Legal cases

Uncertain outcome

Print edition : January 06, 2017

Jayalalithaa, who was arrested for the first time in December 1996 in the "colour television sets" case, being brought to the Police Commissioner's office in Chennai for interrogation. Photo: THE HINDU ARCHIVES

Jayalalithaa and Sasikala leave a court in Chennai, which sentenced Jayalalithaa to one year in prison in the Hotel Pleasant Stay case, in February 2000. Photo: REUTERS

Jayalalitha arriving at a court in Chennai hearing the "wealth case" against her, on October 21, 1997. Photo: M. MOORTHY

Jayalalithaa at the wedding reception of V.N. Sudhakaran (left), who was at that time her foster son. He is an accused in the assets case. Photo: THE HINDU ARCHIVES

Sasikala and her sister-in-law Ilavarasi, both co-accused in the case of disproportionate assets against Jayalalithaa, arriving to appear before the special court in Bengaluru in July 2011. Photo: K. BHAGYA PRAKASH

Valuables found in Jayalalithaa's residence at Poes Garden, Chennai, in a DVAC raid after her arrest in the colour TV case. Photo: The Hindu Archives

Valuables found in Jayalalithaa's residence at Poes Garden, Chennai, in a DVAC raid after her arrest in the colour TV case. Photo: The Hindu Archives

Subramanian Swamy. Swamy, then the leader of the Janata Party, sought and received Governor Channa Reddy's permission to prosecute Jayalalithaa. Photo: THE HINDU ARCHIVES

Tamil Nadu Governor Dr. M. Channa Reddy. Photo: THE HINDU ARCHIVES

Michael D'Cunha, Special Court judge who pronounced Jayalalithaa guilty. He is now an additional judge in the Karnataka High Court. Photo: K. Murali Kumar

Central Jail in front of the court hall in Bengaluru where Jayalalithaa appeared on September 27, 2014, for the CBI court verdict in the assets case. Photo: K. BHAGYA PRAKASH

Jayalalithaa’s demise renders uncertain the verdict in the case of disproportionate wealth against her, on which the Supreme Court reserved its verdict in June 2016.

Will the “disproportionate wealth” case against Sasikala Natarajan, V.N. Sudhakaran and J. Ilavarasi, who are the co-accused with former Tamil Nadu Chief Minister Jayalalithaa, the prime accused in the case, collapse with Jayalalithaa’s death? Legal opinion is divided. On June 7, 2016, the Supreme Court reserved its judgment in the case. It is generally agreed that the Karnataka government’s appeal in the Supreme Court against Jayalalithaa’s acquittal by the Karnataka High Court will abate with her death. But advocates are divided on whether the Supreme Court can pronounce its verdict on the culpability of Sasikala, Sudhakaran and Ilavarasi because the prime accused is dead.

Of the nine corruption cases that Jayalalithaa faced from 1996, the “disproportionate wealth” case was turning out to be a millstone round her neck. The prosecution case was that Jayalalithaa, during her tenure as Chief Minister from 1991 to 1996, amassed wealth to the tune of Rs.66 crore in the form of farmhouses, bungalows, a tea estate, agricultural lands, industrial sheds, jewellery and cash in banks in her own name and in the names of the three other accused. Jayalalithaa had claimed that she drew a salary of Re.1 a month for 27 months as Chief Minister and did not draw any salary for the remaining 33 months of her tenure. So she was accused of possessing wealth that was “disproportionate to her known sources of income”.

The prosecution began after the Dravida Munnetra Kazhagam (DMK), headed by M. Karunanidhi, was voted to power in 1996. Officers of the Directorate of Vigilance and Anti-Corruption (DVAC), Tamil Nadu, filed a charge sheet on June 4, 1997, before the Special Court-III judge, P. Anbazhagan, naming Jayalalithaa as the first accused. Her “surrogate sister” Sasikala, Sasikala’s nephew Sudhakaran and her sister-in-law Ilavarasi were the other accused.

The case dragged on for 19 years as Jayalalithaa and Sasikala used every stratagem in the book to thwart and delay the court proceedings while the DMK doggedly pursued the case. The proceedings were keenly followed in Tamil Nadu. On a writ petition from DMK general secretary K. Anbazhagan, the Supreme Court transferred the trial from Chennai to Bengaluru on November 18, 2003. (By that time Jayalalithaa was back as Chief Minister.) The Karnataka government thus became the prosecuting agency.

On September 27, 2014, Special Judge John Michael D’Cunha in Bengaluru found Jayalalithaa guilty. He convicted and sentenced her to four years’ simple imprisonment under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act (PCA) and imposed a fine of Rs.100 crore on her. Judge D’ Cunha also convicted and sentenced all the three co-accused to four years’ simple imprisonment. Soon thereafter, Jayalalithaa and the other accused were taken into custody and sent to prison. Jayalalithaa lost her qualification to be a member of the State Assembly and was unseated as Chief Minister from the date of her conviction.

PCA applies to public servants

Chief Ministers, Ministers and Members of Legislative Assemblies and Parliament are public servants by legal definition. The (PCA) is applicable only to public servants. Section 13(1)(e) of the Act says that a public servant is said to have committed criminal misconduct if he/she or any person on his/her behalf acquires money or property disproportionate to their known sources of income during the period of public service. Section 13(2) prescribes a minimum of one year’s imprisonment and a maximum of seven years and also a fine for any public servant who commits criminal misconduct.

On May 11, 2015, Justice C.R. Kumaraswamy of the Karnataka High Court acquitted all the four accused and Jayalalithaa was sworn in as Chief Minister again. She was elected a legislator from Radhakrishnan Nagar constituency in a byelection held in June 2015. The Karnataka government appealed against the acquittals in the Supreme Court. The case was now approaching its final phase. On June 7, 2016, Justices Pinaki Chandra Ghose and Amitava Roy, who constituted the bench in the Supreme Court, announced that they were reserving their judgment.

Now that Jayalalithaa is no more, the question arises whether the PCA can be applicable to the other accused. Jayalalithaa was the only public servant during the time when the wealth in question was acquired. The second question is whether the co-accused, who helped Jayalalithaa to acquire that wealth, can be prosecuted when she is no longer alive.

Unique situation

Top criminal lawyers had told Frontline in 1997 that any person who had connived with Jayalalithaa to commit the alleged offence would be legally answerable, whether they were public servants or not. If, therefore, Jayalalithaa had acquired properties in the names of Sasikala, Sudhakaran and Ilavarasi (who were living with the Chief Minister at her residence in Chennai) and if it was established that these properties had been bought with the money that Jayalalithaa could not satisfactorily account for, the three co-accused were liable too ( Frontline, June 27, 1997).

After her death, Sunder Mohan, advocate, stressed that what would make all the difference was whether the main accused died during the pendency of the trial or after the trial was over. In this case, Jayalalithaa died after the verdict was reserved.

He said: “To refute the allegation against her, Jayalalithaa must be alive. That is absolutely necessary. No man can be condemned unheard. So you cannot render any finding in her absence which may go against her. This is the fundamental rule of law when somebody dies during the pendency of the trial.” Jayalalithaa’s demise, he said, had created “a unique situation, which happens very rarely”. Yet, there is a catch. Sunder Mohan said: “So in this case, since the prime accused is dead, it only means that the appeal against her acquittal will abate. A dead person cannot be punished. However, so far as the other accused are concerned, the prosecution can still maintain the appeal. This is more so because the judgment is reserved. All the accused have already been given full opportunity to defend themselves in the appeals against their acquittal. In this case, the hearing has been completed. Evidence has been presented. The court, therefore, can render its finding of guilt against the accused if it finds them guilty.”

Sunder Mohan said: “Ordinarily, an appeal against acquittal will abate with the death of the accused. In this case, since the appeal was heard fully and what remained was only the delivery of the judgment, in my view, the court can render its judgment either way. It is needless to say that a punishment awarded to a deceased cannot be executed. However, a finding of guilt can be recorded and even consequences such as attachment and forfeiture of properties can necessarily follow if the deceased-accused is found guilty.”

Case can swing either way

A report in The Hindu, datelined New Delhi and published on December 7, 2016, quoted the former Supreme Court judge K.S. Radhakrishnan as saying that the case against Jayalalithaa would abate. He quoted Section 394 of the Code of Criminal Procedure to argue that all appeals, even against the acquittal as in this case, “shall finally abate on the death of the accused”. The Supreme Court could still decide on the aspect of the criminal conspiracy by the co-accused on the facts and evidence of the case, Justice Radhakrishnan said.

Senior Advocate Harish Salve argued that a corruption case did not collapse with the death of a public servant and the prime accused, according to the report. The Supreme Court had to decide on the element of criminal conspiracy separately. For “a criminal conspiracy is a crime in itself,” Salve said.

However, senior advocate K.T.S. Tulsi said: “Where is the question of conspiracy if the prime accused is no more? The entire case is based on the charge of misuse of office. If that part falls with her [Jayalalithaa’s] death, there is no conspiracy.”

The Hindu report quoted former Supreme Court judge K.T. Thomas as saying that the appeals should be reopened first. He said: “When the principal offence of ‘misuse of office’ has become frustrated or has abated on account of the death of the prime accused, the question whether ancillary offences like criminal conspiracy would stand is pivotal, and has to be heard and decided by the Supreme Court.”

History of legal troubles

What is the genesis of Jayalalithaa’s legal troubles? Jayalalithaa enjoyed a fund of popular goodwill when she began her tenure in 1991. But the next five years saw high levels of corruption and brutal physical violence against political opponents, advocates and bureaucrats. Corruption ate into the innards of the Public Works Department, the Transport Department, the Agriculture Department, the education sector and so on. Several hundred bogus teachers’ training institutes came up. Jayalalithaa became inaccessible to her party colleagues. A coterie headed by Sasikala ruled the roost. What capped all this was the “mother of all marriages”—Sudhakaran’s marriage with the actor Sivaji Ganesan’s granddaughter, N. Sathyalakshmi. The crude display of lucre at the wedding sickened and shocked the people.

In this background, the DMK headed by M. Karunanidhi sought Governor Bhishma Narain Singh’s permission to prosecute Jayalalithaa, her Ministers and some Indian Administrative Service (IAS) officers allegedly “connected with 18 grave criminal offences in which irregularities estimated at Rs.100 crore were committed”. The Governor declined.

Around this time, Subramanian Swamy, then Janata Party president (he is now a member of the Bharatiya Janata Party, or BJP), launched his “movement for the restoration of good government in Tamil Nadu” and began a campaign against the corruption and violence of the Jayalalithaa regime. He sought permission from Governor M. Channa Reddy to prosecute Jayalalithaa on several charges of corruption. The Governor gave him permission on March 25, 1995, to prosecute her in what came to be called the TANSI land deal case and the case of import of coal by the Tamil Nadu Electricity Board (TNEB, now called Tami Nadu Generation and Distribution Corporation Limited). TANSI is the acronym for Tamil Nadu Small Industries Corporation. Both Channa Reddy and Swamy were at the receiving end of violence by AIADMK cadres.

DMK leaders, including Karunanidhi and party general secretary K. Anbazhagan, submitted a 539-page document against Jayalalithaa and others to Channa Reddy on April 15, 1995. The 25th charge of corruption related to amassing of unaccounted for wealth by Jayalalithaa and Sasikala’s relatives.

In the May 1996 Assembly elections, the DMK and the Tamil Maanila Congress (TMC), which were allies, trounced the AIADMK. Karunanidhi’s government started fulfilling the DMK’s election promise to punish all persons who allegedly engaged in corrupt practices during the Jayalalithaa regime. The police started investigating the whole gamut of corruption during her regime.

On June 14, 1996, Swamy presented a private complaint before the Principal Sessions Judge, City Civil Court, Chennai, to prosecute Jayalalithaa under the PCA. Swamy alleged that Jayalalithaa was guilty of criminal misconduct under Section 13(1)(e) of the PCA and provided statistics on how she had amassed wealth beyond her known sources of income. The reply given to him in the Rajya Sabha to a question from him was that her wealth was zero in 1989-90; Rs.1.90 crore in 1990-91; Rs.2.60 crore in 1991-92; and Rs.5.82 crore in 1992-93. Then it jumped, according to his investigation, to Rs.21.33 crore in 1993-94 and shot up to Rs.38.21 crore in 1994-95. Swamy wondered how there could be such a big jump in a person’s income when she was drawing a salary of only one rupee a month. He alleged that Jayalalithaa, Sasikala and Sasikala’s relatives had amassed wealth disproportionate to their known sources of income.

The Principal Sessions Judge asked the police to investigate Swamy’s complaint. N. Nallamma Naidu, then Superintendent of Police, DVAC, was appointed the investigating officer. His filing of a first information report (FIR) on September 18, 1996, signalled the start of the legal troubles for Jayalalithaa, Sasikala and her relatives. As many as 46 corruption and other cases were filed against Jayalalithaa, Sasikala and her relatives such as V. Bhaskaran and T.T.V. Dinakaran, Ministers such as S. Kannappan, T.M. Selvaganapathy, C. Aranganayagam, K.A. Sengottaiyan, K.P. Krishnan, K. Ponnuswamy, V. Sathiamoorthy, S. Muthuswamy and S.D. Somasundaram, and bureaucrats such as H.M. Pandey, A.N. Dyaneswaran, J.T. Acharyalu and M. Sathiamoorthy.

Of these 46 cases, nine were cases of corruption against Jayalalithaa. They were (1) the colour television case; (2) and (3) the TANSI land deal cases involving Jaya Publications and Sasi Enterprises; (4) the coal import case; (5) the disproportionate wealth case or what came to be popularly called the Jayalalithaa wealth case; (6) the Pleasant Stay Hotel case; (7) the Meena Advertisers case; (8) the $300,000 gift case which involved an immunity scheme; and (9) the Income Tax case.

These cases were investigated by the DVAC, the Crime Branch-Criminal Investigation Department (CB-CID) or the Central Bureau of Investigation (CBI). The cases against Jayalalithaa and others were filed under various provisions of the Indian Penal Code (IPC) and the PCA. Ultimately, the disproportionate wealth case, the two TANSI cases and the Pleasant Stay Hotel case formed the core of the legal troubles for her.

Colour tv case

She was arrested for the first time on December 7, 1996, by CB-CID officers from her residence in the “colour television sets case”, in which she was the first accused. She was remanded in judicial custody and sent to Central Prison, Chennai (“Due process”, Frontline, December 27, 1996).

The case related to the Tamil Nadu government buying 45,302 colour television sets for installation in village community centres. The allegation was that the sets were bought at the highest quoted price, which led to a loss of Rs.8.53 crore to the government. The other accused were former Local Administration Minister T.M. Selvaganapathy and two IAS officers, H.M. Pandey and M. Sathiamoorthy.

The CB-CID alleged that in July 1995 Jayalalithaa and Selvaganapathy “hatched a conspiracy to swindle crores of rupees” under the pretext of providing community television sets. Its report gave details of how the money was funnelled to Selvaganapathy through the agents and officers of companies that manufactured the television sets.

After Jayalalithaa’s arrest, a DVAC raid on her residence in Poes Garden, Chennai, recovered 40 kg of gold, 500 kg of silver articles, 400 pairs of gold bangles, other jewellery, hundreds of saris, hundreds of pairs of expensive footwear and other things. When she was in prison, she was arrested in other cases as well. She stepped out of the prison on January 3, 1997, after being granted bail by different courts in the Pleasant Stay Hotel case and the Meena Advertisers case, the “colour TV sets” case, the coal import case and the disproportionate wealth case. The trial proceedings in the two TANSI cases began on the same day.

Tansi case

The CB-CID filed the charge sheet in the Jaya Publications case on November 15, 1996, and in the Sasi Enterprises case on October 22, 1997. There were six accused in each case. Jayalalithaa and Sasikala, partners in the two firms, were the first and the second accused ( Frontline, December 9, 2003).

The allegation was that Jaya Publications and Sasi Enterprises bought two pieces of property from the State-owned TANSI at a price much lower than the guideline/market value, which led to a wrongful loss of Rs.3.5 crore and Rs.66 lakh to the government. Since Jayalalithaa bought these properties when she was Chief Minister from 1991 to 1996, she was charged under the PCA. The charge sheet said Jayalalithaa and Sasikala, between October 1991 and December 1992, helped Jaya Publications to buy 3.07 acres and a superstructure measuring 2,698 square metres from a government-owned industrial unit called TANSI Foundry below the guideline value. The building and the machinery were also undervalued.

Thus, Jaya Publications gained Rs.3.5 crore, which was a wrongful loss to the government. The charge sheet said Jayalalithaa “abused her official position at every stage” although no “public interest” was involved in the transaction. She and others were charged under various sections of the IPC such as 120-B (conspiracy), 409 (criminal breach of trust by a public servant and others), and Section 13(2) of the PCA read with 13(1)(c) and 13(1)(d). Since Jayalalithaa bought government property when she, as a Minister, was not eligible to buy it, she was also charged under IPC Section 169.

In the Sasi Enterprises case, the charge sheet said Jayalalithaa and Sasikala made a gain of Rs.66.11 lakh because the company bought land owned by TANSI Enamelled Wires at less than the guideline value.

In the “coal import case”, the charge sheet said there was a wrongful loss of Rs.6.5 crore to the government.

In the Pleasant Stay Hotel case, the allegation was that in 1994 Jayalalithaa legalised unauthorised construction by the hotel in Kodaikanal. The exemption related to the illegal addition of five floors to the hotel by its executive director Rakesh Mittal ( Frontline, March 3, 2000).

In the Meena Advertisers case, the allegation was that the Jayalalithaa government, during the South Asian Federation Games in 1995 in Chennai, waived Rs.2 crore due from Meena Advertisers, the sole advertising agency for the Games, which was a wrongful loss to the government.

In the “$300,000 gift case”, the allegation was that Jayalalithaa received $300,000 from the Bankers’ Trust Company in the United States in December 1991 under the Voluntary Deposit (Immunities and Exceptions) Act of 1991, which is not applicable to public servants. The CBI investigated the case. In the “Income Tax case”, the allegation was that the former Chief Minister did not file her returns for the assessment year 1993-94.

Convicted under PCA

On February 2, 2000, Jayalalithaa became the first former Chief Minister to be punished under the PCA when Special Judge V. Radhakrishnan convicted and sentenced her to one year’s rigorous imprisonment for granting exemption from building and hill area development control rules to Pleasant Stay Hotel, which illegally built five additional floors. The judge sentenced her to one year’s rigorous imprisonment for criminal conspiracy under the IPC and criminal misconduct by a public servant under the PCA; the sentences were to run concurrently. Radhakrishnan sentenced Selvaganapathy and the three other accused to one year and six months of rigorous imprisonment and fine. Jayalalithaa appealed against her conviction and sentence in the Madras High Court.

On October 9, 2009, Special Judge P. Anbazhagan convicted Jayalalithaa to three years’ rigorous imprisonment in the Jaya Publications case and two years’ rigorous imprisonment in the Sasi Enterprises case. Anbazhagan said “the first accused dishonestly abused her office” as Chief Minister and bought TANSI property at less than the guideline value; he also ordered confiscation of the property. “There was no force in the argument that TANSI was private property,” Anbazhagan ruled. In both the cases, Sasikala received the same sentence as Jayalalithaa. The sentences were handed down under Sections 120-B and 409 of the IPC, and under Sections 13(1)(c) and 13 (1) (d) and 13(2) of the PCA. The other accused were also convicted and sentenced to imprisonment.

Disqualification and its overturning

Jayalalithaa’s conviction in the Jaya Publications and Sasi Enterprises cases led to her being disqualified from contesting the Assembly elections that were to be held on May 10, 2001. Section 8(3) of the Representation of the People Act bars from contesting elections persons convicted and sentenced to imprisonment of not less than two years, from the date of conviction, and for another six years from the date of release from prison. This meant that Jayalalithaa was disqualified from contesting the elections for nine years. However, she filed her nomination papers to contest from four constituencies: Andipatti, Krishnagiri, Bhuvanagiri and Pudukottai, though candidates are not allowed to contest from more than two constituencies under Section 33(7)(B) of the RPA, introduced in 1996.

The returning officers in all the four constituencies rejected her nomination papers. But she campaigned hard for her party and its allies and used the rejection of her nomination papers to turn the tables on the DMK. She painted the rejection as “the victorious culmination of five years of conspiracy”. She projected herself as the chief ministerial candidate of a powerful front that comprised the AIADMK, the TMC, the Congress, the Communist Party of India (Marxist), the Communist Party of India (CPI) and the Pattali Makkal Katchi (PMK). In the elections held on May 10, 2001, the AIADMK-led alliance won a massive victory, bagging 197 of the 234 seats in the Assembly. The AIADMK was able to form a government on its own, with its candidates winning in 132 constituencies.

Although Jayalalithaa was disqualified from contesting the Assembly elections, Governor M. Fathima Beevi, in a controversial action, swore her in as Chief Minister on May 14. But Jayalalithaa faced another setback when quo warranto petitions were filed in the Supreme Court, seeking to set aside her appointment as Chief Minister. On September 21, 2001, a five-member Constitution Bench headed by Justice S.P. Bharucha unanimously ruled that her appointment was “not legal and valid”.

Justice Bharucha said: “We are satisfied that in the appointment of Ms. Jayalalithaa as Chief Minister, there has been a clear infringement of a constitutional provision and that a writ of quo warranto must issue.”

Jayalalithaa was unseated. She met Governor C. Rangarajan but did not give him any resignation letter. “There is no need for that. The court has ruled that my appointment is invalid,” she explained. O. Panneerselvam, then Revenue Minister and considered “harmless” and in the good books of Sasikala, was handpicked as the Chief Minister.

On December 4, 2001, the Madras High Court acquitted Jayalalithaa, Sasikala and the other accused in the Jaya Publications case, the Sasi Enterprises case and the Pleasant Stay Hotel case. Justice N. Dinakar’s findings in the two TANSI cases were that TANSI property was not government property and so Jayalalithaa did not buy government property; there was no specific law prohibiting a public servant from buying government property. “The market value does not lie in the property contemplated to be purchased but in the mind of the person contemplating to purchase the property,” the judge said. In the Pleasant Stay Hotel case, Justice Dinakar found no illegal gratification and no mens rea (guilty mind) involved in the process.

Jayalalithaa’s disqualification was overturned by the verdicts. She contested and won from Andipatti constituency on February 24, 2002, in a byelection. She was sworn in as Chief Minister on March 2 by Governor P.S. Ramamohan Rao. But R.S. Bharathi of the DMK and Subramanian Swamy challenged her acquittal in the Supreme Court.

Justices S. Rajendra Babu and P. Venkatarama Reddy of the apex court heard the appeals against the acquittal of Jayalalithaa, Sasikala and others. They reserved their orders in the two cases on September 26, 2002. After a gap of 14 months, the judges on November 24, 2003, upheld the High Court verdict acquitting Jayalalithaa and others. However, Justices Rajendra Babu and Venkatarama Reddy said “she [Jayalalithaa] must atone” for buying TANSI property “not only by returning the property to TANSI unconditionally” but by taking “steps to expiate herself”.

Other acquittals

On January 8, 2015, R. Dakshinamoorthy, Additional Chief Metropolitan Magistrate, Economic Offences–I, dismissed as withdrawn the cases against Jayalalithaa and Sasikala for not filing income tax returns for the assessment year 1993-94 because on November 27, 2014, they paid the compounding fees and other charges, which came to about Rs.2 crore.

Other courts had acquitted Jayalalithaa and others in the coal import case, the Meena Advertisers case and other cases. Among the cases that still remained against her was the “$300,000 gift case”. On September 30, 2011, Justice K.N. Basha of the Madras High Court quashed the entire proceedings in the case against her and former Ministers K.A. Sengottaiyan and Azhagu Thirunavukkarasu.

Justice Basha said if the factual scenario in the case, coupled with the sequence of events, which led to a 10-year delay in investigation, were to be tested on the Supreme Court principles, then the petitioner’s (Jayalalithaa’s) right to speedy trial was violated. The CBI appealed in the Supreme Court against the Madras High Court verdict. Azhagu Thirunavukkarasu died in May 2015. So the CBI’s appeals in the Supreme Court against the acquittal of both Jayalalithaa and Azhagu Thirunavukkarasu will now abate. Again, as in the disproportionate wealth case, it is not clear whether the apex court can pronounce its finding on Sengottaiyan’s culpability.

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