Ray commission உதயம் ஏன்?
கலைஞரை ஊழல்வாதி என முத்திரை குத்திய உத்தமர் எம்ஜியாரின் சாராய ஊழல் பற்றிய முழு விபரங்கள் 👇
https://www.indiatoday.in/magazine/investigation/story/19821015-former-hc-judge-to-head-one-man-commission-to-probe-tamil-nadus-liquor-problem-772287-2013-08-27
Chief Minister M.C. Ramachandran: Faced with a spirit scandal
Next fortnight, in a small room on the ground floor of a building on Greenways Road, Madras, a soft-spoken, bespectacled man will be poring through a large pile of affidavits on Tamil Nadu's latest liquor problem.
K.S. Ramamurthi, a former high court judge, heads a one-man commission which is probing the allotment of licences of 10 arrack blending units, and the selection of wholesale distributors of western style alcoholic beverages described as "Indian made foreign liquor" (IMFL) and arrack.
The liquor trade turnover in Tamil Nadu is over Rs 350 crore, and profits are over Rs 50 crore: what Ramamurthi is trying to find out is whether, in the allotment of these lucrative licences, some member's of the ruling party - the All India Anna Dravida Munnetra Kazhagam (AIADMK) - received money as the by now legendary quid pro quo.
The findings of the one-man commission could make or mar the fortunes of the state's flamboyant Chief Minister, M.G. Ramachandran. Ironically, MGR himself appointed the commission in October 1981 after the press and the Opposition raised a stink about ruling party functionaries making money from liquor contracts - Rs 17.5 crore. to be precise - as reward for getting the Prohibition policy relaxed and then procuring the licences for pre-determined firms and individuals.
The reason for rejecting certain companies and accepting others was curious.
MGR's very vocal critics pointed to the way in which 100-year-old firms, disabled ex-servicemen, and state cooperative societies were rejected in one fell swoop in favour of new and relatively unknown traders from outside and inside the state.
Not only that; where there had been numerous companies to a district there was now just one IMFL distributor to each of the 16 districts: curiously, the state Government had sought to justify the cancellation of earlier licences with the argument that it wanted to curb monopoly operation.
Earlier, Madras city had 10 wholesale distributors for IMFL, long established firms such as Spencer & Co, EID Parry, Phipson & Company and Shaw Wallace & Company. Their total annual sales exceeded Rs 30 crore - at a time when the state was dry. Said a senior executive of a firm whose licence was cancelled: "The high-sounding phrase of curbing monopoly was used to cover up certain behind the door operations."
Important Decisions: The distributors who felt that they had been shunted out to make way for others went to the courts and last fortnight, the Supreme Court handed down a significant judgement. A two-member bench comprising Justices A. Varadarajan and V. Balakrishna Eradi rejected the writ petitions of the distributors but at the same time directed the state Government to invite fresh applications for the grant of liquor licence and also asked the authorities to reconsider "within two weeks from September 15, 1982", their earlier decision to have only one IMFL wholesaler for each district.
The wholesale IMFL distribution licence for Madras was denied to six reputed companies on the flimsiest of reasons. Instead the licence was awarded to a company owned by an Andhra Pradesh liquor king.
The run-up to Ramamurthi's commission began when the state legislature passed the Tamil Nadu Prohibition (Amendment) Act, 1981, which amended the 42-year-old Tamil Nadu Prohibition Act. 1937 - already once suspended by the DMK government in 1971.
Turning the taps on in hithero dry Tamil Nadu would, it was said, bring in an additional Rs 150 crore annually in excise duty, curb the manufacture of illicit liquor and plug revenue loopholes. The amendment also provided for liquor permits to persons of 25 years and above in the state.
The amendment would have been dismissed as one of the many which the legislature processed, but for the subsequent ordinance which amended the amendment barely three weeks later. The ordinance, which came into force in May 1981. introduced a new clause into the amendment - 23A - which cancelled all licences held earlier by firms in the state.
If this was not enough, the ordinance was followed up with another gazette notification introducing,a new rule into the Tamil Nadu Liquor (Licence and Permit) Rules 1980: all existing licences in the state were to expire by July 31, 1981.
It was when fresh licences were issued that the charges - and the fur - began to fly. Specifically, the charges focus on the alleged machinations of Excise Commissioner R. Subramaniam. whose job was to vet all the applications - 130 in all for the IMFL wholesale distribution licences, including 30 for Madras city alone.
The cheque for Rs 3 lakh allegedly signed by Chakrapani (left) and the bank's memorandum (far left) which shows that the cheque bounced
Manickam alleged that his brother S. Sundramurthy, son-in-law Shanmugam and their businessman friend M. Ravindran were promised a licence in return for Rs 10.75 lakh as commission. Manickam has implicated MGR's brother M.G. Chakrapani and his two nephews Sukumaran and Balan in the deal.
Subramaniam is a relatively junior IAS officer who is on extension. He issued a public notification calling for applications and the last date was June 25, 1981. Subramaniam issued the final list on August 29, 1981. It was during this two-month period, critics allege, that money changed hands and everything was worked out to everybody's satisfaction; as proof of this charge they point to the orders issued by the excise commissioner and the arguments advanced by him which are contradictory and smack of arbitrariness.
Indeed, the IAS officer's reasons for rejecting certain companies and accepting others were curious. In Madras, for the IMFL wholesale distribution licence, as many as six reputed companies were rejected for the flimsiest of reasons and the licence went to a company owned by an Andhra Pradesh liquor king. The reasons for which Subramaniam rejected the firms make interesting reading:
Spencer & Co Ltd. "I consider that the privilege of wholesale supply of IMFL in the Madras corporation limits should not also be given to them as it would mean the concentration of business activities in one company alone to the exclusion of others."
Prince and Company. Admitting that the owners had claimed an annual turnover of Rs 3 crore and were committed to investing Rs 75 lakh in the liquor business, Subramaniam wrote that "according to the materials placed before me the applicant firm is solvent to the extent of Rs 9 lakh only. I therefore reject this application on the ground that the applicant is not suitable for the grant of privilege".
Shaw Wallace & Co. As this company has commercial interests in many states like Maharashtra, West Bengal, Karnataka and Uttar Pradesh, Subramaniam wrote that "they are already in this field in many states, hence it is not desirable to create a monopoly in their favour".
Mcdowell & Co. The application was rejected because the financial status was not known. Said Subramaniam: "They claim that they are solvent to the extent of Rs 2 crore but they have not produced either a solvency certificate or any bank guarantee in support of their statement."
Jagatjit Industries Ltd. Subramaniam's note read: "Their application is in order. The firm has produced a solvency certificate for Rs 20 lakh from Canara Bank. New Delhi. The representative of the firm has stated before the taluk excise officer that the firm is in a position to invest Rs 20 lakh in business. This investment will not at all be sufficient for doing wholesale business in bottled liquor for catering to the retailers in the entire city of Madras. I therefore consider the applicant company as not suitable for the grant of privilege."
Mohan Meakin Breweries Ltd. Said Subramaniam: "They have produced a solvency certificate for Rs 3 crore" but "it is not a certificate issued by the revenue authorities." Subramaniam went on: "The financial director who appeared before me for enquiry has stated that the net assets of the company are worth Rs 2.3 crore and they want the wholesale licence' for stocking and selling their own products at competitive rates. But the wholesale depot proposed for Madras city is not for stocking and selling the brand of particular manufacture alone. I reject the application of this company as not suitable for the grant of privilege."
Surprise Choices: The company found "suitable for the grant of privilege" was Krishnaveni Enterprises owned by Andhra Pradesh liquor baron Subbarama Reddy. Subramaniam cited a list of certificates - a Rs 15 lakh cash balance in a city bank, a Rs 50 lakh solvency certificate and a bank guarantee for Rs 75 lakh valid until July 25, 1982 issued by the Bank of Baroda, Nungambakkam branch. Reddy also claimed that he possessed a 3,000 sq ft godown in the city.
The promissory notes in favour of Manickam's relatives for the sum of Rs 10.75 iakh allegedly signed by Chakrapani and his nephew Sukumaran
Subramaniam ignored the fact that Reddy did flourishing business in Andhra Pradesh and therefore could find it difficult to concentrate on his business in Madras. It was later discovered that he did not own the godown when the licence was granted to him. Reddy had reportedly promised the owner that he would sign an agreement with him by August 10, 1981. But Reddy did not get back to the owner by that date, and the premises were rented out to the Immigration Bureau of the Union Home Ministry for Rs 7,800 a month.
Despite this irregularity, Reddy got the licence. His path was cleared when the Tamil Nadu Consumers' Cooperative on August 1, 1981 inexplicably withdrew its application dated June 24, 1981. With a most solvent semi-government body out of the running, Reddy was the "solvent" and "suitable" victor.
The same story of allegedly frivolous decisions was heard elsewhere. Subramaniam rejected 17 of the 18 applications for Coimbatore district. Spencer & Co was rejected here as it had been in Madras, because "they have not furnished any location plan for alternative site" and because - according to order No. BI/15340/81 dated August 14, 1981 - "they have furnished a copy of the company's annual report for several branches of Spencer & Co". This is the strange reason why Subramaniam "could not therefore assess about the suitability of the applicant firm. On these grounds I reject their application."
On the other hand, Subramaniam chose for Coimbatore district an individual named T.M. Yousuff whose application, in legal terms, was not even valid. Dated June 24, the application contained two names - T.M. Yousuff and K. Venkatesh of George Wines - but was signed only by Yousuff. Subramaniam treated the joint application as signed by Yousuff only and granted him the licence without bothering at all about Venkatesh.
Petty Reasons: Said a spokesman of Spencer & Co: "I fail to understand why the excise commissioner condoned such a glaring anomaly while he had rejected other applications on petty grounds." In Yousuffs case, too, the Coimbatore District Central Cooperative Supply and Marketing Society Ltd withdrew its earlier claim to a licence, leaving the field to Yousuff. Concerning the withdrawal, Subramaniam recorded that "after my enquiry the special officer has withdrawn his application".
In Thanjavur district, four out of five applications were rejected. A leading liquor concern of Pondicherry, J&D Company, fell by the wayside because, according to Subramaniam, "I find that J&D Company are already wholesale in liquor trade in another state (Pondicherry) and I do not think it desirable to appoint the firm as wholesaler in this state also." Another applicant rejected by Subramaniam was disabled ex-serviceman T.S. Krishnamoorthy, the managing partner of Sarvana Agencies; the reason was that there was "no reference in record to the registration of the firm".
In Thanjavur, too, a relative outsider was given the licence. A. Usman Ali and Gopala Krishna of McMillan Wines jointly applied for a licence in a letter dated June 24, 1981 - it was signed by Usman Ali. Subramaniam awarded the licence on the grounds that Usman Ali was the owner of Tangavilas Tobacco, a reputed firm of the district. Curiously, though the application had been made in the name of McMillan Wines, the licence was issued only to Usman Ali.
Curious Procedure: Interestingly, when Subramaniam gave his final orders, he said that the state Government had made approaches to him regarding the chosen allottees. No state government official could explain why the excise commissioner had to send the files to the state Government before announcing his decision to the public. Said a DMK MLA: "The commissioner could have sought state government approval after making his decision known to the applicants first so that objections could have been filed."
Excise Minister S.D. Somasundaram, replying to the Opposition in the Assembly on March 10, 1982, said that the state Government had laid down conditions under which the commissioner was bound to submit to the state Government the merits and demerits of various applications and also spell out the reasons for selecting or rejecting a particular application.
But the minister admitted that while the Government could reject the commissioner's recommendations it could not direct him to favour a particular applicant. Asks K. Andazhagan, a DMK legislator: "If the Government cannot interfere with the commissioner's report then why did it ask him to send the report? It was intended to influence his decisions and nothing else."
The allotment of licences for the blending of arrack also provided the Opposition with enough ammunition for their guns. Over 300 applications were received but only 10 received the nod. These units generate huge profits, and the powerful Kerala liquor lobby across the state border sniffed a killing and bid for the licences under benami names.
After the licences had been allotted. the Income Tax Department discovered that the 10 units were benami ones operating in partnership with parties from Kerala. The department carried out raids on all the blending units on February 5, 1982, following complaints that these were filing incorrect returns. The officials discovered some interesting facts:
Ramanujam, Matha Combines Bottlers: "It is seen from the sworn statement recorded under Section 132 (4) on February 5, 1982 from Shri Ramanujam, the registered licencee of this unit that he is only a partner having 2 per cent share... It is clear that registered licencee V. Ramanujam is only a benamidar for a group of influential persons hailing from Kerala.
"Associate Bottlers, Beach Road, Cuddalore: "One M.P. Purushottam of Madras is found to be controlling this unit from Madras and has contributed a capital of Rs 10 lakh for his 13 per cent share. The other partners are some Keralites."
Yercaud Blending and Bottling Unit: "This unit is found to be owned, managed and financed by a group of Keralites and one Sri K.T. Kuruvilla having 30 per cent share is the key figure in this unit."
Sensational Charges: Karunanidhi raised the issue of benami licencees in the last session of the Assembly; a defensive Somasundaram could only say that the "excise commissioner has adhered to all the rules and procedures for issuing licences".
However, an affidavit filed by M.K. Manickam. the state's former inspector general of police, purports to give the lie to the Government's weak protestations. In the seven-page affidavit, Manickam alleged that his brother S. Sundramurthy, son-in-law Shanmugam and their businessman friend M. Ravindran were promised a licence for the wholesale distribution of arrack and IMFL. in return for Rs 10.75 lakh as commission. Manickam has implicated MGR's brother M.G. Chakrapani and his two nephews Sukumaran and Balan in the deal.
According to Manickam, the amount was paid in four instalments on April 3 and 8 and May 2 and 21. When Manickam's relatives did not get the licence, tney asked that the money be returned. Sukumaran gave them a cheque for Rs 3 lakh - No. 056280 drawn on Kanchi Films on August 20.
The cheque bounced. Manickam then approached Chakrapani and MGR and was handed two promissory notes for Rs 10.75 lakh on October 30, 1981, executed by both Chakrapani and Sukumaran. Manickam is likely to produce these notes in the commission's hearing on October 18. No wonder, then, that the issue has developed into one of the biggest threats to MGR's power.
Admitted a senior official of the state Government: "Though MGR is confronted with many inquiry commissions they are not as important as Ramamurthi's. It is more explosive in the sense that a small, irrefutable piece of evidence will prove the Opposition's charge that a lot of money passed hands before a final decision was taken."
In fact, it was immediately after Manickam's sensational charge that DMK and Congress(I) MLA's and MP's showered memorandums on the state governor and the Central Government demanding an independent inquiry into the allotment of licences to individuals and firms whose collective annual profit would be over Rs 50 crore.
Rich Profits: According to the state Excise Department, the 10 arrack blending units make 180 lakh litres a month, using 75 lakh litres of rectified spirit. Cost of production per litre is just Rs 4: it sells for Rs 10 a litre. Hence the profit is about Rs 1.80 crore a month for each of the 10 units.
In addition, the IMFL distributors sell liquor worth over Rs 200 crore annually, on which the usual profit is Rs 40 crore. There are richer pickings in the offing, going by the fact that alcohol consumption in the state has shot up by 106.8 per cent between May 1981 and May 1982; in the same period, soft drinks consumption fell by 45 per cent. In fact, the demand for industrial alcohol shot up 474 per cent in the first five months of the new Prohibition policy.
MGR and his collegues have denied any kickbacks from the deal. Addressing a public meeting in the Periyakulam parliamentary constituency on September 18. MGR said: "After examining the comments received by the state Government, the Central Government has stated that it is satisfied with the explanation and is closing the files."
Retorts Arcot Veerasamy, permanent secretary of the DMK and head of the party's anti-corruption cell: "MGR is not telling the whole truth. How can the Central Government give such an opinion when a commission of inquiry is already on? He wants to influence the commission, but he cannot escape from the noose which is tightening around him."
THE COMMISSION: NEW GROUND
Tamil Nadu is breaking new ground in unexpected directions. It is the only state to have appointed commissions of inquiry to investigate allegations made by opposition parties against its own chief minister, M.G. Ramachandran (MGR). The Ramamurthi Commission, the third to be set up in less than 15 months is to probe allegations of corruption against MGR in granting "privileges and licences" for the manufacture of arrack and the distribution of Indian made foreign liquor (IMFL).
The allegations were made in May last year in the form of more than a dozen memorandums sent by the Dravida Munnetra Kazhagam (DMK), backed by the Congress(I) to the Central Government, alleging large-scale pay-offs in the allotment of liquor licences. A gazette notification dated October 30, 1981 said with surprising candour that the commission was being set up because "allegations have been made both in the press and on the floor of the House that Thiru M.G. Ramachandran, chief minister of Tamil Nadu," or other ministers or public servants had "collected huge amounts as illegal gratification" in connection with liquor licensing.
Set up originally for six months, the commission, whose term was later extended by another six months, was given the following terms of reference:
whether any official, including the chief minister, committed any offence punishable under the Prevention of Corruption Act, 1947 by obtaining illegal gratification;
whether any irregularity, impropriety, misconduct or abuse of power or contravention of the Prohibition law was committed by any official;
whether any irregularity was committed in framing the rules providing for separate licences for wholesale supply and retail supply of arrack, IMFL and fixing the number of wholesalers in the state; and
whether MGR or any other official colluded with the licencees of arrack bottling plants or wholesale suppliers of arrack in fixing huge margins of profit with a view to share the gains.
Affidavits: In its first public notification, dated December 31, 1981,' the commission invited affidavits from the concerned people till February 3, 1982. Since it did not receive more than half a dozen affidavits by then, the date was extended to March 25. By then, the commission had received 20 affidavits, one of which was filed by R.N. Manickam, Tamil Nadu's former inspector general of police, who claimed personal knowledge of a pay-off in the allotment of liquor licences. The other 19 affidavits were in favour of MGR.
Apparently the commission was not satisfied with the number of witnesses, and it again extended the last date for filing affidavits-first to April 23 and again to May 23, 1982. Between these two extensions, over 225 pro-MGR affidavits were received by the commission and the hearings started in August. According to an official of the commission Manickam's affidavit is the only one of the 253 filed affidavits which is against the Government. Even so, not one witness has yet been examined by the commission.
Predictably, the opposition parties have accused the commission of having a pro-MGR bias. Said M. Karunanidhi, DMK president: "There is no justification in holding the inquiries without issuing notices to all those who filed affidavits before it." He also alleges that information about the pro-MGR affidavits was deliberately made public to create a favourable atmosphere for the Government. Also, details about the pro-MGR affidavits were not disclosed to the public for cross-examination. Now, it remains for Ramamurthi to assert his independence when he resumes the sittings on October 18.
கலைஞரை ஊழல்வாதி என முத்திரை குத்திய உத்தமர் எம்ஜியாரின் சாராய ஊழல் பற்றிய முழு விபரங்கள் 👇
https://www.indiatoday.in/magazine/investigation/story/19821015-former-hc-judge-to-head-one-man-commission-to-probe-tamil-nadus-liquor-problem-772287-2013-08-27
Chief Minister M.C. Ramachandran: Faced with a spirit scandal
Next fortnight, in a small room on the ground floor of a building on Greenways Road, Madras, a soft-spoken, bespectacled man will be poring through a large pile of affidavits on Tamil Nadu's latest liquor problem.
K.S. Ramamurthi, a former high court judge, heads a one-man commission which is probing the allotment of licences of 10 arrack blending units, and the selection of wholesale distributors of western style alcoholic beverages described as "Indian made foreign liquor" (IMFL) and arrack.
The liquor trade turnover in Tamil Nadu is over Rs 350 crore, and profits are over Rs 50 crore: what Ramamurthi is trying to find out is whether, in the allotment of these lucrative licences, some member's of the ruling party - the All India Anna Dravida Munnetra Kazhagam (AIADMK) - received money as the by now legendary quid pro quo.
The findings of the one-man commission could make or mar the fortunes of the state's flamboyant Chief Minister, M.G. Ramachandran. Ironically, MGR himself appointed the commission in October 1981 after the press and the Opposition raised a stink about ruling party functionaries making money from liquor contracts - Rs 17.5 crore. to be precise - as reward for getting the Prohibition policy relaxed and then procuring the licences for pre-determined firms and individuals.
The reason for rejecting certain companies and accepting others was curious.
MGR's very vocal critics pointed to the way in which 100-year-old firms, disabled ex-servicemen, and state cooperative societies were rejected in one fell swoop in favour of new and relatively unknown traders from outside and inside the state.
Not only that; where there had been numerous companies to a district there was now just one IMFL distributor to each of the 16 districts: curiously, the state Government had sought to justify the cancellation of earlier licences with the argument that it wanted to curb monopoly operation.
Earlier, Madras city had 10 wholesale distributors for IMFL, long established firms such as Spencer & Co, EID Parry, Phipson & Company and Shaw Wallace & Company. Their total annual sales exceeded Rs 30 crore - at a time when the state was dry. Said a senior executive of a firm whose licence was cancelled: "The high-sounding phrase of curbing monopoly was used to cover up certain behind the door operations."
Important Decisions: The distributors who felt that they had been shunted out to make way for others went to the courts and last fortnight, the Supreme Court handed down a significant judgement. A two-member bench comprising Justices A. Varadarajan and V. Balakrishna Eradi rejected the writ petitions of the distributors but at the same time directed the state Government to invite fresh applications for the grant of liquor licence and also asked the authorities to reconsider "within two weeks from September 15, 1982", their earlier decision to have only one IMFL wholesaler for each district.
The wholesale IMFL distribution licence for Madras was denied to six reputed companies on the flimsiest of reasons. Instead the licence was awarded to a company owned by an Andhra Pradesh liquor king.
The run-up to Ramamurthi's commission began when the state legislature passed the Tamil Nadu Prohibition (Amendment) Act, 1981, which amended the 42-year-old Tamil Nadu Prohibition Act. 1937 - already once suspended by the DMK government in 1971.
Turning the taps on in hithero dry Tamil Nadu would, it was said, bring in an additional Rs 150 crore annually in excise duty, curb the manufacture of illicit liquor and plug revenue loopholes. The amendment also provided for liquor permits to persons of 25 years and above in the state.
The amendment would have been dismissed as one of the many which the legislature processed, but for the subsequent ordinance which amended the amendment barely three weeks later. The ordinance, which came into force in May 1981. introduced a new clause into the amendment - 23A - which cancelled all licences held earlier by firms in the state.
If this was not enough, the ordinance was followed up with another gazette notification introducing,a new rule into the Tamil Nadu Liquor (Licence and Permit) Rules 1980: all existing licences in the state were to expire by July 31, 1981.
It was when fresh licences were issued that the charges - and the fur - began to fly. Specifically, the charges focus on the alleged machinations of Excise Commissioner R. Subramaniam. whose job was to vet all the applications - 130 in all for the IMFL wholesale distribution licences, including 30 for Madras city alone.
The cheque for Rs 3 lakh allegedly signed by Chakrapani (left) and the bank's memorandum (far left) which shows that the cheque bounced
Manickam alleged that his brother S. Sundramurthy, son-in-law Shanmugam and their businessman friend M. Ravindran were promised a licence in return for Rs 10.75 lakh as commission. Manickam has implicated MGR's brother M.G. Chakrapani and his two nephews Sukumaran and Balan in the deal.
Subramaniam is a relatively junior IAS officer who is on extension. He issued a public notification calling for applications and the last date was June 25, 1981. Subramaniam issued the final list on August 29, 1981. It was during this two-month period, critics allege, that money changed hands and everything was worked out to everybody's satisfaction; as proof of this charge they point to the orders issued by the excise commissioner and the arguments advanced by him which are contradictory and smack of arbitrariness.
Indeed, the IAS officer's reasons for rejecting certain companies and accepting others were curious. In Madras, for the IMFL wholesale distribution licence, as many as six reputed companies were rejected for the flimsiest of reasons and the licence went to a company owned by an Andhra Pradesh liquor king. The reasons for which Subramaniam rejected the firms make interesting reading:
Spencer & Co Ltd. "I consider that the privilege of wholesale supply of IMFL in the Madras corporation limits should not also be given to them as it would mean the concentration of business activities in one company alone to the exclusion of others."
Prince and Company. Admitting that the owners had claimed an annual turnover of Rs 3 crore and were committed to investing Rs 75 lakh in the liquor business, Subramaniam wrote that "according to the materials placed before me the applicant firm is solvent to the extent of Rs 9 lakh only. I therefore reject this application on the ground that the applicant is not suitable for the grant of privilege".
Shaw Wallace & Co. As this company has commercial interests in many states like Maharashtra, West Bengal, Karnataka and Uttar Pradesh, Subramaniam wrote that "they are already in this field in many states, hence it is not desirable to create a monopoly in their favour".
Mcdowell & Co. The application was rejected because the financial status was not known. Said Subramaniam: "They claim that they are solvent to the extent of Rs 2 crore but they have not produced either a solvency certificate or any bank guarantee in support of their statement."
Jagatjit Industries Ltd. Subramaniam's note read: "Their application is in order. The firm has produced a solvency certificate for Rs 20 lakh from Canara Bank. New Delhi. The representative of the firm has stated before the taluk excise officer that the firm is in a position to invest Rs 20 lakh in business. This investment will not at all be sufficient for doing wholesale business in bottled liquor for catering to the retailers in the entire city of Madras. I therefore consider the applicant company as not suitable for the grant of privilege."
Mohan Meakin Breweries Ltd. Said Subramaniam: "They have produced a solvency certificate for Rs 3 crore" but "it is not a certificate issued by the revenue authorities." Subramaniam went on: "The financial director who appeared before me for enquiry has stated that the net assets of the company are worth Rs 2.3 crore and they want the wholesale licence' for stocking and selling their own products at competitive rates. But the wholesale depot proposed for Madras city is not for stocking and selling the brand of particular manufacture alone. I reject the application of this company as not suitable for the grant of privilege."
Surprise Choices: The company found "suitable for the grant of privilege" was Krishnaveni Enterprises owned by Andhra Pradesh liquor baron Subbarama Reddy. Subramaniam cited a list of certificates - a Rs 15 lakh cash balance in a city bank, a Rs 50 lakh solvency certificate and a bank guarantee for Rs 75 lakh valid until July 25, 1982 issued by the Bank of Baroda, Nungambakkam branch. Reddy also claimed that he possessed a 3,000 sq ft godown in the city.
The promissory notes in favour of Manickam's relatives for the sum of Rs 10.75 iakh allegedly signed by Chakrapani and his nephew Sukumaran
Subramaniam ignored the fact that Reddy did flourishing business in Andhra Pradesh and therefore could find it difficult to concentrate on his business in Madras. It was later discovered that he did not own the godown when the licence was granted to him. Reddy had reportedly promised the owner that he would sign an agreement with him by August 10, 1981. But Reddy did not get back to the owner by that date, and the premises were rented out to the Immigration Bureau of the Union Home Ministry for Rs 7,800 a month.
Despite this irregularity, Reddy got the licence. His path was cleared when the Tamil Nadu Consumers' Cooperative on August 1, 1981 inexplicably withdrew its application dated June 24, 1981. With a most solvent semi-government body out of the running, Reddy was the "solvent" and "suitable" victor.
The same story of allegedly frivolous decisions was heard elsewhere. Subramaniam rejected 17 of the 18 applications for Coimbatore district. Spencer & Co was rejected here as it had been in Madras, because "they have not furnished any location plan for alternative site" and because - according to order No. BI/15340/81 dated August 14, 1981 - "they have furnished a copy of the company's annual report for several branches of Spencer & Co". This is the strange reason why Subramaniam "could not therefore assess about the suitability of the applicant firm. On these grounds I reject their application."
On the other hand, Subramaniam chose for Coimbatore district an individual named T.M. Yousuff whose application, in legal terms, was not even valid. Dated June 24, the application contained two names - T.M. Yousuff and K. Venkatesh of George Wines - but was signed only by Yousuff. Subramaniam treated the joint application as signed by Yousuff only and granted him the licence without bothering at all about Venkatesh.
Petty Reasons: Said a spokesman of Spencer & Co: "I fail to understand why the excise commissioner condoned such a glaring anomaly while he had rejected other applications on petty grounds." In Yousuffs case, too, the Coimbatore District Central Cooperative Supply and Marketing Society Ltd withdrew its earlier claim to a licence, leaving the field to Yousuff. Concerning the withdrawal, Subramaniam recorded that "after my enquiry the special officer has withdrawn his application".
In Thanjavur district, four out of five applications were rejected. A leading liquor concern of Pondicherry, J&D Company, fell by the wayside because, according to Subramaniam, "I find that J&D Company are already wholesale in liquor trade in another state (Pondicherry) and I do not think it desirable to appoint the firm as wholesaler in this state also." Another applicant rejected by Subramaniam was disabled ex-serviceman T.S. Krishnamoorthy, the managing partner of Sarvana Agencies; the reason was that there was "no reference in record to the registration of the firm".
In Thanjavur, too, a relative outsider was given the licence. A. Usman Ali and Gopala Krishna of McMillan Wines jointly applied for a licence in a letter dated June 24, 1981 - it was signed by Usman Ali. Subramaniam awarded the licence on the grounds that Usman Ali was the owner of Tangavilas Tobacco, a reputed firm of the district. Curiously, though the application had been made in the name of McMillan Wines, the licence was issued only to Usman Ali.
Curious Procedure: Interestingly, when Subramaniam gave his final orders, he said that the state Government had made approaches to him regarding the chosen allottees. No state government official could explain why the excise commissioner had to send the files to the state Government before announcing his decision to the public. Said a DMK MLA: "The commissioner could have sought state government approval after making his decision known to the applicants first so that objections could have been filed."
Excise Minister S.D. Somasundaram, replying to the Opposition in the Assembly on March 10, 1982, said that the state Government had laid down conditions under which the commissioner was bound to submit to the state Government the merits and demerits of various applications and also spell out the reasons for selecting or rejecting a particular application.
But the minister admitted that while the Government could reject the commissioner's recommendations it could not direct him to favour a particular applicant. Asks K. Andazhagan, a DMK legislator: "If the Government cannot interfere with the commissioner's report then why did it ask him to send the report? It was intended to influence his decisions and nothing else."
The allotment of licences for the blending of arrack also provided the Opposition with enough ammunition for their guns. Over 300 applications were received but only 10 received the nod. These units generate huge profits, and the powerful Kerala liquor lobby across the state border sniffed a killing and bid for the licences under benami names.
After the licences had been allotted. the Income Tax Department discovered that the 10 units were benami ones operating in partnership with parties from Kerala. The department carried out raids on all the blending units on February 5, 1982, following complaints that these were filing incorrect returns. The officials discovered some interesting facts:
Ramanujam, Matha Combines Bottlers: "It is seen from the sworn statement recorded under Section 132 (4) on February 5, 1982 from Shri Ramanujam, the registered licencee of this unit that he is only a partner having 2 per cent share... It is clear that registered licencee V. Ramanujam is only a benamidar for a group of influential persons hailing from Kerala.
"Associate Bottlers, Beach Road, Cuddalore: "One M.P. Purushottam of Madras is found to be controlling this unit from Madras and has contributed a capital of Rs 10 lakh for his 13 per cent share. The other partners are some Keralites."
Yercaud Blending and Bottling Unit: "This unit is found to be owned, managed and financed by a group of Keralites and one Sri K.T. Kuruvilla having 30 per cent share is the key figure in this unit."
Sensational Charges: Karunanidhi raised the issue of benami licencees in the last session of the Assembly; a defensive Somasundaram could only say that the "excise commissioner has adhered to all the rules and procedures for issuing licences".
However, an affidavit filed by M.K. Manickam. the state's former inspector general of police, purports to give the lie to the Government's weak protestations. In the seven-page affidavit, Manickam alleged that his brother S. Sundramurthy, son-in-law Shanmugam and their businessman friend M. Ravindran were promised a licence for the wholesale distribution of arrack and IMFL. in return for Rs 10.75 lakh as commission. Manickam has implicated MGR's brother M.G. Chakrapani and his two nephews Sukumaran and Balan in the deal.
According to Manickam, the amount was paid in four instalments on April 3 and 8 and May 2 and 21. When Manickam's relatives did not get the licence, tney asked that the money be returned. Sukumaran gave them a cheque for Rs 3 lakh - No. 056280 drawn on Kanchi Films on August 20.
The cheque bounced. Manickam then approached Chakrapani and MGR and was handed two promissory notes for Rs 10.75 lakh on October 30, 1981, executed by both Chakrapani and Sukumaran. Manickam is likely to produce these notes in the commission's hearing on October 18. No wonder, then, that the issue has developed into one of the biggest threats to MGR's power.
Admitted a senior official of the state Government: "Though MGR is confronted with many inquiry commissions they are not as important as Ramamurthi's. It is more explosive in the sense that a small, irrefutable piece of evidence will prove the Opposition's charge that a lot of money passed hands before a final decision was taken."
In fact, it was immediately after Manickam's sensational charge that DMK and Congress(I) MLA's and MP's showered memorandums on the state governor and the Central Government demanding an independent inquiry into the allotment of licences to individuals and firms whose collective annual profit would be over Rs 50 crore.
Rich Profits: According to the state Excise Department, the 10 arrack blending units make 180 lakh litres a month, using 75 lakh litres of rectified spirit. Cost of production per litre is just Rs 4: it sells for Rs 10 a litre. Hence the profit is about Rs 1.80 crore a month for each of the 10 units.
In addition, the IMFL distributors sell liquor worth over Rs 200 crore annually, on which the usual profit is Rs 40 crore. There are richer pickings in the offing, going by the fact that alcohol consumption in the state has shot up by 106.8 per cent between May 1981 and May 1982; in the same period, soft drinks consumption fell by 45 per cent. In fact, the demand for industrial alcohol shot up 474 per cent in the first five months of the new Prohibition policy.
MGR and his collegues have denied any kickbacks from the deal. Addressing a public meeting in the Periyakulam parliamentary constituency on September 18. MGR said: "After examining the comments received by the state Government, the Central Government has stated that it is satisfied with the explanation and is closing the files."
Retorts Arcot Veerasamy, permanent secretary of the DMK and head of the party's anti-corruption cell: "MGR is not telling the whole truth. How can the Central Government give such an opinion when a commission of inquiry is already on? He wants to influence the commission, but he cannot escape from the noose which is tightening around him."
THE COMMISSION: NEW GROUND
Tamil Nadu is breaking new ground in unexpected directions. It is the only state to have appointed commissions of inquiry to investigate allegations made by opposition parties against its own chief minister, M.G. Ramachandran (MGR). The Ramamurthi Commission, the third to be set up in less than 15 months is to probe allegations of corruption against MGR in granting "privileges and licences" for the manufacture of arrack and the distribution of Indian made foreign liquor (IMFL).
The allegations were made in May last year in the form of more than a dozen memorandums sent by the Dravida Munnetra Kazhagam (DMK), backed by the Congress(I) to the Central Government, alleging large-scale pay-offs in the allotment of liquor licences. A gazette notification dated October 30, 1981 said with surprising candour that the commission was being set up because "allegations have been made both in the press and on the floor of the House that Thiru M.G. Ramachandran, chief minister of Tamil Nadu," or other ministers or public servants had "collected huge amounts as illegal gratification" in connection with liquor licensing.
Set up originally for six months, the commission, whose term was later extended by another six months, was given the following terms of reference:
whether any official, including the chief minister, committed any offence punishable under the Prevention of Corruption Act, 1947 by obtaining illegal gratification;
whether any irregularity, impropriety, misconduct or abuse of power or contravention of the Prohibition law was committed by any official;
whether any irregularity was committed in framing the rules providing for separate licences for wholesale supply and retail supply of arrack, IMFL and fixing the number of wholesalers in the state; and
whether MGR or any other official colluded with the licencees of arrack bottling plants or wholesale suppliers of arrack in fixing huge margins of profit with a view to share the gains.
Affidavits: In its first public notification, dated December 31, 1981,' the commission invited affidavits from the concerned people till February 3, 1982. Since it did not receive more than half a dozen affidavits by then, the date was extended to March 25. By then, the commission had received 20 affidavits, one of which was filed by R.N. Manickam, Tamil Nadu's former inspector general of police, who claimed personal knowledge of a pay-off in the allotment of liquor licences. The other 19 affidavits were in favour of MGR.
Apparently the commission was not satisfied with the number of witnesses, and it again extended the last date for filing affidavits-first to April 23 and again to May 23, 1982. Between these two extensions, over 225 pro-MGR affidavits were received by the commission and the hearings started in August. According to an official of the commission Manickam's affidavit is the only one of the 253 filed affidavits which is against the Government. Even so, not one witness has yet been examined by the commission.
Predictably, the opposition parties have accused the commission of having a pro-MGR bias. Said M. Karunanidhi, DMK president: "There is no justification in holding the inquiries without issuing notices to all those who filed affidavits before it." He also alleges that information about the pro-MGR affidavits was deliberately made public to create a favourable atmosphere for the Government. Also, details about the pro-MGR affidavits were not disclosed to the public for cross-examination. Now, it remains for Ramamurthi to assert his independence when he resumes the sittings on October 18.
நல்ல நாடகம். ராமமூர்த்தி கமிஷன் நல்லா கமிஷன் வாங்கி கொண்டு விசாரணையை திசை திருப்பி இருக்கிறது.
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