Curative Petition on Rakesh Asthana’s Sterling Connections

On the basis of an oral mentioning in the morning of December 6, a bench comprising the Chief Justice of India, Ranjan Gogoi, Justice SK Kaul and Justice KM Joseph, agreed to hear Prashant Bhushan on Common Cause’s curative petition against a previous decision of the Supreme Court in chamber on December 11. The petition pertained to a decision on November 28, 2017, of the Supreme Court to dismiss his petition against the appointment of Rakesh Asthana as the Special Director of the Central Bureau of Investigation (CBI).

The curative petition

One of the grounds on which the present curative petition has sought relief, is that the impugned decision had violated the principles of natural justice. According to the curative petition, as accessed on Live Law, a legal news website, the decision had relied to a large extent on the minutes of the selection committee’s meeting. The Attorney General had submitted the minutes to the Court, however, the submission was allegedly without an accompanying affidavit, and the counsel for the petitioner was not accorded an opportunity to rebut or use the material. The petition also alleges that the Attorney General “produced the minutes of the meeting of the selection committee while concealing the most crucial document i.e. the letter and note handed in by the CBI Director.”

The curative petition also alleges that the 2017 decision was silent on the issue of Asthana’s son, Ankush Asthana’s employment in Sterling Biotech. As well his daughter’s pre-wedding party at a farmhouse owned by the promoters of Sterling Biotech, the Sandesaras.

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The Sterling Biotech Case

According to CBI’s FIR filed on October 25, 2017, in the Sterling Biotech case – in which Asthana is allegedly implicated – the company’s fraud was of Rs. 5,383 crore. The FIR alleges that the directors of Sterling Biotech had manipulated the company’s reports on turnovers, capital goods (fixed assets) and taxes to be paid on the manipulated turnover. This they did through bogus sales to farmers, sales to their own benami companies in India, sales to their benami companies in Dubai, and inflating the export value to the related entity, Richmond Overseas, in the United Arab Emirates.

Thus, by inflating the value of the company’s turnover, the directors of Sterling Biotech were able to avail of loans from banks by displaying their manipulated balance sheets. The primary bank to which this fraud pertained was Andhra Bank, through the then Director Anup Kumar Garg.

The list of names mentioned in the FIR are all those of the directors of Sterling Biotech and chartered accountants. Anup Kumar Garg is also mentioned as the Director of Andhra Bank. However, at entry 9, there is a mention of ‘other unknown private persons and public servants’.

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The 2017 Decision

Common Cause had filed a petition against an order issued on October 22, 2017, by the Secretariat of the Appointments Committee of the Cabinet, Department of Personnel and Training (DoPT) appointing Asthana as the Special Director of the CBI. The petition alleged that the appointment had been made “illegally, arbitrarily, mala fide and in violation of the principles of impeccable and institutional integrity.”

Bhushan, who appeared for the petitioners, had relied on the diaries and other papers seized during a raid on the premises of Sterling Biotech and the Sandesara Group of Companies in 2011 to bolster the allegations against Asthana’s appointment. Some of the pages of the diary seized mentioned Asthana by name. An August 30, 2017 First Information Report (FIR) filed by the CBI in connection with the seizure mentions “other public servant and private persons” under the heading of “details of known/suspected/unknown accused”.

Another red flag raised by the petitioners was that Ankush Asthana had worked in Sterling Biotech as an Assistant Manager for “2 years, 11 months”. As well as the pre-wedding cocktail party of Asthana’s daughter in a farmhouse owned by Sterling Biotech.

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The Attorney General had contended that Asthana, before being appointed as CBI Special Director, was serving as an Additional Director of the investigating agency. Asthana had been in charge of overseeing 11 zones and was supervising the investigation and trial of several ‘scam cases’. The cases mentioned in the Order of 2017 are; AugustaWestland Case, Ambulance Scam Case, Kingfisher Cases, Hassan Ali Khan Case, Moin Qureshi Case, J.P. Singh Bribery Case, Paramount Airways Case, Coal Scam Cases, AHD and Bitumen Scam Cases of Bihar and Jharkhand. The Attorney General had also told the Court that Asthana was “supervising a number of Special Crime cases which were registered on the orders of Courts or on the request of State Governments besides cases against Ministers/officials of Delhi Government.”

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The minutes of a meeting of the selection committee on October 21, 2017 revealed that the CBI Director – who’s views are also considered by the selection committee – through a letter had enclosed an unsigned note on Sterling Biotech and related entries which pertained to Asthana. The committee had discussed the matter with the CBI Director, and had concluded that there is no conclusive finding that the person mentioned in the note is the same Asthana. It was also found that the CBI had moved the proposal on July 6, 2017 mentioning that Asthana of the 1984 Gujarat Cadre was suitable to hold the post of Special Director. The committee also kept in mind that the vigilance committee does not entertain complaints received on the verge of appointment or promotion unless proven misconduct exists.

The Court took note of the minutes and subsequently dismissed the petition.