POLITICS & CORRUPTION

Unethical, yet not illegal

V. VENKATESAN
in New Delhi

FOR the lay reader, the Supreme Court's November 24 judgment dismissing the appeals against the Madras High Court's acquittal of Tamil Nadu Chief Minister Jayalalithaa in the TANSI cases would still not seem to be the final word on whether she is guilty. The reason is that the Bench comprising Justices S. Rajendra Babu and P. Venkatarama Reddi, which delivered the judgment 14 months after the hearing concluded, reached two decisions in the cases, which involved the sale in 1991 (when she was Chief Minister) of properties owned by Tamil Nadu Small Industries Corporation Limited (TANSI), to Jaya Publications and Sasi Enterprises, in which she was a partner. The two decisions appear to be inconsistent with each other.

The Bench examined the charge that the property was deliberately sold for a lower price with a view to conferring pecuniary advantage on Jaya Publications, thus resulting in wrongful loss to the government. It found that it could not be said beyond reasonable doubt that the property had been undersold and thus there was loss to TANSI. As one of the bidders, Jaya Publications had quoted the highest price for the land. "Market value being a variable factor, and if a price was quoted and if it was not shown that the tender was vitiated, then the price quoted by the highest bidder had to be taken as the market value," the Bench said. Jaya Publications offered Rs.3.01 lakhs a ground (2,400 square feet), and it offered to purchase the superstructure and the machinery at Rs.19.20 lakhs. The other bidders quoted less. The High Court found that the prosecution had not succeeded in establishing that the market value of the TANSI Foundry land sold to Jaya Publications was Rs.7.32 lakhs a ground. The Supreme Court upheld this finding.

The Bench also concluded that it could not be said that Jayalalithaa acted dishonestly or fraudulently because there was no wrongful gain or loss in the transaction, which was pursuant to a transparent tender process, which was not shown to be vitiated in any manner. Therefore, it ruled out the charge of criminal conspiracy against her as well.

It then examined whether she could be held guilty under Section 169 of the Indian Penal Code (IPC). The Bench concluded that the offence under Section 169 of the IPC is incomplete without the assistance of some other enactment, which imposes the legal prohibition required. That is, if the offence is to come within the ambit of this section, there should be a law that prohibits a public servant from purchasing certain property.

The Bench ruled that in this context, such a law would necessarily mean an enacted law and not an executive order, which would confer no rights on anybody or set legally enforceable obligations. "The rules and administrative instructions governing the public servants holding the civil post have indisputably no application in this case," it said. The Bench, therefore, refused to endorse the view of the appellants that the Code of Conduct for Ministers, issued in G.O.Ms.No.1350 dated July 26, 1968, by the Government of Tamil Nadu in the name of the Governor, imposing such a prohibition on Ministers from buying government-owned property, has the statutory force. A code of conduct prescribed by the government under certain notification, cannot be elevated to the level of a law, it said citing a judgment delivered by the Andhra Pradesh High Court in Vidadala Harinadhababu vs N.T.Ramarao (1990). Ironically, the Bench cited the same judgment at length to show that the code of conduct is binding on the Ministers, although not enforceable through the courts. The full Bench of the Andhra Pradesh High Court had said in that judgment: "No Minister or Chief Minister can have the temerity to act contrary to such a code." Calling it a "strong expression" by the High Court, the Supreme Court felt that the code could still not be elevated to the level of prohibition under law.

Even if the government order is traced to have been issued under the executive power of the State under Article 162, such a code will not be enforceable when the language used is not in mandatory terms, It was merely intended to be a set of guidelines or instructions to the persons in authority, the Bench reasoned.

Having ruled in Jayalalithaa's favour, the Bench, however, added a fairly elaborate caveat in the last four pages of the judgment. It said that in view of the fact that the government headed by her had to give its permission in respect of the sale of the property in question, there was a conflict of interests. "Where there is conflict of interest, law has always avoided such sales being effected in favour of those who can jeopardise the fair outcome of the transaction. Whatever may be our findings on the question of valuation of the property... we are clear in our mind that if the officers and others become aware of the fact that the Chief Minister of the State is interested in purchasing some properties, the bureaucracy will be over-enthusiastic to see that the sale goes through smoothly and at a price desired by such Chief Minister. Though we can visualise such situation, such facts have to be established by concrete evidence... "

These observations clearly show that the law prohibits such transactions where there is a conflict of interests. Yet the Bench's finding is that there is no legal prohibition on such transactions, which appears to be a clear case of inconsistency. Further, the Bench itself remarks that the Code of Conduct cannot be kept as an "ornamental relic in a museum but not to be practised". "These aspects do worry our conscience," the Bench said while indicting Jayalalithaa, who it claimed, in her anxiety to save her skin went to any length even to deny her signature on the sale documents which her auditor and other government officials identified. Yet the Bench rejected the appellants' argument that the Code of Conduct has the legal backing, merely on technical grounds.

Ironically, the Bench, having absolved Jayalalithaa on technical grounds, appeared to plead its helplessness by suggesting that she had taken escape routes by resorting to technical pleas rather than follow the Code of Conduct. "Persons in public life are expected to maintain very high standards of probity and, particularly, when there is likely to be even least bit of conflict of interest between the office one holds and the acts to be done by such person, ought to desist himself from indulging in the same," the judement observed. The Bench concluded that Jayalalithaa must atone for the offences she was charged with by answering her conscience in the light of what it observed and return the property to TANSI unconditionally. Jayalalithaa, during the pendency of the case in the Supreme Court, surrendered the property to TANSI without insisting on the return of the price paid by her firm, probably in anticipation of the ethical strictures from the Bench. But the question whether it is lawful for an ordinary citizen charged with a criminal offence to undo the same, in order to evade punishment, with introspection and an attempt to compensate a perceived loss to the exchequer, lingers.

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