The Court gave both agencies instructions to find the truth about the situation and prosecute businesses that overinvoiced in accordance with the law.
The Central Bureau of Investigation (CBI) and the Directorate of Revenue Intelligence (DRI) were directed by the Delhi High Court on Tuesday to “meticulously and expeditiously” investigate the claims of over-invoicing made by power companies affiliated with the Adani Group, Essar Group, and other groups.
Justices Suresh Kumar Kait and Mini Pushkarna, sitting as a division bench, urged the authorities to “unearth actual factual position” and “take appropriate action” legally against the companies that violated the law.
“In the peculiar facts of these cases, this Court finds it appropriate to direct the respondents to meticulously and expeditiously look into the allegations of the petitioners to unearth actual factual position and take appropriate actions against the erring companies, if any, as per law,” the Court stated.
When deciding on public interest litigation petitions (PILs) submitted by activist Harsh Mander and the non-governmental organization Center for Public Interest Litigation and Common Cause, the directives were given.
In order to look into the claims, the petitions, which were submitted in 2017, asked for the formation of a Special Investigation Team (SIT) led by a retired Supreme Court judge.
The petitioners cited show cause notices from DRI dated May 15, 2014, and March 31, 2016, which stated that intelligence had shown that different Adani Group and Essar Group entities were engaging in egregious overvaluation of imported goods (zero or low duty rated) in order to divert funds from publicly traded companies overseas.
During the case’s arguments, the petitioners contended that the Adani Group’s promoters were manipulating the stock prices of their listed companies by citing the OCCRP report and the Hindenburg Research Report from January 24, 2023.
The DRI informed the Court that although the investigation has been broken up into several cases, the process of conducting the investigation is very time-consuming and complex because of the volume of cases, which involve multiple stages and multiple countries.
During the last hearing, DRI provided some documentation demonstrating that there are ongoing legal cases against a number of companies, including those owned by the Adani and Essar Groups.
According to the CBI, two cases have been reported, and both are still being investigated.
After reviewing the case, the Court concluded that no intervention is necessary on this count because the claims regarding inflated tariff rates are decided through an open bidding process that follows Central Government guidelines.
Regarding the SIT investigation, the Court noted that it is appropriate to order the authorities to investigate the claims as soon as possible because the petitioners feel that the respondent authorities have not acted appropriately and because several proceedings are still pending before various other forums.
After giving these instructions, the court resolved the plea.
[Centre for Public Interest Litigation and Anr v Union of India and Ors]