fline

India's National Magazine
From the publishers of THE HINDU

Vol. 14 :: No. 25 :: Dec. 13 - 26, 1997


THE STATES

No respite

For the past one year, Jayalalitha, facing serious corruption charges, has been busy fighting the cases against her through a series of writ petitions in the Madras High Court.

T.S. SUBRAMANIAN
in Chennai

EIGHTEEN months after criminal proceedings were initiated against former Tamil Nadu Chief Minister Jayalalitha and a number of her ministerial colleagues on charges of corruption, the trial of the All India Anna Dravida Munnetra Kazhagam (AIADMK) general secretary and others is yet to take off. Of the nine cases of corruption in which Jayalalitha, some former Ministers and legislators and senior Indian Administrative Service (IAS) officers, besides her close friend Sasikala Natarajan, figure as accused, four have reached a crucial stage. The State police have filed charge-sheets against the accused before Special Courts dealing with these cases. The Special Judges have, however, been restrained from proceeding further with these cases since a batch of petitions challenging the appointment of the Special Judges are pending before the Madras High Court.

The six cases in which charge-sheets have been filed relate to the purchase of properties by Jaya Publications and Sasi Enterprises, the acquisition of properties disproportionate to known sources of income, the relaxation of rules to benefit the Pleasant Stay Hotel at Kodaikanal, the purchase of coal by the Tamil Nadu Electricity Board (TNEB) and the purchase of colour television sets for community viewing in villages. As for the three remaining cases - the "Meena Advertisers", "granite quarrying lease" and "Immunity Scheme" cases - investigation is still incomplete.

The nine cases apart, there are 39 cases in which Sasikala Natarajan, former Ministers and senior IAS officers face corruption charges. These are in various stages of investigation. All the cases, except one, are being investigated by two wings of the State police - the Directorate of Vigilance and Anti-Corruption (DVAC) and the Crime Branch-Criminal Investigation Department (CB-CID). The "immunity scheme" case is being investigated by the Central Bureau of Investigation (CBI).

The Special Courts trying these cases have framed charges in two of the six cases in which Jayalalitha is among the accused. The two are the "Pleasant Stay Hotel" and "disproportionate wealth" cases. The Madras High Court, however, by an order on June 17, 1997, directed the three Special Judges trying these and other cases of corruption against the former Chief Minister and her associates not to record evidence or examine witness until a batch of writ petitions challenging the validity of the appointment of the Special Judges is disposed of. In other words, the three Special Judges cannot conduct trial but can proceed up to the stage of framing charges against the accused.

VINO JOHN
Jayalalitha arriving at the Special Court in Chennai.

Justice R. Jayasimha Babu, who passed the High Court order, referred the writ petitions to the first Division Bench, comprising Chief Justice Manmohan Singh Liberhan and Justice D. Raju. The Division Bench is hearing arguments relating to the validity of the special judges' appointment.

ALL these 48 cases relate to the period June 1991 to May 1996, during which Jayalalitha was the Chief Minister. In the elections held in April-May 1996 the Dravida Munnetra Kazhagam (DMK) inflicted a crushing defeat on the AIADMK. The DMK Government led by M. Karunanidhi set about redeeming the ruling party's election promise to bring to trial all persons perceived to be corrupt during the Jayalalitha regime. The CB-CID and the DVAC began investigating numerous charges of corruption against Jayalalitha, former AIADMK Ministers, IAS officers and others. Jayalalitha herself was arrested on December 7, 1996 from her Poes Garden residence in Chennai in the 'colour television case' and remanded to judicial custody. She was released on bail on January 3, 1997. Several AIADMK Ministers were also arrested and later released on bail. (Frontline, December 26, 1996 and January 24, 1997)

For the past year, Jayalalitha has been busy fighting the cases against her through a series of writ petitions in the High Court. She first challenged the validity of the sanction granted by the State Governor to prosecute her, but the High Court dismissed her petition. She has gone on appeal. Her petition questioning the validity of the appointment of Special Judges and similar petitions filed by some other accused are being heard.

In the six cases that are ready for trial by the Special Courts, Jayalalitha and the other accused have been charged with offences under Sections of the Indian Penal Code (IPC). These include 120-B (conspiracy), 109 (abetment), 420 (cheating) and 409 (breach of trust). Besides, they face charges under the Prevention of Corruption Act (PCA).

According to the charge-sheet filed before Special Judge-III P. Anbazhagan on June 4 in the "disproportionate wealth" case, Jayalalitha and three of her associates acquired assets worth Rs.66.65 crores. This was "disproportionate to her known sources of income." When she was Chief Minister from 1991 to 1996 Jayalalitha drew a nominal salary of one rupee a month. Sasikala Natarajan, her nephew V.N. Sudhagaran and sister-in-law J. Ilavarasi are the other accused.

The assets include large farm houses and bungalows in Chennai and its suburbs, vast tracts of agricultural land in many parts of Tamil Nadu, a farm house in Hyderabad, a tea estate in the Nilgiris, jewellery, cash in bank accounts, investments in financial firms and industrial sheds in Chennai.

The DVAC has charged Jayalalitha and others with offences under the PCA and the IPC. The PCA is generally applicable only to public servants. Leading criminal lawyers, however, said that any person who had connived or abetted or conspired along with Jayalalitha to commit the alleged offence could also be constructively liable, whether they were public servants or not.

In another development, on October 23, 1997 the Chief Judge, Court of Small Causes, City Civil Court, Chennai, ordered the attachment of 77 immovable properties held by Jayalalitha, Sasikala, Sudhagaran and Ilavarasi. These properties were valued at Rs.3.21 crores and they included about 1,000 acres of irrigated land in different parts of the State. The DVAC said that its further investigation in the "disproportionate wealth case" indicated that Jayalalitha and the other three accused had bought these 77 properties.

On October 24, 1997, the CB-CID filed a charge-sheet in the "colour television sets case" against Jayalalitha, former Local Administration Minister T.M. Selvaganapathy, former Finance Minister V.R. Nedunchezhiyan, Sasikala and seven others. The seven included N. Haribhaskar (former Chief Secretary of Tamil Nadu), H.M. Pandey and M. Sathiamoorthy, all IAS officers, Selvaganapathy's Additional Personal Assistant K. Janardhanam, Sasikala's relative S.R. Bhaskaran, S. Duraiswamy, an associate of Pandey and Sathiamoorthy and S. Muthukumaraswamy. According to the charge-sheet, the amount involved was Rs. 10.6 crores.

Jayalalitha and Selvaganapathy, the charge-sheet alleges, conspired in July 1995 to swindle crores of rupees by taking advantage of a government scheme to provide colour television sets to villages. Although as much as Rs.75 crores was involved in buying 45,302 television sets, the Television Approval Committee did not follow the open tender system as is done normally in purchases involving such high amounts. Instead, it followed the limited tender system. The committee evaluated products from only six television manufacturing companies.

The charge-sheet says that Jayalalitha decided on the purchase of TV sets at a meeting of officials held at her residence on November 30, 1995, a bandh day. The objections of the Finance Department detailed by Finance Secretary P.V. Rajaraman were overruled. She decided to approve the purchase of 45,302 sets at a (flat) rate of Rs.14,500 each. The five brands that were supplied were BPL, Solidaire, Uptron, Keltron and Videocon. According to the charge-sheet Nedunchezhiyan twice failed to point out to Jayalalitha the objections of Rajaraman but approved the proposal at her instance on December 11, 1995. The Government Order was issued the next day, the charge-sheet says.

According to the charge-sheet, the television companies made the following payments to seven of the accused: Selvaganapathy - Rs.6.60 crores, Sathiamoorthy - Rs.1.38 crores, Pandey - Rs.1.05 crores, Janardhanam - Rs.38.56 lakhs, Haribhaskar - Rs.35 lakhs, Bhaskaran - Rs.30 lakhs; and Duraiswamy - Rs.7.35 lakhs. The charge-sheet says that Jayalalitha obtained pecuniary advantage to the tune of Rs.10.16 crores in favour of the other accused.

On October 22, the CB-CID filed the charge-sheet in the case relating to Sasi Enterprises, in which Jayalalitha and Sasikala were partners. The case pertains to Sasi Enterprises' purchase of property belonging to a unit of the State-owned Tamil Nadu Small Industries Corporation (TANSI). The charge-sheet alleges that Jayalalitha and Sasikala obtained monetary advantage to the extent of Rs. 66.11 lakhs in this transaction because Sasi Enterprises bought the properties at prices below their guideline value. The other accused in the case are: former Chairman and Managing Director of TANSI T.R. Srinivasan, former Rural Industries Minister Mohammed Asif, former Special Deputy Collector (stamps) S. Nagarajan and Jayalalitha's former Additional Secretary R. Karpoorasundarapandian.

According to the charge-sheet, newspapers carried advertisements on October 10, 1991 with an offer to sell 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 properties' guideline values. Another advertisement was run on December 12, 1991 and there were four offers, including one from Sasi Enterprises. The charge-sheet says that Srinivasan leaked out to Sasi Enterprises the offers quoted by the other three intending purchasers. On the basis of that information, the charge-sheet says, alterations were made in the offer made by Sasi Enterprises so that it quoted the highest price of Rs.79,54,650.

The charge-sheet alleges that the six accused entered into a criminal conspiracy between 1991 and 1993 and helped Sasi Enterprises in the purchase of 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. The machinery had been undervalued as well. The State Government also suffered losses because of the consequent reduction in registration fee and stamp duty. Jayalalitha and Sasikala gained Rs.66.11 lakhs in the process, the charge-sheet says.

It adds that the accused had committed offences under Sections 120-B (criminal conspiracy), 109 (abetment), 420 (cheating), 409 (breach of trust) and 34 (acts done by several persons in furtherance of a common intention) of the IPC. They also violated Section 13 (2) read with 13 (1) (c) of the PCA. Section 13 (2) reads: "Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine." Section 13 (1) (c) reads: "A public servant is said to commit the offence of criminal misconduct if he dishonestly misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do."

As a public servant, Jayalalitha was not eligible to buy government property. By buying the TANSI property, she violated Section 169 of the IPC and breached the provisions of the Code of Conduct for Ministers, the charge-sheet says.

In the "coal case", Jayalalitha, Nedunchezhiyan and former Electricity Minister S. Kannappan are among the accused. The eight other accused include senior IAS officers and top officials of the TNEB. They are former Chief Secretary T.V. Venkataraman, Haribhaskar, who was then Chairman of the TNEB, 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. The CB-CID filed the charge-sheet on April 2, 1997.

According to the charge-sheet, the accused entered into a criminal conspiracy some days before March 21, 1992 to import coal for the TNEB and to enable the suppliers to gain financial advantage in the deal. It said that the accused had caused a wrongful loss of Rs.6.50 crores to the TNEB. Although Nedunchezhiyan knew about the objections raised by Public Works Department Secretary V. Sundaram, he cleared the proposal for the import of coal. Kannappan, who was aware of the objections, approved the tender. Jayalalitha authorised the issuance of the Government Order for importing coal although she was also aware of the objections.

The accused have been charged with offences under Sections 120-B and 409 of the IPC and Section 13 (1) (a) and (d) read with Section 13 (2) of the PCA.

In the "Jaya Publications case", the CB-CID filed a charge-sheet on November 15, 1996. It says that Jaya Publications, in which Jayalalitha and Sasikala were partners, bought 3.07 acres of land and a building belonging to TANSI at a price much below the market rate and made more than Rs.3.5 crores in this transaction. Jayalalitha "abused her official position at every stage" and bought the property although no public interest was involved, the charge-sheet adds. The sale deed was executed on May 29, 1992 and the possession of the property was given the same day.

The other accused are former Chairman and Managing Director of TANSI T.R. Srinivasan; former Rural Industries Minister Mohammed Asif and former Special Deputy Collector (Stamps), Chennai, S. Nagarajan. The charge-sheet says that on November 30, 1992, the Sub-Registrar, Adyar, Chennai, sent the document to Nagarajan for fixing the market value of the land and for collecting the deficient stamp duty because the sale price of Rs.3.01 lakhs per ground (an area of 2,400 square feet) was much below the guideline value of Rs.7.91 lakhs. But Nagarajan passed an order fixing the market value at Rs.3 lakhs a ground. Asif directed then Industries Secretary Latika D. Padalkar to remove the designation "Chief Minister" from the circulated note. The Industries Secretary went on leave. Later, Asif intentionally aided Jayalalitha by approving the proposal to sell the property to Jaya Publications, the charge-sheet says.

In the "Pleasant Stay Hotel case", the DVAC filed a charge-sheet on January 18, 1997. The case relates to the relaxation of building rules by the Jayalalitha Government to the advantage of the hotel at Kodaikanal and its legalisation of the hotel's "unauthorised" construction of five of its floors through two Government Orders. The hotel was permitted only to build the ground floor and the first floor. It, however, constructed seven floors, claiming that the first five floors formed the basement and that the sixth and seventh floors were the ground and first floors.

Besides Jayalalitha, the other accused in this case include Selvaganapathy, Pandey, the hotel's executive director Rakesh Mittal, and chairman-cum-managing director Palai Shanmugam.

The CBI is investigating the "immunity scheme case", which relates to Jayalalitha's alleged receipt of a remittance of $ 300,000 in December 1991 under the Immunity Scheme of the Union Finance Ministry. According to the officials investigating the case, Jayalalitha, who was a public servant (Chief Minister) when she received the money, is not entitled to immunity under the scheme and that she could be prosecuted under the PCA. The CBI has not yet filed a charge-sheet.

The "Meena Advertisers case" relates to the Jayalalitha Government's "waiver" of dues amounting to Rs.2 crores from Meena Advertisers, which was the sole advertising agency under a contract during the South Asian Federation (SAF) Games held in Chennai in January 1995. Jayalalitha is an accused in this case, but the charge-sheet has not been filed yet.

In the "granite quarrying case", according to CB-CID officials, about Rs.39 crores was allegedly collected as bribe. Jayalalitha, former Industries Minister M. Chinnaswamy and Chairman-cum-Managing Director, Tamil Nadu Minerals Limited (TAMIN), A.N. Dyaneswaran, are among the accused. The charge-sheet has not been filed yet. Dyaneswaran and Chinnaswamy are in judicial custody.

According to police officials who are investigating the case, government lands were leased out for quarrying granite without collecting lease money. This was despite objections from District Collectors, the Director of Geology and officials of the Forest Department. Although these objections were clearly made known in the files of the Industries Department, Chinnaswamy cleared the proposals of the high-level committee headed by Dyaneswaran to lease out land.

ATTENTION is now focussed on Justice Liberhan and Justice Raju, who are hearing the writ petitions challenging the constitutional validity of the appointment of the three Special Judges. According to Public Prosecutor R. Shanmugasundaram, a draft notification on the appointment of Special Judges was prepared by the High Court and sent to the Tamil Nadu Government. On the basis of this notification, the Government issued a G.O. on April 30, 1997, appointing three Special Judges. Shanmugasundaram said that this was done because the Principal Sessions Judge who was earlier dealing with these cases was overburdened with work. Forty-eight cases, which were in various stages of investigation, were transferred to the special courts. The Special Judges appointed were S. Sambandham, V. Radhakrishnan and P. Anbazhagan, all holding the rank of District Judges.

The Special Judges were appointed under Section 3 of the Prevention of Corruption Act. Section 3 (1) reads: "The Central Government or the State Government may, by notification in the official Gazette, appoint as many special judges as may be necessary for such area or areas or for such a case or a group of cases as may be specified in the notification to try the following offences, namely: (a) any offence punishable under this Act; (b) any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in clause (a)." Section 3 (2) reads: "Any person shall not be qualified for appointment as a special judge under this Act unless he is or has been a Sessions Judge or an Additional Sessions Judge or an Assistant Sessions Judge under the Code of Criminal Procedure, 1973 (2 of 1974)."

Jayalalitha and former AIADMK Ministers Nedunchezhiyan, Selvaganapathy, K.A. Sengottaiyan, V. Sathiamoorthy and A.M. Paramasivam challenged Section 3 (1) of the PCA under which the Special Judges were appointed and the transfer of cases to them. Advocate Rajiv Dhawan, who appeared for Selvaganapathy, argued that under Article 233 of the Constitution, there must be specific consultation with the High Court before appointing Special Judges, but no consultation was made in this case. The appointment of judges was a mala fide exercise of power, Rajiv Dhawan contended.

Senior counsel for the Tamil Nadu Government, N. Natarajan, asserted that the High Court was consulted in the appointment of the Special Judges and the transfer of cases to their courts. As proof, he produced the correspondence between the High Court and the Government. Natarajan added that the G.O. was issued only after the draft notification was received from the High Court.

Additional Solicitor-General of India G. Masilamani argued on November 13 that there was no legal infirmity in grouping cases of a similar nature and having them tried before a Special Judge. Such a procedure did not create a "super speedy trial" or "regime trial" as sought to be made out by the petitioners. A speedy trial was a part of the constitutional right, guaranteed under Article 21 of the Constitution, he said.

On October 1, 1997 Justice E. Padmanabhan of the Madras High Court dismissed as not maintainable three writ petitions filed by Jayalalitha. These challenged the sanction granted by State Governor M. Fathima Beevi to the Tamil Nadu Government to prosecute Jayalalitha in the "TANSI" (Jaya Publications and Sasi Enterprises), "Pleasant Stay hotel" and "disproportionate wealth" cases. Justice Padmanabhan said that the Governor had independently applied her mind to every aspect of the matter. Besides, she had granted sanction on the basis of a report of an Additional Inspector-General of Police (Crime Branch), which was prepared after investigation. Jayalalitha has appealed against this order.


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