Director Jailed for Tax Evasion

Dear Shri gupta,
I am responding to the twofold articles on CBI by Justice Varma and Fali S Nariman published in your esteemed paper on 11th and 16th April and your interviewing Justice Varma on the TV programme Walk the Talk on the same subject on 2nd may 2009.
I had piloted the investigations in Jain Hawala case and was shifted as lots of evidence had started flowing against the big. The article is self evident and self contained.
May I request you kindly to publish it in your esteemed paper as this will give the Acomplete perspective to the issues raised.

With regards.

BR Lall Sh Shekhar Gupta,
Editor-in-Chief
CBI Needs be Liberated from the Executive

Two articles on CBI have appeared in these columns by two prominent personalities; the first titled “Incredible CBI”on 11th April is by Justice J.S. Varma, the retired Chief Justice of India who presided over the bench hearing the famous Jain Hawala case of mid 90’s and the second titled “Bureau of Nods and Winks “of 16 April is by Fali S. Nariman, the eminent jurist. Both of them have regretted that CBI falls a prey to pressures from party in power and is not able to act straight on merits when faced with people at high places. Justice Varma points out that there is“….reluctance and failure of CBI to investigate allegations of corruption against the powerful ….that in sensitive matters, the outcome of CBI investigations invariably depends on the political equation of the accused with the ruling power.”He further says in context of Jain Hawala case “There was a miserable failure in its statutory duty to investigate impartially into the charges in spite of full autonomy it had been given for the purpose … insulating it from political influence.”
In the judgment of Hawala case in December 1997 the judge brought to the fore the helplessness of the CBI and tried to redress it. Incidentally I had led the investigations into Jain Hawala case for 15 months, but was shifted when I insisted on bringing the damning evidence on record and taking action against the high-ups. In desperation, I had written an article titled “How to Make CBI a Free Agency”in the Hindustan Times of March 1st 1996, depicting what Justice Varma said almost two years later.I brought out out clearly that:

*the government treated the CBI as “a slave/servant of those in power….and as such it cannot question the actions of the masters or disobey their orders”;

*“That the CBI officers `do real good work, otherwise, but when it comes to exposing a person in high office, they shake and tremble….and keep weighing the political fallout and consequences.”

*“…………..that organism (CBI) suffers paralysis ………. And a paralyzed body cannot function properly”;

Justice Varma says that he insulated the CBI in Hawala case by his ruling to deal directly with the Apex court and not to send any report in that case to the government. Mr. Nariman has rightly observed in his article that it is not necessary that everything be brought on file .The order can be conveyed “…also on the Nods and Winks of the minister in –charge or the senior bureaucrat in the ministry in-charge”. Justice Varma has not been able to appreciate the ground conditions in which the CBI functions. His article gives an impression that there is no will, commitment or integrity on the part of CBI officers who remain where they were, despite being insulated in the above manner in the Hawala case and by a statutory institution like CVC, created later by his judgment.
It is interesting to know that despite involvement of the apex court I was shifted from the investigations of Hawala case .In my utter helplessness, taking great personal risk, I had published the article referred to above, recommending functional independence for CBI, placing it under a Board constituted independently and automatically and that all the powers vested in government should vest in the Board. The process was proposed to be automatic in the sense that the Board members should be thrown up by the system and not nominated by the government. Hawala case had come for hearing on 1st of March, 1996 itself. I had been removed from the case by then, but I was told that my article was presented before the bench. I had expected that the bench will liberate the CBI from the executive / political control but I was disappointed by the judgment in Vineet Narain case as it achieved nothing and the CBI continues as earlier despite the best intentions of the Hon`ble Court. The two excerpts from the judgment will illustrate the contradiction between intention and the actual:
“No doubt, the overall control of the agencies and responsibility of their functioning has to be in the executive, but then a scheme giving a needed insulation from extraneous influence even of the controlling executive, is imperative”.

“Government shall remain answerable for functioning of the CBI”.
This shows that the full control of the government remained unchanged.

To understand and appreciate the working of CBI in proper perspective, one has to analyse and identify where the levers that manipulate it, lie.In our system the control over services is exercised through the processes of selection, posting, punishment, reward and the entries in the Annual confidential Reports.

If we analyse the Vineet Narain judgment and the consequent instructions of the government, the selection of Director CBI itself is in the hands of the executive. Ultimately his appointment is approved by the Appointments Committee of the Cabinet as for any other post for the executive, and so is his removal, notwithstanding the two year tenure. The Director has no formal say in selection of Special Director, Additional Director , Joint Director or even an SP. There is a committee headed by CVC to recommend suitable officers to the government, but majority of its members are from the executive only. The Director who is responsible to take work and who has also to vouchsafe for them is not even a member of the committee. Above all, the ACRs of all the functionaries except the SP are reviewed and accepted by the executive i.e. Secretary and the Minister. Either of them can record an adverse entry jeopardizing his career, so they have to be kept in good humour by the CBI personnel. Further, if CBI functioning is said to be independent i.e. beyond the control of the government and that government knows nothing about the CBI investigations, how come they can assess the work of the officers and record remarks in their ACRs.
Where is then the CBI autonomy, where is the insulation that the article of justice Varma refers to again and again. Asking the CBI, ostensibly not to route a particular case through the government, ignoring the greater effect of “Nods and Winks” as Nariman says, does not amount to insulation .Under any circumstance, insulation in a single case is of no meaning or consequence.

Nariman rightly says that there is need to make CBI independent, but at the same time doubly accountable by enacting a law. We can follow anyone of the models that are being followed in different countries like Hong Kong, Australia, U.K. and U.S.A. All are working successfully as the common denominator in all of them is that their respective agencies have been liberated from the executive/ political control. Investigation is a quasi –judicial process and any interference by anyone will vitiate the same and ultimately the courts will be groping in the dark as the true facts will get scuttled and will never come before them as happened in the Jain Hawala case, in Jagdish Tytler case as referred to by Nariman and a horde of other cases where the high and mighty were involved. Finding no relief from anywhere I recorded all these in my book “Who Owns CBI: The Naked Truth”.

The Judgment in Vineet Narain case has not achieved anything on the ground as the CBI remains where it was . Addition of an Advisor in CVC has not made any difference because he is not designed to take any fundamental decisions and is a toothless tiger making recommendations that are not entertained by the government. When on 20th December, 2000 I met Mr. Vital, the then CVC and represented why action had not been taken on my complaint against a high dignitary, though it was my fifth interview with him. He expressed his helplessness and started shouting “What can I do ………government does not listen……CBI does not care……”. Is this the institution expected to protect the CBI from the flood and fury of great pressures that it is subjected to.
No doubt the judgment falls short of the requirements and has failed to lay down any worthwhile guidelines, but still, it is a landmark one and is very important as it has sensitized the society, shown the direction and opened the route of Continuing Mandamus as Justice Varma puts it.

Basically the CBI set up requires serious surgical changes guarding it from interference of the government in power. It should be placed under a muti-member constitutional authority or directly under the President, or under the Parliament or under a carefully constituted Joint Parliamentary Committee. Such models do exist in the well meaning countries .Till such time this happens in India as well ,even if CBI is absolutely fair in some case or there is no interference from the powers ,still no one will believe as the CBI functions in such a setting that it will always continue to be suspect and vulnerable .

Post Retirement Employment

On 2nd May Justice Varma appeared on a popular TV channel and recounted post retirement employment as an additional factor that affects the judgment of the CBI officers and its director in particular. I had also examined this issue in my article of 1st March, 1996 and had concluded that not only the Director CBI, but all the Board members and the Chairman should be debarred from taking any employment, business, job with government or in private after their tenure with the CBI. Post retirement employment constitutes a very great attraction to which very few civil servants can stand. In judiciary and IAS post retirement bonanza in form of direct Employment or membership /Chairmanship of Commissions and Tribunals is inbuilt and frequent, rather general. Other services also do get fringe benefits depending on the nearness of the individual to powers. In absence of any systems, Post retirement employment is pure discretion and patronage. It may be a reward for some favours doled out during service or there may be some expectations for future. This requires to be regulated for all the services including Judiciary. The process should start with judiciary , followed by IAS and others. I would suggest that a roll should be prepared, for those considered desirable and anxious to take up such jobs, by an independent committee 50% of whose members should be from fields other than that very service. There should be no politicians or in- service person on any such committee. All the post retirement appointments should be given serially from this roll, so that the judge is not obliged to anyone for being appointed. Had this been followed, the controversy over Godhra and post Godhra affairs in Gujarat would not have arisen. Exactly the similar should be the treatment for all other services so that post retirement jobs cease to be favours or patronage of any type that has to be reciprocated either in advance or in post retirement service period.

In this respect no service is better than other. I was aghast when in 1995 the case of corruption of Oil Selection Boards came before me in CBI. The Boards were responsible for allotting petrol pumps, gas agencies etc. The informal enquiries had revealed a river of corruption flowing beneath their working. Prima-facie, there was evidence against more than a dozen such boards, but the registration of just a preliminary enquiry even was not allowed as all these were against the Hon`ble high court judges (retired), so the matter rested there. This is what happens when post retirement benefits are doled as favours. The informal enquiries had also revealed that some of the judges had even paid money for getting the job. This is the havoc that the lack of systems or the loose system or the system loaded with patronage and favours can cause.
Post retirement jobs is a big scandal and needs to be stopped or at least regulated immediately, but in any case all the enforcement agencies and the judiciary need be insulated from this menace immediately.