'Forensic Science Labs Need More Personnel, More Expertise' :Supreme Court Expresses Concerns About Delays In FSL Reports

"These lab issues have been earlier also flagged by courts. The number of cases that you are bringing out…you need more personnels, more expertise."

A Bench comprising Justices Sanjay Kishan Kaul and M.M. Sundresh noted that in the case of Heera Gold Exim Pvt. Ltd. even after three years the FS Lab at Telangana has not been able to file a report. It noted -

"The SFL Lab Telangana will render full cooperation and process their work at the earliest as this has already been more than 3 years."

On a couple of occasions, Senior Advocate, Mr. Ranjit Kumar appearing for the company had suggested if the technical staff of the company can assist the SFIO (investigating agency) in obtaining the requisite data from the hard disk. Even on Thursday, Mr. Kumar submitted -

"The petitioners will set up the hard disk in their presence and verify every claim. We are also interested in payment. We have not got the hard drive till date."\

Additional Solicitor General, Mr. S.V. Raju was apprehensive that the personnels of the company might tamper with the data.

Looking at the inordinate delay in submitting the report, Justice Kaul remarked -

"These lab issues have been earlier also flagged by courts. The number of cases that you are bringing out…you need more personnels, more expertise. I find it difficult to accept that a country that boasts of large manpower to handle software and hardware, the Government should be without facilities to be able to handle it."

Mr. Raju stated that they have the manpower in place but each FSL has an immense workload from the numerous cases that they are handling.

"We have the manpower no doubt, but the amount of work in each FSL is mind boggling. So many cases to handle."

Justice Kaul observed that the inference that can be drawn from the statement made by Mr. Raju is that FSLs lacked manpower.

"Therefore you do not have manpower. Suppose you have manpower of 100 to perform a task of 1000, then you do not have manpower."

Mr. Raju also pointed out -

"The cost is also exorbitant. The cost is running in 60 lakhs."

Justice Kaul asked, "How much is the total cost if you have to process?"

Mr. Raju responded, "60 lakhs."

Justice Kaul orally remarked that the said amount is not much from a Government perspective and the same can be later recovered from assets. So money ought not be an excuse for the delay. He stated -

"What is 60 lakhs from the Govt. point of view. What difference does it make in so many things the Govt. spends. We have said earlier also that you are required to recover the cost of processing."

He added -

"I am sorry to use the term. But that is penny wise, pound foolish."

Mr. Kumar suggested that the company could put the hard disk into running condition then the SFIO can make as many copies as they want from it, without the process being so cost heavy.

But Mr. Raju reiterated, "We are afraid of tampering."

Justice Kaul was of the opinion that when SFIO has not been able to provide a solution they need the assistance of the company.

"For three years you are not able to handle it. When they offer you are saying do not allow them to touch it. If without their touching you are not able to do anything, what more will they do by touching it. It is not a museum where you will preserve and put it."

Mr. Raju said that once one copy of the hard disk is made by the SFL, the company can assist with it. But, he added that making that one copy would cost Rs. 60 lakhs.

"Don't tell me the Government does not have enough money to investigate, then don't take up the investigation", remarked Justice Kaul.

Mr. Raju stated that considering the amount of process is exorbitant, the officials are afraid to take further action.

"If you spend 50 lakhs, 60 lakhs and then the question crops up who asked you to spend that money, therefore, these officers are scared."

Justice Kaul was of the opinion that the Government instils a fear-psychosis in its officers which acts as a hindrance in effective investigation.

"Mr. Raju may I say the Government scares their officer. They worry 10 years after retirement they will face some CBI enquiry. Don't create a fear-psychosis in your officers. Let them do the job, they will do better."

Accordingly, the Bench recorded in the order -

"We are unable to appreciate as to why the assistance to the fullest extent should not be taken from the petitioners. Moreso, when for years together the investigative agency has not been able to complete the task. It is obvious that they require assistance from petitioners who are willing to give the same. Mere apprehension cannot be an answer. We hope this will assist in the investigation and in the claims being verified. We also put it on the Ld. ASG as to the cost likely incurred, which is 60 lakhs as submitted by him. These costs are immaterial when an investigation is going on and is open to recover the cost ultimately from the amounts of the assets. These costs can be further reduced if a pragmatic approach is taken seeking assistance from the petitioners to specially identify the claim of the claimants.

On the aforesaid observation the Ld. ASG says that the petitioner may depute their staff under supervision of their officers to assist them. The petitioner assures that their technical staff would report within 3 days at the SFIO office at Hyderabad."

Reading from the status report filed by him, Mr. Raju apprised the Bench that as on 11.03.2022, a total of 6022 claims were received.

The Bench noted that the cooperation of the company was essential.

Justice Kaul noted that the object of economic offences especially the ones wherein a large number of investors are involved is to see to it that they get back the money. He told Mr. Raju to take assistance from the company to identify the claims and the properties to settle the claims.

"They are in a soup it is obvious. If you take them hands-off, they should be kept away with a bargepole you are not able to do very much… You for years together have not been able to find a solution. Then the investor will suffer because of you. Take their assistance. Ultimately, in economic offence, I believe the object is to get the money back. The primary thing, in cases like this with a large number of investors is that you prosecute for 20 years and they are left high and dry. This should not be the objective of the investigating agency or the Govt."

He added -

"Little change of focus is required. Instead of thinking who to send them behind bars the greater emphasis should be to get the money out of them."

The Bench recorded that Mr. Raju had pointed out there are two aspects on which he needs the assistance of the petitioner -

1. In identifying the claims of the investors
2. In identifying the properties which can be sold to realise the claims

Mr. Kumar submitted that they were ready to assist the SFIO once the hard disk was made available to them. With respect to the second aspect, he stated that the company has no objection in assisting to identify the property until and unless they are sold in a transparent manner and at the current market prices.

The matter is to be heard next on 12th May, 2022.

Background

Heera Gold Exim Private Limited, a company dealing in gold, collected huge deposits from the public with a promise to pay a 36% dividend on the invested amount. When the company failed to pay dividends and maturity amounts, investors across states lodged complaints, inter alia, alleging cheating and fraud.

In the light of the same, Ms. Nowhera Shaikh, the Managing Director of the company was arrested. On 19.01.2021, the Supreme Court granted her interim bail on the condition that she would settle the claims of the investors. The interim bail was extended from time to time and on 05.08.2021 it was made absolute.

The Supreme Court had on previous occasions asked Ms. Shaikh and the Investigating Agency to ensure that the investors receive their dues. To facilitate the same, the Court had also asked the Investigating Agency to de-freeze the accounts of the company and provide necessary access to Ms. Shaikh so that the settlement process could be expedited.

On Wednesday, the Court expressed its displeasure that even after three years FSL report has not been made available. The Court noted -

"A number of Courts have expressed the views on the inadequacy of the number of FSLs If the complexity of the alleged frauds have gone up so as the technology which should be available both in hardware and software and manpower with the investigating agency to deal with same."

On 05.08.2021, a similar concern was raised and the ASG. Mr. S.V. Raju had assured the Court that he would take up the issue with the concerned laboratory.

Considering the delay in getting the FSL Report, Senior Advocate, Mr. Ranjit Kumar suggested if the facilities of the company could be utilised in obtaining the requisite data. Mr. Raju stated that he would seek instructions regarding the same.

[Case Title: State of Telangana Rep By Special Officer Vandhana And Ors. v. M/s. Heera Gold Exim Private Limited And Ors. Criminal Appeal No. 761-762 of 2021]