Secrecy and silence

Print edition : May 20, 2005

The UPA government files two seemingly contradictory affidavits in the Supreme Court in the case relating to the Kargil War defence deals, while it is silent on making the CVC report on the issue public.

in New Delhi

THANKS to a public interest litigation (PIL) petition in the Supreme Court, the saga of the Kargil War in 1999, which catapulted the National Democratic Alliance (NDA) back to power in the general elections held that year, is on the verge of being reopened. The petition, filed by K.G. Dhananjay Chauhan, president of a little-known organisation, the National Federation of Indian Farmers, New Delhi, alleges misappropriation of Rs.2,175.40 crores under the guise of the Kargil War (code named Operation Vijay), as revealed by the special audit conducted by the Comptroller and Auditor-General of India (CAG).

Former Defence Minister George Fernandes speaks at a demonstration in New Delhi against the UPA government which alleged irregularities in defence procurement during the Kargil War.-MANISH SWARUP/AP

Chauhan sought a direction against the Ministry of Defence to fix responsibility of erring officials and Army personnel for negligence and inaction and for causing huge loss to the country, in terms of money and lives of Army personnel. He argued that thousands of Army personnel lost their lives in the Kargil War on account of corruption in the Army and the resultant non-availability of new-generation arms and ammunition.

The PIL's effort to stretch judicial review over Army affairs in case of grave financial irregularities is a lesson in constitutionalism. It points out that there is an implicit vital constitutional duty cast upon the Union of India to consider and act upon the CAG report unless it or Parliament refuses to accept it either in whole or in part. If the Centre displayed indifference to the CAG report, then the Supreme Court would have authority under Article 32 to direct the government to consider the report and take suitable action, the petitioner suggested.

In the context of allegations of irregularities in emergency procurements for Kargil operations, the Ministry of Defence had, in 2000, requested the CAG to do a special audit of the Kargil-related purchases. Based on this request, the CAG decided to assess the economy and effectiveness of the defence procurement system in an emergency situation. There were 129 contracts worth Rs.2,175.40 crores relating to the Kargil operations for the Army. Of these, files pertaining to 123 contracts entailing an expenditure of Rs.2,163.09 crores were made available to the CAG, which submitted a report under Article 151 of the Constitution to the President. The report was tabled in the Lok Sabha on December 11, 2001.

The CAG report listed serious irregularities in procurement during the Kargil operations. First, stores worth Rs.1,762.21 crores constituting 81 per cent of the total procurement expenditure materialised after January 2000, six months after the operation was over in July 1999. These included critical items of special clothing such as woollen socks, multiple purpose boots, gloves, sleeping bags, bulletproof jackets and critical ammunition. The CAG found that stores valuing not more than Rs.17.50 crores, less than 1 per cent of the total procurements, were received before the operation came to an end.

Second, 75 per cent of the total contracts, aggregating Rs.1,606.26 crores, were signed after the cessation of hostilities. Third, delivery schedules stipulated in the contracts were too long to meet operational requirements. Fourth, the CAG's test check revealed that in 15 cases aggregating Rs.700 crores, constituting one-third of the total procurement, orders were placed on the vendors for the first time. The CAG added that in an urgent situation, a reasonable expectation would be to place orders on proven suppliers.

The CAG found that in 24 cases involving an expenditure of Rs.1,388.91 crores, constituting 64 per cent of the total value of the procurement, material departures were made from the procedure on the grounds of urgent requirement for Operation Vijay. The CAG revealed that the excuse of Kargil was cited to push through procurements that would otherwise have been scrutinised more closely.

THE expose of such irregularities brought the NDA government and the then Defence Minister, George Fernandes, under intense pressure in Parliament and outside to ensure accountability. In response, the government referred the CAG report to the Central Vigilance Commission (CVC). In order to avoid the focus on the purchases during the Kargil War, the government included in the CVC's terms of reference all defence contracts entered into since 1989.

The CVC submitted its interim report on August 7, 2000, and the final report to the government on March 31, 2001. Subsequently, Parliament's Public Accounts Committee (PAC) (2003-04), then chaired by Narain Dutt Tiwari, Congress leader, now Uttaranchal Chief Minister, was entrusted with the review of the procurement for Operation Vijay. When the PAC insisted on getting a copy of the CVC report, the government refused and claimed, through a letter to its Chairman, that "the CVC Report on Defence Deals is based on `Secret' and `Top Secret' documents of the Ministry of Defence as well as on the reports of the IB [Intelligence Bureau] and the CBI [Central Bureau of Investigation]. Therefore, the report was classified as `Secret'." The NDA government claimed in Parliament that under a proviso to Rule 270 of the Rules of Procedure and Conduct of Business in the Lok Sabha, the Ministry was not in a position to supply a copy of the CVC report on defence deals as it would be prejudicial to the interest of the state.

Irked by the government's refusal, the PAC expressed its inability to give its findings on the CAG report.

THE United Progressive Alliance government is yet to reveal its stand on the CVC report, although as part of the Opposition its constituents had been critical of the NDA government's refusal to share it with Parliament.

In its first counter-affidavit filed before the Supreme Court, on March 10, the government did not reiterate the NDA government's stand that the CVC report was secret. Instead, as required by the Supreme Court's order, the government confined its response to showing the "details of the action taken on the CAG report, the PAC's 54th report (2003-04), and the report of the CVC".

The government revealed in its affidavit that out of the 20 cases referred to the CVC, the latter closed nine cases and the remaining were under examination in the Ministry or under correspondence with the CVC. Of these 20 cases, 11 cases involved contracts entered into after 1989, worth more than Rs.75 crores; three cases involved the payment of 10 per cent or more advance; and six cases were mentioned in the CAG report.

What the government has disclosed perhaps would amount to only a status report on the cases referred to the CVC, rather than "details of the action taken on the reports" by the CAG, the PAC and the CVC, as required by the Supreme Court's interim order.

The petitioner has, therefore, filed an application before the Supreme Court for a direction to the government to reveal the CVC report in its entirety. It is believed that the NDA government kept the CVC report secret because it cast a shadow on the integrity of the earlier Defence Ministers as well. But the decision failed to carry credibility because the same government did not hesitate to let a chosen journalist (R.V. Pandit) have access to the Defence Ministry papers to rebut the CAG report through a government-backed booklet on the purchase of aluminium caskets bought by the Defence Ministry in 1999-2000. It was alleged then that the Army bought these caskets meant for the Kargil martyrs at twice the price quoted in the United States then.

Whatever the government's response to the plea to release the CVC report, the filing of two successive affidavits in the Supreme Court within a span of two months in the same case has exposed the government to the charge of duplicity.

In its first affidavit filed on March 10, the government took the stand that the changes in the Defence Procurement Procedure, introduced in the wake of the Kargil conflict, in no way violated any of the financial rules of the government or the Defence Procurement Procedure, 1992. The modifications of the existing procedure were necessary to ensure expeditious procurement of items required for Operation Vijay.

The modified procedure, it said, was meant only to telescope the time-frame, particularly for imports, which had become critical, keeping in view the intensity of the operations and the unpredictability of the situation or the period for which the operation would last. Simplifying the terms of contracts, and the procedure, therefore, were thought of as answers to abridge the time-frame.

On the CAG's objections on the nature and actual delivery of items, the UPA government's explanation was a clear defence of the NDA: "At the time of making projections, the duration of operations, the nature and levels of conflict and the possibility of spread of the conflict to other areas/sectors could not have been predicted. Moreover, the weapons, equipment and ammunition required by the Defence Forces are generally not available off the shelf and a lead time which can range from four to 18 months is required to produce and deliver them after conclusion of a contract."

The government told the court that 11 cases had been formally vetted to the satisfaction of CAG, again without giving any details.

Some of the transactions mentioned in the CAG report also figured in the Tehelka tapes in 2001. After the expiry of the term of the Phukan Commission inquiring into the tapes on October 3 last year, all the transactions mentioned in the tapes have been referred to the CBI. These transactions include the hand-held thermal imagers and the terminally guided munitions (Krasnopol) mentioned in the CAG report. In its additional affidavit filed on April 13, the government did not at all withdraw the defence it offered for the modified procedure adopted by the then NDA government. Legally also, the first affidavit is valid, as long as it is not formally withdrawn by the government.

What is intriguing is the fresh reference to the CBI of these cases. The CVC report itself was admittedly commissioned on the basis of the CBI's report. The government has now referred a total of 25 cases to the CBI, admittedly "exploring" whether the facts reveal a prima facie case of commission of criminal offences, in addition to the fact that the equipment did not materialise at the time of its need. (The government, in fact, justified the delivery delays in the first affidavit.)

The government's commitment, as mentioned in the second affidavit, to take strict action against officers/authorities, including the former Defence Minister, if it is found that the excuse of Kargil was taken to make purchases with a motive of personal benefit in violation of rules and regulations, therefore, appears hollow. The government finalised its Action Taken Note (ATN) in October last year, with respect to only one paragraph (4.19 of Report No.7-A of 2001) in the CAG report. (The others are in the draft stage.) In this, it again defended the NDA government, and this went unnoticed by the media. On the contention that an indigenous firm supplied rubber hoops in a time-frame shorter than the foreign vendor, with whom the NDA government had signed the contract, the UPA government agreed with it but offered a tame alibi: it could not have been predicted before the signing of the contract with the foreign firm.

The UPA government filed the second affidavit in the case, incorporating this commitment, following the criticism expressed within the Congress and among other partners of the UPA, of the Defence Ministry's move to exonerate George Fernandes. Defence Minister Pranab Mukherjee denied that the first affidavit amounted to a "clean chit" on the role of Fernandes and the NDA Ministry in the episode, and claimed that the government filed the second one to clarify this "misgiving". This expectedly drew protests from the NDA, which has challenged the government to stand by its first affidavit and not to submit to pressures from within to denigrate Fernandes.

The filing of the second affidavit might have been prompted by political pressures within the UPA. But if the government demonstrates its willingness to take action against those guilty in the Kargil scam in an time-bound manner and prevent recurrence of such irregularities in defence procurement during war and peace, the embarrassment it suffered on this ground would have been worth it.

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