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The end of the case

Saturday 18 June 2005, by VENKATESAN*V.

in New Delhi

The Bofors saga may at last be over with the Delhi High Court’s verdict quashing the charges of criminal conspiracy and cheating against the Hinduja Brothers and the Bofors company.

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The three Hinduja brothers at the Tis Hazari courts in New Delhi in January 2001 after they appeared before a designated CBI court in the Bofors case.

THE Bofors case has had the distinction of serving for well over a decade as a symbol of and a mataphor for political corruption at the top. It helped to mobilise public opinion against corruption in a way previous scandals had failed to do, and this, to a great extent, was instrumental in bringing down the Rajiv Gandhi government in the 1989 general elections, as there was a perception that he had presided over a massive cover-up operation to conceal the pay-off and its beneficiaries.

Since then, the investigation and trial of the case has taken several twists and turns, depending on the character of the political dispensation at the Centre and the vagaries of the judicial system. But no one would have imagined that the case would collapse irreversibly for want of effort by the prosecution, the premier investigative agency, the Central Bureau of Investigation (CBI), to correct some minor defects in documenting the case. The Delhi High Court’s May 31 judgment putting the case to rest is inexplicable.

The origin of the case can be traced to a contract entered into between the Government of India and A.B. Bofors in Sweden on March 24, 1986, for the supply of 410 field howitzers, ammunition and other accessories as part of the 155 mm gun system at a total cost of Rs.1,437.72 crores, On May 2, 1986, advance payment equivalent to 20 per cent of the contract value was made to the Bofors company by the government. This amounted to more than $50 million, the foreign exchange equivalent of some Rs.64 crores at early-1986, pre-devaluation rates. On April 16, 1987, the Swedish radio broadcast a story that Bofors had managed to obtain the contract from the Indian government after the payment of large sums as bribes.

The payment obligations were contained in secret contracts protecting the illegitimate `entitlements’, which were invariably expressed in percentage terms - totalling 9.2 per cent of the contract value. The internal Bofors documents, seized by the Swedish police, obtained by Indian journalistic investigation in 1988-89 and fully authenticated in the CBI investigation, made it absolutely clear that the payoffs made by Bofors were directly contingent on winning the contract. The payoffs were in direct and flagrant violation of assurances repeatedly given by Bofors to the Indian government to the effect that it had no agents or representatives in India for the howitzer deal.

The CBI submitted its charge-sheet in the case on October 22, 1999, naming as accused former Defence Secretary S.K. Bhatnagar, former Bofors agent W.N. "Win" Chadha, Italian businessman Ottavio Quattrochhi, President of Bofors company at the time of signing the contract Martin Ardbo, and A.B. Bofors, Sweden, the private company.

In pursuance of the Letters Rogatory (a request application to a foreign court seeking information or evidence from persons within the jurisdiction of that court) issued by the Special Judge, the Swiss government handed over a set of documents comprising 71 pages to the CBI on December 18, 1999. On October 9, 2000, the CBI submitted a supplementary charge-sheet naming G.P. Hinduja, Prakash Hinduja and Srichand Hinduja, known as the "Hinduja Brothers", and Rajiv Gandhi as accused.

Rajiv Gandhi’s name was included as he, along with Bhatnagar, was allegedly complicit in the abuse of power and position in the grant of pecuniary favours to a number of Bofors middlemen. It was essential to preserving the integrity of the case, even though he could not have been prosecuted, as he was dead at the time of filing of the charge-sheet.

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Per Ove Morberg (left), president of A.B. Bofors, and Lars Gothlin, chief jurist of Nobel Industries, enter Parliament House Annexe for deposing before the Joint Parliamentary Committee that probed the Bofors gun deal.

Of the remaining accused, only the Hinduja Brothers and Quattrochhi are now alive, apart from the Bofors company, which is now known as Krtongen Kemi Och Forvaltning AB. The cases against the Hinduja brothers and Quattrochhi, therefore, are important as they were the alleged conduits for the bribe.

The supplementary charge-sheet revealed that Bofors transferred funds to the accounts opened by the Hindujas and that the Hindujas had opposed the handing over of documents by the Swiss government to the agencies of the Indian government.

In November 2002, Special Judge Prem Kumar found that Rajiv Gandhi’s conduct after the whistle was blown on the Bofors payoffs suggested that he was engaged in a "masssive cover-up operation". Prem Kumar also dismissed the plea of the Hinduja brothers seeking discharge. He held that the evidence offered strong prima facie grounds for proceeding with the prosecution of the Hindujas, under the Prevention of Corruption Act (PCA). The Hindujas appealed against this judgment in the Delhi High Court.

In February 2004, Justice J.D. Kapoor of the Delhi High Court offered them a partial relief of discharge under the PCA, but held them liable for prosecution on a number of other charges such as cheating and conspiracy to cause wrongful loss to the government. He indicted the Bofors company for forgery. The Hindujas, Quattrochhi and "Win" Chadha were to be held liable for "fraudulently and dishonestly representing that there were no agents involved in the negotiations for the contract" and further, for claiming that "the price quoted was the reduced price proportionate to the amount of commission they would have otherwise paid to the agents". Justice Kapoor dismissed the charges against Rajiv Gandhi.

AGAINST this backdrop, the judgment delivered by Justice R.S. Sodhi of the Delhi High Court on May 31 quashing the proceedings against the accused for the remaining offences in the trial court has raised a political storm and shaken judicial conscience.

Observers are surprised that Justice Sodhi has cast aspersions on the nature of the investigation and the trial. In paragraph 3 of his judgment, Justice Sodhi wrote that the CBI, without waiting for the receipt of further documents from the Swiss authorities, filed a second charge-sheet on October 9, 2000, implicating the Hindujas. In Paragraph 66, he wrote: "Before parting, I must express my disapproval at the investigation that went on for 14 years and I was given to understand that it cost the exchequer nearly Rs.250 crores. During the investigation, a huge bubble was created with the aid of the media which, however, when tested by court, burst leaving behind a diastrous trail of suffering. The accused suffered emotionally. Careers - both political and professional - were ruined, besides causing huge economic loss. Many an accused lived and died with a stigma. It is hoped that this elite Investigating Agency will be more responsible in future."

There is no mention of the source of the information regarding the cost of investigation of Rs.250 crores.

There were two sets of documents requested by the Indian government through the Letters Rogatory relevant in the case of the Hindujas - one from Switzerland and the other from Sweden.

The documents transferred from Switzerland were entirely certified, and they provided proof of payment of commissions by Bofors from bank accounts in Sweden to coded bank accounts in Switzerland. They were obtained through judicial process, with the Switzerland Supreme Court clearing the transfer of documents, mainly bank papers, waiving their strict secrecy laws, as the documents were sufficient under the Swiss legal system to launch a prosecution for the offence of bribery.

The documents from Sweden are relevant in throwing light on the contracts between Bofors and their agents. These were mainly procured by The Hindu’s investigation between April 1988 and October 1989. It is the authenticity of these documents pertaining to the Hindujas that Justice Sodhi has called into question.

The issue before the court was whether Bofors made a representation to the Government of India that there were no agents involved in the negotiations for the contract with the knowledge of the Hindujas, and therefore, a prima facie case of conspiracy could be made against them.

Justice Kapoor, in his February 2004 judgment, held that as the Hindujas had been working as agents of Bofors since 1979, their contention that they were not aware of the representation of Bofors was unconvincing.

Justice Kapoor, in order to sustain this finding, relied on certain documents (contained in Volume 22 submitted by the Prosecution). In the trial court, it was discovered that these documents were photocopies of some originals that no one had seen. The documents were supplied to the CBI by the Editor of The Hindu, who did not disclose his sources. Justice Sodhi said: "The Editor of The Hindu is not a person who can testify that the documents given by him are true copies of some original documents."

Justice Sodhi then referred to the statement made by the prosecution in the trial court - "that the relevant and material documents are not available in original and no copies duly authenticated in accordance with the Indian Evidence Act are available".

Justice Sodhi then concluded: "If these documents are not proved by satisfactory secondary evidence and will not be ever proved at the trial, it will be a cruel joke on the accused to expose them to a long and arduous trial and waste public time and money which will be totally out of proportion to the results to be achieved. In fact, nothing will be achieved."

The CBI claimed that it managed to obtain some kind of authentication by the Ministry of Justice in Sweden for these documents. When The Hindu published these documents in June 1988, they were analysed and photographed and given to the Swedish Prosecutor with a request to confirm their authenticity. Lars Ringberg, then Chief District Prosecutor, told the CBI that he would compare those documents with the original and let it know. Subsequently, he informed the CBI through Interpol that he had checked the documents and they were the same as the documents in the Swedish files.

All this was done before the First Information Report was lodged in the case in 1990. The relevant correspondence and documents were submitted to the court.

The CBI claimed that documents numbering 652 in Volume 22 were forwarded to India by Sweden in response to India’s Letter Rogatory in 1998. Justice Kapoor had directed the trial court to consider the admissibility of the documents at the appropriate stage, and the CBI submitted that the appropriate stage was only after the charge was framed and the evidence came to be recorded. Justice Sodhi, however, refuted both these contentions.

The CBI relied upon a joint statement dated February 22, 2005, from Sten Lindstrom and Thomas Lindstrand currently in the Prosecutor’s office in Sweden, which read as follows:

"The photostat copies of the said original documents have been sent by the Prosecutor’s Office to the Ministry of Justice, Sweden, for their onward transmission to the Embassy of India, Stockholm, for their onward transmission to [the] CBI in execution of Letters Rogatory have been duly initialled and stamped by him in token of authentication and that the original documents were returned to the concerned parties in Sweden as per provision of Swedish Law."

But Justice Sodhi appears to have reached a different conclusion. He wrote: "It is the photocopies provided by the Prosecutor’s office that have reached India but the only change that has taken place during the course of transmission is that an initial and seal of the Ministry of Justice has been put thereon but no date. Under the Evidence Act, I cannot take judicial notice either of the seal or of the initial... . Moreover, what becomes crystal clear is that the Ministry of Justice has not issued any certified copy of documents in their possession. There is no such certificate appended to photocopies nor is there anything to show that the authority which has put its seal and initials had the originals in its possession and made the photo copies therefrom."

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Italian businessman Ottavio Quattrocchi, one of the accused.

Based on this reasoning, Justice Sodhi pre-empted the trial by suggesting that the court, at the time of framing charges, could decide whether the material collected during the investigation could be converted into admissible evidence at the ensuing trial.

The CBI’s reaction appeared strange. Having secured just two weeks from Justice Sodhi to rectify the defects pointed out, the CBI returned to the court pleading helplessness. "If the CBI is incapable of producing relevant material, the case has no legs to stand," Justice Sodhi held.

Justice Sodhi then referred to two documents in Volume 22, which linked payments with the Bofors gun contract, and created doubts about their veracity, as some words were in the handwriting of somebody. "Unless the person who wrote those words is identified and it is proved that his position is such that his writing those words proves the truth of the contents, the documents are utterly useless. Based on this dubious material, to allow a prosecution to go on for many more years, in respect of a transaction of more than 20 years vintage, is sheer persecution, waste of public time and money. I cannot forsee any chance of the successful termination of such a useless prosecution. It was for this reason, I thought of giving the CBI an opportunity to bring the case back on rails. As already noted, the CBI has spurned the offer," Justice Sodhi noted.

Justice Sodhi accepted the contention of the Hindujas that they were Bofors’ consultants and not its agents.

Justice Kapoor had directed the trial court to prosecute the Bofors company for forgery on the assumption that the originals of the forged documents would be made available and produced as and when called for by the trial court. However, following the admission by the CBI that it did not have the originals, Justice Sodhi quashed the trial court’s order framing forgery charges against the Bofors company.

Analysts say that even if the CBI appeals against Justice Sodhi’s judgment in the Supreme Court, it is not likely to pursue the case seriously, thus consigning the Bofors scandal to the history books.

THE political impact of Justice Sodhi’s verdict has to be seen in the isolation of the Congress on the issue. The Congress demanded an apology from all those who had launched an "unsubtantiated and baseless" campaign against Rajiv Gandhi on the Bofors issue. Asked whether this included former Prime Minister V.P. Singh, former Opposition leaders now in the party and the government and the current allies, the party spokesperson, Jayanti Natarajan said: "We are leaving none. This includes a wide spectrum."

The demand for an apology, however, had few takers. V.P. Singh maintained that he had never made any allegations against Rajiv Gandhi on the Bofors issue. He recalled that his government did not name him [Rajiv Gandhi] in the FIR filed in 1990. V.P. Singh claimed that though he had campaigned on the Bofors issue and become Prime Minister after the 1989 elections, he had never alleged that Rajiv Gandhi himself was the beneficiary of the Bofors payoff.

The Communist Party of India (Marxist) demanded that the CBI revive the Bofors case through appropriate legal processes. "It is surprising that after such a long investigation, such infirmities and elementary errors existed in preparing the case," the party’s Polit Bureau said. The party lamented that neither the CBI nor the judicial process in the country had been able to produce a verdict in any high-level corruption case. This had led to the people feeling that the system was incapable of bringing to book those who misused public funds, it added.

Bharatiya Janata Party general secretary and spokesperson Arun Jaitley alleged that there was a clear collusion between the CBI and the accused in the case as was evident from the collapse of the charges against the Hindujas and the Bofors company after the verdicts of the Delhi High Court in February 2004 and now. These judgments may be erroneous, but they pleased the accused and the political masters who ran the Central government, he said. He feared that the CBI would obviously decide to let the erroneous judgments stand.

But the lingering question remained unanswered by the BJP: Why did the National Democratic Alliance government, which was in power until May 2004, not appeal against the Delhi High Court’s February 2004 verdict quashing bribery charges against the Hindujas? The CBI’s failure to file a special leave petition meant that it became the basis of the recent Sodhi judgment by default.

See online : Frontline


Volume 22 - Issue 13, Jun 18 - Jul 01, 2005

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