Gauri Sadan on Hailey road, New Delhi, the location of two RAW safe houses. Gauri Sadan on Hailey road, New Delhi, the location of two RAW safe houses.

JKLF hostage Yair Yitzaki (2nd from right) in Srinagar with Israeli compatriots after his release in June 1991. JKLF hostage Yair Yitzaki (2nd from right) in Srinagar with Israeli compatriots after his release in June 1991.

Anand Kumar Verma. Anand Kumar Verma.

R.K. Yadav R.K. Yadav

An ongoing corruption case in Delhi High Court has unveiled a secret operation authorised by then prime minister Rajiv Gandhi in the late 1980s.A disproportionate assets case filed by R.K. Yadav, 62, a former Research and Analysis Wing (RAW) official against Anand Kumar Verma, 81, who retired as RAW chief in 1990, mentions two companies as alleged conduits for diverting secret funds. Yadav alleged that Verma, who was chief between 1987 and 1990, had amassed properties now worth over Rs 100 crore. It now emerges that two of the three flats bought by the RAW front firms were safe houses for Israel's secret service Mossad to operate covertly in New Delhi.On February 18, 2013, a special CBI sessions court asked the agency to investigate the ownership and value of Verma's properties. These include a bungalow in Noida's Sector 26, and shops in Archana Shopping Complex, flats in Janakpuri and Feroze Shah Road, farmhouses in Bijwasan, Mehrauli and Sultanpur, a computer factory in Okhla and two flats in Bangalore. cbi submitted an application on March 8 stating its intent to challenge this order in the high court. But buried in Yadav's innocuous October 2009 petition are details of the two companies, which offer a glimpse into how RAW uses civilian companies to conduct its business.Inquiries by India Today show that the two companies were to serve as operational fronts for the India station chief of Israel's external intelligence agency Mossad. RAW insiders say the operation was carried out to camouflage the Mossad agent. This was because India did not have full-fledged diplomatic relations with the Jewish nation, but valued intelligence ties with it which it nurtured under its legendary founder R. N. Kao in the late 1960s.Sometime in the late 1980s, RAW evidently decided on closer ties with Mossad. RAW had until then dealt with it only in third countries. So, in 1988, it floated Piyush Investments and Hector Leasing and Finance Company Ltd. These two firms were listed as trading houses that dealt in thousands of minerals, automobiles, textiles, metals and spare parts, and in an Argo-like spin, also produced feature films. There's no evidence the firms did any of this, but two senior RAW officials, V. Balachandran, who retired as RAW special secretary in 1994, and B. Raman, who retired as additional secretary in 1995, served as directors of the firm.In March 1989, the fake RAW front companies bought two flats in Gauri Sadan, a residential building on New Delhi's Hailey Road, for Rs 23 lakh. The apartments, measuring over 2,100 sq ft each, housed Mossad's station chief between 1989 and 1992.Sources say RAW took several precautions to hide the identity of the Mossad agent, who held an Argentine passport and exchanged intelligence and expertise in operations. One critical case he handled was the kidnapping of an Israeli tourist by the Jammu and Kashmir Liberation Front (JKLF). The JKLF militants attacked a houseboat in Srinagar in June 1991 that six Israeli tourists had rented. The unarmed tourists fought back, killing one assailant. The solitary tourist who was kidnapped was released by JKLF a week later. Negotiations with JKLF were almost entirely conducted by Moshe Yegar, an Israeli diplomat flown into Delhi, and the unnamed Mossad agent. India and Israel established full diplomatic relations in 1992.Verma, who now lives in Noida, declined to talk of the company, but hints his association with the front company was purely professional. "Sometimes, spy agencies float companies for operational reasons," says Raman. "All I can say is that everything was done with government approval. Files were cleared by the then prime minister (Rajiv Gandhi) and his cabinet secretary," he adds. "It is true that we did a large number of operations but at every stage, we kept the Cabinet Secretariat and the prime minister in the loop," says Balachandran, now a Mumbai-based security analyst.The fake front companies and the flats still exist. A visit to Gauri Sadan reveals that the two interconnected flats are registered in the name of Piyush Investments and Hector Leasing and Finance. The doorbell was answered by a young person who identified himself as a caretaker and dialled a senior official. He identified himself as 'Mr Nair', promised to call back, but never did. Evidently, the flats still function as one of several RAW safe houses across India. A third flat, bought by Piyush Investments in the five-storeyed Taj Apartments near Safdarjung Hospital, is unoccupied. While RAW continues its cloak-and-dagger operations from its safe houses, Yadav continues his bruising public battle against Verma.Both are phenomenal if unlikely adversaries. In his 2007 book Kaoboys of RAW, Raman calls Verma, a 1953-batch ips officer handpicked by R.N. Kao to join RAW in 1968, one of the agency's finest operational heads, something even Yadav agrees to. Yadav, who Verma calls "a very smart fellow", has left his own impression on the agency. He and 80 employees were suspended in 1980 for floating a RAW employees' union and calling for the agency's first-ever strike that year. Employees surrounded seniors and laid siege to RAW's Lodhi Road headquarters. The strike ended with the government taking away the right of secret service agencies to form unions. Yadav was subsequently dismissed in 1989 during Verma's tenure. Verma says Yadav blamed him for the dismissal. "He came to my son Deepak's office in 1991 and threatened to fight a 'Mahabharata' against my family if I didn't write to the prime minister for his reinstatement," says Verma.In a 1996 case before Delhi High Court, Yadav listed eight properties he claimed were illegally bought by Verma using RAW's unaudited funds for secret operations reportedly running into several hundred crores. "He bought eight properties worth over Rs 2 crore, when his income was less than Rs 3 lakh," he alleges. His petition for a CBI inquiry into Verma's properties was dismissed in 1996, but Yadav used the RTI in 2005 to get evidence against Verma and file a fresh case in 2009.Verma presents evidence to show the properties are actually owned by his wife and US-based son. Verma's wife is the daughter of a Nagpur-based automobile dealer P.B. Kale and freedom fighter-turned MP Anusuya Bai Kale. Verma reported that his wife received monetary gifts from his father-in-law in a letter dated 1973, and shows proof of having recounted all his property details to the government every year until his retirement. "The properties Yadav mentions are family-owned. I own only one floor of my Noida house and shares of two shops in Archana Complex. My wife comes from a rich business family and bought the farmhouse using her own funds," he says.Yadav denies that his case against Verma is personal. He says he is only concerned about the misuse of secret funds. "Since no agency checks misuse of secret funds, I'm bringing it to public notice," he says.Yadav filed a fresh case in 2009 in CBI's special court asking the agency to probe Verma's properties. The next hearing of the case is on April 2. With CBI now deciding to appeal against the court's order to investigate Verma's assets, Yadav's 17-year war against Verma is set to drag on. There's no telling what new secrets it will spill.