New Delhi, Aug. 24: The Supreme Court has appreciated some legislative initiatives and executive action like creation of the serious fraud investigation office (SFIO) to check financial scams, but it is not satisfied with the system and said SFIO needed more legal teeth to make it absolutely effective against white collar crimes.
The SFIO, which comprises officers from taxation, customs, central excise, information technology, company law, capital market, banking, investigation/police and forensic audit, was created only through an executive order and certainly lacks the legislative backup, a bench of Justices J. M. Panchal and A. K. Patnaik, said in a judgement.
The court found that the SFIO since its existence in October 2003 had been assigned 51 major cases of financial frauds, which had occurred up to April 30, 2008. Of these, the body had been able to solve 30 cases only during the past seven years while 18 were still under investigation and remaining three were yet to be taken up.
The slow progress of investigation was mainly due to SFIO not having any “statutory” recognition as it is presently working under the existing provisions of the Companies Act, which has various investigative inadequacies, the top court felt.
The court said though Solicitor General Gopal Subramaniam had given an assurance that the government was planning to bring legislation to “invest SFIO with adequate powers”, the sooner it was done would be better.
Since the government has set up a committee to examine the issue, “we hope and trust that the panel will consider to make the SFIO, or any similar body, a statutory authority having sufficient powers and autonomy to be able to effectively deal with the problems of financial frauds as well as non-performing assets (NPA).”