TANSI land grabbing & ESIC Medical College grabbing!

Ms. Jayalalitha, as Chief Minister of Tamil Nadu, manipulated law and procedure, in the year 1991 and 1992, to grab the land that belonged to the TANSI Foundry. The TANSI, the Tamil Nadu Small Industries Corporation Limited, was a Government Company, the entire shares of which were held by the Government of Tamil Nadu. She manipulated the tender procedure and got the land sold by the Government to Tamil Nadu, through G.O. Ms. No. 18 issued on 20.01.1992 to her own business concern, M/s Jaya Publications. This was an unregistered partnership concern in which she and one Ms. Sasikala were partners.


The Office of the TANSI, Guindy. One of the many.

It was a fact that for long, a Code of Conduct for Ministers had been in force in Tamil Nadu. It was a G.O, a Government Order. “A Code of Conduct for Ministers was brought into force by G.O.Ms. Nos. 1350 on June 16, 1968 which was revised from time to time and clause 2(b) thereto provides that ‘a Minister shall refrain from buying from, or selling to, the Government any immovable property except where such property is compulsorily acquired by the Government in the usual course and refrain from starting, or joining, any business’. There was allegation that Ms. Jayalalitha had violated the provision of these conduct rules.

The matter was taken to court of law and she was found guilty by the trial court. The Trial Judge convicted Ms. Jayalalitha, Ms. Sasikala and the  bureaucrats involved in the case.

Thus spake the Supreme Court

When the matter went to the Supreme Court later, it held in its 24 pages judgment in R. Sai Bharathi Vs. J. Jayalalitha and others on 24.11.2003, as under:

supreme court

“Officers even holding small posts like a Railway Property Keeper or a Cattle Pound Keeper or a Process Nazir who is put in charge of the sale of properties in a court auction cannot purchase the properties over which they have control. In the present case, in view of the fact that Government headed by the 1st Respondent has to give permission in respect of the sale of property of these two companies, it certainly exercises powers over the same and thus there is conflict of interest. Where there is conflict of interest law has always avoided such sales being effected in favour of those who can jeopardise the fair outcome of the transaction. Whatever may be our findings on the question of valuation of the property whether it resulted in a pecuniary advantage to A-1 or not, we are clear in our mind that if the officers and others become aware of the fact that the Chief Minister of the State is interested in purchasing some properties, the bureaucracy will be over-enthusiastic to see that the sale goes through smoothly and at a price desired by such Chief Minister. Though we can visualise such situation, such facts have to be established by concrete evidence to be convicted in a criminal case and is hard or difficult to get. At any rate, it is plain that such conduct is opposed to the spirit of the Code of Conduct if not its letter.

Morally speaking, Can there be one law for small officials of the Government and another law for the Chief Minister? In matters of such nature, is the Code of Conduct meant only to be kept as an ‘ornamental relic’ in a museum but not to be practised ? These aspects do worry our conscience. Respondent No.1 in her anxiety to save her skin went to any length even to deny her signature on documents which her auditor and other Government officials identified.

Report leading to IPC makes it clear that criminal law merely prescribes the minimum standards of behaviour, while in public life, those who hold high offices should not take shelter under the umbrella of criminal law but stand by high probity. Further, criminal law is meant to deal with criminals ordinarily, while Code of Conduct is observed as gentlemen’s agreement. Persons in public life, who are gentlemen, follow such Code instead of taking escape routes by resorting to technical pleas as arise in criminal cases. Persons in public life are expected to maintain very high standards of probity and, particularly, when there is likely to be even least bit of conflict of interest between the office one holds and the acts to be done by such person, ought to desist himself from indulging in the same. Such standards of behaviour were scrupulously observed in the earlier days after independence, but those values how now dwindled and instances of persons holding high elective offices indulging in self- aggrandisement by utilising Government property or in distribution of the largesse of the Government to their own favourites or for certain quid pro quo are on the increase. We have to strongly condemn such actions. Good ethical behaviour on the part of those who are in power is the hallmark of a good administration and people in public life must perform their duties in a spirit of public service rather than by assuming power to indulge in callous cupidity regardless of self imposed discipline.

Irrespective of the fact whether we reach the conclusion that A-1 is guilty of the offences with which she is charged or not, she must atone for the same by answering her conscience in the light of what we have stated not only by returning the property to TANSI unconditionally but also ponder over whether she had done the right thing in breaching the spirit of the Code of Conduct and giving rise to suspicion that rules and procedures were bent to acquire the public property for personal benefit, though trite to say that suspicion however strong cannot take place of legal proof in a criminal case and take steps to expiate herself.” (For more, please visit: Indian Kanoon – http://indiankanoon.org/doc/447378/ )

And Ms. Jayalalitha expiated herself by returning the land grabbed from the TANSI. All because she did not have the assistance of bureaucrats who were as clever as the bureaucrats of the present Central Government who drafted the Bill on the Code of Social Security, 2019 (which has been placed before the House of the People as Bill No. 375 of 2019). Also because she did not have a son or daughter who could be shown to be the purchaser instead of having her own name recorded in the sale deed. Also because she did not and could not have faith in any benami.

ESIC Medical Colleges grabbing


ESIC Medical College & Hospital Complex, Joka, Kolkata, one of the many.

It would be appropriate to keep the TANSI – Jayalalitha episodes in mind while examining the puzzling provisions in Clause 39 (5) of the Bill on the Code of Social Security, 2019 (Bill No. 375 of 2019) which was referred to the Parliamentary Standing Committee on Labour, on 23.12.2019, reads:

The colleges and training institutions referred to in sub-section (4) may be run by the Corporation itself or on the request of the Corporation by the Central Government, any State Government, any Public Sector Undertaking of the Central Government or the State Government or any other body notified by the Central Government.

Explanation: For the purposes of sub-section (5), the expression ‘‘other body’’ means any such organisation of persons which the Central Government considers capable to run colleges and training institutions referred to in sub-section (4).”

Significantly this provision had never been put in public domain by the draftsmen. In fact, this provision is an improvement from the earlier provision inserted by the bureaucrats in Clause 41(5) of the earlier draft Labour Code on Social Security, 2019, which had been put in public domain on 17.09.2019 but had been withdrawn by the PMO in the first week of October 2019. That was the third draft, the earlier ones being those publicised for the information and response of the stake holders in 2017 and 2018.

The first two drafts put in public domain in the years 2017 and 2018 had, rightly, been dumped because of their having been amateurish at the very first sight. But the third draft dated 17.09.2019 had betrayed the intention of the persons behind the draft at first sight. The said Clause 41(5) read:

The colleges and training institutions referred to in sub-section (4) may be run by the Corporation itself or on the request of the Corporation by the Central Government, any State Government, any Public Sector Undertaking of the Central Government or the State Government or any person notified by the Central Government.”

The words “any person” found in the above Clause in the third draft showed very clearly the intention of the draftsman to make smooth provision to divert the huge property of the ESI Corporation to private individuals. The same is the intention behind Sec. 39 (5) of the Bill No. 375 of 2019. i.e., to enable some interested private person to take over the medical colleges, built at a humongous cost.

Diverting the possession of public property to private hands

While the handing over of those mammoth structures to the Central Government, any State Government, any Public Sector Undertaking of the Central Government or the State Government is the right and understandable decision, there is no justification in handing over those Medical Colleges and Training Institutions to private sector let alone private individuals either as a single person or as a body of persons or as ‘organisation of persons’. The fine phrases used in the Clause to qualify the phrase, “the organisation of persons”, with subsequent phrases such as  the “consider”ation of the “Central Government” or  examination whether they are  “capable to run colleges and training institutions” are simply attempts at cheating the legislators and the public at large. The phraseology in Clause 39 (5) is a clear indicator of bureaucratic skulduggery of the year 2019 typical of many such amendments proposed ten years ago in 2009, vide Bill No. 66  of 2009,  in the ESI Act.

The Parliamentary Standing Committee is therefore required to examine this provision thoroughly, with open mind, keeping public interest in mind. The Committee may please take action to obtain the explanation of the draftsman and the other bureaucrats who colluded with him. It is also necessary that these facts have to be documented correctly and taken to its Report submitted to the Speaker of the Lok Sabha.

Essential Questions that need answers

Some of the essential questions that need proper answers of the bureaucrats in respect of the said Clause 39(5) are:

1. Who was the individual who came up with the original proposal for the inclusion of the phrase “or any person notified by the Central Government” in Clause 41(5) of the draft Labour Code on Social Security put in public domain on 17.09.2019?

2. If nobody had proposed inclusion of that sentence, was it included personally by the concerned draftsman only?

3. Who was the individual who proposed the modification of the phrase “any person” in the said Clause 41(5) in the previous draft and included in Clause 39(5) of the latest Code on Social Security placed before the Parliament, the phrase “any other body” and added an Explanation also to it to clarify that the phrase “other body” was to mean “organisation of persons which the Central Government considers capable to run colleges and training institutions referred to in sub-section (4).”? (It is very clear that such an inclusion in the earlier draft and modification in the current Bill are conscious, calculated and deliberate moves with an intended purpose. So, the draftsman concerned should explain before the Parliamentary Committee what motivated him or who advised him to insert such phrases with such a devotion, attention, care and caution.)

4. What was the advantage to the Indian public if these ESIC medical colleges and training institutions are handed over to such ‘organisation of persons’ or to some private individuals masquerading themselves as ‘organisation of persons’? Was any such issue examined on file before it was decided to include those phrases in the present Bill?

5. What would be the terms of such handing over? Have those terms been already finalised or would be finalised only after the Bill concerned has been made an Act?

6. What would be the duration for which those ‘organisation of persons’ would be allowed to run those medical colleges and training institutions? For a lease period of 5 years, 10 years or 99 years? (The records showing the examination of this issue before inclusion of this phrase should be produced before the Parliamentary Standing Committee).

7. What are the precedents, if there are any, which gave the idea to the draftsman to draft the said Clause 39 (5), the way he has drafted?

8. Can a law ever be framed with nebulous provisions like the ones in Clause 39 (5) along with its peculiar ‘Explanation’, without extensive discussion of the pros and cons of such phraseology and without keeping the details of such discussion on record? Should those files not be produced before the Parliamentary Standing Committee on Labour now?

9. How will those Medical Colleges and Training Institutions be run by the private “organisation of persons”? Will it be in public interest or for private profit? If for private profit, how can running those colleges and training institutions by such private organisation be equated, in Clause 39 (5) and treated to be on par in status, with the running of those institutions by the Central Government and State Government or the PSUs of the Central Government or State Government?

10. Will the large ESIC Hospitals attached to the said Medical Colleges would also be handed over to those “organisation of persons”? If so, what will happen to the secondary and tertiary care of the insured persons covered under the ESI Act? Where are the papers in which these issues had been examined before venturing to insert the phrases to facilitate the entry of private persons for taking over the property of the ESIC to run the medical colleges?

To sum up,

These are essential questions but only minimum. The draftsman who drafted the said Code on Social Security which is pending consideration of the Parliamentary Standing Committee now as Bill No. 375 of 2019, has the bounden duty to answer these questions before the legislators. Because he knows the answers. Also because his role could be the root cause of a very big scandal that is going to erupt.

Carte blanche Subordinate Legislation

The present provision in Clause 39 (5) can, if made law, be easily used to divert the possession of the ESI Medical Colleges, in the name of lease for decades and decades, to the sons and daughters of the powerful ministers or leaders of the ruling dispensation who could cock a snook at every law  and every citizen of the country. The subordinate legislation required for enforcing the Clause 39 (5) is not in public domain. The Parliament is also not going to be aware of the nature of such a subordinate legislation, until it gives approval to the present Clause 39 (5). As things stand, this Clause is actually an unwanted and unwarranted blank cheque, a carte blanche in the hands of bureaucrats.

The Apex Court had said, “Unlike Parliamentary legislation which is publicly made, delegated legislation or subordinate legislation is often made unobtrusively in the chambers of a minister, a secretary to the Governor or other official dignitary.” (ITC Bhadrachalam Paperboards Vs. Mandal Revenue Officer 1996 (6) SCC 634 and Harla Vs. State of Rajasthan AIR 1951 SC 467 and B.K. Srinivasan Vs. State of Karnataka AIR 1987 SC 1059). There is no guarantee that that subordinate legislation would be drafted by the bureaucrats to serve public interest when the parent legislation, the Bill in hand, itself has been drafted in a wily manner to serve private interests.

Such subordinate legislations of many public institutions like the IITs, which have been loosely and carelessly prepared and put to use, have not been placed even before the Parliamentary Standing Committee on Subordinate Legislation for decades, resulting in continued mismanagement of the organisations like the IIT-Madras by the bureaucrats of the IITM in collusion with the bureaucrats of the Ministry of HRD with impunity. Evidences are aplenty and many cases are pending judicial review of the commissions and omissions of these bureaucrats.


Clause 39(5) in the Bill No. 375 of 2019 is an enabling provision which is patently unlawful in its content and purpose. This will result in favouritism and corruption of a colossal size.  Unrestricted and unconstitutional discretionary power is given to the bureaucracy to frame subordinate legislation in this regard to suit extending such favouritism to the people who are seemingly kept in the mind of the draftsman already. By recommending complete deletion of the words and phrases in the said Clause that enable diversion of possession to private hands, the  Parliamentary Standing Committee would be doing yeoman service to the nation, by saving  not only the public property and the public of the nation but also the Bureaucrats who forget the extent of their accountability and the importance of their role to defend the constitutional values. What is more, they choose even to ignore the fate of bureaucrats involved in the Coalgate. The sudden inclusion of these phrases in the year 2019 needs deeper probe into the issue.

Prayer to the PSC on Labour

It is prayed that keeping the interest of the nation and the public in mind the members of the Parliamentary Standing Committee on Labour would pour into the facts and circumstances behind this mysterious and mischievous Clause 39 (5) of the Bill No. 375 of 2019 and recommend the total deletion of the phrase “or any other body notified by the Central Government” along with the Explanation given therein to clarify the expression ‘other body’.

That will be a real service of the Hon’ble Members to the working population of India for all the time to come. It is in their hands now to ensure that no TANSI is repeated elsewhere.


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