Sunday, Nov 28, 2021
For The Record

'Not Only Greasy Or Oily But Also Highly Inflammable'

In summing up the discussion, the former law minister rebutted the defenders and said there was a danger that Congress instead of being known for its Gandhian era or the Nehruvian era, might be more known for its Mitrokhin era, the Volcker era, the M

'Not Only Greasy Or Oily But Also Highly Inflammable'
'Not Only Greasy Or Oily But Also Highly Inflammable'

Summing up the motion for condemnation of the the alleged involvement of some Indian entities and individuals as non-contractual beneficiaries of the United Nations' Oil-for-Food-Programme in Iraq, as reported in the Report of the United Nations' Independent Inquiry Committee (Volcker Committee).

Source: Verbatim uncorrected proceedings of the Rajya Sabha

Mr. Chairman, Sir, we have had a day-long debate on the Motion which you were pleased enough to permit me to move before this House. And for and against the Motion, a very large number of hon. Members of this House had an opportunity to express their views. We also had the benefit of listening to some of the eminent speakers from the Government. Both are very distinguished parliamentarians, very distinguished lawyers, and, indeed, these are the people for whom I have great regard.

Let me, at the end of this debate say, during the last one month, I started by having a lurking suspicion that this Government was neither honest nor bona fide in its endeavour to unearth the truth. The political manner in which comments were being made, the cover up, through these inquiries by incomplete and erroneous procedure, which has been suggested and even justified today, certainly did lead this lurking suspicion to become a disappointment. I would have expected an honourable and honest Government which was truly bona fide in the matters of trying to investigate the truth to really stand up and say: "There is a preliminary material which has come by way of the Volcker Committee Report....This material indeed is very disturbing."

I expected, at least, the Members of the Congress Party to use the phrases, which their own President used only a few days ago. Today when we find that when they are in the Government, the element of concern that they should have with regard to the disclosures made in the Volcker Report is completely missing. I find my two very eminent friends, -- though they said, 'we are not trying to rubbish the report' -- but there has been a conscious effort not to say that 'we will treat this as a preliminary material with serious concern and then put the investigation on the right track to find the truth.'

But the entire effort has been, 'let us try and pick holes in the report and if possible rubbish the report. If I succeed in rubbishing the report, the allegation against the Government, that you are not being honest in the matter of investigation, it still will fall apart. My friend, Mr. Sibal said, 'well a testimony was given and on the basis of that testimony at best what has been expressed is an opinion of Mr. Volcker. It is an opinion which is not based on any material.' I think, it would have been more reasonable to say, what Mr. Chidambaram indeed did, that these findings could be on the basis of certain material, a material which Mr. Virendra Dayal and Director of Enforcement have gone to Mr. Volcker and said 'please give it to us', but to say that this is nothing more than a private opinion is not correct.

What does the report itself says at page 534? 'Source of Evidence' - and I am quoting from that. It says, 'as discussed at length in the report on programme manipulation, the Committee's findings as they relate to the imposition and collection of illegal kickbacks, these are based on collections and analysis of an extensive body of evidence. Much of the evidence comes from contemporaneous documents and data provided by various Iraqi contracting Ministries, including financial ledgers, internal correspondence and data based on records. The other evidence is in the form of bank records and deposits as well as information provided by suppliers that participated in the transactions, their agents and shipping companies." Now to say that this entire evidence is hearsay evidence which somebody went and orally deposed before that Committee ...


SHRI P. CHIDAMBARAM: Nobody has said that. ...((Interruptions)...

Therefore It is merely an opinion ...(Interruptions)...Well, if you did not say and that now you realise either you should not have said that or you have not said that, then it is certainly much more than ...((Interruptions)...

SHRI P. CHIDAMBARAM: I want that very evidence now. ...((Interruptions)... We need to get those very documents. ...(Interruptions)...

To say that it is merely an opinion, Sir, what are the other arguments those are being raised in order to rubbish it. An article has been written somewhere criticising the Report. In a free media world, people may criticise, people may comment on the authenticity of the Report, but this House in its discussion and the Government in its attitude is certainly not going to be influenced by this. You are very concerned with the fact that no notice was given to the Congress Party or Mr. Natwar Singh.

Volcker has specified the procedure to the contracting parties to whom notices were given. What is the stage at which we are today? We are not at a stage where some chargesheet has been filed and trial is being conducted against Mr. Natwar Singh and the Congress Party. We are at a stage where in this country not even on the basis of the material and information available, a First Information Report is being lodged. We are at a stage where we have to decide and the Government has to decide whether there is a reason to believe or to suspect that a commission of an offence has taken place on the basis of this material. And the Government says, 'I won't register an FIR.' Let me tell my friend Mr. Chidambaram that the core issue in relation to the dispute whether you legally follow the correct course or not, I have no doubt about the eminence and fairness of Justice Pathak. You do not require a Judge of the International Court of Justice at Hague...

You don't require a former Chief Justice to merely start investigating the affairs of Hamdan company. You require a Committee, an agency or a body which has the legal jurisdiction to start investigating who were the recipients, if at all, of these illegal payments. Let me Sir, just remind my learned friends as to what is the material with which Mr. Chidambaram tried to present, which is available on the basis of these documents.

You have a reference where there are contracting parties which have benefited from the contract and you have a material where non-contracting parties are mentioned on these coupons. You have the name of a company which has traded in oil which it was entitled to pick up. It has passed it on as a commercial transaction to another company. So the oil has been picked up. You have evidence and there is material in this report, we need not pronounce it, that the levy of surcharge was illegal. But you have material to say that on both the contracts where a non-contracting party was the Congress Party or Mr. Natwar Singh, illegal surcharges have been levied.

You have further material in terms of even bank account details, that exactly the same amount of illegal surcharge levied and paid has been paid by Masfield, as Mr. Chidambaram rightly says through the instrumentality of Masfield and Mr. Sehgal. You have now evidence which is appearing, and, I am sure, the Enforcement Directorate which is under his Department has further cross-checked the reports and there are some answers which I expected, at least, four of my friends from the Congress Party spoke. Some of you owed an explanation to the country. How did this business delegation accompany your political delegation? How are these people meeting Oil Ministry officials? This is further evidence available if your Government tries to honestly investigate. These are confessions which these people have made in the world of television, on television itself. Why have they repeatedly gone again to Baghdad?

The crux of the issue, as I mentioned was, nearly two-fold investigations which are required, that moneys passed on from Masfield to Sehgal and Hamdan for repayment back to Jordan. This could not have happened without their being an underlying transaction. It is nobody's case that I must jump to a presumption today itself. This calls for an investigation and a valid investigation in law. It must only be such an investigation which has the legal capability of unearthing those documents and reaching at the truth. Between Masfield and Hamdan the two questions which need to be answered is: what happened, if at all, in terms of passing commercial benefits either to the two named non-contracting beneficiaries or to some front companies on their behalf. Has this taken place? The second question, which would arise, is the evidence of these non-contracting beneficiaries. Did they receive any acknowledgement or the coupons itself which they were further entitled to trade for the reasons of profit? These are the two key areas. Now, you may speak in terms of the eminence of Justice Pathak. You may speak of the ability of the Enforcement Directorate. Let me now just deal with both. Mr. Chidambaram says, 'why have we given the inquiry only to the Enforcement Directorate?' The Enforcement Directorate itself can issue a letter rogatory.

SHRI P. CHIDAMBARAM: It can approach a court if it feels.

I think, Mr. Chidambaram did mention that when we speak in terms of letter rogatories, the ghost of Bofors comes back. But then it comes back on various sides. If you recollect, till December 1989, your Government was in power And, till 1989 December, your Government did not care to have an FIR registered. You did send some letters of request. But, every time you send the letter of request the Swiss Government came back with a reply, 'We have a treaty...' -- and the treaty which was entered into prior to that -- '...and the treaty required the following conditions. The treaty requires the principles of dual criminality. There must be an offence which is an offence in both the jurisdictions. The treaty requires a case under investigation and a proper letter rogatory.'

If Mr. Chidambaram's memory does not fail, in October, 1989, you wanted a letter of request to be sent precisely for currency and tax violations...(Interruptions)...You wanted a letter of request to be sent in relation to currency and tax violation laws! The Swiss Government precisely said 'No.' And that is why in the morning I said that unless you go on the correct legal course and ask the right questions, you are going to draw a blank as indeed you did till December, 1989.

SHRI KAPIL SIBAL: That is why finally you drew a blank on Bofors ...(Interruptions)...

We can discuss that separately...(Interruptions)...

SHRI KAPIL SIBAL: That is why you drew a blank.

I will deal with your approach separately ...(Interruptions)...The FEMA, which is the only case they are investigating, has no powers of letter rogatory in the Act itself. Mr. Chidambaram now wants us to accept that under FEMA a request will be sent to some other agency which will then move the court for letter rogatory. Sir, FEMA, as Mr. Sibal rightly said, speaks in terms of adjudications, penalties and does not speak about other penal offences. The language of Section 166, besides the Indo-Swiss Treaty, requires duel criminality. The FEMA does not fall under dual criminality. It requires, under Section 166, a case under investigation. Unless a case is under investigation i.e., FIR has been lodged, letter rogatory cannot be issued under Section 166A. Who will issue letter rogatory? The court on an application made by an investigating officer...(Interruptions)...You are doing exactly the opposite. Sir, you cannot camouflage this cover up exercise...(Interruptions)...

SHRI KAPIL SIBAL: Even now you give us a piece of evidence. We will do it...(Interruptions)...

Therefore, the FEMA investigating officer, the moment, he goes to a special judge, no Indian court, without a case under investigation, without an FIR or without power under the Act, is going to allow him to issue letter rogatory. Under FEMA there is no power. And, I think, the proof of the pudding will be in eating where a few months from now if they try and issue letter rogatory under FEMA using Section 166 and some other investigating officer, it will be a procedure completely unknown to law. It will be a procedure completely unknown to law. And, therefore, in the absence of that power, you want us now to believe that Justice Pathak has no power. But, he will request any investigating agency which is not investigating the case, to go to special judge. You reasonably expect the special judge...

SHRI P. CHIDAMBARAM: It is very unfair to Justice Pathak. Please read the Terms of Reference. Please read the last Term of Reference. Justice Pathak can make any recommendation or suggestion to the Government of India following his findings in the earlier Terms of Reference. I think, you are unnecessarily and unwittingly raising this and it is unfair to the Chief Justice of India.

I don't think the personality of a former Chief Justice of India is the question in issue. The question in issue is: Is Justice Pathak, in his capacity as a Section 11 Committee or even as a Section 3 Commission entitle to issue letter rogatory? The answer is big 'No.'...(Interruptions)...

SHRI P. CHIDAMBARAM: Justice Pathak can recommend to the Government that in view of his findings the Government should file an FIR and apply for letter rogatory...(Interruptions)...

SHRI N. JOTHI: If he cannot do it now, when will he do it? After five years! (Interruptions)

I, now, deal with Mr. Chidambaram's main argument. Chief Justice Pathak will ask some other investigating officer, not investigating the case, no FIR registered, no dual criminality principle, to ask Switzerland to give us information. The answer is going to be a clear 'no'. The answer is going to be a clear 'no'! This is exactly what the Government between 1987 and December 1989 had tried; and, this is exactly what this Government is trying to do now. Mr. Sibal, in the morning, wanted to put a question. I ask which are the cases that are made out. If a political party, prima facie, on the basis of this material is alleged to be an entity, receiving money, ....(Interruptions)

Sir, this is precisely what a Government, which lacks bona fide... (Interruptions) I, as a Government,...(Interruptions) Mr. Sibal,...(Interruptions) Mr. Sibal's response is, I, as a Government, will make not make an honest effort to bring the evidence; you, as an Opposition, bring the evidence. (Interruptions) But that is the tactic what you....(Interruptions) This is exactly what you have been doing. (Interruptions) I am sorry, this is exactly what the Government has been saying. (Interruptions) In the morning, you said, "Mr. Jaitley, ...(Interruptions)

SHRI KAPIL SIBAL: Mr. Jaitley, it is not fair. You made an allegation saying that there is enough evidence. I ask you where the evidence is. (Interruptions)

SHRI N. JOTHI: Here it is. What more you want? (Interruptions)

SHRI P. CHIDAMBARAM: Sir, either the evidence is there, or, we have to gather evidence. According to us, the evidence is not there in the Report. We have to gather the evidence. (Interruptions) Mr. Jaitley says that evidence is there. (Interruptions) We are gathering the evidence. (Interruptions) If evidence is there, please tell us which is the evidence. (Interruptions)

Sir, Mr. Chidambaram will realise that, in this game, none of us was born yesterday. So, we know what the truth is. The truth really would be that there is one set of material on which Mr. Volcker has made his recommendations. That set of material, on the basis of which Volcker makes his recommendations, may be possible through diplomatic channel, through Mr. Virendra Dayal or otherwise, to request the United Nations to give us the documents. Perhaps, some of those documents we have brought. That is one set of documents. But that document would only sustain what is mentioned in the Report. The next step, which you don't want to honestly investigate, is when Masfield or Vitral did the oil transaction -- you were right in your analysis when you said some part of the money went back to Jordan to go back to Iraq -- what happened to the balance money? This is where the core of the conflict lies.

In order to investigate what happened to the balance money, you must unveil the secrecy of the Swiss banking laws. To unveil the secrecy of Swiss banking laws, you must have a case under investigation; you must have a letter rogatory. Their argument is, unless they get the material, they will not lodge an FIR, they will not send a letter rogatory. The entire bone of contention, now, is.... (Interruptions) You will get the Volcker documents, I have no doubt. But the second limb of the argument is, where did the money go from Masfield? Who all shared the money? What did the non-contracting beneficiaries get? Now, in order to investigate Volcker is not going to help you. To unveil the Swiss banking secrecy laws, which is really required, you must go through the legally correct methodology. You can't grope in the dark. You can't follow legally flawed methodology, and, then, say you have not been able to get answer. The answer for which is that you must register an FIR, you must send a letter rogatory. And, your argument is that you will register an FIR and send a letter rogatory, till you first get an evidence. You will not get any evidence unless you go by the correct methodology. (Interruptions) Sir, I said in the opening that what is the tactic that the Government is following.

Their first tactic is, rubbish the report. And I am sorry to say that my two distinguished friends and senior Ministers in this Government, instead of being responsible spokesman of a responsible Government to say "this is preliminary material, we will honestly try to investigate the rest," the principle exercise they have done today is, let me rubbish whatever evidence is on record. It is a case, we least expected the Government's spokesmen to act as defence lawyers for the non-contracting beneficiaries.


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