In SLP (Crl.) 12779 - 12781 of 2022 - SC- Cash-for-job-scam: Supreme Court declines relief to Tamil Nadu Minister Senthil Balaji in transport job scam investigation; dismisses plea to refer Vijay Madanlal 2022 Judgment to larger Bench
Justice Krishna Murari and Justice V. Ramasubramanian [15-05-2023]

Read More: Y. Balaji v Karthik Desari

Simran Singh

New Delhi, May 17, 2023: The Supreme Court has allowed a batch of appeals against an order of the Madras High Court that had directed fresh enquiry into the alleged cash-for-jobs scam, wherein the present Tamil Nadu Electricity Minister V. Senthil Balaji had been accused of accepting bribes from job aspirants in exchange of appointments to the State Transport Corporation between the year 2011-2015.

The Division Bench also set aside the direction of the Madras High Court, via order dated 31-10-2022, which had stayed the proceedings in the money laundering case and paved way for the Central Bureau of Investigation (CBI) to continue a de novo or fresh investigation against the appellant.

It further dismissed the plea to refer the judgment of a full Bench decision in Vijay Madanlal Choudhary v Union of India which had upheld several provisions of the Prevention of Money Laundering Act, 2002 (PMLA) to a larger Bench.

The Bench was hearing the appeal preferred by the Enforcement Directorate (ED) against the order dated 31-10-2022 of the Madras High Court which had stayed the proceedings of money laundering against the accused and few others in the Transport Corporation of Tamil Nadu. Along with this, the Bench was also hearing other appeals challenging the order of the High Court vis-a-vis re-investigation of the case.

“The appeals arising out of the order for de novo investigation are allowed. That portion of the order of the High Court dated 31.10.2022 is set aside. The directions issued in the said original petition for de novo investigation are set aside. The Investigation Officer shall proceed with further investigation in all cases by including the offences under the PC Act. Any let up on the part of the Investigation Officer in this regard will pave the way for this Court to consider appointing a Special Investigation Team in future.”

The issue was of the year 2014-2015 when recruitment was conducted for the post of Reserve Crew Drivers, Crew Conductors, Junior Tradesman, Junior Assistant, Junior Engineer and Assistant Engineer in all the Transport Corporation of Tamil Nadu. It was alleged that various offices of the Transport Department conspired to execute the scam including the appellant who was a Transport Minister then. However, in the year 2018, a complaint was filed against the appellant and others for taking bribes from job aspirants on the false promise of appointing them to various posts in the Metro Transport Corporation. Interestingly, the jobs that were promised were never offered as the names of victims in the recruitment list was never published nor their money was returned.

The appellant and others were accused for offences under Section 406, 420 and 506 of the Indian Penal Code, 1860 wherein the High Court in the year 2021 set aside the cheating case pending before the Special Court after being informed that the complainant and 13 alleged victims had arrived at a settlement with the accused. Subsequent to this, 2 other First Information Reports were also stayed.

The appellant had received summons from ED, which was challenged before the Madras High Court on the ground that there existed no jurisdictional facts to initiate proceedings under PMLA. The High Court agreeing with the contentions of the appellants, restrained the ED from proceeding against the appellant , quashing the summons issued by the ED vide order dated September 2022. However, The Supreme Court Division Bench of Justice S. Abdul Naseer and Justice V. Ramasubramanian set aside the order of the Madras High Court, restoring the criminal complaint against the appellant and others stating that “corruption was an offence against the State and Society at large”

The ED after completing its probe, filed chargesheet in multiple cases wherein the Madras High Court had stated that the investigating agency had failed to secure crucial forensic evidence. The High Court further went on to state that the investigation into the alleged offences of money laundering had considerably suffered due to numerous petitions and applications filed by the appellant and other parties connected to the case.

In the year 2021, the ED after conducting its due investigation had registered 4 cases against the appellant in connection with the cash-for-jobs scam. Out of those, 2 cases were related to the irregularities in the appointment of bus conductors in the State Transport Department and the remaining 2 cases were related to the appointment of drivers and junior engineers. All the appointments were made in the year between 2011-2015 during the appellant’s tenure as Transport Minister in the All India Anna Dravida Munnetra Kazhagam (‘AIADMK’) Government.

Subsequent to the cases registered against him, the appellant moved the Madras High Court with the prayer of being discharged from the two cases claiming that he was a victim of political vendetta as he had previously defected from the AIADMK to the Dravida Munnetra Kazhagam party, however, the High Court did not agree with the contentions of the appellant and had directed the State Police to conduct a fresh probe.

The Madras High Court had directed that “the investigation should be conducted ab-initio comprehensively without reference to the earlier investigation on record covering all the aspects… including whether the offence under Prevention of Corruption Act, 1988 are made out against the accused….if the investigating agency makes out a case for cognizance of offence against the accused then the investigating agency of the predicate offence shall provide the relevant materials/documents to the Directorate of Enforcement so as to enable it to invoke its jurisdiction to commence its enquiry under the P.M.L.A Act thereafter.”

The Supreme Court Bench, with respect to the petitions filed by the appellant challenging the initiation of proceedings under PMLA stated that “The appeals arising out of the order of the Division Bench of the High Court dated 01.09.2022 are allowed. The order dated 01.09.2022 is set aside. All the three writ petitions challenging the initiation of proceedings by ED shall stand dismissed.”

Further, the Bench vis-a-vis other appeals, contempt petition and interlocutory application held that “The appeal arising out of the order of the High Court dated 30.03.2022 is dismissed….The appeal challenging the orders dated 27.11.2019 and 01.11.2021 of the High Court relating to extension of time for completion of investigation is dismissed. The Investigation Officer shall proceed with further investigation and file Further/Final Reports within two months.”

The accused had further sought for larger Bench reference for the case of Vijay Madanlal case (Supra), a plea which was rejected on the ground of 'doctrine of stare decisis’  (to stand by decided matters and not disturb the settled matters) and citing the ‘principles of judicial discipline’. The Bench was of the view that the the reference would bring all pending investigations in money laundering cases to a grinding halt.

The Court also referred to review petitions filed against the Vijay Madanlal case (Supra) on 25-08-2022 which stated that 2 aspects of the judgment required reconsideration being:

1. not providing the accused with a copy of the Enforcement Case Information Report
2. reversal of the burden of proof and presumption of innocence

The Bench stated that the contentions of the respondents canvasing in the case had nothing to do with the aforementioned two issues, therefore, the accused could not have a piggyback ride on the review petitions.

It was further noted that the accused did not file any appeal against the High Court order therefore, they were entitled at the maximum, to argue only for the dismissal of the appeals filed by ED and others against the said decision. “Suppose we agree with the learned counsel for the accused and dismiss the appeals filed by ED, even then they cannot have an escape route since the impugned order of the High Court protects them only till the other proceedings are kept at bay.”

Therefore, the Bench was of the view that the accused was not entitled to either seek a reference to a larger Bench or to seek to defer the matter till a decision was rendered in the matters involving larger issues.