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GOVERNANCE MG DEVASAHAYAM ON VK SINGH p20
YOGENDRA NARAIN ON RULES OF BUSINESS p26

November 5, 2013
VOL. 7, ISSUE 8

EXPO...
From the Editor

T

vol. 7,

ISSUE 8 | November 2013

Anil Tyagi | editor
TR Ramachandran | executive editor
Niranjan Desa...
CONTENTS
6 Bric-a-Brac

LETTERS
editor@gfilesindia.com

10 Cover Story
jignesh shah roams scot-free

RE S
IN TA
LE TE
S SC...
www.indianbuzz.co
www.indianbuzz.com
.com

es
th governm
the
rnment
gfiles inside the government

vol. is u
vol. issue
vol...
Bric-a-brac
hot & cold

Divine help?

mahant under seer’s spell

S

OBHAN Sarkar, the seer who had predicted that
1,000 to...
INSIDE EYE

ILLUSTRATIONS: ARUNA

Angry young man

bihar cong team faces rahul’s ire

R

AHUL Gandhi is frequently angry t...
Bric-a-brac
hot & cold

Supreme power

hooda brooks no interference

H

ARYANA Chief Minister Bhupinder
Singh Hooda has gr...
NMDC AD

GROUP HOUSING
PROJECT
For Civil Servants
“Commonwealth Co-operative Group Housing Society Ltd” has been formed by...
COVER STORY

scam nsel

Living

T

HERE is a saying in Gujarati that if your mother
is serving and even if you are way beh...
Dangerously
P

those to whom he owes money seem to be feeling the heat
of the investigations. The only aberration to this ...
COVER STORY

scam nsel

is that Maharashtra Agriculture Department cancelled
NSEL’s direct marketing license on December 2...
TURNING A BLIND EYE: The members of the Advisory Board of
the Financial Technologies (India) Limited

ers has paid him his...
COVER STORY

scam nsel

Curiously, SEBI chief general manager D Ravikumar,
without depositing any collateral in the wareho...
www.indianbuzz.com

gfiles inside the government

vol. 7, issue 8 | November 2013

15
EXPOSÉ

land deals haryana

Where land
sharks rule
The nexus between politicians and builders in Gurgaon is responsible fo...
Malibu Towne in Sector 47, on open
space (common area). “The builder
has constructed a telephone exchange
and raised elect...
EXPOSÉ

land deals haryana

FIGHTING THE BUILDERS’ MAFIA: Raman Sharma, Dharambir Yadav and Amit Jain

on a complaint file...
opers having the financial capacity
to undertake the development and
technical expertise in development
of residential col...
GOVERNANCE

witch hunting mg devasahayam

‘Veekaysinghmania’

SATYAMEVA
JAYATE

?

The saga of incidents and events relate...
of India’s forest wealth lost to the
mining industry! His exposure of
kickbacks in defence procurements
stopped carpetbagg...
GOVERNANCE

witch hunting mg devasahayam

the tenure of General VK Singh and
the premature announcement of Lt.
Gen. Bikram...
PHOTOS: UNI

blasphemy is yet to be probed and the
seditious intent brought to light!
Now to the Technical Service
Divisio...
GOVERNANCE

witch hunting mg devasahayam

GOVERNANCE
AWARDS 2013

The Jury
shri prabhat kumar

shri anil razdan

shri m b ...
GOVERNANCE
AWARDS

2013

Saturday,
November 30, 2013

For invite, please email with designation
and contact details
www.gf...
GOVERNANCE

civil services yogendra narain

Obey, or refuse
The time has come to amend the Government of India (Transactio...
another requirement. Under this rule, all cases of the
nature specified in the 3rd Schedule to this rule shall,
before the...
GOVERNANCE

civil services yogendra narain

A

N attempt was made to find out the rule position if
any in the States on su...
directions of, the Minister-in-charge and Rule 11 of the
Allocation of Business Rules, which states that the
Departmental ...
GOVERNANCE

parliament devender singh

Calledintoquestion

The orderly progression of Question Hour has been besieged by s...
Government of India “will, however,
have great pleasure in circulating
the Hon’ble Member’s question
and the answer given ...
GOVERNANCE

parliament devender singh

remarks that ensue if the questions
ously, no other device gives such a
vast and eq...
Our motto
To position Karnataka in a sustained
growth path in the field of agricultural
and allied sectors through global
...
STATE SCAN

UNI

j&k mk kaw

Kashmir:
policy paralysis
If we enunciate a clear-cut forthright policy on Kashmir, India wil...
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
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gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
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gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
gfiles Magazine November 2013
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  1. 1. GOVERNANCE MG DEVASAHAYAM ON VK SINGH p20 YOGENDRA NARAIN ON RULES OF BUSINESS p26 November 5, 2013 VOL. 7, ISSUE 8 EXPOSÉ LAND SHARKS IN GURGAON p16 NO ONE DARE ARREST JIGNESH SHAH! FI RAT RS H T IKA ST N T p3 IR BA 6 RI S NG U S gfilesindia.com di com dia.com
  2. 2. From the Editor T vol. 7, ISSUE 8 | November 2013 Anil Tyagi | editor TR Ramachandran | executive editor Niranjan Desai | roving editor GS Sood | consulting business editor Rakesh Bhardwaj | editorial consultant Arvind Tiwari | director, business development Naresh Minocha | associate editor Neeraj Mahajan | associate editor Alok Jain | coordinator (maharashtra) Ajit Ujjainkar | bureau chief (mumbai) Harishchandra Bhat | associate editor (bengaluru) Venugopalan | bureau chief (bengaluru) Kh Manglembi Devi | editorial coordinator Mayank Awasthi | reporter Pawan Kumar | production coordinator Sumer Singh | assistant manager, logistics Nipun Jain | finance Gautam Das | legal consultant Crossmedia Solutions | edit & design Taran Tejpal Singh | Webmaster (Design) Dipanshu Gupta | Webmaster (Programmer) advertising & marketing adv@gfilesindia.com U K SHARMA— +919717588883 e-mail: uksharma@gfilesindia.in RAKESH ARORA— +919810648809 SAKSHAY PAHUJA— +918527006688 e-mail: adv@gfilesindia.com mumbai: 48/C-1, Areshwar, Mhada, S.V.P. Nagar, Andheri(W), Mumbai 400 053 bengaluru: 2210, 10b main road, 3 block, jayanagar, bengaluru 560 011 CONTACT — +91 9845730298 e-mail: venu@gfilesindia.in +All information in gfiles is obtained from sources that the management considers reliable, and is disseminated to readers without any responsibility on our part. Any opinions or views on any contemporary or past topics, issues or developments expressed by third parties, whether in abstract or in interviews, are not necessarily shared by us. Copyright exclusively with Sarvashrestha Media Pvt. Ltd. All rights reserved throughout the world. Reproduction of any material of this magazine in whole, or in part(s), in any manner, without prior permission, is totally prohibited. The publisher accepts no responsibility for any material lost or damaged in transit. The publisher reserves the right to refuse, withdraw or otherwise deal with any advertisement without explanation. All advertisements must comply with the Indian Advertisements Code. Published and printed by Anil Tyagi on behalf of Sarvashrestha Media Pvt. Ltd at Kala Jyothi Process Pvt Ltd. E-125, Site-B, Surajpur Ind. Area, Gautam Budh Nagar, Greater Noida-201306 U.P. (INDIA). All disputes are subject to the exclusive jurisdiction of competent courts in New Delhi only HE general elections are just six months away and the expected hullabaloo has already started. Realignment of forces and individuals too is taking place. But, why is there so much excitement over the election in 2014? Why is it appearing to be a ‘now or never’ battle. Leaders from the old generation are apprehensive; thinking if they fail to board the train this time, the game is over. The youth is guided and motivated, but impatient. Is this battle between the old and the new the reason for the heightened emotional quotient in this election? It may be one of the reasons, but I think the real reason for inflamed passions in this election is the growing size of the country’s economy. The size of the Indian economy as per approximate figures is $2 trillion for the year 2013-2014; unofficially, as per economic experts, it is 10 times more. So, India is among the richest countries with the size of its economy being $20 trillion (unofficial), but with some of the poorest inhabitants. Today, even the size of the scams has increased—now most scams are to the tune of $6-10 billion. It is a classic case for management experts to study and find out how a nation can grow amidst such all-round chaos. If you analyse the authority, will, and political acumen of India’s Prime Ministers in the last 23 years, you’ll realise that they had no significant mass base. They were leaders in their own sphere and capacity, but they were not of the stature to revolutionise the nation with their personalities. This suited the designs of the powers, or ‘big brothers’ abroad. All the Prime Ministers in this period, especially Manmohan Singh, perpetually kept the Government of India on tenterhooks by implementing programmes and policies which favoured an open economy. It is worth noting that the ‘big brothers’, wherever they have entered— be it Panama, Ecuador, Argentina, Africa or Iraq—like to have a malleable leader who will implement policies that promote and create a market platform where they can sell their ideas and products to fill their coffers, while at the same time, deny the rightful dues to the inhabitants of the respective nation. Regional satraps have emerged again from their hiding places to beat the drum that they are the only champions of the poor. Who knows, the next Prime Minister may be one from among them. Both Congress Vice-President Rahul Gandhi and BJP’s prime ministerial candidate Narendra Modi have strong views on national issues. This may not be to the liking of the ‘big brothers’. In such a scenario, a blunder that India has done is to forget developing a strict and regimented regulatory mechanism. Be it Japan, Singapore, Malaysia, or USA, there are no curbs on doing business. But, once one commits a fraud with the system, he is effectively penalised. In June, September and now November, gfiles has exposed the daylight robbery happening in the name of the farmer by the National Spot Exchange Ltd. It appears that the whole financial governance system is in connivance with the alleged scamster Jignesh Shah. He has allegedly manoeuvred the system so well, that the Government of India can’t do a thing against him. Shailaja Chandra tells the fascinating story of the almost forgotten bureaucrat of yesteryears, Rathikant Basu, who dared to challenge the media industry and was the man instrumental in establishing Star TV. MK Kaw calls for a well-thought out policy on Kashmir, a region that needs care and special attention. The paradox is that too many cooks have spoilt the broth; every institution or leader working in the Valley has their own agenda and they are not bothered about either Kashmir or India. How can we move forward in such a situation? But, we have to move forward come what may, as Kashmir is India’s first love. ANIL TYAGI Download the gfiles app www.indianbuzz.com editor@gfilesindia.com gfiles inside the government vol. 7, issue 8 | November 2013 3
  3. 3. CONTENTS 6 Bric-a-Brac LETTERS editor@gfilesindia.com 10 Cover Story jignesh shah roams scot-free RE S IN TA LE TE S SC p4 S H AN 4 OO DA hot & cold GOVERNANCE: JIGNESH SHAH, UNFIT AND IMPROPER p12 October 5, 2013 VOL. 7, ISSUE 7 BIG BOSS SANJAY KOTHARI p18 16 Exposé is hooda protecting land sharks? gfilesindia.com 20 Governance veekaysinghmania! 26 no longer business as usual 30 let’s not scuttle question hour 34 State Scan kashmir: clamour for policy 36 First Stirrings Battle Battle e for Bhopal Bhopal p media mogul: rathikant basu 42 Mandarin Matters bhutan comes of age 44 My Corner relook at enquiry procedures 46 Book Review coping with technology 48 Initiative emotional intelligence 49 Stock Doctor retail brokers under threat 56 Perspective sadhguru on celebration 57 By the Way on the edge & at a loss Poll battle in MP You presented a good analysis of the political scenario in Madhya Pradesh ahead of the assembly polls (gfiles, Battle for Bhopal, October 2013). Both the BJP and the Congress are pulling up their socks and sparing no effort in their campaigns to lure voters. Puneet Nicholas Yadav mentioned in the article that the BJP prime ministerial candidate, Narendra Modi, will somehow help Shivraj Singh Chauhan in winning the election for the third time in a row. I somehow disagree with this point. BJP may well win again but Modi will affect the hold of BJP in the state in a negative way. The BJP’s move to declare Modi as their prime ministerial candidate will somehow prove a boon for the Congress and help it to attract minority votes. I agree, however, that it will be an uphill task for the Congress to reclaim MP. But anyways, it will be interesting to see common man Chief Minister Shivraj Singh Chauhan battling against young Jyotiraditya Scindia who comes from the royal family of Gwalior. M Singh via email Kleptocratic India MG Devasahayam’s article was very nicely written (gfiles, October 2013). 4 gfiles inside the government vol. 7, issue 8 | November 2013 The message is loud and clear; we are being ruled by crooks (majority of them). And our daily fights at each level for our rights and for our country’s good, is the only key which is going to save us from this misery. “The darkest places in the hell are reserved for those who maintain their neutrality, even in the times of moral crises.”—Dante Alighieri. Manish Mishra on blog Although I agree with the thrust of the article, the basic assumption that IAS is one of the finest civil service structures in the world is flawed. Consider the following responses from senior IAS officers from “one of the finest civil service structures in the world”: (a) If one brings to notice that an illegality is taking place, the answer is, “Yes, I know. I am helpless. Go to the court and get me an order”, knowing fully well that everyone involved will cop it before a decision comes from the court. (b) If one brings to the notice that the written orders are being disobeyed openly by citing contrary verbal orders, the response is, “I have given my written orders. There is no compulsion to follow my verbal orders. Bring this to the notice of the court”. (c) If footpaths and roads are being used for commercial purposes, the response is, “Why do the citizens patronise such establishments?” Maj Gen S Jatar (Retd) on blog We are really passing through a difficult phase. The corruption is rampant and the corrupt officers/employees/ businessmen are not shameful for their misdeeds. There is no fear of punishment. The time has come when the silent majority of honest persons including government servants should condemn corruption and corrupt people. Jai K Verma on blog www.gfilesindia.com
  4. 4. www.indianbuzz.co www.indianbuzz.com .com es th governm the rnment gfiles inside the government vol. is u vol. issue vol vol. 7, issue 8 | November 2013 o ol ssu ss November N m 5
  5. 5. Bric-a-brac hot & cold Divine help? mahant under seer’s spell S OBHAN Sarkar, the seer who had predicted that 1,000 tonnes of gold was buried under the temple in Unnao, used senior Chhattisgarh Congress leader Charan Das Mahant to put pressure on the government to dig for the elusive gold. Mahant has been a long time chela of Sarkar and was only too willing to oblige. It now appears that Sarkar told Mahant that if he can convince the government to dig for the gold, the Congressled central government would benefit from the discovery and would get a financial windfall. Sarkar also said that a highly pleased Congress party would then anoint Mahant as the chief minister of Chhattisgarh, where elections are to be held in November. At the moment, Mahant and Ajit Jogi are locked in a tight battle for supremacy in the State. If gold had been found, it may have indeed helped Mahant to realise his dream of chief ministership. To keep Sarkar happy, Mahant worked hard, meeting the Prime Minister and the Home Minister a number of times. It was reportedly only after a final nod from Sonia Gandhi that the government agreed to send the Geological Society for mapping the area and using its sophisticated equipment to establish whether there was any buried matter on the site. Interestingly, the seer has also been impressed by Rahul Gandhi to such an extent that he has told his followers that Rahul has the soul of Jawaharlal Nehru and would help the party win 400 seats. Sarkar is also of the view that Rahul would revolutionise and cleanse the current system of politics. g Rising star cp joshi charms rahul gandhi T HE grapevine is abuzz with news that senior Rajasthan leader CP Joshi is the rising star in the Rahul Gandhi camp. Joshi, who was made the chairman of the screening committee for Chhattisgarh elections, is said to have been instrumental in bringing Ajit Jogi on board and engineering a rapprochement between Jogi and Rahul. For a week before the announcement of tickets, Amit Jogi, the tech savvy son of Ajit Jogi, was a daily visitor to Rahul’s house. The two are said to have had long discussions on the selection of candidates, the topography of Chhattisgarh and the caste and regional character of the State. Joshi appears to have bridged the divide, with the result that Rahul agreed that Amit and Renu Jogi should contest the 6 gfiles inside the government vol. 7, issue 8 | November 2013 elections and Ajit Jogi agreed to step down in favour of his son. Ajit Jogi will contest the Lok Sabha polls, unless he manages to become the chief minister. In Rajasthan, much to the dismay of Ashok Gehlot, Rahul Gandhi, in a luncheon meeting with senior State leaders, wanted to know why Joshi was not being involved in the selection of candidates. Rahul also asked Joshi to give a list of his candidates. It now looks as if the anti-Gehlot group is back in business and many among them are likely to get tickets. While Rahul is impressed by Joshi’s head for numbers, facts, figures and statistics, could it also have to do with the fact that Ahmed Patel patronised Gehlot to the exclusion of Joshi, and now the wheel had turned full circle? g www.gfilesindia.com
  6. 6. INSIDE EYE ILLUSTRATIONS: ARUNA Angry young man bihar cong team faces rahul’s ire R AHUL Gandhi is frequently angry these days. The latest incident happened when a delegation of the Bihar Congress went to meet him. They favoured a tie-up with Laloo Prasad Yadav in Bihar. They impressed upon Rahul the need to stitch together the alliance at the earliest, so as to provide an alternative to the BJP in the State. But what they got in return was a huge dressing down from Rahul, who told them that they were not worried about either the party or the workers, but only about their own interests and survival. He said that instead of talking about party programmes and how to strengthen the Congress in the State, they were interested in samjhauta with another political party. The AICC vice-president, who is known to be against alliances and advocates the theory of ekla chalo, made it clear to the delegation that there would be no alliance in Bihar. This has disappointed a number of leaders, who know they cannot win without the support of Laloo Yadav. But, as the word spread in Congress circles in Bihar, party workers were reportedly happy at the stand taken by Rahul. g www.indianbuzz.com gfiles inside the government vol. 7, issue 8 | November 2013 7
  7. 7. Bric-a-brac hot & cold Supreme power hooda brooks no interference H ARYANA Chief Minister Bhupinder Singh Hooda has grown so powerful that he has dared to defy the Congress Party. This was evident recently, when the Haryana Government appointed three State Information Commissioners. Sources disclosed that a powerful Congress general secretary had desired that pro-Congress persons be appointed as State Commissioners. He had also recommended three names. But, Hooda instead appointed his own nominees. It is learnt that the first appointment of Samir Mathur, a 1981 batch IAS officer, who was working as additional Chief Secretary, Home Department, on a three-month extension, was done at the instance of Chattar Pal Singh, former PS to the Chief Minister who recently became a UPSC Member on the recommendation of Hooda. Second appointee, Hemant Atri came from the heartland of Rohtak. Atri was working as Resident Editor of Bhaskar’s Rohtak edition. It is learnt he managed the paper well and reportedly protected the interests of Hooda till the time he worked there. The third appointee is veteran journalist Yoginder Gupta, who retired from The Tribune and is an old friend of the Chief Minister. Gupta used to help Hooda when he was a small time Congress leader and used to sit in Tribune office to keep Gupta in good humour. Hooda has repaid his debt by appointing him to such a prestigious post. Apart from this, the Chief Minister has also appointed another scribe, Pramod Vashista, as his Media Advisor. Vashista too was working with Bhaskar and reportedly protecting the interest of the Congress and the Chief Minister. If any journalist knows Hooda and is looking for a job, he can contact the Chief Minister as there still is a vacancy in the State Information Commissioner. In the election year, Hooda needs the blessings of the media desperately. g 8 gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  8. 8. NMDC AD GROUP HOUSING PROJECT For Civil Servants “Commonwealth Co-operative Group Housing Society Ltd” has been formed by a group of senior Civil Servants by enrolling members from IAS / IFS / IPS / IFOS / IRS / IES / Railways and other services not below the rank of Deputy Secretary to GOI. Limited membership is also open for PSUs, Bankers, eminent professionals such as CAs, Advocates, Business persons and Academicians. The society has already received more than 200 memberships. The objective of the society (in brief) would be to make available built-up flats / land for construction of flats for state-of-the-art high-end residential accommodation at prime locations to its members in GURGAON / NOIDA / DELHI. www.indianbuzz.com For any further clarification/application form contact Prem Gupta, Chartered Accountant gfiles inside the government on email: cmscghs@yahoo.in or mobile: 09810137909, NEW7,DELHI vol. issue 8 | November 2013 9
  9. 9. COVER STORY scam nsel Living T HERE is a saying in Gujarati that if your mother is serving and even if you are way behind in the queue – the least you can expect is an extra ladoo (sweets) in your plate. This explains why both Jignesh Shah and Ketan Parekh are managing to hoodwink the law even after committing grave financial crimes. Unlike Harshad Mehta, Hasan Ali and A R Telgi, Shah and Parekh have managed to evade the law because of their political connections. “NSEL fraud makes the Harshad Mehta scam look like child’s play. Mehta, at best, cheated a few banks, while NSEL has eroded the confidence of the entire nation in electronic commodity or stock exchange platforms,” quipped a commodity broker. Jignesh Shah managed to retain his position by convincing the MCX board to allow him to stay on for some time? Till the last minute, it was expected that Shah would step down owning moral responsibility for all that has happened. But, till date, there is no sign of Shah’s arrest or ban on the unlawful trading activities in La Fin, FTIL, MCX, MCX-SX, NSEL and other companies in his group. So far, only those who owe him money or Despite the National Spot Exchange (NSEL) scam running into a whopping Rs 5,600 crore, and its details out in the open, the authorities seem reluctant to act. While arrests have been made in all major scams—from Hawala to 2G to Coalgate—Jignesh Shah, the alleged kingpin behind the multi-crore NSEL scam, continues to roam freely. After the gfiles story in June 2013, NSEL operations were halted. But investigations began only after the gfiles cover story in September 2013. Still, Jignesh Shah roams scot-free. Sources disclose that Shah has engaged some of the best lawyers in the country to pre-empt any government move to arrest him. Is the law for scamsters or for exposing the truth? Neeraj Mahajan analyses the scam and brings the latest updates on the developments taking place in the law enforcement agencies and the Ministry of Consumer Affairs. 10 gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  10. 10. Dangerously P those to whom he owes money seem to be feeling the heat of the investigations. The only aberration to this rule has been how Shah, Joseph Massey (MD MCX-SX) and Shreekant Javalgekar (MD MCX) were forced to resign from the board of MCX-SX a fortnight ago. Frankly, would you call a person or company that has been accused of being ‘dishonest’, involved in insider trading, making false claims, holding unproven deposits in client account, unaccounted brokerage income, unexplained cash and jewellery, ’fit and proper’ to run commodity or equity exchanges? Looking at it purely from a management or governance perspective, does the promoter, who appoints people to run his company, have no responsibility towards the stakeholders that he took the right decision by selecting and monitoring the right people? Similarly, what would you call a company whose Managing Director, Assistant Vice-President, Business Development, and Assistant Vice-President, Warehousing, are cooling their heels behind bars for allegedly defrauding some 13,000 investors? RELIMINARY investigations by the Income Tax authorities seem to suggest severe lapses, mismanagement, cheating, criminal breach of trust, conspiracy and forgery at NSEL. It was not functioning as a spot exchange as it was supposed to be. “If the NSEL management and Board of Directors say that they failed to see piles of bounced cheque and forged warehouse receipt right on top of their table, they are either incompetent or impractical,” says a broker. A few other instances of misdemeanours of the company are: exchanges are not supposed to do so. been found to be rigged. safety with 100 per cent stock collateral, 10-20 per cent margin money and post-dated cheques. These were empty promises. operate in nine States, including Maharashtra. The fact GOVERNANCE nsel jignesh shah Unfit and im Yet, ‘Operation proper Rescue Jignesh Shah’ seems to orchestrated by his friends in high be in full force, places by NEERAJ MAHAJAN W ULTS: 25-28 05 30-33 02- September 5, 2013 VOL. 7, ISSUE by NEERAJ MAHAJAN Haven for gamblers A but in no links with the l (India) L gfiles inside the governme ent vol. 7, issue 7 | October 201 13 13 at Jg Jignesh Shah the launch of . MCX-SX in Mumbai glo global keeping with off trades in prices trends nt n of national preside According to aders Tra of All India Confederation e reaa, one of the (CAIT) B C Bhartyi racted people get attr is that there ding costs nitial set-up mputer need is a com online onnection for hysical nlike in the ph nt marneed 5 per cen mmodrticipate in com e able to means you are ing with mes more tradi ems easy ey. All this see st invescisely why mos w what wh they ney because The NSEL is a sordid saga g on what of loot, treachery has no bearing and defiance of the governme expertise experience or nt. Are we waiting to solemnise this gest comlarg MCX is the loot, or are we e in India allowing Jignesh Shah ures exchang to go scot-free for hare while sh reportedly creating a mess r cent market in the financial D Derivatives ommodity & system? If this malaise has is not corrected, the X) h a marLtd (NCDE day is not far when the nt and the stock market matrix of 25 per cen may collapse — for, make y ity Exchange Multi-Commod no mistake, not realise What many do e of is that the volum in g modities tradin commodities f r than that of India is bigge t. the stock marke related Commodities per constitute 58 industries GDP cent of India’s 12 Public Interest Litigatio ublic T SSS J T OG p7 IRR 8 IN G RS FI 10 gfiles inside the government vol. 7, issue 6 | September ernment gove gfiles inside the 3 | June 2013 vol. 7, issue 13 n THE HON’BLE SUPREME COURT OF INDIA, NEW DELHI (Extraordinary Civil Writ In the Matter of Citizens Jurisdiction) of India through gfiles: A magazine on governanc office at: e with its corporate (Registered with Registrar of Newspapers for India, vide Regn. No. DL Eng/2007/1 9719) 118, IInd Floor, DDA Site — 1, New Rajinder Nagar, New Delhi — 110 060 ……Petitioner VERSUS 1. Jignesh Shah, Founder Chairman and Group CEO, Financial Technologie 2. Prof KV Thomas, s & MCX Group Union Ministry of Consumer X Affairs, Food & Public 3. Pankaj Agrawala, Distribution IAS, Secretary, Consumer Affairs 4. Ramesh Abhishek, IAS, Chairman, Forward Markets Commission 5. UK Sinha, Chairman, (FMC), Mumbai Securities and Exchange Board of India (SEBI) 6. Chairman, Warehousin g Development and Regulatory 7. Chairman, Nafed Authority (WDRA) …… Defendants 8. Governor, RBI S AH AH JIG ES H JIGNE JIGNESH SHA www.indianbuzz.com an MCX SX h irman of MCX-SX and Vice-Chai T OT OT AT NAL SPO ATIONA SP D AM NATIONAL LTD SCAM XCHA G LT EXCHANGE GREAT R GAMBLE P Chidambaram lot sources, a whole According to business ations and murky It’s an amazing story of a small-time trader, Jignesh Shah, who manipula ted while fooling almost everyone the NSEL in the system. The NSEL is a classic case of the failure of governance in India—of a non-existent regulator and conniving bureaucra politicians, and every technique ts and worth the name being used to deceive and trap greedy investors to make billions overnight. there are many Jignesh Shahs Who is behind Jignesh watching, ready to Shah, sharing the exploit the governance booty of the loot—a veteran system that appears Maratha to be helpless, toothless politician, or the entire and defunct. financial governance Anil Tyagi and Neeraj Mahajan system, or greedy business take you into houses? How the treacherous world of can a governance system the NSEL and be so toothless explain how the governan that not even a single FIR ce system can be is registered taken for a ride by anybody against the alleged fraudsters with the right ? What is the kind of network. In the government waiting for? coming months, this Where has the will have a cascading effect money gone? Who will on the already account for it? struggling financial market. lic interest A gfiles pub n the attentio initiative for e Court of the Suprem THE UNI Finance Minister Loot in name of th Lo e farmer! This story is about possibly y about the biggest scandal of the decade spawned cade cade spawned by the combinat d ion of a greedy businessman, a usinessman, lackadais n lack ical regulator, ever-willing investors looki ing in investors looking to become millionaires overnight, res overnight, shrewd politicians shre and cunning but easily pliable easily b bureaucrats. The story is about the unregulated e unregulated an reportedly and illegal National Spot Exchange Spot E ot o Lim Limited (NSEL). A story of billions of rupees changin ns rupees changing u hands in the name of the farmer but there rmer but e being no produce or storage in the market, the e yet the commodity— th which cannot be legally annot b ot o traded—being traded. trad m nd es ndi com lesind a.com gfilesindia 12 exchanges 0 farmers have BOUT 2,50,00 in India committed suicide f one-and-a hal in the last Crime the National decades, says s to 45 . This amount Records Bureau is the every day. Why farmer suicides drasresorting to such Indian farmer farmer so Why is the Indian tic steps? uras prices of agricult desperate even Why continue to rise? al commodities cutthis happen despite are we seeing and h in agriculture ivting edge researc ed land product pesticides, improv s harvests? ity and better the odity derivative not getting is d the comm If the farmer is going? Who The purpose behin lity, poverty reduction and y where is it po money, w ling the stabi sed economy, manipulating and controllling It ket market was price dities? ent in a market-ba a money agro commo lopm prices of mic that should economic deve et has become that the profits farmers appears reality the mark one to the farm- Com Commodity COVER STORY making factory that has STORY TO exposé 6 YAM MG DEVASAHA HOPE FROM DURGA p82 The office of Financia l Technologies gi r markets agric markets T Newton’s law of gravity –What goes cials reporte up must come ITH the Rs down – does dly spoke to Shah 5,600-crore not apply. finalisin Whatever the before NSEL scam out g the Mayara official stand, in the open, privately, which, m everyone in the the issue now many say, is eye-was Report, government, is whether Shah should be regulah. tors and the Wasn’t given a ‘fit and investors do proper’ Shah not want commit the KC Chakrabarty subcertificate to run to be harmed the spot exchang tee, headed by . The investor e. If point of he does not the RBI deps’ uty governo get this certifica view is that, if r, instituted to anything hapte, not pens only will Jignesh assess the to him, they might systemic impact be unable to p g never recover e of the NSEL run thei money. NSEL, he will their crisis c i i and pinpoint d be debarred from “Good or bad, the violation run- an approac Jignesh is Strange ning the MCX of laws? an MCX-SX nd hable face of ly, the sub-com too. But If FTIL group. it seems that mittee did anything happen not find broader effor are on rts s to him, BSE, to camou- NSE systemic flage the scam and the brokers tion. That t and confuse the d will be affected issue Sharad to such an extent Saraf, the co that he gets the th cer- Inve tificate. This will m mean a vict him, despite the u un scam that has rocke t ed Clearly, if you are Sh e SURVEY RES DELHI POLL VE V OV COVE STORY COVER S culture distance himself and claim to be una- Preside ware of the goingsnt (Business on inside NSEL. Development) But NSEL co-foun Reliance Industr at It has been der, MD and ies Ltd. reliably learnt CEO Anjani Sinha, that, some time ago, who signed an Reliance Capital affidavit accepting blame had HE possibility tried to take for whatever over MCX but of an Ambani happened at the someconnection behind how the deal spot exchang could not go e, raised more doubts through. bail-out plan cannot the Shah Even now, if than he laid the corporate to rest. as, be ruled out The fact that entities besides Patel, are ready, the Sinha filed his Anil Chandanmal government affidavit Singhvi f before the Econom may go to any extent , the founder of nomic Offence ic to facilitate proxy advisor s Wing firm (EOW) is no Reliance ry IIAS, IIAS, who is playing less intriguing—con a key fessions before - role in the e police officers crisis, is an old have Ambani no legal sanct tity. Besides loyalist. Singhvi , Sinha, was who presided Vice-Chairman ov the shut-do over and wn of Directo the Magadh, r Ah Ahmedabad and Safal Natural of Reliance exchanges was fal es, Resources Ltd R picked up by i k Shah to of the head the NSEL. Anil Dhirubh Still, if S ai ms to Ambani be in th Group, rove before moving to able Ambuja Cements. and ly, a), d - 2013 www.gfilesindia.com w gfilesindia gfilesindia. www.indianbuzz.com gfiles inside the government vol. 7, issue 6 | September 2013 11 gfiles inside the government vol. 7, issue 8 | November 2013 11
  11. 11. COVER STORY scam nsel is that Maharashtra Agriculture Department cancelled NSEL’s direct marketing license on December 26, 2012. · What else do you call a company that announced a payout plan on August 14, but was unable to stick to schedule even once and defaulted on payment schedule ten times in a row. That’s when NSEL holds over 90 per cent market share of National Bulk Handling Corp Ltd, which runs the nation’s largest warehousing facilities. paired contracts. They were just paying the difference in prices between the spot and futures contract for the same commodity. mandatory margin money was not being collected from all those using the MCX and NSEL platforms. Apart from this, positions of some of the investors were being revealed to others, giving them an unfair business advantage. This has been corroborated by the fact that Anjani Sinha’s wife, Shalini Sinha’s company, SNP Designs, was allowed to trade worth Rs 40,000 crore on MCX without paying any margin. The heavy losses were written off. Apparently, SNP also had business relations with Mohan India, one of NSEL’s largest debtors. S O far as the High Networth Individual (HNI) investors are concerned, the moot question is: are they as sinned against as they claim? Why did they take advantage of the corrupt system till the going was good, and are complaining now when they lost money? “They were using NSEL as a private club. HNI investors all along knew what they were getting into when they started trading in these unregulated exchanges. If the exchange was functioning without the oversight of an independent board of directors, the brokers were party to it. Why are they complaining now?” asks Shriram Subramanian, MD, InGovern, a corporate governance research firm. Another big question is what happens to the money. The NSEL Investor’s Forum officials say that they are working with the Economic Offences Wing (EOW) and others to recover the money. They are sadly mistaken if they think that the EOW and the Income Tax authority’s job is to recover money at their behest and hand it to them. First, in a white collar crime, money recovered becomes the case property which needs to be produced as evidence. It cannot be handed over, even to the rightful owner, till the case is finally disposed off or the court orders to do so. Second, criminal investigation wing of the Mumbai Income Tax department is asking investors to produce evidence about the source of their funds and whether they paid tax on the income from commodity trading. Some of the other details being sought are about brokerage and commissions’ transactions for investments in the spot exchange. This is proving to be a booby trap, as failure to provide the details sought can lead to fine of up to Rs 10,000 under Section 272 (1) (c) of the I-T Act. “Law enforcement agencies are not recovery agents to recover money from defaulters of defaulters. Tomorrow, if Dawood gives you a list of people who owe money to him, you may not allow him to go free till the last of his borrow- So far as the High Networth Individual (HNI) investors are concerned, the moot question is: are they as sinned against as they claim? Why did they take advantage of the corrupt system till the going was good, and are complaining now when they lost money? 12 gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  12. 12. TURNING A BLIND EYE: The members of the Advisory Board of the Financial Technologies (India) Limited ers has paid him his due. Jignesh Shah too should not be allowed to go free. You are setting a wrong precedent,” said a senior Delhi Police officer. Significantly, this is not the first time FTIL promoters or employees have been accused of serious penal offenses. Immediately after MCX became the first exchange in India to initiate evening sessions to coincide trading with Tokyo, Shanghai, London, New York exchanges, the Central Board of Excise and Customs (CBEC) issued a notice is still pending. This apart, as many as three criminal cases are pending against Joseph Massey and one against C Subramaniam, one of the longest serving Non-Executive Director and shareholder of FTIL, who initially promoted a company called Worldwide Technologies. The company’s latter avatar is today called Financial Technologies. Anil Lal Chetta filed a criminal case (No. 1909/02) against Subhash Dalal (Director) and Joseph Massey (Executive Director), Vadodara Stock Exchange, for illegally declaring him “defaulter” and auctioning his membership. The case is pending before the Chief Judicial Magistrate in Vadodara. www.indianbuzz.com In another case, the Government Labour Officer, Vadodara, filed a criminal case (No. 1831/97) against Joseph Massey and Vadodara Stock Exchange for noncompliance of Minimum Wages Act and non-filing of annual returns. This case is also pending before the Judicial Magistrate, First Class, Vadodara. Similarly, Harish Chand Jain filed a criminal case (No. 1288/2003), alleging that Joseph Massey, the then Managing Director of the Inter-connected Stock Exchange of India, and other officials were refusing to refund the admission fees and connectivity charges paid by him at the time of membership. This case is pending before the Chief Judicial Magistrate, Agra. In yet another instance, the CBI reportedly filed a criminal case against C Subramaniam (No. 16/2001) under the negotiable Instruments Act, 1871, for attempting to defraud Central Bank of India, Janpath branch. The case is being considered by the CBI Special Court, Tis Hazari, New Delhi. Apparently, one of the reasons why Shah has not been touched so far is reportedly because of an understanding between the Congress at the Centre and Sharad Pawar’s Nationalist Congress Party (NCP) in Maharashtra. “Someone close to Pawar is believed to have invested lot of money in Jignesh Shah’s company, which he suddenly withdrew and this may be the reason why MCX’s settlement guarantee fund suddenly shrunk in size,” sources said. A NOTHER twist in the tale is how former MD and CEO of NSEL Anjani Sinha denied the August 14 affidavit and claimed to have “filed it under duress.” Sinha is now saying that he was made to sign the old affidavit by the NSEL board, in the office of the exchange. This seems to coincide with the version of former NSEL Assistant Vice-President, Business Development, Amit Mukherjee’s claim that he and others were made scapegoats to save Shah and other “influential people” who were involved. Both Mukherjee and Jai Bahukhandi are in police custody and have agreed to become prosecution witnesses. Meanwhile, the EOW arrested Nilesh Patel, the son-inlaw of Shankarlal Guru, who resigned as the chairman of NSEL. Patel is the managing director of NK Proteins Limited, the biggest of the 24 borrowers of National Spot Exchange Ltd (NSEL). Patel’s company allegedly raised funds from NSEL on the pretext of a castor seed contract, gfiles inside the government vol. 7, issue 8 | November 2013 13
  13. 13. COVER STORY scam nsel Curiously, SEBI chief general manager D Ravikumar, without depositing any collateral in the warehouses. This money was allegedly siphoned off to fund a joint venture while overruling Sahoo’s concerns, wrote, “initiation of an for export of castor oil with a Gujarat-based industrial enquiry may not by itself disqualify the concerned entity house. NK Proteins, which owes around Rs 930 crore to from being considered as fit and proper, especially when NSEL, apparently had no intensions of returning the the outcome of such an enquiry is not known”. According to reliable sources, the 2007 income tax raid money, sources said. Meanwhile, enquiries by the Forward Markets itself was stage-managed. The main purpose of the raid Commission (FMC) have revealed over 2,000 instances of was not to recover money and assets, but to trouble Shah mismanagement in the exchange over the past few years. enough to make him arrive at an unofficial settlement. One This is bad news for Shah, whose name figures among the of the officers behind the raid is an informal ‘economic key management personnel of the spot exchange between trouble-shooter’ for Shah while another is holding an FY06 and FY12 and was only dropped in 2012-13. He was important post in SEBI today, sources said. Though the raid was targeted on FTIL, MCX and Shah, the key management personnel in 2009 when the decision was taken to go ahead with “paired contracts”—against no undisclosed income was claimed to be recovered from the rules for spot exchanges was taken. Interestingly, them. Only Rs 1 crore was claimed to be seized from FTIL this list kept shrinking every year and Anjani Sinha and Rs 1.15 crore from C Subramanium, in addition to Rs was the only person in the list in 2012-13. It is reliably 17 lakh from AM Futures and Rs 38 lakh from RJ learnt that in 2007 some highly placed IRS officers Commodities. On its part, FTIL was charged with observed instances of bungling in the withdrawing a bogus claim of Rs 18 Jignesh Shah empire. Based on their Based on a tip-off, crore in depreciation, while Reymount tip-off, an Income Tax ’search and an Income Tax ’search Commodities, owned by a Dubaiseizure’ operation was conducted on and seizure’ operation based NRI businessman, was accused Shah, FTIL, MCX, their other directors and brokers on June 19, 2007. was conducted on Shah, of accepting unproven cash deposits of Rs 15 crore from 856 people across the FTIL, MCX, their other country whose “identity and OLLOWING the raid, MS Sahoo, directors and brokers on creditworthiness” could not be proved. the then Director (Securities) in June 19, 2007 Interestingly, one of the entities the Finance Ministry, wrote a under the income tax scanner in 2007 confidential DO to MS Roy, ED of SEBI, enclosing documents received from the Central was also found to be involved in the Kochi IPL Board of Direct Taxes. “Though the above documents do fiasco. But Reymount Commodities, having its registered not provide final findings, these provide adequate basis to office in Chennai and another office opposite the Police conclude prima facie that Financial Technologies, MCX Commissioner’s Office in Pune, deserves a special mention. and Jignesh Shah are not fit and proper to acquire shares Though the company, promoted by Muhammed Abdul in stock exchanges.” He was referring to a bid by Shah to Kareem Faisal PV, PV Shamusudeen and K Satya Prasad, acquire 5 per cent stake in the Delhi and Vadodara stock was suspended on July 7, 2007, “for various violations/ irregularities”, its website still claims to be “a prime exchanges. “Sebi is advised to defer any proposal to acquire shares member in MCX India”. According to sources in the in stock exchanges by these entities, until CBDT issues a Intelligence Bureau, the company is allegedly involved in show cause notice to them or clears them of any tax helping banned Islamic terrorist outfits like SIMI and Indian Mujahideen to regroup and form a combined base liability,” he advised further. Strangely, one of the annexures in Sahoo’s note was a in Kerala. With such dubious friends and associates, Shah letter dated from SSN Moorthy, Director-General Income can be anything but fit and proper. But the issue is, who will pierce the corporate veil. Tax (Investigation), addressed to the Member Investigation, Central Board of Direct Taxes, giving details of Technically, though FTIL holds almost 100 per cent in the amount or assets seized from FTIL, C Subramanium NSEL, both are different companies and the (Director, FTIL), Reymount Commodities (commodity promoters of NSEL and FTIL are common. But, since the broker), AM Futures (commodity broker) and RJ promoters are common, they should at least be held accountable for their lapses. g Commodities (commodity broker). F 14 gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  14. 14. www.indianbuzz.com gfiles inside the government vol. 7, issue 8 | November 2013 15
  15. 15. EXPOSÉ land deals haryana Where land sharks rule The nexus between politicians and builders in Gurgaon is responsible for largescale loot of public resources in the millennium city by NARENDRA KAUSHIK A MIT Jain, Director-General of Federation of Apartment Owners Association (FAOA), frequently draws a parallel between Gurgaon, the millennium city abutting South Delhi, and Mandwa, a hamlet near Mumbai made famous by Hindi film titled Agneepath. While in Mandwa, Jain points out, criminals multiplied their income through smuggling of narcotics, in Gurgaon, builders and developers do it through shady property deals. Jain would know. The FAOA, a group of 35 apartment owners associations from different parts of the country fighting against builders for upholding interests of apartment residents, gets 24 of its enrolments from Gurgaon alone. The Federation 16 gfiles inside the government vol. 7, issue 8 | November 2013 has taken over some 20 cases from apartment associations against the builders. Out of these, half a dozen are against DLF Ltd, arguably the largest commercial estate company in the country. In a case pertaining to Silver Oak, the first apartment developed by DLF, the FAOA is awaiting an order from the Supreme Court. Jain accuses the Haryana Government of partnering with DLF and other builders to rip off every ounce of public resources in Gurgaon. “It’s not collision. It’s a partnership. The system is run by politicians and builders together,” Jain alleges. Surprisingly, despite having a booming market where prices have multiplied several times in the last decade or so, the Haryana Government, according to Jain, has kept the circle rate ridiculously low and allowed people to park their black money in the city. Jain’s accusation finds an echo in statement of Raman Sharma, President of the Progressive Gurgaon Forum (PGF), an umbrella body of around 68 Resident Welfare Associations (RWAs). “The Town and Country Planning Department (TC&P) is there to benefit the builders,” he says. The Forum has filed close to 200 complaints against the builders and the department in the last four years. The department is spearheaded by a Director-General and represented by a Senior Town Planner in Gurgaon. Sharma also has five complaints pending before the Lokayukta, the anti-corruption ombudsman in Haryana. Sharma has accused the builder of encroaching his residential society, www.gfilesindia.com
  16. 16. Malibu Towne in Sector 47, on open space (common area). “The builder has constructed a telephone exchange and raised electric infrastructure and other things on 15 acres. The market value of this land is around Rs 375 crore (Rs 25 per acre),” he claims. The Malibu Towne builder has not handed over the common area to HUDA (Haryana Urban Development Authority) even nine years after the launch of the residential society, though the Haryana Development and Regulation of Urban Areas Act, 1975, stipulates that the builder should transfer the project to HUDA within seven years after the launch. In fact, the most shocking part is that none of the over 920 licensees, who have been granted licenses by the TC&P Department till October 11, 2013, in Gurgaon, have transferred their projects to HUDA for maintenance. HUDA, headed by a Chief Administrator in Chandigarh and an Administrator in Gurgaon, has also www.indianbuzz.com done nothing to take over these projects. Sharma charges Gurgaon builders with not doing enough to provide proper roads, treated water, sewerage, solar water heating and community centre, etc., to their residents. Sharma puts the quantum of scam on account of construction in common area and its non-transfer to the local agency by the builders at Rs 1,80,000 crore. But, the total property scam could run into much more—according to experts in Gurgaon’s estate market, it could be anything between Rs 4,00,000 crore to Rs 5,00,000 crore in the last nine years alone, if one were add up CLU (Change of Land Use) certificates the government grants to the builders and developers to the non-transfer of common area to the HUDA. Haryana’s Bhupinder Singh Hooda Government allegedly collects Rs 2 crore underhand for CLU for every acre of land. The CLU apparently allows influential people like Sonia Gandhi’s son-in-law Robert Vadra to become ultra-rich overnight. Congress MP and Hooda’s bête noire Rao Inderjit Singh has demanded a probe into licensing of 21,000 acres of land by the State Government in first eight years of its tenure. Hooda, in turn, has pointed out that his government even granted license to a collaboration between Inderjit Despite having a booming market where prices have multiplied several times in last decade or so, the Haryana Government, it is alleged, has kept the circle rate ridiculously low and allowed people to park their black money in the city and Unitech for development of a colony on 83 acres of land, under the ‘small farmer’ norm. T HERE are strong indicators of the Haryana Government’s complicity with the builders in Gurgaon. For one, the Government has till date never punished a builder for violations of the 1975 Act. It has never moved beyond cancellation of license and invoked Section 10 of the Act, which prescribes maximum of three-year jail and fine to an offender. It also has not invoked Section 11B of the Act, which empowers the police to arrest such an offender. On the contrary, the cancellation of license is invariably revoked after some time, allowing the builder to go scot-free and resell his plots/flats at a much higher rate. A befitting example of the government’s soft and one-step-forwardtwo-step-backward approach is Mayfield Garden, a 327-acre township developed by five builders near a star hotel in Gurgaon. On February 4, 2012, DG TC&P T C Gupta cancelled all 26 licenses of the five builders and put an embargo on further sale of plots after his Senior Town Planner confirmed that some of the roads were in ‘worst condition’ and the builders were yet to construct community building. In addition, the builders had raised a commercial market in a place earmarked for a dispensary in the approved layout plan. The cancellation was revoked on September 5, 2012, after the developers gave it in writing that they would lay water lines, carpet the roads and provide sewerage and parks. The internal development was to be done within six months (before March 5, 2013). But none of this has happened. In the meantime, the Haryana Lokayukta has issued notice to Gupta, gfiles inside the government vol. 7, issue 8 | November 2013 17
  17. 17. EXPOSÉ land deals haryana FIGHTING THE BUILDERS’ MAFIA: Raman Sharma, Dharambir Yadav and Amit Jain on a complaint filed by Sheetal Residents Welfare Association, alleging Gupta’s complicity with the developers. Dharambir Yadav, President, Sheetal Residents Association, has alleged that Gupta “knowingly and intentionally favoured the licensee companies for not prosecuting the developers for cognizable offences, committed by them in construction of illegal independent floors by dividing the plots vertically, in contravention of prescribed rules and has failed to recover the public money on account of regularisation fee of illegal independent floors”. Gupta has denied the allegation and claimed to have initiated action against the colonisers. Jain cites Kunskapsskolan Eduventures Limited, a school offering K12 education based on KED programme for Indian and International students, as another example of builder-government complicity in Gurgaon. The school began its first session earlier this year. DLF gifted five acres of land, earmarked for 80 plots and a park, to the school in April 2009, much to the dismay of resident welfare associations. 18 gfiles inside the government vol. 7, issue 8 | November 2013 J AIN raises questions on the functioning of the judiciary on the basis of cases pending against builders in the Supreme Court, and what the Punjab & Haryana High Court did in January this year on the petition of residents of DLF Phase I against the Kunskapsskolan School. The High Court allowed the petitioners to withdraw their plea, though the latter claim to have never asked for it! Since 1981, when the TC&P gave the first license to DLF to develop a high-rise apartment building, less than half-a-dozen licenses, out of over 924 licenses approved, have been cancelled in Gurgaon. But not Some observers put the quantum of scam on account of construction in common area and its nontransfer to the local agency by the builders at Rs 1,80,000 crore. But, the total property scam could run into much more a single builder or developer has had to face prosecution or arrest as stipulated in Section 10 and Section 11 B of the Haryana Development and Regulation of Urban Areas Act, 1975. “Why does the department not invoke Section 10?” asks an intrigued Dharambir Yadav. On September 13, 2013, DG, TC&P, Haryana, withdrew approval of demarcation-cum-zoning plans of the licensee, Countrywide Promoters Private Limited, for developing a residential colony over 108.069 acres in Sector 102 and Sector 102-A, after it observed that the licensee had not cleared EDC (External Development Charges), amounting to over Rs 73 crore. The department directed the licensee to stop all development work at the site. But a visit by gfiles saw the development work still going on. Another evidence of governmentbuilder nexus in Gurgaon was a memo issued by the TC&P on September 15, 2008. “The license application of only those registered cooperative house building societies will be considered for grant of license, who have a collaboration with the builders/devel- www.gfilesindia.com
  18. 18. opers having the financial capacity to undertake the development and technical expertise in development of residential colonies,” the memo reads. It was clearly aimed at forcing cooperative societies to enrol builders into their projects. The move considerably increased the societies’ budget, defeating the very purpose of floating a cooperative society. T HE number of licenses granted has been highest in 2008 (150 out of 210 given for different projects in Gurgaon) till date. Is it a mere coincidence that this was a few months before the State went to polls? It is apparent that Hooda has used select bureaucrats to dole out land largesse to builders in Gurgaon and silence voices of dissent like that of Ashok Khemka, whistleblower IAS, who exposed Vadra’s land deal earlier this year. Is it just a coincidence that Sudeep Singh Dhillon, currently Principal Secretary to Haryana Chief Minister and former Principal Secretary, TC&P, and TC Gupta, currently Principal Secretary in Food & Supplies Department and former head of TC&P, have been in the forefront of taking on Khemka on behalf of the State Government? Gupta was held guilty of contempt of court last year by the Punjab & Haryana High Court for giving licenses to builders in contravention of a HC order. There are also allegations that Gupta has been involved in amassing property. In fact, there are many officers in the HUDA and the TC&P who face charges of graft. These include several Haryana Civil Service officers and engineers. Both the departments report to the Financial Commissioner and the Principal Secretary. While the TC&P is responsible for issuing licenses and mutation of land for development of residential colonies, www.indianbuzz.com T Justice delayed is justice denied HE pendency of hearing in the Supreme Court is what keeps Brigadier (retired) Madanjit Singh, a septuagenarian living in Naraina, and Neelam Tejpal, a widow residing in Janakpuri, on tenterhooks. Singh and Tejpal booked flats in Regency Park II in 1993. The flats were to be handed over three years later. But in 1998, DLF asked the duo and other bookers to pay over 50 per cent more on the paid amount (over Rs 4 lakh). The builder attributed the demand to increase in material cost. Forty buyers challenged the demand under Monopolistic and Restrictive Trade Practices (MRTP). In 2006, the MRTP decided the case in favour of the petitioners. But the developers, instead of giving the flats to them, challenged the order in the Supreme Court. Singh (78) says the apex court is yet to hear the case. In the last seven years, three petitioners, according to Jain, have passed away and 34 others have settled the matter with the developer. Many of the petitioners even sold off their flats. Singh, Tejpal and a third unnamed person are only ones pursuing the case now. “Now the developer is asking for over Rs 25 lakh. institutions, commercial structures and recreational avenues, etc., HUDA is supposed to provide infrastructure. HUDA Administrator in Gurgaon, Praveen Kumar, has himself been under a cloud since Khemka alleged in a report that the former’s mother Krishna Kanta, who hails from Hooda’s native village Sanghi, got a prime piece of usurped land in Faridabad when her son was Deputy Commissioner in Faridabad. Kumar Every year, one or two of us have quit. Tamasha bana ke rakh diya hai. I made a mistake. I could have raised Rs 20 lakh in rent alone,” Singh regrets. Apart from Regency Park II, a few other cases are also pending against DLF and others in the Supreme Court. These include the Silokhera case where DLF has challenged an order of the Punjab & Haryana High Court cancelling acquisition of land by Haryana Government in Silokhera Village. The agricultural land— around 170 acres—was acquired for public purpose by the government and then released to East India Hotels Limited for construction of a 300-bed hospital. The East India Hotels sold off the land to DLF and the latter secured the government’s permission to set up a Special Economic Zone (SEZ) there. The twojudge High Court bench noted in its order that the process “clearly shows the nexus between the respondent companies (East India Hotels Limited and DLF) and the government to defraud the public at large”. The case was challenged in the Supreme Court and is yet to be heard. Another case awaiting hearing in the highest court is about a cyber city building, developed on panchayat land belonging to Nathupur village. refutes the allegation. But his zeal to demolish illegal structures and improve infrastructure in Gurgaon has definitely proved to be a false starter. One example is that a part of the land freed from encroachments by him in DLF Phase V is being looked after by a top developer now. Estate experts believe that it is just a matter of time before the developer gets a license to build an apartment or commercial structure there. g gfiles inside the government vol. 7, issue 8 | November 2013 19
  19. 19. GOVERNANCE witch hunting mg devasahayam ‘Veekaysinghmania’ SATYAMEVA JAYATE ? The saga of incidents and events related to former ated former Army Chief VK Singh leaves one disillusioned llusioned with the possibility that truth shall prevail T HE distinguished civilian MK Kaw wrote thus: “Modi’s illadvised selection of strange bedfellows can result in the kind of fiasco that has followed sharing of the dais with maverick personalities like General VK Singh, former Chief of Army staff, who has been embroiled in controversies galore.….” (gfiles, October 2013). Indeed, the avalanche of lies about the General, flooding the media for over two years, is having their effect! There is this notorious Goebbels doctrine: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/ or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy 20 gfiles inside the government vol. 7, issue 8 | November 2013 of the State.” India’s ruling coterie and the ‘committed’ e media appear to be loyal r adherents of this doctrine! his While so, General VK Singh was the first comhe mando to become India’s ecome Army Chief and the best, havnd ing topped the Ranger Combat he Leadership Course of the US ered Army, considered the ‘toughest in the world’! ‘Commandos’ are ! defined as ‘a small fighting force specially trained for making quick ned destructive raids against enemy-held ids areas.’ All-pervading corruption and rvading resource-loot being India’s worst enemies, VK Singh started his fourstar career by daring them. Within y weeks, he took on the then Union k Home Minister and declined to er let loose the army in the jungles of central/east India. Had l/east he not done so, by now most of the tribals would have been annihilated and one-fourth www filesind a.com www.gfilesindia.com www.gfilesindia.com ww le in n om m
  20. 20. of India’s forest wealth lost to the mining industry! His exposure of kickbacks in defence procurements stopped carpetbaggers in their track. Post-retirement, he also took on the mighty nuclear cartel. In retaliation, he faced the combined might of the politicians, executive and media bearing on him. What powers lay behind this might, other than arms merchants and resourcelooters? Goebelesian canard and condemnation followed. There is a saying: “Lie is halfway round the world before truth has got its boots on.’ Eventually, ‘when truth Ev gets booted and spurred, the lie gets a s good licking’. Glimmer of some hope! Gli It a started with Vijay Kumar t all sta ted Singh’s date of birth (DoB) issue. He b was born son of an army officer in an Army Hospital in Pune, and the Hospit birth record says May 10, 1951. Just say a boy of 14, while awaiting results of whil his matriculation exam, he applied to the UPSC for admission to f National Defence Academy. The Defenc application had an inadvertent error, mentioning his DoB mentionin as May 10, 1950. 19 www.indianbuzz.com www in ianbuz www.indianbuzz.com w. nd u The twin ‘Swords of Damocles’ hanging over the head of the Army Chief have severely compromised the command structure, institutional integrity and functional efficacy of the Army Matriculation certificate, which he received later, records the DoB as May 10, 1951. The matter stood resolved in Indian Military Academy itself when the freshly commissioned 2nd Lt VK Singh was issued with an identity card bearing the correct DoB i.e. May 10, 1951. Issue was finally settled when the MS Branch used the same DoB during various Selection Boards for promotion of VK Singh to higher ranks of Brigadier (Sept 1996), Major General (Oct 2001 and Sept 2003) and Lt. General (Sept 2005). The controversy commenced with the curious ‘look-down policy’ initiated by the then Army Chief in 2006 to determine the ‘line of succession’ and to install a favourite as COAS in May 2012. For this purpose, the UPSC application form, mistakenly mentioning 1950 as his year of birth, was dug out and used as the ‘brahmastra’ to truncate General VK Singh’s tenure. Using blackmail tactics, VK Singh was called on the eve of his promotion as Lt. Gen and ordered to accept May 10, 1950, as his DoB! All these manoeuvrings and manipulations came to haunt the General after he assumed charge as Chief of the Army Staff! T HIS led to the General filing a ‘statutory complaint’ with the Defence Minister, which was rejected on the basis of a premanufactured legal advice tendered by the Attorney General trashing the birth and matriculation certificates and upholding a faulty application form. This forced the General to move the Supreme Court for justice. That this justice was denied to him is yet to become history. A well-drafted memorandum highlighting the injustice, sent to the President of India by over 1,200 former generals, brigadiers, colonels, majors, other veterans and civilians, was not even acknowledged! As this was raging on, seven eminent citizens—from civil and military—moved the Supreme Court, pointing out the Defence Ministry’s manipulations to cut short gfiles inside the government vol. 7, issue 8 | November 2013 21
  21. 21. GOVERNANCE witch hunting mg devasahayam the tenure of General VK Singh and the premature announcement of Lt. Gen. Bikram Singh as the Army Chief without finally resolving the DoB issue of the former. The basic issue was army’s institutional integrity, promotion of the obnoxious ‘line of succession’ killing merit and grave allegations against the Army Chief designate: fake-encounter death of a 70-year-old man in Jammu & Kashmir pending in the State’s High Court and serious cases of indiscipline and abuse by Indian troops in the Congo Republic, commanded by the then Major General Bikram Singh, being investigated by a Court of Inquiry at Meerut. Even before the petition was heard, led by a ‘Delhi-based English daily’, the media went viral calling it a communal PIL. In the event, the SC dis- missed it in limine, while allowing the proceedings against General Bikram Singh to continue in J&K High Court and Meerut’s Court of Inquiry. The dismissal is based on a clearance report given by Intelligence Bureau and a fudged file of the Cabinet Secretariat presented as original file by the Attorney General. Immediately after the PIL’s dismissal, RTI applications were filed in the Cabinet Secretariat and MoD for copies of this file, which till date have been dishonestly denied by these entities as well as the Central Information Commission. One could see clear machinations and manipulations to conceal the truth! T HE twin ‘Swords of Damocles’ hanging over the head of the Army Chief have severely compromised the command structure, The TSD tantrum T HE Technical Support Division (TSD) was created in 2010 in response to the November 29, 2008, dastardly attack on Mumbai by Pakistani terrorists, who were subsequently labelled by the media as ‘non-State actors’. The unit was set up following due procedures with all the requisite government sanctions. The TSD is a covert operation agency, activities of which are directly related to the safety of soldiers fighting on the borders, retribution on the enemy and the security of the citizens. By its very nature, TSD operation was ‘top secret’. In that event, even the existence of TSD should never have been publicised. Doing so could be treasonous. 22 gfiles inside the government vol. 7, issue 8 | November 2013 Yet on March 2, 2012, a leading magazine published a story that inter alia reads as below: “MOD officials say they are also concerned about the activities of a shadowy unit called the Technical Support Division within MI… Who the targets were and for what purpose, is still not clear.” The MoD conspiracy had commenced even while VK Singh was chief and intensified after he demitted office. TSD’s location, officials and its work were top secret and out of bounds. However, on August 16, 2012, at around 6 pm, a white Toyota Qualis came towards the premises of the TSD with two persons, later identified as Lt General (Retd) Tejinder Singh and the correspondent of the ‘leaky’ north Indian daily. Security personnel lodged a written complaint and the institutional integrity and functional efficacy of the Army. What is worse, it has skewed the civil-military equation heavily in favour of the former. We are witnessing this on the borders of Pakistan, where intrusion and killing of our soldiers have become almost a daily affair. The government and its minions succeeded in hounding out VK Singh. To achieve this, they went to the extreme of abetting virtual mutiny in the army by planting stories in a ‘Delhi-based daily’, suggesting that the serving Army Chief was engineering a coup to overthrow the Government of India. Within hours, in a well-calibrated outcry, several MPs, including the recently convicted Lalu Prasad Yadav, wanted the General to be summarily sacked and arrested! Even after a year-and-a-half, this matter was reported to the DirectorGeneral, Military Intelligence (DGMI). After three days, the DGMI asked the complainant to tear it off and destroy the hard disk of the computer on which it was typed! In September 2012, the former Defence Secretary (now CAG) initiated the ‘Board of Officers inquiry’, headed by Lt Gen Vinod Bhatia, to go into the working of TSD and received the report in March 2013. After six months, the ‘leaky’ daily came out with banner headlines: “Unit set up by VK Singh used secret funds to try and topple J&K government, block Bikram Singh: Army probe”. The leak had come from a former joint secretary in the Defence Ministry and the alter ego of the Defence Secretary-turned-CAG. As if on cue, the daily went into frenzy and whipped up the J&K angle, provoking pandemonium in the State Assembly! All the while, the present Army www.gfilesindia.com
  22. 22. PHOTOS: UNI blasphemy is yet to be probed and the seditious intent brought to light! Now to the Technical Service Division (TSD) episode which is bizarre as bizarre can be! (See Box). Divulging information about this unit is treasonous. Yet, there have been leaks galore and media has been ‘breaking news’ as if it was cricket match-fixing! F IRST it was the leaky ‘Delhi-based daily’. Then a ‘national daily’ entered the scene, cooked up an ‘interview’ with VK Singh and spun a false and preposterous story that he claimed ‘the panchayat elections of 2011’ as a major achievement of the TSD. There was backlash in the Valley and the same national daily went into frenzy by publishing a concocted story that the General has caused “an Chief has been playing ball like a meek surrogate, instead of defending the army unit and its officers. What is incomprehensible is that he took the opportunity to wind up the TSD, leaving the Indian Army with no covert operation and weak counter-insurgency capability. It is widely opined that if TSD had not been wound up, the recent Samba attack by Pakistan-based elements (wherein several soldiers including a Lt Col were killed) and many other incidents could have been avoided. There is also widespread belief among senior army officers that the scrapping of the TSD is a major reason for a spurt in cross-border intrusions over the past year, leading to several deaths and humiliation heaped on the country by China, Pakistan and even Myanmar. Whether there is a hidden agenda, one wonders? www.indianbuzz.com IN BETTER DAYS: Former Army Chief General VK Singh (right) with Defence Minister AK Antony at a function in Ooty extremely serious apprehension of militant attacks on more than 33,000 panches and sarpanches, as he had completely discredited and maligned the panchayat elections of 2011.” This was followed-up from ‘On Board the PM’s Flight to Washington DC’ with a front-page headline story: ‘VK Singh’s claims damaged India’s interests and caused enormous damage to the country’, obviously referring to money paid to J&K politicians. Ironically, this is already an open secret with former US ambassador to India David Mulford’s revelation in 2008: “Money from Pakistani and Indian intelligence agencies and from Saudi and other foreign extremists has further distorted Kashmiri politics, incentivised leaders to perpetuate the conflict, and perverted State and Central government institutions.” In this entire media tirade, there is not a whimper about who is responsible for the treasonous act of leaking the ‘top-secret’ document! India’s national motto proclaims ‘Satyameva Jayate’–“Truth alone shall Triumph”. But the reality is that so far only lies and falsehood have triumphed. That is why India has been morphing from a functional democracy to a dysfunctional kleptocracy and heading towards a ‘failed State’. In the prevailing atmosphere of lies and deceit, serenading ‘satyameva jayate’ is expressing fond hope of finding the needle in a haystack. But, then, hope is the very essence of human existence! g (The writer is a former Army and IAS officer. Email: deva1940@gmail.com) gfiles inside the government vol. 7, issue 8 | November 2013 23
  23. 23. GOVERNANCE witch hunting mg devasahayam GOVERNANCE AWARDS 2013 The Jury shri prabhat kumar shri anil razdan shri m b kaushal former cabinet secretary former secretary, power former special secretary, home shri r m malla former CMD, IDBI 24 shri vishnu bhagwan former chief secretary, haryana gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  24. 24. GOVERNANCE AWARDS 2013 Saturday, November 30, 2013 For invite, please email with designation and contact details www.gfilesindia.com summit@gfilesindia.in www.indianbuzz.com gfiles inside the government vol. 7, issue 8 | November 2013 25
  25. 25. GOVERNANCE civil services yogendra narain Obey, or refuse The time has come to amend the Government of India (Transaction of Business) Rules, 1961, so as to clarify the situation in case of disagreement between the Minister and the Secretary T HE contentious issue of Secretaries to the India shall be transacted in the Ministries, Departments Government, acting on the orders of the Minister, and secretarial offices specified in the I Schedule of the when a particular Secretary feels that the orders are Allocation of Business Rules in accordance with these irregular or illegal, had come into public debate after the rules. The Ministers have been assigned one or more 2G scam. One Telecom Secretary refused to implement departments under these rules. The other relevant rules for consideration are the the orders of the Minister while the other did. The followGovernment of India (Transaction of Business) Rules ing questions have emerged: 1. If the Secretary of a department gives his advice based 1961. Under this order, Rule 3 states as follows: Disposal of business by Ministries—Subject to the proon the relevant rules and regulations, is the Minister vision of this rule as in regard with consultation with other bound to accept his advice? 2. If the Minister decides to go against the advice of the departments and submission of cases to the Prime Secretary and orders differently, with or without reason- Minister, Cabinet and its Committees and the President, ing, is the Secretary bound to implement the orders, even all business allotted to a department under the Government of India (Allocation of Business) Rules 1961 shall be disif the Secretary feels that the orders are irregular? 3. If the Secretary is of the opinion that the orders given posed off by or under the general or special direction of the Minister-in-charge. by the Minister are illegal, what should the Secretary do? Another relevant rule is Rule 4 which talks about inter4. If the Minister over turns the advice of the Secretary and decides on a course of action which is not illegal but departmental consultation. This states as follows: 1. When the subject of the case concerns more than one which is against the previous policy of the Government, department, no decision be taken or order issued until all then is the Secretary bound to follow his advice? These questions are repeatedly coming to the forefront such departments have concurred or failing such concurboth at the Centre and the States. The issue is what should rence, the decision thereon, has been taken by or under the be the appropriate or correct relationship between a authority of the Cabinet. Under these rules, the Prime Minister and the Finance Secretary and his Minister. The recent report of the CAG and the action taken by the CBI further put a question Minister have the authority to call papers from any department for their perusal. The relevant Rule states: mark on this relationship. 1. The Prime Minister may call In the Government of India If there is no violation of papers from any department. (Allocation of Business) Rules, 2. The Finance Minister issued by the President of India Transaction of Business Rules may call for papers from any under Clause 3 of Article 77 of the but yet a major irregularity is department on a matter in which Constitution, distribution of subtaking place on the orders of financial consideration is involved. jects among the departments has 3. Any Minister may ask to see been made (including all attached the Minister, e.g. advancing the papers in other departments if they and subordinate offices or other time limit for submission of are related to or required for conorganisations, including public secbids to favour a select few sideration on any case before him. tor organisations under the departRule 8 of the Transaction of ment). It has been further ordered (as happened in the 2G issue), that the Business of Government of what should the Secretary do? Business Rules further lays down 26 gfiles inside the government vol. 7, issue 8 | November 2013 www.gfilesindia.com
  26. 26. another requirement. Under this rule, all cases of the nature specified in the 3rd Schedule to this rule shall, before the issue of order thereon, be submitted to the Prime Minister or to the President or to the Prime Minister and the President as indicated in that schedule. What is the responsibility of the department Secretary under these Rules? The relevant rule is Rule 11, which defines the responsibility of departmental Secretaries. This Rule states: In each department, the Secretary (which term include the Special Secretary, Additional Secretary or Joint Secretary in independent charge) shall be the administrative head thereof and shall be responsible for the proper transaction of business and the careful observance of these rules in that department. The question is whether Rule 11 over rides the Rule 3 of the Transaction of Business Rules because under Rule 3, the disposal of business is done by or under the general or special directions of the Minister-in-charge. Rule 11 clearly lays down that the Secretary of the Department shall be responsible for proper transaction of business and the careful observance of the Business Rules in that department. A LLOCATION of Business Rules are silent as to what the Secretary should do if he finds that the transaction of Business Rules are not being followed by the Minister-in-charge or if illegal orders are being passed by the Minister-in-charge, or if the decision of the Minister overrides the previous policy of the Government. The practice being followed so far, both at the Centre and the States is that once a Secretary disagrees with the Minister on facts or policies, than the Secretary submits the file for reconsideration to the Minister. This would prima facie also cover cases where there is a violation of the Transaction of Business Rules. However, if there is no violation of Transaction of Business Rules but yet a major irregularity is taking place on the orders of the Minister, e.g. advancing the time limit for submission of bids to favour a select few (as happened in the 2G issue) what should the Secretary do? NA ARU www.indianbuzz.com gfiles inside the government vol. 7, issue 8 | November 2013 27
  27. 27. GOVERNANCE civil services yogendra narain A N attempt was made to find out the rule position if any in the States on such matters. The Governments of Meghalaya, Daman and Diu, Tamil Nadu, Mizoram, Tripura Nagaland do not have any provision in their Allocation of Business of Rules to sort out differences of opinion between the Minister and the Secretary of the department. However, the following State Governments have made some provision in this regard. Jharkhand Under Rule 56 of the Transaction of Business Rules, whenever the Secretary of the department feels that deviation from Rules of Business has occurred, the Secretary has to bring it to the notice of the Minister-in-charge as well as the Chief Secretary. Chhattisgarh Under Rule 12 of the relevant rules, the Secretary of the department should bring such deviation from Business Rules, to the notice of the Minister and if the Minister does not agree with the departmental Secretary, he will bring it to the notice of the Chief Minister (through the Chief Secretary). Manipur Rule 58 states that any departure from the Business of Rules shall be submitted to the Chief Minister by the Secretary of the department. Assam The Chief Minister and the Chief Secretary can call for any file of any department. Under Rule 31.1 if there is deviation from the Rules of Business, it is the duty of the departmental Secretary to bring it to the notice of the Chief Minister. Haryana If there is any departure from the Business Rules, the file has to be submitted to the Chief Minister. Andhra Pradesh Any case of departure from the Business Rules has to be submitted to the Chief Minister. Further under Rule 32D, cases raising question of policy and cases of administrative importance have to be brought to the notice of the Chief Minister. Further under Secretarial Instruction No. 7, if the Minister passes orders contrary to the orders suggested in 28 gfiles inside the government vol. 7, issue 8 | November 2013 the noting and where Secretary of the department considers it necessary to recirculate, circulation shall invariably be interrupted and the files circulated to the Chief Minister through Chief Secretary. Secretarial Instructions No. 8 (A), (B), (C) and (D) of the Andhra Pradesh Rules have laid down that when the Secretary observes that any proposed course of action is contrary to the provision of any rule or law, or is at variance with the previous policy adopted by the Government, he will bring it to the notice of the Chief Minister. Himachal Pradesh The Chief Secretary can call for any file from any department and after examination of the case, submits for the orders of the Minister-in-charge of the department and the Chief Minister. Further, any case of departure from the Business Rules has to be brought to the attention of the Chief Minister by the Secretary. Madhya Pradesh Under Rule 12 of the Rules of Business, if the Minister differs from the Secretary relating to any issue involving deviation from the Business Rules, the Minister has to send the file to the Chief Minister. Further, the Chief Secretary can call for any file of any department and after examination submit the file to the Minister-in-charge or to the Chief Minister. Kerala There are no clear cut rules regarding procedure to be adopted in case of difference of opinion between the Secretary and the Minister of that department. However, Rule 24 of the Rules of Business provides that in a situation where the Secretary has reasons to believe that the case at hand relates to a matter in which the Minister concern has personal interest, the Secretary can submit the file to the Chief Minister. Similarly as per sub-clause (vi) under clause (I) of Rules 34 of the same rule, the Chief Secretary or Secretary of any department is given the liberty to bring the matter to the notice of the Chief Minister if any departure from the Rules of Business has been noticed. The Department of Personnel, Government of India which was asked to clarify stated that on this issue, Rule 3 of the Service Conduct Rule is relevant. This rule talks about every member of service being required to maintain absolute integrity and devotion to duty and to do nothing which is unbecoming of a member of a service. He/she shall always act in his own best www.gfilesindia.com
  28. 28. directions of, the Minister-in-charge and Rule 11 of the Allocation of Business Rules, which states that the Departmental Secretary/Special Secretary shall be responsible for the proper transaction of business and the careful observance of these rules in the department. A Minister would be well within his rights to state that under Rule 3 of the Transaction of Business Rules in the Government of India, the work of the Ministry has to be disposed off under his direction and therefore even if the departmental Secretary points out certain illegality/irregularities in the decisions he takes, there is no violation of Business Rules and the Secretary should implement these orders. On the other hand, the Secretary can rightly say that he has only to ensure the properly observance of these Transaction of Business Rules and his duty and responsibility stop there. He should not be held responsible for carrying out the orders of the Minister even if the Secretary finds them prima facie wrong. Recommendations judgment which is true and correct except when he is acting under the direction of his superiors. The Department of Personnel, Government of India has also stated that Articles 3,8,11 and 12 of Transaction of Business Rules are important. These relate to submission of cases to the Prime Minister and the President, responsibility of the department Secretary and departure from rules wherein the Prime Minister may, in any case or classes of cases permit or condone departure from these rules, to the extent he deems necessary. From the above, it appears that in the Transaction of Business Rule of Government of India, there is no provision detailing the procedure to be adopted, where there is a difference of opinion between the departmental Secretary and the Minister, as is the case of certain States, quoted above, where the departmental Secretary can approach the Chief Minister directly or indirectly through the Chief Secretary. On the other hand, the two relevant provisions in the Transaction of Business Rules in the Government of India are Rule 3 which states that the business of the department shall be disposed off by, or under the general or special www.indianbuzz.com In view of the above facts and to ensure clarity, it is necessary to amend the Transaction of Business Rules of the Government of India as follows: Rule 3—After para one, add a new rule 3A as follows Rule 3A—Every Minister shall, at all times, while disposing off cases brought before him maintain absolute integrity and observe principles of Natural Justice and pass orders impartially and without bias. All orders of the Minister shall be in writing and if the orders are passed orally the Minister shall confirm in writing immediately thereafter. Similarly in Rule 11 after the first paragraph, the following should be added: Where the Secretary of the department feels that any decision of the Minister is contrary to the provision of any rule or law or violates the Principles of Natural Justice or deviates with the previous policy adopted by the Government or violates the Transaction of Business Rules, he will bring it to the notice of the Minister. If the Minister still reiterates his previous orders, then the Secretary may bring it to the notice of the Cabinet Secretary who will then take the order of the Prime Minister in the matter. This would give enough justification for the Secretary of the department to bring such matters to the notice of the Cabinet Secretary/Prime Minister and also give the Secretary adequate protection vis-à-vis the Minister. g gfiles inside the government vol. 7, issue 8 | November 2013 29
  29. 29. GOVERNANCE parliament devender singh Calledintoquestion The orderly progression of Question Hour has been besieged by scenes of incessant power struggle, of one-upmanship, pandemonium and unruly conduct A question is a powerful parliamentary device in the armoury of an MP for seeking information on a matter of public imporof a Minister of the Government of India. Insiders, however, say, more often than not, MPs have certain foreknowledge, and the latent intent behind seeking information is to pinwaste, malpractices and acts of omission and commission of the Government. In each question, therefore, hangs a different tale. It is in recognition of the time a potentially powerful tool of oversight and accountability that, hour of every sitting of Parliament, known as the Question Hour, is earmarked for asking and answering questions. Ironically, over successive Parliaments, the orderly progression of Question Hour has been besieged by, what look like, scenes of incessant power struggle, of one-upmanship, pandemonium and unruly conduct. To allow the frayed tempers to cool and to thwart an imminently ugly confrontation between seeming warring sides, the Chair has little option but to adjourn or curtail the Question Hour when all entreaties of ‘Order, Order’ go unheeded. The loss of Question Hour conjures up reminiscences of the origin and growth of questions, which is so inextricably intertwined 30 gfiles inside the government vol. 7, issue 8 | November 2013 with the evolution of parliamentary institutions introduced reluctantly by the Britishers under the successive doses of constitutional reforms. The Legislative Council, introduced under the Charter Act of 1853, which transacted its business in the public verbatim proceedings, allowed the Members to discuss the propriety of the measures of the Executive Government. Lord Dalhousie, the Governor-General, who presided over the Council, is said to have started the Lord Canning remarked sarcastically on the nature of discussions that the Indian Council “had assumed jurisdiction in the nature of that of a grand inquest of the nation” which it was not intended to be. The British functions of the Legislative Council under the Indian Councils Act, 1861, of Independence and the constantly growing demand for self-governing institutions forced the Britishers to enact the Indian Councils Act 1892, right of asking questions with a view so that the people do not entertain erroneous ideas or harbour unjust apprehensions. the Legislative Council, on February 16, 1893, by Raja Udai Pratap Singh of Bhinga, who drew the attention of Government to the hardships caused to the rural people due to the burden tour. The cultivators and the village shopkeepers had to per force make provision for the touring revenue Home Member in the Council of the Governor General replied that the www.gfilesindia.com
  30. 30. Government of India “will, however, have great pleasure in circulating the Hon’ble Member’s question and the answer given by him in the Council to Local Governments and Administrations, in order that their attention may be specially drawn to the matter, and that they may consider whether the present arrangements of hardship to the furnishers of supplies, and, if not, in what way they should be supplemented”. During the period between 1893 and 1909, questions were asked and answered on administrative, social, economic, religious, political and land revenue matters. Dadabhai Nauroji and Gopal Krishna Gokhale used the device to focus Government’s attention especially on policies which affected the status, dignity and freedom of the citizens. The new Legislative Council, set up under the Indian Councils Act, 1909 further enlarged the scope of questions by conceding the right of asking supplementary questions. The stridently growing demand for ‘swaraj’ forced the Britishers to enact the Government of India Act, 1919. In the Legislative Assembly under sitting was earmarked for questions. The device of questions was utilised with great foresight and assiduity by the Indian members. Questions were asked about the appointment of Indian Judges, the extension of services after 55 years of age in the Railways, washing arrangements in coaches for passengers, admission of Indians into discontentment among Government servants, railway accidents, allotment of Government quarters, delay in delivery of post cards, creation of the post of Cabinet Secretary, interception of correspondence and tapping of telephones of political workers, removal of cattle byres of Government employees in New Industry, debarring of Government There is a paramount need to revisit the Question procedure, to reduce the notice period to the barest minimum, moving over to e-Parliament and new innovations like introduction of PM’s Question Time servants from joining political bodies or associations, etc. Questions were asked about the noncooperation movement, communal disturbances, nomination of a lady member to the Legislative Assembly, by the police, detention of Mahatma Gandhi, proposal for amnesty to political prisoners, health of Subhash Chandra Bose, release of ‘Garhwali’ Military prisoners, correspondence between Mahatma Gandhi and Government, death of a detune in detention Camp, demand for release of Pt. Jawarharlal Nehru, deportation of Civil Disobedience Movement prisoners to the Andamans, etc. Q UESTIONS were also asked about trade agreements, rising prices, gold reserve, drop in the price of silver, price of petrol in India and elsewhere, assessment of income tax, prices of kerosene and petrol, increase in the price of match boxes, coolies working in the tea gardens of Assam, etc. The members of the Legislative Assembly, set up under the Government of India Act, 1935, used the device of questions with still greater vigour. Questions were asked about the British soldiers at Shimla and Pune, child marriages, railway concessions for the transport of fodder to the famine ridden areas in Gujarat, export of monkeys, disparity in pay of the British and Indian Commissioned suffering from venereal diseases, posts reserved for Scheduled Castes, grow more food campaign, import of food grains, India’s dollar position, the steps taken to root out corruption and bribery in Government, etc. As the freedom struggle became www.indianbuzz.com gfiles inside the government vol. 7, issue 8 | November 2013 31
  31. 31. GOVERNANCE parliament devender singh remarks that ensue if the questions ously, no other device gives such a vast and equal opportunity to the members—the party bosses and the backbenchers—cutting across the political spectrum, to seek informa- A common scene during a Lok Sabha session political prisoners and matters concerning the Indian independence struggle, prohibition of Congress elec- certain persons, prosecution of Pandit Nehru and the amenities provided to him in jail, activities of Subhash Chandra Bose in East Asia and the joining of hands of Indian prisoners of war with the Japanese to take arms against British India, steps taken for better treatment of political prisoners, detention of Jaiprakash Narain and the amenities provided to him in jail, the reasons for declaring the Congress pledge to observe 26 January as Independence Day as sedition by the Government, illness and death of Kasturba Gandhi, and condolence message to Mahatma Gandhi, detention of Dr Lohia, hardships experienced by members of the Azad Hind Fauz in Rangoon Central Jail, etc. Questions were also asked about the decay and disintegration of Indian architectural arts and monuments and 32 gfiles inside the government vol. 7, issue 8 | November 2013 the steps taken for their preservation. A quick glimpse of the questions asked and answered in the successive Councils and Legislative Assemblies Indian members and the remarkable assiduity and foresight with which the device of questions was deployed by them notwithstanding the restraints and fetters imposed by the imperial power. It’s a matter of deep concern that after 60 years of Independence and as more years roll by, due to growing disruptions, chaotic scenes and the tendency to troop to the well of the House, the Members get deprived of the right of asking questions. T HE loss of Question Hour time is essentially a loss of valuable opportunity to the backbenchers and a great reprieve to the Ministers who dread the Question Hour most for the barrage of inconvenient and excoriating supplementaries and the heckling and the inane cries of ‘shame’, ‘resign’, and the caustic call the Government to account. Such is the electrifying effect and mystique of the questions that once Parliament goes into session and the advance notices of questions start reaching the Ministries, they get awfully engaged with the issues raised and their possible redressal while formulating replies. During sessions, the work focus of Government shifts to Parliament and, in fact, Parliament House teems with civil servants and the visitors’ the Question Hour is over. It’s disappointing when so much time and resources become infructuous due to the washout of the Question Hour. Unless there is a common realisation that the clamour and clash of unruly scenes during Question Hour and frequent adjournments cause enormous waste of public time and resources and irretrievable loss of opportunities to members across the political divide, the future seem uncertain. However, despite frequent washout of the Question Hour, the interest of members, far from dissipating, continues to grow as evident from the constant increase in the notices of questions. There is, therefore, a paramount need to revisit the Question procedure, to reduce the notice period to the barest minimum, moving over to e-Parliament and new innovations like introduction of PM’s Question Time. g The author is a senior parliamentary official and a student of constitutional and parliamentary studies. The views expressed here are individual. He can be reached at dsaswal57@gmail.com www.gfilesindia.com
  32. 32. Our motto To position Karnataka in a sustained growth path in the field of agricultural and allied sectors through global technologies and innovative tools, by creating enabling frameworks and state of art infrastructure facilities, thereby generating higher returns to farming communities Karnataka is predominantly an Agriculture State. 24% of the total GDP comes from Agriculture. 66% of the work force is dependent on Agriculture. 70% of the population still in rural areas is depending on agriculture for their lively hood Agro products grown in an area of 107.90 lakh hectares and the production is 92 lakh Mts. Horticulture crops grown in 14.27 lakh hectares and the production is 114.90 lakh Mts. Total gross Annual income from Horticulture is Rs. 7152 crores which is 40% of the gross annual income from combined agriculture sector. For all your Agribusiness Investments, Contact : Karnataka State Agricultural Produce Processing & Export Corporation Limited (KAPPEC) (A Government of Karnataka Enterprise) (A Government of India Recognised “Export House”) #17, Richmond Road, Bangalore – 560 025. Tel: 080 – 22271194 / 080 – 22243082. Fax: 080 – 22278974. E-mail: kappec@dataone.in / kappec1996@gmail.com Website: www.kappec.kar.gov.ingovernment gfiles inside the www.indianbuzz.com vol. 7, issue 8 | November 2013 33
  33. 33. STATE SCAN UNI j&k mk kaw Kashmir: policy paralysis If we enunciate a clear-cut forthright policy on Kashmir, India will no longer be regarded as a soft State by the world community K ASHMIR is in the news once again. Analysts are having a field day, dissecting personalities, policies, predilections and preferences to understand what exactly is happening and why. Most experts say that Pakistan is indulging in violations of the ceasefire line to facilitate the entry of saboteurs and terrorists into the Kashmir valley. Or, else they feel that Pakistan is trying to keep the Kashmir issue alive on the international circuit because of the session of the UN General Assembly or because of meetings of the Indian and Pakistani Prime Ministers with Barack Obama. What is missing from the discourse is any serious debate on India’s Kashmir policy. Taking into account the history of Kashmir since 1947, right from the first Pakistani aggression under the guise of the Qabaili invasion to the 1965 and 1971 wars to 34 gfiles inside the government vol. 7, issue 8 | November 2013 the Kargil misadventure, this period has been a blood-spattered saga of violence, sabotage, mayhem and genocide. Yet one searches in vain for a white paper on India’s policy on Kashmir, which clearly enunciates what our goals and strategies are. In the absence of an official policy document, we have bits and pieces of failed initiatives, ad hoc steps and offthe-cuff remarks. What the Prime Minister and Foreign Minister are reduced to is a reiteration of wellworn clichés. We say that Kashmir is an integral part of India. The accession of the State to India is final and irrevocable. Not only will India not surrender an inch of territory in its possession, but we are committed to recover that part of the State which was the victim of aggression by Pakistan and which is referred to as Pak- occupied Kashmir or PoK. On the other hand, Pakistan has a clear-cut one point programme, namely, to grab Kashmir by hook or by crook. They have tried every strategy to achieve this objective. In 1948, they sent the so-called tribal raiders and gobbled up “Azad Kashmir”. In 1965 they attacked India and then took back at Tashkent their territory conquered by India. In 1971, India obtained its only victory over Pakistan when it was able to bring Bangladesh into existence. But the gains of the battlefield were lost at Shimla when Bhutto walked away with 95,000 PoWs without conceding an inch on Kashmir. Indira Gandhi was not able even to have the Line of Control (LoC) accepted as the international border. Pakistan did not give up. They allegedly sent hordes of terrorists not only to Kashmir but to all parts of India. In the late 1980s, they created an atmosphere of terror in Kashmir so that almost all the Kashmiri Pandits www.gfilesindia.com

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