Hc Orders Cbi Inquiry Into Arochem-Spic Land Transfer

A division bench of the Chennai High Court yesterday ordered CBI inquiry into the alleged irregularities in the transfer of land from Arochem to Spic Petrochemicals (SPL). The judges asked the CBI to submit their report within the next eight weeks.

The judgement was delivered in response to an appeal filed by Madras Refineries (MRL)in July 1996 against a single-judge order. MRL had then sought a stay on the execution of the project through a separate subsidiary promoted by Spic.

The bench consisting of justice K A Thannikachalam and justice N V Balasubramanium ruled that the documents are being handed over to the CBI director to probe into the transfer of 168.38 acres of land. The bench also questioned the conduct of the various department heads of the previous government, A C Muthiah of SPIC and the director of the project. The court ordered the CBI to thoroughly investigate into this issue and submit its findings.

The judges also ordered an injunction that during the interim period during which SPL and SPIC Aromatic Chemicals Corporation Ltd shall not enter into any fresh contract or activity. However, the court conceded to Spic's appeal for suspending the injunction order for eight weeks. The court's injunction is without any conditions and the two partners could come to an amicable settlement.

The judges observed that the agreement between Spic and MRL for the aromatics project was still in force. Whatever the reason may be, the decision of Spic to float a separate project on similar lines "was not justified in law ". Spic should have terminated the agreement before floating such a venture.

The two companies had floated the joint venture Arochem in 1989, while the land was re-allotted to SPL in 1994 when Spic went ahead with its own plans for an aromatics project.