That, on the face of it, may appear to be a somewhat harsh view of Vajpayee's attempts to tackle the ugly situation arising from Jethmalani publicly accusing Aggarwal of stealing the MS Shoes-HUDCO papers in order to leak them to Subramaniam Swamy, and then divesting her of all powers within the ministry. After all, the Prime Minister did write a letter to his colleagues asking them not to air their differences with bureaucrats so publicly, and he did ask the cabinet secretary to write to Jethmalani tellinghim that he had no powers to divest Aggarwal of her powers.

But the issue is not merely one of differences between a minister and his top bureaucrat. In this case, the issue which the Prime Minister continues to duck, is one of fairly serious allegations of corruption, of rampant favouritism, being levelled against a cabinet minister. The point is: if Jethmalani is indeed guilty of passing orders which would help Pawan Sachdeva of MS Shoes make near Rs 200 crore by robbing the public sector HUDCO of this amount, then he needs to be sacked, and publicly.

Look at it another way: if Aggarwal had chosen to go along with Jethmalani's order, there would have been no controversy, the orders would have been passed, and chances are that no one would have been any the wiser. Hudco would have been advised to live with it, and Sachdeva could have walked away with a property valued at around Rs 200 crore.

Briefly, the MS Shoes-HUDCO papers centre around a hotel-cum-guest house complex that HUDCO had put on bid fouryears ago in New Delhi's Andrews Ganj area. Sachdeva won the bid and, as part of the bid conditions, deposited the first instalment of Rs 67 crore with HUDCO Rs 40 crore for the guest houses and the rest for the hotel. He then ran into severe cash-flow problems (he owes financial institutions over Rs 200 crore and some of his properties have been attached by the court), and couldn't make the remaining payments.

He also ran into other problems, and, in April 1994, was arrested on charges of colluding with officials in SEBI and SBI Caps to give wrong information to investors for a public-cum-rights issue by his company.

With Sachdeva defaulting on his payments, HUDCO, under the terms of the bid, cancelled his allotment, and sought to re-tender both the hotel as well as the guest house site. Sachdeva appealed against this in court, lost the case, filed another appeal, and managed to get an extension of a year, but still wasn't able to make HUDCO's payments.

In the event, HUDCO confiscated the money underthe bid conditions, and is trying to re-tender the guest house complex -- the hotel has already been re-tendered. The rationale behind allowing confiscation of deposits in case of defaults, very common incidentally in several agreements, is that since HUDCO would now have to re-tender the property, it could finally end up with a lower price than in the original bid.

That it may not in this particular case is immaterial -- it is the principle that matters. What Jethmalani argued, while asking HUDCO to return Sachdeva's money and to allot him the guest house at the original price of around Rs 100 crore, was that Sachdeva had been wronged. Jethmalani's argument is that Sachdeva didn't pay the second instalment because HUDCO had not got the necessary clearances to develop the complex.

That, however, as has been discussed in this very space two weeks ago, is just so much nonsense. Under the terms of the bid, he had to pay the second instalment (40 percent) within two months of winning the bid. Since there wasno question of HUDCO ever being able to get the necessary clearances in this period, this could not be the reason for Sachdeva not making the payment. Which is why Sachdeva never raised this issue in the courts while appealing against HU-DCO's orders. So when Jethmalani passed his orders, Aggarwal argued that this was incorrect, that HUDCO had a very strong legal case, and so couldn't just be asked to give up its rights.

The issue then is: was Jethmalani's intervention mala fide, or not? Going by the Prime Minister's behaviour, he appears to have decided that Jethmalani was in the wrong in divesting Aggarwal of her powers. And his defence for not taking any action against Jethmalani is that there is no conclusive proof that the actions were mala fide -- he has asked the ministries of law and finance examine the matter.

Fair enough. But, even if these two ministries opine that Jethmalani's ruling was bad in law, this will still not provide `conclusive' enough proof of mala fide, or corruption. The questionis: will the Prime Minister then take strong action against Jethmalani? Or does he hope that by this time, Jethmalani will have resigned on his own? Frankly, if the Prime Minister is concerned about the image of his government, he needs to take some positive action quickly. The latest buzz around town is that the current government is making far more money, far more quickly, than any other government in the recent past.