The former chairman of the Indian Space Research Organization (ISRO), G. Madhavan Nair, and the federal government are engaged in a war of words over a controversial contract to lease satellite transponders to a private company.

One of the reports by two government panels on Feb. 5 has condemned the actions of Nair and three other scientists in connection with the ill-fated deal that ISRO’s commercial arm Antrix signed to lease S-band frequencies to Devas Multimedia Private Ltd. The deal resulted in an estimated loss of 2 trillion rupees ($41 billion) in potential revenue for the Indian treasury, according to the report.

A five-member team, chaired by former Central Vigilance Commissioner Pratyush Sinha, concluded that there were serious lapses of judgment on the part of various officials, and in some cases, actions verged on a breach of public trust. It also mentioned “collusive behavior on the part of certain individuals.”

The other panel, however, headed by B.K. Chaturvedi, emphatically attacked the theory that the deal involved any financial loss to the treasury. It said only that the agreement with Devas had “several weaknesses” and “financial and strategic gaps.”

Antrix signed the agreement with Devas in January 2005 during Nair’s tenure. It required ISRO to lease 90% of the transponder capacity on its two future S-band satellites to Devas for $264 million for a span of 12 years.

In 2010, government auditors said ISRO’s price for the S-band capacity was set without competitive bidding and was far below market value.

In February 2011, the prime minister’s office issued a statement that no decision was taken by the government in the allocation of the S-band and ordered an investigation to determine whether ISRO officials had deliberately misled the nation’s cabinet into sanctioning the deal without knowing its terms. The government terminated the deal, causing Devas to file for arbitration with an international court in London to resolve the breach of contract.

The prime minister formed the Chatruvedi committee on Feb. 10, 2011, and the Sinha panel on May 31, 2011, to study the auditor’s report and assess responsibility.

On Feb. 4, 2012, ISRO uploaded to its website the conclusions and recommendations of the probe teams. However, neither report says there was any quid pro quo or exchange of favors between the named scientists and Devas.

Nair has termed the report “one-sided” and “not based on all facts.” He blamed his successor at ISRO, K. Radhakrishnan, for misrepresenting the facts. “He [Radhakrishnan] has misled the government on the whole issue. He is the key person who worked behind this; he misled and miscommunicated to the government,” Nair said.

Radhakrishnan, however, said “there is nothing personal against anyone in this probe.”

The prime minister’s office, which is in charge of the space administration, came down heavily on Nair. “Madhavan Nair misled the nation, saying that he was not given an opportunity to explain. But the Pratyush Sinha committee report clearly mentions that there was a personal hearing of Madhavan Nair and he was heard. Therefore, the principle of natural justice has been followed in his case. The other scientists also were given the questionnaire and they have replied,” V. Narayanasamy, junior minister in the prime minister’s office, said Feb. 6.

On the recommendation of the Sinha report for action against him and the three others, Nair said, “A committee, headed by a former Indian police service officer [Sinha], does not understand space business. Its conclusions are distorted. Its report, too, should have been released in full to ascertain the basis of its recommendations for action against us.”

On Jan. 13, based on the panel reports, which were made public Feb. 4, the government forced Nair and three of his colleagues — A. Bhaskaranarayana, former director of ISRO’s satcom and former scientific secretary to the agency; K.R. Sridharaurthi, former managing director of Antrix; and K.N. Shankara, the former director of ISRO’s Satellite Center and chair of the committee that evaluated the Devas proposal — to immediately resign all positions and roles with ISRO. All three men already had retired.

ISRO spokesman S. Satish confirmed that Nair has been asked to give up his national professorship at ISRO. Nair was also chairman of a committee spearheading the regional transport aircraft project.

The 68-year-old architect of India’s Chandrayaan-1 Moon mission and one of the country’s most respected and decorated scientists, Nair was disbarred by India’s space ministry. It has been a precipitous fall from grace; just two years ago he received Padma Vibhushan, the country’s second-highest civilian honor.

Incensed over the government’s decision, Nair lashed out, saying ISRO has “gone to the dogs.”

“I have kept quiet all these days because of my respect for ISRO,” he said. “You look at ISRO’s program for the last two years, that will speak volumes about where we stand.”

Several scientists at ISRO agree that the controversy has blotted the pristine image of the space agency and Indian space scientists.

However, Narendra Bhandari a senior scientist at ISRO’s Physical Research Laboratory in Ahmedabad, hopes the scandal will not affect India’s mission to Mars, which is set to launch in the next two years.

India also is planning to send another mission to the Moon in 2014 and to put a human in space by 2020. “2012 is crucial for us when we are planning to launch our first microwave satellite and test fly our launcher using homemade cryogenic engines,” says spokesman Satish.

Nair was asked in an interview by India Today what the effect of the controversy would be on ISRO’s image globally. “Terrible,” he replied. “Devas has many prominent foreign partners and they have approached the International Court of Arbitration. ISRO’s or Antrix’s image of being incapable of carrying out contracts is not good for our space program.”