‘The CBI cannot arbitrarily wander into the realm of ‘decision making’ of the public servant or quasi-judicial authority’

Former Whole Time Member of the Securities and Exchange Board of India (SEBI), K. M. Abraham, against whom the Central Bureau of Investigation (CBI) has registered a Preliminary Enquiry (PE) over alleged irregularities in giving sanction to MCX Stock Exchange in 2008, has questioned the authority of the investigating agency to enquire into the decision-making process in SEBI which is a regulatory and quasi-judicial body.

Mr. Abraham appeared before the agency in Mumbai for questioning on May 7 and handed over a 24-page signed statement to the CBI that takes the controversy right into the investigating agency. Dr. Abraham points out in his statement, a copy of which is with The Hindu, that the PE “runs counter to and flouts the dictums and guidance” laid down by the Supreme Court in its various judicial pronouncements.

The CBI has every right to probe into whether as a public servant he has taken any illegal gratification but it cannot review the decision-making process itself as the PE seeks to do, Mr. Abraham says in his statement. “The CBI cannot arbitrarily wander into the realm of ‘decision making’ of the public servant or quasi-judicial authority itself unless there is at least one ‘decision’ of that public servant that is characterised clearly and unequivocally as defined under the relevant sections in the Prevention of Corruption Act,” he says. The starting point of any enquiry has to be a ‘decision’ and not the ‘decision-making’ itself.

“… this PE instituted around decision making in SEBI… is ultra vires the powers of the CBI and encroaches into the powers of review given only to statutory and judicial bodies,” according to Dr. Abraham.

Leaking of PE

He has also gone on the offensive against the investigating agency for revealing the fact of registration of PE against him and former Chairman of SEBI, C. B. Bhave, to the media. “By disclosing information about the PE directly or indirectly, the CBI has contravened the principle of confidentiality laid down explicitly in its own Manual,” Dr. Abraham points out.

Directing his angst against the CBI Director, Ranjit Sinha, Dr. Abraham says that Mr. Sinha “appears very casual and nonchalant about the leakage” and his comments to a former CBI Director D. R. Karthikeyan (published in a newspaper and not denied till date) when he asked Mr. Sinha why the information was made public, “Nothing remains a secret these days…” was “outrageous”.

Taking umbrage at Mr. Sinha’s comment asking what was there to be so agitated about the leak of the PE since there have been no arrests or raids, Dr. Abraham says: “… his [Mr. Sinha] comments are to say the least insensitive and outrageous, given that the CBI is toying with the dignity and reputation of people who have toiled hard their entire career to preserve purity in their public life.”

The former SEBI board member, who is now an Additional Chief Secretary in the Kerala Government, has also questioned the timing of the leak on the same day — March 13 — when the CBI raided the promoters of National Spot Exchange Ltd. (NSEL), which is caught in a Rs.5,600-crore scam. Dr. Abraham says that the revelation of the PE against him and Mr. Bhave came as a “handy shroud and useful distraction and a good public smokescreen for the perpetrators of the NSEL scam.”

“The deliberate and conscious coupling of the two issues… prima facie appears to be a carefully contrived artifice to help the perpetrators of the NSEL scam,” alleges Dr. Abraham. “The PE has very artfully and deviously resulted in linking our names to the NSEL scam and to MCX, FTIL and NSEL, which are institutions in the line of fire in the enquiry in the NSEL scam,” says Dr. Abraham.

Wondering whether the PE “originated from the vile design of any of the many powerful entities who were adversely affected by regulatory actions” taken by him as SEBI member, Dr. Abraham ends his statement saying that in the absence of an enquiry by an independent agency, the real reasons for the PE might never come to light.

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