Even as a debate continues on the transfer of E.D. Director M.K. Bezbaruah, the motives for the transfer remain unclear.
THE status of Manash Kumar Bezbaruah, the upright head of the Enforcement Directorate (E.D.), remained unclear 10 days after his transfer from the E.D. because the Central Government neither reinstated him in his post nor reiterated its order asking him to hand over charge. His transfer, which immediately preceded a series of transfers involving senior bureaucrats at the Centre, raised a political maelstrom.
Bezbaruah informed the Government that he would complete the process of handing over all the files relating to sensitive cases by August 21. He also wrote to the Revenue Secretary asking for clarification on his status in view of the verbal instructions from Union Minister of State for Revenue and Personnel R. Janarthanan not to hand over charge and the Supreme Court's order that his transfer would be subject to its further orders.
Bezbaruah's transfer orders came on August 13, after several unsuccessful attempts had been made in the last 19 months to remove him from the important position he held.
Delhi Chief Minister Sahib Singh Verma started it all when he requested the Central Government on August 11 for the repatriation of Bezbaruah, who belongs to the Delhi cadre. Sahib Singh said that he needed an upright officer to head the Delhi Transport Department to implement the Mass Rapid Transport System, the privatisation of the Delhi Transport Corporation and the Supreme Court order relating to pollution in Delhi.
This request should be seen against the backdrop of his earlier association with Bezbaruah. The period between December 1993 and May 1994, when Bezbaruah was Education Secretary in the Delhi Administration and Sahib Singh was the Education Minister, was fraught with tension over the appointment of teachers. Acting on Sahib Singh's written request of May 11, 1995, Madan Lal Khurana, the then Chief Minister of Delhi, transferred Bezbaruah the very next day.
Similar alacrity marks the recent events. Union Home Minister L.K. Advani signed the transfer orders the same evening that he received Sahib Singh's request for Bezbaruah's repatriation from the E.D. On the forenoon of August 12, the file was sent to the Establishment Officer who forwarded it to the Finance Minister, who in turn cleared the transfer by afternoon and sent the order across to the Minister for Personnel. It is customary to keep the Minister for Personnel informed of such matters.
The Minister, Janarthanan, who belongs to the All India Anna Dravida Munnetra Kazhagam (AIADMK), was away in Chennai. Therefore the file did not go back to the Prime Minister's Office (PMO). Frantic efforts made by the PMO to retrieve the file were in vain. The PMO reconstructed the file on the night of August 12, with copies of relevant papers obtained from the Home and Finance Ministries. This file was then forwarded to the Cabinet Secretary who in turn sent it across to the Prime Minister the same night. The next morning the Prime Minister signed the transfer order, which was served on Bezbaruah in the afternoon. Bezbaruah was asked to hand over charge immediately. He was also informed that he was being repatriated to the Delhi Government although there was no order posting him as Transport Commissioner. A separate order issued the same day asked M.C. Joshi, Special Director in the E.D., to assume charge as Acting Director.
The electronic media flashed the news of Bezbaruah's transfer on the evening of August 13, and news reports appeared the next morning linking the transfer to Jayalalitha.
IN another round of reshuffle on August 14, Union Revenue Secretary N.K. Singh was shifted to the PMO as Secretary, coordination. Javed Chowdhury, Sugar and Edible Oils Secretary, during whose tenure as the E.D. chief most of the high-profile investigations were either started or revived, took over as Revenue Secretary. Jayalalitha expressed her disapproval of Chowdhury, saying that he "hounded and harassed" her when he was the E.D. chief.
The other high-profile transfers included that of the longest-serving Finance Secretary, Montek Singh Ahluwalia, who moved on as Member, Planning Commission, with the rank of Minister of State; Vijay Kelkar, Petroleum Secretary who was earlier the Chairman of the Bureau of Industrial Costs and Prices and the Chairman of the Tariff Commission, assumed charge as Finance Secretary. Another significant move was the bringing of S.D. Mohite back as the Chairman of the Central Board of Excise and Customs in the place of D.S. Solanki, who replaced Mohite in the Central Economic Intelligence Bureau.
On August 15, there were more press reports that blamed Jayalalitha more directly for the transfers. Jayalalitha blamed the Central Government for making her a scapegoat in the transfers. She alleged that "hefty bribes" had been paid to persons close to the Prime Minister to effect the transfers. She also alleged that a media baron who was being investigated for charges of violating the Foreign Exchange Regulation Act (FERA) was behind the transfer of Bezbaruah.
On August 17, a petition was filed in the Supreme Court by the Centre for Public Interest Litigation alleging mala fide in Bezbaruah's transfer and asking for his reinstatement. Chief Justice M.M. Punchhi asked the petitioner to have the petition mentioned in the regular course the following day.
Meanwhile, on August 18, Anil Divan, the amicus curiae (friend of the court) who was making his submissions to the Supreme Court on the Indian Bank scam case, said that the sudden transfer of the E.D. chief would adversely affect important cases pending with the agency, including the Jain hawala and Chandraswami cases. He also drew the court's attention to the fact that the E.D. chief was a member of the nodal agency set up under the court's directions in the Jain hawala case to investigate the nexus among criminals, bureaucrats and politicians. He said that the transfer would hamper the functioning of the nodal agency, especially when there was no Chief Vigilance Commissioner (CVC) in place to appoint a new the E.D.
While the Bench comprising Justices S.P. Bharucha, G.T. Nanavati and B.N. Kirpal expressed extreme distress at Bezbaruah's transfer, it declined to restore the status quo. It ordered that Bezbaruah's transfer, even if he handed over charge, would be subject to the Court's further orders to be given on September 8, the date of the next hearing. Justice Bharucha asked: "What occasioned this transfer at this moment? What is the urgency? No other person could be found in the whole country to run Delhi's transport system?" When Solicitor-General Santosh Hegde said that a new E.D. chief could not be appointed immediately because there was no Central Vigilance Commissioner, the court remarked that for this precise reason the E.D. chief should not have been transferred in such haste, leaving the agency headless at a time when it was handling sensitive cases. The Court also ruled that none of the cases under the supervision of Bezbaruah would be closed before it gave its order on September 8.
On the same day, in a curious turn of events, Jayalalitha demanded the reinstatement of Bezbaruah as the E.D. chief. Janarthanan issued verbal instructions to the E.D. chief asking him not to hand over charge. However, Bezbaruah said that he was bound by the written orders issued by the Government. He placed on record that he was under verbal instructions from, the Minister of State for Revenue not to hand over charge and asked for clarification from the Government regarding his status.
Under Section 41 of the Foreign Exchange Regulation Act, only the Director of Enforcement can initiate action to retain beyond the mandatory six-month period documents recovered from the accused in any investigation. The Acting Director cannot do so. If the agency is left headless for a period of time, all investigations relating to which the six-month period will lapse have to be closed and relevant documents have to be returned to their owners.
The Supreme Court has directed in its order in the Jain hawala case that the heads of the two investigative agencies - the Central Bureau of Investigation (CBI) and the E.D. - can be appointed only by a duly appointed CVC. The Court ordered that the CVC should be given statutory status first and then appointed by a panel comprising the Prime Minister, the Home Minister and the Leader of the Opposition. A statutory CVC so appointed would then head the panels that appoint the heads of the CBI and the E.D. The Court had also stipulated that the post of E.D Director be upgraded to that of Director-General (which was done a few weeks ago) and that the tenure of the post be for two years.
Now an attempt is being made to use the court order selectively. The argument appears to be that the tenure of the E.D. Director is only for two years and that Bezbaruah having completed 33 months in the job, there was no bar on shifting him. However, one fact appears to have been conveniently overlooked - that the tenure of two years prescribed for the E.D. chief pertains to an appointee under the new dispensation of the CVC and not to one appointed for a five-year term under an earlier dispensation.
The Government is now moving fast to install a CVC. Neither the United Front Government nor the BJP-led Government acted after the Supreme Court laid down guidelines for the CVC's appointment in December 1997. S.V. Giri, the earlier CVC, refused to appoint new CBI and E.D. chiefs on the plea that he was not duly appointed. Consequently, he submitted his resignation and it was accepted.
On August 16, the Prime Minister, the Home Minister and the Leader of the Opposition met to select a new CVC. On August 20, there were reports that the Cabinet had decided that it would confer statutory powers upon the CVC. This was to be followed by a Cabinet Committee meeting to vet the draft legislation on the CVC, which would then be sent to the President to issue an ordinance. Cabinet sources told Frontline that the ordinance would be issued possibly before August 26, when the Government is obliged to file a reply in the Supreme Court on the Bezbaruah transfer issue. There is speculation that the appointment of a new CVC is being rushed through in order to present the Supreme Court with a fait accompli by showing that its orders of December 1997 have been complied with.
Interestingly, the draft legislation on the CVC, which was taken up for discussion in the Cabinet, was not the same as that was submitted by the Law Commission on August 12. The Cabinet note circulated on August 20 said that since the Law Commission draft had not yet been submitted, another draft, prepared by the Law Ministry, was being considered.
There is speculation about why the Government was in a hurry to shift Bezbaruah out of the E.D. even as Ashok Kumar Aggarwal, Deputy Director, Delhi Zone, whom Bezbaruah had requested to be transferred out of the agency, remains in his office. The request for Aggarwal's transfer was made on the grounds that he had acceded to godman Chandraswami's request to be allowed to go abroad without referring the matter to the E.D. headquarters. The agency is pursuing important FERA cases against Chandraswami, several of which are at the stage of prosecution and adjudication.
The CBI, which is also investigating cases against the godman, however, opposed Chandraswami's travel plans and consequently he was not allowed to go. When the CBI counsel took it up with the E.D., Bezbaruah found that this decision was taken by the Delhi Zone without the knowledge of the Director. He reportedly took it up with the Revenue Department and sought Aggarwal's transfer.
The nodal agency set up on the directions of the Supreme Court to investigate the criminal-politician-bureaucrat nexus has met a few times. The agency is headed by the Home Secretary and comprises the chiefs of the CBI, the E.D. and the Directorate of Revenue Intelligence, as well as the Member (Investigations) of the Central Board of Direct Taxes. The Revenue Secretary is a special invitee to the nodal agency's meetings. It is learnt that the nodal agency was apprised of certain linkages between criminals and government officials which, if taken further, would have revealed further linkages between prominent bureaucrats, politicians and criminals. Therefore, it is possible that efforts are on to revamp the nodal agency by changing the officials represented on it. The urgency to replace the E.D. chief could perhaps be part of this manoeuvre.
