returns for assessment years 2009-10, 2010-11 and 2011-12 showing tax exempt agricultural income of Rs. 7,35,000, Rs. 15,00,000 and Rs. 25,00,000, respectively.
· In November-December 2010, documents were seized in the course of an Income Tax raid on a multinational steel company showing that cash payments of about Rs. 2.28 crore were made to Respondent No. 5 between 2008-2010, when he was the Union Steel Minister;
· In another case, when one Anand Chauhan was being investigated by the Income Tax Authorities for evasion of income tax, it was found that he had deposited about Rs. 5 crore in cash in his Punjab National Bank account in Shimla and he also made corresponding withdrawals by cheque for LIC premiums totalling about Rs. 5 crore in favour of Respondent No. 5, his wife and children.
· Immediately thereafter, Respondent No. 5, in order to justify payment of roughly Rs. 5 crore by Shri Anand Chauhan as LIC premiums for policies in his name as well as his family members, produced a MoU with Shri Chauhan dated June 15, 2008, which shows that Respondent No. 5 had entered into an agreement with him for the management of his apple orchards. However, there is another agreement of same period which he had entered with one Bishambar Dass on June 17, 2008 for the management of the same orchard on the same land which clearly shows that the MOU with Anand Chauhan had been backdated to create an explanation for the unaccounted for money.
· In 2012, in order to explain the unaccounted for money, Respondent No. 5 filed revised Income Tax returns for the assessment years 2009-10, 2010-11 and 2011-12, showing revised agricultural income of Rs. 2,21,35,000 (a 30-fold increase), Rs. 2,80,92,500 (an 18-fold increase) and Rs. 1,55,00,000 (a 6-fold increase), thus an increase in agricultural income to the tune of Rs. 6.10 crore.
9. The aforementioned facts, which are fully corroborated by primary documents, warrant an independent and thorough criminal investigation by a credible investigative agency. These facts have been in the public domain for quite a while, but the government has refrained from ordering a proper investigation after registration of an FIR under the Prevention of Corruption Act, 1988, despite the fact that the petitioner's counsel had requested the Chief Vigilance Commissioner and the CBI vide letters dated 11.01.2013 to register an FIR and order a proper investigation into this matter. Subsequently, the petitioner society also urged them to undertake the desired investigations in keeping with their statutory mandates.
It is submitted that the Petitioner has no personal interest in the litigation and that the petition is not guided by self-gain or the gain of any other person/institution/body and that there is no motive other than of public interest in filing the writ petition.
10. That on November 30, 2010, the Income Tax Authorities conducted raids at several offices of Ispat Industries, which is jointly owned by Pramod and Vinod Mittal, brothers of the global steel tycoon, Lakshmi N Mittal.
11. On December 1, 2010, the Income Tax department seized from the office of Ispat Industries a document, which appears to be the record of off-book cash transaction by their staff from 2007 onwards. The spread-sheet seized by the income tax officials purports to show the following payments made to one `VBS',
(i) Rs. 50,00,000 on 28/10/2009,
(ii) Rs. 50,00,000 on 23/12/2009,
(iii) Rs. 27,74,535 on 21/4/2010, and
(iv) Rs. 1,00,00,000 on 24/8/2010.
12. Although Respondent No. 5 denied any dealing with Ispat industries and stated that the initials "VBS" found in the said seized document did not correspond to his name, shortly thereafter, he was shifted from the Steel Ministry to the Ministry of Micro, Small and Medium Enterprises in January 2011.
13. Later on, when Respondent No. 5 filed his affidavit along with his nomination paper in the 2012 Himachal Pradesh Assembly Elections, certain new facts came to light. These facts not only further strengthen the possibility of Shri virbhadra Singh's illegal dealings with Ispat industries, but they also independently constitute a case of corruption under the Prevention of Corruption Act.
14. As disclosed in his nomination paper, Respondent No. 5, filed revised income-tax returns in 2012 for the assessment years 2009-10, 2010-11 and 2011-12. His revised I-T returns show an increase in agricultural income to the tune of Rs. 6.57 crore. While the original Income Tax returns show net agricultural income at Rs. 7,35,000, Rs. 15,00,000 and Rs. 25,00,000 for the assessment years 2009-10, 2010-11 and 2011-12, respectively, the revised returns, all filed on March 2, 2012, show staggering escalations to Rs. 2,21,35,000 (a 30-fold increase), Rs. 2,80,92,500 (an 18-fold increase) and Rs. 1,55,00,000 (a 6-fold increase).
15. Further, during the same time, the scrutiny of the bank statements of one Shri Anand Chauhan, his daughter and wife show that between April 24, 2008 and March 31, 2010, Shri Chauhan deposited roughly Rs. 5 crore in cash in his Punjab National Bank account in Shimla and he also made corresponding withdrawals by cheque for LIC premiums totaling roughly Rs. 5 crore in favour of Respondent No. 5, his wife Pratibha Singh and two children, Aparajita Kumari and Vikramaditya Singh.
16. The affidavit of assets filed by Respondent No. 5 along with his nomination paper also shows that there are three LIC policies in his name with premiums of Rs. 1,20,000, Rs. 50,00,000 and Rs. 1,00,00,000. Five LIC policies worth Rs. 1,00,00,000, Rs. 50,00,000, Rs. 50,00,000, Rs. 10,00,000 and Rs. 10,00,000 are listed in the name of his wife. His daughter Aparajita Kumari has two LIC policies of Rs. 10,00,000 and Rs. 5,00,000, while his son Vikramaditya Singh has 5 LIC policies worth Rs. 50,00,000, Rs. 10,00,000, Rs. 20,00,000, Rs. 5,00,000 and Rs. 5,00,000. Thus, the payment of LIC premia into the accounts of Respondent No. 5 and his relatives by and Chauhan stands corroborated.
17. Apparently, Respondent No. 5, in order to justify the payment of about Rs. 5 crore towards LIC premia by Shri Chauhan produced a Memorandum of Understanding dated June 15, 2008 with Shri Anand Chauhan. As per this MoU, Shri Chauhan was authorised to manage the apple orchards of Respondent No. 5 and invest the proceeds/income from the sale of apples in "government securities, Mutual Funds, in schemes of LIC or to invest the money in the products of Scheduled Banks by ensuring safe and better returns."
18. It would be pertinent here to mention that there is another agreement dated June 17, 2008 between Respondent No. 5 and one Bishambar Dass for the management of the same orchard. Inexplicably, Respondent No. 5 entered into two conflicting agreements for the management of an orchard on the same land for the same period.
19. Evidently, the MoU with Shri Chauhan had been backdated to create an explanation for the unaccounted for money which Respondent No. 5 received during his tenure as Union Minister. The revised income tax returns showing a manifold rise in the agricultural income also constitute an attempt to explain away huge illicit income during his tenure as Union Minister.
20. It is submitted that the aforementioned facts which are fully supported by documents certainly warrant a criminal investigation. It is more than apparent that the revised income tax returns for assessment years 09-10, 10- 11 and 11-12 were an afterthought. Revision of agricultural income to the extent of 18 and 30 times is inconceivable. It is submitted that the policy of exemption of agricultural income from Income Tax cannot be allowed to be used for laundering black money obtained by senior public functionaries from dubious sources.
21. All these facts have been in the public domain for long but so far no action whatsoever has been taken by the government to institute a proper investigation. The petitioner's counsel therefore requested the CVC and the CBI vide letters dated 11.01.2013 to register an FIR and order a proper investigation into this matter. The CVC replied six months later that it had simply forwarded the complaint to the Ministry of Steel.
22. On 16.08.2013, the Petitioner wrote to the CVC as well as the CBI seeking an expeditious investigation into the aforementioned case. On 04.09.2013, the CVC reiterated that the complaint had been forwarded to the Ministry of Steel for appropriate action.
23. That no other Writ Petition has been filed by the Petitioner in this Hon'ble Court or in any other Court of the country raising the same issue. The Petitioner does not have any alternative and equally efficacious remedy. This Hon'ble Court clearly has the jurisdiction to decide this case as all the Respondents except for Respondent No. 5 are based in New Delhi. The cause of action has also arisen in Delhi as the issue of corruption raised by the Petitioner pertains to the period when Respondent no. 5 was serving in New Delhi as Union Minister of Steel.
The present Writ Petition is being filed on the following grounds among others :
A. That the facts highlighted in the above petition reveal several acts of money laundering, corruption, possession of disproportionate assets, and criminal misconduct allegedly committed by Respondent No. 5, which warrant a thorough and impartial investigation, but the same has not been initiated despite well documented complaints made by the petitioner society and its counsel.
B. That the wilful inaction of Respondent Nos. 1 to 4 in regard to long pending requests for investigation of the aforementioned charges of corruption against Respondent No. 5 is completely arbitrary and hence, violative of Article 14 of the Constitution. This inaction despite the establishment of a prima facie case of corruption by a top public functionary is actuated by extraneous considerations and shows mala fides on their part.
C. That the unwillingness of the government and its investigating agencies like the CBI to undertake an investigation even as the aforementioned allegations, fully supported by primary documents, have been in the public domain for past several months and been widely reported in print and electronic media, shows that an attempt is being made to protect Respondent No. 5 who is a high profile politician and presently the Chief Minister of a State. Such undue protection completely undermines the Rule of Law, which has been recognised as a basic feature of the Constitution under Article 21 by the Hon'ble Supreme Court in its several judgments including Vineet Narain(1996) 1 SCC 226.
D. That the inaction of the government in ordering a fair and independent investigation despite there being a serious case of misuse of office for personal gain would encourage corruption in the country and convince the people of this country that high placed persons in power are beyond the reach of the law of the land. In order to uphold the rule of law, it is imperative that an impartial investigation into the aforesaid matter is urgently instituted. The prevailing corruption in the country at high places and the unwillingness of the government to deal with such corruption by conducting an independent investigation seriously impairs the right of the people of this country to live in a corruption and crime free society. This is a violation of Article 21 of the Constitution. The right to life guaranteed to the people of this country also includes in its fold the right to live in a society that is free from crime and corruption.
It is, therefore, respectfully prayed that this Hon'ble Court may be pleased to:
(a) Issue a writ of mandamus or any other similar writ directing the CBI and the DG Income Tax (Investigations) to initiate an investigation under the supervision of this Hon'ble Court and/or the CVC, into the charges of money laundering, corruption, possession of disproportionate assets, criminal misconduct, etc. against Respondent No. 5 as mentioned in the present writ petition, and take consequent action thereupon; and
(b) pass any other or further order/s as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
THROUGH : PRASHANT BHUSHAN, COUNSEL FOR THE PETITIONER
When the matter came up for hearing on November 27, 2013, the Court was informed that the CBI had received the complaint and was investigating the case The Court sought a status report from the CBI within six weeks and posted the matter for February 12, 2014. Meanwhile, Common Cause has submitted fresh documentary evidence by way of the following additional affidavit, to show that the staggering increase in agricultural income claimed by Shri Virbhadra Singh in his revised Income Tax returns was limited to a three year period corresponding to his tenure as the Union Minister of Steel.
Excerpts from the additional affidavit on behalf of the petitioner
3. The above petition was taken up for hearing on November 27, 2013, when this Hon'ble Court was pleased to record the statement of the counsel for the CBI to the effect that the agency is inquiring into the allegations contained in the petition, and was pleased to direct the CBI to file a status report on its investigations. After the said hearing, the petitioner has come in possession of some important documents that further corroborate the averments contained in the writ petition. The Petitioner Society prays that these documents may also be considered by the CBI in the ongoing investigation, and by this Hon'ble Court in monitoring the same.
5. Along with the writ petition, the Petitioner Society had filed a typed copy of the bank account ledger of Shri Anand Chauhan and his family members. The scrutiny of the bank statements of Shri Chauhan, his daughter and wife shows that between April 24, 2008 and March 31, 2010, Shri Chauhan deposited roughly Rs 5 crore in cash in his Punjab National Bank account in Shimla. It also shows that he made corresponding withdrawals by cheque for LIC premiums totaling roughly Rs. 5 crore in favour of Respondent No. 5, his wife Smt Pratibha Singh and two children Aparjita Kumari and Vikramaditya Singh. The Petitioner Society has now noticed that some of the crucial entries that support its contention had been omitted in the typed copy due to a typing error.
6. It is also to be noted that before the assessment years 2009-2012, in respect of which revised income tax returns were filed showing agricultural income in crores from the orchard of Respondent No. 5, in assessment years 2006-07 and 2007-08, Respondent No. 5 had shown agricultural income of only Rs 11 lakh and Rs 15 lakh, respectively. For these years, no revised returns were filed by Respondent No. 5. This leads to the inference that the revision of income tax returns for the three years in question showing a sudden spurt in agricultural income was an afterthought and was intended to hide the true nature of the unaccounted for income.
7. It is also to be noted that after the revision of incomes for the assessment years 2009-10, 2010-11 and 2011-12, the income of Respondent No. 5 from agriculture again dropped back to its 2007-08 level. The affidavit for his nomination as a candidate for Himachal Pradesh Assembly constituency filed on 17.10.2012 shows that the total income of his HUF property in question is just above Rs 29 lakh, so his agricultural income is likely to be between Rs 10 to 20 lakh.
8. In response to a query regarding the agricultural income of his HUF property for the year 2009-10, Respondent No. 5 had on 20.07.2011 disclosed his agreement with Shri Bishamber Dass to justify his agricultural income of Rs. 7,35,000. This shows that at that time the agreement with Shri Anand Chauhan was not in existence. It is, therefore, clearly backdated and there is no way that there could have been a 30 fold increase in the agricultural income to the tune of Rs. 2,21,35,000, as Respondent no. 5 later claimed. The assessment proceedings had been completed for the year 2009-10, and yet in 2012, Respondent No. 5 filed a revised income tax return showing a 30 fold increase in his agricultural income, which is not taxable. This makes it an open and shut case of money laundering, possession of disproportionate assets and other illegal activities by Respondent No. 5.
9. The Petitioner Society submits that despite the availability of such clear-cut evidence of corruption, money laundering, disproportionate assets and criminal misconduct, the CBI and the Income Tax department have not taken any effective measures, because Respondent No. 5 is a senior leader of the ruling party. The complaint filed by the counsel of the Petitioner Society is almost 11 months old, and yet the CBI has not even registered a FIR in the matter. The inaction of the government and its investigating agencies in the face of clinching documentary evidence of corruption in high places, which evidence has been in the public domain for several months and widely reported in the print and electronic media, shows a clear intent to protect Respondent No. 5 who is a high profile politician. This protection militates against the concept of the `Rule of Law', which has been enshrined as a basic feature of the Constitution under Article 21 in several judgments of this Hon'ble Court, including Vineet Narain (1998) 1 SCC 226.
10. The inaction of the government in ordering a fair and independent investigation despite there being serious case of misuse of office for personal gain encourages corruption in the country and makes the people of this country believe that certain high placed persons in power are beyond the reach of law of the country. In order to uphold the rule of law, it is imperative that an impartial investigation in the matter is urgently conducted. The unwillingness of the government to undertake an independent investigation into the rampant corruption in high places seriously impairs the fundamental right of the people of this country to live in a corruption-free society. This is a violation of Article 21 of the Constitution. The right to life guaranteed to the people of this country also includes in its fold the right to live in a society which is free from crime and corruption.
11. Therefore, the Petitioner Society requests this Hon'ble Court to direct a thorough investigation by the CBI and the Income Tax Department under the monitoring and supervision of this Hon'ble Court into the charges of money laundering, corruption, disproportionate assets, criminal misconduct etc. against Respondent No. 5 as brought out in the present writ petition.
Subsequently, new allegations of corruption relating to Shri Singh's current term of office came to light. Some of the allegations had also been levelled by Shri Arun Jaitley. Under the circumstance, Common Cause filed aninterim application on January 2014 seeking a thorough, independent investigation in regard to these charges. The matter is now listed for March 12, 2014.
Application for Direction on behalf of the petitioner u/s 151 CPC
4. Since the last date of hearing, the Petitioner Society has come in possession of certain documents that show that Respondent No. 5 has indulged in other serious acts of bribery and corruption that need a thorough independent investigation. Since these charges pertain to the current tenure of Respondent No. 5 as the Chief Minister of Himachal Pradesh, the CBI can only investigate them either on a reference by the State Government or on an order of a writ court. That is why the petitioner society is filing this application to seek a direction from this Hon'ble Court to investigate these serious charges.
5. The Government of Himachal Pradesh had allotted a hydel power project at Sai Kothi to M/s Venture Energy & Technology Pvt. Ltd. on 14.06.2002. The said company defaulted in the execution of the project and the state government granted several extensions to the company. After Respondent No. 5 became the Chief Minister, his government granted it a further extension of 10 months.
6. It turns out that the said decision was a result of quid pro quo and was made on extraneous considerations, as is clear from the following facts.
a) In the affidavit filed by Respondent No. 5 on 17.10.2012 for contesting the election to the Himachal Pradesh Assembly, there is no reference to any loan received by Respondent no. 5 or his wife from M/s Venture Energy or any of its promoters. However, when Mrs. Pratibha Singh, wife of Respondent no. 5, contested the subsequent by-election to Lok Sabha, she disclosed in her affidavit dated 30.05.2013 that one Mr. Vakamulla Chandersekhar had given an unsecured loan of Rs 1.50 crore to her and Rs. 2.40 crore to Respondent No. 5. Mr. Chandersekhar is the director of M/s Venture Energy. It is thus clear that unsecured "loans" amounting to Rs. 3.90 crore were received by Respondent No. 5 and his wife (after Respondent No. 5 became the Chief Minister of Himachal Pradesh) from the director and promoter of M/s Venture Energy, the company that he had favoured by granting an undue extension despite repeated defaults.
b) Secondly, Mr. Vakamulla Chandersekhar gave an unsecured loan of Rs. 4,999,000.00 to M/s Maple Destinations & Dreambuild Pvt Ltd. M/s Maple Destinations and Dreambuild Pvt Ltd also got an unsecured loan of Rs 1.50 crore from M/s Tarini Sugar & Distilleries. This is evident from the balance sheet of M/s Maple Destinations and Dreambuild Pvt Ltd as on 31.03.2013. M/s Maple Destinations and Dreamland Pvt Ltd is fully owned by Mr. Vikramaditya Singh and Ms. Aprajita Kumari, son and daughter of Respondent No. 5, respectively. The balance sheet of M/s Maple Destinations and Dreambuild Pvt Ltd clearly states the same. It is evident from the auditor's report of M/s Tarini Sugar & Distilleries that these loans are interest-free and no period of repayment has been fixed. This is also stated in a news report published in the Indian Express on January 3, 2014. 17.53% shares of M/s Tarini Sugar & Distilleries are held by Mr. Vakamulla Chandrasekhar and 64.57% shares are held by Tarini International Ltd. This has been stated in the balance sheet of M/s Tarini Sugar & Distilleries. Mr. Vakamulla Chandrasekhar is the managing director of Tarini International Ltd. Thus, in effect the firm favoured by Respondent No. 5 transferred a sum of Rs 1.99 crore to the company owned by his children.
c) Thirdly, M/s Tarini Infrastructures Ltd has allotted a total of 9,80,000 equity shares of Rs. 10 each to the family members of Respondent No. 5. While Mrs. Pratibha Singh (wife), and Ms. Aparjita Kumari (daughter) have received 3,40,000 shares each, 3,00,000 shares have been allotted to Mr. Vikramaditya Singh (son). Mr. Amit Pal Singh, OSD to Respondent No. 5, has also got 10,000 equity shares in the said company.
7. Mr. Arun Jaitley, Leader of Opposition in Rajya Sabha, has addressed a letter dated 29.12.2013 to the Prime Minister regarding the charges referred to para 6(a) and (c) supra and forwarded a copy of the letter to the CBI.
8. It is submitted that the above facts independently and collectively constitute various offences under the Prevention of Corruption Act, and therefore require a thorough and independent investigation. Hence, the Petitioner Society requests this Hon'ble Court to order a thorough court-monitored investigation by the CBI or by a Special Investigation Team into these allegations of corruption and bribery against Respondent No. 5 and direct the investigating agency to submit periodical status reports to this Hon'ble Court.
In these circumstances the Petitioner Society prays that during the pendency of this petition, the Hon'ble Court may be pleased to pass the following ad-interim direction:
(i) Direct a thorough court-monitored investigation by the CBI or SIT into the alleged acts of corruption and bribery committed by Respondent No. 5 as is detailed in this application and submit periodical status reports to this Hon'ble Court.
Pass any other or further orders, as may be deemed fit and proper in the interest of justice and the rule of law.