A scheme that wasn’t

Print edition : October 31, 2014

Jaya Publications building in the Guindy Industrial Estate in Chennai. A file picture. Photo: S.R. Raghunathan

AMONG the several ingenious devices invented by the accused in the “disproportionate wealth” case to explain away their ill-gotten assets, what took the cake was a deposit scheme floated by Jaya Publications to canvas subscribers for its daily Namadhu MGR. Jaya Publications, in which Jayalalithaa and her associate Sasikala were partners, claimed that the deposit scheme, which attracted thousands of applicants, fetched about Rs.14 crore as revenue for the company. This amount should be taken into account as lawful income, they said.

The accused produced before the Special Court the original applications in 19 volumes, said to have been submitted by about 9,000 subscribers and presented 31 witnesses to support their claim. These defence witnesses included K. Rajendran, an agriculturalist, who deposited Rs.15,000 with Namadhu MGR and was getting five copies of the newspaper every day free of cost; D. Nagarajan, a bus conductor, who deposited Rs.12,000; A. Sekar, a graduate engineer, and so on. However, according to Judge John Michael D’Cunha, all the witnesses gave “a stereotyped evidence” that they were in the habit of reading Namadhu MGR and they deposited money ranging from Rs.12,000 to Rs.18,000 (in multiples of Rs.3,000) to become its subscribers and that they were supplied with three to six copies of the newspaper every day.

Judge D’Cunha also said in his judgment that what emerged from the evidence of the defence witnesses was that “the story of the deposit scheme canvassed by the accused has taken birth only after the filing of the charge sheet” against Jayalalithaa, Sasikala and two others on June 4, 1997. “There is not even a stray evidence to suggest that the said deposit scheme was in circulation any time before the registration of the criminal case against the accused,” said Judge D’Cunha.

Indeed, in his 1,136-page judgment, D’Cunha has devoted 41 pages to excoriate the scheme and also hold it up to ridicule for the hare-brained manner in which the “fabricated” application forms were given an antique look. Judge D’Cunha said: “Even the naked eye of a common, ordinary man could find out that the entire bulk of applications produced before this court are nothing but sheets of paper kept in sunlight or exposed to smoke so as to give them an appearance of old, used papers but the ink used on the said sheets for writing the names and other details appears to be so fresh and recent, belying the very claim of the accused that the said applications were obtained during the check period.”

The judge used strong language to denounce the testimony of a defence witness with regard to the deposit scheme. “He is the star witness of the accused but has turned out to be an utter liar and a false witness who has no regard for truth,” the judge said. “He has changed his version at every stage of the proceedings. Even otherwise, the circumstances brought out in the evidence undoubtedly point out that he is propped up only to create a false defence for the accused,” the judge said.

In the assessment of A. Saravanan, a young advocate who appeared for K. Anbazhagan, treasurer, Dravida Munnetra Kazhagam (DMK), who was an intervener in the case, Judge D’Cunha could see through the deposit scheme. The prosecution pointed out how the documents, that is, the application forms from subscribers, were not trustworthy. Besides, the prosecution pointed out how the accused had first claimed that the application forms had been lost but had produced them later. Saravanan said that approval from the Reserve Bank of India (RBI) was needed to float a deposit scheme but no such approval had been obtained from the RBI for this scheme. So, it was an illegal scheme, he added. The judge, therefore, rejected the arguments of the accused and held that this amount of about Rs.14 crore was an unexplained income, said Saravanan.

Curiously, as Judge D’Cunha said, even as late as 2001, the accused appeared to have an explanation to the Income Tax officials for the non-production of these application forms, counterfoils of receipts, etc. The accused said the application forms and counterfoils could not be produced because they had been kept in a Tata Sumo vehicle parked in front of a hotel and that they had gone missing.

They said a complaint had been lodged (with the police) in this regard but the copy of the complaint was not forthcoming, the judge said. Surprisingly, the accused themselves brought the original application forms from the Income Tax Department office in 2012.

The judge said that from the evidence given by the defence witnesses, the story of the deposit scheme was born only after the filing of the charge sheet against the accused. “There is nothing in the entire evidence indicating that the accused had declared the said deposit before the Income Tax authorities any time during the check period,” the judge said. The existence of the said scheme was brought to light only in 1998 in the returns filed on behalf of the said firms.

“It is only after the filing of the charge sheet (on June 4, 1997) that the accused seem to have masterminded” this defence with the “active connivance” of a defence witness “in a bid to offer an explanation for the huge amount of unaccounted money found” with Jayalalithaa, the judge said.

T.S. Subramanian

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