Look Into Allegations Of Over-Invoicing By Power Firms Including Adani, Essar Groups: Delhi High Court To CBI, DRI

The Delhi High Court on Tuesday directed the Union Government, Central Bureau of Investigation (CBI) and Directorate of Revenue Intelligence (DRI) to “meticulously and expeditiously” look into the allegations of over invoicing of coal imports and equipments by several power companies, including those of Adani Group and Essar Group.

A division bench of Justice Suresh Kumar Kait and Justice Neena Bansal Krishna directed the authorities to “unearth the actual factual position” and take appropriate actions against the erring companies, if any, as per law.

The court was dealing with two PILs filed in 2017 seeking Special Investigating Team (SIT) probe against various private power generating companies for over invoicing carried out by them.

One PIL was moved by Centre for Public Interest Litigation and Common Cause, represented by Advocate Prashant Bhushan. The plea sought SIT probe into the reports of DRI against various private power generating companies for over invoicing carried out by them.

Another PIL was filed by Harsh Mander seeking CBI probe in respect of over invoicing in power projects, as reported by DRI or to set up a SIT under a retired Judge of the Supreme Court of India to probe into the over invoicing.

Both the petitioners claimed that DRI investigated three projects of equipment imports by Adani Group, one relating to Transmission Line Projects and second, Power Plan Projects.

With regard to over invoicing of equipment by Essar Group, the petitioners relied upon a show cause notice issued by DRI in 2015.

The notice stated that the “foundation for siphoning off foreign exchange appear to have been by the Essar Group by having its entities viz. EPGL, EPMPL, EOL and EPIL enter into contracts with inflated consideration amounts with its related entity GSF.”

It was the stand of DRI that due to large number of parties and number of intermediaries, especially those located overseas and also due to complex nature of the transactions, the investigation was divided into multiple cases.

The court was informed that during the investigation, Show Cause Notices were issued against certain companies and Letters Rogatory through jurisdictional courts to the Foreign Courts seeking retrieval of information.

It was also submitted that due to voluminous nature of cases, involving several stages and multiple countries, the process of investigation was extremely time consuming and complicated, however, it was taking all steps for necessary expeditious completion of the same.

CBI also submitted that it has initiated investigation against various power entities.

Disposing of the pleas, the court noted that as per the status report of DRI, it was stated that multiple proceedings are pending before CESTAT and other Forums against various power firms.

“The respondent No.2-CBVI has informed that two cases i.e. PE-BD 2014/E/0001 and RC-221/2018/E/0003 were registered against the erring companies and in the first case PE has been concluded and in both the cases investigation is in progress,” the court said.

It thus ordered: “In the peculiar facts of these cases, this Court finds it appropriate to direct the respondents to meticulously and expeditiously look into the allegations of the petitioners to unearth actual factual position and take appropriate actions against the erring companies, if any, as per law. With directions as aforesaid, these petitions are accordingly disposed of.”

Title: CENTRE FOR PUBLIC INTEREST LITIGATION AND ANR. v. UNION OF INDIA AND ORS. and other connected matter

Citation: 2023 LiveLaw (Del) 1312

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