J.D. Kapoor, J.

1. The petitioners, M/s. A.B. Bofors, S.P.Hinduja, G.P.Hinduja and P.P. Hinduja, have through these petitions challenged the impugned order dated 14.11.2002 passed by the learned Special Judge whereby he has charged them for having entered into criminal conspiracy with the public servants late Shri Rajiv Gandhi, Shri S.K. Bhatnagar, Win Chadha, Ottavio Quattrocchi and Bofors President Matin Ardbo to cheat the Government of India inasmuch as that they had agreed to do or caused to be done illegal acts or acts which are legal by illegal means to cause wrongful loss to the Government of India to the tune of SEK 8410.66 million i.e. Rupees 64 crores for the award of the contract for supply of 410 guns of 155 mm and by deceiving the Government of India by fraudulent representation that the said gun and gun system was better in quality and cheaper in price and that no agent or middlemen would be used in the negotiations for the contract and they would reduce the price of the gun to the extent they would otherwise pay to their agents by way of commission and thereby cheated the Government of India. These offences are punishable under Sections 120-B/420, IPC.

2. The public servants Rajiv Gandhi and S.K.Bhatnagar were also charged for having committed criminal misconduct by abusing their official position so as to gain pecuniary advantages to all of them and having taken illegal gratification for awarding the contract in favour of Bofors. Hinduja Brothers, Bofors, Martin Ardbo and Win Chadha have also been charged for having abetted the public servants to commit such offences. These offences are punishable under Section 5(2) read with Section 5(1)(d) of Prevention of Corruption Act, 1947 and Section 161, IPC and Section 165A, IPC. AB Bofors has also been charged for the offence punishable under Section 465, IPC for having dishonestly and fraudulently made false documents in the form of agreements between AB Bofors and said agents agreeing to pay money in instalments.

3. Observations of the learned Special Judge as to charge of public servants having taken illegal gratification/bribe by awarding the contract to Bofors need to be referred as Preface to this judgment. These are:

85. ......no evidence has been collected to show that Indian politicians and/or defence personnel have themselves actually received pay-offs. The prosecution case has been considerably diluted than originally projected. The allegations in the FIR are bribery, criminal conspiracy, cheating, criminal breach of trust and forgery, whereas the charge-sheet shows some of the offences only (order dated 29th August, 2002).

4. Even to the pointed query made by this Court as to evidence showing the receipt of bribe money, if any, by the public servants either themselves or through the agents viz. Hindujas, Quattrocchi and Win Chadha, Mr. Mukul Rohtagi, learned Additional Solicitor General of India appearing for CBI, candidly and fairly said that till date there was none but CBI is on the trail to gather such evidence. This frank concession goes to the credit of Mr. Rohtagi who though during arguments heavily relied upon the circumstances pointing to the misconduct of public servants by abusing their official position and taking illegal gratification in awarding the contract to Bofors so as to gain pecuniary advantage to Bofors and its agents.

5. It is strange that the learned Special Judge considered the allegations contained in the FIR as substantive evidence whereas the FIR is only meant for setting the investigating machinery into motion. However merely on the allegations in the FIR unless supported and corroborated by any material or evidence, documentary, circumstantial or oral, neither charges for penal offences can be framed nor conviction can be based.

6. Result of thirteen long years of investigation by the CBI, a premier Investigating Agency of the country and three years investigative journalism during which period large number of officers of CBI hopped to foreign countries every now and then to collect the evidence against public servants but returned empty handed as till date there is no evidence to show that public servants had taken bribe in awarding the contract of guns to M/s. A.B. Bofors & Co. either themselves or through Bofors agents though it has succeeded in tracing the Swiss accounts of Commission Agents employed by M/s. A.B. Bofors wherein illegal payments received by them from Bofors as commission were deposited.

7. This case is a nefarious example which manifestly demonstrates how the trial and justice by media can cause irreparable, irreversible and incalculable harm to the reputation of a person and shunning of his family, relatives and friends by the society. He is ostracised, humiliated and convicted without trial. All this puts at grave risk due administration of justice.

8. It is common knowledge that such trials and investigative journalism and publicity of pre-mature, half-baked or even presumptive facets of investigation either by the media itself or at the instance of Investigating Agency has almost become a daily occurrence whether by electronic media, radio or press. They chase some wrong-doer, publish material about him little realizing the peril it may cause as it involves substantial risk to the fairness of the trial. Unfortunately we are getting used to it.

9. Latest trend of police or CBI or Investigating Agency encouraging publicity by holding press conference and accompanying journalists and television crew during investigation of a crime needs to be stopped as it creates risk of prejudice to the accused. After hogging publicity and holding the person guilty in the eyes of public, police and CBI go into soporofic slumber and take years in filing the charge sheet and thereafter several years are taken in the trial.

10. It is said and to great extent correctly that through media publicity those who know about the incident may come forward with information, it prevents perjury by placing witnesses under public gaze and it reduces crime through the public expression of disapproval for crime and last but not the least it promotes the public discussion of important issues. All this is done in the interest of freedom of communication and right of information little realizing that right to a fair trial is equally valuable. Such a right has been emphatically recognized by the European Court of Human Rights.

Again it cannot be excluded that the public becoming accustomed to the regular spectacle of pseudo trials in the news media might in the long run have nefarious consequences for the acceptance of the Courts as the proper forum for the settlement of legal disputes.

11. There is nothing more incumbent upon Courts of justice than to preserve their proceedings from being misrepresented than to prejudice the minds of the public against persons concerned before the cause is finally heard. The streams of justice have to be kept clear and pure. The parties have to proceed with safety both to themselves and their character.

12. The fairness of trial is of paramount importance as without such protection there would be trial by media which no civilised society can and should tolerate. The functions of the Court in the civilised society cannot be usurped by any other authority. I feel tempted to quote the words of wisdom of Chief Justice Lord Taylor as to the impact upon the victim of a press campaign.

We would like to stress that, whilst the press are the guardians of the public interest, to pursue a campaign of vilification of someone who has been before the Court, in a way which causes hate mail to be sent, which causes his family to be under the need to move house, which causes his children to be shunned by other children in the neighbourhood, is doing no public service. Furthermore, if it is intended to bring pressure to bear on the Courts, then it is wholly misguided.

[(Attorney Generals reference (1995) 16 Cr.App.R(5)785]

13. This is one of such cases where public servants who are no more have met somewhat similar fate being victim of trial by media. They have already been condemned and convicted in the eyes of public. Recent instance of such a trial is of Daler Mehandi whose discharge is being sought few days after his humiliation and pseudo trial through media as they have not been able to find the evidence sufficient even for filing the charge-sheet. Does such trials amount to public service is a question to be introspected by the media itself.

14. Here is a gun known as Bofors Gun that created political explosion before it could explode in the battle-field and prove its credentials. Explosion was so powerful that it engulfed the highest political functionary of India, late Mr. Rajiv Gandhi, the then Prime Minister of the country. Another casualty was late Mr. S.K. Bhatnagar, the then Defence Secretary of Government of India. Main culprits were its manufacturer M/s. AB Bofors (in short Bofors), its Chairman Martin Ardbo and agents viz. Win Chadha, Hinduja brothers and Quattrocchi, an Italian national, whose services Bofors was alleged to have availed in procuring the contract of gun in its favour.

15. Smoke emitted from the chimney of its land viz. Sweden where its Radio broke the news that the Bofors had procured the largest ever contract of the gun in the world by bribing the purchaser countrys political big-wigs by using the clout of its agents and middlemen and their nearness to the powers that be.

16. The news set the political and public fora at fire. Investigative journalism reached its peak. There was a deafening sound of gun-shots fired by press, public and political parties. Though guns were silenced but only like a lull before the storm by appointment of a Joint Parliamentary Committee (in short JPC) to enquire into the matter. JPC is an Apex Parliamentary Body for inquiring into controversial matter of national importance. Though JPC tried to clear the fog vis-a-vis public servants but till date the smoke continues emitting from its smoulders. So much so the word Bofors derived from the name of its manufacturing company M/s. A.B. Bofors became a sort of voodoo for it, as it has rechristened itself as Kartongem Kemi Och Forvaltning AB.

17. All that happened in 1987. We are now in 2003. Its smoke is still in the air though to its good luck, the gun has proved its credentials and effectiveness very recently in the battle-field of Kargil warfare and saved lives of many young soldiers because of its peculiar feature of shoot and scoot. Unfortunately the public servants viz. Sh. Rajiv Gandhi, S.K.Bhatnagar are no more in this world.

18. Let us see what was that which generated too much heat but without light so far as public servants are concerned. Facts, as per order are:

19. Some time in the year 1977, the Indian Army considered a need for introduction of medium range artillery to be inducted in the Indian Army. The Ministry of Defence, Government of India approved in August 1980 a proposal forwarded by Army Headquarters recommending, inter alia, the introduction of 155 mm caliber medium guns both towed and self-propelled to meet its defence operational requirements. The choice for obtaining the said gun system/guns was short-listed in December 1982 to (1) M/S Sofma of France, (2) M/s. A.B. Bofors of Sweden (briefly called Bofors), (3) M/s. International Military Services of U.K and (4) M/s.Voest Alpine of Austria. Bofors had given the undertakingvide letter dated 10.3.1986 that they will have no Indian Agents for the purpose of this contract and promised to reduce the price to the extent of commission they even otherwise would have paid. Finally, the order was placed by the Government of India with Bofors on March 24, 1986 for the supply of 410 numbers (400 plus 10 free) of 155 mm Field Howitzer 77-B gun system/spare gunsvide contract No. 6(9)/84/D (GS-IV) for a total amount of SEK 8410.66 million (Swedish Kroners) (equivalent to about Rs. 1437.72 crores or Rs. 1477.2 millions). The related contract for supplying the gun package (towed) and other related agreements/contracts were concluded and signed on March 24, 1986 by M/s. A.B. Bofors, the then Defence Secretary Shri S.K. Bhatnagar signed the aforesaid contract for and on behalf of the President of India and by Martin Ardbo, President AB Bofors and also by Anders G Carlberg, President and Chief Executive Officer of Nobel Industries for and on behalf of M/s. Bofors.

20. As per the terms of payments stipulated in the contract 20% of the total amount of the contract (with the exclusion of any amount related to services) was to be paid by the buyer i.e., Government of India, in advance, within 30 days from presentation by the seller, i.e. M/s. Bofors, of an advance payment guarantee. On receipt of the advance payment guarantee from M/s. Bofors on April 7, 1986, the advance payment of SEK-1, 682, 132, 196.80 (Rs. 296.15 crore), equivalent to 20% of the contract value, was paid to M/s. Bofors on May 2, 1986.

21. On April 16, 1987 i.e. over a year after the said contract, when the advance money had been paid by the Government of India as per the terms of the contract and after delivery of the gun system had started, a programme Dagens Eko of Swedish Radio, came out with a story on the subject. According to it, the Bofors had managed to obtain the contract from the Government of India, among other things, due to the fact that local agents had been paid large amount in bribes. It stated that the agent had helped Bofors with local contacts and support within the Indian Military authorities, within the bureaucracy and within the Prime Minister Gandhis Congress Party. It also mentioned that the payments to the agents were carried through by transaction to secret bank account in Switzerland. The national as well as international media, thereafter, picked up the story and followed it up with several news items. On April 21, 1987, the Government of India made a formal request to the Government of Sweden for an investigation into the allegations. The Swedish Government ordered an inquiry by the Swedish National Audit Bureau (SNAB). The SNAB submitted its report. However, certain material portions of the report were withheld from the Government of India.

22. On 28th of August, 1987, JPC was constituted inter alia to ascertain the identity of the persons who received, and the purpose for which they received, payments of SEK 170-250 million, SEK 29.5 million and SEK 2.5 million from Bofors.

23. The JPC submitted its report on April 22, 1988. The report inter alia concluded that there is no evidence to establish that the Bofors payments totalling SEK 319.4 million involved a violation of any Indian law.

24. Simultaneously, the Comptroller & Auditor General of India (CAG) was also carrying out its own independent audit into the Contract. The CAG submitted its report to both the Houses of Parliament in July 1988.

25. Despite JPC report, allegations of malpractices in the deal with Bofors, payments of kickbacks and receipt of illegal gratification were persistently reiterated and the matter was relently agitated. Meanwhile, there was a change of Government. In the aforesaid circumstances, the Superintendent of Police, CBI/DSP/ACU-IV, New Delhi registered a first information report on January 22, 1990 in crime No. RCI(a)/90/ACU-IV under Section 120-B read with Sections 161, 162, 163, 164 and 165A of the Indian Penal Code read with Sections 5(2), 5(1)(d) and 5(2), 5(1)(c) of the Prevention of Corruption Act, 1947 read with Sections 409, 420, 468 and 471 of the Indian Penal Code against 14 accused including Martin Ardbo, Win Chadha and G.P. Hinduja. The rest of the 11 accused are stated in general as directors/employees/holders/beneficiaries of account code and public servants of the Government of India.

26. The preface of the first information report showed that the case was registered on the basis of reliable information received from certain sources, certain facts and circumstances that have become available, through media reports dated June 1, 1987 of the Swedish National Audit Bureau, certain facts contained in the report dated April 22, 1988 of the Joint Parliamentary Committee (JPC) and the report dated April 1988 of the Comptroller and Auditor General of India (CAG). The FIR gave a detailed sequence of the events relating to the purchase of guns from M/s. A.B. Bofors, Sweden and the related agreements entered thereupon in violation of the Governments policy i.e. not to involve any agent and the existing law of this land.

27. In the first week of February 1990, the CBI moved an application before the Special Judge, CBI requesting him to issue a letter rogatory to Switzerland for getting the necessary assistance so that investigation can be conducted in Switzerland and important and relevant evidence is collected. The learned Special Judgevide his order dated 5.2.1990 allowed the said application. The said letter rogatory was however, sent back by the order of the Cantonal Court of Geneva for compliance of certain procedural formalities.

28. In execution of the letter rogatory, the first set of documents was received by the CBI in December 1990 and the second set of documents was received in January 1997 from the Swiss authority. A letter rogatory was issued to the competent authority, Government of Luxemburg on 7th November, 1997 which was executed and documents made available to the CBI on 31st December, 1999. Another letter rogatory was issued on 4th March, 1999 to the competent Judicial authority in Austria. The documents were also collected by the CBI on 31.12.1999 in execution of the said letter rogatory. Another set of documents was received by the CBI on 17.10.2000. Another letter rogatory was issued on 8.12.1998 to the competent judicial authority in the Confederation of Switzerland and in execution of the said letter rogatory the first set of documents was handed over by the Swiss authorities to the CBI on 2.6.2000 and the second set of documents were received by the CBI on 4.10.2000.

29. On the basis of evidence collected by the CBI, the first charge-sheet was filed on 22.10.1999. During the course of investigation, a set of documents was received in December, 1999 from the Swiss Authorities in execution of the letter rogatory dated February 7, 1990. These documents have revealed that, besides payments made by M/s. Bofors to M/s. Svenska Inc./W.N.Chadha and M/s. AE Services Ltd./Ottavio Quattrocchi, payments were also made by M/s. AB Bofors to M/s. Mc Intyre Corporation to the tune of SEK 800, 797, 709.92 during the period May 1986 to December 1986. This Company was a Panamanian company registered in Panama on February 14, 1986.

30. Thus the investigation revealed that payments to the tune of SEK 80.80 million were also made by M/s. AB Bofors to S.P.Hinduja, G.P. Hinduja and P.P. Hinduja through M/s. Mc Intyre Corpn. besides moneys paid to Win Chadha and Quattrocchi.

31. Interestingly the CBI did not file the charge-sheet for the offences punishable under Sections 161 and 165A which meant that the public servants had taken gratification other than the legal remuneration while awarding the contract in favour of Bofors and further that the petitioners namely Bofors, Hindujas, Quattrocchi and for that purpose Win Chadha had abetted the commission of the said offence. The prosecution even did not seek sanction for prosecution of the public servants for these offences. It was nowhere alleged by the prosecution even remotely that payment made by AB Bofors by way of commission constituted a bribe to the public servants.

32. The case of the CBI was that payment of commission by AB Bofors constituted a circumstance to show the existence of agents/ middlemen which was contrary to the declaration of AB Bofors that there would be no agents and that it was also contrary to the policy of the Government of India that there would be no agents or middlemen in negotiating the award of the contract and further that AB Bofors had given the undertaking that they would reduce the price of the gun corresponding to the commission which they otherwise would have paid.

33. It is argued and rightly that in spite of this the learned Special Judge took upon himself to frame charges not only against the public servants who are no more but also the charges against petitioners for having abetted these offences which are strictly applicable to public servants without any material or evidence and merely on presumption and imagination.

34. As per the policy of the Government of India which precluded middlemen/agents in the deal, no commissions were to be paid by M/s. Bofors in connection with the contract. Thus, according to CBI in pursuance of the criminal conspiracy, the petitioners A.B. Bofors, Hindujas and for that purpose Win Chadha and Quattrocchi dishonestly led the government to believe that there were no agents and induced the Government to part with an amount of SEK 8410.66 million which included an amount of SEK 323.42 million (SEK 242.62 million + SEK 80.80 million), which eventually was passed on by M/s. Bofors to its aforesaid agents. The Government of India was thus cheated to the extent of the commission amount and was put to a wrongful loss.

35. CBI has relied upon events, proceedings and documents and statements of the Government functionaries of the day, particularly the then Finance Minister Shri V.P. Singh, Home Minister Arun Nehru and Defence Minister Arjun Singh and one Mr. Oza, the then Ambassador of India in Switzerland to show the undue interest as well as haste shown by late Rajiv Gandhi in rushing through the award of contract in favour of AB Bofors presumably at the instance of and in conspiracy with Mr. Quattrocchi, a family friend who had uninterrupted access to PM House as he was to gain immensely in terms of commission as Bofors had set the dead line for the award of the contract.

36. Induction of Mr. Quatrocchi at later stage by AB Bofors as per prosecution shows the ulterior motives and extraneous consideration which guided Mr. Gandhi and Mr. Bhatnagar to award the contract in favour of Bofors by bulldozing the process of selection by way of even not giving the opportunity to the competitive contender Sofma to come up with the proposal for reduction of the price. Large number of documents have been relied upon which prosecution collected during investigation viz. the details of payments made by Bofors to Hindujas, Win Chadha and Quattrocchi from time-to-time as commission for award of contract, details of which were supplied by Swiss authorities as and when sought by CBI through letter rogatories.

37. The contentions raised by Mr. Mukul Rohtagi when summed up are like this:

(i) To achieve one big design of awarding contract to Bofors everybody was acting differently in his own way but the conspiracy was to get the award either by way of using their contacts, or by way of giving commission to the agents who in turn used their influence over the public servants or by way of bribing them. So it was a big conspiracy designed to win the contract.

(ii) Both Mr. Rajiv Gandhi and Mr. Bhatnagar created circumstances under which the Bofors agreement was rushed through with undue haste. The claim of competing contender namely Sofma for reduction of the price was brushed aside and picture was presented by them by abusing their official position that the best gun is Bofors and that too the cheapest, which it was not. So far as the quality of Bofors gun is concerned it may not be of relevance but so far as the representation of the price of Bofors gun being cheapest is concerned it was misrepresentation and was made with ulterior motives.

(iii) Public servants selected it and they were aware that there is conspiracy with other individuals and they were in fact part of the conspiracy themselves, along with other individuals, Indians or foreigners to achieve the object of Bofors being sold to India and this could not have been possible unless there was some deal between the Bofors and the public servants. It was actually a part of a grand dubious design between the Indian agents, foreigners (Quattrocchi) and the public servants.

(iv) As a matter of fact, it all started with Quattrocchis visit abroad when he came to know that exercise was being done by the Government for purchase of a gun and Bofors was one of the competitors and he opened an account in the name of AE Services. He approached the Bofors people and assured them that he would get them the contract and in case he succeeds in getting them the contract by 31st March, 1986 he would charge 3% commission to which Bofors agreed. It was in pursuance to this that everything was done in feverish haste because of the deadline and so much so even the offer of Sofma for reduced price immediately after the letter of intent was issued was not considered, and rejected. This could not have been possible unless the bribery part was involved. Contract was of open-ended nature.

(v) Apart from this haste, the very fact that on the next day the Prime Minister Mr. Rajiv Gandhi was to go to Sweden was that he was going there with predetermined decision in favour of Bofors shows that some kind of consideration or illegal gratification by Bofors was made through their agents as S.K. Bhatnagar got the file cleared in favour of Bofors in one day though so many functionaries were involved in the decision. Element of illegal gratification or misuse of official position is not only inferrable but ingredient of strong suspicion surfaces when it is further viewed in the post contract events.

(vi) When the Swedish radio broke out the news that money has been paid to procure the contract by Bofors and the names were not coming out, the then Chief of Army Staff, Mr. Sunderjee on 13th June 1987 by a written note suggested that Bofors contract may be cancelled. But Mr. Bhatnagar returned the note to the Army Chief and stuck to his earlier view by his subsequent note dated 15th July, 1987.

(vii) Furthermore, in the draft note prepared by Sh. N.N. Vohra, Additional Secretary for the Cabinet, the views of the Army Chief were specifically mentioned. But Mr. Bhatnagar deleted the same in his letter dated 27th July, 1987 sent to the PMO stating that cancellation of the contract would be premature, financially inviable and adverse to the security scenario.

(viii) Further that Mr. Gandhi also took the decision on 4.7.87 that the matter may not be pursued with Bofors in regard to payment of these sums because JPC is going to be constituted the visit of Bofors officials to give material or names if possible was thwarted. Mr. Gandhi also at that point of time spoke to the Swedish Prime Minister and stated that there was no need for further investigation by the Swedish Authorities in view of denial of Bofors about the payment of commission in letter of 24.4.1987.

(ix) For thirteen long years, Hindujas were forestalling the investigation in the Swedish Courts that they did not receive this commission and that this money was not directly concerned with the Bofors but was towards some remuneration or commission for global counter trading.

(x) The conversation between Rajiv Gandhi and Swedish Prime Minister, Mr. Carlson wherein Rajiv Gandhi is reported to have told Mr. Carlson that since he had received the report of the Bofors to the effect that there are no middlemen, there was no need for further investigation is corroborated by the letter dated 24.4.87 sent by Rajiv Gandhi to Carlson. The Swedish Prime Minister also told Mr. Oza the then Indian Ambassador as to what was told by Rajiv Gandhi. This shows that something fishy was going on. This was further corroborated by the conduct of Mr. N.N. Vohra when he told that he had threatened Bofors to cancel the contract unless they come out with the names of the middlemen but he was told that the President of Bofors was proceeding to India to come out with the facts and names of middlemen and commission paid to them. But he was stopped and asked not to come and thereby the whole exercise of finding out the names of the middlemen to whom the commission was paid was forestalled and it took CBI many years to collect the information through letters of rogatory, other communications and their frequent isits to find out the names which revealed the names of Hindujas, Win Chadha and Quattrocchi as commission agents to whom huge amounts had been paid. One such letter is dated 24.4.1987 (page 1319 of Vol. 8 of documents.)

(xi) The investigation with the Swedish Government was thwarted completely by telling the Prime Minister that in view of the denial of Bofors the investigation was not necessary. Once the Government had started the investigation, everything would have come out in shortest possible time as the method of their investigation is altogether different and this single circumstance alone bares the designs of the public servants and the Commission agents as well as Bofors who had entered into secret conspiracy for getting the contract. Had the Government of Sweden threatened to blacklist Bofors because they were getting bad name among the nations much more would have been revealed which even till date CBI has not been able to reveal in spite of their best efforts. (Emphasis supplied)

(xii) Note of Joint Secretary dated 14th July, 1987 (Page-1154; Vol. 9) classified as Secret shows that there was a suggestion that since the superiors of Bofors and President should come to India forthwith and also bring all relevant documents and they should report in Delhi by Monday i.e. 6th July or latest by 7th July, 1987 i.e. within four days. But this suggestion was put in cold storage and thwarted by Rajiv Gandhi in the CCP which took place on 4th July, 1987 at the residence of PM which is apparent from the statement of N.N. Vohra (PW 9).

(xiii) The statement of Mr. Vohra shows the desperation of Rajiv Gandhi to stop the superiors of the Bofors from coming to this country that wherever they had landed they should be asked not to come in spite of the fact that no message could reach them before they left Sweden as all efforts were made to contact Braiding and ultimately they did not reach India and the names that they were having with them to whom they had paid the commission or the bribe could not see the light of the day.

(xiv) Similarly the efforts of General Sunderjee that in order to preserve the prestige of the country we should cancel the contract, could not bear any fruit as in the grand design many were involved and contract in question was largest contract given to any country by any country. At every stage, at every step, efforts to find out who were involved in the affairs were scuttled by the then Prime Minister himself, at one stage through the Defence Secretary and at the last stage by the PM himself.

38. According to Mr. Rohtagi following material shows the nexus between the Quatrocchi and Rajiv Gandhi in respect of conspiracy for cheating the Government of India and procuring the contract by way of deceitful means and against illegal gratification:

(i) Statement of Sh. V.P. Singh (PW-14) who stated that on the asking of Mr. Rajiv Gandhi he gave an appointment to Quatrocchi with regard to HBJ pipelines and subsequently Rajiv Gandhi asked him to examine the Bofors contract in the light of suggestions and points he dictated and those points happened to be the same which were made by Quatrocchi and this shows how Quattrocchi was close to Rajiv Gandhi.

(ii) Statements of R. Ganpati also show that Quattrocchi was very close to Mr. Rajiv Gandhi.

(iii) Mr. Arun Nehru (PW-16) made complaints to Mr. Rajiv Gandhi that names of his friends were making rounds namely Bachans and Quattrocchi about this contract. He further states that he was aware that Quattrocchi was very close to Mr. Gandhi and was a frequent visitor to his residence and had access in his house and there was no check in his movement even by S.P.G.

(iv) Closeness Mr. Quattrocchi was having with Rajiv Gandhi is further evidenced by the statement of Mr. Vijay Dhar who was Personal Assistant of Mr. Gandhi and was thrown out as he could not get along with Quattrocchi. According to Mr. Nehru, Quattrocchis business was only to make money. He even could transfer Secretaries in Government of India. He also got the Private Secretary to P.M sacked. All these facts demonstrate the angle of conspiracy between Quattrocchi and Rajiv Gandhi and this angle is fortified from the movement of files and action of Ministries and other steps taken by the Defence Ministry in concluding the contract.

(v) Agreement dated 15.11.1985 (Annexure IV Form XIV, page 255) which was made between Bofors and M/s. A.E services shows that the agreement between Quattrocchi and Bofors was not an open-ended agreement which normally in such contract is but was a time-bound agreement that is if by 1st April, 1986 letter of award of contract is not issued and there is no renewal of the agreement, the contract would expire. This agreement itself projects the amount of clout Quattrocchi had with the power that be.

(vi) The statement of account in Lord Financial Bank shows corresponding payments made by Bofors to AE Services in terms of Clause 5 of the agreement (page 2706 Volume XIV). The entry shown in the statement is withdrawal of 7.33 crore $ out of total amount of 7.34 million $ in the account of Kolbar investments. The amount received by AE services is exactly 3% of the commission paid by Government to M/s. Bofors.

39. Let us see what the learned ASG has to say regarding charge for the offence under Sections 120B/420, IPC i.e. Cheating the Government of India against A.B. Bofors, Hindujas and for that purpose Quattrocchi and Win Chadha. Learned ASG has referred to following material and evidence showing that money was paid by the Bofors to three Hinduja brothers in three different coded accounts and the money paid to them at the relevant time was paid to Bofors by the Government and correspondingly it was paid by the Bofors to Hindujas. Similarly payments were made to Win Chadha and Quattrocchi.

(a) Agreed summary record of discussions between the Government of India and Bofors delegation which shows that Bofors had disclosed that they had engaged Win Chadha as their agent in India in connection with Indian contracts. In May, 1984 Bofors gave a declaration regarding Indian Agent in which only Indian Agent declared was Mr. Win Chadha. At the relevant point of time even Hindujas were also their agents but not for this contract. In spite of they being Indians, they were not shown as Indian agents and this prima facie shows the clandestine manner Bofors were operating through Indians. In 1998 Hindujas renounced their citizenship. It was during this crucial period that the Government started receiving documents from Swiss authorities. This shows that they really had manipulated the contract and were beneficiaries.

(b) Moresco was mentioned as a company registered in Switzerland which was at the time of agreement was Pitco. However, when Government of India requested Bofors to clarify certain issues reported in the press, the Bofors furnished information that payment in favour of Moresco was made to Bank of Geneva under the coded name Lotus but Lotus is nothing but Hindujas coded account. In the letter dated October 6, 1987 sent by Bofors to Government of India the information was provided that Moresco is not a company.

(c) Application of request to open an account dated 27.5.86 moved by S.P. Hinduja, G.P. Hinduja with the coded accounts which was cancelled within a week.

(d) Another account with the same bank in the name of Mc Intyre Corporation and S.P. Hinduja and G.P. Hinduja. In the account opening form residential address had been shown as Gamma.

(e) Letter sent by P.P. Hinduja. Clinching evidence is that Hinduja received commission in the coded account in MONT BLANC direct from Bofors in respect of contract in question and its receipt refers to instant contract number No. 6(9)84(D)(GS)(4)10910709.

(f) Similarly document showing in the account of Tulip amount of commission received for the contract from Bofors and not for any other contract. Another such amount is in the name of Lotus.

(g) There are large number of such receipts of commission received in the aforesaid coded accounts. Similarly the commission was received from ABB in the account of Tulip.

(h) Chart prepared by the Investigating Judge of Switzerland after giving due notice to Hinduja Brothers and therefore credibility is attached to this document shows that money came from Bofors first in the account of Tulip, Lotus, Mont Blanc and after transferring the amount, was deposited in Ashoka Middle East Corporation, Nigeria which is owned by P.P. Hinduja, G.P. Hinduja and S.P. Hinduja.

(i) There is name of Ashoka Middle East Corporation on the list and their account in Liberia which shows that this account is in the name of P.P. Hinduja as the proprietor and owner of the firm and form is signed by him. The entire account is projected at page 309.

(j) Hindujas have failed to show as to for what services or transaction relating to counter-globe trading they had received the payment from the Bofors while the documents of the Banks clearly show that these payments were as a commission towards the contract in question.

(k) From the account of Mc Intrye owned by PP Hinduja three different accounts in the name of other brothers were opened namely LOTUS, TULIP, MONT BLANC for the purpose of diverting the money and there are documents which show that these moneys drawn or received from Mc Intyre were in respect of this contract and Mc Intyre got this money from Bofors as a commission for this contract @ 3%.

40. As regards role of Mr. Rajiv Gandhi and S.K. Bhatnagar in conspiracy with Bofors, Quattrocchi, Win Chadha and Hindujas in misusing the official position and accepting illegal gratification for awarding contract Mr. Mukul Rohtagi has relied upon following circumstances:

(i) Rajiv Gandhis close proximity with Quattrocchi.

(ii) Rajiv Gandhi acted in concert with Bofors.

(iii) He also overlooked the failure to observe norms by Mr. Bhatnagar in the matter of award of contract. Indirectly Mr. Bhatnagar was acting at the behest of Mr. Rajiv Gandhi because in dual capacity the matters were so accelerated and activated that even Mr. Bhatnagar did not wait in the light of reduction of prices by Sofma and rushed to award the contract in favour of Bofors. Inspite of the fact that no cut off date was given for completing forms for giving offers Mr. Bhatnagar rushed for issuing letter of intent to Bofors on 12th March which was a sudden and abrupt decision.

(iv) The conduct of Mr. Rajiv Gandhi in the CCPA meeting on 4th July, 1987. He decided that matter may not be investigated since JPC was going to be appointed and Bofors has also denied the allegations aired in the Swedish Radio.

(v) The conduct of Mr. Bhatnagar shows that either he was under pressure of Mr. Rajiv Gandhi or he knew what Rajiv Gandhi wanted as he was making all out efforts to get the contract awarded to Bofors. Persistence of Mr. Bhatnagar to the cancellation of contract as advised by General Sunderji point to the fact that he was only interested in Bofors for ulterior motives. At no stage he showed any transparency in his conduct or in conducting the affairs of Price Negotiating Committee or with regard to the note of draft prepared by Mr. N.N. Vohra, Additional Secretary and the recommendations of General Sunder Ji for cancellation.

41. The case of the public servants was spearheaded by Mr. Kapil Sibal, learned Senior Counsel who assiduously assailed the conclusions of the learned Special Judge. Mr. Sibals contentions, in brief, are like this:

(i) There is not even a single suspicious circumstance which may suggest that the commission earned by Mc Intyre Corporation was meant to be bribe taken on behalf of Mr. Rajiv Gandhi and Mr. S.K. Bhatnagar. The learned Special Judge does not even record the finding that either of these two public servants were aware of the existence of Hindujas much less that Hindujas would earn something if the contract goes through.

(ii) The prosecution evidence is overwhelming and incontrovertible that the contract was awarded by the civil authorities because the user namely the Military firmly made up its mind in favour of Bofors and public servants had no option than to award contract in Bofors favour.

(iii) In the impugned order Special Judge has made observations referring to evidence verging on the findings of conviction against Rajiv Gandhi and S.K. Bhatnagar which even otherwise could not have been referred to or relied upon. If at all there is any independent evidence against the petitioners Bofors, Hindujas or Chadha or for that purpose Quattrocchi to prove the charge of abetment of conspiracy the prosecution is at liberty to rely upon but there is none.

(iv) The charge that the costlier and more expensive and less qualitative guns were taken is based on the premise of Technical report of the Committee whereby both the guns were placed on the equal footing and the non-consideration of the second offer made by Sofma by the Price Negotiating Committee but the fact remains that Mr. Arun Singh, the then Defence Minister who was heading the entire process of exercise received communication from Mr. S.K. Bhatnagar about the second offer containing the offer presumably lower than that of Bofors but maintained that since French i.e. Sofma told that they were not in a position to further lower the price, Bofors was still the cheaper as Bofors had offered 10 guns free.

(v) The relevant extracts of statement of Mr. Arun Singh (Volume-II of Statement page 290) are as under:

As far as I was concerned it made no difference to me which of the two guns was listed at Nos. 1 or No. 2 because I was determined that we should buy the cheaper of the two. Few days later of LOI, the French informed the Defence Secretary that they are now in a position to further reduce the price. The Defence Secretary and myself discussed the matter and concluded that LOI could not be deemed to be finally closing of the contract and therefore MOD could still pursue the matter. We informed the Bofors that Sofma are now offering a low price to the best of my recollection a point was reached where the French finally communicated to the Defence Secretary that they are no longer in a position to lower the price any further. At that point, the Bofors gun was Rs. 15-20 crores cheaper than the French. At the Airport when I was going to Bhutan Defence Secretary had informed that Bofors was ready to offer 10 guns free and therefore the quoted price of Bofors was cheaper than Sofma.

(vi) It is a case of commercial transaction entered into between Government of India with Bofors on 24th March, 1986. By virtue of clause 31 every arrangement that was in existence stood superseded and one of such arrangements was not to have middleman or commission agent while concluding the contract. This contract did not contain the stipulation that the Bofors will have no agent. Said clause reads like this:

All the provisions of this Contract including the Annexures, Enclosures and Clauses shall be harmoniously construed. The parties have executed this Contract on the basis that the provisions in the clauses and annexures both inclusive represent the entire Contract. This Contract sets forth the entire undertaking of the parties in respect of transactions contemplated hereby and supersedes all prior agreements, arrangements, representations or understanding relating to the subject matter hereof.

(vii) By no stretch of imagination public servants can be accused to have cheated the Government on any aspect including the price, quality or any other aspect. It is neither the case of the prosecution nor any evidence in this regard.

(viii) In commercial transaction the State can choose its method and price is not always the whole criteria for awarding the contract, reliance is placed upon Air India Ltd. v. Cochin International Airport Ltd and Others with Cochin International Airport Ltd. and Ors. v. Cambatta Aviation Ltd. and Others, 2000(2) SCC 617 wherein the following observations were made:

The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial transaction. In arriving at a commercial decision consideration which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrary. Though that decision is not amenable to judicial review, the Court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonbleness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the Court must exercise its it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene.

(ix) So far as charge of abettment of cheating is concerned even if the evidence collected by the CBI and proposed to be produced by it is assumed to be correct still the fact remains that the persons against whom the evidence will be produced are no more and, therefore, the evidence would go unrebutted, undefended and unchallenged which is against the cardinal principle of trial that any trial in the absence of the accused is no trial or any evidence produced in the absence of the accused which has not been subjected to cross-examination nor has the accused any opportunity of producing his defence is no evidence in the eyes of law.

(x) Even if worst is assumed that the petitioners namely Hindujas and for that purpose others had abetted the offence committed by the public servants still the fact remains that they cannot be allowed to cross-examine on behalf of the public servants either to project their defence or that of the public servants who are no more. By the doctrine of reasonable procedure they cannot be allowed to usurp the right of the public servants or for that purpose the accused who are dead for cross-examining the witnesses sought to be produced against the alleged accused persons even to prove the defence of the surviving accused persons. The Supreme Court has in Mrs. Maneka Gandhi v. UOI, 1978(1) SCC 248 (at page 281) laid down that on the concept of reasonableness of a procedure as projected in the procedure contemplated under Article 21 the Court should not be allowed to adopt an unreasonable procedure. In nutshell the procedure should not only be reasonable but right just and fair and not arbitrary.

(xi) As per Section 231, CrPC the prosecution is required to lead evidence in support of its case the moment the accused enters into the plea of non-guilty. Section 233 requires the accused if he is not acquitted to be called upon to enter on his defence and to provide any evidence he may have in support thereof. Such a trial will operate adversely even against Hindujas and others as Hindujas and they have no wherewithal to cross-examine the witnesses and rebut the evidence to be produced by the prosecution against the public servants. If such an evidence is allowed to be adduced it cannot be used against Hindujas and others. Such a procedure would be procedural violation of Article 14 of the Constitution of India as well as Article 21 which describes that the life and liberty of the person cannot be curtailed without due process of law. Cross-examination and production of defence evidence is part and parcel of natural justice. Nobody can be condemned unheard or unrepresented.

(xii) Even otherwise it is basic principle of criminal jurisprudence that every accused is presumed to be innocent unless charge is proved or he is found guilty. On the basis of this doctrine, this Court in a public interest litigation in Rajiv Gandhi Ekta Samiti v. UOI, 2000(52) DRJ whereby deletion of the name of Rajiv Gandhi in the charge-sheet was sought on the ground that he is not there to protect his prestige and reputation made the following observations:

It is true that in the eyes of law a person is presumed to be innocent until he is tried and found guilty following the due process of law. Since no trial is possible and is contemplated in the case of the late Shri Rajiv Gandhi, in the eyes of law, he is entitled to be seen as innocent and not guilty of the offencs alleged against him. Legally speaking, there is no criminal case or criminal proceedings pending against the late Shri Rajiv Gandhi. Notwithstanding the above mentioned charge-sheet and the proceeding against the accused persons sent up for trial, the late Shri Rajiv Gandhi is entitled to the benefit of the legal perception that he is innocent and not guilty.

(xiii) In the said case, CBI was a party. The judgment has attained finality as nobody went into appeal. May be by virtue of legal fiction or presumption Rajiv Gandhi or for that purpose S.K. Bhatnagar have not been proved guilty which tantamount to acquittal and neither petitioners nor Win Chadha or Quattrocchi in any way can be held guilty for abetment of conspiracy as no evidence involving the charge of conspiracy can be used against the petitioners as in order to prove the charge of abetment of conspiracy, the first essential requirement of law is to prove charge of conspiracy against public servants.

(xiv) The observations of the Judge in the order dated 29th August, 2002 dismissing the application for dropping the proceedings under Article 21 of the Constitution for failure of expeditious justice show that the prosecution has collected no evidence. The observations are self-contradictory and shake the foundation on which the charges were framed. The observations are based on the material witnesses from Sweden including Mr. Morbarg and Las Gothlan and no further evidence has been acquired by the CBI.

(xv) The charges have been framed mainly on the presumption that though the remuneration received by Hindujas were towards the consultancy services provided by Hindujas till May 86 for negotiations of the award of contract of Bofors but these must have been received on behalf of Rajiv Gandhi and would have gone in favour of his account had the scandal not broken out. The fact remains that from May 86 to April 87 the money remained intact not only in the accounts of the Hindujas but also was being used by them in their business. What a fanciful flight of imagination. This was neither the case of CBI nor the evidence. This is a product brewed by the Learned Special Judge himself.

(xvi) Charge of abetment in commission of offence under Section 161, IPC read with Section 34, IPC is not made out because it is neither the case of the prosecution nor has any kind of evidence been adduced or collected by the prosecution to show that the Hindujas and for that purpose Win Chadha and Quattrocchi had paid any gratification to the public servants for doing some favour to them or disfavour to any other person say Sofma.

(xvii) This was an institutional decision and not a decision by any individual. Institutional decisions have to take factors into consideration while selecting a gun like Bofors or Sofma including the political or diplomatic relations of the rival countries with the seller of the Gun. France was selling Sofma to Pakistan. Since the gun was to be used mainly against that country the decision of the Military experts could have lessened the supply of the Sofma guns if it intended to help Pakistan at the same time. Though it was one of the prime considerations but it was not the sole consideration as the technical aspect is capability and suitability of the gun and other factors were pre-dominant in selecting the gun. This was the only gun which had a feature of shoot and scoot and this feature has come to the rescue of the country in a recent Kargil War with Pakistan. Gun has won laurels from public and Army and has proved and established its credentials.

(xviii) Why of all the people Mr. Bhatnagar was chosen for selecting the gun as an accused. There were many more members of Price Negotiating Committee as well as the Military personnel who gave the report in favour of Bofors. There is no allegation by the prosecution against Mr. Bhatnagar of having ruled in favour of Bofors by accepting the bribe. His role was as much equal as other members who gave consent in favour of Bofors so far as the price of the gun was concerned.

(xix) The most scathing observation made in Para 230 which is completely personal, conjectural and undesirable in nature as it refers to a character and traits and personality of Sh. Rajiv Gandhi, which was not a matter for consideration before the learned Judge exposes the highly injudicious and extraneous approach by the learned Special Judge. Observations are:

Rajiv Gandhi was not naive and impetuous. He pretended to be a maverick. All this was, however, a deliberate posturing and part of a well conceived and pre-arranged plan to apparently show the non-involvement of middlemen/agents in the deal and to achieve the oblique purpose by direct negotiations on the one hand and to have secret middlemen on the other hand.

(xx) The observation of the learned Special Judge in para 234 is contradictory to the case of the prosecution to the effect that there was no proper policy of the Government of India prohibiting agents in the deal.

(xxi) It is neither the case of the prosecution nor is there any evidence and the learned Special Judge has assumed himself that the JPC was not only constituted under public pressure and that of opposition, but it was packed with people sympathetic to the ruling party, even though the controversy did not die down. These observations of the learned Special Judge verge on breach of privilege of Parliament.

(xxii) The angle of conspiracy and the abetment to commit the offences has been dealt with in Para 308 and the learned Special Judge has culled out 14 circumstances most of which are wholly presumptive and imaginative and have neither any basis nor any material or evidence.

(xxiii) The question of entering into conspiracy of Hindujas or Quattrocchi with Rajiv Gandhi or Bhatnagar does not arise as mere receipt of the commission by them subsequent to the award does not show their participation in the conspiracy with the public servants as envisaged under Sections 161 and 165A, IPC. The case of the prosecution itself is not based upon these allegations. Bofors paid commission subsequent to award of contract. No role has been assigned to them either in selection of gun or price negotiations.

(xxiv) CBI also relied upon the post contract conduct in order to prove the pre-contract conspiracy. First of such circumstance is that Bhatnagar asked Sunder Ji to change his opinion who had recommended for cancellation of contract with Bofors. The recommendations of General Sunder Ji for cancellation of contract were solely for moral reasons that if anybody had taken the commission from Bofors the contract be cancelled and not on the ground of the gun being less qualitative and more costly. It was a sort of emotional decision taken by General Sunder Ji and, therefore, Bhatnagars conduct for request to Sunder Ji to change his opinion, which may involve again more than 10 years and by that process the security of the nation is likely to be jeopardised.. The difference of opinion cannot form the basis of conspiracy.

(xxv) The difference of opinion between two persons namely in this case Sunder Ji and Bhatnagar, the former insisting for cancellation of contract on account of having been procured through corrupt means and the latter insisting that at this stage the contract should not be cancelled in view of the security of the nation as already many years had been wasted in procuring this gun and the nation cannot afford to wait for long to procure such a gun which was the need of the hour cannot be used as an evidence against either Bhatnagar or Rajiv Gandhi for the offence of conspiracy of a contract that had culminated already in 1986.

(xxvi) As regards the telephone call by Rajiv Gandhi to P.M of Switzerland which has been referred by Oza, and corroborated by the subsequent letter sent by Rajiv Gandhi to Karkan his counterpart wherein he has referred to such a conversation on telephone as a post contract conduct cannot be used as evidence for a conspiracy prior to the contract.

(xxvii) The letter of 28th February by the P.M. to Karkan was that the Swedish Government should not make an inquiry as promised in view of the appointment of JPC because the findings of the Swedish Government will go long way in getting rid of the rumours in India about the contract. Even if it is assumed that Rajiv Gandhi advised the Swedish Government not to continue with the investigation that India has appointed JPC for this purpose it cannot be taken to be post contract such conduct which may fortify the allegation of conspiracy and further the Bofors people were also summoned before the JPC is not an evidence that they made no effort of any kind whatsoever to scuttle or withhold the inquiry conducted by JPC. So much so subsequently letter to the Swedish Government was sent that he had also no objection if the inquiry was conducted at their end.

(xviii) The meeting of the mind is an essential ingredient of conspiracy. Circumstances leading to the meeting of mind alone are admissible and any other circumstances or allegation cannot come within the ambit of meeting of mind. None of the circumstances relied upon by the CBI during the contract or after the contract project or demonstrate any meeting of minds of all the participants in the conspiracy namely Bofors, Quattrocchi, Hindujas, Chadha and the public servants.

(xxix) After the contract was awarded and letter of intent was to be issued there was no question for considering the offer made by Sofma as even at first instance the Technical committee of the Army did not recommend Sofma as recommendations of the Technical Committee of the Army weighed more in favour of Bofors though they short listed these two guns out of four. It was the shot and scoot feature of the gun that prevailed for the ultimate decision of the Technical Committee and therefore any element of dishonest intention nor of any conspiracy nor of misuse or abuse of official position by any of the officials who took part in the decision making process is there nor has there been meeting of mind between the Bofors and public servants or with Hindujas and Quattrocchi.

(xxx) Last but not the least that in this state of evidence another legal issue arising is that neither Rajiv Gandhi nor Bhatnagar are there to defend themselves and Hindujas or Quattrocchi cannot possibly cross-examine on behalf of the public servants in these circumstances and in this state of evidence it would not be in the interest of justice to carry out the trial and this in itself is sufficient to exercise power under Section 482 which is ultimately that nothing should be done that does not fulfil the interests of justice.

(xxxi) According to the learned Special Judge the entire money i.e. US $ 9.2 million received by Mr. Quattrocchi was further channelled to Switzerland and Austria within a period of ten days and it seems that the money has not yet been withdrawn though it had been kite flying from one account to another and it also seems that money was in the account as trustee for Rajiv Gandhi for some months. Learned Special Judge has tried to induct his personal knowledge and has tried to write a piece of fiction as it is neither the case of the prosecution nor is it borne from any evidence. There cannot be any higher fanciful flight of imagination.

(xxxii) Thus any amount of evidence collected by the prosecution right from the stage when Mr. S.K. Bhatnagar started participating in the proceedings culminating in the award of contract and the date of signing of the contract by Mr. Rajiv Gandhi is wholly irrelevant, immaterial and irreceivable in evidence not only against the public servants but also against other alleged co-conspirators. Thus prosecution can confine its evidence only from the point and to the extent of allegation of conspiracy between the Hindujas and Quattrocchi and Bofors for awarding the contract. Since in the instant case the prosecution has as per its own investigation assigned the role of conspiracy to Hindujas post-March, 1986 the charge of conspiracy to cheat the Government by corrupt or illegal means against public servants cannot stand.

(xxxiii) Allegation of conspiracy of Hindujas and Quattrocchi or Chadha with S.K. Bhatnagar or Rajiv Gandhi at the point of awarding the contract cannot stick as even if if is presumed that they had been operating in India as commission agents for Bofors, whatever they were doing they were doing of their own and if at all they had received any commission from Bofors as a reward for awarding the contract the charge of conspiracy for any offence by no stretch of imagination can stick against the public servants.

(xxxiv) So far as the averment in the charge that no agent or middleman would be used in the negotiations for procuring the contract the element of cheating the Government is not admissible in evidence as it was a contract envisaged under Article 299 of the Constitution of India which required to be reduced in the form of document on behalf of the President of India and Section 92 of the Indian Evidence Act excludes any amount of evidence or oral agreement or representation for contract varying or adding, subtracting from the terms of the contract.

42. On the legal position as to the nature of contract executed between the Government and AB Bofors, reliance was placed by Mr. Sibal upon Tamilnadu Electricity Board and Another v. N. Raju Nadiar, III (1996) CLT 5 (SC)=1996(40) SCC 551(para 7) wherein it was held that a case has to be adjudged bearing in mind the principles that under Section 92 of the Evidence Act where the written instrument appears to have come into existence to ascertain the terms of the contract, oral evidence as to the terms is of no value.

43. In support of the plea that once there is a requirement of the contract to be reduced in writing under Article 298 of the Constitution the parties are not allowed to lead any oral evidence in respect of the conditions of the contract not found to be contained in the contract, reliance is placed upon S. Saktivel v. M. Venugopal Pillai and Others, VI (2000) SLT 120=III (2000) CLT 305 (SC)=2000 Vol. 7 SCC 104 wherein following view was taken:

A document becomes effective by reason of the fact that it is in writing. Once under law a document is required to be in writing, parties to such a document cannot be permitted to let in parol evidence to substantiate any subsequent arrangement which has effect of modifying earlier written document. If such parol evidence is permitted it would divest the rights of other parties to the written document.

44. On the same analogy any arrangement prior to the execution of the document is also not permissible to be adduced in evidence. In nut-shell the prosecution cannot be permitted to rely upon the oral arrangement which was subsequently cited to be agreed by a letter for the purpose of varying, adding to or subtracting from the terms of the contract reduced in writing on 24th March, 1986.

45. Hindujas were defended by none less but Mr. Ram Jethmalani, learned Senior Advocate. Mr. Amit Desai complimented his arguments representing one of Hinduja brothers.

46. Mr. Ram Jethmalani tried to show that the investigation and the conclusions are not only tainted but varnished with an attempt to tarnish the image of Hindujas who are involved in philanthropic activities in this country and merely because they were associated with Bofors as their agents for counter-global trading activities they cannot be charged for the alleged offences. In order to avoid repetitiveness I shall attempt to concise their contentions collectively. These are:

(i) Hindujas are only consultants and commission agents for Bofors in procuring the contract. If the reliance placed by the prosecution on the documents referred is accepted it nowhere leads to the fact that the Hindujas were acting in conspiracy with the Rajiv Gandhi or S.K. Bhatnagar for manipulating the award of contract and accepting the consultancy commission as a bribe. Bofors have throughout been writing to PITCO and MORESCO that they would be giving them 5% commission as marketing expenses or some other commission and later through the letter dated 1st July, 1985 they extended the consultancy agreement as Hindujas had been working as a consultant till July 1, 1985. The last document shows that Mr. Rajiv Gandhi still was an Avro Pilot and had not become the Defence Minister or Prime Minister of the country.

(ii) The most crucial document (it is at page 406) was not taken into consideration by the learned Special Judge which could have put at rest the doubt created or nursed by the prosecution as to the role of Hindujas in the negotiations of the contract. The words extension of consultancy agreement for six months puts at rest the controversy as to the role of Hindujas as all agreements right from 1979 were consultancy agreements.

(iii) The crucial question that arises for determination for the purpose of offences under Section 420, IPC or for that purpose Section 5 of the Corruption Act read with Section 120(B) of IPC is what is the nature of payment received by Hindujas either from Bofors or from parent company of the Bofors. In other words whether it was a commission for procuring this contract or was it a bribery or was it remuneration for consultancy in global counter trade. The contract of 24th March, 1986 is the determining criteria. Para 31.1 is the main clause. It reads as under:

The Seller expresses its commitment to buy back the Goods or Items to be manufactured in India under the Licence Agreement provided that the terms and conditions can be agreed upon by the Parties, if and when such Goods or Items are offered for sale to the Seller. The Seller also undertakes, with the cooperation and approval of the Government of Sweden, to persuade other importers in Sweden by itself and through appropriate agencies to purchase other commodities from India. The objective is that total export under this Clause from India shall not be less than 50% of the value of this Contract and purchases made under the Licence Agreement.

(iv) International counter trade in common parlance is Barter system and includes Multilateral Barter and clause 31.1 is demonstrative of such a system.

(v) In counter-globe trading it is not only the seller who undertakes to purchase other commodities in lieu of sale of their commodities but also gives them liberty to persuade other importers and also appropriate agency who purchase other commodities for the purchase of their goods. In the instant case, Bofors has used the services of Hindujas towards consultancy fees of discharging the obligation cast upon the Bofors by clause 31.1.

(vi) When the news of procuring of the contract by the Bofors by giving bribe to Indian politicians broke out in Swedish Radio on 16th and 17th April, 1987, the Bofors agents were called and first meeting of Indian Ambassador and Bofors Agents took place on 20.4.1987. Bofors people explained that payment of this order was made by them to Hindujas as consultancy fees. They denied having made any payment to the Hindujas on account of the awarding of contract in question. However, the aforesaid payment was accounted in the books of accounts of the Company.

(vii) It is the case of the prosecution that the money alleged to have been received by the Hinduja was payment pursuant to the 19.10.1979 agreement between them and therefore question of element of ingredients of conspiracy cannot arise. Nor can the ingredients of Section 420 be made out.

(viii) On the directions of JPC, Indian Officers and Officers of Bofors were directed to file summary of their agreed points. As per the report of JPC, last payment was received by Hindujas in December, 1986 and no payment was made thereafter. Contract was concluded on 24th March, 1986. All these payments were made between May, 1986 to December, 1986. Even the JPC accepted the explanation of Bofors on which the prosecution relies upon. Observations of the learned Special Judge that JPC was constituted under public pressure and that of the opposition but it was packed with the people sympathetic to the ruling party demonstrate Special Judges personal understanding of the Indian Politics and as said by Mr. Sibal amount to breach of privilege of the Parliament and by this statement alone the Judge has disqualified himself from trying the case.

(ix) According to the learned Special Judge, the public servants were not paid any bribe nor did they accept any bribe still he jumped to the conclusion that since news of bribing Indian politicians had broken by that time they played safe. By no stretch of imagination such a conclusion or inference can form the basis of a charge much less the trial. It was specifically stated that payments were made to the Hindujas but not for winning contract for Bofors.

(x) Letter dated 9.6.2000 was sent by CBI that the documents supplied by Swiss authorities do not disclose any connection of payment with the contract and CBI requested their counter-part to make further investigation. This itself shows that sufficient evidence was not available to the CBI till June 2000. Without waiting for further material, CBI rushed to file the charge-sheet which even according to their own perception was not sufficient to show their connection.

(xi) Hindujas made statement before the Swedish Judge in which they admitted that they had received payment but it was due to international counter trade commission or consultancy fees and not for winning the contract by way of bribe received on behalf of Indian leaders. The Swedish Judge appointed a very well known firm of Auditors namely Ernst and Young. This report is silent that the amounts received were in relation to Arms consultancy and that the amounts received were transferred to Indian politicians. There is presumption of truthfulness attached to this as it is admissible in evidence.

(xii) So far as S.P. Hinduja and G.P. Hinduja are concerned, the main allegations of prosecution are that though they were at the relevant time neither partners nor Directors of Mc Intyre in whose account the alleged money/illegal gratification was deposited allegedly by way of safe deposit on behalf of Rajiv Gandhi and merely because they are brothers of P.P. Hinduja who was the sole proprietor of said company cannot be presumed to be participating in the negotiations on behalf of the Bofors. However, it appears that they have been involved for the offence punishable under Section 420 and abetment to offences of illegal gratification and misuse of official position mainly on the presumption that the money deposited in P.P. Hindujas accounts was diverted for the promotion of business of S.P. Hinduja and G.P. Hinduja thereby they were party to the receipt of money as illegal gratification on behalf of Rajiv Gandhi. In other words S.P. Hinduja and G.P. Hinduja are being charged of being financial beneficiaries of money received by Mc Intyre or their brother P.P. Hinduja. Such a presumption cannot form basis for aforesaid charges. These charges if any are strictly applicable to public servants.

(xiii) It is not the case of the prosecution that Hindujas, Quattrocchi or Win Chadha had accepted bribe on behalf of public servants. The case of the prosecution is that by way of paying commission to them not only they by way of misrepresentation and dishonest concealment that they were not working as commission agents but Bofors also committed mischief of cheating but the learned Special Judge had taken upon himself to frame charges for the offences of which even the prosecution did not accuse the public servants, petitioners or Quatrocchi or Chadha. Neither concealment nor misrepresentation of such a fact, by any stretch of imagination can form basis of charges of abetment of misuse of official position by public servants or abetment in receiving illegal gratification by public servants in awarding the contract.

(xiv) The entire gamut and the edifice on which case against Hindujas stand is result of the letter rogatory sent by the Government of India to the Swiss Authorities seeking information as to the account of Hindujas. According to the documents forwarded by the Swiss Authorities there were 9 payments received by P.P. Hinduja of Mc Intyre. Since P.P. Hinduja and other Hindujas have global trading they could not have come out with the confidential dealing with several countries, Governments and private concerns. These payments have been used as an evidence against them as if they were concealing something whereas the fact remains that Hindujas have been writing time and again to the CBI that they were prepared to furnish every information sought by them if it related to the offence under investigation.

(xv) Bona fide of Hindujas is reflected through these communications but the account held by them has been used by the Special Judge as a bribe taken by them on behalf of public servants whereas it is not the case of CBI. The second rogatory sent by the CBI to the Investigating Judge was an attempt to seek clarification as to whether the alleged 9 payments have been received in relation to the offence in question and the extent of involvement of S.P. Hinduja and G.P. Hinduja. In response Hindujas said that this money has been received by them as commission of global counter trading.

(xvi) As regards the arguments of CBI that no service was rendered by the Hindujas either in the form of getting the award or in the form of global counter trading the presumption is that the money received by way of nine payments from Bofors was towards their commission, it is contended that Hindujas from 1993 during the course of investigation informed the CBI that they were involved in the counter trading activities internationally and in particular they had association with Nitro Nobal Group i.e. Bofors from early 1970s in respect of commodity trading in Iran and other countries and these nine payments related to global counter trade activity. This aspect could have been established either by office employees of Bofors or the Directors and Constituted Attorneys of Mc Intyre Corporation. No statements have been recorded of any of the Bofors officers nor they are cited as witnesses and further the Directors and Constituted Attorneys of Mc Intyre Corporation are not available as they have died.

(xvii) It is not understandable from which material the learned Special Judge has drawn the conclusion that S.P. Hinduja and G.P. Hinduja initially opened accounts in their names but later on a thought occurred to them and cancelled it and opened account in the name of Mc Intyre Corporation. This is also not the case of prosecution that account was opened by Mc Intyre Corporation in Switzerland for the purpose of putting the money received as commission or bribe from Bofors. However it is at the later point of time i.e. at the end of 1986 they opened individual account wherein part of the money lying in Mc Intyre was transferred.

(xviii) It is only a figment of imagination that SP and GP cancelled their account when second thought occurred not to open their account in their individual names and allowed the money of their share to remain in Mc Intyre corporation. In this regard explanation of GP that though he opened the account but it never fructified and was cancelled and that it was not opened for the purpose of putting the money received from Bofors by P.P. Hinduja is more plausible as at that given time no details about the scam were even in the air.

(xix) It is the imagination of the learned Special Judge while concluding that SP and GP are economic beneficiaries of Mc Intyre. Merely because the Investigating Judge of Switzerland gave the opinion that beneficiaries of Mc Intyre were S.P. Hinduja and G.P. Hinduja does not mean that their subsequent clarification and explanation by P.P. Hinduja that he alone was the beneficiary of Mc Intyre should be ignored.

47. On the legal premises, Mr. Jethmalani has raised two fold contentions. Firstly that if the explanation of accused is reasonable and plausible, it should be accepted at the stage of charges so as to avoid the accused undergoing the rigors and mill of long and time consuming trial. Secondly that none of the documents relied upon by CBI is admissible in evidence as these cannot be proved by any procedure of law and therefore these documents cannot form basis for framing of charges.

However, he also dwelt at law as to conspiracy.

48. According to Mr. Jethmalani in the instant case the only persons who could have deposed against the petitioners as to the charge of cheating were S.K. Bhatnagar and Rajiv Gandhi and once they had been made themselves the accused neither the charge against the petitioners nor for that purpose against them can stick as Bhatnagar and Rajiv Gandhi were as per rules of business and Article 74 of the Constitution the Government of India themselves and they cannot be charged for cheating themselves.

49. Mr. Jethmalani contends that the concept of Government of India has been dealt with by the Supreme Court in Samsher Singh v. State of Punjab and Another, AIR 1974 SC 2192 [LQ/SC/1974/248] wherein it was held that:

In all cases in which the President or the Governor exercises his functions conferred on him by or under the Constitution with the aid and advice of his Council of Ministers he does so by making rules for convenient transaction of the business of the Government of India or the Government of the State respectively or by allocation among his Ministers of the said business, in accordance with Articles 77(3) and 166(3) respectively. Wherever the Constitution requires the satisfaction of the President or the Governor for the exercise of any power or function by the President or the Governor, as the case may be, as for example in Articles 123, 213, 311(2) Proviso (c), 317, 352(1) and 360 the satisfaction required by the Constitution is not the personal satisfaction of the President or of the Governor but is the satisfaction of the President or of the Governor in the constitutional sense under the Cabinet system of Government. The reasons are these. It is the satisfaction of the Council of Ministers on whose aid and advice the President or the Governor generally exercises all his powers and functions. Neither Article 77(3) nor Article 166(3) provide for any delegation of power. Both Articles 77(3) and 166(3) provide that the President under Art. 77(3) and the Governor under Article 166(3) shall make rules for the more convenient transactions of the business of the Government and the allocation of business among the Ministers of the said business. The rules of business and the allocation among the Ministers of the said business all indicate that the decision of any Minister or officer under these two Articles viz., Article 77(3) in the case of the Governor of the State is the decision of the President or the Governor respectively.

Further the rules of business and allocation of business among the Ministers are relatable to the provisions contained in Article 53 in the case of the President and Article 154 in the case of the Governor, that the executive power shall be exercised by the President or the Governor directly or through the officers subordinate. The provisions contained in Article 74 in the case of the President and Article 163 in the case of the Governor that there shall be a Council of Ministers to aid and advise the President or the Governor, as the case may be, are sources of the rules of business. These provisions are for the discharge of the executive powers and functions of the Government in the name of the President or the Governor. Where functions entrusted to a Minister are performed by an official employed in the Ministers Department there is in law no delegation because constitutionally the act or decision of the official is that of the Minister. The official is merely the machinery for the discharge of the functions entrusted to a Minister.

50. Thus according to Mr. Jethmalani, Government of India by no fiction can be termed as people of the country and therefore if the Government of India itself indulges in the act of cheating by way of conspiracy which is the instant case, in the absence of S.K. Bhatnagar and Rajiv Gandhi, whose decisions, at one stage or the other, were deemed as decisions of the Government of India and they are not there to depose that the petitioners had made false representation to them as to the quality of the guns or as to its rate and they acted on that representation which resulted in the prejudice to them. Once they are made as co-conspirators then the charge of conspiracy to cheat is not sustainable.

51. On the premise that every functionary of the Government, including the Minister, whose decision is final in any matter, is by way of fiction the Government, the Supreme Court in another case Common Cause, A Registered Society v. Union of India and Ors., VI (1999) SLT 442=1999 (6) SCC 667 [LQ/SC/1999/670] set aside its own order whereby the Minister was directed to pay a compensation of Rs. 50 lacs to the Government of India by observing that under Article 32 of the Constitution which is not permissible as the Court cannot direct the Government to pay the exemplary damages to itself and therefore the plea that such a direction was made to the petitioner personally and he was treated as a separate distinct entity from the Government did not find favour.

52. Mr. Jethmalani further contended that the argument adopted by the trial Court while dismissing the contention against the charge of cheating was not at all sound nor was it addressed properly as the doctrine of collective responsibility applies to a Ministers act as well as his officials act. Had it not been so there was no concept of responsibility of a Minister for the act of his subordinate and, therefore, the learned trial Court traversed into the area that did not belong to it and also adopted altogether a different line of thinking which was never put up or addressed before him. The simple question before him was whether the ingredients of Section 420, IPC were made out or not and in that direction the executive actions of every Minister or for that purpose an official whose decision was final was deemed as the decisions of the Government of India to be made known in the name of the President.

53. On the doctrine that reasonable explanation of the accused should be accepted at initial stage Mr. Jethmalani has relied upon Hate Singh Bhagat Singh v. State of Madhya Bharat, AIR 1953 SC 468 [LQ/SC/1953/97] wherein the Supreme Court has taken the view that because of the presumption of innocence in favour of the accused even when he is not in a position to prove the truth of his version his explanation should be accepted if it is reasonable and accords with probabilities unless the prosecution can prove beyond reasonable doubt that it is false.

54. It is further contended that on the premise of the aforesaid law the learned trial Judge has gone wrong by not accepting the explanation of the petitioners that they had received the amount as a consultation fee on account of international counter trade system which was a reasonable explanation when tested on the anvil of the evidence of the prosecution which even prima facie did not show that the commission was received as a bribe on behalf of the public servants. Every piece of evidence including the JPC report, the statement of the petitioners recorded by the Swedish Judge on the request of the learned trial Judge of India and various communications, the decisions of the Government authorities no where indicate that at any point of time the award of contract was procured by way of bribe.

55. Mr. Jethmalani further contended that para 328 onwards of the order are highly unintelligible and the Judge himself is not sure what he wants the accused to satisfy as to their defence which according to him even does not fulfil the test of proponderous of probabilities and the explanation given by the petitioners before the Swiss Judge that they did not receive this amount towards negotiating or procuring the contract in question but this was towards their fee of international counter trading was sufficient to dislodge the presumption if any available either under Section 4 or Section 114 of the Evidence Act or any other premise and these are not mere explanations which find corroboration and support from proved and not proved, admissible or inadmissible documents collected by the CBI during the investigation and forwarded to the CBI by the investigating Swedish Judge. All this indicates that the money received was towards consultancy or counter trade payments and not as a commission for procuring the contract.

56. Mr. Jethmalani further contended that prosecutions case has to be supported by way of evidence either documentary or oral. Prosecution itself does not make out its case that Hindujas have received this payment for Rajiv Gandhi and the explanation of the petitioners has all the more reasons to be believed and acted upon and it is highly far-fetched that the learned trial judge has used the explanation given by the other two brothers namely S.P. and G.P. Hinduja against them presuming that they are also having some connection with the company in whose account the money was deposited whereas the fact remains that P.P. Hinduja alone is head of the company and moreover P.P. Hinduja only stated that in actuality and at first go the money was received by him and put into the account of Mc Intyre Corporation which is solely owned by him and it was subsequently that this money was transmitted to different companies of which G.P. and S.P. Hinduja happened to be the Directors. S.P. and G.P. Hinduja admittedly are not the Directors nor the beneficiaries of the company-Mectyre..

57. According to Mr. Jethmalani if a Court acts upon an admission of an accused it has to either act in toto or reject it. In support of this proposition Mr. Jethmalani has placed reliance upon the following judgments:

(i) Hanumant Govind Nargundkar and Anr. v. State of Madhya Pradesh, AIR 1952 SC 343 [LQ/SC/1952/49] wherein it was held that

An admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him. An admission must be used either as a whole or not at all.

(i) Palvinder Kaur v. The State of Punjab, AIR 1952 SC 354 [LQ/SC/1952/56] wherein it was held that

A confession must either admit in terms the offence, or at any rate substantially all the facts which constitute the offence. An admission of a gravely incriminating fact, even a conclusively incriminating fact is not of itself a confession. A statement that contains self-exculpatory matter cannot amount to a confession, if the exculpatory statement is of some fact which, if true, would negative the offence alleged to be confessed. A statement which when read as a whole is of an exculpatory character and in which the prisoner denies his guilt is not a confession and cannot be used in evidence to prove his guilt.

58. Reliance has been placed by the Special Judge mainly on the credit note from Bofors into the account of Mont Blanc. This is the payment made by Bofors to the credit of Mc Intyre Corporation. Mr. Jethmalani contends that these documents and many other documents which are of the similar nature are the photo copies and since these are photo copies the originals of which have not been procured nor has any evidence been collected that these copies were taken out from the original documents and in spite of being secondary evidence cannot be taken to have been proved by way of secondary evidence. This is apparent from illustration A to Section 63 of the Indian Evidence Act. In the absence of any such evidence the document is nothing but a waste paper as it does not fulfil the requirement of proof by way of secondary evidence as provided by Section 63 of the Indian Evidence Act. Since these documents are not public documents and are rather commercial documents even the certified copies of these documents cannot be taken to have been proved by way of secondary evidence. Even if it is presumed to have been proved as public document the proof of document has to be in terms of Section 78 Clause 6 of the Indian Evidence Act. Section 63 reads as under:

63. Secondary evidence.Secondary evidence means and includes

(1) Certified copies given under the provisions hereinafter contained;

(2) Copies made from the original by mechanical processes which in themselves ensure the accuracy of the copy, and copies compared with such copies;

(3) Copies made from or compared with the original;

(4) Counterparts of documents as against the parties who did not execute them;

(5) Oral accounts of the contents of a document given by some person who has himself seen it.

Section 78(6) provides as under:

78 (6). Public documents of any other class in a foreign country,

by the original, or by a copy certified by the legal keeper thereof, with a certificate under the seal of a Notary Public, or of (an Indian Consul) or diplomatic agent, that the copy is duly certified by the officer having the legal custody of the original, and upon proof of the character of the document according to the law of the foreign country.

59. Mr. Jethmalani further contended that even if it is assumed that the documents are photo copy still the fact remains that what is required is to prove is the truth of the contents of the documents and the truth of the contents of the document can only be proved by oral evidence of the person who can depose about the transaction from his personal knowledge. In addition, there must be proof of authorship of the document. Out of nine documents, only 2 documents contain contract number. The Investigating Judge was not sure of the veracity of these two documents and had sent communication to Swiss Credit Bank and Swiss Credit Bank reply/response to this is relevant.

60. On the angle of conspiracy and law thereon, Mr. Jethmalani has in expounding analysis defended the petitioners on the following premises:

(i) Admission of wrong doing by a party is admissible against that party but not against others. The only exception to this rule is that if there is an admission during the period of conspiracy and it is an admission made for furthering the objects of the conspiracy then under Section 10 it is admissible.

(ii) Once the conspiracy is over the admission of each and every accused/acts binds himself and not the others. If some confession or statement is made during the statement which is made even subsequent to the act that everything was done towards the advancement of the conspiracy that they were together even during the subsistence of the conspiracy, it is not useable against co-conspirator.

(iii) Thus, any statement of any witness or any evidence post 1987 are irrelevant as these cannot be binding upon others. Conspiracy terminates if the objective is either achieved or frustrated or it is voluntarily abandoned. Thus any amount of confessions, admissions, statements, documents pertaining to the dates which are subsequent to the termination of conspiracy are irrelevant and inadmissible in evidence.

(iv) Under Section 8 of the Indian Evidence Act the conduct of a party to the proceedings is important and in the instant case Rajiv Gandhi and S.K. Bhatnagar are not parties to the proceedings being dead persons and therefore the conduct involving conspiracy imputed to them is not admissible qua Hindujas.

(v) It is well settled law and has been fortified in cases after cases and mainly in Sardul Singh case (AIR 1943 PC 176) that any conduct of co-conspirator subsequent to the culmination of a conspiracy is not a conspiracy. The argument that such evidence even if it is the conduct of deceased conspirator is admissible under Section 8 of the Evidence Act has no force and is untenable on the very terms of Section 8. It is reasonably clear that evidence of acts, statement of a co-conspirator either under trial or not on trial but outside the period of conspiracy would not be admissible in proof or of specific issue of the existence of the conspiracy.

(vi) Merely because the result of the conspiracy is continuing does not make the conspiracy of continuing nature. To constitute a continuing conspiracy there must be continuity of action to produce the unlawful result. Similarly extra judicial statement of a co-conspirator is not admissible in evidence where it is not made in furtherance of the alleged conspiracy charged but made in furtherance of an alleged implied and uncharged conspiracy.

(vii) Oral commitment was to exclude the Indian agents. Hinduja was not Indian agents and therefore Bofors excluded him. It is nobodys case that Hindujas participated or had acted clandestinely in their capacity as agent by contacting the public servants or the officials of the Government or the Army Officials. Whatever they paid was towards the obligation of the Bofors to them ranging from 1979 for various services provided by them.

61. On behalf of AB Bofors which has now rechristened it as Kartoagen Keno Octo Mr. Alok Sen Gupta raised mainly two fold arguments.

62. The first and foremost point raised by the Counsel is that where imprisonment of sentence is mandatory trial of a body corporate for any such offence has no meaning as the body corporate is an artificial and juristic person and not an actual person who can be sent to jail. In support of this proposition, reliance has been placed upon a decision of the Supreme Court in Kalpnath Rai v. State, 1997 SCC 732. It was held by the Supreme Court that wherever and for whatever offence mens rea is an essential ingredient the company or body corporate cannot be prosecuted. Companies are prosecuted under the special Acts where there is a specific provision relating to offence by companies and other person who is responsible to the affairs of the company. On this analogy the Supreme Court set aside the prosecution of the company under Section 3(4) of the TADA as this section necessarily involved an element of mens rea in the commission of an offence. It is only in those cases where element of mens rea is excluded in the commission of offence that company or body corporate can be prosecuted. According to the Supreme Court if a body corporate or company is allowed to be prosecuted for those offences where element of mens rea is essential ingredient like the one in TADA or any other offence under IPC it would be of calamitous consequence to try the company as many persons would be exposed to incarceration for long period.

63. It is contended that in spite of returning a finding that none of the offences accused having been sent for trial excludes the element of mens rea, the learned Special Judge still framed charges against AB Bofors, a body corporate for the offences which necessarily had mens rea as an essential ingredient and provides for imprisonment.

64. It is contended by Mr. Sen Gupta that learned Special Judge has proceeded under the wrong premises while relying on the analogy under Section 11 of IPC wherein a person was defined as inclusive of body corporate or company as a person who also commits an offence of cheating. Section 415 defines cheating and in this regard person referred to is a person who has been deceived and not a person who deceives and person who has been deceived can be body corporate or company but by no stretch of imagination the word person whenever appearing in Section 415 can include a body corporate or a company as the person who deceives has to be liable for imprisonment which body corporate is not. Thus any person being in charge of and responsible to the affairs of the company alone can be prosecuted for offences which provides for mandatory imprisonment.

65. According to Mr. Sen Gupta wherever word person is appearing in any of the Sections of IPC it necessarily refers a person who is a victim but not a person who is alleged to have committed a criminal act for which punishment of imprisonment has been prescribed. Section 3(42) of the General Clauses Act also defines a person including any company or association or body of individuals whether corporate or not. The scheme of IPC wherein a person was defined did not apply to the word` whoever appearing in almost all the Sections of IPC.

66. Had there been any intention on the part of Legislature to make a body corporate or company a person liable to be punished or sent to imprisonment word whoever should have been substituted by word any person but it is not so. The reason is simple. Body corporate or company being a juristic or artificial entity cannot be imprisoned.

67. The judgment relied by learned Special Judge according to Mr. Gupta (Director of Public Prosecution v. Kent & Sussex, 1944 Kings page 146) only laid down the law that if wrong information is furnished by the Director or employee of the company, the company is liable to be prosecuted. The question was whether the offences charged against the company were such which are triable against the company and the limited question was about the liability of the company for the act committed by its officers but it does not mean that the company can be prosecuted for the offence which necessarily involves the sentence of imprisonment. Rather the view in the judgment is contrary as applied by the learned Special Judge. The view taken was that the company cannot be found guilty of certain criminal acts for which punishment is prescribed as it is deemed as a fictional person or entity.

68. Though it was held in the said case that if a criminal act involves a mens rea it is not necessary that the company should be absolved for prosecution but what was held was that company may be prosecuted for an offence which is only liable to imposition of fine. Similar view was taken in Regina v. Mac Donald, CWLR 1138. Martin Ardbo being a human agent of Bofors through which Bofors had been acting can be prosecuted being a person who can suffer punishment for imprisonment for the offences.

69. Second limb of argument is the alleged undertaking given by Bofors that they would have no Indian agents or middlemen for this contract and still they paid commission to the Agents for procuring the contract and therefore committed cheating. Mr. Gupta contended that as they gave in writing that they had no commission agent in India for this contract which meant that they would not pay any commission and whatever commission they were to pay to them would be reduced in the price, the accused moved an application before the learned Judge on 1st February, 2002 requesting him to direct the Government to inform him about the Government policy that no commission agent would be permitted, the prosecution came up with the case that there was no Government policy or document in this regard to be handed over to Bofors. Judge has made a reference in this regard in para 23 that no such Government policy has been brought to his notice. It is contended that in the absence of such a policy payment of commission to Hindujas and for that purpose to Win Chadha or Quattrocchi does not attract offence under Section 420, IPC.

70. Mr. Sengupta further contended that in spite of the letter rogatory sent by the CBI that they are not prosecuting the Bofors Company because of the act of its executives, record of discussion that took place between the Defence Secretary and Martin Ardbo, Chairman of Bofors wherein he was told that there is no policy of the Government to have commission agent and offer was made that the commission made by them has to be reduced in the price of bofors guns, is not correct account of meeting as no such commitment had been given by Ardbo, nor did he send any communication in this regard to the Government that they will not have any commission agent in India. Thus, neither Ardbo nor Bofors can be said to have cheated the Government or having gone back on their commitment to the Government. There is mention in the said record that Ardbo only said to Defence Secretary that he will consider this proposal and will come back to him. According to Mr. Sengupta apart from this record of meeting there is no document produced by the prosecution in which either Bofors or Martin Ardbo ever gave a commitment that they would not have any commission agent in India. The only documents in this regard produced by the prosecution is letter sent by the Joint Secretary, Ordinanace, Mr. G. Sundaram, to the Ministry of Defence (Sub.: 155 mm Gun negotiations.)

71. Mr. Gupta referred to Proforma seeking information on various aspects of the gun one of the columns was about the details of their agents in India. Vide letter dated 19th May, 1984, V.S. Khara informed that the undertaking has been obtained in the prescribed proforma by their agents in india. In the said performa, the Bofors gave name of Win Chadha, Ottavio Quattrocchi as their agents but, however, when the subsequent meeting took place between Ardbo and Bhatnagar on the point that they should reduce the prices of their guns it did not mean that the Government had prohibited Bofors in having agents anywhere in any part of the world for different transactions and payment of commission to them. Thus according to Mr. Gupta by no way it can be deduced that the commissions were paid by cheating the Government and giving undertaking that the Bofors would reduce the price of the gun correspondingly to the extent of the commission paid by them.

72. Mr. Gupta also contended that once the price of the Gun was lowered during the Price Negotiation exercise to the amount of the commission to be paid by the Bofors to Hindujas nothing prevented Bofors to pay any amount to Hindujas either by way of commission or by way of ex gratis for providing their services in the past and even upto the period when alleged commitment or undertaking was given by Bofors to the Government that they would not continue with any commission agent nor would the commission agent deal with the Government on their behalf in the deal, though such an undertaking or commitments by the Bofors ultimately did not form part of the contract which was reduced into writing and rather previous commitments or undertakings or negotiations including the appointment of representative or commission agents were superseded by clause 33 of the contract.

73. According to Mr. Gupta Martin did not give any categorical undertaking that he would not have any commission agent nor would he deal through them. He only told Mr. Bhatnagar in response to his suggestion that he would consider this suggestion of Mr. Bhatnagar. In other words Mr. Martin kept the question of dealing through commission agent open and the conversation between Mr. Bhatnagar and Mr. Martin in a meeting of 3rd May, 1985 which is recorded in the minutes of meeting nowhere binds Martin that he would not involve any commission agent nor would use the services of any commission agents or middlemen. Record of discussion shows that Martin said that he would consider the advice of Defence Secretary on the Policy of the Government of India and take necessary action.

74. Mr. Gupta further contended that even the letter dated 10th March, 1986 whereby Bofors confirmed that they did not have any representative/agent especially employed in India for the project though for administrative services they are using a local firm Anatronic General Corporation cannot be construed as the undertaking given by Mr. Martin in not appointing or continuing with the commission agent but also does not amount to acceptance of the alleged Government policy which is nowhere in writing and it was only through oral discussion that some intention was expressed by Mr.Bhatnagar that as per their new policy they should not have any middlemen or commission agents for negotiating and there should be one to one talk.

75. Mr. Gupta referred to the observations of Supreme Court in Anil Kumar Chowdhury v. State of Assam and Others, (1975) 4 SCC 7 [LQ/SC/1975/106] wherein it has categorically been held that the Government speaks and acts formally and in solemn writing and not informally. Thus in the absence of any written policy of the government the prosecution cannot take the plea that the Bofors or Martin or for that purpose Hindujas have acted against that policy and thereby have cheated the Government.

76. Having summed up versions of both the sides and made the inventory as to the material against the public servants, Win Chadha, Quattrocchi M/s. A.B. Bofors and Hinduja brothersthe petitioners and scanned the impugned order passed by the learned Special Judge which is replete with irrelevant inferences, conjectures, surmises and even highly unwarranted and uncalled for remarks and personal opinion about the persons and personalities involved and aspersions on the constitution of JPC which has been rightly opined by Mr. Jethmalani and Mr. Sibal tantamounting to breach of privilege, I straightaway advert to the crux of the matter and conclusions emerging from the rival contentions.

Conclusions:

77. Aforesaid conspectus of facts itself shows that so far as Public Servants viz. late Sh. Rajiv Gandhi and late Sh. S.K. Bhatnagar are concerned sixteen long years of investigation by a premier agency of the country viz. CBI could not unearth a scintilla of evidence against them for having accepted bribe/illegal gratification in awarding the contract in favour of Bofors. All efforts of CBI ended in fiasco as they could not lay hand upon any secret or known account of these public servants where the alleged money might have found its abode either in Swiss Banks or any other Bank or vault. However, their efforts, particularly due to the co-operation of Swiss authorities and Swiss Banks fructified in tracing the money received as commission by middlemen/agents employed by Bofors for negotiating the contract. They are Win Chadha, Quattrocchi and Hindujas.

78. Again not an iota of evidence has surfaced that may even remotely suggest or suspect that the money received as commission by them was held by them as a money for the public servants for such a long period. On the other hand, the evidence is that Hindujas used the money for their own business by way of withdrawing from the main account and transferring it to other accounts of theirs.

79. Had there been any such arrangement or conspiracy that as many as three agents would be paid commission in the garb of illegal gratification for public servants for awarding contract there was no difficulty because of the confidentiality clause for the recipients and the givers to give indication in the accounts as nominee or joint-holder or any other kind of arrangement or indication that any amount was subsequently withdrawn and transferred to any secret account of public servants.

80. Similarly Quattrocchi also held the money in his own account and had been transferring part of monies in different accounts opened by him. To allow the imagination to fly that AB Bofors paid bribe to public servants through Hindujas, Chadha and Quattrocchi to get the contract and in return they held the amount of alleged commission paid by AB Bofors as a trust for more than a year or so is nothing but to deceive oneself. This itself rends the CBIs case from foundation to cornice.

81. Had element of bribe been involved in awarding the contract, the need for involving three agents would not have arisen. Was money of bribe being divided in three parts through three different persons. The question arises as to who succeeded in getting the contract. Hindujas or Quattrochi or Chadha. In this case all the three. What an inference! CBI was right in not including the offence of taking bribe either by the public servants or Hindujas, Quattrocchi having held the moneys received by them from Bofors as a trustee for public servants as it was not equipped with any material or evidence nor did it obtain sanction for this offence which is punishable under Section 161, IPC.

82. To say that public servants had also their share in the amount of commission paid by Bofors to Chadha, Quattrocchi and Hindujas totalling 8.3% is highly preposterous as learned Special Judge himself says that CBI has not collected any evidence in this regard nor any evidence is there that these moneys were being held as a trust for public servants. Moneys were paid almost a year before the news of procurement of contract by bribing Indian politicians broke out.

83. Merely because the code names in the Bank accounts of Hindujas were found does not mean that these moneys were received as bribery and were kept in the secret accounts of the public servants. Micheal Arthor John of Swiss Bank Accounts says that all bank accounts in Switzerland like everywhere else are assigned accounts numbers. The only real distinction between the numbered account and a regular account is that the ownership of a numbered account is known to fewer bank employees. The added secrecy consists merely of the reduced likelihood of an indiscretion on the part of the banks clerical staff. Thus from the legal point of view a numbered account has no specific significance.

84. Having failed to lay hand upon any kind of evidence as to payment of illegal gratification to public servants or holding the moneys received by the Agents as trustee, CBI like a drowning person clutched a flimsy straw by introducing the doctrine of misusing an official position by way of inducting even an element of conspiracy which is unknown to such a penal offence purely on the conjectural and inferential premise that by hastening the decision in favour of Bofors and without considering the offer of a rival viz. Sofma that too made subsequent to the letter of intent was issued in favour of Bofors the public persons had misused their official position.

85. On the face of it such a theory is difficult to ram down the throat for the simple reason that when the contenders were shortlisted and called upon to give the undertaking that they would neither involve Indian agents nor would pay commission to them and would rather reduce the price by the corresponding amount of commission they would even otherwise have paid to their Agents they re-quoted their reduced price and Price Negotiating Committee comprising several members though headed by late S.K. Bhatnagar had no other option than to decide in favour of Bofors whose gun had not only edge over as to its quality and peculiar feature of shoot and scoot but at relevant time cheaper in price also. It was after Letter of Intent (LOI) was issued that Sofma woke up and like a loosing gambler offered to reduce the price further. Though it was too late yet the price in terms of money was higher as Bofors scaled down its height by offering ten guns free.

86. Let us assume that Sofma price was cheaper though reduced when the stage was over, still the Expert Committees opinion as to the preference of Bofors could not and ought not have been ignored even if it was little costlier. Security of a nation cannot be jeopardised for a few bucks here or there. Life of a soldier is more precious and cannot be bartered like this. By no stretch of imagination such a decision can be termed either as hasty decision as the material exercise took more than a year or tainted decision as element of illegal gratification is not only utterly wanting but has also not been alleged by the CBI and rightly so as not a shred of evidence has surfaced uptil this day.

87. If decision making authorities be in any field are prosecuted like this, no authority, no person would take decision nor would dare to take decision. However, it does not mean that the element of illegal gratification cannot exist in deserving cases. Possibility of procuring award of even of well deserving contract through illegal gratification to the persons involved for taking decision cannot be ruled out. Offence of giving or taking illegal gratification is independent of all such considerations. But the condition is that like any other offence, offence of illegal gratification has to be proved by way of evidence even if it gives rise to strong suspicion because of available material in trying a person for this offence. As has been observed above not even a trace of evidence has surfaced in spite of stupendous efforts made by CBI whose officers sojourned to Switzerland and other countries for several years to dig out the material but all in vain.

88. Thirteen long years investigation has only led to the inference that M/s. A.B. Bofors through its President Martin Ardbo had entered into a criminal conspiracy with the agents viz. Quattrocchi and Hinduja brothers and Win Chadha to cheat the Government of India by fraudulently and dishonestly representing that no agent or middlemen would be used for negotiating the contract and they had reduced the price of gun corresponding to the amount they would even otherwise have paid as commission and after getting the contract they paid the originally agreed commission to its aforesaid gents and thereby induced the Government of India to do an act that caused wrongful loss. M/s. A.B. Bofors and Martin Ardbo also made false documents by fraudulently agreeing to pay to Svenska Corporation i.e. Mr. Quattrocchi 80 million SEK in instalments whereas it had informed to the Government of India that there was no such arrangement with any agent or middlemen.

89. Charges for the offences punishable under Sections 120-B/420, IPC, Section 5(2) read with Section 5(1)(d) of the P.C. Act, 1947 and under Section 161, IPC against the petitioners for having entered into criminal conspiracy with the public servants to cheat the Government of India and having abetted the public servants to commit criminal misconduct by abusing the official position and accepting the bribe in awarding the contract have been framed purely on the basis of irrelevant inferences, presumptions, surmises, conjectures and through riotous imagination by even introducing personal knowledge of facts which were not set up by the CBI little realizing that criminal trials cannot proceed nor can succeed on such premises without there being any material or evidence corroborating those inferences. Neither is this the law nor the edifice nor even the crutches the prosecution of any person can stand on.

90. Learned Special Judge has by framing charges for these offences fallen into a grave erroneous concept of criminal trial by traversing beyond realm of offences committed by public servants and the petitioners. Some of the glaring instances of such conclusions and observations that are self-contradictory and self-defeating though have been alleged by Mr. Jethmalani and Mr. Sibal result of personal bias of the learned Judge of Mr. Gandhi and his style of functioning are projected in the following paras of the order:

(i) Mr. Rajiv Gandhis statement made in the Lok Sabha on 20th April, 1987 has been extracted by the Special Judge which has not even remotest relevance but mind-boggling conclusion has been drawn therefrom by the learned Special Judge as to Mr. Gandhis complicity in the conspiracy and traits of his personality and style of his functioning.

91. The relevant extracts of Mr. Gandhis statement in the Lok Sabha are:

Para 229

And like Pantji has said now, you show us any evidence, we do not want proof. We will bring the proof. You show us any evidence that there has been involvement of middlemen, of pay-offs or of bribes or commissions, we will take action and we will see that nobody however high-up is allowed to go free. To the best of our knowledge, there is no agent involved. We have been assured by the company, we have been assured by the Swedish Government that there is no agent who has been involved. We have got a telex from the Swedish Government saying that they had checked up and on the basis of that, they have said no.....

Comments of learned Special Judge :

Para 230

How encouraging and bold! As if there is a ring of sincerity and the Prime Minister Rajiv Gandhi is out to find truth. Rajiv Gandhi was not naive and impetuous. He pretended to be a maverick. All this was, however, a deliberate posturing and part of a well conceived and pre-arranged plan to apparently show the non-involvement of middlemen/agents in the deal and to achieve the oblique purpose by direct negotiations on the one hand and to have secret middlemen on the other hand. (Reproduction was necessary)

Para 231

It is useful to refer to the statement of Arun Nehru. He was not in the Defence Ministry or otherwise concerned with this matter. He stated that on the direction of the Prime Minister he had to discuss the 155 mm gun deal with Swedes and others. It was Rajiv Gandhis style of functioning. Shri V.P. Singh was also not the concerned Ministry, but he was asked by Shri Rajiv Gandhi to speak to Mr. Palme instead of asking Sh. Narsimha Rao who was then Defence Minister. He would ask several people to do the same thing at the same time. Each person would not know what the other person is upto.

(ii) Presumption raised as to the monies received by commission agents as trustees for bribe taken by public servants.

Para 311

All this shows that the moneys paid or at least a substantial part of the same paid to these so-called agents/middlemen was not meant for them but was obtained at the behest of Sh. Rajiv Gandhi to be passed on further. Where further and in what manner has not been possible for the CBI to unearth possibly because of sudden media exposure which made the recipients of the money. (Emphasis supplied)

Para 287

Investigations in Guernsey (Channel Islands) have also revealed that the entire money, i.e., US $ 9.2 million (received by Quattrocchi) was further channelled to various accounts in Switzerland and Austria, within a period of 10 days of its receipt in Guernsey. It seems that the money has not yet been withdrawn though it had been kite-flying from one account to another. It also seems that the money was meant to be in trust for someone. (Emphasis supplied)

(iii) Comments as to the Constitution of JPC

Para 236

JPC was constituted under public pressure and that of the opposition but it was packed with people belonging or sympathetic to the ruling party.(According to Mr. Jethmalani & Mr. Sibal this constitutes breach of privilege of the House and reflects the personal knowledge of the Judge about Indian politics).

(iv) About political and diplomatic consideration of such decision, learned Special Judge thinks the Government should have made open proclamation about it.

Para 250

Taking a political decision in deals of this kind is not quite uncommon and cannot be ruled out. In fact, the countrys philosophy, its leadership and other similar factors do count in taking decisions. Such decisions can be completely political decisions or the political factor can become an important input in the decision making process. In this case, however, there was no open proclamation of political understanding or equation to give contract of supply of guns and gun systems to Bofors. The two Prime Ministers had twice met and discussed the contract. What were the exact deliberations between the two is not known. (Emphasis supplied)

(v) Presumption as to clandestine way of receiving bribe.

Para 355

Clandestine manner of payment was adopted in this defence deal by the high and mighty involved in this case, to ward off/obvious dangers of ruining political and public life which is involved in payment through open sources on exposure besides difficulties and complications in keeping such huge money. Layers of secrecy and privacy are thus laid to achieve the desired ends.

Observations in para 78 are entirely presumptive :

Para 78

Irrespective of the correctness, propriety or otherwise of awarding the contract to Bofors, if any part of the amounts paid by Bofors to the agent firms/companies was passed on to and received by any public servant, as there are reasons to believe, it could be nothing but illegal gratification and the offence of bribery would be committed. If this was done pursuant to an agreement or understanding between Bofors, the concerned firms/ companies and any public servant or servants, as there are reasons to believe, the agreement would be illegal and amount to criminal conspiracy. Even if the agents had received the payments as gratification in relation to the contact as explained earlier in this FIR, such receipts would be illegal.(Order dated 29.8.2002)

92. I deem it needless to refer to catena of authorities laying down the principles for framing the charges for the sake of precision and refer to the celebrated authority of Supreme Court in this regard as these principles have been fortified in cases after case. These principles have been culled out in Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4 [LQ/SC/1978/327] as under:

(1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.

(2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial.

(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.

(4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced Court cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the judge should make a roving inquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.

93. By no standards, aforesaid conclusions or inferences and references drawn and made by the learned Special Judge without any material or evidence fall within the judicial domain. These are imaginative, presumptive and devastating conclusions so far trial for criminal offences is concerned. These conclusions cannot even form basis for having suspicion what to talk of strong suspicion and do not leave even a trace on the anvil of principles governing the framing of charges.

94. Once it is found that charge of conspiracy against the public servants cannot stand nor can be proved the question of proving the charge of abetment against the petitioners and even other players in this game does not arise as the genesis of the charge against them is charge against the public servants. Thus, in the absence of public servants against whom main charge of conspiracy was made, charge of abetment of conspiracy with public servants to cheat the Government of India and misuse of official position by public servants and taking bribe by public servants for awarding the contract to M/s. AB Bofors.against the intermediary or the petitioners who are not public servants can neither be framed nor subjected to trial.

95. It is clear from the evidence that the user of the armament namely the Army had the ultimate decisive voice and therefore allegation of selecting a less qualitative and more expensive has no basis. It was the technically expert opinion of the Army that the Government should go for Bofors because of its peculiar feature of shoot and scoot. None of the public servants had any role in selecting the gun.

96. After 17.2.86 when the Army indicated its choice, finally through Deputy Chief of Staff who was member of the Technical Committee and expressed its stand that even if Bofors gun is costlier, that is the gun which the Army wants, it was obvious that if the army changed its mind in favour of Bofors, it did not do so because of intervention of public servants or Bofors or present petitioners or Quattrocchi or Win Chadha. It was purely an opinion by a body of experts.

97. The element of illegal gratification as envisaged under Sections 161 is according to the prosecution case itself utterly wanting inasmuch as that there is no evidence that the official report of the Army in favour of Bofors was managed, manipulated or procured through corrupt or illegal means. Since the best judge of the weapons to be used by the Government is the Army or its Committee of Technical Experts the Government had no business or role to overrule that decision. However the Price Negotiating Committee had a limited role of negotiating the price acting on the premise of the report of the Army which gave its report on 17th February, 1986 to the effect that Swedish Bofors has a clear edge over the French Sofma The report was submitted by the Deputy Chief of the Army Staff which was approved finally by the Chief of the Army Staff.

98. Unless there is a corrupt motive imputed to the choice in favour of one gun or the other even if it is costlier price wise but quality wise equally good though Bofors had an edge over Sofma because of its peculiar feature of shoot and scoot the offence under Section 161, IPC does not attract and nowhere the prosecution has levelled these allegations nor has produced any material in support of corrupt motives. Merely because the Sofmas offer of reducing the price came immediately after the letter of intent had already been issued to Bofors cannot lead to any inference that the decision in favour of the Bofors was with ulterior motives or by accepting bribe, etc.

99. It is not the case of CBI that Bofors or Hindujas or Quattrocchi or Chadha had accepted the bribe money on behalf of the public servants under the garb of commission and that the bribe money allegedly paid by the Bofors was retained by Hindujas or others as custodians. Until and unless the money in the account of Hindujas and others is related to the bribe money to the public servants, charge for abetting in receiving the bribe punishable under Section 161 read with Section 165A, IPC cannot stand or stick.

100. It is only on presumption that the learned Special Judge has concluded that the money received by Hindujas in their account of Mc Intyre must necessarily be an amount received as bribe on behalf of public servants though shown as commission paid by Bofors to them for the award of the contract. Everything is shrouded in conjectures, in surmises and fancies and is not based upon any documentary evidence or the investigation.

101. Learned Judge has introduced his own perception and knowledge that the amounts paid by Bofors to their commission agents were to be passed on and paid to the public servants and were obtained and held by them as trustee. They all held these moneys for one year. Hindujas not only transferred part of the money to other accounts of theirs but also used for their business purposes. In spite of the fact that no evidence was there to show that Indian politicians and defence personnel for themselves actually received pay-offs, learned Special Judge accuses the CBI for having not gathered the evidence in support of the allegations projected in the F.I.R. How can a judge create evidence of his own when there exists none

102. In the absence of any evidence or material no inference could have been drawn that the moneys received by Hindujas and Quattrocchi as commission were received as bribery on behalf of the public servants. Therefore, the charge for the offence under Section 165A, IPC against the petitioners is wholly unsustainable. Merely because prosecution has not collected any evidence or any material in respect of the offence under Section 165A, IPC read with Section 161, IPC the Court cannot draw an inference on his own of commission of such an offence by public servants and abetment by the petitioners.

103. The use of codes like Lotus, Tulip/Mont Blanc are part of banking systems and accounts disclose that these were in the name of Hinduja Brothers. Had the moneys been retained on trust there was no difficulty for the public servants to have opened such accounts at subsequent point of time and the commission agents having transferred part of the moneys which were allegedly received as bribe in the coded accounts of public servants. If the CBI was successful in tracing the accounts of the petitioners and Quattrocchi there was no difficulty at all in tracing such accounts of the public servants as Swiss authorities had extended all possible cooperation and furnished every information with regard to the accounts of the petitioners and other persons.

104. The charge for the offence under Section 161 i.e. against the public servants for having accepted the illegal gratification other than legal remuneration in awarding the contract does not arise out of any of the material or evidence collected by the CBI nor was such a charge proposed by the CBI. This charge is result of imaginative, presumptive and conjectured conclusion by the learned Special Judge. So much so while taking the cognizance after perusing the entire charge-sheet the learned Special Judge did not summon the petitioners for offence under Section 161 read with Section 165A of the IPC. It is not the case of the CBI that moneys received by the alleged agents have been passed on either directly or indirectly to either Mr. Bhatnagar or Mr. Rajiv Gandhi.

105. Thus even if the prosecution case is assumed as correct and accepted as a whole, offences under Sections 161/165-A, IPC are not made out either against public servants or the petitioners.

106. As regards offence of criminal misconduct by abusing official position to provide pecuniary advantage to the petitioners punishable under Section 5(2) of the P.C. Act and conspiracy to cheat the Government by awarding the contract to Bofors there is no evidence on record to suggest that either Rajiv Gandhi or Bhatnagar used any direct or indirect influence on anybody including Technical Committee of Army Experts or on Negotiating Committee that comprised seven members or so and all were high officials of the Government of India for the award of the contract to Bofors or as to the price. Rightly so. Had it been so, then every public servant, whosoever was member of the Technical as well as Price Negotiating Committee would have landed themselves in the net of CBI for prosecution along with the petitioners and public servants.

107. The only argument of the CBI is that presumption should be drawn that the haste with which the contract was awarded was a result of the conspiracy between Hindujas, Quattrocchi, Bofors and the public servants to award contract in favour of Bofors prior to the visit of Rajiv Gandhi to Switzerland. The prosecution has not brought anything on record as to what different role was played by the members of the Negotiating Committee than the role played by Mr. Bhatnagar. Thus the element of dishonest intention is utterly wanting.

108. Section 4 of the Prevention of Corruption Act, 1947 relates to presumption where public servant accepts gratification other than legal remuneration. The presumption under this provision is available only to the person who is being tried for the offence under Section 161 of IPC and clause (a) or clause (b) of Section 1 of Section 5 of P.C Act of 1947 which directly relates to the person who has directly received the bribe as a public servant. Such a presumption is not available against the petitioners who are not public servants. The petitioners are being tried not under clause (a) or clause (b) of Section 5 but under clause (1)(d) of Section 5(1). The presumption under Section 4 is not available for offences under Section 5(1)d.

109. The charge of criminal misconduct by way of abusing official position against the public servants as well as the petitioners in abetting the same is mainly based upon the three circumstances(i) undue haste in obtaining approval and issue of letter of intent by ignoring the offer of Sofma, (ii) asking the Swidish Prime Minister in April, 1997 not to hold any inquiry into the allegations made in the Swedish broad cast and (iii) stopping officers of M/s. AB Bofors from visiting India to offer their explanation in July, 1987.

110. Once final decision was taken that the India should go only for Bofors gun it was immaterial whether the signatures of concerned persons were obtained within 48 hours of the Negotiating committee having recommended Bofors gun though in this case announcement of the decision by Mr. Rajiv Gandhi who visited Sweden on 15th March, 1996 in connection with funeral of Swedish Prime Minister Mr. Olof Palme about awarding the contract in favour of Bofors was nothing but good will gesture. Even otherwise in commercial contracts of Defence matters political and diplomatic considerations play a part, other things being equally important. France was also a supplier of arms to Pakistan. In case of need the supply of Sofma could have squeezed.

111. So far as the allegations that Mr. Rajiv Gandhi requested the Swedish Prime Minister to desist from holding an inquiry in April, 1997 it is of no significance as it was done on account of a decision taken by the Cabinet Committee of Political Affairs after deliberating the issue that since the Joint Parliamentary Committee was going to enquire into the matter it would be not proper for officers of the Ministry to meet the Bofors officers. As regards the haste in issuing the letter of intent though there was no cut-off date for the price negotiating committee but still Mr. Bhatnagar informed Mr. Arun Singh about the offer of Sofma after the issuance of letter of intent, Mr. Arun Singh felt that issuance of letter of intent should not come in the way of consideration of offer of Sofma and it was on his advice that Bofors was asked to revise its offer and once the Bofors agreed to give 10 guns free its price got reduced from that of Sofma. It was only after 12 days i.e. on 24th March, 1986 that the contract was signed with M/s. AB Bofors. So far as General Sunderjis plea for cancellation of the contract is concerned it was on the moral ground and not from commercial or technical aspects.

112. Thus by no stretch of imagination these circumstances lead to even remote inference or suspicion about criminal misconduct by the public servants in abusing the official position as contemplated under Section 5(1)(d) of the Prevention of Corruption Act. It envisages that a public servant is said to commit the offence of criminal misconduct if he, by corrupt or illegal means or by otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. None of the ingredients are made out from the aforesaid circumstances even if these are assumed to be correct.

113. Subsequent to 1986 there is no material collected by the CBI in support of charge of abetment to corruption. Evidence collected by CBI subsequent to 1986 mainly confines to accounts of the petitioners, Chadha and Quattrocchi and the money paid to them by the Bofors and this by no stretch of imagination can be brought within the mischief or ambit of Section 5(1)(d) or 5(2) of the P.C. Act or Sections 161/165A of IPC. By the same analogy no charge of corruption can be established against S.K. Bhatnagar as there is no allegation that he being the participant in decision making process was given bribe or he influenced the decision as the whole material is based on surmises and conjectures and flimsy propositions of law.

114. There is no allegation against Mr. Rajiv Gandhi that he either participated in the Price Negotiating Committee or he gave any opinion on the quality of the guns as well as price of the guns. He only signed the file on the basis of the report of Price Negotiating Committee and against Mr. Bhatnagar there is no charge of having ascertained the quality by corrupt means. On the other hand the case of the prosecution is that though the quality of Bofors was better but its price was more than Sofma.

115. By awarding a contract to one of the contenders whose goods had an edge over the others or say were equally good and were cheaper at the relevant time cannot be gone into for the purpose of charge of cheating qua the public servants. Period of conspiracy is from April 1985 to April, 1987. Prosecution has also relied upon this period while invoking the offence under Section 120B, IPC.

116. Unless the nexus is complete between the public servants, A.B. Bofors and the commission agents, the charge of bribe or illegal gratification or misuse of official position under Section 5(1)(d) of the P.C. Act or charges of conspiracy of public servants with the petitioners to cheat the Government of India punishable under Section 120-B and Section 420, IPC are difficult to stand.

117. Even on legal premise trial qua public servants cannot proceed as both the public servants viz. Mr. S.K. Bhatnagar and Mr. Rajiv Gandhi are dead and not in a position to defend themselves. That is basic criminal jurisprudence that the Court cannot give findings against a person who is not in a position to defend himself. Legal presumption that every accused is innocent unless is proved to be guilty is also available in respect of public servants. So far as Quattrocchi and Ardbo are concerned their case has already been segregated for the purpose of trial as one is absconding and other has not been repatriated. In the instant charge-sheet public servants, AB Bofors, Win Chadha and Hindujas have been clubbed together. Win Chadha has also died and therefore trial against him also cannot proceed. Even if we assume that Ardbo and Quattrocchis trial has been segregated still the trial of public servants cannot proceed.

118. When the charges for the main offence of awarding a contract against illegal gratification and misconduct by abuse of official position and charge under Sections 120-B/420, IPC against public servants for having conspired with A.B. Bofors, Hindujas, Chadha and Quattrocchi to cheat the Government of India prove damp squib, charges of conspiracy with public servants to cheat the Government of India or abetting the public servants to commit offences under Section 5(2) read with Section 5(1)(a) of the P.C. Act and offence under Section 161, CPC against petitioners and other commission agents viz. Quattrocchi and Win Chadha are rendered unsustainable. On all these aspects contentions of Mr. Ram Jethmalani and Mr. Kapil Sibal far outweigh those of Mr. Mukul Rohtagi.

119. Now we are left with charges for the offences punishable under Sections 120-B/420, IPC qua the petitioners and Martin Ardbo for that purpose qua Quattrocchi and offence under Section 465, IPC against M/s. AB Bofors.

120. First charge is that of criminal conspiracy, which is defined in Section 120-A, IPC, as under:

120-A. Definition of criminal conspiracyWhen two or more persons agree to do, or cause to be done

(1) an illegal act, or

(2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:

Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.

121. As is apparent, criminal conspiracy involves an agreement to do a legal act by illegal means or an illegal act. It can be proved either by direct or circumstantial evidence. If it is sought to be proved through circumstantial evidence it should lead to one and one inference that is commission of the offence. Here the object of conspiracy was at the most amongst the AB BOFORS and the commission agents inasmuch as AB BOFORS deceived the Government of India by fraudulent representation that no agent or middlemen would be used in the negotiations of the contract and they would reduce the price of the guns corresponding to the amount they would have otherwise paid to their commission agents. To impute such a charge to the public servants is beyond comprehension as the object of conspiracy was to misrepresent the Government that there would be no middle men and agent for negotiating. Such an act comes within the mischief of cheating as defined in Section 415 of the IPC which defines cheating as under:

415.CheatingWhoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat.

ExplanationA dishonest concealment of facts is a deception within the meaning of this Section.

122. Cheating is also alleged inasmuch as that the Government of India was deceived about price and quality of the Bofors gun being cheaper and superior than that of Sofma. As regards the price there was no misrepresentation that it was cheaper than Sofma. Ultimate decision was that of the negotiating committee which was based on competing offers. The negotiating committee and the Government of India had come to the conclusion that the Bofors contract was cheaper than that of Sofma. The very fact that the user of the gun namely the army had recommended the Bofors gun as the appropriate gun for Indian needs after evaluating its specifications, technique etc. and so much so they also recommended that even if Bofors gun was little more expensive it was the only gun which satisfies Indian needs rules out such an allegation.

123. The contract was awarded after series of meetings detailed discussions on every aspect including technical, financial and contractual between the manufacturers and the working groups constituted by the price negotiating committee. But act of misrepresentation about commission agents and proportionate reduction in price amounts to not only deception but fraudulently or dishonestly inducing the Government of India to do an act that caused wrongful loss to the tune of Rs. 100 crores or so as the agreed commission amounted to the said amount though by the time news broke rupees 64 crores had been paid and such an act does come within the mischief of Section 120-B and Section 420, IPC qua the petitioners and for that purpose Martin Ardbo and Quattrocchi.

124. So far as the charge of criminal conspiracy to cheat the Government qua the petitioners vis-a-vis the commission paid by Bofors to its agents is concerned it is found that Bofors had misrepresented that no agent or middlemen would be used for the negotiation of the contract and the price quoted was the reduced price corresponding to the amount, Bofors would have otherwise paid to the commission agents. The moment, the contract was awarded and the first instalment was paid by the Government to M/s. AB Bofors, Bofors made the payment of commission to the commission agents, which were to the tune of Rs. 64 crores though in actuality it would have run into a hundred crores had the entire commission been paid as by that time the news broke out about the procuring of award through bribing the Indian politician and big-wigs.

125. To say that the Hindujas were not at all aware about the aforesaid representation or declaration or undertaking given by M/s. AB Bofors that they would not have any middlemen or agent for negotiation of the contract is beyond comprehension as Hindujas had been working as agents of M/s. AB Bofors since 1979. Their defence that prior to April 1985 there was no policy or decision of the Government of India that there should not be any middlemen or agent in negotiation of the contract and, therefore, there was nothing illegal in execution of the arrangement between them and M/s. AB Bofors may be available to them till April, 1985 but subsequent thereto to say that they had no knowledge about the declaration and undertaking given by M/s. AB Bofors is difficult to accept at this stage and would be as if left hand did not know what the right hand was doing.

126. Further, the defence of the petitioner-Hindujas that they had received the nine payments towards commission for counter globe trading agreement with M/s. AB Bofors and the moneys received by them did not pertain to the commission on account of the contract in question is again difficult to accept at this stage as the documents produced by the prosecution give sufficient indications and create strong doubt that these moneys were received as commission for the contract in question as in some of the accounts the particulars of the contract in question are projected against the payments received by them from M/s. AB Bofors. Same is the position in respect of Quattrocchi and Win Chadha.

127. Documents received by the CBI in execution of letter rogatory revealed that besides payment to M/s. Svenska Inc./Win Chadha and M/s. AE Services/Ottavio Quattrocchi, payments were also also made by M/s. AB Bofors to M/s. Mc Intyre Corporation during the period of May, 1986 to December, 1986.

128. These payments were received in the code names of LOTUS, TULIP and MONT BLANC. These payments have been projected as commission in the credit note specifically mentioning the contract number of the contract in question. The Swedish National Audit Bureau mentions that these payments show that commissions were made to the companies accounts in Switzerland in relation to the Bofors FH-77 deal.

129. Admissibility of the documents in evidence, which should be presumed to be correct as a material produced by the prosecution, can be decided by the trial Court at the appropriate stage. At the stage of framing of charge, the documents which have been provided by the Swiss Authorities and Banks in response to the letter rogatory, have to be presumed to be worthy of reliance for the purpose of framing of charges as the element of strong suspicion is in ample existence not only in respect of petitioners/Hindujas but also Quattrocchi and Win Chadha.

130. Even M/s. AB Bofors has indicated in writing to the Swiss Bank in respect of these payments made in respect of the contract in question. These documents have to be accepted on their face value unless forgery or fabrication appears to be writ large. On the contrary, Hindujas/petitioners have not at this stage succeeded in producing any documentary evidence or any other material to show that they had transacted any business by way of counter globe trading on behalf of M/s. AB Bofors either from India or from any other country in respect of which the payments in question were made to them.

131. Thus, preponderence of probability or plausibility of such a defence is not available to the petitioners/Hindujas at this stage and to prove it they will have ample opportunity during their defence. Mere indication to the Bank and other authorities that they have received this towards the commission for counter globe trading without any documentary evidence in support thereof does not cut ice in the face of the documents in which particulars of the contract are mentioned against some of the payments.

132. Similarly the strong suspicion has been created through these documents as well as various accounts opened by G.P. Hinduja and S.P. Hinduja and various withdrawals from the account of M/s. Mc Intyre Corporation and some communication in this regard do project and create strong suspicion about their complicity. These acts prima facie show the conspiracy hatched amongst ABBofors, Hinduja brothers and Quattrocchi and for that purpose Win Chadha for cheating the Government of India to the extent of amount of commission Bofors would have and had paid and Hindujas and Quattrocchi and Chadha would have received.

133. As regards the charge against M/s. AB Bofors punishable under Section 465, IPC for making false documents, the learned Special Judge has discussed the circumstances and the documents in detail and also the purpose for making these documents and I find myself in agreement with the conclusions arrived by the learned Special Judge in this regard. I do not feel inclined to interfere with.

134. For instance, the agreement between M/s. AB Bofors and Moineao dated 27th December, 1985 mentioned that Bofors had decided to cancel the earlier agreement between the parties and have made fresh settlement, which has been culled out in the impugned order in para 362. It is obvious that the object for making these documents was to show that Bofors has agreed to pay US $ 80 million SKE in instalment, which is the exact amount, which was paid to Hindujas as commission through M/s. Mc Intyre Corporation in three different coded accounts.

135. Similarly, another agreement between M/s. AB Bofors and M/s. Svenska Inc. dated 2nd January, 1986 contains a clause that a contract for sales related to Bofors 155 mm field Howitzar system including the Supply, Contract and Licence Agreement signed on 24th March, 1986 Bofors will pay commission of 3.2% of the ex-works value of orders. Though these documents were executed in January, 1986 but makes a mention of the contract signed on 24.3.986. This agreement also shows payment as commission as has been rightly observed by the learned Special Judge that the purpose for making both these false documents was to give impression that settlement with agents have been made and they have been paid settlement/winding up charges but these documents came to be made during the relevant time. The charge for the offence punishable under Section 465, IPC is thus sustainable.

136. Next question that arises for decision is whether M/s. AB Bofors who is a juristic person can be charged for the offence that prescribes mandatory punishment of imprisonment as a juristic person cannot be sent to jail. Offences punishable under Sections 120B and 420, IPC prescribe mandatory punishment by way of imprisonment plus fine.

137. Recently the Supreme Court in the Assistant Commissioner Assessment-II, Bangalore and Others v. Velliappa Textiles Ltd. & Anr., Crl. A. No. 142/94 decided on 16th September, 2003 has dealt with this proposition of law by formulating the following two questions :

(1) Whether a company can be attributed with mens rea on the basis that those who work or are working for it have committed a crime and can be convicted in a criminal case

(2) Whether a company is liable for punishment of fine if the provision of law contemplates punishment by way of imprisonment only or a minimum period of punishment by imprisonment plus fine whether fine alone can be imposed

Supreme Court gave the answer to these questions like this:

Criminal lialbility of a company arises only where an offence is committed in the course of the companys business by a person in control of its affairs to such a degree that it may fairly be said to think and act through him so that his actions and intent are the actions and intent of the company. And it is not possible to attribute element of mens rea of a juristic person, which requires positive act of omission or commission. Since this cannot be attributed to a juristic person, it is difficult to accept the proposition of punishing a company wherein mens rea element is necessary. It is all the more difficult in the event of mandatory punishment that leads to imprisonment.

(2) Where the Legislature has granted discretion to the Court in the matter of sentencing, it is open to the Court to use its discretion. Where, however, the Legislature, for reasons of policy, has done away with this discretion, it is not open to the Court to impose only a part of the sentence prescribed by the Legislature, for that would amount re-writing the provisions of the statute.

138. In view of the law laid down by the Supreme Court it is difficult to frame the charges for the offences punishable under Sections 120B/420, IPC against M/s. AB Bofors as both the offences involve element of mens rea and prescribe mandatory punishment leading to imprisonment. However, its President Martin Ardbo as and when he becomes available shall be charged for these offences.

139. As regards the offence punishable under Section 465, IPC read with Section 464, IPC there is discretion with the Court to either impose a sentence of imprisonment or sentence of fine and, therefore, charge for this offence can be framed against M/s. AB Bofors.

140. In the result, the public servants are completely absolved of all the allegations leading to the offences punishable under Section 120B read with Section 420, IPC, for having entered into conspiracy with Bofors and its agent to cheat the Government of India to the extent of commission amount, Section 5(1)(d) read with Section 5(2) of the P.C. Act and Section 161 of IPC for abusing their official position and accepting illegal gratification by awarding the contract to AB Bofors. Similarly, the petitioners AB Bofors and Hindujas are also absolved from the offences of having abetted the public servants to misuse or abuse their official position and also having abetted the public servants to have received the illegal gratification in awarding the contract in question, which is punishable under Section 165A of IPC.

141. To sum up following conclusions emerge from the aforesaid discussion:

(i) Charges for the offences punishable under Sections 120B/420, IPC and Section 5(2) read with Section 5(1)(d) of Prevention of Corruption Act 1947 and Section 165A read with Section 161, IPC against the petitioners for having entered into a criminal conspiracy with the public servants to cheat the Government of India and having abetted the public servants to commit criminal misconduct by abusing their official position and taken illegal gratification for awarding the contract are quashed.

(ii) The charges that need to be framed against the petitioners P.P. Hinduja, G.P. Hinduja and S.P. Hinduja for the offences punishable under Sections 120B/420, IPC for having entered into a criminal conspiracy between April 1985 to March 1986 to cheat the Government of India by fraudulently and dishonestly representing that there were no agents involved in the negotiation for the contract and further that the price quoted was the reduced price proportionate to the amount of commission they would have otherwise paid to the agents and thereby induced the Government of India to award the contract in favour of Bofors and caused wrongful loss to the Government of India to the extent of the amount they would have paid as commission to the agents viz. Hindujas, Win Chadha and Quattrocchi.

(iii) Charge for the offence punishable under Section 465, IPC for having made false documents as referred in the impugned order shall be framed against M/s. AB Bofors.

142. Since the cases were brought within the jurisdiction of the Special Judge merely by including the offence punishable under Section 5(2) of Prevention of Corruption Act, 1947 on account of criminal misconduct by public servants by abusing their official position by awarding the contract so as to gain pecuniary advantage to Bofors and its agents and themselves and all other offences were triable by the Magistrate and since the charge for this offence has been held to be unsustainable the cases against the petitioners including those of Martin Ardbo and Mr. Quattrocchi shall stand transferred to the Chief Metropolitan Magistrate for framing of charges as observed in this order.

143. In view of inordinately procrastinated investigation CMM shall in order to maintain and restore the confidence of people in the effectiveness of administration of criminal justice, take up the case as far as possible on day-to-day basis and try to conclude the trial and decide the case as expeditiously as possible. CBI shall also confine its evidence strictly in terms of the charges for the offences punishable under Sections 120-B/420, IPC against the petitioners and offence under Section 465, IPC against M/s. AB Bofors. Parties to appear before CMM on 23.2.2004.

144. Petitions are disposed of accordingly.