OTTAVIO QUATTROCCHI Vs. CENTRAL BUREAU OF INVESTIGATION

JUDGEMENT

(1.) The petitioner, who is an Italian citizen who had been working as Regional Director of M/s. Snam Progetti in India and is presently residing and conducting business at Kuala Lumpur (Malaysia), filed this petition on 24.3.1998 under Article 226 read with Article 227 of the Constitution of India and Section 482 of the Criminal Procedure Code (hereinafter referred to as "the Code"), praying for setting aside order the (Annexure-B) passed on 6.2.1997 by Shri Ajit Bharioke, Special Judge, Tis Hazari, Delhi directing issuance of non-bailable warrants of the petitioner's arrest in connection with RC 1(A)/90-ACU-IV SPC, C.B.I., New Delhi on allowing the application (Annexure-A) moved by the respondent.

(2.) The respondent in its application prayed for issuance of non-bailable warrants of the petitioner's arrest, alleging that the aforementioned case (RC 1 (A)/ 90-ACU-IV SPE, C.B.I. New Delhi) was registered on 22.1.1990 on the basis of sources, certain facts and circumstances that became available, media reports, report of the Swedish National Audit Bureau, certain facts contained in the report of the Joint Parliamentary Committee and the report of Comptroller and Auditor General of India. It was alleged therein that during 1982-87 certain public servants entered into a criminal conspiracy with certain private persons/others, in India and abroad and in pursuance thereof committed offences of bribery, cheating, swindling and forgery, in respect of a contract dated 24.3.1986, entered into between Government of India and AB Bofors of Sweden, for supply of guns, towed vehicles and ammunition by AB Bofors to Govemment of India. A percentageof the said amount of contract was remitted by Bofors in a clandestine manner to certain Public Bank accountsin Switzerland, asillegal gratification, forthe benefit of certain public servants of Government of India and their nominees. The Government of India had decided and communicated to prospective bidders that there would be no agent or middlemen in the deal.

(3.) The application alleged that the investigation had revealed that AB Bofors had obtained the contract pursuant to a criminal conspiracy with certain public servants, who were responsible for decision making process even though the gun system offered by them was inferior to other available alternatives. A request was made to further investigate into the matter to Swiss authorities in February, 1990 through Letter Rogatory issued by Court of Special Judge, Delhi, for ascertaining the details of payments made by M/s. AB Bofors to M/s. AE Services. The application further alleged that the investigation conducted so far had revealed that in spite of express policy of Government of India M/s. AB Bofors, in conspiracy with the petitioner and others, appointed M/s. AE Services, U.K. as one of their agents through agreement dated 15.11.1985 to secure the contract. The petitioner was found instrumental in execution of contract with AB Bofors in November, 1985. AB Bofors were paid an amount equivalent to US $ 7,343-,941.98 and the same was credited on 8.9.1986 in their US $ account, opened ostensibly for this purpose. In part execution of the Letter Rogatory, the Swiss authorities had made available copies of certain documents, duly authenticated, which revealed that the amount credited to M/s. AE Services was laundered further. After an interval of eight days only, an amount of US $ 7,123,900.00 was transferred in two instalments of US # 7,00,000.00 and US$ 123,900.00 on 16.9.1986 and 29.9.1986 respectively to an account of M/s. Colbar Investment Ltd. (Inc.) in Union Bank of Switzerland, Geneva. This account was authorised to be operated and controlled by the petitioner and his wife. At the relevant time, the petitioner was employed with M/s. Snam Progetti and was stationed at New Delhi. In the relevant Bank documents, the petitioner gave a non-existing address of Delhi. The application further alleged that die aforementioned amount was again transferred on the petitioner's instructions to the account of M/s. Wetelsen Overseas SA of Panama on 25.7.1988 in the same Bank. This company was floated in Panama on 6.8.1987 and was dissolved on 7.8.1990, indicating that this was floated only to receive this money and to be used as a conduit for further illegal payments through the Bank accounts, which could be operated and controlled by the petitioner and his wife individually. While Letter Rogatory was under process of execution, US$200,000.00 were again transferred from the account of M/s. Wetelsen Overseas SA in UBS Geneva to Inter Investment Development Company for the benefit of Ansbbacher Ltd. St. Peter Port Guernsey on 21.5.1990. The application further says that efforts are on to trace the further proceeds of the fraudulent transaction spread across several countries. The investigation conducted so far thus prima facie revealed that the entire transaction of payment by AB Bofors to M/s. AE Services and other was intended to masquerade the ill-gotten payment/commission/bribe and thus the Government of India was defrauded and put to loss. The investigation had revealed that the petitioner, the holder of Italian Passport was in India from 1967 onwards and left India abruptly only in July, 1993, after revelation of his name, as one of the appellants before the Swiss Courts. The investigation prima fade reveals that the petitioner was the recipient of the fruits of frauds committed in the Bofors gun deal, which he used for himself and on behalf of certain public servants. Therefore, he was required to be arrested and interrogated for expeditious investigation and the case and to reveal the entire truth.