SC go-ahead for trial of Jayalalitha in SPIC case

By Our Legal Correspondent

NEW DELHI, FEB. 16. The Supreme Court today cleared the decks for commencement of the trial before a special court in Chennai against the former Tamil Nadu Chief Minister, Ms. Jayalalitha, Mr. A.C. Muthiah, industrialist, and others in the `Rs. 28.29- crore loss SPIC disinvestment case'.

A Bench comprising Mr. Justice K.T. Thomas and Mr. Justice R.P. Sethi, while hearing a special leave petition filed by the CBI, suspended the Madras High Court order dated August 30, 2000, directing the special court not to proceed with the trial pending disposal of a writ appeal from Ms. Jayalalitha.

The Bench, while issuing notices to Ms. Jayalalitha, Mr. Muthiah, Chairman of SPIC, Mr. C. Ramachandran, former Industries Secretary, Tamil Nadu, and others, however, made it clear that the special court would not pronounce its judgment in the case without its prior permission.

Appearing for the CBI, the Solicitor General, Mr. Harish Salve, submitted that the direction of the High Court that the trial could go on only till the stage of framing of charges till the disposal of the appeal filed by Ms. Jayalalitha was contrary to law. He argued that as per Section 19(3)(c) of the Prevention of Corruption Act, no stay could be given directly or indirectly against the trial.

Initially the Janata Party president, Dr. Subramanian Swamy, filed a public interest writ petition alleging that the Tamil Nadu Industrial Development Corporation (TIDCO), which had 26 per cent shares in SPIC, lost about Rs. 77 crores because of undervaluation of the renunciation price of 2,000 convertible bonds in favour of SPIC.

He said that by not taking advantage of their right entitlement and selling the shares at the best obtainable market rate within three months of the allotment, Ms. Jayalalitha and her government had done a special favour to the then SPIC chairman, late M.A. Chidambaram and associates and correspondingly causing enormous loss to the TIDCO.

A single judge by an order in December 1997 directed Ms. Jayalalitha, M.A. Chidambaram (since deceased) and Mr. A.C. Muthiah to deposit the estimated loss amount of Rs. 28.29 crores to the State exchequer. The CBI was directed to take up the case registered by the State Vigilance and Anti Corruption Department and to ascertain the total loss that was caused to the Government and to proceed against Ms. Jayalalitha and the other accused.

On appeal from Ms. Jayalalitha, a Division Bench of the High Court stayed the single judge's order and directed the special court not to proceed with the trial of the case in which the chargesheet was filed in the special court on August 18, 2000. Against this order the CBI preferred a Special Leave Petition seeking a stay of the High Court order and permission for the special court to go ahead with the trial.

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