Verma, an Indian Revenue Service (IRS) official, was handling the file of Suresh Nanda, named by the CBI in FIRs in two big Defence deals — the import of Barak missiles and supply of Armoured Recovery Vehicles (ARVs). The deals are among a clutch of 48 Defence-related cases referred to the CBI between December 2004 and August 2005.

Suresh Nanda, son of former Navy chief Admiral S M Nanda, has been named “middleman” in the Rs 1,125-crore import of Barak missiles and the supply of 87 ARVs in which the CBI suspects a loss of Rs 51 crore was caused to the national exchequer.

According to the CBI, investigations in both cases are at an “advanced” stage and former Defence Minister George Fernandes is expected to be questioned shortly on the rationale for clinching the deals.

Nanda’s arrest appeared imminent once the CBI received the final dossier from the UK on his financial transactions. But the telephone intercept landed him in the CBI net sooner than what even the sleuths anticipated.

So when Verma, after a brief vacation in Goa, flew to Mumbai yesterday using a fake identity, a CBI team was on his tail. According to the CBI, he was received at the airport by Bipin Shah and taken to J W Marriott Hotel to meet Nanda and his son Sanjeev (of the infamous BMW case) to “negotiate” payment of the remaining bribes to “doctor” an appraisal report. While the meeting was on, the CBI barged in and arrested the four men.

The CBI claims it has proof of “huge” bribes being paid by Nanda to Verma, that there was indication of the I-T official going to Goa to check on properties which were to be bought for him by the arms dealer. According to the CBI, Verma “manipulated” the Nanda file by defacing and ignoring crucial entries from the final appraisal report which the I-T department had worked on after raids on the arms dealer last year.

“We expect that the voluminous details of bank deposits and hawala transactions available with the Income Tax department will have a bearing on our ongoing investigations into the Barak and the ARV deals. After these arrests, we have seized all files of Suresh Nanda from the office of Ashutosh Verma. We should be able to use both the recovered documents and the I-T papers in our case,” a CBI official said.

Top officials in the Income Tax (Investigations) unit, meanwhile, said they were “taken aback” by the developments and said that Nanda’s appraisal report had already moved to the department’s assessment wing. “A lot of details in the case have already been shared by us with the CBI and the Enforcement Directorate and even in this case of alleged bribery, we will give the CBI all possible help,” an I-T official said.

While the CBI searched the residences and offices of several Defence dealers, including Suresh Nanda, in October 2006, the Income Tax department conducted their own searches in February 2007. When Nanda challenged the impounding of his passport in the Supreme Court, the CBI was forced to disclose the magnitude of the case and the extent of its investigation. The CBI informed the court that an amount of Rs 543 crore had been deposited into Nanda’s bank accounts between 1995 and 2001 and that the Interpol too had confirmed the receipt of Rs 400 crore in his accounts soon after the Barak deal was signed.

While there has been a rare show of cooperation between the various agencies — the CBI, I-T department and the ED — the latest round of arrests suggest that arms dealers like Suresh Nanda are still desperately manipulating the system and bribing key officials to obstruct investigation.

ENS adds from Mumbai: The CBI was granted transit remand of two days to take Suresh Nanda, son Sanjeev, Verma and Shah to New Delhi and seek custodial remand there. They were booked for criminal conspiracy, causing disappearance of evidence and criminal misconduct by a public servant.

All four accused were produced by the CBI before Mumbai additional sessions judge C H Mali.

“Verma was holidaying in Goa with his wife till two days ago. Suddenly, he left her there and came to Mumbai where he was arrested while meeting Nanda in his hotel room. There was no reason whatsoever for Verma to meet the Nandas and their CA, unless they were trying to manipulate evidence. That was the crux of our application for transit remand,” senior public prosecutor, Eijaz Khan, who appeared for the CBI told The Indian Express.

In his plea, Verma’s lawyer Kanishk Jain said his client had come to Mumbai to meet a relative and that he could not be booked under the Prevention of Corruption Act.

“My client had come to Mumbai with the intention of meeting a relative. He has already submitted a report against Suresh Nanda to his superiors in 2007. What could the Nandas achieve by meeting him now? Moreover, the relationship between an I-T officer and a citizen is not similar to the one between a judge and an accused. It is very cordial. A businessman of Nanda’s stature would definitely not meet anyone for a cup of tea at a small restaurant. It would be normal for him to meet people at a five star hotel,” Jain told The Indian Express.

“If a public servant is in custody for 48 hours, he is going to be suspended from service. This is another major concern of my client,” said Jain.

While no lawyers appeared for the Nandas in court, Suresh Nanda said he was being framed by the CBI because they were unsuccessful in getting his passport revoked.