To arrest or not to arrest

CBI action last week of arresting a few top IDBI officials, including its former chairman, and some executives of the now defunct Kingfisher Airlines has sent shock waves among industrialists and public sector bank managers.

While there is a school of thought that only such drastic action would deter reckless lending of government money to poorly managed private corporations, there is a strong group of opinion leaders, who had been once or are currently leaders of industry, who look upon the move as harsh and unwarranted.

These distinguished men say they do not question the need to bring to book those who had been remiss in handling public money. They, however, feel that when CBI resorts to collective punitive action there is likely to be injustice to managers who had taken only genuine commercial decisions in the course of their duties. This is particularly so when the arrested officials had not made personal gains while deciding to lend to industrialists who had approached them in need of funds. The debate on the subject can never be conclusive.

Every arrest is a violation of human rights. Such violation can take place only in the public interest, and only under extraordinary circumstances. I must record that the CBI culture has changed over the years. Until the early 1970s, a chargesheet after thorough investigation was the order of the day. Perceptions changed over the years because of galloping public servant corruption and the laxity of some trial courts in ensuring swift trials. A prolonged trial suited dishonest elements. The integrity of some of the lower courts was also subject to doubt. This is why the CBI hierarchy came to believe that a term of pre-trial detention served the ends of justice.

CBI arrests are, therefore, the product of such convoluted thinking. Ironically, courts seldom object to such action. Actually, some judges question a CBI decision not to arrest a single accused. This amounts to judicial excess, and the CBI cannot be blamed for this.

During my tenure as the head of CBI I handled several bank fraud cases. Later I was part of the Bank Frauds Advisory Board chaired by a former RBI deputy governor. This board examined every case where there was a difference of opinion between the CBI and a PSB that had reported a fraud, over what action — criminal or departmental — should be pursued against bank managers at all levels. It even staved off action against a manager who had initiated a genuine commercial action that unfortunately later led to a major loss to the exchequer. Thiswas a salutary arrangement that ensured there was no capricious criminal action against an honest banker.

My conjecture in the IDBI case is that the CBI was forced to arrest the bank officials because the main accused, Vijay Mallya, had to be brought back to India to stand trial. Extradition proceedings are complicated, and the courts will have to be fully convinced of the gravity of the offence.

The CBI’s stand in the IDBI case is that there was a conspiracy to commit fraud against a government bank. If all the participants in the conspiracy are not arrested the UK courts could raise questions that would challenge the fundamentals of the case. If this happens, the case against Mallya could collapse.

The fact that there is no evidence against the IDBI officials now in judicial custody that they had received pecuniary advantage while agreeing to sanction the loan to Kingfisher is cited in various circles as one reason why the CBI should not have arrested them. This is well taken. The point, however, is that the Prevention of Corruption Act hardly makes any distinction between those who gained and those who did not. Under Section 13(1) (d) (iii) it was enough to prove that an individual had acted “without public interest”.

There is one view that even here, the prosecution cannot infer presumption of guilt ; it has to establish mens rea (criminal intention or state of mind) to prove a charge under this section. This section of law has been considered too draconian and there is a clamour for deletion of sub-section 13 (1) (d). Based on a parliamentary committee’s recommendation to that effect, a Bill on the subject is pending approval.

In the ultimate analysis, any anti-corruption drive will have to keep in mind that keeping the balance between the need to probe dishonesty and the imperative of respecting human rights is the quintessence of democracy.

Whether the CBI observed such propriety in the IDBI case will always be debated. If we are convinced that no CBI official had a personal agenda and was only discharging his or her duty, we can rest with confidence.

The writer is a former CBI director