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Karnataka HC order probe into Cogentrix kickbacks

A division bench of the Karnataka high court today ordered a Central Bureau of Investigation inquiry into the alleged payment of kickbacks in the controversial multimillion Cogentrix power project to be set up near Mangalore in Karnataka.

The Rs 42 billion project is being set up by the United States-headquartered multinational Cogentrix in partnership with the China Light and Power Company.

The bench, comprising Chief Justice R P Sethi and Justice V Gopala Gowda, were disposing off a petition filed by Arun Kumar Agarawal and former minister S K Kantha. The bench directed the Karnataka government to get a first information report registered with the CBI under the provisions of the Delhi Special Police Establishment Act for various cognisable offences without naming any person or group of persons as accused.

In its 178-page order, the bench directed that the investigation be commenced without delay and completed within one year from the date of registration of the first information report. The bench said if the CBI did not complete the probe within time, it could seek extension only by adducing valid reasons.

The petitioners had prayed for a joint-inquiry by the Comptroller and Auditor General, Enforcement Directorate, the CBI and such other agency or agencies.

The bench ordered the CBI director to conduct the investigation under the supervision and control of an officer not below the rank of deputy director.

"The investigation shall not be influenced by any of the observation made by us for determining the desirability of the registration of the FIR and investigation into the allegation," the bench observed.

While ordering payment of Rs 20,000 towards costs of the petitioners, the court directed the CBI to file a monthly progress report of the investigation to the court in a sealed cover. The court also ordered that a copy of the judgement be immediately furnished to the CBI director for taking follow-up action.

The bench said all the parties, including the central and state governments, should furnish all necessary information to the investigating agency. It hoped that the foreign companies and persons would render all assistance in this regard.

In case of any difficulty, the bench said the investigating officer is at liberty to approach the court. The petitioners might be associated with the investigation as and when required, it added.

The petition, filed before the single judge Justice G C Bharucha, had been transferred to the division bench.

"We only feel that a case may be required to be registered and investigated against persons presently not known but is likely to be identified after the probe," the bench observed.

The justices disagreed with the submissions made on behalf of the respondents that prima facie they could not be even held guilty of any offence and no report could be registered.

The bench pointed out that after investigations, the real culprits would be found to have committed offences not only under the Prevention of Corruption Act but also under various provisions of the Indian Penal Code, Companies Act, Foreign Exchange Regulation Act, and other statutes.

The Cogentrix project, which got the green signal from the Supreme Court on environmental clearance, has been caught in one legal battle or the other. The company will be generating 1000 mw of power for Karnataka.

The petitioners had alleged that 191 million Hong Kong dollars had been paid as kickbacks to politicians and the money was camouflaged under acceptable heads. They provided annexures to substantiate their charges and demanded an inquiry on 16 counts. They also sought a direction to initiate criminal proceedings against the guilty.

The prayed for setting aside the project entered with the Karnataka Electricity Board and the Mangalore Power Company and reallot it through open bidding.

Petitioner Arun Kumar broke down in the packed court hall on hearing the judgement.