CBI case on weak foundation. Top builder off the hook?

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By Lalatendu Mishra and Samiran Saha

Illustration: Naorem Ashish

WHEN THE case first surfaced in 2008, the Central Bureau of Investigation (CBI) had accused Mumbai’s top real estate major, Hiranandani Properties Private Ltd, of cheating — by not depositing employees’ provident fund dues worth Rs 168 crore. But when the matter came up for hearing on 23 July this year, the investigating agency whittled down the amount to around Rs 10 crore, giving no explanation. And this enabled Niranjan Hiranandani to obtain anticipatory bail from the special CBI court in Mumbai on 4 August. The court also seemed to be convinced that there was no fear of the accused absconding.

Yet, just a day before, the CBI had issued a press statement saying the brothers had “cheated the Employees’ Provident Fund Organisation (EPFO), India, to the tune of Rs 168 crores”. The agency also alleged that the builders “connived with corrupt officials of the EPFO and deposited a meagre Rs 2.92 lakh to close the case, illegally”.

And it followed this up by aggressively seeking their custody: because the brothers had apparently failed to show up at the CBI office, despite repeated summons.

In its petition before the sessions court in Mumbai, the CBI alleged that between March and September 2006, KS Arya, MR Yadav, Rajnikant (only one name given) and K Gopalan, while working as public servants in the office of the Regional Provident Fund Commissioner, Bandra, Mumbai, “entered into a criminal conspiracy” with Niranjan L Hiranandani and Surendra L Hiranandani, both directors of the company, “with the intention of cheating the EPFO”.

The lawyer representing the brothers, Brian A D’Lima, says the next hearing has been fixed for 13 August.

The CBI’s petition had alleged that the Hiranandanis had called several meetings with contractors who were working for their companies and “coerced them to prepare and submit false wage records”. They were told to show the daily wages of site workers to be more than Rs 250, instead of the actual Rs 150 a day. It may be noted that it is optional for companies paying more than Rs 6,500 a month to subscribe to the fund under the Provident Fund Act. This would have allowed them to avoid paying the employers’ contribution, which altogether comes to around 25.6 percent of the wages. “Not a single employee had opted for it,” the petition said.

The Hiranandani brothers were accused of siphoning off employees’ provident fund dues

The CBI is said to have searched the office premises of 21 contractors of the Hiranandani Group and recovered a large number of wage records containing fake signatures and thumb impressions. “The said false documents were prepared by the contractors at the behest of the Hiranandani brothers,” the CBI’s petition further said. With so many flipflops, the CBI itself seems to be in need of a provident case.

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