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Synopsis

The Delhi High Court, recently, dismissed a petition seeking the transfer of the investigation carried out by the Economic Offences Wing to the Special Investigative Team or a superior investigating team. The court observed that no evidence was produced to explain how the investigating agency had been lax. The mere fact that the agency did not act according to the dictates of the Complainants, could not be the sole basis for transferring the investigation. 
 
The bench of Justice Subramonium Prasad emphasized, “Transfer of investigation to another agency is only done in rare and exceptional cases such as cases where high officials of State authorities are involved. Accusations against an investigating officer alone is not sufficient to transfer investigation unless there is sufficient material to show that the investigating officer is mixed up with the accused”. 

The petitions stem from a dispute involving A.N. Buildwell (ANB) and its shareholders, including Ashish Bhalla and Sunil Gandhi. ANB entered a joint venture with M/s Millennium Spire Ltd. (MSL) in 2007, but financial mismanagement, disputes, and allegations of fund misappropriation led to a fallout between MSL and Bhalla in 2013. Despite attempts to resolve the issues, including a company petition filed by investors in 2014, the company faced financial collapse. The Official Liquidator took over ANB’s assets in 2016. The accused, including Bhalla, Gandhi, and S.K. Hooda, face criminal charges, and bail applications have been filed. 

The court observed that the investigation was conducted under the supervision of the Assistant Commissioner of Police. The allegations were that funds from home buyers and investors were siphoned off, and the investigation aimed to uncover the money trail to determine where the funds were actually deposited. A forensic audit was also conducted, and the report was submitted to the investigating agencies.

The court was satisfied with the investigation and found that the investigating agency had not been negligent. 
Assessing the parameters for transferring an investigation, the court noted that an investigation is transferred only when the court determines that a fair, honest, and complete investigation has not been conducted. The transfer of investigation to another agency occurs only in rare and exceptional cases, such as those involving high-ranking State officials. 

Furthermore, the court observed that the allegations against an investigating officer alone were not sufficient to warrant a transfer unless there was substantial evidence indicating that the officer was involved with the accused. Mere allegations were not sufficient to transfer the investigation.

Moreover, the court opined that transferring the investigation from the current agency would harm the morale of the police, which should be avoided. In the absence of any material suggesting negligence by the investigating agency, and simply because the complainants were not satisfied or did not agree with the actions of the agency, it was not a valid reason to transfer the investigation.

Accordingly, the court dismissed the petitions.

For Petitioners: Senior Advocate N. Hariharan with Advocates Siddharth Yadav, Punya Rekha Angara, Sharian Mukherji, Aman Akhtar, Dishant Tiwari, Syed Murtuza Ahmed, Fuzail Mansuri and Faizan Ansari
For Respondents: Additional Standing Counsel Nandita Rao with Advocates Amit Peswani and Satya Prakash Yadav
Case Title: Renuka Kulkarni v State