Nailed at last

A Special Court convicts and awards jail sentences to former Minister of State for Communications Sukh Ram and two others in the corruption case relating to the purchase of telecom equipment in 1993-94.

INVESTIGATING agencies have often found it difficult to establish corruption charges against individual Ministers. The prosecution in such cases has invariably not succeeded for want of sufficient evidence and for the lack of reliable witnesses. But the Central Bureau of Investigation's (CBI) success in securing on July 5 the conviction of former Union Minister of State for Communications Sukh Ram by a Delhi trial court in a case pertaining to a specific contract to a private firm to purchase telecom equipment shows that Ministers can be held criminally responsible for their actions if they caused heavy losses to the exchequer.

During the early days of the liberalisation regime ushered in by P.V. Narasimha Rao in the early 1990s, the Department of Telecommunications (DoT) invited bids for Multi-Access Rural Radio (MARR) systems to expand the country's rural telecommunications network. Thirty-five companies, among them the Hyderabad-based telecom contractor, Advanced Radio Masts (ARM) Limited, submitted bids, which were opened in March 1993.

The Price Negotiations Committee, which considered the bids, included DoT's Deputy Director-General N.C.Gupta, Director Ujjagar Singh and Deputy Director-General (Lease-Financing) Runu Ghosh. N.C. Gupta and Ujjagar Singh recommended that ARM's crystal-based systems were inferior to and therefore logically cheaper than the more advanced synthesised MARR systems on offer. ARM's bid was for Rs.3.47 lakhs a unit, although there was a substantial price difference between the two systems. Gupta, therefore, recommended the reduction of the price of the crystal-controlled version by Rs.37,170 apiece. Runu Ghosh overruled this, saying that the price for both systems should be identical. She noted that it would not be correct to reduce the price of the crystal version on account of additional optional features in the synthesised version. She also felt that it would be incorrect to operate on two rates for the same tender.

Sukh Ram concurred with the view that offering a lower rate for the crystal version was discriminatory. Overruling technical objections from DoT, he directed the issue of orders to ARM for 450 systems of the crystal version at the same price fixed for the synthesised version.

The CBI contended that this decision helped ARM obtain a pecuniary advantage of Rs.1.66 crores. The CBI's case was that Sukh Ram and Runu Ghosh, in conspiracy with P. Rama Rao, the then managing director of ARM, by corrupt and illegal means or by otherwise abusing their official position as public servants, helped the company gain this pecuniary advantage.

In his judgment, Special Judge V.K. Jain concluded that the very fact that DoT preferred the synthesised version left no doubt about its superiority over the crystal version. Certain limitations found in the crystal version led DoT to specify that the equipment having the oscillator with synthesiser would be preferred.

N.C. Gupta told the court that the function of an oscillator is to generate the frequency on which a particular system is to operate. The synthesised version provided for control of frequency through a synthesiser, whereas the crystal version envisaged control of frequency through a crystal. The limitation of a crystal version is that it could operate only on a fixed frequency. There was a distinct advantage in the synthesised version as its frequency could be changed in the field itself by using the dip switch provided in the system, whereas it could not be done in case of the crystal version, N.C. Gupta said.

Having convinced itself about the merits of Gupta's case, the court observed that no reasonable person would pay the same price for two versions of the same system if one of them was superior to the other in as much as it had a number of additional facilities and also did not have the limitations found in the inferior version. DoT was absolutely justified in recommending a lower price for the crystal version and Sukh Ram totally disregarded this recommendation, Justice Jain observed.

As Minister, Sukh Ram had the authority to overrule his subordinates, including the members and the Chairman of the Telecom Commission. No exception could be taken to his increasing the price of the crystal version so as to put it on a par with the synthesised version, if it was shown that his decision was justified in the facts and circumstances of the case, the Judge remarked.

Indeed, the judgment articulates the principles of ministerial responsibility which could help evaluate the performance of a Minister in office. It said: "It is an undisputed proposition of law that the court does not sit in appeal over the decision taken by the public servant concerned and no offence is made out against the public servant, if the decision taken by him could have been taken by a person acting reasonably and passing order on the basis of the material placed before him... A public servant, including a Minister, while discharging his official duty, has to act fairly and reasonably, keeping public interest in mind, and he cannot act arbitrarily and unreasonably. If, however, the decision taken by the public servant is such, which no responsible person could have taken in the facts and circumstances of the case, he has to face the consequences for the decision taken by him."

The judgment put a clear premium on the opinion of expert officials over that of a non-expert Minister. Sukh Ram, it said, was not a technical person, and as such not in a position to overrule technical opinion. Sukh Ram did not seek technical help from any other source to controvert N.C. Gupta's opinion, the Judge pointed out.

The court found the conduct of Runu Ghosh in the entire episode as an indicator of her being keen to favour ARM. She not only opposed N.C. Gupta's proposal but displayed unusual interest to show that the synthesised version manufactured by ARM had some additional features. The court found her claim incorrect.

The recovery of blank letterheads signed by Rama Rao from Runu Ghosh's office convinced the court about Rama Rao's proximity to her. The notes recorded by Runu Ghosh on the file provided material to Sukh Ram to pass an order favourable to ARM, in disregard of commercial considerations and the public interest, the court found.

As a Minister, Sukh Ram was bound to act in the public interest and protect the financial interest of the state, but he chose to do exactly the opposite. He reversed his own decision to purchase the crystal version at a reduced price without there being any change of circumstance and any new material justifying the change of decision, the court found. He acted in complete disregard of the advice given to him not only by the DoT members in charge of procurement and finance, but also by the then Chairman of the Telecom Commission, N. Vittal.

The Judge convicted Sukh Ram, Runu Ghosh and Rama Rao under section 120 B of the Indian Penal Code, read with Section 13(1) (d) and 13(2) of the Prevention of Corruption Act, 1988. The Judge dismissed the pleas for leniency in the award of punishment on the grounds of age (Sukh Ram is 75 years old), poor health and family considerations.

The Judge held that a public servant once he is found to be guilty of corruption, deserved no indulgence from the court. Punishment in such cases should act as a deterrent to public servants who would indulge in corruption, the Judge observed.

While Sukh Ram was sentenced to three years' rigorous imprisonment with a fine of Rs.1 lakh, Runu Ghosh was sentenced to two years' rigorous imprisonment with a fine of Rs.50,000. Rama Rao was sentenced to three years' imprisonment with a fine of Rs.2 lakhs. The accused are sure to secure bail and go in appeal against the verdict in the Delhi High Court. The Special Court's hearing in the case was affected last year when Justice R.S. Sodhi of the Delhi High Court quashed the trial on the grounds that there was no prima facie evidence against the accused under the PCA (Frontline, March 2, 2001). The CBI later obtained relief from the Supreme Court, which found Justice Sodhi's ruling incorrect and directed the Special Court to proceed with the trial on a daily basis.

Sukh Ram was indicted in another case, for the possession of assets far disproportionate to his known sources of income. Currency notes totally worth Rs.4 crores were discovered during a CBI raid in mid-1996 at his residence. Sukh Ram denied that the money belonged to him. But the outcome of this case, like the telecom scam, could embarrass both his past and present friends in politics: the Congress(I), which expelled him in 1996, and the Bharatiya Janata Party, which owes the survival of its government in Himachal Pradesh to the support extended by his Himachal Vikas Party. Both the Congress(I) and the BJP are now keeping a tactical distance from Sukh Ram.