Adarsh Housing Society Scam

The Adarsh Housing Society is a cooperative society in the city of Mumbai in India. The origins of the scam go back to February 2002 when a request was made to the Chief Minister of Maharashtra to allot land in the heart of Mumbai for the construction of a housing complex for “the welfare of serving and retired personnel of the Defence Services.” Over a period of ten years, top politicians, bureaucrats and military officers proceeded to bend several rules and commit various acts of omission and commission in order to have the building constructed and then got themselves allotted flats in this premier property at artificially lowered prices. As the report of the Comptroller and Auditor General of India to the President of India in 2011 put it, “The episode of Adarsh Co-operative Housing Society reveals how a group of select officials, placed in key posts, could subvert rules and regulations in order to grab prime government land- a public property- for personal benefit.” The Central Bureau of Investigation(CBI), the Income Tax Department and the Enforcement Directorate(ED) are in the process of investigating allegations that three former chief ministers, Sushilkumar Shinde, Vilasrao Deshmukh and Ashok Chavan of the state of Maharashtra were also involved in the scam.
In an interview to The Hindu published on 26 March 2012, General VK Singh, the Chief of Army Staff ascribed many of the attempts to malign him during his tenure to, amongst others, those he described as “the Adarsh lobby”, those directly connected to the scam, as well as those who were affected by his efforts to rid the army of corruption.

Alleged violations
The Adarsh society high-rise was constructed in the Colaba locality of Mumbai, which is considered a sensitive coastal area by the Indian Defence forces and houses various Indian Defense establishments. The society is also alleged to have violated the Indian environment ministry rules.
The scam is notable for the fact that it was enacted over a period of ten years and required the active involvement of successive officials in many crucial posts. Rules and regulations across many departments and ministries, both at the Centre and the state of Maharashtra, were flouted or bent to allow for the construction of this edifice. Some of the more blatant transgressions included obtaining a No Objection Certificate from the Army towards construction of the building in a sensitive zone, getting the MMRDA development plan modified and obtaining another NOC for residential development in Coastal Regulation Zone, often through manipulation of records and misrepresentation of facts. Efforts by honest officers to bring this to the notice of top officials were ignored.
The issue was first raised in a newspaper report in 2003 but did not evoke any official reaction. In 2010, it was again raised by various newspapers and TV channels. Questions were raised about the manner in which apartments in the building were allocated to bureaucrats, politicians and army personnel who had nothing to do with the Kargil War and the way in which clearances were obtained for the construction of the building of the Adarsh Society. It had led to the resignation of the then Chief Minister, Ashok Chavan. Some of the current allottees of the flats in the Adarsh co-operative society building have offered to return their flats, denying allegations that they were allotted flats because they influenced or helped, in some manner, the construction of the society by violating the rules.

Current state of investigation
Several inquiries have been ordered by the army and the Government to probe into the irregularities.

There was a spate of petitions filed in Bombay High Court seeking to monitor CBI investigation. The petitions are Criminal PIL No. 20 of 2011 by Pravin Wategaonkar, Criminal Writ Petition No. 3359 of 2010 by Simpreet Singh and Criminal PIL No. 36 of 2010 by Mahendra Singh and others.
Reacting to these petitions and based on the slow pace of the investigation in the last two years, Bombay High Court severely castigated Enforcement Directorate for its failure to initiate any probe in the matter on 28 February 2012. Expressing its unhappiness the court observed, “It is unfortunate that ED has remained a mute spectator. There is a serious lapse on the agency’s part for not probing into money laundering offence. ED has not moved an inch. It reflects a sorry state of affairs. We are summoning the director as there has been no assistance from his department to the court.” The Court also rapped the CBI for the tardiness in its investigations (begun in January 2011). The HC, again on 12 March 2012, severely castigated the CBI for not arresting any of the accused in spite of having evidence and ordered it to take action without fear or favour. ED having registered a case under Prevention of Money Laundering Act, has decided to launch attachment proceedings of the flats after going through the latest chargesheet filed by CBI.

Following the Court’s criticism, the CBI carried out eight arrests including two retired Major Generals TK Kaul and AR Kumar, retired brigadier MM Wanchoo, former General Officer Commanding(GOC) of Maharashtra, Gujarat and Goa, Adarsh promoter Kanhaiyalal Gidwani and Pradeep Vyas, the then city collector and currently, finance secretary(expenditure) in the Govt. of Maharashtra. Accordingly on 22 March 2012, the Chief Minister of Maharashtra, Mr.Prithviraj Chavan announced in the legislative assembly that the two IAS officers whose names have figured in the scam, Pradeep Vyas and Jairaj Phatak have been suspended from government service.
According to newspaper reports, many of the arrested hold more than one flat in the society in fictitious names. Former Congress MLC Kanhaiyalal Gidwani was reported to have as many as ten flats, which he had bought on behalf of top politicians. Gidwani and his son had been earlier arrested on 6 March 2012, by the CBI for trying to influence CBI officials investigating their alleged involvement in the Adarsh scam. In a further twist to the case, the CBI officers arrested their own lawyers, J K Jagiasi and Mandar Goswami. Jagiasi allegedly asked an Air India (AI) official, one of the accused in the case, to pay a bribe of Rs 50 lakh in exchange for diluting charges levelled against him. The petty cash books maintained by Jagiasi helped unearth the conspiracy. In addition, Rs 25 lakh was allegedly paid to Goswami. He was the Special Counsel in the Ministry of Law and Justice and at present is working as Retainer Counsel for CBI. According to CBI sources, the tainted AI official approached the CBI for dilution of the case filed against him.
Jairaj Phatak and Ramanand Tiwari were arrested by the Central Bureau of Investigation on 3 April 2012, for their alleged involvement in receiving illegal gratification in the Adarsh Housing Society Scam.

On 29 May 2012, a special CBI court granted bail to seven of the nine arrested accused in the Adarsh scam since the CBI failed to file a chargesheet within the stipulated 60 days from the time it took them in custody. Those granted bail include Maj Gen (retd) A R Kumar, Maj Gen (retd) T K Kaul, Brig (retd) M M Wanchu, IAS officer and former Mumbaicollector Pradeep Vyas, former Defence Estate officer R C Thakur, IAS officer P V Deshmukh and former Congress member of the Legislative Council Kanhaiyalal Gidwani (the chief promoter of Adarsh). The bail was set at INR5 lakh (US$9,500). They have been directed to attend the CBI office every Tuesday and Thursday between 10 am and 12 pm. The court also told the accused to deposit their passports and not tamper with evidence.

Inquiry by a Judicial Commission
On 9 January 2011, Govt. of Maharashtra appointed a two member Judicial Commission to investigate alleged irregularities and corruption. It was decided that the commission would be led by a retired Bombay High Court judge JA Patil while former State Chief Secretary P Subramanian would be the member. The commission was appointed under theCommissions of Inquiry Act, 1952.
The Commission’s terms of reference were to investigate all aspects, including land ownership and allotment, permissions given to Adarsh. The Commission was given three months’ time to complete the investigation.
On 27 June 2012, while deposing before the two member panel probing the scam, Vilasrao Deshmukh, Union Minister and former Chief Minister of Maharashtra contended that land was allotted to the housing society after getting clearance from the Revenue Department, passing the buck to his successor, Ashok Chavan who headed the department then.


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