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Published : Feb 11, 2011 00:00 IST

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The overall functioning of the CBI and its very character are being questioned for a variety of reasons.

in New Delhi

IT is not a good reflection on the Indian legal system that we harass people while the world says we have no case. This statement, one of Prime Minister Manmohan Singh's rare public comments on the Ottavio Quattrocchi angle of the Bofors howitzer case, came in May 2009 after it was revealed that the Central Bureau of Investigation (CBI), the country's premier investigating agency, had impressed upon Interpol to withdraw the red corner notice on Quattrocchi and take his name off the wanted list. Quattrocchi had left India in 1993 and was on the run from the CBI for over a decade on account of his alleged involvement in the Bofors scam. The Prime Minister's comment amounted to a virtual exculpation of the Italian businessman, who is considered close to the family of Congress president Sonia Gandhi.

A year and a half later, an order issued by the Delhi-based Income Tax Appellate Tribunal consisting of R.P. Tolani and R.C. Sharma has challenged the assertions by the Prime Minister and the CBI. In the process, the many deficiencies and inconsistencies in the general functioning of the CBI as well as the manner in which its investigations and processes are manipulated and used by the political class have once again come into focus.

The tribunal stated that kickbacks worth Rs.41 crore were paid to Quattrocchi and his business associate, the late Win Chaddha, in the howitzer deal and that they were liable to pay tax in India on such income. It added that inaction in this regard may lead to a non-existent undesirable and detrimental notion that India is a soft state and one can meddle with its tax laws with impunity. The tribunal gave this order while dismissing an appeal by Chaddha's son against the Income Tax Department's claim of Rs.52 crore and Rs.85 lakh from his father for the assessment years 1987-88 and 1988-89. Underlining the linkage between Chaddha, Quattrocchi and Bofors, the order pointed out that the assessee's own admission and CIT(A)'s observations clearly show that [the] assessee was very representative of Bofors; accordingly they deputed him to attend a principal-to-principal Defence Suppliers Conference on behalf of Bofors.

The tribunal also pointed to the manner in which Quattrocchi and his associate were allowed to get away from the jurisdiction of the Indian authorities and stated in no uncertain terms: Bofors admittedly paid the amounts to the assessee, AE Services, Quattrocchi and other entities.... Mr Ottavio Quattrocchi was living in India for a considerable time. The issue about his tax residence status should have been verified.

The tribunal made references to some of the earlier investigations into the Bofors scam, particularly the one conducted by a Joint Parliamentary Committee (JPC) in 1987. Analysing the JPC's observations, which said that Chaddha could not be described as a middleman between Bofors and the government and it could not be concluded that he had received kickbacks, the tribunal held that nowhere had the JPC called for a termination of the probes into the Bofors case by other investigating agencies or that Chaddha or any other entity had not been held to be immune to or exonerated from such charges.

In our view, the JPC has neither intended to oust the jurisdiction of the investigative agencies, nor has given findings constituting res judicata on the issues. Therefore, we do not find ourselves persuaded to hold that the JPC gave any clean chit to the assessee, it said.

In 1990, the Supreme Court also rejected Chaddha's petition seeking discharge from the criminal case and came up with a similar verdict.

At the receiving end

Time and again in the past decade the CBI has been at the receiving end of such reprobation from different institutions of governance as well as from political parties and the general public. However, the widespread criticism the agency has faced at the turn of the New Year is indeed intense. In fact, the overall functioning of the agency as well as its very character have been questioned on a variety of counts during this period.

Apart from the revelations on the Bofors-Quattrocchi angle highlighted by the Income Tax tribunal, the agency's closure of the Aarushi murder case relating to the death of a minor girl in her Noida home under mysterious circumstances has also evoked widespread criticism. So much so that Union Law Minister M. Veerappa Moily was compelled to state that the case needs to be reopened.

However, Moily did not show the same lenience vis-a-vis the Income Tax tribunal's revelations on the Quattrocchi issue. He remarked tersely that the government would look into the tribunal's order. He criticised the Opposition Bharatiya Janata Party (BJP) leader Arun Jaitley's demand for a fresh probe into the Bofors allegations on the basis of the tribunal's order. The devil of Bofors is always haunting Arun Jaitley. He is obsessed with it. Such obsessions, by themselves, do not make case enough for review and re-probe, Moily told Frontline.

Central to these different approaches adopted by the Law Minister is the disparate political import of the cases under consideration. The Bofors scandal has been, for many decades, an embarrassing issue for the Congress, and particularly the party's first family. Separately, the CBI's conduct in many cases is also perceived to be dictated by political considerations.

The frequent vacillations of the agency in the cases against Bahujan Samaj Party (BSP) leader and Chief Minister of Uttar Pradesh Mayawati, who has considerable strength in the Lok Sabha too, is a case in point. The CBI has changed its own position so many times in the cases against her, including the disproportionate wealth cases, that the Supreme Court itself remarked that the agency should show greater consistency.

The Supreme Court made this observation in September 2010 when it specifically accused the agency of moving slowly on a case that involved corruption charges against the Chief Minister. The case related to the sudden increase in the wealth of Mayawati from a declared Rs.1 crore in 2003 to Rs.50 crore in 2007. While hearing the case, the court stated, If the CBI and Mayawati are together, let the petition go. The court's observation came when the CBI sought more time to bring material to substantiate its charges. Just a few weeks earlier, in August 2010, the agency had told the court that it had enough evidence to prosecute Mayawati. That in itself was a turnaround from its earlier position that sought to agree with the Income Tax authorities that gave a clean chit to Mayawati.

Several political and legal observers as well as security officials find connections between these flip-flops and the political challenges faced by the Congress-led United Progressive Alliance (UPA) government at the Centre. Whenever the Congress felt that it would need the numbers of BSP members in the Lok Sabha on some crucial issue or the other, the case witnessed soft pedalling. At other times, when there was a need for political arm-twisting, the agency suddenly adopted aggressive, hardened postures, said a senior security agency official to Frontline.

D.R. Karthikeyan, former Director of the CBI and head of the Special Investigation Team that probed the assassination of former Prime Minister Rajiv Gandhi, told Frontline that there are reasons to believe that the CBI's decisions in some cases have been influenced by extraneous factors. However, he refrained from pinpointing the cases he had in mind. According to him, in the final analysis the choice between following the rule book, evidence and the rule of law or succumbing to extraneous pressure depends entirely on the individual officer who deals with the case or the Director who heads the agency. It is essentially a question of individual choice, he said.

Speaking on the Aarushi case, Karthikeyan said that investigating agencies across the globe faced the situation of not being able to gather enough evidence in one case or another. He said this by itself could not be held against the agency, and its efficacy or lack of it should not be gauged on the basis of one case. He suggested that the CBI would be able to free itself from allegations about its impartiality only by insulating itself from the pressures of the party in power.

One way of making this possible, he said, is to give more powers to the CBI, powers similar to those vested in the Central Vigilance Commissioner, but, of course, with checks and balances to curtail absolute and uncontrolled individual authority. Today the CBI is dependent on the Department of Personnel for everything, including induction and deputation and deployment of officers. This has to change. And ultimately, I am certain that our system will also have to follow something close to the American system where the appointment of heads of key institutions has to be ratified by the Senate Committee, where the person's entire record, past and present, his integrity, his deficiencies, everything comes in for intense public scrutiny. Only the implementation of a method like this will help stop the appointment of some favourites of the political class in key positions leading to questionable actions and decisions. Such a system will also help revive the credibility of the premier investigating agency of the country before the public and before institutions like the judiciary.

Hormis Tharakan, who has held many key positions in the Indian security establishment including the position of the chief of the Research and Analysis Wing (RAW), said: There is no harm in having an independent review of the efficacy of the measures put in place by the Central Vigilance Commission Act, 2003, which initiated measures to ensure the independence of the CBI.

He further pointed out that it was equally important to ensure the independence of the police in the States from political intervention and that despite the Supreme Court's guidelines, most State governments had been reluctant to take steps in this direction.

Obviously, the former senior officers have given considerable thought to the issues faced by the CBI and the security establishment in general. There is little doubt that the time is opportune to address the suggestions made by them as part of a review and restructuring of the functioning of the premier investigating agency.

(This story was published in the print edition of Frontline magazine dated Feb 11, 2011.)

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