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SHAH COMMISSION OF INQUIRY
(Appointed under Section 3 of the Commissions of Inquiry Act, 1952)
INTE,RIM R.EPORT I
March 11, 1978
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SHAH C O M M ~ S S I O N OF INQUIRY
(Appointed under Section 3 of the Commissions of Inquiry Act, 1952)
INTERIM R.EPORT I
March 11, 1978
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CONTENTS.
CHAPTER I Notification appointing a Commission of Inquiry and the staff sanctioned, and Categorisation of Complaints
CHAP\ER II Important enactments and amendments of the Constitution
CHAPTER. HI Procedure followed by the Commission explained
CHAPTER rv Scheme of the Report
CHAPi;rn V Cirt:umstanccs leading to the declaration of Emergency on June 25, 1975
CHAPTER VI The working of the media of information under the I & B Ministry during the Emergency
CHAPTER VH Specific cases :
I. The case regarding the reversion of Shri Justice R. N. Aggarwal of Delhi Hii:h Court
2. Refusal by Smt. Indira Gandhi to extend the term of Shri Justice U. R. Lalit of the Bombay High Court
3. Deviation from established procedure and irregularities in the appointment of Shri K. R. Puri as Governor
of Reserve Bank of India .
4. Subversion of lawful processes and well-estabiished conventions in the appointment of Shri T. R. Vardachary
as Chairman of the State Bank of India
5. Deviation from established procedure and irregularities in the appointment of Slui T. R. Tuli as Chairman and
Managing Director of the Punjab National Bank .
6. Deviation from csrnblishe<l procedure in public sector undertaking in the case of Lt. Genl. Satarawala's
appointment as Chairman-cum-Managing Director of LT. D.C.
7. Deviation from established procedure in the appointment of Air Marshal H. C. Dewan as Chairman,
International Airports Authority of India
8. Misuse of powers and institution of false criminal complaints against four senior officials by the C.BI at the
instance of Smt. Indira Gandhi
9. Unlawful detention of Textile/Customs employees under MISA by Delhi Administration and institution of
false CBI cases against four of them
. IO. Misuse of powers and miscarriage of justice in the case of Shri Sudarshan Kumar Verma by the CBI officials
: J I. Deviation from established procedure by Shri T. R. Tuli, Chairman of the Punjab National Bank in allowing
a clean overdraft to M/s Associated Journals Limited
12. Deviation from established procedure in sanctioning facility by way of opening three foreign letters of credit
by the Punjab National Bank in favour of M/s KRSMA Chemicals Pvt. Ltd. , . .
. 13. Concessions by Punjab National Dank in fovoll.Lllf Maruti Limited
, 14. Deviation from established procedure in the reconstitution of the Boards of Air India and Indian Airlines
Corporations
is. l)cdsion pnx:csses leading to the purd1asc of 3 Boeing 737 Aircrart by Indian Airlines
16. Detention of Smt. Gayatri Devi an.d Lt. Col. Bhawani Singn under COFEPOSA Act, 1974
17. Detention of Shri Bhim Sen Sach:!r and seven others
18. Improprieties committed in regard to Shri Mangat Behari, IAS of Rajasthan cadre and termination of
the services of Smt. Chandrawati Sharma, Asstt. Teacher
PAGl!S
1-3
4-6
7-15
16
17-32
33-48
49-51
51-52
52-54
54-57
57-SS
59
59-64
64-67 .
68-69
69-71
72-73
73-74
74-75
7 5 ~ 7 8
78-82
82-86
86- 93
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CHAPTER 1
In exercise 0 the powers under Section 3 of the
Commissions of Inquiry Act, 1952, the Central
published on May 28, 1977, a notification
appointing a Commission of Inquiry.
1.2 The notification reads as follows :
"MINISTRY OF HOME AFFAIRS
NOTiFlCATlON
New Delhi, the 28th May, 1977
S 0. 374(E) .-Whereas there .is a widespread
demand from different sections of the public
for . an inquiry into several aspects of
allegations of abuse of authority, excesses
and malpractices committed and action
taken or purported to be taken in the wake
of the Emergency proclaimed on the
25th June, 1975 under Article 352 of the
Cons ti tu tiort;
And whereas the Central Government
is of the opinion that it is necessary to
appoint a Commission of Inquiry for the
purpose of IIJ.aking ._inquiry into a definite
.matter . of publit ' importance, that is,
excesses, ma/practices ail<l misdeeds during
the Emergency or in the days immediately .
preceding the said prodamation, by the
polilical authorities, public servants, their
friends and/or relatives and in particular
allegations of gr0ss misuse of powers of
arrest or detention, maltreatment. of and
atrodties on detenus and other prisoners
arrested under DISiR, compulsion and use
of force in the implementation of the family
planning programme and indiscriminate and
high-handed demolition of houses,
shops, buildings, structures and destruction
of property in the name of slum clearance
or enforcement of tow11 plan11i11g or land
use schemes in the dtie.s and towns resulting,
inter alia, in large number of people
becoming homeless or having to move far
away from the places of their vocation.
Now, therefore, in exercise of the
powers conferred by Section 3 of the
Commissions of Inquiry A.ct, 19.52 ( 60 of
1952) the Ct:ntral Government hereby
appoints a Commission of Inquiry consisting
of .. the following, namely,
'
Chainnan-Shri J. C. Shah, Retired Chief
Justice of the Supreme Court
of India.
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2. The terms of reference of the Commission shall
be as follows :
(a) to inquire into the facts and circumstances
relating to specific instances of-
( i) subversion of lawful processes and well-
established conventions, administrative
procedures and practices, abuse of
authority, misuse of powers, excesses
and/or malpractices committed during
the period when the Proclamation of
Emergency made on 25th June, 1975
under Article 352 of the Constitution was
in force or in days immediately preceding
the said Proclamation,
(ii) misuse of powus of arrests or issue of
detention orders where such arrests or
orders are alleged to have been made oil
considerations not germane to the pur-
poses of the relevant Acts during the
aforesaid period,
. (iii) specific instances of maltreattnent of and/
or atrocities on persons arrested under
DISIR or detained and their relatives and
close associates during the aforesaid
period,
(iv) specific instances of compulsion and use
of force in the implementation of the
family planning programme during the
aforesaid period,
(v) indiscriminate, high-handed or unautho-
rised demolition of houses, huts, shoP,s,
buildings, structures and destruction Bf
property in the na111e of slum clearanee
or enforcement of 'J;'own Planning or land
use schemes, during the aforesaid period,
Provjded th::it the i'nquiry shall be in
rega.rd to acts of such abuse of authority;
misuse of powers, excesses, malpractices
etc. alleged to have been committed by
public servants, and
Provided further that the inquiry shall
also cover the conduct of other individuals
who may have directed, instigated or
sided or abetted or otherwise associated
themselves with the commission of such
acts by public servants;
(b) to consider such other matters which, in
the opinion of the Commission, have any
relevance"to the aforesaid allegat.ions; and
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(c) to recommend measures- which may be
adopted for preventing the recurrence of
such abuse of authority, misuse .of powers,
excesses and malpractices.
3. The inquiry by the Commission shall be in
regard to--
(i) complaints or allegations aforesaid that may
be made before the Commission by any
individual or association in such form and
accompanied by such affidavits as may be
prescribed by the Commission, and
(ii) such instances rdatable to paragraph 2(a)(i)
to (v) as may be brought to its notice
by the Central Government or a State
Government or an Union Territory for
inquiry.
4. The Commission shall make interim reports to
the Central Government oh the conclusion of inquiry
into any particular allegation or series of allegations
and . will be expected to complete its inquiry iand
submit its final report to the Central Government on
or before 31st December, 1977.
5. The Central Government is of opinion that
having regard to the nature of the inquiry to be made
and other circumstances of the case, all the provisions
of sub-section (2), sub-section (3), sub-section (4),
and sub-section (5) of Section 5 of the Commissions
of Inquiry Act, 1952 ( 60 of 1952) , should be made
applicable to the said Commission and the Central
Government hereby directs under sub-section (J) of
the saiQ. Section 5 that all the provisions aforesaid shall
apply to the said Commission.
[No. II/ 16011/ 32/77-S&P(D.II)J
T. C. A. SRINIV S ~ VARDAN, Secy."
. . 1.3 Subsequently, the Central Government issued
the following notification extending . the time for the
completion of the Inquiry to June 30, 1978 :
"MINISTRY OF HOME AFFAIRS
NOTJFICA TION
New Delhi, the 16th December, 1977
S.O. 544(E) .-In exercise of the powers
conferred by Section 3 of the Commission
of Inquiry Act, 1952 (60 of 1952) , the
Central Government hereby makes the
following amendment in the Notification of
the Government of India in the .Ministry of
Home Affairs No. S.O. 374(E), dated
28th May, 1977, (relating to the Commission
of Inquiry on excesses during emergency)
namely :-
In para 4 of the said Notification for . the words
and figures "on or before 31st December,
1977" the words . and figures "on or
before 30th June, 1978" shall be
substituted.
[No. II/ 18011/ 32/ 77-S&P(D.Ilj Comsec. ]
MAHESHWAR PRASAD, Addl. Secy."
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1.4 The Commission issued notices under rule
5(2) (b) of the Commissions . of Inquiry Rules.
Pursuant thereto, 48,500 complaints were received in
the office of the Commission.
1 .:'i The Govcrnmcl1t o( l ndia made the services o[
the following officers and staff available to the
Commission for investigation of the various complaints
and other cases which came for scrutiny before the
Commission :-
Sl.
No.
Designation
(1) (2)
1. Secretary
2. Joint Secretary
3. I.G.P ..
4. Director & equivalent
5. Addi. I. G.
6. Commissioner
7. Under Secretary Class I senior scale
equivalent-A.0.-S.A. to Chairman
8. Junior Scale Officer/O.S.D.
9. Accounts Officer
1 O. Section Officers
11. P. S. to Secretary
12. Cou.rt Master
13. Steno Grade 'B'
14. Inspectors
15. Steno Grade 'C'
16. Assistants
17. Sub-Inspectors
18. Hindi Translator
19. Steno Grade 'D'
20. U.D.C.
21. Junior Reception Officer
22. L.D.C.
23. Staff Car Driver
24. Motor Cycle Driver
25. Gestetner Operator
26. Constables
27. Peons .
28. Daftri
29. Jamedar
30. Farash . .
31. Sweepers . .
32. Contingency paid staff
Numbers Numbers
Sanclioncd presently
working
(3)
2
7
J
42
66
5
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1
7
38
15
10
51
41
43
1
12
4
2
1
96
(4)
(Post
conver-
ted into
2
7
a D.I.'G.
who has
taken
over) .
35
30
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5
1
1
7
35
13
io
2.9
28
39
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4
2 .
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62
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I Peon &
9 55 Con-
1 ti ngency
l . 'j paid
2 staff
2 maki ng .
38 J a total o(
j 56*.
- -;includes 3 pers.ons taken against vacant posts of Constables.
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... , ... _____ ____________ ________________ ,, __ .. . , ...._,,, ___ , ... ,._ ... , ,_.,,.,, ................. .
1.6 In a number of cases the records of the
Government of India were called for by the
Com.mission and investigations were directed by the
Comruission in regard to the matters appearing before
it within any of . the five heads of the Terms of
Reference.
1.7 The Commission fixed July 31 .. 1977', a::; the
last date for filing complaints. The Commission did
not entertain any complaints received thereafter. The
complaints received by the . Commission were
categorised as under :
( I) Complaints which do not fall within the
,purview of the terms of reference of the
Commission-.-to be filed and complainants
informed accordingly.
(II) Complaints which do not fall within the
purview of the terms of reference of the
Commission but contain serious allegations-
to be referred . to the Central/State
Governments for inquiry and appropriate
action.
(III) Complaints falling within the terms of
reference of the Commission buf not
serious enough to warrant inquiry by the
Commission itself.._to be referred to the
Central/State Governments with a request
to have them looked into at an appropriate
level and action as deemed fit taken there-
on under intimation to the complainants.
. ! (IV) Complaints falling within the purview . of
the terms of reference of the Commission
which are serious enough but cannot be
' handled by the Commission's staff itself--
.. t o be referred to the CentraljState Govern-
ments for an inquiry by a committee}
. authority appointed under section 11 of
Commissions of Inquiry Act, 1952, and the
findings and recommendations of authority
to be submitted to the Commission for
disposal as and when completed. The
State Governments have also been
requested to take whatever remedial action
they deem fit in the meanwhile.
(V) Selected complaints will be dealt with by
the Commission through its own investiga-
ting agency.
1.8 From Sc.ptember 29, 1977 the Commission
.of oral evi,dence of witnesse.s in
cases falling within 1ts terms of reference and which
we.re regarded as of sufficient importance .
i.9 Since the terms of reference did not name any
individual or body of individuals as responsible for
the comn.Ussion of an excess as understood in a
compendious sense, and the excesses were also set
out in general terms, the Commission in the first
instance invited persons, who appeared from the
made by the officials of the Commission
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and from the complaints received, either to . be
responsible for the excesses or to be victims of the
excesses, or being otherwise able to throw light upon
the commission of the excesses, and examined those
persons.
1.10 At that stage, the Commission requested the
persons concerned to come before the Commission
and to assist the Commission in regard to certain
transactions. A large number of persons appeared
in pursuance of the request of the Commission. Some
of those requested did not choose to appear before the
Commission, some appeared. at certain stages and
thereafter did not appear and raised objections after
appearing before the Commission and declined to
partieipate in the proceedings of the Commission.
1.11 Evidence of the persons who showed willing-
ness to assist the Commission was heard in an but
a very few cases, in open Session. In the larger
public interests, in-camera sittings were held in a few
cases for examining certain witnesses. If on a
consideration of the evidence, it appeared to the
Commission necessary to inquire into the conduct of
any pc:rson or the Commission was of the opinion that
the reputation of any persons was likely to be affected
by the inquiry, the Commission issued notices to such
persons giving them opportunities of being heard in
t.he inquiry and to furnish to the Commission, state-
ments relating lo the matters specified in the notice
under rule 5(2) (a) of the Corm'nissions of Inquiry
(Central) . Rules, 1972. The Commission also .
issued summons under section 8B .of the Act affording
them reasonable opportunities of '; being heard in the
inquiry and to produce evidence regarding their
versions: The Corntnission also afforded
opportunities to these persons to cross-examine
witnesses other than the witnesses produced
by them and to address the Cominission. The
Commission also afforded opportunity to all the
parties to be represented by legal practitioners.
1, 12 After hearing the cvidertce of the persons to
whum notices under section 8B were issued and of
the evidence of the witnesses produced in support of
the verninns of those . parlit1s and nlso considering lhe
evidence of the witnesses, who had been examined
for the Commission and whose presence was requested
by the parties to whom :1oticcs under SB had
been issued, the Commission gave to the parties or
lheir Advocates opportunity t o address the Commissioti
on the evic'lenr.c:.
1.13 It may, however, be observed that the request
made by Smt. Indira Gandhi, to whom notices under
section SB had. been issued, to examine the investiga-
ting officers, was not allowed because the investigating
officers were neither witnesses to the transactions in
regalld to which the evidence was collected, nor were
they' witnesses for the Commission. No request was
made to exam inc the investigating otlicers as witnesses
in support of the version of Smt. Gandhi,
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CHAPTER 11
2.1 A mintes before the' midnight of June 25,
1975, the President of India proclaimed Emergency
under Article 352 of . the Constitution. The order
promulgating the Emergency was published in the
Gazette of India, Extraordinary, on the June 26,
1975. It reads :
NOTIFICATION
G.S.R. 353(E). The following Proclamation of
Emergency by the President of India, dated
the 25th June, 1975, is published for gene-
ral information :-
"PROCLAMATION OF EMERGENCY"
"In exercise of the powers conferred by
clause ( 1) of Article 352 of the Con- ,
stitution, I , Fakhruddin Ali Ahmed,
President of India, by this proclamation
declare that a grave emergency ex.ists
whereby the security of India is thre:it-
ened hy internal disturbances."
2.2 There ' was, however, already in force a Pro-
clamation of Emergency, which was issued on Deeem-
ber 3, 1971, by the President of India on the ground
that the security of India was threatened by external
aggression. Thereafter on December 4, 1971 the
Defence o'f India Rules, 1971 were published.
2.3 By virtue of Article 358 of the Constitution
freedoms guara'nteed under Article 19 of the Consti-
tution restricting .the power of the State to make any
law or to take any executive action which the State
wouh;I but for the provisions contained in Part III be
.. competent to make or to take, remained suspe'nded
till the withdrawal of the Emergency proclaimed . on
June 2S, 1975.
2.4 After the declaration o'f Emergency, the
President of India issued an order under Article 359
of the Constitution on June 27, 1975, suspending the
right to move any court for the enforcement of funda-
mental rights conferred by Article 14, 21 and 22 of
the Constitution.
2.5 The following important statutory provisions
were made :-
1975:
1. The Defence of India (Amendment) Act, 1975
(No. 32 of 1975) dated 'July 31, 1975.
This Act extended the pfovisions of the Defence of
.India Act, 1971, till the proclamation of Internal
Emergency lasted and for a per1od of six months
thereafter; It also added woros like internal security
and internal disturbances i'n the preamble of the prin-
ciP-1.e Act.
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2. The Conservation of Foreign and Pre-
vention of Smuggling Activities (Amendment)
Act, 1975 (No. 35 of 1975) dated August 1,
1975.
This amendment provided for the followi'ng :-
(a) no detention order under the A.ct should. be
invalid or inopuative merely because. some
of the grounds of the order are vague, non-
existent, not relevant or invalid for any
r eason;
(b) no person detained under this Act shall
released on bafl, bail-bone,! or othenyise ;
(c) the detention could be made for dealing
effectively with the Emergency and in such
contingency no grounds need be conveyed
to the detenu.
J. The Mai11tcna11c1' of /11/emal Securily (A111cnr/-
11w111) Acl, 1975 (No. 39 of 1975) dated August
5, 1975.
This amendment provided for :-
(a)
( b)
(c)
revocation of a detention order shall not
bar making another detention against the
same person;
person detained under section l 5 shall not
be released on bail, bail-bond or otherwise; .
and , .
a new well-known section 16A was added
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barring provisio'ns of grounds and approach
to a law Court.
4. The Election Laws (Amendment) ' Act, 1975
(No. 40 of 1975) dated August 6, 1975.
This . amendment provided for : -
(a)
(b)
(c)
every case ot disqualification under 5cction
SA shall be referred to the President who
could condone it in consultation with the
Election Comm'ission;
Section 77(i) of the Act was amended. to
replace date of publication of the
tion calling the elections . by words "the .
date on which he has been nominated'' l!Jld
also excluding the actions . of the govern-
ment servants in normal discharge of their
duties like making arrangements etc.;
pubFcation in gazette notification regarding
appointment and resignation of a govern-
ment servant shall be treated as an effective .
. proof of the same.
The above ame'ndments were g1ven retrospecti.ve
effect. covering even. the .electio.n petitions pending.
before the . Courts including befory . the .
Supreme Col,lrt.
S. The Constitution (11iirty-eighth
Act, 1975 dated August 1; 1975.
Amendment)
'By the Thirty-eigl).th Amendment Act power to.
issue Ordipances by the President, the Governor and
the Adm,inistratQr under the relevant provisions of
the Constitution was conferred, laying down that
their satisfaction as to the necessity of immediate
.action shall be final and conclusive and . shall not be
. questioned ill any Court on any ground. The Thirty-
. eighth. Amendment also entitled the President to issue
different proclamations on different grounds and to
make satisfaction of the President as to the emer-
gency final and condusive. During the Emergency
the satisfaction and the of the Emergency
. could not be questioned in any Court. on any ground:
6. The Constitution (Thitty-ninth Amendment) Act,
1975 dated August 10, 1975.
-This amendment inter tilia provided for :- .
. (a)
(b)
the. election of President and Vice-President
shall not be questioned in any Court;:
similarly, elections of the Priine Minister
and the Speaker o'f the House were placed
above .the law Courts and were to be judg-
ed by a Body/Authority to be co11stituted
by the Parliament.
. The above mentioned amen'aments prevented even
filing of election petitions against tl1:e "named persons
and .even pending .
1976:
7. The Maintenance of Internal Security (Amend-
. ment) Act, 1976 (No. 14 of 1976) dated
January 25, 1976.
"The amendment Inter alia provided for :-
. ,(_a) re-detention of a persqn whose order . has
been earlier revoked;
(b)
(c)
authorising Central Government to obtain
details regarding detentions from the State
Governments;
making the grounds of detention as con-
fidential and barring its disclosure to any
one.
8. The Maintenance of Internal Security (Second
A(rlendment) {I.ct, 1976 (No. -n of 1976) dated
Aug.ust .25, 1976.
This amendment made Section 16A applicable
from June 29, 1975 with retrospective effect. By
.this amendment the maximum period of detention
was extended from 12 to 24 mont.hs.
S/39 HA/77-2
9. The Press Council ,Ac(, 1976_ (NQ., i4
of 1976) d_ate.d February .2
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1976.
. .. The Press Council Act, 1965 was . repealed fr-0m
January 1, 1976 dissolving the Press Council of
India and also abating of cases, suit, appeals etc.,
pending before Court in which Press Council was a
party.
1 O .. The Prevention .of Publication of Objectionable
Matter Act, 1976 (No. 27 of 1976) dated
February 2, 1976.
This Act provided for .-
(a) inclusion in the
matter" any words, signs or v1s1ble
sentations which are defamatory of the
President of India, the Vice-President of
India, the Prime Minister or the Speaker of
the of the People . or the Governor
of a State;
(b) seizure of copies bl the publication made in
disobedie'nce of the Central Government
order prohibiting the printing or
tion closure of any printing press or other
instrument or apparatus used in the publi-
cation;
( c) power to dema'lld security from the presses,
publishers and editors of newspapers and
news sheets, when it appears to the compe-
tent authority that the
tains any objectionable matter;
( d) power of the Central Government . to .declare
certain publications forfeited., " -.
11. Parliamentary Proceedings (Protection of' .Publi-
cation) Repeal . Act, (No. 28 of 1976)
dated February 11, 1976.
By this Act the Parliamentary proceedings (Pro.-
tection of Publication) Act, 1965 was repealed and
came in force from December 8, 1975 .
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12. The Constitution (Forty
Act, 1976 dated December 18, 1976.
;..
The Constitution was extensively amended by 59
clauses.
1977:
13. The Representation of the Pe
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te) (Amendment)
Ordinance, 1977 (No. 1 of 1 .
The Ordinance amended the sectio'n of the
Act substituting the words the
act on the advice of the Election Comm1ss1on
regard to disqualification : ."shall the Election
Commission and , the Election Commission may for
this purpose make such enquiries as it thinks fit".
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14.: The) Disputed : Elections (Prirr;e Minister and
Speaker) Ordinance, 1977 (No. 4 of 1977).
:By this Ordinance a council was constituted in
case of csprited elections of the Prime Minister and
. the Speru,.cer as per the earlier amendment in the
People's Representation .. Act.
15. The Presidential and Vice-Presidential Efedfons
(A'mei1dment) Qrdinance, 1977 (No. 3 of 1977).
This Ordinance made similar provisions as above
in case of President and Vice President.
. 2.6 After the declaration of Emergep.cy a number
of legislative and regulatory meas\lfes . were taken
with a view to impose censorship on the Press. On
June .26, 19.75, a Censorship Order was passed by
the Central Government under. Rule ( 1) of the De-
fence of .India Rules; 1971. On July 5; 1975, the
Central Government directed that an order made
under Rule 48 of the Defence and Internal Security
by .a State Government or by any office 01
authorised in .this behalf oy the State Gov-
ernmet July 15, 1975, should not continue on
9r that date, except in accordance with such
as . the Central Government give to
tlie State Government in that behalf.
, : 2.7 On July 6, 1975, a notification was issued by
the Central Government and a new sub rule was in-
. scirted in Rule 48. The Censorship Ordei; was amend-
ed OD July 6, 1975, and on July 13, 1975, conq-
dential instructions were issued by the Chief Censor
fo the Censoring in the States. On July
31, 1975, the Defence of India (Amendment) Act,
1975 (Act 32 of 1975) was repealed -and re-enacted
as the Defence of India (Amendment) Ordinance,
1975. On August' 5, 1975, guidelines for the Press
were issued by the Chief Censor. On August 11;
1.975, a notification was issued by the Central Gov-
criunent further amending Rule 48 by enacting De-
fence and .Internal Security of India (Second Amend-
ment) Rules, 1975. On August 12, 1975, a notifi
cation . was issued by the Central Government enact-
ing the _Defence and Internal Security of India (Third
Amendment) F,ules, 1975, whereby Rule 48 of the
saia Rules was further amended.
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.t.8 On January 8, 1976, a Presidential Order was
issued under Article 359 (1) of the Constitution sus-
pendin'g the righl to move any court for the enforce-
ment of fundamental rights conferred . by Article 19
of the Constitution. On March 13, 1976, orders
issued by the Central Government amending the
Central Censorship order.
2.9 The declaration of EmcrgCJ1cy and the conse-
suspension of the fundamental rights
Article 19, resulted in the suspens.ion of the protec-
tion of Articles 14, 21 and 22 by the issue of the'
Presidential order in exercise of the powers under
Article 359 .of the and by the amend-
ment. of Article 352 inaking the satisfaction of th.e
President final and conclusive and not liable to be
questioned in any court on any ground and subject :
to the provisions of clause (2) taking away the juris-
diction of the Supreme Court or any other court to
entertain any action on any ground regarding the
validity of the declaration made by the proclamation
of the President to the effect mentioned in cla'\lse {l)
or to the continued operation of the proclamation,
and restrictions imposed upon the authority of the.
courts to grant protection .. against the infringement
of basic human rights enumerated in Article 19; all
protection against arbitrary action was taken away for
the duration of the Emergency. The right of equality .
under Article 14, the right of fundamental guarantee
against deprivation of life and personal liberty
according to procedure established by law alsq
suspended and the protection against arrest and de-
tention could not be challenged the courts .
The right of free speech an_d expression, right to
assemble peacefully, to form associations and unions;
to move freely throughout the territory of India; ,tQ
reside and settle in any part of the territory of India;
to acquire, hold and dispose of property and t o
practice any profession, or to carry on anv occupa-
tion, trade or business, which were guaranteed under'
clause (1) of Article 19, could not thereafter be:
exercised.
2.10 As a sequel to this a number of restrictions
were imposed upon the newspapers by the issue of
Censorship Orders and the amendments . thereafter
from time to time. Jurisdiction of the Courts to
entertain actions designed to challenge the validity of
actions,_ legislative and executive, of . the State were
al.so
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CHAPTER 111
In the 'first instance the procedure followed by the
Commission may be explained because certain persons
and . _especially Smt. fodira Gandhi, former Prime
Minister; .arid Shri _.Pranab .Kumar Mukherjee, a
fqi:ri1er of S.ta.te in the Ministry of Finance,
'raised . objections to .. the legality of the procedure
followed by the Commission; and . have on the plea
of illegality of procedure declined not only not to
assist the Commission but even have declined to file
statements relating .to _their. versions of the tra.i:lsactions
which formed the subject-matter of inquiries into
excesses in which tl].ey appeared to be concerned and
'to take oath and give evidence pursuant to notices
under section 8B of the Commissions of Inquiry Act,
1952. Section '3 of the Commissions of Inquiry Act,
1952, provides-
." ( l) The appropi:iate Government .may, if it is
of opinion that it is necessary so to do, and
shall, if a resolution in this behalf is passed
by the House of the People or, as the case
may be, the Legislative Assembly of the
State, by notification in the Official Gazette,
appoint a Commission of Inquiry for the
purpose of making an inquiry into any
defiriite matter of public importance and
performing such functions and within such
tirile as may be specified in the notification,
. at)d Jb.e so. appointed shall--make.
. : . : - ." the . inquiry and perform the functions
>: accordingly :
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.Provided that
* * * *
. (2)
* * * *
(3)
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(4)
* * *

. 4 provides that the Comnussion shall
.. _, pave the powers of a civil court, whife. trying a suit
under the Code of Civil Procedure, 1908, in respect
of the .following nrntters, namely :-
. . "(a) summoning and enforcing of attendance
. bf any person from any part of India and
examining him on oath;
. (b) requiring the discovery and production
of any document;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copy
thereof from any court or office;
( e) issuing commissions for the examination
of witnesses or documents;
() any other matter which n;i.ay be prescribed."
Section 5 . provides for the c.onfermertt of additional
powers on the Commission:
" ( 1) Where the appropriate Government is of
opinion that. having regard to the nature of
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the inquiry to be made and other circum-
stances of the case, all or any of the
provisions of sub-section (2) or sub-section
(3) or sub-section (4) or sub-secti6D. (5)
should be made applicable to a Commission,
the appropriate Government may, by
notification in the Official Gazette, direct
that all or such of the said provisfons 'as
may be in the notification shall
apply to that Coln.mission and on the issue
of such a notification, the said provisions
shall . apply accordingly.
(2) The Commission shall have the power to
require any person, subject to any privilege
which may be claimed by that person under
a11y law for .the time being in foi:ce; to
furnish.information on such points or matters
as, in the opinion of the Commission, may
be useful for or relevant to, the subject
matter of the inquiry and any person so
required shall be deemed to be legally
bound to furnish such infotmation within.
the meaning of section 176 and section 177
of the Indian Penal Code.
(3) The Commission or officer, not below
!h.9 of a gazette_Q: officer, specially
authorised ln this behalf by the Commission
. , .... ....
(4)
(5)
may enter any building or place .where the
Commission has reason to believe that any
books of account or other documents relating
to the subject-matter of the inquiry may be
found, and 111ay seize any such b90ks of
iiccount or documents or t.ake extracts or
copies therefrom, subject to the proyi$i0ns
of section 102 and section 103 of the-Code
of Criminal Proce<lure, 1898, in so 'far as
they may be applicable.

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Under section SA it is provided :
"(1) The Commission may, for the. purpose of
conducting any investigation pertaining to
the inquiry, utilise tpe services,- .
(a) in the case of a Commission appointed by
the Central Government, of any officer or
investigation agency of the Central
Government or any State Government * *
(b)
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(2) For the purpose of investigating into any
matter pertainiilg to the inquiry, any officer
or agency whose services are utilised under
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sub-section (1) may, subject to the direction
and control of the Commission,-
(a) summons and enforce the attendance of any
person and exanrine him ;
(b) require the and production of
any document ; and
(c) requisition any public record or copy
thereof from any office.
(3)
(4)
(5)
.(Q)
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The officer or agency, whose. services arc
utilised under sub-section (1) s}?all investi-
gate into any matter pertaining to the in-
quiry and submit a report thereon (her.e-
after in this section referred to as the
investigation report) to the Commission.
within such period * * *
The Commission shall satisfy itself about the
correctness of the facts stated and the con-
clusions, if any, atTived at in the investi-
gation report submitted to it under sub-
section (4), and for this purpose the Com-
mission may make such inquiry (including
the examination of the person or persons,
who conducted or assisted in the investiga-
tion) as it think_s fit.
No statement made by a person in the course
of . giving evi<;leqce before the Commission
shall , subject him to, or be used against
him in, any civil pr criminal proceeding ex-
cept a prosecution for giving false evidence
by such statement : '
Provided that the statement-
(a) is made in reply to a question which he is
required by the Commission to answer,
?r
(b) is \ relevant to the subject-matter of tht>
i11quiry."
Section 8 provides :
"The Commission shall, subject to any rules that
may' be made in this behalf, have power to
regulate its own pr'Ocedure (including the
fixing of places and times of its sittings and
'deciding whether to sit in public or in
pdvate)."
Section 8B provides:
"If, at any stage of ' the inquiry, the Commis-
sion,-
(a) considers it necessary to inquire into the
conduct of any person; or
(b) is of opinion that the reputation of any
person is likely to be prejudicially affect-
ed by the inquiry,
The Commission shall give to that pe1'Son
a reasonable opportunity of being heard in
8
the inquiry and to produce evidence fo his
defence:
Provided that
*
SC provides :
"The appropriate Government., every person re-
ferred to in section 8B and, with the per-
mission of the Commission, any other per-
son whose evidence is recorded by the
Commission,- ,
(a) may cross-examine a witness other than .a
witness produced by it cir him ;
(b) may address the Commission ; and
(c) may be represented before the Commission
by a legal practitioner or, with the per-
mission of the Commission, by any other
person."
Section 11 provides :
"Where any authority (by whatever name called), .
other than a Commission appointed under
section 3, has been (>r is set up unde1; any
resolution or order of the appropriate
Government for the purpose of making an
inquiry into any definite matter of public
i{nport:ance and that Government i-s of
opinion that all or any of the provisions of
this Act should be made applicable to that
authol'ity. The Government may, subject to
the prohibition contained in the proviso to
sub-section (1) of section 3, by notification
in the Official Gazette, direct thatthe said .
provisions of this Act shall apply to that
authority, and on the issue of such a
cation that. at1thority shall be deemed to be
' a Commission appointed under section 3 for
the purposes of this Act."
By Section 12 power is conferred upon the appropriate
Government to make Rules, to cal'.ry out the purposes
of the Act.
3.1 Pursuant to the power conferred by section
12; the Central Government haye published on 'uly
15, 1972, the Commission of Inquiry (Central)
Rules, 1972. Rule 5 sets out the procedure of
inquiry:
" ( 1) A Commission may sit in public or in
pr.ivate as it thinks fit :
. Provided .fuat a. Commission shall sit in
private on a request being made by the
Central Government in that behalf.
(2) A Commission shall, as soon as may be
after its appointment-
( a) issue a notice to every pers.on. who in its
opinion should be given an opportunity
of being heard in the inquiry, to furnish
to the Commission a statement relating
to such matters as iay be specified in
the notice;
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(b) issue a 'notification, to be published in
such .manner as it may deem fit, invitmg
all persons acquainted with the subject
matter of the inquiry to furnish to
Commission . a statement relating to sutli
matters as may be specified jn the
notification.
(3) Every statement furnished under clause (a)
of sub-rule (2) shall be accompanied by an
affidavit in support of the '.facts set out in
the statement sworn by the person furnish-
ing the statement. .
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( 7) The Commission shall have the powers of
a civil court to make local investigation,
either personally or through any person,
duly authorised by it, into any matter falling
within 'its terms of reference.
( 8) A Commission .shall ha ye the power to
regulate its own procedure in respect of
any matter for wbich no provision is made
in these rules."
3.2 The Commission framed certain Regulations
relating to Regulations of Procedure to be followed
by the. Commission iii exercise of the powers conferred
by clause (8) of Rule 5.
( 4) person furnishing a statement under
clause (a) of sub-rule (2) shall also furnish
to the Cotnmission along with the statement
a list of the documents, if any, on which he
proposes to rely and forward to the Com- 3.3 By the Act the appropriate Government is
mission, wherever practicable, the . originals authorised to set up a Commissio'.il of Inquiry for
or true copies .of such of the uocuments as determining the facts and circumstances relating to
may be in his possession or control and any matter of public imp9rtance. The appropriate
shall state the name and address of the Government .is authorized to appoint a Commission,
person from whom the remaining docu- which shall exercise the powers set out in section 4
ments may be obtained. of the Act. The Cominission may be invested with
additional powers under sections 5 and 6 for utilising
.(5) (a) A Commission shall examine all the the services of officers and favestigating agencies for
statements furnished to it under clause (b) conduct of investigations pertaining to the Inquiry. The
of sub-rule (2) and it, after such examina- function of the Commission is to determine facts rela-
tion, the Commission considers it necessary ting to the matters of definite public importance for the
to record ev.identc, it shall first r ecord the purpose of making inquir1es thereto.
i!vidence, i'f any, pr.oduced by the Central
Government and may thereafter record 3.4 The proceedings of the Commission are, neither
evidence .in such order as it may deem fit,-- of the nature of a civil suit, where contesting parties
(i); the evidence of any person, who 'has are arrayed on opposite sides, one pleading that a civil
. furnished a statement under clause (a) right has be.en infringed and the other contesting .that
of sub-rule (2) and whose evidence the claim. Nor are the proceedings of the nature of a
Commissfon having regard to the s.tate- cdminal proceeding, in which it. is pleaded that a per-
son or persons have committed infraction of the law
ment, considers relevant for the purpose and has or have on that account incurred liability for
of the .inquiry ; and imposition of a penalty prescribed by law. In the case
' (ii) evide1.1ce of an person, .,. fondal .. of a suit the ftfnction of the court is to deter-
ev1dence m the opm1on of the Commts- mjne the ci:vil rights and to grant appropriate relief
sion is relevant to the inquiry : to the person claiming to be aggrieved ; if the infraction
of his fight is proved, the liability of the person infring-
ing the r.ight is established : 'in a crimi'nal trial- the
function of the court is
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to determine whether the
action of a person charged with the commission of ail
infraction of a law is' established to have been com-
mitted by him and whether such an infraction is
established beyond reasonable doubt. These proceedings
are adversary proceedings-one {>arty alleging existence
of a certain right and the other party denying the dght
or the statement cf the alleging infraction
of the law by the other party and the other party
denying such infraction.
Provided that the Commission may dispense with
the at.te_ndance .of any pe'rson for the purpose
of g1vmg evidence before it if in its
opinion-:-
(i) su.ch attendance cannot be enforced
except by causing m:due hardship or
inconvenience to that person ; or
(ii) such attendance should be dispensed
' with for any other sufficient reason to be
recorded by it in writing.
(b). If after ail the evidence is 'recorded under
clause (a) of sub-rule ( 5) , the Central
Government applies to the Commission to
recall any witness ,already examined or to
examine any new witness, the Commission,
if satisfied that it is necessary for the proper
determination of any relevant fact to do so,
shall recall such witness or exmine any such
new witness:
3.5 Functions of the Commission under the Act
are, however, of an entirely differe'nt nature. The Com-
mission is not concerned with the establishment of any
civil ,rights or the infraction of those rights. The Com-
mission is also not concerned to determine the
infraction of any laws involvi'ng the imposition of any
penalty upon a person charged with the commission of
infraction of a law. The proceedings before the
mission are not of, an adversary character. It is the
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duty of the Commission appointed for that puryose to
make an inquiry into the subject matter of the iriquiry
if the subject-matter is of definite public importance.
For that purpose, the Commission is invested with
certain set out fn. section 4 and 5 of the Act.
3.6 The CQmn;iiss.ion, constituted under section 3
o'i. the Commissions of Inquiry Act, may be called
upon tp 'hold a jYadety of matters of
definite public importance. The matters of public im-
portance . may relate to the coilduct of a paFticular
person, or a group of persons, or as in the presep.t case
. to investigate into a definite matter/matters of public
importance. The Comniission may b.e invested wit,h
the powers to hold au inquiry into certain transactions
without specifying the names of persons responsible
therefor ; and leaving lt to the Commission to deter-
mine : (i) whether the transaction relating to a matter
of public importance, referred to in the terms of
reference has been committed; and (ii) to identify the
person or persons primarily responsible therefor. In
view of the variety of transactions or subject matters
in respect o'f which the Commission may be appointed
to inquire, the Legislature has not prescribed any defi-
nite form of procedure; and has left to the Commis-
sion PY section 8 to regulate its own procedure. This
power is, however, not unguided and Is subject to the
Rules that may be made in that behalf by the Ceritral
Government. The Commission is, in each case, having
regard to the nature of the inquiry to be made and
having also regard to the nature of the definite matters
of public impo.rtance, which it is called upon to inquire
into, aufhorised to regulate its own procedure, hut
subject to such Rules which the Central Gover"nment
may make in that behalf. Certain other rest.rictions
are also impose<J by sections 8B and 8C on the power
of the Commission to regulate its own procedure. In
other words, the Ccm1mission must be guided in adopt-
ing its procequre by the Rules prescribed in that be-
half; and also comply with the requirements, of sections
8B and SC of the Act.
3.7 In disposing of the objections raised by Smt.
Indira Gandhi by . the order of the Commission dated
December 5, 1977, the Commission observed that it
proposed to follow a procedure, which a'fter consi-
derable thought the Commission felt ad.vised to follow
in holding the inquiry in regard to the terms of refe-
. rence for making inquiry : first, to determining whether
an excess falling within the terms of reference was
committed : and if the Commission was satisfied on a
consideration of the materials placed before it that
there was, prima jacie, evidence of the commission of
any excess. or excesses and such other evidence which
may be given before the Commissio"n to supplement
the same, by persons invfted to appear before the
Commission, the procedure prescribed for summoning
persons, who may appear to be involved in the com-
mission of those excesses,- would be resorted to, to
appear before the Commission, and expfain after an
appropriate notice under rule 5(2)(a) was issued and
an opportunity was given to such persons under section
SB of the Act.
3.8 It was made clear that at that stage the Com-
mission was not compelling any person to come before
the Commission. The C::ommission. was only inv1tmg
persons who could assist the Commission in the investi-
gation with regard to the alleged e/(.cesses ; to appear
before the Commission ; and that if the Commission
was satisfied on a. perusal of the materials placed
before it :
"(i) as to the commission of an exc.ess; and
. (ii) the prima f acie evidence of . his or her
involvement in the commission of that
excess,"
the inquiry would be held strictly in accorctance
the terms of sections 8B and 8C of the Act;
3.$> After consideration of the evidence o' witnesses,
who had come to assist the Commission in regard to
various transactions fn the light of the investJgations
made by investigating staff; and the documents withh1
its cogmzance, the Commission issued notices to several
other persons under rule 5(2)(a) of the Commission
of Inquiry Rules, 1972, calling upon them to file their
statements relating to certain matters; spec.ified in the
notices issued to them. Summonses were also issut>d
under section 8B of the of Inquiry Act.
3.10 Smt. Indira Gandhi objected to this procedure ;
and declined to file a statement pursuant to the notice
under rule 5 ( 2) (a) and in the manner prov.ided in
rule 5 (3) and to take oath or give evidence on oath ;
and . raised a number of objections, which are
broadly:-
(i) that the procedure followed by the Com-
missfon is improper or illegal ;
(ii) that her refusal to file a reply or a statement,
as required under rule 5 (2 )(a) .is justified
because the notice was not issued, with- thy
least practicable.delay and in any event when
a notice/summons under section 8B of the
Act has been Jssued,--suclr a notice under
rule 5(2)(a) cannot be issued; and
(iii) that the appropriate procedure for hearing
of the Commissiori must be analogous to the
procedure in a criminal trial, that is, the
person, .to whom a summons is issue<;! under
section 8B is in a position of au accused
person ; and, therefore, cannot be subjected
to cross-examination .
Objections were also raised on a number of subsidiary
matters, inter alia,-
( a) that the terms of re'ference of the Commission
are vague;
(p.) that the Commission-has no power to inquire
into the circumsta'nces, which preceded .the
declaration of Emergency and the manner in
w'hich the advice . for the declaration. of
Emergency was given ;
( c) that the transactions, which commenced after
June 25, 1975, or shortly before that may be
inquired into, but no transaction, which com-
menced at a point of time appreciably longer
than a few days prior to June 25th, 197'5;
can be inquired into;
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that no opportunity -to note the .demeanour
.of .the witness, who had already bee:n examin-
ed by the Commission was given to persons
to whom summonses under section 8B were
issued and, therefore, the proceedings would
be regarde9 as_ vitiated ; and . .
( e) tftat since u'nder the CommissiOns of Inquiry
Act that failure to tell the truth before the
investigating officer or making a statement
inconsistent with. a statement made before
the investigating officer is liable 'to be made
the subject matter of a prosecution for per-
jury, the investigating officers must be
examined by the Commission or be brought
before the Comriliss'ion, so that the person to
whom a summons is issued under section 8B
is entitled to cross-examine those i'nvestigating
officers.
. In dealing with these object.ions the Commis-
"ston that the proceedings before the
-Commissii:m are taken under the terms of reference for
determi'ning the truth in respect of certain transactions
. or certain matters, set out in the terms of reference.
The proceedings, therefore, cannot assume the form
of it' proceeding of a civil trial nor of a cr'iminal trial,
where some person is accused of the comniission of
a'il offence. It was also observed : .
. . It . is necess'ary to emphasise this fact because the
argument persistently. advanced before me by Counsel
for Smt. was. _tat the . proceedings before .. the
_,:(;oinmission ini.Ist be, If not actually assimilated, m.ade
similar to a proceeding relating to a criminal trial ; and
.. in svpport of that contention, the argument was pri-
marily bilsed upon the terms of section 8B of the Act.
It i11ay
0
be pointed out that the proceedings before a
Commission of Inquiry disclose characterists sub-
stantially different from a trial of a su'it or a criminnl
prosecution. Ftoin the very nature of the proceedings,
it will not be an adversary proceedings, i.e. where
there is either a plai'ntiff or defen.dant or a prosecutor
: and an accused person, but the proceedings will be of
the nature of ' inquisitorial'. When I say 'inquisitorial',
it. must be shorn of all the sinister aura the expression
'inquisitorial' has acquired because of associatio'rl in
certain . foreign countries where inquisitions were 11eld
circumstances as a part of religious persecution.
(When I say 'hiquisitorial'. it means that the presidi'rig
officer takes upou himself the duty to ascertain the
. facts through witnesses after giving opportunity to per-
sons concerned, who tnay be affected by the determina-
tion of facts.) Whether the inquisitorial method is
better in an academic sense, than the adversary method
is -not a matter with which I am concerned The Act
has adopted the inquisitorial method. Qn that I can
do no better than cite what Lord Justice Salmon said
in hfS report on the Cotnmission on Tribunals of
Irtguiry, 1966 :
"27. The exceptional inquisitorial powers con-
ferred uoon a Tribunal of Inquiry under the
Act of 1921 necessarily exposes the ordinary
citizen to the. risk of having aspects of bis
private Iife
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wise remain prh:ate and to risk 9f havi'ng
baseless allegations made against him. This
may cause distress and injury to reputation ..
For these reasons, we are strongly of thy
opinion that the inquisitorial machinery set
up under the Act of 1921 sp.ould never be
used for matters of local or minor . public
importance, but always be confined to matters
of Vital public importance concerning which
there is something in the nature of nation-
wide crisis of confidence. In such cases, we
considered that no other method of investi-
gation be adequate."
"28 . . Normally persons cannot be brought before
.. a Tribunal and questioned save in civil or
criminal proceedings. Such proceedings are
hedged around by long-standing and effective
safeguards to protect the individual. The
inquisitorial procedure is alien to the .concept
of justice generally accepted in the United
Kingdom. There are, however, exceptional
cases in which such procedure must be used
to preserve the purity and integrity of our
public life, without which a successful demo-
cracy is impossible. It is essential that on
the very rare occasions whe'tl crises of public
confidence occur evil if it exists shall be
exposed so that' it may be rooted out or if it
does not exist, the public shall be satisfied
that in reality there is no substance in the
prevalent rumours and suspicions by which
they -have been. disturbed. We are satisfied
that this would be difficult, if not
without public investigation by an inquisi-
torial 1'iibunal possessing the ooi1-
ferred by the Act of 1921. Such a Tribunal
is appointed by Parliament to enquire and
report."
"30. There are important distinctions in-
quisitorial procedure and the procedure in
an ordinary civil or criminal case. It is in".'
herent in the i'nquisitorial procedure that
there is no lis. The tribunal directs the en-
quiry and the witnesses are necessarily. the
tribunal's witnesses. There is no plaintiff or
defendant, nq prosecutor or' accused; there
are no pleadings defining issues to be tried,
no charges; indictments or depositions. The
inquiry mav take a fresh turn at any moment.
It is, therefore, difficult for persons involved
to know in advance of the hearing what
allegations may be :Jnade against them."
3.11 After setting out the terms of reference, it was
observed that the Commission had 'the power under
section S of the Commissions of Inquiry Act and was
obliged to devise a procedure, which would be fair to
every one concerned and within which the Commis8ion
would effectively perform the duties entrusted to it to
hold t.he inquiry. For that purpose, it was considered
necessary to have investigation made by the investiga-
ting staff of the Commission. In the very natur.e :of
things, sucb could not be complete, It
was, therefore, thought necessary to ask persons
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cognisant of the transactions to rappear hefdre the
Commission to assist the Commission in making the
inquiry. It was then made clear that there was no
compulsion upon anyone to come before the Commis-
sion. It was only a request to assist the Commission
in the due performance o'f ,its duties.
3..12 After settllig out the. terms of .rule 5, it was
- observed that it was qbligatory upon the Commission
to issue a notice, both under clause 2 (a) of rule 5 aud
notijication under clause 2(b). A notification was
issued generally inviting the public to make complaints
under clause 2('b). - But rule 5 (2) (a) could not be
complilf4 with at that stage because under the terms
of reference, the Commissio'n could not without adding
a preliminary inquiry ascertain the .persons, who may
be given an opportunity of being heard in the inquiry
un<;ler rule 5(2)(a). The Commission was called upon
to make an inquiry into certain matters, but without
indicating the invol.vement of any named persons. It
was, therefore, necessary for the Commission to identify
the persons to whom notice must be given. It was also
necessary in order to maintain some regulation and
control over , the _proceedings, before the Commission
was, prima facie, satisfied, whether there 'had or had
not been committed an excess, following the terms of
reference. For that purpose letters of request were
sent to various persons to come before the Commission,
whose names appeared to have been disclosed on the
investigatic;ins made by the officers. After holding this
inquiry . and perusing the statements made before the
investigating. staff, it was thought necessary, when it
appeared that the Commission could fo.rm an opinion
that certain persons should be given an opportunity
of being heard in the inquiry, and notices under rule
5(2)(8.) were given. The Commission was also satis-
fied that if inquiry is held, which it was directed to
make in regard to the five items, the holdi"ng of .the
inquiry may_ affect the reputation of certain persdns,
or that it would be necessary to investigate foto ftbe
conduct of those or certa'in other persons. The Com-
mission, accordingly, directed that summonses be issued
under section SB of the Act. Thereupon, notices under
rul!'l 5(2) (a) and summonses under section SB were
issued by the Commission. Pursuant to these notices
und.er rule 5(2) (a) some persons filed their statements,
while others did not.
. . .3.13 Referr'ing to the contentions that notice under
rule 5(2) (a) was not issued "as soon as may be"
after the appointment of the Commission, the Com-
mission observed that an earlier stage for issuing the
notice against any person, who in the opi'nion of the
Coo1mission, should be, given an opportunity of being
heard in the inquiry, could be conceived of unless
that person was identified. It '.was for-that reason that
. the preliminary inquiry was hel,d to identify the person,
who, in the opinion of the Commission, should be
given an opportunity of heard. The Commission
gave them opportunity to furnish statements relating
to such matters by issuing notices under rule 5 (2) (a).
The Commission pointed out that rule 5 (2) (a) makes
-it obligatory for the Commission to issue the notice
to'everv person, who, in the opinion of the Commission.
should be given an opport.unitv of being heard in the
-inquiry to furnish to the Commission a statement relat- .
ing to such matters, as may be speeified i'n the notice.
12
The Commission has no power to dispense with the
issue of the notice and the submis.sion of the counsel
to dispense with the notice couid not be
acceded to. The notices, in faet, .had been.
issued, requmng the persons to whom they
were issued, to file their version and statemerit of
facts in support of the version set out in their state-
ments. They were also required to file lists of d,ocu
tnents on which those persons r'elied and to forward
to the .commission those documents. This was the
stage at w'hich the person, who in the opinion of the
Commission was required to furnish a statement rela-
ting to the matters specified in the notice, was identifiqd.
At no earlier stage could such notice be given. Under
the provisions of the Act, the next stage of holding
an inquiry on the stateme'nts filed the Commis- .
sion commences thereafter. At the earlier stage, wit-
nesses would be would be witnesses for
the Commission. If, however, it appeared to the
mission th.at it was "necessary to inquire into the conduct
of any person, or in the opinion of the Commission
the reputation of any person was likely to be prejudi-
cially affected by the inquiry, the Act made it obligatory .
tha.t summons under :.section SB shall be issued. '
'. '. 3.14 Therefore, the Commission observed that '
there was no warrant for the view t.hat once a notice
under section 8B is issued, there is no obligation on the .
part of the Commission to issue a notice under rule . .
5 (2) (a), nor that the issuance of the notice under
5 (2) (a) is dispensed with, when a S\lmmons under
section SB is issued. It was observed :
"Rule 5(2)(a) and section 8 operate in different
fields. Rule 5(2)(a) deals with a demand
from the Commission, in what may be loosely
called "pleading of the perso'n to whom. the
notice :is issued". Persons who, in the opinion
of the Commission, should be called upon \o
have on that account an opportunity of
explaining certain matters, which have come
to tbe notice of the Con1mission at that stage.
The person to whom a notice has been issued,
is required to come and submit his statement
in regard to what his version of the matters
specified in the notice is. It is after the
statement is filed, the i'nqtiiry commences and
it is in the course of the inquiry that the
notice under section SB will, if at all, be
issued. In order, however, that time may
not be wasted,
* *
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it was found necessary by me to issue a notice
under rule 5 (2 )(a) and also because it
appeared to me (Commission) from mate:.
rials disclosed .in the evidence at the stage of
the i'n.quirv collected by the investigating
officers and, further, on 'the preliminary in-
quiry held by me (Commission) that it will
be 'necessary to iriquire in'to the' conduct cf
certain persons and also that the reputation
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persons was likely to be prejudi-
cially affected by the inquiry. On that
account this summons under section 8B 'fas
issued."
. 3.15 The Commission rejected the contention of the
counsel for Smt. Indira Gandhi that once a summons
under section 8B is issued by the Commission, there
can be no scope for .issui'ng a notice under r"!le
5(2)(a), or that the proceedings the.
sion are either of the nature of a cnm1nal mqu1ry or
quasi criminal inquiry or that the inquiry is in the
nature of a criminal proceedings.
. 3.16 It was also emphasised the proceedings
before the Commission are 'for determining the truth
in the manner provided by the Act in. respect of
ti1atters of public interest specified in the terms of
reference. They are not civil proceedings, nor are they
criminal proceedings. They are not .adversary proceed-
ings. They are proceedings .in truth has
to . be determined by the adoption of a pro-
cedure to be devised by the Commission having regard
to the of the inquiry and which is essentially
inquisitorial in character, as prescribed by the Act.
. 3 .17 .The Commission also rejected the contention
raised by the counsel that it was obligatory upon the
Commission to issue a notice under rule 5 (2 )(a) a:;
_ soon as it appeared. from any statement made __
the investigating officer that some persons were con-
cerned in the commission of any excess specified in lhe
terms of reference and if the notice was not issued
soon thereafter,. such a notice could not be issued at
. .
,_ 3.lS also rejected the contention
u1;ged in the' alternative that the appropriate procedure
should have been that as soon as a witness appeared
before the Commission at the stage of the preliminary
hearing and made some statement which involved a
person in the commission of some impropriety, the
Commission was hound to issue a summons
tiun SB and that the Commission had no option to
act otherwise. It was observed that on the terms of
section .. 8B if the Commission at any stnge of the
either deems it t9
Conduct Of any pe,rson Or the lS OfOPlnlOn
Lhat reputation of any person 1s to he pre ..
judicially affected by the inquiry, notice
section must be issued. But until the
entertains, on materials placed before it, an op1mon
after consideration of the materials, . there can he no
Cor issuing summons . section SB.
. SB requires that the Comm1ss1on consider 1t
necessary to inqu:re Into the conduct '. of any person ;
and merely because some statement is. made before
the Commission involving directly or indirectlv anv
person in the commission of an excess, without examin-
inl.!' whether the statement in the light of the rest of the
evidence and Circumstances is reliable. or whether
such a can be acted upon. it woold be
impossible and, in anv event, impropey for the Com-
mission to a summons under 8B, merely
becnu<;e some statement was made by some one
attributing impropr'iety to another person.
S/39 HA/77-3
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3.19 The contention raised by the counsel that the
person to whom a notice under rule 5(2)(a) or a
summons under section 8B is issued, cannot be called
upon to disclose his version of the incidents, which
form the subject matter of inquiry, because when a
serious allegation is made, which affects the reputation
of a person, the proceeding from. that statement .as-
sumes the form of a criminal trial or a proceeding
similar to or analogous to a criminal trial .and that the
difference between the proceedings under section SB
and a criminal proceeding would be minimal, was also
rejected.
3.20 Referring to the contention urged by the
counsel that the person to whom a notice .is issued
under rule 5 (2)(a) cannot be called upon to disclose
his version of the incidents referred to in the notice,
because that would amount to "pre-empting he
defence" of that person. it was pointed out that
contention is based upon a misconception of tbe true
nature of the proceedings and the express provisions
made in the Rules, which are part of the Act. Under
rule 5 (2) (a) the Commission is under a statutory obh-
"ation to call upon.persons, who in the opinion of the
Commission should be given an opportunity of being
heard to furnish to the Commission a statement relat-
ing such matters as may be specified in the notice ;
and obviously it could not mean that even though a
person is given an opportunity of in . nn
inquiry, he should not be upon to turmsh to the
Commission a statement relating to the matters as may
be speCified in the notice. Under the Act opportunity
must be given in those cases in which there is SOJ?e-
thing to be investigated into or inquired into a finding
on which might be prejudicial to the conduct of the
person to whom notice has been issued.
,. 3.21 The Commission pointed out that rule 5 (3)
expressly provides that disclosure be
on affidavit in support of the facts stated m the state-
ment sworn by the person furnishing the same.
3.22 lt was contended that by calling UJ?.On a person
to file a stalen1en1 unde'r 1'ule S(2)(a) disclosing his
version as regnrds certain incidents, 'there is pre-emp-
. ting of t'he defence h'ecimse that person is called upon
to make a statement in an inquiry before Com-
missio'n : it was emphasised that the Comm1ss1on has
to ascertain the facts and in ascertaining those fa::ts
assistance of persons, who should be gi'Ven opportunity
of being heard is asked for, and the persons, whQ are
g\ven opportunity should make . statements <?1'1 6atfJ
and also produce documentary evidence on which they
rely ; accordingly, therefore the contention was
rejected.
3.23 The Commission also reiected the contention
raised by counsel for Smt. Gandhi that a oerson to
whom a summons is issued under section 8B cannot
be cross-examined, since section 8C contemplates
cross-examination of witnes$es onty and a person whG .
deposes to the involvement of the person against wh_om
an inquiry is being made and n.ot a .. oers<;>'n
whom or ip whose conduct an mqutry 1s being made.
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This argument was sought to be supported on three
grpunds_:
(i) rule 5(2) (a) every person notwith-
standing the amplitude o1 the expression
used therein still excluded persons against.
whom some allegation of impropriety was
made;
(ii) the terms of section SB, referred to a defonce
to be made by a person whose conduct was
being inqujred into or the reputation of that .
person was likely to be prejudicially affected ;
(iii)
and
in terms of section 8C the right pf cross-
examination is con(erred upon certain persons
and by implication it means that the person
whose conduct is b,eing inquired into, is not
a person who can "be cross-examined.
3.24 The. Commission rejected these contentions
and observed that section SB confers the .
basic protection to any person that he shall not be
condemned unheard by the Commiss.ion, i.e. his con-.
duct should not be adversely commented upon by
reaching a tinding that his version is 'not true, without
gi_v1ng him an opportunity of being heard, The finding
may be of impropriety or of an act which may amount
to an Q.ffence or .anything which might bring him into
disrepute. If the. Commission\ thinks it- necessary to
inquire into the c9nduct of such a person, it is necessary
to give a notice under section 8B and that such a perso"n
woulq obviously be a person against whom there is an
allegation made by someone. Similarly, it would be
necessary to issue a summons to the person, who in the
opinion of the Commission is likely to be prejudicially
affected by the holding of the inquiry. It was pointed
out that section 8C defines the contours of a reasonable
opportunity of being heard in the.course of the inquiry.
Reasonable opportunity of be,ing heard is not merely
of making an oral representation or denyi'ng what
alleged but including right to : appear by counsel, arid
to cross-examine witnesses who depose against him
and to lead evidence to rebut that evidence and to
address the Commission. That, however, does not
mean that when the Commission is holding a"n inquiry
into the condct of any person, such a person . is
immune from cross-examination. The procedure,
which the counsel suggested should be followed is
that once a summons is issued under section SB, there
is no scope for the issue .of notice under rule ( 2) (a) ;
and all the witnesses on behalf of the person who have
either made a complaint or whether there was no com-
plaint, where a reference has been made on behalf of
the Commission should be examined, should be allow'.!d
to be cross-examined by the person whose conduct is
under investigation and thereafter such a person may
be examined by the Commission but not by counsel
appearing for other persons, or even bv counsel for
tlie Union or by cou'nsel for the Commission.
3.25 It was observed that tl.1ere is nothing either
in the Rules nor in the Act, which supports the
contention. There is not even an indication that such
a procedure is intended to be followed, unless it is
assumed that when conduct is attributed to a person
14
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which may ultimately result in some action to be
taken for impropriety. if the of the: Commis-
sion is accepted, the proceedings before the Com
mission itself assume the form of a c;;riminal trial. FQr
such an assumption, there is no warrant.
3.26 It was pointed cut that the procedure has to
be devised by the Commission in each case having
regard to the nature of the inquiry to be made; anc;l
rarely there would be any two Commissions, w)1ich
would follow the same .procedure. There may be . a
case, where no person may be involved directly or
indirectly; but only certain matter,; are to be investi-
gated by the Commission. There may be cases in
which no person may be named as responsible for,
any impropriety and such persons may have to be
identified and their involvement jn the impropriety
determined; ,there may be other cases in which the
person alleged to be responsible for improper conduct
may be named. In each such case the procedure
would be different" and Commission bas to devise
a proccdurc, subject to the Rules and affording pro-
tection or safeguards provided by the statute to the
persons against whom inquiry may have to be rnade.
It was also observed that section 8C has no indeperi-
de?t existence : it i:nerely gives 9cmtent to the z:ight
bemg heard, as given by section SB. Section SC
is not intended to restrict the .scope of the inquiry
which has to be made by the Commission. or to attri-
bute to the inquiry a form di fferent from the normal
form of an _inquisitorial
3.27 The Commission is obliged to devise a proce-
dure under section 8 of the:;, Act having regard to the ,
nature of the inquiry to be made. The procedure,
however, has to be subject to the Rules, which may
be made by the Commission in that . behalf. The
Commission is entitled, however, to regulate pro-
cedure subject to the basic safeguards provided in
sections SB and 8C. The Commission has also to .
issue, as soon as may be, a notice to every person
who, in the opinion of the Commission should be
an opportunity of being heard in the inquiry to furnish
to the Commission_ a statement relating to s.uch matters
as may be specified .in the notice and that such person
should be required to submit suct1 a statement under
clause ( 3) of rule 5. by an affidavit in support of the .
. facts set out in,J he. s.taternent .sworn by the person
furnishing the statement. Apart from that the Com-
mission has the additional power of ca!Eng upon any
person to furnish information on such points or
matters as, in the opinion of the Commission, may
be useful for or relevant to the subject matter . of the
inquiry and the person, so required, is legally bound
to furnish such-information.
3.2S The proceedings of the Commission are not
analogous to proceedings fo a civil tr.ial or enforcement .
of a civil right or obtaining relief for infringement . of
a civil right, nor of a criminal trial in which the
conduct of a person or persons for the commission
pr infraction of the law is sought to be investigated.
The function of the Commission is to determine facts
relating to matters of public importance and by adop-
tion of a procedure, which is not adversary in charac-
ter, but inquisitorial in . character.
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3.29 Under section .5 bf the Commissions of In-
.quiry Act, Commission may be invested with
additional powers which are set out .in that section.
By section 5 (2) the Commission has the power to
re.quire
1
any person subject to any privilege, which
niay be claimed by that person: under any law for
the . time being in . force, to furnish information . on
such points or matters, as in the opinion of the Com-
mission, may be useful for, or relevant to, the subject
matter of the inquiry and any person, so required,
shall be. deemed to be legally bound to furnish such
information within , the meaning of section 176 and
; section 177 of the fodian Penal Code.
. 3.30 One objection, which was strenuously urged
before the Commission by counsel appearing for Smt.
Indira Gandhi in the proceedings beforn the Commis-
siOn was that in view of the oath of secrecy takep
by' a Minister entering upon his office under clause ( 4)
of Article 75, according to the forms set out in th-e
III Schedule to the Constitution and on that accolint
Smt. Gandhi was unable to disclose any information
relating to the matters of the State which l>he dealt
with in the course of her functioning as the Prime
Minii;ter . of India till she relegated that ofiice. Article
75,, clause (1), provides that the Prime Minister
be appointed by the President and the othe.r Ministers
a1so &I1al1 be appointed by the President on the _advice
of the Prime Minister. .Clause ( 4) provides that
before a Minister enters upon his office, the President
shall administer to hiin the oaLhs of ofiice and of
secrecy, accordi.ng to the forms set' out for , the purpose
in the Third Schedule. The forms of oath of office,
as set out in the Third Schedule are as follows :-
"I,' A B. (:., do swear
* * *
that L will -bear true faith and allegiance
, . to the _ Constitution -of India, as by law
established, that I will uphold the sove-
reignty and integrity of India, that I will
15
faithfully and discharge my
duties as a Minister for the Union and fftat
I will do right to all manr..er of people m
accordance with the Constitution and the
law, without fear or favour, affection or ill
wiH."
The form of oath of . secrecy for a Minister for t.l.J.e
Union is as follows :-
"I, A, .............. , do swear
*

that I will not directly or indirectly com:
municate or reveal to any person or persons
any matter, which shall be brought under
my consideration or shall become known
to me as a Minister for the Union except as
may be required for the due discharge of
my duties as such Minister."
3.31 The Commission had ruled that the oath of
secrecy of office taken by a Minister of the
does not prohibit a Minister from disclosing the infor-
mation before a Commission of Inquiry especia.lly
when the Central Government has directed the holding
of an Inquiry for the purpose of ascertaining facts
relating to matters of public interest. The Constitution
requires that the Minister shall take an ,oath of ,office
but does not provide for any penalty for breach of
such oath. Again, the obligation is not absolute but
is subject to the communication being made or the
informati'on being revealed, as may .be required in
the due disc'harge of the duties as such Minister. In
the view of Commission, the disclosure of
mation before a Commission of Inquiry 11eld in_
pursuance to a direction of the _Goyernment
after a person has ceased to be a Minister, .d,oes _not
art1ount to a breach of the oath of secrecy of, the
Minister concerned.
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CHAPTER IV
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4.1 The terms of reference to the Commission are
divided into five heads : The Commission is directed
to inquire into the facts al1d circumstances relating to
specific. instances of- .
. (i) of lawful processes and well-
established conventions, administrative -pro-
cedures and practices, abuse of aufaority,
misuse of power, excesses a.nd/or mal-
practices committed during the period when
the rroclamation of Emergency made on
June 1975 under Article 352 of the
Constitution was in force or in days imme-
diately preceding the said Proclamation;
(ii)
(iii)
(iv)
(v)
misuse of PQWer of arrests or issue of deten-
tion orders where such arrests or orders are
alleged to have been made on considerations
not germane to the purposes of the relevant
. Acts during the period;
specific instances of maltreatment of and/or
atrocities on persons arrested under DISIR
or detained and their relatives and close
associates during the aforesaid period;
spedflc of compulsion and use of
force in the implementation of family
planning programme during the aforesaid
pario4;
indiscriminate, high-\1anded or unauthorised
demolition , of houses, huts, shops, buildings,
structures and destniction of property in _the .
name of slum clearance or enforcement of
Town Planning or land use schemes, during
the aforesaid period.

* * *
4.2 The inquiry is directed into specific instances
of excesses or malpractices committed during t{1e
aforesaid periocJ. The inquiry is further directed to ex-
cesses of powers of arrests or issue of detention orders;
16
maltreatment of and/or on persons arrested
under the Preventive Detention procedures; use of
force in the implementation of the Family Planning
Programme and indiscriminate, or un-
authorised demolition of houses, shops and structures .
4.3 lf the primary activity disclosed in a partic1,1lar
case falls under a particular head, it will be dealt with
under that head regardless of the fact that the case
discloses .some other activities like subversion of law-
ful process or conventions, disregard of administrative
procedures or abuse of authority. For example, where
the excess committed relates to the issue of a detention
order, despite the fact that the excess may have beeri_
committed by ignoring the established conventions and
by abuse of authority, the case will be dealt with under
the head "misuse of powers of arrests or issue oi
detention .orders". Similarly, where the specific excess
committed relates to the use of force in the implemen-
tation of the family planning programme, even if it
appears that it was by "abuse of authority" or "misuse
of power", it will be dealt with under the head
"Compulsion and use of force in the implementation
of the family planning programme". Similarly, where
there been indiscriminate, high-handed or unautho-
rised demolition of houses and structures by the abuse
of authority or misuse of power, it will be dealt with
under- the head "Unauthorised demolition of houses,
huts, etc."
4.4 Out of a number of cases which came to its
notice by virtue of the complaints made to it or on
the basis of the information developed by the Com-
mission,. the Commission took up for open hearing
only those cases in which it that there had
been a blatant abuse of authority or misuse of powers
relating to instances falling under one of the five heads
of the terms of reference. In this regaru one general
principle wtich has been kept in mind is that the
excess complained of must be of a nature which would
be capable of creating a crisis of confidence or wnich
is one of national importance.
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CHAPTER v
In the Elections held to the Lok Sabha in 1971 from
the Rai Bareily Consituency Smt. Indira Gandhi was
dedared elected, defeating Shri Raj Narain and others
who had contested the election . . Shr i Raj Narain then
Illed a petition in the High Court of Allahabad chal-
lenging the election of Smt. Indira Nehru Gandhi on
number of grounds, inter alia, alleging misconduct
against her. The High Court of Allahabad pronounc-
ed its judgment on June 12, 1975. Shri J.M. L.
of Allahabad High Court ordered :
"In view of my findings . . ....... . .. this petition is
allowed and the election of Smt. Indira
Nehru Gandhi respondent No. 1 to the Lok
Sabha is dedared void."
The Court further ruled that :
"The respondent No. 1, accordingly, stands d1s-
qnalified for a period of six years from the
date of this order, as provided in section 8A
of the Representation of the People Act. "
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_The Cour t fut the{ directed :
"The operation of the said order is accordingly
for a period of twenty days. On
. - . the:texpiry of the said period of 20 days or
'"".. as 'soon as an appeal is filed in the Supreme
. __ Court, whichever takes place earlier, ' this -
order- shall cease to carry effect."
5.2 Following the judgment of the Allahabad High
Court setting aside the election of Smt. Indira Gandhi
there was a spurt of political activity in Delhi in parti-
. cular and in lhe rest of India in
5.3 Apparently, an effort was mndc by the follow-
) ers of Smt. Indira Gandhi. to create an atmosphere that
she should, notwithstanding that she was unseated and
disqualified to stand for election, continue to r emain
and funct.ion as Prin'lc Minister of India -regardless of
the High ' Court verdict. With that object in view,
a rlumher of demonstrations, r allies and meetings were
arranged by her supporters in Delhi and elsewhere.
5.4 The post-judgment scene in Delhi and some of
the adjoining States was spoken to by a number of
witnesses. Shri Bhawani Mal, the then Inspector
General of Police, Delhi, stated that there was no
denying the fact that there had been a spurt of activity
in wake of the announcement of Shri Justice
Sinha's verdict. Several :Jemonstrations, rallies and
public meetings were organised between J une 12 and
25. Most of these were in favour of the former
Prime Minister, while a few were directed against her,
and all this generated tension but no untoward incident
occurred during that. period.
I 7
5.5 Shri Krishail Chand, the then Lt. Governor,
Delhi, stated that so9n after the pronouncement of
Allahabad High Court judgment, he was called to the
Prime Minister's House, but he sent Shri
Chawla, his Secretary, to proceed to the Prime
Minister's House. He stated that he learnt from Shri
Navin Chawla that in order fo cope up with H1e law
and order situation that might develop from the threa-
tened opposition rallies, it was decided to organise
ralJicc; in support of the Prime Minister; and for this
purpose people had to be collected from various places.
Shri Krishan Chand also stated that he was told that
public utility services would also be mobilised for the
purpose. These services included New Delhi Munici.:
pal Committee, Delhi Transport Corporation and Delhi
Electric Supply Undertaking. _ He further stated that
rallies and of people to the House of the
Prime Minister continuea after the 12th of June in
order to .i;upport to the Prime Minister.
5.6 The records of Delhi Transport .Corporation
show that 17 61 DTC buses were l,iy the
AU India Congress Committee or the Delhi Pi:aqesh
Congre!1s Committee for organising rallies in
port of Smt. Indira Gandhi between June lZ, 1_915
and June 25, 1975. Shri J. R. Anand, who was
working as a Traffic Manager in Delhi Transport
Corporation (DTC) stated that buses were mostly
' tlo oked onhis own orders as the Traffic Manager and
that he did it in pursuance of. the decision taken by
the Chairman of the DTC, wh6 was also the Lt.
Governor. . The instructions were given in a meeting
held at Raj Nivas that full cooperation should be
given by the DTC by,:'arranging buses to carry people
who were taking part in rallies to be organised to
express solidarity to the then Prime Minister. Shri J. R.
Anand has stated that according to the DTC Rules
for special hire by a private party, a.n application in
prescribed proforma accompanied by advance payment
is requir ed; but this formality was not observed in the
case of the bookings made by tfo:: AICC. The buses
were booked on the basis of :telephonic instructions
received from Shri Navin Chawla, the then Secretary
to the Lt. Governor. In the cases of major bookings, -
the details regarding the number of buses and the
parties and places to which M1ey would teport, were
given by Shri Navin Chawla. In small bookings, Shri
J. :,R. Anand stated that Shri Navin Chawla told him
to , get in touch with certain Congress leaders for de
tails. Sh.ri Anand further stated that in the case c:if
heavy number of buses booked on June 12 and 20,
the buses had to be withdrawn from the scheduled
operations, thus affecting the normal services; that
the number of buses booked during the period June
12 to 25, 1975, on special hire, was much above the
normal booking allowed for private parties, which is
five buses per depot; that the total number of buses
which could be 0ooked was 95 a day which was far
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exceeded in the cases of the buses booked by the AICC
and the individual Congress lei1.ders. This adversely
affected the normal operations of the DTC and caused
. much inconvenience to the public. Shri J. R. Anand
has also stated that an amount of 4 lakhs on
account of special hire charges oi the buses is Still
out:.tanding against .the AICC ann DPCC for over
two years.
5.7 On June 13, 1975 the entire fleet of 983 buses
plying on the Delhi rqutes was taken off ti1e rd'ad and
the buses were diverted to converge on the Prime
Minister's House, No. 1, Safdarjung Road to register
their support in favour of Smt. Inc\ira Gandhi. Resi-
dents of Haryana, Punjab, Rajasthan and Uttar Pra.-
desh, which are the States adjacent to Delhi, were
sent in vehicles commandeered by the State aufaorities
for the purpose. A large majority of those vehicles
did not observe the Route Permits Rules required
under the Motor Vehicles Act; and in many cases
Government vehicles were used for which no payment-
was made.
5.8 The recorqs of the DTC clearly support the
evidence of the witnesses that Government employees
were pressed into service for organising these rallies.
A number of buses deputed in connecti'on with these
rallies were required to report to the Government
servants including some senior officers. The state-
. . mcnt of Shri Jaswant Singh, pepot Manager, ,DTC,
gave the names/designations of such officials, numbers
, of buses which were deputed to report to them and
. the relevant date3, which are given below :-
Name of the Officer and designation
S.H.O. Police Station, Faridabad ,.
Smt. Mecnaxi D!ltfa, SOM ..
S.P. New Delhi, Parliament Street Police
Station, Shri K.D. Nayar.
S.H.O. Police Station, Gurgaon
$.H.O. Police.Station, Rai
Shri Bakshish Singh Gill, Dy .. S.P., En-
forcement
Director .
Sbri B. L. Anand, S.D.M.
Si)ri Sareen, Sadar Bazar Police station
Date of No. of
report buses
12-6-75
12-6-75
12-6-75
16-6-75
26-6-75.
12-6-75
12-6-75
12-6-75
12-675
12-6-75
12-6-75
reported
26
2
2
2
4
99
95
16
34
Shri Sarecn, Dy. Director, Delhi Admn.,
Delhi 17-6-75 2
Hayalan, PA to Chief Secretary, U.P. 19-6-75 GO
PA to Chief Minister, Bihar 20-6-75 40

5.9 Rallies were held at New Delhi to register
support for Smt. Indira Gandhi' to continue in office
as Prime Minister notwithstanding the order of the
Allahabad High Court. Government organisations
like Delhi Transport Corporation, New Delhi Munici-
pal Committee and Ddhi Electric Supply Undertaking
18
participated in these rallies. Shri K. D. Nayar, the
then Superintendent of Police, New Delhi, has stated
that he used to visit and supervise law and order
arrangements in the vicinity of the Prime Minister's
House. According to him the participants in these;.
rnllies carried the banners indicating their organisations
and the Unions to Which they belonged ; and that the
participants of those rallies used transport belonging
to their organisations for the purposy of participating
in rallies.
5.'10 The statements of Shri B. K. Mital, Assistant
Secretary (Education) NDMC ; Shri S; P. Goel, As'sis-
tant Engineer I, NDMC ; Shri .Devi Singh, Painter,
NDMC ; Shri Krishan Lal Cha_u(fhary of the HortiCul-
ture Department; -Shfr v. K. Kaushik, A.E.III(E);
Shri Chandari Bedhab; President, Workers Union ;
Shri Mohan Singh, Junior Engineer and Shri. J. C.
Wadhwa, Senior Clerk, all NDMC employees and
S/Shri Dhan Ram, President of the Employees Ul}ion;
Madan Lal, Senior Vice President, Employees Union
and Dalip Singh, Party Leader, all of Delhi Milk
Scheme have also supported the participation of these
organisations' employees and resources in the pro-1Prime
Minister rallies.
5.11 The participation in the rallies was not
confined to Delhi alone. Shri Krishan Chand,
Lt. Governor deposed that
" ... .. ...... some neighbouring States like
Haryana, Rajasthan, Western U.P. also sent
"ont.ingents for .the purpost. All these
arrangements were made under instructions
from the P.M.'s House conveyed through
Mr. Dhawan and the P .M. was kept informed
about the developments from time to time.''
5.12 The. records of DTC also clearly show that a
number. of buses were deputed to make trips outside
the Union Territory of Delhi. Under the M9toi:
Vehicles Rules, the buses going outside the Union
Territory of Delhi are required to be issued special
permits from the State Transport Authority for this
purpose. (See 9). The Secretary, State Trans-
port Authority, has, however, informed the Co1nmis-.
sion by his let-ter dated November 28, 1977,
" . .. . . ..... as per records maintained in this
office no contract. carriage permits were
issued to the DTC for . carrying contract
parties outside the Union Territory of Delhi
or to any private parties for use of the DTC
vehicles outside the Union Territory of Delhi
during the period from 12th June, 1975 to
25th June, 1975.''
According to Shri J. R. Anand, the then Traffic
Manager, a number of buses booked by AICG through
the Secretary to L. G. during this period were also sent
outside the territory of Delhi, and tha.t under the Motor
Vehicles Act route permits had to be obtained. for
sending vehicles outside the Union Territory of Delhi,
which was not 'done in this case ; and that at a high
level meeting at Raj Niwas, it was decitled that the.
buses should be sent to the neighbouring districts of
Haryana and U.P. and the instructions to allow the
buses to pass the barriers had been given ; that to
ensure that the buses reached their destinations in. the
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neighbouring S_tates, the office.ts of the DTC were also
deployed to acco_mpany the buses ; and that he had
also been assured by Shri Navin Chawla that the police
authorities and the State Transport . authorities had
been properly briefed and instructed to ensure that
the buses crossed the borders without any route
permits.
5.13 Shri Raj Roop Singh, Inspector, SHO New
Industrial Township, Faridabad, has stated that after
the of the Allahabad High Court judg-,
ment, he received a telephonic from the police
Headquarters, Gurgaon, that as -informed by the
Deputy Commissioner, Gurgaon, .about 100 DTC
.buses would be al'riving from Delhi for the purpose of
rallies in favour of Smt. Indira Dandhi ; that he was
told, that the buses would report to the police station
and that on demand _from the Labour Inspectors,
Officers of Industries Department and other Govern-
ment Agencies, Shri Raf Roop Singh should permit
them to take the buses with Lhem; that the police
station started receiving telephonic messages from
various places and the buses were directed to report to .
the officers concerned; that the majority of the buses .
were taken by the officers of the Labour Depar tment
and Iridustries Department and people from the
factories located in Faridabad were carried . to Delhi
Oh those buses ; that no records Were maintained Wi.th
regard to the number of buses received or despatched ;
that the police was asked to arrange supply of trucks
or 0M1er conveyance, e.g. four wheelers, for carrying
the people to Delhi ; that the police used to ask the
'Truck Unions and Transport companJes to supply the
required number of vehicles ; that tWs was done under
the direction , of the District Magistrate and the trucks
were collected in SDM's court at Ballabgarh, where
the Block .Qffi.cers (BDOs) . or Tehsildars
used to take charge of the vehicles ; and that the
Patwaris and Grainsewaks were detailed to take trucks
to the villages and to 901lect tl'ie people from there to
carry them to Delhi.
5.14 Sub-Inspector Khan C:rnnd; SHO Sadar
Pol ice Station, Gurgaon, stated that _the SSP Gurgaon
nnd the senior Civil Officers ' ha<l also arriv.ed on the
scene and-under the directions of senior officers some
huscs were sent to the city while others were sent to
various Hictories for carrying people to Delhi.
Inspec.tor Jagdish Lal, SHO Police - Station City,
Gurgaon, has. stated that :- .
" ..... . .. . The empt trucks passing the road
. were also sometime detaiiied and asked to
report at the Tehsil Headquarters for the
purpose. . ..... , ..... ... BDOs and Tehsil-
dars used to take charge of these vehicles
and detailed the Patwaris, Gramsewaks etc.
for taking these vehicles to villages and
bringing people from there for taking them
to Delhi."
S . .15 Shri N. K. Garg, District Magistrate, Rohtak
has stated that oq June 12, 1975, Shri Bansi Lal,
Chief Minister. Haryana, xang him from Haryana
Bhawan. New Delhi. round about 10.30 a.m. and
informed him that the Prime Minister had been un-
seated in the Allahabad High Court judgment, and
desired that truck loads of people, as many as possible
be sent from 2.30 p.m. onwards to the P.M.'s House;
and that in that connection Shri Garg should contact
the local MLA, Lala Shri Kisban Das who would
muster . the Congress workers and that Bansi Lal had
also directed that the persons should raise slogans ;
that pursuant thereto he immediately got in touch
with Shri Krishan Das and conveyed the whole message
to him and called Shri S. H. Mohan, SSP and asked
him that he should make an effort to get as many
trucks as possible for takit1g these people to Delhi.
He also stated that he had received a similar message
froin Ch. Dalbir Singh, the Deputy Minister for
Shipping in the Central Cabinet.
5.1 6 The statement of Shri Garg is supported by the
statement of Shri S. H. Mohan. Shri M. K. Miglani,
who was then holding the office of the District Magis-
trate, has also confirmed in his statement the instruc-
tions given by Shri Bansi Lal, the then Chief Minister,
Haryana. According to Shri Miglani, he learnt from
the local leaders that out of 100 DTC buses that had
come to Faridabad factory area oniy about 40 buses
load could be sent, whereas the remaining buses had
to return empty because they were unable to muster
enough factory workers for thi $ purpose.
5.17 On June 13, 1975 :rnd again on June 18, 1975,
about 800 to 900 employees of DESU participated in
pm-P.M,. rallies outsidG the residence of Smt. Indira
Gandhi at the call of the Delhi State Electricity
Workers Union. This is supported by Shri S. N.
Srivastava, Chief . Labour Welfare Officer, DESU and
Shii K. P. Saxena, Controller Rajghat Power House.
5.18 Another major rnlly took place on June 20,
1975, where as many as 497 DTC buses had been
requisitioned by the organisers of the rally as against
the permissible number of 95 buses, which could have
bee.n booked on special hire by private parties on one
single day. Efforts were also made in the State of
Haryana to contribute to the rally and this is seen
from t he statements of N. K. Garg, District
Magistrate, Rohtak ; S. H. Mohan. SSP Rohtak and
M. K. Miglani, District Magistrate Gurgaon. Accord-
ing to Shri N. K. Garg, J:?istrict Magistrate, Shri Bansi
Lal had told him that this was a p1estigious rally a11d
a personal and crucial affair.' So, the District
Administration sho.1J]d not lag behind in this task.
5 .19 The state of affairs in this regard was not
different in the Stare of The Chief Secretary,
Shri R. S. Talwar, has stated that :
"When it came to my that official
machinery was being 'utilfsed for organising
transport and mustering men and money for
the purpose, I adviSed the then Chief,
Minister not to let Government and semi",
Government agencies and their personnel'
being used in support of a political struggle
with which they as such were not concemed.
This advice was not liked, nor did it have
much effect and official machinery continued
to be? utilise(! for mobilising men, money and
transport to be sent to Delhi."
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5.20 According to the records of the Northern
Railway, three special trains wer'e arranged--one each
Varanasi, Lucknow and Kanpur on June 19,
1975, which arrived in New Delhi/Delhi on June 20;
1975. Two of these special trains had been booked
by known Congressmen. The identity of the pa1ty
requisitioning the special ex-Varanasi s.pecial. train
was not available on the file but the special tram was
arr.angeq for the Congress delegates. For return
journey two special were sent on June 21, +975.
20
5.21 From the State of Rajasthan also, according
to the Raja$than State Electricity Board records, 58
trucks belonging to the State Electricity Bo1,1rd were
ordered by the Chief Minister to be placed at the
disposal of the Workers' Union. Even though the
Chairman of the Electricity Board, Shri Mangal Beha:-i,
had directed that appropriate charges should be made,
but no. payment of .hire charges was made either by
the Government or by the Workers' Union.
5.22 On June 22, 19_75, the Opposition parties
11ad organised a rally which was to be addressed by
Shri Jaya Prakash Narayan. This caused considerable
concern in the official circles. This is seen from the
statement of Shri Krishan Chand, Lt. Governor, who
stated that
"S:!veral meetings were also held in the Home
Ministry ,to consi<lel' as to how best . the
situation "developing from the speeches of
Shri Jaya Prakash Narayan could be dealt
with. At the o$cial level, the view was that
whatever might !be done in respect of other
leaders, Shri .Taya Prakash Narayan's arrest
would make it more difficult to preserve
. public peace than if he was not arrested
. .. _ ....... This view eventually did not
prevail. However, Shri Jaya Prakash
Narayan could not come to Delhi to address
the meeting al Ramlila Grounds on June 22,
1975."
5.23 While Government bodies were vying with
each other to show their support to or sympathy for
the Prime Minister by misusing Government resources,
there were Government employees, both highly and
lowly placed, who were not willing to be a party to.
what they thought was wrong and improper in terms
of employment of Government resources for a political
party for partisan pur'poses. Shri R. N. Bhatnagar of
the NDMC opposed the diversion of the NDMC trucks
from the normal duties to proceed to the P.M.'s House,
and lay in front of a truck of the NDMC. which was
sought to be diverted to proceed to the P.M's House;
He pleaded. th;it if employees and the.
wanted to s1gmfy their support to Smt. Indu-a Gandhi,
they were welcome to do so but not at the cost of the
civic resources.
5.24 Certain employees of the DESU, who refused
to participate in these rallies, were allegedly beaten up
by the more enthusiastic amongst the supporters of
the Prime Minister.
5.25 Shri Mangat Behari; TAS, the Chairman of the
Rajasthan Electricity Board became the victim of the
' .. . .. ' .
wrath of the State Government of Rajasthan as be
had refused to fall in line "'.ith the demand for sending
the Electricity Board workers in the Electricity. Board
trucks, free of cost to attend the ralfy in Delhi arranged
on June 20, 1975 to show support to and solidarity
with Smt. Indira Gandhi. The details of the inciqent
will be set out hereafter when the Commission deals
with the case of Shri Mangal Behari.
5.26 While the Government resources in Delhi and
d sewhere were being utilised to demonstrate support
in favour of the Prime Minister. the law was also
discriminately applied to the Congress party as against
the other parties. Enforcement of prohibition of
meetings under section 144 of the Criminal ProceduI'e
Code, which had become a - normal feature in the
vicinity of the Prime Miriister's House, was relaxed
when it came to demonstrations and rallies arranged
by the Congress party in support of the PI'ime Minister.
This matter was reported to the President, who sent
for the Lt. Governor of Delhi and enquired of him as
to why the other parties were not being given the same
faciliti es as were being_ given to the Congress party.
The Lt. Governor stated before the Commission that
he had told the President that if the opposition parties
were also directed to have the same facilities, that
would have led to clashes creating a law and order
situation. The Lt. Governor further stated that this
relaxation was made in favour of the Congress party
in the order under section 144 of the Code of Criminal
Procedure at the instance of the then Prjme Minister.
5.27 While these demonstrations of sympathy and
. support to the Prime Minister were going on apace,
the Intelligence Bureau of the Government of India
was being used to maintain surveillance on the activjties
of som,e of the important Congress leaders and
Ministers. The Commission oame across a Top Secret
note dated June 18, 1975, sent by the then Director,
Intelligence BurealJ, to the Prime Minister's Secretariat.
It contains matters which among other things could
have been compiled only on the basis of a physical
watch and telephone tappings of the persons concerned,
This raises a very important issue which has relevance
to the assault on the privacy of the individuals and
even of Ministers of Govemment for purposes which
are other than those strictly nccegsary for ensuring the
security of the Stale.
5.28 Shri Jagjiwan Ram, then Minister in
Indira Gandhi's Cabinet stated before the Commission
that even before the imposition of the Emefaency, his
rriovements weI'e watched and that his telephone was
tapped. This he was able to assert on the basis of
the information, which was furnished to him by the
concerned officials, who owed loyalty to him. He
was very critical of 'the Intelligence Bureau, who he
said, was feeding the Prime Minister with information-
some correct, some incorrect and some fabricated.
After the imposition of the Emergency, the watch on
him was intensified. Shri Jagjiwan Ram felt very
strongly about the physical watch on the Ministers
and citizens as it was a gross. interference with the
riclits of citizens and their individual freedom which
should not be permitted in a democracv. He felt that
this was haopening even before 'the Emergency and
was intensified during the Emergency and according
to him it had ceased even after the Emergency.
He was also cnt1cal of the employment of the Intelli-
gence . Bureau for assessing the election prospects of
the Congress, through the Intelligence
Bure.au the smtab1hty of candidates. for contesting the
electwn on behalf of the Congress Party . . Intelligence
B?-reau. conducting such inquiries were fed
with. m1sleadmg information by interested ca11didates
and m consequence the feed back to the Prime Minister
by . the Intelligence Bureau proved equally misleading.
. The decision to take certain drastic steps
including even the declaration of Emergency was
apparently, in contemplation even as early as June 22:
1975. On June 22, 1975, Shri R. K. Dhawan rang
. up Andhra Chief Minister Shri J. Vcugala
Rao, and told him to be available at Delhi on June 24
1975, when of the Supreme Court relating
to t_h7 stay order applied for by Smt. Gandhi pending
of the appeal filed by her was expected to be
annpunced. Presumably, the order which the Supreme
Cou1t would make was to be the deCiding factor on
whether. the drastic action contemplated to be taken,
should in effect be instituted. If the judgment had
been in the n.ature of a categorical and an uncondi- .
tional s_tay, probably no action of the nature, which .
was ultimately taken, would have followed. But the
Supreme Court . gave only a conditional order. On
June 24, 1975, Shii Justice Krishna Iyer delivered his
. judgment on the appeal of Smt. Indira Gandhi. The
opcl'ative portions of the judgment are as follows :
! :
""(i) Subject to paragraph (iii) below there will
be a stay of the operation of the judgment
and order of the High Court under appeal.
.. . (u) Consequently, the disqualification imposed
upon the appellant as a statutory sequal under
section 8A of the Act and as forming part
of the judgment 'aild order impugned witl
also stand suspended. That is to say, the
petitioner will remain a Member of the Lok
Sabha. for nll purposes except to the extent
restricted by Da.ra (iii) so long as the stay
(iii)
lasts. .
The appellant petitioner, a Lok Sabha
.Member, will be entitled to sign the register
kept in the House for the purpose and attend
the Session of the Lok Sabha. But she will
neither . tnkc psirt in the pi'Ol\(\1.xlings in
Lok Sabha nor vote. nor draw a remunera-
tion in her capacity as a Member of the
Lok Sabha.
(iv) Independently of the restrictions under para
' (iii) on her Membership of the Lok Sabha,
her right as Prime Minister or Minister so
long as she fills that office .. to speak in and
otherwise to ta.JCe pa1t in the proceedings of
either House of Parliament or attend sitting
of the Houses (without the right to vote)
and to discharge other functions such as are
: .laid down in .the Article 74. 75, 78, 88 etc.
or under anv other law. and to .draw salary
as Prime Minister, shall not be affected or
. detracted from on acco1int of the conditions
contained in the stay order,"
S/39 HA/77-4 ' .
21
5.30 Since the judgement was conditional, it appears
to ,have been decided that the plan of taking drastic
:.ct1on was to be gone through with expedition and
despatch.
5.31 According to Shti Krishan Chand, the Lt.
Delhi, even as early as the evening of 23rd,
a dec1s1?n had been taken to take the Oppasition
leaders mto custody soon after the Opposition rally,
s_cheduled fot Jl!ne 24, was held. Lists of the Opposi-
tion leaders, which were to be arrested also under
preparation.
5.32 !!ppears from the report dated June 18, 1975,"
of the Director of the Intelligence Bureau, Shri Atma
Jaya Ram that considerable political activity took place
between June 15 and 18. The important aspects of
the political activity were that Shri Krishan Kant
Shri Chandar Shekhar and Shri Mohan Dharia
active in putting forth the view that Smt. Indira Gandhi
should step down and that the party should elect a
new leader. Smt. Lakshmi Kaothamma was also of
view. Shri Krishan Kant pointedly expressed the
view that .so long as Smt. Gandhi remained in office
the Opposition would get "a one-line programme" and
it could snowball into a revolutioti. Shri Mohan Dharia
was advised by Shri Y. B. Chavan in the afternoon of
June 17 not to .raise any dissent in the Parliamentary
Party meeting on June 18. S/Shri Chandar Shekhar
and Krishan Kant met Shri Bahuguna on June 17,
1975 at U.P. Nivas. Substantial portions of this report
have not been verified to be cor;ect and some of them
have been denied by Shri Jagjiwan Ram, who made
his statement before the Commission.
Some of the important events between June 23 and
25, 1975 . i
5.33 It was that a rally would fake place,
headed by Shn J aya Prakash Narayan on June 24,
1975. In the evening of June 23 an inditation was
given to Sht'i Krishan Chand, LL Governor by Shri'
R. K. . Dhawa.n that the Opposition Leaders may have
to be taken mto custody after the rally on June 24
and lists of prominent pplitical leaders to be arrested
were prepared by S. P. (CID) at P.M's House. Shri
Krishan Chand stated that he was shown the lists and
that changes were made in the lists and continued to
be made from tiine to time as a result of continued
diRcnRsions at P.M's House, but that he did Il.ut see
the final list. He ' also stated that the Opposition rally
did n.ot take phice on June 24 as announced to take
place on that day, and so the action prdposed to be
taken on June 24 was stayed.
5.34 On June 24, Shri Krishna Iver
announced the judgment. The Hindi version of the
judgment broadcast over the All India Radio gave the
complete story. This gave rise to certain angry re-
actions a.nd the Minister spoke to the Director of
News. Within a short time a revised Hindi version
was broadcast which was intended fo be favourable to
smt. Indira Gandhi, as brQadcast in the EnP.lish bulletin
at 4 p.m. . In the meanwhile, the authentic copies of
the. iudgment were obtained. Accordini? to Shri
Krishan Chand, after the import of the judgment was
fully realised, it was' decide4 to take drastic action
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_____ A ___ _ , ,.., .. _,, , ,,,,_..---
against the OpP<>sition leaders ..as soon as thel'e were
tangible signs of any_, on their part to _dislodge
tile Prime Minister from her office and it was decided
by the Prime Minister -that action would be taken on
June 25 after the Opposition rally.
5.35 On June 24, 1975, Shri J. Vengala Rao
received a telephonic message from Shd R. K. Dhawan
requesting him to meet the Prime Minister on June 25.
Shri Vengala Rao has stated that Smt. Indira Gandhi
. informed him that having regard to the prevailing
conditions and the contemplated country-wide agitation,
it had been decided to take strong and deterrent action ;
and as this was sul'e to cause resentment and there
was a possibility of some violent action, it would be
necessary to take all preventive actions including
of presons who were likely to cause disturbance.
He further stated that he was requested to pass on
the message to the Chief Minister of who
could not be present and th:;.t both the Chief Minister
of Karnataka and Shri Vengala Rao were asked to be
available on the telephone on June 25 when the final
decision of -the Government of India would be com-
municated to them by Shri Dhawan. Shri Vcngala
Rao left by an IAF plane, which was specially arranged
for him for making a trip to Bangalore. He stated
that he met the Chief Minister of Karnataka at Banga.::
lore, apprised him of what the Prime Minister wanted
him to tell him and in the evening he reached
Hyderabad by the same plane.
,,.5.36 Shri P. C. Sethi, Chief Minister of Madhya
Pradesh, was told at the residence of the Prime Min.ister
on the morning of June 25 by Shri Om Mehta. Minister
of State for Home Affairs, abont the guidelines that
he would have to observe in taking into custody certain
persons. who were capable of creating disturbances.
According to Shri P. C. Sethi, it took place in the
presence of the Prime Minister.
22
5.37 The Prime Minister tried to !!Ct in touch with
Shri Harideo Joshi, Chief Minister of Rajasthan, but
she was unsuccessful in conveyin!? that message to
Shri Harideo Joshi on telephone. Shri Sethi was then
asked to contact Shri Harideo Joshi at Banswara on
his way to Bhopal and convey the <;ame mi;:ssage to
him. Accordingly. Shri Sethi went to Bhopal via
Banswara. by an IAF aircraft. At Bhopal Shri Sethi
took steps in pursuance of the instructions that had
been given to him by the Prime Minister. Shri Haridco
Joshi returned to Jaipur by the same which !
after leaving Shri Sethi at Bhopal, had come to Bans-
wara for this purpose.
5.38 The records maintained at the Air Headquar-
ters of the IAF confirm the flights -of Shri Vengala
Rao, Shri P. C. Sethi and Shri Harideo Joshi by the
IAF aircrafts on June 25, 1975. No payments were
apparently made by anyone for the use of the IAF
aircrafts.
5.39 Shri S. K. Misra, who was the Principal
Secretary to the Chief Minister, Haryana. has in his
statement before Hie Commission. stated that between
12 noon and 2- p.m. on _June 25, 1975, he received
from Delhi a telephonic_ information from Shri Bansi
Lal, the then Chief Minister of Haryann, asking him
to alert the Deputy Commissioners to remain at their
Headquarters and -be available on telephones and also
to reserve huts at Sohna Tourist Complex for two
VIPs, who were to _ reach there on the night of June
25/26, 1975. Lists of persons to be taken into cus-
tody were to be ;prepared by A."J:?.I.G., C.I.D. Shri
Misra met Shri Bansi Lal at about 10 p.m. on his
return from Delhi. At that time the latter told him
that Emergency was expected to be declar.ed that night.
This statement of Shri S. K. Mi$ra is corroborated
by the statement of Shri N. K. Garg, the then Deputy
Commissioner, Rohtak, who had also met Shri Bansi
Lal at Rohtak at apout 4.30 p.m.
5.40 Shri M. K. Miglani, who was _the Deputy
Commissioner at Gurgacin, had taken steps to reserve
two huts in Sohna Tourist Complex on June 25 in
pursuant to the message received from Shri S. K.
Misra. He also contacted the Lt. Governor of Delhi
and in response to his directions detailed one of his
officers to reach Haryana Bhawan, New Delhi, at
about 10 p.m. on the night of June 25, l 975, where
the Delhi Administration authorities were to contact
him.:
5.41 The District Magistrate, Darbhanga (Bihar)
had conveyed to the then Chief Minister of Bihar a
message, which he had received from Patna, to _ the
effect that the Chief Minister of Bihar was to contact
the Prime Minister's House at about- 9 p.m. on the
night of- June 25, Accordingly, the Chief Minister
contacted . the Prime Minister's House and after the
trl.ephonic talk thl!-t the Chief Minister had witt1 the
. Prime Minister, the Chief Minister is reported to have
told the District Magistrate that he wanted to get back
to Patna the same night by road and he wanted to
know the provisions under the Defence of India Rules
with regard to the Press. The Chief Minister told
the District Magistrate to convey to the .Home Secre
tary and TGP the desire of the Chief Minister- that
they should meet him- at his residence at about 2.30
a.m. on the night between June 25/26, 1975.
5.42 According to the statement of Slui Krishan
Chand, all arrangements in connection with the .. im-
pending arrests were discussed at a meeting in the
afternoon of June 25 in the room of Shri R. K.
Dhawan in the presence of Shri Om Mehta, the
Minister of State for Home Affairs, Shri Bansi Lal
and Shri Bajwa, S.P. (CID), Delhi Administration.
Shri Krishan Chand then called a meeting at about
7.30 p.m. at Raj Niwas at which the Chief Secretary,
LG. Police, Deputy Commissioner, DIG (Range) and
others were present. The Chief Secretary of Delhi
Administration. Shri J. K. Kohli had been instructed
to visit the Tihar Jail to arrange necessary accommo-
dation in the jail for those who would be rounded_ up
in the course of the night between June 25/26, 1975
and taken to Tihar JaiL Accordingly, Shri Kohli had-
visited the Tihar Jail at about 8.15 p:m . . in the night,
checked up the availability of accommodation there
and had tipped off the Superintendent of Jail that he
should be prepared to receive about 200
Political -Prisoners", by the next.morning. __
5.43 Efforts were .also i:nade to ensure that some
important newspapers were prevented from bringing
I
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out morning iditions on June 26, 1975. Shri B. N.
Mehrotra
1
Ex-General Manager, Delhi Electric Supply
has stated that he was called to Raj
Niwas by the Lt .. Governor at ab<lut 10 p .. m. and told
that the electricity connections to the Press were to
be disconnected from 2 a.m. that 1iight and Shri
Krishan Chand said that these were the orders from
the Prime Minister's House and had got to be carried
. out. Shri Mehrotra carried out the orders and report-
ed compliance thereof af about 2 a.m. to Shri Navin
Chawla, Secretary to the Lt. Governor.
5.44 Efforts were also made to prevent publication
of newspapers in Chandigarh and Bhopal. Shri N. P.
. Mathur, who was the Chief Conimissioner at Chandi-
garh, had not received any direct instructions either
. Ho01;e Secre!ary oi: from any other respon-
sible quarters m Delh1. Shn N. P. Mathur had con-
.taeteq over the phone oil June 25, 1975 the Houie
. Sect:::lary, . Shri S. L. Khurana to obtain confirmation
. of .the instructions of the Chief Minister of Punjab.
Shri Khurana any knowicc.lge on the subject.
He, therefore,. did not act Ori tl).e verbal instructions
received by him from Shri Z<lil Singh, Chief Minister
of Punjab, to lock up "The Tribune" and its Editor,
Shri Madhavan Nair at Chandigarh.
5.45 Initially irisfructions we:rc issued by the Chiet
Minister of Ma_dhya Pradesh at aboul 9 or 10 p.m.
on June 25, 1975 to the effect that news about the
arrests should notappear 1o, the newsp;ipers of Bhopal .
and other importanf'pfaces. The same imtructions
were subsequently countermanded as . testified by Shri
Narendra Prasad, the then S.P., Bhopal.
' 5.46 It would, therefore, appear clear th.at in vary-
Jng degrees the Chief Ministers of several States were
.into confidence as early as th0 m9rning of
Jui1e_ 25, and they had been instructed to take steps
'to take action on receipt of the advice from the Prime
Minister's. House (hat night. Those who infor-
mation to this effect were the Chief Ministers of
Andhra Pradesh, Karnataka, Madhya Pradesh,
Rajasthan, Haryana, Punjab, Bihar and West Bengal.
The Lt. Governor of Delhi was fully in, the picture
even before June 25, 1975. .
5.47 Shri Sidharlh Shankar Ray, Chief Minister of
West Bengal, has stated that he received a message
from the Prime Minister's Secretariat on the morning
of June 25, and, accordingly, he went to her house.
When she came into the roorri where '.1e W3:S wait:ing,
.she had some reports in her hand and she stated that
the country \YaS in great difficulty; and that in view
of tlw indiscipline and lawlessness, she want-
. ed that something shOuld be done. According to
Shri Ray, she had told him on two er three occasions
prior to this that India required a: shock treatment
arid something had to be done and some sort of
emergent power or dtastic power was necessary. Shri
Ray, .remembered that one such occasion when she
had mentioned about the -shocli: treatment was some-
time. before the announcement of Allahabad judgment
on 12, 1975. On this occasion he had told her
that .they could manage with the Jaws, which were
already on oooks. In this context he had
also mentioned the success with which they lmd tackled
23
the law and order problems of West Bemzal within
the framework of the laws then in force. According
to Mr. Ray, the reports that she read out indicated
that there was lawlessness or threats of lawlessness in
many parts of the Northern India; that while they were
a bearer came in with a piece of paper
from which she read out arid said that this was a
report giving advance information about what Shri
Jaya Prakash Narayan was going to say at a public
meeting scheduled for that day in Ddhi; that Shri
Jaya Prakash Narayan would be calling for a mass
movement within two or three days all over India and
that the usual things would be said by him; such. as,
parallel administration, parallel courts, students not to
join Universities,. Schools and Colleges; appeal to
policemen and to armed forces not to obey what were
supposed to be illegal orders etc. Shri Ray said that-
he did not know from. where this report originated.
According to Shri Ray, there were certairi things, which
when they came from the Prime Minister, he could
not say that they w_ere totally wrong, particularly if
. they were factual; but, according to hiin, she was
firm on the factual aspect that thos-e reports indicated
_that India was drifting towards chaos and anarchy.
.Shri Ray then stated that he told her that he would
like to consider the steps that had to be taken, after
consulting the relevant literature on the subject ; that
she gave. him the impression that she was seribusly
and sincerely disturbed with the conditions prevailing
,.. in the country; and that he asked for some time lo
consult the relevant law and left the Prime Minister's
.. hOi.ise; that lie fame back at about 4.30 or 5 p.m. and
told her that she could consider if she so desired,
Article 352 of the Constitution for the purpose of
imposing internal Emergency; and thereupon she . ask-
ed Shri Ray to go along with her to the President
immediately. The President was then contacted and
an appointment was taken and she went to the. Presi-
deui along with Shri Ray. She gave to the
a summary of what she had told Shri Ray with regard
to the facts; that the President heard her fbr about
20 minutes to half an hour and then asked Shri Ray
as to what were the exact words in the Constitution;
that the President then told the Prime Minister to
make her recommendation; and when she was return-
ing with him from the President's house, he told
that she should involve the other leaders also in that
decision; that though he did not name anyoi1e in par-
ticular, except the name of Shri Ka11t Barobah,
who was the President of the Indian Natiqnal Congress,
he wanted that she should involve the other leaders
and talk to them about this matter; that she wanted
to know the answers to three question::;, which she
had raised:
"Firstly, she to take a decision , without
going to the Cabinet. Ts it possible ? Can
it be done?
Secondly, what should be t.he laugtiage of the
Jetter to be addressed to the President ?
Thirdly, what should be the text of the Procla-
mation?"
Shri Ray thereafter consulted the Business Rules and
a notification pertaining to proclamation of Emergency
in 1971. According to Shti Ray the first
dealt with which tnust go to the Cabmet; the
se_cond category 'dealt with matters, which need not
24
go at all to the Cabinet; and the third category dealt
'Yith matters which could be dealt' with by the Prime
Minister, but had to be ratified by the Cabinet. Smt.
Gandhi said that she wanted to take the decision her-
self and that she would call a meeting of the Cabinvt
early next morning. $hri Ray then told her .that it
She Wanted to take the decision herself, she should
write recommending to the President the prodamation .
of Internal Emergency and avail herself of the relevant
Rules, as provided in the third category of the Business
Rules. Shri. Ray prepared two drafts. According to
hjm, the letter, which Smt. Gandhi had written to the
President :recommending the proclamation of the
Emergency and which was published subsequently in
the proceedings of the Commission, was not the draft
which he had made on the subject and given to the
Prime Minister. According to Shri Ray, Shri Barooah
was also called in latei in the evening and his advice
was sought by Smt. Gandltl as to the kind of speech .
she should make on the radio announcing the procla-
mation of Emergency. Smt. Gandhi, Slui Barooah and
Shri Ray worked over the speech and this exercise
, took a long time-perhaps about three hours. This
was because Shri Sanjay Gandhi used to come into the
room and ask his mother to come out. Smt. Gandhi
would then go out and n.ot return for 5 to 1 O minutes,
and what she did when she went out, Shri Ray did nol
know .. Aflcr finishing the speech writing, when he
was gomg the door of the room, Shri Ray
heard to .his S\lrpnse from Shri Om Mehta that orders
had been passed to loc!<-up the High Courts, the next
day and to . . cut off the electricity connections'' to all
-.newspapers, .Shri Ray was surprised because he had
told her under the. Emergency one could not
any action ';Inless rules were framed. Shri Ray
said .that the Iockmg up of the High Courts and cuttinl!
off of electricity connections could not just happen and
he told that . to those who were present there. He
on and wanted to see smt. Gandhi and convey
to her reactions. He said that he wou1d not leave
and l!ntil she saw him because what was hap-
penmg was important Smt. Gandhi was late in com-
a?d he waiting Shri Sanjay Gandhi met
him m a highly excited and infuriated state of mind
and told him quite rudely and offensively that he did
not kn_?w how to rule the country. Shri Ray did not
lose his temper but made him understand that he
min.d his own business and should not try to
with what was not his sphere. Later Smt.
Gandhi came and he told her about the impending
c!osure of High and cutting off of electri-
city connections to newspapers. Smt. Gandhi im.medi-
ately said that this shoulll be stopped.
5.48. Om MeDta in his deposition before the
stated. that had given information
to. Shn Ray in the Pnme Mmister's house that ni2ht
regarding closure of the courts and cutting
off. of electnc1ty,. . had come to his knowledge
while he was wa1tmg tn one of the rooms of the Prime
Minister's house on that night.
.5:49 Shri Reddy, the Ho1ne
Mm1ster, has said m his statement that he was called
to the house of the Prime Minister at about 10.30 p.m.
a.nd was told that on account of the deteriorating law
and order situation it was felt necessary to impose
Internal Emergency. He told Smt. Gandhi that there
was already an Emergency on and that the powers
already available under the existing Emergency could
be availed of to deal with the situation. TI1ereafter,
he left, but he was sent for again a little later and he
was told by Smt. Gandhi that his earlier suggestion
bad been examined and it was found that the declara-
tion of Internal Emergency was considered necessary.
Shri Brahmananda Reddy thereupon told to do
what she thought was best. He has stated that on
this occasion he also signed a letter to the President
of the Republic making reference to the
conversation which the then Prime Minister had with
the President and appended the draft proclamation of
Emergency for the President's assent along with his
letter. The letter signed by Shri Brahmananda Reddy
was on a plain sheet of paper and was not on a sheet
with the letter-head of the Home Minister of India.
5.50 Shri Akhtar Alam, who functioned as the
Special Assistant to the President of India, has stated
that an important letter from the Prime Minister's
house was delivered to him at about . 10 .30 p.m. on
June 25, 1975, and that he delivered it to the Presi-
dent, who sent for his Secretary, Shri K. Balachandran
and also Shri Ncclkanthan, Deputy Secretary, who dealt
with such letters. Some discussion ensued between th1,;
President and the Secretary about the wording of the
letter aoout which Shri Balachandran raised certain
doubts. At about 11.20 p.111., Shri Dhawan came and
he brought with him some papers. He says that he
did not know what the papers were and he did not
know whether the President signed those papers. The
next morning at about 10.30 or 11 a.m. Shri Akhtar
Alam was given by the President the letter from the
Prime Minister and he kept it in his custody till he
handed it over to Shri Balachandran when Shri Akhtar
Alam left the post in February, 1977.
5 .51 Shri K. Balachandran i11 his depo.sition has
referred. to t.i..ie top secret letter received from the
Prime Minister Smt. Indira Gandhi to the President. .
This letter referred to the discussion which the Prime
Minister haci with the President earlier in' the day.
She had stated . that President was satisfied on the
score of the imminent danger to the security of India
due to internal disturbances. She had also stated that
if the President was satisfied on this score, a procla-
mation under Article 352( 1) of the Constitution had
beconl.e necessary; and that she was enclosing a copy
of the draft proclamation for the President's consi-
deration. Shri Balachandran has stated that there was
no draft proclamation enclosed with the letter. Accord-
ing to Shri Balachandran the Prime Minister had also
stated that she was not consulting the Cabinet due to
shortage of time and the matter was urgent; and that
she was, therefore, permitting a departure from tiie
Transaction of Business Rules in exercise of her
powers under Rule 12 thereof. 'According to Shri
Balachandran he had advised the President that it-
would be Constitutionally impermissible for him to
act in the manner suggested in that letter; and that he
had to act on the advice of his Council of Ministers;
and, therefore, his personal satisfaction in this matter
would not arise. The letter from the Prim(t Mi11ister
I
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25
ipdicated that the had not considitred the
matter. Moreover, it was worded in such a manner as
would make it appeat that the decision to deeiare
Emergency was that of the President based on bis
_personal The President, apparently, saw
the force of this argument and contacted the Prime
Minister on the telephone immediately thereafter.
After\vards, be 1eft the President's room, and came
after about 10 minutes; lo the iQterveiling brief
period, Shd .IX1awan had.,. visited the President and
had delivered the draft of the proclamation of Erner- .
gency for his signature. . The President told him that
he had signed the proclamation and given the same to
Shri Dhawan, who had. taken it back with him along
with the Prime Minister's letter. The next day Shri
Akhtar Alam had told Shri Balachandran over the
telephone that a revised letter had been received trom
the Ptiine Minister, which was subsequently passed
on to him by Shri Ald1tar Alam in February 1977,
he kept it in his file.
.. ,
5.52 The Prime Minister's letter and the procla-
mation of Emergency which are available in the
}>resident's office file are reproduced below :-
"TOP SECRET
PRIME MINISTER
INDIA
NEW DELHI -June 2s; 1975.
"Dear Rashtrapatiji,
I
. As already explained to you, a little While
ago, information has reached us which indicates
. that there is an imminent dallger to the security
of India threatened by internal disturbance.
. The is urgent.
"I would have liked to have taken this tu
but unfortunately this is not possible to-
mght. I am, therefore, condoning or permitting
a departure from the Government of India
. (Trnnsactiori of Business) Rule 1961, as amend-
. ed up-to-date by virtue of my powers , under Rule
1.2 there0f. I shall mention the matter to the
,Cabinet. first thing tomorrow morning.
. "In the Circumstances and in case you are
so satisfied,. a requisite ProClamation under Arti-
cle 352(1) has become rtecessary. I am enclos-
ing a cOpy of the draft Proclamation for your
consideration. As you are aware, under ArHcle
352(3) even when there is an imminent danger
of such a threat, as mentioned by me, the neces-
sary Proclamation under Article 352(1) can be
issued.
"I recommend that such a . proclamation
should be torught, however, late if may be,
: and all arrangements wiJl be made to make it
public as early as possible thereafter.
With kind regards,
Yours sincerely,
(Sd/- !ndira. Gandhi)"
"PROCLAMATION OF EMERGENCY
In exercise of the powers conferred by Clause
1 of Article 352 of the .Constitution; I, Fakhruddin
Ali Ahmed, President of India, by thi.S Proclama-
tion that a grave emergency exists whereby
the security of India is threatened by
disturbance.
New Delhi.;._25th June, 1975.
PRESIDENT"
5.53 On the basls of the evidence it is clear that .
some of the important flinctionaries in the Home
Ministry, Cabinet Secretariat and the Priine._Minister's
Secretariat, who should have been consulted before
such an important decision was taken, did not know
anything about the proclamation of Emergency till
very late and some of them about it only on
the morning of June 26, 1975 .
5.54 Shri l>; N. Dhar, Secretary to the Prime
Minister, in bis statement has said that he. knew about
it only when he was called to the Prime Minister's
House around U.30 p.m. on Jurie 25, when he was
given for perusal the draft of the speech that the Prime
Minister was going to make over _the All India RadiO.
5.55 Shri B. D. Pande, the recei-
ved a phone-call from the Prime MlDlster's House at
about 4.30 a.m. on June 26, and was told that a
Cabinet meeting was scheduled to tak.e place at 6 a.tn.
that morning. He knew about the proclamation of
Emergency for the first time that' moxning only. He
was surprised as to how and who functioned to bring
about the large . number of arrests which had taken
place between 25th and 26th June. Normally, all
instructions for such .expeditious actions wete touted
through the Ministry of Honie Affairs which used their
own channels of communications. -
:;5.56 According to S!1ri B> D. Pam.le, the need
for the declaration of emergency or the situation in
. the country. warranting any such declaration had not
figured in any of the . Cabinet meetings. preceding
June 26, 1975.
5.57 Shri Atma Jayaram, Director, Intelligenc.e
Bureau, has stated that he le.amt about the proclama-
tion of Emergency only after he went to the office on
June 26th.
5.58 S. L. Khurana, who was the Home Secre-
tary to the Government of India, had known about jt
only when he the Cabinet meeting Oil 26th
morning for which he received intimation past 6 a.m.
Accordingly, he arrived at the Cabinet meeting only
around 6.30 a.ril. when the meeting was already on.
5.59 Shri H. R. Gokhale, former Minister of Law
and'. Justice, carne to know about the proclamation of
Emergency, for the first time at Cabinet n1eeting
held on the morning of June 26, '1-975. Neither he
nor his Ministry was consulted with regard to the
proclamation of Emergency at any titn.e before, nor
. was the proclamation vetted_ by him or by his Ministry.

., .
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Some of the special features of the proclama-
tion of Emergency, as gathered from the official re-
cords, are as follows :-
(a) on the economic front there was nothing
alarming. On the contrary, tlte whole-sale
price index had declined by 7.4 per cent
between December 3, 1974 and the last
week of March .1975 as per the Economic
Survey 1975-76, a Government of India
Publication;
.(b) on the iaw an_d order front, the fortnightly
reports sent by the Governors of various
States to the President of India and by the
Chief Secretaries of the States to the Union
Home Secretary indicated that the law and
order situation was under complete control
all over the country;
(c) the Home Ministry had received no reports
from the State Governments indicating any
significant deterioration in the law and order
situation in the period immediately preceding
the proclamation of Emergency;
( d) the Home Ministry had not prepared any
contingency plans prior to June 25, 1975,
with regard to . the imposition of intern:il
Emergency;
(c) the Intelligence Bureau had not submitted
, . any report to the Home Ministry any time
. between 12th of June and 25th of June,
1975, suggesting that the internal situation
in the country warranted the imposition of
internal Emergency;
(f) the Home Ministry had not submitted any
report to the Prime Minister expressing ifs
concern or anxiety about the internal situa-
tion in the country. Till after the Emergency
was lifted, the Home Ministry did not have
on its file the copy of the communication
which was sent by the Prime Minister to
the President recommending imposition of
the Emergency;
(g) while the Director of Intelligence Bureau,
the Home Secretary, the Cabinet Secretary
. and the Secretary to the Prime Minister had
. not been taken into confidence, Shri R. K.
Dhawan, the then Additional Private Secre-
tary to the Prime Minister had been asso-
ciated with the preparation and promulgation
of the Emergency right from the early
stage;
(h) Shri Om Mehta, the then Minister of State
iri the Ministry of Home Affairs, appears to
have been taken into confidence much earlier
than the Home Minister, Shri K. Brahma-
nanda Reddy, who came .into the picture
only when the draft proclamation was
forwarded to the President;
.(i) while the Lt. Goyern9r of. Delhi and the
Chief Ministet'S of Hary_ana, Punjab, Madhya
Pradesh, Rajasthan, Kamataka, Andhra
Pradesh, Bih;:ir and West Bengal had been
given advance intimation by the Prime
Minister about the contemplated action, no
such. advance information was given to the
Governments of U.P., Maharashtra, Gujrat,
ramil Nadu, J&K, Tripura, Odssa, Kerala,
. Meghalaya and other Union Territories. In
tact, shri H. N. Bahuguna, the then Chief
Minister of Uttar Pradesh has stated in his
.aflidavit that he came to know about the
:.proclamation of Emergency on the morning
of Jilne 26, when he was having break-fast ..
along with Shri Uma Shankar Dikshit and
Shri Keshav . Deo Malav_iya, the Central
Ministers, and they . were. as surpdsed as he
was _about the promulgat\on of Emergency.
-5.61 'As: a under rule S{2)(a)
of. the. ,Commis:;i6Jis of Inquiry Rules was issued to
Sint: Gandhi her to file her . statement in
terms of rule 5{3) . . . No such statement was filed by
her. Smt. Gandhi was also issued a summons undcr
section 8B of the Commissions of Inquiry Act. Though.
she responded to the summons under section 8B of
the Act, she declined to take oath. and give evidence
on oath when the Commission desired to examine her
under section 5(2) and according to .the procedure
analogous to the provisions of the Civil Procedure
Code. But in one of the letters addressed by her to
the Commission, dated November 21, 1977, in res-
ponse. to the invitation which was initially extended
to her to assist the Commission, . Smt. Gandhi had
submitted a detailed reply to the Commission in regard
to certain matters and, inter alia, raising certain
objections to the procedure adopted by the Commissfon.
Jn .tl.1e course of her reply, she touched on the subject
of oeclaration of Emergency and stated : '
"I should further like to point out .that the terms
of reference of this Hon'ble Commission
are one-sided and politically motivated.
While they . empower the Hon'ble Commis-
sion to enquire. into the excesses committed
during the emergency, they are silent about
the circumstances which Jed to its declara
tion. This country i.s vast and beset with
deep-rooted and wide-ranging problems.
The administrative machinery is fragmented.
Urgent measures have to be taken. Pro-
grammes are implemented at various levels
. and by different individuals and agencies .
Some excesses in their implementation can-
not always be avoided nor do they always
come to notice at that time. I have publicly
expressed regret for any unjust hardship
-caused to any individual.. But if the
fessed purpose of the inquiry is to check
abuse of power in the future, it is equally
imperative that the circumstances which
created chaotic conditions in the nation before
. t.he emergency should also be enquifed into
and not allowed to be repeated. For two-,
years prececlmg the emergency the country
was in the grip of grave crisis. The econo-
mic situation had: detedor.a.ted due mainly to
in tern al and international causes. beyond our
control. Interested parties and groups wished
deliberately to aggravate the situation for
their own gain. Freedom of speech and
expression were used to spread hatred- and
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parochial regional sentiments. Noble insti-
. tutions of were turned into hot-beds
of political intrigue. Public property was
destroyed at the slightest excuse. A Minis,tet
in the present cabinet is repo.rted to have
pI'oudly claimed, "In November last (1975)
m the Union State of Karnataka alone, we
caused derailment of 52 trains". The attempt
was to paralyse nationaf life. .The dissolu-
' tion of the Gujrat Assembly was forced by
undemocratic means. Duly elected legislators
were beaten and 'infjmidated into resigning
from their seats in the Assembly.
"Relying upon the judgment of the Allahabad High
Court, the demand for my resignation was
made in the name of deri1ocracy and mora-
lity. But what was that morality and how did
democracy come in ? If at all, moral consi-
. derations were on my side as nothing had
been found by the High Court against me
which smacked of moral turpitude. I had
lost on a legal technicality btit law also gave
me the tight to reconsideration of the judg-
ment by the highest court. And the act of
seeking to remove a duly elected leader of
the majority party through threats to gherao
me and with a call io the Army and the
Police to revolt could not be jqstified. in the
name or any known democratic principles.
A chaotic state of affairs similar to that in
India before July 1975 prevailed in France
when de Gaulle came to power in
His major response was constitutional reform
and the intl'Oductio11 of Article 16 in the
new Constitution which goes a long way to
: show how 1iecessary it became for my
inent to resort to the .emergency provisions
:in the Constitution if India were to pull
herself out of the impending disaster. The
new Article provided inter alia that "when
the regular -functioning of the constitutional
governmental authorities is . interrnpted, the
President of the . Republic shall take the
measures commended by the circumstances''
to restore order.
/ 'It inust also be borne in mind that it would be.
impossible for a democratically elected
government to function effectively if it is to
live under the fear of oolitica11y . inspired
fnQuisitorial proceedings its policies
and decisions by. a subsequent government:''
. . 5, 62 Smt. Gandhi sent yet another . reply dated
December 2, 1977, in . response to another invitation,
, whkh was extended to her by the Commission when
the case dealing with the circumstances leading to the
dectaration of Emergency was up for the First
St-age of its hearing .before the C9mmi'ssion from
December 5, 1977 and the following days. The relevant
pottions of her reply are reproduced below :
"In fact, tha't t]le declaration of Emergency,
accordirtg to this Hon'ble Commission,
ruight . be an excess and, therefore, calls fot
ari inquiry, is a matter which does not fall
within . the ourview of this Hon'ble Com-
mission: The proclamation oC Emergency
27
by the President was a Constitutional step.
lt . was approved by the Cabinet and duly
ratified by both of Parliament in
terms of Article 352(2) of the Constitution.
After the ratification, the proclamation which
was political in character, became an Act
of Parliament. In the United States the
exercise of power by the President
has been held to be beyond challenge. Chief
Justice Marshall observed in Marbury v.
Madison;
"By . the Constitution of the United States tlw
President is with certain impor-
ta1H political powers m the exercise of
. which he is to use his own discretion, and
is accountable only to his country in his
political character and to his own
cience ........... , . . The Subjects are
political. They respeet the nation, not
individual rights, and being entrusted to
the Executive, the decision of the
is conclusive.'
1
"Under the Indian Constitutio.!1, on the other hand,
the proclamation of Emergei1y has been
made subject to ratification by parliament.
No authority in this country, not excluding any
commission appointed under the Com-
missions of Inquiry Act, can sit in
over suth an Ac;:t of Parliament. For arty
p<>Iiti::.al the Government under_
. Constltut1on is answerable _.only to ,Parha- .
ment. Jf this Hon'ble Commission arrogates
to itself the power to dete1mil1e that . the .
. dedaration of . Emergency was an excess,
this Hon'ble Commission will not only be .
stultifying the Constitutional Scheme,
also establishing a precedent which will make
serious inroad into Parliamentary supremacy
with disastrous to Parlia-
mentary freedom. Even the terms of
refe1ence of this Hon'ble Commission do tiot
warrant such an inquiry. They are strictly
confined to the determination of --alleged
excesses during the emergency or in the days
immediately prFceding it,
But apart from this, I shouJd like to bring to the
notice of the Hon'blc Commission that while
making its ptonouncement on my submission
that tlie te1ms of reference were one-sided
and politically motivated and that it was
equally imperative that this Hon'ble Com-.
mission. should go into the circumstances
which led to the declaration of Emergency,
this Hon'ble Coinrn.is.;ion observed .. -
.. follows :
'But one thing I propose to bring to the notice,
I am onlv concerned with the declaration
of Emergency, if itamounts to an
and not otherwise. lf on consideration of
the material before me, . I am prima f acie
of the view that of Emergency
could be regarded as an excess, an inC!uiry
in open will te made. If, however, there
is view formed by nie, no such
inquiry will be made.'
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"This observation of the Hon'ble Commission,
I most respectfully submit, is not sustainable.
In the first place it is tantamount to saying :
There shall be an inquiry into the declaration
of Emergency if I can be damned in the
process, but there shall be no inquiry if others
whose actions justified .the declaration of
Emergency, .. are lik;ely , to. be damned.
Secondly, rt is Qifficult to imagine how this
Hon'ble .Commission can take any decision
regarding the declaration of Emergency with-
out full consideration of the range of circum-
i;tances and incidents which had accumulated,
for a long nine preceding thc- proclamatiml,
into an imminent threat to paralyze duly
elected Governments at the Centre and in
States.
28
During that period, ostensibly the attacks were
concentrated upon me. In reality the politi-
cal opposition had b.een using this strategy f
to weaken the Central Government and
subvert its socialist and progressive pro- .
grammes for quite some years. It was a
question of change versus the status q\)o.
Secular, democratic socialism on the one
hand and retrograde, communal and capi-
talistic forceson the.other had been struggling
against each other to gain the upper hand.
The split in the Congress in 1969 gave an
edge to this confrontation. The nationalisa-
tion of banks and other measures which
distmbed entrenched privileges and vested
interests, and offered opportunity and help
to the poor and weaker sections of our
created such tremendous popular
upsurge that communal and capitalistic
elements probably lost all hope of being able
to successfully fight on an ideological plane.
Hence they changed their methods. Similar
such political phenomenon was not peculiar
to India. Recent hi5tory is replete with such
instances.
The vicious campaign of charact.er assassination
and denigration waged by political opponents
denuded Indian politics of all ideological
debates. Even. in the 1971 Lok Sabha
. elections, the opposition did not put forth
any alternative economic or social pro-
J?ramme. I was the focus of attack as the
first target. human . decency was
lost in the process. Their decisive defeat .
at the polls frustrated their faith in the
dePlocratic process. There was then a short
interlude. <;!urine which. India faced one of .
the .ttavest challenj?es with which any nation
has been confronted. The influx of ten mil-
lion refUgees from aggression
and the -subsequent war, unorecedented
country-wide drought and the global infla-
tionarv spiral aggrjlvated by the oil crisis,
and other . factors. would have upset the eco-
nomic baJance of. anv rich and develOPed
country. .India was fill'hfim? for her econO-
mic It was durio2. this period that
the then Ool>bsition resorted to extra-<:onsti-
. tutional means t9 pa_ralyse our democratic
institutions. As I have explained. in my PI.'
vious statement, there was hardly any sphere
of national life which was not sought to be
disrupted.
The inevitable distress of m.any sections of our
people . was exploited to mount attacks
on duly elected Governments and Assemblies
of the day. We c.anno't forg<'.t .' the . tragic
. circumstances leading to the dissolution of.
the Gujrat Assembly only a few months
after its constitution.
It was. in this political atmosphere prevailing in
the country that the judgment of the Allaha-
bad High Court was delivered and was seized
upon by the opposition to whip up
frenzy against_ me. Although was m the
immediate target, the real design was to
dislodge the Congress Go_vernment and to
capture power through extra-constitutional
means. If a duly elected Government can
be allowed to be pulled down. by threats of
violence and demonstrations in the streets
and by incitement of the army an4 the police
to revolt, the democratic stru_clure of tpe
nation would collapse. In 1958, while
putting the case for constitutional reform the
French Prime Minister, M Gallard said,
"Democracy is only in consequence an
anarchy if those who hold power by the
will o{ the majority do not also enjoy an
authority corresponding to the responsibilities
which they assume."
"As Prime Minister of the country I could not
abdicate my resp0nsi!Jility to stem the
impending disaster merely for fear that my
motive in proclaiming the emergency could
be suspected. When the democratic institu-
tions of a nation are held to ransom, and the
Government of the day rises to the occasion -
to meet the challenge, cet'tain freedoms of
some individuals might be affected. That
in fact is the rationale behind Article 352 of
the Constitution whic;h authorises the decla-
ration of Emergency. Emergency was riot .
intended to cause suffering and I have
expressed deep sorrow for any : hardship
caused.
It may not be out of Place .to draw the attention '
of this Hon'ble Commission to the
Prime Minister, Shri Morarii Desai' s recent
. pbservations in the Rajya Sabha that there
was "nothing like absolute right to anybodv."
"Every right is subiect to the rif!ht of the
whole societv. If thre ri2hts of . the whole
societv are in the Government / is
bound to take action to prevent that danger:"
In . these circumstances. the Hon'ble Commis
sion;s predetermination of certain . dates:
while the scope :of its in<Juiry,
belies reality; It has been. repeatiedlv pro-
claimed by members of the Union
Goverriment th:it it allee:edlv of
tlie High COurt of the
12th Jtin,e. 1975. and the analifled i;:tav iriven
by the Supreme Court on 22nd of June, that
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the Emergency was declared for personal
reasons, namely, to stultify the judgment by,
extra-legal means and to niaintain my posi-
tion as Prime. Miriister by extra-constitutional
methods. I have to point out, with utmost
respect, that the Commission appears to
have projected the theory propagated by my
political opponents.
By putting the inquiry beforehand into a prede-
termined _chtonological -mattix the evidence
would naturally proceed under the condi-
tioning of this predetermined matrix, and
this untested material will be systematically
publieised to make it appear as proof . . This,
in my humble opinion, directly defeats the
ends of justice."
5.63 In response to th.e Commission's inquiry, the
Cabinet Secretariat has brought to the notice of the
Commission the relevant portions of the Government
of India (Transaction of Business) Rules, 196L Rule 7
of these Rules reads as follows :
''All cases speeified in the Second Schedule to
these Rules shall be brought to the Cabinet."
5.64 Clause (da) of the Second Schedule of ' the
Government of India (Transaction of Business) Rules,
1961, reads as follows :
"(da)-Cases relating to a proclamation of emer-
gency under Articl_es 352 to 360_ of the
Constitution - and other matters related
thereto." -
.5,65.:ln light of the foregoing rule, it is not
under'stoOd how tbis provision could have been circum-
. by the application of Rule 12 of the same .
Tratisactk>n of-Business Rules; Rule 12 of the Govern-
ment of India (Transaction bf Business) Rules reads
as -follows : -
" 12. ; Departure from Rules : The Prime Minister
may, in; any .case or classes.of cases, permit
or condone a departure from these rules to
the extent he deems necessary."
5.66...-Jn this context, the following information
furnished by the Cabinet Secretariat regarding the
Transaction of Business is relevant t9 the issue :
. .
"The business of the Government is transacted in
accordance with the Transaction of Business
Rules and the Allocatfon of Business Rules,
both of which have been promulgated under
Article 77 of the Constitution-. The
_ tion of Business Rules provide that the
. business of the Government shall be transact-
ed in the Ministries, Departments, Secre-
tariats and Offices specified . the_ First
Schedule to these-rules. The distribution of
subjects among the departments is :specijied
in the Second Schedule to these rules. While
the President can, on the advice of the
Prime Minister, change the allocation of
business between departments, nothing in the
rules seems to provide for the Prime Minis-
ter's Secretariat transacting any business
allotted to a particular :Ministry.
-S/39 HA/77-S -
29
.By virtue of entry 27 under the Haine Ministry,
matters relai'ing to the emergency provisions
of the Constitution (other. than financial
emergency) are t6 be dealt in the Home
Ministry. This, read with_ Rule 3 of the
TransactiOn of Business Rules, therefore,
requires that i:tll business pertaining to the
emergency provisions shall be transacted in
the Home Ministry, with cases relating to
the proclamation of Emergency being
brought befo.re the
The normal procedure for submission of cases to
the Cabinet is for the .Ministry concerned to
send a Note for the Cabinet to the Cabinet
Secretariat. This note contains the proposal
needing Cabinet appr,oval and should have the
approval of the Minister concerned. There-
after the item is pfaced befot'e the Cabinet and
approval, if accorded, is conveyed to the
- Ministry by the Cabinet Secretariat. If time
is short, the Cabinet Secretariat obtains the
approval of the Prime Minister under Rule 12
of the Transaction of Business Rules, and
thereafter authorises the_ Ministry concerned
to proceed further in the matter."
"Since the Home Ministry has a116tted the work
relating to the Emetgency provisions of the
Constitution, proposals relating to the pro-
clamation of Emergency should normally
originate from that Ministry. This would be
particularly so when the Emergency is to be
declared on gwunds of internal disturbances,
as the Home Ministry deals with the Intelli-
gence Bureau, Preventive detention and
National Tntegration. It is the Home Ministry
which is in touch with the State Governments
on matters relating to law and ol'der. The
Cabinet Secretariat did not. however, receive
any proposals from the .HoID;e Ministry in
respect of the Proclamation issued ort the
_25th of June."
5 .67 It may be pointed out_ that even in 1971
when a war was being waged with Pakistan, a pro-
clamation of -Emergency1 was issued without
Rule -12 of the Transactfon of Business Rules. A
regnlar JI1eeting of the C'?uncil - Ministers was
convened and the.Proclamation _was issued thereafter,
after obtaining clear.ance, from the Home
The Cabinet Secretariat conveyed to the Home Ministry
the authorisation to issue the proclamation. Thereafter,
the Presidential proclamation was issued.
5.68 The circumstances leading to the "dilclaration
of pursuant to the advice 6 'the
Minister leave little room for doubt that the decmon
to impose Emergency, when, there was already in exist:-
ence an Emergency proclaitned as early as- 1971, was
exclusively the decision of the Prime Minister. None
of her Cabinet- Ministers. - except Shri Brahmananda
Reddy was even aware of the proposal to advice the
President pursuant to whiCh_ a of Emergency
was . to be made. Even Shn Brahmananda Reddy,,
Home Minister, w.as not consulted; but he was merely
informed shortly before the advice was tendered and
bis
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assistance was taken only for -obtaining a letter
froni him intimating the decision of Smt. G!indhi and
for forwarding the draft Proclamation to the President,
pursuant to which the declaration. of Emergency was
issued. This assistance of Shri Brahniananda .Reddv
. appears to have been taken only as a matter of forn1
.and merely because his assistance was perhaps required
to formally forward the draft Proclamation to the
President.
.5.69 It is necessary, however, to say .something
about the Internal Emergency, which was declared.
Under Article 352, as it stood on the relevant date,
"( 1) If the, President is that a grave emer-
gency exists whereby the security of India or of any
part of the territory thereof is threatened, whether by
war or' external aggression or internal disturbance, .he
., may, by Proclamation, make a declaration to
effect"; The condition on which an Emergency may
be proclaimed is : the satisfaction of the President that
emergency exists whereby the security of India or any
part of the territory of India is threatened, whether
(a) by war, or (b) by external aggression, or (c) by
internal disturbances. The satisfaction may be based
on. any one or more of the three grounds. The decla-
ration of Emergency by the President has no different
effect according as the of the President
depends upon the existence of the State of war or of
external aggression or of internal disturbance. Once
a decJaration of Emergency is made on satisfaction
of one or more of the grounds, the consequences des-
cribed by Articles . 353 and 358 come into operation.
It iS open to President to d.::clare that the right
to move court for enforcement of any of the rights
conferred. by Part III of the Constitution as may be
mentioned m the order shall remain suspended for
the period during which proclamation is in force,
or for such shorter period that may be specified jn
the order. The contemplates declaration
. of only .one Emergency, whe'tl1er the satisfaction of 'fhe
President depends upon the existence of Emergency
arising out of war or out of external aggression or in-
ternal disturbance. The Emergency declared has no
different qualities or connotations, according as the
ground on the President is satisfied, depends
upon the existence of war or external aggression or
internal disturbances. It may be recalled that there
was an Emergency already declared and was in opera- .
tion since December 1971. That Emergency had
never been The Defence of India Rules
in operation as promulgated under the Defence
of India enacted as an, aftermath of the Emergency.
The provlSlons .of Article 358, by which the funda-
mental rights under Article 19 were suspended were
also in The Constitution. in the opin'ion of
. the Comm1Ss1on does .. not contemplate the issue of an
Emergency upon an Emergency already existing nor
prevents the courts from entertaining any challenge to
declaration of this additional Emergency. But
the p.rovisions of the Constitution were amended by
the 39th Amendment of the <;onstitution Act which
prevented a challenge being raised. But when
there was already in. existence . and in operation an
Emergency under which powers could be exercised,
another Emergency was declared and the original Rules
i.e., Defence of India Rules were modified as Defence
and Internal Security of Ru1e.s; 1975.
30
5.70 11..Jis was more in the nature of a shock treat-
ment, thlltl a legally permissible Emergency, wbich
could be declared according to the law then in force.
5.71 If, however, an Internal Emergency could be
declared apart from the External Emergency, the
powers which were exercised before any Rules ' were
framed, i.e. disconnecting the electricity connections of
newspaper offices were wholly unauthorised, since
there was no law which conferred upon any authority
such power. Again, the action taken by the autho-
rities under the directions of the Prime Minister to
arrest a number of political leaders was not supported
by any
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)apv. As will J}M:- pointed out hereafter, orders
could in facl',tissued under the Maintenance
of Internal Security Act or any other statutory provi-
sion by any authority competent . in that behalf after
<lue satisfaction on \matters submitted before that
authority. Prima facie, therefore, the disconnection ot
electricity connections of a number of newspapers and
-Orders for arrests of a number of political leaders and
others without complying with the requirements of
law, was unauthorised and amounted to wrongful
arrests and detentions; and the disconnection of the
electricity was against -the provisions of the Indian
Electricity Act., 1910,
5.72 It may be necessary also to mention that the
conclusions arrived at by the Intelligence Bureau after
U\)<m political lea?ers and
mcludmg tappmg of therr telephones raise a grave issue
of public interest. It has relevance to the assault on
the liberty of an individual, which in a democi:atic
country has very great importance ancj significance,
Even the Ministers of the Government were not spared
in the a<;tion taken by the In'telligence Bureau. They
were subjected to the indignity of being shadowed and
telephones were tapped. Such a power, if at
all, could be exercised only. when aut}Jorised by statu-
tory provisions an'.d circumstances strictly necessary for
ensuring the security of the State in grave times either
of internal disturbance or external aggression or war
and not at other times. On the materials placed
before the Commission, there does not appear. to be .
ariy statutory authority pursuant to which this action_ .
of the Intelligence Bureau was taken. In his
ment to the Commission, Slui Atma J aya Ram the
then Director, Intelligence Bureau, has stated "it
was the normal or usual practice to give such intelli-
gence orally or in writing". Such action does not
appear to .be justified by the existence of any circums-
tance necessary for ensuring the security of tne
State against External aggression" war or internal
Emergency. .
5.73 As. already submitted, it is for the Government
to decide whether or not the Intelligence Bureau may
be used for collecting information for purposes other
than those strictly necessary for the security of the
State. It would certainly be a travesty of the demo-
cratic institutions if the Government constituted by a
political party is entitled to watch the activities of other
political parties and even of members of its own party.
If, however, such power is to be conferred on this
institutio'n, it must be by a statute or statutory Rules
authorising it in that behalf. It is also to be ensured
that this watch or surveillance does not degenerate into
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abuse and/or misuse of auth,ority, may we4
i:llilitate against individual freedom and liberty. A
provision should, therefore, be made to see that it is
resorted to only in extreme emergencies, when it is
thought that is approprfate to do so. In any eveut,
this watch of the 10.teliigence agency on individuals
az:id the materials collected thereby should be open to .
scrutiny to a Board or a Panel composed of officers or
of public men before authorising the continuance of the
watch. It should be possible to harmonise the demands
of the security of the State With the democratic
liberties.
5.74 The problems that the l.B. is being caijed upon
to .handle are increasingly becoming more and more
cqmplex, to be left to the judgment and decision of 011e
iridividual or even a hierarchy of individuals invoived
directly with the job. It. needs to be realised that the I.B.
as an institutio'il plays a .very important and vital role
in the life and affai,rs of the nation. On its being able
to function efficiently, effectively and yet impartially
and objectively, depends not oilly the security of the
Stafe' but also the liberty of its citizens. Considering,
the.refore, the stakes that are involved the proper
and purposeful functioning of the J.B., it is imperative .
that it gets the benefit of ad.vice, guidance and wisdom
of .a body of emJnent, experienced and patriotic gr<.rup
of individuals drawn from different disciplines and
whose loyalty and . personal integrity cannot ever be
called into question. This in tutn will generate the
requisite faith and confidence of the citizens of the
country in this very important institution on the. fair,
. correct and proper functioning of which alorie would
eventually depend the safety, the security a'rid the liberty
of the people of this. country.
' 5.15 This is oA!y to emphasise that the Intelligence
Bureau should not be entitled to act as a super-watch-
men over t'he activities of politicians to whatever party
they belong and the activities of the Intelligence
Bureau should be subject to regulation and control in-
sofa1 as these activities concern some of the clandestine
parts which have come to the notice of the Commission,
to e'nsure that this does not degenerate into .misuse or
abuse .of authority. In a strict th1::otetical sense in a
democratic country any secret operation of tJ1e nalur.e
conducted by the Intelligence :Buteau; which have come
to the notice of tlte Cornmission, would be contrary to
: democratic norms. The Intelligence Bureau should
not be its own judge of its operations with regard to
the necessity or the propriety thereof, nor should it be
allowed to act as an agency or an instrument of politi-
cians or to degenerate into an institution of controlling
.the opponents of . the politii::al party in or ele-
ments within the party in power with which the' control-
authority of the party does not see eye to eye.
5. 7 6 In the present cas.e the watch on. a senfor
Mi'nister of the Cabinet rank and tapping of the tele-
phone of Shri Jagjiwan Ram could not be justified. It
is sorilewha.1 of a mysterious circumstance, that such
stirveillance should have been maintained and allowed
to continue. There is D.6 evidence as tO who ordered it,
what steps were to ensure that the reports
emanating from the Bureau were- tested_and found to
be correct ; and what were the safeguards the Govern-
ment took to prevent and protect itself from acting on
in_correct and incomplete information? ''
5.77 The Water Gate affair and its aftermath in
. the United States of Ainerica led to some very useful
.improvisations of built-in sategilaids for the
activities of that country's InteUigence Agencies.
5.78 The Commission that appropriate
safeguards are necessary and sh9uld be devised by the
Government so as to protect the activities of the In-
telligence Bureau being used as an . iitstrument of
political spying either by ' the Goverlimeilt or by some-
one;) hi the Government. This issue has been raised
to concentrate attention and if considered. appropriate
to generate public debate on the question. ' '
5. 79 lt ,is also necessary to iilvite attention to the
inisuse of Air Force aircraft. . It appears that for the.
benefit of individuals for travelling on State duty or
for State work Indian Air Force aircraft have been
use.cl surreptitiously and, according to the existing
Rules, those persons were not entitled to the use of
the Aircraft. The Commission recommends to the
Government . the framing of appropriate RuleS in this
behalf and also to scrutinise Whether the use 6f the
Aircraft on June 25, 1975 in the circumstances was
warranted and, if not, whether bills for charges a:P-
propriate in that behalf were duly tendered and, if not
tendered, to identify those respbsible for breach of
the Rules. '
5.80 Attention may also be invited to the gross
irreglarities to which the provisions of the Mainten".'
ance of lliternal Security Act and provisions of the
Defence of India Rules were misused to the detriment
of :political opponents. This question will be dealt -
with at some length hereafter. But it . may . suffi..:
cient at this stage to observe that the minimum require..:
ments bf the provisions of the Maintenance of Internal
Security Act and the Defence of India Rules were not
complied with, either at the b'ehest of Smt. Indira
Gandhi or her aides and orders were made without
any g1'0unds, without any satisfaction or maintenance
of any record regarding
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the satisfaction. of competent
authOrities; and personal liberty of many Citizens was
taken way and they continued to remain deprived of
th;tt liberty for substantial periods even in face of the
. safeguards which were incorporated against misuse
of section 16A of MISA which was disregarded with
impunity.
5. 81 In Delhi and in the States, which had advance
information about the promulgation of Emergency,
a large number of arrests/ detentions followed under
MISA in which the safeguards guaranteed against the
misuse of the Act were ignored and grounds of
tentions were not furnished in a large number of cases
and in many cases grounds of detentions were prepar-
ed and even pre-dated and sent many days after the
persons concerned had been arrested/detained in jails.
In a number of cases grounds of detentions had no
relevance to the factual positions and in a f4w case
grounds were fabricated by the police and Magis-
trates did not hesifate to sign them. Ail era of collu-
sion between the police and the Magistracy ensued. In


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many .cases. oral inst'rtictions issued froi;n . the
State Headquarters for of persons ni:ier MIS.A.
In quite a few cases tbe persons were initially takeu
into custody under the pn;ventive sections of law and
tliereafter detai,iied Ul)der. 1 MISA. . This was. the 9e-
vice, which appears to have bee.t:t resorted to in the
Union Territory of Delhi '.shortly after the promulga-
tion.of Emergency. A number of persons were arrest-
ed on false charges uudec 108 or section 151
of. the Code of Criminal Procedure or under both
these sections. Such persons were produced . before
the. Magistrates and the Magistrates in a number of
cases either declined to grant bail or there was <lelay
in e.ffecting the orders of bail and in the meanwhile
orders of detentions were. prQCured frQm the Magis-
trates,. which were passed not infrequently on non-
existent or fabricated grounds. The manner in which
the provisions of MISA were used was 1,1othing short
of perversion and mbckery of its provisions and all the
safeguards and guarantees that had been promised. in
the Parliament _when the MISA B.ill was enacted, we.re
32
to.tally disregarded.. Many apprehensions, which were
by the Members of Parliament, who sp0ke
against conferment of such wide pow.ers when the Bill
was enacted; . came true.
5.82 The safeguards enshrined in the enactment
were rendered meaningless by .the callous misapplica-
tion of this Act by the police and the Magistracy, in
many cases with the full knowledge and cc>nctirrence
of some of the State Governments. . The "ijSe and/or
the misuse of this. Act raises issues, which requires
examination in the larger context. At no time, either
nor111al or , abnonal, should there be any possibility
of misuse of the powers of arrests. It needs to be
niade clear to all those responsible for overseeing the
correct ap_{llication of the powers of arrest/detention
by the jmor officers, that the senior functionaries at
the bureaucratic and political levels would be held
directly accountabfo for any misuse or abuse of the
powers of a1}d detention. . .
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CUAPTER VI
. 6.1 The Commission availed "itself of thl! opportu
nity of going through a large number of tiles of the
.Information & Broadcasting Ministry relating to t.'ie
enunciation of policies on various aspects coruiected
. with the management of the different media of the
Government during the Emergency. Quite a number
of _items also, came up for hearing the
Comm1ss1on and . several witnesses made statements
before the Commission with regard to the information
that was in their possession or the experiences that they
personally had undergone as a result_ of the policy
' then followed by . the Information and Broadcasting
Ministry of the Government. The ite1ns that have
been brought out ,,and which are being reproduced
below are based on documents of the Government and
statements of the witnesses, both official and non
offic'ial.
6.2 The Commission feels that it is necessary to
place on record the actual working of tile I. & B.
Ministry during the Emergency, as a part of the
record . of the times, in so fat as it is reflected in the
following pages.
6.3 Having regard to the voluminous nature of
'the evidence, the Commission has not thought it ap-
propriate to issue any summons under setioil SB of
'the Conunissio.ils of Inquiry Act or notice under rule
5(2)(a) of the Conunissioils of Inquiry Rules to any of
the persons figuring in the note. -The Commission,
. therefore, refrains from drawing any adverse inference
or making any comments which would affect the
reputation of any of the individuals concerned. This
is, however; without prejudke to the notices under
rule 5(2)(a) and summons under section 8B of the
Act .. issued to Shri V .. C. Shukla with regard to the
fqllowing three cases, which are being dealt with
separately : .
(i) Translation of the Congress manifesto;
.(ii) Printing of pc'>sters; and.
(iii) Treatment meted out to Shri Kishol'e Kumar.
6.4 The media policy of the Goverruilent was enun-
ciated by the then Prime Minister, Smt. Indira Gandhi
at a .. high level meeting which was held under her
C!hairmanship on July 26, .1975, which was attended
amqngst others by the Law Minister, Shri l!. R.
khate, the.I. & B. Minister Shri V. c: Shukla and the
Chainnan Policy Plabning Committee .of the Ministry
of Ex.tern.al Affairs, Shri G. Parthsarathy. At this
meeting it been a law should be made
to prevent scurrilous, malicious and -mischievous writ-
ings in newspapers and journals, that news agencies
should be re-structured, that the Government policy
regarding issue of advettise(Uertts by DAVP should be
reviewed, that the 'Press Council should be allowed to
die a natural death, and a review should be made of
all facilities which had been given to Press correspon-
dents by the Government. .
6 .. 5 While explaining the reasons fo1 the imposition
of Emergency, Smt. Gandhi had said that it was the
newspapers which were .inciting the people and creating
a berrible situation. According to her, the agitation
was only in the newspapers and once the newspapers
were placed under censorship there was no. agitation.
Similarly, in a letter which she wrote to Shri Sar<:>j
Mukherjee, Member of Parliament, she said that the
Press had been fomenting trouble baselessly and had
exaggerated rumours.
6.6 Shri B. G. Verghese, former Editor of the 'Hin
dustan Times', New De1lii, who was examined by
the Commission, s11id that Shri V. C. Shukla in bis
first meeting with Delhi Editors had told them that
no confrontation would be permitted between the
Press and the Goverrunent and he explained that this
meant, the end of dissent and protest. Shri Shukla,
has, however, explained that what he meant by the
word 'confrontation' was that there should be
no fight or quarrel a free .Press and a
Government elected by deinocr;:itic processes.
6.7 'J;'he reasons for the measures taken against the
media in gene.ral and the Press in particular
according to Shri B. G. Verghese, W 1he p_ublic
, * ,feat.
m wcfuddal, politH;al, parha
J.llim1acy_agd judicial and it .. aJi .i.nstiiJ.,. .
ient news wanagenient rumi:.4 at .controll
Shti Raj Mohan Gandhi, Editor of"""tffin:ifuat' Bombay
has confirmed that censorship was used to eliminate
dissent and it vastly exceeded the 1-equirements of the
Defence and Internal Security of India Rules. said
that Government achieved this total power to prevent
publication of dissent in a manner, because
it did not want the stigma of officially imposed pre-
censorsbip. The Government, according to Shri llaj .
Mohan Gandhi wanted the powers of a dictatorship:
with theptestige of a democracy Shri Romesh Thapar,
Editor of 'Seminar' New Delhi has testified to the at-
mosphere of fear that surrounded everyone in the
profession.. Even Editors of. national . dailies would
not speak openly the that the
ment had taken agalJ'lst the media.
33
6.a This pervasive atmosphere <?f fear in the media
forced many periodicals. to close down publication -as
they could not find any printer to print their copies.
Thus, Shri A. D. Gorwala, &,litor of 'Qpinion', . coul'1
ndt find a printel' and ultimately he resorted to cyclo-
styling bis magazine and mailing the issues to indivi-
dual subscribers. Shri S. M. Joshi of 'Sadbana',
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Poona, also b_ad to cJ:iange_ his press as the-.1keeper of
the press 'Janwani' was issued with a notice as to
why hls press should not be forfeited for printing
'Sadhana'. Shri Romesh Thapar has also testified as
to bow the 'Statesman' press refused to print his
magazine unless he allowed the 'Statesman's' lawyers
to first check the articles.
. 6.9 The functioning of the media during ' the Emer-
gency period can be discussed under three main
:-
A'. Censorship.
B. Other pressures on tlie Press.
C. Functioning of Government Media Units par-
ticularly, A.I.R. and Doordarshan.
A. CENSORSHIP
(1) Imposition of Cen'Sorship and disconnection of
SIJpply
6.10 Consequent upon the .declaration of Emergency
o June 25, 1975, control of the media had become
necessary . . At the Cabinet meeting held at 8.30 p.m.,
on June 26, 1975 the Cabinet, While reviewing the
Emer:gency situation agreed with the recommendations
of the Ministiy of Home Affairs to impose Press Cen-
sorship. During the 2 or 3 days when the censorship
app<iratus w.as being set up, power supply to the news-
paper offices in Delhi remamed disrupted. The Go'-
vemment disconnected electricity tef./ the newspaper
. offices on the night of the June 25, 1975. when Eme:r-
gency was imposed. Shri B. N. Mehrotra, 'Who 'Was
the then General Manager of Delhi Electric Supply
Undertaking was given oral orders on the night of
June 25, 1975 by the Lt. Governor of Delhi, Shri
Krishan Chand that electric. supply to the newspaper
. . offices in the city should be disconnected. Though
under the provisions of the Electricity Supply Act m
the Electricity Act this was not within the competence
of the General Manager, Delhi Electric Supply Under-
taking, the disconnection wos carried out on lhc basis
of certain security reasons that were adduced without
any formal orders oil that behalf. As some of the
newspapers lay outside Babadul'shah. Zafar Marg area
(the Motherland in Jhandewalan, Hindustan Times and
the Statesman in Connaught Place) the electricity to
these papers c9uld not be disconnected simultaneously.
However, electricity to all newspaper offices on Baha-
dursbah Zafar Marg was disconnected whereas in
other areas disconnection took place only on June 26,
1916. Two or tht'ee days later after the cen&0rshlp
apparatus had been set up, electridty supply was res-
tored to all the newspaper offices. According to Sbri
K.rishan Chand, the then Lt. Governor of Delhi, the
instructions f()r disconnecting power supply came
dul'ing one of a series of meetings at the Prime Minis:..
ter's House on June 25, 1975; but be was upable to
recollect as to who gave the specific orders.
(2) Rule_ 48
6.11 Censorship was impOsed under Rule 48 of
Defence and Internal Security of India Rule&. This
gave authority to the Government to censor or
34
pre-censor matters only in !'espect of the
subjects :-
(i) Defence of India;
(ii) Civil Defence; .
(iii) Public Safety;
(iv) Maintenance of Public Order; and
folloviing
(v) Efficient conduct of
6.12 On June 26, 1975 the Government issu'ed
Statutory Order 275(E) under Rule 48, which listed
the subjects which came within the scope of pre-
censorship. This order was subsequently expanded
to include additional subjects.
( 3) Censorship Guidelines
. 6.13 In practice, however, censorship was carried
on through a set of guidelines issued by the Chief
Ce1faor from time to ti.me, both to subordinate office.s
and to the Press. It is to be noted that it was speci-
fically mentioned that th;ese guidelines were . themselves
not to be published.
6. 14 The first set of guidelines were issued on
July 3, 197? . and supplementary guidelines on
July 4, 1975. According to Shri H. J. D'Penha, the
then to the Government, . these guidelines
were hurriedly drawn up and were vague and, ther.e-
fore, a fresh set of guidelines were prepared i,ind issued
on July 13, 1975. These guidelines were pl'epared by
Shri K. N. Prasad, Additional Secretary, fuformation
a.nd Broadcasting Ministry and were finalised al a
meeting with the then Secretary, I & B Ministry, -Shri.'
, J:.. J. Kidwai and Shri H. J. D'Penha. These guide-' .
Imes were appl'oved by the Minister, Shri Vidya_ .
Charan Stmkla. These guidelines exceeded the scope :
of the llule 48 of 'the Defence and Internal Security
of India. Rules insofo1' as they prevented Edit.ors
leaving editorial columns blank or filling them with
quolations from great works of literature or ff'om
national leaders like Mahatma Gandhi or Rabindra
Nath Tagore or conveying di.sapproval of the Gov;.
ernment's measures undermining public confidence in
national credit or any Government loan. The
mation and Broadcas.ting Ministry did not attempt to
find out whether these guidelines were within the
scope of the Defence and Internal Security of India
Rules or not According to Shri H. J. D'Penha, a sug-
gestion had been made by him that the approval of. .
Law Ministry should be. obtained f?r these guide-
lmes so that they would be m conform.tty with Statu-,:
tory order 275 (E). The Minister had, however, ins-
tructed that in case these guidelines were challenged in
court, appropriate action could then be taken. Shri
Shukla during his testimony before the Commission
said that these were not intended to have any statutory
force !111d that guidelines were devised merely
to ass1st the ed1tors, and therefore, no action was
taken to find out whether they were in eonsonance with
the law on the subject. Merely disobeying the guide-
lines would not have warranted any action against the
newspaper concerned.

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. 6.15 However, this contention of Shri Shukla that
the guidelines did not have any force of law, and that
disobeying them would not warrant action, does not
appear to be correct. Counsel fol' the Union Gov-
ernment and for the Chief Censor had in the 'Bhoomi-
putra' case the Gujarat High Court Wmself
relied upon these guidelines in support of the impug-
ned order of on 'Bhocimiputra'. . The
Gujarat High Court, h6wever, held that these guidelines
were illegal and inoperative. The Gujarat High
Court also said that aft.er Rule 48 had been made, the
Central Government and the Chief Censor had gone
stride after stride beyond the scope of Rule 48 ..
6.16 Similarly, in .the Binod Rao's case, the Bom-
bay High Court held that under the censorship orders,
the Chief Censor could not possibly issue instr'Uctions
in the guise of directions which go beyond the scope
of censorship.
( 4) Censorship of.. Parliament and Court
35
Censor Office1 before it could be published. A long
series of 'dos' and 'donts' had been given in these
guidelines, but they were all subject to the final proviso
that any or news which was violative of cen-
sorship rules in force at that tiin.e would not be per-
mitted.
6.20 From the January Session of Parliament, a
Censor Room started functioning from Room No. 64,
1st Floor, Parliament House. . Censors worked there
in tv-{6 shifts from 10.30 a.m. to 3 p.Iil. and 3 p.Iil.
to 10.00 p.m. It was also decided that there would
be no name board affixed on the door to show that it
was the Censor Room.
6.21 On January 14, 1976 all. news etc., relating
to questions and answers, statements and discussions
on censorship in Parliament were expressly dis.allowed
from publication. On 7th March, 1976 fresh guide--
lines were issued for Parliament. These guidelines
said that the image of Parliament as the voice of the
people and as a sovereign body should not be allowed
to be impaired but all news etc., relating to the pro-
ceedings of tpc Parliament were to ,be governed by
Rule 48 of Defence and Internal Security of India
Rules.
6.17 Parliamentary and Court proceedings were
a!so subject to censorship. The guidelines issued on
July 13, 1975 had stated that censorship would apply
to the publication of some news etc. relating to the
prqceedings of Parliament and of Legislative Assemb-
Ues. The guidelines inter alia stated that statements
made on behalf of the Government could be publish- 6.22 As regards courts of law, gttidelines were
ed either in full or in a condensed form but its contents issued to the press whiCh said that while publishing
should not infringe certsorsh!p. else was news, comments or reports relating to proceedings in
allowed to be published exd:pt the names and party" - a Court of Law only the operative part Of the judg-
affiliation of the Members speakiI:ig on a subject in ment was to be published in appropriate language
support or against the subject. The result of voting and nothing should. be published which. would infringe
could be factually reported. . censorship laws. During the course of his testimony,
Shri H.J.D'Penha, Chief Censor said that publication
. 6.i 8 Supplementary guidelines for Parliament cove- of Court judgments were censored under the instruc-
rage for the Censor were issued on 22-7-1975. 1.;'hese tionof the Ministry of Home Affairs afte.r consultation
. guidelirtes. inter alia laid dqwil. that (a) moveme[)t of .with the Law Ministry. When it was pointed out to
Members ,withii1 the House should not be reported, e.g., him that in the 'Bhoomiputr-a' case) where the Hig!t
ruling party Meml;>ers moving to the opposition bench- Court had ordered that should not be -
es or vice-versa, (b) remarks from the Chair in either ed aod yet he had issued instructiOns to all tie)Vspapers
House should not be allowed as a part of the proceed..: that the judgment should not be published, he said
ings of the House, (c) reference to some of the empty that it was not a censorship order but merely 'public
s.eats in the Opposition Beriches should not be relations' advice.
ed, (d) names of Members who we1ie absent was also
not allowed.
. 6.19 Following a meeting held ,at :the residence of
Shri K. .Raghu_ramiah, Minister for Parliamentary
.Affairs on December .13, 1975, which wa.S attended
amongst others. by Shri V. C. Shukla, Minister for
Information & Broadcasting, Shri Om Mehta, Minister
in the Ministry of Home Affairs, Shri S. N. Banerjee,
Secretary General, Rajya Sabha and Shri M. L. Shak-
dhar, Secretary General, Lok Sabha, it was decided
to impose mandatory pre-censorship on all newspapers
and agencies in regard . to news, comments, rumours
. or otJler reports relating to the Lok Sabha and Rajya
Sabha Sessions which were to be held in January
1976. The guidelines issued on January 4. 1976 to
the Censors for proceedings of the ParJia-
tnent clearly laid down that news, reports, comments
relating to the proceedings of the ParlianiP.nt. would
be governed bv Rule 48 of the Defence and Internal
Security of India Rules arid, therefore, the publication
of news regarding Parliament had to be cleared by the
6.23 Not merely publications of court judg-
ments were censored but , were . also
as to how particular judgments should be published.
Jn Smt. Indira G.a'ndht's appeal to the Supreme Court,
in her election petition case, a series of directions were
issued by the Chief Censor on what aspects of the
case should be given publicity and what aspects of the
case should not be pfayed up at .all. When the judg-
ment was delivered in this case, instructions went to all
newspapers to play up the fact that Sint. Indira
Gandhi's appeal had been upheld and that the cross
appeal of Shri Raj Narain dismissed .
6.24 According to Shri H. J. D'Penha this was
done on the instructions of the Ministry of Informa-
tion & Broadcasting. Shd D'Penha admitted to issu-
ing a number of instructions regarding how judg-
ments of Supreme Court and other Courts should be
carried by newsp;ipers and said that bad been
done under the instructions of superior authorities.
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6.25 Shri V. C. Shukla, Minister for Information
& Broadcasting said that any instructions that he had
issued regarding publication of High Court judgments
were subject to law. According to Shri ,Shukla no
o6icer of the Ministry was expected to flout the law
in any matter or go against tpe directions of tlie
Courts. ,
(5) Transfer of Powed to administer Rule 48,
DJSJR from Ministry of Home Affairs to Minis-
try of (nformation and Broadcasting
6.26 When censorship was originally imposed, the
powers. under Rule 48 of Defence and Internal Se.::u-
rity of India Rules were with the .Ministry of Home
Affairs though the actual functioning of the censorship
machinery was under the Ministry of Information and
Broadcasting. The Ministry of Home fre-
quently expressed its at the short notice
which was generally given and the, scanty material
whiCh was supplied by the Informatio'n & Broadcast-
ing Ministry when it requested the Ministry of Home
Affairs to issue pre-censorship orders.
6.27 Thus when the 'seminar' Magazine was placed
under pre-censorship. the Informatio'n & Broadcast-
ing Ministry sent a note which did not even contain
rele_vant extracts ci! the publication which were con-
prejudicial. Sufficient tlme or opportunity
was, not given to the Ministry of Home Affairs to
consider the case. On the other band the Infonna-
tion'l'& Broadcasting Ministry expected that orders
would be .issued immediately. At a meeting held by
the Information & Broadcasting Miriister, Shri V. C.
Shukla, on July 15, 1976 with Shri R. L. Mishra,
Joint Secretary (IS), Ministry of Home Affairs, Shri .
Shukla expre5sed the view that there was a conven-
tion that once a case had been cleared at his level and
he had taken a decision, no further examination
should take place in the Ministry of Home Affairs.
At that time a decision was taken at the Home Minis-
ter's level that while the Ministry of Home Affairs
would process cases e;tpeditiously, the I & B Minis-
try would supply full material on which_ the Ministry
c;>f Home Affairs could then exercise its own judg-
ment.
6.28 Subsequently the Information & Broadcasting
Ministry again on August 21, 1976 asked for pre-
censorship orders under Rule 48 ( 1) to be issued to
Indian Express. Again no reasons were adduced.
As the , Information &. Broadcasting Ministry was in-
si.gtent, the Home Minister's orders were obtained on
telephone and pre-censorship orders issued. Seeirg
the reluctance of the I & B Ministry to furnish de-
tails and requisite material to the Ministry of Home
Affairs it was decided, by the Home Minister that all
powers under Rule 48. should be transferred to the
Ministry of In'formatioit and Broadcasting.
( 6) Day-_to-day operation of censorship
6.29 The actual work of censorship on day-to-day
basis went even beyond the scope of the
Orders were arbitrary in nature, capricious and were
36
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usually issued orally without any relation to the pro-
visions of Rule 48. Issuing of oral orders had been
exprcssely forbidden by the Chief Censor in the guide-
lines which he had issued on July 13, 1975. Shri
H. J. D'Penha has said that in view of the time
schedule involved and the round-the-clock workjng
of daily newspapers and agencies, reducing orders in-
to writing would have defeated the -;very purpose of
censorship and hence from almost the very beginning
directions on subjects to be censored were issued
orally. Shri D'Penha has also said that he himself
used to receive such orders from various authorities
in the Information & Broadcasting Mi'nistry and iri .
other Ministries and these orders were very seldom .
reduced into writing. Most of these instructions
have been recorded in a Log Book ( 4 volumes) mai'n-
tained by the Duty Roooi of the Censor Department.
A few representative illustrations from the Censors
Log Books are reproduced below :-
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( 1) 'No story is to be cleared pertaining to
Parliament business or Supreme Court
appeal filed by Prime Mi'nister. No refe-
rence to the tase' (12th July, 1975)
(2) 'As pei: instructions ...... only the date
fixed for hearing of PM's appeal is to be
given. Lawyers' name may be given . . ..
no names of judges are to be given' (14th
July. 1975)
(3) 'Reports on proceedi'ngs in the Verghese
VI s Birla case should be reduced to the :
minimum and shoufcl be yery brief'. The
arguments need not be mentioned. If they
are allowed, should not be more than a
para or two' (22nd July, 1975)
( 4) 'There has been a 'bu'ndh' in Ahmedabad;
organised by the ruling party (J anta Fr-0nt).
If the . agencies and the correspondents'
copies say that the . 'bundh was a flop' it
may be allowed, provided the description
of the 'bundh' does not go against Censor
instructions'.
(5)
(6)
'Any statement made by the Chief Minister,
Gujarat, criticising any action taken by the
Centre should be spiked, but if his state-
ment is innocuous it may be allowed. In'
case of any doubt, please ring up Addition-
al Chief Censor, Shri U. C. Tiwari' (26th
July, 1975)
'No reports, comments (including editorial)
articles, statement or news o'n bons to
employees shall be allowed uhtil . further
instructions from ctls' (4th September, 1975)
(7) (i) No adverse critieism of the Ordinance
on Bonus by Trade Unions ii:l Public
Sector Organisations is to .. be allowed;
(ii) Editorial comments on bonus are per.
'inissible;
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(iii)
(iv)
These comments should be within the
official explanation on the bonus .issue
and should not support an agitational
approach; and
That these comments are subject to pre-.
censorship.
(a) Teleprinter message to all the State .
Censors has been sent on the above
lines, with the 'following . :addi-
tions :-
'words like 'shock', 'deplore' or
'ill-advice' should be altered to
'disappointed' or 'surprise'. {26th
September, 1975).
( 8) 'Please ensure that Allahabad High Court
judgment today upholding MISA detenues'
right to move High Court under.Article 226
is not published in the State. Instruct your
Censor in Allahabad to kill story' (30th
C/ctober, 1975)
{9) 'As required, the official version of J. P.'s
release with insti"uctioris not to give _pro-
minence to the news and not to use. photo-
graphs was communicated to agencies .an<l
local papers .... . . . .' (13th November,
. 1975)
.(10) 'KMLP (Gujarat) has been dissolved.
There is likelihood 6f some members issu-
iqg statements withdrawing support to the
Janta Front Government in Gujarat. Such
statelnents should be allowed. Statements
pledging support to the J ati.ata Front Gov-
ernment by some of the members should
be spiked' (fostruction CC) 11th Febr:uary,
. 1976) . . .
(11) the statem.ents made by the Janta Front
Leaders alleging that Centre or .
was out to topple their Ministry or that
Janta Front would take to agitation etc.,
should not be allowed. The statement of
KMLP leaders dissolving their party,; in
support of the J anfa Front are also not to
be Anything which is unhelpful
to the present plan of the Omtrc should
be killed' (15th February, 1976)
(12) 'As desired by JCC(P) all the local dailies
and news agencies were informed that
Shri Tulmohan Ram's case should be .sent
to us for pre-censorship. All references to
Shri L. N. Mishra, Shri Chattopadhyaya
and Shri N. K. Singh are to be deleted'
(5th March, 1976)
( i3) 'About mid-day today the qffice of 'Veek-
shartam' daily (Cochin) . was searched by
the police for reasons not known. .This
daily newspaper is run .by the Kerala
Pradesh Congress Committee. Some of
newspapers which referred a story on: t11i
to me were advised not to carry anything
for the time being ... . ........ .'
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N.B.-This development assumes more impon-
ance in view of the widening rift withh the
. Congress Party in the State. The section
which is rallying behind the PCC President
who publishes the daily is very sore abou't
the . police search. The Police portfolio . is
held by the Congress Minister, Shri Karu-
nakaran who is identified with the rival
in the party.
(This incident is likely to precipitate fur-
ther) (22nd April, 1976).
(14) 'State Censors have been advised . not fo
permit any or references abOut
the tra'nsfer of High Court judges' (1st
June, 1976)
practice censorship was utilised for sup-
pressmg news unfavourable to the Government to
play up news favourable to the Government an'd to
suppress news unfavourable to the supporters of the
Gongress Party. During his statement before the
Commission Shri D'Penha admitted.. that this was clone
under the instructions of the Minisers/Ministry. He
also said that various items of news referring to fac-
tionalism in the Congress Party were also censored
<ln instructions-'-but he has not sa\d whOse instruc-
tions these were. Shri Shukla has said that he bad
not given any .regarding factionalism in
Congress Party or to censor adverse or critical
cornrrients on the Youth Congress.
"
6.31 However, in one instance at least, that of the .
magazine 'Mai'nstream' pre-censorship orders w"&'e
issued largely because of its critical attitude towards
Shri Sanjay Gandhi, Shri Nikhil Chakravarty, Edi-
tor 'Mainstream' told the Commission that Shri Shukla
had c.11lleci pim !Ind told that Shri .Sanjay Gandhi
was a n'atiOnal leader and hence artieles criticising
him would not be permitted. Shri Chakravarty was
asked to give an assurance t'hat he would refrain from
criticising Shri Sanjay Garidhi, an assurance which
he refused to give. Subsequently the 'Mainstream',
was placed under pre-censorship because it had criti-
cised Sf1r.i Sanjay Gandhi and also because it had cri-
tically commented o"n the toppling of Chief Ministers
who did not enjoy the favour .of a particular coterie
at the Centre. Shri Shukla has, however. stated that
he had merely advised Shri Chakravarty with the best
of intentions and any action against Shri Chakravarty
and 'Mainstream' that followed had nothing to do
with the acceptance or otherwise of his advice.
6.32 The caprieiousness of the Censor authorities
a.1!4. t.hcir ... irbifrariness has been commented upc>n by
a number . 0 Editors. Shri Cho Ramaswarny; Eai-
tQr .. :::<Tughlak',. a number of. examples-"Ofhow
.... . satii;ical articles in
... 19 .censorship without their being
even remotely concerned with the Defence and Inter
. nal Security 6f India Rules and Statutory Orciers
. made thereunder. Thus even birthday to
ShriJ Mox-arji Desai on the latter's birthday which Wa$
sought to be in the 'Tughlak' was
Even quotations from statements made
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by Smt. Indira Gandhi were taken, objection to by tl1e
Censor. Shrl Ramaswamy disclosed bow he was
asked to submit articles and sometimes whole issues
of his magazines for pre-censorship because the
of 'Tughlak' dated July 15, 1976 carried (i} editorial
excerpts. from Nehru (iD letters from readers'
(iii) quotations from of Indira Gantlhi
(iv) quotations from Hitler (v) quotations from
Mussolini (vi) passages from state play 'Tughlak'
all of which were held objectfonable by the censor.
(i.33 Shri Nikhil Chakravarty has related how Shri
Shukla objected to quotations from Tagore,
Mahatma Gandhi etc., and said that they cou.ld not
be used. Shri A. D. Gorwala, Editor of the
'Opinion' had included quotations from the Gita in
his magazine and the .whole quotation was censored.
Even speeches made. in Parliament-:-:-Lok Sabha,
which had been published with the permission of the
Speaker of the House and were available for sale at
Rs. 2 were not permitted to be published by the
Censor in S'hri Gorw.ala's 'Opinio"n' magazine. Shri
Gorwala fl,lrther stated that when censorship came,
it struck him that the only purpose a paper like his
could serve would be to try and encourage the spirit
of freedom and that is why he continued publishing
and in his first issue brought out a series of quota-
tions on liberty. This was struck down by the
Censor; after that if there was even a word 'liberty'
or 'freedom' or any refiectio'n about democracy it
would be struck out.
Shri S. M. JoshiL Editor of 'Sadhana' while
corroborating Shri Gorwala, Shri Chakravarty and
Shri about how the Censor took objec-
tion to his publication of quotations from Mahatma
Gandhi a.nd other eminent persons, said that the ob-
jective of the Government was to see l'hat everybody
was silenced and in respect of censorship the ques-
tion of law did not exist.
6.34A Shri Shukla said that the reasons why quota-
tions . were disallowed were that that these quotations
which were made with reference to the British Raj
were now taken out of context, would create mis-
understandings and therefore they should be avoided.
6.3'5 Newspapers were 'not even allowed to keep
the editorial columns blank. According to . Shri
Shukla if the editorial space was le'ft blank this signi-
fied protest and according to the policy of the Gov-
ernment it was not proP<?sed to allow any protest to
be signified in that manner. He further clarified that
. space kept blank in a newspaper was a protest againt>t
the emergency. Therefore, it was unlawful and
therefore, the Government was entitled to say that it
should not be left bla'nk. Both Shri Raj Mohan
Gandhi and Shri Nikhil Chakravarty felt that Gov-
. ernment's objection to edito.r:> leaving space blank in
the newspapers was because they wanted to give an
impression that there was no censorship in the
country.
6.36 According to Shri Chakravarty thiS was an
attempt at self-deceotfon on .the part of the Govern-
ment whereas Shri Rajmoha11 Gandhi felt that accord-
ing to the Censor blank space signified disapproval bf
38
Governmental policies. Since the Government also
wanted favourable articles, one way of forcing journals
:to carry such stories was by not allowing them to
keep spaces blank.
7. Censorship during Elections
6.37 When elections were announced on 18th
January, 1977, yensorship was relaxed and eensoi'-
ship laws were :held in abeyance. E.ven then an
effort was made to maintain control over the activities
of the press. The Government tried to pressurise
the press by giving informally 'off the record' warn-
ings by veiled threats o'f what would happen to them
after the elections if they did not comply with the
directions of the Government, by asking that certain
articles should be published and by enforcing the
Code of Ethics.
6.38 According to Shri Girilal Jain, Editor 01
'Times of India', Smt. Gandhi tried to persuade the
editors to constitute a supervisory committee to over-
see the working of . the press. To do this a Code of
Ethics was drafted by the officials of the Ministry;
journalists had very little to do with it, and had not
accepted it as the Code of Ethics was quite restric-
tive.
6.39 Sbri Nikhil Chakravarty in his testimony has
explained how the Code of Ethics was passed in the
absence of ;veteran and senior journalists, who were
the members of the Committee of Editors and who
had tabled a large 'number of amendments . tci this .
Code, which had been drafted by I&B Ministry offi-
cials. Subsequently Shri Shukla got the All Indi.a
Newspaper Editors Conference also to approve of
this Code. According to Shri Chakravarty, Shri
Shukla wanted to have the Code of Ethics made into
a law but the Cabinet opposed it. According to
Shri Chakravarty a'nd Shri H. Karlekar, Editor of
'Hindustan Times', none of the journalists or their
had accepted the Code.
6.40 Shri L Dayal, Principal Information Officer
to the Government of India' admitted that there wcis
opposition from the journalists to the Code of Ethics
because its origin and source were tainted. Shri V. C.
Shukla, the then Minister for Information and Broad-
casting while tracing the history of the evolution of
the Code of Ethics said that the suggestion for
ing into practice this Code came from the members
of the_ Central Committee o'f Editors. This Central
Committee of Editors was nominated by the Govern-
ment of India and was supposed to be a .representa-
tive body. Shri Shukla admitted that the Code of
Ethics was approved by the Editors at a meeting in
Calcutta where some of the Editors who had suggest-
ed amendments could not be present. Shri Shukla
emphi;isised that this Code was accepted by most of
the professional bodies of the industry a'nd that no-
body made any serious objection to this .Code. .
6.41 Shri S. Sahai, -Editor, Statesman and Shri Ajit
Bhattacharya, Deputy Chief Editor of the Indian
Express told the Commission how during the elec-
tions they were given informal warnings by Shri .

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L; D;:iyal, the Principal Information Officer anq Shri
H .. J . . D'Penha, Chief Censor respectively regarding
the -'type of articles and stories that were appearing
in their papers. Snri Bhattacharya also said that
Shti K. l'-1. Prasad, Additional Secretary, Information
and Broadcasting Ministry had also illiormed Shri
R. K. Mishra, General Manager of the 'Indian Ex-
press' about the stories they were carrying about the
atrocities committed during the family planning cam-
paign at Rewasa and Pipali. Shri L. Dayal confirm-
. ed i:hat the Government was angry with 'Indi.an Ex-
press' and the 'Statesman'; Shri Shukla had him
that as the 'Statesman' was likely to be partisan he
had been told to talk to Shri Sahai and con.vey the
Minister's impress.ion to. him.
. 6.42 Shri K. N. Prasad, Additional Secretary, In-
formation and Broadcasting Ministry also admitted
having conveyed to Shri R. K. Mishra, General
Manager, 'Indian Express' the Government's views
th.at the publication of the article concer"ning atroci-
ties ,committed during the family plall.tling programme
at Pipali village would inflame passions when the
election campaign was picki'ng up momentum. .He
also admitted that family planning was a very
portant issue in the election campaign and that
parties had alleged that excesses had been committed
by the Governmellt in the family planning prograrnme.
He denied, however, that he was motivated by any
desire . to assist the Congress Party's election
campaign.
6.43 Sbri H. Karlekar of the 'Hindustan Times'
a1s6. told the Commission how Shri L. Dayal, . P.I.O.
and Shri I<. . .N. Prasad, Additional Secretary, 1rtade
in.sistent efforts to persuade him to publish an article
by Prof. Rashiduddin Khan, whose main theme, ,
ac.cording to Shri . Karlekar, was that the
was the 6'ne best suited to c?me to power: Both
Shri Payal and Shri Prasad adnutted to speaking to
. Shri Karlekat about this artitle. They have both
denied that any pressui.'e was exerted on Shri Kade-
kar, and bOth have also said that they did not read
the artick which they were pressing Shri Karlekar to
publish.
6.44 The Additional Secretary, $hri K. N. Prasnd,
and Chief Censor Shri D'Penha were also instructed
to keep a watch o,vct the trend Lenor of the pr.css
:ind to sec how they wei"e behavmg after relaxation
of lhe censor8hip !Aws. According to Shri L. Dayal
t11is was done with a view to taking possible action
against such papers after the were over. A
daily press round up was prepared which analysed the
contents of each newspaper and this analysis was sent
amongst others to the Minister of I & B and to the
Prime Minister's Secretariat.
6.45 During the period . of legislatio!1
was also enacted tb make censorship part of the
nary law or the land. Thus the Prevention of
cation of Objectionable Matter Act, was passed, t.he
Press Cou"ticil of India was abolished by an ordin-
ance and a bill repealing the Parliamentary Proceed-
ings (Protection of Publication) Act, 1956 was
ed. According to Shri B. G. Verghese, fi;irrner.
of 'Hindustan Times', the purpose .of this leg1slation
was to institutionalise the emergency.
. .... ,.
39
B. OTHER PRESSURES ON THE PRESS
l. Directorate oj Advertisemem and Visual Publicity
(DAVP)
6.46 The Directorate of Advertisement and Visual
Publicity (DA VP) is the so.e advertising agency for
the Government. A of public sector under-
takings also use it for . advertising purposes. The
advertisement policy of the Govern'.ment had been
enunciated in Parliament from time :to time by Minis-
try. of Information and Broadcasting.
had pro_vided that there would be no d1scnmmat1qn
on political ground for placement Gov.ernment
vertisements. But. newspapers which indulged m
virulent propaganda, inciting communal passion or
offending s6cia!ly accepted cO"nventions <!f or
morGtlity were not to be used for advertisements. The
distribution of advertisemeilts to newspapers was to
be balanced and equitable but it was not intended to. ,
be a ki"nd of financial assistance to newspapers.
6.47 The. Government of lilcUa had decided to !e-
view its advertisement policy at. a high-leyel meetmg
held in the room of Smt. Iildir.a Gandhi, the then
Prime Minister on 26th July, 1975 which was also
:attended by Shri V. C. others.
before this, Shri Shukla at a Coordmat1on Comm1t!e.e
:Meeting held. on 29th June, 1976 had ask.ed the Pr1i1-
cipal Information Officer to prepare. a list of . news-
papers which were to be categonsed as friendly,
neutral anct hostile.
. 6.48 According to Dr. A. R. Baji, "'.ho.was
Principal Information the categorisation on
was d?ne .on the basis of tJie news and com-
ments appearing m newspapers pnor. to the .
tion. of emergency and soon after 1t. . Subsequ_en_t-
ly a narrower study was done on the ,views
in the editorial columns of newspapers between June
12 to June 26 1975. The lis.t was first scrutinised
by Shri Shukla' and was then finalised at a meeting in
Shd K. N. Prasad, Additional Secretary's room and
overall rating given to the .newspapers, in
view its attitude. The master copy of this list was
kept in the personal custody Of Shri K. N. Prasad.
According to Dr. Baji, the list was drawn. up purely
on the basis of the attitude of newspapers towards
:<l;evcl?I?ments of their afli-
l1attons ,f6 political pa.rt1es. The of fr.1endly,
neutml and hostile given to a
was related to its views on a particular pohucal party.
According to Shr.i- K. N: . Prasad this grading hnd
nothing to do with any pohucal party but was purely
in response to its attitude towards the Government.
6.49 A note of Dr. A. R. Baji in the an
index for categorisation of newspapers which is as
follows:
A Friendly B Hostile
A+ Positively :B +Continuously
friendly hostile
A-Friendly :B-Less hostile
but with some than before
reservations
C Neutral
C+Shift from
neutral position
towards positive
side
C-Shift from
neutral position
towards
attitude
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Some of the ne'Wspapers in the -A + list' are:-
1. Natun Assamiya, Assamese, Assam.
2. Amrita Bazar Patrika, English, West Bengul.
3. Nagrika, Bengali, Tripura.
4. Indian Nation, Eng}.ish, Bihar.
5. Hindu, English, Tamil Nadu.
6. Naveen- Duniya, Hindi, M. P.
7. Hindustan, Hindi, Delhi.
. 8. Malayala Manorama, Malayalam, Kerala.
9. Lokmanya, Marathi, Maharashtra.
10. Khaollo, Ma'n,ipuri, Man.ipur . .
In C arid c- categories are:-
1. DaC!_fan Chronical, English, A. P.
2. Searchlight, English, Bihar.
3. Financial Express, ,Pnglish, Maharashtra.
4. Pioneer, Engiisli, U. P.
, 5. Gujarat Salllachar, Gujarati, Gujarat.
6. Navbh'arat, Hindi, M. P.
}. Rajastha'n Patrika, Hindi, Rajasthan.
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8. Nav Bharat & Praja Vani, Kannada, Kama-
taka.
9. Light, Malayalam, Kerala.
10: Suraj, Punjabi, Punjab.
11. Dina Madar, Tamil, Tamil Nadu,
12. Andhra Bhoomi, Telugu, Andhra Pradesh.
13. Chinar, Urdu, J&K.
14. Mehanat, Urdu, Punjab.
In B + category are:-
1. Danik Asom, Assamese, Assam.
2. Danik Sambad, Bengali, Tdpura.
3. Poona Daily News, El)glish, Maharashtra.
4. Indian Express, English, Tamil Nadq.
5. Sandesh, Gujarati, Gufarat.
6. Pradeep, Hindi, Bihar.
7. Vir Pratap, Hindi, Punjab.
8. Deshabhimani, Malayalam, Kerala.
9. Swadesh, Hindi, M. P.
10. Kap.nada Prabha, . J(annada, Karnataka.
11. Navabharat, Marathi, Maharashtra.
40
650 This is only a representative list and there were
a large number of newspapers and other journals ih
virtually :ill languages which were categorised as B
or B +. : . .
" 6.51 & 'the national dailies published in English
from Delhi; the 'Hindustan Times' and 'Times of India'
. were . given A and A-grading and 'Statesman' and
'fodian Express' B grading respectively.
6.52 According to Shri S.M.H. Burney. who was
Secretary in the Ministry of Information and
casting these lists were prepared on the basis. of
instructions received from the Minister. These were
oral orders of. the Minister, and he communiCated them
in writing to ShI'i K. N. Prasad, who subsequently got
the lists prepared. .The .list of newspapers and maga-
zines was to be of those who were in favour of the
Government and also of those who were anti-Govern-
ment and anti-Prime Minister. Shri Burney admitted
that he did not know the kind of assessment made by
the P.I.0., but he was clear that it meant opposing the
Government and not the Congr'Css Party, though he
could give no idea as to the nature of the criticism of
the as distinguished from that of the party.
6.53 Shri C. Shukla while admitting that he had
given directions for preparation of these lists said that
the attitude of the newspapers was to be adjudged in
the light of their general cooperation with the Govern-
ment. According to him, Dr. Baji's understanding of
the task entrusted to him was wrong and Government
merely intended to judge a newspaper's cooperation
from the background of its attitude towards the Oovein-
. ment and particularly .of the adjustment that it had
made during the emergency.
6.54 However, from the evidence which is available
on the files of the DI.VP it is evident that political
considerations was one of the criteria for gjving adver-
tisements. Thus 'Dastan-e-Watan' which is an Urdu
Joumal published from Delhi had its advertiseinents
resumed after notice had been taken by Shri K. N.
Prasad and Shri V. C, Shukla that this journal had
ceased to follow a pro-Jana Sangh policy and was pow
supporting the Congress.
(i.55 Similarly in the case of 'Lok Raj' . of Bhav
. Nagar, _Gujarat, advertisements were stopped when a
complaint was received that this publication was sup-
potting Congress (0) policies. Subsequently an inquiry
was made through the PIB a'nd during the coui::se of
this inquiry it was found that it was a pro-Congress
paper, and Shri Shukla ordered reswnption ofadvertise-
ments to this journal on 15th May, 1976.
6.56 'Alai Osai' a Tamil Daily was being used ')n
a restricted basis by the DAVP because it was allegedly
PI'O-DMK. In February 1976 Shri M. Bhaktavatsalam
requested Shri V. C. Shukla that 'Alai Osai' should
be given more advertisements. Accordingly the nulll-
ber of advertisements to this daily was stepped up.
In 1 ?76, however, on receipt of a complaint from
Shn V. V1sbwanathan, M.P., that th.e 'Alai Osai' was
staunchly pro-DMK, tbe issue of advertisements lo
this daily was stopped. In October 1976 on receipt
of a letter from Shri E.V.K. Sampath, Vice-Pres!dcnt

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of the Tamil Nadu Congress Committee that some
Congressn1en h.ad purchased this daily, advertisements
to this daily were resmed. A number of
weeklies of the Co.tigress--Party were given extensiv'e
advert.isement support, while that to official journa1s of
the opposition came down. The following table illus-
trates the amount of advertising support given lo
Congress Party journals vis-a-vis some of opposi-
tion party journals : -
. -Name of the Party Name.of the Period Circula- Expendi-
Journal tion ture
(Rs.)
3,188
18,647
1,11,740
14,918
1,05,236
2,718
6,555
52,623
3,668
_21 ,250
11,106
736
3,366
2,879
11;957
J 1,442
1,524
13,728
450
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- 6.57 Thus it is apparent that contrary to. policy
enunciated by the Government on the Floor of
Parliament, political considerations were taken _ ii1to
ac_count while releasing advertisements.
41
6.58 The Government during this period utilised
its advertising policy as a source of financial assistance
or denial of to in
co,nplete variance with the poltcy whtch it had
enunciated on the Floor of the Parliament. News-
papers and journals which were critical of the
Government's policies were denied advertisements
whereas others like Amrit Bazar Patrika and National
Herald which were regarded as being supporters of
Government polieies were given advertisements beyond
. their legitimate due.
6.59 Thus according to- Shri Romesh Thapar, Air
-India stopped giving advertisements to 'Seminar'
rnagazine as soon as the order of pre-censorship was
issued on 'Seminar' for some articles containing
aliege<;lly objectiOnable material Soon after .a private
firm told Shri Thapar that its managemeni
received messages that advertiseirtents should not be
released to 'Seminar'.
6.60_ Shri Rajmohan G-andhi has also stated that
-soon after the Government' started . taking adverse
notiCe of 'Himmat' magazine all advertisements from
DA VP and other agencies like Danks
and Airlines wer:e stopped. When Shri
Gandhi inquired from Ajr India, the Bai;ik of
Maharashtra and Dena Bank -as to why his
advertisements had been stopped, he was told that
the Government had placed him oil the _ prescribed
list.
6.61 On the other hand, Amrita Bazar
was c<itegorised as A plus (meaning positively
friendly) according to Dr. A. R. Baji, in the list of
'friendly, hostile and neutral' newspapers. Dr. Baji
told the Commission that A plus, positively friendly,
grading was given to those newspapers which wei;it all
out to support the party in power or the Government.
To use Dr. Baji's phrase, they \vere 'whole-hoggers'.
Amrita Bazar Patrika was given a mid-term revision
of rates by Shri V. C. Shukla w.e.f. 9th October, 1975.
According to Shri Shukla this was done Qn the specific _
recommendation of DAVP. - The DAVP (Shd
has noted on the file in October 1975 that Amrita
Bazar Patrika had asked for a higher rate. In
August, 1975 the DAVP had recommended that
Amrita Bazar Patrika shoqld be given -the same rate
as that- of tbe 'Hindustan Times' as the circulation of
combined edition was the same as the 'Hindustan
-Times'. When the DA VP made a note on the file
he also said that the circulation of Amrita Bazar
Patrika had come down by 5,000 copies-- since its
recommendation of August, 1975 and that" normally
upward revision of rates is not agreed to unless there
is a corresponding _increase in circulation. The
quantum of advertisement released to this newspaper
in t.975-76 was Rs. 9,22,313 as against Rs. 4,57,340
in 1974-75. In 1976-77, quantum Of
ments showed a further increase to Rs. 10,10,696.
Shri V. C. Shukla told the Commission that he
___ regarded the request of Amrita _ Bazar Patrika for
increase in quantity of advertisements as a 'claim'
on the Government. He - also said that it -was
supporting nationalistic policies.
6.62 Similarly, National Herald was given an A
plus rating and quantum advertisement given to
the National Herald Delhi Edition alone iS' indicated
in the following table :- ,
Circulation
Amount (Rs.)
"1974-75

11,048
17,298
1975-76 1976-77
10,880 10,831
66,327 1,32,917
6.63 For all editions of National Herald the figures
regarding quantum of advertisements are as follows. :-
1974-75
1975-76
1976-77
Rs. i,51,304-
Rs, 4,99,589
Rs. 8,70,555
6.64 According to Shri S{mkla the Government
had laid down certain criteria and they tried to apply
tt1em as fairly as possible _ and to the best of jts
ability. Shri Shukla also- did not comment on
individual cases and. said that Commission could
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come to its own conclusions from the record. He
also said that they may have applied the guidelines
wrongly and, therefore, erred.
6.65 On 15th September, 1976, a policy note was
issued by Shri' K. N. Prasad, Additional Secreta-ry,
he said was issued after consultil1g Minister
. Slm V. C. The r,olicy note authorised the
DA VP to canalise advertisements of all Central
Government Ministries, Departments, Public Sector
Undertakings and nationalised autonomous bodies.
It was realised that the State Governments may not
agree to have their advertisements cana)iscd through
the DA VP but it was noticed that the :centre could
advise them to discontinue advertisements to delisted
newspapers. The DA VP was also directed to ensure
that whenever paper was delisted, the publication
of those adver!Isements which had already been
released should be prevented. The DA VP was also
asked . t? tactfull.Y the possibility of private
advert!Slng agencies denymg advertisements to delisted
newspapers. Shri Prasad could not explain the basis
on which the listing or delisting was done by the
PA yP. He also admitted that he did not make. any
mqmry from the PA VP whether declaration made on
Flo?r of the: Parliament by t\1e Government was
bemg v1?latcd either in words or in spirit when he
made this recommendation.
6.6? the of private advertising
agencies denymg advertisements to delisted news-
papers. Shri Prasad said thp.t the DA VP failed to
persuade the private agenci8,5 to fall in line and
therefore, Shri Shukla nimself the
on 5th February, 1977. The minutes of this meetinn
was h71? on 5, 1977 reveal that
adverttsmg agencies agreed to fall in line
with . the Government.'s policies on release of
advertisements.
6.67 From the above it is evident that the
assurance on the Floor of the
Parhan:ent that political affiliations would r.ot be
taken mto consideration while giving advertisements
and the advertisements would not be regarded as
source of revenue or financial assistance to news-
papers, bojh disregarded in the actual
C?f the policy. The liberal of
advertisements; to. so-called friendly periodicals raised
the total expenditure qf PAYP advertisements on
newspapers from Rs. l ,42,3Q,238 in 1974-75 to
Rs. 2,20,68,897 in 1975-76 fo Rs. 2,79,45,942 in
punng the same period 89 newspapers
.Penod1cal were denied advertisements mostly on
pohtical grounds for varying lengths of time.
2. Formation and Functioning of 'Samachar'
. The first indication that the Government was
mtendmg to reorganise the existing four news agencies
namely, U.N.I., P.T.I., Hindustan Samachar and
was apparent at Smt. Indira
Gandhi s }ugh-level meeting of 26th July, 1975.
Subsequently_ at another 'high-level meeting held by
Smt. Gandhi on August 12, 1975 which was also
42
attended by Shri V. C; Shukla, Minister for I&B, the
pros and cons of restructuring the news. agencies into
a statutory body or trust were .considered.
Accordingly the Ministry drew up an ordinance for
approval of. the Cabinet for merging the. news agencies
into a single statutory body. The Cabinet did not
accept the ordinance and decided that the agencies
should be made tq merge without recourse to law
and other methods should be tried.
6.69 According to Shri L. Dayal, who 'was the
P.I.O., Shri Shukla interpreted the expression 'other
methods' to mean that pressure would be put. on the
news agenc;ies by way All India Radio no longer
subscribing to the news agencies, by not . hiring
teleprin_ters of the news agencies and vigorous
recoveries of the dues of the Government. According
to Shri Dayal the inference could be drawn from
subsequent events that the intention of having these
news agencies merged into one unit was to control
their functioning and that decisions regarding this
merger was taken. at the Prime Minister's level.
According to Shri Shukla no dec.isions were taken in
the Prime Minister' s meeting but the discussions held
there helped them to clarify their minds as to what
should be the best form to achieve the objective.
According to him he had understood the Cabinet's
decision to try 'other methods' to mean persuasion,
mobilisation of public opinion, opinion of profession.al
bodies, opinion in Parliament and opinion of the
workers of news agencies.
6.70 He also saia that it was purely coincidental
that the teleprinter connections to Government offices
were when d!scussions regarding merger
':"ere gomg on. He also said that Government showed
mdulgence to the agencies in not . recovering the dues
of the P&T Department because of their tight financial
position. He said this indulgence was a form of
patronage and when they decided that there would
be m?re patrnnage the P&'I'. Department started
realismg its dues. He, however, did not know the .
exact terms of the agreement between the agencies
and the P&T Departm\mt.
6. 71 As regards AIR dues, Shri Shukla said that
the agreement with the agencies had expired. A new
agreement was negotiated and the terms settled. The
agreement was, however, not signed and whatever
were made, were made on an ad hoc basis.
that the ways and means position of the
agencies was bad, a payment of Rs. 5 lac was made
to them on a purely ad hoc basis. .
. 6.72 Shri Mirchandani, Editor and General
Ma1.1ager of U.N.I. said that the rejection of the
ordmance was taken as a set-back py Shri V. c.
Shukla and therefore be resorted to harassment of
the managements of the news agencies to force them
to 1;llerge. Shl'i Mirchandani said that he had
c?ns1stently the merger and he had personally
displease? Shn V. C. Shukla because he believed that
he was mstrumental in getting the Cabinet to rej.ect
the. proposal. He had gone so far as to meet
Shr1 Sanjay Gandhi in .his attempts to stall the merger.
he was forced mto. retirement on Shri Shukla's
ms1stent demands. Dr. Ram Tarrieja, of
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the UNI confirmed that he was put to undue pressure
from Shri Shukla for obtaining Silri Mirchanaani's
retirement.
6.73 According to Shri Shukla, he was aware
Shri Mirchandani had opposed the merger, but said
tnat this was because of his long service i11 UNI,
Shfr Mirchandani had become the de facto
administrator and had devdoped vested interests
the continuance of the UNI. Shri Shukla also said
that it was felt that a person who had no faith in a
unified national news agency would be a hinderance
to a unified set up.
6.74 Shri P. C. Gupta, who was Chairman of
Board of Direct-Ors of PTC, Dr. Ram T arne1a,
Chairman of the UNI Board have both stated that
pressure was put on them by. off teleprinter
lines, non-payment of All India adverse
puplicity given in the Press regardmg their. allegedly
outstanding dues, etc. Shri Shukla ad1mtted that
from the time Cabinet directed him to try 'other
niethods' on December 13, 1975, to the time they
bore fruit on January 24, 1976, that is, a period of
1 .month and 11 days, tl1e agencies were compelled,
induced or persuaded by so-called 'other .
to join in the scheme of merger; but he said that t
was not correct to say that 1'1e entire thing mat.erialis.ed
in one month and 13 days, that it was the final stage
of the effo11 that took shape after the Cabinet meeti11g
of December 13, 1975.
43
, :i. 6. 75 The functioning of Satnachar during the .
. Errtergency both administratively and editor!ally was ,
by Goverll?r'nent. According to \
Shri G. Kasturi, who was C-:1airman of the Samachar
Board was no interference of the Governm.ent
in the' working of Samachat, but from time to t.imc
the Governm<::nt and Shri Shukla made suggestions
which on<:: had to consider because the Government was
in it from the very beginning and required its
assistance for putting Samachar Ort its feet. HoWC\'.Cf,
from the documents available with the Ministry ' of
Information and Broadcasting it is apparent that
Shri Kasturi did consult Sbri K. N. Prasad regarding
advice he had given to Shri Mohd. Yunus about the
constitution of three Samachar Committees. Similarly,
Shri Prasad had got agenda points cleared by
Shri Mohd. Yunus and Shri V. C. Shukla, so that
Shri Yunus could. take further action upon them at
meetings of the Managing Committee of the Samachar.
T{1e proceedings of the Samachar Board meeting were
also being sent to Shri K. N. Prasad. Shri W. Lazarus,
who was the General Matiagei' of the Samachar also
admitted having supplied lists of Samachar personnel
for verification by Cfovernment agencies. Shri Lazarus
also said that he was ' frequently in touch with
Government on matters relating to finances but he
did not take any direction from the Government on
any matter.
6.75A Shri P. C. Gupta and Dr. Ram Tarneja.
members of the Samachar Committee stated that
Samachar was being ordered continuously in respect
of various matters concerning its administration by
the Government.
6. 7 6 As regards editorial control, various members
of the editorial staff, Shri P. S. Kasbekar,
Shri c. P. Maniktala, Shri C. K. Arora,
Shri D. V. Pesa'i and others have testified that
inst.ructions were received from the Government and
from . other .authorities abbut giving proper coverage
to Government and CongresS,., Party activities, and also
to keep coverage of oppq!iion activities on. a
key. In particular, during the election campaign this
imbalance of news was aci;entuated. The type of
stories put out by Samachar can be seen from the
original stories and their edited versibns. Photo
copies of a few illustrative examples are attached as
appendices to this Chapter. Shri Lazarus, Member
Editorial and General Manager of the Samacpar . and
Dr. Raj K. Nigam, Executive Member of the Samachar
Board used to attend coordination meetings which
were held by Shri S. M. H. Burney in the Ministry
of Information and Broadcasting during the election
campaign.
6.77 Shri K. N. Prasad, Additional Secretary, stated
that while he was not aware of any interference by
the Ministry in the editorial freedom of Samachar,
there would be instances of Santachar receiving
instructions in to news meant for censorship
and Press toelease. Shri Lazarus denied that he had
ever given instructions to play up Government and
Party news and to keep coverage Of
opposition parties on a low key. He only issued
instructions that sensitive copies should he referred
to him and he never regarded Samachar as a mere
channel for carrying out Government versions of
stories. However, certain instances of tailoring of
stories to suit the Government's needs, for example,
t he story regarding Shri Jagjivan Ram's resignation
from the Congress, were put to Shri Lazarus and he
amrn1cd that this had been done at. instance Of
Shri Shukla.
3. Harassment of Journalists
6.78 To enable the Pr!?ss to cover the activities
of the Government accreditation to Government of
India is granted to correspondentS and news camera-
men based in Delhi. The accreditation was. governed
by two sets of rules for correspondents and camera-
men respectively. In addition the decision of the
Central Press Accreditation Committee was treated as
a convention and was followed in deciding individual
cases. In February, 1976, the Government
reconstituted the accreditation committee and the
number of Government nominees was raised from
two to three in a total committee of 11.
6. 79 During the period. following declaration of
Emergency, accreditation of. a nutnber of correspon-.
dents was terminated and a bulk of tnese 'decisions
was taken as a part of a review which was endorsed
by the Central Press Accreditation Committee at its
meeting held in February, 1976. At this meeting
number of deletions were suggested by the then
Principal Information Officer, Dr. A. R. Baji, on the
basis of a decision of the Government.
6.80 According to Shri K. N. Prasad in February
1976, Stiri Shukla gave cyclostyJed list of Accredited
Correspondents and he was ordered that a record
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check should be made of those who were associated
with banned organisations. Shri Prasad got this done
from the Intelligence Bureau and then returned the
list .to the Minister. A note on the file by
Prasad shows, that the list was by
Minister and he approved of
guidelines to be adopted for granting.
Thirty-three correspondents were
the reasons for some of them were the adverse
verification reports and for others their anti-establish-
ment stances. All these were approved by the
Minister. Shri Shukla admitted that h.e had given
instructions for getting the verification of the
antecedents of correspondents done.
6.81 Shri Prasad also 11d'tnittcd to having character
and antecedents of a number of journalists verified
by the Intelligence Bureau. He said that this was
done at the fostance of the. Ministel', but did not
know the reasons wi1y it. was
6.82 As regards foreign coriespondents, a number
of restrictions were placed o.n them to make them
conform to Government policy; for instance, they
had to si,gn a bond agreeing to abide by the
precensorship laws.. According to . Shri. Shukla, .
Minister for Information and .Broadcasting, 1t was the
Government policy that the I.aw should apply equally
.to . both foreign correspondents as well as Indian
and if t.hey wanted to operate in India,
they,, had to conform to t.he laws of the land.
6.83 The Indian representatives of foreign journals
were subjected to great harassment, .for example,
Shri Ramanujam, who was representative of the
'Newsweek' magazine of USA had his telephone cut,
his accommodation taken back and his accreditation
withdrawn in spite of the fact . that 'Newsweek'
expressly told . the Government of India that
Shri Ramaoujam was not for any
participation in any ' Newsweek' reporting from India
since censorship was imposed.
C. FUNCTIONING OF GOVERNi'vlENT MEDTA
UNITS
6.84 The Government Media Units had two main .
functions during the Emergency. They were at once
a source of patronage and also they were used for
building up the ima.ge of a political party and a few
of its leaders.
I.' DAVP
6.85 The iDA VP was used on a large scale for
giving advertisement support to various souvenirs
brought out by the Congress Party. Opposit.ion
parties were denied any such patronage. Thus,
during the year 1974-75, 1975-76 and 1976-77, the
Congress. Party and its various wings received
advertisement support from the DA VP alone worth
Rs. 3,868, Rs. 52,615 and Rs. 80,325, respectively;
whereas the 9pposition parties during the same period
received Rs. 1,403, Rs. I, 700 and Rs. nil, respectively.
6.86 Not merely was the Congress Party given
extensive advertising support but there was an instanc.e
when rates per page for souvenirs were increased aftet
they had been agreed upon and the printed.
Thus the rat.e ; fixed for advertisements for the
brought out on the occasion of the. All
Congress Committee meeting at Delhi was originally
Rs. 1,000 per page. Twenty advertisements were
released at'this rate on the orders of Shri V. C. Shukla
on May 18, 1976. On June 15, 1976, the Delhi
Pradesh Congress Committee submitted a bill for
Rs. 40,000 at Rs. 2,000 per page. C. K. Sharma,
Private Secretary to Shri V. C: instructed the
DA VP to make the {>ayment at the enhanced rates.
He said that he had instructed the DA VP to make the
payment after he had the Minister.
6.87 Shukla, the then Minister for Information
and Broadcasting, stated that, regarding giving of
advertisements for souvenirs, the Government had
strictly followed the guidelines laid down to the best
of its ability and that he had nothing more to add,
2. All India Radio
6.88 According lo Shri S. C. Bhatt, Director, News
Services Division, All India Radio, rigid constraints
were imposed on All India Radio after the imposition
of Emergency. He said that thr9ughout the
period it was the Government's
play up the speeches of Smt. Indira Gandhi and her
son, Shri Sanjay Gandhi. He stated that written arrd -
unwritten instructions were frequently ieceived by AU
India Radio from the Minister himself and sometimes
also directly from the Prime Minister's Secretariat.
In. alL S.mt. Gandhi'.s .were carrie.cl
c;lD J 1f QQ_new..s
programmes arig__ ShrLSJtnjay __ OandhL.figui;ed 24. tim_es_
'Besides, All India Radio
gave_., wide publicity to . Shri San jay Gandhi ana
t2.2 itemswete .. carried on Shri Sanjay Gandhi in the
mamri-ews--bulTetins broadcas..t. January 1, -
and January 18, 1977. A few illustrative
cxampTesof ffietype of coverage on Shri Sanjay
Gandhi are given below :-
(i) "Earlier on his arrival in Bhopal,
Shri Gandhi was given a rousing welcome
by a large crowd of men, women and
children".
[A.LR. News: February 26, 1976-2100 Brs.J.
(ii) "Mr. Sanjay Gandhi was taken in a big
procession through the streets of Guntur to
fae police parade ground".
(A.I.R. News: March 21, 1976-0810 Hrs.].
(iii) "Hundreds of thousands oi lined up .
the roads in Tirupati and T1rumalai to
cheer Mr. Gandhi".
[A.I.R. News: March 21, 1976-2100 Hrs.).
(iv) "The Youth Congress leader Mr. Sanjay
.Gandhi had discussions with officials in
1
Ag.ra today on plans to beautify and clean
fae historic city", "earlier on arrival ,in Agra
Mr. Gandhi was given an affectionate
welcome by a big crowd".
[A.LR. News: May 2, 1976-2100
(v) "On at Bombay Airport Mr. Sanjay
Gandhi was accorded a big welcome. The
Maharashtra Chief Minister, .Mr. S. B.
Cha van, his Cabinet colleagues ......... and
many Congress and Youth Congress leaders
received him at the Airport. He was
profusely garlanded on behalf of several
organisations. Several organisations gave a
grand . welcome to Mr. Sanjay Gandhi all
along the route from the Airport."
[A.LR. News : October 29, 1976-2100 Hrs.].
(vi) "The AIR correspondent savs that lakhs of
people turned up in Kamal to greet Mr.
Sanjay Gandhi. The town a festive
look".
[A.LR. News: January 11, 1977-2100 Hrs.].
6.89 Shri Bhatt also said that the AIR news was
used for broadcasting inspired news denigrating Con-
gress leaders who had fallen out of favour with the
ruling coter.ie. Thus, a series of stories condemnatory
of Smt. Nandini Satpatby were broadcast just before
President's Rule w,as imposed in Orissa.
6,90 The slant against the opposition was so obvious
:that in December, 1976, AIR bullerins devoted 2207
fines to the spokesmen of the Congress Party as against
34 Jin.es to the opposition. In December, 1974, the
same .figures were 571 and 522 respectively. Accord-
ing t o Shri Shukla, most of the spokesmen of the Con-
gress Party were Ministers and hence there was nothing
wrong in publicising their ,views on matters concerning
the Governtnent.
. 6.91 According to Shri Bhatt, during the electio"i1
.campaign, the All India Radio distorted news in
favour of the Government a:nd the ratio o'f news
betwt:<::n the Government and the opposition parties
\YCnt up to as much as 8.5 : 1. The Minister was
frequently giving iri.structions regarding the type and
scope of the news which should be carried. The All
India Radio News was subjected to approval by the
Secre.tary Shr.i Burney and the Additional Secretary
Shri Prasad before it was put out on the air.
6.92 This came about because Smt. Indira Gandhi
had sent for Shri Bur"ney and complained to him
that the Ministry of Information and :Broadcasting was
not managing the press well and that AIR/TV . were
also not functio"ning properly. After receiving these
comments of the Prime Minister , Shri Burney directed
that news bulletins would be cleared by him or Shri
K. N. Prasad.
6.93 According to Shri Shukla it _was at his instance
that instructi.oris were issued to Shri Burney that moni-
toring. of AIR news should be done by him or by
Shri Prasad as Shri Shukla had received some com-
plaints that the coverage. in news bulletins of AIR was
noi appropriate to Government.
S/39 HA/77--7
45
6.94 Shukla also admitted to having talked
to the Director of All India Radio to gi.ve him
the story regard111g the alleged attack on Shri Sanjay
Gandhi at Amethi on March 14-15, 1977. Shri
Shukla also issued directions t'hat of impor-
tant C:ongress leaders _to the attack on Shri Sanjay
Gandhi should be obtamcd a1id broadcast the follow-
ing morning. Shri Shukla further stated that he bad
instructed his staff members at Raipur to indicate to
that che news regarding the alleged attack on
Sh.n Purshotam Lal Kaushik, the rival candidate at
Raipur may not be reported as other instances of poll
violence were not '
6.95 One hundred forty new posts part-time
Correspondents had been created in the AIR in March
1976. As a rule in the past, part-time
were appointed from amongst those already servincr in
a newspaper and the appointment was made by "'the
Director News Services. For fillii1g up these new posts
the and critt:ria for appcintment were changed
on Apml 23, 1976. The appointment was vested in a
committee consisting of Joint Secretary (Information)
and Joint Secretary (Broadcasting) of the Ministry
and the informal approval of the Minister had to be
obtained before the appointments could be made.
6.96 After the change of cdter.ia three part-.time
9orrespondents were appointed to AIR, all of whOm
.were office bearers of the Congress party. Shri Shukla
said that he did appoint these people :ls part-time
Correspondents even though his staff had told him
abcmt their political backgrounds, but he said that it
would be unwarranted to say that these _people were
appointed because they were members of the
Party. He said that as a matter of policy the bar ori
members of political parties being app6inted was re-
mcved, and if a person was otherwise suitable he
could be appointed. He, however, could not recall
any i_nstancc of a person bel<>nging to another political
party beinl? appointed to this post.
6.97 Shri G. L. Vohra had been wo(king as All
India Radio's part-time Correspondent at Raipur from
October 1, 1963. According to Shri S. C. Bhatt, his
performance was generally considered satisfactory and
his contract was renewed from time to time. On March
19, 1977, the Special Assistant to the Minister for
Inf9rmation and Broadcasting, Shri V. S. Tr.ipathi
spoke to Shri Bhatt and tofd him that the Minister
had desired that Shri Vohra's services should be termi-
nated forthwith. Shri Bhatt also said that Shri Tripathi
had told him that Shri Vohra 'had covered Smt. Viiaya-
l<J.kshami Pandit's electio'n speech at Raipur on March
17 for the ATR regional bulletin. Shri Bhatt told Shri
Tripathi that AIR's story was based on Samac:iar
and not on Shri Vohra's coverage but Shn Tnpath1
said that the Minister's orders had to be carried out.
Shri Tdpathi confirmed that he had received instruction
from the Minister for terminating Shri Vohra's services
he said that he did not know why Shri Vohra's
services were terminated and he in fact said that it
would be wrong to that his seryiees were terrni-
nated because he had covered the speech of
Vijayalakshmi Pandit. He further that he had
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spoken ab.out the coverage of . . Smt .. Vijayalakshmi
Pandit because he was told by the Private Secretary
to Minister, who was at Raipur that he should obtain
the details from Shri Bhatt about the coverage given to
Smt. Vijayalakshmi Pandit's public meeting at Raipur .
He said that he had ascertained from the Minister as to
why Shri Vohra's services had been dispensed with
and Minister had told him that it had been decided to
appoint a full-time Correspondent at Raipur instead of
a part-time Corresl?ondent.
6.98 Shri V. C. Shukla said that after the electibns
were announced and he had gone .to Raipur various
reports and. complaints started coming in and he had
mentioned these to Shri Tripathi, who knew Shri
Vohra. Further a decision had already been taken that
Raipur All India Radio should have a staff correspon-
dent rather than a stringer and this decision had been
taken much before the elections. Therefore, when
.. during the. election campaign reports regarding Shri
Vohra had reached him, he had decided that no action
should be taken to remove Shri Vohra during the elec-
tion lest it may be misunderstood that it was
done for some reasons connected with elections. There-
fore, he told $hri Tripathi after the polling in his consti-
tuency (Raipur) to instruct Shri Bhatt to remove Shri
VQhra as All India Radio's part-time Correspondent
at Raipur. Shri Shukla further stated that thoul$h the
Ja,nata Party Government had restored Shri Vohra and
ga:ve to him the post of part-time Correspondent,' soon
after this they again removed him and posted, in accor-
dance with the decision taken earlier, a staff correspon-
dent of All India Radio at Raipur and that Shri Vohra
may have been reinstated at the most for a month or
two. He said that S'hri Vohra's coverage of Smt.
Vjjayalakshmi Pandit's meeting was quite fair and no
exception could _be taken to that coverage.
3. Doordarslzan
6.99 The coverage of Shri Sanjay Gandhi by Door-
d!J:r.shan went up after December, 1975. In all, a sm11
: Qf .Rs. 8,33,055 was incurred during the period of
Emergency on coverage of Shri Sanjay Gandhi. Shd
STiukla justified the extraordinary publicity given to
Shri Sanjay Gandhi on the ground that at that time
even private media were paying considerable attention
to the . doings of Shri San jay Gandhi.
6.100 As regards the coverage of the Prime Minis-
ter, both over AIR and Doordarshan, Shri Shtikla
stated that it was the Iiorma1 function of the Govern-
ment Medfa Departments to' cover the activities of the
Government and its leader, the Prime Minister.
4. Films Division
6.101 A number of films were produced by the
Films Division to project the image of Shri Saniay .
Gandhi not onlv as a Y11uth leader but as a in
his own . The decision to nroduce was
taken at meetings presided over bv Shri S. M. H. Burney
at which was present Shri Navin Chawla, Secretary to
the Lt. Governor of Delhi.

6.102 According to Shri. K. K. Kapil, Joint Chief
Producer of FJ,Jms . Division, it was Shri . S. M. H.
Burney who had directed him to produce these films so
that the persona1ity of Shii Sanjay Gandhi could be
brought out in an obLique and subtle manner and that
he shoul<:l get in touch with Shri Navin Chawla; who
was nominated as consultant for these films.
6.103 Accord;ng to Shri Navin Chawla, he had: play-
ed a role in production of these films at the instance
of the Lt. Governor of Delhi, who had spoken to
Shri S. M. H. B.urney for preparation of publicity: films
for the Delhi Administration. Shri Burney had then
formed a working group for this matter. Shri Chawla
participated in this as a representative of the Lt. Gov-
ernor. Shri Chawla said that he used to see the
films and clear them at the instance of Shri Burney.
He denied that he ever directed anyone to project Shri
Sanjay Gandhi as the main personality _in these films
or as a . hero of the projects depicted in these films. On
a suggestion from Shri Kapil fa a casual conversation
he had agreed with him that films on Shri Sanj<1y
Gandhi should be preserved and they should not . be
wasted. He recollected that this matter was taken up
fo the group meeting.
5. of Field Publicity and the Song and
Drama Division.
6.104 The other Government media i.e. Directorate
of Field Publicity, Song and Drama Division, were also
asked to project the image of Smt. Gandhi and the
Congress pany as testified to by Dr. A. R. Baji, Direc-
tor of F.ield Publicity and Shri Birendra Nan)yan,
Director, Song and Drama Division. Dr. Baji, who was
earlier the Pr:ncipal Information Officer had also been
directed by Shri Shukla to contact the Editor of the
' Statesman' newspaper and asked him to give. full
publicity both photowise and newswise to Smt. Gandhi
and to Shri D. K. ]Jarooah, the t11en Congress }>resi-
dent. According to Shri Shukla, it was the normal fanc-
tion of the Priricipal Information Officer to project the
image of the leader of the Government and he did nnt
see anythi:Ug wrong in it.
6. Multi-media Campaigns
6.105 A nurber of multi-media campaigns were
launched during the Emergency to coincide with im-
portant milestones in Smt. Gandhi's career. The most
important were the "Decade of Achievement" and "The
Year of Fulfilment". The former: was organised when
Smt. Gandhi had completed ten years in power as
Prime M'nister. Various Government media depart-
ments were given detailed instructions on how this was
to be publicised. Thus, Directorate of Field Publicity
was to screen extensively the seven films that it h:id
on the Prime Minister, and also to obtain in suffiCient
numbers the of Smt. Gandhi's broadcast of
November 11, 1975 for extensive publicity in semi-
urban and rural areas. The Films Division also prepar-
ed a film, "A Day with Prime Minister". The t\JR
was directed to select 200 quotatinns from Smt.
Gan<lhi's !lOeeches and to put out five to ten of these
quotations daily on the a.ir. The Publications Division
was directed to boost the sales of Smt. Gandhi's books
and to publish informative and interesting sketches
with photograph of Snit. Gandhi in varioUs journals
and periodicals.
6;106 According to Shri K. N. Prasad the emphasis
was not to justify the emergency but on the gains of
the emergency. He also said that he was ne_ver in _touch
with the All India Congress Ceimmittee or Shri Y ash pal
Kapoor on this subject, but that at one of the meetings
held in Shri Dharam Vir Sinha, Deputy Minister's
house . on the 'Decade of Achievement' he found Shri
Yashpal Kapoor there who gave out a complete pro-
gramme of what the Congress Party was doing. Shri
Prasad took it and kept it on the file but he never got
in touch with Shri Kapoor or anybcdy in the Congress
Party to coordinate or do anythiilg.
6.107 Shri Shukla denied that these campaigns were
organiSed to build up the image of Smt. Gandhi. He
said that these were organised to build up and project
the image of the Government and those who were fun-
cti<'.ining within the Goverfunent and nothing in this
was done "to project the image or throw up the :
image of anybbdy whO was not within the
Government" .
6.108 During the election campaign another multi-
media publicity campaign was launched entitled
Campaign 1977, the Content Strategy". According to
Dr. N; Bhaskar Rao, a consultant to the Mjnistry of
Information and Broadcasting, on the evening of Jan-
'.lary 19, 1977, Shri Hit Prakash, Joint Secretary in
theMipistry of Information and Broadcasting had asked
him to prepare a note on the basis of instructions that
be .had received . from the Secretary on the electiun
campaign. Dr. Bhaskar Rao met Shri S. M. H. Burney
the next day, i.e., January 20, 1977. Shri Burney in
addition to what S.hri Hit Prakash had suggested wan-
ted Dr. Bhaskar Rao to identify the areas where the
theh Opposition parties were having a strong . holds
and to suggr!st methods for antensifying campaign in
those areas. Shri Burney himself identified some
and he also wanted that soine of the achievements and
qualities of Smt. fadira Gandhi should_ be highlighted
in his campaign. He further directed Dr. Rao to pre-
pare media-wise activities for this campaign. Dr. Rao
accordingly compiled a note and gave copies of it to
Shri Burney, Shri K. N. Prasad and Shti Hit Prakash
on Ja.nuary 21, 1977. The original of the note -was
identified by Dr. Rao during the Commission's hearings.
This contaipe<l a list of 30 specific themes associated
with Smt. and the Emergency which would
47
appeal easily to the people and publicised the achieve-
ments of the Government. He also gave suggestions to
counteract likely/potential arguJ'nents of the Opp<>si-
tion some of which could be forestalled while others
could be countered as and when they became issues.
He had also admitted to have identified towns and cities
where the Opposition was strong but suggested that
this could be further narrowed down by lbcal field
units after consulting the other wings of the Govern-
ment and party leadership. He had also suggested that
responsible persons in the Ministry shoutd monitor
the various kinds of campaign issues raised by the
Opposition so that corrective measures could be
taken.
6.109 Dr. Bhaskar Rao has further stated that a few
d<(ys after this note was prepared Shri Hit Prakash met
hiin in Shri Gopalakrisbnan, Director (IP), I&B Minis-
try's room and told him that the earlier note needed
revision. Shri Hit Prakash told him that as the note
had been specifically mentioned in the minutes aad
could not be withdrawn altogether another had to be
substituted for it. Subsequently, Or. Rao prepared an-
other note. Dr. Rao admitted to the Corilmission that
he had realised that there was a complete identity
established in his report between the Government and
the party but he had done it under the impression that
he had been merely asked to give some points for the
meeting and that this note would not be distributed.
6.110 Shri Gopalakr.ishnan told the Commission that
when he read Dr. Rab's note he felt that it was not a
proper note to be issued and he had gone to Sbri Hit
Prakash and told him that the note should be with-
drawn. Shri Jiit Prakash had agreed with him and aftel"
a word with Shri Burney, Dr. Rao was asked to revise
his'orjginal note. Shri Gopalakrishnan agreed that even
in the amended note there were certain facts like the
percentage of polling by the various parties which was
not. strictly warranted in an official document.
,6.111 Shri Burney denied that he had ever, asked
Dr. Rao to prepare any paper and he was not aware if
anybody in the Ministry had asked him to do so. He
said that this paper was prepared voluntarily by Dr.
Rao. He said that Dr. Rao was a Consultant to the
Ministry and that he used to prepare a number of
such papers evaluating the performance of Govem-
J'nent Media Units and he thought that Dr. Rao had
prepared a paper for reorienting publicity in the wake
of the Chief Ministers' Conference where it was decided
that 40 plus 5 point Programme should be hie:hlightcd.
Shri Burney admitted that the paper was under circula-
tion for a day or two before it was substituted.
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CHAPTER Vll
1. The . case regarding the re\'ersion of Shri Justice
Aggarwal of Delhi High Court :
" 7.1 Shri R. N. Aggarwal, who belonged . to the
Higher .Judicial Service of the Union Territory of
Delhi, was promoted in 1972 to the High Court of
Delhi and was appointed as an Additional Judge of
the High Court. The term of Shri R. N. Aggarwal
was extended for another two years from 197 4, also .;
as an Additional Judge. On August 13, 1975, there .
occurred a vacancy on tbe .retirement of Shri J usticc
Jagjit Singh in the High eourt. Normally, Shri R. N.
Aggarwal was t.he seniormost Additional Judge,
would have been appointed to fill that post which
had fa llen vacant . The Chief Justice of the High
Court recommended Shri R. N. Aggan>;al fer appoint-
i:nent as a permanent Judge. On September 22, 1975,
he recommended that Shri Aggarwal was an "asset to
the High Court''. The Deputy Secretary prepared a
note on September 27, 1975, which was submitted to
t he Secretary, Department of Justice and the approval
of the Chief Justice of Iridia to the appointment of
Shri R. N. Aggarwal as a permanent Judge was ob-
tained on October 27, 1975. On January 3, 1976, the
of Law, Justice and Company Affai rs directed
that the appointment of Shri Aggarwal as <1 permanent
Judge be processed. That implied approval to
the recommendation.
7.2 Shri Aggarwal was not appointed a petmanent
Judge of the High Court and he had to a:; .a
Sessions Judge.
Shri S. N. Mathur, Director, Intelligence Bureau, re-
ported on January 12, 1976 that Shri R. N. Aggarwal
. bdonged to Judicial Service of Delhi and was closely
associated with R.S.S. in 1950s and early 1960s; It
was also mentioned in the report that he used to
attend Shakhas of R.S.S., in the Naya Bazar area of
Delhi and that he had stopped taking part in the
activities of the R.S.S., in the early 1960s after the
Government issued orders prohibiting the Government
servants from participatJng in such activities. It would
also appear from the report of .the Intelligence Bureau
that there were also other grounds raised against Shri
Aggarwal, but no further details were set out . 'Thcrc-
a(ter on January 14, 1976, Shri Khurana recorded
that the report received from Ll}e Director of Intelli-
gence Bureau may be taken into in mak-
ing. the recommendation to the ' Prim.e Minister. Shri
Gokhale prepared a note which is on the file but
undated, challenging the correctness of the association
of Shri Aggarwal with the R.S.S., for the r.elated period
as Shri Aggarwal was not in fact in Delhi in the
1950s and early 1960s and further stated nothiQ.g
was brought to his notice with regard to any specific
matter which may render him unfit to be appointed.
1.5 Shri Gokhale has stated before the Commission
that the allegations against Shri Aggarwal "were not
correct and I did it on the basis of facts which I had
meanwhile collected on my c wn, and had seen that.
this report was not correct and what was alleged there
was not substantiated. Even the general allegations
. abc1ut Mr. Just.ice Aggarwal. are ...... not.. .... correct.
. .. .. That is the note which I prepared and I had hand-
ed it over personally to the Prime Minister. According
7.3 What transpired between the period Janua rv
3
, to me it was demonstrably wrong and then she said, "I
1976 l
r J will ask the Home Ministry", and 2erhaps she did.
. . an<. . anuary 12, 1976 is not evident from the I cJo not know whom she asked. nT saw her after
fil e. Jt appears lhat .on November 3, 1975, Shri P. P.
N I t. " t
1
J) . . . . snmf\ dnys 113nin .. .. .. She siiid t.hnt she was told that
ayyar, a . om 0ecre ary u1 t. tl! . ot J usticc the ... report. was correct . The report which I
had sent a note-stating that Shri J mtice R. N. ' . contested was correct and she had given me to under-
was one of the Judges on the "MISA Bench" of the stanri that it was not intc11clcd lo confirm N.lr. Justice
Delhi High Court. On this note Shri Khurana, Aggarwal. Now after t.his happened I made a note
tary, Department. of Justice, noted on November 4
1975 that the matter should be discussed as to when' .. .... " . Apparently, thereafter the papers were sub-
Judgment in Shri Kuldip Nal'ar's .case was announ- rriitted to the Prime Minister by Shri Gokhale, the
J Law Minister, on February 20, 1976 not
ced.. On December 4, 1975, the Joint Secretary noted ing confirmation/extension to Justice R. N. Aggarwal
that the judgment was delivered "on 15-7-75". He and this was approved by Smt. Indira Gandhi on
also noted that the Law Minister wanted. the case to
be processed early and the fil e to be put up to him. February
24

1976

The file was, accordingly, re-submitted. Later, it
appears that there was some discussion between Shri
Gokhale, the; Law Minister , and the Secretary, Depart-
me nt of Justice, when pursuant to t'hat it was recorded
on January 3, 1976 the Law Minister desi red
that the appointment of Shri R. N. Aggarwal as a
permanent Jtt<.lge be processed.
7.4 Thereafter at the request of Shri. IQ.1Urana,
Secretary, Department of Justice, inquiries were made
by the Intelligence Bureau concerning Shri Aggarwal.
S/39 HA/77,.-8
7.6 Sbri Aggarwal in not being confirmed had to
revert as a Sessions Judge in the Delhi Administration.
7.7 In the course of his examination, the Director
of the Intelligence Bureau has there were
some further inquiries made and some information was
collected. Whether that information was submitted to
the Prime Minister or the Government does not appear
from the record. But Shri Gokhale has stated that
ht had prepared a note which was submitted t o the
49
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Prime Minister recommending the a..Ppointment of Shri
Aggarwal; but that the Prime Mmister declined to
accept the recommendation.
7.8 On a review of the files 0f the Government and
considered in the light of the evidence, it appears that
Shri R. N. Aggarwal, who was regarded by tl.1e Cnief
Justice as an ass.et to the High. Court and who had
functioned as a Judge for nearly tour yeats, asked
to revert to his original position as a Sessions Judge.
7 .9 Smt. Gandhi has, in the reply which she gave
on the 21st of November, 1977, refused request to
assist the Commission in the proceedings and stated
that the Prime Minister was the . of the
Constitution" and was entitled t.o over-rule the recom-
mendation of a Cabinet colleague. She also stated
that it was in the light of .this Constitutional position
that her decision not to confirm Shri Justice R. N.
Aggarwal may be considerea by the Commission. She
further stated that she had no personal acquaintance
with Shri R. N. Aggarwal nor had she any private
information and that her decision was based upon an
assessment of the facts placed before her and the
conflicting recommendations that she had received
from the Ministers of Law and Home Affairs. , She
invited the Commission to examine official sources to
determine tllat no consideration whatsoever other than
those of public interest, adjudged in the circumstances,
were involved in her decision. But. she declined to
file a statement on oath pursuant to a notice under
rnle 5(2)(a), as required in terms of rule 5(3).
7.10 When a summons was issued to her under sec-
tion 8B of the Commissions of Inquiry Act, she appear-
ed before the Commission but declined to take oath
and give evidence on the plea that she was not legally
and Constitutiona1ly bound to give such evidence. When
requested by the Commission to give evidence, she
categorica1Iy declined to do so.
7.11 The question, which this Commission has been
called upon to decide is whether the action of the
former Prime Minister Smt Indira Gandhi amounted
to an abuse of authority or misuse of power. As
submitted by her in her letter dated 21st of November,
1977, had no personal acquaintance with Shri
Aggarwal and she had no private information and that
no consideration other than those of public interest
adjudged in the circumstances, were involved in her
decision. There was the evidence of the report o( the
Chief Justice that Snri Aggarwal was an asset to the
High Court of Delhi. He had functioned as a Judge
for four years in the High Court and not-hing adverse
had come to the notice of anybody during that time.
The Minister of Law and Justice had apparently agreed
with t-.ie recommendation of the Judge of the Hioh
Court and the Chief Justice of India that Shri Aggarwal
should be appointed to the office of a permanent Judge
of the High Court.
7.12 It is tha.t adequ!'ltc reasons it may be
open to. the Pnme Mm1ster notwithstanding the recom-
mendations so made. to overrule the recommendations
and decline to confirm appointment as recommend-
ed. But this case d-iscloses two disturbing facts :-
(a) (i) that sometime in the month of Auoust
1975, a petition for a writ of Habeas
50
was filed by one Shri Kuldip Nayar, a Jour-
nalist. The petitiort was heard by the De!rJ
High Court by a Bench consisting of S.
Rangarajan and R. N. Aggarwal, JJ and
the orders of the Government were set asid.e
and the attitude of the Government's decision
was criticised, especially the manner in which
the orders . were passed.
(ii) Soon thereafter Shri Justice S. Ran-
garajan was transferred from the Delhi High
Court and Shri Justice R. N. Aggarwal was
not confirmed in a clear vacancy, which had
occurred in the High Court and to wh.ich, in
the normal course, he would have been
appointed.
(Iii) It appears that in Kuldip Nayar's
case after the hearing was concluded, the
Government finding its position in regard to
the merits of the orders passed against Shri
Kuldip Nayar unsustainable, intimated to
the court that the orders . against Shri
Kuldip Nayar were withdrawit and he had
been ordered to be released. It was, there-
fore, expected by the Government that since
"the Government have already revoked the
detention order of the detenue and as such
decision in the Habeas Corpus had become
infructuous" . However, the court proceed-
ed to deliver its judgment and criticised the
conduct of the Government. There can be
no doubt t-hat the procedure followed bv the
Bench was correct. Because a party "to a
dispute, after arguing on ti.le merits of the
case, when faced with the prospect of an
adverse decision, would not be permitted to
amend the order or to withdraw the order
to forestatl the decision by seeking to with-
draw the action taken by it or the orders
made by it.
b) (i) Though inquiries must have been made
witti regard to the antcceden!s of Shri Justice .
R. N. Aggarwal when he was to be appoint-
ed as Judge of the Hi!!h Court and when he
had continued as Additional Judge for
about four years, nothing adverse is availahle
on record of the Government. Thereafter
f<?r the mere reason which is not very clearly
disclosed on the file, when a recommendation
for the appointment of Shri Justice Aggarwal
as a permanent Judge was received from the
Court Delhi, Shri P. P. Nayyar,
Jomt Secretary m the Department of Justice
invited the attent.ion of the superior .
that Shri Justice R. N. Aggarwal was one of
the two Judges in the "MISA Bench" of the
High Court of Delhi, apparently intending
to invi.te the. he had partici-
pat_ed , m del1venng the 1udgment in Kuldip
Nayar s case. The information was obtained
and was placed on t he file.
(ii) In the meantime, it appears that
a report was obtained from Director of
Intelligence Bureau witl1 regard to Shri
Aggarwal. The circumstances in which this
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. .' report appears to have been received, arc
not clearly apparent from the record. The
Law. Minister, before whoin the papers were
placed, challenged the correctness 0 ilie
association of Shri Aggarwal with the R.S.S.,
which was reported, on the ground that' the
report could not be true because Shri Aggar-
wal was not even in Delhi at the time
he was alleged to have-- participated in the
activities of R.S.S. in Delhi.
(iii) The file is silent for .. the period
from January 14, to February 20, 1976. It
appears, however, fron1 the circurt1stanccs
mentioned earlier that the papers had been
submitted to the Prime Minister and Shri
Gokhale had discussed the case with her.
Tlie circumstances do tend to create an iin-
pression that because of the participation :of
Shri Aggarwal in the hearing and disposal
of a case filed by Shri Kuldip Nayar, the
Government was put in an awkward posi-
tion and that may have been responsible to
some extent in re-considering whether Shri
Aggarwal sMuld be continued as a Judge 'of
the High .. -Cour-t- --'Thereafter, a report was
: . obtained frorn the lntclligcncc Bureau and
t he papers were submitted to ti1e Ptiiij.e
Minister. The Prime Minister, Smt. Indira
Gandhi , though has asserted her
letter dated November 21, 1977 that she
had no private information . and she acted
on conflicting reports of the Home Minis-
try and the Law Min_istry, has not chosen
to file a stateli1ent on oath, as required by
;.. rule 5 ( 3) and has declined to come into
the witness box and / to take an oath apd
_, give evidence of her version, when requested
by the Commission and M.s declined -also
to give evidence iti pursu.ance . of the suni-
nions issued to her und..f section 8B of
Act. - It would, therefore, be open to tne
Commission to draw an adverse inference
against her.
(iv) On t.he one side there was the evi
dence of the persons who had the opportu-
nity to note the quality of his work and be
acquainted with him in the discharge of
duties, which was all favourable to him. On
the other, there were the orders of the Prime
Minister, whiCh, she says, she passed declin-
ing to confirm Shri Aggarwal in ti1e post of
a Permanent Judge in e:cercise of her autho
rity to overrule the recommendation made
by the Law Minister. That in an appropriate
case the Prime Minister may have to exer-
cise such an authority is not a matter which
is relevant to this case.
(v) The question falling for considera-
tion is whether the action of the former Prime
Minister amounted to abuse of authol'ity and
: n1isuse of power. On that part of the case
there is no evidence whatever led by the
Prime Minister in support of her versfon
that it was a bona fide act done by her . as
.51
a Prime Minister in the interest of the admi-
nistration; . whereas . the evidence disclosed
on the file and the oral evidence are clearly
indicative of the fact that there were no
circumstances which wculd have come in the
way of Shri Aggarwal being appointed as a
Permanent Judge of the High Court.
7 .13 It may be noticed that in the hierarchy of
courts the position of a Judge of a High Court is
superior to that. of a Sessions Court; but the importance
of the office of a Sessions Judge cannot on that account
be minimised . . The Sessions Judge, who also occupies
the ' office of the District Judge, exercises unlimited
jurisdiction in civil matters and is competent t.o impose
all sentences including a sentence even of sub-
ject, of -course, to confirmatioh by the High Court.
.If for any reason Shri Aggarwal was thought by Smt.
Gandhi to be unfit to hold rhe office of a Judge of
the High Court that would have been equally a ground
on which would have bl!en unlit to hold the high
. office of a Sessiorts Judge in th\! UniQn Territory of
Delhi. But Shri Aggarwal was reverted to the office
of the Sessions J udgc aild he cotitirtu..:d to hold diat
office till he was again elevated to the High Court later
in the year 1977. is a ground, which cleady
indic:ites that the order . passed against Shri Aggarwal
was, prima facie, in the nature of an order of punish-
inent for participating in the hearing in Kuldip Nayar's
case and passing art order which tarnished the image
of the Government in the public eye. .
.......... ,.
7.14 The Commission is, therefore, of the view that
a case of misuse of authority and abuse of power is
disclosed in this case, . against Smt. Gandhi.
2. Refusal by Smt. fodira Gandhi to extend the term
of Shri Justice U. R. lalit of the Bombay High
Court.
7 .. 15 Shri U. R. Lalit, an Addition.al .Judge of the
High Court of Bombay, was recommended for exten-
sion of the tenure of his office by the 01ief Justice
of the High Court of Bombay. The recommendation
was accepted by the Chief .Minister of Maharashtra,
by the Governor of Maharashlra, by the G1ief Justice
of India and by the Minister for Law, Justice and
Company Affairs of the Government of India. '' There
were no adverse reports against Shri U. R. Lalit. The
then Prime Minister, Smt. Indira Gandhi d.eclined to
agree to Shri .U. R. La!it cont_inuing as a Jpdge of the
High Court of Bombay. Acc9rdingly, he ceased to
be a Judge on January 17, 1976, ,
7.16 Shri H. R. Gokhalc, Minister of Law, affirmed
that t.here were no grounds for not extending the term
of Shri Lalit. Shri S. L. Khurana, the Secretary,
Department of Justice, was also examined. From the
file relating to Shri Lalit it appears that . the Prime
Minister's Secretariat returned ti1e file without any
endorsement. Shri Khorana then made a note that
it was not intended to give any further extension to
Shri Lalit; and, therefore, further steps should be .taken
to examine the position immediately.
7-.17 A slip, whicli was a P,art of the file, has s{nce
been discovered from the Prime Minister's Secretariat
by the offi.cers of the Commis;;ion... A n.ote is made
.. by an official of the P .M.'s Secret.an at statmg :
''Sometime ago a proposal of the Departmept of
Justice to continue Justice Lalit as an Addi-
tional Judge of the Bombay High Court was
submitted to P.M. ' Justice Lalit.'s pr..isent
term is expiring on 16-l-7 6 and the fresh
appointment has to be made before that.
Law Minister has been -reminding me' about
this case. He told me. that he spoken
to P.M. also about this case a few d11ys ago."
The note is signed by Shri B. N. Tandon, th'e then
Joint Secretary to the Prime Minister and is dated
12th of January, 1976.
7.18 It bears a note made in the hand-writing ot
the Prime Minister :
"I do not of giving him anorl.1er term."
The word 'not' has been underlined. It is dated Janu-
ary 12, 1976. On that Shri Tandon made a note:
"Secretary may kindly see for information."
.and thereafter the file wa$ returned to the Minister
with an int.imation that the
"P.M. has &poken to him.".
The .tile. was, accordingly, returned.
7.19 T{1e Commission bad requested Smt. Gandhi
to appear before the Commission and assist the Com:.
mission by giving information relating to the . non-
appointment of Shri Lalit. . Through her letter dated
November 21, 1977, Smt. Indira Gandhi stated that
the Prime Minister is competint to overrule the recom-
mendations of a Cabinet colleague and t.hat in the
light of . this Constitutional position, the decision was
taken not to confirm Shri Justice Lalit. She further
stated that she had no personal acquaintance with the
Judge concerned nor any private information and her
decision was made upon an assessment of facts placed
before her and the confl.icting recommendations that
she had received from the Ministers of L;1w and Home
Affairs. She invited the Commission to examine the
official records and determine that no considerations
whatever, other tl1an of public interest, adjudged in
the circumstances were involved. in her decisions.
7.20 The reply filed by Smt Gandhi was not as
required by rule 5(3) of the Commissions of Inquiry
Rules. She has, however, clearly stated in her reply,
which is not on oath, that she had 110 private infor-
matfon except what was contained in the file. But the
fil.e contained no material which was adverse to Shri .
La lit.
7.21 Suri Gokhale, who gave his testimony on oath,
has also stated that there was nothing against Shri
Lalit and that it was only because Smt. Gandhi declin-
ed to confirm his appointment for another term. as
Additional Judge that he was constrained not to
'continue Shri Lalit in office.
S2
7 .22 A notice was issued to S1nt. Indira Gandhi
under rule 5 (2) (a) of the Commission& of Jnquiry
Rules and she was asked to file her statement. In
view of the disclosures made by Shri Gokhale, :a stim-
mons was also issued to her under Section 8Il o( the
Commissions of Inquiry Act. She remained pre:sent
in the Commission Hall but declined to take oath and
give evidence when requested by the Commission .to
go into the witness box to enable the Commission to
ascertain what her version was. In the circums;tances,
the Commission would be justitkd in drawing adverse
inference having regard to all the materials :placed
before the Commission that this was a clear c;ase of
abuse of authority and that Smt. Gandhi arbitrarily
declined to extend the term of Shri U. R. Lalit as an
Additional Judge of the Bombay High Coilrti 1t may
be pointed out that Shri U; R. Lalit was an Adyocate
practising in the Bombay High Court before his ap:
pointm.ent as an Additional Judge. Normally when. a
p,erson is appointed as an Additional Judge !.r,qm the
1far it is expected that he would be confirmed as a
Judge when a permanent vacancy arises. It' appears
further that. there had been hardly any case in :which
si1ch confirmation had not been made. There: were,
no materials at all on which it could even b'e faintly
suggested that Shri U. R. Lalit, who had functioned
as a Judge for two years, was unfit to contitj.ue .in
office as a Judge of the High Court.
7.23 Shri Justice K. N. Wanchoo had made a note
on the 29th of June, 1967 :-
"When a Member of the Bar is appointed Addi-
tional Judge it must, b<1 with a view to ,make
him permanent in due course. If that is not
possible, additional judgeship should' not be
offered t-0 a tnembei: of the Bar. I
therefore, that an undertaking sh01,ild be
taken from members of the Bar they
will accept a permanent judgeship .when
offered to them in due course ......... .... "
Ref.usal to extend the term of Shri U. R. Lalit. : as a
Judge of the High Court, therefore, amounted to: sub-
version of well-established conventions and practkes
and amounted to abuse of authority and m'isuse of
power by Smt. Indira Gandhi.
3. Deviation from established procedure and in:egu-
larities in the appointment of Shri K. R. Puri 11s
Governor of the Reserve Bank of India.
7.24 In May, 1975, Shri N. C. Sen Gupta : was
appointed as Governor of the Reserve Bank of lndia
for a peri<;>d of three months with effect from May 19,
1975." His term was, therefore, to end on August 18
1975. This short term appointment was made to
the Government time to identify a suitable persofi for
the post.
7.25 Shri C. Subramaniam, the then Finance Minis-
ter, sent a Top Secret note to Smt. IndiraGandhi then
Minister, on 29-7-1975 discussing the
s1onal. background and qualifications essential in. an
who is to be C(nsidercd for app,1intme1}t to
th1.s P??t. He sa.id !n. this note that in assessing:: the
su1tab1hty of an rnd1v1dual 0ne has to keep in niind
--.... ... .
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the fonctions which the Governor has to discharge
and the leadership that he has to provide to the Reserve
Bank. which -is the Central Bank of the country. He
then discussed briefly functions and
of the Reserve Bank and its Head, the Governoc. Tak;
ing into account the particularly difficult inonetary
situatio11 then, he said t.hat he would expect the Reserve
Bank: to be the main guide for the Government in the
formt,ilation of their monetary and policies.
-- 7.26 ln the light of these exacting
Shri Subramaniam went on to discuss the qualifications
of distinguisJ.led Economist<> and/ or Econ9mic
Administrators like Dr. I. G. Patel, Mr. Narayana
Prasad, Dr. S. R. Sen and Shti M. G. Kaul, as possible
incumbents for appointment to. the post of Governor.
He also referred to Shri K. R. Puri, the then Chairman
of . the Life Insurance Corporation of India. This is
what. :he , said in regard to Shri Puri :-
"P.M. has in this conneclion mentioned the name
of Shri K. R. Puri, Chairman, L.I.C., I have
examined his suitability of the post very
carefully. He is an ordinary graduate and
as such lacks an adequate academic back-
ground. He has been in the field 9f fosurai1ce
throughout his caree1 and therefore his ex-
perience has been in a very limited of
specialisation, unconnected with banking and
_ finance."
Shri Subramaniam concluded this Top Secret note by
saying that Smt. Gandhi, if she so wishes, may send
for :ijim for discussion so that an early decision may
iaken. The original of this note . could not be
ttaed .in the Prime Minister's office.
7.2:7' '.Eventually on August 18_, 1975,
mania'm recorded the following order on
file . o'i. the then Department of Banking :
Shri
the relevant
. "Shri K. R. Puri, now Chairman UC, may be
appoimed as Governor of Reserve Bank for
. a period of one year. This has the con-
currence of the Prime Minister. 1n view of
the fact Shri Sen Gupta's term expires
. tomorrow orders of appointment may issue
and A.C.C., kept informed.
Shri Puri may tuke charge tomorrow."
The A.C.C. referred to above is the Appoil'itments
Com1uittee of .the Cabinet. It should be noted at this
stage :that w1der the relevant Rules, framed for tile
Transaction of the Business of the Government, the
ai)jJOintment of the Governor of 'Reserve Bank
requi1"ed the approval of the Appointments Committee
of the Cabinet.
53
7.28 Pursuant to .S'hri --Subramaniam's order,
extracted above, a notification was issued on the
18'th :August, 1975 appointing Shri K. R. Puri as
Governor of the Reserve Bank for a term of one year
with effect from the close of business on the August
19, 1975.
7.29 Thereafter, on Allgmt 20, 1975, Shri G.
Balasubramanian. the then Addi. i11 the
Department of Banking wrote to Shri U. C. Agarwal,
Establishment Otlicer in ihe Department of Personnel
and Administrative who also functions as
Secretary to the Appointjnents Committee of the
Cabinet rilentioning, imer alia, that it has been decided
with approval of the Prime Minister to appoint Shri
K. R. Puri as the Governor of the Reserve Bank of
India for a period of one year with effect from the
close of business on August 19, 1975, that the relevant
Government notification has already been issued bn
the August 18, 1975 and that Shri Aggarwal may
consider "recording the information suitably in the
office of the Appointments Committee of the Cabinet.'\
7.30 The Appointments Cornmittee of the Cabinet
consisted at the relevant time of the Prime Minister,
the Home Minister and the Minister concerned in the
Ministry or the Department whose proposal is being
considered by. the Committee. There is no evidence
in the relevant papers to indicate that the Home
Minister was consulted at any stage before Shri K. R.
Puri's appointment as Governor of the Reserve
Bank.
7 .31 lt is seen from the evidence of Shri C. Sub-
ramaniam before the Commission that there . was
Ll1sagreement in to t\1e choice of a successor 10
Shri S. Jagannathan as Governor of the Reserve Bank
and it is because of this disagreement that the interim
appointment of Shri Sen Gupta was made. Shri Sub-
ramaniam has stated further tl1at even at that stage
Shri Puri's name had been mentioned to him and that
he could not agree with that suggestion. In re.sponse
to the query as to whether he considered Shri 'Puri fit
to hold the post of such vast importance to the economy
of the country, Shri Subramaniam stated that "taking
into account the vast fields which the Reserve Bank
of India has to deal with, l thought Puri was not the
person who would fit iii this job."
7.32 It would be relevant at this stage to refer to
a letter dated February 27, 1978 from Shri K. R. Puri
addressed to the Secretary to the Commission,. enclos-
ing thereto a note of the same date and copies of
certain Degree, Certificates, etc. In the note dated
February 2, 1978 Shri Puri has referred to .newspaper
reports of the .evidence tendered before the Commis-
sion by Shri C. Subramaniam. Evidence was tendered
by him in this case on October l, 1977 and presum-
ably reports in this r egard must have appeared iu
newspapers on the next day, namely, October 2, 1977.
Shri Puri has said, inter alia, in this note as under :-
" Deposing before the Commission, Mr. C.
Subramaniam has given the main reason for
not considering me fit for appointment as
Governor of the Reserve Bank of India that
I was an ordinary graduate and as such lack-
ed adequate background."
7 .33 Shri Subramaniam's statement that Shri Puri
is an ordinary graduate and as such lacks an adequate
academic background was not made in the testimony
before the Commission but made a note submitted
by him to the then Prime Minister on July 27, 1
presumably after verifying the records in this regard
which should have been available to the Finance
. I
Minister. lt is seen from the papers since
by Shri Puri that he had obtained the Degree of
Bachelol' of Arts with Honours iu English in the exa-
mination held by the UniErSity of Punjab in the year
1939 and that he was pfaced in the Second Div'ision,
It is further seen that he had also oqtained the Degr.ee
of the Bachelor of Laws of the same University in the
ox,iamination held in May, 1943 and that he was placed
in the Second Division. Another certificate inc,licates
that he was successful in the House Examination of
the F.E.L. Class held in December 1941 and that he
stood First in the order of merit in the subject of
Mer'Cantile Law. It is not clear how Shri Subrama"
niam's statement that Shri K. R. Puri is an ordinary
graduate can b<: considered as erroneous, especially
as the then Finance Minister was mentioning it in the
context ot the specfalised knowledge and e)'penence::
rcq4ired for the post of the Governor of the Reserve
Bank, which he had briefly indicated in the earlier part
of the same note.
7.34 As regards Shri C. Subramaniam's testimony
before the Commission, insofar as it related to Shri
Pt,ui's academic background and his competence i.n
his capacity as Chairman of L.l.C. , l cannot do better
than quote verbatim from the relevant portion of the
. ;-
;"Witness : As a matter of fact, Mr. Purl was
initially in my Ministty and he was l,10lding
the post of' Chairman and Managing Directo1
of the L.LC. As an officer in the L.I.C.,
no doubt, he was quite competent'. But
taking into account the vast fields which
the Reserve Bank of India. has to deal with,
I thought Puri was not the person who would
fit in to this job.
. Chairman : Did he have any academic qualifica-
tions which might have otherwise made him
suitable?
Witness : I had rnade it quite clear in my memo
to the Prime Minister that apart from his
academic qualifications, which was secondaI'y,
in regard to his experience, particularly, in
the national sphere .... . .... .
Chairman : You mentioned t11at he was an
ordinary graduate.
Witness : That is true. Even an ordinary graduate
may acquil'e experience later on. Both the
things have to be taken into consideration,
his initial academic qualifications. and later
on, whether he had acquired any expertise
in these fields. After all, this is the starting
point.
Chairman : I am coming to that.
Witness : Taking botl:i the things into
tion, I was definitely of the opinion that
Mr. Puri may not be fit for the job."
7.35 To the Commission'$ query as to why he still
fell in line with the suggestion that Shri PuT'i should be
appointed, Shri Subramaniam replied that this matter
-----------------
54
had gone on dragging for. and that_ he
had quite a number of d1scuss1ons with the .
Minister and also with the Secretary to .the ' Pnme
Minister. ln response !he query. as. to whether it
means that the Prime M1mster was ms1stent that Mr.
Puri alone should be appointed, Shri Subramaniam
replied-
"She said that Mr. K. R. Puri would be competent
for the job and that he should be appoii;ited. "
Shri Subramaniam also stated that the then ' Prime
Minister had told him that as Chairman of the Life
Insurance Corporation of India, Shri .Puri had .to deal
with "investments and various other things." ''But in
my view that was not quite relevant because th.e Reserve
Bank of India deals with completely different pt;oblems
of financial policy." ln conclusion, Shri Subri,1maniam
stated as under :
''Ml'. Puri's appointment was restricted to one
year. Generally it is not done. It ,is tive
year period. I think it was because. of my
objection so that his performance may be
watched. So the period was restricted' to
. one year."
7.36 Shri Puri's observation in his note : dated
February 27, 1978, referred to above, that on . the
expiry of his initial one year term
1
he was re-appomted
in January 197 6 for a further penod of two years does
not affect in any manner Shri Subramaniam' s statement
regarding his initi al objections to the proposal; .:
7. 37 Smt. Gandhi has not fil ed any stateme1i1 :in this
case as was required to be done u1rder Rule 5(2) (a)
of the Commission of Inquiry (Central) Rules: 1972,
she had responded to lhe summons u/s 8B of Act.
But she refused to take the oath arid tender evidence.
from the facts on record, and the evidence of Shn
C. Subramaniam in this case, it appears that the normal
and established p1'Qcedure in regard to the appointment
of the Governor of the Reserve Bank of India was
not followed and that the then Finance Ministr Sbri
C. Subramaniam was virtually compelled to fall in
line with the suggestion made by the then Prime
Minister Snit. Gandhi. This was yet another C:ase of
subversion of established administrative procedure and
convention by Smt. Indira Gandhi as P.M. :
4. Subversion of lawful processes. and well-established
conventions and deviation from administrative pro-
cedures and practices in the appointment of Shri
T. R. Varadachary as Chairman of the Staie:Bank
of India.
7:38 On June 24, 1976, the then Minister of
Revenue and Banking Shri Pranab Mukherjee se:nt the
following secret note to the then Prime Minister :.
"Subject Shri R. K. Talwar, Chairman, State
Bank of India-Term of ai.:point-
ment.
"Shri R. K. Talwar was appointed Chafrma11,
State Bank of Tndia with effect from March
l, 1969 for a term of 5 years. The' term
was extended by a further period of 3 : years
and comes to an end on February 48, .1977.
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It has been the Government's intention that
his term of appointment should be curtailed
and .he be asked to vacate office. As the
State Bank of India Act provided only for
removal- -from- office which could be only as
a punishment, the State Bank of lndia Act
has been recen.tly ainended to provide for
the Government, if it so chooses, to termi-
n.ate the term by giving 3 months' notice or
3 months' salary and allowances in lieu
thereof_ Accordingly, it is proposed to termi-
in terms of Sub-siection (IA) of section
20 of the Act, the tertn of appointment of
Shri Talwat as at the close of business on
30th June, 1976 and pay him 3 months'
salary and aJJowances in lieu of uotice.
"In the vacancy caused, it is proposed that Shri
T. R. Varadachary at present Managing
Director, State Bank of India, be appointed
as Chairman with effect from 1st July, 1976
till February 28, 1977, i.e. till such time as
he would have served as Managing Director
of State Bank of Ilidia.
Sd/- Pranab Mukherjee,
Minister of Revenue and Banking
Pr.ime Minister of India
U.6. 3SO(S)/MRB/76 dated 24-6-1.976"
. 7.39 The Secretary to the Prime Minister endorsed
on the note on July 21, 1976, that "PM has approved",
and returned it to Shri Pranab Mukherjee. Thereupon,
Shri Pranab Mukherjee recorded a note order on
July 24, 1976 to the effect that the order (appointing
$hri T. R. Varadachary as Chairman of the State Ba1ik
of ' lnpia) may be effective from August 4. 1976.
P.ufsu;rnt to this order, the Department of Banking
issued a notification dated July 30, 1976 appointing
Shri Varadachary as the Chairman of the State Bank
for the period commencin_g from August 4, 1976 and
ending with February 28, 1977. A copy of this
fication was also endorsed to the Establishment Officer
iii the Deoartment of Personnel and Administrative
Reforms; Government of India.
7.40 Under the relevant Rules framed for the
Transaction of the Business of the Government elf
lndfa, -the ilppointment of Chairman of the State Bank
of In<;:lia requires the approval of the Appaintments
Committee Of the Cabinet. Sub-clause (a) of suh-
sectibll (1) of secti6n 19 of the State Bank of Ttldia
Act, 19 5 5, reads as tinder :-
. '
1
19(1) The Ceritral Board shall consist of tl1e
following, namely
(a) a Chairman and a Vice-Chairman to be
aopointed by the Central Government in
consultation with the Reserve Bank."
Clause (b) of section 2 of the Act defines the Central
Board to mean the Central Board of Directors of the
State Bank and Clause (bb) defines the Chairman as
meaning the Chairman of the Central Board. It would
be seen from the above that t.he Chairman of 61e State
. Bank of India is to be aooointed by the Central Govern-
ment in consultation with the Reserve Bank of. India.
SS
7.41 In November, 1975, the then Chairman of the
State Bank of India, Shri R. K. Talwar, had forwarded
a note to Shri Varadachary asking for his comments
on certain matters indicative of improprieties on the
part of Shri Varadachary. The then Chairman had
also sought to bring to the notiee of the Central Board
of the State Bank for discussion at its meeting which
was to be held on March 30, 1976, a memorandum
dealing with the alleged improprieties on Shri Varada-
chary's part Jt is. however, seen that as desired by
Shri N. C. Sen Gupta, the then Secretary, Department
of Banking and Shri P. K. Mukherjee, the then Minister
for Revenue and Banking, Shri M. C. Balasubra-
rnaniam, the then Additional Secretary in the Depart-
ment of Banking, who. was also a Member of the
Central Board of the State Bank met Shri Talwar
and advised him not to bring the subject for discussion
befoI'e the Board. Accordingly, the matter was not
brought before the Board at its meeting on March 30,
1976. There is, however, nothing on record to show
that the Government examined the matter further and
satisfied itself, before appointing Shri Varadachary as
the Chairman of the State Bank, that he was not guilty
of any impropriety as alleged by the then Chairman.
7.42 As already mentioned above, a copy of the
notification issued by the Department of Banking on
July 30, 1976 appointing Shri Varadachary as Chair-
man of the State Bank of India .with effoct from. August
4, 1976, was endorsed to the Officer in
the Department of Personnel and Administrative
Reforms. This appears to be the only communication
to the Secretariat of the Appointments Committee of
the Cabinet in regard to this appointment, which
requi red the approval of the Committee.
7.43 1n the course of his evidence before the Com-
mission Shri N. C. Sen Gupta, fonticr Secretary,
Department of Banking had indicated that the intro-
duction of Sub-section (TA) in section 20 of the State
Bank of India Act, t 955, by means of an amendment
thereto in 1976 was to enable the Governmeqt to place
the State lhnk on the same footing as other.
Banks and that the amendment was not mtqnded to
enable the Government to ' relieve Shri R. K. .. Talwar
of his office as Chairman of the State Bank of India.
, T4owevcr, the first of Shri Pranab Mukher-
jee's note dated June 24, l 976, referred to above, does
not appear to bear out Shri Sen Gupta's testimony.
It is also seen from a note recorded bv Shri J. C. Roy,
an officer in the Department of Banking on Auirust 4,
1976, that according to the order of the then Minister
for Revenue and Banking. Shri R K. Ta1war was to
be served with a notice for termination of his term pf
office under section 20<IA) of the State Bank of. India
Act and further that the notice and orocedure for
serving it had been finalised in consultation with. tlie.
M!nistry of Law.
7.44 Ree.arding consultation with the Reserve Bank
Shri Sen Guota stated before the Commission that lie
had consulted the Governor of the Reserve Bank orally
and in this connection he referTect t<l a letter written bv
him to the Goverpor on Jutv 30. 1976. The Qnly
letter that Shri Sen Guota had written to the Governor
of the Reserve Bank in this regard on July 30, 1976
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was to the effect that on a reques( made by Shri R. K.
Talwar he had been sanctioned leave with effect from
August 4, 1976 to February 28, 1977. There is no
mentio.11"in that letter of the name of the successor to
be appoi.rited to Shri R. Talwar, much less an
indication of any consultation in this regard. The
only reference in that letter to a successor to Shri R. K.
. Talwar is as under :
"We are separately issuing Government notifica-
tion regarding appointment of his successor."
When faced with this, Shri Sen Gupta, in the course
of his evidence before the Commission, said "this was
really an ex-post-facto consultation." Needless tc>
adq, the consultation statutorily required could certainly
not be ex-post-facto, apart from the fact that there is
no evidence even of the so-called ex-post-facto
consultation.
7.45 Shri Pranab Mukherjee who bad been requested
. to assist the Commission at the preliminary stage of
its inquiry had done so, but he indicated that before
answering any questions pl.it to him he would like to
make a submission in regard to the propriety of doing
so. He thereafter said that the oath of office taken by
him at the time of enterfog upon office precludes him
from answering those questions which involve matters
which came under his consideration or within his
knowledge as a Minister. However, the Commission
gave the ruling that by giving any information before
it, Shri Mukherjee would not be violating either the
provisions of the Official SecI'ets Act or the oatp of
office taken by him. Thereafter, Shri Mukherjee pro-
. ceeded to answer the queries put to him by the Com-
mission. When specifically asked whether the Reserve
Bank was consulted as required by section 19 of the
State Bank of India Act, Shri Mukherjee stated as
under:-
"Sil', when the trouble \of this nature started, I kept
the Reserve Bank Governor informed and
I had some discussions. But I do not know
whether any such discussion is reported
anywhere in the files. But I had some dis-
cussions with him because he was also involv-
. ed in the wh<;>le process. But I cannot tell
exactly whether before processing the
appointment .his fo1mal consultation was
obtained or not."
In this case again it was Shri Mukherjee's claim that
the consultation was oral, that he spoke not on one
occasion but on more than one occasion and further
that he did not recollect whether any record of si.1ch
consultation was maintained. Nor could he indicate
the date of such consultation. Jn response to the Com-
mission's inquiry as to whether he thought that he
should either have recorded a note regarding the con-
sultation with the Reserve Bank or at least have asked
. someone else in his office like the Secretary to make
a note that the Governor of the Reserve Bank had
been consulted and that he is of the opinion that Shri
Varadachary should be app9inted as Chairman of the'
State Bank, Shri Mukherjee s!!id :-
"Sir, in fact, when I went through the file to
refresh my memory there was no such
noting."
56
The Commission has been shown a number of
in&tances where in view of urgency of the matter or
for some other reason consultation with the Reserve
Bank either when statutorily required or otherwise
bas been oral but in all $uch instances t?.1e : fact of
consultation is seen to have been recorded contem-
poraneously and invariably backed up by
correspondence indicating such oral
,
In the light of the consistent practice and in the
light of the nature of the oral testimony of Shri Se.n
Gupta and Shri Mukherjee, the Commission i$ of the
view that there was no consultation with the Reserve
Hank in this case, as was in terms ot
sub-clause (a) of sub-section (I) of section 19 of. the
State Bank of India, 1955.
7.46 On April 30, 1977, Shri T. R. Varn.(fachary
wrote a letter to the Prime Minister expressing his
shock and surprise at being asked to hand over charge
as Chairman of the State Bank of India with effect
from that day. He enclosed thereto a note. dated
April 21, 1977, which he had sent to the ,t hen
Secretary, Department of Revenue and Banking . . The
note, according to him, clarified his position in ,regard
to various unfounded allegatkins made against him
in sections of the press .and otherwise by word of
mouth. Certain extracts cf the note had beeu
furnished in the summary presented be.fore the
Commission. It would appear therefrom that as per
his own statement, Shri Varadachary met
Shri Sanjay Gandhi at the instance of Shri Pranab.
Mukherjee "to lodge" his "claim" for appointmen(as
Chairman of the State Bank of India and that he had
several otl1er meetings with Shri Sanjay Gandh.i .most
of them on the suggestion or direction of Shri Pn:nab
Mukherjee, during which he had consulted or take.n
instructjons from Shri Sanjay Gandhi on various
matters regarding the functioning of the State Bank
including staff matters.
7.4 7 In response to detailed inquiries bv the
Commission in this regard Shd Pranab
denied that he had eyer asked Shri Varadachary to
see Shri Sanjay Gandhi in relation to .his appointment
or other matters relating to the State Bank althounh
he did confirm the meeting which Shri
had with the Chairman of the Delhi Small Industries
Development Corporation at Shri Mukherjee's
residence. He also broadly confirmed Shri Varada:
charay's statements in relation to most of the matters
c>..cept in as far as they related to references to
Shri Sanjay Gandhi. He was specifically asked
by the as to whether he could furnish any
reason why Shn Varadachary should, in a letter
addressed t o the present Prime Mi11ister, make: these
statements on the eve of his ove:r charge to
another officer, and whether Shri Mukherjee ' Could
suggest any reason why Shri Varadachary should
state therein somet.hing which is not true. All that
Shri Mukheriee had to say was "Sir, I cannot say
anything on it."
7.48 The Commission, however, sees no rcas.on to
disbelieve the as set out in Shri Varadachary's
note dated Apnl 21 , 1977, enclosed to his letter dated
April 30, 1977, to the Prime Minister arn1ough .it was
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57
not possible to examine Shri Varadachary as the
.Commission was informed that he was abroad and,
therefore, not .readily available.
7.49 Although Shri Pranab . Mukherjee assisted the.
Comntission at. the preliminary stage of its fact finding
inquiry, he did not file any stateruent in this case as
was required to be done under Rule 5(2) (a) of the
Commissions of Inquiry (Centnii) Rules, 1972. He
bad responded to the summon-,; under section 8B . of
the Commissions of Inquiry Act,, 1952. But he
refused tO take oath and tender evidence. However,
from :the facts on record and the evidence analvscd
above, it appears that the :1ornrnl established procclllirc
in regard to the appointni.cnt of t he Chairman of
Slate Bank of India was uot. followed in this case and
further that it was not in accordance with the
provisions of the State Ba!1k of India Act, 1955, which
made, consultation with the Reserve Bank of India a ..
condit.ion precedent to the appointment of the
Chairman by the Cenli'al Government. The
Commission is of the view that considerations other
than strictly professional and totally extraneous have ..
unfortunately been allowed to operate in arriving at
the decision to appoint Shri Varadachary. Shri Pranab
Mukherjee violated established administrative
conventions and ptocedurcs and misused his position
in the appointment of Shri Varadachary.
5. DeV,iatio11 from established procedure and irregulari.
ties' in the appointment of Shni T. R. Tuli as
.Chairman. and Man aging . Director of Pun jab '
Naiional Bank.
J.50 Shri P. L. Tandort's term as Chairman an<l
Managing Director of the Punjab National Bank was
due to expire on 31-7-75. Under sub-clause (a) of
O ausc' 3, read with sub-clause ( l) ar Clause 8; of the
Banks (Ma nagement and Mi sccllan:!ous
Provisions) Scheme, I 970, appointment of his
. was to be made by the Central Government nfter
co11S1Jll111ioh with the Reserve Dank of lndia. Acc:ord-
ingiy. o.n May. 12, 1975 thc-l'11en Secretary, Depanm::nt
o( Banking wrot e to !Ii<: Governor Han!.:,
infer- a(ia, seeking the Res:!r-ve Bank's views .in this
regard.' ln his reply dated Mny 14, 1975, the Governor
of the: Bank wrote that the Reserve B:ink
lhiiiks thut Shri Tandun's recommcnc.Jatian in favour of
Shri 0.. P. Gupta is very appropriate. He added that
in fm:t the B:rnk would recommend lhat Shri 0. P.
Gupta bt:: considered very seriously for the succession
straightaway. The then Finance Minister agreGd . with .
R eserve Bank's recommendation that Shri P. Gupta
who was then the G:!rieral Manager of the
Punjab National Bank should b'! appo:nted as its Chafr-
man and Director. Accordingly; with the
approval of the Finance Minister, the Department of
Banking submitted a note to the Appointmens Com-
mittee of the Cab:net on the May 13, 1975 seeking the
Appointments Committee's approval to Mr. 0 . P.
Gupta' s appo:ntment. The proposal as approv?:d by
the Finance Minister was submitted by. Shri U. C.
AKgarwal Establishment Officer, on June 4, 1975, fol'
approval to the other two Memb! rs. of the Apooin-
ments Committee, namely the Home Minister and the

! ' .
. Minister, through tl:ie Cabinet Secretary. The
. Cabinet Secretary forwarded it to the .Home Minister
on June 5, 1975. Shri K. Brahtnananda Reddy, t11e then
Home Minister, approved it on June 7, 1975 and
passed on the pape1;s to the Priine M!nister. This pro-
posal lay pendmg with the Prime Minister for a long
time and no decision was conveyed to the then Depart-
ment of Banking until after the Prime Minister approv-
ed the appointment of Shti T. R. Tuli to the same pust
in the following circumstances.
7.51. On July 15, 1975, Shri M. G. Balasubrn-,
manian, the then Addi. Se<.:retary in the Department of
Banking, recorded the followi'ng minute on the relevant
ti:c of the Department of Banking :
"The file has been returned from F.M's. office for
submission of revised proposals. I have
spoken t o Gonrnor, RBL
H recorded the following further mfoute on July 21,
J975:
"I cnqu:re<l of the Governor, when I met hiin in
Calcutta 011 19th July, 1975, about RBI's
report to us regarding Government's proposal
.to appoint Mr. T. R. Tuli <Ye New Bank of
India as Chairman. Punjab National Bank
about which I had spoken to him over the
phcne on 15th July, 1975. Governor told me
that he was under t'he impression that I
. y.iyld .. be wr.iti_ng to. him about this to enable
RBI to send a reply. When I told him that
my undetstandi'n!! was different, he promised
to write to me after he reaches Bombay on
21st evening. -
"The Chairman and Ma'rtaging Director is to be
appointed by Government after consultation
with the RBI and RBI has
please put up the file for F.M.'s orders today
itself, whether he should send a note
to /\CC or issue the ordets and inform the
E.O. lo h c1) the ACC appri sed."
7 .52 Accordingly, a note was recorded on the same
day, namely July 21, 1975, by Shri D. M. Sukthankar,
Director in the D:parlmcnt .of Bunking, the
Finance Minister's order, inter aMa, as to a
notification Shri T. R. Tuli !IS Chairman
and Managing Director of the Punjab National Bank
may be jssued straightaway and the
Officer requested to keep t'he Appointments Committee
of the Cabinet apprised or whether a revised note tnav
be sent to the Apoointments Committee of the Cabinet
. for obtaining their approval to the revised prop.,sal.
Shri Sukthankar's note starts by saying that the G"v-
ernor. Reserve Bank of Ind;a, has been consulted bv
the Additional Secretary regarding the Gover'nment's
decision to apooint Shri T. R. Tuli. Chairman.
Bank of India Ltd. (a Bank in the Private Sector) 11s
Chairman and of t'he Puniab
National Bank with effect from August 1 1975. Si!!ni-
ficantlv it does not state what the views of the Res<!rve
Bank in this regard,were. The reason for this omission
will be presently.
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7.53 Shr.i Subramaniam minuted on July 22, 1975
that Shri Tuli IlJay be appointed straightaway . for a
period o'f one year and sought the then Prime Minister's
approval to this. The then Prime Minister approved the
proposal on July 24, 1975 and accordingly Shri Tuh
was appointed as Chairman and Managing Director of
the Punjab National Bank in terms of notification dated
July 31, 1975 issued in this regard. Thereafter, on
August 5, 1975, Shri M. G. Balasubrari:l.aniam wrote a
letter to Shri U. C. Agarwal, the Establishment Officer
referring to the earlier note of the then Department
of Banking regarding the appointment of a new incum-
bent to the post of Chairman a'nd Managing Director
of t'he Punjab National Bank and informed him that it
has since been decided with the approval of the Prime
to appoint Shri T. R. Tuli to that post for a
period of one year with effect from August 1, 1975.
The letter also i'nd.icated that the Home Minister
also been kept suitably informed by the Finance Minis-
ter's Office and went on to suggest that the Establish-
ment Officer may perhaps consider recording th-:: infor-
mation suitably in the office . of the Appointments
Committee o'f the Cabinet.
7.54 The Reserve Bank's views on the Government's
propo$al to appoint Shri T. R. Tuli of the New Bank
of India about which Shri M. G. Balasubramaniam had
spoken over the telephone to the then Governor Qf
Reserve Bank on July 15, 1975 were contained in the
Governor's letter dated July 22, 1975 (i.e. one day
after Shri Sukthankar's note referred to at paragraph
3 above was submitted to the Finance Minister) and
was received in the Department of Banking on the
July 23, 1975. This letter gives the unmistakable im-
that the }leserve Bank was not very enthusias-
. tic about the Government's proposal in this regard. In
his testimony the Commission, Shri C. Subr-a-
maniam stated that he would "take the Reserve Bank's
report as neutral."
7.55 In response to a query as to why the proposal
for the appointment of Shri 0. P. Gupta which the
Finance Minister had made on the recommendation of
the Reserve Bank was not carri,ed out, Shri Subra-
maniam stated that while this was being processed, the
. Pr.ime Minister mentioned that Shri Tuli's name should
also be considered for the post. He also indicated in the
course of liis testimo'ny that he did not know Shri Tuli
before. and comparatively speaking, Punjab National
Bank was very much bigger than the New Bank of
India. When asked whether the Prime Minister
suggested that Shri Tuli should be . appointed Shri
Subramaniam, replied "yes". '
7.56 As indicated in paragraph 4 above,
Smt. al?proved the to appoint Shd
T. R. Tuh straightaway as Chatrman and Manaoing
Director of the Punjab National Bank on July 24, J 975.
on the very next namely. July 25, 1975,
the Ongmal proposal submitted to the Prime Minister
early in June 1975 to appoint Shri 0. P. Gupta to this
post was returned by Shri Ramachandran Joint Secre-
tary to the Prime Minister with the following remark :
"It was learnt that Finance Minister was not
proceeding with this proposal. He had sepa-
rately submitted alternative proposals t.o PM.
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. ...
PM has approved Finance Miciste(s proposal
to appoint Shri T. R. Tuli, at present Chair-
man of New Bank of India Ltd., as C.hairman
and MD of PNB for a period of one year
w.c.f. August 1, 1975. Finru1ce Ministry will
be sending a formal note to E.O.: giving
details."
This remark, to say the least, is intriguing in _the light
of Shri C. Subramaniam's evidence that Shri Tuli's
name was suggested by none other than the then
Pr.!me Mi'nister herself.
7.57 Smi. Gandhi has not filed any.statement iil this
case. as was required to be done under Rule '5(2)(a)
of the .. Commiss.:On of Inquiry (Central) Rufos, 1972.
She had responded to the summons under section 8B
of the Commissions of Inquiry Act, 1952, _but 'had
refused to take oath and declined to give . e.vidence.
However, it .is clear from the foregoing facts; that in
this case, the Finance Minister had agreed with the
recommendatioFl of the Reserve Bank that Shri 0. P.
Gupta may be appointed as Chairman and. Managing
Director of the Punjab National Bank. The proposal in
this regard, approved by the Finance Minister : a'rid the
Home Minister, had been submitted to Smt. Gandhi in
her capacity as one of the members of the Appoint-
ments Committee of the Cabinet. When this proposal
was pending with her for her concurrence, she sugges-
ted the name of Shri T. R. Tuli for the post and within
a very short time thereafter Shri Tuli's appointment to
this post was approved. It is also seen that befqre
arriving at this decision to appoint the Chairman of
a comparatively small bank in the Private Sector to the
senior-most position in one of the biggest Public Sector
banks in the country, no effort was made to 9onsider
the suitability for this post, of senior Managers within
the public sector ba'nking--s-ystem-itself as had been
done in several other instances.
7.58 No reason whatsoever has been given for
departing frqm the recommendation of the Reserve .
Bank which has intimate knowledge of the worki ng
of all Banks in the country and is, therefore, in a
position to ju_dge the comparative merits of the:varicus
officers for top positions in the Banking Seetor. This
b.ecomes even more striking since Reserve Bank's. re-
commendation had been found acceptable :by t.he
Finance Miiiister himself and by the Home Minister.
If the then Prime Minister had any serious difference
of opinion in this regard, there ,is no reason why the
matter could not have been discussed by her with the
two. other members of the Appo:ntments Committee
or in the alternative whv she could not record her viewi:
in this r.egard on the file submitted to her. instead of
virtually Shri Subramaniam to submit :a revis-
ed proposal in favour of a person of her choice.
7.59. Under the circumstances, the Commissfon is of
the view that this is yet another instance where the
.then Finance Minister Shd C. Subramaniam was vir-
tually compelled to fall in line with the suggestion
made by the then Prime Minister, Smt. Gandhi and
that such compuls!on to abuse of authority
by the former Pr.1me Mm1ster. It clearly resulted in
subversion of well-established co11ventions. :
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6. Devia!ion from the established procedure for the
selectwn of officers for top level executive post in
Public Sector Undertakings, in the case of Lt. Gen.
J;. T. Satarawala, as Chairman-cum-Managing
J?trector, India Tourisni and Deve!Opment Corpora-
tion
7.60 At tire request of the Minister for Tourism
and: Civil Aviation, the Public Enterprises Selection
Board (PESB) recommended suitable names for the
post . of Chairman-cum-Managing Director of India
fo_u.mm Devdopment Corporation. According to Reso-
.lut1011 No, 5(1)/74 of Bureau qf Public Enterprises
dated August 30, 1974, it was the responsibility of the
to select persons for posts, such as, full-time
Chairil1an, i;>art-time Cha.irman and Managing Director
for all J.>ublic Sector Corporations.
7.61 The P.E.S.B. met on July 26, 1976 and sug-
gested the_ o.f Sh. Ajit Singh and Shri B. S. Das,
after cons1denng eight names amongst whom was the
- name of Lt. Gen. J . T. Satarawala. The recommenda-
tion of the P.E.S.B. was communicated to the Ministry
on 9, 1976 and a letter requesting-the
Officer to obtam the approval of the
Appomtments Committee was prepared by the Ministry.
The Secretary Shri N. K. Mukarjee agreed to the pro-
posal marked the to the Minister for approval.
The Mm1ster then desired that the Minister for State
may also see the proposal. The Minister for State Shri
Surindra Pal Singh suggested the name of Lt. Gen. J. 't.
He stated that in his opinion to bring about
a at t'he topmost level in I.T.D.C., would be
detnmental to the national interest. The Minister for
State comn1ented that Lt. Gen. Satarawala was keeping
good physical condition and was quite capable of
shoulderi"lig the onerous and heavy responsibility oi'
lo:oking after the I.T.D.C.
') .62 Shri Raj Bahadur agreed with tfie Minister of
State, and, accordingly, a revised draft was prepared.
It was dealt with by the Joint Secretary in the absence
of tl)e Secretary. The Appointments Committee of the
Cahinet approved the nppointment of i.t. Gen. Satarn-
who had been considereci hy the P.E.S.B. but not
for appointment. .
7.63 It is not a healthy convention to post an officer
as a lop level executive, who was earlier intervicwr.d
and not considered suitable hy Public Enterprises
Selection Board to the exclusion uf 1 l1e in the
pnncl r ecommended by the P.E.S.B. cout:;e
wuuld have been to request the P.E.S.B.; to suggest a
fresh panel of names. By ignoring the recommenda-
tions of a statutory body, the Government was making
a.n inroad into the relevance and respectability of such
a body.
7. Deviation Jrmn the established procedure for the
selection of officers for top level executive post in
Public Sector the case of Air
Afarshal H. C. Dewan, as Chairman,
Airport Authority of India
. 7.64 On the completion of the tenure of Air Marshal
Y. V. Malse, :B. S. Oas was appointed to look
the current duties of the post of Chairman in
59
addition to his own duties as; wholetime Member
Airports Authority of India. The Ministry
forwarded to the Public Enterprises Selection Board
the names of Shri B. S. Das and two others.
7;65 The matter was considered by the Public
Enterprises Selection Board at its meeting held on
December 4, 1975. After consider.ing the suitability
o'i. the possessing the requisite qualifications,
the P.E.S.B. hsted five persons, amongst whom the
first was Shri B. S. pas.
7 .66 The Board recommended Shri B. S. Das as the
most suitable person for appciintment as Chairman
I .A.A. I. The recommendation of the P.E.S.B.
. by the th.en Minister for Tourism and Civil
Aviatiort and the Establishment Officer was approached
on December, 1975 to seek approval of the
Appointments Committee of the Cabinet for appoint-
ment of Shri B. S. Das as Chairman, I.A.A.I.
7 .67 While seeking the approval of the A.C.C. for
appointment. of Shri Das, .the Ministry sent only his
C.R. dossiers and particulars of none of the other
candidates considered by the i>.E.S.B. were forwarded.
7.68 The Appointments Committl?e of the Cabinet,
however, chose to disagree with the recommendation
of the P .E.,S.B. and did not. approve the proposal. to
the appointment of Shri B. S. Das as Chairman.
Instead, the Committee, desired that Air Marshal
H. C. Dewan be to the post. No apparent
ieason for deviating from the procedure of selection
of top level executive officer was given. Air" Marshal .
H. C. Dewan had been interviewed by the P.E.S.B.
but was not found suitable. The then Minister of
Tourism and Civil Aviation choose to ignore the
Secretary's noting that there was disparity of criteria
as between P.E.S.B., and A.C.C., particularly because
Air Marshal tDewan had been considered but was not
recommended by the P.E.S.B. The then Minister
hc;wever, directed that the decision of tne A.C.C'.
:;hould be complied with.
. . 7 .69 lf the person recommended by the P .E.S.B.,
m lhc present cai;e was not acct:plable for arty
particular reason, the appointing could well
have asked for a . fresh panel of suitable candidates.
By not doing this and appointing a person who had
been interviewed by the P.E.S.B., find not found
suitable, the Government Ms exposed itself to the
charge of, to say the least, injecting into the selection
process considerations which may well be ex.traneous
to the requitements of the job. Such a practice does
n9t add to the credibility of established ibstitutions;
r:ither it impaires it.
8. MisuSe of powers and institutio1i of false criminal
complaints against four senior officials by the C.B.l.
at the instance of Smt. Indira Gandhi
7.70 A question askeJ by Shrj, Jyotirmoy Basu in
the Parliament seeking to elicit information from the
Government concerning import of machinery by Maruti
Private Limited, was listed for reply on April 16, 1975.
Four officers o( the Ministries, Snri Krishnaswamy
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Deputy Secretary, Heavy Industries;' Shri A. _S. Rajan,
Development Otlicer, DGTD; and Shri L. R. Cavale,
Chief Marketing Manager, P.E.C.; and Shri P. S.
Bhatnagar, Deputy Marketing Manager, P.E.C., were
collecting such relevant information as would ena!:Jlc
the Minister concerned to reply to the question .
7.71 In the process of gathering informatioh, Shri
Krishnaswamy asked Shri Khosla, an officer of DGTD
to contact the Manager of Mani.ti Private Limited and
obtain certain information. Shri Khosla accompanied
by Shri Bharij. visited the factory of Maruti Limited on
April 10, 1975, but no information was supplied to
them by the Management of Maruti Limited.
7.72 Some time between April 9 and 14, 1975,
Shri A. S. Rajan and Shri P. S. Bhatnagar contacted
M/s. Batliboi and Company on telephone to elicit cer-
tain information in relation to H1e question, which was
to be answered in the Parliament. On April 14, 1975,
Shri R . K. Dhawan, Additional Private Secretary t o
the then Prime Minister, contacted Shri T. A. Pai,
Minister for Heavy Industries on telephone and com-
plained against the conduct, of the officers of his
. Ministry, who were collecting information from
. Batliboi and Company. On April 15,
Sim R. I<, Dhawan spoke to Shri A. S. Rajan and
Siui P , S. Bhatnagar on t<';lcphone and directed Shri
P. S: Bhatnaga! to desist from collecting information
to the. lll1port of machinery by Maruti Private
Shn Ca vale has corroborated Shri Bhat-
statement. He himself r eceived a phone call
the same day. from Shri N. K. Singh, Special Assistant
t<? the to what trans-
p!Ce<l m tne. office regarding the Parliament Question
on Maruti.
7.73 S.ID:i T. A: Pai was personally called by the
Pnme M1mster to meet her at. her residence. Shri P::ii
met the Prime Minister. to his r ecollection
.it was either on April 14 or 15, 1975. He has stated
tha.t found Smt. G.anctI:i "completely upset and
furious . Sh.e told Shn Par tl.1at the Management of
M/s. Batlibo1 ai:id C?i;npany was being harassed by
officers of. h!s M1mstry. In. th.e presence of Shri
Pai. Smt. Ganah1 called Shri Dbpwan and directed him
to contact Shri D. Sen, Director, CBI and ask him to
into the conduct of H1ese officers and
raid theiC houses. She also asked Shri Dhawan to send
for Shri D. Sen.
7.74 smt. Gandhi also called Prof. & P. Cllrit!Cl-
the Minister of Commerce, at her
:es1den.ce on. 15, 1975 and directed that
1mn;ied1ate mqmry. should ., be started against
Shn .Bhatnagar because he had caused harassment. to
certam Shri Chattopadhyaya prepared a
note on Apr!I 15, 1975, extract from which is
reproduced below : -
"A specific case was brought to my notice today
Shri P. S. Bhatnagar, Deputy Market-
ing Manager, P.E.C. kept the representat.ives
of a firm waitiug for an unduly Jong time
and. coerced them to part with certain infor-
The manner in which the i11forma-
t1on sought bl! obtained, was un-
becoming of. a public I would like
60
the Chairman, P.E.C. to take disciplinpry
action against the officers."
Professor Chattopadhyaya in his evidenL>e. before the
Commission has stated that he discussed the
with the P .E.C. officers and informed them of what
he had learnt. from the Prime Minister an<t: ordered
that disciplinary proceedings should be commenced
against Shri Bhatnagar. According to Prof. Chatto-
padhyaya he did not apply his mine! with regard to the
Veracity of the information since it had Come from.
the Prime Minister personally and he t.hought that
the Prime Minister must have full information and
must have satisfied herself about the involvement of
Shri Bi.1atnagar. Shri Chattopadhyaya has clearly stated
that ;,.1e thought that the Prime Minister must have
applied her mind, especiaily because neither b efore
that incident nor thereafter had she ever complained
about the conduct of any ollicer and that was why
he directed the action as suggested by her.
7.75 Pursuant to the order m.ade by Prof. Chatto-
padhyaya, Shri Bhatnagar was ordi::re<l to be suspendeu
a_nd intimation of the . order was give,n to him some
time at-about 10 p.m. that night--i.e. April 15, 1975 .
7.76 Shri T. A. Pai, however, hat! called his 0Jike1:;;
and had satisfied himself that there was no
substance in the allegations made against his officers
to t.he effect they were responsible for harassment
9f M/s. Batliboi and Company. Shri Pai had also .
.the Manager of M/s. Batliboi and satisfied
the allegations that there was ill-treatment
of. tbc .. employecs of M}s. Bailihoi Limited was without
substance;
7.77 The orders of Smt. Gandhi were
by Shri Dl1awan to Shri Sen, Director of
CHJ. Shr_1 Se13 called the Deputy Director, Intelligence
C:cll, Sim R.aJpal on. April 15, 1975 evening and asked
him to venfy the mformaliun against Shri Krishna-
Shri Rajan a.nd Si1ri Bhatnagar. Shri Rajpa I
was informed by Sim Sen that all these officers were
corrupt-and had asse,ts to their known
sources . of Sh.ri Sen directed Shri Rajpal fo
immediately to
repo.rt w1thm.five days. On April 16;' 1975,
Shn .his subordinate officers to collect
the _reqms1te mformato.1011 and <!lso to mount surveillance
agamst t.hese three officers.
Before a!1y v.erificatiun could be made, Shri
Sen Shn RaJPal on April 16, 1975 to send
to him whatever information was available against
those. officers. T_he files were, accordingly,
?Y Shn RaJpal to Shri Se!1 . Shri Rajpal,
however, not any action against .these
officers, since the venficat1on had just started. Shd
Sen
7
ordered the registration of reaular cases
agamst Shn m1atnagar and Rajan .. o;{ April 17,
1975, cases f?rrnally reg1stcre.d agamst Shri
and Shn under Prevention of Corrup-
t!on for m possession of assets dispropor-
t? known means. On April 18, 1975,
residential premises were searched by the CBI
officers.
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7.79 The S.T.C. authorities, who had control over
Shri Bhat.nagar and Shri L. R. Cavale were also gal-
.vanised into action in pursuance of the note sent by
Shri D. P. Chattopadhyaya. Shri Bhatnagar was serv-
ed with' the suspension. order at his residence on the
night of April 15, 1975. Shri Ci:lvalc .was transferred
to .Madras Delhi. This order was dated
April 16, 1975. Then this order was withdl\awn and
a fresh order dated April 15, 1975, with 'identical
contents was again served upon: Shri Cavale. The fact
that the date of the transfer order was changed from
April 16 to 15 is significant insofar as the authorities
were anxious t.o tnake it appear that there . was no
delay in the execution of the orders. Shri Cavale did.
not accept the transfer meekly a.ntl protested against
order of the Chairman,
7. 80 Shri P. J. Fernandes, Direc;tor Genei"al, Bureau
of Public Enterprises, took up the relating to
the transfer of Shri Cavale with the Chairman of
S.T.C. Shri P. J. -Fernandes was informed by the
Chaipnan that he was helpless wd .that he was ac1ing
under Supe.riot instructions. Shri Cavale, then per-
sonally met the Chairman, who also advised him that
iri order to avoid further "complications and possible
harassment" , he should accept the order . of transfer
r:nd proceed to Madras. Sbri Cavale was unwilling
. io. accept the advice. Th.:: CBI started ver"ification
on him on April 21, 1975 and he was placed under
surveillance . . Tbe inquiry against Sllri Cavale did not
reveal any incriminating material against justifying
registration of a case against him. Bul on April 27,
1975, Shri Sen ordered r egistration of a preliminary.
foq\i iry. Shri Sen also ordered that copies of the
i;eport of . the pre!iminary inquiry .should not be sent
to the tm1al rec1p1ents. The Cell was also
to collect further information so that the preli-
mi1fo1y inquiry could be converted into a regular case.
This clearly implied that the. preH1hinary inquiry
inevitably to be cori.vetted into a regular case. The
Intelligence Cell was, however, unable to collect any
relia.ble rnaterial on which a could be regis-
tered against Shri Cuvalc.
7.81 According to Shri K. Vijayan, S.P., he wa1>
pressurised by Shri A. B. Chaudhary, Joint .Director
to write a note suggesting that. the house of Shri Cavale
should be searched. Accot;diiigly, Shri Vijayan re-
corded a note, and on the basis of his note house
of Shri Ca vale was searched on May 3, 1975; and a
regular case was registered against Shri Cavale for
investigation under the Prevention of Corruption Act.
7.82 The harassment of Shri Cavale did not, how-
ever, stop at stage. He was asked by the Chair-
man of the S.T.C. to resign from his office. Shri Cavale
was informed that if he continued to remain in the
ot!ice, he may get involved in more trouble and harass-
ment may incre\lse. Apparently, under pressure, Shri
Cavale submitted his resignation, which was pr0mptly

- 7 .8j The residential premises of Shri Krishnaswamy
were searched on May 3 . 1975. It appears that even
though there were not sufficient materials to warrant
any action against Shri On April 27,
1975 Shri Sen desired that a preliminary inquiry should
be registered against him. . was in spite of the
fact that Shri Rajpal was bold enough to point out
to Shri D. S.en repeatedly that Shri Ktishnaswamy had
a good his standard of liviog was Ihoderate
and that he came from a well-off family. Here also
it. was directed that the registration report should not
be sc11t to the usual addresses, ostensibly, to maintain
secrecy: 'On April 27, 1975, the Joint Director, Shri
Chaudhary, indicated that after more information was
. available, the preliminary ipqairy would be converted
into a regular case. The was, accordingly,
tered on May 2, 1975 and the house of Shri Krishna-
swamy was searched on May 3_, 1975. Shri Krishna-
swamy, who belot1gc0 fo the Railway Service and was
on deputation with the Ministry of Industries, proceed-
ed on August 18, 1975, on four months' leave, in view
of his continued harassment. This was extended
on half-pay. In February, 1976 Shri Krishnaswainy
was reverted to his parent cadre in the Railways. Even
thereafter the CBI appar
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.:: ntly tried several rnethods
to scrutinise all the files, whkh Krishnaswamy
h"1d dealt with in the performance of his duties in the
Industries Ministry. Nothing in.::riminating was found
against him. A case under the E;{tisc Act was
tuted by the iDelhi Police ut the instance of the CBI
for alleged possession of liquor beyond permissible
limit discovered du"ring the search of the residence of
Shri Krishnaswamy.
. 7.84 The trial court did i10t find Shri l\rishnaswamy
guilty of any violation and him on March
4, 1977.
7 .85 Wife :of Shri Krishnaswaftl)' was also. harassed
on certain alkgations of being involved in some Foreign
Exclrnnge. transactions. Even the bank !Ocker of the
father of Shri Krishi;iaswamy, a ollicer of the
.,Govern1i1cnt of India in the Jndia11 Audit and Accounts
Service was searched at Madras.
In the proceedings taken against all the four
officers, pursuant to which. cases were started by . the
CBI practically nothing was 'detected ari.d ultimately
the proceedings under the Prevention of Corruption
Act relating to the allegat-ion of possessing assets dis-
proportionate to the known of income wt!re
abanJoncd in all the cases.
. 7.87 All the four oflicei:"s were cx.amined by the
Commission. At the preliminary stage the atJidavit of
Shri Rajan was read out us he was not. available. He
appeared at the second stage of Lhe inquiry and he was
examined by the Commission.
7.88 From the sequence of events it appears that
::ifier the four officers attempted to collect. information
in the performance of their duties between April 9 and
15, 1975, to enable the Minister concerned to reply
to the Starred Quest-ion before the Parliament 011 April
16, ' 1975, Shri Dhawan \spoke to Shri Rajan and Shri
Bhatnagar 6n and told Sbri Bhatnagar not
to make any , inquiries concerning Maruti Private
Li1'11itt!cl. E: th(.;r on ApriJ l 4 Qr 15 nlld mor.:- probably
on April 15, 1975, Shri .T. A. Pai was summoned to
tl1e house of the Prime Minister aniJ he was told by
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the Prime Minister that the Mamfgement of M/s.
Batliboi and Company was being harassed by the
officers of his Ministry. To use the wqrds of Shl'i Pai :
"She started talking about corruption, my
officers were talking about it and all that
and they are corrupt themselves and what
she said was not quite relevant. I could
not. make out because she was so furious and
angry; that before I could answer, had
called Shri Dhawan and asked their hou&es
are to be raided end Sen to be sent
for."
Shri T. A Pai, however, on inquiries made by him
found the charges baseless.
7.89 Prof. Chattopadhyaya, however, consulted his
officers and action was taken against Shri Bhatnagar
by suspending him forthwith,
7.90 &lri Dhawan has, in his evidence bdore the
Commission, denied that Smt. Gandhi had told him
anything regarding action to be taken against the
officers of the Ministries .Jf Heavv Industries and
Commerce in the presence of Shri t. A. Pai; but he
stated that he was directed by Smt. Gandhi 10 contact
Shri D. Sen and to d1eck the antecedents of the four
officers co.ncerned. Accordingly, Shri Dhawan con-
tacted Sim D. Sen. According to Shri D. Sen. Shri
Dhawan came to him personally ii1 his ollicc nnd <>ave
the information. Shri Dhawan is not certain whcther
-he t?lked to Sen on or personally. The
version of Sim Dhawan, to quote his own words is :
"Chairman : Did you go, at the: instance of the

to M.r. Sen, or in your capa-

city without an order from the Prime
Minister?
: No, I did go in my own capacity.
Smee the had come to the Prime
Minister and the Prime Minister said that
there are complaints about them. We should
check about antecedents. So, I had passed
on this information to Mr. D. Sen that the
Prime Minister had re:eived complaints about
these officers.
Chairman : Were you asked by the Prime Minister
to go ?
Witness : Yes, I was given the names to pass
on this information on to Mr. Sen only 10
check?
Chairman : By the Prime Minister ?
Witness: Yes, by the Prime Mini'ster.
Chairman : Did you tell Mr. D. Sen that the
Prime Minister had given this informat-ion to
you?
Witness: I ' do not remember at this stage
that I thmk she must have definitelv told
me; otherwise I do not fowe any loc11s am/;
on my own to say."
62
7.91 Shri Sen maintained no record of the commu-
nication made by Shri Dhawan to .hi.m, but ndisput-
ably the machinery of the C.B.I. was moved into swift
action against the four officers concerned. Shri Bhat-
nagar was immediately suspemkd and an order to that
effect was served upon him the very same night. Secret
were start.ed agai!nst Shri Rajan and Shri.
Bhatnagar, and soon thereafter regular cases were
registered against them.
7 .92 The activities of th.:: officers performed in the
of their duties were apparently not lih.d by
Smt. Gandhi. The evidence does not disclose that .
there was any harassment of the officers of M/s.
Batliboi and Company. Two representatives of M/s.
Batliboi and Company hav.:: been examined, namely,
Shri Adeshra and Shri Mathur and they have denied
that, anyone, either Shri Bhatnagar or Shri Rajan had
come to the office of M/s. Batliboi and Company and
they have also stated that it is not true that any repre-
sentative of M/s. Batliboi and Company was insulted.
They have also stated that they had made no complaint
to anyone. Even though, there was, therefore, no case
of any harassment of any officials of M/s. Batliboi and
Cc-mpany, stringent measures were apparcnt.ry takeq
in reprisal against fae actio.11 taken by Shri Bhatnaoar
and Shri Rajan in tl1e performance of their
These otficcrs were performing their duties and collect-
ing information which had tq be supplied to the Minis-
ter so as to enable him to answer the question before
the on April J 6, l 975. The houses of
both these officers were searched without any reason
am.l nothing incriminating had been found.
7.93 Regular cases under Prevention of Corruption
against Shri: Krishnaswamy and
Shn. houses were raided by the CBI.
Against Sim Knshnaswamy proceedings were , taken
t:nder the Excise Act and also against his wife for an
of the Foreign Exchange Regu-
Jatron. Sm1 Knshnaswamy was also reverted to his
.paren_t and Shri Ca vale was pressurised to
submit his resignation when he showed his uuwi1lin!!-
ness to carry out the transfer orders. Shri Cavale,,s
wife also Jost her job on account of the steps taken
against him.
.7:94 Shri T. A. Pai sent a letter to the Prime
M101ster on or about May 5, 1975, after the searches
these_ officers. had taken piace and narrated the ac-
tion which was taken against them. Smt. Gandhi, by
her letter dated May 7, 1975, replied that in tJ
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course of the searches fhe CBI had found that !he
officers in question seemed to be in possession of
assets disproportionate to their ki1own sources of in-
C<'Jl'!e. She in her letter had stated that the inform.ation
the officers had received by the CBI
Shri rniawan in his depositi on . before the Com-
m1ss1on has stated that he had passed on the informa-
tion to the the instance of Smt. Gandhi. She
had also wntten 111 that letter that faese oflicers did
not seem entitled to any support. Smt. Gandhi had
. a note froll'! the CBI which explained the
pos1t1on m some detail. But tpis assertion appears to
have been proved unjustified. It may be
to observe that at the conclusion of the investigation,
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nothing was disclosed and the entire proceedings start-
. ing with the searches were undertaken merely _because
information was received by Shri D. Sen from Shri
Dhawan at the instance of Smt.. Gandhi. The said
informatio1f was supported by no other useful evidence.
Shri Sen in. his evidence was unable to throw any
light on the finding of any as3'ets disproportionate to
the known sources of the incorile of these officers.
T.he cases under t-he Prevention of Corruption Act
were ultimately dropped.
7.95 Smt. Gandhi has not filed any statement in
reply to the notice tinder rule 5 (2) (a) of the Rules
nor has she chosen to give evidence in pursuance to
the summons issued under section 8B of the Act.
Shri Dhawan has denied that in the presence of Shri
Pai he .was asked by Smt Gandhi to have the houses
of the four officers searched. He has stated that some
MPs and others had complained to S:mt. Gandhi
about the corruption prevailing and about the four
officers in particular and he liad conveyed this infor-
mation either personally in the offi:;e of Shri D. Sen
or" on . telephone. It is indeed a strange coincide1ice
' that the MPs were complaining only against offi-
cers who weie engaged iil the collection of infortnation
relatiilg to Maruti. . Between the testimony of Shri
T. A.. Pai and Shri Dhawan viewed in the light of the
rest of the evidence, the Commission has no hesitation
in accepting the testimony of Shri T. A. Pai.
7.96 The evidence in the view of the Commission
a gross abuse of the authority vested in
Smt. Gandhi. She had taken into her head to act as
she did merely because the officers of the Commerce
Industries Ministries . had, in the discbarge of
their duties taken steps to acquire information which
was likely to affect the interest of Maruti . Lirnited.
She pressurised Shri Sen to take proceedings for
ing their houses and for filing eomplaints against them
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. under the Prevention of Corruption Act, which were
. unjustified and which were eventually dropped.
7.97 A notice under rule 5(2)(4) of the Rules and
summons under sectioli 8B o[ the Act were issued
also_ to Shri. R. K. Dhawan and Shri D. Sen. They
-apJ)carcd before the Commissi.on led evidence ht
suppott of their defence. Shri D. Sen has also filed
liis s1:-i1ement Jn response to rule 5(2)(1i) notice.
7.98 The role of Shri R. K. Dhawan to
been merely to convey the message of Smt.
Gandhi to Shri D. Sen. Beyond that .no other action
can be attributed to him, which in turn could be in-
terpreted to have activated the subsequent processes of
law that were set in motion by Shri Sen. According-
ly, thet'efore, the Commission does not take a ser:ious
view of the activities of Shri R. K. Dhawart in this
case.
7.99 Shri D. Sen, in his statement filed in response
to. the notice under rule 5(2)(a) has stated that in
accordance with the provisions of section 157 Cr. P.C.
he .had to register cases against those officers after
having received the information ftom Shri R. K,
D!i:1wan and that, in if he had delayed the regis-
tration of the cases, it might have been dereliction of
duty on his part and he could have been blamed for
that. This contention is not teilabk if only for the
reason that registration of cases under section 157
Cr. P.C. should have been preceded by the availability
of information which, prima facie, makes out ail

7.100 In the present case the information brought
on record by the Intelligence Unit after the secret
inquiries, was not of a nature which could be said
to hnve constituted, prima fade, commission of an
offence by the officers concemed. It was also noticed
that Shti D. Sen had no valid explanation for his not '
recording in writing the. exact in.formation that he had
received from Shri R. K. :Dhawan at the of
Smt. Gandhi. Repeated questions put by lhe Com-
mission to Shri D. Sen on 'this point failed to evoke
any useful reply.
7.101 The conduct of Shri Sen discloses that he
has misused his authority in directing that First In-
formation Reports be filed against all the four officers
and in starting roceedings against them.
7 .102 The evidence, therefore, discloses that Smt.
Gandhi was responsible for institution of criminal
against the four officers concerned, having
their houses searched and subjecting them to humilia-
tion;. meie]y because they. were tesp6nsible for . collect-
ing information in the discharge of their duties, which
would have been prejudicial to the interests of Maruti
Limited, a concern in which Shri Sanjay Gandhi, her
son, was vitaily interested.
7 .103 This case brings into focus undesir-
able aspects of the: functio11ing of the CBI whiCh in
the view of the Commission need to be looked into.
immediately with a view to prevent a recurrence of the
type of abuse of authority and misuse of power by the
Director, C[H, in future. It is imperative for the CBI
to n::alise that in setting afoot a series of actions
against individuals-whether officials or non-officials-
thcy arc irrot:trievably damaging lhe reputation and
soda! standing of the individuals concemed. They
should 11ot, therefore, be allowed to initiate proceed-
ings against anyone unless it is ensured that the facts
on record warrant lhe type of proceedings that they
launch on. . .
7 .104 In the case th( re was nothing against
any of the four office1s except the vague complaints,,
if at all, allegedly made by the MPs and cqnveycd to
the Director, CBI by $h1'i Dhawan at the instance of
the Prime Minister. Initial enquiries actually reveal-
ed nothing specific against arty of them. Rather Slui
Krishnaswamy was reported to be enjoyifig a good
putation. And yet the CBI mounted the whole
of actions in their armoury at the end of which nothing
incriminating was found. But in the process the (:BI
had destroyed these officers socially, physically --' and
morally. Now that we have seen that .even the man at
the top of the CBI with all his seniority and status
can still lend himself and his organisation to serve
purposes other than stric.tly constitutional and
moral, it has to l:>e ensured that in future no sqch
individual or organisation should be capable of being
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a helpless and unquestioning tool in the
hands of the powers that be. The Commissi9n feels
that certain safeguards need to be provided by making
the Director CBI accountable to an independent body.
Yet another suggestion can be that the Director CBl
may be statutorily rendered independent of the exe-
cutive Ministry and his teim of office made subject. to
a tenure.
9. Unlawful detention of Textile/ Customs employees
under MISA by Delhi Administration and institu-
. tion of false CBI cases against four of them.
7.105 S/Shri B. D. Ghosh, A. K. Chakravorty,
R. C. Jain, S. K. Walia. R. Rangaraja, R. S. 'Gupta,
C. S. Venkatesh, V. B. Bhambri and Asutosh Mukher
jee were working as Inspectors in the Regional Office of
Textile Committee Delhi ciuring April-May, 1976.
ShI'i S. N. Chatterjee was the AssiSfant Inspecting
Officer in the same office. The Inspectors working
in the Textile Committee Otncc were required to
obtain from the Textile Committee a certificate to
the effect that the fabric from which the gai'ments were
made was mill-made or handloom. The Textile Com-
mittee is required to ensure that no garments which
are made out of mill-made cloth are mis-declared as
made from handloom fabric. During the same period.
S/Shri Sumer Singh Yadav and M. S. Malik were
working as Customs Inspectors at Palam Airport and
they IJScd to deal with exports. Their duty included
enforcing Expoit Trade Control Restrictions in the
matter of exports an(! also ensuring that correct r ates
of 'draw back' are granted to the exporters. 'Draw
back' is a of central excise duty to the exporter
when the goods are exported out of the country, the
rate varying, depending on the incidence of duty on the
item of raw material.
7.106 On April 22, 1976, Shri S. S. Yadav, who
was one of the Customs Inspectors, was told by his
Superintendent to draw samples from the consignment
of certain packages belonging to M/s. Indira Interna-
tional for determining, for draw-hack purposes, whe-
the garments were actually of mill-made cloth, as
claimed by the exporters, or of power-loom cloth.
Pending the furnishing of the samples, the export of
the had not been permitted. On the
basis of the samp1es drawn by Shri Yadav, he was of
the view that the exporters had misdeclared the goods
for obtaining illegal benefit of draw-back at a higher
rate. Shri Yadav tried to e;}'lpJain to the Clearing
Agent of M /s. Indira International that the firm was
cheating the Government by inis-.declarin!! that the
. garments were made out o( mill-cloth while actually
they were made out of nower-loom cloth. On this
occasion, the Customs Officer wa.s threatened . . and
told that the consiimine.nt belonged to the mother-in-
Iaw of Shri Saniav Gandhi. the son of the then Prime
Minister Smt. Indira Gandhi and that "officers will
have to pay the orice for the hold-uo of the consign-
m.ent". Out _of fear. the C'stoms Authorities allow-
ed .their consignment to be exported without any
action.
7.107 Shri R. D. Bhatnai!ar. one of the Insoectors
in the Textile Committee. h::id visited Mis. Indira In-
ternational in the course of' his 0fficial business. Ear-
per to that Shri A. K. Chakravorty, another Textile
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lnspcctor, had rejected a consignment of ready-made
garments of M/s. Indira lnte.rnatio13al. When Shri
Bhatnagar met Smt. Doddy of M/s. lndira Interna-
tional, she appeared very much annoyed and threateri-
cd that if shipments were rejected or delayed by the
officers of .the Textile Committee, she would .see that
drastic action was tak'en against the officers.
7.108 Shri Suri had been told by Shri S. K. Modi
of Modi Yarn Mills and also by Shri Kapoor, Manager
of the lndil'a International, that Shri Sanjay Gandhi's
mC!ther-in-law was interested in the Indira international
and that lhcy should take care that the firm httd no
trouble in the transaction of their business.
7.10.9 Some time in .. last week of May, 1976,
Shri S. C. Suri, Inspectirig Officer in the Textile Com-
mittee' s office, was rung up by .. _K. Sirigh;
cial Assistant to tJ1e --then- c omrnerce Minister, Shri
D. P. Chattopadhyaya, requiring Shri Suri to furnish
urgently the addresses and dates of posting of all the
staff in the Textile Committee. Shri Suri
has stated before the Commission that Shri N. K.
Singh had told him that he would be t.akcn to task if
the _for by Shri N. K. Singh was not
furn1sh;:d to him w1thm half an hour.
. 7. 110 Shri N. K. Singh has stated that he had asked
fol' a li st of names of the Textile Inspectors on a1i
urgent basis from Shri Suri, who, he bad been told
would be the right person to collect and furnish thd
information on a priority basis. This information was
required by him as, earlier'to that, Shri R. K. Dhawan
Private Secretary to Prime Minister:
or. Shn Y-. Joint Secretary in the
PI'lme .M1mstcn Sec_retanat, had rung him up asking
for a ltst of the Textile Inspectors as it had been com-
. plained to the Prime Minister that Shri D. P. Chatto-
padhyaya, the Minister, was showing special favours .
to the Bengalees. He had brought this allegation' to
the notice of the Minister who had told him to collect
the information and pass it on to the Prime Minister's
Secretariat. The information was furnished bv . .Shri
Sur! to Shri N. K. Sine:h, who in turn passed it on' to
Shn R. K. Dhawan. Shri N. K. Singh has also stated
that he had been told' by either Shri R. K. Dhawan .
or Shri V. Ramachandran that the information was re-
quired bv the Prime Minister. Shri R. K. Dhawan
has stated that he had rung up Shri N. K. Singh and '
conveved to him the information that had come to the
of the Minister. regarding the a1legcd
nep?ttsm ;of the Shn D. P. Chattooadhyava.
Shn Dhawan demes that he had mentioned to Shri
N. K. that was urgent . The
of asking for the list itself had arisen out of the
discussion that he had with Shr"i N. K. Singh. Later
he had received some unsi1rned list. giving the names
0f certain in the Textile Department. giving
the. dates of appomtment and their other particulars,
Shn Dhawan had sh)Wn the list to the Pri me Minister:
According to Shri Dhawan. the list of names given
by him to Smt. Gandhi and it remained with her.
7.111 Shri A. P. Mukhedee, DIG, CBI, has
before the Commission tl-)at time towards th(}
end of M:av. 1976. Shri P. S. Bhinder. the then DIG
(Range) of Delhi Pol ice had informed him that he
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had received some information from the Prime Minis-
te.r's House about corruption and harassment by some
officers of Promotion Council
in the matter of export of garments by various expor-
ters; Shri Mukherjee had told Shri Bhinder that the
Delhi Branch of CBI had no information on the sub-
: ject. Thereafter set about . collecting whatever
information . was possible on the subject through its
. officers. Even before Shri A. P. Mukherjee could
cellect auy worthwhile information on which any action
could .be .contemplated, he canie to know that 12
0.fficers of the Text.ile Committee/Customs had been
arrested under MISA by N1e Delhi Police. Thereafter,
he discont.inued-.-his- effo1ts to compile any further
information on the subject.
officials . of the Delhi Administration and not to the
Central Government employees. In the present case,
all the employees were Central Government employees.
7 .115 Delhi Police stt'uck in the first week of June;
1976. The concerned Superintendents of :Police were
supplied the names of the officers of the Textile Com-
mittee/Customs by Shri Bhitidet who ordered their
immediate arrest and detention under MISA because
they were indulging in corrupt practices and anti-
Government activities. The SPs were also informed
that District Magistrate give instructions to the
concerned ADMs for issuing the detention or_ders unaer
MISA, and that in the meantime "in accordance with
the prevalent practice" the officers should be arrested
tmder the preventive sections of the Criminal Procedure
Code so that they did not evade arrest by going unde.r-
ground. _The SPs passed on the orders to their SHOs
after confirming with the concerned ADMs and the
arrests. followed. The ADMs who had issued the
MISA detention orders have aU said in their state-
ments that they issued the detention orders merely
on the direct.ions of the District Magistrate.
7.112 According to Shri Bhinder's testimony before
the Commission, he had spoken to Shri A P. Mukher-
jee, DIG, CBI but had not mentioned to hiin that
the information had originRted from P.M.'s House.
There is no reason why Shri A. P. Mukherjee should
have said that Shri Bhinder had told him that the
information had originated from the P.M.'s house if in
fact Shri Bhinder had not. told him so. Shri
jee was not in any way connected with any. of the
transactions regarding arrests of the officers .concerned 7.116 Customs Inspectors Yadav and Malik were
which subsequently followed and he was in no picked up from their office in the afternoon:of June 1,
d f d h" d 1976, by the Police on soine false pretext and locked
nee o any excuse to rop names to cover is 01ngs. up. Textile Inspectors Walia,"13hambri, Rangaraja and
Shri Bhinder _has stated that he had got the information Asstt. Inspecting Officer Chatterjee, were whisked away
from exp_orters. about the corruption indulged in from their homes in the late hours of night on the same
. the Texttle/Customs Officers. In the course of lus
examination by the Commission, however, he could day. The other Inspectors Ghosh, Gupta, Venkatesh,
not name the person who had given him this informa- Chakravortv; Jain and Mukherjee, were .arrested sub-
tion, nor had he kept any record of the inforfilatfori. , , sequently -iit the convenience of the Police between
2-6-76 and 5-6-76.
. , 7 .113 The subject of dealing with the corrupt offi-
_cers generally under MISA had, it appears, been discus-
:s,ed by Sii1ri Bhinder with the senior officers of. the
Delhi Administration and a policy decision to that
effect had. also been taken. According to him, he
had told Shri Balwant Singh, SP (Anti-Corruption)
of the Delhi Administration to collect the list of names
of officers indulging in corruption and Shri Balwant
Singh had furnished him that list, which formed the
basis for action that was subsequently taken against
the officers. Shri :Salwant Singh in his statement before
. the Commission however, denied having furnished any
such list of corrpt officers to Shri Bhindei', though
Slfri Balwant Singh had said that at the instance of
Shri Bhinder he had detailed his officers to associate
wi(h the CBT officers in interrogating the
toms officers who had been earlier arrested by the
Delhi .Police under sections 108/151 Cr. P.C. and
later on detained under MISA. Shri Bhinder bas
tried to deny that the arrest of the Textile/Customs
officers on fabricated grounds under sections 108/151
Cr. P. C. was done at his instance, though the SPs.
J)articularly Shri R. K. Ohl'i, Superintendent of Police
(Central District), have categorically stated that instruc-
tions for these arrests originated from Shri Bbinder.
7 .114 Smt. Shailaja Chandra has stated before the
Commission that though the subject of arresting gene-
rally the corrupt officials und_er MISA had probably
been discussed in the Committee meeting, still
the decision was intended to be applicable only to the
S/39 HA/77-10 .
7.117 Shri Bhinder has admitted before the Com-
mission that he had not obtained the permission of the
concerned Ministries before arl'esting these officers.
7.118 All these-officers were initially arrested under
the preventive sections of Criminal Procedure Code
(108/151)' on false and fabricated allega_tions. Ins-
pector Yadav and Inspector Malik who were arrested
from tiheir office premises wete alleged to. have raised
protesting . against the Emergency and were
plotting to overthrow .the. SJov.ernment.
Bhambri was charged with mstigatmg the people agamst
the G.overtiment a public speech made at
5.30 in the mornmg on June 2, 1976 m A1mal Khan
Park, while actually he was picked up from his
earlier at 12.30 at night loc_;ked up at .the police
station. The other Inspe'dors were also arrested on
similar false allegations':.
7 .119 All these respectable Government officers
were handcuffed by the police while being taken to the
Court or to the Jail. Some of them were made to
travel in t.he public buses Wliere they were seen. by
general public. After a mecha'nical production before
the Magistrate where none of them was given a hear-
ing or offered bail, they were sent to Tihar Jail. With-
in a few days of their arrest, the detention orders under
MISA were duly served on them' at Tihar Jail. The
grounds of detention in the MISA orders in respect of
the Textile Committee officers were that "in. the
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course of inspection of textile material meant. for ex-
port, the officers were showing undue to the ex-
. porters by. stamping the sub-standard textile for export
t0 foreign countries which is bringing bad name to the
country" an.d also that !he "have J;>een i?dulgin,r
in malpractices and actmg against the national 111terest .
In respect of the Custom Officers. grounds of
tion were that they were "conductmg 111 a
manner prejudicial to the maintenance of public o.rder
while working as Inspectors in the Air Cargo Unit of
. Palam Airport." The charges under sections 108./
151 Cr. P.C. on the basis of which these officers were
initiaily arrested were subsequently dropped in view
of their detention under MISA.
7.120 A meeting took place between Shri D. Sen,
Directol', CBI, and Shri Bhinder, in the office of. the
CBI after the arrest of the Tcxtile/Cus!oms o!Ticers.
At this meeting, Shri Bhinder is reported to havi;: said
that he was 100% satisfied that these officers were
corrupt. According to Shri Sen, he came to know
about the arrests of the officers when the annoyance
of the Commerce Minister was conveyed to him by
someone whom he does not remember. After he
heard from the Delhi Police or from the Commerce
Ministry about the arrest of these officers, the CBI
decided to move in the matter since there were also
charges of corruption against them. He had directed
Shri Rajpal to collect whatever intelligence was avail-
able regarding col'l'uption against these officers. Ac-
cording to him he left it to Shri A. B. a1audhary,
Joint Director, to take appropriate action after the
'collectiOn of the required information against the con-
cerned officials.
7:121 A perusal of the CBI file makes a very dist-
ressing reading. At the instance of the Director,
CBI, the CBI officials moved into action irt an
effort to information against the officials to
substantiate the charge of corrnption .against them.
Shri Y. Raj pal, D. LG. in-charge of . the Intelligence
Unit of the CBI has stated that it was obvious to him
that Shri Sen had already made up his mind to regis-
ter cases. In the process a .couple of CBI officers
associated themselves with the S.P .. (Anti-Corruption)
of Delhi. Administration and interrogated the arrested
officers in the Tihar Jail. Separately their houses
were also kept under watch. As a result of all these
efforts,. some information was obtained against only
. four of the arrested officers about their l1aving certain
assets. No effort was, however, made to ascertain
whether or not these assets were in fact disproportion-
ate to the known sources of their income. Jt does
not appear from the record that any inquiries were
made to ascertain whether the officers who had declar-
ed ceitain assets had come by those a.ssets through
sources other than their pay. On the basis of the
perfunctory efforts made by the CBI officials, regular
cases under the Prevention of Corruption Act were
registered against four officials, namely Shri S. N.
Chatterjee. Shri Asutosh Mukherjee. Shri S. S. Yadav
and Shri M. S. Malik. Almost identical FIRs were
registered against each of these four officers and their
houses were searched. Thev did not even spare the
house of the son-in-law of Shri Malik whose house
was ::ilso by CBT. The searches revealed
66
nothing. Suffice it to say after all the
tion that followed, the CBI had to drop all the four .
cases started against these four ofI.kers under tJ:ie .
vention of Corruption Act. But m the meantime the
CBI under Shri D. Sen had done i.rreparable damage
to these officers for no fault of thelfS.
7.122 Director CBI, Shri D. Sen. showed _extra
keenness to register against these f<?ur officers,
though the material available on record dtd not war
rant the action that followed. On the other hand, when
it came to dealing with Shri Bhatnagar and Suri,
Shri Sen adopted a different yardstick: R.
Gupla. his Shri llajpal were
their suggestion to Shn Sen the avallable.
on their record warranted action agamst them. Shn
Sen evaded the issue by asking for yet more material,
and eventually Shri D. Sen decided that the material
collected against them be forwarded to the Department
for appropriate action.
7.123 'The Commission cannot help feeling
Shri D. Sen applied invidiously different standards in
dealing with the two sets of officers. .
7 .124 The relations of some of the detained officers
ran from pillar to post in an effort to secure the
:release of. the officers. In the they .knocked
at the doors of the Commerce Mm1ster, Shn D. P,
Chattopadbyaya, Shri N. K. Singh, the Special Assist-
ant to the Commerce Minister', Shri Bhinder and the
Prime Minister. Shri D. P. Chattopadhyaya has
stated that he felt very bad about the whole thing and
yet felt helpless in the circumsta:ices. In his .
statement before the Comin1ss1on he had said that there
was an element of competition the Delhi
ministration and CBI to take the laurels for these tm-
justified detentions. Shri Qadam Singh, who is
one of the relations of Shri Yadav, had even ventured
and gone to meet Shri Sanjay Gandhi in the Maruti
Factory in an effort to get Shri Yadav released, . but
Shri Sanjay Gandhi is reported to have told him that
he deserved to be taught a lesson.
7.125 Shri S. M. Vohra, one of t.he Custom
officials who had known Shri Bhinder, had also met
Shri Bhinder in an effort to get the officers released.
Bhinder at that reported to have told
Sh. that only Sanjay Gandhi could help in the
matter as he was annoyed .over the objections made
by Sbri . Yadav in relation to the consignment of
exports by his mother-in-law.
7.126 Shri S. K. Walia's release was secured some
time in September and it appears, on the admission
of Shri R. K. Dhawan in the course of his statement
that Shri Walia is one of his relations.
7.127 The matter regarding the release of the
arrested officers had come up. before the Screening
Committee of the Delhi Administration. Shri. Krislrnn
Chand in his statement has said that the cases of the
Taxtile/Customs officers were placed before him in
the Screening Committee. He admits that iii the
meeting held on 16th Novcniber, 1976, Shri Bhinder
told him that he would like to speak to him separately
regarding H1ese cases before any decision is taken.,
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Accordingly, both Shri Bhinder and Shri Krishan
Chand had adjourned 'to the ante-room where
Sh. Bhinder told him that the release of these oiticers
was not LO. be considered as " these were the orders
from the higher-ups". Sliri Krishan Chand has said
that he had understood "higher-ups" to . mean
Sh. Sanjay Gandhi. That Sh. Bhinder ah<l Sh. K'ri shan
Chand had a word with each other separately at the
tiinl! of the Screening Committee meeting is also borne
out by Shri T. R. Kalia, Dep\1ty Secretary, Home,
.Delhi Administration, . who was present in that
meeting; Shri Bhinder in his statement has, however,
sald he had $poken to. Sh. Krishan Chand
mentioning that he should consult Sh. Om Mehta
before deciding to release the inspectors. He,
however, denies having told Shri Krishan Chand about
the orders from the "higher-ups".
7 .128 The story of the arrest and detention of the
Textile Inspectors makes a very sad reading. Goii1g
entirely by the facts available on record, it has no-
where been that these officers were corrupt
or had done anything which could even distantly be
interpreted as improper o:r incorrect. On th'.e contrary,
scme of them had acted courageously and correctly
in the dischmge of their -duties and this proved to be
their undoing. I.n prqc.ess they had antagonised
the proprietors l>f".' M 'S. International whose
financial interest With:hw mother-in-law 6f Sh. Sanjay
Gandhi stands proved 011 the basis ot documentary
evidence. The relevant income tax records of
Smt. Ari.teshwar Anand,. of Sh. Sanjay
Gandhi were produced before the Commission, on the
basis- of which it is fully aud completely established
that Smt. Anteshwar Anand had considerable
financial interest in t.he firm M/s. Indira Internatio1ial.
fa the year ending 31st March, 1976 and 31st March,
1977, substantial amounts had been rec,eived by
St:nt. Anand from M/s. Indira Interrtationai as
co.mniission, as proved by the Income-Tax Returns
of Smt. Anteshwar Anand, produced before the
Commission by the Income Tax Officer.
7_.129 The list of the . Textile Inspectors. was
obtained by Shri N. K. Singh at the instance of
Shri R. :(. Dhawan and the list was passed on by
Sh. N. K. Singh to Sh. R. K. Dhawan, who in turn
hati passed it on to Smt. Gan<lhi. The contention
that the list of Textile Inspectors was required only
to check or vedfy the allegation regarding nepotism
by Sh. D. P. Chattopadhayaya with regard to Textile
Inspectors does not appear to be correct. If this list
was _required only for deciding the issue with regard
to the allegation of nepotism against Sh. D. P. Chatto-
padhayaya, how could this conclusion be arrived
at correctly by obtaining only the list of Textile
fospectors- a small group of ofllcers in a Ministry
which has hundreds of other employees distributed
ov_er_a. large number- of- Dt:partiiieuts. It that
the list furnished by Sh. N. K. Singh to Sh. Dhawan
was . given to Smt .. Gandhi; -and from Smt. Gandhi it
appears to have gone to. Sh. Bhinder who
cracked down on a few selected officers. fhe
contention of Sh. Bhin<ler that l1e got the list from
Sh. Bal want Singh is not tenable as does not
explain how he got within that list, t!.1e names of just
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the two Customs Officers who happened to have
antagonised M/ s. Indira In.ternational. Shri Balwant
Singh himself has denied having furnished any list to
Sh. Bhinder.
7 .130 Sh. Bhinder 011 his own adthission has been
the prime mover in the sordid story ot these arrests
and detentions.
7. 131 After the preliminary stage of hearing in
this case, the Commission had given n notice under
Rule 5 (2) (a) bf the Comrriissivns of Inquiry Rules
and summons under . section SB to Smt. Indira.
Gandhi, Sh. D. Sen, Sh. R. K. Dhawan, Sh. P. S.
Bhinder, Sh. N. K, Sing'h and Sh. Balwant Singh.
Smt. Gandhi f.hough she responded to the summons,
dic.l not submit her statemen.t as required upder
Rule 5(2) (a) and also refused to be examined 011
oath. The remaining four had responded to the
notice and the summons. The Commissio1i-has takei1
into account the versions of Sh. N. K. Singh,
Sh. Balwant Singh and Sh. R. K. Dhawan. The
Comrnission is sat.isfie<l that they had pI.ayed a very
limited role each in- t!1eir respective iields and they
cannot be held for the arrest and dete'nticn
that followed nor for the CBI cases that were 1nootcd
against four of these officers.
7.132 Regarding Shri D. Sen and Sh. P. S. Bh'inder,
the Commission, before coming to its condusion on
the part played by them, has taken into account thei:r
writteri statements as also the evidence brought on
record by the statement. of witnesses whom they had
examined and also chosen to cross-examine.
7.13j Shri D. Sen appears to have lent'i'.himselt
and his organisation for purposes than those
which are strictly within the terms of the charter of
the CBI. It cannot otherwise be understood -how
he could have mourtted the cases of corruption against
the four officials, searched their houses including the
house of the son-in-law of one of the officers, unless
it was at the instance of Shti Bhindcr. the entire
action by the C13I under Shri D. Se11 was initiated on
grounds, which were totally inadequate and
imaginary. As against this, he let off without any
action two officials against whom. there was adequate
material t-0 warrant prosecution under the Prevention
of Corruption Act. He has grossly 1riisused his .
position as the iDir:ector, CBI, and abused his
authority.
7.134 The Commission feels that Smt. Gandhi has
abused ):ler authority and misused her power in having
c::i used the arrest and detention of these .12 ofilcers
without adequate justification and using the CBI to
set in motion criminal cases against four of them, all
of which had to be abandoned eventually for want of
any material.
7.135 Shri Bbinder has been the hatchetman and
be went about the arrest and dete'ntion of these
officers without any justific<ition what.ever. He was
also fresponsible along with Shri D. Sen to get the
CBI to register cases against four of these officials.
He has grossly abused his authority and misused hi:i
power.
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10. Misuse of powers and miscarriage of justice in
saving Shri Sudarshan Kuma1' Ver ma, a clerk in
the Railways, from legal punishment by the CBI
officials.
7 .136. On information furnished by Sh. Gopal Das,
a loco-shed man, that Shri Sudarshan Kumar, a clerk
employed by the Northern Railway was demand)ng
illegal gratification as consideration for fixing the scale
of pay of Shri . Gopal Das, a case was and
arrangements were made by the CBI Delhi.
to trap Shri Sudarshan Kumar when the
bribe. Shri Sudarshan Kumar was caught in the
actual process of demanding and receiving bribe.
7.137 Shri Verma to have had access to
the Prime Minister's household and he got in touch
with his. contact.
7.138 Shri D. Sen, the Director of CBI was asked
by some one from the Prime Minister's house t? look
into the case.
7.139 A complaint. was lodged and investigation
was completed. Prosecution o( Shri Verma under
section 161 of the Indian Penal Code and section 5(2)
read with section 5 ( 1) ( d) of the Prevention of
Corruption Act was sent to the Vigilance Officer,
Northern Railway on January 31, 1976.
7.140 Normally, the Director of CBI handles
import.ant cases dealing with high officers, whereas
cases involving non-Gazetted officials are dealt with
.at the Branch level and neither the Director nor the
Joint Director is concerned with such cases. But, in
this case, shortly after the case against Shri Verma
was registered, the !Director, CBI, Shri Sen called
Shri A. P. Mukherjee, DIG, CBI, Delhi Branch and
called for the case papers.
7.141 After the recommendation regardings the
prosecution of Shri Verma had been the Direct?r
desired that the case should be exanuned once agam.
Thereafter, the DIG discussed the feasibility of
back the SP's report from the Railwciy Department.
A StJperintendent of Police was sent to the Railways
to contact Shri Prasad and Shri Dayal of the Railways
to retrieve the report but his attempts were unsuccess-
ful. .
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7.142 After they failed to retrieve the report from
the Railways, Shri Venna submitted a representation
some time in September, 1976, to Shri Sen with a
request that the case should be reconsidered. Shri Sen
then desired that the Delhi Branch should send the
COIIlIDents 00 the and these comments
should be sent to him through the Joint Director,
Shri A. B. Ch9udha1y. Shri. A. P. Mukherjee of
Delhi Branch sent his comments on the representa-
tion of Shri Verma. He was of the view that thei;e
was no substance in the representation. Shri A. P.
Mqkherjee had taken a courageous stand even at this
stage when he should have been in no doubt about
what . bis superior officer desired. Comments we.re
put up by the Delhi a'nd on Septembr:r 9,
1976, Shri Choudhary called the DIG to come and
see him with the case records.. This was accordingly
-------
done by- Sbri Mukherjee. The case was discussed .
and it was ultimately decided that a Junior Law
Officer should examine the representation and give
his views. Thereafter, the matter was sent to
8hri Jamuar, who gave his comments first finding that
there was no substance in the points raised by
Sbri Verma, and also that the representation. could
make no impact on the prosecution case in a court
of law. But he suggested that certain circumstances
might be relied upon by Shri Verma at the trial .and,
therefore, there was justification for reconsideration
of the It was mentioned by Shri Jamuar that
at the tlfile of the trap the independent witness, who
had seen the acceptance of the bribe and had over-
heard the conversation, was with. the CBI Inspector,
a.nd, therefore, Shri Verma could take the plea that
the independent eye-witness was under pressure cf
the police officer. He also suggested that at the time
of the search of Shri Verma, a pronote for Rs. 3 ,300
was recovered from his person and that
that Shd Verma may take a plea that the loanee had
returned a part of the amount through the decoy.
These contentions were . not .raised by any one any
time prior to the report made by Shri Janwar.
Shri Jamuar suggested that _the- evidence should be
evaluated through a -depifrtmcntal enquiry first t-0
know all probable explanations of the accused before
he was sent for trial. . Shri A. B. Choudhary agreed
with the comments or Shri J amuar and endorsed the
recommendation that the case should be sent for
dtpartmental action first.
7.143 On September 9, 1976, Shri Sen, the
Director, agreed with Shri Choudhary's suggestions
and orders were issued to the Delhi Branch for taking,
further necessary act.ion.
7.144 A fresh attempt was made by SP Delhi
Branch to retrieve the SP's reports from the Railways.
Th_e. Railway Authorities on receipt of the request in
wntmg handed over the SP's reports. Thereafter, a
was I?repared recommending departmental .
act10n agamst Sbn Verma and was sent to the Railway
Authorities.
7. 145 The circumstances of the case and the
evioence given by Shri Sen leave little room for doubt
that someone from the Prime Minister's household
Shri D. Sen and ask..!d him to so arrange
that Shn Verma was not prosecuted. Accordingly,
conlTary to the normal procedure, adopted in similar
cases, Shri D. Sen .himself .called for the papers,'
attempted thro.ugh his subordmates to retrieve reports
from the. Railways and having failed to do so
suggested a different line of action according to which
Sh!i Verma should be dealt with departmentally. The
evidence of Shri Mukherjee and the Vigilance Officer
o'f the Railways, in the light of the attempts made to
retrieve the report from the Rl1ilways leave little
room for de:mbt, that this was not a case in which,
according to the accepted procedure, departmental
inquiry should have been ordered. But it was
be.cause of pressure from above that Shri Verma was
not prosecuted and various steps were taken.
Mr. D. Sen was given a notice under rule 5(2) (a)
of the Rules and served with a summons under section
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8B o.f the Act He submitted a statement and also .
responded to. the summons. His statement of defence
has been taken into account.
7.146 It is__not--possible- to say as to who from
Prime Minister' s Secretariat or Household broi1ght
p1;essure upon Shri D. Sen and reminded him
subsequently. Shri D. Sen has stated that he met
Shri Verma in the . morning Dur bar at the house of
the Prime Minister, Smt. Indira Gandhi, and that
Shri Verma made a representation. Shri D. Sen
further stated that. because the representation was
rnade to him in the Prime Minister's house, he called
for the papers and recoi1sidcred the matter. He
further stated that if he did not do so, he might. have
been taken to task if the case hud failed in a court
of law. Shri D. Sett has also stated in his defence
that he had not finally closed the prosecut.ion of the
case. He had only suggested the testing of the
evidence .in a Departmental inquiry and if the evidence
stood the test of the Departmental inquiry, the
a.uthorities could always get back to the prosecution.
But on the evidence it is clear that at the instat:.ce of
some one from the :Prime Minister's house, Shri D.
Sen perverted th.e normal procedure and pressurised
his subordinate officers with a view to help Shri Verma
from being punished in a p1\'lsecntion for an offence
under section 161' of the Indian Penal Code and
5(2). read with section 5(1) (d) of the
Pnwention of Corruption Act. On the materials
colleded by the authorities, . there was little chance
of Shri Verma escaping conviction for the .offence of
receiving a bribe.
,7.147 It is, therefore, a clear case in which ..
perversion of the normal proct:ss by Shti D. Seu and
misuse of power is established.
11. Deviation from established procedure, Misi1se of
Power and Abuse of Authority by Shri T. R .'
Tuli, Chairman of the Punjab National Bank, in
allowing a clean overdraft to M/ s. Assodated
I ournafs Ltd.
"7.148 On the 22nd of March, 1976, the Parliament
Street Branch of the Punjab National Bank permitted
a clean overdraft o'f Rs. 8,30,000 to M/ s. Associated
Journals Limited, a company which carries on busi-
ness ma:nly as printers and publishers of newspapers.
The only short point for consideration in this case is
as .. J o whether 'this transaction was a 'normal one in the
ordinary' course of the Bank' s busi11ess or whether it
was entered into because of collateral considerations.
Several facts have been placed before the Commiss.ion
and arguments advanced in relation thereto which are
totally irrelevant and extraneous to the consideration
of this basic point and it is rtot, therefore, necessary
to .discuss them here.
7.149 Briefly, the undisputed facts are that early
in March 1976, Shri T. R. Tuli,, the then Chairman
and Managing Director of Punjab National Bank met
Shri P. C. Sethi, the then Minister for Chemicals and
Fertilisers at the Minister's residence at the latter's
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69
request. At this meeti'ug Shrj Tuli was asked by Shri
Sethi. to help Associated J oUrnals Limited by advanc-
ing money to them to enable them to take delivery of
certain items of imported machinery which had
arrived at Bombay and on which Associated Journals
hatl ro . pay a considerable sum of money by way of
customs duty and demurrage charges. Thereafter,
Colonel Zaidi, the then Chairman and
Managing Director of Associated Journals . Limited
and an Accountant of that Company met Shri T . .K.
Tull in Shri TuLi's office two or three times to explain
the requirements of Associated Journals and apparem-
ly also suggested that the sum of money to be itrune.!
diately advanced would be paid otl from a term loan
of Rs. 15 lak'hs to be advanced by the Bank to Asso-
ciated Journals against the security of the seco11d
mortgage of their building known as "Herald House"
on Bahadur Shah Zafar Marg, New Del\ii. Accord-
.ing to Shri Tuli's written statement dated October 22,
1977, after the discussions, in his office referred to
above, a formal request was made by Associated
Journals to the Parliament Street Branch of this Bank
on March 20, 1976, requesting for the grant of a
t emporary overdraft of Rs .. IO lakhs: Shri Tuli has
also added that he had given his verbal approval to
Shri L. D. Adlakha, Manager, Parliament Street
Branch, in this regard. In the course of his exami-
nation before the Conunission, Shri Tuti could not
state definitely when . this verbal approval to the tra1t-
section was given but he indicated that it must have
been on the 18th or the 19th of March, 1976.
7.150 Assotiated Journals Limited did uot have
an account in the Punjab National Bank till then
and they, therefore, opened a current account in the
Bank on the 20th and deposited a sum of Rs. 1, 70,000
in that account. On March 22, a cheque for
Rs. 10 lakhs was issued by the Punjab National Bank
to c.nable Associated Journals to have adequate funds
to pay the customs duty and the demurtage required t.o
clear the machinery at Bombay. Thus, the entire
transaction resulted in a net overdraft of Rs. 8,30,000
in favour of Associated Journals Limited. Thereafter,
there was correspondence; between the Parliament
Street Branch of the Bank and tlie debtor company with
a view, on the part of the Bank, to eJ?.suring that the
clean overdraft already permitted was properly secur-
e-d. It is seen that on t'he 21st April, 1976, Associar-
cd Journals wrote to the Punjab National Bank to the
effect that due to some technical difficulties, they were
not in a position to offer the "Herald House" as secu-
r ity and further that they arranging to repay the
.overdraft within a short period. It would appear that
thereafter Associated J our rials were making efforts to
raise the sums to repay the clean overdraft
from the Punjab National Bank by offedng "Herald
House" as a security by way of second 1hortgage to the
Svndicate Ba'nk and that for some reason or the other,
they did not in fact succeed i'n raising the requsite 'funds
and in repaying the Punjab Bank. It would
appear that upto now they have been able to repay
only a sum of Rs. 20,000 towards interest and that
well over a sum of Rs. l 0 lakhs by way of prlnGipal
a'nd interest is against Associated
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in the books of the Punjab Natipnal Bank. The ques-
tions for consideration are whether-
(a)
(b)
Mr. T. R. Tuli had himself taken the deci-
sion about allow,ing the clean overdraft, .or
whether he had only approved a tra11sact1on
negotiated and entered mto by the
Manager of the Parliament Street Branch,
a11d
If Shri Tuli had indeed permitted the over-
draft and had been responsible for the deci-
sioi1 in this regard, whether he had taken the
minimum necessary precautions th[lt a pm-
.dent officer of the Bank should have taken,
in order to the _interests o'f the
In the of his first testimony before the Com-'
in1ss1on on November 17, 1917, Shri Tuli was ask.:.ct
wneUler t.he loan. was grant<:d at his instance by the
Parliament Street Branch of Jtis .Bank, contrnry to nor-
mal loan granting practice louowcd by the .Bank, Shri
Tu.Ii repllcd that U1crc was a "reason" for dotng so. ;1s
he baa a1reacty stated in bis wntten statement wh1cn
had just been read out J the reason being Associated
Journals Lunited were in urg.mt need ot money and
fw.-ther that ultimately they were to get a term loan
against the mortgage of a building. ln response to a
further query as to whet'her he looked the balame
sheet of the company, he replied "No Sir, not at that
time". When asked why he did not look at the
balance sheet which was certa.inly his duty as a
Haiiker he replied "that was my omission". When
further' questioned as to w'hy he insisted
ing this sum of money without any secunty" which 1;.c
was required to take immediately, he. rephed that 1t
was just by looking at the urgent When
asked whether his aetion was .because a M1mster had
advised him to help the company, he l'eplied, "Yes Sir,
that is a big consideration for me". And
"naturally when a Minister says some consideration
has got to l>e given to that and that is the \hole
thing expedited".. The Comm1ss1on
Shri Tuli of a portion in his written statement whercm
he has stated that he had given his verbal approval to
Shri Adlakha and that since National Herald publish-
ed by Associatt.'\l Journals was connected the.n
Prime Minister it must 11ave weighed a "little ln his
min<;! to deal w'ith the case on a priority basis expedi-
tiously'.'. When Mr. TuLi was reniinded that it was
without any security, Shri Tuli replied "of course it
was without security".
, 7.151 Shri Sethi basically confirmed Shri T. R. Tuli's
version of their meeting and the only import<fnt point
that he made was that according to him this request
was that Associated Journals should be helped "with-
in the frame-work df the rules". He also added that
at the relevant time he had alsO. become the Treasurer
of the Congress and that he would say that he acted in
this case in his capacity as a Congressman.
7.1S2 Shri Tuli has filed a voluminous statement
in response to the notice under Rule 5(2)(a) of the
Commissions of Inquiry Rules, 1972, and responded
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to the summons u/ s 8B of the Act issued t_o him in
this case. It is not necessary to go into the state-
ment in detail except to point out tnat Shri Tuli has
sought to change the stand originally taken him
in ms written statement dated October 22, 197 7 and
hi:> oral testimony. before the Commission on Novem-
ber 17,19.77. Towards this objective, he has made
cenain unwarranted observations about the Comnus-
sion and its investigating officers wbich I propose to
ignore. The -main thrust of the statement is that
.snri L. D. Adlakha, the then Manager of the
nient Street Branch of the Bank ha<t been associaicd
with the representatives of Associated Journals ft<!m
the t'arlier stage and t!..iat in that the
had been negotiated and exammed by
put up to Shr.i Tuli for approval and that Shn Tuh
had merely given his oral approval ' thereto.
7.153 Shri Tuli's statement al this subsequent st<tgc
that Shri Adlakha was associatl.!LI in the earlier discus-
sions which he had with Col. Zaidi and other represen-
tatives of Assocmtcd Journals Limited does not appear
to be correct as tnere is no mention 11bout that m his
wntten statement dated October 22, 1977. Much
has b.:en sought to be. made out born in Shri Tuli 's
statement dated January 9, 1978 and the arguments
advanced by 11is Counsel that the entire correspun-
dence was with the Manager of the Parliament Street
Branch of Punjab National Bank and further that
even the internal communications in thy Bank refer-
red t6 that Branch as the one which had negotiated
and entered into the transaction. In this connec-
tion reference was made to a Jetter dated March 20,
1976, in which Associated Journa:s Limited mention-
ed that they would be grateful if the Bank could
kindly sanction them temporary overdraft of Rs. 10
lakhs. This is the very which is referred to by
Shri Tuli in his wiitten statement dated October 22,
1977 as the "formal request" after his discussions,
which he had had with Colonel Zaidi and the Accoun-
tant of Associated Journals Limited. It is further
seen that in another letter dated March 20, 1976,
address!!d by Associated Joutnals to the Punjab
National Bank they had referred to the proposal. as
.. principally agreed to by your Head Office authori-
ties". Similarly, in the Branch Manager's_Ietter dated
April 8, 1976, to the Head Office. he had made it
quite clear that they had, "at the Company's request
and under approval of our worthy Chairman" per'
fr1itted a clean overdraft of Rs. 8,30,000 on March 22,
1976. Shri Adlakha's statement in his affidavit
dated October 31, 1977, that Shri Tuli had directed
him to grant a clean overdraft of Rs. 8,30,000 . tn
Associated Journals Lim"ited 'has stood the test oI
cross-examination by Shri Tuli's Counsel. Even in
his testimony before the Commission on January 17,
l 978 in response to the summons under section 8B
or the Commissions of Inquiry Act, 1952, Shri Tuli
has confirmed the fact that the recommendatio1i made
by Shri Sethi and the request made by Col. Zaidi hr.cl
been taken into account in arriving at a decision in
this case, and faat the cumulative effect of .all these
factors had governed the approval of the loan. He.
had also conceded that there were e<X.tra-commercial
considerations "to some extent".
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7.15-4 On the basis of the evidence adduced, there
can bt.: no doubt that the decision to allow a temoo-
rary overdraft in this case without any securfry ;
albeit on the understanding which did not materialise .
that the security will be provided soon thereafter, \vas
solely that of Shri T. R. Tuli.
7.155 The. next question is as to wheH1er he had
exercised the care and caution expected of a prudenL
person entering into a transaction of this nature on
be'half of his employer. There w'ere several circutn-
tances in this case whieh should have put shri Tuli
on- bis guard:
(i) Associated Journals Limited did not have
an account with Punjab National Barik till
t-hen, whereas at that time they had four
Bankers including Sy'ndicate Bank, Unittd
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(ii)
. (iii)
, Commercial Bank and Vijaya Bank Ltd.
There is nothing on record to show that
Shri Tuli either on his own or through any
of his officers made any confidential en-
quiry from the other Banks to ascertain the
. credit-worthiness of the party. On the
other hand, the very fact that Associated
Journals Limited had to approach a Bank
with which they had no prior dealings i'ns-
tcad of one of theii: four already existing
Bankers was adequate enough reasqn to
suspect that not. evei'ything was well with
this proposal.
The machinery fa question had arrived rn
Bombay towards the end of October 1975,
and dernurrage was being accumulated af _
the rate of Rs. 4,000 per d<ly, it
reache.d well over Rs. 6 Iakhs by the time
!the Pu'n_jab Natibnal Barik was appro:ich-
cd. This also should have caused
concern to Shri Tuli as 'no prudent
nessman, unless he is in absolute distress
and unable to raise any funds, would allow
demurrage of this ntagnitude to add to
cost ofchis . capital '
Tn the course ciChis testimony, Shri Tuli
has confirmed that he had- not' at the rele-
vant time seen the balance sheet of the com-
pany or assessed its financial soundness. 1 n
fact, Shri Tuli has admilted that no cvalua-
tio'n report regarding Associated Journals,
nor their balance sheet, nor . any statement
of their assets and liabilities had been seen
by him, before '.he approved this proposnl.
Tt is also seen .from a report of the Centr<1l
fotclligcnce Section of the Credit
tration of Punjab National Bank that
Associated Journals Limited had incurred
heavy losses of about Rs. 10 lakhs per
' year in 1973-74, and 1974-75. that their
accumulated losses stood at Rs. 47.46 lakhs
against paid up capital of Rs. 51.64 lal<hs
ilng some tied up of Rs. 6.77 Jakhs.
71
Thus, according to the report, not only the
whole of the reserves and surpluses stobd
wiped off _but t'he paid up capital to the
extent of Rs. 40.69 lakhs also stood erod-
ed. The Company also ha4 substantial
liabilities both secured and unsecured.
These are matters which would have be-
come clear even on the basis of a cui:sorv
examination of the company's last balance
sheet and subsequent statements or books
of accounts. It is clear that no such exa-
mination was made or directed to be made
by Shri Tuli before he took the dedsion m
this case.
7.156 Shri Dang appearing on behalf of Shri Tuli
strenuously urged that to his knowledge the Associat-
ed Journals did own a building in Delhi known as
'Herald House' which was of considerable value and
that the ownership of this building considerably in-
fluenced Shri Tuli in gra'nting a dean overdraft with-
out insisting upon any security. It .appears that Asso-
ciated Journals did own the 'Herald House'. There
is no clear evidence before the Commission as t6 the
market value of the building at the date when the
transaction took place nor about the encumbrances if
any outstanding thereon and the other liabilities out-
standing on the date of the transaction. Whether the
bank may ultimately have been able to recover the
whole or part of the amount advanced by way of a
clean overdraft amount after litigation or otherwise
is for the purpose of this enquiry. The
1t appears was valued at cost and deprecia-
tion was deducted. The balance sheet did not dis-
close any ostensible assets out of which the amounts
advanced could be recovered. The ba'nk advaficing
.- funds on a clean overdraft would normally try to
ascertain the credit-worthiness of the borrower and
try to ensure whether the amount advanced would be
repaid oy the borrower on demand. This would be . .
the minimum precaution which a hflnker could take
he'f ore advancing even a small amount by way of
clean overdraft. In the present case, however no
precautio'ns w'hich would be normal in
money on clean ."i:.>verdraft att:ount were taken ;
solely because of the intervention of tlJe Minister
_ Shti P. C. Sethi Joan was advanced, disregarding the
carmons which would ordinarily govern the advancin"
of such a !oan. <:>
7.157 For these reasons, the Commission is firmly
of the view that Shri Tuli who had permitted the over-
draft and was responsible for the decision in this re-
gard had taken it without making the minimum neces-
sary exami'nation of the facts o-f the case and without
exercising a modicum of care or caution and that this
conduct on his part is attributable to the fact that he
was swayed by collateral considerations. Thus tllis
transaction was not a normal one in the ordinary
course of the Bank's business. The Commissibn is
of t'he view that Shri Tuli had subverted establisJ1ed
procedure in permitting this overdraft -without secu-
rity to M/s. Associated Journals Limited. He has
also i:nisused his powers and abuse_d his authbritv ht
so domg.
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ing facility by Way I Of operting of three foreiglt
Letters of Credit by the. Punjab National Bank
in favour of M/s. KRSMA Chemicals . Private
Limited.
7.158 On the 28th of Septe.rnber, 1976, the Parha-
inent Street Branch of the Punjab National Bank est:t-
blished three foreign letters of credit aggregating to
Rs. 9,30,000 without margin on behalf of M/s.
KRSMA Chemicals Private Limited (hereinafter ;e-
ferred to as the Company), for the import of certain
chemicals. It would appear that Shii S. P'. Mehta,
since deceased, one of the Directors of. the Company,
aP.proache<j. Shri T. R. Tuli, the then Chairman and
Managing Director of the Ba'nk, through the good
offices of one Shri Virender Kumar who was at the
relevant time an Additional Private Secretary .. to Shri
P. K. Mukherjee; the then Minister '.for Revenue and
Banking. According to Shri Tuli, Shri Kumar intro-
duced Shri S. P. Mehta as the father-in-law of Shri Sat
Mehta, who was a brother of Shri Om Mehta, the
then Minister of State for Home Affairs. Incidental-
ly, Shri Sat Mehta was one of the major shareholders
of this Company at the relevant time, holding nearly
fifty per cent of the shares.
7.159 In his statement dated November 14, 1977
Shri Tuli has added that :
, Kumar further requested me to get
. Foreign Letters of Credit opened without
, any margin on behalf of KRSMA Chemi-
cals Pvt. Ltd. as the Company was holding
import licence. Since the party was relat-
ed to Shri Om Mehta and was brought by
Shri Kumar, I asked the Regional Manager
Shri [)_ P. Nayyar, who incidentally happen-
ed to be at the Head Office, to get the need-
ful done expeditiously.
"I had no occasion to assess the financial sound-
ness of the Company or its Directors except
that the Directors were highly connected
and as per Shri Kumar, they were very well
experienced in the Ii'ne."
7.160 There'\lpon Shri D. P. Nayyar took Shri S. P.
Mehta and his companion to Shri K. N. Vali, Branch
Manager of the Parliament Street Branch of the Bank,
and informed Shri Vali that Shri Tuli had instr'ucted
him to take Shri Mehta and his companion to Shri Vali
and asked him to open three foreign letters of credit
without any margin on behalf of KRSMA Chemicals
P,vt. Ltd. At this stage, Shri S. (}>. Mehta handed over
to Shri Vali a letter 1rom the Company dated Septem-
ber 28, 1976 which, inter alia, stated that "as already
sanctioned by your Chairman we are enclosing here-
with three applications for opening letters of credit
by cable without margin". According to Shri Vali,
the letter along with the oral instructions of the
Chairman conveyed through Shri D. P. Nayyar consti-
tuted approval of the Head Office for the proposed
transaction. Shri S. S. Jolly, Manager of the Foreign
Exchange Depa1tment of the same Branch, who hap-
pened to be present in Shri Vali's room at the relevant
time, has added that Shri Nayyar had also instructed
72
him to ensure that no inconvenience was caused to
shri S. P. Mehta and that . the work was done
expeditiously.
7.161 The documents covering the imported goods
arrived in December 1976. The Company cleared one.
of these for a sum of about Rs. 1,60,000 but failed to
clear the other two documents about
Rs. 7,70,000. The Company pleaded to
retire them in view of the tight credit squeeze and
came forward with various proposals which they failed
to implement. The Bank was thus left with no option
but to take delivery of the goods to avoid further
demurrage etc. The total cost to the Bank including
customs duty and demurrage in respect of these two
documents amounted to Rs. 9.15 lakhs and according
to Shri Vali's statement, the Bank is likely to incur a
loss of Rs. 4.5 lakhs on the transaction after taking .
into account the prevailing prices of these chemicals
in the market. It would appear that the chemicals
were imported under an Actual Users Licence and that
the condition that goes with such a licence, namely,
that it can be sold only to an actual user would restrict
its marketability.
7. 162 The short point for consideration iii this
case is whether Shri Tuli' s decision to enter into this
transaction expeditiously and his directions in this
regard to the concemed officers was influenced solely
by his commercial judgment in relation to it or whether
it was in any way influenced by collateral
considerations .
7 .163 That Shri Tuli had taken the decision in this
regard on his own has not been disputed by him, even
in the statement dated January 13, 1978, filed by him
in response to the Notice under Rule 5 (2)(a) of the
Commissions of Inquiry (Central) Rules, 1972. Shri
Tuli has, however, sought Jo furnish certain reasons
for arriving at this decisfon and has also made an
attempt to blame some officer_s . fQr. certain alle-ged
procedural There is no need to consider
suc'h alleged irregularities, if they relate to events
subsequent to the date of tbe opening of. the letters of
credit because the vital point for consideration is to
examine whether normal established conventions .or
procedure had been followed before entering into the
transaction or in case they had not been followed, the
reasons for such departure from established conventions
and procedure.
7.164 In his written statement dated November 4;
J 977 Shri K. N. Vali has stated that the normal proce-
dure followed by the Punj ab National Bank in the case
of any prospective borrower is to take the loan applica-
tion in the prescribed form .accompanied by a statement
of assets and liabilities and previous experience on the
basis 9f which the proposal is appraised by the Branch
after ascertaining the credit-worthiness of the borrower
\ and 1!.1e viability of the proposal. He . has added that
unless the Bank is satisfied about .the credit-worrhiness
of the borrower and the viability of the project no
foreign letter of credit is opened wit.bout any margin.
According to him, all this procedure would take a
period of two to three weeks to get the proposal. com-
piled, processed and sa'nctioned by higher authorities
In H1e course of his oral testimony on November' 17,
1977, Shri Vali has stated that he did not make any
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pre-assessment of the proposal because he was under
mstr'Uctioos of his higher authorities. He has added
further that the Clear instruction that the letters of
credit were to be established "without margin" meant
that the pre-assessment required had been made by
such higher authorities and that they knew about the
party well enough to give such directions. In fact,
Shri Vali's assessment of the financial soundness of
the Company was made after the event and his com-
ments in relation thereto could not but have been
by the fact that the transaction had already
been made and had, therefore, to be justified. Nor
could he have ignored the fact that the Company had
. been strongly recommended to him by no less a person
than his owh Chairman and Managing Director.
73
Directors were highly connected and according to the
per"son who introduced him to them, they were well
experienced in the line. lfthe soundness of the prc;>-
posai as distinct from the financial soundness of the
party had been arrived at that stage by Shri Tuli, it is
most unlikely that he would have failed to mention it
at the earlier stages. In fact, in -his oral testimony
before the Commission on November 17, 1977, Shri
Tuli has stated that because of the fact that certain
rdativcs of a Minister of State concerned, the .
matter' was expedited and immediate action taken.
Herein lies the deviation from normal established
<lures. Normal established procedures in a case of
this type would have required the of various
and considerable preassesstnent of the
Paity's credit-worthiness and viability of the proposal.
These requirements were dispensed with because of the
urgency and the Chairman's direction to act
immediately.
7.167 .Und<l:r the circumstances, this is a clear
instance where the Chairman and Managing Director
of the Punjab National Mt. Tuli, took a decision
and gave directions for its implementation contrary to
the normal established procedures in such cases.
13. Concessions by Punjab National Bank in favor tr
of Ma.ruti Limited.
7 .165 In the course of his submissions, Shri Tuli's
Counsel referred to a letter dated 16th September,
1976 addressed by the . Company to the Chahman
of the Punjab National Bank. The original of the
letter was produced at the time of hearing and a photo-
stat copy thereof has been taken on record. It was
seen froin an endorsement on the letter that it was
received iri the Parliament Street Branch of the Bank
only at 3 p.m . . on the 27th of September, . In
this Jetter the Company had requested the Chairman
to issue instructions to the Greater Kailash Branch of
the Bank with whom the Company had already opened
an account, to issue the letter of credit without
by cable. In the course of .his in 7 .168 In 1971, Mam ti Ltd., a Company iricorpo-
to the summons u/s SB of the Comnussions of Inquiry rated under the Companies Act, 1956 had applied to
Act 1952 Shri tuli has stated that he had never seen the Punjab National Bank for certain cash credit aild
this' letter that it never came to him. It Was Shri other faci lities. From early 1972, the Bank allowed
Tuli's contention that the letter may have been receiyed certain facilities and by the time Shri T. R. Tuli took
his personal staff and forwarded by them to over as Chairman and Managing Director of the Bank
concerned Branch. There can qe no doubt that m in August 1975, the Company already a total
the normal course, a letter addressed to the Chairman facil.ity of Rs. 90 lakhs from the Bank sub1ect to
of the Punjab National Bank, _would have been receive.ct certain stipulations. Cash credit accounts of the
by him or his personal staff on his behalf. . In tlus priny with the :Bank started becoming irreg1.1lar from
ca.se, if the personal had. forwarded the letter to 1974 9nwards,. and the had been asking them
the concerned Branch, lt should be presumed that from tune to time to regularise the accounts. The
they would have sent it fo Branch referred t.6 . Bank h.ad als,o started c.harging, in with its
.. therein namely,. the Greater Ka1lash-Branch.. TI1ere JS", .. normal practice;' pen a! on the accounts to the
also saLisfactory explanation for the. gap or about extent to whi.ch they were in er.Jcess 6f the all<?wed
eleven days between the date of the the date limits.
on which it was received by the .Street
Branch of the Bank which is in the same bmldrng as
the Head Office. The Commission therefore, ?f
view that this letter was, in fact, received by Shn .1:uli
and was with him for some time until he took a decision
in r elation thereto on or around 27th September,) 976,
when he had it forwarded to the Branch. to which he
subsequently directed the r epresentatives . of the
Company.
7.166 In his writen statement. dated January 13,
t.9.78 referred to above, Shri Tuh has stated on
his further questioning, Shl'i. S. P. Mehta had
fo hitn that the raw materials by the import
licences were being imported by him . as an
user and that their market value .. much f11gher
than their imported value_. There is no.
this conversation with Shn S. P. Mehta either m Shn
Tu!Ps written statement dated 14, 1977 or
in his oral testimony before the Cotnm1ssion on. Novem-
ber 17, 1977. On the other hand, he has p<;>mted out
that he had no occasion to the financial
ness of the Company or its Directors except that ,be
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7.169 After protracted correspondence, Maruti Ltd.,
to the Punjab National Dank in Septembei 1976
stating that they had incurred heavy_Iosses and request-
ed the . Bank to waive the penal interest and also to
reduce the -I'ate of interest to the maximum extent
possible. In their tum, the Cotnpany agreed to regula-
rise the accounts by making a lump sum payment of
Rs. 5 lakhs and monthly remittances of the order of
Rs. 1 lakh. The then Assistant Gerteral Manager .
(Credit) of the Bank considered these proposals and
recommended to the Board that penal interest . of :.a
little over Rs. 67,000 already charged in the accounts
may be refunded and that it may be waived for the
future. He also recommended that the rate of interes.t
may be from 15!% to 14%. per This
recommendation was endorsed by his supenor officers
and was approved by the Board at its meeting held on
October 6, 1976.
7 .170 As the Company failed to keep up its commit-
ment regarding recurring payments for and from
A ril 1977, the refund of penpl was
cfncelled and the facility of concessional interest also
stood withdrawn.
74
7 .171 On the basis cf these facts, tJ1c qucRlion_ that
arises for consideration is whether Shn T. R. Tul1,
then CX1airman and Managing Direct.or of Pu111ab
National Banlc acted rightly in. and !ecom-
mending the proposals, for wa_1vmg of interest
and for reducing the rate of w.terest charged to the
party or whether he should have resorted to legal
procdedings a view to the Bank's ou.t-
standings. Shn T. R. Tul1 filed a statement- 111
response to the Notice under Rule 5(2)(a) _ o{
Commissions of Inquiry (Central) Rules, 19 72, and
has also appeared in respcnse to the summons u_ls
8B of the Commissions of Inquiry Act, 19 52.
7.172 When any Bank is faced with is
rally referred to as a 'sticky acc?unt', it either
nurse it back to health, inter alra, by makmg con-
cessions in the matter of interest, schedule of payments,
etc., or start legal proceedings on the basis. of the
. security on the basis of which advance would have been
. made. Often it is seen that Bank's interests are best
served by adopting the course of action as t.he
latter can land the Bank in needless litigation and
.would be resorted to only if all ether efforts fail. It
is, therefore, essentially a qucstkm of judgment.
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7.173. In view of "this and taking into accou'lit the
evidence adduced and the arguments advanced, tl:e
commission is of t{1e view that no subversion of admi:-
1iistrative procedures or misuc;e of power or abuse cf
authorit.y has' been established in this case.
14. Deviation froin t/1.e established procedure and
irregularities in the reconstitution of the Boards
of Air India and Indian Airlines Corporations.
7.174 The terms of the Boards of Air lndia and
Indian Airlines Corporation expired on August 31,
1976. Files relating to rec0nstitution of the two Boards
were submitted to the then Minister for Tourism and
Civil Aviation, Shri Raj Bahadur. He directed that
for the time being, the two Boards should be kept
functfoning, and the Ministry should recommend to
th'e approval of the Appointments Com!llittee of the
11ames for each Board, as suggested by him, and leave
the remaining members to be nominated later.
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7.175 Sbri N. K. Mubrji, Secretary in the Ministry,
accord!ngly, sent a proposal to the Establishment Offi-.
cer on January 7, 1976, requesting him to obtain
the approval of the Appointments Committee of the
Cabinet and for a long time no final decision was
couveyed to the Ministry in spite of several reminders.
On February 9, 1976, Shri N. S. Bhatnagar, tlle then
.Special Assistant in the Ministry qf Tourism and Civil
Aviation received a telephonic message from the Addi-
tional Private Secretarv :10 the Prime Minjster
R. K. Dhawan) suggesting to Shri Bhatnagar that
certain names should be recommended to the Appoint-
ments Committee of the Cabinet. as Members of the
.Boards of Directors of the two Corporations. Shri
Dhawan informed Shri N. S. Bhatmigar Hrnt those
names had been suggested by the then Prime
Smt. Indira Gandhi and f!-lrther stated Sim
Bhatnagar should not . mention to the
Secretary of Ministry, Shri N. K. At that
time the Mirustcr was _away-on-tour an.I Sh11 Dhawan
that" Bhatnagar send th.e
under his own signatures. Shn declined to
do so saying that he was to carry out the
suggestion and that recommendation the .
shoulu await the return. Shr_1
annoyed at what Shri Bhatnagar said. Shn
Bahadur returned to Headquarters . the _same evenm&
and was apprised of the . conve:sat1on bY.
Bhatnagar, which he had w1.th. Shr.1 Dhl\wan.
Bhatnagar also furnished to Snn RaJ tl\e hs!
of names which bad been dictated to hun bv Shn
Dhawan on telephone.
7.176. Shri Raj Baharlur, accordingly, sent a. fiesh
for of the two Boards directly
to the Prime M1mster on February 10, 1976, -1.mder
his own signature. . This fre-;h contained all
the names which were dictated by Shn R. K. iDhawan
to Shri Bhatnagar on telephone. The of the .
Prime Minister to the fresh proposal was received the
same evening i.e. on Febl'uary 10, 1976. The names
which were dictated to Shri Bhatnagar and inclucled
in the proposal of Shri Raj Bahadur were ult.imately
approved b)'. then Minister 1?,
1976, resultmg m certam changes. Shn RaJ Bah:idur s
proposal the names of Capt. Kapoor"
Regional Director, Calcutta, who was .Junior to S)m
V. Satyamurthy, who was then the Deputy Managmg
Director, for appointment as Director of the Indian
Airlines Corporation. The which were dropped
from the earlier proposal submitted by the Ministry
were Shri S. Y. Ranade, and Shri K. G. Appuswamy
from the Air India a'nd Shri S. Y. Ranade. and Shri
. V. Satyamurt.hy from Indian Airlines Board.
7.l 77 Air Chief Marshal P. C. Lal, who was the
Chairman and Managing Director of the Indian Air-
lines, was dissatisfied with the omissioll of the name
of Shri V. Satyamurthy. He made a representation
to the Minister Shri Raj Bahadi1r. He also submitted
a representation to the Prime Minister in this oebalf
and ultimately submittOO his resignation because his
suggestion for reconsideration was not accepted.
7.178 For appointments of the non-official Members
of the two Boards the Mintstry did not seek the advice
of the P.E.S.B. Also the Ministry did not consult
Chairman. of the two. Boards before finalisation of the
,moposals. The proposal for a reconstitution of the
two Boards was not sent to the Officer,
which is the normal procedure for seeking approval of
Appointments Committee of the Cabinet, and the pro-
posals were sent by the Minister directly to the Prime
Minister and her approval was obtained before the
Estab!ishment Officyr was requested to obtain. the for-
mal approval of the Appointments Committee. . This
- was done without consulting the Secretary of the
Ministry. The Department of Personnel and AClminis-
trative Reforms were not even aware of the develop-
ments of the case and though H1c proposal was sent
by Shri Raj Bahadur and had been approved by tl1e
Prime Minister on February 10, 1976, the Joint
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Secretary, Department of Personnel and Administrative
Reforms informed the Secretary, Ministry of Tourism
aud Civil Aviation through a D.O. Jetter dated Feb-
ruary 9/11, 1976, that it was understood from the
:Prime Minister's Secretariat that the Minister of TQur-
isin and Civil Aviation was rei.:onsidering the proposals
for the reconstitution of the Boards; and, therefore, no
action was being taken 6n the Secretary's
cation dated January 7, 1976.
7 .179 The approval of the names of the Directors
were notified on February 13; 1976. On the same
day the Establishment Officer was requested to obtain
formal approval of the Appointments Committee of
the Cabinet, m1ich was communicated by the Estab-
lishment Oilicer on February 27, 1976.
7.180 It appears from the evidence of Shri Raj
Bahadur that he was ti.ot a ftce agent in the matter
of making recommendations. He had submitted his
re.commendations on January . 1, 197;. .During his
absence his Special Assistant was directed to subri1it
a fresh list omitting certain names and adding certain
other names. Shri R. K. Dhawan, Additional Private
Secretary to the Prime Minister suggested that without
reference to .the .. Secretary' w- the Ministry, under his
own signatures Slui Bhatnagar may send 1.he list to
th,e ' then Prime Minister, bli-t Shri Bhatnagar declined
tc do so. When the Minister returned, he carried out
the suggestions which were made. Apparently, there
.was nothing against Shri. V. Satyamurthy, who was
dropped from the list of Directors. Jn protest against
the dropping of Shri V. Satyamurthy from the list, the
Chairman of the Indian Airlines Board, Afr Chief
Marshal P. C. Lal finding that he was unable to secure
'a1iy for Shri V. Satyarnurthy artd that
eyert his representations made to the Prime Minister
bad riot been considered, "Submitted his resignatfon.
. . .
7.181 It appears that Air . Chief Marshal P. C. Lal
. was subjected to police surveillance till he.left bis office . .
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7.182 Smt. Gandhi was se11ved with a notice under
rule S(2)(a) of the Coniriii;sions of Jriquiry Rules
and summons under section 8B of the Commissions of
Inquiry Act in connection with this case. She did
not file any statement and when she appeared before
t-he. Commission, she refused to make any statement
on . oath. Under the circumstances, therefore, the
Commission has no alternative but to draw a11 adverse
inference against her in view of the circumstances and
in the light of the evidence available on the record.
7 .183 In this case, it appears that the normal or
procedure in regard to the appointment
cf the Board of Directors was n6t followed and Minis-
ter Shri Raj Bahadur was practically compelled to fall
in line with the suggestions made by the then Prime
Minister, Smt. Gandhi, and it was only after the sugges-
titm inade by her was carried out that the lists sub-
mitted were approved.
7.184 In this case, as in ltlany other cases, the
instructions issued from the Prime Minister's oft.ice,
were oral and given by t-he Additional Private Secretary
to the Prime Minister. Though pursuant to these
Shri Bhatnagar hhmelf failed to act, as
75
desired by Shri Dhawan, the Minister complied with
these instructions on the lines suggested by Shri
Dhawan.
7 .185 The role of oral instructions in the transac-
tions of business of the Government needs to be de-
fined and definite guidelines set down. to the Com-
mission this seems imperative, not only in the .interest
of healthy administration, but :.Uso to protect the junior
functionaries acting on the oral instructions of the
seniors from the consequences of subsequent denials
by the seniors when things go wrong.
15. Decision process leading to the purchase oj three
Boeing 737 aircraft by Inditm Airlines.
7 .186 A special group was to study the
proposal for augmentation of capacity in the Iiidian
Airlines in May, 1976. The group was to study the
Various aspects dealing with operational. capabilities;
financial terms and economics of the aircraft available
in the market and recommend the most suitable air-
craft fleet composition and programme of inductiori
extending . over period from October, 1976 to
March, 1979. This Committee dealt with the various
technical details. airport constraints and fina11cial eva-
luation of the various types of aircraft. . W_hile certain
of the aircraft, such as, F-27 and BAC-111 were
subjected to proving flights on Indian Airlines selected
routes to study their operational pcrformal1ce figures,
Boeing 737 was considered on the basis of technical
data supplied by the manufacturt:r but without any
route t esting. The report of this . Committee was plac-
ed before the Indian . Airlines Board at its meeting
held on August 16, 1976, and it was decided_ that an
lnt.ctlinc Committee consisting of the Joint Sectetary
(Finance), Ministry of Tourism and Civil Aviation
and the Managing Directors of Air India and Indian
Airlines should study these proposals.
7.187 The Interline Committee had not finalised
- when on October 29, 1976, morning
. Shri P. N. Dhar, Secreta1y to the Prime Minis_ter spoke
h' Shri N. K. Mukarji, Secretary, Civil Aviation, on
phone. Shri N. K. Mukarji in his atlidavit given to .
the Commission has stated that Shri P. N .. Dhar had
conveyed to him that it was the Prime Minister's
impression that. the Ministry of Tourism and Civil
Aviation was obstructing the purchase of B6eh1g 737
aircraft hy T ncli im Airlines. Sbri. Mukarji wrote back
to the Secretary to the Prime Mii1istet the same day
indicating that there was no proposal about the pur-
chase of aircraft by Indian Airlines pending )With the
Ministry. However, the Board of Directors of Indian
Airlines had considered the matter and had referred
it to an Interline Committee for detailed examination
on August 16, 1976, which was yet to finalise its
views. Shri Mukarji also informed Shri P. N. Dhar
that the Minister had taken a meeting that .morning at
which it was decided to extend the deadline of the
Boeings offer from the end of October, 1976 to
December 31, 1976.
7.188 On the same day: i.e. oil October. 29, 1976,
Shri N. K. Mukarji, Civil _ Aviation a@
Tourism was senf' for by Raj Bahadur, the tmn
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Miister oi Civil Aviat[on, to attend a meeting, at
which were present already Shri A. H. Mehta, Acting
Chairman of Indian Aitlines and Shri Kirpal Chand,
Director (Finance) of Indian Airlines.
7.189 While the meeting was on, Shri Dhawan rang
up Shri Raj Bahadur and Shri Raj Bahadur was licnrd
to say:
"Yes, Dhawan Sahib, I nm going into lhe matter
with my officefS, who are with me."
'7.190 At this meeting Shri A. H. Mehta suggested
that a letter of intent should be placed on the .Boeing
Complllly thcil' latest olier expired on Novem-
ber 1, 1976 . . Pending the receipt of the recommenda-
tions . of the Interline Committee and final decision by
the Indian Airlines Board, the Indian Airlines Manage-
. ment sent a letter on October :?0, 1976 requesting for
permission to issue a of intent to the Boeing
Company in respect of purchase of three Boeing 737
aircraft. This letter was actually handed over to tbe
Se.cretary at a Meeting on October 30, 1976, and
after discussion it was agreed that the requisite letter
of intent could be issued, subject to the condition that
it did not involve any commitment for purchase of
aircraft. However, it also decided that tl;te other
manufacturers may also be approached and, if neces-
sary, similar letters of intent may also be issued to

7;191 A meeting appears to have taken place in the
secorid or third week of September, 1976, in the
of Sbri A. H. Mehta, .at which were present Shri
Kirpal Chand, Director, Indian Airlines, Capt. A. M.
Kapoor, Director of Operations and Shri Rajiv Gandhi
son of Smt. Indira Gandhi. There are conflicting
versions as to how Shri Rajiv Gandhi uappened to be
there in that meeting. Shri A. H. Mehta has stated
that Capt. Kapoor had rung him up and asked him
whether could come along and discuss certain tech-
nical and maintenance problems along with an A vro
' Commander and Shri Mehta agreed to meet him;
but when Capt. Kapoor came in, the Commander, who
had accoinpanied him, happ.ened to be Capt. Rajiv
Gandhi. Shri Kapoor however, stated that Shri
Rajiv Gandhi was already with Shri A. H. Mehta when
Shri Kapoor came into the room of Shri A H. Mehta,
Shri Kapoor also stated that at this meeting Shri Kirpal
Chand, [)irector (Finance), Indian Airlines had shown
Shri Gandhi the Financial projections. Actord-
ing to Shri Kirpal Chand be showed the financial pro-
jections to Shri Rajiv Gandhi at the instance of the
, Chairman, Shri A. H. Mehta. According to Shri
Mehta's statement he did not remember having given
any such directions to the Finance. Director to show
the financial projections to Shri Rajiv Garidhi. At this
meeting, according to Shri Mehta, Capt. Kapoor is
reported to have said that he did not understand why
there was so much delay in the progress of the case
dealing with the purchase of the Boeing aircraft, which,
according to &ll'i Kapur, were operationally nnd tech-
nically superior.
7.192 The Interline Committee made their
recommendations on November 3, 1976, recommending
the pl.!Xchase ot Boeing 737 aircraft. Shri Badal Roy,
76
who was Joint Secretary (Finance) in the Ministry of
Tourism and Civil Aviation and who was a member of
the Interline Committee, had, however, observed ;
"Indian Airlines should adopt a total systems
approach rather than an ad hoc interim
solution, which migl1t adversely uliccl llw
optimum long term solution, perhaps at heavy
cost."
7 .193 The Indian Airlines proposal for the purchase
of three Boeing 737 aircraft was sent to the Ministry
on November 20, 1976. The Airlines Board at its
meeting held on November 24, 1976, approved the .
action of the Management in seeking Gqvernment's
approval for purchase of the aircraft. Shri 0. P. Mehra,
Rt. Air Chief, however, opposed it on the ground that
it was not based on any system study. " . .
7.194 The proposal was received in the Planning
Commission on November 26, 1976. The Planning
Commission felt that "there was sufficient reason for
believing that the acquisition of B-737 may not be
appropriate and t'hat a decision should not be taken
without the completion of a system study".
7.195 Shri Niten Desai, Consultant in the Project
Appraisal Division of the Planning Commission, who
was examined by the Commission, stated that the sys-
tem study cquld have been complett<d in about two
months. Shri Desai had asked for a system study report
to be obtained at the meeting which he had attended in
the room of the Secretary Aviation, Shri N. K. Mukarji
on October 30, 1976. Apparently, the Indian Airlines
had not taken any steps pursuant to this b"f
Shri Desai.
7.196 The matter was referred to the Public Invest-
ment Board, whfch considered the proposal at its
meeting held on January 10, 1977, and January-13,
1977. The following important decisions were taken
by the P.I.B :-
(i) A system study be undertaken and c9mpleted
by the Indian Airlines by the end of
February, 1977;
(ii) If on the basis of an integrated study, it
transpired that a new proposal involving a
larger order of new aircraft emerged, the
advantage of bulk purchase could be
obtained;
(iii) Indian Airlines could approach the manufac-
turers to hold both their price and delivery
schedules using the leverage of possibly a
large order.
7.197 According to Shri Kirpal Chand, they were
all "upset at the decision of the P .I.B. to defer the
augmentation of capacity pending completion of the
Total System study". Shri Kirpal Chand saicl that after
the meeting when they. went to the office of 'the
Chairman, Shri A H. Mehta, Shri Mehta remarked that
"you tech"nocrats have not l:Jeel;l .able.to-get the aircraft
for me. Now I -will get them for you". Shri Mehta has
stated that imme\iia__tely on. his return from the P.I.B.
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meeting, he got a phone call from the Minister for
Tourism and Civil Aviation, Shri K. Raghuramaiah,
who was alinoyed over the postponement of the
decision to purchase the Boeing rurcratt". Shri Mehta
does not corroborate what Shri Kirpal Chand has said
x'egarding the. technocrats not being able to get the air-
craft, etc. He, admits that there was dis-
cussion between him, Shri Kirpal Chand and others ;
when he had said that the technical department had not
been able. to satisfy the Planning C9mmissfon.
. 7.198 Ever since Shri Raghuiamaiah took over :is
.Minister for Civil Aviation and Tourism on December
24, 1976, he was anxious that the case relatitig to the
p'urchase of aircraft by the Indian Airlines should be
processed urgently. :He had spoken to the Secretary
Shri N. K. Mukarji on more than one occasion. Shri
Ragh_uramaiah has also stated that shortly after he took
charge of the Ministry, during one of his visits to the
Prime Minister's house in connection with some Parlia-
mentary affairs matters, Shri Dhawan had told him that
the Boeing p!!_rc'hase case was pending a"nd was being
delayed in his Ministry. Shri Dhawan wanted him to
look it. Shri Raghuramaiah took Shri Dhawan's
reference to this subject as an order emanating from
the Prime Minister. In support of this Shri Raghura-
maiah .said that as the Minister Incharge of Parliamen-
ta.ry Affairs, he had obtamed the resignations of Shri
U:rna Shankar Dikshit, Shrl Swaran Singh and Shri
Raj Bahadur and a number of other Ministers. just
because Shri Dhawan told him to do so. He took
what Shri Dhawan had said as coming from the Prime
. Minister herself.
. 7.199 Shri N. K. Mukarji, Secretary, Aviation had
advised the Minister that the recommendations of the
P.tB. should be accepted with regard t.o the system
study, etc. However, the Minister overruled the Secre-
tary's advice and directed that the matter be immedia-
tely referred to the Cabinet purchase of
three Boeing-737 aircraft. .
7 .200 On February 8, 1977; the Minister called
Shri ,Kirpal Chand and told him that the proposal had,
been finally cleared. by the. Cabinet. The Minister also
instructed Shri A. S. Bhatnagar, Joint Secretary, Avia-
tion, to ensure that the formal approval was communi-
eated to the Corporation the same day and the contract
was signed immediately. The Ministry's sanction for
purchase of three Boeing-737 aircrafts at a total project
cost of Rs. 30.55 crores was issued to the Indian Air-
lines the same day i.e. February 8, 1977 ; and was
delivered to Shri Kirpal Chand by hand on the same
day. In the sanction it was mentioned, inter alia, that
the Indian Airlines should further rtegotiate with the
sellers and try to obtain the best possible terms for the
three aircraft. According to Shri C. L. Dhingra,
Deputy Secretary, Civil Aviation, t!le u1tention was to
associate Joint Secretary (Finance) in the Ministry
with the negotiating_ .. J3ven- before the Ministry
could inform Indian Airlfnes that the Joint Secretary
(Finance) would be the representative on the negotiat-
ing team, the Indian Airlines informed the Ministry
, that they had signed the contract with the company
on February 9, 1977 ;.V.e. a day after the issue of the
sanction and had obtained a further discou"nt of
77
$ 15,000 per aircraft. The Joint Secretary (Finance)
was, thus, not associated with the negotiations with the
Boeing Company.
7.201 Shri Raghuramaiah has stated that after the
meeting was ovei; on February" 5, 1977, at
which the decision to purchase the Boeing aircraft was
taken, the Prime Minister had told hitn about a report
that bad appeared in a Wal) Street Journal about some
deal with the Boeing Company. She had asked him to
wait before the order was placed ; and tbtee
days therefater she told him to "Go ahead. Place the
. order". Immediately after that he told his officers to
sign the contract.
7 .202 It would thus be apparent that the manner in
which this deal was pushed through sutiers from several
infirmities :
(i.) Even before the Interline Committee, which
was constituted by the Indian Airlines Board
to study the proposal in depth and the com-
parative merits of the available aircraft, had
submitted its report, the Indian . Airlines
Management sent a letter to the Ministry for
permission to issue a letter of intent to the
Boeing Company . .
(ii) The Indian -submitted its prnposal for .
purchase of the to the Miilistry on
November 20, 1976, and it wa,s only later on
November 24, 1976 that the Indian Airlines
Board the action of the Manage-
ment seeking the Government's approval for
purchase of the aircraft.
(iii) The Planning Coiilmission's representatives
had desired at the meeting held on October,
1976, that a system study should be under-
taken by the Indian Airlines, which was
capable of being within two
months. But no steps were taken to complete
this study,
'(fv) The P.I.B. categorically opposed the proposal .
pending the completion of the system study.
The Secretary' s to abide
by the P.I.B.'s recommendations wer-e turned
down by the Minister, Shri Raghurainaiah ;
apparently because he had been asked by
t Mr. Dhawan to look into the matter urgently
and Shti Raghuramaiah. took the suggestion
of Shri Dhawan as emanating from the Prime
Minister.
(v) According to the Finance Ministry, there was
no instance of an Administrative Ministry
going ahead with the proposal to the Cabinet
for a decision against the recommendations
of the P.I.B. This was done in this case.
(vi) The decision to sign the contract was given
on February 8, 1977. On February 9, 1977
the contract was signed. Actually, the deli-
very schedule limit given by the Boeing com-
paoy had expired on February 7.
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(vii) .The visit of Shri Rajiv Gandhi tci the office
_of The Chairman of the 1ndian Airlines, where
he was shown the financial projections by the
Director of Finance, apparently under the
instructions of the Chairman, was a pr.oce-
dure, which was totally outside the ordinary
course of business.
7.203 In the light of the foregoing, the Commission
feels that there has been a certain amounl of avoidable
ba.ste in rushing through the deal.
16. Df!temion of Smt. Gayatri Devi, Ex-Member of
.Parliu11u:111 wul LI. Cul. (Retired) Bfraww1i Sh1gh
under COFEPOSA Act, 1974.
7 .204 By. two sets of orders passed by the Central
Government on 24th July 1975, one bi:ing detention '
order under section 3 (I) and the other being declara-
tion. under section 12A(2) of the Conservatiori of
Foreign Exchange and Prevention of Smuggling Acti-
vities Act, 1974 (.hereinafter referred to as COFEPOSA
Act), Smt. Gayatri Devi and Lt. Col. Bhawani Singb
were arrested and lodged in Tihar Jail at Delhi on
30th July, 1975. Smt. Gayatri Devi is the wido\.\: of
late His Highness Maharaja Man Sihgh of Jaipur. Sile
was a Member of Parliament as a Swatantra M.P. when
she was arrested. Lt. Col. Bhawani Singh had been a
full-time service olticer in the Indian Army. He wa.s
recipient of Maha_vir Chakra for his gallantry
lll war wtth Pakistan. He voluntarily retired
from Army service in November 1974 on personal
grounds.
7.205 The Income Tax Department conducted some
searches under section 132 of the Income Tax Act,
1961 in the month of February 1975 at Jaipur and
Delhi residences of Smt. Gayatri Devi, Lt. Col. Bhawuni
Siugh, his brothers and in other connected cases.
During the course of these search opcnitions, gold, gold
ornaments, some foreign. currency including U.S.
Dollars and Travellers Cheques etc., were seized from
the residences of Smt. Gayatri Devi and Lt. Col. Bha-
wani Singh. A key of a locker in Rome of Shri
Bhawani Singh was also recovered.
7.206 After the :news regarding searches by the
Income Tax Department was known, there were ques
7
tions in both the Houses of Parliament in the month C'f
February and March 1975. Giving replies to viirious
points raised in the Lok Sabha and Rajya Sabha the
then Minister of Finance, Shri C. Subramaniam' and
Shri Pranab Kumar Mukherjee stated that enquiries in
matters were in progress. Shri Pranab Kumar
Mukherjee specifically stated ih Lok Sabha on 4th
Marc:h, 1975 that "no prosecution has yet been launch-
ed because we arc not in possession of 'full facts".
.7..207 Consequent to the revealed during .
income tax searches, various documents and
considered relevant from the point of view of viulation
of the provisions of Foreign Exchange Regulation Act
.were taken ppsscssion of by the Enforcement Directo-
rate of the Ministry of Finance from the Income Tax
Department and the said Directorate started makino
its enquiries. These two persons were issued
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by the Enforcement Directorate under 33 (2) of
q1e Foreign Exchange Regulation Act, 1973 for furnis!1-
i.ng information on the various pomts mentioned in
these directives. On requests being made, Smt. Gayatn
P evi was allowed time upto and Lt. Col.
Bhawani Singh upto 20th August, 1975 for makrng
necessary compliance to these directives.
7.208 Even before the time allowed to these two
individuals for complying with the directives issued had
expired; action to impound the passport of Smt.
Devi was initiated and an or<ter <Jated June 4, 1975
was passed . by the Ministry of External Affairs
pounding her passport. Also enquiries were made to
.tind out ways and means for their arrest under one
of the other provisions of the Acts administered. by the
Ministry of Finance.
7 .209 A meeting is reported to have taken place
in this connection in the .room of the then Minister ot
State, Shri Pra.nab Kumar Mukherjee on July 24, 1975
which was attended, amongst others, by Shri G. S.
SawJmey, Director General or Revenue In.teiligence and
Investigation. According to the statement ofShri G. S.
Sawhney, he was asked either by the Minister or some-
body else who was present in the meeting to find out
whl.)thcr any material which could be relevant for the
purpose of COFEPOSA Act was available against Smt.
Liayatri D.::vi and Col. B'hawani Singh. In bis subse-
quent .statement before the. <:;ommissioa, Shri Sawhncy
Juis stated that this meeting was some time before
lunch, the question that being. discussed in -the
meeting related to the- clet:ent\6-n of these two persons
and that it was imbued with a sense of urgency also.
He was thereafter told to provide the factual informa-
tion a:vailable with the Directorate to tbe Ministry.
Sawbz;iey has further stated Lhat in the meet.Ing
with the Mmister, he got the impression that the Mirus-
ter wanted the detentions to be made under
COFEPOSA Act and tha.t an order should be passed
under section 3 of the COFBPOSA Act.
. 7.210 Shri Sawhney accordingly contacted the
DJrector, Enforcement and later the Dy. Due.ctor, in
charge of the D;;:1hi Zone of the Enforcement Directo-
rate and asked the Dy, Director to come over to his
.office along with the material that was available against
th_e two persons. Accordingly Shri A. M. Siriha, by.
Director processed the material that was available with
him against both these persons in the room of S.h.ri
Sawhm.;y, prepared two sets of notes concerning these
two persons, showed these to his Director, Enforcement
Shri S. B.. Jain and passed these on ultimately to S:hri
Sawhney. While processing the material that was
available with the Deputy Director of Enforcement
against the two individuals, certain significant omissions
were :made in reproducing the information contained in
two letters which had been received from ' the
Reserve Bank of India in response to queries: made:by
the Directorate concerning these two per-
sons after mcome tax searches. The substance of the
omitted portions from the Reserve Bank's two letters
dated 6th March, 1975 and 5th July, 1975 was to the
effect :
(i) that the Reserve. Bank was aware of the fact
that the ex-ruler of Jaipur lrnd owned an
agricultural property and a flat in U,K. ; .
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(ii)
(iii)
that the Reserve Bank was informed and hall
due knowledge about the three trusts whrch
had been created in U.S.A., U.K. artcJ
Bahamas by the late ex-ruler Of Jaipur ;
the Reserve Bank had referred the matter to
the .Ministry of Finance, Department of 8co-
nomic _Affairs, Government of India, as . fm
back as 1969 through their D.O. letters Nos.
EC. CO. FAS. 135/ M(J-1)69 dated 31st
.July, 1969 to Shri Y. T. Shah and :EC. CO.
FAS. 71/12-72 dated 28th April, 1972 to
Shri K. Subramanian and that the Govern-
ment's reply to these two letters was still
awaited and the Government had not advised
the Reserve Bank what stand they should
take in. regard to these trusts.
These portions from the two letters of the Reserve
Bank,'if incorporated. in the material that was compiled
by the Deputy Director at the instance of the Director
. General of Revenue Intelligence and Investigation and
approved by the Director (Enforcement) would have
shown that as far as these two persons are concerned,
they had not made any concealment in regard to the
holdings of three trusts abroad and foreign property
owned by Lt. Col. Bhawani Singh.
7.2il Shri A. M. Sinha, Deputy has stated
in his statement before the Commission that these omis-
sions . were made probably at the instance of Shri
Sawhriey, DGRI & I who wanted only the devant
extracts of the letters and such.portions fro.in the RBI's
letters. as were mentioned to him were included bv him
in the- annexures to note July 24, 1975." Shi'i
has said that he had. o'nly told the Deputy
to process the material with reference to the
relevant extracts. According- to Shri Sawhney's sMe-
ment, 'relevant' does not mean that whatever is relevant
should be deleted. or whatever comes in their favour
should be deleted arid this he could not have meai1t.
The Commission vJeW:)c th).s omission with grave
concern.
. ,,7.212 According fo S1ui Sinha, when he was asked
".to prepare the material, he was not told by any: one
that the material was being compiled with a view to
detain, Smt. Gayatri Devi and Lt. Col. Bhawani Singh.
He came to know of their detention later lhrough the
television news. He has also stated that fn the fort-
nightly report for August he did not include these case.s
as. although these two persons were normally residing
in the Delhi Zone of the Enforcement Directorate,
proposals for their detention were not forwarded by
him. Director (Enforcement) Shri S. B. Jain has
also, :in his statement, .said that in these cases: the
detention orders were not initiated. by the Enforcement
Directorate. The DGRI&I Shri Sawhney has. also
stated that . he h.ad. never suggestecl detention. in. these
cases.: According to him, the briefs .prepared-by Shri
Sinha and handed. over to him did not amount to. any
propooafl6r detention under COFEPOSA Act but were .
pl'.epared and passed o:n to the Ministry of Finance in
order to give details of whatever information was ayail-
able in the Enforcement Directorate. When the atten-
tion of Shri Sawhney was drawn to some of the notings
79
in files of the Ministry of Finance where he was
referred to as 'sponsoring authority' for these deten-
tions, his reaction was that they had not initiated the
proposal for detention and reference .to him as 'spon-
soring authority' was certainly a terms to use.
7.213 The headings of the briefs prepared by Shri
Sinha and subsequently endorsed by Shri S. B. Jain,
Director, Enforcement and Shri. G. S. Sawhney,
DGRI&l also show that the notes contained informa-
tion in respect of 'suspected violations of foreign
exchange' and did not at all indicate that these were in
the nature of proposals to the Government for detaining,
these two persons urtder the COFEPOSA Act.
. 7 .214 According to Shri C. T. A. Pillai, Joint
Secretary, the subject of detaining Smt. Gayatrr Devi
and Lt. Col. Bhawani Singh was discussed in the room
of Shri . Pranab Kumar Mukherjee on 24-7-1975 on
the basis of a rough note with the Minister. When his
perso'nal opinion in this regard was asked for, he had
mentioned that on the basis o'f the available material
. it seemed to to be a marginal case. According to
Shri Pillai, from the frend of the conversation between
the Minister and the Finance Secretary, he got the im-
pression that the question of det(!ntion of these two
persons had already been considered and de_cided by
the Minister in consultation with the senior officials or
bis colleagues. He felt that he lmd been called in
merely to complete the formalities expeditiously.
7.215 Shri Pillai has further stated that in the meet-
ing, . the Minister had indicated that the Intelligence
. Bureau had reported that Smt. Gayatri Devi was
' already in or near Patna may skip the country.
He11ce, orders under section 3 ( 1) and declaration
under section 12A(2) should be issued straightaway.
-Shri Pillai thereafter prepdred. the proposals for the
detention and took these to the residence of Minister
of State, Shri Pranab Kumar Mukher_iee on the same
date. Shri Mukherjee passed the following order in
the case of Smt. Gayatri Devi : .
" I nm satisfied that Smt. Gayatri Devi should be
detained as ptopqsed. Ordered accordingly .
Declaration may also issue."
Similar orders were also passed in the case of Lt. Col.
Dhawani Singh.
7.216 It has been noticed that before taking a deci-
sion to detain these two perso'ns under the COFEPOSA
Act the Minister had explored the possibility of. their
arrest under the Customs and Gold Contt:ol Acts also.
Some gold also seized by the Income Tax Depart-
ment during the course of searches made by it. Shri
M. S. Mehta, the then Collector of Customs and Central
Excise at Delhi, who was consulted in this connection
by the Minister did not think that the material before.
him constituted a customs case.
7.217 In the process of executing the order, tbe
services of the Home Ministry were utilised. Shri
Narasimhan, Joint .Secretary, Home Ministry entrustod
the work to one Dy. S. P. of Delhi Police-Shri Harpal
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Singh. Though in the r according to Shri
C. T. IJ.. Pillai, the Minister is reported to have stated
that Intelligence Bureau has reported that Smt. Gayutri
Di:vi was already ijl. or near Patna and may skip the
country, Shri Narasimhan, it appears was never told
about this as he directed Shri Harpal Singh to proceed
to Jaipur (and not to Patna) to execute the orders of
detention. Shri Harpal Singh returned the following
day and reported that the concerned individuals were
not available in !aipur. It is not understood as to why
efforts were not made to send the officer for e}lecuting
the order to Patna if Smt. Gayatri Devi was in or near
Patna.
7.218 Eventually, the two persons were arrested on
30th of July in Delhi. No decision was taken at the
time of. the issue of orders about the Class in Jail
where these persons were to be lodged. A note dated
1-8-1975 by Shri P. C. Jain, Deputy in the
Ministry qf Finance in File No. 705/20/75-CUS. IX
shows that Shri the then Joint Secretary
. (IS) informed him that keeping her in ordinary Class
. might invite adverse critiCism and therefore the jail
authorities were asked to treat these persons as 'security
prisoners' and classified them accordi'ngly. Subsequent-
ly, orders were passed prescribing conditions of deten-
tion giving them 'A' Class in the Jail. It Is, howe\er,
pertinent fo mention that Smt. Gayatri Devi apd U.
Col. Bhawani Singh did _not get Class 'A' in jail as
there was no such class in male and Wards.
Smt. Qayatri Dev.i was lodged in a separate ro-')m
(OfficeRoom) in the compou'nd where other 'C'
Class prisoners were residing. Col. Bhawani Singh was
put in Class Ward and was given facilities o'f 'A'
Class prisoners in the matter of provision of fur'niture,
food etc.
1.219 In ordering the detention of these two persons
l,inder COFEPOSA Act, the processes and procedures
prescribed by the Ministry of Finance have not been
followed. In this connection the following matters need
to be mentioned:-
(i) Omission to referitheir cases to the Screening
Committee.-A $creening Committee was
formed at the. Centre consisting of
the represe'ntatives of the Ministry of
Finance (Department of Revenue , and
.Irisurance), Department o'f Personnel,
.Ministry of Law and Directorate Ge'neral o'f
Revenue Intelligence and Investigation. The
functions of this Committee were to advise
the Government Of the officer empowered for
issuii:ig detentions under section 3 ( 1) of the
COFEPOSA Act, 197 4 on the desirability of
detaining any particular person. The
dar<ls applied by this Committee, it appears
were quite strict. According to Shri Sawhney,
DGRI & I who was a Member of this Com-
mittee. "A good percentage of the propo!:als
that came before the Committee for detention
under COFEPOSA Act used to get rejected".
From the informatio'n obtained from the
Ministry of Finance and from the depo5ition
of witnesses before the Commission, it has
p.
80
been noticed that the departure from the
practice of referring cases- to
the Screening Committee at
the time of first detention was made in the
case of these two persons only. Their cases
. were not referred to such Committee even for
ex post facto approval by rotation (jf fil.es. In
reply to a question asked during the course
of evidence as to whether if these two cases
had been brought before the Screening Com-
mittee, the Screening Committee might have
considered the matter and came to a con-
clusion that this was not a case in whfo'h the
provisions of the COFEPOSA Act should bi:
enforced, the reply of Shri Sawhney was that
"this is quite possible". Shri PiIIai, Joilft Sec-
retary in the Ministry of Finance has ,stated
that he did not consider it necessary, to refer
the cases to the Screeni'ng Committee "s!rice
the Minister had already made up his .mind;
there was no need of Screening
opinion".
(ii) Issue of-Declaration under section 12A (2).-
Along with orders under section 3(1) a dec-
laration under section 12A(2) wa's : also
issued in their cases. The adverse eff{;ct to
which a person is to on 0'f
issue of a declaration under section 12A(2)
is that it no longer remains necessary to di_s-
close to the person the grounds on which the
orders have been made and to refer' such
cases to the Advisory Board, which at the
relevant time comprised of three Higb Court
Judges. In the case of these two persons. no
grounds were indicated as to why declarations
under section 12A(2) were necessary, :
(iii) Four monthly reviews under section 12A(2)
of the COFEPOSA Act.-Anothei :safe-
guard provided . ill the Act is that
in those cases where declarations have :been
. issued under section 12A(2), there would be
four monthly reviews to decide whether de-
tention of such persons continued to be
necessary for effectively dealing with: the
emergency. In the case of these two persons
such reviews were also made after "fou;
months but these seem to have been done in
a routine manner. Sbri C. T. A. Pillai's ex-
planation for suggesting continuance of such
detention on two occasions, when he " was
still looking after COFEPOSA work, is-. that
he did not consider it necessary to put up
detailed comments in this matter from hi-: side
"as the decision to detain these two persons
was taken by the Minister". :
(iv) Review in terms of guidelines issued the
fear 1976.-The cases of s:uch persoris
were also not reviewed in terms of
guidelines issued by the Government 'vide
Confidential Circular F. No. 671/46/76-
CUS. VIII dated 24th November, 1976. It
was stated in this circular
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. that . all the relevant material against the per-
son to be detained has to be carefully
assessed to ensure that detention are
based on grounds which are adequate and
that innocent persons are not victimised and
that past cases should also b.e examined and
recommended for review by the
detaining .authority.
7 .220 A very strij.cing feature concerning these
arrests seems to be the urgency with which the whok
matter was processed in the course of one day-i.e.
24th July 1975 itself. What exactly transpired on
24th July 1975 which necessitated such expeditious
action for issue of orders relating to arrest remains
unexplained because Shri Pranab Kmar Mukherjee
has not chosen to come before the Commission and
give '1
7 .221 After these t.wo persons were arrested and
lodged in Tihar Jail, they addressed two letters daled
22nd August, 1975, to Deputy Commissioner, Ddhi
Administration, Delhi, who forwa!'ded these to the
Ministry of Finance for necessary action. A request
was made in representations for release from
detention mai.nly on health grounds. It was also 'stated
in these representations that these persons had never
indulged iri any anti-national activities or smuggling
activities etc. It was also stated by Smt Gayatri Devi
whatever foreign exchange she was receiving
through trusts abroad was fully taxed by the Indian
Gpvernment and was regularly being declared by her
in Annual Wealth Tax and Income Tax Returns.
> 7.222 These representations were examined by ti1e
Joint Secretary, Shri C.-T. A- Pillai on 7,
1975 and.he recorded a note posing whether both these
perSO!JS should be temporarily released for a period of
eight weeks. The Finance Secretary, Dr. H. N. Ray,
endorsed the. note of the J9igt _$.e_cr.etar.y, Mr. Pillai, on
the .. s_ame da-y- with-th"e-- remarks that the note was
recorded by Mr. Pitlai in consultation with Mr. Ray_
TI.1er.eaftcr the file was mar1<ed to MRE, the then
Minister of Revenue and Expenditure, Mr. Pranab
Kumar . Mukherjee. Mr. Pranah Kumar Mukherjee
recorded -a uole on 7, 1975 which reads as
under:-
"May be released on parole as proposed. How-
ever P.M. may kirn.Hy like to sec."
7.223 Shri Mukherjee this note to P.M.
The Secret Movement Register maintained by the then
Personal Staff of the Minister of Revenue and Expendi-
ture, Shri Pranab Kumar Mukherjee, which has been
put up bfore the Commission, shows that the relevant
file bearing No. 686/100/75-CUS. VIJI/75 with the
notes : of Shri C.T .A Pillai and F.S. indicating the
subject "Representation from Smt. Gayatri Devi and
Shri Bhawani Singh" was marked to Shri Dhawan,
A.P.S. to P.M. on September 7, 1975 and was sent
in a sealed cover. What decision was taken by the
.Prime Minister in this tnatter is not indicated in "the
file, qut it has been noticed that Shri Pranab Kumar
M\lkherjee pasted his earlier note dated September 7,
1975 recommending release on parole. If the note
sheet page is put against bright light, the noting of
S/39 HA/77-12
81
Shri Pranab Kumar Mukherjee reproduced earlier can
be easily read. This file was put up the Com-
mission. Shri C.T.A. Pillai has also- stated in his
deposition that perhaps at the time of first parole, the
file had gone. to the P!'irnc Minister.
7 .224 After pasting his earlier note, Shri Mukherjee
recorded another note on September 12, 1975 wherein
he ordered the rejection of the request regarding the
revocation o'i the order of detention. Since Shri Pranab
Kumar Mukherjee has. not chosen to appear before the
Commission, and give evidence and explain the various
matters attributable to him, it can only be inferred that
his subsequent noting rejecting the request for
tion of the detention order may have been on the advice
of the P.M.
7.225 Subsequent to rejection of their request on
September 12, 1975, faese persons moved applications
for release on parole and the-se were accepted. Shd
Bhawani Singh was ordered to be released oil parole
on 1st November, 1975 and Smt. Gayatri Devi on 9th
January, 1976. It has, however, been noticed 1hat
Smt. Gayatri Devi, before her l'elease, addressed a
letter to the Prime Minister dated 11th December.
1975 from jail which reads as un.der :-
"As the International Women's Year is coming to
an end, may I take this opportunity to assure
you, Madam, all my support to you in pet'son
and . your programme in the interest and
hetterment of our country. May I also add
that I have decided to give up _politics ever
since Rajaji's demise and will not take any
f ul'the_r iute,rest in politics as the Swatantra .
Party has already defunct and I have -
not to join any political party.
In view of what I have stated aboye; as
well as my deteriorating health, in spite-of
the medical facilities allowed and provided
to me, may I request you for gracious con-
siderations that I may be rekascd. If there
arc any conditions which you want to impose,
I .will try to abide by."
This was forwa1'ded to the Prime Minister through Jail
Superintendent and District Magistrate, Delhi, on 16th
December, 1975. It has not been possible for the
Commission to trace this letter .from the Prime Minis-
ter's Secretariat and find out what orders were passed
by the then Prime Minister on the same.
j
7..226 Before het release on parole, the authorities
in the Ministry of Finance also seem to have insisted
that her request should be granted only if she is pre-
pared to withdraw her writ petition 'challenging her
detention etc.' pending before the Delhi High Court.
The note or the Joint Secretary, Shri Pillai, which was
approved by the Minister, Shri Pranab Kumar
Mukherjee dated January 8, 1976 on this matter reads
as below:-
"As M(RE) is aware, the detention of Smt.
Gayatri Devi has been challenged in wrlt
proceedings in the Delhi High Court. It is
only proper that if her request for temporary
release is acceded- to, we irisist on the writ
petition being withdrawn. On
enquiries I uhderstand that the
would be wi!Ilng to do so."
informal
petitioner
The duration of parole "was extended from time to time
on the conditions stipulated at the time of initial release.
These conditions envisaged residence withi11 the speci-
fied places, movement outside these places with the
consent of the concerned Collectors of Central Excise;.
and execution. of a bond with surety for a sum of
Rs. 50,000.
. 7.227 The matter relating to the revocation of
detention order finally came up before the Review
Committee of the Department of Revenue on March 14,
1977. Before putting up the matter to the Review
Committee, the comments of the then Director Enforce-
ment, Shri S. B. Jain, were called for. Though Shri
Jain had earlier stated that he is not concerned with
these detentions, at this time he made a p6sitive recom-
mendation stating that the detaining authority may like
t? the release of Shri Bhawani Singh for ihe
" time bemg and the case of Smt. Gayatri Devi could be
considered later on. The Committee considered the
nature of the prejudicial activities attributed to the
two persons and felt that a view could be taken for
revocation of both the detention orders but left the
matter for the decision of the Minister 'for Revenue and
Banking. Shri Pranab Kumar Mukherjee thereafter
passed the following order on March 19, 197!7 :-
. ''Initially Col. Bhawani Singh may be released
. and his activities kept under close watch and
the case of Smt. Gayatri Devi may be decided
after some time." .
Order .of release of Smt. Gayatri Devi was passed by
the Delhi Administration on 22nd March 1977 after
the revocation of the proclamation of emergency.
7.228 Tile IDCl:nner in which Smt. Gayatri Devi was
treated in the jail makes a very poignant reading. She
has narrated her experience in the jail before the
Commission. The Assistant Jail Superintendent has
also given a statement in this regard. She was not at
all . well when she was taken to the jail and was under
medical treatment at the time of her arrest. According
to f.he conditions in Tihar Jail were absolutely
appalling; there was complete lack of sanitation no
running water, the public latrines had failed and
fore all . the people who were in the prison had. to use
ct.ram to themselves. Rajmata Vijiya Raje
. Scmd1a of Gwahor was also brought to Tihar Jail
and was kept in a 'Phansi Kothi', (Cell for condemn-
ed. prisoners) for want of any other accommodation.
This cell happened to be next to the room where
Smt. Gayatri Devi was living. The treatment of the
women prisoners in the jail was not at all good. Even
the women prisoners who were pregnant were. not
treated properly so much so that one of ttie ladies
birth to a child in the .lavatory: Smt. Gayatri
Devi wrote a letter to the Prime Minister at the ins-
tance of her son Jai 5:i.ngh, who advised her that the
only way of getting out of the jail was to . write a
letter to the Prime Minister. She had lost 1 O Kgs
in weight and her blood pressure was very low.
1
.; ..... , .. . .
1:229 Shri .Pranab Kumar Mukherjee via6 issued
a notice under rule 5(2)(a) of the Commissions of
Inquiry Rules. He dedined to file a. statement as
required by the rules. . He was also served with a
summo11s under: section 8B of the Commissions of
Inquiries Act. He refused to gbe evidence on oath
in pursuance of the summons ii:suec.i under section 8B
of the Act.
7 .230 According to the guidelines issued by the
Finance Ministry, the COFEPOSA A<;t was, intended
applied for dealing with the cases of smuggl.ers,
f<;>re1gn exchange racketeers or such foreign exchange
violations. as were having a nexus with smuggling. It
was not mtended to be resorted to for dealing . with
minor infractions under the Foreign :Sxchange Regula-
tion Act. It i.s clear on the basis of evidence that
has been brought on record that these two persons
no nexus whatsoever either witb smuggling . or with
fo::eign exchange racketeering. G. S. Sawhney,
Dir.ector General of Revenue InteU1ge11ce and Investi-
gation has, during the course of his statement before
the Commission, given a categorical 'no' whef1 he was
asked t-0 state whether he had anv reason to believe
that these two belon.ged to "any organised gang
of There 1s notlung on record also to show
theu connection in any way with such activities. Thus
it is abundantly clear that in the cases of these two
persons, the provisions of the COFEPOSA Act were
not at . all applicable and these were resorted to to
give effect to a pre-determined decision to arrest these
two persons. At worst, these two persons may have
been guilty of infractions of the provisions of the
Foreign Exchange (Regulation) Act, for which pro-
ceedings were already in progress. Such infractions
under FERA are not to be dealt with by detentions
under the COFEPOSA Act, as was done in the cases
o.f .these tw<;i in utter disreg:1rd of the poli:
c1es and gu1delmes which had been laid down by the
Finance Ministry. . '
7.231 It is thus . deacon-the -basis of evidence that
has been brought on record that Mr. Pranab Kumar
then M:nister of and Banking
has misused his pos1t1on and abused fos authority in
ordering the detention of Smt. Gayatri Devi and Col.
Bhawani Singh on wholly insufficient grounds. It is
a clear case of subversion of lawful processes and of
administrative procedures.
17. Detention of Shri Rhim Sen Sachar and seven
others.
7.232 Shri Bhim Sen Sachar, aged 82, veteran free-
, clom fighter, and Ex-Governor Andhra Pradesh,
Ori5sa, Ex-High Commissioner of India in Sri Lanka
and Ex-Chief Minister, Punjab; and S/Shri Sewak
Ram, Chairman, Branch of the Servants of the
People Society; Vishnu Datt, Executive' Secretary, Citi-
zens for Democracy; K. K. Sinha, Advocate, Supreme
Court; S. D. Sharma of Indian Service Mission; J . K.
Sharma, Head of the Philosophy Department, Hans
Raj College, Delhi University; Krishan Lal Vaid, Sar-
vodaya Worker; and J. R. Sahni of Adhyatama
Sadhna Kendra, aU around or above 60, had iointly
addressed an open letter dated July 23, to
Smt. Indira Gandhi, the then Prime Minister of India.
Some extracts from that letter are as follows :
(2) "We are amongst the very humble of your
fellow countrymen, just ordinary citizens in-
terested chiefly in constructive work, none
of belonging to any political party. We
have no political axe to grind nor are we
interested in any political office or power.
Our chief interest is in upholding the freedom
and dignity of the individual."
(3) "We regard }Jandit Jawaharlal Nehru as one
. of the Principal architects of Indian demo-
cracy. He used to say ' No one, however
great he may be, should be above criticism'.
It was he who had said about the freedom
of the press :-
'To my mind, the freedom of the press is not
just a slogan from the larger point of view
but it is an essential :ittribute of the demo-
cratic process. I have no doubt that even
if , the Government dislikes the liberties
taken by the press and considers them
dangerous, it is wrong to interfere with
the freedom of the press. By imposing
restriction you do not change anything;
you merely suppress the public manifes-
:ation of certain thereby causing the
idea and thought underlying them 1-0 spread
further . . Therefore, I would ratner have
a completely free Press with all the dan-
gers involved in the wrong use of that
'freedom than a suppressed or regulated
press.'
It was he who gave the memorable slogan
when the British came do.wn heavily upon
us in the. freedom struggle : 'Freedom is in
peril, defend it with all your might'. We
sorrowfully remember him for, had been
alive today, we have no doubt that he would
have given the slogan :- 'Democracy is in
peril; defend with all your might'."
.(6)
: (7)
"We do not, we repeat, challenge your
to arm yourself with additional powers even
when ample powers are with you already
for dealing wiM! offenders against law; what,
however, we fail to is denial
of normal opportunities to- the people-to
all the people-to discuss openly the merits
and demetits of Government measures. Our
democracy is not yet out of the woods and
many are bound to feel puzzled over what
meets their eye."
" .. . . . . . . . . . . . . . It would be an outrage on
parliamentary democracy if even 'our Par-
liament's proceedings cannot be published
without pre-censorship: .. .. ,, ............ "
(8) " . .. .... . ....... We hope with_ all our heart
that the arrested mei;nbers 9f Parliament will
not be deprived of the opportunity to have
S/39 HA/77-13
83
their say in the current session of Parliament.
Was it really necessary . to withhold . from
the public even the names of the political
leaders and workers you have arrested and
to deny facilities to their near and dear ones
to meet them and arrange their legal defem::e,
if any such defence is at all possible in the
midst of present ordinances . ...... .. .. ........ "
(9) "Apart from your political supporters, the
common people of Delhi now talk in hushed
tones as they do in communist societies; they
do not discuss politi.:s in the coffee house
or at the bus stand and look over their
shoulders before expressing any opinion. An
atmosphere of fear and political repression
prevails and politically conscious citizens
differing from your viewpoint prefer to ob-
serve a discrete silence, with some of
afraid of the mid-night knock on their door."
( 10) "Must the monster of fear devour us again,
the monster for the annihiiation of which out
beloved leader Pandit Jawaharlal Nehru had .
sacrificed his all--(1is riches, his comforts,
his parents and even the dearest deity of his
heart. He held fear to be enemy No. 1 of
India's destiny. ft is well to- seek fresh ins-
piration from his ; memorable words >:-
'The great gift for an individual or a Nation,
so we have been told . in our ancient
books, was Abhaya (fearlessness), not
. b9_dily_ ,l::>ut of
.fear from the mind. Janaka Yaina.:.
valka had said, at the dawn of our
that it was the functinn of the leaders of
a people to make them fearless. But the
dominant impulse in India under Br!tish
rule was t-hat of fear-perverse, oppressing,
stranglrng fear; fear of th<: army, the police,
the widespread secret service; fear of law
meant to suppress. It was against. this
all pervading fear that Gandhi's quiet and
determined voice was raised :
'Be not afraid'."
( 11) "The present situation looks every citizen
in the face enquiringly and the old surviving
freedom fighters in particulars. We must
respond to the call. Accordingly, we prO:.
pose, with effect from August 9, 1975 and .
regardless of consequences to ourselves, to
advocate openly the right of public speech
and public association and . freedom of the
Press, for discussing the- merits and demerits
of the Government arming itself with extra-
. ordinary powers. The intention is not to
embarrass authority or to cause any unneces-
sary stir. Our self-suffering will just be an
offering at the feet of the Mother-
land, in the breaking of . whose chains we
had been to play our small part
inspired--by the mighty lead of the Father of
the Nation."
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7.234 This letter was received in the P.M's Secre-
tariat and is available in their file. According to the
affidavit of Mr. S. D. Sharma and depositions of
S/Shri Sewak Ram and K. K. Sinha, this letter was
delivered at the then Prime Minister's House on July
24, 1975. Shri Bhardwaj, a life member of the
Servants of People Society stated before the Corpmis-
sion that he himself had delivered this letter at the
P.M's hous.e on July 24, 1975 and obtained . an
acknowledgement qated July 24, 1975 which was pro-
duced before the Commission. Shri Bhardwaj, when
. asked. as to whom the letter was delivered, replied
"I think to Mr. Dhawan" but actually it had been
acknowledged by one Mr. M. N. Sharma,. who was
the P.A. in tne Prime Minister's Establishment. Shri
Sharma identified his signatures and confirmed that he
had received the copy of the letter and signed the
receipt on the day on which the lett.er was handed
over to him. It is seen from the letter that it was
diarised in the office of" the Secretarv to the Prime
Minister. From the alterations made in the date
and diary number of this letter, clearly visible in g1e
letter, it appears that an attempt was made to make
the date appear as 28th instead of the original 24th
so as to show that the letter w:!s received after these
persons had been detained.
7.235 According to Shri Sushi! Kum'ar, the then
D.M., Delhi he had received .a phone call from Shri
Dhawa:n around 2.30 p.m. on July 24 or 25, 1975,
to go over to the P.M's house. Immediately after his
arrival at the P .M' s house. he was also joined
by SbrVBhinder, the then D.I.G. Shri Dhawan. told
Shri Sushil Kumar and Shri Bhinder that it lfad been
decided that Shri Bhim Sen Sachar and seven other.s
had to be arrested under MISA. The relevant ex-
tract from the deposition: of Shri Sushi! Kt.1mar is
reproducect below :-
"Chairman : Were the ol,her names given to you?
Witness: No, Sir, No Sir. Only Mr. Bhirn Sen
Sachar's name was mentioned and seven
others. I asked as to what exactly had
happened. Then I think it was Mr. Bhinder
who probably mentioned that some commu-
nication had been circulated to the Prime
Minister. 'this about all that was mention-
ed and the decision has been take'n that these
people should be arrested under MISA
Chairman: Decision taken by whom?
l .. .. .
Witness : By the frhne Minister, Sir .. : ...... "
7.236 While talks amorlg these three were going on,
Shri Sanjay Gandhi walked in and Shri Dhawan told
him what he had been telling Shri Sushil Kumar and
Shri B!tinder. Accqrding to Sfiri Sushi! Kumar, the
manner in which Shri Sanjay Gandhi reacted to what
Shri Dhawan told him in hie presence of Shri Sushil
Kumar and Shri Bhinder ab<;mt the directions for the
arrest of Shri Bhim Sen Sachar and seven others, give
him the impression that Sliri Sanjay Gandhi knew. that.
such a decisio'n bad been taken. Shri SushiI Kumar
told Shri Dhawan that the latter would have to talk to
Shri Krishan Chand, L.G. to obtain his clearance for
8 4
the arrest of these persons. Sbri Dhawan said that he
would talk to the L.G. Shri Sushi! Kumar
that Shri Dhawan had assured him that the police
authorities would take care of the material required for
the detentions to be furnished to the AD.Ms to ena-
ble the AD.Ms to issue MISA warrants. There-
after Shri Sushi! Kumar went to L.G. The L.G. told
him that he had been informed by S'bri Dhawan
the arrests under MISA be made, and that Shri
Sushil Kumar should co:.
1
.vey this decisi<;m to the
AD.Ms Shri Sushil Kumar thereafter told the
A.D.Ms that as soon as the request came from the
police authorities for detention of Shri Sachar and
seven others, it should be complied wi_th. . .
7.237 Shri Krishan Chand, in his deposition before
the Commission, has stated that he had received a
call on RAX telephone from Shri Dhawan on July
25. Shri Dhawa:n told him that the Prime Minister
had directed that Shri Bhim Sen Sachar and others
should be arrested and tht h.e had communicateq the
oiders to foe D.M., Delhi. Shri Sushil KulJlar had
also told him that he was called to the P.M' s: .house
and was told by Shri Dhawan that these persons had
to be arrested because they had written Jetter
. against the Emergency. To the query made by the
Commission whether it was correct for the Commis-
sion to understand that directions for the arrests under
MJSA were passed by some o"ne and the . District
Magistrate carried but these orders "through the Addi-
tional District Magistrates, who were merely stamp-
ing authorities putting down their signa.tiJres, Shri
Kri$han Chand said that that was exactly what
happened in this particular case. Shri Krishan
Chand pleaded that his mind did not function on the
propriety regarding these arrests, since the Qrders
were communicated to him and to the D.C. in
the name of the Prime Minister. Shri Krishari Chand
r.nid that was absolute.ly certain that the P.M. her-
self had passed orders for the arrest of these persons
because lie felt that such eminent persons could not
he detained witfa;ml her sanction.
7.238 Accordingly, . Shri P.. Ghosh; the then
AD.M. (South) issued the detention orders . under
MISA in respect of five of the eight persons, nanil!ly,
S/Shri Sewak Ram, S. o. Sharma, J . K. Sharma,
Vishnu Datt and K. K. Sinha. In his written state-
. ment given to the Cotnmission, Shri Ghosh has said
that the detention orders were on the specific
directions of the D.M., who had stated that it was
the wish of the Prime Mi'nister. In his deposition
Shri Ghosh has said that the detention orders were
iss.ued even before receipt of the material from
the police. Actually, the material was received by
the AD.M. after the warrants had been . issued but
was sent pre-dated by the police. Therefore, there
was no question of any satisfaction by the detaining
authority on the material placed before him. This
A.D.M. in his deposition also state<J that in a large
number of cases of detentions under MISA in Delhi
the ma:ter1al on the basis .of which detentions were
made, was received subsequent to the issuance ol'
the warrants of detentions ; and, such as, there was
no question of of the detaining authority
as contemplated in section 3 of the Act.
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7 .239 .Smt. Meenakshi Dutta Ghosh, who had issu-
ed the detention order against Shri Bhim Sen Sachar
has also stated in her. written statement to the C,om-
mission that the order was issued on the specific direc-
tions of the D.M., Delhi who had stated that 'it was
the. P.M's wish. She has also stated that the grout.ids
for ' t)le detention of Shri Sachar were received after
the warrant had been issued and were set pre-dated
by the police. She admitted that she had not applied
her mind to the grounds. Shri S. L. Arora and Shri
Ashok Pradhan who had issued detention orders
against Shri J. K. Sharma and Shri Krishan Lal Vaid
respectively have also stated that these detention
orders were issued under the directions of the D.M.,
l)elhi, who told them that a decision to detain these
persons under MISA had been taken. All the
AD.Ms. have frankly stated that there was no. ques-
tion of their feeling satisfied about the grounds of
detentions.
7.240 The Commission has observed that the prac-
tice of. issuing warrants of arrest, first and obtaining
the pre-dated grounds of detentions thereafter had
become the general pattern sg far as the detentions of
persons under MISA in Delhi during emergency were
concerned.
7.241 Shri Bhinder, as usual, has totally denied his
presence in t'.be Priine Minister's house, as stated by
Shri Sushil Kumar. However, Shri Prakash Singh,
the then S.P. (North) has deposed before the Com-
miss:o'n that .!Je. for the deten-
tiorr -o-C%ri J . K. Sharma, one of the signatories of
the Jetter after Shri Bhinder -had -ordered him to this
. effect on telephone and also communicated to hirn the
name, address and grounds for the detention of Shri .
J. K. Sharma. According to Shri Prakash Singh,
Shri Bhinder had also told him that decision in this
regard was taken at a higher level.
7.242 The grounds of detention compiled by the
police against all these eight persons and furnished to
the AD.Ms. show that except in the case of Shri
Krishan Lal Vaid the grounds were drafted almost
entirely from the open letter addressed by these per-
sons to Smt. Ga'n(ihi by distorting t'he thoughts set
out il'l the letter. Reports on the activities of these
persons received from the C.I.D., Special Branch,
Delhi Police, revealed no worthwfiile material in res-
pect of these persons which could be interpreted as
prejudicial to the securit.y : of the State and
justify detention of any of these. persons under MISA.
tt is clear that these persons were detained for having
written an open letter to the then Prime Minister
though the contents of the letter oy themselves do not
85
. constitute adequate enough grounds to warrant their
detention under MISA. These detention orders were
executed on 25/26th of' July and all of them except
Shri Krisha'n Lal Vaid were transferred to the Central
Jail, Ambala on the 26th of July, 1975, which added
hardships to the family members of the detenues in
1he sense that their family members could not avail
of the facilities of weekly interviews with the detemies .
without incurring considerable expenditure and under- ,
going strains of journeys. The Lt'. Governor,
confirmed the detention otders i'n respect of Shn
J. K Sharma on the . 30th of July, 1975, Shri Krishan
Lal Vaid on 1st August, 1975 and Shri Bhiin Sen
Sachar an.d others on 3rd August, 1975.
7.243 The wife of Mr. Bhim Sen Sachar filed a
writ petition in the High Court of Delhi on the 6th
August, 1975 challenging the detention of her husband ..
The detention orders against Mr. Bhim Sen Sachar were
revoked by the Lt. Governor on 31st August, 1975,
. one day before the date fixed for hearing in the High
iCourt of the writ petition filed by the wife of Shri
Bhim Sen Sachar. The detention orders in respect
(JI Shri Sewak Ram were also revoked on 31!.t
1975.
7 .244 It is not understood why the remaining six
detf,nues, all of whom were arrested along with Shri
Sachar and Shri Sewak Ram were not released along
with these two. Shri Krishan Chand has stated in
thi!; ponnection that in all matters relating to these
detc.>ntions, viz., issuance of detention orders, confir-
mation and release, he was acting under the
tions of the then P .M. and if it had been on his own
volition, he would have released the remaining six
detenues also when M/ s. Bhim Sen Sachar and Sewak
Ram were released. Shri Vis"hnu Datt . suffered a
severe heart attack on 14th July, 1975 a'nd in view of
his serious condition the detention orders against him
were also revoked by the Lt. Governor on September
16, 1975. Shri Krishan Lal Vaid, Shri K. K. Sinha,
Shri J. R. Sahni, Shri J. K. Sharma and Shri S. D.
Sharma suffered dete'ntion till 2nd of April; 1976.
'Their cases were reviewed mechanically during this
period at the time of four-monthly reviews and the
Lt. Governor affirmed their detention every
time. On 2nd of April, 1976; the Lt. Governor
approved the proposal to revoke the detention orders
against the remaining five persons,
7.245 ' The story ot detention of Shri Bhim Sen
Sachar and seven others provides a classic example
of the misuse of the provisio11s of MISA. The manner
in which the police and the Magistrates went about
compiling grounds and issuing the detention orders,
should be a warning to any Government against giv-
ing such and arbitrary powers in the hands of
authorities without providing effective and compell-
ing safeguards against their possible misuse. This
and similar cases which have come to the notice of
the Commission reveal an undesirable trend in the
admi'nistration of the Maintenance of Internal Secu-
rity Act in the sense that when, as in this' case, the
Prime Minister felt satisfied about the detention of
certain persons, of getting . the orders issued
by the Central Government, small functionaries like
the Additional Distr'ict Magistrates were directed to
issue the warrants without they themselves being satis-.
fied either about the need for detentions of the indi-
viduals concerned or the adequacy of grounds for
their detention.
7.246 A notice under rule 5(2)(a) of the Com-
missions o'f Inquiry Rules and a summons unqer_ sec-
tion SB of the Commissions of Inquiry AC.t were issu-
ed to Mrs. Gandhi a'nd Mr. R. K. Dhawan in ttiis
case. Smt. Gandhi did not respond to the notice.
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:When she, however, turned .up in response to the
$Ummons under Section 8B, she refused to take the
oath and tender evidence. Shri R. K. Dhawan res-
ponded to the summons und.er section 8B and led
evidence. Sbri Dhawan has stated that at about 1.30
or 2.00 p.m. on the day of the arrest of Sbri Bhim
Sen Sachar, Shri Sushi! Kumar had gone to him and
told him that they, thvreby meani"ng L.G. and the
detaining authorities, had taken a decision to detain
8 persons including Shri Bhim Sen Sachar because
. "the C.I.D. had intercepted sonie letter written by
Shri .Shim Se'n Sachar and they had apprehension that
this will serve some sort of a think in Delhi and they
wanted to arrest all the persons". The L.G. wanted
this to be brought to the notice of the Prime Minister
and ascertained whether she wanted any distinction
to be made in the case of Shri Blum Sen Sai:hi.r or
not. .According to Shri Dhawan he had consulted
the Prime Minister and conveyed to Shri Sushi]
Kumar her reaction that it was a matter for the L.G.
and the Delhi Aoministration to decide and that she
. had nothing to do with it. In reply to a specific
query from the Commission, $hri Dhawan stated that
the P.M. did hot express any surprise about the con-
tents of the letter. The relevant extract from the
deposition of Shri Dhawan on this point is reproduced
below:-
"Chairman : (Towards Mr. Dhawan) Now, did
. vou come to know when Mr. Sushi! Kumar
came to. you. Did you know that a letti:r
. was addressed by Mr. Bhim Sen Sachar and
seven others to the Prime Minister, before
that date?
Witness: No, I did not know.
Chairman: Before that time?
Witn-:ss: No, I did not come to know.
Chairman: Did the Prime Minister know about
such a . letter having been '?
Witness: When I mentioned it to her that this
is ......... She said that is for the Delhi Ad-
ministration, so I did not ask her.
. Chairman: I just want to know. Did she ex-
press any surprise about the contents of the
letter of what the letter was about. What
was written in that letter ..... .
Witness: No, she did not tell anything.
Chairman: So, from that it appeared that a
letter had been received.
Wirness: Yes.".
7.247 Shri Dhawan also confirmed that he h2d also
spoken to the L.G. when the L.G. had rung up in
some connection and told him that the D.C had gone
to Shri "Dhawan fn this connection and the. P.M. had
said is none for me to decide. It is for Delhi
Adm1mstrat1on to decide".
The tendered by Shri Dhawan is not
convmcmg. There 1s conclusive evidence to show
that the letter was delivered at the PM's house on Julv
24. 1975, by Shri BhardwaJ, a Life Member of
86
Servants of the People Society. There had been un
effort made to tamper with the date and diary. num-
ber of the letter so as to make it appear that the (late
of receipt was 28th and not 24th. Shri Dhaw(!n
taken the defence that the detention was a sequel to
a copy of the said letter com,ing to the not ice. of t'he
Delhi Administration through interception. This_
theory is also not tenable. It is difficult to believe
that the letter coming to the notice of the authorities
through interception on July 25 could have led to such
prompt action by way of detention under MISA on
25th itself against Shri Sachar and six others and oo
the 26th. morning against the remaining one. This
interception theory which has evidently been thought
of as a foil against any possible criticism against the
then Prime Minister, stands completely demolished
'from the replies to the questions put to Shri Sus'hil
Kumar and Shri Krishan Chand by the counsel for
the Commission in this connection. Shri Krishan
Chand has said that he had come to know for the .first
time when Shri Dhawan telephoned him that ti:e then
Prime Minister had directed that. Shri Bhim Sen
Sachar and others should be arrested and that prior
to that .moment of time, no so-called foterception of
this letter had ever come to i1is notice. Shri Sushil
Kumar has also confirmed that prior to his meeting
with Shri Dhawan, he did not know. of the existence
of any letter written by t_hese persons to the the11 Prime
Minister.
7.249 There is yet one more infirmity in the theory
(Jf this interception. The Commission in the course
of examining the Superintendent of Police,. C.l. D.,
Shri K. S. Bajwa, brought out that on the day the
copy of the letter was purported to haye been inter-
cepted, the C.I.D. did not enjoy any authority to
intercept letter. However, an order was pass-
ed by the Government on August 4, 1975, with re-
trospective effect covering the period from July J,
1975, onwards.
7.250 In the light of the evidence brought on
record, the Commission feels that the decision to
detain Shri Bhim Sen Sachar and seve:n others was
taken by Smt. Gandhi which she got to
the authorities in Ddhi Administration through Shri
Dhawan. The only fault of these eight gentlemen
app.ears to have been the open Jetter that they had
addressed to Smt. GaQ.dhi. Prima 'facie the con-
tents of the letter do not warrant the authors ot the
letter to be detained under _ .. MISA. Stilt. - rndira
Gandhi has abused her position and misused her
power in ordering the arrest of Shri Bhim Sen Sachar
and seven others.
18. Improprieties committed in regard to Shri Mangal
Behari, lAS of Rajasthan Cadre; and termina-
tion of the services of Smt. Chandrawati
Sharm:a, Assistant Teacher.
7.251 On August 20, 1975, the Chief Secretary,
Ra_jasthan, initiated the following actions :-
(a) A top secret d.o . . Ietter No. 5993/ CS/ J,
dated August 20, 1975 was addressed to
District Magistrate, Jaipur, desiring that
Shri S. N. Advocate, be detained
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uo:der MISA on certain grounds mentioned
ther.ein;
(b) A top secret note w.as sent to the Education
Commissioner to the effect that the Univer-
sity may be to terminate . the services
. Smt. Sharma, because on
information received, the Government was
satisfied that she was an active follower of
Anand Marg and her continuance in service
was not desirable i'ri the interest of the Uni-
versity or of the public;
(c) A top secret d.o. letter dated August 20,
1975 was addressed to the Inspector-Gene-
ral of Police, Rajasthan for initiating inquiry
into the conduct o.f Shri Gaur, Additional
Superinte'ndent o1 Police, Jaipur;
(d) Shri Mangat Behari, IAS, the then Mem-
ber, Board of Revenue, Rajasthan, was told
on 20th August, 1975 to apply for leave.
7.252 Pursuant to the d.o. letter of the Chief Sec-
retary dated August 20, 1975, the District Magistrate.,
Jaipur, detained Shri S. N. Sharma, under MISA on
the same day. The detention. orders were confirmed
by the State Government with the approval of the
.Chief Minister subsequently.
. 7.253 On receipt of the top secret Note concerning
Smt. Chandrawati Sharma, the Education Commis-
sioner:, sent instructions to the Joint Director
(Women), Jaipur-Ajmer Range, through a letter
dated August 23, 1975 :-
"On ' the basis of information received the
Government is satisfied that Smt. Chandra
Shanna w/o Shri S. N. Sharma,
. Advocate, * * * who is working as
Assistant Teacher, in Maharaja Girls Higher
Secondary School, .Jaipur is actively
associated with an organisation dedared
illegal and her in servic;e is not
desirable in public interest.
"You are, therefore, requested to terminate her
services forthwith, under intimation to .. the
undersigned."
On August 23, 1975, the Joint Director, accordingly
terminated the services of Smt. Cha'ndrawati Sharma
with immediate effect and informed all concerned, in-
cludfog the Education Commissioner in that behalf.
7.254 Pursuant to a letter dated August 20, 1975
addressed to the Inspector General of Police, Rajas-
than, inquiry was conducted a,gainst Shri R. N. Gaur.
A report was received from tlle Inspector-General of
Police on September 3, 1975 exonerating hirn.
7.255 Shri Mangal Behari was also asked on the
20th of August, 1975 by t]le Chief Secretary to go on
leave.
7.256 All this actio'n simultaneously taken against
three public servants and Shri S. N. Sharma Advocate,
was because of an intimation received from Shri R. K.
Dhawan, Additional Private Secretary to the then
S/39 HA/77-14
87
Prime Minister of India earlie.r in the morning of
that day on phone.
7.257 Shri Harideo Joshi, the then Chief Minister
of Rajasthan has deposed that he received a . tele-
phonic message on August 20, 1975 from Shri R. K.
Dhawan, Additional Private Secretary to the then
Prime Minister .and that he conveyed certain infor-
mation. He stated that he recorded the information
conveyed to him in Hindi on a slip of paper and,
thereafter, he recorded the note 'in English, after
discussion with his officers, to the following effcct:--:-
"Shri R. K. Dhawan, Private Secretary to the
Prime Minister rang me up to convey the
following:-
1. Shri S. N. Sharma, Advocate, 74-Sarojini
Marg, Jaipur, .is reported to have burnt
records relating to his and wife's
activities as fbllowers of Anand Marg,
Shri R. N. Addl. S.P., in spite of
being informed about the burning_ of re-
cords, did not reach in tJme and allowed
the records to be burnt. It was desired
that Shri S. N. Sharma should be detain-
ed under MISA.
2. His wife Shrimati Chandra Sharma, Lec-
turer in Maharani's College, Jaipur,
should be removed from service.
'.3. An e'nquiry should be conducted immedia-
tely 'in the conduct of Shri Gaur.
2. It was also desired that Shri Mangal Behari
IAS should also be relieved from service.
. "Please take necessary action.
Sd: Hariqco Joshi
20-8-75.
Chief Minister, Rajasthan."
7.258 After Shri Hatideo Joshi, then Chief Minister
commu.nicated , the information .,received froi:n Pelhl
to the Chief Secretary, an order of detention was
passed againsL Shri S. N. Sharma under MISA on
August 20, 1975. Shri G. Ramachandra, the then
Collector and District Magistrate, Jaipur, has stated
that from the letter of the Chief Secretary it was ''very
clear that 'no discretion was left with me in not arrest-
ing Shi:i S. N. Sharma. In spite of this order, before
passing the order of detention, I had before me the
report from District Superintendent of Police, Jaipur ....
requesting his detention unde1 MISA. Before
ing the order of detention, this report was also in my
view."
7 .259 There was, it appears, evidence before the
District Magistrate, received through proper channels,
that Shri S. N. Sharma had joined Anand Marg in
1963 and had since then been regularly on
the lines of Anand Marg, and that he had been widely
advocating for the Anand Marg when the Govern-
ment of India had banned that . organisation; and
hence his activities.had posed a threat to the internal
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security . . of the .. country. Tl1e Station House.
also recommended the detention of Shri S. N. Sharma
under MISA on the above grounds. The report,
which originated from the Police: Station on August 20,
1975 reached the District Magistrate through two
intermediaries on the same day. The d.o. letter ,of
the Chief Secretary addressed to the District Magistrate
desiring detention of Shri S. N. Sharma under Ml SA
also reached the D.M. on August 20, 197 5. Shri
R .. K. Dhawau's instructions to the Chief Minister
were also received on August 20, 1975.
7.260 The proceedings for detention do djsclose an
extraordinary cxpeditfon in the implcmc1itatiou o[
the order received from Delhi through the local chan-
nels. An Qrder intimated by the Additional Private
Secretary of the Prime Minister to the Chief Minister
. and communicated by the Chief Minister to the Chief
Secretary was implemented on the same day. Since,
however, there was evidence before the authorities on
which action under MISA couM be taken, the Com-
mission did not find that there was any evidence to
establish that there was misuse of power or abuse of
authority in the arrest and detention of Shri S. N.
Sharma. It may, however, be observed that the
action for arrest and detention of Shri S. N. Sharma
. under MlSA was directed from Delhi by the Addition-
al Private Secretary speaking on behalf of the Prime
Minister Smt. Gandhi on the 20th of August, l
... on phone to the Chief Minister. Jt was cornmunica-
. ted to the Chief Secretary on the same day and the
official .machinery went into immediate action and the
order was implemented and the arrest and detention
of Shri S. N. Sharma were effected on the very same
day. In coming to the conclusion that there is no
proof of abuse of authority or c1f power in
the arrest and detention of Shri S. N. Sharma, the
Commission is impressed by the circumstances that
on August 14, 1975, the Joint Secretary in the Ministry
of Home Affairs, New Delhi, had forwarded the name
of certain persons who were active in the Anand Marg
Organisation, which was a hanned organisation in the
State of Raiasthan and it was recom1m:nded that
efforts should be made . to arrest those persons who
were still at large. The name of Shri S. N. Sharma
was included in the list sent by the Ministry of Home
Affairs.
7 .261 Smt. Chandrawati Sharma was an employee
of the Education Department in the Girls School at
Jaipur. Her name was not included in the list ot
Anand Margis furnished by the Ministry of Home
Affairs. It appears, however, that the Home Com-
missioner of the State Government of Rajasthan had
'addressed a_ d.o; letter to the Inspector General of
Police on August 19, 1975, for his .comments on the
list dated August 14, 1975 received from the Ministry
of Home Affairs. The Inspector General of Police
sent a reply to the Home Commissioner giving prog-
ress report of arrests of activities of banned
tions and this report also does not refer to Smt. Sharma.
Action was taken against ,Smt. Sharma, therefore. not
at the instance. of.. the Home Commissioner: but onlv
on the instmctions received from the Chief Secretary
by the Joint Director (Women) Jaipur. The instruc-
tions for termination of the of Smt. Sharma
clearly emanated from the Chief Minister, who had
88
received. Qrder.s . ..in tb.a.t : .ShrL R. K.
Dhawan. The records of the State Government show
that Smt. Chandr'awati Sharma. sought interview with
the Education Commissioner on more than one occa-
sion after the termination of her -services and tried to
impress upon him verbally as well as
representations that she had been made a v1ct11n
personal animosity between her husband and the1t
landlord, Shri B. B. Gupta. She also produced a
Jetter from Shri B. B. Gupta, the landlord, in support
of her contention. The Education Commissioner
brought this matter to the notice of the Chief
Secretary.
7 .262 Smt. Chandrawati Sharma has stated before
the Commission that she felt that Kumari Pushpa
Khanna who lived with Professor B. B. Gupta and
was "connected" wjth him may havehad a hand in
complai"ning against .. her-- at - ure Centre through one
Shri P. N. Katju who also lives in their locality and
who is on visiti:1g terms with Smt. Gandhi . Kumari
Pushpa Khanna is also quite close to Shri P. N. Katju.
7 .263 Smt. Chandrawati Sharma has also stated
before the Commission that she had two meetings
with the Chief Minister at which she handed over
representations made by her. She was, hoWl"!ver,
told by the Chief Minister that there was nothing
against her in the state and that he had acted onl y. on
the directions received from Delhi and that if she
desired to obtain any redress she must approach
the authorities in Delhi.
7.264 As observed earlier, . the name of Smt.
Chandrawati Sharma did not appear in the list of
activists uf the Anand Marg sent by . the Ministry of
Home Affairs to the State Government nor had the
State Government any record with regard to her
activities as an Anand Margi. Smt. Chandrawati
Sharma was an employee in the Education Depart-
ment of the Government of Rajasthan and was ac-
cordingly a public servant. She was entitled to the
protection of Article 311 of the Constitution of
India. She could not be dismissed or removetl: from
service except after an enquiry in which -she had :hr.en
informed of the t:harges against her and given i:eason-
opportunity of being heard in respect of those
charges. Tt is true that enquiry may be dispenl)ed with
in certain .exceptional classes of cases falling within
(a), (b) and (c) of the proviso to Article 311(2) of
the Constitution but no action to dispense with an
enquiry appears to have been taken . . This discloses
a clear cas_e of abuse of authority and misuse of pow-
er contrary. to the provisions of the constitution. Srnt.
Chalidrawati Sharma was entitled to the Constitutional
protect.ion_ hut in defiance of the provision her services
were terminated without holding any inquiry and with-
out dispensin!! with the . holding of an enquiry as per-
mitted by the Constitutional provisions. The termination
of employment of Smt. Chandrawnti Sharma was -ex-
facie unauthorised and carried out onlv on account of
the directions received by the Chief Minister from Shri
R. K. Dhawan.
7.265 As observed earlier, an inquiry was held
agai!1st. Shri .R. N. Gaur and he was of any
remissness m the performance of his dutiei: . The

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intii:nation, was. .. from Shri . PY . the
Chief Minister for sspending Shri Gaur immediately.
This , . intimation , was _ l_ater by
Shri Dhawan when Shri, Joshi back, Shri. Dhawan
p.ccqrding to .the , story of. Shri lfarideo Joshi, and it,
was suggested .that,_instead of suspending Gaur
,immediately an" i11quix:y . should be m(,lde into the
.concluct Qf Sbri Gai; , pt\rs,n!'lnt this intimat ion
Shd Jos,hi .. recqrded in his note, whiCh has
. beeu out .. eadjex:,, .,tqat . an enqqii:y should be
conducted
. 7 .266 Shri Behari is a member of the
, Indian Administrative .. Service. He. was formerly
Chairman of the Rajasthan State Electricity Eoard.
He was transferred from that office on the 30th of
June, 1975 to the office of the Revenue Board
: at .Ajmer and on August 20, 1975 he was directed by
.the .Chief Minister t-0 go on .leave. Shri Mangal
, Bebari made ; sever!il , representations, both to .
Chief Minister and also to the Ministry of Home"
'Affairs and to the Prime Minister's Secretariat but to
no ava,il. Ultimately, '. he was reposted on December
:15; "197,6. : The file. in' which the recommendation
was .made that he should be reposted remajned in the
: .. Prime Ministei:'s Secretariat. for a period of ten months
.between the 3rJ of February, '-1976 to 8th of
Dc:cember; 1976; and even when an order was made
(or reposting him, Smt. Ganiihi made a note on
8, 19.'.]6 i9 effect;..,--
. .. . .. . . ... . .
, "Yes. , :But' an:' eye_ should be kept on him
:- time to. timt._ ,
:s<l ! indira Garldhi" ..
Accordirig1y; the ' forriiaf -dliclslon was com1nunicated .
. to the State. Govei:iiment on December 15 ,.197 6 and
.' Slid Mangal Be)lad was. t<;> resume,
.. . ; . . .... - . . . .
.. 7.267 .Accorcling to S!i.fi _M;mgUl Bebari, was
.till' 1'$>7 l' a m,ei:D.ber. of A11and M:ai:g, but solely
concerned, with ,side o,f that organisation.
He :further had severed all connections
"with that institution, thereafter. but . he had been
victimised because he' had declined to make available
the. ' Electiicify: Uoard free of charge for
carcyin2 qf . lhe .. Elect.deity Uoard to Delhi
to in a rally, tO be held on June 20, 1975
a.f Boat Cl!-11? to J solidarit>: and supi:>o!t
fo. the Pnme Smt. lnd1ra Gandhi in
the" wake .of the _High , .Court Judgment.
. - . 4 . . . . -
, 7.468 .. According to the evidence of Shri Rajendr:a
, Jain .. tlie then sectetafy, RSEB on or' about' June 17,
:-1975 he was called by the then Transport Minister,
Shri Mohan Chhangani at his who asked him
'to arrange for sending 5,000 persons from the State
Elecfricity _Board to the rally being organised in Delhi
m support. of the , then Prime . Minister Smt. Iridira
Gandhi, and that the persons who had tO go' to Delhi
to participate in the rally were to be arranged by. the
Electricity. Boar!! and , arrai1gernem for .their .transport
tcr ;Delfii' arid -back- had to be made by the Electricity
Board. Shri . Rajendra Jain informed the Minister
.that it impossible ()n , the part of ?f
. the Electrjcity to_ ask the persons m
, Ele.ctricity Boarq to go to Delhi _also.
that it was difficult for tne ElectricitJ Board to supply
i(S OWO for these persons to pen;
He was lliformed that a decision bad been taken at
the . level and that the Chief , was in
Delhi and he had deputed the Transport Mm1ster to
organise_, the. rally in Rajasthan and that, he _was
. _at the behest of tI:te
J:n . has, . that
, Chairman, Shri Mangal Behan had to_ld him that fl:e
. also 'was 'being pressurised to arrange the conveyance
to Delhi arid back of at least those persons, who were
working in the State Electricity Board.
. . . . . . - .
.. 7 .. 269. Shri Mangal Behari has said in his deposition
that, he had gone and met the Chief Secretary and
. told . him : "How can this order be complied with ?"
As advised by the Chief Secretary, when he later met
the . Chief . Minister, the C.M. was "very brief
and very curt" and said that "You do not recognise
Chairman, Shri Mangal Behari had told him that he
C.M . . to. meet the Power Minister.
7 .270 - Ultiinately it was arranged that a request
should 'be made by the General Secretary of the Trade
Union that trucks of Rajasthan_State Electricity Board
be made available for enabling the workmen to attend
. the General Ho<;ly meeting. of the Workers' Federation
at New Delhi as also participate in the rally at the
l3oat Club on' June 20, 1975 jn support. of Smt. lndir11
Gaiidhi. Accordingly, a request was received . in
writing and passed on to the Chief Engineer with
the instructions by the Chairman on the basis of which
he issued an order placing certain number of _trucks
at tltC. disposal of the" Union on. certai.D. e:onditions.
This is supported by the evidence of Shri Damodar
Maurya, who stated that on June 16; 1975,
Shri Harideo Joshi, Chief Minister, Rajasthaq. had
invited. him to a meet-ing of number of persons
including himself at !Delhi and had informed that a
grand nationai rally was going to be organised on
, June 20, 1975, in which the State of Rajasthanshould
send near about 1 lakh, persons and that Shri Harideo
Joshi had assured that every transport arrangement .
shall be made through ".the Government. : The
arrangement for carrying : the . employees _of the
Rajasthan Electricity Board was to be made 'by the
Electricity Board and the were to join the
rally-'-the workinen-befog g\ven the special paid
, 7.271 Before sending the employees to ihe
. at Delhi, a meeting was held at the residence. of
Sp.ri Mohan Chhangani, Transport- Minister, according
to Shri Maurya,. on June 18, 1975, in which the
Chie1 Secretary of the Government of Rajasthan,
along with Shri Rajendra Jain, Secretary of the
State Electricity Board were present. The
Transport Minister said. at that meeting that the ucks
V.c.iuld ,be arranged by the Rajasthan State Electricify
Board requesting for, s11pply of trucks for carrying
workers to Delhi to attend the General Body meeting
of"the and , to participate in the Boat Club
rally at _Delhi ,on June. 20; 1975 . . . 0.ri "receipt of- an
intimation from the Rajasthan State Electricity Boai-d
regarding allotment of 58 trucks on payment basis
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subject to cex'tam"" conditions he approached the
iheil Trarisport .Minister . and to comply -with
any 6f th.e terms set out by tbe Board, .as this was
iigauist . the assura_rice given by the Chief Minister at
Sl:i Mohan Chhangaui the then Transport
Minister told him that the ' letter was only a
foi:iaitty aI).d that no c)iarge will be from the
F'edenition qr fiom the workers who go to attend the
raHy at. Pelbi: . Shri Maury.a has stated before the
CoJlllllission that it was not possible to call a general
botj.y .:meeti1,1g at such a short notice nor was it
f\lct. called as he was told by Shri Mo{1an
.Minister, that a mention. of this was
. required oruy for the of getting the special
leave.ap.d the for the workers.
no place for holdmg the general body meetmg was
. sele.ctcd in . Delhi nor invitations were sent for the
.same; According to' the statement of Shri Maurya,
workers nmbering abOut 5,000 who were taken in
the trucks_ of the Electtic;ity Board took part in the
rally on June 20, 1975 at Delhi. Those workers
_who had taken plllt in national rally at lnlhi were
"given three days' special casual leave. with pay. As
per evidence before the Commission it is seen that
no route permits were obtained from the Rajas than
Transpon Authority as required the Motor
Vehicles Act for taking the trucks out of the limits of
. the Rajasthan State arid for the journey to Delhi.
.. . , . 7.272 Bills in respect .of the use of Elec!ricity
. Board .by the workers' union were sent by tile
Bpard to Shri Maurya who . stated by his letter dated
. ,April 20, 1977 that charges of trucks issued by
: fv{anagement for !workmen to join the rally
organised on June 20, 1975 were n6t payable by the
Trade Union because arrangement was m,ade by
the management and t(ie bills . should, therefore, be
charged fiiQm the Rajastban State Government.
7.273 Shri. has, it is true, stated
he was associated with the Anand Marg some-
tune the year 1971, but he ha<l severed bis
connection with that organisatioQ. Ht:: further .stated
on. 19th _ot June, 1975, .he had passed an order
, the :truckS should be made available on payment
of the appx:opriate charges and after obtaining the
permits, and _since he did not follow the
suggestion made by the Chief Minister, he was
victimised by being first" transferred from his office as
the Chairman, which was a very prestigious office to
a comparatively unimportant ofiice and thereafter he
was aske<i to go on leave and for a major part of
that period he received no remuneration at all.
Tbjs, according to Sbri Mangal Behari, was intended
. tQ be a penalty measure taken against him
he t?tood up against tile unauthorised demand for
tbe State truck$ in support of a party
act1V1W . . of Government, to which party
. the Chief Munster belonged.
7.274 The evidence establishes that there was
abu$e of aqthority in directxng the. termination of
empl9y.iqent . of Smt . Chandrawati "Sharma; in
trnnsfernng Sllri :Mangal Behati from the Chairman-
ship Qf !he State Electrjcity Board and later
compelling_ him to proceed on leave, ancl also 1n
directing the against Shri R. N." Gaur.
7;275- According to the evidence ,of ,Shri Harideo
foshi, the origina_l received ." from
Shri Dhawan . contamed a direction that Sbri Gaur
should be suspended and that Shri Mangal Behari
should be relieved from service. According to
Shri Harideo Joshi, he after "eonstiltiilg his officers
rang up Shri Dhawan again and Shri phawan agreed
to only an inquiry b.eing held S.hri R. N.
though_ there was . a direc;;t1on . i:elieve
Shri Mangal Bebari of his office, -no such action could
immediately be taken by the State Government
according to law because Shri Mangal Behari was an
!AS officer posted to Rajasthan cad.re and his
compulsory retirement could only be ordered by the
O;;ntral Government in. consultation with the State
Gcvernment .
7 .276 I:he circwnstance that action, as initially
directed by Sbri Dhawan was not taken according to
the strict tenor and there was some modification made
in regard to Shri R. N. Gaur and Shri Mangal Behari, .
does not, in the view of the Commission, amount to
any_ substantial change. It is still. an abuse of
au1hority, when pursua.nt to the directions by
Shri Dhawan, Shri Harideo Joshi has purported to
hold an inquiry against Sbri R. N. Gaur has
directed Shri Mangat Behari to proceed on leave; and
kept him continuously on le.ave rijtlit till 15th of
December; 1976.
.7.277 Shri Harideo Joshi is the person, who gave
the . instructions. He has stated before the .
Commissi_on that when he handed the note of
the . instructions received from Shri :Ohawan and as
recorded by him to his Chief Secretary, he expected
that action would be taken according to law. He
did not intend that action was not to be taken according
to law. But the ma.oner in which the action was
taken, the expedition with whicil the orders were
carried out in respect of Shri S. N. sltarma1
-Smt. Cbandrawati, Shri R. N. Gaur and Slut Mangat
Behari . clearly indicate that no option was left tQ the
q1ief Secretary, but to carry out the orders, . as
directed. It does not appear to be the understanding
of the Chief Secretary or of the subordinate oftlcials
that . they were to regulate the directic:ms oI the Chief
Minister according to law and take such action as
. was permissible and after satisfying themselves
.whether, in law, such action should be taken. In
any event, the action against. Snit. Cbandrawati
Shanna . was wholly unjustified. was no scope
for action being taken agaipst h.er by relieving her of
office a in the Maharaja's Giils School
w1.thout g1vmg her an Opportunity, . as provided by
Article 311 of the Constitution. There. was no .order
from the Governor dispensing witq an, inqiry on
of the m tlie lQ ArHcle
.. 7,.278. these it that
.Sh.r1 Hapdeo Joshi_. 4irected. Ns subo.1;d.inate Officials
tP. U,le .. . by him. as
re.ceiv.ed. Sbrx
7.279 .Sbri Raridoo .. with
tmder Rule of the. of Inquiry
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Rules and ,summons under 8B of the
sions of Inquiry Act. The Commission has taken into
:liis statement' as also the evidence led by him.
- 7 ,48() Shri Harideo Jnilii has two '<:tiJferent
stands. When. it came to Sbri Dhawan he took the
line that he acted as he was told to do by Shri Dhawan
which he thought were in fact the ordei'S of the Prime
Minister. In the case of Shri Gaur he had sought
and obtained clearance from Shri Dhawan for not
sitspendillg Shd Ga-q1;. As for Shri Mangal lkhari,
.he had .asked him to proceed on even for which
his Chief Secretary had obtained clearance of
Joint Secretary, Shri P. N. Bahl in the Prime Minis-
ter' s Secretariat. Regal'ding the action taken on
others, namely Shri and Smt. Sharma, Shri Joshi had
taken the plea that when he marked the papers to the
Chief Secretary t'for necessary action' ', he .intended
that action would be taken by the officers according
to law. 'TI1e Commission feels that actually action
was taken by the officers as desired by the Chief
Minister and not according to law. Shri Joshi him-
self has mentioned in his statement before the Com-
mission that he felt that be was left with no option
but to carry . out the directions as conveyed to him
by: Shri R. K. Dhawan. He cannot escape the
respqnsibility for what followeQ. both with regard
Smt. S. N. Sharma's termination of services and
the long period that Shri Mangat Behari had to remain
on leave. . During his statement before the Commis-
sion, Shri Joshi has )limself conceded d1at
a mistake was committed in the case of Smt. Sharma.
Shri Josb.i has thus misused his . position, subverted
. the established adniinistrative procedures and 'abused
his in terminating the service of Smt. Sharma
without observing the provisions'.
7.281 The next question relates to the involvement
Qf Shri Dhawan and Smt. Gandhi. According
to Slu'i "IDhawau., he merely read out the CBI report,
, wlliQh had peen receive<;I by him from the p,iJne
MiJ1ister and be gave dire"tion$ to Sllri Harideo
Joshi on telephone. He also dep!ed that Shri Haricleo
Jo!ihi again 1\itn up after a few minutes after
the first telephonic convers11tion.
7.282 CSonsidering the evidence, the testimony of
Shti flarideo Joshi on this is more reliable.
As .according to him he had initially recorded in Hindi
' the gist of the order received by him from Shri Dhawan,
which was later. recorded i11 EngUsh after discussion
with his officer. Sh,,rL.Dhawan--has-admitted that he
.. had--oarried out i.he- directions of Smt. Indira Gandhi.
. -According him,' he was Jlapded over Ute CBJ .report
which was read-over to Shri .Joshi by him on
the
7.283 It l\ppe;1rs that some in the tile of
Pep.art1nent of of lnc:Ua, had
been initiated e;-Jy hl month. of February. l 975
'with regard to the involvement Qf $fu;i Mangal Uehari
in thC, . activities of
1
A of Anand
Margis had also by the Gelltral'Govern-
tfte pame$ of Shrt S, N. Sharma :md . 'Shri
. Behad included. in Jil>t, I! an inti-
mat.1oii was by the l>nme Mmtster with regard
. to the CBI nothing have been easier
91
than . to send a in writing with regard to
intimation so received to the concerned . Ministry m
fae Government of India and to the Chief Minister of
Rajasthan. The steps taken of reading over to the
Chief Minister. the entire report of th"., CBI on tele-
phone containing a number of wowd be unusual.
Jt appears that no record was intended to be kept .of
the conversation between Shri Dhawan and the Chief
Minister of Raja5than and., that why Dhawan
rang up and informed Shr1 Joshi abQ\lt the
action to be taken by the letter agamst the four per-
sons named in. that report. It is pUfely a twist
circumstances that Shri Harideo Joshi recorde<l in tbe
first instance, having regard to the multiplicity of details
in the action intended to be taken, in Hindi : of the
intimation given to him and thereafter made a formal
record of it in English after consultation with bis offi-
9ials. It is true that the Hindi version of the intimation
was not maintained but there is no reason to disbelieve
t.he testimony of Shri Harideo Joshi in . . that behalf,
es}1ecially when the English version substantially con-
tains the recommendations, which are made by the
CBI in regard to the action to be taken against the
four persons and Shri Dhawan says- that.
intimation w'as given on the telephone .with regard to
that report.
7.284 The involvement of Smt. Gandhi with regard
to the action taken against Shri and Smt. S. N. Sharma,
Shri R. N. Gaur and Shri Mangat Behari is clearly
establiShed by the testimony of Shri Dhawan as corro-
borated by the testimony of Shri Harideo Joshi and
the various actions
1
which wtfre taken with very great
despatch on 20th of August,' 1975 or soon thereafter.
7.285 When a formal notice was issued under rule
5(2)(a) of the Commissions of Inquiry Rules in re-
gard to this matter, Smt. Indira Gandhi degined to file
a statement, as required by . the Rules. When . the
Commission asked her to enter the witness box and
be examined under section 5(2) and a procedlire
analogous to Order X of the Civil Procedure Code,
she declined to take the oath and refused to answer
any question on the plea that she was riot cmd .
Constitutionally bound to answer the questions. In
the circumstances, it is open to the Commission to draw
adverse inference against her,
. .
7 .286 The circumstances. . .+rii:i8 established m
ietsrqhrs , arc, briefiy
(i) that she received information .that S. N.
Sharma was an Anand Margi and that Anand
Marg was declared banned organisation; .
(ii) that even though Shri R. N. Gaur was in
formed . about the burning of some records.
he did not reach .in time, nor ttied to save
the records;
(iii) _that Smt. Ch.andravati was.
Anancl Marg1and she-was still contmumg 111
employment as a servant;
(iv) that Shri Mangat Behari, an JAS officer )Vas
an active Anand Margi; and .

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(v). file of
.: ing'..with the .then: Prune s
.. from ' February. 3, .: 19 76 . . to December :-
, 1976.. is no satisfa"tqry e;xplan<it.qn
. . forthccnning Jof. this foqrdinate .tlclay.
. . . . . . I .. . . '
. 7 .287 In the absenc;:e of any explanation
fog .from. Smt. <?and.hi an:d on the evidence
the ColllJll1:ss1on is . that she
responsible. for .(i). causing the term10ai1on of .
of .. Smt. Chandrawati S.t:iarma, Assistant
Government of Rajasthail, in violation of the . Const1-
tutiorial provisions; and.()
on which shri Mangal had to ab?ut
16 months and for .causing fue attending .:hardships
which ensued. as a: result .thereof. She .has .thus:m1s-
used her position, abused her authority and subverted
well-established administrative procedures. and lawful
processei:i.
;
7.288 Sbri Dhawan was servl!d with a notice 4n<l<fr
.rule 5(2) (a) of the Rules and a summons under
section 8B of 'the Act. He responded to the summons.
Shri Dhawan has taken the line that he merely read
out' the CBI report as . directeuby t1ic Prime
. but did not indicate any specific action to be taken
with regard to ahy the figuring . !n . the
note recorded by Shr1 Joshi. According t<?
. him this should be apparent from the fact that Shr1
Gailr was not suspended and Shri -Mangal Behari -.yas
also not relieved from service but only sent on
If what he had conveyed to Shri Joshi were to be
u-eated as orders, there was no reason why the opera-
-tioniil ' aspects of these orders should have been inter-
fered with, as in fact il was done in the two cases
l'eferred to above.
1
This plea of Dhawan is not tenable
inasmuch as for the deviation in both the cases,
Shri Joshi and the Chief Secretary. had obtained the
clearance from Dhawan in one case and Shri P. N.
Buhl, Joint Secretary in the PM's Secretariat . in
other case for the eventual course adopted. Shn
Dhawan did read out from the CBI note. at the
tance of the Prime Minister. The Commission !eels
that as in many other cases, Dhawan ?as been: acting
merely on orders and on that acco.unt 1t does not -hold
. him resp<>nsible_ for the subsequent things that f9lloweq.
7.289 The Commission feels concemed about two
important aspects figuring in this case.
.7.29.0 The first is the in which the services
9f Srot. Chandrawati Sharma, who was only an .Assis-
tant were. terminated witliout the slightest
fuss or protest and she remained removed from service
. till she was reinstated after the change of Government
following the Lok Sabha an<i. the Assembly Elect-ions
. in March No fl.inctionary or-the Government
. put even as much as a note pointing out that the
political activities alleged against her were no.t correct
-- -and that she was being kept out of service for no valid
and unde,rstandable reason. As this, totally in-
different and callous attitude, the manner in which the
State Government rallied . to the support of
Shri Mangat-. Behari, '. al'! I.AS is indeed unique
and is in striking contrast to the miirincr i1i"which Smt.
Sharma was dealt. w.ith. How are we .going_ to eqsure
that .every . . of
. their . .rank and status en1oys full S(}C!JI!tY ana. prote:-
tion of service 7 Until this is done, the manner m
.which these .two functionaries of G<;>vemment..:were
-dealt ;a low.placed Assistant Teacher, and
.the ,_ other . a. high-placed IAS be
considered as:' ._an unpardonable and' mv1d1ous
:distinction.
. ?7 .Z.91 . The , second is W,ith regard .. to . the file
was .by. the. Intelligen7e; Bureau agamst
Shri. Mangal Be4ari . . Tlie had. access to
the Home. Ministry file dealing with Shn
Hchari's activities with regard to Anand Marg. It 1s
surprising how the variou.s _specific alleged
. agail1st Shri angal by the
w;;:re by, the State
C;LD. It is .fhe exonerating ai;id alleyiatmg ryports
of the State C.I.D. which enabled eventually_ the ()o.v-
. ernment to take a lenient view of ,Behari .
. to alfow: him to sei;yil::e ...:. I11Jhe; .
.the. coils,istent .. repo.rts m favour; of:Sbn
.bY: the State. C.I.D., eYefl the
.Bureau eventl,ll\Uy_,.. veered round to the of view
.which..is evide1iffrom the .report of the Dm:ctor, -Intel-
lige11ce Bureau himself which runs as follows =:
"The activities Shri - Mangal Behari, -' as !\re
. knowri. to us, remained. confined to the spiri-
.tu'al and organisational fields of Arii'llld
Marg.. It quite likely. that Sltri was
.. m by .Uie :syiril:uai 'the
Anand . Marg w1thot realtsmg its true
characters."
7.292. If . one had :to go -only by the Intelli-
. gence Bureau reports; it have. been q1fficult for
Maugal Behari to have contmued m service, as an
the ,reports of the Intelligi:nce Bureau were extremely
damaguig (o Shri Mangal Behari. It fortunate
for. him that the repotts Of his State C.Ip. w.ere--more
factual than those .. oLreports- orthe IB.
7.293 In this c,ase, if the Department of Personnel
of the Government of IriQ.ia did not have the benefit
of .the scrutiny of the JB repot'ts by the reports obtain-
ed from th.e Rajasthan Sta:te CJ.D., it is quite likely
that the Department going by. the rep,ort alone
could have come to Certain COOcl\JSions Whi'<h may not
have .. been' helpful .to Shri Manga_l B.a1ari.
May . be, this is . ()f the few y<here the lB
report may not have been in complete conformity with
all the facts. In this connection, tbe Commission
would invite the. attention of the Government to the
,report initiated by the IB on Justice R. N.
and which came to;be by-the .Government to the
detriment o.f Justice :Aggarwal: it transpired, the
IB report on Justiee: R; N. Aggarwal .was also .uot
correct in material . particulars; . Considering,
the!'efore, . the risks. involved and the .damage an
adverse IB report can .cause to an iridividual. -.both
in terms .of h\s reput11tion: as. also .of hiS careei: .prns-
recom{nends that \he Govern-
ment should take. steps to ensure that every Il3 report
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19. Irregularities . in initiating action resulting in
and .seizure operations under the Income
Tax Act .i.Ji the case of two trade union leaders.
. 7.294 early in Augi.ist . 1975, Shri
Harihar Lal met Shri D. Sen in the latter's office on
Shd Sen's. request. It would appear that Shri Sen
passed on to Shri Harihar Lal certain information
relating to one Shri Prabhat Kar who was at . the
i;elevant time the General Secretary of the All India
Bank .Employees Association and D. P. Chadha
who was the President of:.tbe same Association.
Information in relation to Shr1 Prabhat Kar -was that-
( 1) he received a. remuneration of Rs. 2,000
p.m.;
(2) he stayed fo a house rent of which was
borne by the Association ;
( 3) the Association provided him with a motor
vehicle;
( 4) .in 1973 he received gifts totalling. up to
Rs. one lakh at the time of his daughter's
marriage ; and that part o'f t11e amount had
been invested and deposited in Bank
account;
( 5) he was receiving various . other pequniary
benefits and had amassed wealth much be-
yond his known sources of income ; and
(6) lastly, he had a standard of living much
. above that warranted by his known sources
of income.
7.295 In the case of Shri D. P. Chadha, the in-
formatio'n was that-
( 1) he was drawing a salary over Rs. 2,000
p.m.;
(2) he had purchased a fiat in Punjab National
BanlC Housing Society near Lallubhai Park
at Andheri in Bombay ; and that
(3) he may not be . a'n income tax assessee.
7.296 In the case of Shri Prabhat Kar, Shri Harihar
Lal . made certain enquiries and found out that
he was not being assessed to income tax and that it
was rrot k'nown in which Commissioner's jurisdiction
. he was assessible. Shri Harihar Lal, therefore, autho-
. rised searqh operations in the case ,of Shri Prabhat
Kar u/s 132 of the Income Tax Act. Jn the case
of Shri D. P. Shri Harihar Lal pass.ed on
the information received by him to Shri 0. V.
Kurnvilla, tl1e then Com1J1issioner of Income Tax,
Bombay City-1. On the basis of the information
referred to above in this case, Shri 0. V. KuruviJla
authorised search operations u/s 132 of the Income
Tax Act iH the case of Shri D. P. Chadha at Bombay.
oQerabions in both these eases .. were
carried out orC the 13th August,. 1975. -While -'Shd
P1abhat Kar had not been filitig returns of income hi
regard to the remuneration received by him from
AU ' ltidia Ba'nk Employees Association, it was seen
that Shri D. P. Chadha was filing returns of inc.om(!
regularly and that all his assets were prc>perly.
explained .
7 .298 In the course of his testimony before the
Commission, Shri D. Sen, the then Director of the
C.B.I., stated that certain information in regard to ..
S/ Shri l>rabhat Kar and D. P. Chadha, which he had
recorded in a note dated 21-7-75, was furnished to
him by Shri R. K. Dhawan, who had gone to Shri
D. Sen's office.- Shri Sen added that he had passed
on the information to the Officer-in-Charge of the
Intelligence Unit for verification and that as recom-
mended by his Joint Director, he 'had passed . on the
information collected to Shri Harihar Lal.
7.299 fo his written statement in response to the
notice under Rule S (2 )(a) of the Commissions of
Inquiry (Central) Rules, 1972, Shri Sen has stated
that the information that S/ Shri Prabhat Kar and
D. P. Chadha were office bearers ht various Ba'nk
Unions and that they extorted money for donations
to various Union funds from the clients of the Ba'nks
and that they misused Union funds and were living
in good style was received by him . o'n or before
21-7-197 5 from Shri R. K. Dhawan of the PM's
Secretariat and Shri Om Mehta who was then the
Minister of State in the Department of Personnel.
He has added that at that stage . he did not know
whether S/ Shd Prabhat Kar and D. P. Chadha were
or :were not public servants .
7.300 S/Shri R. K. Dhawan and D. Sen had also
appeared in response to summons u/s SB of the
of Inquiry Act, 1952. They had also
availed of the opportunity to make their subinissions
on the ev'idence adduced before the Commission. At
both these stages, Shri R. K. Dhawan denied having
given any such information to Shri D. Sen. In res-
ponse to .a .query from Shri D. Sen, Shri Dhawan
confirmed that he had been giving information of
simHar nature to Shri D. Sen on certain other occa-
sions but denied that he given any information
in this case.
7.301 In the course of his testimony Hatihar
Lal referred to the information as suppl'ied by- Shri
D. Sen and said that when the information wa!: com-
ing from a. source as important and responsible as
the Central Bureau of Jnvestigs tion, he believed that
there was case for authorising search . .>operations in
the case of Shri Prabhat Ka'r. Jn the case of Shri.
D. P. Chadha, he had merely passed o'n the h1forJ11a-
tion to the concerned Commissioner of Tncome Tax
at Bombay for necessary action.
7.302 After completion of the search operatfons,
Shri D. Sen had recorded a secret note dated Aueust
i6, 19.75, wherein he, state4. that . had .. _given ---,----.,.------------- .
information. as inqicated in the note to Shri Harihar Lal
about S/Shri Prabhat Kar and . D. P. Chadha and
that on the ' basis of that information the houses of
S/Shri Prabhat Kar and D. P. Chadha were "got
searched" by Shri Harihar Lal. The note. further
adds-- "a copy of his (Shri Harihar Lal's)' report
giving result of these searches is enclosed." IL is not
clear to whom Shri Sen had addressed this note. 1 n
his oral testimony . before the Commission, Shri D.
. Sen has stated that he could not recollect to whom
. l!fGIPR.R.ND-S/39 HA/77-TSS II-18-3-78-2400.
. . . . . .
94
the. report was sent. He, however, . mentioned that
he might have sent it to Shri Om Mehta or to ,Shri
R. K. Dhawan.
7 .303 While up to the
search and seiiure operations in these two cases no
doubt appear to be somewhat unusual especially Shri
D. Sen's role therein, no subversion of admini,:;trative
procedure . or misuse or abuse of power has l;>e_en
clearly established .
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or dLh s. /on&. y
(for deLhi's.approvaL and 1 .jive ..
tack !
r&2'Jur
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19 ( samachar) : .. the . 1 nit.a. mr aid1il" ia
17\Jurita on his cn1n v.tiiJn he and rnr Lot.
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party

were attacked at micJn1ollt
t.aot .n1rlt by sQ'lle unkno,.n personJ.
a pre$a note isSJed by the a1s1r1ct U:'11C.:
I ' .
PoLict t\. y on d a case s rarJ1stered t1(11...ins.t

seld titat both m kauah 11< mr
,tire .. oivan pranpt, -medial .. 8 ss1sta.n
th.I . has to the
ti '.tMilr. 1tl . 1Tl ..1TW .l) ,80.CG .eno ..
llld .1ft .. po1' s.,_. peo,t>,L . : ttJtv bee.n
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Attn
----------
. ,
- A.ny story from Raipur on the alleged assault of

Hhould be referred to Mr WL. _before use.
ur\ien t
for det. hi. .ont. y
tpl; no no two
/
attack t\'IO I.a st--- raipu r /
GV/ 19.3.77 0510
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. m r kau 91 ik toL d n ewsnen that some sons a tt:; eked th em .w1 th
la .. th
0
1:S vh en they al. with scxiie -workers were ori .('ound of
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e sta + 1 o a . t '
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he said t1 .e . hit witfr- 1.a:th,;ls. and kicl<s and his ,
was tom off. mr. mu
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kerjfe was i11t by a y.t1ich. caused
:!rljur1es on . his chin., and h17/ v.as rer.wveci to w1
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mr ram .. sahay t1v.iar1/ and some other party ... workers were
. . - " 'L . . . . -:.
a.so mjured. he added /
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vll1Le mr kaushik it a conoress
that .1 a. manacj 3d $'\OW With an Object . to
iake pol.1ti'cat. advan:taoe on et.ec"l:10i1 .
.. .. .. ... . . I . .
cqnot-ess to -. the not not be m1souid3d by ' .
ttm1 ours sP reaci y, an t1-soc1a l. el. em en ts.
t'1eav.y pot.ice o.rrar1<;ier.1ants hava .. been made in i:he toAt'l and
POl.1ce petrol..t. CJ in ten sif1se1. samachar
orr- ono /2D35 hrs ,---.,..... .
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PRINTED THE MANAGER, GOVT. OF INDIA RIN.G ROAD, NEW' DELHl-11006.i
AND PUBLISHED .BY THE CONTROLLER OF PUBLICATIONS; ,DEl'.'Htl10054, 1978
PHD. 310
. 2400