A Special CBI Court in Rajasthan’s Jodhpur district has ordered the registration of a criminal case against former Union minister Arun Shourie, retired IAS officer Pradip Baijal and three others, after prima facie finding offences such as criminal conspiracy and cheating proved against them in relation to the sale of a luxury hotel in Rajasthan dating back to 2002.
In an order dated September 15, the court of Special CBI Judge Pooran Kumar Sharma rejected a closure report filed by the CBI in the matter of the sale of Laxmi Vilas Palace Hotel, Udaipur. Summoning all the accused via arrest warrants, the court said that prima facie it had been proved that Shourie, during his tenure as Disinvestment Minister in the Vajpayee government at the Centre, and Baijal, as the Secretary of the department, had “abused their posts collectively and independently” to cause a loss Rs 244 crore to the government of India in the sale.
The court also directed the District Collector, Udaipur, to take possession of the hotel, now known as The LaLit Laxmi Vilas Palace, appointing the officer as the receiver of the property.
Shourie said he would appeal against the order in the Rajasthan High Court. Expressing surprise over the charges being brought up after 18 years, he told The Indian Express, “The process of disinvestment was challenged in the Rajasthan High Court earlier and the HC said there is no evidence of any undervaluation. The CBI too had closed the case saying there was no evidence of any wrongdoing. My name was not there in the original FIR and we have no idea how it has been added now.”
The Special CBI Court order says Shourie and Baijal “criminally conspired with Bharat Hotels Ltd, Ashish Guha, Managing Director of M/s Lzard India Ltd, and Kantilal Karamsey Vikamsey of M/s Kanti Karamsey & Co to cause the Government of India a wrongful loss of Rs 244,63,91,000 and also caused a wrongful gain to the tune of the same amount to self or others”. It names Jyotsna Suri, Director, Bharat Hotels, as among the accused.
The CBI had registered an FIR on August 13, 2014, in relation to the 2002 sale of the hotel, then a heritage property of the ITDC (Indian Tourism Development Corporation), to Bharat Hotels for Rs 7.52 crore. The FIR said the deal had resulted in a loss of Rs 143.48 crore to the government. In its order, the court said the CBI probe had found that the property was worth Rs 58.87 crore and the land on which it stood of the value of Rs 193 crore, amounting to “loss” of Rs 244 crore.
In the initial FIR, the CBI did not include Shourie, only naming Baijal, Guha of New Delhi-based financial advisory firm Lzard India Ltd, asset valuer Vikamsey of Kanti Karamsey & Co., and New Delhi-based Bharat Hotels, apart from “other unknown government officers/officials and private persons”, under Sections of the Prevention of Corruption Act.
Later, in its final report, the CBI said it had not found enough evidence to launch prosecution in the disinvestment. However, it held that Kanti Karamsey & Co. had failed to do proper valuation and referred the matter to the Ministry of Finance.
Subsequently, the CBI had not filed any chargesheet and instead submitted a closure report, requesting the court to accept it.
Shourie said, “It is pertinent to note that none of these decisions of disinvestment were taken by me or by any officials personally but by the Cabinet Committee on Disinvestment headed by then Prime Minister Shri A B Vajpayee and which comprised the then Finance Minister among others. Also, a lot has been floated about the valuation and there seems to be a misunderstanding. There is a difference when an establishment is evaluated when it has closed and when it is running with all its losses and liabilities.”
Questioning the arrest warrant against him, Shourie said, “A Supreme Court judgment states that there has to be a summons, a bailable warrant and if both of these are disregarded, then a non-bailable arrest warrant should be issued in serious cases.”
Baijal said he had no comments to offer as of now, and was reviewing the documents. The Lalit’s communication officials did not take calls.
Rejecting the CBI’s closure report, the Special CBI Court said offences under Section 120 B of the IPC (criminal conspiracy) read with Section 420 (cheating) as well as Sections of the Prevention of Corruption Act had been proved against Shourie and the others. “When the investigating officer had accepted in the probe that Laxmi Vilas Hotel was undervalued, then he should have presented a chargesheet,” the court said.
Noting that Shourie is associated with journalism and has often spoken about the Prevention of Corruption Act, the judge said, “But despite that, he indulged in this activity, which shows his double personality.”
The court directed the District Collector to ensure the running of the hotel through an organisation of the government of India with experience in the same.
A five-star hotel, Laxmi Vilas was originally a palace of the erstwhile king of Udaipur Maharaja Fateh Singh, dating back to 1911. Finance Ministry records show the Central government sold 89.97% stake in it for Rs 7.52 crore in 2002 against a reserve price of Rs 6.12 crore. The hotel had posted provisional losses of Rs 1.07 crore in 2000-01.
Writing for The Indian Express soon after the CBI filed the FIR in 2014, Shourie had said, “to earn gross revenue of Rs 2 crore a year, the hotel spent Rs 3 crore — a loss of 51 per cent… Eleven parties expressed an initial interest in bidding for the hotel. Five of them carried out thorough due diligence. Such was the condition of the property that four of the five dropped out.”
The hotel now ranks among Rajasthan’s top heritage properties.
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