Civil Procedure Code (CPC)

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Key Takeaways

  • Scams have become a part and parcel of the daily lives of the people.
  • The VVIP Chopper scam has been pending before the Court for years and it has not been decided yet.
  • Recently, a bail application was put by the middleman Christian Michel, which has been denied by the Court.
  • The scam deals with corruption on both parts; the Indian party and the Italian company. The specifications were faulty and targeted to fraudulently get the Indian party to sign the contract.
  • The detailed investigation procedure along with the decision of the Italian Court has been discussed in the article.

Introduction

People all around the world have only one focus, i.e. earning money. Money is what makes survival possible. Every necessity requires some amount to be paid in return, so it is important to have money. There can be two types of requirements for money, i.e., fulfil the basic necessities or to lead a luxurious life. People have different means to meet this requirement; some work hard and earn their share of money whereas some people prefer easy money and use illegal and under the table measures to get money.

Scams are a major part of the measures that are being taken. Scam is the term used for fraudulent schemes that are used for making quick profit and earn money. In the last decade, numerous scams have come to the forefront. The people that hold some power in the social hierarchy use their money and power to earn even more money which ends up being a scam. 2G spectrum scam, Commonwealth Games scam, Telgi scam, Satyam scam, etc are some of the scams that have made to the headlines. One of the lesser known scams is the Augusta Westland VVIP Chopper scam. The case is still pending before the Hon’ble Supreme Court.

What is the Augusta Westland Case?

The Augusta WestlandVVIP chopper fraud is a bribery case in which it is claimed that bribes were paid to middlemen, maybe even politicians, when India agreed to buy 12 Augusta Westland helicopters from the Italian Defence Corporation, Finmeccanica, for Rs 3,600 crore.

Several characteristics, including the height of the helicopter's cabin, the operating ceiling, and the greatest altitude the helicopter could fly to, are said to have been modified to aid Augusta Westland. The Central Bureau of Investigation is looking into the VVIP choppers matter (CBI).

The United Progressive Alliance (UPA) Government of the time inked a contract to buy 12 Augusta Westland AW101 helicopters for Rs. 3,600 crore in February 2010. These helicopters were supposed to transport the President of India, the Prime Minister, and other high-ranking officials.

The chopper scheme was brought to light in 2012 when it was discovered that various politicians and bureaucrats had taken bribes to help close the transaction. The con was discovered for the first time in Italy. Italian officials detained Augusta Westland’s CEO, Bruno Spagnolini, in February 2013 on suspicions that the businessman bribed middlemen to clinch the agreement with the Indian Air Force (IAF). The contract was cancelled by the Congress Government in 2014.

Investigation Procedure

Defence Minister A.K. Antony requested a probe by the CBI on February 12th, following a massive scandal and claims of corruption.

On February 25, 2013, the CBI opened a preliminary investigation (PE) into 11 individuals, including former Indian Air Force Chief Air Chief Marshal S.P. Tyagi and his cousins, as well as four corporations. The CBI found adequate evidence after conducting a preliminary investigation and filed a FIR on March 13th. Former Indian Air Force Chief Air Chief Marshal S.P. Tyagi and his three brothers, as well as the brother of former Union Minister Santosh Bagrodia, Satish Bagrodia, and Pratap Aggarwal, were named in the FIR (Chairman and MD of IDS Infotech).

The FIR also listed four companies: Finmeccanica of Italy, Augusta Westland of the United Kingdom, and IDS Infotech and Aeromatrix of Chandigarh. Abhishek Verma, a rich Indian arms dealer, and his Romanian-born wife, AncaNeacsu, were named as suspects in the scandal in 2013. Abhishek had acted as a go-between in the transaction, liaising with lawmakers to get CCS approval from the Cabinet Committee. With their global research, TimesNow TV discovered this link.

According to the investigators, a portion of the bribes from AgustaWestland were routed to Abhishek's companies Atlas Defence Systems in Mauritius, Atlas Group Ltd's Bermuda accounts, and his wife's front company Ganton Limited in New York.

These cash are thought to have gone to Indian politicians who benefited from the scam. In 2013, BJP leader Subramanian Swamy highlighted Abhishek Verma and his wife AncaNeacsu's role in many blogs and press releases. Judge Anju Bajaj Chandana of the CBI Special Court cleared the Verma couple of the allegations of corruption in April 2017.

Bank Guarantee

India encashed about 2.5 billion (US$35 million) as bank guarantee, granted by Augusta Westland to Indian banks, in January 2014, when the contract was cancelled. Separately, India demanded that the Italian Government retrieve the bank guarantee sum of over €275 million (23.64 billion) made by the corporation in Italian banks. An Indian request was denied by an Italian Court on March 17, 2014. The appeals court in Milan, however, overturned the lower court's decision and affirmed the Indian Government's claims.

As a result, the Indian Government encashed 18.18 billion dollars (US$250 million) in June 2014, bringing the total amount recovered to $20.68 billion dollars (US$290 million). With this, India was said to have recovered the entire sum of $16.2 billion (US$230 million) it had given to AugustaWestland (45 percent of the total contract value of $36 billion (US$500 million). AugustaWestland, on the other hand, did not repay the entire sum, keeping €106 million for three helicopters it had supplied.

Italian Court

Ex-IAF Chief S.P. Tyagi was cleared of all counts of corruption by an Italian Court in October 2014. Former Finmeccanica CEO Giuseppe Orsi and former AgustaWestland CEO Bruno Spagnolini were also cleared of ‘international corruption accusations’. The Court, on the other hand, found them guilty and sentenced them to two years in prison on the minor charge of ‘false invoicing’. In a 225-page decision on April 8, 2016, the Milan Court of Appeal overruled the lower court's decision and condemned Giuseppe Orsi to four years in prison.

The Corte di Cassazione (Supreme Court of Italy) then overturned the guilty judgement of the Appeals Court and ordered a new trial, referring the case to a separate Court of Appeal, always in Milan. On January 8, 2018, the Milan Third Court of Appeals eventually cleared the defendants and dismissed all accusations after nine months of procedures, citing inadequate evidence given by the prosecution to substantiate the allegations. After the Milan General Prosecutor's office failed to get a recourse supported by the Attorney General, the verdict was maintained by the Supreme Court of Cassazione on May 22, 2019.

Recent Development

Christian Michel is one of three middlemen employed by Augusta Westland to sway the sale in the company’s favour by influencing officials (the other two were Guido Haschke and Carlos Gerosa).

According to the CBI, Michel’s companies received 42.27 million euros for the purpose.

Bribes were allegedly funnelled through Michel's and Advocate GautamKhaitan's companies in the form of various contracts and layered transactions to hide them.Michel, who was extradited to India from the UAE in 2018, claimed that the CBI wanted him to take the Gandhi family’s names, which the agency denied.

He had filed an application for bail before the Court. The legality of his arrest was the basis for his plea. The Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights were violated when his liberty was taken away. The other defendants were released on bail, but Michel had been detained in detention for more than two years. The claimed offences are post-amendment and so cannot be applied to him.

Scams in India

Coalgate Scam

The coal allocation scam, also known as Coalgate, is a political scandal that began in 2012, when the United Progressive Alliance (UPA) was in power. When the UPA led government was accused of fraudulently assigning 194 coal blocks between 2004 and 2009, the Comptroller and Auditor General (CAG) brought the scandal to light. Since many bureaucrats and politicians were engaged, this was one of the scams that shook the entire country to its core. Despite the CAG's initial estimate of a loss of more over Rs 10 lakh crore, the final audit stated that the scheme cost Rs 1.86 lakh crore.

2G Spectrum Scam

The Government came under fire after it was claimed that they undercharged mobile phone firms for frequency allocation licences that were used to establish 2G spectrum subscriptions, with former Telecom Minister A. Raja at the centre of the dispute. The discrepancy between the money collected and the money mandated to be collected was Rs. 1.76 trillion, according to the CAG (Rupees 1,76,000 crore). The Supreme Court declared the spectrum unconstitutional and arbitrary in 2012, resulting in the termination of over 120 licences. This is one of India's greatest scams in the country's history.

Hawala Scam

The Hawala controversy erupted in the 1990s, drawing attention to politicians such as LK Advani, Arjun Singh, Yeshwant Sinha, and Madan Lal Khurana, among others, who were accused of bribery. The hawala brothers, also known as Jain brothers, were suspected of being involved in a terrorist raid. It was discovered that these lawmakers made transfers of alleged black money through their siblings.

Satyam Scam

B Ramalinga Raju,and his Satyam Computer Services Ltd,were involved in the 2009 corporate fraud dubbed as the ‘Indian Enron Scandal’. In front of its board, stock exchanges, investors and other stakeholders, the corporation admitted to misrepresenting, manipulating, and falsifying their records totalling to more thanRs 14,000 crore.

Vijay Mallya Scam

After being accused of fraud and money laundering in the country, Mallya fled the country and sought sanctuary in the United Kingdom in 2016. Vijay Mallya is said to owe around Rs 9000 crores to multiple banks, which he took out as a loan to save his now-defunct Kingfisher Airlines from going bankrupt. Under the Fugitive Economic Offenders Act, he was just declared a fugitive economic offender.

Mallya asked Finance Minister Nirmala Sitharaman to consider his offer to repay 100 percent of the amount borrowed by Kingfisher Airlines to the banks in a series of tweets while the Indian Government is still attempting to extradite him from the United Kingdom, which does not appear to be happening anytime soon.

Commonwealth Games Scam

The Commonwealth Events in India in 2010 drew more attention than the Games themselves due to the issues and corruption that surrounded them. The entire event was tainted by allegations of criminal conspiracy, cheating, and forgery, and Suresh Kalmadi, the Chairman of the 2010 Common Wealth Games, was accused of corruption and malpractices. The Indian sportsmen were also reportedly compelled to reside in deplorable conditions instead of the accommodations provided by the authorities.

BOFORS Scam

The Hallmark of Indian Corruption, i.e. the BOFORS scam occurred in the 1980s, when late PM Rajiv Gandhi and NRI family of Hindujas were accused of getting kickbacks from the Bofors AB for the supply of 155mm field howitzer. The Swedish Radio broadcasted the secret operation entailed for a payment of $16 million to the members of Congress.

Nirav Modi Scam

One of the most contentious scams, this one allegedly took place under the Brady House brand of Punjab National Bank. This fraud implicated not only Nirav Modi, but also his uncle MehulChoksi and two senior PNB officials. PNB filed a case with the CBI in 2018, accusing Nirav Modi and his firms of getting Letters of Undertaking (LoUs) from PNB without paying the margin amount on loans. This meant that if those companies defaulted on the loan, PNB would be responsible for the repayment.

Conclusion

The Court denied his bail request, finding that providing bail on medical reasons was not justified.He will not be granted bail after considering the facts and gravity of the crime. During the investigation in India and Italy, he refused to cooperate. Because there’s a chance he’ll flee, he can’t be treated the same as the other defendants.After hearing the bail plea in the Augusta Westland case, the judge requested a response from the CBI and Enforcement Directorate.

The case is posted for hearing in September and the decision is yet to come. These scams are derogatory to the economy of the country and it is very important that these cases are decided in a jiffy. The money of the Government comes from the people and when such incidents take place, it creates distrust on the Government and the Judiciary. A person can take a bribe only if you give it. So when a case of corruption arises, it needs proper investigation to decide who is the one wronged; in this case the Indian party claims to be wronged. Is it even possible when you are responsible for making the payments?


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