Investigations in the Ashok Jain case have reached a critical stage, but the E.D. has been unable to interrogate him.
THE Enforcement Directorate's investigations into charges of violations of the Foreign Exchange Regulation Act (FERA) by Ashok Kumar Jain, Chairman of Bennett, Coleman & Co. Ltd, have reached a critical stage. The investigations have, however, been hampered by the E.D's inability to interrogate Jain. Section 41 of FERA requires that a show cause notice be issued to an accused within a year of the commencement of a probe. The investigation against Jain began on January 4, 1997, when E.D. officials raided his home and seized documents that they said incriminated him. These documents will have to be returned to him if the E.D. fails to frame charges before January 3, 1998.
Over the past 11 months, the E.D. has repeatedly tried to summon Jain to its offices for interrogation. He has avoided this on health grounds. When he was admitted to the All India Institute of Medical Sciences (AIIMS) in Delhi, the E.D. attempted to interrogate him there - without success. Jain is now attending to his business activities. In fact, during the political impasse in Delhi he is said to have worked to broker a compromise between the Congress(I) and the United Front.
Jain has filed cases in various courts, including one that challenges the E.D. probe on the grounds that it is "vexatious and motivated". He has asked for a stay on investigations by the E.D. Some of these are pending disposal.
While a Delhi sessions court denied Jain anticipatory bail, the Delhi High Court ruled that the E.D. could arrest him after obtaining clearance from a specially-constituted medical board.
Dismissing Jain's petition for anticipatory bail, Additional Sessions Judge M.A. Khan observed: "The allegations against the petitioner being of very grave and serious nature, the grant of anticipatory bail to the accused will certainly hamper proper investigation. The need for providing medical care and attention to the petitioner in view of his past medical history will be taken care of by the department or even by the jail authorities in the event of his arrest."
The E.D. filed a special leave petition in the Supreme Court challenging the High Court order requiring clearance from a medical board before arresting Jain. It is being heard by a Bench comprising Justices G.N. Ray and G.B. Pattanaik; in an interim order, the Bench restrained Jain from leaving India.
The E.D. has been unable to obtain access to Arun Kumar Bajoria, a key witness. During a raid at the house of Keshav Bangur, another witness, the E.D. recovered documents that allegedly indicated that Bajoria acted as a conduit between Jain and Bangur in a deal involving shares of the Bank of Rajasthan. In a statement he gave the E.D., Bangur confirmed Bajoria's role in allegedly remitting the equivalent of Rs.4 crores in Ashok Jain's foreign account through hawala channels. Bangur, who was arrested by the E.D. and kept under judicial custody, has since been released.
Bajoria obtained anticipatory bail from the Calcutta High Court. Although the Supreme Court vacated Bajoria's bail on an appeal by the E.D., Bajoria has failed to respond to the E.D's summons. It appears that there are problems of coordination between the E.D's zonal offices in Delhi and Calcutta in the matter of arresting Bajoria.
AN Independent Review Committee (IRC), set up by the I.K. Gujral Government to make recommendations on the structure and functioning of investigative agencies such as the Central Bureau of Investigation (CBI) and the E.D, submitted its report on November 18. Another report on the subject, prepared by former Home Secretary and former Governor of Assam L.P. Singh, was submitted to the Supreme Court in a sealed cover.
The IRC was set up on the directions of the Supreme Court, which is hearing the submissions of Anil Divan, amicus curiae, on how to ensure the autonomy of these two agencies which have been investigating high-profile cases. A Division Bench comprising Chief Justice J.S. Verma and Justices S.C. Sen and S.P. Bharucha is expected to give its orders by December 19 before Justice Sen retires.
The IRC was chaired by former Cabinet Secretary B.G. Deshmukh. Its other members were N.N. Vohra, Principal Secretary to Prime Minister Gujral, and S.V. Giri, Member, Central Vigilance Commission (CVC). Deshmukh is Chairman of TimesBank, promoted by Bennett, Coleman & Co. Ltd. This raises questions of conflict of interest.
The IRC report, a copy of which is available with Frontline, recommends that a committee headed by the CVC and including the Home Secretary, Secretary (Personnel) and the Revenue Secretary choose the head of the E.D., subject to approval by the Appointments Committee of the Cabinet. It recommends that his or her tenure be at least two years and that the post of Director be upgraded to that of an Additional Secretary. The incumbent, M.K. Bezboruah, of the rank of Joint Secretary, has completed two years on the job.
The IRC wants the Directorate to be made more accountable. It wants the Union Govern-ment to supervise effectively the E.D., with the Revenue Department conducting regular reviews of the progress of cases. The Revenue Secretary, the report suggests, should hold regular review meetings with the Director of Enforcement, which should also involve the Director of Revenue Intelligence and other officers. At present, the E.D. derives its powers from FERA and can conduct investigations independently. But sources feel that supervision by the Revenue Department will curtail the E.D.'s autonomy.
The IRC recommends that complaints of arbitrary action by E.D. officers be looked into by a committee headed by the CVC and comprising the Revenue Secretary, the Director-General of Revenue Intelligence and a Law Ministry representative. Safeguards against vexatious searches exist under FERA.
Currently, the E.D. can launch criminal prosecution any time before or after a show cause notice has been issued to an accused. The report recommends that criminal prosecution be launched within a year, failing which the probe be dropped. Considering the fact that many of the accused resort to dilatory tactics, such a provision can scuttle many investigations.
The IRC suggests that the Revenue Depart-ment set up standing medical boards to examine the accused who seek deferment of proceedings on health grounds. Experts, however, feel that this may amount to institutionalising the escape route used to avoid interrogation or incarceration.
Anil Divan, in his submission to the court on December 4, said that the committee had side-stepped the main issues, namely, how to help investigative officers discharge their duties without external pressures and influences. According to him, the report supports the status quo and "perpetuates the existing control of politicians and top bureaucrats on investigative agencies." He termed the report "weak" and "halting" with regard to appointments, tenures and transfers of CBI officers and other investigating officers. "It is a cosmetic effort to build a mechanism which is a mere house of straw." According to him, it is a report "by the bureaucrats for the benefit of the bureaucrats and the political elite."