Babus roll out the red tape

However, the truce is onlytemporary, since the warring camps in Nirman Bhavan are still waiting for a solution: Jethmalani expects Aggarwal to be soon shunted out of the ministry while the latter is hoping a change will be effected in the minister’s portfolio.

On June 17, Jethmalani passed an order stating that property rights of guest-houses in HUDCO’s 14-acre community centre located at Andrews Ganj, Delhi, be restored to Sachdeva. He also directed that HUDCO, “the lessee”, pay him interest for three years.

Jethmalani’s case was that Sachdeva had been made to forfeit Rs 60 crore by HUDCO. While Rs 40 crore had been paid as the first instalment for the guest-houses, Rs 20 crore had been paid for an adjoining five-star hotel plot. In both cases, Sachdeva had challenged the forfeiture in court. Jethmalani intervened to “settle” the first case since HUDCO, in his opinion, first reneged on its part of the contractual agreement. He did not interfere with the second case since the hotel plot had already been sub-let to Leela PentaHotels and, here, HUDCO did not have compatible contractual obligations.

What followed was unprecedented as a wing of the Government (the ministry) challenged the stake of a public-sector unit (HUDCO). As Jethmalani had ordered that HUDCO should not “waste time and money on avoidable litigation”, bureaucrats claimed that the Andrews Ganj plot was already buried under a mound of litigation, and that Sachdeva’s case linked it with the other property too. This meant that the outcome in the MS Shoes case would affect the Leela Penta deal.

This was pointed out to Jethmalani first by an Under Secretary, who told him how the two cases were “overlapping”. The note, dated June 30, described MS Shoes as a “disreputed” company which had been involved in “large-scale” fraud. Aggarwal, in a note dated July 6, added that HUDCO could not directly be instructed to return the plot to Sachdeva as the Urban Development Ministry had authority to take decisions for amounts up to Rs 50,000 only. A proposal with largerfinancial implications, she said, would have to be routed through the Finance Ministry and the Department of Public Enterprises.

A week later, Jethmalani reiterated that since HUDCO had failed to obtain certificates showing the construction on the property was complete (called “completion certificates”), they were “legally obliged” to restore the allotment. He also instructed that the MS Shoes file should not be referred to any other department without his concurrence.

He told the bureaucrats: “In any democracy, it is the responsibility of the Government and especially of an elected political executive to ensure that the Government gives a fair deal to its citizens and does not bully the helpless citizens…” This made the bureaucrats in Nirman Bhavan see red. In lengthy notings, they claimed the orders would mean a huge loss since the said land was now worth Rs 200 crore. Any loss of revenue meant prior approval of the Law Ministry, they said.

Jethmalani’s response, in a July 17 note, reportedlywas: “I do not approve of interminable notings… Once I decide a matter, it is my responsibility and my action. This borders on insubordination. I desire compliance with earlier orders.”

With this, the war of words in Nirman Bhavan was out in the open. After this, notings on the MS Shoes file became brief, but more caustic. In a note dated July 20, Aggarwal pointed out that under the Transaction of Business Rules, the Secretary was responsible for “proper” transaction of business and any departure of rules could only be permitted by the PM. And so, Jethmalani could approach the PM for a relaxation of rules.

The minister apparently had the final word when — in an order passed on August 14 — he cited Rule 3 which, he said, “controlled” the one (Rule 11) quoted by his Secretary. “The action of the Secretary is gross and illegal insubordination. It may be possible for a Secretary to bring any case to the notice of the Cabinet Secretary, who in turn may invoke the Prime Minister’s power, but noSecretary is entitled to order a minister to refer the case to anybody else…,” he said. Jethmalani and Aggarwal then went on a complaining spree to the Prime Minister and Cabinet Secretary, respectively.

While bureaucrats say they object to Jethmalani’s pushy style, the minister claims he’s just trying to avoid the “system” of litigation and delay. Besides, he has maintained, his line of action in the MS Shoes case had been endorsed by the Law Ministry, to whom his bureaucrats now want the matter re-routed. The Law Ministry gave its opinion through a Joint Secretary on March 10, stating that Sachdeva’s allotment had been “illegally cancelled” by HUDCO.

The Law Ministry had also compared the treatment meted out to MS Shoes with that to Ansals, who were allottees for a shopping mall in the Andrews Ganj complex. Jethmalani had pointed out in his original order that the Ansals were given “repeated extensions for payment of instalments without interest”. This, it now transpires, had been the stand ofthe Law Ministry long before Jethmalani intervened in the MS shoes case. The Law Ministry’s opinion was that “different yardsticks had been used in the case of the Ansals, who have been favoured, and MS Shoes, who have been disfavoured…”

Minister’s viewpoint

On the MS Shoes controversy:

“I was the last person to intervene in the matter. Before me, 31 MPs had signed representations in favour of the company…All these are lying with the ministry. And it is not as if I have given a fresh allotment to Pawan Sachdeva. I have only allowed him more time to pay the second and third instalments. You simply cannot forfeit someone’s Rs 40 crore and expect him to forget about it.”

On the legal points in the case:

“The law has been laid down in an order passed by Additional District Judge R.S. Arya challenging the cancellation of allotment letters. The order stated that the plea for extension of time was genuine. This is precisely what I have said: that HUDCO had reciprocalobligations to keep up. The fact is that HUDCO obtained the completion certificate only after my order on the MS Shoes file.”

On the politics of the case:

“I have no doubt that there are powerful people and lobbies working on the other side, but I do not want to elaborate. But there are people who are worried about the effect my reasoning will have on other disputed cases.”

On the officials:

“It is ridiculous for the bureaucrats to ask me to refer the matter to the Law Ministry since they had already given their opinion months before I took it up. It mentions that representations have been received from MPs about illegal acts being committed by HUDCO. It also said that HUDCO was not legally entitled to demand the second instalment. I have said nothing new.”