The nexus between middlemen, arms agents and government officials has been broken, according to Defence Minister Manohar Parrikar.
"My first reaction is shock... How can anybody say this, on what basis?" Tyagi told NDTV when asked whether he was involved in the VVIP chopper scam.
Widening its probe in the Rs 3,600 crore VVIP chopper deal, the ED has begun a trail of "cash" which is suspected to have been paid as alleged kickbacks.
A Delhi court on Thursday granted bail to former defence secretary Shashi Kant Sharma in a case related to the AgustaWestland chopper scam.
Both have been asked to furnish a personal bond of Rs 2 lakh and one surety of like amount as pre-requisites.
A Delhi court on Saturday sent former Air Force Chief S P Tyagi, arrested in Rs 450 crore Agusta Westland bribery case in procurement of 12 VVIP helicopters, to police custody for four days after the CBI said he was needed to be quizzed to unearth a "very large conspiracy having international ramifications".
The Central Bureau of Investigation on Monday questioned former Indian air force Chief S P Tyagi and two others in connection with alleged irregularities in the AgustaWestland helicopter deal.
Against the backdrop of scams such as the VVIP chopper deal, a new defence procurement policy came into force ay, which aims at enhancing transparency and probity in military purchases and gives first right of refusal to Indian vendors to promote indigenous industry.
An Italian court on Friday allowed Indian authorities to question alleged middleman Guido Hashcke in the chopper scam case, which is being heard in that country.
Michel, extradited from Dubai, was arrested by the ED on December 22 last year.
Kalvari is expected to enter service by September end.
Special judge Arvind Kumar issued notice to the agency and directed it to file a reply on Michel's plea, which had stated that he had not named anybody in connection with the deal during investigation by the ED and that even though the court has not taken cognisance of the documents, in order to make the entire case a sensation again in the media, the agency had leaked the chargesheet.
The prime minister maintained that the commitment that the government had made to the people has been fulfilled.
The deal was "put on hold" only in 2013 after corruption was "proved", he said adding the Congress chief should answer who was behind the delay.
The bench said what is worrying the court is the complexity of trial as there are over 250 witnesses in the case and the co-accused government officials have been granted bail for want of sanction for prosecution.
"Many people who had some links with Agusta, I am not saying illegitimate links, but some links with Agusta procurement and supply, were given good positions," Parrikar told PTI in an interview.
Parrikar also took a dig at Congress president Sonia Gandhi, saying translation from Italian was not easy 'at least for the ruling side. May not be a difficult task for the Opposition'.
The government has withdrawn the tender for purchase of 98 torpedos for Scorpene submarines which a subsidiary of chopper scam tainted Italian defence conglomerate Finmeccanica had won during the UNited Progressive Alliance regime.
Armed with fresh details on the alleged kickbacks, India has initiated steps to cancel the Rs 3,600 crore-chopper deal with Anglo-Italian firm AgustaWestland by issuing a show cause notice to it in this regard.
Swamy gave notice in the Rajya Sabha for moving Breach of Privilege Motion against Leader of Opposition Ghulam Nabi Azad over his remarks related to the AgustaWestland issue.
The Bharatiya Janata Party on Tuesday said it has been raising the financial irregularities in the VVIP helicopter deal with an Italian company for the past one year and insisted that the Congress-led United Progressive Alliance government give an explanation about the reported anomalies.
Michel's counsel appeared with the application before Special Judge Arvind Kumar who issued notice to the probe agency and sought its reply by Saturday when he will take up the matter.
A special court denied Christian Michel bail in the related Central Bureau of Investigation case.
The meeting would be attended by Parrikar, Home Minister Rajnath Singh, Union Parliamentary Affairs Minister Venkaiah Naidu, besides others. Parrikar, who met the prime minister on Tuesday, is expected to address the Rajya Sabha at 2 pm during the short duration debate.
Tyagi has been granted bail on Rs 2 lakh security.
The CBI argued before the high court that each day Tyagi remained out on bail would lead to its line of investigation being "exposed" and "hampered" and the evidence could also be destroyed.
ED sought his custody for seven days, claiming it had knowledge of unidentified assets which value more than Rs 500 crore and his custodial interrogation was required.
He also took a dig at Arvind Kejriwal for his remarks that the Modi government does not have 'enough courage' to arrest Sonia Gandhi, saying the Delhi chief minister was feeling left out because he did not get any media publicity for the last 10 ten days when the focus was on the VVIP chopper scam.
He also said that Bharatiya Janata Party MP Subramanian Swamy has not lied about the deal but it seems he has been misled.
India on Tuesday barred scam-tainted Italian defence firm Finmeccannica from participating in future tenders while deciding to carry out ongoing contracts with the group and its subsidiary AgustaWestland, more than a month after putting all deals on hold.
With only one day left, the Winter session of Parliament is on the verge of a washout as it failed to transact any business again on Thursday.
CBI sources said while Air Marshal (Retd) Gujral has been asked to appear for questioning on Saturday, Tyagi will be examined on Monday.
Describing the Italian chopper deal as one having the "makings of a second Bofors scam", the Bharatiya Janata Party on Wednesday sought to know why the government has not taken any action on the matter till now and said it will raise the issue strongly during the Budget Session of Parliament.
Shah said the 'friendship' between Christian Michel, the alleged middleman in the deal, and Congress' top leadership is 'time tested and deep'.
If Wednesday was any indication, the rest of the Parliament session will see the two sides scoring brownie points against each other, and the Gandhis can expect more enemy fire directed at them, says Rashme Sehgal.
Michel may prove to be the missing link in the money trail in the alleged multi-crore scam being probed by the CBI.
Now, the Delhi high court will hear the matter on January 18.
Rajya Sabha failed to transact any business for the second day on Thursday after uproar by members over the Telangana issue, killing of a student from Arunachal Pradesh in Delhi and plight of Tamil fishermen.
The extended Winter session of Parliament got off a stormy start on Wednesday with uproar over the Telangana and caste-reservation issue stalling proceedings.
A bail plea was also moved on his behalf. The court did not give any specific date for hearing the bail plea.
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