SC orders release of Chudamani Sharma

  • Graft case to be settled by the Special Court
- PRITHVI MAN SHRESTHA, Kathmandu
A full bench of five justices observes that there is no sufficient ground to keep the graft accused in custody

Aug 12, 2017-

The Supreme Court (SC) on Friday ordered the police administration to release Chudamani Sharma, who is facing a corruption case at the Special Court, on general date, saying there was no sufficient ground to keep him in custody.
Responding to a writ of habeas corpus filed by Sharma’s wife Kalpana Upreti on July 11, a full bench of Justices Deepak Raj Joshi, Dipak Kumar Karki, Kedar Prasad Chalise, Sarada Prasad Ghimire and Anil Kumar Sinha ordered Sharma’s release. 
The bench, however, said the corruption case against him would be settled by the Special Court. 
The Commission for Investigation of Abuse of Authority (CIAA), which arrested Sharma on June 2, had filed the corruption case against Sharma as well as well LD Mahat and Umesh Dhakal on July 19. They have been accused of embezzling Rs 10.2 billion while granting tax exemption to various enterprises as the members of the Tax Settlement Commission (TSC). 
Sharma stands suspended as the director general of the Inland Revenue Department. Mahat and Dhakal are on the run. 
Sharma, who was in CIAA custody until July 31, was in police custody in Teku since August 1 after the SC remanded him to judicial custody. 
In her writ of habeas corpus, Sharma’s wife had challenged the CIAA’s move of arresting him, saying the detention was illegal and that the CIAA did not have the jurisdiction to look into the TSC and its members’ work.
While ordering status quo on the corruption case, the SC on July 19 had observed that serious legal questions had arisen in relation to the TSC as to whether “it is a judicial agency, a quasi-judicial agency or an administrative agency and whether the CIAA has the jurisdiction to investigate into TSC’s work”. 
The TSC was formed in 2015 by then Sushil Koirala government as per the TSC Act 1976.
The bench on Friday, however, observed that the TSC was formed by the government as per the TSC Act 1976 and that its quasi-judicial status was already decided during the Janakpur Distillery Vs Janakpur Excise Office case in 1989.
On the Rs 3.02 billion bail amount set by the CIAA, the bench said every citizen’s individual right has been guaranteed by Article 17 (1) of the constitution and that the CIAA “failed to comply with the intent and the spirit of Clause 19 (4) of the Commission for the Investigation of Abuse of Authority Act, 1991, which must have been exercised responsibly”.
The bench also observed that there was no reason to rule out the possibility that the CIAA had set such a preposterous bail amount with the intent to keep him in custody as it was based on imaginary calculation.
After an Office of the Auditor General (OAG) report in April year called into question the Rs 21 billion tax exemption granted by the TSC to various enterprises, the CIAA had launched an investigation into the matter. According to CIAA officials, when the anti-grant agency studied files related to tax exemption, it found misappropriation of revenue by TSC members as due tax was settled in a questionable way, with some enterprises getting up to 99 percent tax exemption.
However, the SC on Friday refused to recognise the due tax amount as “revenue”. 
The TSC Act protects TSC members from any case or legal action as long as they perform their duty in good faith, said the bench. “Since there still is a dispute whether Sharma performed his duty in a good faith as a TSC member or abused authority for corruption, the bench does not see any ground for keeping him in custody for investigation,” the bench said. 
 
 
Timeline
  • Feb ’15: Sushil Koirala-led govt forms Tax Settlement Commission (TSC)
  • April 13, ’17: OAG report questions tax settlement by TSC, saying various enterprises were given exemption of tax amounting to over Rs 20 billion 
  • June 2: CIAA arrests TSC member Chudamani Sharma; he stands suspended as the director general of Inland Revenue Department
  • June 22: CIAA issues public notice for the arrest of TSC Chairman LD Mahat and member Umesh Dhakal
  • June 29: CIAA sets Rs 3 billion bail for Sharma
  • July 11: Sharma’s wife files writ of habeas corpus at the Supreme Court demanding Sharma’s release
  • July 16:  CIAA files a Rs 10.2-billion graft case against Sharma, Mahat and Dhakal
  • July 19: SC decides to send the writ of habeas corpus to the full bench; orders status quo on the corruption case filed against Sharma, Mahat and Dhakal
  • Aug 1: SC sends Sharma to judicial custody
  • Aug 11: Apex court full bench orders Sharma’s release on general date; graft case against him to continue at the Special Court

Published: 12-08-2017 07:37

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