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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 ..... o 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 offences. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign 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, radio or press. They chase some wrong doer, publish mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 highest political functionary of India, late Mr. Rajiv Gandhi the then Prime Minister of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 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 Secretary Shri S.K. Bhatnagar signed the aforesaid contract for and on behalf of the President of India and by Martin Ardbo, President AB Bofors and also by Anders G Carlberg, Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral 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/holders/beneficiaries of account code and public servants of the Government of India. 26. The preface of the first information report showed that the case was registered on the basis of reliable information received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evealed 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 commission of the said offence. The prosecution even did not seek sanction for prosecution of the public servants for these offences. It was nowhere alleged by the prosecution even remotely that payment made by AB Bofors by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 by way of giving commission to the agents who in turn used their influence over the public servants or by way of bribing them. So it was a big conspiracy designed to win the contract. (ii) Both Mr. Rajiv Gandhi and Mr. Bhatnagar created c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfaces 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 regard to payment of these sums because JPC is going to be constituted the visit of Bofors officials to give material or names if possible was thwarted. Mr. Gandhi also at that point of time spoke to the Swedish Prime Minister and stated that there was no n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reach them before they left Sweden as all efforts were made to contact Braiding and ultimately they did not reach India and the names that they were having with them to whom they had paid the commission or the bribe could not see the light of the day. (xiv) Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 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 against A.B. Bofors, Hindujas and for that purpose Quattrocchi and Win Chadha. Learned ASG has referred to following material and evidence showing that money was paid by the Bofors to three Hinduja brothers in three different coded accounts and the money paid to them at the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 of the Banks clearly show that these payments were as a commission towards the contract in question. (k) From the account of Mc Intrye owned by PP Hinduja three different accounts in the name of other brothers were opened namely LOTUS, TULIP, MONT BLANC for the purpose of diverting the money and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf 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 that purpose Quattrocchi to prove the charge of abetment of conspiracy the prosecution is at liberty to rely upon but there is none. (iv) The charge that the costlier and more expensive and less qualitative guns were taken is based on the premise of Technical report of the Committee whereby both the guns were placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontemplated 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, is essentially a commercial transaction. In arriving at a commercial transaction. In arriving at a commercial decision consideration which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esses 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 trial will operate adversely even against Hindujas and others as Hindujas and they have no wherewithal to cross-examine the witnesses and rebut the evidence to be produced by the prosecution against the public servants. If such an evidence is allowed to be adduced it can not be used against Hindujas and others. Such a procedure would be procedural violation of Article 14 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere 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 evidence. This is a product brewed by the Learned Special Judge himself. (xvii) Charge of abetment in commission of offence under Section 161 IPC read with Section 34 IPC is not made out because it is neither the case of the prosecution nor has any kind of evidence been adduced or collected by the prosecution to show that the Hindujas and for that purpose Win Chadha and Quattrocchi had paid any grat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 material or evidence. (xxiv) The question of entering into conspiracy of Hindujas or Quattrocchi with Rajiv Gandhi or Bhatnagar does not arise as mere receipt of the commission by them subsequent to the award does not show their participation in the conspiracy with the public servants as envisaged under Sections 161 and 165A IPC. The case of the prosecution itself is not based upon these allegations. Bofors paid commission subsequent to awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of all the participants in the conspiracy namely Bofors, Quattrocchi, Hindujas, Chadha and the public servants. (xxx) After the contract was awarded and letter of intent was to be issued there was no question for considering the offer made by Sofma as even at first instance the Technical committee of the Army did not recommend Sofma as recommendations of the Technical Committee of the Army weighed more in favor of Bofors though they short listed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal 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 element of cheating the Government is not admissible in evidence as it was a contract envisaged under Article 299 of the Constitution of India which required to be reduced in the form of document on behalf of the President of India and Section 92 of the Indian Evidence Act excludes any amount of evidence or oral agreement or representation for contract varying or adding, subtracting from the terms of the contract. 42. On the legal position as to the nature of contract executed between the Govt. an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (ii) The most crucial document (it is at page 406) was not taken into consideration by the learned Special judge which could have put at rest the doubt created or nursed by the prosecution as to the role of Hindujas in the negotiations of the contract. The words extension of consultancy agreement for six months' puts at rest the controversy as to the role of Hindujas as all agreements right from 1979 were consultancy agreements. (iii) The crucial question that arises for determination for the purpose of offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 Special Judge that JPC was constituted under public pressure and that of the opposition but it was packed with the people sympathetic to the ruling party demonstrate Special Judge's personal understanding of the Indian Politics and as said by Mr. Sibal amount to breach of privilege of the Parliament and by this statement alone the Judge has disqualified himself from trying the case. (ix) According to the learned Special Judge, the public servants were not paid any bribe nor did they accept any bribe still he jumped to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 offences of which even the prosecution did not accuse the public servants, petitioners or Quatrocchi or Chadha. Neither concealment nor misrepresentation of such a fact, by any stretch of imagination can form basis of charges of abetment of misuse of official position by public servants or abetment in receiving illegal gratification by public servants in awarding the contract. (xiv) The entire gamut and the edifice on which case against Hindujas stand is result of the letter rogatory sent by the Government of India to the Swiss Authorities seeking informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the money of their share to remain in Mc Intyre corporation. In this regard Explanation of GP that though he opened the account but it never fructified and was cancelled and that it was not opened for the purpose of putting the money received from Bofors by P.P. Hinduja is more plausible as at that given time no details about the scam were even in the air. (xix) It is the imagination of the Learned Special Judge while concluding that SP and GP are economic beneficiaries of Mc Intyre. Merely because the Investigating Judge of Switzerland gave the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the decision of any Minister or officer under these two Articles viz., Article 77(3) in the case of the Governor of the State is the decision of the President or the Governor respectively. Further the rules of business and allocation of business among the Ministers are relatable to the provisions contained in Article 53 in the case of the President and Article 154 in the case of the Governor, that the executive power shall be exercised by the President or the Governor directly or through the officers subordinate. The provisions contained in Article 74 in the case of the President an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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. 53. Oh the doctrine that reasonable Explanation of the accused should be accepted at initial stage Mr. Jethmalani has relied upon Hate Singh Bhagat Singh v. State of Madhya Bharat AIR 1953 SC 468 wherein the Supreme Court has taken the view that because of the presumption of innocence in favor of the accused even when he is not in a position to prove the truth of his version his Explanation should be accepted if it is reasonable and accords with probabilities unless the prosecution can prove beyond reasonable doubt that it is false. 54. It is further contended that on the premise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains 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 this proposition Mr. Jethmalani has placed reliance upon the following judgments :- (i) Hanumant Govind Nargundkar and Anr. v. State of Madhya Pradesh, 1953 CriLJ 129 wherein it was held that:- An admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him. An admission must be used either as a whole or not at all. (i) Palvinder Kaur v. The State of Punjab, 1953 CriLJ 154 wherein it was held that:- A confession must either admit in terms the offence, or at any rate substantially all the facts which constitute the offence. An admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified 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 the document can only be proved by oral evidence of the person who can depose about the transaction from his personal knowledge. In addition, there must be proof of authorship of the document. Out of nine documents, only 2 documents contain contract number. The Investigating Judge was not sure of the veracity of these two documents and had sent communication to Swiss Credit Bank and Swiss Credit Bank reply/response to this is relevant. 60. On the angle of conspiracy and law thereon, Mr. Jethmalani has in expounding analysis defended the petitioners on the following premises:- (i) Admission of wrong doing by a party is admissible against that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erance 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 now rechristened it as Kartoagen Keno Octo Mr. Alok Sen Gupta raised mainly two fold arguments. 62. The first and foremost point raised by the counsel is that where imprisonment of sentence is mandatory trial of a body corporate for any such offence has no meaning as the body corporate is an artificial and juristic person and not an actual person who can be sent to jail. In support of this proposition, reliance has been placed upon a decision of the Supreme Court in Kalpnath Rai v. State 1997 SCC 732. It was held by the Supreme Court that wherever and for whatever offence means read is an essential ingredient the company or body corporate cannot be prosecut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or company being a juristic or artificial entity cannot be imprisoned, 67. The judgment relied by learned Special Judge according to Mr. Gupta (Director of Public Prosecution v. Kent Sussex, 1944 Kings page 146) only laid down the law that if wrong information is furnished by the Director or employee of the company, the company is liable to be prosecuted. The question was whether the offences charged against the company were such which are triable against the company and the limited question was about the liability of the company for the act committed by its officers but it does not mean that the company can be prosecuted for the offence which necessarily involves the sentence of imprisonment. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 no document produced by the prosecution in which either Bofors or Martin Ardbo ever gave a commitment that they would not have any commission agent in India. The only documents in this regard produced by the prosecution is letter sent by the Joint Secretary, Ordinance, Mr. G. Sundaram, to the Ministry of defense (Sub.: 155 mm Gun negotiations.) 71. Mr. Gupta referred to Proforma seeking information on various aspects of the gun one of the columns was about the details of their agents in India. Vide letter dated 19th May, 1984, V.S. Khara informed that the undertaking has been obtained in the prescribed proforma by their agents in India. In the said performa, the Bofors gave name of W.N. Chadha, Ottavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 should not have any middlemen or commission agents for negotiating and there should be one to one talk. 75. Mr. Gupta referred to the observations of Supreme Court in Anil Kumar Chowdhury v. State of Assam and Ors., [1975] 3 SCR 878 wherein it has categorically been held that the Government speaks and acts formally and in solemn writing and not informally. Thus in the absence of any written policy of the government the prosecution cannot take the plea that the Bofors or Martin or for that purpose Hindujas have acted against that policy and thereby have cheated the Government. 76. Having summed up versions of both the sides and made the inventory as to the material against the public servants, Win Chadha, Quattr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring 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 element of 'bribe' been involved in awarding the contract, the need for involving three agents would not have arisen. Was money of bribe being divided in three parts through three different persons. The question arises as to who succeeded in getting the contract. Hindujas or Quattrochi or Chadha. In this case all the three. What an inference! CBI was right in not including the offence of taking bribe either by the public servants or Hindujas, Quattrocchi having held the monies received by them from Bofors as a trustee for public servants as it was not equipped with any material or evidence nor did it obtain sanction for this offence which is punishable under Section 161 IPC. 82. To say that public servants had also their share in the amount of commission paid by Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oot 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 price was cheaper though reduced when the stage was over, still the Expert Committee's opinion as to the preference of Bofors could not and ought not have been ignored even if it was little costlier. Security of a nation cannot be jeopardised for a few bucks here or there. Life of a soldier is more precious and cannot be bartered like this. By no stretch of imagination such a decision can be termed either as hasty decision as the material exercise took more than a year or tainted decision as element of illegal gratification is not only utterly wanting but has also not been alleged by the CBI and rightly so as not a shred of evidence has surfaced up till this day. 87. If decision making authorities be in any field are prosecuted like this, no authority, no person would take decision nor would dare to take decision. However, it does not mean that the el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 framing charges for these offences fallen into a grave erroneous concept of criminal trial by traversing beyond realm of offences committed by public servants and the petitioners. Some of the glaring instances of such conclusions and observations that are self-contradictory and self-defeating though have been alleged by Mr. Jethmalani and Mr. Sibal result of personal bias of the learned Judge of Mr. Gandhi and his style of functioning are projected in the following paras of the order:- (i) Mr. Rajiv Gandhi's statement made in the Lok Sabha on 20th April, 1987 has been extracted by the Special Judge which has not even remotest relevance but mind-boggling conclusion has been drawn there from by the learned Special Judge as to Mr. Gandhi's complicity in the conspiracy and traits of his personality and style of his functioning. 91. The relevant extracts of Mr. Gandhi's statement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 withdrawn though it had been kite-flying from one account to another. It also seems that the money was meant to be in trust for someone. (iii) Comments as to the Constitution of JPC Para 236 JPC was constituted under public pressure and that of the opposition but it was packed with people belonging or sympathetic to the ruling party. (According to Mr. Jethmalani Mr. Sibal this constitutes breach of privilege of the House and reflects the personal knowledge of the Judge about Indian politics). (iv) About political and diplomatic consideration of such decision, learned Special Judge thinks the Government should have made open proclamation about it. Para 250 Taking a political decision in deals of this kind is not quite uncommon and cannot be ruled out. Infact, the country's philosophy, its leadership and other similar factors do count in taking decisions. Such decisions can be completely political decisions or the political factor can become an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 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 each case and it is difficult to lay down a rule of universal application; By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. (4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced court cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial. 93. By no standards, aforesaid conclusions or inferences and references drawn and made by the learned Special Judge without any material or evidence fall w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over-rule that decision. However the Price Negotiating Committee had a limited role of negotiating the price acting on the premise of the report of the Army which gave its report on 17th February, 1986 to the effect that Swedish Bofors has a clear edge over the French Sofma The report was submitted by the Deputy Chief of the Army Staff which was approved finally by the Chief of the Army Staff. 98. Unless there is a corrupt motive imputed to the choice in favor of one Gun or the other even if it is costlier price wise but quality wise equally good though Bofors had an edge over Sofma because of its peculiar feature of shoot and scoot the offence under Section 161 IPC does not attract and nowhere the prosecution has leveled these allegations nor has produced any material in support of corrupt motives. Merely because the Sofma's offer of reducing the price came immediately after the letter of intent had already been issued to Bofors cannot lead to any inference that the decision in favor of the Bofors was with ulterior motives or by accepting bribe etc. 99. It is not the case of CBI that Bofors or Hindujas or Quattrocchi or Chadha had accepted the bribe money on behalf of the pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts at subsequent point of time and the commission agents having transferred part of the monies which were allegedly received as bribe in the coded accounts of public servants. If the CBI was successful in tracing the accounts of the petitioners and Quattrocchi there was no difficulty at all in tracing such accounts of the public servants as Swiss authorities had extended all possible cooperation and furnished every information with regard to the accounts of the petitioners and other persons. 104. The charge for the offence under Section 161 i.e. against the public servants for having accepted the illegal gratification other than legal remuneration in awarding the contract does not arise out of any of the material or evidence collected by the CBI nor was such a charge proposed by the CBI. This charge is result of imaginative, presumptive and conjectured conclusion by the learned Special Judge. So much so while taking the cognizance after perusing the entire charge sheet the learned Special Judge did not summon the petitioners for offence under Section 161 read with Section 165A of the IPC. It is not the case of the CBI that moneys received by the alleged agents have been pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge of criminal misconduct by way of abusing official position against the public servants as well as the petitioners in abetting the same is mainly based upon the three circumstances:-(i) undue haste in obtaining approval and issue of letter of intent by ignoring the offer of 'Sofma', (ii) asking the Swedish Prime Minister in April, 1997 not to hold any enquiry into the allegations made in the Swedish broad cast and (iii) stopping officers of M/s AB Bofors from visiting India to offer their Explanation in July, 1987. 110. Once final decision was taken that the India should go only for Bofors gun it was immaterial whether the signatures of concerned persons were obtained within 48 hours of the Negotiating committee having recommended Bofors gun though in this case announcement of the decision by Sh. Rajiv Gandhi who visited Sweden on 15th March, 1996 in connection with funeral of Swedish Prime Minister Mr. Olof Palme about awarding the contract in favor of Bofors was nothing but good will gesture. Even otherwise in commercial contracts of defense matters political and diplomatic considerations play a part, other things being equally important. France was also a supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be established against S.K. Bhatnagar as there is no allegation that he being the participant in decision making process was given bribe or he influenced the decision as the whole material is based on surmises and conjunctives and flimsy propositions of law. 114. There is no allegation against Mr. Rajiv Gandhi that he either participated in the Price Negotiating Committee or he gave any opinion on the quality of the Guns as well as price of the Guns. He only signed the file on the basis of the report of Price Negotiating Committee and against Mr. Bhatnagar there is no charge of having ascertained the quality by corrupt means. On the other hand the case of the prosecution is that though the quality of Bofors was better but its price was more than Sofma. 115. By awarding a contract to one of the contenders whose goods had an edge over the others or say Were equally good and were cheaper at the relevant time cannot be gone into for the purpose of charge of cheating qua the public servants. Period of conspiracy is from April 1985 to April, 1987. Prosecution has also relied upon this period while invoking the offence under Section 120B IPC. 116. Unless the nexus is complete between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f criminal conspiracy--When two or more persons agree to do, or cause to be done-- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy: Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof. 121. As is apparent, criminal conspiracy involves an agreement to do a legal act by illegal means or an illegal act. It can be proved either by direct or circumstantial evidence. If it is sought to be proved through circumstantial evidence it should lead to one and one inference that is commission of the offence. Here the object of conspiracy was at the most amongst the AB BOFORS and the commission agents inasmuch as AB BOFORS deceived the Government of India by fraudulent representation that no agent or middlemen would be used in the negotiations of the contract and they would reduce the price of the guns corresponding to the amount they would have otherwise paid to their commission agents. To impute such a charge to the public servants is beyond comprehension as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Quattrocchi. 124. So far as the charge of criminal conspiracy to cheat the Government qua the petitioners vis-a-vis the commission paid by Bofors to its agents is concerned it is found that Bofors had mis-represented that no agent or middlemen would be used for the negotiation of the contract and the price quoted was the reduced price corresponding to the amount, Bofors would have otherwise paid to the commission agents. The moment, the contract was awarded and the first Installment was paid by the Government to M/s AB Bofors, Bofors made the payment of commission to the commission agents, which were to the tune of Rs. 64 crores though in actuality it would have run into a hundred crores had the entire commission been paid as by that time the news broke out about the procuring of award through bribing the Indian politician and big wigs. 125. To say that the Hindujas were not at all aware about the aforesaid representation or declaration or undertaking given by M/s A.B. Bofors that they would not have any middlemen or agent for negotiation of the contract is beyond comprehension as Hindujas had been working as agents of M/s A.B. Bofors since 1979. Their defense that prior to Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in respect of petitioners/Hindujas but also Quattrocchi and Win Chadha. 130. Even M/s A.B. Bofors has indicated in writing to the Swiss Bank in respect of these payments made in respect of the contract in question. These documents have to be accepted on their face value unless forgery or fabrication appears to be writ large. On the contrary, Hindujas/petitioners have not at this stage succeeded in producing any documentary evidence or any other material to show that they had transacted any business by way of counter globe trading on behalf of M/s A.B. Bofors either from India or from any other country in respect of which the payments in question were made to them. 131. Thus, preponderence of probability or plausibility of such a defense is not available to the petitioners/Hindujas at this stage and to prove it they will have ample opportunity during their defense. Mere indication to the Bank and other authorities that they have received this towards the commission for counter globe trading without any documentary evidence in support thereof does not cut ice in the face of the documents in which particulars of the contract are mentioned against some of the payments. 132. Similarl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 IPC is thus sustainable. 136. Next question that arises for decision is 'whether M/s AB Bofors who is a juristic person can be charged for the offence that prescribes mandatory punishment of imprisonment as a juristic person cannot be sent to jail. Offences punishable under Sections 120B and 420 IPC prescribe mandatory punishment by way of imprisonment plus fine. 137. Recently the Supreme Court in the Assistant Commissioner Assessment-II Bangalore and others v. Velliappa Textiles Ltd. and Anr., Crl. A. No. 142/94 decided on 16th September, 2003 has dealt with this proposition of law by formulating the following two questions :- (1) Whether a company can be attributed with means read on the basis that those who work or are working for it have committed a crime and can be convicted in a criminal case? (2) Whether a company is liable for punishment of fine if the provision of law contemplates punishment by way of imprisonment only or a minimum period of punishment by imprisonment plus fine whether fine alone can be imposed? Supreme Court gave the answer to these questions like this:- Criminal liability of a company arises only where an offence is committed in the course of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the contract in question, which is punishable under Section 165A of IPC. 141. To sum up following conclusions emerge from the aforesaid discussion - (i) Charges for the offences punishable under Sections 120B/420 IPC and Section 5(2) read with Section 5(1)(d) of Prevention of Corruption Act 1947 and Section 165A read with Section 161 IPC against the petitioners for having entered into a criminal conspiracy with the public servants to cheat the Government of India and having abetted the public servants to commit criminal misconduct by abusing their official position and taken illegal gratification for awarding the contract are quashed. (ii) The charges that need to be framed against the petitioners P.P. Hinduja, G.P. Hinduja and S.P. Hinduja for the offences punishable under Sections 120B/420 IPC for having entered into a criminal conspiracy between April 1985 to March 1986 to cheat the Government of India by fraudulently and dishonestly representing that there were no agents involved in the negotiation for the contract and further that the price quoted was the reduced price proportionate to the amount of commission they would have otherwise paid to the agents and thereby induce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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