The TANSI cases

Print edition : September 15, 2001

FOR Chief Minister Jayalalithaa, two cases, the Jaya Publications case and the Sasi Enterprises case - known as the "TANSI cases" - have become a spectre haunting her for half a decade now. They form the core of her legal troubles.

The two cases relate to certain deals Jaya Publications and Sasi Enterprises, in both of which Jayalalithaa and her close friend Sasikala Natarajan are partners, had with the Tamil Nadu Small Industries Corporation (TANSI), a State government undertaking. The cases had their origin in 1993 when Janata Party president Subramanian Swamy sought permission from Governor M. Channa Reddy to prosecute Jayalalithaa on charges of corruption. Jayalalithaa was then Chief Minister heading the All India Anna Dravida Munnetra Kazhagam (AIADMK) government (1991-96).

After the Dravida Munnetra Kazhagam (DMK) headed by M. Karunanidhi returned to power in the State routing the AIADMK in the 1996 elections, the pace of investigation in these two cases was stepped up and it was entrusted to the Crime Branch-Criminal Investigation Department (CB-CID) of the State police.

The CB-CID filed the chargesheet in the Jaya Publications case on November 15, 1996. The six accused are Jayalalithaa; Sasikala; former Chairman and Managing Director of TANSI T.R. Srinivasan; former Rural Industries Minister Mohammed Asif; former Special Deputy Collector (Stamps) S. Nagarajan and Jayalalithaa's former Additional Secretary R. Karpoorasundarapandian. The charges are that Jaya Publications bought 3.07 acres of land and a building belonging to the TANSI Foundry at Guindy in Chennai below their guideline value and in the process gained more than Rs.3.5 crores. There was thus wrongful loss to the government. The State government also suffered losses because of the consequent reduction in stamp duty and registration fees payable, the chargesheet said. Jayalalithaa was Chief Minister when Jaya Publications bought the property in March 1992. The chargesheet alleged she "abused her official position at every stage" in the transaction although no public interest was involved. Since she was a public servant then, she attracted the provisions of the Prevention of Corruption Act (PCA).

The same six persons are accused in the Sasi Enterprises case. According to the chargesheet filed on October 22, 1997, the six entered into a criminal conspiracy between 1991 and 1993, and helped Sasi Enterprises in the purchase of the land, building and machinery belonging to TANSI Enamelled Wires at undervalued terms. Although the value of the land was around Rs.90.53 lakhs, the amount mentioned in the sale deed was Rs.53.04 lakhs. For the building, the sale deed was executed for Rs.16.15 lakhs against the guideline value of Rs.25.66 lakhs, the chargesheet said. The machinery too was undervalued. Thus, there was wrongful loss to the government. According to the chargesheet, Jayalalithaa and Sasikala obtained a monetary advantage of Rs.66.11 lakhs in the transaction.

The building that housed Jaya Publications at the Guindy industrial estate in Chennai, part of the subject matter of the ongoing legal process.-S.R. RAGHUNATHAN

Special Judge P. Anbazhagan handed down the judgments in the two cases on October 9, 2000. He convicted and sentenced all the six accused to imprisonment in the Jaya Publications case. In the Sasi Enterprises case, five of six accused were convicted and sentenced. Asif was acquitted.

In the Jaya Publications case, the Special Judge convicted and sentenced Jayalalithaa to three years' rigorous imprisonment and a fine of Rs.10,000. He said that "the first accused dishonestly abused her office" as Chief Minister and bought the TANSI property. He added that "there was no force in the argument that TANSI was a private property". In the Sasi Enterprises case, Jayalalithaa was handed down two years' imprisonment and fined Rs.5,000. In each case, Sasikala received the same sentence as Jayalalithaa. The sentences were passed under Section 120-B (punishment for criminal conspiracy) and 409 (criminal breach of trust by public servant or by banker, merchant or agent) of the Indian Penal Code (IPC), and Sections 13 (2) and 13 (1) (c) and (d) of the Prevention of Corruption Act.

The Judge held as not proved the charge under Sections 169 and 119 of the IPC. Section 169 of the IPC deals with "public servant unlawfully buying or bidding for property". Section 119 talks about "public servant concealing design to commit offence which it is his duty to prevent". The Judge ordered the confiscation of both properties.

In the Pleasant Stay Hotel case, Special Judge V. Radhakrishnan on February 2, 2000, convicted and sentenced Jayalalithaa to one year's rigorous imprisonment for her role in illegally granting exemption to the hotel in 1994 from building and hill area development control rules to enable the unauthorised construction of five additional floors to its building in the heart of Kodaikanal town.

There were five accused including Jayalalithaa. The four others were former Local Administration Minister and present Lok Sabha member T.M. Selvaganapathy; former Secretary, Municipal Administration and Water Supply H.M. Pandey; executive director of the hotel Rakesh Mittal and its chairman and managing director Palai N. Shanmugham. (Shanmugham is no more.)

Special Judge Radhakrishnan convicted all the five accused under Section 120-B of the IPC and sentenced them to one year's rigorous imprisonment. He held them guilty of conspiring to get the exemption granted. The accused were also found guilty under the PCA.

All the accused in the three cases went on appeal to the Madras High Court against their conviction and sentences. Arguments opened in the appeals on August 27 this year before Justice R. Balasubramanian. Senior Advocate K.K. Venugopal led the defence for Jayalalithaa. He said the TANSI properties bought by Jaya Publications and Sasi Enterprises fell under Alandur village (a suburb of Chennai) and not under Adyar, where the price of land was higher. So their value was much lower than claimed by the prosecution. He alleged that the market values mentioned by the prosecution for the two properties were "cooked up" and that "fixation of market price was guesswork". Several properties situated close to these two TANSI properties were sold at a price lower than these two properties.

Venugopal contended that the guideline value had no force of law. He claimed that Jayalalithaa was given to understand that she was charged with having purchased TANSI properties far below the guideline value and that only at the final stage of the trial, the prosecution changed its version to say that she purchased property below the market value. Proper procedures were not followed in amending the charges. So "prejudice" was caused to her, he said. Even accepting that the market value was Rs.7.32 lakhs a ground ( a unit of measurement comprising 2,400 square feet), it still worked out to Rs.3 lakhs a ground if the development charges were also taken into account. And Jayalalithaa did pay Rs. 3 lakhs a ground. So the property was not bought at a lesser price. Counsel added that the government had no entrustment of TANSI properties.

In the trial court, N. Natarajan, then Senior Special Public Prosecutor in the corruption cases against Jayalalithaa, argued that the Tiru. Vi. Ka. Industrial Estate (where the TANSI properties are located) was formed by carving out portions of land situated in Adyar and Alandur villages. The Tiru. Vi. Ka. Industrial Estate was brought under the jurisdiction of the Adyar Registrar. That is why both the TANSI properties bought by Jayalalithaa were registered in the Adyar sub-registry. They were brought under the jurisdiction of the tahsildar, Guindy-Mambalam revenue district. Natarajan said all this was clear from the evidence given by witnesses G. Venkatachalam and S. Dharmalingam who were examined by Jayalalithaa's counsel as defence witnesses.

Natarajan said the guideline ve value was fixed by the government. She purchased the properties when she was the head of the State government. If she did not stick to the value fixed by the government, who else was expected to do so, Natarajan asked. He said the prosecution had shown that both the guideline value and the market value were one and the same in that area at the time the TANSI properties were purchased. In 1990, Jayalalithaa had bought the Heatex Property in the Industrial Estate. She paid stamp duty for that property, accepting the guideline value of Rs. 6 lakhs a ground. In 1991, she bought the property of Idhayam Publications. In the sale deed its market value was mentioned as Rs.4.65 lakhs. Prosecution documents number 70 and 71 were marked to show that the market value of land in the industrial estate was Rs.7.32 lakhs a ground in the year the TANSI properties were bought.

Natarajan noted that the TANSI sub-committee had rejected the claim of R.R. Industries which quoted Rs.4.32 lakhs a ground to buy the TANSI Enamelled Wires property, saying it was below the guideline value (forgetting that the market value and the guideline were one and the same), and the tender was closed.

The Supreme Court has directed that arguments should begin afresh in the appeals not earlier than October 1. So Jayalalithaa's counsel has to repeat his arguments before the new Judge, who will be named, to hear the appeals. Even if the new Judge begins to hear the appeals from October 1, it will take about a week to 10 days to pronounce orders on the appeals.

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