Court rejects CBI shutdown report in urea scam case, says agency sat on it

The CBI was blushed after a special tribunal rejected its closure report filed after a 22-year delay in a case related to the 1995 urea scam and asked the agency’s director to ensure that such a “miscarriage of justice” does not happen again.

Special Judge Surinder S Rathi did not mince words in his recent order as he pointed out that the last investigation into the case was carried out by the Central Bureau of Investigation (CBI) in 1999 and it was obvious that the agency had sat on the report.

He ordered the co-director of the CBI’s prestigious Anti-Corruption Unit 1 to investigate the matter and submit his report.

“Evidently, when the current final report was tabled, the IO and relevant SP conveniently did not discuss anything about this 22-year delay, even if given the opportunity. Such overt and deliberate silence to explain the delay is legally unacceptable.

“It is obviously a cause for concern for this Court and should also be a cause for concern for the head of the investigative agency, ie the director of the CBI,” the judge said.

The CBI Director will look into the matter and take the necessary steps as well as steps to ensure that such a “miscarriage of justice” does not happen again, he said.

“It is not CBI’s case that an investigation is ongoing into the case after 1999 until 2021… It is unclear why the same (final report) was withheld and what the withholding has had to serve,” noted the court.

The CBI had registered the urea scam case on May 19, 1996, on allegations that the defendants had participated in a criminal conspiracy and deceived the National Fertilizer Limited (NFL) out of Rs 133 crore.

In the main case, several NFL officials, private businessmen and former PV Prime Minister Narsimha Rao’s nephew, B Sanjeeva Rao, were convicted.

The case in which the CBI filed its closure report was filed on June 4, 1997 and relates to the supply of one lakh metric tons of urea. The CBI had appointed former NFL MD CK Ramkrishnan and Executive Director DS Kanwar, Managing Director of Sai Krishna Impex Hyderabad-based M Sambasiva Rao and S Nuthi of US-based Alabama International INC to its FIR .

The agency filed its closing report against those defendants in January 2021, saying no pecuniary loss was suffered in the case.

It was alleged that Ramkrishnan and Kanwar made repeated concessions to Sanjeeva Rao and Nuthi who failed to provide urea, the court noted in its order.

Under the terms, breach of contract would have resulted in forfeiture of the Performance Guarantee (PG) bond to the NFL.

The Special Court pointed out that instead of waiving a two per cent PG bond, cumulatively worth USD 3.01 lakh (current value over Rs 2.28 crore), for repeatedly failing to supply urea in accordance with Letters of Intent (LOI), Kanwar has delivered on these obligations. on January 8, 1996, in Nuthi and the NFL was forced to purchase urea from a third party.

Citing the statement of an additional NFL manager, a prosecution witness, the court said Sambasiva Rao was introduced to Ramakrishnan by Sanjeeva Rao.

“I find no iota of credibility in the conclusion reached by the investigator and the CBI SP when they say that no pecuniary loss has been suffered by the government. The PG bonds (having a) value (of) $3.01 lakhs in 1995 (current value Rs 2.28 crores) constituted property of value…,” the court pointed out in its order dismissing the CBI shutdown report.

There was enough material to summon all four defendants, he added.

Reviewing the records of the case, the special judge said that the last inquest in this case was conducted on March 11, 1999, and then on March 17, 1999, when the draft final report was prepared.

“Thereafter, only two case logs were prepared, the last being (on) May 12, 1999. Obviously the agency sat on it and the final report…was only filed before the special judge only on January 12, 2021, that is to say after a good mammoth gap of 22 years”, noted the court.

The court cut the CBI back to basics, pointing out that binding statutory laws show that investigative bodies are “obligated” to complete the investigation without unnecessary delay and forward the investigation report to the competent court for take cognizance of it “without delay”.

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