Uncovering the Biggest Scams of India

With the Indo-Pak War situation of 1948 turning into a big crisis for India due to its urgent need of Jeeps for the war there lies a scam in making that was shamelessly ignored by the Indian Government.

We are back with yet another interesting scam on our series of the weekly blog “Uncovering the Biggest Scams of India”.

The Jeep Scandal of 1948 was one of the early scams of Independent India which was left unresolved despite its causing huge losses to the nation both financially and strategically.

So readers through our research let us sail into the depth of this week’s scam “The Jeep Scandal 1948”.

Source - opindia.com

Background:

What Laid the Foundation of This One of the Mysterious and Unresolved Indian Scam?

As mentioned above, the scam paved its way through the Indo-Pak War of 1948, where the Indian army was facing a shortage of 4,603 Jeeps. The first thousand jeeps were imported from the USA.

For the remaining jeeps the team of; then financial Advisor A.K. Chanda, commander in chief of the army and the defence secretary went to the UK but they failed to find Jeeps at a desirable price.

Later after some negotiations they entered into the contract with a UK based company M/S Anti Mistantes for supply of 2000 refurbished jeeps at a price of 300 pounds each ( i.e. 6,00,000 Pounds) along with its spare parts for 3 years.

The biggest mystery lies here is that at the same price new jeeps could have been imported from the US, but still the government went for refurbished and reconditioned jeeps. Why?

The mystery to the contract isn’t limited to this, there’s more to the story of this mind boggling scam.

Unfolding the Jeep Scandal 1948, One of the Biggest Indian Scam

Now, we were discussing on the fact that instead of importing new jeeps from the US, the authorities opted for refurbished jeeps from the less known firm of UK, M/S Anti Mistantes with a capital of only 600 Pounds (Rs. 7998)

Why did they give the contract of 6, 00,000 Pounds (Rs. 79, 98,000) to a firm with so low capital? What was the motive?

This has remained a mystery till date. But wait there's more to unfold in this brilliantly confusing scandal.

Later when the contract was finalised for 2000 jeeps, the terms of the payment were settled.

It was decided that 65% payment would be made to the company on receiving the inspection certificates from the inspecting firm, 20% on generation of bill of loading and the remaining 15% when the jeeps would come at a port in India.

But none of the clauses of this agreement was followed. And within one month of signing the contract (9th July 1948) irrespective of whether the inspection certificates were received or not 65% of the payment was made. Now you all must also be thinking the same as me, ‘why’?

So this ‘why’ has again not been answered like the rest of the questions. One excuse that floated was that this 65% payment was an advance so that the company could begin with the production given their low capital situation.

But then again the question arises that in such a crisis situation what was the need of giving such a significant contract to a company like this, who don’t even have required capital to finish the contract in a desirable manner? And expectedly there was no excuse for this question.

Krishna Menon: A Diplomat or the Mastermind of This Great Indian Scam 0F 1948

Krishna Menon was the high commissioner of London during 1948. In a simpler language he was the representative of India in London and hence he was a significant part of this deal.

But sadly he didn’t did the job well, he was the one who agreed to pay the 65% without inspection and later he also agreed to inspect only 10% of the jeeps randomly despite the fact that initially it was decided that the whole consignment would be inspected.

It was also decided that the whole consignment would be sent till 9th December 1948, but not a single jeep has been received till 26th December.

On enquiry Mr. Menon said that 1300 jeeps have been shipped. But during March 1949, only 155 jeeps were received and these jeeps were unserviceable.

And when it was communicated to Mr.Menon, he went to the company and as per his statement the company disappeared and the Indian government faced a loss of Rs. 80, 00,000.

Further similar contract was formed with a similar company ‘SCK Agencies’ and again the government faced huge losses.

Enquiry Into the Scam

To satisfy the demands of the opposition parties to look into these reckless dealings, Ayyangar Committee was formed.

On the investigation of the company it was revealed by Mr. Chanda (financial advisor) that he was not present at any negotiations and all the dealings were handled by Mr. Menon alone.

Can you fathom this revelation of a deal with such a substantial outlay of funds being signed without the correspondence of the country's financial advisor?

Not just this, inspecting firms earlier appointed were also sidestepped on the request of M/S Anti Mistantes and another firm has been assigned. Ayyangar committee stated that the execution of the deal has been completely different from the agreed terms without any genuine reasons.

Another shocking revelation was that all the payments were made by Krishna Menon himself without any approvals from the financial advisor or the defence ministry.

What Happened After the Enquiry?

The committee recommended assessing the whole case by forming a high level committee with one or two high court judges, but the government asked them to reconsider their suggestion.

But when the committee declined to do so, the government in 1955 announced the case to be closed. And no further investigations were made.

Instead, despite Mr. Menon's suspicious wrongdoings he was appointed as minister in the union cabinet without proper eligibility in 1956 and further as Minister of Defense in 1957.

This scandal being unresolved highlights the corruption within the Indian Government and its failure to recognize it and take action upon it.

So this was this week’s scam story, we shall meet soon. Till then be aware and alert of the scams weaving around you.

Written By- Priyal Sharma

Edited By - Anushka Dabhade

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