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Court Orders FIR Against Ex-minister Arun Shourie for Udaipur Hotel Sale

File photo of former Union Minister Arun Shourie.

File photo of former Union Minister Arun Shourie.

Shourie, was the minister in charge of divestment when the property, owned by the public sector India Tourism Development Corporation, was sold to Bharat Hotels Ltd, a private company.

A special court in Jodhpur has asked the CBI to file cases against former Union minister Arun Shourie and the then disinvestment secretary Pradip Baijal over the sale of an ITDC hotel, allegedly at a loss of Rs 244 crore to the exchequer. The CBI court also directed the filing of cases against three others associated with the sale two decades back of Laxmi Vilas Palace Hotel in Udaipur, during the term of the Atal Bihari Vajpayee-led National Democratic Alliance government at the Centre.

Shourie, was the minister in charge of divestment when the property, owned by the public sector India Tourism Development Corporation, was sold to Bharat Hotels Ltd, a private company. The court recalled Shourie's background as a journalist who has spoken against corruption in debates and interviews. This proved his double standards on the issue of corruption, special judge Puran Kumar Sharma said.

In Wednesday's order, Sharma rejected the closure report submitted in the case by the Central Bureau of Investigation in August 2019, and asked the agency to reinvestigate it. He also ordered immediate attachment of Laxmi Vilas Palace by the Udaipur district magistrate. The hotel will remain under Rajasthan government's custody until the matter is disposed of, he ordered.

Along with Shourie and Baijal, the court ordered the registration of cases against Ashish Guha, the managing director of Lazard India Ltd who was the financial adviser, valuer Kantilal Karamsey of Kantilal Karamsey & Company and Jyotsana Suri, director of Bharat Hotels Ltd. All five will be summoned before the court, the judge said.

The hotel was sold to the private company for Rs 7.52 crore. During the CBI investigation, it was valued at Rs 252 crore, suggesting a loss of Rs 244 crore to the exchequer. The CBI registered a case on August 13, 2014 that some unknown officers from Department of Disinvestment, in connivance with a private hotelier during 1999-2002 renovated and then sold Laxmi Vilas Palace at a throwaway price.

The court criticised the CBI for filing a closure report despite finding in its preliminary inquiry that the property was sold wrongly. The judge said this was deplorable. He said the entire country looks up to the CBI as a prestigious agency.

Appointing the district magistrate as the receiver of the property, the judge said he would produce a report on its movable and immovable assets within three months. He will also arrange that the hotel is run by a central government institution with experience in this industry.

The accounts will be submitted to the court on a quarterly basis, the judge directed. The court said those engaged in the disinvestment process were IAS officers and not expected to have no idea about the worth of property like this in a city like Udaipur.

The preliminary investigation validated the accusations and revealed that Pradip Baijal abused his position, entering into a conspiracy with Guha, Karamsey and Bharat Hotels Limited, the court said. Kantilal Karamsey & Company valued the land at just Rs 45 per square feet against the going rate of Rs 500-1000 per square feet then for commercial plots, it said, citing the preliminary report.

It said Shourie and Baijal took the decision to appoint the valuers.


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