MADURAI: The Madurai Bench of Madras High Court on Thursday came down heavily on the Tamil Nadu government and the Central Bureau of Investigation (CBI) for lack of coordination while dealing with financial fraud cases, and directed the chief secretary, government of Tamil Nadu, and the CBI zonal head to review the procedural delays and bring in internal accountability mechanisms to prevent such lapses in future.
"Both the CBI and the State government must be reminded - in no uncertain terms - that their loyalty lies with the Constitution and the rule of law, not to convenience, comfort, or political expediency," Justice B Pugalendhi observed and advised the two to work in tandem and not create roadblocks in the investigation.
The order was passed on two petitions filed by the State Bank of India (SBI) last year, seeking action on its complaints against two private firms that defrauded the bank of a total of nearly Rs 17 crore by obtaining loans using fraudulent documents in 2022 and 2023. Since the CBI did not register a case, the bank was constrained to move the court.
While the Additional Advocate General M Ajmal Khan submitted that the state government had already granted consent, the special public prosecutors for CBI claimed they could not register a case as the state's consent was restricted only to the named accused, leaving out the words 'unknown public servants and private individuals'.
The agency apprehended that this may pave room for the unknown accused, who may be added to the case during the course of investigation, to challenge that a valid consent was not obtained against them before registration of the case.
Hearing this, the judge slammed the agency saying that was not a justification for non-registration of FIR. Once jurisdiction has been validly conferred through consent to investigate the offence, the CBI need not seek fresh or post-facto consent each time a new individual - public or private - is found connected with the crime, the judge observed.
The CBI ought to have proceeded with the probe and thereafter, sought for a clarification, instead of sleeping over the matter, he pointed out and said CBI allowed procedural obstacles to take precedence over its statutory duty.
He also criticised the conduct of the state government in the matter by noting that the consent to investigation was not issued voluntarily, but only after the bank was forced to approach the court, which exposes the state's reluctance to act even in the face of prima facie fraud involving public funds.
Even when consent was finally given, it was artificially narrowed to named private individuals, while the complaints clearly suggested collusion involving unknown public officials and private persons, the judge noted and blamed the state for intentional obstruction of the investigative process.
This kind of attitude has put the public's faith in the justice system at stake, the judge observed and issued a series of directions to the state and the CBI for administrative review of the coordination between them in matters involving high-value financial frauds.