Saddened by BJP Choosing Yeddyurappa as Karnataka CM Candidate: Ex-Lokayukta

Justice Hegde says as a chief minister, Yeddyurappa had the mining portfolio with him and received Rs 10 crore as donation which, per se, shows that money was paid not as a donation but for considerations for showing favours in the mining application. Credit: PTI Files

Former Lokayukta (or people’s ombudsman) of Karnataka, N. Santosh Hegde, who had prepared a voluminous report on illegal iron ore mining in the state in July 2011 that had severely indicted former chief minister B.S. Yeddyurappa, is “saddened” that the Bharatiya Janata Party (BJP) has nominated him as its chief ministerial candidate in the upcoming assembly elections.

A former judge of the Supreme Court, Justice Hegde, whose father and he has had close links with the BJP, said he and his officers in the Lokayukta had found “foolproof” and clinching evidence against Yeddyurappa and his sons receiving “bribes” from mining companies and granting them illegal favours.

He expressed his unhappiness that the state government and other law-enforcing agencies had not diligently pursued the cases against the former chief minister and his family members and rued the way in which the faith of ordinary people in the criminal justice system had been eroded.

PGT: Hello and welcome to this special programme for. Justice N. Santosh Hegde, former judge of the Supreme Court and a former Lokayukta or “people’s ombudsman” of Karnataka. Justice Hegde, you submitted your final report on the iron ore mining scandal in Bellary on July 26, 2011, a few days before you retired. After that, the then chief minister, B.S. Yeddyurappa, had to resign. Soon thereafter, on July 31, and in October that year, he became perhaps the first serving CM to be put behind bars. He was behind bars for 23 days. Now, the same Yeddyurappa is the BJP’s chief ministerial candidate in the assembly elections in May. How do you react to this?

NSH: I feel very sad because I thought there was a foolproof case against him and I didn’t expect what happened in the trial court in the first instance. I’m not very sure whether they have filed an appeal against that order or not. We had enough proof that he received Rs 19-20 crore from a company called South West Mining Company which had absolutely no capital. It received (the money) one day, Rs 20 crore starting from the account of Jindal Steel Toranagallu, Bellary, which moved into three or four benami accounts… and landed in the account of South West Mining Company. Out of that Rs 20 crore, Rs 10 crore by cheque was purportedly donated to an education trust in a neighbouring district called Shimoga, which is wholly owned by Yeddyurappa and family. For a public servant to receive such a huge gift, according to me, is contrary to law, the disciplinary rules as well as the fact that the file was then pending with Yeddyurappa. As a chief minister he had the mining portfolio with him and received Rs 10 crore as donation which, according to me, per se shows that money was paid not as a donation but for considerations for showing favours in the mining application. Of course, the mining application was not granted thereafter because that matter was being investigated by me.

When you were the Lokayukta, you had pointed out how Yeddyurappa’s two sons, Raghavendra and Vijendra, had received about Rs 10 crore which was donated to an educational trust run by his family. It was also found out that this same company, JSW, which is headed by Sajjan Jindal, spent Rs 20 crore to purchase the land, which you talked about.

No, no. (The) land I need to talk about… this is a different transaction altogether. There is a place called Rachenahalli near Bangalore, Whitefield, where seven acres of land was acquired by the Karnataka government some years earlier and compensation was paid. The possession (of the land) was taken and the revenue records showed the land as belonging to the government, but it was not utilised. Yeddyurappa as chief minister denotified the seven acres which, according to me, is contrary to the Supreme Court’s judgment, as also the law. Out of those seven acres, there was (some land) purchased by a minister in his cabinet, Krishnaiah Shetty. He purposely sold one acre by a registered sale (deed) for a consideration of nearly Rs 40 lakh or so to Yeddyurappa’s son-in-law and (his) two sons. The very land that they purchased for about Rs 40 lakh was immediately thereafter purchased by Southwest Mining Company for a consideration of another Rs 10 crore. I mean, (the land) value cannot just go up like that. Obviously this a transaction, in my opinion, which of course is not accepted by the court, is a consideration for something else, other than the real market value (of the land), but it is a consideration for Yeddyurappa to pass a favourable order in the mining application that was pending before him.

You know the circumstances under which Yeddyurappa was acquitted in October 2016. The Central Bureau of Investigation took its own time in appealing. It took eight months. Finally, what we found is that the judge who had acquitted him, even the anti-corruption bureau of the Karnataka government, recommended that an investigation be launched against him way back in September 2017….How did, what you described as a ‘foolproof’ case of corruption against Yeddyurappa and his sons, play out in different courts of law? And he was given a virtual clean chit?

Well, it’s rather difficult to comment on the judgment of a court by making an accusation of corruption or something, but I can only say that I cannot accept this judgment because the money (was) received by Yeddyurappa by way of a cheque. So.. there is no dispute that he received that money and also there’s no dispute that there was an application pending for grant of mining license before the chief minister, who was also the minister for mining ,which by itself proves that the money has not gone as a consideration for the purchase of one acre of land or for (a) donation to his family education trust. Obviously, it is clear to my mind that this was an illegal gratification given by the South West Mining Company to get a mining license. I look at it from that point of view. I have not read the judgment of the trial court but I just can’t reconcile myself to the fact that these two transactions have had judicial acceptance.

I go back to the question I asked you earlier. Today the BJP under Narendra Modi is in power in Delhi. We all know you are the son of Justice K.S Hegde, a former Supreme Court judge like you, who had been superseded in 1993..


Sorry, I beg your pardon, 1973…by Justice A.N Ray after the Kesavananda Bharati case. This well-known case was about how much Parliament could change the basic structure of the Constitution. Your father was the Lok Sabha Speaker, and one of the founding members of the BJP. I’ll recall another incident. On June 23, 2010, you were so unhappy when the Karnataka government transferred an officer of the forest department (R Gokul), rather suspended him, that you resigned and finally the top BJP leadership, including L.K Advani, persuaded you to take back your resignation. So how do you see that the same party has completely forgotten all the evidence that you put out in these voluminous reports… where you said that you have enough evidence to show, and you have outlined in graphic detail, how this person received illegalgratifications?

Well I can’t repeat that sentence again because the fact is that the matter is sub judice. But I would like to tell you one thing. Yes, one of my officers working with me in (the office of the) Lokayukta on deputation. Mr Gokul, was suspended because he didn’t obey the instructions of a minister to come and see him at a place which was owned or possessed by a person against whom the Karnataka Lokayukta had filed a chargesheet… So he said: “I am not coming to that building, call me anywhere else.” But the minister did not like it and consequently he was suspended. So when I asked the chief secretary how can you keep him under suspension when he is working under me, without consulting me, he said that the order had been passed and I can’t do anything about that. So I thought that if I can’t protect an officer who is working under my instructions from being suspended, it is not worthwhile staying in the office. I resigned. Well, many people came and asked me to take back my resignation, but I did not agree. Then one day Mr Advani, whom I consider equivalent to my father, with whom I had spent a lot of time when he was in jail, I was appearing for (him) the detenues…

Was this during the Emergency?

Yes, it was during the Emergency… I was the lawyer for Vajpayee-ji ( Atal Bihari), then L K Advani-ji, S.N Mishra and Madhu Dandavate.

You were appearing for all four of them?

Yes, yes. And I was also the lawyer for Ramakrishna Hegde, who was in jail, Deve Gowda…I got an opportunity to fight their cases. In (was against) that background (that) I had come know Advani pretty well. And Advani was one person who was closely connected to my family. When my father died, he came to our village to participate in the grief which we were in at that point of time. I have very high regard for Advani. So he one day telephoned me and said to me that “Santosh you are doing a good job, don’t resign.”

I said: “How can I continue to be in the office when I can’t protect my own officers? I am not there only to … this thing myself.”

He said, “What is it that you want?’

I said I want this suspension to be revoked and I will take back my resignation. And that was done. (Nitin) Gadkari was the BJP president at that time. He and Yeddyurappa came to my residence and gave me a letter for withdrawal of resignation…I withdrew my resignation for that purpose… I could not have continued if the suspension order (against Gokul) was not revoked.

I want to again take you back to what happened after that. The Karnataka anti-corruption bureau launched an investigation against CBI judge R.B Dharmagowda in September 2017. He was the same person who had acquitted Yeddyurappa. You found something very unusual was happening. The advocate, H.M Siddharth, who had represented Yeddyurappa and his family members and his sons, was actually caught by the staff of the Vidhan Soudha with Rs 2 crore in cash… in October 2016. Earlier, attempts were made to bribe judges…In fact, after Gali Janardhan Reddy was arrested and was in Chanchalguda jail in Hyderabad in July 2012, the lower court judge, T Lakshminarasimha Rao, was arrested and jailed because in his confessional statement he said relatives and associates of Reddy had offered him Rs 100 crore to secure bail. So tell us how the criminal justice system works?

It is very unfortunate that the confidence people repose in the judiciary, right now (has been eroded)… I think it is a sad state of affairs that we do hear about corruption in the judiciary, which is an admitted fact. Nobody can deny that. These instances that you mentioned have appeared in the newspapers. I have read them also, which gives room to think that judgements delivered in those circumstances may not be correct judgements.

After your report came out, there were three former chief ministers whose records you were very critical of. And it was not just Yedyurappa. You were critical of late Dharam Singh as well as H.D Kumaraswamy, who you found out were in some way or the other involved in illegal activities, in the illegal manner in which iron ore was being mined. In that sense, your report wasn’t partisan, and you were in a sense indicting the entire political class.

I wouldn’t say I was indicting the political class. I had an opportunity of enquiring into the actions of these three chief ministers and I have given voluminous evidence to show why I implicated them in this matter. Well, the acquittal of Yeddyurappa gives me a bit of sadness and I don’t even know whether the Karnataka government has filed or preferred an appeal or not in the matter…Maybe the investigating agencies have filed (appeals) or may be not. But one thing is certain, today money plays a very big role in all the actions and inactions on part of the government…

I want to draw your attention your report on the illegal export of iron ore from Belekeri port by Adani Enterprises. You said there were incriminating documents that suggest that (the company) had made illegal payments to the port director, to custom officials, to police personnel. But eventually (the case) did not stand in the court of law. The Supreme Court, the special investigative team of the Karnataka Lokayukta, said no case had been made out. And the CBI and the Lokayukta eventually filed closure reports against Adani Enterprises. I bring out this case because the head of the Adani Group, Gautam Adani, is perceived to be very close to Prime Minister Narendra Modi?

Well, let me give you the background of this case as I have not studied the B-report filed in the case of the Adanis, but I have studied the case pertaining to one Doddanavar, another company which is similar to what has been alleged against the Adanis. On February 19-20 of 2010, Lokayukta officers raided the offices of a company called Doddanavar, and they seized certain documents from the computer and hard copies, from which it was found that they had exported huge quantities of iron ore without permission (for) excavation, storage, transportation and export. Without any one of these documents, they had exported (a) huge quantity of iron ore. When we investigated, we gave a copy of the investigation (report) to the Director of Mines saying that this is what has happened in the case and all, please look into it.

From the records I now find out, the Director of Mines at that point of time issued them a notice saying that you have exported so much iron ore without paying the royalty and, therefore, you have caused a loss to the state. This was sometime in March 2010. In June 2010, the Doddanavar company goes and pays all the money due as royalty to the government of Karnataka. Now royalty is only Rs 27 per metric tonne, whereas at that point in time, they were exporting one metric tonne of iron ore for Rs 6,500-7,000. Now it is easy for them to pay Rs 27 and be done with it. But our charges were not that they cheated the government of the money. Our charges were (that) of (stealing) property. (The company) purchased and excavated illegally mined iron ore and they (had) stored (the iron ore) which is controlled by the Mining Act and the rules…they then transported it, which is contrary to the Mining Act and rules and exported (the material) also. These are all separate offences, but when the investigating agencies filed the FIR, the investigating agency gave a B report.

What is a B report?
A “B Report” is (given when) no case (has been) made out.

Then you think the Adani Enterprises case is somewhat similar

That’s what I was told. It is a similar case. I have not read it. They paid the royalty which is due to the government. The B report is filed and the court accepted the B report. What happened to the illegal action (against the company for) extraction, storage, transportation and exportation (of illegally mined iron ore)?

Now, suppose hypothetically there is a BJP government that comes to power in Karnataka–and we will know (the outcome of the elections) on May 15. Suppose Yeddyurappa becomes the next chief minister, what would that mean for the investigations, the judicial processes that would follow?

Since they have filed a B report. It’s for the investigating agency to challenge it….No, the investigating agency itself has submitted the B report, so they can’t challenge it. Now it’s left to others who have some public interest… to challenge the order. Merely compensating the royalty part doesn’t exculpate (the company) from the other charges of illegal mining. All these are very serious charges (under) the Mines and Minerals Development Act. They ought to have considered different actions under different provisions of the law. By merely saying (give us) compensation is like (a situation when after) a thief (is) caught, he says he will pay for the value of stolen goods. Can you get away with the theft charge?

Do you believe CBI is under tremendous political pressure?

I wouldn’t want to say that because during the Congress rule it was called the Congress Bureau of Investigation.

It was also described by a judge of the Supreme court as a ‘caged parrot’. We have two former directors of the CBI being investigated by the very same agency they headed.

I mean it’s not only the CBI. It is there everywhere..

You’ve talked about the nexus between the mining lobby, between businesspersons and politicians, but this has also been facilitated by corrupt bureaucrats. In your report you had recommended action against over 787 officers of the Karnataka government and relatively recently, on May 17, 2017, a serving IAS officer –I should name him, Gangaram Baderia. He was arrested. Was this a rather rare or an egregious example of a corrupt bureaucrat because the accusations against him also pertain to iron ore (mining).

Yes. He was secretary, mining. Nothing has been done based on my report. The present political party which is in power in Karnataka. They walked all the way from Bellary to Bangalore as a protest for not implementing my report. They have been in charge for four years. What have they done? It only shows that when it comes to brass-tacks, all political parties are the same.

How do you react to social activist Ravi Krishna Reddy (who), in March 2017, …wrote to the five top judges of the Supreme Court alleging that the then chief justice of Karnataka, Shubhro Kamal Mukherjee, had favoured Gali Janardhan Reddy. Would you like to say anything about his allegation?

There were many allegations against that person (Justice Mukherjee). This is only one of them… and he has been given a membership of a tribunal (from) what I read in the papers… there were serious allegations against that particular judge. Ravi Krishna Reddy did the right thing to bring it to the notice of the superior court ….otherwise he might have (himself) gone to the Supreme Court or something. He didn’t go to the Supreme court ultimately. (I learn) …has been given the membership of some tribunal.

After spending about three years behind bars, the person who is often considered to be the lynchpin of the scandal, Gali Janardhan Reddy, former minister in Yeddyurappa’s government…when his daughter Brahmini gets married in Bangalore the amount of money that is spent is unprecedented…. And mind you ,this was just around the time of demonetisation. Five days later, the income tax department raids him. In between what happens (is that) one driver called K C Ramesh…he is supposed to be working for an officer of the Karnataka government, commits suicide and in his suicide note writes that he was being forced to convert Rs 100 crore of black money into white. What do you say about the sheer conspicuous manner in which this person who, after spending three years in jail, …splurges on his daughter’s wedding. And what happened subsequently?

That itself indicates the fact that nothing has been done pursuant to my mining report. If they were to be raided properly and the properties to seized and their accounts were sealed too… such amounts of money would not be available to them. That apart, this also shows the failure of demonetisation because if a person would come from jail and within a few days could get Rs 100-150 crore in present day currency to spend on his daughter’s wedding, shows a certain class of people in this country can get over the law very easily.

How important are institutions and how important are individuals who head these institutions? Under you, the people’s ombudsman, the institution of the Lokauykta in Karnataka was very active–I should say aggressively active–in unearthing the iron ore mining scandal. You were succeeded by a former chief justice of Karnataka, Justice Bhaskara Rao. He was a person whose son was accused of blackmail and extortion. In a sense the whole institution of the Lokayukta got degraded before the eyes of the people. What do you have to say about the institution and the people who head these institutions?

The Karnataka Lokayukta institution was one of the first ombudsman institutions created (anywhere in India), maybe only after Madhya Pradesh. It was expected to be a very strong ombudsman’s body. Two powers were given to the institution. One is grievance redressal, that is giving relief to people who suffer because of… maladministration or no administration. The other one is to fight corruption through the Lokayukta police, that is the police of the Lokayukta. These are the only two powers the Lokauykta has.

For very many reasons, though the institution came into existence (in) 1986, till about 2001, nobody did anything in the institution. (The heads) just came as retired judges, enjoyed and went away. It was Justice N Venkatachala who came in 2001 who really created ripples in society by raiding many people … and showed what the Lokayukta was. I succeeded him in 2006 and I also found the institution had very strong powers. It could suo motu, that is, by itself, without any complaint, start an investigation even against the chief minister and other higher authorities (in the state government) without anybody’s permission. Such was the institution. We did a hell of a lot of work by catching corrupt people and granting relief to people who could not find relief from the government.

Unfortunately, it became very unpopular with the people in power. So the first thing that happened was that soon after I retired, two other people came and left in between. Then came Bhaskara Rao. He was suspected to be a corrupt judge because (when) his name appeared in the newspapers (that he was being considered for the post of Lokayukta), the Bar Association of Karnataka passed a resolution saying he’s corrupt…. But still they got him. And what did he do? He brought in a person, that is, his son who was accused of cheating in Hyderabad, got him bail and brought him to Karnataka and made him stay in his own house, gave him a room in the (office of the) Karnataka Lokayukta and allowed him to blackmail officers who were suspected to be corrupt. I am told he used to call people over the phone and say: “If you don’t give me so much money I will see the Lokayukta raids you”. Many of (those called by his son) are supposed to have paid. There is an interim report by a police officer. This is extortion. It is not a simple case of receiving a bribe or something (like that). It was like dacoity… This is how people in power were trying to destroy the institution of the Lokayukta.

Then, in 2014, they (the state government) tried to take away the power of grievance redressal… which fortunately came to the public domain and people started protesting against it. So they dropped the idea. Then, in 2016, without (any) discussion either in the (state) assembly or within the political system, they created an ACB (Anti Corruption Bureau ) and transferred the powers of fighting ….corruption (to it). What does that indicate? It definitely indicates that people who are in power, whether it’s A party or B party, they do not want the Lokayukta, because the Lokayukta is an institution which fights against them and their misdeeds. Every effort was made to the reduce the powers of the Lokayukta…by bringing Bhaskara Rao they wanted to make it (weak). People will not repose confidence in that institution. This was an effort by the people in power. And today, the Lokayukta was attacked by a person who was a complainant in a case and he was stabbed many times. We find that the Lokayukta has sent seven letters (to the state government over a period of) three years saying the security in the offices of the Lokayukta (was inadequate)…this was a very serious issue. The missing metal detectors are not working.The government didn’t even bother to look into that or (send in a) reply… At 1.30 p.m, a stabbing incident takes place and at 4 o’clock they bring a new metal detector and put it there.

In other words you’re saying that the Karnataka government has systematically weakened this institution.

Not only the present political party in power but the previous BJP … did the same thing by appointing Bhaskar Rao as Lokayukta.

My last question. You have participated in the movement against corruption which was led by Anna Hazare, India Against Corruption. You still are on good terms with him. Do you believe civil society, ordinary citizens… people like you and people like Hazare can still can do something to make even make a small dent against this kind of widespread corruption in public life?

I was confident that when the Anna movement was at its peak… I have travelled all over India and have seen the response of the people…how much respect they had for Annaji,(how they)…listened to his speeches and of others who were there in our group…(they) gave us a lot of hope that maybe, society will change. It was mostly the middle class people who used to participate in these proceedings. I think we did make a small mistake (but) … it became a big mistake in the end. We started speaking about it only in the metropolitan cities and didn’t go to the district level, the taluka level and other rural areas. This type of participation has a fatigue factor. Middle class people can’t come every time there is a protest….they have their own personal difficulties, they have their work… So in that process, I think we lost some supporters. The biggest damage was the creation of a political party (about) which I am very unhappy with… I think many things Annaji expected to happen… didn’t happen. This is one thing I don’t think he ever expected to happen.

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