Gutkha Scam: Madras HC orders CBI probe

In a big loss of face to the Tamil Nadu Government, the Madras High Court on Thursday transferred the investigation of the multi crore gutkha scam to the CBI.

The scam had revealed political and bureaucratic collusion with Income Tax reports alleging the involvement of State Health Minister C Viaja Baskar and Director General of Police T K Rajendran.

The first bench comprising Chief Justice Indira Banerjee and Justice Abdul Quddhose in an order running to 85 pages said “The underground gutkha business is a crime against society which needs to be curbed.

We therefore deem it appropriate to direct the CBI to investigate into all aspects of the offences of illegal manufacture, import, supplies, distribution and sale of Gutkha and other forms of chewable tobacco which are banned in the State of Tamil Nadu and Union Territory of Puducherry."

Directing detection and action against those involved in the offence as also connivance and/or complicity of public/Government servants, the bench said “The underhand dealing in Gutkha, Pan Masala and other forms of chewable tobacco involving inter alia officials of Central and different State Governments has inter-state ramifications and should therefore be investigated by the CBI."

“In our considered view the handing over of investigation to CBI only ensures co-ordinate investigation publicly in specified categories of serious offences having ramification in more than one State,” the bench added.

The scam has its source on July 8, 2017, when I-T conducted raids at the godown, offices and residences of a pan masala and gutka manufacturer in Tamil Nadu, who was facing charges of evading tax to the tune of Rs 250 crore. 

The manufacture, storage and sale of the carcinogenic chewable forms of tobacco, including gutka and pan masala were banned by the state government in 2013. During the raids, the department seized a diary containing names of those who were believed to have been paid off by the gutka manufacturers– and one among them was the state's health minister Vijaya Baskar.

Immediately, DMK moved the court seeking to appoint a special investigation team (SIT) headed by a retired judge of the high court, comprising officials from CBI to probe the cam. While the high court was proceeding with the hearing of the case, on January 12, in a damming disclosure to the court, the I-T department, said that a confidential note written by it in the gutkha scam was recovered from AIADMK leader VK Sasikala's room in former Tamil Nadu chief minister Jayalalithaa's house in Poes Garden here during raids conducted in November 2017.

However, stating that it neither casts aspersion on the mode and manner of investigation conducted by the State Police or the State Vigilance authorities nor does it necessarily reflect any finding even prima facie of interference of any Constitutional authority or any high official of the State Government in such investigation the bench in its order said “Serious allegations inter alia against High Police officer with regard to their complicity and connivance in the illegal business in Gutkha and other forms of chewable tobacco is likely to give rise to doubts in the minds of general Public with regard to the fairness, impartiality and or the efficacy of the investigation. It is therefore desirable the investigation be made over to an independent Agency like the CBI.”   

Earlier, during arguments while Advocate General Vijay Narayan had submitted that since the case is predominantly against government officials it should be probed by DVAC with cooperation from CBI. He had also stressed that the DVAC probe was at its final stages.

P Wilson, senior counsel appearing for J. Anbazhagan, part of DMK who moved the public interest litigation seeking CBI probe had argued that even the FIR was registered only after the issue was highlighted by the opposition in the state assembly. Under such circumstances how can a DVAC probe be expected to hold a fair probe, he had argued.