Prashant Bhushan said the CAG had also indicted the Chhattisgarh government in its 2011 report for wasting public money by signing this deal.
NGO Swaraj Abhiyan on Thursday accused the Raman Singh government in Chhattisgarh of inviting a "fraudulent" tender and paying a hefty commission of $1.57 million on the purchase of one AgustaWestland chopper in 2007.
A court-monitored investigation be conducted to probe the deal and find out those who took kickbacks, Swaraj Abhiyan leaders Prashant Bhushan and Yogendra Yadav demanded at a joint press conference in Delhi.
"The Central Bureau of Investigation and the Enforcement Directorate are toys controlled by the central government. A former Supreme Court judge should be appointed to investigate the matter," Mr Yadav said.
As per documents shown by them, the state civil aviation department prepared a note on the need for a VIP helicopter on December 19, 2006.
Within days, they said, a meeting was held between state government officials and representatives of OSS (service provider of AgustaWestland in India), where the latter gave a presentation on the A-109 chopper model of the company.
The Swaraj Abhiyan leaders said the state government then approached AgustaWestland directly, which said it would take two years to deliver the chopper and suggested (the government) to purchase it from its Hong Kong-based dealer Sharp Ocean, which had already quoted a price of $6.31 million through its subsidiary OSS.
Mr Bhushan and Mr Yadav said the price included a "premium" of $2,00,000.
They said the government sent a team to Hong Kong to negotiate the premium amount but in vain after which the state government floated a "global tender" calling for suppliers who could provide 'Agusta 109 Power E Helicopter'.
"The tender itself was fraudulent. The government mentioned the name of the product and company in the tender notification itself. No attempt was made to find out different manufacturers. There are at least 10 similar helicopter manufacturers who supply at cheaper rate than AgustaWestland. Why did the government favour it?" Mr Bhushan asked.
Interestingly, companies that are said to have bid for the tender were AgustaWestland, Sharp Ocean (Hong Kong dealer of AgustaWestland) and OSS (service provider of AgustaWestland and subsidiary of Sharp Ocean), which quoted the lowest price of $ 6.57 million. The tender was finally awarded to OSS.
"It is important to note that the initial price quoted by OSS was 6.31 million. However, the tender was awarded to it at $6.57 million, which also included commission of $1.57 million (around 30 percent of the deal). Who all shared the premium amount which was paid to AgustaWestland? The Comptroller and Auditor General had also indicted the Chhattisgarh government in its 2011 report for wasting public money by signing this deal," Mr Bhushan, a senior Supreme Court lawyer, added.
The then United Progressive Alliance government had signed a deal with the AgustaWestland company to buy 12 VVIP choppers in 2010, which was cancelled in January 2013.
The deal came into public focus again after an Italian court referred to Congress president Sonia Gandhi and the then prime minister Manmohan Singh, among others, in its judgment last month but gave no details of any wrongdoing by the two leaders.