A bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar said that while it cannot go after individual unauthorised buildings, builders, or the "hapless people" who are buying them, "the time has come" to ensure that the authorities comply with the laws.
"We propose to send it (the case) to the CBI," the court said and asked the Delhi Development Authority (DDA) and the municipal corporation of the area to give the names of its officials who have been posted in the area since 1995, when construction of the huge statue had started.
The corporation in its affidavit has said it has taken action to remove some of the encroachments around the statue and commercial activity outside the temple has been stopped.
The court, however, said the civic body has withheld vital information about when the road and pavement adjacent to the statue came under its control.
Meanwhile, the Delhi police told the bench that it was interrogating the trustees running the temple and was also looking into its source of funding.
It said that these cannot be the only funds of the trust whose sole source of earning is the temple which has been running from 1978. However, the statue was completely built in 2002, it told the court.
Police, represented by Delhi government additional standing counsel Satyakam, said that the general manager of the UCO Bank was asking for 30-60 days to provide information about who all deposited cheques in the trust's account.
The DDA and the corporation told the court that neither the temple nor the trust was paying any property tax to them.
The court had ordered a police probe after a committee appointed by it in May this year to look into illegal constructions all over Delhi had pointed to encroachments of up to 1,170 square yards on DDA land which forms part of the Southern Ridge.
It had also said that apart from the Hanuman statue, there was unauthorised construction of multiple small and big buildings of up to four floors including a residential complex there.
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