The Madras High Court's verdict in the TANSI and Pleasant Stay Hotel cases, which would be delivered later this month, will play a crucial role in the political future of former Tamil Nadu Chief Minister Jayalalithaa.
THE verdicts Justice N. Dhinakar of the Madras High Court is to deliver in the two TANSI cases and the Pleasant Stay Hotel case in the second half of November will have a huge bearing on the political future of former Chief Minister Jayalalithaa. Arguments in two of the three appeals filed by her against her conviction and consequent sentences by two lower courts came to a close on November 1. The two relate to the TANSI cases.
The Jaya Publications case and the Sasi Enterprises case, which together constitute the TANSI cases, and the Pleasant Stay Hotel case have been the focus of attention in Tamil Nadu for several weeks now, especially after the Supreme Court on September 21 struck down Jayalalithaa's installation as Chief Minister by Governor M. Fathima Beevi (on May 14) as "not legal and valid". Under Section 8(3) of the Representation of the People Act (RPA), Jayalalithaa was ineligible to contest the Assembly elections held in May. She was disqualified after Special Judge P. Anbazhagan convicted and sentenced her (on October 9, 2000) to three and two years' imprisonment in the Jaya Publications case and the Sasi Enterprises case respectively. These convictions were under the Prevention of Corruption Act (PCA) and the Indian Penal Code (IPC). Jayalalithaa and her friend Sasikala Natarajan were partners in these two firms, which bought property belonging to TANSI (Tamil Nadu Small Industries Corporation), a government undertaking.
On February 2, 2000, Special Judge V. Radhakrishnan convicted and sentenced Jayalalithaa to one-year's imprisonment in the Pleasant Stay Hotel case for her role in illegally granting exemption to the hotel in Kodaikanal in 1994 from building and hill area development control rules to enable the unauthorised construction of five additional floors.
If the High Court acquits her in all the three cases, she is free to contest the elections, and therefore to become Chief Minister. Alternatively, her period of imprisonment in the cases will have to be less than two years if she is to avoid disqualification. However, it is clear that she cannot be Chief Minister during the period she spends in jail in the event of any kind of sentence involving imprisonment.
The prosecution and defence arguments, which began before Justice Dhinakar on October 1, centred on these points: whether or not TANSI is a government undertaking; whether the money paid to TANSI was less than the guideline value/market value of the properties, which led to wrongful loss to the government; whether a public servant can buy government property (Jayalalithaa was Chief Minister when Jaya Publications bought the property in March 1992); and whether she attracted the provisions of Section 169 of the IPC, which bar a public servant from buying or bidding for certain property.
After the Dravida Munnetra Kazhagam (DMK) came to power in 1996 defeating Jayalalithaa's All India Anna Dravida Munnetra Kazhagam (AIADMK) in the elections, 48 corruption cases were filed against Jayalalithaa and former AIADMK Ministers.
The Crime Branch-Criminal Investigation Department (CB-CID) filed the charge-sheet against six persons in the Jaya Publications case on November 15, 1996 - 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 made a gain of more than Rs.3.5 crores. Thus a wrongful loss was caused to the government. The charge-sheet added that the State government also lost money because of the consequent reduction in the stamp duty and registration fees payable. It alleged that she "abused her official position at every stage" in the transaction although no public interest was involved.
These six persons were also arraigned as accused in the Sasi Enterprises case. The charge-sheet said Sasi Enterprises bought land, building and machinery belonging to TANSI Enamelled Wires at undervalued terms and that it was helped in this by the six persons, who entered into a conspiracy between 1991 and 1993. The machinery too was undervalued, it alleged. Jayalalithaa and Sasikala made a gain of Rs.66.11 lakhs in the process, the charge-sheet said. (Asif was acquitted in this case.)
All the six convicted in the Jaya Publications case and the five convicted in the Sasi Enterprises case appealed in the High Court against the verdicts. The four convicted, including Jayalalithaa, in the hotel case also went on appeal.
Arguing before Justice Dhinakar, Jayalalithaa's counsel K.K. Venugopal said TANSI had made seven attempts between 1986 and 1991 to sell the land. The Chennai Collector had fixed the land value at Rs.3 lakhs a ground (2,400 sq ft) when a portion of the TANSI Foundry land was alienated to the Tamil Nadu Sugar Cooperative Federation. Jaya Publications paid Rs.3.01 lakhs a ground to TANSI. So there was no loss.
Venugopal said the guideline value had no legal force and could not be taken as the basis to determine the loss. It was an open tender, and hence the price obtained should be taken as the correct value, he argued. The Income Tax Department had given a no-objection certificate for the sale. The TANSI property fell under Alandur village and not under Adyar, where the price of land was higher, he contended.
Defence counsel argued that the prosecution did not show a conspiracy. He denied that a plot to undervalue TANSI property originated on October 14, 1991, at a meeting at the Secretariat presided over by Jayalalithaa. A routine decision taken at a routine meeting was being painted as a conspiracy to cheat the government, he argued. He added that the prosecution had originally charged the accused with having bought the property at less than the guideline value but later changed it to market value which was not a standard phenomenon and varied from place to place, and from person to person.
Defence counsel said TANSI was the exclusive owner of its properties and the State government had nothing to do with them. The public corporation was an independent entity. It had the power to sell or hire its property to anybody. When Judge Dhinakar asked who the owner of TANSI was and who its shareholder were, Venugopal replied that it was a company wholly owned by the government and characterised it as a "private limited company in the public sector."
Vinod Arvind Bobde, who appeared for Sasikala, said the circumstances shown against her was that she lived with Jayalalithaa, and from that alone no conspiracy could be inferred. It was the officials and others in power who decided on the sale of the property, he contended.
Srinivasan's counsel M. Satyanarayanan took the stand that the decision to sell the land to Jaya Publications was a collective one that involved Jayalalithaa, the TANSI board of directors, a sub-committee of officials and other government officials. Although the board of directors took a collective decision to refer the sale to the government which cleared it, only Srinivasan was singled out and prosecuted.
Counsel for Mohammed Asif, K. Ashokan, said Asif, as a Minister, had not asked Industries Secretary Latika Padalkar to score out certain remarks made on the file relating to the sale of TANSI land.
C. Mani Shankar, counsel for Nagarajan, said his client did not consider four documents on other earlier sales in the same areas in fixing the market value for levying higher stamp duty as these documents were not within his knowledge. His non-consideration was not out of any sinister motive, counsel said.
N.T. Vanamamalai, who appeared for the sixth accused, said Karpoorasundarapandian was not at the October 14 meeting. Vanamamalai denied that Karpoorasundarapandian had contacted Finance Secretary S. Narayanan on the phone and asked him to send the file to the Chief Minister's office "as early as possible".
Special Prosecutor K.V. Venkatapathi replied to these arguments. He was assisted by advocates A. Balaguru, N.R. Ilango, Sunder Mohan and others. He asserted that at no point of time were the charges altered from the guideline value to market value. On the contrary, the prosecution had proved with two documents that the guideline value and the market value for that particular area at the relevant point of time were the same, that is Rs.7.32 lakhs. The trial court, therefore, observed that even deleting the term guideline value from the charges would not prejudice the accused. Only after understanding this did the accused defend themselves by marking various documents to compare the market values.
THE fixing of the price by the Madras Collector should not be taken as the basis for the transaction for three reasons, Venkatapathi said. They were: the fixing of Rs.3 lakhs as the price was made based on wrong data; the sale was between two government organisations; and it was a conditional sale - the Federation had to construct a 15,000 sq ft building for TANSI on a pro rata basis. Hence this valuation could not be the basis for a private and absolute sale, Venkatapathi argued.
He pointed out that TANSI was a government undertaking. The land was government land entrusted to TANSI. The six accused conspired between October 1991 and December 1992 to enable Jaya Publications to buy the property at a lower price, the Special Prosecutor said. Jayalalithaa presided over the review meeting held on October 14, 1991, which decided to sell the TANSI Foundry at an estimated value of Rs.1.5 crores, and another TANSI property at Ambattur for around Rs.1.45 crores. TANSI's decision taken in 1988 to parcel out the Foundry land and sell it in small plots was not considered at all. In its tender, Jaya Publications quoted a price of Rs.3.01 lakhs a ground. So the accused, knowing that the Collector's valuation could not be adopted for sale to a private party, did so to help Jaya Publications, he said.
Venkatapathi dismissed Jayalalithaa's claim that her signature in the sale agreement was forged. Justice Dhinakar grilled Venkatapathi on Jayalalithaa's averment that it was not her signature. When the Special Prosecutor cited the deposition of two prosecution witnesses, who were attestors to the sale agreement, the Judge said, "They merely say they fixed their signatures. They did not see her signing and they did not certify that it was her signature."
Quoting from Section 169 of the IPC, the Special Prosecutor said that Jayalalithaa, who was a public servant at the relevant point of time, was legally bound not to buy certain property.
The Code of Conduct prepared by the government also prohibited Ministers from purchasing government property. If there was any violation of the Code of Conduct the government could retrieve the property by filing a civil suit. Jayalalithaa was, therefore, legally bound not to purchase the TANSI property, he contended.
The court allowed Janata Party president Subramanian Swamy to assist the prosecution in the TANSI cases. Swamy was the original complainant in the cases. In his written submissions, he said the sale of TANSI land and buildings to Jaya Publications and Sasi Enterprises did not serve any public interest. Hence, Jayalalithaa, while holding public office, committed a criminal offence punishable under Section 13(1) (d) of the PCA, 1988, he argued. The arguments ran more or less on similar lines in the Sasi Enterprises case. N. Jothi appeared for Sasikala in this case.
The arguments in the Pleasant Stay Hotel case are slated to begin on November 9.
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