In a major embarrassment to the CBI, the Madras High Court Friday ordered the Tamil Nadu Police to probe the disappearance of 103 kg gold (amounting to more than Rs 43 crore) from the agency’s custody, rejecting its plea that “the prestige of the CBI would come down if investigation is done by the local police”. Asking the CB-CID to register an FIR, the court said: “It may be an agni pariksha (trial by fire) for the CBI, but that cannot be helped. If their hands are clean, like Sita, they may come out brighter. If not, they would have to face the music.”
On the CBI Special Public Prosecutor asking for a probe by the CBI or National Investigation Agency instead of the state police, Judge P N Prakash said, “The court cannot subscribe to this view, because the law does not sanction such an inference. All policemen have to be trusted and it does not lie in the mouth of one to say that the CBI have special horns, whereas, the local police have only a tail.”
The CBI had seized the gold in connection with cases dating back to 2012 filed over allegations that officials of Minerals and Metals Trading Corporation of India (MMTC) in Chennai had shown undue favours towards Surana Corporation Limited, which dealt in import of gold and silver. The gold, amounting to 400.47 kg, and in the form of bars and ornaments, was seized by the CBI from the office building of Surana in Chennai, and locked and sealed in the firm’s vaults. The CBI claims to have submitted the keys of the vault to a Special CBI Court in Chennai, though no date regarding this is mentioned in documents.
In September 2013, the CBI registered another case, saying that while the seized gold was not wanted in the 2012 cases, it had found that Surana had imported the same in violation of the Foreign Trade Policy. The CBI hence requested that the seized gold be transferred from the first case to the fresh one — following which the court allowed the transfer of about 400 kg on record. “There was no physical inventorisation by the court” as the gold was already in the vault.
Subsequently, in 2015, the CBI filed a closure report in the second case stating that “there is no adequate evidence forthcoming”. The CBI Special Court accepted the same but directed that the seized gold be handed over to the Directorate General of Foreign Trade (DGFT). This order was later set aside by the Madras High Court on Surana’s petition.
In the meantime, the SBI initiated proceedings against Surana over non-payment of dues — the firm had pending loans amounting to Rs1,160 crore — and moved the Special CBI Court seeking the seized gold.
In its order on Friday directing a probe against the CBI, the high court noted, “Thus… all of them, like the famous character Colorado played by the late Omar Sharif in the Hollywood blockbuster Mackenna’s Gold, went on a gold hunting expedition to the Special Court. Like Colorado entering into an agreement with Monkey, the Apache, to share the spoils of gold, the SBI and Surana entered into an agreement and filed a compromise memo before the Special Court… to hand over the gold weighing 400.47 kg” for settlement of dues.
The CBI opposed Surana’s petition, backed by the Ministry of Commerce and Industry (under which the DGFT falls). Finally, in December 2019, the National Company Law Tribunal, which had been approached by the SBI, ordered that the gold be handed over for distribution to the six banks owed money by Surana.
However, when the CBI opened the vaults in the presence of the bank representatives in February this year, the gold was found to be 103.864 kg short — “to the great shock and surprise of all”, as the high court noted.
The CBI told the high court that they had used a weighing machine at Surana’s office to arrive at a figure of 400.47 kg for the gold after the seizure, and the seals affixed by it on the vaults were intact, hence arguing that the agency could not be held liable for the missing gold. The Special Public Prosecutor said that there could be a discrepancy in the weight because gold chains were weighed collectively at the time of the seizure, while in February, each item was weighed individually, using more sophisticated machines.
Rejecting these arguments, the court said it was “unable to fathom as to how there could be a discrepancy of more than 100 kg… Gold will not diminish in weight like ganja by efflux.”
Coming down heavily on the CBI, the high court said that had the gold been physically entrusted to the CBI Special Court, and gone missing from there, “the CBI would have cried foul from the rooftops and demanded the scalp of the Special Judge and his Property Clerk. The Special Judge and the Property Clerk would have been placed under suspension and would have even been arrested…”.
Noting that “Caesar’s wife should be beyond suspicion”, the court directed the CB-CID’s Metro Wing in Chennai, which comes under the state government, to register a regular FIR for theft and entrust the investigation to an SP-rank officer to complete the probe in six months.
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