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Madras High Court issues Directions to CBI to investigate about the missing 100 Kg Gold from its Custody [READ ORDER]

Madras High Court issues Directions to CBI to investigate about the missing 100 Kg Gold from its Custody [READ ORDER]
The Madras High Court has directed the Crime Branch to investigate about the missing 100 Kg gold from CBI custody.

Chronological facts:

  1. The Central Bureau of Investigation had seized the gold in connection with cases dating back to 2012 over allegations that officials of Minerals and Metals Trading Corporation of India in Chennai had made undue favours towards Surana Corporation Limited, which dealt in import of gold and silver.
  2. The gold, amounting to 400.47 kg – and in the form of bars and ornaments –was seized by the CBI from Surana’s office in Chennai. The central agency claimed it had locked the company’s vault and handed over the keys to a special CBI court in the city.
  3. In September 2013, the CBI registered another case, saying that while the seized gold was not wanted in relation to the 2012 cases, it had found that Surana had imported the gold in violation of the Foreign Trade Policy. The agency requested that the seized gold be transferred from the first case to the fresh one, following which the court allowed the transfer of about 400 kg on record. However, there was no physical transfer of the gold, as it was already in the vault.
  4. In 2015, the CBI filed its closure report in the second case. It said that there was no “adequate evidence forthcoming” in the matter. A special CBI court accepted the report, but directed that the seized gold be handed over to the Directorate General of Foreign Trade.
  5. But, the Madras High Court set aside the order on a plea filed by Surana. The CBI opposed Surana’s petition, backed by the Ministry of Commerce and Industry, under which the DGFT falls.
  6. Finally, in December 2019, the National Company Law Tribunal, which had been approached by the State Bank of India, ordered that the gold be handed over for distribution to the six banks that Surana owed money to. The SBI had initiated proceedings against Surana over non-payment of dues, and had found that the firm had pending loans amounting to Rs 1,160 crore, after which it moved the special CBI court seeking the seized gold.
  7. Hence Under such circumstances, the Interim Resolution Professional-cum Liquidator, has filed the present writ petition for a direction to the CBI to hand over 103.864 kgs. of gold.
 

Court Observations:

The bench noted thatin short, the contention of the CBI is that they seized only actually 296.606 kgs. of gold, but, had mistakenly shown in the inventory as 400.47 kgs. of gold.

The bench asked Mr.K.Srinivasan, learned Special Public Prosecutor, “Had any property been lost either from the malkhana (property room) of the Court or from the malkhana of the CBI, what should have been done?”  Wherein the bench remarked which reads as under:

A regular FIR for theft should have been registered in the jurisdictional police station and the police investigation under Chapter XII of Cr.P.C. should have been conducted. At the end of the investigation, the Investigating Officer may come to the conclusion that the actual gold that was seized was only 296.606 kgs., but, it was mistakenly entered in the inventory as 400.47 kgs. Strangely, this has not been done in this case till date. One can understand if the difference had been a few grams, but, this Court is unable to fathom as to how there could be a discrepancy of more than 100 kgs. in the weight of gold. Gold will not diminish in weight like ganja by efflux of time. Unfortunately, it appears that all parties to the great bullion expedition have deflected the golden question as to where this alleged gold weighing 103.864 kg actually was. 

Withoutintending to hypothesize or speculate, the bench brings out three distinct possibilities on the fate of the gold which require investigation: 

  • First, the alleged shortfall of 103.97 kgs. of gold could be a genuine mistake as contended by the CBI, -
  • Secondly, the CBI officials, in collusion, with the panchas and others, may have illegally dealt with the gold while maintaining the weight of the gold as 400 kgs. in the seizure mahazar, as a shortfall therein would have made Surana cry foul.
  • The third possibility is that the CBI officials, in collusion with Surana and others, may have permitted Surana to deal with 100 and odd kgs. of gold after effecting the seizure of 400 kgs
However, the bench also pointed out that this Court is not expressing any opinion on these possibilities. Suffice it to say that a free and fair investigation is, therefore, imperative to unearth the truth in this case.

The bench remarked in the lighter tone while quoting a sapient passage from the celebrated judgment of the Supreme Court in Aher Raja Khima vs. State of Saurashtra that “it may be an Agni Pariksha for the CBI, but, that cannot be helped. If their hands are clean, like Sita, they may come out brighter, if not, they would have to face the music. Averments with regard to weight in a panchanama cannot be taken lightly, especially in a case of this nature when the difference is not a few grams, but, a whopping one lakh grams. Be it noted, in NDPS Act cases, weight of the contraband determines the quantum of punishment.”

Direction Issued by the Madras High Court:

As bench observed that the prayer in this writ petition is for a writ of mandamus to return the remaining gold, which cannot be granted without finding out what has actually happened to the alleged shortfall of 103.864 kgs. of gold the bench issued following direction:

  • The petitioner/Liquidator shall give a petition narrating the entire facts to the CB-CID, Metro Wing, Chennai;
  • On such petition being filed by the petitioner/Liquidator, the CB- CID shall register a regular FIR for theft and entrust the investigation of the case to an officer of the rank of Superintendent of Police in CB-CID;
  • All the stakeholders, including the CBI officials, shall assist the CB-CID in the investigation of the case;
  • The investigation shall be completed within six months from the date of registration of the FIR; and
  • Be it a charge sheet or a closure report, the same shall be filed before the jurisdictional Metropolitan Magistrate in Chennai and copy furnished to the petitioner, who is the Liquidator appointed by the NCLT.
 

 [READ ORDER]


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