Daya Sindhu Sreehari N.S vs Central Bureau Of Investigation
2021 Latest Caselaw 1749 Ker

WP(C).No.14585 OF 2013(S)        -1-

              IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

           THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

                                   &

              THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

     MONDAY, THE 18TH DAY OF JANUARY 2021 / 28TH POUSHA, 1942

                       WP(C).No.14585 OF 2013(S)


PETITIONER/S:

                DAYA SINDHU SREEHARI N.S.
                S/O N.S. PRABHU, RESIDING AT GURUKRUPA, EAST OF
                LIBRARY, A.N PURAM, ALAPPUZHA DISTRICT 688011

                BY ADVS.
                SRI.SREELAL N.WARRIER
                SMT.ANCY ALEX
                SMT.NEETHU PREM
                SRI.B.RAGHUNANDANAN

RESPONDENT/S:

       1        CENTRAL BUREAU OF INVESTIGATION
                CBI BUILDINGS, KALOOR, COCHIN 682017, REPRESENTED
                BY THE SUPERINTENDENT OF POLICE, CENTRAL ZONE

       2        INDIAN RARE EARTHS LIMITED
                ECIL BUILDING, PLOT NO 1207, VER SAVARKAR MARG,
                PRABHADEVI, MIMBAI 600028, MAHARASHTRA,
                INDIA,REPRESENTED BY ITS CHAIRMAN

       3        COCHIN MINERALS AND RUTILES PVT LTD,
                INDUSTRIAL DEVELOPMENT AREA, MUPPATHADAM, EDAYAR
                KOCHI 683110, REPRESENTED BY ITS CHAIRMAN

       4        THE KERALA MINERALS METALS LTD. (A GOVERNMENT OF
                KERLA UNDERTAKING)
                SANKARAMANGALAM, CHAVARA, KOLLAM, KERALA, INDIA
                691583, REPRESENTED BY ITS CHAIRMAN

       5        DEPARTMENT OF ATOMIC ENERGY (DAE)
                HAVING ITS OFFICE AT ANUSHAKTI BHAVAN, C.S.M MARGM,
                MIMBAIU 400001, MAHARASHTRA, INDIA, REPRESENTED BY
                THE SECRETARY TO THE GOVERNMENT
 WP(C).No.14585 OF 2013(S)        -2-

               R1   BY SRI. SASTHAMANGALAM S. AJITHKUMAR, SC
               R2   AND R3 BY SRI. M. GOPIKRISHNAN NAMBIAR
               R4   BY SRI. K. ANAND (SR.)
               R5   BY SRI. P. VIJAYAKUMAR, ASG

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
18.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.14585 OF 2013(S)            -3-




                             JUDGMENT

Dated this the 18th day of January, 2021

S. Manikumar, C. J.

Petitioner has sought for a mandamus commanding the

respondents to report this Court, as to whether any application from

the Central Bureau of Investigation (CBI), represented by its

Superintendent of Police, Central Zone, Cochin, 1st respondent, has

been made to the Department of Atomic Energy (DAE), represented

by the Secretary to the Government, Mumbai, the 5 th respondent, for

sanction to investigate into the illegality in the process of sale of the

Ilmenite by the Indian Rare Earths Limited (IREL), represented by its

Chairman, Mumbai, 2nd respondent, and if so, what orders have been

issued.

2. Petitioner has also sought for a mandamus directing the CBI,

1st respondent, to conduct a fair investigation into the illegal sale of the

Q grade Ilmenite by the IREL, 2 nd respondent, to the Cochin Minerals

and Rutiles Pvt. Ltd. (CMRL), represented by its Chairman, Kochi, 3 rd

respondent, and the Kerala Minerals & Metals Ltd. (KMML),

represented by its Chairman, Kollam, 4th respondent, respectively.

3. Short facts leading to the filing of the writ petition are as

hereunder:-

Petitioner has alleged the arbitrary and corrupt acts by persons in

management of IREL, 2nd respondent, a Government of India owned

company, and apparently well connected and influential in the matter

of distribution of the scarce natural resource like Ilmenite, by private

negotiation, to private sector companies, involved in commercial

activities, without supplying the same to Government companies, for

very important and essential purposes to be fulfilled in the interest of

general public, including manufacturing of satellite / space research

vehicles, among other.

Petitioner has submitted that Ilmenite is a very scarce natural

resource, available in limited areas in India, the best quality (Q-grade),

being mined in Quilon (Kollam) in Kerala. IREL, the 2 nd respondent, a

Government of India undertaking, has the mining facility for the same

at Kollam. Ilmenite (Quilon grade), is the best among available for

developing Titanium Sponge, a very light weight material, which is

essential for the KMML, 4th respondent, a Government of Kerala

undertaking, for its Government projects, including that of

manufacturing satellites, aircrafts, space research equipments, among

others.

According to the petitioner, KMML, the 4 th respondent, has on

ever so many times, requested the IREL, 2 nd respondent, for supply of

the Q-grade Ilmenite, to KMML, for its such purposes, the same has

been refused, and was not delivered, except to the extent of 100 MT

only, while the demand is for much higher quantity. During the period

of July, 2011 to August, 2011 itself, IREL's exit passes confirms sale

above 6,500 Metric tons to KMRL, the 3rd respondent private sector

company, as against the above sale of 100 Metric tons to the 4 th

respondent Government company's needs. Even the said limited sale

of the said rare natural resource by the 2 nd respondent Government

owned company to the 4th respondent Government owned company

was at a price (Rs. 17,000/-), which is much higher than the price (Rs.

12,650/-) to the 3rd respondent private sector company, which does not

serve the more important purposes of the Government, or the general

public, and only manufactures less important commercial products

like cosmetics and paints. The said value of Rs. 12,650/- for Q-grade

supplied by the IREL, 2nd respondent, to its preferred 3 rd respondent

private company, is much less than the low quality, less preferred, and

low value HOR-grade-Ilmenite from Orissa, which itself is priced at

Rs. 15,000/-.

Petitioner has also submitted that the Managing Director of the

3rd respondent private sector company is the retired former senior

official of the 2nd respondent Government Company and high level

collusion and manipulation is per se evident in the transactions as a

whole, more so, when secret understanding and dealings are

impossible with the 4th respondent Government sector company, to

the decision makers of the 2nd respondent company. The same has

caused illegal monetary loss to the Government and made the

important and essential productive activities of the 4 th respondent

Government company literally stagnant and counterproductive, for

want of good resources.

The petitioner has contended that though the CBI, 1 st

respondent, had conducted surprise search in the premises of the

IREL, 2nd respondent, and discovered considerable information

regarding the said illegal and corrupt acts, and bring the guilty before

the law, there has not been any investigation on the issue. Though

attempts had been made by some responsible citizens to obtain

sufficient related documented information, including by resort to the

Right to Information Act, 2005, they have been silenced by threat of

victimization. The information otherwise received confirms that

though CBI, the 1st respondent, had obtained sufficient information

during the surprise search, the 1st respondent had made an application

for sanction from DAE, the 5th respondent, the authority concerned, to

proceed with investigation, against the highly connected and

politically influential persons, the said application has been kept

without any decision, despite lapse of more than 18 months, as against

the clear directions of the Hon'ble Supreme Court under various

reported decisions, regarding the period within which such

applications for sanction to investigate has to be disposed off.

The petitioner seriously apprehended that the application of the

CBI, 1st respondent, for sanction to proceed with the investigation into

the above illegal and corrupt acts and the involvement of senior

Government officials and politicians, is kept pending by DAE, the 5 th

respondent, without orders, solely due to the political intervention on

the free and independent investigation into the said serious crimes, to

safeguard the influential Government servants and the politicians, who

have been benefitted in the illegal deals at the detriment of the State,

and the general public, by such acts.

Hence, in public interest, the petitioner has sought for

appropriate directions, including direction to the CBI, 1 st respondent,

to investigate into the said illegal distribution or allocation of the rare

natural resources, and bring the guilty before law, even in the absence

of the permission by the authority for the purpose, before relevant

materials are destroyed, altered or removed, and to report to this

Court, of the acts taken pursuant to such directions to be issued by this

Court.

4. CBI, the 1st respondent, has filed a statement in the writ

petition, wherein the 1st respondent has submitted that, a self contained

note was sent on 25.07.2012 by the CBI, to the Chairman, DAE, 5 th

respondent, for according sanction under Section 6A of the Delhi

Special Police Establishment Act, 1946, since three of the officials,

who were instrumental in preparing the discriminative pricing policy,

as detailed above, were of the level of Joint Secretary and above.

5. CBI, the 1st respondent, has further submitted that, after the

filing of this instant petition before this Court under Article 226 of the

Constitution of India, DAE, the 5 th respondent, vide their letter

No.3/10(22)/2011/PSU/7947 dated 24.06.2013, has denied sanction

under Section 6A of the Delhi Special Police Establishment Act, 1946,

as sought for by CBI, and that the CBI cannot pursue this matter any

further, because of the limitations put on it, by the provisions

contained under Section 6 A of the Delhi Special Police Establishment

Act.

6. Chairman and Managing Director, Indian Rare Earths

Limited, Mumbai, the 2nd respondent, has filed a counter affidavit in

the writ petition, stating that the mining operation carried on in

Kerala, by the IREL, 2nd respondent, is on the basis of mining lease

granted to it by the Government of Kerala, under the provisions of the

Mines & Minerals (Development & Regulation) Act, 1957 (the

MMDR Act). It is further submitted that the terms of the various

orders granting mining lease to the IREL, 2 nd respondent, inter alia

contemplates that, the 2nd respondent should supply Ilmenite regularly

from its Chavara plant, to CMRL, the 3 rd respondent, to their full

requirement.

7. It is further submitted that, following the joint surprise check

by the officers of the CBI, 1st respondent, on 19.10.2011, at IREL, the

2nd respondent, the Superintendent of Police, CBI, ACB, Cochin

addressed a letter to the Chairman, DAE, 5th respondent, enclosing

therewith a self- contained note, regarding the surprise check. It was

requested that the prudence (commercial & administrative) of the

decisions of IREL, the 2nd respondent, may be examined. It is learnt

that the DAE, 5th respondent, thereafter sent a detailed reply to the

Superintendent of Police, CBI, ACB, Cochin, explaining the

circumstances under which 2nd respondent's pricing policies were

fixed etc., and finding absolutely, no fault with the decisions taken by

the 2nd respondent. It is also submitted that thereafter, there has been

no further communication in this regard between CBI, the 1 st

respondent and DAE, the 5th respondent, with regard to this matter.

Thus, there is absolutely no basis for the allegations in the writ

petition, and any alleged loss to IREL, the 2 nd respondent, is an

exclusive imagination and presumption of the petitioner.

8. Material on record discloses that the petitioner has filed a

reply affidavit to the same.

9. On behalf of the Deputy Secretary, Department of Atomic

Energy, Mumbai, 5th respondent, a counter affidavit has been filed

stating that, as requested by the CBI, 1st respondent, the DAE, 5th

respondent, conducted a detailed examination of the matter, by calling

upon the relevant records, evidence and clarifications on various

issues raised in the self contained note. On careful examination of all

the issues raised in the self contained note, facts, information available

on record, evidence, clarifications sought, and analysis of the same,

DAE, the 5th respondent, had arrived at the conclusions that the

officials of the IREL, 2nd respondent, have complied with the policies

of the company, without any prejudice or intended deviations. DAE,

the 5th respondent, submitted that, documentary evidence (in the

manner of publications in international trade journals) is available on

record to substantiate various facts considered in the pricing, in

context of the present technological regime, environment and globally

accepted titanium industry practices. Further, it is pertinent to mention

that technology acceptance is dynamic in nature, and keeps

continuously evolving over time.

10. Company Secretary of the Kerala Minerals & Metals Ltd.

(KMML), 4th respondent, has also filed a counter affidavit, denying

the averments made in the writ petition. KMML, the 4 th respondent,

has submitted that, the raw material, Ilmenite, mined from the mines

of KMML, is not sufficient to meet the requirements of the company.

KMML always used to purchase Ilmenite from IREL, 2 nd respondent.

KMML is in need of the raw material for production and when there

was no supply from IREL; KMML had to depend on private

manufacturers of beneficiated Ilmenite.

11. KMML, the 4th respondent, has further submitted that, it is

not correct to say that the KMML is a competitor of IREL, the 2 nd

respondent, for the reason that, the Ilmenite mined from the mining

areas allotted to KMML, was not sufficient to meet its own production

requirements. Further, it is also not correct to say that the KMML

stopped sourcing Ilmenite from the IREL, 2nd respondent, on account

of their own production of Ilmenite.

12. It is submitted that even though KMML, the 4 th respondent,

has its own mines, it has been requesting IREL, 2 nd respondent, for

Ilmenite, to fill the shortfall of raw material requirement. In the earlier

years, for the production of TiO2, the raw material requirement was

met with production from its own mines. But with the raw sand feed

becoming lean in Ilmenite, and percentage fall in the beach collection

of sand, and increase in production capacity of Ti02, the requirement

of Q Grade Ilmenite became important for KMML, and KMML can

only be considered as a trusted customer, and not as a competitor, for

price fixing. The dual pricing policy of IREL discriminates KMML

compared to the CMRL, 3rd respondent. It is also not correct to hold

that KMML will be hoarding valuable raw material with a view to

export it, as KMML itself is having shortage of raw material, required

for its production of TiO2. KMML was never engaged in export of

Ilmenite, or sale of Ilmenite, in the open market. KMML has also

submitted that, the various purchase requests that KMML has placed

for procurement of Ilmenite from the IREL, 2 nd respondent, would

prove that, KMML is facing shortage of raw material, and is forced to

pay a higher price, so as to have its units functioning.

13. IREL, the 2nd respondent, has also filed a counter affidavit,

which is almost on the same and similar, and therefore it does not

require any reproduction.

14. Alleging irregularities, by the abovesaid companies, and

though CBI has conducted a search and thereafter made an application

to the DAE, the 5th respondent, for sanction for prosecution, and the

said application was pending for more than 18 months, without orders,

instant writ petition has been filed, for the reliefs as stated supra.

15. From the material on record, it is deduced that CBI, 1 st

respondent, had sent a detailed note dated 25.07.2012 to the

Chairman, DAE, 5th respondent, for according sanction under Section

6A of the Delhi Special Police Establishment Act, 1946, since

according to CBI, three of the officials were instrumental in preparing

the discriminative pricing policy, were at the level of Joint Secretary

and above.

16. However, DAE, the 5th respondent, vide their letter No.

3/10(22)/2011/PSU/7947 dated 24.06.2013, has denied sanction under

Section 6A of the Delhi Special Police Establishment Act, 1946.

17. Though CBI, the 1st respondent, has contended that, DAE,

the 5th respondent, has shown enthusiasm while discussing technical

facts and findings, other respondents have disputed the allegations

made by the CBI.

18. From the above, it could be seen that the 1 st prayer sought

for in the writ petition has been answered by CBI in their counter

affidavit.

19. Though as early as on 24.06.2013, permission has been

declined by DAE, 5th respondent, meanwhile, CBI, the 1st respondent,

did not pursue the matter, and at paragarph No. 18 of the counter

affidavit filed by the CBI, it is stated that CBI cannot pursue the

matter, because of the limitations contained in Section 6A of the Delhi

Police Establishment Act, 1946.

It could be further deduced that, CBI, the 1 st respondent, has not

challenged the proceedings dated 24.06.2013, declining permission

under Section 6A of the Delhi Special Police Establishment Act, 1946.

At this point of time, after nearly eight years, no mandamus can be

issued, directing CBI, the 1st respondent, to conduct investigation into

the alleged sale of Q grade Ilmenite by IREL, 2nd respondent to the

CMRL, 3rd respondent, and the KMML, 4th respondent, respectively.

Accordingly, writ petition is dismissed.

Sd/-

S.MANIKUMAR CHIEF JUSTICE

Sd/-

SHAJI P.CHALY JUDGE

Eb

///TRUE COPY///

P. A. TO JUDGE

APPENDIX PETITIONER'S/S EXHIBITS:

   EXHIBIT P1               WEBSITE PUBLICATION ABOUT 2ND
                            RESPONDENT

   EXHIBIT P2               WEBSITE PUBLICATION ABOUT 3RD
                            RESPONDENT

   EXHIBIT P3               WEBSITE PUBLICATION ABOUT 4TH
                            REPSONDENT