Examining the Impact of Defence Procurement Scandals in India and Proposals for Reform

by Pritika Kumar & Tushar Singh

EXECUTIVE SUMMARY

The defence sector in India has been plagued by a number of procurement scandals in the past, resulting in significant financial losses to the government and hindering the modernization of the armed forces. Some of the major defence procurement scams in India include the Bofors scandal, the HDW submarine scandal, the AgustaWestland helicopter scandal, and the Rafale deal controversy. These scandals have not only dented the reputation of the government and the defence forces but have also raised questions about the transparency and integrity of the procurement process.

Defence procurement scams, corruption, kickbacks, bribes, and political influence scams and scandals can have a range of negative impacts on the Indian defence sector. Scams result in the procurement of substandard or inadequate equipment, which can compromise the effectiveness of the military and put the lives of military personnel at risk. Additionally, the use of middlemen or the payment of bribes can distort the procurement process and lead to unfair advantages for certain companies. Political influence in defence procurement can also lead to the procurement of equipment that may not be in the best interests of the military or the country. Scandals and corruption can also erode public trust in the defence sector and the government and can lead to a lack of confidence in the procurement process. 

It is important for governments to ensure transparency and integrity in the procurement process in order to protect public funds and maintain the trust of the citizens. In an effort to address these issues, the Indian government has implemented policies such as blacklisting defence firms, that engage in such practices and promoting indigenization, or the development of a domestic defence industry.

However, it is also important to recognize that addressing corruption in the defence sector can be a complex and challenging task. It requires a combination of measures, including strong laws and enforcement mechanisms, robust systems of accountability and transparency, and a culture of integrity within the defence sector. It is also essential to ensure that there are sufficient checks and balances in place to prevent corruption and ensure that procurement decisions are made in the best interests of the military and the country. This can involve measures such as independent oversight bodies, internal controls, and a robust process for evaluating bids and awarding contracts.

In addition, it is important for the government to engage with stakeholders, including the defence industry and civil society, in order to identify and address the root causes of corruption in the defence sector. This can involve measures such as strengthening the legal and regulatory framework, improving procurement practices and procedures, and increasing transparency in the defence sector. By taking a comprehensive approach to addressing corruption and promoting integrity, the Indian government can work to modernize the armed forces and build a strong and transparent defence sector that serves the interests of the country and its citizens.

OVERVIEW OF DEFENCE SCAMS IN INDIA

There have been several instances of alleged corruption and fraudulent activity within the defence sector in India. These incidents have had significant political and economic consequences and have raised concerns about transparency and accountability in the procurement of defence equipment and services.

It is important to note that these and other defence-related scandals are complex and often involve multiple parties and legal and political challenges. In some cases, the allegations of wrongdoing have been dismissed by the courts due to lack of evidence. 

Some of the major defence-related scams that have been reported in India include:

1. The Rafale Fighter Jet Deal Scandal

What Transpired

The Rafale fighter jet deal was a controversial procurement process for the acquisition of 36 fighter aircraft by the Indian Air Force from the French defence firm Dassault Aviation. The deal was the subject of political controversy and legal challenges in India, with allegations of corruption and irregularities in the selection and negotiation process.

The deal was initially initiated in 2007, but it faced delays and setbacks due to various factors, including cost escalation and disputes over the selection of an Indian partner for technology transfer. In 2007, the Indian Ministry of Defence issued a request for proposals to purchase 126 fighter aircraft, with a plan to buy 18 from abroad and have 108 manufactured in India by Hindustan Aeronautics Limited (HAL) with technology transfer from a foreign company. After a selection process, the French company Dassault was chosen to provide its Rafale twin-engine fighters. 

By 2015, negotiations on pricing were nearing completion. However, in March of that year, Prime Minister Narendra Modi and the President of France announced a new deal to purchase only 36 Rafale jets. The original tender was withdrawn, and the new agreement included a clause requiring Dassault and other foreign companies involved, such as Thales and Safran, to invest 50% of the contract value back into India through the purchase of Indian goods and services. In October 2016, Dassault and Reliance Group, owned by Anil Ambani, announced a joint venture, Dassault Reliance Aerospace Ltd, with Dassault planning to invest $115 million to partially fulfil its offset obligation.

In 2016, the Indian government signed a contract with Dassault for the purchase of 36 Rafale jets in a government-to-government deal, bypassing the traditional procurement process.

The procurement process for the acquisition of the Rafale jets involved the Indian government directly negotiating and contracting with the French defence firm Dassault Aviation for the purchase of the aircraft. This is known as a government-to-government (G2G) deal, which bypasses the traditional procurement process that is typically followed for the acquisition of defence equipment in India.

In the traditional procurement process, the Indian government invites bids from various companies and selects a vendor based on the technical and financial aspects of the bid. The process also involves negotiations with the selected vendor on the terms and conditions of the contract, including the price, delivery schedule, and any technology transfer or offset obligations.

In the case of the Rafale deal, the Indian government entered a G2G deal with Dassault, bypassing the traditional procurement process. This meant that the Indian government directly negotiated and contracted with Dassault for the purchase of the aircraft, without inviting bids from other companies or going through the usual selection and negotiation process. This decision led to controversy and allegations of corruption and irregularities in the selection and negotiation process.

The Rafale deal has been scrutinized for a number of reasons, including:

Procedural violations: There have been allegations of procedural violations in the defence procurement process, including the rejection and later acceptance of Dassault's technical bid and the incorporation of India-specific enhancements to meet bid-compliant qualitative requirements.

High price: The high price of the jets has been a source of controversy, with some questioning whether the deal represents good value for money.

Choice of offset partners: The choice of Dassault Reliance Aerospace as an offset partner has been criticized, with allegations that Reliance Defence was chosen without the approval of the Minister of Defence, as required by the Defence Offset Guidelines.

Removal of anti-corruption clauses: There have been allegations that anti-corruption clauses were removed from the deal, potentially raising concerns about transparency and accountability.

Waiving of bank guarantee requirement: The requirement for a bank guarantee was waived, which has raised questions about the financial risk to the government in the event of any issues with the deal.

Role of middlemen: There have been allegations of the involvement of middlemen in the deal, including the payment of kickbacks and the supply of classified documents related to the deal.

Supreme Court

In 2018, several parties filed petitions in the Supreme Court claiming that the Rafale deal had serious procedural irregularities, including the lack of Cabinet Committee on Security approval for the deal, the selection of Reliance Defence as Dassault's Indian offset partner without the approval of the Defence Minister, and potential pricing irregularities. 

The decision-making process that led the Indian government to purchase only 36 Rafale fighter jets instead of 126 was questioned for potential irregularities. There have been allegations of pricing irregularities in the Rafale deal, with the cost per aircraft being higher in the new deal than it was previously negotiated under the previous government. The Indian government has been accused of proposing Reliance Defence as Dassault Aviation's Indian Offset Partner without the approval of the Minister of Defence, which is required by the Defence Offset Guidelines. The Rafale deal has been questioned as to whether it qualifies as an inter-governmental agreement between India and France, and if it does, whether this allows the government to forego disclosing the details of the deal in violation of the Comptroller and Auditor General's Act.

The court dismissed the petitions in December 2018, finding no irregularities in the decision-making process, pricing, or selection of an offset partner. A review petition was filed in February 2019 by Yashwant Sinha, Arun Shourie, and Prashant Bhushan, alleging that the court's judgment was based on incorrect factual claims by the government. The court reserved its decision on the review petition in March 2019 and ultimately ruled in November 2019 to dismiss the petition, stating that it had limited scrutiny of defence contracts under its Article 32 jurisdiction.

The controversy surrounding the Rafale fighter jet deal in India continues to be a topic of discussion, despite there being claims that the planes are of a certain high-quality, meeting the requirements of the Indian Air Force. Ex-IAF Chief B S Dhanoa has stated “Rafales will provide India major advantage in Tibet in case of aerial combat”. 

2021 Mediapart Revelations

In April 2021, a French portal called Mediapart had published allegedly fake invoices and claimed that Dassault Aviation, the company that manufactures the Rafale jets, paid kickbacks to middleman Sushen Gupta totaling over €7 million between 2007 and 2012. Mediapart has also claimed that the Central Bureau of Investigation in India had proof of this as of October 2018. The Comptroller and Auditor General of India released a redacted audit report on the Rafale deal in February 2019, which highlighted procedural violations in defence procurement and the need for reform in the defence acquisition process. 

Impact of Rafale Deal Scandal

The Rafale deal became the subject of political controversy and legal challenges in India, with opposition parties and civil society groups alleging corruption and irregularities in the selection and negotiation process. The Supreme Court of India ultimately dismissed the allegations and ruled that there was no corruption case in the Rafale deal, paving the way for the acquisition of the fighter jets by the Indian Air Force. The Indian Air Force began inducting the Rafale jets in 2020.

The Comptroller and Auditor General (CAG) of India is an independent government agency responsible for auditing and evaluating the financial performance of government departments and agencies in India. In February 2019, the CAG released a report on the capital acquisition of the Indian Air Force (IAF), which included an audit of the procurement of 36 Rafale jets from Dassault Aviation in France by the Indian government. The report has been the subject of controversy and criticism, with some arguing that it fails to adequately address the concerns and questions surrounding the Rafale deal and instead seeks to justify the government's decision to purchase the jets. It is important to note that the CAG is an independent agency and its reports and findings should be carefully examined and considered, but it is ultimately up to the public and their elected representatives to form their own opinions and hold the government accountable for its actions.

It is important for both operational readiness and procedural propriety to be considered in defence procurement for the sake of national security. The deal has had a number of negative impacts on the defence sector in India, including:

• Damage to the reputation of the government and the defence sector: The allegations of corruption and irregularities in the procurement process have led to a lack of public trust in the government and the defence sector, and have raised questions about the transparency and integrity of the procurement process.
• Financial costs to the government: The Rafale deal has been criticized for being significantly more expensive than other options that were considered, which has led to concerns about the use of public funds.
• Political consequences: The controversy surrounding the deal has led to significant political polarization and has been used by opposition parties as a means of criticizing the government and attempting to gain political advantage.
• Delays and uncertainties: The controversy surrounding the deal has also led to delays and uncertainties, which could have negative impacts on the modernization of the Indian Air Force.

The Rafale deal has had significant negative impacts on the defence sector in India, and it is important for the government to address these issues in order to restore public trust and ensure that procurement decisions are made in the best interests of the military and the country.

2. The AgustaWestland Helicopter Scandal

What Transpired

The AgustaWestland VVIP chopper scandal is a corruption case in which it is alleged that bribes were paid to intermediaries, potentially including politicians, when India agreed to purchase 12 AgustaWestland AW101 helicopters from the Italian defence company Finmeccanica for approximately INR 37.27 billion.

The scandal centered around the alleged payment of bribes by AgustaWestland, a subsidiary of the Italian defence firm Finmeccanica, to Indian officials in order to secure the helicopter contract. The allegations were first raised by an Italian investigation into Finmeccanica, and the Indian government subsequently launched its own investigation. Several individuals, including high-ranking government officials and executives of AgustaWestland and Finmeccanica, were charged in connection with the scandal.

It was claimed that several specifications, such as the height of the helicopter cabin, operating ceiling, and maximum altitude, were altered to benefit AgustaWestland. The Central Bureau of Investigation (CBI) is investigating the case. 

The VVIP chopper deal was signed in February 2010, and the scandal came to light in 2012 when it was discovered that several politicians and bureaucrats had allegedly accepted bribes to secure the deal. 

The scam was initially uncovered in Italy, and in February 2013, Bruno Spagnolini, the CEO of AgustaWestland, was arrested by Italian authorities on charges that the company had bribed middlemen to obtain the contract with the Indian Air Force (IAF). The contract was cancelled in 2014 by the Congress-led government. 

CBI Case Allegations

Among the key individuals involved in the AgustaWestland deal are former Air Chief Marshal S.P. Tyagi, who was arrested in 2016 and is accused of recommending changes to the operational ceiling of the helicopters that allowed AgustaWestland to be considered for the contract, and Christian Michel, one of three intermediaries hired by AgustaWestland who is alleged to have received EUR 42.27 million for his efforts to sway officials. 

Michel was extradited to India from the United Arab Emirates in 2018 and has claimed that the CBI team wanted him to name the Gandhi family, a claim that the agency has denied. Christian Michel is one of three middlemen (Guido Haschke and Carlos Gerosa were the other two) who were allegedly hired by AgustaWestland to secure the deal in the company's favor by influencing officials.

The CBI had alleged that Tyagi played a role in recommending the reduction in the operational ceiling of the helicopters from 6,000 meters to 4,500 meters, which brought AgustaWestland into the running for the contract. The CBI claims that the IAF was strongly opposed to the change, but when Tyagi became Chief, he recommended it.

CBI Investigation

The Central Bureau of Investigation (CBI) is investigating the case and has filed three charge sheets in connection with the scandal. The first charge sheet, filed in September 2017, named former Indian Air Force Chief SP Tyagi, his cousins, and middleman Christian Michel James among others. The second charge sheet, filed in September 2020, named middleman Rajiv Saxena and companies that facilitated the movement of kickbacks. The third charge sheet, filed in March 2021, named former Defence Secretary Shashi Kant Sharma and four IAF officers for allegedly favoring AgustaWestland in the contract.

It is alleged that kickbacks worth EUR 67 million were to be paid by AgustaWestland through two sets of middlemen - one led by Guido Haschke and another by Christian Michel - in order to secure the contract. Michel signed two agreements with AgustaWestland, one for EUR 42 million (which he later reduced to EUR 30 million) and a second agreement for EUR 28 million, with the "family" - believed to refer to Tyagi and his cousins - to be "honored in full," according to CBI and Enforcement Directorate case documents. 

The CBI has already provided details of bribes worth EUR 62 million that were paid through a circuitous route of companies as well as cash. In its first charge sheet, the CBI claimed that in 2004, officials at the Prime Minister's Office, Special Protection Group, and the IAF and Ministry of Defence agreed to change the mandatory service ceiling of the helicopters from 6,000 meters to 4,500, ultimately benefiting AgustaWestland. The irregularities in the award of the contract led to an estimated loss of EUR 398.21 million to the government in the EUR 556.262 million contract, according to the CBI.

The case is ongoing, with the Central Bureau of Investigation (CBI) continuing to follow the money trail and investigate the involvement of politicians and government officials in the scandal.

Impact of the AugustaWestland Scandal

The Agusta Westland helicopter procurement scandal, in which former Air Chief Marshal SP Tyagi was arrested and later released on bail, has raised questions about the necessity of procuring these helicopters and the impact on the military. It is noted that the involvement of politicians and bureaucrats in the scandal has not been adequately addressed, while bureaucrats from the Ministry of Defence have escaped scrutiny. It has been widely suggested that the then Defence Secretary and other bureaucrats in the Ministry of Defence, including the Joint Secretary(Air) and the Director General (Acquisitions), played a significant role in the procurement process and should be held accountable. The controversy surrounding the procurement has also raised questions about the use of luxury helicopters by politicians at great cost, compared to the use of more affordable helicopters by the Indian Air Force. It is argued that the Agusta Westland helicopters were not necessary for the needs of the military and that the focus should have been on replacing aging MIG-21 fighters.

The AgustaWestland helicopter scandal had significant political and economic consequences in India. It led to the cancellation of the helicopter contract and the blacklisting of AgustaWestland and Finmeccanica by the Indian government. The blacklisting meant that the two companies were banned from participating in any future defence procurement processes in India. 

It led to the arrest of several individuals and the extradition of a middleman and contributed to a perception of corruption within the defence sector. It also had financial consequences for the companies involved and may have damaged their reputations. 

The AgustaWestland helicopter scandal caused public perceptions of corruption within India's defence sector to increase and raised questions about the transparency and accountability of defence procurement processes in the country. Additionally, the scandal has had a detrimental impact on India's reputation as a transparent country in terms of defence procurement, which could potentially damage its relationships with other nations and its ability to secure defence contracts.

Recent Developments: Defence Procurement Ban on AgustaWestland & Parent Company Leonardo Removed by Indian Government

In late 2021, AgustaWestland and its parent company Leonardo have been removed from the list of companies with which defence procurement was suspended by the Indian Union Ministry of Defence. The government had banned Leonardo, then known as Finmeccanica, from all future military contracts in 2014 following the alleged scandal surrounding the VVIP chopper deal. The decision to remove the ban has been met with criticism from the opposition Congress party, which has raised questions about the reported lifting of the ban. In 2014, the Indian government cancelled its contract with AgustaWestland for supplying 12 VVIP helicopters to the Indian Air Force due to alleged breach of contractual obligations and allegations of kickbacks paid by the company.

The decision to exclude them has been met with criticism from the opposition Congress party, which has raised questions about the reported lifting of the ban on procurement from Finmeccanica. The Indian government had previously banned Finmeccanica (now known as Leonardo) from all future military contracts in 2014 after cancelling its contract with AgustaWestland, a subsidiary of Finmeccanica, for the supply of VVIP helicopters to the Indian Air Force due to allegations of kickbacks paid by the company.

3. The Bofors Scandal

What Transpired

The Bofors scandal was a major political scandal that occurred in India in the 1980s and involved allegations of kickbacks being paid in connection with a $1.4 billion deal between the Indian government and Swedish arms manufacturer Bofors for the supply of artillery systems. The scandal centered around the alleged payment of bribes by Bofors to Indian officials, including politicians and military officers, in order to secure the contract for the sale of 410 field howitzer guns.

The allegations of kickbacks were first raised by a Swedish radio channel on April 16, 1987, and the Indian government subsequently launched an investigation. 

CBI Investigation and Charge Sheet

On January 22, 1990, the Central Bureau of Investigation (CBI) lodged an FIR against the then president of Bofors, Martin Ardbo, the alleged middleman Win Chadda, and the Hinduja brothers for criminal conspiracy, cheating, and forgery.

The CBI had filed its first charge sheet in the case on October 22, 1999, against Chadda, Ottavio Quattrocchi, the then defence secretary S K Bhatnagar, Ardbo, and the Bofors company. A supplementary charge sheet was filed against the Hinduja brothers on October 9, 2000. It was alleged that certain public servants and private persons in India and abroad had entered into a criminal conspiracy between 1982 and 1987 in pursuance of which the offences of bribery, corruption, cheating, and forgery were committed.

Subsequent Legal Developments

The case was extensively litigated in the Indian courts, and there have been several significant legal developments in the case over the years. In 2005, the Delhi High Court quashed the CBI case in the Bofors pay-off scandal and exonerated all accused. Before that, in 2004, retired Justice J D Kapoor had exonerated late prime minister Rajiv Gandhi in the case and directed the framing of a charge of forgery under section 465 of the Indian Penal Code against the Bofors company.

In 2011, a special CBI court in Delhi discharged Ottavio Quattrocchi, one of the accused in the case, saying the country could not afford to spend money on his extradition, which had already cost Rs 250 crore. Quattrocchi had fled India in 1993 and never appeared before any court in the country to face prosecution. He passed away in 2013. Several other accused in the case, including S K Bhatnagar, Win Chadda, and Martin Ardbo, have also passed away.

The investigation into the Bofors scandal was complex and involved numerous legal and political challenges. Ultimately, several individuals were charged with offenses related to the scandal, including alleged intermediaries and high-ranking government officials. However, the case filed at the Delhi High Court was ultimately dismissed by the Indian courts due to lack of evidence. 

Supreme Court Appeal

In November 2018, the Supreme Court of India rejected the CBI's appeal to reinstate charges against the Hinduja brothers in the Bofors pay-off case involving the purchase of 400 155mm artillery guns from Swedish company AB Bofors for INR 1473.72 crore in 1986-87. A bench led by the Chief Justice of India, Ranjan Gogoi, stated that the court was not convinced by the CBI's explanation for filing the appeal with the Supreme Court after the Delhi High Court dismissed the charges against the three Hinduja brothers in 2005. The CBI argued that the previous government, the United Progressive Alliance, had not taken any action on the case and that "crime never dies and lapse of time is bar to proceed against offenders however powerful they may be." The Supreme Court pointed out that the CBI was also a party in a pending appeal filed by private individual Ajay Agarwal against the Delhi High Court's decision and suggested that the CBI present its arguments in that appeal. The CBI's appeal challenged the decision of the Delhi High Court on May 31, 2005 to end all proceedings against the Hinduja brothers and AB Bofors in the Bofors scandal, which affected the reputation of the Rajiv Gandhi government and involved allegations of INR 64 crore being paid as a "commission" in the procurement process. The CBI claimed that the gun deal was "sullied and vitiated and the government was cheated of legitimate monies payable to it."

An application has been filed in the Supreme Court of India requesting an early hearing for a petition that challenges the Delhi High Court's 2005 verdict, which dismissed all charges, including those against the Hinduja brothers, in the politically sensitive Bofors pay-off case. The application, filed by advocate Ajay Agrawal, states that the Supreme Court dismissed the CBI's plea against the high court's verdict on November 2, 2018, and allowed the probe agency to raise all grounds in the appeal filed by Agrawal against the same judgment. Agrawal mentioned that he filed the petition in the Supreme Court against the high court's verdict in 2005, and more than 30 years have passed since the matter came to light. The application stated that it is in the interest of justice to hear the matter at an early date, especially since there have been "recurrences of scams" in the defence sector since the accused in the Bofors case have not been punished. The application also mentioned that three years have passed since the Supreme Court issued its November 2018 order and the matter has not yet been scheduled for a hearing. 

Impact of Bofors Scandal 

The Bofors scandal had significant political consequences in India. It led to the cancellation of the artillery contract and the blacklisting of Bofors by the Indian government. The scandal also contributed to a wider perception of corruption within the defence sector in India and raised concerns about transparency and accountability in defence procurement. 

The Bofors scandal also had significant political consequences at the national level. It played a role in the defeat of the incumbent government in the 1989 general election, with the opposition parties using the scandal as a campaign issue. The scandal also damaged the reputation of the then-prime minister, Rajiv Gandhi, and his political party, the Indian National Congress.

In addition to the political consequences, the Bofors scandal also had economic consequences. The cancellation of the artillery contract resulted in significant losses for Bofors and disrupted the company's operations in India. The scandal also had wider economic implications, as it damaged India's relations with Sweden and other countries and potentially impacted foreign investment in the country.

Despite the initial investigation and the charges brought against individuals in connection with the scandal, the case was ultimately dismissed by the Indian courts due to lack of evidence. However, the Bofors scandal continues to be a significant event in Indian politics and continues to be the subject of discussion and debate. 

The Bofors scandal remains a significant event in Indian politics and continues to be the subject of discussion and debate.

4. The Barak Missile Scandal

What Transpired

The Barak missile scandal, also known as the Barak deal scandal, was a political scandal in India that arose in 2000. It involved allegations of corruption and bribery in connection with the purchase of Barak missile systems by the Indian navy from Israeli defence contractors, RAFAEL Armament Development Authority and Israel Aerospace Industries (IAI). 

RAFAEL Armament Development Authority was founded as Israel's National R&D Defence Laboratory for the development of weapons and military technology within the Israeli Ministry of Defence. In 2002 it was incorporated as a limited company called Rafael Advanced Defence Systems Ltd. Israel Aerospace Industries is Israel's major aerospace and aviation manufacturer.

The Barak missile system was a joint development between IAI and RAFAEL and was procured by the Indian government for a total cost of $268.63 million in 2000. The deal faced objections from various groups, including members of the team that had observed the missile's performance in Israel and the Defence Research and Development Organization (DRDO), which recommended an indigenous solution called Trishul instead. Despite these objections, contracts were signed for the procurement of seven Barak systems and 200 missiles.

The Barak missile system was to be used to counter anti-ship missiles and aircraft attacks, and employed advanced radar techniques for target acquisition and tracking. The process of acquiring the missile system began in 1995, when a team of Indian Navy and Defence Research and Development Organization officials attended a demonstration of the system in Israel. In 1997, the Cabinet Committee on Security approved the procurement of the system for the INS Viraat aircraft carrier. 

DRDO Involvement

The Defence Ministry (as per the procurement procedure applicable at the relevant time) referred the proposal to the DRDO for concurrence, but the DRDO argued that an indigenous solution would be a better option. The Defence Ministry had asked the DRDO to provide a cost comparison between the indigenous and imported options. In 1999, the DRDO submitted a report stating that the imported option was significantly cheaper, leading the Defence Ministry to approve the procurement of the Barak system.

The process for acquiring the missile system began in 1995, however, the disagreements between the Defence Ministry and the Defence Research and Development Organisation over the system's capabilities and whether an indigenous solution should be pursued instead, led to the procurement process being eventually approved in 2000. 

Sting Operation: Operation West End

In 2001, a sting operation called "Operation West End" carried out by the news organization Tehelka revealed that several defence deals, including the procurement of Barak missiles by the Indian navy from an Israeli defence contractor, Rafael Advanced Defence Systems, involved the payment of kickbacks. The operation included recorded conversations between an undercover Tehelka operative and R. K. Jain, in which Jain was shown accepting bribes from businessman Suresh Nanda in the amount of ten million.

Justice K. Venkataswami Commission of Inquiry

Allegations of corruption raised through the release of the Tehelka tapes, prompted the formation of the Justice K. Venkataswami Commission of Inquiry, which was established by the National Democratic Alliance government in 2001. The Barak deal was one of 15 defence deals that were examined by the Justice K. Venkataswami Commission of Inquiry. However, the commission's report, submitted in 2004, did not cover the question of illicit gains by individuals or organizations. The United Progressive Alliance government later entrusted the entire inquiry to the CBI after rejecting the commission's partial report and dissolving the commission in 2004. 

CBI Investigation

The Central Bureau of Investigation (CBI) conducted an investigation into the case and filed a First Information Report (FIR) in 2006 under suspicion that individuals committed offenses under the Prevention of Corruption Act, 1988, and Section 120-B (criminal conspiracy) of the Indian Penal Code. 

The CBI's investigation was to focus on whether there was any wrongdoing in the procurement process and whether any individuals or organizations received illicit gains as a result.

The FIR had named several individuals, including former Defence Minister George Fernandes, ex-Samata Party treasurer R.K. Jain, and arms dealer and former naval officer Suresh Nanda (the son of retired Chief of the Naval Staff S.M. Nanda), and alleged that they were involved in kickbacks and bribes in the procurement process. 

The FIR filed by the Central Bureau of Investigation (CBI) also accused former Defence Minister George Fernandes and former Navy Chief Admiral Sushil Kumar of conspiring with intermediaries and other accused parties to push for the procurement of the Barak missile system from Israel despite objections raised by the Defence Research and Development Organization (DRDO). The FIR alleged that Fernandes and Kumar took actions to manipulate the procurement process in favor of the imported option, and that kickbacks were paid to intermediaries to influence the decision. The DRDO had advocated for an indigenous solution called Trishul instead of procuring the Barak missile system from Israel.

The DRDO's recommendation for Trishul was later challenged by Admiral Kumar, who used Right to Information (RTI) applications to show that Trishul was delayed and not ready for deployment at the time.

Case Closed

On 24 December 2013, after investigating for more than seven years, the CBI decided to close the case as it did not find any evidence on the allegations. On 23 December 2013, Defence Ministry headed by AK Antony approved the procurement of additional 262 Barak missiles.

Impact of Barak Missile Scandal

The Bharatiya Janata Party (BJP) accused the CBI of fabricating false evidence and demanded action against the news organization Tehelka, which had conducted a sting operation in 2001 that exposed the alleged corruption in 15 defence deals, including the Barak missile deal. 

The Barak missile scandal had far-reaching consequences for the political, economic, and public relations landscape in India, as well as potential impacts on international relations. It caused significant damage to the reputation of those involved and to the credibility of the procurement process, and may have had negative effects on the defence industry in India.

5. The Scorpene Submarine Scandal

What Transpired

The Scorpene submarine scandal, also known as the data leak scandal, was a political and military scandal in India that arose in early 2000s. The Scorpène-class submarine is a class of diesel-electric attack submarine.

 It involved allegations of bribes being paid in connection with a deal between the Indian government and French defence firm Thales for the construction of Scorpene-class submarines. The scandal centered around the alleged leak of over 22,000 pages of technical documents relating to the Scorpene submarines, which were being built by the state-owned Mazagon Dock Limited in Mumbai under license from the French defence firm DCNS (now known as Naval Group). 

In 2002 (as per the Outlook magazine) concerns were raised about the Scorpene deal, a submarine acquisition program by the Indian navy, due to its lack of competitive bidding and being a single tender deal. Saikat Datta's investigation into the dismissal of three naval officers in the naval war room leak case led to suspicions about the involvement of K.B. Parashar, Ravi Shankaran, and the then naval chief Arun Prakash in the Scorpene deal. Despite the evidence against them, the then defence minister Pranab Mukherjee initially referred to the case as involving "commercial information." A week later, he changed his stance and handed the case over to the Central Bureau of Investigation. 

The Scorpene deal was finalized for 18,798 crore rupees in October 2005.

Delhi High Court

A case was filed in 2007 in the Delhi High Court to investigate whether bribes were paid in the deal, with arms dealer, (and reportedly holding the informal title of God of War) Abhishek Verma and Ravi Shankaran, a relative of a former Navy chief, named as suspects. However, the case was dismissed by the Delhi High Court in 2016 and Verma was absolved of any wrongdoing. 

Data Leaks Reported by ‘The Australian’

In August 2016, The Australian newspaper reported that it had obtained over 22,000 pages of classified documents detailing the capabilities of the Scorpene submarine, which was being built by French naval contractor DCNS for the Indian Navy. The newspaper published only a fraction of these documents, which had been redacted to remove sensitive information.

Who Is Accountable for the Data Leak?

The leak, which was first reported by “The Australian” newspaper. DCNS has stated that the leak may have occurred at India's end rather than from France. 

The source of the leak is unclear, but it is believed to have originated from DCNS in France, as the leaked information also included confidential files on plans to sell French frigates to Chile and the French sale of the Mistral-class amphibious assault ship carrier to Russia. 

There are also fears in Australia surrounding the security of data on the future fleet of its own Navy, as French company DCNS had won the bid to design the new fleet of Australian $50 billion submarines.

The Indian government had requested a report from France regarding the leak of thousands of pages of documents related to the Scorpene submarine project, which had exposed several secrets of the vessel set to be inducted into the Indian Navy in around 2015-16. 

The data seems to have been leaked by a French navy personnel working for DCNS, the French manufacturer of the submarine, and made its way to a Southeast Asian nation before reaching Australia in an unprotected format. The leak had prompted the Indian Navy to prepare a detailed report on the leak and assess its impact on the ongoing project to induct six Scorpene submarines. The navy had also asked DCNS to disclose the extent of the leak.

What Data was leaked?

The Scorpene submarine data leak in India, which occurred in August 2016, compromised the stealth capabilities of six new Indian submarines being built by French naval contractor DCNS. The leaked documents contained detailed information about the submarines' design, capabilities, and vulnerabilities, including specifications of the submarine's torpedo launch system and combat system, information about the speed and conditions needed for using the periscope, and details of the submarines' acoustic signature, self-noise levels, propeller configuration, and noise generated by on-board machinery. The data also included information about the frequencies at which the submarines gain intelligence, their noise levels at certain speeds, their diving depths, range, and endurance, and their magnetic, electromagnetic, and infra-red data. In addition, it was reported that the leak included sensitive details on the Exocet SM39 anti-ship missile expected to be deployed on the new subs, including information on the number of targets the missile is capable of processing and how many targets could be downloaded before firing.

Concerns

The leak had caused concern in India, as the project was in an advanced stage and one submarine had already been tested. The deal couldn’t be scrapped, as many major components of the submarines had been made as per the design and major modifications couldn’t be undertaken. India considered invoking the non-disclosure clause in its contract with DCNS, which prohibits the company from sharing information related to the contract. However, any actions may have been futile as leaked sensitive data had the potential to compromise the safety and security of the submarine's crew.

The Navy attempted to minimize the impact of the leak on the capabilities of the submarine, acknowledging that the leak was serious but stating that the leaked information was old and that the submarine's ability to remain stealthy would depend on the tactics and other factors such as geography.

Government Response 

In response to the leak, the Indian government ordered an internal audit of the project and also took up the matter with the French government, requesting them to investigate the incident with urgency. The Indian Navy also conducted a detailed assessment of the potential impact of the leak and took steps to mitigate any probable security compromise.

Several officials were suspended in connection with the leak, including the then Managing Director of Mazagon Dock Limited (MDL), the state-owned shipyard building the Scorpene submarines in Mumbai, and the Deputy General Manager (Technical) of MDL. The leak was believed to have originated from the MDL, but it was not clear whether the leak was the result of a cyber attack or human error.

The Indian government stated that the leak did not compromise the operational capabilities of the Scorpene submarines. The Indian government requested the French government to investigate the leak and conducted an internal audit, while a high-level committee was constituted by the Indian Ministry of Defence to assess the potential impact of the leak.

Indian navy made a statement in the immediate aftermath of the Scorpene submarine data leak scandal, claiming that the leaked documents "do not pose any security compromise as the vital parameters have been blacked out." 

Impact of Scorpene Submarine Scandal – Need for Data Security

The Scorpene submarine scandal had significant consequences for the Indian navy and raised concerns about the security of sensitive military technology. 

It has since been revealed that the blacked out details and redactions of the leaked information were actually done by the Australian media organization that published the documents, and that the leaked data itself does contain the "vital parameters" that the navy's statement referred to. In addition, it has also been pointed out that only a small portion of the over 22,000 leaked documents have been made public, and it is therefore impossible to confidently declare that national security has not been compromised based on the information that has been released. The leaked documents reportedly contain sensitive information about the submarine's capabilities, including its radiated noise levels and frequency bands, which could potentially compromise its effectiveness in the event of a conflict.

The Scorpene submarine data leak scandal highlighted the need for data security reform in Indian defense procurement. The leak of sensitive information about the submarine's capabilities, including its radiated noise levels and frequency bands, could potentially compromise its effectiveness in the event of a conflict. The incident also raised concerns about the security of other defense procurement projects and the potential for similar data leaks to occur in the future. To address these issues, the Indian government and defense contractors may need to implement stricter data security measures and protocols to protect sensitive information related to defense procurement projects. This could include measures such as increased encryption, secure data storage and transmission, and more robust access controls. In addition, it may be necessary to adopt a more comprehensive approach to cybersecurity that includes regular training and awareness programs for defense sector employees, as well as the implementation of robust whistle-blower protection systems to encourage reporting of any potential data breaches.

Indian Scorpene Submarine Project 

The deal, which was signed in 2005 for a cost of INR 18,000 crore (approximately $2.6 billion), has been the subject of allegations of kickbacks and the leaking of sensitive information. The case was investigated by the Central Bureau of Investigation (CBI), but the agency later reported that it had found no evidence of kickbacks being paid. The project has also been plagued by delays and cost overruns, with the construction of the submarines being undertaken by the state-owned Mazagon Dock Limited (MDL) in Mumbai under a license from the French defence firm DCNS (now known as Naval Group). The project has faced difficulties due to disagreements between DCNS and MDL, and a major breach and flooding at the MDL facility in 2011. The first submarine was originally scheduled to be delivered in 2012, but was not completed until 2015 and is set to be inducted into the Indian Navy in October of this year.

6. Ongoing Investigation by CBI into Kilo Class Submarines Confidential Information Leak for Illegal Gratification

The Indian government has granted permission for the prosecution of four current and former naval officers in connection to an alleged corruption case involving the purchase of spare parts for retrofitting Russian Kilo-class submarines. 

The Central Bureau of Investigation (CBI) had filed chargesheets in November of last year and subsequently requested the government's approval for the prosecution of the accused officers. 

The CBI launched an investigation into the case in September following reports that some serving officers at the Western Headquarters of the Navy were receiving pecuniary benefits from retired officers while working on retrofitting the Kilo-class submarines. It is alleged that the Commander discussed crucial details of the modernisation project with the two retired officers for illegal gratification.

The CBI conducted searches and arrested two retired officers, as well as a serving officer. An alleged "hawala" operator and the director of a private company were also taken into custody. 

The CBI conducted raids at 19 locations in Delhi, Mumbai, Noida, and Hyderabad and is examining several people and recovered digital evidence in connection with the case. An internal inquiry by the Navy is also underway, being led by a Vice Admiral, to determine how the information was leaked despite security protocols and to identify any potential weaknesses that need to be addressed. 

India operates eight Kilo class submarines, four HDW German-origin submarines, and three Scorpene submarines built in India with technology transferred from France (with three more Scorpene submarines set to join the fleet in the future). The country is also pursuing a project worth INR 43,000 crore ($6.3 billion) to build six advanced submarines in the country under the government's "strategic partnership" model to increase the Indian Navy's underwater force levels and counter the rapid expansion of China's submarine fleet.

The Central Bureau of Investigation (CBI) in India has filed a third chargesheet in connection with the submarine retrofitting information leak case, naming two naval commanders and two other individuals. The alleged leak of information is related to the INS Sindhuratna-MRLC (Medium Refit Life Certification) project. The CBI has previously filed two chargesheets against six individuals and also a Hyderabad-based firm in connection with the case, which concerns the leak of confidential information about India's Kilo class submarines. Several accused individuals, have already been granted default bail in the matter. The CBI is still investigating allegations of the illegal sharing of confidential commercial information on the MRLC programme of India's Kilo class submarines for illegal gratification.

7. The Kargil Coffin Scam

The Kargil Coffin Scandal, also known as the Coffingate scandal, involved allegations of corruption related to the purchase of materials such as coffins, missiles, and munitions for the Indian military following the Kargil War in 1999. Specifically, this scandal involved the procurement of aluminum caskets to bring the bodies of martyred soldiers back from the Kargil war in 1999.

The scandal involved the procurement of flag-draped aluminium caskets for the bodies of martyred soldiers at exorbitant prices from US-based companies Buritrol and Baizarces. The scandal came to light when a Comptroller and Auditor General (CAG) report revealed that the caskets were of poor quality and were excessively priced. The size of the scandal was estimated to be around Rs 24,000 crore. 

Reportedly, the Indian government was alleged to have paid significantly higher prices for the caskets compared to their actual cost. It was reported that the government paid $2,500 for each casket, which was 13 times the original cost. The allegations led to widespread public outrage and calls for an investigation into the matter.

The scandal was first brought to light through a public interest litigation (PIL) filed in 2004, which claimed that in the aftermath of the war, the National Democratic Alliance (NDA) government, led by Atal Bihari Vajpayee, had made several purchases of defence materials worth a total of approximately INR 24,000 crore (about $3.4 billion at the time), in which politicians, middlemen, and foreign firms were involved and had profited. The PIL alleged that there were large-scale irregularities in the purchases, including snow suits, aluminum caskets from a US company, thousands of terminally-guided munitions from a Russian firm, anti-material rifles from South Africa, and Barak missiles from Israel.

The said public interest litigation (PIL) sought a Central Bureau of Investigation (CBI) probe into the alleged scam, which was estimated to have caused a loss of over INR 24,000 crore (approximately USD 3.6 billion). 

The court ordered the CBI to investigate the allegations and the agency lodged an FIR in 2006 and filed a charge sheet against several accused, including former Defence Minister George Fernandes and other serving and retired army officials. However, in December 2013, the trial court discharged all the accused in the case for lack of evidence. In a status report submitted to the Supreme Court on October 12, 2015, the CBI claimed that it could not gather enough evidence to establish the guilt of the accused and the PIL was dismissed.

8. The Frozen Meat Scam

The Frozen Meat Scandal, also known as the Ladakh Meat Scandal, arose in 2007 when allegations of irregularities in the procurement of frozen meat for troops posted in Ladakh were made. It was alleged that the procurement process was irregular and that the quality of the meat supplied was substandard. 

The scandal centred around the procurement of frozen meat for troops by the Army Service Corps, a logistics branch of the Indian army. It was alleged that the procurement process was irregular, and that the quality of the meat supplied was substandard.

The allegations led to an investigation by the Indian army and the suspension of several officials, including Lt. Gen. S.K. Dahiya, the then-chief of the Army Service Corps. Lt Gen Dahiya was later found guilty of the irregularities and was given a recordable censure by the army's Northern Commander. As a result, he was forced to retire from the military.

The frozen meat scandal highlights the issue of corruption in military procurement in India, which has been a longstanding problem. It also highlights the importance of ensuring the quality and safety of food supplies for troops, especially those deployed in harsh and isolated environments such as Ladakh. The scandal led to calls for greater transparency and accountability in military procurement processes, as well as for measures to ensure the quality of supplies for troops.

9. The Ration Supplies Scam

The ration supplies scam, which involved allegations of discrepancies in the procurement of dry rations for the military.

The ration supplies scam was a military scandal in India that arose in 2007. It involved allegations of discrepancies in the procurement of dry rations for the military.

The scandal centered around the procurement of dry rations for the military by the Army Service Corps, a logistics branch of the Indian army. It was alleged that the procurement process was irregular and that the quality of the rations supplied was substandard. The allegations led to an investigation by the Indian army and the dismissal and punishment of several officials, including the then-chief of the Army Service Corps, Lt. Gen. S.K. Sahni.

The ration supplies scam in India involved allegations of discrepancies in the procurement of rations for Indian Army personnel stationed in the Siachen glacier and other high altitude areas in around 2004. The case came to light after a report by the Controller of Auditor General (CAG) revealed that soldiers had been given food items such as wheat, rice, pulses, and edible oil that were well past their expiration date. 

Sahni was accused of allowing the purchase of expired rations for troops during his tenure as Director-General of the ASC, reversing the tendering process for procurement of pulses, failing to ensure timely completion of supply contracts, and overlooking other procedural formalities.

As a result of the investigation, Lieutenant-General SK Sahni, the director general of supplies and transport at the time, was found guilty of professional misconduct and sentenced to three years' rigorous imprisonment by a court martial in 2011. Sahni had retired in 2006, and was the highest-ranking army officer, serving or retired, to face such disciplinary proceedings under the Army Act.

Lt. Gen. SK Sahni, was convicted by a General Court Martial (GCM) on six counts of professional impropriety, intent to defraud, and acts prejudicial to military discipline, was also cashiered by the GCM. This meant that Sahni shall lose his retirement benefits, including his pension and gratuity. 

Sahni, was from the Army Service Corps (ASC) and served as the Director-General for supplies and transport, was indicted by the army for allegedly supplying substandard meat and dry rations to troops stationed at high altitude areas, including the Siachen glacier. 

Sahni had pleaded not guilty to the charges against him and his case went through legal wrangling after he filed pleas in the Delhi High Court and the Armed Forces Tribunal.

10.  The Adarsh Housing Society Scam (Colaba Naval Officers Complex scandal)

The Adarsh Housing Society was a 31-storey apartment complex located in Mumbai's Colaba neighborhood. The building was intended to house war heroes and war widows of the 1999 Kargil war, but it was eventually occupied by bureaucrats and relatives of politicians who had no connection to the Kargil war. The issue of the Adarsh Housing Society first came to light in 2003, but a full investigation did not begin until 2010, when the Indian Army and the Central Bureau of Investigation (CBI) launched separate probes.

The investigation revealed that the Navy had opposed the Maharashtra government's permission for Occupation Certificates for the building due to "serious security concerns," as the 100-meter tall building was located next to a planned helipad and military installations. It was also discovered that the society did not obtain a No Objection Certificate from the Ministry of Environment and Forests and that it only had permission to construct six floors. When the CBI began investigating potential cases of benami transactions, the Enforcement Directorate also became involved in the case.

In 2013, the CBI registered an FIR and charged 14 people, including the then-Maharashtra Chief Minister Ashok Chavan, with criminal conspiracy under Indian Penal Code Section 120(b) and various sections of the Prevention of Corruption Act. The Congress party, which was in power in the state at the time, forced Chavan to resign from his position. In 2011, the Maharashtra government established a two-member judicial team to investigate the allegations surrounding the Adarsh Housing Society. In 2013, the team revealed 25 illegal allotments in its findings, including 22 purchases made by proxy.

On July 4, 2012, the CBI filed its first chargesheet in the case before a special CBI court. During the course of the investigation, it was discovered that the society did not have environmental clearance. The Bombay High Court ordered the demolition of the apartments and called for the initiation of criminal proceedings against politicians and bureaucrats for alleged abuse of power, stating that the tower was illegally constructed. The court ordered the Union Ministry of Environment and Forest to carry out the demolition at the expense of the Adarsh Society.

Ashok Chavan, the former Chief Minister of Maharashtra, faced controversy and legal challenges related to his involvement in the Adarsh housing scam. His relatives, including his mother-in-law, were accused of owning three flats in the Adarsh Housing Society. Chavan was also accused of approving the sale of 40% of the houses to civilians. In 2013, the Maharashtra Governor at the time, K Sankaranarayanan, refused to grant permission for Chavan to be prosecuted, but a Sessions court later upheld his inclusion as an accused in the case. In 2016, the Maharashtra Governor granted permission for Chavan to be prosecuted, but Chavan challenged this decision in the Bombay High Court. In 2017, the Bombay High Court ruled against Chavan being prosecuted, overturning the Governor's decision. In 2012, the CBI arrested Pradeep Vyas, a senior government official, and nine other bureaucrats, including Chavan, were named in the CBI's chargesheet. In 2016, the Bombay High Court ordered the Adarsh building to be demolished, stating that it was illegally constructed. The society appealed this decision to the Supreme Court, which ordered a stay on the demolition in 2018. The Indian army was then assigned to secure the building. 

11.  The Sukna Land Scandal

The Sukna land scam involved the illegal transfer of a 70-acre plot of land adjacent to the military cantonment in Sukna, West Bengal, to a private real estate developer for the purpose of building an educational institution. The scam became public in mid-2008 and resulted in a court of inquiry being initiated by the then Chief of the Eastern Army Command, Gen. V.K. Singh.

The allegations in the Sukna land scam centered around the conversion of a 70-acre plot of land adjacent to the Sukna military station in Siliguri, West Bengal, into an educational institution by a private trust. It was alleged that the land was handed over to the trust without following proper procedures and that senior military officials, including Lt. Gen. Avadesh Prakash and Lt. Gen. P.K. Rath, were involved in the matter.

Two senior officers, Lt. Gen. Avadhesh Prakash and Lt. Gen. P.K. Rath, were court-martialed and found guilty in the alleged scam. Lt. Gen. Rath was sentenced to loss of seniority of rank for 18 months, forfeiture of 15 years' service for the purpose of pension, and a severe reprimand. However, the Armed Forces Tribunal later quashed the court martial of Lt. Gen. Rath and imposed a fine of Rs. 1 lakh on the Army for "loss of honour" in the case.

In 2017, the Armed Forces Tribunal also held Lt. Gen. Prakash guilty of the charge of "unbecoming conduct" and ordered that he not be given arrears of pension from the date of dismissal of service until the date of the tribunal's order. However, in 2021, the Supreme Court set aside the General Court Martial (GCM) order dismissing Lt. Gen. Prakash from service, stating that the GCM was not "validly constituted" and that its proceedings were "vitiated". The Supreme Court also set aside the Armed Forces Tribunal's 2017 order and directed the payment of all benefits, including pensions, to Lt. Gen. Prakash within three months. 

12.  The Rs 14-crore bribe to Gen. V. K. Singh to clear the purchase of sub-standard Tatra trucks for the military.

The Tatra truck scam was a corruption scandal in India that arose in 2012 and the investigations are continuing in this case. 

It involved allegations that bribes were paid to clear the purchase of sub-standard Tatra trucks for the military by the Indian Army. The former Chief of the Army Staff, Gen. V.K. Singh, alleged that he was offered a bribe of INR 14 crore (approximately $2.5 million at the time) by a former Army officer to clear the purchase of the trucks. There were also allegations that INR 750 crore (approximately $135 million at the time) was paid as bribes for the purchase of the trucks and components. Many experts believed that the Army was paying nearly double the European price of around INR 50 lakh (approximately $90,000 at the time) for the Tatra trucks. 

The former Chief of the Army Staff, Gen. V.K. Singh, alleged that he was offered a bribe of INR 14 crore (approximately $2.5 million at the time) by a former Army officer to clear the purchase of the trucks. 

There were also allegations that INR 750 crore (approximately $135 million at the time) was paid as bribes for the purchase of the trucks and components. Many experts believed that the Army was paying nearly double the European price of around INR 50 lakh (approximately $90,000 at the time) for the Tatra trucks.

Reportedly, Gen. Singh alleged that he was offered a bribe of Rs 14 crore (approximately $2.5 million at the time) by a former Army officer to clear the purchase of the trucks. Gen. Singh reported the matter to the Prime Minister and sent a letter warning that the Army was ill-equipped to fight a war and that the security of the country was at risk. The allegations led to an investigation by the Central Bureau of Investigation (CBI), the national investigative agency in India.

In 2012, the Central Bureau of Investigation (CBI) in India launched an investigation into allegations of corruption in the purchase of Tatra trucks for the Indian Army. The allegations involved the procurement of 600 all-terrain Tatra trucks from state-run company BEML.

The Indian government ordered a Central Bureau of Investigation (CBI) probe into allegations of corruption involving BEML, a public sector undertaking, following a complaint by Army Chief General VK Singh that he had been offered a bribe of INR14 crore ($2.5m) by a lobbyist to clear a deal for the purchase of sub-standard vehicles for the army. The Defence Ministry has said that the Defence Minister, AK Antony, had already given his approval for a CBI investigation into the case in 2018, prior to the publication of a newspaper report on the matter. The ministry has also stated that it received a letter from ministerial colleague Ghulam Nabi Azad on 5 October 2009 regarding allegations of a scam in the purchase of vehicles by BEML and that Antony had asked the Secretary of Defence Production to look into the issues raised in the complaint. The vigilance wings of the Ministry of Defence and BEML examined the matter. There has been correspondence between the CBI and the Chief Vigilance Officer of BEML regarding the allegations.

The CBI launched an inquiry into corruption allegations in the Tatra deal in 2012, but filed a closure report in 2014 stating that it had no evidence to proceed with the investigation. However, the closure report has not been accepted by the court and, a special judge questioned the CBI's plea to close the case due to a lack of proof in November of last year. Special Judge Pulastya Pramachala had said it is 'Shocking that the agency wanted to close the case but has not been able to produce the defence procurement manual that was applicable for military purchases prior to 2006 when the alleged scam involving supply of trucks to the armed forces took place.

In 2020, the Defence Ministry of India banned Vectra Advanced Engineering Private Ltd., a company connected to the Central Bureau of Investigation's (CBI) probe into the Tatra Truck deal scandal and allegations of bribery by former Army Chief Gen. VK Singh. The one-year suspension of business dealings has been approved by Defence Minister Rajnath Singh and prohibits any Defence Ministry entity from conducting business with Vectra Advanced Engineering Private Ltd. for at least a year. The ministry's decision is based on two FIRs (First Information Reports) registered by the CBI in 2012, one relating to allegations of corruption in the purchase of Tatra trucks for the Army and the second concerning allegations that Gen. Singh was offered a bribe while in office. Vectra Advanced Engineering Private Ltd. is listed on its website as a producer of cranes and loaders and is believed to have been participating in a multi-crore acquisition program by the Indian Army when the ban was imposed. 

On September 29, 2022, former defence minister A.K. Antony testified as a prosecution witness in a case involving former army chief General V.K. Singh, who had alleged that he was offered a bribe when he was in office in order to clear a deal to procure Tatra trucks for the Indian Army. In his testimony, Antony stated that during an "unscheduled meeting," Gen. Singh had told him about the alleged offer of a bribe from now-retired Lieutenant General Tejinder Singh, but did not provide any written complaint to either Antony or the defence ministry. Antony also claimed that Gen. Singh had told him he did not want to pursue the matter. Antony, who is prosecution witness number 14 in the case, also revealed that Gen. Singh had mentioned the name of Tejinder Singh as the person who had offered him the bribe, and that he had immediately contacted the defence secretary, Shashi Kant Sharma, and ordered a Central Bureau of Investigation (CBI) inquiry into the matter after reading a report about the alleged bribe in a newspaper. The CBI subsequently lodged an First Information Report in October 2012 for allegedly offering a bribe of INR 14 crore (approximately $2.5 million at the time) on behalf of the supplier of the high-mobility trucks, and filed a charge sheet in 2014 based on circumstantial evidence. In August 2019, the special CBI court framed charges under the Prevention of Corruption Act against Lt. Gen. Tejinder Singh. Antony's cross-examination was conducted by senior advocate Pramod Dubey, the defence counsel for Lt. Gen. Tejinder Singh, who asked Antony if it was correct that Gen. Singh did not give any complaint in writing and did not mention the date and time when the alleged bribe was offered. Antony confirmed both points.

13. The HDW Submarine Scandal

The HDW submarine scandal involved allegations of corruption in connection with a deal between the Indian government and the German defence company HDW for the purchase of submarines. 

In 1979, the Cabinet Committee on Political Affairs (CCPA) approved the acquisition of submarine-to-submarine killers (SSKs) for the Indian Navy, with a requirement that the submarines have a diving depth of 350 meters. A nine-member negotiating committee shortlisted four offers, including one from HDW, but ultimately rejected HDW's offer because it only had a diving depth of 250 meters. However, HDW was later re-added to the list of contenders if it could improve its diving depth. 

In 1979, a delegation of officials from various Indian ministries visited shipyards in Europe and the US and concluded that the best option for the Indian Navy was the Kockums offered by a Swedish firm. However, after a change in government, HDW's offer was accepted and a deal was signed in 1982. 

The deal later came under scrutiny due to allegations of pay-offs and a 7% commission being paid to secure it. The Central Bureau of Investigation (CBI) launched an investigation in 1987 and filed a First Information Report (FIR) naming senior officials, bureaucrats, and agents of HDW as suspects. 

In the late 1980s, the Indian government implemented a policy of blacklisting defence firms that were found to be engaging in the use of middlemen or paying bribes to secure defence contracts. The HDW scandal arose after the company told the Indian ambassador to Germany about commissions being paid to middlemen for securing the contract. 

In 1987, the government blacklisted HDW as a result of the scandal. The blacklisting posed challenges for the Indian navy in obtaining spare parts and maintaining its submarine fleet, as the complex NATO identification system for spare parts and the inability to deal directly with a blacklisted firm forced the navy to deal with dubious firms to keep its submarine fleet running. This led to instances of the navy paying significantly higher prices for spare parts than they were worth in the market.

14.  The Czech Pistol Scandal

In February 1986, the Ministry of Home Affairs in India decided to replace its 0.38 caliber revolvers with 9mm pistols, and began exploring options for importing them. The Czech representative in India offered to meet the country's requirements for the arms, and on September 3, 1986, a contract was signed by an official from the Ministry of Home Affairs and the commercial counselor of the Czechoslovakian embassy in India for the purchase of 55,000 pistols at a cost of INR 3,438 (Indian Rupees) per piece. However, following allegations of irregularities in the purchase, the contract was cancelled and the import of Czech pistols was stopped. Despite this, expenditure on items such as air freight and bank commission totaling INR 24.59 lakh (Indian Rupees) could not be recovered from the arms supplier, Merkuria.

The Central Bureau of Investigation (CBI) subsequently registered a First Information Report (FIR) under the Prevention of Corruption Act (PCA) of 1947, alleging that Arun Nehru, the internal security minister at the time, had entered into a criminal conspiracy with other officials, including BP Singhal and AK Verma, causing a loss to the government. In 2007, after nearly 20 years of investigation, the CBI filed a final report before the trial court stating that it had not found any incriminating evidence against Nehru. However, it did seek permission to prosecute Singhal and Verma, which was denied by the government.

Despite being cleared by the CBI, Nehru and the other officials were still facing trial in a special CBI court on charges under the Indian Penal Code (IPC) and the PCA. They appealed to the Delhi High Court to have the trial proceedings dismissed, but their request was denied. The high court did grant the accused exemption from appearing before the trial court. In 2013, the Supreme Court of India issued a notice to the CBI and stayed the proceedings, giving relief to Nehru. Arun Nehru subsequently passed away in 2014. 

SOLUTIONS & CONCLUDING STATEMENTS

There has been a long history of defence procurement scandals and corruption in India, starting with the Bofors scandal in the 1980s (and continuing through to more recent cases such as the 2G and coal scams) and the controversy surrounding the Rafale deal. These scandals have had serious political consequences, with the governments involved often paying the price for their alleged wrongdoing. 

However, despite investigations by investigative agencies, the cases often fail to reach a logical conclusion, and the individuals or organizations involved are not held accountable. The lack of transparency in defence procurement has also been a longstanding issue in India, and the failure to address this problem has led to a lack of trust in the government and the defence industry. The ongoing controversy surrounding the Rafale deal, submarine data leaks, etc. frequent news reports on CBI investigations and arrests of high-ranking army personnel, has kept these issues to the forefront and raised questions about the effectiveness of India's defence procurement policy. 

The lack of a transparent and effective procurement policy has also had negative consequences for the Indian armed forces, as it has hindered their ability to procure necessary equipment and maintain their readiness.

Ideally, some measures that can be taken to prevent defence procurement scandals in India:

• Strengthening regulatory frameworks: There should be clear laws and regulations in place to govern defence procurement and prevent corruption. This could include measures such as establishing an independent procurement agency or a defence procurement ombudsman to oversee the process.
• Implementing stricter laws and regulations: India could strengthen its anti-corruption laws and regulations, including the Prevention of Corruption Act and the Prevention of Money Laundering Act, to make it more difficult for defence contractors to engage in corrupt practices.
• Strictly enforcing anti-corruption laws: There should be strict enforcement of anti-corruption laws and penalties for those found guilty of corruption in defence procurement.
• Enhancing accountability and oversight: There should be stronger oversight mechanisms in place to ensure that defence procurement processes are conducted in a transparent and fair manner. This could include setting up parliamentary committees or independent oversight bodies to monitor the procurement process.
• Promoting integrity and ethical behavior: It is important to promote a culture of integrity and ethical behavior within the defence industry to prevent corruption. This could include measures such as training programs and codes of conduct for defence contractors.
• Encouraging domestic defence production: Increasing domestic defence production can reduce the reliance on foreign defence contractors and reduce the risk of corruption. This could be done through policies such as the "Make in India" initiative, which aims to encourage domestic defence manufacturing.
• Enhancing interagency coordination: Improved coordination between different agencies involved in defence procurement, such as the Ministry of Defence, the armed forces, and the Central Bureau of Investigation, can help prevent corruption and improve transparency.
• Improving the tender and evaluation process: This could involve adopting more stringent evaluation criteria for contracts, reducing the scope for discretion in the selection of contractors, and ensuring a level playing field for all bidders.
• Improved transparency: India could increase transparency in its defence procurement process by publicly disclosing information about contracts, bids, and other relevant details. This could include publishing details about contracts online, as well as making it easier for the public to access information about defence procurement.
• More competition: India could encourage more competition in its defence procurement process by allowing more foreign companies to bid for contracts, as well as by providing incentives for domestic companies to enter the defence sector.
• Stricter penalties: India could also strengthen the penalties for individuals and companies found to be engaging in corrupt practices in the defence procurement process, including fines, imprisonment, and debarment from future contracts
• Defence procurement can be a complex process, and there have been instances of alleged corruption and murky dealings involving defence contractors in India. In some cases, the use of middlemen or the payment of bribes has been alleged in connection with defence contracts. In an effort to address these issues, the Indian government has implemented policies such as blacklisting defence firms that engage in such practices and promoting indigenization, or the development of a domestic defence industry. 

India's past experience of canceling ongoing defence contracts has resulted in financial repercussions for the Ministry of Defence and difficulties in maintaining already procured systems. In the late 1980s, the government implemented a policy of blacklisting defence firms that were found to be engaging in the use of middlemen or paying bribes to secure defence contracts. This policy was prompted by the Bofors scandal, in which allegations arose that individuals close to Prime Minister Rajiv Gandhi received kickbacks in connection with the purchase of artillery guns from the Swedish firm Bofors. In 1987, the government blacklisted Bofors, but this ban was lifted in 1999 during the Kargil conflict, when the Bofors guns were in high demand but shortages of spare parts limited their use. The blacklisting of Bofors has hindered the Indian Army's ability to purchase modern artillery guns, and the transfer of technology from Bofors has been largely ignored by the government. The HDW scandal, involving the German submarine maker, also resulted in blacklisting and posed challenges for the Indian navy in obtaining spare parts and maintaining its submarine fleet. The blacklisting of AgustaWestland, a UK firm, has raised questions about the maintenance of helicopters procured from the company, including VVIP helicopters and anti-submarine Sea King helicopters. The blacklisting of foreign military companies has led to a narrowing of weapon platform choices for India, resulting in the need to pay higher than market rates and the creation of indirect monopolies. 

Blacklisting defence firms can be a useful tool for the government to address issues of corruption and unethical behavior in the defence sector. It involves prohibiting certain firms from participating in government contracts or engaging in business with the government due to their involvement in corrupt or illegal activities.

However, blacklisting defence firms can also have some potential drawbacks and challenges. One issue is that it can disrupt the procurement process and lead to delays in the acquisition of essential equipment and capabilities for the military. This can have negative impacts on the effectiveness and readiness of the armed forces.

Another challenge is that blacklisting decisions can be difficult to enforce, especially if the firm in question operates in multiple countries or has subsidiaries that can still participate in government contracts. Additionally, blacklisting decisions can be subject to legal challenges, which can further complicate the process and result in delays or uncertainty.

It is also important to ensure that blacklisting decisions are based on solid evidence and are made through a fair and transparent process. There have been instances where blacklisting decisions have been perceived as being influenced by political considerations or as being arbitrary, which can undermine the credibility of the process and lead to a lack of confidence in the government's commitment to addressing corruption and promoting integrity in the defence sector.

In late 2021, the Indian Union Ministry of Defence has issued a list of companies with which defence procurement has been suspended, put on hold, or debarred. According to the list, six companies - Singapore Technologies Kinetics Ltd (STK), Israel Military Industries Ltd (IMI), TS Kisan & Co Pvt Ltd, RK Machine Tools Ltd, Rheinmetall Air Defence (RAD), and Corporation Defence - have been debarred, while doing business with 13 firms has been put on hold or suspended. These include IDS, Infotech Design System (IDS), Aeromatrix Info Solution, Shanx Oceaneering Inter Spiro India, Experts Systems, Unitech Enterprises, Kelvin Engineering, Atlas group of companies, Offset India Solutions, Pilatus Aircraft, and Vectra Advanced Engineering. Procurement has also been restricted from Rolls Royce and its subsidiaries and Tatra Trucks of the Czech Republic. It is worth noting that AgustaWestland and its parent company Leonardo were not included on this list.

In order to address these issues, it is important for the government to have clear and transparent criteria for blacklisting decisions, and to ensure that these decisions are based on reliable and objective evidence. It is also important to have robust systems in place for reviewing and challenging blacklisting decisions, and to ensure that the process is transparent and fair. By taking these steps, the government can help to ensure that blacklisting is an effective tool for addressing corruption and unethical behavior in the defence sector, while minimizing any negative impacts on the procurement process and the effectiveness of the armed forces.

By manufacturing defence systems domestically, India may be able to reduce its reliance on foreign companies and avoid the potential issues that can arise when procuring defence systems from abroad. However, it is important to note that building a domestic defence industry can be a complex and time-consuming process, and it may take time for the Make in India initiative, which aims to encourage domestic manufacturing, to achieve its goals in the defence sector. Ultimately, the decision of whether it is better for India to manufacture defence systems domestically or to procure them from foreign companies will depend on a range of factors, including the country's capabilities and resources, the cost and availability of technology, and the specific needs of the military.