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Statement on the Sahara-Birla case decision of Supreme Court

The Supreme Court today dismissed the application filed by Common Cause seeking an independent court-monitored investigation into the Birla/Sahara payoff documents recovered by the Income Tax Department.


The background was as follows:


In October 2013 the CBI/IT Dept conducted simultaneous raids on the premises of Aditya Birla Group of companies. Apart from recovering 25 crores in cash, a  large volume of incriminating documents in the form of emails, handwritten diaries, notebooks and other documents seized from computers were recovered that showed large payments of crores to public servants of DRI, MoEF, Coal Ministry. Many of these payments were made at a time when Birla was seeking environment clearances, coal mining leases etc. An email was also recovered from the laptop of group president showing payment of 25 crores which said “12 paid rest?” When Shubhendu Amitabh was question about this email entry, he said this reflected a payment to Gujarat Alkali & Chemicals which he was unable to substantiate.


The IT Dept carried out a detailed appraisal of these documents and came to the conclusion that they represented the true state of affairs. The DGM Accounts of Birla who was the custodian of cash told the IT Dept that he used to receive cash in installment of 50 laks/1 crores from various hawala dealers sometimes twice a day sometimes after a few days. These monies used to be paid to various people at the instance of the group president by 4 other senior officers of Birla along with him.


The Sahara group was raided by the IT Dept in November 2014. Among the documents seized were detailed accounts maintained in spreadsheets in the computers of an employee of Sahara which contain details of 115 crores of cash received in the year 2013-14 out of which 113 crores had been paid out to various public servants. The spreadsheets contain details of dates, amounts and source from which amounts were received which is mostly from a marketing company of Sahara called Marcomm. It also contained details of payment of this cash on different dates of different amounts to different people at different places and through named delivery persons. This spreadsheet contains details of 2 payments amounting to 10 crores to CM of Madhya Pradesh, 1 payment to CM of Chhattisgarh, 9 payments amounting to 40 crores to CM of Gujarat who is also referred to as Modiji. Before the IT Department, Sahara claimed that these were fictitious records created by a disgruntled employee to implicate another employee of Sahara. This explanation was disbelieved by IT who came to the conclusion that these documents represented the true state of affairs for several reasons, most importantly  because the cash received mentioned in these documents from Marcomm tallied with the entries and ledger books of Marcomm itself which were also recovered.


Despite all this evidence of payments to public servants which amount to offences, the IT Dept did not refer this matter for a criminal investigation as mandated by judgments of Supreme Court that say any information received which on the face of it show commission of an offence must be investigated after registration of FIR. The veracity or credibility of this information is a matter of investigation and the police cannot refuse to register the investigation.


It is in these circumstances, that Common Cause and others approached the SC to seek a credible investigation into these payoff documents. A division bench of Supreme Court consisting of Justices Arun Mishra and Amitava Roy has today dismissed this application by holding that the voluminous and detailed documents of payoffs which were recovered constituted random loose sheets of paper on the basis of which high public functionaries occupying important offices cannot be subjected to investigation.


This judgment is very unfortunate and is a set-back to the whole campaign against corruption and for probity in public life. It is also a black mark on the reputation of the Supreme Court which had recently distinguished itself by directing independent investigation into the coal scam and the 2G scam. Today’s judgment shows that though the Court has often said that law is equal for everyone and “be you ever so high the law is above you,” the Court has betrayed this precept in its judgment today. Supreme Court’s judgment today will leave the cloud of suspicion over all the persons mentioned in these documents.

That cloud could only have dissipated if there had been an independent investigation into the payoffs mentioned in these documents. It was therefore in the interest of those persons mentioned to have themselves sought investigation which would have cleared them if they were not guilty. Unfortunately those in authority were hell-bent into stonewalling any investigation into this matter and even more unfortunately Supreme Court has also abdicated its constitutional responsibility for ensuring such investigation.


In the recent past, there have been several instances where the Supreme Court has struck a blow for the accountability of public servants and enhanced its reputation as the protector of rights and upholder of the constitution. Today unfortunately that reputation has been dealt a serious blow. I hope this is only a temporary aberration and the court will restore its reputation in the eyes of the people in time to come.