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On the 14th of January, 2020, the Delhi High Court dismissed the petition filed by the Enforcement Directorate (ED) to set aside the bail granted to Ratul Puri in the infamous VVIP chopper scam case of AgustaWestland. The trial court had granted the bail to Ratul Puri and also directed him to not tamper with the evidence or try to contact or influence the witnesses.
Maintaining the status quo, the Delhi High Court bench of Chief Justice D N Patel and Justice C Harisankar held that there has to be evidence of misuse of bail for setting aside that relief; thus rejecting the plea of ED to set the bail aside.
In the VVIP chopper scam case, Ratul Puri, the nephew of the present Chief Minister of Madhya Pradesh, Shri Kamal Nath, was named as an accused in the sixth charge sheet filed by the ED. According to ED, the role of Puri was that his foreign entities received proceeds of crime directly from Interstellar Technologies Ltd, a co-accused in the case, and that he had received funds from both the chains of money laundering involved in the present matter.
Thereby, ED had filed a supplementary prosecution complaint (ED’s equivalent to a charge sheet) against Puri and co-accused Jaspreet Ahuja in the Rs 3,600-crore AgustaWestland VVIP chopper deal case.
To understand the above situation better it is important to know the key details regarding the background, developments and legal provisions involved in the infamous case of AgustaWestland.
Knowing the background
According to Stockholm International Peace Research Institute, India is one of the largest arms importer in the world, spending more than $100 Billion in the last 10 years for importing weaponries and other related supplies. These deals are often reported to be fraudulent and ensnared in corrupted practices. AgustaWestland deal, being a similar scenario.
It all began in 1999, when the then NDA government approved the procurement of eight helicopters, to be used for travel by the VVIPs (Very Very Important Persons). The initial requirement set was that the helicopters could fly at an altitude of 6000ft. However, this requirement was reduced from 6000ft to 4500ft, allegedly to benefit a particular company named AgustaWestland.
AgustaWestland is an Anglo-Italian multinational company and is a fully owned subsidiary of Leonardo S.p.A, formerly known as Finmeccanica.
On March 1, 2005, the NSA (National Security agency) chaired a meeting where it was agreed to reduce the flying altitude from 6000ft to 4500ft and the cabin heights to 1.8 meters. The Qualitative Requirements (QR) were finalised on May 9, 2005, in a meeting chaired by the then Defence Secretary.
In the same year, the UPA (United Progressive Alliance) government made another change by increasing the number from eight helicopters to twelve helicopters, by adding four non-VVIP helicopters.
Finally, in the year 2010, the UPA government enters into a Rs 3,546 crore deal with AgustaWestland for the purchase of twelve AW-101 VVIP choppers.
The first lot of three helicopters were delivered in the year 2012 and this was the time when the initial sparks of corruption were reported by the media of both Italy and India.
The Italian media reported that AgustaWestland had hired a middleman to persuade the Indian government to favourably modify the specifications of the helicopters and give the contract to AgustaWestland.
This led to the arrest of the then Finmeccanica Chief, Giuseppe Orsi, by the Italian Police. The CBI (Central Bureau of Investigation) took up the case in India, and the ED also started probing the case.
In March of 2013, The Indian Express reported that around 10% of the Rs 3,546 crore were payed as kickbacks to the alleged middlemen, Christian Michel and Guido Haschke, along with many others through banks in Dubai, Italy and Switzerland.
In December of 2016, the highest court of Italy acquitted Giuseppe Orsi, stating that no corruption had happened in the deal. But a proper investigation in India was very difficult as the central accused Christian Michel and other alleged middlemen were not in India. This led to the extradition of Christian Michel from UAE to India in December 2018 under operation “Unicorn”.
However, the deal was cancelled amid rising controversies.
Knowing legal provisions involved
In the case of Gautam Khaitan v. Enforcement Directorate in December 2014, the Delhi High Court heard the details of the AgustaWestland and the various provisions under which the alleged offenders could be convicted; here, Mr Gautam Khaitan supposedly facilitated the transfer of kickbacks between various middlemen involved.
The important provisions that were highlighted in the case were as follows:
Section 420 of IPC: Cheating and dishonestly inducing delivery of property. The convicted shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Section 13(1) (d) of Prevention of Corruption Act, 1988: This section describes the different criteria under which a public servant could be charged with misconduct relating to unfair pecuniary gains.
Section 3 and Section 4 of Prevention of Money Laundering Act, 2002: These sections basically deal with defining the offence of money laundering and punishment for money laundering respectively. The acts of the accused were weighed against these sections to know if the acts really constituted money laundering or not.
Section 24 of Prevention of money laundering Act, 2002: Burden of proof shall be on the person who has been accused according to section 3 of the act.
These above sections were read along the relevant sections of Code of Criminal Procedure.
Developments in the case
In the case of Gautam Khaitan v. Enforcement Directorate in the year 2014, the petitioner’s (Gautam Khaitan) plea for getting a bail was dismissed by the Delhi High Court for being infructuous.
In 2015, a writ petition was filed by the petitioner under Article 226 of the Indian Constitution in the Delhi High Court. Thus, the case of Gautam Khaitan v. Union of India (2015) came into being where the high court discussed the merits of the case and dismissed the writ petition.
In 2016, Christian Michel was extradited from UAE under operation “Unicorn”, for CBI probing.
The events of the case extend to Ratul Puri, when it was discovered that his foreign entities had received money from the entities of the prime suspect, Christian Michel, leading us to the present scenario where Ratul Puri has been granted bail by the trial court and the Delhi High Court has denied to set aside the bail until evidence of misuse is found.
How to reduce corruption in defence deals?
India is a major importer of defence goods in the world but undoubtedly, these deals are far from transparent. According to Transparency International, corruption rate is high in Indian defence deals.
Thus, it is an urgent need of the society to avoid the loss of tax payer’s money over corrupted deals. This can be done by avoiding single source contracts where there is a sole company without competitors which leads to overpricing and corruption.
India should also have a designated body responsible over ethics and anti-corruption within the Ministry of Defence. Most importantly, the Military as well as military spending should remain very transparent, unless it has to remain confidential due to matters of national security. These deals should also remain out of the ambit of politics as far as possible.
AgustaWestland case is one of the biggest controversies continuing since two decades. The recent demand by the ED for setting aside Ratul Puri’s bail, once again brought the case to the lime light.
It started in 1999 when the government wanted to purchase eight choppers for VVIP travel, but the specifications were changed overtime allegedly to benefit AgustaWestland. Though till now there has been no finality to the allegations of scam involved in the case; the deal has been cancelled.
Thus, it becomes pertinent to prevent such situations in defence deals in the future by taking some major steps and developing a robust framework inside as well as outside the Ministry of Defence.
Author: Utsarga Dash from KIIT School of Law, Bhubaneswar.
Editor: Farsana Sadiq from Faculty of Law, Jamia Millia Islamia.