Suspend Tihar officials for helping Unitech promoters, says top court

The Supreme Court on Wednesday ordered the Delhi Police to immediately suspend officials of Tihar Jail and lodge a criminal case against them for helping former Unitech promoters Sanjay Chandra and Ajay Chandra, accused of cheating and diverting money of homebuyers, in carrying out illegal activities from jail.

The Chandra brothers, who are presently lodged separately at Mumbai’s Arthur Road Jail and Taloja Central Jail, were removed from the Tihar Jail after the Enforcement Directorate (ED) probing alleged diversion of funds by Unitech found that witnesses in the case were being influenced and proceeds of crime dissipated in order to derail the investigation.

On August 26, the Supreme Court directed the Chandra brothers to be shifted to Mumbai and ordered Delhi Police commissioner Rakesh Asthana to conduct a thorough probe into the matter.

Submitting his report in a sealed cover on September 28, Asthana detailed the role played by jail officials in helping Chandra brothers and exposed chinks existing within the jail administration that needed to be remedied at the earliest.

Additional solicitor general (ASG) KM Nataraj took the court through the report, which specifically named the jail officials involved and disclosed the next step of the Delhi Police to lodge a criminal case with the crime branch for the offences of corruption by a public servant under the Prevention of Corruption Act, and for destruction of evidence and criminal conspiracy under Section 201 and 120B of the Indian Penal Code.

A bench of Supreme Court justices Dhananjaya Y Chandrachud and MR Shah said: “We direct a full-fledged criminal investigation against the persons mentioned in the report and also other unknown persons whose identities will be revealed during investigation… In the meantime, we direct that the officials of Tihar Jail found prima facie complicit in course of enquiry be placed under suspension pending further proceedings.”

To ensure such incidents do not occur in the future, the court directed the Union ministry of home affairs (MHA) to come up with a proposed action plan on 23 points highlighted in Asthana’s report.

“We direct the ministry of home affairs to respond to the suggestions contained in the report of commissioner of police so that remedial steps can be taken immediately, in terms of the report and in view of violation of Jail Manual, for enhanced prison management.”

The top court gave the Centre four weeks to submit its action plan.

The apex court also examined investigation reports submitted by the Serious Fraud investigation Office (SFIO) and ED. Additional solicitor general Madhavi Divan, appearing for ED and SFIO, said: “Some parties are not cooperating with the probe.” She pointed out to the arrest of three people in the case, including Sanjay Chandra’s wife Preeti Chandra and father, 82-year-old Ramesh Chandra, the founder of Unitech.

Senior advocate Vikas Singh, appearing for Sanjay Chandra, objected to secret reports against him being considered by the court and demanded a copy of the forensic audit report prepared by M/s Grant Thornton to be supplied to him. The bench refused as it said that this report was the basis for ED and SFIO to proceed against the accused that cannot be shared when the investigation was still on. Singh invited the wrath of the court as he accused the judiciary of doing injustice to his clients by not sharing the reports despite Unitech offering 100,000 flats to homebuyers.

He disputed the conclusion arrived at by forensic auditors that money was diverted by the company without hearing them once and said the court will have to repent later if allegations are proved wrong during trial. He also questioned the arrest of Chandra’s father and wife by ED when the investigation was pending since 2018.

The bench told the senior counsel to mind his words. “There should be some sense of responsibility in addressing the court. Is this the way to argue that you make allegations against the court and say you will have to repent later? Do not remind us of the law of the land. The ED has investigated independent of the Grant Thornton report. So don’t pitch your case too high.”

Regarding the fresh arrests by ED, the bench was conscious of its duty not to disclose contents of an ongoing investigation, but rebutted Singh by saying: “There are reasons and reasons to arrest both of them (father and wife). We cannot disclose to you what is in the report, but this much we can say they are not innocent.”

Giving further time for ED and SFIO to conduct further probe and file fresh status reports, the bench posted the matter to November. By the next date, the action plan on Tihar Jail by the ministry of home affairs shall also be made available, the bench held.

The Chandra brothers are facing prosecution since 2015 in separate cases accusing them of cheating homebuyers of their hard-earned investments in 74 Unitech housing projects.

A forensic audit ordered by the Supreme Court in 2018 revealed that the two accused siphoned off ₹1,749 crore to foreign countries which included Cyprus to which an amount of ₹290 crore was traced by auditor Samir Paranjpe, working with Forensic and Investigation Service of M/s Grant Thornton India.

The audit report concluded that the Chandra brothers collected more than ₹14,200 crore from nearly 30,000 homebuyers as investment in their 74 projects. It was the claim of Unitech that they spent close to ₹26,000 crore in the projects, beyond what they received from homebuyers.