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Madras HC bench stays earlier order against Jayalalitha

The first bench of the Madras high court today directed the Central Bureau of Investigation not to arrest former Tamil Nadu chief minister J Jayalalitha, while staying a portion of the single judge's order asking her and two industrialists to pay a compensation of Rs 282.9 crores in the TIDCO disinvestment case.

Admitting an appeal preferred by Jayalalitha, the bench comprising Chief Justice M S Liberhan and Justice D Raju, however, declined to stay the order with regard to the CBI probe into the deal involving disinvestment of the shares of the Tamil Nadu Industrial Development Corporation in the Southern India Petrochemicals Limited (SPIC) owned by the industrialists M A Chidambaram and A C Muthiah.

"The CBI should investigate into the deal but should not arrest Jayalalitha," the bench ruled.

It may be recalled that the single judge Y Venkatachalam, while passing orders on a public interest litigation filed by Janata Party President Dr Subramanian Swamy challenging the disinvestment deal, directed the CBI to enquire into it and file a report before the CBI special court within a year.

Senior Supreme Court counsel Rajeev Dhawan appeared for Jayalalitha while the Tamil Nadu government was represented by senior lawyer N Natarajan.

In her appeal, Jayalalitha contended that there was absolutely no loss to the government in the transaction. On the other hand, the disinvestment resulted in profit to the TIDCO and the government, she claimed.

The fact that the present government headed by Chief Minister M Karunanidhi, who was politically against her, had not questioned the decision nor wanted to annul the same would make it clear that there was no irregularity in the transaction, she submitted.

She also pointed out that the method adopted by her government in 1992 with regard to price fixation was considered fair and reasonable by all and was not questioned by the shareholders of SPIC. While so, the finding of the single judge that she had shown favour to Chidambaram and Muthiah, chairman and vice president of SPIC respectively, was without any basis.

As a co-promotor, TIDCO was entitled to be offered the rights issue, she argued, and said the order for the CBI probe was totally unwarranted.

Jayalalitha said the conclusions of the single judge against her were unjustified as they were not based on any material and liable to be set aside.

EARLIER REPORTS:
Jayalalitha files appeal
Madras HC indicts Jayalalitha, two industrialists

UNI