Laxmi Vilas Palace Hotel case: Rajasthan HC stays CBI court’s order, raps it for issuing arrest warrants

It ordered that the possession of the property be given back to the private company that ran it; petition filed by Arun Shourie listed for hearing today

Rajasthan High court (Photo courtesy- social media)
Rajasthan High court (Photo courtesy- social media)

NH Web Desk

The Jodhpur Bench of Rajasthan High Court on Tuesday rapped the CBI court for issuing arrest warrants against former Union Minister Arun Shourie and four others in connection with the disinvestment of Laxmi Vilas Palace Hotel in Udaipur, legal news website has reported.

A Single Bench of Justice Dinesh Mehta observed, "This court is constrained to observe that the court below has not recorded any reason worth the name before resorting to the extreme mode of securing the presence of an accused - issuing an arrest warrant. The issuance of a warrant of arrest becomes all the more serious, when the petitioner was not put to any notice of the pending proceedings."

It may be noted that, apprehending the possibility of arrest following the order of the Special CBI court, Jyotsana Suri, managing director of Bharat Hotels Ltd, filed a plea in the High Court which was being heard on Tuesday by the Bench of Justice Dinesh Mehta.

It was submitted by the Counsel for the petitioner that without even putting her on notice or issuance of summons by the Special Court, the issuance of an arrest warrant directly was bad in the eyes of law.

Senior counsel PP Chaudhary and Harish Salve were representing Jyotsana Suri before the court.

It was argued before the court that the CBI itself had submitted before the court that, since there was no evidence of illegality, the case against the accused should be closed.

In these circumstances, it was contended, the special court was not justified to reject the closure report filed by CBI without any sound basis.

The Bench observed, "While issuing an arrest warrant, court below has not recorded any finding as to why petitioner's custodial interrogation is required, particularly when all the relevant documents are on the record of the court below and the transaction dates back to the year 2001, when she was not at the helm of affairs of the company.

Apart from this, the Bench also ordered that the possession of the property, be given back to the private company that ran it.

The possession of the hotel was handed over by the special CBI court to the state government on September 16.

The court also ordered that the petitioner shall not be arrested in pursuance of the arrest warrant issued in relation to the impugned order dated 15.09.2020 passed by Special Judge, CBI Cases, Jodhpur and that the petitioner shall appear before the court below on 08.10.2020 and furnish a personal bond of Rs.5 lacs and two sureties of Rs.2.5 lacs each.

Notably, the court's decision is the outcome of the petitions filed by Jyotsna Suri, former disinvestment secretary Pradeep Baijal and then managing director of investment firm Lazard India Limited, Ashish Guha.

Similar orders were passed in the pleas of Pradeep Baijal & Ashish Guha.

Significantly, Arun Shourie has also filed a similar plea before Rajasthan HC, which will come up for court's consideration on Wednesday.

It may be noted that a special court at Jodhpur had asked the CBI on 16th September to file cases against former Union minister Arun Shourie and the then disinvestment secretary Pradip Baijal over the sale of an ITDC hotel, allegedly at a loss of Rs 244 crore to the exchequer.

The CBI court had also directed the filing of cases against three others associated with the sale two decades back of Laxmi Vilas Palace Hotel in Udaipur, during the term of the Atal Bihari Vajpayee-led National Democratic Alliance government at the Centre.

Along with Shourie and Baijal, the court had ordered the registration of cases against 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.

The court had also observed that the investigating officer had accepted in the probe that Laxmi Vilas Hotel was undervalued, and he should have presented a chargesheet.

The court ordered that a criminal case be registered against Shourie and the others. It had also summoned the accused via arrest warrants.

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