The Hawala scandal or hawala scam was an Indian political scandal involving payments allegedly received by politicians through hawala brokers, the Jain brothers. It was a US$18 million dollar bribery scandal that implicated some of the country’s leading politicians. There were also alleged connections with payments being channelled to Hizbul Mujahideen militants in Kashmir.
Those accused included Lal Krishna Advani who was then Leader of opposition. He and others were acquitted in 1997 and 1998, partly because the hawala records (including diaries) were judged in court to be inadequate as the main evidence. The failure of this prosecution by the Central Bureau of Investigation was widely criticised.
Hawala Bribery case is the name of the scam of $18 million (Indian Rs.650 million) allegedly paid by one Surindra Kumar Jain, to top Indian politicians and bureaucrats, between February 1988, and April 1991, through an illegally established foreign exchange called Hawala. This scam has poisoned the political atmosphere of India, the so called biggest democracy of the world, in such a way that it has overlapped the three major political parties of that country including the ruling Congress (I), Party, whose seven ministers had to resign. The major opposition party viz. The Hindu fund—
NEW DELHI, AUG 28: Former Chief Justice of India (CJI) J S Verma who headed the Bench that monitored the Jain-hawala case, today said investigating agencies had not done a satisfactory job in probing the case, otherwise it would not have been possible for all the charge-sheets to end up in a fiasco.
“The hawala case was one in which the Court had granted complete insulation to the investigating agencies from extraneous circumstances. We even relieved them of the power of supervision by the highest authority in the executive (the Prime Minister) and yet they could not perform,” Justice Verma said, adding this proved that mere insulation was not enough.
Verma said if after investigating and filing a charge-sheet, the accused had been discharged in every case, it only went to show that the agencies did not investigate properly so as to collect materials to be put up along with the charge-sheet.
“It appears clear now that they only put up an excuse of filing a charge-sheet because if the discharge of accused is justified then apparently there was no prima facie case put up along with the charge-sheet for the trial to commence,” Justice Verma said, adding that if there was no justification, no evidence available from the investigation, they should not have filed the charge-sheet
Details of bank drafts seized by 20 Grenadiers from Abdul Ahad, allegedly Jamaat-e-Islami funds to be passed on to the Hizbul Mujahideen.
The Criminal Investigation Department of the State police, which should have monitored the affair, found itself helpless in the face of the challenge of pursuing hawala cases outside the State's boundaries. The CBI, too, made no effort to use the evidence on offer in the bank drafts case to substantiate its allegations against Geelani. Just why all these agencies acted as they did, Frontline was unable to ascertain: officials agreed to speak only off the record and then offered nothing of substance.
The Army's inept management of the demand draft affair and the State CID's incompetence have in effect crippled any real chance of arriving at the truth of Geelani's funding sources and their deployment. There was no real evidence to back the central charges in the CBI's FIR, that Geelani received hawala funds from overseas sponsors and that these funds were converted into personal assets in a corrupt manner. Abdul Ahad's bank drafts, properly investigated, might have thrown light on that point. "We could have pursued the leads against Qazi Ahadullah and Bhatt," says a senior State police official, "and tried to establish just where the money had come from, and precisely what it was intended for." "Now," he concludes, "the lack of coordination between investigative agencies has created a situation where even if we find out the truth, our case will most likely be laughed out of the trial court." Syed Ali Shah Geelani, though he may strenuously deny the proposition, could owe his political future to the Indian Government.