HC orders CBI, ED, I-T probe into Sinhgad society over unpaid staff salaries

The Bombay High Court has ordered the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and the Income Tax department to investigate alleged financial irregularities at the Sinhgad Technical Education Society (STES) in Pune. The society has not paid salaries and pensions to its teaching and non-teaching staff for years. The court also asked for a probe into transactions at the society's 44 educational institutions and into the trustees' assets.

A special bench of Justice Girish Kulkarni and Justice Advait Sethna gave the order in a 52-page judgment on Tuesday, November 10. All bank accounts, investments and shares held in companies by the trustees will be frozen. The trustees have also been told to deposit their properties with the concerned authorities.

In a contempt case, the court issued show-cause notices to eight trustees, including chairman and chief trustee Maruti Navale. They have also been told to report to a police station every Friday.

About 220 petitions have been filed in the matter. The employees' dues have been stuck for eight years, and the court was told they exceed Rs 400 crore. The bench expressed concern that 13 teachers have died by suicide because of financial hardship.

According to the court, the society had promised on November 6 that Rs 60,65,06,436 would be paid to employees before Diwali. The order says not a single rupee was paid, which amounts to contempt of court. The bench also found six letters sent to the bank about releasing the money prima facie suspicious.

The judges asked why employees have not been paid for eight years when student fees are being collected from the 44 institutions, and where the money has gone. They said the possibility of trust money being misused or diverted to other businesses cannot be ruled out. They also found serious irregularities in the trustees' assets and income tax returns. The court said the society had prima facie filed false affidavits, which could amount to contempt and perjury.

The bench also criticised senior officials of the education department for failing to act in time. The court said education cannot be commercialised at the cost of the rights of innocent employees. It did not confine itself to the unpaid salaries, and looked together at the alleged financial irregularities, the trustees' assets, the education department's inaction and the employees' fundamental rights.

To avoid any loss to students' studies, the court directed that the institutions be taken under its control and administrators be appointed to run the technical institutions. If needed, students will be accommodated in other institutions. The Employees' Provident Fund (EPF) authority and the Charity Commissioner have been asked to conduct separate inquiries. Pune's Police Commissioner has been asked to speed up the probe into pending FIRs and to submit a progress report at the next hearing. The CBI, ED and Income Tax department are to submit a preliminary report on November 19.