When the CBI files its application to close its case against Ottavio Quattrocchi today, it’s likely to introduce a new argument in the Bofors case: the 1986 contract for 200 Howitzers wasn’t cancelled, no payment was stopped, so there is no case against the Italian businessman.

Speaking to The Indian Express, Solicitor General Gopal Subramaniam said: “The most crucial point in the debate over the tenability of the ongoing case against Quattrocchi is the fact that in the early ‘90s, the Government of the time neither cancelled the Howitzer contract nor withheld payments to the company. Though the CBI chargesheet mentioned wrongful loss to the Government, there was no condonation of the breach of contract (for payments allegedly made to Quattrocchi) subsequently. Hence, no case remains.”

Even Law Minister Veerappa Moily echoed this line: “Once the court quashed charges under the Prevention of Corruption Act and since final payments were made to the Bofors company way back in the ‘90s, the charges become untenable.”

Records show that the advance payment for the contract of SEK (Swedish Kronor) 1.68 billion was made to Bofors on May 2, 1986 while the balance payment amount of SEK 6.72 billion was paid between 1986-1990. (1 SEK is today equivalent to Rs 6.70).

In a note on June 10, 1987, then Minister of State for Defence Arun Singh had recommended that cancellation of the contract should be pursued as an option if the Swedish authorities didn’t cooperate in the probe.

Singh also said that the Prime Minister should “reconfirm with the Chief of Army Staff as to whether the Army could afford the negative impact of a cancellation of the contract”.

... contd.