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Friday, October 30, 2020

Laxmi Vilas Palace case: Rajasthan HC relief from arrest warrants, says prima facie not justified

The CBI registered a case on August 13, 2014 that some unknown officers from the Department of Disinvestment, in connivance with a private hotelier during 1999-2002, renovated and then sold the hotel at a throwaway price.

Written by Deep Mukherjee | Jaipur | Updated: September 23, 2020 2:30:38 am
Laxmi Vilas Palace case: Rajasthan HC stays arrest warrants against 3 accusedSingh had approached the Rajasthan High Court last week seeking quashing of the FIR lodged against him in connection with the phone tapping case. (Express photo: Rohit Jain Paras)

The Rajasthan High Court Tuesday granted interim relief to retired IAS officer Pradip Baijal and two others from arrest over warrants in a case involving disinvestment of Laxmi Vilas Hotel in Udaipur in 2002. The Bench of Justice Dinesh Mehta observed that prima facie the Special CBI Court, Jodhpur, had not been justified in issuing the arrest warrants against the three, apart from former Union minister Arun Shourie.

Shourie’s plea in the matter will be heard on Wednesday, his counsel Pradeep Shah said.

The High Court also stayed the CBI court order attaching the luxury hotel and appointing the District Collector as the receiver.

While rejecting an application by the CBI to close the case, the Jodhpur court had, on September 15, summoned Shourie, the Union disinvestment minister at the time of the sale of the hotel; Baijal, the Secretary of the department then; Ashish Guha, belonging to financial advisory firm Lzard India Ltd; Bharat Hotels Managing Director Jyotsna Suri; and Kantilal Karamsey Vikamsey, proprietor of valuer Kanti Karamsey and Co. Relief was provided on Tuesday to Baijal, Guha and Suri.

The Atal Bihari Vajpayee-led NDA government was in power at the Centre at the time of the disinvestment.

Senior counsel Mukul Rohatgi represented Baijal in the High Court while Suri was represented by senior advocates Harish Salve and P P Choudhary, who is also the BJP MP from Pali.

Staying the CBI court’s order appointing the Collector as receiver of the Laxmi Vilas Hotel till the next date of hearing, on a petition by Suri, the High Court said that the property, its assets and records be handed over to the authorised representative of Bharat Hotels. The next date of hearing is October 15.

In its order, the Bench said, “… the court below has not recorded any reason worth (its) name before resorting to the extreme mode of securing presence of an accused issuing arrest warrant. The issuance… becomes all the more serious when the petitioner was not (given) any notice of the pending proceedings.”

On Suri’s plea, Justice Mehta said the lower court had not recorded any reason as to why her custodial interrogation was required, particularly when all the relevant documents were in the records of the court and the deal dates back to 2001, when she was not at the helm of the company. “… attaching the property of a running hotel business for a transaction which took place way back in 2001, that too without notice to the petitioner or her hotel, is beyond anybody’s comprehension; particularly when a final decision about petitioner’s involvement/ guilt is yet to be taken by the court,” the judge said.

The High Court also cited a letter written by the Udaipur District Collector saying he didn’t have the resources and expertise to run a hotel. It said handing over the property in this manner could lead to “irreparable loss” to Bharat Hotels, as well as may cost employees their jobs.

Suri was asked to give an undertaking not to sell, alienate or otherwise transfer the land, building or fixed assets of the hotel till the case was disposed of.

In the September 15 order, Special CBI Court Judge Pooran Kumar Sharma had rejected the agency’s application to file a closure report in the investigation into the sale of Laxmi Vilas Palace Hotel. Rejecting the CBI’s plea that it had not found any evidence to launch prosecution, Judge Sharma said that prima facie it had been proved that the accused had abused their posts to cause a loss Rs 244 crore to the government of India in the sale of the hotel.

Shourie had told The Indian Express, “The process of disinvestment had been 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… My name was not there in the original FIR and we have no idea how it has been added now.”

Writing for The Indian Express soon after the CBI had filed the original FIR in 2014, Shourie had said, “to earn gross revenue of Rs 2 crore a year, the hotel spent Rs 3 crore … 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.”

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