A precedent and the law

The latest "cash for questions" scam is in some ways similar to the 1951 case, which forced the resignation of H.G. Mudgal as a Member of Parliament.

THE `cash for questions' scam involving 11 Members of Parliament has unearthed from Parliament's archives the case of H.G. Mudgal, the Congress MP who was forced to resign from the Provisional Parliament on September 24, 1951, for tabling questions for a remuneration obtained from an association of business persons. Mudgal was almost expelled from Parliament after he was found guilty by a Parliament Committee chaired by T.T. Krishnamachari and having Professor K.T. Shah, Syed Nausherali, G. Durgabai and Kashinathrao Vaidya as its members. The committee was constituted on June 8, 1951, following a motion adopted by Parliament after a debate in which Mudgal had participated. Mudgal resigned prior to the voting on the motion seeking his removal from the House, but the House resolved that he deserved expulsion and that the terms of his resignation constituted a contempt of the House, aggravating his offence.

Prime Minister Jawaharlal Nehru defended the action against Mudgal, saying that "if the House does not express its will in such matters in clear, unambiguous and forceful terms, then doubts may very well arise in public mind as to whether the House is very definite about such matters or not".

The Mudgal affair evokes interest especially because it was the only instance of its kind when an MP was compelled to quit for tabling questions for a price. Moreover, the scam came to light at a time when spy cameras of the kind used in the latest sting operation were unheard of.

The 387-page report of the committee, submitted to Parliament in August 1951, speaks for itself. The committee was to investigate the conduct and activities of Mudgal in connection with certain dealings with the Bombay Bullion Association (BBA), which included canvassing support and making propaganda in Parliament on problems such as option business and stamp duty and receipt of financial or business advantages from the BBA; and to consider and report whether the conduct of Mudgal was derogatory to the dignity of the House and inconsistent with the standards that Parliament was entitled to expect from its members. The committee examined 24 witnesses, and found Mudgal guilty.

Parliament was constrained to set up the committee after it found prima facie evidence pointing to the guilt of Mudgal. The evidence was in the nature of a secret report submitted to the government by an official nominee on the board of the BBA. There were two official nominees - one representing the Government of Bombay and the other representing the Reserve Bank of India - on the board. These nominees informed the government in writing that on March 9, 1951, at the meeting of the BBA, its president, Jwalaprasad Tiwari, told the members that in connection with some of the problems facing the Association, such as options business and stamp duties, Mudgal, had agreed to canvass support and make propaganda in Parliament on payment of Rs.20,000 and that he proposed to negotiate with him if the board supported him, as he felt it was necessary to fight the BBA's case in Parliament.

Some of the members were reported to have doubted the wisdom of the proposed move and also the capacity of Mudgal to deliver the goods. Finally, the Association agreed that no more than Rs.5,000 should be paid to Mudgal for the propaganda he would undertake, and a committee of the board was authorised to negotiate with Mudgal in respect of the propaganda and other related work.

On March 20, 1951, Mudgal gave notice of the question to the Parliament Secretariat. The questions he posed were:

a) Whether the Ministry of Finance was aware of the views of the president and directors of the Bombay Bullion Exchange, namely, that smuggling of bullion and the resultant loss of foreign exchange through the backdoor could be stopped by permitting regulated imports of bullion;

b) Whether the government would consider the possibility of free imports of bullion following improvement in the foreign exchange position;

c) Whether the government would consider the desirability of releasing a portion of surplus gold and silver stocks with it in the open market to bring down the price of bullion in India to world levels so that there would be no incentive to smuggling.

A slightly modified version of the question was answered on April 2, 1951.

On April 20, 1951, Jawaharlal Nehru confronted Mudgal with the report of the government nominee on the BBA and Mudgal's request, made in a letter to the Finance Minister, to receive a deputation of the president and the directors of the BBA, and sought his explanation. Finance Minister C.D. Deshmukh declined Mudgal's request, suggesting that the BBA could contact him directly.

Mudgal denied that he had sought Rs.20,000 from the BBA, and said that whatever he had received (he admitted that he received Rs.2,700) was in connection with his professional work and there was nothing underhand about it.

The committee found that soon after he was elected MP, he had thought it fit to place his services at the disposal of the business community through a circular to about 200 business firms, and it was titled "Your spokesman in the Parliament - H.G. Mudgal". The committee expressed its dismay that it was not told of its purpose. Mudgal's counsel before the committee, however, argued that there was nothing wrong in approaching his constituents with the offer, but he was not elected as a representative of any business community.

The committee was satisfied that all the dealings between the BBA and Mudgal Publications (a firm owned by Mudgal) on and after March 9, 1951, were on the understanding that whatever might be the services that Mudgal Publications might render to them, Mudgal would also render services to them in return for a consideration paid to Mudgal Publications. Services to be rendered by Mudgal, the committee explained, were to include raising questions in Parliament, moving an amendment to the Forward Contracts (Regulation) Bill (on which the BBA had certain reservations), and arranging interviews with Ministers.

On the issue of tabling questions in Parliament and moving amendments to the Bill, the committee did not reveal any direct evidence linking these actions of Mudgal with his receipt of any consideration from the BBA. It concluded that small sums paid to Mudgal Publications made no difference; he had entertained great expectations from the BBA. The BBA was under the belief that by its contact with Mudgal Publications, it would achieve its objectives better, through the activities of Mudgal, and that the distinction sought to be imported between Mudgal Publications and Mudgal had no foundation.

Mudgal had claimed in his defence that whatever he was alleged to have done was in his professional capacity as a writer, publicist or proprietor of Mudgal Publications and that it had no reference to his capacity as an MP. It was a routine business transaction entirely above board, and the cheques were received in the name of Mudgal Publications, crossed to order, he told the House. He claimed the questions he tabled in Parliament were inspired by his genuine concern over the issue.

However, two of the committee members - Vaidya and Shah - rejected this contention saying that if any monetary consideration was accepted by any member even for professional services in connection with matters coming up before Parliament for disposal, then it would not be in accordance with the conception of the standards of conduct to be expected of MPs.

It is debatable whether acceptance of consideration by an MP for tabling a question would constitute an offence, inviting penal action under the law - as even the ad hoc committee constituted in 1951 had not concluded so.

If the Supreme Court's judgment in the Jharkhand Mukti Morcha case (1998) is any indication, those who were successful in tabling questions in Parliament after receiving a consideration cannot be prosecuted because of the immunity granted by Article 105 (2) of the Constitution from any proceedings in any court in respect of anything said or any vote given in Parliament.

The evidentiary value of the tapes implicating the MPs, no doubt, has to be proven if the matter reaches the courts of law, for those MPs who were unsuccessful in tabling the questions for which they received some consideration and those MPs who demanded commissions for sanctioning funds under the MP Local Area Development Scheme could be tried under the Prevention of Corruption Act.

Mudgal was a case of actual conflict of interests between his roles as a publicist and as an MP; the latest "cash for query" scam is a case of entrapment by the media, with fictitious requests for a real consideration, in the public interest.

In cases of entrapment, it may be legitimate to ask whether the MPs concerned were predisposed to commit the offence they are accused of in order to establish their guilt or innocence.