Rajasthan High Court: Dinesh Mehta, J., granted interim protection from arrest to former Union Minister Arun Shourie along with former disinvestment secretary Pradip Baijal issuing a stay notice and rebuked the CBI court for issuing arrest warrants against them along with 3 others in connection with the Laxmi Vilas Palace hotel case.


The case relates to the disinvestment of Laxmi Vilas Palace Hotel, which was an India Tourism Development Corp (ITDC) hotel and was sold to Bharat Hotels Ltd., a private entity when Mr Shourie was the disinvestment minister in the Atal Bihari Vajpayee-led National Democratic Alliance government at the Centre in 2001. Petitioner in the current revision petition is presently Managing Director of Bharat Hotels Ltd., and is wife of late Shri Lalit Suri, who was Managing Director of said company at the relevant time (year 2001) when the company had participated in the process of disinvestment of  Laxmi Vilas Hotel. The CBI had registered a case on 13-08-2014, that some unknown officers from the Department of Disinvestment, in connivance with a private hotelier during 1999-2002 renovated and then sold Laxmi Vilas Palace at a throwaway price and after investigation, it had concluded that no case was made out against any of the accused persons. On 16-04-2019, CBI had submitted its closure report before the special judge of CBI. However, on 13-08-2019, the special judge had rejected the closure report and asked CBI to further investigate the matter by a senior officer of the rank of deputy superintendent of police (DSP), the CBI Court on 16th September had ordered the registration of cases against to former Union Minister Arun Shourie, former disinvestment secretary Pradip Baijal, Ashish Guha, the managing director of Lazard India Ltd who was the financial adviser, valuer Kantilal Karamsey of Kantilal Karamsey & Company and Jyotsana Suri, director of Bharat Hotels Ltd. Again on 15 June 2020, CBI filed a supplementary final report before the special judge submitting that no criminality was found on part of any person and reiterated the request for closure of the case.


The Counsel for the petitioner in Jyotsana Suri Case, Mr. Harish Salve assisted by Harish Nadda submitted that the CBI Court had refused to accept the final closure report filed by the CBI but has also issued an arrest warrant to the petitioner and has gone ahead to attach the assets, land, building and hotel business of the said hotel. He further submitted that process was transparent and open bids were invited while fixing the reserve price at Rs 6.12 crores. It was submitted that the petitioner was the sole bidder and had offered a bid of Rs 7.52 Crores (25% above the reserve price) and was declared successful. He further contended that, there was no material with the CBI Court to come to the conclusion that the petitioner’s Company has defrauded the Central Government by Rs 244.36 Crores. He contended that the CBI Court was not legally justified in issuing warrant of arrest to the petitioner. Per contra, the Counsel for the respondent,  R.D. Rastogi assisted by B.P. Bohra submitted that the District Collector, Udaipur – the appointed receiver had taken charge of the property at 12.35 p.m. on 16-09-2020 itself, and submitted that staying the effect and operation of the order at this juncture, would amount to putting the clock back.

In Arun Shourie’s case, the counsel for the petitioner, Mr. Prashant Bhushan and  Pradeep Shah contended that the trial Court had committed an error holding that the prosecution sanction under Section 19 of the Prevention of Corruption Act was not required and that the High Court in Pradip Baijal’s case had already considered this argument and had granted interim order/protection to the petitioner. They further informed that the petitioner was a senior citizen, writer and editor, ex-minister and was suffering from various age-related issues.


The Court in the Jyotsana Suri’s case rebuked the CBI Court for issuing arrest warrants against the former Union minister and four others. The Court observed that,

 “Court below has not recorded any reason worth the name before resorting to the extreme mode of securing presence of an accused – issuing arrest warrant. The issuance of warrant of arrest becomes all the more serious, when the petitioner was not put to any notice of the pending proceedings.”

The Court further ordered that Mr Shourie and Mr Baijal shall not be arrested in pursuance of the arrest warrant issued by the Special Judge, CBI in the petitions filed by them individually. [Jyotsana Suri v. Union of India, S.B. Criminal Revision Petition No. 663 of 2020, decided on 22-09-2020]

Suchita Shukla, Editorial Assistant has put this story together

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