NBA Press Release
  28 April 2003
Save The Narmada, Save Humanity!

Mumbai City Court dismisses S.Kumar's Notices of motion against NBA in Maheshwar Project case; Upholds the Public right to know and the right to public scrutiny must prevail over personal interest

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In a land mark judgment dated the 29th of March, 2003, but which has only just become available, the Honorable Judge Mrs. Roshan Dalvi of the Mumbai City Civil Court dismissed the Notices of Motion by the S.Kumars company – the Shree Maheshwar Hydel Project Corporation Limited, that had asked for an interim injunction against the NBA in a suit for injunction filed by the SMHPCL in October 2001, as well as a case of contempt filed by them later. However, she allowed the Interim relief granted last year in an ex-parte order to continue up to 9th June, 2003 in order to allow the plaintiffs to go to the High Court, if they so desired. The judge ruled that the public right to know and the right of public scrutiny cannot be subordinated to any personal interest, particularly because the project is being sought to be justified on grounds of public interest and involves public money, and ruled that the interim injunction would have to be removed. Well known lawyer Advocate Mihir Desai appearing for the NBA argued that as per the Civil law on defamation, no injunction in a defamation case could be granted if the defendants are prepared to justify their statements at the final stage and if public interest is involved.

The ex-parte order that had been obtained by the SMHPCL in October 2001 from the Mumbai City Civil Court came at a point when the NBA began exposing the various financial irregularities of the Project promoters. The ex-parte order was used by the S.Kumars in order to stifle the voices of the people of the Narmada valley and stop them from any public comment and public protest against the Maheshwar dam. Although the order had allowed the publication of non-defamatory press notes and was operational only on the NBA, the promoters of the Maheshwar Project – the S.Kumars used it to substantially suffocate the voice of the media as well. The NBA and the people of the Narmada valley whose lives and livelihoods the Maheshwar Project will destroy and rupture, and who are relieved at the prospect of being able to re-exercise their fundamental rights of freedom of expression and peaceful protest which had been alienated from them in the last 1.5 years, welcome this order not for themselves alone.

This judgment is significant also for the ordinary people of this country whose hard owned life-time savings are at stake in the shape of the investment of crores of rupees of public money being sought to be put in by the Indian public financial institutions and banks in controversial projects such as Maheshwar. This judgment will enable and empower ordinary Indian citizens as well as the thousands of peasants, workers and fisherpeople affected by the Maheshwar dam to actively question, obtain information and control the decisions about such so called development projects. The NBA believes that this judgment is in the tradition of the several legal judgments in India that have widened the spaces for public debate and popular intervention, allowing people to debate and determine the course of their own development and which have rendered more vigorous the functioning of Indian economy and democracy. It has also created a precedent in privileging the public interest and the public right to freedom of expression over narrow corporate interests.

Court Holds that the Public right to know and the right to public scrutiny must prevail over personal interest

Upholding the " prime principle of free expression", the judgment states that " Though the (freedom of ) expression ..is reasonably restricted under the Constitution of India.. these restrictions cannot gag public opinion. Further, "in this case, public interest itself demands the dissemination of information. The information disseminated may at best endanger the plaintiffs interest but not the community or social interest".

The judgment states that " Public frauds and public scams have increased unabated in India.. It therefore calls for … public scrutiny. Upon the defendants justifying their action …it can be seen that an injunction would only stifle public expression. It would bring no good to the public as a whole. It may at best subserve the personal interest of the plaintiffs. Injunction cannot be granted for such a cause, despite the plaintiff's remonstrations."

Court finds that the Narmada Bachao Andolan has prima facie justified its charges of willful defaulter , diversion and siphoning of funds against the S.Kumars.

The judgment states that " In this case, the defendants have not only pleaded that they would be able to justify their statements" but that " they have justified them at this interim stage itself."

Regarding the high cost of power and the power purchase agreement (PPA) that requires that power must be bought by the MPSEB from S.Kumars at notional figures of " deemed generation" for the next 35 years, the judgment notes that the defendants were merely seeking to bring the facts before the public which the plaintiffs sought to reverse through the injunction. The judgment states " The plaintiff's action is against the public at large. It is for the plaintiffs to show the state of affairs is otherwise than alleged by the defendants to the public. Shutting the mouth of the defendants is not therefore an answer to an issue of such implication and ramification concerning public money."

The judgment also notes that in response of the allegations of the NBA that the SMHPCL has diverted and siphoned public funds, the plaintiffs themselves finally admitted in Court that they did give Rs. 106.4 crores of Project funds to agencies who did not fulfill their contracts. The SMHPCL conceded in Court that they are yet to put back Rs. 37.81 crores with interest in lieu of this money. The judgment states that "the entire transaction had left an indelible deficit and the said funds have become accountable" and that " The defendant's contention therefore that the plaintiffs have indulged in " bad financial practices" for which they themselves are to blame can hardly be said to be an irresponsible statement. The defendants contention of "diversion" cannot also be ruled out.. Similarly their ( NBA's) statement of " transfer of funds" stands the test of the legal defining.." The judgment also takes cognizance of the fact that the IFCI Report of March 2000 stipulates that the return of this entire sum with interest is a special pre-disbursement condition for any further public financing.

With regard to NBA charges of willful default and the attachment of the movable and immovable properties of the Maheshwar Project by the Khargone district administration since 2002 because of willful default to the Madhya Pradesh State Industrial Development Corporation, the judgment notes that the Promoters have themselves submitted the order of the division bench of the M.P.High Court "restraining the plaintiffs from creating any charge on the property under attachment .."

It concludes that "the factum of the loan being taken, the failure to return it, the consequent attachment proceedings and the constraint upon the plaintiffs to bring about a stay demonstrate a rather truthful finding of fact by the defendants" and NBA's charges of willful default. The judgment notes that " in fact, for all non- repayments, under the General Circular of the RBI, the plaintiffs prima facie would be defaulters". The judgment further notes that the plaintiffs " would be defaulting in repayment of their obligations to their lenders if they .. have not utilized the finance for specific purpose for which it was lent or if they have used it for the purpose other then those specified ..". The judgment states that but that the statements of the defendants in the context of charges of willful default "have actually been justified."

In the context of the NBA's publications of the CAG reports that state that the SMHPCL is yet to pay for the properties that they took over from the state agencies despite "enjoying the properties for the last one decade (from 1992) ", the judgment finds that the NBA's comments on the relationship of the plaintiffs with public officials of such institutions, that allows such a state of affairs "natural expressions", and that in the context, " doubts cast or aspersions made by the defendants cannot also be brushed aside as unjustifiable or made with malice ". In fact it notes that "…the suit project has public dimensions. It is meant for the upliftment of the state of M.P. It would entail public money. Hence every member of the public would have a right to understand it and injunction granted against the defendants as prayed would impinge upon such a right. The public must be entitled to know the conduct of the public officers or officers of financial institutions and other government bodies in suit projects to which the plaintiffs may be inextricably connected. The plaintiffs cannot therefore claim any higher right than the freedom of speech and expression to which the public is entitled. "

It states that " The intractable efforts of the defendants can therefore be seen, not .. to be a revile subterfuge but to whet and winnow the plaintiffs project in a bid to bring to light the agreements, rules and regulations which but for the defendant's obdurate actions, would have been completely concealed from the public who have the greatest stake in the project."

Project promoters and public institutions continue to jeopardize public money, NBA calls for halt to public money for the Project and recall of earlier sums

The NBA notes that the Central and State governments are still trying to push this disastrous Rs. 2233 crores Project through. The Minister of State, Finance, GOI, Union Minister of Power and Chief Minister, Madhya Pradesh met with the Chiefs of the SBI, IFCI, LIC, IDBI on the 4th of March 2003 and pushed aside various bona fide concerns of the Indian public financial institutions and banks and virtually directed them to put almost 90% of public money into this project both in the shape of debentures and loans. The NBA condemns these desperate, obvious and completely illegal attempts by apex political leadership in the State and Central governments to support the S.Kumars and their attempts to further jeopardize public money into this project despite full knowledge of attachment of assets, diversion of funds and other irregularities and non-fulfillment of necessary condition. It is clear that they are driven by considerations other than public interest.

In the light of the fact, that the Mumbai City Court has found that charges of willful defaulter, diversion and siphoning of funds against the Project promoters – the S.Kumars have been prima facie justified, not a single paisa more must go into this Project. It warns the governments and the management of financial institutions, if despite the accumulated evidence they seek to put further public money into the Project, they would be held criminally culpable. The RBI must take immediate action against the Promoters, including the recall of public money and criminal proceedings against the Promoters must be peremptorily initiated. Noting that the judgment states that " in all matters of finances coming from public sources, transparency is the key word" and that " there would be a lot more than meets the eye", the Narmada Bachao Andolan calls for a White Paper from the State and Central governments on the Maheshwar Project, its progress, finances, cost of power, and public utility, and a full investigation of the irregularities.

Alok Agarwal
Mangat Verma