Saturday, Sep 18, 2021

How The UPA Buried The Case Against Q

How The UPA Buried The Case Against Q
How The UPA Buried The Case Against Q

That the centre told the Supreme Court today that it has decided to withdraw the case against Italian Businessmen Ottavio Quattrocchi should not be a surprise to anyone who has followed the case.  First, Q was allowed to leave the country and then, after the Congress-led UPA came back to power in 2004, the ground for a neat burial of the case, has been very effectively prepared with the law ministry and CBI doing all the necessary digging and shovelling dirt over it:

  • As early as July 5, 2004 it decided not to file the a special leave petition against the Delhi High Court order of February 2004. 
  • Quattrocchi was allowed to withdraw the money  from his "frozen"  bank accounts in London in 2006
  • When Q was detained in Argentina, first the news was not announced and then it was ensured that there was no appeal against his release or for extradition in 2007
  • Just before elections 2009, the CBI had even taken off the 12-year Interpol Red Corner Notice (RCN) against Q 

Indeed, the previous law minister H.R. Bhardwaj under UPA I may have done enough to have earned his loyalist tag that even his being kept out of the cabinet this time around may not have made a difference. Here's a quick -- by no means comprehensive -- time-line:

March 24, 1986: The Rajiv Gandhi government signs the controversial contract for 410 howitzers is signed with Bofors.

April 16, 1987: National Swedish Radio announces that Bofors AB allegedly paid bribes to Indian politicians and bureaucrats through Swiss banks to win the contract to supply 155-mm howitzer field guns.

April 22, 1987: Swedish newspaper Dagens Nyheter, quoting highly placed company sources in an original report, identified the Hindujas as recipients of the "commission" paid by Bofors.

June 1, 1987: The National Audit Bureau of Sweden admits the payment of "winding up charges" of Rs 34 crore to Rs 50 crore.

June, 1987: Army Chief Sundarji and Minister of State for Defence, Arun Singh (who years later ended up working for the NDA government), advocate cancelling the contract with Bofors.

August 6, 1987: The Indian government sets up a joint parliamentary committee (JPC) to look into the allegation of pay-offs under the chairmanship of B. Shankaranand.

September 1987: Per Ove Moresberg, chairman of Bofors AB and Lars Gothlin, chief jurist of Nobel Industries, convey to India the names of three companies-Svenska Inc of Panama, Moresco of Switzerland and AE Services of the UK-which had received "winding up cost".

April 25, 1988: The JPC presents its report to Parliament, saying it did not find any evidence of middlemen or of any payment other than winding-up charges. The opposition had boycotted the JPC and it turned out to be a whitewash, but still made some interesting revelations: Bofors had not one but two agents in India. In addition to Svenska (Win Chaddha was the signatory), there was also Pitco (connected to the Hindujas) Bofors claimed the agreements with Pitco and Svenska had been terminated after the government asked it to sack its agents and that the money paid to them was " winding-up charges for terminating the contract". Bofors finally had no answer to the JPC's question as to why then had it appointed a third agent, AE Services, when the deal was in its closing stages. The JPC accepted the explanation offered by Bofors that it was a British firm headquartered in Guildford, Surrey, owned and promoted by a Major Bob Wilson.

1989: By late-1989, a great deal of further evidence and information, notably from the Martin Ardbo diary entries and notes for 1987 seized by the Swedish police had led to interesting speculation and revelations. Those who helped him in the cover-up were called ‘Hansens’ - who lived in London and India and one of them was called GPH, clearly a reference to the Hindujas and G.P. Hinduja. GPH's enemies were Serge Paul and Nero. Now the Hindujas' scrap with Arun Nehru and Swaraj Paul was hardly a secret. Ardbo described meetings with a ‘Gandhi trustee lawyer’ to finalise details of the cover-up, wrote that he no longer cared about ‘the consequences for N’ ( Arun Nehru) but ‘Q’s involvement could be a problem because of closeness to R.’ Q and R, given the context, were clearly seen as Quatrocchi [Q had shifted to India from Italy soon after Rajiv Gandhi married Sonia and stayed in Delhi as a representative for Snamprogetti from 1964 to 1993]and Rajiv Gandhi. In any case, Rajiv Gandhi lost the elections largely fought around the issue of Bofors. V.P. Singh was PM.

January 22, 1990: Finally, the CBI files its First Information Report in a Delhi court. The FIR names Martin Ardbo, Win Chadha, G.P. Hinduja and others.

January 26, 1990: Swiss bank authorities freeze the accounts concerned on a request from the V.P. Singh government. Additional Solicitor General Arun Jaitley accompanied CBI Jt. Director K. Madhavan to Sweden

February 1, 1992: P.V. Narasimha Rao's minister for external affairs, Madhavsinh.Solanki hands over an unsigned memorandum to the Swiss foreign minister Rene Felber to go slow on Bofors. Details leak, Solanki declines but has to resign and faces oblivion.

January 1993: The Geneva Cantonal Court grants assistance to India in the first round of its proceedings in the case. Appellants - Win Chaddha, Quattrocchi and Hindujas - oppose move the Swiss Federal Court.

July 12, 1993: The Swiss Federal Court rejects the appeals and asks the papers to be handed over to India.

July 29, 1993: Quattrocchi flees India for Malaysia. The Indian Express's Chitra Subramaniam (earlier with the Hindu) had produced documents suggesting that some of the money that had been paid by Bofors to AE Services [Earlier widely speculated to be a front set by up by Swaraj Paul for Arun Nehru] as commissions had been diverted from a Swiss bank account to another account, the ultimate beneficiary of which was Quatrocchi. Opposition had asked for his passport to be impounded, but Narasimha Rao's government didn't bat an eyelid.

June 7, 1994: The names of seven appellants in the Swiss courts, including the Hindujas, Italian businessman Ottavio Quattrocchi and Bofors' agent in India, Win Chadha, are made officially public.

October 1996: The Geneva Cantonal Court rules in favour of India in the final round; six appellants again move the federal court to block the transfer of the documents.

November 26, 1996: Appeals rejected.

January 21, 1997: Joginder Singh, specially appointed CBI director by Deve Gowda, goes to Berne to receive secret bank documents.

February 20, 1997: The CBI team returns to India from Malaysia after failing to secure Quattrocchi's arrest.

October 22, 1999: Finally, with the BJP in power, the CBI files the chargesheet in the case. It names former prime minister Late Rajiv Gandhi, former union minister Madhavsinh Solanki, Gopi Arora, special secretary to the prime minister, former defence secretary S.K. Bhatnagar, Quattrocchi and his wife Maria, Win Chadha, his late wife Kanta and son Harsh Chadha.

October 9, 2000: CBI files chargesheet against the Hindujas, their share said to be routed through McIntyre Corp

December 19, 2000: Quattrocchi is arrested in Kuala Lumpur for "offences allegedly committed in India" and is released on bail of RM 400,000 (Rs 50 lakh).

December 2002: Malaysian sessions court rejects India's appeal for extraditing Quattrocchi to stand trial in India, says the description of offences were "insufficient, vague and ambiguous". The same day, India's Supreme Court stayed the trial proceedings before a special court against the Hinduja brothers

June 2003: CBI is alerted by the Interpol on Quattrocchi's Rs 21 crorers routed through Bahamas in his London accounts in BSI AG Bank. Accounts are frozen in July on CBI's request. CBI promises to provide clinching evidence linking the London accounts with the Bofors case.

February 4, 2004: The Delhi High Court rules that the CBI had failed to provide any information of accounts held by the former PM and officials like ex-defence secretary S.K. Bhatnagar. The court, however, does not let the Hindujas and the Gandhis’ Italian friend, Ottavio Quattrocchi, off the hook. NDA, surprisingly does not file appeal against the order, and buoyed by this, Sonia Gandhi kicks off the 2004 general campaign, flanked by Rahul and Priyanka, by telling the media: "We have gone through 17 years of abuse, 17 years of vilification since the first accusation to the last indignation inflicted by the BJP-led NDA government by placing my husband's name on the chargesheet"

March 31, 2004: Kuala Lumpur Federal Court rejects the Indian appeal for extradition of Q against the session court's order. By November, Q has moved from Kuala Lumpur to Milan.

April 8, 2004: The Asian Age publishes 'Bofors truth points to Quattrocchi, Sonia' which insisted that 'Sonia Gandhi must be questioned' by Sten Lindstrom who, in an 1998 interview to Outlook had claimed that 'The Bofors Papers All Point To The Gandhi Family'

Defreezing Q's Accounts

December 9, 2004: Earlier in the year, Stephen Hellman, counsel for the Crown Prosecution Service, had suggested to CBI that to keep the two Q accounts in London frozen, it should declare Quattrocchi a proclaimed offender under Section 82 of CrPC and attach his properties under Section 83. (as reported by Ritu Sarin in The Indian Express on January 13, 2006)

ASG B. Dutta in a written opinion, in response, argued that since Quattrocchi wasn’t an Indian or resident in India, Section 82 of the CrPC could not be applied to him. He also added that the CBI had no evidence linking "the commission of the offence" with the "derivation of funds." According to him, a warrant of arrest is executable only in India as per Section 77 CrPC and "not to any act on the part of the person concerned of absconding or concealing himself." The CBI disagreed saying that a NBW was in force against Quattrocchi who was a fugitive under the Extradition Act and that it is not mentioned anywhere that the CrPC applies only to Indian nationals. The CBI also said that contrary to Dutta’s claims, a Letter Rogatory had been issued by the Indian Court which has been acted upon by UK authorities and even the High Court and Supreme Court, London, have not raised any objection to or doubted the course of action adopted by the Indian Court.

February 11, 2005: The Indian Express exposes the above serious disagreement between the CBI and the law ministry on Q's frozen funds in two London accounts and how the law ministry's influence could lead to the release of the funds.

May 31, 2005: Justice R.S. Sodhi of Delhi HC discharges the Hindujas. The reason? ASG B Datta orally submits before the HC that the documents brought back from the Swiss were not originals or "authenticated"! The Congress claims it was the NDA's fault not to have ensured authentication.. Meanwhile, Delhi is abuzz with the old 1998-elections buzz about the Hindujas and Atal Behari Vajpayee (and also the old Arun Nehru - Nero in Martin Ardbo diaries - who has been with the BJP for many years now). 

Interestingly, it turned out that the same ASG B Datta had "attested a CBI affidavit about the genuineness as well as the admissibility of the same set of documents. The change of version was significant not just because it formed the basis for the HC judgement discharging the Hindujas but also because this verdict was referred to by another ASG KP Pathak to give a clean chit to Quattrocchi. Pathak's opinion formed the basis for defreezing of Quattrocchi's accounts in UK and "both ASG Datta and the CBI knew very well that the documents were authenticated by the justice department of Sweden and could be treated as "admissible".  "It is curious to note that the HC relied on the word of mouth of the ASG that the documents were not authenticated but not on CBI's affidavit to the contrary. ... the CBI had reinforced its case by making Per Hedvall as the prosecution witness to prove that the documents were authentic and that there was no doubt on this score. ...the CBI also cited the following persons as prosecution witnesses:

October 2005: The CBI prepares to challenge the ruling in the Supreme Court because the Swedish Prosecutors Office had acknowledged the authenticity of the documents and then Swedish Special Prosecutor Lars Ringberg was willing to testify. But given that the UPA government was in power and did not go in appeal. Additional Solicitor General (ASG) K.P. Pathak when advising CBI not to go in appeal against the May 31 2005 judgement exonerating the Hindujas, exceeds his brief, and says that "even in the case against Quattrocchi would necessarily fail in view of the reasoning of the high court since there too there are no authenticated documents."

October 22, 2005: The CBI is served a notice by the Supreme Court on the basis of a PIL challenging the move not to go for revision against Justice Sodhi’s High Court order.

November 16, 2005: This is when CBI claims the Crown Prosecution Service (CPS) asked it to provide evidence promised in June 2003 when Q's London accounts were frozen. CPS claims it had been in touch with the CBI throughout since 2003 when the accounts were frozen and that no such new specific request was made.

November 26, 2005: Department of Personnel and Training (DoPT) overrules the CBI's request that an agency official and a law officer should go to London, saying only only law ministry’s ASG B. Dutta would go. (The Indian Express, January 17, 2005 which also reports on the same day that "CBI’s Director of Prosecution, S K Sharma, a Law Ministry official posted in the CBI ... wrote that would be a 'travesty of justice' if the CBI appealed against the Sodhi judgment")

November 28, 2005: Law ministry turns down CBI Director U S Mishra's request to file a Special Leave Petition (SLP) challenging the May 31, 2005 High Court order exonerating the Hindujas passed by Justice R S Sodhi.

December 20, 2005: The CBI says in the court of Chief Metropolitan Magistrate Seema Maini, that to "apprehend the accused (Quattrocchi)," a Red Corner Notice was "still in existence" and details of "the present whereabouts of the accused’’ would be submitted soon to the court. (Ritu Sarin in The Indian Express, January 19, 2005).

December 22, 2005: ASG B. Dutta goes to London and takes along: orders of the Kuala Lumpur courts turning down Quattrocchi’s extradition request, the order of the HC dismissing the case against Hindujas and the legal opinion by K.P. Pathak (who had dismissed the case against Q). He meets the CPS paving the way for the accounts to be defrozen.

Earlier, the same B.Dutta had (as per the Indian Express of Jan 17, 2006) "disagreed with the CBI on how to handle the issue of frozen funds and the legal course of action. He had said that the agency has "no justification blocking the funds."

December 27, 2005: Dutta submits his report on the visit to the CBI but according to top officials (cf, The Indian Express, Jan 17) "defreezing of the accounts ... never figured in either Dutta’s briefings with the CBI prior to his visit or in his report. He just briefs them about the documents taken by him and presented to the CPS.

January 11, 2006: A newschannel, CNN-IBN News breaks the story of the defreezing of accounts.

January 12, 2006:

  • This is when CBI was informed about defreezing of the accounts by an e-mail from the CPS. And this is apparently when the money disappeared from the account. A top CBI official tells the Indian Express: "While we knew we do not have clinching evidence to link the Bofors pay-offs to the frozen funds, we were taken aback at how quickly the defreezing order was passed." 

  • When asked, law minister Bhardwaj is brazen: "The Crown Prosecution had sought the status of the investigation and we have conveyed to them the recent rulings of the High Court rejecting the case against the Hinduja brothers. The CBI has failed to establish any link between the Bofors pay offs and the money in two British accounts of Quattrocchi. So how can we penalise him? It is wrong to keep someone's money frozen if there is no proof against him ... The Director (Prosecution) of CBI had said there was no case for going into appeal [against the Hinduja judgement] and the Additional Solicitor General had agreed with this."
  • Advocate Ajay Agarwal files a petition in the Supreme Court against the government claim to the CPS that there was no link between the funds in two frozen accounts of Quattrocchi and the Bofors payoff case.
  • The Chief Metropolitan Magistrate’s court in New Delhi directs the CBI to file a status report by March 31 on the steps taken to extradite Quattrocchi

January 16, 2006:

  • In an interim order, a SC bench, headed by Chief Justice Y K Sabharwal, directs the government and the CBI to maintain "status quo ante" on Q's two London accounts and directs they should ensure no money is withdrawn "if not withdrawn so far". In case of of funds withdrawal, the government and the CBI are asked to explain steps taken in an affidavit, asking them to reply within a week -- fixing the next hearing for January 23. The bench also asks the government to make clear who instructed ASG Dutta to okay de-freezing of the accounts.

  • CBI’s comes to the aid of a beleaguered law ministry and despite various flip-flops and off-the-record briefings to the media backed by supporting documents about the government pressure, backs the Department of Personnel and Training (DoPT) and the law ministry. Joint director A K Majumdar says it was "purely" the CBI’s decision to send Additional Solicitor General B Dutta to London and that "neither ministry had any role to play" in the January 11 order de-freezing Q's two London accounts.

  • The PM finally speaks in Guwahati:

    "My government has never interfered with the CBI in matters of investigation. A controversy is sought to be created about certain steps taken by the CBI in the matter relating to the freezing of the Quattrocchi bank account. Actions relating to both freezing and unfreezing these accounts have been taken at the level of the CBI in consultation with law officials as per established procedure.

    "Neither the freezing was under government order nor has the defreezing been done under government order. These matters are exclusively under the functional jurisdiction into which the government does not interfere. All steps taken in the matter are in accordance with established standard procedure in such cases. The autonomy of the CBI will be preserved in this government at all cost."

January 17, 2006:

  • Defence minister Pranab Mukherjee says: "We have no jurisdiction on other countries. We can at best make a request to them (Britain)," and that "views of legal experts will be taken" whether or not the government would make any formal request to British authorities.
  • Sonia Gandhi tells Sitaram Yechury of the CPM that the government had no advance knowledge of the CBI decision to allow defreezing of Ottavio Quattrocchi’s London bank accounts. Yechury says after an hour-long meeting with her that she had told him the government was not pressuring any agency [surprise surprise] on the course of the investigation which in any case "should reach a conclusion soon, because in her opinion it had dragged on for too long"
  • Quattrocchi, meanwhile, denies reports from Milan to NDTV that he was in touch with law minister H R Bhardwaj or that the latter's lawyer son had advised him in his extradition case in Malaysia. "This is not correct, not at all correct". On proximity to the Gandhi family, he said, "Well, I am proud to be a friend of the Gandhi family. But please leave the friendship alone."
  • Given the gravity of the matter, in an unprecedented move, the Central Vigilance Commission (CVC) says they have "asked the CBI for a complete factual position on the case" The CVC tells the Indian Express, "There appear to be seeming contradictions in the statements made by the agency a few days ago and in the press conference addressed by a Joint Director. That is why we have asked for the facts of the case.". On the PM's talk of the CBI autonomy, the CVC says that he addresses the subject in his 2004 annual report: "Appeals to be preferred against lower court judgments by CBI are also subject to government approval through the law ministry again. This compromises the independence of the CBI."

February 6, 2007: Ottavio Quattrocchi is detained at an airport in Argentina following a red corner alert issued by Interpol.

February 8, 2007: Interpol officially informed CBI about the detention

February 13, 2007: The Supreme Court sought the CBI's response to a petition for retrieving the money withdrawn by Italian businessman Ottavio Quattrocchi from two "defreezed" bank accounts in London. The CBI did not utter a word to the Court about the official information it already had by its own later admission.

February 23, 2007: CBI issues a statement telling the country that Quattrocchi detained at Iguazu International Airport, Argentina

February 26, 2007:
The CBI issues a statement saying Quattrocchi has been released on bail by the Federal Court of Eldorado City in the Province of Misiones. Of course there was no extradition request and the government explicitly instructed that there should be no appeal against the release.

Two years later, the law minister Hans Raj Bhardwaj brazenly passed the buck on to the CBI and said: “Foreigners are not like us. They want to take things to a logical conclusion.” 

February 26, 2007: The SC asks the union government why it had deliberately withheld information on detention of Ottavio Quattrocchi.

April 28, 2009: The Indian Express reports: In last days of Cong-led govt (UPA I), Ottavio Quattrocchi is taken off CBI’s wanted list: The 12-year Interpol Red Corner Notice (RCN) against the Italian businessman has been taken off the “Interpol Notices” section of the agency’s website. Why? Because the Attorney General Milon Banerjee in his legal opinion dated October 28, 2008 says the RCN is “a continuing embarrassment": “The CBI is under an obligation to have the matters set right at the Interpol level as there is no basis on which the RCN can continue...I am of the firm opinion that immediate action should be taken to withdraw the Red Corner Notice”. 

April 29, 2009: The Indian Express reveals that in his October 24, 2008 legal opinion, AG Milon Banerji had said that the CBI did not challenge the February 2004 order of the High Court quashing all charges under the Prevention of Corruption Act in the Bofors case. And argued: “Since no Special Leave Petition was filed on this ground...the Red Corner Notice is invalid.” Of course, it was "the Attorney General Milon Banerji himself who, barely two months after the Congress-led Manmohan Singh Government came to power, overruled CBI investigators and directed the agency not to file the SLP against the High Court order." This is what he had signed on: July 5, 2004: 

“I have perused the papers, in particular, the careful summary prepared by Shri R L Meena, Law Secretary. I agree with the view of the Law Secretary that this is not a fit case for filing a Special Leave Petition.”

As the IE reported, before the UPA came to power, 

"the CBI’s key investigators in the case (between February-April 2004) had recommended filing the SLP. These included N Natrajan, Chief Public Prosecutor in the case who prepared a 12-page opinion for an appeal; and Deputy Legal Advisor U R Prasad. 

On April 24, 2004, barely three weeks before the UPA came to power, CBI’s Director of Prosecution S K Sharma stated: “Both these counsel have recommended to go in for SLP against the order of the Delhi High Court. We may act accordingly and send a proposal to the Cabinet Secretariat for instructin g the Central Agency Section to file the SLP in Supreme Court.”

For detailed stories, and the Outlook coverage of the last ten years, please refer to the Outlook archives



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