With the framing of charges against the Hinduja brothers for criminal conspiracy, cheating and other offences in a CBI special court, the Bofors payoffs case is set to move onto a fast track.
Frequent visits to the courtrooms and repeated petitions for relief in criminal proceedings could be one way of clogging up the judicial process and undermining the task of the prosecution. But as the Hinduja brothers have found, recourse to this strategy is only serving increasingly to bring the evidence against them and indeed, the other accused in the Bofors case into sharper public focus.
On November 15, Special Judge Prem Kumar framed charges against the three Hinduja brothers Srichand, Gopichand and Prakash for criminal conspiracy, cheating and other offences in the Bofors payoffs case. With all three accused being away in London for the Deepavali festivities that are a major item in the annual social calendar of the city, the court recorded their respective pleas of "not guilty" through counsel. The Central Bureau of Investigation, which has been prosecuting the case, now believes it will proceed at a rapid pace. Prem Kumar has been put solely in charge of the Bofors case, ironically enough, as a consequence of a Hinduja petition in the Supreme Court, which claimed that the tardiness of the Indian judicial process was seriously restricting their freedom of movement and impeding the pursuit of their global business interests.
Judge Prem Kumar had a limited matter before him. The Hinduja brothers had sought discharge in the Bofors case on grounds ranging from the lack of evidence to the infirmity of the legal provisions under which they were charged. As Senior Counsel Ram Jethmalani argued on their behalf, a prima facie case can be said to have been made out when the evidence in the absence of convincing rebuttal, "would make the accused liable to conviction".
Prem Kumar gave no quarter to this argument. As he puts it in his judgment: "Exactly the same contention was raised by Shri Ram Jethmalani before the Supreme Court in State of Maharashtra vs Somnath Thapa (1996). The Supreme Court (then) took the view that a better and clearer statement of law would be that if there is ground for presuming that the accused has committed the offence, a court can justifiably say that a prima facie case against him exists, and so, frame a charge against him for committing that offence." Thorough and detailed consideration of evidence is not required at the stage of framing charges since that is properly done in the course of the actual trial, said Prem Kumar. "The court... need not undertake an elaborate enquiry in sifting and weighing the material; it is not necessary to delve deep into various aspects. All that the court has to consider is whether the evidentiary material on record, if generally accepted, would reasonably connect the accused with the crime."
The Judge took note of the CBI's contention that "there is sufficient material on record to frame charges against the accused persons". He then sought to weigh this against the Hindujas' assertion that the case is "based mostly on newspaper cuttings and inadmissible evidence". Counsel for the Hindujas relied on a number of judicial rulings to establish the point, among them the recent discharge of former Union Minister V.C. Shukla in the hawala case. "The entire edifice of the prosecution" in the hawala case, Prem Kumar recounted, "was built on... diaries, notebooks and loose sheets (detailing) the alleged payments". And "the said evidence was held to be of such a nature which could not be converted into legal evidence".
CBI Senior Counsel N. Natarajan argued that the judicial rationale applied in the V.C. Shukla case was irrelevant to Bofors. Firstly, many of the alleged newspaper clippings which were first published in The Hindu as part of a major investigative expose in 1988 and 1989 have subsequently been authenticated through established judicial processes. Letters rogatory sent to the Swedish and Swiss authorities had yielded, after an arduous legal battle, the originals of many of these. Secondly, complete authentication was not possible in some cases either because of state secrecy laws or because the original documents were in the possession of the accused. But these "photocopies and newspaper clippings" could still be used by the prosecution as evidence, subject to their authenticity being proved during the trial.
The Judge finally ruled that the Bofors case even where it was based upon clippings from newspapers and photocopies, was qualitatively different from that of V.C. Shukla and others. Specific lacunae that counsel for the Hindujas sought to point out, he observed, were "all matters of detail to be gone into at the time of trial". And on the admissibility of copies as evidence, he relied on a 1968 ruling of the Supreme Court, which held in the case of photographic evidence, that "on the whole... if the court is satisfied that there is no trick photography and the photograph is above suspicion, (it) can be received in evidence". The authenticity of the copies obtained by the CBI in the Bofors case would need to be established in trial, said Prem Kumar. But it would be impossible to "ignore" them at the stage of framing charges.
THE Hindujas did not fare any better in their effort to establish that no case of "cheating" or "conspiracy" had been established. Their case rested in part on the rather lame argument that the late S.K. Bhatnagar, who as Defence Secretary had signed the Bofors contract, represented the Government of India. And if the Government of India was the entity that had been at the receiving end of "cheating", it was akin to making a case of somebody or something being its own victim. This was logically and legally a tenuous position, argued the counsel for the Hindujas.
Judge Prem Kumar did not pause very long to make the distinction between the Government and individuals who occupy key positions in the Government and exercise the executive power delegated to them by the President. The larger part of his judgment is concerned with the more substantive questions, whether a case of "cheating" and "conspiracy" is made out. And in doing this, he goes into a meticulous and thorough assessment of the evidence produced by the CBI, in the process making some telling points.
In assessing the grounds on which the charge of "cheating" is made out, the Judge has gone into a minute examination of the bidding and evaluation process for the 155 mm howitzer gun which began in 1979. He has examined the internal memoranda of the Directorate of Artillery in the Army Headquarters and the assessments made at various times by incumbent officers in the post of the Deputy Chief of Army Staff. He has studied the financial bids submitted by the contending parties Bofors of Sweden, Sofma of France, Voest Alpine of Austria and an unnamed British arms manufacturer. He has observed how the choice was essentially narrowed down in the early 1980s to the French and Swedish guns, with the overwhelming preference right till February 1986, being for the former.
Analysing the rapid oscillations in the financial bids by the French and Swedish gun manufacturers between January and March 1986, he observes that the Defence Ministry made a final evaluation in favour of the latter by March. Its financial assessment, however, was flawed, since it omitted certain crucial components of cost to tilt the balance in Bofors' favour.
The Comptroller and Auditor General of India (CAG) had passed strictures against this evident misfeasance in 1989. And the Court today has taken note of these findings to record a prima facie case of "cheating".
THE CBI makes out its case of "conspiracy" with a wealth of documentary evidence, beginning with the Hindujas' initial contract with Bofors in 1979, and its subsequent revision in the early 1980s. The judge takes all this into account and considers the role of the longstanding Bofors agent, W.N. `Win' Chadha and his company, the Anatronic General Corporation. He observes how a new player, AE Services Ltd, managed to insinuate itself into the deal as late as November 1985, on the basis of a written understanding with Bofors that it would be entitled to a "take" of the contract value if the deal was struck before April 1, 1986. From the documentary evidence available, the Judge infers that the man behind the new entity was Ottavio Quattrocchi, an Italian businessman long resident in India, and an intimate of the family of the late Rajiv Gandhi.
"Win Chadha was initially perceived as a potential rival," says Prem Kumar. "His continuance as agent would make it difficult to introduce close confidant of Shri Rajiv Gandhi like Ottavio Quattrocchi and to receive handsome commission. However, later the way out had been found."
This sequence of events coupled with all the indications of "a massive cover-up operation" after the whistle was blown on the Bofors payoffs by a Swedish radio broadcaster, amounts to powerful evidence in the Judge's assessment: "Post-contract conduct of Rajiv Gandhi shows that a massive cover-up operation had been launched to see that truth does not come out. After Bofors had denied payment of commission/bribes, Shri Rajiv Gandhi spoke to Swedish Prime Minister and told him that there was no need for any further investigation by Swedish Government. No pressure of any kind was put on Bofors to come out with details of middlemen and the extent of amount (sic) paid to them. What to talk of cancellation, even threat to cancel was not extended. The CBI even failed to perform its statutory obligations of registering the FIR and conducting investigations as the Government of the day was being run by the very person against whom the CBI ultimately stated in the chargesheet of having committed offence..."
Where the Hindujas are concerned, the evidence of large remittances from Bofors into accounts under their fiduciary control has been held convincing enough to warrant the framing of charges. "The type of arrangement that Bofors had with Hinduja brothers" through various entities "was more in the nature of a secret middleman rather than agent or consultant," says Judge Prem Kumar.
The Hindujas have now taken the tack that the monies received from Bofors were legitimate compensation in certain global countertrade contracts. The Judge has ruled that the payments made to at least two Hinduja-controlled entities Pitco and Moresco does not conform to this description. His conclusions are clearly stated: "Hindujas have received bribe money of SEK (Swedish Kroner) 80,797,709.92 from AB Bofors. They intentionally aided and facilitated the commission of the bribe by receiving the said amount."
THE Bofors case is now expected to move onto a fast track with Judge Prem Kumar being able to devote his undivided attention to it. The Hindujas could conceivably take up their plea for discharge at the High Court, but CBI sources believe it unlikely that the High Court, even in admitting their plea and hearing it, would order a stay on trial proceedings.
A further boost to the prosecution came from distant Malaysia, which has been Quattrocchi's home since he fled India in 1993 after being named as one of the appellants contesting a Swiss court's decision to transfer crucial Bofors documents to India. The High Court in Kuala Lumpur on October 21 declined to hear Quattrocchi's plea that extradition proceedings against him in the sessions court be halted. The grounds advanced by Quattrocchi, it held, should more appropriately be dealt with by the sessions court as part of the extradition proceedings. CBI sources now believe that they are on the home stretch as far as Quattrocchi is concerned, bringing another elusive figure in the Bofors scandal within reach.
