TANTRIC

QU

EST

An Encounter with
Absolute Love

DANIEL ODIER
SPEITUALITY SEXUALITY 1
TANTRIC QUEST

IN THE FALL OF 1968 DANIEL ODIER LEFT EUROPE for the green
foothills of the Himalayas. Twenty-three at the time and fascinated by
the Eastern mystics, he was looking for a master who could help him
penetrate where texts and intellectual searching could no longer take him.
He wanted everything: the wisdom and spirituality gained from the life of
an ascetic and the beauty, love, and sensuality of a life of passion. It was
here that Odier discovered Shivaic Tantrism, the secret spiritual path that
seeks to transcend ego and rediscover the divine by embracing the passions.

Tantrism 15 the only ancient philosephy to survive all historical
upheavals, invasions, and influences to reach us intact by uninterrupted
transmission from master to disciple, and the only one te retain the image
of the Great Goddess as the ultimate source of power. Entire Tantric
lineages have followed great women masters, and teday numerous female
yogis continue to transmit this age-old wisdom After months of search-
ing deep into the Himalayas, Odier met Devi, a great female vogi who

would take him on a mystical journey like none he had ever imagined.
At times moving him beyond the limits of sexual experience, at times

threatening him with destruction, she taught him what 1t 15 to be truly
alive and know the divine nature of absolute love.

Daniel Odier 15 one of France's most honored writers. He founded
the Tantra/Chan center in Parts and has taught courses on the spiritual
traditions of the Far East at the University of California. He 1s the auther
of several books of nonfiction, including Nirvana Tao, and many novels
His mystery novels, written under the pen name Delacorta, include Diva,
which was made into an award-winning film in 1981. He lives in Paris.

INNER TRADITIONS
ROCHESTER, VEEMONT

To (0
LAIN ye

Cover photograph by Kevin Bubriski 780892781620 Ul
PRINTED & BOUND IN CANADA ISBIN 0-89281-620-1

Cover design by Tim Jones y
TANTRIC
QUEST
TANTRIC
QUEST

An Encounter with
Absolute Love

\o/

Daniel Odier

Translated from the French by Jody Gladding

Inner Traditions
Rochester, Vermont
Inner Traditions International
One Park Street
Eochester, Vermont 05767

warw InnerTraditions. comm

First English edition published in the United States in 1997

Onginally published in French under the ttle Tantra: Linitiation d'un
occidental a l'amour absoiu.

Copynght  1996, 1997 by Daniel Odier
This English translation edition copyright 1297 by Inner Traditions
International

All nights reserved. Mo part of this book may be reproduced or utilized
in any form or by any means, electronic or mechanical, including
photocopying, recording, or by any information storage and retrieval
system, without permission in writing from the publisher.

Library of Congress Cataloging-in-Publication Data

Odier, Daniel, 1945-

[Tantra. English]

Tantric guest; an encounter with absolute love / Damel Oder,
translated from the French by Jody Gladding,

p. cm

[SEN D-89281-620-1 (alk paper)

I. Spiritual life - Tantnism. I Title
BL1283.85204513 1097
204. 5'514 - del 07-1728

CIF

Printed and bound in Canada
ID DR 765 4

Type design and layout by Penn Champine

This book was typeset in Bitstream Charter with Delphian as the
display typeface
For Kalou Rinpoche and Devi,
my masters
In truth, every body is the universe.

Mahanirvana tantra
INTRODUCTION

Shivaic Tantrism of Kashmir occupies an extraordinary
place in the history of thought. Originating seven thou-
sand years ago in the Indus valley, this mystical, scien-
tific, and artistic movement of the Dravidian culture en-
compasses all human potential and assigns a special place
to the adept who 1s totally engaged in the way of knowl-
edge. Tantrism 1s probably the only ancient philosophy
that has survived all historical upheavals, invasions, and
influences to reach us intact by uninterrupted transmis-
ston from master to disciple, and the only one, as well, to
retain the image of the Great Goddess without inverting
the power between woman and man to favor the latter.
Entire lineages have followed great women masters, and
still today, numerous yoginis transmit this age-old wis-
dom. Great male masters have often retained the custom
of imtiating a female disciple as a way to draw from the
very source of power.
The Dravidians, seafaring people, built the great cities
of Mohenjo Dare and Harappa. Their civilization extended
from the Indus valley, in what is now Pakistan, to the Red
Sea and the Mediterranean. The invasion of Aryan tribes
from the Ukraine, three thousand years ago, put an end to
the Dravidian civilization, but the formidable mystical
movement underlying it survived. The masters fled the
occupied citadels and took up residence in the countryside
and in inaccessible places throughout the Himalayan moun-
tain chain.

Shivaic Tantrism reemerged openly at the beginning of
the fourth century A.D. in Kashmir, located, naturally, at the
crossroads of the great cultural and commercial routes.
Kashmir was part of the mysterious country of Oddiyana,
situated between Afghanistan, India, and Pakistan. It in-
cluded the valley of Swat, birthplace of numerous
Mahasiddhas and dakinis, great Tantric initiators who
spread the doctrine throughout the rest of India, Nepal,
China, and Tibet.

Shiva and Shakti, the inseparable divine couple, are the
cods ofthe ecstatic dance and the creators of the yoga that
allows adepts to rediscover the divine at the root of their
own minds by opening the heart. In the West, we usually
move about in a universe based on duality: In the begin-
ning, "God separated the light from the darkness" (Genesis
1:3). Itis essential to understand that Tantrism stands apart
from all separation between light and darkness, humans
and gods. It 1s non-dualistic. It considers the mind to be
fundamentally illuminated. Thus, the mind harbors all di-
vinity. It 1s the source from which all 1s born and to which
all returns: all phenomena, all differentiations, all mythi-
cal and divine creations, all sacred texts, all teachings, all
illusory dualities.

The work of tantrikas, Tantric adepts, 1s thus to dispense
with the illusory obscunties from which the ego, which ongi-
nated these distinctions in the first place, arises. They then
realize the nature of their own intrinsically pure minds. In
dualistic thought, we imagine God outside of ourselves and
direct our desire for union toward the exterior. In non-
duality the quest is reversed. Mystic energy is directed to-
ward the interior, toward the mind. To realize the nature
of the mind 1s thus the highest accomplishment. From this
perspective, the passions are no longer considered antago-
nistic to mystical life. Their energy is used directly by the
tantrika, and it 1s in this great conflagration that ardor dis-

solves the ego.

Needless to say, the widespread image that reduces
Tantrism to vague sexual techniques meant to miraculously
liberate their practitioners, under the guise of spituality,
has nothing to do with Shivaism. Such practices - ineffec-
tual, since they are not based on true yoga asceticism, which
depends upon the triple mastery of the breath, mental
emptiness, and bodily processes - are, at best, only harm-
less deviances, not so harmless if manipulation 1s involved.

Tantrism 1s a way of total love, which leads to the free-
dom to be. It 1s through this story of my encounter with a

oreat yogim and her teachings that I invite you to share
this marvelous experience.
Her dark skin perfumed and oiled, the vogimi seemed to
float in space, her legs pulled up into Vs on either side of
her body, her expression illuminated. Her open sex, where
all originates and returns, radiated golden light, which met

the blue of the sky. I remained fascinated, seated silently
next to the Chinese yogi who had welcomed me into his

hermitage. The yogini, his companion, at the same time
close and distant, body and spirit, power and gift, steady
in her yoga posture, was the incarnation of the extraordi-
nary potential of realization.

The yogi practiced both Tantrism and Ch'an, or Zen, of
Chinese origin, following the example of the sixth-century
Indian master, Bodhidharma, heir to the two lineages. The
twenty-eighth patriarch after the historical Buddha, and
the first Patriarch of Zen, Bodhidharma arrived in China by
sea and established himself in the famous monastery at

Shao-lin, where he spent nine years meditating in front of
a rock wall before transmitting the dharma (the doctrine)
to Hui-k'o, the Second Chinese Patriarch. The dialogue be-
tween Bodhidharma and the Chinese emperor Wu of the
Liang dynasty, a defender of Buddhism who was left puzzled
by the laconic responses of the First Patriarch, 1s still well
known:

"What merit have I gained by supporting Buddhism and
building so many temples?”

"None."
"What 1s the highest meaning of the Sacred Truth?"

"Nothing 1s sacred. All is void."

"Who is this who is facing me?"

"IT don't know."

The doctrine of Bodhidharma has four tenets:

direct transnmssion, over and above the Buddhist
scriptures,

a foundation not in the texts but in the experience of
Awakening,

revelation to each individual disciple of the nature of
his or her mind,

contemplation of one's true nature, which 1s the
Buddha nature.

We can see that these four main points correspond to
the teachings of Tantric Shivaism, which are their source.
At the time of my departure, my host gave me a copy of
his commentary and translation of the Vijnanabhairava
Tantra, one of the most ancient and profound ofthe Tantric
texts, held in high esteem by the Shivaites. Tlus Tantra gave

me my first glimpse of the goddess and the way that led
me to meet my master, the Shivaic yogim Devi, seven years
later, on the other side of India.

My interest in Buddhism, Hinduism, and Tantrism had
declared itself very early. As a Protestant student in an aus-
tere abbey at the foot of a high rock wall, I had discovered
and become fascinated with the splendors of religious ser-
vices, where I sometimes served in a crimson vestment
trimmed with lace. A resident bishop, a fabulous treasure
eiven to the abbey by Charlemagne, a fantastically talented
organist, and an excellent choir of winch I was part capti-
vated me from the start. Very strict studies and 6:30 mass
every morning, followed by half an hour of work before
breakfast did what was necessary to build character. Corpo-
ral punishment was still practiced - an assortment of van-
ous tortures like kneeling for an hour, arms crossed, a dictio-
nary on each hand. Sometimes the periods of free time were
replaced with interminable hours of copying out the texts of
Latin authors or pages from the Petit Larousse. At mght, the
huge dormitories were crossed in silence; strange meetings
took place on the roofs, where we went to smoke and talk
about love. In such places there was terrible loneliness, a
sometimes unbearable lack of affection, suicide attempts,
forced vocations, bloody fights from which I still have scars,
and sordid stories of love. Nevertheless, the excellence of
the teachers; their devotion; the personality of the director,
who charged around on lus motorbike, cassock billowing in
the wind; and the general atmosphere of the place had me
seduced.

In that same period of my life, a friend of my parents, a
beautiful and rebellious painter who looked a bit like Ava
Gardner and drove a red Alfa Romeo, began to encourage
my passion for art in general and painting in particular. On
her advice, I applied myself to painting and drawing. I re-
turned to Geneva, where I was born, to continue my stud-
ies at another religious college, a much less strict one, even
though one of our teachers loved to pass "the dynamo" to
us - a device that could explode powerfully, though it was
supposedly harmless.

Iwas able to return home to my parents each weekend. I
took those opportunities to visit my mentor and talk to her
for hours about painting and music and literature. I was
madly in love with her. For my sixteenth birthday, she took
me out to dinner alone at a luxurious restaurant. Seated in
big comfortable chairs, we dined by candlelight. I thought
only of how I was going to declare my love for her. That
evening, she gave me the Bhagavad-Gita, one of the key
Hindu texts, with a commentary by Sri Aurobindo, a great
sage profoundly influenced by Tantrism. This "spiritual" gift
only fanned the flame, and my heart began to resemble one
of the three lotuses printed on the saffron dust cover of this
highly regarded collection, many tides of which I would go
on to discover. As for my passion, it remained a secret. As
consolation, Iwas later given access to The Divine Life in five
volumes, the master work of thus great Indian plulosopher.
Then, still secretly in love, I received the three volumes of
Essays on Zen Buddhism by D. T. Suzuki. My only passion
now was to become a mystic. The priests came to my aid.
Twice they confiscated my works by Aurobindo, which I
immediately repurchased. Without them, would I have clung
to these difficult books with so much tenacity?

Some time later, my love urged me to enter my work in
the competitive examination at the Roman Academy of
Fine Arts, and I won a scholarship. In Rome, I finally ex-
perienced love with a young actress, a member of the
Carmelo Bene troupe. It was also there that I tasted total
freedom in the marvelous ochres, the gardens, the foun-
tains, the scent of pine and eucalyptus, and the heat of
the crowd where artists from all countries passed each
other. This was the life I'd dreamed about all those cold
nights during the years of boarding school in the cramped
atmosphere of a country I felt had closed in on itself.

Of course, I'd brought with me my favorite books, com-
pletely dog-eared, and tried in vain to reconcile a marvel-
ous, frenetic life with the lessons of wisdom of the great
Zen masters. I experienced a violent and destructive pas-
sion and then a more harmonious love. I left Rome to settle
in Sperlonga, a small white village that rose above the sea,
and, neglecting painting for a bit, I began to work on my
first novel.

On leaving the Academy of Fine Arts of Rome, I met the
art editor Albert Skira. Fascinated with Tibetan painting, I
proposed a book to him. Skira, touched by my enthusiasm,
which was equaled only by my ignorance, had me take

some art photography classes, and, thus equipped with what
Ineeded, I started on the route to India to photograph paint-
ings. I had even decided to find a way of reconciling my
fantastic appetite for life with the practice of wisdom, which
reading alone had not done for me and which kept me in a
state of constant imbalance. My impassioned sensual thirst
could not achieve equilibrium with my spiritual aspirations.
I was constantly torn by the spinit/flesh duality, and I didn't
see how to arrive at this seremty that completely fascinated
me, being so deeply rooted in the reality of life. I didn't

8
seem to have the soul of an ascetic. I couldn't see myself
living in a cave. I wanted everything; beauty, art, flesh,
emotional intensity, love, sensuality, and spirituality. It
seemed to me that our system of Western thought, based
on separation, sacrifice, original sin, gwlt, and suffering,
could not answer my expectations, in spite of the glimmers
of brilliance I had discovered among the pre-Socratic Greek

philosophers and among certain Christian mystics.

In the autumn of 1968,1 arrived in the green foothills of
the Himalayas. I was twenty-three years old. I was looking
for a master who could help me penetrate where texts and
intellectual searching could no longer guide me. I was look-
ing for a way that no longer divided aspirations and com-
partmentalized quests, a way to use the fabulous energy of

passion reconciled, finally, with the divine.

I had naively allowed myself all of a year for intense
practice, and I had decided to let the Shakti guide me to
the one who would help me penetrate the heart of the
Tantric doctrine. Little did I suspect that this itinerary would
take twenty-five years of asking questions, of dreams, of
practice, of failures and successes, anguish and joy, and
then finally of abandonment, which, without warning, in
1993, would emerge into what I no longer imagined pos-
sible: imitiation into Mahamudra and the opening of The
Heart.

Mahamudra, or "Great Seal,” 1s the last imtiation of the
Kargyupa school of Tibetan Buddhism, over the course of
which the master presents to the disciple the nature of hus
true mind and transmits to him the power of immediate
realization. If the operation succeeds, it is a non-way

(anupaya) as opposed to all the gradual stages and

0
preliminary initiations. Once the nature of the mind 1s re-
alized, there is no longer any duality and thus no way to
pursue, no end to attain, nothing more to do than to let

things be by keeping the mind in 1ts natural state - at peace,
awakened, divine.

10
From those first weeks in the Himalayas, I sent off test film
of my photographs of Tibetan art, which my editor found
satisfactory. What remained, then, was to penetrate the mys-
tery of this type of painting and to account for its profound
meaning. For that, I would need to meet the masters.

A long pilgrimage had me traveling up and down a good
part of the Himalayan chain, going from monastery to mon-
astery to photograph the most beautiful paintings, sometimes
walking for a week or two to reach isolated spots. Lattle by
little, I penetrated the extremely rich and subtle symbolism of
this magical cartography, which mapped the states of con-
sciousness traversed during the course of different forms of
meditation. It was now necessary to leave the field of theory
for practice.

After six months of hard work, I decided to go back down
to New Delhi to entrust the fruits of my labor to a diplomat,
who would deliver it by hand to my editor. I would then have a

11
good year for writing the text, and, with the photography for
the book behind me, I planned to follow the teachings of some
great Tibetan master. My imtial work had given me opportuni-
ties to meet with the hughest authonties of the various schools.
Now Ineeded to go back to see those who had left the greatest
impression and ask one of them to take me on as a disciple.

Just before my train entered the Dellu station, the power
was interrupted and the lights went off for a few minutes.
When they came back on, I realized that my suitcase of
film and my camera had disappeared. In a state of shock, I
filed a complaint with the station police and launched into
a desperate search.

Furious and worn out, I spent the might hunting through
all the nearby garbage cans, questioning in vain those who
slept on the street, in the hope that the thief had abandoned
my film bag. I thought about those long and difficult treks,
about the marvels I had uncovered, and, occasionally, about
the cost of enduring patience. Here were hundreds of kilome-
ters I'd crossed by foot, countless meetings, and hard-won
permissions, and above all a treasure of many thousands of
negatives, vanishing forever. A band of shrewd, resourceful
street urchins who knew their way around came to my ad,

and I promised them a big reward. Dawn armived, and not the

least trace of the film had been found.

Bitter and disappointed at watching my big chance to
publish a book with a great editor disappear, I decided to
stay in Dellu for ten or fifteen days. The first thing I did
was take a room with a bath in a luxury hotel in Janpath to
taste a pleasure I hadn't known for months. I had bathed in
rivers, sacred and otherwise, 1n streams and lakes, but not

once in a bathtub. By this time, I was wearing several

12
protective cords around my neck from all my meetings with
lamas and ninpoches. I ran the bath very hot and, quiver-
ing with pleasure, slipped into the deep, claw-footed tub.
Immersed so suddenly in the hot water, the cords began to
shrink, and it was only by pulling on them with both hands
that I escaped strangulation by too much protection. It was
a rough landing, very Tibetan in substance, and sigmfying
perfectly the impermanence of things.

Impermanence 1s one of the basic concepts of Buddhism.
Everything 1s destined to come to an end or to change in
nature one day or another. As everything is interdepen-
dent, lacking in intrinsic reality, and void, it 1s necessary to
eround oneself in that which 1s without characteristics:
Awakening. This is not a pessimistic concept of life but, on
the contrary, a powerful antidote to illusions. Perceiving
clearly the impermanence of all phenomena blossoms into
a kind of consciousness that keeps the world from becom-
ing static. That evening, the impermanence of my own life
had become more than just a concept.

Beginning the next day, I drowned my disappointment
over so much lost effort in the swimming pool and in the

arms of two young Americans I encountered in the historic
flophouse of Miss Colaco, on Janpath Lane - a guest house
through which all the stars of the Beat generation filed, its
poets known or unknown, its muses and vamps, as well as a
cood portion of those European and American dreamers
caught up in the spiritual whirlwind of Berkeley, the great
wave of American university protests, and the aftermath of
May 1968.

At Miss Colaco's one found an incredible ethnic and cul-

tural mix, a motley gathering totally in the thrall of Tantric

13
fever reduced to its simplest expression: wildly liberating
sexuality. Ginsberg and many of the other American poets
had left their mark. The muses recited to audiences simul-
taneously entranced and distracted by hashish, then spent
amorous nights in endless ecstasy with hairy gurus, lamas,
and yogis. Black Bombay, an explosive mix of hashish from
Afghanistan or Kashmir and opium, came to their aid. Ev-
erywhere you looked, you saw levitation, travels into past
lives, altered consciousness, reincarnations, mad egos de-
voured by demons in the Tibetan rite of tcho, mysterious
orgies in the forests, awakemings and trances, and light-
ning surges of kundalimi, that mystical energy from the

depths, represented by the figure of a serpent coiled at the
base of the spinal column.

A Californian recounted how she had made love with a
tiger-ascetic during the time of Buddha; an Italian poet told
of his spontaneous illumination at the sight of Mahansht
Mahesh Yogi crossing the Dellu airport. In this base camp

of enlightenment, one learned what route to take to
circumambulate Mount Kailash in secret, as well as ways

of encountering the members of the secret brotherhood of
the Deva Dasi, or the "servants of God," comprised of
women poets, musicians, dancers, and imtiates of sacred
sex. They still officiated in a few temples, claimed certain
people, who would then offer to give you the names. In
their arms, you could attain total knowledge of that ec-

stasy carved in the stone of Khajuraho or Mahaballipuram.

One exchanged a Frank Zappa tape for the address of an
opium den in ancient Della, a passport for the name of a
Nepalese shaman with extraordinary powers, a night of love
for the transmission of a mantra, those ritual formulas by

14
which the meditator tapped into certain cosmic forces. Ev-
eryone meditated, entering the deepest trances, stamping
their feet impatiently at enlightenment's door, trying to
penetrate its inner chambers. Partisans of Hindu gurus en-
caged in long oratorical debates with those dedicated to
Tibetan masters, and night met dawn in a sleepy daze.

A Swiss guest had not come out of samadhi for twelve
days. The gopis, celestial milkmaids loved by the gods, went
to tempt hum or bring him feasts. Some tried to protect
him; others shouted insane talk in lus ear. The Swiss re-
mained in lus great catalepsy while Miss Colaco observed
all this mystical agitation with a weary and scrutinizing
regard, waylaying the secret guests as they passed and, to
please them, pretending to believe their thousands of sto-

ries about vanished checks and phantom credit transfers.

The Kama Sutra, the classical treatise of Hindu mystical
eroticism, held no secrets for anyone, and through the dor-
mer windows you could witness the most amazing cou-
plings of its Tantric hopefuls or join in happily yourself,
during that astonishing time when only benign viruses came
to stay at Miss Colaco's.

Fifteen days of assorted dealings in this mystical bazaar
put me back on the road again to Kalimpong, where I re-
visited His Holiness Dudjom Rinpoche, a gentle man, im-
pressive to look at, hierarch of the Nyingmapa yogis and
great master of d-ogchen, a practice that consists of spon-
taneous recognition of the nature of one's own mind apart
from any concept or dogma. D-ogchen is very close to the
Mahamudra ofthe Kagyupa school, which has felt its influ-
ence. D-ogchen, for its part, has been subject to the joint

influences of Ch'an and of Shivaic Tantrism, of which the

15
principle doctrine, Pratyabhijna, means literally "to spon-
taneously recognize the nature of one's own mind or Self”
These four schools are of the "sudden" doctrine type and
are described as anupaya, or non-ways. They are the out-
come and quintessence of yoga and Tantra.

I had hoped to study with Dudjom Rinpoche, but the police
only allowed foreigners a three-day visiting pernut. This great
master sent me to one of the most impressive Kagyupa lamas,
Kalou Rinpoche, who mainly transmitted Mahamudra and
stayed in a more accessible region.

Some days later I arrived at Sonada, where the infinitely
kind expression of Kalou Rinpoche put me back in touch
with spiritual reality. My nusadventure, the loss of my work,
was high comedy for the lamas. The monastery rocked in
the throes of collective laughter. Kalou Rinpoche told me
simply that the moment for publishing such a book had
been premature. Faced with this reminder of imperma-
nence, I could direct myself, under his guidance, toward a

deeper comprehension of the nature of my own mind.

Karma - that 1s, action as well as its weight and conse-
quences - had put me directly back on the path, thanks to
the intervention of a thief. All my spiritual adventures had
been caused by the theft in Delhi, and without it, I would
probably have missed my greatest chance. With time, my
hatred for the thief turned into acceptance and then into
deep gratitude. A few weeks later, Kalou Rinpoche gave
me my dharma name, Karma Sonam Tcheupel: One who is

blessed by karma and who can seize the way.

The months that followed were devoted to intense prac-

tice. I took in the daily teachings of Kalou Rinpoche as a
first initiation. I passed most of my time in Rinpoche's rooms

16
or nestled in the pinnacle of the Sonade temple, among
sacks of grain, traiming myself to visualize the mandala of
my tutelary divinity. By successive absorption and dissolu-
tion, this meditation technique allowed one, over the long
term, to experience emptiness of the mind.

I evaded the Indian police, who, because of border
troubles with China, reduced foreigners’ stays in this re-
oion of India to three weeks.

When I was finally arrested and conducted to the state
border in a military jeep, I left for Dalhousie, where Kalou
Rinpoche told me he would be coming soon. I waited
two months, submerging myself in my copy of the
Viijnanabhairava Tantra. One beautiful morning, after be-
ing forewarned by a dream, I started down a long dirt road
and saw coming toward me on horseback, surrounded by hus
monks, Kalou Rinpoche. He stopped his horse and placed his

hand on my head for a few seconds. I was bathed in light.

After a grand reception in the main monastery to the
sounds of trumpets and conch shells, I accompamed him
up to the little mountain hermitage where he would give
the final teachings of Mahamudra to five yogis. They all
arrived the same day, no doubt forewarned as I had been.
Some had been walking for many weeks, their long hair
rolled up on their heads serving as a sanctuary for a num-
ber of jumping parasites. With their extraordinarily intense
regard fixed devotedly on Kalou Rinpoche's thin silhou-
ette, the yogis followed each inflection of lus soft and vi-
brant voice. Like them, I was totally absorbed in the power
of the transnussion without understanding its sense. I was
not to receive this last initiation into Tibetan Buddhism

until many vears later.

17
All the same, a trip to Nepal allowed me to bring back,
along with a borrowed camera, a book, The Tantric Sculp-
teres of Nepal, which Christian Bourgois had published with
Rocher Editions.

On the advice of Kalou Rinpoche, very impartial in his
approach to the diverse mystical paths, I was on my way to
Thailand, to a monastery where a particularly interesting
form of meditation was practiced. I learned to concentrate
on a luminous pearl located an inch below the navel and
by doing so pass through, one by one, the veils of conven-
tional illusion. As my place of residence, the abbot had as-
signed to me a wonderful little temple in the middle of a
luxurious garden. Also staying there were a half-dozen Japa-
nese Zen monks who had come to be imtiated into thas
Small Vehicle practice on the advice of their masters. The
universal spirit of Kalou Rinpoche was open to the prac-
tices of different schools, and knowledge of them seemed
important to him. Thus, he stood apart from the quarrels
among Tibetan sects, focusing on the origins of Buddhism;
Hinayana, or Small Vehicle; Ch'an; Taoism; and Indian
Tantrism as well.

It is to this open-mindedness, right from the beginning

of my sadhana, that I owe my recognition of the links and
affiliations that exist between Tantric Shivaism,

Mahamudra, d-ogchen, and Ch'an. In the last three or four
years, this relationship has become fertile ground for many
researchers and academics.

Then, still following Kalou Rinpoche's recommendation,
I found myself in Kyoto with a master of the Rinzai school
of Zen, founded by the great master of eleventh-century

Ch'an, Lin-chi. My journey ended in Honolulu, where a

18
Taoist master, alerted by Kalou Rinpoche, was waiting for
me at the airport. This strange man, dressed in a stained,
threadbare black robe, wove his turquoise Impala in and
out of the traffic as if it were a matter for Lao-Tzu's black
ox. From him I learned the art of circular breathing, which
passes through the heart, and the posture in which the left
thumb is held in the right hand, particularly stable for long
meditations. When it was tume to go, I got one more taste
of lus humor:

"When vou are back in France, behind the steering wheel
of your car, you must realize that you are not somewhere
other than in the Tao."

His guttural laugh was lost in the hubbub, his faded robe
blending into the orgy of colorful skirts, loincloths, and
Bermuda shorts.

I did not forget his advice as the years passed and my
practice was interrupted with dark times and doubts. Then,
between 1972 and 1975, I undertook a series of journeys
in the northwest of India, deternuned to follow leads I'd
cotten on my previous trips and find a great master of
Kashminan Tantric Shivaism.
The next three journeys led me to discover the sublime
Himalayan landscapes of Jammu, Kashmir, and Himachal
Pradesh, as well as a good number of "sages," hermits, and
charlatans, without a single decisive meeting taking place.

To come into direct contact with Shivaic Tantrism 1s
nearly impossible. The first reason for this difficulty 1s linked
to the persecutions imposed upon Tantrism by various in-
vaders: the Aryans, the Islamics of the Middle Ages, and
then the English Puritans of the colomzation. The second
reason is linked to the secrecy that surrounds masters and
rituals.

From the time they first arrived, the invaders showed
strong opposition to Tantric Shivaism, which finds its
strength in being rooted in worship devoted to the Great
Goddess. A warlike society cannot tolerate a culture for
which the female 1s so central, as both origin and way of
enlightenment, master and imtiator. Tus goes against all

20
that Puritanism and other invading forces stood for.

In Shivaism, the female embodies the power; the male,
the capacity for wonder. Many of the masters were, and
still are, women. Certain lineages are transmitted only
through women, and, as an adept, the woman has greater
credit than the man in terms of power, courage, and depth
of vision. The texts clearly state: "What a male tantrika
realizes in one year, a female adept attains in one day," as
if, all by herself, she 1s naturally rooted in all that makes up
the forgotten substratum that the great ancient religions
have in common. From the Celts to the Dravidians of the
Indus valley, from Egypt to Babylon, the basis of the hu-
man psyche is entirely woven out of the divinity of the fe-
male. The various surges of the hordes, often less barbar-
ian than they say, and bearers of great cultural forces, skills,
and knowledge that breathed new life into Hinduism and
allowed the arts their marvelous flowering, never succeeded
in subduing this mysterious feminine power, still alive to-
day in Tantrism.

No moral discredit whatsoever mars the woman. Far from
being the source of sin, temptation, and damnation as in
the three great monotheistic religions, as well as in certain
tendencies of Hinduism and Buddhism, she is, on the con-
trary, the power and force for transmission of the highest
mystical teaching.

These feminine values, which give a unique and very
contemporary air to Tantrism, can be defined briefly as deep,
harmonious, and peaceful strength as opposed to violence.
Spontaneity and openness as opposed to artificial moral
order, hypocrisy, Puritamism. Non-duality which restores

completeness to being human by locating the divine within

21
the self. Liberalism, tolerance, direct experience of nature
fundamentally free from thought, as opposed to the vain
speculations of religious sects and intellectuals. Love as op-
posed to sexual exploitation. Respect for nature as opposed
to frenzied depletion of its resources. Absolute freedom with
regard to dogmas, the clergy, the state, the caste system,
and the social, religious, dietary, and sexual taboos of classi-
cal Hinduism dertved from Aryan Vedism. All these values
denive from unconditional respect for each human being's
freedom, which Tantrism proposes to rediscover without

getting lost in an external, illusory quest.

An important segment of society today realizes that we
must return to these values or else suffer chaos and de-
struction. The Tantric way 1s open to all the richness of
human nature, which it accepts without a single restric-
tion. It 1s probably the only spiritual path that excludes
nothing and no one, and, in this way, it corresponds to the
deep aspirations of women and men today. Those who ac-
cept the marvelous recognition of female power and the
feminine part within themselves, source of richness and
continual development, no longer have a position to de-
fend in the war between the sexes. They have integrated
this recogmition and gone beyond the persistent duality that

impedes all deep progress.

Seven thousand years* of a continuous Tantric tradition
includes an incredible art of concealment from the "for-
eigner." This prudence has always existed. In northern In-

dia, Tantrism 1s everywhere, but the closer one approaches

*The most ancient texts date fom 5500 BC. See Alain Danielou, While fhe
Gods Play (Rochester, Vt: Inner Traditions International, 1987)

22
it, the more invisible it seems. Many times I've had the
sensation of being in the vicimty of a gathering place, brush-
ing up against a master or an adept who could have guided
me, but invariably the "Tantric filter" was put in place and
I found myself alone, in the middle of nowhere, incapable
of knowing at what point I was the victim of disinformation
or of a joke - variations in a thousand-year-old protection

system. After all, wasn't I myself only a new type of in-
vader? Why should the doors be opened?

Shivaic Tantrism does not depend upon the West for its
survival. Its masters still don't respond to the West's desire
to import it, nor to Western curiosity, nor to its lures of
profit. Tantrism 1s not afrmd of any political power, any
wave of lustory. The flame always flares up again; the teach-
ings reemerge, even after the darkest periods.

One of the difficulties in encountering a master comes
from the fact that traditionally Tantrism develops in the
countryside, in the forests, in isolated places. Large gather-
ings are rare. Adepts establish themselves in the country,
and the uninitiated, even if they think they know of a mas-
ter, are generally afraid to pass along this information. Popu-
lar belief, with the aid of classical Hinduism, attributes to
Tantric sages all sorts of evil powers and demonic prac-
tices. How could it be otherwise for a mysticism that holds
the woman in such high esteem? That recognizes no castes,
or any of the social, dietary, or moral taboos to which the
Hindus subject themselves?

After thousands of kilometers crossed by bus, in a jeep,
by foot, or on the back of ponies, after hundreds of bills
handed out for food, lodging, and information, I came to

the conclusion that Shivaic Tantrism would always elude

23
me and I should give up trying to encounter one ofits mas-
ters. Besides, how do you find someone whose name you
don't know? In Shivaic Tantrism, to speak or write the name
of one's master 1s forbidden. Sometimes I found myself in
front of an abandoned hut, an empty cave, or a village idiot
who had been pointed out to me as a sage and who could
very well have been one. I would understand much later
that the appearance of the fool is one of the tantrikas' fa-

vorite disguises.

Then, on my fourth journey, after several fruitless at-
tempts, I decided to abandon my quest, to forget about my
Bartholomew map covered with red circles and mysterious
routes. I could no longer continue accosting the faithful
who, at dawn, went to leave an offering or a bouquet of
flowers at the black stone linga (phallus) of Shiva, symbol-
izing the destruction of illusion, erected on a pedestal in
the form of a vulva, or yoni, emblem of mysterious cosmic
power. I could no longer follow the steep paths of the na-
ked ascetics smeared with ashes, and risk having myself
impaled on their iron tridents, sign of Shiva and symbol of
the subtle channels that cross the yogis’ bodies. I had no
more money to pay "informers," my feet couldn't bear any
more blisters, and I'd had enough of finding myself once
again, come evening, in a clearing or under a new moon
where a Tantric ritual was supposed to take place. When I
asked any questions about Tantrism, nearly always the re-
sponse was "What?" as if it were a matter of the latest ad-

vance in physics.

From Manali to Sonarmarg, Himalayan routes and paths
held no more secrets for me. The last Slhivaic master was

supposed to live at the summit of Mount Kailash, the very

24
place where Shiva had reappeared to give the secret teach-
ings to the people of the Kali Yuga, or the dark age, of
which I had not seen the beginning (about 3600 B.C.) and
would not see the end (about A.D. 2440). Nevertheless, the
sages say that Tantrism corresponds exactly to the needs,
capacities, and hopes of the beings of this period.

One day the bus stopped. Two women got off, one of
them carrying a rooster by the legs. There was no village in
sight. Without even thinking, I shouted to the driver to open
the door again. Not a minute longer did I want to be on
this bus with all its bolts rattling, as, under the apparent
control of its Sikh driver, it hurtled down the slopes of the
Himalayan foothills at breakneck speed. Once the bus de-
parted, I found myself in a refreshing silence. The women
climbed a path and chatted, the rooster protesting. I fol-
lowed them. There had to be a village up there.

Half an hour later, I arrived at 1t. About thirty earth houses
were spread out over a large plateau. A river meandered
nearby. This seemed to me the ideal place to rest and for-
get about Tantrism. An adolescent approached me; I knew
right away that I should trust him.

"Hello Sahib; my name 1s Ram. Can I help you?"

I asked him to find a house for me to rent for several
weeks. He tracked one down for me, at the edge of the
village, near a splendid banyan tree at the foot of which I
discovered several signs of Shiva: his linga firmly embed-
ded in the yoni of his Shakti; a small bull, Nandi, their
favorite medium; and several garlands of flowers as well
as some pastries. One of them was decorated with a fine
coat of pure silver that the air made quiver. A village woman

paid me a visit. The cottage suited me perfectly. A charpoy,

25
a wood box tied with cord, a small hearth on the hard-
packed earthen floor, a corner for washing. Twenty square
meters of perfection. I was asked for thirty rupees for the
month, and, as soon as the transaction was completed, a
blanket, a jug of potable water, an armful of wood, a bowl
of yogurt, four potatoes, an onion, a tea bag, a saucepan, a
little oil, some matches, salt, and a kettle were brought in,
with the discreet efficiency vou find throughout India as
soon as you leave the beaten paths.

As all the village children came by, one by one, to stick
their heads in the doorway, Ram helped me light a fire and
watched, fascinated, as I opened my backpack. I put my
sleeping bag on the charpoy, my many books and my note-
book near the bed. I offered him a tin box of Indian cheese,
and he took me visiting in the village, proud to present me
to the doctor and his wife as well as to the other inhabit-
ants, who regarded me with astonishment. What could a

stranger be coming here to find?

After briefly summanzing my life to about twenty of the
curious, I answered the urgent, charming questions of those
lively, gracious children and adolescents. Then I returned
to the calm of my little house. Ram sold tea with milk and
ginger root in delicate little goblets of sun-dried earth that
were thrown away after use, their crumbling material re-
turned to the ground. Each morning, Ram brought new
goblets. Thus we took up the habit, come daybreak, of
warming ourselves by his fire, drinking and watching the
frail silhouettes, draped in shawls, leave the fog nsing off
the river, and come, shivering, to search out Ram's ener-
gizing brew. I felt relieved at having abandoned my quest,

and I used my morning wake-up ritual for meditating,

26
wrapped in my blanket, before going to drink tea, taking
along a few coals for Ram's fire. With great digmty, the
youth made use of a large sieve in which could be found all
the tea served since daybreak. For each new client, he added
a pinch of fresh tea.

I forgot about Tantrism so well that I spent a good part
of my days walking along the river and in the forest, often
accompanied by Ram, hand in hand, as 1s the Indian cus-
tom. Sometimes I was accompanied by the other adoles-
cents with their large, dark eyes and long black hair. Deli-
cate, dignified, free, and modest at the same time, they
stretched toward the sky in that very beautiful posture that

comes from habitually carrying jars and packages on one's

head.

Ram had a friendly nature. He was curious and lively,
and knew everything despite his young age. A deep friend-
ship grew between us, nourished by his vision of life and las
hopes, desires, and fears. He absorbed information with re-
markable intelligence and already possessed that calm ath-
tude toward things that comes only with time. One by one,
he helped me get to know all the inhabitants of the village,
where I could soon go from one house to another as though
I'd been born there.

Sometimes, in the evening, I would go to talk with the
doctor who owned the only stone house in the village. Re-
tired for a few years, he practiced ayurvedic medicine and
continued to treat the villagers.

I learned how to make yogurt. My proximity to the ban-
van tree and the Shiva where delicacies were left some-
times let me take advantage of those offerings deposited

by women in sumptuous saris, their strong vibrant colors

27
shimmering in the morning light. The smell of incense en-
tered the cottage. I went to bathe in the 1cy water of the
river. I read and reread the Fijnanabhairava Tantra and
practiced assiduously and regularly to the point of reach-
ing that state again that I had known at the end of my first
vear of continuous practice - that state in which one de-
sires only one thing: to remain in meditation for hours,
unmoving, as if fixed in the center of space; full of warmth,
energy, openness; breathing deeply, regularly, and silently -
the mandala, constructing itself before you as if projected,
each detail intensely present, the mantra flowing like a ver,
the phases of absorption following from one another
smoothly until the final void.

I used this particularly beneficial period for practicing
curu yoga and for visualizing Vajradhara, the Tibetan di-
vimty who represents the spintual master and whose blue
body appeared effortlessly, framed in empty space, facing
me. For the first time, I succeeded in practicing dream yoga
regularly. This form of yoga allows one to become conscious
of dreams and to enter meditation, thus replacing the dream
with the mandala or directly with non-dualistic contem-
plation. When I awakened, this meditation left a sensation
of great freshness, of deep rest free of the anarchic activi-
ties of consciousness; the mind was lucid and open.

Soon I was laughing at my frenzied Tantric quest and
tasting the simple pleasure of being in this lost village,
of walking and of meditating in total tranquility. Kalou
Rinpoche had often spoken to me ofthe peace that comes
with abandoning effort, tension, and the desire to attain
something. Now I experienced it daily. Each act of liv-
ing - rising, drinking a cup or two of tea, eating a little,

28
following the course of the turquoise water, entering the
forest, reading a sutra, walking hand in hand with a
happy vouth under the starry sky - brought me incom-
parable joy.

One day, following the nver upstream for a few hours, I
came to a sort of basin, very deep, with a waterfall four or
five meters high. The spot, strewn with large rock polished
by the nver's high waters, was wonderfully peaceful. All
alone, I burst out laughing and took a swim in the deeper,
darker water of the basin before drying myself on a warm
stone. The place was dominated by a twelve-meter chiff
and a thick forest. I fell asleep in the sun. When I awoke, I
had the strange sensation of being watched. I looked all
around and listened without seeing a living soul.

One couldn't reach the top of the chff directly without
going back down the river to a steep trail with a difficult
access. I decided to climb up to explore the edge of the
forest.

Once there, I discovered a hillock from which I could
enjoy a splendid view of the river, the waterfall, and the
neighboring hills, which were almost lost in the golden light.
I took a few steps into the forest, and there I discovered a
hut, abed of grass, a hearth with warm cinders, a terracotta
pot, a few white garments, a faded blanket, some black-
ened cooking utensils, and a bowl made from the top of a
human skull, its rim set with silver. All of a sudden, I imag-
ined an ascetic threatening me with lus trident, and I hur-
ried out of there.

All the way back, my imagination was in a state of agita-
tion far from meditative. I ran the last hundred meters, 1m-

patient to talk to Ram about my discovery. He was waiting

29
for me, peacefully seated on the stone-lined pedestal of
the banyan.
I told lum about my excursion and his face darkened.
"Don't ever go back to the waterfall! That woman is very
dangerous! She killed a man last year. They fished his body
out of the river. She eats the dead. She 1s a tantrika!"”

30
I slept very little that might, haunted by the idea that a
Tantric yogimi was living nearby, a few hours away by foot.
The description that Ram had given me was hardly en-
couraging. I thought about the man found dead in the nver.
The fact that Ram described her as a devourer of dead bod-
ies impressed me less, that being a cliche often found in
Tantric literature. I imagined a thousand ways of approach-
ing her, of trying to see her, and of convincing her to accept
me as a disciple.

I was the first one under the banyan. Ram came to light
lis fire, and wlile he warmed the water and the nulk I
bombarded him with questions about the yogi.

"How long has she been living near the waterfall?”

"A little over a year."

"Have you ever seen her?"

"She 1s a monster. The eyes of a crazy person, a huge red

tongue that hangs out of her mouth, drops of dried blood

31
on her belly, hair all disheveled. Some ofthe villagers have
seen her. At might she walks through the forest with a big
knife and kills animals to drink their blood. No one goes
to the waterfall anymore since she moved there. It's very
dangerous!”

Ram tried to imitate her by making a horrible face and
sticking out his tongue.

"Is she Indian?"

"No, she's a sorceress from Tibet who came down out of
the mountains."

"Nobody goes to visit her?"

"Sometimes some yogis come through the village. We
think they're going to the waterfall.”

"Tibetans?"

"No, only Indians."

"Then she must be Indian."

During this whole conversation, Ram avoided looking
at me. I sensed that he was tense, imitated, and distant. He
remained silent for a moment and prepared two cups of
tea, dark and fragrant. While we drank the piping hot lig-
wid in little sips, he said to me:

"If you are my friend, you must trust me. If vou go up
there, you will never return. She will kill you. She will eat
your liver and your heart. The rest of you will go to feed
the fish. You will have paid to rent this house and you won't
be in it anymore. I won't come to find you. If you want to
meet a guru, there's one near Srinagar. He's famous. He
has a beautiful ashram; people come from all over the world
to see him. He 1s a very good old man. If you want me to,
I'll take you there. Ask the doctor, he knows. Do you want
to take the next bus?"

32
"No. I want to stay here, to see this monster of the wa-
terfall from a distance. If she looks the way you say she
does, I'll come back down."

"You aren't the first one to want to meet her. The danger
is that she can make herself invisible, and when you get to
the waterfall, she can kill you before you even have time to
erab a rock."

I finished another cup of ginger tea, and, not very con-
vinced by Ram's descriptions, I decided to use this clear
morning to climb to the waterfall. I debated over what to
take. I didn't know whether I would succeed in seeing her,
much less in talking to her. After a few minute's reflection,
I put my sleeping bag, some tea, a few provisions, the blan-
ket I'd been lent, and my knife into my pack. Passing by the
banyan tree again, I waved to Ram, who didn't respond. I

took a garland of flowers given to Shiva as an offering to
his Shakti, and I was on my way.

With each step I tried to uproot the childish images that
Ram had planted in my mund. Nevertheless, the fact that
they had found a dead man in the nver made an impression
on me. I had approached enough nagas and Sluvaic ascetics
to know that they could be violent. Even the Indian police
gave up arresting them because their total indifference to
prison and their magical powers spread uncontrollable ter-
ror among the other inmates and sparked revolts. Nothing
could stop these ascetics, and many Western journalists who
tried to film them had had a hard time of it. I remembered
that a few of them had been tossed into the Yamuna or thrown
from a mirador at the Kumbha-Mela, one of the great reli-
gious gatherings, which sometimes assembles more than a

million Indians of all persuasions.

33
As soon as I regained the silence of the mountain, my
fear seemed to rise, like dough exposed to warmth. Each
attempt to reassure myself had the opposite effect. More
than once I asked myself whether I should turn around
and go back.

My curiosity was stronger, and toward ten o'clock I heard
the noise of the waterfall. I sat down and tried to work out
a method of approach. If I climbed directly to the hernmt-
age, I stood a chance of finding the yogini in her hut, but I
also ran the nsk of disturbing her and being very badly
received. If I went for a swim, alerting her, as it were, of
my presence without imposing, I ran the risk of no longer
finding her by climbing up to the hermitage.

I opted for a third solution: I approached within a hun-
dred meters of the hut, left my offerings of food and the
garland, made three great prostrations in the Tibetan style,
and retreated toward the waterfall, where I found a flat
rock for meditation. I wanted her to understand that I was
not motivated by curiosity, to show her evidence of my re-
spect, and to give her the opportunity to summon me in
one way or another.

Despite the stability of the posture, I had much diff-
culty in finding tranquility. I meditated for two or three
hours, swam, dried myself in the sun, and took up my medi-
tation again. At no time did I have the sensation of being
observed, as opposed to the first time. I stopped meditat-
ing toward the end of the afternoon. I was hungry, and
realized that I'd offered all my provision to the Shakti. I
was dying to know whether my offerings had been accepted,
and I climbed back up toward the esplanade.

Once there, I saw to my great disappointment that

34
everything was still where I had left it. T could barely make
out the hut, hidden by some trees, but I imagined that if
the yogimi was in there, she could see me. I made three
more prostrations and headed back toward the village.
About halfway, much to my surprise, I saw a very anxious
Ram waiting for me. Moved by his affection, I took him by
the hand and we went back down toward the familiar land-

scape of little houses, colorful sans, mouth-watering smells,
and the cries of children.

"If you truly wish to see her, you must offer milk, ginger,
rice, good tea, lentils, eggs, spices, incense, and a very beau-
tiful garland of flowers. Give me twelve rupees and I will
find you all that for tomorrow," said Ram, who understood
that I would not be discouraged.

We ate dinner together and I went to bed early, ready to
leave at daybreak loaded up with offerings.

I climbed more quickly and arrived in good time on the
esplanade, where I noted with satisfaction that my pres-
ents of the day before had vanished. I then deposited Ram's
various things, prostrated myself, and went back to medi-
tate on my rock. The journey had been more peaceful,
and my meditation was more profound, my mind more
relaxed.

I waited until the last hour to return to the village and
found Ram waiting for me in the same spot. He began to take
part in my quest and stamped lus feet with impatience be-
cause he had left out something. Again I gave hum some ten-
rupee notes with which he bought some matches, candles,
and a pure wool shawl. I admired the methodical manner in
which he foresaw the needs of a solitary ascetic, and I put my

entire trust in him.

35
This time again, the presents had been accepted. At the
moment when I was about to leave the garland of flowers
and my offerings, I saw the yogim standing at the edge of
the forest. She wore light clothes: jodhpurs and a tune.
Her long black hair was not tied up. Her facial characteris-
tics I couldn't see clearly because of the distance. I felt my
heart beating violently; I made three prostrations and ap-
proached. She remained immobile. Her face slowly became
visible, and I saw no enormous tongue, no bloodstains, no

wild, bulging eves. To the contrary, I found her bearing
free of flaws, open, beautiful, and noble.

As 1 stood before her she held me in her extraordinanly
brilliant regard. She had to be about forty years old but
showed little mark of the ascetic life. She was simulta-
neously light and powerful, close and distant. She wore a
red necklace decorated with small bells. Her look emanated
immense compassion, which her physical bearing, more
reserved, seemed to temper. I was astomished when she
addressed me in perfect English.

"Where do you come from? What are you looking for?"

"From France... I'm looking for someone who can open
me up to the understanding and the practice of Shivaism,
of kundalim yoga."

"I don't know kundalimi yoga."

"Aren't vou a tantrika?"

"What do you know about Tantrism?"

"A few years ago, a Chinese yogi gave me a copy of his
translation ofthe Vijnabhairava Tantra. I've read it often. I
even have it here with me."

"Show it to me."

I took it out of the top pocket of my pack, where I kept

36
notes and books. She flipped through it quickly, then gave
it back.

"The Chinese yogi is an impostor. This is not the
Viinanabhairava Tantra. But you haven't answered me.
What do you know about Tantrism?”

"I assume that in Tantrism there 1s a practice that leads
to entering into harmony with one's own heart and discov-
ering Shiva there."

"Tantrism contains none of this kind of sentimentalism."”

"And the sexual practices, do they exist?"

"If there were sexual practices in Tantrism, how could I
devote myself to it, since I've lived alone for sixteen years?"

"Perhaps by transcending them?"

"There 1s nothing to transcend in Tantrism.”

Suddenly, my mind stopped wandering. I felt myself
melting under her regard, and tears came to my eyes.

"I would like to follow your teaching.”

"Your emotions don't concern me. You have an idea of
what it 1s you're looking for. How can you find it? I can
oive you nothing. Return to the valley."

I took leave of the yogini in a state of intense emotion,
stripped naked by her look. I picked up my pack and took a
few steps backward. As I was turning around she spoke to
me in a gentler voice, with an indescribable smile.

"You are like a hunchback in the country. You imagine
that by leaving the town, no one will see your hump. For-
get how others regard you and truly consider your hump.
It 1s the most precious thing you have.”

On my way back down to the village, I was torn be-
tween the impression of complete failure and the hope of a

possible opening.

37
When Ram saw me arrive, he understood immediately that
something had taken place. Also, he greeted me, laughing:

"You walk like an old man!"

I straightened up, drank a few cups of tea, and gave him
an account of my adventure, savoring the delicious potato
fritters with curry and mustard seeds that his mother had
prepared for us.

I spent the days that followed caressing my hump and
realized that I could only present myself before the yogim
completely naked, without desires and without goals.

Each morning, I made offerings to the Shiva linga found
at the foot of the banyan, hoping that this stone phallus

would end up embedding itself in my heart and open it to
the dimensions of space.

38
S

When I went back up to the hermitage with a simple garland
as an offering, I felt full of confidence and joy. I found the
yogi meditating in front of her hut. I made a simple Indian
salute, holding my palms before my heart like alotus ready to
open, and sat down quite a distance away from her. Her eyes
were half closed. Grace, beauty and power emanated from

her entire being, as if the long years of solitary practice had
planted her in the ground, and her deep rooting allowed
branches to spread out harmoniously into space.

She opened her eyes. I greeted her again and approached,
holding out the garland of flowers, which she hung around
her neck.

"That's all that you brought me today?" she said iromcally.

After a few awkward moments, I bowed again, as if to
tell her: I bring my hump, I bring my heart. But I re-

mained silent because that seemed to me both naive and
erandiloquent.

39
"I will accept you on the condition that you reflect deeply
upon what I am going to tell you and that you take the
time to decide whether you want to follow this quest,” she
said, as if she had heard me.

Full of joy, I thanked her.

"Understand that this 1s a very deep commitment on
my part and on yours. Once on the way, there 1s no exit.
If you accept, it's a decision that must be maintained in
the most difficult moments, because if you give up along
the way, you risk deep trouble. I am proposing that you
make your way along a razor's edge. Once you start out,
you can't break into a run, or stop, or go back. The inju-
ries would be very serious. You can only continue at the
same pace. Sometimes you will revolt. You will have the
impression that I'm treating you as if you've never prac-
ticed, as if you know nothing. Your pride will be hurt.
You will think, I did thas, I did that. I have had so-and-so
a master, and this woman, who 1s she to treat me like
this? You will have doubts about yourself, about the way,
about me. You will be angry. Perhaps vou will hate me.
But me, I will always be there and I will wait for you to
calm yourself so that we can get under way again to-
gether. What 1s your name?"

"Karma."

"In Tantrism, karma 1s considered illusory, but I wall call
you Karma."

"What should I call you?"

"Sometimes I am Kali, the destroyer, sometimes I am
Lalita, the playful one, sometimes I am Kubpka, the potter,
but I am always Dew, the goddess. So call me Dewi. At first,

when you came, you made great prostrations. Today, you

40
ereeted me in the Indian style. When you do that, what
image comes to mind?"

"One of devotion, of respect, the hope of recerving and
realizing the most precious teachings.”

"Do you think there's a fundamental difference between
you and me?"

"Yes, you are a master.”

"When vou greet me, do not bow before someone who
may be what you are not. Even if Shiva were standing there
in front of you, never bow before something distant and
unattainable; on the contrary, bow before that which links
us and which makes us fundamentally alike, which makes
Shiva and his companion, Bhairavi, fundamentally no dif-
ferent from you and me. When you bow, bow deeply be-
fore the divine which 1s in ourselves and in this moment,
before the divine which has never been separate from us,
before the divine which 1s not found anywhere other than
in ourselves, before the divine which one can never get
closer to or farther away from, before the inconceivable
divine out of which our entire being 1s fashioned, as the
texture of clay out of which we take the form given to us
by the potter. As long as you imagine a way which sepa-
rates you from the divine, you are preparing for lengthy
wandering, and this wandering will never end, because the
more you think you are approaching the divine, the more

it will escape you.

"Shiva 1s inconceivable, unattainable, and yet it 1s 1m-
possible to distance yourself from him, because fundamen-
tally you are Shiva. You greet me, you greet the divine which

links us like the ground on which we both walk, like the
sky in which our gaze gets lost."

41
Devi paused for a long silence. She looked at me as if
her words were taking time to penetrate my consciousness.
She spoke slowly and deliberately, in a soft voice, as one
would tell a story to a cluld. I looked at her and realized
suddenly that a very long route had brought me exactly
here. I thought of the razor image she had used and asked
myself whether I would have the courage to follow thus
teaching. I could not imagine how she could trigger the
reactions of doubt, rejection, and hate in me that she pre-
dicted. I thought suddenly of Kalou Rinpoche, who had,
until now, bestowed his teachings upon me without sub-
jecting me to terrible tests. It is true that Westerners are
often impatient in their quests and that Kalou Rinpoche
had taught me patience. I'd watched many Westerners ar-
rive and, after spending three or four days at the monas-
tery, go off in search of less time-consuming teachings. Devi

took up again with the same calm voice:

"In Tantrism, fundamentally there 1s no temple, no God,
no dogmas, no beliefs. There 1s only an immense umbilical
cord, which reunites each being and each thing in the di-
vine. To experience an awakening 1s to glimpse that in its
totality, even in the space of a second. To experience Great
Awakening 1s to evolve continually in this single infinite
space that consciousness 1s wed to when Shiva and Bhairavi
become one, when the ecstasy oftheir union overflows into
the consciousness, opened so wide it can no longer even
say, 'T am the consciousness, I am the limitless, I am the

totality of the divine.’

"Consciousness 1s the place of worship. Consciousness 1s
the sacred text. Consciousness 1s the way. Consciousness 1s

the place of sacrifice. Consciousness is the fire. Conscious-

42
ness 1s the place of ritual union. Consciousness 1s the place
of samadhi. Consciousness 1s the Awakeming. Conscious-
ness is the dwelling place of the gods. Consciousness is
time. Consciousness 1s space. Consciousness is the jar, the
vessel out of which flows the divine.

"What does the worshiper do? He cleans the temple.
How? By asking all who have been sitting there forever to
leave so he can sweep, throw fresh water drawn from the
river on the stones, scatter rose petals. Very quickly, the
worshiper takes count of those sitting in his consciousness
who refuse to leave the temple. Why? Because, like us,
they are afraid. It is because of fear that the consciousness
remains cluttered. Not the little fears, easy to define, not
the fear of this or that, but the great fundamental fear, which
1s the fragile terrain on which we construct all our dreams,
and which, one day or another, paralyzes us and destroys
what we have constructed with so much care.

"The day to act arrives. You purify yourself by bathing in
the sacred river. You feel alive and full of determination.
You draw fresh water, take a broom, gather a basket of
rose petals, and enter the temple of the consciousness. That
1s meditation: to enter fresh, the mind alive and alert in
the temple of the consciousness. You see them, all seated,
immobile, anchored in the ground, fossilized. They have
been there for such a long time. They have loved you so
much, given you so much, spared you so much. Since you
were very young, their voices have guided you. Even now,
at this moment, as they watch vou enter, ready to clean,
freshen, and scent, they talk to you and you listen: Listen,
this 1s what we think of you. Since you were young, we've

been trying to keep you from danger, to warn you of life's

43
pitfalls. We punish you when you make a mistake, but when
vou listen to us, when you are a good boy, we reward you,
we sing your praises, and, thanks to us, you haven't come
out too badly. Now then, don't chase us away. Keep listen-
ing to our voices, following our advice. We only want what's
best for you. Freedom? It's chaos. Listen to us closely, fol-
low the way we show you, and all will go well.’

"But in this instant, you know that you have listened too
much, that these stone-colored men are there only to keep
you from scattering the roses and the fresh water. That all
is not going so well. You are like two fears face-to-face.
Like two fears finding themselves nose-to-nose in a dark
forest, full of creaking and cracking and other frightening
sounds. One fear says to itself, Let's hope that he doesn't
do anything to eject us from the temple!" The other fear
says to itself, Let's hope they don't get up to go out! What
would become of me without them!" And like that, day af
ter day, one compromises with the consciousness, receives
blame and encouragement, falls into line, and becomes
someone for whom grayness 1s acceptable. All of society
adores the monochrome of gray. Gray 1s the most wide-
spread color. There are millions of varieties. Gray is the
ideal color for social camouflage. It 1s thanks to our gray
that we manage to exist socially, to merge into the immense
cauldron of suffering and ordinary violence."

Dewi sensed that this suffering, this "ordinary" violence,
elicited strong feelings in me. She fell silent and gave me a
probing look. Letting the thread of my thought unwind,
she seemed to touch each loop. I had the impression that
she listened into my silence. This suffering and violence

were the reasons for my being here. I wanted to try to put

44
an end to them without always shifting responsibility onto
others, without always wanting the others to stop being
violent. Devi placed me before my own responsibility. What

part of my consciousness served as a vital link to suffering
and violence? How was I myself also a machine of destruc-

tion? How was the body, that huge battlefield of cells, a
prefiguration for the world? How could I attain a practice
that could begin to change the world, starting with the only

thing directly accessible: my own consciousness of reality?
Dewi started to answer me:

"In Tantrism, there is fundamentally only one color: red.
The color of the living heart, the color of blood, the color
of fire, the color of roses and of the tongue, the color of the
open vulva, the color of the erect penis, the color of the
sun that warms the hermits, the color of the circle of fire
that must be crossed to attain consciousness. Shiva comes
from the root Shiv, which means ‘red’ in Tanul.

"The first thing a tantrika does 1s conquer this fear. He
lets out a great cry, a cry of rebirth, and drives all those little
oray men out of the consciousness. It 1s very difficult. It takes
much courage to spread fresh water and rose petals on the
empty stones of the temple. One has only one desire: to run
after the gray men and ask them humbly to come back. Be-
sides, for a long time, they wait outside the temple. They

stay within earshot. They watch for a moment of weakness

on your part.

"For a few seconds, you feel very much alone, abandoned
by everyone. Space is too big and too empty. You tremble.
You have trouble throwing out everything that the little
oray men have left behind, as if to claim their territory. You
have trouble getting the water to rinse over the stones. But

45
as soon as you've washed them down, as soon as you've
thrown the petals, you feel a great freshness - a divine,
fragrant, completely open space. This 1s your own empty
CONSCIOUSNESS.

"Then comes the most difficult moment, much more dif-
ficult even than abandoning your fear. When the temple 1s
empty and resplendent, so that the light shimmers in it,
the songs of the birds fill it, fragrances scent it, and moon-
beams make it even more spacious, we congratulate our-
selves for our wisdom and clear-sightedness, and we say to
ourselves, Wow this place is absolutely pure. It's the per-
fect spot for storing the sublime teachings I've had access
to. In this temple, I'm going to store the most profound

products of wisdom to nourish my consciousness.’

"At first, vou feel wonderfully well. You introduce great
and beautiful notions, a pure ideal, brilliant teachings. The
whole universe seems glad to take part in your plan. Little
by little, vou build yourself a very beautiful world theory,
and you perfect vour knowledge. Nevertheless, things
oradually and imperceptibly change. At first you don't no-
tice. You cling to the idea that there is only the sublime in
the temple; nevertheless, already you don't feel completely
at ease there any longer, especially since you want to see
others conform to this dearly won truth. Already you begin
to exercise violence against others and yourselves.

"One night, in your sleep, you believe you hear a voice,
then two, then ten or twenty, and in the morning when
vou wake up, you see that all the little gray men are back
in the temple. You listen to their whispering, quiet at first,
then more and more obtrusive. To gain entry they've

watched for opportunities to attach themselves to the

46
notions and beliefs you've allowed into the empty temple.”

I felt myself disarmed by Dewi's capacity to restore to me
my own responsibility, by her spiral-like way of teaching,
during the course of which all my questions found answers.

"Now, go back to your place. If you truly want to wash
out the temple, return when you are ready. Return with
enough provisions for a long period of time, put your af-
fairs in order, and I will teach you the way of Tantrism."

Profoundly moved, I bowed before the divine in us, but
this was still only an idea. I didn't really feel the umbilical
cord she'd spoken about.

"Don't forget the rose petals," Dewi said.

47
I went back up to the hermitage supplied with rice, rolled
oats, barley flour, cheese, salt, and sugar. I brought my kero-
sene stove, my cooking utensils, books, sleeping bag, and
the blanket I'd been lent.

Dewi, wrapped in her light wool shawl, was walking along
the edge of the forest. She seemed to be looking for some-
thing. I put down my pack and greeted her, and she re-
turned my greeting. She was gay and playful this morning.
When she laughed, she took on the air of a carefree adoles-
cent. Already I was astonished by her capacity to change,
and I still knew only one or two of her infimte forms.

"This 15 where you'll build your hut. You will be fine
here, sheltered from the wind and near the waterfall and
the spring where we draw water. When you've fimshed,
rest, go down to bathe, and bring some stones back up to

make your hearth. Then come see me in my hut.”

Once Dewi left, I prepared the ground, then went deeper

48
into the forest to find the necessary building materials. My
knife was sharp enough to serve as a hatchet. I built a cabin of
branches with a pitched roof. It measured about two meters
long by one and a half meters wide. In this season, I didn't
need to worry about rain, and I counted on facing the cool
nights equipped with my sleeping bag designed for the Hima-
layan cold. The temperature, very pleasant during the day,
dropped rapidly after sunset. It took me seven or eight hours
to build thus makeshift shelter, which opened onto the espla-

nade. My hut was situated fifty meters away from Dewi's.
When that was finished, I inflated my sleeping pad and

arranged my bed, blanket, books, and the small treasures
at the bottom of my pack: candles, matches, lighter, extra
kerosene, and a new wick for the stove, necessary for cook-
ing. To be economical I had decided to use the stove for tea
and breakfast, and build myself a fire to prepare the other
meals.

It was only when I arrived at the great basin of green
water and plunged in that I realized what had happened to
me. I had taken the step. There I was, cut off from the
world. I started to tremble, not because of the cold water
but because of my fundamental fear, which I still had only
begun to grasp. As the sun sank, I dried myself quickly,
dressed, and struggled back up with the stones, which were
to retain a heat more lasting than the coals.

When I arrived at Dewi's hut, she told me to enter. The
burning fire radiated a gentle warmth. Sitting on an old
blanket folded in quarters, she asked me to go find mine
and to take a place facing her.

Once I was situated, she looked at me for a long time.

Lit up by the flames, her dark, terribly brilliant eyes gave

49
me the impression of a fountain of love pouring toward
me. Her look also had something of the power of a fire in
the forest, which drives away all the imagined forms that
never stop appearing to us. She opened one of her hands
and there I saw some small pebbles, which she must have
collected at the rnver. Near me was a pot. By throwing in a
stone, she made it ring. I smiled because her aim was
perfect.

"This pot represents your mind. Each time you cease to
be here by taking refuge in your thoughts, I will throw a
little stone. Thus you will become aware of the number of
disturbances you create to escape from the present reality.
When we look at each other, Shiva and Shakti look at each
other. Why are Shiva and Shakti divine? Because nothing
comes to disrupt them from being present with each other.
To be Shiva 1sn't difficult. It's enough to be present, to be
entirely there, moment after moment. If you only realized
this one Tantric teaching, you would attain the divine. You
would be an integral part of the divine, which you enjoy
imagining in me but which you still don't recognize in your-
self. No asceticism leads to a distant divimty. All we imagine
elsewhere is in ourselves. To be Shiva is to realize that spon-
taneously. Are you ready to wash down the temple?”

"Yes. I've thought about the conditions you've laid out. I
agree to go to the very end.”

Dewi laughed.

"That's very courageous on your part. I have visited

vour hut. It's built well. Follow my teachings in the same
manner."

I thanked her for accepting me as a disciple. Then she

asked me a question, which totally threw me.

50
"Tell me about your first experience of awakening."

"If IT am here, it's precisely because I haven't had any
awakening experience.”

"Tf you haven't had any experience of awakening, I can't
do anything for you."

She let my confusion increase. Then she began again.

"Without prior experience of awakening, no asceticism,
no practice, no meditation bears fruit. Without awakening
experience, there is no source, and since all Tantric sadhana
consist of returning to the source, one wanders, not know-
ing where to go. You could follow my teachings for thirty
vears. Without prior awakening experience, you'd arrive at
nothing. Look into yourself deeply. Think about your child-
hood, your adolescence. An awakemng experience 1s found
there. No being exists on earth who hasn't had this funda-
mental experience.”

Dewi stood up and put her right hand on my head. I felt
a wonderful sort of light and warmth, and suddenly an
image appeared.

"I was eleven years old. I was on vacation in the moun-
tains. I had met a young girl my age, and one evening we
went out along a path that rose above the village. We held
hands and walked in silence. At one moment, we stopped
and looked at the sky. The incredibly luminous stars seemed
closer. I had the impression of being totally dissolved into
the sky. It lasted a few seconds. Could that be called an
awakening 7"

"When no sensation of the ego remains, nor of duality,
nor of the mental operation that makes us say How beau-
ful it 1s, how infimte!" - when there's nothing to limut an

experience, when the mind rediscovers space, then it's a

51
matter of awakening. From now on, you are no longer on a
search for an abstract or remote state. You're searching for
nothing that is not already within you. This capacity for
total wonder 1s the very substance of awakening. It 1s out
of this and only this that you become a man. All the other
quests, all the other pleasures, are evasions.”

"But I thought that there was Awakening, with a capital
A, and only with that would come deliverance, the end of
illusion."

"Between the awakening vou know and the awakening I
know, there's only one difference. That's duration. And when
you realize that time doesn't exist, how can your awakening
take refuge in a limited span of time?"

"There's no difference in intensity?"

"None. The intensity comes precisely from the fact that
there's no end to it. There's no return to restrictive activity.
All actrvity, all play of the mind takes place within Awaken-
ing. Everything can enter and leave, everything can emerge,
everything can be tasted in all its richness."

"But why do we lose this capacity for wonder?"

"Because the little gray men come to reside in the con-
sciousness. Education, society, sick love, hate, desire, jeal-
ousy, ambition, mental and material quests - all these things
make us strangers to ourselves. We think only of copying,
imitating, achieving new states, and whether or not our
desires are fulfilled, we lose the happiness within us. Then
we come to imagine heaven and hell separate from our-
selves. This 1s a great subterfuge, which allows our con-
sciousness to function outside of ecstasy. If man knew that
he lumself was God and heaven and hell, no illusions would

have a hold on him; nothing could limit his consciousness.

92
Placing heaven outside self allows suffering to become an
institution maintained by society's dream at such a high
level that we can no longer escape from it. Whatever our
fortune starting out in life, a day comes when we decide to
limit our consciousness, to dry it up.

"As for the mystical crises of adolescence, the great re-
volts that make us doubt the path indicated by others, one
day we step back and decide to pay our imaginary debt to
society. We accept the death of our true selves. And the
ereat fraud 1s that this death troubles no one. To the con-
trary, it 1s watched for, welcomed, and rewarded. As soon
as the price of this spiritual death is accepted, it becomes
extremely hard to follow another route. That can happen
only at the cost of immense effort and very great courage.
Those who have accepted their own deaths have only one
possibility: to become followers of a religion or group that
places the divine outside the self. Thus, everything 1s sub-
sumed by society's order and interests, aligned to those of
the churches and sects, which operate from the same com-
mon base: the death of divine consciousness. The driving
forces are guilt, fear, obedience. The results are rigidity,
distance from sensory objects, obsession, Puritanism, vio-
lence, moral codes, exclusion. In India, America, China,
the Mideast, Europe - that 1s the mode of operation we see
at work throughout.

"To become a tantrika is only to realize the funda-
mentally pure and heavenly nature of consciousness and
to let it take over your life. When that happens, no so-
cial game, no drug, no limited ideal can become inscribed
in the consciousness, but above all, no activity in the

world is capable of taking away this radiance. The

53
tantrika can then live within society and remain an unal-
terable diamond.”

"Are there many successive awakenings before the Great
Awakening?"

"If you think a Great Awakening exists, you're caught in
a formidable trap, which will make you confuse an awak-
ening with that final state. Youll remain blocked by nus-
taking it for what it's not. The basis of Tantric sadhana 1s
always to wait for a new veil to be torn away without your
spiritual qualities hardening. In nature, nothing ceases to
evolve, to be infimtely transformed. To look for a stable
state 1s to cut yourself off from reality. Everything 1s based
on respiration. Can you breathe in for three hours? No.
You breathe in and breathe out. We follow the movement
of the universe, going in and out, opening and closing, ex-
panding and contracting. All activity takes place in these
two modes, and it is their perfect comprehension, their

perfect integration into our practice, that allows conscious-
ness to breathe. Never forget that consciousness breathes.”

"You spoke of our fortunes starting out in life. What was
it you wanted to say?"

"To be conceived through love 1s good fortune. To be
born to a loving woman 1s good fortune. To be born to a
yvogim 1s good fortune. To live in a harmonious fanuly, to
meet a friend, then a spiritual master is good fortune. To
have self-confidence 1s good fortune. To have the strength
to revolt 1s good fortune. To cling to nothing, no philosophy,

no belief, no dogma is good fortune. To remember an instance
of awakening and return to this source is good fortune. To

know any single one ofthese things is good fortune.”

Devi poured two cups of fresh water and held one out to

54
me. I took it, and as I was going to drink I saw my face
reflected in it. I stopped for a second. An 1dea sprang up. I
heard a stone fall into the pot. I drank. Never had a cup of
water seemed so wonderful to me.

"T hand you a cup of fresh water. The water seems deli-
ctous to you if you are here, tasteless if you are lost in
thought. You are here, facing me, and you are happy be-
cause you think you are drinking at my spring. One needs
only a bowl of really fresh water to taste its unique flavor,
but if you practice drinking from someone else's spring,
you will never become a fountain. To awaken is to become
a fountain for others and never stop flowing. Sometimes
offering a bowl of fresh water 1s enough to change a life.

What were you thinking looking into the water?"

"I believe I began to think of the void, but the stone made
the pot ring. In the past I thought about the void all the time.
Iwas obsessed by it. Tt 1s the thing in Buddhism that seems to
me the most difficult to grasp. I go around and around the
void as ifit were a great mystery."

"Before becoming a tantrika, I was in love with the idea
of the void myself. My father was a potter, and from early
childhood I'd been fascinated by his hands, which rode the
clay around the void and fashioned wonderful objects out
of emptiness. During adolescence I wanted to be a potter,
but because of my excellent grades, my teachers told my
parents that I would become a teacher. For them, that rep-
resented an important rise in social status. From that time
on, my father forbade me to help um. He placed much of
his hope in me. One day, I became a teacher. I was married
to a teacher, and a little while after my marriage, at a mar-
ket, I saw a woman my mother's age who was selling her

99
jars, her pots, her cups. Her hands were marked by the work,
and without knowing why, I approached her and I touched
them. I felt the great softness that clay gives to the skin, and
I began to cry. The woman comforted me in her arms. Im-
mediately, I made my decision. I went home. I told my hus-
band that I was leaving. He beat me very brutally, and as
soon as he left the house, I withdrew my savings from the
bank and I fled. I established myselfin avillage where there
wasn't any potter, and I began to make pots and jars, think-
ing all the time of the wonderful void that contained my
consciousness and my wonderful consciousness that con-
tained the void. I came to understand little by little that the
void was full, that fullness was empty, that the void was
rooted in the clay, and that if the clay did not recogmze the
void, it could never become a pot or ajar. I lived very hap-
pily until one day when a tantrika came to buy a jar for his
master. I told him that I wanted to take this jar back to lus
master myself as a present, as a testimony of what consti-
tuted my freedom. We took a bus, and then we walked in

the mountains for a long time.

The master, amused, asked me if the inside of the jar

was empty or full. T answered that it was full of emptiness.
Immediately, he took me on as a disciple. The void no longer

obsessed me. I had realized that the void is the bone and
the marrow of each being, of each thing. Without the void,
nothing would be possible. If you read the Fijnanabhairava
Tantra well, you'll understand that all it talks about 1s the
void.

Dewi cooked chapatiz on a flat rock. I watched her do it.
Her hands skillfully shaped the cakes. She turned them on

the rock and took them off just at the moment when a few

56
black circles were fornung. I felt wonderfully happy in this
silence. I was grateful to Dew1 for having spoken of herself
to me in such a direct manner, for making me touch the
void. Again, this time, I found her simple, cheerful, pro-
found. A few stones landed in the pot again. We savored
the chapatis in silence and I retired without a word, know-
ing that the teaching for the day was over.

I walked slowly to the edge of the chff. IT admired the
waterfall, which sparkled in the moonlight, and I went to
bed, lulled by its ceaseless sound. Despite my fatigue, for
more than an hour I remained still, warm enough, bathed
in joy and a deep recognition. Before going to sleep, Ibowed
mentally to Devi. A lotus opened in my heart.

57
Devi woke me before daybreak by putting her hand on my
forehead. I emerged from sleep with a mental alertness and
lucidity I'd never known before. Devi carried her folded blan-
ket under her arm. She made her way in silence toward the
chiff I got up, took my blanket, and followed her. She sat
down for meditation, and just as I was about to take my
place beside her, she motioned for me to sit facing her.

My meditation seemed carried by Dewi's energy, which
swept over me like a strong breeze and made me shiver. I
felt each muscle and every nerve's desire to abandon itself
totally to a sort of call from the void, so that I had to keep
setting control of myself, tensing up and bracing myself to
avoid being overwhelmed by what I was experiencing.
Despite my resistance, I was bathed in a very strong lumi-
nosity, which lasted throughout the period of practice.

The day began, the temperature climbed slowly, and at
last the first rays of sun penetrated my lined Tibetan robe

o8
to reach my skin. Devi opened her eyes wide and moved
her arms. I did the same. We greeted each other at the
same time.

"Did you sleep well?" Dewi asked.

"Very well."

"You weren't cold?”

"No, my sleeping bag 1s very thick."

"And now, are you cold?"

"A little, despite the sun. I've had trouble letting go.”

"That's normal. Everybody wants to let go, but how do
you let go if you don't hold things, if you don't touch things
in full consciousness, with a totally open heart? In Tantrism,
the first thing is having the experience of touch, of pro-
found contact with things, with the umverse, without men-
tal commotion. Everything begins there: touching the uni-
verse deeply. If vou let go before touching deeply, that can
bring on severe mental turmoil. Many beginning yogis make
this mistake. They let go before taking hold. They lose con-
tact with reality. The heart 1s never opened. They enter
into a sterile void and remain imprisoned there. When you
touch deeply, you no longer need to let go. That occurs
naturally. The world 1s to be passed through in full con-
sciousness. There 1s no other way, not a single detour or
shortcut. When you hold something with all your conscious-
ness, like the newborn who grabs your finger, it is enough
to open your hand. Why 1s it that a newborn has so much
strength? Because lus whole being takes part in the move-

ment that results in seizing your finger. In this instant he 1s
so strong that you are in his power.

"Tantrism 1s agreeing to live out this power. The woman

possesses 1t naturally. For her, it's easy to experience. For

id
the man, there's only a dream of power. That's why his power
is not manifested spontaneously and why it often takes a
violent form. Violence 1s pure impotence. To be conscious of
his power, a man must first come to recognize his fermmmty.
In the same way, a woman who represses her natural power
doesn't find equilibrium within herself or accept her own
capacity for wonder. This 1s how we define the virile man in
Tantrism: He who retains the capacity for wonder.’
"Ecstasy, the continuous experience of the divine through
knowledge of our own nature, 1s our natural state. The
infant knows this state, enjoying it from the moment of
conception. It is only under pressure from the outside, edu-
cation, a bad famuly situation, that little by little the child

loses inborn capabilities - strength, capacity for wonder,
absolute self-confidence, openness to the world, the free

blossoming of the heart, which it learns to fold up again
and then to close tight. Returning to this childlike state 1s

the door that reopens the heart.”

"Is there a difference between the natural awakening of
a child and that of an adult who rediscovers this state?"

"The return to an awakened state 1s often made at the
cost of a certain amount of suffering at the moment when
the adult's armor 1s cracked, when the infimte ships in there.
That can be an experience similar to being struck by light-
ning. Madness 1s a sort of awakening in which the light-
ning doesn't shatter all of the armor. The mind is halfway
into the infinite and no longer recognizes the structures of
the finite. Sometimes awakening is more like a glacier
melting, slowly and inexorably. But often, even in this case,
the consciousness goes through painful episodes. And the
briefer they are, the more intense.

60
"When the whole suit of armor gives way to awaken-
ing in the adult, that state 1s both identical to the newborn's
and different in the sense that it 1s heightened by the
beauty of the journey, and it is not generally followed by
regression. An adult heart that is awakened 1s a heart that
hasn't breathed for a long time, that has retained an enor-
mous capacity for genuine love. In seeking to let go be-
fore taking hold, one doesn't understand the profound
dynamic of love, the fabulous power we all possess. We
are all like bombs ready to explode with love. Even the
most violent, most terrifying men and women, the ones
most rejected by society because of their crimes, are not
exceptions. I am here to press the detonator. What 1s the
detonator? Sometimes, nearly nothing. Three seconds of
total presence before the other will suffice. People never
reach some irreversible point. Agreeing to touch the other
is agreeing to make this bomb explode. It is the only solu-
tion to violence. Touch. I am going to teach you to touch.
The basis of Shivaism 1s touching the tharty-six tattvas, or
umiversal categories. It is the base on which all of Tantrism
rests.”

Devi let me consider what she'd said. When she paused,
her whole body seemed suspended in space, in total well-
being and calm openness. I sometimes had the impression
that the sky and the trees listened to her, that the waterfall
quieted down, that the air stopped moving. I loved the way
she spoke about life, always coming back to reality and our
struggle to survive, understand, love, search.

"The first five tattvas are

earth,

water,

ol
air,
ether,

fire."

Dewi rose, saluted space, and lay down on the ground. I
imitated her, hands out in front of me, flat on the ground.

"The first tattva 1s earth. With all my body, I touch the
earth. My hands touch the earth. My face touches the earth.
My breasts touch the earth. My heart touches the earth. My
belly and my genitals touch the earth. My thighs, my knees,
and my toes touch the earth. I breathe deeply and my breath
1s umted with the earth. The whole earth breathes. Breath is
everything. I delight in the earth, its presence, its energy.
The earth 1s real! Only your superficial contact with the earth
1s not real."

After a few minutes, Devi got up again and went down
the narrow path that led to the river. Walking behind her, I
admired the way both her feet made contact with the
eround. In every movement of her body there was a grace
and a presence that gave the impression of space opening
to let her penetrate it.

We arrived at the basin. Dewi let her clothes fall and en-
tered the water nude. She approached me. The water cov-
ered her shoulders. She faced me.

"The second tattva 1s water. I touch the water with my
whole body. The water is real. Only your superficial con-
tact with water is not real.”

She immersed herself completely I did the same, hold-
ing my breath as long as possible. When I came up, I was
astonished to see that Devi was still under water. I saw her
body distorted by the water. I took another deep breath
and plunged under again. I was conscious of the water going

62
into my ears. I came up a second time and waited for Dewi.

Her face emerged. She opened her eyes, and I saw in
them the playfulness of a young girl. She breathed in very
deeply, slowly, then breathed out. Her hair was so black it
looked almost blue.

"The third tattva 1s air, which enters my lungs, then nour-
1shes my blood and circulates throughout my entire body.
The air is real. Only your superficial contact with the air is
not real."

Devi got out of the water and sat down on a big round
rock, face to the sun. Since she was naked, I chose another
rock, some distance away, but she motioned for me to take
the spot in front of her. As I sat down she said to me:

"Tantrism 1s one long face-to-face. Nakedness 1s the na-
kedness of the conscious in which nothing is fixed. Every-
thing flows there like a nver. The Shaktis are nude because
not a single concept can find where to attach itself in their
consciousness any longer. Thought itself wouldn't know how
to stay put there. The phallus of Shiva is erect because it is
raised to full consciousness, and in full consciousness it
penetrates the universe. The vulva of Shakti 1s open be-
cause in full consciousness she lets the entire universe pen-
etrate her. Shiva and Shakti are indistinguishable. They are
one. They are the umiverse. Shiva isn't masculine. Shakti
isn't feminine. At the core of their mutual penetration the
supreme consciousness opens. If in whatever circum-
stances, the sight of nudity awakens this revival of con-
sciousness, then all bodies become a manifestation of the

divine. Why distance yourself from the divine?

"Naked, on this rock, I am conscious of the tattva thats
ether. It is empty space where everything manifests itself.

63
Even though it's impalpable, my consciousness touches it
deeply. Ether is real. Only my superficial contact with ether
is not real."

We waited to get dry before dressing ourselves again
and climbing to Dewvi's hut. She rekindled the fire, boiled
water and dry nmulk, and threw in some salt and oat flakes,
which she let swell as she stirred them with a spatula. Then
she made ginger tea and spread out four bowls between
us. She leaned over the food and asked me to hold my
hand out in front of me, open. In one swift motion, she
seized an ember with her fingertips. At the moment she
was going to drop it into my hand, I drew back quickly. The
ember fell on the ground and crumbled.

"This 1s the tattva of fire. You didn't touch the fire. You
don't have confidence.”

"I have confidence in you. But with a burnt hand, how
could I carry out all my tasks?"

"Sometimes my fire burns, sometimes 1t doesn't burn.
Without total confidence there can be no spiritual trans-
mission. You answered me, T have confidence in you.' But
that isn't the important point. What counts is to have con-
fidence in yourself. Absolute confidence. That's all a mas-
ter looks for to kindle in a disciple. Without absolute self-
confidence, there's no opening ofthe heart. To touch these
thirty-six tattvas 1s essential. To pass through this contact
opens the place where one can experience the divine. To
draw back your hand 1s to burn yourself."

I extended my hand. I closed my eyes.

"I am ready to touch the fire."

For a very long time, nothing happened. Then I felt a
sharp burning. Ilet out a cry and opened my eyes. Nothing

64
except the end of Dewi's ring finger was touching my hand.

She started to laugh.

"Your thinking mind touched the fire and you burned
yourself. I wanted this day to be an experience of total con-
tact with the tattvas for both the body and the conscious-
ness. There 1s only one way to receive the transmission.
When I tell you to do something, do it immediately, with-
out the least wavering of thought. That's it. Learn. Open
vour heart and act. Thought stops action. It perverts it into
a calculated gesture stripped of all its grace, all its efh-
ciency. To come back to an action that went wrong makes
it worse. That's only to sink deeper into the mental. Re-

morse paralyzes, hesitation eliminates beauty from action,
thought shrinks from the world.”

Dewi seized my hand and, with lightening speed, flat-
tened it against the coals. I let out a cry and instantly with-
drew it. There wasn't a single mark on it or any sensation
of burming. The coals, nevertheless, had been crushed un-
der my palm. Devi looked at me with a sort of serene and
mysterious half-smile that gave her face a full, radiant
EXPression.

"Now you have touched the zattva of fire."

I remained silent, looking at my hand as if I expected to
see blisters appear. Small stones landed in the pot. I drank
some tea, then thought about this feeling of holding back,
of resistance, that I had had during meditation. I spoke to
her about it.

"Our strongest resistance is the resistance to ecstasy be-
cause we sense that to succumb to it we must abandon all
certainty, abandon what we have put so many years into con-
structing. We must abandon our philosophy of life. Our beliefs,

65
our ideas, even the concept of the void, even the concept of
the absolute or of Shiva stand in the way of ecstasy. It 1s
relatively easy to abandon fashionable ideas. It is much more
difficult to give up philosophical and religious concepts. One
proudly proclaims oneself an atheist, believer, Buddhist,
Christian, Muslim, Hindu, tantrika. The divine can't be
erasped in this manner. What's the difference between an
atheist and a believer? Nothing. They are two sides of the
same coin. It isn't a matter of believing or not believing. It's
a matter of communicating with the nature of one's mind.
It's like diving into a lake. Too often, we want to lose our-
selves conceptually in the teachings as they unfold to us,
and without realizing it we build a coat of armor against the
divine. The most subtle teachings must be abandoned along
the way. The tantrika's courage is in letting go of teachings
once they've been absorbed. Even the Tantras aren't worth
any more than a skin abandoned on the stones by a molting
snake. When one is constantly changing, there comes a day
when the consciousness rests on nothing. Then awakening
occurs. Only total abandonment of the mental can open us

to the divine."

"Is awakening subject to transformation?"

"All nature is subject to transformation. An awakening
that isn't in accord with the deep nature of things gradu-
ally becomes diluted. One morning, you open your eyes
but you're no longer awake."

"A Ch'an master speaks of the slow polishing of the
awakening."

"That's it. It's not enough to find a raw nugget. It's nec-

essary to let life run over it until the gold dazzles the entire
universe."
Dewi ate slowly. Each of her movements was in harmony;
each mouthful seemed to bring her profound joy. This way
of absorbing herself in things extended to her every activ-
ity. I had the impression that nothing was done mecham-
cally. With her, everything was an occasion for communi-
cating deeply, for remaining always anchored in reality.
Thus, everything she did became a teaching for me. Through
my association with her, I noticed those "holes" that punc-
tuate our daly lives when we completely lose conscious-
ness of the moment and of the divine harmony as well. It
worked like real magic in Devi's least gesture, action, ex-
pression. It was as ifthe flow of time suddenly found itself
slowed down by a dance partner from reality. Dewi took up
where she'd left off in her teaching.

"The so-called subtle rattvas are

smell,

taste,

form,

touch,

sound.

"The first is the heart of the smell. By breathing in your
oatmeal gruel, you smell the odor ofthe oats, but the heart
of the odor 1s not the odor. Close your eyes. Breathe in.
Breathe in the world at hand - the world of fire, ashes,
clothes, the hut, the forest, the water, the sky, the universe.
Only then does your consciousness penetrate to the heart
of smell. The heart of smell 1s real. Only your superficial

contact with the heart of smell is not real.

"Next comes the tattva of taste. Take a bit of oatmeal.
Savor it. Penetrate to the heart of taste. Taste the reality of
this heart, which contains all the tastes ofthe earth. That's

67
what must be penetrated. It's in this sense that the Tantras
say one attains 'the unique savor’

"The tattva of form, the heart of form, 1s found in the
formless, which 1s the matrix of all the forms in the world.
Like the oat flakes, which have lost their own form in the
cooking, know the heart of form by following this dissolu-
tion, which takes place throughout the universe.

"You can gain access to the fattva of touch by touching
my hand. What do you feel?”

"Your skin, your flesh, your bone ..."

"You feel the heart of touch. Your skin and mine brush
against each other. It 1s as 1f all your skin has touched mine. A
shiver runs through your whole body, and you enter into the
heart of touch. Through me, the universe slips under your
hand. Is it possible for two skins to touch each other com-
pletely? For each millimeter of your skin to touch each nulli-
meter of mine?"

"It's impossible."

"Then what is love?"

I remained silent, without response, and profoundly
moved.

"Is it possible for each millimeter of your consciousness
to touch each millimeter of the divine?”

gi 1

"Do you hear me?"

"Yes."

"Then itis the tattva of the heart of speech. To cross through
it, you listen to the entire umverse. It's in this sense that all
that's heard in the umiverse 1s the mantra, AUM. All mantras
are contained in the mantra AUM. Close your eyes. Listen to
the mantra. . . . Only when you've heard it without a pause

68
for three days and three nights will you be able to say it. To
chant a mantra before having heard it 1s to arnve at death
before being born."

We finished our breakfast. I felt myself entering a new
universe - a universe of extreme richness. I tried to be fully
attentive to all that Devi said to me. At the same time as
she captivated me, I was momentarily taken by a kind of
fear. What would this upheaval lead me to? How was I
ooing to emerge from this total calling into question of my
frenetic way of apprehending life? What did that emgmatic
smile lide, and what would I suffer for experiencing the
revolt that Devi had predicted? Many times I had the de-
sire to take to my heels, go back down to Della, taste the
easy pleasures, leave India for the less mystical territories
of Southeast Asia. When these impulses came over me,
nearly as quickly I realized that an opportunity like this -
to go all the way to the end of myself - might never present
itself again, and I would spend the rest of my life regret-
ting it. This way of touching the world 1s marvelous, but it
also contains something terrifying for a Westerner: the har-
rowing sense, at the beginning, ofbeing dissolved into the
objects of perception. We have reinforced the ego in such a
way that it's painful to begin to feel how quickly it evapo-

rates when we really touch the world.

"Does one practice these relationships with the tattvas
like a sort of meditation by choosing one or another? Is
that fundamental in Tantrism?"

"What's fundamental 1sn't to concentrate on this or that
tattva as a particular form of meditation, but rather to re-
alize that permanent contact with the thirty-six fattvas in

full consciousness 1s the Tantric practice. Life 1sn't divided

69
up like a rice field We are subject to permanent and simul-
taneous contact with many faffvas. The bemng's total en-
gagement traveling through the web of the various catego-
ries is what constitutes Tantric experience. Let's go walk in
the forest and meet the other fattvas.
As Devi moved through the forest she looked to me like an
image from a slow-motion film, her whole body harmom-
ously engaged in the walk. I tried to imitate her and real-
ized at once how jerky my movements were. My muscles
weren't accustomed to providing smooth effort, perfect
balance, presence with each step, fully conscious of all the
body mechanics that make walking possible, from planting
one's feet on the ground, one after the other, to balancing

one's arms.

"Slowness is a divine thing. We have lost the habit oft.
With slow, regular, harmonious movement, the conscious-
ness immediately finds its place. The body begins to enjoy
the smallest thing. Attention is heightened. We take in the
world's full freshness. We communicate. We open our senses
to the plemtude. Consciousness of the tharty-six tattvas 1s
an apprenticeship in completely restoring our ties to the

universe, beginning with the basic elements and arriving

71
at the divine. It's essential to feel the reality of the world in
its entirety. Without that, any spiritual quest is illusory. To
be entirely present to each thing that crosses our conscious-
ness, to our most banal and repetitive experiences, 1s the
door to awakening. Tantrism rejects nothing. All mental
and bodily processes are wood, which we add to the great
fire that consumes the ego and leads us straight into the
absolute. This forest we're walking in - it's the absolute.
There's no border between the phenomenal and the abso-
lute. They interpenetrate each other completely. Those who
don't know that look for the absolute at a great distance
from the phenomenal. They impose all sorts of austerities
upon themselves. They fear reality and stop playing with
life, submitting to it as a kind of punishment. Their con-
sciousness wilts like a flower cut off at its roots. In Tantrism,
we throw our entire beings in, endlessly, without distin-
euishing between pure and impure, beauty and ugliness,
good and bad. All the pairs of opposites are dissolved in
the divine. The deepest urges, the most subline capaci-
ties - no one lacks them. We begin to communicate with
the divine when we totally accept the complete spectrum
of our thoughts and our emotions. All beauty contains dark-
ness. In trying to obliterate it we dry ourselves up. When
one sees nothing but a singular and shared divine energy
in all things, the consciousness can no longer go astray.
The sadhana 1s fed by the entirety of experience, and no
longer by inconsistent fantasies of purity, of spiritual real-
ization, of power or greatness. To be nourished by purity is
to be nourished by milk that has had all its nutritional quali-
ties taken out. Those who follow this path become dry be-
ings. Their only chance for survival is to go tyrannize

72
another consciousness more joyous and opened to the
world."

As soon as Devi evoked this sense of completeness, I
realized how much I myself was obsessed with such ideas
of purity and accomplishment. From the beginning of my
opening up to Eastern spirituality, I had been constructing
a sort of artificial ideal for myself, which could not coexist
comfortably with the workings of my mind. The conflicts,
the suffering I sometimes felt, the dichotomy existing be-
tween desire and realization, between sensual worldly pur-
suit and asceticism, had made me try to erase my dark side.
Suddenly, in this close contact with Dewi, I felt that old
stock of repressed feelings rise up again. I felt myself dis-
charging a great store of negativity, which the forest ab-
sorbed and which made me breath in violently, as if this

internal turmoil suddenly left an empty place that allowed
my lungs to find new space.

"That's good. Let all that come back to life. Breathe, par-
ticipate. There's nothing that can't serve the tantrika. Breath-
ing rediscovers the key to openness, peace, joy."

I was astonished to see the extent to which Dewi's words
had a physical impact on me. As soon as I came to a deep
realization of what she said, my body immediately began
to open, to vibrate, to release energy, to let itself be. In
those moments, I often found myself wondering about the
way certain Western psychoanalysts conceive of interior
work. By refusing to speak to the patient and confining
themselves to listening, don't they overlook a powerful tool
of liberation? When the right or true word comes to strike
against a paralyzing mental construction, an opening en-
sues - a new space where whatever suffers can finally

73
breathe and rediscover the world. Of course, to be capable
of such speech supposes that one has oneself abandoned
all ngid frameworks. But without having done this, can
one truly hear someone else? It seemed to me that deep
listening and deep speech couldn't be disassociated, that
you can't have one without the other, and that probably
the great therapists are those who have access to both these

inseparable tools and make use of them.

Later, Devi spoke to me about the next five tattvas:

the feet,

speech,

the hand,

the anus (as the excretory organ),

the genitals (as the urinary and sexual organs).

"These tattvas are linked to the organs of action. First of
all, there are the feet, which serve to move us on the earth,
to walk in full consciousness, as we are coming to do. Then
there's the rattva of speech. I speak to you. I open your
consciousness. My speech 1s true. The tattva ofthe hand 1s
seen here not in the sense of touch but as the faculty for
giving, seizing, moving, shaping, transforming something.
I seize this branch; I can make it into a tool. I take some
clay; I can make it into a pot. It's the creative capacity of
the hand - that of a dancer, a musician, an artisan.

"The next tattva is linked to the excretory organ. It's the
typical example of an activity we perform every day, which
seems to us not worthy of consciousness. Tantrism tells us
that to excrete in consciousness 1s as profound a medita-

tion as any other. Thus, when you are going to relieve
vourself, grasp this bodily movement, which takes in and

rejects, which opens and closes, which lets pass through

74
you what you have absorbed of the world.

"Next comes the tattva of the sex organ in its double as-
pect: that of urination and that of sexual use. In frenetic or
compulsive sexual pursuit, the face often shows only pain,
tension, constriction. When a man penetrates a woman in
full consciousness, time 1s dilated, pleasure 1s extended, all
the senses are opened to this experience, and suddenly the
bodies truly take their place in space. Play, laughter, breath-
ing, the shuddering of the limbs, all tend toward opemng.
The eyes, the intimate organs, the heart all come alive. The
whole chemistry of the body 1s altered, the mind eases, and
the brain teems. The skin softens and exhales its perfume.
At this moment only, two bodies communicate deeply, and
there is something of the divine in the sexual relationship.
When two bodies are nude and embracing, they discover
that space where they can let things be. Beginning from there,
the tantrika can go much further still. But without this pre-
liminary presence with the other, relaxed and in perfect har-
mony, all asceticism 1s bound to fail."

Dewi sat on the ground. I sat beside her. She inhaled the
odor of the forest. I became conscious of the space that
these essences opened in me. Time became more fluid,

everything taking part in our breathing. Dewi took my hand,
felt it, caressed it, until Ibegan to feel overcome with heat.

She spoke to me, still holding my hand in hers.

"Now we come to the five tattvas of perception:

the skin,

the eve,
the tongue,

the nose,

the ears.

75
"These are the tattvas of contact, sight, taste, smell, and
hearing. These fattvas are subject to intense activity all day
long

=

and we usually have a well-developed awareness of
them. Nevertheless, none of them alone seems to us worthy
of really practicing in full consciousness. We aren't fully
conscious of our skin. We aren't fully conscious of all that
our eyes see. We aren't fully conscious of the taste of the
food we swallow, the lips and the limbs of those we em-
brace. In the world of sounds, we have only a very limited
consciousness. If we close our eyes and really listen, where
would consciousness stop? Until we let ourselves be car-
ried by sounds, consciousness is closed to the infinite.

"We subject these five rartvas to compulsions. We lose
their richness. Everything is rushed. How long since we've
delighted in eating a piece of fmt? How long since kissing's
made us lose our breath, feel dizzy, and blush as a wave of
energy surges through our bodies? How long since our lips
have traveled up and down the whole body of the one we
love? How long since we've smelled the world? How long
since we've sensed a being's distress or joy by the odor?
How long since we've lost ourselves looking at the marvel-
ous wings of a butterfly, at the clouds, at the stars, at the
bark on a tree, or into the eyes of another human being?
How long since we've understood what another human

being says to us, not by the words but by the inflections of
the voice, its timbre and tone?

"Without a deep connection with these things, the heart
1s not opened. All that we exclude from our experience
because of principle, belief, fear, ideals, ignorance, or lack
of attention feeds our protective systems, which are slowly

transformed into prisons. The day comes when we are so

76
well protected that others no longer even think of speak-
ing to us, looking at us, touching us, tasting us, or listening
to us. Non-commumication with the tattvas 1s the material
with which we construct our solitude.

"The next five faftvas are

the mind,

the intelligence,

the objective ego,

prakriti (linked to Shakti),

purusha (linked to Shiva).

"These are the tattvas of thought. The first 1s the matnix
of thought. All thought emanates from it, without distine-
tion. The next taftva, that of the intellect, or of decision
and reason, guides us in our actions. The tattva of the ob-
jective ego is very insidious. It permeates all our actions
and gives us the impression that we have accomplished
this or that thing. I meditate, I am sitting, I open my eyes.
It's this restrictive objectivity that brings all experience of
the world back around to the ego.

"The last two tattvas of this group can't be separated.
They form nondualistic reality. They are prakriti, power or
nature, the goddess, united to purisha, the orgamzer, Shiva.

"Prakriti 1s the substance of the universe, its core, 1ts fim-
damental power. Everything that lives 1s woven from this
element. Whatever the shape or color, the patterns, the thick-
ness, the size, the quality of the woven piece, it 1s always
from the skemn of prakriti. It's all just a web made from the
primary energy of prakriti. The patterns evolve, change,
disappear, and return in other forms, but the skein - which

never stops unraveling, allowing form to enjoy its divine free-
dom - is constant.

7
"If vou stay with this image of weaving, purusha is the
weaver lumself. Without the skein, he couldn't produce.
The skein by itself can't take on shape. Purusha, then, is
the principle that penetrates the material and gives it a
particular form. One can't exist without the other. Whether
things are clearly visible or veiled, puirisha is the organiz-
ing principle.

"The play of purusha and prakriti 1s limited by the action
of the next six fattvas, called the six cuirasses. They are

time,

space,

lack,

limited knowledge,

limuted creativity,

overall illusion.

"This 1s an extremely important point of Shivaism, since
the consciousness is founded on and set free by these cu-
rasses, and that's enlightenment or awakening. These cu-
rasses are like veils that prevent a spontaneous view ofthe
self. Without them there would be no practice, no search.
Everything would appear to us in its absolute nature.

"The first cuirass 1s that of being subject to the illusion
that time exists and that we are bound by it. This illusion
fixes us within a limited time frame. It gives us the impres-
sion that time passes. After awakening, one discovers with
wonder a new terrain where nothing is subject to time. It's
like waking up after a bad dream and realizing that this
restriction was artificially imposed upon the consciousness.
You want to laugh, to cry "What trickery!’ You want to run
through towns and villages to tell everyone, but they would
think you were crazy. That's the first breath of awakening.

78
It gives back a watality, a color, and a clarity to everything
seen outside of time.

"The second cuirass is that which makes us believe we
are subject to the illusion of space and that we are located
there. This illusion makes us say, T am in this place where
my feet are planted. If I wish to be somewhere else, I wall
no longer be here. You have to choose to be here or there.’
But really, that's not so. After awakening, we realize sud-
denly that we are ommipresent, and with the greatest joy,
we want to proclaim this. We are everywhere. There's no
point in space that is not our center. There 1s absolute in-
terpenetration with all universal structures. It's like the in-
side of a pot. The air inside says to itself, "The umverse is
tiny. I see only a small circle of sky. Around me, a wall of
earth marks the boundaries of my life. What's outside?’
Suddenly, Shiva comes and smashes the pot. The air that
was imprisoned by restrictive thought is instantly merged
with the universal air mass. That's exactly what happens at
the moment of awakening, but also at death. Once the
boundaries of the ego shatter, the divine returns to the di-
vine, energy to energy, space to space, the heart to the heart.
Then, anything 1s possible but nothing 1s certain. Popular
teachings sometimes speak of reincarnation. The highest
Tantric teachings say that fundamentally there is no birth
and no death, only the illusion of being enclosed in a pot,
creating the desire to be rejoined with another pot. The
debate over annihilation or eternal life is something adepts
transcend as soon as they recognize the nature of their own
minds.

"The third cuirass is the illusion of believing that we

lack something, that we are not whole. This is the illusion

70
that pushes us to always be searching for a way, a teach-
ing, a practice, one realization after another. It's the one
that pushes us beyond the Self. It's the one that makes
us unhappy, that makes us keep looking for new ways to
be complete. If we lived a hundred thousand vears, we
would never reach the end of our quest. We would still
lack something. Knowing this, the master invites the dis-
ciple to stop all external searching. No route leads to the
Self. Nothing can reopen the consciousness as long as
we haven't realized that we have everything within us.
The true Tantric master - it's not me, nor some other;
it's the Self. There's nothing to find out there. Every-
thing divine that we look for out there is in us. To real-
ize that is to find freedom.

"The fourth cuirass is the illusion of believing that what
we can know, what we can apprehend of the absolute, 1s
limited. We torture ourselves. We want to experience
awakening. We look at the masters. We implore their bless-
ing. We expect the gods to help us, and they look at us
without understanding, because for them, we are divine,
we lack nothing. So what can they do for us? We are like
a maharaja who owns unlimited land and walks along
the wall that surrounds his palaces, mistaking himself for
a beggar. No one would give him anything to eat for fear
of insulting him or being punished. We have such a thirst
for knowledge that we are fooled by our power to know.
It focuses on the exterior and deceives us with the illusion
that we are going to find what we lack. Divine knowledge
doesn't grow by accumulation. The more you try to pile
up knowledge and experience, the more you paralyze your

consciousness. Let's abandon this knowledge. It only inflates

80
pride. When I say that intelligence is not the way, I don't
mean to say intelligence must be rejected. I am simply say-
ing that intelligence which accomplishes anything appears
unsolicited. In tranquility it shines like a diamond. Let us
return simply to the source of our consciousness and find
there the treasure we sought on the outside. It's enough to
sit down, to forget books and discussion, to direct our at-
tention toward the heart. There the divine is found. There
15s the place of respiration where our breath mingles natu-
rally The infimte 1s no more than that harmonious breath-

ing, free of all thought.

"The fifth cuirass 1s the illusion we harbor in believing
our creativity 1s limited, sometimes even doubting that we
possess the least trace of it. That's what pushes us to revere
what others produce. To have beauty flow past us isn't
enough. This urge, which can open us up to our unlimited
creativity, 1s restrained by the idea that we aren't capable
of such splendor. We remain without a voice, the ribcage
constricted, overwhelmed by the beauty of the world. If
we truly breathed, this cuirass would explode, and the ob-
ject of our admiration would no longer be found in duality.
The beauty of the world would then be ours. Mystical ec-
stasy is just this sudden explosion of the small me, which
recogmzes the divine Self. Everything gathered up in the
consciousness 1s then projected into the infinite, and one
can cry out in joy because in this moment all the beauty of
the world becomes part of the Self.

"These five cuirasses are surrounded by a supreme cui-
rass, which 1s that of maya, illusion, in its own nature, which
welds these different protective plates together and insures
their artificial cohesion. We are decorated like fighting

81
elephants, forever goaded on by their driver. We advance
with all our weight to get through life, never ceasing to do
battle. But one day, the battle takes a turn that leaves us
covered with poisoned arrows. A young girl brings us some-
thing to drink. She speaks to us and caresses us. She dresses
our wounds. She bathes us in the nver, and suddenly we
find our grace, our lightness, our beauty again. No one
recognizes us as fighting elephants anymore. So nothing
stops us from spontaneously grasping the divine in our-
selves. What we don't know is that the smallest experience
can be just this miraculous meeting with the small girl. So
little can suffice. The scent of a flower, an open look, a
breeze brushing against us - and suddenly the most solid
of the cuirasses cracks, and through this gap all reality pen-

etrates us, freeing us forever from gravity and separation.”
I'd been living in my hut for about two weeks. Each morn-
ing, after meditation, Devi accompanied me in the percep-
tion and full consciousness of the play of the tattvas. Four
times, the 1dea pot filled up with little stones, which Dew
insisted I pile beside my hut and consider each morning.
Sometimes she ran her hand through them and said to me,
"I caress your disruptive ideas.” I had the impression that
the river couldn't supply me with enough stones.

One night I dreamed that I was sitting in my hut, an old
man, and that in front of me was a mountain of stones
symbolizing all the ideas that had cut me off from the mar-
velous mystical reality and blocked my view. A young girl
tumbled down the slope, laughing. She approached me. I
recognized Devi and woke up.

With time, the pot began to fill up less quickly. Day by
day, I felt a space opening in me, and the more it opened,
the more I was in a position to enjoy each tattva and their

83
complex orchestration, which I spent my days and a part
of my nights paying attention to. Each morning, Devi woke
me a little earlier, and our meditation lasted until the meo-
ment when the sun warmed us up.

Finally the day came when she told me about the last
five tattvas:

the consciousness taking on its true nature,

subjectivity invested with power,

the universal I,

Shakti,

Shiva.

These were notlinked, like the preceding ones, to objec-
tivity. Devi designated them as the tattvas linked to pure
subjectivity, which culminates in absolute subjectivity.

"The first tattva 1s that of consciousness taking on its
true nature, of the fragmentary and episodic realization of
the Self. The tantrika 1s subject to ecstatic flashes, during
which he perceives the universe as unreal before falling
back into ordinary perception. This first state you already
know. It 15s invaluable because it adds a real, non-theoretical
picture of realization to one's practice. It's a level easily
attained, once you give yourself over to continuous prac-
tice, even after only a few months. As with all progress,
this first level constitutes a patfall as well. The tantrika who
isn't guided by a master can mistake these first flashes for
final realization. Then he suffers from a break between the
reality of the world and lus ecstatic experience. He is inca-
pable of reconciling the two. One 1s full of pure water; the
other, full of sludge. The tantrika, at this preliminary stage,
can experience a distaste for the world and decide to retire

from it to preserve the purity of his mystical experience.

84
That's a grave obstacle to future realizations. When there's
a split, there's no true spiritual life. The solitary ascetic who
isn't capable of leaving his cave to exist in the world and
find the same peace there lives in a state of spiritual illu-
ston. Life 1s the great polisher of awakening. To flee from it
for good 1s to flee from the highest accomplishment. It's
cood, on the other hand, to alternate short periods of soli-
tude with a normal life in society. At this stage, the tantrika

is still subject to duality.

"The next tattva is the realization of a state linked to a
deeper subjectivity. The tantrika 1s less subject to fluctua-
tion. He feels himself overcome by a great power. Soon he
can remain in a state of ecstasy for hours without the
shadow of a disruptive idea. Not a single stone goes into
the pot. He feels very clearly that he flows throughout the
umiverse. Like a breath inhaled, he lets lumself go, under
the impression that he enjoys the reality of the world. But
his heart isn't completely opened, as he still falls back into
his ordinary state in which he no longer sees the universe
as an expansion of his being.

"As for the next tattva, which belongs to the same cat-
egory of higher subjectivity, the tantrika, in the course of
his ecstasies, perceives things differently still. He no longer
has the impression that the universe emanates from his
being, but simply that he is the whole umiverse, without
source or flow. The source 1s the vmiverse. The tantrika is
the universe.

"Finally come the last two tatfvas, which are interde-
pendent, amorously bound to each other, and situated alone
in absolute subjectivity. They correspond to the total

opening of the heart. At this moment, the tantrika no longer

85
lives as the absolute I. Duality is obliterated. This 1s the
state of Shiva: Being in the absolute sense, symbolized by
the Aham mantra.

"Even though we come to the end of the thirty-six rattvas
here, there is still the Being, Parama Shiva, who escapes all
qualification, all ideas. It is throughout, even in the infe-
rior tattvas, and there's where the deeply human beauty
and the greatness of Tantrism lies.

"Finally, not a single one of the thirty-six taftvas isn't
saturated by the absolute. Everything is saturated with the
divine; nothing can be removed from the divine. If you
realize that, you grasp the true Tantric spirit.”

For a few days now, after each oral teaching, Dewi drew
closer to me. She took my two hands in hers and, in a very
soft voice, said to me:

"And now, listen with your heart. This is the most impor-
tant part ofthe teaching, the silent teaching. What 1s mar-
velous 1s that the heart has absolutely nothing to say.”

We remained like that for about half an hour. Then, day
by day, the length ofthis teaching became longer. The sen-
sation that overtook me during this transmission was very
special. I had the impression she let loose in me a swarm of
bees, which I felt humming and infiltrating throughout as
if I were a field of poppies opening their petals. I felt them
gathering nectar. I was no more than pollen and honey.
Very often, strong emotions were released in me during
the silent teachings. Many times, I cried as 1fI were expel-
ling fragments of my fundamental fear. When I had calmed
down, Dewi let go of my hands and we went to bathe or
walk silently in the forest.

Later, seated in her hut, we ate and we drank tea, and 1

86
asked her all sorts of questions, which she graciously an-
swered. These were pleasant moments, a sort of game,
which I found necessary and which opened large swaths of
reality for me. Sometimes we had discussions while we
prepared the dal, cutting onions, picking over the lentils,
roasting the curry powder.

Often, at these times, Dew talked to me about her life
and asked me about mine. The atmosphere was intimate
and relaxed. Devi showed nothing of that aspect of impres-
sive power I saw in her now and then. We were a woman
and a man seated in a hut, completely occupied with the
pleasure of conversation.

One day, I asked her what distinction she made between
the Tantric Shavaic teaching, which sees consciousness as
the receptacle of the universe, and Tantric Buddhism, which
rejects consciousness as an illusory form. It was the debate
between the Self and the Selfless that had mobilized great
energies and had been the subject of polemics and coun-
cils, and grounds for mutual condemnation and rivalry. Devi

laughed, taking on the vague and tender look she had each
time she told me a story about her life.

"After leaving my master, I decided to go meditate in a
cave, alone. Certain spots in the mountains, many days or
even many weeks by foot from any village, have been known
to ascetics for thousands of years, and often one becomes
only one more occupant of a cave where dozens of sages

have lived. Sometimes, one finds Buddhist sutras engraved
in the stone, sometimes Sanskrit letters or mantras. The

caves are often found in a place in the mountains that
resembles a hive, and it happens sometimes that many

dozen ascetics are living within the range of each other's

87
voices. There you find Tibetans, Hindus, tantrikas -
sometimes even Chinese and monks of the Small Vehicle
with their saffron robes. I've even seen Japanese monks
with their straw hats and black gowns. Sometimes, one
of the hermits goes down to look for food. Sometimes
they speak to each other as they draw water from the
spring; they laugh and they dance, though the people in
the valley can't imagine it. Sometimes a hermut dies, and
they burn him or bury him or leave him to the vultures.
Sometimes a hermit gets sick or is taken by what we call
'the immense fear.' All hermits know this or will know it
one day. It 1s the ultimate crack in the Self, the doorway
of the divine.

"One day, a young hermit arrived in the mountains. He
must have been about twenty-five years old. He was Indian,
but he had followed the teachings of a Tibetan Nyingmapa
master. He had done a six-year solitary retreat, at the end of
which he had decided to live as a yogi. This young hermut
was not like anyone else. At first, he was taken to be mad. It
happens from time to time that a hermit loses his mind and
wanders about in the mountains. Sometimes he spontane-
ously regains his sanity, sometimes not.

"Our young Indian yogi had a hot-headed and unpre-
dictable nature. He was noisy. He sang at the top of lus

voice as he explored the caves. He laughed and told funny
or obscene stories. Sometimes he would shake the her-
mits to pull them out of samadhi and insult them by say-
ing that they were lost, that their meditation was as rank
as a cadaver, and that they hadn't grasped Rigpa, the

pure presence. Believing him to be crazy, some laughed

and others threw him out, sometimes violently. After

88
being hit by a lot of stones, he'd calm down, but as soon
as he recovered he'd start harassing us again. As for those
who believed in the idea of Self, of consciousness as re-
ceptacle, he'd shout into their ears that only non-Self
was supreme. As for those who clung to the idea of non-
Self, he threatened to carve the consciousness to bits with
a knife for them and find the Buddha there. He walked
around with a large Tibetan knife, which he took out of
a silver case on which the image of a dragon was en-
eraved. Soon he was called Dragon.’ Since he was both-
ering the ascetics, one of them proposed that we should
meet together, and according to the ancient tradition,
we should debate the question of Self and non-Self, on
the condition that following the debate, Dragon would
retire quietly into a cave and not trouble the ascetics
anymore. Dragon accepted this proposition and saw to
hawking the news of it in such a way that precisely those
who weren't going to go along with the debate were his
constant victims. Thus, on the chosen day, twenty-three
ascetics found themselves on the knoll where the debate
was to take place. According to ancient custom, the op-
posing sides faced each other: in one line, the partisans
of Self, in the other, the partisans of non-Self. Only
Dragon constantly switched sides. The debate began
unenthusiastically. Then, with the skill of the arguments
and the richness of the supporting citations, things
warmed up, and it became a real debate. It's said that in
ancient times the loser in a philosophical debate was
put to death or exiled. In the scriptures, there are nu-
merous allusions to these duels, which sometimes

changed the destiny of a kingdom, as in Tibet, where

89
Ch'an ascetics were forced to retire after losing a debate
against Indian Buddhists. *

"Dragon abused the ascetics. He jumped on their backs
and cut locks of their hair. There was such fire within him;
I found it magnificent. He had succeeded in making twenty-
three yogis come out of their lairs. That was a feat. He
didn't bully me too much. He'd come into my cave only
once and, after seeing that I was a woman, had retreated.

"The debate was a wonder of humor, erudition, finesse,
and skill. A few ascetics dominated. The others let them
debate. Some of them had spent more than thirty years in
the mountains. The clanty of their look, their beauty, their
depth - it was wonderful. I savored it all. Night approached.
All of a sudden, the oldest among us said that it was time
to conclude. Dragon breathed his fire one last ime and
turned toward me. "We have the good fortune to have a

dakini among us. She 1s enjoying the debate. As for me, 1t

*The orel debate bebween the two schools took place in Samye, near Lhasa,
around 780, and its conclusion resulted in the official ban on Ch'an, accord-
ing to Tibetan sources. A Chinese layman, Wang 34, who has given a sum-
mary of the debate, defended the thesis that the Tibetan king Trizong Detsen
personally preferred Chan, but officially adopted the Indian doctrine defended
by Santarksita and Kamalasila, as conforming more to the spirit of lus people,
fascinated as they were with magic and occult powers

We now know that the partisans of Ch'an, perhaps under the tacit protec.
tion of the king, would continue to practice these teachings after the Chinese
masters departed, under the Tibetan names of Mahamudra and doogrhen 4
mumber of texts of the teachings of great Ch'an masters exist in Tibetan trans-
lations and are there to attest, as if there were any need for it, to the depth of
the mark that Clfan has left on the highest aspects of the Myingmepa and
Kagyupa teachings.

90
seems that the evening is still young. I will enter into si-
lence only if the dakin: decides to conclude it.’

"All the hermits agreed. They tured toward me. I moved
forward between the two lines. I sat down and entered
mto deep samadhi. When I opened my eyes again, it was
night. All the ascetics had gone mto deep meditation.
Dragon was facmg me. I had concluded. Only deep prac-
tice of non-duality transcends Self and non-Self Dragon
had made a wonderful incursion mto our tranquility. Ev-
eryone bowed to him deeply before going back to their
caves in silence. As for me, I took Dragon by the hand and
performed the sexual ritual of the Great Union, or maitina,
with him. Then he went into a cave, and we heard from
him no more.”

01
10

Each day, Devi made me feel the reality of the world through
the play of the tattvas. All experiences - from walking to
bathing, from meditation to a meal - were occasions for
remaining fully aware and present. The idea pot filled up
less and less quickly. Dewi's infallibility goaded me on as
my mind opened up to such play and little by little lost its
rigidity. Devi asked me about the teaching I'd received from
Kalou Rinpoche. She wanted to know every last detail. For
a whole week she interrogated me on this experience alone,
especially on the deep nature of our relationship. Often,
during these accounts, she let out a sort of sigh of plea-
sure, and she bowed, her hands in a lotus before her heart.
The day when I showed her photographs of Kalou Rinpoche
published in my book Nirvana Tao, tears came to her eyes,

and she said simply:

"It's lus love that made you come here. Your heart wall

open.”

02
The next day, there was a fundamental change in how
our days unfolded. Dewi told me that I was beginning the
preliminary practices for imitiation and that following her
instructions to the letter was of the greatest importance.

Three times we entered the river and three times we
let ourselves be dried by the wind. We climbed back up
the hill. Devi told me to draw some water and follow
her. We forced our way into the forest. After three or
four hours of walking, we stopped near a Shiva [inga at
the foot of a great tree. Near the tree was a hearth. Dew
built a fire. We drank a little water before meditating
and beginning the silent teaching. When we finshed,
the fire was out. Dewi told me to undress. She rubbed
my body with coals that were still warm and made me

sit down facing her.

"You are now clothed in space. Your nakedness comes
from stripping away all concepts. Ash 1s the material ofthe
mind, calm and free of disruptive illusions. Your breathing
is the divine breath. That's what I am going to leave you
with here. You have nothing to do but examine the various
forms which your mind 1s going to take on during these
three days and three nights, and recognize where they come
from. Fundamental fear must be perceived at the moment
when we create it. Stay at the foot of this tree; conserve
your water. I will come back to find you.”

Dewi saluted me. I bowed low. She took my clothes. I
watched her disappear through the trees. Soon I no longer
heard her feet. Then my panic very gradually began to rise.
Even though the temperature was still mild, I began to

shuver. I tried in vain to revive the fire. Not even the small-
est ember remained.

93
By the time night fell, I had completely orchestrated my
own fear, and the least little noise made me jump. Leaning
against the tree trunk, watching the shapes of the trees
erow dimmer in the moonless might, I devoted myself to
the Shiva [inga with exaggerated piety. The words of Ram,
"This woman is very dangerous." served as my mantra.

I had the impression that all the ammals of the forest
came to look at this ascetic, a little pale and exuding the
odor of panic through his ash garments. One night can be
very long. I fabricated monsters, venomous serpents, mad
ascetics springing up, one after the other, out of the for-
est - bears, tigers, and leopards. The dangers seemed more
and more real to me. I didn't dare get up or move, close my
eves or leave them open. I imagined that Devi would never
come back, that she was toying with me, and that, come
morning, if I went back down to our huts I wouldn't find
her there. Sometimes I thought that Deva was there, very

close by, peacefully seated in meditation.

After a few hours of panic, I realized that I was hardly
breathing and that, after all was said and done, Dewi had
left me only my nakedness, my ashes, and my breath. I
tried to use it to relax my diaphragm, to produce warmth,
but it was impossible for me to meditate. It seemed as
though my mind had never been so exposed. Everything
reverberated in it.

At one moment, I believed I heard something breathing
in the night. I was paralyzed. My mind told me to get up
and find a heavy piece of wood to sweep across the area in
front of me, but I couldn't budge. I smffed the mght air like
a small ammal trying to catch the scent of a tiger. I was
sure I smelled a human odor. I was about to cry out but

04
stopped myself as soon as I realized that by doing so I risked
drawing the attention of those not already there.

My teeth chattered until dawn, when, astonished at see-
ing nothing but trees in that first light, I fell asleep, exhausted.

When I woke up, a gentle warmth pervaded the forest. It
must have been a little past noon. I got up, drank a bit of
water, and took a few steps to stretch my legs, as if aston-
ished to have survived that first night. I took the opportu-
nity to breathe and to offer a few little mauve flowers I found
in the woods to Shiva. I poked fun at myself, and without
thinking too much about the might ahead, I spent the day
meditating, breathing, touching the trees, and thanking them
for their protection.

The panic had changed into respect but not yet into
complicity, much less non-duality. I would wish so much to
be a tree before the day was over!

I rubbed more ashes on my body. They formed a very soft
film, allowing my skin to better withstand the cold, which had
penetrated almost to my bones the night before.

As the afternoon ended I was tempted to go back down
to the huts, to return to the village, then to Sonada, to
Kalou Rinpoche and my little cell in the pinnacle of the
temple. Surrounded by monks, keeping to the Mahakala
ritual, protected by the power of my master. Then I thought
about Devi again. She had warned me. There was no stop-
ping, no turning back, no running away.

I tried to see into the future. If the test of the forest preceded
the fust imtiation, what would the tests that followed be like?
Dewi had spoken to me of hatred. But for the moment, I was far
from hating her. I didn't even wish for her not to be making me

face my fear, face the fabrications of my own mind.

05
I was still pursuing these thoughts when the light began
to fade. I sat down firmly at the foot of my tree and tried to
elaborate a strategy for passing the second mght. Breathe.
Breathing seemed to me the best solution, and thanking
the trees, the forest spirits, the animals, the ascetics who
lived there, perhaps.

Later, before night had completely fallen, I practiced guru
voga, and, visualizing the line of transmission, I invoked
the great Kagyupa sages and realized that all of them had
been obliged to live in the forest and pass through their
fear. I implored their aid. In that instant, it seemed that my
devotion had never been so intense. I implored Dewi's aid
as well. When the night-blue body of Vajradhara, incar-
nated as Kalou Rinpoche, installed itself in my heart, I be-
lieved I felt the influx of the lineage. My breathing found
its depth, warmth spread throughout my abdomen, and I
rediscovered the profound sense of well-being I had known
throughout the months of intense practice.

When I ended my meditation, it was night. T visualized
Tilopa, Naropa, Marpa, Milarepa, the dakinis, Nigouma,
and Sukasidha, in the company of Dewi, all in a circle around
me like a protective halo.

Everything would have gone well if, during the course
of the might, I hadn't heard some sort of frightening grunt.
Panic reclaimed me, the masters of the line went off on an
expedition, Devi abandoned me, and I found myself alone
again with my mind, which had now changed into a pro-
ducer of horror films. Once the mind gets carried away,
human, animal, and mythic monsters can spring up so easily
out of nowhere!

That night, again, no one devoured me, and my devotion

06
extended to the trees, the stones, the roots, the mosses,
and the insects. There are many to thank in a forest.

That kept me busy until evening, when I realized I hadn't
even had time to be hungry.

The entire third night was taken up by an intense recog-
nition. I was there, in the middle of this forest, which lived
and let me live. Not only did it accept me, but it served as
my master in showing me that I was the sole creator of my
fears and my anguish.

Dawn came rapidly. All of a sudden, I saw Dewi, sitting
facing me, three or four meters away. She stood up and
took me in her arms. In a single stroke, she gave back to
me all the warmth of the world.

At that moment I felt all the gratitude that I'd experi-
enced over the course ofthese three days being transferred

to her. I had the impression that my whole body felt that
umbilical cord she'd spoken of It went from my belly to

hers and then, like a huge red luminous serpent, passed
through the bellies of everyone, the center of all things,
animate or inanimate.

"Let's go down and eat some gruel,” Dewi said.

97
11

The following night, I did not sleep in my hut as I had hoped.
Dewi told me to rest during the afternoon. Come evening, af-
ter supper, she took me to the edge of the chif

"This 1s where you're going to meditate. Standing, your
feet on the edge of this rock. Don't look at the river. Keep
your eyes opened, fixed right in front of vou, looking into
space. When you can't stand up anymore, take the cross-
legged posture and continue to meditate. When fatigue
makes you slump, stretch your back and do the relaxation
exercise that we call the rest of the sarangi. When the mu-
sician puts away his instrument, he slackens the strings
one by one. Thus, imagine that your muscles are strings,
that the pegs of the instrument are driven into each joint.
Beginning with the feet, relax the muscles one by one, let-
ting them bow toward the earth. Proceed in this way mov-
ing up to the knees, hips, sides, collarbone, wrists, elbows,
shoulders, temples, and then to the top ofthe skull. When

98
vour whole body is loose, center on breathing, and relax
completely. Then rest, and reverse the process, but with-
out tightening the strings too much or tiring the instru-
ment. After this practice, you'll have recovered all your
energy."

For one second, I looked down. The chff wasn't more
than twelve meters high, but it was high enough to break
bones on the rocks below. Nude and coated with ashes, I
asked myself how I could maintain these three positions
on the edge of the void. Devi went away, and a bit later I
heard her singing, as she often did in the evening.

At first all this was not too difficult, but once night fell,
the rumbling space was transformed into an abyss. I'wanted
to step back, to relax, to resume breathing and move on to
the second position, but Devi had been very specific about
the necessity of waiting as long as possible.

At this moment, the image of the body of the man pulled
out of the river came to me. I didn't know to what extent
Ram had been telling the truth, and I couldn't really imag-
ine Devi capable of provoking a man's death. It had to have
been an accident for which she was blamed. Perhaps it
wasn't even a hermit.

The hours passed. My vigilance was wearing thin. It was
extremely difficult not to move. My whole body hurt. My
legs trembled, and the incessant droning of the waterfall
had a hypnotic effect.

I was trying to concentrate on my breathing when, in
the middle of the might, I felt a hand between my shoulder
blades. I made an enormous effort not to turn around, not
to let myselfbe thrown over the edge. One more time, my
mind provided me with a series of catastrophic scenarios.

99
At times the hand pushed me gently forward and I resisted.
At times the hand no longer touched me. Was this Devi or
my imagination? If it was Dewi, she knew of my fear and
the existence of the body retrieved from the river.

The day, the sun, the tepid air had a calmung effect. Ev-
erything seemed to be dispelled, and the three exercises
flowed into each other. I discovered that Devi had left a jug
of water, from which I drank with immense pleasure. I was
now accustomed to days of fasting and its purifying effect
on the body.

I was astonished at the extent to which the sarangi re-
laxation let me recover new energy, and the seated medita-
tion warmed me. I felt as ifT had a furnace in my abdomen.
But when evening came, I found myself standing on the
edge of the cliff again, and I realized how much trouble my
mind had exhausting the morbid stream of images run-
ning through it.

At one point, toward the end of the second night, I was
convinced that Devi was going to kill me. I raged at my West-
ern naivete. It all seemed absurd to me. My nerves were
frayed. I'wasn't far from my hut. I was tempted to run there,
collect my things, and leave forever this woman whose se-
ductive power hid a taste for manipulation - perhaps even a
certain madness. I spent hours lining up end to end every-
thing that seemed crazy and absurd to me at this moment,
and I surprised myself by crying a thundering "No!" out into
the mght. I refused to be the plaything of a woman who, in
her solitude, had lost her reason. Where would all thas lead
me? Wasn't there a kind of threat in her demand that I to-
tally accept her orders? I risked great trouble! Maybe I risked
even greater trouble by staying. I thought of my friend Ram,

100
of his sincere affection and of his warnings. Well, I wouldn't
have to look at Devi's wild-eyed expression, her enormous
tongue, and the blood that stained her body any longer. Then,
at that moment, I stretched and relaxed. I must have slept
an hour or two. When I woke up, I went back to standing at
the edge of the chff.

Two nights exhausted my fantasies one by one, and by the
morning of the third, T was still on the edge of the chff, alive
and standing. By this tume, I'd given up fighting, and when
the hand gave me a distinct shove, I gave myself up for lost,
anticipating a fall, which despite everything never occurred -
because, with one swift motion, Dewi pulled me back.

One more time, I found myself in her arms. I had the
impression that each test was helping to build an indestruc-
tible bond between us. This time, my nerves were shat-
tered. I didn't know what I was crying about, but I was
sure that the torrents oftears pouring out of me had come
from a long way off

I was entitled to an excellent meal of nice and dal, and to
rest, which had never seemed so delicious to me. I woke sev-
eral times. I opened my eyes, astonished to be there in the
calm and the solitude, listening to the sounds of the forest
with wonder. I was enthralled at what deep happiness the
least little thing held for me, and I fell asleep again in a sort of
bliss, which seemed to grow each time I reawoke. By now I
had fallen into the habit of sleeping curled up like a hunting
dog in the hearth pit - widened to accommodate me - naked
in the soft ashes, as I had been instructed by Devi.

The following night, Devi covered herself with ashes. A

crescent moon rose. Devi led me by the hand to the center
of the esplanade.

101
"Listen to the might, the music of the stars, the songs of
space.”

She opened her arms and, very slowly, began to dance.
She turned in circles, moving her arms like a great bird
taking flight.

"Shiva 1s the god of the dance. Honor him until you're
exhausted, and then you will fall on the ground, be whole,
and transcend duality!”

Then, like her, I began turning in circles. Little by little,
I felt my arms join in, tingling in space. Never had I felt
such life, such a vibration rising from my legs and spread-
ing throughout my whole body - even into my hair, which
seemed to stand up as a shiver went through my scalp.
There was an intense humming around my eyes, my mouth,
my ears, and each millimeter of my skin danced with the
night.

I felt an irresistible joy coming over me, and I broke into
laughter. The more I turned, the more I laughed. I drank
space, and the intoxication of being alive filled me. The
steadily turning stars mirrored us like a sort of cosmic disc.
Dewi herself also laughed. Sometimes she approached me
and brushed against me with her whole body. My penis
became erect. While dancing, I felt it rooted in me as 1fit
extended through the pubic bone. I felt like one of those
ithyphallic sculptures of Shiva. We spun like naked der-
vishes, carrying along the earth and the sky. Sometimes
Devi sang; sometimes she simply listened to the music that

seemed to spring up out of the whole cosmos.

I was astonished to find that my erection elicited in me
no sexual desire. It was as if the phallus rose naturally to

take part in the dance. The usual mechanisms were no

102
longer operating. I discovered, simply, the joy of a body
open to space, to the night, to the divine.

For three nights we spun - playing, laughing, sometimes
absorbed in the astral silence. And in the moming, we let
ourselves fall on the ground in radiant exhaustion. Dewi
explained to me that her master had made her climb up
and down mountains until this point of exhaustion, which
allows us to drop and to drop hold of the root of duality.

The following might, seated in Dewi's hut, I recerved my
first initiation. Devi made a fire. I prepared two garlands
of wild flowers that we exchanged. We entered into
samadhi, and Devi performed the direct transmission, from
heart to heart, which left me in a heightened, vibratory
state. When she put her hand on my head, I felt a very
vivid luminosity envelope me completely. She let me slowly
emerge from this state, then spoke to me with such gentle-

ness it was nearly a murmur.

"The first imtiation represents the gift you make to me
of the life that is beginning to be born in you. Through me,
you offer to Shiva your superficial fear, vanquished over
the course of these tests. You offer to Shiva your energy,
symbolized by your erect phallus during the dance; you
offer to Shiva the wonder that is beginning to be born in
you. You offer to Shiva your laugh, your dance, your body
purified by the fire of your heart. You offer to Shiva your
nakedness, which symbolizes the nakedness of your heart,
naked with regard to concepts, dogmas, beliefs that are
the adversaries of Awakemng and that no longer have a
hold on you. You offer to Shiva your mind, which is begin-
ning to quiet down, but also your raw intelligence, uncut,
like a natural stone that hasn't yet passed through the hands

103
of a jeweler. This unsolicited intelligence - it's the primal
matter, vigorous, unmarked, the divine glistening through
it. With culture, cutting, the intelligence may seem more
brilliant, more sparkling, but it is also cut off from its origi-
nal purity. Cutting, culture, makes it like other cut stones.
And the intelligence, or the mind, loses its uniqueness and
becomes absorbed in social games, which diminish it even
as the opposite illusion 1s created. It's this raw material
that's truly divine because it's in harmony with the uni-
verse. No one cuts the stars. No one designs the forms of
the rivers; they flow by themselves. The tantrika 1s like a
river that never stops flowing in the divine because the

divine never stops flowing in it.

"In making these offerings, in recerving this imitiation,
you gain access to the knowledge of your own divine sub-
stance, and you open yourself to the Tantric experience of
time no longer passing. Your meditation will be easier. The
illusion of believing that time can be parceled out will ap-
pear to you in all its absurdity, and you will taste the nectar
of undivided time.

"Initiation also involves a rupture with the myths of the
specific society in which you live, establishing a profound
and unconditional tie with all human beings and wath all
that has previously seemed inanimate to you. Imtiation re-
leases you from taboos and social, dietary and sexual prohi-
bitions, and more importantly, the prohibitions linked to ideas
and thought. It's a liberation with regard to dogma, to be-
lief, to doubt, and to theory. The tantrika plunges into real-
ity with the whole bodymind. He doesn't skim; he experi-
ments. He lives the teaching, and by lus living he continues
the flow of the Tantra. That's the meaning of the word Tantra:

104
continuation - continuation of the Tantric experience through
the tantrika. A chain of women and men who risk the real
and are no longer subject to the compromises social beings
submit to. Initiation marks as well the secret in which the
tantrika must lock himself away until the day when his heart
completely opens. Only then can he identify himself as a
tantrika. That's why, when you leave here, you will pretend
to know nothing about Shivaic Tantrism. You won't take part
in a single discussion on the subject. You won't write any
books before your heart opens, keeping within you the se-
cret of your initiations until the day when the fruit ripens.
You will practice in secret, not distinguished by rudraksa
grains, a Shivaic trident, or anything else. If by chance, cer-
tain people talk about the Tantra, don't correct their mis-
takes, don't guide them, don't direct them to me or any other
master. The aspiring tantrika must find his master by
himself."

105
12

Devi waited for me in her hut. As we had done each morn-
ing since the day of imtiation, we began by going down to
bathe, then dried ourselves in the sun before going back
up to meditate, sometimes in the forest, sometimes in Dewt's
hut. Then Devi gave me an in-depth explanation with com-
mentary on each of the one hundred and twelve verses of
the Vinanabhairava Tantra, which offer the yogi all the ways
of practice and give a complete account of the teaching at
the same time.

This particular morning, I felt the need for Dewi's teach-
ing on meditation. I told her this. Iwas seated facing her. We
bowed to each other. Devi always paused before speaking. I
had the impression that she situated herself comfortably in
the silent space and that the words didn't come out of her

mouth until T myself was also seated in that same silence.

"Meditation. It's the spontaneous experience of non-

duality In our system, there's no concentration on images,

106
no ritual to induce the meditative state. We work with the
raw consciousness without forcing it to be anything. If we
make use of the mind to build something, we encumber
the temple.

"I come back again to this image of the temple, of wash-
ing it down and airing it out, ofthe light that penetrates it,
and the flight of all those voices hindering the spontane-
ous experience of non-duality. It's a major point, and it's
the jagged rock most of those who begin spiritual quests
stumble over.

"The first emptiness is easy to attain if one devotes a
little consistent and regular effort to it. Clearing the temple
of its little gray men - most ascetics achieve this much.
Nevertheless, once the work 1s done, there's immense n-
ternal pressure on the adept to backslide. After years of
asceticism, study, and arduous practice, those who retain
the suppleness of the newborn are rare. They start to ven-
erate an external person, external teachings, or a body of
beliefs, concepts, and practices, considering them superior
to all others they've known until then.

"They then take great pains to put these teachings in
flower baskets and deposit them in their temples, not real-
1zing that in this instant they've built new obstacles for their
minds. No matter how great the master or the teaching, it's
necessary to follow it without fixing it, without eliminat-
ing its subtle and changing character. By taking hold of
something in order to systematize it, one fixes it, and in
fixing it one immobilizes it. And little by little, that which
we believe to be supreme is crystallized in us, grows big
and heavy, and leads to our demise. Always keeping that in

mind 1s of the greatest importance. As soon as there's a

107
system, the Tantric spirit is lost. As soon as stockpiling be-
eins, the Tantric spirit 1s lost. This awareness 1s what gives
Tantric writings their unique fluency, like a river that can't
be stopped. As soon as devotion for one's master makes us
ignore the master in ourselves, we no longer take part in
spirituality. As soon as we lose contact with reality in order
to follow the Absolute, we lose contact with the Absolute.
The entire Absolute 1s contained in reality. There's not a

trace of it elsewhere.

"Guard the empty, open, silent temple. That's the only
way to experience non-duality. As soon as any voice begins
speaking inside us, we deviate from the Tantric way. True
devotion, absolute love for a master, means realizing deeply
that he has never said anything to us. He has only opened
his heart to us so that we could see our own there. That's
all. To see our hearts, our minds, to come back to the mar-
velous source and not lean on anything. It's a little like
modeling an immense statue of Shiva out of earth. Little
by little, you'd need scaffolding to reach the knees, the belly,
the shoulders, the head. And when you finished, the divine
would be imprisoned in a bamboo cage. As the divine
breathe, a single breath of Shiva would blow the cage to
bits, and the divine, liberated, would fly away with great
speed. So don't do this. Don't seek the divine by construct-
ing a cage around it. Simply breathe. Breathe deeply and
no one can put you in a cage.

"All we do 1s make ourselves concentrate on the breath
in the center of the heart. Little by little, breathing 1s re-
fined and extended, and without your doing anything else
at all, the chakras awaken and spring forth; the wheels

begin to turn. When you inhale, the whole universe inhales

108
with you. When you exhale, the whole umiverse exhales
with you. To breathe 1s to complete an incommensurable
cycle of creation, expansion, resorption, and annihilation.
We are only in the exhalation phase of the universe, every-
thing moving away at an amazing speed. One day, the uni-
verse will be in its inhalation phase and everything will
draw close at the same speed. Thus, a single breath of yours
accompanies the creation of the world and its resorption.
When awakening occurs, one lives this explosion, which
projects all the residues of the consciousness out toward
infinity. But one also lives the complementary movement
of resorption because it 1s the same mmage of life. Many
adepts deny this phase. They don't perceive that in essence
it 1s its opposite as well. When there's no more movement,
there's no more life.

"The mind always wants to cling to concepts. From
childhood it is trained to devour concepts. It 1s never sat-
isfied. It always wants more of them, like a wandering
ogre. In general, one spends the first part of life search-
ing, and the rest, dying spiritually. The fatal moment when
everything is reversed 1s the moment we fossilize our
knowledge into belief. It's all the more pernicious because
it's precisely at the moment we begin our descent that we
have the reassuring impression of taking a big step toward

CONSCIOUSNESS.

"Very few are capable ofthe second temple cleaning. To

empty it of all concepts, beliefs, dogma, of all ideas of the
divine - that's the Great Yoga. As soon as it's accomplished,

one discovers the freedom to which all Tantrism leads.
That's why it's so difficult to become a tantrika and to keep

your hands in the earth without ever beginning to make a

109
model of the divine out of it. But that's how to situate
yourself at the center of Self and to gain access to the
heart, to the incomparable void.”

Later, I asked her for a teaching on the chakras.

"Chakra means wheel. It's like a potter's wheel. If you
push on the pedal, the wheel goes, 1f you don't push on the
pedal, it doesn't move. In other words, we don't have
chakras as long as we don't make them turn.”

"In the West, we worry about our chakras, like our hearts
or our lungs."

"Really? And where do you locate this subtle body?"

"Around the Self, above the Self, on some other plane.
There are many theories.”

"Nothing 15 elsewhere. Everything 1s here. Practice gives
birth to the subtle body. Practice gives birth to the chakras.
To be born, they must spin. Just as there's no infant with-
out sperm and egg, there are no chakras without medita-
tion and non-duality."

"On which of the chakras does one begin concentrating?"

"In our line, we don't concentrate on any chakra other
than the heart. Otherwise, you risk a wild outbreak of the
kundalimi, which can bring on anguish, depression, or
madness. We concentrate only on the breath passing into
the heart. That's what everything depends upon. When

the heart 1s radiant, empty, and peaceful, the breath rises
and makes the other chakras turn. Then alone can the

kundalini be released, because the passageway is not ob-
structed. My master, when he watched the great efforts I
made to always meditate more, used to smule and say to

me, Relax, Devi. One of the great secrets 1s that every-
thing is self-made.’

110
"That conflicted with my determination, my vital desire
to progress, to become an accomplished yogini. It would
take me years to realize and accept this profound teaching.
The more stages and steps there are, the more artificial the
teaching 1s. Everything in the world becomes more and more
complex, but in Tantrism it's the reverse. We move toward
supreme simplicity. You look at a potential disciple. You see
what his gifts and possibilities are. Then you simply keep
him from applying himself too fanatically. He must be al-
lowed to breathe, to play with time's unreality, to open natu-
rally to the understanding that our method is extremely
simple. The ancients took care to strip it of all useless orna-
ments. That's why not a single master adds anything what-
soever. As soon as one traces a route and sets out on it, with
each step that route is lengthened by a step. In returning to
one's own fundamentally pure and perfect dwelling place,
one is opened to the absolute. The teaching is perfect in its
simplicity. To refine or modify it is to weaken it. Any adept
knows too much already. You know too much already. You're
here to forget it! It's simply a matter of letting oneselfbe, in
total freedom, until the moment when the consciousness 1s
dissolved into the divine, just as if it were responding to a

passionate kiss."

"How do you breathe during meditation?"

"Naturally. Slowly. Through the nose if your thoughts
are peaceful, through the mouth if they are agitated. By
letting the belly out completely while inhaling, and retract-
ing it without force while exhaling. The diaphragm supple
as a jellyfish; the anus relaxed; the throat relaxed; the brain
relaxed; the cranial bones like another diaphragm; the shoul-

ders, the arms, and the hands relaxed. The point of the tongue

111
on the palate, against the upper teeth. The spinal column
very straight, the vertebrae stacked up like little round cush-
tons full of sand. The eyes slightly opened, fixed before you
on the ground, or completely opened and fixed on infinity,
right in front of you. Then, without forcing it, you extend
the breath, you let it become subtle, and then you notice a
pause between the exhalation and the inhalation, and you
realize that the divine is in this interstitial void. Then, you
practice circular respiration born of hamsa."”

"At the beginning, when one first starts to meditate, isn't
it easier to have an object to concentrate on?"

"You can concentrate on a little pebble or some other
object, but you have to be careful not to do this for too
long or it will become fossilized in the mind. When you
meditate with some sort of crutch, you must alternate your
concentration with mind relaxation like a series of waves.
You must let the concentration breathe, or you wear your-
self out for nothing."

"How should one consider the intrusions of thought that
come to interfere with one's absorption?”

You have to stop believing that these distracted states
are at odds with profound absorption. They are a kind of
energy to be grounded in the absorption. As soon as you
stop considering them an obstacle, you witness a wonderful
transformation in which the agitation begins to nourish the
calm. There 1s no antagonism in non-duality. All efforts to
reduce turbulence or make it disappear only reinforce it.
The clouds are part of the beauty of the sky. The shooting
stars are an integral part ofthe might. The might doesn't say
to itself, Here comes a shooting star to interrupt my peace!’
So be like the sky, and your mind will integrate all states.”

112
"And when one leaves meditation, how does one move
in the outside world?"

"It is necessary to really grasp that you don't sit down to
avoid or achieve some exterior thing. You don't meditate
to experiment with altered states of consciousness or what-
ever else. You meditate only to perceive by yourself that
everything is within us, every atom of the universe, and
that we already possess everything we would wish to find
outside of ourselves. To meditate 1s to be one hundred per-
cent in reality. And if you are in reality, what would you be

leaving by entering the outside world?

"To meditate in solitude or walk anud the hustle-bustle

of a polluted city 1s fundamentally the same thing. Only
when we have realized that do we really begin to medi-

tate. In meditating, we run after nothing; we aren't look-
ing for any state, any ecstasy other than being totally within
reality. Those who pretend to reach ligher states of con-
sciousness through meditation are only taking bhang™ Be-
ginning from the moment when we are the entire universe,
how could we be lifted toward anything? It's enough to
open your eyes. It's all there. When we meditate in this
way, seated, standing, or lying down, we overflow with the
divine and the divine overflows into us."

"What is the importance of spontaneity in the life of the
tantrika?"

"That's a very important question because it leaves room
for many mistaken ideas concerning spontaneity. To be
spontaneous is to be divine. That goes beyond all notions

ofthe ego, of separation. An action dictated by the ego can

*Indian cannabis-based hallucinatory drink

113
never have the grace oftrue spontaneity. The sahajiva, the
spontaneous being, exercises a sacred freedom that cannot
be confused with impulsiveness not yet permeated by full
consciousness. It often happens that young adepts allow
themselves impulsive, chaotic acts under the pretext of sa-
cred liberty.

"Any act that isn't inscribed in the cosmic harmony 1s
only an impulsive movement, a spasm of the ego. Certain
Tantric masters say that it's necessary to pass through im-
pulsiveness to exhaust it and to be able to attain spontane-
ity. They simply see to it that this free impulsiveness doesn't
undermine the life. Social beings have been subjected to so
many hazings, so many bans. They have left behind them
so many half-achieved, inharmonious acts that impulsive-
ness can be a kind of detoxicant for the consciousness. My
master often used these exhaustion techniques to bring his
disciples into contact with the empty moment when noth-
ing remains. One day, a scholar, a pandit, came to find him.
Instead of talking to him about the void, about letting go
of the mental, my master set about arguing with him for
two days and a mght. He didn't allow lum any breaks, only
enough time to drink a cup oftea or eat a poori, and even
during these times he bombarded him with arguments and
questions, contradicting all his certainties. The evemng of
the second day, the pandit stopped, exhausted. He experi-
enced a few seconds of emptiness. The next day, teaching
began. Three weeks of silence, closed in a dark room. My
master had a wonderful capacity to adapt himself to each
individual. He never gave the same teaching twice. I have
seen hum fill up an epicure with delicacies and talk with

him about the culinary arts to exhaustion. He did the same

114
thing with a man obsessed with sex who came to him with
the single hope of discovering new pleasures and gaining
mastery over breathing and orgasm so he could satisfy all
his mistresses. Day and night, adepts passed through his
room, one after the other. The man went beyond his wild-
est dreams and then regained equilibrium by passing
through the void, the empty moment."

"Your master shrank from nothing."

"No. He had the art of pushing all situations to that point
where action 1s resolved into peace and quiet. One day he
found himself facing a disciple with a very violent nature,
who, when he was given the freedom to do what he wanted,
jumped upon my master as if to kill him. My master grabbed
a log and knocked him out. When he came to, the disciple
expressed his disappointment, which we shared. We didn't
think our master ought to have resorted to violence. He
answered simply, T have many memories, and I only did
that to remind me of my own impulsiveness. It was a com-
pletely spontaneous act.’ The lesson was very effective. That
disciple has become one of the most deeply spontaneous

adepts of our group.”

"What's the connection between the unconscious and
the spontaneous?”

"What you call the unconscious, we call the deeply con-
scious, and it is the field we never stop sowing with all our
unspontaneous acts. When we meditate, we let the jar that
holds the consciousness rest, the unconscious or the deeply
conscious included. When we live impulsively, this jar is for-
ever being shaken up and made cloudy. The sludge and the
water are so completely mixed up that any examination of

the contents is impossible. When we meditate, we stop

115
agitating the jar and set it down before us. Little by little, the
water clears, and the deep seeds float to the surface. That's
what sometimes makes the meditation process so painful. Tt
reveals the seeds that we don't want to see in ourselves, or
that we didn't suspect existed. Little by little, the contents of
the innermost depths of the consciousness appear on the
conscious surface and are purged. By meditating, we accept
the opening of the jar and the purging of all that appears on
the surface of the water. If at the same time we attain spon-
taneity, we no longer sow the deeply conscious field, and

little by little the cycle 1s broken.

"As a result, the contents of dreams change. Adepts
achieve full consciousness and divine spontaneity even in
their dreams, which are no less one with the absolute. As
long as duality remains on the level of dreams, awakening
isn't complete. The ascetic who seems to have achieved
Selthood, but who 1s secretly tormented by lus dreams, lives
a lie. Everything in the Tantric sadhanas aimed at satisfy-
ing the senses comes from a profound understanding of
human nature. Human nature can never be really opened
to ecstasy until everything that was imagined, but not ex-
perienced as a result of morality or social repression, can
finally be enacted with divine spontaneity. In this way, the
Tantric adept doesn't leave a single hidden residue, a single
unsatisfied desire, a single dream remaining within, that
can't be discharged through the sadhanas. That's a major
point of the Tantric quest. All repression that isn't flushed
out or satisfied produces beings tormented by the spint.
They will never achieve divine spontaneity. This 1s one of
the reasons why Tantrism 1s sometimes misunderstood by

Hindus and probably also by Westerners who see an

116
opportunity for impulsive debauchery where the divine ex-
ercise of spontaneity and the radical elimination of unsat-
shied desires intersect.”

"Is that why you told me there were no sexual rites in
Tantrism?"

"Any sexuality that doesn't grow out of divine love 1s only a
sham you might abandon yourself to, which you can't call
Tantrism. Any experience linked to the ego, desire, or posses-
sion has nothing to do with Tantrism. To become a tantrika you
must have the soul of a hero. Under no circumstances can some-
one ruled by passions or victimized by an egotistical, manipu-
lative sexuality complicated by power or repression advance
successfully along the way. When Shiva penetrates Shakti, it's a
complete act, a sacred act. Without the triple mastery of the
breath, the mental component, and the sperm, it's the very
same act that has chained beings to ignorance since time be-
gan. They come together without realizing that everything
within 1s divine, as if suffering in the form of a pems were pen-
etrating suffering in the form of a vulva. Despite that, and even
carried out within the suffering ego, the sexual act contains the
whole of drvinity, though it's not apparent to most, for whom
sexuality is so troubled. But it's really so simple! It's only our
fragmented and dualistic minds, our knowledge turned out-
ward, our ideals and morals that hide from us the knowl-

edge that we are gods!”

117
13

Devi woke me before dawn. She looked happy, like an ado-
lescent preparing for an important event.

"Let's go down to the niver and bathe. We're going to
town!"

"To town?"

"Yes, there are things to buy. We're out of supplies.”

Iwas amused at the prospect of making my way through
the noisy town with Devi. As soon as we returned from
bathing we did a short meditation, and then headed down
toward the village to the bus stop.

A few hours later we were immersed in the hubbub, the
pollution, the colors, the hectic town life. Only five weeks
before, I'd built my hut, and already the shock of town was
intense and astonishing to me.

Seated in a rickshaw, we watched with wonder. Devi was
wearing the white shawl I'd given her. We stopped at a
dairy shop to eat a dish of yogurt, thick and sweet-tasting

118
as cream. Then Dewi asked the rickshaw wallah to head
toward the suburbs, where there was a sort of shanty town.

As we went from the heart of the town to the out-
skirts, the bright colors of the saris, the facial expres-
sions, and the looks gradually changed. Everything
seemed more monochromatic, more sad. Only the clul-
dren were still unmarked by misery. Devi observed me.
All of a sudden, when we arrived at the outer fringes of
the town, something changed again. That wasn't imme-
diately apparent to me. At first, I noticed the sores on
the faces, hands, and feet, the arms and legs bandaged
in rags. Then I saw one face after another in which every-
thing seemed to be decomposing. Only then did I realized
we were among lepers.

The shock was violent; the contrast between the hfe I
knew and the depths of human misery, piercing. I was ac-
climated enough to India to know how common this type
of experience was and how difficult it was to oscillate be-
tween India's splendor and its brutally exposed suffering.
The further in we went, the more looks turned toward us.
I went through a series of emotions hard to identify: fear,
disgust, followed by shame at falling prey to these feel-
ings, at seeing how little all my practice had changed this
duality in me. I had trouble accepting it, all the more so
because Dewvi's presence made me feel everything so vio-
lently. My feelings alternated between pity and repulsion,
disorientation and coldheartedness. It was as 1fI were para-
lyzed by the fact that each ofthese emotions would be per-
fecdy transparent to the clear-sighted Dewi. I believed I could
get out of it by speaking.

"It's terrible.” I saad.

119
Immediately I saw Dewi's look turn dark. She asked the
rickshaw wallah to stop. The lepers approached us, moan-
ing and extending their hands. They touched us, begged us
for alms.

"It's terrible’ doesn't mean anything. It's an escape. You
are paralyzed by fear and disgust. A tantrika confronts his
fear and disgust. Get down, move among them, take them
in your arms, open your heart. I will come back to find you
tomorrow."

I got down, my legs hardly able to support me. I watched
the rickshaw drive away. An enormous wave of nausea came
over me. Retching, I fell to my knees to vomit. One hand,
then another came to rest on my shoulder. Someone brought
me water. I was the one who needed help. I took in the
general mood. We were human beings. The umbilical cord
Dewi had told me about was palpable. All of a sudden the
cliche according to which I was there to give something to

the lepers shattered into bits. Everything was reversed.

I stood up and immediately experienced a change in per-
spective. Everything had happened so quickly, the transition
from repulsion to acceptance was so sudden, that a great
emptiness opened within me. All was calm. Thad needed them
and they had brought me aid. A very strong emotion came
over me. I could nse and take these men and women into my
arms, without disgust, recogmzing what they had done to
touch my entire being, what they had helped me to over-
come. It would be necessary for me to surmount a series of
tests in the next few hours: to drink and eat with them, to
visit the bedridden. The lepers thought that I was a doctor.

Panic rose again somewhat when night fell and made it

necessary for me to accept a mat under a sheet-metal and

120
cardboard shelter. I didn't sleep. I watched the large, in-
quisihve rats. The stench made breathing difficult.

During those still hours, people coughed or moaned. The
atmosphere was simultaneously serene and apocalyptic.
Weight, gravity, infinite suffering could be read in each look,
but at the same time there was levity and a sort of lumu-
nous resignation, which was the most moving thing of all.

I had wanted to leave my clothes behind and flee. The
next moment, I was bursting with gratitude for those who
had let me touch the depths of my fear, repulsion, and
anguish. I had the impression that I'd reached whatever it
15s at our base that separates us from others, whether they
are healthy or sick. It 1s a very hard pit that we protect
and preserve, often by our charitable acts themselves. We
are ready to give anything so that we don't have to give

ourselves.

In the morning, I shared a plate of rice with the family
that had welcomed me. I drank from their water. I felt happy
but also very fragile, as though my well-being, my health,
were an extremely delicate veil that was longer sufficient
to make me different from those around me. I thought of
what Devi had said about the ascetics who weren't capable
of going down into town, into life; the state they enjoyed
had become a way to separate themselves from the world.

When I heard the rickshaw bell, my heart leaped. I re-
membered that my first thought had been "How am I go-
ing to survive until tomorrow?"

I was there, alive, and free of my disgust, my fear, my
repulsion, my impulse to flee, and my false pity. In one
night, IT had learned more about my relationship to others

than in seven years of practice. Reality had seen to opening

121
up deep communication and getting me in tune with the
other. I vaguely understood that disease was only a super-
ficial facade for this initiation. The real base was simply
the other, which presents itself when the ego implodes. It
wasn't a matter of giving a little or a lot, of giving anything
at all. It was simply a matter of giving oneself. It's this sift
that the ego refuses most stubbornly to make.

I bowed deeply before those who had taught me so much.
They returned my salute, and I climbed back up into the
rickshaw. In the afternoon, I bought one hundred kilos of
rice and took it to them. Now that I had given myself and
recerved so much in return, I could give something material.
The gesture was no longer an evasion. It was simple, pro-
found, and real. Since that day, I have never again felt re-
pugnance for a human being, no matter what lus or her state
of physical decay.

Devi didn't say a word about this experience she'd im-
posed on me. That I'd passed the test led to no acknowl-
edgment on her part. Thus was nothing more than a nor-
mal experience ofthe inflated ego comung face to face with
reality.

Devi had regained her good humor. She stopped at a
bazaar to look for a toy seller. She showed me some little
painted metal boats that moved when a candle heating a
water pipe produced steam to propel them. She bought
five colored pinwheels. I bought pants and a tunic of light
cotton and rolled my soiled clothes in a newspaper. We
bought a few bags of grain and lentils and finished our
shopping in a back courtyard, where Devi asked for a bottle
of bhang, a milky greenish liquor. I was astonished by this

purchase, but she told me that we needed it for a ritual we

1x
would be practicing soon. I asked her a few more ques-
tions on the subject, but she didn't answer me. I knew that
Tantric ascetics sometimes use bhang in the three-M ritual
aimed at destroying the dietary, sexual, and inhibitory pro-
hibitions of the consciousness. The three M's correspond to
three rattvas of the first group:

Ether corresponds to sexual union (maithunal.

Air corresponds to the use of alcohol or narcotics
(madya).

Fire corresponds to meat (mamsal.

Loaded down, we climbed to our hermitage, and Dewi
began to detach the pinwheels from their wooden sup-
ports to fix them one on top ofthe other along the length
of a pole, which she then planted in front of the hut.
The air set them spinning. Devi watched with wonder.
We coated ourselves with cold ashes. Standing, and
assisted by the pinwheels, Devi instructed me on the
five chakras, touching the points on my body to which
they corresponded.

"Muladhara 1s the chakra of the foundation, of earth. It
1s located here, between the anus and the perineum. It is
the place of pleasure, of contact with the earth, but it 1s
also where the ego and its associated obstacles are rooted.

"Nabhi is the center of the navel. It corresponds to fire
and is linked to emotions, feelings, egotistical love, fear,
violence, and pride.

"Hrdaya 1s the center of the heart. It 1s the seat of the
breath, the Self, absolute love. It's the place where discrinm-
nating thought 1s extinguished to make room for the di-

vine. Hrdaya is at the center of the body. Two chakras above,
two chakras below. It 1s the center of anxiety as well.

123
"Kantha is the center of the throat. It is linked to the
truth, to the profound word, and to sacred song but also to
lying and to false situations.

"Last comes the bhrumadhya chakra, between the eye-
brows. Linked to the sun and the moon, this chakra projects
energy toward the opening of the fontanel, or the
brahmarandhra, to reach Shiva in dvadasanta, in the space
above the skull.

"During practice, imagine that the lowest chakra and the
highest chakra are connected by a tube of ight in which an
infinite number of wheels are put into motion. One thus
retains the idea of ascending energy and avoids being blocked
by a visual image or concept of localized chakras. The chakras
are often lived by yogis as stages and thus as blocks. If they
are imagined as a confinuous tube, nothing conceptual can
come to block or lint the energy of the kundalini."”

Later, we danced for part of the night. There was a
moment when our turning became regular, almost slow
motion, and the trees and sky became two masses find-
ing equilibrium, dark and blue discs becoming blurred
and rectilinear as in an infinitely blown-up photograph.

That night my first initiation into sexual practice took
place. It was the beginning of a course that slowly cut the
body off from its habits, actively demonstrating how our
habitual sensuality 1s arbitrary and limited. These strange
practices led, step by step, to a complete deprogramming
of the automatic sexual responses and finally allowed for
the practice of the Great Union.

While we danced, Devi went to find a bottle of 01] we'd
bought at the market, and, all the time dancing behind me,
she massaged my spinal column from the nape of the neck

124
to the coccyx. Our dance became extremely slow. Dewi told
me to concentrate on the moon while her fingers came and
went over my backbone. I had the impression that her
movements melted my vertebrae, one by one, and gave
them the suppleness of a single stalk that supported my
body.

Dewi sang, her voice never climbing above the lowest regis-
ters, and I had the sensation that she was singing in the flex-
ible cord of my back. I started shivering intensely, vibrating
like a violin string, my gaze lost in the pale crescent of the
rising moon. Little by little, these sensations would build and
pass from the coccyx to my pens, which seemed a natural
extension of my backbone. As during the first time, my penis
became erect, arcing toward the moon, but this time my whole
being shuddered, and I felt a sort of resonant humming that

began in my spinal column and spread throughout.

Dewi continued to massage me, never going below the
coccyx. She stopped singing and began to breathe more
and more deeply. I breathed with her, stll fixed on the moon,
feeling the sexual excitement mount in me as 1fit crossed
through the elements, entered through the soles of my feet,
and traveled throughout my entire body.

The waves of orgasm swelled very gradually, accompa-
nied by the breathing, and three or four times I projected
my sperm out into the night. Devi held me against her. I
felt her warm body imprinted against my thighs, my back,
my neck. I had climaxed without any direct sexual stimula-
tion, and Devi took me in her arms, our bodies moving
imperceptibly, united in the night.

"Offer these lunar pearls to Bhairavi, the Great Shakti,"
murmured Devi.

125
The next day, Devi told me that three days of fasting and
solitude in the forest were going to lead me to the funda-
mental experience of meeting Kali. I entered the forest na-
ked with my water jug and forced my way alone to the place
where I had passed my first test. I had no difficulty sleeping.
The following morning, I entered into a deep samadhi, free
of blinking, swallowing, and mental digressions or distrac-
tions. A deep devotion to Dewi filled my heart, and my peace-

ful breathing came to rest and be reborn there with calm
and regulanty.

One's perception of time 1s strange in the forest without
means of measuring it. Everything begins to expand. Being
is dilated and, little by little, loses its relationship to dura-
tion, although the shade from the trees shifts and the de-
scending light 1s accompanied by a coolness that seems to
slip from between the length of the trunks,

I experienced a sense of opening that seemed to have no
end. I considered my former fears with an amused smile. I
mistakenly believed myself free of the panic that sweeps
through all reality.

The many noises riddling the might no longer discon-
certed me. I relished this solitude, never imagining that it

was a prelude to the most terrifying experience of my life.
14

Devi opened the bottle of bliang and told me to drink it.
We were seated facing each other. Without a second

thought, I drank the bhang. I placed the empty bottle near
the fire and looked at Devi. She smiled at me and then

immediately entered into samadhi. I joined her, her pres-
ence making the passage extremely rapid. A blink of the
evelids, a single breath, a perfectly relaxed posture, and
my whole being was floating on an ocean of milk.

Thanks to Devi, I had succeeded in perceiving how natu-
ral and near ecstasy is to us. The conceptual barrier through
which we enter it 1s fragile. Our resistance to ecstasy 1s no
thicker than a paper wall. There comes a moment in medi-
tation when one notices a tension manifested as a trem-
bling, which one hesitates to go beyond because it's the
last holdout of one's fragmented bodily consciousness. The
day when one takes this minuscule step, the body aban-

dons itself completely, and one passes over to the other

127
side of this vibration to enter into an infinite landscape,
that of empty consciousness.

Then, in this void, began the dance with Devi, very slow
at first, then faster and faster, under the stars and the moon,
in the echoing roar of the waterfall. Our ash-covered bod-
ies played with the universe. Little by little, the trees, the
earth, each particle of dust entered into this unlimited
movement.

I felt the trance slowly coming over me. In the moon-
light, the ashen body of Devi was transformed into that of
Kali, the black goddess who embodies liberating energy in
its most terrifying aspect but who destroys illusions and
opens the door to the absolute Self under this aspect as
well. This power transcends time. She pulled me into the
infimte, made me feel the fragility of my temporal armor. 1
had the impression of emerging from it, as out of a chrysa-
lis, into blinding clanty. I was at once helped and hindered,
freed and wounded, by my resistance to the goddess. Her
eves rolled; her terrifying look paralyzed and captivated
me at the same time. Her destructive power seized hold of
my understanding and my grounding. The more I resisted,
the more devastating her strength seemed. Everything with
a name, all forms, disintegrated when they came into con-
tact with her black flesh. The chain of decapitated heads
that she wore rattled and lussed, the faces twisted with
pain letting out sighs, groans, and blood, which ran down
her supple, structureless body. I felt her to be as powerful
as the cosmic core, black as coal, unbelievably massive and

compact, and defiant of illusory time.

Kah turned toward me, waving her four arms, her wild

hair flying out in space, her bloodshot eyes holding me

128
powerless in their terrifying light. Her huge red tongue lolled,
trembling, from her mouth. She brandished a sacrificial

sword and made mudras with her two right hands. A kind of
symphony of groans and moans took possession of me, and
the fifty heads in her macabre necklace turned like a lasso,
the faces growing and shrinking so violently that I lost all
sense of my size in relation to the surrounding space.

Little by little, Kali began to make menacing gestures.
Her free hand took hold of my hair as the sword swung
around in space to find the ideal angle for my decapita-
tion. My bellowing supplanted that of the already cut-
off heads. Kali pinned me by the hair. I saw the sword
fall, and I felt it cut through nerves and tendons, arter-
ies and muscles, trachea and vocal cords with indescrib-
able slowness and precision. Finally my head was de-
tached from my body, my neck retracted, and my
thoughts emptied into space. Kali, dancing, made my
heavy head turn. Only my eyes were still functioning,
and I saw clearly dark space, the moon, and the blood
on Kali's black skin.

The revolving motion increased. She let me go, and I
was projected into the distance like a cannonball of brains
and bones. My head rolled; I felt the ground; I saw the
dust and sky. Far off, my pale and headless body staggered
about and finally collapsed. Kah stamped on it, dancing on
its limp surface. Then she stood still, and I felt the whole
weight of her body sinking into mine. The sacrificial blood
splattered all over me, and my far-off head shrank. Victon-
ous and domunating, Kali fed on my darkness. With one
terrible look, her tongue quivering, she absorbed it in the
black depths of the night.
The more I was emptied of my shadow, the greater was
my sensation of having touched the very bottom of meta-
physical fear. The mystical devouring of which I'd been
the sacrificial subject gradually returned me to a new body
streaked with light as if it were larded with an ever-
increasing ecstasy. My light and empty head flew up to
rejoin my body. Bit by bit, the image of Kali dissolved.
She lost her terrifying attributes. And as dawn took the
sky I recognized Devi, bending over me, her look over-
flowing with light. She gently caressed my forehead as
one would an infant's who was waking from a mghtmare.

I resumed my place in my body, and there was no more
blood or terror.

I had come through the great metaphysical fear. I recog-
nized the sound ofthe waterfall, the edge ofthe forest, the
forms of the mountains and hills bathed in the twilight
elow of innumerable reds, the Tantric color par excellence.
There are often striking sunrises and sunsets in the
Himalayas. The clear air and rapid cloud movement, the
changes in the spectacular sky never ceased to fascinate

me. From gold to lava, then to blood-red - all the colors

crossed the sky.

Devi accompanied me to my hut and wrapped me in a
blanket. I laid my head on her crossed legs, nestling against
her crotch, where I listened to my heart beating and fell
asleep.

It was in a dream that I received the next initiation. I
was in my hut. Dewi sat facing me and told me that initia-
tion through dreams possessed strong power and thus it
was sometimes used in her tradition. ITnatiation in the form
of a dream had the particular ability to gather all the levels

130
of consciousness onto the same plane, and this was pre-
cisely the reason for its great reputation among yogis, not
only in Shivaic Tantrism but in Tibetan Tantrism as well.

The dream transmission was a symbolic one in which
the master hardly spoke. I watched Dewi's lips move and
heard:

"The severed head, the offering of your intelligence.

The fusion of colors and opposites in the black skin.

The nakedness, the illusions set free.

The severed heads, its central omnipresent power.

The sacrifice, the birth of the empty fetus.

The trampling of the corpse, the rupture of bonds.

The rebirth, the absolute freedom.”

The days that followed passed peacefully. Devi didn't
oive me a single order.

"Do whatever you like," she told me, with that playful
young girl's somle of hers.

Then I discovered the phenomenal freedom of waiting
for nothing, pursuing nothing, anticipating nothing, mak-
ing no plans. I took umimaginable pleasure in letting my-
selfbe. We bathed, we strolled through the woods at night
like two ash shadows, we ate, we danced, and the moon

moved toward its fullness.

131
15

One evemng, Devi had me lie down on her blanket. She
began singing while her hands, which she'd passed through
the warm ashes, traveled up and down my body. She taught
me the twenty-one secret energy points that are stimulated
in massages and union rituals. I closed my eves and re-
leased myself to her caresses, which continued for hours. I
felt each fiber of my body awaken to pleasure. The energy
bonds grew little by little, and every part of me opened to
all the others in a magical humming. My cells glided along
in the stream of her voice, which played a part in my ec-
stasy. I began to vibrate like the string of a sarangi against
the bow, and I enutted my own music. I felt the deep muscles
of my abdomen relax and my legs shake. The strangest
thing was that I had several orgasms followed by ejacula-
tion, even though I had no erection.

I floated in sleep watching the beautiful face of Dewi. 1

had experienced orgasm without direct sexual contact,

132
orgasm without erection, and I suspected that I still had
other discoveries to make.

A few days of leisure intervened between each of the
diverse experiences that Devi put me through. They intro-
duced me to a fundamentally different relationship not only
with my body but with desire and possession of the other
as well. Although Devi made me go through intense erotic
emotions, never did it occur to me to embrace her, take a
turn at caressing her, or make love to her. I was completely
absorbed in discovering another way of envisioming my

relationship to the female, to the divine, and to sexuality.

The next stage of my initiation into Tantric sexuality was
even more strange. That night, near a good fire, Devi rubbed
my body with oil and massaged me for a long time, some-
times brushing against my penis so that it became erect.
Then, making me feel with her index finger the extremities
of my deep stomach muscles, she asked me to breathe
deeply enough to feel the air going from these points, near
the pubic bone, to two points situated under the clavicle.
That required extremely deep breathing, long and gradual,
the effect of which was to make my penis go limp, its sexual
charge dispersed throughout the entire body by the depths
of my exhalations.

As soon as I stopped breathing this way, my penis grew
hard again and was recharged with a very localized excita-
tion. After an infinite succession of these respiratory waves,
I had the sensation of having a kind of dam around my pe-
nis, its floodgates opening as I wished, thus letting the waves
of excitement spread into every hidden recess of my body.

For the moment, only the current of erotic excitement
ebbed and flowed, but over the course of the mghts that

133
followed, I learned how the paroxysms of ejaculation could
also be controlled by deep breathing, ebbing and flowing
without the least frustration, since orgasm was really tak-
ing place but was not accompamed by ejaculation.

It must have taken about ten days for this stage to be-
come a reflex in me. Each evening, Devi introduced me to
the most subtle erotic sensations; then, using her hands or
breasts or mouth, she slowly brought me to orgasm. At the
moment of ejaculation, using her index and ring fingers, she
pressed hard against a point situated between my anus and
perineum or on another point three finger-widths above the
right nipple. I then had a violent orgasm without the slight-
est trace of ejaculation.

Then, slowly, she brought me right back to what had
seemed an insurmountable threshold, making me discover
pleasures more and more intense, eliciting a series of or-
gasms during which I lost not a single drop of sperm.

Over the course ofthe nights that followed, Dewi taught
me to achieve the same results myself without the finger
pressure, simply by controlling my breathing and relaxing
my deep stomach muscles. At first, there were a few acci-
dents to which she responded with laughter. The reflex
wasn't established for some days, but soon I succeeded in
controlling ejaculation during totally free orgasms by my-
self. And believe me, this had nothing in common with the

dreary coitus reservatus, contrary to what certain Tantric
scholars claim.

In the beginning, Devi paused briefly at the moment of
climax; then, little by little, she continued her stimulation,
increasing the pressures of her tongue and her mouth as
if to evoke my orgasm despite my deep breathing. Many

134
times, she succeeded in making me come, which amused
her no end.

It was only after a good month of these very Indian games
that I achieved the mastery necessary to practice the Great
Union.

"All this apprenticeship is aimed at transforming the
man's ordinary and mediocre climax into a climax of slow
and constantly increasing waves, which makes him capable
of experiencing the pleasure of the woman and honoring
the goddess as he should. The normal male orgasm 1s an
act of violence against the woman. It's an expression of
male impotence, using this brief pleasure like a knife to
take a stab at all that's ludden deep within her infinitely
capable body. When the tantrika discovers that lus plea-
sure 1s no longer bound up with coming as quickly as pos-
sible, too quickly to satisfy a woman, he discovers all the
richness of his feminine side. And discovering that, he rises
to the power of the woman and the part. Even the most
subtle lovers, if they don't know the secrets of Tantric
sadhana, are privy to only the smallest part of the pleasure
they could give. The male body is numbed by the localiza-
tion of pleasure in the pems alone, while most women know
overall pleasure without doing any apprenticeship at all.”

"But during the initiation of a woman, aren't there any
physical practices?”

Dewi looked at me, amused.

"There are, and it won't be long before you'll discover
them. We develop the internal muscles linked to our geni-
tals, the abdominal muscles, and the muscles necessary for
the postures. My vagina 1s as strong as my hand. It knows

how to take, to grip, to hold, to open, and to close without

135
the least spasm. It knows how to give itself pleasure through
deep contractions. It knows how to become soft as an in-
fant relaxing its muscles. It knows how to make use of the
river water and play with the little stones. It knows how to

close at the moment of death and open at the moment of

life."

136
16

Devi asked me to go find an armload of small branches and
make them into a pile, then to make another pile of me-
dium-size branches, and then a third of large branches.
When evening came, on the esplanade, she told me to light
the first pile.

The flame grew hugh in the darkness. The wood crack-
led, and the fragile, orange embers collapsed at the center
of the fire, hollowing out a chimney. We watched this in-
tense burning with wonder, and as soon as the flames di-
minished, I wanted to feed the fire with some of the thacker
branches. Dewi stopped me and said to look at the fire care-
fully. Very soon, the consumed brushwood left only a pile
of fragile ash.

"You see, this magmficent short-lived blaze is an image of a
sexual relationship between a man and a woman at its best.
It's beautiful, intense, and short. A great fire, but there's no

avoiding the final embers. Put some branches on the embers."

137
A few minutes later, a second blaze lit up the sky, but
this time, Devi and I carefully fed the fire so that it re-
mained constant. We took great pleasure in feeding it
branch by branch. Until dawn, the flame stayed alive, steady
and even, and there wasn't a second when our attention
lapsed. Then we took our positions and entered into sam adi
until morning. Devi gently rubbed her face and limbs.

"This magnificent fire, which has illuminated our heart
all mght 1s the Tantric Great Union of Shiva and Shakti, of
Bhairavi and Bhairavi. Adepts identify themselves with the
gods and settle in for the duration, which unfolds into
mystical ecstasy. Thus, it 1s important to feed the passion-
ate momentum needed to carry us toward each other with
our power and our capacity for wonder. Everything invented
by men, women, animals, and plants in the way of amo-
rous play 1s the branches we will throw into the hearth.
But there we wall also throw our thoughts, our ideas, our
crude desire, and our three impurities.

"The first of these impurities is that which makes us iden-
tify pleasure and pain with our limited egos. All sensation
1s thus reduced to the dimensions ofthe ego, which makes
pain more vivid and pleasure more subdued. The tantrika
15s free of this association and lets sensation flow in the
divine within him.

"The second impurity springs up at the center of conscious-
ness in the form of duality. It engenders fantasies of posses-
sion of beings and things. Beginning from the moment when
we want some exterior thing, when we want to put our seal
on 1t and call if 'ours,' we lose communication with this be-
mg or this thing, and we leave it to rot in the fortress of our

possessions. One day, we think of this thing, of this being

138
we've imprisoned by our desire. We go to search for it among
the innumerable objects that we have piled up. And we dis-
cover to our astonishment that this being or thing 1s no longer
alive, that it must be thrown out. Possession and rejection
are one and the same gesture of ignorance.

"The third impurity 1s as subtle as a very light gauze that
flies in the wind. Sometimes it unveils our consciousness,
and we have the impression that we are opened enough to
eround ourselves in Shiva. Sometimes this gauze casts a
light shadow, and our consciousness then suffers by not
oetting absolute light. It's this subtle impurity that makes
our meditation oscillate between unity and duality. Some-
times we grasp our absolute Self. Sometimes we lose it. We
are not filled by the divine, and our thirsty consciousness
feels deprived. Shiva has only one foot in our pained heart,
and sometimes we lose lum altogether. Then we feel an
exposed emptiness like a freshly opened wound, and even
the divine becomes a cause for suffering. That's then we
sometimes form obsessive attachments to our spiritual
masters. If the latter aren't accomplished, they feed on this,
and we become dependent. Our spiritual progress is
blocked, our vitality and equilibrium becoming precarious
and subject to the whims of the master. This pernicious
relationship frequently develops. As soon as simple, deep,
and unstrained devotion is transformed into a frenetic re-
lationship, there are attempts by the disciple to manipu-
late the master, or vice versa, or both at the same time.
Through this process, spiritual energy is reversed, and love
becomes power.

"Healthy relationships between master and disciple are

free of artifice and protocol. Even in ritual, when the master

139
releases lus power, the relationship must remain simple.
Together they must navigate these accelerations and shifts
in power for the relationship to remain fair and true.

"The human hears the human, the human responds to
the human, the human is grounded in the human. The di-
vine hears the divine, the divine responds to the divine,
the divine 1s grounded in the divine. When communication
coes from one plane to the other, from the human to the
divine, there is confusion and impurity, and the commumni-
cation isn't true.

"In the Great Umion ritual, Shakti is adored by Shiva.
Their passion traverses all states, all the thirty-six tattvas.
That 1s to say, it goes from the earthly tantrika tasting the
coddess to divine absorption in Shiva. All these stages are
lived in the most intense and complete manner. All human
passions and desires must be satisfied during the energetic
ascent toward union. No area of desire must be pushed
aside, because frustration 1s contrary to the divine. It is
essential that you fully understand each aspect of the ritual
so that it can unfold like lightning and not be held up by
any confusion. Also, ask me questions if you want to."

"How does the ritual unfold?"

"After sleeping together naked, you on my left, then on
my right, then embracing, for three periods of equal length,
we take a ritual bath and return to the forest.

"Then you draw on the ground a yantra, a symbolic geo-
metric figure, which will protect the ritual place from all
harmful influences, and there you unroll the blanket on
which you will throw flowers to make a rug.

"You assemble the offerings of flowers, perfumes, food,

and palm wine that we will share over the course of the

140
sacrificial meal. Then you perfume my body and you touch
it, beginning at the heart, in the twenty-one places I've
shown you. This palpable adoration of the goddess awak-
ens her senses and insures that every organ participates in
the great libation. I then enter into the deep continuous
sound that, by spreading waves through your body, will
awaken all your centers.

"When the vibrations and trembling in you and me come
inte accord like two musical instruments, we will begin to
discover our bodies with the passion of two young newly-
weds. In full consciousness, like a cluld who has never seen
a woman, you will look at my face, my breasts, my arms,
my hands, my stomach, my genitals, my legs, my ankles,
my feet, and, in the same way, you will take in the other
side of my body. When my entire image 1s present in you
and you have completely accepted me as the goddess her-
self, I will take my turn at recognizing you as Shiva.

"Then, we will chant the mantra AUM together. Born in
the heart with the A. it rises toward the throat with the U
and dies against the roof of the mouth with the M, while its
resonance crosses through the fontanel and merges with
the sky. When the mantra has united our sonorous essence,
we will unite our breathing in the long and deep rhythm
that is the measure of Being. With this breathing, we agree
to abandon ourselves totally to each other, free of all ordi-
nary sentimental impulses, in a sacred encounter where
the three jewels are mastered: the breath, the mind, and
the orgasmic nectars. Then alone 1s there true divine union.

"Then we will be Shiva and Shakti, in the center of the
magic yantra. I will enter into your voice, you will enter into

mine, and we will recognize each other as divine under the

141
caze of my master and his Shakti, whose presence and power
I will invoke as you do the same. Thus, the power of the two
lines will be within us.
"Next, you will offer flowers and sandalwood paste to my
yoni. Then I will make the same offering to your [inga. When
you are erect as the [inga of Shiva, and my yoni 1s trembling
and parted with desire, we will begin to give ourselves over to
the divine play of love. Then, saying the mantra “4ham,’ Tam
Shiva,’ you will honor the goddess with your caresses, your
kisses, your tongue, your fingers, your teeth, your fingernails,
and the touch of all your skin on mine. Slowly, divinely, you
will bring me to the height of desire, and I will do the same
for you.

"We will be careful to always stay on the same vibratory
plane, each bringing the other up to the level we ourselves
have reached. This slow ascent, which includes at least four
stages of pleasure, will lead us to penetration, which should
provoke immediate orgasm ifthe rise of excitation occurs in
complete harmony and with sufficient power. All the fires of
passion, all the erotic games of the animals and plants to
whom we must appeal for inspiration and protection, should
carry us to a state of extreme intensity. The Great Unionis a
ritual of power subjected to an extremely vital dynamism,
which must not be confused with less charged states.

"Even the samadhi of the Great Union retains this scent
of divine power. It 1s as different from the quiescent state
as an impassioned lover 1s from a tranquil one. The great-
ness of Tantrism is knowing how to use this passionate state
to free oneself from the suffering that is at the heart of
profane activity.

"Then, as we change position according to our desires,

142
the night will collect our pleasure and our cries, our whis-
pers and the music of spontaneous love, which knows no
hint of possession. Using your mastery of the breath, the
mental elements, the sperm, you will offer any number of
orgasms to the goddess. Through the control of my mter-
nal muscles, my sweet smell, my vital power, my trembling
force, I will make you come the same number of times,
without ejaculating, each orgasm stronger than the last.
"When at last the divine is totally satisfied with our pas-
sion, we will enter into the ultimate phase of the Union.
Adopting a stable and unchanging position, seated in a lo-
tus, all of your being deeply rooted in mine, we will enter
into samadhi. The nature of our pleasure will change, and
in the same continuous trembling, my yoni closing with all
its strength around vour linga, we will know the final ec-
stasy. In the lightening rise of the kundalini, we will emit
divine nectar, which 1s entirely different in nature from
sperm or the arousal flmds of the woman. This deep enus-
sion 1s the juice of ecstasy. It opens the door of the Infinite
to the tantrika, the door of Absolute consciousness, of Be-

ing, of the Great Void, which is one of the names of Shiva.

"This step will be the third initiation, which corresponds
to the deep passage through the true nature of Self This
passage will inseminate the very depths of your conscious-
ness like seeds dark and speckled with colors as vivid as a
poppy's, which will remain at the heart of your medulla.
All subsequent practice will bear fruit because of the pres-
ence of these seeds. The simple fact of staying in contact
with reality, of touching life deeply, will one day provoke

awakening, and a field of flowers will blossom in the deep-
est part of you.

143
"There 1s nothing more to do after that but to let things
be. To open, to relax, to let the mind rest, to accumulate
nothing more, to search no more, to free oneself from doubt
and waiting, that thick barrier that keeps the rain and the

sun from germinating the deep seeds I will have planted in
you."

144
17

The twelve days that followed were the most peaceful time
I spent with Devi. Everything unfolded in presence, leisure,
freedom, laughter, and nocturnal dancing. We spent much
time playing at the waterfall, as carefree as two adoles-
cents. Strangest for me was the sensation of living so deeply
in each other's presence even during the most insignificant
activities. This presence, this intense communication, was
totally free of mental constraints, plans, or emotional ma-

nipulation, as if everything had come together to flow har-
moniously within reality.

I experienced a new kind of bond between male and
female, between master and disciple. Nothing in the hu-
man sphere of sensations was excluded from our relation-
ship, and at the same time nothing consigned to us by habit
or routine entered into it. We wasted not a minute on con-
frontation, dullness, or desire. Nevertheless, the power in
play went well beyond that which energizes the most

145
extreme situations of tension or conflict. I had the impres-
sion that it was all there, that every human impulse was
present, but that all these states played their part within
an absolute freedom, remaining latent and unevoked. In
this way, their vital force came to nourish each of our acts.
There were no outbreaks of anger, desire, passion, sexual-
ity, love, presence, or compassion. Nor was there the re-
sorption of these forces following the short crises we're so
accustomed to.

Devi didn't pass from one to the other. There was nei-
ther rising nor falling, neither exhaustion nor recharging
of energy. These feelings existed simultaneously in her. Her
smallest gesture drew upon the entire human palette. It
was as if her look were saturated with an ageless human-
ity, lacking nothing.

The feeling of very deep veneration that I had for Dewi
freed me in some way from all exterior signs of respect; at the
same time, each of my gestures was imbued with it. IT had
before me at all times a being who seemed to live on all planes
simultaneously, and whose spontaneity was such that the earth
and sky seemed grateful to her. Her gentleness, power, fresh-
ness, wisdom, almost childlike enthusiasm for the world, and
supreme knowledge were always obvious and were expressed
in the smallest gesture, the least facial expression.

For the first time we slept naked together. Four days on
the left, four days on the right, four days embracing. There
was no sexual contact between us, but very tender, very
full touch, which couldn't be considered asexual either. On

the contrary, hour by hour, our bodies seemed to be charged
with cosmic electricity so that even brushing lightly against
each other made us tremble from head to foot.

146
During these wonderful days, I experienced the life of
the vogi, which wasn't anything like our austere sterco-
type ofit. Stull, at the same time, this joy, this freedom, this
spontaneity found its source precisely in austenty, solitude,
and the fiercest determination. Our levity and freedom from
care, our grace and perfect integration into space were a
kind of mamfestation of the divine running through us. I

felt it as a rosy perfume scenting our open consciousness.

These peaceful days were also days of dialogue, which I
took advantage of by asking all the questions close to my
heart. During the whole first part of my sadhana, 1 had
been obsessed by the body of that man found drowned in
the river. All sorts of crazy ideas had gone through my head,
ranging from the ritual murder formerly practiced by cer-
tain Tantric sects to an accident taking place during one of
the tests, like the one on the chff I had also thought of a
panicked flight in the depths of the might, knowing how
terrifying Devi could be. I asked her the question directly:

"Are there still human sacrifices in some Tantric rites?”

"Human sacrifice 1s constant. Men sacrifice themselves
by not realizing their absolute nature.”

"And ritual murders?"

"I've never seen any. Those are ancient practices.”

"What about the death of the man they found in the
river?"

"I don't know. I've never heard about it."

"They told me this story in the village, and I imagined
that he fell off the edge of the cliff during a test.”

"The test of the cliff corresponded to a fear that vou had
to vanquish. Everyone is different; each test is different.

There's nothing systematic in the sadhana. Everything

147
happens according to the goodwill of the master, who senses
what the disciple needs to come through his fear. Once, I
had a disciple whose greatest fear was learming how to read
and write. This 1sn't a subject of fear for us, but for him it
represented much more than passing a night with lepers or
three mghts alone in the heart of the forest. This was a
very courageous young man. He would climb down into a
pit full of snakes or tigers, but the printed word made him
tremble.”

"At the beginning, when I spoke to vou about the
Viinanabhairava Tantra, you told me that the Chinese yogi
who had given it to me was an impostor, and I have never
really understood why you brought this accusation against
this man, who was the first to welcome me along the Tantric
way."

"It 15s difficult to teach. It 1s difficult to accept or refuse a
disciple. The first interview 1s rarely a contest to see who
can be more polite. When you smile, the world seems mar-
velous; when you attack, a person's true face shows through.
That's what's called subtle means, or wpaya. The special
trait of a master 1s finding what will suffice. You took great
intellectual pride in possessing this Tantra. You felt you
were part of a rare elite. So that's the spot where I chose to
touch you. I don't doubt that this yogi 1s respectable, and 1f
he passed this essential text on to you, it was, without a
doubt, to sow the seeds that are now in the process of
sprouting in you. If he hadn't done that, you probably
wouldn't be here. If Kalou Rinpoche hadn't accepted you
as a disciple and hadn't taught you to practice, you prob-
ably wouldn't be here. Everything fits together. Everything
1s connected and corresponds. The first thing one senses in

148
facing a potential disciple 1s not lus past apprenticeships,
his knowledge, hus experience, lus familiarity with a men-
tal realm, but rather his energy, its ramifications in space,
his ability to take curves of great amplitude without being
shattered or lost.

"Accumulated knowledge 1s not important. What mat-
ters 1s to grasp what someone 1s ready to give up in order
to receive the teaching. All teaching is colored as a func-
tion of that. To those who lack any base, one teaches the
sacred texts. As for those absorbed in the mental, one gives
them hardly a sign. They are forced to live the teaching
with their whole bodies. I cut off your head. For others,
perhaps I would have cut off a leg, or the pemis. We all
have one part of our body that we wouldn't lose for any-
thing in the world. It's the same for the ritual, for the 1m-
tiations, the mantras, the meditation supports, the

maithuna.

"Tantrism remains vital because it has never been sys-
tematized. Everything 1s possible. For some, there 1s only a
single initiation during which everything is transmitted.
For others, there are three of them, or five. Everything 1s
suspended, open, unfathomable, and free. Sometimes the
goddess 1s honored by retention and mounting waves of
successive orgasms. Sometimes the goddess 1s honored by
the free flow of essential fluids. Sometimes the goddess 1s
honored by a single look. Sometimes the goddess remains
invisible and unites with the tantrika only in the absolute
solitude of the heart. Sometimes the tantrika carries the
coddess within him and has no need at all for an exterior
Shakti to accomplish the Great Union rite. It's important to

understand that the initiation I am giving you into the Great

149
Union could be accomplished just as well symbolically, with-
out any carnal contact at all. Its value would be the same.
The whole Tantric itinerary can be completed in absolute
chastity. Each master has complete freedom to decide. It's
also one of Tantrism's great strengths that nothing which
makes up being human is rejected. There are no rules, no
methods, no way, no effort, no accomplishments, no fut.
Everything happens as if one 1s letting lus own sky be cleared
of haze and clouds. The sun, moon, and stars are always
there."

"Can you tell me how to practice yoga?"

"The Great Yoga - that is to dnnk, to eat, to touch, to
see, to walk, to sleep, to urinate, to defecate, to listen, to
remain silent, to speak, to dream, to love, to sit, to cross
the street, to get on a bus, to travel through town and coun-
try, sights and sounds, beauty and ugliness without ever
being separated from the divine, which 1s in the self. No
type of yoga 1s better than that which isn't afraid of immer-
sion in reality. Outside of reality, there 1s not a single trace

of the absolute.

"The Great Yoga is like the English grammar that I taught
at school. It 1s very simple. There 1s a sentence, some words,
a punctuation mark. The Great Yoga 1s very acute percep-
tion of the punctuation. We are used to paying attention to
the words, but the door to the divine is found in the punc-
tuation. The commas, the periods indicate the pose taken
between two parts, between two propositions, between two
sentences. The comma, the period - that's infinity. That's
the void."

"How do you apply this grammar of yoga to the life of
the tantrika?"

150
"Between two breaths, there 1s a comma. Between two
feelings or two 1deas, there 1s a comma. Between one ges-
ture and another, there is a comma. The magic of the Great
Yoga is that all life experiences are followed by a comma,
and the yogi can continually operate in and drink from the
infinite by being conscious of this punctuation. Our life is
too often like a text without punctuation. We believe that
the words run together to infimty. When we begin to medi-
tate, we are frightened by the huge lava flow of words that
pushes us continually forward or to the side of our lives.
We feel ourselves bombarded by our chaotic mental activ-
ity, which swallows up our punctuation and leaves us ex-

hausted, no longer making sense.

"Bit by bit, the air penetrates our meditation. The magma
of words becomes more like a strip of clay that you can
stretch between your two hands. All of a sudden, there is a
rupture, a silence, a void, a comma, and true life begins.
This break allows us to be present, to catch our breath, to
enter into the next group of words fully conscious. These
moments of emptiness are like rest stops on a long climb.
They allow us to realize what we're in the process of doing
and to taste it fully. That's yoga. Ascetic exercises in a hid-
den cave are yoga only ifthe ascetic can descend to beg for
his grain in the town and cross through it in full conscious-
ness. Otherwise, they are only vain austerities. Anyone who
can't immerse the entire body and consciousness in life with-
out being thrown off by it 1s on a sterile path. Continuity is
everything in Tantrism. Continual ecstasy, continual divin-

ity, continual life.

"There comes a day in the practice of yoga when the

entire reality of the world, all its forces, all its antagonisms

15]
begin to run together and to have a single taste and smell.
The absolute smells wonderfully good, and its most fetid
components are part of this divine perfume.

"Practicing this way 1s practicing without interruption
but with extreme care for punctuation. Practicing inter-
mittently, returning to the ashram after work, is a way of
refusing the continuity of mystical experience. The conti-

nuity can never be experienced that way, since only a part
of the Self returns. Nothing can be divided. There can't be

a box for the pleasures ofthe mind, a box for the pleasures
of the body, a box for the divine, a box for violence, a box
for those without social standing, a box for the privileged.

"The real way life works is that everything commumi-
cates and everything transmits a charge. Fragmentation
leads to explosions on the individual and social levels. Ev-
erything separate is destined to die out. To be alive is an
act of ultimate courage, since to live is to realize how 1m-
material these divisions and boxes are, and to throw one-
self into the great maelstrom. Contrary to what most people
think, there 1s no risk in throwing oneself into the mael-
strom, but one can know that only after having jumped.
And that's the difficult part. to jump.

"To jump! That's the Great Yoga!"

152
18

We spent two or three hours a day repeating the mantra
AUM in one voice, slow and deep, feeling each low-
frequency vibration throughout the rest of the body, like
the sound box of a stringed instrument. At first, Devi ac-
companied us with a gesture signifying the opening of the
A in the heart. Her joined fingers opened like a lotus. The
sound emerged, grew, and gave birth to the U in the throat,
which then blossomed into the resonance of the Min space.
Devi had me observe the birds singing in the forest. She
relaxed my throat with her fingers, delicately massaging
my trachea.

"If you don't understand how the birds sing, the way in
which the song makes them shudder and intoxicates them,
you can't give life to the mantra. It's necessary to be en-
tirely absorbed in the pleasure of the sound and let it rise
naturally until the M becomes energy turning in the mouth,
and the spirit of the sound climbs in its fullness to the bindu

153
at the top of the skull. From this point on, the sound is no
longer silence. It becomes radiance, spreading around you
like a robe of pure light. Then it disperses into space and
comes to germinate again in your heart. All energy 1s cych-
cal. Nothing is lost, nothing disappears, nothing is created.
The mystical life 1s a spiral, a chuld's pinwheel upon which
Shiva never stops blowing. You breathe; Shiva blows. You
stop breathing; Shiva sleeps.”

We were in the last of the preliminary days. We slept
intertwined, and Devi introduced me to a new mystery.
Wrapped around each other like two vines before slipping
into sleep late at might, we began with a long period of
deep breathing, belly to belly. This breathing left me highly
intoxicated. Devi had explained nothing to me. At the first
embrace, she began to breathe very slowly and I had the
impression that she was enclosing me in her belly, that I
was becoming a fetus again, and that I was breathing with
her. Despite my well-developed rib cage, I still had some
sort of reserve that kept me from following her to the end,
but little by little, in letting myself go, I underwent ths
extraordinary experience. To encourage me, or to make my
last tensions disappear, Devi slowly caressed my face, throat,
ears, forehead, the nape of my neck, and my skull. Her
hands, like the rest of her body, let off a heat so intense I
felt as if I were melting each time I exhaled. Then she spoke
to me in a very soft deep voice while she slid me between
her legs:

"The body of Shakti 1s a garden where the adept, going
from one flower to another, breathes the perfume that pu-

nifies the heart, making him ardent but free of desire, subtle,

but charged with the power of the woman, delicate as a

154
young virgin, but powerful as a snow leopard. In breathing
the perfume of the yoni, you are intoxicated and recogmze
the existence of Devi in vourself. Climbing gently, you
breathe the nectar of the navel and recogmize in vourself
the onfice that nourished your embryonic consciousness.
Then, very slowly, you climb up between the breasts, and
there, you're intoxicated by the ambrosia of the heart of
the vogini, which recalls for you your own heart longing to
be totally opened. Then, inhaling the breasts, you recog-
nized the perfume of sleep, which descends upon you.

"During your dreams, you realize, thanks to this persis-
tent perfume, that it is the divine who dreams in you. Thus,
you can obtain the power to dream in full consciousness
and to be fully present, as a yogi is present in his cave, when
the tendencies enfolded in your deepest consciousness open.
Thus, 1n dreams, all traces of unsuccessful actions that cause
endless regret and obstruct the consciousness rise to the sur-
face, opening out and losing their paralyzing energy. All this
negativity then recogmzes a point of divine light in itself,
which has always been there. This 1s not a sublimation, or
any kind of transcendence, but simply the recognition of
how fundamentally everything is saturated with the divine.

"No act loses us; no violence we're subjected to destroys
us; no debasement chases out the divine. No one can give
us the divine, and no one can take it from us. And we can
have access to it at any time by breathing the intimate per-
fume of the woman, the perfume of the world.”

In the arms of Dewi, sleep took on the aspect of intense
rest, since the body and the consciousness seemed to re-
main vital and alert. It 1s a strange expenence, feeling so

deeply relaxed and so spiritually alive at the same time.

155
You open vour eves for a moment, and a wave of infimte
gratitude comes over you, and then you're plunged again
into this awakened sleep.

Each time my eyes opened, Dewvi's eyes opened too. In
the moon's glimmer, I saw her dark look, enlarged by the
closeness of our faces. There was always a sort of funda-
mental smile in her. Her ash-covered body warmed me in-
credibly. I felt a vital circulation of energy. By breathing
her in, I seemed to experience neural pleasure, orgasms in
the eyeballs simultaneous with an intense humming in the
skull, which spread to the coccyx and the soles of the feet.
It was then that I felt the internal heat of the yogis.

By morning, after these magical mights, I felt very much
like an amimal, like a young bear comung out of hiberna-
tion, full of strength and life. Our play at the waterfall had
the festive air of a big parade. This approach of a love that
doesn't rely on a single emotional fantasy and that seems
capable of expanding endlessly is one of the most powerful
shocks in the Tantric sadhana. It is love without the restric-
tions or the extreme tensions of passion, without manipu-
lation, without the anguish of continmty, of possession by
or of the other. It 15 a love that ceases to be taken or given,

in order to be overwhelmed by the divine.

One day, as we were drying ourselves in the sun on our
large, flat, warm rock, I began to think for the first time of
life after Devi - of my return to the Western world, of how
I was going to survive the separation. I then had the expe-

rience of seeing how, in a matter of seconds, this single
thought reduced the ecstatic field on which I was living. I

felt as if my whole body and consciousness were shrinking,
as 1f I'd been plunged into the head-shrinking liquid of the

156
Jivaro Indians. And this time, it wasn't a little pebble that
landed in the pot, but a big round one, the size of my
shrunken head, that Devi threw into the green water of the
basin. At the moment of the loud splash, IT immediately
regained my space.

"The closer an experience of total opening approaches,
the more the bodymind struggles. These moments are
all the more difficult to go through because the trip to-
ward the ego happens in a flash. You're suspended in
the real space of heavenly pleasure, and suddenly, you
leap into a cauldron of tar. The experience 1s unpleasant,
but you must get used to it. It 1s what awaits you until the
day when your heart opens completely.

"The embryo knows this anguish. The completely formed
infant knows it most when its mother's contractions begin.
Birth is a spiritual test equivalent to the awakening and
opemng of the heart. It 1s from this combat, from these
memories, that the gods are born. Temifying or kind, they
are only products of our consciousness's great struggle to
attain life and absolute love.

"Man is afraid of losing himself in the taste and smell of
the female genitals, because if his tension and suffering
are too great, the memory of his divine life inside the woman
can cause a great shock. A rupture makes the armor pro-
tecting lum from love's reality explode. A door 1s opened in
his hatred, and his suffering grows. In the same way, a
woman who fears the man's penis and can't let herself go,
adoring it in complete freedom, refuses her own power
and obstructs her own consciousness. She also opens the
door to negativity. Sexual relations then become combat

between two negative forces. Divine play is perverted, its

157
deep meaning goes unrecognized, and one stops being in
constant loving rapport with reality.

"We suffer from our absence from the world. The deep
consciousness becomes weighted down with each expen-
ence, and the nmverse becomes sad and gray. Loneliness
establishes itself, and the prospect of death becomes so ter-
rifying that we spend our time escaping from ourselves into
all sorts of artificial and linmted pleasures. When we dress
ourselves in ashes, we dress ourselves in the dust of the
dead, and by penetrating our hearts, we offer them the

freedom of finally recognizing the divine.

"The tantrika refuses limited pleasure. He lets lus con-
sciousness go back to the source. He recognizes the male
and the female in himself. He opens himself to the world
and then grasps that time and space, desire, lack of fulfill-
ment, and limited creativity are bogeymen meant for terri-
fied beings. If beings weren't terrified, there would be no
ecradual approaches to spirituality. If beings weren't terri-
fied, there would be no tests to submit to. If beings weren't
terrified, there would be no gods outside of the Self, no
paths leading to them, no illusory progress, no metaphys-

ics, no conceptualization of the divine.

"Shivaism offers unconditional freedom to the people of
the Kali Yuga, or dark age. Few are capable of grasping it.
It burns like a fierce fire, but it takes only a very small
opening in the consciousness for the divine to rush in. The
divine is like a guest one makes sleep outside. That's not its
natural place. It waits patiently to enter until we really want
to open a door or shutter part way. That's why we often
use the expression ‘coming back to its own home, or 're-

turning’ to the Self I was pushing your hand into the fire

158
the moment when you were opening your shutter. A sec-
ond too soon, and you would still bear the marks of the
burn."

On the morning after the twelfth night, we meditated,
chanted the mantra, and then went down to the river in
silence. Three times Dewi let the water run over my head,
and then we were on our way toward the heart of the for-
est for the merging of the Great Union. We took only a jug
of water, and I wondered how we were going to carry out
the ritual Dewi had described to me. Where would we find
the perfumed oils, the flowers, the palm wine, the sacrifi-
cial dishes, the incense, the cushions, the oil lamp, the

canopy of purple silk to hang above the divine lovers?

159
19

I drew the yantra, following Devi's instructions. She had
chosen a mossy spot, slightly sunken and protected. She sat
down in a lotus position, and I faced her. Dewi looked at me
for a long time, and as my eyes found their calm in hers I felt
tears well up and run down onto my chest. It was an expen-
ence of great fullness to which I completely let myself go.

"Those are the rose petals of our bed," Dewi said.

When this beneficial flood stopped, Devi asked me to
light the incense on the silver tray. She laughed at my
bewilderment.

"Children need only their imaginations to create trea-
sures, palaces, music, and perfume. It's enough to see the
silver tray and the incense for the nostrils and the senses to
be filled with wonder."

Then I saw the tray. I lit the incense. I smelled its deli-
cate sandalwood odor. Devi asked me to offer her the meat

roasted with spices and the palm wine. After having tasted

160
each, she put them carefully into my mouth. I experienced
their textures, tastes, and smells perfectly. I had lost all
sense of play. We were carrying out the Union, the gods
providing our imaginations with a fine materiality that
quenched our thirst.

Dewi asked me to thread the flowers together to make a
carland. I made them slide down the string one after the
other while she prepared hers. Then came the offering. Dewi
entered into the sound, and then, without emerging from
this state of deep absorption, she indicated to me that it
was time to touch her heart and the secret points before
perfuming her limbs. On the silver platter, IT opened the
flasks, their many essences ravishing me.

When that was done, she took her turn perfunung me.
Then she emitted a very deep sound of such low intensity
that it seemed to be sustaining itself on its own infinite
vibration. Without even knowing when the sound was born
in me, I realized at a certain moment that I was enutting
the same sound and that it was penetrating us totally.

Devi drew me toward her. I began to travel up and down
the terrain of her body like a traveler thirsting for infinite
slowness. She did the same, and we found ourselves 1m-
mediately inscribed in each other's consciousness.

When the mantra AUM gave us access to each other's
breath and voice, Devi's master and his Shakti responded
to our invitation and came to install themselves on the thick
cushions. A musician invited by Dewi took his sarod out of
its case while the tabla player tuned his two instruments
with the help of a little hammer. The sarod player turned
the pegs of the instrument, tightening or loosening the

strings until they were perfectly in tune.

161
Then I again offered flowers and sandalwood paste. Dena
asked the phallus of Shiva to become erect. Facing me,
Shakti bathed in a milky glow that seemed to emanate from
her skin. The sarod player began the slow alap (prelude in
which the fabla doesn't have a part) of a Bhairavi raga,
and, bending over Dewi, I kissed her lips.

The caresses, the gentle bites, the passionate scratches,
the hungry feasting on each other's gemtals, the slow curl-
ing oflight and supple bodies followed one after the other
exactly like notes, until the alap came to an end.

When we had been brought to a first orgasm by our
lovemaking, I entered Devi at the moment the tabla began
to play. The second orgasm was nearly immediate, and as
the intensity of the raga unrolled into the night, we rose
with the musicians to repeated and umnterrupted heights
in the trance.

When the music gave way to silence in the last simulta-
neous chord, we had taken the yoga posture, totally inter-
woven in each other. Thanks to Dew, the serpent of the
depth unwound itself in one great shudder, and the
kundalimi took possession of us.

162
20

In the days that followed the maithuna ritual, I came and
went, enjoying divine freedom, my bodymind continuing
to tremble. I felt like foliage that reality was filtering
through. The deep bond connecting Devi and me extended
to the entire world, and I spent day and night in a con-
tinual state of rapture. Everything took on a startling depth
because everything took place in a single space where the
ego was temporarily diluted. This presence of total reality
left me filled with wonder and free of all concepts. Each
movement attested to a deep harmony with the All

From the morming bath on, I felt myself to be in a state
of uminterrupted gratitude. I wanted to bow deeply to the
world, to sing out the wonder of each thing. Reality satu-
rated with the absolute never stopped running through me
as I ran through it, and nothing was without resonance. As

we climbed out ofthe water and dried ourselves in the sun
and air, Dewi said to me:

163
"You see, ecstasy is the natural human state, and the ob-
stacles we create to ecstasy are part of a dictatorial state our
thought makes us live in. Ecstasy 1s simpler than suffering. It
smells good. It is present throughout. It 1s with us always.
There is nothing to do and nothing to look for. It's enough to
stay totally open and let things occur without worrying about
changing their nature. By our being really present, con-
tinuously present, all reality becomes a source of joy and
happiness.

"You know that the moment for us to take leave of each
other has come, and you won't suffer because the bond
that unites us doesn't unite us to each other but simply
passes through us to extend to the whole umiverse. You
don'tbelong to me; I don't belong to you. We belong to the
world, to the divine, and at this moment we know that
with our whole being. Our bond isn't subject to time or
space. I will be everywhere you look. You have planted
yourself firmly in the heart of the goddess, in my heart,
just as the goddess remains in yours, as I remain in yours.
We are a divine waterfall for each other where we can bathe
ourselves in light and quench our absolute thirst.

"The universe 1s a great pot that we never stop shaping
with our flesh, our hearts, our thought - with all those little
things that we love to separate from one another by arti-
fice. But a good potter sinks his hands into the divine and
lets the divine take varied forms. He knows that the earth
contains the thirty-six modalities of consciousness, and he
doesn't spend his time analyzing them.

"While the man thinks, the tantrika makes a pot. While
the man confines his consciousness, the tantrika widens

the opening of the pot and lets his consciousness experience

164
the void. Distinguishing between what's inside the pot and
what's outside is possible only if you forget that a pot needs
an opening, without which there 1s seclusion, darkness, rot,
and decay.

"The tantrika widens his pot. He enjoys letting the uni-
verse spill in and penetrate it. When he meditates, he ex-
periences a single space. When he undergoes change, he
experiences a single space. When he dreams, he expen-
ences a single space, and when he dies, he experiences
nothing other than a single space. So for him, there is no
difference between meditating, living, dreaming, and dy-
ing. To experience a single space - that's absolute love."

Some time later, we went back up toward Dewi's hut to
share one last meal. The atmosphere was joyous and light.
I felt a bat of a pang at the idea of leaving, but I also knew
that Devi would be everywhere and that her grace would
never leave me.

Devi told me to ask her all the questions I wanted cleared
up, and while we drank some good strong tea, she answered
them.

"Will the day come when I'll be continually bathed in
this state?"

"When the moment comes, your heart wall open. The
primordial Shakti will appear to you, and you will be bathed
in an unalterable joy. Everything will rejoin simplicity. This
joy will be no different from what you know at this mo-
ment, but it will be without ups and downs, without varia-
tions in intensity, and everything will take part in it. You
will feel a more or less violent shock, after which the
kundalimi will no longer rise like a spaceship taking off but

will be more like an abundant and constant spring, which

165
endlessly renews itself by circulating through you. Only then
will you have received my complete transmission, my last
initiation, and the power to transmit the teaching yourself

"All teaching must be marked with the seal of the heart,
and the seal of the heart 1s what makes Tantrism pene-
trate all.”

"How will I know that my heart is really opened - that
it's not my imagination?"

"It's just as easy as knowing whether you've fallen off
the chff or are still on the edge. When you fall, your con-
cepts will be shattered like a bag of bones. When the fire
rises in you, you will have more and more trouble reemerg-
ing from ecstasy and reality both. You can't be fooled. In
the beginning, the ecstasy will come in waves and wall sub-
side as it pleases. You will feel moments of intense com-
munion and others that resemble oblivion. But when even
the smallest trace of the infinite 1s allowed into the con-

sciousness, it can't keep from totally emerging.

"The essential thing 1s not to chase after ecstasy. It arises
naturally if your presence in the world remains relaxed,
without goals and constraints - free, opened, and light.
There is no special practice to keep up. If you want to medi-
tate, meditate. If you want to take a walk, take a walk. If
you want to work, work. If you want to practice the
maithuna, practice the maithuna. If you want to withdraw
into the forest, withdraw into the forest.

"It's the continuous experience of freedom that consti-
tutes the tantrika's asceticism, not any constraint on the spint.
When ecstasy comes, take it. When it leaves, don't worry. If
you let the divine come and go as it pleases, it becomes fa-
miliar. If you force it to stay within you or pursue it, it can

166
become terrifying. Let vourself be. Be your own master. Stop
all searching, and you will find vourselfin the truth.

"When this awakening, this opening of the heart takes
place, don't fix it. Don't make it into a success. Let it be
dispersed into space. That's the only place where it can
reach maturity, which means opening for an entire life.
There 1s never an ultimate stage to be reached. Everything
is in constant flux. To let things be and to let things die
when the time comes - that's the whole meaning of life.
There's nothing else to do. Everything rises up again from
absolute freedom. Nothing fixed, nothing heavy, nothing
defimtive. No closed image of the divine, no dogma, no
belief. Do not be for or against a single one ofthe 1deas the
faithful habitually attach themselves to out of terror. Death,
karma, and reincarnation are only empty words used by
those who haven't realized the divine. All concepts, dog-
mas, beliefs are like the flesh and bones of the dead. With
time they end up as part of the earth again. As for the se-
cret teachings, they remain secret simply because those who
hear them or read them without having the necessary open
mind don't understand them. It's beautiful to see the let-
ters printed on the page. They see and understand only
what their minds and hearts can grasp.

"The great Tantric sages have written down their
thoughts. Despite that, the Tantric spirit of secrecy has never
been broken. It's like a charm that keeps unprepared eyes
from discovering territories they would dishgure by their
thoughts. The divine opens or closes the eyes, frees or ob-
structs the ears and the understanding of listeners.

"We speak to help adepts recognize what they already

vaguely know. Those who don't know, don't understand

167
the teaching. In any case, know how unimportant the words
are. What's perceived directly is the heart.”

Dewi stood up. She went with me to my hut and watched
me collect my things. I offered her my kmfe, which she
liked using so much. She offered me her small red neck-
lace with the tiny bells that chimed wonderfully when we
practiced the Great Umon.

Dewi took me in her arms and, with infimte tenderness,
held me close. This embrace lasted a long time. When we
looked at each other, I was surprised to see that her eyes,
like my own, were filled with tears. She smiled and said 1n
her softest voice:

"Who would we be if we refused emotion?"

"If my mind is filled with doubts, if the opening doesn't
take place, can I come back to see you?"

"Thave given you gold. Keep this gold within yourself until it
melts. Then you will have a dream. Your heart wall open com-
pletely, and the gold wall fall like fine rain in your conscious-
ness. Coming back would serve no purpose. The mountains
are vast. Freedom 1s great. I come, I go."

I put my pack on my back. Dewi rested her hand on my
head and caressed my face. I kissed her hand and crossed
the esplanade. As I was about to take the path that de-
scended to the village, Dewi called to me:

"Go by yourself, carry Devi within you, take your inte-
rior silence as master, and be free."

I adjusted my pack, made three great bows, and rushed
down the path to the village.

With great joy, I found Ram again. He offered me tea
and looked proudly at me. When I took my leave and gave

him enough money to cover taking provisions and neces-

168
sary goods up to Devi, Ram smiled, a little uncomfortably,
as if he'd been saving a big surprise for me.

"Each week, for more than a year, I've been bringing
Devi what she needs. I sit in her hut, we share a meal, we
talk, she tells me things, and me, I come back down and
serve tea to those who want it and say nothing.”

"She's a sorceress who feeds on dead bodies and pushes
men off the top of the cif!” I sad, laughing.

"That's right!" exclaimed Ram with an angelic smule.
"She's terrifying, with her bloodshot eyes!”

"And the man found dead in the river?"

"There has never been any dead man in the river. I think
it 1s you. Haven't you seen your body floating down 1t?"

Ram went with me as far as the bus stop, and with a
respectful smile I said my goodbyes to this budding tantrika
who had fooled me so well.

169
EPILOGUE

When I returned to Paris, the ecstatic moments lived with
Dewi left a lingering impression for a few months, which
was then replaced by a feeling of loss. I understood why
Devi said that a mystical experience had to find its fulfill-
ment in one's return to society. Ordinary life 1s simulta-
neously a marvelous master and a constant barometer of
spiritual realization. The occasions for feeding one's ego
are incessant, the frictions of personality continue, the frus-
trations and desires are no less. And it's only when one
begins to function with a certain interior harmony in rela-
tion to this frenzy that the frmt of the teaching reaches
maturity. I tried to remember Dewvi's advice: not to lose
myself in a frenetic quest or internal tension. I tried regu-
larly to be fully conscious of the thirty-six tattvas. I sue-
ceeded in stealing from life a few days of joy and profound
peace interspersed with passions of all sorts, which were
sometimes useful for the great fire that the tantrika tends

170
day after day, and sometimes consumed me and drew me
further away from seremty.

After my book Nirvana Tao came out in the Umted
States, I was invited to teach Buddhism, Tantrism, and
literature at some American universities. I remained there
for eight years. And it was precisely during this period,
which I spent so closely involved in the texts, the ideas,
and the history, that I lost the most important part of what
I had experienced with Devi. Many times I was tempted
to return to India and see her again, but I knew that I
would never find her.

Following these periods of tension, there were sometimes
moments of peace and communication, of powerful energy
mounting, often to the limit of tolerability. They were fol-
lowed by a very dark period.

There was a deep antagonism between the academic
approach and the sadhana, or the way of realization. Fi-
nally, I became aware that, thanks to studying the texts, I
was going to die stupid. It was by rereading Lao Tsu's Tae

Te Ching that I came to the decision to no longer teach:

The one who devotes lumself to learmng

acquires something daily.
The one who devotes himself to the Tao
divests of something daily. *

I returned to France and gradually won back my seren-
ity. I abandoned this compulsion that pushed me to always
discover new texts, new perspectives. I concentrated on

* Gallimard Editions, 19467.

171
the present, on being fully conscious of each moment, and
bit by bit IT again found that simplicity I had known with
Devi.

The ecstasies often stopped just short of my boundary, as
if I were a pot suddenly filling and in danger of spilling over
onto reality. These regular flashes opened me more and more,
and I felt that something was preparing itself without know-
ing exactly what. I sometimes had the feeling that thas over-
flowing would destroy me or lead me to madness - or, quate
the opposite, a feeling of great peace and deep connection

with reality.

Thanks to Devi, I had felt a harmonious surge of
kundalim, but I alse knew that many mystics experience
wild and sometimes terrible surges of this legendary en-
ergy, represented by a serpent and called "The Coiled One."
Nevertheless, little by little, my anguish dissipated. The ten-
sions in my consciousness relaxed to the point where I aban-
doned all searching and stopped waiting for whatever it
was - without, for all that, ceasing to practice full conscious-
ness through the tattvas.

This renunciation opened an enormously calm and har-
monious realm to me. I finally succeeded in letting myself
be, as I had let myself be at Dewvi's side. I began to feel her
presence, which sweetened the days and mights. I had the
sensation of becoming a sort of funnel into which all real-
ity poured.

On December 23, 1993, I was awakened by a dream
that completely changed my life. Kalou Rinpoche and Dew
appeared to me. Kalou Rinpoche held me close. I felt an
intense warmth. Devi, standing a few meters away, wore

that magnificent, radiant smile of hers that had always

172
overwhelmed me. My heart opened as if an implosion had
taken place and left a gaping hole in my chest. First this
void swallowed up the last book I had read, The Teachings
of Ma-tsu,™ then all the others, back to the first book given
me on my sixteenth birthday, the Shagavad-Gita, which was
engulfed and disappeared into my heart. I awoke. At this
instant, I felt the kundalini rise. The energy spread out like
a sort of internal tidal wave, beginning from the bottom
and nsing with a shudder into space after having traveled
through all the chakras. But the energy also spread like a
widening sphere around the Self I was prey to the same
joy, the same plenitude I had felt at the moment of the
Great Union with Devi. I knew that I had just received my
last initiation.

When I haven't lived Awakening, I desire it
When it occurs, fusion takes place

Expenence and expenencer are one

They are distilled in Absolute Reality

The months passed, and the rain of gold that Dewi had spo-
ken of never stopped falling on me. The slow maturation pro-
cess began. I lived simultaneously in ecstasy and in reality. The
Self was opened, rushing out in all directions 1n space, like an
internal big bang, after which, following the great Shivaic cycle
of expansion and retraction, it returned to the center of the
heart like an infinite breath.

* Les Entretiens de Macu, Ch'an master of the eighth century, introduction,
translation and notes by Cathenne Despeux, The Two Oceans, Pans, 1986.

173
A bit later, I decided that the time to transmit what I had
received had come. I returned to Los Angeles upon the in-
vitation of a Tantric center, and there, for the first time, I
taught. This had nothing in common with my umversity
teaching. I felt Devi's presence strongly, and I saw in the
faces of those seated around me that words came not from
the intellect but from the heart. Following that experience,
I opened the Tantra/Chan meditation center in Paris and

began my account of this long 1mtiation.

The opening of the meditation center corresponded to
my certainty that the teachings of Shivaic Tantrism, in their
simplicity and depths, responded marvelously to the hopes,
possibilities, and expectations of women and men today.

We all feel that we must find an antidote to the frenzy in
which we live, but for all that we are not ready to adopt be-
liefs and practices that are culturally foreign to us. In Tantrism,
we do not go toward some external thing. On the contrary,
we direct ourselves toward our core, our own minds. Tantric
practice demands nothing more than this return to the Self.
To know, to observe, and to calm ourselves, we don't have to
take recourse in any belief whatsoever. Everything 1s born of
the mind and returns there. Shiva and Shakti are born there.
We are image and reflection at the same time. By observing
the mind we will find there all that we have lost to the exte-
rior: peace, tranquility, the strength to act without being sub-
ject to filters or limitations that we have accepted or created,

the power to fully communicate with life.

The means for knowing our minds are meditation and
the practice of full consciousness. In Tantrism, meditation
1s very simple. There are no supports, no visualizations, no

complicated mantras, no fetishes concerming posture. You

174
sit on a comfortable cushion or on a chair. You calm down.
You breathe peacefully, without forcing anything

=

and you
observe. Ideas run by very quickly. You do nothing to slow
down this relentless rhythm. You simply take note of the
degree to which the mind is racing out of control. For many,
it already comes as a huge surprise to see that we can be
conscious of this incessant bombardment. Little by little, af-
ter three or four meditation sessions, the sitting, the calm,
the fact that we are there waiting for nothing, not compet-
ing, without a single goal except to be open, to breathe, to

feel, brings about in us a strong sense of well-being.

The sessions last an hour at the Tantra/Chan center.
We practice the sarangi relaxation. We release the ener-
cies ofthe body with a few simple exercises, and then we
sit down to hear a talk on Tantrism. Following that, we
meditate for half an hour, after which we exchange view-
points and ask questions. In order for the practice to
change our way of living and perceiving the world, it's
important to make an effort and compel ourselves to medi-
tate each day. Very quickly, the pleasure and the calm that
come over us will make it so we don't need to force our-
selves to meditate. That will happen naturally, like being
drawn to a source of pleasure. Deep well-being restores
communication between our minds and bodies as well as
the potential of our active and emotional life and the qual-
ity of our relationships with others. This pleasure has the
particular advantage of always being available, since it
depends only on itself.

While everything else in life 1s an occasion for measur-
ing oneself against others and putting on performances,

meditation opens a space where there 1s nothing to prove.

175
We are there simply to know ourselves, to accept ourselves
unconditionally, and to love ourselves without making judg-
ments on what we do or think. We communicate with all
our energies without dismissing anything. All energy 1s
precious. Anger, jealousy violence, and negativity are just
as acceptable as their counterparts that we consider
positive.

By no longer labeling and classifying our impulses, we
cain access to a fabulous reserve of energy we can use for
meditation and for paying attention to the world. There is
no progress, in the sense that we apply that term to a sport
or a game. Everything can happen very quickly if we simply
agree to sit down in complete freedom. There 1s nothing to
learn, no texts or esoteric principles to study. It's enough to
let oneself be free from all mental and physical constraints.
The single indispensable thing is to have the desire to know
oneself, to take full advantage of life, and to release oneself

from suffering.

To meditate in a group, two times a week 1f possible,
makes the beginmng of meditation easier. In opening up,
one benefits from the energy created by the concentration
of the others. It will then be easier to practice alone.
Through discussion, one finds the answers to questions that
arise naturally and discovers what the others feel deep
within themselves. The candor with which we speak is as-
tonishing. It rises instantly with the openness produced by
meditation.

From the beginning, meditation practice is accompanied
by full consciousness, which makes us discover a marvel-
ous thing: each day, in no matter what life, there are nu-

merous occasions for wonder and for feeling joy and fullness.

176
It's enough to be attentive. Usually, on the moment of awak-
ening, the mind takes up its furious rhythm before we can
enjoy the slightest bit of tranquulity. We get up, the mind
goes full speed, and life escapes us. We do everything me-
chamcally. While our hands act and our legs carry us, wile
we prepare our breakfast and wolf it down, sometimes add-
ing in a third activity, we aren't fully conscious. We eat our
toast, drink our coffee, think about what we are going to do,
listen to the news, leaf through a magazine, jump into the
shower, etc.

Anyone can experience full consciousness from the mo-
ment of waking onward. Those who try find a surprising
pleasure in it. Each activity carried out with attention and
calm leaves an impression of fullness, which has an influ-
ence over our whole day. To get up and eat breakfast, fully
conscious, takes no more time than letting ourselves go on
at our usual frenzied pace; exactly the opposite. That doesn't
mean that we become deaf and mute, cut off from the life

around us, tense and concentrated on our toast. It means
that we make full use of all that we are given.

At first we will have a hard time maintaining this con-
sciousness for very long stretches. But if, over the course of
the day, we can say to ourselves, "I walk; I breathe; I am
here completely; I am aware of the temperature, the na-
ture of the sky, the movements of my body, of a face, the
trees, an opening,” then all life's experiences will be trans-
formed. We will find occasions everywhere for Ining fully,

for communicating with the environment, with others, and

with the Self.

The whole art of Tantric practice 1s to develop this pres-

ence in the world, which meditation deepens daly. You find

177
yourself enjoying things that until then didn't seem the least
bit interesting. You note with surprise how this opening com-
pletely transforms your quality of hfe and interactions with
others. All of a sudden, you will have created an empty space
in yourself, a sort of park where the trees, the flowers, the
pools, the shade, and the light will allow you to relax and let
others enter.

We are all proud of having acquired, through expen-
ence, a strategy for living that determines our relationships
with others and allows us to survive. We spend a good part
of our time refimng this process and testing it. We are con-
stantly reinforcing the ego, trying to get to the end of daily
trials. The more we brace ourselves to resist it, the harder
the world seems. But when we agree to let go of every-
thing fixed, we discover a peaceful energy that little by
little frees us of all strategy. We discover that being open
and present allows for everything heard, everything said,
everything given, everything received. The tantrika lets be
and lets himself be. It's a matter of refusing to be manipu-
lated or to manipulate others. There's no longer confronta-
tion between fragile forces but an open space where things
can happen in a surprising way.

However difficult our lives, we daily pass up very deep
pleasures that could change our relationship to the world
and allow our bodies and thoughts the freedom they need
to blossom. No one can control our lives twenty-four hours
a day. In the most constricted circumstances, you can find
a space where you can get a taste of freedom. As soon as
that point of light, however small it may be, establishes
itself in our lives, we have begun the process of deep inter-

nal transformation, which nothing and no one can hinder.

178
Practice will change our perspective and our way of acluev-
ing happiness. We will need to have much less and to be much
more. Gradually, this desire to be will replace the objects of
happiness we have created that aren't always attainable. More
and more we will notice the infinite number of small things to
which no one has special rights and to which we have access
at any given moment.

The peace and tranquility provided by the experience of
full consciousness will continue to grow, and difficult exter-
nal circumstances will no longer seem so bad. Much of our
tension, stress, and anguish will give way to this wave of
lucid attention, which 1s full consciousness. The inescapable
part of negative emotions and situations also depends on
our degree of openness. With practice, a growing miracle
begins to take root in the everyday. Everything that the mind
has tied into knots, it can untie. At our core, there 1s an
empty place - inalienable, pure, and free - to which we can
have access if we want it. We will discover the major impor-
tance of feminine values, coming from openness, nonvio-
lent communication, and love, wlich are Tantrism's source,
and we will reintegrate them into our everyday lives. We
will discover silence, space, and peace. This change begins
at the center ofthe Self and can then extend out toward the

exterior. It 1s the source of profound transformation.

Without this radical transformation in our outlook and
daily experience, it 1s obvious that pursuing initiation into
the Tantric sexual practices is futile.

We domesticate the void, learn to enjoy it, and make it
an important part of our everyday life. When we no longer
fear it, an unlimited and fundamental freedom remains:

that of our own nunds.

170
Thanks to the simple, timeless techniques of Tantrism,
meditation will no longer be a moment of peace and calm,
stolen from a hectic life. We will see that this state 1s not a
digression and that it spills out of the framework of prac-
tice to become part of everyday life, even to the point of
entering our dreams.

Today, I have the feeling that all contact, all human rela-
tionships, all everyday events come to be inscribed in this
open space by practice. To live fully, to be totally present in
the reality of our world, to write novels, to publish other
authors, to taste the thousand pleasures of life are all part
of the way. Withdrawing into the Self, spiritual obsession,
and being closed to others are signs of a spiritual develop-

ment that has gone astray and reached an impasse,

To free up what's blocking the mind and body, we also
offer Indian massage at the center. Influenced by thousands
of years of Tantric culture, it draws upon deep knowledge
of the mind and body and their interconnections, energy
channels, and vital points. A science, an art, and a kind of
therapy all at the same time, it frees the deep, joyous, open,
and luminous being that is hidden away in each of us.

With one hand on the chakra of the heart, the masseur re-
laxes the head and neck. The body is then rubbed with warm
essential oils to revitalize the skin and relax the muscles. Then
begins a very slow overall massage, starting at the shoulders
and in one continuous wave moving to the soles of the feet,
then reversing the process. The masseur 1s at the center of the
body. His fingers move along the energy channels, varying their
pressure and pausing on the vital points, which they relax, re-
sulting in deep abdominal breathing and release. These

peripheral sensations move to the interior of the body, touch-

180
ing each internal organ and setting off a powerful harmoniza-
tion of energies. With a shudder, this is transferred to the entire
body, producing general relief in each cell's pleasure at feeling
alive, a relaxed mind, an intense warmth, and a sudden
suppleness in the diaphragm and the muscles.

At this stage, the massage becomes a double medita-
tion, total presence in the self and in the joy of feeling alive.
It is a return to the peace that has never left us but that we
have forgotten.

These practices - the deep work of opeming, of confi-
dence, and of exchanges - all release accumulated nega-
tive energies and allow us to rediscover harmony, fullness,
and the freedom to be, delighting in total communication

with the universe and reality.

Each day I pay homage to my wonderful masters, and
I try to perpetuate the simplicity and the beauty of their

teaching.

181
Portrait of Daniel Odier
by Kalou Rinpoche

If you would like to receive information about the
Tantra/Chan meditation center activities and retreats,
please contact:

Tantra/Chan

15 rue Benard

75014 Pans

FRANCE

phone: (33) 1 45 42 38 37

fax: (33) 1 45 42 64 46

185
Jody Gladding 1s a poet and translator who studied at
Cornell and Stanford Umversities. Her first book, Stone
Crop, appeared in the Yale Younger Poets Series. She lives

in Vermont.

184

Acknowledgements
Introduction: an invitation to Bombay

1. A Persuasive Young Bania
2. Lessons from the souk
3. Catching Live Serpents
4. A first-class fountain
5. Guru of the equity cult
6. Friends in the right places
7. The Great Polyester War
8. The Paper Tiger
9. Under siege
10. Sleuths
11. Letting loose a scorpion
12. Business as usual
13. Murder medley
14. A political deluge
15. Under the reforms
16. Housekeeping secrets
17. Pandava or Kaurava

INTRODUCTION
AN INVITATION TO BOMBAY
The envelope was hand-delivered to our house in Golf Links, Tan enclave in New
Delhi whose name captured the clubbable lifestyle of its leisured and propertied
Indian residents, soon after we had arrived in the middle of a north Indian winter to
begin a long assignment. It contained a large card, with a picture embossed in red
and gold of the elephant-headed deity Ganesh, improbably carried on the back of a
much smaller mouse. Dhirubhai and Kokilaben Ambani invited us to the wedding of
their son Anil to Tina Munim in Bombay.
In January 1991, just prior to the explosion in car ownership that in later winters
kept the midday warmth trapped in a throat-tearing haze overnight, it was bitterly
cold most of the time in Delhi. Our furniture had still not arrived-a day of
negotiations about the duty payable lay ahead at the Delhi customs office where the
container was broken open and inspected-and we camped on office chairs and foldup beds, wrapped in blankets.
The Indian story was also in a state of suspension, waiting for something to happen.
The Gulf War, which we watched at a big hotel on this new thing called satellite
television, was under- cutting many of the assumptions on which the Congress
Party’s family dynasty, the Nehrus’ and Gandhis’, had built up the Indian state. The
Americans were unleashing a new generation of weapons on a Third World regime to
which New Delhi had been close; its Soviet friends were standing by, even agreeing
with the Americans.
The Iraqi invasion of Kuwait had pushed up oil prices and forced the Indian
Government to evacuate some three million of its citizens working in the Gulf. The
extra half-billion dollars all this cost India was pushing the country close to default
on its foreign debt. Officials from the Ministry of Finance were already negotiating a
bail-out from the IMF in Washington; the IMF was setting stiff conditionalites in effect
a complete shift from Nehru’s model of high external protection for the economy and
government allocation of savings. Even the CNN clips of Tomahawk cruise missiles
zipping neatly down the streets of Baghdad were in themselves part of another
breach in India’s walls. The cities who ran the national TV monopoly or the big
newspapers no longer had India’s half illiterate population to themselves.
Little of this was admitted in New Delhi. The coalition government of V P Singh,
which had swept out the glamorous Rajiv Gandhi on a battery of corruption scandals,
had itself collapsed in November after less than a year in office. India was ruled by
an even smaller coalition of opportunists under a wily politico called Chandrasekhar,
kept in office at Rajiv’s pleasure for who knew how long. Everyone clung to the
autarkic, Third World verities. Politicians and journalists pounced on the slightest
admission by their fellows that perhaps India’s vision of the world had been flawed
and it had better adjust to the new order. At the Ministry of External Affairs, in the
red sandstone majesty of Sir Herbert Baker’s Secretariat buildings, a bright young
official on a new economic desk assured me that India’s finances were strong enough
to take the strains. At a party of intellectual’s young academics and filmmakers in
rough cotton kurta-payjama suits scoffed at the prospects for satellite TV. How would
the advertising payments get out to the broadcaster through the maze of foreign

exchange controls? Which foreign companies would want to plug products they could
neither export to India nor make locally?
The wedding invitation was a good excuse to break away from this stalemate in New
Delhi, and make contact with the Indian commercial class in Bombay. There it looked
as if a raw entrepreneurial spirit was straining to break through the discouraging
political crust. Word of the Ambani family and their company Reliance Industries had
spread to Hong Kong as prime examples of this brash new India which might finally
have its day, courtesy of the changes the Gulf War symbolised.
Everything about the Ambanis, in fact, was a good magazine story 'The young
couple’s courtship had been a stormy one, ready-made for the Bombay show-biz
magazines. The bride, Tina Munim, was a girl with a past. She had been a film
starlet, featuring in several of the Hindi-language films churned out by the hundreds
every year in Bollywood most including improbable violence, song-and-dance
routines, and long sequences with the female leads in wet, clingy clothes. Before
meeting Anil, Tina had had a heavy, well-publicised affair with a much older actor.
The groom, Anil, was the tear away one of the two Ambani boys. His parents had
frowned on the match. Bombay’s magnates usually tried to arrange matches that
cemented alliances with other powerful business or political families. This one was
not arranged, nor did it bring any more than certain popularity. Hired assailants had
been sent with acid and knives to scar Tina’s face, so went the gossip (apocryphal:
Tina’s face turned out to be flawless).
Anil had threatened suicide if he could not marry Tina, went another rumour. Finally,
the parents had agreed.
The father, Dhirubhai, was no less colourful and even more controversial. He had
first worked in Aden in the 1950s. I recalled a stopover there in my childhood,
aboard the S. S. Oronsay, a buff-hulled Orient Line ship, en route to my father’s
posting in London with his Australian bank in 1958. The image was of grim, darkbrown peaks surrounding a harbour of brilliant blue, a host of merchant ships tied up
to moorings, and a busy traffic of launches and barges. The trip ashore was by
launch, landing at Steamer Point, where Arabs and Indians besieged the white faces,
trying to sell us Ottoman-style cushions or to drag us into their duty-free shops. Now
someone like those desperate salesmen in Aden was a tycoon in Bombay.
Ambani had got into polyester manufacturing in a big way, and got huge numbers of
Indians to invest in shares of his company, Reliance Industries. In India, the home of
fine cotton textiles, it seemed that people couldn’t get enough polyester. The only
constrain on local producers like Reliance was the government’s licensing of their
capacity, or where they built their factories. To jack up his capacity, Ambani had
become a big political fixer. In the recent minority government formation, it was
said; his executives had been shuttling briefcases of cash to politicos all over Delhi.
There had been epic battles, with the press baron Ramnath Goenka of the Indian
Express and with a textile rival from an old Parsi business house, Nusli Wadia. A year
or so earlier, a Reliance public relations manager had been arrested for plotting to
murder Wadia. The man had been released, and nothing was moving in the case.
Was it genuine or a frame-up? Indian colleagues were not sure: no conspiracy was
accepted at face value.
So we took our first trip inside India, making our way down to New Delhi Railway
Station in a yellow-and-black cab, one of the 1954 Morris Oxford design still being

made in Calcutta, in the rose-coloured haze of a winter afternoon; letting a redshirted porter heave our bags on his head and lead us to the train, establishing our
rights to the coveted two-berth compartment in the middle of the First Class AirConditioned carriage from the list pasted by the door. The train slid across the fat
beige northern landscape of wheat-stubble and square houses as night fell. In the
morning we were trundling past palm trees and mangrove-bordered creeks before
humming into Bombay through suburban stations packed with commuters.
If New Delhi was a city of books, discourse, seminars and not much action or
precision, Bombay was one where people made the most of the nine-to-five working
day before battling their way home to the distant suburbs. Most crucially, Bombay
had accepted the telephone as a medium of dialogue-not merely as a preliminary to
an exchange of letters setting up a meeting. It was also unashamedly concerned
with money and numbers. New contacts like Pradip Shah, founder of India’s first
rating agency for corporate debt, with the slightly alarming acronym of CRISL, or
Sucheta Dalal, a business journalist at The Times of India, or Manor Murarka, partner
of the old stock broking firm of Batlivala & Karani, rattled off the details of industrial
processes, forward- trading in the share market or conversion dates of debentures at
bewildering speed.
The wedding was going to be big, so big that it was to take place in a football
stadium, the same one where Dhirubhai Ambani had held many of his shareholders’s
meetings. But it began in an oddly casual way. As instructed, we went mid-afternoon
to the Woodhouse Gymkhana Club, some distance from the stadium. There we found
guests milling in the street outside, the men dressed mostly in lavishly cut dark suits
and showy ties, moustaches trimmed and hair brilliantined. The women were heavily
made up, laden with heavy gold jewellery, and wearing lustrous gold-embroidered
silk saris.
Anil Ambani appeared suddenly from the club grounds, dressed in a white satiny
outfit and sequined turban, sitting on a white horse. A brass band in white frogged
tunics struck up a brash, repetitive march and we set off in separate phalanxes of
men and women around the groom towards the stadium. Every now and then, the
process would pause while the Indian guests broke into a pro- vocative whirling
dance, some holding wads of money above their head. The stadium was transformed
by tents, banks of inarigolds and lights into a make-believe palace, and filled up with
2000 of the family’s closest friends and business contacts. They networked furiously
while a bare-chested Hindu pundit put Anil and Tina through hours of vedic marriage
rites next to a smouldering sandalwood fire on a small stage. Later, the guests
descended on an elaborate buffet on tables taking up an entire sideline of the
football pitch, starting with all kinds of samosas and other snacks, working through a
selection of curries and breads, and finishing with fruits and sweets wrapped in gold
leaf. The next day, the Ambanis put on the same spread-if not the wedding
ceremony at another reception for 22000 of their not-so-close friends, employees
and second-echelon contacts.
Retrospectively, by the standards of Bombay a few years later, it looks a modest and
traditional affair. Before their joint marriage of three children in 1996, the
ingratiating Hinduja family had an elaborately illustrated book prepared on the Hindu
marriage and sent to all invitees. Other business alliances were celebrated with
elaborate stage-sets based on the ancient epics; lines of elephants led the
processions of the grooms and diamonds were pasted to the foreheads of women
guests. But at the time, the sheer size of the wedding was seen as a sign that

Dhirubhai Ambani had made it through the political travails of 1989~90 and was
unabashed-and certainly not strapped for cash or friends.
It was fattening to be there and to have a Reliance public relations manager take me
up to meet the Ambanis- flattening, within a month of arriving in India, to meet the
country’s fastest moving, most controversial tycoon. An interview was promised
shortly, once the festivities were over. An early cover story was clearly a possibility,
an antidote to the gloomy political news out of Delhi. It would help my standing at
the Far Eastern Economic Review if India was an upbeat business story and I was
right on to it.
That of course was the desired effect. Reliance was desperate to raise funds for
expansion and was looking to foreign sources, so some image-building in a
prestigious magazine was highly useful. A newcomer to India would be more inclined
to play down the controversies and look at the company’s prospects.
The interview, when it took place a month or so later, was stimulating. Dhirubhai
Ambani came limping around a huge desk when I was ushered to a sofa and greeted
me warmly. Despite the obvious effects of a stroke in a twisted right hand, his
mahogany skin was smooth and healthy, his hair plentiful and slicked back decisively
in a duck’s tail. His attention was unwavering. Disarmingly, Dhirubhai admitted to
many of the youthful episodes that were the subject of rumour, and responded
evenly when I raised some of the criticisms commonly leveled against him. He didn’t
mind people calling him an ‘upstart’s or even worse names. It just meant they were
trapped in their complacency while he was racing ahead. But the disputes were now
‘history’s and the former critics were now all his ‘good friend’s buying their polyester
and raw materials from him.
‘The orbit goes on changing,’s he declared airily. ‘Nobody is a permanent friend,
nobody is a permanent enemy. Everybody has his own self-interest. Once you
recognise that, everybody would be better off.’ However, Ambani did point to an
unfortunate trait in his countrymen. ‘You must know that, in this country, people are
very jealous.’ It was not like in Hong Kong or other East Asian countries, where
people applauded each other’s success, he claimed. In India success was seen as the
prerogative of certain families. But he didn’t really mind. ‘Jealousy is a mark of
respect, he said.
The interview resulted in a cover story for the Far Eastern Economic Review which
portrayed Ambani as the business underdog trying to break through the
government’s red tape and the prejudices of a tired Bombay business establishment.
Naturally enough, Ambani and his PR men were pleased. His one quibble, I was told,
had been my pointing out some glossed-over problem areas in the Reliance annual
reports, which had been put in the notes to the accounts, fine-print areas that only
the professional analysts re-ally read. The comments were true enough, but they
made it look as though Reliance was unusual among Indian companies in these
practices.
The Reliance public relations office continued to be attentive, supplying advance
notice of newsworthy events. At one point later in 1991, there was another glimpse
of Dhirubhai Ambani’s energetic mind. His Delhi office passed on a request for
information about Indonesia’s engagement in the late 1980s of the Swiss cargo
clearance from Societe Generale de Surveillance (SGS) to administer its imports and
exports, thereby sidelining the country’s notoriously corrupt customs service for

several years. I sent off some clippings, intrigued that the man accused of smuggling
whole factories through the ports of India now seemed to be advocating Swiss
efficiency in place of the lax administration of which he had supposedly taken
advantage. The proposal got to a high level in the government before being canned,
but not before causing panic in the Indian customs service-which may have been all
Dhirubhai wanted to do anyway.
There were daily updates from the Reliance PR staff on an issue of convertible
securities issued in the Euro market in May 1992, the first by an Indian company
and tangible proof of India’s reforms reconnecting it to the world economy. There
was a company-organized trip out of Bombay up to its new petrochemicals plant at
Hazira, involving a bumpy fight in a chartered turboprop to the airfield at Surat, bare
of airport terminals or navigational aids as far as could be seen, and a drive through
the old textile trading city, squalid despite its lucrative silk and diamond industriesand, a couple of years later, notorious for an outbreak of bubonic plague. Across the
Tapti River, a glittering array of pipes and towers had indeed come up, and cryogenic
tankers full of sub-zero ethylene were tied up at the jetty. Reliance was clearly not
just a paper empire.
But the history of political and corporate activity had put a sinister shadow across the
gleaming success. M through the government changes of 1990 and 1991, the press
carried references to a certain large industrial house’s supporting this or that party
or being behind certain politicians. Scores of party leaders, ex-ministers, senior
bureaucrats, and heads of the big government- owned banks and corporations were
said to be Ambani friends’ or Ambani critics’. Mostly it was the friends, it seemed,
who got the jobs.
People made bitter and cynical remarks about the Ambanis in private. The press
cover-age, especially in the Indian business magazines, had a repetitive quality. A
myth was being created and sustained. At a meeting of shareholders in a big
Bombay engineering firm named Larsen & Tourbo late in 1991, convened to approve
a takeover by the Ambanis, this undercurrent of hostility welled up into a physical
melee. In the shouting and jostling, the two Ambani sons had to fee the stage. The
controversies kept continuing right through the 1990s.
Dhirubhai Ambani attracted adulation or distrust. To his millions of investors, who
had seen their share prices multiply, he was a business messiah. To one writer, he
was a ‘Frankenstein Monster’s created by India’s experiments with close government
control of the economy.
‘There are three Dhirubhai Ambanis, one of his fellow Gujaratis, a writer, told me.
‘One is unique, larger than life, a brand name. He is one of the most talked about
industrialists and for Gujarati people he has tremendous emotional and sentimental
appeal. He is their ultimate man, and has inspired many emulators. The second
Dhirubhai Ambani is a schemer, a first-class liar, who regrets nothing and has no
values in life. Then there is the third Dhirubhai Ambani, who has a more
sophisticated political brain, a dreamer and a visionary, almost Napoleonic. People
are always getting the three personalities mistaken. In a legal chamber lined with
vellum-bound case references, a senior lawyer took an equally stark view. Today the
fact is that Ambani is bigger than government,’ said the lawyer in all seriousness. ‘He
can make or break prime ministers. In the United States you can build up a super
corporation but the political system is still bigger than you. In India the system is
weak. If the stock exchange dares to expose Ambani, he tells it: I will pull my

company shares out and make you collapse. I am bigger than your exchange. If the
newspapers criticise, he can point out they are dependent on his advertising and he
has his journalists in every one of their departments. If the political parties take a
stand against him, he has his men in every party who can pull down or embarrass
the leaders. He is a threat to the system. Today he is undefeatable. Surprisingly, the
role played by Dhirubhai Ambani received only cautious side-references in most
books about contemporary Indian politics. No biography of him was in the
bookshops, although Indian journalists and commentators had produced 1quickie’s
biographies of other new celebrities in vast numbers. The work of the economic
historians largely cut out in the 1960s. The few biographies of other Indian
businessmen were commissioned works, not very well written, and notable for a
worshipful attitude to the subjects. No one drank, cursed, cheated or philandered.
Their workers were all part of the family. Almost everyone lived an abstemious
vegetarian life, accumulating wealth only to give it away to temples, hospitals and
schools.
By 1992, Reliance was tapping investors in Europe for funding, and international
investment funds were being allowed to play the Indian share market directly. A few
years later, the company had started borrowing in New York on a large scale. The
Ambani story was becoming of greater interest outside India, at least to investors
and perhaps to a wider audience watching the explosive growth of capitalism across
Asia. The idea of this book occurred in 1992, and I put it to Dhirubhai Ambani later
that year at a second meeting in his Bombay office. Ambani seemed receptive, and
agreed that his life story could be inspiring for a younger generation of Indians as
well as interesting to those thinking of dealing with India. I left the meeting with an
understanding that he had agreed to talk about his life at meetings to be arranged
and that, if so, I would show him the completed draft as a courtesy and listen to any
objections-but retain the final say on the content. The book would not be credible
otherwise, Ambani concurred.
A year slipped away without further progress, and then relations with Reliance took a
downturn. By the end of 1993, Reliance was in the bidding for several oilfields in the
Arabian Sea. The government oil search corporation had discovered the fields but did
not have the funds to build the huge production rigs, gas compressors and pipelines
that were needed. Several contacts among rival bidders were alleging that the
tender was being rigged in favour of Reliance. Indian politicians and bureaucrats are
masters at tilting an ‘pen and transparent’ tender into a one-horse race, by
techniques such as keeping the weighting of bidding factors uncertain or secretly
promising later con-cessions to compensate for underbidding. In the event, Reliance
swept the field, and a director with one of the losers told me: ‘we were shafted, and
for the wrong reasons.’
Writing about this would not advance my request for access to the Ambanis for the
book, but my duty was to the magazine that employed me. The first of two articles
in the Far Eastern Economic Review about the oilfields battle drew a bitter complaint
from Anil Ambani that the report was ‘defamatory’ a complaint not sent directly to
me, or to the magazine, but in a letter sent to the head of one of the rival
companies, the Australian resources giant BHP, and copied to the heads of the
American and Australian diplomatic missions in New Delhi.
Thereafter, I wrote occasionally about Reliance and, in July 1995, left my job with
the magazine to spend more time on the book. A letter to Dhirubhai Ambani
informing him of this move went unanswered. Over the following 18 months, the

research led me into all corners of Bombay life, from the slum homes of the semicriminal underworld to the offices of powerful business tycoons, to several cities and
towns in Gujarat on crowded Country buses and trains, to converted churches in
London and Leicester ringing with the Hindu chants of the Gujarati Diaspora.
The reception varied. Almost everyone wanted to know if the book was authorised or
sponsored. It was neither, I said, but Ambani had been told and so far had not expressed to me a view either way about it. Many of those people who knew Dhirubhai
Ambani in his early days in Junagadh and Aden and then starting his business in
Bombay were willing to talk. Some others-such as his former Aden colleague and
Middle East coordinator in Dubai, Bharat Kumar Shah, asked for a letter of clearance
from Ambani himself, which again was not forthcoming. One Bombay journalist who
agreed to share his knowledge picked up the telephone immediately I arrived at his
flat and rang Anil, Ambani’s office. ‘I have told him if you are wanting scandal you
will lose the whole story’, he said down the phone to the executive who answered.
The next day, I was invited to lunch by a pair of Reliance public relations executives
and quizzed closely about my intentions.
Dhirubhai Ambani did respond to a birthday greeting sent at the end of December
1995, but there was still no word about his attitude to the book. A month later,
however, I few especially to Bombay for an interview arranged with his former
export manager’s Rathibhai Muchhala, who according to numerous other sources
‘new everything’s about the early days. At the appointed time, Muchhala was not at
his office in the industrial belt behind Bombay’s airport. A secretary telephoned him:
he was at the Reliance head office. Muchhala was sorry, but Ambani’s office had
advised him not to meet me.
Ambani’s personal assistant, Dinesh Sheth, then confirmed this: there were several
proposals for biographies and some months earlier Dhirubhai Ambani had indicated
to his staff that he did not want at that stage to encourage or co-operate with any of
them. Sheth professed ignorance of my previous letters, so I sent another the next
day, offering to come at any time to discuss the book.
Ironically, the reception among those figures who had been critics or opponents of
Reliance was also wary. Phiroz Vakil, a senior advocate in tiny chambers in Bombay’s
old Fort, surveyed me intently while stuffing Erinmore Flake tobacco into his pipe and
warned that people would suspect I was being used by the Ambanis to draw out
information. Among some others, my earlier favourable write-ups of the Ambanis still
told against me. ‘I suppose you think he’s a hero,’ said the retired Finance Ministry
official and Cabinet Secretary Vinod Pande, down the phone.
Others just seemed too battle-weary when I rang the Orkay Silk Mills chairman Kapal
Mehra and asked to meet him, there was a long pause. ‘I’m afraid that won’t be
possible,’ Mehra said. The former Prime Minister Viswanath Pratap Singh did not
reply to a letter and giggled nervously when I cornered him at a cocktail party in
New Delhi. No, he could not possibly talk about any one company, Singh said, easing
away quickly. Those who did agree to talk for the most part insisted on anonymity:
they had to live in India, they explained. Word of some of these meetings must have
been passed back to Reliance, for in January 1997 a stiff letter arrived from Kanga &
Co in Bombay, lawyers for Dhirubhai Ambani and the company, warning that their
clients understand and apprehend that the pro- posed publication contains material
which is defamatory to our client’s. It was claimed that in no time ’had there been
any attempt to verify the material with the clients. Action for exemplary damages

and injunction against publication were threatened if the book was defamatory. At
this point it had not even been completed, let alone delivered to the publishers.
Fortunately, the several controversies that hit Reliance in the second half of 1995
produced a deluge of paper from Indian Government agencies. The various reports
opened up many previously obscure and controversial aspects of the company’s
operations. At the same time, the controversies compelled Reliance to give its own
explanations, which became part of the public record. Even so the overall result,
unavoidably, has been a book that becomes progressively less intimate to its subject
as the story advances, drawing more on published reports, available documentation,
and anonymous interviews with those who had engaged with Dhirubhai Ambani and
Reliance Industries from the outside. The book is less satisfactory and less
sympathetic, perhaps, than it might have been with co-operation from the Ambanis
and access to them. As my research and writing progressed, however, word came
from several sources that the family was compiling its own record of Dhirubhai
Ambani’s life and his company’s growth, so a version of events from the inside may
also be put to the public soon.

A PERSUASIVE YOUNG BANIA
Among all the 550-odd princely rulers left, with British Residents at their shoulders,
to run their domains in the last years of the Raj, few were more eccentric than
Mahabat khan, the Nawab of Junagadh. The Nawab’s family had run this fiefdom,
one of several in a political jigsaw covering the Saurashtra peninsula in Gujarat,
since a faujdar or military commander of the Mughal Empire named Sher Khan Babi
founded his own subordinate dynasty in 1690. Two and a half centuries later, this
warrior’s descendant was best known for his love of dogs. Mahabat khan had 150 of
them, with an equal number of dog-handlers on his payroll and individual quarters
for all the canine retinue. To celebrate the 1wedding’of one canine pair, the Nawab
was reputed to have spent two million rupees (then worth about ‚150 000 sterling)
and to have given his 700 000 subjects a public holiday.
The Nawab was the first political target to come into the sights of Dhirubhai Ambani,
although it is unlikely that he was ever specifically aware of it. It was during a
movement aimed at overthrowing the Nawab’s rule and securing Junagadh’s
accession to India during the Partition of British India in 1947 that Ambani, then a
teenage high school student, had his first experience of political organisation and his
first brushes with authority.
It was the only moment in modern times that Junagadh has figured in the
calculations of nations and statesmen. Even in the 1990s, Junagadh and its
surrounds, known as the Kathiawar region, remains one of the quietest, most
traditional regions of India, and one of the least accessible in the otherwise busy
northwest coastal area of the country.
A few times a week, a turboprop flies into the simple airstrip at Keshod, unloading
people from Bombay or the Gujarati Diaspora overseas coming to visit their relatives
and make offerings to family gods at local temples. In the town itself, clusters of
1940s Ford Mercury taxis wait for groups of passengers or for hire at weddings. The
railway network was built to connect each of the several former principalities of
Kathiawar to the outside world rather than with each other. Once you are in
Kathiawar, all now part of Gujarat state, traveling between towns often means one
or more changes of line and extensive doglegs and backtracking in the journey. The
last steam engine on regular service in India, apart from scenic mountain railways,
puffed between Junagadh and the Gir sanctuary for the last Asiatic lions until 1996.
The land itself is dry, open and stony. The monsoon rains quickly run off down the
short rivers and nuilahs that radiate from the central rocky hinterland out to the sea.
The roads are lined with stunted pipul (fig) trees, and the stony fields are fenced
with straggling rows of cactus. The standard building material is a porous duncoloured stone cut by saws into ready-made blocks from pits near the seashore.
There are few of the modern ferro-cement extravagances built by the newly rich,
hardly any of the industrial plants and their residential colonies seen extending out
into farmland in other Indian regions, and only a few private cars.
But if the landscape is monotonous, Kathiawar’s people compensate for it with
riotous colour where they can. The women drape themselves with cotton scarves tiedyed in red and orange. The local scooter-taxi is the Enfield motorcycle grafted to a
fat tray resting on two wheels at the back, with the handlebars decked with coloured
lights, electric horns and whirling windmills. The homes of wealthy merchants are
decorated with mouldings of swans, peacocks, flamingos, parrots, elephants, lions

and tigers. Massive double doors, twelve-paneled, with heavy iron studs, open
tantalisingly on to huge inner courtyards.
A blood-drenched history and complicated mythology are attached to the landmarks
and constructions of Kathiawar. On the coast to its west, at Dwarka, is the place
where Lord Krishna died. To the south, the temple of the moon at Somnath is a
centre for Hindu pilgrims from all over India. In the steep Girnar hills above the city
of Junagadh, long staircases take pilgrims to Jain temples dating back to the 3rd
century BC.
Looming over Junagadh city, the fortified rock-citadel of Uparkot has inscriptions and
cave-sculptures from the time of the 3rd century BC ruler Ashoka. The city was an
important centre for Hindu rulers of Gujarat in the first millennium. Then, starting
with the Afghan warlord Mahmud of Ghazni, who invaded in 1024 AD and pillaged
Somnath, Junagadh suffered four centuries of sackings. Mughal rule gave it some
stability with Muslim rulers controlling its largely Hindu population. Both its rulers
and its people were passive onlookers in the contest for India’s trade among the
English, Dutch and Portuguese, whose galleons fought vicious battles off the Gujarat
coast. A five-metre long cannon broods over the town from the ramparts, a relic of
an unsuccessful attack on the Portuguese trading post at Diu, on the coast southeast
of Junagadh, by the feet of Sultan Sulaiman the Magnificent of Turkey in the 15th
century.
At night, seen from the coastline at the south of Junagadh, processions of navigation
lights travel left and right along the horizon. The seaborne traffic between the west
coast of India and the Arabian ports goes on as it has for millennia, ever more
intense.
Gujarat was the trading hub of ancient India, where Indian cottons and silks were
traded to Arabs and later the first English East India Company in return for silver,
gold, incense and coffee from the Red Sea port of Mecca. Up until the early 15th
century, Chinese junks had also come to western India. Later India and India-based
European traders became the trade intermediaries between the Arab and Chinese
spheres. The Gujaratis were prominent in this pre-colonial Indian Ocean trading
network, with the wealth of India in its cloths, indigo, opium and spices merchandise.
The small ports of Kathiawar took part in this trade. Diu handled much of Gujarat’s
trade with Aden in the west and Malacca in the cast. Gold, silver, quicksilver,
vermilion, copper and woollen cloth would be exchanged for Indian gold and silver
embroideries and brocades and for cotton muslins of a fineness expressed by trade
terms such as abrawan (running water), baft hava (woven air) or shabnam (evening
dew).
Later of course the East India Company grabbed its monopolies in opium, tea, indigo
and spices in a three-way trade equation between China, India and Europe, topped
up later by the British Empire with gold bullion from Britain’s new colonies in South
Africa and Australia at the southern corners of the Indian Ocean. Indian
entrepreneurs-in Calcutta the Marwari traders and moneylenders originally from
Rajasthan, in Bombay the Parsis (Zoroastrians originally from Persia)-began moving
into large-scale industrial production late in the 19th century.
Smaller traders also took advantage of Pax Britannica by taking steamer passages to
all corners of the Indian Ocean and Southeast Asia-no passports were needed-and
opening small stores and service stations. Most were from Gujarat; a large

proportion of these from Kathiawar. Two of the biggest commercial families in
Uganda, the Mehtas and the Madwhals, came from Porbander, and the thriving
Chandarlas of Kenya came from Jamnagar. Until 1938, the free port of Aden was
part of the Bombay administration. The East African shilling, the currency of the Red
Sea and Indian Ocean trade, was virtually pegged to the Indian rupee in value.
The Gujaratis were stingy with their customers and stingy with themselves. Bhaskar
Bhattarcharya, a television broadcaster in New Delhi, spent his childhood years in
Uganda where his father was a British colonial official. The epicurean ways of the
Bhattarcharyas from Bengal contrasted sharply with those of the Patels or Shahs
from Gujarat. ‘When we first arrived, the women took my mother aside and said:
this is the way you do things,’ he remembers. ‘If you were invited for dinner, you got
a couple of vegetable dishes and rice. My parents liked to splash out, and serve meat
and fish to their guests. Of course, by the time we left, the Gujarati peon in my
father’s office had probably saved more than he had.’ The wealth was the result of
rigorous saving, abstemious living, and endless hours of work by unpaid family
members -a migrant’s success story in many parts of the world. In East Africa, it
created a resentment that led to the expulsion of the Indian traders and
appropriation of their assets after the colonies became independent in the 1960s.
The effect was to find the Gujarati diaspora worldwide, to start the process of capital
accumulation again.
Among the Gujaratis, the people of Kathiawar are renowned for their exuberance of
speech, inventiveness and commercial drive. ‘This is a place of have-nots,’ notes
Shecia Bhatt, a former editor of the magazine India Today’s Gujarati-language
edition. ‘t is a barren land, but out of stone they somehow draw out water. The
people are so colourful because the landscape is so colourless. They fill their heads
with colour. Amongst Gujaratis, the best language is among Kathiawaris: so many
words. Even the trading class will have extraordinary expressions. Kathiawari traders
have more vibrant terminology than other traders. They were the first to go out of
India for better prospects. Adventure is second nature to them. They have less
hypocrisy. All of the other business communities affect modesty to the point of
hypocrisy. Dhirubhai Ambani is part of that culture.’ In one sense, Ambani was born
to be a trader, as his family belongs to a Bania caste, a section of the Vaisya
category (varna) in the traditional Hindu social order whose roles are those of
merchants and bankers. This instantly provided a whole network of relationships, a
community and social expectations that made commerce-taking a profit from buying
and selling in markets, the accumulation of capital - an entirely natural and
honourable lifetime’s occupation.
Although socially below the Brahmins (priests and scholars) or the Kshatriya
(warriors and landowners) and rarely part of aristocratic elites, the Vaisya castes
came to exercise enormous power across India. They marshalled huge amounts of
capital, which funded the campaigns of maharajas and nawabs and at times the
British trade and military expansion when the budget from London ran short of
operational needs. Centuries before the modern banking system, Vaisya shroffs or
bankers were the conduits of a highly monetised Indian economy, remitting vast
sums around India at short notice through a sophisticated trust system based on
hundi (promissory notes).
The commercial instincts of Gujarat’s Vaisya were encouraged by a convenient
interpretation of Hinduism preached by the holy man Vallabhacharya in his
wanderings around the region early in the 16th century Another widely followed

religious school known as Shaivism (from the god of creativity and destruction,
Shiva) had preached that the world was unreal and an impersonal abstract essence
was the absolute reality and truth. The Jain and Buddhist religions, which had sprung
from Hinduism, also preached privation, renunciation and destruction of the self.
Vallabhacharya saw a personal god who created and sustained life, for whom living
life to the full was a form of devotion. His school became known as Vaishnavism, as
the focus of devotion was the god Vishnu’s playful avatar (incarnation) Krishna, perhaps the most widely adored and human face of the divine among Hindus.
In his classic text on the Vaishnavas of Gujarat, the scholar N. A. Thoothi pointed out
that this naturally appealed to the people of a land richly endowed with opportunity
like the central parts of Gujarat. It was a philosophy that justified their way of life
and gave a divine purpose to their roles as providers and family members. It also
fitted the rising social status of the Banias in Gujarat, overriding the formal varna
hierarchy.
As Vaishnavism grows, the Varnas decline. We have noticed, for example, how the
Vanias [Banias] have reached a social status as high as that of the Brahmins
themselves. This upsetting of the balance of the Varnas has been greatly due to
economic causes. The merchant and the financier and the capitalist have, by sheer
force of wealth and power, for a while become dictators over all, even over the
priestly class. A justification of their way of living, a theory of life and a pathway
suited and helpful to the living of a life engrossed in work and duty as a man,
husband, father, citizen and so on, a hope that such a mode of life as they live is
acceptable to the highest deity - the Gujaratis naturally sought for all these.
Ambani’s particular caste is called the Modh Bania, from their original home in the
town of Modasa north of Ahmedabad before a migration many centuries ago to
Saurashstra. The Modh are one of three Bania castes in this part of Gujarat, who
might eat meals together but who would each marry within their own caste. They are
strict vegetarians, and only the men take alcohol. Their practice of Hinduism follows
the Vaishnavite path. But the main object of their pilgrimages, on marriage or the
start of a new business venture, is a black-faced idol with a diamond in his chin
located in a temple at Nathdwara, a small town in the barren hills behind the lake
city of Udaipur in Rajasthan. This idol represents Srinath, an avatar or incarnation of
Lord Krishna, and was brought to Nathdwara from Mathura (Krishna’s birthplace) by
a holy man to escape the depredations of the fierce anti-Hindu Mughal emperor
Aurangzeb. For reasons that are not clear, Srinath has become the familiar god of
the Modh and other Banias. Portraits based on the Nathdwara idol are often seen in
the offices of Bania businessmen.
In later years, Ambani and his family made frequent visits to the temple of Srinath,
flying into Udaipur airport in his company’s executive jet and driving straight up to
Nathdwara. In 1994, Ambani built a large ashram (pilgrim’s rest-house) in
Nathdwara for the use of visitors. The three-storey building, faced in a pink granite,
is dedicated to the memory of his parents.
If the Modh Bania practise piety in the temple, and abstemious ways in their homes
they are known as fiercely competitive and canny traders in the marketplace, with no
communications about taking advantage of opportunities for profit. A saying in
Gujarat goes: ‘apale hojo kadh, pan angane na hojo Modh’s meaning: ‘It is better to
have a leucoderma [a disfiguring skin pigment disorder] on your forehead than a
Modh as guest in your house.’ Like other Bania castes of the region, the Modh Bania

looked far beyond their immediate patch. For centuries it has been a custom for
young men to make trading voyages to Arabian ports, building up personal capital
over nine or ten years hard work and modest living before returning to marry and
take over the family business. Sons inherited family property in equal proportions,
with the oldest son assuming the authority
of family head.
But all this was a nebulous heritage for Dhirajlal Hirachand Ambani, born on 28
December 1932. His home-town was Chorwad, literally meaning ‘Settlement of
Thieves’ though no one seems to remark on that. It is set a mile or so back from the
fat Arabian Sea coastline where the Nawab had a two-storey summer palace built of
the dun-coloured stone quarried from pits nearby. The railway from Junagadh
bypassed the town to the cast, looping towards the old port of Veraval and Somnath.
His father, Hirachand Ambani, seems to have been a diffident trader when he tried
his hand at petty commerce, as a wholesaler in ghee (clarified butter, a cooking
medium in India). He is recalled by many acquaintances as a ‘an of principle’s
meaning perhaps that he was too good-willed to be good at making money. He is
better remembered as a village schoolmaster in the administration of the Nawab of
Junagadh. From 1934-36, Ambani senior was headmaster of the Chorwad primary
school, whose classrooms with their battered furniture remain little changed around
a tree-lined yard across the road from the town’s bus stand.
The industrialist and parliamentarian Viren Shah, whose family also comes from
Chorwad, remembers Ambani senior as a stocky man with a dark-brown skin,
normally dressed in a white turban, long coat and dhoti (a piece of cloth draped into
a rough pantaloon). The village schoolmaster was private tutor for several years for
another member of the same family, Jayan Shah, who remembers him as a good
teacher and very strict.
Hirachand Ambani made little money, and lived in extremely austere circumstances.
The family home still stands in a hamlet called Kukaswada, two or three miles
outside the main part of Chorwad. It is a two-roomed stone dwelling with a stamped
carthern floor, entered by a low doorway and dimly lit by openings under the caves.
Ambani was married twice, having a son from his first marriage (named
Samadasbhai) before being widowed. His second marriage gave him five more
children, with Dhirajlal or Dhirubhai as his diminutive became-in the middle.
The family’s poverty did not keep the Ambanis from contact with better-off members
of their social peer group. The Bania occasionally got together for meals or picnics.
The Ambani children mixed freely with the Shahs, who were already prospering from
a move to the then hub of British commerce in Calcutta, where they set up India’s
first factory making aluminum cooking pots.
The two houses of the Shah family in Chorwad, Shanti Sadan and Anand Bhavan,
were big and rambling in the traditional style. As well as learning all the ways of
business, the children were expected to learn various sports including horse riding,
swimming and athletics, and to take their turn milking the 20 cows and 10 buffaloes
kept in the gardens. The Shah family had become early followers of Mahatma
Gandhi-also a Bania from Kathiawar-and often gave him accommodation in Calcutta.
An uncle of Viren Shah and Jayan Shah had even retired from business and become
a Gandhian social activist in Chorwad, carrying out upliftment work among its
Harijans (the former Untouchables) and running a fitness camp for youth.

Jayan Shah remembers Dhirubhai, who was about seven years younger than him,
coming to Anand Bhavan. Jayan Shah’s father took an interest in other people
children, lending them books to read and asking them to do odd jobs around the
house. Dhirubhai was welcomed with great affection, and returned it with respect.
Later, when he had gone away to work overseas, Shah remembers him dropping by
to pay his respects during a vacation back in Chorwad, arriving with great gusto and
a feeling of an old relationship.
The guild-like support of his merchant caste helped Dhirubhai continue his education
after finishing at his father’s old primary school. In 1945, he moved up to Junagadh
and enrolled at the Bahadur Kanji High School. This shared with a university college
a large yellow stucco edifice on the outskirts of the city that had been built in 1902
by the nawab of the time and named after him. Because of his family’s poverty,
Dhirubhai was admitted as a free student. He found accommodation in a boarding
house funded by the Modh Bania for children of their caste.
The Second World War had largely passed by Kathiawar, save for overfights by
military transports and the occasional visit of the new army jeeps. The movement for
Indian independence had not. On returning from South Africa, Gandhi had
established his ashram in Ahmedabad, the main city of Gujarat, and carried out
many of his agitations against British rule in the same region, including the famous
‘Salt March’s to the sea to protest against the government monopoly of salt in 1930.
His activities were financed by Indian industrialists from the Hindu trading castes,
fore-most among them the Calcutta-based Marwari jute-miller G. D. Birla. His
abstemious lifestyle was an extension of their own ideals, more familiar to them than
the Anglicized manners of the Nehru family. But a real self-interest was also
involved. The industrialists also saw in the Bania-born Gandhi a counterforce within
the Indian National Congress-the main secular vehicle of the independence
movement-to the socialist and communist ideas that had taken a strong grip on the
thinking of educated Indians. Gandhi’s ideas of industrial devolution to the villages
were intrinsically opposed to the proposals for state capitalism and central planning
of investment then being promoted by the Left in India as elsewhere in the world.
In Junagadh, the ideas of Gandhi and Sardar Patel, the Hindu nationalist lieutenant
of Nehru who was also a Gujarati, cast a strong influence. The Nawab, with his
Indian Political Service Resident Mr. Monteith at his side, was automatically put in
defence of the status quo. His police force and its detective branch kept a close
watch on the independence movement, and carried out many arrests of agitators
throughout the 1940s.
At the Bahadur Kanji School, Dhirubhai was quickly infected by the independence
mood. Krishnakant Vakharia, later a leading lawyer in Ahmedabad, was two years
ahead of Dhirubhai at the school and met him soon after his arrival in Junagadh. The
two took part in a gathering of students to discuss the freedom movement. Vakharia
recalls that all were inspired by the nationalist ideals of Gandhi, Nehru, Patel and
most of all the socialist Jayaprakash Narayan, then still in the Congress Party.
The Modh boarding house where Dhirubhai was staying became the headquarters of
a new group to push these ideals, which they called the Junagadh Vidyarti Sangh
(Junagadh Students’ League). The objective was to take part in the national
independence movement and Gandhi’s swadeshi (self-reliant) economic programme,

which involved boycotting imported factory made goods in favour of village
craftwares such as home-spun cotton (khadi). Activities were to include meetings to
salute the proposed national fag of India-the saffron, white and green tricolour with
the ox-wagon wheel in the middle, which was then the Congress fag-as well as
motivation sessions and sports meetings for the other students.
Vakharia became the president of the Sangh, with Dhirubhai and another student
called Praful Nanavati serving as secretaries. ‘e organised a lot of functions, like
saluting the national fag, and took a lot of risks,’ said Vakharia. At one time we
printed pamphlets with a photo of Gandhi, and with that we approached some
leading citizens to be our sponsors-but no one agreed. In Junagadh at that time no
one was allowed to even utter “Jai Hind” or “Vande Mataram” , or sing national
songs. Even wearing khadi made you a suspect in the eyes of the Nawab’s CID. In
1946, the students learned that Kaniala Munsi, a lawyer who was later a leading
Congress Party politician and a minister in Nehru’s first government, would be
visiting Junagadh. They decided to invite him to address their members in the
compound of a boarding house for lain students. The Nawab’s police summoned
Vakharia, Dhirubhai and Nanavati, and threatened the three with arrest, expulsion
from school and trouble from their parents unless they gave an undertaking that no
political speech would be given.
It is here that Dhirubhai shows a spark of his later genius at bringing apparently
irreconcilable demands into an accommodation, if through a dubious intellectualism.
“He had said that a literary figure would deliver a speech,’ said Vakharia. Dhirubhai
whispered that there was nothing wrong in giving this undertaking. “We are not
going to give the speech. If there is any breach in the undertaking, it’s a problem
between Munsi and the police.” Munsi came and delivered a rousing speech in favour
of early independence.
As 1947 wore on and partition of British India along Hindu Muslim communal lines
became more likely, the political position of the princely states came under great
scrutiny. By August, when the transfer of British power was due, all the rulers came
under pres-sure to accede to either India or Pakistan. In most of the more than 550
states, the decision was clear-cut because of geographical position, the religion of
the ruling family, and the predominant religion of the population.
Three difficult cases stood out after ‘Freedom at midnight’ on 15 August. In Kashmir,
contiguous with both India and Pakistan and with a Muslim majority, the Hindu ruler
wavered. In the immensely wealthy and large central Indian state of Hyderabad,
which had a Hindu majority, the Muslim Nizam had dreams of independence from
both India and Pakistan. Then there was Junagadh, what the historian H. V Hodson
called ‘The joker in the pack’.
Junagadh was close to the western side of Pakistan, and had a Muslim ruler. But its
fragmented territory was interlocked with that of neighbouring Hindu-ruled states,
and its people were mostly Hindu. Moreover, it contained the great Hindu pilgrimage
sites of Somnath and Dwarka.
In 1946, the Nawab’s prime minister and closest adviser, the Diwan, had become
sick and gone into prolonged convalescence. Stepping into his shoes in May 1947 as
acting Diwan came Sir Shah Nawaz Bhutto, a politician from Sindh active in the
Muslim League of Mohammad Ali Jinnah, the father of Pakistan. (Bhutto himself was
the father and grandfather of two later prime ministers of Pakistan, Zulfikir Ali Bhutto
and Benazir Bhutto.) Bhutto kept in close touch with Jinnah and had the Nawab obey

his advice to ‘Keep out under all circumstances until 15th August’. Then, on the day
of the transfer of British power, the Government of Junagadh announced its
accession to Pakistan. Hodson believes Jinnah never actually thought Junagadh
would be allowed to join Pakistan. The objective of the exercise was to set
uncomfortable precedents for Nehru in the more pressing contest for Kashmir and
perhaps Hyderabad. If Nehru agreed to a plebiscite in Junagadh, which he eventually
did, it would help Pakistan’s case for a popular vote in Muslim-majority Kashmir. If
the Junagadh ruler’s decision was accepted, over the wishes of his people, the same
could apply in Hyderabad. If the Indians simply marched into Junagadh, protests
against a similar Pakistan, use of force in Kashmir would be greatly weakened. Nehru
adopted the course of negotiation while throwing a military noose around Junagadh
in the neighbouring Hindu-ruled states, which had all acceded to India. Two subordinate territories of Junagadh, the enclaves of Babariawad and Mangrol, were
taken by Indian troops on 1 November 1947 without bloodshed.
Meanwhile, Indian nationalists began agitating within and without Junagadh for the
overthrow of the Nawab. In Bombay on 25 September, they declared an Arazi
Hakumat or Parallel Government under the presidency of Samaldas Gandhi, a
relative of Gandhi who was editor of the newspaper Vande Mataram. From a
temporary base in Rajkot, Gandhi kept in touch with supporters inside Junagadh by
human couriers simply walking across the open frontiers of the isolated state. Other
nationalist journalists, including the editors of the Gujarati newspaper janmabhoomi
in Bombay, called for volunteers to gather in Bhavnagar and other cities close to
Junagadh for a non-violent invasion.
The students in the Junagadh Vidyarti Sangh threw their limited weight against the
Nawab also. ‘we were too scared to carry out physical sabotage like attacking power
stations,’ said Vakharia. ‘our sabotage consisted of spreading false rumours to cause
panic, and supplying information back to the provisional government. We used to
send someone to Jetalsur or Jedpur in the Indian union to pass on the information.
In Junagadh, as in many other parts of India, the partition steadily developed a
murderous communal nature. Two Muslim communities, called the Sodhana and
Vadhana, had taken a militant position in support of accession to Pakistan and
mounted big pro-cessions through Junagadh, threatening Hindus with retribution if
they opposed it. As it became clear that Pakistan was in no position to support the
Nawab, Hindus turned on the Muslim minority and massacred whole communities in
some outlying villages.
Food shortages developed, and the Nawab’s revenues dried up. As his administration
lost its grip, the Nawab decided the game was up and made a hasty departure for
Karachi, taking with him all the cash and negotiable assets of the treasury, his family
and many of his dogs (though his consort, the Begum, forgot her youngest child in
the royal nursery and had to turn back to collect the infant). On 8 November, after
an earlier meeting of the State Council, Bhutto wrote to the Indian Government’s
representative at Rajkot asking India to take over the state to avoid a complete
administrative break down, pending a honourable settlement of the accession issues.
The Indian Army moved into Junagadh without incident on 9 November, and the
communal tension quickly settled down. However, Vakharia recalls a small communal
riot breaking out in Junagadh soon after independence, when some shoe shops
belonging to Muslims at Panch Hatadi (Five Shops Area) were looted by Hindus. The
students of the Junagadh Vidyarti Sangh went to the area to protect the Muslim
shops, but their presence was misunderstood by the police.

One of the students was a fellow Modh Bania and boarding house companion of
Dhirubhai named Krishna Kant Shah, who had been born in Kenya and sent back to
Junagadh for his education. He was arrested by the police as one of the looters and
taken to the lockup early in the evening. The leaders of the Sangh went to the police
headquarters and met the police commissioner, named Lahiri, to argue Shah’s
innocence.
‘Dhirubhai [who was then 16] showed a lot of courage in arguing with the police
com-missioner to defend Shah,’ Vakharia said. The arguments went on for two or
three hours, and all of us were threatened with arrest for obstruction of justice. But
we were determined we would not go until our colleagues were released. Eventually
they decided to let Shah go at midnight. It was a debt Dhirubhai was to collect from
Shah in controversial circumstances more than 30 years later.
The people of Junagadh voted overwhelmingly to join India when a plebiscite was
held in February 1948, though Pakistan never recognised it. Dhirubhai returned to
his studies, and took his matriculation in 1949. Vakharia studied law and continued
with his political activity, following Narayan out of the Congress Party into the new
Socialist Party in 1948. On graduating in 1951 he moved to practise in Rajkot and
then Ahmedabad and eventually came back into the Congress later in an active
legal- political career.
With his family still extremely poor, Dhirubhai had no such option. On finishing high
school, he had to look for work. At the age of 16, Dhirubhai was physically strong,
and already possessed of the persuasiveness that was to mark his later business
career.
It is tempting to look into the culture of the Modh Bania for an explanation of what
his critics see as his ruthless business ethics and ‘shamelessness’. But many other
entrepreneurs have also sprung from the same background in Kathiawar: most
would shrink from the manipulation of the government that became part and parcel
of the Ambani operation, even at the cost of less success.
The answer lies probably in the deep poverty that his family endured as the cost of is
father’s devotion to a teaching career. While he also learned that life is a web of
relationships and obligations, Dhirubhai was fired with an ambition never to become
dependent on anyone or to stay long in somebody else’s service.

LESSONS FROM THE SOUK
Early in the 1950s, officials in the treasury of the Arabian Kingdom of Yemen noticed
something funny happening to their country’s currency. The main unit of money, a
solid silver coin called the Rial, was disappearing from circulation. They traced the
disappearing coins south to the trading port of Aden, then a British colony and
military bastion commanding the entrance to the Red Sea and southern approaches
to the Suez Canal.
Inquiries found that an Indian clerk named Dhirubhai Ambani, then barely into his
twenties, had an open order out in the souk (marketplace) of Aden for as many Rials
as were available. Ambani had noted that the value of the Rial’s silver content was
higher than its exchange value against the British pound and other foreign
currencies. So he began buying Rials, melting them down, and selling the silver
ingots to bullion dealers in London. ‘he margins were small, but it was money for
jam, Dhirubhai later reminisced. After three months it was stopped, but I made a
few lakhs [one lakh = 100000 rupees] of rupees. I don’s believe in not taking
opportunities.” Dhirubhai had gone to Aden soon after finishing his studies in
Junagadh at the age of 16, following the long tradition of boys from Bania families in
Kathiawar heading for the Arabian trading ports or the market towns of East Africa to
gain commercial experience and accumulate capital.
A network of personal contacts kept jobs within the same community. Dhirubhai’s
elder brother Ramniklal, known as is Ramnikbhai, had gone to Aden two years
before, and was working in the car sales division of A. Besse & Co. Founded by a
Frenchman named Antonin Besse, the company had developed from trading in
animal hides and incense between the world wars into the biggest commercial house
in the Red Sea area, selling cars, cameras, electrical goods, pharmaceuticals, oil
products and food commodities to both British and French territories in the Arab
world and the Horn of Africa, as well as to Ethiopia.
Another Gujarati, Maganbhai Patel, from the Porda district, joined Besse as a junior
accountant at the age of 18 in 1931 and was made a director in 1948. He estimates
the company controlled about 80 per cent of the region’s commerce soon after the
Second World War. It had 30 branches, and six to eight ships of its own in the
subsidiary Halal Shipping. It was indeed successful: shortly before his death at the
age of 72 in 1948, Antonin Besse made a donation of one million pounds to endow St
Anthony’s College in Oxford.
Thereafter, the company was run by two of his sons, Tony and He was hired, and
soon after arrived by steamer in Aden. As Susheel Kothari notes: ‘The first sight of
Aden is always a shock.’ The oil-filled blue waters of the port are backed by steep
crags of dark-brown rock, remnants of an old volcano, with no sign of vegetation.
Aden had flourished in Roman times as a way station on trading routes between
Egypt and India. The opening of the Suez Canal in 1869 revived its importance, and
it became a major coaling port for European shipping to Asia and Australasia. From
its occupation by a detachment of Indian sepoys sent by the East India Company in
1839, Aden had been an important link in the ties of Britain to the Indian Raj. Until
1937, when it was put under the Colonial Office in London, the territory was
administered from India. The Indian rupee circulated as its currency until it was
replaced by the East African shilling in 1951.

The outpost had been a punishment station for British regiments deemed to have
shown cowardice or other offences against discipline while in India. As one of its last
governors, Charles Johnston, noted in a memoir, it had been ‘he dumping ground,
even as late as between the wars, to which regiments sent officers who had got
themselves into matrimonial difficulties’.
The colony also became the entrepot for the Red Sea and Horn of Africa, where
deep-water ports were few. Cargoes of cattle hides, coffee, aromatic gums and pearl
shell were brought to Aden by wooden sailing dhows, and bought by trading firms
like Besse, Cowasji Dinshaw, Luke Thomas and Cory’. In return, basic commodities
such as sugar, rice and textiles were shipped back.
Between the world wars, the biplanes of the Royal Air Force kept the hinterland quiet
by machine-gunning the villages of any unruly Yemeni tribesmen. Behind this shield
of bullets, the middleman trade flourished. The definitive historian of British rule in
Aden, R. J. Gavin, noted:
Aden indeed consisted of a hierarchy of brokers from the heads of foreign firms to
the lowest workman or child who offered his labour or hawked in the street.
Speculators, hoarders and price rings frequently sent commodity and foodstuff prices
rocketing up and down, while moneylenders and dealers dampened the effect of this
for the rest of the population at a price which included a claim to social leadership.
Acquisitive individualism was mitigated only by ethnic and other local solidarities
formed outside rather than within the town. Aden’s economy developed rapidly after
the Second World War, but its business milieu still had some of this character when
Dhirubhai learnt his basic techniques in the 1950s.
The spur to Aden’s growth was the decision of British Petroleum to build a new oil
refinery in Little Aden, another crater jutting into the sea across the bay from the
main town. BP’s existing refinery in the Gulf port of Abadan had been nationalised by
a new Iranian government. The refinery employed up to 11000 workers at any one
time during its construction over 1952-54, and then had a permanent staff of 2500
housed in a comfortable village. This sparked off a construction boom which saw
Aden extend be-yond the wastes and saltpans of the causeway which had been kept
clear for defensive reasons in earlier times.
Later in the 1950s, the British began concentrating strategic reserve forces in Aden
from other bases in the Gulf and East Africa. By 1964, Aden had some 8000 British
military personnel plus dependents-and their demand for housing kept the
construction activity going. Aden’s population grew from 80000 in 1946 to 138000 in
1955.It became a more modern economy, and air-conditioning ameliorated the hot
humid weather in the midsummer months. But it retained many exotic features,
including the daily inward fight by Aden Airways of the mild narcotic called qat. From
a hedge like bush in the mountains of Ethiopia, the qat leaves had to be consumed
fresh and were delivered to consumers in Aden within a few hours of plucking at
dawn. ‘It is not medically harmful, so far as can be ascertained,’ noted Johnson, the
former governor, although if taken in excess it lowers the appetite and produces a
characteristic green-faced, cadaverous appearances.
Just before mass air travel arrived with the first passenger jets, Aden overtook New
York in 1958 to become the biggest ship- bunkering port in the world. As well as for
cargo shipping and tankers, it was a refueling stop for elegant liners of the P &- 0
and Orient Lines as well as crowded migrant ships taking Italians and Greeks out to
Australia.

Disembarking tourists, brought ashore in launches from the ships moored out in the
roadstead, were immediately surrounded by desperate Arab and Indian salesmen
and touts, offering cheap cameras, fountain pens, transistor radios and tooledleather items. After making their purchases and taking a quick taxi tour around the
arid town, most were glad to get back to their P & O comfort and security. Aden had
an air of menace, of repressed resentment at its naked display of foreign military
and commercial self-interest. As Gavin observed: ‘For a thousand years or more
Aden had essentially belonged to the merchants of the world, be they South Yemeni
or foreign, while the people of its hinterland watched with jealousy and povertystricken eyes from beyond its gates. But for the young Gujaratis hired by Besse &
Co, Aden was a kind of paradise and most recall their days there with great affection
and nostalgia. ‘we felt it was heaven,’s said Himatbhai Jagani, a former Besse
employee who had been born in Aden, the fifth generation of his family to live there
since their original migration from Gujarat early in the 19th century ‘It was tax free
virtually, and we never saw an electricity bill or rent bill till we left. For 14 of us in
our mess we paid only 400 shillings a month for food. We could save about half our
salary. It was very comfortable-we all missed that life.’ Home leave of three months
came after 21 months straight work in Aden or at one of the Besse outposts around
the Red Sea. The Besse employees went home with their savings to spend by P & 0
liners like the Chusan or Caledonian, sometimes by Flotte Lauro of Italy, and if
nothing else, India’s Moghul Lines.
While most of the British residents lived on the slopes above Steamer Point,
socialising at the Gold Mohar beach club nearby, the 15000 Indians clustered in a
few streets of the Crater district-Sabeel Street named after a refuge for stray and
injured animals set up by rains and Hindus, Danaraja Street, and Bencem Street,
named for the prosperous Jewish trading community that once thrived in Aden and
Yemen. The Besse & Co bachelor’s mess occupied four or five buildings nearby in
Aidroos Valley. The Crater had all the features of the Orientalist watercolours that
adorned European drawing rooms at the turn of the century, as described by
Governor Johnston:
Indian merchant families, the women in saris, the men in their white jodhpurish getup, are taking the air, immaculate after the siesta. We drive around a market square
with fruit glowing on the stalls, and enter a narrow street fairly buzzing with exotic
life-pastry cooks, water-sellers, coffee makers, carpet merchants, all the usual
figures of the Oriental bazaar-and pervading the whole thing a strong hot smell Of
Spice.
The various expatriate communities lived in their own social circles, where, in the
way of ‘hardship posts’, attachments were strong and recalled with nostalgia in later
life. The Hindus from India were probably liked the least by the local Arabs-to whom
Muslims from India and Pakistan complained about India’s incorporation of Kashmir
and Hyderabad, but filled a need for white-collar staff that Aden’s schools could not
meet, and had their own social circle too.
While his brother Ramnikbhai worked in the automotive division, Dhirubhai was
assigned to the Shell products division of Besse. As a newly arrived youngster he
created an early splash, literally, by taking a bet while out helping bunker a ship in
the harbour that he could not dive off and swim to shore. The prize was an ‘icecream party’s which he won, by swimming through waters that had seen occasional
shark attacks on swimmers outside the nets of its beaches.

As he developed more familiarity with the trade, Dhirubhai was sent to market Shell
and Burmah lubricants around the Besse network, visiting traders in French
Somaliland, Berbera, Hargeysa, Assem, Asmara (Eritrea), Mogadishu (Italian
Somaliland), and Ethiopia. Some places were not accessible to steamers, so the
Besse salesmen would travel by dhow, the traditional wooden sailing vessels of
Arabian waters. Lodgings would be extremely rough, and the food difficult for the
vegetarian Gujaratis.
Dhirubhai was outgoing, robust, and helpful to newcomers. He was physically strong
and proud of his physique. The other young men tended to be bashful about
nakedness in their shared bathrooms, and a common prank was to whip away the
towels they wrapped around their waists while crossing the living space in the mess.
Dhirubhai would walk around without hiding behind towels. His solid footsteps could
be heard from a distance, and his colleagues soon started calling him ‘ama’s after a
famous Indian pehelwan (wrestling champion) of the time. Navin Thakkar, a former
colleague at Besse, remembers that Dhirubhai taught him to swim by simply
throwing him into the sea, at the swimming place down near the Aden dockyard
where they used to go on Saturdays and Sundays.
Dhirubhai delighted in stirring up pandemonium. Old colleagues describe it as bichu
chordoa or ‘letting loose a scorpion’. Despite his affability, some of his old colleagues
describe Dhirubhai as a ‘dark character’s not just because of the darkish skin he
inherited from his father-but for the ambition and risk-taking he hardly concealed.
‘Ramnik was more or less a saintly man,’s said one ex-Besse colleague who later
went to work for Dhirubhai. ‘Dhirubhai was a daring one. He was already advising me
to go for business and not to remain in service.’ career with Besse was progressing
steadily, and the Shell Division was one of the most rapidly expanding areas of
company business. By 1956, when the Suez War broke out after Egypt’s President
Nasser nationalised the Suez Canal; Dhirubhai was managing the Shell refuelling
operation at the Aden military base. He was also able to observe construction of the
BP oil refinery in Aden, gaining an early insight into the production linkages of the
petroleum industry.
In March 1954, Dhirubhai married at the age of 22, in a match arranged by his
mother (his father had died in 1951) but which Dhirubhai himself had supervised. His
partner was Kokila Patel, the daughter of a postmaster in Jamnagar, the port on the
western side of Kathiawar. Her family was not particularly wealthy, so it was not a
financially advantageous match for Dhirubhai. But Kokilaben was also a Modh Bania,
as the strict caste endogamy of the time demanded and her character complemented
that of Dhirubhai, a solid home anchor very much, grounded in traditional values and
religious piety.
Although he was doing well, Dhirubhai was far from happy with his position as an
employee. ‘I saw in him he was somebody that was different than others,’s recalls M.
N. Sanghvi, who worked alongside Dhirubhai in the Shell division and later went to
work for him back in India. ‘I could see he wanted to make something of himself.’
His room-mate Susheel Kothari also remembers the ambition. ‘Right from the
beginning he was determined to do something big,’s Kothari said. ‘He was never
comfortable in service. He was a born businessman.’s After office hours, which
finished at 4.30 in the afternoon, Dhirubhai would invariably head for the Aden souk.
Initially he just watched the Arab, Indian and Jewish traders in action. Later he
began taking positions in all kinds of commodities, particularly rice and sugar, in

gambles against rises and falls in prices at time of delivery Doing business on one’s
own account was strictly forbidden to Besse employees by the terms of their
contract, and his older brother Ramnikbhai disapproved, so Dhirubhai would simply
say he was ‘studying the market’.
Dhirubhai made some profits, and learned the fundamentals of business and money.
But he also made some near disastrous mistakes, which almost wiped out his capital.
On one occasion he suffered a tight financial squeeze when an incoming cargo of
sugar was damaged by sea-water and his customer refused to accept delivery
Pending settlement of his insurance claim, Dhirubhai had to pass the hat among
Besse colleagues for loans to bail himself out.
One particular ally was a Besse employee named Jamnadas Sakerchand Depala, a
relative by marriage, who lent Dhirubhai 5000 shillings on this occasion. Depala was
close to Dhirubhai and the two usually had lunch together, even after Dhirubhai had
married. It was an odd relationship, another attraction of opposites. Depala was not
a worldly man and lent money again to Dhirubhai for his ‘market studies’, but had a
strong influence nonetheless. Jamnadas was morally in control of Dhirubhai,’s said
Susheel Kothari, who had been in the same bachelors mess with Dhirubhai. ‘If
Dhirubhai was drinking too much, no one else could stop him. He just swear at them.
Kokilaben used to call Jamnadas and Dhirubhai would listen to him.’s According to
one version of events, Jamnadas made considerable sacrifices for Dhirubhai. On one
occasion, so this story goes, Jamnadas and Dhirubhai were reported to Besse
management for their private deals, and got suspended from service. Jamnadas took
responsibility and resigned from service, allowing Dhirubhai to complete the seven
year’s service that earned him the right of residence in Aden.
Another story told by ex-Besse staff is that, after leaving the company, Jamnadas
continued to invest in rice and sugar deals masterminded by Dhirubhai, and lost
heavily, to the point of losing most of his capital. Jagani remembers Jamnadas being
very depressed around 1961. Whatever the truth of this, Dhirubhai continued to act
as though he was in debt to Jamnadas. Some years later, Jamnadas came back to
India and was given a shop selling textiles for Dhirubhai. After a while Jamnadas
stopped coming to work, but Dhirubhai saw that his salary was paid until his death in
1987.Dhirubhai left Aden in 1958, with his seven years service and right of residency
as a fallback, to try his hand in business back in India.
The house of Besse lasted only another nine years, as long as British rule in Aden,
which was being eroded by the sandblast of pan-Arabic nationalism. Some of the
transistor radios sold at Steamer Point found their way to the villagers of the Yemen
hinterland, who picked up President Nasser’s message of Arab nationalism through
Radio Cairo.
Resulting hit-and-run attacks by rival liberation fronts made Aden unsafe for
foreigners. In the second half of 1967, British forces pulled back into an evertightening perimeter until the rearguard was lifted out by helicopter to a naval task
force offshore on 29 November 1967.
The territory fell unconditionally to the National Liberation Front. It applied its harsh
version of Marxism-Leninism, abolishing private property and nationalising most
foreign companies. By then the closure of the Suez Canal in the 1967 Arab-Israel
war had cut Aden’s bunkering business. Racked by periodic coup attempts and wars
with northern Yemen, the new state of South Yemen became an economic back-

water and haven for international terrorists-a modern version of the pirates’ lair the
British first subdued. Besse &- Co was among the companies appropriated by the
new regime. From retirement in France, former director Peter Besse wrote in 1996
that the last trading empire ...of my father collapsed on the arrival of various “People
Democratic Republic” governments. Today nothing is left.

CATCHING LIVE SERPENTS
At the end of 1958, Dhirubhai returned to India with his wife Kokilaben and first
child, a son named Mukesh. They were expecting their second child (another son,
Anil, born in June 1959, to be followed by daughters Dipti, born in January 1961, and
Nina, born in July 1962). From all his years with Besse & Co and all his evenings
studying the market, he had accumulated savings of just 29000 East African
shillings-then worth about US$3000 which, as his Besse colleague Susheel Kothari
had reminded him, would be just ‘chutney’s back in his homeland.
Dhirubhai was determined to go into business on his own account. At first he looked
at Rajkot, the port city in his native Saurashtra facing the Rann of Kutch.
Krishnakant Vakharia, who was then practising law in Rajkot, remembers that
Dhirubhai came to visit. ‘He was toying with the idea of a dealership in automobile
spare parts there,’ Vakharia said. ‘I had a friend who was doing just that, and who
was not doing very well. So I advised Dhirubhai that he should not go into this
business, and instead of Rajkot he should go to Bombay.’ At request, Vakharia
accompanied him down to Chorwad and stayed there a few days while Dhirubhai
sounded out friends and acquaintances about ideas and help. He found support in
the family of Chambakial Damani, a second cousin (Dhirubhai’s grandfather and
Damani’s grandmother were brother and sister) who had been working in Aden for
family companies at about the same time that Dhirubhai was there. One business,
Madhavas Manikchand, had imported textiles and yarns from India, ran a transit
business into Ethiopia, and held the agency for Bridgestone Tyres. The other,
Anderjee Manekchand & Co, had imported textiles from India and Japan. When
necessary, Dhirubhai had used the names of these firms during his own after-hours
trading.
Damani’s father, Madhaylal Manikehand, had closed his businesses in Aden and
Ethiopia on retiring in 1957, and decided to put Rupees (Rs) 100 000 into a trading
business for his son and Dhirubhai in Bombay. Vakharia saw the agreement
concluded in his presence, and returned to Rajkot. Dhirubhai and Chambaklal called
their new business Reliance Commercial Corp. The first office was a room of about
350 square feet in Narsinathan Street, in the crowded Masjid Bandar district of
Bombay. It had a telephone, one table and three chairs. If the two partners and their
initial two employees were all present, someone had to stand.
At first, the business traded spices back to the partners’ contacts in the souk of
Aden-betel nut and curry ingredients- and shipped some cotton, nylon and viscose
textiles to Ethiopia, Somalia and Kenya. But local contacts led them quickly into the
frenetic and potentially profitable business of trading synthetic yarns - one of more
than 60 commodity markets serving all of India that were located in Bombay, nearly
all of them run by Gujaratis. The Rajkot lawyer Vakharia had introduced Dhirubhai to
a fellow activist in the Socialist Party, a successful yarn trader called Mathura Das
Mehta. And Dhirubhai’s talented nephew Rasikbhai Meswani (the son of Dhirubhai’s
older sister), had begun trading in yarns a couple of years earlier.
At the tiny Masjid Bandar office, Dhirubhai began to assemble a team that stayed
with him for decades as Reliance grew. They included Meswani, older brother
Ramnikbhai who had also returned from Aden, younger brother Nathwarlal
(Nathubhai) on completing his education, and two former schoolmates from

Junagadh named Rathibhai Muchhala and Narottambhai Doshi. Dhirubhai also
enlisted the services of old acquaintances from Aden, including Liladhar Gokaldas
Sheth, who had been a dealer in textiles, coffee and foreign exchange in Yemen,
Burma and Aden (suffering several bankruptcies along the way) before settling back
as a foreign exchange dealer in Bombay in the 1950s.
Dhirubhai quickly became a familiar figure around the streets of Pydhonie, the
synthetic yarn trading district of Bombay where Gujarati merchants then did their
business sitting on spotless white canvas gaddi floor-coverings, entering trades in
compendious ledgers, and consuming endless cups of tea thick with sugar, spices
and hot milk. From late morning until about 4 pm, Pydhonie was busy with trading
as dealers made forward trades, trying to guess the future price of yarn of this or
that micron size.
If cotton and silk had been the materials of India’s textile industry right from the old
handloom days to the industrial looms of the early 20th century, by the 1950s the
industry and its consumers were hungry for the artificial threads created by modern
chemical science. Nylon, viscose and polyester were cheap, hardwearing, quickdrying and crease proof, and could imitate both cotton and silk.
The problem for yarn dealers at Pydhonie was not usually to find buyers but to
secure supplies. The tightening of industrial controls and import quotas since
Independence had choked supply of these luxuries as the economic Brahmins of New
Delhi channeled national resources towards new complexes making capital goods
such as power stations and steel mills-what Prime Minister Jawaharlal Nehru called
the ‘Temples of modern industry’.
India had one viscose factory owned by the Birlas, and one government owned nylon
plant. The first polyester fibre plant did not open until the 1970s. These domestic
factories supplied only a small fraction of local demand from textile weavers.
Smugglers supplied some of the demand, bringing in yarn by either misdeclaring
cargoes at regular ports or simply running small ships to the numerous creeks and
beaches of India’s west coast. Made-up textiles were also smuggled as well, via
Dubai or Singapore. Indian visitors to Japan’s artificial textile industries, then in their
great postwar expansion phase, recall seeing vast production of sari-length material,
for which officially there was no open market in the subcontinent at all.
The other source came from the strictly controlled import licences given to registered
exporters of textiles, allowing import of raw materials worth a certain percentage of
their export earnings. Like many others, Dhirubhai realised that these import or
replenishment licences (known as REPS) were as good as money, even though some
of them were officially not transferable and imports had to be made by the actual
user’s of the materials. By paying higher margins than any other traders, Dhirubhai
soon became the main player in the market for REP licences. The margins were tiny
in the trade itself - but his dominance also put him in the position of being able to
turn on and off much of the supply of yarn into the Indian market.
Suresh Kothary, whose family business was importing agent for Du Pont products
including textile fibres, chemicals and dyes from 1958 to 1993, and also active in
yarn trading, remembers first meeting Dhirubhai in 1964 at the Masjid Bandar office.
Dhirubhai would often drop by at Kothary’s shopfront at Pydhonie thereafter,
lounging on the white cotton mattress and drinking tea or coffee. They were in effect
rivals, as Dhirubhai mostly imported his yarns from Asahi Chemicals in Japan or Ital

Viscosa via a long resident Italian businessman in Bombay, a Dr Rossi, while Kothary
handled only the Du Pont product from the United States and elsewhere. Dhirubhai
was a sporting rival, Kothary said: ‘He would always say: “This is what I’m going to
do, boy!” Whenever he fights an enemy he goes in the open.’ Not everyone in the
Bombay textile trade would agree.
Kothary and many others in the Pydhonie market remember intervention in a market
crisis in the mid-1960s when spiralling textile prices led government authorities to
crack down on speculation in the yarn market by banning forward trading, and then
arresting traders found to be continuing the practice. Consumers must have
complained to the government about fluctuations in prices-some people, about a
dozen, were arrested in the market,’ Kothary said.
The trading community was despondent as their colleagues languished all day in the
cells of the Picket Road Police Station. Approaches to officials by the Bombay Yarn
Markets and Exchange Association got nowhere. Then, late in the evening, Dhirubhai
arrived like a storm at the police station, shouting greetings to the senior officers,
and handing out snacks to everyone. Within an hour, all the arrested traders had
been released, and the complaints against them shelved. Kothary can only guess at
intervention. ‘The usual-India!’ he said.
Dhirubhai also emerged as saviour of the market when an even greater supply crisis
occurred in 1967, Kothary recalled. On a report that actual user import licences had
been traded and misused, the Customs authorities in Bombay under the then
Assistant Collector, a Mr. Ramchandani, impounded all incoming cargoes of artificial
fibres. The government insisted that whoever imported the yarn had to be the
manufacturer who wove it into cloth.
According to Kothary, about 40 million rupees (then about US$5.3 million) worth of
yarn was seized. Many traders then defaulted on loans taken out to cover the
imports. The entire artificial textile market was paralysed. ‘It could have made us all
insolvent,’ Kothary said. ‘This is when I came very closely in touch with Dhirubhai. It
was he who saved us all. We fought for about six months. I used to go with him to
lawyers day in and day out. We went to Delhi to see Morarji Desai [then finance
minister]. That was the time I could see he was a wizard. He used all the ways and
means.’ The crisis ended as quickly as it started, ostensibly after a one-day hearing
of the importers’ appeal in the Customs, Excise and Gold Appellate Tribunal under
Justice Oberoi, who found for the appeal. Kothary indicates that an agreement
engineered by Dhirubhai was behind the judicial settlement. The details are not
revealed, but presumably come under the category of ‘That India!’ also.
On their move to Bombay, Dhirubhai and his young family had moved into an
apartment on the 3rd floor of the Jai Hind Society building in Bhuleshwar, a very
crowded district of shops, markets and residential tenements in the central part of
the city. The building is what is known as a chawl in Bombay: numerous small
apartments, often just single rooms, opening on to open galleries around a central
courtyard which is set back from the street behind commercial premises. Quite often
the toilets and washing facilities are shared at ground level.
Later accounts of Dhirubhai’s early career often paint this home as Dickensian in the
extreme. The fat, since bought by a later tenant, had two small bedrooms, a living
room, kitchen and internal bathroom in 1995. Vakharia, who used to visit the
Ambanis for a holiday each Christmas from 1959 to the late 1960s, remembers it

being ‘suite luxurious’ compared to the single rooms many Gujarati families had to
occupy in Bombay at that time.
Even so, Dhirubhai and his young family, eventually two boys and two girls, lived
austerely in surroundings that were crowded, noisy and dirty. The two sons, Mukesh
and Anil, who took over day-to-day management of Reliance in the late 1980s, may
have had engineering degrees and MBAs from American universities, but their lean
early years gave them a hungry ambition unusual in the second generation of a
successful Indian business family.
As his confidence grew in his Bombay success, Dhirubhai developed his taste for
‘letting loose a scorpion’s through practical jokes and whimsy. Vakharia recalls that
when he visited Bombay with his new wife for the first time in 1959, he and
Dhirubhai were invited home by their senior mentor Mathura Das Mehta. Mehta’s
wife served the young men mango juice, and kept insisting on refilling their glasses.
Dhirubhai whispered:
“Let’s do some mischief,” Vakharia said. The two asked for a fourth glass, and kept
then accepting more. After more than a dozen glasses each, the Mehta kitchen ran
out of mangoes and a servant had to be sent to the market to buy more, which were
all duly consumed. The Mehtas continued to be friends, ‘But they never invited us
back for any lunch or dinner at their house’, Vakharia said.
Each year, Dhirubhai would make it a point to play an April Fool’s joke upon an
elderly employee named Ghulabchand, an old associate from Aden. For all his
experience, Ghulabchand never failed to fall for it. On one occasion, Dhirubhai
announced that everyone was invited to dinner across town at an address at Mafatlal
Bath. Ghulabe hand was sent in a taxi with Vakharia and another member of the
office, Ramanbhal. At Marine Drive they stopped outside a building, and Patel went in
to look for a fourth member of the group. After 15 minutes waiting, Vakharia also
went in. Ghulabchand eventually gave them all up and took the taxi to Mafatlal Bath,
where he found no one. On returning home, he found Dhirubhai and the others
eating a dinner they had notified Ghulabchand’s wife to prepare.
Vakharia recalls another prank in 1965. The India-Pakistan War was on, and a
blackout had been imposed on Bombay for fear of naval and air attacks by Pakistan.
About 10 pm, Dhirubhai said: “Let’s go out and take a round of the city.” The two
drove around the dark Bombay, with Dhirubhai bluffing police at roadblocks that he
was on official business and handing out small tips of ten rupees or so. ‘He got
saluted all the way,’ said Vakharia. ‘In the way back we saw some lights in the
Japanese consulate, so Dhirubhai went in and told them to close the lights.’ On yet
another occasion, around 11 pm on a cold winter night, Dhirubhai announced an
immediate picnic. The cook was told to assemble supplies, and Vakharia and the
family piled into car. Another dozen friends were telephoned and told to rendezvous
in their cars. ‘We were not told where we were going,’ Vakharia said. ‘We ended up
at Rajeswari, about 50 or 60 kilometers from Bombay at about 3 am. The cold was
very severe and we went to a dharamsala [pilgrim’s lodging] at a hot springs resort.
It was meant only for sadhus [ascetic Hindu holy men]. Dhirubhai said we would all
sleep there. After half an hour we were still shivering and Dhirubhai got up and lit a
camp fire. When the sun came up we had tea, and a bath in the hot springs, and
cooked kedgeree on the camp fire. We told jokes and sang songs, and didn’t get
back home until late in the afternoon.’ Fast pace caused a rift with his partner
Chambaklal Damani in 1965. According to Vakharia, Damani preferred to trade with

great caution, leading to constant tension with Dhirubhai who was a risk-taker. The
final rupture came after one clash when, at Dhirubhai’s urging, Reliance built up a
large holding of yarn in the expectation of a price rise. Damani pressured Dhirubhai
to cut back their exposure. So Dhirubhai sold the yarn stockpile-to himself, in secret.
Two or three weeks later the price of yarn shot up and Dhirubhai made a killing.
‘Later Dhirubhai told Chambaklal: “I am prepared to share profit with you,” Vakharia
said. “But in future if you do not know the business, do not intervene.” Many others
among Dhirubhai’s ex-colleagues and trade associates also believe the partners were
incompatible.
‘He takes so much risk that people fear something will go wrong,’ said Vradial
Depala, who knew Dhirubhai in Aden. ‘But the risks are all calculated. They are not
blind risks.’ ‘You may be a co-passenger in a car with me, but if you don’t like my
driving you might be a little fearful,’ said Manubhai Kothary, a leading Bombay
textile exporter and long-time president of the Silk and Art Silk Mills Research
Association.
‘Someone advised partner that he had made sufficient money and now should come
out,’ said Susheel Kothari, the ex-colleague from Besse & Co who later worked for
Reliance. ‘s business is catching live serpents.’s Chambakial Damani himself will say
only that ‘he agreed to separate willingly’ or that ‘he just became separate as
friends’. But he agreed that the version given by Kothari and others about
differences over commercial risk were to some extent true’. Damani went into
trading in a new company, while Dhirubhai and his brothers paid some Rs 600,000 to
buy him out of Reliance. Soon after, Dhirubhai moved the office to bigger premises
in the more central Court House building at Dhobi Talao, named for the laundrymen
who originally worked in the area.
After ten years at Bhuleshwar, in 1968, Dhirubhai moved his home out of the chawl
to a more comfortable fat in Altamount Road, one of the city’s elite areas on a hill
overlooking the Arabian Sea. Fond of driving fast, Dhirubhai had first bought a Fiat
car, and then moved on to a Mercedes-Benz. Later, in the 1970s, he indulged a taste
for flashy automobiles by acquiring a Cadillac, one of the very few in the country
then or since.
Friends remember him as a dashing figure, the slightly dark skin inherited from his
father (the only such characteristic, some say) offset by a white safari suit, the hair
slicked back into a duck’s tail. For a while he put on weight, and then trimmed down
by taking vigorous dawn walks along the three-kilometre sweep of Bombay’s Marine
Drive, enlisting friends, colleagues and neighbours as companions.
Within a year of splitting with Damani, Dhirubhai took Reliance into textile
manufacturing for the first time. He decided to locate it in Gujarat rather than
Bombay, because of the cheaper land prices, and sent his older brother Ramnikbhai
to select a site. Ramnikbhai enlisted Vakharia, then starting to get known as a
lawyer in Ahmedabad, and the two drove around the state in a small Fiat.
They settled on a 10000 square metre plot, the last going in a new industrial estate
developed by the Gujarat state government at Naroda, on the fringes of Ahmedabad.
Vakharia had got a contact, state minister for industries Jaswant Mehta, to approve
the purchase, and by a further stroke of luck the farmers owning some 100 000
square metres of adjacent land were willing to sell. Dhirubhai had a simple factory
built, installed four knitting machines, and appointed his brother as plant manager.

Dhirubhai was again lucky in that, around this time, the British hold on Aden was
becoming more tenuous. Even ahead of the British withdrawal in 1967, foreign
nationals felt threatened by the insurgency mounted by the People’s Liberation Front.
Many of the Indians working for Besse & Co decided it was time to go home. So
Dhirubhai had a ready-made source of educated managers, accountants and
salesmen, drilled to European standards. The word went around that Dhirubhai
would find jobs for his old colleagues, and a dozen old hands from Besse & Co
accepted his offer. Most stayed for the rest of their working careers, with the last few
being retired from senior management positions in 1993 in a deliberate move by
Dhirubhai’s sons to rejuvenate the company’s leadership.
None of them knew very much about textile production, however, and it was a case
of learning by trial and error. ‘All of us were new,’s recalled M. N. Sangvi, who left
Aden in 1967 and immediately joined Reliance. ‘It was very small, only about 20
people in the whole factory, about five or six from Aden. Nobody was familiar with
textiles, and after 15 years in Aden I was not knowing anything about India either.
The first two years, 1966-67, was a very hard time. The product had to be
established. We worked from morning to late evening. Dhirubhai was very
encouraging, and we had a family atmosphere. The employer- employee relationship
was not there. He put a lot of trust in us’.
Susheel Kothari, who had returned from Aden in 1966, said that at one point in 1967
it appeared the mill would have to close down because Reliance could not sell the
cloth it was making. Dhirubhai told Kothari that if the factory had to shut down he
should do it gradually and see that no blame attached to his older brother
Ramnikbhai. But the Aden hands rallied. After putting in a full shift at the factory in
Naroda, from 7 am to 3 pm, they would spend the afternoons and evenings touring
markets around Ahmedabad trying to persuade shopkeepers to stock Reliance
fabrics. ‘We were determined we should not fail,’ Kothari said.
Dhirubhai worked everyone hard, often calling his managers in Naroda at 6 am from
Bombay before they started out to work. They were expected to solve problems on
their own initiative. Dhirubhai himself set the example. Suresh Kothary recalled one
incident when spare parts were urgently needed for imported machines at Naroda.
Dhirubhai had the parts flown in from Germany, and then discovered that no trucks
were available for the haul up to Ahmedabad. He bought two trucks, one to carry the
parts and one as a backup, and sent up the consignment. The trucks were then sold
in Ahmedabad.
But he was forgiving of honest mistakes, recalls Sangvi. In one case, Sangvi was
over trusting of some merchants who had placed an order from Patna, the capital
city of Bihar state across in eastern India. Sangvi sent the consignment by rail,
collectable on presentation of a payment receipt at a Patna bank branch. The
merchants forged the receipt and took delivery from the railway yard. Reliance lost
900000 rupees, a considerable sum at that stage, and it took months to recover it.
Sangvi said: ‘Dhirubhai just told me: “Nathu, nothing to worry in business, anything
can happen. I know you have done it to increase the sales. I am with you and you
just concentrate on the business.” Reflecting back on his career, as vice-president of
the Reliance textile division, Sangvi said: ‘I feel myself very fortunate that I have
been working under such a legendary figure.’ I, Patel, who had been recruited by his
relative Maganbhai Patel to Besse and Co in 1953, returned to India in 1965. Soon
after, Ramnikbhai Ambani, with whom he had worked in the Besse automotive
division, hired him for Naroda and put him in charge of the knitting machines. Patel

knew nothing about them, but was sent to West Germany and Japan later for formal
training. He stayed with Reliance until retirement in 1993. ‘The years passed before
we knew it, we were so busy,’ Patel recalled.
The result was steady growth in sales and profits for Reliance. In 1967, the first full
year of production at Naroda, the company recorded sales of Rs 9 million in 1967,
yielding a net profit of Rs 1.3 million. Dhirubhai and his family shareholders refused
to take dividends and kept ploughing earnings back into more machines. After a
decade of manufacturing, in 1977 Reliance had a turnover of Rs 680 million, and
profits of Rs 105 million.
In an extensive write-up on the company in August 1979, the Indian Textile Journal
reported on a massive factory at Naroda occupying 230 000 square metres and
employing 5000 staff. It had banks of machines for texturising or primping artificial
fibres to give particular sheens, machines for twisting the polyester and nylon fibres
into yarns, and machines for weaving the yarns into textiles. The yarns were sold to
other Indian textile manufacturers, or used in-house.
Most significantly perhaps, Dhirubhai established his own brand name, Vimal (named
after a son of his brother Ramnik), by dint of lavish advertising under the slogan
‘Only Vimal’. This somewhat snobbish slogan, and some well-publicised fashion
shows in top-class hotels, added a touch of class to a product that basically appealed
to the less wealthy market sectors. In addition, Dhirubhai had got around the
reluctance of established wholesalers and shopkeepers to accept a new brand by
creating his own network of shops. Across India, some 400 shops were franchised to
sell the Vimal brand of polyester materials for saris, shirts, suits and dresses.
In one of the first of many eulogies to appear in the Indian press, the Textile Journal
noted how Dhirubhai was held in high esteem by his staff, who attributed Vimal’s
success to his dynamic leadership. ‘Then the construction of the factory was going
on, it is reported, many snakes were seen in the area. According to a popular belief,
appearance of snakes is a good omen. Dame Luck certainly seems to have favoured
Mr. Ambani. Ever since the emergence of Vimal, he has developed the Midas touch.
Everything he touches becomes gold. Everything he starts blossoms into success.
Naturally, nothing succeeds like success.’

A FIRST-CLASS FOUNTAIN
Dhirubhai Ambani remained in Bombay because manufacturing was only one facet of
his business. For a decade, the textile plant at Naroda was supportive and subsidiary
to his yarn trading activities. In addition, he was steadily augmenting his skills at
breeding money from money, and at wielding political and bureaucratic influence on
government policies and their interpretation. Dhirubhai was never simply an
industrialist, a trader, a financial juggler or a political manipulator, but all four in
one.
From his earliest days in Junagadh, Dhirubhai had learned that relationships were
the key to unlocking help, and that the law could be argued with. ‘One thing I have
noted with Dhirubhai is that if he starts an acquaintance with someone he will
continue it,’ said Manubhai Kothary, the trade group Sasrnira’s president. ‘He never
throws away any relationship.’ He was endowed with a photographic memory for
faces and names, and any contact- however feeting - he could try to turn into a
common background on which some affection could be based. For example, Sir
Nicholas Fenn, who was British High Commissioner in New Delhi in the early 1990s,
was amazed to find Dhirubhai claiming him as an old friend from Aden. In the early
1950s, Fenn had been a Royal Air Force pilot flying transports through to the Far
East and Australia. Dhirubhai remembered him from refuelling stops at the Shell
facility at Aden’s airport.
philosophy was to cultivate everybody from the doorkeeper up. ‘I am willing to
salaam [bow down to] anyone,’ he told a magazine interviewer in 1985, in a
statement that shocked many readers for its bluntness. In the India of economic
plans and government control of the commanding heights’ that had developed by the
1960s, a lot of grovelling was required for businessmen to get the clearances they
needed. Inevitably, the bureaucratic signature needed to move a file from desk to
desk came to have a price on it as well. The Congress Party had degenerated from a
movement of freedom fighters into a dispenser of patronage, with ministers
allocating resources and licences while the bureaucracy worked out ways to make
the process look objective.
After getting on his feet back in Bombay, Dhirubhai used to make frequent trips to
New Delhi. He frequently went in the company of Murli Deora, a fellow yarn trader
who was then working his way up the Congress Party machine in Bombay. Deora
later became the head of the Bombay Municipal Corporation -the mayor- and then
for many years the representative for South Bombay, the area containing the
business district and elite apartments, in the Lok Sabha (the lower house of
parliament).
Dhirubhai and Deora used to catch an early fight up to Delhi, and park their bags
with a sympathetic clerk at the Ashoka Hotel while they did their rounds of politicians
and bureaucrats to speed up decisions on import licences. Too poor to afford an
overnight stay, they would collect their bags and fly back to Bombay the same
evening. Later, Dhirubhai could afford to keep a room ready at the Ashoka, a
government hotel built in a vaguely Moghul monumental style. His nephew Rasik
Meswani also came into the lobbying activity, and eventually selected a canny South
Indian, V Balusubramaniam, as full-time lobbyist for Reliance in New Delhi. For the
lesser bureaucrats, journalists and others who helped promote the company’s

interest in various ways, Dhirubhai’s standard gratuity was a suit or sari length of
material made by his factory Gradually Dhirubhai also learned the channels for largescale political donations in the top echelons.
In 1966, Indira Gandhi had become prime minister following the sudden death in
Tashkent of Lal Bahadur Shastri, who had been India’s leader since the death of her
father Jawaharlal Nehru in 1964. With her only ministerial experience the
Information portfolio under Shastri, but a lifetime of watching her father and her late
husband Firoze Gandhi in politics, Indira was well versed in Congress Party
machinations but had a shallow grasp of policies. Power steadily exacerbated a deep
psychological insecurity and a melancholic nature that led her to place inordinate
trust on unworthy people in her inner circle, as well as on her headstrong son
Sanjay, who was extorting funding for his pet scheme of developing an indigenous
‘people’s car’s .
Among the sweeping economic changes of 1969 was one small legislative
amendment that had the effect of entrenching corruption, though its ostensible
intention had been the opposite. Until then, a section of the Companies Act allowed
directors to make political contributions to any party. This was repealed in 1969. As
on of the officials who supervised the amendment later admitted, this led to political
payments by black money. Companies had to generate black funds by under/over
invoicing, fictitious sales etc. A pattern of wholesale corruption and large-scale
corporate malpractices, through double-accounting, over- invoicing and underinvoicing, came into being, creating massive unaccounted-for and therefore untaxed
funds.” One of the conduits to Indira Gandhi was a private secretary named Yashpal
Kapur, a Hindu the Western Punjab in the 1947 Partition who displayed all the
financially grasping tendencies this community brought across to Delhi. In all these
Years, her memoir of the Nehru and Indira Gandhi years, the well-connected
magazine publisher Raj Thapar recalls Kapur thus: “ one glance at him and you felt
the grease all over you. He was smooth and unintelligent, outwardly vacuous and
inwardly scheming who then only performed what we called the chai-pani [teamaking] jobs, or so we thought in our innocence.’ By 1971, Thapar noted how
Kapur’s role had taken on a weird shape. Yashpal Kapur, that oily cupbearer, was
growing in stature by the minute and his corruption was becoming legend and his
ability to get Indira to sign on the dotted line became the bazaar gossip,’ she wrote.
Thapar’s bureaucrat husband Romesh, who early had been a trusted confidant of
Indira, felt duty-bound to tell Indira. ‘e sought an appointment, went to the office,
gave her a run-down of what the average person was thinking, of how the PM’s office
now harboured a nest of corrupt people led by the favoured Yashpal. She was
furious. “You know I would never touch a penny.” “Maybe, but you are seen as the
queen bee. The others do the collecting.” Thapar went on:“…in unending string of
stories were current about Yashpal’s power, how he was sought by the high and
mighty, how he was well in with Sanjay who was beginning, bit by nibbling bit, to
tamper with the administration in his favour. Yashpal was of course no longer in the
PM’s office. His place had been taken by his nephew, R. K. Dhawan, who was rapidly
to assume much vaster powers than his erstwhile uncle and together they were to
manipulate patronage in this vast country.” Dhirubhai not only cultivated Yashpal
Kapur, says one old acquaintance, ‘e practically purchased him’. In due course, the
relationship passed on to R. K. Dhawan, who moved eventually from the prime
minister’s office under Indira and then Rajiv Gandhi into parliament and ministerial
portfolios himself. Over the years, Dhirubhai developed close ties with politicians in
many parties. These included figures such as Atal Bihari Vajpayee, senior leader of
the Hindu-nationalist Bharatiya Janata Party who became prime minister of a brief

minority government in 1996, and several on the left such as Chandrashekhar,
another short-term prime minister in 1990-91. But his strongest connections were
always with the Gandhi coterie’s within Congress, even though he never liked
Indira’s socialistic policy phase in 1969-70, and then later with P V Narasimha Rao
who took over the Congress mainstream and prime ministership in 1991.
The links were not always based on money, however. Dhirubhai is widely
acknowledged to be a masterful exponent of his own business visions, which have
generally been more farsighted than those of almost anyone else among India’s
business leaders. He was quick to grasp that many Indian politicians, officials and
bankers could be captivated by intellectual excitement or flattery at being in the
inner circle of such an emerging tycoon. Should such individuals’ later show signs of
self-interest or personal financial difficulty, Dhirubhai or one of his lieutenants would
pick up the signals. A post-retirement job, a business opportunity for a child, indirect
funding or a burst of inspired publicity might then follow for the person concerned.
Dhirubhai also played on the perception that he was an outsider and ‘upstart’ who
deserved help to break through the glass ceilings of vested interest and privilege in
the business community. That there was an inner circle in the ‘licence Raj’ the
allocation by New Delhi of licences to set up factories and expand production
capacity-was evidenced in 1967 with a report by a Bombay University economist, R.
K. Hazare, to the Planning Commission which revealed that the Birla group of
companies had received 20 per cent of the licensed industrial investment approved
by the government between 1957 and 1966. The early support given by Ghansyam
Das Birla to Mahatma Gandhi had certainly paid off in the independent India ruled by
Congress. Writing in 1981 on Birla’s 88th birthday, the journalist T N. Ninan noted
that the Birla companies had multiplied from 20 in 1945 to about 150. ‘f any
industrial house benefited from the licence-permit raj,’ wrote Ninan, ‘It was the
house that Birla built.’ Birla’s rapid expansion contrasted with the moderate growth
of the Tata group, the Parsi-controlled empire that had grown strongly under British
rule. The then head of Tata, J. R. D. Tata, told an interviewer: ‘I think it wrong for a
businessman to run newspapers [the Birlas had set up The Hindustan Times, the
strongest paper in New Delhi], wrong for him to play a political role ... But it does
seem that others who do not mind mixing politics with business have done extremely
well for themselves.’ For G. D. Birla, his political connections and the ostentatious
philanthropy that saw various Birla institutes and garish Hindu temples built around
India were all supportive of his preordained role. As the Bhagavad Gita says, every
man must do his duty, which means if you are a wealthy man, you must do your
duty by your wealth,’ the Birla patriarch reasoned. A businessman’s karma [fate] is
to amass wealth and his dharma [duty] is to provide for the general welfare. If
political action is involved in this, I don’t see why I should feel shy of it.’
One of earliest backers, the banker and politician T A. Pay, falls into the category of
intellectual sympathizer. Pai came from an extraordinary upper-caste family based in
the tiny village of Manipal on the Karnataka coast, far south of Bombay. It is still an
out-of-the-way place, on a barren hilltop overlooking the sweep of palm trees and
exposed beaches fronting the Arabian Sea. In 1925 the Pai family had established
the Syndicate Bank there. By the mid-1960s it was the tenth largest Indian bank,
with some 190 branches. As well as bankers, the Pai’s were educationists and used
their wealth to found a college at Manipal in 1942. It has since grown into one of
India’s largest private universities, attracting fee-paying students from Malaysia, the
Middle East and the West Indies.

The Pai’s prided themselves on being discoverers and nurturers of talent. A small
museum at Manipal is devoted to the family patriarch T. M. A. Pai (older brother of T
A. Pai) and his teachings. One cherished precept: ’A pygmy nourished well can
become a giant.’
According to K. K. Pai, a family member who eventually became general manager of
the Syndicate Bank. Dhirubhai was introduced to TA. Pai in the mid- 1960s by a
former bank employee named H. P Rao, who was an insurance agent. The bank was
interested in developing its foreign exchange activities, and began handling some
transactions for the young spice and textile trader. ‘Our first impression was that he
was very enthusiastic, very enterprising, a man of ideas,’s Pai said. ‘From the
beginning I had the impression he was a go-getter. He was very persuasive, very
convincing in his arguments. He was able to present his case and business proposals
very clearly. He gave me the impression he was reliable and knew what he was
doing.’s
The Syndicate Bank became the main financier for Reliance Textile
Industries when it started manufacturing soon after, in 1966, providing much of the
Rs 1,5 million needed to buy the first four knitting machines. Another early backer
was the Industrial Credit and Investment Corporation of India (ICICI), whose
chairman Harkisan Das Parekh, another Gujarati, also took a shine to Dhirubhai’s big
schemes.
Dhirubhai continued to impress the Pais by his insistence on the best equipment and
personnel, as well as his knowledge of the market and its trends. He also made
conspicuous donations to the educational institutes run by the family. Throughout
the late 1960s, Dhirubhai kept in close touch with T A. Pai, making sure he was
among the first to call whenever the bank chief visited Bombay from Manipal, and to
give Pai advance notice of ‘any major initiatives. Pai’s nephew Ramdas Pai, who later
became president of the Manipal Academy of Higher Education hears Dhirubhai
coming to Bombay airport in 1968 to greet him on his first trip back from studies in
the United States. T A. Pai in turn promoted Reliance where he could, even to the
point of carrying around samples of its Vimal-brand material in his brief- case to
show others.
The bank continued to be the major lending institution for Reliance even after Indira
Gandhi nationalised it and all India other leading banks and insurance firms in July
1969. Although the Pais were unhappy about losing their asset, family members like
K. K. Pai continued to hold the top executive positions for many years. T A. Pai’s
policies of directing credit to small entrepreneurs, agriculturalists and business new
corners which built up a portfolio of very small but sound loans for the bank-were
exactly what Indira had hoped to achieve by the bank nationalisation generally.
Ironically, the government takeover led to the steady bureaucratisation of
management and lending directed by political connections rather than commercial
viability.
This destroyed the soundness of the Syndicate Bank and all the other 20 nationalised
banks. By the end of the 1980s, the banks’ nonperforming assets or bad loans
greatly exceeded their capital base by a wide margin, and but for endless capital
infusions by the treasury almost all would have become insolvent. When private
sector banking was again encouraged, after the 1991 liberalising reforms, the Pai
family took over a small southern-based institution, the Lord Krishna Bank. If offered
the chance to buy back the Syndicate Bank, family members said, they would refuse
it. Immediately after his bank was taken away, Indira consoled T A. Pai by drafting
him to apply his ideas as the first chairman of the nationalised Life Insurance

Corporation of India. Soon afterwards, he was inducted as a Congress member of the
upper house of parliament (the Rajya Sabha or State’s House) to enable him to
become her government’s minister of commerce, handling trade matters. Later in
the 1970s, Pai became minister for industries, which gave him a decisive role in the
allocation of industrial licences. He continued as minister during the suspension of
democracy under Indira’s declaration of Emergency between 1975 and early 1977.
Pai died in 1981, having realised at the end-his relatives say-that his talents had
been misused as a respectable cover by the corrupt circle around Indira and Sanjay.
‘The enterprise of adventurers always sucks in plain, decent men,’s commented the
editor of the Indian Express, Arun Shourie, not long after his death. ‘The number of
times men like C. Subramaniam [another of Indira’s ministers] and the late T A. Pai
lied on Maruti [Sanjay’s car project] far exceeded whatever Mrs. Gandhi said about it
...’s Dhirubhai, Pai’s elevation meant that, as well as still having friends in a major
bank, he now had a friend in a key position to approve import schemes and
manufacturing plans.
In the early 1970s, the immediate pay-off was favourable changes in the importexport regime. Dhirubhai was not a law- breaker but had a creative attitude towards
regulation. As one former colleague recalled: ‘he would say: “You should not do
anything illegal. First of all, the law should be changed.” ‘He would not go into
anything which was unlawful,’ agreed Sasmira Kothary everything he did was
permitted to do by any other man. But his reading of the system! You have a law,
the interpretation which you make - he would take advantage of a particular system
in a way which others could not see. By the time other people started anything the
government was also waking up and the system would be changed.’ The key to
profits in the Indian synthetic textile business through the 1970s was access to
supplies of the basic filaments and yarns. Influenced by Mahatma Gandhi’s notions of
self-reliance and the virtues of home-spun cotton, and by a strong lobby of cotton
growers, New Delhi had discouraged use of synthetics, regarding them as a rich
man’s textile.
India already had a few factories making rayon (derived from cellulose material,
usually wood, pulp) which had been developed in France in 1891, and the more
modern artificial fibres derived from coal and petroleum including nylon (developed
by Du Pont in 1935) and polyester (first produced in Britain in 1941 and later
marketed under proprietary names like Dacron, Fortrel and Terylene).
But these domestic sources met only a fraction of the demand, particularly for
polyester, as Indians began to appreciate its durability, lustre (in some forms),
colour - fastness, and case of washing. As well as in pure polyester fabrics, the fibre
was in demand for blending with cotton at both the large industrial mills and the
widely dispersed power-loom workshops.
Former colleagues say Dhirubhai resisted any temptation to smuggle in supplies.
‘Everyone knew smuggling was there, but Dhirubhai would not want to get involved,’
one former Reliance manager said. ‘Government support meant too much to him. We
used to buy yarn that was obviously smuggled because it was cheap. But we were
told this should be kept separate. By the time it reached the manufacturers it would
have gone through many hands. But people knew this was smuggled goods.’
Instead, over the 1960s Dhirubhai had steadily become master of the trade in
replenishment licences, which were entitlements to import yarn earned by exporters
of finished textiles and garments. After the war with China in 1962 and another with

Pakistan in 1965, India’s external balances were under strain and the government
was ready to entertain more contrived schemes to boost export earnings.
coup was to persuade Pai in 1971 to authorise imports of polyester filament yarn
(PFY) against exports of nylon fabric. Previously, nylon fabric exporters had earned
some rights to replenish their stocks of nylon fibres through imports. Dhirubhai
argued that if he could sell nylon or other manufactured textiles (known as ‘art silks’
at Rs 4.25 a yard, more than double the price stipulated in the old scheme, the
exporter should be rewarded by permission to import PFY, which was in greater
domestic shortage because local production was far below demand.
This resulted in what was called the Higher Unit Value Scheme, which made
Dhirubhai a fortune while it lasted. At that time, the domestic price of PFY was seven
or more times higher than the prevailing international price. Even if the nylon or
polyester exports fetched only a quarter or one third of cost, this was more than
offset by the 600 per cent or more profit on the PFY imports.
Reliance went into a high-profile export drive, targeting some of the weaker
economies of the world. Poland was one focus, with fashion shows mounted in
Warsaw and delegations of Polish trade officials lavishly hosted by Dhirubhai in
Bombay. Another was Saudi Arabia, where Dhirubhai had another old Aden colleague
from Besse & Co’s Halal Shipping division, Bharat Kumar Shah, then working as a
trader in Jeddah and acting as Reliance’s Mid-East Co-ordination manager’. Dhirubhai
would take out full-page advertisements in The Times of India to announce special
charter fights taking his export products to foreign markets.
But many senior figures in the textile industry still believe this export business was
mostly bogus. ‘f these goods were not saleable at two rupees, how could they sell at
four rupees?’, one remarked. According to this theory, Dhirubhai would have
provided his own export earnings, by sending the money out to the ostensible buyer
overseas through the illegal foreign exchange channels known as havala (accepting
the 20 per cent havala premium on the official exchange rate). The goods would be
sent to a free port such as Singapore or Dubai, to avoid customs duty, and then he
disposed of at giveaway prices, left to rot on the docks, or even dumped at sea. The
effective outgoings would be the 20 per cent havala premium on the funds sent out,
and the 60 per cent of the same funds actually spent on buying PFY overseas for
import back into India. The returns would be this 60 per cent multiplied by seven or
more. The profit would be 425 per cent of the outlay. And as long as Dhirubhai had
the ‘export remittance’s arriving back in his account in Bombay, he could claim credit
for doing his bit for India’s trade balance.
In an interview with the magazine Business India in April 1980, Dhirubhai said
Reliance Commercial Corp accounted for more than 60 per cent of the exports made
under the Higher Unit Value Scheme. ‘he schemes were open to everyone,’ he said.
‘I cannot be blamed if my competitors were unenterprising or ignorant.’s Textile
trade sources familiar with that era say this was not exactly the case. The adoption
of the Higher Unit Value Scheme was not widely publicised in 197 1. Dhirubhai had a
clear run of one or two years before other exporters began trying to take advantage
of the same scheme, or putting up similar proposals for other categories of textile
exports. One of these exporters, Bipin Kapadia, later recounted his experience to
Bombay police who sought it as background to the sensational murder conspiracy
case of 1989 (see Chapter 13).

Over two years in the early 1970s, Kapadia’s family company Fancy Corp expanded
its exports from Rs 2.5 million a year to Rs 15 million on the expectation of receiving
import entitlements for PFY from the Commerce Ministry’s Chief Controller of Imports
and Exports. ‘On one pretext or another’s the authorities withheld the import licences
over a 30 month period in 1972-74, causing Kapadia a huge loss.
Between 1971 and mid-1975, Kapadia made many trips to New Delhi to plead with
officials. At his hotel, Kapadia told the police: ‘s used to receive repeated calls on
telephone offering me company of women, threatening me of dire consequences, if I
were not to leave the persuasion of my import licences.’ During one such business
trip, Kapadia was approached in the hotel parking lot at night by a knife-wielding
man who called out to him. A friend pushed Kapadia out of the way, and the man ran
off.
In 1974, when some other exporters managed to get PFY shipments coming through
and the domestic premium began tumbling, Dhirubhai was blamed by his rivals for
instigating a complaint to the Collector of Customs in Bombay, I. K. Gujral, that the
others were either importing ‘substandard’ PFY or under-declaring the value to avoid
taxes. Gujral seized all the suspect PFY shipments, but did not launch proceedings. It
was not until a year later, after Gujral was replaced by an energetic Customs officer
named J. Datta, that the Customs issued show-cause notices to the importers asking
them to reply to the complaints. In a one-day hearing on I July 1975, Datta listened
to the importers and decided in their favour. The goods were released, but the PFY
premium tumbled to about 100 per cent and all the importers suffered losses.
The High Unit Value Scheme continued as long as Indira Gandhi’s government did. It
enabled Dhirubhai to gain dominance over the supply of polyester yarn to India’s
highly decentralized textile weaving industry, where over 70 per cent of capacity is
spread over thousands of small-scale power-loom workshops.
Dhirubhai became the major polyester importer in India, from the Italian company
Ital Viscosa and the C. Itob group, Asahi Chemicals in Japan, where his hosts feted
the Indian businessman on his buying trips. Later Reliance switched more of its
sourcing to the American chemicals firm E. I. Du Pont de Nemours & Co (Du Pont),
which had developed technology for a partially oriented yarn (POY, polyester
filament not yet stretched after its extrusion to bring all its long polymer molecules
into alignment or orientation along the length of the fibre) that had a longer useful
life than the other companies’.
The former Du Pont agent Suresh Kothary recalls Dhirubhai overcoming Du Pont’s
reluctance to ship to India. They said India was not used to containerisation, they
didn’t want any claims. Dhirubhai said he would never claim. There were then no
trucks to take containers from here to Ahmedabad, and the roads were bad.
Somehow Dhirubhai did it.’s The scale of Dhirubhai’s imports grew. Around 1978,
says Kothari, Dhirubhai heard that Du point had idle capacity of 300 to 400 tonnes a
month at its polyester plant in Germany. ‘Dhirubhai booked it for six months,’
Kothari said.
In addition, Reliance also built up to about 50 per cent share of the lucrative
business of ‘primping’s , whereby polyester fibre is texturised by passing it through
gear-like rollers to impart a waviness to the filament, or coiled to give stretchattributes which make the yarn more opaque, lustrous and easier to dye. Industries

Minister Pai overruled objections from his department to give Reliance the clearances
to quadruple its texturising capacity in 1975.
Two anecdotes are told about confident, even brazen, approach to the muttered
denigration of his success that inevitably sprang up. On one occasion, a rival yarn
trader allegedly spread the rumour that Dhirubhai was going bust. He was indeed
short of cash, but went to a public notice board in the yarn market and put up a sign
inviting anyone he owed money to come and have their advances repaid. No one did.
Another story is attributed to D. N. Shroff, president of the Silk and Art Silk Mills
Research Association in the 1970s. Market gossip accused Dhirubhai of black
marketeering. Dhirubhai asked Shroff to convene a meeting of the association’s
executive committee, which included many of his critics, and then turned up to face
it. ‘You accuse me of black marketing,’s he challenged, ‘But which one of you has not
slept with me?’ All present had bought or sold yarn to Dhirubhai at some stage.
In March 1977, however, Indira and Congress were swept from power in the
elections called after her two years’ rule under Emergency powers was lifted. But her
government gave Dhirubhai a parting gift. Over the 1976-77 fiscal year (April-March)
Dhirubhai had accumulated REP licences both from its own exports and from
purchases in the market, worth some Rs 30 million. On 7 February, about three
weeks after the elections were announced; the government was persuaded to
exempt all polyester yarn imports under REP licences issued since April 1976 from
customs duty, which was then 125 per cent. It was a gift of Rs 37.5 million to
Dhirubhai.
Indira’s replacement was the Janata [People’s] Government, a coalition of antiCongress parties under Morarji Desai, the austere and self-righteous former finance
minister Indira had driven from Congress because he had opposed her
nationalisation policies in the late 1960s.
But, at least to begin with, Dhirubhai fared well under Janata, helped by the good
offices of the prime minister’s son, Kantilal Desai. On 22 August 1977, the Janata
minister for commerce, Mohan Dharia, abruptly cancelled the High Unit Value
Scheme, and allowed any REP licence holder-not just exporters of nylon fabric-to
import a specific quantity of polyester yarn.
The premium on licences for PFY crashed from 500 per cent to 50 per cent almost
overnight. It was reported a year later by the Indian Express that Reliance stepped
into the market to acquire licences at this low premium, and opened letters of credit
for imports totalling Rs 50 million. Then, on 2 September, the Chief Controller of
Imports and Exports (in the Commerce Ministry) announced another sudden switch
of policy. To help Bonafide users of PFY secure their reasonable requirements, the
linkage of exports of synthetic textiles with the import of PFY was restored with
immediate effect. Registered exporters who had entered form import contracts up to
2 September would be allowed to import directly. But henceforth all other importers
would have to take their licences to the State Trading Corporation, which would be
the sole channel for imports of yarn.
It was not until March 1978 that the first supplies of yarn began reaching Indian
markets through the STC. Over the six months till then, Reliance took delivery of all
the PFY supplies for which it had contracted, and was able to squeeze a totally

captive market. The ‘Eleven Day Wonder’s as the 22 August - 2 September interval
came to be called, seemed tailor-made for the benefit of Reliance.
Whether or not bogus exports were made under the High Unit Value Scheme by
Dhirubhai has never been proven, and certainly Reliance did make genuine efforts to
sell its own products overseas. Its export manager, Rathibhai Muchhala, became a
familiar figure around the trade stores of the Gujarati diaspora in East Africa, the
Mid-East, and later the United Kingdom, trying to place stocks of Vimal artificial silks.
S. B. Khandelwal, the owner of the emporium Sari Mandir (Sari Temple) in the
English city of Leicester where many Gujaratis settled after being expelled from East
Africa, recalls a visit by Muchhala early in the 1970s. ‘They were very anxious to get
into export business,’ Khandelwal said. ‘I took 200 saris on credit. No money was
expected upfront. Muchhala said: “Just say Shri Ganesh.”(Meaning: Just for luck.)
Up until around 1977, exports took between 60 per cent and 70 per cent of the
fabrics produced at Naroda, Dhirubhai noted to Business India in 1980. That exports
ceased to be a significant activity of Reliance soon afterwards indicates that they
were propped up by the High Unit Value Scheme and the artificial shortages for PFY
created by import controls.
The new environment encouraged Dhirubhai to step up his domestic promotion of
Vimal and to expand his franchised exclusive shops to more than 600 by early 1980.
Advertisements were plastered across newspapers and billboards. ‘Only Vimal offers
you exclusive innovations in high-fashion wear,’ went one, listing products such as
Disco Dazzle Sports Jersey or Supertex dress material.
It was a Rs 10 million a year advertising spend, then unprecedented in India and
more than four times that of established textile producers such as Bombay Dyeing.
And it worked. In 1979, Reliance Textile Industries raised its sales to Rs 1.55 billion
(then US$190 million), making it the largest textile producer in the country.
Dhirubhai had meanwhile decided to help bring an end to the Janata government of
Morarji Desai. The government had not been particularly friendly to him, after the
initial favourable turn in yarn import policy, and Kantilal Desai had become too
controversial a figure to be much help. A judicial inquiry set up by Morarji Desai in
reply to charges of influence peddling by relatives of ministers did indeed find, in
February 1980, a Prima facie case for further inquiry’s that Kantilal Desai had
influenced the government to relax its policy on PFY imports in August 1977.
Dhirubhai put his resources behind Indira Gandhi’s efforts to split the Janata
coalition, which focused on the ambition of the finance minister, Charan Singh, who
had a huge powerbase among the prosperous Jat caste of farmers in Uttar Pradesh.
Dhirubhai’s role was to provide the suitcases of cash needed to induce MPs to take
the risk of leaving the government benches and joining the splinter group. In July
1979 the Desai government fell when Charan Singh’s supporters withdrew support in
parliament. Charan Singh, pledged support by Indira’s Congress, was invited to form
a government and demonstrate his support within a month. A vote of confidence was
never taken: Indira demanded as a condition that Charan Singh agree to withdraw
legislation setting up special courts to try herself and Sanjay for alleged crimes
committed during the Emergency. This he was unable to do. In August, the President
dissolved parliament and called elections for the first week of January 1980, with
Charan Singh as caretaker prime minister.

Suresh Kothary, the Du Pont agent in Bombay, was in close contact with Dhirubhai
over this period. ‘He used to tell me what was going to happen, and it always did,’
Kothary said. ‘I asked him once: “How do you know, are you an astrologer?’ He
laughed and said: “Yes.” With inflation raging as a result of two years of drought,
Indira surged back to power. The first big party staged to welcome her back in
government was hosted by Congress
MPs from Guiarat, and paid for by Dhirubhai, at the Ashoka Hotel in New Delhi.
Political observers took note that Indira spent over two hours sitting on the dais
receiving well wishers with Dhirubhai at her side. Kothary remembers that several
times during his turbulent climb to prosperity and influence, Dhirubhai would
remark: ‘everything that I have done has been kept in the ground, and a first-class
fountain has been built over it. Nobody will ever know what I have done.’

GURU OF THE EQUITY CULT
Indira Gandhi’s return to power opened a golden period for Dhirubhai Ambani. In
1979, his company barely made it to the list of India’s 50 biggest companies,
measured by annual sales, profits or assets. By 1984, Reliance was in the largest
five. Dhirubhai himself had become one of the most talked and written about persons
in India, gaining a personal following more like that of a sports or entertainment star
than a businessman. It was also the period when Dhirubhai made the most rapid
part of his transition, in the bitter words of a senior non-Congress politician in 1996,
‘..from supplicant-the most abject kind of supplicant-to influencer and then to
controller of Indian politics’.
Although it was not immediately obvious, Indira’s three years in political exile had
reinforced a change in her thinking about state intervention in the economy. In large
part due to the influence of her son Sanjay, who was to die in 1980 when the light
aircraft he was piloting crashed during some acrobatics over New Delhi, she was less
trustful of bureaucratic direction, and more inclined to give the private sector its
head.
Indian business leaders were also calling for a drastic relaxation of the licence
controls on capacity expansion and diversification vested in the Monopolies and
Restrictive Trade Practices Commission. One was the head of the extensive Tata
group, J. R. D. Tata, who along with others in the 1940s had willingly laid their heads
on the block of state planning. By 1981, Tata was calling on New Delhi to unfetter
the big business houses. The intellectual tide had turned in favour of economic
liberalisation, though it would not be until a decade later that anything more than
tentative policy change was attempted.
In Indira’s case, the disillusionment on the economic side was matched by a deeper
cynicism in politics. Her second spell as prime minister was marked by callous
manipulations such as the sponsorship of Sikh extremists in the Punjab, and by
unapologetic extraction of political funds from businessmen expecting clearances
from New Delhi. Dhirubhai’s cultivation of Indira and other Congress figures during
the Janata period certainly paid off.
In October 1980, Reliance received one of three licenses given by the government
for manufacture of polyester filament yarn, with the location stipulated as the
‘backward’ area of Patalganga in the hills of Maharashtra inland from Bombay. In a
field of 43 contestants for the licences, Reliance beat many larger and longerestablished business houses including Birla. Its licensed capacity of 10 000 tonnes a
year was by far the largest (Orkay Silk Mills and J K Synthetics were each cleared for
6000 tonnes a year), and at the time close to India’s entire existing polyester fibre
output.
Together with the Du Pont representative Suresh Kothary, Dhirubhai and his eldest
son Mukesh had already been to the headquarters of Du Pont at Wilmington,
Delaware, and persuaded the American chemicals giant to sell its technology,
including a polymerisation process not previously transferred outside the United
States.
The deal arranged through a New York-based firm called Chemtex Inc saw Reliance
make a US$26.7 million order for its first PFY plant. Making polyester is a highly
complicated chemical process, involving the reaction of one petrochemical

intermediate either purified terephthalic acid (PTA) or dimethyl terephthalate (DMT)with another, monoethylene glycol (MEG), in processes involving heat and then
vacuum, using various catalysts along the way. The resulting polymer, a long
molecule, is pumped in a molten state through fine nozzles to produce the filament.
It was first step in a process of ‘backward ’or ‘upstream’ integration that was to
bring him many plaudits, and a step into the petrochemicals industry where the scale
of business is vastly bigger than in textiles.
As well as an always-open connection to the prime minister’s office, he now had a
close and sympathetic friend as minister of commerce, the Bengali politician Pranab
Mukherjee. His ministry not only helped set trade policy, including tariff levels and
anti-dumping duties, in conjunction with the Ministry of Finance, but conducted the
system of import licences through the powerful office of the Chief Controller of
Imports and Exports-whose corridors in New Delhi’s Udyog Bhavan were thronged
with importunate businessmen and their agents.
At the beginning of 1982 Mukherjee became minister of finance, giving him charge of
broad economic policy as well as the details of revenue raising and tax enforcement.
The Ministry of Finance also supervised the Reserve Bank of India, the central bank,
whose governor is often a recently retired head of the ministry. Through its banking
division the ministry also effectively directed the 26 nationalised banks through
highly politicised board and senior management appointments. It supervised the
insurance companies and other financial institutions such as the Unit Trust of India,
and controlled entry to the sharemarkets by Indian companies.
Under a series of secretaries that included Manmohan Singh (later finance minister in
the 1990s), R. N. Malhotra, M. Narasimhan and S. Venkataraman, the Ministry of
Finance engineered a revitalisation of India’s capital markets in the early 1980s. The
key administrator of this sector was another Bengali, the energetic career bureaucrat
Nitish Sen Gupta, who became the ministry’s Controller of Capital Issues and Joint
Secretary (Investment) on 24 December 1979, just before the return of Indira. Like
his ministry head, Manmohan Singh, Sen Gupta had earlier been a diligent builder of
the ‘licence Raj’. He had been deputy secretary in the Department of Company
Affairs from March 1968, just as government policy was changing from what he has
called ‘benign aloofness to passive intervention in corporate business’, most notably
in the nationalisation of major Indian banks the following year.
In 1969, Sen Gupta had helped in the abolition of the managing agency’s system,
whereby families such as the Tatas wielded control over affiliated companies with
very little equity, and in preparing the Monopolies and Restrictive Trade Practices Act
1969 which intensified the industrial licensing regime first introduced in 1951. Other
measures which followed included the ‘convertibility clause’, whereby the
government financial institutions (development banks and insurance companies)
were given the option to convert a proportion of long-term loans to companies into
equity, and the Foreign Exchange Regulation Act 1973 which sharply restricted the
freedom of Indians to hold
foreign currency or assets.
On his arrival at the Ministry of Finance in 1979, Sen Gupta had already begun the
transition in thinking that led him to write in his 1995 memoir, Inside the Steel
Frame:
The possession of vast unregulated power in the hands of the ministers and the
bureaucrats inevitably led to complaints of extortion, inducement and enormous

politicisation of the machinery From 1970 supreme power was appropriated by the
Cabinet Committee on Economic Co-ordination which was headed by the prime
minister and for all practical purposes the prime minister’s office became the main
decision-making authority. No worthwhile project could be cleared without the prime
minister’s approval. Those who managed to get industrial licences also managed to
see to it that others did not. This was done by money, influence and political muscle
power. A nexus came to be established between a section of industrialists, a section
of politicians and a section of bureaucrats. The principle of market forces guiding or
dictating investment, or of production targets being determined by demand and
supply, was given the go-by, and everything was decided by administrative fat. Sen
Gupta’s job was to set the rules by which companies could raise money by issuing
shares or bonds, and then to adjudicate the prices they could charge for these
offerings.
But up to 1979, India’s capital markets were quiet places. Stock exchanges had
arrived in the major cities as part and parcel of the British capitalism imported in the
1880s. The exchanges were run by cliques of brokers, who set their own rules of
trading and rarely punished one of their own brethren for abuse of clients’ trust.
After periodic busts, the general public had learned to distrust the sharemarket. With
only very small percentages of equity traded actively, the managements of listed
companies were concerned more with dividend levels than with share prices. The
bigger companies went to banks for their finance rather than to the market. Between
1949 and 1979, the average annual total of money raised by, Indian companies from
capital markets was only Rs 580 million (US$71 million at 1979 exchange rates) and
the highest in any year Rs 920 million.
By the end of 1983, the amount being raised had jumped to Rs 10 billion a year,
with Reliance playing a prominent part. According to his memoir, Sen Gupta had
taken up a study by an Indian economist with the World Bank, D. C. Rao, who was
then on assignment with the Reserve Bank of India. Rao suggested greater use of
convertible debentures papers which for a certain period had the character of bonds,
earning interest, but which then were converted to shares earning dividends. For
investors this meant earnings while the company or project was gestating, with the
prospect of equity once it was a going concern. For companies, it offered a way to
slash debt after the start-up and also to avoid going for loans from financial
institutions, who might elect to convert part of the debt to equity and become major
shareholders.
Again, Dhirubhai was primed and ready for the new policy. As Reliance expanded its
production in the early 1970s, he had begun looking at taking it public in order to
raise capital. In 1973, Dhirubhai and members of the Pai family had floated a
company named Mynylon Ltd in Karnataka (the Pai family’s home state). The
intentions remain obscure, for Mynylon’s paid- up capital was only Rs I 1 000. In July
1975, Dhirubhai took consent of the Karnataka and Bombay High Courts, and carried
out an amalgamation whereby the tiny Mynylon took over the assets and liabilities of
Reliance, which by that time had assets of some Rs 60 million.
By March 1977, the company had been relocated from Ban- galore back to Bombay
and its name changed back to Reliance Textile Industries. For a period that roughly
coincided with the Emergency-when T A. Pai was a powerful minister-Reliance did
not formally exist in name. The manoeuvre later became a widely used case study in
tax minimisation.

In October 1977, Reliance had gone public, with a public offer of 2.8 million equity
shares of Rs 10 each at par, taken from the holdings of Dhirubhai and his younger
brother Nathubhai. With its shareholding thus broadened to meet listing
requirements, Reliance was listed on the stock exchanges in Bombay and
Ahmedabad in January 1978.
Thereafter Reliance expanded its equity base through frequent rights and bonus
issues to shareholders, while financial institutions converted 20 per cent of their
loans into equity in September 1979. But it was through the use of convertible
debentures that Dhirubhai made his big splash in the capital markets. Indeed,
Dhirubhai had anticipated Sen Gupta’s policy with the Series I issue of partially
convertible debentures by Reliance in October 1979, raising Rs 70 million.
Reliance was not alone in trying the long disused instrument promoted by Sen
Gupta. The Tata group’s automotive firm Telco raised Rs 230 million with a fully
convertible issue in 1980, followed by the Gujarat Narmada Fertiliser Corp with a Rs
430 million issue. But from late 1980 the issues of partially convertible debentures
came from Reliance in quick succession, raising Rs 108 million in September from its
Series 11 and Rs 240 million from its Series 111 the next year, and Rs 500 million
from Series IV in April 1982. Dhirubhai capped that by obtaining from Sen Gupta
clearance to do what should normally be legally impossible: converting the nonconvertible portions of the four debenture issues into equity.
By this method, dubbed a ‘brilliant and unconventional move’s by the magazine ‘The
Economic Scene’s in a September 1984 cover story on Dhirubhai-Reliance was able
to chop Rs 735 million off its debt book in 1983, and turn it into comparatively
modest equity of Rs 103 million, while reserves were raised by Rs 632 million.
Instead of an annual interest bill of Rs 96.5 million on debentures, the dividend
burden from the extra equity was only around Rs 36 million. This transmutation
allowed Reliance to continue raising more quasi-debt, with its E Series of partially
convertible debentures in October 1984 which raised another Rs 800 million.
Sen Gupta denies that he was unduly permissive to Reliance, or that he ever
received any benefits from Dhirubhai such as share allotments. ‘In my first
encounter with him I had to say no,’ Sen Gupta recalled. With the third series of
debentures, Dhirubhai had put in a request that the holders be entitled to renounce
rights attached to their implicit share entitlements. Sen Gupta insisted that the
debentures were not shares until converted.
But Reliance was highly persuasive. On another occasion, Sen Gupta rejected the
premium that Reliance was seeking to put on an issue, on the ground that projected
profitability had not been indicated. Without a pro-forma balance sheet for the
current year an extension of results to date-it could not be accepted.
It was 1 pm that day; Sen Gupta was due to fly that evening to Bombay for a
meeting of his seven-member committee on capital issues the next morning.
Obviously it would be impossible to have the paperwork ready for this meeting. He
told Reliance.
Coming out of the arrivals hall of Bombay Airport at 7 pm, Sen Gupta was met by
accountants from Reliance, and handed a copy of the pro-forma balance sheet and
results for each of the seven committee members. ‘I had no option but to take up
the matter at our meeting,’ Sen Gupta said. .

By the end of 1986, Dhirubhai was to raise an unprecedented Rs 9.4 billion from the
public over eight years, including Rs 5 billion from one debenture issue alone. ‘In fact
this one company, Reliance,’ wrote Sen Gupta, ‘made significant contributions to the
growth of the debenture market in the country through its successive issues of
convertible debentures, a new experiment in running a big business undertaking
entirely
on the resources drawn from the public at large without being backed by any
multinational, large industrial houses, or without taking term- loans from financial
institutions on a significant scale.
It was not entirely true that Dhirubhai did not tap the banks, as we shall see, but his
heyday in the capital markets did coincide with the rise of what Indian business
magazines came to call the, ‘equity cult’s and Dhirubhai can rightly claim some of
the credit for it.
Between 1980 and 1985, the number of Indians owning shares increased from less
than one million to four million. Among those, the number of shareholders in
Reliance rose to more than one million by the end of 1985. It was by far the widest
shareholder base of any Indian company - and, until the privatisation of major
utilities like British Telecom or Nippon Telephone & Telegraph, probably in the world.
It was evidence of a popular following that made many politicians, especially in
Guiarat where Dhirubhai had earned local hero status-think twice before denying him
anything.
Sen Gupta put the sharemarket craze down to the entry of three non-traditional
classes of investors. One was the Indian middle class, who had forgotten about their
misadventure in the stockmarket in the Second World War. Another was the
expatriate Indian communities, prospering rapidly in Britain, North America and
Southeast Asia after their miserable expulsion from East Africa in the 1960s, and
augmented by direct migrants qualifying for professional and skilled entry to
advanced economics. Since Pranab Mukherjee’s 1982 budget, these non-resident
Indians or NRIs and their companies had been able to invest directly into Indian
equities. The third class was the larger landowning farmers, prosperous after the
huge crop-yield increases of the Green Revolution during the 1960s and 1970s, who
continued to enjoy tax exemption on their income.
The equity cult spread from nearly 20 major exchanges. The premier bourse was the
century-old Bombay Stock Exchange located in Dalal Street, one of the teeming
narrow streets of the city’s Old Fort district where brokers, businessmen,
accountants and lawyers crammed into tiny offices in old stone buildings with the
remnants of charming wooden and wrought-iron balconies.
Although surmounted by a 28-storey office tower of cement, steel and glass, the
trading floor in the podium operated until the mid-1990s much as it had done in the
19th century. Some computer monitors flickered on the periphery but no one
expected them to keep up with the frenetic trading done by brawling, shouting,
gesticulating ‘robbers’ in blue jackets, or with the thriving after-hours kerb market
where shares were traded informally.
The paperwork was also miles behind the action. Share transactions were recorded
on scraps of paper at brokers’ offices, but transfers were not necessarily lodged with
company registrars immediately. Settlements came every second Friday, causing a

slow-down in trading and sometimes pandemonium when defaults were found. But
brokers and traders need not settle even then, if they could afford the upfront
margin payments and sometimes exorbitant interest rates on finance for a badla
(carry-forward) deal.
Using this prototype futures system, settlement could be deferred for months, often
amplifying speculative runs in prices. On occasion, a script would pass through 50
buy and sell transactions before being lodged for transfer of ownership. If the
signature of the original seller did not pass muster, professional forgers operating in
the side lanes of Dalal Street would guarantee an authentic-looking copy. It was an
environment where research was just another word for insider trading, where the
key knowledge was finding out which stocks were going to be ramped upwards or
driven down by cartels of moneybag brokers and operators.
Though it had thousands of listed companies and a nominal capitalisation similar to
that of middle-sized stock markets like Hong Kong or Australia, the Indian
sharemarket was not very liquid. Huge blocks of equity in the better companies were
locked up by investment institutions or controlling families. Many of the smaller
companies hardly traded at all. The floating equity in the major companies forming
the market indices amounted to a few billion US dollars. Even in the 1990s, a
concerted move with a relatively small amount of funds, upwards of US$50 million,
could make the market jump or crash.
Investors outside Bombay who could not hang around Dalal Street, browse the issue
documents sold off barrows or pavements, or listen to the gossip while snacking on a
bhel puri (potato-filled puff-bread) from a nearby stall, had to rely on a network of
sub-brokers and agents reporting to the fully-fledged stockbrokers in the big towns.
They scanned a new crop of market tipsheets with names like Financial Wizard and
Rupee Gains for news of their stocks. In some small towns, investors impatient with
their remoteness took trading into their own hands: teachers, shopkeepers and other
local professionals would gather after work in public halls to conduct their own
trading, settling on the basis of prices in newspapers from the city.
It was a situation made for a populist like Dhirubhai. His ebullience and punctilious
nursing of relationships were transferred to a larger stage, using the mass
communications techniques learned in marketing the Vimal brand name.
‘The people of Reliance,’ began one typical promotion, on the cover of an annual
report. ‘Therein lies our strength. In the skills of the scientists, the technologists; in
the commitment of the engineers, the employees; in the dedication of the brokers
the traders and above all, in the undisputed loyalty of the investors. These are the
people of Reliance. In their growth lies our growth; in their prosperity, our
prosperity. For we are a family; we are all one. We are ... Reliance.’ In those years,
Dhirubhai and Reliance had a success story to tell. On the technical side, the
polyester plant at Patalganga was put up in a fast 18 months, and put into regular
production in November 1982. Construction and the debugging of production lines
had been supervised by Mukesh Ambani, who had been pulled out of Stanford
University immediately on completing his master of business administration degree,
and put in charge of the new project. Aged 24 at the outset, with a degree in
chemical engineering, Mukesh Ambani won his spurs as an industrial manager at
Patalganga.

Reliance made sure that a comment by Du Point’s then international director,
Richard Chinman, that such a plant would have taken 26 months to build in the
United States, had wide publicity in India. ‘Reliance Textile Industries, now the fourth
largest private sector company in the country, continues to burn up the track with its
blistering growth record’, said the magazine India Today in February 1983. ‘Close on
the heels of the commissioning of its polyester filament yarn plant at Patalganga in
Maharashtra, the company has set its sights on still bigger projects.’ Dhirubhai still
demonstrated his uncanny grip on government trade and industrial policy, and their
implementation. While the canalization of imports through the State Trading Corp
had been abandoned in April 1981, and polyester filament yarn (PFY) and partiallyoriented yarn (POY) placed on the ‘pen general list’s of imports, the right to import
the yarn was still confined to so-called actual users. The Customs House in Bombay
took the line that these did not include large cotton textile mills - despite the growing
demand for cotton-polyester blends-but only the small ‘art silk’s power-looms.
Reliance had already organised power-looms as outsources, giving them polyester
yarn and taking back their grey cloth for finishing and dyeing at Naroda, On 23
November 1982, three weeks after Patalganga went into production, the government
put an additional Rs 15 000 a tonne duty on PFY and POY imports, allowing Reliance
to raise its prices and still force India’s small yarn crimpers and power- looms to buy
its products. The policy switch had been telegraphed early in November by a
submission made to New Delhi by the Association of Synthetic Fibre Industry that
dumping of PFY and POY by foreign producers under the open general licence
channel was causing a curtailment of local production and pile-up of inventories,
leading to heavy losses.
The All-India Crimpers’ Association, representing about 150 small processors who
texturised PFY and POY into fibre ready for weaving and knitting, took out a series of
anguished newspaper advertisements headlined: ‘should the country’s texturising
industry be allowed to die?’ The crimpers said the case for anti-dumping duty was ‘is
leading, distorted and untruthful’. Domestic polyester output had risen 60 per cent in
1981 to 16000 tonnes, and still fell short of demand estimated at 50000 tonnes a
year. The rush into PFY production by new producers scarcely pointed to a glutted
market.
Existing customs duties worked out to a total 650 per cent on landed costs for
importers, topped by further excise duty and sales tax on the processed product.
Texturised polyester yarn had become more lucrative for smugglers than the
traditional gold, wristwatches and electronics-and huge consignments had recently
been intercepted, usually misdeclared as some other low-duty goods. Instead a case
existed for an immediate duty cut and freedom for anyone to import.
The pleas were ignored. ‘The government has finally declared a deaf car to our cry of
anguish,’ said the Crimpers’ Association in an advertisement on 7 December. By its
calculation, the effective duty on PFY and POY had risen to 750 per cent with the
addition of the Rs 15 000 a tonne anti-dumping levy. The Reliance plant at
Patalganga immediately exceeded its licensed capacity and produced some 17600
tonnes of polyester yarn in 1983, its first full year, thereby doubling India’s total
output. The extra duty in effect added Rs 240 million to Reliance’s revenue. In late
1984, Finance Minister Pranab Mukherjee announced a new policy to endorse higher
than licensed capacity on the part of industry, and consequently in late 1985
Reliance received an effective retrospective licensing of its capacity to 25 125 tonnes
a year.

Along with the clearances for his capital issues, Dhirubhai also had an easy time from
the revenue side of the Finance Ministry. At no stage did Reliance ever pay corporate
income tax on its profits, or even feel the need to make more than token provision
for it. Constant expansion and heavy borrowing gave ever increasing cost deductions
to offset against profits. Reliance became the most famous of India’s ‘zero-tax’s
companies.
In his budget for 1983-84, Mukherjee made one of the government’s periodic efforts
to crack down on such companies, by introducing an amendment to the income tax
law requiring companies to pay 30 per cent of profits in tax after depreciation but
before other deductions. Reliance avoided this by capitalising future interest payable
on borrowings for its new projects, hugely increasing its asset value in one hit and
allowing greatly increased depreciation claims to deduct from profits. Reliance
remained a zero-tax company for nearly three decades after its listing. It was only in
1996-97, after the introduction of a 12 per cent ‘, minimum alternate tax’s on
company profits, that it made its first corporate income tax provision.
The collectors of indirect taxes were also friendly. While Reliance could not avoid the
heavy domestic excise duties levied on manufactures at the factory gate, it was
initially given considerable leeway in setting aside some production as ‘wastage’s not
incurring excise. Bombay Customs accepted a 20 per cent to 23 per cent ‘bulk
buyer’s discount given to Reliance by Japan’s Asahi Chemicals up to 1982, and a 7
per cent discount on its purified terephtbalic acid imports thereafter, whereas in
other cases they might have inquired about under-invoicing.
Many officials in charge of customs and excise were drawn into the Reliance family,
rather than adopting the attitude of arms-length enforcers. The journalist Kanti Bhatt
recalls attending the marriage of Dhirubhai’s daughter Dipti in 1983, when he joined
the marriage procession, which in the Hindu tradition follows the groom to the
venue, with the guests occasionally breaking into the twirling dance known as
dandya raas.
‘I found myself in the street playing dandiya raas with the Finance Ministry’s chief
enforcement officer,’s Bhatt said.For his investors, all this added up to greater profits
at Reliance, which multiplied from Rs 82.1 million in 1979 to Rs 713.4 million in 1985
(8.69 times), on sales that rose from Rs 1.55 billion to Rs 7.11 billion (4.58 times)
over the same years. The company was never India’s most profitable, either in
absolute terms or in terms of profit as a return on capital, net worth or turnover. But
for the times, Dhirubhai was unusually generous with dividends, giving investors a
return of at least 25 per cent on the face value of their shares from the time Reliance
was listed.
But it was in the appreciation of their shares that the early investors in Reliance were
rewarded. In its first year of listing, 1978, Reliance had reached a high of Rs 50, five
times the par value of the share, which was a high premium in those times. In 1980
it hit Rs 104 as Dhirubhai promoted the growth potential of the company’s expansion
plans at Naroda and Patalganga, and in 1982 it reached a high of Rs 186.
In that year Dhirubhai established his name among brokers and investors as a
master of the stockmarket. From the middle of March 1982, a cartel of bear
operators reputed to be based in Calcutta started driving down his and other stocks
in the Bombay market. The selling pressure was intense on 18 March, creating a

half-hour of panic just before the close. The bears sold 350000 Reliance shares,
causing the price to fall quickly from Rs 131 to Rs 121, before Dhirubhai got his
brokers to start buying any Reliance shares on offer. The more they sold, the
number got to 1.1 million shares, the more Dhirubhai picked up, ostensibly on behalf
of non-resident Indian (NRI) investors based in West Asian countries. Eventually, the
friendly brokers bought over 800000 of the shares sold by the bears.
It was an almighty poker game. The bears had sold short-in other words, they had
sold shares they did not own in the expectation that the price would fall and let them
pick up enough shares later at a lower price. Reliance itself could not legally buy its
own shares. So who were the NRI investors who arrived so providently on the scene
with more than Rs 100 million (then over US$10 million) to spend?
Six weeks later, after several further spells of bear hammering of Reliance shares,
Dhirubhai called his opponents -20 cards. Every second Friday, the Bombay Stock
Exchange stopped new transactions while its members settled the previous
fortnight’s trades or arranged badla finance to carry them over. On Friday 30 April,
Dhirubhai’s brokers used their right under the badla system to demand delivery of
the shares they had bought for their offshore clients, failing which a badla charge of
Rs 25 a share would be levied. The bear cartel baulked, throwing the exchange into a
crisis that shut it down until the following Wednesday. In following days the price of
Reliance shares rose to a peak of Rs 201 as the bear brokers desperately located
shares to fulfill their sales, incurring massive losses.
By 10 May, the Reliance price started easing, signifying that deliveries had been
made. But Dhirubhai and his company had clearly arrived. Reliance was henceforth
treated by major news-papers as a ‘pivotal’s stock in the market, and Dhirubhai
himself began receiving panegyrics in magazine profiles as the ‘messiah’s of the
small investor. Dhirubhai went on to pick up a further one million Reliance shares by
August 1982 for the mysterious NRIS, bringing the outlay since March to about Rs
260 million. A few years later, in December 1986 at the time of its massive C Series
debenture issue, Reliance advertised that Rs 1000 invested in Reliance shares in
1977 would have bought an investment worth Rs 1,10,041 in November 1986, an
appreciation of 11,000 per cent. Another calculation made by Reliance put the gain
at 12,234 per cent.

An analysis by S. R. Mohnot in his Reliance study, points out that to obtain the value
quoted in 1986, the investor would have had to top up his initial Rs 1000 outlay by
subscribing to every rights issue and debenture issue offered to him, taking the total
investment to nearly Rs 30000 for assets and accumulated earnings (interest and
dividends) worth Rs 1,08,278. This was far from thousands of percentage points, but
still equivalent to an annual compound rate of interest of 44.5 per cent. Tellingly,
however, Mohnot noted that, had the investor bailed out at the end of 1983 after five
years, the annual compounded return would have been a still more impressive 75
per cent.
By late 1984, Dhirubhai had reached a new plateau of acclamation, and thereafter
frequently featured on the covers of Indian magazines. Over the next year, he
announced plans for a massive expansion of Reliance, by moving further back along
the raw petrochemical chain to become India’s first producer of purified terephthalic
acid (PTA), to make the other main input to polyester, monoethylene glycol (MEC),
and to make the associated products linear alkyline benzene (LAB, for use in

biodegradable detergents) and high-density polyethylene, a plastic. Patalganga
would also be expanded via a 45000 tonne a year plant to make polyester staple
fibre (PSF, fibres of a set or staple length, which are spun together to produce a less
shiny yarn than the long flainents in PFY).
Ever bigger debenture issues were announced-Series E raising Rs 800 million in
October 1984 and Series F in June 1985 raising Rs 2.7 billion-and were fully or over
subscribed.
Probably the pinnacle of popularity was reached on 20 May 1985, when Reliance
hired Bombay’s Cooperage Football Grounds as the venue for the annual general
meeting to approve results for 1984. About 12000 shareholders turned up to sit
under canvas awnings stretched above the grass and to watch the directors via
television monitors. It was reported as the first AGM ever held in the open, and the
largest ever meeting of shareholders, attracting note just for that fact the next day
in The Financial Times of London.
Dhirubhai arrived in a suit, but soon got down to shirtsleeves to report the previous
year’s 58.6 per cent jump in net profit and to list various new projects totaling Rs
6.72 billion in outlays. India had recently had its first taste of hostile takeover bids
when the London-based expatriate Indian, Swaraj Paul, had bought into the
machinery manufacturers DCM and Escorts. If anyone tried that with Reliance, they
would have to deal with 1.2 million loyal shareholders, said Dhirubhai to loud
applause.
The shareholders enthusiastically approved a name change symbolising
wider
ambitions. The word ‘Textile’s was dropped from the company’s name. After approval
by company regulators in June, it was simply Reliance Industries Ltd. Accolades
followed in the press. The magazine Bombay said Dhirubhai appeared at the meeting
like a ‘dark and dapper messiah’. Business India spoke of his ‘Brilliant financial
acrobatics’ and ‘Superlative business performance’s which had helped him create
corporate history’s and become a ‘end in his own age lifetime’. A man whom
childhood poverty had deprived of adequate clothes to wear, has today become the
biggest clothier of the nation,’ the cover story said. It might even be divinely
destined, the magazine noted. In the early 1960s, the ‘Society astrologer’s Pandit
Sundaram in New Delhi told Ambani he would be India’s No. 1 industrialist. ‘Not so
long ago, Dhirajlal Hirachand Ambani, popularly known as Dhirubhai Ambani, was
sneered at as an upstart, condemned as a manipulator par excellence and written off
as a flash in the pan,’s said Business India.
Within the space of seven short years, Ambani has proved all his critics wrong.
Today he is revered by his 12 lakh investors (the largest number for any company)
and envied by every industrialist. His methods have become the gospel for the new
generation of aspiring industrialists. Ambani, an ordinary high school dropout from
Chorwad, in Junagadh district, Gujarat, is seen as the most outstanding practitioner
of a new style of management in which the only thing that matters is - results.
Some more considered analysts also saw Dhirubhai as a natural winner. ‘What
Dhirubhai has touched so far has turned to gold,’ wrote authors Margaret Herdeck
and Gita Piramal. ‘Yesterday, synthetic textiles. Today, petrochemicals. Tomorrow is
only in the mind’s eye. One thing is certain. If Dhirubhai gets involved it will be big
... In Ambani, there is no hesitation between thought and action. They appear to be
one and the same.’ Even the friendliest writers felt compelled to mention that
Dhirubhai had many critics and enemies who called him an arch-manipulator of

politicians and bureaucrats. ‘It is not for nothing that this dark horse from Guiarat
has achieved the reputation in textile circles of being the best friend and the worst
enemy one could have,’ said Business India. In most cases, these criticisms were put
in a way that gave Dhirubhai the chance for a free kick. ‘Ideas are no one’s
monopoly,’ he was quoted as saying by Herdeck and Piramal. ‘Those who criticise me
and Reliance’s growth are slaves to tradition.’ If not to outright conservatism and
complacency, the criticisms were put down to jealousy. But two of India’s sharpest
business journalists did get Dhirubhai to admit that stroking government was his
biggest task. ‘The most important external environment is the Government of India,’
he told India Today’s T N. Ninan and Jagannath Dubashi. ‘You have to sell your ideas
to the government. Selling the idea is the most important thing, and for that I’s meet
anybody in the government. I am willing to salaam anyone. One thing you won’t find
in me and that is ego.’ But the criticisms were brushed aside by most investors, it
seemed, as well as by many of the journalists. The dark side of Dhirubhai was part of
his attraction. It was a thumb in the nose at the bureaucrats, the corrupt politicians,
and the exploitative business elite cornering the wealth of India and wasting it.
For the Gujaratis who formed much of the business and professional class of Bombay
but few of the big industrial entrepreneurs - Dhirubhai was one of them. He had
taken on and beaten the Parsis, the Marwaris and the Punjabis at their own game.
Called ‘gujjus’ and often sneered at by other Indian communities for their
parsimonious, apparently money-obsessed ways, the Gujaratis had made it through
Dhirubhai. If he had bent the rules, engineered loopholes, cleverly avoided tax or
given bribes, Dhirubhai was only doing what any other industrialist would do, given
the opportunity or the ability to carry it out. How else would a complete newcomer
with no capital or education get the breaks? A leading management consultant, S. K.
Bhattacharya, was quoted as saying: ‘The distinction between Reliance and others is
that it creates the future for itself rather than waste time on sobbing over
government controls and insensitivity of government policies.’ It was a frequently
made observation.
The only victims, it seemed, were the government, which did not get as much tax
revenue out of Reliance as perhaps it should, or the bureaucrats, who could not get
their vindictive pleasure out of blocking or crippling a private sector endeavour. After
centuries of rule by alien governments, many Indians-especially the traders and
farmers-had come to regard anything sarkari (governmental) as trouble. By the
1980s, the government of independent India was similarly suspect in places like
Bombay and Ahmedabad. In rural India, outlaws like the ‘Bandit Queen’s Phoolan
Devi or the southern sandalwood smuggler Veerapan attained celebrity status, and
evaded capture for years (Phoolan Devi even getting elected to parliament in 1996,
despite pending charges of taking part in a massacre of 20 men). In the popular
Hindi cinema, the lines between good and evil had become confused. Police and
politicians were aligned with gangsters, the hero had become a khalnayak, a villain
or anti-hero.
Dhirubhai worked in an expensive office in Bombay’s Nariman Point business district.
He drove around town in a Cadillac (augmented with a gold-coloured Mercedes by
1985). He took helicopters out to Patalganga and new sites in Gujarat (even using
the Maharashtra state governor’s helipad in Bombay for a while), and as the years
went on was in touch with the highest in the land. But he still looked and felt an
outsider. ‘Dhirubhai never moved around with the social crowd like the Wadias, the
Godrejs, the Singhanias,’ said one senior Bombay journalist. ‘He was not considered
in the same league - you know how snooty they can be. He would go to the Harbour

Bar [at the Taj Mahal Hotel], have a drink, watch everybody, then leave.’ The sense
of exclusion may have been what drove him onwards. It also lent an edge to his
public image, turning him, too, into an anti-hero. Those who followed Dhirubhai in
the stock market were not just part of the Reliance family but members of an
unspoken rebellion.

Friends in the right Places
This was the public face of Dhirubhai Ambani. Known to a small circle of insiders was
a different face. Shadowing the industrial and marketing activity, the published
financial workings of Reliance was a second operation-the systematic manipulation of
share price, publicity and government policies in order to sustain the Reliance
success story and keep the public money coming in. Every company attempts to
some degree to improve these elements of its operating environment. Few have ever
matched Reliance in its sustained efforts.
By being able to quickly transform debt into equity, Dhirubhai seemed to have
avoided the borrowing trap that eventually caught up with so many other stars of the
global sharemarket boom in the 1980s. By expanding only into associated products,
he created enormous internal economies for Reliance.
But it was still a balancing act that required a lot of forward momentum, and
constant oiling of the machinery. It was generally agreed that Reliance’s high share
price was the single biggest factor in the case it enjoyed in raising finance. Reliance
shares were promoted relentlessly as a path to rapidly appreciating wealth.
Dhirubhai was free with allocations to friends and clients from the directors’ quotas
of any issues, though these share parcels usually come with the stipulation not to
sell for two years’ The business chronicler Gita Piramal also noted how central was
the share price:
Arnbani realised that in order to seduce the public into investing in his schemes, he
had to offer them something above and beyond what they were already used to
getting. And this was the steady appreciation of their share holding ... At the time,
Ambani didn’t realise that he had mounted a treadmill from which he would never be
able to step off. Over the next few years, this treadmill speed ever faster, constantly
threatening to whirl out of control. In order to retain the public’s support, Dhirubhai
had to ensure that the price of Reliance shares kept appreciating, month after
month, year after year. As long as he kept moving, money poured in.
In theory, that need not have been the case. Had the funds raised by Reliance been
promptly deployed in productive investment, Reliance would have been able to rest
on its laurels from time to time. But after the fast completion of the PFY plant in
1982 and the PSF plant in March 1986 at Patalganga, the company’s investment
targets constantly slipped. It faced political obstacles in front of new sources of
funds. And in any case, Dhirubhai needed a constant, substantial stream of income
to cover his political payments, top up the official salaries of his executives with cash
(company law then put limits on salaries), and keep various benefits flowing to his
network of contacts. To some extent, this could be generated by market play in the
management shareholding, spread between scores of investment and trading
companies. This meant that Dhirubhai really was on a spiral he could not get off. Not
that he wanted to. His daily activity was a constant adrenalin rush, in which he
continually proved his mastery of India’s markets in yarn, textiles, petrochemicals,
shares and finally money itself.
In the process, Reliance became a ‘sure cash flow operation’, according to a
stockbroker who worked closely with Dhirubhai. ‘They do not distinguish between
revenue and capital,’ the broker said. ‘They only operate on a cash flow.’ Assisting
Dhirubhai juggle money between Reliance, associated private companies, banks and
the markets were a close band of trusted staff. Some were family. Foremost was his

nephew, Rasikbhai Meswani, who knew all the ins and outs of private accounts,
including his contributions to politicians and parties, journalists and others. Others
were old acquaintances from Aden or Saurashtra, like senior managers Indubhai
Seth and brother, Manubhai Seth, or Chandrawadan (‘ama’s Choksi.) The company
secretary of Reliance, Vinod Ambani (no relation), was in most cases the common
link to the growing number of shelf companies which often had their registered
office, but not necessarily a nameplate, in the same address as one or other of the
Reliance offices around Bombay or Ahmedabad, and whose activities were put down
as trading and investment’.
For example, Hemal Holding & Trading Pvt Ltd had as directors the old Reliance
Commercial Corp stalwarts Narottambhai Doshi and Manubhai Sheth, as well as
Vinod Ambani. Victor Investments & Trading Pvt Ltd was controlled by members of
the Meswani family. Jagadanand Investment & Trading had Choksi and one
Bhanuchandra Patel as directors. Many of these companies were subsidiaries of a
company called Mac Investment Ltd, incorporated in September 1974 and with its
registered office in the Syndicate Bank headquarters in Manipal. Dhirubhai and his
extended family, plus in-laws and old friends like Rathibhal Muchhala, were included
in Mac Investment’s top shareholders in an annual return at the end of 1983.
The story is told that Vinod Ambani or some other executive once came to Dhirubhai
to get some guidance on what to name the host of new companies’ being spawned.
Dhirubhai told him to get out an ancient Sanskrit scripture called ‘Vishnu Sahasra
Nam’s (The 1000 Names of Lord Vishnu). Many of the investment companies
unearthed during later scandals did indeed bear the names of divine avatars.
If the nerve centre was the Reliance corporate headquarters in Maker Chambers IV,
Nariman Point, or wherever else Dhirubhai happened to be, the essential plumbing
was at the share registry and transfer agency for Reliance, handling the ownership
details and paperwork of the company’s shareholders, some 1.2 million by the end of
1986. The registry was often described as in-house but was in fact a separate
company, Reliance Consultancy Services Ltd, which had several hundred staff of its
own working in a large building in Bombay’s distant industrial suburb of Andheri.
Dhirubhai met few objections to his accountancy from his auditors, in particular the
firm of Chaturvedi & Shah, which has cleared Reliance’s books from the earliest
days. One partner, D. N. Chaturvedi, spent a lot of his working time in the Reliance
head office year round. The other name in the partnership is a son of a Reliance
director until the early 1990s, Jayantilal R. Shah.
When Reliance went through difficult patches, one device to tide over poor
profitability was to change the accounting year. Thus in 1978 when the removal of
the High Unit Value Scheme forced a switch to the domestic market just as Reliance
was going public, the company changed from an October-September year to a
January-December year, even though it had moved from a July-June year only two
years earlier. In a later time of troubles, 1987 and 1988, Reliance changed its
accounting period in two successive years-making for four changes in 15 years,
before settling on the April-March year used by most Indian companies.
One way to move the market is by weight of money. The best way, of course, is to
use someone else’s money. While Dhirubhai can rightly claim to be a father of India’s
equity cult, another important guru was Manohar J. Pherwani, chairman of the Unit
Trust of India for nearly ten years until November 1989. Though it was set up by an

act of parliament as far back as 1964, the UTI had been quiescent until Pherwani’s
arrival. Originally from Sindh (now in Pakistan), Pherwani was a desperately
ambitious man, eager to make his mark, and willing to step outside the orthodox to
raise subscriptions to UTI funds: for example, by sending mobile offices around
middle-class neighbourhoods and prosperous rural areas to sign up new investors at
their homes. During his chairmanship the UTI’s investable funds rose from Rs 4.6
billion (in 1979-80) to Rs 176.5 billion (in 1989-90). Nitish Sen Gupta quotes J. R. D.
Tata as remarking at a seminar in Bombay that ‘he capital market that N. K.
Sengupta did so much to create has become a pocket borough of the UTI chairman,
M. J. Pherwani.’ Dhirubhai and Pherwani became close, and their success fed off each
other’: Reliance’s rising share price meant rising values of UTI units; UTI’s heavy
investment in Reliance helped Dhirubhai keep the price going up.
Dhirubhai did have some funds himself. Reliance’s cash reserves could be lent to the
associated investment companies to buy shares, or deposited in banks as informal
additional security against loans to those investment companies to buy shares and
debentures. But more often, the market was moved by information or sentiment,
and these funds used to take a profit.
Until 1993 when the newly empowered Securities and Exchange Board of India
applied new rules, India had no explicit law against insider trading, though
companies were forbidden by company law from buying their own shares. It was
accepted as normal, however, for companies to see that their share prices were
boosted by friendly brokers and underwriters ahead of issues, and often for sensitive
information to reach some investors ahead of the public. Sharemarket research was
not so much concerned with intelligence about a company’s performance as about
which particular stock was being targeted for concerted price ramping and by whom.
But Dhirubhai’s year-round intervention in Reliance’s share price was, and remains,
highly unusual.
To categorise Dhirubhai as an inside trader, however, does not do justice to the
scope of his activities. His willingness to ‘salaam’s anyone and his cultivation of
junior staff and newcomers had by the early 1980s created a huge network of friends
in politics, government ministries and financial circles. Earlier, goodwill had been
cemented by gifts of the famous ‘suit-lengths’ of material. After the float of Reliance
in 1977, Dhirubhai was able to allocate parcels of shares or debentures from the
‘promoter’s quota’s of any issue, with a profit virtually guaranteed by the gap
between issue and market prices or by the prospect of conversion.
Again, Dhirubhai was not unique in cultivating officials. Many companies had their
friends in the bureaucracy. Businessmen liked to get close to power, and the officials
looked to post-retirement jobs or opportunities for their children. But, as always with
Dhirubhai, it was the degree. His holds were not just in the ministries of direct
relevance to Reliance - Finance, Industries, Commerce, Textiles, Petrochem - but in
others like the Prime Minister’s Office and Home Affairs where the general powers of
the government were wielded.
It meant that a signature was barely on a document or file in the Ministry of Finance,
for example, before Dhirubhai was informed. The inside trading was not just in the
affairs of Reliance Industries Ltd, but in the affairs of the Government of India. The
intervention went beyond information-gathering, to the point of influencing or even
controlling key bureaucratic appointments, and thereby influencing policy or its
interpretation. In many parts of India, government jobs have long been allocated by

auction, the highest prices being fetched by those in revenue raising and policing
agencies where the opportunities for corruption are greater. In what is regarded as
the most debilitated state administration, that of Bihar, the auction is conducted
more or less openly in a cafe in the main street of the capital Patna. In New Delhi,
police promotions and transfers are brokered by a well-known city journalist.
In Bombay, the competition was intense among the handful of senior bureaucrats
with financial sector experience for the chairmanships and chief executive positions
of the government financial institutions. Dhirubhai was active in the lobbying when
the top posts fell vacant in the banks, insurance companies and statutory authorities.
And as one old acquaintance noted, Dhirubhai would make a point of telephoning all
candidates and assuring each one of his support. Even if it were not really decisive,
the winner might be left thinking he owed his new job to backing.
most distinctive touch, however, was in his use of the press. Before him, G. D. Birla
may have been equally master of the Licence Raj, and keen to buy public and
perhaps divine favour by the building of temples and colleges, but Birla disliked the
press and never cared to mix with journalists --- even though his family owned The
Hindustan Times, one of India’s strongest English-language newspapers.
Centuries of shielding their wealth from over-extended maharajas and nawabs, or
from a hungry populace, had made India’s merchants wary of ostentation and careful
not to be seen to be overstepping their place in the social hierarchy. In more recent
times, the Licence Raj had unleashed packs of inspectors against private wealth, and
businessmen had learned to be lectured by politicians and officials about the
superiority of economic planning and directed investment.
Dhirubhai shared a certain contempt for the journalist. ‘Throw some scraps to the
street-dogs and crows before you feed yourself,’ a family friend remembers him
enjoining his sons Mukesh and Anil in the early days at Bhuleshwar. But he
recognised how powerful the press could be in moulding the thinking of the public
and the politicians.
The huge advertising spend of Reliance gave him an automatic hold over many of
the less established newspapers and magazines. By the early 1980s, the new
technology of computerised composition and photo-typesetting had led to an
explosion of publishing in India, particularly in regional languages where it overcame
the technical problems of complex scripts in an economical way. Gujarat was no
exception to this. Advertising from Reliance was an important source of revenue for
the Gujarati publications in Gujarat itself, Bombay and overseas.

Dhirubhai used his clout. The Gujarati columnist Kanti Bhatt remembers being called
upon for help by a newspaper editor who had offended Reliance by printing a hostile
paragraph, apparently fed by a rival Marwari-owned company. Reliance had
immediately cancelled all advertisements.
When he met Dhirubhai, Bhatt remembers him being furious, even throwing a
telephone at one point. Mr. Ambani called in his advertising manager and said:
“Show me our advertising plans.” Then he said to him: “Take out this particular
newspaper.” It meant a loss of Rs 600 000 a year for that newspaper.’ After this
charade, Bhatt went back to the editor and told him the message was that nothing
could be written against Reliance if he wanted the ads. ‘The next issue was damage

control, and a very long and favourable article was written,’ Bhatt said. Advertising
was restored.
Later Bhatt was called in by Dhirubhai himself to find out why a Gujarati publication
in Britain had suddenly begun printing a series of articles critical of Reliance. After
talking to the publisher, Bhatt reported back: Sir, it is a plea for advertising.’ The
plea was answered, and the articles stopped. ‘You could multiply these examples by
a million,’ Bhatt said.
Dhirubhai could not wield the same power over the big metropolitan newspapers. But
he could and did cultivate their journalists and editors. The Indian press tends to be
like most of the other key institutions in the country: free, but in many parts corrupt
except at the very top. Bombay’s underpaid financial journalists are used to receiving
gifts from businessmen wanting publicity, and their proprietors are happy to have
their salary bill subsidised in this way. Press conferences are followed by buffet
meals and drinks, and envelopes containing cash or gift vouchers are handed out by
public relations officers on the way out. The envelope system has flourished most
intensely during bull runs on the stock exchange when new company floats and
issues have come thick and fast, and even a paragraph in a big English-language
newspaper means recognition for a new company promoter.
In Paris, waiters are known to pay the proprietors of certain fashionable restaurants
for the privilege of being able to wait at the tables and collect tips. In Bombay, some
would-be business correspondents are willing to eschew salary altogether and even
offer a monthly fee to the newspaper in return for being accredited as its reporter.
Reliance was a pioneer of envelope journalism. A senior commercial journalist in
Bombay recalls that journalists would get vouchers worth up to Rs 2000 for goods at
a Vimal retail outlet called Laffans. Some in senior positions would get regular
monthly payments or issues of Reliance shares and debentures at par. Ambani’s
moles in the press were known as the “Dirty Dozen” the journalist said. ‘The point
man was Rasikbhai Meswani. He was a thorough gentleman. His door was open 24
hours a day for journalists. People would go to collect on first of the month.’
Dhirubhai also realised that the reporter was not the final arbiter of what got
published.
He also cultivated desk editors and even editors. One who accepted Reliance
debentures for himself, and help in arranging bank finance to pay for them, was
Girilal Jain, editor of The Times of India for much of the 1980s.The close journalists
in the ‘Dirty Dozen’s would not only be used to get favourable news about Reliance
printed prominently They also became an extension of intelligence net- work, asking
rival businessmen for their frank views off the record about Reliance and then
reporting them back. On the theory that rumour and gossip are more keenly heeded
because they carry an aura of exclusivity, the pressmen would be used to plant
opinions about the merits of Reliance activities and the failings of other companies.
Occasionally the journalistic network would turn up details of illegal or embarrassing
activities by rivals that could be used to obtain peace, or failing that, turned over to
authorities for punitive action or harassing investigation. Many of the journalists
regarded by their colleagues as being in the Reliance pocket would indignantly deny
being bought. Indeed, some would have simply fallen for the perennial trap of
getting too close to a source that had given them many good stories and then having
too much friendship or ego involved to admit any negative news. And especially for

the news magazines that were the liveliest and fastest-growing section of the Indian
media in the 1980s-the last decade before privately owned television arrived with
satellite broadcasts- Dhirubhai and Reliance were a colourful and fresh story. It was
a highly effective image-making operation. But, perhaps inevitably, some accidental
slips allowed the public glimpses of Dhirubhai’s secret manoeuvres.
The opening developed in 1983 when Finance Minister Pranab Mukherjee began
giving some details in parliament to the response by non-resident Indians to the new
sharemarket investment rules he had announced in his first budget, in February
1982. Previously, NRIs had been allowed to make portfolio investments in Indian
shares but were not allowed to repatriate their funds. The new system allowed NRIS,
or companies and trusts owned at least 60 per cent by NRIS, to put money directly
into Indian shares and to repatriate funds after selling their shares. It was
implemented by the Reserve Bank of India in April that year-just as Dhirubhai was
marshalling his response to the bear attack on his share price.
In a written answer, tabled on 10 May 1983, Mukherjee said that between April 1982
and April 1983, 11 overseas Indians had purchased shares and debentures worth a
total Rs 225.2 million (then about US$22.5 million) in two Indian companies. It was
widely believed that the two companies were Escorts and DCM, targets of the raider
Swaraj Paul. On 16 May 1983, however, the Calcutta-based Business Standard
reported that in fact all the investments had been made in one company, Reliance,
by investment companies overseas. ‘It is believed that all these investment
companies belong to Mr. Dhirubhai Ambani himself, the promoter of Reliance
Textiles.’ Answering questions from the leftwing opposition figure Prof. Madhu
Dandavate on 26 July, Mukherjee listed the 11 companies allowed to invest in
Reliance, all of which he said were companies registered in the United Kingdom.
Among the conventional names, two of the 11 stuck out for their cheekiness:
Crocodile Investments and Fiasco Investments. The investments in Reliance
accounted for 98 per cent of all investments made by NRIs under the new schemesuggesting to critics that here was yet another policy tailor-made for Dhirubhai.
The tantalising clues were taken up by The Telegraph, a stable- mate of Business
Standard in Calcutta’s Ananda Bazar Patrika group, a hometown press that had little
time for Mukherjee even though he was a Bengali. On 16 September, theTelegraph’s reporters found that the companies named did not exist. Two months
later, on 16 November, the Telegraph found that eight of the 11 named companies
had appeared in the UK registry - but that the applications to register had not been
lodged until 27 July 1983, the day after Mukherjee’s reply in the Indian Parliament.
All were made through one channel, on the instructions of a single client.
On 22 November, just as the parliament was about to rise for a week, Mukherjee
tabled a correction to his 26 July reply. The companies were actually registered in
the Isle of Man-the small island community in the Irish Sea. Mukherjee could have
said he was technically right: the island is a British protectorate and part of the
United Kingdom. But like the Channel Islands between Britain and France, it has its
own tax laws and derives much of its income from providing tax shelters for
foreigners. Mukherjee corrected some other minor mistakes in the company names
also: it was Crocodile Ltd and Fiasco Overseas Ltd.
Editorials asked how closely the central bank had scrutinised the eligibility of the 11
companies under the NRI scheme, if the finance minister could not even get their
domicile right. Pranab Mukherjee: Minister of Finance or Reliance?’ went the headline

in the Telegraph’s leader. Facing more questions in parliament and an attempted
breach of privilege motion (rejected by the Congress majority) on 14 December,
Mukherjee insisted the different place of incorporation did not make any material
difference about eligibility and appealed to MPs not to will the scheme’. The RBI had
seen certified statements about the majority shareholders, but their identities could
not be revealed on grounds of banker- client confidentiality. If black money was
being laundered through the NRI scheme, there were other laws to take care of it.
The press soon followed up the Isle of Man clue. In January 1984, India Today and
other publications revealed that company searches showed the 11 companies had
been registered between 1979 and July 1982, initially with various English names as
directors. In July 1982, the ownership and directors had changed: suddenly 60 per
cent to 80 per cent of the share capital in each company belonged to people with
Indian names, mostly with the surname Shah. In 10 of the 11 companies, common
directors were two accountants domiciled in the Channel Island of Sark, Trevor
Donnelly and his son John Donnelly, both well-known facilitators believed to hold
thousands of directorships in holding companies in various tax havens around the
world.
In eight of the companies, the biggest shareholders were found to be one Krishna
Shah, a resident of the English midlands city of Leicester, and his wife, three sons
and a daughter-in-law. In five companies, a couple called Praful and Nalini Shah,
living in Flushing, New York, were directors. Four companies had one or other of two
residents of Djibouti, Chimanlal and Jyoti Dhamani, on their board. Only in one
company, Tricot Investments were Indian names not on the board.
A mystified India Today reported that Krishna Shah was a former Leicester city
councillor, born in Kenya, who had come to Britain in 1959 and initially worked as a
train guard with British Rail, before opening his own shop and then setting up a small
knitwear factory which employed only five people. Shah told the magazine’s reporter
he knew nothing about any companies in the Isle of Man.
Someone in the companies was remarkably well informed on investment conditions
in India, however. On 20 August 1982, the RBI had lifted a Rs 1 00 000 ceiling on
share investments in any one company by non-resident Indians. Three days later,
three of the Isle of Man companies applied to the central bank to invest Rs 20 million
each in Reliance. Four other companies applied together on 24 September. Six
companies made their share purchases on the same day, 15 October, at the same
share price, which was a significant discount to the then market price.
While each company had paid-up capital of only ‚200, three of them had managed
to talk the European Asian Bank to lend identical sums of US$1.65 million to each,
through the bank’s branch in Colombo, Sri Lanka, on 26 October 1982. M three
bought Reliance shares at the same price, Rs 128.4 It was a sound piece of
investigation, but no link with Dhirubhai had been found and many questions
remained unanswered.
Had the reporters spread their questions wider in the Gujarati diaspora, they might
have discovered a very old connection. The leading name in Crocodile, Fiasco et al.
was the same Krishna Kant Shah and fellow student activist whom Dhirubhai had
helped spring from jail after the 1947 communal riot in Junagadh (see pp. 13-14).
After finishing his education, Shah had gone back to join the family business in
Kenya. In 1964 he moved to Britain on his own, working for an engineering company

for two years and then as a railway guard for eight years. In 1970 he quit British Rail
and set up his own shop in Leicester’s Hartingdon Road, selling hardware, saris,
utensils and religious statues, and living in a fat upstairs.
His customer base was the fellow Gujaratis then congregating in Leicester after their
expulsion from Uganda by Indian Admin at 48 hours notice in 1972, and the more
gradual squeeze out of Kenya by Jomo Kenyatta’s Africanisation of commerce. By the
mid- 1990s, about one-quarter of the city’s 400 000 population were immigrants,
about 80 000 of them South Asian. Almost all the 65 000 Hindus were Gujarati.
Shah was not very interested in making money from his fellow migrants. Instead he
sought their votes. In 1973 he got himself elected to the Leicester City Council,
becoming the first South Asian on a city council in Britain, and served for ten years.
‘He was not a great businessman,’ recalls S. B. Khandelwal, proprietor of the Sari
Mandir emporium in the city. ‘He would often close up shop early to go on council
business.’ Clearly, Shah did not have millions of dollars to put into Reliance shares,
or the financial knowledge to set up elaborate ownership arrangements through the
Isle of Man, where he had never been, or to take out loans from a foreign bank in Sri
Lanka to finance the purchase of shares in India through an Isle of Man company. He
had however kept in touch with Dhirubhai, and his wife Induben had become a friend
of wife Kokilaben. On trips to buy textile machinery in Britain, Dhirubhai would take
Shah along, while Shah introduced Reliance’s export manager Rathibhal Muchhala to
many of the South Asian retailers in Leicester. In 1972, Dhirubhai brought his wife
and children to Britain for a holiday and the two families spent some time together
Later that year Shah’s oldest son Sailash, who had just completed a diploma in
textile manufacturing, went off to a job at the Reliance factory in Naroda, where he
stayed five years before returning to Leicester to help his father set up the new knitwear business. In 1977, Dhirubhai provided two cars for Sailash’s wedding.
Krishna Kant Shah died in 1986, in the midst of a fresh controversy about the
mysterious Isle of Man companies. At a meeting in 1995, Sailash Shah maintained
there had been no business connection between his father and Dhirubhai. Asked how
it was that the Indian press and investigators had singled out his family as fronts,
he would say only. ‘I don’t know how.’ That Dhirubhai did have a connection with the
Isle of Man was indicated by the appearance in India during the mid-1990s of one
Peter Henwood. An accountant running a company in the Isle of Man capital,
Douglas, called International Trust Corp (later OCRA Ltd), Henwood had been
instrumental during the 1980s in arranging layers of ownership for offshore holdings
through several tax havens. Dhirubhai had become close to Henwood and his
attractive wife, on whom he showered expensive gifts.
Much later, Henwood tried to market his services to other Indian businessmen.
Dhirubhai became alarmed, and had Hen- wood followed on his visits to India. To
protect his business interests, Henwood consulted a leading firm of lawyers in India.
Over the years 1982 to 1984, Dhirubhai also met problems within the Reliance
family. In 1982, junior office staff in Bornbay petitioned the Reliance management
about low salaries and being obliged to work long hours and on holidays without
overtime pay. Then they attempted to join a trade union, the Mumbai Mazdoor
Sabha run by R. J. Mehta. Some 350 were dismissed without notice, ostensibly on
grounds of a ‘e organisation’, while others were transferred to Reliance offices in
Gujarat. The dismissed workers said muscle men had beaten up one activist and a
deputy personnel manager had waved a pistol at a typist.

In December 1983, Dhirubhai had hosted a special lunch for all his 12 000 factory
staff at Naroda to celebrate the wedding of his daughter Dipti to Dattaraj Salgaocar,
the heir to a prosperous iron ore mine in Goa. It was a love match-Raj Salgaocar had
been staying in the same apartment building in Bombay’s Altarnount Road as the
Ambanis when he met Dipti-but a prestigious one for Dhirubhai, just as he had
emerged as a tycoon himself.
The bonhomie at the wedding covered some mixed feelings on the factory floor. The
Naroda workforce was seething. Within a few months, the textile hands were
agitating for a wage increase, payment of overtime, and removal of contract labour.
Dhirubhai effectively nudged aside his elder brother Ramnikbhai from management
of Naroda, and put his younger son Anil in charge.
In August 1984, the company suspended 160 of its workers, and announced
formation of a company union, the Reliance Parivar Pratinidhi Sabha (Reliance Family
Representative Union), including 6700 workers and 1800 staff. ‘The concept of
unions has no place in our set up, ’the company’s general manager for personnel and
administration, H. N. Arora, told a newspaper. ‘He believes in participative
management.’s Agitation continued within the plant. On the morning of 28 August,
the company announced suddenly that work was stopping, and the plant was closed.
Squads of Gujarat state police and police reserves waiting at the gate stormed in and
charged the protesters with lathis (long wooden staves) and tear gas.
Dhirubhai rode out this episode, but with regret. Not only had he lost the earlier
affinity with his factory workforce, but arguments between Ramnikbhai Arnbani and
Anil had induced Dhirubhai’s elder brother to distance himself from the
company’soperations.6
The blazing success as Dhirubhai proceeded to his triumphant general meeting in
May 1985 carried some dark shadows. Many of those who opposed him had been
crushed in ruthless displays of the state power he could manipulate: the police lathis
and tear gas that fell on his own workers, the tariff changes and tax raids that hit his
business rivals, or the ignominious transfers given to civil servants who held up his
plans.
The opposition parties had been alerted to his connections with the ruling Congress
Party and Indira Gandhi’s office. The very resistance met by any query about
Reliance only encouraged politicians like Janata’s Madhu Dandavate, the Marxists’s
Somnath Chatterjee or the Bharatiya Janata Party’s Jaswant Singh to press harder.
Dhirubhai had a growing list of critics, and enemies to feed them questions. It only
required a sudden removal of his high-level protection for his complex fast-growth
operation to be dangerously exposed.

The Great Polyester War
On 23 November 1985, Bombay’s sensation-seeking weekly tabloid Blitz came out
with a cover story that soon had more than the usual crowds browsing at the
newsstands. ‘IT’S MAHAPOLYESTER WAR,’ shouted the front-page headline. ‘It’s a
Mahabharata War, or rather, Mahapolyester War-in Indian big business style,’s
began a lengthy report that took up the whole of the front page, and spilled into two
full inside pages.
‘There are only Kauravas, no Pandavas, and no Lord Krishna. The reason is that none
is without blemish. The fight is neither for inheriting the earth nor the heaven, but
for one of the most lucrative industrial markets-that is, polyester filament yarn,
where profits soar around Rs 80 to Rs 100 per kg.’ Not only that. Blitz told readers in
a front-page subheading: ‘The Mahapolyester War goes beyond the industry to
apocryphal stories involving serious political repercussions.’
According to New Delhi’s grapevine, the old Pranab-Dhawan-Ambani axis responsible
for Reliance’s booming fortunes is currently reorganising its scattered forces with V P
Singh, the Finance Minister, as its principal target.’s Pictured as contestants in this
dark war without heroes were - Dhirubhai, along with two competing textile
magnates: Kapal Mehra of Orkay Silk Mills and Nusli Wadia of Bombay Dyeing.
Among these Kauravas fighting each other, Reliance (Dhirubhai Arnbani) and Orkay
(Kapal Mehra) are the principal combatants, with Bombay Dyeing (Nusli Wadia) on
the sidelines. Thanks to Reliance and its vast patronage and money power, Orkay
got the wrong end of the sword, with the result that the patriarch of the family spent
Diwali in jail after five attempts to ball him out had failed.’ Blitz’s editor, Russy
Karanjia, was right that a corporate war was about to spill over into politics. But his
article was wrong about the main battle. Kapal Mehra had just spent 15 days in jail
over the festival of lights (Diwali) marking the new year in the Hindu calendar. He
was facing massive penalties on charges of evading excise and customs duty. Earlier,
his son had been abducted near Orkay’s Patalganga factory, beaten up and dumped
in a drainage ditch some miles away. Mehra was already knocked out of the combat.
In the bigger fight just warming up, Nusli Wadia was opposing gladiator. And while
Wadia was bleeding, Dhirubhai was on the back foot. After his accolades at the
Reliance shareholders’ meeting in the Cooperage Football Grounds in May and the
oversubscription of the Rs 2.7 billion F series of debentures in June, things had
started to go badly wrong for him in the second half of 1985.
But Blitz was correct in painting this fight over a mundane textile and its chemical
inputs with the colours of an epic. It went on for years, reached to the highest levels
of politics, dragged in some of India’s best talents, sullied some of them and made
heroes of others, and caused governments to fall. Far from being a tabloid beat-up,
the Great Polyester War was central to Indian politics, for critical years in the 1980sto the point where one former minister in the central government could state, with
only a little exaggeration, that the course of Indian politics is decided by the price of
DMT [dimethyl terephtbalate]. According to stories put out by Reliance sympathisers
over the years, the war began with a snub.
Back in the late 1960s and early 1970s, the social gap between Dhirubhai and Nusli
Wadia could not have been much wider for two people in the same industry
Dhirubhai was a paan (betel nut) chewing trader roaming from client to client in

Pydhonic to sell his polyester and nylon yarns, flashy in personal tastes, and with a
small-town Gujarati social background.
In Bombay, Nusli Wadia was Establishment. The Wadia family were Parsi, followers
of the ancient Zoroastrian religion in Persia who had fed to the west coast of India in
the 10th century AD to escape forcible conversion to Islam. In the 18th century, the
Wadias had become shipbuilders to the East India Company in Surat, constructing
the famous company sailing ships known as ‘Indiamen’s which carried cargoes of
calico, silk, tea, indigo and opium in their capacious holds, and rows of cannon in gun
ports along their sides to fight off pirates or force their way into China’s ports.
When British commerce shifted to Bombay, the Wadias followed and joined India’s
first wave of modern industrialisation. In 1879, they set up Bombay Dyeing &Manufacturing Co, which moved from dyeing of cotton yarn into spinning the yarn
and then into weaving of cotton textiles. Under Nusli Wadia’s father, Neville Wadia,
chairman between 1952 and 1977, the company continued to modernise, and
became one of India’s largest textile manufacturers and exporters.
Like many Parsi families, they adopted English ways in speech, dress and social
behaviour. Although their agiaries (fire-temples) and towers of silence (grounds for
open-air burial) were forbidden to others, the Parsis have long been a cosmopolitan
element in Bombay and intermarriage with members of other Indian communities or
foreigners was common. Nevillie Wadia had married the daughter of Mohammad Ali
Jinnah, leader of the Muslim League in pre-independence India. Before 1947, Jonah’s
family lived in a big house on Bombay’s Malabar Hill, though Jinnah was to move to
the newly created Pakistan of his dreams after the Partition, dying there within a
month of its creation. Nusli Wadia had been born with all the advantages, and had
been educated at schools in Britain. Like his father, Nusli held British citizenship and
traveled widely. As Dhirubhai was beginning his climb up from the yarn market, Nusli
had just returned to join the family business. He was in his mid-twenties-some 12
years younger than Dhirubhai handsome in an acquiline way, dressed in quiet but
classic English fashion, and always cuttingly direct in his impeccable English. He
moved around in a foreign sedan between the family’s waterfront mansion and the
company’s turn-of-the-century stone office building, Neville House, in the grandly
laid out old business district of Bombay, Ballard Estate.
The Parsis, like many colonial elites, went through a crisis of self-esteem when the
colonial power went home without them. Their own self-image became one of failure,
eccentricity and emasculation. The younger Wadia was the great exception. He was
anything but inclined to relax and live off inherited wealth. In 1971, his father
wanted to sell off the company to the Calcutta-based Marwari tycoon Rama Prasad
Goenka and retire abroad. Nusli Wadia, then 26, enlisted the support of the Tata
patriarch J. R. D. Tata to help in a shareholders’s battle against the sale, and rallied
700 employees in an offer of a staff buy-out of some shares. His father dropped the
sale, and after handing the company over to Nusli in 1977 settled in Switzerland.
It was the first of many battles in which Nusli Wadia showed his remarkable fighting
capacity when he felt his own vital interests, or those of friends who sought his help,
under threat. Wadia was never inclined to take a public stage. He did not join
business associations and appear constantly at conferences and seminars like many
other big businessmen, or host lavish parties in hotels. He avoided the press. But he
developed a wide circle of friends and contacts that came to appreciate his fearless

advice. Among them were tycoons many years his senior, like Tata and later the
press baron Ramnath Goenka of the Indian express.
The Ambani version of the snub is that Wadia simply refused to buy C. Itoh yarn
from Dhirubhai, for reasons that are not explained. Another variation is that Wadia
kept Dhirubhai cooling his heels in the corridors of Bombay Dyeing. A more elaborate
version is that Dhirubhai called on Wadia at Neville House during the early 1970s,
and made a presentation about the superior quality of his C. Itoh yarn. Wadia
questioned the backing for this claim, whereupon Dhirubhai pulled out a copy of a
test report made by Bombay Dyeing’s own laboratory for internal company use.
Wadia, according to this version, told Dhirubhai that next he would find Reliance
telling his laboratory what to report, and that he would not deal with him.
Dhirubhai has not mentioned this incident, and Wadia has told inquirers he has no
memory of it or any other such encounter with Dhirubhai, though he could not
completely exclude it as a possibility. Whatever the case, Dhirubhai clearly felt put
down and, according to many later articles by friendly writers, nursed the hope that
one day he would have Wadia coming to him as a supplicant. The industrial rivalry
developed after Wadia took over from his father at Bombay Dyeing and started
moves to get the old cotton mill directly into the polyester production chain itself. In
1978, Bombay Dyeing applied to New Delhi for a licence to set up a DMT plant, and
in December that year it received a ‘Letter of intent’(a preliminary approval) for a 60
000 tonne a year DMT plant to be located at Patalganga.
It was a move that would have leapfrogged Bombay Dyeing past Reliance up the
petrochemical chain. At the time, Dhirubhai was just moving towards applying for a
licence to make polyester yarn, using DMT as his initial feedstock. Bombay Dyeing
would have become one of only three domestic sources of the chemical, along with
Indian Petrochemicals Ltd near Bombay and the Bongaigaon refinery in the eastern
state of Assam. Wadia would have been in a position to apply Dhirubhai’s own trick
of calling down higher tariff protection and then squeezing a bigger profit out of
dependent clients-who would include the new Reliance plant.
Though he was not close to the prime minister, Morarji Desai, Nusli Wadia had a
good image with the Janata government, partly through connections in the Hindu
nationalist party in the ruling coalition, the Jana Sangh, predecessor of the Bharatiya
Janata Party. The Scindia family, one of the great Maratha ruling families and
hereditary maharajas of Gwalior in central India, had had a business relationship
with the Wadias through an investment company that gave them indirectly a minor
share holding in Bombay Dyeing. Madhavrao Scindia, the cricket-playing scion of the
family had entered parliament with the Jana Sangh before crossing to Congress,
where he later flourished as a minister. But as the months wore on in 1979, nothing
happened with Bombay Dyeing’s license, which normally followed about six months
after the letter of intent. Then the Janata government fell, and new elections were
called.
Not long before the vote, Wadia received an invitation to come to New Delhi late in
1979 to meet Indira Gandhi and her son Sanjay. He arrived in the capital with some
presentation copies of Bombay Dyeing’s new corporate history, marking its
centenary year, which he felt might be of interest particularly as Gandhi’s late
husband Firoze Gandhi had also been a Parsi. Wadia was directed first to meet
Sanjay Gandhi, who made a blunt demand for a political donation. Wadia demurred.
‘‘s sorry, we just don’t do that,’ he said. ‘None of us - the Tatas, the Mahindras, us --

give money to political parties. We do not have black income. It’s just not something
we do.’ On being shown in to Mrs. Indira Gandhi, and having presented the company
history, Wadia broke the subject directly. He knew the reason he had been
summoned, but really it was not the way his company operated. He talked on, and
then noticed Indira was doodling on papers on her desk, looking away. Wadia took
his leave, and received a curt nod from Indira Gandhi.
Two or three months after the Congress win in early January 1980, Wadia again
received a call to New Delhi from Sanjay Gandhi. Having endured imprisonment and
sustained invective for his Emergency excesses during the Janata period, Sanjay was
now even more firmly ensconced as Indira’s Crown Prince. From being a wielder of
authority delegated to him by his mother he had now become her partner in power,’
wrote the commentator Inder Malhotra. ‘…At this time Sanjay’s power was at its
zenith and practically irresistible. Ministers and top civil servants vied with one
another to do his bidding, however arbitrary Those having qualms about this soon
found themselves in trouble; politicians were sidelined and “recalcitrant” bureaucrats
were summarily removed from their positions, humiliated and often kept waiting for
months for alternate, usually inconsequential, postings.’
‘You lied,’ Sanjay greeted Wadia. ‘Tata and Mahindra have paid.’ This was almost
certainly a bluff. Mahindra, another big Parsi company, which made Jeeps and
machinery, and Tata were unlikely to risk their reputations by illicit payments,
certainly from their central managements. But many years later, sources close to the
Congress Party insisted that some contributions had indeed gone to Indira Gandhi
from the Tata group’s flagship, the Tata Iron &- Steel Co then under one of the most
powerful ‘barons’ in the loosely held Tata empire, Russi Mody. It was clear that
Wadia would get his licence only one way. A few months later, however, Sanjay
Gandhi was abruptly removed from the scene. Sanjay had been accustomed to
venting his energy by taking up a light aircraft for acrobatics over New Delhi, using a
plane imported duty-free by a Hindu guru, Dhirendra Brahmachari, another
controversial addition to Indira’s inner circle. On the morning of 23 June 1980, the
plane crashed into a wooded area in New Delhi, killing Sanjay instantly.
The state funeral was marked by excesses of sycophancy, though expressions of
relief were voiced in many quarters all over India. Indira allowed a posthumous
personality cult to be constructed around her late son-but then realised the
beneficiary of this would be Sanjay’s widow Maneka, whom Indira detested. This
speeded up the political induction of Indira’s eldest son Rajiv, who had been working
as a pilot with Indian Airlines and keeping out of public attention as much as he
could. Rajiv had strong misgivings about entering politics, and his Italian-born wife
Sonia opposed it, though she and Indira got on well. But at the end of 1980, Rajiv
left his airline job and adopted the uniform of politics, the Indian-style kurta-pyjama
suit, to become his mother’s principal secretary. In June 1981, Rajiv was elected to
parliament from his brother’s constituency and made a General Secretary of the
Congress Party at the end of the year. It was to Rajiv Gandhi that Wadia turned for
help to unblock his licence, some months after Sanjay’s death. Rajiv was
sympathetic to his complaint. If injustice has been done to you, I will see that justice
is done,’s he promised.
Some time later, they met again and Rajiv said he was meeting extraordinary
resistance to his inquiries, in particular from Indira’s private secretary R. C. Dhawan
and from the Congress Member of Parliament (later Home Minister) R C. Sethi. But
Rajiv’s efforts eventually succeeded, and in June 1981 Bombay Dyeing received its

licence for the DMT plant-two and a half years after the letter of intent. Wadia still
met obstacles. Bombay Dyeing bought a DMT plant second-hand from an American
company, Hercofna, and had it dismantled and shipped to India in two consignments
at the end of 1981. When the shipments arrived in Bombay, the company could not
get them cleared by Customs for nearly four weeks. Bombay’s Collector of Customs,
S. Srinivasan, then ordered a rare 100 per cent inspection of all contents. On leaving
the Customs service some years later, Srinivasan was retained as an adviser by
Reliance.
Dhirubhai continued to enjoy beneficial policy changes throughout the rest of Indira’s
second prime ministership, thanks to the influence of friends like Finance Minister
Pranab Mukherjee and Indira’s secretary R. K. Dhawan. After the raising of duty on
polyester yarn just after his Patalganga plant became operational, licences for
expansion came promptly after lodgment of applications. In three months, August to
October 1984, Reliance was given letters of intent for a 75 000 tonne a year purified
teraphtbalic acid (PTA) plant at Patalganga, plus a 450,00 tonne a year polyester
staple fibre plant, and a 40,000 tonne a year monoethylene glycol plant. In addition,
the fait accompli of its 25 125 tonne polyester filament yarn plant was
retrospectively endorsed by raising the permitted capacity from 12 000 tonnes.
Small wonder that the magazine Sunday (also of the Ananda Bazar Patrika group)
reported the Reliance bonanza under the headline ‘Pranab Mukherjee’s Slogan: Only
Vimal.’
The Reliance move into PTA production gave a big clue to the source of Bombay
Dyeing’s problems, as it showed Dhirubhai was also moving up the petrochemical
stream to establish himself as a rival feedstock supplier to the fast-growing polyester
industry At that stage, no one else was making PTA. According to background notes
circulated in 1985 by Reliance, Dhirubhai had already begun switching his Patalganga
yarn plant over to PTA feedstock and had completed the conversion during the first
quarter of 1984. At that point, the Petroleum Ministry and the Industry Ministry had
been notified, and Reliance cleared to import its requirements of PTA. Out of the 13
polyester units then in production, four others also began to use PTA for part of their
feedstock requirements.
As we have noted, PTA was a substitute feedstock for DMT in the production of
polyester. Both are usually made from the chemical paraxylene, which in turn is
produced by cracking the flammable liquid hydrocarbon naphtha, found in natural
gas and petroleum liquids. Each feedstock had its advantages and disadvantages.
DMT had been in use longer, and needed less expensive containment vessels and
piping in the plant, but in the polyester process it produced the toxic alcohol
methanol as a by-product, for which a recovery system was needed. I-TA, first made
by ICI in 1949 and by Du Pont in 1953, required a more sophisticated purification
process, corrosion-resistant equipment and more stringent control of catalyst mixing,
but in polyester production gave a better yield to the paraxylene and MEG inputs. In
practice, most polyester fibre plants were able to use either DMT or PTA with minor
adjustments that could be made within a few months.
The licensing delays added to the cost of Bombay Dyeing’s DMT plant, and it took
Wadia more than three years to get it reconstructed and operational at Patalganga.
But when it started production in April 1985 it was still a low-cost entry into a
product that became the mainstay of Bombay Dyeing’s sound profitability through to
the late 1990s. Up until then, the only domestic supplier of DMT was governmentowned Indian Petrochemicals, which made 30 000 tonnes a year against an

estimated demand of 80 000 tonnes of DMT/PTA by Indian polyester producers in
1984. By the end of 1985, polyester output was expected to jump to about 150 000
tonnes, requiring 160 000 tonnes of either DMT or PTA.
From April 1985 Bombay Dyeing would be well-placed to capture this market, in
competition with Indian Petrochemicals and with the other government-owned
producer, Bongaigaon Refinery &- Petrochemicals, which began its 45 000 tonne a
year production in July 1985. But if Reliance started using PTA and managed to
persuade many other polyester producers to do the same, the new DMT capacity
risked redundancy. As Wadia got his plant into operation in 1985, he encountered a
sustained stream of press commentary describing his second- hand DMT plant as
‘junk’s and DMT itself as an obsolete feedstock that would soon give way to the more
modern PTA. Many of these comments appeared under the by-lines of those
journalists who later became known as core members of the Reliance ‘Dirty Dozen’s
in the press.
Dhirubhai, as we have seen, was then in his most triumphant phase in the eyes of
his investor public. But his political support had been drastically undercut, though it
was not to become evident until later in 1985, when the struggle for supremacy in
the polyester industry became a more evenly balanced, tooth- and-nail fight. The
cause was another violent death in the Gandhi family. At the beginning of June 1984,
Indira Gandhi had ordered the Indian Army into the Golden Temple in Amritsar, the
holiest temple of the Sikh religion, to clear out the Sikh fundamentalist Bhindranwale
- a monster she herself had helped create by promoting him as a rival to the Akali
Dal, a Sikh party which consistently outpolled Congress in the Punjab. The battle
raged for several days, and eventually the army used tanks and artillery to subdue
Bhindranwale’s well fortified rebels. The Golden Temple itself was damaged, and
important adjoining buildings destroyed. Sikhs felt their holiest shrine had been
defied by violence. On the morning of 31 October 1985, Indira walked into her
garden and was shot at close range by two Sikhs in her bodyguard.
Her surviving son Rajiv was sworn in as prime minister later the same day by the
President, Giani Zail Singh, and confirmed by the Congress Party soon after Indira’s
funeral. Elections were due early in 1985 on the expiry of Indira’s five-year mandate
in any case; Rajiv brought them forward to early December, and received the benefit
of a massive sympathy wave, lifting the Congress share of the vote to 49.1 per cent
(from 42.3 per cent in December 1979) and winning an unprecedented 401 seats
(soon boosted to 415 in by-elections) out of the 545 in the Lok Sabha.
Despite his affection for his mother, Rajiv had been distant long enough from
Congress circles to pick up the deep resentment on the part of many Indians at the
pervasive corruption she had engendered. But for the sympathy vote, Congress
might even have lost the elections, had its diverse opponents worked together. As an
aviator and enthusiastic computer buff with many friends working in North America
and Europe, Rajiv was also aware of how new technology was helping to sweep aside
regulatory regimes and empower individuals elsewhere in the world. He decided
India and its politics needed to be opened up. But an element of hubris quickly crept
in as well: Rajiv soon came to believe that the sympathy vote was actually
enthusiasm for himself and his barely understood policies.
Among the first casualties were key friends of Dhirubhai. Rajiv sacked R. K. Dhawan
from the prime minister’s office within hours of his appointment. And in his first
cabinet he replaced Pranab Mukherjee as finance minister with V P Singh, a choice

that was eventually to bring down the heavens on both Dhirubhai and then Rajiv
himself. Vishwanath Pratap Singh was to become one of India’s most controversial
politicians. He inspired enormous trust and hope in some sections of society, intense
hatred as an opportunist and class traitor in others, and ultimately a lot of
disappointment and disillusionment.
His childhood shaped him as the loner he became in politics. At the age of five, he
was given by his natural parents in adoption to the childless Raja of Manda, one of
the small principalities in Uttar Pradesh. He grew up amusing himself in the raja’s
ram shackle palace, and spent long spells in boarding schools. The raja was an
alcoholic, despondent man dying slowly of tuberculosis whom Singh was allowed to
see for five minutes a day, sitting at a distance to avoid infection. At school when he
was nine, Singh was approached by another boy who gave him an ice-cream. ‘You
don’t know me, but I am your elder brother,’s the boy said. And don’t tell anyone at
home that you met me, or else they’ll move you to another school.’ Singh passed
into the care of a guardian at the age of 11 when the raja died, and some years later
was taken back, much against his own will, by his natural parents. He studied law
and later physics with an eye to joining India’s atomic energy research centre in
Bombay, but settled on politics at the age of 38 when he won a Congress ticket to
stand for the Uttar Pradesh state assembly.
In the Emergency he stood by Indira and Sanjay, and on Indira’s return was installed
as UP’s chief minister. He was efficient and honest, but attracted most notice by
giving police informal powers of summary justice to deal with the banditry sweeping
the state. About 2000 alleged criminals died in encounters with police. It was a
sample of the ruthlessness Singh could show. But it was counterposed with a
diffident streak to his character. A dabbler in painting and poetry, Singh often
withdrew into himself. At critical moments, he would hesitate to commit himself. His
most heroic roles were forced upon him.
As Rajiv’s finance minister, Singh applied a carrot and stick approach to taxation. In
his first budget, at the end of February 1985 for the year starting 1 April, Singh
slashed income tax rates and wealth tax, and abolished death duty. Industrial
licensing laws were also relaxed and investment approvals streamlined. This new
wave of reform sparked a stock market boom.
But business circles were less happy from mid-year when Singh began applying his
second budget promise. The counterpart of lower tax rates, he had warned, would be
stricter enforcement. The agencies under the Ministry of Finance that police the
economic laws began raids and inspections against some of India’s best-known
business houses for allegedly evading excise, concealing income, or keeping funds
offshore. The targets included the Tata group’s Voltas Ltd, the tea from Brooke Bond,
the shoemaker Bata, the liquor magnate Vijay Mallya, diamond dealers, and
manufacturers of textiles, motor tyres and cigarettes. Orkay Silk Mills, the other
polyester maker at Patalganga, was assessed as owing Rs 105 million in evaded
excise and fines. Its owner, Kapal Mehra, was personally fined Rs 5 million. Among
those arrested for alleged foreign exchange violations were the paper and chemicals
tycoon Lalit Mohan Thapar, and the 82-year-old machinery entrepreneur Shantanu
Kirloskar. No one felt safe from Singh’s inspectors.
Rajiv’s new broom was also sweeping closer to Dhirubhai. As his DMT plant moved
closer to production, Nusli Wadia had been lobbying hard for greater protection
against imports of DMT and PTA. In particular, he argued that trade policy should

support the big investment in domestic DMT capacity by Bombay Dyeing and the two
state producers. Mowing a switch to PTA meant a loss of foreign exchange on
imports that could be substituted domestically.
A secret level note circulated by the head of the Petroleum Ministry, G. V
Ramakrishna, on 16 May 1985 to Rajiv’s economic adviser, Montek Singh Ahluwalia,
and the Finance Secretary, S. Venkataramanan, discussed Bombay Dyeing’s plea for
greater protection for DMT At that time, both PTA and DMT attracted a customs duty
of 100 per cent plus an auxiliary duty of 40 per cent. PTA could be imported on the
open general list (without licence) while DMT was on the ‘limited permissible list’s
meaning that imports needed prior government permission after verification to see
that domestic competitors were not damaged. Bombay Dyeing asked for PTA to be
shifted also to the limited permissible category and for basic customs duty on both to
be lifted to 150 per cent.
Ramakrishna said his ministry had examined the request and was recommending
that the first measure be adopted that PTA be removed from the freely importable
list. But in view of this and other comparative cost considerations, the ministry did
not see any need to increase import duty on PTA and DMT Thus, as Dhirubhai was
holding his open-air shareholders’ meeting in Bombay on 20 May 1985, the
government was moving towards a decision that would have a drastic effect on
Reliance’s production, and possibly force it to use DMT from Nusli Wadia’s DMT plant.
On 29 May, the government announced that PTA was placed on the controlled import
list with immediate effect.
Dhirubhai was not worried. For a 90-day grace period from 29 May, the government
said it would allow those PTA imports for which irrevocable letters of credit had been
opened against from contracts by 29 May. It emerged that, by the time of the
notification on that date, Reliance had opened such letters of credit for 114 000
tonnes of PTA - more than enough to supply its existing and planned polyester
capacity through to the opening of its own PTA plant expected at the end of 1986.
Moreover, the letters of credit had been opened in a burst of frenetic activity with
several banks over 27 to 29 May, up to a few hours before the import policy change
was announced. One revolving credit from Canara Bank for 2000 tonnes of PTA a
month up to 30 June 1985 had been enhanced on 29 May itself to pay for 12 000
tonnes, and the shipment date extended to 30 June 1986. Letters of credit were
taken out also with the foreign banks Societe General, Banque Indo Suez and
Standard Chartered Bank on contracts signed some months earlier, for a further 42
000 tonnes.
On 27 May, Reliance had got an entirely new contract for 50 000 tonnes of PTA
registered with the Petroleum Ministry in New Delhi, and covered the same day by
letters of credit from Standard Chartered Bank, Societe General and the State Bank
of India at their Bombay offices. The Exchange Control Manual for banks in India
required importers to submit original copies of registered contracts before letters of
credit could be opened. Getting this all done during office hours in one day between
New Delhi and Bombay seemed a miracle of logistics.
The government was unhappy to learn that its policy change to protect the domestic
DMT industry had been so stunningly thwarted. It was even angrier as it learnt the
details of the three-day Reliance rush to open letters of credit, suggesting the
possibility that the pending policy change had been leaked to the company.

Authorities told Reliance that the 90-day grace period would be enforced: A the 114
000 tonnes of PTA would have to be landed by 30 September.
Some 14 000 tonnes having arrived, Reliance took the government to court about
the remaining 100 000 tonnes, arguing that the cut-off date was arbitrary and in
violation of the implicit three-year guarantee of stability in import policies prior to 29
May. It also argued that it had switched over to M, and that to go back to DMT as a
feedstock would require crores of rupees (one crore = 10 million rupees) plus new
equipment and take several months.
A single judge in the Bombay High Court awarded Reliance a stay on the
government’s decision, and authorised the company to import 5000 tonnes which
were already available for shipment. For the remaining 95 000 tonnes, the company
should approach the government for a supplementary licence - on which the
government should decide by 31 October, failing which Reliance could revert to the
court for further interim relief.
The government appealed against this order to a more senior bench of two judges in
the High Court. While waiting a hearing, the import duty on DMT and PTA was raised
a further 50 percentage points to a total 190 per cent. This did not deter Dhirubhai,
as international market prices of the two feed stocks were falling rapidly. In court on
28 October, the government argued against the clearance of the 5000 tonnes
permitted by the lower court, and for removal of the 31 October deadline for the
remaining 95,000 tonnes. The bench dismissed the appeal, but agreed to stay
clearance of the 5000 tonnes-the shipment was due in Bombay the next day--for
seven days to allow the government to appeal to the Supreme Court.
This the government did. On 4 November, the Supreme Court decided to allow
Reliance to clear the 5000 tonnes of PTA but not to use it pending settlement. The
government was given three weeks to make its case and Reliance a week after that
to respond, with the High Court to make a final decision within December.
In the background of the litigation, Reliance kept feeding the press with accounts of
the allegedly unacceptable quality of Bombay Dyeing’s DMT, made at its ‘secondhand plant’. A small polyester producer called Swadeshi Polytex had told the Industry
Ministry’s Director-General of Technical Development about defects in a 68-tonne
DMT shipment from Bombay Dyeing: sacks supposed to contain DMT pellets were 20
to 80 percent powder, black particles were found in the pellets, bits of thread, metal
and wood were found in the bags, and so on. The picture painted was of Bombay
Dyeing pumping out filth from a wheezing, obsolete plant, and angling for massive
protection so it could jack up prices to struggling yarn makers. The lobbying and
propaganda war became frenetic in early November. Reliance issued press notes
which played up the cost and difficulty of switching polyester plants back from PTA to
DMT it was like modifying a diesel engine to run on petrol. The modification would
involve huge expenditure and take nine to 12 months. Another note put the
investment at Rs 58.6 million (then about US$4.6 million) and the time at 12 to 15
months. If Reliance could not get its PTA, work would stop, with huge numbers of
workers laid off. On 2 November, another polyester producer J. K. Synthetics
actually announced it was suspending production at its plant in Iota because it was
unable to get an import licence for PTA.
The private war got dirtier. According to the Bombay tabloid Blitz, two campaign
briefs were circulated by the Reliance office in New Delhi among MPs, officials and

others. Orkay was accused of pledging the same stock with banks several times to
get loans, issuing bogus bills, claiming tax rebates on non-existent production, and
under-invoicing imports of polyester chips to evade duty. With his earlier excise
evasion case still being beard, Orkay Silk Mills’ Mehra was arrested on 1 November
1985 on another charge. He had allegedly evaded Rs 15 million in duties on
polyester chip imports in 1982 and 1983, by under-invoicing the imports from C.
Itoh in Japan, according to voluminous documentary evidence collected by the
Directorate of Revenue Intelligence from Japan a few days earlier. Mehra had bought
the material 7.5 per cent below the regular price: evidence of under- invoicing
according to the policers, just a trade discount according to Mehra.
Mehra’s counsel, Ram Jethmalani, said a rival tycoon had instigated the raids to
sabotage a share issue financing Orkay’s expansion. Later it was noted that
Dhirubhai had been in Japan not long before, visiting among others C. Itoh & Co,
which had been accustomed to rivinz Reliance a 20 per cent discount on polyester
yarn sales. Whatever the case, Mehra spent 15 days in jail before obtaining bailmissing the Diwali festivities and for years was contesting claims for evaded excise
and duty and personal fines. The other target of the Reliance briefs was Bombay
Dyeing. It had been getting import policy on PTA and DMT changed to help it out of
the total mess created by its decision to buy a DMT plant originally built in 1953. The
1977 price of Rs 300 million had ballooned to nearly Rs 1 billion by the time it was
reassembled. What else can be expected from a junk [sic]? , the Reliance note said.
Wadia also came under personal attack: a story put out by the news agency United
News of India quoted official sources alleging Wadia and his wife were involved in a
fraudulent deal to sell land belonging to a Parsi trust of which they were trustees.
But Dhirubhai was now fighting on two new fronts, as well as the legal battle for his
PTA imports. On 26 October, newspapers had begun reporting that the Central
Bureau of Investigation-New Delhi’s highest criminal investigation body which deals
principally with corruption cases-had begun inquiries into the possible leak of the
decision to put PTA on the restricted import list in May. A few days later, Finance
Minister V P Singh denied that he had ordered any inquiry, but newspapers reported
moves at official level in concerned ministries including Finance for an investigation.
For its part, Reliance said it was not aware of being under investigation, and put out
lengthy written explanations as to why its import contracts in May had coincidentally
preceded the policy change. The 50,000 tonne PTA contract approved by the
Petroleum Ministry on 27 May had been submitted to it on 14 May. The quantities it
sought to import were not in excess of its own use over the 18 months until its own
PTA plant opened, nor could Reliance conceivably hope to evade the September duty
hike. Reliance was a victim of ‘mischievous propaganda’s the allegations were based
on tailored facts and twisted information circulated by vested interests too obvious to
name’.
On 29 October, however, Reliance took another blow which showed conclusively that
the Finance Ministry was no longer a friend. On that day, the Assistant Collector of
Central Excise at Kalyan, covering Patalganga, presented the company with a show
cause notice claiming Reliance had evaded a total of Rs 272.34 million (then about
US$21.8 million) in excise on polyester production since October 1982 by underreporting production and misdeclaring waste. Backed by nine pages of annexure
giving the details of the polyester manufacturing process, the notice invited Reliance
to argue why it should not be forced to pay the Rs 272.34 million, have its factory

confiscated, and pay an additional penalty for evasion. It was the biggest excise
evasion charge in Indian corporate history and, even discounting the ambit nature of
the Assistant Collector’s proposed penalty, a big threat to the profit line in the
Reliance results.
The company affected not to be worried. A press release on 15 November described
the show-cause notice as routine and noted that similar notices had been issued to
other manufacturers in the Thane area, including Sandoz, Orkay, Voltas, and Indian
Explosives. It was all part of a drive to raise revenue. The claim against Reliance was
based on theoretical calculations and assumed technical information, the company
said. ‘The notice was issued in the normal course of business and the company would
soon be fling a reply and expected no liability to arise out of the show-cause.s But
Dhirubhai was sweating. On 26 November it was revealed that a compromise on the
PTA imports was being worked out. The government would allow actual users of PTA
to import their own requirements for six months ahead, but would not allow existing
users of DMT to switch over and import PTA. Mean- while, the Bureau of Industrial
Costs and Prices would commence a study of DMT costs, to help regulate prices so
that domestic DMT had a cost advantage over imported PTA. The condition for
Reliance getting import licences, it was suggested, was to drop its High Court action.
It could hardly argue. By this stage, too much corporate blood had been spilt for the
dispute to be papered over and forgotten like so many controversies before. Kapal
Mehra had been jailed and humiliated. Nusli Wadia, despite the tariff and quota
protection given to domestic DMT producers, had been forced to close his new plant
for months because of the feedstock glut that Dhirubhai had engineered by the PTA
imports he had managed to get through, and by the constant denigration of his
product. Dhirubhai had meanwhile lost his key lieutenant in charge of public relations
and government contacts. On 30 August, his nephew and Reliance director Rasikbhai
Meswani had died suddenly. It took some years for other publicists and lobbyists to
take his place. As 1985 drew to a close, Dhirubhai was being openly written against
as a monster threatening Indian democracy. Blitz observed:
If the allegations against Dhirubhai Ambani and Reliance are proved, whether in the
matter of evasion or in the alleged fraud of letters of credit opened with two foreign
and three Indian banks for the import of PTA, then the conclusion becomes
inescapable that, since 1969, a single industrialist had been literally dictating the
government’s textile and import policies and manoeuvring. import rules to will his
rivals and maintain his lead in the market The challenge to State Power lies in the
accumulated wealth and economic clout in the hands of an individual who is neither
an elected representative nor accountable to the people, who could manipulate
Cabinet ministers as wed as party chiefs. Economic power goes hand in hand with its
political counterpart, resulting in manipulating politicians and ministers’s right to the
top of the top. AN this and more has put a new regime seeking to cleanse the
Augean stables of the corporate sector in an extremely vulnerable position for its
daring to challenge one of the biggest industrial empires with a Rs 27 crore showcause notice. One can only wish Finance Minister V P Singh good luck with the danda
[stick] now that the carrot has been spumed. Though he had limited contact with V P
Singh - confined to direct industrial concerns Nusli Wadia had kept up his ties with
Rajiv Gandhi and can be expected to have voiced similar concerns to those of Blitz
about the impunity with which Reliance had operated.
At that point Rajiv was still freed with zeal to cleanse the Augean stables as well.
When Congress Party delegates gathered in Bombay at the end of December to mark
the centenary of the party’s founding, Rajiv delivered a stinging attack on its

corruption. On the backs of ordinary party workers rode the ‘brokers of power and
influence, who dispense patronage to convert a mass movement into a feudal
oligarchy. Rajiv attacked the legions of tax-dodgers in Indian companies, and the
government servants who do not uphold the law, who shield the guilty, tax collectors
who do not collect taxes but connive with those who cheat the state. But industrial
empires built on excessive protection, social irresponsibility, import orientation and
corruption might not last long. The Great Polyester War had been lifted out of the
factories of Patalganga and from the Pydhonie yarn market to the national arena.

THE PAPER TIGER
It was at this stage that the Polyester War was joined by an entirely new set of
combatants. It became a life-and-death struggle for company and the critical test of
Rajiv Gandhi’s efforts to clean up the Indian Government. Dhirubhai survived. Rajiv
failed, and lost power as a result. The new element was Seth (Master) Ramnath
Goenka the legendary Indian newspaper tycoon. From a Marwari trading background
in Calcutta, Goenka had moved to the southern city of Madras in the 1920saccording to some accounts, at the instigation of his own family, as even they found
him too hard to work with-and begun building up the chain of English-language
newspapers put under a common Indian Express masthead in the 1950s. By 1985,
the Express had India’s biggest newspaper circulation, 670000, from 12 regional
editions.
Inclined to the Jana Sangh and critical of Congress, though never committed either
way, Goenka was happiest in an opposition role, exposing cant and corruption. Like
most Marwaris, Goenka was a strict vegetarian, but he did not shrink from drawing
blood in print. In the 1950s, he had employed Indira’s husband Firoze Gandhi and
encouraged his exposure of the Mundhra scandal. The Express had been one of the
few newspapers to resist the censorship imposed by Indira during the Emergency all
kinds of pressures including a move to demolish its New Delhi buildings for alleged
building code violations. Ultimately, Indira had baulked at closing him down-some
say because Goenka threatened to publish private papers of her late husband about
their unhappy marriage.
In late 1985, Goenka was 81, and his health was starting to fall. But mentally he was
still alert and combative. From his sparsely furnished penthouse on the 25th floor of
Express Towers in Bombay, Goenka intervened daily in editorial decisions on the
Express, hiring and firing editors with great frequency. He was far from reclusive,
receiving a daily stream of visitors anxious to keep in his good books, and flying
frequently to New Delhi where the Express had its own guesthouse. Dhirubhai had
been introduced to Goenka in the mid-1960s by Murli Deora, the yarn trader who
was moving up in the city’s Congress Party circles and later to become a member of
parliament. Goenka had noted Dhirubhai as someone of promise, and thereafter the
young Gujarati businessman made regular visits. Goenka was regarded as a family
friend, addressed as ‘appuji’(Grandfather) by the Ambani children. The Express
frequently reported the controversies involving Reliance, but when protests were
made Goenka seems to have placated Dhirubhai by explaining his target was the
Congress government.
Nusli Wadia also became a close friend and, as with the childless J. R. D. Tata,
became something of a son to the old Marwari. (Goenka’s only son had died at an
early age, depriving him of his only heir bearing the Goenka name.) Together with
his wife, Wadia had got into a routine of having lunch or dinner at least once a
month with Goenka. On one such occasion, around October 1985, Goenka asked
Wadia how his business was going. Wadia made a noncommittal reply, but Maureen
Wadia intervened and related the smear campaign against Bombay Dyeing in the
press, including the Express group’s own newspapers.
Goenka said little. But the next morning he arrived suddenly at Bombay Dyeing’s
head office, Neville House across town in Board Estate, and walked into Wadia’s
book-lined corner office unannounced. Goenka waved a file of press cuttings that
were obviously planted information. The same morning his business newspaper, the

Financial Express, had carried both an anti-Bombay Dyeing story and an editorial on
the same subject. Goenka promised to crack down on the Reliance-sourced reports,
both in the Express newspapers and in the national wire service run by the Press
Trust of India, of which he was currently chairman.
But on 31 October, the Press Trust put out a story based on a press statement by
the Reliance public relations officer, Kirti Ambani, about the reports a few days
earlier that Reliance was under CBI investigation over the PTA contracts in May. PTI
quoted verbatim Kirti Ambani’s statement that ‘Our enquiries reveal that there is no
such CBI probe into the matter and that the whole issue is being motivated by a
large, private, textile company which also happens to he manufacturers of DMT Our
enquiries further reveal that this party is not in a position to dispose of its DMT and
carry large stocks of about 5000 tonnes of DMT The basic problem seems to be the
quality of the said DMT’s Goenka was outraged, especially when finding that Reliance
had directly approached a PTI desk editor to run the press release against Goenka’s
explicit orders. Goenka ordered a retraction and apology. On 1 November, the PTI
issued it: ‘The Press Trust of India circulated yesterday a report based on a press
release by Reliance Textile Industries Ltd, containing allegations against a reputable
Bombay-based textile company.
We did not verify the veracity of the allegations before issuing the report. We regret
if the publication of the said report has caused any damage to the reputation of the
party concerned.’ The old press baron took the issue up with Dhirubhai at their next
meeting. According to two former confidants of Goenka, Dhirubhai admitted he used
his influence to get a favourable press. ‘I have one gold chappal [slipper], and one
silver chappal,’ he said, breezily. ‘Depending who it is, I strike him with the gold
chappal, or with the silver chappal.’ (Another widely repeated version has Dhirubhai
remarking that ‘Everyone has his price. ’He has denied saying this.)’s It was probably
the most damaging blunder and misjudgement Dhirubhai made in his life. Goenka
was outraged. He was already embarrassed enough by the case with which Dhirubhai
got his version of events into the Express. The implication he drew from the ‘old
chappal, silver chappal’s remark was that Dhirubhai saw no one, perhaps even
Goenka himself, as immune to his offers. It was just a matter of price. Goenka
resolved to expose Dhirubhai, using all the resources and contacts at his disposal.
Alarmed at the unfavourable turn of government attitude and press coverage in
November, Dhirubhai meanwhile made a desperate effort to restore himself to
Goenka’s favour, and to head off Wadia’s successful-looking campaign to have use of
domestic DMT forced on the polyester manufacturers. One morning in December he
telephoned Goenka and asked him to arrange an urgent meeting with Wadia in
Goenka’s presence so they could settle their disputes in an amicable way. Goenka
called Wadia, who was reluctant. The old man persisted, and called back in the
afternoon to tell Wadia a meeting had been fixed in the Express penthouse for that
evening. Left with little choice without causing offence, Wadia swallowed his
misgivings and agreed to attend. The three sat around a low table. According to one
account, Dhirubhai did almost all the talking during the 45-rninute meeting,
proposing that Reliance and Bombay Dyeing carve up the polyester feedstock market
between them, or alternatively that Reliance help its rival to place its DMT Goenka
presided, taking off his sandals and resting his feet on the table. For long stretches
of his monologue, Dhirubhai caressed the old man’s feet.
At the close, Dhirubhai invited Wadia to the wedding of his second daughter, Nina, a
few days later, and then suddenly embraced the startled Bombay Dyeing chairman.

‘So now we are friends?’, he asked. Wadia, highly embarrassed and still suspicious,
mumbled a vague assent. Dhirubhai walked towards the elevator, and then just as
suddenly turned and prostrated himself on the door facing Goenka. Then he left.
After the elevator door closed, Wadia turned to Goenka and said: “l bet you that
before the lift reaches the ground floor, he’ll already be plotting where next to stick
the knife into me.’ Goenka reached over and gently slapped Wadia on the cheek: a
tacit admonition not to be too cynical.
The next day, Dhirubhai telephoned Wadia at his Ballard Estate office and announced
he was personally bringing an invitation to Nina’s wedding. Wadia told him there was
no need, and after much persuasion Dhirubhai had the card brought over by an
executive soon afterwards. On the day of the wedding, a Reliance manager arrived
several hours ahead to escort the guest. Wadia sent him away, and went by himself.
The reception
was in the Cooperage Football Ground, scene of the Reliance share- holders
meetings.
Mukesh Ambani was waiting to escort Wadia in, and offered to take him to the head
of the line of guests waiting to greet the newly married couple and their parents on a
podium. Wadia refused, and the two waited in the queue for about 20 minutes
making awkward conversation. When he reached the stage, Wadia found a crowd of
press photographers waiting to capture the two warring textile magnates togetherthe point of the exercise clearly being to dispel the atmosphere of dispute
surrounding Reliance.
Anil Ambani was deputised by Dhirubhai to escort Wadia out to his car, but was sent
back by Wadia at the gate. Within a few days, hostilities had broken out again, and
Goenka decided to press on with his investigation. The person he chose to find out
the secrets of the Ambanis was not one of his famous editors, nor one of his
reporters, nor even someone from the business milieu of Bombay, but a young South
Indian accountant from Madras whose name had not previously appeared in print
except at the bottom of audited accounts. Swaminathan Gurumurthy, then 36, was
the product of a Brahmin family in a small rural village 160 kilometres south of
Madras. Educated initially in his local school, and then at the Vivekananda College in
Madras, Gurumurthy had hoped to enter law school but found his way blocked by his
upper-caste back- ground. The state of Tamil Nadu had been swept many years
earlier by political movements which instilled the notion that the Hindu hierarchy-with Brahmins at the top-was a relic of an ancient conquest of southern India’s
original peoples, the Dravidians, by light-skinned Aryans from the north. To redress
centuries of discrimination, the majority of places in universities and state offices
were reserved for lower-caste candidates.
Gurumurthy had turned instead to accountancy, qualifying as a chartered accountant
in 1972 and joining a local auditing firm which used to keep the books of Goenka’s
companies registered in Madras. He met Goenka himself in 1975, and made a big
impression. Goenka offered him a job, which Gurumurthy declined, and then
promised his business if Gurumurthy went out on his own. In 1976, Gurumurthy set
up a partnership, Guru & Varadan, which enjoyed substantial billings from Goenka’s
corporate empire, a labyrinth of companies acquired over the years and controlled
through a trust.
The young accountant held some smouldering feelings that made him an ideal
crusader against an erring capitalist. In Tamil Nadu, his caste had been subject to

constant ridicule and demonisation. He personally had suffered a loss of opportunity
as a result of the state’s sociopolitical upheavals, despite coming from a family of
modest means in a remote town. The good was being thrown out with the bad.
As a youth, he had found a political movement that for him and many thousands like
him across India seemed to provide a way for India to save its soul. The Rashtriya
Swayamsevak Sangh (RSS [the National Volunteers Order]) had been founded in the
1920s by a Hindu revivalist in the central city of Nagpur, and expanded across the
country to encompass millions of members, many from upper castes who felt
threatened by change. The RSS view was that Indians had been left with a defeatist
mentality by their centuries of rule by Muslim and European invaders. The foreign
rulers had gone, but they had left behind elites indoctrinated in their outlook and
manners. Ordinary Indians had been made apologetic about the injustices that
seemed part of their own Hindu culture, and inclined to believe they could not win
against the world’s martial races’.
By counter-indoctrination, from childhood through to manhood, the RSS hoped to
create gradually a confident new Indian. Sessions at RSS lodges taught boys the
glories of India’s past, mixing legend with fact, while members of A ages put on a
simple uniform of khaki shorts and white shirt for early morning drill with lathis
(wooden staves) to build up their spirit. To counter the valid criticisms of the Hindu
order, meanwhile, the RSS tried reform from within through voluntary social work to
eradicate evils such as untouchability and caste prejudice, which it insisted were
historical accretions on a just culture.
The movement is often ridiculed as a collection of small-town reactionaries playing
boy-scout games, retreating to a vague battle instead of pushing for power, hiding
behind the political parties it spawned (the Jana Sangh, and later the Bharatiya
Janata Party). A less benign view, particularly after the murder of Mahatma Gandhi
by a former RSS member in 1949 and after the 1992 demolition of the Aloha mosque
by members of affiliated groups, sees it as a sinister quasi-fascist force. But its
reputation for discipline and lack of corruption has also made the RSS political family
seem the natural successor by default to the failed Congress and communist
alternatives-at least until the BJP started getting tainted by state-level power in the
1990s.
In its economic ideas the RSS family has been nationalist, but suspicious of big
capital whatever its origins. The big company threatened the small shopkeeper and
trader communities, a repository of traditional virtues. And more recently,
multinationals with their universal products and their marketing science seemed to
be imposing a western popular culture and lifestyle wherever they set up. ‘I regard
communism and capitalism as two sides of the same coin,’ Gurumurthy told an
interviewer some years afterwards. Both regard human beings as economic
creatures. The only difference between them is whether ownership of wealth should
be public or private, and whether there should be profit or not. While communism
will have a Chernobyl at any cost, capitalism will have it only if it demands high
profit.’ In case, Gurumurthy was opposed to the monopoly power Reliance had
developed. ‘I would have rather had 100 Ambanis than just one, ’he put it.
Still, it is ironic that Dhirubhai and Gurumurthy ended up on opposite sides. In the
mid-1990s, Gurumurthy was the leading light of the Swadeshi Jargon Munch, a BJPaffiliate which actively opposed the entry of multinational consumer brands like
Coca- Cola and McDonald’s. Dhirubhai was often projected as the new, fully Indian

entrepreneur struggling against a business establishment left by the British, such as
the Parsi companies, and later as a home-grown businessman fully in command of
the latest technology and financial techniques: at last, the authentic Indian corporate
warrior.
Dhirubhai was of course closely identified with Congress by 1985, though he tried to
maintain ties to opposition parties too. What set both Goenka and Gurumurthy
against Reliance was their sense of excessive power, of business drive exceeding its
proper limits, and of personal arrogance on the part of Dhirubhai himself. ‘…while
other businessmen had some sense of guilt and shame about their wrongdoings,
Ambani saw himself as an achiever against the law, the system,’ Gurumurthy noted
later.
Gurumurthy’s background in the RSS also helped immunise him against some of the
cultural differences of business practices. The Hindu revivalists were happy enough
to work through the modern political and economic institutions left by the British.
They were a movement of rule-followers, not rule- breakers. They wanted order, not
anarchy. India was weak because its politicians could not make sensible laws and
stick to them in the face of temptations put up by private interests. The rise of
manipulators like Dhirubhai was not a result of Indians breaking out of their mental
bonds, but a symptom of their weakness.
Personally, Gurumurthy had few chinks in his armour. He had got to work with
important clients because of his own ability. Back in Madras he lived in a traditional
extended family house-hold, with everyone sitting on the floor at meals and eating
with their hands. He dressed simply, usually with an open-necked shirt, and stayed
in the Express guesthouse when in New Delhi or in a simply furnished room in the
penthouse in Bombay. Periodically, Gurumurthy would make pilgrimages to Hindu
temples and holy sites around India, reappearing with saffron or vermilion tilak
daubs on the forehead. He had both a strong sense of probity and a detailed
knowledge of corporate accounting and law. He was an inspired choice for Goenka.
The question, in November 1985, was where to start. By that stage, the published
information on Reliance made up a substantial file--much of it adulatory profiles
repeating the same anecdotes. Gurumurthy decided to work from the two cases
where Reliance’s secrets seemed to have come close to the surface: the High Court
petition by Reliance to enforce the PTA import contracts financed just before 29 May
that year, and the 1983 controversy over the purchase of Reliance shares by the Isle
of Man companies.
In the Indian Express organisation, Gurumurthy had direct contact with the chairman
and the newspaper’s considerable resources within India itself. He found also that
some of opponents in industrial and trade conflicts also kept information about
Reliance. Notable among them was a Sindhi textile trader, Jamnadas Moorjani, who
worked from a modest office in a back street of Bombay’s Kalbadevi district but
whose knowledge of markets and judgment was respected all over town. As
president of the All-India Crimpers’ Association from 1978 to 1982, Moorjani had led
the campaign by the independent polyester texturisers against the duty hike on yarn
in November 1982.
Though he found a pervading fearfulness about discussing Reliance, Gurumurthy also
built up contacts with bureaucrats, bank officials and even Reliance employees who
were uneasy about some of the company’s transactions. When it came to pursuing

inquiries overseas, the little-travelled Gurumurthy relied initially on names suggested
by Wadia, drawing on business contacts kept by Bombay Dyeing and associated
companies. The initial contact was a firm of solicitors, Lee Lane Smith, in London’s
Lincoln’s Inn Fields, who undertook a legal search of the mysterious shelf companies
with names like Crocodile and Fiasco in the Isle of Man. In mid-December, the
solicitors engaged a private detective agency, King’s Investigation Bureau, to help
them trace the ultimate owners.
By then, at Reliance, the atmosphere was becoming one of a seige as the Finance
Ministry’s tax enforcement agencies and the Central Bureau of Investigation pursued
their inquiries into the PTA letters of credit and the excise evasion charge. In
February 1986, the years of living on adrenalin took their toll on Dhirubhai. He
suffered a sudden stroke that left him partly paralysed down his right side and
required immediate attention in an American hospital. For some weeks, the running
of the company was left to the two boys, then aged 29 and 27 respectively.
Critics were also shaken, by a sudden, still unexplained attack on Jamnadas
Moorjani. Sensing a more sympathetic government in New Delhi, the crimpers had
renewed their agitation for the Rs 15 000 a tonne anti-dumping duty to be lifted.
One evening in February, a gang of men attacked the unassuming Moorjani as he left
his Kalbadevi office and walked to his car. He was slashed with long knives, with one
arm nearly severed, but recovered quickly in hospital. Years later Moorjani pointed
out that nothing linked the attack with the clash of interests between the crimpers
and the polyester spinners, but at the time the possibility of such a linkage was the
subject of great speculation in Bombay. In this vitiated atmosphere, the Indian
Empress launched its expose of Reliance with a misleadingly theoretical-looking piece
on the merits of allowing conversion of the unconvertible security, carrying the
modest by-line Gurumurthy’.
If the main rule prohibits something, get a sub-rule added which permits it. The
main rule will no doubt exist in the book but the book alone. Business thrives on
such rules. Touts make their fortunes, politicians enhance their power and
bureaucrats their importance. Rule of law at once becomes sub-rule of law and subrule eventually becomes
Subversive rule. Let us get down to specifics.
It was not the way a practised journalist would have opened, but Gurumurthy set out
a powerful argument against the practice that had become a hallmark for Dhirubhai raising debt by offering attractive interest rates and then converting it to cheap
equity, by the innovative path of converting supposedly non- convertible debentures
into shares.
This risked destroying the whole principle behind the distinction between convertibles
and nonconvertibles, reflected in the lower premium and higher interest rate on nonconvertibles, Gurumurthy pointed out. No one would bother with convertible issues if
it were allowed as a general practice. ‘There is yet another mischief,’s Gurumurthy
noted. ‘Those corporate managements which deal in their own securities can abuse
this licence by buying these nonconvertible debentures at a lower price and
thereafter announcing conversion. There were allegations of this abuse in the only
case of conversion of the nonconvertible in recent stock market history’. Gurumurthy
also pointed to a risk of unforeseen foreign exchange outflows, a keen preoccupation
of India’s economic managers at that time. The scheme of repatriable investment by
non-resident Indians in the sharemarket put no limit on the proportion of

nonconvertible debenture issues that could be taken up by NRIS. But NRI investment
was limited to a maximum 40 per cent of convertible issues, in some circumstances
to a maximum of Rs 4 million, so that the outflow from capital appreciation of the
underlying shares was limited. If conversion of nonconvertibles were allowed, NRIs
could take up the whole of an issue, convert to shares, and take proceeds of a sale
out of the country.
Getting to Reliance by the final stages of his article, Gurumurthy applied this to the
company’s F series of nonconvertible debentures made in June 1985. Out of the Rs
2.7 billion subscribed in the private placement, Rs 1.08 billion or 40 per cent had
come from overseas Indians or companies they controlled. Had the issue been
convertible from the start, the NRIs could have subscribed only Rs 4 million under
the current rules. But Reliance was now holding out the expectation of conversion of
the issue, which would be a clear distortion of the NRI investment rules. (Reliance’s
advertisements for the F Series had mentioned that the conversion of a previous
series had given investors a return of 180 per cent in eight months, including
interest: the nonconvertible part of the debentures had been converted at Rs 71.43 a
share, when the market price was Rs 122 a share.)For example, if Reliance were
allowed to issue just one share for each Rs 100 debenture, the NRI investor would
gain a share worth Rs 300 at the then market price. For their Rs 1.08 billion
investment, the NRIs would be entitled to repatriate Rs 3.24 billion. ‘That the subrule has the potentiality to destroy the main rule is obvious and yet the sub-rule
exists,’ Gurumurthy said in his final flourish.
It was introduced into the guidelines when different ministers and a different system
of governance obtained. Whatever anyone may say of the present finance minister
[V P Singh, no one disputes his bona fides and honesty of purpose. He has no use for
such sub-rules. Will the government, particularly the finance minister, act to prevent
examples of this kind becoming model practice? Investments based on such
questionable methods will become a menace. The government must therefore act to
prevent this prejudicial tendency from becoming a part of the system. A measure of
avoidance is better than compulsive surgery later.
A week later, Gurumurthy returned to the attack. He began in the philosophical style
that became his hallmark:
Truth reveals itself, though often belatedly. This admirably suits the politician in
power. The interregnum between truth and its revelation is generally a period of
manipulation. In this interregnum alibis and half-truths rule, finally, unless someone
is alert, truth gets confined to the archives. Result: alibis masquerade as truth.
Gurumurthy recalled the grilling of the former finance minister Pranab Mukherjee in
1983 over the non-resident Indian investment in Reliance, and his defence that while
black money could be involved this want reason enough to MI a scheme bringing in
much-needed foreign exchange. The figures, Gurumurthy wrote, showed that the
NRI share investment scheme had brought in less than one per cent of the Rs 139
billion invested by NRIs in various deposit and investment schemes since 1981.The
Rs 225 million invested by the 11 Isle of Man companies in 1982, augmented by a
further Rs 6 million for a rights issue of debentures, had grown into a share portfolio
worth a repatriable Rs 1 billion. And if Reliance gave its standard bonus issue in 1986
and were allowed to convert the nonconvertible part of its October 1984 E Series
debentures, the holding would grow to some 5.2 million shares worth Rs 1.67 billion.
If the 11 companies had taken up their allocation of the June 1985 F Series, and

conversion was allowed, the holding would grow to 26.8 million shares, worth Rs
8.58 billion. Then equivalent to some US$650 million, this repatriable amount was
equal to 15 per cent of India’s foreign exchange reserves at the time.
This form of investment was a dangerous game for India, Gurumurthy argued. With
the sharemarket index doubling in the year past, it meant the country could have to
return twice as much foreign exchange as it gained, when - if it had needed to-the
government could have borrowed at a small margin over the London interbank rate.
Nor was the scheme very honest: ‘It appears to be tailor-made for motivated
investment not altogether in the national interest.’ The arguments in these two
articles were well made, and stirred up a subject that smelled from the start. But the
scenario of capital fight that Gurumurthy depicted was contradicted by one of the
implicit assumptions made by the critics of Mukherjee. If Dhirubhai was the ultimate
owner of the Isle of Man companies, how could he sell off their Reliance shares
without depressing his own share price?
A week later, however, Gurumurthy moved into new allegations. ‘Smuggling in
Projects’ was the headline on the first of a two-part story. ‘Coastal smuggling is a
traditional offence,’s he wrote. A more sophisticated form of smuggling thrives in the
capital. It is a comparatively open affair. Five-star hotels and expensive guesthouses are its citadels. The commodity in traffic is however different-it is licences,
quotas, permits and other largesse’s by Government’s Business controlled important
government decisions through their lobbying operations in New Delhi. This was how
a project had been smuggled from the government sector to a private company.
In 1980-81, the Petroleum Ministry had been working on plans for a petrochemicals
refinery at Mathura, which included a 150 000 tonne a year purified terephthalic acid
plant. In March 1981, Reliance had submitted its licence application for a PTA plant
the same size. To overcome the Petroleum Ministry’s resistance, its Secretary was
transferred in July 1983. In October 1984, Reliance got its preliminary approval for a
75 000 tonne plant. The proposed PTA plant at Mathura was cut back to 75 000
tonnes, and had been stalled in any case by lack of government funds.
Thanks to the help of Finance Minister Mukherjee, Reliance looked like having 100
per cent of India’s PTA production and 34 per cent of the country’s combined DMT
and PTA output. Its control of other feedstocks, by-products and end-products in the
polyester chain ranged from 38.6 per cent up to 62.5 per cent, according to
Gurumurthy. India’s anti-monopoly law defined a dominant undertaking as one with
more than 24 per cent of national installed capacity, but none of Reliance’s
applications had been referred to the Monopolies and Restrictive Trade Practices
Commission.
Raising the example of the pre-World War 11 industrial, trading and banking
combines in Japan called the zaibatsu, Gurumurthy warned that India too risked
having its government controlled from the boardrooms of industry’s . Powerful as the
critique was, Gurumurthy was working up to then from published knowledge. On 15
May 1986, he began reporting from the results of his own investigations, in a threepart series entitled ‘Reliance Loan Maha mela meaning a fair or bazaar, and ‘loan
mela’ referring to the notorious practice of Congress politicians handing out loans
from government to their constituents in carnival-like ceremonies. The Reliance loan
mela was not a case of giving a few hundred rupees to a poor family to buy a buffalo
or irrigation pump, said Gurumurthy. ‘It has to do with crores of rupees smuggled
from banks in an ingenious and brazen scheme to divert public funds to private

ends.’ It began with the Rs 843 million E series of debentures (in October 1984) and
the Rs 2.7 billion F series issue (in June 1985). After each issue, the main branches
of the big Indian banks received requests for loans from numerous small unknown
companies, pledging Reliance shares and debentures as security. In June 1985, for
example, the Punjab National Bank had received nine near-identical requests from
nine small companies with names like Patience Holdings & Trading and Inspirations
Investments & Trading for Rs 9 million each, with each offering to pledge 90 000
Reliance shares as security.
Gurumurthy’s investigations found that the registered addresses of such companies
were often those of Reliance offices, its associates or employees. Many put up
Reliance shares as collateral, in some cases the same debentures for which they
were seeking the loan to buy. In some instances, the loan was facilitated by a
personal guarantee from Nathubhai Ambani, younger brother. The Ambani family
investment vehicle Mac Investments had been lent Rs 6.64 million in October 1984
by the European Asian Bank-the same bank that had lent to three of the Isle of Man
companies through its Colombo branch in 1982. The same day Mac’s subsidiary Real
Investments also got the same amount from the same bank. Around that time
another Mac subsidiary, Pam Investment & Trading Co got Rs 5 million from Bank
Indo-Suez and another subsidiary, Nikhil Investment, got Rs 5 million from the Bank
of Credit and Commerce International. A few banks (among them Punjab National
Bank and the State Bank of India) had turned down the applications. Most did not:
the article listed 16 banks as giving a total Rs 1.018 billion in loans, among them
many of the state-owned banks. In some cases, middle managers of government
banks had ignored specific board directives and authorised loans on specious ground
of urgency. Some had been rewarded with promotions.
None of the banks had obtained the Reserve Bank of India’s clearance for loans
above Rs 500 000 against shares, as required by central bank guidelines. And to
enhance security of loans, the borrowers had also been able to get Reliance to
deposit large amounts of the public subscriptions to the debenture issues with the
lending banks away of recycling the public’s money back to the management. ‘This
entire operation,’ said Gurumurthy, ‘making in dozens of companies holding what are
essentially the management share holdings of Reliance, was a planned affair, tied up
intimately with the Ambanis and Reliance, for the purpose of cornering more than Rs
100 crore [one billion] to invest in the two Reliance debenture issues.’ The operation
was known to the Reserve Bank, whose inspectors had noted that the possibility of a
common link in the management of these companies with Reliance Industries cannot
be ruled out’. As the stockmarket boomed in 1985, the central bank had sent a
circular to commercial banks urging caution in lending against shares, and to see
that bank advances were not used for speculative or other anti-social purposes. It
told banks that ‘The main point of emphasis is that in granting advances against
shares, banks should be more concerned with what the advances are for, rather than
what the advances are against’.
Gurumurthy asked what point there could be in, say, Mac Investments borrowing Rs
1.5 million from Canara Bank at 18 per cent interest to buy debentures carrying 13.5
per cent interest. The borrower must have known that the capital appreciation of the
Reliance shares obtained from conversion of the nonconvertible portion of the
debentures would yield a profit of some 400 per cent. The Ambani management
would also have consolidated its hold on Reliance by borrowing to buy its own
company’s shares - expressly forbidden by the Reserve Bank. Reliance had already
started talks with the Ministry of Finance to have the E and F series fully converted.

The company’s shares had already started booming in expectation. ‘f this is not
speculation then what is?’, asked Gurumurthy.
The accountant-turned-journalist also took aim at another carefully nurtured
Reliance claim: that it did not rely on funding from government banks but on direct
borrowings and investment from the public. This had been a condition put by the
government on the licences for the new PTA plant and other units in 1984, so as not
to strain the resources of the banks. Among others, the industry minister, Narain
Dutt Tiwari, had recently praised Reliance for raising Rs 3.5 billion on its own. ‘But
would all these gentlemen have said had they known that more than Rs 1 billion of
this actually came from banks in one of the most elaborate tricks played on the
system? Or is it just possible that some in authority actually knew and chose to turn
a blind eye to the facts?’ Gurumurthy had not done so well in his overseas inquiries.
The lawyers and private eyes engaged in London were laboriously searching
company records in tax havens to trace ownership of the non-resident investors in
Reliance, but results were slow in coming. A letter from the London contacts on 16
April enclosed a fresh report from King’s Investigation Bureau with the comment that
it was very feeble’.
King’s had been asked to look into nearly 120 companies ostensibly owned by nonresident Indians which had invested either directly into Reliance shares, as in the
1982 case, or by subscription to the Reliance E and F series debentures. Possibly
with the help of concerned banking officials, Gurumurthy had also obtained lists of
NRI companies which had borrowed from the Bank of Oman and certain other banks
to buy into the Reliance issues.
The nationalised Bank of Baroda had played a big role in financing the issue. Mostly
from its London office, the government bank had advanced a total US$33.5 million to
NRI companies and individuals, apparently nominated by Reliance, to help them to
subscribe to the F series debentures. This was about 40 per cent of the Rs 1.08
billion investment made by NRI sources. The loans had similar terms: two
percentage points over the London interbank rate or 10 per cent a year, while the
return from interest was 11 per cent after tax. The investors were clearly after the
capital gain from eventual conversion to equity.
The detectives had exhaustive searches made on the names in the Channel Islands
as well as the Isle of Man, but most turned up negative. In the Isle of Man they
found that 10 of the 11 controversial companies from 1982 had undergone a sudden
change of ownership and directors in August 1985. The two most provocative names
had also been changed to something more innocuous: Crocodile Investments had
become Asian Multi- Growth Investments, and Fiasco Investments had become Asian
Investments. In the case of the 11th corn any, Tricot Investments, 1 p it was not
possible to establish non-resident Indian ownership at all.
With the 10 companies, the various Shahs and Damanis of Leicester, Berlin, Djibouti
and New York had suddenly transferred their 55 to 80 per cent shareholdings in
August 1985 to newly formed holding companies in the British Virgin Islands with
names matching those of the Isle of Man companies they now owned. Inquiries in
Leicester found the Shahs had not received any noticeable jump in their wealth from
the sale of control over equity, by then worth over Rs 1 billion or US$80 million.
Indeed, family members professed the same degree of ignorance as they had in
1983. By then, Krishna Kant Shah- old Junagadh schoolmate - was too ill to meet
anyone (and died in May 1986).

The New York investors, Praful and Nalini Shah, turned out to be a middle-class
young couple mostly living off Praful’s average-size salary as clerk in a city law firm.
They had bought their modest home in the suburbs for US$49 000 with a $34 000
mortgage and drove an 11 -year-old Dodge. They had not apparently come into any
recent wealth either, but any connection they had with Dhirubhai was not
discovered.
As of August 1984, the British Virgin Islands had had a company code designed for
the discreet investor. Called the International Business Companies Ordinance, it
allowed companies to issue shares to an unnamed bearer who was allowed to vote at
company meetings. Companies could issue non-voting shares, so that technically an
NRI could own 60 per cent of the capital to comply with the Indian rules but have no
voting rights at all. And it could have faceless shareholders through trusts, corporate
bodies and the like. Directors and shareholders could even participate in meetings by
telephone.
Including these companies, Gurumurthy’s inquiries found that a total of 32
companies registered in the Isle of Man or the Channel Islands had subscribed a total
Rs 141 million to the F series debentures. The 10 British Virgin Islands companies
had subscribed Rs 50 million. And some 41 companies in the United Arab Emirates
had been lent an average Rs 1 million each by the Bank of Baroda to subscribe.
Out of the new names in the British tax havens, the searches found that new
directors had been appointed over August and September 1985, just after the F
series issue. Many had an Indian resident of Dubai, Homi Ratan Colah, as their new
director wielding majority control. Others had people of Indian names listed as
residents of Nigeria.
The Dubai companies had some fanciful names taken from various ancient Sanskrit
scriptures: 10 from the Vigneshwara Ashtotra, and 12 from the Sandhya Mantra.
Several others took names from the avatars of Lord Shiva and other divinities.
Reliance’s Middle East co-ordinator old colleague from Besse & Co in Aden, Bharat
Kumar Shah, subscribed Rs 35 million in the names of himself and his family, and in
the first week of September 1985 had sent a list of borrowers including himself to
the Bank of Oman.
Through a firm of Panamanian lawyers with an office in London, the investigators
had also done a search in Panama on more than 100 company names matching
those on the list of Reliance investors. They found some of he names, registered on
the same day in July 1985. Listed among company officers were two members of an
Indian firm of chartered accountants in Dubai which had done work for Reliance. But
the London investigators reported back to Bombay that their local agents had not
been able to get information out of the Panama lawyers who had incorporated the
companies. ‘Our agents have been advised that this is a most delicate matter, and
should not be pursued further,’ they said.
It was unsatisfactory--and tantalizing, given that the trail seemed to lead through
the tax havens and corporate hideouts of the globe back towards Bombay. The leads
in Panama and Dubai were not enough to build a story on. But it was enough for
Gurumurthy to resume the chase abandoned by the Indian press in January 1984when, he claimed, the Ananda Bazar Patrika group had been warned off by the
withdrawal of all Reliance advertising.

In a four-part article published over 11-14 June-under the heading ‘Reliance,
crocodiles & fiascos - he went through the story of the Isle of Man companies once
again, emphasising the series of coincidences that pointed to a single manipulator
close to the action in Bombay. Given the secrecy rules applying in the British Virgin
Islands, how was the Reserve Bank of India to verify that the companies had 60 per
cent control by non-resident Indians, as required by the Indian rules? Had the
central bank even been informed of the changed control in 1985?Gurumurthy also
highlighted the way in which changes in the investment rules had been timely for the
investments by the Isle of Man companies. Between late March and August 1982,
during two bear attacks against Reliance, some 1.872 million shares in the
company.-nearly 10 per cent of the then issued capital-had been bought by brokers
on behalf of unnamed NRI investors. The investment rules had been relaxed first on
14 April 1982, just after the first bear attack, to give repatriation rights to NRIs and
extend investment freedom to companies, partnerships and trusts with 60 per cent
NRI ownership. Then on 20 August, just after the second attack, the rules were
further relaxed to remove the Rs 1 00 000 (face value) ceiling for any one NRI
investor. Instead, each NRI investor could hold up to one per cent of the paid-up
capital of the company. Instead of having to distribute the 1.872 million Rs 10 shares
among 187 owners, the requirement was now just 10 separate shareholders. Only on
9 August 1982, Gurumurthy pointed out, had the various Shahs and Damanis
acquired their 60 per cent-plus control of the 10 Isle of Man companies.
The amendments to the investment rules had clearly been tailor-made. In
Gurumurthy’s 12 articles over three months, the Indian Express had fired a
devastating broadside at some of weakest defences. It had been an expensive
lesson for having got on the wrong side of the old Marwari newspaper baron sitting
at the top of Express Towers.

UNDER SIEGE
So far, it had been just words-wounding as they were to S Dhirubhai and Reliance.
But within three months, the Indian Express campaign led to action. Late on the
night of 10 June 1986, the Ministry of Finance in New Delhi issued a formal
notification that the political affairs committee of Rajiv Gandhi’s cabinet, comprising
the prime minister and his most senior ministers, had decided to ban the conversion
of nonconvertible debentures into shares.
The timing of the cabinet decision could not have been more pointed. It had been
widely known that the board of Reliance had been called to meet the next day, 11
June, specifically to decide to recommend conversion of the E and F series
debentures at the annual shareholders meeting two weeks later. On 4 June, a
meeting of finance officials had given in principle’s approval for conversion, and the
Reliance share price had jumped to a high of Rs 392. Once approved by the
shareholders meeting, the company would have applied for formal permission to the
Ministry of Finance.
The government’s decision meant the company had lost a chance to extinguish Rs
3.23 billion in debt, and make a core spending boost to its reserves and net worth,
while cutting about Rs 480 million in annual interest. The debenture holders had lost
the chance of a quick 200 per cent gain on their original investment. Even before
trading opened in the Bombay Stock Exchange on 11 June, Dalal Street was crowded
with investors off-loading their Reliance debentures in kerb transactions.
The E Series debentures had been trading around Rs 222.50 and the F Series at
about Rs 210 up to then. They crashed within a few hours to around Rs 110.
Dhirubhai met his other directors late in the afternoon, and adjourned to consider
other proposals to put to shareholders.
More bad news was coming in. On 17 June, Finance Minister Singh presided over an
open house hearing of claims and counter-claims about the Rs 15 000 a tonne antidumping duty that had been applied on polyester yarn back in November 1982. Anil
Ambani represented Reliance. Jamnadas Moorjani attended for the All-India
Crimpers’ Association to oppose the levy. The next day, Singh abolished the duty and
yarn prices dropped 20 per cent immediately. The same month, the authorities
placed a Rs 3000 a tonne extra duty on imports of PTA to help the domestic
manufacturers of the alternative feedstock DMT. Dhirubhai was embattled on several
other fronts. Just as the newspapers reported the ban on conversion of
nonconvertibles, Gurumurthy began his series on the Isle of Man and other NRI
investors. Four months earlier, on 18 March 1986, the minister of commerce, E Shiv
Shankar, had confirmed to parliament that the Central Bureau of Investigation was
looking into the alleged leak of the May 1985 policy change on PTA imports.
At the start of June, Finance Minister V P Singh had ordered the Reserve Bank of
India to seek the facts of the Reliance loan mela’. In addition, both Reliance and
Bombay Dyeing were getting drawn into complicated litigation launched by small
shareholders who seemed to have ample legal resources at their disposal. The same
complaints were also being taken to ministers, the Company Law Board and the
heads of financial institutions by backbench MPs suddenly seized of the urgency of
the accounting intricacies involved.

The case against Reliance had been taken to the Supreme Court by one Om Prakash
Arora, a medical practitioner in New Delhi who-according to his letterhead-offered
cult treatment for baffling diseases affecting the head, skin, sex life, nerves and
stomach, and who lived by the motto that ‘life is not a problem to be solved but a
mystery to be lived’ . He alleged that Reliance was cheating on the interest paid to
holders of F Series debentures.
Nusli Wadia, for his part, had to divert attention to a case taken, inconveniently, to
the Calcutta High Court by one Kamal Singh Bhansall, who owned five Bombay
Dyeing shares. He alleged wrong entries in the company’s accounts for 1984-85 and
obtained a court injunction against distribution of dividends-just two days before
Wadia was due to hold his annual shareholders meeting. Bhansall’s shares were
worth about Rs 2600 but he had been able to engage one of India’s most costly firms
of solicitors and a team of advocates whose combined fees for the case would have
been 100 times that amount.
Dhirubhai’s response to the crisis was typically flamboyant and combative. On 26
June, he held his meeting with shareholders as scheduled. The Cooperage Football
Ground had been replaced as too small a venue. Instead, some 30 000 investors
flocked to the Cross Maidan, a large central park in Bombay, and sat under canvas
awnings. The small investors were anxious for their annual theatre. They wanted to
see how Dhirubhai was shaping up, after his stroke in February and the onslaught by
the Indian Express. They expected Dhirubhai to come up, once again, with the
unexpected and get around the conversion ban.
Dhirubhai did not disappoint, though his speech was obviously a physical strain for
him to deliver. Reliance would soon come out with a new, fully convertible debenture
issue on a rights basis to existing share and debenture holders, and would convene
an extraordinary general meeting to approve it. The company would try again to win
permission to convert the E and F Series. Reliance was meanwhile selling 42 per cent
more in the first five months of 1986 than it had in the same months of 1985, and
sales might cross the Rs 10 billion mark for the full year. The company was drawing
up plans for a further Rs 20 billion investment in new and existing products,
including plastics at the proposed petrochemical plant at Hazira in Gujarat.
As for the propaganda against the company, this was a result of success which had
created jealousy. Nonetheless some 320000 new shareholders had recently joined
the Reliance ‘family’, swelling the ownership spread to 1.8 million. The company
operated fully within the law. The management did not own a single F Series
debenture.
The non-resident investors numbered 11 000 and were spread across 55 countries.
Anywhere else but India, this achievement would be honoured. But the news
continued to get worse for Dhirubhai. Pleas to Goenka by Mukesh and then Dhirubhai
himself had brought a temporary truce in the Express campaign. But this peace was
accidentally broken by the Reliance camp when a pro-Congress magazine called
Onlooker ran an attack on Wadia, despite last- minute efforts by Dhirubhai’s friend,
the MP Murli Deora, to have it canned.’ In any case, other publications were taking
up the attack on Reliance. On 5 July, the tabloid Blitz took an existing scandal a lot
further. Understatement was not a hallmark of its editor, Russy Karanjia. The frontpage splash began: the meteoric rise of the

Reliance group of companies to the pinnacle of monopoly power was fuelled by a
series of swindles of a magnitude unparalleled in the annals of corporate fraud in this
country, incontrovertible evidence in the possession of Blitz reveals...’s What the
newspaper possessed actually related to one trans- action, an enhancement of one
of the letters of credit for the import of PTA carried out in May 1985. A branch in
Bombay of the Canara Bank, owned by the government, had increased the finance
provided in the letter by US$6.93 million (to US$8.32 million) in a handwritten
amendment dated 29 May 1985-the same day that the import policy was changed.
As well as the amendment, Blitz had a copy of a letter by a Reliance finance manager
dated 31 May to the Canara Bank branch. It complained that in the bank’s
communication to the M supplier (the British chemicals giant ICI) ‘he fact the above
LC has been enhanced on 28.05.85 has not been brought out clearly ... You are
aware the effective date of enhancement of the above LC is one of the important
factors which now you may communicate to the beneficiary stating that the LC has
been enhanced on 28.05.85’s .

The company was worried that a letter of credit dated the same day as the policy
change would be disallowed. The branch manager obliged by sending a telex to ICI
to this effect on 1 June. In a follow-up article, Blitz reproduced correspondence from
Reliance to ministers and senior government officials in which the company insisted
A letters of credit were taken out before 29 May--assertions Blitz described as lie’s
and cooling the government’s .
The bank manager’s action could be put down to a willingness to correct a simple
clerical error that could disadvantage his client, if indeed the transaction had been
made on 28 May. But it had already drawn rebukes from the Canara Bank’s own
inspectors at head office-who asked what were the ‘important factors’s and a request
from the central bank for the discrepancies in dates to be cleared up. And as the Blitz
report came just after Gurumurthy’s account of the loan mela in which several
Bombay branches of the Canara Bank had figured, against their board’s initial
wishes-the possibility of a more serious forgery was more credible.
The Reserve Bank of India had meanwhile reported to the Ministry of Finance at the
beginning of July on its preliminary inquiry into the loan mela. It found that nine
banks had given advances totalling Rs 592.8 million in India during 1985 to
companies apparently associated with Reliance, against security of Reliance shares
and debentures. The loan accounts totalled 187, given to 63 companies. Reliance
had placed money with the nine banks, totalling Rs 919 million, as deposits, not
collateral. Several of the borrowing companies had been established very recently,
and in some cases with a capital of only Rs 1000 or Rs 10 000 though they had
borrowed amounts as great as Rs 9.5 million. The purpose of the loans was generally
stated as working capital or purchase of shares’. In all cases, the security offered
was shares or debentures of Reliance, held either in the name of the borrowing
company or that of another company connected with Reliance. The banks had not
worried about repayment capacity of the companies, or looked into the end use of
the funds.
The loans had not broken every rule. RBI directives required that shares pledged
against loans of more than Rs 50 000 be transferred to the lending bank’s name.
This had been complied with, generally. The loans had been repayable within 30
months, in some cases 12 months, and thus were not long-term loans (five years
and more) which required RBI approval. But by granting large advances to Reliance-

companies, possibly to help strengthen the controlling interest, the banks had not
adhered to the spirit of the RBI guidelines- that loans be given to assist productive
activity. On 14 July, Finance Minister Singh presented the interim report to the lower
house of parliament and the Reserve Bank’s governor, R. N. Malhotra, appointed one
of his two deputy governors, C. Rangarajan, and three other central bank and
Finance Ministry officials to make a full inquiry On 22 July, Singh spoke in the
parliament’s upper house, and assured MPs that the loans would be recalled if the
Rangarajan committee found they had been given in violation of rules and were not
being put to proper use.
The remark caused new pandemonium in Dalal Street. The price of Reliance shares
tumbled from Rs 366 to a low of RS 312, before closing at Rs 317. The Bombay
Stock Exchange had earlier doubled the margin-the up-front payment ahead of
settlement-on buyers of Reliance shares, from Rs 40 to Rs 80 because it was aware
of heavy buying by the company’s own support system. This limited Dhirubhai’s
ability to stem the days rout. But things went so badly, with Reliance dragging down
the whole market, that at the close of the day the exchange also put a similar
margin on sales, putting shackles on the bears as well. Reliance also came under
attack in parliament when the central bank’s interim report was debated on 31 July.
A dozen leaders of opposition parties (including communists, regional groups and the
BJP) signed a letter urging a thorough probe into Reliance. A scrutiny of this
industrial monopoly by the press has unfolded massive and ingenious schemes and
methods adopted by the company in gross contempt of public policies and statutory
laws formulated by successive governments.’ Another parliamentarian, A. G.
Kulkarni, belonging to the Congress splinter group led by the Maharashtra state
strongman Sharad Pawar, pointed to a deputy governor of the Reserve Bank itself
being involved in the collusion. The Prime Minister, Rajiv Gandhi, assured the MPs
that the affairs of Reliance would be ‘scrutinized on merits’ and action taken
according to law after inquiry. The price of Reliance shares continued to fall, hitting
Rs 274 in Bombay on 4 August. To slow the crash, the Bombay Stock Exchange
raised the daily margin on sales to Rs 100, and in addition banned new sales in
Reliance except for immediate delivery The script recovered to Rs 290 after the
decision. Goenka’s Financial Express criticised the ban on forward sales. The
assumption underlying the ban is that forward selling is tending to bring down the
prices of the scrip below the realistic levels,’ it said in a commentary ‘But the truth is
that Reliance’s scrip is in the process of shedding a part of its unrealistic and artificial
prices.’ If the exchange was going to halt forward sales for a while, the newspaper
said, it should stop forward purchases as Well.
Gurumurthy then weighed in with yet another sensational allegation, which kept the
share price failing: Reliance was a company that had smuggled in a Rs 1 billion
industrial plant. ‘He know of watches, radio recorders, videos, popular consumer
durables, sneaking into India. Then there are those who try and slip gold biscuits
[ingots] and narcotics past the Customs’ he began. ‘But we had not, so far, come
across those who smuggle in large factories . .’’
In late 1985 and early 1986, Gurumurthy said, Reliance had imported the
components of its new 45 000 tonne a year polyester staple fibre plant in
consignments by sea through Bombay and by air through the Bombay air cargo
terminal. Dispersed among the same containers were the components of a second
plant, able to make 25000 tonnes a year of polyester flament yarn. –par This had
been the third case of smuggling in yarn-making capacity by Reliance, he said.

In its original yarn operation set up in 1982, Reliance had actually imported a 25 000
tonne a year plant under the guise of its licensed 1 0 000 tonne plant. The
endorsement scheme of Pranab Mukherjee had allowed Reliance to legitimise this in
1984.
At the same time it had been allowed to import balancing equipment to match the
capacities of the polycondensation units (which make the polyester) and the spinning
lines (which extrude it into yarn). The Rs 183.8 million worth of balancing equipment
the company had been licensed to import in early 1985 was actually an additional
yarn plant capable of making 20 000 tonnes a year. Together with the newly
smuggled third plant, Reliance now had a yarn capacity of 70 000 tonnes at
Patalganga, as against its licence for 25 125 tonnes.
Each of the second and third plants consisted of a polycondensation unit and four
spinning lines. Bought new, each would cost about Rs 2 billion, and second-hand,
about half that. doesn’t the enforcement branch want to know where Reliance got
the foreign exchange to pay for these?’ , asked Gurumurthy, ... or will they hide
behind the principle of jurisprudence that was propounded by former finance minister
Mr. Pranab Mukherjee on 16 November 1983 in the case of Reliance when he
asserted that “Of under-invoicing took place, enforcement has already failed, and we
could do nothing about it later’ In a follow-up article, the Express connected the
smuggled yarn capacity with a change in policy announced on 3 July 1986 by the
minister of industry, Narain Dutt Tiwari, whom the newspaper had described as an
‘unabashed Reliance admirer’. Tiwari said polyester producers were now free to
switch production between staple fibre (spun from cut lengths of yarn) and flament
yarn. Reliance would now be able to churn out more of the high-priced flament yarn
without attracting notice. The policy applied to manufacturers with a
polycondensation capacity of 30 000 tonnes and a flament yarn capacity of 1 5 000
tonnes-another apparently tailor-made criterion which only Reliance then fitted.
Tiwari, who remained throughout a political career extending into the late 1990s a
staunch nostalgist for Indira Gandhi, had also tried without success to wrest control
of the office of Controller of Capital Issues in July, arguing that it fitted better with
the Department of Company Affairs, which was under his portfolio, than with
Finance. This might have rescued the con version of the E and F Series debentures
for Dhirubhai. In addition, the Industry Ministry cleared an application by Reliance to
expand its PTA plant’s capacity from 75 000 tonnes to 1 00 000 tonnes, while sitting
on an application from Bombay Dyeing to expand its DMT capacity.
But otherwise, Dhirubhai’s friends in the government and Congress Party were
ducking for cover. Pranab Mukherjee had- been miserably sidelined by Rajiv Gandhi.
At the party’s December 1985 centenary conference, Rajiv had snubbed him by
calling a lunch break during Mukherjee’s speech defending Indira’s economic policies.
Then, in April 1986, Rajiv had summarily expelled Mukherjee from the party after
newspapers began reporting a revolt by Indira loyalists against his leadership.
As well as the Indian Express, Dhirubhai also faced attack from another influential
publisher, R. V Pandit, whose monthly magazine Imprint carried an extensive
account of the Reliance controversies in July 1986. Pandit had worked in Hong Kong
for the publisher Adriaan Zecha (later a hotelier) before returning to set up his own
magazine and music firm in Bombay, initially with investment from the Wadia family.
He made no secret of that, nor that he was a close family friend (and a godfather of

Nusli Wadia’s children). Pandit brought out no new facts, but shaped the existing
accusations into a powerful polemic against Dhirubhai.
Otherwise the business press retained its admiration for Dhirubhai, while listing the
charges brought by the Express. After the loan mela articles, the magazine Business
India wrote that ‘erious as these allegations are, the candid reaction in most
corporate circles was a ‘Hats off to Ambani gutsy genius in circumventing the
complicated and often suffocating web of corporate laws and regulations that plague
Indian business’s .
The magazine quoted unnamed merchant bankers and executives praising
Dhirubhai’s financial wizardry and guts and ‘intricate jugglery of high finance’. The
simplicity of his schemes bordered on genius: the man was ‘unabashedly a go-getter’
.The Business India writers, Mukkaram Bhagat and Dilip Cherian, concluded that it
was ‘he commercial banks, much more than Reliance itself, which have been caught
on a sticky wicket. For a long time to come, the rights and wrongs of the so-called
“loan mela” will be hotly debated. What is really new in the Reliance affair is the
scale and the masterly skill with which Ambani had the banks failing over each other,
only to reveal the hollowness of an over-regulated system. One friend in the press
who defended Reliance was the editor of The Times of India, Girilal Jain. Almost
alone, the Times had attacked the decision to ban conversion of nonconvertibles, in
an editorial headlined ‘Not Credible’ on 18 June. If the decision had been taken to
prevent speculation, it asked, why had the authorities not acted when the price of
the debentures started rising six months earlier? My had Reliance been led to believe
conversion was in prospect, as late as the 4 June officials’s meeting which had given
in-principle approval? But Jain was embarrassed when rival newspapers reported
that he himself had subscribed to 3000 of the Rs 100 F Series of Reliance in July
1985, and that he had been given a loan by the Bank of Credit and Commerce
International for the purchase. The loan was confirmed in a letter to the Reserve
Bank of India from the BCCI’s Bombay branch on 23 June 1986. Reliance I denied
the company had arranged the finance for Jain; its deposits with BCCI later in 1985
had been in the normal course of business.
Dhirubhai decided to take his defence directly to the public, in a series of 15 fullpage advertisements taken out at the end of July in newspapers across India,
including the Indian Express. A Concern for Truth’s one was headed: ‘Then our
Chairman told 30000 investors at our recently held annual general meeting in
Bornbay that not a single F series debenture was either directly or indirectly held by
his family, it drew the curtain on yet another controversy ...’Why would it have been
necessary to prop up the issue, when it was oversubscribed by Rs 1.3 billion, which
had to be returned? Only Rs 160 million had come from corporate investors in any
case. And far from increasing control, the promoters had been reducing their
holdings. ‘My sheer hard work and innovativeness [sic], Reliance had reached the top
without any rupee borrowings from banks or financial institutions, directly or
indirectly, for capital expenditure of the new projects. Under the heading ‘An
Allegiance to Ethics’ the company explained that ‘The ethics of business’s were
ground rules that should never be violated if a company was to grow, and these were
enshrined in the Reliance boardroom. But that does not stop us from being
innovative and forward thinking. That does not prevent us from taking the normal
business risk as well as, the abnormal one sometimes to ensure that our investors
get the best return on their money. This year we have paid out Rs 25.75 crores
[257.5 million] in dividends. The highest in Indian corporate history. This does not
come from sitting back and complaining about the inadequacies of the market or the

system. It comes from a dynamic perception of the role of corporate enterprise: as a
catalyst that helps move the nation ahead. But never at the cost of ethics. And this is
a fact that everyone who interacts with Reliance will testify to.
We value growth but with dignity. We pursue profits but with integrity. ...Under A
Matter of Style. The advertisements extolled the company’s search for excellence
while under A Feel for Tomorrow’s they claimed Reliance was among the few
companies planning for growth in the years ahead. An Obsession for Technology’s
said the company’s plants had been acclaimed by the World Bank and others as the
most modern: ‘To wonder we chose FTA.’ And so on, to the finale, An Occasion for
Thanks’, emphasising that 1.8 million investors had shares in Reliance. The Indian
Express began attacking the Reliance assertions even before they ended, in
particular the claim in A Concern for Truth’s that not a single F Series debenture had
been held by the Ambanis in any way. Under the headline ‘The advertisement that
tells a lie’s the Express pointed to the bank loans made, for the purpose of buying F
series script, to companies like Shangrila, Vimal and Mac Investments in which
various Ambanis and Meswanis were listed as shareholders. The Reliance
advertisement could only be true ‘If the money was borrowed for one purpose but
was used for quite another’s where then did the money go?
The answer was to come two months later, when the central bank’s Rangarajan
committee gave its final report on the loan mela. It found that the 43 companies
linked with Reliance had borrowed Rs 599.8 million from banks in India during 1985.
These loans had not been used for buying F Series debentures after all. However,
significant portion of the bank loans had been utilized to sustain the purchases of
shares made earlier by substituting credit raised elsewhere by bank credit’. On 30
June 1985, before the loans, the companies had a combined liability on account of
share purchases of Rs 380 million. Six months later the liabilities had been reduced
to Rs 5 million. The loans had been secure and profitable for the banks, but were not
justified in the light of their end use, which the banks had not bothered to check.
Reliance immediately claimed it had been cleared of all charges made by the press
over the loan mela. The amount involved was not the claimed Rs 1.0 1 8 billion, and
the loans had not been used to prop up the F Series issue or make speculative gains
from it. The banks had complied with the guidelines on taking shares as securities,
including transfer of ownership.
The Indian Express said Rangarajan had not looked at the loans given outside India
by the banks. The Bank of India, the Bank of Oman and Canara Bank had given Rs
440 million to persons outside India as nominated by Reliance, and only for the
acquisition of the F Series. Add this to the loans given in India and the original figure
for the loan rnela was exceeded. In addition, the loans appeared to be in breach of
lending rules, since banks in India could lend only against securities already in
existence. The report had actually brought out a more serious misdemeanour than
the one originally reported: the loans had been used for sustaining the sharemarket.
And the borrowing companies had misrepresented to the banks the purpose of the
loans. Dhirubhai had already tried to counter the Indian Express campaign by direct
rebuttal.
On 8 August 1986, his chief New Delhi lobbyist, the Reliance vice-president V
Balasubramanian, sent a reply of more than 60 pages to the Express, assembling
many of the points already made by the company and elaborating on several of the
disputed subjects. For six months now your daily and sister publications have been

carrying a relentless, campaign of corporate character-assassination against Reliance
Industries Ltd,’ he began.
Each one of the stories in the series, and the campaign as a whole, has been false in
fact and malicious in intent ... At every stage in this corporate witch-hunting
campaign, the [Express] has brazenly violated every journalistic norm and its own
professed creed of fair play and truthful reporting by lending its columns to our
adversaries and rivals whose political and business interests we have refused to
serve and of which your non-journalist pen-pusher is a self-admitted volunteer
member ... The campaign has sought to destabilise Reliance by under- mining its
investors’ confidence, creating distrust in public mind [sic], and sowing seeds of
suspicion in the minds of decision makers about Reliance. The witch-hunting
campaign has been aimed at creating a psychological environment of hostility
against Reliance, and an ambience among decision-makers and parliamentarians
that can subserve [sic] the interests of the business rivals of Reliance and other
vested interests. The next immediate target of your campaign will obviously be to
sabotage our most prestigious PTA project, which is introducing the most advanced
and latest third generation technology in its area of operations and which on
completion will save the national exchequer an outgo of Rs 800 million a year by way
of total import substitution ...Some of the rebuttals were valid enough. The nonresident share acquisitions were unlikely to turn into a foreign exchange drain, as
few such investments were liquidated and, if they were, capital gains tax of 50 per
cent or 65 per cent would apply, and then the investors would suffer from a less
favourable exchange rate due to the rupee’s constant depreciation over the years.
Certain other points were disingenuous: Balasubramanian said that conversion of
debentures would lower the foreign exchange outgoings, as much less would be paid
in dividends than in interest. He did not discuss sale of the shares after conversion.
As for the ownership of the offshore companies, non-resident Indian control had
been verified to the central bank’s satisfaction. As for the August 1982 lifting of the
Rs 100 000 investment limit, it is well known that the intimation of removal of
monetary ceiling was sent to the [Reserve Bank] by the Finance Ministry nearly six
weeks prior ... If Reliance had benefited from various industrial policies, it was
because its performance had been better or it had done its homework well
beforehand. Other companies not mentioned by the Express had also received
licences for products in competition with Reliance. Licences were given under several
ministers, not one particular person (an obvious reference to Mukherjee).
The figures on the company’s monopoly power were much lower than those in the
Express series. Instead of 18 to 62.5 per cent of national licensed capacity,
Reliance’s licensed capacity ranged from 7.5 to 34.84 per cent. The letter did not go
into Reliance’s capacities as a proportion of national installed capacity, which might
have been closer to the Express figures.
On the allegation of smuggling in a new polyester flament yarn plant along with its
declared polyester fibre plant, Balasubramanian called this absurd and [a] fgment of
imagination of the writer’s , which trespassed the limits of decency. Equipment was
imported against a list attached to the relevant capital goods licences, and the
contents verified by Customs. ‘..What the writer is alleging is incompetence of the
government authorities who scrutinised the import and cleared [it],’he said. It was a
well-known fact that the output of synthetic fibre plants could be much higher than
licensed capacity, depending on efficiency and the denierage (thickness) of the yarn.
No company would smuggle in a plant because it would lose the benefit of

depreciation, investment allowances and other deductions against income. Reliance
Industries Ltd belongs to 18 lakh [1.8 million] investors and no management would
be foolish enough to inject funds of the magnitude of Rs 100 crores [1 billion] for
bringing in a plant, the benefit of which has to be shared with the investors, the
government, and the consumers of the end product. Balasubramanian’s letter was
just more ammunition for Gurumurthy, who responded on 19 August under the
headline ‘The answers that answer nothing’. Setting out his original charges in one
column, he listed the Reliance replies against them alongside, and in a third column
his comments on the replies. Against many of the accusations, he noted, Reliance
had made no response at all. In others it had been selective in what it addressed.
Where his articles were attacked, Gurumurthy stood by his major points. Three
weeks later he was back on the attack. In a three-part article over 9-11 September,
he alleged that with the connivance of officials in technical departments the new PTA
plant at Patalganga included plants for producing the feedstocks directly required
without seeking separate licences for them. Instead of using the petroleum
derivative paraxylene as feedstock, Reliance would start with the next product up the
petroleum chain, napththa. There is no way of producing M from napththa without
first producing paraxylene,’ Gurumurthy noted. It is like saying that a bicycle is
made from iron ore. As well as a paraxylene line, Reliance was installing its own
plant to extract benzene, another napththa derivative used to make the detergent
ingredient LAB, which the company was also producing at Patalganga. To secure the
naptha it needed, Reliance was lobbying to have output dedicated from the
government-owned Bharat Petrochemicals Ltd refinery in Bombay and sent to
Patalganga through the refinery’s pipeline. Bharat Petrochemicals’ own plans to
make paraxylene should be dropped because of environmental concerns, Reliance
had suggested in a letter to the Department of Petrochemicals.
In addition, the PTA plant included a 25 000 kilowatt power plant, which Reliance
was later to explain as a lift included within the overall plant cost by the British
suppliers of the PTA plant, the engineers John Brown Ltd, even though the generator
was of German manufacture.
By that time, Gurumurthy’s report on the smuggled yarn capacity at Patalganga had
led to an official inquiry On 20 August a team of six officials and engineers from
relevant ministries arrived at the Reliance factory to see exactly what machinery was
installed. They looked around, and asked some questions to which answers were
demanded by the next afternoon. According to a report on the mission by its leader
M. S. Grover to the Ministry of Industry on 10 September, Reliance either did not
give the information timely or the information given was inadequate’ .Reliance
executives were disputing that any precise tonnage could be assigned to a given
plant. With constant meterage (length of fibre produced) almost any tonnage could
be produced by varying the denierage (thickness) of the flament, it maintained. In
its applications for licences, Reliance had made certain denierage specifications.
At no stage had the government told it of any policy decision that the controlling
factor was the tonnage. The officials met Reliance representatives a second time at
the Customs House in Bombay on 22 August. The answers were still not satisfactory,
and several other follow-up meetings were held in New Delhi, leading to a
presentation by Reliance on 1 September. The officials were still unsatisfied: Reliance
refused to give precise specifications of equipment because it was proprietary
knowledge.

The committee asked Reliance at least to explain how the capacity of the PTA unit’s
air compressor-a component that gave a clue to the overall plant capacity-was
nearby 50 per cent greater than needed for the licensed plant, and how the polyester
flament yarn plant came to have 12 spinning lines instead of the eight cleared for
import. On the first
point, the officials appeared to have been left uncertain. On the second, Reliance
said the four extra spinning units were made from disassembled parts shipped with
the four second-hand spinning lines brought in as part of the balancing equipment in
1984.In their conclusions, the officials knocked down the denierage arguments about
capacity, and homed in on the one fact that was obvious to the eye. Instead of the
eight spinning lines that Reliance was cleared to import, its factory was operating 12
lines.
Nowhere in any of the documentation produced by Reliance could any reference be
found to this additional capacity. As for the complete flament yarn plant, the
inspectors rated its capacity at between 55 000 and 63 000 tonnes a yea,-more than
double the licensed output of 25 125 tonnes.
The report, crammed with numbers and dry engineering detail, was passed to the
Customs Service, which then looked back through the records of equipment imports
by Reliance. It was to lead four months later to Bombay Customs, so often apathetic
to Dhirubhai in the past, handing Reliance a show- cause notice alleging the
company had smuggled in spinning machines and undeclared industrial capacity
worth Rs 1.145 billion. The Customs put the duty evaded at Rs 1.196 billion, and
invited Reliance to ask why this should not be levied. In addition, the company faced
the possibility of fines up to five times that amount and confiscation of the smuggled
goods, while individual executives could be prosecuted for smuggling.
If huge steel structures that occupied 20000 square feet of factory space could be
smuggled into India, what could not? Gurumurthy was to ask. Why not guns? Tanks
and missiles even? Compare the case with which it was accomplished with the
torment of someone landing in India with a few saris in his bag for his pestering wife,
unable to make up his mind on whether to move towards the green channel or the
red channel,’ he wrote.
With this homely touch, Gurumurthy rounded off what must rank among the most
powerful examples of investigative journalism anywhere. For the time being, at least,
Gurumurthy had certainly closed the green channels for Dhirubhai Ambani.

SLEUTHS
To see Bhure Lal on his evening walk around New Delhi’s Lodhi Gardens was to know
at once a man not easily diverted from his objective. Military-style moustache always
neat, eyes narrowed on some distant point ahead, arms swinging, Bhure Lal attacked
his exercise routine with the intensity of a soldier on a desperate forced march to lift
a siege. Friends among the senior bureaucrats who favoured the Lodhi circuit
struggled to keep up with his blistering pace.
The military bearing was no affectation. Bhure Lal had joined the Indian Army on a
short-term officer’s commission soon after the Chinese attack along the eastern
borders in 1962, and saw action against Pakistan in the 1965 war. He retired from
military service with the rank of captain in 1970 when he won a place through
examination in the elite Indian Administrative Service. After several district posts in
Uttar Pradesh, he became a secretary to V P Singh when he was the state’s chief
minister. At the end of March 1985, just after Singh as Rajiv’s finance minister had
declared his war on the black economy, Bhure Lal was made Director of Enforcement
in the Ministry of Finance, responsible for finding transgressions of India’s highly
detailed and restrictive exchange control laws. By early 1986 he too had joined the
attack on Dhirubhai.
The Director of Enforcement enjoyed wide discretionary powers about whom he
investigated, and was allowed to operate with minimal circulation of reports outside
his own office to avoid compromising arrests and search raids. In addition, Bhure Lal
had the confidence of his immediate superior, the Revenue Secretary in the Ministry
of Finance, Vinod Pande, who in turn was a confidant of V P Singh himself. It was a
closed circle that frustrated Dhirubhai’s network of sympathetic officials within the
Finance Ministry, among whom many fellow bureaucrats and politicians placed the
able and ambitious head of the ministry, the Finance Secretary, S. Venkataramanan.
Bhure Lal made his first foray overseas to pick up Dhirubhai’s hidden financial trails
in May 1986. He went to London to look into the ownership of the Isle of Man
companies, but found a baffling wall of secrecy in the tax havens. He travelled to
Leicester in an attempt to persuade the Shahs to talk, but arrived a few days after
the family head, Krishna Kant Shah, had died. His attempt to prosecute the Kirloskar
group over its alleged front company in Germany had also failed because the suspect
company’s financial statements could not be sequestered.
The Enforcement Directorate also raided the Bank of Credit and Commerce
International in Bombay, and brought charges against its local general manager and
five other staff under the special law against smuggling of currency, which went by
the acronym COFEPOSA. Bhure Lal met the head of the BCCI’s Asian operations,
Swalch Naqvi, and offered to go soft on the bank’s staff provided it. supplied A
details of Dhirubhai’s suspected transactions to fund the purchase of Reliance shares
by the offshore companies.
Naqvi agreed, but reneged once back in London and asserted that as a Luxembourgdomiciled bank the BCCI was not bound by Indian law. The BCCI was shut down by
the Bank of England and other western central banks in 1991 and allegations that it
was a major money-laundering operation for drug traffickers.

To clinch a prosecution under the Foreign Exchange Regulation Act, the enforcers
needed to produce evidence of the overseas record of a havala transfer. Bhure Lal
became convinced that his intelligence agency would have to tap non-official sources
to obtain the breaks it needed to build a case. But the private investigation agencies
he found in London were too expensive for his office to hire out of its discretionary
funds. Requesting a special budget would have blown the cover completely on his
inquiries.
India’s own embassies in foreign capitals were worse than useless. In a later note on
his 1986 inquiries, Bhure Lal complained that any information given to Indian
missions was usually passed on to the suspect. When the Enforcement Directorate
had sought information from the Indian Embassy in Washington about suspected
secret commissions paid by the American grain trading giant Louis Dreyfus Corp to
the New Delhi industrialist Lalit Thapar’s Balarpur Industries, the embassy had
telexed a vigorous complaint back to the Ministry of External Affairs.
The enforcer discussed his dilemma in September with his superior, Revenue
Secretary Vinod Pande, who in turn raised the problems during his frequent meetings
with V P Singh. The finance minister gave his clearance to the proposal to use
foreign investigating agents, on condition that any payments be made after receipt
of evidence. The choice of the agents and other operational matters were left to the
Director of Enforcement.
It was left to Gurumurthy to point Bhure Lal towards the help he needed. The two
had met first in July, in the coffee shop of New Delhi’s Janpath Hotel. Thereafter
through the second half of 1986 they had had informal meetings when Gurumurthy
was in the capital, in the Taj Mahal hotel’s coffee shop, in Nehru Park and then at the
Indian Express guesthouse.
Gurumurthy had also been in London in May, on a separate visit. With Goenka’s
resources behind him, he had not been deterred by the expense of British sleuths.
But the inquiries by King’s had come to an impenetrable wall of secrecy in Panama
and Dubai. His attention was turning to the United States where initial inquiries had
not unearthed much evidence.
Parallel with his published articles, Gurumurthy had circulated a stream of detailed
position papers to concerned officials and politicians about the various allegations
against Reliance. In some cases, these papers made recommendations for corrective
action - some of which were taken up, as with the banning of conversion of
nonconvertible debentures---or for further investigation.
Nusli Wadia had also kept up his contact with Rajiv Gandhi about Reliance. The two
got on well: they were of similar age, each had a Parsi parent, and both were
considerably more cosmopolitan than their everyday cohorts. Early in 1986, the
prime minister agreed that Reliance should be targeted. As a picture emerged more
fully of Dhirubhai’s operations, Rajiv also agreed that the case of the smuggled
factories, and the disguised payments that must have been made for them through
illegal havala channels, were the most vulnerable points on which Dhirubhai could be
nailed. Rajiv wanted to hear first-hand from Gurumurthy the full story. Accordingly,
arrangements were made through Wadia for a series of meetings over a week
around the end of August, just before the prime minister was to travel to Harare, the
Zimbabwe capital, for a gathering of Commonwealth heads of government. In the

event, Rajiv did not attend the meetings and had the veteran Congress politician and
Gandhi family loyalist Mohammed Yunus speak to Gurumurthy instead.
In late September Nusli Wadia was also making inquiries while on a visit to New
York. The American-based Praful Shah, who had been listed as a shareholder in
some of the Isle of Man companies, remained a mystery. Seeking a way of
pressuring Shah to talk, Wadia consulted a New York accountancy firm called
Kronish, Lieb, Weiner & Heliman to see if Shah had been breaking any American
laws. A partner advised that an American resident such as Shah would have had to
declare any income derived from the investment in his name, whether or not it was
distributed to him, and that the sale of his shares would be a taxable event.
In October, Gurumurthy made a second trip to London, where he was given the
name of an up-and-coming private investigation agency based on the outskirts of
Washington, the Fairfax Group. The agency had been founded in 1983 by a former
government anti-fraud investigator named Michael Hershman, then 41, who had
worked with the US Senate inquiry into the Watergate scandal and had been deputy
auditor-general with the US Government’s Agency for International Development,
visiting India several times on AID business. The Madras accountant went on to
Washington, and spoke to Fairfax on behalf of Goenka.
By then, Gurumurthy had published his articles on the smuggled flament yarn
capacity, and it had become clear that the counter-parties to any secret payments by
Reliance would have been either the suppliers of the equipment, principally Du Pont,
or the American firm that arranged the purchase and the shipment of second-hand
plant, Chemtex Fibers Inc. Hershman pointed out that he would need an authority
from the Indian Government to get the companies to divulge material they would
otherwise classify as commercial in confidence.
Hershman was about to make a visit to Korea, where the government had retained
Fairfax to advise on security for the 1988 Olympics in Seoul. Gurumurthy asked him
to extend his trip to India, which he did, arriving in New Delhi early on 15 November
and checking into the Oberoi Hotel. Over the three days of his stay, Hershman was
introduced by Gurumurthy to Bhure Lal, and reached agreement to work for the
Government of India in return for a contingency payment of 20 per cent of any
moneys recovered-a reward in line with standard payments to informers by the
Enforcement Directorate, though the amounts involved were potentially huge in the
Reliance case.
The three subjects for investigation were Du Pont and Chemtex, regarding the
supposedly smuggled yarn plant, and the Bank of Credit and Commerce International
about the financing of the non-resident investments in Reliance.
On the BCCI, Hershman started making inquiries in London during a stopover on his
way back to Washington, and was soon made to realise he was - on dangerous
ground. A tough-looking young Sikh knocked on the door of his hotel room, and
warned him against asking questions about BCCI.
It was not until 21 December that Bhure Lal arrived in New York to get down to work
with Hershman, who came to his hotel along with his vice-president at Fairfax,
Gordon McKay. On 22 December they went in to see Joseph D. Bruno, head of the
Criminal Investigation Department in the Internal Revenue Ser- vice. Bhure Lal
sought from Bruno whatever help could be provided to trap certain well-known

operators of the Indian havala trade providing dollars in the United States in return
for rupee payments in India which Bruno agreed would be illegal in the US if they
exceeded US$ 10 000 and had not been cleared under American foreign exchange
laws. Bhure Lal asked for help on the Dreyfus case, involving the alleged US$3
million commissions on supplies of cooking oil to India’s State Trading Corp over
1982-86. And he followed up on the same lines as Gurumurthy and Wadia in the
Reliance puzzles.
Bhure Lal detailed the involvement of the New York legal clerk Praful Shah in the Isle
of Man companies, supplying the company names and the amount of dividends and
interest on debentures that should have accrued to him from Reliance. This income
had not been declared to US tax authorities, Bhure Lal said. Praful Shah did not have
the resources for the investments put in his name, and had claimed to the nominee
of Krishna Kant Shah in Britain, who had died in May 1986. But nor was K. K. Shah
rich enough, and he had not declared his investments to the UK tax service. The real
investor was suspected to be an Indian who siphoned off funds in a clandestine
manner and got them recycled through the Shahs, thereby evading payment of taxes
in India. Praful Shah re-fused to disclose his source of funds, and Bruno was urged to
investigate.
The Indian official then mentioned the role of BCCI, through its London operations, in
the Isle of Man investments, citing the names of senior BCCI executives including
Swaleh Naqvi, and a Mr Abidi (probably referring to the BCCI’s founder, Agha Hasan
Abed!). The BCCI had provided much of the funding to ten of the Isle of Man
companies over 1982-83, along with the European Asian Bank in three cases,
channeling the loans through the company facilitators in the island tax haven. The
loans had been repaid in New York on 14 June 1985 by credits to the two banks.
Who had made the payments? and how? Who had stood guarantee against the loans
by the two banks?
Along with Gordon Mckay and a lawyer from a Delaware law firm named J. E. Liguori,
Bhure Lal went on to the Du Pont headquarters at Wilmington to tackle the chemicals
giant. The trio were met by a director, E D. Oyler, and a legal adviser, Geoffrey
Gamble, and handed over a sheet of 15 questions about payments for the purchase
of plants and technology by Reliance, and a list of 25 offshore companies including
many registered in the Isle of Man to see if these had been party to any
transactions.
A week later, on 30 December, Gamble called Bhure Lal and handed over Du Point’s
reply to the questionnaire. Bhure Lal was deeply disappointed in the answers, which
he felt had flicked the ball on to Chemtex and given Du Pont itself some escape
clauses. To the best of our information and belief at this time, the capacities of the
plants are as indicated in the contracts which were approved by the Indian Govt,’ the
document said.. To the best of our information and belief, no second-hand
equipment has been sold directly by Du Pont to Reliance from Canada, the United
States or anywhere else. Was any other equipment procured by Chemtex? To the
best of our information and belief, no.’ Did Reliance pay amounts to Du Point prior to
approval from the Government of India other than from India and were those
payments adjusted by Du Pont after receiving money from India after approval?-’No.’
Did Du Point have any business relations in India with [25 names of Isle of Man and
other investment companies]?-No reply was attached.

Bhure Lal had found most of the people he wanted to meet in Chemtex to be out of
town over the Christmas-New Year period. He got through to an assistant legal
counsel, who suggested he call the company offices on 2 January, Bhure Lal’s last
day in his authorised tour, already extended once. He rang, and found the office
closed.
After returning to New Delhi on 3 January 1987, Bhure Lal continued to correspond
with Du Pont by telex and letter, with Fairfax acting as his agents in Washington. He
reported verbally to Revenue Secretary Vinod Pande, who was busy with budget
preparations and did not want to hear details. On 29 January, the Du Pont lawyer
Gamble gave five more documents to McKay. Bhure Lal was again disappointed: the
papers concerned agreements made in 1981 for the original polyester yarn plant at
Patalganga, not the additions made over the following five years. On 11 February, he
wrote again to Gamble with eight further questions.
The enforcer had meanwhile met an executive vice-president of Chemtex, Jullo J.
Martincz, who had come out to India around 21 January -to avoid dealing with the
Fairfax agents, Bhure Lal suspected. Martinez promised full cooperation, but his reply
sent on 2 February failed to satisfy Bhure Lal, who wrote back: As I told to you over
phone, I was disappointed with your inadequate response and cannot help feeling
that your letter conceals a distinct unwillingness to come out with correct facts, your
assurance of cooperation notwithstanding. Bhure Lal enclosed a six-page list of
queries about the equipment supplied by Chemtex to Reliance from Du Pont’s Hamm
Uentrop Plant in West Germany. He wanted details of payment, copies of documents
such as invoices, certificates about the condition of the machinery, and a detailed list
of items. How was it, he asked, that the three spinning units originally supplied by
Chemtex (for a nominated 10 000 tonnes a year of polyester flament yarn) had
resulted in actual production of 18 000 tonnes, when the additional nine units gave
only a further 1 5 000 tonnes in installed capacity and 6000 tonnes in actual
capacity?
By that stage, government engineers had confirmed the presence at Patalganga of
machinery imported without licence. The Ministry of Industry had accepted the
Reliance explanation that four of its spinning units had been split into eight units to
suit layout requirements’ but the Finance Ministry had not been convinced. After
further inspections at Patalganga in December, the Customs Directorate issued its
show-cause notice on 10 February 1987 charging Reliance with smuggling and
under-invoicing plant worth Rs 1.14 billion and evading duty of some Rs 1.2 billion.
Who had paid for the smuggled machinery and how?, Bhure Lal wondered. In
addition, who had paid Du Pont the royalties due for extra polycondensation capacity
and spinning lines which amounted to something between US$6 million and US$12
million?
Du Pont and Chemtex could not be forced to answer, unless Fairfax found some
breach of American law in the transactions. But they might find themselves
blacklisted in the world’s second most populous country, where levels of textiles and
chemicals consumption were extremely low. Indians were quick to take offence at
any implied disparagement of their sovereignty by foreign multinationals, and the
disaster at the Union Carbide plant in Bhopal, where thousands of Indian residents
had been killed or maimed by a toxic gas leak in 1984, had hardly helped the image
of American chemical companies.

While the law enforcers were closing in on his foreign transactions, Dhirubhai was
under increasing pressure on the home front. The successive accusations in the
Express and the mounting load of show-cause notices against Reliance had allowed
the bear operators in the Bombay sharemarket to get the upper hand for the first
time in several years. Led by the veteran broker Manubhai Maneklal, the bears
pushed down the Reliance share price from its peak of nearly Rs 400 towards Rs 200
at several moments during the year.
In spite of the defiant message given in June by Dhirubhai before his assembled
share-holders at the Cross Maidan, the company was undergoing its first profit
squeeze since it went public in 1977. The ban on conversion of its E and F Series of
debentures had swollen its interest bill, and the removal of the anti-dumping duty on
polyester yarn and additional duty on PTA imports had sharply cut the profit margins
on its products.
Dhirubhai desperately needed more cash in the company. An attempt to float a new
finance and leasing affiliate, Reliance Capital &- Finance Trust Co, at a substantial
premium had been rejected by the Controller of Capital Issues. He had proposed that
Reliance Capital &- Finance Trust, incorporated in March 1986, he listed at a Rs 25
premium on its Rs 10 shares-a virtually unheard-of privilege for a company with no
track record of trading, let alone profits. The issue would have raised Rs 1.25 billion
in equity which, given the leasing nature of its business, Dhirubhai would have been
able to gear ten times by issuing high-interest debt instruments to the public. The
proposed premium was rejected in August, and Reliance Capital was to remain
unlisted until April 1990, when its shares were offered at par. The answer was the
Reliance G Series of fully convertible debentures opening on 29 November 1986. In
June, the directors had proposed an issue of 20 million debentures of Rs 200 each to
existing share and debenture holders. This would bring in Rs 4 billion, and with a 25
per cent retention of any excess subscriptions a total of Rs 5 billion-making it India’s
biggest ever issue at that time. Each debenture would he convertible into one
Reliance share on 30 June 1987, earning 13.5 per cent interest until then.
Within a little more than six months from a successful issue, Reliance would once
again transform debt into massive new capital.
By the time the extraordinary general meeting that was needed to approve the issue
convened on 28 August, the premium on conversion had been pared down in the
light of the less favourable market. The company now proposed an issue of 32
million debentures at Rs 125 each. Reliance would raise the same total but would
have to dilute its share base a lot more. The share-holders accepted Dhirubhai’s
forecast of increased profits for 1986. Half a dozen of their fellows criticised the
sustained vilification of the company among them a former deputy governor of the
Reserve Bank of India, R. K. Hazarl, and one Bharat Shah, identified to reporters as
a non-resident investor from West Asia but in fact Dhirubhai’s own Middle East
Coordinator who had figured in the F Series bank loans.
Dhirubhai could still run a good meeting. But the question was: did the Ambani
magic still work in New Delhi and in the market?
The answer to the first part was no: on 27 October the Controller of Capital Issues
eventually cleared the issue, but only on condition that each debenture would
convert to two shares. In other words, the premium on the basic Rs 10 share had
been brought down from Rs 190 to Rs 62.5. Even then, it was going to be a tricky

issue to market. Income tax authorities raided sharebrokers in mid-November,
causing a brief shutdown
at the Bombay exchange, and locking up large volumes of share certificates for
inspection. Several other big issues were also planned for December, in a market
where the bears were dominant.
Dhirubhai decided to go in quickly and boldly. At a press conference on 11 November
he admitted the polyester market was bad. ‘But as far as Reliance is concerned,
there would be no adverse impact on the company’s profitability, which will be higher
than last year,’ he said.
On 19 November, Reliance began another series of bold advertisements in the press
across India. ‘That can Reliance give you for Rs 145 that nobody else will?’ , it
began.
As you probably know, a Rs 10 Reliance share today is worth Rs 225 in the open
market. So nobody will sell you a Reliance share for less. Excepting Reliance. That’s
what this advertisement is all about. Another profitable opportunity from Reliance. A
convertible share issue which offers you not one, but two Reliance shares for an
unbelievable price of Rs 145 after conversion ...‘The series went on under the
headline ‘hat can you say about Reliance if ...’ with a different facet of the company
picked up in each: that it was the third largest in the private sector, now diversifying
into petrochemicals; that in nine years its sales had multiplied nine times, its assets
42 times and its profits 24 times; and so on. Another ad showed a husband and wife
wondering whether to buy a new refrigerator or invest in the Reliance bonds. Why
not do both? was the message: take the profit on sale of the shares after conversion
and then buy the fridge.
Directed by Dhirubhai, and executed by a dozen leading stockbrokers--chief among
them Nimesh Kampani of J. M. Financial &- Investment Consultancy Services, and
Vallabh Bhansall of Enam Financial Consultants-Reliance had some 15 000 of its
retail outlets, wholesalers and suppliers set up as collection centres for subscription
forms, some of them formally appointed as sub-brokers. Scooter-rickshaws fitted
with loud- speakers cruised the streets of Bombay and other cities, sparking the
issue. In Ahmedabad, Reliance had subscription forms scattered from a helicopter
over the suburbs. The big American stockbrokers Merrill Lynch were engaged to
market the debentures to non-resident Indians worldwide.
On 26 November, three days before the issue opened, the Indian Express began a
counter-campaign. Under the cross-heading Reliance G series debentures which
promised yet another multi-part criticism, the main headline called the Reliance
advertisements A disinformation campaign to sell bonds’. The glib lines were typically
enticing to Reliance share and debenture holders. ‘But the Reliance family memberits shareholder-is torn between the tempting promises from Reliance and his own
experience of the recent past. He knows that he must think along practical lines, and
distinguish the myth from the reality. He now suspects that the tailor-made
situations of the past, in which Reliance jumped the queue with impunity and
flourished through its stage management of the government, are over. Just look at
the refusal of permission to convert the F series bonds, or the removal of the Rs 15
000 a tonne dumping duty on polyester yarn. The impact of these decisions on
Reliance’s finances had not been told to shareholders. The company had gone into
disinformation instead. On 27 June 1986, it had claimed that its working results for
the first five months of 1986 were better than for the same period a year earlier. Yet

the obligatory disclosures in the prospectus for the G Series showed a vastly
different picture: profit for the first six months had been Rs 225.6 million as against
Rs 630 million for the first half of 1985 and Rs 610 million in January-June 1984. The
second half of the year would be even worse. Even the claimed first-half profit was
suspect, as the company had counted discounts given to its wholesalers in the form
of credit notes as part of sales figures. The days of super profits are over,’ said the
Express, and Reliance must behave like any other company standing in the queue.
Political clout is no longer a credit. An attempt was made to silence the newspaper.
Later, on 26 November, one Abdul Rehman Hussein Malkani, who said he and his
family owned Reliance shares and debentures worth Rs 4 million, petitioned the
Bombay High Court to restrain the Express from publishing further articles on the G
Series issue. Assisted by leading advocates, Malkani claimed the first article
contained distorted and incorrect information-the first-half profits given for 1985 and
1984 were actually the full-year figures- causing damage to Reliance and its
shareholders. Justice N. K Parekh obliged with an interim injunction.
The Express and its editors immediately applied for a lifting of the gag order. Led by
the redoubtable senior advocate Ram Jethmalani - later to enter parliament’s upper
house against Congress-the Express undertook to correct immediately any factual
errors such as the profit figures (included by oversight), and would publish any
refutation of reasonable length given by Reliance within two days of receipt. The
articles were justified and fair comment on matters of public importance. Malkani’s
counsel argued that the lawsuit was based not on defamation but on the tort of
injurious falsehood affecting the property rights of his client-though indeed the
Express could hardly claim fair comment based upon incorrect allegations of fact.
Reliance, which had joined the case, argued it was a matter of defamation.
On 28 November, Justice Parekh lifted his order. Malkani’s attack on the grounds of
injurious falsehood had undercut his case for restraint on publication. 1-lakh said
that the public’s right to know the truth is paramount and outhalances the plaintiff’s
[Malkani’l right to protect his property rights.’Any harm caused by further publication
could be righted by monetary compensation, if proven. But the undertakings given
by the newspaper provided the opportunity for any wrong to be set right forthwith.
The next morning, the Express resumed its series, adding a correction to its first
article without comment or apology. (In fact, the figures were still wrong: the net
profit in 1985 had been Rs 713 million.) Reliance’s business success came not from
its factories but from its political clout in New Delhi. Its shareholders had come to
believe there was nothing the company’s lobbyists could not achieve. The help given
by New Delhi had scared away the bears. The reasons for the run-up in the Reliance
share price to Rs 393 in June 1986 had been exposed by the Rangarajan report into
the loan mela: speculative pressure had been generated by Reliance itself.
The share price was now on its way down to reality. Knowing that the flow, of funds
for Reliance’s price support had been cut, stockbrokers close to Reliance had begun
to borrow badla (carry- over) funds even at interest rates over 36 per cent in order
to postpone deliveries. The company had tried to give the impression that it was
back in favour-by virtue of the approval of the G Series, and a meeting between
Dhirubhai and Rajiv Gandhi in October-but these were formalities. The issue was
always going to be cleared, to fund the new projects licensed over 1984-85. The
price was the real issue.

The Express also pointed to some novel features in the G Series. Unlike those in the
earlier issues, the rights of existing shareholders to subscribe could be renounced.
This was probably because the management’s front companies, already having to
pay back their loan mela borrowings, would be hard pressed to take up their rights.
It was curious that the subscriptions reserved for the public would open on 4
December and close on 24 December, but the rights issue would stay open for 45
days. Reliance could thus get the public moneys in, and sell the rights of the front
companies later when it would not matter if a drop in the share price resulted.
Inevitably, it seemed, the market price of the debentures would tumble.
A separate article in the Express claimed that, while millions of subscription forms
were being made available through Vimal textile showrooms and other outlets,
copies of the prospectus were in very short supply. Investors were not being given
the detailed information they needed for an informed decision.
Then it was Reliance’s turn to be hit by a barrage of litigation. In the southern city of
Hyderabad, on 2 December, the Andhra Pradesh High Court made an order halting
the G Series offer to the public, on a lawsuit fled by one P Murali Krishna, a local
holder of F Series debentures. Murali Krishna said the Controller of Capital Issues
had erred in removing the rights to the G Series which Reliance had originally
proposed be attached to existing debentures as well as to shares. It was not clear
what the issue was for, or what was a fair value of the underlying Reliance shares,
which had been fluctuating wildly. The existing debenture holders had already
suffered enough: the new issue was a fraud on the public.
In Bombay, Ajit Jayantilal Modi and two other Reliance shareholders argued in the
Bombay High Court before the same Justice Parekh that the G Series issue, as it was
eventually approved by the government, did not have the valid approval of Reliance
shareholders-since it was greatly amended from the proposal put to the 28 August
extraordinary meeting. In addition, the prospectus and advertising contained false
information. And in a city civil court in Bombay, a sharebroker named Arunkumar
Jajoo obtained a stay order on the G Series, over alleged violations in the way
Reliance had given prospectuses and subscription forms to brokers and set their
commissions.
On 3 December, Reliance obtained an order from the Supreme Court in New Delhi
which nullified the Andhra Pradesh court’s stay on the issue, giving the company
more time to argue its case in the lower court. In Bombay, Justice Parekh declined to
give the three petitioners there any interim restraint order, and adjourned their case
for two weeks. (Two days later, on 5 December, the three shareholders dropped
their lawsuit.) The civil court meanwhile lifted its stay on the issue. It had been a
busy couple of days for the legal profession.
As the public part of the issue opened on 4 December, the Indian Express carried
Reliance’s reply to its articles on its front page. The letter, written by the New Delhibased vice-president, V Balasubramanian, made much of the mistaken figures in the
first article and disputed the basis of the conjectured absence of real profits in 1986.
It was part of a motivated and malicious mudslinging campaign’s to damage the G
Series issue. The newspaper ran its own commentary alongside, attacking the
company’s response as ‘Not enlightening’. The Reliance share price continued to fall,
as word spread of the seriousness of the customs and excise evasion inquiries,
touching a low point of Rs 179 on 25 December.

On 5 December, the Central Excise and Gold (Control) Appellate Tribunal dismissed
an appeal by Reliance against the show-cause of October 1985 alleging evasion of Rs
273 million in excise. The case could go on to adjudication.
But the share price then began to climb upwards, partly as a result of a bold plan
executed by a young recruit to the Reliance finance section. Anand Jain, then 29,
had been a schoolmate of Mukesh Ambani before qualifying as an accountant. He
joined Reliance at the beginning of December 1986, when Dhirubhai was persuaded
to let him take over management of the sharemarket operations from his old
colleague Chandrawadan (Nama’s Choksi). Jain managed to get hold of confidential
Bombay Stock Exchange records giving the reported positions of Bombay’s big
stockbrokers in Reliance shares.
In many cases, these were at wide variance with the positions Reliance knew to be
the case from its own registry Jain threatened to expose the brokers, bringing down
heavy penalties on their heads, unless they immediately squared their positions by
taking delivery of Reliance shares. The rout ended, and many of the bears suffered
ruinous losses. Jain, who later went on to head the Reliance Capital & Finance Trust
arm of the group, had won his spurs. He soon became a replacement for Dhirubhai’s
late nephew Rasikbhai Meswani as the company’s chief troubleshooter and
dealmaker, the inside track to getting transactions and orders from Reliance. By the
mid- 1990s, he was being referred to around Bombay as the third son in the Ambani
circle.
By early February 1987, the G Series issue could also be claimed a dazzling success.
The block of debentures reserved for the public, worth Rs 1.32 billion, won
subscription applications of Rs 4.94 billion in total. The Rs 880 million reserved for
non-resident Indians had Rs 1.5 billion offered. Together with the Rs 1.6 billion
subscribed by shareholders and Rs 200 million by staff, the total money subscribed
came to Rs 8.24 billion.
Dhirubhai thus had Rs 3.24 billion more than the Rs 5 billion he could keep. Even
with a rapid refund scheme for unsuccessful applications, he could keep the money
to play with for at least two months.
In addition, to ease the pressure on the Reliance share price, the company’s share
registry, Reliance Consultancy Services, sat on the rush of share transfer applications
lodged just before the 29 November cut-off date for the G Series rights attached to
shares. According to stock exchange rules, ownership transfers were to be made
within one month of delivery, but by late February 1987 investors and brokers were
screaming that some 3 million shares were still in limbo. By keeping these out of the
market, the company created a scarcity of floating shares that helped keep the price
rising from the late-December nadir.
The financial pressure was off, temporarily. Reliance had the funds to complete its
PTA and LAB plants, which were way behind schedule (the polyester staple fibre
plant had opened six months late, in July 1986), and to refurbish its image of
technological prowess. And Dhirubhai could still claim that the small investors
believed in him, in their millions. Reliance now claimed the largest shareholder base
of any company in the world: 2.8 million.
But the fight against the bears in the stockmarket over 1986 to stop a freefall of his
share price had drained his personal reserves, the parallel fund that had sustained

the Ambani magic. Huge amounts had been spent on counter-publicity to the Indian
Express and efforts to block his political critics. One senior broker close to Dhirubhai
at that time estimated that Dhirubhai had lost about Rs 5 billion by early 1987, not
including the fall in value of his shareholding.
Dhirubhai would also have known by then that the Indian Express had been right in
its forecast of a drastic profit decline for Reliance, its first since listing. In fact his
forecast of a profit rise for 1986, made less than two months before the financial
year closed, in retrospect looked puzzling. The annual results for 1986 that were
published in April 1986 showed net profit had dropped to a mere Rs 141.7 million,
lower even than the first half profit the G Series prospectus had reported, and an 80
per cent fall from the 1985 profit.
And then there was the unshakeable enforcer Bhure Lal, eyes fixed ahead, who had
quickly dismissed an attempt at a conciliation by Mukesh Ambani at a meeting
granted during the year. By January 1987, Dhirubhai would have been hearing back
from his contacts in Du Point and Chemtex, and the dilemma his deals had put them
in. The Customs Service was about to issue its show-cause notice on the allegedly
smuggled yarn plant in February Dhirubhai had some more financial breathing space,
but he was still in a closing trap.

LETTING LOOSE A SCORPION
Dhirubhai Ambani needed something more. He needed to unlock the doors in New
Delhi that had suddenly become closed to him in 1985.The master key was obviously
Rajiv Gandhi-but how to win over a young man who clearly regarded Dhirubhai as
the epitome of everything that had been wrong with the Licence Raj and the
Congress Party?
Although he had grown up in the household of prime ministers, Rajiv had been born
without the ruthlessness that distinguished Indira and her other son Sanjay. Rajiv
was interested in technology and nature, a keen amateur photographer and home
computer buff, but seemed to lack the mental drive to push himself to higher
achievement. He had failed to complete his degree in mechanical engineering at
Cambridge. And until he was drafted into the party by Indira after Sanjay’s death, he
had been supremely happy flying the second-echelon turboprop aircraft in the Indian
Airlines domestic feet.
Even after five years in the prime ministership, he left some acquaintances, like the
industrialist Rahul Bajaj, with the feeling of a personality not fully matured, not
hardened into adulthood. Capable of great affection and enthusiasm, he tended to let
a rush of emotion push his judgements - as in the quickly reached 1settlements’of
deep-rooted ethnic and communal disputes in Punjab and Assam, settlements that
soon became meaningless in the absence of the follow-up measures only a skilled
politician could deliver, or in sometimes grandiose and adventurist foreign policy
initiatives.
Not too deep down, Rajiv was prone to panic. When his initiatives went awry, as they
tended to do among the deeply cynical and entrenched vested interests of his
complex country, he would sometimes overcorrect his well-meant impulses by
shabby manoeuvres or hurtful shows of a petulant temper. Rajiv had expelled the
more egregious members of his mother’s inner circle, but only to install his own
favourites. Later known as the coterie they formed a barrier between the prime
minister and his party, between Rajiv and reality. In the flattery and sycophancy that
had built up around the Nehru-Gandhi dynasty, there were few to play the role of the
court fools who accompanied the Roman emperors at their triumphs and whispered
in their cars: ‘Thou art mortal. Within a few months of his Bombay speech in
December 1985 about the Congress powerbrokers and corrupting business links,
Rajiv was starting to have second thoughts.
The speech had been mocked within the party as the thoughts of a greenhorn. The
tax and foreign exchange raids launched by V P Singh from April 1985 had brought
constant complaints from big business. Few had resulted in completed prosecutions,
but the arrests, searches and seizures--all immediately publicized were humiliating
punishment in themselves for moneybags used to getting nosy officials called off
with a quick call to New Delhi.
By April 1986, the press was reporting an imminent revolt by Indira Gandhi loyalists.
Pranab Mukherjee gave an interview defending his record, and was promptly
expelled on 27 April. Around mid-year, Arun Nehru - Rajiv’s first cousin and internal
security minister-who was also regarded as close to Dhirubhai, became estranged
from the prime minister. He was dropped from his ministry in October. In June, the
commentator M. V Kamath was writing that Rajiv’s honeymoon was over, because of
the Bombay speech and raids on industrialists.

The Times of India’s editor, Girilal Jain, was quoted as saying that big businessmen
could no longer meet the prime minister. On 6 August, Rajiv was bailed up about the
raids at a meeting with the Calcutta Chambers of Commerce, and admitted within
hearing of journalists that they may have gone too far.
In late August or early September, Rajiv opted out of the meetings arranged with
Gurumurthy In October he met Dhirubhai for their first direct and private meeting
since becoming prime minister. But it is still not clear at what stage Rajiv might have
begun to perceive Dhirubhai as an Ay. After A, the nascent revolt in the Congress
Party had featured politicians identified with the Ambanis.
There remains a wonderful story, still widely told in Bombay and New Delhi that in
their first meeting Dhirubhai bluntly told Rajiv he was holding a huge amount of
funds on behalf of Rajiv’s late mother and-wanted to know what to do with the
money. This is almost certainly apocryphal, though it became part of India’s political
folklore because it fitted with Dhirubhai’s reputation for both brazenness and keen
judgement of character. More likely, Dhirubhai used the meeting to outline his big
plans for industrial expansion.
The rapprochement seems to have been assisted meanwhile by Dhirubhai’s
implanting the perception that his enemies were traitors to Rajiv as well. In
particular, Dhirubhai would have picked on the suspicion felt by V P Singh towards
Amitabh Bachchan, the megastar of the Bombay cinema who had been drafted into
Rajiv’s winning Congress slate at the end of 1984. The Bachchan family had been
close to the Nehrus back in their common home town of Allahabad, a modern-day
administrative centre at the ancient pilgrimage site where the Yamuna River fows
into the Ganges. Amitabh and Rajiv had grown up together. Elected from Mahabad,
Bachchan was seen by Singh as a potential threat to his own power base in the
surrounding state of Uttar Pradesh. In late 1986, Singh’s staff were said to be
alleging privately, without ever producing the slightest evidence to support it, that
Bachchan, and his businessman brother Ajitabh who had taken up residence in
Switzerland, had huge wealth hidden in Swiss bank accounts.
According to a later report, it had been through Amitabh Bachchan that the October
1986 meeting between Dhirubhai and Rajiv had been arranged.
On 2 December 1986, during a debate in Parliament’s upper house, a minister
disclosed that the Central Bureau of Investigation-which comes under the prime
minister’s control, through a junior minister-had started an inquiry into whether
Gurumurthy was being given unauthorised access to secret government papers. A
leak from the Industry Ministry’s Directorate-General of Technical Development
(DGTD), the apparent basis for Gurumurthy’s articles in August about the ‘smuggled’
Reliance plants, was indicated as the specifc focus. The DGTD was encouraged to
make a formal complaint, which it did on 11 December-adding, either bravely or for
the record, that the favours purported to have been shown to Messrs Reliance
Industries Ltd by the officials of this office may also be investigated into . On 21
December, the CBI raided Gurumurthy’s office in Madras and took away a number of
documents.
The Enforcement Director Bhure Lal, who set off on his visit to the United States
later in December, is understood to have suspected he was being shadowed from
India by an agent of Reliance. Within days of Bhure Lal’s visit, a person who

identified himself as an inquiry agent retained by Bhure Lal appeared in Bern, the
Swiss capital, and began making inquiries about Ajitabh Bachchan. The Indian
Embassy and possibly Bachchan himself became aware of this. The Embassy queried
New Delhi and Bachchan may have contacted his brother.
Rajiv Gandhi was taking a New Year holiday with his family in the Andaman and
Nicobar Islands, India’s south-eastern territory in the warm tropical waters at the
northern entrance to the Malacca Strait. Amitabh Bachchan joined the Gandhis for
part of the holiday, something that was publicised accidentally when the Indian
airliner carrying Bachchan was diverted to the Burmese capital Rangoon because of
technical problems.
The Gandhis returned to New Delhi in mid-January 1987. New Delhi was in one of its
periodic military flaps about Pakistan. Earlier in the winter, India itself had conducted
army manoeuvres on its western border, but these had now concluded. Yet Pakistan
had just moved tank formations to forward areas. Rajiv called his cabinet together to
assess the threat. On the evening of 23 January, he abruptly asked V P Singh to
leave the finance portfolio and take charge of defence. Rajiv had been holding the
portfolio himself, but the situation now required a senior cabinet minister overseeing
defence full-time. Singh could hardly refuse, and the transfer was made and
announced the next day.
Bhure Lal had reported on his American visit to his immediate superiors in the
Finance Ministry, and was to file a written Tour Report later in February which
included the results of his follow-up correspondence with Du Point and Chemtex.
Soon after Singh was transferred, the prime minister’s office asked to see all the
Enforcement Directorate’s records regarding the Fairfax inquiry, and Bhure Lal
briefed the Cabinet Secretary, B. G. Deshmukh, about it on 28 January.
Around that time, his departmental head, the Finance Secretary S. Venkitaramanan,
also pressed the Enforcement Director two or three times to reveal the subjects of
his inquiries, explaining that if the ministry was going to be put in hot water he
should be forewarned. Bhure Lal demurred. The word was already out in the press
that Bhure Lal had engaged an American private eye and that his targets included
several big Indian companies and superstar politicians Later, rumours in New Delhi
suggested a private eye had found evidence of Rs 6.5 billion in a Swiss bank account
in the name of a company called Maeny Adol Brothers (perhaps a Lewis Carrolldistortion of Matinee Idol Brothers’, allegedly owned by the Bachchans and unnamed
Italians’ with Indian links.
No evidence of any such company or bank deposit was ever produced, but combined
with the appearance of the self-proclaimed investigator in Switzerland, the rumours
added to the heat under the prime minister’s friends.
The government’s legal machinery was meanwhile working against Reliance on the
customs and excise evasion questions. Dhirubhai was not yet out of the soup. But V
P Singh was uneasy. On 9 March he asked for Bhure Lal’s file on Fairfax to be sent
across to him at Defence in South Block, and annotated in a margin that he had
approved the engagement of a foreign detective.
Around 10 or 11 March, copies of two sensational letters were shown to Rajiv, most
likely through one of the senior bureaucrats in his office, Gopi Arora. The letters were
to have dire consequences for Rajiv Gandhi. How they reached the prime minister’s

office has never been revealed. Both were apparently written on the letterhead of
the Fairfax Group. The first, dated 20 November 1986, said:
Dear Mr. Gurumurthy,
Dr Harris apprised me of his useful meeting in New Delhi last week with Mr R.
Goenka, Mr N. Wadia, Mr V Pande, Mr B. Lal and yourself. Now that the group has
been retained to assist the Government of India we hope to expedite end result.
We received only US$300 000 arranged by Mr. N. Wadia. As considerable efforts
have already been made and expenditure incurred, it is advisable Mr. Goenka
arranges during his forthcoming visit to Geneva an additional US$200 000. We shall
refund both amounts on receipt from the Government of India to E Briner, Attorney,
31, Cheminchapeau-Rogue, 1231, Conches, Geneva.
We shall apprise Mr. Goenka in Geneva about the progress made on source of funds
for purchase of Swiss properties of Mr. Bachchan. We shall contact Mr. Goenka at
Casa Trola, CH-6922, Morcote (Ticini), during his visit.
Yours sincerely,
(sd) G. A. Mekay
The second letter carried no date:
Dear Mr. Gurumurthy,
Please send me the following details to continue our investigations:
(i) The details of rice exports by the Government of India to the Soviet Union;
(ii) Documents relating to the non-resident status of Mr Ajitabh Bachchan from the
records of the Reserve Bank of India. When Mr Bhure Lal visits here next time, we’ll
make his stay pleasant.
Yours sincerely,
(sd) G. A. McKay
The treachery of V P Singh and other friends like Nusli Wadia seemed confirmed.
Financed by Wadia and his mother’s old foe Goenka, the conspiracy was aimed at
striking down Rajiv through his old friend, Bachchan. The details seemed to
corroborate the plot: the Swiss attorney Briner was an old friend of Goenka’s who
had visited him in Bombay a year or so before. Casa Trola, the address where
Goenka was to -be contacted, was meant to be that of Nusli Wadia’s retired father.
(But the composer of the letter had got it wrong: the name of the house, Casa Fiola,
was actually misspelled, and it was not close to Geneva but on the Italian-Swiss
border.)
A panic-seized Rajiv handed the letters to the Central Bureau of Investigation, who
immediately assigned the case to the team already investigating the apparent leak of
the Directorate-General of Technical Development report to Gurumurthy. According
to the complaint fled by the DGTD, the relevant file on Reliance had indeed
disappeared for two weeks in July 1986, reappearing on a certain desk on 25 July,
and Gurumurthy had appeared to have drawn upon it for his August articles on the
smuggled plant.

But the CBI’s two investigating officers, Yashvant Malhotra and Radhakrishna Nair,
were reluctant to prosecute under the Official Secrets Act, originally passed by the
British in 1923 to protect the Raj against embarrassment by nationalists and only
slightly modified in 1949. How could it be used against an Indian journalist who had
exposed in a newspaper the activities of a commercial enterprise? It was hardly the
kind of offence listed in the Act: ‘Passing surreptitiously information or official code
or pass-word or any sketch, plan, model, article, note or document which is likely to
assist, directly or indirectly an enemy ...’If Gurumurthy was to be penalised for his
methods, they argued, Reliance should also be investigated for the apparent offences
he had revealed.
The airfax letters seemed to give the CBI’s director, Mohan Katre, the national
security grounds that were so far lacking for an Official Secrets Act prosecution. The
bureau’s full resources were thrown into the job.
All files on the Reliance investigation were collected from the Enforcement
Directorate. At 10.30 pm on 11 March, Bhure Lal was called at his home: he was
being transferred to run the Finance Ministry section handling currency and coinage,
one of the Ministry’s most routine tasks, and was to hand over charge of the
directorate the following morning. At the same time, the Enforcement Directorate
itself was removed from the responsibility of the Revenue Secretary, Vinod Pande,
and put under the Finance Ministry’s Department of Economic Affairs, which came
directly under the Finance Secretary, S. Venkitaramanan.
On 12 March, arrest and search warrants were sent by air to Madras and Bombay. At
1.30 am that night, a CBI team arrived at Gurumurthy’s house, put him under arrest
on charges of criminal conspiracy and breaches of the Official Secrets Act, and seized
car-loads of documents. In Bombay the agency arrested the partner in Gurumurthy’s
accountancy firm, A. N. Janakiraman.
Later on 13 March, the CBI turned up and ransacked the Indian Express guesthouse,
where Goenka happened to be staying. Wadia and the controversial Hindu God man
Chandraswami (to be indicted ten years later on charges of swindling a businessman
of an attempted bribe in 1986) were calling, separately, on Goenka. Both were
allowed to leave after being searched. As the CBI detectives went through his
papers, Goenka had a telephone call. It was Dhirubhai, offering to help out in any
way he could. Goenka slammed down the receiver.
At this point, the letters and their existence were not public knowledge. The waters
were muddied even further by the splash in the Indian Express on the morning of 13
March of a highly critical letter written to the prime minister by the President of
India, Giani Zail Singh. The elderly Sikh president, who regarded himself as India’s
senior statesman, had been trying to assert himself over the young Gandhi heir. Zail
Singh had refused his assent to one government bill on postal services earlier in
1987; he accused Rajiv of not consulting him on the Punjab, where insurgency was
getting worse. He now rebuked Rajiv for undermining the President’s high office, and
warned he would not just be a ‘spectator’ to this process. That the Express should
get hold of his letter was not surprising: Gurumurthy had drafted it, and Goenka’s
close adviser S. Mulgoakar had improved the English. In their search of the
newspaper’s New Delhi guesthouse, the CBI found a copy of the draft, with the
corrections.

Brought to New Delhi, Gurumurthy was put through nearly 48 hours of straight
questioning, most of it about the supposed targeting of the Bachchans. Meanwhile,
the CBI issued a press notice that reliable information had been received on 11
March that Gurumurthy and others had been in contact with certain foreign detective
agencies and had passed on sensitive information from government files.
Incriminating evidence had been seized during the searches. Through friends who
brought in food and clothes, Gurumurthy was able to pass out the word to Goenka
that the government had possession of certain letters.
The bureau produced Gurumurthy before Delhi’s chief magistrate on 17 March, listed
four charges under the Official Secrets Act, and sought an extension of custody. The
CBI mentioned for the first time that it possessed a letter stating that Gurumurthy
had made payments to Fairfax.
Represented by advocates Ram Jethmalani and Arun Jaitley, Gurumurthy admitted
contact with Fairfax but pointed out that the investigators had been hired by Bhure
Lal. In his bail application, the Express writer said that as a journalist he was not
bound to disclose how he got access to the contents of government files, and that a
lot of relevant information had been obtained by persons working for Reliance itself a
company powerful enough to have in its possession extracts from government files
relevant to its pending demands and conduct of industry’ For its part, the CBI was
not carrying on either an
intelligent or an honest investigation’s , and was allowing itself to be used as an
instrument of blackmail and harassment. In the course of his address, Jethmalani
repeated the rumour about the Bachchans being involved with well-connected
Italians in the Swiss company ‘acny Adol’ getting the rumour in print under court
privilege for the first time.
When, on 20 March, the Calcutta newspaper The Statesman published the first of the
controversial ‘airfax’ letters, Gurumurthy’s allies and the public were able to see
what was happening. Goenka was able to point out that he was out of the country at
an international press meeting when the alleged meeting of conspirators took place
in New Delhi. Nuances of the English used in the letter-in particular the erratic use of
the definite article-showed an Indian rather than American hand. The Fairfax head,
Michael Hershman, and his deputy, McKay, said the letter was a forgery, using a
transferred letterhead from his company. It would have been stupid and
unprofessional to. put such material on paper, they said.
The evidence backing the CBI case was looking shaky, and Gurumurthy was released
on ball on 23 March after ten days confinement. Somewhat prematurely, as it turned
out, he declared that the press could trust the judiciary to help when the executive
arm of government ran amok.
On 31 March, a parliamentary debate broke out on the affair. The junior minister
helping Rajiv run the Finance Ministry since V P Singh’s exit, Brahm Dutt, had
returned from a mysterious week-long trip to Italy in February, denying speculation
that he had crossed by land into Switzerland. Dutt told parliament that Fairfax had
merely been informers for the Indian Government, provoking Singh to stand up and
share responsibility for hiring the agency. Hershman told reporters he had been
engaged by Bhure Lal, and had a letter to show it.
Dutt also revealed what seemed to be new evidence of the conspiracy. A computer
printout from the register of the Oberoi Hotel in New Delhi showed that Hershman

had been booked into the hotel under the name Harris in November 1986 by Bombay
Dyeing, and that Nusli Wadia had been staying in the same hotel during his visit.
A claque of ministers and MPs from the Congress Party then began a concerted
attack on V P Singh in parliament. The former finance minister had endangered the
national security of India by encouraging a foreign agency, one probably linked to
the US Central Intelligence Agency, to obtain damaging material on prominent
Indians. Sensitive material had been passed to Fairfax which could be used by CIA
operatives to blackmail and embarrass India.
The clamour, which went on for five days, was led by the former foreign minister and
reputed beau of Indira Gandhi, Dinesh Singh, who went to sit by Amitabh Bachchan
when he finished his own speech. The choice of Dinesh Singh, another member of
India’s minor royalty, seemed designed to counter any backlash from V P Singh’s
own Thakur caste. The beleaguered defence minister walked up to Dinesh Singh.
You’ve thrust a knife into my body,’ he said to him in Hindi. ‘What else could I have
done?’ replied Dinesh Singh, with a shrug.
That Rajiv Gandhi had countenanced, possibly encouraged, the attack was obvious to
V P Singh-a suspicion not allayed when Rajiv asked his colleagues to stop and
proposed a commission of inquiry under two Supreme Court judges to look into A
aspects of the Fairfax affair. (VP Singh was correct: Dinesh Singh later confirmed
that he had been instructed by Rajiv.)
The terms of the commission given to the panel-justices M. P Thakkar and S.
Natarajan - on 6 April also confirmed that Rajiv was interested in only one side of the
case. The two judges were ordered to report within three months on the
circumstances under which Fairfax had been engaged, for what purpose, under
whose authority, on what terms and conditions, whether the agency was competent
for the task, whether any payment had been authorised or made, what information
had been received by the government from Fairfax, what information the
government had made available to Fairfax, and whether the security of India had
been prejudiced.
The appointment came under strong attack as a diversion from a parliamentary
inquiry, where all political aspects could have been investigated, and from the CBI’s
failing attempt to prosecute Gurumurthy under the Official Secrets Act. ‘The decision
is as muddled as the original fiasco which the probe intends to resolve,’ wrote the
advocate Ram Jethmalani in the Indian Express the next day. ‘The decision is lacking
in political honesty, is clearly calculated to subvert the due process of justice and
intended only to make the judiciary a sharer in the government’s amazing follies. In
an observation that was later to get him into trouble, Ram Jethmalani also wrote that
the CBI’s counsel had admitted in Gurumurthy’s bail hearing that the two Fairfax
letters had been shown to Gurumurthy during his interrogation.
But Rajiv’s move was given credence from a weighty analyst. 7’e Times of India
editorialised that the commission’s appointment was an ‘impeccable move’s . In
several signed articles over April and May, the grand old newspaper’s editor, Girlial
Jain, urged readers to keep an open mind about the possibility of the CIA or other
sinister interests being involved in the Fairfax affair, possibly to collect material for
later use against India, and he asked whether the Fairfax Group was not semipolitical in characters . Jain had not been an admirer of Rajiv before, but it will be

remembered that he had invested heavily in Reliance debentures in 1985, with the
help of a BCCI loan.
V P Singh decided to test Rajiv’s support. The material employed was a coded
telegram to the Defence Ministry from the Indian Ambassador in West Germany,
sent around the beginning of March. In 1983, the Indian Navy had ordered two
submarines from the German builder Howaidswerke Deutsche Werft (HDW). These
were delivered in 1985, and negotiations were under way on a second pair, to be
built under licence in Bombay’s naval dockyard. The Germans had agreed to a 10 per
cent price cut, but the ambassador informed New Delhi they were unwilling to give a
further cut because they were still bound by contract to pay a 7.5 per cent
commission to the Indian agent who had originally clinched the order.
Rajiv’s government had loudly banned use of agents in all defence deals in October
1985, so it was a good test case. Singh had already asked the Finance Ministry’s two
economic intelligence arms to report on the involvement of agents in the arms trade.
On 9 April, Singh asked his Ministry’s Secretary, S. K. Bhatnagar, to conduct a full
investigation of the HDW case, and then issued a press release about it. He sent the
case file through normal channels around to Rajiv’s office at the other end of the
North Block of the Lutyens & Baker-designed Secretariat Building, annotating the
names of the London-based Hinduja brothers (part of the Hindu diaspora from the
province of Sindh included in Pakistan), whom Bhatnagar understood to be the
agents-though they later denied involvement. The file arrived on Rajiv’s desk after
newspapers published Singh’s disclosure on 10 April.
Predictably enough, his move created a renewed furore against Singh within
Congress, where the vested interests saw him as letting the side down, betraying his
own team. To those in the know it was also an embarrassment to the Gandhi family.
negotiations had begun with HDW in 1980 when Sanjay Gandhi was ascendant. The
reaction from Rajiv’s office was cool. Singh went to see the prime minister on 12
April, and did not get the support he was angling to draw out. Later that day he
resigned from the cabinet.
Events pushed Rajiv and Singh further apart. Four days after Singh resigned, a
reporter named Magnus Nilsson reported on Swedish Radio that the giant Swedish
armaments firm Bofors had paid a large commission to agents in the US$1.2 billion
purchase of Bofors artillery by the Indian Army. The Bofors deal had been signed in
March 1986, six months after the ban on the use of middlemen.
Rajiv fumbled his response, giving contradictory statements in parliament. He issued
a scornful denial on 17 April, and on 20 April said the Swedish Prime Minister, Olaf
Paime, had confirmed that no middlemen had been used. His claque of Congress
supporters stepped up their campaign against VP Singh, who spoke out in his own
defence. Within a couple of weeks, Singh was touring the country explaining that his
efforts to attack the black economy had, been subverted by the very people he was
targeting. Rajiv refused his suggestion to call a Congress parliamentary meeting to
discuss the Fairfax, HDW and Bofors issues. On 2 June, the Swedish Government’s
Audit Bureau confirmed that an even bigger amount of money than that reported by
Swedish Radio had been paid to agents.
The atmosphere became even more feverish. Since March, there had been
speculation that the disgruntled president, Giani Zail Singh, was thinking of

dismissing Rajiv and appointing another prime minister, under hitherto untested
reserve powers of his office. The Swedish audit report, contradicting Rajiv’s
assurances to parliament, could he a ground for his dismissal. On 17 June, a state
election in Haryana, adjacent to New Delhi, saw Congress almost wiped out there by
a farmer caste politician, Devi Lal, who had derided the Bofors deal in his campaign
speeches.
Zail Singh backed down when he was bluntly informed by Arun Shourie, recently
restored as editor of the Indian Express, that he would get no support from Ramnath
Goenka. The old press baron had realised that Rajiv’s replacement as Congress
leader could just as easily be Arun Nehru-perceived as Dhirubhai Arnbani’s man-as V
P Singh. The president then scouted for support from Congress dissidents and
opposition parties for him to nominate for a second term as president, running
against the official Congress candidate, when his term ended in July. The president is
elected by MPs from the central parliament and state assemblies by secret ballot, so
this provided a risk-free path for Congress to ditch Rajiv, who would have been
obliged to resign if his candidate were defeated.
But the support promised was patchy and equivocal: the old Sikh backed down, and
retired quietly in July. Rajiv was beleaguered by further evidence of the trail of
payments from Bofors pointing closer to his own circle, but he was firmly in charge
of Congress. The party would sink or survive with him. In July, it expelled V P Singh.
The dumped politician was wryly stoic in a verse penned around this time:
I have been cut into pieces.
But my value remains the same;
I was a solid coin
Now I have become small change’s
Singh’s wan mood did not last long. In September, he launched the Jan Morcha
(People’s Movement) against the government, in which group ironically enough, he
was joined by, Arun Nehru.
The Thakkar-Natarajan inquiry into the engagement of Fair- fax meanwhile ground
on, showing a wooden adherence to its narrow terms of reference and firmly closing
off avenues that might allow the erstwhile investigators of Reliance to open up the
substance of their charges. The original three-month term was extended twice, first
to October and then to December. The first four months of hearings were held in
secret, and it was only when open hearings began on 14 August that some of the
evidence produced by the government began to emerge and the bent of the CBI, as
the commission’s investigating agency, became apparent.
Only the Bombay Dyeing chairman Nusli Wadia, Dhirubhai Ambani’s industry rival,
was declared, under the law governing commissions of inquiry, a person likely to be
prejudicially affected by the inquiry . In theory, this protected him against selfincrimination and enabled him to call and cross-examine witnesses; in practice the
right was refused by the judges. Throughout the inquiry, the two judges came under
attack in the press for refusing to state what the rules of evidence were. whether
beyond all reasonable doubt , as in criminal cases, or ‘eight of probability’ as in civil
suits. Wadia was refused access to all papers put before the commission. In one
instance, a judge took evidence without notice at his own residence.
Evidence and questions were swapped between the commission and the CBI. Wadia’s
declared status before the commission gave him no protection against action by the

CBI on evidence that was presented to the two judges. On 31 July, a senior CBI
officer few to Bombay and organised the arrest of Wadia for checking into a hotel as
an Indian national. In India, foreigners are required by law to pay their hotel bills in
foreign exchange, often at a higher effective tariff than Indian guests. As a British
citizen, Wadia would have been obliged to do this on his travels within India. He
maintained he always did so but that a hotel clerk might have assumed he was
Indian when completing a register. Wadia was detained seven hours before being
granted bail, close to midnight.
Two things were clear: the CBI was using evidence collected in the course of its Fairfax investigation; and no case was too petty for the senior echelons of India’s
premier anti-corruption agency when a political enemy of the government (as Wadia
had rapidly become) was involved. On a complaint by Wadia’s counsel Ram
Jethmalani, Justice Thakkar said the commission had not asked the CBI to harass
Wadia. They were acting on their own.
Jethmalani himself faced a contempt of court complaint in a New Delhi magistrate’s
court, brought in May by the CBI which insisted it had not shown the two airfax
letters to Gurumurthy during his interrogation. The existence even of the letters was
now in question. The commission refused a request by Wadia for them to be
produced. ‘We do not know whether they exist or not,’ Thakkar said, arguing that
they were no longer relevant.
On 1 September, the day after the Indian parliament rose from its monsoon sitting,
some 400 officials under the Finance Ministry’s Director of Revenue Intelligence, B. V
Kumar, raided the eleven printing centres of the Indian Express around India. They
seized documents, inspected printing machinery and took away several employees
for questioning. Later, the agency charged the Express with evading Rs 3.3 million in
customs duty by misdeclaring the speed of a printing press it had imported, of owing
Rs 27.5 million in back taxes and of violating foreign exchange laws by making
payments abroad in cash. Many of the tax offences alleged against the Express were
already under dispute. It was noted that the leader of the raids, B. V Kumar, had
been in the customs office in Ahmedabad previously. No one in the Indian press saw
the raids as anything but a blunt warning by Rajiv to the Express, by then leading
the criticism over the Bofors scandal.
From the Fairfax office outside Washington, Hershman had given interviews to Indian
journalists, contradicting several claims made by the government. He insisted he had
been engaged by Bhure Lal, had been promised payment on a contingency basis,
and had not taken any money from either Gurumurthy or Wadia. The government
formally ended his engagement on 27 May, after V P Singh had mischievously asked
whether India’s national security was still being compromised.
To a questionnaire from the Thakkar-Natarajan Commission, Hershman asked to be
satisfied first what the purpose of the commission was, given that all the facts about
his engagement were known to the government; what action had been taken about
the forgery on Fairfax stationery, and what action had been taken on information
provided by Fairfax in the course of its inquiries. The two judges replied that these
questions were beyond their scope. ‘The commission hopes that you will be good
enough to realise that instead of co-operating with the commission and furnishing
the information, you are virtually reversing the roles’ they complained. Hershman
refused to co-operate, and became a critic thereafter of a cover-up implicit in the
commission’s role. The former Enforcement chief, Bhure Lai, had been called in for

extended and gruelling interrogation by the CBI on two occasions in late March, and
then was called to give evidence by the commission. The Revenue Secretary, Vinod
Pande, was also called. He had met Wadia several times, always in his office, first
around the end of 1985 to discuss duty revision on PTA and DMT, then to discuss an
excise raid on Wadia’s company Formica India in November 1986. But he had also
met Dhirubhai and Mukesh Ambani four or five times over 1986.Pande himself had
also been moved in mid-May. In the bureaucratic equivalent of being put out to
grass, he was put in charge of the Department of Rural Development.His
replacement as Revenue Secretary was Nitish Sen Gupta, the former Controller of
Capital Issues in the early 1980s during Dhirubhai’s golden run in the sharemarkets.
Evidence given by all the suspected conspirators was mutually corroborating, though
Bhure Lal was left quite isolated in his decision to hire Fairfax. Clearance to hire a
foreign detective on contingency had only been given in general terms by his
superiors.
The CBI wanted to prove that Wadia and possibly Goenka had been fmding Fairfax
secretly and allowing Bhure Lal to think he had hired it on contingency. But it could
not rely now on the discredited airfax letters.
The CBI needed some other clinching evidence. The CBI and the counsel assisting
the commission, the Additional Solicitor-General G. Ramaswamy, concentrated on
the hotel arrangements for Hershman in New Delhi. But these seemed to point only
to the possibility of a second forgery. A computer printout from the Oberoi Hotel
showed Hershman had been booked in by Bombay Dyeing. But this computer entry
had been created the day after Hershman’s arrival: the hotel’s management
admitted that the detail could have been given by someone telephoning in. From
Washington, Hershman said he had not met Wadia at any time, and had paid his
own hotel bill with his credit card and had the sheet to prove it. Ramaswamy went
into a detailed study of Wadia’s bill, including his laundry account and food charges,
in an effort to show he was paying for more than one person. Wadia, it turned out,
had his wife with him and his father was visiting from Switzerland. The hunt for
treason had turned into a farce.
At the end of August, just before the raids on the Indian Express, Ramaswamy was
angrily urging the judges not to take it lying down, when a magazine questioned
whether, rather than getting at the truth of the Fairfax affair, the end result of the
Commission of Inquiry would be a frame-up of Nusli Wadia.
In the outcome, when the Thakkar-Natarajan report was handed to the government
on 30 November and published on 9 December 1987, it did what Rajiv had obviously
wanted it to do. It censured V P Singh for exposing India to security risks by allowing
Bhure Lal to engage a US detective agency which employed some former CIA
officers.
The report concluded that Wadia had played an active role in the engagement of
Hershman by Bhure Lai, and had sponsored Hershman’s stay at the Oberoi Hotel
where he himself was also staying. Bhure Lal and the Government of India had been
used as instruments to serve the purposes of Wadia, who had an nimus against
Reliance through business rivalry But there was no evidence that Bhure Lal knew
about Wadia’s interest and role. It was inconceivable that Fairfax would ever have
agreed to work on the system of rewards for information.

V P Singh declared the report ‘is monument of injustice’. Rajiv Gandhi said it
completely exonerated his government and had identified those who had joined
hands with foreign agents in a conspiracy to weaken the country. The origins of the
forged Fairfax letters were never investigated nor was the identity of the detective
who had appeared in Switzerland and started inquiries about the Bachchans.
Together they showed the workings of a bold and unconventional mind, the
existence of an impressive intelligence network, and an uncanny grasp of human
weakness.
The future the letters set off caused a fatal split in Rajiv Gandhi’s government, which
just over two years earlier had won a record majority in parliament and seemed able
to achieve a transformation of India’s economy. By the end of 1987, Rajiv Gandhi
was a discredited leader heading for electoral defeat.
Possibly, his government’s decay would have happened anyway after the revelations
in Sweden about Bofors. The trail of commissions was eventually shown to lead
through Swiss bank accounts to at least one family friend, an Italian company
representative in New Delhi. But perhaps Rajiv might have faced up to this scandal if
he had kept his head about the alleged Bachchan aspect and continued to ally
himself with those trying to nail down Reliance, thus possibly keeping their support.
The Bofors scandal made unbridgeable a rift that had already occurred. On top of
corruption later came all the other issues of Indian politics: religion, caste, region,
language, control of water resources, wealth disparities and so on. It has been
overlooked that the split that eventually brought Rajiv Gandhi down can be traced
back to the commercial rivalry between Reliance Industries and Bombay Dyeing over
control of the Indian market for the polyester feedstocks purified terephthalic acid
and dimethyl terephthalate. The remark of the former minister that ‘The course of
Indian politics is decided by the price of DMT’(see Chapter 7) seems all too true, at
least for this tumultuous period.
The end result of the Thakkar-Natarajan Commission was, predictably, worthless.
Even if Wadia had made secret payments to Fairfax, possibly breaking the foreign
exchange law (though as a foreign citizen he was entitled personally to keep funds
over- seas), only by a long stretch of the imagination could India’s security have
been considered at risk.
The exercise was called a ‘cover-up’ and a giant ‘red herring’. Beyond the end
benefit, there was nothing to connect Dhirubhai to the Fairfax letters. But those of
his old friends who knew him from the early days might have thought perhaps of a
different phrase: Bichu chordya -Letting loose a scorpion.

BUSINESS AS USUAL
Dhirubhai Ambani was back in favour. His enemies and critics Dhad been exiled from
their positions of economic control. If the prime minister did not regard Dhirubhai as
a friend and ally, at least he perceived Dhirubhai’s enemies as his own enemies. And
as the Bofors scandal became more and more embarrassing, with Ram Jethmalani
and Gurumurthy trumpeting each new revelation, Rajiv Gandhi was suddenly feeling
very threatened.
But Dhirubhai was in a tight position financially. At the end of April 1987, two weeks
after V P Singh’s resignation, he announced Reliance’s poor results for the calendar
year 1986. The profit was barely enough to cover a dividend of 25 per cent on the Rs
10 par value of the share, cut in half from the 50 per cent declared in 1985, and
even that was denounced as a product of accounting jugglery. Several commentators
recalled Dhirubhai’s forecast of improved profits in November just before the G
Series debenture issue and asked how, in the eleventh month of the company’s
financial year, he could possibly have been unaware of the likely result. The
polyester staple fibre plant had been completed six months behind schedule, and the
PTA plant was a year overdue. Diminished cash flow was the reason for the delays
but the company’s reputation for mastery of technology was defeated. The customs
and excise evasion cases and the CBI’s criminal investigations were still alive.
After the 1986 results, the collapse in the Reliance share price brought down the
whole market, until the government nudged the Unit Trust of India and other
institutions into a market support operation. The sharemarket boom set off by Rajiv’s
1985 initiative in economic liberalisation had ended. This was particularly grim news
for Dhirubhai. As well as restoring high profits to Reliance, he also faced the task of
rebuilding the estimated Rs 5 billion of his private funds lost in defending his empire
in 1986.
Rajiv’s government did all it could do to help, with Narain Dutt Tiwari a sympathetic
listener as minister of commerce and for some months also finance minister. On 7
May 1987, just after the Reliance results, it announced a string of changes in the
import regime for polyester and its inputs, ostensibly to help the whole domestic
industry cope with what was portrayed as a weakening market. Polyester staple
fibre, of which Reliance was about to become the biggest Indian manufacturer, was
taken off the open general list for imports-meaning any textile weaver could import
it-and canalized through the State Trading Corp, a government agency that usually
kept the import tap closed. The specific duty of Rs 3000 a tonne put on imports of
PTA and DMT in 1986 after lobbying by Wadia’s Bombay Dyeing was removed. As
DMT imports were also canalised and effectively stopped ‘his benefited PTA userschiefly Reliance which was still a few months off getting its own PTA plant into
production. Extra allocations of foreign exchange were cleared for the PTA plant and
the catalysts it used. Patalganga’s PSF capacity, larger than the licensed 45 000
tonnes, was legitimised by a endorsement.
The duty on N-paraffin’s, the petroleum feedstock used to make the detergent
ingredient LAB, was cut by 75 per cent. Reliance was the only LAB manufacturer in
India that needed to import this input, as the others were all integrated into local
refineries which made it. A new scheme of export incentives on polyester yarn and
fibre exports handed out some cash rebates, excise concessions and replenishments,
tights for imports.

The Finance Ministry also gave prompt clearances for steps to improve the
company’s cash balance. Within ten days of an application by Reliance, the Controller
of Capital Issues cleared a rights issue of new shares to existing shareholders that
raised Rs 1.98 billion. The government-run insurance companies, banks and
investment funds became more interested in working capital loans, subscription to
debentures, and sale--lease-back arrangements on equipment.
The Controller of Capital Issues also cleared a proposal to ‘(bring forward) the
conversion of the G Series debentures by six months, to 31 July 1987, taking Rs 5
billion off the company’s debt. This was barely five months after the debentures had
been allocated among the subscribers. Many had not even received their certificates.
Now they were being hurried into conversion. Reliance issued a notice on 6 July
calling an extraordinary general meeting of share-holders on 8 August to approve
the early conversion. On 1 August, it sent a circular letter to the debenture holders
stating that if they opted for early conversion they need not send any
communication. If they had not sent an attached form by 25 August, they would be
deemed to have opted for conversion. According to litigants, who managed to delay
but not stop the conversion later in the year, the 1 August circular reached many
debenture holders only on 20 August-too late to be sure of sending their objection to
conversion.
The litigants, who included some trade unionists representing Reliance workers at
Naroda, claimed that many investors might have wanted to hold on to their
debentures for the full year, and earn their 13.5 per cent interest. Big financial
institutions had been already informed mid-year by Reliance that profits and
dividends for 1987 would stay low, and that easing of the company’s interest burden
was vital. With the connivance of the government and its public financial arms, the
litigants were saying, the small investor was being exploited so that Reliance could
save some Rs 330 million in interest.
Debenture holders were also to discover that their bonds had been issued in units of
ten, which meant the two-for-one shares they received on conversion were in lots of
20-not regarded as marketable lots in the stockmarket where the normal basic
parcel was 50 shares. This meant delays while Reliance Consultancy Services, the
group’s share registry, carried out the splitting, and consolidation of share
certificates into lots of 50. The newly created shares were not, in any case, listed in
the various stock exchanges until February 1988, meaning that for some six months
after conversion the shares were not tradeable and could not add to any selling
pressure on the price.
Despite all the help the government provided, Reliance was indeed still facing a
dismal year. To stave off announcing a loss, it resorted to a desperate accounting
move. The period of its accounts was to be shifted from the calendar year to the
April- March fiscal year used by the government, meaning the 1987 year would
actually have 15 months and end on March 1988. But by March, according to later
analysis, Reliance was still showing a profit of only some Rs 130 million, even less
than the 1986 result.
On 28 April 1988, Reliance announced it would extend its year by another three
months, not of course because of its lack of profits so far, but on the novel ground of
synchronizing the commissioning of the PTA and LAB plants with the accounting
year. By that stage, more favourable breaks had been given by the government in its

budget for the year starting April 1988. The excise on yarn and fabrics was lowered:
Reliance had been among several producers that had raised prices ahead of the
budget speech and then announced that they were cutting prices to pass on the
benefits of the excise cut to consumers. A week after the budget speech, as an
afterthought, the import duty on the polyester input MEG was cut sharply.
When the figures for the 18-month-long year were announced in November, Reliance
announced another record’ result, of Rs 807.7 million net profit on Rs 17.7 billion in
sales. Together with an interim dividend of 30 per cent, the final dividend of 25
percent (of Rs 10) brought the shareholder’s reward to Rs 5.5 on each share. It was
certainly the company’s largest profit yet, but when annualised it was still down on
the Rs 713.4 million profit declared in 1985. It had been helped by more creative
accountancy, notably the capitalising of the entire interest cost of the PTA and LAB
plants and a new basis of provision for depreciation, which had added some Rs 245.4
million to the bottom line. By the financial ratios such as return on capital, which
investment analysts used to gauge a company’s efficiency and relative profitability,
Reliance had shown less than spectacular results.
The justification for Reliance’s hunger for money was the industry vision Dhirubhai
could conjure up for his shareholders. At his annual general meeting in June the
venue was an enclosed suburban hall rather than under the blue sky of the
Cooperage Football Ground or the Cross Maidan. But Dhirubhai still looked up from
the financial mires to a future of massive silver cracking towers, distilling columns
and chemical containment spheres on the barren coastline of his childhood.
The company had been allocated 280 hectares of land at a new industrial zone called
Hazira, on the banks of the Tapti River, across from the ancient textile trading port
of Surat where the East India Company had set up its first trading factories. Reliance
planned to move into petrochemicals, making high-density polyethylene, polyvinyl
chloride and caustic soda-the ingredients for the plastics revolution that had reached
households in Southeast Asia but not yet India, where sugar or cement was still
shipped in jute sacks, women hauled water from their pumps or tanks in brass or
steel urns, shopkeepers expected customers to bring their own containers for milk or
rice, and farmers lugged steel irrigation pipes across their fields or just gouged crude
channels in the earth. All the plants listed for construction at Hazira had been cited
as proposed activities by Reliance when it garnered subscriptions to its G Series
debentures in November 1986, and the acquisition of land at Hazira had been
reported to Reliance shareholders in June 1987, along with the dismal 1986 results.
The site remained a swamp, as Dhirubhai tried to muster cash and credit to start
building his dream. At the end of May 1988, Reliance had applied to the Controller of
Capital Issues for permission to make yet another massive debenture issue to
finance its Hazira project, this time though a newly created subsidiary called Reliance
Petrochemicals Ltd.
The fully convertible debentures would be priced at Rs 200 each, and bring one Rs
10 share in the new company immediately on issue, with the remainder being
converted to more shares in two stages over the next three to seven years. The
issue would raise Rs 5.934 billion towards an investment estimated at some Rs 25
billion by the time it was completed in 1994.
The issue was cleared early in July 1988 and opened for subscription at the end of
August, even though, as the Indian Express pointed out, Reliance Petrochemicals did

not appear to have yet obtained the industrial licences it needed for the project. It
was also the first case of a new company with no assets against its name being
allowed to issue fully convertible debentures, which was against the policy laid down
by the Finance Ministry controllers up to then. The Express also questioned whether
Reliance was raising money a second time, through the subsidiary, for the same
projects the G Series debentures were supposed to fund. This time Reliance had a
more sympathetic car in the Supreme Court. On 25 August, the court barred the
Express from publishing anything on the validity or legality of the approvals got by
Reliance Petrochemicals in connection with the issue. The order was lifted on 23
September after the issue closed. By then, Dhirubhai had 2.3 million new investors
in his empire, among them of course many of the existing 1.8 million shareholders in
the parent company.
The petrochemicals plant would make Reliance only the second producer of highdensity polyethylene in India, and its biggest producer of PVC. But Dhirubhai’s
ambitions were racing even further ahead. In October that year, the economic affairs
committee of Rajiv’s cabinet approved his proposal to build a gas cracker-a plant
that breaks down the components of natural gas into different petroleum gasesalongside the petrochemicals plant at Hazira. It would produce 320 000 tonnes a
year of ethylene, 160 000 tonnes of propene, and 50 000 tonnes of butadiene. The
feedstock would come from the nearby South Bassein natural gas field being
developed by the government’s Oil and Natural Gas Commission.
This was another big project, using proprietary technology of the world’s petroleum
and engineering giants. How was Dhirubhai to finance this when the big
petrochemicals plant had just been put off the parent company’s own rather
stretched accounts? Dhirubhai already had his eye on one of the jewels in the Indian
corporate world, which he felt a friendly government had put in reach. The Bombay
engineering firm of Larsen & Tourbo, founded by two Danish engineers in 1938, had
become one of India’s biggest listed companies by 1987, with assets of Rs 9 billion,
annual sales of Rs 5.8 million, and gross profit of Rs 820 million. It was building all
kinds of factories, making offshore platforms for the new oil and gas discoveries in
the Bombay High, and fabricating high-performance equipment for India’s nuclear
power, space and defence programmes. It was something of a strategic national
asset.
As far as ownership went, the Danes had retired from the scene. The firm’s shares
were widely dispersed, but the government’s financial institutions held a combined
42 per cent which decided the fate of its management. It had made some ill-timed
diversifications into shipping and cement, but was a conservatively run company with
an impressive range of technical expertise. Mile regarded widely as sleepy and not
giving its potential performance, it was still making a return on net worth that was
twice that of Reliance in the bad days of 1986--87. It was immensely rich in internal
cash reserves and borrowing power. A tempting takeover target and the Dubai-based
Chhabria brothers had already started nibbling in the market in 1987. But without
the support of the institutions, no raid could succeed.
In May 1988, the Bank of Baroda, one of the score of nationalised commercial banks,
decided to get into investment banking and to set up a subsidiary called Bank of
Baroda Fiscal Services, soon abbreviated to BoB Fiscal. Two months later it asked the
Unit Trust of India and the Life Insurance Corporation (LIC), two of the biggest
institutional investors in the sharemarket, to help it start a portfolio by selling it
baskets of shares. Oddly, 63 per cent of the basket from LIC and 46 per cent of the

basket from UTI (by value) were Larsen & Turbo shares, bought for a total Rs 270
million on 3 August. BoB Fiscal sold these shares two days later for Rs 300 million to
V B. Desai & Co, a firm of sharebrokers who did a lot of work for Reliance. Later in
August, BoB Fiscal repeated the same exercise with the General Insurance
Corporation (GIG), taking delivery of Larsen & Turbo shares for some Rs 141 million,
about 55 per cent of the basket from GIG. These were also sold to V B. Desai &- Go,
two months later. The brokers then transferred the two lots of shares, amounting to
8 per cent of Larsen & Tourbo’s equity, to the Reliance offshoot Trishna Investments.
Reliance suddenly emerged in October as the biggest non-institutional shareholder in
the blue-chip firm. Meanwhile, the Company Law Board, not until then the most
vigorous regulator of corporate misdemeanours, had been activated by a minor
scandal in the Larsen & Turbo management over the use of a company-owned
apartment. The financial institutions agreed it was time for a new broom. On 11
October 1988, Mukesh Ambani and the Reliance director M. L. Bhakta joined the
Larsen & Turbo board by invitation.
Dhirubhai proclaimed the new alliance‘s merger of the professional skills of Larsen &
Turbo and the entrepreneurial skills of Reliance. It meant greater risk-taking ability
for Larsen & Turbo, he told journalists. Reliance kept on buying Larsen & Turbo
shares in the market, helped by a share price that had fallen on news of their
effective takeover. It had built up a stake of about 20 per cent by early in 1989,
when Dhirubhai was invited in as chairman and Anil Ambani also appointed to the
board.
Just what Dhirubhai had in mind about greater risk-taking came soon afterwards. In
March 1989, Larsen & Turbo raised Rs 800 million for working capital in a convertible
debenture issue and then put Rs 760 million into Reliance shares to cement the
relationship. It was paying over 12 per cent interest to the debenture holders, and
earning about 2.5 per cent in dividends on the shares.
In September 1989, Dhirubhai announced some other measures to tighten the
alliance. Larsen & Turbo’s shipping division would acquire two new ethylene carriers,
which could be used to deliver feedstocks to the Reliance Petrochemicals plants at
Hazira and Larsen & Turbo would be given the job of building the new Rs 5.1 billion
natural gas cracker that would eventually give an in-house supply of ethylene and
other feed-stocks.
The downside was that Larsen & Turbo itself would be financing the order it had just
won. It would raise Rs 8.2 billion (Rs 9.43 billion with retained oversubscriptions)
through a mega- issue of debentures. Out of this, Rs 6.35 billion would be given to
Reliance as supplier’s credit for the natural gas cracker that Larsen & Turbo would
build for Dhirubhai’s company at Hazira.
Dhirubhai explained that the deal with Reliance would give the engineering firm
access to gas-cracking technology which it could apply to projects all round the
world. Around this time, Dhirubhai was also talking up some grand infrastructure
projects in which Larsen & Turbo could take a lead: an undersea tunnel linking
crowded inner Bombay with the open land across its wide harbour; a long dam
across the Gulf of Cambay gradually collecting fresh water behind it; a superhighway
linking Bombay, Delhi and Agra. It was time for Larsen & Turbo to think big.
As he was with Reliance, in December 1988, Dhirubhai announced he was applying
for permission to build a 6 million tonne a year oil refinery at Bharuch in Gujarat.

Until then, oil refining had been reserved for government owned or controlled
companies. His chances of approval were slim (and his application was turned down
six months later) but Dhirubhai declared that, sooner or later, New Delhi would
realize it could not finance all of India’s burgeoning refining needs. Other diversifying
projects put up around this time included sponge-iron, power generation, television
tubes, and pharmaceuticals, none of which made much progress.
But bankers and accountants looked at the potential down side. The supplier’s credit
would be given to Reliance at 15 per cent interest, a margin of 2.5 percentage points
above the rate Larsen & Turbo would be paying investors. But this was a puny return
on funds that could be used to expand Larsen & Turbo itself. And the amount of
supplier’s credit, to one company and one project, was equivalent to some 55 per
cent of Larsen & Turbo’s total assets. It was a massive exposure for the company to
a single risk.
Gurumurthy cried ‘plunder’ in the Indian Express, as the Ambani takeover
progressed. The helpfulness of Dhirubhai’s friends in the financial institutions,
notably the chairman of the Unit Trust of India, Manohar Pherwani, was noted.
Gurumurthy recalled that the chairman of the Bank of Baroda, Premjit Singh, had
also helped Reliance out in the past by providing US$25 million in loans for overseas
Indians to subscribe to its F Series debentures in 1985. An enterprising and evidently
plausible reporter on the Express, Maneck Davar, made a trip to southern Gujarat,
where he found the sons and daughter-in-law of the bank chairman running a
polyester yarn texturising company set up in October 1986. It took partially oriented
yarn from the Reliance plant at Patalganga and then sent the crimped yarn back to
Reliance, earning an estimated profit of Rs 5.5 million a year. Davar inquired
whether he too could send yarn for texturising: he was told the firm worked only for
Reliance.
No one in the government wanted to know. Dhirubhai had meanwhile moved further
up in his scale of living. In November 1988, the entire Ambani clan had moved away
from the Usha Kiran building where he and his brothers owned fats. The new family
home was a 17-storey apartment building called Sea Wind off Cuffe Parade in the
historic area of Colaba, close to the business heart of Bombay. An Ambani company
had bought the building in its entirety, and the family spread out through its upper
floors. The first five floors were devoted to car parking, the sixth and seventh to a
gymnasium and swimming pool, and several other floors to guestrooms.
Dhirubhai was also on the way to satisfying an urge to counter the Indian Express in
print, and perhaps to attain the indefinable status of the media baron. Dhirubhai had
talked for some years of getting into the media business, and already had a
successful advertising agency, Mudra Communications, which was ranked ffth in
India by annual advertising billings. This helped pressure editors, as we have seen,
but Dhirubhai wanted an editorial voice of his own.
He had looked at several newspapers that came on the market, and had earlier
bought a controlling interest in the pro-Congress newspaper, the Patriot, which had
made vitriolic attacks on Nusli Wadia in response to the Express campaigns. At the
end of 1988, his son-in-law Raj Salgaocar bought the Bombay weekly newspaper
Commerce. Financially ailing, it had passed through five owners in recent years
including Kapal Mehra of Orkay Silk Mills, but had a useful business and economic
research bureau. Prompted by Salgaocar and Anil Ambani, Dhirubhai agreed to
transform Commerce into a mainstream daily business newspaper, to be modelled

on the Financial Times of London. As editor he hired Prem Shankar Jha, a former
editor of The Hindu, son of a former foreign secretary and government economist,
and a noted writer himself on India’s political economy in the academic world. Jha
hired nearly 60 of India’s best journalists, paying salaries that set a new benchmark
for Indian newspapers. But partly due to a foul-up in ordering printing equipment,
the new Observer of Business and Politics was not to launch until December 1989
when, as we shall see, it was already too late to turn the political tide even if
Dhirubhai’s hired pens had been able. His problems with the law were being pushed
aside. The director of the CBI, Mohan Katre, had not been keen on investigating the
allegations raised by the Indian Express.
Early in 1987, the anti-corruption agency’s additional director, Radhakrishna Nair,
had recommended prosecution over the backdating of the letters of credit for the
PTA imports in May 1985, but Katre had effectively sent the file on a bureaucratic
wild goose chase by referring it to the Finance Secretary, S. Venkitaramanan, who in
turn referred it to the Law Ministry. On 25 November 1988, the junior finance
minister Eduardo Faleiro told parliament that the CBI’s report had been examined in
consultation with the RBI and no further action is contemplated for the matters.
In 1987, Katre had been a prominent guest in the VIP box at the World Series cricket
tournament, sponsored that year by Reliance. The venue for the New Delhi games
was a stadium at a convenient walking distance from the office complex housing
India’s security and intelligence agencies. Nair volunteered for early retirement in
1988.
By launching a High Court action, Reliance had stalled the 1985 show-cause action
started by the Assistant Collector at Kalyan for alleged evasion of Rs 270 million in
excise on its polyester yarn production. There was still the show-cause notice issued
in February 1987 over the alleged smuggling of Rs 1.14 billion worth of yarn
equipment and evasion of Rs 1.2 billion in duty. Reliance had tried to get Bombay
High Court and the Customs appellate tribunal to quash this notice also, but without
success. It was due for hearing in April 1988 before the Bombay Collector of
Customs, Sukumair Mukhopadyay, regarded as an upright official immune to political
and other pressures.
The scheduled hearing on 25 April had to be called off when Mukhopadyay was
summoned to New Delhi for a meeting of western India Collectors of Customs,
convened with little notice by the junior finance minister in charge of revenue, Ajit
Panja. The hearing was relisted for 5 May. On 4 May, Mukhopadyay was transferred
to a new position, and the case postponed again. The new Bombay Collector, K.
Viswanathan, took his time to familiarise himself with the case. Nearly eight months
later, on 31 January 1989, he announced his decision to drop the smuggling charges
against Reliance. ‘There is no direct evidence, documentary or otherwise, of
undervaluation,’ he ruled, ‘the charge of undervaluation is based on a capacity which
is founded purely on theoretical calculations and calculating them by misreading the
relevant data of the documents of contract ... Reliance Industries Ltd had not
exceeded their licensed or the designed capacity and the capacity of the plant
imported by them is neither in excess of the contract nor is the import contrary to
the import licence. The battle with Nusil Wadia’s Bombay Dyeing had moved
upstream in the petroleum product chain from PTA and DMT to their common input
paraxylene. Once again with funds to spare, Reliance was getting its long-delayed
PTA plant into operation over 1988 and achieved commercial production in the last
quarter of the year. The PTA plant, as we have seen, included its own paraxylene-

producing unit which used naphtha as feed- stock. Bombay Dyeing’s DMT plant
continued to use paraxylene, which it needed to import for lack of domestic supply.
In March 1988, the government raised the customs duty on paraxylene from 85 per
cent to 120 per cent, even though world market price for the feedstock had recently
moved up from around US$400 a tonne to US$685. At this stage, Reliance was still
using imported PTA on which duty had been cut ten months earlier. Bombay Dyeing
was the only Indian importer of paraxylene, and now received a double hit from the
world price and the duty hike.
Reliance also received another benefit for its Patalganga paraxylene plant. In July
1988, the Finance Ministry granted it the status of a refinery, ahead of some 20
other naphtha-based industries also seeking the same ruling, including National
Peroxide, associated with Bombay Dyeing. The status meant that Reliance could get
its naphtha from domestic refineries at the confessional price of Rs 30 000 a tonne
instead of Rs 100 000. The decision had been opposed by two members of the
Central Board of Excise and Customs, B. R. Reddy and Jyotirmoy Datta, who pointed
to the massive subsidy it implied through loss of excise, but they were overruled.
On 1 March 1989, the government cut the duty back to 90 per cent, but transferred
paraxylene imports from the open general list to the canalised category, with the
government- owned Indian Petrochemicals Ltd as the importing agency. In effect,
this meant that Bombay Dyeing’s independent sourcing of the vital feedstock was
throttled back. The official in charge of petrochemicals called a meeting of
paraxylene users, including Bombay Dyeing and Reliance, to ask if there were any
surplus supplies. A week or so later, Reliance notified the government it had about
40 000 tonnes to spare and that there was no need for imports.
If this indicated that Reliance indeed had greater capacity at Patalganga than
authorised, the excess was quickly legitimised: in March the minimum economic size
for PTA plants under the industrial licensing system was raised from 100 000 tonnes
a year to 150 000 tonnes, and in June to 200 000 tonnes. The minimum size for DMT
units remained at 60 000 tonnes.
Wadia remonstrated with the government over the next three months, taking his
complaint to the Cabinet Secretary, B. D. Deshmukh. Reliance had effectively taken
over the profitable paraxylene business & Com the government’s own Bharat
Refineries, using its naphtha. Meanwhile Indian Petrochemicals was keeping Bombay
Dyeing on a hand-to-mouth supply line for its paraxylene; the company ran out of
the vital feedstock twice in this period. Reliance was asking the equivalent of the
landed cost of imports, about Rs 28 000 a tonne, for its surplus. Bombay Dyeing
estimated its cost of manufacture was between Rs 10 000 and 11 000 a tonne. With
domestic excise and sales tax a combined 19 per cent, this suggested a profit of Rs 1
1 400 to 12 400 a tonne. Wadia argued that paraxylene should be made available to
all DMT and PTA producers at the same price, as set by the Bureau of Industrial
Costs and Prices. This would be about Rs 7000 a tonne lower than the Reliance price.
Over this period, street protests and court actions against the government’s
treatment of Reliance made little progress, though they kept the allegations against
the company alive. In October 1988, the farmers’ group Shetkari Sanghatana, which
had been campaigning for three years against artificial textiles on behalf of cotton
growers, announced it would blockade the Reliance factory at Patalganga. But the
movement’s leader, Sharad Joshi, was persuaded to drop his plan. In December

1988, two allied activists, journalist Anil Gote and medical doctor Pandurang
Ranjaram Kinare, employed lawyers Shanti Bushan and Mahesh Jethmalani to sue
the government and others over the CBI’s failure to prosecute on the evidence it was
alleged to have assembled against Reliance. By contrast, the CBI had shown
extraordinary zeal in prosecuting trivial offences by those who had exposed alleged
legalities by Reliance.
Bombay Dyeing’s lobbying got it nowhere. Dhirubhai was counted as a major backer
of Congress for the general elections due at the end of 1989. Rajiv was turning back
the clock in an effort to recapture the dynastic magic. In early March, his mother’s
former political manager, R. K Dhawan, returned to the prime minister’s office as an
officer on special duty. Rajiv had set aside his ‘preppy disdain’ for the silly haired
Punjabi babu [clerk]’s and returned to Indira’s style of functioning.’ Dhirubhai had
his own contact back in court.
By November 1989, Indian Petrochemicals cut off the supply of imported paraxylene
altogether, while the government dropped excise on domestic supplies. Nusli Wadia
was compelled to buy 4000 tonnes from Reliance, paying Rs 22 000 a tonne, which
still left Dhirubhai a fat profit margin on his sale. By that time Dhirubhai had many
other worries, but he must have savoured this humiliation for Wadia at the end of
this second phase of the Great Polyester War.

MURDER MEDLEY
Since March 1987, the tables had been turned against Nusli S Wadia and the Indian
Express, who were both beleaguered on many fronts.
Ramnath Goenka’s health was failing and the old Marwari newspaper baron was
spending long spells in hospital. But he was continuing the fight, even though the
Indian Express was facing its worst period since Indira’s Emergency. By the end of
1988, over 230 prosecutions had been launched against the group, by agencies in
charge of company law, customs, income tax, foreign exchange, and import quotas.
Government advertising was withdrawn, and banks directed to refuse credit. In
Bangalore, the Express had continual trouble with its communications lines. Staff
were harassed by goondas (muscle men). A previous ally in exposing Reliance, the
tabloid Blitz had switched sides by mid- 1987, when it captioned a picture of Express
Towers as the ‘House of Forgers’ and called its editor, Arun Shourie, the Ace of Liars’.
By late 1989 the group was on the brink of collapse, Shourie later revealed.
From how high up the pressure started is indicated in the memoirs of the senior civil
servant Madhav Godbole. As Finance Secretary for the state of Maharashtra over
1986-89, Godhole was instrumental in denying requests by Reliance for additional
concessions in state sales tax on production at Patalganga---one- request being for
sales tax breaks on production in excess of licensed capacity. Godbole recounts
direct requests in person by Dhirubhai and Mukesh Ambani, lobbying on Reliance’s
behalf by the Marathi-language writer Bal Samant and by Congress MP Murli Deora,
a string of invitations to music concerts at Dhirubhai’s home, and a call from the
Reliance public relations department asking if Godbole and his wife would be
interested in some shares from the directors’ allotment in a current Reliance issue.
Godbole refused all requests and offers.
In April 1989, anonymous telephone threats to his home late at night caused
Godbole to obtain police protection. Finally, the state’s chief minister, Sharad Pawar,
called Godbole in and told him of ‘s lot of pressure from 7 Race Course Road’ the
prime minister’s official residence in New Delhi.
After his arrest by the CBI in August 1987 for a wrong entry in a hotel ledger, Nusli
Wadia encountered many other challenges apart from his intense battle over
paraxylene. He and his companies were scrutinised for any possible violations of the
Companies Act, the foreign exchange regulations, and customs and excise regimes.
Income tax inspectors revisited his tax returns for the previous thirteen years.
In the early hours of 12 July 1989, Wadia arrived back at Bombay’s Santa Cruz
airport from an overseas trip. Immigration officials served him with a deportation
order, which said the Government of India had declared him an undesirable alien.
Wadia had just over 24 hours to leave the country of his birth, where he had spent
most of his life, and where his family had a continuous record of business for over
300 years.
He began an urgent legal appeal, and got a court to stay the expulsion order. But the
message was clear: if Wadia did not buckle under to Ambani’s industrial supremacy
and pay his price, all mechanisms of the state could be manipulated to make his
position in India untenable. His former friend Rajiv Gandhi had completely switched
sides.

But just as the opposing forces seemed to have backed Wadia into a tight corner, the
most bizarre episode in Bombay’s textile Mahabharata began--one that was soon to
cover the Ambanis and Reliance with great embarrassment, and bring a collection of
characters from Bombay’s violent underworld briefly on to the centre stage of Indian
commerce.
A week after his arrival back in Bombay, Wadia was told that his life was in danger in
his home city. The chief minister, Sharad Pawar, telephoned Wadia at his home
fronting the Arabian Sea at Prabhadevi waterfront. Without giving details, he warned
the textile tycoon of a conspiracy to assassinate him. A squad of police commandos
arrived soon after to mount a 24-hour guard on Wadia’s home. Two cars packed with
armed police were assigned to escort Wadia’s limousine around the city.
Pawar was an old friend of Wadia, and no friend to Dhirubhai. He had parted
company with Ambani’s principal political investment, Indira Gandhi, in the late
1970s and had run a rebel Congress Party in his own state. Brought back into the
main- stream Congress only recently by Rajiv Gandhi and installed as chief minister,
he remained an ambitious and independent- minded satrav whom Gandhi’s loyalists
regarded with great suspicion. Prominent among these loyalists in Maharashtra was
the former city mayor and the Congress MP for South Bombay, Murli Deora, an old
yarn market colleague of Dhirubhai. By then Pawar was feeling some heat himself
from Reliance for failure to overrule Godbole on sales tax and for other holdups in
state government clearances. Pawar believed Reliance was stirring up certain land
scandals being levelled against him by party dissidents.
Even so, Wadia suspected the security scare was a ruse to keep him under guard
and keep his activities closely monitored. The next day, he gave the guards the slip
and vanished for several hours. On his return, Pawar was again on the telephone and
rebuked Wadia, warning him the threat was serious.
Wadia continued to be tied up with his appeal against the deportation order. On 26
July, he applied to the Bombay High Court to be recognised as an Indian citizen. On
28 July, he faced no less than the Additional Solicitor-General of India, G. R.
Ramaswamy, who spent an entire day in court opposing his application. In addition,
the CBI director Mohan Katre came down from New Delhi and spent the day
watching the proceedings, a highly unusual level of interest given that the case was
not one involving his agency. As the CBI is the only agency which can investigate
judges, his presence may have been intended to intimidate the bench. Ramaswamy
argued that Wadia had never been an Indian citizen, and even if he had, his
application for British passports in 1964 and 1984 had automatically extinguished
any claim to Indian nationality.
But on the evening of 1 August, a sensational development suddenly put Reliance in
the dock. Detectives of Bombay’s Criminal Investigation Department arrested Kirti
Vrijlal Ambani, a general manager of Reliance in charge of public relations and
customs and excise matters, and charged him before a magistrate with conspiracy to
murder Nusli Wadia. Also arrested and charged as chief co-conspirator was a strange
companion for the Reliance executive: one Mun Waghji Babaria, already widely
known around Bombay as a small-time popular music band leader playing under the
name Prince Babaria & His Orchestra’s. Then 40, Babaria had frequently organised
entertainment evenings that brought Bombay’s milieux of business, cinema, and
crime together. Favouring black sequinned suits, see-through black shirts and a gold
medallion as stage costume, Prince played the drums in his band, while playback
singers and dancers pumped out hits from Hindi movies.

Figures such as the actor Sayeed Jaffrey, the reputed kingpin of gold and electronics
smuggling in Bombay, and several senior businessmen are among those figured in
Babaria’s photo-album of musical parties. Two years earlier, Babaria had taken his
musical troupe to Dubai, to provide the night’s entertainment at the birthday party of
Dawood Ibrahim, the preeminent don of the Bombay underworld, later to be accused
as mastermind of the bombings that rocked the city in March 1993, killing nearly 300
people. Circle of acquaintances was Kirti Ambani, then 47. A long-time Reliance
employee, he was originally named Kirti Shah but became so devoted to the Reliance
founder that he had changed his own name to Ambani. Babaria had called
occasionally at 1Grti Ambani’s office. At a party for Babaria’s young son in 1987, Kirti
had been a chief guest-his presence recorded on video and camera.
The character of each of the two accused immediately threw a degree of
implausibility over the alleged assassination plot: Kirti Ambani, a middlemanagement company man with an engineering degree, fond of playing chess, with
wife and children in the suburbs; Prince Babaria, a sentimental and pudgy figure of
middling talent, desperately proud of his pretty wife Hema and their two children,
and living, as it turned out, in a police barracks at Bhendi Bazar-where his forebears
had made a living for six generations as police informers.
Bombay business circles were incredulous enough that a Reliance employee would
even think of taking out Wadia. Life was and is cheap in Bombay. right through the
1980s and 1990s leading businessmen in the construction and transport industries
have been victims of contract killings carried out for amounts less than two thousand
dollars. But the Ambanis constantly expanding ambitions seemed to place them on a
level of corporate behaviour well above this vicious jungle. Their chosen weapons
were the robust publicity offensive, the judicious stimulus to bureaucrats and
politicians, and an unfailing ability to interest big and small investors in their
schemes.
In compiling evidence on the alleged conspiracy against Wadia, the police also
revisited earlier cases-such as the bashings and attacks met in the past by the son of
Orkay Silk Mills chairman, Kapal Mehra, Jamnadas Moorjaani of the Crimpers’
Association, and embroidery exporter Bipin Kapadia. Statements were taken from
Moorjaani and Kapadia. Wadia also recalled a threat from terrorists’ which had forced
him to withdraw his two sons from their boarding school in the Himalayas at Kasaull
in 1987. Nothing but the coincidence that all had at some time or other been in
commercial rivalry to Reliance was established.
The police case, as eventually presented to court in October 1990, was that Kirti
Ambani was deeply involved in the Reliance fight with Wadia’s Bombay Dyeing Ltd
for monopoly control of paraxylene. By limiting access to cheap imports, Reliance
was trying to force Bombay Dyeing to buy Reliance’s surplus paraxylene, on which
the price was 280 per cent above the production cost. The two companies were in a
hectic campaign over July-September 1988.After his job as Reliance press
spokesman had been largely taken over by Anil Ambani
and hired journalists in 1987, Kirti Ambani’s duties continued to be liaison with
customs and excise officials. The police presented one example of such a contact, a
former customs inspector named Umed Singh Sarraiya, who in 1974-78 had handled
the customs bond placed by Reliance. Sarralya had frequently visited the old
Reliance offices at Court House and had been introduced to Kirti Ambani by
Dhirubhai’s nephew Rasikbhai Meswani, then in charge of customs matters. Sarraiya

had continued social meetings with Kirti until 1989, at each other’s home, or at small
hotels and restaurants around Bombay, with Kirti usually picking up the tab. Other
customs officer’s sometimes joined them. Sarraiya also admitted to police that he
had been demoted for graft in the early 1980s, having been caught taking money
from a passenger while on duty at Bombay’s Santa Cruz airport.
The police alleged that, in November 1988, the bandmaster Babaria had contacted a
criminal called Ivan Leo Sequeira, alias Shanoo, whom he had known for a year or so
through a mutual friend who played the Hawaiian guitar. Sequeira, then 29, had
been convicted of a murder ten years earlier but acquitted on appeal in 1984. In
1988 he was again facing charges of shooting someone, and was on ball.
Babaria had a proposition. A big industrialist was to be attacked and died. ‘He told
me that we would be getting much money in that case,’ Sequeira later confessed in a
sworn statement before a magistrate. Babaria later revealed the target was Nusli
Wadia, but did not immediately reveal who was paying, saying only that he was a big
man.
On 13 December 1988, Babaria and Sequeira went to the Ritz Hotel in Bombay’s
Churchgate area to meet Kirti. The Ritz is a small hotel close to the Nariman Point
business district, and was frequently used by Reliance and many other companies for
middle-level meetings. Kirti had booked a room on the Reliance account, and was
generous with company hospitality at the lunchtime meeting, as ten bottles of beer
and various snacks were consumed by the three.
Sequeira, introduced as Shakil, said Kirti had then discussed the plan to attack
Wadia. Kirti gave him newspaper cuttings with photographs of Wadia, as well as
Wadia’s address and telephone numbers. Sequeira left the meeting and waited
downstairs. Babaria came down and Sequeira said he was interested in the job but
wanted an advance.
Babaria said Kirti had agreed to pay 50 lakhs’(Rs 5 million, then worth about US$300
000) for a successful job. The next day Sequeira rang Babaria and was told Kirti had
agreed to pay Rs 500 000 in advance. The two met the same afternoon at the
Shalimar Restaurant near Babaria’s home at Bhendi Bazar. Babaria went outside to a
lane and came back with a plastic bag containing Rs 150 000 in cash, which he gave
to Sequeira. The police collected evidence of substantial cash withdrawals from
Reliance bank accounts around this period, advances made to company employees,
adjustment of bad debts, and internal cash transfers. All these tend to suggest of
[sic] possible manoeuvring of accounts for dubious expenditure,’ the indictment said.
Thereafter, Sequeira dodged Babaria’s increasingly anxious phone calls inquiring
about plans for an attack. After several weeks, Babaria went to Sequeira’s house and
told him Kirti was inquiring about progress. At a second meeting, on 21 February
1989, at the Ramada Inn Palmgrove at seaside Juhu, the three sat drinking by the
swimming pool on Kirti’s Reliance expense account and again discussed plans for the
killing. Sequeira pressed for more of the promised advance, and was duly passed
another Rs 150 000 via Babaria at the Shalimar restaurant the next day.
As more weeks went by without action, Babaria came under more pressure from Kirti
Ambani. Sequeira said he was evading Babaria’s calls to a neighbour’s telephone,
and instructing his family to tell callers he was not at home. In April, Babaria
engaged another criminal named Ramesh Dhanji Jagothia to help carry out the
attack. Jagothia was later to surrender to police two pistols made in local workshops,

along with ammunition. Babaria also contracted a mechanic named Salim Mustaq
Ahmed to steal a car and drive it in an ambush of Wadia’s limousine, at an agreed
price of Rs 50 000.
Together with Jagothia, Babaria went to Sequeira’s home later in April and managed
to find him. Babaria pressed Sequeira to get in touch with Kirti, and the next day
Sequeira telephoned the Reliance general manager at his office.
‘He was very upset,’ Sequeira said in his sworn statement. ‘He told me he was taken
to task by his boss. I told him that I would return the advance money. But he told
me that he was not interested in getting back the money. But he was interested in
getting the job done. In May, Babaria and Sequeira met a very unhappy Kirti Ambani
at the Sea Rock Hotel. ‘He told me that he was suspecting our intention,’ said
Sequeira. ‘He was upset. He was about to cry He was saying he was unable to face
his bosses. I assured him that the nature of the work was serious and if anything
goes wrong each one would come in trouble. He was not very happy by hearing all
this. After this meeting, Babaria pressed Sequeira once or twice, but-according to
Sequeira - came to realise that he was not really interested in the job, which
Sequeira admitted himself.
‘Then Babaria approached me with the offer I thought that it was a good opportunity
to me to make good money,’ he said. ‘But when I came to know that the person
involved is an industrialist and a prominent figure I realised that it was too
dangerous and I decided to back out. However I was knowing that the persons who
wanted us to do the job were also connected with industries and it was possible for
me to knock out as much money as I can by dodging them. With this idea I knocked
from them the sum of three lakh rupees. In a later interview, Babaria freely admitted
to his role in organising the murder conspiracy, and said that his assembled hitsquad had actually tracked Wadia at three locations with a view to carrying out an
attack.
On one occasion they followed Wadia to a bungalow at Khandala, a resort in the
Western Ghat Mountains inland from Bombay. ‘He wanted to kill him but were two
hours late so the operation failed,’ Babaria said. On the other attempts, the gang
tried to catch Wadia outside his home at Prabhadevi, and again outside the Breach
Candy Hospital where Wadia had gone to visit the ailing Ramnath Goenka.
Babaria claimed that the advance actually paid to him by Kirti Ambani totaled Rs 1.3
Million, suggesting that if Sequeira had played his cards better he could have
squeezed even more money than his Rs 300 000. This tends to accord with the
sudden flush of money enjoyed by Babaria at the end of 1988 and early 1989, when
he lavished his wife Hema with gold jewellery bought at top jewellers in the Opera
House district of Bombay, bought two old cars and a new sound system for his band,
and had a priority telephone installation at his small house in the Bhendi Bazar Police
Lines.
The plot came unstuck in mid-July, however, when one of the gang talked about it
while drinking in a bar, and was overheard by a police informant. The gang member
was taken in for questioning, and revealed the details. As the gang was rounded up,
the sensational identity of the alleged target and client of the gang got attention
from Bombay’s senior most detective, the joint Police Commissioner (Crime), Arvin
Inamdar. Babaria’s new telephone line allowed the police to collect more evidence
against Kirti Ambani, by tapping calls between the alleged conspirators. On 22 July

they recorded Babaria calling Kirti, and mentioning details of the murder plan.
Babaria asked Kirti if he knew whether Wadia was in town. Kirti replied that Wadia
was in Bombay because his appeal against the visa decision was fixed for 24 July.
Kirti asked about the execution of the plan. According to the police court papers, Kirti
said he was ‘ed up with only assurances, dates and no results’. The people chosen
for the job were not capable and his account should be settled- that is, the advance
returned.
Two days later, Kirti is quoted saying that neither he nor his boss was interested in
the work any longer’. Babaria had been dodging him for nine months, and Kirti had
found out from his own sources that nothing had been done to execute the plan.
Babaria pressed to be allowed to continue, but Kirti again asked for the money back
and told Babaria to get Sequeira to ring him.
Soon after, Sequeira agreed to turn approver, or state witness, and co-operated in
an attempted telephone entrapment of Kirti Ambani. Sequeira rang to ask Kirti if he
wanted his Rs 300 000 back. Kirti evaded a clear rely, but the police said it was
clearly established that Kirti knew Sequeira (under an alias) and that the money had
been paid to him.
When the full implications of the plot became apparent, the detective chief Inamdar
briefed Bombay’s Police Commissioner, Vasant Saraf. In turn, Saraf took Inamdar
and his case file up to Chief Minister Sharad Pawar, who carefully read through all
the evidence. Having ordered the special protection for Wadia, he told the police to
examine every finding with extreme care. On 31 July, Pawar rang the office of Prime
Minister Rajiv Gandhi in New Delhi, and briefed the Cabinet Secretary, B. G.
Deshmukh. Pawar said arrests were imminent. Kirti Ambani and Prince Babaria were
picked up the following evening and charged.
Pawar’s message had raised the alarm bells in Gandhi’s office. As it was clear the
Bombay police were too far advanced for their investigations to be called off,
Gandhi’s advisers turned their efforts to damage control by getting the highly
politicised Central Bureau of Investigation (CBI) on to the case.
Later reports said that Pawar himself had suggested to Deshmukh then that, in view
of the political sensitivity and interstate aspects of the case, it should be taken over
by the central government. Other reports said that Pawar had succumbed to strong
pressure from Gandhi’s office to make the request. Pawar later insisted it was his
own suggestion. Even before the arrests, the Director of the CBI, Mohan Katre, had
suddenly arrived in Bombay on I August and started pressing the local detectives for
details of the case. On 4 August, the central government issued a notification
transferring the case to the CBI.
To the league of Ambani critics, this meant the murder case was destined for the
same process of suppression by partisan investigation as the Gurumurthy allegations
two years earlier. An action was mounted in the Bombay High Court, in the name of
one Professor Ramdas Kishoredas Amin, opposing the transfer to the CBI, and asking
for measures to prevent vital evidence being interfered with or deliberately lost. The
High Court gave an interim stay order and placed all the records and cassette-tapes
of telephone intercepts under the court’s own custody.
The CBI
The central government appealed to the Supreme Court of India, fielding the seniormost members of its Attorney-General’s office, backed by hired senior advocates.

The bench of three judges decided on August 16 to modify the High Court order,
allowing the CBI access to the sequestered records and tapes provided that true
copies were kept under seal. The case was left with the CBI, but the chief
investigating officer of the Bombay Police was to be associated with further
investigation. Around the same time, the enterprising reporter Maneck Davar of the
Indian Express, who later exposed a link between Reliance and the Bank of Baroda
chairman (see Chapter 12) found evidence that tended to confirm suspicions that
CBI director Mohan Katre was indeed one of Dhirubhai’s people’. Davar had heard
that Katre’s only son Umesh Katre had some sort of business relationship with
Reliance through a company called Saras Chemicals and Detergents Ltd. Posing as a
small industrialist, Davar placed an order for three tonnes of the detergent ingredient
LAB. The transcripts of Davar’s telephone conversations with Katre junior make it
clear that he and Saras were commission agents for Reliance chemical products, so
closely related to Reliance that they were able to promise gate passes and receipts
directly from Reliance to avoid extra sales tax for the purchasers.
Davar found that the younger Katre was earning Rs 5.4 million a year from his
Reliance connection, enough to buy an apartment in Bombay at which the CBI
director himself stayed when visiting the city, as well as a Mercedes-Benz car which
was then a rare luxury in India.
Director’s response was that he had no knowledge of his son’s business activities.
Arun Shourie commented in the Indian Express: ‘s it possible-and that in an Indian
household- that you, the only son, should suddenly start making Rs 5.4 million a
year and your father should not know? Especially if, as is the case in this instance,
you have no particular qualifications other than being the son of the Director of the
CBI to bag such a lucrative agency? Shourie recalled a famous court judgement
against a state chief minister, Pratap Singh Kairon, making it the duty of senior
public officials to investigate rumours or signs that their children were extracting
benefits or being given benefits by virtue of their parent’s position. The law against
corruption fitted Katre to the dot, Shourie said.
As well as recalling Katre’s intervention to have the Express critic Gurumurthy
arrested under the Official Secrets Act in 1987, Shourie listed five investigations that
had been buried by the CBI under Katre’s direction. The alleged gift of Rs 250 million
power plant by a foreign supplier; over-invoicing of raw material imports for PTA
production; the surreptitious addition of a paraxylene plant to the Reliance complex
at Patalganga without an industrial licence; clandestine royalty payments for
chemical processes; and the antedating of letters of credit in 1985 to obtain Rs 1
billion worth of foreign exchange.
Katre had not only been assisting Reliance directly, he had been hounding Wadia as
well. ‘hen was the last time you heard of the Director of the CBI sitting at the
hearings of a case--even a case as important as say the assassination of Mrs. Gandhi
or the trials of the worst terrorists? , wrote Shourie. ‘But Katre has spent hours and
hours personally sitting through, and in a most conspicuous place where the judge
could see him, the day-to-day hearings on the case about Nusli Wadia’s passport, a
case in which the CBI is not even a party! …Should the agency [the CBI] in the
control of and under the direction of this man be handed the responsibility of
investigating the conspiracy to murder the man he has been using that very agency
to hound-a conspiracy in which is implicated a senior executive of the very business
house in whose interest he has been hounding the intended victim of the conspiracy?
Wadia himself gave no sign of knowing anything about the conspiracy until after the

arrests on 1 August. When a reporter rang him for comment about the case, Wadia
initially started talking about his visa case. But when interviewed by the Bombay
Police soon after, he certainly gave credence to the plot. In the last eight to ten
years there have been certain incidents in the course of our business and that of
Reliance Industries,’ he said. ‘I feel that these incidents could have motivated 1Grti
Ambani, an employee of Reliance Industries, to consider me an enemy. The Bombay
Dyeing chairman went through some of the disputes over chemical imports, the
harassment he had faced, and the difficulties caused to Reliance by the Indian
Express exposures in 1986-87. ‘I am led to believe that it is the impression in the
minds of those who manage Reliance Industries that I was associated and involved
in the preparation of those articles against them. The articles had led to numerous
inquiries and the government’s refusal to let Reliance turn its nonconvertible
debentures into convertibles, and had been seen as the cause of Dhirubhai Ambani’s
stroke.
‘It is thus apparent ... that those who hold animus against me made one attempt
after another to harass me and harm my business interest,’ Wadia said. ‘Despite all
these efforts they have not succeeded in destroying or harming the business with
which I am involved and which is professionally managed. This could perhaps have
led to frustration in the minds of those wishing to do me harm and made them think
of using other methods. In a later clarification to a CBI superintendent in December
1989, Wadia admitted that he had been involved with the Indian Express as a friend
of Ramnath Goenka, its owner:
‘Mr. Goenka and I both shared the same perception that the Ambanis and RIL, their
company, had subverted and manipulated the government to such an extent that
they were able to have their way in virtually every field through assistance from the
government being directed entirely in their favour. This was possible as they had a
large number of powerful supporters both among the bureaucrats and politicians in
power ... The Indian Express in a series of articles exposed many of the wrong
doings of RIL and the favours that were granted out of turn to it. I through my
association with the Indian Express helped and was indirectly involved in some
aspects of the publication of these articles. I was also associated with Mr.
Gurumurthy who was the author of the said articles. Mukesh Ambani, when
interviewed by the CBI on 1 June 1990, was at pains to play down the rivalry with
Wadia, and the effect of the misinformation conveyed by the Express. He did not
blame the Express articles for his father’s paralytic attack in 1986, which he said was
a hereditary illness. Kirti Ambani had come directly under Mukesh Ambani, but had
no authority to spend large sums of money. About Kirti Ambani’s alleged
involvement in a case of this type, we came to know through his arrest,’ Mukesh
said. ‘In fact it is hard to believe that we needed or need any retrogative [sic] step
for our survival, as a few times back, we were supposed to be close to power. In the
immediate aftermath of the arrests, the response of Reliance had been to cast
suspicion on a counter-conspiracy against the Ambanis themselves and to play up
the rivalry angle. As the case is subjudice, we have been advised not to comment on
the charges levelled against [Kirti Ambani],’ a company press release said on 1
August.
‘But [we] would like to state that this appears to be a deliberate frame-up aimed at
embarrassing and maligning our organisation at a point of time when one of the
group companies is going in for the largest public issue in corporate history It is a
matter of great regret that an innocent employee of the company is being dragged
into such an unseemly controversy resulting from business rivalry Reliance

executives had spread the idea that the conspiracy had been cooked up by Wadia,
Pawar and the Indian Express group with the simultaneous objectives of nobbling the
debenture issues for the Reliance Petrochemicals plant at Hazira, getting Wadia out
of his difficulties with visas and raw material supplies, and (for Chief Minister Pawar)
striking a damaging blow at Rajiv Gandhi.
They pointed out that Pawar’s state government had appointed as prosecuting
counsel the senior advocate Phiroz Vakil, who had earlier represented Wadia and
Gurumurthy in the Thakkar-Natarajan inquiry into the Fairfax case. (It was not
mentioned that Vakil had also appeared against Pawar in another case.) Had they
researched the background of Babaria, they might also have pointed out his descent
from a long line of police narks. An anonymous note was circulated among press
people in Ahmedabad, alleging a history of mental illness in Kirti Ambani’s family.
Against a general skepticism that murder was part of the Ambani repertoire-and a
belief that, if it had been, the plotting would have been more competent-this frameup theory found plenty of takers. India is a society inclined to look for the conspiracy
behind the conspiracy. Sharad Pawar had been in a squeeze within the Maharashtra
branch of the Congress Party. Dhirubhai controlled about one-third of the Congress
members of the state assembly and was able to turn on the pressure. Just before the
arrests, Pawar had been making overtures to Dhirubhai. At the height of the crisis,
Pawar managed to get a call through to Dhirubhai just before midnight one evening.
The next day, Dhirubhai was telling his associates that the problem had been solvedpossibly referring to Pawar’s decision to call in the CBI.
But could the incongruous elements of the murder conspiracy have possibly been set
up? An alternative theory was that the plot might have been a case of a follower
being more loyal than the king that Kirti had acted out of an excess of loyalty. The
large sums of money paid to Babaria, surely far beyond the personal resources of a
middle manager, would then have to be explained.
The revelations about the CBI director Katre’s connection with Reliance led the
opposition Janata Dal to call for his immediate prosecution for corruption over this
venal nexus. But on 27 August, the Home Ministry declared its full confidence in
Katre after hearing his response, which was undisclosed, to Maneck Dayar’s report.
The press allegations were motivated and calculated to tarnish the image of the
office he holds’, a Ministry spokesman said.
The CBI continued to give every appearance of an active investigation, but a fatal
flaw had been introduced by the CBI into the prosecution case. The body of evidence
amassed by the police against Kirti Ambani and Babaria was highly circumstantial,
drawing on hotel records and bank transactions that backed the alleged sequence of
meetings between the conspirators and the transfer of money to the proposed hit
team, and on the telephone taps made at a late stage when Kirti Ambani was highly
reluctant to take the plot further. Was Kirti the instigator of the plot, or had Babaria
trapped him into it?
The crucial additional evidence was the confession of Sequeira, the hit man who had
turned government witness. Without his testimony, the plot looked highly improbable
and amateur, with Babaria hardly convincing as a hard man of the underworld.
Under Katre, the CBI arrested and charged Sequeira as Plotter No. 3-a step which
invalidated his earlier testimony to the Bombay Police and completely destroyed any
prospect of his testifying in court to implicate the others.

After the initial appearance of Kirti and Babaria in August 1989, the case disappeared
from public view. Soon after the CBI took over, both the accused were allowed bail.
Babaria says Kirti Ambani arranged half of the Rs 50 000 he posted. The other
characters like Sequeira also got bail, and sank back into the Bombay underworld.
Kirti Ambani was transferred to an obscure position in Reliance Industries and has
not appeared in the press since. Babaria continued to live in the police barracks at
Bhendi Bazar, but could no longer travel to big-time engagements in Dubai because
authorities would not restore his passport. He continued to scrape together a living
by organising evenings of Bollywood musical hits, often to collect funds for a charity
called the Young Social Group, of which Babaria himself was president. A pamphlet
produced for one such evening in 1996 said: Prince Babaria, lately the most
controversial international figure for his connection with big industrialists and others,
has gained a lot of publicity in the press and TV, locally and internationally. Yet
Prince is “The Man of Music and Entertainment” and will always remain loyal to it. In
1992, Babaria tested his renown by running as an independent candidate for the
Kalbadevi constituency in the Maharashtra state assembly, but failed to garner a
significant vote. Babaria says Dhirubhai donated Rs 200 000 to his campaign funds.
The conspiracy case has been neither withdrawn nor proceeded with, but remains in
judicial limbo. The backlog of many thousands of cases in the Indian court system is
a convenient place to bury politicised scandals. Whether the Kirti Ambani episode
was a murder conspiracy or a frame-up was never put to judicial test.

A POLITICAL DELUGE
In the second quarter of the year, India aches for the monsoon rains to arrive. The
summer has built up into unbearable heat, driving all living things into shade from
mid-morning to late afternoon, bleaching the landscape. The ancient rages (songs)
liken the searing heaviness to the yearning of the cowherd maidens for the divine
youth Krishna.
Eventually, the burning landmass of India sends up a giant thermal, pulling in cloud
laden winds from far out in the Indian Ocean. The monsoon works its way up the
west coast and across into the Bay of Bengal, the rain front anxiously charted in the
weather maps. But for Dhirubhai, the monsoon of 1989 was less a relief than a forerunner of the political deluges to come.
On 24 July, the monsoon brought cloudbursts to the Western Ghats and coastal
hinterland of Bombay. The valleys around Patalganga became channels for the
immense runoff; the new industrial zone built right by a river bank was soon under
two metres of water. The Reliance factory had no protective food walls, nor any food
insurance. Its much-inspected machinery was immersed in mud and water for days.
It was disaster that threatened the very solvency of Dhirubhai’s company, which had
just struggled back to real profitability after three years of financial jugglery.
It was a crisis that brought back some of the old Ambani magic, recalling the fast
assembly of the original polyester yarn plant. Mukesh Ambani once again assumed
direct charge on the spot. Under the direction of its engineers, Reliance brought in an
army of contract workers to disassemble the machinery, clean and oil each part, and
then put the whole thing together again. The plant was back in operation after one
month, a triumph of Indian labour intensity under expert direction. But even this
brought its controversy. the Indian Express reported that Reliance was seeking Rs
2.25 billion in concessional loans from the government financial institutions, to
finance yet another covert expansion under the guise of rehabilitation. By
September, the Syndicate Bank was organising an emergency consortium loan of a
more modest Rs 850 million.
Another food was undercutting the Congress government. V P Singh’s decision not to
form a new party but to try to unify existing parties, was paying off. In October
1988, the splinters of the old Janata coalition began moving back together, with the
merger of the Janata Party and the Lok Dal into the Janata Dal. A month later, the
Janata Dal formed an alliance with regional parties from Assam, Andhra Pradesh and
Tamil Nadu, called the National Front. As Rajiv neared the end of his five-year term,
the National Front formed working relationships with the Left parties and, less
trustingly, with the other main force opposing Congress, the Bharatiya Janata Party”
(BJP)-the Hindu nationalist party which had taken the old Jana Sangh elements back
out of Janata. The elections on 22 and 24 November 1989 saw Rajiv’s Congress
crash from its 415 seats of 1984 to only 192 seats in the 545-member Lok Sabha
(lower house).
It was still the largest party, as the National Front had gained only 144 seats. But
with support from the BJP’s 86 members and the Left’s 52, and with Rajiv
relinquishing any claim to try to form a government, the National Front was invited
to do so. After five days in which a leadership challenge from the veteran Janata
leader Chandrashekhar was diffused, V P Singh was sworn in as prime minister.

Though he could not avert the storm, Dhirubhai had taken some steps to protect
himself. In July 1989, the Indian sharemarkets saw massive selling of Reliance
shares by investment companies controlled by non-resident Indians. They were
getting their funds back into foreign currency non-resident accounts, a necessary
step towards repatriation and a protection against both a sharemarket fall and a
currency collapse. If these were the Reliance-owned companies, it did not necessarily
mean that Dhirubhai was selling out his own stock. Reports at the time said two sets
of brokers appeared to be working on behalf of Reliance, one set to sell and the
other to take delivery It was a sound precaution: over the two months to the
election, the Reliance share price lost a third of its value, against a slight rise in the
overall sharemarket. All other Ambani-related stocks (Reliance Petrochemicals,
Larsen & Tourbo, and various debentures) also fell. The institutions that had once
rushed to help prop up his share prices now held back, anticipating a change of
government. The investors who had converted their G Series debentures at Rs 72.5
now had a stock worth Rs 70. With some glee, the Indian Express reported that
Reliance, who straddled the industrial arena like a colossus during the Congress (1)
regime, is now facing a winter of despair.” The new government saw all of
Dhirubhai’s old opponents back in power. Singh brought back the former Revenue
Secretary, Vinod Pande, from rural affairs to be his new Cabinet Secretary The
former Enforcement Director, Bhure Lal, was put on the prime minister’s staff as a
special officer. The new finance minister was the proponent of public sector
investment, Madhu Dandavate, who had also been a leading critic of the Ambani
style.
Those seen as friends of Dhirubhai were now on the outer. The new government
soon transferred the officials it saw as Dhirubhai’s protectors in the Finance Ministry,
including the Finance Secretary, S. Venkitaramanan, the Revenue Secretary Nitish
Sen Gupta, and the chairman of the Central Board of Direct Taxes, A. S. Thind. The
CBI director, Mohan Katre, was retired and the agency set to work on tracking the
Bofors and other scandals that had surfaced under the previous government. The
Unit Trust of India’s chairman, Manohar Pherwani, and the Bank of Baroda’s
chairman, Premjit Singh, were shifted early in 1990.
The various cases against Reliance were revived. On 12 December, the Central Board
of Excise and Customs through its member K P Anand issued a fresh order accusing
the Bombay Collector of Customs, IC Viswanathan, of inconsistent reasoning and
grave errors of judgement in his decision to drop the charge of smuggling in the
extra polyester yarn plant. Reliance had illicitly imported four spinning lines, and
deserved severe penal action’ . Viswanathan was transferred on 2 January 1990. The
new Collector in Bombay, A. M. Sinha, took the case up again before the Customs,
Excise and Gold Appellate Tribunal early in February. This time the former Additional
Solicitor-General, G.Ramaswamy, who had tried to nail Wadia in the ThakkarNatarajan inquiry, was back in private practice (while a lawyer who had appeared for
the Indian Express, Arun Jaitley, was now in Ramaswamy’s old role). Ramaswamy
now pleaded for Reliance, seeking a delay in the customs appeal because it was
personally inconvenient for him to appear before the summer vacation, and claimed
that as one member of the tribunal had been his junior in court, the panel should be
reconstituted. The lawyer for the Customs, Kapil Sibal, was having none of this.
Ramaswamy said the pressure for an early hearing was part of a political vendetta
against Reliance.
Another minor customs scandal was later unearthed. Investigators in the Central
Customs and Excise Board found that in November 1982, when Reliance was

assessed as owing Rs 312.8 million in duty and a court action had failed, the then
Collector of Customs in Bombay, B. V Kumar, had allowed the company to pay in
138 installments over the next two years, resulting in an implicit interest cost to the
government of Rs 30.3 million.
Kumar was shifted in January 1990 from the Central Board of Customs and Excise.
In May 1990, the Bombay Customs revisited the Reliance plant at Patalganga at less
than a day’s notice, and took detailed notes on machinery in the new purified
teraphthalic acid plant. On 11 May, it issued a new show-cause notice of some 170
pages, alleging that Reliance had imported a PTA plant with a capacity of 190 000
tonnes, against its licensed capacity of 75 000 tonnes a year. The captive paraxylene
plant, declared to
have a capacity of 5 1 000 tonnes, could actually turn out about 400 000 tonnes a
year, according to the Customs evaluation. The under-declaration at the time of
import was put at Rs 1. 74 billion, and the duty evaded over Rs 2 billion. The
response from Reliance spokesmen was that the charges were part of the same
vendetta, promoted by Nusli Wadia. The machinery was all covered by licences, and
the excess capacity was authorised under the government’s endorsement Scheme.
From January 1990, the new government had also been scrutinising the tariff
protection given to Reliance. Officials from the Ministries of Finance, Textiles, and
Petrochemicals had been studying the import duties on polyester fibres and their
inputs, with a view to sharp cuts. According to the press reports, the government
saw lower tariffs as the simplest way to cut Reliance down to size: it could be carried
out almost instantly with few avenues of legal appeal, and would be politically
saleable as a move to cut cloth prices.4 On 25 February, the government enforced a
25 per cent cut in the price of FTA.
But it was in the new corporate alliance with Larsen & Tourbo that the Singh
government managed to hit Dhirubhai the hardest. The financial institutions, which
still had a combined 37 per cent holding as against the Ambanis’20 per cent, were
instructed to remove Dhirubhai from the firm’s chairmanship. In early April 1990 the
Life Insurance Corporation took the first steps towards calling an extraordinary
general meeting of shareholders to have all the Reliance nominees removed from the
board. On 19 April, Dhirubhai bowed to the pressure and resigned, on condition that
the three other Reliance men stayed on the board. A career manager with various
public-sector enterprises and banks, D. N. Ghosh, replaced him as chairman. Ghosh’s
first action was to get Larsen & Tourbo to sell off the Reliance shares on which the
firm had spent Rs 760 million a year earlier. The sale, at an opportune moment later
in the year, actually made the firm a Rs 170 million profit. The second action was to
reduce the limit on supplier’s credit to Reliance to Rs 2 billion-and that only to cover
work being done by Larsen & Turbo itself. The proceeds of the Rs 8.2 billion
debenture issue, successfully floated in October 1989, were diverted to Larsen &
Turbo’s own expansion in cement and machinery manufacturing.
The prize had been snatched away. Dhirubhai was left with a huge gap in his
financing for his gas cracker at Hazira, for which costs had escalated from the
original Rs 7.2 billion to about Rs 8.46 billion. The Indian financial institutions were
talking about bridging finance, but insisting that Dhirubhai first tie up his technical
agreements for the plant and get the land transferred from the Gujarat state
government. They were also humming and hawing about the special funding for the
food clean-up and repairs at Patalganga. The Reliance share price sank even lower,
to levels not seen since the company’s early days, hitting a low of Rs 50 in March.

Dhirubhai’s new newspaper, launched as the Observer of Business and Politics in
December 1989, was not the influential voice that his son Anil and son-in-law Raj
Salgaocar had expected. Dhirubhai had taken more direct control himself, as it
became clear that the new government was going onto the attack against Reliance.
He began to have suspicions about the paper’s editor, Prem Shankar Jha, who had
been keeping company with Ram Jethmalani, daughter of Dhirubhai’s old legal and
political foe Ram Jethmalani. Two trusted journalists, R. & Mishra and B. S. Unniyal,
were appointed as deputies. Jha himself had been approached by V P Singh in
February 1990 to become the prime minister’s media adviser, but had asked for six
months to make a decision.
He returned from a trip to Kashmir late in March to find that two senior writers had
resigned over Unniyal’s policies. Jha warned Dhirubhai that some 50 of the original
58 journalists were also close to quitting. But within two weeks, Jha himself had
decided to quit and told Dhirubhai he was joining Singh’s office. ‘It was the only time
I have ever seen him silenced,’ Jha remembers.
The mood at Reliance became ever more defensive. For the public record, Dhirubhai
and other figures put a brave face on things. But the tone of the company’s
anonymous briefings to journalists became one of hurt pride, of a wrongly
persecuted victim.
Dhirubhai and his boys had recognised that the names Reliance and Ambani required
some image work. Kirti Ambani had been hustled out of his public relations role after
the murder conspiracy scandal the previous year. The corporate affairs side of the
company was greatly expanded, with the recruitment of skilled publicity managers in
both Bombay and New Delhi.
In the capital, the vice-president handling government relations, V Balusubramanian,
was now working overtime cultivating politicians in the ruling coalition and the
parties backing it from the outside. As in 1979, when Dhirubhai helped Indira Gandhi
bring down the Janata government, he was now probing for weaknesses and
susceptibilities.
Both Dhirubhai and key figures in the V P Singh government saw it as a desperate
fight to the death. ‘There was hardly a day when we did not spend several hours
pondering how we might bring down V P Singh,’ recalled one senior Reliance
executive, about
1990. And I suppose that in his office there were people who spent as much time
plotting how to do the same to US.’
The government was soon failing apart by itself, in any case. Singh’s deputy prime
minister, Devi Lal, had unilaterally announced a write-off by the nationalised banks
of their small loans to farmers, a step that eroded the capital base of many banks to
zero. Lal’s son, put in charge of Haryana, was proving a thuggish embarrassment.
Thus compromised by his own deputy, the prime minister had tried to pick up the
economic liberalisation he had begun under Rajiv Gandhi in 1985, through a drastic
shift in the government’s investment priorities in the new five-year plan starting in
April 1990. The weighting would shift from public- sector industry to agriculture and
rural development, where the growth and employment response was greatest.
Controls on private investment, domestic and foreign, would be relaxed. The tax
system would be simplified and the tax rates eased to win greater compliance.

To help win support for reforms from the many defenders of state-directed industrial
investment in the government, the economic adviser in the prime minister’s office,
Montek Singh Ahluwalia, circulated a paper at Singh’s request in June which pointed
out that India’s rising domestic fiscal deficits and increased dependence on foreign
borrowings were taking it towards an external payments crisis. India needed sharp
remedial measures-including cuts in public-sector spending, a rupee devaluation, and
recourse to restructuring loans from the International Monetary Fund and the World
Bank.
The debate was a political free-kick for the dull elephant who had been pushed out of
the herd, Chandrasekhar” who still thought he was the rightful leader of Janata Dal.
A former ‘young Turk’ of the Congress Party who had made his exit many years
before Singh, Chandrasekhar was the ultimate Indian politico. From a similar uppercaste background to Singh’, but from the mafia-ridden coal-mining district of
Dhanbad in Bihar, Chandrasekhar was a man of deals and electoral trade-offs behind
a conventional mantle of Nehruvian socialism. With gusto, he attacked the proposals
of Singh and Ahluwalia as a sell-out of Nehru’s heritage and the enslavement of India
to foreign capital. Singh backed down and the resulting statement of policy did
nothing to slow India’s drift closer to insolvency.
In early August, the prime minister finally steeled himself to sack his deputy Devi
Lai. Then, in the pivotal decision of his prime ministership, Singh abruptly announced
that, with immediate effect, 27 per cent of jobs and places in the central
government, public-sector enterprises, and colleges would be reserved for
candidates from the ‘backward classes’(comprising mostly members of the Hindu
lower castes). This fulfilled an election promise by the Janata Dal to implement a
report commissioned by the previous Janata government in 1979 from a former chief
minister of Bihar, B. P Mandal. It was potentially good electoral politics, as the lower
castes were some 51 per cent of the Hindu population. The other parties kept silent,
knowing that Singh had beaten them to the biggest of all vote banks’.
But the children of the upper castes and of the well-off had no such inhibitions. The
Mandal policy intensified their night- mare of finding jobs after graduating, as 22 per
cent of places were already reserved for the former Untouchables and the tribal
population. Students staged anguished protests in New Delhi streets, provoking a
brutal police reaction that saw several shot by volleys of rife free. Agitation and
confrontations spread across northern India (southern India already had even
greater lower- caste reservation policies at state level). In September, students
began immolating themselves. Over two months, some 260 people died, either in
protest suicides or from police fire. By then, also, the BJP had resumed its own
appeal to the hearts of Hindu Indians, through a cult built around the warrior-divinity
Ram of the Ramayana epic. The BJP, and other groups spawned by the Rashtriya
Swayamsevak Sangh, asserted that Ram was a
historical character, and that a small mosque built by a general of the Muslim
emperor Babar in 1532 in the northern town of Ayodhya had displaced a temple
marking Ram’s actual birthplace. The ideal of Ram was supposed to cut across caste
barriers-attributed to a later distortion of true Hinduism-and to dispel residual
defeatism among Hindus after their centuries of foreign conquest and colonisation. In
September the BJP began a countrywide march on Ayodhya to press for the
mosque’s replacement with a new Ram temple. Murderous violence broke out
between Hindus and Muslims through the next two months. Singh had not prepared
India for his new Mandal policy, and failed to justify it after wards. He looked remote

and indifferent to the bloodshed in the streets. His timing looked opportunistic,
designed to steal Devi Lal’s thunder. Many of the New Delhi journalists were
themselves of upper-caste, privileged back- grounds, and took strongly partisan
attitudes against V P Singh. The Mandal reservations and the widening gulf with the
BJP put Singh on opposing sides to key figures in his earlier attack on Reliance.
Gurumurthy had become a close adviser to the BJP leader, Lal Krishna Advani, while
Arun Shourie, the editor of the Indian Express, was vehemently opposed to the new
reservations.
As the Singh government was weakened, Dhirubhai’s fortunes revived. The turn
could even be plotted on a graph of the Reliance share price, which began rising
steadily from July 1990. The government was distracted by its numerous splits and
battles.
The customs cases had been successfully bogged down by petitions seeking a stay of
proceedings in the Delhi High Court. It was clear that further legal appeals could
delay a final judgement for a decade or more. Aides like Vinod Pande, who pressed V
P Singh to make a concerted effort to expose and tame Reliance while he had the
chance, found the prime minister abstracted and diffident. Dhirubhai had also won
over a crucial supporter of the government, the Marxist chief minister of West
Bengal, Jyoti Basu, by announcing plans for a big new polyester factory in his state
under a newly created subsidiary called Reliance Bengal.

Although it was obliged to report mounting contingent liabilities over its customs and
excise cases, Reliance was climbing back shakily from its setback of 1986 and 1987
as the Indian economy raced into high growth under pressure of big government
deficit spending and raised imports financed by borrowing. After the 18-month years
of 1987-88, Reliance had had a nine-month year for 1988-89 (July-March) in which
net profit of Rs 793.7 million was reported. In September 1990, Dhirubhai convened
shareholders at a Bombay auditorium for his annual meeting. The profit for the 12
months of 1989-90 (April-March) was Rs 905 million, a drop of nearly 15 per cent in
annualised terms, but due to the provision of Rs 440 million for the food damage at
Patalganga.
The meeting saw Dhirubhai paint his big pictures again. But for the first time, he
faced hostile interjectors and heckling. Shareholders complaining about the recent
lack of bonus share issues, and shouting charges of financial wrongdoing by the
management, pressed towards the podium, which was soon full of security guards
ringing the directors. The pandemonium forced an adjournment.
In September, as it became more obvious that Singh was losing support,
Chandrasekhar began mustering support for a revolt within Janata Dal, and making
overtures to Rajiv Gandhi’s Congress Party. By early October, nearly 30 of the
party’s MPs were listed as disaffected in newspaper reports. On 23 October, the
Janata Dal state government in Bihar stopped the BJP leader Advani’s own march on
Ayodhya, and the BJP immediately withdrew support from V P Singh’s government.
The BJP continued to send thousands of devotees into Ayodhya, culminating over 30
October-2 November in a suicidal assault against Uttar Pradesh armed police ordered
to defend the mosque by the state’s Janata Dal chief minister, Malaya Singh Adam.
While all this was happening, Chandrasekhar and Rajiv Gandhi continued their efforts
to split Janata Dal away from Singh. Dhirubhai was among four leading industrialists
who financed their campaign, in which the going rate for a defection was said to be
Rs 4.5 million. On 7 November, 55 of the party’s MPs, or about one-third of its
parliamentary membership, voted against the government. After a day of stormy
debate, Singh resigned and three days later Chandrasekhar was sworn, in as head of
a minority government supported from the outside by Congress. Reliance shares
leapt to their highest point in more than two years, to Rs 240.
When Dhirubhai reconvened his adjourned shareholders meeting on 13 November,
this time at the Wankhede Stadium where international cricket tests are held in
Bombay, the more friendly political environment seemed reflected in his less
defensive mood.
The critics were still there, asking for a bonus, but Dhirubhai said their rights to
debenture issues had been a kind of bonus. To questions about use of corporate
funds in toppling the V P Singh government, Dhirubhai said such reports were
conjecture. The new political setup had emerged without the Ambani hand, he said.
First half results showed that Reliance was on the way to displacing Tata Iron and
Steel as India’s most profitable company in 1990-91. To help build its new gas
cracker, which would continue the growth, Reliance was now proposing two new
bond issues, raising Rs 4.56 billion in convertibles and a further Rs 1.14 billion in
nonconvertibles. This would replace the lost supplier’s credit from Larsen &L
Turbo.The new Prime Minister, Chandrasekhar, had gained a poisoned chalice,
however. By allowing the Ram devotees to under- take token work on their new

temple at Ayodhya, he put off the final confrontation (which was to take place in
December 1992, when massed zealots demolished the mosque), and the communal
violence gradually tapered off. But the postponement of the economic reforms he
had so opportunistically engineered in mid-year now rebounded against him. The
New York credit rating agencies had lowered their rating of Indian sovereign debt in
August. Iraq’s invasion of Kuwait sharply pushed up India’s oil import bill, while
some three million Indian workers had to be evacuated from the Gulf at government
expense and their remittance income was then lost. Singh had approached the IMF
for an emergency loan in October. In December, Chandrasekhar took up the request
and gained US$1.8 billion in emergency credit, on condition that New Delhi took
steps to cut its deficit and deregulate the economy. Always the pragmatist,
Chandrasekhar swallowed the medicine that he had said would enslave India. His
finance minister, Yashwant Sinha, began drawing up a budget for 1991-92 (AprilMarch) which had to include cuts in consumer subsidies and reduced public-sector
investment.
Rajiv by then was alarmed, both at the appearance of competence Chandrasekhar
was showing and at being seen supporting unpopular measures. He feared
Chandrasekhar would take any political credit that was going, and palm off the
blame on to Congress. He decided it was time to make his own move for power. At
the end of February 1991, Rajiv forced Chandrasekhar to postpone the budget for
three months and to introduce a temporary finance bill which made only minor fiscal
adjustments. On 6 March, Rajiv forced Chandrasekhar to resign. The President
appointed Chandrasekhar as caretaker prime minister and set fresh national
elections for late May.
The deferment of the budget caused the IMF to stall any further external financing
until after the elections. Non-resident Indians began withdrawing their governmentguaranteed foreign currency deposits with the Indian banks, a capital fight that was
to take out a billion dollars by June. With foreign reserves below US$1 billion, less
than two week’s import cover, the caretaker government authorised the Reserve
Bank of India to apply emergency measures, which it did in March by virtually halting
imports and sharply raising interest rates to around 20 per cent. The economy
shuddered into recession.
Meanwhile the initial optimism about Reliance’s prospects under the Chandrasekhar
government had been dissipating as Chandrasekhar showed little urgency in
reversing the policy changes made by V P Singh.
Dhirubhai’s friends had begun to move back into positions of economic and financial
control. The former finance secretary, S. Venkitaramanan, was made Governor of the
Reserve Bank of India as a matter of priority, replacing R. N. Malhotra. Several
accounts say that Dhirubhai’s lobbying was decisive. In November 1990, even before
Chandrasekhar was sworn in, Dhirubhai had told one diplomatic visitor: ‘r Malhotra
will be replaced shortly and the new RBI governor will be Mr. S. Venkitaramanan.
’Dhirubhai indicated that it was his recommendations. In March 1991,
Venkitaramanan had in turn appointed the former Unit Trust of India chairman,
Manohar Pherwani, as the chairman and managing director of the central bank’s
housing refinance subsidiary, the National Housing Bank.
But Larsen &- Turbo had remained outside Dhirubhai’s control, even though in
January a junior minister assisting Chandrasekhar, Kamal Murarka, had observed
that Larsen & Turbo was Ambani’s company’s. Reliance was holding back its new

debenture issues because it saw a weak reception in the market, though ostensibly
delays in approvals were cited. With cost overruns in the Reliance Petrochen-iicals
plant at Hazira, let alone the future gas cracker, it still badly needed the supplier’s
credit. To rub in the loss, Larsen & Turbo’s chairman, D. N. Ghosh, had started the
new year by writing to Dhirubhai pointing out that Reliance was late in paying Rs 1
billion on bills for work done by Larsen & Turbo. Mukesh Ambani lamely replied
nearly a month later, claiming that
Larsen & Turbo itself was behind schedule in some work.
On 15 February, Ghosh had resigned at the request of the government. But the
resulting uproar in the newspapers- Gurumurthy wrote under the headline ‘s & T
under hijack again’ had caused the financial institutions to delay a board meeting to
appoint a successor. Before Reliance could overcome this hesitation, the government
had fallen and the appointment had come under the rules banning a caretaker
administration from making major appointments. The plum had stayed just out of
reach.
Chandrasekhar and his ministers had been proving unruly clients in any case. The
Reliance political lobbyists in New Delhi faced constant demands for cash to keep the
government’s small band of MPs from defecting again. As the minority government
became shakier in February, the scramble for funds became even more desperate.
Eventually, the Reliance political team were getting almost daily demands for large
bundles of cash from Chandrashekhar’s office and his key political managers such as
the law minister, Subramaniam Swamy. The dependence on one capitalist was a
particular irony in the case of Chandrasekhar: as one of the socialist Young Turks in
the Congress Party of the late 1960s, he had led the attacks on the industrial
licences awarded to the Birlas that had caused the 1969 Hazare inquiryWhile the
economy slowed down, the politicians fanned out for an election held, unusually, in
the hottest months of the year. The results from the first of three days of voting, on
20 May, showed that Rajiv Gandhi would not have achieved the same comeback as
his mother had done in 1980. Congress would have slid back even further from the
1989 result of 192 seats, to perhaps 160 seats out of 544 in parliament’s lower
house. It would still have been the biggest party, and Rajiv would have tried to
govern with the support of smiler parfes while an enhanced BJP waited to topple him.
But that was not to be. On 21 May 199 1, as Rajiv campaigned in Tamil Nadu for the
next round of voting, he was killed by a suicide bomber. That created a sympathy
wave
in the later stages that gave Congress an increased tally of 226 seats, and Rajiv left
a
well-planned strategy for economic reform that applied the measures advocated
since
1990.
Whether Rajiv might have changed his business friends yet again is something that
will never be known. The Bofors scandal was still very much alive, and he would
have
spent his second term keeping a lid on it. But a tantalising indication that he might
have
changed his view of Dhirubhai comes from an account of a meeting between Rajiv
and Nusli Wadia in early May 1991, about three weeks before Rajiv’s death.
Wadia had a call from Rajiv early in the week, asking for a meeting. Wadia was busy
preparing for an important business trip overseas the following Saturday, but Rajiv
insisted. So, after completing his work, Wadia few up to Delhi on the Friday evening,

arriving at Rajiv’s heavily guarded bungalow on janpath about 11 pm. It was their
first meeting since the Fairfax affair, and both men were edgy. Rajiv opened up by
complaining about the Indian Express sniping which continued against him. Wadia
exploded. This was nothing compared to what Gurumurthy and he had suffered:
arrest, harassment by the bureaucracy, constant inspections, his passport and visa
problems, and finally the murder conspiracy. Wadia asked Rajiv why he had refused
to see him when the forged Fairfax letters were announced. Raiiv said he was not
aware of any approach. Wadia said he must have known. It was general knowledge
that Rajiv’s secretary, V George, to whom he had spoken, always took in requests
for meetings for Rajiv to tick or cross off.
Rajiv explained that once the Thakkar-Natarajan inquiry was appointed he was
committed to a course of action. He also reminded Wadia about the detective asking
questions in Switzerland. Wadia pointed out that this was part of the whole forgery
plan. Did Rajiv appreciate, he asked, that his panicky decision based on the
forgeries-this one avoid-able thing-had started the whole confrontation that
ultimately brought the downfall of his government?
The conversation went on past midnight. Refreshments, coffee and soft drinks and
sweets were sent in as the two men talked on into the small hours. Wadia must have
abandoned plans to find a hotel room. Finally the napping aides in the hallway heard
a furry of voices. It was about 5.30 and the first light was coming through the tall
neem trees and bougainvillea in the garden. Rajiv and Wadia came out into the
portico and
stood waiting while Wadia’s driver was roused. Before Wadia turned to get into his
car, he and Rajiv shook hands. It was evident that they parted as friends once again.
Wadia went straight to the airport and took an early morning fight back to Bombay.
That evening he few out of Bombay to Europe. He was still abroad three weeks later
when he heard that Rajiv had been assassinated.

UNDER THE REFORMS
After the shock of Rajiv Gandhi’s murder, the Congress Party, chose an elder as its
new leader. P V Narasimha Rio had been in the top circles of power for much of a
long career in politics. He had handled the Ministries of Home Affairs and External
Affairs with great skill under Indira and Rajiv, and his intelligence and erudition (in
nine Asian and European languages) were undoubted. But after an undistinguished
stint as chief minister in his home state of Andhra Pradesh had been judged lacking
in the charisma needed for the prime ministership.
In 1991 he was already 70 and was preparing to retire from parliament when the
party installed him as a stopgap chief. But those who expected an early leadership
fight within Congress or an early return to the polls had reckoned without Narasimha
Rao’s rejuvenated taste for power or his gift for intrigue, which was Kautilya (the 3rd
century BC Indian Machiavelli’s applied in a modern setting. From his minority
starting point in parliament, Narasimha Rao steadily built up a Congress majority by
attracting defectors from opposition parties, and managed to serve out his full fiveyear term.
For the first two years at least, Narasimha Rao provided the political umbrella under
which the long-delayed economic reforms could he introduced. India in 1991 and
1992 illustrated perfectly the adage that ‘ad times make good policies . To carry
them out, Narasimha Rao installed as finance minister the career government
economist Manmohan Singh, who had reached the bureaucratic pinnacles of the
ministry as Finance Secretary and then central bank governor in the 1980s. The
Cambridge-educated Singh had spent much of his earlier career helping to construct
the edifice of government planned investment. But then a spell making a
comparative study of the world’s less-developed economics for the South
Commission, a body representing many developing nations, had crystallised some
doubts and begun a Pauline conversion in him towards market-based allocation of
resources. Singh was soon backed by the elevation of Montek Singh Ahluwalia, (the
economist who wrote the 1990 reform paper) as Finance Secretary The two Sikhs,
almost invariably in austere grey-blue turbans, became the public face of reform.
Within a few days of the government taking office at the end of June 1991, Singh
devalued the rupee by 20 per cent to encourage prompt repatriation of export
earnings.
In the deferred budget for 1991-92 (April-March), delivered at the end of July, he
abolished licensing in most industries, raised fertiliser prices to cut subsidies, warned
that loss-making government enterprises would not be supported indefinitely, and
relaxed controls on foreign investment. The second budget, at the end of February
1992 for the 1992-93 year, carried forward the policies and pointed towards an
Indian economy opened to global trade and investment flows by the end of the
decade or even sooner.
The rupee was made largely convertible on the current account, meaning its
exchange rate was to be set increasingly by the market, and more import items were
transferred to the open list. Import tariffs, which had once ranged up beyond 300
per cent, were to be no more than 110 per cent and much lower for capital goods.
Foreign companies were welcomed into the petroleum sector from the wellhead to
the petrol pump. The policing and pricing of new share and debenture issues by the
Controller of Capital Issues was abolished, with vetting for fraud taken up by the new

Securities and Exchange Board of India. Indian companies were permitted to issue
convertible securities overseas, such as Eurobonds, and foreign portfolio funds were
to be allowed to buy and sell shares directly in Indian markets. We must not remain
permanent captives of a fear of the East India Company, as if nothing has changed
in the last 300 years,’ Singh declared in his 1992 Budget speech. ‘India as a nation is
capable of dealing with foreign investors on its own terms. Indian industry has also
come of age, and is now ready to enter a phase where it can both compete with
foreign investment and also co-operate with it. The first test of how helpful the new
government would be to Reliance came less than a month later. On 26 July, the
company’s subsidiary Trishna Investments had used its substantial shareholding in
Larsen & Turbo-then about 18 per cent even after it had returned the 7 per cent
stake acquired through Bank of Baroda Fiscal to quell criticism in 1989-to requisition
an extraordinary general meeting of shareholders a month later.
The meeting was to vote on two motions: that Mukesh Ambani be made the
company’s managing director, and that Dhirubhai be reinducted to the board.
The prize was another shot at the blue-chip’s cash. The funds from Larsen & Turbo’s
1989 debenture issue had not yet been deployed, because of a court action and then
a need to get government clearance for a change from the originally proposed use.
Dhirubhai was still desperately short of funding to complete the petrochemical
complex at Hazira and move on to the new gas cracker. The financial institutions
were frowning on a revival of the supplier’s credit plans, and in May 1991 Dhirubhai
had let it be known that he was expanding Reliance’s own new debenture issue from
Rs 5. 7 billion to Rs 9 billion. But he had still not gone to market with it. Larsen &
Turbo was still dangling for the taking.

‘With friends in the government’s commented one newspaper writer, they [the
Ambanis] are unlikely to have problems.” Others were not so sure. ‘Times are such
that no bureaucrat will openly come out or do something which is perceived to be
blatantly pro-Ambani,’noted Business India.
Dhirubhai indeed had many friends in the government or in the Congress leadership,
including old Indira or Rajiv loyalists such as R. K. Dhawan and Satish Sharma. But
Narasimha Rao was too cautious and in too precarious a political position to give
direct favours, and the Finance Ministry now had the strict Manmohan Singh in
charge.
In a drive reminiscent of his old debenture placement campaigns, Dhirubhai began
canvassing Larsen & Turbo shareholders to give Trishna their proxies to vote at the
meeting. The takeover in 1988 had given Reliance two vital footholds, which the
Singh government had not dislodged. A former assistant company secretary at
Reliance had been installed as Larsen & Turbo’s secretary, and Reliance Consultancy
Services had been made the company’s share registry in place of a Tata Group firm.
It meant that Reliance had no trouble in getting all details of the shareholders. Over
the month before the 10.30 am meeting on Monday, 26 August, about 200 agents
for Reliance collected some 107 000 proxies. By the weekend before the meeting,
Dhirubhai and his team
were convinced they had Larsen & Turbo in the bag and were already celebrating.

Mukesh had resigned as executive director of Reliance, ready to take over as vicechairman and managing director of Larsen & Turbo.
The renewed takeover attempt was a trumpet call to the Ambani critics of five years
earlier. The Indian Express, Nusli Wadia and Ram Jethmalani A made &antic
attempts to convince ministers and officials that it would be improper to let this
corporate jewel
fall to the Ambanis. A new press war broke out, with each side going to the extent of
questioning the other’s patriotism. In the Express, the Bombay publisher R. V Pandit
pointed out that Larsen & Turbo carried out vital defence work, seeming to suggest
that the Ambanis could not be trusted with national secrets. Dhirubhai’s Observer of
Business and Politics recalled that Wadia was the grandson of Jinnah, founder of
Pakistan.
Until the last minute, the government was disinclined to give any particular
instruction to the financial institutions on how to vote their huge shareholdings.
Jethmalani had failed to get a court injunction halting the meeting, and was to fail
again at an application to a judge at his residence on the Sunday morning.
However the Ambani critics had been collecting testimony from some Larsen & Turbo
shareholders that their names had been taken as proxies by Trishna without their
consent. By the end of the last week, they were alleging forgery of proxies on a
massive scale (a formal legal complaint, fled in September at a Bombay magistrate’s
court by one Madan Gopal Jajoo, was to allege that about 84 000 of the 107 000
proxies were forged). Wadia contacted the then Janata Dal MP George Fernandes on
the Saturday afternoon, and got him to table a faxed message about the alleged
forgeries in parliament just before it adjourned.
The opponents of the takeover managed to get through several messages to
Narasimha Rao’s senior staff, who appeared startled by the warnings that the
government could be seen as party to a forgery in a case that might be heading to
court. The pressure worked. The Cabinet Secretary came back with the response that
the institutions would maintain the status quo at Larsen &- Tourbo.
It was then a matter of seeing that the instruction got through to the institutions in
time. On Sunday morning calls to the chairman of the Life Insurance Corporation
found he knew nothing about the decision. The cabinet office was then prompted and
it assigned an officer to the job in a special control room to circulate the decision to
the chairmen of the institutions. At 8.30 on the Monday morning, two hours before
the meeting, the LIC chairman spoke to Mukesh Ambani and told him as gently as
possible that unless the motions were withdrawn the institutions would vote against
them.
Shareholders were already packing into the Birla Matashri Auditorium, close to the
downtown Churchgate suburban rail terminus. It was too late to call off the meeting.
The Larsen & Turbo directors, including Mukesh and Anil Ambani, appeared on the
podium, and pandemonium erupted. Unaware of the Government’s decision, agitated
shareholders rushed the microphones set up in the aisles and freed off volleys of
questions and accusations. There was cheering and jeering by rival factions. The
directors were shouted down as they tried to speak. Eventually they gave up and
retreated behind the back curtain to exit the auditorium through a stage door. A
swarm of shareholders surged onto the surrendered stage.

The shouting continued for half an hour, but it was all over. Dhirubhai had suffered
what he later told close confidants was his greatest defeat. The government
institutions went on to appoint a seasoned Larsen & Turbo executive as the new
chairman. A Supreme Court ruling in May 1992 cleared the way for conversion of the
1989 debentures, diluting the Reliance stake down to about 8 per cent, the
company’s original entry level.
The alleged forgery of proxies was never fully investigated. Bombay police prepared
to raid the go down where Reliance had stored the proxy forms, but were called off
by the Maharashtra chief minister’s office half an hour before they moved in.
Within Reliance, the failure was a sobering lesson that times were changing for
Indian business. The government could no longer so obviously play favourites if it
wanted to entice foreign investment. The value of licences had gone. Tariffs and
excise duties were still high, but the trend would be to lower and uniform rates.
Financial markets and institutions would have their transactions and performance
scrutinised in public.
The level playing field was the motto of the times. The transformation had just
begun, but this was the way it would be, sooner or later. The implications for
industries like Reliance was that their production would have to attain worldcompetitive cost levels by the time the economy was fully opened. His expansionary
vision had put Dhirubhai in a good position. Whether by smuggling capacity or not,
his polyester and petrochemical plants were the largest in the private sector and had
the best economics of scale. By getting in early with his petroleum projects, he could
keep his capital costs down and be ready for the time when the sector was
deregulated and prices were brought down to world market levels.
Dhirubhai and his sons astutely portrayed themselves as part of the new India, raw
spirited capitalists champing to have the bridles of failed Nehruvian socialism taken
off.
The foreign investment funds had, already had their eye on Reliance since the boom
of 1985. In September 1986, the business magazine Forbes, which refers to itself as
the ‘capitalist’s tool’ , ran a four-page profile of Dhirubhai which described him as a
mixture of Ted Turner [the founder of the cable TV network CNNI and Horatio Alger
[the 19th century American inspirational novelist whose writings put the notion of
success through hard work]’s . It shrugged off the controversies raging around him
at that time. Since then, many more business journalists have profiled Dhirubhai for
the world’s press, and have usually taken his word that he has been dynamic and his
rivals ‘complacent .
The investment fund managers who flocked to Bombay from Hong Kong, Singapore
and London from the end of 1991 were also inclined to overlook the ‘colourful past.
‘Someone who can smuggle in a whole factory clearly has something going for him,’
one Kleinwort Benson researcher remarked at the tiMC.3 Imbued with the notion of
emerging markets forgetting that Bombay’s stock exchange, set up in 1875, was
among the world’s most established-the fund managers had reached India after
selling their clients on the business ventures of Thai and Indonesian generals,
Chinese People’s Liberation Army units and East Asian dynasties newly listed on new
stock exchanges. India was a cinch by comparison. Soon research reports were piling

up, pointing to India’s large middle class and its hidden savings, the basic soundness
of its British-style legal and corporate institutions, the sHI of its top administrators
and managers, and the political safety valves in its complex but democratic political
system.
Even before the first foreign portfolio funds were authorised to invest from mid1992, the Indian sharemarkets had enjoyed a spectacular boom and crash on the
euphoria generated by the reforms. The unprecedented bull run in Bombay saw the
market’s capitalisation (the total value of shares in the 6000 listed companies) rise
from Rs 756 billion in March 1991 to Rs 2764 billion in March 1992.
The source of the funds puzzled Finance Minister Singh and many of his officials,
given that the central bank was still applying a tight liquidity squeeze, with interest
rates around 20 per cent, as part of its attack on the external payments crisis. Then
it was discovered that bank reserves were being turned into speculative cash. To
help finance the huge government deficit, commercial banks were obliged at that
time to keep a total 54.5 per cent of their deposits in government securities and
cash. To make more profit from this compulsory investment, the banks traded and
swapped their holdings of bonds issued by the treasury or government corporations
in search of higher yields.
Changes in interest rates would raise or lower the market value of bonds carrying
rates fixed at earlier times. The deregulation of interest rates on bonds early in 1991
allowed public-sector enterprises to offer much higher rates on new issues, so the
market value of their existing bonds fell sharply.
At the end of 1991, banks were more keenly trading their securities in search of
higher yields. Banks were the only parties authorised by the Reserve Bank of India to
trade in gilts
(government securities), but several brokers had established
themselves as trusted middlemen for particular bank treasury departments. The RBI
was ill-equipped to control this growing market. Its register of who owned which gilts
at any time was through handwritten entries in Dickensian ledger books at its old
building in Bombay, and new ownership notes were posted out to banks. To speed
up their transactions, the banks and brokers developed their own informal system
outside the central bank’s aegis through the use of chits called ‘banker’s receipts’ or
Rs which were simply certificates issued by the banks themselves indicating that
they owned the securities being sold.
At the end of April 1992, it was revealed that many of the BRs were not backed by
securities at all. And the brokers, among them a young Gujarati named Harshad
Mehta who had earned the sobriquet ‘The Big Bull’ from his aggressive sharemarket
purchases, had been diverting the huge settlement cheques passing through their
hands, on the way from bank to bank, into their own accounts. While on such
unauthorised loan’s, the funds were put into the sharemarket. An article in The
Times of India by a young business reporter, Sucheta Dalal, brought the circus to a
stop on 23 April. Several Indian and foreign banks were left short of some US$1.4
billion worth of securities in their vaults. The sharemarket collapsed, inquiries and
prosecutions launched and the new Securities and Exchange Board of India (SEBI)
had a perfect excuse to bring Bombay’s clubbish stock broking fraternity to account.
By late 1993, the market bounced back as international investors discovered the
‘India story’ en masse and prices climbed to a new record in September 1994.

The 1991-92 boom helped Dhirubhai quickly overcome his Larsen & Turbo
disappointment.. In August, the Controller of Capital Issues (the post was abolished
six months later) cleared the expansion of the Reliance debenture issue, from the
previous Rs 5.7 billion to Rs 8.583 billion, plus the right to retain 15 per cent over
subscription. At a total Rs 9.87 billion it exceeded any previous issue in India. Split
into three series of bonds-one convertible, one convertible with detachable warrants
to buy shares, and another straight nonconvertible-it was more complicated than any
of the previous issues, but was successfully put to the market over November and
December. In April 1992, Reliance also rolled over its F Series debentures from 1985
for another seven years, offering investors a warrant to buy a Reliance share with
the renewed debentures.
Dhirubhai had actually fared rather better under V P Singh’s prime ministership and
its aftermath than he had under Singh’s tenure in the finance portfolio. Reliance’s
results for 1990-91 (April~March) showed a tough year, but sales had grown 13 per
cent to Rs 2 1.05 billion and net profit 39 per cent to Rs 1.25 billion. The dividends
were still a (for Reliance) low 30 per cent of the basic Rs 10 share, and a bonus issue
was out of the question. The new year, 1991-92, had started out with little growth in
sales or profit, given the brakes on the economy. But Dhirubhai asked his
shareholders, at their annual meeting in October 1991, to look at Reliance’s massive
projected expansion now that licensing had been removed on nearly all the
company’s products. This meant that the existing Patalganga plant would be further
expanded to international size and its supplies of naphtha and kerosene would soon
come by pipeline from the Bharat Petrochemicals refinery at Chembur, whose own
plans for downstream expansion had been virtually pre-empted by Reliance. The new
petrochemicals complex was coming up by the Tapti River at Hazira, on the former
tidal fat reclaimed by use of a massive Dutch dredger and extensive piling. Its
monoethylene glycol plant came into production late in 1991, and its polyvinyl
chloride and high-density polyethylene plants were expected on stream during 1992.
But the cost had blown out some 70 percent from the original Rs 10 billion because
of the rupee’s devaluation and the failure of government authorities to chip in their
share of the power plant and jetties. Financially, the subsidiary Reliance
Petrochemicals was struggling.
At this point, Dhirubhai decided to merge the petrochemicals arm back into the
parent company. The shareholders of Reliance Petrochemicals approved the move at
a meeting, in August 1991, held at Hazira where not too many of the 2.4 million
stockholders could have turned up. The meeting also allowed the early conversion of
the remaining portions of the company’s big debenture issue and the issue of fresh
shares to the Reliance parent company at par in payment of a loan from it. The
merger was announced as a decision by both boards on 28 February 1992, and made
effective from 1 March.
Three of Bombay’s leading chartered accountancy firms recommended a swap of 10
Reliance Petrochemicals shares for one Reliance share. It meant that Reliance
acquired the massive assets of the subsidiary at a discounted price, and from 199293 was able to add its growing production stream to its own sales or keep them inhouse at cost for use at Patalganga. The depreciation benefits of the subsidiary’s
investment were transferred to Reliance, where they were a shield against corporate
income tax for several years. Reliance’s profits indeed showed a strong leap the next
year. The 1991-92 year had finished strongly, showing a 30 per cent rise in profits to
Rs 1.63 billion. The merged group nearly doubled profit in 1992-93, to Rs 3.21

billion. Reliance shares had risen high again, so few of the subsidiary’s old
shareholders were complaining.
In December 1993, Dhirubhai announced that a duplicate of Patalganga would be
added to Hazira in a second polyester-PTA complex. Another 350 000 tonnes a year
of PTA plus 120 000 tonnes of polyester yarn, 120 000 tonnes of polyester staple
fibre and 80 000 tonnes of the bottle-making plastic PET would be ready in two
years. In September 1993, he had also entered a joint venture with ICI, Terene
Fibres India, to take over ICI’s 30 000 tonne a year polyester fibre plant at Thane,
outside Bombay. The three polyester works would make Reliance the fourth biggest
producer in the world (after Germany’s Hoechst, America’s Du Pont and Taiwan’s
Nanya), and the only one with production integrated from naphtha down to fabrics.
The integration was to move even further back upstream . In February 1994,
Narasimha Rao’s cabinet decided to award three oil and gas discoveries in the
Arabian Sea to a consortium involving Reliance with the Houston-based Enron 011 &
Gas Corp and the government’s own Oil & Natural Gas Corp, which had discovered
and delineated the fields but did not have the funds to develop them. Two of the
fields, Mukta and Panna, contained an estimated 265 million barrels of oil, and the
third, Mid and South Tapti, some 67 billion cubic metres of gas. Cost of development
was put at Rs 38 billion (then about US$1.25 billion) of which Reliance was
responsible for 30 per cent. Enron would be the operator initially, but would transfer
the role after five years to Reliance.
The results for 1993-94 showed Reliance had edged past the Tata Iron & Steel Co,
founded in the first decade of the century, to become India’s largest company
measured by annual sales, operating profit, net profit, net worth and assets. Its 2.4
million shareholders were the most widely spread equity base of any industrial
company in the world.
Dhirubhai’s return to stockmarket leadership was marked by a resumption of the
journalistic accolades cut off in 1986. The magazine BusinessIndia put him on its
cover as its Businessman of the Year for 1993.With no business background to speak
of, Ambani has emerged as a symbol of the New Indian Dream and his success has
rewritten the conventional code that only the rich can get richer,’ it said. Dhirubhai
had set the example for a host of industrial clones: ‘The last decade saw the rise of
an altogether different entrepreneurial breed on the industrial scene; one that was
impatient to get ahead, willing to take risks and wend its way through the regulatory
maze, displaying an entrepreneurial zeal that somehow seems to have evaporated in
the more established business houses.’ Mile it galled some that he seemed to have
crossed A limits in influencing politicians, Dhirubhai’s supporters said he didn’t do
anything different from others. The business environment compelled it, and it was no
use singling out any one person. Anil Ambani was quoted as saying: ‘perhaps my
father’s only fault has been that he thought too big and clearly ahead of his time. But
even as it was coming back into a single image, Reliance was creating new windows
on the screen.
In the main picture was the gas cracker at Hazira, consuming much of the parent
company’s financial resources. It was running years behind schedule (it eventually
came on stream in the 1996-97 year, some three years late), but this had been due
to 18 months of delays in getting the final licence issued after the November 1988
letter of intent from the government. Then it had been decided in 1992 to expand its
capacity to 750 000 tonnes a year of ethylene (from 400 000 tonnes).

Because of this burden, any other new projects would have to be started off the
Reliance books. In 1992, Reliance came out with two new subsidiaries. Two of its
associated investment companies had been transformed into Reliance Polypropylene
Ltd and Reliance Polyethylene Ltd to build new plants making those products within
the Hazira complex. The need for separate companies was explained by the equity
involvement of the Japanese trading house Itochu (the former C. Itoh & Co) which
was to put in US$50 million for a 15 per cent stake in each firm, making it the
biggest investment planned by a Japanese firm in India at that point. The issue of
equity shares and optionally full convertible debentures in November 1992 was wildly
oversubscribed: the share issues by around 100 times in each case and the
debentures by three to four times. All in all, about 10.5 million investors offered Rs
34.43 billion. Dhirubhai was able to keep Rs 3.25 billion for each company, and the
rest was a 15 per cent loan until it was refunded by mid-March 1993.
Even before they were born, the Reliance twins’ were the cause of controversy. The
Securities and Exchange Board of India had noted that their shares were being
ramped on the Bombay Stock Exchange, and insisted that the prospectuses carried
the warning: ‘The current market price of the shares is not a true indication of the
actual worth of the shares as the current market price is only as a result of circular
and thin trading among a smaller number of interested parties.’ But SEBI found this
had occurred before it issued its new stockmarket regulations. The problem was
shuffled over to the Bombay exchange, which identified the brokers involved but did
not press penalties. The twins later became problem children.
Dhirubhai had also begun setting up a new company to carry out his biggest dream,
building a full-scale oil refinery. In 1992, he had gained clearance from the Foreign
Investment Promotion Board attached to the prime minister’s office for Itochu to
take 26 per cent of the 9 million tonne a year refinery. In August 1993, he
announced that Reliance Petroleum would make its inaugural capital raising, through
an even more complex issue called a triple option partially convertible debenture.
Subscribers were offered debentures with a face value of Rs 60. Of this, Rs 20 was to
be converted into equity shares at par, one on allotment and one after 18 months.
The Rs 40 balance, nonconvertible, would he paid back doubled in three annual
installments from the sixth year (equivalent to an effective 14.35 per cent annual
interest). Two attached warrants for shares could he sold on the market, or
exercised for Rs 20 each. Or investors could get their money back on the Rs 40
nonconvertible portion after 46 to 48 months and receive two shares from the
warrants at Rs 20 each.
If Dhirubhai had previously made the nonconvertible convertible, the new issue was
surpassing. Investors would get equity shares immediately in a business which did
not yet exist and which was years away from earnings, and would have nonconvertible debentures which would not earn any returns until the sixth year. It was
extremely cheap money until then, almost free.
But when put to the market in November 1993, it raised the targeted Rs 21.72 billion
from institutional investors and the public, and was oversubscribed three times.
Reliance itself put in Rs 5.773 billion, taking the total proceeds to Rs 27.493 billion or
close to US$1 billion at that time. Itochu was no longer in the picture and not
mentioned in the prospectus. The absence was not really explained. Together with
another partly convertible debenture issue to Indian institutions along with overseas
supplier’s credits, lease finance and some overseas borrowings, the issue was to fund

the refinery’s cost of Rs 51.42 billion by its planned completion in three years time,
that is, late 1996.
Dhirubhai now had 2.6 million shareholders in Reliance Petroleum as members of his
‘family’s .
Almost immediately, the project met delays on the ground, as disputes were
reported with landowners on the site at Moti Khadvi, about 25 kilometres outside
Jamnagar on the west side of the Saurashtra peninsula. Court actions were to
continue until May 1996 when the company established its hold over some 2240
acres. But by the time Dhirubhai arrived on 23 January 1995 for the bhumi puja or
ritual groundbreaking prayers involving the cracking of a coconut and the chanting of
Vedic scriptures by a Hindu pundit, the size of the refinery had expanded in his plans
to 15 million tonnes a year, with another petrochemicals complex alongside making
1.4 million tonnes a year of paraxylene and other downstream products and
including a third FTA plant of 350 000 tonnes.
The cost of the refinery was now put at Rs 86.94 billion, and the petrochemicals
works were another Rs 45 billion. However, the completion date had slipped two
years, to late 1998 or 1999, which would be just before the returns on the
nonconvertible part of the debentures were due. Would Reliance Petroleum then
disappear back into the parent company, many investors wondered, in another
many-for-one share swap? Would there be more delays and more expansions?
The new investors, especially the foreign portfolio funds, had by then learnt that
Dhirubhai was capable of constant surprises. Reliance was moving in so many
directions simultaneously that it was hard to put the whole sum together. Probably
only Dhirubhai,
his two sons and a few others had the whole equation in their head. The cachet with
the new foreign investment funds had been turned into cheap finance raised in
London, Luxembourg and New York. Despite the mayhem in the Bombay capital
markets in May 1992, Reliance had then been the first Indian company to float
Global Depository Receipts (Gars), a convertible bond priced in US dollars but initially
priced in a linkage with the Reliance share price in India. It had been a Herculean
effort of share price support against the background of the securities scam, and once
the issue closed on 1 8 May Reliance had to offload the shares it had bought on
market onto the books of friendly Indian institutions, mutual funds and merchant
banks which had been convinced that helping India’s first GDR issue was a patriotic
duty. Within two months the GDRs were trading at a 25 per cent discount to the
issue price.
When India’s financial image recovered the next year, Reliance was back with a
US$140 million Euro-convertible bond issue in November 1993 managed by Morgan
Stanley, whose investment guru Barton Biggs rated Reliance scrip one of the best
buys in Asia.
Many other investment advisers then saw Reliance, the most liquid security in the
sharemarket, as a surrogate for the entire Indian market or the quintessential India
story’s .
Anil Ambani, the more outgoing of the two sons, became the public face of Reliance
in the numerous road shows held in world investment centres from then on. In
February 1994, the company made the biggest GDR issue yet, of US$300 million,
after some delays in permission from the Ministry of Finance which had noted that

the proceeds of the previous Euro-issues had not yet been completely used for the
designated purpose and that Reliance seemed to have money to play the
sharemarket.
The foreign enthusiasm was dashed considerably at the end of 1994, however, when
Reliance carried out two manoeuvres which many investors felt had broken
assurances.
On 22 October, Reliance announced it was placing 24.5 million shares with Indian
financial institutions to raise a total Rs 9.43 billion to fund its oilfield developments.
It emerged that the Unit Trust of India had put in Rs 7.73 billion, the rest coming
from the Life Insurance Corp and the General Insurance Corp. A five-year lock-in
applied, meaning that the institutions could not sell the stock for that time.
Just over two weeks later, Reliance announced it was merging the twins ’ Reliance
Polypropylene and Reliance Polyethylene into itself, in a share swap set by two
accountancy firms that seemed quite generous to the shareholders of the two
subsidiaries, which were still a year away from production.
The foreign investment fund managers were livid. Early in October, Reliance had
staged a road show in Hong Kong to present its first-half results to market analysts.
The Reliance financial manager Alok Agarwal had been repeatedly asked whether the
company had any plans to raise equity capital in the near future. Agarwal and other
company executives had left everyone with the impression that there were no plans
to do so. Now, within a month, Reliance had made two moves which involved the
issue of about 99 million new Reliance shares, expanding the share base by over 30
per cent.
The foreign funds had by then lifted their combined shareholdings to 13 per cent of
previous total equity, on the expectation of very strong growth in earnings per share,
a widely used yardstick of the profitability of a share. Their analysis was now way out
of touch. Profits would be spread over a much greater number of shares, so
earnings-per-share would be much lower. To complaints that Reliance had given no
hint of such a dilution of equity, the company rather lamely said it had not
specifically ruled it out.
Some fund managers in Bombay threatened a revolt, telling Reliance they would
vote their shares against the merger at the extraordinary general meeting called to
approve it on 6 December 1994. They produced evidence of heavy buying in shares
of the twins before the announcement. Both Reliance Polypropylene and Reliance
Polyethylene were trading at around Rs 40 early in June 1994, but climbed steadily
to peak at Rs 105 and Rs 92.5 respectively on 8 November when the announcement
was made. For those in the know about the swap-ratio, it would have been either a
cheap entry into Reliance
itself-since its shares were trading at more than Rs 400 by October-November-or a
chance for some insider-trading profits.
One investor that was not complaining, oddly, was the Unit Trust of India. It was
unclear whether its top officials had been told of the twins’ impending merger, even
though it was announced only two weeks after the private placement and had an
immediate unfavourable impact on the Reliance share price. If the merger plan had
not been foreshadowed, the Unit Trust might have been able to argue that a material
event had not been disclosed and seek redress for its unit holders. If it had been
told, the performance of its managers was open to question.

No one was arguing with the logic of consolidating the twins into the parent company
at some stage. It added sales, assets and profits while eliminating the sales tax that
would apply to transactions between separate companies. But this should have
happened closer to the time the twins’ plants came on stream. As the London
investment group Crosby Securities noted in a company report in 1996, ‘The surprise
equity dilutions ... had cast a shadow of doubt on the treatment of minority
shareholders '. The effect was a fall in the Reliance share price, and an even sharper
tumble in the price of its GDRs listed in Luxembourg.
The investment bankers did not ostracise Reliance for very long. The angry fund
managers in Bombay were called by their head offices in Hong Kong and London and
told not to make a fuss at the 6 December shareholders meeting.
There were still some fat fees to be earned from managing new capital issues and
borrowings, though Reliance had burnt bridges with many equity investors in Europe.
But there was still the debt market, and the whole new world of the American debt
and equity markets to tap into.
In 1995, Reliance made some more new capital-raising firsts for Indian companies.
In July it raised US$150 million in a seven-year syndicated bullet loan in Europe,
meaning that it was repayable in one lump at the end of the term. In October of that
year, it placed US$150 million worth of 10-year bonds at 1.9 percentage points over
the US Treasury 10-year rate with American institutions, having gained a favourable
credit rating from the National Association of Insurance Companies. By mid- 1996, it
had gained an investment grade rating by one of the two big New York rating
agencies, Moody’, though not from the other, Standard & Poor’. It put through
US$200 million in bonds
with the help of Merrill Lynch, half for 20 years and half for 30 years. Reliance
Petroleum meanwhile raised US$260 million for the Jamnagar refinery through two
bond and GDR issues in the first half of 1996.
The retreat of the Indian Government from its monopolising of many infrastructure
sectors had opened up numerous opportunities. Dhirubhai had often used the oldfashioned adatye ‘tick to your knitting’s to keep his executives looking at associated
activity (his first industrial activity had actually been the knitting machines at
Naroda). The sons were keen to try something new. If tenders were won, that’s
where Reliance
would go. Many projects were proposed by the mid-1990s, including a software
technology park near Hyderabad, a small transport aircraft with Hindustan
Aeronautics Ltd in Bangalore,
diamond mining with South Africa’s De Beers Corp in Madhya Pradesh, a toilway
from Bombay to Pune. The firmest steps, however, were in power and
telecommunications.
Reliance gained approvals for three mid-size power plants in Patalganga, Jamnagar
and Delhi. It also won the licence to operate a basic telephone service in Gujarat, in
partnership with the American utility Nynex, called Reliance Telecom, for a licence
fee of Rs 33.96 billion payable over 15 years. The only competitor would be the
cashstrapped and trade union-bound government telephone service and two private
cellular services. In addition, Reliance Telecom won licences to run cellular services
in the states of Madhya Pradesh, Orissa, Bihar, West Bengal, Assam and Himachal
Pradesh and in the northeastern hill states for modest total licence fees of Rs 3.37
billion over ten years.

The telephone licences covered nearly one-third of India’s population, but (aside
from Gujarat) were in some of its poorest regions.
In addition, Dhirubhai also appeared to be gearing up for more corporate powerplay. Over the course of 1995-96 (to March), the Reliance shareholding in Larsen &
Turbo jumped from 5.96 per cent to 8.73 per cent, while its holding in the cash-cow
Bombay & Suburban Electric Supply Co moved up slightly to above 6 per cent. The
neglected subsidiary Reliance Capital & Finance Trust was also charged up with
sizable capital through rights issues and private placements and renamed simply
Reliance Capital, under the ‘third son’ nand Jain. In 1995-96 it declared a profit of Rs
1.109 billion, and had a net worth of about Rs 10 billion.
Around the end of 1993, most of Dhirubhai’s old Aden colleagues remaining in
service were eased out into retirement. Mukesh and Anil felt these men no longer
had the drive necessary to push Reliance’s huge expansion forward, but some were a
little bitter that they could not stay on. The Gujarati favour of the company was
further diluted by the recruitment of more managers and technical staff from other
parts of India. The family also formalised a split of assets that saw Dhirubhai’s two
brothers Ramnikbhai and Nathubhai give up their remaining executive roles in
Reliance and concentrate on their own personal businesses outside. Though both
remained on the board, it was made clear that their children were not in the line of
succession to run the company though the two sons of Dhirubhai’s nephew and close
associate, Rasikbhai Meswani, who had died in 1985, were taken on as executive
directors once they finished their education.
The reorganisation was an effort to prevent two of the failings that hit many Indian
companies once they pass from the control of the founding entrepreneur. The
companies are often run as highly personalised fiefdoms by the original patriarch,
who holds
most of the decision-making powers and delegates little to managers, mixes personal
and corporate finances, and requires a high level of sycophancy from employees.
When the empire passes on to two or more pampered sons, frictions are almost
inevitable, and usually the only solution is a split of assets and businesses. In some
cases this is relatively amicable, as with the children and grandchildren of G. D. Birla.
In others it is bitter, as with the Modi brothers and cousins, and requires intervention
by the big banks and financial institutions that may have investments or loans with
the group. The result is a plethora of groups holding the same family name,
distinguished by the initials of the particular owner. The other failing is a
consequence of continuing this personalised leadership---a lack of professionalism
throughout the organisation and weak systems
of financial and operational control.
In a diverse conglomerate like the original Birla or Modi groups, a split can be
beneficial. In a highly integrated company like Reliance it could be disastrous. To all
appearances, Dhirubhai’s succession plan looked free of immediate trouble. The two
sons had never shown any sign of dispute or dissatisfaction with their positions at
Reliance. The older son Mukesh’s elevation to vice-chairman, after Ramnikbhai
Ambani, Dhirubhai’s older brother, stepped down as joint managing director,
indicated that he would take charge eventually. As Dhirubhai slowed down in his
sixties, and attended the office for a shorter working day, Mukesh assumed more
and more of the major decisions, though
Dhirubhai retained the ultimate say. Reserved, and deceptively mild in appearance,
Mukesh was regarded as highly determined and even ruthless by acquaintances, as

well as being a talented engineer and manager. Anil was more the public face of
Reliance, talking to the press and investors.
Either individually or put together, however, the two sons seemed unlikely to display
all the attributes of Dhirubhai, especially s genius for forging personal relationships
at A levels and, perhaps, his boldness of vision. That this was a question mark over
Reliance was recognised by an attempt to show the wide range of professional skills
in the company’s expanding workforce. But the Ambanis seemed caught in a
dilemma.
Formalising the company’s process of formulating new policies and strategies or
taking running decisions could rob it of its ability to move fast and grab
opportunities. Reliance could end up like the slow-moving committee-driven
corporate bureaucracies it often derided.
As Dhirubhai moved closer to realising his dream of an integrated petroleum empire
and of handing on a modern corporation, however, events took a turn that made
Bombay wonder whether the Ambanis and Reliance had changed at all in essence
from the buccaneering days of the early 1980s. Suppressed scandals came to the
surface, including a dispute that seemed to question Dhirubhai’s most often
professed loyalty. To the millions of shareholders in his Reliance family who had put
their savings into the security of Reliance shares.

HOUSEKEEPING SECRETS
On 29 November 1995, the Bombay Stock Exchange faced perhaps the biggest
challenge to its existence in its scandal and crisis-ridden 120 years. A letter arrived
that day from Reliance Industries, signed by a junior executive on behalf of its
board. Recalling that Reliance had been first listed on the Exchange in November
1977, the letter said:
‘We regret to state that we are constrained to terminate the said listing. The sixpage letter went on to blast the Exchange for singling out Reliance for based and
prejudiced action’ and accused some of its board members of being part of a cartel
of ‘ears’ that had been hammering down the company’s share price, to the detriment
of its millions of investors. It was now moving to the new National Stock Exchange, a
computerised rival set up by the government as an alternative to the score of unruly,
casino-like city exchanges.
Reliance at that time had a weighting of about 10 per cent in the Bombay Exchange’s
most commonly used index of price movements, the 30-share Sensitive Index or
Sensex. The most liquid of the 6500 listed stocks, it typically accounted for almost
30 per cent of the daily trading volumes. Dealing in Reliance shares was bread-andbutter for Bombay’s brokers. The company and its founder Dhirubhai had been
credited for much of the explosion in share ownership among the Indian public since
the 1970s.
Now Dhirubhai was taking his bat and ball, and moving to another pitch.As if to rub
it in, a massive upsurge in trading volume simultaneously hit the National Stock
Exchange, where Reliance had just been listed. If Reliance were allowed to move,
the Bombay Exchange suddenly faced obsolescence.
But whatever the jitters among its broker members, Dhirubhai was wrong if he
thought the Exchange’s executive board would be quickly cowed. Its president,
Kamal Iabra, immediately likened Reliance to a ‘fugitive from justice’ feeling to
another jurisdiction.
Dhirubhai had been in and out of many scrapes before. His alleged misdeeds and
manipulations had filled the front pages of newspapers and taken up many hours of
parliamentary debate, just as his industrial and financial acumen had preoccupied
the glossy business magazines. The dispute that had led to his attempt to delist his
stock was undoubtedly the most hurtful and damaging of all. It struck at the very
heart
of
his

repeated claim that, whatever else he might have done, he had always looked after
his shareholders.
At issue was whether Reliance had knowingly issued more than one copy of each
share and deliberately mixed up records of share ownership. If such suspicions were
true, it meant that Reliance had been giving worthless paper to investors, or giving
them shares owned by someone else. It could be fraud. It would threaten the most
basic trust underpinning India’s capital markets.
The dispute blew up in the latter half of 1996, but the constituent chemicals had
been mixed nearly a decade earlier and the fuse smouldering for three years.
Dhirubhai and Reliance had been involved with several of the major players in the
money market manipulations that had collapsed in the 1992 Bombay securities
trading scandal.
According to brokers and bankers involved, the practice began in 1984-85 when the
portfolios of several public-sector banks were churned over on behalf of Congress
Party fund-raisers for Raiiv Gandhi’s election, raising Rs 4 billion. ‘he brokers who did
the transaction got the confidence and started doing it on a big scale,’ one banker
recalled.’
The Reserve Bank was aware that bankers’ receipts, or BRs, were being issued
without the backing of actual securities, but did little about it. For ten years until
1992, the RBI’s deputy governor supervising banking operations was Amitava Ghosh,
later criticised in a Joint Parliamentary Committee report on the seam as having
taken a casual approach to his role. Dhirubhai is widely credited with having swung
Ghosh’s unusual second five-year term as deputy governor.
The entry of public-sector enterprises (PSES) in the late 1980s stepped up the
unofficial market’s tempo. Approvals for borrowings given by the Ministry of Finance
to the enterprises were valid for a year, so the enterprises would make their bond
issues before the approvals lapsed, even if the investment programmes for which the
funds were intended were delayed. Few of the bonds would be marketed to the
public: nearly A were sold in bulk to the banks who needed such government-backed
securities for their reserves. The banks would be stuck with low-interest paper and
the enterprises with surplus cash. Both parties had a need to beat the interest rate
on the bonds.
Enter the portfolio management scheme, whereby the enterprises (and privatesector companies) would lend their spare cash to the banks which would make highyield investments on their behalf. The transfer was not a deposit (in which case the
banks would have had to put 54.5 per cent into their reserves), and no return could
be guaranteed. The risk would be on the enterprise, not the bank.
That was the theory, anyway. In practice, the banks competed for PSE funds by
giving an indicative return. The PSEs wrote the placement down as a deposit in their
own books. If the banks made more than the indicated return, they kept it. The risk
stayed with the owner of the money. In practice, the banks were not equipped to
make high return speculative investments, usually in the sharemarkets, and
developed informal relationships with brokers. But because the banks were not
allowed to lend money to brokers, a subterfuge was needed. The cover was a fake
securities transaction, whereby the broker obtained an unbacked BR from a

compliant bank to give in return for the funds. The transaction would usually take
the form of a ready-forward or ‘purchase option (repo)’deal, whereby there would be
an agreement to sell back the security after a certain time. The repo deals became a
substitute for interest-bearing loans, to avoid interest rate controls, reserve
requirements and withholding tax on interest. It was a market in which inside
information on interest rate changes, dividends paid by the Unit Trust of India and so
on could be turned to money by fencing the less informed.
Dhirubhai, according to the same sources, became interested in the money market in
the late 1980s and played it to recover some of the funds lost in the desperate 198687 defence of the Reliance share price. He had built Reliance’s fundraising operations
to such a level that one analyst likened them to a virtual banking business parallel to
and almost as important as the polyester business.2 It is hard to believe that the
opportunities in the repo market would be unknown to him or unused. But
transactions would have been put through brokers such as Hiten Dalal, a former V D.
Desai & Co employee who had started on his own in 1989. And even then, the
brokers were themselves officially not there in the dealings between banks.
The best known figures in the 1992 repo boom, Harshad Mehta and his brothers, had
been caught in the crushing of bear brokers engineered by the third son Anand Jain
at the end of 1986. They had escaped lightly after pulling a family connection-one of
the brothers was married to a daughter of the vice-chairman of the Industrial Credit
& Investment Corp of India, a major lender to Reliance. The father-in-law had
interceded with Reliance auditor D. N. Chaturvedi. Chastened, the Mehtas stayed
clear of Reliance and turned to the money market. In 1990, they correctly judged it
time to return to equities and by 1991 had built up a huge reputation in the
sharemarket, where even rumours of their interest were enough to send a stock
rocketing upwards. Around November 1991, the Mehtas put in a call to Anil Ambani
to break the ice. Their first meeting discussed the 1986 affair; it was agreed to let
bygones be bygones. They started meeting frequently. The Ambanis were concerned
about their share price, which was hovering between Rs 130 and Rs 170 despite the
efforts of legendary market movers like stockbroker Nimesh Shah. They wanted to
be first in India with a Euro-issue and to sell it at a high price
The Mehtas found that Reliance was still seen in the market as a seller of its own
shares. Every time the price rose Rs 20 or so, its brokers would start booking profits.
The Mehtas agreed to start pushing up the share price, on condition that Reliance
itself stopped selling. The intervention worked. From Rs 127 at the start of 1992, the
Reliance share price rose to Rs 241 at the end of February and Rs 455 at the end of
March. That was against a background of wild bullishness in the market-the Sensex
rose from 1915 at the end of December to a peak of 4467 on 22 April 1992-but the
ramping of Reliance was a substantial cause in itself.
Harshad Mehta became a celebrity. The press speculated about his source of funds,
gave respectful attention to his novel theories about valuing stocks, and wrote
without envy about his ostentatious wealth. He and his brothers lived in a huge
apartment on the Arabian Sea at Worli, with some 27 foreign and locally made cars
in the garage.
Harshad was declared India’s biggest income taxpayer. He was also dubbed ‘The Big
Bull’ title once given to Manohar Pherwani in his days heading the Unit Trust of India.
Mehta’s fellow Gujaratis came to regard him as a second Dhirubhai. He had come
from a similar unprivileged background (his father a shopkeeper, and his commerce

degree a bare pass from a low-status college). A thrusting young bull was
shouldering aside the old bull.
It caused some pique at Reliance that a mere broker was achieving such glory, and
even presuming to correct Dhirubhai on his investment strategy. The Mehtas were
buying up debentures that Reliance was selling, particularly those of the struggling
Reliance Petrochemicals and Larsen & Turbo. The Reliance Petrochemicals
debentures were a good buy, ultimately providing a very cheap entry to shares in
Reliance itself after conversion and then the merger. In December 1991, the Mehtas
had also virtually taken over part of the triple debenture issue by Reliance, by
placing a massive order and asking the company to stay out of the field itself.
A small incident may have helped convince the Ambanis that Harshad Mehta was
getting too big for his boots. Harshad and Anil Ambani had ridden down together in
the elevator at Maker Chambers IV, the building housing the Reliance head office in
Bombay’s Nariman Point, and stood together on the steps while their cars were
hailed. Harshad’s arrived first, a gleaming new Toyota Lexus, at that time the only
one in India. Anil looked at it in admiration and made some complimentary remark.
Harshad promptly handed over the keys and told Anil: ‘Take it, it’s yours.’ Anil
refused, but the gesture may have left him feeling patronised.
A net was closing in on the Mehtas in any case. The central bank’s governor, S.
Venkitaramanan, had been trying again to goad his deputy governor, Ghosh, into
cracking down on the BR trading between banks. He was also intrigued by Harshad
Mehta’s apparently inexhaustible source of funds. An income tax raid on Mehta in
February had failed to crack the secret because the Mehtas kept their data on
encoded computer disks. Venkitaramanan had not quite put his suspicions together
and made the mental link, but he was getting closer. In March, he asked the State
Bank of India to look at Harshad Mehta’s account. The bank reported huge inward
and outward flows of money.
Over April, the State Bank began pressing Mehta to reconcile the huge shortage, Rs
6.2 billion, in his business with it. He sought to roll over the obligation, and on 24
April brought in cheques to settle his dues. But by then the scam was out. On 23
April, The Times of India had reported a Rs 5 billion shortfall in the State Bank’s
treasury on account of transactions with a broker called ‘The Big Bull’s. The music
stopped, and ten leading banks were left with a Rs 40 billion gap in their books.
It soon emerged that Harshad Mehta had paid his dues with funds provided by a
fully-owned subsidiary of the central bank itself, the National Housing Bank.
Venkitaramanan, after his own appointment by the Chandrasekhar government, had
brought back the former Unit Trust of India chairman Pherwani as the Housing
Bank’s chairman and managing director. Still wildly ambitious, Pherwani had thrown
the bank into the thick of the repo-based securities trades. When Harshad Mehta was
put in a squeeze by the State Bank, the Housing Bank had obliged him with cheques
made out to ANZ Grindlays Bank. Mehta had banked these into his own account with
ANZ Grindlays, and then paid the State Bank of India. (The Australian-British bank
was later pulled up for breach of banking rules and forced to return Rs 5.06 billion to
the Housing Bank pending arbitration on its defence that crediting cheques to
brokers accounts had been established practice. After four years of hearings and
deliberation, the arbitrators returned the money to ANZ Grindlays.)

According to sources close to the Mehtas, Dhirubhai had been the first person
Harshad Mehta had contacted when put on the spot by the State Bank. Dhirubhai
had told him:
‘Don’t call anybody, I’ll look after the matter.’ According to an account by the
financial journalist R. C. Murthy, Pherwani had agreed to bail out Mehta at a meeting
with Harshad Mehta and in industrial tycoon.
One acquaintance confirms that Pherwani said Dhirubhai had been the person who
interceded for Mehta was forced to do,’ Pherwani told this person. However the Meta
linked sources deny that a joint meeting took place between Pherwani, Dhirubhai and
Mehta.
The Mehtas later came to assert privately that Reliance had been the cause of their
downfall, bringing them to the attention of the tax authorities, Venkitaramanan and
then the press. The whole securities scam was an exercise to eliminate us, but like
putting ink on a blotting paper it could not be contained,’ a source close to the Mehta
brothers claims.
It is hard to believe this, given that Reliance was still more than two weeks away
from its GDR issue when the scam blew open on 23 April 1992, and that Harshad
Mehta had been a key operator jacking up the Reliance share price. Nor does it
reconcile with the pressure put on Pherwani to pull Harshad out of the soup.
Pherwani had been the fall guy for Dhirubhai once before, losing his Unit Trust of
India job over the Larsen & Turbo affair. Now he faced complete disgrace. Harshad
was unable to pull off the big securities deal he promised Pherwani, whereby a
government corporation would have parked the funds through him with the Housing
Bank. Pherwani resigned on 9 May. In the early hours of 21 May, family members
found him dead at his Bombay home. The journalist Murthy got a phone call and
rushed to the house about 8 am. Pherwani’s body looked blue’, he remembers. It
was cremated at 11.30 am the same day, with the face covered instead of left open
in the normal Hindu way. The death was ascribed vaguely to a heart attack. Murthy
and many others believe Pherwani committed suicide.
The opening up of the securities scam led to investigations by the Reserve Bank of
India, the Central Bureau of Investigation and finally the Joint Parliamentary
Committee. Senior bankers were sacked, several brokers and bankers arrested
(including Harshad Mehta) and a special court set up to try those charged. Three
ministers ultimately lost their posts for improper financial dealings. The blame was
widely spread among financial system regulators, including the Reserve Bank
governor, Venkitaramanan.
The links between Reliance and Harshad Mehta or other brokers were never made
explicit throughout the entire investigation, though the favours shown to Reliance by
several banks were criticised in the parliamentary committee’s report. It noted how
funds put by the Oil & Natural Gas Corp in portfolio management schemes with two
banks had been channelled through brokers into Reliance shares; how Reliance had
recruited the ONGC chairman immediately on his retirement; and how some banks
had given large amounts of credit to Reliance and its associated front companies
through bill discounting. In a general note on the overall scam, it said: ‘There is
some evidence of collusion of big industrial houses playing an important role. The
Congress majority in the committee, who included Dhirubhai’s old friend Murli Deora,
prevented the probe going any further than that. A note by the opposition minority

pointed out that there were still gaps in the investigation, and that the CBI had made
many lapses (its chief investigator, K. Madhavan, had resigned in protest during the
inquiries). A second note by three Left MPs pointed out that the Reliance name had
surfaced more often that those of other industrial houses, but this must still be only
the tip of the iceberg . One MP who was in the committee recalls: ‘here was always a
lurking suspicion that big interests were behind the scam, but there was no trace. It
was one reason why we put all the evidence in the parliamentary library instead of
having it destroyed, which is the usual practice. There was some resistance to this.’
Many of the committee members also had their doubts about the central bank
governor, Venkitaramanan.
In the 1980s, as head of the Ministry of Finance, he had been openly accused in the
press of belonging to a pro-Reliance clique of officials, and was distrusted because of
this by his then minister, V P Singh. His appointment as Reserve Bank governor was
generally seen in Bombay as a favour called by Dhirubhai during Chandrashekhar’s
brief prime ministership. It emerged also that Venkitaramanan’s son was linked in a
business venture in Madras with Dhirubhai’s son-in-law, Shyam Kothari.
Venkitaramanan had been India’s man of the hour in March-June 1991, handling the
external payments crisis when New Delhi was paralysed by political crisis. A year
later, the opposition MPs wondered, was he helping to cover up aspects of a scandal
that pressured his own friend and head of a central bank subsidiary, Pherwani, to the
point of suicide?
The Reliance GDR issue was successfully put to the market over 11 - 18 May, despite
the financial mayhem breaking out back in Bombay. Fortunately for Reliance, the CBI
did not move in to arrest Harshad Mehta and his brother Ashwin until well after the
issue closed, on 4 June.
Dhirubhai’s connections with the scam had been buried and, as he might have said
to his old friends in the yarn market, a first-class fountain had been built on top. Or
so it seemed.
Since his stroke in February 1986, Dhirubhai had been careful to keep up his
exercise and worked hard to bring back full dexterity to his right side. He employed a
well-qualifed young physiotherapist with a Bombay suburban practice, RaM Vasa,
who soon became a regular visitor to the Ambani household at Usha Kiran and then
Sea Winds.
As well as paying her her normal fees, Dhirubhai rewarded Vasa with allocations of
Reliance shares. In January 1994, Ram and her husband Agenda decided to cash
some of their paper wealth, and sold 26 650 Reliance shares through a broker, R. D.
Choosey. In turn, Choosey delivered the share certificates and the signed transfer
forms to broker V K. Jain who had bought and paid for them on behalf of a company
named Opera Investments.
In April, the Vases wrote to the Reliance’s share registry, Reliance Consultancy
Services (RCS), notifying the loss of certificates for 33 809 shares and asking for
duplicate certificates. Among the distinctive numbers they listed were the shares sold
in January In June, the broker V K. Jain brought the shares along to RCS to register
the transfer of ownership to his client. The registry rejected the transfer form
because, it said, the signatures did not tally with those on its record. In August, the
same registry issued new share certificates to the Vases, who later sold them to

Merrill Lynch. Jain had meanwhile complained of a bad delivery to the Bombay Stock
Exchange, which had begun an inquiry.
Over a year later, in September 1995, the Exchange began asking Reliance about
the Vasa case. In early October it began recovery of the claim against the Vasa’s
broker, R.D. Choksey. In their meetings with the Exchange’s board, the Reliance
representatives headed by Anand Jain were surprised at the hostility of the
questions. We are Reliance,’ Anand Jain told the Exchange’s president, Kamal Kabra,
according to one board member’s account of the meeting. ‘Don’t ask this kind of
question to us. ‘Behave yourself,’ Kabra is claimed to have said. ‘You are Reliance in
Maker Chambers IV but in this chamber you are just one of 6800 listed companies.
Anand Jain offered to settle the outstanding claim immediately, putting down a pay
order for Rs 10.8 million, on condition that the investigation and penalty action be
halted.
The Exchange’s board met and considered the action. On the face of it the persons at
fault were Rahall Vasa and her husband. So why should Reliance step in? The board
decided that money was not enough. On 16 October, the Exchange sent a showcause notice to Reliance. Neither Reliance nor its registry, RCS, had raised any
queries with the Vasas, or told Opera Investments about the issue of duplicates for
the shares it had presented. It had not fled any complaint with the police, or told the
Exchange of any steps to enforce an indemnity given by the Vasas when they applied
for the duplicates, or, despite the obvious frauds , started any legal proceedings.
Reliance was thus guilty of gross negligence, if not an accomplice.
Almost at the same time, another timebomb blew up. One of the financial houses
deeply involved in the 1992 securities trading scandal had been a fast-growing and
politically well-connected firm called Fairgrowth Financial Services Ltd. It was caught
up in a mass of claims before the special court set up to handle the scam cases,
presided over by Justice S. N. Variava. One claim that Fairgrowth was pursuing
concerned a parcel of 1.5 million Reliance shares it had bought through a broker
named Pallav Sheth in February 1992, and then sent for transfer to RCS. In March
that year, Sheth had arrived back with Ajit Ambani, brother of Reliance’s company
secretary Vinod Ambani (no relation to Dhirubhai) and urged Fairgrowth to withdraw
the transfer. They undertook to sell the shares in the market. It was the last
Fairgrowth saw of the shares or its money. In 1993, Fairgrowth obtained a court
order for Sheth to repay it Rs 515 million in monthly installments. Sheth defaulted
after one payment.
In October 1995, Fairgrowth began trying to trace the funds on a second front. It
filed a petition in the special scam court asking Justice Variava to compel Reliance
and RCS to tell it where the shares went. News of the two cases, Fairgrowth and
Rajul Vasa, became the talk of the markets. Rumours that duplicate shares were in
circulation caused a sharp fall in the price of Reliance shares in Bombay and of its
GDRs in London.
Reliance read a plot into the cast of characters ranged against it. Two of the most
vocal Bombay Stock Exchange directors against it were M. G. Damani and Rajendra
Bhantia. Damani was an old Exchange bear. Bhantia was a friend of Nusli Wadia, and
had been connected to FairGrowth previously. The Fairgrowth lawyer, Mahesh
jethmalani, son and legal partner of Ram Jethmalani, had defended Wadia in the
Fairfax affair and appeared against Reliance in the court battles of the 1980s. The
old fighting instincts were roused.

On 30 October, a letter arrived from Reliance at the desk of the Securities and
Exchange Board of India’s chairman, D. R. Mehta:
We regret to bring to your kind notice that over the past few weeks a systematic and
well orchestrated campaign has been conducted by a cartel of bear operators against
us, Reliance Industries Ltd, with a view to blemishing our fair reputation as India’s
No 1 private sector company, bringing down the market price of our share and thus
our market capitalisation, and causing in the process huge losses and untold anxiety
to our 2.4 million strong family of small and institutional investors.
The letter went on to say that the Vasa case had been blown up out of A proportion,
that the Bombay Exchange’s board deliberations had been leaked to the press in a
systematic, distorted way, and that the Fairgrowth issue had been falsely linked with
the duplicates case. It was necessary to track down gan evil coterie’ of brokers and
operators, and to provide reassurance to millions of small investors in the grip of a
fear psychosis .The Bombay Exchange continued to hold firm. After another
combative meeting with Reliance representatives on 14 November, its board met
immediately afterwards and decided to penalise the company with a three-day
suspension of trading in its shares, starting on 16 November. The news was in the
next morning’s paper before the formal notice arrived at Reliance late in the
afternoon, too late to take out a High Court restraining order before the suspension
came into effect. Dhirubhai had to endure the humiliation.
On the day the suspension started, the special seam court dealt a second blow.
Justice Variava froze the transfer of the shares sought by Fairgrowth and demanded
that Reliance tell him where they now were even if you [Reliance] have to place 30
people on
the job for 24 hours . The Bombay Exchange declared the 1.5 million shares bad
delivery. On 27 November, this puzzle became a second scandal. The Unit Trust of
India announced that it had bought a lot of 2.4 million Reliance shares in December
1991 and sent them for transfer to RCS. They had discovered in early 1995, after
queries by tax inspectors, that the share certificates sent back by RCS in their name
covered shares with different distinctive numbers. Out of them, they now found that
870 000 came from the batch of 1.5 million sold to Fairgrowth and declared frozen
by the court.
Reliance quickly explained that certain investors had delivered the original lot of
shares to the Unit Trust of India, and then had taken them back and replaced them
with different shares. As the sellers were the same, and the shares equal in all
respects, RCS had processed the transfer and given UTI the second batch of shares.
It was a highly unsatisfactory explanation. UTI had not been consulted, and was left
with 870 000 shares- perhaps more-on which Fairgrowth was asserting a lien. Had
RCS been as casual about ownership in other cases? Who were these operators who
could withdraw shares from the registry after selling them?
The market was reeling under the shocks to its confidence. On the same day,
Reliance had applied to the National Stock Exchange (NSE) to list its shares, along
with those of three quoted subsidiaries. The NSE was a brand-new, fully
computerised exchange set up by the Ministry of Finance in the hope it would be
both a warning and an example to the old city exchanges, whose broker-members
had fought hard against reforms aimed at giving investors more protection. The NSE
was only too pleased that the biggest chip of A in the old exchanges wanted to be

put on its screens. On 29 November, it put the Reliance group up for trading. That
afternoon, Reliance delivered its bombshell letter seeking delisting from the Bombay
Exchange.
Once the Bombay Exchange made it clear it would refuse permission to delist, on the
grounds that Reliance was hardly a defunct or bankrupted company with no
remaining activity in its shares, the ball was in the court of the government, which
could overrule the Exchange. After initially welcoming Reliance’s interest in its new
baby, the NSE, the Ministry of Finance had woken up to the implications of Exchange
president Kamal Kabra’s fugitive from justice’s
remark. On 1 December, the
Securities and Exchange Board’s chairman D. R. Mehta was called in by the Finance
Secretary, Montek Singh Ahluwalia, and asked to seek a compromise.
Over the following days, delegations of venerable stockmarket leaders including
retired Bombay Exchange presidents called on the warring parties, pouring wise
words on the aggravated feelings of the Ambanis on one hand and the Exchange’s
young bloods on the other. A drumbeat of press commentary accompanied the
standoff.
The company is not owned by the Ambanis alone,’ declared the Economic Times. ‘if
the ego of the Ambanis really got so battered, perhaps the solution is to ask Ms Vasa
to give it some therapy.’
Dhirubhai’s own newspaper, the Observer of Business and Politics, rallied the
defence: ‘While much of Indian business has grown on family wealth, Reliance
climbed to the top of the pyramid because of its unique chemistry with the ordinary
investor but became a soft target for a gaggle of bear players ... Reliance therefore
is entirely justified in seeking delisting from a den of bears. A huge advertising
campaign, reminiscent of the 1986 series, declared: ‘The world can wait. Our
shareholders can’. Behind the self-righteous claims, both sides were looking for a
way for Reliance to back off. It was found in a letter from the Exchange on 4
December, rejecting the request to delist and asking Reliance to withdraw it. The
company did so, claiming it had made its point. In a letter on 5 December, it said the
decision to seek deleting from the Exchange had been painful but the company had
been overwhelmed by the spontaneous out-pouring of support from thousands of
investors. The substantive issues raised by Reliance on capital market reform and
the charges it had raised had been well recognised. The letter added:
Keeping alive the hope that stock exchanges and other regulatory authorities in the
country will accept our comments in a constructive perspective, and will sincerely
endeavour to implement over a period of time the broader issues in investor
protection brought to the fore by us, our board of directors has met and decided to
accede to your request that this matter not be pursued, even though we are advised
there exist in law sufficient grounds to do so.
It was a climb down. Reliance was soon back on the defensive. The Unit Trust angle
to the Fair growth affair had opened up a whole new avenue of investigation for both
regulators and the press. The Unit Trust said it had learnt that the sellers of the 2.4
million shares had been Reliance group companies, and press inquiries found that
some of the switched shares were still with small investment companies run by the
Reliance company secretary, Vinod Ambani, with Amitabh Jhunjhunwala, the chief
executive of Reliance Capital, also involved.

The switched shares had now been replaced by a third lot sent over to the Unit Trust
by the Reliance registry, RCS. Why? Was it an attempt to get the scam-tainted
shares out of circulation? Could they be duplicates also? Could the 1.5 million shares
sold to Fair-growth be the same lot of 1.5 million that, according to the reports on
the 1992 scam, were bought and sold in a Rs 600 million repo deal involving
Citibank, ANZ Grindlays and the brokers Hiten Daial and Harshad Mehta in mid-April
1992?
Then there was the mysterious Raju Vasa case. The original buyer of her shares,
Opera Investments, turned out to be another Reliance front company. Its broker, V
K. Jain, was a brother of Reliance Capital’s Anand Jain and had been active in the
Larsen & Turbo proxy battle. What was behind this strange affair in which all parties
to the transactions seemed to be linked? The controversy was taken up in
parliament, where all the politicians were readying for the national elections that had
to be held by rnid-1996. As was the case in the last days of the Rajiv Gandhi
government, corruption charges were piling up around Narasimha Rao’s
administration. Already several ministers had resigned over a large-scale havala
(Illegal foreign exchange) scandal. The award of telephone licences to a small
company from the home state of the communications minister was a talking point.
By mid-December, the Reliance share-switching and duplicate share cases were also
preoccupying MPs. Passage of government legislation stopped for ten days.
In a letter to Prime Minister Narasimha Rao on 14 December 1995, a group of 27
MPs said that Reliance had not explained itself, so only deductions could be made:
One reason could be that Reliance investment companies have, as a very
unfortunate market practice, been issuing duplicate shares to he used as collateral
for finance. It is a foolproof system and won’s come apart even if the duplicate
shares are traded in the market. This is because the registrar which will do the
transfer is a Reliance company. It will merely do a switch with another lot of genuine
shares.
Mukesh Ambani had been in New Delhi meeting MPs and assuring them that shareswitching was common practice. He explained that liquidity and tax minimisation
were the reasons behind the switch. Reliance had two groups of satellite companies.
One group was investment companies with large lots of shares who never sold. If
they did sell, the capital gains tax would be huge. But they lent them to share
trading companies in the second group who used them for initial liquidity in deals.
Later the trading firms would replace them with newly acquired shares on which the
capital gains would be slight.
The Ministry of Finance had asked the Unit Trust of India to check its experiences
with 20 other big companies. It had found the share-switching practice not to be
common at all. The Bharatiya Janata Party finance spokesman Jaswant Singh also
produced two examples of Reliance shares, sold in 1989 by the Syndicate Bank,
where shares of the same distinctive numbers appeared in two certificates. Mukesh’s
explanation was not wholly convincing.
On 20 December, the finance minister, Manmohan Singh, ordered a joint inquiry by
the Securities and Exchange Board and the Department of Company Affairs, which
had overlapping jurisdiction in applying company law. Singh asked all financial
institutions to verify that their share portfolios did not contain switched or fake
shares. The Income Tax Department would also continue inquiries it had started in

1992 into the tax evasion aspects of the scam. The Securities Board had already
started inquiries on its own initiative, and gave an interim report in mid-January
1996.
According to this report the seven custodians of shares for India’s investment
institutions held between them 138.9 million Reliance shares, about 30 per cent of
the company’s paid-up capital. Out of these, 6.73 million had been switched-that is,
the share certificates received back from RCS after transfers bore different distinctive
numbers or transferor’s names from those lodged. RCS itself found some more
shares held directly, taking the total of switched shares to 7.03 million (4.7 million
with the Unit Trust). Except for a very few shares, all the switches had taken place
between March and October 1992. None were detected by the custodians. Those of
the original shares not transferred remained with the original owners, who were
trade associates of Reliance.
The Securities Board investigators had found RCS less than helpful. According to
their letter sent to the RCS chief executive in March 1996, the registry had given two
differing versions of the Unit Trust share switch to the Board in December and thus
neither could be trusted. RCS had reported corruption of its database and a loss of
audit trail because of a conversion of computer systems ... but the fact that
corruption of data is predominant in select folios of the parties involved in switching
makes the explanation of RCS untenable,’ the Securities Board letter said. The
records were a shambles, in effect, and much of them in the switching cases seemed
to have been faked.
But perhaps the best insight into the Reliance back-shop operations came from
reports filed by the Deputy Commissioner of Income Tax in Bombay, G. S. Singh,
whose officials had been looking at the Reliance front companies since June 1994.
According to a report entitled ‘piercing the Corporate Veil’s , the taxmen had found
206 companies run by the Reliance company secretary Vinod Ambani from a Reliance
office in Nariman Point. During 1991-92, Reliance had paid Rs 313 million to these
companies in various fees, enabling Reliance to reduce its tax liability and the
companies to settle their own losses or to make investments in Reliance shares and
debentures in order to maintain management control.
In the tax assessment year 1993-94 (covering activity in the previous year, 199293), certain group companies had received nearly Rs 600 million from Reliance via
Reliance Capital to buy rights attached to partially paid shares the affiliates owned in
the twins, Reliance Polypropylene and Reliance Polyethylene. Each of the original
shares in the twins had rights to no fewer than 40 new shares attached. The group
companies had acquired the shares in the twins mostly in May 1992, at Rs 17.50 a
share, soon after they were renamed on 19 May 1992. The rights could be exercised
in the public issue at the end of 1992. The cut-off date for owning the rights,
announced in the issue documents later in the year, was 6 June. It was a nicely
timed investment by the 37 group companies. Reliance had later paid the companies
Rs 39 for each right-that is, for a Rs 17.50 investment, the companies had received
Rs 1540. An investment of Rs 644.6 million in the twinstly paid shares shows up in
the Reliance accounts on 31 March 1993, accounting for the rights purchase plus
fees to Reliance Capital. Those looking for insider trading before the twins’ merger
two years later had overlooked this earlier example of funds being taken out of
Reliance.

The tax officers persevered, and focused on one example of the 206 front
companies, Avshesh Mercantile Ltd, to give a detailed picture of sharemarket
activities. Their account supported the explanation given by Mukesh Ambani to the
MPs. The report by Deputy Commissioner Singh, dated 29 March 1996, traced
another sale of Reliance shares to the Unit Trust, this time a lot of 3 million sold on
22 May 1992-four days after the. first GDR issue closed-by 13 group companies
known as Group A. On that day, none of the 13 firms owned any Reliance shares.
The shares delivered to the Unit Trust had been borrowed from 14 other group
companies, known as Group B. When the Trust sent them for transfer, the shares
were switched for shares bought from Dhyan Investment & Trading, then a wholly
owned subsidiary of Reliance Capital, and the originals returned to Group B.
Mahendra Doshi, the broker in the sale, said he had dealt with Anand Jain and Manoj
Modi of Reliance Capital for the delivery of the shares. He knew nothing about the
sellers; Jain had told him the company names to which contract notes and bills were
to be issued. The shares had been handed over by another Reliance Capital
executive, Tushar Sarda, and the proceeds handed to him. Six months earlier, Doshi
had carried out a similar sale to the Unit Trust of 2.2 million shares. Jain had initially
denied knowledge of the 13 Group A companies, then admitted to being involved in
the sale.
According to correspondence produced by RCS, the 14 Group B companies had
requested the registry to inform them of any transfers lodged by third parties for
their shares, because the shares were placed from time to time as collateral, on
condition
that they not be transferred in the name of the creditor unless approved by them.
The tax inspectors said this was not supported by evidence, and the letters were
found to be fabricated. The sales were real, and the income from them should be
taxed. The swapping of shares was a systematic evasion of capital gains tax, by
substituting the newly bought shares of Group A for the older and more cheaply
acquired holdings of Group B. Not a single case of switching for sellers outside the
group was found.
The tax-reduction explanation made some sense, but did not ft with everything that
Reliance was saying. It had pointed out that the switching had been confined to the
period March-October 1992, yet Mukesh Ambani had said it was a common practice.
If it had made good tax sense in 1992, and had been legal, why not continue it?
Some business analysts tended to believe that the share- switching occurred as a
part of the cover-up of Dhirubhai’s close involvement with brokers in the 1992 scam.
They speculated that shares handled by brokers such as Harshad Mehta and Hiten
Dalal were hurriedly dumped on friendly institutions such as the Unit Trust and the
Canara Bank funds as the scam broke in April 1992.
Others veered to the explanation put up by the 27 May in parliament, alleging
systematic pledging of duplicates of shares owned by the Ambanis and other
management investors, which would be switched if they were ever sent for
ownership transfer in the company-controlled registry and would never be in
marketable lots. The central bank inquiry into the 1986 loan mela tends to contradict
this latter allegation: it found that all the Reliance shares pledged by the group
companies had been transferred to the names of the lending banks. But that was
1986. And if the banks had attempted to transfer the shares to a third party, the
Reliance registry could still have intervened.

At least one former fund manager, admittedly no friend of Reliance, recalls a case in
1989 where a bank sold him shares pledged by Reliance. The company raised hell
with the bank to get the shares taken back and exchanged for others.
As the bedraggled Narasimha Rao government neared the end of its term, some
other controversies came back to haunt Dhirubhai and Reliance. In January 1996,
the government fled an appeal in the Supreme Court against the ruling by the
Customs, Excise and Gold Appellate Tribunal that had upheld the controversial 1989
decision of the former Bombay Collector of Customs, K. Viswanathan, to drop the
charges of evading duty on the smuggled polyester yarn plant at Patalganga (though
the tribunal had said that duty should be reassessed on the four extra spinning lines
that had appeared out of parts’. The petitions filed by Reliance in 1990 had delayed
the tribunal hearing by three years.
Later that month, a team of CBI officials few to Bombay and suddenly revived the
case against Dhirubhai and others of backdating the letters of credit for the PTA
imports in May 1985. Dhirubhai was ordered to appear in a magistrates court, but
his lawyers successfully argued through the rest of the year against the need for a
personal appearance. The case was a warning shot by Narasimha Rao. Reliance had
been falling behind in the campaign funding it had promised the Congress Party,
apparently seeing no point in pouring further money into a lost cause. The company
was also suspected within Congress of stirring up the telephone licence scandal in
order to distract attention from its own problems.
In 1995, a young police officer with the Central Bureau of Investigation in Bombay, Y
P Singh, had begun digging into the private placement with the Unit Trust of India
and the two government insurance giants in 1994. His request to see the papers on
the placement caused panic at the Trust. The highly unfavourable placement had
been forced on the institutions by senior figures in the Narasimha Rao government,
he concluded. After careful study of the laws governing institutional investments, he
drew up a report listing some 20 illegalities, including conspiracy and fraud, and
recommending charges against a string of senior officials.
After picking up signs of discontent among Oil & Natural Gas Commission engineers
during a visit to a Bombay High oil platform, Singh also began looking into the award
of the Arabian Sea oil and gas fields to the Reliance-Enron-ONGC consortium in
1994.
The bidding had been extremely bitter, with rival groups accusing Reliance of inside
knowledge of tender evaluation criteria that were kept unclear for others. Singh
found that the new owners had come into the fields with little compensation to ONGC
for its past costs of exploration and preliminary development. The new operators had
also been given a highly unusual bonus on the oil price guaranteed by the
government.
Singh asked his superiors at the CBI for permission to start a preliminary inquiry.
Instead, in March 1996, he was abruptly transferred back to the Maharashtra State
Police, after being accused of mishandling another case. Singh lodged an appeal with
an administrative tribunal. However, two other authorities-the Planning Commission
member G. V Ramakrishna (a former Petroleum Secretary and Securities Board
chairman) and the Comptroller & Auditor-General’s office-took up similar criticism of
the oilfield contracts. In October 1996, the private secretary of Satish Sharma, the

petroleum minister at the time the con- tracts were awarded, told the CBI that
Reliance had paid Sharma Rs 40 million between June 1993 and February 1994 (and
that two other companies involved in bidding had also made payments.) Reliance
denied the allegations. If Dhirubhai had rubbed Narasimha Rao the wrong way, his
relationships with the opposition parties were also ambivalent. Sections of the Janata
Dal and Left continued to regard him as anathema, yet he had successfully cultivated
many of their leaders at state level. In the Hindu nationalist camp, he paid court to
senior BJP leaders such as L. K. Advani and Atal Bihari Vajpayee. But a section of the
party’s MPs such as Jaswant Singh had been Ambani critics for more than a decade,
and his old nemesis S. Gurumurthy of the Indian Express campaigns, had become a
close legal adviser to Advani.
Their hostility was often neutralised in party forums by a claque of Ambani
supporters, such as the BJP secretary-general Pramod Mahajan, who once defended
Dhirubhai as ‘not someone who sleeps with you then refuses to recognise you in the
morning’s . The metaphor cannot have been to the taste of the RSS-trained cadres
of the party.
Within the BJP leadership, Dhirubhai became distrusted for the split he helped
engineer in the party’s Gujarat branch soon after it took power in the March 1995
state elections. Dhirubhai backed a lower-caste BJP leader called Shankersinh
Waghla in disputes with the newly elected chief minister, Keshubhai Patel. In
September 1995, the two openly split, and Dhirubhai few Waghela’s faction of state
MPs to the central Indian resort of Khajuraho, famed for its erotic temple carvings, to
keep them together. Around this time, Vajpayee was appalled to find Dhirubhai on
the telephone, putting forward a solution to the Gujarat crisis: Waghla should be
made deputy chief minister. Highly embarrassed, Vajpayee refused. A year later,
Waghela ousted Patel’s faction and formed a government with Congress backing. It
is not clear whether Dhirubhai had any intention to destabilise the BJP nationally or
just install a cooperative state government to help his industrial plans.
Having gathered damning material on the share-switching cases, and little on the
supposed fear conspiracy against Reliance, the Securities Board and the Department
of Company Affairs shuffled responsibility for prosecution between them, and
eventually the decision fell into the limbo caused by the calling of elections for early
May 1996. The elections produced a three-way hung verdict, with the BJP having
narrowly the largest number of seats. It decided to form a government, knowing it
was unlikely to pick up support. Vajpayee was sworn in as prime minister, with
Jaswant Singh as finance minister and Ram Jethmalani as law minister-a
combination unpromising for Dhirubhai. India’s first BJP government lasted only two
weeks-but long enough for Jaswant Singh to order a show-cause notice to be issued
to Reliance for breaches of the Companies Act. Jethmalani passed up on
endorsement of Singh’s order, saying he had made too many appearances for and
against Reliance, and it passed to the next government to implement.
Dhirubhai had plenty of friends in the 13-party coalition which took over, including
the new prime minister, H. D. Deve Gowda, who few back to Bangalore to resign his
job as Karnataka state chief minister in Dhirubhai’s executive jet. Jaswant Singh’s
decision resulted in 29 charges being laid against Dhirubhai, other executives and his
companies in a Bombay magistrate’s court. One of the charges was a serious one,
mentioning intent to defraud’s .In October, the entire duplicate share and switching
issue was wrapped up by a government decision to allow Reliance to 1compound’the
charges-a process whereby a company simply pays a set fine for technical breaches

and avoids a prosecution in court. Reliance had argued that the offences had been
inadvertent, due to pressure of work on the registry. No loss had been caused to
shareholders, no gain to the company. The magistrate, A. M. Thipsay, agreed that
intent to defraud had not been substantiated.
The total penalty came to Rs 6.396 million, while the registry, RCS, was suspended
from operations for six months from April 1997.The penalty was ‘very light’, judged
the Economic Times…if Reliance says it will clean up its act and actually set
standards for securities transactions by joining the depositary [an independent,
computerised share registry], it is because long-term self interests dictate so. A
group depending heavily on international markets for resources has to be seen to
have some basic corporate hygiene.’ It was ‘tap on the wrist’, agreed the Business
Standard. The issue had ended with a whimper, the paper said. ‘The case called for a
lifting of the corporate veil, and judging whether the entire episode was more than a
result of clerical error. It had been close, a crisis almost ranking with the 1980s
Polyester Mahabharata, but once again’s Dhirubhai had come through.

PANDAVA OR KAURAVA
Reliance emerged from the duplicate share and share-switching crisis without
substantial penalty. The compounding of the various charges reduced the scandal to
a series of admitted technical offences against the Companies Act. The delay in the
six-month suspension of its share registry allowed Reliance to inoculate itself by
placing the major portion of its issued shares with the new independent share
depository opened in Bombay at the end of 1996 and find a new registry for the rest.
The stock thus remained tradable and liquid throughout the suspension, and Reliance
could claim virtue from taking the lead in using this long-overdue facility to protect
investors. But the corporate myth of Reliance Industries had been cracked. Its
reputation with investors in India had been badly damaged. In those international
centers of investment management most familiar with India at that point, notably
London and Hong Kong, fund managers already felt burned by Reliance and the
Ambanis after the Unit Trust of India private placement and the twin companies
merger in 1994. The share-switching and duplicates cases only compounded the
deep mistrust. The switching case had exposed- as somewhat hollow the muchprofessed devotion to the huge numbers of small investors. By the company’s own
defence, its share registry was inadequately managed. By the more severe of the
accusations made against it in parliament, the registry was the heart of a cynical
manipulation depriving investors of secure title to their shares and the ability to
trade them freely, though this was never proved.
The performance of Reliance shares in the market was augmented by a sustained
pump-pricing effort, using the company’s own funds or money raised from banks for
other declared purchases. Reliance’s position as India’s largest private-sector
company was challengeable because of the opacity in its accounts on the amount of
intergroup transactions included in sales and the possible artificiality of profits in
some bad years. The emphasis on absolute numbers of sales, assets, profits and so
on distracted attention from the ratios that measure the relative profitability or
efficiency of a company, such as return on capital. Transactions with the more than
200 trading and investment companies controlled or owned by the family
management might point to investment profits being taken from Reliance to these
companies. In other words, the Ambanis at least sometimes treated a company in
which they have had normally a 26 per cent shareholding as their personal property.
The huge private placement to the government financial institutions and the
instances of funding from banks against pledged management shares undercuts the
claim that Dhirubhai successfully by-passed the banks and raised capital chiefly from
the public. The long delays in completing projects after the early success at
Patalganga in 1984 and the insatiable appetite for funds have raised questions about
the company’s efficiency in managing capital-even whether fundraising and
deployment had not become a more important activity for Reliance than making
petrochemicals and textiles. From late 1994 the Indian share markets had gone into
a malaise. There were objective external factors: a rise in interest rates attracting
money into deposits, a sense that the economic reforms had stalled political
uncertainties, the Mexican crisis and its impact on other emerging markets, the Bull
Run on Wall Street. But a feeling that Indian markets had not got their house in
order, and perhaps a sense of exploitation by the country’s most traded company,
had something to do with it as well.
Markets and sentiments turn around, but the widespread thinking in Bombay
financial circles by the end of the 1995-96 crisis was that Dhirubhai Ambani and

Reliance could no longer look either to Indian investors for the cheap equity capital
that had financed their early growth or to the foreign portfolio funds that were so
enthusiastic about them in 1992-93.
This is implicit in the company’s resort to debt-raising in a completely new market
from the middle of 1996. In five issues of pure-debt securities in New York between
June 1996 and January 1997, Reliance raised US$614 million from international
investors, with terms ranging up to 100 years-making it the first Asian company and
one, of a handful worldwide to raise debt of such long maturity. A notable trend was
a resort to the American institutions, the pension funds and insurance companies,
helped by an investment-grade rating from two agencies. It would not be too cynical
to say that the insularity of American investors and their relative ignorance of news
from India helped greatly. But the announced plan to list these bonds on American
stock exchanges has imposed new disciplines on Reliance, notably a requirement to
shift its accounts to the ‘generally accepted accounting principles of the United
States and Britain, rather than those followed up to then by Chaturvedi & Shah,
Bombay. Its representatives abroad now insist that Reliance is a ‘different company’s
from the Reliance of the 1970s and 1980s.
Early in 1997, in order to access even cheaper funds, the company was working out
a way to lift its credit rating above the sovereign-risk rating of India itself. Most
probably this would be achieved by means of a mechanism placing part of the funds
back into high-rated investments outside India. This might seem highly artificial for a
company so rooted in its own country, but it would be yet another source of pride
within Reliance. Among the critics it would only confirm fears that Reliance was more
powerful than the Indian state.
Dhirubhai Ambani built his company through outstanding abilities and drive on many
fronts: as an innovative financier, an inspiring manager of talent, an astute marketer
of his products, and as a forward-looking industrialist. The energy and daring that
showed itself in his early pranks, practical jokes and trading experiments developed
into a boldness and willingness to live with risk that few if any other Indian corporate
Chiefs would dare to emulate. His extraordinary talent for sustaining relationships,
and sometimes impressing men of standing, won him vital support from both
governments and institutions.
The dark side of his abilities was an eye for human weakness and a willingness to
exploit it. This gained him preferential treatment or at least a blind eye from the
whole gamut of Indian institutions at various times. Over decades in India, some of
the world’s best minds had applied themselves to building a system of government
controls on capital-ism. Dhirubhai Ambani made a complete mockery of it-admittedly
at a stage when the system was decaying and corrupted already. The Ministry of
Finance and its enforcement agencies, the Reserve Bank of India, the Central Bureau
of Investigation, the Securities and Exchange Board of India and the Company Law
Board proved timid and sometimes complicit in their handling of questionable
episodes concerning Reliance. The public financial institutions that held large blocks
of shares in Reliance and had seats on its board were passive and acquiescent
spectators, rather than responsible trustees for public savings.
Dhirubhai Ambani cautioned about the jealousy inherent in the Indian business
milieu. Reliance frequently, routinely, put any criticism or opposition to its actions
down to motives of envy or a desire to pull down anyone achieving success.
Throughout every crisis caused by exposure of alleged manipulations, its publicity

took on a self-pitying ‘Why is everyone always picking on us?' tone. But the record
tends to show that it was Dhirubhai and Reliance who often made the first move to
put a spoke in a rival’s wheels, whether it was Kapal Mehra, Nusli Wadia or, latterly,
the Ruias of the Essar group. Coincidentally with disputes with Reliance, various
rivals were hit with government inspections, tax problems, unfavourable press
reports, physical attacks and, in Wadia’s case, a damaging forgery, a deportation
order and perhaps a conspiracy to murder him.
Reliance sought larger capacity clearances, lower duties on its imported chemical inputs, and higher duties on its finished products for itself-not for A players. It has
been relentless in its use of monopoly or dominant market share. The achievement
of A these efforts has been the creation of an integrated industrial enterprise from
the oilfield to finished textiles and plastics, certainly the largest in India’s private
sector and in some products among the world’s biggest. Dhirubhai has managed to
stay in control of this growing, enterprise through his ability to master advanced
technology and to come up with the funds to pay for it. By the end of 1996, the gas
cracker at Hazira and its associated product lines were coming on stream. If the
company continues to augment its capacities as planned, it should stay profitable as
the external protection of the Indian economy is lowered. There are several areas of
risk. A combination of adverse business conditions, such as a simultaneous fall in
petrochemical prices and drastic devaluation of the rupee, would make the foreign
debt more expensive to service, and put the company in a squeeze if the actual
physical investment it is intended to finance is delayed. No one outside the
company’s highest management can be sure exactly what further funding the
company needs in order to sustain its expansion as well as its treasury operations-one highly respected Bombay financier estimates that it needs US$1 billion a year in
new funding. If so, an unfavourable turn in investor or lender perceptions about
Reliance, India or emerging markets in general could create a squeeze.
Another wild card is contained in the political hostility that Dhirubhai and Reliance
have built up within India. Every party has its Ambani men’s but this is no guarantee
that no government will dare to take on Reliance or make an example of it. Most
notably and ironically, Reliance is regarded with deep distrust at the senior levels of
the Bharatiya Janata Party. The Hindu nationalist movement that may well he the
coming force in Indian politics-ironically because the BJP has positioned itself as the
champion of the swadeshi or domestic capitalist (though like many clerical parties it
is against monopolies). After 1996, Reliance may well be cleaning up its accounting
practices and its share registry, but several investigations, tax demands and criminal
prosecutions from the 1980s still remain open. Despite the settlement of the
Company Law offences in the share-switching and duplicates cases, for example, it
would still be possible for a government to launch prosecutions under the Indian
Penal Code.
The danger could be precipitated by another display of hubris like remark to
Ramnath Goenka, or if his sons, when they take over the running of Reliance
completely, overreach themselves. A split between the two sons, or between them
and the professional management or with the big institutional investors now appears
unlikely, but could emerge once Dhirubhai’s influence is gone.
The wider lessons about India would seem to include a caution to foreign investors
about the effectiveness of India’s ‘British-style institutions and practices’. Investors
might like to ponder how much help and protection they would get if put in the
position of a Nusli Wadia against a well-connected Indian rival like Reliance. On the

other hand, the ANZ Grindlays bank did get its disputed Rs 5.06 billion back from the
National Housing Bank through arbitration in India. The controversy of the mid1990s provided an impetus to improve financial market regulations and functioning.
But, at the same time, Dhirubhai is reckoned to have inspired hundreds of clones
who have set out to win at all costs and by all means.
Some of India’s left wing politicians and academics see a case for a return to tight
controls, even tighter than those applied in the 1970s, and more sustained policing
of them. The Reliance story would suggest that those controls were unenforceable in
the absence of an entire administration of Plato’s guardians of the republic. It may
seem a trite re-endorsement of the prevailing economic philosophy, but the fairest
and most efficient environment would be created by dropping barriers to the
movement of capital, industrial inputs and products in and out of India.
It is possible to draw several conclusions about India from the Reliance story There is
the flowering of individual endeavour and entrepreneurship from a traditional,
isolated backwater like Junagadh; the accumulated ethic of centuries of business and
banking among the Bania castes being transferred into modern corporations; the
amazing numeracy of Indians from the poorest street traders to the high financiers;
the way in which the age-old trading links to the Indian Ocean rim have been
extended into Europe and North America by the past 20 years of migration.
Indians love to tell the joke against themselves about the exporter of live frogs to
‘The kitchens of France. He didn’t need to put a lid on the crates, because as soon as
one Indian frog tried to escape, the others pulled him down. Perhaps Ambani’s
corporate war does show a tendency in the culture to blow the whistle when
someone makes a run for wealth or success. Jealousy can be strong in a crowded
country with many qualified contenders for every opportunity, and where growth of
those opportunities is slow or static. But the opposition that Dhirubhai stirred up was
not always or even mostly envy, but often vigorous self-defence or a determination
to extract the truth. The country may never be an India Inc., but it has a certain
self-correcting strength in its disputatiousness. The plurality of interests that its
system acknowledges may pre-vent it attaining the high economic growth rates of
more homogeneous and disciplined nations, but they provide safety valves and
mechanisms for gradual adjustment which prevent violent revolution or cataclysmic
misjudgments by unchallenged rulers. Many of the popular books on the Asian
economic ‘miracle’ or the proponents 'Confucianism’ or Asian value’ seem to expect
that India will progress only when it adopts the more or less enforced consensus
patterns of East Asia. Some of the leading proponents of this idea in places like
Singapore and Malaysia are themselves of Indian extraction. Others ignore India or
rule it out of the Asian mainstream. It is tempting to draw a line down the
Chittagong Hill Tracts, a rough racial divide between East and South Asia, and build a
theory of Two Asias': one whose culture predisposes it to high economic success the
other condemned to a slower cycle. But this is an error of extrapolation from a
narrow period, ignoring historical factors including the different experiences of
Western imperialism, the Pacific War, the American interventions in the countries of
East Asia after the war, and so on. It fails to address the question of creativity in the
underlying culture, and its significance for leadership in an information-based
economy.
The disputes surrounding the rise of Dhirubhai Ambani tell us something else about
India: how it agonises over the morality of change, of success and failure. The
snappy analogy made by the tabloid newspaper Blitz in 1985, comparing the

erupting polyester industry battle to the epic Mahabharata, actually captured some of
this dilemma. On paper, the Mahabharata runs to millions of words and has a dozen
volumes, but the central story is that of the King Yudisthira, who is torn between his
innate sense of rightness and his earthly duty as a ruler in which cheating, lying,
intrigue and espionage are expected under the dharma (law and duty) of that role.
Against his conscience and inclination to withdraw from strife, Yudisthira allows his
Pandava clan to enter a war of vengeance against the evil Kauravas, culminating in
the bloodiest fight of A literature at Kurukshetra when millions are slaughtered on
both sides-and a deception by Yudisthira turns the tide of battle.
Blitz hesitated to assign the roles of Pandava and Kaurava between Dhirubhai and his
textile rivals in the ‘Polyester War’. This might have been just expedient and
cautious. Many of the protagonists who stood up to Reliance, by contrast, had little
doubt in their minds that it was a clear struggle between probity and deceit. But
among the many millions of investors and newspaper readers who followed ascent,
there were probably very many who suspended judgment (and of course, many who
were simply fascinated by the action, like the audiences of the Mahabharata who
chat and smoke during the long philosophical dialogues). Was not a certain amount
of deception just part and parcel of the dharma of a businessman? And just as
Yudisthira’s warrior brother Muna shrank from the prospect of killing so many good
men in the Kaurava ranks, there was little appetite for seeing Reliance fall and the
savings of so many investors put at risk.
There perhaps the analogy ends. Dhirubhai and Reliance have not faced a corporate
Kurukshetra, though at times it must have seemed as though they were heading for
an apocalyptic showdown. The questions raised during their history are not unique to
India. What are the limits of ethical behaviour in a world full of surprise manoeuvres,
innovation, inside connections and corruption?
And unlike the relentless order of the Mahabharata and other Hindu scriptures,
modern capitalism does allow a process of redemption in the life of a corporation.
Opium-traders, slave-owners, market cornerers, share raiders and all kinds of
robber- barons have been able to transform themselves into establishment pillars by
hanging on and consolidating during the system’s periodic crashes. It will be
Dhirubhai Ambani’s greatest achievement if his enterprise can move decisively
beyond the shadows that fell on many of its middle years

REMINISCENCES OF
THE NEHRU AGE
M. O. Mathai

Reproduced by

Sani H. Panhwar (2021)

To Priya, two, and Kavitha, five—
two lively neighbourhood children
who played with me, often
dodging their parents,
during the period of
writing this book

Contents
Preface

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1 Nehru and I

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2 Attack on me by the Communists

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3 Personal Embarrassment of a Rebel

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4 Obscurantists to the Fore ..

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5 Mahatma Gandhi ..

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6 Lord Mountbatten and "Freedom at Midnight" ..

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7 Earl Mountbatten of Burma

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8 Churchill, Nehru and India

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9 Nehru's Meeting with Bernard Shaw

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10 C. Rajagopalachari

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11 The Position of the President of India

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12 Rajendra Prasad and Radhakrishnan

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13 The Prime Minister and His Secretariat

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14 The Prime Minister's House

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15 Use of Air Force Aircraft by the PM

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16 Rafi Ahmed Kidwai

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17 Feroze Gandhi

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18 The National Herald and Allied Papers

19 Nehru and the Press

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20 Nehru's Sensitivity to his Surroundings

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21 Nehru's Attitude to Money

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22 G. D. Birla

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23 Nehru and Alcoholic Drinks

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24 Sarojini Naidu

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25 Rajkumari Amrit Kaur ..

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26 Vijaya Lakshmi Pandit ..

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27 Some Books

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28 Maulana Abul Kalam Azad

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29 She

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30 V.K. Krishna Menon—I

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31 V.K. Krishna Menon— II

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32 Krishna Menon's Vote at the UN on Hungary

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33 V.K. Krishna Menon—III

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34 V.K. Krishna Menon—IV

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35 Was Nehru Arrogant?

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36 Nehru and the Services

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37 Nehru and Women

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38 Nehru and the Socialists

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39 More on Nehru

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40 Govind Ballabh Pant

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41 T.T. Krishnamachari

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42 Kamaraj

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43 Lal Bahadur

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44 Two Weather-Beaten Ministers
45 Vallabhbhai Patel

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46 Indira

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47 Morarji Desai

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48 Epilogue

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49 Postscript

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APPENDICES

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About the Book and the Author
This book was banned by the Indian Government soon after its launch in 1978, chapter
29 was withdrawn but has been added in this reproduction.
Mr. Mathai, one of the most powerful Indian officials during the Nehru era resigned in
1959 following Communist allegations of misuse of power. Mr. Mathai wrote two books
that caused controversy, "Reminiscences of the Nehru Age" and "My Days With Nehru"
(1979). In his books he mentioned the attraction of Nehru for several women and wrote
critically about Nehru's daughter, Prime Minister Indira Gandhi.
Mr. Mathai worked with the United States Army in India before becoming an assistant
to Nehru in 1946. Nehru was India's Prime Minister from independence in 1947 until
his death in 1964.
For over a decade that he was at the very hub of the decision-making process, Mathai
was the only one to know everything about Nehru, most especially the first Prime
Minister's private thoughts about Politics, Congress leaders, Bureaucrats, Money,
Women, Sex, and Alcohol, along with much else that attracted his attention off and on.
The author reveals all, with candor and sincerity, and says, "Before I started writing this
book I suspended from my mind: all personal loyalties of a conventional nature; only my
obligation to history remained."
So we have information, about Nehru's style, Krishna Menon's personal habits, Vijaya
Lakshmi Pandit's extravagance, Feroze Gandhi's ambitions, and Mountbatten's
weakness for titles and honors. In the process, new light is thrown on Shastri, Indira
Gandhi, Patel, Kidwai, TTK, Maulana Azad, Rajaji, Rajendra Prasad, Radhakrishrtan,
Churchill, Shaw, and Lady Mountbatten.
This work is a major contribution to modern Indian history as it gives an insider's view
of how the powerful often tried to manipulate Nehru for purposes that were not always
conducive to nation-building.
While he worked for the Prime Minister, the author was known for his determination to
serve Nehru alone, just as he was also famous for his unquestioned personal integrity
and honesty in dealing with political and financial matters.

Preface
This book is not history or biography, but chatty stuff containing my reminiscences. No
doubt it contains historical and biographical data pertaining to a significant period of
India's history.
When a number of friends urged me to write my reminiscences, I said "Either I shall
write without inhibition or not at all." In writing this book I have been largely guided by
the philosophy contained in the Introduction to Vol. V (1902) of his monumental
thirteen-volume work, Napoleon et sa Famine, by Frederic Masson. He states:
"It is time to cease at last making this senseless distinction between the public man,
whom history may claim and the private person in whom she has no right. There is
only the human being; a person's character is indivisible like his nature. As soon as a
man has played a historic part, he belongs to history. History lays her hand upon him
wherever she happens to come across him, for there is no fact in his existence, however
petty, no insignificant utterance of his sentiments, no microscopic detail of his personal
habits which may not serve to make, him better known. I am sorry for him if he has any
vices, or abnormal inclination, or ugly sides to his nature, for history will tell; and also if
he squints or is crippled, she will tell. She will collect his words, even those murmured
in love .... She will question his mistresses as well as his physician, his valet and his
confessor. If she is lucky enough to get hold of his cash-hook, she will peruse it carefully
and relate how his services were paid, how he enriched or ruined himself, what fortune
he left behind him. She will lift his winding sheet, to see of what illness he died and
what was his last emotion when confronted with eternity. From the day he attempted to
play a part in history he delivered himself up to her.
"This is how history shall be, no longer either political or anecdotal, but human; no
longer a chronological arrangement of dates and words, of names and facts, but
something which will remind you of life itself; which gives off a smell of flesh and bone,
the sounds of love and cries of pain, in which the passion's play their part and from
which may at last emerge the lineaments of men whom we can meet as brothers.
"What! Shall poetry be allowed to appropriate the right to express all the passions of
humanity, drama to show them on the stage, fiction to reproduce them from the
imagination, and shall history, condemned to wear forever the harness of a false
modesty and an assumed dignity, strangled in the swaddling clothes in which the
traditions of a monarchical historiography have wrapped her up be obliged, if she will
not be regarded as frivolous and incur the strictures of the sticklers for deportment and
the Philamintes, to keep within polite generalities and to speak about human beings as
she would about heavenly bodies, shall history, which records mankind, only be
allowed by dint of dexterous circumlocutions, and of kindly suppressions, to suggest, in
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noble phrases, that this same mankind has known passion, love and sin? Political
actions which had none but political motives—they do occur; but how rarely!"
I have also been guided by the exceptionally frank three-volume autobiography of
Bertrand Russell.
Before I started writing this book, I suspended from my mind all personal loyalties of a
conventional nature; only my obligation to history remained.
I have made no full-scale assessments of the historic persons with whom I came into
close contact. It is for distinguished historians of the future to undertake that task.
If any reader feels aghast at some of the uninhibited disclosures in this book, I would
like to refer him back to what is contained in this Preface.
M. O. MATRAI
Madras

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1. Nehru and I
Soon after Nehru was released from prison in 1945 I wrote to him from Assam, where I
was then, saying that I would like to join him in the service of the nation. His reply did
not reach me because it was intercepted by the CID. I wrote him another letter. He
replied promptly, and this time it reached me. His reply said, that he was soon coming
to Assam and that I might meet him then. He had specified the place, date and
approximate time. I met him. We talked in generalities. He said life with him would be
hard and uncertain. I told him about my only experience in politics which was in
college. There were no Congress movements in Travancore. But during Sir C. P.
Ramaswami Aiyar's oppressive regime I organized a public demonstration by students,
defying prohibitory orders. The police chief of the area came to the college with
instructions to arrest the principal organizer of the demonstration. He interrogated
many students but no one betrayed me. I also told Nehru that after taking my degree
from Madras University I had to work because I did not like to run away from my
obligations to my parents, brothers and sisters. I added that I was a bachelor and had no
intention of marrying, and further that what I was looking for was a purpose in life and
that I was prepared to live dangerously. Before I took leave of him, I said that within a
month I would be leaving Assam for Travancore for a short visit to my parents. He
asked me to visit him in Allahabad for a few days and stay in his house and have some
leisurely talks with him. At our meeting, neither he nor I had any thought of a change of
government in India, even though later it so happened that the change occurred in less
than one year.
In December 1945, at Anand Bhawan, Nehru again talked in generalities. He talked
about the bananas and coconuts and spices and lakes and lagoons of Kerala. I quoted to
him a couplet from Kalidasa in support of the theory that Kalidasa was a Malayan
"Yavani mukha Padtna nam; thathra Kerala yoshitham," He laughed. He said that barring
the grandeur of the Himalayas, Kerala was the most beautiful place in India. I reminded
him that the Vindhyas and the Western Ghats were older than the Himalayas and that
there were one or two towns in Travancore at an altitude of over 5,000 feet. I also told
him that Agasthyakoodam (abode of the sage Agasthya) was in Kerala, and so was
Maruthua Mala (Medicine Hill) which Hanuman brought from the Kumaon in the
Himalays and deposited in the Western Ghats. He did not know about these.
Before I was scheduled to leave Allahabad, Nehru told me, with a measure of sadness,
about his inability to pay me anything and that he hated to spoil my future. I said I was
in no need of money and, in order to satisfy him on this point, I disclosed to him the
extent of my finances. He conceded that it was more than adequate. I told him that my
future should be my own concern and gave him an inkling of my independence by
saying, "in any event I am not available to work for a cause on payment." He scrutinized
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me and said that soon he was going to Malaya and would have liked me to accompany
him on the trip as his secretary, but that I must go to my parents first. He advised me to
be in Allahabad early in February 1946, just before his return from Malaya. On his
Malaya trip he took with him as his secretary his brother-in-law, Gunotham
Purushotham Hutheesing.
I left most of my things at Anand Bhawan and returned to Allahabad after seeing my
parents as arranged. At home I discovered that my father had already divided the
family properties and set apart the lion's share for me. By a registered deed I wrote
away my claims to the family properties in favor of my brothers before I left the place.
My father and mother were opposed to my joining Nehru because they thought I would
be in jail soon. And so did I.
Soon after my arrival in Allahabad early in February 1946, Nehru returned from
Malaya. I had already told him during my previous visit to Allahabad that only after a
week of my being with him would I be in a position to say in what way I could be of
any use. I took less than a week. I discovered that Nehru so far had not had any
adequate secretarial assistance. He even had to file his own papers. Those connected
with his books, royalties and general finances were in a hopeless mess. I told him that
even a superficial assessment of the situation had convinced me that the best way I
could be of help to him was to render him secretarial assistance and added that I had
decided to do this disagreeable work for a year. He was immensely pleased. Although I
did not tell him so, it was my intention to employ one person at my expense before the
end of the year and train him to relieve me of the routine work. Soon Nehru was
relieved of all this needless burden.
One day, in 1946, some Americans who knew me turned up at Anand Bhawan to have
darshan (a meeting, an audience) of Nehru. On seeing me there, they yelled, "Hi Mac" in
Nehru's presence. From then on, to Nehru and the members of his wider family I was
Mac. The Mountbattens also picked it up later.
Soon we were caught up with the British Cabinet Mission in Delhi and Simla, then the
AICC in Bombay, where Nehru took over as Congress President from Maulana Azad,
and then negotiations with Viceroy Lord Wavell on the formation of the interim
government. In between there took place an impulsive visit to Kashmir where we were
arrested at the border. So I had the honor of sharing Nehru's last imprisonment; but it
was for a brief period of about a week.
On 2 September 1946, the day the interim government was formed, Nehru took me with
him to the External Affairs Department. In the evening I told him that I had no desire to
work in government. I refused to go to office the next day; and stayed away from
government till 15 August 1947. Nehru was annoyed with me. But there was plenty to
do at his residence where I organized a compact staff chosen by me as part of his official
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secretariat. Thus I got rid of all my routine work. Most of Nehru's important work was
done at the residence until the formation of the dominion government on 15 August
1947.
Soon after he took office in the interim government, Nehru made an impulsive decision
to visit the tribal areas of the North-West Frontier Province. These tribal areas were
under the External Affairs Department. The North-West Frontier Province at that time
had a Congress government under that brave and magnificent man Khan Sahib. Even
though advice from almost every quarter was against the visit, Nehru showed
perversity and became more determined to go. I accompanied him on this trip even
though I had nothing to do with the government. I have referred to this in the chapter
"Some Books." The results proved clearly that it was an ill-timed, ill-advised, and
politically unwise step. The Muslim League gained vastly in the process.
The two years, from September 1946, proved to be an extremely difficult and dark
period. It was all work and very little sleep. There were innumerable nights when I had
to keep awake without a wink. There were telephone calls throughout the night, mostly
from Muslims under attack by savage mobs of refugees. Once, after midnight, I
received news on the telephone that B. F. H. B. Tyabji's residence was under attack. I
ordered a police jeep and a small police party from the security squad near our house at
17 York Road. Nehru, who was still working upstairs, heard the noise of the jeep and
the policemen and came racing down. He asked me where I was going. I replied that
there was no time to lose. He jumped into the jeep and I almost got crushed between
him and the driver. In the jeep I explained the position to him. When we arrived at
Badruddin Tyabji's place—Badr as he was known to me—we found Dewan Chaman
Lall, who was staying in the next house, making a valiant effort to ward off the mob.
Whatever were Chaman Lall's faults, he was a thoroughly non-communal person. On
our arrival on the scene, the crowd bolted. We left after posting a small squad of
security staff there. Badr, coming from an illustrious family which produced a Congress
President, was shaken but not disheartened. He and Azim Hussain, who came from a
distinguished family in West Punjab, had opted to serve in India. They are ICS men,
now retired. They are as true patriots as Zakir Husain, who narrowly escaped murder.
They and persons like Brigadier Usman, who lost his life defending Kashmir against
Pakistani aggression, and Abdul Hamid, the lowly but brave soldier from UP, who
earned the Param Vir Chakra posthumously in the 1965 war with Pakistan, are heroes
who kept the faith. Only an ungrateful nation will fail to honour them.
In the summer of 1947 I received an anonymous telephone call at Nehru's residence to
say that a Muslim girl was in danger in a small hostel in New Delhi. I took a pistol from
the nearby police tent and got into a car which was driven by an old Muslim driver
Khaliq who, as a young man, was in the service of Pandit Motilal Nehru. Khaliq, with
his goatee, was not the man to be taken out; but no one else was available. In front of
the girl's room sat a relatively, young Sikh with a long sword and a menacing look. He
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looked at Khaliq with hatred in his eyes. He knew English fairly well. I asked him to get
out of the place. He became aggressive and waved his sword at me. I took out my pistol
and told him firmly, "If you don't get out, I will shoot the hell out of you." He fled.
When he was safely away from Khaliq, I entered the hostel room and found a young
girl sitting on her cot and shaking like a leaf. She was so petrified that she could not talk
for a while. She was a Muslim girl from Nagpur and was working in the government.
All her belongings were looted. She had one spare saree in a small box. I called Khaliq in
so that she could see his goatee and feel reassured. I told her, "Don't be afraid, come
with me." I took her in the car to Nehru's residence and put her in Indira's room; Indira
was out of town. After a few days, when she was normal, we sent her under escort by
air to Nagpur. Later I learnt that she returned to Delhi when the situation became
normal and resumed her work in the government.
At about the same time the correspondent of the Free Press Journal—a south Indian
Brahaman with somewhat kinky hair—was doing some voluntary work for me. He
looked through the numerous newspapers and made clippings of important news items
and comments which did not appear in Delhi newspapers which Nehru normally read.
These clippings were put up daily to Nehru. One evening the correspondent went out
for a walk. He was surrounded by a group of refugees with knives. To them he looked
like a Muslim. He protested that he was a Hindu from south India. They refused to
believe him and ordered him to undress. He was petrified and resigned himself to a
violent death because, for some reason unknown to him, he was circumcised while he
was a little boy. Miraculously, a typical south Indian Brahman, looking somewhat like
Ananthasayanam Ayyangar, with a pigtail and the Trishul mark on his forehead,
appeared on the scene shouting, "He is a Brahman, I know him." The crowd melted
away. My journalist friend was taken into the foreign service soon afterwards through
the Special Selection Board. He rose to be an ambassador and is now retired.
During those difficult days it was not always easy to get food-stuffs. Dewan Chaman
Lall occasionally managed to send some eggs and mutton. Once our Goan steward,
Cordiero, told me he could get a lamb and put the meat in the deep freeze. I asked him
to do so. I was then doing the housekeeping as Indira was out of Delhi. Nehru heard
about the lamb and got annoyed with me. He told me if I did it again he would refuse
to eat the stuff. There was no need because I had already made standing arrangements
with the controller of the Governor-General's household.
The saddest experience of my life was visits with Nehru to the undivided Punjab. We
had to wade through the debris of destroyed houses and dead bodies of innocent
people in Multan, Lahore and Amritsar. We witnessed the largest migration in history
involving eighteen million people both ways. Some years later a friend asked me who
were more cruel, Muslims or Sikhs? I replied, "Half a dozen of the one were equal to six
of the other." Perhaps the Sikhs were one up; and the Hindus did not lag very much
behind.
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While we were at 17 York Road, I noticed for a week an excessively fat young girl
coming there every morning and standing silently in front of the house looking very
sad. Unlike others she did not make any attempt to reach Nehru to tell her tale of woe.
One morning, after Nehru left the house, I asked the girl to tell me all about herself. She
was from Mianwali in West Punjab; was a B.A., B.T. Her father was the president of the
district Congress. He sent away his family along with a batch of other people in a
(refugee special) train to Delhi. He said he would not leave until the last non-Muslim, in
his area, who wanted to migrate, left. When he was satisfied that he had done his duty,
he boarded a train for Delhi. At Lahore he was dragged out of the train and brutally
murdered. Tears flowed down her cheeks. I asked her where she was staying. She said,
"Under a tree in the compound of a house near Connaught Circus." I took her by car
and left her under the tree where her grieving mother sat. Before I left, I asked the
young girl to come to 17 York Road early next morning and added that I might have
something to tell her then. That evening I told Nehru the story of the young girl. He
was moved, and said that he knew her father who was a fine person. I told him that I
would like her to be employed in his secretariat and put to work at the residence mostly
to meet and talk to the helpless refugees who came in increasing numbers in the
mornings. He readily agreed. I was not in government then; but I managed, with some
difficulty, to create a job for her. When she came the next morning, I put the proposal
before her and told her that I would see to it that she received a salary higher than that
of a schoolteacher. She gratefully accepted the offer. She was appointed as a reception
officer. That was the rotund Miss Vimala Sindhi who became a familiar figure in Delhi.
At about the same time I happened to see a little boy, almost a child, sitting on the
roadside and weeping. He did not know English and I did not know Hindi. So I took
him to Nehru's residence. With the help of Vimala Sindhi I found out that the boy was
from West Punjab. He had no father. While migrating to Delhi he had become separated
from his mother. I got some clothes made for him and kept him with me in my room for
a month. The kindly owner of 17 York Road, who was a rich man with no children,
requested me to hand over the boy to him and offered to get him educated. He sent the
boy to a residential school in Pilani. Later his mother turned up and was happy to learn
of what happened to her little boy. The owner of 17 York Road also took a kindly
interest in the woman and helped her financially. The little boy was not a bright student
but managed to pass the matriculation examination. There appeared to be no point in
sending him for higher studies. I was then in government. At my instance he was
appointed in the PM's secretariat as a clerk for which post a vacancy existed. That was
Mohan who is still in the PM's secretariat and continues to embarrass me by calling me
father. Both Nehru and I helped him to build a small house on a tiny plot allotted by the
government to him as a refugee. He remains dutiful to his widowed mother.
Early in August 1947 Nehru said that he would like me to help him in his secretariat
also. I told him I hated files and that I did not know what other work I could do in the
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secretariat. He said I could feel my way about and work would come. He added, "From
the 15th of this month it is going to be our own government; most of my work will be
done in the secretariat and if you stay away you won't know what is happening. Apart
from that, I do not want to be surrounded by officials completely." I reluctantly agreed.
At Nehru's instance, Secretary-General Girja Shankar Bajpai at the External Affairs
Department dropped in one evening on his way home and talked to me about my
appointment in government. He said the idea was to designate me as Personal Private
Secretary to the PM and that all papers for the PM would go through me. He added that
I would be free to do such non-official work as the PM wanted me to. I said I did not
want to be integrated into the secretariat; that my position should remain undefined as I
proposed to create my own work in the secretariat eventually. I also laid down a
condition that my appointment should be conterminous with that of the PM. All this
was agreed to. He then said that Nehru had told him that my emoluments should be
fixed only with my consent. He asked me what salary I wanted. I replied that I didn't
need a salary. He said that in government it was not the usual practice to engage people
without emoluments. I then said I would take Rs. 500 per month and added that it
should be an ad hoc salary, not in any grade. He was amused, thought I was a crank, and
reported all this to Nehru, who asked him not to make much variation upwards in the
salary I had suggested. So Bajpai had my ad hoc salary fixed at Rs. 750 per month
without any further reference to me. It so happened that an official, who was
designated as Assistant Private Secretary, was drawing almost double my "salary"; but
it did not bother me because it never entered into my head that a man's usefulness was
to be measured in terms of the salary he drew. I was never asked to undergo a medical
examination. Neither was I asked to sign the oath of secrecy.
When the Finance Minister appealed for economy in non-productive governmental
expenditure, I stopped drawing my salary for a whole year. Soon after that, something
which happened annoyed me. The question arose about my travelling by train. The
administration man in the PM's secretariat told me that I was entitled only to second
class fare. I said I wouldn't travel second class and asked him to get me a third class
ticket. This was reported to the PM. He ascertained that the minimum salary entitling a
person to travel first class was Rs. 1,500 per month and ordered that my salary be fixed
at that figure as an ad hoc one. Simultaneously, at my instance, my official designation
was changed to Special Assistant to the Prime Minister. At that time no one in
government had that designation. I cancelled the trip and have never travelled by train
on government account from that day onwards.
When N. R. Pillai became Cabinet Secretary, the PM asked him to keep in touch with
me, Pillai sent me the personal files containing the efficiency reports of all the members
of the ICS and other former Secretary-of-State services. He wanted me to read them as
the background information would be useful to the PM. It took me over two months to
go through them late at night daily. I was impressed by the objective reporting by
senior Englishmen on their juniors—minas, of course, the political slant.
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Ever since I started work in the PM's secretariat, no file or paper reached the PM except
through me—with rare exceptions, in which case they would come to me from him.
Nothing went out except through me. This meant matching hours of work with Nehru,
and sometimes surpassing him. In the PM's house, generally, I ate alone in my study
while working, sometimes at odd hours. I had come to the conclusion that the best way
to help the PM was to inform his mind. For this I had to study specific issues and
problems and get advice from those who were in a position to advise—people in
government and outside. Except in its broad aspects, I was not particularly interested in
foreign affairs which, in detail, meant international pillow-fighting. In fact, I used to call
Krishna Menon an "international pillow-fighter."
After the death of Vallabhbbai Patel, much to my embarrassment ministers, MPs and
senior officials used to refer to me as "Deputy PM," "Power behind the throne" and the
like. C. D. Deshmukh, In his autobiographical book, chose to refer to me as "the most
powerful acolyte of the PM." Except for a few, I had only contempt for ministers who
were nothing but a bunch of mediocrities for worse.
It is true that no file or paper containing a recommendation, reached the PM without
my comments on a slip or a routine note if I felt that such comment was called for. Such
slips and "routine notes" never formed part of the files. They were removed when
papers came down from the PM.
One morning, during the 1952 monsoon, I received a telegram as I was waiting to go to
the office with the PM in his car. The telegram announced the death of my father who
was eighty-four. I put the telegram in my pocket and, without betraying any emotion,
went to office with the PM and did the day's work. No one knew about it. In 1950, when
I visited my home in Kerala for a couple of hours, I had told my brothers and sisters
that in case anything happened to my parents, they should not expect me to come over
because, with the then rudimentary air services, there was no chance of my reaching
home in time. Four days later, on a Sunday, as I returned from the office with the PM
for lunch, N. K. Seshan handed me another telegram announcing the death of my
mother who was eighty-one. Seshan had opened the telegram and told everyone,
including Indira. Foregoing lunch, I went straight to bed without changing. In the
evening the PM and Indira came down and found me, as usual, in my study, refreshed
and composed, attending to my work. I told them that my father had died four days
previously and that my mother fainted immediately. She regained consciousness only
once for a brief moment. It was raining torrentially then. She murmured, "He must be
feeling cold" and again went into a coma, never to open her eyes again. My parents had
been married for seventy years. They had their quarrels, sufferings, sorrows and joys. I
have never seen a couple so devoted to each other. In fact, they died together. The PM
remained silent. Indira said, "Papu came to your room after lunch and found you fast
asleep." In order to break the gloom in my study, I said, "That shows that I have a clear
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conscience," to which Indira retorted, to the amusement of her father, "It can also mean
that you have none" and gave me a smile. I told her, again to the amusement of the
father, "It is the only witty remark you have ever uttered in your life."
Nehru lost his temper with me only once—for no fault of mine. I was annoyed and I
also lost my temper. For two days I sulked. Then he sent for me and smiled, which was
his way of making up. I told him, "I am sorry; I should have shown more
understanding. Your mind must have been upset about something at that time. I have
seen you losing your temper many a time, but that has been at seeing stupidity or
vulgarity." I then told him the story of a famous Greek philosopher losing his temper
and assaulting the librarian of the Public Library in Athens. The reason was that the
library did not have a copy of a particular book on Socrates. I said I mentally approved
of it. He smiled.
It was Nehru's practice right from September 1946 to work irt his secretariat on Sundays
and holidays. Those were hectic times and he hardly got more than five hours of sleep
at night. The result was that he would doze off at meetings. I wanted him to get some
sleep in the afternoons of Sundays and holidays. It was no use telling him this because
he was too proud of his health. So I chose to appeal to his sense of fairness. I told him
that the PAs and others were married people with children and they would like to take
their wives and children to a cinema or for shopping occasionally. I added, "In fairness
to them you should stop going to the secretariat in the afternoons of Sundays and
holidays. I shall arrange for one or two PAs to be in the house so that you can do your
work there and, in any event, I will be there. Before agreeing to it he said, "Work never
kills anybody." I replied, "Overwork makes a person stale. You cannot afford to be
stale." As I had expected, this led to Nehru taking some rest after lunch on Sundays and
holidays. I authorized all PAs to take a full day off once a week. I had a special
allowance sanctioned for them, and for the PAs on night duty I arranged, in addition,
rent-free quarters near the PM's residence. They all worked very hard without looking
at their watches. Later, the PM got into the habit of having half an hour's nap daily after
lunch.
Nehru, recognized as one of the world's five best English prose writers of his day, was
loath to sign anything drafted by others except strictly protocol communications. The
result was that he had to spend an enormous amount of time in dictating letters and
drafting or dictating statements and speeches. He has signed more communications
drafted by me than by all the others put together. That was because, when the signed
letters and notes came from him, I would detain some that were dictated in his
weariness late at night. These I redrafted for his signature.
Some of Nehru's finest speeches were either extempore or written in his own hand
when alone, without any disturbance, and when he was emotionally stirred. The "Tryst
with Destiny" speech delivered at the midnight meeting of the Constituent Assembly on
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14-15 August 1947 was written in his own hand. When the typed copy and the
handwritten draft were delivered to me by the PA, I consulted Roget's International
Thesaurus and went to Nehru. I said "Date with Destiny" was not a happy phrase for a
solemn occasion because the word date had acquired an American connotation of
assignation with girls and women. I suggested its replacement with "tryst" or
"rendezvous," but cautioned that the phrase "Rendezvous with Destiny" was used by
President Franklin Roosevelt in one of his famous wartime speeches. He thought for a
moment and changed date to tryst in the typescript. The original handwritten draft with
the word date remained with me all these years and was handed over recently to the
Nehru Museum and Library along with innumerable documents and photographs.
The broadcast on the day of Gandhiji's assassination, with the sublime words "the Light
has gone out," was made extempore, without the aid of any notes.
At the end of 1951 I wanted S. D. Upadhyaya, who had worked for Nehru and his
father for long years, and who was rotting, to be put up as a Congress candidate for
election to the first Lok Sabha. In fact, I had advised Upadhyaya to find a suitable
constituency and get the Provincial Congress Committee to sponsor him. One day,
while I was going with the PM to N. N. Bery, the dentist, spoke to him about
Upadhyaya. He reacted strongly against the proposal. He asked, "What can he do in
parliament? He is singularly unsuitable for parliament." I said, "He will be as good or as
bad as fifty per cent of the Congress MPs; and it will be a fitting reward for a man
known for his loyalty though not ability." He kept quiet. Nehru was then Congress
President. On our way home from Dr Bery's clinic he asked me to tell Upadhyaya to
have his name sent to the AICC by a PCC. I said that this had already been done and his
proposed constituency was Satna in Vindhya Pradesh. That is how Upadhyaya entered
parliament and remained a member of either House for several terms. If any man
deserved a prize for never opening his mouth in parliament, it was Upadhyaya. I am
glad the poor man, in his old age (he is now past seventy-eight), is now entitled to draw
a pension of Rs 500 per month as an ex-MP.
Throughout my association with government I never asked for any favours from the
PM or any minister or any official. I hated to be a supplicant before anyone. No relative
of mine, near or distant, ever got a job or any favour from government. However, I did
not hesitate to intervene directly sometimes, and mostly through the PM, in cases where
injustice was done to individuals. It is true that I have been instrumental in the
appointment of innumerable ministers, governors and non-official ambassadors—none
of them related to me. There was perfect understanding between Nehru and me. On
some rare occasions he did question my judgment, but he doubted nothing else. He
treated me as a colleague. Of course, he knew that I was not available to be treated in
any other way. I have also been instrumental in preventing some appointments. One
such I shall relate. Soon after the appointment of Vijaya Lakshmi Pandit as an
ambassador, Nehru sponsored his brother-in-law, G. P. Hutheesing, for appointment as
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commissioner to Malaya. He had gone with Nehru to Malaya as his secretary in January
1946 and stayed back for a couple of weeks to study the position of Indians there. Two
senior officials of the Commonwealth Relations Department saw me privately and
requested me to prevent the appointment if possible. I decided to resort to the indirect
approach.
I talked to Hutheesing, who happened to be in Delhi then, and told him that it would be
infra dig to accept a diplomatic post which did not carry the rank of a first class
ambassador, considering his education and background. I asked him, "Why do you, a
rich man, want to lower yourself?" He said, "I am going to tell Bhai this evening that I
don't want it." Thus Gunotham Purushotham Hutheesing was talked out of a situation
which would have resulted in Nehru being accused of nepotism. Some months later,
while driving to Palam airport, I related the whole story to the PM; and also told him
the story about the only son of my widowed sister who was old enough to be my
mother. She sent him to me in Delhi for a job. There was then a vacancy in the PM's
secretariat for which he was qualified; or I could have easily fixed him up elsewhere;
but I gave him his train fare and some pocket money to return home. My sister was
deeply hurt. Nehru told me that I was a fool to have done it. I replied that in some
matters I would rather be a fool. I asked him, "Didn't you recently say that in public life
one should not only be correct but should appear to be so?" Silence was the
understandable reaction.
In the mid-fifties a minister of state foolishly got into trouble. He was sent as a delegate
to the UN General Assembly. A rich man, and a married man with children, he took
with him a youngish woman and stayed in hotels in New York, London and Paris,
entering their names as "Mr. and Mrs." in order to stay together in the same rooms.
Much later the woman arrived at the residence of the minister in New Delhi with her
baggage and demanded the right to stay there even as a servant—much to the
embarrassment of the minister and his wife. She was thrown out; but she managed to
get a room in Western Court. She met many important people and registered her
complaint with them. Finally, she waylaid the PM, as he and I were going home from
the office. She mumbled something to the PM. While driving home, the PM asked me to
send for the minister and talk to him. I rang up the minister and he came in the
afternoon to my office. It was a Saturday when parliament was not in session. He
confessed to everything. I gave him a piece of paper and asked him to write out his
resignation from the Council of Ministers addressed to the PM. As I dictated slowly, he
wrote, "I hereby tender my resignation from the Council of Ministers for personal
reasons. I shall be grateful if you will be good enough to forward it to the President for
his acceptance." I asked the minister to see me on Monday morning in my office in
Parliament House with a common friend, U. S. Malliah, MP, who was aware of the
incident. They met me as suggested. I told the minister that where hormones were
concerned I had no right to pass judgment on anyone; but I added, "You have
committed the inconceivable folly of entering your name and that of the woman in hotel
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registers everywhere as "Mr. and Mrs." Some people have egged her on and sent her to
Delhi to blackmail you. I suggest that you buy her silence. Your good friend Malliah, I
am sure, will succeed in persuading her to quietly go away from Delhi. Malliah should
decide the amount to be given to her. Malliah decreed that, considering the minister's
financial position, he should give her Rs 50,000. This was done within two days, and the
woman left Delhi quietly. Later, I gave the PM all the facts and the letter of resignation
of the minister. The PM thought over the matter for a couple of days and decided not to
accept the resignation. And the minister survived and prospered. He became a Cabinet
Minister in the Indira regime during which he proved to be the most servile of
ministers. He was the first to take the little boy Sanjay around in his state, launching
him into politics. At a public meeting organized at government expense, the minister
stood up on his haunches and said something very profound, "I have slaved for your
grandfather and your mother, and I shall slave for you." I do not know for whom he is
slaving now.
It was never in my nature to be a sycophant and a flatterer. I have irritated and annoyed
Nehru in private more than H. V. Kamath, Ram Manohar Lohia or Raj Narain in public.
Once, at a reception at the India 'House in London, to which Attlee and several other
dignitaries came, Nehru stood in a corner chatting with Lady Mountbatten all the while.
Krishna Menon turned to me and said that people were commenting on it and
requested me to break in so that Nehru could move about. I told him that I had no locus
standi, he was the host and it was his duty to make the PM circulate. Krishna Menon did
not have the guts to do the right thing. Two other similar parties were in the offing
elsewhere in the next few days, and I did not want a repetition of the PM being glued to
one person. Later, in the evening I sent the PM a hand-written note about the incident
which, I said, resulted in unfavorable comment and needless gossip. I did not wish to
embarrass him by talking to him personally about this matter. He was too big a man to
take my note amiss. It had the desired effect and the other two parties went off well. In
the ultimate analysis, I really did not care what Nehru or anyone else thought of me as
long as I was true to myself.
After my resignation from government in 1959, I continued to do some personal work
for Nehru. The last time I saw him was on 27 April 1964. I gave him a prepared note. He
read it twice. He could not take in anything. I told him that he need not bother and that
I would leave written instructions to his staff on his behalf. He was no longer in a
condition to do any useful work. I felt immeasurably sad. I went off to Simla with the
premonition that I would never see him again. On 27 May 1964, in the forenoon, I
received a telephone message from a friend in Delhi that the PM was sinking. The
Lieutenant-Governor of Himachal Pradesh was good enough to arrange transport for
me from Simla to Delhi where I arrived late at night. It was a hot and dusty day; and in
Delhi there was an earthquake.

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Though I have found it psychologically difficult to write some chapters of this book, it
was this chapter that I found the most difficult.

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2. Attack On Me by the Communists
In the winter of 1958 some Communists chose to mount a virulent attack on me. I shall
not attempt to give the details here. They are contained in my letter of resignation dated
12 January 1959 to the Prime Minister and a letter dated 11 January 1959 to the Prime
Minister from Rajkumari Amrit Kaur, included in full as Appendix 3.
The Prime Minister did not want to accept my resignation and told me so. But I had
made up my mind that, for all the world, I would not continue in a position where I
could not defend myself. My resignation letter was not written in a huff. Once written it
was never to be withdrawn. The Prime Minister kept my letter of resignation pending
for six days. On 18 January 1959 I sent a note to the Prime Minister conveying my
decision to stop work after two days and to move out of the Prime Minister's house.
That night he sent me a handwritten letter reluctantly agreeing to my request. In fact, I
gave him no choice in the matter.
At 4 A.M. on 27 January, which happened to be my birthday, I woke up to get ready to
leave by car for Almora with my dear friend Boshi Sen, the agricultural scientist. At 4.45
A.M. Nehru came down to my room and sat down with Boshi Sen. He knew that it was
my birthday; but he did not want to say "happy birth-day" because there was nothing
happy on that day either for me or for him. As I was leaving, he embraced me and told
Dr. Sen, "Boshi, look after him."
I was to learn later, with a considerable measure of happiness, that the servants and
malis (gardeners) at the PM's house spontaneously went in a procession to the PM, the
day after I left, to request him to ensure that I returned to the PM's house.
At his press conference on 7 February 1959, the PM said, "My broad appreciation of Mr.
Mathai was of efficiency, integrity and loyalty, at any rate loyalty to me; but also a
person who acted foolishly often in small matters; and sometimes rather threw his
weight about. But I never doubted his integrity and I have had no reasons since than . . .
connected as he was with me, a delicate position, which could have been misused very
easily; all this time I have no reason, not the slightest reason, that financially speaking it
was in the slightest degree misused."
On 16 February Lady Mouritbatten came to see me at the residence of Rajkumari Amrit
Kaur. She was exercised over the possibility of my having turned bitter as a result of the
one or two unfavorable remarks the PM had made at the press conference. She asked
me if the PM had ever pulled me up for the matters he had mentioned. I said no. She
commented, "Then he had no right to make those remarks in public." I told her that he
must himself have been upset about my leaving him and the words might have escaped
his lips unintentionally. I assured her that I was not particularly hurt by them. Then I
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handed over to her a copy of my lengthy reply to a Cabinet Minister who had written to
me disapproving of the PM's remarks about me at the press conference. She took it with
her to read. She mentioned to me that the PM had told her that soon after the press
conference Secretary-General N.R. Pillai of the External Affairs Ministry wrote a private
note to him on behalf of himself and the three Secretaries of the ministry to say that at
no time had I thrown my weight about in so far as they were concerned, and further
that I was always helpful to them. She made it known to me that the PM was distressed
at having made those remarks. I asked her to tell him to forget about the whole matter.
She came the next day to tell me that my letter to the Cabinet Minister greatly moved
her and that the PM shed tears when he read it in her presence.
While I was in Almora I received a communication from the PM that in view of the
sustained noises by some opposition MPs in parliament he, in consultation with his
colleagues, had decided to ask the Cabinet Secretary to ascertain the facts from me and
submit a report to him. The PM advised me to come down to Delhi. So I came and
stayed in Rajkumari Amrit Kaur's house.
On return to Delhi, I informed the PM that I would gladly cooperate with the Cabinet
Secretary provided three conditions were met. I told him that I did not like any oneman business in a matter like this—in so far as the Cabinet Secretary and he himself
were concerned. My conditions were:
1)

The Chairman of the Central Board of Revenue should be associated with
the Cabinet Secretary in the process of ascertaining the facts.

2)

The Cabinet Secretary's report should be examined and commented upon
by the Finance Minister.

3)

An authority independent of the government should pronounce an
opinion on the findings of the Cabinet Secretary. I suggested the
Comptroller and Auditor-General of India should undertake this task.

The. PM consulted his principal colleagues and informed me that my conditions met
with their wholehearted approval. Parliament was informed of this.
To provide facts and explanations about personal finances spread over a period of
thirteen years was not an easy matter. However, I was able to collect the material and
let the Cabinet Secretary and his colleague have it before the end of April 1959.
The following documents, which were placed before both the Houses of parliament on
6 May 1959, are given in full in Appendix 4:
1)

PM's letter to Chairman/Speaker dated 6 May 1959.
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2)

PM's note dated 6 May 1959.

3)

Finance Minister's comments dated 6 May 1959.

4)

Comptroller and Auditor-General's comments dated 6 May 1959.

Notable Editor S. Mulgaokar wrote a brief editorial in the Hindustan Times of 8 May
1959, which I quote on the next page:
The statements of Mr. Nehru and Mr. Morarji Desai on the result of the enquiry
into the allegations in Parliament of misuse by Mr. M. O. Mathai of his official
position of Special Assistant to the Prime Minister can be left to speak for
themselves. What may strike the public as rather bewildering is that the
Communists, who were so loud in their clamor for Mr. Mathai's blood and had
claimed to possess unimpeachable evidence against him, ran away, when it came
to the point, from the responsibility of substantiating their accusations before the
inquiry tribunal. Mr. Nehru has emphasized that the only information which
was offered to Mr. Vishnu Sahay was a letter from a person in prison who made
some general charges without supporting evidence and an anonymous
communication. Mr. Desai has pointed out: "The fact that nobody has come
forward with any reliable information or evidence is significant." We have
another word to describe the behavior of people who make wide allegations
from a position of privilege and then evade their plain duty to attempt to make
their allegations stick. The word is DESPICABLE.
(Text and Photostat of Hindustan Times editorial, 8 May 1959)
The Prime Minister's senior most colleague, Govind Ballabh Pant, asked me if I would
return to the Prime Minister's house and office. I replied in one sentence, "Only a dog
returns to its vomit." He promptly reported this to the Prime Minister. Later, the Prime
Minister asked me if I would like to take up any position in government in India or
abroad. I said, "Not any office of profit under the government."
Sometime after the noise had died down, a friend asked me, "Did that second-rate
politician who indulged in wild allegations against you day in and day out, with a hot
potato stuck in his throat, show a modicum of decency by expressing his regret to you
at least privately?" In reply I could only quote to him an old proverb: "Cleanliness in a
crow; honesty in a gambler; mildness in a serpent; women satisfied with love; vigor in a
eunuch; truth in a drunkard; friendship in a king; decency in a second-rate politician —
whoever heard of these things?"

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3 Personal Embarrassment of a Rebel
At the Viceroy House at 11 A.M., on 2 September 1946, on the installation of the interim
government, an acute personal embarrassment awaited Nehru. He had to affirm
allegiance to King George VI, Emperor of India and also to affirm that he would well
and truly serve "our Sovereign." Nehru was suddenly confronted with these. He had no
choice. He suppressed his embarrassment and extreme annoyance and went through
the affirmation of allegiance and affirmation of office which read as follows:
FORM OF AFFIRMATION OF ALLEGIANCE
I, Jawaharlal Nehru, do solemnly affirm that I will be faithful and bear true allegiance to
His Majesty, KING GEORGE THE SIXTH, Emperor of India, His Heirs, and Successors,
according to law.
FORM OF AFFIRMATION OF OFFICE
I, Jawaharlal Nehru, do solemnly affirm that I will well and truly serve our Sovereign,
KING GEORGE THE SIXTH, Emperor of India, in the Office of Member of the
Governor General's Executive Council, and that I will do right to all manner of people
after the laws and usages of India without fear or favor affection or ill will.
For several days Nehru went on murmuring like a child, "I had not bargained for these."
The conscience of Sardar Patel, Rajendra Prasad, Rajaji and others was not pricked.
When dominion government came on 15 August 1947 the Emperor of India
automatically stepped down to become King of India; and Nehru, the Prime Minister,
corresponded directly with the King. The British Government went out of the picture.
Nehru soon discovered that his communications to the King had to be in third person
and in the form of "humble duty submissions." When the first such submission was
placed before him for his signature, Nehru was annoyed and said, "Oh, Lord" and
pushed away the signature pad. After some time he signed "the wretched thing." Here
is a later sample of the humble duty submission:

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4. Obscurantists to the Fore
In the Constituent Assembly, which met in New Delhi on 9 December 1946 and
concluded its deliberations on 26 November 1949, a demand was spearheaded by
Rajendra Prasad and some other obscurantists that the name of the country should be
Bharat and not India in the Constitution. Nehru pointed out that in such a case,
internationally India would loss all the benefits of a "succession state" such as original
membership of the United Nations and various international bodies, and all the
embassy buildings abroad and so forth. Pakistan was a new state seceding from India
and had to negotiate for membership of international bodies. Nehru told Rajendra
Prasad and others, "I do not want to put India in an absurd position internationally." He
also told them that their suggestion would please Pakistan most. Rajendra Prasad and
others hummed and hawed; but Nehru stood firm. Finally, he said he had no objection
to mention somewhere in the Constitution "India that is Bharat." When Rajendra Prasad
became President of the Republic, he ordered that the armbands of his ADCs should
contain the word Bharat and not India. This practice continues.
Nehru had to give into the same set, of people and agree to the inclusion of cow
protection and prohibition in the Constitution. Left to himself, Nehru would not have
cluttered the Constitution with all these. His emphasis was on the "right to work"; but
obscurantists wanted to go backwards.
There was even a feeble demand for the protection of monkeys, descendants of the
mythical Hanuman.
Soon after Rajendra Prasad became President of the Republic, on 26 January 1950, he
released a number of hefty brown monkeys into the President's Estate. One day a few of
them came to the Prime Minister's office in the secretariat through a door to the balcony
which was kept open. I happened to be in the room with Nehru and chased them away.
One ran away with a paperweight. I told Nehru, "This is the handiwork of Rajendra
Babu." He laughed. The monkey population was augmented by a substantial number
released at the Birla temple. They still come up to the President's Estate where the
monkey menace is very real; they take away vegetables and fruits and also attack
helpless women and children even today.
A VICTIM OF OBSCURANTISM AND BARBAROUS INTOLERANCE—
B. R. AMBEDKAR
Through a friend of mine, P. K. Panikkar, who was a Sanskrit scholar and deeply
religious, B. R. Ambedkar became interested in me. I had told Panikkar about my
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admiration for Ambedkar, but added that he just fell short of being a great man by
inches because he could not wholly rise above bitterness. However, I said that no one
had any right to blame him, having regard to the humiliations and indignities he had to
suffer throughout his life. Panikkar, who was a frequent visitor to Ambedkar, obviously
reported all this to him. On a Sunday morning Ambedkar rang me up and asked me to
tea that evening. He said he had asked Panikkar also. I turned up at the appointed time.
After some pleasantries, Ambedkar told me good-humouredly, "So you have found
fault with me; but I am prepared to accept your criticism." Then he talked about
untouchability. He said that the railways and factories had done more to combat
untouchability than Gandhi's personal campaigns. He" asserted that the real problem of
the untouchables was economic and not "temple entry," as advocated by Gandhi.
Ambedkar said, "Our Constitution will, no doubt, abolish untouchability on paper; but
it will remain in India as a virus for at least a hundred years. It is deeply embedded in
the minds of people." He recalled the abolition of slavery in the United States and said,
"The improvement of the condition of the Negroes is slow even after 150 years." I said I
couldn't agree with him more and told him the story of my mother. Despite almost
2,000 years of Christianity behind her, she practiced untouchability with as much
conviction as Pandit Madan Mohan Malaviya. She would not allow a Harijan to draw
water from our well in summer when water was generally scarce. She would rush for a
bath if an untouchable came within twenty feet of her.
Then Ambedkar said with pride, "The Hindus wanted the Vedas, and they sent for
Vyasa who was not a caste Hindu. The Hindus wanted an epic, and they sent for
Valmiki who was an untouchable. The Hindus want a Constitution, and they have sent
for me." He said, "The greatest tragedy of the Hindi belt in India is that the people of the
region discarded Valmiki and installed Tulsidas." He expressed the view that the
people of this vast region will remain backward and obscurantist until they replace
Tulsidas by Valmiki. He reminded me that, according to the Valmiki Ramayana, "when
Rama and Lakshmana arrived at the ashrama of Bharadwaja, the sage assembled a few
fattened calves for Rama to choose from to be slaughtered for the feast. So Rama and his
entourage were fed on veal; Tulsidas cut out all this." I told him that Vatsyayana, in his
Kama Sutra, has prescribed that young couples should be fed on veal for six months
before marriage.
Ambedkar pointed his finger at me and said, "You Malayalis have done the greatest
harm to this country." I was taken aback and asked him how. He said, "You sent that
man Shankaracharya, a desiccated expert at logic, on a padayatra (walking tour) to the
north to drive away Buddhism from this country." Ambedkar added that the Buddha
was the greatest soul India had ever produced. He also said that the greatest man India
produced in recent centuries was not Gandhi but Swami Vivekananda.

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I reminded Ambedkar that "it was Gandhi who suggested to Nehru to invite you to join
the government." This was news to him. I amended my statement by saying that the
idea struck Gandhi and Nehru simultaneously. It was Ambedkar who piloted the
Constitution Bill in the Constituent Assembly.
Ambedkar confided in me that he had decided to become a Buddhist and to advise his
followers to do likewise.
Until he left Delhi, Ambedkar kept in touch with me. He was a remarkable man who
richly deserves the salute of the Indian people.

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5. Mahatma Gandhi
Even though I had opportunities of developing contacts with Gandhiji, I instinctively
kept away from him. Of course, I recognized his greatness. But I was baffled by him.
My contacts with him were limited to personally delivering to him important
communications from Nehru.
Early in 1947 an old foreign friend presented to me a very small, elegant, ivory-coloured
transistor radio—one of the earliest of its kind. As soon as it was switched on, it started
working. On closing the lid, it stopped. Nehru saw it and was fascinated like a child. So
I gave it to him. He kept it in his dressing room and listened to the radio news bulletin
while shaving. He used to bring it down at all mealtimes to listen to. He spoke to
Gandhiji about it and also about me. Gandhiji had already heard about me from
Rajkumari Amrit Kaur. Nehru told me that Gandhiji had never listened to a radio and
asked me to take the radio with me to Birla House (where Gandhiji was staying) and let
him listen to the 6 P.M. news bulletin. I reached Birla House a few minutes before 6
P.M. and presented myself before Gandhiji. He asked me to sit down on the floor in
front of him, which I did. At 6 P.M. I switched the radio on. Gandhiji listened for about
a minute and said, "Close it, does anyone speak sense nowadays?" It was a period of
serious communal troubles in India.
Gandhiji baffled me on several matters:
1)
Preaching Ram Rajya of Hindu mythology. Millions of Muslims and other
minorities had no use for Rama Rajya. They became alienated by Gandhiji's continued
preaching of Rama Rajya.
2)
Preaching of cow worship and incessant writing about it in the Harijan. Apart
from Muslims and other minorities, as well as some sections of Harijans and tribal
people and adivasis, who were alienated by this, millions of educated Hindus wanted
to worship nothing or at least something better than a cow.
3)
Preaching of celibacy for married couples. Few except Morarji Desai and some
others were converted to this. Some, who practiced it, eventually gave up; and some
developed psychological problems.
4)
Advocating, support for the Khilafat movement in India. This was one of the
most opportunistic adventures of Gandhiji's. When Kemal Ataturk came up and
abolished the Caliphate, Gandhiji looked foolish. Gandhiji was trying to forge HinduMuslim unity on quicksand.
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5)
Gandhiji's unscientific and staggering remark early in 1934, to the effect that the
Bihar earthquake had been a punishment for the sin of untouchability.
6)
Fierce condemnation of smoking by the workers of the textile industry in
Lancashire thrown out of employment owing to the boycott of British cloth in India.
7)
Savage treatment of a Congress worker who could not give full account of a
small amount placed at his disposal. Gandhiji asked him to walk over a hundred miles
during the height of summer to get back to his village, even though he was personally
convinced that the man was honest and innocent. C. F. Andrews, who witnessed this
harsh treatment, took the man aside and gave him his train fare and a few rupees from
his pocket without Gandhiji's knowledge.
8)
Fanatic advocacy of Hindi, one of the least developed languages of India,
surpassing that of any chauvinist in the Hindi belt.
9)
Giving the world, in a quixotic gesture, his ideal nominee for the office of Head
of State in India—an untouchable girl "of stout heart, incorruptible and crystal-like in
her purity." However, at the appropriate time, he advised Lord Mountbatten to accept
the invitation of the Congress to become the first Governor-General of independent
India. He also advised Mountbatten to move out of Viceroy House and live in a simple
home without servants. He wanted Viceroy House to be converted into a hospital. He
did not fail to give further advice to Mountbatten to grow his own vegetables and clean
his own toilet!
10)
Gandhiji's letter to Viceroy Lord Linlithgow, written early in June 1940, as Hitler
had just overrun Holland, and Belgium was about to fall. The letter read, "This
manslaughter must be stopped. You are losing. If you persist, it will result in greater
bloodshed. Hitler is not a bad man. If you will call it off today, he will follow suit. If you
want to send me to Germany or anywhere else, I am at your disposal. You can also
inform the Cabinet about this."
There is no record of the Viceroy having forwarded to the British Cabinet Gandhiji's
"momentous" letter, nor of the sensation it created at 10 Downing Street!
11)
Gandhian economics—it is a sure way of achieving eternal backwardness and
perpetuating poverty in India. Gandhiji had been advocating decontrol of foodgrains
and other essential items of daily use, and the scrapping of rationing soon after the
Government of India passed into Indian hands, even though the food situation was
very critical. At the instance of Nehru, John Matthai called on Gandhiji and talked to
him for an hour. Matthai reported that throughout the one hour he had the definite
impression that he was addressing a wall. The matter came up before the Cabinet,
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which was equally divided. The decision in favor of Gandhiji's demand was taken by
the Prime Minister's casting vote. It had disastrous consequences; and the country and
its people had to pay a very heavy price for adopting Gandhian economic. Sarojini
Naidu once said, "Many will never know how much it cost to keep that old man in
poverty."
12)
During one of his fasts Gandhiji said, "If I have acetone in my urine, it is because
my faith in Rama is incomplete!"
13)
Gandhiji's advice to women faced with rape in the Punjab during partition was
to bite their tongue and hold their breath until they died. Confucius gave different
advice to a young girl. He told her, "If you find yourself in a situation where rape is
inevitable and there is no chance of escape, my advice to you is to lie back and enjoy it."
14)
Gandhiji's rejection of modern birth control methods to curb population. What
was acceptable to him was the one he himself practiced—continence. He refused to
make allowance for human frailty.
I never considered Gandhiji had anything to teach me about nonviolence, ends and
means, detachment (nishkama karma), compassion and loving one's enemies, because
these were preached and practised far more eloquently about 2,000 years ago by Jesus
Christ. G. K. Chesterton once said, "Christianity has not been tried and found wanting;
it had been found difficult and never tried" On a smaller scale, this is how I felt about
Gandhiji. I could never have been a follower of Gandhiji's however much I tried. In fact
I did not want to try.
While Gandhiji's opposition to the partition of India was heroic, he was unrealistic
considering the past, including some actions of his own, that contributed to it. No
wonder the Congress Working Committee passed a resolution absolving him of
responsibility for the decision agreeing to partition.
The last phase of Gandhiji's life constituted his finest hour, more especially the last
month of his earthly existence (January 1948). He was exercised over two matters:
1)
For weeks, representatives of Muslims had been asking him for advice as to
whether they should risk death or give up the struggle and migrate to Pakistan.
Gandhiji's advice was, "Stay and risk death rather than run away." Delhi and
surrounding areas were overflowing with Hindu and Sikh refugees crying for
vengeance on all Muslims staying in India. They had seized mosques and Muslim
homes all over the city and surrounding areas. Gandhiji wanted them to return those
homes to their Muslim owners and go back to their camps.
2)
The Indian Cabinet decided to withhold payment of the partition debt of Rs. 550
million to Pakistan. The Cabinet did not want to disturb the already disturbed public
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opinion by giving Pakistan the money which was likely to be used to pay for arms
which would be used against India in conditions existing at that time. Lord
Mountbatten feared that the decision to withhold payment might drive a desperate and
bankrupt Jinnah to war. The Cabinet refused to listen to Mountbatten. Gandhiji
considered the Cabinet decision as immoral.
On these two issues Gandhiji's last fast (13 to 18 January 1948) took place. Sardar Patel
tried to argue with Gandhiji about the payment of Rs. 550 million to Pakistan.
Gandhiji's only reply was, "You are not the man I once knew." (Gandhiji was deeply
distressed at two speeches Patel delivered during the previous two months at public
meetings in Lucknow and Jaipur severely criticizing him.) Within three days of
Gandhiji's fast the Government of India announced that it had ordered immediate
payment of the amount to Pakistan.
On the 18th, representatives of militant Sikhs, Muslims, Christians, Parsis, Harijans,
Sadhus, Hindu Mahasabha and RSS stood by Gandhiji's beside and gave the
undertaking to preserve communal peace not only in Delhi but also throughout India.
The High Commissioner of Pakistan was also present.
Gandhiji could be devastating in his comments about people. One of his undated letters
to Rajkumari Amrit Kaur, who gave it to me as a present, read:
You have asked my opinion about Govind Das after having done the mischief. I
have bitter experiences about him. He is ambitious, vain, vulgar, crooked and
unreliable. His ventures have resulted in losses. This is the opinion of those who
have had dealings with him. I know him well. He used to be like a son to me. I
used to think well of him. But I soon discovered that he was a schemer. Now he
rarely comes near me. I am sorry, but such is my experience. I hope you haven't
dropped much.
Nehru once expressed the view that Gandhiji's approach to events was feminine, that is,
intuitive, and was more of a reaction than the result of logical reasoning. An extract
from Nehru's letter dated 3 June 1942, addressed to Rajkumari Amrit Kaur reads:
I was glad to see Bapu and have a talk with him. This cleared up some matters,
but I should like to see much more of him and find out exactly what is in his
mind. I find his approach to events is rather feminine, if I may say so. That is to
say it is intuitive and is more of a reaction than the result of logical reasoning.
Much can be said for this, but it is a risky business sometimes.
As everyone knows, Nehru was the draftsman of the Congress regardless of who was
its President. Practically all its resolutions and correspondence with British authorities
were drafted by him. Below is a letter to Lord Pethick Lawrence dated 6 May 1946,
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drafted by Nehru and corrected by Gandhiji, for Congress President Maulana Azad to
sign:

My colleagues and I followed with care the proceedings of the conference
yesterday and tried to understand what our conversations were leading us to. I
confess to feeling somewhat mystified and disturbed at the vagueness of our
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talks and some of the assumptions underlying them. While we would like to
associate ourselves with every effort to explore ways and means of finding a
basis for agreement, we must not deceive ourselves, the Cabinet Mission or the
representatives of the Muslim League into the belief that the way the Conference
has so far proceeded furnishes hope of success. Our general approach to the
questions before us was stated briefly in my letter to you of April 28. We find
that this approach has been largely ignored and a contrary method has been
followed. We realize that some assumptions have to be made in the early stages
as otherwise there can be no progress. But assumptions which ignore or run
contrary to fundamental issues are likely to lead to misunderstandings during
the later stages.
In my letter of April 28, I stated that the basic issue before us was that of Indian
independence and the consequent withdrawal of the British army from India, for
there can, be no independence so long as there is a foreign army on Indian soil.
We stand for the independence of the whole of India now and not in the distant
or near future. Other matters are subsidiary to this and can be fully discussed
and decided by the Constituent Assembly.
At the Conference yesterday I referred to this again and we were glad to find that
you and your colleagues, as well as the other members of the conference,
accepted Independence as the basis of our talks. It was stated by you that the
Constituent Assembly would finally decide about the nexus or other relationship
that might be established between a free India and England. While this is
perfectly true, it does not affect the position now, and that is the acceptance of
Indian independence now.
If that is so, then certain consequences inevitably follow. We felt yesterday that
there was no appreciation of these consequences. A Constituent Assembly is not
going to decide the question of independence; that question must be and, we
take it, has been decided now. That Assembly will represent the will of the free
Indian nation and give effect to it. It is not going to be bound by any previous
arrangements. It has to be preceded by a Provisional Government, which must
function, as far as possible, as a Government of free India, and which should
undertake to make all arrangements for the transitional period.

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In our discussions yesterday repeated references were made to 'groups' of
provinces functioning together, and it was even suggested that such-group
would have an executive and legislative machinery. This method of grouping
has not so far been discussed by us but still our talks seemed to presume all this.
I should like to make it very clear that we are entirely opposed to any executive
or legislative machinery for a group of provinces or units of the Federation. That
will mean a sub-federation, if not something more, and we have already told you
that we do not accept this. It would result in creating three layers of executive
and legislative bodies, an arrangement which will be cumbrous, static and
disjointed, leading to continuous friction. We are not aware of any such
arrangement in any country.
We are emphatically of opinion that it is not open to the Conference to entertain
any suggestions for a division of India. If that is to come, it should come through
the Constituent Assembly free of any influence of the present Paramount Power.
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Another point we wish to make clear is that we do not accept the proposal for
parity as between groups in regard to the executive or the legislature. We realize
that everything possible should be done to remove fears and suspicions from the
mind of every group and community. But the way to do this is not by unreal
methods which go against the basic principles of democracy on which we hope
to build up our constitution.
Below is the draft of a letter from Nehru dated 12 June 1946, addressed to Viceroy Lord
Wavell as corrected by Gandhiji:
I am sorry for the slight delay in answering your letter of today's date. Your
invitation to me to see you today at 5 P.M. in order to confer with you and Mr.
Jinnah about the Interim Government placed me in a somewhat difficult
position. I would gladly meet you at any time, but our official spokesman in
regard to such matters is naturally our President, Maulana Azad. He can speak
and confer authoritatively, which I cannot do. It is therefore proper that he
should be in charge on our behalf of any authoritative conversations that might
take place. But since you have asked me to come I shall do so. I hope however
that you will appreciate my position and that I can only talk without authority,
which vests in our President and the Working Committee.

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I am sorry for the slight delay in answering your letter of today's date. Your
invitation to me to see you today at 5 P.M. in order to confer with you and Mr.
Jinnah about the Interim Government placed me in a somewhat difficult
position. I would gladly meet you at any time, but our official spokesman in
regard to such matters is naturally our President, Maulana Azad. He can speak
and confer authoritatively, which I cannot do. It is therefore proper that he
should be in charge on our behalf of any authoritative conversations that might
take place. But since you have asked me to come I shall do so. I hope however
that you will appreciate my position and that I can only talk without authority,
which vests in our President and the Working Committee.
Many people believe that it was Nehru who first referred to. Gandhiji as "Father of the
Nation." It is incorrect. It was Sarojini Naidu who did. When Gandhiji briskly walked to
the rostrum of the Asian Relations Conference in New Delhi (28 March to 2. April 1947),
Sarojini Naidu, who presided over the conference, announced in her commanding
voice, "the Father of the Nation." There was an anticlimax to this—uncharitable people
began to call Gandhiji's son Devadas Gandhi, "the Nation."
It was again Sarojini Naidu who, in another context, called Gandhiji "the Micky Mouse."
I have pondered over the figure of the three monkeys Gandhiji kept in front of him.
"Speak no evil" is noble but "see no evil" and "hear no evil" appeared to me as illconsidered and unprofitable propositions. Imagine a situation in the Rajya Sabha where
the Chairman, all the MPs, and the pressmen in the gallery have closed their ears, and
Bhupesh Gupta alone is available to speak. It will be a tragedy. The audience will miss
the most pleasant voice and the public will miss the daily quota of his inimitable pearls
of wisdom the next morning.
Throughout his life Nehru had what might be called a "father complex." This was very
pronounced in his attitude and approach to Gandhiji. Nehru opened his heart almost
completely to Gandhiji and discussed with him practically everything. After Gandhiji's
death, Nehru had no one to whom he could open his heart. Consequently he got
compartmentalized. He discussed several matters with Sardar Patel and Rajaji, some
with Maulana Azad, Govind Ballabh Pant, Radhakrishnan and Gopalaswami
Ayyangar. They were all men older than him. As Prime Minister, Nehru never
summoned them; whenever he had something to discuss with them, he would go to
their houses.
Death by assassination claimed Gandhiji at 5.17 P.M. on Friday, 30 January 1948. Some
found it a parallel to the crucifixion of Jesus Christ and called it the second crucifixion.
Immediately after the assassination, the telephone rang at 17 York Road. I took it. The
call was from Birla House announcing Gandhiji's assassination. The caller thought that
Nehru would be at home at that time; but he was still in his office at the

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Commonwealth Relations Department at the secretariat. I immediately rang him up and
he rushed to Birla House.
As Nehru was about to leave Birla House for the All India Radio to make a broadcast
and announce the shattering news to the Indian people, he spotted me in the crowd and
beckoned to me. I managed to reach him by pushing through the crowd. He asked me
to stay with him; he was shattered and trembling. In the car Nehru noticed that I was
about to tell him something. He at once placed his hand on mine to silence me. He was
in deep thought. I went up with him right into the studio from where he spoke. I sat
there, dumb. And Nehru made his brief, heart-rending and moving speech starting
with the sentence, "The Light has gone out of our lives." Neither Nehru nor any of us at
17 York Road ate that night.
Late at night Vincent Sheean, the noted American author and distinguished journalist,
came to see me. He was weeping like a child and looked forlorn. I reluctantly agreed to
accompany him to his flat near Narendra Place. The moment he arrived there he
opened a bottle of Scotch. That was his way of drowning his anguish. He is the author
of a biography of Gandhiji, Lead Kindly Light. I made my excuses and took leave of
Vincent Sheean and rushed back to the house in case Nehru wanted me.
A few days after Gandhiji's assassination, Sarojini Naidu took to task some weeping
people by saying, "That was the only death fit for him; did you want him to die of
indigestion?"
Rajkumari Amrit Kaur told me that the reason why Gandhiji was late for his last prayer
meeting was that he was in an animated conversation with Sardar Patel. They were
discussing Nehru's note dated 6 January 1948, copies of which were distributed only to
Gandhiji and Patel. The full text of the note is given in Appendix 2. It was never the
practice of Nehru to speak to Lord Mountbatten about his differences with Patel.
Rajkumari Amrit Kaur told me that had Gandhiji not been assassinated that day, Sardar
Patel would most probably have been asked by Gandhiji to leave the Cabinet and
remain with him.
Gandhiji's assassination made Nehru and Patel to ink their differences and to work
together.
The idea of changing the name of Albuquerque Road to Tees January Marg (30 January
Road), after the French fashion, originated with Nehru.
About six months after the assassination I quietly opened the door of the Prime
Minister's office in the secretariat and found Nehru with head bowed and weeping,
tears rolling down his cheeks. I quietly withdrew and closed the door without Nehru
noticing me. I knew he was weeping for his beloved Bapu.
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6. Lord Mountbatten and "Freedom at Midnight"
In 1972 I received a letter from Lord Mountbatten requesting me to see Larry Collins
and Dominique Lapierre. I knew that Mountbatten had given the two writers recorded
interviews for thirty hours. Subsequently Larry Collins saw me twice. During these
meetings Collins pointedly asked me about some matters Mountbatten had revealed to
him. I mildly contradicted Mountbatten on two or three counts. It appears that Collins
reported these to Mountbatten at about the time the book Freedom at Midnight was
published. And Mountbatten went on the BBC. The text of his interview was published
in the Listener, 30 October 1975. As many in India may not have seen the Listener, I quote
below the relevant extracts:
I went to Simla for the simple reason that after the Punjab Boundary Force had
been divided, which was at the end of August, the beginning of September, I had
nothing more to do. I was only the constitutional bead, I wanted to go away from
Delhi to show the country that their government was in sole power in Delhi, and
I was just the man to countersign their orders. Then after two or three days, my
old friend V. P. Menon, the best of my Indian staff, rang me up and said: 'The
troubles are spreading to Delhi, the capital is at risk, you must come back at
once'. I said: 'Who says so?' He said: 'The Prime Minister and the Deputy Prime
Minister'. 'Well', I said, 'I am not coming'. 'Why not?' I said: 'I have come here
expressly to show to the world that they are in charge of their own country; I
don't want to come and appear to be breathing down their necks. I will come
later on'. He said: 'Oh, then, don't bother. If you can't come within 24 hours, don't
bother to come at all. It is all over; we shall have lost India'. I finally said: 'VP,
you are an old swine, you have persuaded me'.
I came down at once. I went straight round to Government House, and there
were the Prime Minister and Deputy Prime Minister waiting for me. They told
me how serious the situation was, and they said: 'Will you take over the
country?' I said: 'How can I? You have just taken over'. 'Yes, but we are versed in
the arts of agitation, not administration. We can't do it by ourselves. You must
come back'. I saw they were serious. I said: 'Well, I will help you on one
condition, that we find a way of disguising the fact that it is I who am running
India. We must make it appear that it is you. And we must keep this a secret,
certainly in our lifetimes, for your own good and reputation'.
I said: We will form an emergency committee. I will choose the people to put on
it, and the first meeting will take place at five o' clock. Call the meeting at once. I
will have my own Conference Secretary in British style who will take the
minutes, we will move very very quickly. I want the Prime Minister on my right,
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the Deputy Prime Minister on my left. I will consult you and say: 'Don't you
think we ought to do this?' and you will say 'Yes'. And I will say: 'But don't you
think we ought to do this?' and you say 'Yes'.
I have had some recent correspondence with Mountbatten on the subject. I shall, for the
present, leave the book and take on Mountbatten.
I am afraid strict veracity was never one of V. P. Menon's virtues. He rang up
Mountbatten in Simla at night on 4 September 1947 on his own, without consulting
either the Prime Minister or Sardar Patel. Early next morning he rushed to me and
made an earnest request that I square up the Prime Minister. I asked him if there was
going to be a naval battle on the Jamuna at Okhla. I advised him to appraise Sardar
Patel about the whole matter immediately. Later, I mentioned the matter to the Prime
Minister who, as I expected, was furious and said he wanted to speak to Menon
immediately on the telephone. As I knew that Menon was one of Nehru's earliest
antipathies in government, I told the Prime Minister that Sardar Patel would be
speaking to him on the subject. Nehru was impatient and went straight to Sardar Patel's
house. Fortunately, Menon had deft the place by then. On his return from Sardar Patel's
house, the Prime Minister told me that Sardar Patel was much annoyed with Menon;
and that now the only thing left to do was not to embarrass Mountbatten and do
something gracious to associate him with the handling of the developing situation in
Delhi which Menon had exaggerated enormously.
In his letter to me dated 14 September 1976 Mountbatten has questioned my statement
that V. P. Menon had exaggerated the situation enormously. "If you cannot come within
24 hours, don't bother to come at all. It is all over. We shall have lost India." If these
words of Menon to Mountbatten on the telephone on 4 September 1947 are not an
exaggeration, then I do not know the meaning of exaggeration. To me these are the
words of a hysterical woman. I have informed Mountbatten accordingly.
Mountbatten has admitted in his letter of 14 September 1976 to me "there is little doubt
therefore that though V. P. Menon misled me into believing that both the PM and his
deputy wished me to return to Delhi, he had in fact consulted neither and they were
only told of his action after I had agreed to return from Simla. I also believe that this
accounts for the fact that when Nehru and Patel came to see me immediately after my
return, they appeared to be very ill at ease."
Mountbatten has also admitted to me that as early as 1969 he definitely knew of V. P.
Menon misleading him. And yet in his BBC interview in October 1975 he gave his
listeners the definite impression that he returned from Simla at the request of Nehru
and Patel. This, to say the least, is lacking in candor.

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I was not present at Mountbatten's meeting with Nehru and Patel soon after his return
from Simla. Mountbatten's account of what transpired at the meeting provides amusing
reading and is in keeping with Mountbatten's high sense of drama. Nehru is reported to
have told Mountbatten, "You have commanded millions of men." Mountbatten's
Southeast Asia Supreme Command was the most neglected command of the second
world war. I do not know where and when he commanded "millions of men." The
Indian army within the borders of India was not under his command. The Americans
were indifferent to Mountbatten. In fact they used to call it the Jackal Command
because the task of bringing Japan to book was assigned to General Douglas
MacArthur. The American interest in Southeast Asia was confined largely to supplying
essential war material over the hump by air and heavy stuff by lorries to China by the
India-Burma-China Road that they had constructed, maintained and protected along
difficult terrain.

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The Americans were averse to helping imperialist countries like Britain, Holland and
France, to re-establish their colonial domination over the vast areas of Southeast Asia.
Nehru is also reported to have told Mountbatten, "You are a high-level administrator." I
have always felt that there is some truth in Lenin's saying, "Even a cook can administer
a state."
I never thought that Delhi and the bifurcated Punjab constituted the whole of India "to
be taken over" by Mountbatten. Neither do I think that a constitutional GovernorGeneral chairing a committee to deal with non-controversial matters amounts to "taking
over the country." The Governor-General is at once a part of the government and above
it. The reputation of Nehru and Patel was not involved.
If I am asked whether Mountbatten would have been invited formally to help in the
crisis, but for the situation created by V. P. Menon, my answer is no. After all, Pakistan,
which was in a worse position, without even a capital of its own, managed to survive.
What happened in Punjab and Delhi was not unexpected. There is no doubt that the
aftermath of partition was a terrible thing and the Indian people are greatly indebted to
Lord and Lady Mountbatten for their services during this period. They remained
steadfast friends of India after their departure from this country.
Now to the book, Freedom at Midnight. The greatest blunder Mountbatten committed
was to be taken in by Shaheed Suhrawardy and to send to the British Government the
plan of Operation Balkan. Mountbatten had even discovered that Jinnah would not
oppose the idea. It did not occur to Mountbatten that he should find out whether Nehru
would support the idea. If he thought that he could impose it, he was sadly mistaken. I
was with Nehru at the Viceregal Lodge in Simla early in May 1947 when Mountbatten
suddenly got a,"hunch" to informally consult Nehru belatedly on Operation Balkan.
Nehru's reaction was understandably violent; and I was with him when he stormed into
Krishna Menon's room past midnight. Mountbatten had to do his homework all over
again. Nehru almost lost faith in Mountbatten and the latter had to restore it. The
amusing thing is that Mountbatten conveniently forgot all about his blunder and has
glorified his "hunch"!
Freedom at Midnight has referred to Gandhiji's relations with Manu at Noakhali.
Apparently the authors did not know that this aspect of the great man's experiment
with Truth started long years before, while his wife Kasturba was still alive. Kasturba
had granted permission to Gandhiji for this. All the women in Gandhiji's entourage
were involved in this, including the late Rajkumari Amrit Kaur who spoke to me freely
and frankly about it. Gandhiji confided in Rajkumari Amrit Kaur that more than once,
during the experiments, evil thoughts entered his mind. Most of Gandhiji's principal
colleagues privately protested, without success, against this practice. All of them finally
appealed to Nehru to persuade Gandhiji to give it up. Nehru stoutly refused to interfere
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in such an intensely personal matter. Pyarelal has written about it and we Indians
accept what he says. This experiment is not to be undertaken by ordinary mortals.

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7. Admiral of the Fleet, The Right Honourable, The Earl Mountbatten of
Burma, KG, PC, GCB, OM, GCSI, GCIE, GCVO, DSO, FRS
Tall and handsome, conscious of his lineage, Lord Mountbatten arrived in Delhi as
Viceroy, Governor-General and Crown Representative on 22 March 1947 with a mission
to demolish the empire of India of which his great grandmother, Queen Victoria, was
the first Empress. He had all the advantages of birth.
Looking back in perspective, I am often wonderstruck how the gigantic operation of the
transfer of power in the Indian sub-continent from British to Indian hands was carried
out in less than five months.
Mountbatten was a human dynamo where work was concerned. He possessed the
German thoroughness reinforced by his naval career. Meticulous in his attention to
detail, Mountbatten had the remarkable capacity to get the best out of his well chosen
staff. Each member was made to feel that he was a partner in a common endeavor.
Mountbatten had a well ordered mind and great organizing capacity.
Mountbatten was the blue-eyed boy of Winston Churchill, who extracted from the
Americans the job of Supreme Commander, Southeast Asia, for him. His experience in
Southeast Asia, including India, during wartime made him a liberal despite his
aristocratic background and loyalty to Winston Churchill. Lady Mountbatten was more
of a liberal endowed with humanism and unbounded compassion. They both had the
rare quality of evoking the trust of common people. Jinnah was, of course, an exception.
A grateful nation offered the last Viceroy the first Governor-Generalship of
independent India. The government and people of Britain, including the King, were
pleased about it. The Mountbattens were vastly touched by this gesture. Mountbatten
was sworn in as the constitutional Governor-General on 15 August 1947.
Before Mountbatten came to India as Viceroy, he was given the title of Viscount. On the
eve of the independence of India, his title was raised to Earl. Mountbatten was rather
too fond of titles and decorations. After several months as Governor-General of free
India, Mountbatten persuaded Nehru to send a humble duty submission to the King to
confer on him the title of Marquis. I tried to dissuade the PM by saying that
Mountbatten was indulging in wishful thinking and that the King would turn down the
proposal as such quick enhancement of titles was not normally allowed. The PM said,
"What does it matter? We don't lose anything," and the submission was sent off. The
PM received a negative reply from Lord Lascelles, Private Secretary to the King.

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One thing about Mountbatten I could never understand—the amount of time he spent
on his family tree. He reveled in this exercise almost as an elevating hobby. He took
delight in reeling out names of his aunts, sisters, cousins, nephews and nieces who were
members or royal families, past and present, throughout Europe and Russia. It is a
formidable list. It all came out of his German ancestry. As Nepal is an exporter of
soldiers, Germany used to be an exporter of princes and princesses. During the early
part of the first world war, Bernard Shaw said, "It is a war of the German Kaiser, the
German Czar of Russia, the German King of England, and Monsieur Poincaire." Soon
Mountbatten's father Prince Battenberg was renamed Marquis of Milford Haven, and
King George V renamed his House from Saxe-Coburg-Gotha to Windsor which
prompted the Kaiser to say in jest that Shakespeare's Merry Wives of Windsor would
henceforth be known in Germany as the Merry Wives of Saxe-Coburg-Gotha. The young
Louis Bettenberg adopted the English equivalent Louis Mountbatten. Mountbatten
continues to be a prominent member of the Society of Genealogists in London.
In May 1948 Mountbatten invited Nehru to spend a few quiet days with him and his
family at the Viceroy's Retreat at Mashobra in Simla. I was the only one to accompany
Nehru to Mashobra on that trip. While we were there, no pompous formality was
observed. Mountbatten used to drive us personally up the Hindustan-Tibet road to
enjoy a picnic lunch at a rugged but agreeable place called Narkanda. He also drove us
to Kufri.
One evening, after dinner at Mashobra, seven persons, Lord Mountbatten, Captain
Narendra Singh, The Lady Pamela, M. O. Mathai, Lady Mountbatten, Jawaharlal Nehru
and Captain Scott, sat around a circular table sipping coffee. Mountbatten talked about
the folly of believing rumors. He also said that truth can get distorted beyond
recognition if it passes through several mouths. He asked all of us to join him in playing
a sketching game which he called Dame Rumor. The figure to be sketched was that of a
woman sitting down and playing with her dog in front of a chair. Mountbatten would
start drawing one line at a time. This was supposed to be copied by the next person. The
third person was supposed to copy from the second and not to look at any other
person's sketch; and so it was to be until the last person around the table had finished
his sketch. Line after line was drawn at random, and copied strictly according to
instructions. I was the fourth person and my sketch turned out to be horrible; Lady
Mountbatten's looked like nothing on earth; and the last man, Scott's, was the horror of
horrors.
Before we retired, Mountbatten collected all the seven sketches and turned to me with a
smile and said, "I know you collect all kinds of important documents and manuscripts;
keep this junk also." These sketches have remained with me all these years.

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After being Viceroy and Governor-General of India, Mountbatten could have gone as
British Ambassador to Washington; but he preferred to return to the navy in October
1948, in command of a cruiser squadron in Malta, because he wanted to achieve his
lifelong ambition of becoming the navy's First Sea Lord, an office from which his father
was cruelly hounded out at the outbreak of the first world war by the hysterical public
outcry and the press because of his German origin. In Malta, Mountbatten, who as
Viceroy had ranked second only to the King Emperor, ranked thirteenth in Malta's
order of precedence.
Mountbatten achieved his ambition and more. On 18 April 1955 he became the First Sea
Lord with the rank of Admiral of the Fleet, and in 1958 he was promoted as Chief of the
Defence Staff. He retired from active service in 1965. Mountbatten had offers of Cabinet
ministership both from the Labour and Conservative governments in Britain. He once
told me that he never wanted to enter murky politics mostly because he disliked it but
partly because of his nearness to royalty.

Lady Mountbatten, the rich heiress, died in Borneo on 21 February 1960 and was buried
at sea, as she had willed, as a tribute to her husband's naval career. Appropriately
enough the Indian frigate Trishul escorted the British frigate Wakeful which carried her
body to the sea off Spithead.
Ever since they left this country on 21 June 1948, the Mountbattens remained genuine
friends of India.
Mountbatten has an almost insane desire to loom larger than life in history. He would
never write anything about himself; but would take infinite pains to encourage and
help others to write about him. And, of course, he lacks the detachment of an historian's
mind.
It will be a great day for Mountbatten, the genealogist, if he is alive to watch his
grandnephew, Prince Charles, ascending the British throne, when the name of the
House of Windsor will stand changed to the House of Mountbattens.

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8. Churchill, Nehru and India
Winston Churchill had two pronounced blind spots—India and the Suffragette
movement. Aneurin Bevan, the fiery Welshman, had this in mind when he flayed
Churchill once in parliament and called him a frozen adolescent.
When the first woman, Lady Astor, took her seat in the House of Commons, Churchill
had an uncomfortable and strange sensation. He told some of his friends, "I feel a
woman had invaded my bathroom where I found myself only with a sponge to defend
myself."
Churchill's India was the land he knew as a subaltern. He could not conceive of an India
without the British. In his speech in the House of Commons on 6 March 1947, during
the debate on "the question of transferring power in India to Indian hands," an agitated
and emotional Churchill, as the leader of the opposition, inter alia, said:
The third mistake was the dismissal of the eminent Indians composing the
Viceroy's Council, and handing over the Government of India to Mr. Nehru. The
government of Mr. Nehru has been a complete disaster, and a great degeneration
and demoralization in the already weakened departmental machinery of the
Government of India has followed from it. Between 30,000 and 40,000 people
have been slaughtered in warfare between the two principal religions.
Corruption is growing apace. They talk of giving India freedom, but freedom has
been restricted since the Nehru government has come to power. Communism is
growing so fast that it has been found necessary to raid and suppress
Communist centres, which, in our broad British tolerance, we do not do here and
have never done in India. The steps to freedom so far have been marked, by
every degree in which British control is relaxed, by restriction of the ordinary
individual, whatever his political views. It was a cardinal mistake to entrust the
government to Mr. Nehru. He has good reason to be the most-bitter enemy of
any connection between India and the British Commonwealth. Such was the
situation before the latest plunge which the government have taken. This plunge,
added to all that has gone before, makes it our duty to sever ourselves from the
Indian policy of the government and to disclaim all responsibility for the
consequences which will darken and redden the coming years. . . .
Everyone knows that the fourteen month's time limit is fatal to any ordinary
transference of power, and I am bound to say that the whole thing wears the
aspect of an attempt by the government to make use of brilliant war figures to
cover up a melancholy and disastrous transaction...

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In handing over the Government of India to the so-called political classes, you
are handing over to men of straw of whom in a few years no trace will remain.
A conference of Dominion Prime Ministers took place in London between 22 October
and 27 October 1948. British Prime Minister Clement Attlee presided. Until then it used
to be called the British Commonwealth Prime Ministers' Conference. At this conference
in October 1948, which was attended for the first time by the Prime Ministers of India,
Pakistan and Ceylon, the word British just dropped out without any legal step being
taken to effect the change. From then on it was just the Commonwealth Prime Ministers'
Conference. Also, many British non-official institutions dropped the word Empire
which was substituted by Commonwealth.
I was in London with Prime Minister Nehru in October 1948 for the Prime Ministers'
Conference. We were staying at the Claridges Hotel. One morning an agitated secretary
from India House, attached to our delegation office, came to me and said that the leader
of the opposition, Winston Churchill, was on the telephone and wished to speak to
Prime Minister Nehru. I took the telephone in the Prime Minister's sitting room.
Churchill started speaking as if to Nehru and I let him continue for a couple of minutes.
He was very polite, almost to the point of being humble, and pleaded that Nehru
should have lunch with him the next day and ended up by asking, "Won't you please
make it possible Mr. Nehru?" At that moment Nehru came in from his bath. I gave him
the telephone and told him briefly what had happened and added that he could easily
put off the rather unimportant lunch engagement the next day and accept Churchill's
invitation. Nehru spoke to him for a brief while over the telephone and accepted the
invitation. On his return from lunch the next day, Nehru told me that there was no
important talk. All that happened was that Churchill was trying to make up in his own
way.
Immediately after the coronation of Queen Elizabeth II, a conference of Commonwealth
Prime Ministers took place in London from 3 June to 9 June 1953. Winston Churchill, as
Prime Minister of Britain, presided. As usual I attended it. During my time these
conferences took place in the Cabinet room of 10 Downing Street. Now they are public
meetings in some public building.
As Churchill walked into the room, his presence was immediately felt in sharp contrast
to Clement Attlee. One sensed "here is a big man." He spoke with a lisp and a slight
stutter. Churchill could not achieve his ambition of becoming a great orator; but he
became a master of the written word and a coiner of phrases. Whenever he was pleased
with a phrase that he had coined, he liked to keep on repeating it. Churchill considered
Lloyd George and Aneurin Bevan, both Welshmen, as great orators; Stating that an
orator should be spontaneous, he once said, "When that fellow Bevan gets up, he does
not know what he is going to say and where he will end; but I have every word written

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out in front of me." But Churchill was not wholly free from plagiarism. Here are some
examples:
Referring to Hitler's threat that England's neck would be wrung like a chicken,
Churchill, in his famous speech to the Canadian parliament, used the phrase "some
chicken, some neck!" He was parodying Lawrence of Arabia.
Churchill's first speech in the House of Commons after becoming Prime Minister in
1940 contained the phrase "blood, toil, sweat and tears." This was lifted from Byron's
poem "The Age of Bronze."
"Hell knows no fury as a woman scorned." This is downright stealing of William
Congreve's couplet, "Heaven has no rage like love to hatred turned/Nor hell a fury like
a woman scorned."
Churchill's phrase "iron curtain" is not original. The words first appeared in Ethel
Snowden's Through Bolshevik Russia in 1920. Its wider application to countries within the
Soviet sphere of influence originated with Goebbel's leading article in the issue of the
weekly, Das Reich, dated 25 February 1945. In that he had said:
Should the German people lay down its arms, the agreement between Roosevelt,
Churchill and Stalin would allow the Soviets to occupy all Eastern and
Southeastern Europe together with the major part of the Reich. An iron curtain
would at once descend on this territory which, including the Soviet Union,
would be of enormous proportions.
Nehru has never been accused of plagiarism.
Churchill attached great importance to the correct use of words. Once, at the dinner
table, Churchill told his wife, "You ought not to say very delicious. 'Delicious' alone
expresses everything you wish to say. You would not say 'very unique'." In this
connection Lord Moran says that Churchill once thought of including the following in a
speech at a university:
A man called Thompson went to a surgeon and asked him to castrate him. The
surgeon demurred; but when the man persisted and argued, he eventually
agreed and took him into hospital. The morning after the operation Thompson
woke up in great discomfort. He noticed that the man in the next bed was in pain
and was groaning. He leaned towards him over the side of the bed. 'What did
they do to you' he asked. The man replied 'I have been circumcised'. 'Good Lord'
Thompson exclaimed, 'that is the word I couldn't remember when the surgeon
asked me what I wanted done'.

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One evening Churchill was sitting on his bed and shouting for his hotwater bottle. The
valet appeared. Churchill asked him where the hotwater bottle was. The valet replied,
"You are sitting on it Sir; not a good idea." Churchill smiled and replied, "It is not an
idea but a coincidence."
At one session of the conference of June 1953 Churchill became emotional about the
Indian army and used superlative language for it. "Any day a couple of divisions of the
Indian army for me, Mr. Nehru," he said.
The last session of the conference was, as usual, devoted to the finalization of the
communiqué. The Prime Ministers had before them a draft prepared by senior officials
of the delegations. It was fascinating to see Churchill and Nehru, two masters of the
correct use of words, in action. Whatever changes Nehru suggested were accepted by
Churchill by his murmurs of approval.
Outside the conference, Churchill went out of his way to humor Nehru. He was
instrumental in arranging a dinner for Harovians in honor of Nehru. Both Churchill and
Nehru were products of Harrow Public School.
One morning at 10 Downing Street, British Cabinet Secretary Lord Norman Brook took
me aside and told me that at a private function the previous evening a prominent
person spoke disparagingly of Nehru. Churchill at once rebuked him sharply, and said,
"Remember he is a man who has conquered fear and hate."
The day before our leaving London after the conclusion of the conference, Churchill
sent a brief handwritten letter to Nehru saying, "Remember what I told you—you are
the Light of Asia." What a transformation in Churchill!
On 3 February 1955 Lord Moran asked Churchill about Nehru. Churchill said, "I get on
well with him. I tell him he has a great role to play as leader of free Asia against
communism." Asked how Nehru took it, Churchill replied, "Oh, he wants to do it, and I
want him to do it. He has a feeling that communists are against him, and that is apt to
change people's opinion."
Contrary to the general impression, neither Churchill nor Nehru were widely-read men.
They wrote and spoke more than they read in their lives.
Churchill and Nehru shared a common allergy towards the American Secretary of State
John Foster Dulles. In private conversation Churchill called Dulles a "dull, clumsy
bastard" and hoped he would disappear. At another time he said of Dulles, "This fellow
preaches like a Methodist priest, and his bloody text is always that nothing can come
out of meeting with Malenkov." And at another time he observed, "Dulles is clever
enough to be stupid on a rather large scale." Nehru took delight in repeating "Dull,
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Duller, Dulles:" He once observed, "Krishna Menon is my answer to Dulles." This came
out of Nehru's abundant vanity. Nehru once told me that he knew he had an ample
measure of vanity, but that he was also capable of humility.
Very seldom did Nehru use swear words. I have heard him use "bloody" only once—
about a person whose identity I shall not disclose. But to Churchill this and other choice
epithets came naturally and prolifically.
Churchill was not given to self-criticism; neither was he vain. Nehru was given to selfcriticism; and he had self-confessed vanity.
Ever since he became Prime Minister during England's darkest hour in 1940, Churchill
never slept without the aid of sedatives. Until two years before his death, Nehru's was a
singularly unmedicated body.
Churchill was a great admirer of Napoleon. He kept in his bedroom at Chartwell two
small sculptured heads—one of Napoleon and the other of Nelson. One day, when Lord
Moran was looking at Napoleon's head, Churchill remarked, "Ah, what was the most
beautiful countenance from which genius ever looked upon mankind. He was a very
wonderful man. I put him after Julius Caesar. Yes, he is at the top." Nehru, in his
Glimpses of World History, has drawn a rather superficial picture of Napoleon about
whom. Lord Acton said in his Cambridge Lectures on Modern History, "No intellectual
exercise can be more invigorating than to watch the working of the mind of Napoleon,
the most entirely known as well as the ablest of historic men."
The introduction to the first of the two great works (written in 1890) that Count Albert
Vandal left announced the spirit in which he intended to approach Napoleon. The
subject was the relations between Napoleon and Alexander of Russia from 1807 to 1812,
that is, the foreign policy from the period of the greatest power to the beginning of the
disaster. For Vandal there was something fascinating and imposing about the gigantic
historical figure in itself. Something which silenced criticism. With Pozzo di Borgo, one
of the men who hated and admired Bonaparte most, he says that to "judge Napoleon
would be like judging the universe."
Vandal felt admiration "for the genius which carried out or inspired amazing deeds,
whose magical power raised to their highest pitch those qualities of honor, audacity,
obedience and dedication, which are peculiar to our people, for him who, having
reconciled our nation with itself, created from it an army of heroes, and for a time lifted
the Frenchman above mankind."
In August 1942, in Cairo, Field Marshal Smuts spoke to Churchill about Mahatma
Gandhi and said that "he is a man of God.

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You and I are mundane people. Gandhi has appealed to religious motives. You never
have. That is where you have failed." Churchill, with a broad grin, replied, "I have made
more bishops than anyone since St Augustine."
Nehru lacked the toughness of Churchill and Churchill-type courage in adversity. He
wilted in the wake of the Chinese attack on India. His health could not stand up to the
mental strain. Many things which he valued crashed around him. Finally his health
collapsed. The Chinese perfidy in returning evil for good hastened the death of the Man
of Peace.
The last of Churchill's great speeches in the House of Commons was on the hydrogen
bomb in February 1955, two months before his retirement. He wound up by saying, "All
the countries of the world might feel so vulnerable that, cowed by fear, they might at
last be content to live in peace. Then it may well be that by the process of sublime irony
they have reached a stage in this story that safety will be the sturdy child of terror, and
survival the twin brother of annihilation." Churchill took twenty hours on the
preparation of this speech and eight hours on checking facts.
Neither Churchill nor Nehru made use of ghost writers for their speeches as is the case
in present day India. Nehru was by no means an orator; but he made several moving
speeches, both extempore and written, whenever he was emotionally stirred.
After he suffered a stroke in 1953, when death seemed round the corner, Churchill
confided to his famous physician, Lord Moran, not, however, without many
qualifications, that he had been wrong about India. Lord Moran later commented, "But
the circumstances were exceptional, for the confessional was a sick bed." And yet the
last of the great imperialists had traversed a long way.
In this chapter I have drawn upon material contained in Lord Moran's bulky book on
Churchill.

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9. Nehru's Meeting with Bernard Shaw
It was at Ayot St Lawrence on Friday, 29 August 1949, when Shaw was ninety-three
years old. He died the following year. Earlier Shaw had insisted on sending his car. He
wrote to the Indian High Commission in London at the bottom of a printed sheet of
elaborate directions on how to get to his house at Ayot St Lawrence:
My car will be at Claridges on Friday at half past nine. It is a Rolls Royce
limousine and will hold three fat passengers or four slender ones. It will be at
your disposal all day, and can take you back to London or on to Romsey just as it
suits you.
There is only one taximan in London who knows the way. His telephone number is
5257. But this is only in case of accident.
I accompanied. Nehru on this trip. No one else was present. We travelled in Shaw's car.
Krishna Menon's Rolls Royce limousine followed, without any passengers in it, for our
return journey.
Shaw's residence was unpretentious but adequate. The meeting took place in his study.
Shaw looked healthy for a man of his age; and we were to discover during the course of
the meeting that his mind was alert.
During the meeting Nehru was unusually quiet and opened his mouth only once. The
conversation began with Shaw referring to his meeting with Gandhiji in London in the
early thirties. He said that Gandhiji sat on the floor, but gave him a chair. Shaw did not
go into the details of his talk with Gandhiji. When the interview with Gandhiji was
over, Shaw said that he was sent back home in a car driven by an impressive-looking
Indian chauffeur with a magnificent turban. On alighting from the car, Shaw gave the
chauffeur half a crown which the latter accepted with a smile and grace not normally
associated with chauffeurs. Then Shaw began to chuckle and said that he later
discovered that the chauffeur was in fact an Indian Maharaja! Shaw went on chuckling
for some time.
Referring to the Labour government, Shaw said it bad, on the whole, done well. He
described Attlee as a colourless person but a good committee chairman. Shaw had a
special good word for Stafford Cripps and referred to the latter's vegetarianism and
close association with Sidney and Beatrice Webb. Shaw said that Ernest Bevin was a
disaster as Foreign Secretary. According to Shaw, Bevin suffered from a total lack of the
sense of history. He was convinced that no trade union leader was fit to be Foreign
Secretary.
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He said that Bevin was a despot who often shouted Attlee down. Shaw expressed the
view that the only person eminently qualified to be the British Foreign Secretary was
Konni Zilliacus, an ultra leftist Labour MP, who was expelled from the Labour Party for
welcoming the communist takeover of Czechoslovakia.
Shaw dismissed the United States as supremely immature and, as such, dangerous. He
was of the firm view that the atom bomb would never be used again.
It was amusing to see Shaw rave against the government on income tax. This was
nothing new. Winston Churchill said of him, "Shaw has always preached the ownership
of all forms of wealth by the state; yet when the Lloyd George budget imposed for the
first time the slender beginnings of the super tax, no one made a louder squawk than
this already wealthy Fabian. He is at once an acquisitive capitalist and a sincere
communist." Shaw went on squawking about the income tax till the end of his days. He
also had a highly developed sense of business.
Shaw told Nehru that he sincerely felt that Nehru and Stalin were the only hope of the
world. He ridiculed the British local councils and said they were composed of duds.
Shaw declared with earnestness that the parliamentary system was unsuitable and
advised Nehru to "try the Soviet system which is a quicker system." He firmly said that
only ten per cent can govern. He laid tremendous emphasis on governing. At this stage
Nehru intervened and asked, "But, Mr. Shaw, who wants to govern?" Shaw's reply was,
"Whether you like it or not, you have to."
Shaw complained, "People call me mad; but the trouble is they do not listen to me."
Shaw related the story of an Indian, with a mouthful of a name (Professor Doraiswami
Aiyar), who sent him the manuscript of a collection of his poems in English, and asked
for his opinion. Shaw read the first page and came to the conclusion that the man not
only did not know how to write poetry, but also how to write correct English.
Nevertheless, Shaw sent him a postcard reading, "Have never seen anything like this
before." Shaw began to chuckle and said, "The fool published his poems and my
opinion." Shaw could not contain his laughter for some time.

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Finally Shaw referred to his week's stay in Bombay, but could not recollect the dates. He
said he was attracted to Jainism which, he thought, had much in common with
Quakerism.
It might be mentioned here that between the two world wars Shaw had been
advocating the abolition of parliamentary institutions and setting up dictatorships. In
this connection Winston Churchill called him "the double-headed chameleon."
Shaw at last turned to me and asked what book I would like to have as a present. I said
Dramatic Opinions and Essays. He scrutinized me and said the book was an old one and
out of print. He added, "If I have a library copy; I shall give it to you." He looked all
over and could not find one. Then he asked me, "Why do you want that particular
book?" I told him that when I was a college student, I moved a resolution in the College
Debating Society that "we have had enough of Shakespeare," and that I had used many
of the brilliant arguments in that book in support of my resolution. Shaw was all
attention and eagerly asked me, "What was the result?" I said, "The resolution was
thrown out; even the seconder of the resolution deserted me and voted against it." I
added that I was the only one who voted for it. Shaw chuckled. Then he selected the
book Major Critical Essays for me, autographed it and gave it to me. For Nehru he
selected the book, Sixteen Self-Sketches and autographed it. He wrote Nehru's first
name as "Jawaharlal." I at once pointed out the mistake to Shaw who contested what I
said. He turned round in his swivel-chair and brought out from his revolving bookcase
Nehru's autobiography. Shaw discovered his mistake, looked at me with a mischievous
smile and said, "Keep it like that; it sounds better!"
We then gave him some Chausa mangoes. Shaw was under the impression that it was
the nut which was to be eaten. At that time Shaw's housekeeper came in answer to the
bell. Nehru explained to both that what was to be eaten was the pulp covering the nut.
Nehru also explained how the mango was to be cut and eaten.
At this time we all rose and came out. Shaw posed for photographs with us.
So we said farewell to the one described by Winston Churchill as the saint, sage and
clown; venerable, profound and irrepressible; Bernard Shaw receives, if not the salutes,
at least the hand-clappings of a generation which honors him as another link in the
humanities of peoples, and as the greatest living master of letters in the Englishspeaking world.
We drove straight to Lord Mountbatten's house where Lady Mountbatten asked, "Did
either of you succeed in putting in a word edgeways?" I said I did.

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Bernard Shaw acquired the reputation of being a chatterbox rather early in life. The
only instance on record when vegetarian Shaw was left tongue-tied was when he
visited the laboratory of Sir Jagdish Chandra Bose in London at the turn of the century.
Shaw was deeply upset to find that a cabbage had violent convulsions as it boiled to
death. Shaw literally lost his power of speech and left with his head bowed low.
On my return to Claridges Hotel, I found the correspondent of a famous American
newspaper waiting for me. He requested me to give him an article on our meeting with
Bernard Shaw. The inducement was considerable. I gave him my excuses and offered to
give him free an article on the matriarchal system in Kerala. He was intrigued, stared at
me and left.

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10. C. Rajagopalacliari
I have also referred to Rajaji in the chapter "Rajendra Prasad and Radhakrishnan."
Endowed with a razor-sharp intellect and an analytical mind, Rajaji would peel an
onion layer after layer, to find out what an onion really was. He had the peculiar gift of
alienating people.
The man with the dark glasses would make most of his visitors feel that they were fools.
This did not help in acquiring and retaining popularity. But he was a man of rare moral
courage. He did not hesitate to part company from Gandhiji, to whom he was devoted
and bound by numerous ties. He was not afraid to espouse unpopular causes.
Sarojini Naidu, in a personal talk with me, once compared Rajaji and Nehru. She said
that "the Madras fox was a dry logical Adi Sankaracharya while Nehru was the noble
compassionate Buddha."
Indira once related to me what her grandfather, Motilal Nehru, said of Rajaji in private.
He said, "I cannot fathom what is happening behind those dark glasses. I once put a
poker into his head, and lo! it came out as a corkscrew." Incidentally, Rajaji never cared
for Indira. He once told me, "I have known that girl as a child in her mother's arms. She
has not grown since the age of two. She has nothing of the father in her."
Nehru included Rajaji in the interim government which assumed office on 2 September
1946 at the instance of Gandhiji, even though at that time Rajaji was particularly
unpopular with Congressmen.
When the dominion government came on 15 August 1947, Rajaji agreed to Nehru's
request to go to West Bengal as Governor, chiefly in view of the deteriorating
communal situation there.
After Rajaji's exit from the office of Governor-General, relations between Nehru and
Vallabhbhai Patel grew steadily strained. Nehru did not want the deterioration to go
further. He missed Gandhiji.
After considerable thought he sent a personal appeal to Rajaji to come to Delhi at once.
He came promptly and, after a personal talk with Nehru, agreed to join the Cabinet as
Minister without Portfolio. His principal function was to hold the peace between Nehru
and Patel. He was sworn in on 5 May 1950. After Patel's death, Rajaji succeeded him as
Home Minister.
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Once Nehru received a personal dispatch from K.M. Panikkar, who was our
Ambassador in China, complaining that a senior Press Trust of India correspondent was
sitting in Hong Kong and sending despatches to India datelined Peking. These
despatches were unfavourable to China, containing mostly rumors and gossip. At
Nehru's instance I sent for K. S. Ramachandran, head of the PTI in New Delhi, and
conveyed to him Nehru's disapproval of the unethical practice. He promised not to
release to the press any further dispatches from that correspondent who was
subsequently withdrawn from Hong Kong. Ramachandran then told me that Rajaji had
also sent for him in this connection and told him, "Look, this business of datelining
Peking while sitting in Hong Kong is a dangerous thing, because the Chinese will one
day produce these dispatches in international forums to prove that there is freedom of
the press in China. Kill all further dispatches from the correspondent." The differing
approaches of the two giants give an indication of their respective personalities. One
was a noble lion while the other was a wily fox.
Rajaji continued to be in government until a new government was formed in the middle
of 1952 after the first general elections.
Before he left Delhi I met Rajaji and had a talk with him. He told me that his plan was to
write about simple things, such as advice to cyclists and drivers, against spitting on
roads and public places, and the like. I smiled. Rajaji asked me, "Are you skeptical?" I
said, "Yes. I believe all politicians are like squirrels, and you are no exception." Then I
told him the Malayalam proverb: "No matter how old the squirrel is, it will never give
up climbing." He laughed.
After parting from Nehru, Rajaji developed hostility towards Nehru's policies.
Eventually he formed the Swatantra Party and embarked on a course of attacking
Nehru's policies relentlessly. He proved to be a real squirrel. When the Chinese
invasion of India took place, Rajaji said of Nehru, "He has made his bed and he must be
made to lie on it." Soon after, Rajaji came to Delhi and had a personal talk with Nehru
during which, surprisingly enough, he offered to join the Cabinet and help him. Not so
surprisingly, Nehru changed the subject by telling him, "You are already helping me a
great deal from outside." The old squirrel took the hint and left.

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11. The Position of the President of India
On 30 April 1977 Jayaprakash Narayan issued a statement on the hesitation of Acting
President B. D. Jatti, in spite of the Supreme Court's unanimous dismissal of the writ
petition of four state governments, in signing the proclamations dissolving the
assemblies of nine states in northern India where the Congress was practically wiped
out in the Lok Sabha elections of March 1977. In his statement Jayaprakash Narayan
said, "When President Rajendra Prasad raised some queries about the powers of the
President, they were referred by Mr. Nehru to jurists like Mr. M. C. Setalwad, the then
Attorney-General, and to Sir Alladi Krishnaswami Aiyar, both of whom opined that the
President must be guided by the advice of the Council of Ministers."
Nehru did nothing of the kind. The facts are as follows: Strangely enough Rajendra
Prasad, who had presided over the deliberations of the Constituent Assembly and was
aware of the trends in that august House, developed some doubts, while sitting in
Rashtrapati Bhawan, about the powers and functions of the President. This was in spite
of Nehru and Ambedkar having made it abundantly clear in the Constituent Assembly
that under the Constitution the President would function purely as a constitutional
head acting on the advice of the Cabinet.
Rajendra Prasad informally sent for all the judges of the Supreme Court individually
and asked for their opinion. They conveyed to him their initial reaction; but they
declined to give him anything in writing. They told him that they would express their
considered opinion only if the President formally referred the matter to the Supreme
court for advice. Rajendra Prasad did not want to do so because any such reference
could only be made on the advice of the Prime Minister and his Cabinet. The President's
Military Secretary Major-General B. Chatterjee, who was more political than military,
kept me informed of the developments privately.
Then Rajendra Prasad sent for the then Attorney-General M. C. Setalvad, who later
gave him a note. A copy of this note was forwarded to me privately by General.
Chatterjee. Setalvad had clearly stated in his note that the President did not have an
existence independent of the Prime Minister and his Cabinet. In simple terms he
virtually told Rajendra Prasad that wherever the term President occurred in the
Constitution, he might as well substitute it with the term Prime Minister. I placed before
Nehru the copy of Setalvad's opinion and gave him a brief account of what had been
going on in Rashtrapati Bhawan. Nehru read Setalvad's opinion and gave it back to me
with a smile. He was more amused than annoyed. Nehru was so sure of the
constitutional position and his own personal position and prestige in the country that
he chose to ignore Rajendra Prasad's aberrations.

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There was no need for some newspapers to attack Jatti. He was perfectly within his
rights to ask the Cabinet to reconsider the decision.
The framers of the Constitution were content with a simple statement, "There shall be a
Council of Ministers, with the Prime Minister at the head, to aid and advise the
President." Nehru, with his commanding position and personality, gave content to this
during his long period of seventeen years as Prime Minister and, in the process,
established healthy democratic conventions.
In several judgments from 1955 onwards the Supreme Court had very clearly stated the
legal position on the subject of the powers of the President in relation to the Prime
Minister and his Council of Ministers.
The much criticized 42nd Constitutional Amendment clause adding, "The President
shall, in the exercise of his functions, act in accordance with such advice" was perhaps
unnecessary though harmless. If a President is overburdened with conscience, it is
always open to him to resign.
The position of the President of India is exactly the same as that of the President of the
Fourth Republic of France before the advent of De Gaulle and the establishment of the
Fifth Republic.
Noted British historian Sir Henry Maine wrote, "The old Kings of France reigned and
governed; the King of England reigns but does not govern; the President of the United
States governs but does not reign. It has been reserved for the President of the French
Republic neither to reign nor to govern."
Clemenceau, who was French Prime Minister during the closing stages of the first
world war, once declared "that there were two things for which he could never find any
reason—the prostate gland and the French presidency.
Abbe Lantaigne, more devastating in his characterizations, once dismissed the
presidency from his writings as "an office with the sole virtue of impotence." "Its
incumbent," he said, "must neither act nor think; if he does either he stands to lose his
throne."
Yet the fact remains that the President of the Republic is the supreme representative of
the executive power of France. He is the head of state and holds the highest political
honour that a nation can bestow. He sits on the thrones of the Bourbons and the
Bonapartes. He is the titular Commander-in-Chief of the armed forces on land, at sea,
and in the air. He is the first citizen of the republic. It is true that the office does not
carry powers commensurate with its dignity, but it is nonetheless a post which the most
eminent statesmen of France have sought.
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12. Rajendra Prasad and Radhakrishnan
When the interim government was formed on 2 September 1946, Nehru included
Rajendra Prasad on the Council as Member in charge of Food and Agriculture. He was
more interested in developing pinjarapoles (cow ashrams) than in the development of
food production.
Later in the year, in consultation with Gandhiji and Sardar Patel, Nehru, as Congress
President, decided to elevate Rajendra Prasad as President of the Constituent Assembly
which was to meet on 9 December 1947. Nehru made it known to Rajendra Prasad,
whom he called Rajendra Babu, that well before his election as President of the
Constituent Assembly he should resign from government because Nehru felt that the
President of a sovereign body like the Constituent Assembly should not be a person
holding a post subordinate to him in government. But Rajendra Prasad resisted.
Ultimately Gandhiji intervened. He sent for Rajendra Prasad and spoke to him bluntly
in the presence of one of his secretaries, Rajkumari Amrit Kaur. Gandhiji told him, "I
had thought that you learned something from me. I was mistaken. You have no right to
hold the two offices. In fact you should give up everything and join me." Soon after,
Rajendra Prasad sent in a letter of resignation to Nehru couched in such language as to
give the impression that it was a spontaneously voluntary act.
Before the republic came into existence, Rajaji was sitting on the throne of the GovernorGeneral of India, once occupied by Warren Hastings, Ripon, Curzon and a host of
others. He conducted himself with great dignity and simplicity, and foreigners,
particularly the diplomatic corps, were impressed by him. Nehru wanted Rajaji to be
the first President. He was anxious to establish a convention that normally, if the Prime
Minister was from north India the President should be from the south, and vice-versa.
In fact, Nehru impulsively offered the presidency to Rajaji. Nehru did not like the idea
of Rajendra Prasad as President because he was very conservative, traditionalist and
somewhat obscurantist. He tried to dissuade Rajendra Prasad by offering him the
offices of a Cabinet Minister and chairmanship of the Planning Commission. Rajendra
Prasad was not interested in the offer. Nehru soon discovered that the bulk of Congress
MPs were opposed to Rajaji. Sardar Patel appeared neutral though his preference was
known. It was not for 'Rajaji.' If Nehru had stood firm, Rajaji would have been elected;
but Nehru disliked taking any important issue to the breaking point. So, ultimately he
beat a retreat, leaving Rajaji with an aggrieved feeling of having been let down.

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Thus Rajendra Prasad became the first President of the Republic on 26 January 1950.
Alas, the first act of the first President of the Republic was the shifting of all Muslim
servants from his wing in Rashtrapati Bhawan. Nehru was annoyed. He asked me to get
all these Muslims transferred to the government hospitality organization in exchange
for Hindu servants. The displaced Muslim servants were detailed to duty in the Prime
Minister's house even though the security authorities were unhappy about it.

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Another thing which annoyed Nehru was Rajendra Prasad's pilgrimage to Kashi to
wash the feet of sadhus. Feet-touching then onwards became sanctified. If Nehru hated
anything, it was feet-touching.
Yet another thing which made Nehru unhappy was Rajendra Prasad's visit to Somnath
to instal the Shivalingam in the newly built temple on the site of the famous one which
Moslem invaders had destroyed. Nehru had information that the Food and Agriculture
Minister K. M. Munshi, with the connivance of Sardar Patel, had raised the sugar price
and let the mill owners keep half of the price-rise and give the rest for the construction
of the Somnath temple. The Sugar Mill Owners Association was only too happy to
perpetrate this fraud on the people. This information came to Nehru at a rather late
stage when it was not possible to retrieve the situation.
The President, under the transitional provisions of the Constitution, inherited all the
financial allotments enjoyed by the Viceroy, including the very substantial
entertainment allowance. Successive Presidents have resisted all attempts by parliament
to legislate for the emoluments and perquisites of the President. After about five years
in office by Rajendra Prasad, the Military Secretary to the President sent me a private
note, to say that Rajendra Prasad had not spent more than Rs. 225 per month on
entertainment and that the rest of the grant was drawn by Rajendra Prasad and
invested in small savings in the names of his numerous grandchildren. I showed the
note to the Prime Minister who incautiously mentioned it at an informal meeting of the
Congress Working Committee. Jagjivan Ram reported the matter to Rajendra Prasad
who got very annoyed with me.
Soon after T. T. Krishnamachari's budget imposed wealth tax, expenditure tax and gift
tax, Rajendra Prasad complained to Nehru about how all these would affect him
personally. Nehru then asked him, in a letter in reply, whether the unused part of his
entertainment allowance was surrendered to government. This silenced Rajendra
Prasad, and he could no longer swell the coffers of his grandchildren.
Early in 1957 Nehru impulsively offered the presidency to the then Vice-President
Radhakrishnan. Nehru thought that after seven years in office and at his advanced age,
Rajendra Prasad would wish to retire. Rajendra Prasad, however, had other ideas. He
was a candidate for re-election for another term of five years. Nehru soon discovered
that Pandit Govind Ballabh Pant and most of the provincial Congress leaders, including
Kamaraj Nadar, were in favour of Rajendra Prasad's re-election. Again, Nehru, the true
democrat, retreated as he was loath to push anything to breaking point. This made
Radhakrishnan sour. He did not want to continue as Vice-President. Maulana Abul
Kalam Azad ultimately persuaded him to stay on. As a sop to Radhakrishnan, Nehru
changed the order in the Warrant of Precedence to make the Vice-President number
two. Until then the Vice-President ranked third, after the Prime Minister. Nehru also
made the Vice-President entitled to use Indian Air Force VIP aircraft to travel in India.
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Radhakrishnan was mollified. Nehru asked Radhakrishnan to lead the Indian
delegation to UNESCO, and also encouraged him to take increasing interest in the
activities of that body. He also arranged for Radhakrishnan to go on goodwill visits to
foreign countries.
At one time Nehru suggested to Rajendra Prasad that he might let Radhakrishnan
perform some of his ceremonial functions. Rajendra Prasad pointed out that, while he
held Radhakrishnan in great esteem and would gladly entrust him with some of his
functions, the Constitution did not provide for such a course of action. Rajendra Prasad
was right.
At the time of the debate in parliament on the Hindu Code Bill, Rajendra Prasad made
it known to MPs that he was personally against it. At this time Rajendra Prasad spoke
to Nehru and told him that, according to the Constitution, the President was part of
parliament and that he would like to be in the President's Box in parliament whenever
he wished to do so. Nehru firmly put his foot down and told Rajendra Prasad that his
being part of parliament only meant that he had to address the joint sessions of both
Houses once a year; and that the President's Box in parliament was only a courtesy to
accommodate distinguished foreign dignitaries and other guests of the President.
Nehru, however, compromised by facilitating the installation of contraptions through
which the President, from his study in Rashtrapati Bhawan, could listen to the
proceedings in both Houses of parliament. Such contraptions were also installed for
Nehru and myself in our offices in Parliament House.
The relationship between the first President and the first Prime Minister was formal.
The Prime Minister had a weekly meeting with the President to fulfill the constitutional
requirement of keeping the President informed of developments in the government and
the country. There was no personal warmth for each other. They were poles apart in
their outlook. Rajendra Prasad was somewhat overwhelmed by Nehru's personality.
However, Nehru did not fail to show the President all due courtesies; and he was
deferential to the President in public.
When Radhakrishnan became President, his relations with Nehru were warm and
cordial. Radhakrishnan, with his informal ways, was able to influence Nehru to a fair
extent. But it must be said that during the period 1962-64 Nehru was a declining man
and afflicted by ill-health.
Nehru once told me that, during the period Radhakrislanan. was Indian Ambassador to
the Soviet Union, at his first meeting with Marshal Joseph Stalin, he behaved in the
most informal manner by greeting Stalin with, "Hullo. How are you?" and patted him
on the back. Radhakrishnan did almost the same thing to Queen Elizabeth.

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Philosopher, orator and phrase-maker, Radhakrishnan was indisputably the best
President India has had so far, representing the best traditions and culture of this
ancient land.
The embarrassingly-named Fakhruddin Ali Ahmed was the poorest specimen. By
signing the Proclamation of Internal Emergency in June 1975 without Cabinet approval,
he amply qualified himself for impeachment. However, it must be said to his credit that
he knew when to die.

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13. The Prime Minister and his Secretariat
The Prime Minister's secretariat in India was constituted on an ad hoc basis on 15
August 1947, with H.V.R. Iyengar, a senior ICS officer, as the Principal Private
Secretary. During his brief tenure Iyengar was a somewhat overpowering personality.
There was no doubt about his competence. Somehow he earned the displeasure of
Sardar Patel, Shanmukham Chetty and John Matthai. They all took exception to Iyengar
attending Cabinet meetings. Eventually Sardar Patel adopted the practice of kicking
people upstairs. He requested Nehru to release Iyengar for appointment as Home
Secretary. This was agreed to. In the Prime Minister's secretariat he was replaced by A.
V. Pai, also a senior ICS officer. Pai was the mildest of men, a very fair-minded person,
and a perfect gentleman. He was the best PPS Nehru had. Since the exit of Iyengar, no
PPS has attended Cabinet meetings.
In 1948, while we were in London, Nehru requested Attlee to give me facilities to study
the position of the Prime Minister in the Cabinet system and the constitution and
functioning of his secretariat. Attlee asked his Cabinet Secretary Lord Norman Brook
and Treasury Secretary Lord Edward Bridges, formerly Cabinet Secretary during
wartime under Winston Churchill, to receive me and provide me with the necessary
facilities. I met both of them and had useful discussions with them. Lord Norman Brook
also prepared a note for me.
In the United Kingdom the Prime Minister has no statutory powers, his powers derive
primarily from the fact that he is normally the leader of the political party with a
majority in the House of Commons, and that as such he has been asked by the
sovereign to be head of the government. The extent to which the powers latent in this
position are made real depends on two things: (i) The personal influence of the Prime
Minister over the ministers who make up the government. The Prime Minister, if he
wishes, selects his own ministers. He can do so without consultation, although normally
he would consult his senior colleagues. Equally, he has the power to recommend their
replacement or dismissal, and he can, by his own resignation, bring about the
resignation of the whole government; (ii) The Prime Minister's chairmanship of the
Cabinet and some of its important committees, particularly the Defence Committee.
The Prime Minister is also the First Lord of the Treasury. This department has
substantial statutory and other powers, but day to day work is under the charge of the
Chancellor of the Exchequer and the Prime Minister is not directly concerned.
Nevertheless the Prime Minister does derive one important power from his position as
First Lord, namely, his ultimate power of control of the civil service: The Prime
Minister's authority is required for major appointments in the civil service, and this is
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an important factor in maintaining the unity of the service as a whole. The Chancellor of
the Exchequer is obliged to seek the approval of the Prime Minister in advance for the
budget as a whole, more especially for the taxation proposals.
The Prime Minister does not normally take charge of any department. But in the
spheres of foreign affairs and defence the Prime Minister has a special position. The
relationship between the Prime Minister and his Foreign Secretary is probably closer
than that between the Prime Minister and any other minister. Matters of political
importance are of more frequent occurrence in the sphere of work of the Foreign
Secretary than perhaps of any other departmental minister. All these matters cannot be
brought to the Cabinet, and for this reason the Prime Minister must keep in close touch
with foreign affairs. Normally, when the Foreign Secretary is away, his duties are
undertaken by the Prime Minister. In the sphere of defence, the Prime Minister retains
the supreme responsibility and is Chairman of the Defence Committee. The supreme
responsibility is not affected by the appointment of a Defence Minister.
Since the Prime Minister has no statutory powers and no department, he has no need
for a large staff; to a considerable extent he draws his advice and assistance from all
departments. He has, on the one hand, in the transaction of official business, the advice
of the Secretary of the Treasury, and, on the other, in the conduct of Cabinet affairs, that
of the Cabinet Secretary.
In keeping with the collective responsibility of the Cabinet, the Prime Minister's
secretariat is not classified as a department but as a personal secretariat. The staff of the
Prime Minister's secretariat are not responsible for advising on policy or for executing
the Prime Minister's decisions on policy. They are only gatherers and conveyors and, in
short, mechanics men.
The advice which comes to the Prime Minister from departments should always have
the authority of the departmental minister.
The Prime Minister's secretariat at 10 Downing Street is a small, compact body,
particularly competent at the lower echelons. As the whole burden of government in
principle rests on the Prime Minister, he can have, as a matter of established practice,
any type and any number of people to assist him in the discharge of his functions.
Financial and administrative sanction for the Prime Minister's staff is automatic,
provided that such demand for staff has the personal approval of the Prime Minister.
Even the Cabinet secretariat in the United Kingdom does not have any statutory powers
or executive responsibilities.
Attlee's secretariat consisted of one Principal Private Secretary in the grade of Assistant
Secretary (equivalent of a senior Deputy Secretary in Delhi), four Private Secretaries in
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the grade of principal (equivalent of an Under Secretary in Delhi), one Parliamentary
Private Secretary, one Public Relations Officer and a complement of fifty stenographic
and clerical personnel of various grades. Work is clearly defined among the Private
Secretaries including the Principal Private Secretary. The designation of Principal
Private Secretary does not have much significance as each one is independent of the
others and deals with a particular aspect of the Prime Minister's work and deals directly
with the Prime Minister.
Some Prime Ministers have included in their personal staffs, in addition to their Private
Secretaries, one or more Personal Assistants chosen for their expert knowledge in a
particular field in which they can give special help to the Prime Minister. During
wartime, Churchill had Oxford Physics Professor Lindemann. Later he became Lord
Cherwell and was appointed a Cabinet Minister. Attlee's Personal Assistant Douglas
Jay also became a minister eventually. So did Lord Balog who was Wilson's Personal
Assistant.
I had two meetings with Phillip Jorden, Attlee's PRO. I was struck by him. He was for
several years a senior foreign correspondent of the London News Chronicle. Prior to
joining Attlee he was a senior First Secretary of the British Embassy in Washington. I
was told that he was a very respected man among journalists in London.
In the United Kingdom there is a Central Office of Information under the Lord
President of the Council. This is an operating department for all ministries. It is not an
initiating department.
Every ministry in the United Kingdom has its own Public Relations Officers. These
PROs function independently of the Central Office of Information, though they make
use of it. The Prime Minister's PRO is the senior most in the whole government. He
deals directly with the Prime Minister. He is concerned only with the Prime Minister
and the general policies of the government as a whole. He has access to all secret papers
that come to the Prime Minister's secretariat. Cabinet agenda and Cabinet minutes come
to him automatically. He is also furnished with Cabinet committee papers. There is only
one exception in so far as the PRO is concerned. He does not normally see defence
papers.
The Prime Minister in the United Kingdom does not normally see newspapermen. The
PRO is meant to "sell" the Prime Minister and his policies to the press at home and
abroad. When parliament is in session, he has two daily conferences with lobby
correspondents, who number about fifty. The Prime Minister and the Foreign Secretary
in the United Kingdom do not, as a matter of practice, meet lobby correspondents. All
other departmental ministers meet lobby correspondents at informal conferences and
give them advance explanations of forthcoming Bills in parliament.

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The PRO also sees American radio commentators once a week; American
correspondents once a week; some selected correspondents, including those of the BBC,
once a week; Commonwealth correspondents once a month; and the Foreign
Association once a month.
He also sits on several official committees like the Home Information Committee,
Ministerial Committee of Information and the Economic Information Committee.
The Prime Minister allows his PRO a great deal of discretion and freedom in giving out
news to pressmen. On the whole the PROs dealings with the press are off the record
and are never quoted.
The PRO is a heavily-worked man and is recognized as such; but the Prime Minister has
refused to give him an understudy as an addition of one more person means a wider
circulation of secret papers.
The British Prime Minister's PRO is called a man with a key in his hand because he is
particularly required to keep all papers in a specially designed box before him and to
keep the key himself. I could not find a single piece of paper on his desk on both
occasions that I met him; and sure enough he was playing with the key in his hand.
Prime Minister Nehru's secretariat was gradually reorganized according to the British
pattern. Eventually, the post of Principal Private Secretary was reduced to Joint
Secretary without loss of efficiency.
When Lal Bahadur became Prime Minister he wanted L. K. Jha as his Principal Private
Secretary. Jha stipulated that the secretariat should be designated as a department like
any other ministry, he should be Secretary to the Prime Minister and not PPS, and that
his position in the Warrant of Precedence should be the same as that of the Cabinet
Secretary. Without examining these demands properly, Lal Bahadur meekly agreed. Jha
let Parkinson's law rule the roost. He embarked on an expansion programme. A
Secretary is normally uncomfortable if he does not have some Joint Secretaries; and a
Joint Secretary will wail if he does not have some Deputy Secretaries, and so on down
the line. Then came Indira who completed the process. In 1958-59 the Prime Minister's
secretarial staff consisted of 129 persons of all categories, including chaprasis (peons);
and the budget (actuals) was Rs. 675,000, while in 1976-77 the staff numbered 242 and
the budget increased to Rs 3.07 million.
In 1950 I wanted to create a post of PRO in the Prime Minister's secretariat and provide
him with the status and facilities enjoyed by the British Prime Minister's PRO. The
Cabinet Secretary and the Secretary-General of the External Affairs Ministry got scent of
my proposal. They pleaded with me and said it was dangerous to let a journalist see
secret papers. I did not agree with them; but I gave up the idea because I was not sure if
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Nehru would make full use of the PRO. In fact, Nehru was his own PRO and needed no
image builder.
I once told Nehru that the press conference was an American invention to provide a
forum for the President. The Prime Minister in a parliamentary system has parliament
as his forum where he can talk his head off. Neither Churchill nor Attlee held press
conferences. I suggested to Nehru that he might consider giving up the practice. While
he agreed with me, his vanity prevented him from accepting the suggestion. He liked to
show off. I have no doubt that some of his statements and off the cuff pronouncements
at some press conferences did more harm than good.
The present Prime Minister will do well to give up all departmental work. He will be
well advised to create a new Ministry of Science and Technology and place the
Departments of Atomic Energy, Electronics, Space Research, and the Council of
Scientific and Industrial Research in it and find a man with a modern mind to be the
minister.
Only a Prime Minister who is an intellectual eunuch or obsessed with status symbols, or
a dilapidated old man will require a senior civil servant to head a personal secretariat
which in any case should be small.

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14. The Prime Minister's House
When Jawaharlal Nehru accepted office in the interim government on 2 September 1946
he was allotted a four bedroom compact house at 17 York Road. He was happy with
that house.
During the pre-partition and post-partition period the situation was abnormal. The
threat to Nehru's life was real. Sardar Vallabhbhai Patel was a worried man. He spoke
to me about the inherent danger and wanted to strengthen police security, however
cumbersome and irritating it may be. He wanted me to do whatever was possible to
soften Nehru. Soon the grounds of 17 York Road became a sea of police tents.
When Nehru became Prime Minister, security arrangements were further tightened.
Police tents also sprang up outside on the road. The whole place became a grotesque
police camp. To me it became obvious that Nehru should shift from 17 York Road. In
the spring of 1948, with the concurrence of Sardar Patel, I got in touch with Lord
Mountbatten and discussed the matter with him. He told me that the solution lay in
Nehru moving into the Commander-in-Chief's house where security arrangements
would not look so provocative. I requested him not to broach the subject with Nehru,
but to leave the matter to me. I added that in a matter like this, the best procedure was
to create a situation in which Nehru would have no choice. He agreed.
I reported back to Sardar Patel and requested him to speak to Nehru. Sardar Patel
walked into Nehru's house one morning the lived next door) and had a talk with him.
He appealed to the PM to shift to the C-in-C's house. He told Nehru that he was already
weighed down with deep sorrow at his failure to protect Gandhiji. He made it clear to
Nehru that he was not prepared to take the responsibility for his safety. There was a
veiled threat also—that he would resign if Nehru did not comply.
On walking back to his house, Sardar Patel beckoned to me. I walked with him. He told
me, "Jawaharlal kept quiet and his facial expressions showed he did not like to shift; but
we must take his silence as consent. You go ahead and work out the details with
Mountbatten."
In consultation with me, Mountbatten drew up a note for the Cabinet for the
redesignation of the C-in-C's house as the Prime Minister's house and for the setting up
of the government hospitality organization in the PM's house along the lines of
Government House. This became a necessity particularly because Indira was feckless in
running a household. She did not even know how to boil an egg. What is worse, she
couldn't care less. According to the arrangement worked out, the Prime Minister was to
pay for himself, his family and personal guests on the basis of actual expenditure. On
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my advice, Mountbatten took the unusual step of circumventing the Prime Minister and
sending the note directly to the Cabinet Secretary directing him to circulate it to all
Cabinet Ministers, including the Prime Minister, without the prior approval of the PM,
for discussion at a meeting to be notified later. When he got the papers in circulation,
Nehru asked me, "Were you also behind this without telling me anything about it?" I
said, "Yes, 95 percent." He smiled.
The matter came up before the Cabinet at its meeting on June 1948 at 10 A.M. Nehru
kept quiet. That meeting was virtually conducted by Sardar Patel. The Cabinet accepted
the proposals contained in Mountbatten's note.
Nehru was not at all happy about shifting to a big house. After he actually shifted, he
refused to draw the tax-free entertainment allowance of Rs. 500 per month to which he
and the Cabinet Ministers were entitled.
Some of the prominent Cabinet Ministers, particularly N. Gopalaswami Ayyangar,
suggested that, as in the United Kingdom, the PM's salary should be double that of
other Cabinet Ministers. But Nehru refused to entertain the suggestion. He also turned
down the suggestion that, as in the UK, an Act should be passed in parliament
providing for a substantial pension and other facilities and perquisites to the PM on
retirement. I am afraid Nehru was subjective in these matters. He thought of only
himself. His magnificent pride rebelled. He was confident of making a comfortable
living by his facile pen. He told me so. I told Nehru that in the interest of a poor man
who might succeed him as PM, he should let parliament enact such a measure and that
he personally need not avail himself of the facilities. But he remained too subjective in
regard to this matter. In this connection I must say that Nehru was one of the most
inexpensive persons in so far as personal requirements were concerned. It is open to the
present parliament to enact a suitable measure to provide for a retiring PM.
The existing Act provides for a salary of Rs 3,000 per month for a Cabinet Minister and
an entertainment allowance of Rs 500 per month. In Nehru's time he and the ministers
voluntarily effected a cut and brought down the salary first to Rs. 2,250 per month and
then to Rs 2,000 per month. Since then the value of the rupee has come down to 25
paise. There is a strong case for not only restoring the cuts but also enhancing the
emoluments of ministers. To quote Gandhiji in this connection is sheer doublethink.
Ministers and civil servants should be adequately paid to keep them above want and
free them from temptations. The people of India will not grudge it.
It was a mistake to have converted the Prime Minister's house (now called Teen Murti
House) to Jawaharlal Nehru Museum. Thirteen years have passed since the conversion
and people have got used to it as a memorial to Nehru. It will be another mistake to
reconvert it into the Prime Minister's house. Prime Minister Morarji has assured me that

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he has no desire to move into Teen Murti House because it will offend the sentiments of
millions of people. Even now an average of 1,000 people visit the Nehru Museum daily.
The now Works and Housing Minister Sikander Bahld has been saying profound things
about a mansion for the Prime Minister. I am afraid he lives in a bygone age.
At 10 Downing Street, the British Prime Minister has only a couple of suites of rooms
for his personal use. All the rest are offices and a few are public rooms.
Tage Erlander, the Social Democratic Prime Minister of affluent Sweden, for twenty
years lived in a three room fiat. His wife was a teacher. I happened to known them
both. The Swedish Government did not provide him with a car. The PM and his wife
had a small car which they drove themselves. They could not afford to keep a driver.
Labour Prime Minister Joseph Chiefley of rich Australia lived in two rooms in a second
class hotel near his office. His wife preferred to live on their farm as she did not wish to
get involved in the social whirl of Canberra. The PM was not provided with a car. He
walked between his hotel and his office. I met him more than once in London. He was a
most lovable and humble man.
People like Sikander Bahkt are victims of outmoded ideas of oriental splendour.

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15. Use of Air Force Aircraft by the Prime Minister
In the middle of 1951 the Director of the Intelligence Bureau came to see me and
expressed his concern for the security of the Prime Minister during the campaign in the
winter for the first general, elections. He said that the threat to Nehru's life was very
much there. He said he would be unhappy if the Prime Minister travelled in regular
commercial flights. Anyhow, commercial air service was in a rudimentary stage at that
time. The Intelligence Bureau chief asked me, "Can't anything be done to enable the
Prime Minister to travel in IAF planes on payment?" I promised to consult some people
and try to process the matter.
Later I had a talk with Cabinet Secretary N. R. Pillai. He suggested a three-man
committee of senior officials to, go into the question of the Prime Minister using IAF
planes for purposes other than official. I spoke to the Prime Minister and he appointed a
committee with Cabinet Secretary N. R. Pillai as Chairman, the Defence Secretary as
Member and Tarlok Singh, ICS, as Member-Secretary. In the report the committee
emphasized the security aspect and also the fact that the Prime Minister does not cease
to be PM when he goes on unofficial tours. He can do a great deal of official work in the
plane and also at nights wherever he stays. The committee recommended that the Prime
Minister might use IAF planes for his unofficial tours by paying the government for
himself and non-officials air fare as charged by commercial flights plus halting charges.
Official staff and the personal valet travelling with the PM did not have to pay.
The PM asked the Cabinet Secretary to circulate the report to members of the Cabinet
for discussion in Cabinet and final decision. I told Nehru that a recommendation by a
committee of officials subordinate to him, and a decision thereon by the Cabinet which
was his creation were not enough to fulfill the requirements of propriety in a matter like
this. He was somewhat annoyed and asked me what else was to be done. I said the
meter should be referred to an authority independent of the government, such as the
Comptroller and Auditor-General. I added that it was in his personal interest to do so. I
also told him that he need not himself do it and that I would personally deal with
Narahari Rao who was then the Auditor-General. He told me coldly, "Do what you
like." Thereafter I requested the Cabinet Secretary not to fix any date for the discussion
of his report until I cleared the matter.
In the meantime, I had a personal talk with the Auditor-General and gave him all the
papers. He said he would study the file and walk over to my office and see me. He
came a couple of days later and told me that the argument of the PM's personal security
under the still rather abnormal conditions was the only one be would go by in writing
his note on the Cabinet Secretary's report. I said, "You should feel free to write anything
you consider proper." Two days later he wrote his note on the file and returned it to me.
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He accepted the recommendations contained in the Cabinet Secretary's note with a
significant rider, "This concession is personal to Shri Jawaharlal Nehru and should not
be quoted as a precedent." The Auditor-General's note was also circulated to the
members of the Cabinet. Subsequently the Cabinet took a decision in the matter. The
Auditor-General's note was later released to the press.

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In 1951 the IAF VIP flight consisted of only a few Dakotas. Much later came the fourengine turbo-prop medium-sized British Viscounts.
In the 1951-52 general election campaign, Nehru did 18,348 miles by air, 5,682 miles by
car, 1,612 miles by train and 90 miles by boat. He made 305 speeches to an estimated
total audience of 30 million people apart from reaching infinitely more millions by
newspapers and radio. He spent 46 days on these tours.
The Indian Post and Telegraph Department made special arrangements to deliver to the
Prime Minister by bag official files and papers daily and to return to Delhi by bag the
files and papers the Prime Minister had disposed of the previous day. These
arrangements worked exceedingly well.
In so far as I know, the successive Prime Ministers after Nehru never cared to seek fresh
concurrence from the Auditor-General for their use of IAF planes for unofficial tours.
Perhaps they knew that the Auditor-General would not agree. Therefore, their use of
IAF planes for unofficial tours was improper.
For his foreign tours Nehru normally used Air India's commercial flights. I can recollect
only two occasions when he used the IAF Viscounts. One was when he had to visit a
chain of countries—Syria, the Federal Republic of Germany, Denmark, Sweden,
Finland, Norway, England, Egypt and Sudan. The other was when he visited Saudi
Arabia accompanied by a delegation of MPs. On both occasions the Air Chief requested
me to let the IAF fly the Prime Minister so that his handpicked pilots would get some
valuable experience.

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16. Rafi Ahmed Kidwai
If ever there lived a man in India who was absolutely and totally secular, it was Rafi as
he was affectionately called by many. He shared this quality with the Nehrus and
Saprus. Rafi was secretary to the legendary Motilal Nehru for some years. Of the two
men Jawaharlal Nehru loved, apart from his father and Gandhiji, Rafi was one; the
other was A.C.N. Nambiar, the revolutionary, brother-in-law of the famous Chatto and
of Sarojini Naidu, a hesitant associate of Subhas Chandra Bose in Europe during a part
of the second world war and, after independence, Ambassador of India in several
European countries. Nehru would often get angry with both and shout at them. That
was an indication of his personal affection for them. Early in 1964, while A. C. N.
Nambiar (Nanu as Nehru called him) was staying in the Prime Minister's house, as he
always did whenever he was in India during Nehru's lifetime, he told Nehru at the
breakfast table, "I feel sad about one thing—you have not got angry with me this time."
Nehru laughed. He was then an ill man. Before Nanu left for Europe he told me, with
tears in his eyes, "Panditji will not live for long. I shall not see him again," and he wept.
Rafi was a simple man, informal in his ways. He had a large number of men who were
devoted and loyal to him. In Delhi they were called "Ruffians." Rafi kept an open house
where his followers and other Congress workers could go and partake of his generous
hospitality. For this purpose he did not mind taking money from medium-sized
industrialists and traders. He avoided big business magnates. Apart from money, he
used to take from them presents such as watches, fountain pens, pieces of woollen
material and the like and distribute them to his "Ruffians," of whom Feroze Gandhi was
one.
Rafi had a weakness for large cars and fast driving. He was involved in several traffic
accidents but was always lucky to escape with minor injuries. Once Nehru received a
personal letter from a UP industrialist, not far from Delhi, complaining that Rafi
demanded and received from him a large car. Nehru wrote to Rafi deprecating this and
asked him to return the car at once. Rafi never did.
Both in UP and at the centre, Rafi was a successful minister. At the centre he was an
imaginative Minister of Communications and did not hesitate to defy the powerful
Tatas in nationalizing civil aviation and introducing night airmail service. As Minister
of Food and Agriculture he was imaginative but more lucky than others.
Rafi used to come to the Prime Minister's house often in the evenings without
appointment. If Nehru was busy with visitors, he would sit with me in my study and

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talk endlessly. Once related to him something which, Feroze Gandhi had told me. He
laughed and asked me, "Do you believe anything that Feroze says?"
While the States Ministry was initiating action against Maharaja Pratap Singh of Baroda
(he was eventually deposed), Rafi got in touch with him and extracted from him Rs
200,000 for the National Herald. This was reported to Nehru by Sardar Patel. Nehru
immediately wrote to Rafi asking him to return the money. Rafi replied that he had
instructed Feroze Gandhi, Managing Director of Associated Journals Limited, to return
the amount. Actually Rafi did nothing of the kind. It was amusing that while Rafi was
negotiating with Maharaja Pratap Singh, he had been telling Nehru that V. P. Menon
had taken several hundred thousand rupees from the Maharaja as a bribe.
Few people know that Rafi once went to Sardar Patel and offered to help him displace
Nehru from the government. He was followed by Mahavir Tyagi, a "Ruffian." Patel
disliked both. He considered them politically unscrupulous. Rafi discovered that Patel
was a wiser and more far-seeing man than he had thought.
Nehru was very annoyed and unhappy when Rafi left Congress, and along with
Acharya Kripalani and others, formed a new party called the KMPP. After some time
Nehru sent for Rafi. Kidwai was sitting in my study in the Prime Minister's house when
Nehru walked in and started talking to him. Then Nehru warmed up and began
shouting. Nehru told Rafi, "You haven't the intelligence of a mouse." At that stage I left
the room and closed the door behind me. Eventually, Nehru went out of his way to get
Rafi back into, the Congress and the government.
One day a senior Air Commodore, staff officer from the IAF headquarters, rang me up
and later came to see me by appointment. He told me that Rafi Sahib had requested him
to secretly fly out large quantities of arms and ammunition to Nepal to be delivered to
B. P. Koirala who was then fighting against the, Nepalese authorities. Rafi had told him
that this had the approval of the Prime Minister. He added that the Air Force Chief was
aware that under certain circumstances government would have to use unconventional
methods. All he wanted was confirmation that the PM had given approval for this
venture. I was inclined to tell hint to forget the whole business and that if the PM
wanted any such thing to be done, he would have spoken to the Defence Minister.
However, I told the Air Commodore that I would check up with the PM in the evening,
and gave him an appointment for the next morning. I mentioned the matter to the PM
in the evening, and he became furious. He asked me to send for a PA to dictate a letter
to Rafi advised him not to shoot off a letter on this sensitive subject, but that he might
telephone Kidwai, which he did. The next morning the Air-Commodore came. I did my
best to explain the position to him without unduly compromising Rafi, and asked him
to forget the whole episode.

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I had two tiffs with Rafi while he was a Union Minister. One was about the
appointment of U. Srinivasa Malliah as a General Secretary of the Congress after
Purushottamdas Tandon was ousted as Congress President in 1950. I had suggested the
names of Malliah and Lal Bahadur who was then the Police Minister in UP. Rafi did not
like Malliah because he was too independent minded. So he combined with Rajaji
against Malliah. Rajaji told Nehru that Malliah was prone to intrigue. They suggested
Nijalingappa, whom Nehru did not care for. Nehru spoke to me. I told him that Malliah
was far less intriguing than Rajaji, and that Malliah was not keen on any job and also
that I had not spoken to Malliah. I added that it would take some persuasion on his
part to make Malliah agree. Nehru sent for Malliah, who declined the invitation. The
next day Nehru again sent for Malliah. He told Nehru that he was not suited for any
desk job. He said he would join as a General Secretary only as a helper. Lal Bahadur
could direct to him people difficult to manage. Malliah knew that Lal Bahadur was a
fence-sitter and incapable of saying boo to a goose. Malliah told Nehru that he could
relieve Lal Bahadur of such and other unpleasant tasks. Nehru appointed him; he and
Lal Bahadur got on very well. When Lal Bahadur became Prime Minister he wanted to
include Malliah in the cabinet; but Malliah declined the offer.
The second tiff related to a quarrelsome Communist MP who forcibly occupied a house
in the Lok Sabha housing pool. Rafi espoused his cause and spoke to Malliah who told
him that he had already told the MP that if he did not voluntarily vacate the house
within two weeks he would be ejected by the police. Malliah was the Chairman of the
Housing Committee of the Lok Sabha appointed by the Speaker. Mailia gave me all the
facts and said that the Speaker would stand firm. I asked him not to worry and if Rafi
intervened with the PM, "I shall see that the PM sends for you" and then he should
stand firm, Rafi came and complained to Nehru against Malliah. Nehru dictated a
strong letter to Malliah. I stopped the letter and told Nehru that he might send for
Malliah and talk to him. I also reminded Nehru that this was a matter within the
jurisdiction of the Speaker who had already turned down the Communist MP's appeal.
In the meantime the Communist MP came to my office in Parliament House. He
demanded from the PM's Private Secretary an immediate interview with the PM. The
Private Secretary explained to him that the PM was busy. The MP started shouting. He
told the PS that Rafi Sahib had sent him. At this stage I intervened and told him that
Rafi Sahib should not have sent him there. I also told the man that his behavior was
unworthy of a member of parliament; and that if he did not stop shouting he would be
ejected from the room and its vicinity by the security guards. He piped down and left
after giving me a dirty look.
The same day the PM met Malliah who explained the whole position. Nehru's comment
was, "You should have taken strong action earlier." Malliah asked, "How can I be
strong unless you are strong?" Nehru smiled. Later Nehru asked Rafi, "Why did you
give me wrong information?" Rafi chose to be silent. I always felt that whenever Nehru
was in possession of the facts, his actions were instinctively right.
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Rafi, to a large extent, and Maulana Azad, less so, were responsible for persuading
Nehru to oust Sheikh Abdullah as Chief Minister of Jammu and Kashmir in 1953.
Whatever had been his faults and his unorthodox behavior, I would like to see more of
the kind of Rafi in India. He died a poor man. In many ways Rafi was a delightful
person. Like Abou Ben Adhem, he was one who loved his fellow men.

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17. Feroze Gandhi
Son of a Parsi liquor and provision merchant of Allahabad, Feroze Gandhi in his early
days attached himself to Kamala Nehru as a Congress volunteer. He used to accompany
her as a helper wherever she went on Congress work in the Allahabad area. He could
not be accused of possessing any eagerness for studies. Throughout his life he retained
the handwriting of a child.
Towards the end of December 1935 at Badenweiler in Germany, Kamala Nehru had a
talk with her husband in the presence of their common friend Nanu (A.C.N. Nambiar).
Death for Kamala was only two months away. She said that she was profoundly
worried about the future of Indira. She expressed her strongest disapproval of the
possibility of Indira marrying Feroze Gandhi. She did not consider Feroze Gandhi a
stable person; neither did she think that he was in the least qualified to go into any
worthwhile profession and support Indira. She spoke with emotion and became tired.
With some effort she managed to add, "I do not want my child to be unhappy all her
life." Nehru spoke in a soothing and reassuring manner and said, "You leave the matter
to me." A few minutes later Nehru went out. Kamala turned to Nanu and said, "You
heard what he said; Indu will listen to no one except me. I could have guided Indu
gently away from Feroze. But my end is near. Jawahar will give no guidance to Indu.
She will ultimately be allowed to commit the mistake of her life."
Some time before Kamala Nehru's death on 28 February 1936, while Indira was still a
student in England, Feroze Gandhi managed to get some financial assistance from one
of his aunts and went to London. His "studies" in London constituted a standing joke
among Indians there.
Like many other Indian students in England, Indira managed to, return to India by ship
after the second world war broke out.
Feroze Gandhi was also back. In 1941 Indira spoke to her father about her wish to
marry Feroze Gandhi. Nehru remembered what his wife had told him at Badenweiler
and gave her good advice against the marriage. All the members of the Nehru family
were also against the marriage. Neither they nor Nehru could reconcile themselves to
the idea of Indira marrying the son of a local liquor and provision merchant. And, what
was worse, the boy was not qualified to enter any worthwhile profession to earn his
livelihood. As opposition to the marriage persisted, Indira adopted a truculent attitude.
She told her father that she had no roots in India and that she was going to leave the
country. Nehru was deeply hurt. He conveyed this to Vijaya Lakshmi Pandit and
Padmaja Naidu who happened to be in Allahabad. Padmaja Naidu expressed the view
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that in the ultimate analysis the father had no right to stand in the way of a daughter
who was a major. Reluctantly, Nehru gave his permission.
For some inexplicable reason, Nehru allowed the marriage to be performed according
to Vedic rites in 1942. An interreligious and intercaste marriage under Vedic rites at that
time was not valid in law. To be legal, it had to be a civil marriage. So, strictly under the
law, Indira was only a "concubine" and her children are "bastards."
Soon after the marriage, Nehru had Feroze Gandhi appointed as the Managing Director
of the Associated Journals Ltd which owned the National Herald, Navjivan and Quami
Awaz. This had disastrous consequences which have been mentioned in the chapter
"National Herald, etc." I have also referred to Feroze Gandhi in the chapter "Raft Ahmed
Kidwai."
In the meantime, Feroze Gandhi continued to do some work as an insurance agent and
eked out an existence.
At Nehru's instance, UP Chief Minister Govind Ballabh Pant saw to it that Feroze
Gandhi was elected to the Constituent Assembly when it was constituted in December
1946. After that he divided his time between Delhi and Lucknow. He was elected to the
first Lok Sabha in the 1951-52 general elections and continued to be an MP till his death
in 1961.
In 1947 Feroze Gandhi fell in love with one of Mrs. Pandit's daughters working as an
apprentice journalist in the National Herald at Lucknow. On hearing this, Mrs. Pandit
made an air-dash to India from Moscow at her own expense and took away the girl to
Moscow.
Two instances of what Nehru had said in private at the dining table leaked out and
caused embarrassment. These were traced to Feroze Gandhi. Since that time Nehru
rarely opened his mouth at mealtimes if Feroze Gandhi was present. Even time, the
great healer, did not help Nehru to become wholly reconciled to his daughter, and only
child, being married to Feroze Gandhi. Neither did developments after the marriage
provide any cementing factor. Sometime in 1948, Minister of Health Rajkumari Amrit
Kaur told me that in her presence Feroze Gandhi had told a group of MPs in the Central
Hall of parliament that "M. O. Mathai is the Prime Minister's son-in-law" and not he.
Some MPs later thought that Feroze Gandhi had said this because I was with Nehru all
the time, even in the car in which he travelled between his offices and residence, and
the fact that I was staying in the Prime Minister's house.
Feroze Gandhi had another romantic interlude. This time it was the daughter of a
Muslim minister of the UP government. The girl was working in the All India Radio in
New Delhi. They decided to marry. Feroze Gandhi spoke to Indira about his intention.
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She told him that she had no objection. He said he wanted the custody of the first child.
She firmly refused to consider this. The same evening he left a brief note on Nehru's
desk in his study at the PM's house. In the note he said, "This time it is all my fault."
Nehru sent for him after dinner and let him have his say. The next morning, after
breakfast, Nehru took Indira to his study and told her that Feroze Gandhi had had a
talk with him the previous night. He did not reveal to her all that transpired. However,
Nehru asked her one question, "Have you anyone else in view?" She replied in the
negative. In the evening Indira reported everything to me and complained that her
father was not frank with her. As a daughter she expected him to tell her everything
Feroze Gandhi had told him. I told her that it was obvious that her father did not wish
to repeat anything and create further misunderstandings.
When the news of the romantic developments surrounding his daughter reached
Lucknow, the Muslim minister was perturbed. He frantically came to Delhi and took
his daughter away.
Soon after this incident Feroze Gandhi shifted to his MP's quarters.
After his exit from the National Herald, a job was found for Feroze Gandhi by Rafi
Ahmed Kidwai in the Indian Express. Soon after Rafi's death, information reached Nehru
that Ramnath Goenka, the proprietor of Indian Express, had told someone that he gave
the job to Feroze Gandhi because Rafi had told him that it would lead to the lessening of
Nehru's financial burden; and that it was for the same reason that a second large Austin
car was also allotted to Feroze Gandhi for the personal use of Indira. The Prime
Minister asked me to question Ramnath Goenka about it. I did so and Goenka
confirmed that the information which reached the Prime-Minister was entirely correct. I
told him that the large Austin car was never used by Indira. I reported to the PM the
substance of my conversation with Goenka. He was visibly upset. I told him that
Goenka had issued instructions to withdraw the large Austin car. I also told him that it
was inadvisable to take any further step in the matter at that stage.
After Feroze Gandhi's virulent attack on T. T. Krislanamachari in parliament in the
"Mundhra" case and TTK's resignation from government, Ramnath Goenka, who was a
personal friend of TTK's, terminated Feroze Gandhi's services with the Indian Express.
The misgivings of Kamala Nehru expressed in anguish on her deathbed had come true
in full measure.

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18. The "National Herald" and Allied Papers
Towards the end of 1955 an agitated Indira came to my study in the Prime Minister's
house and said that her father had just told her that Feroze Gandhi and Ajit Prasad Jain
had had a talk with him, and that they were going to hand over the National Herald and
allied newspapers to C. B. Gupta, the UP Congress boss, because of acute financial
difficulties. Feroze Gandhi and Ajit Prasad Jain had already left for the railway station
to go to Lucknow. Indira asked me if anything could be done to retrieve the situation. I
asked the staff to ring up the Delhi railway stationmaster and ask him to trace Feroze
Gandhi and Ajit Prasad Jain and bring them to the telephone. Indira spoke to Feroze
Gandhi and asked him not to proceed with his proposal. Feroze Gandhi was in charge
of the National Herald in his capacity as Managing Director of the Associated Journals
Ltd. He was a man with no constructive ability. However, he was adept at attacking
people in parliament. He was initiated into it by Finance Minister C. D. Deshmukh as a
prelude to the nationalization of life insurance. Deshmukh asked his senior officials to
supply Feroze Gandhi, with secret information. Deshmukh wanted to generate advance
hostility to life insurance companies in parliament. Thus Feroze Gandhi came to know a
number of senior officials who proved useful to him in his attacks on others later on.
I remembered that during the independence struggle Nehru had said, "I would gladly
sell Anand Bhawan to keep National Herald alive." I decided to do something to put the
affairs of the. Associated Journals Ltd on a sound footing. I met the then AttorneyGeneral M. C. Setalvad and told him of a proposal to create a trust to aid these
newspapers. As recommended by him the trust deed was drafted by C.C. Shah, MP,
whom the Attorney-General considered an able solicitor.
I asked Indira to give a name to the trust. She suggested "Janhit Trust." I changed it to
"Janhit Nidhi" and told her it was inappropriate to mix Hindi and English. The trust
deed drafted by C.C. Shah was approved by the Attorney-General. The trust was
registered early in 1956 with Justice P. N. Sapru, MP, Padmaja Naidu and Indira as
trustees.
The first thing done was to get many people to transfer their shares and debentures in
the Associated Journals Ltd as well as their loans to the trust. Prominent among those
were Pandit Govind Ballabh Pant, K. N. Katju, Sri Prakasa, the Nawab of Bhopal, Raja
Bhadri, the Maharaja of Gondal, the Maharajkumar of Vijayanagaram, Colonel B. H.
Zaidi, Rain Ratan Gupta, Manubhai Bhimani and the Sarabhais.
In going through the books of the Associated Journals Ltd I found an entry of Rs.
200,000 as loan from Feroze Gandhi. On enquiry I was told that actually it was an
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interest-free loan from Maharaja Pratap Singh of Baroda. I have referred to this in the
chapter "Rafi Ahmed Kidwai." When Rafi informed Nehru that he had instructed
Feroze Gandhi to return the money, he also wrote to Feroze Gandhi to carry out the
instructions at once; and Feroze Gandhi replied after a fortnight that he had returned
the money. He did nothing of the kind. What he did was to enter the amount in the
company's books as a loan from himself! Later, through Major-General J. K. Bhonsle of
the INA and a close friend and relative of the Maharaja, I got a letter from the Maharaja
transferring the loan to the trust, as a donation. Feroze Gandhi, who was then out of the
Associated Journals Ltd, was not pleased about this.
I was not surprised when one day, during Feroze Ganuhi's attacks on Finance Minister
T. T. Krishnamachari in parliament, Nehru vehemently condemned him in the presence
of Lal Bahadur and myself and said, "This fellow Feroze is a bloody liar." Neither was I
surprised when V. K. Krishna Menon once told me, "I have known Feroze Gandhi from
his so-called student days in London. My experience has led me to the conclusion that
he is a congenital liar."
Ramnath Goenka of the Indian Express group of newspapers save the Associated
Journals Ltd a printing press costing about Rs. 175,000 as gift.
Substantial amounts were raised by way of special advertisements at special rates for
the National Herald, Navjivan (Hindi) and Quami Awaz (Urdu). Between 1955 and 1957 a
total of Rs. 842,000 was collected through such special advertisements. These special
advertisements were raised to clear up the vast initial mess that the Associated Journals
Ltd was in. They came from diverse industrial and commercial concerns such as the
Mafatlal group, the Kasturbhai Lalbhai group, the Tata group, the Birla group, the BIC
group and several others.
The receipts in the Janhit Nidhi from its inception in 1956 to 30 September 1963 were as
follows:

Cash donations
Donations in Kind
Transfers of loans (later converted into ordinary shares)
Debentures (250)
Preference shares (136)
Ordinary shares (9,166)
Bank interest
Interest on debentures in Associated Journals Ltd (actually paid)
Interest on debentures recoverable from Associated Journals Ltd
Total
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Rs 1,577,598.68
Rs 327,000.00
Rs 250,000.00
Rs 13,600.00
Rs 91,660.00
Rs 71,194.57
Rs 14,100.00
Rs 112,780.00
Rs 2,457,933.25
84

The assets of Janhit Nidhi as of 30 September 1963 were as follows:
87,781 ordinary shares of Rs 10 each in Associated Journals Ltd,
Rs 877,810.00
Lucknow (face value)
6,152 preference shares of Rs 100 each in Associated Journals Ltd (face
Rs 615,200.00
value)
354 debentures of Rs 1,000 each in Associated Journals Ltd (face value) Rs 354,000.00
Bank balance
Cash in hand
Interest on debentures recoverable from Associated Journals Ltd
Total

Rs 565,649.14
Rs 5,000.00
Rs 112,780.00
Rs 2,539,367.95

No significant changes have taken place since, except that the cash resources have been
spent on the National Herald building in Delhi.
As of 30 September 1963, the capital structure of Associated Journals Ltd was that the
trust-held stocks and shares in the company were worth Rs. 1,847,010 as against only Rs
487,450 held by the public.
Even though I did not ask Nehru's permission to take a direct but informal interest in
the affairs of the National Herald and allied papers, I kept him informed of
developments. In my final report to him at the end of 1957 I informed him that I would
take no further interest. He called me and said, "You have done a great deal to put the
affairs of the papers on a sound financial basis; but how long will it last? Chalapathi
Rau was a good journalist during the independence struggle; but somehow he has not
been able to adjust himself to the new situation after independence. He has little
understanding of economic affairs. He is not a competent all-round editor. He thinks
that by writing long and ponderous editorials, which nobody reads, he has produced a
good paper." Nehru further said, "Under Chalapathi Rau's editorship the circulation of
the paper would never increase. The office puts up to me every evening the National
Herald, with press clippings from papers all Over India. I ceased to open the National
Herald some years ago. I shall not shed a tear if National Herald and its allied papers
closed down. As I am against the Khadi and Village Industries Commission receiving
huge grants from government, I am against newspapers requiring spoon-feeding for
their survival."
I remember my numerous meetings in London and New Delhi with Kingsley Martin,
the distinguished editor of the New Statesman. He was of the firm view that a
newspaper or a journal is seventy-five percent business and twenty-five percent
journalism. This is what Chalapathi Rau had successfully avoided learning.

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19. Nehru and the Press
Before entering government Nehru had written several editorials and special articles,
mostly in his own hand for the National Herald. These are now with the National
Archives. Photostat copies are with the National Herald.
Sardar Patel, Maulana Azad, Rajaji and Pantji had their own favorites among pressmen;
but Nehru never considered it advisable to cultivate individual pressmen.
Nehru considered the Hindu as the best-produced paper in India and its reporters the
best in the country; but the Hindu was a little too conservative for him in regard to
economic policy. And yet he wanted the Hindu to be put up to him every evening.
From the middle of the fifties, Nehru considered S. Mulgaokar as the most effective
journalistic writer in the country. On several occasions Mulgaokar had criticized
Nehru's policies. And yet, when he wanted a high-grade journalist to tone up our
foreign and domestic publicity, immediately after the Chinese invasion, it was to
Mulgaokar that Nehru turned. Mulgaokar stipulated certain understandable conditions
so that his work in government, for a temporary period, would be purposeful and
effective. The PM could not fulfill those conditions in the setup which existed at that
time. So the proposal fell through.
In 1952 Nehru wanted a prominent person with a journalistic background as Minister
for Information and Broadcasting. He invited B. Shiva Rao to join his Council of
Ministers as a minister of state with independent charge of the Information and
Broadcasting Ministry. Shiva Rao tried through N. Gopalaswami Ayyangar to get
Cabinet rank. Nehru was annoyed, gave up the idea, and appointed B. V. Keskar
instead.
The one journalist who got on Nehru's nerves was Durga Das. He, after a long career in
journalism, ended up as special representative and later editor of the Hindustan Times.
Nehru had heard that while he was with the Associated Press of India (an adjunct of
Reuter), Durga Das was connected with the intelligence setup of the Home Department.
Durga Das, who was a favorite with Sardar Patel, Maulana Azad and Pantji, tried to get
elected to the Constituent Assembly from UP. Pantji recommended him; but Nehru
scored his name out. Durga Das then took up a very hostile attitude towards Nehru. He
began to write nasty things about Nehru and his daughter under the pseudonym
INSAF (Justice). It was the type of writing intended to hurt. One day Nehru sent for
Durga Das and talked to him severely. Later, Nehru informed me that he had told
Durga Das, "You are the meanest man I have met and the lowest form of human
existence." Normally Nehru wouldn't use such strong language. Durga Das was
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subdued for a while like a dog with its tail in a bamboo tube. But when the initial
impact wore off, Durga Das relapsed into his mean self. One day Nehru spotted a very
nasty piece and told me, "You might ask Ghanshyamdas Birla if this sort of write-up
represented his own views." I put the question to G. D. Birla, using the PM's own
words. G. D. Birla told me that he very seldom interfered with the editorial freedom of
Hindustan Times and added, "I have been noticing Durga Das' weekly column INSAF
which borders on yellow journalism. I did speak to him a few times. I am going to
speak to him again today as a last warning. In fact I made up my mind some time ago to
get rid of Durga Das. That is why I have brought in Mulgaokar."
The next day Durga Das went to his patron saint, Maulana Azad. The Maulana spoke to
G. D. Birla who told him that I had complained to him and that he might have a word
with me. The Maulana knew that I was a difficult customer. So he complained to the
PM. But the PM kept quiet. Soon Durga Das was replaced by Mulgaokar. INSAF died a
natural death; but out of its ashes arose INFA, a weekly newsletter.
During Nehru's time "keyhole journalism" was not very much in evidence, though it
seems to be developing fast at present. The classic example is a man who has recently
published a book on the emergency. A friend sent me a copy of the book. In that he has
referred to me as Nehru's stenographer. I wrote and asked him where he got that
fantastic information. He did not reply. I made the mistake of expecting a modicum of
decency in a keyhole journalist. I took the trouble of reading through the book. It is a
melancholy piece of work into which so many lies, half-truths innuendoes and absurd
inventions, all coated with malice, have been compressed into a few pages constituting
the worst type of journalistic vulgarization I have ever seen. It was obviously written to
take advantage of a "hate wave" in northern India. After finishing the book late at night,
it fell from my hands to the floor as I lay in bed. The next morning my sweepress took
the book from the floor and asked me, "Sahib, can I have it for my choola?" I felt like
telling her, "Yes, and also here is thirty rupees; buy another for your choola" in the style
of Samuel Johnson who, when approached by a person for a donation of one crown for
the burial of a priest, said, "Here are two crowns; bury two."
In the early years of independence Ramakrishna Dalmia made an attempt to measure
his pitiful strength against government through the medium of the Times of India and
the Illustrated Weekly of India which he owned. He singled out Nehru for attacks in the
most obscurantist manner bringing holy cows and sacred monkeys also into the picture.
Nehru was naturally annoyed; but he did not want to take any vindictive action. He
asked me to stop subscribing to the Times of India and the Illustrated Weekly as he did not
wish to render financial support to the gutter press. I, however, asked the Press
Information Bureau to forward to me such items from the Times of India and the
Illustrated Weekly as were libelous. Nothing came from the PIB. Dalmia's foolish
adventure petered out. However, the Times of India and the Illustrated Weekly never
again entered the PM's house.
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Around the same time as Dalmia's adventure, Blitz published prominently on the front
page a libelous item against Indira, alleging that she took from an unnamed
businessman several costly sarees. Nehru consulted Kailas Nath Katju. As advised by
him, a notice was sent to the editor of Blitz calling upon him to publish prominently on
the front page an apology or face legal action. The editor considered discretion the
better part of velour and complied. Blitz never repeated the performance.
While Aneurin Bevan was in India for the first time, he was staying in Rajkumari Amrit
Kaur's house. There he came across a piece of writing by Frank Moraes attacking Nehru
for creating the Atomic Energy Department, which he described as a "white elephant."
Bevan remarked, "This man is said to be one of your top journalists." I replied, "Of late
he has developed bats in his belfry. Goa is a bee in his bonnet; and the Atomic Energy
Commission is his latest allergy; he cannot see beyond his nose." Bevan recalled that he
had had the most determined opposition from the press in pushing through the
National Health Service. He added, "A statesman who has rapport with the people need
not be unduly perturbed by the fulminations in the press. The Almighty did not deposit
all the wisdom in the press. The greatest thing Nehru is doing in India is his massive
support for science and technology. This will bring you Lich dividends in the future in
terms of economic development and social change."
Nehru was not unaware of the exaggerated claim of the press to represent public
opinion. When Harry Truman stood for election in 1948 for the American presidency,
practically the entire press was against him. They claimed to represent public opinion
and went all out in support of the Republican candidate Dewey Truman confounded
everyone and won the election to become "the great little President of the United
States."
The London Times editorial of 3 October 1938 on the Munich Agreement was a constant
reminder to Nehru of the "foresight" and "wisdom" of the press! The editorial read:
The volume of applause for Mr. Chamberlain, which continues to grow
throughout the globe, registers a popular judgment that neither politicians nor
historians are likely to reverse. One fundamental truth that Mr. Chamberlain's
daring diplomacy brought into the light was this—that even in a totalitarian
State the people will have their influence in the last resort upon the Party. The
man who has arrested universal destruction by appealing to that truth need not
fear that in his own country the caviling of Party will outweigh the people's
gratitude. But, even if there is the inevitable reaction, there must be no retrograde
step. Relief from intolerable strain cannot be followed by mere relapse into
inertia. The lessons of the crisis are plain and urgent. The policy of international
appeasement must be pressed forward. There must be appeasement not only of
the strong but of the week—of the State that has allowed itself to be weakened
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for the common good. Czechoslovakia has deserved well of humanity, and it
should be a first international responsibility not only to guarantee the contracted
frontier, but also to assist in solving the new problems that the settlement has
imposed upon her. As between the greater Powers the field for necessary
appeasement is wide.
The editor of the London Times then was Geoffrey Dawson who belonged to the
disreputable Cliveden Set, the members of which met at Cliveden, which was Lord
Astor's estate. The Cliveden Set was passionately in favour of an understanding with
the dictators Hitler and Mussolini. The frequent Cliveden social functions were greatly
enlivened by the two beautiful young daughters of Lord Curzon—Lady Ravensdale
and the Lady Alexandra Metcalfe. The Cliveden Set was bitterly opposed to Winston
Churchill.

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20. Nehru's Sensitivity to his Surroundings
Nehru once told me of his working knowledge of the German language and how he lost
it. When he visited Germany in September 1935, to be with his ailing wife at
Badenweiler two years after Hitler had taken over the Reich, the shock of developments
in Germany was so complete that he forgot the German language altogether. However
much he tried, he could not utter a word. His knowledge never revived.
On our trip to the United States in October 1948 I took with me a sufficient stock of State
Express 555 cigarettes to last Nehru for the entire period. I did so because I knew that
American cigarettes, with their toasted tobacco, were too strong for him. At the White
House I removed all the American cigarettes from his room and replaced them with
some State Express cigarettes. He saw me doing this and got annoyed. He asked me,
"Don't you know that when I go to a place, I would like to use the things that are locally
available?" I said, "All right, you try an American cigarette and be in tune with your
surroundings," and offered him a Chesterfield, the mildest of American cigarettes. He
snatched it from me, lighted it and began to smoke. After two puffs he started
coughing. I said, "Throw it away, I have used American cigarettes for a number of years
and I know they are strong. On a trip like this you have to talk endlessly and it is
important that you should preserve your throat." He looked at me and smiled. He was
childlike in many ways and sometimes had to be treated as a child.
Nehru's first visit to the United States was a disaster from the point of view of acquiring
a favorable impression of the American people. To a large extent, some immature,
uncouth and arrogant American businessmen were responsible for it. At a lunch in
New York it was mentioned with emphasis in the hearing of Nehru that "it is a
hundred-dollar lunch." At a dinner in New York by top American businessmen, one of
them in his welcome speech declared, "Around this table sits one hundred billion
dollars." At another time Nehru was reminded that the budget of General Motors was
larger than that of the Government of India. All these "truths" jarred on a refined man
like Nehru.
Soon after our return from the United States, I was having breakfast with Nehru one
morning as he was alone in the PM's house. Out of the blue he came out with a
statement, "Americans think they can buy up countries and continents." I asked him,
"Aren't you judging a whole nation on the basis of your brief experience of some coarse
businessmen in New York? I think Americans, on the whole, are a warm-hearted and
generous people. In your judgment of the United States you are no better than the
average American tourist who spends two weeks in this vast country of ours and writes

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a book about it." Nehru listened, lighted a cigarette and offered me one; but. I never
smoked in his presence.
Nehru did not normally eat bacon, ham or pork. Denmark is famous for its bacon
because skimmed milk is fed to the pigs. Nehru had heard about this. While we were in
Copenhagen, Nehru asked me to order bacon and eggs for breakfast.
On our Japanese tour Nehru had heard that Osaka was famous for suckling pigs as an
item of food. While in Osaka he ordered it; but on that particular day it was not
available. Nehru was disappointed.
While visiting an oyster farm in Japan, Nehru was persuaded by the Japanese Foreign
Minister to eat some fresh oysters with a strong sauce. It took some persuasion for
Nehru to agree.
While we were in Kobe, I told Nehru that about seventy-five years previously the
Japanese never ate beef. Now they claimed Kobe beef the best in the world, and I asked,
"How about ordering some for dinner?" He said, "Don't be silly." He knew that I was
aware that he never ate beef anywhere in the world.
The grey-haired Japanese Foreign Minister Fujiama arranged a small dinner party in a
posh restaurant in typical Japanese style with Geisha girls in attendance. The party
consisted of only four persons—Nehru, Fujiama, Secretary-General N. R. Pillai and
myself. We sat on mats spread over a quilted floor with a Geisha girl on her knees
behind each of us. Nehru and I sat on one side, Fujiama and Pillai opposite. As is the
custom, women are not invited to Geisha parties. So, mercifully, Indira was not present.
Nehru took it all in his stride and allowed himself to be fed by his Geisha, and
according to custom, he did not fail to feed her occasionally. N. R. Pillai looked as shy
as a bride. How he wished to exchange places with me because Nehru had to crane his
neck to look at me! Nevertheless he did so twice and smiled at my activities. Nehru
refused to touch the rice wine, but had helpings of green tea. The Geisha girls were well
educated and well trained as hostesses.
I once told Nehru, "I think, if you were not Nehru, you would perhaps have liked to be
a ptarmigan." His curiosity was roused and he asked, "What is that?" I told him, "The
autumn moult of the rock ptarmigan helps to camouflage this ground bird of the
Tundra and Alpine slopes by giving it a patchwork appearance. Brown feathers are
replaced by white ones. The winter plumage of the ptarmigan is pure white to blend
with the snow. The spring moulting, triggered perhaps by the change in temperature,
will produce a brown summer coat, almost all brown." He laughed and asked me,
"Where do you get all these from?" I told him, "I am a sort of naturalist, and I like to
read books on animals and birds, trees and plants, mountains and oceans." From then

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on I lent him many of my books on these subjects. He was very careful in handling
books and returned them promptly.
Once I got into trouble with Nehru for no fault of mine. From Calicut in Kerala he wrote
a long note to his Private Secretary on 27 December 1955 with a copy to me. I reproduce
it below:
1.
I do not know what instructions are sent to places which I visit on my
tours. Whenever I criticize the food or any arrangement, I am told it is strictly
according to instructions. The food consists usually of long many-course meals of
the type one normally gets in a railway refreshment room. Sometimes the food is
fairly good, sometimes not. But the main thing is that very elaborate
arrangements are made for my meals and some hotel or restaurant is put in
charge of them. Usually a large group of persons from the hotel comes from
some other city with a good deal of paraphernalia and arranges the long meal.
2.
People have been told that I should have meals after the European style
and that various kinds of meat are necessary. As a matter of fact, I usually take
only half the meal and even there I leave out most of the meats. I am not
particularly fond of either meat or of the European style although, if it very good,
I like it.
3.
When I arrived in Calicut and reached Krishna Menon's house, I found
that there was much consternation at the prospect of my having to be provided
with plenty of meats after the European style. The house is vegetarian and they
were unhappy about this. Worse still, the District Magistrate sent four chickens
to be slaughtered and cooked. The lady of the house was completely upset at this
idea. Fortunately I came in time to prevent this outrage on her sentiment and I
asked specially for a Malayan vegetarian meal. A very good dinner was given to
me which I enjoyed.
4.
At Nilambur where the local Raja provided our party with lunch, this was
the first occasion in his life meat entered his house. Evidently he disliked the
idea, but did not wish to come in the way of my presumed tastes. As usual, some
hotel had been asked to organize the meal and they gave a seven-course affair
full of heavy meats and fruits which I hardly touched.
5.
I am not a vegetarian, but I do not eat much meat at any time and often I
do not eat it at all at home. Therefore, there is not only no need for laying stress
on meat, but I would much rather not have it when I am touring and require
light meals. The only instruction that should be sent is that I am prepared to eat
anything provided the meal is a light one and there are no chilies or spices in it.
On the whole, I would prefer a vegetarian meal unless this upsets the party or
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the hosts. In any event, the meal should be a light one. Normally I would like
food after the local fashion except for the chilies and the spices.
6.
When I am staying in some circuit house, then some outside arrangements
normally have to be made. They can provide me with any food which is
convenient, including European food. But there should be few courses and the
meal should be light. Elaborate hotel arrangements requiring staff to travel about
are undesirable.
When he returned to Delhi, Nehru angrily asked me, "Who sent the stupid circular?" I
said, "Some time ago Padmaja Naidu asked me to send a circular to all Raj Bhawans,
Chief Ministers and Chief Secretaries about what food and fruit juices should be served
to you. She had even put in phalsa juice which is unheard of in the south. As I did not
like petticoat interferences, I refused and told her that nothing should be done about a
matter like that unless it had your personal approval. She kept quiet. On enquiry I
discovered that Padmaja imposed herself on one of the Private Secretaries who sent a
circular, as drafted by her without my knowledge." I told him, "On receipt of your note,
a new circular was sent to all concerned cancelling the old one and incorporating the
suggestions contained in your note." He said, "Padmaja is good at some things; but she
is, by no means, a culinary expert in either Indian or European dishes."
It was the same sensitivity to surroundings that made him make a rather unwise
statement before his departure from Moscow. After a tour of the Soviet Union where he
received a tumultuous welcome everywhere, he said, "I am leaving a part of my heart
behind." It was the same thing which prompted him, after his visit to China, to
encourage the slogan "Hindi-Chini Bhai Bhai."
Soon after the Chinese overran Tibet, Nehru and Krishna Menon started talking in
public that India and China had lived in peace for 3,000 years, implying thereby that
eternal peace would reign. About this time Nehru and Krishna Menon happened to be
in my study in the PM's house one evening. I told them, "My study of history has led
me to the inescapable conclusion that in the past whenever China was strong, it was
expansionist." Nehru frowned and Krishna Menon looked glum. I added firmly, "Both
of you may live to realize this in your lifetime because China is now strong." And they
did realize it after the treacherous Chinese invasion of India. Then Nehru and Menon
repeated in public exactly what I had told them in the privacy of my study.
Nehru was not a good judge of situations. After the partition of India was decided
upon, he visited Lahore in 1947. I was with him. We stayed in the house of Dewan Ram
Lal. At a press conference in Lahore, Nehru held forth and asserted that when partition
was brought about, things would settle down and both contending parties would want
to maintain peace in their respective areas. Most pressmen were skeptical. They asked,

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"What makes you think so?" Nehru replied, "Forty years of public life." We all know
what happened subsequently.
After his visit to Spain, he met A.C.N. Nambiar in Europe. Nambiar asked Nehru what
would be the ultimate outcome of the civil war in Spain. Nehru replied that the
Republicans would win. He then waited for Nambiar's comments. Nambiar told him
bluntly "Like all the Liberals in England, Europe and the United States, and Krishna
Menon, you are indulging in wishful thinking. My assessment is that, much to my
dislike, the Republicans have not got the ghost of a chance. More blood will flow and
Franco will emerge as the ruler of Spain." This made Nehru not only annoyed but
angry. We all know what happened.
Dr Konrad Adenauer, the late Chancellor of the Federal Republic of Germany, whom
Winston Churchill once described as the greatest German since Bismark, has, in the
third volume of his Memoirs relating to the period 1955-59, devoted twenty pages to
India and Nehru. Among other things, he wrote:
Nehru made a good impression on me at our first meeting. He was an attentive
listener. His own statements were made calmly and in polite and low tone. His
movements were measured and his ways were unobtrusive and restrained.
Towards the end of the twenty pages, Adenauer stated:
Nehru did not impress me as a realist. He struck me as being all too ready to
believe what fitted into his picture of the world. To let modifications into this
picture of his, Nehru manifested little disposition.
Undoubtedly Nehru is a very cultivated person. He is clear in the use of words
and at formulations. But difficulties of deep political issues, he did not estimate
rightly. His way of thinking represented a curious mixture of British and Indian
views. This led him not to see the realities of politics.
Adenauer ended up with a quotation from an article by the editor of the German
periodical Aussenpolitic (Foreign Affairs) which underlined the disappointment Nehru
felt over the turn in China's policy, so very different from the expectations so firmly
held by Nehru.

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21. Nehru's Attitude to Money
When I joined Nehru in Allahabad early in February 1946 I discovered that his finances
were being looked after by Bachhraj and Co., Bombay, a private firm of the late Seth
Jamnalal Bajaj, a close associate of Gandhiji's and a businessman. After a couple of
months, when I accompanied him to Bombay, Nehru asked me to visit Bachhraj and
Co., and make a study of his finances. After some time, at Nehru's instance, I took over
all his assets from Bachhraj and Co. His assets consisted of what he inherited from his
father and what could be salvaged out of the royalties on his books which V. K. Krishna
Menon mismanaged in the early stages. Krishna Menon's jurisdiction was originally
limited to the United Kingdom, the British Empire (including India) and Europe. There
was a separate publisher for the United States and Latin America.
As soon as Nehru accepted office in the interim government on 2 September 1946, all
his assets except his ancestral house and his personal bank account were gifted to India.
They amounted to about Rs. 150,000.
When the book Discovery of India was ready for publication, the publication rights for
India were taken away from Krishna Menon and given to the Indian publisher. The
Discovery of India brought in good amounts in royalty from everywhere.
As and when royalties swelled and savings, began to accrue Nehru continued to
transfer amounts to Indira and, occasionally, some as gifts to the Kamala Nehru
Memorial Hospital, apart from putting in Rs. 25,000 each in the names of his two
grandsons in Government of India Small Savings Certificates. I felt sad that Nehru did
not make some provision for S. D. Upadhyaya and Hari who had served his father and
himself for long years on mere pittances.
One day Chairman A. K. Roy of the Central Board of Revenue told me that Nehru could
deduct up to fifteen percent from his royalties for secretarial assistance, and that he
could claim refund for the past five years—which would be a substantial amount, and
then continue the deduction annually.
At about this time Nehru was on a holiday in Mashobra (Simla). On his return, from
Mashobra, he handed me the draft of his will. He asked me to read it and tell him what
I thought. I read it, and again felt sad that he had provided nothing for his two faithful
employees, Upadhyaya and Hari.
The next morning, while going to office, I told Nehru that I had read the will and found
the language very moving. He asked me to get it typed. The will was signed in my

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presence and witnessed by Kailas Nath Katju and N. R. Pillai who was then the
Secretary-General of the Ministry of External Affairs.
Two days later I spoke to Nehru about A. K. Roy's talk with me regarding refund for
the past five years for secretarial assistance on the royalty income. I said I had the
papers, asking for the refund, ready for his signature. He was annoyed and said, "I am
not going to follow the advice of that fathead; I spend no money on secretarial
assistance; so, why should I claim refund?" I stood my ground and quietly told him, "I
do all the work in connection with the royalties on your books; and I see no reason why
I should not take the refund due and deductions in subsequent years." Then I placed the
papers before him. He kept quiet and then said, "In, that case I will sign the papers" and
he meekly did.
When the refund cheque for a substantial amount came from the Income Tax
Department, I took it to Nehru and told him that I did not need the money. I said, "Your
will as well as some of your previous actions in disposing of your savings totally
ignoring Upadhyaya and Hari made me sad. This refund cheque is to rectify that
omission. I want to open a separate bank account to be called the Employees Welfare
Account in your name; pay the bulk of it to Upadhyaya and Hari to be kept in
Government Small Savings Certificates and keep the rest for the benefit of your servants
in Anand Bhawan who worked for you while you were not in a position to help them. I
want this exercise to be repeated every year for the rest of your life." He looked at his
desk with his head bowed in thoughtfulness. Then he looked up at me with a celestial
smile. I could read all his emotions from his face which was a mirror; he could never
hide his emotions; and, at times, he had the peculiar capacity to speak volumes without
uttering a word.
Early in the Khrushchev era in the Soviet Union, Ambassador Menshikov asked Nehru,
at an interview, for permission to publish his books in Russian. Nehru agreed. Later he
told me about it—fortunately well in time. I asked the Secretary-General of the Ministry
of External Affairs to tell the Soviet Ambassador that the matter had to be finalized with
me before he could make any proposals to Moscow. The Ambassador promptly came to
see me. I told him that our practice was to charge fifteen per cent on the sale price as
royalty and repatriate the royalties to India in rupees periodically at our request. The
Ambassador agreed to do this as a special gesture to Nehru. Normally the Soviet Union
does not allow royalties to be repatriated. The authors concerned can spend the money
within the Soviet Union.
Later, I told Nehru that if other Ambassadors of Communist countries asked him for
similar permission, he might generally agree but ask them to fix the details with me. I
added that I wanted to do business with them on my terms. Thus I had to deal with the
Ambassadors of China and several East European countries. In fact, over a period of
years, Nehru received more royalties from Communist countries than from all the
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Western countries put together. As a consequence, Nehru's gifts to Indira and Kamala
Nehru Hospital went up and Upadhyaya and Hari and the old Anand Bhawan
employees continued to receive substantial sums from the Employees Welfare Account.
It might be mentioned here that Indira will continue to live largely by her father's pen
now that she has ceased to hold office. It was amusing and pathetic to see her
attempting to put herself two steps higher than her father while she was Prime
Minister. Poor fish! I suppose most women are overburdened by illusions.
After my resignation from the Prime Minister's office in 1959, I was going to Moscow
and London for three months in the summer of that year. Nehru knew I had no foreign
exchange. He graciously wrote to Ambassador K. P. S. Menon in Moscow and to his
literary agent in London asking them to give me as much money as I needed or asked
for, and forwarded to me copies of these. I replied thanking him for his kind gesture
and telling him, "I have not taken any money from you so far. Both in Moscow and
London I will be staying with personal friends; I intend to make no purchases; my
requirements will be limited to a couple of haircuts for which my hosts will gladly pay."
I declined to accept his offer.
While he was Prime Minister, and even before, Nehru never asked anyone for money
privately even for a good cause. He consistently refused to accept any donation in cash
from anyone for any cause. I am afraid not all his successors followed this practice. His
technique was public appeal. He would also accept purses given to him publicly for a
political or public cause.
Once Nehru made an exception. After the death of Sir Stafford Cripps, a committee in
London requested Nehru's assistance to collect a token amount in India for a memorial
to Cripps. After much hesitation and deliberation Nehru wrote to a few people,
including the Nizam of Hyderabad and the Jam Saheb of Navnagar, for small
contributions not exceeding Rs. 5,000 in each case. A sum of about £5,000 was thus
collected and remitted to the London committee.
On the eve of the first general elections, the Nawab of Bhopal sent an unsolicited
cheque for Rs. 50,000 through Vijaya Lakshmi Pandit. Since returning the cheque would
have offended the sentiments of the Nawab, Nehru handed over the cheque to Lal
Bahadur, who was in charge of Nehru's election arrangements as well as his own.
Until the influx of refugees to Delhi from 1946 onwards, Nehru used to carry in his
pocket about Rs. 200 in cash. Soon the amount would vanish—he would give away
money to people in distress; and Nehru would ask me for more. This became a daily
affair much beyond the capacity of any individual. I stopped it, saying that it was quite
unbecoming to carry money on his person. Nehru told me, "Then I will live on credit."
And he began to borrow money from the security officer to give to refugees. I warned
all the security staff not to lend more than ten rupees a day to Nehru. Simultaneously, I
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arranged for money to be placed at the disposal of one of Nehru's Private Secretaries
from the Prime Minister's National Relief Fund. This Hindi-knowing official started to
be in attendance at Nehru's residence early in the morning daily. He would take on the
spot directions from Nehru for giving financial aid to those in distress. Such people
were also directed to meet the Private Secretary in his office to receive assistance and
aid. Eventually this official came to be called "Private Secretary (Public)."
Nehru was very frugal, to the extent of being parsimonious, about spending money on
himself. But he did not hesitate for a moment to buy a painting of Gandhiji's in
meditation done by Mrs. Sass Brunner for Rs. 5,000. Aneurin Bevan once told me that
the personality of a man can be judged by how much of his income he spent on himself.
Bevan, a poor man himself, would buy paintings from struggling artists whenever he
could and present them to various people.
Nehru was particular to keep his hands clean in regard to money matters; but he did
not object to others dirtying their hands to raise funds for the Congress Party or causes
in which he was interested. More about this in the next chapter.
When Nehru died on 27 May 1964, all he left behind was his ancestral house in
Allahabad and just enough money in his personal bank account to pay his meager
estate duty.
In matters financial, Nehru had a dread of public opinion. In this he was quite different
from Sardar Patel. In one instance, Nehru took this dread and fright to a ludicrous
extent. I laughed. He asked me gravely, "Why are you laughing?" Then I narrated too
him a story about public opinion. While Lloyd George was Prime Minister of Great
Britain, the British Ambassador in Moscow called on the Bolshevik Foreign Minister
Chicherin. Tea and snacks were served. The British Ambassador started telling
Chicherin how difficult the position of his Prime Minister was because he had to take
into account public opinion in Great Britain. He added that in this respect the Soviet
Government was in a much easier position. Chicherin contradicted the Ambassador
and said that they in the Soviet Union also had to take public opinion into account in
their country. He added, "It all depends how one handles public opinion." At that time a
friendly cat of the Kremlin walked into the room mewing. Chicherin caught hold of the
cat and fondled it. He took the honey bottle from the tea table and poured some honey
into a saucer. Then he handed over the cat to the Ambassador asking, "Mr.
Ambassador, can you make the cat drink the honey?" The Ambassador fondled the cat
and gently bent its head to the saucer. The cat sniffed and turned its head away. In
triumph the Ambassador said, "Ah, that proves my point." Chicherin smiled and took
over the cat and dipped its tail in the saucer of honey and let it go. The cat sat there and
lapped up the honey by licking its tail. Chicherin sat back and told the Ambassador, "In
most cases public opinion is a convenient excuse. There are ways and ways of dealing
with public opinion unless you want to be its victim."
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Nehru listened with attention and amusement. But he said nothing. I asked myself,
"What can he say?"

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22. G. D. Birla
Soon after Sardar Patel's death on 15 December 1950 Ghanshyamdas Birla rang me up
to say he wished to meet me. I received him in my study in the Prime Minister's house.
It was the first time I was seeing him, even though in the past he had been sending for
the Prime Minister, through me, Alphonso mangoes from Bombay and luscious figs
from Nasik once a year and good asparagus from his garden in Delhi, occasionally. At
the meeting he told me that the Finance Ministry was creating difficulties for him and
his firms inasmuch as his firms were going to be taxed and otherwise penalized for the
very large donations made to the Congress during the freedom struggle over a period
of years. This was on the basis of the report of the Income Tax Investigation
Commission appointed by Liaqat Ali Khan while he was Finance Member in the interim
government. He said that Finance Minister C. D. Deshmukh, with his civil service
background under the British, had no conception of the circumstances under which
these donations were made. Practically all these donations were made at the instance of
Gandhiji and Sardar Patel. He added that he was deeply distressed at the injustice being
done. He did not know how to proceed in the matter. He said his relationship with
Pandit Nehru was never close and that there was always a distance between them. I
told him that Pandit Nehru was never associated with fund collections for the Congress
and that, instead of approaching him directly, he might meet Maulana Azad and
explain the situation to him. I added that I felt sure that Maulana Azad would speak to
the Prime Minister. In the meantime I mentioned to the Prime Minister about G. D.
Birla's meeting with me and what transpired.
G. D. Birla did as I asked him. Subsequently, Maulana Azad spoke to the Prime
Minister; and the PM sent for G. D. Birla and had a talk with him. Incidentally,
whenever G. D. Birla asked for interviews, the PM invariably met him at the PM's house
in the mornings, before leaving for office. After the meeting with Birla some
correspondence took place between the PM and Finance Minister Deshmukh. The latter
took a rather rigid attitude initially. The PM made it clear to Deshmukh that donations
given to the Congress before independence should not be treated as donations to a
political party but to a national movement engaged in the freedom struggle against a
foreign power. The, PM made it clear that he would not like to be a party to penalize
people who took risks in helping the freedom struggle. The Finance Minister at last
agreed to do the right thing. Later, the PM told me that I might verbally inform G. D.
Birla about the outcome.
One day, soon after, G. D. Birla had a long talk with me. Among other things, he said, "I
was considerably influenced by Gandhiji's trusteeship theory. Before independence I
divested myself of all my assets. Some was distributed to my children, but most of it
went to public charitable trusts such as the Birla Education Trust which runs the
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Institute of Technology at Pilani. All I get now is Rs. 5,000 per month, free of income tax
from Birla Brothers (Private) Ltd." I commented, "There is talk of government
introducing wealth tax and estate duty in the future; then you won't be affected by them
as you are as free from assets as a frog is from feathers." He admitted it would be so.
One day Nehru related to me an encounter G. D. Birla had with him in the winter of
1925. Nehru had written to Gandhiji and said that he was unhappy about being a
financial burden on his father and wanted to stand on his own feet. The difficulty was
that he was a whole time worker of the Congress. Gandhiji, in his reply dated 15
September 1924, wrote, "Shall I arrange for some money for you? Why may you not
take up remunerative work? After all you must live by the sweat of your brow even
though you may be under Father's roof. Will you be correspondent to some
newspapers? Or will you take up a professorship?"
On 30 September 1925 Gandhiji again wrote, "I would not hesitate to ask a friend or
friends who would consider it a privilege to pay you for your public services. I would
press you to take it from public funds if your wants, owing to the situation in which
you are and must be, were not extraordinary. I am myself convinced that you should
contribute to the common purse either by doing some business or by letting your
personal friends find funds for retaining your services. There is no immediate hurry,
but without fretting about it come to a final decision. I will not mind even if you
decided to do some business. I am sure that Father will not mind any decision you may
arrive at so long as it gives you complete peace." (Gandhiji had not realized the extent of
the pride of the Father and the Son.)
Obviously, Gandhiji mentioned the matter to G. D. Birla who turned up at Allahabad.
With great diffidence G. D. Birla spoke to Nehru and offered to make adequate
arrangements in whatever manner Nehru liked. Nehru succeeded in suppressing his
annoyance, but gently declined the offer.
G. D. Birla and his close relatives were generous to Rajkumari Amrit Kaur for a project
she had sponsored and with which I subsequently associated myself with Nehru's
knowledge. Ultimately this brought trouble to me. About this I shall write separately.
Nehru once told me what he thought of G. D. Birla. He said, "Ghanshyamdas Birla is a
curious combination of a buccaneer in his early days and a very generous man."
Early in 1955, G. D. Birla had a long talk with me. He said that Gandhiji and Sardar
Patel made use of him in several ways. He added, "The second general elections are to
be held this winter. For the first general elections the AICC had some funds left behind
by Sardar Patel. I shall be happy to help in the collection of a central fund from
prominent industrialists if Panditji welcomes it." I told him that it was not very
desirable to bring Panditji directly into the picture. I said I would discuss this matter
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with a few people and also mention it to the PM and then get into touch with him. I
called a meeting attended by T. T. Krishnamachari, Lal Bahadur and U. S. Malliah. I
told them of G. D. Birla's talk with me and that I had appraised the PM of it. I said we
should give a target to G. D. Birla for the central fund, taking into account the fact that
the Provincial Congress Committees would be collecting money from all except the big
industrialists. The consensus at the meeting was that a target of ten million rupees for
the Congress Central Election Fund should be aimed at.
Another meeting of the same persons was subsequently held at T. T. Krishnamachari's
residence with G. D. Birla also present. Birla said that the target was not impossible to
achieve. He suggested that a separate bank account should be opened in the name of
the PM. G. D. Birla was asked to go ahead with the collection anticipating the PM's
acquiescence.
I arranged for T. T. Krishnamachari, Lal Bahadur and Malliah to meet the PM in my
presence. The PM had already learnt from me what had happened till then. T. T.
Krishnamachari suggested that the PM might agree to open a separate bank account in
his name. I intervened and said that even the PM needed protection and that the
account should be in the names of two persons. I suggested the name of Morarji Desai,
who then happened to be the Treasurer of the Indian National Congress. The PM
approved; but T. T. Krishnamachari was later annoyed with me because he never had
any use for Morarji.
The collections for the Congress Central Election Fund exceeded the target by Rs.
2,500,000.
On return from one of his rare visits to Anand Bhawan, Allahabad, I found Nehru glum
and irritable. I asked Indira, "What is biting the 'old man'?" She told me that when the
AICC shifted from Swaraj Bhawan to Delhi, the building was left in a shockingly
dilapidated condition, and that her father was deeply hurt by the callousness of the
AICC authorities; he did not know how to get the extensive reconstruction, restoration
and repairs done and where the money was to come from. The building was to be used
as the Children's National Institute of which Mrs. Shyam Kumari Khan was Director.
I spoke to G. D. Birla and told him that something should be done to restore the
building steeped in history. He immediately wrote out a cheque for Rs. 100,000 from
one of his trusts in favor of the Swaraj Bhawan Trust and sent it to the PM for his
acceptance. Nehru was pleased and informed B. C. Roy, who was a trustee of the Swaraj
Bhawan Trust. The cheque was forwarded to Shyam Kumari Khan. G. D. Birla also got
a cheque for Rs. 25,000 from one of the trusts of Kasturbhai Lalbhai for the same
purpose.

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In the meantime, I had asked Shyam Kumari Khan to get a good architect to make an
estimate for a thorough renovation of Swaraj Bhawan. Without delay Shyam Kumari
Khan sent me the detailed report and estimate of the expenditure of about Rs 200,000. I
placed them before the PM.
I mentioned to G. D. Birla that the estimate was for about Rs 200,000. Without a
moment's hesitation he wrote out another cheque from his trust for Rs. 100,000 in favor
of the Swaraj Bhawan Trust and sent it to the PM. Nehru returned the cheque to G. D.
Birla saying that he was very annoyed with me for troubling him so much. Since
Nehru's attitude was negative and he had no alternative plan to raise funds, I decided
to circumvent him. On my advice, G. D. Birla tore up the cheque and wrote out another,
for the same amount, in favor of the Children's National Institute. I forwarded it to
Shyam Kumari Khan with instructions that the amount was to be used exclusively for
the restoration and renovation of Swaraj Bhawan. Three months later Nehru was told of
my action. He kept quiet; probably he thought that scolding would not have much
effect on me in a matter like this.
I would like to place on record that as long as I was officially connected with the PM. G.
D. Birla never asked me for any favor, big or small. He is too big a man to do any such
thing.
After a visit to the Institute of Technology at Pilani, the British statesman, Aneurin
Bevan, told me, "It is a first-rate institution built up by an imaginative and big-hearted
man." Ambassador A.C.N. Nambiar, who lived in Europe continuously for fifty-fiveyears and knows much about European universities, particularly in West Germany,
France, Czechoslovakia, Switzerland and Sweden, told me, after a couple of visits to his
niece, who was Dean of Humanities at Pilani, that the Birla Institute of Technology at
Pilani in many ways compares very favorably with similar institutions in Europe.
It has been a fashion with second-rate politicians to howl against the so-called big
businessmen and industrialists. Some of these men, who have been builders of this
country and not slogan-mongers, are bigger than most of the howling politicians put
together. If any of them has done irregular things, let the government penalize them.
Why howl?
From 1952 onwards G. D. Birla had been sending to Nehru on his birthdays a sum
calculated at Rs. 1,000 per year of his age plus one rupee to be spent at his discretion.
These cheques were invariably credited to the account called Distress Relief Fund from
which innumerable struggling students, widows, and people in distress have received
succor.

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23. Nehru and Alcoholic Drinks
Very many people have asked me if Nehru drank. My invariable answer is, "Yes—
water." But he was never an intolerant puritan like Morarji Desai.
The only time I have seen him sip a drink was at the mountain resort, Burgenstok, in
Switzerland. We had gone there from London for a conference of heads of Indian
missions in Europe. At the instance of Lady Mountbatten, Nehru had invited Charlie
Chaplin to come up from his place, Vevy, to Burgenstok for a couple of days. Nehru
had told me in advance that I should be with Charlie Chaplin whenever he himself was
otherwise engaged. Charlie Chaplin was Nehru's guest at the hotel where we stayed.
This gave me a welcome chance of avoiding the conference of pompous Ambassadors.
Charlie Chaplin had then only recently settled down in Switzerland, having left the
United States where he has some bitter experiences, personal and political. He never
became a naturalized American citizen and jealously kept his British passport. He spoke
to me frankly about his experiences in the United States. He was bitter but spoke very
highly of Franklin Roosevelt. For all the rest, including Eisenhower who was then
President of Columbia University and a prospective President of the United States after
Truman, he had only unmitigated contempt. He spoke very warmly about Greta Garbo
and told me about kissing her knees after asking her permission. I told him that I saw
Greta Garbo at the Waldrof Astoria hotel in New York, standing in a queue to have a
look at Nehru as he passed by Charlie Chaplin said, "She would not do such a thing to a
mere head of government," and added, "to her and to many of us Nehru is much more
than the Prime Minister of India."
Charlie Chaplin's way of talking and gesturing were very feminine and endearing.
During his two days in Burgenstok I spent several delightful hours with him.
One evening Charlie Chaplin and I were sitting in a quiet corner of the hotel lounge,
sipping sherry. Just then Nehru walked in and sat down with us. Charlie Chaplin asked
him to have a sherry with us. Nehru told him that he did not drink and that he did not
like the taste of any alcoholic drink. Like a woman Charlie Chaplin charmingly
persisted and at last ordered a glass of sherry. In order not to offend Charlie Chaplin,
Nehru took a sip, contorted his face, and put it away.
On our way back to Geneva by car, Charlie Chaplin travelled with Nehru who halted at
Vevy on Lake Geneva to have lunch with him and his wife Oona whom Charlie was
never tired of referring to as the luminous beauty. Throughout the journey Charlie
Chaplin was on tenter-hooks. He was frightened of motor travel on mountain roads.

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During Nehru's visit to Germany, he had to give a return banquet to Chancellor
Adenauer and his principal colleagues. Ambassador Nambiar wanted to serve drinks.
He spoke to Secretary-General N. R. Pillai. They both came to me and asked me to do
something about it. I spoke to Nehru who flatly refused at my first attempt. I persisted
and told him, "We are not in India; do you want to be a Morarji and impose prohibition
on foreigners in their own country? They are used to drinks and it would be intolerance
to deny them here. The Indians present can abstain from drinking." He thought for a
moment and said, "All right, tell Nanu he can serve sherry to begin with and Moselle
wine (white) and Rhine wine (red) and nothing else. He and N. R. Pillai should abstain
from drinking." This was done even though N. R. Pillai was annoyed at the decision.
In Delhi Nehru used to put up important foreign dignitaries in the Prime Minister's
house. I can remember Aneurin Bevan, Selwyn Lloyd, Anthony Eden and Harold
Macmillan staying in the Prime Minister's house. During their stay, bottles containing
alcoholic drinks of various kinds were placed in their rooms for their use by the
Protocol Division of the Ministry of External Affairs. An English-speaking servant was
put on duty to serve them drinks whenever they wanted. But no drinks were served at
Islehru's dining table.
Early in 1955 Ambassador K. P. S. Menon sent me a rather diffident letter about serving
alcoholic drinks during Nehru's impending visit to the Soviet Union. I put it up to the
Prime Minister who sent me a note which I reproduce below:
PRIME MINISTER'S SECRETARIAT
So far as K. P. S. Menon's letter is concerned, you might make it clear to him that
in any party given by us, big or small, no alcoholic drinks will be served. I am
sorry if this upsets the Russians, but they should know how we function. The
only exceptions may be as follows:
At the small dinner to Government members, the Russians may be served some
sherry or light wine or vodka. No champagne to anybody. No Indian present
will be served or accept any alcoholic drinks.
At the reception, no alcoholic drinks of any kind. You may tell him that this was
the rule we adopted in China. In fact there were no exceptions at all in regard to
alcoholic drinks. We had previously informed the Chinese Government that I did
not drink and that we did not serve them. If K. P. S. Menon likes, he may give
this information to the Russians previously.

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24. Sarojini Naidu
I met her first in 1946 in Delhi. She was a short woman with the wide mouth of a frog.
She had heard about me from her daughters Padmaja and Leilamani. She took kindly to
me. I have never seen a woman so full of innate authority as Sarojini; and perhaps there
never existed such an elderly woman so fond of sweets and rich food as she was. She
was a wholly liberated woman, full of understanding and sympathy for others. When
her younger sister and her husband Nanu (A. C. N. Nambiar) fell out and separated,
Sarojini's sympathies were all for Nanu. She took his side against her own sister.
Under the influence of Gandhiji, Sarojini reluctantly issued a statement mildly critical of
her famous brother, Chatto (Virendranath Chattopadhyaya), about his terrorist
activities. This infuriated her father, Aghornath Chattopadhyaya, who refused to see
her ever again. When he was on his deathbed, Sarojini arrived at his house to have a last
glimpse of him. The old man refused her permission. This remained with her,
throughout her life, as a matter of great personal sorrow.
Sarojini, her son Jayasooriya and daughters Padmaja and Leilamani, were the products
of the composite culture of Hyderabad city. They were absolutely no communal; in fact
a little too pro-Muslim. They had contempt for the Andhra Reddys. They were Nawabi
in their outlook. Sarojini had a soft corner for the Indian princes of the north,
particularly a few Muslim ones. She reveled in holding court and in gossip. She liked
courtiers like K. M. Panikkar to surround her and sing her praises. She had no use for
socialism, loved the good things of life, and was a great liberal.
In 1946, when Nehru became Congress President, Gandhiji advised him not to include
Sarojini in the Working Committee as he was expecting important negotiations with the
British and feared that she would talk loosely and leak out secrets. Nehru replaced her
by Kamaladevi Chattopadhyaya. Sarojini was furious for some time.
When independence came, Sarojini was the obvious choice for the woman's seat in the
Cabinet; but she was considered too old and was sent as the UP Governor. She was a
wonderfully good Governor; but, alas, her tenure was cut short by her sad demise. I
accompanied Nehru to Lucknow on one of his brief visits. I was struck by the care and
affection she bestowed on Nehru's old personal servant Hari. Accompanied by her
ADC she visited Hari's room, herself carrying a large plate of sweets, with the ADC
following with a bowl of fruits, and placed them in Hari's room. No Governor but
Sarojini would have done this. She was too big a person not to do it.
Poetess and orator, motherly and natural in her behavior, Sarojini Naidu, hailed as the
Nightingale of India, was perhaps the most gifted, the most accomplished and one of
the greatest women this country has produced in the past few centuries.
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25. Rajkumari Amrit Kaur
Born in the princely family of Kapurthala in 1887, Rajkumari Amrit Kaur was the only
girl among six brothers. She had her schooling in England. After passing her Senior
Cambridge examination, she wanted to go to Oxford; but her mother stood in the way.
So she had to come back and to content with piano-playing, some household chores,
and tennis, at which she was very good and had won many trophies in.
Rajkumari told me once that in her time as a young girl the three outstanding beauties
in India were Indi Cooch-Behar, TA" Rajwade and herself. She fell in love with an
Englishman; but her parents, particularly her mother, refused to entertain the idea or
her marriage to a foreigner.
Progressively, Rajkumari came into conflict with her mother. Her father, though
unhappy at the development, chose to keep quiet. Her eldest brother was sympathetic
to her and occasionally indulged in threatening the mother. That was not of much help.
The brother who stood by her was Lieutenant-Colonel Kanwar Shumshere Singh, one
of the earliest Indian IMS officers. Rajkumari, left her home and stayed with Kanwar
Shumshere Singh for whom she developed a lifelong affection and devotion. She did
not return to her ancestral home in Simla until after her mother died. Then, she joined
her father and functioned as his hostess. Viceroys and Governors and other dignitaries
were guests at her father's house.
Rajkumari once told me that in her life she hated only one-person. I asked her who the
person was. She said, "My mother, and proceeded to use the choicest epithets against
her."
Rajkumari took a great deal of interest in the All India Women's Conference which was
an active organization during British times. Early in life she showed her capacity to
raise funds for good causes. She was one of the founders of Lady Irwin College in New
Delhi and considerably helped in building up that institution.
It was in the middle of the thirties that Rajkumari Amrit Kaur joined Gandhiji as one of
his Secretaries. Prior to that she was in correspondence with Gandhiji and did some
work for him in Simla and adjoining areas in the field of khadi and village industries. In
1959 the Rajkumari told me that everyone in her family including her beloved brother
and protector Kanwar Shumshere Singh, disapproved of her association with Gandhiji,
leave alone staying in his primitive hut in Sevagram. Kanwar Shumshere Singh soon
relented and became reconciled to it. In fact he even became the unofficial medical
adviser to Gandhiji in so far as his writings on health subjects were concerned.

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The actual period of time that the Rajkumari spent with Gandhiji was limited because
she was sent out on errands by him and also to look after his interests in the Simla
region. Then came Gandhiji's arrest and imprisonment in 1942. During the Quit India
movement the Rajkumari was imprisoned in the Punjab. This was her first jail
experience. She told me she did not like it, mainly because of the rats, and lizards on the
walls. She feared and detested both.
Her jail term was short. She was released by the authorities on their own initiative. On
Gandhiji's release, she joined him and was mostly with him until she became a Cabinet
Minister on 15 August 1947.
The Rajkumari was not Nehru's first choice as the woman minister in his Cabinet. His
choice was Hansa Mehta. Nehru had earmarked the Rajkumari for assignment as a
Governor or Ambassador. However, Gandhiji intervened and pleaded for the
Rajkumari and Nehru fell in line.
Her ten-year tenure as Union Health Minister marked the control and eradication of the
scourge of malaria in the country and the establishment of the All India Institute of
Medical Sciences. As minister, the Rajkumari was a little too much in the hands of her
civil servants and her medical administrators. On more than one occasion in the Cabinet
she could not adequately explain her ministry's proposals under consideration by the
Cabinet. On being cross-examined by her Cabinet colleagues, she burst into tears. The
consideration of the matter was postponed and at the next meeting of the Cabinet, the
Secretary of her Ministry and the Director-General of Health Services had to be
summoned to properly explain the proposals to the Cabinet.
The two most elegant Indian women I have met were Rajlaunari Amrit Kaur and Vijaya
Lakshmi Pandit. Theirs was an elegance which was simple in person, clothes and
general turnout in contrast to the rather vulgar display by most Maharanis.
The Rajkumari was good at making brief, pretty speeches. More than the contents of the
speech, her melodious and rich voice made people listen to her with attention. Where a
reasoned speech on a specific subject was called for, or in a debate, she cut a sorry
figure. As a writer she was poor. I once asked A. C. N. Nambiar, who knows French
well, about the Rajkumari's command of spoken French. His reply was, "She is bold."
As a Congress minister, the Rajkumari indulged in talking ill of Congressmen. Congress
MPs resented this. She fraternized with opposition MPs, particularly Communists. She
liked being invited by Ambassadors and also entertaining them in her own house. It
was her practice to speak to Ambassadors in disparaging terms about the Congress. It
did not occur to her that it was unworthy of a Congress minister to do so. Once she
wrote to Prime Minister Nehru assailing Congressmen and ended up by saying,
"Congressmen are rogues and rascals; they are all for themselves and devil take the
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hindmost." Nehru was more amused than annoyed. He replied to her, "Thank you for
the compliment; I am also a Congressman." This reminded me of an American woman
Ambassador's visit to Pope Pius XI. She was one of the most beautiful women of her
day with an acid and loose tongue, and was a recent convert to Catholicism. She held
forth about what the Catholic religion stood for and what was expected of the faithful.
She exhibited all the zeal of a new convert, The austere Pope listened in silence to the
long harangue and quietly dismissed her with one sentence, "But, Madame
Ambassador, I am also a Catholic."
Once, at a conference of eminent medical men in Bangalore, the Rajkumari spoke about
family planning and said that the rhythm method was the nearest to Gandhiji's ideas on
the subject. She warmed up and added, "I can tell you from experience that the rhythm
method is most effective." Coming from a spinster it was too much for the distinguished
audience; but they controlled themselves from bursting into laughter. What the
Rajkumari really meant was "medical experience" and not her personal experience!
Once, the Rajkumari told me, not without girlish giggles, about a wealthy, elderly,
distinguished, non-career High Commissioner proposing to her in her late sixties. She
was particularly amused at the words he used, "Oh Amrit, won't you come and share,
my loneliness?" Poor fellow, had to live out his loneliness all by himself!
in the 1961-62 general elections, the Rajkumari wanted to stand for re-election to Lok
Sabha from the Jullundur constituency. Swaran Singh had earlier asked for it. The
Rajkumari's own constituency was Mandi in Himachal Pradesh. The Congress Central
Election Committee favored Swaran Singh for Jullundur. It was suggested that the
Rajkumari might stand from Mandi; as an alternative the committee offered Kaithal in
the Punjab which was a safe constituency. In her obstinacy, the Rajkumari said,
"Jullundur or nothing." So she got nothing. This made her bitter. She was further
embittered when she was not included in the Cabinet in 1962. When she ceased to, be a
Cabinet Minister, she had to shift from the spacious bungalow, 2 President's Estate. The
government allotted her a smaller house on Akbar Road. Two days before shifting, I
suggested to the Prime Minister that the Rajkumari might be allowed to stay on at 2
President's Estate. After all she was Chairman of the Red Cross, T. B. Association,
Leprosy Association and Chairman of the Governing Council of the All India Institute
of Medical Sciences which was a government institution. On the PM's recommendation
the President reallotted 2 President's Estate to the Rajkumari on a rent of Rs. 500 per
month, inclusive of electricity and water supply. The Rajkumari was pleased and was
grateful to me.
Soon after the Rajkumari ceased to be a Cabinet Minister, Nehru offered her the
governorship of Madhya Pradesh, but she declined the offer.

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When I left the PM's house in 1959, the Rajkumari asked me to stay in hers. I did so for a
week. When I discovered that she would not accept payment for my food and other
personal items, I left and stayed with a friend who was an MP. Two years later, the
Rajkumari asked me to shift to her house and reluctantly agreed to accept payment. So I
shifted. Sometime later she told me that I should stay on until her death or that of her
elder brother Kanwar Shumshere Singh, whichever came last.
The Rajkumari was somewhat overwhelming to the second generation of her family.
Her attitude to her own sex was unfriendly and forbidding, but when one was in
trouble, she would go all out to help the person, regardless of who it was.
In 1962 the Rajkumari wanted to revise her will to make a substantial bequest to me. I
prevented her from doing so. Then she decided to build a bungalow in the grounds of
the All India Institute of Medical Sciences on condition that she, her brother, and I could
stay there during our respective lifetimes, after which it would become the property of
the AIIMS. I now rather regret that I advised her against it. She and her brother also
accepted my advice to gift her palatial house in Simla to the Government of India. This
was done in 1963, and the President of India, with the concurrence of the Prime
Minister, placed 2 President's Estate at their disposal free of rent for their respective
lifetimes. But alas, the Rajkumari died the following year; but her brother lived till the
middle of 1975, reaching the age of ninety-six. I remained with him till the end, thus
fulfilling a promise I had made to the Rajkumari.
The Rajkumari mothered me a great deal. I have the pleasantest memories of this
wonderful and courageous woman.

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26. Vijaya Lakshmi Pundit
Born with the century, Swarup, as she was christened, was one of the most beautiful
women of her day. As was the practice among Kashmiri Brahmans, she took on the
name of Vijaya Lakshmi on her marriage. To Nehru and close relatives and friends she
was Nan.
She loved the good things of life, was a gourmet in her younger days and an excellent
cook. Like her father and brother, she looked elegant in whatever she wore. It was a joy
to look at this petit and elegant woman. Even in her old age she is attractive though she
has neglected herself in recent years. She was generous and unfortunately extravagant.
This brought her trouble later on.
In the Nehru family only Jawaharlal and Motilal made deliberate decisions to give up
the life of comfort and adopt austerity when they threw themselves into the national
struggle. All the rest, including Vijaya Lakshmi, were swept off their feet by force of
events. Adjustments were not easy.
Vijaya Lakshmi spent 1945 and part of 1946 in the United States where she did good
work for the cause of Indian independence countering the propaganda of the British
and their stooge Girja Shankar Bajpai. Appropriately, she was present in San Francisco
at the birth of the United Nations as an observer.
In 1947 Vijaya Lakshmi was pulled out of the UP Cabinet and sent as Ambassador to
the Soviet Union, a singularly wrong place for her temperament. She did not have the
capacity as her successor Radhakrishnan had, for philosophical detachment. In the
bleak atmosphere of Moscow of the Stalinist era, with its awesome rigidity and
regimentation, she was a square peg in a round hole. Even Nehru was then considered
in the Soviet Union as a running dog of imperialism! Her tenure in Moscow was short
and she was transferred as Antbassador to Washington. She told me that her tenure in
Moscow was a moral defeat but its end was a relief. Washington society suited her. She
revelled in it and loved holding court, entertaining and being entertained. Extravagance
reached the highest pitch. Without permission she withdrew money from Nehru's
royalty account with his American publisher. I had to write to the publisher prohibiting
him from disbursing any amount from Nehru's royalty account to anyone in future
without the written permission of Nehru or myself.
From 1946 onwards, until she was elected as President of the United Nations General
Assembly in 1953, with one interruption, she led the Indian delegations to the UN
General Assembly with distinction. After 1953 Krishna Menon took over from her.

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Vijaya Lakshmi used to be a temperamental person and had the habit of cancelling
appointments at the last moment. She once did this to Henry Cabot Lodge at the UN.
He was naturally annoyed and sent her a message, "There are Brahmans in Boston also."
The old New England families in Boston are called "Boston Brahmans." Cabot Lodge
came from a noted family in Boston.
Soon after Gandhiji's assassination a sealed file kept by Gandhiji was delivered to
Nehru by Rajkumari Amrit Kaur. Nehru opened the file and, after a cursory perusal of
the papers, called me and said, "These are the papers about young Vijaya Lakshmi's
elopement with Syed Hussain. You had better burn them." I pleaded with him to let me
keep them in my archives; but he was not in favour of it. I took the file from him and
went straight to the kitchen in the PM's house and stood there until the papers were
reduced to ashes.
Vijaya Lakshmi had the great gift of being extremely charming when a visitor was face
to face with her and being extremely nasty after the visitor had departed. Perhaps it is
part of the diplomatic process.
I was not unaware of Vijaya Lakshmi's criticism against me, that I was building up
Indira against her. The fact is that I built up nobody against anybody.
After her tenure in Washington, Vijaya Lakshmi returned to India early in 1952 and was
elected to the Lok Sabha. She hoped to become a Cabinet Minister. But Nehru did not
consider it appropriate, under normal circumstances, to have his sister in his Cabinet.
Her election as President of the UN General Assembly in 1953 came as a recompense.
When Vijaya Lakshmi became an MP, the PM asked me to speak to the Works Minister
to allot her a bungalow in New Delhi. I said it would lead to criticism. I suggested to the
PM that the Works Minister might be asked to set apart a few bungalows for MPs who
have been Cabinet Ministers, Governors or heads of missions abroad, as well as for
leaders of opposition groups in both Houses of parliament. Nehru liked the idea and
wrote to the Works Minister. Thus Vijaya Lakshmi got a bungalow without exposing
herself or the PM to criticism.
In parliament Vijaya Lakshmi started getting frustrated. Secretary-General N. R. Pillai,
of the Ministry of External Affairs, persuaded her, in consultation with me, to go to
London as High Commissioner in succession to B. G. Kher. So off she went. As High
Commissioner she created a good impression.

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While Vijaya Lakshmi was in London, the PM received a letter from Ambassador G. L.
Mehta in Washington forwarding a communication from Henry Grady who was the
American representative in Delhi before Grady enclosed a photostat of a letter from
Vijaya Lakshrni, while she was Ambassador in Washington, asking for the loan of a
substantial sum. Her letter gave the astounding reason, of the failure of the Government
of India to remit her salary and emoluments on time owing to foreign exchange
shortage, for soliciting the loan. Grady stated that he failed to get back the money from
Vijaya Lakshmi despite repeated requests. So he asked Ambassador Mehta for his help
in getting the money back. The PM was astonished and wrote to Vijaya Lakshmi in
London asking her to make early payment of the debt.

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In the second half of 1954 the Chairman of the Income Tax Investigation Commission
privately informed the PM that there were entries in the account books of two large
Birla concerns of substantial sums of money having been paid to Vijaya Lakshmi. The
PM asked me to get into touch with G. D. Birla and get confirmation. I was reluctant to
get involved in this. However, I had to do as I was told. G. D. Birla confirmed the
report. He said, "There is only one national leader who has not taken any money from
us, and that is Panditji. All others, including Mrs. Pandit, have." He reeled out all the
important names—from Gandhiji and Sardar Patel downwards. He added that
Jayaprakash Narayan was shown as his Private Secretary in the books of Birla Brothers
and was paid a monthly salary for long years until the assassination of Gandhiji.
Because of Jayaprakash Narayan's attacks on him in connection with Gandhiji's
assassination, Sardar Patel had asked Birla to stop further payments to Jayaprakash
Narayan. G. D. Birla requested me to ascertain from the PM if he should resume
payments to Jayaprakash Narayan. I said, "The PM is not the man to be consulted in a
matter like this. You should take your own decision. If I were you, I would not only
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start paying him but also give him a lump sum to compensate him for the period for
which payments were cut off."
I reported G. D. Birla's confirmation to the PM. He wrote to Mrs. Pandit in London
enquiring about the matter. She replied denying everything. The PM asked me if I could
get any receipts from G. D. Birla. So I reluctantly contacted him again. He said that for
any amounts paid in India in rupees there may not be receipts; but for amounts drawn
in dollars by Vijaya Lakshmi or anyone on her behalf from the agent of Birlas in New
York there would be receipts. He asked me, "Is this not an unprofitable exercise?"
However, he asked his younger brother, B. M. Birla, to obtain the receipts from New
York. The latter got the photostats of the receipts and I showed them to the PM.
I told the PM that it served little purpose to worry about the matter anymore and that
the melancholy chapter might be closed.
On return from her tenure in London, she was sent as Governor of Bombay. In 1962 she
hoped that she would be selected as the candidate for Vice-Presidentship in place of
Radhakrishnan; but Nehru had other ideas. He brought in Zakir Husain.
Sometime after Nehru's death, Vijaya Lakshmi wrote to me from Poona to ask if I could
visit her for a few days as she wished to discuss her future with me. I went. She told me
that she would like to stand for election to Lok Sabha from Nehru's constituency in the
by-election, but that Indira was dead set against it. Lal Bahadur and Kamaraj were not
opposed and she felt that finally she would get the Congress ticket. She asked for my
opinion. I told her that she should enter active politics only if she was mentally
reconciled to being only an MP because, with Indira in the Cabinet, there was not the
slightest chance of a second Nehru woman being in it. I added that if she was not
mentally conditioned, a mere MP's job could only result in frustration and
disappointment. On the other hand, she had all the facilities and time in Raj Bhawan to
write the memoirs she had been planning for a long time. She said she was fed up with
being a Governor who was no more than an organ-grinder's monkey. So she plunged
into politics again and got elected to Lok Sabha. I felt sorry for her.
The years after Nehru's death had been not only an unrewarding but a tormenting
period for Vijaya Lakshmi. She and Indira had never got on well in the past. When
Indira became PM, things became worse for Vijaya Lakshmi. Indira foolishly took
delight in being vindictive to her aunt. She was excluded even from official social
functions. Word went round that contact with Vijaya Lakshmi was viewed with
disfavor. Most people began to avoid her. When things became intolerable, Vijaya
Lakshmi resigned from the Lok Sabha, went away from Delhi and settled down in
Dehra Dun.

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In the 1977 Lok Sabha elections Vijaya Lakshmi came out of her retirement like a
wounded tigress and helped in flattening out her niece. I watched as the inexorable
process of one of the greatest of basic human passions—revenge with a vengeance—
unfolded itself. Vijaya Lakshmi would, of course, say that it was for the restoration of
democracy, rule of law, and human values. That also is not incorrect.
A couple of years ago Vijaya Lakshini asked me, "Why did Bhai drop me completely
during the last phase of his life?" I did not wish to answer that question at the time, and
managed to change the subject. I have already given in this chapter part of the reason.
The other part is that Nehru did not want to build up a rival to his daughter who was
much younger. More about this in the chapter on Indira!

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27. Some Books
S. COPAL'S "BIOGRAPHY OF JAWAHARLAL NEHRU" (VOL. 1)
This is a disappointing book for which the author was extravagantly paid and certain
other facilities were provided by the Nehru Memorial Fund in addition to allowing him
to keep the royalties. The book is as dry as midsummer hay. It reads like a thesis of a
young student for his M. Litt in History. It will remain at best as a miniature filing
cabinet.
A concocted story in the book about what transpired at Krishna Menon's meeting with
Molotov in 1946 should not be allowed to pass as history. Here is what Gopal has
written:
As a step in building up an independent foreign policy unaligned to any Power,
Jawaharlal had preferred to develop informal contacts rather than utilize British
diplomatic representation. Acting as Jawaharlal's personal envoy, Krishna
Menon met Molotov, conveyed the new Government's earnest desire for friendly
relations with the Soviet Union and sought assistance in food-grains. He also,
stepping beyond his brief, spoke to Molotov about the possibility of Soviet
military experts visiting India. This upset not only the Foreign Office and the
Indian External Affairs Department but also some of Jawaharlal's colleagues in
the Congress; and Krishna Menon received the first of, over the years, very many
mildly worded cautions from his chief:
'I want to make it clear that I have complete faith in you and I am quite sure that
whatever step you will take will be taken after full consideration and with a view
not to create any difficulties. So far as I am concerned, that is all right. But other
people, who do not know you well, have also to be taken into consideration and
hence I have suggested to you that you might bear these people also in mind'.
When Nehru appointed Krishna Menon as the personal representative of the VicePresident of the interim government in September 1946 to visit certain European
capitals to pave the way for establishing diplomatic relations, Moscow was specifically
excluded from his itinerary due to opposition from Gandhiji and Sardar Patel. Krishna
Menon was upset at this exclusion. On his return from Western Europe Krishna Menon
wrote a personal note in his own hand and gave it to me. In that he appealed to Nehru
to send him to Moscow to do at least preliminary soundings for establishing trade
relations. Nehru's letter to Krishna Menon dated 13 October 1946, quoted above by
Gopal, was in reply to that.
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Nehru wrote a letter to Molotov on 21 September 1946 and sent it directly to Moscow.
In it he had enquired if the Soviet Union could render some food assistance to India. As
Soviet Foreign Minister M. Molotov, happened to be in Paris for the Peace Conference,
V. K. Krishna Menon, who was then in Europe, was asked to pay a personal visit to him
to convey the request for food assistance as well as the greetings of the interim
government. This was disclosed by Nehru in the Central Legislative Assembly.
So the British Foreign Office, which in this context is the British Intelligence, planted on
S. Gopal an absurd story of what transpired at the meeting between Molotov and
Krishna Menon. Gopars concern at the British Foreign Office and the Indian External
Affairs Department getting upset is amusing. The Indian External Affairs Department
at that time consisted of Weightman, Duke, Fry and the young H. Dayal whose
qualification was that he knew nothing about foreign affairs.
Whatever might have been Krishna Menon's faults, he was not capable of any blatant
violation of Nehru's directives, more especially in the early stages.
It was foolish to seek assistance in foodgrains from the Soviet Union as that country had
no surplus food so soon after the war during which it had lost Ukraine and certain
other fertile regions to the Germans, apart from the continued adverse effects of the
scorched-earth policy during the war. It was one of Nehru's impulsive moves. I was
then not working in government as I had refused to join government for a whole year
and preferred to assist Nehru at his residence. I have no recollection of India having
received any foodgrain assistance from the Soviet Union in the early years of our
independence.
The facts about the spadework for establishing diplomatic relations between India and
the Soviet Union are as follows:
In the autumn of 1946 Vijaya Lakshmi Pandit was leading the Indian delegation to the
United Nations General Assembly. V. K. Krishna Menon was not a full delegate; he was
an alternate delegate. K. P. S. Menon was the Secretary-General of the delegation as well
as an alternate delegate. Nehru sent a telegram to the leader of the Indian delegation
suggesting that Krishna Menon and K. P. S. Menon might proceed to Moscow after the
General Assembly session and broach with the Soviet Government the question of
establishing diplomatic relations. The matter was mentioned to a Soviet delegate by the
Secretary-General of the Indian delegation to be conveyed to Molotov, the Soviet
Foreign Minister, who was leading the Soviet delegation. Thereupon, Molotov invited
Mrs. Pandit and the entire Indian delegation to a delightful luncheon at his house, with
vodka and wine flowing freely. By the time lunch was over, diplomatic relations had
been practically established between India and the Soviet Union. Molotov said that it
was unnecessary for anyone to go to Moscow for this purpose, that he would
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communicate with his government, and that he felt certain that the Soviet Government
would only welcome our move.
It might be mentioned that during Nehru's lifetime Krishna Menon never visited the
Soviet Union. I believe that it was in 1967 or thereabouts, when he was no longer in
government, that Krishna Menon first visited the Soviet Union. It was in connection
with some meeting of the World Peace Council.
Gopal has, several times in his book, referred to Krishna Menon as an Anglophil. It
seems to be a case of the pot calling the kettle black.
MAULANA AZAD'S "INDIA WINS FREEDOM"
This is a book dictated to Humayun Kabir by Maulana Abul Kalam Azad in the
evenings when the latter used to be in an expansive mood.
The Maulana has praised Nehru for dropping the case against the political officer in
Malakand, North-West Frontier Province.
This official acted in an unabashed manner as the virtual agent of the Muslim League
by instigating tribesmen to stage demonstrations against Nehru during his visit to that
area in the middle of October 1946 and to fire at him and his party. Nehru and Khan
Sahib were in the first car. I was following in the second car with a couple of senior
police officers. Nehru's car was hit by a bullet. We all got down. A bullet whistled past
me almost touching my nose. For the first time I felt content that I did not have a
pronounced nose.
On return to Delhi, Nehru took up the question on disciplinary action against the
criminally erring official. Viceroy, Lord Wavell did everything to frustrate it. It dragged
on and Nehru finally let it slide in disgust. He made no secret of his displeasure. The
Maulana's conception of magnanimity to an official charged with criminal misconduct
is absurd.
Maulana Azad says that when the first dominion government was formed on 15 August
1947 Gandhiji had insisted that he should take up the Ministry of Education as it was of
vital importance. This is totally incorrect. On Gandhiji's usual silence day on a Monday
he wrote a personal letter to Nehru on the inside of a used envelope advising him not to
make Maulana Azad the Education Minister as he was convinced that the Maulana
would ruin education. Gandhiji added that the Maulana should be a Minister without
Portfolio in the Cabinet and function as an elder statesman. Nehru could not comply
with Gandhiji's wishes because the Maulana adopted the attitude "Education or
nothing."

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Gandhiji's letter is in the archives I painstakingly built up from 1946 onwards and left
behind in the old Prime Minister's house, now called Teen Murti House.
Incidentally, Gandhiji's choice for the Education Ministry was Zakir Husain.
HIREN MUKERJEE'S "THE GENTLE COLOSSUS"
Of all the books written about Nehru after his death, this little book has appealed to me
the most. Of course, its size proclaims that it is not an exhaustive biography. And the
author has no pretensions on that score.

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28. Maulana Abul Kalam Azad
This handsome, impressive-looking Muslim divine, made more impressive by his neat
moustache and well-trimmed goatee with tall fez cap, was an orator in chaste Urdu.
During the rare occasions he spoke in parliament, there was a rush for seats. He was a
divine-only in so far as his vast knowledge of Muslim religious lore and his
internationally famous commentary on the Koran were concerned. For the rest he was a
man of the world who loved the good things of life.
In 1945, soon after his release from prison, some puritanical people reported to Gandhiji
that the Maulana was drinking regularly in jail. Rajkumari Anirit Kaur told me that at
their first meeting after release from jail, Gandhiji had asked the Maulana whether he
drank. The Maulana denied the reports. An element of doubt persisted in Gandhiji's
mind.
On 28 April 1946, while the Congress Working Committee was still engaged in
examining the British Cabinet Mission's proposals, news reached Gandhiji that the
Maulana, who was then Congress President, had written a letter to the Cabinet Mission
without the knowledge of the Working Committee or himself. Humayun Kabir was the
one who drafted the letter. The Maulana found similarity between his ideas of the
solution of the communal problem and the ideas of the Cabinet Mission. The Maulana's
solution was the maximum decentralization of power in the federal structure, with the
provinces enjoying the largest measure of autonomy in all subjects, leaving the centre
only with defence, foreign affairs, and communications. The Cabinet Mission found in
the Maulana an ally in their difficult task. In the private letter to the Cabinet Mission,
the Maulana had stated that there was no need for the Cabinet Mission to worry too
much about Gandhiji or his misgivings about the Cabinet Mission's proposals. At the
instance of Gandhiji, Sudhir Ghosh managed to get the letter as a temporary loan from
the Cabinet Mission. As Gandhiji finished reading the letter and putting it aside on his
small, low writing desk in front of him, the Maulana arrived for his previously arranged
interview. Rajkumari Amrit Kaur, who was sitting behind a screen nearby, told me
much later that she heard Gandhiji asking the Maulana a straight question whether he
had written a letter to the Cabinet Mission about the negotiations in progress. The
Maulana flatly denied having written any such letter. Gandhiji was stunned and deeply
hurt at the Maulana's untruthfulness to him.
Again, on 22 June 1946, it was known that the Maulana had written a private letter to
Viceroy Lord Wavell assuring him that, as Congress President, he would see to it that
no Muslim name was included in the Congress list for the interim government, and if
his own name was proposed, he would not agree to its inclusion. Again, the letter was
drafted by Humayun Kabir. This upset not only Gandhiji but also Nehru and other
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members of the Working Committee. Events overtook the Maulana and others and
Nehru replaced the Maulana as Congress president. Actually, Nehru included three
Muslims in the interim government which took office on 2 September 1946. The
Maulana then had no choice but to keep out.
I have referred to the Maulana in several other chapters. The Maulana was a vindictive
man. His fierce opposition to Krishna Menon stemmed from the fact that during his
visit to London a code telegram sent to the High Commission for the Maulana by the
PM was delivered to him only seven days after its arrival in London. Also, Krishna
Menon generally neglected the Maulana. Krishna Menon ought to have known that the
Maulana was vain and sensitive, and it would have done Menon no harm if he had
arranged for the Maulana some "spiritual nourishment."
When the Maulana visited Germany, he stayed at the embassy in Cologne as the guest
of Ambassador A. C. N. Nambiar who, as a meticulous person and an excellent host,
knew the Maulana's tastes and habits. He set up a small bar in the Maulana's room with
plenty of whisky, brandy, Moselle white wine, Rhine red wine, and French vintage
champagne. The Maulana specially liked champagne while abroad. Nambiar
discovered that the Maulana was most hap& to be left alone in his room surrounded by
the bottles. Nambiar had only one complaint. He had invited several important
Germans, ministers and others, for a dinner in honor of the Maulana. Immediately after
the dinner the Maulana sneaked out and remained in his room alone sipping
champagne. The same thing happened later in London where the Maulana stayed at the
High Commissioner's residence in the Millionaires' Lane as the guest of Vijaya Lakshmi
Pandit, who gave a dinner in honor of the Maulana. The guests included Sir Anthony
Eden, Lord Mountbatten and several other dignitaries. The moment dinner was over,
the Maulana quietly disappeared without attracting anyone's notice. Soon, Eden and
others asked where the Maulana was. Mrs Pandit had to resort to a diplomatic white lie
to save face. The fact was that the Maulana was in his room sipping champagne.
On return from the tour, the Maulana was all praise for Nambiar as our best
Ambassador abroad. T. T. Krishnamachari, without imbibing champagne or any other
fluid, said the same thing about Ambassador Nambiar after his visit to Germany. Seeing
that Ambassador Nambiar had no wife, TTK told me that he would sanction a social
secretary for him if the External Affairs Ministry would send him a note. This was done.
In Delhi, the Maulana never attended a dinner party. He came to the PM's house only
for lunches in honour of important foreign dignitaries. At Cabinet meetings, which
were normally fixed for 5 P.M. or soon after, the Maulana would get up at the stroke of
six, regardless of the importance of the subject under discussion, and leave. Soon he
would be before his whisky, soda and ice and a plate of samosas. Only a few persons
were allowed to see him while he was drinking. They included Nehru, Aruna Asaf Ali,
Humayun Kabir and a Private Secretary whom he personally liked. Nehru avoided
seeing him in the evenings except when there was something urgent to discuss.
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One day the Maulana's favorite Private Secretary came to see me privately. He told me
that he was worried about the Maulana because he was imbibing half a bottle of whisky
every evening.
Falls were not infrequent. In fact he had broken his back in a fall and had to wear a
metal plate to support his back. Since then an able-bodied man was always available to
support the Maulana whenever he got up during and after his drinks. The Private
Secretary told me that the only person the Maulana would listen to was the PM. He
asked me, "Can't Panditji speak to the Maulana and ask him to limit his pegs?" I
promised to convey his suggestion to the PM. When I spoke to Nehru, he simply
smiled.
As a departmental minister, the Maulana was a disaster, as Gandhiji had feared. He
made no contribution to education. He left everything to the trio—Humayun Kabir, K.
G. Saidayin and Ashfaque Hussain.
It must be said to the credit of the Maulana that among colleagues he was a rare one
who was not afraid of Nehru. He spoke out his mind without fear or any inhibition.
Around 1956, while the PM was in London, a telegram came from Cabinet Secretary
Sukthankar saying that the Maulana was insisting on being officially referred to as
Acting PM. He asked for instructions. Nehru replied that there was no such thing as
Acting PM as long as he was alive; his absence from India made no difference; and that
only the President can designate an Acting PM which can normally be if the PM is
incapacitated.
The Cabinet Secretary was asked to send a copy of the telegram to the Maulana. The
next day the senior PTI representative in London came to set me and said that a comic
situation had developed in India and the Maulana had arrogated to himself the title of
Acting PM, and was going about with a motor-cycle in front and a security car behind,
thereby making himself ridiculous. He added that the only thing the Maulana had not
done was to move into the PM's house. I explained to him the correct position as
contained in the PM's telegram to the Cabinet Secretary. The PTI representative beamed
it to India as a statement from me. On seeing it, the Maulana became furious. He sent a
strongly-worded telegram to the PM protesting against my "statement." The PM replied
to him giving the circumstances in which I had to explain the position to the PTI
representative who should not have used my name. The PM also added that I was not
lacking in respect for the Maulana. When we arrived in Bombay from London, Morarji
Desai was at the airport. He took me aside and complimented me for my "statement." I
told him the Maulana was furious with me, to which he replied, "What does it matter to
you?"

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The Maulana was not wholly free from communalism as Raft Ahmed Kidwai was. In
the selection of candidates for the 1952 general elections, the Maulana would arrive
with lots of slips containing Muslim names and passionately plead for them. U. S.
Malliah, who was co-General Secretary of the AICC with Lal Bahadur, got fed up with
the Maulana. He played two tricks on the old man. When the Tamil Nadu list came up,
Malliah had asked his friend Kamaraj to absent himself during the morning session.
During that period Malliah criticized the Tamil Nadu list in so far as a particular
constituency was concerned. Malliah suggested the name of a Muslim to replace the
candidate suggested by the Tamil Nadu Congress Committee. The Maulana was very
pleased and said, "Rakho Bhai" (keep it brother). In the afternoon Kamaraj appeared on
the scene and asked for reconsideration of the candidate for the particular constituency
as the Muslim candidate had died thirty years previously and that Malliah was not
aware of the death of that prominent nationalist Muslim. Everyone laughed except
Kamaraj and Malliah, and the Maulana looked foolish.
Before the Kerala list came up, Malliah had a talk with the representatives of the Kerala
Pradesh Congress Committee. In the predominantly Muslim areas of Moplahs in
northern Kerala, where the Muslim League was sure to win, the KPCC had decided not
to contest. At Malliah's request, they gave him a supplementary list of constituencies
and names of Muslims who could be persuaded to file their nominations by giving
them the deposit money. Malliah told them that the AICC would give the KPCC an
additional grant to cover the deposit money. He told therh that no money should be
spent on campaigns in those constituencies. When the KPCC's original list came up for
consideration, Malliah held forth and said that in a state where one-third of the
population was Muslim, the KPCC list contained only three Muslims for the assembly
elections. He said it was shocking and reeled out the names of constituencies and
Muslim candidates who could be put up. The Maulana was very pleased and thereafter
considered Malliah a truly noncommunal Congressman—which, of course; he was.
Eventually, all the Muslim candidates whom Malliah had added, lost their deposits—as
Malliah knew in advance.
The Maulana's greatest opponent in the Congress was Vallabhbhai Patel and his
staunchest supporter was Nehru who had affection for him and showed him deference
as an elder even when he disagreed with him.
In the previous chapter I have referred to the Maulana's book India Wins Freedom. The
Maulana, who had already lost his credibility, bad dictated the book in the evenings to
Humayun Kabir when he was inebriated. The unpublished portion of the book in the
possession of the National Archives, when released to the public, should be treated with
the caution and reserve it deserves.

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29.

She

Chapter 29 titled "She" was withdrawn by the author at the last minute
due to the contents being "intensely personal". But the following
unverified material has been in circulation. The rumor was that the
author was forced by Indira Gandhi to withdraw it in any way. Here is
what publisher wrote: "This chapter on an intensely personal experience
of the author's, written without inhibition in the D. H. Lawrence style,
has been withdrawn by the author at the last moment. PUBLISHERS - 1
November 1977."
She has Cleopatra's nose, Pauline Bonaparte's eyes and the breasts of Venus. She has
hair on her limbs which have to be shaven frequently. Physically and mentally she is
more of a male than a female. I would call her a manly woman.
I met her first in her ancestral home in the winter of 1945. She then had a baby son of
crawling age and who was a cry baby. My first reaction was that she was a conceited
girl with unhappiness written all over her face. Her second son, born in December,
1946, was an unwanted child. As a baby he had to be circumcised to remove a defect. By
1947 her cup of unhappiness was full and fortune took possession of her face.
In the autumn of 1946 her father gave her a small Austin car. She wanted me to teach
her driving. In the initial stages, I used to take her to the Viceroy's bodyguard's Polo
Ground for lessons. She was quick in learning. Then I stopped the driving lessons
because she was getting into the advanced stage of pregnancy. I told her I didn't want
her to take any risk going into the open roads learning driving. Her second son was
born in the middle of December 1946. By the middle of February 1947, she was ready to
resume driving lessons. We went into the roads and to Connaught Circus. Then I told
her "you just imagine that you know everything, concentrate, consider the person
driving a car from the opposite direction is a fool, and go along with confidence driving
the car, take a round of Connaught Circus and come back". She did that and returned in
triumph. The driving lessons ended there.
Before the middle of 1947, she asked me to take her out to a cinema. From then on we
used to go out for pictures as often as I was free – which was not frequent.
She looked forward to taking me out driving over the Ridge with the jungle on either
side. She hated small cars. So we used to go in my car which was a Plymouth. She liked
to go into the wilds where there were ruins. Drives to regions beyond Qutab Minar
were favored. One day, during an aimless drive, she told me complainingly "You do not
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love me". I said, "I do not know; I had not thought about it". By the autumn of 1947, I
knew she had fallen headlong in love with me without my taking any initiative in the
matter. Her face would light upon seeing me. She started talking to me about herself.
She said that sometime after her marriage, she discovered that her husband was not
faithful to her. This came to her as a great shock because she married him in the teeth of
opposition from every member of the family. She said she began to lose her saris, coats,
blouses, shoes, and handbags. She suspected the servants until she discovered some of
her lost things on the persons of two women at a party. These women were known to be
friendly with her husband. She also found out to which women her husband had given
the books stolen from her book-shelves.
She made it known rather discreetly what her intentions were about me. I told her I had
two inhibitions: (1) I did not like to fool around with married women; (2) my loyalty to
her father prohibited anything such as she had in mind. She was immediately
forthcoming about No. 1. She assured me that some time ago she had stopped having
anything to do with her husband. She added: "I can no longer bear the thought of his
touching me". She further confided in me "fortunately he has also gone impotent
though he retained his attraction to women". About No. 2 she was angry with me and
asked "What has my father got to do with it? Am I a minor?"
Since then she spent as much time with me as possible and ridiculed me for my attitude
to her father in so far as she was concerned. But I continued to resist gently. I was not
mentally prepared or reconciled as yet.
On the 18th November 1947, she took me to her room and kissed me full on the lips and
told me "I want to sleep with you; take me to the wilds tomorrow evening". I told her
that I had very little experience with women. She said "all the better". So on the 19th,
which was her birthday, we went driving out and chose a place in the wilderness. On
our way back I told her that I had some revulsion about milk in her breasts (though she
had stopped breast-feeding the child a while ago). Afterward, she did something about
it and soon went completely dry. She discovered that I knew little about sex, and gave
me two books, one of them by Dr. Abraham Stone about sex and female anatomy. I read
them with profit.
She was not promiscuous; neither did she need sex too frequently. But in the sex act she
had all the artfulness of French women and Kerala Nair women combined. She loved
prolonged kissing and being kissed in the same fashion. She had established a
reputation of being cold and forbidding. She was nothing of the kind. It was only a pose
as a feminine measure of self-protection. She was a passionate woman who was
exceptionally good as a wriggler in bed. During the twelve years we were lovers, I was
never satisfied with her.

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Progressively she became hostile to the fat female family friend who used to come to
stay. Ever since she saw the family friend welcoming me on arrival with a hug and an
innocent kiss on my cheek, she became jealous and livid with rage against the family
friend. Occasionally the family friend used to ask me to take her and my "she" to a good
cinema whenever there was one in town. My "she" could cleverly see to it that I did not
sit near the family friend but only next to her as third in the row.
The day before the next time the family friend was expected to arrive "she" asked me to
take her out into the wilds after sundown. In the car I asked her 'what is the big idea? I
have some urgent work to do'. She replied 'as long as the fat one is here, I will keep
away from you because I do not want you to touch me after she has touched you.' I
assured her that I had absolutely no interest in the fat one. Eventually, 'she' got used to
the fat one's friendly welcome and departure gestures to me.
She tried hard to persuade me to occasionally go up to her room while her husband was
there, sit down and talk to them both. I told her that I had no intention of practicing
deception. So she used to bring him to my study occasionally.
She used all kinds of devices to ensure that her children spent as little time with their
father as possible. She told me that she did not want any influence of their father on
them because she was convinced that his influence would be bad for them. She
concluded by saying: "I do not want my children to grow up as champion liars." This
was one of the reasons why her husband was shifted to a separate room.
Once I mentioned to her something which her husband had told me. She said: "Don't
believe a word of what he says. I have learnt it to my bitter cost".
She wrote to A.C.N. Nambiar, whom she had known personally for a long time and
who was also a friend of her father and mother, asking for his opinion about divorcing
her husband. She knew that Nambiar was a dear friend of mine. Nambiar replied to her
to say that under certain circumstances it was preferable to have a clear break to living
in make-believe. I did not encourage her in this matter, mostly for the sake of her father.
One day, she told me that she could not bear the thought of being married to a Hindu. I
told her "It is a compliment to the galaxy of great men Hinduism has produced through
the ages".
I never encouraged her to come to my bedroom. On one occasion she came. It was past
midnight. I was fast asleep, having worked till midnight; she lay down beside me and
gently woke me up by a kiss. I asked her "What is the matter?" She said: "I had to come".
I did not know if she had been troubled in mind. I told her: "Let us lie here quietly and
do nothing unless you want to". She said: "On this occasion, I only want to be with you".
She lay there relaxed till about 4 in the morning, and gently tip-toed to her room
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upstairs. Before going away she told me: "I never told you that once I thought of
committing suicide. Such thoughts do not come to me anymore. You have given me
back my happiness."
Once, early in our life of love, she told me, "I never knew what real sex was until I had
you". At the height of her passion in bed, she would hold me tight and say "Oh, Bhupat,
I love you". She loved to give and receive nick-names. She gave me the name of Bhupat
the dacoit, and I promptly gave her the name of Putli, the dacoitess. In private we used
to call each other by these names. About her protestations of love in her romantic
excitement, I quoted to her once two passages from Byron's Don Juan:
"Man's love is a man's life, a thing apart, It is a woman's whole existence. In her first
passion woman loves her lover; In all others all she loves is love".
She replied, "all right, I want you to tell me as often as possible, not in bed, that you
love me". I tried my best to oblige her. In fact, there was no difficulty, for I had fallen
deeply in love with her.
One evening, I found her disturbed. When she saw me, she burst into tears. I asked her
what had happened. She said that when she came from her dressing room to drink her
usual glass of milk, she discovered that there was finely powdered glass in it. The
powder was floating on the thick cream. At the first sip she immediately sensed it in her
mouth and spat it out. She said that from her dressing room she heard her husband
sneaking into her bedroom and making an exit. She controlled herself, put her arms
round me and holding me tight, said: "Oh, Mackie, I love you; I am so glad you came
up."
In the Constellation plans on our first visit abroad together, she was all excitement
when we were in sight of Mont Blanc. She said softly to me, "I like the Queen Bee, I
would like to make love high up in the air". I asked her: "Didn't you ever dream of
soaring higher up like an eagle and surveying the world? I woke up from such a dream
once and found myself on the floor, for I had fallen from the bed without breaking any
bones". She knew I was pulling her leg. On reaching London, she found out the first free
meal-time for her, and arranged for me to take her to a quiet restaurant. On reaching the
restaurant, I asked her to order the food; I said I would have the same as hers with the
addition of six large raw oysters on ice with appropriate sauce to begin with. She said
she too would have it. The main dish she ordered was veal. She said, "Ever since I
arrived here, I have been dying to eat veal". I asked her if ever she had read Vatsayana's
Kama Sutra. She said, "No, why?" I told her Vatsayana had prescribed veal for a young
couple for six months before marriage. She had not even read the Ramayana or the
Mahabharata. Her knowledge of the Ramayana was only what her grandmother had
told her. In many ways, she was a denationalized person.

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She did not like artificial birth-control aids. Once in the early fifties she got pregnant by
me. She decided to have an abortion done. She went to the British High Commission
doctor whom she knew personally, but he refused to help. So she went to her ancestral
home and got in touch with a lady doctor whom she knew personally and in whom she
had perfect confidence. On this trip she took her second son with her. After a fortnight
the mother and the little son returned with the good news that the boy was cured of his
defect in speech in the natural process. Earlier he could not pronounce "R", and the
mother was worried about it; she was in a frantic search for a speech-correction expert.
On the day of her return, she told me that the whole thing came out without any
medication or aid.
Was the father aware of her attachment to me? The answer is in the affirmative. Every
time he had to go out for dinner, he knew where to find her. Fifteen minutes before the
time of departure, she would come fully decked up and sit in front of me in my study.
At the stroke of the appointed time the father would pass my study and call her out.
In the winter of 1958 I happened to see something by sheer chance. Immediately after
lunch, I went to convey some urgent information to her. She had already closed the
door. I knocked; after about five minutes she half-opened the door and peeped out. I
discovered that the curtains were drawn and a tall, youngish handsome, bearded man –
a Brahmacahri – was in the room. I came away saying "I had something to tell you; but I
shall say it later". That was the end of our relationship. She tried to make me believe
several times that the scene I witnessed meant nothing more than some "yoga" and
"spiritual" lessons. I gave her the definite impression that I was not interested in her
explanations. Gradually she grew bitter against me. In fact, ultimately she became my
deadly enemy – which constantly reminded me of the famous couplet of William
Congrave:
"Heaven has no rage like love to hatred turned, nor hell a fury like a woman
scorned."
Within a fortnight of the incident, I collected all her passionate letters and returned
them to her. A year later I came across some more in my old papers. They were also
returned to her.
There is an erroneous belief among some that she and her husband came together
during the last two years of the husband's life. Enough had happened in their lives that
a reunion of hearts was not humanly possible. It is true that she was kind and
considerate to him during his illness. Certain things were done during this period and
more specially at the cremation and collection of the ashes of the husband and welladvertised to give certain desired impressions. They were all for public consumption,
for, by that time, she had emerged as a full-fledged political animal.

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30. V. K. Krishna Menon—I
Krishna Menon was born in 1896. He completed his college education in Madras and
became a follower of Annie Besant. He was put in charge of scouting. In 1924, at the age
of twenty-eight Annie Besant sent him to England to teach in a theosophical school in
Letchworth. He taught for a year and in 1925 obtained a London diploma in teaching.
From 1925-27, he studied political science under Harold Laski in the London School of
Economics and took a B.Sc. He became Joint Secretary of Annie Besant's
Commonwealth of India League. He was called to the bar at the Middle Temple in 1934
at the age of thirty-eight when all one had to do was to eat a few dinners in dinner
jackets. Actually he never studied law; in London he had no legal practice worth
mentioning.
Much has been made of his editing books in London. Editing meant condensing. He
edited only the first batch of Pelican books. He was in partnership with Allen Lane of
Bodley Head. Lane soon found Krishna Menon a strain on his nerves and called him a
bottleneck. Thus ended the partnership.
Krishna Menon stayed in the slum areas of London in extreme poverty. For long years
he subsisted on innumerable cups of tea, biscuits and sometimes lentil cutlets. In the
process he damaged his health.
A south Indian journalist, as a command performance, wrote extensively on Krishna
Menon. He would have us believe that Krishna Menon's family was accustomed to
wealth; that his father belonged to a line of Rajas who enjoyed royal privileges; that
considerable luxury surrounded Menon's years of childhood; and that, in the wake of
idealism, Menon cut himself off from riches and pleasures. If you tell this to anyone in
north Kerala, he will laugh. Actually Menon's father, Krishna Kurup, was one of the
junior pleaders of a landlord in the small town of Tellicherry. The same south Indian
journalist would have us believe that Krishna Menon was a modern Siddhartha who
rejected the world and all its attendant pleasures and comforts and found
enlightenment under a horse-chestnut tree in St Pancras!
When the Commonwealth of India League disintegrated, Krishna Menon converted it
into the India League with himself as Secretary. A group of well to do Indians in
England, mostly doctors, provided financial assistance to the India League. Krishna
Menon ran it as a one-man show and refused to render accounts of the money which
passed through India League. He also received financial assistance for meeting his
personal needs. But gratitude was not in his nature. Some believe that the secret of his
success as an agitator was his ability to identify the cause with himself. This meant that
if you supported India's independence, you had to support Krishna Menon; supporting
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anyone else was unpatriotic. He believed in the proposition, "Those who are not for me
are against me," and refused to entertain the proposition, "Those who are not against
me are for me." This stemmed from his incurable intolerance.
Before he became High Commissioner in London in August 1947, after having watched
his tendency to play the lone wolf and refusal to hunt with the pack, and his extreme
hatred of his former sincere supporters and helpers, I asked Krishna Menon, "Do you
believe in the theory that hatred is stronger than love?" He replied, "Yes." He had not
read Turgenev's short story about his hunting, his ferocious dog, and a mother bird
protecting her fallen chick. The dog retreated in the face of the mother bird's incredible
courage and aggression emanating from love. After watching the scene Turgenev
concluded, "Love is stronger than hatred." I told Krishna Menon that he should read
that short story. Subsequent events proved that he did not benefit from it if he ever read
it.
With the starting of Gandhiji's noncooperation movement, Mrs. Besant wrote her
famous editorial in New India under the title "Brickbats must be Answered by Bullets."
She, and moderates like Srinivasa Sastri, followed it up with a series of lectures at the
Gokhale Hall in Madras.
At the thought of Gandhiji's arriving in London for the second Round Table Conference
in 1931, Krishna Menon used to get so agitated that he would call down imprecations.
He created a scene at 145 Strand once while Gandhiji was on the high seas. Throwing
up his arms like a Druid invoking a curse, he said to a small group of Indians, "I wish
that ship would go down to the bottom of the sea with that man." Menon had
mortgaged his mind to Mrs. Besant for so long that he had not yet recovered from its
effects.
Krishna Menon's eyes were opened when news reached England about the repression
in India in the wake of Gandhiji's Civil Disobedience movement after the second Round
Table Conference. He arrived in India in 1932 as Secretary of an India League
delegation comprising three Labour MPs, Monica Whately, Ellen Wilkinson and
Leonard Masters. During the delegation's sojourn in India, Krishna Menon had an
interview with Nehru. Menon came into real contact with Nehru during his brief visit
to England in 1935-36, during Kamala Nehru's illness abroad. Krishna Merton
organized Nehru's programme in London. Nehru also put him in charge of the
publication of his autobiography, which he succeeded in messing up. Again, on his
brief visit of less than a week to Spain in 1938, Krishna Menon accompanied Nehru.
Afterwards Nehru, together with Indira, visited Czechoslovakia where A. C. Nambiar
looked after him. I have referred to Nehru's visit to Spain in the chapter "Nehru's
Sensitivity to his Surroundings."

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I first met Krishna Menon in New Delhi in 1946. He came about the time the interim
government was formed on 2 September 1946. I did not like his lean and hungry look,
nor his nose which resembled a vulture's beak. He had unkempt hair, perpetually
reminding people that he needed a haircut. He wore cheap and badly cut English
clothes. Fortunately, he did not wear a hat—otherwise he would have looked like a
tramp. He had all the characteristics of a man who had lived in the slum areas of
London for long.
Krishna Menon's appointment as Nehru's personal representative in Europe in
September 1946 to facilitate establishment of diplomatic relations has been mentioned
in the chapter "Some Books."
At Nehru's instance, the Preamble to the Constitution was drafted by Krishna Menon.
Nehru made a few verbal changes and presented it to the Constituent Assembly which
passed it.
The decision of the Constituent Assembly on 22 January 1947 to declare India a
Sovereign Independent Republic was bound to be interpreted by British leaders as an
attempt to dispose of all prospect of Indian membership of the Commonwealth. To
allay such fears, Nehru, in his speech in the assembly on 22 January 1947, said, "At no
time have we ever thought in terms of isolating ourselves in this part of the world from
other countries or of being hostile to countries which have dominated over us. We want
to be friendly with the British people and the British Commonwealth of Nations."
With the arrival of Mountbatten as Viceroy, Krishna Menon became active and
constituted himself as an honest broker much to the annoyance of Sardar Patel and
Maulana Azad. Sardar Patel never gave Krishna Menon a proper interview. Whenever
he asked for one; the reply from Patel's house was, "He can join him on his walk at 5
A.M." Nothing was more inconvenient to Menon; but he had no choice.
One day Nehru told me that Mountbatten had mentioned about Krishna Menon being
closely related to the royal family of Cochin and that, according to the matriarchal
system obtaining in Cochin, Krishna Menon would succeed then present incumbent as
the Maharaja of Cochin. Nehru asked me if I knew anything about it. I laughed and said
that obviously Krishna Menon had managed through someone to take Mountbatten for
a ride. I told Nehru that, much to my amusement, Krishna Menon had told me
sometime before about his relationship with royal families. Living in the London slums
in abject poverty for long, Krishna Menon developed a type of inferiority complex
which prompted him to invest himself with imaginary royalty. Menon's younger sister,
Narayani Amma, was married to a poor member of the Cochin family. The man was
then a translator (Malayalam) in the Madras government secretariat. He retired from
this lowly job and returned to Cochin. In his dotage he became the senior most member
of the family and became the Maharaja for a very brief period. According to the
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matriarchal system the wife of a Maharaja is no more than a mistress; it is the offspring
of the Maharaja's sisters who are the heirs. The Maharaja is not entitled to give anything
to his wife from the family property. Nehru told me that I might enlighten Mountbatten
on this subject whenever I met him in the normal course. However, I did not bother to
do any such thing. But when Mountbatten gave expression to his "discovery" at a recent
meeting in London, had to correct him.
When the dominion government was formed on 15 August 1947 Nehru wanted to
include Krishna Menon in the Cabinet. Gandhiji firmly opposed it; and Nehru dropped
the idea. Not even Sardar Patel knew about it. Krishna Menon was never told of this.
Nehru never thought of Krishna Menon as High Commissioner in London. Krishna
Menon grew fidgety. He enlisted Mountbatten's support. Mountbatten at last
recommended Krishna Menon's appointment as High Commissioner. Mountbatten also
spoke to Gandhiji privately. Thus the decks were cleared.
A couple of days after the announcement of his appointment, Krishna Menon came to
me, beaming. He said he had secured the appointment of A. K. Chanda as Deputy High
Commissioner and said, "He is the most brilliant man in the whole of the civil service in
Delhi." I replied, "If you would give him a free hand in administration and control of
the supply organization, he could be of enormous help." I warned him, "If you keep him
idle and generally neglect him, he can prove to be too much of a handful for you." In
1948, when I met him in London, Krishna Menon told me bitterly, "Chanda has turned
out to be a nitwit." I said I could not understand how the "most brilliant man in the
whole or the civil service" could suddenly become a nitwit. Krishna Menon shared with
T. T. Krishnamachari the quality of being extremely temperamental. I suppose most
men who suffer from ulcers, are like that. The fact is that Krishna Menon denied
Chanda any freedom to function; and Chanda became a bundle of complaints biding
his time to return to India.
In 1948, while I was in London with Nehru for the Common-wealth Prime Ministers'
Conference, Krishna Menon gave me the names of a few Indians who should not be
allowed to meet Nehru. I discovered that they were all Prominent men who sincerely
supported the India League and Krishna Menon personally. I told him that Nehru
should not appear as a partisan and he should meet anyone he liked, subject to time
being available. And Nehru did meet them all.
There was a Bengali group in London which had a rival organization to Krishna
Menon's India League. Soon after Krishna Menon took over as High Commissioner,
they invited Sarat Chandra Bose to London in 1947. Bose made a few well-publicized
speeches in London attacking Krishna Menon personally and indirectly Nehru's foreign
policy. These speeches were widely reported in Indian newspapers. It was known that
Sardar Patel, Home and Information Minister, connived at it.
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Sarat Chandra Bose's fulminations in London were, in a sense, an extension of his
brother Subhas Bose's opposition to the Congress foreign policy which was developed
by Nehru. About this Nehru had written as early as 1944:
In 1938 the Congress sent a medical unit consisting of a number of doctors and
necessary equipment and material to China. For several years this unit did good
work there. When this was organized, Subhas Bose was President of the
Congress. He did not approve of any step being taken by the Congress which
was anti-Japanese or anti-German or anti-Italian. And yet such was the feeling in
the Congress and the country that he did not oppose this or many other
manifestations of Congress sympathy with China and the victims of fascist and
Nazi aggression. We passed many resolutions and organized many
demonstrations of which he did not approve during the period of his
presidentship, but he submitted to them without protest because he realized the
strength of feeling behind them. There was a big difference in outlook between
him and others in the Congress Executive, both in regard to foreign and internal
matters, and this led to a break early in 1939. He then attacked Congress policy
publicly and, early in August 1939, the Congress Executive took the unusual step
of taking disciplinary action against him, who was an ex-President.
Sarat Chandra Bose's performance in London had one lasting effect on Nehru inasmuch
as he felt convinced that the attack on Krishna Menon was an attack on him. Nehru held
this view tenaciously till the end of 1962, or till the final exit of Menon from
government. Krishna Menon and some of his cronies found this fallacious theory quite
handy and assiduously spread it. Indira also fell a victim to it.
Within a year of his becoming High Commissioner, Krishna Menon recruited a
substantial number of local Indians to the Mat Commission staff. Some of them were
known Communists or with close Communist connections. Krishna Menon failed to
realize that the British Labour Government was not fond of Communists and fellowtravellers. Soon, the British Government made it known to the External Affairs Ministry
in New Delhi through the British High Commissioner that the British Government had
reluctantly decided not to pass on any secret and other classified material to India
House so long as sensitive posts were held by known Communists and Communist
sympathizers. Nehru was annoyed with Krishna Menon and sent Commonwealth
Secretary S. Dutt to London to make inquiries. Krishna Menon resented Dutt's visit.
Ultimately Krishna Menon had to terminate the services of a number of locally-hired
staff.
In 1947 and 1948 considerable informal discussions between Sardar Patel and Nehru
took place, as well as talks between Nehru and Gandhiji about India's relationship with
the Commonwealth. Mountbatten also played a helpful role. When Rajaji became
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Governor-General in June 1948, he too came into the picture. Some correspondence also
took place between Nehru and Attlee.
The principal Indian leaders were in favor of India as a Sovereign Republic continuing
its membership of the Commonwealth principally on the basis that the King would
cease to have any function in India. They came to the conclusion for the following main
reasons:
1)

The existence of Pakistan;

2)

disinclination to isolate ourselves by snapping existing ties;

3)

the excellent impression created by Lord and Lady Mountbatten by the
manner of their functioning augured well for a new relationship with
Britain and the Commonwealth;

4)

heavy dependence of the armed forces for supplies from British sources,
especially in the transitional stage.

Krishna Menon, as High Commissioner, was asked to initiate a continuing dialogue
with the British Government at the political level. At the appropriate time the principal
law officers of the British Government also came into the picture.
During the regular Commonwealth Prime Ministers' Conference in London in October
1948, the question was discussed privately by Nehru with Attlee as well as with the
Prime Ministers of Canada, Australia and New Zealand. Various suggestions were put
forward. Associate membership was proposed. The King might be King of the
Commonwealth. The President of India might be nominally appointed by the King.
Mountbatten suggested that the crown should be in a corner of the Indian Tricolour. He
was aware of the fact that his earlier suggestion in 1947 that the Union Jack should find
a place in a corner of the Indian flag, as was the case with all dominion governments,
was rejected summarily. An unrealistic tentative suggestion by Krishna Menon that the
King should be designated as "the First Citizen of the Commonwealth" did not find
favor with anyone except himself. All the suggestions were rejected.
At the end of the conference, on 28 October 1948, Nehru sent a ten-point memorandum
to Attlee.
On return from the Commonwealth Prime Ministers' Conference, there were further
consultations among Nehru, Patel and Rajaji. On 2 December 1948, Nehru sent the
following telegram to Krishna Menon:

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My ten-point memorandum to Attlee dated 28th October 1948 should be revised, being
reduced to 8 points, as follows:
1.
The declaration as to the status of India will be left as at present in the
draft Constitution.
2.
In a Nationality Act, to be passed by the Indian Legislature,
contemporaneously with the coming into effect of the new Constitution, there
will be incorporated the substance of the relevant provisions of the British
Nationality Act 1948, which will have the effect of making Indian nationals
Commonwealth citizens and the nationals of any Commonwealth country;
Commonwealth citizens when they are in India. This arrangement will be on a
reciprocal basis. 'Commonwealth' in this connection does not mean a super-State
but stands merely for an association of free and independent States which accept
this concept of Commonwealth citizenship.
3.
As soon as the constitutional changes are settled, or at such other time as
may be agreed upon, the Prime Minister of India and the Prime Minister of the
United Kingdom will make declarations announcing the changes and their
nature and results.
4.
In any new legislation, or new treaties entered into with other countries,
the Commonwealth countries will not be treated as foreign. States and their
citizens will not be treated as foreigners.
In particular, in any new commercial treaties it will be made clear that for the
purpose of the 'most favored nation' clause the Commonwealth countries are in a
special position and are not regarded as foreign States.
5.
In foreign States, where Indian Government has no representation, it will
be at liberty to make use of any other Commonwealth country's Ambassador or
Minister; and the Indian Government will be willing to provide reciprocal
facilities for any Commonwealth Government that so desires.
6.
For the purpose of fulfilling the obligations of the Crown towards
Commonwealth citizens other than Indian nationals, the President of the Indian
Republic may, at the request of the Crown, act on behalf of the King within the
territories of India. A similar arrangement on a reciprocal basis will apply to
Indian nationals in the rest of the Commonwealth.
7.
So far as the United Kingdom is concerned, the position is that generally
speaking the King waived all functions of sovereignty in relation to India in
favor of the people of India in pursuance of the Act of 1947. Under that act there
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would be no further legislation on India by the Parliament of United Kingdom,
and after India's new Constitution comes into force there can be no such
legislation. The Indian people and their representatives, including the President
of the Republic, will thus exercise all functions of sovereignty.
8.
These proposals represent a sincere desire to continue the Commonwealth
association and what is practical and adequate at present. No doubt as the
relationship is not a static arrangement, further developments by way of
association may take place.
(Paragraph 6 above may be omitted if necessary.)
In another telegram on the same date Nehru directed Krishna Menon to have informal
discussions with Attlee. He indicated, "We are prepared to consider minor changes but
it will be very difficult to introduce any major change."
In December 1948, at the Jaipur session of the Congress, a resolution was passed
expressing support for India's "free association" with the Commonwealth.
A Commonwealth Prime Ministers' Conference was held in April 1949 for the specific
purpose of deciding on India's membership of the Commonwealth. By the time the
conference met, the designation of the King as "Head of the Commonwealth" received
general approval. It was finally the "formula man" Krishna Menon's definition of the
King as "the symbol of the free association of the Commonwealth's independent
member nations and as such the Head of the Commonwealth" which was accepted by
the Commonwealth Prime Ministers' Conference. Several people took credit for this,
including Girja Shankar Bajpai, the Secretary-General of the Ministry of External
Affairs. It reminded me of the saying, "Success has many fathers; failure is an orphan."
It might be mentioned in this connection that King George VI, in his private
conversation amused himself and others with the remark that his position in the
Commonwealth was "as such."
After a two-day debate in the Constituent Assembly, approval of the decision to remain
in the Commonwealth as an independent republic was recorded on 17 May 1949, with
only one dissenting Note. On 21 May 1949 the AICC at Dehra Dun passed a similar
resolution with only six dissenting votes out of 230 present.
It must be admitted that in handling political issues in the crucial two years when he
was High Commissioner (1947-49) Krishna Menon did very well and was
acknowledged as such by Indian and British leaders. But in the field of administration
he created chaos at India House. Scandal mounted on scandal and Krishna Menon
developed an acute persecution mania and took to taking powerful drugs as an escape,
especially as criticism of some of his foolish deals mounted in the Indian parliament. By
1950 Krishna Menon vas a mental and physical wreck. More in the next chapter.
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31. V. K. Krishna Menon—II
As furor in parliament became a, frequent affair with fierce persistence since the latter
half of 1949, the Prime Minister sent Secretary-General N. R. Pillai of the Ministry of
External Affairs to London in 1950 to make discreet enquiries and to report to him.
Pillai went and returned as did S. Dutt on a previous occasion. Pillai declined to submit
a written report. But he told the PM that he was convinced that large amounts of money
passed hands in connection with Krishna Menon's various deals. He would not say it
went into Krishna Menon's pocket; it was in all probability received by the India
League, the organization whose accounts Krishna Menon refused to render to anyone.
Pillai said that Krishna Menon not drawing his salary bad only added to the suspicions.
People in London began to ask, "Where did he get the money suddenly to build up a
very large wardrobe of expensive clothes?" His refusal to account for the substantial
entertainment allowance he drew from government added to the confusion. Everyone
knew that Krishna Menon never entertained anyone except in the subsidized canteen of
India House. Pillai told the PM that all the scandals connected with various deals were
before the Public Accounts Committee and parliament, and government would have to
deal with them as best it could. Pillai summed up by saying that the decision in the case
of Krishna Menon was a political one. The PM did not take the hint and continued the
policy of drift.
Criticism of Krishna Menon in parliament became fiercer and fiercer. In the meantime,
visitors returning from London, including. Rajkumari Amrit Kaur, reported the virtual
breakdown of work at India House; Krishna Menon propping himself up by powerful
drugs; and certain sex scandals. In October 1951 the PM asked me to go to London,
have talks with Krishna Menon, and also inquire into all the recent reports. He knew
that I was not unfriendly to Krishna Menon and whatever report I would make would
be objective. I stayed at the inexpensive India Club, within walking distance of India
House.
Arriving at India House, the first thing I saw was a code telegram containing a message
from the Prime Minister to Secretary of State for Commonwealth Relations Lord Home,
sent a week before I left Delhi, still lying unattended to on Krishna Menon's desk. Since
Krishna Menon was terribly under the influence of drugs and could hardly open his
eyes, I took the cable and went to First Secretary P. N. Haksar and asked him why it
happened. He said that the advance copies of cypher telegrams were sent to the High
Commissioner and copies could be distributed only after his clearance. Therefore,
nobody had seen this particular telegram. I told him that he might assume the High
Commissioner's clearance and send the message to the Commonwealth Relations Office
at once. After that I went back to Krishna Menon, shook him up, and told him that I
would see him only when he was sober; and if he refused to be sober, I would take the
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next available flight to Delhi. In the evening Krishna Menon came to my room at the
India Club reasonably sober. I told him I was trying to avoid publicity and would have
talks with him and a few persons who were genuinely friendly to him along with his
own British psychiatrist. But I made it clear to him that I would meet that doctor only
with an introduction from him, even though Mountbatten had offered to arrange a
meeting for me.
The first person I met was Dr Handoo, an old friend and supporter of Krishna Menon.
He told me that Krishna Menon was an ill man and almost mad. He was taking luminal
and other powerful drugs on the sly. He added that he was surprised at the PM keeping
him on in office.
Mountbatten said that Attlee and the principal ministers of the Labour government felt
that Krishna Menon should have been replaced a year before. Mountbatten felt the
same.
P. N. Haksar, though a relatively junior civil servant at that time, spoke frankly about
the need for replacing Krishna Menon. He said that it ought to have been done some
time ago. At my request he gave an unsigned note giving his assessment which I could
show to the PM.
I met the British doctor who told me that Krishna Menon was undergoing electric shock
therapy and so was a female member of his staff. He said that Krishna Menon's
condition was such that he should be in a nursing home and not in an office where
serious work was involved. He added that Krishna Menon was a mental case with an
intense persecution mania; but the basic trouble with him was that he was an oversexed
person who had no capacity to perform the sexual act. This had created psychological
problems, for him and was the reason for all his oddities. His strange behaviour and
aggressiveness stemmed from that fact. He gave me an unsigned note on his letterhead
to be privately shown to the PM.
One evening Krishna Menon brought with him Cleminson to my room at the India
Club and left him with me. Cleminson was one of the adventurers involved in several
of Krishna Menon's deals. Krishna Menon expected Cleminson to explain to me the
circumstances which had led to the deals and to justify them. Clerninson started by
narrating to me the happening in his flat the previous night. Krishna Menon arrived
there at midnight with one of his Indian female secretaries who was also undergoing
electric shock therapy. She was in high spirits, stripped herself and started a sexy dance.
He said that Krishna Menon had been fooling around with her and the girl had got
emotionally entangled. Owing to Krishna Menon's inability to satisfy her, she had also
become a mental case. He said that the girl threw tantrums in the office also. He talked
about several other matters and finally left without uttering a word about Krishna
Menon's deals.
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Krishna Menon himself had several talks with me. They mostly centred round the
various deals he had entered into through undesirable intermediaries and which
resulted in substantial losses to government. He was full of complaints against most
civil servants and some ministers in Delhi. The last talk he had with me was such that I
thought that he was either naive or out of his head. He told me that government should
recognize that the office of the High Commissioner in London was next only in
importance to that of the Prime Minister and that the President, by an order, should
confer on him the rank of Deputy Prime Minister as long as he was High Commissioner
in London. He talked as if he was going to be High Commissioner for the rest of his life
with the rank of Deputy Prime Minister. Krishna Menon was such a subjective person
even under normal conditions that had he been the Indian Ambassador to Peru he
would have made out a similar case for the conferment of the rank of Deputy Prime
Minister.
On returning to Delhi, I gave the PM a brief account of my talks in London and told him
that Krishna Menon should be replaced without further delay. I said he should be
advised to initially take leave due to him and enter a nursing home for treatment and
rest cure. He could draw his accumulated tax-free salary for the expenses involved. I
advised the PM to write to him and also make the offer to take him into the Cabinet
when the new government would be formed in May 1952 after the general elections.
Nehru accepted my suggestions and wrote to Krishna Menon accordingly. After he
signed the letter to Krishna Menon, Nehru sent for me at about midnight. He knew I
was still working. I read the letter which was in accordance with my suggestions. He
noticed I was somewhat upset. He told me, "It is all my fault; I should have taken this
action over a year ago." I said, "You know. Krishna Menon better than I do." He said,
"Certainly not. If you calculate the amount of time I have spent with him, it will not be
more than a few hours. You know him much better because I have noticed that
whenever he has been in Delhi he is most of the time with you, either in your study or
your bedroom. Even in London, I have noticed that he spends considerable time with
you. Soon Nehru got involved in work connected with the general elections and
Krishna Menon managed to hang on for a while. On 13 June 1952 B. G. Kher took over
as High Commissioner in London from Krishna Menon. The latter stayed on in London
and refused to go in for treatment. So Nehru did not make any move to induct him into
the Cabinet in May 1952.
During his tenure as High Commissioner, Krishna Menon, under the influence of
Harold Laski, who was a Jew, had been privately advocating that India should establish
diplomatic relations with Israel. Nehru was in favor of it as he considered that it was
the right thing to do, having already recognized Israel which was a member of the
United Nations. He also thought (it was wishful thinking) that we might be able to
influence Israel in its relations with Arab countries. The man who stood in the way was
Matilana Azad. In course of time India's policy gradually tilted towards the Arabs.
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Again, the argument was that India could influence Arab countries. No doubt it was in
India's interests to favor Arab countries; but it went against one of the elements in
nonalignment, namely, "judging every issue on merits." Krishna Menon not only fell in
line but also, after the death of his mentor, Laski, went to the absurd length of giving a
call to the Arabs, in a speech in Cairo, to unite and bide their time until they could
throw the Israelis into the sea. He took cynical delight in adding, "but then that will
only contaminate the sea."
In 1952 Krishna Menon was included in the Indian delegation to the UN General
Assembly under the leadership of Vijaya Lakshmi Pandit. Menon concentrated his
attention on the Korea crisis.
In 1953, on the elevation of Vijaya Laksluni Pandit as President of the UN General
Assembly, Menon assumed charge as leader of the Indian delegation. He played a
useful role in the Korean crisis. After the ceasefire, India became the Chairman of the
UN Commission in Korea with General Thimayya as its chief.
Also, in 1953, Krishna Menon was elected to the Rajya Sabha from Madras.
Seeds for the bedevilment of India-China relations were well and truly sown by
Ambassador K. M. Panikkar. He advocated India's formal recognition of Chinese
suzerainty over Tibet. There could be no objection to this because it was an established
fact for long years. Panikkar was content to ignore the fact that during all this period
Tibet enjoyed practically complete autonomy. Nehru wanted to raise simultaneously
the question of China recognizing the McMahon Line. Panikkar advised against it.
Panikkar thought it would delay matters. It did not occur to Panikkar that the China he
was dealing with was a strong nation and Tibet's autonomy would disappear. Panikkar
thought that the Chinese might turn round and say that the McMahon Line was an
imperialist line and China would prefer to deal with border problems as between
equals. Panikkai predicted that a satisfactory solution about the McMahon Line would
emerge if we showed patience. Unfortunately, Nehru gave in at this stage. It was the
beginning of appeasement.
A telegram was sent to Panikkar authorizing him to formally communicate to the
Chinese Government India's recognition of Chinese suzerainty over Tibet. Panikkar
changed the word to "sovereignty." Later, when questioned, Panikkar took shelter
behind the familiar excuse of corruption in transmission the cypher telegram. This
reminds me of an episode durinig wartime. When Eden went to Cairo, Churchill asked
him, if possible, to send for his son Randolph who was in Ismalia. Eden and Randolph
spent some time together in Cairo. From Cairo, Eden sent a brief code telegram to
Churchill reading, "Have seen Randolph, who had just arrived. He sends his love. He is
looking fit and well and has the light of battle in his eye." Either owing to a corruption
in transmission or to a lively sense of mischief on the part of a Foreign Office official in
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London, this telegram was delivered to Churchill with the "a" in battle replaced by an
"o." When Churchill saw the telegram, he was momentarily annoyed with both Eden
and Randolph.
Panikkar's action was more important than the "bottle" and Nehru should have taken
prompt steps to clear the matter with the Chinese. If necessary he should have
repudiated Panikkar.
When the Chinese overran Tibet, India was in no position to do anything except to
submit to the inevitable. Tibetan autonomy vanished into thin air. Nehru opened his
eyes too late. On the question of Tibetan autonomy, India could have taken a stand and
kept its options open. Instead, negotiations between India and China on relations
between New Delhi and Tibet opened in Peking on 31 December 1953 and concluded
on 29 April 1954, with Ambassador Raghavan signing for India and Chang Han-Fu,
Deputy Foreign Minister, signing for China. The preamble to the agreement stated that
it was based on certain principles which were spelt out. These were later incorporated
in the joint communiqué issued on 28 June 1954 at the end of Chou En-lai's four-day
visit to Delhi—which later came to be called the "Five Principles" or "Panch Sheela"
which consisted of
1)

Mutual respect for each other's territorial integrity and sovereignty.

2)

Nonaggression.

3)

Noninterference in each other's internal affairs.

4)

Equality and mutual benefit.

5)

Peaceful coexistence.

When there was criticism of the Tibetan agreement in parliament, Nehru made the
amazing assertion that in the realm of foreign affairs, he could never take so much
credit as for the India-China settlement over Tibet. A lesser man could not have got
away with it.
At the next Commonwealth Prime Ministers' Conference in London, Nehru held forth
about the Tibetan agreement and the joint communiqué by himself and Chou En-lai,
and asserted that even if the trust is belied, China would definitely appear to be in the
wrong. We know that everything has since been violated; and what has been the result
of putting China in the wrong? Thousands of square miles of Indian territory in the
Ladakh area (through which the Aksai-Chin road was illegally and surreptitiously
constructed by China) continues to be under Chinese occupation. Nehru was a great,
but selective, admirer of Chanakya before whom Machiavelli pales into insignificance.
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What impressed Nehru most was the fact that Chanakya specialized in putting his
opponents in the wrong and was able to achieve almost everything he wanted without
resort to war. But Nehru conveniently ignored the fact that Chanakya used methods
which would have been repulsive to him, Chanakya was not tormented by the question
of ends and means Nehru was also an admirer of Asoka. What impressed him most was
Asoka's contrition in Kalinga about large-scale killings and the calling off of the Kalinga
war. But by that time Asoka had accomplished all he wanted and what remained was
consolidation of his conquests. Nehru had Asoka and the Kalinga war in mind, when he
ordered a ceasefire in Kashmir at a time when our forces were in a sound position and
poised to roll back the enemy. Nehru's decision, which was impulsive, was a grievous
error much resented by the armed forces. Nehru's was an imitative and an absorptive
mind. He had infinite capacity to borrow ideas from others and make them his own
with remarkable speed. Essentially Gandhi's was an original mind, while Nehru's was a
secondrate one. He was all heart and less mind. This is reflected in his books also.
At the Indo-China conference in Geneva in May 1954 Krishna Menon arrived without
invitation. He made himself available to the leaders of all the delegations, including
Chou En-lai. His was a moderating influence. At the appropriate times he was able to
produce sound formulae. Krishna Menon made a significant contribution to the success
of the Geneva conference. India was ultimately appointed Chairman of the Control
Commissions of the three Indo China Buttes. Eden, Macrailan and the American
spokesman, Cabot Lodge, paid rich tributes to India and to Krishna Menon personally
for the contribution for solving the Korea crisis and for the success of the Indo-China
conference in Geneva.
In 1954 Nehru wanted to appoint Krishna Menon as a Cabinet Minister. Maulana Azad
objected. The ostensible reason was the numerous allegations against him. The Maulana
made it known to Nehru that he would not remain in the Cabinet with Krishna Menon
in it. It was known that two other Cabinet Ministers—C. D. Deshmukh and T. T.
Krishnamachari—were also opposed to Krishna Menon's inclusion in the Cabinet. No
serious notice was taken of this as both were political lightweights. The Maulana's
attitude deeply hurt Nehru. Throughout their long association. Nehru was deferential
and affectionate towards the Maulana and even defended him before Gandhiji. Nehru
gave vent to his feelings by announcing publicly that he was seriously considering
resignation from government. But the Maulana remained unmoved. Krishna Menon
had to wait for one and a half years before he could enter the Cabinet.
Ever since he met Chou En-lai in Geneva in the summer of 1954, Krishna Menon had
been trying to function as China's Foreign Minister. He did the same thing vis-a-vis
President Nasser before and after the Suez crisis in 1956 and in the process came into
conflict with Egyptian Foreign Minister Mohammad Fawzi. From 1953 onwards
Krishna Menon had been carrying on an unseemly private campaign against SecretaryGeneral Dag Hammarskjold, of the United Nations. Krishna Menon wanted to
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denigrate him so that he could remain as the sole peacemaker on the international
scene. Hammarskjold had unconcealed contempt for Krishna Menon, but enormous
respect for Nehru and India for its tremendous contributions for the UN peace-keeping
operations.. He used to say, "Thank God for India."

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32. Krishna Menon's Vote at the UN on Hungary
Article 2 of the Hungarian Peace Treaty which was signed by the Soviet Union, the
United States, Great Britain, France, Australia, Canada, India, New Zealand, South
Africa, Czechoslovakia, Yugoslavia, Byelorussia and the Ukraine, laid down that the
Hungarian Government had the obligation to secure for all persons under Hungarian
jurisdiction, without distinction of race, sex, language or religion, the enjoyment of
human rights and fundamental freedoms including freedom of expression, press and
publication, religious worship, political opinion and public meeting. The Hungarian
national revolt broke out during the night of 23-24 October 1956.
It might be mentioned in this connection that the Anglo-French invasion of Egypt in the
wake of the Suez crisis started on 31 October 1956. India was quick to condemn the
Anglo-French aggression on Egypt.
The Soviet Union found it a convenient moment to launch a massive attack with tanks
and infantry on 4 November to crush the uprising in Hungary. Over 100,000
Hungarians fled to Austria as refugees. There were reports that thousands of
Hungarian youths were transported to Siberia.
Krishna Menon arrived in New York on 5 November. Till 9 November India observed
silence about the happenings in Hungary. This appeared to be strange to many, both in
India and abroad.
On 9 November the five-power resolution" on Hungary, sponsored jointly by Italy, the
Irish Republic, Pakistan, Cuba and Peru, was voted upon at the second Emergency
Session of the UN General Assembly. The resolution called upon the Soviet Union to
withdraw its forces from Hungary without further delay and proposed free elections
under UN auspices in Hungary. The resolution was adopted by forty-eight votes
against eleven, with sixteen abstentions. India voted against the resolution and was the
only non-Communist country to do so. Of the sixteen abstaining countries, thirteen
were from the Afro-Asian bloc together with Austria, Finland, and Haiti.
No action of the Government of India in the field of foreign affairs provoked so much
hostility in parliament and elsewhere in India as Krishna Menon's vote in the UN
General Assembly. The press was up in arms. Important leaders asked for Krishna
Menon's recall and removal from the political scene.
Krishna Menon's assertion before Michael Brecher, the Canadian writer, in 1967 that he
had a free hand and had no instructions in regard to the Hungarian question is totally
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incorrect. In a personal telegram Krishna Menon asked for instructions. Nehru was in
Jaipur when the telegram came. I telephoned and conveyed to him the contents of
Krishna Menon's telegram. Nehru asked me to send a most immediate telegram to
Krishna Menon instructing him to abstain from voting on the five-power resolution;
and I did so in Nehru's name.
To Michael Brecher Krishna Menon confessed that some people in the Indian delegation
advised him to abstain, but that he told them, "Either we have a conviction or we
haven't." Whose conviction? It certainly, was not Nehru's, or that of the Cabinet's as a
whole.
Soon, after Krishna Menon returned from New York, I questioned him closely about the
voting which amounted to flouting of instructions. He told me that the telegram
containing the instructions reached him a little too late. I smiled and told him that I was
going to write to the permanent representative of India in New York to check up on the
exact time and date of arrival of the telegram of instructions there and the time of the
voting on the resolution at the UN. Krishna Menon was unnerved. He said to me, "Old
man, why do you want to rake up something which is all over?" I reluctantly, and
perhaps rather foolishly, dropped the matter.
To Nehru it became a question of either letting down a subordinate or supporting the
action to a certain extent in his own self-defence. Nehru chose the latter course. His
speech in parliament largely failed to convince most people. In this whole melancholy
episode there was only one man with "conviction," and that was Krishna Menon. That
conviction of his cost this country and Nehru dearly in moral terms. India's image stood
tarnished and the policy of nonalignment stood distorted.
Krishna Menon's assertion to Michael Brecher that Nehru defended him in parliament
over the voting on the Hungarian question reminds me of an important incident in
Disraeli's career as Prime Minister.
The Russians had long been carrying on a flirtation with the Amir of Afghanistan. In
full accord with the Amir, the Russians had dispatched a mission to Kabul, a success
which aroused the jealousy of Lord Lytton who was then Viceroy of India. Lord Lytton
was the son of Disraeli's old political friend Bulwer. Against the advice of Disraeli, who
strove hard to obtain, by friendly negotiations, the withdrawal of the Russian mission,
Lord Lytton took it into his head to send a British mission up to Kabul. The Amir
stopped Lytton's envoys at the entry of Afghan territory; and Disraeli suddenly found
himself forced either to bow shamefacedly before a small potentate or wage a
dangerous war. Gladstone succeeded in rousing public opinion against Disraeli; and
Disraeli, in his irritation, said, "When a Viceroy or a Commander-in-Chief disobeys
orders, they ought at least to be certain of success." Would Disraeli have to disavow
Lord Lytton and prove the innocence of the government at the expense of a
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subordinate? It was contrary to all Disraeli's principles. He stood by Lord Lytton;
ordered war, and General Roberts routed the Amir's troops. Soon the trouble kicked up
by the Russians and by Gladstone evaporated into thin air. Nothing succeeds like
success. But Nehru had to live with that vote, explaining it away for the rest of his life.

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33. V. K. Krishna Menon—III
During the second half of 1955 India was considering the question of buying some
military aircraft from the Soviet Union in preference to a British make. Krishna Menon
got scent of it. He told me it was a dangerous thing to put ourselves in the position of
dependence on the Soviet Union for defence supplies because that country was used to
sudden reversals of policy and such shifts might one day leave us in the lurch. He did
not speak to the PM; but on his way to the UN, he stopped over in London and spoke to
Anthony Eden, the British Prime Minister, about India's intentions. The latter sent a
telegraphic message to Nehru expressing apprehension about injecting the USSR into
the Indian defence system. He earnestly hoped that the proposal would be given up.
India did not proceed with the matter. India ordered British war-planes instead.
In the summer of 1955, aware of my good relations with the Comptroller and AuditorGeneral A. K. Chanda and Defence Secretary M. K. Vellodi, both of whom were known
to be bitter enemies of Krishna Menon, Nehru asked me to privately discuss with them
the question of finally disposing of the various scandals in which Krishna Menon was
involved. The major scandals were:
The Jeep Contract. Owing to difficulties in obtaining jeeps urgently needed by the army
for the Kashmir operations, Krishna Menon struck a deal with an adventurous
intermediary called Potter who had a private firm with a capital of twenty pounds.
Generous advances were paid to Potter who supplied secondhand, reconditioned jeeps.
When the jeeps arrived in India, the army experts rejected them as unserviceable,
Krishna Menon was asked to stop further payments to Potter. Government suffered a
loss of £136,052, equivalent to Rs. 1.8 million; and Potter had further claims.
Procurement of Ammunition and Grenades. Again, these, were: through adventurous
intermediaries who were men of no substance. The principal one was a man called
Cleminson who was involved in a criminal case before. Potter was also brought in, most
probably to compensate him for his claims in the jeep contract. Reckless extra payments
were authorized by Krishna Menon. The excess payments, which became a total loss to
government, were estimated at about £500,000 or about Rs. 7.2 million.
In both these deals there had been procedural and technical irregularities and errors of
judgment both at the stage of the negotiations and later at the stage of interpretation
and enforcement of the terms of the contracts.
Advance Payment for the Acquisition of the Gaiety Theatre. It was Krishna Menon's utter
and inexcusable stupidity, which some people termed as a diabolical swindle by him, to
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have paid £17,000, or about Rs. 228,000 in July 1950 to a private company floated in
December 1949 with a nominal capital of £1,000 and a paid-up capital of £2! The
adventurer Cleminson was involved in this also. The amount had to be ultimately
written off by government. I closely questioned Krishna Menon on this and asked him
about the circumstances surrounding the deal. I reminded him that in 1950 there were
no Kashmir operations! Krishna Menon was uncomfortable, evaded my questions, and
said, "Old man, get me a cup of tea." And while he was sipping tea someone else came
in, and Krishna Menon heaved a sigh of relief and left.
Then there were allegations about the lease of residential premises, and exchange of
cars. But they were comparatively minor matters.
I had a preliminary talk with Defence Secretary Vellodi. I told, him I proposed to tackle
the big fish, Auditor-General Chanda first. Vellodi assured me that he would fall in line
with anything agreed to by Chanda in this matter.
A series of meetings with Chanda followed. I told him that I would like to see an end to
this business of Krishna Menon's, scandals and would welcome suggestions from him.
He asked me, "Why do you want to stick your neck out to save Krishna Menon?". I said
I was more interested in clearing the government than in Krishna Menon.
At our final meeting, the Auditor-General suggested as follows:
About the two major contracts, if government is satisfied that the defence authorities
had to procure these stores, as a matter of urgency, for reasons of internal security and
defence strategy and as these stores were not available from the traditional sources of
supply, they acquiesced in unorthodox methods being adopted for procurement and
were prepared to take consequential risks, there should be a clear statement to that
effect before the, Public Accounts Committee. The fact that an informal Cabinet
Committee consisting of the Prime Minister, Defence Minister N. Gopalaswami
Ayyangar, and Finance Minister C. D. Deshmukh went into these transactions and came
to the conclusion after closely questioning Krishna Menon that there was no clear
evidence against the bona fides of those concerned should also be similarly stated. It
should also be mentioned that suitable instructions regarding the procedure to be
followed in future for procurement overseas have been issued to avoid the recurrence
of such irregularities.
The suggestion, for such a statement being made, flows from the parliamentary
convention in the United Kingdom, adopted by us also, that if government finds itself
unable to act on the recommendations of the Public Accounts Committee, it should
restate its case, with such additional information as is available, to enable the Public
Accounts Committee to review its own recommendations.

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It seems that the recommendation of the Public Accounts Committee that one or more
judges should be appointed to investigate the matter, even if accepted by the
government, is unlikely to produce any material results. The judges will have no right
to call upon foreign nationals to give evidence before them. With this serious limitation,
it is doubtful whether a judicial inquiry will lead to any positive conclusions. It might
further complicate an already complicated issue.
On the basis of my appreciation, my advice would be that the Defence Ministry, with
the concurrence of the Finance Ministry, should submit a fuller statement to the Public
Accounts Committee, on the lines suggested above, accepting the gravamen of the audit
charges that there have been losses, additional cost, and other irregularities, it should
explain the circumstances in which risks had to be taken and the possibility of loss
faced. As there has been no clear evidence of culpable negligence or misdemeanor and
remedial measures have also been taken to avoid such losses in future, the Public
Accounts Committee should be requested to review its conclusions. Any other defence
will be untenable and will not meet the situation. If the suggested line is adopted, the
Public Accounts Committee might well revise its conclusions.
I said that going back to the Public Accounts Committee would mean needless delay,
and that government should make a statement in both Houses of parliament, such as
the one he had suggested. I added that I would prefer Finance Minister C. D.
Deshmukh to make the statement which would be drafted by Defence Secretary M. K.
Vellodi. The Auditor-General agreed to my suggestion. Then I asked him, "If Krishna
Menon is not satisfied with this solution, can he be given the opportunity to personally
appear before the Public Accounts Committee and defend his actions? He should have
access to all relevant papers regarding the various matters which have come up before
the Public Accounts Committee so that he can have no complaint that facts have been
concealed from the Public Accounts Committee." He agreed. Later, the Defence
Secretary also agreed to both my suggestions.
I explained to Krishna Menon what transpired between me and the Auditor-General as
well as between me and the Defence Secretary. Krishna Menon knew that both of them
were his sworn enemies. I told him that he should be thankful to them for being helpful.
But, of course, Krishna Menon could never be accused of possessing the quality of
gratitude. I put before Krishna Menon the two options open to him. I made it clear that
there was no other alternative and that the choice must be entirely his. He said that the
proposed statement did not absolve him enough. I told him that the criticism was mild
and that if he wanted full vindication, and if he was sure of his grounds, he could
appear before the Public Accounts Committee and fight it out. I advised him to think it
over for a couple of days and then come to a decision. At 2 A.M. that night the fellow
crept into my room and woke me up by switching on the light. He looked like a ghost
with hair standing on end. In a wailing voice he asked me, "Old man, what is your
advice?" I was annoyed and said, "My advice is, go and sleep." He persisted. I said,
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"You want me to make up your mind. I shall do that. It is in your interest to agree to the
statement being made in parliament. I shall see that your 'bosom friend' Deshmukh
makes the statement. If you do not agree, you will only sink into deeper waters. Do you
think you can ever defend the Gaiety Theatre deal you entered into in 1950? You should
be in sackcloth and ashes for it." He sat quiet for a while and said, "All right, you tell the
PM that I agree to the statement being made."
I explained the situation to the PM. He agreed fully. However, he said, "Why should
Deshmukh make the statement? I shall make it." I replied, "Yes, you could; but
Deshmukh, who is widely known in parliament as a bitter critic of Krishna Menon,
making the statement will have considerably more effect. Moreover, Deshmukh is close
to the Maulana. And, as Finance Minister, he is a very appropriate person to make the
statement. You need not have to approach Deshmukh for it; I shall try and get
Deshmukh's agreement" The PM agreed.
Vellodi did not take much time in producing the draft statement along the lines
suggested by the Auditor-General. When I received the draft statement from him I took
it to the Auditor-General who had previously promised me to vet it privately. He made
it clear to me that officially it was not part of his job to bail out the government or
Krishna Menon. The Auditor-General made some verbal changes in his own hand in
the draft. I handed over Vellodi's draft as amended by Chanda to Secretary-General N.
R. Pillai, of the Ministry of External Affairs, who was a personal friend of Deshmukh's,
and briefed him about the background. At my request he took it to Deshmukh and
talked to him. He also told Deshmukh that I would meet him in a couple of days. When
I met Deshmukh, he raised no objections and authorized me to tell the PM that he
would make the statement.
So the statement was made eventually. Maulana Azad heard that I was behind it all. He
was very annoyed. Some time earlier the Maulana had canvassed for the inclusion of
Dewan Chaman Lail in the Council of Ministers as a condition for his agreeing to
Krishna Menon's entry into the Cabinet. The Prime Minister was surprised at the
Maulana's move. He asked one of the Secretaries in the External Affairs Ministry to
send to the Maulana the file containing accounts of the shady deals of Chaman Lall in
foodgrains while he was Indian Ambassador in Turkey and Argentina. The Maulana
remained silent.
The Maulana could no longer advance any further excuse to prevent Krishna Menon
from entering the Cabinet. On 3 February 1956, Krishna Menon was sworn in as
Minister without Portfolio. He continued to lead the Indian delegation to the UN and
became more cocky after becoming minister.
The question of choosing a constituency for Krishna Menon for the 1956-57 general
elections arose. Some leftists suggested North Bombay to him. Krishna Menon asked for
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my advice. I said, "You will win in North Bombay as long as the PM is on the scene.
After his time you will not win because essentially your constituency is Jawaharlal
Nehru. If I were you, I would go to Kerala and stand from Calicut. You can have roots
there but not in Matunga. Krishna Menon chose the easier path and opted for North
Bombay. My prediction came true. After Nehru's death, Krishna Menon could not even
get a Congress ticket for North Bombay. He stood in North Bombay as an independent
and was twice defeated by persons of no standing in Congress.
Piqued by Krishna Menon's stand on the Suez and Hungarian crisis, the Western
powers wanted to be one up on Krishna Menon. Encouraged by them, the Pakistan
Foreign Minister sent a letter to the Security Council on 2 January 1957 asking for a
debate on the Kashmir question. During the debate, which began on 23 January,
Krishna Menon made a marathon thirteen-hour speech and then fainted. He was under
the influence of powerful drugs.
As usual he had taken with him to New York the chief of the Delhi bureau of the Press
Trust of India at government expense, with all telegram charges and other expenses
paid. The long speech, which tortured the members of the Security Council and was
reported in a couple of sentences in newspapers in Moscow, London, Paris, New York
and other world capitals, was beamed in full to India and splashed in the Indian press.
No people in the world loves verbal diarrhea as much as the Indians do. Krishna
Menon felt like the "hero of Kashmir" despite the fact that his speech did not win a
single vote in India's favor. He and India were bailed out by the Soviet veto.
On 11 March 1957 Krishna Menon was elected to the Lok Sabha from North Bombay
constituency with a margin of 47,741 votes. After the election I suggested to the PM that
Krishna Menon might be sent to the Defence Ministry in the hope that he would
progressively be eliminated from foreign affairs. My hopes were belied.
For a while after assuming the role of the "hero of Kashmir" and after the elections,
Krishna Menon began to lose his head. He made it plain to many that he was the
natural successor to Nehru. Many important Congress leaders were annoyed by this. In
the presence of senior civil and military officers in the Defence Ministry he would
criticize his principal colleagues in the Cabinet. His principal targets were Govind
Ballabh Pant, Morarji Desai and T. T. Krishnamachari. He invariably referred to Pantji
as "that shaky walrus." He was very indiscreet in making nasty remarks about people,
and never knew how to make friends. But he had perfected the art of losing them and
had the inborn gift of making enemies.
Krishna Menon told me that he was attracting as big crowds wherever he went as the
PM did. I told him of one person who, at one time, attracted bigger crowds than Nehru
did; but it was a passing phenomenon; he could not sustain it and soon settled down as
a neglected Deputy Minister. He asked me who the person was. I said, "Shah Nawaz
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Khan of INA." I reminded him of what happened to the Duke of Wellington. He lived to
see his house being stoned by the populace. I told Krishna Menon that Nehru's having
maintained his popularity for a whole lifetime was no joke. And it so happened that,
after Krishna Menon's exit from government, he was stoned by the people in several
places in northern India.
In 1957 it was known in the Ministries' of Defence and External Affairs at the higher
levels that China had completed the construction of the Alsai-Chin road in Ladakh.
Parliament and the public were deliberately kept in the dark.
I had thought that after burning his fingers at India House in London, Krishna Menon
had learnt a lesson in administration. But no. He created havoc in the Defence Ministry
and in the defence forces. He found favorites. The classic example was B. M. Kaul who
had practically no experience as a field commander. In promoting Kaul to the rank of
Lieutenant-General from the third position in a panel of three submitted by the Army
Chief General Thimayya, superseding several outstanding officers, Krishna Menon
exercised his discretion in favor of the army's greatest known coward. This was amply
proved later when braggart Kaul was sent to the front to face the Chinese. He
developed cold feet, feigned illness, flew back to Delhi and took to bed. President
Radhakrishnan wanted Kaul to be examined by a full medical board and exposed if
necessary. In the confusion then reigning in Delhi, Kaul escaped medical examination.
However, later he had an ignominious exit from the army.
When the Defence Ministry embarked on a programme of accelerating defence
production, Krishna Menon brought in a private person from Madras who was in the
scout movement with him before. He was a man of no means. Soon he became an
international traveler. He remained a private individual but under Krishna Menon's
patronage entered into dealings with British firms having collaboration for production
of tanks at Avadi, aircraft at Kanpur; the German firm having collaboration for the
production of Shaktiman trucks; and the Japanese firm having collaboration for the
production of Nissan light trucks; and some other foreign concerns. This individual
became a financial supporter of Krishna Menon. He is now back in Madras as a rich
man and a Director of several important companies.

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34. V. K. Krishna Menon—IV
The news of the Aksai-Chin road and the Chinese menacing probes i n the north and
northeastern region broke out, and government had to face the strongest possible
criticism in parliament and in the press. Krishna Menon was a discredited person by
then. In April 1960 Chou En-lai came to Delhi and received a stiff and cold reception. At
that time Krishna Menon suggested to the PM a political deal with China. The
suggestion was that India should lease to China the Aksai-Chin salient; and in turn
China should lease to India the narrow strip of Tibetan territory projecting into India
between Sikkim and Bhutan. Krishna Menon's argument was that when the agreement
came up for renewal, India would be in a stronger position to bargain. The whole thing
was vague. The duration of the lease was not mentioned. No thought was given to the
possible relative strength of India and China at the time of renewal. The proposal was
rightly torpedoed by Govind Ballabh Pant and T. T. Krishnamachari. A south Indian
journalist's assertion that G. B. Pant threatened to revolt and resign is a cock and bull
story which emanated from Krishna Merlon's fevered brain. Pant was such a "Rama.
Bhakta" in so far as Nehru was concerned that he was incapable of hurting Nehru. What
Pant told the PM was that Krishna Menon's suggestion, if accepted, would inflame
popular anger further. The fact is that Nehru, had, by then, lost confidence in Krishna
Menon who was kept out of parleys with Chou En-lai.
The period 1960-62 was one during which Krishna Menon relapsed into heavy
drugging. Once he crossed all limits at the UN and used the most intemperate and
offensive language in a speech. Nehru at once sent a telegram to him reading,
Remember the world is a much bigger place than the UN." On reading the telegram in
the UN Assembly chamber, Krishna Menon got upset, staggered out into the lounge in
an effort to go to the toilet, opened the buttons of his trousers in the presence of the
women in the lounge, to their utter embarrassment, caught hold of the PTI man who
was at hand to help and cried, "This telegram was drafted by Mathai; the PM does not
use such tough language." Soon after, Radhakrishnan urged Nehru to stop sending
Krishna Menon to the UN anymore because he was an ill man. Radhakrishnan always
thought that Krishna Menon's was a diseased mind. Krishna Menon earned luau
epithets from the press and people at the United Nations and elsewhere abroad. Here
are a few: "the undiplomatic diplomat; the unspeakable Menon; the most hated
diplomat; international gadfly; His Grey Eminence; India's Rasputin; the venomous
cobra; Hindu Vishinsky; tea-fed tiger." The Western press described Krishna Menon's
mind as "a weird eclectic mixture containing more of Marx than of Gandhi, more of a
Bloomsbury agnostic than the Hindu, more 19th century radicalism than 20th century
reality—all held together by intolerance and insufferable arrogance." To some, the tea
Krishna Menon swallowed was flavored with malice.
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The police action in Goa in December 1961 was, to a large extent, dictated by political
considerations—having an eye on the impending general elections. The decision to take
over Goa was taken six months before. Krishna Menon discovered a pliable senior
intelligence man to prepare the ground. He was a pastmaster not only in provoking
incidents but also in inventing them. Wild reports of Portuguese military strength in
Goa, and the "impending" arrival of Pakistani forces by air and sea in Goa were widely
circulated. Actually there was no need to deploy the army. The Central Reserve Police
could have accomplished the job. The invasion of Goa did not enhance Nehru's moral
stature. President Kennedy, who was an admirer of Nehru, did not question India's
claim to Goa; but he remarked that "the priest has been caught in the brothel."
In the general elections early in 1962 Krishna Menon was again the Congress candidate
in the North Bombay constituency. His opponent was an Independent—the redoubtable
Acharya J.B. Kripalani. There were reports that Krishna Menon would have an uphill
task. Nehru, unfortunately, felt that Acharya Kripalani was challenging him. Nehru
made North Bombay a personal issue. He wanted Krishna Menon to win in a big way
and told S. K. Patil so. Throughout the election campaign, wherever Nehru went, he
spoke of Krishna Menon's election—in Poona, Gwalior, New Delhi, Jabalpur,
Madurai—everywhere, Many people took Nehru's pre-occupation with Krishna Menon
almost as a joke. Krishna Menon ultimately won, polling 296,804 votes as against
Acharya Kripalani's 151,437. It turned out to be a barren victory, for within seven
months Krishna Menon had to leave government.
In September 1962 major Chinese incursions took place in the eastern sector; and on 20
October full-scale invasion started. We were outnumbered and outgunned. The Chinese
exploded the myth of the impregnability of the Himalayas.
A sizeable section of the Congress Parliamentary Party executive demanded the
removal of Krishna Menon. The PM resisted for a while. On 31 October Nehru took
over the portfolio of Defence and Krishna Menon was designated as Minister for
Defence Production. Then Menon made the most unwise and suicidal statement at
Tezpur. He said that nothing had changed and that he was still sitting in the Defence
Ministry. This sealed his fate. Senior Cabinet Ministers, including T. T. Krishnamachari,
asked for Krishna Menon's ouster. President Radhakrishnan advised the PM to drop
Krishna Menon from the Cabinet. There was a threat that most of the Congress
members of parliament would boycott the party general meeting if the PM was not
prepared to dismiss Menon. Nehru at last saw the writing on the wall. He could no
longer cling to the absurd theory that an attack on Krishna Menon was an attack on
him. Indira also did her bit. She conferred with Lal Bahadur and induced some
prominent leaders, including Congress President U.N. Dehbar and Kamaraj, to ask for
Krishna Menon's ouster. Kamaraj could not speak English fluently and, in any event, he
spoke only in monosyllables. He started his interview with the PM with the cryptic
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sentence, "Krishna Menon must go." Nehru tried to defend Krishna Menon and
explained the situation to Kamaraj; but the last sentence Kamaraj uttered at the end of
the interview was, "Krishna Menon must go."
And Krishna Menon went on 7 November 1962 as the man who brought discredit to
India, dishonor to the Indian army, and ignominy to himself.
Nehru tried to retain Krishna Menon as a member of the Planning Commission. The
Attorney-General, however, ruled that it could not be done unless Krishna Menon
resigned from parliament, for the Planning Commission members are technically
government servants.
After his exit from government, Krishna Menon tried to start legal practice in the
Supreme Court with great fanfare of publicity which was resented by the legal
fraternity. To begin with he got a few briefs; but he did not study them. On more than
one occasion the judges had to remind him that he was not addressing a political rally.
Gradually briefs failed to come his way.
Many people believe that Krishna Menon was wedded to the public sector. He was very
elastic about it. In 1947 he told me that it would be a wrong thing for an
underdeveloped country like India to start a public sector for industries except for
defence industries. He said that the Tatas, Birlas and others should be encouraged and
fully supported to go in a big way for industrial development. Government should not
have labor problems on its hands; the private industrialists would act as cushion in the
matter.
One day a long telegram marked "For Himself—Most Immediate—Top Secret" received
in code in the cypher bureau was decoded and delivered to me. It filled ten closely
typed foolscap pages. It was from Krishna Menon addressed to the Prime Minister from
Bombay. It was coded in the Bombay government secretariat and decoded in the
Ministry of External Affairs. It contained disjointed rambling thoughts of Krishna
Menon on some foreign affairs issues of no urgency. It took five days to reach me
because of its length and the time consumed in coding and decoding. The cypher
bureau calculated the telegraphic charges at about Rs 5,000. I mentioned this to the PM.
When Krishna Menon returned, I asked him why he sent that telegram and told him the
cost. I added that it could have been sent by post and I would have received it the next
day. His reply was, "A telegram will have more impact, on the mind of the PM." I said I
had already told the PM about the costly absurdity of that telegram. Krishna Menon
had no sense of economy.
After he became Defence Minister, Krishna Menon continued to occupy his large room
in the External Affairs Ministry with the "Princes Room" as the anteroom. One day I
visited the large chamber. Krishna Menon was away in Kashmir for two days and was
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expected back only after another couple of days. I discovered that the five-ton air
conditioner had been on for the two days he was away. I made enquiries and was told
that they were "orders." I asked the administration branch of External Affairs to put off
the air conditioner, remove all the furniture, dismantle the numerous telephones, and
refurnish the room into a conference room where Cabinet meetings also could be held.
The officer concerned was diffident. He thought he might get into trouble. I said that no
trouble would come to him and that he could say it was done under my orders. I sent a
note to Krishna Menon informing him of the action I had taken and the reason why. I
informed the PM also.
He fully approved of the action that I had taken. When Krishna Menon saw my note on
return from Kashmir he was upset. He came to see me to find out if I could undo the
thing. The reason he gave was that his not keeping and office in the External Affairs
Ministry would give the impression that he was out of foreign affairs. I replied, "It is as
it should be."
Soon after Krishna Menon became Minister without Portfolio, Potter, the man involved
in the jeep scandal, threatened to go to court. In fact he sent a legal notice to Krishna
Menon who made an air-dash to London under false pretences. There he drew his
accumulated tax-free salary as High Commissioner for five years. It amounted to about
15,000. A substantial part of it was given to Potter to buy his silence.
When Krishna Menon became Minister without Portfolio, the Prime Minister wanted
him to leave the Prime Minister's house and have an establishment of his own. The PM
spoke to me and asked me to see that it was done gently. He said that apart from the
fact that it was the right thing for Krishna Menon to do, "he barges in too often while I
am working; he is getting on my nerves; whenever he enters my study he brings in
tension." I broached the subject with Menon without bringing in the PM's name. He
hummed and hawed. Finally he said, "Ole man, get me something nearest to the PM's
house; I don't want the impression to get round that I am no longer in close contact with
the PM," He was allotted the staff bungalow a few yards away from the gate of the PM's
house.
Whenever Krishna Menon went abroad, particularly in the United States, he used to
carry with him a certificate from a British doctor that he was incapable of performing
the sex act. Once, in New York, he got into trouble with a shapely young Spanish
woman. He used to take her round to restaurants and nightclubs. She ultimately
threatened to blackmail him by telling the press that Krishna Menon had been intimate
with her. Krishna Menon got the fright of his life. He enlisted the services of a UN
employee, an Indian whom he had helped to get employment at the UN secretariat.
This man talked to the Spanish woman and showed her the British doctor's certificate.
She was not dissuaded and said, "Let him publish that certificate also." Finally Krishna
Menon had to buy her silence at considerable expense.
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I had three tiffs with Krishna Menon. The first happened in my study in the PM's house
where Krishna Menon had come to see me.
He sat and gossiped. He was then a Cabinet Minister. In the course of his gossipy talk
he said, "You know, the PM is the kept man of Lady Mountbatten." I was incensed and
told him, "If you had said it was the other way round, I may not have taken notice of it.
You do not have even a modicum of gratitude to the man without whom you would
have been in the gutter." I firmly asked him to leave my room. He looked sheepish and
left.
The second happened in the Cabinet room of 10 Downing Street, London, where a
meeting of the Commonwealth Prime Ministers' Conference was in progress. Nehru
and Mrs. Pandit were at the table. N.R. Pillai, Krishna Menon, and I, in that order, were
behind.
Next to me was the Canadian Permanent Secretary for External Affairs. Nehru was
speaking. Krishna Menon leaned towards me and said, for the benefit of the Canadian,
"He is weak; how long am Ito drive the car from the back seat?" Also for the benefit of
the Canadian I replied, "You shut up."
The third incident happened in my office in the PM's secretariat a week after my
resignation. I had heard about some caustic comments made by Krishna Menon about
my resignation. I rang him up and said that I would like to see him in his office. He
said, "Ole man, I will come and see you." I said I preferred to see him in his office. But
he insisted and came to my office. I told him, "I wanted to speak to you in your office
because what I am going to tell you will not be pleasant. You are an ungrateful man;
everyone, including the Prime Minister, is a convenience for you. I am not going to take
back my resignation as some people do and I am not going to return to government. But
remember that I can, if I choose, do more harm to you from outside than from within.
Now I do not want to see your horse-face again." Krishna Menon was visibly shaken
and mumbled, "Nobody has talked to me like this." I said, "I am not a nobody." He
staggered out of my room. I never met him afterwards though on two occasions he tried
to meet me.
Krishna Menon had no sense of humor. His first visit to Kashmir was with the Prime
Minister. Menon was not a minister then. The PM, Krishna Menon and I were sitting in
the potrico of the Chashma Shahi guest house one sunny morning. Nehru was in a
somewhat mischievous mood. He turned to Krishna Menon and said, "You Malayalis
have to be brought here to be civilized." Krishna Menon went red in the face and
wanted me to say something. In the hearing of the PM, I asked Krishna Menon, "Why
don't you ask the PM what is on top of the tall hill in the middle of the Srinagar valley?
It is the Shankaracharya temple. Shankaracharya had to come all the way on foot to
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civilize the Kashmiris." Krishna Menon revived and his face beamed in triumph. For the
rest of his life Krishna Menon never forgot the Shankaracharya hill in Srinagar.
One morning I was having breakfast with the PM as Indira was out of Delhi. Krishna
Menon barged in. I ordered tea for him. After coffee, the PM lit a cigarette. Krishna
Menon began playing with the cigarette box and started talking about different brands
of British cigarettes. And to my surprise he held forth about the flavors of the different
brands. I asked him, "Have you ever smoked a cigarette in your life?" Krishna Menon
looked deflated and uncomfortable. The PM burst into laughter and smoke went down
the wrong way in the process. As we all went out of the dining room, Krishna Menon
said, "You should not have said it in the presence of the PM." I replied, "Why do you
talk about things of which you know nothing?"
Even after his exit from government, Krishna Menon's wander mania persisted. He
continued to travel by first class by air and stayed in the most expensive hotels in
London, New York and other places. Tongues began to wag. People asked, "Where does
he get all this money from?"
All his life Krishna Menon chased controversy and sometimes controversy chased him.
In death also controversy chased him. People began to ask questions about the sum of
over Rs. 100,000 in cash and the fabulous wardrobe of expensive European clothes with
500 expensive unused British and French shirts thrown in, which he left behind. Death
stills most things.
During the period Krishna Menon reached the peak in attacking the West at the UN and
elsewhere, the French Ambassador to the UN caused a witty story to go the rounds. It
referred to the difference between accident and disaster—"If Krishna Menon falls into a
well, it will be an accident; if he comes out of it, it will be a disaster." This did not
represent the Ambassador's originality. He was only adapting what Clemenceau, in his
exasperation, said of President Woodrow Wilson at Versailles after the first world war.

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35. Was Nehru Arrogant?
Soon after Nehru's death on 27 May 1964, the Chinese Prime Minister Chou En-lai was
gracious enough to tell a visiting Ceylonese delegation in Peking, "I have met
Khrushchev, I have met Chiang Kai-shek, I have met American Generals, but I have
never met a more arrogant man than Nehru. I am sorry, but this is true."
One High Commissioner in Delhi, who was a conceited fellow and never missed an
opportunity to make it known that he was a Rhodes scholar, and who was despised by
a fellow Commonwealth High Commissioner as an insufferably arrogant person, once
told me that he thought Nehru was arrogant.
At the Asian-African conference in Bandung (18-24 April 1955) Sir John Kotelawala, the
Prime Minister of Ceylon, drew attention to the fact that the "satellite" countries under
Communist domination such as Hungary, Bulgaria, Rumania, Albania, Czechoslovakia,
Lativia, Lithunia, Estonia, and Poland were as much colonies as any of the colonial
territories in Africa or Asia." Chou En-lai and many others felt that Sir John was bent on
breaking up the conference. Later, Nehru went up to him and asked him with some
heat, "Why did you do it, Sir John? Why did you not show me your speech before you
made it?" I am afraid Nehru behaved as if he were the Congress President speaking to
one of the Working Committee members. Sir John shot back, "Why should I? Do you
show me yours before you make them?"
Sir John Kotelawala, in his book, An Asian Prime Minister's Story, commented, "I have no
doubt that the remark was well meant. Nehru and I are the best of friends. I have the
highest regard for him and especially for his disinterestedness in all that he says and
does, and the incident must have been quickly forgotten by him as it was by me."
Nehru was too much of a refined person to be arrogant. Sometimes he could be abrupt.
He was also impatient. He had the minor drawbacks of a person who started public life
at the top. I would not have been surprised if, at the marriage of one of his family
members, he had proceeded to cut the wedding cake until someone called him back; he
would then look like a shy child.
It did not behoove Chou En-lai to judge Nehru when he, in his rank arrogance, let his
country attack India, thereby returning evil for good.

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36. Nehru and the Services
Nehru entered government on 2 September 1946 with an understandable prejudice
against the ICS and other so-called "superior service" people who constituted the steel
frame of British imperialism in India. The fact that the External Affairs Department was
then, and for some time to come, manned at the top by British civilians did not help
matters. The Commonwealth Relations Department, also under Nehru, were manned
by Indians of indifferent caliber.
An experience with a very senior ICS man of the Madras cadre, S. V. Ramamurti, who
had acted as a provincial Governor under the British regime, was not a happy one. He
was sent for by Nehru as a possible choice for the chairmanship of the Refugee Relief
and Rehabilitation Board. Nehru wanted a person who was not emotionally involved in
the influx of refugees. He explained the problem to Ramamurti. Here was a great
human problem; instead of discussing the challenge posed by the problem and its
possible future dimensions, Ramamurti foolishly raised questions about his position,
salary and emoluments, place in the Warrant of Precedence, perquisites such as the type
of bungalow, railway saloon and the like. Nehru terminated the interview and got rid of
the pompous fellow.
But the aftermath of partition proved that most of the ICS and other service people were
free from narrow communalism and functioned fairly and justly in an extremely
difficult situation. This created a good impression on Nehru. From then on it was
smooth sailing for the civil servants. The defence services provided the finest example
of noncommunal outlook.
Around 1953 I took up with the PM three issues: (i) Abolition of Lee Commission
passages for Indian ICS officers; (ii) abolition of the practice of stating pensions to
Indian officers, both civil and military, in terms of pound sterling; (iii) abolition of the
title of Commander-in-Chief for the three service chiefs.
The Lee Commission extended to Indian ICS officers, their wives and dependent
children the privilege of return passages between India and England and staying in
England for a few months five times during their career at government expense and
drawing their salaries during that period in pound sterling. The PM wrote to Home
Minister K. N. Katju and Cabinet Secretary Y. N. Sukthankar about it. He also
mentioned it in Cabinet which directed the Home Ministry to submit formal proposals
for consideration and decision. In spite of repeated reminders to the Home Ministry and
the Cabinet secretariat, nothing was done for about five years. Then, suddenly, a paper
was submitted to the Cabinet for the abolition of the Lee Commission passages. This
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month holiday in England where they had gone on their last entitlement under the Lee
Commission! This is a typical example of the dilatoriness of the civil service and the
incompetence of the Home Minister.
Abolition of sterling pensions was also done at the same lime. In all democratic
countries the Head of State is the Commander-in-Chief of all the services. The
serviceman in the top position is designated as the Chief of Staff. He has no command
functions; territorial Commanders have. General Cariappa, who thought that the
mantle of Lord Kitchner had fallen on him, was the loudest in protesting against the
proposed change. Some top brass in the army went to the extent of saying in private,
"The army will not tolerate a Dhoti Prasad as C-in-C." (The reference was to President
Rajendra Prasad.) On General Cariappa's retirement, the change was carried out.
During Bangladesh operations, Chief of Army Staff General Maneckshaw, in his
message to Major-General Firman Ali, used the expression, "the forces under my
command." Maneckshaw had no command. The command was with the GOC-in-C,
Eastern Command. It is a small matter, but important.
In 1950, when new diplomatic passports were to be issued to the PM and myself, I
asked the Chief Passport Officer to dispense with narrating the countries for which the
passport was valid and simply write on page four, "All countries in the world." He
protested and said that there was no precedent for it. I told him, "You never had a PM
before; don't be a slave to precedent; create one; I want the passports with all the
required visas within a week." He asked, "Suppose foreign governments object?" I said,
"They will not object; go and do as you are told." He went to his boss, the Foreign
Secretary, who had sense enough to direct him to issue the passports as I wanted.
I shall not discuss individuals here except one—Girja Shankar Bajpai, who prospered
well under the British. He became a member of the Viceroy's Executive Council rather
early in his career. Before the Quit India movement he was sent as Government of
India's Agent-General in Washington. His office was an adjunct of the British Embassy.
His principal function was to malign the national movement, Gandhi and Nehru. In his
private conversations Bajpai took delight in referring to Nehru as the Hamlet of Indian
politics. Bajpai was pompous in his behavior, language and pronunciation. Once in
New York he was late for an important function. He ordered the chauffeur to ignore
traffic rules without endangering safety. Soon the police stopped his car. Bajpai was
annoyed and asked the policeman, "Don't you know who I am?" and answered the
question himself, "I am Bajpai." The policeman, who had a lively sense of humor,
replied, "If you do not observe traffic rules, you will soon be mince pie." At a large party
in New York, the man at the entrance announced, "Sir Baj and Lady Pai," Sir Baj was
visibly annoyed and entered into an unseemly argument with the announcer.

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Soon after the formation of the interim government, Bajpai was recalled from
Washington. Since the senior officers in the External Affairs Department were British,
Bajpai was appointed as Secretary-General. This was also intended to relieve Nehru,
from routine meetings with foreign Ambassadors. In many ways Bajpai was a good
Secretary-General. But in dealing with Kashmir affairs, he was, a disaster. He did not
know where India's interests lay. He allowed himself to be tied into knots by UN
representatives. Instead of sticking to basic principles and asking for an answer to our
original complaint to the UN on Pakistan's aggression, he indulged in a series of
compromises and complicated the whole issue which is still with us today.

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When we went to London in 1948 for the Commonwealth Prime Ministers' Conference,
we were put up at Claridges Hotel as guests of the British Government. The manager of
the hotel came up to me and told me that the hotel had orders from His Majesty's
Government that regardless of shortages, we were to be served whatever we wished to
have. I asked him what was the most difficult thing to get. He said eggs, and added that
butter and sugar were served in limited quantities to the inmates of the hotel. I told
him, "The Indian delegation will share your shortages; eggs might be cut out; and
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nothing special is required by us." He was pleased and impressed and said no other
delegation staying in the hotel had done such a thing and added, "I know you come
from the land of Gandhi." I did mention the matter to the PM who thoroughly approved
of my action. I knew he would. But Bajpai became a bundle of grumbling and never
forgave me. Conditions in England were so bad that when we went over to Dublin for a
couple of days. Lady Mountbatten thrust into my pocket innumerable pound notes of
different denominations and told me, "Mac, we have not eaten good meat for a long
time, be an angel and bring me some from Dublin." On return to London I delivered to
her fifty kilos of succulent fresh meat, several dozens of fresh eggs, and the small
balance of her money. She showed her joy and excitement almost like a half-starved war
prisoner.
Here I must digress a little. Agatha Harrison took me to a new prefab housing colony
for working class people. I visited one small family of husband, wife and a child. The
husband was away to his factory. With Agatha's permission I asked the young woman
some questions about the rigors of life, shortages and the like. Quick came the
spontaneous reply, "Yes, we have our difficulties and shortages, but my child gets the
same quantity of milk as a Duke's child, we share our shortages, I have no complaint."
Rationing during and after the war was a clean operation, and there was very little
black-marketing. From London we went over to Paris and I had a chance of seeing
conditions there. They were totally different from what I saw in London. Before leaving
Paris for India, I said to myself, "The British are a great people."
On our first visit to the United States in 1949 we travelled from London to Washington
in President Truman's personal aircraft Sacred Cow. We had a halt in Newfoundland
where the American air base Commander looked after us. Nehru and Indira descended
from the plane followed by Bajpai and myself. After the Commander drove away with
Nehru and Indira, an air force Captain approached Bajpai with a silly question,
"Understand English?"
Bajpai turned red in the face and asked irritatedly, "What do you want?" I intervened
and told the Captain, "He was educated at Oxford and speaks King's English which few
Americans know." The Captain said sorry to Bajpai who regained his composure. For
two days Bajpai was full of that Captain and told me innumerable times, "Think of it,
that bumptious bastard asking me if I knew English! I speak many languages—English,
French, Persian, Sanskrit, Urdu and Hindi." If Bajpai had added Yiddish to the list, I
would not have cared to question him!
For the formal social functions in the. United States, Bajpai had ordered from Saville
Row, of all places, a black achkan, churidar pyjamas, and a couple of Gandhi caps. They
were ill-fitting—the result of being an insufferable snob. At a dinner in Washington
Bajpai and I found ourselves on opposite sides of the table. He looked like a cook in his
new costume which he had never worn before in foreign countries. The vivacious
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woman on one side of Bajpai, whom she had known personally before but could not
recognize in his comic costume, started a conversation about Lady Bajpai, who,
incidentally, was more than double the size of her husband. She asked, "How is Lady
Bajpai? Isn't she wonderful? That mole on her chin is heavenly." Bajpai had a sense of
elevation. Suddenly she asked, "How is her little husband?" Bajpai's face fell.
Fortunately, the man on the other side of the woman started talking to her. Bajpai
revived.
During the Korea crisis Bajpai used to see Vallabhbhai Patel frequently. Both were
privately opposed to the policy of non-alignment. Bajpai's notes and drafts submitted to
the PM were slanted. I sensed an attempt at defeating Nehru at the level of details. I
spoke to K. P. S. Menon, who was for some time connected with a UN Commission on
Korea and asked him to brief the PM. He was reluctant for fear of offending Bajpai. So I
asked him to send me unsigned notes on every cypher telegram received from the office
of our, permanent representatives at the UN. Soon Bajpai discovered that his notes and
recommendations were being rejected by the PM. Bajpai complained to Vallabhbhai
Patel that I was influencing the PM too much and that I was a dangerous socialist. More
about this in the chapter on Vallabhbhai Patel.
After two extensions Bajpai was due to retire from the service early in 1952 and was
desperately anxious to go as a Governor. He mentioned it to the PM who was
noncommittal. So he came to me to enlist my assistance. He said he was interested only
in the governorship of Bombay. That did not make matters easy. I spoke to the PM who
said that most of the important Chief Ministers were reluctant to accept civil servants as
Governors. He expressed his reluctance in thrusting Bajpai on anybody and added,
"There is something lacking in that man." However, he said that I might have a word
with Bombay Chief Minister B. G. Kher, who happened to be in Delhi then. I met him
and spoke about Bajpai. He was not enthusiastic, though not entirely opposed to the
idea. He said that he would consult Morarji Desai the next day in Bombay. He
suggested that, since Morarji Desai was going to succeed him as Chief Minister after the
impending elections, I might ring him up in Bombay within three days after he had
spoken to him. Accordingly, I rang up Morarjibhai who asked me, "Does he drink?" I
said no. I also told him that Bajpai smoked only one cigarette a day at tea time. These
momentous revelations had a good effect on Morarjibhai. He included Bajpai's name in
the panel of three names submitted to the PM. So Bajpai achieved his ambition. He had
the best of both worlds.

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37. Nehru and Women
Nehru once described himself as a pagan. He was completely amoral. I have yet to see a
Nehru, male or female, who believed in the proposition, "one man: one woman."
Napoleon had many mistresses; but women did not influence him in matters of state.
He once said, "Woman is the occupation of the idle mind, and the relaxation of the
warrior." These can be applied equally to Nehru.
MRIDULA SARABHAI
A female who pursued Nehru with determination and in an uninhibited manner
normally not associated with Indian women was Mridula Sarabhai, heiress from a
wealthy Gujarati family. She was a dedicated and tireless Congress worker. By early
1946 Nehru had lost interest in her. She lacked feminine charm, clad herself in the most
atrocious clothes, and generally disfigured herself. In 1946, when Nehru became
Congress President, he wanted several socialists in the Working Committee and two of
them as General Secretaries. Since they chose to keep out, Nehru appointed B. V. Keskar
and Mridula Sarabhai as the General Secretaries. Mridula knew very little English. So
she employed more than one ghost writer. Sometimes she herself wrote in English to
Nehru on political matters. Few could make head or tail of her letters in English.
In 1947 Mridula Sarabhai was put in charge of the recovery of abducted women during
partition. In this she worked tirelessly and with great zeal and rescued many women.
She showed great courage but it was the reckless courage of a wild boar. She possessed
no more than the wisdom of the same animal. There have been many cases of Mridula
inflicting physical violence on refugee women, especially on the abducted ones. In 1947
and thereafter many people thought that this Amazon missed her profession and that
she should have joined the Military Police. She utterly lacked humaneness in dealing
with human problems.
Bhuta Singh, aged fifty-five, a bachelor Sikh farmer, rescued a seventeen year old
Muslim girl, Zanib, trying to flee her abductor to whom he paid Rs. 1,500 early in 1947.
He married her and within eleven months Zanib gave birth to a daughter. They lived
happily. A nephew of Bhuta Singh, having an eye on the uncle's landed property,
reported to the authorities the presence of Zanib in the village. The information
ultimately reached Mridula. Her gang, with a police escort, arrived on the scene and
forcibly took Zanib, much against her will, put her in a camp for six months, and finally
sent her to Pakistan to join her relatives. How a forlorn Bhuta Singh knocked at every
door to get his wife restored to him, how he became a Muslim for the sake of Zanib,
hair he smuggled himself and daughter Tanveer to Pakistan, how he managed to meet
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Zanib whom he dearly loved, how Zanib's relatives forced her to disown him, how he
committed suicide, how he was buried with solemnity in Lahore by local Muslims, how
his daughter Tanveer was brought up by foster parents in Lahore and married off to an
engineer, constitute a tragic story known to millions in Pakistan and India. Bhuta Singh
came to symbolize to millions of Punjabis on either side of the border the tragic
aftermath of their insane conflict as well as the faint hope that man's ceaseless quest for
happiness might ultimately overcome the hatred that keeps them asunder.
In 1953 and after, Mridula was accused of anti-national activities in regard to Kashmir,
and the Government of India, on the advice of Home Minister Govind Ballabh Pant,
arrested and imprisoned her. In my view she was not guilty of anti-national activities,
but foolishness arising out of mulishness and a total lack of a sense of proportion.
I had two tiffs with Mridula. One was in 1946 at the Retreat in Simla during the visit of
the British Cabinet Mission. Dressed in Pathan clothes, she barged into my room and
started ordering me about. I had never met her before. I asked her, "Who are you?" She
replied, "I am Mridula Sarabhai." I said, "Never heard of such a name; if you behave like
this in future, you will get into serious trouble with me. Now you can go." She gave me
a dirty look and left.
The second was when I heard that whenever the Prime Minister went on tours, she
used to ring up Chief Ministers and Chief Secretaries directing them what should be
done about security arrangements, food, etc. I immediately had a circular sent to the
Chief Ministers and Chief Secretaries to say that such interference by Mridula Sarabhai
was unauthorized and that in future she should be ignored. I did not fail to inform
Mridula about what I had done. After that she was careful.
Whenever I think of Mridula, the saying of the late West German Chancellor Adenauer
comes to my mind—"God," he said, "limited the intelligence of women; but he forgot to
limit her stupidity at the same time."
PADMAJA NAIDU
Born on 17 November, 1900, Padmaja Naidu was the elder of the two daughters of
Sarojni Naidu. Endowed with a perpetual bedroom look, with features somewhat
resembling a Negress's, she fashioned herself after the "Black Princess" of the Ajanta
Caves. She was pathetically overburdened by illusions. She convinced herself that she
was irresistible and that every man who came across her fell in love with her. At a
relatively early age she took great delight in imagining that Nawab Salar Jung was in
love with her. If he happened to look at any other woman, Padmaja would go into
tantrums. Eventually, she was cured of her hallucination in so far as the Nawab was
concerned.

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I first met Padmaja in Allahabad in February 1946. She made it a practice to be in the
Nehru household in Allahabad and later in Delhi as often as possible. She always
insisted on being put up in the room next to Nehru's. Heavily burdened with huge,
hanging breasts, she perfected the art of folding them into her bra to look like Mae
West. She always wore low-cut blouses and deftly managed to let her sari fall
frequently from her shoulder before men to bare her breasts and make them shake like
jelly pudding. When she occupied her room, she filled it with the aroma of powders
and perfumes. I never considered her to be attractive; blit of course, tastes differ.
Invariably, Padmaja turned up at Nehru's residence from Hyderabad in the first week
of November to celebrate the birthdays of Nehru (14th), Indira (19th) and of herself
(I7th). Indira disapproved of Padmaja coming too often and staying for too long; but
she could do nothing about it.
One day Indira told me that she did not like Padmaja arriving with her father in public
places such as Rajpath on Republic Day, Red Fort on Independence Day and the like,
and wanted me to do something about it. I told her, "You stop going with your father in
his car and let your two little boys go with him; you and Padmaja should go together in
another car ahead of your father." This used to work, to the annoyance of Padmaja who
was not free from wanting to give misleading impressions.
In the winter of 1947 Nehru was scheduled to pay a brief visit to Lucknow. Sarojini
Naidu, who was then the Governor of UP, spread the news among her inner circle that
Nehru was going to propose to Padmaja. And Padmaja was all keyed up and in great
expectations. And, lo! Nehru arrived in Lucknow with Lady Mountbatten. Padmaja
locked herself up in her room and went into a tantrum. She refused to meet Lady
Mountbatten.
During the winter of 1948 Padmaja was elected to the Constituent Assembly from
Hyderabad. Soon after, she landed herself in the Prime Minister's house and occupied
her strategic room. She had no intention of taking advantage of the government
accommodation normally allotted to a Constituent Assembly member. She had every
intention of overstaying her welcome. However, the problem was soon solved. She was
told of the impending arrival of Lady Mountbatten on her way to the East and again on
her way back. A couple of days before Lady Mountbatten's arrival, Padmaja moved into
Western Court where she established herself in a suite of rooms next to her sister
Leilamani Naidu who was working in the External Affairs Ministry. After Lady
Mountbatten's arrival, Padmaja sent for Indira and told her that she wanted to hand
over all the letters Nehru had written to her. She also told Indira that she was going to
commit suicide. Indira told me about this the same day; she was somewhat disturbed. I
asked her to tell Padmaja that if she handed over the letters in a sealed packet, she
would give it to her father. Then I burst into laughter and told her the story of a young
married woman who lived in a house on the bank of the river Pamba near my ancestral
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home in Travancore. The woman had perpetual quarrels with her husband. One day,
while it was raining very heavily and the river was in flood, the woman shouted at her
husband and told him that she was going to drown herself in the river. She rushed into
her room, took an umbrella, opened it and rushed out of the house towards the river.
The foolish woman thought that the husband would get a fright and run after her. He
did nothing of the kind. She stealthily returned to the house, crestfallen. Then the
husband burst out laughing and asked her, "Will anyone who is serious about
committing suicide give notice of it to others? Will anyone who wants to drown herself
in the river or the sea, open an umbrella for protection from the rain?" I advised Indira
that "hereafter if anyone tells you about the intention of committing suicide, you should
encourage the person to carry it out."
While in Delhi, Lady Mountbatten wanted to meet Padmaja. She sent a message to
Padmaja that she would call on her at the Western Court. But Padmaja, who was in a
tantrum, refused to meet her.
After the departure of Lady Mountbatten, while Padmaja was composed and somewhat
normal, I met her in Western Court. Among other things she told me sadly, "Jawahar is
not a one woman's man." I said to myself, "She has taken such a long time to discover
it." She did not know when to retire. A year later, having seen two photographs of Lady
Mountbatten in Nehru's bedroom, Padmaja could not bear the thought of not having
one of hers there. So she hung a small but provocative painting of hers (bust) above the
fireplace in Nehru's bedroom—in such a position that Nehru could see it while lying in
bed. The moment Padmaja left Delhi, Nehru had the painting removed and stored.
Soon after Govind Ballabh Pant became Home Minister, he wanted to send Padmaja,
whom he had known personally well and for long, as Governor of West Bengal. He
consulted the Chief Minister, B. C. Roy, who was a long-standing personal friend of
Padmaja. Roy enthusiastically welcomed the appointment. Pantji also had an informal
talk with President Rajendra Prasad who also welcomed it. Only after that did Pantji
broach the subject with the Prime Minister. Nehru's younger sister, Krishna
Hutheesing, wrote to me an astounding letter asking me, "Was it done for services
rendered?" I wanted to reply and tell her that the initiative in the matter was taken by
Pantji without clearance from the Prime Minister. But then I remembered Nehru's
advice to me not to enter into any correspondence with her in so far as possible.
Padmaja proved to be a good Governor. After Roy she got on well with his successor P.
C. Sen. She remained Governor of West Bengal for a little over ten years, She reveled in
behaving like a pucca "Lat Sahib." Her truly noncommunal outlook and approach to
problems in the problem state were eminently helpful. She retired from governorship
some time after the death of Nehru.

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SHARDHA MATA (Assumed name)
In the autumn of 1948 a young woman from Banares arrived in New Delhi as a
sanyasini named Shradha Mata. She was a Sanskrit scholar and well versed in ancient
Indian scriptures and mythology. People, including MPs, thronged to her to hear her
discourses. One day S. D. Upadhyaya, Nehru's old employee, brought a letter in Ijindi
from Shardha Mata about whom he spoke very highly. Nehru gave her an interview in
the PM's house. As she departed, I noticed that she was young, shapely and beautiful.
Meetings with her became rather frequent, mostly after Nehru finished his work at
night. During one of Nehru's visits to Lucknow, Shradha Mata turned up there, and
Upadhaya brought a letter from her as usual. Nehru sent her the reply; and she visited
Nehru at midnight. Padmaja was hysterical.
I did not like Upadhyaya taking personal interest in this matter and I told him so. I said
I had my misgivings about Shradha Mata. Nature's fool, as he was, he told me with
great conviction that she was a goddess.
Suddenly Shardha Mata disappeared. In November 1949 a convent in Bangalore sent a
decent-looking person to Delhi with a bundle of letters. He said that a young woman
from northern India arrived at the convent a few months ago and gave birth to a baby
boy. She refused to divulge her name or give any particulars about herself. She left the
convent as soon as she was well enough to move out but left the child behind. She
however forgot to take with her a small cloth bundle in which, among other things,
several letters in Hindi were found. The Mother Superior, who was a foreigner, had the
letters examined and was told they were from the Prime Minister. The person who
brought the letters surrendered them. But he declined to give his name, or the name of
the Mother Superior, or the name and address of the convent. Nehru was told of the
facts.
He tore off the letters without any emotion reflected in his face. He showed no interest
in the child then or later. This reminded me of Subhas Chandra Bose's attitude when he
discovered that an Austrian girl, who was working in his office in Germany during the
war, became pregnant by him. A.C.N. Nambiar, who was with Bose, told me the story.
Bose was anxious to have an abortion done; but it became impossible because
pregnancy was a little too advanced. Bose did not want to marry her at that stage. He
was too interested in his political future. Bose left Germany by a submarine for Japan.
In matters of sex or the consequences arising therefrom, no politician will normally risk
his political future by owning up and accepting the responsibility in all its aspects.

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Shardha Mata returned to north India and discarded her sanyasini's robes. The last I
heard was that she was in Jaipur and was going about with bobbed hair, lipstick and all
that. Never again did she attempt to see Nehru.
I made discreet enquiries repeatedly about the boy but failed to get a clue about his
whereabouts. Convents in such matters are extremely tightlipped and secretive. Had I
succeeded in locating the boy, I would have adopted him, He must have grown up as a
Chatholic Christian blissfully ignorant of who his father was.
Whenever I think of the boy, the story of Napoleon's son by Countess Marie Walewska
comes to mind. Napoleon discovered his existence only at Elba while, with the
connivance of the British, Marie Walewska visited him on the island with her little son.
As they were returning to the mainland, Napoleon took the boy in his arms, kissed him
and gently put him down. Then he started to present him with a sword by saying, "My
son, this was the sword with which I conquered Italy when I was twenty-six." Marie
Walewska asked Napoleon to take back the sword and told him, "Oh Napoleon, there
are other ways of distinguishing oneself than by the sword." Her wish ultimately came
true. Her son, Alexandre Florian Joseph Colonna Walewska (1810-1868) was made a
Count of France and became French Ambassador to Florence, Naples and London. In
1855 he became the Foreign Minister of France and acted as the French Plenipotentiary
at the Congress of Paris the following year. When he left the Foreign Office in 1860, it
was to become Minister of State, an office which he held until 1863. Senator from 1855
to 1865, he entered the Corps Legislatif in 1865 and was installed as President of the
chamber. A revolt against his authority two years later sent him back to the senate. He
died on 27 October 1868.
Would anything like this have happened to Nehru's son if he were not anonymous and
if he were talented and competent? Some of the great men in the past have been
"bastards." Confucius and Leonardo da Vinci are classic examples. In modern times we
have had Ramsay MacDonald and now Willy Brandt.
COUNTESS EDWINA MOUNTBATTEN
Of all the women in Nehru's life after 1947. Lady Mountbatten was preeminent and
occupied the pride of place. She was a remarkable woman, full of compassion and
nervous energy. During the partition period, she spared no effort in bringing solace and
succor to innumerable refugees and displaced Muslims. She organized the United
Council for Relief and Welfare and brought together all the social service organizations
in Delhi within its ambit and provided the much needed coordination. Much of her
time was taken up in visiting hospitals and refugee camps which were mostly
insanitary. She did not hesitate to visit dingy hovels. Gandhiji was so impressed by her
ceaseless work that he publicly referred to her as "the angel of mercy."

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Before the Mountbattens left India, Lady Mountbatten extracted a promise from me that
I would write to her regularly. Actually I did not have to because Nehru started to reply
to her in his own hand. Their letters were numbered in order to make sure that if any
went astray, it could be detected.
In my office there was a carefully-selected confidential assistant to process mail. To
begin with I opened all communications marked personal, secret and confidential. Their
number grew so large that I soon discovered I could not cope with them. I asked the
confidential assistant to open them all except those marked "For himself" which were to
be given to me to be placed before Nehru unopened. To begin with, such marking was
to be resorted to only by Indira, Nehru's two sisters and Lady Mountbatten. The
marking became known and several people resorted to it. Letters of such unauthorized
persons were opened by me.
One day the confidential assistant opened a letter ft am Lady Mountbatten. He brought
it to me in great distress. I asked him not to worry, but to be more careful in future. I
sent it to Nehru with a slip explaining the circumstances under which it was opened
and that I had taken steps to ensure that the mistake was not repeated. Nehru was
understandably annoyed. Even today I cannot understand how a woman of Lady
Mountbatten's age could write such adolescent stuff. After this incident Lady
Mountbatten resorted to the practice of placing her letters to Nehru in a closed envelope
which was put in an outer envelope addressed to me.
Rather early in life Lady Mountbatten developed a leathery skin. I have been several
times to the Rashtrapati Bhawan swimming pool with Nehru and Lady Mountbatten
and have seen her in scanty swimming costumes. There was nothing physically
attractive about her; but she had a nice face.
Practically every year Lady Mountbatten used to halt in New Delhi for a number of
days on her way to and back from her East and Southeast Asia visits in her capacity as
Superintendent in-Chief of the St John's Ambulance Brigade.
One thing that I could not fail to notice was that whenever Nehru stood by the side of
Lady Mountbatten, he had a sense of triumph.
While M. K. Vellodi was the Chief Minister of Hyderabad after the integration of that
state with the Indian Union, some well-meaning people approached Nehru to use his
good offices with the Nizam to make the long-overdue financial settlement for Niloufer,
the Turkish wife of the Nizam's second son from whom she had separated. She was
then living in Paris. Nehru wrote to Vellodi to persthade the Nizam to do the right
thing in the matter. The Nizam, who disapproved of both his sons did make a
reasonable settlement. This made tongues wag in Hyderabad and the gossip that Nehru
was personally interested in Niloufer spread to Delhi. At this time a Director of the
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Tatas, known as a busybody, told Nehru that Niloufer was anxious to come to Delhi to
thank him personally for his kindness. The Tata Director went to the extent of
suggesting that Niloufer might be put up in the Prime Minister's house. Nehru told him
that Niloufer was welcome. Later Nehru told Indira about Niloufer's intentions and told
her that she should be put up in the PM's house as a personal guest. Knowing the
background, Indira was worried and wanted me to do something. I expressed my
reluctance to interfere in a matter like this; but she insisted that it was really in her
father's interest to do so. I sent for the Tata Director and told him that Niloufer's
proposed visit could only do some harm to the PM. I added that it was inappropriate
for her to come especially after the PM had done her a personal favor. I asked him to
have her visit cancelled and to tell her that she might meet the PM at Paris airport on his
way to London within three weeks. I saw her at the Orly airport and found that she was
more beautiful than I had imagined.
Sometimes Nehru had to be saved from himself and some of his so-called friends. The
Tata Director made me recall a saying of Voltaire, "Oh God, save me from my friends; I
shall deal with my enemies myself."
The last female to make a try for Nehru was a princely woman of northern India. She
was married at the age of fifteen and, before she knew what it was all about, she had
produced, by the time she was twenty-two, four children. After that her eyes opened up
about the ways of her husband and his keeping several women as his mistresses. Even
though they did not part, they were estranged, and lived a life of make believe.
Two years before Lady Mountbatten's death in 1960, the princely woman persuaded
herself that she was in love with Nehru. Even though she met Nehru off and on, she did
not get very far. When Nehru died, she imagined herself to be in deep private
mourning—which was a pathetic sight to watch.
A few years after Nehru's death, this woman's bearded husband also died. Without
wasting much time she found for herself another beard—this time it belonged to
someone from western India. He prefers to be known as "author and political thinker."
Ramsay MacDonald, himself a bastard, remained Prime Minister of Great Britain
despite many love affairs and several illegitimate children. As his son, Malcolm
MacDonald, almost boastfully put it, "He was probably the greatest natural Don Juan in
the history of British politics. To portray his life without taking into account this side of
his personality is like failing to depict Beethoven's handicap of deafness during the
composition of his greatest works.
Lord Krishna had 16,008 women in his life. Neither he nor his favorite Radha have
suffered in reputation on this account. On the contrary, they are lauded and profusely

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depicted in paintings and other forms of art as well as in poetry. That is a basic Indian
tradition. On the whole the Indian people did not suffer from mid-Victorian prudery.

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38. Nehru and the Socialists
It is now part of history that Vallabhbhai Patel, Rajendra Prasad, Rajagopalachari, J. B.
Kripalani, Jairamdas Daulatram, Jamnalai Bajaj and Shankarrao Deo, resigned from the
Congress Working Committee in June 1936 after the Lucknow Congress where Nehru
took over as Congress President. Their reason was that Nehru's preaching of socialism
and encouraging the Socialist members of the Working Committee at that juncture was
harmful to the country. Later, on Gandhiji's advice, they withdrew the joint letter of
resignation. This conflict of ideology was always there in dormant form. The Socialists,
in their hurry, did not help matters. They had been declaring that the old guard
represented outworn ideas and were obstructing the progress of the country and that
they deserved to be cast out of the positions they were holding. The Socialists also felt
that Nehru was not supporting them enough. Nehru's concept of nonalignment started
to take practical shape in the late twenties because of the untimely struggle between the
right and the left la the national movement.
In the first quarter of 1946, having caught out Maulana Azad for telling two lies to him,
Gandhiji was anxious to see a change in the presidentship of the Congress. Having a
clear vision of the coming of independence, he wanted to see that Nehru, his chosen
heir, was put in position. Gandhiji asked Acharya Kripalani to formally propose
Nehru's name for Congress presidentship. Thus Nehru became Congress President for
the third time on 9 May 1946. At the AICC meeting in Bombay soon after, Gandhiji
advised Nehru 0 feel free to have a Working Committee of his own choice. He went to
the extent of suggesting the dropping of Vallabhbhai Patel, Rajendra Prasad and others
of the old guard, and assured him that he would personally ensure that none of them
created any difficulties for him. Nehru did not accept this advice, He however wanted a
good number of prominent Socialists, including Jayaprakash Narayan, in the Working
Committee. He spoke to them. Jayaprakash Narayan, who was the principal spokesman
for the Socialists, did not believe in the British intention of quitting, and was most
adamant that they were going to prepare the country for the final assault on British
imperialism. The Socialists refused to join the Working Committee. This was the
beginning of the long Socialist drift into the wilderness, owing primarily to a lack of a
sense of realism and timing.
When the Constituent Assembly was formed towards the end of 1946, Nehru, as
Congress President, was again anxious to bring a number of prominent Socialists into
the assembly and eventually into government, But Jayaprakash Narayan and others still
kept on harping on their pet theory of the final assault on British imperialism. One very
valuable woman Socialist called Nehru the Indian Kerensky. That was at a time when
she was having a brief honeymoon with the Communists. People who are incapable of

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original thinking import foreign situations into Indian conditions and make themselves
ridiculous.
Nehru was perforce left with no choice but to carry on with such tools as were available
to him. However, he continued to have a soft corner for Jayaprakash Narayan. Even
though he did not say so, Nehru hoped that Jayaprakash Narayan, with his charisma,
would eventually succeed him as Prime Minister. If Jayaprakash Narayan had exercised
patience and had accepted Nehru's advice at an early stage, Nehru would have
groomed him and left government in 1962.
Nehru made yet another attempt to bring in Jayaprakash Narayan and other Socialists
after the death of Sardar Patel—this time into government. Before his meeting with
Nehru, Kamaladevi Chattopadhyaya arranged for Jayaprakash Narayan to meet me at
two after-dinner sessions at her residence. He had prepared fourteen points for
discussion with Nehru. A copy of these was sent to me by Karnaladevi who was
anxious that Jayaprakash Narayan should work with Nehru in government. When I
saw the fourteen points, my reaction was, "The Almighty had only ten!" Most of them
were copybook Marxist theory. I did not want an endless argument with him. I took up
only one point—nationalization without compensation. I quoted to him the example of
the Tata Iron and Steel Company. He immediately said, "They have already given more
than several times the face value of the shares, by dividends." I asked him to find out
from his friend Minoo Masani how much of the shares of Tata Iron were held by
widows and small people and at what price they had acquired them over the years. I
told him that at that time Tata Iron ordinary shares of Rs. 75 each were being quoted in
the market at well over Rs. 300 per share. I asked him if he would penalize the widows
and small, people, who were numerous, by nationalizing the company without
compensation. He had no answer. I attended the second meeting without enthusiasm. I
told Kamaladevi that nothing concrete would come out of the meeting between
Jayaprakash Narayan and Nehru. That is exactly what happened. I felt sad because I
considered Jayaprakash Narayan as a fine person and a fit successor to Nehru in
government and felt that the drop from Nehru would not be too, steep as happened
later in the case of Lal Bahadur.
From then on the Socialists, particularly Jayaprakash Narayan, drifted. He got attracted
to Panchayati Raj in Nepal, basic democracy in Pakistan, the Bhoodan movement,
partyless democracy, Sarvodaya and now total revolution about which few people
know anything. I once tried to figure out the various dans (gifts)—Bhoodan, Gramdan,
Sampatidan, Shramdan, Bhudhidan, Jivandan. I dislike all dans. I suppose it is all part
of the trusteeship theory of Gandhiji's.
It was only after the effects of the partition wore off, and after the death of Vallabhbhai
Patel, that Nehru could give any serious thought to socialism; and at the Avadi session

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of the Congress the resolution on a Socialistic Pattern of Society was moved by Maulana
Azad and passed.
The Socialists, among whom there were some good and able people, some Don
Quixotes and some scatterbrained clowns, needlessly found themselves in the
wilderness primarily because of a series of wrong assessments of situations. This often
reminded me of a statement by Bernard Shaw, "Socialism had a chance in Western
Europe but for the Socialists."
In a mood of frustration Jayaprakash Narayan described Nehru as the greatest
roadblock in the way of socialism. After the disappearance of the roadblock I have
never heard anything from Jayaprakash Narayan on socialism.
For individual Socialists Nehru continued to have personal regard and consideration.
As in the case of Acharya Kripalani once, Nehru saw to it that the Congress did not put
up a candidate against Asoka Mehta in a by-election to the Lok Sabha.
Once Pantji, who was then UP Chief Minister, telephoned me from Lucknow to find out
if the PM would be good enough to visit Faizabad to campaign for a Congress
candidate against Acharya Narendra Deva who was contesting a by-election to the UP
Vidhan Sabha. I offered to put him on to the PM; but he did not want to speak to the
PM directly. He wanted me to persuade the PM and ring him back the next evening. I
mentioned the matter to the PM who got annoyed. He asked me to tell Pantji that it was
not his practice to campaign in by-elections and added, "Also tell him that if I make an
exception and visit Faizabad, it can only be to campaign in favor of Narendra Deva
against that fool who is opposing him." I did not, of course, convey all this to Pantji, but
only conveyed the PM's excuses. Pantji understood. Nehru had great regard and
personal affection for Acharya Narendra Deva.
Recently, George Fernandes, a pseudo-Socialist, called Nehru a hypocrite. I doubt if
Fernandes knows the meaning of the word he has used. He can only appear pitifully
ridiculous in the eye of millions of people by making such statements about a man, the
laces of whose shoes Fernandes is not worthy to unloosen. In the United States also one
can come across bumptious twerps and scatterbrained clowns who call Abraham
Lincoln a "lousy bastard."

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39. More on Nehru
In his early years in office, Nehru lacked knowledge of statecraft as practiced in modern
times. That is why he declared India's intention to hold a plebiscite in Kashmir. It
served no purpose except to provide a handle to Pakistan. Then, like Woodrow Wilson,
Nehru went about offering a referendum each in the French and Portuguese
possessions in India. These were impulsive off the cuff pronouncements. There was no
referendum in India for British withdrawal. Looking back, one is entitled to doubt if a
referendum in Goa would have gone in favor of India.
Nehru was, to a large extent, responsible for the organization of Pradesh Congress
Committees on a linguistic basis during the freedom struggle. For example, Madras
Presidency had four Pradesh Congress Committees—Tamil Nadu Congress Committee,
Andhra Pradesh Congress Committee, Kannada Pradesh Congress Committee, and
Malayala Pradesh Congress Committee. To a considerable extent he was influenced in
this by the Soviet system which even provided for secession of federating republics and
autonomous regions. What Nehru forgot was that if any Soviet constituent unit tried to
secede, it would have been crushed ruthlessly and masses of people transported to
Siberia. We know what happened to the sovereign state of Czechoslovakia. When revolt
occurred there, the Soviet Union propounded a new theory of "limited sovereignty" for
"socialist countries" and intervened with massive force and suppressed the uprising
mercilessly.
The States Reorganization Commission was the inevitable result of organizing linguistic
Pradesh Congress Committees. When the report of the commission was received,
Nehru was in favor of keeping Hyderabad as a separate entity mostly due to its
composite culture. But he really had no choice in the matter. Nehru was in favor of
splitting up UP and Bihar into smaller manageable states; but Govind Ballabh Pant
talked him out of it. Pant's only argument was, "How can the land of the Ganga and the
Jamuna be cut up?"
After decisions were taken on the States Reorganization Commission recommendations,
some people from Kerala approached Nehru saying that they did not want a separate
state and would like it to be part of Tamil Nadu or Mysore (later to be known as
Karnataka). Like a drowning man clutching at a straw, Nehru seriously made the
proposal to Kamaraj who said the equivalent of parkalam (will see). He had no intention
of seeing anything. Then Nehru spoke to Nijalingappa who promised to consult his
colleagues. Actually he had no intention of consulting anyone. In fact he told me, "Why
should we have a cancerous growth on our body?"

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Whenever I went to London with the PM, I was invited to spend a weekend with
Aneurin Bevan and his wife Jennie Lee at their farm in Chesham. On one occasion,
sipping coffee and cognac after dinner, Bevan talked about Nehru for whom he had
great admiration. He said that Nehru was too much of a refined man to be a
Communist who is normally associated with coarseness and ruthlessness. He also said
that Nehru was too much of a democrat to be a radical Socialist. Jennie Lee asked, "Then
how will you describe Nehru?" Bevan replied, "Nehru is, without doubt, the last of the
great British Liberals—and something more, a man of great compassion."
Nehru had no use for any form of organized religion which only repelled him.
However, he was not irreligious. He used to carry in his satchel a copy of the Light of
Asia, Bhagavad Gita, the four Gospels, Asoka's Edicts, and the UN Charter—all in tiny
editions.
Before the Chinese invasion, when trouble loomed large on the horizon, Krishna Menon
made an extraordinarily foolish statement, "We won't send a postcard to the Pentagon."
But on 19 November 1962 Nehru sent a frantic telegraphic message to President
Kennedy requesting air cover. The copy of this message was not filed in the PM's
secretariat, or the Ministry of External Affairs. It is in the "file at home" papers which I
started in the PM's house years ago. In response to Nehru's request, an American
aircraft carrier was on its way to the Bay of Bengal. Lal Bahadur was not aware of
Nehru's appeal when he, as the new PM, answered a question in parliament
contradicting a statement in Sudhir Ghosh's book Gandhi's Emissary. Sudhir Ghosh had
written that Nehru had asked for an aircraft carrier and that it was positioned in the Bay
of Bengal. Technically, Lal Bahadur was right; but in substance he was wrong.
Professor J. K. Galbraith, in his book Ambassador's Journal wrote on 5 January 1963:
M. J. Desai told me about Indian thinking on containment of the Chinese. They
are willing to work with the United States, both politically and militarily, in the
rest of Asia. This is quid pro quo for our assistance and quite a remarkable
advance. Nehru, a week ago, hinted that their thoughts were moving in this
direction.
M. J. Desai, who was Secretary-General of the Ministry of External Affairs, happened to
meet me around that time and related to me what he had told Galbraith and added that
he did so with the PM's full knowledge and approval. When I met the PM soon, after
that, I asked him about it and he confirmed what M. J. Desai had told me.
When Galbraith's book was published, the passage quoted above was hotly contested
by some left wing Congressmen and others in parliament. Little did they know that
Nehru never considered non-alignment as an eternal verity. He, in fact, did not like the
word when it was first coined. He adopted it because he could not think of a better
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single word. Nonalignment was never a fetish with him as it is with some "progressive"
politicians of little consequence.
On 13 November 1962 Ambassador Galbraith wrote to President Kennedy, "All his life
Nehru has sought to avoid being dependent on the United States and the United
Kingdom—most of his personal reluctance to ask (or thank) for aid has been based on
this pride. Now nothing is so important to him, more personally than politically, than to
maintain the semblance of this independence." Galbraith is substantially correct.
I could never reconcile myself to two very unwise statements of Nehru's. After the
completion of his talks with the young President Kennedy in Washington in 1962, he
was asked at a press conference how he got on with the President. The American
pressmen were giving a chance to Nehru to say something gracious about their
President who was an admirer of Nehru and had singled him out for respectful
reference in his inaugural address to the joint session of Congress. But quick came the
most unfortunately worded reply, "I get on with all kinds of people!"
The other statement was in parliament after it was belatedly made known that the
Chinese had completed the construction of the Aksai-Chin road across Ladakh in
Indian territory. Nehru in his speech described the area as one "where not a blade of
grass grows." No blade of grass grows on the vast stretches of the Arabian desert
underneath which lies untold wealth in "black gold." We do not know yet what the
bowels of the bleak and inhospitable regions of the Himalayas hold.
Nehru was never vindictive. He did not believe in hounding people. I can remember
only two instances of his publicly castigating individual Congressmen. One was
Gopichand Bhargava of Punjab whom he called "a man lacking in political integrity."
The other was D. P. Mishra about whom he said at a public meeting in Jabalpur during
the 1951-52 general elections, "I want to warn the people of Madhya Pradesh against the
activities of Dwarka Prasad Mishra." Years later, Indira and Mishra became thick as
thieves as mutual supporters when it suited them.
Nehru was conscious of his good looks, proud of his shapely head, his perfect nose and
his "runner's feet." After a very tiring day, he would have his bath and come to dinner
as a rejuvenated man. His powers of recuperation were immense.

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40. Govind Ballabh Pant
A descendant of Maharashtrian Brahmans settled in Almora under the patronage of the
Maharaja of Kumaon before the advent of the British, Pantji became a successful lawyer
and a leading figure in the national movement. He became the first Chief Minister of UP
and remained in that capacity until early 1955 when he came over to Delhi.
In September 1954, having seen Kailas Nath Katju as a supremely ineffective Home
Minister, I suggested to the PM that he might persuade Pantji to come over to the
centre. The PM was gruff with me and said, "I have asked him several times; he never
said yes or no; I am not going to ask him again; you go and talk to him if you like." So I
went to Lucknow early in October 1954. Before going I spoke to the PM who told me
that if Pantji was prepared to come, he could have as his portfolio Finance, Defence or
Home. From Lucknow Pantji took me to Naini Tal where we had some quiet talks.
Ultimately he agreed to come. He said he was most reluctant to take up Finance because
central finance was vastly different from state finance (he was also Finance Minister of
UP) and at his age he would not like to study the intricacies of high finance. He was
also not enthusiastic about Defence. He added that Home was his natural portfolio. He
extracted a promise from me that I would help him until he found his feet in
labyrinthine Delhi. Thus, on 10 January 1955, Pantji was sworn in as Union Home
Minister. Katju went over to Defence.
When I returned from Naini Tal, Lal Bahadur came to see me. He was eager to know if I
had succeeded where the PM had failed. He was not too happy when I told him that
Pantji was coming and that he should be of considerable assistance to the PM. Lal
Bahador said, "You may be disappointed."
After Pantji's arrival in Delhi, he used to visit me almost every evening for about six
months in my study in the PM's house, on his way back from his evening drive, and
talk with me for half an hour. I had to find a wide chair to be put in my study to
accommodate Pantji's elephantine frame. I had already asked the Cabinet Secretary to
see Pantji frequently and brief him generally.
One day Pantji told me that he was finding it difficult to travel in commercial planes
because of his unwieldy bulk. In UP he had the use of a flying club plane; he did not
like to travel by train. He asked me if anything could be done in this matter. I spoke to
the PM and suggested that Maulana Azad and Pantji might also be put on the list of
persons entitled to use IAF planes of the VIP squadron for official purposes. The PM
agreed and appropriate instructions were issued to the Defence Ministry. I knew about
Pantji's proverbial unpunctuality. When I conveyed to Pantji the news about the
arrangements for him, I told him that the TAP people are sticklers for punctuality and
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that he would have to observe their timings strictly as, otherwise, he wouldn't find
them at the airport. Pantji was not a great traveler. With the IAF observed punctuality.
One evening Pantji was in a gay, jovial and mischievous mood. He spoke to me about
the most important characteristic of a wise and civilized man. He said, "If a man finds
his wife in bed with another man, he should disappear without making any sound; the
next time he sees her, he should be very pleasant and convey his profoundest and
undying love to her." I dismissed the subject by asking him, "How many people can do
that?"
After Pantji became Home Minister, the PM directed successive Finance Ministers to
discuss the budget personally with the former before coming to the PM in the absence
of the PM from India, matters relating to External Affairs were referred to Maulana
Azad and those relating to economic and internal affairs to Pantji. Maulana Azad
presided over Cabinet meetings. All important matters, however, were referred to the
PM by code telegrams wherever he was. After the Maulana's death, it was all Pantji.
In 1956, after his resignation from the Cabinet on 24 July in protest against the exclusion
of Bombay city from Maharashtra under the States Reorganization Bill, C. D. Deshmukh
carried on an unseemly attack on Pantji, accusing him of corruption, and publicly stated
that he was prepared to give evidence before a judicial commission. Deshmukh also
detailed his charges against Pantji. Nehru was upset and annoyed. He requested S. R.
Das, retired Chief Justice of the Supreme Court of India, to go into the charges. In a
personal talk with me Pantji said that he was deeply grieved that towards the fag end of
his life of service and sacrifice for the nation, he should be subjected to such humiliation
by a small fellow "who was no more than a toady of the British arid, after independence
a desiccated calculating machine." He added. "But for my admiration, affection and
loyalty for Jawaharlalji, I would have resigned and gone away from Delhi." Justice S. R.
Das, who went into the allegations against Pantji, completely exonerated him; and
Deshmukh made a monkey of himself in the process. Both Deshmukh and Pantji shared
the trait of vindictiveness. Pantji had the size, memory and vindictiveness of an
elephant.
During Pantji's tenure as Home Minister, the Maharaja of Dholpur died without an heir.
I suggested to the PM that the theory of lapse might be applied as was done in some
cases during British times. The MP wrote to Pantji more than once on the subject. The
Maharaja of Nabha, whose wife was the daughter of the departed ruler of Dholpur,
appeared on the scene to press the claim of his second minor son to succeed to the
Dholpur throhe. The Maharaja of Nabha was seeing Pantji's son-in-law more frequently
during this period than was good for the latter. Eventually Pantji persuaded himself to
support the claim of the Nabha infant.

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In view of the PM's letters on the subject, Pantji was hesitant. He spoke to me about the
matter and put forth certain unconvincing and specious arguments in favor of the
Nabha infant. He suggested that I might speak to the PM. I replied that in such a matter
it was appropriate that he himself should talk to the PM. He was reluctant. I had no
intention of pulling his chestnut out of the fire. Finding that I was reluctant, he waited
for a couple of weeks and then saw the PM. Later, I was to discover that the PM bad
reluctantly acquiesced in Pantji's proposal. In the process Pantji's son-in-law earned a
bad name, and tongues wagged against Pantji also.
Despite Lal Bahadur's prediction, Pantji continued to be a tower of strength to the PM
until his death, which Nehru mourned by not attending any formal social functions in
London where he had gone rather belatedly to attend a meeting of the Commonwealth
Prime Ministers' Conference. Nehru had great affection, regard, and respect for Pantji—
the Tiger of Kumaon.

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41. T. T. Krishnamachari
After a stint in business as agent of Lever Brothers in the south, T. T. Krishnamachari
came to the Constituent Assembly December 1946. He had a patron in Delhi in N.
Gopalaswami Ayyangar for whom Nehru had great regard. Krishnamachari made a
mark in the Constituent Assembly proper and the Constituent Assembly (Legislative).
On the eve of the formation of the dominion government on 15 August 1947, Nehru had
TTK on the list for inclusion as a Cabinet Minister, But Sardar Patel had no use for TTK
and objected to his inclusion. TTK however had the illusion that he was very much in
Patel's good books. That illusion remained with him all through, and I did not wish to
disabuse his mind. Sardar Patel insisted on the inclusion of Shyamaprasad Mookerjee in
the Cabinet even though Gandhiji was opposed to it. Nehru relented because B. C. Roy
also, for different local political reasons, pleaded for Mookerjee who became Minister
for Industry and Civil Supplies. TTK was deeply disappointed because Gopala swami
Ayyangar had given him hopes.
After the resignation of Shyamaprasad Mookerjee, TTK got his chance to enter the
Cabinet, as Minister of Commerce and Industry TTK proved to be a signal success.
In the early fifties a person called Mulraj Kersondas of Bombay, who was known to
Pandit Motilal Nehru and the PM, came to see me. He said that the chief of the Soviet
trade representative in India had offered him technical assistance and financial
collaboration to start a large steel plant in India. Mulraj Kersondas had met TTK, but the
latter dismissed it without a thought. I told Mulraj, that I was somewhat surprised at
the Soviet offer of technical and financial collaboration with private industry in India.
He said that he had seen Soviet Ambassador Menshikov that day and would ask him to
get into touch with me. I spoke to TTK the same day. He told me that the Russians did
not know how to make steel. He reminded me of an old American woman who, when
told that the Soviet Union had produced a car, asked, "Does it run?"
Menshikov rang me up and invited me to have a quiet lunch with him with no one else
present. At the lunch he confirmed the offer of the Soviet trade representative. I said
that the steel plant could be established in the public sector with Soviet assistance. I put
him in touch with the Secretary of the Ministry of Production which was in charge of
steel. This was the beginning of the Bhilai steel plant which was in turn the beginning of
considerable industrial and trade relations with the Soviet Union and subsequently
with East European countries. Menshikov kept in touch with me and we had many
lunches together until he left India.

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Even though steel was not one of his subjects, TTK negotiated with B. M. Birla for
establishing a large steel plant in the private sector with American collaboration. B. M.
Birla made all the necessary arrangements and TTK tried to push the proposal through
the Planning Commission and the Cabinet. Gulzarilal Nanda was dead set against it
and the PM lent his support to him. TTK was incensed and sent in his resignation on the
eve of the PM's departure for London. He made it clear that he did not wish to continue
in government unless steel was transferred to him. The resignation was never formally
accepted. TTK went off to Madras in a huff saying that the ball was in the PM's court.
This action of TTK's was both unwise and untimely.
On our return from London, I mentioned to the PM in the car, while going home from
the office, the question of recalling TTK's whose resignation was not yet accepted. The
PM lost his temper right royally. The car shook. He said, "I am not going to recall that
insufferable fellow, that obnoxious merchant of discourtesy." I held my ground and said
quietly, "You have lost many Cabinet Ministers from the south—Rajaji, Giri and
Gopalaswami Ayyangar, and you are now left with K. C. Reddy to represent the entire
region south of the Vindhyas." He kept quiet. That evening, on my own, I sent a
teleprinter message to Ram Nath Goenka in Madras, through the Indian Express office in
Delhi, asking him to go and see his friend TTK and tell him on my behalf that he should
come back to Delhi unconditionally and that he should not cause embarrassment to the
PM by sticking to conditions. I added, "I saw no insuperable difficulty in having steel as
part of his diet eventually." I placed before the PM a copy of My teleprinter message. At
that time I was working on a paper for the reorganization of some economic ministries.
Wiser counsels prevailed and TTK returned to Delhi and resumed his work in the
Ministry of Commerce and Industry.
In a reorganization of government machinery, the new Ministry of Steel came into being
on 15 June 1955 and TTK was asked to take charge of it in addition to his existing
portfolio.
Soon after the resignation of C. D. Deshmukh as Finance Minister, TTK took over the
Finance Ministry on 1 September 1956.
TTK was a highly temperamental person with a very bad tongue. At least on two
occasions I saved him from the wrath of two prominent MPs for whom he used foul
language.
When he took over as Finance Minister, TTK brought in H. M. Patel as the Principal
Finance Secretary. TTK told me that he would give a great deal of responsibility to Patel
and in fact treat him as a Minister of State. I told him, "Fine; but Patel is an over
energetic person who can prove to be too much of a handful." TTK also described B. K.
Nehru, who was then in the Finance Ministry, as the most brilliant civil servant in India.
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I asked him how he could possibly say that without meeting all the civil servants in
India. He kept quite. Within a year TTK told me, B. K. Nehru is a nitwit." I simply could
not understand how the most brilliant man could suddenly turn out to be a nitwit!
It was TTK's practice to walk into my office in Parliament House frequently and spend
an hour with me discussing everything except the budget.
I shall skip subsequent events which led to TTK's resignation from Nehru's Cabinet.
TTK got elected to the Lok Sabha in 1962 unopposed. Everyone knew that this was
prearranged with the Swatantra Party opponent. TTK was back in the Cabinet when the
new government was formed. In the Lal Bahadur Cabinet in 1964 TTK again became
Finance Minister. But there were plenty of people to level charges against him. He told
Lal Bahadur that ILE, would resign unless he made a statement in parliament clearing
him. Lal Bahadur said he could not do that unless a Supreme Court judge privately
inquired into the charges as was done in the case of K. D. Malaviya.
Thereupon, TTK resigned and went home to Madras never to return. He kept up a
sporadic correspondence with me. Unlike Krishna Menon, TTK was a grateful man.
All those who levelled charges against TTK were to learn subsequently that he died a
poor man. As H. G. Wells said about Pericles, "Religious intolerance and moral
accusations are the weapons of the envious against those in public positions." I retain
the most pleasant memories of my relationship with this controversial and difficult
person.
In his last days, TTK told several people, including journalists, that Nehru had thought
of him as his successor. Nothing is further from the truth.

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42. Kamaraj
Beautifully black as ebony, with lips like those of an anteater, Kamaraj always reminded
me of Homo Erectus, the earliest generally accepted representative of the genus man,
which was widespread in Asia, Africa and Europe 500,000 years ago. An anthropologist
seeing Kamaraj for the first time might have had second thoughts about the place of
origin of man and might have concluded that man originated in India and not in Africa.
An American, who had a wry sense of humor, once remarked that Kamaraj's mother
must have been an inkpot.
A member of the Nadar community who were toddy-tappers like the Eazhavas of
Kerala, Kamaraj became a protege of the late S. Satyamurti, to whom he remained loyal,
and entered the national movement as a Congress volunteer. With little formal
education, Kamaraj could speak only Tamil. This remained a handicap throughout his
life. He managed to learn enough English to understand a conversation in that
language. He refused to learn Hindi. Privately he remained an anti-Brahman in spite of
his loyalty to Satyamurti. In this and in his opposition to Hindi, he was as strong as any
DMK leader in Tamil Nadu. His anti-Brahmanism, however, was confined within the
borders of Tamil.
By dint of hard work, total dedication to the cause and the help of Satyamurti, Kamaraj
soon rose in the Congress hierarchy and became President of the Tamil Nadu Congress
Committee. He was a strong opponent of Rajaji and in this he did not hesitate to defy
even Gandhiji. For a long time Kamaraj remained aloof from the corridors of power in
Tamil Nadu. He preferred to pull strings from behind the scenes.
Kamaraj, who remained a bachelor, led a simple life which never changed with
acceptance of office or when he became the powerful Congress President and kingmaker after Nehru's time. But he had a benefactor in a Tamil Christian who had
extensive business interests in Kerala. From this man Kamaraj took judicious financial
assistance for himself, his mother and his dependent sister. Eventually Kamaraj
rewarded his benefactor by getting him elected to parliament. I knew the man well.
In the fifties, Kamaraj was persuaded to accept office as Chief Minister of Tamil Nadu.
He was already a member of the Congress Working Committee. During his tenure as
Chief Minister he never charged government the travelling and other expenses when he
came primarily to attend Congress Working Committee meetings in Delhi even though
he attended to a great deal of work for the Government of Tamil Nadu while in Delhi.
He was perhaps the only Chief Minister to be so meticulous in this matter.

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Soon after the Chinese invasion of India, Kamaraj expressed to the PM his desire to give
up as Chief Minister and devote all his time for organizational work. He knew that the
DMK was gaining considerable ground in Tamil Nadu. Nehru, by that time, was an ill
man. Indira and C. Subramaniam took up the thread where Kamaraj left off and the
Kamaraj Plan was hatched. Nehru gave in and accepted it. Kamaraj and a number of
politically important people, and some not so important, resigned from government. In
the chapter "Lal Bahadur" I have referred to the circumstances under which both
Morarji Desai and Lal Bahadur got out. It was clear to all but the credulous that the
Kamaraj Plan was a plot primarily to get rid of some inconvenient people.
Soon Nehru got Kamaraj elected as the Congress President, in which capacity he
functioned no more than as a Congress volunteer while Nehru was alive. Kamaraj had
an awe of Nehru.
Kamaraj blossomed forth as a fixer and king-maker after Nehru's death. In the chapter
"Lal Bahadur" I have referred to the circumstances under Which Lal Bahadur became
the PM and the part Kamaraj played in it.
After Lal Bahadur's death, Kamaraj and other bosses chose to support Indira against
Morarji for the leadership of the Congress Party in parliament. The ostensible reason
Kamaraj gave was, "She will attract votes like a magnet." The fact is that the bosses did
not want a strong man. Radhalc Rishnan's comment to an Egyptian editor about Indira's
election was, "We can see a beautiful face every morning in the newspapers."
Radhakrishnan thought very poorly of Indira's intellectual capacity and general
competence. He told me so. He also told me that one of the things he regretted most in
his life was his recommendation made during Nehru's life-time to send her as a
delegate to UNESCO and to get her elected to its governing body. He said that Indira
proved to be an utter flop in Paris.
When the Indian rupee was devalued in a drastic manner under the Indira regime, the
media blared out the advantages of devaluation and that it would have no effect on
domestic prices. Kamaraj was very upset at the devaluation. The next morning he found
that the price of brinjals had gone up. To everyone who saw him those days he was full
of brinjals. About this time Kamaraj happened to see me in a friend's house. He spoke to
me bitterly against Indira. He related to me what Indira had said about him to someone
whose word he would not question. She said, "Who wants to talk to Kamaraj? He is
such a bore." I told him that she was the type that would kick the ladder by which she
climbed, He nodded agreement. Then he came out with devaluation and brinjals, and
commented in Tamil, "chinna pennikku moolai illai," meaning the little girl has no brains. I
said, "My dear fellow, you have discovered it too late. She has no understanding of
economic affairs. Arithmetic had always been one of her weak points. I do not think
even now she can add two and two and make four. She does not know the difference

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between an acre and a hectare. Why do you blame her? You have to blame yourself."
Kamaraj kept quiet.
And then came the 1967 general elections Kamaraj's illusion that Indira would be a
magnet to attract votes proved to be a mirage. Congress lost in many states and in
parliament also the party position became precarious. The Kamaraj Plan lay shattered
and exposed. Tamil Nadu was lost to the Congress. Kamaraj himself got defeated in the
election to the legislative assembly by an unknown student. The once powerful
Congress President limped back to Delhi. He was a doubly defeated man, helpless to
direct the course of events. He did not want Indira as the Prime Minister any more. In
the interest of the battered party he also did not want a contest for leadership. Indira's
position was also not strong in the party. Kamaraj ultimately persuaded Morarji Desai
not to contest. He told Morarji, "You go in; otherwise she will make a further mess of
things." He extracted an agreement from Indira to designate Morarji as Deputy PM—an
honorific without power. Kamaraj was hurt by the editorial of a prominent scribe in
Delhi who wrote, "Hand Over and Go."
Later Kamaraj got himself elected to the Lok Sabha in a by-election. Subsequently he
was succeeded as Congress President by Nijalingappa who looked like a bullfrog and
was very much of an indecisive man.
Kamaraj lived to receive further insults from the "chinna pennu" (little girl) whom he had
built up, and died a disillusioned, broken and unhappy man.

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43. Lal Bahadur
Humility is a good thing, but over humility is near to crookedness; silence is a
virtue, but undue silence bespeaks a deceitful mind.—Chinese Proverb
Lal Bahadur had plenty of reasons to be humble; but he need not have shown over
humility. In his early days he was a Congress volunteer hanging around Anand
Bhawan in Allahabad. He was a shrewd dwarf of a man who never offended anyone.
Once an elderly Congress woman told me, "Whenever I see little Lal Bahadur, I feel like
placing him on my lap and feeding him with some milk."
He started his official career as a Parliamentary Secretary in the first UP government
under Govind Ballabh Pant. Later Pantji promoted him to the Cabinet and give him the
innocuous Police portfolio. Lal Bahadur generally kept away from groups in the
Congress.
Early in September 1951, when Nehru took over as Congress President, consequent on
the resignation of Purushottamdas Tandon, and the AICC was in the doldrums with
feverish preparations being made to gear up the organization for the impending general
elections, I suggested to Nehru to have Lal Bahadur and U. S. Malliah as the General
Secretaries at the AICC. He asked me to ring up Lal Bahadur in Lucknow and give him
a hint and, in any event, ask him to come to Delhi at once after speaking to Pantji. Lal
Bahadur came and took over as one of the General Secretaries. He was invited to stay in
the PM's house. He stayed in the room opposite mine. During that period I had great
sympathy for him, mostly because he worked long hours like me and took his meals at
odd times. At that time he was afraid of that Amazon Mridula Sarabhai and asked for
my protection in dealing with her. I asked him, whenever he had trouble with her, to
report to me and I assured him that I would put him right with the PM. I advised him
to ignore her as much as possible.
I did not particularly like the way Lal Bahadur was dealing with the PM. He would try
to find out what was likely to please the PM and act accordingly. Once I told him that
he should change his approach and added, "You place facts before him and you will
find that in ninety-nine percent of the cases his reaction will be sound." He replied,
"Mathai Sahib, I know you don't want anything from Panditji; you can even scold him;
but I am a humble political worker and I cannot afford to adopt your approach." He
continued to be a calculating man.
Nehru and Sri Prakasa stood for election in 1951-52 from adjoining constituencies in
Allahabad district—Nehru from Phulpur and Sri Prakasa from the city proper. Lal
Bahadur was put in charge of the election campaign in both. After the election Lal
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Bahadur joined the Union Cabinet as Minister of Railways and was soon elected to the
Rajya Sabha in 1952.
Lal Bahadur's resignation from the Cabinet after the railway accident, when the second
general election was round the corner, was not wholly free from political motives for
the future. For many ordinary Congress MPs, Lal Bahadur had put on a halo.
In the second general election in 1956 Lal Bahadur got elected to the Lok Sabha and
returned to the Cabinet, this time as Minister for Commerce and Industry. Both in the
Railways and in his new ministry, Lal Bahadur's performance was less than average. He
was a fence-sitter with a sterile mind. As regards Congress organizational matters,
however, he was a first-class man in second-class politics. During those years, whenever
I thought of Lal Bahadur, the story of a famous Chinese poet used to come to, my mind.
The poet was, thank heavens, one who loved the good things of life. One evening he
was drunk and got into a tiny boat and rowed to the middle of the yellow river in bright
moonlight. There he saw the reflection of the full moon in the water. Like all poets and a
few other species "he was all imagination compact." He imagined and passionately
believed that the reflection of the moon was the woman he had wanted all his life. He
laid down the oar and bent down with outstretched hands to embrace the beloved
woman. Alas, the boat capsized and he was drowned. Before his death, this delightful
man had left behind in writing a profound truth fit to be considered as one of the
eternal verities, "Myself having been brilliant and clever and made a mess of my life in
the conventional sense of the word, the one ambition left in me is that my only son and
heir should grow up as a mediocre so that he will end up as an Ambassador and a
Cabinet Minister." How true of our own ministers who "strut and fret their hour upon
the stage" and torment people by speaking on every conceivable subject about which
they know nothing!
In the execution of the controversial Kamaraj Plan Nehru did not want Lal Bahadur to
go. This episode was related to me by Lal Bahadur himself. But a wise man, whose
identity I do not wish to disclose now, told Nehru, who was an ill man then, that either
Lal Bahadur and Morarji Desai should go out together or both should stay in the
Cabinet. He added that if Morarji alone was sent out, it would be obvious to the public
that it was an unprincipled Chanakyan plan for throwing out Morarji who, in the
process, would only acquire sympathy and support. That is how Lal Bahadur got out.
But after Nehru suffered a stroke in Bhubaneswar, he recalled Lal Bahadur as Minister
without Portfolio for the ostensible purpose of assisting the PM. With a room in the
External Affairs Ministry, Lal Bahadur spent the most frustrating time of his life till the
death of Nehru. All important matters were taken to Nehru by the Cabinet Secretary
and the senior Secretaries of the External Affairs Ministry while Indira would be
hanging around. All that Lal Bahadur got was some reports and other reading material
submitted to him by the Deputy Secretaries of the External Affairs Ministry. During this
period Lai Bahadur complained to me bitterly about Indira. He also told me with a
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measure of sadness, "I miss you terribly. If you were with Panditji, things would have
been different." Even in his precarious physical condition Nehru was not inclined to
delegate. He ought to have told the Cabinet Secretary and the senior officials of the
External Affairs Ministry to take up all matters with Lal Bahadur and put up to him
only such matters as they or Lal Bahadur thought should finally be cleared by the PM.
He did nothing of the kind because throughout his life he had, as is said in a Chinese
proverb, "a secondrate man's belief that you must do everything yourself to have it well
done."
Even before Nehru's death on 27 May 1964 the bosses of the Congress, particularly
Kamaraj, Atulya Ghosh, C. B. Gupta, and S. K. Patil, with Sanjeeva Reddy on the
periphery, had decided upon Lal Bahadur to succeed Nehru as the PM. They did not
want a strong man like Morarji Desai. In fact Nehru had given an indication of his
preference by recalling Lal Bahadur to government after his stroke. Indira very much
wanted Acting Prime Minister Gulzarilal Nanda to be confirmed as PM. Nobody that
mattered would look at him, and Indira was a person of no particular consequence
then.
So, little Lai Bahadur became the PM. The popular joke at that time was that India
deserved a man as the PM and not a mouse. About ten days after Lal Bahadur took over
as the PM, N. R. Pillai took me out to the cinema. The newsreel shown that day
included the scene of Lal Bahadur receiving Anasthas Mikoyan, the Soviet Deputy PM.
Lal Bahadur's puny figure, with his Jawahar jacket unbuttoned, doing namaskar with
folded hands invited peels of derisive laughter from the audience. I felt sorry for Lal
Bahadur for the terrific disadvantage he suffered from in succeeding Nehru because the
drop from Nehru to him was so unbridgeably great. This reminded me that soon after
Lord Addington succeeded Pitt as the Prime Minister of Great Britain, Castlereagh
thundered in parliament, "Pitt is to Addington what London is to Paddington." Lord
Addington did not last for long.
Two eventful things happened during Lai Bahadur's brief tenure as PM. The first was
the Kutch incident. We lost some territory in the process. The second was the brief war
between India and Pakistan. Under international pressure in which the Soviet Union
was most actively involved, India agreed to a ceasefire when we had the upper hand.
During the war some scribes of the press extolled Lal Bahadur as "the man of steel," an
epithet which caused me much amusement for I knew him over the years as no more
than a man of cheese. He did not even know where our forces were deployed on the
western front. Fortunately our Chiefs of Staff then, particularly General J. N. Chaudhuri
and Air Chief Marshal Arjan Singh, were first-class men. During that short war Lai
Bahadur and his family never slept in their house. Radhakrishnan told me that they
slept in a rat hole—a sprawling underground cellar from the basement of Rashtrapati
Bhawan, dug deep and far into the far-flung vegetable garden and the small woods
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beyond in Lord Linlithgow's time during the second world war. Radhakrislthan refused
to go underground. He told me that he preferred to die with his fellow-men breathing
fresh air.
At the Tashkent conference, called by Soviet Prime Minister Alexi Kosygin, Lal Bahadur
succumbed to pressure and agreed to everything Kosygin demanded. From Tashkent
Lal Bahadur rang up his staff in Delhi to find out the reaction in India. Normally he
would have returned to Delhi to a hostile reception. But, like Fakhruddin Ali Ahmed
after him, Lal Bahadur knew when to die. Death stills most controversies.
Two nights before Lal Bahadur's death in Tashkent, I had an unusual dream. I saw a
dead Lal Bahadur being taken out of a plane at Palam airport. Early next morning I rang
up my friend P. K. Panikkar who told me, "Your horoscope is such that the dream " will
come true." I said, "Damn my horoscope, I wish Carl Jung were accessible to me at this
moment."

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44. Two Weather-Beaten Ministers
Both Jagjivan Ram and Swaran Singh became ministers primarily because they
happened to belong to their respective communities and continued for long for the
same reason.
JAGJJVAN RAM
Nehru's original choice of a scheduled caste member for the interim government in 1946
was Muniswami Pillai from Madras, a state notorious for its barbarous practice of
untouchability. Rajendra Prasad took the initiative in sponsoring Jagjivan Ram about
whom he spoke to Vallabhbhai Patel and Gandhiji. Then they all pleaded for him with
Nehru, and the latter fell in line. That is how Jagjivan Ram got in. Again, in 1952, Nehru
did not want to include Jagjivan Ram in the Cabinet. He wanted to send him as a
Governor. But Rajendra Prasad, who was then President, persuaded the PM to keep
him on in the Cabinet. Jagjivan Ram possesses qualities of shrewdness and cunning and
resembles Rafi Ahmed Kidwai in a certain type of efficiency and also luck.
A bulky file grew in the Home Ministry about Jagjivan Ram. This had some
repercussions on his position later on. The only living person who has seen the file is
Morarji Desai apart from myself.
Now Jagjivan Ram seems to have made himself indestructible; but he could have shown
some courage by resigning from government when the emergency was imposed
without the Cabinet's knowledge.
SWARAN SINGH
But for the vulgarization of words in Hindi and Punjabi, his name would have been
Swarna Simham, meaning Golden Lion. As Nehru lost confidence in the political
integrity of Baldev Singh, Swaran Singh was pulled out of the Punjab government in
1952 and inducted into the Union Government as a Cabinet Minister. No minister in the
Union Government has held so many portfolios as Swaran Singh in his long innings. A
decent man with average ability with the background of a district court lawyer, he
lacked imagination and boldness in the discharge of his functions. One action of his
while he was Minister for Works, Mines and Power made me remember a saying, "God
created only two kinds of people—good people and good-for-nothing people." On my
recommendation the PM and Home Minister Pant took the initiative in persuading the
Chairman of the Union Public Service Commission to induct K.K. Sahni, a senior
executive of Burmah-Shell, into government. That was the beginning of an oil policy for
the government. To begin with, Sahni was posted to the Planning Commission as he did
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not wish to accept the junior post of Petroleum Officer in the Ministry of Works, Mines
and Power. Swaran Singh was asked to consult Sahni on all important matters
concerning oil. When the Suez crisis arose the foreign oil companies demanded a hike
in ocean freight for crude oil from the Gulf region. Without consulting Sahni, Swaran
Singh meekly agreed to it. Neither Pakistan nor Ceylon committed that folly. India lost
several crores of rupees on account of this. Swaran Singh was pulled up. After TTK took
over as Finance Minister, Swaran Singh took over the new Ministry of Steel, Mines and
Oil with K. D. Malaviya as his junior minister. Sahni was put in charge of oil. He held
the grade of something between Joint Secretary and Additional Secretary. A series of
measures which Sahni initiated resulted in the saving of crores of rupees for the
government, mostly in foreign exchange; and the colossal exploitation by foreign oil
companies was substantially curbed. I understand that Sahni is writing a book on the
subject which will be published soon. Ultimately Sahni fell out with K. D. Malaviya and
left government.
When a government has to start interminable negotiations with a foreign government
on a ticklish problem which is neither easy of solution nor wished to be solved, the man
to be looked for is Swaran Singh. With his infinite patience and inexhaustible capacity
for endless talk, Swaran Singh was a marvelous success in the negotiations with
Pakistan on the Kashmir question. His colorless personality fitted in with India's
reduced importance in international affairs when he became Minister for External
Affairs in the post-Nehru era. But he had one drawback—he had a woman's voice. This
was not helpful to him, particularly at the UN General Assembly and other
international forums.
It is in my personal knowledge that Swaran Singh was unhappy about the declaration
of the emergency, the arrest of opposition leaders, and the imposition of censorship.
The Golden Lion, however, could not gather enough courage to resign. He tarried
aimlessly and was eventually eased out; and the Prime Minister's spokesman, in a brief
statement, wrongly accused him of a burning desire to give up office after a long
innings and make place for a younger person. Swaran Singh accepted the compliment
by remaining silent.
From the photostat below, it will be clear to readers that Frank Anthony, the
distinguished Anglo-Indian leader, was on Nehru's list for inclusion in the interim
government. But due to Viceroy Lord Wavell's insistence on limiting the number to
fourteen, Frank Anthony, unfortunately, could not be accommodated.
Nehru's choice of a Parsi for the interim government was H. P. Mody; but Vallabhbhai
Patel pleaded for C. H. Bhabha and Nehru reluctantly agreed. Later H. P. Mody was
sent as the Governor of UP.

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45. Vallabhbhai Patel
Thirteen years older than Nehru and only seven years younger than Gandhiji,
Vallabhbhai Patel came from peasant stock. He possessed considerable organizing
ability and an ample measure of ruthlessness. To be the boss of the party machine came
naturally to him. That was the type of work Nebru shunned. He also left the field open
for Patel to be the Chairman of the Congress Central Parliamentary Board until
independence. This gave Patel a hold on the party machine.
I have referred to Vallabhbhai Patel in several other chapters. On 2 September 1946 he
joined the interim government in charge of Home Affairs and Information and
Broadcasting. From then on till his death on 15 December 1950 he functioned in a way
which encouraged senior civil servants to be divided into two camps; in fact
government was almost an illegitimate diarchy. Morarji Desai, who was an admirer of
Vallabhbhai Patel, once told me, "The Sardar lacks the personal discipline required in a
number two."
Power was Nehru's mistress and he did not like Patel to flirt with her; but he put up
with it in the interest of a semblance of unity and harmony. Those were not normal
times.
Before the formation of the dominion government on 15 August 1947, some interested
people set a rumor afloat that Patel would not be included in the Cabinet. Nehru was
annoyed. He not only included him in the Cabinet but also designated him as Deputy
Prime Minister. The designation Deputy PM was only an honorific without any
responsibility attached to it. But in the hands of Patel it was different.
A new Ministry of States was contemplated with the formation of the dominion
government. It was Nehru's intention to be in charge of it. In fact he had selected H. V.
R. Iengar to be the Secretary of the States Ministry. Lord Mountbatten thought that
Nehru would not be overindulgent to his friends—the princes. He believed that Nehru
had his head in the clouds and Patel had his feet on the ground. He not only wanted
Patel to be the Minister of States but also his own factotum, V.P. Menon, as the
Secretary of the Ministry so that he himself could have a finger in the pie. So
Mountbatten had a little talk with Patel to prepare him. It was Mountbatten's intention
to talk Nehru out of the new ministry. The decision about the new ministry lay with the
Prime Minister designate and not with the Governor-General. But Nehru allowed
himself to be talked out of the new ministry.
Patel did not want John Matthai as Finance Minister in the dominion government
because he had agreed with Liaqat Ali Khan, and had later persuaded Nehru to agree to
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set up an Income Tax Investigation Commission. Patel was of the view that Liaqat Ali
Khan's real motive was to ruin Hindu businessmen and industrialists. So he managed
to persuade Nehru lo bring in R. K. Shanmukham Chetty as the first Finance Minister of
independent India. Patel knew that Chetty would be pliable and do his bidding.
Chetty's appointment, with the Ottawa Pact background, came as a complete surprise
to most people. At the appropriate time Patel persuaded Shanmulcham Chetty to delete
a few names of Gujarati businessmen and industrialists from the list of those who were
to be proceeded against on the basis of the findings of the commission. When this
became known, there was a furor in parliament and Patel found himsclf in a tight
corner. He kept quiet and let down the man who did his bidding, and did not lose a
wink of sleep in the process. Nehru asked for and received Chetty's resignation. He was
succeeded by John Matthai as Finance Minister. Patel was then in no position to prevent
John Matthai's appointment. Sometime later John Matthai was to say about Chetty that
he was more sinned against than sinning.
One of John Matthai's sons got into trouble in Allahabad where he was a student at the
university. The boy, ran his car over a pedestrian and killed him. He was arrested by
the police. John Matthai, in his distress, hopefully rushed to the PM with an appeal to
save the boy. I am afraid John Matthai came to the wrong person; Nehru would never
interfere with the course of justice. The PM expressed his sympathy. John Matthai was
deeply disappointed and hurt. This coloured his subsequent attitude to the PM. Having
failed with the PM, John Matthai rushed to Patel who was eager to put him under his
personal obligation. Patel rang up Govind Ballabh Pant, UP Chief Minister, and asked
him to release the boy at once and send him under police escort to Delhi. The next day
the boy was delivered at Patel's house. He rang up John Matthai and asked him to come
over. On his arrival, Patel told him, "I have a surprise for you," and liad the boy brought
to them. He told John Matthai to get the boy out of the country without any loss of time.
So the boy was quietly sent abroad for further studies. No more was heard of the case
against him. This is one example of Patel's style of administration.
Patel was not wholly free from communalism. He never trusted Maulana Azad whose
opponent he remained. To Patel, Rafi Ahmed Kidwai was a detestable enemy. During
partition and the mass migrations of people, Patel took delight in making fun of Nehru.
He once told a group of Congress MPs that there was only one nationalist Muslim in
India. They asked who he was and felt sure that Patel would name Rafi Ahmed Kidwai.
To their surprise Patel answered, "Miulana Nehru."
One move of, Patel remained an incomprehensible mystery to me. He invited Sir C. P.
Ramaswami Aiyar to Delhi and treated him as his house guest. When the memory of
the man declaring the independence of Travancore and naming a High Commissioner
to Pakistan remained fresh in people's minds. Patel seriously recommended to Nehru
that Sir CPR might be appointed as the Indian Ambassador to the United States to
reeplace Asaf Ali. Nehru was taken aback and told Patel that he would not touch Sir
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CPW with a barge-pole. If the proposal was to show magnanimity to a traitor, the least
one can say is that it was not only ill-timed but absurd.
While Nehru was away in the United States in 1948, on a goodwill tour, Patel took the
opportunity to rush through two constitutional provisions in the Constituent
Assembly—one giving constitutional guarantee to the princes about their privy purses
and archaic privileges and immunities, and the other giving a constitutional guarantee
to the ICS and other "Secretary of State Services" to protect their emoluments, privileges
and service conditions.
Patel allowed himself to be persuaded too much by civil servants like V. P. Menon and
H. M. Patel. Nehru disapproved of these measures but chose to acquiesce in them. Patel
had also persuaded the Congress Working Committee, in Nehru's absence, to pass a
resolution permitting RSS workers to join the Congress. Nehru was hopping mad about
this. The first thing he did on return from the United States was to ask for a meeting of
the Congress Working Committee at which the Patel-sponsored resolution on RSS
workers joining the Congress was revoked.
Sometime early in 1948, U. S. Malliah, MP, had told me about his confrontation with
Vallabhbhai Patel before independence while he was Acting President of the Kannada
Pradesh Congress Committee. With a list of Congress candidates for the assembly
elections, he and his colleagues appeared before the Congress Parliamentary Board in
Bombay presided over by Vallabhbhai Patel. Maulana Azad was also there. Malliah
said his list was a unanimous one. Patel intervened to say, "I know what your
unanimity is," and proceeded to demolish the list by suggesting a number of
replacements. Turning to Patel, Malliah said, "I know the Parliamentary Board has the
authority to make changes in the list. I withdraw my list. You select your own
candidates, camp in the Kannada area and conduct the election campaign." Malliah left
the meeting abruptly, followed by all his colleagues. Patel sent a couple of people to
persuade Malliah to return to the meeting. Malliah refused and sent one of his
colleagues instead. This was the first time that Patel experienced such defiance.
Ultimately Malliah's list was approved without any change. Malliah had taken the view
that he himself was not a candidate, he had no personal axe to grind, and, therefore,
was not prepared to submit to dictation. He told me that the image of Patel as a strong
man was a myth and that he was no more than a bully.
During the independence movement Sardar Patel, and Gandhiji to a certain extent,
were opposed to Congressmen interfering in Indian states. In fact Patel wanted to
befriend the princes. It was in the teeth of Patel's and Gandhiji's opposition that Nehru
started the All-India States People's Conference. Movements against despotic rule and
for representative governments were started and kept alive in the Indian states. The
princes realized that their position was not secure without the support of their people.
But for this, the integration of the Indian states would have run into difficulties. When
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Sir C. P. Ramaswami Aiyar declared the independence of Travancore and named his
High Commissioner to Pakistan, he was physically attacked by the people and had to
leave the state.
Patel gave V. P. Menon too much of a free hand to settle matters with the princes. This
violated healthy norms of administration. Much too large privy purses and privileges
were bestowed on the princes, sometimes even without Patel's knowledge. V. P. Menon
was very much under the thumb of Mountbatten until his departure from India. Patel
was later to confess to U. N. Dhebar that unduly large privy purses were sanctioned
without his knowledge by V.P. Menon. Finance Minister John Matthai, who reveled in
straining at a gnat, readily swallowed many a camel. No important decision of the
States Ministry was placed before the PM or the Cabinet. Hailing Vallabhbhai Patel as
the Bismarck of India and the Iron Man was a little too thick.
I might refer the readers to the chapter "Mahatma Gandhi" and Appendix 2 which is an
unsigned note by Nehru circulated only to Gandhiji and Patel. In his own language
Nehru has spelt out his differences with Patel in that note.
In the chapter "Nehru and the Services" I have referred to Girja Shankar Bajpai
complaining to Patel that I exercised too much influence on Nehru and that I was a
Socialist. To Patel, words like Socialist and Communist were like red rags before a bull.
Until then I was, on the whole, in the good books of Patel even though I attached no
importance to it. He once told Rajkumari Amrit Kaur that "among those close to
Jawaharlal, Mathai is the only person who does not create trouble between us." But the
word Socialist put him on his guard. He asked Intelligence Chief Sanjeevi to find out all
about my political antecedents and my present contacts. He also asked PTT Chief K. S.
Ramachandran in Delhi to find out as much as he could about me. Sanjeevi, who knew
me well, came straight to me and told me privately what Patel had asked him to do. He
said he was not going to make any inquiries and that, after a couple of weeks, he would
send Patel a clean chit about me. I advised Sanjeevi not to do that but to carry out the
directions of his minister faithfully.
The same day Ramachandran also came to see me not only to warn me but also to
comply with Patel's suggestion that he might frighten me by saying that he was making
investigations about me. I asked Ramachandran to do me a favor by conveying the
following message to Patel that evening at his usual daily meeting with him: "Who is
Sardar Patel? I do not recognize him; but if the man with whom I have the honor to
work, asks me to declare my political faith, I shall say that I am not only a Socialist but a
Communist." In fact I wrote out this message on a piece of paper and handed it over to
Ramachandran so that he would make no mistake. Ramachandran dutifully showed the
paper to Patel who promptly asked Sanjeevi to call off the investigation.

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Before joining government, I did something which slightly annoyed Patel. After he
arrested Ram Manohar Lohia in Delhi in the summer of 1947 I visited the latter in jail
and gave him some mangoes. At that time I had a soft corner for Lohia, the Sancho
Panza, who preached the weird theory of permanent Satyagraha and whom Patel
described in parliament as the "permanent duragrahi." Nehru told me that Patel did
make a mild complaint against me for visiting Lohia and giving him mangoes. I said, "I
am not in government; but if this sort of thing embarrasses you personally, I shall not
repeat it."
In the second half of 1950 Patel sponsored Purushottamdas Tandon, a traditionalist,
obscurantist, and an ardent advocate of "shudh Hindi" and "Hindu culture" as the
candidate for election as Congress President. Nehru disapproved of the proposal, but
Patel stood firm. He was annoyed with Nehru for listening more to Rafi Ahmed Kidwai
and others than to him in Congress affairs. Nehru did not wish to get entangled in a
controversy by sponsoring a rival candidate. But Rafi Ahmed Kidwai, Mridula Sarabhai
and some others persuaded Acharya J. B. Kripalani to contest. Nehru kept aloof because
he hated the idea of being a partisan or group leader in the Congress. Patel got busy
and constantly rang up all the Congress Chief Ministers seeking support for Tandon.
The contest was a close one. Tandon polled 1,306 votes as against Kripalani's 1,092
votes—a difference of only 214. Thus Tandon got elected as Congress President on 2
September 1950. If Nehru had made his preference known publicly, Tandon would
have been badly defeated in spite of Patel. At the Nasik session of the Congress, Nehru
took the offensive. He made some fighting speeches on fundamental questions. Patel
came to Nasik but did not attend the session. He stayed quietly in Birla House there.
Patel was then not only an ill man but averse to any open conflict with Nehru. All the
resolutions sponsored by Tandon and his supporters were voted down by large
margins. I have never forgotten two Hindi words uttered by Tandon repeatedly at the
session after the voting on each resolution, "Samshadan girgaya." Nobody was left in
doubt as to who was the leader.
Vallabhbhai Patel died in Bombay on 15 December 1950. Did Patel seriously entertain
the idea of ousting Nehru at any time in the post-partition period? My answer is no.
Patel never forgot that Nehru was Gandhiji's declared heir. In fact he told several
people in private, "I cannot forget that Jawaharlal is Bapu's chosen man." Also Patel
fully realized that Nehru, not he, had the mass following. It was this conviction that
prompted him, after a great deal of agonizing struggle with himself, to support the
Nehru-Liaqat Pact on the East-West Bengal crisis—a pact which he personally
abhorred. And he showed exemplary statesmanship as well as basic loyalty by going to
Calcutta to make a public Speech in support of the pact. Nehru greatly appreciated it.
Nehru resigned from Tandon's Working Committee on 10 August 1951. Maulana Azad
followed suit the next day. Tandon made a dignified parting statement in which he said

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that Nehru was the symbol of the nation and resigned from the Congress presidentship.
Nehru was unanimously elected Congress President on 9 September 1951.

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46. Indira
When a hen crows, it heralds the end of an Empire—Chinese Proverb
When a hen crows, it heralds the end of the world—Malayalam Proverb
The first impression Indira made on me thirty-one years ago was that of conceit. About
young Disraeli, Queen Victoria said to her Prime Minister Lord Derby, "I have seen
some of the notes of the new Chancellor of the Exchequer. He is conceited." Lord Derby
made his submission, "Your Majesty, everyone has a right to be conceited until he is
successful." With Indira, conceit swelled with success.
It was my practice to keep a spare copy of everything Nehru wrote and also copies of
important telegrams and documents. With Nehru's informal permission, I let Indira
read all these daily. This helped her to inform her mind and to talk somewhat sensibly
to foreign dignitaries who sat on either side of her at social functions. She was
extremely good at keeping secrets. I also informally placed at her disposal my personal
staff—two of them who were in the same grade as the PM's PAs. This I did because, as
the PM's hostess, she had a good deal of work to do. I myself had the use of the PM's
PAs.
Indira hated small cars. When Hindustan Motors put their first cars on the road, Nehru
asked me to get rid of his "chariot" which was a Buick and buy a Hindustan. I promptly
carried out his wishes. It was only when she saw the small Hindustan that she realized
that the Buick had gone. She was livid with rage and did not talk to me for a week.
Indira had a constant complaint against her father—that he always kept quiet at
mealtimes, when they were alone, and never gave satisfactory answers to her questions.
I advised her against raising heavy stuff at Mealtimes but to tell him amusing stories
and jokes and make him laugh. This she could never do. I also asked her to note down
whatever she wanted to ask her father and that arrangements could easily be made for
her to see him quietly twice a week. But she started passing on to me her questions
saying, "Papu never fails to give you clear-cut answers." Once she said to me, with a
lump in her throat and moist eyes, that while she was in England and Europe as a
young girl she was kept in want and that on a few occasions she had to starve. This was
also an indirect complaint against her father.
One day, when she was surrounded by her two little kids, she looked at me and said,
out of the blue, "I shall not hesitate to dash my children against a rock if it is in the
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interest of the country." I got angry and told her, "You are too full of illusions. As a child
your dolls fought against British soldiers and defeated them; as a little girl you were the
Commander-in-Chief of the monkey brigade; as a teenage girl you were Joan of Arc;
and now you are Lady Macbeth. The interest of the country will be better served if you
can catch field rats and dash them against rocks." Then I walked out.
Indira's taste in art bordered on the grotesque. When Jacqueline Kennedy came to stay
in Nehru's house, Indira wasted government money by having a wooden carving made
to be placed at the fireplace in the bedroom. It was a real horror. How Mrs. Kennedy
slept in that room without getting nightmares was a wonder. But Indira was very
pleased with that horror. Verily Nikita Khrushchev uttered the truth when he said
"Modern art is the work of a donkey's tail."
It was on the recommendation of Lal Bahadur that Indira was taken into the Congress
Working Committee by U. N. Dhebar. Nehru had nothing to do with it. Her election as
interim Congress President early in 1959 at Hyderabad was also not on Nehru's
initiative. It was Kamaraj's suggestion. Nehru was a silent witness. He neither
encouraged it nor discouraged it. On his return from Hyderabad he told me so; but I
have no doubt that he was pleased. The next morning I was looking at three
photographs—of Motilal Nehru, Jawaharlal Nehru and Indira—placed in a row in the
corridor leading from the PM's study to his bedroom. After breakfast the PM and Indira
came as I was looking at the photographs: The PM asked me what I was looking at so
attentively. I pointed out the three photographs and said, "Father, Son and Holy Ghost."
He laughed and Indira was much amused.
Nehru spoke critically of Indira to me only twice. The first time was when Indira
managed to delay for a long time the surrender, to government, of the expensive
necklace presented to her by the King of Saudi Arabia. Nehru was annoyed. He told
me, "Like most women, Indu has a highly developed sense of possessions." I told him,
"It is the result of her having had no security right from childhood. I do not know what
the future has in store for her; but insecurity will follow her like a shadow all her life
and her actions will largely be governed by it." He listened attentively with a measure
of sadness. He loved his daughter dearly. Much later, while Indira was the PM, a
question on the necklace, with insinuations was raised in parliament by Ram Manohar
Lohia. It was answered by Morarji Desai who was Finance Minister and Deputy Prime
Minister. He said that the necklace was kept by Nehru in his custody in a safe. This was
totally incorrect. Nehru never kept a safe. His office in the PM's house had no safe; it
had only a small Godrej cashbox in which a necklace could not be accommodated.
There was only one safe in the PM's house. It was a Chub safe which I had put in
Indira's spare bathroom long before, at her request, to keep her jewellery and such other
valuables as she possessed. Both the keys of the safe were with her.

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The second time that Nehru showed annoyance towards his daughter was after Indira
made an unwise statement in Hong Kong, on her way to Tokyo, to fly over the North
Pole to the United States on a paid lecture tour for which she had collected many ghostwritten speeches. If I remember correctly it was in 1963. Nehru was not well then, and
yet she went. Soon after she left, Nehru's condition worsened. I had to go to the PM's
house to take charge of the situation. I rang up Dr B. C. Roy who came the next day. He
organized the course of treatment with the help of government doctors in New Delhi.
Once, while the PM and I were alone in his room during that period, he told me with a
measure of irritation, about Indira's statement in Hong Kong that her father had asked
her to join his Cabinet as Minister for External Affairs. He added that he did not make
any such offer, but a vague thought did occur to him in view of his indisposition and he
did some loud thinking in her presence for a fleeting moment. He further said that, on
mature consideration, he was unlikely to take her into his Cabinet.
On Nehru's death Indira flagrantly flouted the wishes expressed in his will that he did
not want any religious ceremonies after his death.
It can be said, without fear of any contradiction, that the Congress Parliamentary Party
voted for Indira to succeed Lal Bahadur mainly for one reason—that she happened to
be Nehru's daughter. It was indeed a tribute to Nehru. A day before the voting, a
minister visited me and said that he had advised Morarji Desai not to contest and to
give way to youth. He added, "You know her better than any person; what is your
advice?" I replied, "Go and vote according to your assessment or conscience and see me
afterwards." Straight from the Central Hall of parliament, immediately after the voting,
the minister crane to me and asked, "What is your opinion?" I said I had no doubt that
she would be elected because Nehru's image loomed large in the background." He
asked, "What is your assessment of her, what sort of a PM will she be?" I said, "She will
ruin this country. How long she will take to achieve this, I do not know. There is
nothing of the father in her except the noncommunal outlook. She will play a different
type of politics—the politics of maneuver, manipulation and deception. She will have
no loyalty to anyone except to herself. Not being overburdened with scruples, she can
do almost anything. She will administer unpleasant surprises to Kamaraj and others
who supported her. And, what is worse, there is an element of crankiness in her nature.
She will surpass Gladstone in axing people. Perhaps your turn will come soon. She will
swear by socialism, in which she does not personally believe and the meaning of which
she does not understand. When you find her swearing by socialism, remember a saying
of Samuel Johnson's, "When a butcher says his heart bleeds for his country, rest assured
that he is swearing by a sinecure." In any serious crisis in which her personal interests
are gravely threatened, she will not have the capacity to take a bold decision by herself.
She will fall into the hands of others; if they are not honest and fearless people, then she
has had it. It is enough for the present." He was flabbergasted and said that he would
write down all I had said and keep it for future reference.

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Indira's tenure as PM was marked by some very unhealthy trends: (i) Her, absurd
advocacy of committed civil servants, committed judiciary, and committed press; (ii)
the sickeningly vulgar solidarity rallies artificially arranged in Delhi on the slightest
provocation at public expense by Delhi state and the adjoining states of Haryana,
Punjab, Rajasthan, Madhya Pradesh and UP. A tribe of paid rally men were as readily
available as instant coffee, and public transport was always there; (iii) reducing the
Council of Ministers to a bunch of nonentities; (iv) befriending and making use of the
Communist Party of India and ex-communists while she was shaky and discarding
them when she felt politically safe; (v) making ghost-writers out of all except chaprasis.
The classic example of a committed civil servant was P.N. Haksar, who had some
experience only in the Foreign Service in rather minor positions, and who did not
possess a modicum of discipline and detachment so essential in a civil servant. He was
allowed to play party politics for which he was singularly unfit.
Even after a lapse of time I cannot understand how Cabinet Ministers and prominent
functionaries, with considerable experience in public life, reduced themselves to jesters,
buffoons, sycophants and abject flatterers. One made an ass of himself by saying,
"Indira is India, and India is Indira," and felt satisfied with his profundity, while two socalled political heavyweights sat on either side and applauded. The same joker hailed
Sanjay as Shankaracharya and Vivekananda! Another made a monkey of himself by
saying, "What happens to Indira, happens to India; and what happens to India, happens
to Indira"—profound secondary school stuff! And the opposition Jana Sangh leader,
Atal Behari Vajpayee, was swept off his feet at the fall of Bangladesh and blurted out,
"She is Durga!" The campaign in Bangladesh was a very ordinary military operation,
and it needed no Durga or Bhadra Kali. No Prime Minister had any option but to act the
way she did in Bangladesh. I do hope, as External Affairs Minister, Vajpayee will not
allow himself to become so easily unbalanced. UP Chief Minister Tiwari committed
blasphemy by hailing Sanjay as Lord Krishna!
After the Allahabad judgment, S. Mulgaokar and B. G. Verghese wrote powerful
editorials in their respective newspapers under the identical title "Time to Go." Tables
were turned on them and they were made to realize that it was their time to go. So
much for the freedom of the press!
To David Frost, the journalist and broadcaster, Indira said recently, "I felt utter, utter
relief when ousted from power .... When I got the news of my personal defeat, I had a
surge of relief as if a tremendous rock had been lifted from my shoulders." I don't think
she herself believes in the statement she made to Frost. She could have had the "utter,
utter relief" by casting off the "tremendous rock" herself, when the Allahabad High
Court judgment came, by resigning; thereby she would not only have salvaged herself
but enhanced her personal image. I believe it was the gravest mistake she committed;
all the rest flowed from it; unscrupulous, crude and, small men and an immature boy
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took charge of her and from then on she was no more than a miserable automaton
piling folly upon folly and strewing faggots around her.
Vision, imagination, boldness, efficiency are the essential qualities which a worthwhile
minister possesses; but above all is the capacity to resign. If the members of the Union
Council of Ministers showed courage and resigned on the question of declaring
Emergency without Cabinet approval, as laid down in the Constitution, Emergency
would have ended within a few days. These men failed at the moment of the nation's
supreme crisis. They and the vociferous supporters of the Emergency in the Congress
Parliamentary Party are a bunch of cowards who have forfeited their right to hold
public positions.
Until they disappear, there is no hope for the Congress which has a glorious record
spread over almost a century. Like the fabulous Phoenix, the Congress should burn
itself so that a new generation can rise rejuvenated from its ashes and give the country a
new leadership and new hope.
The day after Emergency was declared on 25 June 1975, my minister friend rang up and
started talking. I said, "I don't talk about serious matters over the telephone, and hung
up. He came to see me later in the day, with his diary and read out what I had told him
about ten years ago. He said "She has ruined the country all right."
I replied, "This is only the beginning; she is on the high road to ruining her party and
herself beyond repair. She will not last long. What I am worried about is what forces
will emerge in place of the Congress."
With all kinds of inquiry commissions functioning, I do not wish to write more about
Indira at present. In a companion volume to this book, I shall write more.
*******
After writing what has appeared above, I happened to glance through the book, All the
Prime Minister's Men by Janardan Thakur, a newspaper reporter. This man, who looks
like a giant sausage, barged in to see me. I find that his book bristles with untruths. He
has exhibited considerable incapacity to sift fact from fiction and great capacity for
inventing, twisting and making defamatory comments and observations. I imagine
these are inevitable characteristics of "instant history" of which we have had a big crop
in recent months. Obviously, Thakur's book was written in haste to make a quick buck.
Here is an extract from the book:
But in those earlier days she could do little but stew with impotent rage, or take
it out in dissipation. During the fifties, there were times when Nehru, a nonReminiscences of the Nehru Age; Copyright  www.sanipanhwar.com

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interfering man, got troubled over, the goings-on in the house. Indira Gandhi
would often return to the house late at night in 'quite a state' and though Nehru
knew about it he did not know what he could do. He was a man who respected
others' privacy. Nehru once gave some advice to a woman functionary of the
house which showed how well he understood his daughter. 'About Indu', he
advised the person, 'you must understand one thing—you will get by—be
available; but don't go near her. Don't intrude'.
These are atrocious and malicious inventions. Indira was the opposite of a socialite. It
was with reluctance that she went with her father for protocol functions. She never
drank or smoked. She never went out alone at night. The story about Nehru giving
some advice to a woman functionary is ridiculous nonsense. Nehru would never talk to
any functionary about his daughter.

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47. Morarji Desai
Long years ago, on a Sunday, I happened to be at Qutab Minar with a friend. He asked
me about Morarji Desai. I pointed out to him the iron pillar nearby and said, "You put a
Gandhi cap on top of that pillar, and you have Morarji Desai—a man straight in body
and mind." Nehru once told me that the two straightest men he had come across in
India were Purushottamdas Tandon and Morarji Desai.
I developed great personal regard for Morarji for his courageous stand in giving
protection to Muslims in the undivided Bombay state during the dark days of partition.
He was then Home Minister of the state and his chief, that good man, B. G. Kher, had
given him a free hand. Moraiji performed his difficult task with great personal
conviction and exemplary competence. No other Congress leader functioning in the
states, including G. B. Pant, was a patch on Morarji in this matter. This regard for him
has persisted in me ever since. Nehru was greatly impressed by Morarji's performance.
When the news of Morarji's defeat in the assembly constituency during the first general
elections in 1951-52 reached him, Nehru considered it a freak occurrence and at once
stated publicly, "He is the victorious leader of a victorious party." Morarji succeeded
B.G. Kher as Chief Minister of Bombay and later won a by-election.
Nehru brought Morarji to Delhi and he became a Union Cabinet Minister on 14
November 1956. Pantji was already the Home Minister in the Union Government.
Within a few days of Morarji's entry into the Union Cabinet, U. S. Malliah, MP, who
was Deputy Chief Whip of the Congress Party in parliament, came to see me and said
that Morarji Desai would like to be listed as number three in the Cabinet, immediately
after Pantji. I mentioned this to the PM who hesitated for a moment, but when I quoted
the example of Pantji, he agreed and I informed the Cabinet Secretary accordingly.
While he was Finance Minister, Morarji once told me that he was perturbed at the talk
of abolishing the status of Bombay as a Union Territory and merging it with
Maharashtra, and added that if it was done, he would resign from government and
retire from public life. I smiled in disbelief and told him that he would not resign and
the question of his retiring from public life would not arise. As most politicians, Morarji
is not completely free from eating his words to add to his frugal diet.
Morarji has all the fads of Gandhiji, minus his greatness, plus ample obstinacy and no
compassion.
In 1953, when I arrived in Bombay with the PM from London, I told Morarji that B. G.
Kher was serving sherry and light wines to foreign guests at the High Commissioner's
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residence and that he had told me that in the unlikely event of his returning as Chief
Minister in Bombay, he would substantially modify the prohibition policy. Morarji was
surprised and annoyed and said that he would be writing to Kher.
The legendary Motilal Nehru gave up alcoholic drinks as part of Congress discipline.
Later, when he fell ill, his doctors, including B. C. Roy, advised him to take drinks in
moderate quantities. The old man refused. Roy then spoke to Gandhiji. The great man
immediately advised Motilal Nehru to give up the abstinence. I doubt very much if
Morarji would have been so flexible.
During the visit of British Prime Minister Harold Macmillan to Delhi, British High
Commissioner Malcolm MacDonald gave a small dinner party at his residence. The
chief guest was Nehru, Morarji was one of the invitees. I was also invited. I normally
avoided diplomatic functions; but since I personally liked Malcolm MacDonald I
decided to attend. At the party I discovered that everyone was holding a glass of fruit
juice. I was told that Morarji had laid down the law that no alcoholic drinks should be
served if he was to be present. I cannot think of anything more impertinent than this,
especially because Morarji was not the chief guest and, according to international law,
embassies and High Commissions are not Indian territory. The British greatly resented
Morarji's condition, and they all had stiff drinks in the adjoining room before the dinner
which was purposely fixed somewhat late.
Two incidents in parliament made Nehru doubt Morarji's capacity to keep people
together by showing some flexibility. One was in connection with the Gold Control Bill.
There was a demand in Lok Sabha to invite the Attorney-General to the House to give
an opinion on the legality of the measure. Morarji popped up and said that even if the
whole House asked for it, he would not agree. Nehru had to overrule him; and the
Attorney-General did appear in the House. The other incident was in the Rajya Sabha
where Morarji mentioned Gandhiji's name in support of some measure. Rajkumari
Amrit Kaur, who knew Gandhiji better than Morarji, stood up and said that if Gandhi
were alive he would have disapproved of Morarji's measure. Morarji retorted in
intemperate language and called the Rajkumari a Miss Mayo. Nehru was annoyed.
After Pantji's death Morarji was the obvious person to succeed him as Deputy Leader of
the Congress Party in parliament. I was then not with Nehru officially. Nehru found
that there was considerable opposition to Morarji among Congress MPs. A section of
the party wanted to put up Jagjivan Ram to contest. Sensing the mood of the party,
Nehru suggested changing of the Constitution of the Congress Party in parliament to
have two Deputy Leaders, who were not ministers, to be elected—one each from both
Houses.
During the Chinese invasion Nehru's mind was poisoned by some, chiefly Indira,
against Morarji who was wrongly accused of intriguing against Nehru. Morarji is a man
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who would never stoop so low. He is courageous enough to come out into the open. I
know for a fact that before the split in the Congress, when Indira's position was shaky,
one politically important minister in Indira's Cabinet went to Morarji and offered his
wholehearted help in ousting her. He told Morarji that it was of the utmost importance
and urgency to get rid of Indira and went to the extent of saying that Morarji need not
even take him into his Cabinet. Morarji was then the Deputy Prime Minister and
Finance Minister. Morarji replied that so long as he was a member of Indira's Cabinet
loyalty demanded that he should not lift a finger against her. He added that he could
oppose her only after resigning from her Cabinet and that too openly. Morarji expressed
his readiness to follow the latter course at the appropriate time. That Cabinet Minister
continues to be a "big-wig" in what is left of the Congress today.
Recently, Morarji said, with a measure of satisfaction, that when Bulganin and
Khrushchev visited Bombay, he had issued liquor permits to them but that they did not
use them and did not drink while in Bombay; further, he stated that they wished they
could introduce prohibition in the Soviet Union. I never thought that Morarji could be
so naive. Bulganin and Khrushchev did not, of course, go to the Matunga liquor shop
with the permits. They must have thrown them away. Khrushchev was a heavy drinker.
The Soviet party had brought with them vast quantities of Vodka as well as brandy,
wines and champagne. These were carried wherever they went, including Bombay, and
they drank everywhere, including Bombay. They also imbibed coconut juice, while in
the south, one morning, for a change!
Morarji has considerable respect for vegetarians. One of the great qualities he
discovered in Rukmini Arundale, whom he whimsically sponsored as a candidate for
the office of President of India, is that she is a vegetarian. Actually neither she nor
Morarji is a vegetarian. There is no such thing as vegetarianism. Milk, butter, ghee and
curd are not vegetables; they are animal products. The late K.M. Munshi once told me
that an unfertilized egg was a vegetable. His theory was that vegetarianism meant not
taking life. I asked him if he had ever talked to Sir Jagadish Chandra Bose or to his
collaborator Dr Boshi Sen about life and feelings in trees, plants, vegetables, fruits and
nuts. He admitted his ignorance. I hope Morarji, in his relentless and heroic
determination to be the perfect Adam, will not give up milk, butter, ghee, curd,
vegetables, fruits and nuts. Otherwise, he will have to live on bolts!
I suppose Morarji knows that Lord Buddha, the divinely Compassionate One, was a
nonvegetarian and he died of indigestion after eating putrid pork put in his begging
bowl by a well-meaning man.
Several times in the past Morarji and I have discussed prohibition. I once asked him
how he became a fanatical prohibitionist. Had there been any incident in his life which
turned him that way? He said that there had been a case of a young man, in his home
town, who forced his sister to have sex with him when he was drunk. I told him that the
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youthful Emperor Nero had sex with his beautiful, young and voluptuous mother
Agripina when neither was drunk.
Now Morarji wants to impose total prohibition on the people of India within a
minimum period of four years. He has asked the Chief Ministers to enact laws within a
year. He does not give a thought to the sum of Rs. 4,500 million (which was the excise
revenue from the sale of all types of alcoholic drinks in 1976-77) or more per year
because it is "tainted" money. Neither does he give a thought to the enormous amount
of untainted money which will be needed for country-wide enforcement of prohibition.
Nor is he much concerned about the fate of the 500,000 people who are directly or
indirectly dependent on the industry and the trade in alcoholic drinks for employment.
I have wondered why Morarji does not consider the enormous excise revenue from
cigarettes and other forms of tobacco as tainted money. Morarji will remain blind to the
widespread abuses and the total moral degradation which total prohibition will bring,
as he did in Bombay. Morarji has quoted the Constitution. Our lengthy written
Constitution contains many irrelevant things. It narrowly escaped being further
cluttered with a provision for "monkey-worship."
I wonder if Morarji has considered, among other things: (i) the possible reactions among
the members of the defence services who are officially entitled to draw their liquor
rations (mostly rum) even in a dry state. Does he want to torment the Jawans who stand
sentinel in bleak and inhospitable regions of bitter cold in the Himalayas? Does Morarji
know that into the battle of Berlin Marshal Zhukov threw his armies after making the
men fully drunk with only four words on their lips, "Death to the Germans"? No army
will fight fierce battles on coconut juice; (ii) foreign diplomatic and consular missions in
India will remain as islands where prohibition cannot be enforced; (iii) certain tribal and
coastal regions where the people are traditionally addicted to local brews as a part of
their culture.
Morarji said recently that drinking is against our ancient culture. He has perhaps
forgotten that Soma was a powerful drink of our ancients.
Moarji does not drink, does not smoke, does not eat meat, does not eat eggs, does not
eat fish, does not take coffee, does not take tea, and stopped sex when he was twentyseven—a formidable array of virtues this! His only positive attachment is politics
which, in essence, is the pursuit of power. Had he eschewed politics also and gone for
vanaprastha (jungle exile) in accordance with "our ancient culture," he would have had
some chance of being hailed as a saint.
Jesus Christ drank wine, ate meat and fish, and even converted water into wine at the
marriage at Cana for other people. And he said, "That which goeth in defileth not a
man, but that which cometh out—covetousness, wickedness, deceit, lasciviousness,
pride." Atrocious things these!
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No Prime Minister has a right to be a Don Quixote. Total prohibition will be a total
failure leading to total degradation. No politician should thrust on administrators any
policy which is not administratively feasible. Let him campaign for temperance in
which I shall gladly join him.
Morarji will do well to read the following lines which were addressed to statesmen by
Liddell Hart in his book Deterrent or Defence:
Keep strong if possible. In any case keep cool. Have unlimited patience. Never corner
an opponent, and always assist him to save his face. Put yourself in his shoes so as to
see things through his eyes. Avoid self-righteousness like the devil—nothing is so selfblinding.
I would like to request Morarji to read Norwegian playwright Henrick Johan Ibsen's
great dramatic poem "Brand" written in 1866. Brand is a priest and an idealist with
fierce earnestness and determination to do nothing wrong. He declares himself the
champion not of things as they are, not of things as they can be made, but of things as
they ought to be. Things as they ought to be mean for him things as ordered by men
who conformed to his ideal of the perfect Adam who, again, is not man as he is or can
be, but man conformed to all the ideals—man, as it is his duty to be. In insisting on this
conformity, Brand spares neither himself nor anyone else. Life is nothing; the perfect
Adam is everything. Brand, aspiring from height to height of devotion to his ideal,
plunges from depth to depth of inhuman follies.
It is in "Brand" that Ibsen, one of the world's greatest dramatists of all time, definitely
takes the field against idealism and, like another Luther, nails his thesis to the door of
the Temple of Morality.

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48. Epilogue
A great man is one who has not lost the child's heart—Mencius, the great Chinese
philosopher and principal disciple of Confucius-372-379 B.C.
I have come to the end of my labors for the present. I shall write more about Nehru in a
companion volume to this book. If, for any reason, I am not in a position to do so, I
would like to record here my feelings towards him. While he was alive, they were
"more than yesterday, less than tomorrow." With the passage of time and in the
perspective of history, my admiration and affection for him have grown. From 1946 I
have known him in all his moods better than any other person. It is said that no man is
a hero to his valet. But to me he is and will be long as I am alive. No man in all recorded
history was loved so much by so many for so long.
As in the case of Gandhiji, Nehru's finest hour was the partition and post-partition days.
The secular character of the nation he had dreamt of was in dire peril. Alone in
government, undeterred by the ridicule of some of his principal colleagues, Nehru
waged a heroic battle against religious fanaticism and mob hysteria. Even Abraham
Lincoln was at one time prepared to compromise on the question of slavery. But Nehru
stood as firm as a rock for something basic he believed in. He risked his political future
and his life by going against the current. With the sublime support of Oandhiji from
outside, Nehru ultimately triumphed. A lesser person would have crumbled. It was
Nehru's vision, courage, faith and his vast personal prestige which sustained him in
those dark days. Seeing him use his fists against some hysterical refugees looting a
Muslim shop in the Connaught Circus area reminded me of the righteous indignation
of Christ in the temple.
On the Madras beach on 9 October 1952, Nehru made a speech in which he wrote his
own epitaph: "If any people choose to think of me, I would like them to say that this
man, with all his mind and heart loved India and the Indian people, and they were
indulgent to him and gave him of their love most abundantly and extravagantly." The
people of India will think of him as he said, despite the pitiful attempt of some puny
ministers of the Janata Party to denigrate him. These little men will "strut and fret their
hour upon the stage" and then be heard no more. But Nehru, with a heart as large as the
universe and full of compassion, will be remembered as long as India lasts, as the
liberator of his people, the founder of the republic, and the builder of the nation.
One of the quotations which Nehru liked most and knew by heart was from the book
How the Steel was Tempered by the incomparable Ostrovsky:

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Man's dearest possession is life, and since it is given to him to live but once, he
must so live as not to be seared with the shame of a cowardly and trivial past, so
live as not to be tortured for years without purpose that dying he can say: 'All
my life and my strength were given to the first cause in the world—the liberation
of mankind'.
I have a hunch that this quotation came to his mind in the morning of his day of death
as a pleasant source of comfort. That is perhaps why he looked so serene, as the
Buddha, after his death.
Truly, it can be said of this great and good man that "his life was a great epic written by
the hand of Fate."

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49. Postscript
"WATER OF LIFE"
Prime Minister Morarji Desai has recently let loose the astounding disclosure that
during the past five or six years he has been indulging in the nauseating practice of
drinking a glass of his own urine every morning. He asserted "it is very very good and
it is free."
Medical men laugh at Morarji's statement that in America doctors are using extracts
from urine to treat certain heart conditions and are charging thousands of dollars.
Long—years ago medical scientists in the West used to extract a chemical substance
from the urine of mares by a process of intensive refining. The urine of mares is rich in
this chemical which could be put to some medicinal use. The practice was given up long
ago as the chemical began to be produced synthetically.
Morarji has gone further and said, "Even in the Bible it says to drink from your own
cistern. What is your own cistern? It is your own urine." Morarji's knowledge of the
Bible seems to be as profound a that of pharmacopoeia! Throughout the history of the
Hebrews, Whether in their ancient homeland, or in their captivity in Babylon and
Egypt, or during the forty years of wandering through the Sinai desert, or even in
present-day Israel, water was and continues to be a great problem. Israel has been
spending enormous amounts to convert seawater to potable water by an expensive
process as is also now being done by some oil-rich Arab countries. To the Hebrews
water became so much of an obsession as weather is to Englishmen. Both are
understandable. The wandering Hebrews in the desert areas and elsewhere used to
store water in cisterns (pitchers) as a precious commodity. "Drink from your own
cistern" is almost a commandment to the Hebrews not to steal water from others.
When Maulana Abul Kalam Azad, a taller man than Morarji, left Bonn, after his visit to
the Federal Republic of Germany, he turned to Ambassador A.C.N. Nembiar and said,
"Red wine very very good." And, of course, it was not free but expensive. Normal people
will prefer to be in the Maulana's company.
A Prime Minister has no right to make himself ridiculous and loathsome.
M. R. MASANI'S BOOK "BLISS WAS IT IN THAT DAWN"
Minoo Masani has stated that on the eve of the transfer of power, Gandhiji thought of
Jayaprakash Narayan as the Congress President as a check on Nehru and Patel who
were entering the government. I have never heard of this. I doubt if in 1947 Jayaprakash
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Narayan's position in the Congress was such as to enable him to stand up to the
formidable combination of Nehru and Patel or to either of them. Masani has further
asserted that Nehru did not respond to Gandhiji's proposal, that Nehru's suggestion
was Acharya Narendra Deva whose name Sardar Patel vetoed, and that finally Babu
Rajendra Prasad was nominated. The fact is that after 1941 Rajendra Prasad was never
the Congress President. Nehru was succeeded as Congress President by Acharya
Kripalani who was subsequently replaced by Pattabhi Sitaramayya.
I do not know where Masani got the story about the British Labour Government's
opposition to Krishna Menon's appointment as India's High Commissioner to Britain.
He says, "Sir Stafford Cripps sent a letter trying to explain to Nehru why this was a bad
idea and saying that, as far as the Labour Party was concerned, Menon was a
Communist who was unacceptable as High Commissioner." This is news to me.
However, there was a private letter from Stafford Cripps, written in his own hand in his
usual red ink, towards the end of the first half of 1947 advising Nehru to get Krishna
Menon "out of the hole in a wall on the Strand," where the India League was located,
and to put him to some effective work for the new government.
During the major part of the second world war, Krishna Menon was high in the favors
of British Government leaders — both Labour and Conservative. They were impressed
by a letter Krishna Menon wrote to Nehru advocating unconditional support to the
British Government in India without seeking representation in it.
Nehru, however, ticked off Krishna Menon and told him that he was completely out of
touch with political realities in India and that he should not talk to anyone in Britain
along the lines he had advocated. These communications, which were copied by the
Secret Service, have been published in the book A Viceroy at Bay written by Lord
Linlithgow's son. The Labour Government was also impressed by the assistance
Krishna Menon rendered to Lord Mountbatten in India in his negotiations with the
Congress leaders, particularly Nehru. In the chapters on Krishna Menon in my book I
have referred to the circumstances leading to Krishna Menon's appointment as India's
High Commissioner to the United Kingdom.
POLITICAL PROPRIETIES
Sometime after the defeat of the Conservative Party at the general elections in Britain
soon after the surrender of Nazi Germany in the second world war, Winston Churchill
visited the United States where he made the "Iron Curtain" speech at Fulton. On his
way back home he was asked by preismen in New York what he thought of the Labour
government and its policies in Britain. His reply was at once dignified and eminently
appropriate. He firmly told his (questioners that, as Leader of the Opposition, he had
ample forums in his own country to make his views known about internal matters. He
refused to say anything more.
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Recently Foreign Minister Atal Behari Vajpayee bemoaned the fact that Indira had been
indulging in the unbecoming habit of complaining to foreign newsmen thereby
lowering the image of India abroad. What he stated is true. But Vajpayee himself had
been speaking to foreign correspondents in New York in a manner unbecoming of the
Foreign Minister of India. He had no business to tell foreign correspondents that Indira
ought to have been tried by a special tribunal. On a matter like this, he should have
opened his mouth only in India. Several ministers of the Janata Party in Tecent times
have made extraordinarily untenable statements abroad which have been patently
partisan and covered themselves with scorn. When ministers, opposition leaders and
indeed any Indians of any standing go abroad in normal times, they should conduct
themselves as representatives of a great country and not as representatives of a party, a
faction, or a caucus.

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Appendix 1
Will and Testament of Jawaharlal Nehru
1.
I, Jawaharlal Nehru, of Anand Bhawan, Allahabad, am desirous of making my
Will and indicating in it how I wish my property and assets to be disposed of after my
death. The circumstances of my life have been and are so uncertain that I do not know if
there will be anything at all to dispose of it at the time of my death. The assets which I
inherited from my father, and for which he had taken steps with loving foresight and
care to protect for me, have been largely spent by me. The capital at my disposal has
progressively diminished, in spite of my income from royalties, on books and other
writings, which have been considerable. I have not had much of a property sense and
the idea of adding to my possessions has almost seemed to me an addition to the
burdens I had to carry. The kind of journey through life I had undertaken long ago.
required as few encumbrances as possible. Also, believing in my capacity to add to my
income if I chose to do so, I was not interested in making financial provision for the
future. For this reason also I did not at any time insure my life.
2.
Because of this and other reasons, it is exceedingly difficult for me to make any
detailed provision for the future. I did not think it even necessary to make any kind of a
Will as I doubted that I would have anything to dispose of in this way. In the normal
course, I thought, that my daughter Indira Priyadarshini Gandhi, would inherit such
property or assets that I might leave, as she was my natural and obvious heir.
3.
When I was in Ahmednagar Fort prison and had leisure to think about the
future, it struck me that it would be desirable to make some kind of a Will. The news of
the sudden death of my brother-in-law, Ranjit Sitaram Pandit came as a great shock to
me and induced me to think again of making a Will. I could not take any formal steps in
prison though in December 1943, while still in Ahmednagar, I made a draft of a Will
and Testament.
4.
I was released from prison in the summer of 1945 and since then have had little
leisure to think of personal matters. So, the draft has remained with me for over ten
years now. These ten years have seen many changes in my life and the old draft is out
of date. As a matter of fact, such assets as I possessed even ten years ago have largely
vanished during this period. Since I became Prime Minister, I have been unable to add
to my income by any fresh writing and I have had to draw repeatedly on what capital I
possessed because my salary as a Prime Minister was not adequate for my needs,
limited as they were. Nevertheless, I consider it necessary to make this Will now and so
dispose of a matter which has been at the back of my mind for a number of years.

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5.
My daughter and only child, Indira Priyadarshini, married to Feroze Gandhi, is
my sole heir, and I bequeath to her all my property, assets and belongings, subject to
such provision as may be hereinafter provided for.
6.
My property at present consists of my house, Anand Bhawan, in Allahabad, with
the land and buildings attached to it, and the furniture, books and other appurtenants
thereto. I have also books, papers and personal belongings at present in the Prime
Minister's house, New Delhi. I own a few securities, investments and shares and some
cash in current and fixed deposits accounts in banks, though most of these securities
and investments have already been transferred in favor of my daughter or have been
otherwise disposed of. I have an uncertain and varying income also from royalties on
the old books I have written. All these assets, that is, the house, Anand Bhawan, with all
that appertains to it, and all my securities, investments and shares, cash in current or
fixed deposit accounts, wherever they might be, and income from royalties on books,
and any other property or assets belonging to me not herein mentioned, will be
inherited by, and will belong after my death to, my daughter, Indira Priyadarshini, and
she shall have full authority over them and can deal with them in any manner she
chooses.
7.
In the event of my daughter, Indira Priyadarshini, predeceasing me, her two
sons, my grandsons, Rajivratna Nehru Gandhi and Sanjay Nehru Gandhi, will be my
heirs and all my property and assets will be inherited by them absolutely in equal
shares, which they may hold jointly or otherwise, as they choose.
8.
In the course of a life which has had its share of trial and difficulty, the love and
tender care for me of both my sisters, Vijaya Lakshmi Pandit and Krishna Hutheesing,
have been of the greatest solace to me. I can give nothing to balance this except my own
love and affection which they have in full measure.
9.
Any of my father's or mother's personalia, still in my possession or in Anand
Bhawan, will be given to my sisters for they will have a prior right to these than anyone
else can have. They can share or divide these articles among themselves, as they choose.
10.
I have, by the above mentioned clauses, bequeathed Anand Bhawan, and such
other property as I might possess, absolutely to my daughter and her children, as the
case may be and she or they will have full proprietary rights over it, including rights of
alienation and disposition of every kind. This house, Anand Bhawan, has become for us
and others a symbol of much that we value in life. It is far more than a structure of brick
and concrete, more than a private possession. It is connected intimately with our
national struggle for freedom, and within its walls great events have happened and
great decisions have been reached. It is my wish, and I am sure it is my daughter's wish
also, that whoever lives in Anand Bhawan must always remember this and must not do
anything contrary to that tradition. This wish of mine, as well as other wishes to which I
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refer in subsequent clauses, are not intended to be in any way a restriction on the
proprietary rights conferred upon my daughter.
11.
I should like my daughter, her husband Feroze Gandhi and their children to
make Anand Bhawan their home, and, if owing to any reasons, they do not find it
possible to do so, to visit Anand Bhawan frequently.
12.
Our house, Anand Bhawan, in Allahabad, should always be open to my sisters,
their children, as well as my brother-in-law, Raja Hutheesing, and they should be made
to feel that it continues to be their home where they are ever welcome. They can stay
there whenever they like and for as long as they like. I should like them to pay periodic
visits to the house and to keep fresh and strong the bonds that tie them to their old
home.
13.
Our house, Anand Bhawan, has drawn many people to it from all parts Of the
country during past years, when my father was alive and subsequently. More
especially, poor folk, peasants, and others, from the surrounding districts and from
more distant parts of India, have come there for advice and help or solace, in their
lifelong suffering. I hope the doors of Anand Bhawan will ever be open to these
countrymen of ours and every courtesy will be shown to them. It is a matter of deep
regret to me that because of my duties and responsibilities as Prime Minister, I have
been unable to visit our home, except rarely.
14.
I should not like the house to be rented out to strangers. If my daughter or her
children do not find it convenient to maintain Anand Bhawan as a family residence,
they should use it or dedicate it for a public purpose. This may be in connection with
the Kamala Nehru Memorial Hospital or the proposed Children's Home that is likely to
be put, up nearby or any like purpose.
15.
I have collected a considerable number of papers and letters of national and
historical interest. Many of these connected with various phases of our national struggle
for freedom were unfortunately destroyed or mislaid during the long years when we
were in prison. Still some remain. There are other papers and documents as well as
letters relating to the subsequent period after I took office, which have also considerable
historical value. All such important papers and documents and letters should be offered
to the National Library or the National Archives.
16.
I have from time to time given various articles, which had been presented to me,
to public museums. I shall continue to do so. In case any remain, which are worthy of
public display, these should be presented to the National Museum. Some of them may
be kept in the Prime Minister's house which itself is a public building.

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17.
I have received so much love and affection from the Indian people that nothing
that I can do can repay even a small fraction of it, and indeed there can be no repayment
of so precious a thing as affection. Many have been admired, some have been revered,
but the affection of all classes of the Indian people has come to me in such abundant
measure that I have been overwhelmed by it. I can only express the hope that in the
remaining years I may live, I shall not be unworthy of my people and their affection.
18.
To my innumerable comrades and colleagues, I owe an even deeper debt of
gratitude. We have been joint partners in great undertakings and have shared the
triumphs and sorrows which inevitably accompany them.
19.
Many of those who served my father or me faithfully and with affection have
passed away. A few remain. They have been parts of our household and I should like
them to be considered as such so long as they are alive. I cannot mention them all here,
but I should particularly like to mention Shiv Dutt Upadhyaya, M. O. Mathai and
Harilal.
20.
I wish to declare with all earnestness that I do not want any religious ceremonies
performed for me after my death. I do not believe in any such ceremonies and to submit
to them, even as a matter of form, would be hypocrisy and an attempt to delude
ourselves and others.
21.
When I die, I should like my body to be cremated. If I die in a foreign country,
my body should be cremated there and my ashes sent to Allahabad. A small handful of
these ashes should be thrown in the Ganga and the major portion of them disposed of
in the manner indicated below. No part of these ashes should be retained or preserved.
22.
My desire to have a handful of my ashes thrown in the Ganga at Allahabad has
no religious significance, so far as I am concerned. I have no religious sentiment in the
matter. I have been attached to the Ganga and the Jumna rivers in Allahabad ever since
my childhood and, as I have grown older, this attachment has also grown. I have
watched their varying moods as the seasons changed, and have often thought of the
history and myth and tradition and song and story that have become attached to them
through the long ages and become part of their flowing waters. The Ganga, especially,
is the river of India, beloved of her people, round which are intertwined her racial
memories, her hopes and fears, her songs of triumph, her victories and her defeats. She
has been a symbol of India's age-long culture and civilization, ever-changing, everflowing, and yet ever the same Ganga. She reminds me of the snow-covered peaks and
the deep valleys of the Himalayas, which I have loved so much, and of the rich and vast
plains below, where my life and work have been cast. Smiling and dancing in the
morning sunlight, and dark and gloomy and full of mystery as the evening shadows
fall; a narrow, slow and graceful stream in winter, and a vast roaring thing during the
monsoon, broad-bosomed almost as the sea, and with something of the sea's power to
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destroy, the Ganga has been to me a symbol and a memory of the past of India, running
into the present, and flowing on to the great ocean of the future. And though I have
discarded much of past tradition and custom, and am anxious that India should rid
herself of all shackles that bind and constrain her and divide her people, and suppress
vast numbers of them, and prevent the free development of the body and the spirit;
though I seek all this, yet I do not wish to cut myself off from that past completely. I am
proud of that great inheritance that has been, and is, ours, and I am conscious that I too,
like all of us, am a link in that unbroken chain which goes back to the dawn of history in
the immemorial past of India. That chain I would not break, for I treasure it and seek
inspiration from it. And, as witness of this desire of mine and as my last homage to.
India's cultural inheritance, I am making this request that a handful of my ashes be
thrown into the Ganga at Allahabad to be carried to the great ocean that washes India's
shores.
23.
The major portion of my ashes should, however, be disposed of otherwise. I
want these to be carried high up into the air in an aeroplane and scattered from that
height over the fields where the peasants of India toil, so that they might mingle with
the dust and soil of India and become an indistinguishable part of India.
I have written this Will and Testament in New Delhi on twenty-first day of June in the
year Nineteen Hundred and Fifty-four.
Sd—JAWAHARLAL NEHRU
21 June 1954
Signed before me by the testator and I am signing and attesting. the Will in his
presence.
21 June 1954 Sd—KAILAS NATH KATJU
Signed before me by the testator and I am signing and attesting the Will in his presence.
21 June 1954 Sd—N.R. PILLAI
I have signed two identical copies of this Will—One is a duplicate of the other.
Sd—J. NEHRU 21 June 1954

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Appendix II
Note by Jawaharlal Nehru distributed only to Gandhiji and Sardar Patel
The recent correspondence between Sardar Patel and me has raised important issues of
vital consequence; and yet the origin of that correspondence related to a relatively
minor matter.
2.
It is true that there are only temperamental differences between Sardar and me
but also a difference in approach in regard to economic and communal matters. These
differences have persisted for a large number of years, ever since we worked together in
the Congress. Nevertheless, in spite of these differences, there was obviously a very
great deal in common in addition to mutual respect and affection and, broadly
speaking, the same national political aim of freedom. Because of this we functioned
together during all these years and did our utmost to adapt ourselves to each other. If
the Congress came to a decision, we accepted it, though there might have been a
difference in implementing it.
3.
Our political aim having been more or less achieved, the other questions on
which we have differed to some extent, come more and more to the forefront. At the
same time crises face the country which make it incumbent on all of us not to stress the
differences but rather to emphasize the points of agreement and to cooperate in the face
of these crises. So far as the economic and communal matters are concerned, we are
bound down by Congress policy and decisions, and both of us, as well as other
Congressmen, must necessarily work in accordance with them. On the communal issue
the Congress standpoint has been clarified recently. On the economic issue the broad
lines of policy have been laid down and, no doubt, further details will soon follow. The
Cabinet will have to consider these matters soon. We have delayed too long already in
laying down an economic policy and this has led to differing interpretations and
statements by Ministers.
4.
We may therefore, for the moment, leave out of consideration these important
matters and come down to the immediate issue. This issue essentially relates to the
functions of the Prime Minister. It is something much more than a personal issue and it
should be considered, therefore, as a question of principle, whoever the Prime Minister
might be.
5.
As I conceive it, the Prime Minister's role is, and should be, an important role. He
is not only a figurehead but a person who should be more responsible than anyone else
for the general trend of policy and for the coordination of the work of various
government departments. The final authority necessarily is the Cabinet itself. But in the
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type of democratic set-up we have adopted, the Prime Minister is supposed to play an
outstanding role. This, I think, is important (again quite apart from personal factors) as
otherwise there will be no cohesion in the Cabinet and the government and disruptive
tendencies will be at work.
6.
Speaking for myself, I have at present two functions to perform in government.
As Minister for External Affairs, I function like any other Minister and my Ministry is
like any other Ministry. As Prime Minister, however, I have a special function to
perform which covers all the Ministries and Departments and indeed every aspect of
governmental authority. This function cannot be easily defined and the proper
discharge of it depends a great deal on the spirit of cooperation animating all the parties
concerned. Inevitably in discharging this function of Prime Minister, I have to deal with
every Ministry not as head of one particular Ministry, but as a coordinator and a kind of
supervisor. Naturally this can only be done effectively with tact and goodwill and
without in any way diminishing the prestige of other Ministers. Other Ministers must
not normally be interfered with and should have freedom to carry out their work
without unnecessary interference.
7.
If this position is recognized, then no present difficulty arises, and if at any time a
difficulty does arise, it can be resolved by personal contact and discussion between the
parties concerned. Because of this I have endeavored in almost every matter of
importance to confer with Sardar Patel.
8.
The immediate issue arose out of my sending Iengar [H.V.R. Iengar was
Principal Private Secretary to the Prime Minister] to Ajmer. I think that my sending him
was not only completely within my competence but also it was an eminently desirable
thing to do in the circumstances and that undoubtedly it did some good. This opinion
of mine has been strengthened by my visit to Ajmer. Iengar had nothing to do with
holding any kind of an inquiry or sitting in judgment in any way on the officials in
Ajmer. He was sent as the eyes and ears of the PM and to convey the PM's regret for his
having had to cancel his visit to Ajmer previously. In Ajmer and elsewhere we have to
deal with psychological problems and mental states. The approach to the people direct
is always important when dealing with such problems. The importance of Ajmer had
induced me to pay a visit there even at inconvenience. I could not go then because of a
death in the family. My not going was variously interpreted in Ajmer and gave rise to
all manner of suspicions and rumors. Iengar's going helped to lessen these suspicions
somewhat among the people by making them realize that the government was greatly
interested in their peace and welfare.
My subsequent visit, of course, did much more good. It did not, as it was not meant to,
affect the position of the Chief Commissioner whom indeed I praised publicly for his
ability and impartiality. But apart from these facts the question remains: is the PM
entitled to take such a step and who is to be judge of this? If the PM cannot even take
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this step and is not himself to be the judge of what is proper and what is not in such
matters, then he cannot function properly or fulfill his functions. Indeed he does not
function at all as the PM should. The mere fact that he is PM presumably leads to the
conclusion that he is capable of judging aright and carrying out the policy laid down. If
he is not capable of this, then he should cease to be PM. Indeed this means abdication of
his functions and he cannot in future function with any effectiveness. There will br no
proper coordination of governmental authority and, in such circumstances, the
administrative machinery weakens and there are rival pulls.
9.
If this view is correct, then the PM should have full freedom to act when and
how he chooses, though of course such action must not be an undue interference with
local authorities who are immediately responsible. The PM obviously is as much
interested as anyone else in having the loyalty and cooperation of the services.
10.
In the event of the PM not functioning in this way, then he can hardly carry on as
a mere figurehead and much harm may be done to the services as well as to the public
at large by the enunciation of contradictory policies by Ministers.
11.
This is the background. But whatever the theory may be, practical difficulties
continually arise. Normally speaking, the best way out of these difficulties would be for
some rearrangement in the Cabinet to be made which would cast the responsibility on
one person more than anyone else. In the present set-up this means that either I should
go out or that Sardar Patel should go out. For my part I would greatly prefer my going
out. Of course this going out of either of us need not and should not mean any kind of
subsequent opposition. Whether we are in or out of government, we remain, I hope, not
only loyal Congressmen but loyal colleagues, and we will still try to pull together in our
respective spheres of activity.
12.
Nevertheless there can be little doubt that if either of us goes out at the present
juncture, it would create a sensation both nationally and internationally, and the
consequences may not be good. At any time this position would have to be faced; but at
the present juncture, with the Kashmir issue and the great problem of rehabilitation
facing us, not to mention the States and the growth of communal organizations in India,
any such parting of ways may well have very serious consequences affecting the good
of India. None of us wants to do anything which may be at all injurious to the national
good, even though our views of the national good may differ somewhat. After having
given very serious thought to this matter during the last fortnight I have come to the
conclusion that as far as possible we must avoid, at this particular juncture, any parting
of ways in government. We are too much in a transitional stage and a serious shake-up
of government may well lead to an upsetting of the applecart. I think that we should
carry on for some months more till the Kashmir issue is more clarified and other
problems have also been tackled to some extent. The way to do this must be the fullest

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consultation about every important matter. At the same time I do feel that the Prime
Minister's function, as defined above, must be appreciated.
13.
If, however, this is not considered possible, then the only alternative left is for
either me or Sardar Patel to leave the Cabinet. As I have said above, I consider this an
undesirable alternative in the present context, and I have come to this conclusion as
objectively as possible. If someone has to leave, I repeat, I would prefer to leave.
14.
Latterly there has been a growing tendency towards a lack of cohesion in the
various Ministries and Departments of government. This has resulted in members of
the services also being affected. This is unfortunate and, in any event, to be countered,
for if the Cabinet and government do not work jointly, all work must necessarily suffer
and a psychology produced in the country which comes in the way of cooperative
working.
15.
Probably before very long we shall have to consider a refashioning of the
governmental set-up in the sense of introducing Deputy Ministers, Parliamentary
Secretaries, and the like. It may be desirable to put certain Departments in charge of
Deputy Ministers, each group of such Deputy Ministers being under the supervision of
a Minister. This would make the real Cabinet a somewhat smaller body. However, this
can be seen to later. At the present moment the allocation of portfolios is not a very
logical one and some are very heavy indeed.
16.
The States Ministry is a new Ministry which has to deal with vital questions. If I
may say so, it has dealt with these questions thus far with remarkable success and
surmounted the many difficulties that are continually arising. I feel, however, that
many decisions have been taken involving matters of principle without any reference to
the Cabinet. For my part I agree with those decisions; but it seems to me a wrong
procedure for these decisions to be taken without reference to the Cabinet or to the PM.
Being a new Ministry, it functions naturally outside normal procedure. To some extent
this is inevitable and quick decisions have to be taken. But an attempt should be made
to bring this functioning within the terms of our ordinary procedure.
17.
Before the Constituent Assembly meets, or some time during its next session, we
have to come to some decision regarding our general economic policy. The problem of
rehabilitation may well be tied up with this policy.
New Delhi
6 January 1948

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Appendix III
Text of letter from Shri M. O. Mathai to the Prime Minister
New Delhi
January 12, 1959
My dear Panditji,
I have already placed before you clippings from certain Communist newspapers and
from two other journals which normally specialize in sensationalism. In these press
write-ups, which are couched in not very elegant language, there are references which
are not very flattering to me. What has appeared in the Communist press is from a
"News Release" by the so-called IPA (Indian Press Agency) which is a Communist
organ.
You do not personally need explanations in regard to the allegations because you have
been aware of the facts. Nevertheless, I consider it appropriate to state them in this
letter.
Insofar as the Trust is concerned, Rajkumari Amrit Kaur has written to you. The Trust is
named after my mother who died a few years ago. Rajkumari Amrit Kaur as well as my
other personal friends had heard of my mother from me; and when Rajkumari
suggested that the Trust might be named after my mother, I did not object. I shall
confine myself to other specific personal attacks on me. I shall ignore flippant, silly and
childish remarks as well as unworthy insinuations with the contempt they deserve.
When I joined you in Allahabad in January 1946, at a time when it was not monetarily
profitable to do so, you were aware of my background. You were also generally aware
of such personal assets as I possessed then—which enabled me to work in an honorary
capacity indefinitely. You will also remember that I refused to work in Government
when you joined the Interim Government on 2nd September 1946. When independence
came on 15th August 1947 you asked me to work with you in Government also. I was
not at all enthusiastic about it because I felt that temperamentally I was not suited for
governmental work. Also, being a bachelor, I had enough to live on and I was not in
need of paid employment. Since you thought that my joining Government would
facilitate your work, I agreed to do so without payment. But you did not, as a matter of
principle, approve of my not taking a salary.

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So, ever since then I have been a sort of ad hoc temporary Government employee much
to my distaste. You will also remember that during these past several years I have
requested you at least a dozen times to release me from governmental work. I have all
along been staying in your house and my personal expenses have been extremely
limited as I do not have to maintain a household establishment.
I have always held the view and continue to hold the view that what I do with my
money is my own business so long as I pay the taxes imposed by Parliament. I am not
answerable to anyone for it.
Yes, of course, I bought an orchard with a fully furnished house in Kulu Valley early in
1952 from two Scottish sisters at a price of Rs. 120,000. Registration and other incidental
expenses amounted to a little over Rs. 5,000. All this money came from personal assets I
possessed before I joined you.
Before I purchased the property in Kulu I informed you of my intention to do so both
orally and in writing. I still have in my possession the detailed note I submitted to you
than. After some time I found that it was difficult to manage the property efficiently
unless I myself stayed on the spot—which was not possible. So I sold the property. It
was bought by Morton and Company of Calcutta, a firm engaged in the manufacture of
fruit preservatives and the like. The price I received was Rs. 125,000. All that has
accrued to me in this transaction was a loss of a few hundred rupees! I should like to
publicly declare that when I am a free man it is still my intention to acquire a suitable
place in the Himalayan region which has irresistible attraction for me.
The last allegation is that I have an Insurance Annuity Policy. If the Communist friends
had taken the trouble of asking me I would have gladly told them that I have more than
one—I have two in fact! The annual premia on these two Policies amount to Rs.
18,290.62. I had informed you some time ago in writing about these Insurance Policies.
For the benefit of our Communist friends I might state that my personal net income
from my salary and investments, after payment of income tax etc., is approximately Rs.
27,500 per year. These figures will speak for themselves. In fact I happen to have some
small surplus savings every year. All these savings are invariably invested in
Government in some form or other.
It is stated in the IPA News Release that my friendship with American circles is
sometimes becoming far too conspicuous.
This has amused me greatly. You are aware that I am not a social bird and I keep to my
work. Americans, Russians and all others are my friends and none my enemy. I have no
capacity to compete with Communist friends in extraterritorial loyalties. Mine are
rooted deeply to the Indian soil.

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I am inclined to believe that the scurrilous attack on me by Communist friends has a
definite political motive. It seems to be clear that it is an indirect attack on you and the
Government. I fear it is the beginning of an infantile political shift which so frequently
takes place in the Communist Party. I am afraid some of our Congressmen fall victims
to this nefarious game.
You have more than one person to defend periodically and sometimes perpetually. I
have no claim or right to join that distinguished company. I wish to be free to defend
myself. In my present position it is not possible for me to do so. Therefore I beg of you
to allow me to terminate my association with Government. After all I joined you long
before you had anything to do with Government; and perhaps I can still be of some
little use to you outside of Government. In doing so I lose nothing but my chains; and
this is a phrase the Communist friends will readily understand.
Iseek permission to release this letter of mine to the press together with Rajkumari
Amrit Kaur's letter to you. More than direct personal attacks it is the ugly rumors that I
am concerned about. Let all our people know about it even though it is somewhat
embarrassing to me to make public intimate personal details. A person like me, who has
had the great honor and privilege of working closely with you during the most
momentous period in the history of our Nation, should be prepared to stand in the Sun
for public gaze; and I gladly and willingly submit myself to it. Thereafter I shall
consider the question of taking such steps as are open to me against the newspapers
which have published defamatory statements about me.
I very much wanted to deal with this matter earlier; but I considered it proper to await
your return to Delhi from Nagpur before taking any step.
Fortunately I still possess some strength to withstand attacks. But the ever-mounting
tendency in our Parliament and our Press to attack public servants without caring to
verify facts is having a devastatingly demoralizing effect. Under such deplorable
conditions very few self-respecting persons will care to enter Government service or
public life.
I do hope you will comply with my request. I am deeply grateful to you for all the
indulgence you have shown me for thirteen years.
My love to you as always wherever I happen to be.
Ever yours affectionately,
SD - M. O. MATHAI

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Text of letter from Rajkumari Amrit Kaur addressed to the Prime Minister
2 Willingdon Crescent,
New Delhi,
11th January, 1959
My dear Jawaharlal,
I have seen, with a measure of surprise, some newspaper items about the Chechamma
Memorial Trust of which I am the Chairman. I should like to give you some
background information about this Trust, which is a public charitable Trust registered
under the Societies Registration Act.
A few years ago some personal friends, whom I have known for a large number of
years, placed at my disposal certain sums of money (a little over Rs. 6 lakhs) to be spent
at my discretion for specific humanitarian objects. I put these funds in a separate bank
account to begin with. Later I decided to create a Trust as I did not wish to continue
holding the moneys. I, therefore, invited Shri M. O. Mathai and Miss Padmaja Naidu to
join as Trustees. This was before Miss Padmaja Naidu became the Governor of West
Bengal.
Before Shri M. O. Mathai consented to be a Trustee, I know he consulted the
Comptroller and Auditor-General about the propriety of his being a Trustee. He was
assured that there was no impropriety in any Government functionary being a Trustee
of a public charitable trust and that no Government permission was necessary for this.
Nevertheless he took the additional precaution of obtaining written formal permission
from the Ministry of Home Affairs to become a Trustee.
I myself have for some time been a Trustee of the Guru Nanak Engineering College and
of the Gandhi Smarak Nidhi from its inception. Group Captain Leonard Cheshire has a
Trust in India for his "homes" and I am a Trustee of that also.
I take full responsibility for naming the Trust Chechamma stood in her life for what
countless Indian women have stood for throughout the ages—devoted mothers of the
race. I felt it would be a good thing to have an unknown name as a symbol of
womanhood of which I, as an, Indian woman, am proud. Furthermore, it is the objects
of the Trust that count and the moneys from the Trust have to be spent for such objects
as are declared as charitable.
I give below the objects of the Trust:

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1)
Grant of scholarships to students who, in the opinion of the trustees, deserve
such scholarships for general and specialized education, research and educational
travels.
2)
Grant of financial assistance to hospitals and other public institutions devoted to
medical relief.
3)
Grant of financial assistance to persons wholly devoted to voluntary social
service.
4)
Grant of financial assistance to institutions established for the purpose of
advancing the welfare of women and children.
5)
Grant of financial assistance for writing and publishing books of historical and
educational value.
The Press write-ups give wildly exaggerated accounts of the corpus of the Trust. The
total amount in the Trust, including the money spent on acquiring the house property,
is only Rs. 1,073,683.31. Again it is stated that "Shri Shanti Prasad Jain and several
Bombay businessmen" are among the donors. This is totally incorrect. I strongly
repudiate the insinuation that Shri Haridas Mundhra may have contributed to the
Trust. I should like to make it perfectly clear that I have accepted no contribution for the
Trust from any person whom I have not known personally for the last 25 years.
We have so far spent Rs. 25,000. This was given to an educational institution in
Northern India devoted to the training of village women for constructive work. This
was done on my initiative.
The donation of the house property to the Trust was made through me by a friend who
has been known to me for a large number of years. My agreement with the donor was
that the Trust would reimburse the donor of the expenditure in connection with the
transfer of the house property. This expenditure has amounted to approximately Rs.
75,000.
It has, however, been pointed out to me that since the rent of the rather dilapidated
house property is only Rs. 189.06 per month, the acquisition of the house property has
not been a sound proposition from the investment point of view because the bank
interest on Rs. 75,000 would be much more than the rent. I also found it difficult to get
the present tenant, who is a hair-dresser, to vacate the house in the normal way. For
these reasons, the Trust will be obliged to sell the house property at the best possible
terms. It is, therefore, my intention to dispose of it.

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The responsibility for executing the Gift Deed was entirely the donor's. The Trust is in
no way responsible for it. However, I should like to point out that, according to Wealth
Tax Act, a house property is to be valued at twenty times its annual rental. On this basis
the value of the house property donated to the Trust comes to only Rs. 45,374.40.
Presumably the donor fixed the value of the House Property in the Gift Deed at Rs
50,000 on the basis mentioned above. Anyhow, the Trust cannot be held in any way
responsible for it.
As Chairman of the Trust I take the fullest responsibility for the administration of its
funds. No moneys of the Trust can be spent without my personal approval. Shri M. O.
Mathai is not the Managing Trustee as has been stated in the press write-ups.
The accounts of the Trust are audited by a firm of Chartered Accountants on the
approved list of Government.
I have been noticing, with sorrow, a gradual deterioration in our public life. People are
attacked, charges are levelled and insinuations made without making the least effort to
verify the facts.
In so far as certain personal attacks on Shri M. O. Mathai are concerned, he will no
doubt deal with them.
You are free to make such use of this letter as you deem proper.
Yours ever,
****

Sd—AMRIT KAUR

Prime Minister's Secretariat New Delhi,
January 15, 1959.

THE ABOVE IS NOT TO BE PUBLISHED OR BROADCAST
BEFORE SATURDAY, JANUARY 17, 1959.
V RB/NLP/RA K
1000/15.1.59/15.15/228. PRM

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Appendix IV
Letter No. 1046-PMH I59 dated May 6, 1959, from the Prime Minister to the
Chairman, Rajya Sabha
Dear Mr. Chairman
As you are aware, various allegations were made against Shri M. O. Mathai in
Parliament. On the 11th February I requested the Cabinet Secretary to examine these
allegations and to find out if Shri M. O. Mathai had made any improper use of his
official position during the period of his employment with Government. This enquiry
was in the nature of an investigation for my own guidance. I stated however in
Parliament that when I received the report of the Cabinet Secretary, I would send it to
the Finance Minister and separately to the Comptroller and Auditor-General so that
they may judge the financial propriety of any action that had been taken.
The Cabinet Secretary submitted his report to me on May 2, 1959. I sent copies of it to
the Finance Minister and the Comptroller and Auditor-General. I attach their
comments.
It is not usual for departmental enquiries to be given publicity. The present report was
not even a departmental enquiry; it was in the nature of an investigation to establish the
facts.
I had previously stated that I would either submit the Cabinet Secretary's report or my
own report to you. I am therefore writing to you now on this subject and enclosing a
note prepared by me based on the Cabinet Secretary's report. In this note, the Cabinet
Secretary's comments and findings have been briefly given.
As a result of considering the report of the Cabinet Secretary as well as the comments of
the Finance Minister and the Comptroller and Auditor-General, I am of opinion that
during the period of his employment with Government, Shri Mathai has made no
improper use of his official position.
Yours Sincerely,
Sd—JAWAHARLAL NEHRU,
Note by the Prime Minister in regard to certain allegations made against Shri M.O.
Mathai
The Cabinet Secretary was asked by me on the 11th February 1959 to examine the
allegations against Shri M. O. Mathai of improper use of his official position during the
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period of his employment with the Government and submit a report. Some days later,
on the 17th February, the Home Minister announced in the Rajya Sabha that anyone
who had material information on this subject could send it to the Cabinet Secretary. No
such information was sent to him, except a letter from a person in prison who made
some general charges without supporting evidence, and an anonymous
communication.
2.
The Cabinet Secretary received various statements from Shri Mathai in regard to
his finances. He also saw income tax assessment figures and wealth tax returns. The
pass-book from one bank and a statement of account from another bank were also
consulted by the Cabinet Secretary. He found that these various statements and the
information from the banks tallied.
3.
The charge made against Shri Mathai was of improper use of his official position
during the period of his employment with Government. Before this employment began,
he had a considerable sum of money with him as a result of his service with the
American Red Cross on the Assam-Burma border as well as by his obtaining some
American surpluses. Shri Mathai came to me in Allatabad about a year before I entered
Government. I had informed him then that I could not afford to pay him any suitable
salary. He had told me in reply that he had earned a considerable sum during his
service with the American Red Cross in the Assam-Burma border and that he could
support himself without any difficulty for some years without any salary. So far as I can
remember, he mentioned the sum of Rs two or three lakhs with him them. He served
me therefore without any salary till some time after I had joined Government, when a
salary was fixed for him which began with Rs. 750 a month and later was fixed at Rs.
1,500 a month. He was treated as a special officer and did not have a regular post which
was an integral part of the Prime Minister's Secretariat. His appointment was an ad hoc
and temporary one and he was not treated as a permanent Government servant.
4.
The initial sums that he brought with him plus his salary and the income from
dividends and interest have been found by the Cabinet Secretary to be adequate for the
various purchases or payments that he made subsequently and which are referred to in
the statements and bank accounts. It was out of this that he sent remittances from time
to time to his relatives.
5.
The purchase of a property in the Kulu Valley was made for Rs. 120,000 by a
registered sale deed. He disposed of some of his shares and investments for this
purpose. After some time, finding that he could not manage this Kulu property from
Delhi, he sold it for approximately the same amount as the purchase price. He had
mentioned this transaction to me both before the purchase and at the time of sale, The
Cabinet Secretary finds that there is no evidence of improper use of his official position
in this transaction.

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6.
In regard to the insurance policies that he had taken and the conversion of some
of them into annuities, payment was made partly from the money with him and partly
froth his provident fund which he realized. According to the Cabinet Secretary, there is
no evidence of any improper use of his official position in these transactions.
7.
As regards the Trust called "The Chechchemma Memorial Trust" this was a
public charitable trust formed in August 1956, the original trustees being Rajkumari
Amrit Kaur and Shri M. O. Mathai. The objects of the Trust are grant of financial
assistance for the production of books of historical and educational value, grant of
scholarships to students, grant of financial assistance to persons devoted to voluntary
social service, to hospitals and other public institutions devoted to medical relief and
institutions established for the purpose of advancing the welfare of women and
children. Subsequently a third trustee was appointed, namely, Kumari Padmaja Naidu.
There was no single Managing Trustee. Shri M. O. Mathai has stated and Rajkumari
Amrit Kaur has confirmed that all the donations were collected by Rajkumari. Shri M.
O. Mathai had nothing to do with approaching donors or collecting donations.
8.
At the time of the formation of this Trust, Shri M. O. Mathai mentioned this
matter to the Comptroller and Auditor-General of India and asked him about the
propriety of his becoming a Trustee. He was told in reply that there was no objection to
it. Shri Mathai however wrote formally to the Ministry of Home Affairs on this subject.
The Home Secretary replied that there was no objection to the proposed course. He had
also mentioned this matter to me.
9.
The cash donations received by this Trust amount to Rs. 1,012,000. In addition, a
house at 9 Tees January Marg was given to the Trust on the 3rd January 1958 by M/s
Birla Cotton Spinning and Weaving Mills, Delhi. The Cabinet Secretary had this valued
by the Superintending Surveyor who has reported that the total value of the property,
both house and land, is about Rs 187,000. Shri B. M. Birla has stated that the gift was
made at the request of Rajkumari Amrit Kaur for the purposes of the Trust.
10.
Rajkumari Amrit Kaur stated that all the donations were collected by her on the
understanding that they would be treated as, anonymous donations. She was not
prepared therefore to make public the names of the donors. As a matter of fact, she
showed the names of the donors both to me and the Cabinet Secretary, but on the
express understanding that they would not be made public. In this list there are twenty
donations mentioned beginning from 14th October 1954 to the 17th December, 1958.
More than half the money was collected by Rajkumari Amrit Kaur before the Trust was
actually formed.
11.
Only Rs. 25,000 has been spent out of the corpus of the Trust money. The rest is
intact, except for the payment of Rs. 73,000 to the Land Development Officer, Delhi, in
consideration of permission to transfer the lease-hold of the house in Tees January
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Marg. Further a sum of Rs. 1,798.56 was paid to the Mills on account of stamp duty and
registration charges which had been incurred by the donor. Apart from payments, the
corpus of the Trust money is intact. This is supported by a statement from the, bank.
Rajkumari Amrit Kaur said that she did not wish to spend the money in driblets but
was aiming at collecting enough money so that the trust could function as a foundation
for charitable purposes.
12.
The Cabinet Secretary states that according to the facts placed before him, Shri
Mathai did not abuse his official position in connection with the Trust.
13.
As regards the charge that Shri Mathai had undeclared money in foreign banks,
there appears to be no truth in it. It appears that some money was sent by the Prime
Minister to Shri A.C.N. Nambiar, then Ambassador in Western Germany, for a
particular purpose. Shri A.C.N. Nambiar having fallen ill later thought it desirable to
place the amount in a joint account so as to avoid any difficulties arising later in regard
to its withdrawal in the event of his unexpected death. As the money had been sent to
him through Shri M. O. Mathai, he had his name added and made this account a joint
account. No cheque book was sent to Shri Mathai nor indeed did Shri Mathai deal with
this account in any way. On enquiry it was found that there was a balance of Swiss
Francs 948.50 in this account.
Sd—JAWAHARLAL NEHRU
New Delhi
May 6, 1959
Comments of Shri Morarji Desai, Minister of Finance, on the Cabinet Secretary's
Report
After having gone carefully through the report of the Cabinet Secretary on the
allegations against Shri M. O. Mathai, I had a discussion with the former on the subject
matter of the enquiry and the enquiry held by him and have come to the following
conclusions.
The Kulu Orchards were purchased from some Scottish ladies in a proper manner and
there cannot be any question of an improper dealing in this case. There was nothing
wrong or improper in the sale of this property to a company which dealt in fruit
canning as the sale price was not more than the price paid for the property. Shri Mathai
had informed the Prime Minister before entering into both transactions.
I find nothing irregular in the insurance policies of Shri Mathai. There does not seem to
be anything unaccounted for as regards the premia paid for the various policies. The
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payment made by Shri Mathai in this connection were from his salary income and the
moneys possessed by him before he joined the Prime Minister in the beginning of 1946.
The large policy for which a lump payment of Rs. 48,000 was made was paid for out of
provident fund receipt and sale of savings certificates.
The moneys sent by him to his brothers and sisters during the last 10 years amount to
about Rs. 125,000. These were sent by registered and insured postal parcels which were
sent through the clerks in the office and there was no secrecy about these remittances.
The question which arises from these transactions is how Shri Mathai came into the
possession of all these moneys, that is, whether the possession was legitimate or
whether the moneys were obtained in an illegitimate manner. The total amount of the
following five items comes to Rs. 575,000.
1) Living expenses at the estimated rate of Rs 250 p.m. for 13 years
2) Insurance premia paid
3) Money spent on acquiring existing assets
4) Remittances to brothers and sisters
5) Bank balance on 24/2/1959
Total

Rs. 39,000
Rs. 138,466
Rs. 247,000
Rs. 125,000
Rs. 25,781
Rs. 75,247

Shri Mathai's statement shows that he had Rs. 390,000 out of which Rs. 125,000 were set
apart for his brothers and sisters, before he joined the Prime Minister early in 1946. His
net income from salary and investments up to date amounts to Rs. 231,074. The total of
the two amounts comes to Rs. 621,000. This will show that the original assists plus the
income from salary and investments exceed the disbursements and the bank balance by
Rs. 45,753. The explanation, that this amount would represent personal expenditure
other than living expenses as well as some remittances which would be in addition to
Rs. 125,000 mentioned earlier, appears quite reasonable. The question that would arise
would be whether the statement that Shri Mathai had with him Rs. 390,000 including
Rs. 125,000 earmarked for his brothers and sisters before he joined the Prime Minister is
acceptable. Shri Mathai was serving in the American Red Cross before he joined the
Prime Minister. We have been told that Shri Mathai's work was very much appreciated
by the Red Cross Authorities. It is stated that as a mark of their appreciation they gave
him some part of the surplus stocks which they were disposing of at the conclusion of
the war. Much of this surphis stock was destroyed, part of it was given to their Indian
officials. I had heard of this method of disposal from different sources in 1946. There is,
therefore, no reason to disbelieve Shri Mathai's statement in this matter, especially
when it is remembered that Shri Mathai had told the Prime Minister, at the beginning of
his service with him, that he had in his possession about rupees two to three lakhs. His
income tax and wealth tax returns after 1947 are in order. Shri Mathai has stated that he
has no other properties or moneys and nobody has given any material to show that he
has any other assets. The explanation is, as I have said above, reasonable and there is no
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evidence whatsoever to the contrary. It would not, therefore, be right for anybody to
say without any reasonable evidence that Shri Mathai obtained these assets by
improper means or by abuse of his official position.
He had reported to the Prime Minister his assets before he joined him and also reported
to him the transactions regarding the Kulu Orchards. If he did not report his insurance
policies, he did not do so because he had no idea that he had to do so. Many highly
placed Government officials have not reported their insurance policies as they did not
think that the rules required such report. This has been clarified only recently.
Moreover, Shri Mathai was a temporary Government servant and would have left
Government service with the Prime Minister, that is, he would not be a permanent
servant at any time. He was not in ordinary Government service. In any case, the point
of substance is not reporting, but whether they were proper. I have already commented
that the payments were fully explained.
The only question that remains to be dealt with is that of the Chechamma Trust. Shri
Vishnu Sahay's inquiry has shown that there was nothing irregular in this Trust and
that the moneys obtained were obtained through the efforts of Rajkumari Amrit Kaur.
The correspondence between one of the donors and Rajkumariji supports this
contention. Shri Mathai while writing to the Home Secretary in 1954 to find out if there
was anything wrong in being a Trustee of this Trust had stated explicitly that he would
not be collecting any funds for the Trust. The giving of Shri Mathai's mother's name by
Rajkumariji to the Trust and Shri Mathai's agreeing to it may be called imprudent but
cannot be called an abuse of official position or immoral in any sense.
The Home Minister had stated in the Rajya Sabha that anybody who has any
information and evidence as regards any allegation against Shri Mathai should give it to
Shri Vishnu Sahay. The fact that nobody has come forward with any reliable
information or evidence is significant. In view of this and the facts given above as
elicited in the enquiry by Shri Vishnu Sahay, it is obvious that Shri Mathai cannot be
held guilty of any abuse of official position as alleged or of any illegitimate action.
MORARJI DESAI
New Delhi
6 May 1959
Comments of Comptroller and Auditor-General of India on the Cabinet Secretary's
Report
In his report to the Prime Minister, the Cabinet Secretary has examined the allegations
that Shri M. O. Mathai has made improper use of his official position during his tenure
as Special Assistant to the Prime Minister. After analyzing all available material, the
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Cabinet Secretary has reached the conclusion that there is no evidence of the improper
use of his official position by Shri M. O. Mathai. From a reading of the report, I see no
reasons to disagree with this conclusion.
6.5.1959

Sd—A. K. CHANDA

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Appendix V
Disposal of the Trust Funds
Before her death in February 1964, Rajkumari Amrit Kaur disposed of the assets of the
Trust. Apart from substantial grants to numerous educational, medical, and social
service organizations and institutions, the principal beneficiaries have been:
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)

The All India Institute of Medical Sciences
The Indian Council for Child Welfare
The Indian Red Cross Society
The Hind Kusht Nivaran Sangh
Edwina Mountbatten Memorial Fund
Motilal Nehru Centenary Fund
Tuberculosis Association of India
National YWCA
Lady Irwin College
Sarojini Naidu and Margaret Cousins Fund

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