Over 103 kgs of Gold go missing from CBI custody: Madras High Court orders Police inquiry

The Madras High Court on Friday directed the CBCID, Tamil Nadu to probe the apparent loss of over 103.84 kgs of gold from the custody of the Central Bureau of Investigation (CBI), rejecting the Central agency's objections to being investigated by the State police (C Ramasubramaniamv. Inspector of Police and SBI). .Justice PN Prakash observed in his judgment,."The learned Special Public Prosecutor contended that the prestige of the CBI would come down, if investigation is done by the local police. This Court cannot subscribe to this view, because, the law does not sanction such an inference. All policemen have to be trusted and it does not lie in the mouth of one to say that the CBI have special horns, whereas, the local police have only a tail.".... it does not lie in the mouth of one to say that the CBI have special horns, whereas, the local police have only a tail.Madras High Court.Following raids in 2012, the CBI claimed that it had seized 400.47 kgs of illegally imported gold from a company, Surana Corporation Limited (Surana). However, after the CBI closed criminal proceedings against Surana, only 296.606 kgs were found to be in the custody of the CBI. .The gold was stated to have been kept under lock and seal at the vaults of Surana. This was sealed off by the CBI after its 2012 raid in the presence of witnesses. The High Court was told that the keys to the vault were handed over to a Special CBI Court, although the agency was unable to recall when the keys were handed over. .The CBI attributed the discrepancy to a mistake in recording the gold's quantity during inventory. This explanation did little to convince the Court, which pointed out,."One can understand if the difference had been a few grams, but, this Court is unable to fathom as to how there could be a discrepancy of more than 100 kgs. in the weight of gold. Gold will not diminish in weight like ganja by efflux of time. Unfortunately, it appears that all parties to the great bullion expedition have deflected the golden question as to where this alleged gold weighing 103.864 kgs. actually was.".While ordering the CBCID probe, the Court added:."It may be an Agni Pariksha for the CBI, but, that cannot be helped. If their hands are clean, like Sita, they may come out brighter, if not, they would have to face the music. Averments with regard to weight in a panchanama cannot be taken lightly, especially in a case of this nature when the difference is not a few grams, but, a whopping one lakh grams. Be it noted, in NDPS Act cases, weight of the contraband determines the quantum of punishment.".More on "the great bullion chase".Apart from CBI and Surana, the parties entangled in the case included a consortium of Banks led by the State Bank of India to whom Surana owes money, C Ramasubramaniam, the liquidator appointed after Surana invoked corporate insolvency proceedings, and the Ministry of Commerce and Industry..The case saw the CBI file two FIRs in 2012 and 2013, the transfer (on paper) of the seized gold from the file of the first to the second FIR file and the closure of both FIRs. .After accepting the closure of the case against Surana, a Special Court directed that the seized gold be transferred (on paper) to the Director General of Foreign Trade. This was challenged by Surana in the High Court, which ruled in their favour. Accordingly, the Special Court issued notice to Surana pursuant to a plea for the return of the seized gold. .In the meanwhile, banks seeking the repayment of credit from Surana moved the Special Court for the return of the seized gold to them. Surana and the banks went on to agree that the gold would be handed over to the banks. The joint compromise was accepted by the Special Court in 2017..Or, as whimsically narrated by Justice Prakash in his order, ."... all of them, like the famous character Colorado played by the late Omar Sharif in the Hollywood blockbuster, Mackenna's Gold, went on a gold hunting expedition to the Special Court. Like Colorado entering into an agreement with Monkey, the apache, to share the spoils of gold, the State Bank of India and Surana entered into an agreement and filed a compromise memo before the Special Court in Crl.M.P.No.5916 of 2015, requesting the Court to hand over the gold weighing 400.47 kgs. to the State Bank of India for settlement of the dues to the Banks.".The interim resolution professional (IRP) /Surana's liquidator, C Ramasubramaniam also moved the NCLT to direct the CBI to hand over the gold to the banks. .Meanwhile, the Ministry of Commerce and Industry, "not wanting to be left out in the great bullion chase" also jumped into the matter, moving a plea in the High Court for the return of gold to them. Their request was, however, rejected by the NCLT which ruled in favour of handing over the gold to the IRP/Liquidator in the presence of bank officials. .The saga took an unexpected turn when the CBI, the banks and Surana revisited the Surana vaults to check on the seized 400.47 kgs of gold, which now only weighed 296.606 kgs. The CBI was not able to account for the shortage of 103.864 kgs, prompting the IRP to move the High Court seeking a direction that the CBI hand over the purportedly missing gold..Citing, inter alia, that the gold was weighed using a machine found at Surana, that it was sealed of in the presence of witnesses, that 72 keys to the vaults and safes were handed over to the Special Court and that inspections were conducted twice in February, the CBI asserted that they were not liable for any gold shortage. .The seized gold was actually 296,606 kgs and an error in inventory reflected the wrong weight, the Court recorded the CBI as submitting. The agency added that an internal enquiry is being conducted. .The IRP and the banks stood united in their contention that there was unimpeachable documents evincing that the CBI had seized 400.47 kgs of gold. .The Court, in turn, has now directed the State's CBCID to complete its investigation in the matter within 6 months from the date of FIR registration. The outcome of the probe is to be intimated before the jurisdictional Metropolitan Magistrate in Chennai and copy furnished to the Liquidator, the Judge added. .[Read Judgment]