# Ms. Baba Beti v. State of U.P. & Ors

- **Citation:** (2024) 3 ILRA 1694
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-03-19
- **Case number:** Criminal Misc. Writ Petition No. 9949 of 2021
- **Bench:** Vivek Kumar Birla, Vinod Diwakar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ms-baba-beti-v-state-of-u-p-ors-51591
- **Pages:** 21

## Headnote

G.A., Sri R.P.S. Chauhan, Sri Satish Chaturvedi,
Sri Kuldeep Srivastava, Sri Gyan Prakash (Sr.
Advocate), Sri Sanjay Kumar Yadav, Sri G.S.
Chaturvedi (Sr. Advocate), Sri Aditya Gupta

Fair
investigation-Initially
the
petitioner
approached
this
Court
-seeking
a
fair
investigation in the impugned FIR- prayer was
modified to request the transfer of the
investigation to the CBI- petitioner became
aware of corporate fraud allegedly committed
by SKS Power Generation Limited-and its
holding
companies
through
a
newspaper
publication-the investigation was entrusted to
Economic Offences Wing, Varanasi Division-
Following the investigation the police filed the
closure report- Economic Offences Wing (EOW),
Varanasi
Division,
has
conducted
the
investigation with a predetermined in collusion
with the accused persons-such actions have farreaching implications for the integrity of the
criminal
justice
system-and
raise
serious
questions about the functioning of the policeCBI, New Delhi is directed to investigate a case
against SKSPGL and its affiliated companies-
which were involved in the illicit transfer of
substantial
funds
-the
Serious
Fraud
Investigation Office (SFIO), the Enforcement
Directorate, and regulatory bodies like the
Securities and Exchange Board of India (SEBI)
may also be consulted in appropriate cases of
financial crime-and suitable and adequate
direction be issued in this regard by the Chief
Secretary, Government of Uttar Pradesh, at the
earliest.

Writ Petition allowed. (E-9)

Case Law Cited

## Text

_Characters 0–39,823 of 71,008. This is a partial read: ask again with offset=39823 for what follows._

1694 INDIAN LAW REPORTS ALLAHABAD SERIES
the Additional City Magistrate. Moreover,
the petitioner has, in my view, not able to
convince this Court that there existed
manifest and patent violation of law which
should be corrected by this High Court in
exercise of its powers under Article
226/227 of the Constitution. In my opinion,
no case for interference in the impugned
order is made out and this petition is liable
to
be
dismissed
and
is
dismissed
accordingly.

15. The interim order is hereby
vacated.

16. As the matter is quite old,
therefore learned trial court/Executive
Magistrate concerned is directed to take up
the matter expeditiously and comply with
the order of the revisional court dated
08.05.2013.
----------
(2024) 3 ILRA 1694
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.03.2024

BEFORE

THE HON'BLE VIVEK KUMAR BIRLA, J.
THE HON'BLE VINOD DIWAKAR, J.

Criminal Misc. Writ Petition No. 9949 of 2021

Ms. Baba Beti ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Udai Chandani, Sri Vivek Srivastava, Sri
Gyanendra Kumar Mishra

Counsel for the Respondents:
G.A., Sri R.P.S. Chauhan, Sri Satish Chaturvedi,
Sri Kuldeep Srivastava, Sri Gyan Prakash (Sr.
Advocate), Sri Sanjay Kumar Yadav, Sri G.S.
Chaturvedi (Sr. Advocate), Sri Aditya Gupta

Fair
investigation-Initially
the
petitioner
approached
this
Court
-seeking
a
fair
investigation in the impugned FIR- prayer was
modified to request the transfer of the
investigation to the CBI- petitioner became
aware of corporate fraud allegedly committed
by SKS Power Generation Limited-and its
holding
companies
through
a
newspaper
publication-the investigation was entrusted to
Economic Offences Wing, Varanasi Division-
Following the investigation the police filed the
closure report- Economic Offences Wing (EOW),
Varanasi
Division,
has
conducted
the
investigation with a predetermined in collusion
with the accused persons-such actions have farreaching implications for the integrity of the
criminal
justice
system-and
raise
serious
questions about the functioning of the policeCBI, New Delhi is directed to investigate a case
against SKSPGL and its affiliated companies-
which were involved in the illicit transfer of
substantial
funds
-the
Serious
Fraud
Investigation Office (SFIO), the Enforcement
Directorate, and regulatory bodies like the
Securities and Exchange Board of India (SEBI)
may also be consulted in appropriate cases of
financial crime-and suitable and adequate
direction be issued in this regard by the Chief
Secretary, Government of Uttar Pradesh, at the
earliest.

Writ Petition allowed. (E-9)

Case Law Cited

1. State of Punjab v. CBI, (2011) 9 SCC 182.

2. State of West Bengal and others v.
Committee for the Protection of Democratic
Rights, West Bengal and others, (2010) 3 SCC
571.

3. Minor Irrigation & Rural Engg. Services, U.P.
v. Sahngoo Ram Arya, (2002) 5 SCC 521.

4. Air India Stationery Corpn. v. United Labour
Union, (1997) 9 SCC 377.

5. K.V. Rajendran v. Superintendent of Police,
CBCID South Zone, Chennai, (2013) 12 SCC
480.
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1695
6.Himanshu Kumar and others v. State of
Chhattisgarh and others, (2022) SCC OnLine SC
884.

7.Romila Thapar v. Union of India, (2018) 10
SCC 753.

8.Narmada Bai v. State of Gujarat, (2011) 5 SCC
79.

9.Sanjiv Rajendra Bhatt v. Union of India,
(2016) 1 SCC 1.

10.E. Sivakumar v. Union of India, (2018) 7 SCC
365.

11.Divine Retreat Centre v. State of Kerala,
(2008) 3 SCC 542.

12.CBI v. Rajesh Gandhi, 1997 Cri LJ 63.

13.H.N. Rishbud v. State of Delhi, (1954) 2 SCC
934.

14. Vinay Tyagi v. Irshad Ali, (2013) 5 SCC 762.

(Delivered by Hon'ble Vinod Diwakar, J.)

1. Heard Shri Gyanendra Kumar
Mishra, holding brief of Shri Vivek
Srivastava,
learned
counsel
for
the
petitioner through Video Conferencing,
Shri R.P.S. Chauhan, learned counsel for
the
Union
of
India,
Shri
Kuldeep
Srivastava,
learned
counsel
for
the
Enforcement
Directorate,
Shri
Satish
Chaturvedi, learned counsel for the State
Bank of India, Shri M.C. Chaturvedi,
learned
Additional
Advocate
General
assisted by Shri G.P. Singh, learned A.G.A.
for the State-respondents, Shri Gyan
Prakash, learned Senior Counsel assisted
by Shri Sanjay Kumar Yadav, learned
counsel for the CBI, Shri G.S. Chaturvedi,
learned Senior Counsel assisted by Shri
Aditya Gupta, learned counsel for SKS
Ispat and Power Ltd., and perused the
record.

2. Initially, the petitioner approached
this Court seeking a fair investigation in the
impugned FIR1. However, through an
amended application, the prayer was
modified to request the transfer of the
investigation to the CBI. For clarity, the
amended prayer is reproduced herein after:

"Issue a suitable writ, order or
direction in the nature of mandamus
transferring the investigation to the Central
Bureau of Investigation relating to First
Information Report No.0115 of 2021 dated
26.9.2021, u/s 120B, 420, 467, 468, 471,
474, 476, 506, 507, 511 IPC, P.S. Zafrabad,
District Jaunpur."

3. The petitioner, a teacher and social
worker, became aware of corporate fraud
allegedly
committed
by
SKS
Power
Generation Limited (hereinafter referred to
as "SKSPGL") and its holding companies
through a newspaper publication. The
incident unfolded on March 17, 2021, when
she visited the State Bank of India in
Jaunpur
to
inquire
about
certain
transactions involving the accused, Anil
Gupta. There, she was asked to submit
specific papers related to the reports upon
which she was basing her claims of serious
corporate
fraud.
Shortly
afterward,
unidentified individuals forcibly entered
her residence and warned her against
pursuing
the
case,
threatening
dire
consequences. Subsequently, individuals in
police
uniform,
purportedly
from
Chhattisgarh,
Madhya
Pradesh,
Maharashtra, and Uttar Pradesh, visited her
home, pressurizing her to withdraw the
complaint dated August 13, 2021, pending
before the court of the learned Chief
Judicial Magistrate in District Jaunpur,
Uttar Pradesh.
1696 INDIAN LAW REPORTS ALLAHABAD SERIES

4. On the direction of Chief Judicial
Magistrate,
Jaunpur,
the
FIR1
was
registered, and the investigation was
entrusted to Economic Offences Wing,
Varanasi Division, after approval from the
Home
Department.
Following
the
investigation the police filed the closure
report, primarily citing two reasons; firstly,
the petitioner was not found available at the
provided address, and secondly, the alleged
incident of assault mentioned in the
complaint was not substantiated.

5. While the investigation was
ongoing, the petitioner filed the present
petition
seeking
a
fair
investigation.
Subsequently, through an amended writ
petition, the petitioner requested the
transfer of the investigation to the Central
Bureau
of
Investigation
(hereinafter
referred to as CBI) for a thorough and
impartial investigation. This prayer was
made on various grounds, inter-alia:

5.1 M/s SKSPGL operates in the
electricity
generation
and
distribution
sector within the State of Chhattisgarh. The
company has established a coal-based
thermal power plant situated in Villages
Binjkote & Durramuda, Raigarh District,
Chhattisgarh. Additionally, in 2008, the
company was allotted two coal blocks for
the construction of a proposed third plant.

5.2 Between the financial years
2010-11 and September 2017-18, SKSPGL
obtained a loan amounting to Rs.6170 crore
from a consortium of banks, including the
State Bank of India, L&T Infrastructure
Finance Limited, PTC India Finance
Limited, and State Bank of Bikaner and
Jaipur. Specifically, State Bank of India
granted Rs.5170 crore, L&T Infrastructure
Finance Limited granted Rs.500 crore, PTC
India Finance Limited granted Rs.400
crore, and State Bank of Bikaner and Jaipur
granted Rs.100 crore.

5.3 Subsequent to acquiring the
loan for the construction and development
of the third project, SKSPGL allegedly
engaged in misappropriating the loan funds
through systematic corporate fraud. This
misappropriation
involved
various
methods,
including
transferring
a
significant portion of the loan amount to
British Virgin Islands and British Overseas
Territories of Bermuda through fictitious
companies.
These
funds
were
then
allegedly used to purchase SKSPGL's
assets in collaboration with bank officials,
violating RBI guidelines through group
holding
companies
registered
in
aforementioned off - shore locations.
Additionally,
some
loan
funds
were
purportedly utilized in the stock market and
the issuance of fraudulent Compulsorily
Convertible
Debentures
(CCDs)
for
unlawful gains. As a result of these
activities, SKSPGL, in conspiracy with 46
fictitious companies and public fund
institutions, is claimed to have caused
substantial losses to the government
totalling Rs.5000 crore.

5.4
Furthermore,
SKSPGL
purposefully initiated significant losses
deliberately and stopped repayments to its
lenders. Consequently, the lead banker,
SBI, seized the company's assets and
conducted a bidding process for their sale.
Agritrade Resources Limited emerged as
the successful bidder, agreeing to acquire
ownership
of
SKSPGL
through
its
subsidiary,
Entwickeln
India
Energy
Private Limited, and assume the entire loan
debt of Rs.5717 crore for a nominal sum
plus an additional cash margin. It's
noteworthy that Entwickeln India Energy
Pvt. Ltd.'s holding company, Agritrade
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1697
Power Venture Pvt. Ltd., and its subsequent
holding company, Fair Thermal Power Ltd.,
are incorporated in British Virgin Islands (
Tax heaven), with Agritrade Resources Ltd.
being incorporated in Hamilton, Bermuda,
and
listed
on
the
Singapore
Stock
Exchange.

5.5 Entwickeln India Energy
Private Limited acquired all shares from
SBI Trust at a significantly reduced price,
with the bank allegedly waiving the interest
rate on the loan and even reversing the
entire interest amount of Rs.820 crore,
considering
it
as
deemed
capital
contribution from the holding company.
Consequently,
SKSPGL
became
the
holding company of Entwickeln India
Energy Private Limited, allegedly resulting
in an illicit loss to the bank amounting to
Rs.5717 crore.

5.6
Moreover,
46
fictitious
companies were purportedly incorporated
at the behest of SKS Group Entities'
directors, engaging in round-tripping funds
through bogus share transactions, further
resulting in a huge profit in thousand of
crores for SKSPGL group companies.

5.7 SKSPGL and its affiliated
companies, including Berrio Mauritius,
allegedly acquired 1,370,000 Compulsorily
Convertible Debentures ("CCDs") from
Entwickeln India Energy Pvt. Ltd. at a
significantly undervalued price, resulting in
an
unlawful
gain
of
Rs.589
crore.
Additionally,
SKS
group
companies
purportedly made an investment through
Asia Power FDI Ltd., a Mauritius-based
company, into SKS group company,
Labheshwari Agencies Limited, at a
substantially
reduced
rate,
ultimately
leading
to
the
unauthorized
misappropriation
of
public
funds
amounting to Rs.524 crore.

5.8 Furthermore, certain entities,
such as Shree Krishan, Citywings, Compact
Agencies, and Labheshwari Agencies Ltd.,
allegedly engaged in high-value fraudulent
share transactions, earning an illicit amount
of Rs.400 crore without any genuine
production.

5.9 SKSPGL reportedly granted
interest-free unsecured advances totalling
Rs.173 crore to nine companies, which
were later reduced to Rs.50 crores in 2020.
However, no substantial evidence of receipt
against these advances was recorded.

5.10 Mahabir Gupta and Premlata
Gupta, upon assuming directorship of
Labheshwari Agencies Ltd. (hereinafter
referred to as 'LAL'), purportedly took over
investments made by Asia Power FDI Ltd.
into SKSPGL at significantly reduced rates.
This
included
the
acquisition
of
14,18,51,264 equity shares of Rs.10 each,
1,370,000 CCDs of Rs.1000 each, and
29,646 NCDs of Rs.10,000 each.

5.11
Additionally,
Entwickeln
India Energy Pvt. Ltd., a subsidiary of
Agritrade Resources Ltd., allegedly paid
Rs.400 crore, alongside SKS Ispat and
Power Ltd., both registered at the same
address. Subsequently, Entwickeln India
Energy Pvt. Ltd. purportedly merged into
SKS Ispat and Power Ltd. in 2019,
indicating unauthorized actions even after
investment by Agritrade Power Venture Pvt
Ltd., resulting in SKS Ispat and Power Ltd.
becoming
the
holding
company
of
SKSPGL. Both SKSPGL and SKS Ispat
and Power Ltd. are registered at 501-B,
Elegant Business Park, Kurla Road, J.B.
Nagar, Andheri East, Mumbai- 400059.
1698 INDIAN LAW REPORTS ALLAHABAD SERIES

5.12 Moreover, the lead banker,
SBI, through SBI Trusteeship, conducted a
bid process for the auction of SKSPGL's
assets, with Agritrade Resources Ltd. being
selected as the successful bidder. Lenders
agreed that Agritrade Power Venture Ltd.
would implement the Resolution Plan
through Entwickeln India Energy Private
Limited by acquiring 100% equity shares
of the company for Rs.300 crore and
assuming the existing fund-based debt of
Rs.57,34,87,84,874 for Rs.1720 crore. Out
of this amount, Rs.1600 crore was
borrowed by Agritrade Power Venture Ltd.
from Bank of Baroda.

5.13 Additionally, the State Bank
of India (SBI) purportedly under- write the
complete debt of Rs.5170 crore for the
project
in
December
2011,
without
conducting
proper
valuation
or
due
diligence as per RBI guidelines.

5.14 Furthermore, all companies
incorporated in British Virgin Islands,
British Overseas Territories of Bermuda,
Singapore, and Mauritius are allegedly
operated,
directly
or
indirectly,
by
owners/directors of SKS group companies.
Additionally,
SKS
Ispat
and
Power
Limited, River View Securities Pvt. Ltd.,
Ranbhumi Securities Pvt. Ltd., Evernew
Securities Pvt. Ltd., ACACIA Suppliers
Pvt. Ltd., Labheshwari Agencies Ltd.,
Shree Krishna Structures Ltd., Citywings
Agencies Pvt. Ltd., North West Coal Co.
Ltd.,
Sugouri
Distributors
Pvt.
Ltd.,
Gabaria Dealers Pvt. Ltd., Ambition
Commosales Pvt. Ltd. and Compact
Agencies Pvt. Ltd. besides other sham
companies.

6. The present petition was initially
listed on 2.12.2021, following which
learned counsel for CBI, SBI, ED, and the
State Government filed their respective
counter affidavits in response to the Court's
order, which were duly taken on record.
The operative part of the order dated
2.12.2021 is extracted herein below:

".......We further direct that even
if needful is not done by the petitioner or
she does not appear, in view of the
allegations in the FIR, the respondent no.
2, Director General of Police, Lucknow,
Uttar Pradesh shall look into the matter
and pass appropriate orders in the national
interest.

Respondent no. 1, State of Uttar
Pradesh
Through
Principal
Secretary
(Home) Govt. of Uttar Pradesh is also
directed to look into all such aspects in the
light of the allegations levelled in the first
information report as well as in the present
petition.

On the next date, learned A.G.A.
apart from report/ decision of the Director
General
of
Police,
Lucknow,
Uttar
Pradesh, he shall also place on record the
instructions from the respondent no. 1,
State of Uttar Pradesh Through Principal
Secretary (Home) Govt. of Uttar Pradesh.

In view of the allegations levelled
in the FIR and the magnitude of the fraud
in terms of money, this would certainly a
case where national interest would be
involved. Therefore, at this stage, without
directing for impleadment of Union of India
or the concerned Ministries which may
include Home as well as Finance, we direct
the learned counsel for the petitioner to
serve a copy of the petition to learned
Additional Solicitor General of India for
sending the same to the concerned
authority/ Ministry through appropriate
Secretary/ Authority for taking note of the
same and file instructions of such authority
on the next date fixed. The concerned
Ministry/ Authority shall be at liberty to
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1699
seek impleadment in the petition or they
may direct their impleadment if thought
appropriate.

Put up this case as fresh on
17.01.2022."

(emphasis supplied)

7. Learned counsel for the petitioner
states inter alia; (i) the entire investigation
by the EOW Varanasi has been conducted
in casual manner and nothing significant
was investigated by the police, (ii) the
police did not investigate the allegations
made
in
the
complaint
rather
was
conducted investigation about the conduct
and place of residence of the complainant,
which has nothing to do with the offence
committed by the accused company, (iii)
there are serious allegations against the
transfer
of
the
fund
through
sham
companies abroad and thereafter, writing
off the loan amount to the tune of Rs.2446
crore by the SBI officials in connivance
with the accused persons, (iv) the KYC of
the Agritrade Power Venture Ltd. has not
been verified, (v) the nature of business, the
amount involved, the loss to the national
treasury has been eye-washed by the
Investigating Officer, (vi) it is beyond the
capacity and expertise of State police to
investigate
the
alleged
offence,
and
expertise required for the investigation are
insufficient, (vii) it is the duty of the court
to
ensure
effective
and
unbiased
investigation for conducting fair trial, (viii)
deficiency in investigation is visible on the
part of the U.P. Police, it is apparently
reflected
that
it's
an
eye
washed
investigation
to
benefit
the
accused
persons,
if
the
investigation
is
not
transferred to the CBI, it would be a
miscarriage of justice to the State, because
of the reason that the police hurriedly
botched up investigation and filed the
closure report for the reasons best known to
them, (ix) likewise, by adopting the similar
modus operandi through various sham
companies besides sending huge amount to
the off shore holding companies of
SKSPGL, the accused persons have caused
a loss of Rs.5000 crore in connivance with
the bank officials, and other unknown
accused. There are serious allegations
against the bank officials which is
apparently reflected from the facts outlined
in preceding paragraphs.

8. Shri Satish Chaturvedi, learned
counsel for the State Bank of India has
filed counter affidavit stating inter-alia: (i)
that the petition is not maintainable as the
petitioner could seek an equally efficacious
remedy before the Magistrate by filling an
appropriate application, and the writ
petition is not maintainable and is liable to
be dismissed on this sole ground alone and
has relied upon Satya Prakash v. State of
U.P. in Criminal Misc. Writ Petition No.23
of 2022, which states that the power of
Magistrate to monitor the investigation in
exercise of his power under section 156(3)
Cr.P.C. has been recognized in series of
decisions by the Supreme Court, therefore,
the Court of Magistrate is the competent
Court to look into the grievances of the
petitioner, (ii) the petitioner has also filed a
similar writ petition before the Lucknow
Bench of this Court bearing Misc. Bench
No.21453 of 2021 and the fate of that
petition is not known to the respondent,
besides the petitioner has also filed similar
petition before the High Court of Orissa at
Cuttack bearing CRLMP No.2069 of 2021,
(iii) no transaction done by the bank
officers within the territorial jurisdiction of
this Court, therefore, this Court does not
have any territorial jurisdiction to decide
the fate of the instant petition.
1700 INDIAN LAW REPORTS ALLAHABAD SERIES
9. In addition to the preliminary
objections, the SBI has also addressed the
allegations on their merits, which are
summarized as follows: (i) the SKS Power
Generation (Chhattisgarh) Limited (in short
SKSPGL), which is engaged in the
business of generation and distribution of
electricity intending to set up a coal based
Thermal Power Plant located at Binjkote
and Durramunda in District-Raigarh, State
of Chhattisgarh approached State Bank of
India, PFSBU, Mumbai Branch for availing
the financial assistance for setting up a
thermal
power
project
at
Village
-
Durramud, Binjkot, Tehsil - Kharsia
District- Raigarh at Chhattisgarh. The
SKSPGL was promoted by SKS Ispat &
Power Ltd. (SKSIPL), (ii) the State Bank of
India, PFSBU, Mumbai Branch sanctioned
the Term Loan of Rs.5170 crore, thus, the
credit facilities was enjoyed by the
captioned unit from the State Bank of India
PFSBU, Mumbai Branch, however, the
Loan Agreement dated 19.12.2011 was
executed at Raipur, Chhattisgarh, (iii)
SKSPGL availed various credit facilities
from other financial institutions, including
Rs.500 crore from L&T, Rs.400 crore from
PTC India Ltd, and Rs.100 crore from State
Bank of Bikaner & Jaipur, (iv) the
company failed to repay the dues in time
and thus failed to maintain the financial
discipline of the bank resulting the account
was
transferred
to
Stressed
Assets
Management Branch, Bhopal, (v) to resolve
the stress in the Company a resolution plan
was
approved
involving
Change
of
Management in accordance with the
applicable laws including RBI's Circular
dated 12.2.2018 on Resolution of Stressed
Assets Revised Framework and the same
was acted upon by the SBI Corporate
Centre, Mumbai, (vi) on 16.8.2018 the
proposal for change in management based
on the offer of Agritrade Resources Ltd. for
acquiring 100% of equity in SKSPGL, was
approved by Bank's Executive Credit
Central Board (in short ECCB) and final
Letter of Intent was issued to ARL on
11.10.2018,
documentation
for
the
transactions were executed on 12.11.2018
and the same was done at SBI Corporate
Centre, Mumbai, (vii) in accordance with
the approval, on 5.6.2018, the SKSPGL
was put to auction and Final Letter of
Intent was issued in favour of M/S
Agritrade Resources Limited (ARL), a
company listed on Hong Kong Stock
Exchange, won the bid for acquiring
management control of SKSPGL, and on
18.3.2019,
the
investor-
Agritrade
Resources Ltd. (ARL) remitted an amount
of Rs.1,721 crore (approx.) to the account
maintained
at
Bhopal
Branch
and
remaining outstanding of Term Loan
Rs.2,446 crore (approx.) was written-off.
Thus, the all the accounts maintained at
SAM branch, Bhopal were closed on
18.3.2019,
(viii)
all
the
consortium
members
comprising
PTC
Financial
Services, L&T Infrastructure Finance, and
State Bank of Bikaner & Jaipur merged
with State Bank of India on 1.4.2017 which
were of the view that the Forensic Audit
report circulated by the Auditors, have
addressed the consortium observations and
there were no adverse remarks and in the
meeting
dated
19.12.2019
and
the
Consortium agreed to close the Forensic
Audit Report.

10. On the other hand, S.P. Legal
Cell, Headquarter, Lucknow has filed
counter affidavit on 25.1.2022, stating
inter-alia,
(i)
the
State
Government
accorded approval and consequent upon the
investigation
was
transferred
to
the
Economic Offences Wing, Lucknow with a
direction to conclude the investigation
within three months, (ii) in compliance of
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1701
this Court's order dated 2.12.2021, the
petitioner appeared before the DGP, Uttar
Pradesh along with his Advocate Shri Udai
Chandani on 8.12.2021 and apprised the
DGP, Lucknow about her grievances and
apprehensions, and in response to the
meeting, the DGP Uttar Pradesh asked the
S.P. Sultanpur to provide security to the
petitioner, (iii) the petitioner stated in her
representation dated 8.1.2022 that she is
residing at Shivcity, Jarhara, New Indira
Nagar, Lucknow, but she could not be
found on the addressed mentioned in her
application
dated
8.1.2022,
however,
Commissioner of Police, Lucknow directed
to provide security to the petitioner, (iv) on
perusal of letter dated 23.12.2021 annexed
with the counter affidavit, it transpires that
the S.P. posted at the office of DGP Uttar
Pradesh sought approval from the Secretary
(Home) for entrusting the investigation to
the EOW, and vide letter dated 11.1.2022,
the Joint Secretary (Home), Government of
Uttar Pradesh accorded approval to conduct
the investigation from EOW, Varanasi
Division.

11. Learned Additional Advocate
General submits that (i) the EOW, CID,
Varanasi
on
completion
of
the
investigation, in the instant case, filed the
Closure
Report
No.8/2022
dated
20.12.2022 on 25.1.2023 before the Court
of Chief Judicial Magistrate, Jaunpur and
the matter is pending consideration before
the Court, (ii) the identity of the petitioner
could not be established, and no person in
the name of petitioner was found at the
given address, (iii) the petitioner was also
not found at the address of New Indira
Nagar, Lucknow, (iv) the statement of the
then Branch Manager, Cashier and other
staff besides Security Guard posted at SBI
Branch Jaunpur were recorded, none of
them supported the contentions raised by
the petitioner in the petition, (v) the
allegations against the unknown persons
who
have
allegedly
threatened
the
petitioner, was also found to be incorrect,
(vi) the statement of co-villagers and local
Councillor were recorded and no truth was
found with respect to the allegations made
in the petition, (vii) the statement of
suspect Deepak Gupta, Anil Mahaveer
Gupta, Aneesh Gupta, Mahaveer Prasad
Gupta, Smt. Premlata Gupta, Gopal Garg,
and Rohit Prashar, AGM SBI Bhopal were
recorded, balance sheet of the company
was scrutinized, loan settlement agreement
was looked into, but no illegality was
observed during the investigation, (viii)
Closure Report dated 20.12.2022 was
approved and accepted by the Confidential
Section-8
of
the
Home
Department,
Lucknow vide letter No.591/25-8-2022-258099/387/2021 dated 13.7.2022.

12. Even though, the Union of India
was not arrayed as party in the writ
petition, but keeping in view the magnitude
of fraud and the complexity involved in the
case, this Court vide order dated 2.12.2021,
directed the learned Additional Solicitor
General to take instructions from the
Ministry of Home and Ministry of Finance,
Government of India. In response to the
direction of this Court, the Department of
Enforcement Directorate filed a separate
affidavit through
Central
Government
Counsel. On perusal of the affidavits dated
5.4.2022 and 15.12.2023, it transpires that
(i) vide letter dated 4.4.2022, the Under
Secretary, Ministry of Finance requested
the Director, Enforcement Directorate to
file counter affidavit in the instant writ
petition, (ii) after conducting preliminary
inquiry,
an
ECIR
bearing
No.ECIR/ALSZO/01/2022 dated 10.2.2022
is registered at Allahabad Sub Zonal Office
of Directorate of Enforcement with the
1702 INDIAN LAW REPORTS ALLAHABAD SERIES
approval of competent authority, (iii) the
Chennai Zonal Office of Directorate is
already
conducting
investigation
after
recording ECIR dated 7.8.2019 against M/s
Cethar Ltd. and the said ECIR was
registered on the basis of FIR No.20/2018
dated 16.10.2018 by CBI, BSF Cell
Banguluru against Cethar Ltd. and property
worth Rs.9.08 crore was attached in 2022,
which was subsequently confirmed by the
adjudicating authority, PMLA, (iv) another
Attachment Order of Rs.517.81 crore were
also attached vide PAO Order No.3/2023
dated 27.6.2023 and certain properties of
SKS Ispat and Power Ltd. are also attached
since part of the proceeds of the crime
committed by M/s Cethar Ltd.

13. Shri G.S. Chaturvedi, learned
Senior Counsel appeared for the SKSPGL
and submits that; (i) no such case for
transfer the investigation to the CBI is
made out as the investigation has already
been concluded and closure report has been
filed, (ii) it is always open for the
complainant to file a protest petition before
the court concerned and could raise her
grievances there, (iii) the alleged accused is
effected party, they may also be allowed to
file counter affidavit in response to the
allegations made in the instant petition, (iv)
the complainant is contesting a proxy
litigation at the behest of undesirable
element, and therefore, has vested interest,
(v) such litigants ordinarily should not be
allowed to misuse the process of law to
settle personal scores, (vi) no fruitful
purpose would be achieved by transferring
the investigation to the CBI.

14. Before delving into the merits of
the case, it is prudent to discuss the law
regarding the transfer of investigations to
the Central Bureau of Investigation (CBI).
In criminal jurisprudence, there is no
universally applicable rule that can be
rigidly applied to all similar facts and
circumstances. Instead, various factors such
as the modus operandi (intention) of the
accused, the gravity of the offense, the
manner
in
which
the
offense
was
committed, its societal impact, and the
severity of potential punishment must be
considered. Additionally, the possibility of
the investigation being compromised by
factors
such
as
implicit
biases,
preconceived notions, personal interests,
undue
influence,
selective
evidence
gathering,
favoritism,
or
prejudiced
treatment
of
suspects
are
pertinent
considerations for Constitutional Courts
when
contemplating
the
transfer
of
investigations. Moreover, investigations
may also be vulnerable to influence from
individuals with political connections and
significant financial resources. Equally, the
decision to transfer an investigation to the
CBI cannot be made routinely or solely
based on the request of a party alleging
wrongdoing.
It
requires
careful
examination
and
evaluation
of
the
circumstances surrounding the case to
ensure fairness, impartiality, and the
preservation of justice.

15. The Supreme Court in State of
Punjab v. CBI2 has thus opined:

"the inherent power of the High
Court under Article 226 of the Constitution
to direct investigation by CBI for securing
the ends of the justice must be exercised
sparingly, cautiously, and in exceptional
situations, where it becomes necessary to
provide credibility and confidence in
investigation, or where the incident may
have
national
or
international
ramifications or where such an order may
be necessary for doing the complete justice
and enforcing fundamental rights."
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1703

16. The 5-judges bench of the
Supreme Court in the celebrated judgment
of State of West Bengal and others v.
Committee
for
the
Protection
of
Democratic Rights, West Bengal and
others3 has observed that while passing
orders
under
Article
226
of
the
Constitution, the Constitutional Courts
must bear in mind certain self-imposed
restrictions on exercise of these powers and
thus summarized as under:

"we
deem
it
necessary
to
emphasise
that
despite
wide
powers
conferred by Articles 32 and 226 of the
Constitution, while passing any order, the
Courts must bear in mind certain selfimposed limitations on the exercise of these
constitutional powers. The very plenitude
of the power under the said articles
requires great caution in its exercise.
Insofar as the question of issuing a
direction to CBI to conduct investigation in
a case is concerned, although no inflexible
guidelines can be laid down to decide
whether or not such power should be
exercised but time and again it has been
reiterated that such an order is not to be
passed as a matter of routine or merely
because a party has levelled some
allegations against the local police. This
extraordinary power must be exercised
sparingly, cautiously and in exceptional
situations where it becomes necessary to
provide credibility and instil confidence in
investigations or where the incident may
have
national
and
international
ramifications or where such an order may
be necessary for doing complete justice and
enforcing
the
fundamental
rights.
Otherwise CBI would be flooded with a
large number of cases and with limited
resources, may find it difficult to properly
investigate even serious cases and in the
process lose its credibility and purpose with
unsatisfactory investigations."

17. In Minor Irrigation & Rural
Engg. Services, U.P. v. Sahngoo Ram
Arya4 the Supreme Court observed that an
order directing an enquiry by CBI should
be passed only when the High Court, after
considering the material on record, comes
to a conclusion that such material does
disclose a prima facie case calling for an
investigation by CBI or any other similar
agency. Again Supreme Court in Air India
Stationery Corpn. v. United Labour
Union5, held that the founding fathers
placed no limitation or fetters under Article
226 of the Constitution except self-imposed
limitations, and observed that the arm of
the Court is long enough to reach in justice,
whenever it is found.

18. Further, in KV Rajendran case6,
the Supreme Court observed that it is a
settled proposition that the transfer of
investigation should only be done in rare
and extra ordinary circumstances in order
to ensure total justice between the parties
and to instil public confidence.

19. The fair investigation in criminal
law is essential for upholding rule of law,
the
principles
of
justice,
protecting
individual rights, and maintaining the
integrity of the legal system. By adhearing
to the principles of impartiality, due
process, transparency, and commitment to
such truth, investigating agencies ensure
that criminal investigation are conducted
fairly and effectively.

20. The Supreme Court in Himanshu
Kumar
and
others
v.
State
of
Chhattisgarh and others7, has held:
1704 INDIAN LAW REPORTS ALLAHABAD SERIES

44. It is now settled law that if a
citizen, who is a de facto complainant in a
criminal case alleging commission of
cognizable offence affecting violation of his
legal or fundamental rights against high
Government officials or influential persons,
prays before a Court for a direction of
investigation of the said alleged offence by
the CBI, such prayer should not be granted
on mere asking. A Constitution Bench of
this Court, in the case of the State of West
Bengal v. Committee for Protection of
Democratic Rights, West Bengal, reported
in (2010) 3 SCC 571, has made the
following observations pointing out the
situations
where
the
prayer
for
investigation by the CBI should be allowed:

"70.... In so far as the question of
issuing a direction to CBI to conduct
investigation in a case is concerned,
although no inflexible guidelines can be
laid down to decide whether or not such
powers should be exercised, but time and
again it has been reiterated that such an
order is not to be passed as a matter of
routine or merely because a party has
levelled some allegations against the local
police. This extraordinary power must be
exercised sparingly, cautiously and in
exceptional situations where it becomes
necessary to provide credibility and instil
confidence in investigations or where the
incident
may
have
national
and
international ramifications or where such
an order may be necessary for doing
complete
justice
and
enforcing
the
fundamental rights. Otherwise CBI would
be flooded with a large number of cases
and with limited resources, may find it
difficult to properly investigate even serious
cases and in the process lose its credibility
and
purpose
with
unsatisfactory
investigations."

(emphasis supplied)

45. In the above decision, it was
also pointed out that the same court in
Secretary, Minor Irrigation & Rural
Engineering Services, U.P. v. Sahngoo Ram
Arya, (2002) 5 SCC 521, had said that an
order directing an enquiry by the CBI
should be passed only when the High
Court, after considering the material on
record, comes to the conclusion that such
material does disclose a prima facie case
calling for an investigation by the CBI or
any other similar agency.

46. In an appropriate case when
the Court feels that the investigation by the
police authorities is not in a proper
direction, and in order to do complete
justice in the case and if high police
officials are involved in the alleged crime,
the Court may be justified in such
circumstances
to
handover
the
investigation to an independent agency like
the CBI. By now it is well-settled that even
after the filing of the charge sheet the court
is empowered in an appropriate case to
handover
the
investigation
to
an
independent agency like the CBI.

47. The extraordinary power of
the Constitutional Courts under Articles 32
and 226 respectively of the Constitution of
India qua the issuance of directions to the
CBI to conduct investigation must be
exercised with great caution as underlined
by this Court in the case of Committee for
Protection of Democratic Rights, West
Bengal (supra) as adverted to herein above,
observing that although no inflexible
guidelines can be laid down in this regard,
yet it was highlighted that such an order
cannot be passed as a matter of routine or
merely because the parties have levelled
some allegations against the local police
and can be invoked in exceptional
situations where it becomes necessary to
provide credibility and instil confidence in
the investigation or where the incident may
3 All. Ms. Baba Beti Vs. State of U.P. & Ors.
1705
have
national
or
international
ramifications or where such an order may
be necessary for doing complete justice and
for enforcing the fundamental rights. We
are conscious of the fact that though a
satisfaction of want of proper, fair,
impartial
and
effective
investigation
eroding its credence and reliability is the
precondition for a direction for further
investigation
or
re-investigation,
submission of the charge sheet ipso facto or
the pendency of the trial can, by no means,
be
a
prohibitive
impediment.
The
contextual
facts
and
the
attendant
circumstances
have
to
be
singularly
evaluated and analyzed to decide the
needfulness of further investigation or reinvestigation to unravel the truth and mete
out justice to the parties. The prime
concern and the endeavour of the court of
law should be to secure justice on the basis
of true facts which ought to be unearthed
through a committed, resolved and a
competent investigating agency.

48. The above principle has been
reiterated
in
K.V.
Rajendran
v.
Superintendent of Police, CBCID South
Zone, Chennai, (2013) 12 SCC 480. Dr.
B.S. Chauhan, J. speaking for a threeJudge Bench of this Court held:

"13. ...This Court has time and
again dealt with the issue under what
circumstances the investigation can be
transferred from the State investigating
agency
to
any
other
independent
investigating agency like CBI. It has been
held that the power of transferring such
investigation
must
be
in
rare
and
exceptional cases where the court finds it
necessary in order to do justice between the
parties and to instil confidence in the
public mind, or where investigation by the
State police lacks credibility and it is
necessary for having "a fair, honest and
complete investigation", and particularly,
when it is imperative to retain public
confidence in the impartial working of the
State agencies. ..."

49. Elaborating on this principle,
this Court further observed:

"17. ... the Court could exercise
its constitutional powers for transferring an
investigation from the State investigating
agency
to
any
other
independent
investigating agency like CBI only in rare
and exceptional cases. Such as where high
officials of State authorities are involved,
or the accusation itself is against the top
officials of the investigating agency thereby
allowing
them
to
influence
the
investigation, and further that it is so
necessary to do justice and to instil
confidence in the investigation or where the
investigation is prima facie found to be
tainted/biased."

50. The Court reiterated that an
investigation may be transferred to the CBI
only in "rare and exceptional cases".