This even as the CBI kept sending repeated reminders to the CPS that the accounts should remain frozen and was pushing diplomatic channels to uncover the money trail from Lugano, Switzerland, to London to connect the Rs 21 crores with the alleged Bofors kickbacks.

When the de-freezing appeared imminent, the Department of Personnel and Training (which has the administrative control of the CBI) sent Additional Solicitor General B Dutta alone to London, turning down the agency’s proposal of a senior sleuth accompanying him.

Just as in the Argentine extradition case, when the CBI delayed a public announcement on his detention for 17 days until he was granted bail, on the de-freezing issue, too, even the top bosses of the CBI were kept unaware of what transpired between Dutta and UK officials until the money was withdrawn.

The Indian Express has learnt that while Senior Crown Prosecutor Shane Nainappan e-mailed the CBI on December 26, 2005 informing the agency about Dutta’s opinion that “no useful purpose will be served by maintaining the Restraint order (on the accounts),” the e-mail, along with Dutta’s two-page report on the London meeting, percolated down to the CBI bosses only on January 12, a day after the order on de-freezing came. Coincidentally, after 17 days.

This is how Dutta concluded his debriefing report for the CBI, “Given that charges against Ottavio Quattrocchi are liable to be withdrawn/ quashed in law, there can be no road map for his prosecution — the CPS has been apprised accordingly concerning the legal points of this case so that appropriate action be taken by them under their UK law.”

The ASG also informed the CBI that, “since there is no prima facie case to continue his prosecution for any of the offence, there is no justification for any further investigation under the Criminal Procedure Code. The question of further investigation, whether through issue of fresh Letters Rogatory or otherwise does not arise in view of this.”

What is not known is that the e-mail and Dutta’s report — Dutta says he e-mailed it on December 23 — was not shown to senior CBI officials. This resulted in an internal inquiry being ordered in the agency.

The inquiry concluded that while the lapse on the part of DIG R K Sharma (who received the e-mail from Nainappan) was a serious one, no mala fide could be attributed to him.

Following this, internal instructions were issued in the CBI that, in future, all correspondence/ communication in the Bofors case should be sent immediately to Director Vijay Shankar at the “dak stage.”

But the damage had been done. CBI insiders say they were “completely taken aback” with the turn of events and the fact that the ASG had exceeded the brief worked out in several rounds of discussions between him and CBI officials. This is borne out by CBI documents which reveal this chronology of events prior to Dutta’s London mission to give Quattrocchi a clean chit:

May 5, 2005: CPS seeks clarification from CBI on the implications of the 2004 HC judgement on Quattrocchi’s accounts.

May 27, 2005: CBI responds to CPS stating there is ample evidence against Quattrocchi; that the High Court had let off public servants but observed there was a prima facie case against others, including Quattrocchi.

July 11, 2005: CBI writes to the UK Home Office pointing out that the second High Court judgement of May 2005 also had no impact on the case against Quattrocchi and the restraint orders should continue.

October 2, 2005: CBI again writes to British Home Office informing them that the 2005 HC judgement has no bearing on the Quattrocchi case.

Soon after the de-freezing bungle, Dutta was taken off the Bofors case but not before he had stymied another suggestion from the CPS, this time for the CBI to obtain an order for attachment or forfeiture of his properties under provisions of Section 82 and 83 of the Criminal Procedure Code. Dutta prepared a detailed opinion vehemently arguing against the move which was subsequently countered by CBI’s Joint Director A K Majumdar in a 10-page note.

In it, Majumdar concluded, “In case we accept the advice of the ASG in totality and convey the same to the CPS, London there is a strong possibility that they move the court in London for vacation of the restraint order on account of non initiation of process under Section 82 and 83 of CrPC against Ottavio Quattrocchi.”