The Mumbai high court on Friday ordered CBI to probe the complaint filed by Tata Finance Ltd against its former managing director Dilip Pendse for allegedly cheating the company to the tune of Rs 400 crore (Rs 4 billion).
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Expressing doubts over the investigations made by economic offences wing of city police, Justice Ranjana Desai and Justice P V Kakade ordered CBI probe into alleged misappropriation of company funds by Pendse during the period December 1999 to May 2000.
In July 2002, the economic offences wing had filed "C Summary" report (closure of case) saying there was no evidence against Pendse.
In another development, the court ordered an inquiry by its deputy registrar into the affidavit filed by a police officer making allegations against prosecutor Pravin Singhal.
Police officer Dilip Sawant alleged in an affidavit that the police department was not informed about this matter by Singhal, who earlier appeared in the matter. He also alleged that the prosecutor had advised police not to file an affidavit.
The prosecutor, however, denied allegations levelled by the police officer over lapses made by him, while handling the case and urged the court to order an inquiry into the matter.
The court observed that Singhal's statement had cast shadows of doubt over investigation conducted by the economic offenses wing of city police. Hence the matter was being entrusted to CBI for a fresh probe.
The company pressed for CBI inquiry saying the economic offences wing had filed a "C Summary" report apparently under pressure from the office of Deputy Chief Minister Chhagan Bhujbal despite clear findings of various offences and irregularities committed by the accused. Eminent lawyer Ram Jethmalani appeared for Tata Finance.
On behalf of the state government, a battery of lawyers Kapil Sibal, Satish Maneshinde and Rui Rodgrigues argued that transfer of investigations to CBI was not justified.
In August 2003, a magistrate had rejected the police plea to close the case and observed that there were certain lapses in investigations. He also ordered another investigating officer to conduct the probe.
The company submitted that Pendse was appointed managing director for five years from June 1996 to May 2001. After expiry of his term, Pendse informed the company that he did not intend to seek reappointment.
Meanwhile, the Securities and Exchange Board of India informed the company about Pendse cheating Tata Finance. In April 2001, the affairs of Tata Finance and its group companies was probed and it was found that Pendse had conspired with other officers to commit fraud of Rs 400 crore (Rs 4 billion). He resigned as director of Nishkalp Trading Company, a sister concern of the Tata group, in June 2001.
On August 2001, Tata Finance filed an FIR with economic offences alleging that Pendse had siphoned off huge funds from Nishkalp Trading Company. But till date, the FIR has not been probed, it was alleged.
