As an IAF probe gave clean chit to its personnel, the defence ministry has initiated a high-level inquiry to find out whether mishandling of a sensitive file could have vitiated a proposed multibillion dollar fighter deal.
The "comprehensive" defence ministry probe will be conducted by an additional secretary-rank official and the report is expected to be submitted to the defence minister by the month-end, sources said in New Delhi on Monday.
The defence ministry will ask all the stakeholders in the case to prove that the deal was not affected in any way by the loss of the secret file, which was recovered from a roadside in South Delhi.
There is a possibility of the proposed Medium-Multirole Combat Aircraft (M-MRCA) deal being cancelled "partially" or "fully" if the tendering process is found to have been affected, they added.
The incident had occured on December 22 last year when the secret file was spotted by a security guard outside the Bharat Electronic Limited (BEL) guest house in Khelgaon and handed it over to the IAF authorities.
The IAF had set up a Court of Inquiry (CoI), whose report was submitted to the ministry on Monday. The CoI is understood to have given a clean chit to its own officials.
Last week, defence minister A K Antony had said that the ministry would take further action into the case after receiving the IAF report.
Earlier, downplaying the incident, Air Chief Marshal P V Naik had said the file didn't have any "earth-shaking" content and it hardly had anything to do peripherally with the M-MRCA and was not going to affect the tender.