26 May 2012

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Full Text of Team Anna Report 15 Ministers Accused of corruption PM Manmohan Singh,Pranab Mukherjee, Kapil Sibal also included


Full Text of  Team Anna Report 15 Ministers Accused of corruption  PM Manmohan Singh,Pranab Mukherjee, Kapil Sibal also included


Team Anna has accused Congress, UPA government ministers including Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and Home Minister P Chidambaram of corruption.

Names of 15 Ministers mentioned in Report by Team Anna –




1. Mr. Manmohan Singh
2.Mr. P Chidambaram
3.Mr. Pranab Mukherjee
4.Mr. Sharad Pawar
5.   Mr. S M Krishna
6.. Kamal Nath
7.    Mr. Praful Patel
8.Mr. Vilasrao Deshmukh
9.Mr. Virbhadra Singh
10.Mr. Kapil Sibal
11.Mr. Salman Khurshid
12.Mr. G K Vasan
13.Mr. Farooq Abdullah
14.Mr. M K Alagiri
15.Mr. S K Shinde

Team Anna member Prashant Bhushan told to media that
I have written to PM for a special investigative team to investigate into the charges of corruption into these ministers,"


Team Anna will start, launch an indefinite fast from July 25.
Arvind Kejriwal told to media that We will wait till July 24. If the government does not take steps to (set up SIT), we will go on an indefinite fast from July 25,"


Team wrote a letter to Prime Minister seeking setting up of an independent Special Investigation Team with three retired judges as it members to probe the charges.

They suggested that the government could select the judges from a panel of

1.Justices Sudarshan Reddy
2.A K Ganguly
3.A P Shah
4.Kuldeep Singh
5. J S Verma
6.M N Venkatachellaiah



Below is the Text of Team Anna Report on 15 Ministers and Courrpiton

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)

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 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.

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 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.
(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.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
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.
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.
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 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,
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(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.

Original OM dated April 8, 2008
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(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,
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.
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
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
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 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
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
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:
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 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
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.
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.


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
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
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
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
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



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.  



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, 
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
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. 
•  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.


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
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
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,
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




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
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.


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. 


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.


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).


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


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.”


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.”


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


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


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.




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.


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


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.


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


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


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.

 


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;



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


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


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.


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.


(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.


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)

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.





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
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.



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.




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.



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:


  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.
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”.


    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
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. 
77

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').
78

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
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


Reality views by sm –

Saturday, May 26, 2012

Tags -   Team Anna Report 15 Politicians Names  

4 comments:

Matt May 26, 2012  

Wow that's a huge report, I'm going to have to save this for later sometime. Thanks for the report.

jamos jhalla May 27, 2012  

टीम अन्ना ने फिर सरकार पर भ्रष्टाचार के आरोप उछाले दिए है अब की बार चिन्हित मंत्रिओं का आंकड़ा दहाई पार कर गया है
ट्रायल के लिए फास्ट ट्रेक कोर्ट्स की मांग भी की गई है |
आश्चर्यजनक रूप से सोणे ते मन मोहने पी एम् का नाम भी कोयले की दलाली में घसीटा गया हैलगता है कि अन्ना बाबू राव अन्ना हजारे
कि टीम ने कील ठोकने का गुर मन्त्र हासिल कर लिया है क्योंकि कील को टॉप से ही ठोका जाता है |सरकार कि टॉप पर डाक्टर मनमोहन सिंह
ही हैं उनपर अटैक से कील पर भी सही दबाब बनाने का यह प्रयास हो सकता है मगर दोष मड़ाने के साथ सबूतों का अभाव है इन्हें 'प्रस्तुत करने के लिए
''पुनः सरकार 'पर ही निर्भरता रहे