Last updated on: February 14, 2012 09:32 ISTThe US Department of Justise defines white collar crimes as economic offenses that constitute those classes of non-violent but illegal activities which principally involve traditional notions of deceit, deception, concealment, manipulation, breach of trust, subterfuge or illegal circumvention.

"A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community."

This was the profound observation of the Hon'ble Supreme court in the securities scam case - popularly called as Harshad Mehta case.

Obviously, when an economic crime is carried out in a calm and collected manner, it becomes extremely difficult even for best of investigating agencies to figure out the role played by various parties.

Some may have actively connived; some passively. And that is the crux of the issue - whether the former finance minister "passively connived" with the other accused in the 2G scam.

It is in this context one has to look into the petition of Subramanian Swamy to the Trail Court seeking to include P Chidambaram as an accused in the 2G scam.

The court neatly summarized the questions before it in Para 64 of its Order as to whether the former finance minister had a role in pricing spectrum (along with Raja) in 2008 at 2001 prices and subsequently "allowed" dilution of equity by companies who got spectrum at such ridiculously low prices.
The Order concedes that Chidambaram "agreed" that spectrum in 2008 could be priced at rates discovered in 2001 and also "told A Raja that there is no need to revisit the same." Is this dissuasion material?
The Trial Court concludes: "In the end, Mr. P. Chidambaram was party to only two decisions, that is, keeping the spectrum prices at 2001 level and dilution of equity by the two companies. These two acts are not per se criminal. In the absence of any other incriminating act on his part, it cannot be said that he was prima facie party to the criminal conspiracy."
Is it not that the very pricing of spectrum at prices discovered in 2001 declared to be malafide by Supreme Court in its order cancelling 122 licenses? Yet the courts did not find the sufficient ground to proceed against the former finance minister.
Strange facts; stranger judicial logic!
Commenting on the approach of Trai the Supreme Court castigated it for overlooking the decision taken by the "Council of Ministers in 2003 to approve the recommendations of the Group of Ministers the DoT and Ministry of Finance were required to discuss and finalise the spectrum pricing Formula."

It adds that the "entire approach adopted by TRAI was lopsided and contrary to the decision taken by the Council of Ministers and its recommendations became a handle for the then the Minister of C&IT and the officers of the DoT who virtually gifted away the important national asset at throw away prices by willfully ignoring the concerns raised from various quarters including the prime minister, Ministry of Finance and also some of its own officers."
More importantly, the Supreme Court comments that soon after obtaining the licences, some of the beneficiaries off-loaded their stakes to others, in the name of transfer of equity or infusion of fresh capital by foreign companies, and thereby made "huge profits." Surely not an innocent comment!
In the final analysis the Court states: "The exercise undertaken by the officers of the DoT between September, 2007 and March 2008, under the leadership of the then Minister of C&IT was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality."
Is that not the reason that sections of the media has been baying blood for over three years now? Is that not the reason why CAG came out with its report pointing to a gargantuan scam? Is that not the reason why CBI is investigating the matter?

Is that not the reason why Swamy and other have taken the matters to courts? Is that not the reason the courts including the Supreme Court is monitoring the matter? Is it not the reason why Raja is in jail?
Now to the Trial Court and its Order on the former finance minister. It correctly observes that a decision taken by a public servant does not become a criminal for the simple reason that he has caused loss to public exchequer or resulted in pecuniary advantage to others.
But that is a matter of investigation, trial and greater interpretation of law.
That takes us to the clause (d) of sub-section (1) of section 13 of the Prevention of Corruption Act.
Accordingly, a public servant is said to commit the offence of criminal misconduct when he, by "abusing" his position, obtains for himself or for any other person any valuable thing or pecuniary advantage.
Simply put, the moot point here is not how much money is made directly by a public servant, but it is all about allowing someone else to make merry by refusing to intervene - i.e., simply doing nothing.
Does that constitute an abuse?

In the instant case, the question that remains unanswered even to this date is whether the former finance minister committed a criminal misconduct by abusing his position?
Was his reluctance to decisively intervene tantamount to a breach of trust as trustee of national finances? Was dissuading Raja, as explained above, part of a grand design?
Strangely, the Order focuses only on the issue of conspiracy - a grey area in criminal law, especially in white collar crimes.
In the Parliament Attack case, the Supreme Court opined that "conspiracy is mostly proved by circumstantial evidence, usually both the existence of conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused."
Obviously this is a matter of trial, not at pre-trial stage where everyone can have an opinion. But that is irrelevant in the eyes of law.
Again in the Bank Scam case, the Supreme Court dealt with extensively on the issue of Breach of Trust - an issue that will increasingly confront perhaps not only the former finance minister, but the entire Manmohan Singh's cabinet.
Similarly, proving the offence of Criminal Breach of Trust by a public servant is extremely complex.

Again these are matters of hair splitting details. Nevertheless, the terms of the section are very wide. They apply to one who is in any manner entrusted with property or dominion over property.
It merely provides, inter alia, that if such a person dishonestly misappropriates or converts to his own use the property entrusted to him; he commits criminal breach of trust.
Further in Jaikrishnadas Manohardas Desai the SC observed that to establish a charge of criminal breach of trust, the prosecution even during a Trial is not obliged to prove the precise mode of conversion, misappropriation or misapplication by the accused. Remember we are not talking of trial but pre-trial stage.
Therefore the billion dollar question is whether the former finance minister committed a breach of our trust as a trustee of our national finances, not as a co-conspirator, but by being an innocent by-stander to the entire scam?
It is reiterated that white collar crimes are violations of law that involves gross (ab)use of power or breach of trust. Finally one key question remains unanswered - when did the former finance minister comprehend that it was a fraud on exchequer and what did he do once he realised the same? That may well decide the fate of this case in ultimate analysis.

Those who have been following the 2G scam realise that it unfolded at a glacial pace over a six month period beginning September 2007.
Several correspondences were exchanged between the cabinet ministers including Raja and PM including objections from the then law minister H R Bharadwaj.
The short point - everyone knew that the issues involved were contentious. Yet, no one from the Government - including the former finance minister - deemed it fit to intervene. Was it simply because no one smelt anything fishy?
Or was there is a "superior compulsion" for the entire cabinet, more specifically the former finance minister, to be a mute witness to the loot?
Needless to emphasize, all these matters can be considered only during trial, including allegations of malicious suppression and planned omissions.
Simply put, the question posed to the Trial Court was whether there was "prima facie" material to include the former finance minister "as a co-accused."
Given the facts and circumstances of the case, surely, such sweeping conclusions cannot be drawn either way now.
Nevertheless, since the Trial Court in its wisdom has rejected this plea at the threshold, matters shifts to higher courts - possibly Supreme Court - which will have to decide whether the former finance minister was a victim of circumstance or villain of the piece; whether ministers can plead ignorance when one of their colleagues engages in such gargantuan loot and finally whether the prime minister is responsible for the sordid affair in our constitutional scheme of arrangement.
Over to Supreme Court!
The author is a Chennai-based Chartered Accountant. He can be contacted at mrv@mrv.net.in

http://www.rediff.com/business/slide-show/slide-show-1-column-mrv-trial-court-order-clean-chit-or-a-long-rope/20120214.htm