The Jain hawala case
It’s been a decade (May 3, 1991) since the sensational Jain Hawala corruption case unravelled with raids on the residence, office and farmhouse of ‘‘diary-keeper’’ S.K.Jain. But it’s ironic that even after the main charges have been thrown out by the courts, the supplementary investigation embarked upon by the Income Tax (IT) Department carries on endlessly.
The Rs 65-crore Jain hawala scam implicated politicians of every kind except for the communists. And it is hardly surprising that vested interests sprung up keeping it going.
The pay-off scandal was investigated by the Central Bureau of Investigation (CBI) and closely monitored by the Supreme Court, which had once asked Secretary-level officers to report on its progress. On another occasion, the apex court asked the IT Department to inquire into disproportionate assets of the hawala accused and 10-year long assessments in the case of politicians and bureaucrats were opened.
It was in 1997-98 that the IT Departments began chasing political leads more closely. At that stage, former Congress ministers Buta Singh and Arjun Singh bore the brunt. Buta Singh allegedly had the highest undisclosed income, from over Rs 10 crore with alleged violations including the purchase of fishing trawlers by his sons to huge unexplained cash deposits and other extravagances like hiring chartered planes by him and his family. It is not, however, known how much of the penalties were paid up by Buta Singh.
The other important political twist was the challenge petition filed by Arjun Singh against the re-valuation of the marble palace he had built on the outskirts of Bhopal. While Singh had claimed the value of the property was Rs 18 lakh, the IT Department had put the real cost at above Rs one crore. Arjun Singh fought the case right to the Supreme Court.
Apart from him, 14 politicians were forced to get their properties re-valued in the wake of the investigations.
Nine years ago Delhi policemen raided premises in the crowded, predominantly Muslim Chandni Mahal area in central Delhi. According to senior police officers, foreign exchange irregularities and hawala transactions are common in this area.
The police stumbled upon a large hawala network and through subsequent raids discovered that money was routed to Kashmiri militants through a student at the Jawaharlal Nehru University, Shahabuddin Ghauri, who was arrested in early 1991. The police charged two individuals in the case, Ghauri and Devidayal, allegedly a hawala dealer. Devidayal is still absconding; Ghauri, whose trial concluded in conviction two years ago, is serving his sentence at the Tihar jail.
In 1991, the Central Bureau of Investigation (CBI ) raided a hawala dealer, S.K.Jain’s farm house in Mehrauli and recovered Rs.90 lakhs in cash and a diary, which revealed the identity of politicians and bureaucrats who allegedly were the recipients of the money (Rs.60 crores) from S.K.Jain for awarding lucrative contracts in the power sector with foreign companies. The share of the bureaucrats was a small amount as compared to the amount given to the ministers and politicians. The diary entries revealed that Rs 65.47 crore had been paid to 115 people from 1988-91. Of this, Rs 53.5 crore was found to be illegally transferred to India via hawala channels. The payoffs were allegedly made around 1988-1989 during the final months of the Rajiv Gandhi regime.
The diary was sealed and for some time, no investigations were carried out on its basis. In the meantime, responsibility for the main investigation changed hands, from the Delhi police to the CBI.
At about the same time, CBI deputy inspector general O P Sharma was caught for allegedly seeking a bribe. The police alleged that Sharma, who was aware of the names in the diary, was trying to blackmail them. Sharma, however, claimed he was falsely implicated at Advani's instance because he had questioned the BJP leader on seeing his name in the dairy. Before he was charged with the offence, Sharma, who retired with that stigma, was considered a fine officer who rose from the ranks to successfully investigate some of the most sensational crimes of the 1970s and early 1980s.
Till 1993, there was little progress on the hawala case and the file remained in a sealed cover. Most of all, no one in the CBI investigated the corruption.
In 1993, senior Delhi police officer Amod Kanth took over as DIG, CBI, and was entrusted with the case.
Before joining the CBI, Kanth was officer on special duty to then minister of state for home Subodh Kant Sahay.
Sahay was close to then prime minister P V Narasimha Rao. Perhaps, that is why Kanth was entrusted with the case under the erroneous impression that he would be pliable on Rao's behalf. As things turned out, investigation into the diary commenced in Kanth's time.
However, differences within the CBI soon surfaced. One group of officers wanted to implicate Narasimha Rao. The other, led by then CBI director, Raja Vijay Karan, wanted to stick to the diary alone which mentioned Rs 65 crore (Rs 650 million) as the payoffs. Kanth arrived at the conclusion that the Rs 65 crore mentioned in the diary was not all, and that the actual payoffs amounted to Rs 73 crore (Rs 730 million).
Of the remaining Rs 8 crore (Rs 80 million), he surmised Rs 3.5 crore (Rs 35 million) was paid to Rao.
Second, the CBI officials alleged since the payments were made by some MNCs, the foreign angle to the payoffs had to be investigated as well. However, according to some of these officers, the powers that be were unwilling to allow the investigation to proceed beyond the amount mentioned in the Jain diary.
According to the investigators, the Rs 73 crore were kickbacks from multinationals for the awarding of three power projects in north India and the modernization of a steel plant.
The CBI made the beginning of their trial in January 1996. The special Hawala court issued non-bailable warrants against 10 politicians – L.K.Advani, Arjun Singh, Kalpnath Rai, Arif Mohammed Khan, Jaswant Singh, Devi Lal, his grandson Pradeep Singh, V.C. Shukla, Balram Jakhar and Madhavrao Scindia.
But apart from the diaries, there was no additional evidence. In the V C Shukla and L K Advani cases, the Delhi High Court had held that there had to be corroborative evidence apart from the diaries, while quashing the lower court order that framed charges against the two.
With the CBI filing charges against 14 more politicians in the Jain Hawala case and submitting the report to the Supreme Court, investigations showed that it was the most widely ranging scandal in recent time. In the final tally, 27 political figures, including Madan Lal Khurana, who resigned on the 23rd February 1996 as Chief minister of Delhi and 2 Governors – Moti Lal Vora and Shiv Shankar also faced Trials from among the 62 names of politicians found in the Jain Diaries.
On the prime accused, S.K.Jain’s allegations that he paid money to the former Prime Minister P.V. Narsimha Rao, the CBI told the Supreme court that as things stood, it had not found any “reasonable basis” to proceed further.
On the 31st of January 2000, the case against all the accused was closed.
Allowing a request of the Enforcement Directorate (ED), a Delhi court has ordered a joint trial of the Jain brothers, Ameer Bhai and Arif Mohammed, in the Jain hawala case, involving the violation of the Foreign Exchange Regulation Act.
Many former Union Ministers and senior politicians had been chargesheeted in the case and later discharged or acquitted by a Delhi court or the Delhi High Court.
The Enforcement Directorate accused the brothers - Mr. B. R. Jain, Mr. S. K. Jain and Mr. N. K. Jain - and their manager, Mr. J. K. Jain, of acquiring and selling foreign exchange worth $ 2.26 crores to Ameer Bhai and Arif Mohammed in violation of FERA.
The case was an offshoot of the Jain hawala case as the Directorate had initiated investigation and later filed complaints in the matter after the recovery of Mr. J. K. Jain's diary from his residence in South Delhi.
The diary, marked `M,' had entries of about 26 transactions, representing the conversion of U.S. dollars into Indian currency, at unauthorised rates.
The total value of the transactions was about $ 2,26,50.000, the ED alleged.
The proceeds of the transactions were credited to `A,' who, following investigation, were identified as Mr. Ameer Bhai and Mr. Arif Mohammed, partners, Messrs. Gem Traders, Mumbai, the Directorate said.
Allowing the submission that the two accused should be tried jointly as the offences against them had originated from the same incriminating facts, the Additional Chief Metropolitan Magistrate, Mr. Justice V. K. Maheshwari, said: ``I am of the opinion that both the complaints may be clubbed together, and a joint trial of both these complaints is possible.''
Union Home Minister Lal Krishna Advani and all others who escaped the Jain Hawala case are again in the Central Bureau of Investigation (CBI) net following the Income-Tax Department reporting that they had amassed "black money."
Among those listed with their black money in brackets, according to the daily, are Union Ministers like Advani (Rs one lakh), Sharad Yadav (Rs 25 lakhs), Yashwant Sinha (Rs 4 lakhs) as also the Congress leaders like Natwar Singh (Rs 1.10 crore), Arjun Singh (Rs 67 lakhs), Narayan Dutt Tiwari (Rs 25 lakhs), Buta Singh (Rs 15 crores) and R K Dhawan (Rs 8 lakhs).
Other names in the list include: Former Deputy Prime Minister Devi Lal (Rs 90 lakhs), his son Ranjit Singh (Rs 12 lakhs), his nephew Pradeep Singh (Rs 3.68 crores), Prakash Bhatia (Rs 50 lakhs), S krishna Kumar (Rs 5.50 crores), Kalpnath Rai (Rs 1.30 crores), Arif Mohd Khan (Rs 1.50 crores) and Babanrao Dhakne (Rs 8 lakhs).
It may be mentioned here that the CBI and other investigating agencies had inquired into the Hawala case at the instance of the directives of the Supreme Court, challanning 110 persons on the basis of the infamous Jain diaries in which industrialist S K Jain had maintained record of money paid to various politicians and officers for all kinds of favours.
It’s been a decade (May 3, 1991) since the sensational Jain Hawala corruption case unravelled with raids on the residence, office and farmhouse of ‘‘diary-keeper’’ S.K.Jain. But it’s ironic that even after the main charges have been thrown out by the courts, the supplementary investigation embarked upon by the Income Tax (IT) Department carries on endlessly.
The Rs 65-crore Jain hawala scam implicated politicians of every kind except for the communists. And it is hardly surprising that vested interests sprung up keeping it going.
The pay-off scandal was investigated by the Central Bureau of Investigation (CBI) and closely monitored by the Supreme Court, which had once asked Secretary-level officers to report on its progress. On another occasion, the apex court asked the IT Department to inquire into disproportionate assets of the hawala accused and 10-year long assessments in the case of politicians and bureaucrats were opened.
It was in 1997-98 that the IT Departments began chasing political leads more closely. At that stage, former Congress ministers Buta Singh and Arjun Singh bore the brunt. Buta Singh allegedly had the highest undisclosed income, from over Rs 10 crore with alleged violations including the purchase of fishing trawlers by his sons to huge unexplained cash deposits and other extravagances like hiring chartered planes by him and his family. It is not, however, known how much of the penalties were paid up by Buta Singh.
The other important political twist was the challenge petition filed by Arjun Singh against the re-valuation of the marble palace he had built on the outskirts of Bhopal. While Singh had claimed the value of the property was Rs 18 lakh, the IT Department had put the real cost at above Rs one crore. Arjun Singh fought the case right to the Supreme Court.
Apart from him, 14 politicians were forced to get their properties re-valued in the wake of the investigations.
Nine years ago Delhi policemen raided premises in the crowded, predominantly Muslim Chandni Mahal area in central Delhi. According to senior police officers, foreign exchange irregularities and hawala transactions are common in this area.
The police stumbled upon a large hawala network and through subsequent raids discovered that money was routed to Kashmiri militants through a student at the Jawaharlal Nehru University, Shahabuddin Ghauri, who was arrested in early 1991. The police charged two individuals in the case, Ghauri and Devidayal, allegedly a hawala dealer. Devidayal is still absconding; Ghauri, whose trial concluded in conviction two years ago, is serving his sentence at the Tihar jail.
In 1991, the Central Bureau of Investigation (CBI ) raided a hawala dealer, S.K.Jain’s farm house in Mehrauli and recovered Rs.90 lakhs in cash and a diary, which revealed the identity of politicians and bureaucrats who allegedly were the recipients of the money (Rs.60 crores) from S.K.Jain for awarding lucrative contracts in the power sector with foreign companies. The share of the bureaucrats was a small amount as compared to the amount given to the ministers and politicians. The diary entries revealed that Rs 65.47 crore had been paid to 115 people from 1988-91. Of this, Rs 53.5 crore was found to be illegally transferred to India via hawala channels. The payoffs were allegedly made around 1988-1989 during the final months of the Rajiv Gandhi regime.
The diary was sealed and for some time, no investigations were carried out on its basis. In the meantime, responsibility for the main investigation changed hands, from the Delhi police to the CBI.
At about the same time, CBI deputy inspector general O P Sharma was caught for allegedly seeking a bribe. The police alleged that Sharma, who was aware of the names in the diary, was trying to blackmail them. Sharma, however, claimed he was falsely implicated at Advani's instance because he had questioned the BJP leader on seeing his name in the dairy. Before he was charged with the offence, Sharma, who retired with that stigma, was considered a fine officer who rose from the ranks to successfully investigate some of the most sensational crimes of the 1970s and early 1980s.
Till 1993, there was little progress on the hawala case and the file remained in a sealed cover. Most of all, no one in the CBI investigated the corruption.
In 1993, senior Delhi police officer Amod Kanth took over as DIG, CBI, and was entrusted with the case.
Before joining the CBI, Kanth was officer on special duty to then minister of state for home Subodh Kant Sahay.
Sahay was close to then prime minister P V Narasimha Rao. Perhaps, that is why Kanth was entrusted with the case under the erroneous impression that he would be pliable on Rao's behalf. As things turned out, investigation into the diary commenced in Kanth's time.
However, differences within the CBI soon surfaced. One group of officers wanted to implicate Narasimha Rao. The other, led by then CBI director, Raja Vijay Karan, wanted to stick to the diary alone which mentioned Rs 65 crore (Rs 650 million) as the payoffs. Kanth arrived at the conclusion that the Rs 65 crore mentioned in the diary was not all, and that the actual payoffs amounted to Rs 73 crore (Rs 730 million).
Of the remaining Rs 8 crore (Rs 80 million), he surmised Rs 3.5 crore (Rs 35 million) was paid to Rao.
Second, the CBI officials alleged since the payments were made by some MNCs, the foreign angle to the payoffs had to be investigated as well. However, according to some of these officers, the powers that be were unwilling to allow the investigation to proceed beyond the amount mentioned in the Jain diary.
According to the investigators, the Rs 73 crore were kickbacks from multinationals for the awarding of three power projects in north India and the modernization of a steel plant.
The CBI made the beginning of their trial in January 1996. The special Hawala court issued non-bailable warrants against 10 politicians – L.K.Advani, Arjun Singh, Kalpnath Rai, Arif Mohammed Khan, Jaswant Singh, Devi Lal, his grandson Pradeep Singh, V.C. Shukla, Balram Jakhar and Madhavrao Scindia.
But apart from the diaries, there was no additional evidence. In the V C Shukla and L K Advani cases, the Delhi High Court had held that there had to be corroborative evidence apart from the diaries, while quashing the lower court order that framed charges against the two.
With the CBI filing charges against 14 more politicians in the Jain Hawala case and submitting the report to the Supreme Court, investigations showed that it was the most widely ranging scandal in recent time. In the final tally, 27 political figures, including Madan Lal Khurana, who resigned on the 23rd February 1996 as Chief minister of Delhi and 2 Governors – Moti Lal Vora and Shiv Shankar also faced Trials from among the 62 names of politicians found in the Jain Diaries.
On the prime accused, S.K.Jain’s allegations that he paid money to the former Prime Minister P.V. Narsimha Rao, the CBI told the Supreme court that as things stood, it had not found any “reasonable basis” to proceed further.
On the 31st of January 2000, the case against all the accused was closed.
Allowing a request of the Enforcement Directorate (ED), a Delhi court has ordered a joint trial of the Jain brothers, Ameer Bhai and Arif Mohammed, in the Jain hawala case, involving the violation of the Foreign Exchange Regulation Act.
Many former Union Ministers and senior politicians had been chargesheeted in the case and later discharged or acquitted by a Delhi court or the Delhi High Court.
The Enforcement Directorate accused the brothers - Mr. B. R. Jain, Mr. S. K. Jain and Mr. N. K. Jain - and their manager, Mr. J. K. Jain, of acquiring and selling foreign exchange worth $ 2.26 crores to Ameer Bhai and Arif Mohammed in violation of FERA.
The case was an offshoot of the Jain hawala case as the Directorate had initiated investigation and later filed complaints in the matter after the recovery of Mr. J. K. Jain's diary from his residence in South Delhi.
The diary, marked `M,' had entries of about 26 transactions, representing the conversion of U.S. dollars into Indian currency, at unauthorised rates.
The total value of the transactions was about $ 2,26,50.000, the ED alleged.
The proceeds of the transactions were credited to `A,' who, following investigation, were identified as Mr. Ameer Bhai and Mr. Arif Mohammed, partners, Messrs. Gem Traders, Mumbai, the Directorate said.
Allowing the submission that the two accused should be tried jointly as the offences against them had originated from the same incriminating facts, the Additional Chief Metropolitan Magistrate, Mr. Justice V. K. Maheshwari, said: ``I am of the opinion that both the complaints may be clubbed together, and a joint trial of both these complaints is possible.''
Union Home Minister Lal Krishna Advani and all others who escaped the Jain Hawala case are again in the Central Bureau of Investigation (CBI) net following the Income-Tax Department reporting that they had amassed "black money."
Among those listed with their black money in brackets, according to the daily, are Union Ministers like Advani (Rs one lakh), Sharad Yadav (Rs 25 lakhs), Yashwant Sinha (Rs 4 lakhs) as also the Congress leaders like Natwar Singh (Rs 1.10 crore), Arjun Singh (Rs 67 lakhs), Narayan Dutt Tiwari (Rs 25 lakhs), Buta Singh (Rs 15 crores) and R K Dhawan (Rs 8 lakhs).
Other names in the list include: Former Deputy Prime Minister Devi Lal (Rs 90 lakhs), his son Ranjit Singh (Rs 12 lakhs), his nephew Pradeep Singh (Rs 3.68 crores), Prakash Bhatia (Rs 50 lakhs), S krishna Kumar (Rs 5.50 crores), Kalpnath Rai (Rs 1.30 crores), Arif Mohd Khan (Rs 1.50 crores) and Babanrao Dhakne (Rs 8 lakhs).
It may be mentioned here that the CBI and other investigating agencies had inquired into the Hawala case at the instance of the directives of the Supreme Court, challanning 110 persons on the basis of the infamous Jain diaries in which industrialist S K Jain had maintained record of money paid to various politicians and officers for all kinds of favours.