By: Murali krishnan
December 9, 2002

You haven't heard the last on the resignation of Justice K. Venkataswami, the one-man commission inquiring into Tehelka's expose on corruption in defence deals, just yet. Having presided over a high-profile inquiry for 20 months and conducted 181 sittings-in the face of subtle and not-so-subtle pressures-Justice Venkataswami's resignation has come as a reprieve for the Vajpayee government. Unfortunately, the judge's hasty exit comes at a time when his findings were ready for release.
This has been embarrassing for the government, to say the least.

Was Justice Venkataswami made a victim of political shenanigans (his second assignment, as chairman of the Authority for Advance Rulings, was formalised in May this year)? Was the Congress' outcry against his appointment in Parliament last fortnight used as a ruse to scuttle the probe, and then force his resignation? And finally, what forces were at work that left Venkataswami no option but to take the fall?

Three days after he put in his papers, Outlook spoke to a visibly upset Justice Venkataswami, but he refused to be drawn into the controversy.

He had only this cryptic remark to offer: "I will not comment on these questions. It is for you (the press) to investigate." The commission's counsel, Gopal Subramaniam, termed Justice Venkataswami's exit "unfortunate".

Yet, a close look at the hearings and orders passed by the commission preceding the judge's resignation is revealing, and its fallout perhaps answers some of the questions. Insiders also hinted that the in-camera proceedings on the 15 defence deals that the judge was looking at clearly revealed a "deviation" in purchase procedures. "In some cases, it was found that the imperatives of national security were not taken into consideration," admitted a commission counsel.

In at least 11 defence deals examined by the judge including those for hand-held thermal imagers, armoured recovery vehicles, Barak missiles, Krasnapol laser-guided artillery shells and the Kornet missiles-all finalised during George Fernandes tenure as defence minister-proper procedures were not followed. A large number of witnesses, including serving and retired military and civil officers accused of accepting bribes or divulging incriminating details before Tehelka's hidden camera, had deposed before the commission, and pointed out "discrepancies" in procurements.

But, according to sources, it was the cross-examination relating to the financial aspects of the expose that led to a controversy erupting and, consequently, the current mess. The commission was about to begin probing the government's charge that Tehelka and its investor, First Global, owned by Shankar Sharma and Devina Mehra, had a financial motive and that the defence scam expose was so timed as to engineer a collapse in the stock market. First Global, it was alleged, benefited from it financially.

"We were eager to expose the government's false charges and its witnesses as regards the financial aspects of the case," says Prashant Bhushan, one of the 14-panel lawyers for Tehelka. The first affidavit on behalf of the government was filed by Devinder Gupta, an under secretary in the finance ministry, late last year. But the government was reluctant to field him as witness before the commission. So it was a Mumbai-based additional director of income tax, A.A.

Shankar, the first among the eight witnesses, who took the witness box on September 10 and 11 this year.

He was "grilled" by senior counsel for First Global, Ram Jethmalani. According to the Tehelka counsel, Jethmalani demolished Shankar's testimony, suggesting that the "financial motive" idea being touted by the government was a mere "smear campaign". In those two days, Shankar admitted that he had no knowledge of Gupta's affidavit and merely appended his signature on the affidavit as a witness."Jethmalani warned him that he would be tried for perjury," says Bhushan. Newly appointed Solicitor General Kirit Rawal disagrees. "Shankar did not capitulate and withstood the cross-examination," he told Outlook.

The Tehelka counsel, sensing they had a good chance of demolishing the allegation that the expose had an ulterior motive, were pressing for an early hearing on the cross-examination of other witnesses. But on September 30, Justice Venkataswami passed an order deferring the cross-examinations, ruling that "written arguments on all aspects except the 'financial' shall be submitted on or before 18 November".

The inexplicable order was a serious setback for Tehelka. "There was no earthly reason for him to postpone the cross-examination which was already under way. We filed an application asking him to revise his order but...," said a Tehelka counsel. Adds Bhushan: "The government counsel panicked after the first cross-examination. If they allowed the others into the box, their lie would have been nailed." But Rawal counters the stand taken by the defence counsel. "It's an ongoing probe. The government deserves the right to file further affidavits so as to cement the evidence already reached," he insists.

In the meanwhile, by a strange coincidence, a news report appeared in a Hindi daily saying that Justice Venkataswami had been offered the job as head of a quasi-judicial appellate body and that his "decision to examine witnesses had taken the government aback". This, a day before the judge pronounced the aforementioned order.

On November 18, former law minister Shanti Bhushan made a strong pitch for resuming the questioning of witnesses and even "threatened" that Tehelka would withdraw from the commission if his plea was not accepted.

After hearing the arguments, the judge reserved his order for November 22. On that very day, the Congress chief whip in the Lok Sabha, Priyaranjan Das Munshi, raised the issue of Justice Venkataswami's second job. The job was offered by the government, he alleged, to colour the proceedings of the commission. The damage was done.

Das Munshi decried allegations that the Congress had struck a deal with the bjp, especially since his party was aware of the judge's second assignment from August. "We wanted to confirm if the cabinet had cleared his appointment. And since Parliament was not in session then, we could not raise the issue," he told Outlook. He also denied his party raising the issue was linked with the Bofors case. "This is nonsense. The case, anyway, is in the court and it is up to the judge to give directions," he added. Das Munshi also pointed out that his party was "keeping track" of the hearings on the financial aspects of the inquiry.

At present, the fast-track court of the designate judge Prem Kumar, which is hearing the Bofors case, has taken cognisance of the framing of charges and fixed December 4 for daily hearings. Incidentally, an event connected to the case that went unnoticed was that the High Court in Malaysia had on October 21 declined to stay the extradition proceedings of prime accused Ottavio Quattrochi. "This is good news for our investigation. If we manage to get him here, then his presence can throw up other dimensions," said a CBI officer.

Congress MP Kapil Sibal has also refuted the charge that he was aware of Justice Venkataswami's second posting. Says Sibal: "This is totally false. You think I wouldn't have raised the issue. It is important to note that in the life of the commission, who was being probed. It was Tehelka, not George Fernandes, not Jaya Jaitly, not Bangaru Laxman, or R.K. Jain."

Venkataswami's resignation has virtually derailed the defence deal inquiry. At a press conference, the judge rued, "It is unfortunate that matters have come to such a pass. Only the final touches were needed, I could have given the report with the next extension." From all accounts provided by the commission's counsel and government lawyers, the report would not have been "good news" for the government.

On its part, the government seems to be in no great hurry to restart proceedings. For a start, it is unclear if the new judge, when appointed, will take off from where Justice Venkataswami left off or begin proceedings afresh. Moreover, the government is unlikely to accede to the demand of an interim report being published in its present form. There are many in the government who would rather have the inquiry drag on for as long as possible.