Delhi HC orders CBI & DRI to investigate allegations of over-invoicing by companies including Adani, Essar Groups

The Delhi High Court on Tuesday directed the Centre, the Central Bureau of Investigation and the Directorate of Revenue Intelligence (DRI) to meticulously and expeditiously look into the allegations of over invoicing of coal imports and equipment by several companies, including Adani Group and Essar Group, and take appropriate actions in accordance with the law.

“this Court finds it appropriate to direct the respondents to meticulously and expeditiously look into the allegations of the petitioners to unearth actual factual position and take appropriate actions against the erring companies, if any, as per law,” a bench comprising justice Suresh Kumar Kait and Neena Bansal Krishna ordered.

“So far as the petitioners are invariably dissatisfied with the manner in which investigation of different cases has been carried out by the respondents and have thus, approached this court seeking setting up of a Special Investigating Team (SIT) under a retired Judge of the Supreme Court …,” the judgment said.

The high court was hearing PILs – one by the Centre for Public Interest Litigation and Common Cause, and the other by Harsh Mander seeking a probe by Special Investigating Agency into reports of DRI against various private power generating companies for over invoicing carried out by them. Mander had also sought the CBI probe in respect of over invoicing in power projects or to set up a SIT under a retired Supreme Court judge.

As per status report, multiple proceedings are pending before CESTAT and other forums. The CBI had registered two cases against the erring companies and in the first case PE has been concluded and investigation in both the cases is in progress, the judgment noted.

DRI had told the HC that show cause notices have been issued in all cases of imports of capital goods/power equipment wherein investigation was carried out and also that some cases are pending adjudication and in some cases appeals have been filed. Letters Rogatory to Overseas Courts in Singapore, Dubai, Hong Kong, Switzerland & Indonesia to gather evidence and documents have been issued, however, since the process is time consuming and multiple countries are involved, all necessary steps have been taken by the DRI for expeditious completion of the same.

However, the petitioners argued that modus operandi adopted by the firms is that though the coal or equipment are shipped directly to India, however, the invoicing had been routed through a different company incorporated abroad, which is directly owned and controlled by the promoters of the project in India.

Rampant and excessive over-invoicing committed by power companies has a direct impact on power tariff which is being paid by millions of consumers, they argued, adding that this siphoning of money amounts to cheat the shareholders and the tax authorities as well.