One more acquittal

Print edition : January 05, 2002

AIADMK general secretary Jayalalithaa, cleared in the coal import case, is well on her way to returning as Chief Minister.

THE year 2001 drew to a close on a cheerful note for Jayalalithaa, former Tamil Nadu Chief Minister and general secretary, All-India Anna Dravida Munnetra Kazhagam (AIADMK).

On December 27, a Special Judge at Chennai, S.S.P. Darwesh, acquitted her and nine other accused of all wrong-doing in the "coal import case". The allegation was that the then Chief Minister Jayalalithaa, two of her former Cabinet colleagues, four Indian Administrative Service officers and top engineers of the Tamil Nadu Electricity Board conspired to import coal for use by TNEB, which led to a wrongful loss of Rs.6.5 crores to the utility.

Darwesh said, "None of the witnesses including the Investigating Officer was able to place any evidence to show that there were corrupt practices in this case. There is no sufficient evidence to establish that the accused had caused a loss of Rs.6.5 crores" to the TNEB.

There are no legal hurdles now for Jayalalithaa to contest a byelection to the State Assembly. Byelections are scheduled to be held in Andipatti, Saidapet and Vaniyamabadi constituencies on February 21 and she has announced her candidature from Andipatti.

Former Chief Minister Jayalalithaa.-R. RAGU

AIADMK sources gave indications of the party's strategy. Once the Returning Officer accepted Jayalalithaa's nomination for Andipatti, she would be elected the leader of the legislature party and she would stake her claim to be sworn in Chief Minister. The idea was that she should go to the electorate as Chief Minister.

Jayalalithaa overcame a major legal obstacle on December 4 when Justice N. Dhinakar of the Madras High Court acquitted her of corruption charges in the Jaya Publications, Sasi Enterprises and Pleasant Stay Hotel cases. She could not contest the elections to the Assembly in May 2001 because a Special Judge, P. Anbazhagan, had convicted and sentenced her to two years' and three years' rigorous imprisonment in the Jaya Publications and Sasi Enterprises cases respectively. She was disqualified from contesting the elections under Section 8(3) of the Representation of the People Act.

But she was sworn in Chief Minister by Governor M. Fathima Beevi on May 14 after the AIADMK was voted to power. The Supreme Court struck down her appointment on September 21 and she stepped down.

Trial is under way in two other corruption cases against her: the "disproportionate wealth" and "SPIC-TIDCO" cases. It may take months for the verdict in these cases.

The coal import case related to alleged corruption in the import of two million tonnes of coal through five suppliers: Sintex International Trading Private Limited, Perth; Hawley Fuel Trading Corporation, U.S.; Prima Comexindo, Indonesia; Counter Corp Trading Private Limited, Singapore; and Energy Trading Corporation, U.S. In March 1993, the then president of the Tamil Nadu Congress Committee, Vazhappadi K. Ramamurthi, alleged corruption in the deal. The AIADMK government, he said, had failed to impose penalties for higher-than-prescribed moisture and sulphur content and low calorific value of coal.

The Dravida Munnetra Kazhagam (DMK) returned to power in May 1996 and the Crime Branch-Criminal Investigation Department (CB-CID) filed the charge-sheet on April 2, 1997, naming 11 accused. They included Jayalalithaa, former Electricity and Public Works Minister S. Kannappan, former Chief Secretary T.V. Venkataraman, former TNEB Chairman N. Haribhaskar, former Finance Secretary N. Narayanan, former Industries Secretary C. Ramachandran, former TNEB Member (Accounts) A.J. Rajendran, former TNEB Member (Generation) S. Ramaswamy, former TNEB Member (Distribution) K. Nagarajan, and former TNEB Chief Engineer (Coal) B. Dakshinamurthy, and former Finance Minister V.R. Nedunchezhiyan. The case was filed on a complaint from Janata Party president Subramanian Swamy.

The charge-sheet said Nedunchezhiyan cleared the proposal for the coal import although he was aware of the objections raised by Public Works Department (PWD) Secretary V. Sundaram. Electricity Minister Kannappan, who knew the objections, approved the tender. Jayalalithaa authorised the import although she was aware of the objections. The accused entered into a criminal conspiracy some days before March 21, 1992, to import coal for TNEB and to enable the suppliers to gain financial advantage. It said the accused had caused a wrongful loss of Rs.6.5 crores to TNEB. They were charged with offences under Sections 120-B (criminal conspiracy) and 409 (criminal breach of trust by public servant or by banker, merchant or agent) of the Indian Penal Code, and Section 13(1)(a) and (d) read with Section 13(2) of the Prevention of Corruption Act (PCA).

On June 10, 1999, a Special Judge, V. Radhakrishnan, discharged Jayalalithaa and Nedunchezhiyan from the case. He said, "The court cannot presume or assume that the entire file, including the missing pages (which contained Sundaram's objections), were placed before Jayalalithaa and Nedunchezhiyan... On mere surmise, the court cannot presume that the file reached the two intact with the objections and only after knowing the objections did the two approve the proposal."

The CB-CID filed a revision petition in the High Court challenging their discharge. On January 12, 2000, Nedunchezhiyan died. The next day, Justice S. Thangaraj of the High Court upheld the trial court's order discharging Jayalalithaa from the case.

The DMK government filed a special leave petition in the Supreme Court against this order. The apex court in June 2000 directed her to stand trial in the case. So she was again included as an accused in the case. After the retirement of Radhakrishnan, the case was heard by Darwesh.

A star prosecution witness was Sundaram. As PWD Secretary, he wrote an 11-page note on May 26, 1993, to the TNEB Chairman, reminding the Board that he had "expressed strong reservations about the tender specifications" on February 12, 1993, itself. He alleged that "internationally accepted principles" were not adhered to. He referred to the attempt to reduce the minimum specification on calorific value for coal, and alleged that in "retrospect it appears that this was sought to be done to help two Indonesian sources who were otherwise getting eliminated" (Frontline, September 24, 1993).

Sundaram wrote a 22-page note on June 26. In it, he said, "In spite of my observation in my earlier notes, the processing of this tender continues to ignore the basic norms required in a tender of this magnitude... Even the evaluation criteria fails the fairness test as it clubs horses with donkeys in not differentiating, for example, the offer with 6,000 calorific value from an offer of 6,800 CV..." He recommended that the tender be scrapped.

During the trial, in his chief examination on November 17, 1999, Sundaram said he had consistently opposed the coal import from Indonesia because it was against public interest. However, on June 18, 2001 (after the AIADMK returned to power), Sundaram did a somersault during cross-examination by defence counsel. He said, "Any claim of financial loss is fanciful, hypothetical and not based on facts." He alleged that his earlier statements given to the police were made under duress and that he was threatened that he would be made an accused. He claimed that all his technical, procedural and financial objections were "fully answered" by the TNEB Chairman. He was "fully satisfied with the replies given and so signed the notes in complete approval", he said.

In his order, Darwesh said, "On the side of prosecution, there is no iota of evidence to prove that A-1 to A-10 entered into any agreement or there were meetings of mind to commit any illegal act... and thus hatch a conspiracy." On the contrary, it was proved by the evidence of the prosecution witnesses themselves that proper procedure was followed in letter and spirit in the Board (TNEB) meetings for the coal import.

Darwesh said Sundaram's conduct "speaks volumes" as per Section 8 of the Evidence Act. He gave "different reasons at different times to suit his convenience". In 1993, the Special Judge said, when a petition was filed in the Madras High Court (to stop the import of coal), Sundaram filed a counter fully supporting the then (AIADMK) government. He then voluntarily retired from service and joined the Janata Party headed by Subramanian Swamy. During chief examination, Sundaram supported the prosecution, belying his counter filed in the High Court. However, during cross-examination he said that everything had been done perfectly and that what he had said in the counter was true.

The Special Judge ruled that Sundaram's evidence and documents marked by him were in line with his counter and "so he speaks the truth". Various documents showed that Sundaram, whose "notes" on which the entire prosecution case reportedly rested, himself favoured the coal import with a free mind, the Judge said.

On the controversy that Sundaram's notes (the 22-page note), containing his objections were missing from the file, the Special Judge said there was no admissible and reliable record on whether the pages were removed. Sundaram said he had made an endorsement with reference to missing pages on a page but only a photocopy of the said page with a note was filed, the Special Judge noted.

Jayalalithaa could not have had any knowledge of Sundaram's objections as she had no occasion to go through the missing pages, the Special Judge said. Her approval was given in a routine manner.

The High Court had dismissed the petition challenging the import and allowed the import on September 1, 1993. So, "where is the conspiracy prior to September 1993?" the Special Judge asked. The prosecution witnesses had corroborated the fact that there was a shortage of coal and that the supply by Coal India Limited was irregular. So the allegation that there was sufficient amount of coal and that indigenous supply was available was without basis, the Special Judge said. Swamy's allegation that TNEB's practice was to import coal through the Minerals and Metals Trading Corporation was not true. His allegation that domestic bidders were prevented from participating in the tender was not correct.

The evidence that Subramanian Swamy had produced was vague and without substance, the Special Judge said. He had alleged in his complaint that Rs.700 crores was defrauded by tender manipulation and criminal conspiracy. But he did not say anything about conspiracy or fraudulent acts by A-1 to A-4 in his oral evidence.

The Investigating Officer (I.O.) admitted that he did not examine any foreign supplier and that there was no evidence of misuse of power or illegal gain to anyone. The I.O. did not say anything about what happened to the letters rogatory sent to foreign countries and what the nature of the investigation done there was. Darwesh said it was "really amazing how the selected scripts or portions were stolen from the files and handed over to Subramanian Swamy despite the fact that they were government files, containing confidential, official matters covered by the Official Secrets Act."

The Public Prosecutor in the case was changed after the AIADMK returned to power in May 2001. The new Public Prosecutor, M. Chandrasekaran, commented: "The Judge rightly applied his mind because there is no evidence. The main evidence was that of Sundaram and other top officials, all of whom turned hostile."

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