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HAWALA Political Dilemma and The Legal Dimension PDF Print E-mail


S. Gurumurthy, Chartered Accountant and Joint Convenor, Swadeshi Jagran Manch

Question And Answers

Points on Facts and Law


“..... I shall not do this dirty deed for you."

Another Attorney General came in, not knowing why the first had gone out, and yet when he was politely told to do the dirty Job, he too tended his resignation. So, two Attorney Generals went out.

Ultimately the dirty deed was done by an Assistant Attorney General who however, suffered later because of that black mark in his judicial career. I don't want to go into it. But ultimately the dirty Job was done by a gentleman by the name of Mr. Pauly, an Assistant Attorney General.

When the people of Washington heard that the President of the United States was trying to interfere with the Judicial process, was trying to interfere with an investigation, they took matters in their own hands. Citizens like you and me sat in their car, drove past the White House, honked their horn and shouted:

"Nixon resign"! Within twenty-four hours fifty thousand cars went past the White House; within twenty-four hours Archibald Cox had to be recalled to the post of Public Prosecutor.

The man did a relentless, thorough job. Most of the chaps went to Jail. And President Nixon would have gone to jail at the hands of the Public Prosecutor had he not, in the meantime, resigned office and had he not bargained with Ford to give him an Executive Pardon. And this was the first act that President Ford did when he took office. Otherwise, Nixon would have landed in jail. Nixon did not land in jail but he suffered political banishment from the political scene of the United States for the rest of his life. This was accomplished not by the entire population of the United States, but this was accomplished by the people of Washington sitting in the Capital City.

Ladies and gentlemen, I consider Madras as almost at a spiritual level, the intellectual Capital of India. But this great honour calls for its own responsibilities. And those responsibilities are the responsibilities which the people of Washington discharged in that extremely critical situation. It was for the first time in the history of the United States that the President was trying to scorch an investigation into crime. What happened in this country? What are the facts of the Hawala case? The Hawala case is as old as at least nineteen hundred and eighty eight.

The Hawala case is the story of how some sixty five or seventy crores were distributed by a single business house to a large number of politicians spread out between 1988 to 1991.

Ladies and gentlemen you should be asking the question, you should be asking the question yourselves, a question which a little child asked his father. A father took his child to a holy tree. And he told his little child: "You see on every branch of the tree there are small pieces of cloth rags tied on every branch. And almost you could see a million rags tied to the branches of the tree." And the father went on to tell the little boy ''Son, anybody who comes to this tree and makes a wish, the wish is granted. And when the wish is granted, the grateful chap comes back here and ties one of those rags upon one of the branches of the tree and see how millions have been satisfied." The little boy in his innocence, not to be taken in by this kind of magic business and the holiness of the tree and its power to confer boons on others, asked a very innocent question - "But Father, where are the rags of those whose wishes were not fulfilled?

Ask yourself a question - "Where are the diaries of the other 'Jains' of this country?"

This country abounds with 'Jains’. There must be thousands and thousands of Jains in this country, who must be maintaining similar diaries. The only difference is that the Jain diary has been caught but others have not been caught. In the Jain diary you find the names of a hundred and fifty politicians. Ask and try and imagine - exercise your lively imagination • how many politicians could perhaps exist in the undisclosed, uncaught diaries, which have not been perused by anybody.

Ladies and gentlemen, the Hawala business, the Hawala diary that you are talking about, is only, is only, the tip of a mighty iceberg. There are thousands and thousands, I assure you, of such diaries. And there are thousands and thousands of politicians in this country apart from the hundred and fifty that you find in the Jain diary.

Corruption is a kind of cancer; it's a kind of diabetes - whatever be the disease for which you have a preference but the typical feature of these two diseases is that they start in one organ and ultimately they spread to every other organ of the body and you even become blind, and, ultimately, life is snuffed out of the human frame. We have reached that state in which the human body is said to be critically ill. We have reached the typical phase in the develop­ment of the disease of cancer, if you please. Ladies and gentlemen, kindly imagine what is happening, and what could be happening as a result of this great cancer, which, as I said, is not merely that some Minister or some Member of Parliament gave a contract or, probably decided to ask a couple of inconvenient questions in Parliament, or may be that he did some kind of a favour; may be he put in a word with another Minister, and so on and so forth. Please imagine the horrendous consequences. Just apply your mind to one more incident.

A plane takes off from Karachi. This poor country - the unfortunate tax-payer in this country - is paying crores and crores and crores for the safeguarding of our frontiers. We have an Air Force; we have a Border Security Force; we have other armed personnel; we have radars throughout the country, on which we spend crores; we have an Airport Authority everywhere; we have the Airport Security Police. A plane, loaded with two thousand five hundred AK-56 and other deadly guns and twenty-five thousand rounds of deadly ammunition, enters our air-space unnoticed. Why, how did it happen that the plane could enter our air-space unnoticed? Unnoticed by all the machinery that we have created for the defence of India'. Why don't you suspect that these people were bribed? Why is it not possible that a huge system of bribery is operating, so far as our Defence Forces are concerned, so far as our Defence mechanisms are concerned?

This plane lands at Varanasi. It is off course. All our Defence systems are totally inadequate to spot an intruder into our air-space. The plane takes off; drops this mighty cache of arms which would never have been discovered but for another accident; fortunate from our point of view, but, unfortunate from the point of view of those who are observing it. An Adivasi family living in that area - a child in that family had been knocked down by a speeding jeep. The family was sitting out in the open and mourning the loss of their child. While they were thus sitting along with their other friends and compatriots, they noticed the arms dropping from the skies. They gave intimation to the Bengal Police. They arrived on the scene and at least some part of the cache of arms has been recovered. And they are deadly arms, which, if put to use, would be able to perhaps, at least, at least to arm two mighty brigades of the Indian army. (Reference to the Purulia arms drop case).

Ladies and gentlemen, this plane, after having accomp­lished this task, proceeds to Bhutan and Thailand. But by the time they have successfully accomplished the mission. Having successfully accomplished the mission, they will not venture forth into the danger area. But they decide to come back. Has anybody, as any Journalist done an editorial, ever asked the question, 'Why did it happen that this plane, after having accomplished this mission, decide to cross back into Indian territory? They knew that they will not be caught, How did they know that they would not be caught. They knew that they will not be caught because at every, every, every step in our System of Defence everybody has been completely paralysed by bribery and corruption.

They come back to Calcutta. From Calcutta the major operators disappear and melt into the crowd and have not yet been caught. Am I not entitled to suspect that they are not being caught because nobody is interested in 'being caught’ because everybody has been bribed.

They again go to Madras where they refuel. Another part of the crew - the criminal crew - disappears from Madras. Then the plane finally lands at a third port -in Bombay. Why? With what audacity? Why had they developed so much contempt for our defenses? They knew that there are no defenses because the defenses had been paralysed.

Today the claim made by the Government is that 'We' stopped this plane, 'We' forced the plane down in Bombay. If the plane was indeed forced down in Bombay, how did it happen that …. (not clear) They say that he pretended he was offering to pay some charges - airport charges. If he told you "I am going to pay charges", then he was not being forced down, because people who are forced down to land in Bombay don't go and pay airport charges.

The trouble, ladies and gentlemen, is that we in this country who are the voters, we who are the real political sovereigns of this country, we are treated as infants, if not as lunatics.

They think that these corrupt chaps - I don't wish to use the word which that old man used here about another old man. - But these people believe that we are so infantile that we will never see through their game. They have only to utter a few lines, the Press will publish those lines and the people will be lulled to sleep.

But, ladies and gentlemen, this total lack of defense of this country - this total apathy, I mean -it reminds me of a little story that I heard when I was a child. The owner of a horse used to keep the horse in a stable where he had appointed a watchman. The horse was stolen; obviously under circumstances in which the watchman could have stopped it. So, when the owner asked the watchman; he said: "But, son, tell me why you did not run after the thief to prevent the theft of the horse?" "Oh" he said, "Sir, the thief had forgotten the saddle and I Knew that he's going to come back. I'll catch him after he comes back”. In fact all these people are like that chap - who decided that that plane is going to come back to India and we will catch it on its return flight.

Please ask yourself, therefore, this great question -"Why is this possible in this country?" One of the possible and most probable answers you will give to yourself is that the corruption has spread out from where it started into other fields as well.

Ask yourself one more question. Were we not told, throughout the Freedom movement, that it is the Britisher who is committing the theft of our property; that we are impoverished because we are ruled by a colonial power - a rapacious colonial power, which is exploiting us and stealing the poor man's wealth? The thief has gone; the colonial power has disappeared. After fifty years, why don't you ask yourself what has happened in this country, what has been accomplished?

Ladies and gentlemen, I don’t wish to go into the economics; economics is not my forte ; probably it is Gurumurthy’s. But the sordid fact remains - a sordid fact which is a humiliating fact - which should make us hang our head down in shame - that at the close of the century in this country you will have five hundred million people literally roaming about in this country with hunger, with an empty stomach searching for food in the dumps of rubbish which started from Five Star hotels and from the rich man's mansions; like pigs and swine, like dogs our human beings in this country will be searching for food - and five hun­dred million of them.

At the close of the century, you will have a second distinction in the country. The second distinction will be that this country will be housing the majority of the world's illiterates. India on one side and the rest of the countries of the world on the other - we will have more than fifty percent of the illiterates of the world living within the unfortunate borders of this unfortunate country.

You will have a third distinction as well. The third distinction will be that, compared to every other country in the world you'll have the highest number of AIDS patients in this country at the close of the century. These are not RSS statistics; these are not Opposition statistics; these are World Health Organisa­tion statistics and these are confirmed by findings of Government.

Ladies and gentlemen, even today more than fifty percent (of the) people are living below the poverty line. Why don’t you ask yourself this question - "What happened? What happened to the dream of Gandhiji, when he told us that if the Britisher goes this country will become prosperous? This country has not become prosperous. I often summon the spirit of Mahatma Gandhi. I pray to him and summon his spirit and ask him this question - "Please tell me, Gandhiji, what happened to the promise that you had made us?" The answer I get is “Yes, the Britisher has gone but he has left his progeny in this country, and that progeny is doing exactly what the Britisher used to do."

Ladies and gentlemen, take the illustration of a small little country called Japan. It's smaller than one of the provinces of India. It was ruined by a war. In the World War it was devastated by a nuclear bomb. And it had lost the war and war brings its own wreckage and destruc­tion. We in India were ahead of Japan in economic terms; considerably ahead of Japan. But today? Today we go with the begging bowl and take and borrow money, capital technology from Japan, a country which was devastated by war and which was greatly behind us in economic terms. Why has it happened?

Ladies and gentlemen, Japan had a Prime Minister the counterpart of Narasimha Rao. His name was Mr. Tanaka. Tanaka took a million Yen commission in the notorious Lockley deal of purchase of airplanes. This scandal was dis­covered. It was discovered not by a foreign tele­vision company or by a radio company or a foreign journalist; it was discovered by a local police officer. The local police investigated that offence. Tanaka was charge sheeted before the Sessions Court of Tokyo. A humble Sessions Judge of Tokyo convicted the ex Prime Minister, found him guilty, sentenced him to five years and Mr, Tanaka's appeal was dismissed by the High Court of Tokyo and the Supreme Court of Japan.

A country which has the courage to send a corrupt Prime Minister to jail becomes our creditor and becomes an economic giant. But a country where the law has limped not only in the presence of the Prime Minister but in the presence of every cabinet minister who is not qualified on merit to become a managing clerk in a respectable solicitor's office in Delhi or in Bombay. The laws have limped when they came face to-face with these people and no wonder then that Japan is an economic miracle and we are an economic disaster.

South Korea - you read the newspaper today; what is happening in South Korea? Two of its ex-Presidents are undergoing trial for corruption and bribery, South Korea is an economic miracle, an economic giant.

Singapore, which is a dot on the world map which you will discover on the world map with a microscope - they are our creditors; we go to them for money.

The Prime Minister of Japan caught a Minister in his Cabinet who had accepted one small free ticket; a free air ticket from Singapore to Tokyo and Tokyo to Singapore back - got him dismissed from his Cabinet, got him charge sheeted before the Courts and the man was sentenced to three years’ rigorous imprison­ment for a bribe which can't be more than ten thousand rupees. Singapore is our creditor; we are its debtors.

So, ladies and gentlemen. About why this Hawala is horrendous in itself. Please understand the other ramifications of the Hawala business. This disease of corruption has completely paralysed not only our moral muscle but every kind of muscle - political muscle, social muscle; everything today is in a state of paralysis.

And I have come to you to speak about the Hawala; I have come to ask of you to please do what the people of Washington did; and how they brought the mighty President of the United States to his knees and made that fellow grind his nose in the dust.

So, ladies and gentlemen, first of all, as I told you the Hawala Kaand starts from '88 continues until 1991. Very few people keep diaries of the crimes which they commit. The Jains did. The diaries were in the possession of the police by the first week of May 1991. Anyone, anyone who reads the diaries - and it is not that there are not any officers in the CBI at all. There are. There was an honest officer in the CBI who scrutinised these documents and recorded a report. He recorded a report that this document is dynamite; that this document shows that monies have been paid by way of bribes to a large number of people, including two ex-Presidents, two ex-Prime Ministers, several Ministers of successive Governments in India, and a large number of highly placed bureaucrats.

Ladies and gentlemen, do you believe do you believe that this kind of dynamite was not brought to the notice of the Prime Minister of the country?

The CBI is directly under the Prime Minister. It seems to be a well established tradition in this country that a corrupt Prime Minister must keep the investigating agencies under his control, so that he at least acquires some kind of immunity. The first thing that you do when you become the Prime Minister is to wait till the Director of the CBI - if he is due to retire in a few days you wait for him (to retire). But during those few days, you do not commit an offence yourself. Either he doesn't retire, If he doesn't retire, send him out. Try and give him some kind of minor promotion; send him -make him head of the Border Security Force; send him to some Intelligence Wing where the man does nothing else but read the newspapers from morning to evening. That's what they did to an honest Director of the CBI, Mr, N.K. Singh who was investigating Chandraswami. He called Chandraswami to the office. There was a telephone call from Mr. Chandrashekar - "Why do you want to call Swami to the CBI Office?" The Officer straightaway said: "Where do you think I should call him? Where? In a Five Star hotel?" "So. But you go to his ashram." The gentleman said "Sir, I don't go to the accused's ashram; I want him in my office."

Instead of asking Chandraswami to go to the Office of the CBI the corrupt Prime Minister - and Mr. Chandrashekar is another corrupt Prime Minister in this country, and I hope the people of this country will know how to deal with him - that man removed that honest Officer from office. And Chandrasekhar went around telling the country that these are cases that should be investigated by a Sub-Inspector of Police. In fact he said that Bofors should be investigated by a Sub-Inspector of Police.

Why is it that people of this country don't protest? Why is it that these people still pass off as respectable members of society? Why is it that they are all at least treated with respect and honour? Why is it that in society they can't be treated as utter outcasts? These are the real outcasts of our society who should be dealt with as outcasts.

So, ladies and gentlemen, the Prime Minister slept over these documents. I am not sure that he could be getting sleep but he slept over the documents alright for a period of two years - from ’91 to ‘93.

Now I want to tell you what happened in the interval and when there were elections. And Kalpanath Rai was re-elected! He got a ticket; he was re-elected. If these documents had been carefully scrutinised - were scrutinised at least by one honest Officer and if the Prime Minister and his Government decided to take action on these diaries - which ought to have been taken - at least Kalpanath Rai would have been denied a ticket. His term as a Member of Parliament expired; he would not have got a ticket again, He got a ticket again and became a Minister again. And the CBI charge sheet now shows that he was enriching himself by bribery and corruption. They found his assets -his disproportionate assets are colossal. But at least that portion of his ill-gotten wealth which he acquired after June 1991 would not have been acquired by Mr. Kalpanath Rai if that investigation had proceeded on the right lines. I want you to understand the legal implications of the Prime Minister's action. Action in law includes inaction. If it is your duty to act and you don't act, the omission itself is an illegal act. By refusing to act, Mr.Narasimha Rao practically issued a permit or a message to all the Cabinet Ministers that - "Please go on practicing corruption, nothing will happen (to you)."

So for at least two and a half years the corruption that went on in the country was directly with the permission, permit and the license granted by the Prime Minister of India. Why don't you call him? Why don't you call him to account? Why don't you call him to book?

Let us give the man the benefit of doubt. I give the benefit of doubt. By training I am a criminal lawyer; I give the benefit of doubt to everybody.

But ladies and gentlemen, in 1993, somewhere in July, some honest police officer, whose conscience would not permit him to sleep over these documents, brought the documents to my office. I read the documents. My God this is dynamite'. And it has been recorded by another honest Officer.

Ladies and gentlemen, on the twenty-fourth of August after making a full scrutiny of the documents making all corroborative research I wrote a letter to the Prime Minister of the country. And it is the unwritten rule of Parliament that if a Member of Parliament writes to the Prime Minister, he must get at least an acknowledgement at least within three days, and a final disposal reply within a fortnight. I received none.

I explained to him, like a teacher would explain to an infant in the classroom, what the documents mean, how the documents are to be read, what is the inference to be drawn from these documents, and I pointed out to him that one honest officer who has scrutinised these documents has recorded this note. Ladies and gentlemen, nothing happened.

I called a Press Conference. I made a video tape of the documents, explaining each document so that the members of the Press at least should understand this. My Press Conference was as valid as this all is today. But, ladies and gentlemen, crooks have developed power over even the Press of this country. Except for two newspapers - the Indian Express and The Statesman, nobody published the Press Conference.

It is therein, ladies and gentlemen, that I collected my four friends, two Journalists and two lawyers, and we knocked at the doors of the Supreme Court. But I must recall in all honesty, that for one full year even the Supreme Court was ------------- in the first in­stance.

The real investigation started sometime in 1994 or a little later. And my highest praise and credit go to this brilliant Bench of three Judges who have taken such a keen interest in this affair, that the CBI is unable to get out of their clutches. The Judges have now got them in their grip. And today, ladies and gentlemen, people are talking of judicial despotism developing in this country. This nonsense about Judicial despotism is being talked about by those who are now suffering their just punishment and are beginning to get their just desserts as a result of 'Judicial activism'.

If you ask me, I am prepared to say that this Republic has collapsed; this Republic today is hanging by a slender thread and that slender thread is provided by our gallant Judiciary at the top. Our Judges need praise. And this I say in spite of the fact that I am not totally unaware of the black sheep amongst the members of the Judiciary itself. But it is reasonably possible today with confidence to say that the highest ladder, the highest rung of the ladder, of the judicial ladder, we have a bunch of Judges who today have taken upon themselves to preserve this Republic, and to save it from the threats posed by a corrupt Executive and a Parliament which has refused to do its job. The Parliament is the Grand Inquest of the nation. When we wrote the Constitution Dr. Ambedkar wrote there an article in which he said that the privileges, powers of every House of the Legislature shall be the same as those of the British House of Commons.

Ladies and gentlemen, anybody who takes up “Parliamentary Practice" - a famous book - will find a chapter that the Parliament is the Grand Inquest of the nation. Therefore you'll be surprised that the House of Commons is called the High Court of England; a fact which is not known - that the Parliament is called the High Court.

Ladies and gentlemen, when the Hawala matters came to be debated in Parliament, the Government, through its shout­ing brigade prevented it. This time it was not the shouting brigade which was alone summoned. But now they have gone beyond shouts • This could not be debated, for example, in the Rajya Sabha. With great difficulty the debate took place in the Lower House, but it didn't take place in the Upper House. Parliament is being paralysed today.

The Congress men have forgotten that when Nixon was ultimately thrown out of power, it is the Republicans who voted in favour of the Articles of Impeachment of President Nixon. He was a Republican President; the Democrats had already cast their vote in favour of the impeachment. But the motion would never have succeeded but for the fact that honest Republicans said that enough is enough - "We must call our own President to account." And only when the Republicans this, did Nixon go out of power.

I am prepared to assume that there are honest Congress men. But why are they tongue tied? Why do they not walk out? Why do they not protest against the Prime Minister? Why do they not have the courage to call a Working Committee meeting and dethrone this Prime Minister and say "We'll elect an honest man." I know that some people have walked out of the Congress. But they have walked out of the Congress not on the right issue. They walked out of the Congress because they want to hide behind Sonia Gandhi.

Ladies and gentlemen, if Sonia Gandhi were to enter the Politics of this country and if she came to the people of this country and said "I will do to corrupt politicians in this country what Italians have done to their politicians back home, I will support Sonia Gandhi”.

Today take the illustration of Italy. No corrupt politician is today able to walk on the streets of Rome calling himself a politician. Politicians are running for cover. They are afraid of their security today because they know that people are in a state of wrath, anger against them.

Why doesn't Sonia Gandhi, if she has any pretensions to politics, why doesn't she say that "I will purify the politics of this country because I have learnt lessons from what my Italians are doing back home." But she's a chip of the same block; she belongs to the same family. And I don't expect any improvement.

Therefore, I have no hope in any section of the Congress in spite of the fact that there are some people in Congress who are honest. But if you see crime and you don't open your mouth you are a partner in the crime, you are a conspirator. And ladles and gentlemen, that applies to me, that applies to Gurumurthy, that applies to the presiding chap here; we are all conspirators because we do not sufficiently do what we should be doing against these corrupt people.

Ladies and gentlemen, the Supreme Court has now, by its vigorous action succeeded in producing some justice. But don't think that it is possible to change character by judicial pressure. You can take the horse to the pond but you can't make it drink. Supreme Courts can compel investigation but it is impossible in the nature of things. But I don't believe that the Supreme Court has that kind of an intimate interest in this case because the Supreme Court in the nature of things can't devote that much time and attention; they can't become SHOs; they can't become Police officers; ultimately they have to remain Judges. And it is impossible for Judges to minutely supervise investigations.

The character of the CBI being what it is, which is shown by two years of inaction, is a matter of sleeping over these documents , Today the investigation which is being conducted is also not being conducted with full integrity and honesty. The consequence of it, ladies and gentlemen will be that even the guilty, even the real guilty ones will ultimately be let off in the courts. It's quite apparent that the object of the investigation, apparent from the manner in which the investigation is proceeding, is to see that ultimately everybody gets off. But during the electoral process everybody remains under a shadow and a cloud and the Prime Minister, who is the originator of all this pro­blem in this country, is the linchpin of the Hawala business, that man retains his position of power and that man is probably going to reap a great electoral advantage by the fact that the CBI has been compelled to do an investigation which he himself has scorched. This is the paradox which we are facing! It is a paradox which is bothering me. How do I now - how do I in the position in which I have been, in which I was all the time telling the Supreme Court - when I say "I", not me directly but through my friends I put up as petitioners - when I said to the Supreme Courts through my friends that the CBI is not investigating, can I now turn around, can I now turn around and say they are in­vestigating dishonestly and corruptly? I'm in the situation of a paradox. But ladies and gentlemen, that paradox will be resolved by the people's action. The people of this country will know who the habitually corrupt are, and knowing fully well that you are not dealing with an honest investigating agency but a corrupt investigating agency-----------. The people of this country will have to take decisions of their own about the character of some of the people involved. I do not wish to comment upon the facts of any individual case; I do not wish to weaken the case against the real guilty persons as well, because if the CBI is capable of getting one or two innocent people into their dragnet, to that extent all their actions become circum­vent. And the moment one starts attacking the limited corrupt action they have taken against some people, you weaken the case against even the real corrupt people. This is the paradox in which a lawyer like me today is placed, And I hope, ladies and gentlemen that people of this big country will see through the game. You have your own methods of judging people's character and conduct, and I can safely advise you that you will make some distinctions amongst those whom the CBI wishes to prosecute, How you will make them, is a matter for your own judgement and your own conscience.

And, ladies and gentlemen, whenever I speak about the duty of the people to the country - first give up -give up flattery and sycophancy of people in power. That is the first, first hallmark of democracy. People in power, history teaches us, have always been people who are inferior, both from the point of view of integrity as well as common sense, compared to the people whose destiny they hold in their hands. Our rulers are people who are infinitely inferior to all of us.

Dr. Ambedkar when he dedicated the Indian Constitution to the people of this country, said, "After twenty years or thirty years if you find that the dreams of Free India have not been realised do not blame this Constitution which I am dedicating to you, blame the character of the rascals who come to man the institutions created by this Constitution.

I am a student of Dr. Ambedkar; I am his disciple; I believe in his philosophy. And, ladies and gentlemen, a believer in his philosophy will not give up the effort to reform and to redeem. I do remember, when Sir Edwin Arnold wrote his famous “Light Of Asia”, he closed it with the final verse about the Buddha that - "We are voices of the wandering vine that mourn for rest and rest can never find. Just as the wind is, so is mortal life - a sigh, a sob, a storm, a strife." Let us face the storm and strife. Let us face the storm and strife; let us stand up and be counted.

As the Urdu proverb goes - there is an Urdu couplet that I don't know how many of you will follow:

In the time of crisis it is only the mad people, like Ram Jethmalani who come to your rescue. Those who prided themselves upon their eloquence, turned out to be tongue tied And the tongue tied are as guilty as those who are committing the crimes which the people see, but their tongues remain tied.

Thank you

S. Gurumurthy   

We are all gathered here to discuss the issue of hawala. It is unfortunate that this word has been misused and inaccurately understood from the very beginning in the context of the entire case as has been presented before the people. I will give you a brief run up to the expose that shook this country. When the CBI was tracking down the source of funds for the terrorists in Kashmir, they were on the trail of one Shambudayal Sharma. He was the conduit or the carrier of money for the terrorists. Quite unaware of the CBI on his trail, he was caught in the act of passing on the money to them. Thereafter he spilled the beans. He gave the CBI a list of names of the people to whom he had been delivering the money. One of the recipient was S.K.Jain. As per the confession of Shambu Sharma, he had been acting as the conduit for such transactions on behalf of one Amir Bhai. This Amir Bhai is the kingpin of this whole issue or rather he is the tip of the is now known that Amir Bhai has been paying fifty five persons in this country, out of which Jain is only one. But what is not known is who are the rest? And this will never be known because it will be this information which will really rock this country.

The Corrupt Deals It is not as though only terrorists have been receiving funds through the hawala or through Amir Bhai. As an investigator I can vouch for the fact that the money that was paid to Jain or received by Jain has nothing to do with the funds for terrorists. He received his own money which was his by way of commission for the deals that he had struck with Quatorrochhi of Italy. These deals concerned three specific projects involving rupees 4000 crores. One was the Uri project, the second was the Dulhash Hydel Project and the third was the Durgapur Steel Expansion Contract- all totalling 4000 crores. Jain says a commission of 10% was agreed upon out of which 3% was to go to Jain and the remaining 7% was to go to Quatorrochhi in Italy. This is Jain's statement before the CBI. The arrangement between Jain and Quatorrochhi was to the effect that Jain was to be paid the amount due to him in Indian rupees in India. Jain stated before the CBI that Quatorrochhi arranged to effect these payments through Amir Bhai and that he did not know Amir Bhai previously and that it was Quatorrochlii who introduced Jain to Amir Bhai. Therefore^ the first thing we have to bear in mind is that the money that Jain received had nothing to do with funds for the terrorists in Kashmir. And it is here that the press has failed in its duty to the people. It failed to highlight that what Jain received was his share in the corrupt deals and that he was not a hawala dealer but a hawala client himself.

The 59 crores that is being talked about - it is 59 crores and not 65 crores as is being made out, which Jain undoubtedly received through non-banking channels, through a hawala transaction. A hawala transaction involves surrender of foreign exchange for rupees paid in cash, or vice versa, not through the legal banking channels. Thus Jain chose to surrender the money due to him in foreign exchange and arranged with Quatorrochhi to pay him in cash in rupees; which Quatorrochhi arranged to do through Amir Bhai. The most significant fact in all this is that this 59 crores paid to Jain is the product of corrupt deals.But unfortunately, what is being investigated today is merely the application of the corrupt money and not these corrupt deals themselves. This is a very crucial omission, a calculated omission in the investigation.

The Quatorrochhi angle Fortunately for the people, India Today did ', n excellent job in this regard. As a follow up to the reve"-;tion made by Atal Behari Vajpayee and of the Jain state,lent, India Today brought out the fact that the source, ol the money received by Jain was the corrupt deals struck between him and Quatorrochhi between 1987 and 1989. It is evident from Jain's statement that between them they made 10% by way of commission of which Jain received 3% and the balance of 7% went to Quatorrochhi. In his testimony before the CBI Jain has given the names of banks in which Quatorrochhi is supposedly maintaining accounts. He has given other corroborating facts too. He has also said that a particular Russian government company, had been awarded a contract for a sectional work to be undertaken in Durgapur Steel Plant. He has alleged that Rajiv Gandhi demanded 15 crores from this Russian company for giving them the contract. Jain says, being a government organisation the Russian company refused to pay the amount as demanded but agreed to pay the amount to Jain's company as an advance which will not be recovered later. Jain has testified that he did receive this amount from the Russian company and that this amount stands credited in his account even today. Jain has also said that it was from this money that he paid 10.5 crores to Lalit Suri, 2 crores directly to Rajiv Gandhi and 2 crores to Sita Ram Kesari for onward transmission to Jayalalitha. 14.5 crores out of a total of 19.5 crores which Jain had earmarked as political payment, is thus accounted for by a single person. 14.5 out of 19.5. But this is not corruption in its totality. This is only application of corrupt money made from corrupt deals. And this is what Jain has accounted in his diaries.

The Jain Diaries and the CBI I must say as a chartered accountant, I admire the meticulous way in which Jain has maintained these diaries: daily sheets, monthly diaries summarising the daily transactions into monthly receipts and payments, and then periodical receipts and payments which have been recorded as quarterly, half yearly, three quarterly and annual statements - each one of these records meticulously tallying with one another. It is therefore that I say, if a person's name does appear in that diary, then there is a prima facie case against that person. I concede it straightaway. But that person's name must appear in that diary. Positively in that diary.If it does not appear in the diary, clearly there is no case. I will soon tell you why. The daily statements, monthly statements and the periodical statements for the entire period between February 1988 and March 1991 are meticulously interwoven. They tally with each other and they are mutually corroborative.From the records that Jain maintained in two slip pads, two diaries and two files, I have come to know that daily statements are available for three months in 1990, monthly statements are available for the entire period between February '88 and March '91, that is for 38 months and periodical statements are available for 36 months-Jain says he received the 59 crores as a part of his commission which constituted 3% of the deal and the remaining 7% was a payoff.

Incidentally, I spoke to Amod Kant who investigated the case on behalf of the CBI. Mr Kant has said publicly that the CBI got hold of these documents on the 3rd of March 1991 and that the CBI rested on them till 1994. They did nothing. In 1994, Amod Kant took up the matter. Amod Kant is a good friend of mine and when I spoke to him he made a shocking revelation. He told me that it was he who caused Jaii-'s statement to be recorded.

Amod Kant also confirmed that Jain in his statement before the CBI also declared that he had paid 3.5 crores to Narasimha Rao, having met him nine times altogether. Jain said that he was summoned to meet the prime minister in 1992 on the day before the festival of Holi. Jain further told the CBI that on that occassion the Prime Minister had asked Jain for that money and that Jain told Narasimha Rao he did not have that kind of money with him. Jain had also said that he had been drunk for over seven hours on that day and had had to take an equaliser to keep his appointment with the Prime Minister. A meticulously detailed statement recorded by an honest officer of the CBI. Jain has revealed that he went to Satish Sharma's farm house from where Satish Sharma and Chandraswamy drove him to meet the Prime Minister. He has recorded in his statement that on that occasion since he was accompanying Chandraswamy, he was not subjected to any security check but that on the several previous occasions when he had to meet the Prime Minister, he had to go through the normal and regular security checks.Incidentally I also met S.KJain the central figure in this drama and Jain told me, as he must have told the CBI and as he must have told several others that there must be official records of his visits to the Prime Minister in the PMO (Prime Minister's Office).

Sins of omission and Commission
Strangely enough, although Jain made this statement before the CBI in March 1995, the PMO was not asked to produce these records until September 1995, by which time the PMO told the CBI that since these records are not to be preserved, they have been destroyed. In my opinion the very fact that these records have been destroyed is the most damning corroboration that Jain was speaking the truth about his visits to the prime minister. But this statement made by Jain which revealed the nature of real corruption, corruption in very high places, the real issues whose implications were beginning to emerge and the real people involved in the scandal, was cast aside.And most damning of all and yet another corroboration of Narasimha Rao's involvement in the hawala, is that soon after Amod Kant records this incriminating statement by Jain, he is removed from his post. He is asked to go. Amod Kant is told unceremoniously that his deputation to the CBI from his own organization is ended; and this despite the fact that he has the right to be in the same post for another three years. Every police official who is on deputation to the CBI is given an initial assignment of four years. Thereafter he is given two extensions- the first for three years and then again for two years, altogether serving with the CBI for nine years. Amod Kant was in charge of very important investigations. He was investigating several corruption cases involving politicians and therefore the hawala case too was entrusted to him. At that point in time investigations into several of these cases had been completed, in some cases evidence was being recorded while in others charge sheets were being prepared. In some cases as in the hawala case, investigation were just beginning to take off. It is at such a juncture that he is relieved of his post and asked to hand over charge. Significantly at the time of his being asked to go, Amod Kant's next assignment has not been specified and what is more, he does not get his next assignment until three months later. And during this period, he is not paid his salary, his telephone connection is cut off and he does not know if there is going to be any future appointment at all. He was cast aside without explanations.

Newspapers failed us.
I see a need to mention all this in my talk today because for some strange reason, our newspapers have not thought it fit to inform our people about all this; and a situation prevails today whereby we believe anything the newspapers choose to tell us and what they choose not to tell us never happened. As one who belongs, in a sense, to the newspaper community, I must say that more than half a dozen newspapers which reach among them, the largest number of our english speaking people, are virtually in the hands of the present government. They can therefore, not be expected to print anything which will even remotely implicate the Prime Minister in the hawala scandal or any other scandal for that matter. Which is why there is a dire need to hold such large scale meetings throughout the country so that the people are told the facts of the case. Of course such meetings are not the best of mediums for this purpose but we are left with no, choice. So a person like Ram Jethmalani who appeared, who advised and who promoted the litigation to ensure that the CBI investigated the case, has today reached the conclusion that this case is no longer about corruption in high places but only a weapon to gain electoral advantage. I will tell you how.

From March 1991 when the CBI got hold of these diaries, until 1994, nothing was done about investigating the contents of the diaries. This case would never have seen the light of day and all of a sudden, in January monstrous of this year it assumes monstrous proportions and hits news headlines. The pressure from the Supreme Court was of course there but it is not as though Supreme Court judgements and directives have not been resisted before by central or state governments. The Supreme Court came into the picture already in 1994 but it is r at until the beginning of 1996 that the government was seen to be doing anything at all with regard to the coi.ents of the Jain diaries or responding to Supreme Court directives. I am putting it before this audience that on the 3rd of January this year when I was in Singapore, a very important minister in the Central Government sent information to me - to me Gurumurthy -that Mr Advani is being framed in this case. 1 relayed this information immediately to the BJP because that Advani was being framed emerged very soon thereafter. This was later confirmed by Jain himself. After the chargesheet was filed on the 16th of January, 1996, after considerable effort one of my friends managed to arrange a meeting for me with Jain. Initially he was not as forthcoming as I would have liked him to be but in stages he revealed almost everything so that I was able to get the complete picture on the hawala and the contents, of those diaries. Jain told me that on the 3rd of January, the CBI took away with them 14 persons of his household for interrogation. The only question asked of them was if there had been any kind of meeting between Jain and Advani. This was on the 3rd of January. On the 2nd of January, the Prime Minister reportedly met Vijaya Rama Rao, the Director of the CBI. Which is probably when the idea must have germinated. The prime Minister must have decided that the only way to subvert the entire political process and have the issue of corruption thrown out of the electoral agenda is to implicate and thereby fix the person who was making the issue of corruption a very large part of his party's electoral campaign.Minister Kamal Nath tells us that if Advani's name were not implicated in the case, the hawala issue would never have seen the light of day. What I say is, if Advani's name does indeed figure in the diary, the diary, then prosecute him by all means and convict him. But his name is not in the diary. His name is not in the daily statements,his name does not figure in the systematic monthly records of receipts ;md payments available for the entire period between February 1W»S and March 1991, and his name does not appear in ;iny of the periodical statements available for 36 months - not in the quarterly, half yearly, three quarterly or the annual statements. And I reiterate again, all these records of receipts and payments tally perfectly with each other.

Analysis of the Diaries
In fact we made another kind of calculation. Jain says he distributed 59 crores as political payments. There is one point I wish all of you to note. The CBI says that Advani received money twice from Jain - a sum of 35 lakhs between the period February '88 and March '90 when Advani as a member of the Parliament, was a public servant, and the second payment in April 1991, when Parliament had been dissolved and he was no longer a public servant. The CBI in its chargesheet says it is not concerned with the second payment. Therefcie as per the chargesheet, Advani is accused of having accepted a bribe when he was a public servant. We therefore examined the records of receipts and payments for that period - the period between February 1988 and March 1991, which is two months before he became a public servant and twelve months after he ceased to be one, and the closing balance in cash with Jain as of 31st March, 1991. The total receipts less total payments tallies perfectly with the closing balance in cash as of 31st March, 1991, without accounting for the payment sup­posedly made to Advani. I am now revealing the facts as contained in the records which the CBI is claiming as its sole basis for filing the chargesheet against Advani and the others. And if the reading of these facts go in favour of Advani, well then, it only corroborates what Kamal Nath said, that Advani is being framed in this case. I am sorry that these facts seem to disturb this particular gentleman in the audience. He has accused me of defending Advani and I am glad that all of you reject his claim. I can only request all of you to listen. These are not my views. Facts cannot be seen in two different ways. Facts, especially figures never lie. I therefore beseech all of you to listen because this issue is all about corruption, and more than corruption, it is about politics of a very disturbing kind.

Discredited Politics
And as Biju Patnaik said and as Nani Palkhivala felt distressed enough to warn us, if as a discerning people we fail to see this subtle and vital distinction between the political motives of this case and corruption, and if, as a consequence, we discredit the entire political system, we may be inviting dictatorship. Of any kind. Every country which has suffered dictatorship has gone through a process of discrediting its politicians and its prevailing political system as corrupt.Are chartered accountants not corrupt, are lawyers not corrupt? And how many judges in this country will vouchsafe that the entire judiciary is not corrupt? Please understand, corruption is a issue that needs to be tackled by all of us and I can say this with a degree of conviction because I have done it and at some cost to myself. There is a widespread belief that the CBI is this country's premier investigating agency. But that is no reason why intelligent people have to accept all that it says to be the truth. It was the very same CBI which was not above forging a letter and having me arrested on trumped up charges. I am not talking here to mere receivers of information.It is my hope I am talking to transmitters of information. Therefore please listen to facts.

There is a page in one of the files which the CBI is claiming as a part of the evidence, which carries Advani's name in the list of names under the heading Political expenses (POE). Besides the fact that the amount against Advani's name does not tally with any of the daily, monthly or periodical records of receipts and payments, I will make bold to say that if it were not for the fact that Advani's name is on the list, no chargesheet would have been filed. Against Advani or anyone else. Can what lam saying today in this meeting be construed merely as a defence for Advani? This is one politician who writes a letter promptly to the investigating agency listing his only assets. He lists his assets which include just one flat and he says if the CBI can prove otherwise, he will withdraw from public life. These things need to be said now because if this audience and other thinking people fail to see the horrendous conspiracy behind this formulation of the hawala case, we will fail to target the author of this infamous frame up - the corrupt prime minister of India. And this is the man who could not give a categorical answer in the parliament when he was asked if he was being investigated by the CBI. He could have said 'no'.He did not have the courage to say 'yes'. We are today faced with corruption and we are faced with a system that failed. This systemic fault however has been exposed which is why The Free Press newspaper wrote an editorial in which it has been observed that there are two streams of politicians in India. One stream is represented by people like Arif Mohammad Khan who purchases 16 cars with the money he received from Jain and the other stream is represented by a person like Advani. The newspaper said that it was nobody's case that Advani had had even a cup of tea with the amount allegedly paid to him by Jain. And the newspaper writes this on the assumption that Advani's name is in the diary. Advani represents the embarrasment caused to honesty by a corrupt and hypocritic system.

The Diary is the backbone of the case :

The whole thrust of the CBI case against all those char-gesheeted, is the diary; which is the single most important evidence in this case. Not the file containing the Political Expenses list, but the diary which contains records of the month to month statements of receipts and payments and the opening and closing balance between February '88 and March '91. It is this diary which has recorded the amount that Jain received through Amir Bhai, the amount that Jain paid to Arif Mohammad Khan and Madhav Rao Scindia. This diary is the very backbone of the CBI case. The CBI told the Supreme Court that though the evidence is recorded in a diary, the records have been so meticulously maintained that the daily, monthly and periodical statements harmonise, tally and corroborate with each other, that it should be accepted as a book on accounts under section 34 of the Evidence Act. And yet the CBI records the evidence of its own technical adviser who was asked the question if with his technical knowledge and as an accounting expert, he would accept the diary as being equivalent to a regular book of accounts. The CBI technical adviser says "no/he would not accept the diary as a regular book of accounts. The amazing thing is that this negative reply by the CBI's own technical adviser is adduced as prosecution evidence. This evidence alone is enough to destroy the prosecution case. It is obvious to those with even a rudimentary knowledge of law that this prosecution has been launched to see that no conviction takes place. I challenge the CBI to tell me if any court will now convict anybody on the basis of the diary which has been discredited by the CBI's own witness. The CBI has hinged its entire prosecution around the diary and its own technical adviser refuses to grant it any respectability. The core of the case has been blown to omitheree'ls.

As I said earlier, people with a little knowledge of law and those familiar with criminal law proceedings will tell you that the prosecution will never ask a question and record an answer which could adversely affect the prosecution case. It is never done and it never happens.But the CBI has done so in this very important case involving some of India's leading politicians. The farce does not end here. Yet another witness is asked if he had delivered any money to a politician. The answer is 'no'. A third witness is asked if he had given seven and a half lakh rupees to Buta Singh and another 10 lakhs to X. The witness replies that he remembers giving Buta Singh seven and a half lakhs but has no recollection of the 10 lakhs. All these statements undermining the prosecution case are meticulously recorded to ensure that eventually no conviction will take place. The idea of filing these chargesheets is merely to appropriate for the Congress and particularly for Narasimha Rao a halo for having initiated action to cleanse politics of corruption. More importantly, it has been done to defame Advani who is held in high esteem in political circles for his untarnished image, thereby hoping to finish off the BJP's campaign against the highly corrupt Congress regime. The idea is to keep the cases pending until the elections so that a cloud of suspicion hangs around his head; and I tell you, once the elections are over neither the CBI nor Narasimha Rao is going to evince any interest in pursuing the case.

Prosecution or Persecution?
When I told Ram Jethmalani about the statements of the witnesses and the techical advisor as recorded by the CBI, he was stunned. He told me that such a thing had never happened in all these long years of experience as a criminal lawyer. As a nation we have this uncanny ability to get hold of the wrong end of any issue. We are not investigating Amir Bhai, Quatorrochhi or Narasimha Rao. We have instead, got hold of Jain. And all that poor Jain wanted, according to a friend of his, was a Rajya Sabha seat. He spent over 90% of his ill gotten money on Congressmen in pursuit of that ambition. I would now like to share with this audience some details about the different payments recorded by Jain in his diary and how the CBI has acted upon that. Having analysed the contents of the diary, I observed three streams of payments. One stream of recipients of the Jain largesse was the bureaucrats. Jain paid 2.63 crores altogether to some of the bureaucrats in the country. The second stream of recipients was that of the politicians. Jain has paid several politicians money to the tune of 18.5 crores or thereabouts, all listed under Political expenses or POE. This record of POE tells us that Bhajan Lal received 1.1 crore and that Arvind Netam received just 50,000 rupees. Arvind Netam is chargesheeted but Bhajan Lal is still untouched. It is well known that Narasimha Rao dare not proceed against Bhajan Lal. So, is it prosecution or persecution? Jain told me that he had specifically warned V.C.ShukIa and Balram Jhakar that the PrimeMinister was arranging to have chargesheets filed against them;butthey did not take his warning seriously because ac­cording to Jain, these ministers believed that their ministerial positions were protection enough. According to Jain, V.C.ShukIa told him that he had met the Prime Minister four times between the 10th and 15th of January and that Narasimha Rao, besides discussing the strategies to be employed for the forthcoming Parliament session, had also assured V.C.ShukIa that he need have no fears of being chargesheeted by the CBI. This conversation between Jain and Shukia took place on the 15th of January. On the 16th, the very next day, V.C.ShukIa is woken up at 4.30 in the early hours of the morning, in the train in which he was travelling, to be told that the CBI was filing a chargesheet against him the very same day. As far as the role of the CBI and the Prime Minister is concerned in this whole sordid episode of the hawala, there is very little of law and even less of ethics. There is only politics and politicking.

Campaign of Disinformation:
In these circumstances, when people see the degeneration of these institutions, with whom does the responsibility lie? The responsibility lies with the intelligentsia and the press to get at the truth tenaciously. But the press, along with the CBI and the PrimeMinister's office seem bent on letting loose upon the people a substantial campaign of disinformation. The people are now being beguiled into believing that this political case, inspired by nothing more than the ignoble motive of doing away with political opponents and challengers for power, is a movement against corruption. I am all for action against corruption involving politicians and bureaucrats, if there is a clear case of quid pro quo. As in the case of Arif Mohammad Khan. But also present in the diary are those who received money from Jain, not on a quid pro quo basis, but as political donation. As in the case of Arjun Singh and Arvind Netam. We have to separate the two. In the case of Advani, the CBI examined nearly twenty witnesses just to find out if any of them had seen Advani's car in Jain's house or Jain's car in Advani's house. Nobody was willing to make even a false statement implicating Advani. I am forced to say all this because if we begin to discredit people without evidence, without qualms, there will be no end to it. I was myself a victim of this kind of unscrupulous persecution involving once again the CBI and inevitably the office of the Prime Minister. But at that time, the Indian Express was solidly behind me and exposed the nefarious plot in a matter of days. Unfortunately today, no newspaper seems willing to get at the whole truth, setting aside its personal predilections. People like you who are assembled here today to listen to us who have something to say, are the last hope of this country. I appeal to all of you to excercise your responsibility in demanding the truth from all concerned and thereafter in transmitting the truth.

Corruption has touched every institution of this country. It is not just the politicians. What about people in highly respected professions? Chartered Accountants who write false accounts and sign false certificates - they are worse than politicians because this tribe passes itself off as intellectuals. There are lawyers who are without scruples and those who proclaim openly they can 'fix' judges. The common man sees no reason to vent his ire on them becuse he thinks he is not affected directly by them. But the politician is abused because he comes asking for votes. We think he alone is accountable to the people. But there is a danger in this abuse. If we abuse all politicians without discrimination >ve will be guilty of driving away even the exceedingly few good and decent politicians away from politics. Blanket discrediting of people is no way to look at issues.

Aborted Investigation :
Sensing the danger of this kind of indiscriminate dicredition of politicians, Nani Palkhiwala felt compelled to observe that this case was not a movement against corruption. There is no attempt to get at the truth and the investigation into corruption in this case was aborted successfully midway during the process. As the case is being tried today, there is no way that this prosecution is going to end in conviction. Not with the kind of negative statements recorded by the CBI. The only possible way to get at the real perpetrators of corruption would be for atleast one Jain to turn approver in the case. And the only way they are going to turn approvers is when they are assured of total immunity. You let off a small crook to catch a bigger crook. If this government was indeed serious about nailing corruption, then it ought to have come forward to grant the Jains full immunity in return for the whole truth. The law leans heavily in favour of the bribe giver to enable the authorities to go after the bribe taker. The reason for the present government dragging its feet on the issue is not far to seek. If Jain were to testify in court regarding all that he told the CBI earlier, where would it place the CBI, and more to the point , where would it place the Prime Minister?

There are only two ways to nail a bribe taker - you either lay a trap for him and catch him ^in the act or you get the bribe giver to confess with promise of total immunity from prosecution. And because both the CBI and the Prime Minister are vulnerable in this case, the possibility of immunity for the Jains seems remote. In fact Jain told me, as he told the CBI ard as he probably told others that he met the Prime Minister several times only to ensure that his business with the government continued and that he was never arrested. In fact, he says he gave Narasimha Rao 3.5 crores only to see that he was never arrested. And, said Jain, since the Prime Minister backtracked on our agreement, I spilled everything to the CBI. Today I am routinely asked the question, how is it that Narasimha Rao is also accused of accepting money from Jain when his name does not appear in the diary at all? This is a poor fig leaf. I tell them Rao confiscated the diaries in 1991, and then took the money from Jain. This is a very complicated issue with very wide and dangerous ramifications.

Failed Institutions :
Conveniently sweeping the larger issues under a mound of lies and disinformation, the Congress has trivialized the entire thing into an electoral campaign against corruption. They would like us all to see them as crusading against the corrupt impartially even within their own party. But the point is, corruption within the congress is no big deal, people have accepted it to be natural to their culture. But what is news, what shocks people is the charge that Advani is guilty of corruption. That is the image people have of him. Which is why under the guise of charge sheeting his own men, Narasimha Rao hinged the entire case around Advani and the press seems only too happy to be led by the nose.

Knowing well the cloud under which his name could hang, Advani asks the court for a speedy trial on a day to day basis. It is no wonder the CBI opposes this demand but it is strange that Advani's discharge application is likely to be deferred until after the elections. Not to say disturbing, raising several questions in our minds. I will make bold to say that this case in its truncated version of the truth will be seen to be relevant only until the elections. Once elections are over, we will hear no more of it and yet another aborted investigation will become a part of our collective amnesia. I thank you for listening to me. I am now ready to answer any question which this audience may have. Shri Gurumurthy's talk was followed by a very serious and unrelenting session of questions and answers. The audience posed some very thought provoking and penetrative questions which motivated Shri.Gurumurthy into giving detailed answers thus bringing to light more and more facts which did not find place in his talk.

Question And Answers
Ql. Mr.Gurumurthy, what is the role of Vineet Narain in this case? An interview appearing in the Indian Express says that it was he who brought the issue into the limelight.

Ans. The events preceding the filing of the writ on this issue by Vineet Narain deserve our attention by themselves. The run up to the writ involves one O.P.Sharma, an allegedly corrupt CBI official. This O.P Sharma superseded Shri.Madhavan an honest officer who later investigatd the Bofors scandal and the infamous security scam and Madhavan was forced to approach the Supreme Court to get his senior y restored. It is an accepted tradition in any Congress ;gime that a corrupt man will supercede an honest person. 0. P. Sharma was in charge of this case and had taken a bribe of thirty lakhs from one Kaul who was a well known 'fixer' and who was engaged by Jain. Kaul was not only a 'fixer' of politicians but was also a 'fixer' of the CBI. Sharma had received his bribe in three instalments of 10 lakh each. Kaul was due to pay him the fourth instalment of 10 lakhs but before that he informed people in the CBI who were opposed to Sharma. The CBI laid a trap for Sharma and caught him in the act of accepting money - money which Jain was supposed to have paid him. The most digraceful aspect of this episode is that Sharma attended office for four days after being caught in the act of accepting the bribe from Jain. He continued to have access to the papers relating to the cases under his charge. Sharma was removed from his job only four days after the event and during this period he made photocopies of all the case papers. To get back at Jain whom he held responsible for exposing him, Sharma began to distribute the case papers which included the diary, to several people. All those who saw the papers were unwilling to act upon it. They were afraid because those involved were very big names. When Vineet Narain got hold of these papers he took them straight to Ram Jethmalani who advised him to file a writ in the Supreme Court. Three other public spirited people joined in and with Jethmalani's support and advise the case was brought to the notice of the Supreme Court.

Q 2. Several bureaucrats are now discovered to be implicated in the hawala case.Please comment upon this.

Ans. Obviously there is bureaucratic corruption. And if the expenditure patterns and investments of the bureaucrats are unexplained and patently disproportionate to their known sources of income, then they have to be proceeded against. And when the law does catch up with these corrupt bureaucrats, we should welcome it even if in most cases the action is politically motivated. As far as I am concerned this applies equally to bureaucrats and politicians. I will repeat what I said before. If it is proved that Advani has accumulated wealth beyond his means, I will support and welcome any action taken against him. But there is no concrete evidence against him. They have merely filed the chargesheet and are in no hurry to convict him. The idea is not to convict him, because there is no evidence against him, but merely to keep him accused in the eyes of the public until the elections.But in the case of several others in the hawala case there is concrete evidence to convict them and as in the case of some of the bureaucrats implicated, they have been found to have accumulated disproportionate wealth. I therefore welcome the action being taken against them. But at the same time I must warn this audience that all action taken so far is a charade - not intended to convict even the really guilty. I tell you, this prosecution is not going to result in anybody getting convicted - not even the guilty.

Q 3. You asked us noi to paint all politicians black. Similarly I do not think we should paint all newspapers black. They have played their roles. You know the role that Irani played during the Emergency. And even today many of us regard The Hindu as a very fair and straight paper........(howls of derisive laughter and the ques­tioner is shouted down by members of the audience)....'! here are newspapers and newspapers. There are well respected editors and I think people can even today rely upon some of them. Another thing. In your talk you have not touched upon the role of the Supreme Court in this issue. We should accept that the Supreme Court has contributed significantly in this case. Those that have been chargesheeted in the issue, I think their cases are in the hands of very respectable judges and they are not going to take any crap (sic) from the CBI, the prosecution or the defence. I believe they will take a very fair view. Please do not remove this confidence in our topmost judiciary by talking about corrupt judges.

Ans. I understand your emotions and will answer your questions. I mentioned in my talk that I am associated with newspapers and in a certain sense I even belong to the tribe. Therefore any comment I make upon newspapers is a comment on myself too; it is an introspection. Similarly when I was speaking about chartered accountants, I was introspecting again.It was not an allegation against someone else. I was speaking about my profession. And when I spoke about lawyers and judges, I was not speaking irresponsibly. This is the first point that I would like to make. As for the role of the Supreme Court in this case, and I am being very responsible when 1 say it, only after Justice Verma started to preside over the Bench did the case make any progress. Not until then. Once Justice Verma took charge of the issue, he made two pronouncements - in my view, both very significant pronouncements. When the diary was presented before him and the statements of S.K.Jain, Justice Verma instructed the CBI to proceed against any person implicated in the case no matter how high a post he may hold. For as long as the CBI had been acting at the behest of the Prime Minister, they were given a carte blanche with respect to this case. And then Justice Verma made the second pronouncement, logically following the first. He pronounced that as far this case went the CBI would no longer take any instructions or orders from the Prime Minister, but would be answerable only to the Supreme Court.Within minutes of the Supreme Court judgement, the CBI Director, Vijaya Rama Rao, the Prime Minister and the law secretary were huddled together in a conclave. If they were to be asked what it was that they were discussing in view of the Supreme Court judgement, I have no doubt that they will say they were discussing terrorism in Kashmir. (Laughter from the audience). And so if the Prime Minister were to be exonerated by the CBI tomorrow, Rao can always claim that he was exonerated honourably because the CBI has now been constituted into an independent body at the orders of the Supreme Court. There is constitutional independence granted to the courts in India. But are all judges independent? This question arose when 1 was having a long discussion with Anil Diwan, amicus curiae in the Supreme Court. We were discussing the possibility of constituting an independent central investigating agency. Independent of the executive. We knew that such a method of administration is unknown to the constitution in its present form. There is no way that the CBI can be brought out of the control of the Prime Minister. To even think it is possible is only a theoretical formulation. So the Supreme Court is struggling to give an ethical direction to the case and it can see no way out. At one point it was thought, just before the last hearing on Advani's case, that the Supreme Court may be asked to direct three former judges of the Supreme Court to examine all papers of the CBI related to the case and form an opinion about the merits or demerits of the investigation conducted so far. Such a step would have meant delaying the hearing by atleast six months.And what kind of constitutional or legal status be given to these judges except Commissioners of Court. And should the highest court constitute commissioners to go into the question of whether prosecution should be launched or not? If it did so then what were the implications of such an act with regard to the discretion of the lowest judiciary. They would no longer be able to even grant bail. These are very vital issues before the country today. It therefore means that if the target of the investigation by the CBI is the Prime Minister himself, there can be no impartial or honest investigation to get at the truth as long as Rao remains the Prime Minister. (Thunderous applause). To make good my point 1 will now relate instances of the Prime Minister's complicity in the case. When Jain made his statement to the CB1 implicating Namsimha Rao in the hawala case, the CBI chief was unwilling to place this statement before the Supreme Court. However, India Today has recorded the fact that the CBI chief came under tremendous pressure from his own officers who threatened not to associate themselves in the case if Jain's statement were not made known to the Supreme Court. Secondly, in March 1995, Jain stated to the CBI that he was introduced to the Prime Minister by Satish Sharma, Chandraswamy and R.K.Dhawan. He also stated that all the three were involved in the payoff and that he had paid 50 lakhs to Satish Sharma and 2.5 crores to Chandraswamy. Though this statement was made by Jain to the CBI in March 1995, clearly implicating those closest to the Prime Minister, no effort was made to investigate any of them until September 1995 when all incriminating documents were conveniently disposed of.lmmediately after examining Jain, Amod Kant wrote to the CBI chief saying that these three persons ought to be investigated. Not surprisingly, there was no reply. The CBI did not interrogate the security staff of Satish Sharma, R.K.Dhawan or Chandraswamy. No effort was made to procure the office records from the PMO, or the records from the security staff or the records maintained by the police in the offices and residences of these three persons. Thirdly, Jain told the CBI that he had asked the prime Minister t0 S'^ mm tne c^ntra^t for the Durgapur Steel Plant. The CBI did not undertake to find out from the Durgapur Steel Plant if the contract was indeed offered to Jain. Because if the contract had indeed been given to Jain it would firmly establish the Jain - Narasimha Rao nexus.This investigation by the CBI is therefore not to nail corruption. How can the present regime claim to be carrying on a movement against corruption with a corrupt prime minister as its leader?

Q 4. The hawala case came to light during the tenure, of Chandrashekhar as prime minister.Don't you think he is accountable too? As per some newspaper reports, it seems when this was brought to his notice by the CBI, he instructed the CBI to take action against the Jains but to leave the politicians alone.Is this true?

Ans. When the hawala racket was brought to the notice of Chandrashekhar, he could not have known that the CBI conducted a raid on Jain. That Jain was raided was only incidental to the CBI's total action plan to nail the source of funds for the terrorists in Kashmir and the means employed to disburse them. Chandrashekhar was probably told of Jain's involvement in the hawala racket when the CBI got hold of the Jain diaries. According to the diary, Harmohan Dhawan, a very close friend of Chandrashekhar was paid one crore. Harmohan Dhawan was the Works and Housing minister in the Chandrashekhar cabinet and I have no doubt that the money which Dhawan received must have been for the party. Chandrashekhar was asked why his name did not occur in the diary to which he replied it must be because he did not receive any money personally from Jain. Further he was asked if he would have accepted the money if it had been offered to him and Chandrashekhar said 'yes'. This only goes to drive home the point that just as black money finances several admirable charitable causes, it also finances politics. Unfortunate but true. We cannot reform the system by shutting our eyes to uncomfortable truths. We know that elections are fought with black money. Knowing this, the BJP has been the only party which has been consistently demanding state funding of elections.

Q 5. You told us that Advani's name does not figure in the Jain diary. Then what was the material evidence with them that they filed a chargesheet against him and more importantly why did the court issue a non bailable warrant against Advani?

Ans.You see there are these daily statements which are a record of the daily receipts and payments and these daily records are available for the months of July, August and December, 1990. These are not available for other months. Then there are the monthly records of receipts and payments available for 38 months, from February 1988 to March 1991. And these daily records, available for three months, tally perfectly with the corresponding monthly records.And then we have these periodical summaries of the monthly payments and receipts into quarterly, half yearly, three quarterly and annual summaries. These monthly summaries harmonise with these periodical summaries. And then we have this unprecedented slip of paper with regard to Advani. This document is headed Political Expenses (POE), and spans the period between April 1988 and March 1990.This statement unlike all other statements, uncharacteristically does not show the opening balance, list of receipts and list of payments. It also does not show the closing balance. There are several names on this list, which is an incomplete summary of some payments. Not' all payments. It is in this document that the name Advani appears. While all other names, and amounts against these names tally with the monthly, and periodical statements which are comprehensively available, Advani's name sticks out like a sore thumb because his name does not appear in the comprehensive monthly and periodical statements; therefore the amount mentioned against his name also does not tally with the accounts in these statements. Advani has been chargesheeted on the basis of this unusual paper.

Q 6. You just made the statement that all records which do not have Advani's name on them, tally with each other. Now there is this other document detailing political expenses, in which Advani's name also finds mention. Do these political expenses amounts tally with the other records?

Ans. No. Not in respect of Advani. In respect of most others, yes.

Q 7. How did Jain derive the money for these political expenses and how exactly did he utilise them?

Ans. As I told you before, Jain received 59 crores out of which he received 51.5 crores by 31st March 1991. And if you total all the payments made by Jain, he utilises all the 51.5 crores as political expenses given to politicians, as per his own records, without taking into account the amount supposedly paid to Advani. The opening balance and closing balance are available in the monthly and periodical statements. When these balances are examined they show that Jain DID NOT HAVE ANY MONEY TO PAY ADVANI out of the 51.5 crores. So that is why there is a very big question mark over this document and over the authenticity of the entry in the name of Advani.

Q 8. How far are Tamil Nadu politicians involved in the hawala case? We have been given to understand that some of Jayalalitha's close associates are involved in it. Please throw some light on it.

Ans. Hawala transactions other than the one involving Jain is an issue in itself. Now it is estimated that the total hawala transactions are of the order of 8 to 10 billion dollors a year. This is around thirty to thirty-five thousand crores of rupees. So we cannot go into the entire ramifications of it in this meeting. Every businessman is using the hawala machinery.

Q 9. You have mentioned that Sita Ram Kesari has passed on some amount to Jayalalitha. Can you say anything more on this issue?

Ans.I did not say this. Jain said it.(Laughter).

Q.Jain told you and you are telling us.

Ans. No. Jain told the CBI. I cannot throw any more light on this issue. The CBI was told by Jain that out of the 15 crores paid to his company by a Russian government company, he paid 10.5 crores to Lalit Suri meant for Rajiv Gandhi, two crores directly to Rajiv Gandhi and two crores to Sita Ram Kesari meant for Jayalalitha.

Q 10. (In Tamil). Instead of bemoaning the fact that several people have received money from the Jain brothers or that they are involved in the hawala scandal, why don't you tell us how to bring home to roost those who have used the hawala machinery to stash away money at home and abroad?

Ans. It was in this connection that I approached the Fairfax Investigating Agency in 1986. They told me that we will have to pay them 25% of the total money which we will recover with their help. The chief of Fairfax, Michael Hershman told me that this 25% constituted their fee. I passed on this information to two officials of the government of India. I told them that we ought to hire these people and entrust them with the task of flushing out these funds as we are not equipped to conduct such an investigation which would cost us much more than the 25% we would have to pay Fairfax. Bhure Lal and Vinod Pande asked me what would be the amount that we would be able to recover with the help of Fairfax. Fairfax replied that the amount would be close to 3 billion dollors. In those days, 3 billion dollors meant 4500 crore rupees. In today's context the same amount is valued at 13,500 crores. We gave them a letter of appointment and tried very hard to bring this money back into India.. It was then that the government forged a letter purported to have been written by Fairfax to me asking me to send important and secret government documents to them. And then I was arrested by the CBI on trumped up charges of espionage, and the effort to nail the people using the hawala and to bring the money back to India was successfully aborted.

Q 11. Sir, Jain is a very big businessman. He might have received crores of rupees for several reasons. Then why should he maintain a separate diary just for the hawala transactions? Is the diary genuine or is it cooked up just to bring the issue out into the open? I also think that the constitution should be suitably amended to ensure punishment for crime.

Ans. You see Jain maintained his business accounts through proper systems. But he probably asked his clerk J.K.Jain to maintain his black money transactions and that is in the diary. 1 do not think the diary is cooked up. 1 am convinced, based on my experience of records, that this diary is genuine. As regards amending the constitution for ensuring punishment for the corrupt, I would rather suggest total amnesty for the bribe giver so that we may nail the bribe taker. Nothing else needs to be done. If you give the person immunity under the anti-corruption law alone he could be nabbed under FERA or the income tax act. No! The only thing to do is give him total immunity so that once he reveals the whole truth, he is ensured protection from harrasment. This way nobody would dare accept money as bribe.

Q 12 We have not come hare to wash the dirty linen of any politician. What a person like me wants to know is, what is this hawala, why is it corrupt and how does it affect the common man. The political or the judicial angle may not be very relevant to the common man.

Ans. Hawala is an illegal transfer of money from outside to inside India and vice versa. Whenever money passes, something other than money also passes in consideration of it. Let us assume, you export goods outside India -it may be jewellery, cotton or steel. When businessmen export goods many of them usually under value it. That is, if the consignment of exported goods is worth 100 crores, the businessman will say it is worth only 75 crores. He will accept money openly to the tune of 75 crores and the remaining 25 crores he will stash it away in a swiss account or some other account. This amount will not be known to the Reserve Bank or the Income Tax department. Similarly when he imports goods, he will over invoice it. But this depends on the customs duty. If the customs duty is high, then he may not over invoice the goods because he will end up paying a very high customs duty. But if the customs duty is less then a businessman will over invoice. Which means if you have to pay the foreign supplier only one crore, you ask him to give you a bill for 1.5 crores. You pay him one crore and stash away the 50 lakhs already accounted for as payment, into a secret account. Smuggling also leads to illegal transfer of money. This has been going on- since the 1950s and the total amount transferred illegally, known as hawala,is of the order of 40 billion dollors from India. This is a conservative estimate. In fact when I was in Switzerland, some bankers told me that the largest amount of deposits •into their secret accounts was from India. This is one way that the hawala is being used. Another stream which uses the hawala are those who smuggle goods into India. They have to pay the money outside India for the goods they are going to smuggle into this country. Then there are those who want to remit money into India. When they remit it through the banks, they will only get the official rate of exchange. People who go abroad on employment, remit money outside the banking channels because the person who receives the money here will receive more than what the banks can give him. In the same way if A remits money here in rupees, his associate outside India will receive the specified dollors. When I went to Singapore, I saw a very big shop that belonged to a madrasi trader. He is a money changer; he openly accepts dollors and gives you rupees and vice versa. When A gives the hawala dealer dollors to remit money into India outside banking channels, he will telephone somebody in India. Yes, A has remitted dollors here, so hand over cash to A's brother. Now how do these transactions affect the common man? If Jain had brought in the 59 crores in terms of dollors,the foreign exchange reserves would have gone up by 22 million dollors. Because he took this by way of rupees in cash, the country lost foreign exchange to a similar tune. Through such transactions there is a rupee glut and consequently inadequate foreign exchange reserve. This in turn pushes up the value -of the dollor and the value of the rupee depreciates. These are the economic implications of the hawala, But today the discussion in the context of the Jain diaries is not economic but crime, corruption, politics and the legal dimension.

Q 13. Gurumurthy, what about Jain's statement to the Directorate of Enforcement under section 40 of FERA? And what about Mr.B.R. Jain's trip with the prime minister when he went to Korea? The only corroboration of Devi Lal's involvement in the hawala, according to the CBI, is that he took Jain with him on a foreign trip. But Mr. Narasimha Rao also took Jain with him when he went to Korea and that too when Jain was not recommended by FICCI or CII.Is this not a greater crime?

Ans. I must pay a tribute to the person who came and asked this question, (applause). He is Shri.K.G.Ramak-rishnan, a former member of the Planning Commission. He phones me everyday, he comes to my office and will climb up to the 4th floor on days when there is no lift. You know why? There is fire in the man (Thunderous applause). In 1975, when we fought the horrendous Emergency, he was one of our most inspiring people. He was never in party politics but he has never been out of politics. He sends his observations, the material he has procured from the press. And today, the two points that Shri. Ramakrishnan has made are very relevant. Jain became a leper, a political leper only from the 3rd of May, 1991. Till that date he was hobnobbing with most politicians, big and small. The PM's entourage to Korea contains a list of names recommended by CII and FIICI. Some names are recommended by the Industry ministry. But there was one name on that list not recommended by any of these institutions. The name of Jain.

(Interruption:!! has been denied. It has been denied by the Prime Minister himself).

Gurumurthy: The Prime Minister has been denying every­thing. (Howls of derisive laughter). More to the point, the Industry ministry, the CII and FIICI have not owned up Jain. Then who recommended his name?

(Interruption: He did not go with the PM).

Gurumurthy: He did go. B.RJain did go to Korea with Rao. It has not been denied. In fact Shenoy has meticulously explained through the columns of the Economic Times, that Jain went to Korea as a part of the PM's entourage. It may be denied but the list of names of those who went to Korea with the Prime Minister is available. The second point made by Shri Ramakrishnan is that S.K Jain has testified to all this to FERA. He refused to sign his statement to the CBI and so it is not admissible in court. So the PMO took a comfortable position. In the normal course of events such a statement would be the starting point of any investigation. It may not be proof but it is still the starting point to get at the truth.Shri. Ramakrishnan's point is, when Jain testified to FERA he also said that he had made the same statement to the CBI. This testimoney of Jain to FERA that the CBI already knew through him what he was telling them now, is evidence that can be admitted in court. This is an important point missed by most newspapers because this indicts the CBI for not starting investigation inspite of Jain's statement to them. I am saddened by the fact that the newspapers have missed informing the people about the gravity of this issue. It only goes to show that the ability of newspapers to reach out to people is limited but their ability to misinform is great.

Q14. What is the role of FERA in this scandal?

Ans.You see, Jain's diary shows that he received rupees in place of dollors as commission due to him. So there is no doubt that he has violated FERA regulations. There are also ministers who have accepted money from Jain in rupees instead of dollors. These ministers, according to the diary, are ArifMohammad Khan, Balram Jhakar, V.C.ShukIa, Yashwant Sinha, N.D.Tiwari and others. Even if these ministers had received it as dollors, it is still violation of FERA because Jain is not a bank. So some ministers and some bureaucrats are guilty of FERA violation. The term hawala therefore should be limited only to these offences. We cannot say that all those names present in the Jain diary are guilty of having used the hawala machinery. In the case of Madhav Rao Scindia, Advani or even Arjun Singh for instance, there is no hawala there. And yet even newspapers report in total ignorance: Madhav Rao Scindia, Advani and Arjun Singh implicated in hawala scandal. But is this not a great injustice to these men? Which is why I said, newspapers instead of being educators are today peddling disinformation and lies.

Q 15. Sir, my only question is: Is there no way the public can play a role with the help of the judiciary in making the contents of the diary public?

Ans. The Jain Ji.iry is there for the asking in the streets of Delhi.(Laughter). But the diary is written in the mystic language of the Rishis.(Laughter again). For instance, it says 'BL'. Bhajan Lal says it is Bansi Lal. (Uprorious laughter). Until Jain turns approver we may never know if it is Bhajan Lal or Bansi Lal. By making this diary public you can do nothing.

Q 16. You say J.K.Jain wrote the diary. Is Advani's name written by Jain himself or somebody else?

Ans. The diary is written by J.K.Jain,an employee of S.K.Jain. Advani's name does not figure in the diary that J.K.Jain wrote.

Q 17. Sir, I was at a meeting in Trivandrum listening to a talk by Mr.T.N.Seshan. He was talking about the necessity to cleanse politics and how this can be done by the intelligentsia entering the political fray. I will ask you the same question that I asked him. Every sinner has a future, every saint has a past. Which one are you?

Ans.I am neither a saint nor a sinner. As for the intelligentsia entering politics,! feel the intelligentsia has to first scrutinise politics, political parties and politicians and form some opinion. They have this duty towards the nation. Politics does not mean party politics. Even when Rajaji's days of party politics were over, he would address a small group of people, say 150 of them belonging to the Lakshmipuram Young Men's association. What he had to say would be avidly listened to by this small group of people. The next day, the newspapers would carry a faithful reproduction of his talk and thousands would be guided by it. We require such people today. Not that India cannot produce them but as long as we utilise all the 24 hours at our disposal to make money and more money, the possibility of such people emerging from our midst seems remote if not impossible today.

I. Alleged payment of Rs. 35 lacs - the core of the charge - and in fact the only charge.

The Charge sheet rests on the allegation that Advani, was paid Rs. 35 Lakhs during April 1988 to March 1990 when he was public servant.

It expressly admits that the other alleged payment, Rs. 25 lacs, was made in April 1991 when he was not a public servant.

Therefore, the allegation of payment of Rs.25 lacs is not relevant for the charge against Advani in view of the above admission in the charge.

Therefore the alleged payment of Rs. 35 lacs constitutes the core of the charge - and, intact, the only Charge.

II. The prosecution ought to establish that the amount was actually received by Advani

While framing the charge, the prosecution ought to establish that if the evidence cited is proved and accepted, that would prove that Advani in fact, received the amount alleged to have been paid. This is the proof Section 20 of the Prevention of Corruption Act 1988 stipulates to shift the onus to the accused to establish his innocence. The prosecution must'ultimately prove by evidence not only that the alleged amount was paid to and received by Advani, it must also prove that he accepted it with a consenting mind.

If the prosecution does not cite evidence, which, if accepted in the trial will prove that the said amount of Rs. 35 lakhs was in fact paid to Advani and that he has accepted the same, the prosecution will fail.

III. Documentary Evidence relied upon by the prosecution and their contents:

(a) The documentary evidence adduced by the prosecution in support of the charge are as under:

Two small note books MR 69/91 and MR 70/91 Two diaries MR 71/91 and MR 68/91 Two files MR 72/91 and MR 73/91.

While the small note books and files contain broken details or summarised payments, the diaries (particularly diary MR 71/91) contain continuous month to month receipts and payments.

(b) The slip pads - small note Books MR 70/91 and MR 69/91

Of the two small note books referred to as —slip pads", MR 70/91 principally contains date wise details of some payments made to certain persons in July and August (1990) and MR 69/91 mainly contains date wise details of payments made in December (1990).

(c) The Diaries MR 71/91 and MR 68/91

(i) The first of the two Diaries (namely MR 71/91) contains the complete, summarised and month wise receipts and payments from February 1988 to March 1991 and also contains details of the receipts for April 1991, but, only partial details of payments - with the summary of the receipts and payments for April 91 being entered in unfinished form.

(ii) The second Diary (Mr 68/91) contains partial details of receipts and payments for January and February 91, and full details of the receipts and payments for March 91 (which, incidentally completely tallies with the details of the receipts and payments for March 91 contained in the other diary MR 71/91).

This diary also contains details of the weekly receipts and payments for the period 1st to 14th April 91. Thus, the first Diary (MR 71/91) contains the complete details of monthwise receipts and payments up to 31.3.91 and the second one (MR 68/91) has the full details of receipts and payments from 1.4.91 to 14.4.91 and both overlap to some extent for the period January to March 91.

The Files Mr 72/91 and MR 73/91

The files contain the periodical summary of the receipts and payments for the period from April 1988 to March 1991 and the periodical summaries found in the file are as under: These are quarterly, half-yearly, three-quarterly and annual summaries of receipts and payments.

S.No Period of the summary Months Page and File
(i) Apr 1988 to Mar 1989 12 P 33 of Mr 72/91
(ii) Apr 1989 to Dec 1989 9 P 29/30 of Mr 72/91
(iii) Jan 1990 to Mar  1990 3 P 23 of Mr 73/91
(iv) Apr 1990 to Sep  1990 6 P 21 of Mr 73/91
(v) Oct 1990 to Dec 1990 3 P 22 of Mr 73/91
(vi) Apr 1990 to Dec 1990 9 P 24/25 of Mr 73/91
(vii) Apr 1990 to Mar 1991 12 P 16/17 of Mr 73/91

IV. The first diary (MR 71/91) which is the most vital document, does not show any payment to Advani during the entire 38 months from February 88 to March 91. This completely destroys the allegation of the prosecution and proves that in law and in fact no payment was made to Advani

An analysis of the first diary MR 71/91 shockingly reveals that from February 88 to March 91 there was —NO ENTRY OF PAYMENT IN THE NAME ADVANI" at all, much less any payment of Rs. 35 lacs as alleged. And, in fact, the name Advani does not all figure in the first diary throughout the entire period of February 88 to March 91.

V. The name Advani is also not found in any of the Seven periodical summaries for the period from 1.4.88 to 31.3.91

All analysis of the seven periodical summaries of receipts and payments, covering the entire period of April 88 to March 91 again shockingly reveals that the name Advani or the alleged amount of Rs. 35 lacs does not figure in any of the summaries during the entire period.

(1) The alleged payment of Rs. 35 lacs is clearly unsupported, unsubstantiated, uncorroborated - and even contradicted by evidence:

• it does not figure in the month to month receipts and payments entered in the Diary from February 1988 to March 1990 and even up to March 91 (MR 71/91 Sheets 2 to 7)

• it does not figure in the twelve-month receipts and payments summary for April 1988 to March 1989 (file MR 72/91 Page 33)

• it does not figure in the 9-month receipts and payments summary for the period April 1989 to December 1989. (File MR 72/91 Pages 29 & 30).

_ it does not figure in the 3-month receipts and payments summary for January to March 1990. (File MR 73/91 Page 23).

it does not figure in the 6-month receipts and payments summary for April 90 to September 90. (File MR 73/91 Page 21).

it does not figure in the 3-month receipts and payments summary for October 90 to December 90. (File MR 73/91 Page 23).

it does not figure in the 9-month summary receipts and payments for April. 90 to December 90. (File MR 73/91 Pages 24/35).

- it does not figure in the 12-month receipts and payments summary for April 90 to March 91. (File MR 73/91 Pages 16/17)

- it does not figure in the two slip pads (MR 69/91 and 70/91) in which also as already said certain date-wise payments are recorded for July, August and December 1990. It is therefore evident that:

- the first two documents (slip Pads I and II) contain date wise entries of receipts and payments for July and August 90 (Slip pad I) and for December 90 (Slip Pad II).

- the third document (Diary I) contains month wise summary of receipts and payments for 38 months from February 1988 to March 1991.

(3) The Daily entries (in MR 70/91 and MR 69/91) tally with the monthly entries in Diary I (MR 71/91) and the seven periodical summaries of receipts and payments tally with the entries in Diary I. There is complete harmony between Diary I and the periodical summary of receipts and payments for the period April 88 to March 91.

(4) The Diary 71/91 is the Source of all periodical summary of receipts and payments • the periodical summaries have been prepared only from the Diary

It is obvious that the seven periodical summaries for the period from April 1988 to March 1991 have been prepared only from the diary 71/91. The periodical summaries tally with the diary in every respect as shown hereunder.

(i) The opening balance and closing balances of cash in hand in the Diary and in the periodical statements tally.

(ii) The payments to outside parties mentioned in diary when aggregated tally with the figure in the periodical statements.

(iii) The code names in the Diary and in the periodical statements are identical.

(iv) The receipts from outside parties mentioned in the diary when aggregated tallies with the figures mentioned in the periodical statement.

(v) The intra Jain group payment and receipts in the diary when netted tally with the figures mentioned in the periodical statement.

Thus, there is complete harmony and agreement between the Diary 71/91 and the periodical statement in respect of all receipts and payments for the entire period 1.4.88 to 31.3.91 - within which period only the alleged payment during April 88 to March 90 falls - but neither the Diary not the seven periodical statements show any payment to Advani during that period namely, April 88 to March 90 or at any time during February 88 to March 91.

VII. The document (at Page 8 of File MR 72/91( which the prosecution cites at Page 16 of the charge sheet to allege payment of Rs. 35 lacs to —Advani" is neither a summary of receipts and payments, nor does it harmonies with the Diary Mr 71/91 or with the periodical summary of receipts and payments for April 1988 to March 1990.

The prosecution relies not on the daily cash receipts and payments in the two slip pads (MR 70/91 and MR 69/91) nor on the monthly summary of cash receipts and payments for April 88 to March 90, in Diary I (MR 71/91), or on the periodical summary of receipts and payments for April 88 to March 89 (Page 33 of File MR 72/91) or for January 90 to March 90 (Page 23 of File MR 73/91) which harmonies, tally and corroborate with one another.

The prosecution relies precisely on an isolated document which does not tally with any other document. Diary or any one of the seven summaries of receipts and payments. This document is at page B of File MR 72/91 which contains a statement of —POE" from April 88 to March 90 in which the name —Advani" figures and against which 35.00 is written.

The unusual features of the document at page 8 of MR 72/91 are:

First, it is not a summary of receipts and payments for the period April 88 to March 90 unlike the seven summaries of receipts and payments during April 88 to March 91.

Second,it is a statement of certain payments, and that too not the entire payment during the 24 months.

Third, excepting for April 88 to March 90, such statement does not exist for any other period.

Fourth, when the details of all payments including the alleged political payments exists in the receipts and payments summaries for April 88 to March 89, April 89 to December 89 and January 90 to March 90 the sudden appearance of the alleged statement of POE from April 89 to march 90, especially as it contains the name Advani, which is not found in the Diary or in the periodical receipts and payments, appears to be exceptional, irregular and unusual.

Fifth, whereas every other statement of receipt and payment tallies with the critical document namely the Diary, the impugned document at Page 8 of MR 72/91 does not tally with the Diary MR 71/91 or with the three periodical statements.

Sixth, there is not explanation as to why the name Advani appears in the impugned statement when it does not appear in any receipts and payments summary relating to the same period.

VIII. The virtues of the different records claimed by the prosecution in the charge sheet as mutually corroborating and being mutually continuous and consistent is limited to the Diary MR 71/91 and the seven periodical summaries during April 88 to March 91 • and does not apply to the isolated Page 8 of MR 72/91.

Therefore what evidentiary value the prosecutions claims in favour of the Diary and the summary of receipts and payments cannot - and indeed does not - apply to the listed payments in page 8 of MR 72/91.

X. If all receipts as given in the charge sheet for the period from February 88 to March 91 and payments for the same period February 88 to March 91 as per the diary (MR 71/91) are accounted -Jains could not have paid a single rupee to —Advani" - as all receipts during the said period are exhausted by the payments during the said period listed in the diary.

The receipts and payments as summarised from the month to month diary are as under:

(a) Receipts from February 88 to April 91:
As per charge Sheet  59.12 Crores
Opening balance as on 1.4.88 wrongly accounted in the charge sheet as cash received. 
0.02 crores
As per Diary  59.10 Crores

Therefore the disposable funds available with the Jain's as per the diary MR 71/91 and as per the charge sheet tallies.

(b) Receipts and payments up to 31.3.91 (the transaction of receipt and payment for the month of April 91 are excluded because the details of payment for that month are not fully recorded):

As per charge sheet

(Rs. Crores) 

As per Diary 71/91

(Rs. Crores) 

Receipts from Feb 88 to April 91       59.12  59.10

Opening balance in April 88 of 0.02 taken as cash received in charge sheet.






Receipts for April 91 





Payments as per diary 71/91 (Sheets 1 to 11) up to 31.3.91. (The payments in the diary do not include the alleged payment of Rs. 35 lacs to Advani)



Balance as on 31.3.91         



Totalling error in July 89 at Page 6 of Diary 71/91 resulting in lower closing balance in diary.             

closing balance as on 31.3.91 as per diary at Page 11 & back of Mr 71/91                               

Correct closing Balance  1.67  1.67

Thus,the disposable receipts mentioned in the charge sheet at page 5 for the period February 88 to April 91 (Rs. 59.12 Crores) as reduced by the calculation error (of Rs.2 lacs and the receipts for April (of Rs. 5.92 Crores) yields a disposable receipt of Rs. 53.18 Crores up to 31.3.91. This is exactly tallies with the receipt of Rs. 53.18 Crores consolidated from the monthly receipts in the diary MR 71/91 from February 88\to March 91. If the payments as per diary up to 31.3.91 (which do not show any payment to Advani) and the closing bahince as on 31.3.91 are added, the aggregate equals the receipts up to 31.3.91 - leaving not a single rupee available for any other payment during February 1988 to March 1991 other then the payments mentioned in tlie Diary. Since all receipts as per the charge sheet is exhausted by payments (and the alleged payment of Rs. 35 lacs to —Advani" being non-existent in they Diary) and the closing balance as on 31.3.91 - there is clear evidence that there was - and could be - no such payment to —Advani" or any one else.

XV. The charge sheet suppresses vital facts and contains incorrect allegations and representations on the state of the record

The charge sheet suppresses important and vital facts which will make the prosecution groundless if disclosed and the charge sheet also makes generalised allegations in respect of all accused which do not apply to Advani and intact, in Advani's case, such allegations amount to false and incorrect statements as shown below:

(a) The prosecution has suppressed and withheld the fact - the vital fact - that the name Advani or any payment of Rs. 35 lacs does not figure in the Diary MR 71/91 during the period April 88 to March 90 when it was allegedly paid.

(b) The prosecution has also suppressed and withheld the vital fact that in the three annual summaries at page 33, 29 and 30 of MR 72/91 and at Page 23 of MR 73/91 for the period April 88 to March 90 also the name Advani does not find a place.

(c) The prosecution has claimed at page 8 and 12 of the charge sheet that all the payments mentioned in the files tally and corroborate with the payments in the Diary. It is clearly a false statement as the entry Advani in the file MR 72/91 at page 8 is not corroborated by and does not tally with the entries in the Diary Mr 71/91 and the summaries of receipts and payments in files MR 72/91 and MR 73/91.

The suppression and false averments in the charge sheet shows the determination to fix Advani - and is consistent with the case of the accused that the prosecution filed against him was a politically motivated exercise.

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