Combating Organised Crime
A Case Study of Mumbai City
Sumita Sarkar & Arvind Tiwari^#

Organised crime is not confined to the boundaries of any one country and has become a transnational problem. Organised criminal activity has existed in different forms since ancient times, but contemporary patterns of organised crime are infinitely more complex than they have been at any point of time in history. This paper places the specific case of organised crime in the city of Mumbai within the context of transnational trends in criminal activity. It first examines the larger international discourse on organised crime, clarifying concepts and outlining the nature and magnitude of various component phenomena across the globe. The paper then passes on to an assessment of trends in the operation of gangs and organised crime in Mumbai, the socio-demographic profile, ethnic background, religion and international dynamics of gangsters in the city and the international dynamics of gangsterism, contract killing, etc. Some combative strategies adopted to deal with organised crime in the city are also dealt with.

I. Organised Crime: Conceptual Framework

Contemporary technologies and the emerging world order have undermined the conventional parameters of state sovereignty and the inviolability of national boundaries. The communications and information revolution, and expanding processes of interaction, transportation and transaction have dramatically enhanced accessibility across borders, creating increasing levels of information and unprecedented opportunities for both good and evil. Patterns of ‘development’ have also contributed to a plethora of problems in terms of population explosion, competition for survival and scarce resources, and the struggle for existence. There are pathological outcomes of such processes of development, including poverty, unemployment, deviance (as an expression against normative means of livelihood) or crime (as a severe form of such deviance). It is in this context that organised crime has established itself as one of the most serious and violent manifestations of the modem criminal world.¹

Organised crime as a concept is, to some extent, synonymous with certain historical organisations, such as the mafia, camorra,² etc. It has, however, a broader and encompassing definitional connotation in terms of its nature, pattern and functional criteria. According to the Kefauver Committee (195l),³ organised crime could be a network of criminal syndicates fundamentally based on ‘muscle’ and ‘murder’ indiscriminately used in running criminal enterprises.⁴

Definition

The US Task Force Report of 1967 described organised crime as "a society that seeks to operate outside the control of the American people and their government. It involves thousands of criminals working within structures as complex as those of any large corporation, subject to laws more tightly enforced than those of legitimate governments. Its actions are not impulsive but the result of intricate conspiracies, carried on over whole fields of activity in order to amass huge profits."⁵

The legal statute that is used to define organised crime has enormous significance. The Penal Statues of several countries have criminalised organised crime, while others have used alternatives concepts and legislative devices to tackle the problem. For example, the Italian Penal Code does not specify what organised crime is, but it does define ‘criminal association.’ According to Article 416 of the Italian Penal Code, "when three or more persons associate for the purpose of committing more than one crime, whoever promotes or constitutes or organises the associations shall be punished, for that alone with imprisonment from 3 to 7 years."⁶

In 1968, the US Congress enacted the Omnibus Crime Control and Safe Street Act, that stated "organised crime includes the unlawful activities of the members of a highly organised, disciplined association, engaged in supplying illegal goods and services, including but not limited to gambling, prostitution, loan sharking, narcotics, labour racketeering and other unlawful activities of such association."⁷ Here, the choice of certain words to conceptualise organised crime within legal, the definition accommodates a wide range of diversities so that the exemption from the legal statute would not be applicable through the limitation of legal definition.

Organised crime has also been defined in a number of narrower legal statutes. For example, the US RICO (Racketeer Influence and Corrupt Organisation) Act, 1970, states that racketeering is an act of threat involving murder, kidnapping, gambling, arson, robbery, burglary, extortion or dealing in narcotics or dangerous drugs and other denominated crime.⁸ A pattern of racketeering activity requires at least two acts of designated offences.

Japan has a special law on the prevention of irregularities by gangsters. It is meant to exercise necessary control on acts of intimidation and violence carried out by gangsters, to protect the activities of civic public organisations and to prevent danger to the life of citizens from gangland war. Article 2 of the aforesaid law defines a gang as "any organisation likely to help its members including members of affiliated organisations of the said organisation to collectively and habitually commit illegal acts of violence."⁹

Interpol defines organised crime as "any enterprise or group of persons engaged in continuing illegal activity which has its primary activities that bring together a client-public relationship which demands a range of goods and services which are illegal."¹⁰

However, while defining several attributes of such organised syndicates, few more conceptual clarifications need to be made. For example, John Dellow, Assistant Commissioner, Metropolitan Police, London, ascribes the following three basic features to organised crime:

• Organised crime can involve any group of individuals that is structured, sophisticated and widely spread across nations.
• It is a section of society that seeks to operate outside control of the people and their government.
• It is a self-perpetuating, continuing criminal conspiracy for profit and power, using fear and corruption and seeking protection from law.¹¹

Elaborating on the nature and extent of organised crime, M.N. Singh, Commissioner of Mumbai Police, stated, "organised crime is a planned commission of criminal offences inspired by the pursuit of profit and power. It is also a resisting form of criminal activity that brings together a client-public relationship which demands a range of goods and services which are illegal."¹²

The Maharashtra Control of Organised Crime (MCOC) Act of 1999 defines organised crime as any continuing unlawful activity by an individual, singly or jointly, either as member of an organised crime syndicate or on behalf of such syndicate by use of violence or threat of violence or intimidation or coercion, or other unlawful means with the objective of gaining primary benefits or gaining undue economic or other advantage for himself or any other person promoting insurgency.¹³

Within such a wide range of definitions of organised crime under various penal statutes of several nations, some of the attributes/indicators that are common and integral to the structure of organised crime can be derived to clarify the essential contours of the phenomenon:

Continuity: The criminal group operates beyond the lifetime of individual members and is structured to survive changes in leadership.

Structure: The criminal group is structured as a collection of hierarchically arranged interdependent offices devoted to the accomplishment of a particular function. It may be highly structured or may be rather fluid. It is, however, distinguishable as the ranks are based on power and authority.

Membership: The membership of the core criminal group is restricted and based on common traits such as ethnicity, criminal background or common interests. Potential members are subjected to immense scrutiny and are required to prove their worth and loyalty to the criminal group. Rules of membership include secrecy, a willingness to commit any act for the group and intent to protect the group. In return for loyalty, the member receives economic benefits, certain prestige and protection from law enforcement agencies.

Criminality: The criminal group relies on continuing criminal activity to generate income. Thus, continuing criminal conspiracy is inherent in organised crime. Some activities such as supplying illegal goods and services directly produce revenue while others including murder, intimidation and burglary contribute to the group’s ability to earn money and enhance its power. The criminal group may be involved both in legitimate as well as illegitimate business activity at the same time.

Violence: Violence in society is often manifest without any perceptible reason. This violence may be manifested in social gatherings such as marriage parties, etc., and may include damage to property or assault on persons or reckless acts such as firing in the air or driving at high speed in crowded places, etc. The intent, here, is to over-awe and establish an atmosphere of fear in the larger community.

Intimidation: Intimidation may be direct and overt, or covert, and may be intended to secure co-operation in the commission of certain unlawful acts, or omission on the performance of some lawful functions. People are threatened to stay away from lawful deals relating to sale or purchase of property, and government officials are threatened in order to secure certain ends through their intervention or coerced oversight. Intimidation is often also exercised to secure compromises or settlements in inter- and intra-gang disputes.

Public Disorder: This includes display of power by gangs. At times, disorder is purposely created on otherwise orderly social occasions. Functions organised by rivals are disturbed. The public at large is harassed with impunity and without any consideration or regard to legal sanctions.

Monopolising certain trade: When criminal gangs are involved in legitimate activities, they try to establish monopolies through muscle power. For example: rail contracts in important railway centres, labour contracts in industrial towns and transport contracts in areas of high trading activity.

Corruption: Corruption is a significant indicator of the existence of organised crime. It is one of the important instruments used by criminal gangs. Subversion of enforcement officials is an important indicator of the effectiveness of organised criminal activity. Corruption at higher levels immensely encourages and strengthens criminal syndicates.

Protectors: They are corrupt public officials, attorneys and businessmen who individually or collectively protect the criminal group through abuses of status and/or privilege, collusion and violation of the law. As a result of the protectors’ efforts, the criminal group is insulated from both civil and criminal government actions. Corruption is the central tool of the criminal protectors. A criminal group relies on a network of corrupt officials to protect the group from the criminal justice system.

Organised Crime Support

• Specialist Support: Organised criminal groups and their protectors rely on skilled individuals or support to assist the criminal groups on an ad hoc basis. Such specialists include pilots, chemists, lawyers, arsonists, hijackers, shooters, etc.
• Social Support: Social support includes public officials who solicit the support of organised crime figures and business leaders who do business with organised crime syndicates, and interact with them at social gatherings, thus portraying the criminal group in a favourable or glamorous light.

A majority of countries are now confronted by the challenge of transnational organised crime,¹⁴ and the major patterns of organised crime variously documented in recent years include:¹⁵

• Illicit Drug Trafficking;
• Alien Smuggling;
• Money Laundering;
• Financial Fraud;
• Counterfeiting;
• Illegal Arms Trafficking;
• International Car Theft Rings; and
• Prostitution.

2. Organised Crime in India: A Case Study of Mumbai

Criminal gangs have been operating in India since ancient times. The operation of ‘thugs’ during the British period is well documented.¹⁶ Another popular criminal grouping includes the dacoits of the Chambal region till recent times. Several such gangs used to operate in the States of Madhya Pradesh and Uttar Pradesh, and were neutralised as a result of police action and the social reform movement.¹⁷

Organised crime in contemporary India is a more complex issue. In the modem urban world, the gap between aspiration and fulfilment is widening. In India, the typical socio-political circumstances prevailing since Independence and the advent of democracy provide the logical context of the strengthening of these trends. The fact that the Constitution of India aimed at achieving socio-economic equality in a popular, nebulous and pluralistic democracy has generated processes favouring the creation of greater political legitimacy for various patterns of deviance and crime. An upsurge in economic crimes includes a variety of financial scams, tax evasion and money laundering.

The year 1991 was a watershed in India’s economic resurgence. Liberalisation and globalisation of the economy allowed a free flow of foreign goods and capital into the country, and the dramatic growth in computerisation and e-business that followed have led to the emergence of cyber-crime.¹⁸

All schemes introduced to boost the country’s foreign exchange reserves are open to manipulation. This is best illustrated by the Value Based Advance License (VABAL) scheme, where up to 60 per cent of the value of exports was allowed at zero import duty and with no income tax on the foreign exchange earning. This led to the hawala (illegal money transfer system) racket, where unscrupulous exporters started obtaining export license on the strength of bogus export orders, and made huge profit by arranging foreign remittances through hawala channels. M.N. Singh estimates that total hawala transactions in the country stood at Rs. 305 billion a year in 1994.¹⁹ This currency flight continues to be a lucrative underworld operation. The Mumbai bomb blast-case accused,²⁰ such as Tiger Memon and Moolchand Shah alias Choksi, channelised their illegal earnings through this hawala route, which they also used to fund their bombing operations.²¹

Various legislative initiatives have also given rise to other patterns of organised crime. In keeping with the spirit of the Directive Principles of the State Policy enshrined in the Constitution, many laws were enacted to remove social inequalities and evils, and to reduce economic disparities. Restrictions imposed on the consumption of alcohol gave rise to bootlegging activities in the States of Maharashtra and Gujarat. The Prohibition Law of 1949 in Mumbai gave rise to a lucrative clandestine trade in illicit liquor. In a city like Mumbai, where the price of alcohol is understandably high, bootlegging become a thriving business in the black-market and this was followed by the evolution of the popular illegal gambling system called Matka.

As the financial capital of India, Mumbai has long been the playground of several criminal gangs and their continuing warfare for dominance. The first systematic study of organised crime was conducted by V.K. Saraf, Commissioner of Police (Retd), Mumbai City, 1995, in which he traced the origin of organised criminal gangs in the city, their criminal activities and the inter-gang warfare. He also highlighted the main characteristics of the Mumbai gangs.

After Independence, due to the prohibition policy adopted by the Government of Maharashtra, bootlegging or trade in illicit liquor became a lucrative business for criminal gangs. They made considerable sums of money by supplying illicit liquor to the local citizenry. Their activities also extended to the neighbouring State of Gujarat, which was declared ‘dry’ at the time of Independence and continues to be so till date. Varadarajan Mudaliar, who started as a porter at the Victoria Terminus (VT) Railway station, took to committing theft at the Mumbai Docks and later graduated to bootlegging in the nineteen sixties. He acquired considerable wealth through such activities and also subverted the law enforcement system considerably. In the mid nineteen eighties, he became so influential that he used to hold durbars (conclaves) in his area of influence to settle disputes.

Similarly, Haji Mastan and Yusuf Patel began as small-scale criminals and later took to smuggling gold and silver. They made a lot of money and invested it in ‘legitimate’ business ventures, primarily construction and real estate. Haji Mastan made an attempt on Yusuf Patel’s life in the nineteen seventies due to business rivalry but the latter survived. This was the beginning of the gang warfare in Mumbai, which continues unabated to date and has claimed hundreds of lives.

Another major gang to emerge in Mumbai was that of Varadarajan Mudaliar in the nineteen seventies on the basis of bootlegging and Matka operations. In later years, he diversified his illegal activities into smuggling, dock thefts and contract killing, ruling the city’s underground for over a decade till the mid-nineteen eighties.²²

Another example was Abdul Latif, the Mafia don of Ahmedabad in the State of Gujarat. He also started his career as a small time bootlegger and went on to monopolise the entire illicit liquor business in the State. In 1985, he aligned with notorious Pathan gangster Alamzeb of Mumbai to put down his rival Pappu Khan. His influence and power in the city of Ahmedabad increased so much that he was even elected as a corporator from five different municipal wards while still in jail (he was arrested in the year 1985 for the murder of a police officer) during the 1987 elections. Later, he linked up with the Dawood Ibrahim gang and killed Alamzeb. In January 1993, he received a consignment of 57 AK-56 rifles and 15,000 rounds of ammunition from Dawood Ibrahim for use during the post-Ayodhya riots. Abdul Latif, a mere bootlegger thus turned out to be a dangerous gangster-cum-terrorist-cum-politician in due course of time and became a major headache for the Gujarat Police, until he was nabbed at Dariyagunj in New Delhi on October 10, 1995, and was killed in a police encounter subsequently. His area of operation extended across the States of Gujarat, Rajasthan, Madhya Pradesh and Maharashtra.²³

The Dawood Ibrahim Gang²⁴

Dawood Ibrahim is the most powerful Mumbai Mafia ‘don’, with a countrywide network and extensive linkages abroad. He is one of the most powerful gangsters involved in transnational crimes, including narcotics smuggling, extortion and contract killing. He has lived in Dubai and is currently based in Pakistan. He had a phenomenal rise within a short time. The son of Ibrahim Kaskar, a former Criminal Investigation Department (CID) constable,²⁵ he started off as a petty criminal and had the sympathies of Bombay (now Mumbai) Police due to his father’s connections. He used to assist smugglers to recover money from those who did not keep up their ‘word’. In the nineteen seventies, other gangs had become relatively weak and he took advantage of the vacuum, taking up smuggling of gold and silver. He built up his criminal empire with the help of his brothers and close associates, and was responsible for the elimination of hundreds of criminals belonging to rival gangs. The liberal bail policy pronounced by the Supreme Court helped him consolidate his gang. In the nineteen eighties, he became the most feared gangster of Mumbai. However, fearing for his life at the hands of rival gangs, he fled to Dubai, though his criminal network remained virtually intact. He currently controls his gang’s operations with complete impunity, as there is no extradition treaty between India and Dubai or Pakistan, and authorities in these countries have refused to extradite him – and, indeed, deny his presence on their soil despite overwhelming evidence. He also attempted to win social respectability by playing host to many influential politicians and film stars in Dubai.

Dawood’s brother Anees Ibrahim looks after the smuggling, narcotics trafficking and contract killing operations. Another key associate, Noora, looks after film financing and extortion from film personalities. Iqbal, a low profile operative, looks after his ‘legitimate’ business activities, including trading in the share markets of Hong Kong and jewellery and gold businesses. His gang consists of about 4,000 to 5,000 men. Fifty per cent of the Dawood gang members hail from Mumbai and the neighbouring districts and 25 per cent, including Abu Salem, his close lieutenant, hail from the State of Uttar Pradesh.

Due to changes in fiscal policies, the smuggling of gold and silver has become less lucrative. Currently, the primary activities of this gang are extortion, contract killing, film financing, drug trafficking, smuggling computer parts and illicit trade in arms and ammunition. The Dawood gang has been supplying arms both to criminals and terrorists.

Dawood Ibrahim has also invested heavily in ‘legitimate’ business ventures. His brother Anees owns a trading company in Dubai and Dawood has invested approximately Rs. 20 crores in the Diwan Shopping Centre in Mumbai and is also reported to have financial stakes in the Diamond Rock Hotel in Mumbai. Noora runs the Suhail Travel agency in Mumbai, which has since come under severe enforcement pressure. Dawood also reportedly has huge financial stakes in East West Airlines. His ‘legitimate’ business empire is estimated to have a turn over of approximately Rs.2,000 crores a year.

Dawood’s gang was secular in character before the year 1993 and used to attract ‘volunteers’ from both the Hindu and Muslim communities. However, after his involvement in the serial blasts in 1993, most of the Hindu gangsters have parted company from him. Sunil Samant, a dreaded gangster who continued to be loyal to him, was killed in Dubai in year 1995 by the Chota Rajan gang. Apart from his brothers, who are his chief counsellors, he continued to run his empire through Abu Salem²⁶ and Chota Shakeel.

The Chhota Shakeel gang initially used to be a wing of Dawood Ibrahim’s ‘D Company’. Currently operating as an independent gang, though not in dispute with the Dawood gang, it is active in the south, central and north-west areas of Mumbai.

Arun Gawli Gang

After the death of Ramya Naik, the mantel of leadership of his gang fell on the shoulders of Arun Gawli. There have been several inter-gang killings against the Dawood gang, and they have also targeted each other’s political and economic interests. This gang consists of about 2000 to 3000 persons. Interestingly, Arun Gawli was sent to prison in 1990 and even though he was granted bail by the Courts, he chose to remain in jail primarily to escape the wrath of the Dawood gang. He continued to run his criminal empire from within the jail premises by passing instructions through his visitors. His gang is involved in the collection of protection money from rich businessmen and also contract killings. He came out of prison and started a political party, the Akhil Bhartiya Sena. He has been sent back to jail for his alleged involvement in a contract killing case. Arun Gawli is politically very active and has considerable influence in the slum areas of Mumbai. He even posed a significant political challenge to the dominant Shiv Sena party in the State of Maharashtra.

Amar Naik Gang

This gang originated in the year 1980 and commenced with the collection of protection money from various vegetable vendors in the Dadar area of Mumbai city. When Ram Bhat, the leader of this gang was sentenced to imprisonment in a robbery case, Amar Naik took over the reigns. The main thrust of his criminal activities was to collect hafta (extortion money) from vegetable vendors, hawkers, bootleggers and smugglers. Due to a clash of interests, his gang had several violent skirmishes with the Arun Gawli gang, not only outside jail but even within the jail premises, where members of both the gangs were lodged, resulting in several killings. This gang has a strength of about 200 criminals. Amar Naik was killed on August 9, 1996, and the mantle of leadership has now fallen on the shoulders of Ashwin Naik, his younger brother, an engineer by profession.

Chota Rajan Gang

Chota Rajan commenced his criminal career with the Dawood Ibrahim gang. Hailing from Mumbai's eastern suburb of Chembur, he started out with extortion rackets centred on the Sahyadri Krida Mandal, which organises the annual Ganesh festival at Tilak Nagar.²⁷ Subsequent to the 1993 serial blasts in Mumbai, Dawood’s gang was divided on communal lines and Chota Rajan fell out with Dawood and fled from India. He raised a new gang in 1994-95. According to an estimate, the membership of this gang numbers about 800. His areas of operation are in the States of Maharashtra, Karnataka, Uttar Pradesh and Delhi. He is essentially a drug-trafficker and contract killer. He joined hands with Arun Gawli and was responsible for the killing of Sunil Samant, a trusted lieutenant of Dawood Ibrahim, in Dubai in 1995. It was a retaliatory killing. He has targeted many Dawood loyalists and his gang has also suffered in retaliatory actions. Chota Rajan is presently operating from South East Asia.

Characteristics of Mumbai Gangs

Based on the study of the Mumbai underworld, V.K. Saraf developed the following profile of membership and activities:²⁸

• 66.5 per cent of gangsters in his sample were in the age group of 19-28 years; 26 per cent in the 29 to 38 years category; and 6.5 per cent were above 40 years.
• 29 per cent studied up to primary school, 42.5 per cent up to secondary school and 5 per cent had college education.
• A majority were drawn from a poor economic background and were propelled into the world of crime due to economic difficulties.
• A majority of the gangsters hailed from outside Mumbai and approximately 30 per cent came from outside the State of Maharashtra.
• The gangs were not based on region or religion, but after the 1993 serial blasts, Hindu gangsters have largely disassociated themselves from the Dawood Ibrahim gang.
• A typical Mumbai gangster is a cool-headed schemer and ruthless and un-hesitatingly employs terrorist tactics when he perceives his interest is being jeopardised. He is prone to violence at the slightest provocation.
• There is no initiation ceremony or ritual for the members. However, a ‘hopeful’ is involved in a criminal situation to test his mental capacity.
• The gang leaders have a caring attitude towards the members. The families are well looked after by the leadership when the members are killed or are in jail.
• A gang leader is not a total autocrat. He consults experienced people in the gang. After the death of Sunil Samant, Dawood Ibrahim relied on his brothers and his decisions were/are executed through Abu Salem and Chota Shakeel.
• There is evidence of a loose confederation of gangsters. A smaller gang may merge into a bigger gang but does not lose its identity completely. The smaller gang carries out the decisions of the main gang but is left free to involve itself in any activities of its choice so long as it does not clash with the interests of the main gang.
• The gangsters are required to display unflinching loyalty to the boss. Lack of loyalty means death.
• The gangsters are divided into three categories, namely, sharp shooters, money collectors and liaison agents. The liaison agents deal with lawyers and law enforcement officials and assist in legal problems relating to incarcerated gangsters. Each gang has a certain number of auxiliary members. They have a history of being involved in criminal activity and generally provide shelter to the gangsters and act as a repository for weapons. Their premises are used for holding meetings and making telephone calls by the gangsters.

Nature and Extent of Crime in India

Before we further analyse the issue of organised crime, it would be necessary to delineate the present nature and extent of crime in India.

Table 1: Trends in Violent Crimes, Property Crimes and Economic Crimes in India (1951-1981 & 1991-1997)

* Data available from 1953 onwards only.
** Arson and Dowry Death cases included in Violent crime since 1995; hence data before 1994 not comparable from 1995 onwards
NA stands for not available.
Source: Crime in India, 1997, Ministry of Home Affairs.

According to the Crime in India report for the year 1998, the total number of incidents of crime reported in the country was 6,180,996, wherein 1.779 million cases were reported under the Indian Penal Code (IPC), followed by 4,401,855 under the State laws, which showed an overall increase in the incidences of crime over the preceding five years. Table 1 reveals that, over the decades, there is a significant trend especially with regard to violent crime, property crimes and economic offence, with percentage/change in 1991 over 1961 being 341.9 in the case of violent crime. In property crimes, it is 39.33 per cent and in economic offences 83.8 per cent whereas percentage change in 1991 over 1981 in violent crimes and economic crimes are 27.4 and 25.6 per cent respectively. Overall, total cognisable crimes (consisting of three major categories viz. violent, property and economic offence) percentage have changed in 1991 over 1961 (i.e. over three decades to about 168.3 per cent)

The increasing incidence in property crime and economic offences is linked to the widening range of organised networks of crime in India, which are gradually getting more and more complex due to the changing nature and mode of operations in terms of sophisticated weaponry, financial transaction and communication systems. Thus, cheating, a non-violent type of offence (38,173 incidences registered in the year 1998) showed a steep rise of 68.1 per cent over the decade 1988-98. At the other end, a serious kind of organised crime like drug trafficking, under the Narcotic Drug and Psychotropic Substances (NDPS) Act of 1986, also witnessed a rise of 36.8 per cent in the decade of 1988-98. Similarly, under the Explosive and Explosive Substances Act, there is an increase of 31.7 per cent cases during the decade 1988-98. It is important to mention that in the cases involving arms, drugs, and explosives and explosive substances, Uttar Pradesh has reported the highest number of incidences. It would be interesting to note that the data available from Crime Branch, Mumbai, (up to June 2001) shows that, in Mumbai’s gang land activities, a large number of recruitments are from the State of Uttar Pradesh.

In the Indian context, the focus areas of organised crime are smuggling, drug trafficking, arms trade, hawala, circulation of fake currency notes, extortion and contract killing.

Smuggling

Smuggling, consisting of clandestine operations leading to unrecorded trade, is a major economic offence. The volume of smuggling depends on the nature of fiscal policies pursued by the government. The nature of smuggled items and the quantum thereof is also determined by the prevailing fiscal policies.

India has a vast coastline of approximately 7,500 kms and also open borders with Nepal and Bhutan. The sub-continent is prone to large scale smuggling of contraband and other consumable items. Though it is not possible to quantify the value of contraband goods smuggled into India, it is possible to have some idea of the extent of smuggling from the value of contraband seized, even though this may constitute a very small proportion of the actual volume of smuggling.

Table 2 shows the value of smuggled goods seized. The high point of smuggling was in the year 1990, when contraband worth Rs. 7.6 billion was seized. Introduction of various liberalisation measures, such as the revised gold and silver import policies in 1992-93, have had their impact on seizures that declined by 30 per cent (Rs. 5.36 billion in 1992) and subsequently to Rs. 3.89 billion in 1993-94.

In 1987, gold occupied the top position amongst smuggled items, followed by narcotics, electronic watches and silver. In 1995, however, narcotics occupied the number one position followed by gold, electronics, foreign currency and synthetic fabrics.²⁹

Table 2: Value of Smuggled Goods Seized 1988-1998

Source: UNAFEI, Resun Matusen No, 1999

Drug Trafficking

It is perhaps the most serious organised crime affecting the country and is truly transnational in character. India is geographically situated between the countries of the Golden Triangle³⁰ and the Golden Crescent,³¹ and is a transit point to the West for narcotic drugs produced in these regions. India also produces a considerable amount of illicit opium, part of which also finds place in the illicit market in different forms. Illicit drug trade in India centres around five major substances, namely, heroin, hashish, opium, cannabis and amphetamines. Seizures of cocaine, amphetamines and Lysergic Acid Diethylamide (LSD) are not unknown but are insignificant and rare.³²

Table 3: Seizure of Narcotic drugs & Number Of Persons Involved 1991-1995 (in kilograms)

Our borders have traditionally been most vulnerable to drug trafficking. In 1996, out of the total quantity of heroin seized in the country, 64 per cent was traced to the Golden Crescent.³³ The Indo-Myanmar border is also quite sensitive but the percentage of seizures is much smaller. The India-Sri Lanka border has also started contributing considerably to the drug trade. The seizure of narcotics from 1991 to 1995, and persons involved, is shown in Table 3.

In 1995, 13,554 persons, including 130 foreign nationals, were arrested under the Narcotic Drugs and Psychotropic Substances Act.

Illegal Arms Trade

Light arms proliferation is a global phenomenon. It has extracted a heavy toll in terms of human lives and socio economic development of entire regions, costs of which can never be adequately computed. In Afghanistan, the death toll due to arms rivalry has crossed the 1,00,000 mark and is still rising, while Cambodia, Sri Lanka and some African states continue to witness conflict-related deaths in their thousands. India has also suffered due to trafficking in illicit arms. The twin phenomena of rising crime combining with armed conflicts and terrorism are directly linked to the global proliferation and movement of weapons.

The Purulia Arms Drop Case is the most glaring example of illicit arms trafficking. On December 17, 1996, an Antonov 26 aircraft dropped over 300 AK 47/56 series rifles and 20,545 rounds of ammunition, Drangnov sniper weapons, rocket launchers and night vision devices in the Purulia village of West Bengal State.³⁴ The aircraft was bought from Latvia for US $ 2 million and chartered by a Hong Kong registered company, Carol Airlines, and payments were made primarily through foreign bank accounts. The aircraft was ferried to Thailand where it was registered. After a dry run over the airdrop area, the aircraft moved to Bulgaria from where the consignment of arms was picked up using an end-user certificate issued by a foreign country.

According to data reported in Crime in India (1997), the violation of Arms Act showed a steady increase of 38.3 per cent over the decade 1987-97. The highest incidence (51,326), constituting 69.3 per cent of the total cases under the Arms Act, were reported from Uttar Pradesh. The crime rate varied from a minimum of 0.1 per cent in Karnataka and Goa to a maximum of 31.9 per cent in Uttar Pradesh against a national average of 7.8 per cent.

In Mumbai, illicit arms trade is increasing at an alarming rate. In the nineteen seventies and early eighties, Mumbai gangsters primarily used knives and daggers. However, the scene completely changed with the entry of sophisticated weaponry, and currently the underworld is reported to be using the AK series of assault rifles, carbines, 9mm pistols, hand grenades and machine guns, among other weapons. The following recoveries are illustrative:

• The serial bomb blast case in Mumbai in 1993 led to the recovery of:

Table 4: Types of Arms Recovered after Serial Blasts in Mumbai, 1993

Source: Crime Branch, Mumbai Police

• In 1992, the arrest of Lal Singh alias Manjit Singh, a Sikh terrorist, led to the recovery of arms and ammunition worth Rs. 2 crores in Ahmedabad, Gujarat, from the Abdul Latif gang.
• Recovery of 10 AK-56 rifles, 51 magazines, 110 hand grenades and 3,300 cartridges from Mohammed Shariff and Naseemuddin of the Dawood Ibrahim gang on October 16, 1998.
• One AK-56 rifle, a sten gun, a revolver, six magazines and 126 rounds of ammunition were recovered in April 1999 from Peter John D’Souza of the Chhota Rajan gang.
• Two AK-56 rifles with 173 rounds, 9 revolvers with 171 rounds, and seven star pistols of 9 mm caliber along with 205 rounds of ammunition, were recovered on October 13, 1999 from Hanif Haji Ismail Sumania from a building in Bandra, Mumbai.
• On December 30, I999, police arrested some agents of the Pakistani external intelligence agency, the Inter Services Intelligence (ISI), involved in the hijacking of Indian Airlines aircraft IC-814 from Kathmandu, Nepal, and recovered two AK-56 rifles, five hand grenades, four anti-tank TNT shells, a huge quantity of ammunition and Improvised Explosive Devices (IED).
• The following recoveries made by Gujarat Police also indicate the hand of organised criminal groups in gun running activities:

1. Recovery of 24 AK-56 assault rifles, Russian hand grenades and ammunition from village Jamia in the Ujjain district of the State of Madhya Pradesh in October 1995.
2. Recovery of two AK-56 rifles from Gajju Khan Pathan, a Municipal Corporator of Ahmedabad city in Gujarat.
3. Recovery of 115 automatic pistols, 750 cartridges, 13 magazines, four kilograms of RDX, 10 detonators, 48 long electric wires at Mehsana, Gujarat, on December 23, 1996, from Ajmer in the State of Rajasthan.
4. Border Security Force (BSF) seized four AK-56 rifles, seven bolt action rifles and 22 Chinese-made pistols in Kutch, Gujarat on January 17, 1997.³⁵

The first two recoveries were made from the associates of Dawood Ibrahim. The third and fourth recoveries showed that weapons were being pushed into India from Pakistan across the land border in Kutch (Gujarat) and Rajasthan. The sea route was used in the year 1993 to bring in shiploads of explosives and firearms and the landings were organised along the western coast of Gujarat and Maharashtra. There are indications that small arms are also being brought in by the air route, although no significant recovery has been made as yet.

One of the major thrust areas of the Mumbai Police in recent times has been the recovery of firearms that are being increasingly used in gangland killings. Country-made weapons as well as foreign-made weapons are being smuggled into the city by criminal elements. Country-made weapons originate primarily from the States of Uttar Pradesh and Bihar, where the illicit arms business is run almost like a cottage industry. In the last three years, Mumbai Police have recovered large quantity of firearms originating from various States, as indicated below:

Table 5: Statement on Origin of Seized Weapons –Mumbai

Source: Crime Branch, Mumbai, June 2001.

Mumbai has also been used as a transit point for drug trafficking. The break-up of Soviet Russia has opened new routes for Mumbai. At present, Mandrax tablets, manufactured in mofussil Maharashtra, find their way through Mumbai to South Africa, Mauritius and other countries.³⁶ The ISI of Pakistan and other terrorist groups channel drug money into the illicit arms trade. In India, Dawood Ibrahim largely controls drug trafficking.³⁷

Hawala / Money Laundering Business

Hawala or money laundering refers to the conversion of illegal and ill-gotten money into legal money so that it can be integrated into the legitimate economy. Proceeds of drug-related crimes are an important source of money laundering the world over. Money laundering indicates a serious threat not only to the criminal justice system but also to the country’s sovereignty. The tainted illegal money is being accumulated and integrated into the economy by organised racketeers, smugglers, economic offenders and anti-social elements and it adversely affects the internal security of the country.

Investigations into hawala-related crimes are conducted under the Foreign Exchange Regulation Act (FERA). Even though the word hawala has not been defined in FERA, the essence of the Act is that any person who retains foreign exchange abroad or sends foreign exchange abroad without the Reserve Bank of India’s permission is guilty of violating FERA provisions. Hawala operations received a boost with the economic liberalisation policy introduced during 1991-92. According to the crime branch of the Mumbai Police, hawala transactions went up to $ 112 million during 1993-94. The Directorate of Revenue Intelligence (DRI) investigated a couple of commercial fraud cases involving repatriation of millions of rupees. Money was received in India through banks on account of exports which had, in fact, not taken place and the custom documents submitted to the banks and Directorate General of Foreign Trade (DGFT) were found to be forged. However, cash, according to Crime Branch reports, has become India’s top export after economic reforms.

In the context of Mumbai, hawala operations played a significant role in the 1993 Mumbai serial bomb blast case and were primarily routed through Tiger Memon, Moolchand Shah alias Choksi, Mohammed Dosa and others.³⁸

Circulation of Fake Currency Notes

In recent years, the arrival of fake currency notes by land as well as air routes appears to have increased. The man who handles these operations in Dubai is Aftab Bakti, who works in tandem with Habib Khan and Iqbal Mujahid, an ISI agent from Pakistan.³⁹ They use Indian expatriates in Dubai as carriers who are paid Rs. 7000 in cash and air ticket as compensation for carrying the contraband. They are given parcels containing fake currency notes wrapped in aluminium foil and concealed in toy boxes or flower vases. On arrival at the airport, they are allowed to pass through the Green Channel by obliging customs officials. A contact man meets the carrier outside the terminal building by a pre-arranged signal and the parcel is handed over to him. In a July 2000 detection, Mumbai Police recovered approximately Rs. 150 million in fake currency notes, mostly in Rs. 500 denomination and partly in Rs. 100 denomination, and arrested 20 persons.⁴⁰ The contact person in Mumbai was Ismail Murani Sayyed alias Kassam. Akhtar Moharram Hussain Farooqui was looking after the distribution network. Similar recoveries were made in the States of Rajasthan, Andhra Pradesh, Gujarat, Karnataka, and Delhi by the DRI and Customs. There is sufficient ground to believe that fake currency notes are being printed in the Pakistani Security Press. Furthermore, Dawood Ibrahim has been reportedly working in tandem with the ISI to undermine the Indian economy.

Extortion (Hafta)

One of the most threatening activities by Mafia gangs in India is extortion (hafta). Extortion was almost non-existent in Mumbai city till the end of the nineteen eighties. Today, it is a major concern for the city’s Police. Mafia gangs have started terrorising people from all walks of life for extortion. Almost all the prominent gangs of Dawood Ibrahim, Chhota Rajan, Shakeel, Abu Salem, etc, are involved in the extortion racket in Mumbai. All big business personalities are their targets. In the case of well-known and rich personalities, if money is not paid, an example is made of a couple of ‘targets’ who are killed in order to terrorise and secure the compliance of others. Chhota Shakeel, Fahim, Salim, Chiplun and Rashid Malbari operate the biggest extortion racket on behalf of Dawood Ibrahim through the Dubai-Karachi-Mumbai network.

Table 6: Extortion Cases