India announced today that it has impounded the passports of ousted Prime Minister Indira Ghandhi's son and her former defense minister, preventing them from leaving the country while investigators probe their financial dealings.
Three distinguished jurists, including one who was passed over by Mrs. Gandhi for Supreme Court chief justice, were named to head separate inquiries into alleged abuses of power by Sanjay Gandhi and former Defense Minister Bansi Lal, and into other alleged official excessess during Mrs Gandhi's 21-month emergency rule.
The Gandhi government fell four weeks ago when her ruling Congress Party was defeated by the newly formed People's Party in national elections.
Both Mrs. Gandhi and her son and Lal lost their election contests. The probes meant new disgrace for Sanjay Gandhi, 30, and his close friend Lal, who were virtually above criticism during the national emergency. The anti-Gandhi election landslide was attributed in part to the conduct of the young and Lal during that period.
The Sanjay Gandhi-Lai relationship reportedly goes back to the founding of Sanjay Gandhi's abortive scheme to produce a small, low-priced car called the Maruti. Lal, then chief minister of Haryana state, reportedly arranged to sell Sanjay more than 400 acres of government-controlled land at a very favorable price. The land was to be used for the factory.
Few if any cars have ever been produced, although opposition parliamentarians have alleged that Maruti accepted $3 million in fees from would-be dealers, obtained dealers, obtained substantial loans from state-controlled banks and was allocated construction materials such as steel and cement that were in short supply at the time.
It was during the national emergency, when Sanjay Gandhi acted as one of his mother's closest advisers, that Maruti began to act as an agent for foreign companies doing business in India. There have been a number of allegations that the company, or Sanjay personally, received large commssions for these activities.
There also have been allegations that Sanjay used his position in his mother's inner circle to influence government purchasing practices and construction projects.
According to reports here, the deals ranged from trucks and construction equipment to aircraft. Maruti was the agent for International Harvester and reportedly for Piper aircraft and scores of other companies. According to an opposition member of Parliament, a $250 million deal for Swedish jet aircraft was about to be signed when the Gandhi government fell.
All of thisreportedly took place as the Gandhi stressed a theme of honesty among the public officers and arrested hundreds of people for tax and currency violations.
Sanjay Gandhi and Lal also reportedly played major roles in controversial human sterilization and slum removal programs during the emergency, and these could figure in the probe into abuses of power during the emergency period.
The government of Prime Minister Jorarji Desai named Supreme Court Justice H.R. Khanna to head the probe into possible illegal financial activities by Sanjay Gandhi in setting up the Maruti plant.
Khanna had been in line for promotion to chief justice, but was passed over after he ruled against measures Mrs. Gandhi sought during the national emergency. She chose another justice who had sided with here.
Former Justice Jagmohan Reddy was appointed to head the investigation into Lai's dealings, including an electrification project scandal when he was chief minister of Haryana state and his involvement in the Maruti deal.
The third probe, into other possible abuses of power during Mrs. Gandhi's emergency rule, will be conducted by former Chief Justice J.C. Shah.
The government also took away the passport of Yogi Dhirendra Bramachari, although it was uncleae why he was included with the other two.
The Foreign Office said that all airports, seaports and land exit stations were informed of the action against the three.
In another development, the Desai government moved toward its first major post-election confrontation with the defeated Congress Party by demanding dissolution of state assemblies and new elections in nine states under Congress Party rule.
The People's party was the decisive victor in the national elections in those states, but the Congress retained control of the local governments.