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Index

S. No. Name Page No.

1. Mr. Manmohan Singh 2-4

2. Mr. P Chidambaram 5-29

3. Mr. Pranab Mukherjee 30-33

4. Mr. Sharad Pawar 34-37

5. Mr. S M Krishna 38-40

6. Mr. Kamal Nath 41-43

7. Mr. Praful Patel 44-48

8. Mr. Vilasrao Deshmukh 49-52

9. Mr. Virbhadra Singh 53-54

10. Mr. Kapil Sibal 55-58

11. Mr. Salman Khurshid 59-63

12. Mr. G K Vasan 64-65

13. Mr. Farooq Abdullah 66

14. Mr. M K Alagiri 67

15. Mr. S K Shinde 68-79

2

Dr. Manmohan Singh

Dr. Manmohan Singh is the Prime Minister since May 2004 and was

personally in-charge of the Coal Ministry from November 2006 to May

2009. Under his watch a major coal allocation scam took place which

allowed private firms to make windfall gains, as is clear from the facts that

are now out in the public domain and the report of the CAG.

The average allotment of coal blocks was 3-4 per year until a few years

back. But this number shot up drastically to 22-24 during 2006-09 when

Dr. Singh was in charge, raising questions about the manner in which

these allotments were made. All the allotments were made without

transparency, without protecting the interest of public exchequer, and

without any competitive process.

A comprehensive note on competitive bidding for the allocation of coal

blocks was given by the Coal Secretary to the Minister of State for Coal on

16 July 2004. It noted the substantial difference between the price of coal

supplied by Coal India Limited (CIL) and the cost of coal produced through

captive mining. This ensured a "windfall gain" to the party which was

allocated a captive block. That same month, the Minister of State sought

clarification on what he feared would be "likely opposition from the power

sector". The Coal Secretary was explicit that the existing system of

allocation, even with modifications, would not be able to achieve the

objectives of revenue maximisation, transparency and objectivity in the

allocation process. However, rather than accept this advice, in September

2004, the PMO forwarded a note detailing what it claimed were certain

disadvantages of the proposed system. Subsequently, the Coal Secretary

remarked that "there was hardly any merit in the objections raised" by the

PMO. The secretary also highlighted some of the "pulls and pressures"

experienced by the screening committee during the decision making

process and stressed that all pending applications were recommended on

the basis of competitive bidding, and that allocations should be made on

such a basis. This recommendation was ignored by the PMO.

The CAG draft report remarked that steps could have been taken to

allocate coal blocks through competitive bidding well in September 2004

itself.

In October 2004, the MoS again argued that the proposal for competitive

bidding may not be pursued as the Coal Mines (Nationalisation)

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Amendment Bill 2000 was pending in the Rajya Sabha with stiff opposition

from trade unions. He also disagreed with the opinion that the screening

committee could not ensure transparent decision making. He said that this

was "not an adequate ground for switching over (to) a new mechanism".

The matter was once again put before the PMO, after which, 28 June 2004

was decided as the cut-off date for considering applications as per the

current policy rather than the proposed policy.

In March 2005, the Coal Secretary again put up a note to the PM stating

that if the revised system was not put in place quickly enough, pressure

would again mount on the government for continuing with the existing

procedure. Subsequently, the PMO in August 2005 asked the coal ministry

to amend the Coal Mines (Nationalisation) Act 1973 before the new system

became operational. "Since this was likely to take considerable time it was

decided that the coal ministry would continue to allot coal blocks for

captive mining through extant screening committee procedure till the new

competitive bidding procedure became operational," the note states. Again

in November 2005, the MoS said that the PMO had taken a view to amend

the Coal Mines (Nationalisation) Act, which was a "time consuming

exercise and as such allowed the department to proceed with the existing

system" ... "there was no immediacy..."

In April 2006, it was decided to amend the MMDR Act so that the system

of competitive bidding could be made applicable to all minerals. Later on,

delaying the matter further, the MoS opined that the issue of amendment

should be "revisited" as it had the potential to become controversial.

Finally, the bill to amend the MMDR Act was introduced in Parliament in

October 2008 and passed in August 2010.

While the amendment to ensure coal allocation by auction remained in

abeyance because of the Dr. Singh’s interventions as head of the Cabinet

and in-charge of the coal ministry, 24 blocks were allocated in 2005, 53 in

2006, 52 in 2007, 24 in 2008 and 16 in 2009. Interestingly, post-

amendments, only one coal block was allocated in 2010, and not even one

in 2011.

Obviously there was a rush for coal blocks allocated under the old, non-

competitive, system. As on June 2004, only 39 coal blocks stood allocated.

"But since July 2004, 155 coal blocks were allocated to government and

private parties following the existing process. The CAG in its draft report

has pegged the losses running in lakhs of crores. A copy of the relevant

chapter of the report is annexed as Annexure A. It is understood the final

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report is similar to the draft report. The final report though has been

submitted to the Government, the Government chose not table it in the

Budget session of Parliament.

The above facts clearly show that the Dr. Singh abused his position to give

huge pecuniary benefits to private parties, which is an offence under

Section 13 of the Prevention of Corruption Act. Therefore the said matter

needs a thorough independent investigation.

5

Mr. P Chidambaram

Mr. P Chidambaram was the Finance Minister from May 2004 to November

2008 and has been Home Minister since December 2008.

This note against him is divided into 5 heads:

1. Pricing of 2G Spectrum

2. Allowing sale of equity by Swan and Unitech

3. FIPB approval of Hutch-Vodafone

4. FIPB approval of Aircel-Maxis

5. Unwarranted attempts to withdraw prosecution

1. PRICING OF 2G SPECTRUM

Mr. Chidambaram as Finance Minister overruled the officers of his own

Ministry who favoured auction / market-based pricing of spectrum, and

instead allowed the 2G scam to take place. He also, in no time, revised his

position from giving away 4.4 Mhz of spectrum at 2001 prices, to giving

away 6.2 Mhz of spectrum at 2001 prices thus forcing an additional loss

on the exchequer.

The Finance Secretary in a letter dated November 22, 2007 (Annexure A1)

to the Telecom Secretary had stayed any further allocation of spectrum.

The communication states, “Meanwhile, all further action to implement the

above licenses (cross-over technology) may please be stayed.” A copy of

this letter was marked to Mr K.M. Chandrasekhar, Cabinet Secretary, and

Mr Rohit Kansal, PS to Mr. Chidambaram. On November 29, 2007

(Annexure A2), Telecom Secretary replied to Finance Secretary justifying

the issuance of cross-technology licenses on 2001 rates. On this letter, an

officer in Finance Ministry noted, “No reply as to why a matter with

financial implications has not been referred to MoF.”

On 7th December 2007, an agenda for the meeting of the full Telecom

Commission was prepared, which did not list spectrum pricing as an item.

However, this meeting was not held. On 12.12.2007, the MoF officers

wrote to the DoT, seeking details/documents related to the letter of the

DoT Secretary dated 29th November 2007. On 13th December 2007, in

response to a letter from the Director (Infra)-MoF, the DoT replied

(Annexure A3), enclosing copies of: The cabinet note of 2003; the cabinet

decision in this regard; the DO from the DoT Secretary to the Finance

Secretary of November 2007. The Cabinet note and decision with regard to

spectrum pricing, which had been cited by the DoT Secretary on 29th

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November 2008 was received by the MoF. Section 2.1.2(3) clearly stated:

“The Department of Telecom and the Ministry of Finance would discuss and

finalize spectrum pricing formula, which would include incentive for efficient

use of spectrum as well as disincentive for sub-optimal usages.” From the

above, it was clear that the MoF officials were fully aware that unless such

‘concurrence’ based on discussion and finalization of spectrum pricing

formula between the DoT and the MoF had been established, the DoT

could not move ahead and allocate spectrum at 2001 rates in 2007/08.

Alarmed by press reports between October and December 2007 of Raja's

potential manipulation of cut-off date, FCFS, and the imminent issuance

of LoIs, MoF officials prepared a “Position Paper on Spectrum Policy” dated

January 3, 2008, which was attached to a covering note dated January 9,

2008 (Annexure A4) of the Additional Secretary (EA), Finance Ministry.

This paper was to be presented in the Telecom Commission meeting that

was to take place on January 9, 2008, which was postponed to January

15, 2008 at the last minute. In the paper, the Finance Ministry had

recognized that 575 applications were pending and therefore had insisted

that the price of spectrum must reflect spectrum’s scarcity value

determined through auction. The relevant parts of this note are

reproduced below: -

Extracts of notes dated January 9, 2008 of Additional

Secretary (EA), of Finance Ministry

6.3 Given the fact that there are reportedly over 575

applications pending with DoT (including 45 new applicants) there

is a case for reviewing the entry fee fixed in 2001. This is an

administratively fixed fee. Therefore any change should be

governed by transparent and objective criteria applicable

uniformly to all new entrants.

8.1 The most contentious issue relates to spectrum allocation.

There is no disagreement that the price charged for spectrum

should be based on its scarcity value, efficient usage and that the

process of allocation should be transparent and fair. The payment

is for a real economic resource. It is not a fee. According to DoT it is

closer to royalty charged on Coal, Crude and Natural Gas.

8.4 The most transparent method of allocation of spectrum

would be by auction. However, there are two caveats to the

auction method.

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(a) The ways in which the existing licensees in GSM and CDMA

would be eligible to participate in the auction vis-a-vis the new

entrants; and

(b) The advantages and disadvantages of the method itself. A

detailed table is placed at Annexure V.

The possible non-optimal outcomes can be taken care of by

prescribing suitable rules of auction before the bid in a transparent

manner applicable to all eligible bidders. Any other method for

allocating spectrum, being a scarce resource, would be

economically inefficient.

9.1 …. Nevertheless, regardless of the allocation criteria, auction

has been recommended with transparent rules as the most suitable

method of allocating spectrum. The quantum, of spectrum available for

auction in 2G is to be decided by DoT.

Also, the above said note clearly states that Mr. Chidambaram was

personally keeping a watch on the spectrum issues through the media

reports. The note stated that, “FM had instructed that the prolific Press

reports over the last two months relating to pricing of spectrum and the

"Telecom Wars" may be tracked.” A sample of the press reports of that time

that had complete blown the lid over the manipulations and illegalities

that were being done by the DoT much before the issue of LoIs are

annexed as Annexure A5. There were tens of other similar reports

appearing in the press during October 2007 to January 2008. So, Mr.

Chidambaram was fully aware of the complete developments that were

taking place in the Department of Telecommunications (DoT). He was also

aware that the TRAI recommendations (that DoT claimed to be following)

were never approved by the full Telecom Commission of which Finance

Secretary is a Member. Additionally, that Member (Finance) on the

Telecom Commission had objected to Mr. Raja's moves by opposing the

2001 entry fee vide her note on file dated 30th November 2007.

The DoT issued 122 Letter of Intents (LOIs) for Universal Access Service

(UAS) licenses on January 10, 2008; these LOIs were converted into

licenses only during February 27, 2008 to March 7, 2008; and the

spectrum allocation started only from April 22, 2008 and completed on

May 6, 2009 (Annexure A6). During this period, Mr. Chidambaram had

enough time to stop the scam. However, instead, he facilitated the same by

silencing the stand of his officers on the issue of spectrum pricing.

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Just before the Telecom Commission meeting that was scheduled for

January 15, 2008, Mr. Chidambaram wrote a note for the Prime Minister

(Annexure A7). Instead of being straightforward, Mr. Chidambaram’s note

was aimed to hide the illegalities in the award of licenses. In this regard,

the relevant extract of the note where he categorically exempts the revision

of entry fee is reproduced below: -

9. This note does not deal with the need, if any, to revise

entry fee or the rate of revenue share. This note deals with

spectrum charges for 2G spectrum.

10. Spectrum is a scarce resource. The price of spectrum should be

based on scarcity value and efficiency of usage. The most

transparent method of allocating spectrum would be through

auction. The method of auction will face least legal challenge.

If the government is able to provide sufficient information on

availability of spectrum, that would minimize the risks and

consequently, fetch better prices at the auction. The design of the

auction should include a reserve price.

Through the above note, Mr. Chidambaram also put a lid on the issue of

entry fee for start-up spectrum and of payment by existing operators

towards excess spectrum from a retrospective date, probably to appease

them so that they do not raise the issue of the scam in awarding new

licenses. In this regard, the relevant extract of the note is reproduced

below: -

13. This leaves the question about licensees who hold spectrum

over and above the start up spectrum. In such cases, the past may be

treated as a closed chapter and payments made in the past for

additional spectrum (over and above the start up spectrum) may be

treated as the charges for spectrum for that period. However,

prospectively, licensee should pay for the additional spectrum that

they hold, over and above the start-up spectrum, at the price

discovered in the auction. This will place old licensees, existing

licensee seeking additional spectrum and new licensees on par so far

as spectrum charges are concerned.

Thereafter, both Mr. Chidambaram and Mr. A Raja met on January 30,

2008 (Annexure A8) to discuss the issue of licensing and spectrum

pricing. In this meeting, Mr. Chidambaram announced the closure of the

issue of reviewing the Entry Fee of 122 LoIs already issued by DoT. Even

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after issuance of LoIs, A Raja did not convert the LoIs into licenses until he

got clearance from Mr. Chidambaram. The gist of the discussions is as

follows:

4. It was noted that there is a mismatch in the demand and

supply of spectrum across circles. Redressing this mismatch will

be another policy imperative;

5. FM said that for now we are not seeking to revisit the current

regimes for entry fee or for revenue share.

However, in the meantime, since the issue of spectrum pricing was

apparently not settled at the Telecom Commission level, the officers in

both the ministries (Telecom and Finance) kept the discussions on. The

Secretaries of both the ministries had four rounds of discussions in

February 2008. In this regard, on February 8, 2008 Telecom Secretary

sent an “Approach Paper on Spectrum Charges” to Finance Secretary

(Annexure A9). This note revealed that the Finance Ministry officials were

keen to stop the allocation of spectrum to the LoI holders. Also, the DoT’s

position was: i) that it agreed with the MoF that it was legally possible to

auction start-up spectrum (Para 2.1); ii) that license conditions imply that

start-up spectrum of 4.4 MHz would be available contractually (Para 2.1.1,

2.1.2); and iii) that it agreed with the MoF that spectrum beyond 4.4 MHz

until 6.2 MHz (additional 1.8 MHz) could be charged at a pro-rata basis.

The relevant part of this note is reproduced below: -

Extract of Telecom Secretary’s letter dated February 8,

2008 to Finance Secretary

2.1 Secretary (Finance) was of the opinion that auctioning is

legally possible for initial allotment of spectrum of 4.4 MHz.

Secretary (DoT) explained that auction of spectrum of 4.4 MHz

though may be legally possible but it would not be practical

proposition to auction or fixing a price for 4.4 MHz spectrum due to

following:

2.1.1 As per clause 43.5 (i) of UAS License, which provides that:

“initially a cumulative maximum of upto 4.4 MHz +4.4 MHz shall

be allocated in the case of GSM based systems….” It implies that

when a service provider signs UAS License he understands that

and contractually he is eligible for initially a cumulative maximum

of 4.4 MHz subject to availability.

2.1.2 120 LOIs have been issued and the Department is

contractually obliged to give them start up spectrum of 4.4 MHz

under UASL.

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3.1.4 It is however, proposed to price the spectrum of 1.8 MHz

beyond 4.4 MHz upto 6.2 MHz.

3.1.5 The Department is of the view that it would be appropriate to a

levy the charge for enhancement of the quantum of spectrum beyond

the initial 4.4 MHz. For an additional spectrum of 1.8 MHz making a

total of 6.2 MHz spectrum acquisition charge may be on pro-rata basis

i.e. Rs. 378 crores pan-India. It will be charged only to new allottees as

the existing ones have got the spectrum as per license agreement.

On receiving the note of 8th February 2008, the MoF officials knew that the

DoT’s representation of ‘contractual rights’ of LoI holders (Para 2.1.1,

2.1.2) was farcical and a gross misrepresentation simply because LoI

holders were neither licensees nor did they hold licenses until 27th

February 2008. After the above stated letter from Telecom Secretary, the

officials in the Finance Ministry to counter the above also made an internal

note dated February 11, 2008 (Annexure A10) reiterating their stand of

market-based spectrum pricing of 4.4 MHz spectrum agreed to be allotted

to 122 LoI holders. The relevant part of this note is reproduced below: -

30. Ministry of Finance differs from the above position of DoT.

There is no contractual obligation to allot a start-up

spectrum of 4.4 MHz to every licencee free of cost. The

entire range of the spectrum allotted should be priced. The

issue of level playing field can be addressed by charging this

price even on existing operators.

31. Moreover, the differentiated pricing suggested by DoT, viz.

one price for spectrum between 4.4 and 6.2 MHz and a different

price for spectrum beyond 6.2 MHz will be clumsy, non-

transparent and legally questionable. It will be neat and

transparent to fix a single circle-specific price for spectrum across

the entire bandwidth.

Between 27th February and 7th March 2008, even as MoF officials fought a

valiant battle to protect the exchequer’s revenue, not just with the DoT but

with their own Minister, Mr Raja went ahead and issued 122 licenses. This

could have easily been prevented by the FM if only he had stood by his

officials. But all his notes and agreements (15th January and 30th January

2008) were against revising entry fee.

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On 7th April 2008, the Finance Secretary discussed with the DoT Secy and

the FM the note on the issue of entry fee/spectrum pricing (Annexure

A11). He noted that:

“Pricing of spectrum: DoT is agreeable to pricing of spectrum beyond

4.4 MHz but wants this to be deferred till auction of 3G and WiMax is

completed. In our note, we suggested pricing of all spectrum including

spectrum already allocated. Is there a case for deferring this decision?

Is there merit in disclosing the pricing intention right now if actual

implementation is deferred?”

It is thus clear that the Finance Secretary was uncomfortable about

diluting the MoF’s position and more so on the ‘merits in disclosing the

pricing intention right now if the actual implementation is to be deferred’.

The Finance Secretary also noted on the covering letter: “I have only

communicated the gist of this to Secretary, Department of Telecom. The FM

said that he will also speak to Minister of Communications.”

On the same day of 07.04.2008 , the FS noted on a file noting (Annexure

A12) continued from 3rd April 2008 that:

“2. FM agreed that spectrum usage charge should be increased

reflecting the scarcity value of spectrum as indicated in our note of

11th February, 2008. 3. On pricing of spectrum, FM’s view is that we

must insist, in principle, on pricing spectrum (beyond 4.4 MHz)

although details can be worked out after the auction of 3G spectrum.”

This was the first clear dilution of the MoF officers’ position on specifically

pricing start-up spectrum on the instructions of Mr. Chidambaram.

Mysteriously, Mr. Raja did not start the process of allocating spectrum at

this stage. Clearly, he needed a written confirmation from the MoF to begin

the process of allocating 4.4 MHz of start-up spectrum at 2001 rates.

On 8th April 2008, one month after licenses had been awarded, an OM

(Annexure A13) which reflected the MoF’s original position of 11th

February 2008 on the issue of subjecting the entire spectrum to specific

pricing was issued to the DoT Secretary by the Director, MoF. This note

came to light in the media on 9th April 2008, and the DoT’s position vis-à-

vis that of the MoF’s view were highlighted. Immediately on seeing the

media coverage, the officer was reprimanded and was forced to withdraw

and re-draft the said OM (Annexure A14). The difference between what

the original OM stated and what the officer was directed to re-draft could

not have been more stark. The original OM required the entire range of

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spectrum to be specifically priced. The revised OM, which was prepared on

9th April 2008 but presented with a date of 8th April 2008, specifically

sought to exclude start-up spectrum upto 4.4 MHz from being specifically

charged, therefore ensuring that the entry fee of 2001 that was fixed by

telecom Minister in 2008 was not revised. The contrast is as below:

New OM dated April 8,

2008

Original OM dated April 8, 2008

4(1) Any allotments of

spectrum to access

subscriber licensees under

UASL regime – beyond the

initial “start up” allocation of

4.4. MHz – may henceforth be

specifically priced and

charged for. Details in this

regard can be worked out.

4(1) Any Allotments of Spectrum to access

subscriber licensees under UASL regime

may henceforth be specifically priced and

charged for. The charge may be determined,

Circle wise, by adopting the Entry Fee, fixed

for that circle in 2003-04, and thereafter

inflating it by the multiplier, which

represents the growth in aggregate AGR per

MHz between 2003-04 and 2007-08; hence,

for a Pan India operator, the Circle fee fixed

in 2003-04 (Rs. 375 Crore per MHz) would

be inflated by a multiple of 3.5 (which

represents the growth in AGR/MHz between

2003-04 and 2007-08) to yield the new

Spectrum price of Rs. 1,312 Crore per MHz

(approximately).

4(3) The price determined as

above may be made

applicable to both the new

and existing operators; such

operators who do not intend

to pay the new charges may

be given the option of

surrendering the spectrum

allotted to them.

4(2) The price determined as above may be

made applicable to both the new and

existing operators; moreover, the entire

range of spectrum allotted may be charged,

for both new and existing operators; such

operators who do not intend to pay the new

charges may be given the option of

surrendering the Spectrum allotted to them.

On 10th April 2008, not only was the officer who sent the original OM made

to apologize in writing, but in fact seemed to be severely reprimanded and

forced to provide a detailed explanation to the FM as to why the original

OM, which reflected the views of the MoF officers/note of 11th February

2008, was sent out (Annexure A15). The note also reveals how the OM

was personally delivered by the officer to the Wireless Advisor in the DoT,

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who received it on behalf of the DoT Secretary. The DoT then did not to

process the original version of the OM in the DoT file. The Joint Secretary

(Infra) in the MoF spoke personally to the DoT Secretary asking for the

withdrawal of the original OM and the request was exceeded to by DoT

Secretary Shri Behura. While all this occurred on 9th April 2008, the new

diluted/modified OM was mysteriously pre-dated one day earlier to 8th

April 2008 to give an appearance that DoT’s records and files were in

order. On the above note, on 16th April 2008, the FM wrote a 3-para note

accepting the apology of the officer but only pointed to ‘nomenclature’ and

‘title’ mistakes in the OM. He wrote: “That apart, the draft note received

from DoT was indeed considered by me on 11.3.2008. Thereafter, that file

containing the draft note from DoT and the proposed OM was not put up to

me. What was considered was only a non-paper given to me by the Minister

of Telecommunications on which I had been informed by the FS that the DEA

would send a non-paper containing our views. It is in this context that the

note for discussion was prepared: a discussion took place; and I had

indicated my views on the margin of that note. Logically this should have

been followed by sending a non-paper to DoT. However, if there was an

intention to send a formal OM containing our views on the draft note for

Cabinet received from DoT, the file should have been put up to me and my

signature obtained. I may note that I was in office on 8.4.2008 and

9.4.2008. Such errors should be avoided in future.”

Having forced the officers to replace the original OM and change the MoF’s

position, Mr. Chidambaram on April 21, 2008 forwarded a “non-paper”

indicating the views of the Ministry of Finance on spectrum related matters

to Mr. A Raja (Annexure A16). This non-paper was silent about on the

issue of entry fee for start-up spectrum for 122 licenses already issued.

The discussion conveniently shifted to charging for spectrum beyond 4.4

MHz. In this letter, he proposed a meeting with Mr. Raja before

communicating their “conclusion” to the Prime Minister. That means, till

then the two ministers had already decided not to charge for spectrum for

122 Licenses already issued.

Extracts of Mr. Chidambaram’s letter dated April 21, 2008 to

A Raja

As you are aware, based on your non-paper on spectrum charges,

Finance Secretary has held discussions with Secretary, Ministry of

Communications & Information Technology. Based on those

discussions, I enclose a non-paper containing our views on issues

relating to 2G spectrum and issues relating to 3G / WiMax

Spectrum.

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2. After you have had an opportunity to examine the same,

may we meet and discuss and reach some conclusions? These

conclusions could then be presented to the Hon'ble Prime Minister.

Pricing of 2G spectrum

DoT is agreeable to pricing of spectrum beyond 4.4 MHz but wants this

deferred until auction of 3G and WiMax is completed. An in-principle

decision on this issue may be taken at this stage itself, with details to

be worked out later.

Immediately after the above note, the DoT started allocating start-up

spectrum of 4.4 MHz to all the new operators from April 22, 2008.

Thereafter, Mr. Chidambaram instructed the Finance Secretary to meet the

Telecom Secretary to carry forward the discussion. The two met on April

24, 2008. After this meeting, strangely, Finance Ministry took a u-turn and

agreed not to charge even for spectrum allocated upto 6.2 MHz. . This

meant an additional 1.8 MHz over and above the 4.4 MHz as an additional

concession against the explicitly terms between the DoT and the MoF

officials in their letters of 8th and 11th February 2008. The Finance

Secretary issued an updated note on this on April 29, 2008 (Annexure

A17), a copy of which he handed over to Mr. Chidambaram. The same

position is reflected in a Brief Note dated May 28, 2008 prepared by the

MoF for Mr. Chidambaram before his meeting with Mr. Raja on May 29,

2008. They then met on May 29, 2008 and again on June 12, 2008.

Thereafter, on July 4, 2008, Mr. Chidambaram, Mr. Raja, Telecom

Secretary, and Finance Secretary had a joint meeting with the Prime

Minister. This was their first ever meeting on the spectrum issue after the

award of 2G scam. By this time, LOIs were already issued (Jan 10, 2008),

LoIs were converted into Licenses (Feb 27, 2008 to Mar 7, 2008), and the

allocation of start-up spectrum was already started (from April 22, 2008).

In the meeting, a note was submitted to the Prime Minister, which was

more in the nature of informing him what was already agreed and done. No

further approvals were required, as has become clear from the PM’s

statement in the Rajya Sabha on 24th February 2011. The specifics of the

discussion are reflected in the Finance Secretary’s note of July 6, 2008

(Annexure A18). Relevant part of the note dated July 6, 2008 states,

“It is legally and administratively tenable to impose a two part

tariff for Spectrum: a fixed, one-time "upfront" spectrum price for

allowing the allottees to use a public resource for private profit;

and, a recurring spectrum usage charge, whereby Government

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shares the profits accruing to the operator. However, due to

historical legacy reasons, spectrum allocations upto 6.2 MHz for

GSM (5 MHz for CDMA) shall not be charged both from new and

existing operators.”

The change in stand by Mr. Chidambaram has also been adversely

commented by the CAG in its report dated November 16, 2010 that states:

“The Hon'ble Finance Minister also held the view (15 January 2008)

that “Spectrum is a scarce resource. The price for spectrum should be

based on its scarcity value and efficiency of usage and the most

transparent method of allocating spectrum would be through auction”.

However, the Hon'ble Finance Minister after the issue of 121 LOIs by

the DoT suggested in January 2008 to treat the previous issue of

licences as a closed chapter and recommended that the price of

spectrum be discovered through an auction process in future.

Relevant extract from the CAG report is annexed as Annexure A19.

On February 16, 2011 (Annexure A20) the Prime Minister held a briefing

with select media persons in which he confirmed that the two ministers

were in agreement with each other. The briefing states,

“And this was also discussed with the Finance Ministry because

in terms of the Cabinet decision of 2003 the pricing and allocation

of spectrum was to be settled between the Ministry of Finance and

the Telecom Dept. Initially, of course, the Finance Ministry did ask

for a high price of spectrum but after many discussions, the two

ministries agreed that as far as 2G is concerned, we have to live

with the present system particularly with regard to the amount of

spectrum that is built and embedded into a license agreement. So

this is the background why I did not proceed further with this

matter of pricing of spectrum, because if the Ministry of Finance

and Ministry of Telecom both agree and they have the obligation of

the Cabinet Decision of 2003 to decide on the matter and also

since TRAI is an expert body and Telecom Commission has

experts, if all of them are of the same view, I did not feel I was in a

position to insist that auctions must be insisted.”

Prime Minister also told Rajya Sabha on 24.02.2011 that “The government

policy on pricing of spectrum was taken on basis of the Cabinet decision of

2003, which specifically left this issue to be determined by the Ministry of

Finance and the Ministry of Telecommunications.” He further added “the

16

two Ministers had agreed because of legacy considerations and I accepted

the recommendation.”

Former Finance Secretary in his statement on March 5, 2011 (Annexure

A21) to the CBI has confirmed the entire sequence of events and the

relevant file notings. Thereafter, on March 25, 2011 (Annexure A22), the

finance ministry under its new minister, released an O.M. to the Prime

Minister Office titled, “Chronology of basic facts related to pricing and

allocation of 2G spectrum.” This paper (that was drafted after inter-

ministerial consultations and refers to about 40 documents) indicts the

then Finance Minister in clear terms and confirms the events as are

documented above in this application, including (in Para 17) the fact that

even after licenses had been issued, the 2G scam could have been

prevented by invoking Clause 5.1 of the UAS license.

Firstly, the said O.M. notes that Mr. Chidambaram had four months to

stop the scam even after the issuance of 122 Letter of Intents (LoIs) by

telecom ministry on January 10, 2008. The LOIs were converted into

licenses during February 27 to March 7, 2008, while the spectrum was

allocated only from April 2008 onwards. Secondly, in the meeting of

Telecom Commission held on January 15, 2008, the representative of the

finance ministry did not bring up the revision of the 2001 entry fee for

start-up spectrum. Thirdly, simultaneously, in a secret note of January 15,

2008 to the PM, P Chidambaram had stated that this note was not seeking

to revise the entry fee, and that in future all spectrum beyond “start-up”

should be auctioned, and the spectrum allocated in the past be treated as

a closed chapter. Fourthly, Mr. Chidambaram had a meeting with the

accused Mr. Raja on January 30, 2008, in which Mr. Chidambaram

specifically stated that he was not seeking to revisit the current regime for

entry fees and revenue share. Fifthly, in February 2008, the FS informed

the Secretary, DoT that auctioning start-up spectrum was legally possible.

Sixthly, on February 11, 2008 the MoF officers rejected the DoT’s proposal

of 8th February 2008 and instead proposed to charge the entire range of

spectrum for all telecom operators, new or old, by indexing it with the

increase in telecom revenues during the period 2003-04 to 2007-08.

Seventhly, the FM forced the FS to change the MoF’s position with regard

to specific charge/auction of spectrum till 4.4 MHz – based on which the

MoF took a u-turn and wrote a modified OM to the DoT on 9th April 2008

(but dated 8th April, 2008), agreeing to specifically price spectrum only

beyond 4.4 MHz toeing Mr. Chidambaram’s line. Eightly, on April 21,

2008 Mr. Chidambaram had written to Mr Raja, and in this letter, he

17

mentioned only about pricing of spectrum beyond 4.4 MHz. And finally,

even this agreement between the DoT and the MoF was reversed within 3

days, and it was decided to price spectrum only beyond 6.2 MHz, thus

placing an additional approximate 500 MHz (280 licenses x 1.8 MHz)

outside the pricing range, in spite of this being an offer by the DoT itself

vide its letter of 8th February 2008. In that, the MoF was forced to grant

concessions even ahead of the DoT’s own proposals.

The Government of India issued a press release on 10.12.2011 (contrary to

the PM’s media statement of 16th February 2011, and his statement in the

Rajya Sabha on 24th February 2011, and the DoT affidavit of 11th

November 2010) strongly defending Mr. Chidambaram by stating: “It will

be clear from the foregoing sequence of events that Shri P Chidambaram

was in no way responsible for the issue of LoIs on January 10, 2008 or the

charging of entry fee of about Rs.1650 crore. In fact, the record will show

that the Ministry of Finance had no knowledge that the LoIs would be issued

on January 10, 2008.” A copy of the said official press release is annexed

as Annexure A23. The fact that Government took a false defense shows

that it has a lot to hide and therefore further investigation becomes

imperative.

It is to be noted that Mr. Raja has been charge-sheeted by the CBI for

fixing low spectrum price. Mr. Chidambaram, as the above facts show, was

equally guilty of the same.

2. Allowing sale of equity by Swan and Unitech

Both Swan and Unitech had obtained 2G licenses and spectrum in 2008 at

throwaway prices because of the connivance of Mr. Chidambaram and the

then Telecom Minister Mr. Raja. That was the first part of the 2G scam.

The second part of the 2G scam took place later in 2008. Mr.

Chidambaram allowed the companies like Swan and Unitech to sell off

their stakes, without charging any Government’s share of its premium on

account of spectrum valuation and without enforcing his own agreement

with the then Telecom Minister dated 30.01.2008.

On 30.01.2008, Mr. Chidambaram and Mr. Raja met and concluded that

14 operators were too many for the Indian market and that several of the

new entrants had come in for ‘speculative reasons’. Further, they knew full

well that these companies would enter into M&As and make windfall

18

profits because of the premium linked to the spectrum that they had

received in 2008 at 2001 prices. They made detailed notings and

agreements about how such premium resulting from M&As, being linked

almost entirely to the value of spectrum, must be appropriately subjected

to a government’s share and after proper and official valuations. No M&A

in the telecom sector can take place without the consent of the DoT, as per

the license conditions.

On 30th January 2008, in his documented meeting (annexed above) with

Mr. Raja 20 days after the 2G scam took place and LoIs had been granted,

but no licenses or spectrum allocated yet, a detailed discussion on

spectrum and M&As occurred. The notes from the meeting between the

FM, the MoCIT, and attended by the Finance Secretary and the DoT

Secretary concluded on the issue of M&As, speculative operators, and

protecting government revenues that:

“2.4. In case of M&A, getting part of the valuation for government as

premium for spectrum, to avoid hoarding as well as spectrum trading:

In view of very large number of new operators, it is expected that

some of these companies might have obtained licenses as

‘speculative’ venture. Hence, some ‘mergers and acquisitions (M&As)’

are likely to take place after some time, which de facto, would amount

to spectrum trading, as large part of such company’s valuation may

be on account of the spectrum held by them. This spectrum trading is

not desirable and needs to be regulated.

Besides, the general conditions in service license and other guidelines

for M&As, clear detailed ‘Guidelines’ needed to be evolved and

announced regarding the M&As, especially the amount of spectrum

which the merged entity would be allowed to retain alongwith other

criteria such as other details in this regard; company’s valuation by

consultants/valuers appointed by govt’s

approval/consent/concurrence; and then payment of a part of the

valuation to govt. as premium for spectrum, etc.”

The above clearly shows that both ministers were specifically aware that

M&As would lead to windfall gains for these companies. In fact, the

Supreme Court, in its judgment dated 2nd February 2011 in WPC

423/2010 cited as ((2012) 3 SCC 1) while cancelling the 2G licenses has

held on the issue of sale of stakes by these companies that:

“This becomes clear from the fact that soon after obtaining licenses,

some of the beneficiaries off-loaded their stakes to others in the name

19

of transfer of equity or infusion of fresh capital by foreign companies,

and thereby made huge profits. We have no doubt that if the method

of auction had been adopted for grant of licenses which could have

been the only rational transparent method for distribution of national

wealth, the nation would have been enriched by many thousand

crores.”

In fact, the CBI, in its charge sheet of 2nd April 2011 in the 2G scam

matter, has, in Section C (dual technology approvals and spectrum

allocation), clearly specified “a gain of Rs. 2,342 crores to the promoters of

Unitech Wireless,” and in the case of Swan-Etisalat, it specifies “a premium

of Rs. 275.7178 on each share”. The CBI itself, as a part of the criminal

conspiracy, has shown massive profits made by these companies. Further,

the same has been accepted by the Learned Special Judge of the CBI Court

in the order framing charges of 22nd October 2011, where he has

concluded: “...M/s Swan Private Limited and M/s Unitech Limited, and

thereby two companies obtained pecuniary advantage to the tune of Rs.

7,105 crore by offloading their shares...”.

On 8th February 2008, the DoT submitted an approach paper (annexed

above) in which it also specifically addressed the issue of M&As, in that:

“In view of this we need to have clear guidelines relating to M&A. We

also need to consider fees on account of transfer of spectrum to a

merged entity. In the event of M&A, the transfer charge to the

government has not been considered by TRAI in their recommendation

of August 2007. This is a complex issue requiring detailed deliberation

and consultation. Therefore, the issue of quantum of fees that

the government would get on account of transfer of spectrum

during M&As need to be referred to TRAI. Based on the

recommendations of TRAI on the above issue, DoT will take

appropriate decisions within a specified period and issue clear and

transparent guidelines for M&A including transfer charges for

spectrum.”

On 11th February 2008, in the DoT’s internal note (annexed above)

prepared based on the meeting between the FM and the MoCIT on 30th

January 2008, three rounds of discussions between the FS and the DoT

Secretary as well as the approach paper of the DoT dated 8th February

2008, it was concluded that M&As were expected and that the government

must find a way to protect its revenues. It specifically stated that:

20

“One question that arises is whether the government should get

premium out of an M&A transaction. Since spectrum has not been

auctioned but priced heuristically, it is likely that rent if any, involved

in the price of spectrum will form part of the M&A transaction.”

On 28th May 2008, one day before a scheduled meeting between Shri

Chidambaram and Shri Raja, a briefing note was prepared for the FM

(Annexure A24) in which, again, on the issue of government revenue from

M&As, it was stated that:

10. DoT have issued notification on April 22, 2007 on ‘guidelines for

intra circle merger of cellular mobile telephone service (CMTS)/unified

access service (UAS) licenses’ (copy attached). The guidelines

mandate: a) Spectrum transfer charge’ to be payable as specified by

government.

11. DoT may be advised that the fixation of ‘spectrum transfer

charges’ shall be in consultation with DEA.”

It is a matter of record that Mr. Chidambaram and Mr. Raja met on 29th

May 2008, on 12th June 2008 and finally with the PM jointly on 4th July

2008. However, from the notes of this meeting dated 6th July 2008, it is

clear that the entire issue of subjecting M&As to the government’s share of

the premium from the sale of spectrum / spectrum transfer charge was

specifically left out of the discussion.

On 23rd September 2008, Swan Telecom, which had received spectrum in

only 9 out of the 13 circles in which it had received licenses, entered into

an M&A transaction with Etisalat International. Similarly, on 29th October

2008, Unitech entered into an M&A transaction with Telenor even though

it had received spectrum in only 13 out of the 22 circles. In the days

following these transactions, several press clippings appeared exposing the

loss to the exchequer, and questioning the government’s move of allocating

spectrum at 2001 prices, including the false promise of doing so under the

pretext of affordability and increasing teledensity etc. The articles clearly

questioned the loss to the exchequer. A sample of these press clippings is

annexed as Annexure A25 (colly).

On 4th November 2008, under pressure from the media, Swan and Unitech

were forced to report about the transactions to the DoT (Annexure A26

and Annexure A27 respectively). The intimation of the two companies

showed that the only asset that they possessed at the time of the massive

valuations during the M&A was the promise of spectrum. They did not

21

even have spectrum in all their circles, and consequently, did not have any

telecom infrastructure or equipment either. They had no customers and

therefore no revenues either. It was clear from their own letters that the

entire valuation and the pecuniary advantage was linked to the price of

spectrum in 2008. This, in fact, is exactly what had been expected and

documented in the conclusions reached between the FM and Mr. Raja in

their meeting of 30th January 2008 – which were then repeated in the

DoT’s and MoF’s notes/letters of 8th February, 11th February, and 28th May

2008.

Under continued pressure from the media, Mr Raja held a meeting with

the FM and the PM. In this meeting, he obviously received the support of

the FM. In a complete U-turn of their earlier agreement of 30th January

2008, documents suggest that the FM passed off these transactions as

mere infusion of equity under the FDI rules. This free passage for Swan

and Unitech became a cause of additional and massive loss to the

exchequer. On 5th November 2008, Mr Raja penned down a one-page note

(Annexure A28), describing his meeting with the FM and the PM. In face

of the media articles pointing to the ‘unlawful enrichment’ and specified

that:

“In a meeting, the Hon'ble Finance Minister clarified that the dilution

of share to attract foreign investment for business expansion did not

amount to sale of license and as such these companies did their share

dilution as per corporate laws. Nevertheless, I suggest that in order to

remove suspicious clouds in the minds of media and people, Telecom

Commission may deliberate this issue and restrict outright sale of

licenses and selling of stake by promoters to second party for money.”

Thereafter on November 7, 2008 the DoT in a Press Release (Annexure

A29) justified the part-equity sale of Swan and Unitech to Etisalat and

Uninor. They claimed “This matter has been discussed and clarified with

the Finance Minister.” The same thing is mentioned in a note dated

November 7, 2008 (Annexure A30) that was prepared by the DoT for Full

Telecom Commission meeting.

Thus Mr. Chidambaram, apart from giving spectrum to shady companies

at low prices, also allowed them to sell it off at many times the said price,

thus allowing them to make windfall gains. The above facts clearly

demonstrate that the actions of Mr. Chidambaram led to massive loss to

the public exchequer and a corresponding gain to a few private companies

and individuals, and those decisions were also detrimental to public

22

interest. Therefore, he clearly abused his position to the benefit a few

private parties, which is a clear offence under Section 13 (1) (d) of the

Prevention of Corruption Act.

3. FIPB approval to Hutch-Vodafone

The Government had capped the Foreign investment in Indian telecom

operating companies through direct and indirect route at 74 per cent.

However, Hutchison Essar Limited (HEL), an operator that provided

telecom services across India, breached this condition with Foreign

Investment in HEL as high as 89 per cent. Hutchison Telecommunications

International Limited (“HTIL”), a Hong Kong based company, had 67 per

cent in HEL while Essar through its Mauritius based companies had 22

per cent equity in HEL. HTIL though had 67 per cent foreign investment

but it had declared to Indian authorities that it had only 52 per cent. The

remaining 15 per cent it held through three Indian entities (Mr Analjit

Singh, Mr Asim Ghosh, and IDFC).

The above breach came to light only when HTIL announced the sale of its

entire equity of 67 per cent to Vodafone of UK on February 11, 2007. This

is revealed in Vodafone’s Press release dated February 11, 2007 (Annexure

A31), and also Hutchison announcement on Hong Kong Stock Exchange

through a presentation paper dated February 22, 2007 (Annexure A32).

Telecom Watchdog, an NGO, immediately brought this to the notice of the

concerned agencies in India including the Enforcement Directorate

(Annexure A33). Thereafter, the Department of Economic Affairs (DEA)

under Ministry of Finance held detailed discussions with all the concerned

parties – Hutchison, Vodafone, and all the three Name Lenders. Vodafone

vide its letter dated March 14, 2007 confirmed its intention to acquire 67

per cent stake (Annexure A34). The DEA also sought the opinion of RBI

and Law Ministry on this issue. It circulated the details to all the Members

of the Foreign Investment Promotion Board (FIPB) for their comments.

However, all the other Members of the FIPB authorized DEA to investigate.

At this stage, Hutch realized the gravity of this situation. On March 15,

2007 Hutch agreed to pay $415 million to Essar in a conditional

Settlement Agreement with Essar (Annexure A35). This was primarily to

secure Government permissions. Out of this 90 per cent ($373.5 million)

was immediately paid and the balance 10 per cent ($41.5 mn) was to be

paid later.

23

On the other hand, responding to DEA’s queries, the RBI in its letter dated

March 20, 2007 called this as a serious violation, and said it requires

further investigation (Annexure A36). However, Law Ministry gave a

different opinion and said it was not in violation of FIPB. With all these

inputs, including that of Law Ministry’s opinion, the DEA on April 26,

2007 had concluded that HTIL had 15 per cent benami shares. However,

on April 27, 2007, the Finance Minister Mr P Chidambaram called these

DEA officers in his office including the Finance Secretary. Later, on the

same evening, the FIPB held a meeting. Most of the Members of FIPB

recorded their serious observation, but allowed transfer of only 52 per cent

of Hutch to Vodafone, while it rejected 15 per cent share transfer to

Vodafone. Under pressure, it did not act and remained silent on the

benami holding. This is revealed in the notings of DEA received under the

RTI Act (Annexure A37).

On May 7, 2007 the FIPB gave conditional permission to Vodafone to

purchase 52 per cent of Hutch while putting restriction on the sale of

benami 15 per cent (Annexure A38). However, without caring for this

condition, Vodafone executed the purchase as per original plans and

purchased the entire 67 per cent. This violation too was again immediately

brought to the government agencies including Mr A Raja, the then Telecom

Minister (Annexure A39). However, no action was taken.

Later on, Vodafone also entered into another agreement with Essar called

Amended and restated Shareholders Term Sheet dated August 24, 2007 by

way of which it has fixed how to share cost if at a later stage the

Government finds that the shareholding is benami (Annexure A40). This

agreement has capped Essar’s liability to $415 million that it has received

from Hutch under the above stated conditional Settlement Agreement. In

other words, if Essar is unable to secure the complete go through, it must

return $415 million to Vodafone. For extending support, Vodafone also

arranged a loan of $3.5 billion Term Loan on its sureties for Essar. For

this, Essar, Vodafone, and banks entered into agreement in September

2007 (Annexure A41). This agreement also reveals that Vodafone has

purchased 67 per cent from Hutch. It also elaborates how to deal with a

situation when the Government finds that they have 15 per cent benami

shares.

Later, on February 13, 2009, the government relaxed Foreign Investment

cap through Press Release No. 2 of 2009. This allowed further formal

taking over of another 6 per cent by Vodafone from the Name Lenders – Mr

Asim Ghosh (2.29 pc) and Mr Analjit Singh (3.71 pc) out of the total 15 per

cent benami by paying them a substantial money for lending their names.

24

Vodafone paid Mr Asim Ghosh Rs 329.5 crore and Mr Analjit Singh Rs

533.3 crore. Thus, together they sold 6 per cent for Rs 862.8 crore. This

works out to be Rs 143.8 crore per one per cent of HEL/VEL. This means

the valuation of 100 per cent of HEL/VEL was just Rs 14,380 crore. This is

highly undervalued. This substantiates the allegation that these are just

Name Lenders, and the payment was made by Vodafone to them as their

booty for lending their Names.

Thus, from the above it is clear that the Finance Ministry officials

maintained the same position even just a day before the FIPB meeting was

scheduled for April 27, 2007. On that morning, Mr P Chidambaram called

these officers in his chamber, and after that these officers took u-turn and

granted permission Vodafone to buy only 52%. The FIPB communicated

this to Vodafone in May 2007. But, Vodafone continued with its

acquisition plan of 67%. The Government did not do anything despite the

complaints.

It is also clear that, in March 2007, Hutchison, in an agreement with

Essar, agreed to pay $415 million to Essar for arranging government

permissions. This agreement was restated by Vodafone after they

purchased 67% equity, and Essar agreed to return all the money in case it

fails to do so. So, this was apparently the bribe money ($425 mn) that was

prima facie used by Essar to purchase permissions. These above facts

therefore undoubtedly need a thorough independent investigation.

4. FIPB approval to Aircel-Maxis

Under the law, foreign share holding of a telecom company cannot be more

than 74%. Any foreign investment of 50% or more have to be cleared by

the Foreign Investment Promotion Board (FIPB) which is headed by the

Finance Minister. The first job of the FIPB is to ensure that the FDI cap of

74% is not violated.

Maxis, a Malaysian company, purchased an Indian telecom company

called ‘Aircel’ and its investment was almost 100%. But to circumvent FDI

cap of 74%, it routed the balance investments through Chennai based

Reddy Group (Apollo Hospital). To the Indian authorities, Maxis

maintained that it has only 74% in Aircel. This FDI violation can also be

established from the fact that Maxis invested several thousand crores of

25

Rupees in Aircel, whereas Reddy’s investment is just Rs 34.17 crore for a

stake as high as 26% in Aircel.

CBI has now filed an FIR on the above transaction (Annexure A42). The

said FIR states:

“M/s Aircel was taken over by M/s Maxis Communications through its

subsidiary M/s Global Communications along with its India partner

M/s Sindiya Securities vide a complex equity structure giving them

74% and 26% stake in M/s Aircel Televentures Ltd. respectively.

Whereas the investment made by them were US $ 792.41 million and

US $ 7.59 million respectively thereby giving M/s Global

Communications an economic interest of 99.3% in M/s Aircel

Televentures Ltd.”

Even to the Bursa Malaysia Stock Exchange, Maxis in its quarterly report

ended March 31, 2006 has declared that it has 99.3% investment in Aircel.

(Annexure A43)

But despite the above well-known facts Mr. Chidambaram went ahead and

accorded FIPB clearance on 03.10.2006. (Annexure A44). Also after

complaints were filed regarding this FDI cap violation, no inquiry was done

or ordered by Mr. Chidambaram or the DoT.

After the Maxis took control over Aircel, Mr. Maran got spectrum pricing

out of agenda of the Group of Ministers (GoM). The record shows the

Finance Ministry under Mr. Chidambaram maintained a temporary silence

on the issue of spectrum pricing being dropped from the GoM between

February 2006 and February 2007. This was the same period in which

Maxis received two sets of FIPB clearances in January-March and

September-October 2006, followed by 14 licences between December 5 and

14, 2006, along with the promise of linked 2G spectrum at 2001 rates on a

first come, first served basis. Aircel paid Rs. 1,399 crore for these 14

licences which the CAG, in 2010, valued at roughly Rs. 13,000 crore. Once

Aircel had secured its licences, the Finance Ministry suddenly went back

to arguing that spectrum pricing be included in the ToRs of the GoM on

spectrum.

While the above was happening, Mr. Karti Chidambaram (son of Mr.

Chidambaram)’s company M/s Advantage Strategic Consulting gave a

mysterious loan of Rs. 26 lakhs to Aircel. Around this time there was a 5%

(Rs 18 lakhs) increase in Aircel’s share capital. These shares were

26

apparently allotted to companies linked with Mr. Karti Chidambaram.

Documents on this along with a summary are annexed as Annexure A45.

After the above facts came to light, Mr. Chidambaram argued that Karti's

Ausbridge came to Advantage Strategic Consulting only in 2008/2009 by

taking 67% shares. The Loans and Advances to Aircel took place

somewhere before 31 March 2006 and at that time Mr. Karti had no role in

M/s Advantage. But the Attached Annual Return 2006-2007 of Karti's

Ausbridge Holdings (where Mr. Karti holds 94% share) shows that their

email id as: advantconsult@gmail.com (Annexure A46). And Advantage

Strategic Consulting's Letter Head available at RoC says their website is

www.advantconsult.com (Annexure A47).

The above facts leave no room for doubt that a thorough and impartial

investigation is necessary in this case.

5. UNWARRANTED ATTEMPTS TO WITHDRAW PROSECUTION

Mr. Chidambaram was known to one Mr. S P Gupta, a Delhi based

hotelier. Mr. Chidambaram had also appeared for him several times a

lawyer, including in cases where Mr. Gupta had sought quashing of FIRs

against him. Mr. Chidambaram had appeared for him till 2004 when he

became a minister. As many as four FIRs were registered against Mr.

Gupta and others. In all the cases Delhi Police had filed detailed

chargesheets leveling serious charges against Mr. Gupta and the trial

court had taken cognizance. Mr. Gupta had gone right up to the Supreme

Court to get the investigations and/or the chargesheets quashed. His all

petitions and appeals had been rejected. But as soon as Mr. Chidambaram

took over as Home Minister, Mr. Gupta wrote to his Ministry seeking

withdrawal of the cases against him. Soon thereafter, Mr. Chidambaram

instructed the Delhi Police (which works under him) to withdraw all the

cases against Mr. Gupta. This is a clear case of abuse of ministerial power

to benefit an industrialist facing 4 chargesheets. After the above facts

became a big public scandal, the order to withdraw the prosecution has

been revoked.

There are four cases registered by Delhi Police against Mr. S P Gupta and

other private individuals. In all the four cases, chargesheets had been filed,

the trial court had taken cognizance, and the High Court and Supreme

27

Court had dismissed challenges to the FIR & chargesheets. Facts of the

case are as follows:

FIR No. 90/2000

a) FIR was registered on 14.02.2000

b) Chargesheet was filed on 17.01.2003 u/s

420/406/409/468/471/477-A/120-B IPC: It charged Mr. S P

Gupta and others of M/s Sunair Hotels, Barakhamba Road, New

Delhi with cheating, criminal breach of trust, forgery, falsification

of accounts and criminal conspiracy.

c) Trial Court took cognizance of chargesheet and issued summons to

accused on 18.01.2003

d) Notice was issued on 04.03.2003 by Delhi High Court on petition

challenging chargesheet

e) Supplementary Chargesheet was filed on 18.08.2005

f) HC petition challenging chargesheet withdrawn on 04.03.2010

g) HC petition challenging summons dismissed on 04.06.2010: The HC

order states “Learned counsel for the petitioner states that they

should be permitted to question and to challenge the summoning

order which was passed on 18.01.2003 on merits. I do not think

this should be permitted. As noticed above, the summoning order

was challenged in petitions which had remained pending in this

court from 2003/2006/2007 till 04.03.2010. The petitioner then

withdrew these petitions as pointed out above. It will not be proper

to allow the petitioner to once again raise the same questions after

they had withdrawn the petitions, which had remained pending in

the High Court for 3-6 years. In these circumstances the petition is

dismissed.”

h) SC dismissed appeal and upholds above HC order on 09.08.2010

FIR No. 99/2002

a) FIR was registered on 19.02.2002

b) HC dismissed petition against the FIR on 24.03.2005

c) SC dismissed appeal challenging above HC order on 03.07.2006

d) Chargesheet was filed on 16.01.2007 u/s 420/406/409/424/467/

468/471/471A/120-B IPC It charged Mr. S P Gupta and others

of M/s Sunair Hotels, Barakhamba Road, New Delhi with

cheating, fraud, criminal breach of trust, forgery, falsification of

accounts and criminal conspiracy.

e) Trial Court took cognizance and issued summons to accused on

12.03.2007

28

f) HC petition challenging chargesheet was withdrawn on 04.03.2010

FIR No. 148/2002

a) FIR was registered on 28.02.2002

b) Chargesheet was filed on 17.01.2006 u/s

384/406/409/417/422/465/468/471/ 500/120-B IPC: It

charged S.P. Gupta and others for extortion, criminal breach of

trust, cheating, fraud, forgery and criminal conspiracy

c) Trial Court takes cognizance and issues summons to accused on

13.02.2006

d) Supplementary Chargesheet was filed on 22.10.2007

e) HC dismisses petition challenging summons on 02.07.2009

f) SC dismisses appeal against the above HC order on 29.01.2010

g) HC petition challenging FIR was withdrawn on 04.03.2010

FIR No. 315/2005

a) HC directs registration of FIR on 24.08.2005. The HC order states:

“It is submitted that certain official files regarding the Department

of Company Affairs have been recovered from the accused persons

but no action has been taken by the police… Having heard counsel

for the petitioner, in the event, during investigation and

search/seizure, any document or register is seized relating to

Department of Company Affairs and cognizable offence is

disclosed, the police, shall register an FIR and proceed in

accordance with law.”

b) Petition seeking quashing of FIR dismissed as withdrawn by HC on

04.03.2010

c) Chargesheet filed on 30.08.2011 u/s 380/411/120-B IPC: It

charged S. P Gupta and others for committing theft and criminal

conspiracy.

d) Trial Court takes cognizance and issues summons on 15.09.2011

Mr. S P Gupta and others had been chargesheeted by the Delhi Police of

which trial court had taken cognizance for inter-alia:

a) Misusing the names of Mr. Rajiv Gandhi and Mrs. Sonia

Ganhi on the letter-heads.

b) Forging letters of many Members of Parliament

c) Stealing of 21 files from Ministry of Corporate Affairs

d) Many instances of cheating, forgery and fraud

29

Chidambaram seems to have put pressure on the Delhi government to

drop three FIRs against Mr Gupta. An application was filed on behalf of the

Delhi Government to withdraw some of these cases. However, the

application for withdrawal was itself withdrawn after this scandal hit the

media. He thus abused his position as the Home Minister to get cases

against his erstwhile client withdrawn after his client failed to have them

quashed through the courts. Copies of the newspaper reports are annexed

as (Annexure A48). This also amounts to criminal misconduct and needs

a thorough investigation.

30

Mr. Pranab Mukherjee

In July 2005, the Indian Express published a report that some documents

belonging to the Navy were leaked through a pen drive. This pen drive was

later found in the house of a Navy officer Wing Commander SL Surve.

These documents had been shared with Mr. Abhishek Verma, Mr. Ravi

Shankaran and Mr. Kulbhushan Prashar— accused in various defense

scams. In its investigations the Navy found three commanders, Mr.

Bijender Rana, Mr. Vinod Kumar Jha and Captain Kashyap Kumar, guilty

and they were sacked in December 2005. The investigation revealed that

the officers had leaked sensitive information about country’s naval strategy

and therefore put the security of the nation under threat. Despite the

findings of the Navy’s investigation no action was taken against the trio—

Mr. Abhishek Verma, Mr. Ravi Shankaran and Mr. Kulbhushan Prashar.

Neither was the case handed over to the CBI. The matter was closed.

The Outlook in 2006 came out with its stories stating that the leaked

documents also contained information about the money exchanged as

commission in Scorpene submarine. During the investigation of the Navy

document leak many emails were also found which indicate that the deal

to procure the Scorpene submarines which was entered into between the

UOI and Thales (a French Company) on 7th October 2005 was mediated by

the middlemen who have negotiated substantial commissions in the deal

extensively on behalf of persons in the Government and the ruling party in

total violation of the policy of the Defense Ministry which prohibits

involvement of any un-registered middlemen in any Defense deal. Copies of

the stories published in Outlook Magazine on 20th Feb. 2006 and 27th Feb.

2006 are enclosed herewith as Annexure A (Colly).

In one of the emails, Mr. Verma wrote to chief of Thales (the French

company which had bagged the contract for the Scorpene submarine) in

response to his questions:

Question 1: “He would like to talk to a person nominated by the government

like a treasurer of the Congress party or any similar person. Because four

per cent commission was impossible.”

To which Mr. Verma replied:

“After meeting those two people he would have to talk to me. I hope Thales

doesn’t feel that Congress party has some shop and he is talking to them. I

will represent them (Congress) in the entire deal. According to Thales how

much are they willing to spend on the project?”

On July 13, 2005, chief of Thales sent a mail to Mr. Verma which

elaborates on the graft money given to him as commission.

Below is the email:

“Dear Abhishek,

31

We have made arrangements for paying 4% commission to your

representatives on the Scorpene deal. Please tell your lawyers to contact us

for the paper work.

Jean Paul Perrier”

Despite such incriminating evidence of graft and putting the security of the

nation in danger the then defense minister Sh. Pranab Mukherjee didn’t

give orders for investigation into the Scorpene submarine deal. Ironically,

the government gave orders to CBI to investigate how the documents got

leaked but didn’t ask it to investigate the corruption charges in those

documents. Copies of some of these emails are enclosed herewith as

Annexure B (Colly).

Ironically, on 12th February 2006, Mr. Pranab Mukherjee, who was then

Defense Minister, said in a TV interview that there was no need to act

against these men as the information that was leaked pertained to the

commercial activities of the Navy. According to him it was commonplace

for brokers to indulge in such acts in order to gain information pertaining

to commercial activities. Copy of the interview telecast on a TV channel is

enclosed herewith as Annexure C.

After this, Mr. Ravi Shankaran was even given permission to leave the

country. After much hue and cry, the government was forced to order the

CBI inquiry in Navy War Room leak case but again Sh. Pranab Mukherjee

made a statement in the Parliament that this inquiry was not in respect of

Scorpene Submarines. Copy of the statement made by Sh. Mukherjee in

the Parliament on 18th Feb. 2006 is enclosed herewith as Annexure D.

In its charge sheet against Abhishek Verma and other accused in Navy

War Room leak case, the CBI clearly stated that the information that was

leaked was sensitive and could have posed a threat to nation’s security.

The documents contained information about the future purchases and

preparedness of the Indian Navy.

Even though no investigation regarding ‘Scorpene’ deal has been done by

the CBI, the facts which have emerged from the said charge-sheets of the

CBI corroborate many of the aforementioned allegations.

As per the charge sheet, Abhsihek Verma was associated with Atlas Group

of companies, which deal in defense supplies and whose main source of

income is through foreign remittances. It says that he received pecuniary

benefits from the foreign companies having interest in various defense

procurements. It has been clearly established that Ravi Shankaran,

Kulbhushan Parashar and Abhishek Verma were very close to each other

and all of them were associated with Atlas group of companies which deal

in defense supplies. It has been established by both the chargesheets that

Abhishek Verma, Kulbhushan Parashar and Ravi Shankaran were three

32

civilian beneficiaries of ‘War room Leak’. One of the most revealing finding

in the second charge-sheet is the business connection of M/s Atlas

Defense Systems with Thales Group of companies. Further, the second

Charge sheet also proves that Abhishek Verma has connection with Ms.

Gwendolyn Berger who was acting as ‘International Liaison Officer’ for

Thales as apparent from her business card. It appears from the 1st charge-

sheet that much of the evidence was destroyed because of delay in

ordering an investigation. Copies of the charge sheets filed in Navy War

Room leak case are enclosed herewith as Annexure E (Colly).

A Public Interest Litigation was filed by an organization viz. Centre for

Public Interest Litigation in the Delhi High Court seeking an independent

investigation into the allegations of payment of commission in the

Scorpene submarine deal. Pursuant to the High Court order the CBI

conducted a preliminary enquiry and filed a report before the court. It

appears that the CBI did not do any investigation into the emails, phone

records of the accused etc. and closed the case saying that no evidence

was found. The petitioner in the said PIL specifically asked for the CBI

report but the same was denied by the CBI claiming privilege. However it

appears from the email of C Edmonds Allen dated 16th April 2012 that the

aforementioned report was given to Abhishek Verma who was one of the

accused. Copy of C Edmonds Allen email dated 16th April 2012 along with

its attachments is enclosed as Annexure F (Colly)

Thus, the involvement of Mr. Pranab Mukherjee in the Scorpene scam is

apparent from the following facts:

He was the defense minister who signed the Scorpene submarine

contract, and seems to have allowed Abhishek Verma to operate as a

middleman in this deal even though the official policy of the

government was to bar the middlemen in such contracts.

After the Navy war room leak was discovered, and the question arose

about the action being taken against the civilians like Abhishek

Verma, Ravi Shankaran and Kulbushan Parashar, who were

involved in the leak Pranab Mukherjee sought to downplay by falsely

stating that the leaked information was only of commercial nature.

He took not steps to prevent the civilians involved in the leak from

leaving the country and they were allowed to leave the country

He did not order any investigation in the Scorpene deal despite the

Outlook magazine’s detailed expose on the issue.

Under his watch, the CBI did a whitewashing preliminary enquiry,

and claimed privilege over the preliminary enquiry report while

secretly sharing it with the accused Abhishek Verma.

33

Despite Abhishek Verma’s partner Edmonds writing to the ED and

the CBI agreeing to share a lot of incriminating evidence against

Abhishek Verma and his role as a defense middleman, Mr. Pranab

Mukherjee took no steps to have the matter investigated.

The aforementioned facts prima facie constitute an offence under the

Prevention of Corruption Act and therefore a thorough and fair

investigation is required.

34

Mr. Sharad Pawar

Accused of having close ties with some of the most dangerous

criminals of the country:

In 2002 and 2003, Mr. Sudhakar Rao— then minister in Maharashtra—

alleged that Mr. Pawar asked him to be lenient against gangster Papu

Kalani— a criminal turned politician. Mr. Rao also alleged that Mr. Kalani

and Mr. Hitendra Thakur were given tickets at the behest of Mr. Pawar.

Annexure A

He was also accused of having relations with underworld don Dawood

Ibrahim in the past and currently he is accused of having ties with 2G

scam accused Shahid Balwa. Copy of the Indian Express report, Outlook

report and excerpts of the book ‘Lucknow Boy’ written by Vinod Mehta is

annexed as Annexure B (Colly)

Abdul Karim Telgi—the prime accused in the Telgi scam— had admitted

during the Narco-analysis test that the Rs 60,000 scam was a brain child

of Mr. Pawar. Copies of the newspaper reports are annexed hereto as

Annexure C (Colly).

Wheat Import Scam: - Mr. Pawar is accused of having given permission to

private and international companies to directly buy wheat from the

farmers. This led to a complete sell out of the FCI stock, and there was

nothing left to distribute through the ration shops. Therefore, the wheat for

consumption of common people had to be imported. While the government

had set a price of Rs 850 per ton for procuring from farmers; it went ahead

and imported wheat at more than Rs 1400 per ton and mostly through

select private companies. The government did not purchase wheat at

higher prices from the farmers directly. A copy of the detailed not on this

scam which had been issued in 2007 by Dr Kirit Somaiya who also sent a

complaint to CVC on this is annexed as Annexure D. Ironically, wheat

imported from these companies was rotten and not fit for human

consumption. Copy of the lab reports of State Public Health Laboratory of

May-Jun 2008 confirming the same are annexed as Annexure E.

Politicians across all parties raised a hue and cry on the issue, but no

investigation was initiated into the scam.

Pulses Import Scam: The Government of India in order to bridge the gap

between demand and production of pulses introduced two schemes for

import and distribution of pulses in the year 2006 and 2008. This was to

be done through four public agencies viz. NAFED, MMTC, PEC Ltd. and

STC. The import would have also checked the rise in the price of pulses.

However, it was found that this policy ended up benefitting four big private

traders at the cost of the public trading companies. As much as 6.08 lakh

MT of pulses were sold to these private companies. According to the CAG

35

report the public trading agencies incurred total loss of Rs 1201 Crore in

importing pulses but domestic prices did not fall as supplies were not

promptly made to the market. The CAG report further pointed out that the

Ministry of Consumer Affairs Food and Public Distribution headed by

Sharad Pawar failed to identify appropriate channels for the distribution of

imported pulses.

Instead of selling the imported pulses to people through the public

distribution system, they were sold to private companies at a rate lower

than the buying price and these companies in return sold the pulses at the

higher market rates.

Out of the total loss of Rs 1201 Crore, loss of Rs 897 Crore was incurred

due to the import of Yellow Peas in 2007 as it was imported without much

deliberation. The Government decided to import Yellow Peas on the ground

that they were reasonably good substitute for other types of pulses and

there prices were comparatively lower. However, the peas did not find

many takers in the domestic market and were sold after considerable

leading to aforementioned heavy losses to the importing agencies. Despite

this, the agencies continued to import the peas during the subsequent

years even when they had huge unsold stocks.

Copies of the India Today report is annexed as Annexure F and relevant

CAG report is enclosed herewith as Annexure G.

LAVASA Scam

Lavasa is a massive 25,000 acre hill station, valued at tens of thousands of

Crore, is being developed in the eco sensitive areas of Western Ghats. The

Ministry of Environment and Forests, New Delhi in its order 17th January,

2011 concluded as under:

"The discussions and analysis clearly brings out the fact that M/s LCL

is in violation of the (i) of the EIA Notification, 1994 (ii) EIA Notification,

as amended in 2004; and (iii) the EIA Notification of 2006. The site

visit Report has brought out the nature and magnitude of the

environmental damage caused by the project. As such, the

construction activity is unauthorized, being in violation of the

above three Notifications and is also environmentally damaging."

Copy of the Order dated 17th January, 2011 of the Ministry of Environment

and Forests is annexed as Annexure H

In this reference, among many other serious issues, the following points

become apparent:

1. The initial directors of Lavasa Corporation, inter alia, were Supriya

Sule, daughter of Sharad Pawar and her Husband Sadanand Sule

having about 21 per cent shares. Supriya Sule has been Member of

Parliament for two terms. There were certain other persons who are

36

known to be close to Sharad Pawar who too were Directors of the

Company. This clearly shows the intimate connection of Sharad

Pawar with Lavasa whose construction has been declared to be

unauthorized by no less than a statutory entity.

2. Supriya Sule her husband sold their shares around the year 2006

on highly undervalued rates. This is apparent from the fact that the

net worth of Sule as declared before the Election Commission did

not undergo a major quantum of change between the year 2004 and

2009. For a massive company having enormous land assets, the

worth of such shares were hundreds of Crores which were not

reflected in the property declaration before the Election Commission.

3. When the illegal construction was going on, Sharad Pawar who had

no statutory role to play in the construction since he was a Central

Minister, held a meeting in Lavasa where many concessions were

granted. When the project was unauthorized and which has been

declared illegal through a statutory order, this interference of Sharad

Pawar in the matter was highly disturbing. The minutes of the

meeting held are enclosed as Annexure I

4. Precious land of the irrigation department was given to Lavasa at a

pittance, without any auction, by the then Irrigation Minister and

now Deputy Chief Minister Ajit Pawar, who is a nephew of Sharad

Pawar and in blatant violation of the Maharashtra Land Revenue

(Disposal of Government Land) Rules, 1971. Stern objections were

raised by the conscientious Revenue Secretary Ramesh Kumar, on

which no action was taken. The office note in this reference is being

obtained. For the reason of this stand taken by whistle-blower Shri

Ramesh Kumar, Government of Maharashtra has victimized Ramesh

Kumar by refusing to go ahead in his appointment as Member

Maharashtra Administrative Tribunal even though the statutory

Selection Committee recommended his name.

5. It is also a known fact that Sharad Pawar personally took up the

matter, with the Environment Minister Ms. Jyanti Natrajan on

Lavasa, immediately after the uncompromising minister Jayram

Ramesh left the government. Ms. Natrajan obliged Pawar and

granted Environment Clearance under highly suspicious

circumstances. Ms. Natrajan took the unprecedented act of granting

Environment Clearance on a construction project where the

Competent Authority for granting Environment Clearance on

construction projects is the Maharashtra State Level Environment

Impact Assessment Authority and not the Ministry of Environment

and Forests, New Delhi. She also made the unprecedented order,

37

where she granted Environment Clearance without Lavasa following

the due procedure of public hearing and when the Ministry of

Environment and Forests, New Delhi order itself stated that the

construction took place in violation of the Environment Impact

Assessment of 1994, where there was no provision to grant

Environment Clearance without public hearing. It was misuse of

political power apparent allover

6. The Environment Department of Government of Maharashtra, under

the control of Environment Secretary, Valsa Nair Singh, extended an

enormous favour to Sharad Pawar by launching prosecution against

the Lavasa Corporation and its current Directors only. Ms. Valsa

spared Supriya Sule from prosecution even though when the

violation took place around the year 2004, Ms. Sule was the Director

of Lavasa. Incidentally, Ms. Valsa is also involved in the Adarsh

scam and the CAG has blamed the conduct of Environment

Department as 'wilful'. Ms. Valsa as the Chairperson of the

Maharashtra Coastal Zone Management Authority, had got a show

cause notice issued against Adarsh on a complaint made in August,

2008 and then she sat over the matter till the scam became open in

late 2010. Notwithstanding the favour bestowed on Lavasa, Ms.

Valsa has not only been spared from action in the Adarsh case, but

has also been allowed to stay as Environment Secretary for more

than 3 years when the law as contained in the Maharashtra

Government Servants Regulation of Transfer and Prevention of Delay

in Discharge of Official Duties Act, 2005, stipulates that an officer

need to be transferred in 3 years. In this way, during the illegally

extended tenure of Ms. Valsa, relatives of Sharad Pawar, were spared

from prosecution by Ms. Valsa.

7. There are a host of other violations related to many other legislations

and which all would not have happened but though the invisible

hand of powerful people.

The aforementioned facts prima facie constitute offences under Prevention

of Corruption Act and therefore a thorough and fair investigation is

required into Mr. Sharad Pawar’s role in:

1. Telgi Stamp Scam

2. Wheat Import Scam

3. Pulses Import Scam

4. LAVASA Scam

38

Mr. S M Krishna

S.M. Krishna was the Chief Minister of Karnataka from 1999 to 2004. He

has been serving as the Minister of External Affairs since 2009.

The Government of Karnataka under Mr. Krishna in its orders dated

15.03.2003 de-reserved for private mining an area of 11,620 square

kilometres in the State, meant for State exploitation/mining and notified

the surrender of an area of 6,832.48 hectares of prime iron ore land

respectively, which has paved way for distribution of public assets to select

private entities. The entire exercise was undertaken in a matter so as to

benefit only a select few entities.

The Lokayukta of Karnataka in his report dated 18.12.2008, went into the

depth of the entire issue and gave a detailed report on the said scandal.

Relevant chapter of the said report is annexed as Annexure A. The said

report stated:

“The information wanted by the Cabinet Section was whether the

statement in the Cabinet note that de-reservation is proposed in forest

areas which have lost vegetative cover is factually correct. That

information has not been furnished by the Forest department. Cabinet

section did not pursue the matter. Without getting that information the

subject was placed before the Cabinet and the proposal was approved

by the Cabinet. The Cabinet has not been informed of all relevant and

necessary facts. De-reservation order as such is not found in file but a

notification dated 15-03-2003 informing the public that those lands

are available for allotment to the public is found in the file. It is clear

from the above that though the considered decision of the Government

was not to de-reserve forest land and strategic mineral bearing areas

like iron-ore, manganese, chromate and lime-stone, that aspect was

not properly verified and reserve forests and State forests and

strategic mineral bearing areas have been de-reserved.”

On the basis of the facts stated in this report, a complaint was lodged

against Mr. Krishna and others alleging that during his tenure as the Chief

Minister of Karnataka, he had de-reserved thousands of acres of reserve

forest land in Bellary and elsewhere and sanctioned it to private companies

in the year 2003, despite contrary decisions of the then Minister for

Forests and the then Secretary to the Government, Forest Department,

who had expressed disagreement for de-reservation. These acts resulted in

destruction of vast forest area and led to large scale illegal mine. SM

Krishna clearly abused his position as the Chief Minister of Karnataka and

illegally amassed wealth in the name of his family members, including

children, in- laws and in the names of erstwhile very close fellow cabinet

members. The de-reservation order which is stated to be the decision of

39

cabinet meeting held on 16.12.2003 has been destroyed. The notification

dated 15.03.2003, notifying the public about availability of de-reserved

forest lands to public was found in the file. It is alleged that even the

notification is not in conformity with the Forest (Conservation) Rules, 2003

which under Rule 6 requires mandatory approval by the State

Government. The malafide, illegal and anti state, corrupt intention of de-

reserving forest area vide notification dated 15.03.2003 is demonstrated by

sudden spurt of issue of 82 permits in the year 2004 and 59 permits in the

year 2006. The above acts were the beginning of destruction of reserved

forest area and advent of illegal mining in the state of Karnataka,

particularly, in the District of Bellary.

On the said complaint, the Special Court, Bangalore vide order dated

03.12.2011 referred the matter to Lokayukta Police for investigation. The

said order is annexed as Annexure B. He held:

“In the overall circumstances of the case, after perusing the complaint,

list of documents and the references made in the compliant with

reference to documents, I consider that it is just and proper that a

thorough and fair investigation by the Competent authority is

necessary in the ends of justice, law and transparency.”

It is to be noted that Mr. Krishna had neither been summoned nor

arrested. Only an investigation had been ordered. But to prevent even that

he approached the Karnataka High Court.

On careful consideration of the report of the Lokayukta and the events

preceding cabinet meeting held on 16.12.2002, consequent notification

issued on 15.03.2003, the High Court of Karnataka in its order dated

20/01/2012 in Criminal Petition No. 6920/2011, which sought quashing

of the complaint, opined that in the matter of de-reservation of an area of

11797 square kilometers, there has been contravention of relevant

provisions of Forest (Conservation) Act, 1980 and Forest (Conservation)

Rules, 2003. The High Court held:

“We are but unable to appreciate that the Lokayukta report cannot be a

basis for initiating any lawful action against those who are involved in

unlawful acts in an illegal manner. One should not forget that the office of

the Lokayukta is held by a former judge of the Apex Court. It is difficult to

assume or presume that the said high authority would give a report without

any material evidence whatsoever. Therefore we are unable to digest the

contention that the Lokayukta report cannot be a basis for even to initiate an

action against an illegal act.”

The High Court accordingly upheld the order for investigation into the

allegations. A copy of the order of the Hon’ble High Court is annexed as

Annexure C.

40

Against the said detailed order of the High Court, Mr. Krishna approached

the Supreme Court seeking an immediate stay of the investigation.

Supreme Court has stayed the said investigation and the matter is

pending. The order of the Supreme Court is annexed as Annexure D. The

above shows the extent to which Mr. Krishna went to ensure that no

investigation takes place on the issue of de-reservation of forest land,

leading to a conclusion that he has a lot to hide. The facts as brought out

by the Lokayukta report leave no room for doubt that a thorough

investigation is necessary in the case.

41

Mr. Kamal Nath

Rice Export Scam

In October 2007, the central government had imposed a ban on export of

any kind of rice except Basmati rice. This decision was taken so as to

decrease the inflation in the country. There was an apprehension that the

availability of rice will decrease in the ration shops. To prevent this

scarcity the government took the decision of imposing the ban. Everybody

appreciated this step taken by the government of India.

India is a huge exporter of rice in the international market. As soon as

India stopped the export of rice, the price of rice in the international

market increased from $350 per ton to $1000 per ton. During this time it

has come to light that a few selected private companies were allowed to

circumvent this ban and make huge killing of around Rs 2500 crore. Mr

Kamal Nath, who was the commerce minister at that time, figures

prominently in the scam.

Within three months of imposing the ban on the export of rice, in Jan

2008, the central government stated that the ban imposed on export of rice

had led to scarcity in many poor countries and hence on the basis of

humanitarian grounds, India should export the rice to those poor

countries at subsidized prices. As soon as the news came out, 21 African

countries sent letters to the foreign ministry desiring to purchase rice from

India.

The Governments of Sierra Leone and Ghana wrote to our ministry that

rice should be made available to them at low cost. Usually, such trades

happen between two governments. However, in this matter these foreign

governments mentioned some private companies in India and asked Indian

government to export rice through these companies only instead of sending

rice directly to their country. Usually, in such matters government’s

companies like STC, MMTC, PEC Ltd. etc export the material from the

Indian government, but in this case rules were kept aside and the Indian

Government gave the permission to buy and export the rice to these

private companies. Indian Government didn’t even have the control on

what price those companies bought the rice from India and at what price it

was sold to those countries. Not just this, the Indian Government didn’t

even care to check whether the rice, after going out of India, reached those

countries or ended up in the open market. It came to light that the

companies sold the rice to those countries on International rates. If those

countries wanted to buy the rice on international rates only, then what

was the need for them to buy it from India only? They could have bought

rice from the international market. In this import and export matter

neither there was a profit to India nor to the people of those countries.

42

Here the profit was only for those companies who bought rice on a very

cheap rate and sold them at the international rate. It seems quite evident

that all those ministers who gave the permission to these companies to do

so also profited.

In one case, a Letter of Credit (LOC) came from a company in Switzerland

rather than from these countries. All this came to light when the

government in Ghana changed. When the new Government started the

investigations of the corruption done by the old government they came to

know that ex- foreign ministers along with few ministers of our government

had done a huge scam on the name of import-export. The Government of

Ghana on 13 Aug, 2009 sent a seven page letter, in which they demanded

that there should be an investigation on the then Foreign minister Mr.

Pranab Mukherjee and the then Commerce minister Mr. Kamal Nath, in

relation to this matter. Stories published in Outlook dated 27 July 2009

and 17th Aug 2009 along as Annexure A (Colly). Copy of the letter from

Govt. of Sierra Leone dated 31st March 2009 and copy of the letter from

Govt. of Ghana dated 13th Aug 2009 is enclosed herewith as Annexure B

(Colly)

Niira Radia tapes:

In Niira Radia tape, Mrs Radia is talking to the ex-chief of CII, Mr. Tarun

Das. Mr Das tells her that in his new ministry Mr Nath can make his 15%

as well as serve the nation. This conveys that Mr Nath as a commerce

minister has an image of an agent who works on 15% commission. Copy of

the excerpts along with the CD from Niira Radia tape is annexed hereto as

Annexure C (Colly).

Protecting Corrupt official:

When Mr. Nath was Transport Minister, CBI had asked his permission to

investigate against Mr S I Patel, who was a member of National Highway

Authority of India (NHAI). A scam of Rs 10,800 crores about the contract of

NH-69 came out at that time. This contract was given to a company

OSEPL of Delhi. CBI arrested many officers of OSEPL and NH-69 during

various raids and charged them with corruption over the allotment of this

contract. During these raids the CBI got Rs 1.86 crore cash as

unaccounted money. Even after these strong evidences Mr. Nath didn’t

give permission to investigate against the said officer. He even increased

Mr Patel’s holidays till he got bail from the court. It got worse when even

after this NHAI maintained the contract with the alleged company OSEPL.

The aforesaid fact clearly suggests that Sh. Kamal Nath is also involved in

the aforesaid scam and therefore, he was blatantly trying to protect one of

the accused. Copies of the reports published in Indian Express and

Outlook are enclosed herewith as Annexure D (Colly).

43

The aforementioned facts prima facie constitute offences under Prevention

of Corruption Act and therefore a thorough and fair investigation is

required into Mr. Kamal Nath’s role in:

1. Rice export scam

2. NH-69 scam

44

Mr. Praful Patel

Mr. Patel, as minister of civil aviation, through his deliberate and mala fide

decisions and actions made the Air India and Indian Airlines suffer heavy

losses to the tune of thousands of crores. He drove the airlines for a huge

fleet expansion program in which purchase orders for 111 aircrafts were

given. This unnecessary expansion was made without any proper study

and without any transparency. The purchase orders of the aircrafts were

given costing a whopping Rs. 67,000 crores. Loans were taken from US

and Indian banks to finance the same and today the airlines are deep in

debt and suffering huge losses. And also when aircrafts were being

purchased, more and more aircrafts were taken on lease thus forcing

additional loss and making the need for purchase redundant.

Apart from this, through deliberate and mala fide decisions, the major

profit making routes and timings were given to one or two private airlines

causing a huge loss of market share to the national carriers. Foreign

airlines were given unrestricted entry into India and major routes were

given to them without taking any reciprocal benefits for Air India. Despite

warning that these actions would result in heavy loss of market share to

our national carrier, the civil aviation ministry continued with its

unprecedented reckless actions. This was done when the ministry had

forced Air India to purchase a large number of planes.

The Parliamentary Standing Committee on Transport, Tourism and

Culture has severely criticized the government on its aircraft acquisition

program. Copy of the said report is annexed as Annexure A. The said

committee comprising of 10 Rajya Sabha Members and 21 Lok Sabha

Members cutting across party-lines in a detailed and unanimous report

dated 21.01.2010 had made the following observations:

“Aircraft Acquisition Programmes of the erstwhile Air India and

Indian Airlines were finalized in haste.”

“The entire aircraft acquisition programme lacked required

transparency.”

“Reasons for going ahead with huge purchases by the Ministry

of Civil Aviation despite Air India and Indian Airlines not having

the capacity to support it, remains unknown to the Committee.”

“It, therefore, recommends that this aspect needs to be further

probed to fix responsibility for taking such an ambitious

decision that has become big financial liability.”

45

Apart from the purchase of aircrafts, a large number of aircrafts were

taken on lease by Air India simultaneously. It adopted standard lease

agreement drafts for taking acquiring aircraft on lease which did not have

an early termination clause. In view of very low load because of large scale

aircraft acquisition, several flights, especially overseas flights, were

running almost empty and at huge loss. Air India could not even terminate

the lease agreements since in that case it would have to pay all costs and

lease rental differentials.

The Parliamentary Committee on Transport in its analysis concluded:

“A decision to go for…lease of aircrafts was taken to increase

market share without due considerations regarding proper route

study and marketing or pricing strategy.

The Committee observes that aircrafts were dry/wet leased

even while aircrafts acquisition programme was going on. The

Committee feels that aggressiveness shown in leasing of

aircrafts has now turned out to be an unviable proposition. It

raises genuine doubts about the Government’s approach

towards the entire issue.

The Committee is of the opinion that it has led NACIL into a

morass from which it is very difficult to come out.

The Committee could not comprehend why the NACIL

Management and the Ministry of Civil Aviation went ahead after

2005 with the expensive proposition of leasing of aircrafts that

too without any exit clause. The Committee also notes that even

after the new aircraft delivery to NACIL, the company continued

to lease aircraft or renewed the leases on some pretext or the

other, which caused huge loss to the company at the time of

recession, low seat factor and capacity underutilization. All

such decisions taken by the Management and the Ministry of

Civil Aviation had ultimately resulted in big financial loss to the

company.

The Committee recommends that all the lease agreements

maybe reviewed and appropriate action may be taken in cases

where agreements were not based on sound business

prudence.”

46

On the directions of the Civil Aviation Ministry, Air India withdrew its

services from many profit-making routes. Private operators were the

biggest beneficiaries of this decision as they took all those routes and a

bigger market share. Air India, which also has a social responsibility to ply

at even non-viable and non-profit making routes, was the biggest loser as

it lost all its profit making routes to private airlines. Air India also gave

away its routes to private and foreign operators without taking any

reciprocal benefits.

The Parliamentary Committee on Transport had noted and recommended:

“Air India started to withdraw their services from the lucrative

and profit earning routes in the name of route rationalization

and simultaneously opened door for private operators.

Private operators were favoured in the route dispersal

guidelines and more and more bilaterals were handed over to

the private airlines on a platter.

The Committee therefore recommends that the decision to open

the highly lucrative international air markets to/from India may

be probed by a suitable agency and all those bilaterals must be

reconsidered and reviewed and responsibility may be fixed for

giving away the national rights.

The Committee strongly recommends that an inquiry maybe

conducted to find out why such a large number of bilateral were

granted to foreign players.

Committee notes that services are being withdrawn from

lucrative sectors by NACIL paving the way for introduction of

services by the private operators in the same sector. The

Committee fails to understand the logic behind this move and

feels that this move will definitely fill the coffers of private

operators.

Committee apprehends that there appears to be a nexus

operating…to favour the private operators.”

Now, the CAG has given its report on aircraft acquisition and the role of

the ministry. The said report read together with the facts and documents

which are on record in the instant case, conclusively show how the

ministry pushed the airlines into a mammoth purchase that was a recipe

47

for disaster. CAG has also noted how the terms were changed to the direct

benefit of M/s Boeing. Copy of the summary of the CAG report is annexed

as Annexure B. The major findings of the CAG are:

a) Air India’s project report of January 2004 proposed acquisition of

28 aircraft. However, by November 2004, Air India changed their

fleet acquisition plan and submitted a revised proposal for

acquisition of 68 aircraft. The sequence of events upto November

2004 clearly demonstrates that the Air India hastily reworked its

earlier acquisition plan and expanded its requirement. This

increase in numbers does not withstand audit scrutiny

considering the market requirements obtaining then or forecast

for the future as also the commercial viability projected to justify

the acquisition. The acquisition appears to be supply-driven.

(Para 3.1.4.1 and 3.1.4.2)

b) A programme which was under consideration from 1996 and

took 8 years to progress upto Government level for purchase of

28 aircrafts suddenly picked up speed after August 2004 and by

December 2005 Government signed contract with Boeing for 68

aircrafts. (Para 3.1.7)

c) Many of the key assumptions underlying the revised project were

flawed. (Para 3.1.4.2)

d) No benchmarks for the cost of the aircraft were set before

negotiations were initiated with the manufacturers. (Para 3.1.7)

e) The entire acquisition was to be funded through debt. This was a

recipe for disaster ab initio. (Para 3.4)

According to the CAG, the fleet expansion programme “does not withstand

audit scrutiny.” CAG further says that it “was a recipe for diaster ab initio

and should have raised alarm signals” in the Government. Air India, the

erstwhile Air India prior to merger, had a turnover of between Rs 7500-

8000 crore in the three years preceding the placement of aircraft order in

2005. Air India's profit, if it made, ranged from Rs 90-133 crores in the

preceding five years. Air India's cumulative profit in the 10 years preceding

the placement of order was around Rs 750 crore. CAG report states that

the repayment of debt taken for aircraft acquisition will be financed

through revenue generated by Air India. Considering that the cost of 68

aircraft ordered from Boeing was around Rs 35000 crore, and the

repayment of loan was to be done through internal accrual, meant that Air

India must make a profit of at least Rs 2500 per annum, even if interest

liability is taken as zero for the sake of argument. In the aviation industry

48

no airline worldwide, including Singapore Airlines, British Airways, makes

a profit of more that 3-4 percent of it's total revenue. If Air India was to

make a profit of Rs 2500 crore it was therefore expected to have a revenue

of approximately Rs 60000 crore - meaning a stupendous jump from a

paltry Rs 7500 - 8000 crore. Air India's revenue has since the induction of

aircraft began in 2007 fallen from approximately Rs 17000 crore

(combined revenue post merger) to Rs 12500 crore in the financial year

ending March 2011. These facts clearly show that aircraft acquisition

proposal was ill conceived and a recipe for disaster, as the CAG has found

in its report.

The above averments have found some corroboration in some of the

intercepted conversations of Ms. Niira Radia tapes which are now in public

domain. Transcripts of the said conversations are annexed as Annexure C.

Under the Prevention of Corruption Act 1988, a public servant is guilty of

criminal misconduct under Section 13 of the Act if he abuses his authority

to give any pecuniary benefit to any person, or if uses his position to give

pecuniary benefit to person without any public interest. This crime has

already been committed for which Mr. Patel needs to be proceeded against.

Also, since these aircrafts purchase deals are known to involve huge

kickbacks, the offences of bribery also need to be investigated.

49

Mr Vilasrao Deshmukh

Adarsh Society Scam:

Mr. Deshmukh with the help of the then Urban Development Department

Secretary Shri Tiwari, got the width of the road deleted from 60 to 18 m

with the malafide purpose of creating a plot of land for Adarsh Co-

operative Housing Society. Thus, by this mechanism of reducing width, a

plot for Adarsh was created from this 42 m wide land released from road

reservation. Needless to add that road width cannot be reduced to

accommodate the land requirements of a private society mainly of

politicians and their benami nominees and is a blatant violation of section

22 of the Maharashtra Regional and Town Planning Act, 1966.

After Shri Deshmukh got the road width reduced, he gave instructions to

the Revenue Department to put up the proposal for allotment of land to

Adarsh Co-operative Housing Society claiming to give flat to Kargil War

Widows.

The basic allotment of land was done to Adarsh through a Letter of Intent.

Under highly suspicious circumstances, this file related to the issuance of

the Letter of Intent was kept with the then Chief Minister Shri Vilasrao

Deshmukh for about 5 months, during which time the manipulation in

names was taking place. This file was cleared by Mr. Deshmukh for the

issuance of LOI on the last day of his post as Chief Minister i.e. on 16

January, 2003.

A manipulation of noting was done. The file was shown to have been

received from the Office of Chief Minister on 16th January, 2003 and then

critical elements of noting were erased. This file was again shown to have

been received back from the office of Chief Minister on 18th January 2003.

As per the High Court ruling and also Coastal Regulation Zone

Notification, 1991 alteration of Development Plan in Coastal Regulation

Zone Notification, 1991 areas have to be done only by permission of the

Maharashtra Coastal Zone Management Authority – no such reference was

made before the width of the road was reduced to accommodate Adarsh

and for altering the Development Plan in this reference.

The proposal for allotment of land to Adarsh was put up on specific orders

of the then Chief Minister Vilasrao Deshmukh after hectic lobbying was

done by Kanhaiyalal Gidwani. Under highly suspicious circumstances,

Gidwani had a series of personal meetings with Vilasrao Deshmukh.

50

Notwithstanding sceptical, unclear and hazy recommendations of the

Finance Department, Shri D.K. Shankaran, IAS, then Revenue Secretary

recommended the case for LOI and then his son was made a Member of

Society and Shri Deshmukh raised no objection. As per law, there has to

be a clear-cut positive recommendation of the Finance Department which

was not done in this case.

Even though the file purported to clearly specify the list of names, yet no

specific list was finalised when Mr. Deshmukh issued orders for the

issuance of LOI and that such names were not shown on the notesheet.

This list was added prepared and shown to be added with the LOI. This

also seems to be a case of manipulation of documents.

During his second tenure as Chief Minister, Shri Deshmukh issued orders

for deletion of BEST (Brihan Mumbai Electric Supply and Transport

Undertaking) depot reservation on the grounds that the BEST Undertaking

did not need the plot even though they needed the plot. Actually, the BEST

had issued no such letter clearly stating that they did not need the land. In

this way, the provisions of section 50 of the Maharashtra Regional and

Town Planning Act, 1966, to release reservation when plot is not required

by the authority in whose favour reservation was made, this law was

fraudulently used.

It was required for Shri Deshmukh to have taken permission of the

Maharashtra Coastal Zone Management Authority before the BEST

reservation was deleted. However, he did not take any such permission.

More specifically, the Finance Department had agreed only to an in

principle approval for giving BEST FSI on the condition that the

Environment Clearance shall be obtained from the Ministry of

Environment and Forests, New Delhi. This condition was flouted.

Copy of the CAG report on Adarsh Scam is enclosed as Annexure A

Allotting Land to Film-maker Subhash Ghai Illegally:

Mr. Deshmukh allotted 20 acres of land to film-maker Subash Ghai for the

latter’s film institute for a price of Rs 3 crore. The CAG in its report notes

that the actual cost of the land is Rs 31.2 crore and the deal resulted in a

loss of over Rs 28 crore to the public exchequer. Recently the Bombay High

Court and the Supreme Court have termed the allotment as illegal and

cancelled it. The Bombay High Court noted that the allotment was ‘illegal’

and Mr. Deshmukh had misused his official position. It has taken strong

exception to the ex-chief minister’s misuse of his position and power.

Despite such strong observations by the court Mr. Deskmukh continues to

be a cabinet minister in the central government. Even the appeal against

51

the order of the High Court has been dismissed by the Supreme Court.

Copies of the order of the High Court dated 9th Feb 2012 and Supreme

Court dated 4th April 2012 are enclosed as Annexure B (Colly)

The issue of protecting money-lender father of a legislator in

Vidharba:

Mr. Sarangdhar Singh Chavan and his brother Mr. Vijay Singh Chavan

had borrowed money from money lender Gokulchand Sananda who is the

father of Congress MLA Mr. Dilip Kumar Sananda. Since Gokulchand was

charging them interest at the rate of 10 per cent per month, it became

difficult to repay the money and Gokulcand seized their land and

continued to harass him. Mr. Chavan went ahead and lodged a police

complaint against Gokulchand, but his son Dilip met with Mr. Deshmukh

and ensured that no action was taken by the police against his father.

Vilasrao Deshmukh summoned the collector at Buldhana and instructed

him not to take action against the Sananda family and this even finds

mention in the police register.

That left Chavan brothers with no option but to move court. The case was

first registered in the Bombay High Court and later moved to the Supreme

Court which while passing an order noted that due to this case ‘the soul of

the court has been shaken’. It further said that the case was about

benefiting only a small number of people by exploiting the interest of poor

farmers. “Those poor farmers who have taken loan from moneylenders and

have approached the governmental officials in order to seek legal redress

against the exploitation by these moneylenders had no hope left,” the apex

court had noted. The Supreme Court further upheld that the decisions of

Mr. Deshmukh were unconstitutional and were very much against the

aspects of equality and social values framed in the Indian constitution.

With this the court imposed a penalty of Rs. 10 lakh on the State

Government. Copy of the Supreme Court judgment dated 14th Dec 2010 is

enclosed as Annexure C

Despite such critical statements made by the highest court of the nation,

Mr. Deshmukh is still holding a post in the cabinet.

Accused of giving 2 lakh sq.metre plots to his family trust at a cheap

rates:

Mr. Deshmukh’s family is running a trust named, “Vilasrao Deshmukh

Foundation” and according to a CAG report, this trust was allotted 2 lakh

sq.metre land in Latur district at throw away prices by Maharashtra

Industrial Development Corporation for establishment educational

institution. The land was allotted even when there was nothing on record

to indicate that the institution fulfils the eligibility criteria as laid down by

MIDC in its policy of allotment of plots to the educational institutions.

52

Further, the area allotted to the trust was in excess of the area specified in

the policy. Not just that, the additional area was not allotted at the

prevailing rates for industrial plots as specified in the policy. As per the

CAG report this resulted in a loss of Rs. 1.119 Crore to the corporation.

Copy of the relevant page of Chapter 4 of the CAG report of Jan 2008 is

enclosed as Annexure D. It appears that a PIL challenging the allotment of

land has been filed in Bombay High Court.

The aforementioned facts prima facie constitute offences under Prevention

of Corruption Act and therefore a thorough and fair investigation is

required into Mr. Vilasrao Deshmukh’s role in:

1. Adarsh Scam

2. Illegally protecting money lender’s father in Vidharba

3. Illegal allotment of land to the institution of Subhash Ghai

4. Allotment of 2 lakh square meter land to his family trust at

throwaway prices

53

Mr. Virbhadra Singh

Mr. Virbhadra Singh was the chief minister of Himachal Pradesh from

1983 to 1990, 1993 to 1998 and 2003 to 2007. During these tenures he

faced many allegations of corruption:

Illegal recruitments/postings of government officials through ‘chits’:

It is alleged that when he was the chief minister from 1993 to 1998, official

recruitments and postings in his government were done illegally through

the ‘chit system’. In 1998 two committees, including renowned IAS officers

Mr. Harsh Gupta and Mr. Avay Shukla, were formed to probe the

allegation. In its report, submitted in 1999, the committee upheld the

allegations against Mr. Singh and his ministers. The report in its findings

mentions that a number of U.O. notes were issued to various departments

by the then CM (Virbhadra Singh) Office /minister during the period. It

also mentions that many recommendations were made to the

recruiting/appointing authorities through telephone calls and word of

mouth etc. Despite the Harsh Gupta Committee having clearly indicted Mr

Singh and some of his ministers, no action was taken against him. The

High Court of Himachal Pradesh in a PIL in 2005 had directed the

Vigilance Department to register a case and probe the persons who had

been instrumental in making these appointments. Pursuant to the High

Court order, an FIR was registered but it appears that no credible

investigation was carried out and no action was taken against Mr. Singh.

Copies of the reports of the two committees report along with the

Hindustan Times report dated 7th Nov 2005 are enclosed as Annexure A

(Colly). Copy of the Himachal Pradesh High Court order dated 7th Nov

2005 and FIR dated 5th January 2006 is annexed as Annexure B (Colly).

CD Scam:

An audio recording of Mr Singh and his wife in discussion with former IAS

officer Mr. Mahendra indicates their involvement in illegal money

transactions. Although Mr Singh claimed that the CD was fabricated to

frame him, it appears that the CFSL lab in Chandigarh have confirmed the

voices belonged to him and his wife Mrs. Pratibha Singh (former Member of

Parliament). They were chargesheeted with corruption by the state

Vigilance department vide article 13(1) (d) and 13(2) of the anti corruption

law and on 3 August, 2009, FIR No. 27/9 was filed. Mr. Singh appealed to

the High Court seeking the dismissal of the FIR against him, but on

September 3, 2010, the high court dismissed his appeal. The matter is

pending in the court for framing charges against him where he Mr.

Virbhadra Singh has been seeking repeated adjournments.

Interestingly Mr. Singh also pleaded with the court to transfer his case to

CBI. As he is a minister in central government and CBI comes directly

54

under the control of central government, this could have only helped him.

But that wasn’t to be as the high court dismissed his appeal seeking the

transfer of the case to CBI. Copies of some of the newspaper reports

regarding the CD Case as well as copy of CD are annexed as Annexure C

(Colly)

It is unfortunate that Mr. Virbhadra Singh who has been chargesheeted in

a corruption scam continues to be in the Union cabinet. However the

appointment and recruitment scam of 1993-1998 in which he is supposed

to have been the kingpin needs a thorough and independent investigation

by credible agency.

55

Mr. Kapil Sibal

RCL and RTL have been providing telecom services across the country

under Universal Access Service (UAS) licenses granted to them by the DoT.

While continuing with these UAS licenses, the DoT’s another arm -

Universal Service Obligation (USO) Fund Administrator – executed another

agreement with RCL & RTL for providing telecom services in the rural &

remote areas where the fixed/wireless telephone services had not reached.

Both, UASL and USOF agreements had different level of penalties for

delays in the rollout. However, only UASL had prescribed Rs 50 crore (per

Service Area) penalty for serious violations of the license agreements. This

penalty of Rs 50 crore was also applicable to services provided under

USOF agreement since the termination/suspension of services was

prohibited. In this regard, the relevant clauses of these license/agreements

are reproduced herein below: -

Clause 8.1 Section-VI (Operating Conditions) of USOF Agreement

“The terms and conditions as to prohibition of certain activities

of the BSO or CMTS or UASL agreement, as the case may be,

shall be binding mutatis mutandis.”

Clause 12.3 Section-III (General Conditions) of USOF Agreement

Notwithstanding any dispute or claim of the pendency of any

arbitration or other proceedings, the USP shall continue to provide

the service for the whole duration of the Agreement.

Clause of 30.3 of the UAS license

“The Licensee shall ensure continuity of services to its

customers unless License is Terminated or Suspended by the Licensor

for any reason whatsoever.”

Clause 10.2 (i) of UAS license

“The Licensor may, without prejudice to any other remedy available for

the breach of any conditions of License, by a written notice of 60

Calendar days from the date of issue of such notice to the Licensee at

its registered office, terminate this License under any of the following

circumstances:

If the licensee:

a) fails to perform any obligation(s) under the License including

timely payments of fee and other charges due to the Licensor;

56

Clause 10.2 (ii) of UAS license (Part-I General Conditions)

“The Licensor may also impose a financial penalty not

exceeding Rs 50 crores for violation of terms and conditions of

licence agreement. This penalty is exclusive of Liquidated Damages

as prescribed under clause 35 of this Licence Agreement.”

Hence, it is clear that violation (especially deliberate and unilateral serious

violations) of the license agreement by a licensee gives a right to the

government to either cancel the license or impose penalty of Rs 50 crores

per circle or both. Only in case where the government moves to cancel the

license, a notice of 60 days has to be given. Since RCL & RTL discontinued

(switched off / closed) the service at various places in rural India

unilaterally, without notice to either the Government or to the subscribers,

it was a serious violation. These places were spread across 13 telecom

circles across India, hence Reliance had violated its 13 license agreements

(since there is a separate license agreement for each circle), and all its 13

licenses were liable for termination and a maximum penalty of Rs 650

crores could and should have been imposed. However, Mr Sibal, for

unknown reason, saved RCL & RTL from this penalty as detailed in the

subsequent paragraphs.

On December 7, 2010, Reliance wrote a letter stating that it had switched

off its services effective from November 22, 2010. Hence Reliance had

simply shut down its services unilaterally and without any notice. This is a

serious violation of license agreement.

The USOF cell of the DoT had proposed a penalty against RCL & RTL for

“violation of the terms and conditions of Universal Service Obligation Fund

(USOF) agreement and UASL agreement by voluntary, unilateral and

unauthorized switching-off / closure of services to subscribers from USOF

sites without any notice.” A show-cause notice of 15 days was issued to

Reliance which stated that Reliance was in clear violation of the UASL

agreement. USOF cell issued a notice for a penalty of only Rs 50 crore. A

copy of the show-cause notice along is annexed as Annexure A.

Reliance neither restored the service nor did it reply to the show-cause

notice. It vide its letter dated January 5, 2011 asked for 6 weeks more time

to reply. USOF Administrator replied that Reliance’s request for more time

could only be considered if it first restored the services. Reliance again

wrote a letter on January 11, 2011 requesting for 6 weeks more time to

reply to show-cause notice. It however did not make its intention known

57

whether it intends to restore services or not. On January 12, 2011 USOF

administrator again asked Reliance to make its stand clear on restoration.

Reliance wrote back that it was still internally discussing the issue and

reiterated its demand for more time.

Under these circumstances, Director of USOF cell wrote a detailed note

recommending a penalty on Reliance of Rs 50 crores in terms of the show-

cause notice that Reliance did not reply. This note was sent to the

Licensing Cell of DoT which approved the penalty. A copy of the relevant

pages of this file is annexed as Annexure B. Then this file moved up and

was approved by all including Advisor Finance and Member Finance on

February 8, 2011. On February 9, 2011, Telecom Secretary who is also the

Chairman of Telecom Commission, approved the levy of the said penalty of

Rs 50 crore. A copy of the relevant page of DoT file is annexed as

Annexure C.

The file reached the office of the Telecom Minister Mr Sibal on the same

day i.e. on February 9, 2011. Thereafter, on 16.02.2011, Reliance wrote a

letter to Mr Sibal that it had restored the services. Based on this letter, Mr

Sibal on February 18, 2011 treated this serious violation by Reliance as a

mere “interruption” of services. While rejecting DoT’s stand of levying Rs

50 crore penalty Mr Sibal had stated that UASL agreement clauses should

not be invoked and penalty under USOF agreement for “interruption”

should be imposed. Mr. Sibal did not even verify whether services had

indeed been restored. This, in effect, reduced the penalty to a meager

amount. A copy of the note of Mr Sibal is annexed as Annexure D.

“Interruption” means a technical fault or other circumstances beyond the

control of the telecom operator that results in disruption of service.

However, here was a case of voluntary, unilateral and unauthorised

closure or shutting down of service permanently. Under the threat of

penalty, Reliance, as per Mr Sibal’s note, restored the service on February

16, 2011. The restarting of service by Reliance after three months of

shutting it down cannot be termed as a mitigating circumstances. This

would set a dangerous precedent, as then any operator can simply

unilaterally discontinue the service without notice and restore it

subsequently under threat of penalty.

Moreover, the action of Mr Sibal in reducing the penalty overruling the

unanimous view of the USOF branch and the entire telecom department,

including the Secretary who is the Chairperson of the Telecom

58

Commission, is arbitrary & illegal, both procedurally as well as on merits.

Why did Mr Sibal not insist on a proper reply to the show-cause notice

first? Why did he call it “interruption” when it was a clear case of

closure/discontinuation of service? Why did he not wait for a proper

verification as to whether Reliance had indeed restored service in all the

clusters where it had switched off? Why did he state that UAS License

agreement is not applicable and department must only proceed under

USOFA? Why did he not send the matter back to the USOF cell and to the

Department after receipt of the letter of Reliance? If there was a legal issue

involved, why did he not refer the matter to the Law Ministry? Why did he

not take the advice of telecom regulator Trai which is a statutory body to

protect the interests of consumers? Why did Mr Sibal not impose the

penalty of Rs 50 crores per circle and let Reliance challenge it in TDSAT if

it felt aggrieved?

In view of the above, it is clear that Mr Sibal acted in a way that protected

the interest of a corporation that had committed serious violation of the

license agreement. Mr Sibal ignored the fact that his duty is to promote

public welfare and safeguard the interests of consumers who in this case

were poor people in the rural and remote parts of India, who could not

have even approached courts against Reliance. Abusing one’s official

position to benefit a private party at the cost of exchequer is an offence

under the Prevention of Corruption Act. The above facts highlight the need

for a thorough investigation.

59

Mr. Salman Khurshid

Mr. Salman Khurshid has openly attempted to shield Reliance-Swan and

Essar-Loop in the 2G scam by abusing his official position as Corporate

Affairs Minister and as Law Minister to interfere in the 2G investigations.

According to the law a company cannot be given two licenses. Essar, a

telecom company operating in alliance with Vodafone, had already

acquired one telecom license, but it is alleged that the group opened a new

proxy company named ‘Loop’ and acquired another license. CBI,

Enforcement Directorate, Company Affairs and even the RBI stated that

‘Loop’ was a fraud company of Essar, but throwing the findings in wind

Mr. Salman, despite being the Law Minister, claimed twice in writing and

once while speaking to the media that ‘Loop’ was not a proxy company of

Essar group. Now CBI chargesheet has confirmed the fact that Loop was

nothing but a front company for Essar, as the entire decision making and

funding of Loop came from Essar.

This brazen support was not only limited to Essar. When Mr. Salman, was

the Minister of Company Affairs, he openly supported Reliance Telecom

owned by Mr. Anil Ambani. Reliance had acquired a telecom license, but it

floated a proxy company naming it ‘Swan’ through which it acquired

another license. Yet again Mr. Salman claimed that ‘Swan’ was not a

company of Reliance. Pertinently, the CBI which is investigating the 2G

scam has in the chargesheet stated that ‘Swan’ is owned by Reliance.

It is important to mention that the CBI had not asked Mr. Salman about

his opinion on the matter and it was the Essar group which had sought

his opinion. And Mr. Salman gave his opinion to mislead the CBI. This

happened despite the fact that the Supreme Court had warned that no

person should try to influence the CBI investigations. (Annexure A)

On April 13, 2009, the Ministry of Company Affairs (MCA), when Mr.

Murali Deora was its minister, had submitted a report to the DoT

indicating that Loop Telecom is controlled by Essar group. The relevant

part of this letter dated April 13, 2009 (Annexure-B) is reproduced below: -

Ministry of Corporate Affair’s letter dated April 13, 2009

to DoT

(a) The Company, Loop Telecom is owned, in turn, by

another company Santa Trading Pvt Ltd (STPL), which also

owns BPL Communication and BPL Mobile Communications.

(b) The Essar Group does not have any direct equity in STPL

Loop Telecom. It, however, holds 9.99% in Loop Telecom,

indirectly.

60

(c) Essar Group, however, has invested into unsecured, non-

convertible debentures of STPL, to the extent of Rs 1,592 cr

which is otherwise a small company having a paid up capital of

Rs 1 lakh only. STPL, in turn, has utilized these funds to invest

in BPL Communication in the form of equity share and

unsecured debentures. BPL Communication, in turn, has

invested in multi-operational convertible debentures issued by

Essar Investment Ltd. As a result of this chain of investments,

STPL has receivable due through BPL Communication, to the

tune of Rs 2,421 cr from Essar Investment Ltd, against an

investment of Rs 1,592 Cr.

(d) From the above, it appears that funds from the Essar

Group have been routed through STPL and BPL Communications

back to Essar Investments, in the process providing about Rs

800 cr of dues to STPL. Therefore, there are significant links and

benefits arising to the STPL from the financial transactions,

direct and indirect with the Essar Group. STPL has

operations/transactions which are substantially controlled or

influenced by Essar Group.

(e) The company, Loop Telecom, apparently a recipient of a

LOI/license for telecommunications has received some indirect

equity support from STPL via BPL Mobile Communications

(9.9%), but this is not sufficient to demonstrate control through

equity.

(f) From the shareholding pattern of related companies, it is

seen that STPL holds 85.75% of BPL Communications, which in

turn holds 78.99% of BPL Mobile Communications, which in turn

holds 51.24% of Loop Telecom. The investment made by the

Essar Group and other in STPL through non-convertible

debentures has gone to BPL Communications in the form of

equity (Rs 1,006 cr), preference share (Rs 175.8 cr) and NCDs

(Rs 410 cr) totaling Rs 1,592 cr. Therefore, STPL appears to

have been a conduit for investment of these funds in BPL

Communications which is one of the main shareholders

(48.76%) in Loop Telecom, with BPL Mobile Communications

holding 51.2%. Significantly, BPL Communications holds 73.99%

in BPL Mobile Communications.

(g) Therefore, while Essar Group is not an equity holder in

STPL, it has invested a huge amount in its NCDs and it would

appear that through the funding of STPL by the Essar Group,

61

equity has been provided to BPL Communications who is a 48%

owner of Loop Telecom, though not directly to Loop Telecom.

(h) In the light of above, Department of Telecommunications,

may examine their policy and regulations for eligibility for grant

of Letter of Intent (LOI) to Loop Telecom Pvt Ltd for grant of UAS

licenses.

Taking note of the above letter of the MCA, the DoT had on

September 18, 2009 (Annexure-C) proposed to issue a show-cause

notice (SCN) to Essar/Loop. The relevant part of this DoT’ note is

reproduced below: -

Extract of DoT’s note dated September 18, 2009

(6) Financial sense is corroborated by the findings of the MCA that

there is significant financial control of Essar group over STPL that

in turn owns 76.7% of equity of Loop Telecom. Thus Essar group

has significant control over Loop Telecom.

(7) The main objective of putting the clause quoted in para 3 above

is to ensure that one entity does not control two UAS Licensees in

the same service area. It is therefore suggested that the issue of

control through exaggerated debt funding by Essar group be made

a part of the proposed show cause notice to M/s Loop Telecom Pvt

Ltd.

However, no show cause notice has been issued by the DoT to the

company in this regard even though the DoT officers had attempted a draft

SCN way back in March 2011 (Annexure-D).

While the matter was still being investigated by the CBI, the DoT, under

Mr Kapil Sibal as its Minister, obtained an opinion from the Law Ministry

dated August 30, 2011 (Annexure-E) on the definition of “Associate”. The

Minister of Law & Justice, Mr. Khurshid, approved this note that bails out

Essar/Loop and also Swan/Reliance. This note gives cross-references of

various provisions around the word “associate” in a manner that rules out

any violation by Loop/Essar. Another important observation has been

made at para No. 4 of this note that the above clause No. 8 on cross-

holding is to be complied with only after the licenses have been issued,

and not from the date of application. This also is not correct. The

guidelines on UAS license reproduced above clearly stipulate that a

certificate in the specified format, issued by the Company Secretary on

cross-holding, must be submitted alongwith application for UAS license.

62

And the definition given to by the Law Ministry to the term “associate”

would completely defeat the object and purpose of clause 8 of UASL

guidelines which mandates that single group should not have control over

2 licensee companies.

The DoT sent this letter to the CBI on September 7, 2011 with the approval

of its Minister of Communications & IT Mr Kapil Sibal. This letter has been

used by the 2G scam accused Mr Shahid Balwa to defend his case in the

matter of Swan Telecom/Etisalat DB. This company too is accused of

violating cross-holding norms, similar to Loop/Essar matter. The CBI

termed this advice as unsolicited. (Annexure-F)

In a report of last year (Annexure-G), the Enforcement Directorate and

Reserve Bank of India had observed that Loop is owned and controlled by

Essar. Despite this, Mr Khurshid has gone ahead with his opinion in the

matter contradicting the findings of the other departments including the

CBI.

Interference in the investigation by the Union Ministers especially Mr

Salman Khurshid is apparent. Mr Khurshid has publicly given clean chit

to Essar/Loop. In this regard, various news clippings are filed herein and

marked as Annexure-H.

The Attorney General, whose opinion was sought by CBI, in his opinion

had listed out as many as 22 solid facts/instances as unearthed in CBI

investigation that made a clear cut case of cheating. (Annexure I)

But this did not stop Mr. Khurshid to again give a clean chit to Essar/Loop

in November 2011 by giving a detail note in favour of the company on the

official Law Ministry file. This came in response to a letter written by

Essar. (Annexure J).

Interference by Mr Salman Khurshid in this matter is not an isolated case.

He has done it in the case of Swan Telecom also while he was the Minister

of Corporate Affairs. Vide a letter dated December 24, 2010 (Annexure-K)

by MCA addressed to the DoT, which was also approved by Mr Khurshid,

clean chit was given on the violation of cross-holding norms by Swan

Telecom. This opinion was sent even after the CAG had serious doubts

over Reliance effective control over Swan, the unequivocal complaints that

had been made against Swan and the order dated 16.12.2010 of the

Supreme Court directing a court-monitored investigation. This opinion is

also being used by the accused before the courts while seeking quashing of

the charges.

Ironically, in both the cases, CBI ultimately disagreed with Mr. Khurshid

and went ahead in filing chargesheets against Reliance & Swan, and Essar

& Loop. (Annexure L)

63

Abusing one’s official position to benefit a party accused of serious

criminal offences apart from being punishable under Prevention of

Corruption Act, also makes him part of the criminal conspiracy.

64

Mr. G K Vasan

In the decade of 60’s and 70’s about 16 thousand acre of land belonging to

the Kandla Port trust was given on lease on meager rates. The companies

pay Rs 144, per acre, per annum despite the Ministry of Shipping own

guidelines clearly stating that the rent should be six per cent of the market

rate of the port land. It is said that the losses incurred due to this are to

the tune of Rs 2,00,000 crore.

In 2007 and 2008, the chief vigilance officer of the Kandla Port trust in his

report to the ministry of shipping had unearthed the entire scam. He sent

various reports to the Ministry of Shipping, however no action was taken.

In July 2008, he made a detailed report bringing out the role of Ministry of

Shipping in the entire land scam. The said report is annexed as Annexure

A. The said report had clearly indicted Jt. Secretary in the Ministry of

Shipping Mr. Rakesh Srivastava. The report stated that the land –worth

crores of rupees—was allotted on lease for a period of thirty years without

being auctioned or evaluated. Out of this land 9 thousand acres were

transferred to a single family. According to terms and conditions the lease

was not supposed to be renewed but in 1996 and 2000 it was renewed for

a period of four years each time. In 2004 when the lease on 37 out of 42

units ended, these families conspired with the top officials, the leases were

simply allowed to sit on that land without any lease and without paying

any rent.

Despite the scam, on July 13, 2010, the shipping ministry under Mr.

Vasan ordered for the renewal of 38 leases till 31st March 2011. On 11th

August, 2010 the Delhi High Court asked as the Shipping Secretary to

personally file an affidavit explaining how the said permission was given.

(Annexure B) The Secretary in his affidavit said that Jt. Secretary met the

Minister Mr. Vasan and got the leases renewed. (Annexure C) So here was

a clear case of abuse of ministerial power by Mr. Vasan in connivance with

a tainted officer.

Delhi HC on 11.03.2010 ordered CBI investigation. (Annexure D) CBI

asked the Ministry to move out Jt. Secy Mr. Rakesh Srivastava. (Annexure

E) Mr. Vasan rejected the request. Finally HC on 03.06.2011 directed that

Jt. Secy shall not deal with KPT matters and would not interfere with the

proble. (Annexure F) CBI in its Jan 2012 status report said that they have

recommended departmental action against Jt. Secy but the Ministry under

Mr. Vasan has rejected the recommendation. (Annexure G) HC asked the

CVC to look into the matter. On 16.05.2012, CVC told HC that it has

recommended to the Ministry to initiate regular departmental action

against Jt. Secy. (Annexure H) HC has now asked the Ministry to take a

decision on CVC's recommendation. HC also ultimately had to order

65

eviction of the unauthorized occupants, and that fresh leases would only

be awarded through auction. (Annexure I).

Therefore, from the above it is clear that Mr. Vasan abused his position to

let the scam continue to the detriment of public exchequer, he tried to

cover-up the scam and also to shield the accused. Therefore his conduct

needs a thorough investigation.

66

Mr. Farooq Abdullah

Jammu and Kashmir Cricket Association Scam:

Mr. Abdullah is the President of Jammu Kashmir Cricket Association. A

former treasurer of JKCA, Mr Ahsan Mirza, who is considered a close aide

of Mr Abdullah, had been suspended from the association for charges of

frauds. BCCI sends a lot of funds to JKCA to promote cricket in state. The

allegation against Mr Mirza was that he had opened bogus bank accounts

in various banks in the name of association and had siphoned off

association’s money (approximately Rs 30 crore), through these bogus

accounts. Mr Mirza has been suspended from the association and there is

a FIR registered against him. Mr Mirza had opened one such bogus

account in Khaniyar branch of J&K where association’s money was

stashed. Mr Abdullah had asked the Khaniyar branch to give a loan of

Rupees 2 crore to Mr Mirza on the basis of funds of association deposited

in that branch which is clearly illegal. Mr. Abdullah could not have

recommended allotment of a personnel loan to Mr Mirza on the basis of

organization’s funds. This shows close proximity between the two and also

shows a prima facie case of Mr. Abdullah being involved in the foresaid

siphoning of the fund of the Cricket Association. J&K High Court has also

issued notice to the JKCA in a PIL seeking CBI investigation. Copies of the

newspaper reports (Tehelka 13th March 2012, Pioneer dated 26th March

2012 & Indian Express dated 3rd April 2012) as Annexure A (Colly) along

with copy of the letter from Branch Head J&K Bank to the chairman of

JKCA dated 10th March 2012 are enclosed herewith as Annexure B.

The foresaid act prima facie amounts to criminal misconduct and also

offence under Indian Penal Code and hence an independent and fair

investigation is required.

67

Mr. M K Alagiri

Interfered in the duty of an election officer:

In April 2011, DMK leader Mr. M K Alagiri and his fifty supporters were

charged for the breach of code of conduct and attacking an election officer,

M Kali Muttu, and his co-worker during the Assembly election in Tamil

Nadu. Reportedly, Mr. Alagiri was campaigning in a temple in Melur Talu

area when a flying squad of the election commission reached the spot and

started to video-graph his activities. This made Mr. Alagiri’s supporters

turn angry and they attacked the videographer and the election officer. The

officer, who was on official duty, was abused by his supporters and forced

to retreat. Copies of reports in Outlook India dated 2nd April 2011 and IBN

Live 23rd January 2012 are enclosed herewith as Annexure A (Colly).

Temple land grabbed by Mr. Alagiri’s wife Kanti Alagiri

A priest of a temple in Madurai, Subramanian Iyer, has complained to the

chief minister that Mr. Alagiri’s wife Kanti Alagiri has grabbed 23 acres of

temple land. According to the priest, the said piece of land was, in 1936,

gifted to the temple by Mr. Nagendra Iyer on the condition that the piece of

land would never be sold. Despite this, the land was sold by disputed

lottery king, Saint Yago Martin, after forging documents, to Kanti Alagiri

for a sum of Rupees 85 lakhs. It is said that the actual price of the land is

about Rs 24 crore. Despite the complaint, no FIR has been registered in

this case. It appears some preliminary investigation was done by Madurai

rural police which gave clean chit to Mr. Alagiri’s family. Copies of the

Indian Express dated 7th July 2011 and 5th September 2011, India Today

dated 12 July 2011, and IBN Live dated April 11, 2011 reports are

enclosed as Annexure B (Colly).

The aforesaid acts prima facie amounts to offences under Indian Penal

Code apart from being misconduct and hence independent and fair

investigation is required.

68

Mr. Sushil Kumar Shinde

Adarsh Scam

The issue relates itself to cheating, fraud, and corruption practised by Mr.

Sushil Kumar Shinde along with some others, in the matter of allotment of

flats to specific members of the Adarsh Co-operative Housing Society

situated at Plot No. 87-C at Backbay Scheme No. (VI), Cuffe Parade,

Mumbai.

Vide the order of the Government dated 11 January, 2003, a Letter of

Intent was issued to Adarsh Co-operative Housing Society for allotment of

land admeasuring 3758 square metres at the address mentioned above.

This tentative letter of intent was issued to enable the Collector of Mumbai

of verify the antecedents of the proposed members and to ensure that they

abide by the criteria set in the Government Resolution of 9th July, 1999.

The relevant part of the criteria set in the Government Resolution is

annexed hereto and marked as Annexure -'A'.

Consequent upon the said verification of the Collector done from time to

time, several reports were sent by the Collector to the Revenue Department

of the Government of Maharashtra for the approval of names and the

issuance of the letter of allotment from time to time. In this reference, the

following orders were issued as under:

(a) Order dated 9th July, 2004 approving 20 names. (ANNEXURE-

'B')

(b) Order dated 24 August, 2004 approving 51 names.

(ANNEXURE-'C')

(c) Approval issued on 20th September for the allotment of land @

1,15,000/- per square metres.(ANNEXURE-'D')

(d) Approval granted in late October, 2004 based which letter

issued on 11th November, 2004, for charging a lesser price for

land for those in lower income categories. (ANNEXURE-'E')

Mr. Shinde was the Chief Minister, Maharashtra State from 18th January

2003 to 31st October, 2004. Mr. Shinde along with other persons entered

into a criminal conspiracy to effect an illegal allotment of land to members

of the said Society, thereby causing an undue pecuniary gain to such

persons and which, inter alia, comes within the definition of the words,

‘criminal misconduct by a public servant’ as contained in section 13 of

the Prevention of Corruption Act, 1988.

ALLEGATION NO. 1: Falsification of file notings done by manipulating

the date of 23rd August, 2004, for issuing allotment to 51 members

because that was the last day before Code of Conduct for elections

was imposed:

69

As per the programme for elections announced by the Election

Commission of India, (ANNEXURE-'F'), the Code of Conduct was to remain

in force from 24th August, 2004 till the new Government was formed on 1st

November 2004.

However, it was seen that the Code of Conduct for Elections was to

start from 24th August 2004. Accordingly, as per the instructions issued by

the Election Commission of India, no order could be passed beyond the

date of 23rd August, 2004.

To overcome the constraints mentioned above, a conspiracy was

hatched, whereby there seems to be noting done on the back date by

antedating the date of 23rd August, 2004.

This inference is apparent from the following:

(I) As per the prescribed procedure, when a noting is done by a

Department, and when the file moves from a Mantralaya

Department to the Chief Minister’s Office, there is a stamp

which is placed. This can be seen in a noting annexed as

ANNEXURE-'J'. In this case, a fake papers were prepared as

seen in the noting dated 23rd August, 2004, annexed as

ANNEXURE-'G', no stamp has been put.

(II) There is an overwriting in the noting of Joint Secretary Shri

Asmar, who it seems had put the date as ‘24’ which was then

changed to ‘23’ (ANNEXURE-'G'). A forensic examination of the

original documents available with the Revenue Department

can reveal the detail specifically with respect to overwriting.

(III) On 23rd August, 2004, the file moved as under:

SR.

NO.

DATE OFFICER DOING

NOTING

REMARKS

1. 23rd August,

2004

Under Secretary Proposal to

allot flat to 51

members.

2. 23rd August,

2004

Joint Secretary, Shri

Asmar

- Agrees-

3. 23rd August,

2004

Principal Secretary,

RC Joshi

- Agrees-

4. 23rd August,

2004

Deputy Secretary to

the Chief Minister

He has to

study the file

and put up to

Principal

Secretary to

Chief Minister

70

5. 23rd August,

2004

Principal Secretary

to Chief Minister.

He has to

study the file

and put up to

the Chief

Minister.

6. 23rd August,

2004

Chief Minister - Agrees-

7. 23rd August,

2004

File has to

return through

Principal

Secretary Rev

(like in

ANNEXURE-

'K')

8. 23rd August,

2004

Under Secretary Puts up draft

allotment

letter.

9. 23rd August,

2004

Jt. Secretary Shri

Asmar

- Agrees-

10. 23rd August,

2004

Principal Secretary

Rev, Shri Joshi

- Agrees-

11. 23rd August,

2004

Under Secretary He issues the

letter of

allotment to 51

members.

From the aforesaid facts the following is apparent:

(a) It is physically impossible for a file to move 11 times in one

single day across from the desk to various officers and offices

and the same be dealt on a complicated matter as this one. I.e.

from Revenue Department to Chief Minister’s Secretariat and

back with each of the officers and the Chief Minister’s

Secretariat applying its mind.

(b) The Revenue Secretary Shri RC Joshi, did not submit the case

to the Revenue Minister as per the rules and as was done in

all similar matters. As per the Maharashtra Government Rules

of Business the following has been provided:

“Except as otherwise provided in these instructions,

cases shall be submitted by the Secretary in the

Department to which the case belongs to the Minister-

in-charge”.

71

In a major violation of rules, in this case, Secretary Shri

Joshi did not submit the file to the Revenue Minister. This

conduct was not only suspicious but also illegal.

(c) The matter was not referred to Finance Department as was

done in several other instances. As per Rule 11 of the

Maharashtra Government Rules of Business for any matter

related to any concessional allotment of land, the matter has

to be referred to the Finance Department. This was not done

by him as was done when he had got the names of 20 people

approved.

(d) As per the Supreme Court ruling in the case of Angariki Co-

operative Housing Society, Finance is the life blood of the

Government and if in any matter related to allotment of land is

not referred to the Finance department then the same is

illegal.

(e) There are overwriting in the signature of Ramakant Asmar

Joint Secretary (ANNEXURE-'G'). This indicates that there has

been some falsification of documents.

(f) There is also an overwriting in the note made on 24th August,

2004 (ANNEXURE-'H'). This also indicates falsification of

documents.

(g) As per the rules and procedures when the file moves from the

Revenue Department to the Chief Minister’s Secretariat, there

has to be an outward and inward stamp of both the Chief

Minister’s Office and also of the Revenue Department. This

can be seen from a proper noting placed as ANNEXURE-'K'.

However, in this case of fake noting placed at ANNEXURE-'G'

there is no stamp at all. This clearly, indicates that false

papers were prepared.

It is thus seen that fake noting was prepared on 23rd August,

2004 so as to escape from the constraints imposed by the Election

Code of Conduct which was to come in force on 24th August, 2004.

ALLEGATION NO. 2: Allotment of flat to 51 members was made on

24th August, 2004 on which date Code of Conduct had commences –

order could not be issued:

It is seen from order dated 24th August, 2004 annexed as

ANNEXURE-'C' and the corresponding noting placed at ANNEXURE-'H',

the order of allotment was issued on 24th August, 2004, when the Code of

Conduct for Elections had already come into force. As per the instructions

issued by the Election Commission of India, the Code of Conduct had been

72

enforced from the date when the elections were announced. The date of

announcement of elections was 24th August, 2004 (ANNEXURE-'F').

However, the allotment letter for 51 members was issued on 24th August,

2004. Thus the said letter was illegal and violates the instructions of the

Election Commission of India. It also amounts to an offence under section

171-B of the Indian Penal Code and also a corrupt practice under section

123(1) of the Representation of the People Act, 1951.

ALLEGATION NO. 3: When the Election Code of Conduct was on

orders were issued to give land at 20% of market value – gross

violation of the Code and a criminal offence:

A noting was put up on 16.9.2004 before the Chief Minister Shri

Shinde as can be seen from ANNEXURE-'I'. Notwithstanding the fact that

the Code of Conduct was in force, yet orders were issued to grant land at

20% of the market value. As can be seen from ANNEXURE-'I', this noting

was approved by the Chief Minister around 16.9.2004.

This act was grossly illegal for the following reasons:

(a) During the relevant time Code of Conduct for Elections was in

force. In no way could any order be issued for giving

concessional allotment of land at 20% of the market value.

This would clearly amount to bribery and inducement to

voters which is an offence under section 171-B of the Indian

Penal Code and also a corrupt practice under section 123(1) of

the Representation of the People Act, 1951.

(b) As seen above, Rule 6 contained in the Instructions issued

under the Maharashtra Government Rules of Business, it was

required for the Secretary to have put up the file to the

Revenue Minister. This is apparent from the following

provisions:

“Except as otherwise provided in these instructions,

cases shall be submitted by the Secretary in the

Department to which the case belongs to the Minister-

in-charge”.

However, The Revenue Minister was bypassed and the file was

directly put up to the Chief Minister.

(c) It was the condition of the Finance Department that allotment

be done as per the eligibility norms of Government Resolution

of 9th July, 1999. However, in this respect Government had

granted concession to several people from domicile

requirement in violation to the said Government Resolution of

1999. Hence this condition of the Finance Department was

broken. As such, as per Rule 11(2) of the Maharashtra

73

Government Rules of Business, it was necessary to refer the

matter to the Council which could not be done because of the

fact that the Code of Conduct was in force.

ALLEGATION NO. 4: Total Collapse of Rule of Law – Even price of 20%

of market value was reduced without concurrence of the Finance

Department when the Code of Conduct was in operation and when the

Government Resolution of 1999 already stood violation by including

members without following the domicile criterion:

A note was put up on 7th October, 2004, (ANNEXURE-'J') on the

request made by Adarsh Co-operative Housing Society that the price of

20% of the market value be reduced to those in the lesser income category.

This order was approved by the Chief Minister, Shri Shinde perhaps on the

last day he was in the chair. The new Chief Minister, Shri Deshmukh had

taken Oath on 1st November, 2004.

In this act the following illegalities happened:

(a) The Finance Department had earlier given approval for 20% of

market value. To change this pricing, it was required that the

matter be referred to the Finance Department. This was more

particularly required because the Government Resolution had

been breached by permitting several members who did not

qualify the domicile criteria. However, this mandatory

reference to the Finance Department was not done.

(b) As per the Maharashtra Government Rules of Business, and

also as per the ruling of the Hon'ble Supreme Court in the

case of Angariki Co-operative Housing Society, it was

necessary to have referred the matter to the Finance

Department since the matter related to relinquishment of

Revenue. This can be seen from the following legal provisions

contained in the said Rule 11.

Rule 11 of the Maharashtra Government Rules of Business

issued under Article 166 of the Constitution of India:

(1) No Department shall without previous consultation with

the Finance Department authorize any order (other than

orders pursuant to any general delegation made by the

Finance Department) which –

(a) either immediately or by their repercussion, will

affect all the finance of the State, or which, in

particular -

(i) involve any grant of land or assignment of revenue or

concession, grant lease or license of mineral or forest

74

rights or a right to water power or any easement or

privilege in respect of such concession; or

(ii) in any way involve any relinquishment of revenue;

(b) relate to the number or grading or cadre of post or

the employments or other conditions of service or posts.

(2) No proposal which requires the previous consultation of

the Finance Department under sub-rule (1) but in

which the Finance Department has not concurred, may

be proceeded with unless a decision to that effect has

been taken by the Council.

(3) No appropriation shall be made by any Department

other than the

Finance Department, except in accordance with such

general delegation as the Finance Department may have

made.

(4) Except to the extent that power may have been

delegated to the Departments under rules approved by

the Finance Department, every order of an

Administrative Department conveying a sanction to be

enforced in audit shall be communicated to the audit

authorities by the Finance Department.

(5) Nothing in this rule shall be construed as authorizing

any Department including the Finance Department, to

make reappropriations from the grant specified in the

Appropriation Act to another such grant.” (Emphasis

supplied).

It is seen that notwithstanding the aforesaid stipulation, yet

this matter of relinquishment of revenue and grant of land

at a concessional rate was not referred to the Finance

Department.

(c) As per the Maharashtra Government Rules of Business, it was

necessary for the Principal Secretary Revenue to have routed

the file through the Revenue Minister. However, in view of the

fact that the elections were on, it seems the Revenue Minister

was not inclined to sign on the file. Hence this file was then

marked directly to the Chief Minister, Shri Shinde,

without referring it to the Revenue Minister, in violation

of the rules, where then the former signed on the file.

(d) During the time Election Code of Conduct was on, in no way,

could there be an approval for giving concessional price to the

Society where relinquishment of revenue was involved. It

75

amounted to an offence under section 171-B of the Indian

Penal Code and also a corrupt practice under section 123(1) of

the Representation of the People Act, 1951.

ALLEGATION NO. 5: That the letter of allotment of land on 9th July,

2004 was issued notwithstanding the fact that there was no clear-cut

approval from the Finance Department:

As per the Maharashtra Government Rules of Business the following

has been provided for:

Rule 11 of the Maharashtra Government Rules of

Business issued under Article 166 of the Constitution of

India:

(1) No Department shall without previous consultation with

the Finance Department authorize any order (other than

orders pursuant to any general delegation made by the

Finance Department) which –

(a) either immediately or by their repercussion, will

affect all the finance of the State, or which, in

particular -

(i) involve any grant of land or assignment of revenue or

concession, grant lease or license of mineral or forest

rights or a right to water power or any easement or

privilege in respect of such concession; or

(ii) in any way involve any relinquishment of revenue;

(b) relate to the number or grading or cadre of post or

the employments or other conditions of service or posts.

(2) No proposal which requires the previous consultation of

the Finance Department under sub-rule (1) but in

which the Finance Department has not concurred,

may be proceeded with unless a decision to that

effect has been taken by the Council.

(3) No appropriation shall be made by any Department

other than the Finance Department, except in

accordance with such general delegation as the Finance

Department may have made.

(4) Except to the extent that power may have been

delegated to the Departments under rules approved by

the Finance Department, every order of an

Administrative Department conveying a sanction to be

enforced in audit shall be communicated to the audit

authorities by the Finance Department.

76

(5) Nothing in this rule shall be construed as authorizing

any Department including the Finance Department, to

make reappropriations from the grant specified in the

Appropriation Act to another such grant.”

When the proposal for the issuance of the letter of allotment was given to

the Finance Department the following noting was made from 16th June

2004 to 8th July, 2004 (ANNEXURE-'J'):

“If the view of the Revenue Department in this proposal under the

conditions of Government Resolution of 9th July, 1999 with reference

to Co-operative Housing Societies, is found proper, then the Finance

Department could give its concurrence. This is because, in this way,

by not following the eligibility criteria conditions, to give a

Letter of Intent, such precedents have not been seen before.

The price which has been proposed by the Department, the Finance

Department could give its concurrence. Because that this proposal

appears to be different than that which should be as per the

prescribed procedure, in that on the condition that the Department

which has to take the approval of the Government can take the

decision on its own, it seems for this there can be no objection. As

per the standing order, submitted for the perusal and decision of the

Hon'ble Minister (Finance).” (Emphasis supplied).

This note was approved by the Finance Department as per the

following remarks (as translated from Marathi):

“The department should take the approval of the government on this

condition the concurrence be given.”

It is submitted that this proposal was then put up to the Chief

Minister Shri Shinde by the Revenue Minister Shri Nilengekar Patil which

was approved by the former (ANNEXURE-'J').

In this reference the following is submitted:

(a) The Finance Department had raised an objection as under:

(1) Issuance of Letter of Intent with the members not following the

eligibility criteria, this was not proper.

(2) The proposal was different from that of the prescribed procedure,

hence the Revenue Department need to take approval of the

Government.

In view of the above, since the Finance Department had clearly said

that the proposal was not as per the prescribed procedure, by stating that

the approval of the Government be taken, it meant that the conditions

mentioned in the Rules of Business, Rule 11(2), as quoted above, need to

be followed.

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In other words, the approval of the Council was required. However,

for apparent reasons the approval of the Council was not taken and the

Letter of Allotment was issued on 9th July, 2004 as per ANNEXURE-'B'

when the same was approved by the Chief Minister Shri Shinde.

ALLEGATION NO. 6: Chief Minister cannot claim that this was a

routine matter – in this matter he has been taking SPECAIL personal

interest again and again hence was fully aware of all the happenings:

That the Chief Minister took special and personal interest in this

case is evident from the following:

(a) This file was called by the Chief Minister’s Office without

assigning any reason on 26 July, 2003 and was kept

upto 18th August, 2003. As to why the file was called, there

was no noting at all. That the file was called by the Chief

Minister is evident from ANNEXURE-'L'.

(b) That there were special references coming from the Chief

Minister again and again. This is apparent from the following:

1. Letter dated 29th March, 2003 written by Chief Minister to Shri

Gidwani for getting matter examined (ANNEXURE-'M').

2. Letter of 17th March, 2003 for getting additional FSI sent by

Adarsh Co-operative Housing Society to the Chief Minister.

(ANNEXURE-'N').

3. Letter of Shri Gidwani to the Chief Minister, dated March 21,

2003 to where Chief Minister instructed matter to be put up

(ANNEXURE-'O').

4. Letter of Under Secretary Revenue Department to Shri Thakur

Chief Promoter dated 10th April, 2003, where the letter was

marked as copy to Collector Mumbai stating that the Chief

Minister has instructed to give the report at once

(ANNEXURE-'P').

5. Letter of Shri Karnik, Desk officer of Chief Minister

Secretariat, dated 17th July, 2003 instructing the Revenue

Department to put up the matter at once (ANNEXURE-'Q').

6. Letter of Shri Gidwani to Chief Minister dated 24 December,

2003, enclosing the letter of Adarsh Co-operative Housing

Society, where the Chief Minister order the Secretary Revenue

to examine the matter and to put up (ANNEXURE-'R').

7. Letter dated 2nd January, 2004, of Private Secretary to the

Chief Minister, asking prompt action on the letter of Shri

Gidwani. (ANNEXURE-'S').

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8. Letter of Jt Secretary Shri Asmar of Revenue Department

dated 22 June, 2004 marking a copy of the letter to Collector

to eh office of the Chief Minister. (ANNEXURE-'T').

9. Letter of 27 July 2004 of the Collector to Urban Development

Department stating that the special desk of the Chief Minister

is asking for the matter hence the same be expedited

(ANNEXURE-'U').

10. Note submitted by Shri Gidwani to the Chief Minister dated

12th August, 2004 on pending matters (ANNEXURE-'V').

11. Letter dated 11th September 2004 submitted by Shri Gidwani

to the Chief Minister for issuing directives for additional FSI

(ANNEXURE-'W').

12. Letter dated 19th August, 2004, submitted by General Manager

BEST to the Secretary to the Chief Minister Shri Subhash

Lalla (ANNEXURE-'X').

Prima facie, in view of the submissions made above, the following criminal

offences have been committed and which warrant an in-depth

investigation:

(a) Section 120-B IPC i.e. criminal conspiracy of the accused

persons to allot flats to members in violation of the provisions

of law.

(b) 409 IPC i.e. criminal breach of trust by a public servant where

the precious land which was government property was

transferred to Adarsh Co-operative Housing Society in

violation of the law.

(c) 420 IPC for cheating the government by seeking membership

for the mother and daughter of Shri Lalla on fake papers and

declaring her to be in MES service whereas actually she was a

housewife.

(d) 467 and 471 of the IPC i.e. creating and using fabricated

documents for preparing papers on backdate, in violation of

the office procedures of doing inward and outward entries of

noting, purported to be done on 23rd August, 2004 which was

the last working day before Code of Conduct for Elections was

to come into force.

(e) 467 and 471 of the IPC i.e. creating and using fabricated

documents to get membership in the Society for Shrimati

Susheela Shaligram and others.

(f) Section 13(1)(d) read with section 13(2) of Prevention of

Corruption Act, 1988 – commission of the offence of criminal

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misconduct where Rules of Business were violated so as to

confer precious flats worth about Rs. 8 cr. each to those who

were members of Adarsh Co-operative Housing Society