2021 (8) TMI 1381 - SC - Indian Laws

Transfer of accused due to jail irregularities; expedited investigations and communication emphasized.

The court ordered the transfer of accused individuals from Tihar Central Jail to Arthur Road Jail, Mumbai, and Taloja Central Jail, Mumbai, due to ... Forensic audit access to electronic records - limitation on prison privileges - inquiry by the Commissioner of Police into alleged complicity of jail staff - transfer of undertrial prisoners for preservation of investigation integrity - judicial supervision and expeditious conduct of investigation - production of forensic audit reports to investigating agency in sealed coverForensic audit access to electronic records - Forensic auditors were not provided complete access to electronic records which undermined the effectiveness of the court ordered forensic audit. - HELD THAT: - The Court recorded the status report of the forensic auditors showing that complete recourse to electronic records, including those in the custody of the Chief Financial Officer of Unitech Limited, was not provided. The lack of full access was held to have severely undermined and obstructed the auditors' task and thwarted the effective implementation of the Court's order for a forensic audit. The Court noted the efforts of the auditors to provide as complete a picture as possible on the basis of available records but found the impediment significant enough to be placed on record and addressed. [Paras 1]The Court recorded the deficiency in access afforded to the forensic auditors and directed remedial steps elsewhere in the order to preserve investigation integrity.Limitation on prison privileges - Accused lodged in Tihar Central Jail shall not be entitled to any additional facilities beyond those available in the normal course under the jail manual. - HELD THAT: - Having adverted to the status report and the impediments to the forensic audit, the Court recalled the facilities that had been made available to the accused (Sanjay Chandra and Ajay Chandra) and directed that no additional facilities be permitted beyond those accorded in the ordinary course under the jail manual. The Registrar (Judicial) was directed to communicate these directions to the Jail Superintendent of Tihar Central Jail to ensure compliance. [Paras 2]Directions issued that the accused shall not be entitled to any facilities beyond those available in normal course under the jail manual; Registrar to communicate to Jail Superintendent.Inquiry by the Commissioner of Police into alleged complicity of jail staff - The Commissioner of Police, Delhi must personally conduct an immediate enquiry into the Enforcement Directorate's communication alleging misuse of Tihar Central Jail and possible complicity of jail staff, and file a report within four weeks. - HELD THAT: - The Enforcement Directorate communicated allegations that the premises of Tihar Central Jail had been misused by the accused to engage in illegal activities, transfer assets, dissipate proceeds of crime, and influence witnesses. The Court found these allegations, if true, to be gravely disturbing and indicative of attempts to undermine its jurisdiction. Consequently, the Court directed the Commissioner of Police, Delhi to undertake an immediate personal enquiry into these allegations without delegating the task, to identify and hold accountable any officers or staff complicit in violations, and to place a report on record within four weeks. [Paras 4, 6, 7]Commissioner of Police, Delhi to personally enquire into the ED's communication and file a report within four weeks; enquiry not to be delegated.Transfer of undertrial prisoners for preservation of investigation integrity - video conferencing facility for court proceedings - Sanjay Chandra and Ajay Chandra are to be shifted from Tihar Central Jail to Arthur Road Jail and Taloja Central Jail respectively, with video conferencing facilities to enable court attendance. - HELD THAT: - In light of the material on record indicating irregularities within Tihar Central Jail that could undermine the authority of the Court and derail the ongoing investigation, the Court ordered the transfer of the two accused to specified prisons in Mumbai. The order also mandated that the receiving jails provide video conferencing facilities so that the accused may record their presence in court proceedings as required. The Registrar (Judicial) was directed to notify the Director General of Police, Maharashtra to make immediate arrangements for housing the accused at the designated jails. [Paras 7, 8, 9]Accused to be transferred to Arthur Road Jail and Taloja Central Jail respectively; video conferencing facilities to be provided; Registrar to inform DGP, Maharashtra.Judicial supervision and expeditious conduct of investigation - The Directorate of Enforcement was directed to proceed expeditiously with its investigation and to place a status report before the Court within four weeks. - HELD THAT: - The Court noted that the investigation by the Directorate of Enforcement had been proceeding at a tardy pace. Emphasising the need for timely progress given the gravity of the allegations and the impediments recorded, the Court impressed upon the ED to expedite the investigation and to file a status report within four weeks. The Special Leave Petition was listed for hearing after six weeks with a requirement that ED file an updated status report. [Paras 3, 10, 12]ED directed to proceed expeditiously and file a status report within four weeks; matter listed after six weeks.Production of forensic audit reports to investigating agency in sealed cover - Interim and final reports of the court appointed forensic auditors (M/s Grant Thornton) shall be furnished to the Directorate of Enforcement and handed over in a sealed cover to designated counsel for onward transmission. - HELD THAT: - To assist the investigation and in view of the earlier finding about incomplete access to electronic records, the Court directed that copies of both interim and final forensic audit reports prepared by M/s Grant Thornton be supplied to the ED. The reports were to be furnished and handed over in a sealed cover to Ms. Shraddha Deshmukh, counsel assisting the Additional Solicitor General, for onward transmission to the ED, thereby ensuring the investigating agency had the auditors' material while preserving appropriate handling. [Paras 11]Forensic auditors' interim and final reports to be furnished to ED and delivered in a sealed cover to designated counsel for transmission to ED.Routine interlocutory directions and issuance of notices - The Court issued or listed various interlocutory directions: deletion of a respondent, issuance of notices to the Ministry of Corporate Affairs and other respondents, timelines for filing replies and listing of interlocutory applications, and directions to the new Board of Unitech Ltd to respond. - HELD THAT: - Alongside the primary directions to protect the integrity of the investigation and custody arrangements, the Court dealt with several interlocutory applications by granting deletion of a respondent, issuing notices returnable in specified periods to the Ministry of Corporate Affairs and other parties, permitting dasti service, directing timelines for filing replies to interlocutory applications, and directing the new Board of Unitech Ltd to file responses within three weeks. These are procedural orders to ensure expeditious adjudication of pending interlocutory matters in the batch of matters before the Court.Procedural interlocutory directions were issued as recorded, including deletion of a respondent, service and reply timelines, and listing directions for interlocutory applications.Administrative renewal of fixed deposit receipts in court records - Office report noting an FDR maturing on 24 September 2021 was acted upon by directing renewal for a further year. - HELD THAT: - The Court recorded the office report about an FDR bearing a specified account number maturing on 24 September 2021 and directed that the FDR be renewed for a further period of one year. This is an administrative direction to preserve the financial instrument in question pending further orders.FDR to be renewed for a further period of one year.Final Conclusion: The Court recorded obstruction to the court ordered forensic audit due to incomplete access to electronic records, curtailed special prison facilities for the accused, ordered a personal enquiry by the Commissioner of Police into alleged complicity of jail staff, directed transfer of the two accused to specified Mumbai jails with video conferencing facilities, required the ED to expedite investigation and file a status report within four weeks, and ordered that the forensic auditors' reports be furnished to the ED in a sealed cover; several interlocutory and administrative directions were also issued as recorded. Issues Involved:1. Lack of cooperation with forensic auditors.2. Misuse of jail facilities by the accused.3. Progress of investigations by the Directorate of Enforcement.4. Transfer of accused to different jails.5. Communication and cooperation between various authorities and the court.Detailed Analysis:1. Lack of Cooperation with Forensic Auditors:The court noted that the forensic auditors from M/s Grant Thornton were not provided with complete access to all electronic records, including those in possession of the Chief Financial Officer of Unitech Limited. This lack of cooperation severely undermined and obstructed the auditors' task, hindering the effective implementation of the court's order for a forensic audit.2. Misuse of Jail Facilities by the Accused:The court recalled that the accused, former Directors of Unitech Limited, were lodged in Tihar Central Jail and directed that they shall not be entitled to any additional facilities apart from those available in the normal course as per the jail manual. This was communicated to the Jail Superintendent of Tihar Central Jail. The status report dated 16 August 2021 revealed that the accused engaged in illegal activities by flouting the jail manual, making transfers of assets, dissipating the proceeds of crime, influencing witnesses, and attempting to derail the investigation.3. Progress of Investigations by the Directorate of Enforcement:The Directorate of Enforcement filed two status reports dated 5 April 2021 and 16 August 2021, indicating the progress of the investigations. The court expressed concern over the irregularities within Tihar Central Jail, which undermined the court's authority and could derail the investigation. The court directed the Commissioner of Police, Delhi, to conduct an immediate enquiry into the contents of the communication dated 16 August 2021 from the Directorate of Enforcement and to hold accountable all officers and staff of Tihar Central Jail complicit in the violation of law.4. Transfer of Accused to Different Jails:Given the irregularities and misuse of jail facilities, the court ordered the transfer of the accused, Sanjay Chandra and Ajay Chandra, from Tihar Central Jail to Arthur Road Jail, Mumbai, and Taloja Central Jail, Mumbai, respectively. The court also directed that video conferencing facilities be made available at these jails to enable the accused to record their presence in court proceedings.5. Communication and Cooperation Between Various Authorities and the Court:The court directed that copies of the interim and final reports of M/s Grant Thornton be furnished to the Directorate of Enforcement. The court also ordered the Registrar (Judicial) to forward a copy of the communication to the Director General of Police, Maharashtra, for necessary arrangements for housing the accused. The court impressed upon the Directorate of Enforcement to expedite the investigation and to apprise the court of the status within four weeks.Additional Orders:- Permission was granted to delete the second respondent from the array of parties in IA No 81660/2021 & IA No 81663/2021.- Notices were issued to the Ministry of Corporate Affairs and other relevant parties, with specific returnable periods.- The new Board of Management of Unitech Ltd was directed to file its response to interlocutory applications within three weeks.- The office report indicated the renewal of an FDR for a further period of one year.Conclusion:The court's judgment addressed multiple issues, including the lack of cooperation with forensic auditors, misuse of jail facilities by the accused, progress of investigations, and the necessity for inter-authority communication and cooperation. The court took significant steps to ensure the integrity of the investigation and the enforcement of its orders.