VVIP chopper scam: Legal angle

Reading time: 8-10 minutes.

The Supreme Court recently dismissed the bail plea of Christian Michel, the alleged middleman of the AgustaWestland VVIP chopper scam. He was extradited from Dubai in 2018 and is currently locked up in Delhi’s Tihar Jail. He had sought interim bail on the grounds of the danger of contracting coronavirus while in prison. SC rejected his petition as “it did not fall under any grounds for relief”.

“We don’t find any merit in the petition filed by the petitioner in the case. We, thereby, dismiss the same,” Justice Kaul stated. Justice Kaul was part of the two-judge bench that also comprised of Justice B R Gavai.

The AgustaWestland VVIP Chopper scam is a very famous helicopter bribery scandal in India. It is a million-dollar bribery scandal and corruption case that accuses some high profile officials. This case attracted a lot of attention when a parliamentary investigation was conducted in 2013. People like Ahmed Patel, Christian Michel, and former IAF Chief S P Tyagi are being accused, thus, making this a high-profile scam.

Details about the scam

In February 2010, the then United Progressive Alliance (UPA) government signed a contract with AgustaWestland to purchase twelve AW101 of their helicopters for a price of Rs. 3,600 crore. These helicopters were meant for ferrying VVIPs including the President of India, the Prime Minister, and others. AgustaWestland is a UK based company that functions under its parent Italian company Finmeccanica.

In February 2013, Giuseppe Orsi, the chairman of Finmeccanica and Bruno Spagnolini, CEO of AgustaWestland were arrested on allegations of bribery and corruption by Italian authorities. This led the then UPA government to put the deal on hold.

It was alleged that the specific technical requirements of the required choppers were such adjusted that Agusta would win the bid. This included the lowering of the service ceiling of the helicopter from a height of 6,000 m to 4,500 m. The cabin height was also reduced. It was also claimed that Finmeccanica allegedly paid kickbacks to qualify for the deal with the Indian Air Force.

Soon after the arrests in Italy, the then Defence Minister A K Antony confirmed the allegations and ordered a CBI probe. A joint parliamentary probe was also put into motion. CBI launched its investigation and registered cases against many people including retired IAF chief S P Tyagi. In 2014, the chopper deal stood canceled due to the violation of the integrity pact. Only 3 out of the 12 helicopters were delivered.

A series of arrests were made from 2014 to 2018. CBI’s investigation revealed the involvement of air force officials, public servants, and private individuals. It was also found that this deal cost about Rs.2,666 crore to the exchequer. The role of Cristian Michel was revealed as well. He is one of the three middlemen in the deal who acted as ‘brokers’. The other two are Guido Haschke and Carlo Gerosa.

Christian Michel is a British consultant who was allegedly hired by AgustaWestland to manipulate high ranked officials.  He is being accused of paying bribes to government officials and politicians to ensure the bid in favor of AgustaWestland. The CBI also found that he had allegedly paid about Rs. 3,600 crores as kickbacks to Indian officials.

Meanwhile, the Italian court stated that there was a “reasonable belief that corruption took place in the case” and that former Chief Marshal S P Tyagi was also involved. But the bribery charges could not be proved and the defendants were acquitted of all charges.

However, CBI was not satisfied and in 2017 began the proceedings for the extradition of Christian Michel from Dubai. By December 2018, he was brought to India.

Legal provisions involved

The extradition of Christian Michel from Dubai is a diplomatic success for India.

India has extradition treaties with about 44 countries. Out of this 44, the United Arab Emirates has been the most helpful. So far, over the past 15 years, it has successfully deported or extradited 19 of 66 fugitives to India.

In simple terms, extradition is the surrender of one criminal to a particular country by another country. As per the principles of criminal law, a country cannot apply its penal code on a person who has committed a crime outside its territorial jurisdiction except in cases of national interest.

Extradition is an essential mechanism to ensure the prosecution in cases of cross-border crimes. This process is enabled by treaties between different countries. It can take place only between such countries that have signed the requisite treaty. Extradition arrangements are also often made by countries to mutually assist each other in relevant cases. In India, the extradition process is governed by the Indian Extradition Act, 1962.

Christian Michel’s extradition is a big win for Indian authorities owing to his key role in the VVIP chopper scam. He is currently lodged in the Tihar Jail. CBI is probing his role as a middleman in the deal whereas the ED has launched an investigation in the money laundering charges against him.

Recent developments in the case

Until now many arrests have been made that include Madhya Pradesh’s former Chief Minister, Kamal Nath’s nephew Ratul Puri and Christian Michel. Interrogations are going on. Michel has claimed that his interrogation went on for more than 600 hours.

Bail pleas are being dismissed repeatedly. Christian Michel has tried again and again but he was unsuccessful. Very recently, Delhi High Court, as well as the Supreme Court, dismissed his plea that was on the grounds of the risk of contracting coronavirus in prison.

Ratul Puri continues to be in prison. Investigations are going on; the evidence is being collected along with regular interrogations. In February, CBI was all set to obtain the required sanctions for filing charges against public servants involved in the AgustaWestland scam.

Testimonies of both the arrested individuals reveal that classified information on the deal was shared with the Ex IAF Chief Tyagi. According to reports, Michel was religiously keeping track of the files of the deal with the help of the retired official.

Probable future

India is facing a long legal battle in this case because merely an extradition cannot be a full-fledged win. It is important to note that Italy was the one that started this judicial battle against AgustaWestland. Hence, a major part of the evidence still lies with the Italian Government.  It is yet another battle for the Indian officials to acquire the details of the retrial proceedings or even simple documents. No treaties exist that allow the sharing of judicial information. Though, the previous charge sheets against the CEO and middlemen, Christian Michel are available. An intensive analysis of the same is yet to be conducted.

This scam that has crossed borders is extremely important for India and her reputation. The world must see India as a nation that takes serious actions in the service of justice.

Also, measures of the legislature such as the enactment of the Fugitive Economic Offenders Act, 2018 are accurate steps in the domestic arena. But to put an actual end to this menace, it is advisable to sign more substantive and detailed extradition treaties with more countries.

This scam has also ruffled the feathers of the Indian politics by putting into question top UPA leaders like Sonia Gandhi and former Prime Minister Manmohan Singh. As details continue to be revealed by Christian Michel, it can lead to a storm in Indian politics with accusations on many top leaders. He has however already given the story a plot twister by claiming that he is being offered a deal to incriminate Sonia Gandhi in exchange for his freedom.

Conclusion

India has seen a surge in the number of high profile white-collar crimes over the past few tears. AgustaWestland scam becomes important than others as it involved not only private individuals but also top government officials and political leaders.  The arrest and extradition of Christian Michel throw light on the necessity of robust extradition treaties. Currently, India has extradition treaties only with 44 countries. This number must see an increase. Michel’s extradition can pave the way for other extraditions involving names like Vijay Mallya and Nirav Modi.

On 8 April 2016, the Milan Court of Appeal overturned the lower court’s decision and sentenced the former CEO of Finmeccanica, Orsi to four years of imprisonment. Later, on 8 January 2018, the Milan Third Court of Appeals gave its final decision of acquittal due to insufficient evidence. This case has seen serious twists and turns. But one thing that must be noted is that corruption still has its roots in India.

Author: Anushree Tadge from ILS Law College, Pune.

Editor: Shalu Bhati  from Campus Law Centre, Faculty of Law, University of Delhi.

Explained: 2G spectrum scam

Reading time: 6-8 minutes.

There always comes a time when one has to choose between merely turning the page and closing the book. And when it comes to the chapter of corruption in book of Indian political history, much more than closing of the book needs to be done.

On 11 February, 2020, a controversy hit Maharashtra as the formation of steering committee took place to review issues of concerning the real estate sector, for it included real estate developers Shahid Balwa and Vinod Goenka, who were accused of quid pro quo in the 2G spectrum scam during the tenure of Congress-led UPA. The other members include Urban Development Minister Eknath Shinde, Housing Minister Jitendra Awhad, Naredco president Niranjan Hiranandani, chief secretary, as well as, the municipal commissioners of Mumbai and Thane.

Background

“Abuse is the weakest expression of strength. It is a weakness to destroy what one ought to protect.” has been rightly said by Kingsley Opwami Manuel. Spectrum is a national asset and being a scarce resource, it is the government that allocates frequencies of these electromagnetic waves to telecom companies. Generally, in India, spectrum is allocated through auction or bidding. It was only in 2008 that allocation was done on a first-come-first-serve basis. The companies were asked to apply for the licenses before 1st October, 2007 and it was decided that it would be a spectrum-linked license.

It implied that the company which got the license would get the spectrum for free and didn’t have to pay separately for it. On January 10, 2008, the Department of Telecommunications, under minister A. Raja, arbitrarily changed the cut-off date from 1st October, 2007 to 25th September, 2007 which meant a large number of applications received after 25th September as ineligible. What was worse was that the prices of the spectrum were fixed at the market price discovered way back in 2001.

It was alleged that minister A. Raja advanced the cut-off date to favour firms like Unitech & Swan telecom in return for kickbacks or bribes. Even recommendations of the Telecom Regulatory Authority of India were cherry-picked so as to favour selected players..

How and when it was uncovered

On May 4, 2009, an NGO Telecom Watchdog filed a complaint to the Central Vigilance Commission (CVC) on the illegalities in the spectrum allocation to Loop Telecom. Later on, another complaint was filed to the CVC by Mr. Arun Agarwal, highlighting grant of the spectrum to Swan Telecom at throwaway prices. CVC, after receiving the complaints directed CBI to investigate the irregularities in allocation of 2G spectrum.

On 21st October 2009, CBI registered a case and filed an FIR against unknown officers of DoT and unknown private persons/ companies under various provisions of IPC and Prevention of Corruption Act. It ultimately led to raids, tapping of conversations to find out the involvement of middlemen in the grant of the spectrum to telecom companies. However, the investigation was halted as the FIR mentioned no name.

Meanwhile, in 2010, CAG recognised large scale irregularities in the spectrum allocation, which was later quantified at a loss of Rs. 1.77 lakh crores to the exchequer. Former Janta Party leader Subramanian Swamy filed a petition in the Supreme Court seeking his inclusion as a public prosecutor in the 2G spectrum case. Swamy mentioned in the complaint that A. Raja favoured “ineligible” private companies Swan Telecom Pvt. Ltd. and Unitech Wireless Ltd. in allocating the spectrum. After Swamy’s complaint, the CBI had to reopen the case. On Sept 27, 2010 Enforcement Directorate informed SC of probe against firms suspected to have violated FEMA.

Later, in 2011, Supreme Court issued notice to Centre on the plea seeking cancellation of 2G licenses. Court found prima facie evidence to put on trial all 17 accused, including Raja, on various counts like criminal conspiracy, breach of trust, cheating and forgery. The court declared the allotment of the spectrum as “unconstitutional and arbitrary”. Even former Prime Minister Manmohan Singh admitted that UPA government seemed to have “failed in managing perceptions”.

 Nevertheless, the Special Court on December 21, 2017, acquitted former Telecommunications Minister, A. Raja, Kanimozhi and all others in the cases registered by the CBI and the ED because of lack of evidence. However, it’s not over yet. Supreme Court stated in December 2019 that it will constitute a bench to deal with pleas relating to the 2G spectrum allocation scam case.

Legal principles involved

There were a lot of people involved in the scam and they were different charge-sheets filed against them. All the accused were alleged with different charges.

A.Raja was alleged with Criminal breach of trust by a public servant (section 409), criminal conspiracy (Section 120-B), cheating (Section 420) and forgery (Sections 468 and 471); booked under the Prevention of Corruption Act for accepting illegal gratification.

M. K. Kanimozhi, Shahid Balwa and Vinod Goenka were charged with Criminal conspiracy to cause criminal breach of trust by a public servant and criminal conspiracy (Section 120-B), cheating (Section 420) and forgery (Sections 468 and 471), and booked under the Prevention of Corruption Act. Most of the others accused including Karim Morani, Vikas Saraf, Ravi Ruja, Rajiv Aggarwal, Sharath Shukla, Asif Balwa were also charged with Sec. 120 B (Criminal conspiracy) and Sec420 (cheating). Though all the 18 accused were arrested, they were later bailed and acquitted.

The corporations like Reliance Telecom, Swan Telecom, Unitech Wireless etc. were also charged with cheating and criminal conspiracy along with criminal breach of trust. These companies were also acquitted of any wrong doing in 2017.

A special court set up in this case of CBI v. A. Raja and Others held that: “There is no evidence on the record produced before the Court indicating any criminality in the acts allegedly committed by the accused persons relating to fixation of cut-off date, manipulation of first-come first-served policy, allocation of spectrum to dual technology applicants, ignoring ineligibility of STPL and Unitech group companies, non¬revision of entry fee and transfer of Rs.200 crore to Kalaignar TV (P) Limited as illegal gratification.

The charge sheet of the instant case is based mainly on misreading, selective reading, non¬reading and out of context reading of the official record. Further, it is based on some oral statements made by the witnesses during investigation, which the witnesses have not owned up in the witness-box. Lastly, if statements were made orally by the witnesses, the same were contrary to the official record and thus, not acceptable in law.”

Conclusion

2G Spectrum scam is one of the biggest and largest scams of India. The Special court, though has acquitted all the accused, but the telecom industries still reel under its consequences. The undelivered justice in this case has led to an outcry by the masses as it has affected and continues to affect the customers and investors.

The people feel that grave injustice was done and still hope for the law to take its course. To avoid the possibility of such a tragic incident again, the government has to take proper steps and set reserve prices for spectrum auctions.

Authors: Divanshi Gupta from University Institute of Legal Studies, Panjab University, Chandigarh and Ridhima from Rajiv Gandhi National University Of Law, Punjab.

Editor: Ismat Hena from Faculty of Law, Jamia Millia Islamia.

Explained: Agustawestland chopper scam

Reading time: 6-8 minutes.

On the 14th of January, 2020, the Delhi High Court dismissed the petition filed by the Enforcement Directorate (ED) to set aside the bail granted to Ratul Puri in the infamous VVIP chopper scam case of AgustaWestland. The trial court had granted the bail to Ratul Puri and also directed him to not tamper with the evidence or try to contact or influence the witnesses.

Maintaining the status quo, the Delhi High Court bench of Chief Justice D N Patel and Justice C Harisankar held that there has to be evidence of misuse of bail for setting aside that relief; thus rejecting the plea of ED to set the bail aside.

In the VVIP chopper scam case, Ratul Puri, the nephew of the present Chief Minister of Madhya Pradesh, Shri Kamal Nath, was named as an accused in the sixth charge sheet filed by the ED. According to ED, the role of Puri was that his foreign entities received proceeds of crime directly from Interstellar Technologies Ltd, a co-accused in the case, and that he had received funds from both the chains of money laundering involved in the present matter.

Thereby, ED had filed a supplementary prosecution complaint (ED’s equivalent to a charge sheet) against Puri and co-accused Jaspreet Ahuja in the Rs 3,600-crore AgustaWestland VVIP chopper deal case.

To understand the above situation better it is important to know the key details regarding the background, developments and legal provisions involved in the infamous case of AgustaWestland.

Knowing the background

According to Stockholm International Peace Research Institute, India is one of the largest arms importer in the world, spending more than $100 Billion in the last 10 years for importing weaponries and other related supplies. These deals are often reported to be fraudulent and ensnared in corrupted practices. AgustaWestland deal, being a similar scenario.

It all began in 1999, when the then NDA government approved the procurement of eight helicopters, to be used for travel by the VVIPs (Very Very Important Persons). The initial requirement set was that the helicopters could fly at an altitude of 6000ft. However, this requirement was reduced from 6000ft to 4500ft, allegedly to benefit a particular company named AgustaWestland.

AgustaWestland is an Anglo-Italian multinational company and is a fully owned subsidiary of Leonardo S.p.A, formerly known as Finmeccanica.

On March 1, 2005, the NSA (National Security agency) chaired a meeting where it was agreed to reduce the flying altitude from 6000ft to 4500ft and the cabin heights to 1.8 meters. The Qualitative Requirements (QR) were finalised on May 9, 2005, in a meeting chaired by the then Defence Secretary.

In the same year, the UPA (United Progressive Alliance) government made another change by increasing the number from eight helicopters to twelve helicopters, by adding four non-VVIP helicopters.

Finally, in the year 2010, the UPA government enters into a Rs 3,546 crore deal with AgustaWestland for the purchase of twelve AW-101 VVIP choppers.

The first lot of three helicopters were delivered in the year 2012 and this was the time when the initial sparks of corruption were reported by the media of both Italy and India.

The Italian media reported that AgustaWestland had hired a middleman to persuade the Indian government to favourably modify the specifications of the helicopters and give the contract to AgustaWestland.

This led to the arrest of the then Finmeccanica Chief, Giuseppe Orsi, by the Italian Police. The CBI (Central Bureau of Investigation) took up the case in India, and the ED also started probing the case.

In March of 2013, The Indian Express reported that around 10% of the Rs 3,546 crore were payed as kickbacks to the alleged middlemen, Christian Michel and Guido Haschke, along with many others through banks in Dubai, Italy and Switzerland.

In December of 2016, the highest court of Italy acquitted Giuseppe Orsi, stating that no corruption had happened in the deal. But a proper investigation in India was very difficult as the central accused Christian Michel and other alleged middlemen were not in India. This led to the extradition of Christian Michel from UAE to India in December 2018 under operation “Unicorn”.

However, the deal was cancelled amid rising controversies.

Knowing legal provisions involved

In the case of Gautam Khaitan v. Enforcement Directorate in December 2014, the Delhi High Court heard the details of the AgustaWestland and the various provisions under which the alleged offenders could be convicted; here, Mr Gautam Khaitan supposedly facilitated the transfer of kickbacks between various middlemen involved.

The important provisions that were highlighted in the case were as follows:

Section 420 of IPC: Cheating and dishonestly inducing delivery of property. The convicted shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.  

Section 13(1) (d) of Prevention of Corruption Act, 1988: This section describes the different criteria under which a public servant could be charged with misconduct relating to unfair pecuniary gains. 

Section 3 and Section 4 of Prevention of Money Laundering Act, 2002: These sections basically deal with defining the offence of money laundering and punishment for money laundering respectively. The acts of the accused were weighed against these sections to know if the acts really constituted money laundering or not.

Section 24 of Prevention of money laundering Act, 2002: Burden of proof shall be on the person who has been accused according to section 3 of the act.

These above sections were read along the relevant sections of Code of Criminal Procedure.

Developments in the case

In the case of Gautam Khaitan v. Enforcement Directorate in the year 2014, the petitioner’s (Gautam Khaitan) plea for getting a bail was dismissed by the Delhi High Court for being infructuous.

In 2015, a writ petition was filed by the petitioner under Article 226 of the Indian Constitution in the Delhi High Court. Thus, the case of Gautam Khaitan v. Union of India (2015) came into being where the high court discussed the merits of the case and dismissed the writ petition.

In 2016, Christian Michel was extradited from UAE under operation “Unicorn”, for CBI probing.

The events of the case extend to Ratul Puri, when it was discovered that his foreign entities had received money from the entities of the prime suspect, Christian Michel, leading us to the present scenario where Ratul Puri has been granted bail by the trial court and the Delhi High Court has denied to set aside the bail until evidence of misuse is found.

How to reduce corruption in defence deals?

India is a major importer of defence goods in the world but undoubtedly, these deals are far from transparent. According to Transparency International, corruption rate is high in Indian defence deals. 

Thus, it is an urgent need of the society to avoid the loss of tax payer’s money over corrupted deals. This can be done by avoiding single source contracts where there is a sole company without competitors which leads to overpricing and corruption.

India should also have a designated body responsible over ethics and anti-corruption within the Ministry of Defence. Most importantly, the Military as well as military spending should remain very transparent, unless it has to remain confidential due to matters of national security. These deals should also remain out of the ambit of politics as far as possible.

Conclusion

AgustaWestland case is one of the biggest controversies continuing since two decades. The recent demand by the ED for setting aside Ratul Puri’s bail, once again brought the case to the lime light.

It started in 1999 when the government wanted to purchase eight choppers for VVIP travel, but the specifications were changed overtime allegedly to benefit AgustaWestland. Though till now there has been no finality to the allegations of scam involved in the case; the deal has been cancelled.

Thus, it becomes pertinent to prevent such situations in defence deals in the future by taking some major steps and developing a robust framework inside as well as outside the Ministry of Defence. 

Author: Utsarga Dash from KIIT School of Law, Bhubaneswar.

Editor: Farsana Sadiq from Faculty of Law, Jamia Millia Islamia.