On a hot June day almost five months ago, investigators of the National Investigation Agency (NIA) launched an operation targeted at stopping terror groups active in the Kashmir Valley from exchanging currency invalidated in last November’s demonetisation drive. The agency’s investigations had revealed an ongoing attempt to do that.
It had interrogated some suspects and informers and found reason to believe that “some of the persons and entities (under the scanner) were sitting over a pile of demonetised currency notes of Rs 500 and Rs 1,000 that they intended to illegally exchange with valid currency as the window provided for conversion was long over”, according to a senior NIA official, who spoke on condition of anonymity. And thus began an undercover operation to draw the demonetised money out in the open. It culminated on November 7 with the NIA announcing recovery of Rs 36.34 crore in demonetised currency notes and the arrest of nine persons in the national Capital.
“In terms of scale, it can be termed as the first major undercover operation of the agency,” said the official, adding that the Federal Bureau of Investigation in the US does it on regular basis in terror and drug cases and has a legal framework for mounting undercover operations.
The NIA doesn’t, although it has been demanding the same from the government, which, last year, indicated that it could consider working on a change in the law to allow this.
The NIA’s operation in this instance revolved around an undercover agent — agency officials will only say this person was working on behalf of the NIA — pretending to be a money launderer. Through its channels of informers, NIA facilitated a meeting between Srinagar resident Mushtaq Ahmed Sheikh, who wanted to exchange a significant amount in demonetised notes, and the agent.
Over the course of the next few months, the agent had many meetings with Sheikh, who, it turned out, was in touch with others who claimed they could help in the process of exchanging the demonetised notes. The network included Kolkata resident Mohammad Rafiq Ali Sheikh and Mumbai-based Deepak Toprani. It also included a prominent Srinagar-based hotelier whom the NIA official refused to name because he is currently under the agency’s scanner.
Toprani, 60, presented himself as a former director general of the Directorate of Revenue Intelligence but NIA sleuths allege the Mumbai resident is basically just another money launderer.
Two other Mumbai residents, Vinod Shreedhar Shetty and Jaswinder Singh, were also involved. “Toprani had formed a trust with two Delhi residents, Mange Ram and Pradeep Chauhan. The trust was being used as conduit for illegal exchange of demonetised currency with new currency. Toprani works on percentage basis,” claimed the NIA official mentioned in the first instance.
According to the official, one of Mange Ram’s associates was a Delhi police head constable, Bhagwan Singh. NIA’s agent discovered that Chauhan was actually an aggregator who was collecting demonetised cash from various sources over several months by paying a percentage of the value (because the cash was worthless, and its holders desperate to exchange it, they were willing to let Chauhan have it for a fraction of its original value).
According to the NIA official, Bhagwan Singh was the custodian of all this cash, which was stored at Chauhan’s residence at Sainik Farms in Delhi. Shetty and Jaswinder Singh were supposed to help Chauhan exchange the cash, the agent found out.
A rendezvous was fixed at the YMCA building on Jai Singh Road near Jantar Mantar on November 6 for this. The cash came in four vehicles, in 28 cartons. By then, the agent had blown the whistle and an NIA team was waiting to seize the cash and arrest everyone involved. “Five currency-counting machines were installed in the NIA headquarters to account for all the recovered cash. Counting started on the night of November 6 and went on till afternoon the next day, only then the agency announced the recovery and arrests,” said the official.
The exact amount of cash turned out to be ?36,34,78,500 in old currency notes of ?500 and ?1,000. “During the undercover operation, the agency meticulously collected evidence against all the accused. We believe it will help us to conclusively prove our case in court,” said the official.
The NIA suspects that the group was probably in touch with executives in private as well as government banks to find a way to exchange the demonetised currency. Questioning of the arrested accused revealed that the group was expecting that could get 30 to 40 per cent of the demonetised currency in valid notes.
NIA is keen on more such undercover operations, said the official. Three years ago, the agency had requested the government to amend the NIA Act, which governs its working, to make undercover operations part of its legal framework. Last year, Union home minister Rajnath Singh said the government is considering it.
“It is the right time for the government to accord sanction to the NIA for carrying out undercover operations by its own officers,” said agency’s former special director general NR Wasan who was with the NIA when the proposal for legal sanction was sent to the government.