The Bombay High Court on Thursday quashed all the letters rogatory sent by the Directorate of Revenue Intelligence in connection with its investigation into the overvaluation of coal imports by Adani Enterprises, PTI reported. Letters rogatory are formal requests to foreign countries to seek judicial help in investigating offshore entities.
The Directorate of Revenue Intelligence is investigating at least 40 companies, including those from the Adani Group, Anil Dhirubhai Ambani Group and Essar Group, for alleged overvaluation of coal imports from Indonesia between 2011 and 2015. In March 2016, the Directorate of Revenue Intelligence had alleged that Indonesian coal was imported directly to India but import invoices were routed through intermediaries – allegedly subsidiaries of Indian companies – in other countries to artificially inflate the value.
The DRI had sent letters rogatory to countries such as Singapore, Hong Kong, Switzerland and UAE. In August 2018, an Adani Group company moved the Bombay High Court seeking to quash all requests by India to other countries for help in investigation. It did so after a Singapore court directed some group companies to produce documents in an investigation after receiving a letter rogatory from India. The next month, the Bombay High Court gave an interim stay to Adani Enterprises but the Directorate of Revenue Intelligence moved the Supreme Court as its investigation was forced to stop. The top court had then directed the Bombay High Court to settle the case by the end of June this year.
A division bench of Justices Ranjit More and Bharati H Dangre allowed Adani’s petition. “The action of the respondents in giving effect to the letters rogatory issued by the learned metropolitan magistrate, Mumbai... cannot be sustained and it deserves to be quashed and set aside,” the High Court said.
“We make it clear that we have not gone into the merits of the letters rogatory issued by the magistrate,” the court order added. “We have only dealt with the contention as to whether it was permissible for the magistrate to issue such letters rogatory without following the procedure mandated by... CrPC [the Code of Criminal Procedure].”
In its petition to the Bombay High Court last year, Adani Enterprises had claimed that the Letters Rogatory were issued without any notice or registering of an FIR. But the DRI, in its June 13 affidavit to the High Court, said that investigations under the Customs Act, Prevention of Money Laundering Act, Wildlife (Protection) Act and the Companies Act “does not commence by registering FIRs or by seeking an order from a Magistrate unlike the police officers”. The coal investigation, under the Customs Act, thus did not require an FIR.
“AEL [Adani Enterprises] has frivolously invoked unrelated and inapplicable principles such as fundamental rights to cast aspersions on a diligently followed investigation procedure adopted by the DRI,” said the affidavit. The Directorate of Revenue Intelligence had accused Adani Enterprises Limited of trying to obstruct its investigation.