ANOTHER BJP FIASCO

The Supreme Court forces the BJP-led Government to revoke its transfer of M.K. Bezboruah, Director of the Enforcement Directorate, and administers it a rap on the knuckles for misrepresenting facts in an affidavit.

SUDHA MAHALINGAM
in New Delhi

PLAGUED by persistent worries about its survival, the Bharatiya Janata Party-led coalition Government at the Centre has resorted often enough to actions that have raised public outcries and forced it on the defensive. Within weeks of its installation, the A.B. Vajpayee Government rushed into signing an agreement with the Suzuki Motor Corporation, in which it conceded practically every demand made by its Japanese partner in Maruti Udyog Limited, the car-maker, apparently in return for nothing. The treatment meted out to the Tatas forced the premier industrial house of India to withdraw its proposal to set up a private airline, after three years of agonising wait.

M. LAKSHMANAN
M.K. Bezboruah resumes charge on September 10 as Director, Enforcement Directorate, after his reinstatement.

However, nowhere was the Government's haste and maladroitness more evident than in its bid to transfer M.K. Bezboruah, the upright Director of the Enforcement Directorate (E.D.), whose resolute and independent pursuit of powerful persons allegedly guilty of economic offences had caused discomfort to persons in power and those close to them. In the process, the BJP earned the dubious distinction of heading the first Government at the Centre to be severely rebuked by the Supreme Court in the very first semester of its existence. The Government not only had to swallow the humiliation of having to roll back the transfer order and restore Bezboruah to his position, but also had to launch an inquiry to apportion blame for the goof-up involved.

RAJEEV BHATT
The Supreme Court of India. A three-member Bench found that the Government had misled the court in the counter-affidavit explaining Bezboruah's transfer.

The top jobs in the Central Bureau of Investigation (CBI) and the E.D. have always been hot seats unless of course the incumbents played along with the powers that be. Transfers have been one of the most potent weapons in the hands of the Government to make "errant" bureaucrats fall in line. An acknowledged executive prerogative, transfers have been frequently used when things have threatened to go out of control, but this is perhaps the first time in the recent history of the country that the transfer of a bureaucrat evoked such a strong response from the Supreme Court and the media.

ROY CHOUDHURY
Prime Minister A.B. Vajpayee. The BJP-led Government's decision to transfer Bezboruah from the E.D. came in for sharp criticism from the Supreme Court.

The response should be seen in the backdrop of the Supreme Court's concern about the growing nexus between criminals, politicians and bureaucrats, and the resultant interference by influential persons in the functioning of investigative agencies that probe serious infractions of the law. It is rightly seen as a message from the judiciary indicating that it will not brook any meddling with honest, upright and committed investigators handling sensitive cases.

Yet, within days of the apex court's rebuke, Brajesh Mishra, Principal Secretary to the Prime Minister, made a gratuitous statement to a private television channel. He said that M.K. Bezboruah's reinstatement as chief of the E.D. was only temporary - until such time as the Government appointed a new chief through the selection procedure laid down by the law. However, it is pointed out that with Indian Administrative Service officers of the 1968 batch, to which Bezboruah belongs, having become due for promotion as Additional Secretaries, he too may find himself eligible for promotion to the new grade.

V. SUDERSHAN
Bhure Lal, who was the E.D. chief during V.P. Singh's tenure as Finance Minister in Rajiv Gandhi's Government, was transferred when the Government found some of his actions to be inconvenient.

THE E.D., usually a low-profile organisation, shot into prominence during V.P. Singh's stint as Finance Minister in the Rajiv Gandhi Government. Bhure Lal, who was the E.D. chief at that time, was investigating many politically sensitive cases. A tough and independent-minded investigator, Bhure Lal was abruptly transferred out of the E.D. when the Government found some of his actions to be inconvenient. Bhure Lal's transfer orders were served at his residence around 10.30 p.m. on March 11, 1987, even as the budget session of Parliament was in progress. He was escorted to his new office the next morning to prevent him from going to the E.D.'s Loknayak Bhawan headquarters to hand over charge. It is a matter of record that several important files relating to sensitive cases that disappeared mysteriously from the E.D. headquarters and from the Delhi zone of the E.D. soon after are yet to be traced.

SHANKER CHAKRAVARTY
Ashok Jain.

ATTEMPTS to transfer Bezboruah, who assumed charge in November 1995, began in the first quarter of 1997. This was also the time when the E.D. came under the scrutiny of the media, thanks to the raid it carried out on the residence of media baron Ashok Jain on January 4 for alleged violations of the Foreign Exchange Regulation Act (FERA). Jain was to have been taken into custody by the E.D. the same evening. He was, however, allowed to go abroad following the intervention of N.K. Singh, the then Revenue Secretary, reportedly at the behest of Prime Minister H.D. Deve Gowda. Bezboruah declined to carry out the verbal instructions issued by N.K. Singh, his superior in the Revenue Department, and insisted on written orders. Ever since there have been several attempts to transfer him, which, however, did not succeed for one reason or another.

SHANKER CHAKRAVARTY
Chandraswami.

Subsequently, in June 1997, Finance Minister P. Chidambaram was found to be personally monitoring FERA investigations against Ashok Jain. When Frontline published a Finance Ministry communication to the Director, Enforcement (Frontline, June 13, 1997), raising questions about the propriety of the Finance Minister's "personal interest" in individual FERA investigations, the E.D. was put under the surveillance of the Intelligence Bureau (I.B.) in order to find out how the note leaked to the press. Although attempts to get the E.D. chief out were renewed once again, persistent vigilance by the press scuttled them.

RAJEEV BHATT
AIADMK leader Jayalalitha.

Meanwhile, the E.D. carried on relentlessly, investigating, and at times arresting and detaining, high-profile persons, including All India Anna Dravida Munnetra Kazhagam leader Jayalalitha's associates, former Union Ministers S. Krishna Kumar, Sukh Ram and Buta Singh, former Prime Minister P.V. Narasimha Rao's son P.V. Prabhakar Rao, and top executives of ITC and Shaw Wallace.

Even as the E.D.'s reach began to extend to influential individuals and prominent business houses, attempts were made to portray FERA as a piece of legislation with no relevance in the current context of liberalisation. Cases that are being investigated by the E.D. are portrayed as relating to infringement of this irrelevant law. However, what has been lost sight of is the fact that as of now FERA is the only law that deals with money-laundering offences of a serious nature. Often, it is money generated from criminal activities committed within the country that is sought to be sent abroad through invoice manipulation. Similarly, money generated through kickbacks from corrupt deals and credited into the overseas accounts of the beneficiaries finds its way back to the country by way of invoice manipulation of fake export transactions. It is transactions of this nature that are being probed by the E.D.

S. MAHINSHA
Former Finance Minister P. Chidambaram.

Pressure began to mount to clip the E.D.'s wings. Bezboruah's firmness in carrying out his duties and his refusal to take a lenient view of foreign exchange violations have naturally not endeared him to the powers that be. A Cabinet Minister at the Centre who came under the scrutiny of FERA officials recently is said to have played an important role in Bezboruah's transfer. However, he alone may not have succeeded in this: the E.D.'s devotion to duty under Bezboruah had become inconvenient to a wide spectrum of persons wielding influence in the centres of power. The controversial godman Chandra-swami, against whom the E.D. has registered 15 cases of FERA violations, is said to be one such. Investigations against Chandraswami were leading the E.D. on to certain trails, which, if pursued, would have exposed the nexus between him and politicians and bureaucrats. In fact, this was even brought to the notice of the nodal agency that was set up under the direction of the Supreme Court to probe such a nexus.

The discomfiture resulting from the E.D.'s pursuit of cases against the close associates of Jayalalitha, one of the BJP's southern coalition partners, is well-documented, although she herself had no role to play in Bezboruah's transfer. An angry Jayalalitha, who was sought to be blamed for the transfer, hit back, accusing a media baron who was under FERA scrutiny of bribing politicians to transfer Bezboruah. The removal of R.K. Kumar, the E.D.'s counsel arguing cases against Jayalalitha's associates, soon after Bezboruah's transfer raised a few eyebrows and the issue was brought up in the Supreme Court by Anil Diwan, the amicus curiae (friend of the court). However, Additional Solicitor-General C.S. Vaidyanathan told the court that Bezboruah's objections to Kumar's removal had been overruled by the Law Ministry before he was transferred from the E.D. on August 13.

RAJEEV BHATT
Ram Jethmalani, Minister for Urban Affairs.

The first signs of desperation to move Bezboruah from the E.D. became evident when the BJP-led Govern-ment upgraded the post of the E.D. chief to that of Special Secretary, two ranks above that of the incumbent Director, in July this year. While this was certainly in keeping with the Supreme Court's directions in the Jain hawala case, the sequencing of the initiative made the move suspect. After all, the Government had done precious little towards implementing the other directives. The move to implement the rest of the directives came only when S.V. Giri, the then Central Vigilance Commissioner, refused to appoint a new chief for the E.D., forcing the Government to set up a Central Vigilance Commission.

THE CVC, set up through a hastily enacted Ordinance, became the centre of a controversy thanks to the glaring lacunae in the statute. Interestingly, the CVC Ordinance, which deviates from the Supreme Court's directions, was issued despite objections from two of the four Ministers who vetted the draft that formed its basis. It has now been challenged in the Supreme Court by the Centre for Public Interest Litigation.

V. SUDERSHAN
The Central Bureau of Investigation's headquarters in New Delhi.

The petitioner has prayed for restraining the Secretary, Personnel, from acting as an ex-officio member of the CVC on the ground that it will perpetuate the control of the political executive and the bureaucracy over the CBI and is violative of Articles 14 and 21 of the Constitution. The petitioner has also prayed for enlarging the choice of Vigilance Commissioners to include persons other than bureaucrats.

The petitioner has further argued that restricting the choice of the Vigilance Commissioner to bureaucrats will erode the independence of the CVC and endanger the life and liberty of citizens. The petition also prays for the removal of the clause that seeks to reintroduce the "single directive" that was struck down by the Supreme Court. (The "single directive" can be used by the bureaucracy to block investigations against its members. It stipulates that any investigation against officials of and above the rank of Joint Secretary to the Government of India and of general managers and above of nationalised banks, and equivalent ranks in public sector undertakings can be taken up by the CBI only after clearance by the CVC.)

This petition is expected to be heard on September 22, along with the amicus curiae's submissions relating to the CVC.

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