State Scan

From tainted to trusted

SR Mohanty, the multi-crore scam accused, has wriggled his way into the good books of the MP Chief Minister and is in the race for the Chief Secretary’s post

by RAKESH DIXIT

TEN years ago, 1982-batch Indian Administrative Service (IAS) officer Sudhi Ranjan Mohanty was facing prospects of being sent to jail. Now the Additional Chief Secretary is fervently coveting the state Chief Secretary’s post. Mohanty, 56, is an accused in the multi-crore inter-corporate deposit (ICD) scam that rocked the Digvijay Singh government in 2003.

Few, if any, officers in the annals of IAS history have wrought such a stupendous turnaround in their career. Mainly two factors made the scam-tainted Mohanty’s gradual transformation from a pariah in the BJP government to one of the most trusted officers of the Chief Minister possible: one, his sheer administrative competence; and two, Chief Minister Shivraj Singh Chouhan’s unmistakable preference for ‘go-getters’ over honest bureaucrats. In choosing ‘go-getters’, the Chief Minister doesn’t seem to mind their dubious antecedents. All he sees in them is how useful they are in his scheme of things. Little wonder, then, that a majority of Chouhan’s trusted officers are the ones who were his predecessor, Digvijay Singh’s blue-eyed boys too. Mohanty’s ‘redemption’ is the most glaring example of the Chief Minister’s team selection criteria.

Soon after he assumed charge as Madhya Pradesh Chief Minister in November 2005, Chouhan had publicly averred that his government would vigorously pursue a probe into the ICD scam and that the accused would not be spared. Ten years down the line, the same Chief Minister is continuing to dither on giving permission to the State Bureau of Investigation for Economic Offences (SBIEO) to put up a chargesheet against Mohanty and others. That the Chief Minister is keen to save Mohanty was evident in the manner in which the state government pleaded with the Madhya Pradesh High Court to dismiss the public interest litigation (PIL) seeking expeditious trial of the ICD scam accused. The government, in its reply on March 17, said, “the question of investigation against the senior IAS officer (SR Mohanty) and not promoting him, as raised in the PIL, is purely an administrative and service matter. It is not a matter of wider public interest and, therefore, the petition be dismissed.”

Although the government told the court that it was considering the report that found the IAS officer guilty in the scam, nobody in the bureaucracy is willing to buy this assurance. For, it is almost five years since the Supreme Court asked the SBIEO to probe the ICD scam afresh and file a chargesheet within 90 days. The agency officers say they are ready with the chargesheet and awaiting the government nod for Mohanty’s prosecution. The government, however, seems in no mood to oblige the economic offences investigation wing.

The State government’s refusal to give the nod for prosecution of the ICD scam accused, coupled with its spirited defence of the tainted IAS officer in the High Court, has fuelled speculation that the Chief Minister may have made up his mind to promote the Additional Chief Secretary to the Chief Secretary’s post. Incumbent Chief Secretary Antony de Sa is due to retire in October this year. Over half-a-dozen IAS officers are in the reckoning as de Sa’s successor. They include Mohanty, Additional Chief Secretary, BK Singh, Additional Chief Secretary, Aruna Sharma, Secretary, Electronics and IT Ministry, JS Mathur, Additional Secretary in the information and broadcasting ministry, Raghav Chandra, chairman of the National Highways Authority of India; and Iqbal Singh Bains, Principal Secretary in the Chief Minister’s office.

Bureaucratic circles are particularly keen on two officers who are considered
each other’s archrival—SR Mohanty and Raghav Chandra. It was Chandra
who queered the pitch for Mohanty, his predecessor, as managing director of the
MP State Industrial Development Corporation

Three factors brighten Mohanty’s chances for the top job. One, his administrative competence; two, he could remain in the Chief Secretary’s post till 2020; and three, he is ever willing to manipulate administrative machinery at the behest of his political master. He has amply demonstrated the last quality in the service of Digvijay Singh in the 1998 Assembly election. So, Chouhan too might be inclined to leverage Mohanty’s skills in the forthcoming election due in 2018 for the ruling party’s benefit.

DESPITE the ICD scam, the Congress is unlikely to oppose Mohanty’s elevation because the party’s stand has been that he was falsely implicated in the ICD scam. As far as opposition within the BJP is concerned, the Chief Minister has already tamed his detractors within the party effectively.

Bureaucratic circles are particularly keen on two officers who are considered each other’s archrival—Mohanty and Chandra. It was Chandra who queered the pitch for his predecessor as managing director of the MP State Industrial Development Corporation after the BJP stormed to power in December 2003 under Uma Bharti’s leadership.

In the run-up to the 2003 Assembly election, the ICD scam was one of the major poll issues. The MPSIDC had launched the ICD scheme in 1998 to disburse loans to industrialists. Mohammad Pasha Rajan was the managing director of the corporation. Two years later, Mohanty succeeded Rajan, who took voluntary retirement from the IAS amid serious allegations of corruption. Loans worth Rs. 714 crore were advanced to companies and individuals, most with dubious credentials, under the scheme. The amount, including interest, now due from the defaulters has risen close to Rs. 2,200 crore. The corporation went to the extent of raising crores through bonds, which were bought by Mumbai-based co-operative banks, IDBI, Bank of Punjab and Syndicate Bank, among others. The Rs. 714 crore thus raised was disbursed to select industrialists—the list reads like the virtual who’s—who of Madhya Pradesh—on mere promissory notes. Under the Article of Association of the Company, the government’s permission is necessary for any disbursal of loan over Rs. 3 crore. It was violated in almost all the cases. Being a blue-eyed boy of the then Chief Minister, Digvijay Singh, Mohanty was sitting pretty as MPSIDC managing director. He allegedly speeded up the process of loan disbursal to friendly industrialists without compunction.

MOHANTY’S troubles began with the BJP routing the Congress in the 2003 elections and Uma Bharti succeeding Singh as Chief Minister. Bharti replaced Mohanty with Chandra as MPSIDC managing director in 2004. Chandra blew the lid off the scam. On his report, Bharti ordered a probe by the SBIEO. It was in 2005 that the SBIEO filed an FIR against 84 persons, including Mohanty. Two other prominent accused in the case are Rajendra Kumar Singh and Narendra Nahata. Both were chairmen of MPSIDC and successive commerce and industry ministers in Singh’s government.

In the face of the Supreme Court order for prosecution of the ICD scam accused
and DOPT’s insistence on following the apex court order, the Chief Minister is
left with only one option to save his trusted officer—to indefinitely delay
permission to the SIB to file the chargesheet in the case

The SBIEO probe upset Mohanty. Bharti’s keen interest in the probe convinced him that his goose was cooked. To flee the hostile atmosphere in Madhya Pradesh, Mohanty applied for deputation to the Centre. Since the UPA government was at the Centre, Mohanty was confident that his proximity to Singh would bail him out. But the probe in the ICD scam was a major hurdle in his plan.

Mohanty moved the MP High Court, praying for an order directing the General Administration Department (GAD) to give him vigilance clearance in its communication to the Government of India. The GAD filed an affidavit in 2006 not only giving a clean chit to Mohanty, but also emphasising that his action caused no loss to the state government. The affidavit had been filed without the knowledge of Chouhan, who was heading the GAD.

When Chouhan came to know of it, he removed the then Chief Secretary, Vijay Singh, the then Principal Secretary and Deputy Secretary to GAD, Abha Asthana and Suresh Daphne, respectively, from their posts. An angry Vijay Singh immediately sought deputation to the Centre from where he retired as Defence Secretary.

The High Court ruled in Mohanty’s favour but the state government filed a Special Leave Petition (SLP) in the Supreme Court, saying the bureaucrats were not authorised to file the affidavit, and hence there was no question of giving a clean chit to Mohanty. Four years later, the Supreme Court upheld the state government’s stand and asked the economic offences wing to start a probe into the scam afresh.

When the affidavit fiasco happened, Chouhan was bubbling with idealism. Or so he showed. He vowed repeatedly to root out corruption in the state. He also warned that the ICD scam accused would not be spared. As proof of his commitment, he put Mohanty in an insignificant post—as managing director of the MP Leather Development Corporation. For three years, the officer remained in the bureaucratic doghouse before being appointed Secretary, Bhopal Gas Relief and Rehabilitation and Health departments.

As the sword of the SBIEO probe dangled over him, Mohanty decided to work his way into the Chief Minister’s good books. Even his bitterest critics admit, though grudgingly, that Mohanty is a competent officer. For this alumnus of the Indian Institute of Management (IIM), Ahmedabad, his acquired management skills stood him in good stead. But the ICD scam was too high-profile a case for the Chief Minister to simply brush it under the carpet. The state government issued him a chargesheet and after finding Mohanty’s explanation unsatisfactory, instituted a disciplinary inquiry against him. At the same time, the state government sent his file relating to sanction of prosecution to the Government of India on June 28, 2011.

THE same state government, however, promoted him to Principal Secretary a year later and posted him in the Non-Conventional Energy Department.

The disciplinary inquiry against him is still on and the criminal case is still pending for sanction of prosecution. Yet, Mohanty got another promotion as Additional Chief Secretary.

The second paragraph of his “conditional promotion” order reads: “This promotion is subject to the final outcome of the petition filed in the Central Administrative Tribunal by Mohanty against issuing him a chargesheet and institution of disciplinary inquiry.”

Having promoted Mohanty, the state government sent a proposal to the Government of India to exonerate him in the ICD case. But the Government of India returned the proposal. The Department of Personnel and Training (DoPT) remarked that the state government had failed to convince the Government of India that it had followed the orders of the Supreme Court regarding such cases.

In the face of the Supreme Court order for prosecution of the ICD scam accused and DoPT’s insistence on following the apex court order, the Chief Minister is left with only one option to save his trusted officer—to indefinitely delay permission to the SIB to file the charge sheet in the case. And that is precisely what he is doing. Chouhan has selectively forgotten all his promises of ensuring strict action against the accused who incurred losses to the tune of several crores of rupees to the state exchequer.

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