Shri Arun Jaitley's Statement

Judicial burial of ‘Bofors Scam’

The CBI during the successive Congress governments was pressurized to sabotage the investigation. The registration of an FIR, which was a condition precedent for seeking international cooperation, was not done till the Congress government was ousted from power in November, 1989.

The judgment of the Delhi High Court quashing the framing of charges against some more accused persons in the Bofors bribery case is a glaring example of a judicial burial of a corruption case which had shaken the conscience of the entire Nation. It is an unfortunate end catalysed by collusion between an investigative agency pressurized by the political Executive and the powerful accused in the case. The gist of the case is simple. Indian Army had to buy weapons for the country's defence. Repeated trials of the weapon had favoured another gun. However, the last of the trials favoured the Bofors gun. Two intervening events had happened between the earlier trials and the last one. A meeting had been held between the then Indian Prime Minister and the Swedish President. Additionally, an entity called AE Services Ltd. had surfaced on the scene on 15.11.1985 and entered into a contract with M/s AB Bofors to procure for it on or before 31.3.1986 the contract from the Indian Government. It is this procurement that entitled it to kick-backs. The Government of India which then had a policy of no middlemen, no agents, awarded the contract on 24.3.1986 entitling M/s AE Services Ltd. (which maintained an account with the Noudfweiz Bank, Zurich) to the kick-backs. This money was later transferred to M/s Coalbar Investments Ltd. and then transferred to the Channel islands.

Behind these companies, which had otherwise rendered no professional service, was discovered the identity of Mr. Ottavio Quotrochi who was obviously close to the powers that be.

Except for two periods, namely, 1989-90 and 1998-2004 when the CBI was given a free hand to investigate and prosecute the accused, Governments during the remaining periods have actively attempted to help the accused. There have been at least five judicial pronouncements which have enabled the scuttling of the case.

The CBI during the successive Congress governments was pressurized to sabotage the investigation. The registration of an FIR, which was a condition precedent for seeking international cooperation, was not done till the Congress government was ousted from power in November, 1989. In 1993, Shri Madhav Sinh Solanki, the then External Affairs Minister, gave a note to the Swiss authorities almost indicating that the Government of India desired a closure of the case. When the Swiss authorities informed the CBI about the name of the beneficiaries of the accounts where kick-backs had been received, Mr. Quotrochi, a named beneficiary was allowed to escape from the country. A patently erroneous judgment of the Delhi High Court dated 4th February, 2004 quashed the charges of any criminal conspiracy having been entered into by the public servants and others to cause wrongful loss to the Government of India. It, however, permitted the framing of charges against others including the accused who have now been discharged. The UPA government decided not to challenge this erroneous judgment. The inevitable consequence of this has been the discharge of the remaining accused from being prosecuted in the case.

The case throws up vital issues relating to probity in public life. Political leaders, middlemen, defence suppliers conspired to cause loss to the Government of India in cases of kick-backs and bribery. Frequent change of Governments add to the uncertainty of the investigation. Eventually judicial obstacles to trial are created. There have been three earlier occasions where the judgments preventing investigation and trial were rendered by the Delhi High Court but on each occasion they were reversed by the Supreme Court. These illustrations are as under :-

(1) On 19.12.1990, a Single Judge of the Delhi High Court, Mr. Justice M.K. Chawla, raised six "prima facie" illegalities committed by the Court issuing the Letter Rogatory for assistance in investigation. The judgment was so patently absurd that one of the illegalities was "that the CBI is not a legally constituted force which can be entrusted with this investigation". The Supreme Court vide its verdict dated 27.8.1991 severely strictured the Delhi High Court judgment and reversed the same. The investigation proceeded further.

(2) On 2nd September, 1992, a Division Bench of Delhi High Court comprising of Justice G.C. Mittal and Justice Sat Pal quashed the FIR in the Bofors case. They quashed the Letter Rogatory issued to the Swiss Court as also the FIR registered in the case. The Supreme Court again on 17.12.1992 reversed this judgment.

(3) The Charge sheet was filed and on a petition by Shri Prakash P. Hinduja, Justice R.S. Sodhi of Delhi High Court on 10.6.2002 quashed the charge sheet on the ground that the CBI had not taken clearance from the Central Vigilance Commission before filing the charge sheet !

The Supreme Court vide judgment dated 7th July, 2003 again reversed this judgment and the case was allowed to proceed.

(4) On 4th February, 2004, Justice J.D. Kapoor of Delhi High Court quashed the charges against the public servants while allowing prosecution to proceed against the private accused. The Government changed at the Centre and the CBI decided not to challenge the judgment. Once this judgment became final and the case under the Prevention of Corruption Act was quashed, only the case of cheating remained. A burial of that case was inevitable.

(5) With the Prevention of Corruption Act was no longer invocable with the deletion of public servants, Delhi High Court again through Justice R.S. Sodhi, by judgment dated 31.5.2005 has now put the final burial on the case. This is not a judgment on merits. It does not hold that kick-backs were not paid. It proceeds on a mere premise that documents proving bribery and kickbacks were contained in certified copies. The reasoning contained in the judgment is questionable. It is based amongst other on concessions by the Government and CBI lawyers. The judicial discovery that Rs.250 crores were spent on the investigation is not based on any fact or a calculated figure in the government. How did this figure enter the judgment ?

In the last two instances there is a clear collusion between the investigative agency and the accused. The judgments may be erroneous, they please the accused; they please the political masters who run the Central government and the CBI obviously may decide to let the erroneous judgments stay. These are no certificates of honesty in favour of those accused. This is a sad reflection on our political, investigative and judicial process. Each one of these is worrisome.