High Court Seeks Clarification on CBI Guidelines, Sets Deadline for Conspiracy Probe

The High Court sought clarification on Supreme Court orders regarding CBI guidance, requiring parties to file affidavits. The court emphasized the completion of the conspiracy investigation within three months by the CBI Director. It clarified that the pendency of High Court proceedings does not hinder the Settlement Commission's actions. The Income-tax Department's request for an enquiry in Patna was redirected to Calcutta. The court highlighted the discretionary power of the Settlement Commission and issued a notice for the next hearing on February 21, 1997, with report filing deadlines for the CBI and Income-tax Department by February 20, 1997.

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Issues:
1. Interpretation of Supreme Court orders regarding proceedings in High Court.
2. Affidavits filing directive for parties.
3. Adherence to time schedule for investigation completion.
4. Clarification sought by Income-tax Department.
5. Settlement Commission's refusal to deal with proceedings due to High Court's pendency.
6. Request for holding enquiry by Settlement Commission at Patna.
7. Discretionary power of Settlement Commission under section 245D(3).
8. Notice issuance to Income-tax Settlement Commission.
9. Next hearing date and report filing deadlines.

Interpretation of Supreme Court Orders:
The High Court proceeded with the matter following Supreme Court orders related to similar cases, emphasizing guidance to CBI without delving into accusations. A controversy arose between parties over the interpretation of these orders, prompting the court to seek clarification in the next hearing after parties file affidavits.

Adherence to Time Schedule:
The Director of CBI committed to completing the conspiracy investigation within three months from December 11, 1996. The court emphasized adherence to this timeline for investigation completion.

Clarification Sought by Income-tax Department:
The Income-tax Department filed an interlocutory application seeking clarification on orders dated November 13, 1996, and December 19, 1996. The court clarified that the pendency of proceedings in the High Court does not prevent the Settlement Commission from taking action under section 245D(6) of the Income-tax Act.

Settlement Commission's Refusal:
The Settlement Commission declined to reopen disposed proceedings due to High Court's ongoing proceedings. However, the court clarified that the Commission can proceed with actions under section 245D(6) despite the High Court's pendency.

Request for Holding Enquiry:
The Income-tax Department requested the Settlement Commission to conduct enquiries at Patna due to security concerns and volume of records. The Commission directed the records to be sent to Calcutta, leading to a request for entrusting the enquiry to the Chief Commissioner of Income-tax, Bihar.

Discretionary Power of Settlement Commission:
The court noted the discretionary nature of the Settlement Commission's power under section 245D(3) and expressed doubts about giving specific directions. The court sought the Commission's response considering the significance of the cases and the amount involved.

Notice Issuance to Settlement Commission:
The court issued a notice to the Income-tax Settlement Commission, returnable within two weeks, through the Commissioner of Income-tax, Bihar. The Commission was allowed to act independently under section 245D(3) in the interim.

Next Hearing Date and Report Filing:
The matters were scheduled for the next hearing on February 21, 1997, with directives for the CBI and the Income-tax Department to file reports by February 20, 1997. Copies of the order were to be delivered to counsels for both parties.

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