The end of a legal battle

Print edition : December 19, 2003

The Supreme Court's judgment upholding the acquittal of Jayalalithaa in the TANSI cases brings to a close a decade-long legal battle initiated by the Dravida Munnetra Kazhagam.

in Chennai

Chief Minister Jayalalithaa being greeted by a party member after the Supreme Court judgment in the TANSI cases.-BIJOY GHOSH

FOR seven years, the attention of the people and politicians of Tamil Nadu stood riveted on the two TANSI (Tamil Nadu Small Industries Corporation) cases - the Jaya Publications and the Sasi Enterprises cases. In September 1992, the Dravida Munnetra Kazhagam (DMK), headed by M. Karunanidhi, first raised the issue of corruption in a memorandum to Governor Bhishma Narain Singh, alleging that Jayalalithaa, who was then Chief Minister, had abused her office and violated the Code of Conduct for Ministers when she bought the government-owned TANSI's property. The two cases traversed a long way from the Metropolitan Magistrate's Court to the Special Court and the Madras High Court and finally the Supreme Court.

The spotlight turned on the Supreme Court after Justice S. Rajendra Babu and Justice P. Venkatarama Reddi reserved their orders in the two cases on September 26, 2002. After a gap of 14 months, perhaps the most excruciating period for Chief Minister Jayalalithaa because she was the first accused in both the cases and any unfavourable verdict could affect her political future, the Judges on November 24 upheld the High Court verdict acquitting Jayalalithaa.

There was instant jubilation outside Jayalalithaa's residence at Poes Garden and at the headquarters of the ruling All India Anna Dravida Munnetra Kazhagam (AIADMK) in Chennai. "It is entirely God's will. Thanks be to God," Jayalalithaa said. She and her confidante Sasikala Natarajan, who is the second accused in both the cases, then proceeded to offer prayers at a temple in Tirurvottriyur, on the outskirts of Chennai. There was no stopping the party leaders and cadre who, relieved of the tension, burst firecrackers and distributed sweets outside the AIADMK office on Avvai Shanmugam Road.

In the same neighbourhood, former Chief Minister Karunanidhi and his family and friends were mourning the passing of Union Minister "Murasoli" Maran, the previous day.

The DMK's legal wing secretary R.S. Bharathi was the prime mover in the legal action against Jayalalithaa and others.

Although the Supreme Court acquitted Jayalalithaa, the Judges' sharp observations that "she must atone" for buying the TANSI property "not only by returning the property to TANSI unconditionally" but by taking "steps to expiate herself" triggered a demand from the Opposition parties for her resignation.

Jubliant AIADMK supporters outside the party office in Chennai.-M. MOORTHY

The Communist Party of India (Marxist) was the first off the block to demand her resignation. The party sought it on two counts: the court's observations in the TANSI cases and another Supreme Court Bench's observation, while transferring to a Special Court in Bangalore the two "disproportionate wealth cases" against Jayalalithaa, that "there is strong indication that the process of justice is being subverted" in Chennai.

Justice Rajendra Babu and Justice Venkatarama Reddi said in the penultimate paragraph of their 52-page order in the TANSI cases: "... Good ethical behaviour on the part of those who are in power is the hallmark of a good administration and people in public life must perform their duties in a spirit of public service rather than by assuming power to indulge in callous cupidity... Irrespective of the fact whether we reach the conclusion that A-1 (Jayalalithaa) is guilty of the offences which she is charged or not, she must atone for the same by answering her conscience in the light of what we have stated not only by returning the property to TANSI unconditionally but also ponder over whether she had done the right thing in breaching the sport of the Code of Conduct and giving rise to suspicion that rules and procedures were bent to acquire the public property for personal benefit, though trite to say that suspicion, however, strong, cannot take (the) place of legal proof in a criminal case, and take steps to expiate herself."

The CPI(M) said in the editorial in its Tamil daily Theekkadir on November 25: "Jayalalithaa cannot feel happy over this verdict. It will be in the fitness of things if she understands the import of the judgment and resigns as Chief Minister." It pointed out that the Supreme Court talked about the rise of "suspicion that rules and procedures were bent to acquire the public property for personal benefit" and asked her to "atone" by "answering her conscience". It, therefore, said, "Jayalalithaa should accept moral responsibility (for her actions) and resign from the chief ministership." N. Varadarajan, State secretary of the CPI(M), made a similar demand.

Karunanidhi drew attention to the Supreme Court's observations that Jayalalithaa "in her anxiety to save her skin went to any length even to deny her signature on documents, which her auditor and other government officials identified", that "persons in public life are expected to maintain very high standards of probity", and that she must answer her "conscience". These words, according to him, constituted a stronger indictment than any punishment.

"I pity the gods," was the sarcastic sally from Vaiko, general secretary of the Marumalarchi Dravida Munnetra Kazhagam (MDMK), on Jayalalithaa's stand that her acquittal was "God's will". She had violated the spirit of the Code of Conduct and had no moral authority to continue as Chief Minister, Vaiko said.

Dr. S. Ramadoss, founder of the Pattali Makkal Katchi (PMK), said that returning the TANSI property alone would not amount to atonement.

Janata Party president Subramanian Swamy said that the AIADMK cadre had no reason to celebrate because it was not an "honourable acquittal". Swamy, an appellant in the Supreme Court, was the first to receive the sanction from Governor Dr. M. Channa Reddy in March 1995 to prosecute Jayalalithaa in one of the two cases. The Supreme Court order did not amount to exoneration, he said. "The two Judges have expressed anguish that despite the suspicion of Jayalalithaa having committed an offence and despite knowing that she was prepared to go to any length to `save her skin', they were constrained by the four corners of the legal system." He accused the DMK of conducting the case "very badly".

The Bharatiya Janata Party (BJP) maintained that Jayalalithaa need not resign because she was elected by the people even after the Special Court had found her guilty in the two cases.

Special Judge P. Anbazhagan in October 2000 convicted and sentenced Jayalalithaa to three years' and two years' rigorous imprisonment in the TANSI cases. She was unable to contest the Assembly elections in May 2001 after she was disqualified from contesting the elections. However, in a controversial action, Governor M. Fathima Beevi swore Jayalalithaa in as Chief Minister after the AIADMK won the elections although Jayalalithaa herself did not contest the polls. But the Supreme Court, on September 21, 2001, struck down Jayalalithaa's appointment and she stepped down.

Subsequently, Justice N. Dhinakar of the Madras High Court reversed the Special Judge's orders and acquitted Jayalalithaa and five others in the TANSI cases. This enabled her to contest a byelection and get elected in February 2002. She was installed as Chief Minister again.

JAYALALITHAA became Chief Minister for the first time in 1991 after the AIADMK defeated the DMK in the Assembly elections. On March 4, 1992, Jaya Publications, in which Jayalalithaa and Sasikala Natarajan were partners, bought land from TANSI Foundry Limited, a subsidiary of TANSI, which is a State government undertaking. On September 30, 1992, Sasi Enterprises, in which Jayalalithaa and Sasikala were again partners, bought land from TANSI Enamelled Wires, another TANSI unit. Both the properties were situated at the Guindy industrial estate in Chennai. When the purchase became public, the DMK was quick to sense that Jayalalithaa had committed an offence under Section 169 of the Indian Penal Code (IPC), which bars public servants from buying or bidding for certain (government) property. The party then began a relentless legal battle.

At an AIADMK conference in Madurai in June 1992, Jayalalithaa maintained that "there have been no mistakes or irregularities in Jaya Publications buying the TANSI land". She said that TANSI had been unable to sell the land for seven years. When tenders were invited for the third time in November 1991 and not "many people" were keen on buying it, Jaya Publications bought it at a price that was more than the "market value", she claimed.

On September 16, 1992, the DMK cadre, led by Karunanidhi, took out a procession in Chennai and presented to the Governor a memorandum alleging 18 instances of corruption, including the TANSI land deal, by the Jayalalithaa government, and sought his sanction to prosecute her. The Governor declined sanction.

R.S. Bharathi filed a writ petition in the Madras High Court in 1993 praying that the sale of TANSI property to Jaya Publications be cancelled as it involved the abuse of office. He thus became the original complainant in the TANSI cases. Bharathi 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 TANSI Foundry land in violation of Section 169 of the IPC and the Code of Conduct for Ministers.

In 1993, Subramanian Swamy presented a memorandum to Governor Channa Reddy and sought sanction from him to prosecute Jayalalithaa in the TANSI Foundry land deal and in a controversy regarding the import of coal. Swamy received the sanction in March 1995. In May 1996, the DMK headed by Karunanidhi returned to power and set about fulfilling its election promise to bring to trial all persons perceived to be corrupt during the Jayalalithaa regime. Nine cases of corruption were instituted against Jayalalithaa. 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. In the Sasi Enterprises case, it filed the charge-sheet on October 22, 1997. The six accused in both the cases were: Jayalalithaa (Accused-1); Sasikala Natarajan (A-2); former Chairman and Managing Director of TANSI T.R. Srinivasan (A-3); former Rural Industries Minister Mohammed Asif (A-4); former Special Deputy Collector (Stamps) S. Nagarajan (A-5); and Jayalalithaa's former Additional Secretary R. Karpoorasundarapandian (A-6).

One of the charges was that Jaya Publications and Sasi Enterprises had bought the two pieces of property at a price lower than the guideline/market value, and that had led to a wrongful loss of Rs.3.5 crores and Rs.66 lakhs respectively to the government. Since Jayalalithaa bought these two pieces of property when she was Chief Minister, she was charged under the Prevention of Corruption Act (PCA).

According to the CB-CID, the accused, between October 1991 and December 1992, conspired and enabled Jaya Publications to purchase 3.07 acres and a superstructure measuring 2,698 square metres belonging to TANSI Foundry below the guideline value, and the building and the machinery were undervalued. While the guideline/market value was Rs.7.32 lakhs a ground (2,400 sq ft), the land was sold to Jaya Publications at Rs.3.01 lakhs. Thus, the pecuniary advantage gained by Jaya Publications amounted to more than Rs.3.5 crores. This was a wrongful loss to the State government, the charge-sheet said. The government suffered losses also because of the consequent reduction in the stamp duty and the registration fee, it said. The charge-sheet said Jayalalithaa "abused her official position at every stage" although no "public interest" was involved in the transaction. The sale deed was executed on May 29, 1992, and the possession of the property was given the same day. She and others were charged under different Sections of the IPC, including 120-B (conspiracy) and 409 (criminal breach of trust by a public servant, or by banker, merchant or agent), and Sections 13(2) of the PCA read with 13(1)(c) and 13(1)(d). Importantly, she was charged under Section 169 of the IPC.

As a public servant, Jayalalithaa was not eligible to buy government property. By buying TANSI Foundry property, she violated Section 169 of the IPC and breached the provisions of the Code of Conduct for Ministers, the charge-sheet said. The Code of Conduct, originally drafted by the Centre, was adopted by the Tamil Nadu government and issued as a Government Order. The Code entails that Ministers should not buy government property.

In the Sasi Enterprises case, the charge-sheet alleged that Jayalalithaa and Sasikala obtained a monetary advantage of Rs.66.11 lakhs because Sasi Enterprise bought land belonging to TANSI Enamelled Wires at less than the guideline value. It said that newspapers carried advertisements on October 10, 1991 with an offer to sell the land, buildings and machinery belonging to TANSI Enamelled Wires. There were three responses and all of them were rejected on the grounds that the offers made were below the guideline value. Another advertisement was run on December 12, 1991, and there were four offers, including one from Sasi Enterprises.

The charge-sheet alleged that the six accused entered into a criminal conspiracy between 1991 and 1993 and helped Sasi Enterprises in the purchase of the land, buildings and machinery of TANSI Enamelled Wires by undervaluing them. Although the guideline value of the land was Rs.90.53 lakhs, the amount mentioned in the sale deed was only Rs.53.04 lakhs. In the case of the building, the sale deed was executed at Rs.16.25 lakhs against the guideline value of Rs.25.66 lakhs. Besides, the machinery was also undervalued, the charge-sheet said. The State government also suffered losses because of the consequent reduction in the registration fee and the stamp duty, it said. Jayalalithaa and Sasikala gained Rs.66.11 lakhs in the process, which was a wrongful loss to the government, according to the charge-sheet.

On June 10 and July 19, 1999, Special Judge P. Anbazhagan framed charges against the six accused. Jayalalithaa went to the High Court, asking for her discharge in both the cases. On January 13, 2000, Justice S. Thangaraj of the High Court set aside the order of the Special Court. He said that since the Code of Conduct barring Ministers from buying government property was not a statute, any breach of it would not amount to an offence under Section 169 of the IPC. The DMK government challenged this in the Supreme Court. It "erased" the ruling of Justice Thangaraj and ordered that the trial in the two cases continue and conclude as per law. So the trial resumed in Anbazhagan's court. In his orders on October 9, 2000, Anbazhagan ruled that "the first accused" had dishonestly abused her office and bought TANSI property at less than the guideline value. He ordered the confiscation of the property. All the six accused were convicted and sentenced to imprisonment.

JAYALALITHAA and the other accused appealed in the High Court. On December 4, 2001, Justice N. Dhinakar acquitted all the six in both the cases. His important findings, in two separate judgments, were: TANSI property was no government property and so there was no question of Jayalalithaa having bought government property; there was no specific law that barred a public servant from buying property; the Code of Conduct had no statutory force; 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"; and so forth.

Challenging these judgments, Bharathi and Subramanian Swamy filed special leave petitions in the Supreme Court. Bharathi said his appeal raised important questions of law on whether a Chief Minister or any public servant, while in office, could purchase property belonging to the government; whether the Madras High Court was right in deciding that TANSI property was not government property; and whether the High Court was right when it ruled that the Code of Conduct for Ministers did not have the force of law.

T.R. Andhyarujina, senior advocate who appeared for Bharathi, told the Supreme Court that 3.26 acres out of 4.811 acres of TANSI Foundry land was meant to be sold specifically to Tamil Nadu Sugar Federation Limited, another government organisation. For that purpose, the Collector of Chennai fixed the value at Rs.3 lakhs a ground. During a meeting of officials, held on October 14, 1991 and presided over by Chief Minister Jayalalithaa, the proposal to sell 3.26 acres of TANSI Foundry land to the Sugar Federation was approved. Contrary to this decision, A-3 (T.R. Srinivasan) called for tenders on November 21, 1991, counsel said. He argued that the real motive was to sell the land to Jaya Publications at Rs.3 lakhs a ground by using the valuation fixed by the Collector.

Counsel said that by inviting tenders A-3 had abused power, which would attract the provisions of Section 13(1)(d)(ii) of the PCA. The tender was intended to facilitate the participation of Jaya Publications, of which Jayalalithaa was a partner, and the conspiracy to purchase the property by her firm began at this point, counsel argued. Thus the accused had committed the offence of criminal conspiracy besides the offence of criminal misconduct, under Sections 13(1)(c) and (d) of the PCA, and offences under Sections 409 and 169 of the IPC, he said.

There was pecuniary loss to the government in the sale of TANSI Foundry land to Jaya Publications, Andhyarujina argued. About 15 days prior to the acceptance of Jaya Publications' offer of Rs.3.01 lakhs a ground, R.R. Industries' offer to buy the adjacent land belonging to TANSI Enamelled Wires at Rs.4.12 lakhs a ground was rejected since it was less than the guideline value of Rs.7.32 lakhs. But while accepting Jaya Publications' offer of Rs.3.01 lakhs, this reasoning was reversed. In a Board resolution, counsel said, A-3 had noted that although the offer of Jaya Publications was less than the guideline value of Rs.7.32 lakhs, it was marginally higher than the Collectors' valuation by Rs.1,000. Thus, according to the senior counsel, the accused had also committed the offence of criminal breach of trust.

N. Natarajan, senior advocate who appeared for Bharathi, argued that there was a conspiracy among the public servants concerned in the case.

He advanced arguments based on the introduction of the following Sections in the PC Act of 1988:

Section 2(c)(viii) includes a new definition of a public servant. It says that a "public servant" means "any person who holds an office by virtue of which he is authorised or required to perform any public duty".

The phrase "public duty" in Section 2(b) has been defined as "a duty in the discharge of which the State, the public or the community at large has an interest".

In Section 13 (d), a new facet of the offence of criminal misconduct has been included in sub-clause iii, he said. According to it, a public servant is said to commit the offence of criminal misconduct if he, "while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest".

Natarajan asserted that if any public servant, while holding office, obtains any valuable thing or pecuniary advantage, it has to be necessarily for public interest and public interest alone. If it is not so, it would attract the offence of criminal misconduct under Section 13(d)(iii), he said. Selling TANSI property at a lower price is certainly not in pursuit of any public interest, the senior counsel said. Therefore, a Chief Minister who consciously bought TANSI property for the benefit of her firms was guilty of misconduct under Section 13(d)(iii) of the PCA, he contended.

Natarajan said abuse of power was evident from the fact that A-1 was both the buyer and the seller.

Advocates R. Mohan and R. Shanmugasundaram also appeared for Bharathi.

Swamy, who argued in person, said that the land was to be originally parcelled out into plots and sold to fetch higher prices. But this decision was not implemented. The entire sale, therefore, was against public interest and this caused loss to the government, he contended.

K.K. Venugopal, senior advocate, who appeared for Jayalalithaa, argued that the land was purchased in open auction and Jaya Publications' offer was the highest. There was, therefore, no illegality in the transaction. If Section 169 of the IPC, Venugopal argued, were to attract an offence, there must be prohibition by law on the purchase of certain property by public servants. The prohibition that the other side alleged was a prohibition in the Code of Conduct. But this prohibition not being a law, there was no prohibition in law on a public servant purchasing government property. The so-called offence could at best be only an unethical act and not a criminal offence. Besides, the Code of Conduct was not applicable to Chief Ministers, he said.

TANSI property, Jayalalithaa's counsel argued, was the property of a company. It was a company owned by the government. But TANSI was an independent entity and its property could not be government property, he contended.

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