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TMI Blog2004 (2) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... t Matin Ardbo to cheat the Government of India inasmuch as that they had agreed to do or caused to be done illegal acts or acts which are legal by illegal means to cause wrongful loss to the Government of India to the tune of SEK 8410.66 million i.e. Rupees 64 crores for the award of the contract for supply of 410 guns of 155mm and by deceiving the Government of India by fraudulent representation that the said gun and gun system was better in quality and cheaper in price and that no agent or middlemen would be used in the negotiations for the contract and they would reduce the price of the gun to the extent they would otherwise pay to their agents by way of commission and thereby cheated the Government of India. These offences are punishable under Section 120-B/420 IPC. 2. The public servants Rajiv Gandhi and S.K. Bhatnagar were also charged for having committed criminal misconduct by abusing their official position so as to gain pecuniary advantages to all of them and having taken illegal gratification for awarding the contract in favor -of Bofors. Hinduja Brothers, Bofors, Martin Ardbo and Win Chadha have also been charged for having abetted the public servants to commit such of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of officers of CBI hopped to foreign countries every now and then to collect the evidence against public servants but returned empty handed as till date there is no evidence to show that public servants had taken bribe in awarding the contract of guns to M/s A.B. Bofors & Co. either themselves or through Bofors' agents though it has succeeded in tracing the Swiss accounts of "Commission Agents" employed by M/s A.B. Bofors wherein illegal payments received by them from Bofors as commission were deposited. 7. This case is a nefarious example which manifestly demonstrates how the trial and justice by media can cause irreparable, irreversible and incalculable harm to the reputation of a person and shunning of his family, relatives and friends by the society. He is ostracised, humiliated and convicted without trial. All this puts at grave risk due administration of justice. 8. It is common knowledge that such trials and investigative journalism and publicity of pre-mature, half baked or even presumptive facets of investigation either by the media itself or at the instance of Investigating Agency has almost become a daily occurrence whether by electronic media, radi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursue a campaign of vilification of someone who has been before the court, in a way which causes hate mail to be sent, which causes his family to be under the need to move house, which causes his children to be shunned by other children in the neighborhood, is doing no public service. Furthermore, if it is intended to bring pressure to bear on the courts, then it is wholly misguided." [(Attorney General's reference (1995) 16 Cr.App.R 5] 13. This is one of such cases where public servants who are no more have met somewhat similar fate being victim of trial by media. They have already been condemned and convicted in the eyes of public. Recent instance of such a trial is of Daler Mehandi whose discharge is being sought few days after his humiliation and pseudo trial through media as they have not been able to find the evidence sufficient even for filing the chargesheet. Does such trials amount to public service is a question to be introspected by the media itself. 14. Here is a 'Gun' known as 'Bofors Gun' that created political explosion before it could explode in the battlefield and prove its credentials. Explosion was so powerful that it engulfed the hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by Army Headquarters recommending, inter alia, the introduction of 155 mm caliber medium guns both towed and self-propelled to meet its defense operational requirements. The choice for obtaining the said gun system/guns was shortlisted in December 1982 to (1) M/S Sofma of France, (2) M/s. A.B. Bofors of Sweden (briefly called 'Bofors'), (3) M/s International Military Services of U.K and (4) M/s. Voest Alpine of Austria. Bofors had given the undertaking vide letter dated 10.3.1986 that they will have no Indian Agents for the purpose of this contract and promised to reduce the price to the extent of commission they even otherwise would have paid. Finally, the order was placed by the Government of India with Bofors on March 24, 1986 for the supply of 410 numbers (400 plus 10 free) of 155 mm Field Howitzer 77-B gun system/spare guns vide contract No. 6(9)/84/D (GS-IV) for a total amount of SEK 8410.66 million (Swedish Kroners) (equivalent to about Rs. 1437.72 crores or Rs. 1477.2 millions). The related contract for supplying the gun package (towed) and other related agreements/contracts were concluded and signed on March 24, 1986 by M/s A.B. Bofors, the then defense Secreta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e report inter alias concluded that there is no evidence to establish that the Bofors payments totalling SEK:319.4 million involved a violation of any Indian law. 24. Simultaneously, the Comptroller & Auditor General of India (CAG) was also carrying out its own independent audit into the Contract. The CAG submitted its report to both the Houses of Parliament in July 1988. 25. Despite JPC report, allegations of malpractices in the deal with Bofors, payments of kickbacks and receipt of illegal gratification were persistently reiterated and the matter was reliantly agitated. Meanwhile, there was a change of Government. In the aforesaid circumstances, the Superintendent of Police, CBI/DSP/ACU-IV, New Delhi registered a first information report on January 22, 1990 in crime No. RCI(a)/90/ACU-IV under Section 120-B read with Sections 161, 162, 163,164 and 165A of the Indian Penal Code read with Sections 5(2), 5(1)(d) and 5(2), 5(1)(c) of the Prevention of Corruption Act, 1947 read with Sections 409, 420, 468 and 471 of the Indian Penal Code against 14 accused including Martin Ardbo, Win Chadha and G.P. Hinduja. The rest of the 11 accused are stated in general as directors/employees/hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esheet was filed on 22.10.1999. During the course of investigation, a set of documents was received in December, 1999 from the Swiss Authorities in execution of the Letter Rogatory dated February 7, 1990. These documents have revealed that, besides payments made by M/s Bofors to M/s Svenska Inc./W.N. Chadha and M/s AE Services Ltd./Ottavio Quattrocchi, payments were also made by M/s AB Bofors to M/s Mc Intyre Corporation to the tune of SEK 800,797,709.92 during the period May 1986 to December 1986. This Company was a Panamanian company registered in Panama on February 14, 1986. 30. Thus the investigation revealed that payments to the tune of SEK 80.80 million were also made by M/s AB Bofors to S.P, Hinduja, G.P. Hinduja and P.P. Hinduja through M/s Mc Intyre Corpn besides monies paid to Win Chadha and Quattrocchi. 31. Interestingly the CBI did not file the charge sheet for the offences punishable launder Section 161 and 165A which meant that the public servants had taken gratification other than the legal remuneration while awarding the contract in favor of Bofors and further that the petitioners namely Bofors, Hindujas, Quattrocchi and for that purpose Win Chadha had abetted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy with Mr. Quattrocchi, a family friend who had uninterrupted access to PM House as he was to gain immensely in terms of commission as Bofors had set the dead line for the award of the contract. 36. Induction of Mr. Quatrocchi at later stage by AB Bofors as per prosecution shows the ulterior motives and extraneous consideration which guided Mr. Gandhi and Mr. Bhatnagar to award the contract in favor of Bofors by bulldozing the process of selection by way of even not giving the opportunity to the competitive contender Sofma to come up with the proposal for reduction of the price. Large number of documents have been relied upon which prosecution collected during investigation viz the details of payments made by Bofors to Hindujas, Win Chadha and Quattrocchi from time to time as commission for award of contract, details of which were supplied by Swiss authorities as and when sought by CBI through letter rogatories. 37. The contentions raised by Mr. Mukul Rohtagi when summed up are like this:- (i) To achieve one big design of awarding contract to Bofors everybody was acting differently in his own way but the conspiracy was to get the award either by way of using their contacts, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Bhatnagar got the file cleared in favor of Bofors in one day though so many functionaries were involved in the decision. Element of illegal gratification or misuse of official position is not only inferable but ingredient of strong suspicion surfaces when it is further viewed in the post contract events. (vi) When the Swedish radio broke out the news that money has been paid to procure the contract by Bofors and the names were not coming out, the then Chief of Army Staff, Mr. Sunderjee on 13th June 1987 by a written note suggested that Bofors contract may be cancelled. But Mr. Bhatnagar returned the note to the Army Chief and stuck to his earlier view by his subsequent note dated 15th July 1987. (vii) Furthermore, in the draft note prepared by Sh. N.N. Vohra, Additional Secretary for the Cabinet, the views of the Army Chief were specifically mentioned. But Mr. Bhatnagar deleted the same in his letter dated 27th July, 1987 sent to the PMO stating that cancellation of the contract would be premature, financially inviable and adverse to the security scenario. (viii) Further that Mr. Gandhi also took the decision on 4.7.87 that the matter may not be pursued with Bofors in rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce alone bares the designs of the public servants and the Commission agents as well as Bofors who had entered into secret conspiracy for getting the contract. Had the Government of Sweden threatened to blacklist Bofors because they were getting bad name among the nations much more would have been revealed which even till date CBI has not been able to reveal in spite of their best efforts. (xii) Note of Joint Secretary dated 14th July 1987 (Page-1154; Vol.-9) classified as 'Secret' shows that there was a suggestion that since the superiors of Bofors and President should come to India forthwith and also bring all relevant documents and they should report In Delhi by Monday i.e. 6th July or latest by 7th July, 1987 i.e. within four days. But this suggestion was put in cold storage and thwarted by Rajiv Gandhi in the CCP which took place on 4th July, 1987 at the residence of PM which is apparent from the statement of N.N. Vohra (PW9). (xiii) The statement of Mr. Vohra shows the desperation of Rajiv Gandhi to stop the superiors of the Bofors from coming to this country that wherever they had landed they should be asked not to come inspire of the fact that no message could re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied from the movement of files and action of Ministries and other steps taken by the defense Ministry in concluding the contract. (v) Agreement dated 15.11.1985 (Annexure IV Form XIV, page 255) which was made between Bofors and M/S A.E services shows that the agreement between Quattrocchi and Bofors was not an open ended agreement which normally in such contract is but was a time bound agreement that is if by 1st April, 1986 letter of award of contract is not issued and there is no renewal of the agreement, the contract would expire. This agreement itself projects the amount of clout Quattrocchi had with the power that be. (vi) The statement of account in Lord Financial Bank shows corresponding payments made by Bofors to AE Services in terms of Clause 5 of the agreement (page 2706 Volume XIV). The entry shown in the statement is withdrawal of 7.33 crore $ out of total amount of 7.34 million $ in the account of Kolbar investments. The amount received by AE services is exactly 3% of the commission paid by Government to M/s. Bofors 39. Let us see what the learned ASG has to say regarding charge for the offence under Sections 120B/420 IPC i.e. Cheating the Government of India agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly document showing in the account of TULIP amount of commission received for the contract from Bofors and not for any other contract. Another such amount is in the name of Lotus. (g) There are large number of such receipts of commission received in the aforesaid coded accounts. Similarly the commission was received from ABB in the account of TULIP. (h) Chart prepared by the Investigating Judge of Switzerland after giving due notice to Hinduja Brothers and Therefore credibility is attached to this document shows that money came from Bofors first in the account of Tulip, Lotus, Mont Blank and after transferring the amount, was deposited in Ashoka Middle East Corporation Nigeria which is owned by P.P. Hinduja, G.P. Hinduja and S.P. Hinduja. (i) There is name of Ashoka Middle East Corporation on the list and their account in Liberia which shows that this account is in the name of P.P. Hinduja as the proprietor and owner of the firm and form is signed by him. The entire account is projected at page 309. (j) Hindujas have failed to show as to for what services or transaction relating to counter-globe trading they had received the payment from the Bofors while the documents o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sibal, learned senior counsel who assiduously assailed the conclusions of the learned Special Judge. Mr. Sibal's contentions, in brief, are like this:- (i) There is not even a single suspicious circumstance which may suggest that the commission earned by Mc Intyre Corporation was meant to be bribe taken on behalf of Mr. Rajiv Gandhi and Mr. S.K. Bhatnagar. The learned Special Judge does not even record the finding that either of these two public servants were aware of the existence of Hindujas much less that Hindujas would earn something if the contract goes through. (ii) The prosecution evidence is overwhelming and incontrovertible that the contract was awarded by the civil authorities because the user namely the Military firmly made up its mind in favor of Bofors and public servants had no option than to award contract in Bofors' favor. (iii) In the impugned order Special Judge has made observations referring to evidence verging on the findings of conviction against Rajiv Gandhi and S.K. Bhatnagar which even otherwise could not have been referred to or relied upon. If at all there is any independent evidence against the petitioners Bofors, Hindujas or Chadha or for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of this Contract including the Annexures, Enclosures and Clauses shall be harmoniously construed. The parties have executed this Contract on the basis that the provisions in the Clauses and Annexures both inclusive represent the entire Contract. This Contract sets forth the entire undertaking of the Parties in respect of transactions contemplated hereby and supersedes all prior agreements, arrangements, representations or understanding relating to the subject matter hereof." (viii) By no stretch of imagination public servants can be accused to have cheated the Government on any aspect including the price, quality or any other aspect. It is neither the case of the prosecution nor any evidence in this regard. (ix) In commercial transaction the State can choose its method and price is not always the whole criteria for awarding the contract, reliance is placed upon Air India Ltd. v. Cochin International Airport Ltd. and Ors. with Cochin International Airport Ltd. and Ors. v. Cambatta Aviation Ltd and Ors. [2000] 1 SCR 505 wherein the following observations were made:- "The award of a contract, whether it is by a private party or by a public body or the State, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public servants still the fact remains that they cannot be allowed to cross-examine on behalf of the public servants either to project their defense or that of the public servants who are no more. By the doctrine of reasonable procedure they cannot be allowed to usurp the right of the public servants or for that purpose the accused who are dead for cross-examining the witnesses sought to be produced against the alleged accused persons even to prove the defense of the surviving accused persons. The Supreme Court has in Mrs. Maneka Gandhi v. UOI [1978] 2 SCR 621 (at page 281) laid down that on the concept of reasonableness of a procedure as projected in the procedure contemplated under Article 21 the Court should not be allowed to adopt an unreasonable procedure. In nut-shell the procedure should not only be reasonable but right just and fair and not arbitrary. (xii) As per Section 231 Cr.P.C. the prosecution is required to lead evidence in support of its case the moment the accused enters into the plea of non-guilty. Section 233 requires the accused if he is not acquitted to be called upon to enter on his defense and to provide any evidence he may have in support thereof. Such a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove charge of conspiracy against public servants. (xv) The observations of the judge in the order dated 29th August, 2002 dismissing the application for dropping the proceedings under Article 21 of the Constitution for failure of expeditious justice show that the prosecution has collected no evidence. The observations are self-contradictory and shake the foundation on which the charges were framed. The observations are based on the material witnesses from Sweden including Mr. Morbarg and Las Gothlan and no further evidence has been acquired by the CBI. (xvi) The charges have been framed mainly on the presumption that though the remuneration received by Hindujas were towards the consultancy services provided by Hindujas till May' 86 for negotiations of the award of contract of Bofors but these must have been received on behalf of Rajiv Gandhi and would have gone in favor of his account had the scandal not broken out. The fact remains that from May' 86 to April' 87 the money remained intact not only in the accounts of the Hindujas but also was being used by them in their business. What a fanciful flight of imagination. This was neither the case of CBI nor the evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a maverick. All this was, however, a deliberate posturing and part of a well conceived and pre-arranged plan to apparently show the non-involvement of middlemen/agents in the deal and to achieve the oblique purpose by direct negotiations on the one hand and to have secret middlemen on the other hand." (xxi) The observation of the learned Special Judge in para 234 is contradictory to the case of the prosecution to the effect that there was no proper policy of the Government of India prohibiting agents in the deal. (xxii) It is neither the case of the prosecution nor is there any evidence and the learned Special Judge has assumed himself that the JPC was not only constituted under public pressure and that of opposition, but it was packed with people sympathetic to the ruling party, even though the controversy did not die down. These observations of the learned Special Judge verge on breach of privilege of Parliament. (xxiii) The angle of conspiracy and the abetment to commit the offences has been dealt with in Para 308 and the learned Special Judge has culled out 1.4 circumstances most of which are wholly presumptive and imaginative and have neither any basis nor any mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary by the P.M. to Karkan was that the Swedish Government should not make an inquiry as promised in view of the appointment of JPC because the findings of the Swedish Government will go long way in getting rid of the rumours in India about the contract. Even if it is assumed that Rajiv Gandhi advised the Swedish Government not to continue with the investigation that India has appointed JPC for this purpose it cannot be taken to be post contract such conduct which may fortify the allegation of conspiracy and further the Bofors people were also summoned before the JPC is not an evidence that they made no effort of any kind whatsoever to scuttle or withhold the inquiry conducted by JPC. So much so subsequently letter to the Swedish Government was sent that he had also no objection if the inquiry was conducted at their end. (xxix) The meeting of the mind is an essential ingredient of conspiracy. Circumstances leading to the meeting of mind alone are admissible and any other circumstances or allegation cannot come within the ambit of meeting of mind. None of the circumstances relied upon by the CBI during the contract or after the contract project or demonstrate any meeting of minds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irreceivable in evidence not only against the public servants but also against other alleged co-conspirators. Thus prosecution can confine its evidence only from the point and to the extent of allegation of conspiracy between the Hindujas and Quattrocchi and Bofors for awarding the contract. Since in the instant case the prosecution has as per its own investigation assigned the role of conspiracy to Hindujas post March, 1986 the charge of conspiracy to cheat the Government by corrupt or illegal means against public servants cannot stand. (xxxiv) Allegation of conspiracy of Hindujas and Quattrocchi or Chadha with S.K. Bhatnagar or Rajiv Gandhi at the point of awarding the contract cannot stick as even if is presumed that they had been operating in India as commission agents for Bofors, whatever they were doing they were doing of their own and if at all they had received any commission from Bofors as a reward for awarding the contract the charge of conspiracy for any offence by no stretch of imagination can stick against the public servants. (xxxv) So far as the averment in the charge that no agent or middleman would be used in the negotiations for procuring the contract the elem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed with an attempt to tarnish the image of Hindujas who are involved in philanthropic activities in this country and merely because they were associated with Bofors as their agents for counter-global trading activities they cannot be charged for the alleged offences. In order to avoid repetitiveness I shall attempt to concise their contentions collectively. These are:- (i) Hindujas are only consultants and commission agents for Bofors in procuring the contract. If the reliance placed by the prosecution on the documents referred is accepted it no where leads to the fact that the Hindujas were acting in conspiracy with the Rajiv Gandhi or SK Bhatnagar for manipulating the award of contract and accepting the consultancy commission as a bribe. Bofors have throughout been writing to PITCO and MORESCO that they would be giving them 5% commission as marketing expenses or some other commission and later through the letter dated 1st July, 1985 they extended the consultancy agreement as Hindujas had been working as a consultant till July 1, 1985. The last document shows that Mr. Rajiv Gandhi still was an Avro Pilot and had not become the defense Minister or Prime Minister of the country. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io on 16th and 17th April, 1987, the Bofors agents were called and first meeting of Indian Ambassador and Bofors Agents took place on 20.4.1987. Bofors people explained that payment of this order was made by them to Hindujas as consultancy fees. They denied having made any payment to the Hindujas on account of the awarding of contract in question. However, the aforesaid payment was accounted in the books of accounts of the Company. (vii) It is the case of the prosecution that the money alleged to have been received by the Hinduja was payment pursuant to the 19.10.1979 agreement between them and Therefore question of element of ingredients of conspiracy cannot arise. Nor can the ingredients of Section 420 be made out. (viii) On the directions of IPC, Indian officers and Officers of Bofors were directed to file summary of their agreed points. As per the report of JPC, last payment was received by Hindujas in December, 1986 and no payment was made thereafter. Contract was concluded on 24th March, 1986. All these payments were made between May, 1986 to December, 1986. Even the JPC accepted the Explanation of Bofors on which the prosecution relies upon. Observations of the learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on behalf of the Bofors. However, it appears that they have been involved for the offence punishable under Section 420 and abetment to offences of illegal gratification and misuse of official position mainly on the presumption that the money deposited in P.P. Hinduja's accounts was diverted for the promotion of business of S.P. Hinduja and G.P. Hinduja thereby they were party to the receipt of money as illegal gratification on behalf of Rajiv Gandhi. In other words S.P. Hinduja and G.P. Hinduja are being charged of being financial beneficiaries of money received by Mc Intyre or their brother P.P. Hinduja. Such a presumption cannot form basis for aforesaid charges. These charges if any are strictly applicable to public servants. (xiii) It is not the case of the prosecution that Hindujas, Quattrocchi or Win Chadha had accepted bribe on behalf of public servants. The case of the prosecution is that by way of paying commission to them not only they by way of misrepresentation and dishonest concealment that they were not working as commission agents but Bofors also committed mischief of cheating but the learned Special Judge had taken upon himself to frame charges for the offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... global counter trade activity. This aspect could have been established either by office employees of Bofors or the Directors and Constituted Attorneys of Mc Intyre Corporation. No statements have been recorded of any of the Bofors officers nor they are cited as witnesses and further the Directors and Constituted Attorneys of Mc Intyre Corporation are not available as they have died. (xvii) It is not understandable from which material the learned Special Judge has drawn the conclusion that SP Hinduja and GP Hinduja initially opened accounts in their names but later on a thought occurred to them and cancelled it and opened account in the name of Mc Intyre Corporation, This is also not the case of prosecution that account was opened by Mc Intyre Corporation in Switzerland for the purpose of putting the money received as commission or bribe from Bofors. However it is at the later point of time i.e. at the end of 1986 they opened individual account wherein part of the money lying in Mc Intyre was transferred. (xviii) It is only a figment of imagination that SP and GP cancelled their account when second thought occurred not to open their account in their individual names and allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, in accordance with Articles 77(3) and 166(3) respectively. Wherever the Constitution requires the satisfaction of the President or the Governor for the exercise of any power or function by the President or the Governor, as the case may be, as for example in Articles 123, 213, 311(2), Proviso (c), 317, 352(1) and 360 the satisfaction required by the Constitution is not the personal satisfaction of the President or of the Governor but is the satisfaction of the President or of the Governor in the constitutional sense under the Cabinet system of Government. The reasons are these. It is the satisfaction of the Council of Ministers on whose aid and advice the President or the Governor generally exercises all his powers and functions. Neither Article 77(3) nor Article 166(3) provide for any delegation of power. Both Articles 77(3) and 166(3) provide that the President under Article 77(3) and the Governor under Article 166(3) shall make rules for the more convenient transactions of the business of the Government and the allocation of business among the Ministers of the said business. The rules of business and the allocation among the Ministers of the said business all indicate that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not permissible as the Court cannot direct the Government to pay the exemplary damages to itself and Therefore the plea that such a direction was made to the petitioner personally and he was treated as a separate distinct entity from the Government did not find favor. 52. Mr. Jethmalani further contended that the argument adopted by the trial court while dismissing the contention against the charge of cheating was not at all sound nor was it addressed properly as the doctrine of collective responsibility applies to a Minister's act as well his officials' act. Had it not been so there was no concept of responsibility of a Minister for the act of his subordinate and, Therefore, the learned trial court traversed into the area that did not belong to it and also adopted altogether a different line of thinking which was never put up or addressed before him. The simple question before him was whether the ingredients of Section 420 IPC were made out or not and in that direction the executive actions of every Minister or for that purpose an official whose decision was final was deemed as the decisions of the Government of India to be made known in the name of the President ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani further contended that prosecution's case has to be supported by way of evidence either documentary or oral. Prosecution itself does not make out its case that Hindujas have received this payment for Rajiv Gandhi and the Explanation of the petitioners has all the more reasons to be believed and acted upon and it is highly far fetched that the learned trial judge has used the Explanation given by the other two brothers namely SP and GP Hinduja against them presuming that they are also having some connection with the company in whose account the money was deposited whereas the fact remains that PP Hinduja alone is head of the company and moreover PP Hinduja only stated that in actuality and at first go the money was received by him and put into the account of Mc Intyre Corporation which is solely owned by him and it was subsequently that this money was transmitted to different companies of which GP and SP Hinduja happened to be the Directors, SP and GP Hinduja admittedly are not the Directors nor the beneficiaries of the company-Mectyre. 57. According to Mr. Jethmalani if a court acts upon an admission of an accused it has to either act in toto or reject it. In support of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence. - Secondary evidence means and includes - (1) Certified copies given under the provisions hereinafter contained; (2) Copies made from the original by mechanical processes which in themselves insure the accuracy of the copy, and copies compared with such copies; (3) Copies made from or compared with the original; (4) Counterparts of documents as against the parties who did not execute them; (5) Oral accounts of the contents of a document given by some person who has himself seen it. Section 78(6) provides as under:- 78(6) - Public documents of any other class in a foreign country, - by the original, or by a copy certified by the legal keeper thereof, with a certificate under the seal of a Notary Public, or of (an Indian Consul) or diplomatic agent, that the copy is duly certified by the officer having the legal custody of the original, and upon proof of the character of the document according to the law of the foreign country. 59. Mr. Jethmalani further contended that even if it is assumed that the documents are photo copy still the fact remains that what is required is to prove is the truth of the contents of the documents and the truth of the contents of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very terms of Section 8. It is reasonably clear that evidence of acts, statement of a co-conspirator either under trial or not on trial but outside the period of conspiracy would not be admissible in proof or of specific issue of the existence of the conspiracy. (vi) Merely because the result of the conspiracy is continuing does not make the conspiracy of continuing nature. To constitute a continuing conspiracy there must be continuity of action to produce the unlawful result. Similarly extra judicial statement of a co-conspirator is not admissible in evidence where it is not made in furtherance of the alleged conspiracy charged but made in furtherance of an alleged implied and uncharged conspiracy. (vii) Oral commitment was to exclude the Indian agents. Hinduja was not Indian agents and Therefore Bofors excluded him. It is nobody's case that Hindujas participated or had acted clandestinely in their capacity as agent by contacting the public servants or the officials of the Government or the Army Officials. Whatever they paid was towards the obligation of the Bofors to them ranging from 1979 for various services provided by them. 61. On behalf of AB Bofors which has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 'person' whenever appearing in Section 415 can include a body corporate or a company as the person who deceives has to be liable for imprisonment which body corporate is not. Thus any person being in charge of and responsible to the affairs of the company alone can be prosecuted for offences which provides for mandatory imprisonment. 65. According to Mr. Sen Gupta wherever word "person" is appearing in any of the sections of IPC it necessarily refers a person who is a victim but not a person who is alleged to have committed a criminal act for which punishment of imprisonment has been prescribed. Section 3(42) of the General Clauses Act also defines a person including any company or association or body of individuals whether corporate or not. The scheme of IPC wherein a person was defined did not apply to the word 'whoever' appearing in almost all the sections of IPC. 66. Had there been any intention on the part of legislature to make a body corporate or company a person liable to be punished or sent to imprisonment word "whoever" should have been substituted by word "any person" but it is not so. The reason is simple. Body corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. It is contended that in the absence of such a policy payment of commission to Hindujas and for that purpose to Win Chadha or Quattrocchi does not attract offence under Section 420 IPC. 70. Mr. Sengupta further contended that inspire of the letter rogatory sent by the CBI that they are not prosecuting the Bofors Company because of the act of its executives, record of discussion that took place between the defense Secretary and Martin Ardbo, Chairman of Bofors wherein he was told that there is no policy of the government to have commission agent and offer was made that the commission made by them has to be reduced in the price of bofors guns, is not correct account of meeting as no such commitment had been given by Ardbo, nor did he send any communication in this regard to the Government that they will not have any commission agent in India. Thus, neither Ardbo nor Bofors can be said to have cheated the government or having gone back on their commitment to the Government. There is mention in the said record that Ardbo only said to defense Secretary that he will consider this proposal and will come back to him. According to Mr. Sengupta apart from this record of meeting there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld consider this suggestion of Mr. Bhatnagar. In other words Mr. Martin kept the question of dealing through commission agent open and the conversation between Mr. Bhatnagar and Mr. Martin in a meeting of 3rd May, 1985 which is recorded in the minutes of meeting nowhere binds Martin that he would not involve any commission agent nor would use the services of any commission agents or middlemen. Record of discussion shows that Martin said that he would consider the advice of defense Secretary on the Policy of the Government of India and take necessary action. 74. Mr. Gupta further contended that even the letter dated 10th March, 1986 whereby Bofors confirmed that they did not have any representative/agent especially employed in India for the project though for administrative services they are using a local firm Anatronic General Corporation cannot be construed as the undertaking given by Mr. Martin in not appointing or continuing with the commission agent but also does not amount to acceptance of the alleged Government policy which is nowhere in writing and it was only through oral discussion that some intention was expressed by Mr. Bhatnagar that as per their new policy they shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, the evidence is that Hindujas used the money for their own business by way of withdrawing from the main account and transferring it to other accounts of theirs. 79. Had there been any such arrangement or conspiracy that as many as three agents would be paid "commission in the garb of illegal gratification for public servants for awarding contract there was no difficulty because of the "confidentiality clause" for the recipients and the givers to give indication in the accounts as nominee or joint-holder or any other kind of arrangement or indication that any amount was subsequently withdrawn and transferred to any secret account of public servants. 80. Similarly Quattrocchi also held the money in his own account and had been transferring part of monies in different accounts opened by him. To allow the imagination to fly that AB Bofors paid bribe to public servants through Hindujas, Chadha and Quattrocchi to get the contract and in return they held the amount of alleged "commission" paid by AB Bofors as a trust for more than a year or so is nothing but to deceive oneself. This itself rends the CBI's case from foundation to cornice. 81. Had elemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offer of a rival viz. "Sofma" that too made subsequent to the letter of intent was issued in favor of Bofors the public persons had misused their official position. 85. On the face of it such a theory is difficult to ram down the throat for the simple reason that when the contenders were short listed and called upon to give the undertaking that they would neither involve Indian agents nor would pay commission to them and would rather reduce the price by the corresponding amount of commission they would even otherwise have paid to their Agents they re-quoted their reduced price and Price Negotiating Committee comprising of several members though headed by late S.K. Bhatnagar had no other option than to decide in favor of Bofors whose gun had not only edge over as to its quality and peculiar feature of "shoot and scoot" but at relevant time cheaper in price also. It was after Letter of Intent (LOI) was issued that "Sofma" woke up and like a loosing gambler offered to reduce the price further. Though it was too late yet the price in terms of money was higher as Bofors scaled down its height by offering ten guns free. 86. Let us assume that "Sofma&q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false documents by fraudulently agreeing to pay to Svenska Corporation i.e Mr. Quattrocchi 80 million SEK in Installments whereas it had informed to the Government of India that there was no such arrangement with any agent or middlemen. 89. Charges for the offences punishable under Section 120-B/420 IPC, Section 5(2) read with Section 5(1)(d) of the P.C. Act, 1947 and under Section 161 IPC against the petitioners for having entered into criminal conspiracy with the public servants to cheat the Government of India and having abetted the public servants to commit 'criminal misconduct' by abusing the official position and accepting the bribe in awarding the contract have been framed purely on the basis of irrelevant inferences, presumptions, surmises, conjectures and through riotous imagination by even introducing personal knowledge of facts which were not set up by the CBI little realizing that criminal trials cannot proceed nor can succeed on such premises without there being any material or evidence corroborating those inferences. Neither is this the law nor the edifice nor even the crutches the prosecution of any person can stand on. 90. Learned. Special Judge has by fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was Rajiv Gandhi's style of functioning. Shri V.P. Singh was also not the concerned Ministry, but he was asked by Shri Rajiv Gandhi to speak to Mr. Palme instead of asking Sh. Narsimha Rao who was then defense Minister. He would ask several people to do the same thing at the same time. Each person would not know what the other person is up to." (ii) Presumption raised as to the monies received by commission agents as trustees for bribe taken by public servants. Para 311 "All this shows that the moneys paid or at least a substantial part of the same paid to these so-called agents/middlemen was not meant for them but was obtained at the behest of Sh. Rajiv Gandhi to be passed on further. Where further and in What manner has not been possible for the CBI to unearth possibly because of sudden media exposure which made the recipients of the money. Para 287 Investigations, in Guernsey (Channel Islands) have also revealed that the entire money, i.e., US $ 9.2 million (received by Quattrocchi) was further channeled to various accounts in Switzerland and Austria, within a period of 10 days of its receipt in Guernsey. It seems that the money has not yet been with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be illegal and amount to criminal conspiracy. Even if the agents had received the payments as "gratification" in relation to the contact as explained earlier in this FIR, such receipts would be illegal." (order dated 29.8.2002) 92. I deem it needless to refer to catena of authorities laying down the principles for framing the charges for the sake of precision and refer to the celebrated authority of Supreme Court in this regard as these principles have been fortified in cases after case. These principles have been culled out in Union of India v. Prafulla Kumar Samal, 1979 CriLJ 154 as under:- (1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. (2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial. (3) The test to determine a prima facie case would naturally depend upon the facts of eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go for 'Bofors' because of its peculiar feature of "shoot and scoot". None of the public servants had any role in selecting the gun. 96. After 17.2.86 when the Army indicated its choice, finally through Deputy Chief of Staff who was member of the Technical Committee and expressed its stand that even if Bofors gun is costlier, that is the gun which the Army wants, it was obvious that if the army changed its mind in favor of Bofors, it did not do so because of intervention of public servants or Bofors or present petitioners or Quattrocchi or Win Chadha. It was purely an opinion by a body of experts. 97. The element of illegal gratification as envisaged under Sections 161 is according to the prosecution case itself utterly wanting inasmuch as that there is no evidence that the official report of the Army in favor of Bofors was managed, manipulated or procured through corrupt or illegal means. Since the best judge of the weapons to be used by the Government is the Army or its Committee of Technical Experts the Government had no business or role to over-rule that decision. However the Price Negotiating Committee had a limited role of negotiating the price acting on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ense personnel for themselves actually received pay offs, learned Special Judge accuses the CBI for having not gathered the evidence in support of the allegations projected in the F.I.R. How can a judge create evidence of his own when there exists none? 102. In the absence of any evidence or material no inference could have been drawn that the monies received by Hindujas and Quattrocchi as commission were received as bribery on behalf of the public servants. Therefore, the charge for the offence under Section 165A IPC against the petitioners is wholly unsustainable. Merely because prosecution has not collected any evidence or any material in respect of the offence under Section 165A IPC read with Section 161 IPC the Court cannot draw an inference on his own of commission of such an offence by public servants and abetment by the petitioners. 103. The use of codes like Lotus, Tulip/Mont Blanc are part of banking systems and accounts disclose that these were in the name of Hinduja Brothers. Had the monies been retained on trust there was no difficulty for the public servants to have opened such accounts at subsequent point of time and the commission agents having transferred part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attrocchi, Bofors and the public servants to award contract in favor of Bofors prior to the visit of Rajiv Gandhi to Switzerland. The prosecution has not brought anything on record as to what different role was played by the members of the Negotiating Committee than the role played by Mr. Bhatnagar. Thus the element of dishonest intention is utterly wanting. 108. Section 4 of the Prevention of Corruption Act, 1947 relates to presumption where public servant accepts gratification other than legal remuneration. The presumption under this provision is available only to the person who is being tried for the offence under Section 161 of IPC and Clause (a) or Clause (b) of Section 1 of Section 5 of P.C Act of 1947 which directly relates to the person who has directly received the bribe as a public servant. Such a presumption is not available against the petitioners who are not public servants. The petitioners are being tried not under Clause (a) or Clause (b) of Section 5 but under Clause (1)(d) of Section 5(1). The presumption under Section 4 is not available for offences under Section 5(1)d. 109. The charge of criminal misconduct by way of abusing official position against the public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal aspects. 112. Thus by no stretch of imagination these circumstances lead to even remote inference or suspicion about criminal misconduct by the public servants in abusing the official position as contemplated under Section 5(1)(d) of the Prevention of Corruption Act. It envisages that a public servant is said to commit the offence of criminal mis-conduct if he, by corrupt or illegal means or by otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. None of the ingredients are made out from the aforesaid circumstances even if these are assumed to be correct. 113. Subsequent to 1986 there is no material collected by the CBI in support of charge of abetment to corruption. Evidence collected by CBI subsequent to 1986 mainly confines to accounts of the petitioners, Chadha and Quattrocchi and the money paid to them by the Bofors and this by no stretch of imagination can be brought within the mischief or ambit of Section 5(1)(d) or 5(2) of the P.C. Act or Section 161/165A of IPC. By the same analogy no charge of corruption can be established against S.K. Bhatnagar as there is no allegation that he bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed. 118. When the charges for the main offence of awarding a contract against illegal gratification and misconduct by abuse of official position and charge under Section 120B/420 IPC against public servants for having conspired with A.B. Bofors, Hindujas, Chadha and Quattrocchi to cheat the Government of India prove damp squib, charges of conspiracy with public servants to cheat the Government of India or abetting the public servants to commit offences under Section 5(2) read with Section 5(1)(a) of the P.C. Act and offence under Section 161 CPC against petitioners and other commission agents viz. Quattrocchi and Win Chadha are rendered unsustainable. On all these aspects contentions of Mr. Ram Jethmalani and Mr. Kapil Sibal far outweigh those of Mr. Mukul Rohtagi. 119. Now we are left with charges for the offences punishable under Section 120B/420 IPC qua the petitioners and Martin Ardbo for that purpose qua Quattrocchi and offence under Section 465 IPC against M/s A.B. Bofors. 120. First charge is that of 'criminal conspiracy', which is defined in Section 120A IPC, as under:- "120-A--Definition of criminal conspiracy--When two or more persons agree to do, or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to the conclusion that the Bofors contract was cheaper than that of Sofma. The very fact that the user of the gun namely the army had recommended the Bofors gun as the appropriate gun for Indian needs after evaluating its specifications, technique etc. and so much so they also recommended that even if Bofors gun was little more expensive it was the only gun which satisfies Indian needs rules out such an allegation. 123. The contract was awarded after series of meetings detailed discussions on every aspect including technical, financial and contractual between the manufacturers and the working groups constituted by the price negotiating committee. But act of misrepresentation about commission agents and proportionate reduction in price amounts to not only deception but fraudulently or dishonestly inducing the Government of India to do an act that caused wrongful loss to the tune of Rs. 100 crores or so as the agreed commission amounted to the said amount though by the time news broke Rupees 64 crores had been paid and such an act does come within the mischief of Section 120-B and Section 420 IPC qua the petitioners and for that purpose Martin Ardbo and Quattrocchi. 124. So fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127. Documents received by the CBI in execution of Letter Rogatory revealed that besides payment to M/s Svenska Inc./Win Chadha and M/s AE Services/Ottavio Quattrochi, payments were also made by M/s A.B. Bofors to M/s Me Intyre Corporation during the period of May, 1986 to December, 1986. 128. These payments were received in the code names of LOTUS, TULIP and MONT BLANC. These payments have been projected as commission in the credit note specifically mentioning the contract number of the contract in question. The Swedish National Audit Bureau mentions that these payments show that commissions were made to the companies' accounts in Switzerland in relation to the Bofors FH-77 deal. 129. Admissibility of the documents in evidence, which should be presumed to be correct as a material produced by the prosecution, can be decided by the trial court at the appropriate stage. At the stage of framing of charge, the documents which have been provided by the Swiss Authorities and Banks in response to the Letter Rogatory, have to be presumed to be worthy of reliance for the purpose of framing of charges as the element of strong suspicion is in ample existence not only in respect of petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has been culled out in the impugned order in para 362. It is obvious that the object for making these documents was to show that Bofors has agreed to pay US $ 80 million SKE in installment, which is the exact amount, which was paid to Hindujas as commission through M/s. Me Intyre Corporation in three different coded accounts. 135. Similarly, another agreement between M/s. A.B. Bofors and M/s. Svenska Inc. dated 2nd January, 1986 contains a clause that a contract for sales related to Bofors 155 mm field Howitzar system including the Supply, Contract and License Agreement signed on 24th March, 1986 Bofors will pay commission of 3.2% of the ex-works value of orders. Though these documents were executed in January, 1986 but makes a mention of the contract signed on 24.3.986. This agreement also shows payment as commission as has been rightly observed by the learned Special Judge that the purpose for making both these false documents was to give impression that settlement with agents have been made and they have been paid settlement/winding up charges but these documents came to be made during the relevant time. The charge for the offence punishable under Section 465 IPC is thus su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lve element of means read and prescribe mandatory punishment leading to imprisonment. However, its President Martin Ardbo as and when he becomes available shall be charged for these offences. 139. As regards the offence punishable under Section 465 IPC read with Section 464 IPC there is discretion with the court to either impose a sentence of imprisonment or sentence of fine and, Therefore, charge for this offence can be framed against M/s AB Bofors. 140. In the result, the public servants are completely absolved of all the allegations leading to the offences punishable under Section 120B read with Section 420 IPC, for having entered into conspiracy with Bofors and its agent to cheat the Government of India to the extent of commission amount, Section 5(1)(d) read with Section 5(2) of the P.C. Act and Section 161 of IPC for abusing their official position and accepting illegal gratification by awarding the contract to A.B. Bofors. Similarly, the petitioners A.B. Bofors and Hindujas are also absolved from the offences of having abetted the public servants to misuse or abuse their official position and also having abetted the public servants to have received the illegal gratificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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