New Delhi: The Andhra Pradesh government suffered a setback at the Supreme Court in connection with taking stringent action against Ramoji Rao and Sailaja Kiron in the Margadarsi Chit Fund case. The court has refused to interfere with the interim orders issued by the Telangana High Court. The Supreme Court dismissed two SLPs filed by the AP government. At the same time, it also made it clear that there was no need to take up the petition challenging the Telangana High Court’s legal jurisdiction to deal with the Margadarsi case. The court disposed of the petition while issuing the orders. It issued directions to settle everything related to this case in the Telangana High Court itself.
The Supreme Court refused to interfere with the interim orders issued by the Telangana High Court that it has the legal jurisdiction to take up the cases booked against Margadarsi Chit Fund Company by the Andhra Pradesh CID Police. The apex court disposed of the petition filed by the AP government challenging the Telangana High Court’s interim orders. It also gave direction that all the final arguments in connection with the case will have to be presented before the High Court itself.
Legal jurisdiction is the main issue in the case, hence, we thought it would be better to dispose of the petition filed to challenge the interim orders, opined the bench comprising Justice JK Maheshwari and Justice KV Vishwanathan. "We assume that the High Court should look into the petition on the basis of its merits and take a decision accordingly, the bench said. If any specific context arises, the petitioner (AP government) can come to this court and it will have the liberty to challenge the jurisdiction at that time," it said.
The bench felt that the AP government’s petition has been rendered infructuous in this background, the bench said. The Supreme Court refused to interfere with the Telangana High Court orders prohibiting stringent action against Margadarsi Company’s Chairman Ramoji Rao and MD Sailaja Kiron.
As soon as the case was taken up Justice Maheshwari said in some cases related to this matter notices have not yet been received, after notices were received on those cases also we will hear further arguments on the matter.
Responding to this, a senior advocate appearing for the AP government - Maninder Singh said notices will be sent to all the respondents in the case. Interfering at this juncture, Justice JK Maheshwari said let us keep the transfer petition pending and look into the remaining two petitions on the interim orders.
Speaking at this juncture, Justice KV Vishwanathan said since this is a case related to legal jurisdiction, if the case you filed there is permitted then present your arguments on a merit basis. "Was it not said that the case proceedings will take place at Telangana High Court? No further questions will if the case is rejected there. If the petition is allowed, you can come here to present your arguments on legal jurisdiction."
Justice JK Maheshwari then said the case will be looked into on the basis of merits. If the petition is rejected on the basis of merits you need not come here. If the petition is allowed, you can come here to present arguments on jurisdiction, he said.
Interfering at this stage, senior counsel appearing for Margadarsi, Mukul Rohatgi took to the notice of the court that already charge-sheets have been filed in connection with some FIRs on this case.
Then another senior advocate Neeraj Kishan Kaul presented an argument on behalf of the AP government. Responding to this Justice JK Maheshwari and Justice Viswanathan said the issue of jurisdiction is open. You can come to this court if the Telangana High Court’s verdict goes against you.
Neeraj Kishan Kaul said the chargesheet has already been filed in connection with an FIR. The trial court in Andhra Pradesh will fix the charges. On the other hand, the Telangana High Court is looking into the FIRs. Every allegation levelled in the FIR is related to Andhra Pradesh. How can Telangana High Court interfere in that, Neeraj Kaul asked.
Both the judges refused to concur with the argument. Speaking on this, Justice Maheshwari said, “According to this case, some chit fund company offices are located in Andhra Pradesh. It is being said that funds collected from there are being transferred to the main office in Hyderabad, from there the funds are being utilised for various activities. This is not a simple case”.
Continuing his arguments on behalf of the AP government, Neeraj Kishan Kaul said the main allegation is that instead of maintaining independent bank accounts for the company’s chit fund branches the money was deliberately being shifted to a corporate account and it was being diverted from there. Similarly, the balance sheets related to special accounts are not being maintained. The successful bidder should furnish security and take the entire amount. But this company’s representatives are asking them to deposit by offering interest. The funds are being misused in one State and in another State the funds are being diverted to mutual funds.
Finally, the money has to be repaid in Andhra Pradesh only. Hence, it is not proper to argue that since investments in mutual funds were made from Hyderabad, said advocate Kaul. Since the foremen and witnesses are in Andhra Pradesh, the proceedings should be also conducted there, he said.
Responding to this Justice Viswanathan said it would be better if the arguments being presented here and the time being spent here are utilised for the main case there. "You will get protection if the case is looked into on the basis of merits and your arguments are taken into consideration on the matter of jurisdiction. If the verdict goes against you, then come here," he told the AP government’s advocate.
Speaking at this juncture, Margadarsi counsel Mukul Rohatgi reminded the bench that when the Telangana High Court says that it has the jurisdiction to take up the matter, the transfer petitions filed by the AP government become invalid and they become infructuous. When the AP government’s advocate Maninder Singh pleaded with the court to at least look into the transfer petition, the court refused to do so. Let everything be taken up in the High Court, Justice Maheshwari said.
Considering the background of the case and the jurisdiction, let the High Court itself take up the matter. You can also present your arguments there, the judge said. When advocate Maninder Singh pleaded to at least keep the case pending, the judge refused to do that also. “What will be the use, unnecessarily a sword will remain dangling over the High Court,” the judge said while passing the orders.
The apex court also dismissed the petition filed by the AP government challenging the interim orders issued by the Telangana High Court finding fault with the appointment of chit auditor. The case was disposed of with the words of Justice Maheshwari, who said “We are refusing to interfere with the High Court’s interim orders.”
