The TANSI turn

Published : Nov 08, 2002 00:00 IST

In a surprise move during the final stage of the hearing in the TANSI cases, Tamil Nadu Chief Minister Jayalalithaa and her confidante Sasikala offer to surrender the TANSI properties they had purchased.

IN the long and tortuous course of the two "TANSI cases" filed against Tamil Nadu Chief Minister Jayalalithaa and others, attention is now turned to the Supreme Court, which has reserved judgment in both cases. A surprise was caused during the final days of the hearing in the apex court by an offer made by Jayalalithaa to return the two properties she had bought from the State government undertaking, the Tamil Nadu Small Industries Corporation (TANSI), when she was Chief Minister from 1991 to 1996. K.K. Venugopal, Jayalalithaa's counsel, told Justices S. Rajendra Babu and P. Venkatrama Reddi on September 19 that she was prepared to surrender these properties.

Jaya Publications and Sasi Enterprises, in which Jayalalithaa and her confidante Sasikala were partners, allegedly bought properties from TANSI Foundry Limited and TANSI Enamelled Wires in the industrial estate at Guindy in Chennai at less than guideline/market value, allegedly causing a loss of Rs.3.5 crores and Rs.66 lakhs respectively to the government. There were six common accused in each case. Since Jayalalithaa bought these properties when she was Chief Minister, she was charged under the Prevention of Corruption Act (PCA), which applies to public servants. She and others were also charged under the sections of Indian Penal Code (IPC).

On September 16, 1992 the Dravida Munnetra Kazhagam (DMK) submitted a memorandum to Governor Bhishma Narain Singh listing 16 charges against the All India Anna Dravida Munnetra Kazhagam (AIADMK) government headed by Jayalalithaa, and sought his sanction to prosecute her. The charges included abuse of office and violation of the Code of Conduct in the purchase of the TANSI land. Bhishma Narain Singh declined to give permission.

When the DMK led by M. Karunanidhi returned to power in 1996 defeating the AIADMK, its government instituted corruption cases against Jayalalithaa and some of her former ministerial colleagues. These cases included the two TANSI cases.

R.S. Bharathi, senior DMK leader, was the original complainant in the TANSI cases. He filed a writ petition in the Madras High Court in 1993 praying that the sale of TANSI property to Jaya Publications be cancelled, as there was abuse of office in the purchase. Bharathi also filed a private complaint in June 1995 and the XI Metropolitan Magistrate, Saidapet, Chennai, took the case on file. The complaint was against Jayalalithaa for the purchase of the TANSI Foundry land in violation of Section 169 of the IPC and the Code for Conduct of Ministers.

In 1993, Janata Party president Subramanian Swamy, submitted a memorandum to Governor M. Channa Reddy, and sought sanction from him to prosecute Jayalalithaa for the TANSI land purchase. The Governor after some months accorded sanction. In the Jaya Publications case, Special Judge P. Anbazhagan convicted and sentenced to imprisonment all the six accused in October 2000. Jayalalithaa and Sasikala received three years' rigorous imprisonment (R.I.) each. The Special Judge ruled that Jayalalithaa had "dishonestly abused her office'' and bought the properties. "There was no force in the argument that TANSI was private property,'' Anbazhagan said. In the Sasi Enterprises case, one accused, Mohammed Asif (now deceased), was acquitted. Jayalalithaa and Sasikala received two years' R.I. each.

The accused appealed against the sentences in the Madras High Court. Justice N. Dhinakar on December 4, 2001 acquitted all of them in the two cases. He ruled that TANSI property was not government property and so Jayalalithaa could not be accused of having bought government property. There was no specific law that barred a public servant from buying government property. The Code of Conduct, which required that Ministers should not buy government property, had no statutory force, Dhinakar said. According to him, the term "market value'' itself was "vague, uncertain and a matter of guesswork''. The trial Judge was not justified in using market value as the yardstick for concluding that there was a wrongful loss to the government.

Bharathi and Subramanian Swamy filed special leave petitions in the Supreme Court against the acquittal.

The final arguments commenced in the Supreme Court on September 3. As the arguments were coming to an end, Venugopal announced on September 19 that Jayalalithaa was prepared to return the TANSI properties to TANSI. There was, however, no reaction from Justices Rajendra Babu and Venkatrama Reddi on that day to the offer, and Venugopal continued his arguments. The hearings were adjourned to September 24.

There was a bigger surprise on September 23 when Sasikala filed an affidavit in the Madras High Court expressing her willingness to surrender the properties to TANSI. This affidavit was kept a secret. She said in the affidavit that Bharathi in his writ petition had sought a declaration that the purchase of TANSI properties was illegal. While she denied the allegations, she said it would be proper that the two properties bought in open tender be surrendered without seeking the return of the money paid. If any document was to be executed with TANSI for this, she was willing to do it, she said.

On September 24, a copy of Sasikala's affidavit was produced in the Supreme Court along with a memo stating the developments by Vinod Bobde, her counsel . But Justice Rajendra Babu and Justice Venkatrama Reddi called it "irrelevant'' to the proceedings under way. When the Bench asked Bobde when this affidavit was filed in the High Court, he replied, "Only yesterday.'' The arguments in the two cases concluded on September 26 and the Bench reserved orders.

Legal sources explained that the affidavit was irrelevant because it pertained only to Bharathi's writ petition pending in the High Court. Bharathi had prayed that the High Court set aside the sale of TANSI Foundry to Jaya Publications. So the offer would have no bearing on the proceedings in the Supreme Court, they said.

THE Crime Branch-Criminal Investigation Department (CB-CID) of the Tamil Nadu Police filed the charge-sheet in the Jaya Publications case on November 15, 1996. The charges were that the six accused, between October 1991 and December 1992, conspired and enabled Jaya Publications to purchase 3.07 acres of land with a superstructure measuring 2,698 square metres belonging to TANSI Foundry below the guideline value and that the building and machinery were undervalued.

According to Bharathi's counsel, the guideline value that prevailed on January 20, 1992 the day the government approved the sale to Jaya Publications was Rs.7.32 lakhs a ground. On the date of sale (May 29, 1992) the guideline value had increased to Rs.7.91 lakhs a ground. Jaya Publications had bought land belonging to Idhayam Publications at Guindy on September 22, 1991. Although Jaya Publications paid Rs.4.78 lakhs a ground to Idhayam Publications, it paid stamp duty accepting the guideline value of Rs.7.32 lakhs a ground. So this guideline was accepted by Jaya Publications, it was argued. So the guideline value at this time must have been Rs.7.32 lakhs a ground. The CB-CID, therefore, while making the calculation for the wrongful loss to the government, took the benchmark figure of Rs. 7.91 lakhs a ground that prevailed at the time of sale and calculated the loss for 55 grounds.

The CB-CID fixed the building value at Rs.53 lakhs, which was the price fixed by the Design Engineer, Public Works Department. But Jaya Publications paid Rs.3.01 lakhs for a ground and Rs.19 lakhs for the building. The State government also suffered losses in the stamp duty and registration fee payable. In all, Jaya Publications should have paid Rs.4.3 crores to the government but it paid Rs.1.8 crores. So the wrongful loss to the government was Rs.3.5 crores, the CB-CID said in its chargesheet.

Venugopal argued that Jaya Publications' offer was the highest, and hence there was no ``wrongful loss'' to the government or ``wrongful gain'' to Jayalalithaa. There was complete transparency in the entire transaction and the property was bought by Jaya Publications by competing in an open tender, Venugopal said.

AS TANSI Enamelled Wires was also incurring loss,the government decided on September 30, 1985 to sell the property. TANSI Enamelled Wires was officially closed on August 14, 1986. Its total extent of land was 0.63 acres, that is about 12. 5 grounds, and it had a superstructure of 1,500 sq m with machinery, tools and accessories. Advertisements were placed in the newpapers in October 1991 to dispose of the property. There were three offers. The highest was from R.R. Industries; which offered Rs.4.12 lakhs a ground. But the TANSI management rejected on December 2, 1991, it on the grounds that although it was higher than the Collector's valuation of Rs.3 lakhs a ground, it was less than the guideline value of Rs.7.32 lakhs a ground. So it was decided once again to release advertisements for the sale of the property.

There were four offers this time, and Sasi Enterprises' was one of them. Sasi Enterprises' initial offer was about Rs.4.4 lakhs a ground, that is, Rs.1,980 per sq.m. Kartheepan Tourist Bus Service quoted Rs.2,080 a sq m, that is, Rs.4.63 lakhs a ground. The offer of Metal Corporation was rejected because it did not confirm to the terms and conditions of the tender. Andavar Electric Stores was another tenderer. The TANSI Chairman called three tenderers for negotiations. Sasi Enterprises, allegedly the last, revised its offer. The TANSI Board pointed out that although the Collector had fixed the land value at Rs.3 lakhs a ground, Sasi Enterprises quoted Rs.4.63 lakhs and this was the highest offer. (But the offer of Rs.4.12 lakhs a ground made by R.R. Industries in the earlier round was rejected because it was less than the guideline value of Rs.7.32 lakhs a ground). So the CB-CID said there was a wrongful loss of Rs.66 lakhs to the government.

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