Okay, let's not spread rumours. You can get a brief history on coco island on wiki:
http://en.wikipedia.org/wiki/Coco_Island
And yes, wiki is not gospel truth. But so is not any politician's random comment. Here is another article that deals with coco island in more detail (the article is lengthy as it is on strategic significance of Andamans and not just Coco)
http://www.bharat-rakshak.com/MONITOR/ISSUE5-3/nanda.html
"In fact, as local historian Pandey asserts on the basis of his research, the Government of India did not even bother to know what exactly were the areas that comprised the Andaman and Nicobar Islands during the British rule. If he is to be believed, it is because of this serious lapse on independent India's part that Myanmar claimed and got some important parts of the pre-1947 Islands, which, significantly includes, believe it or not, the strategic Coco Islands, about which we will deal separately a little later. It may be noted here that when Muslim League, and this we have already discussed, was pressing the British for getting the Andaman and Nicobar islands for Pakistan, Myanmar (then Burma), too, had chipped in to lay her own claim on them (Bhasin, p- 195). But the British Government decided to ignore it and told the House of Commons that they had no comments to offer on the Burmese claim.
According to Pandey, Myanmar took possession of the Coco Islands in 1954. In fact, some senior naval officials that this writer interacted with Port Blair are of the same opinion that the Coco islands belonged to the Andamans and should not have been given to Myanmar. It may be noted that Myanmar had illegally occupied the Narkondam islands bordering the Cocos and it was only sometime in early seventies that the Indian navy recaptured it. It may also be noted that it was as late as 1987 that India bothered to conclude one Maritime boundaries Agreement with Myanmar."
This is (yet) another case of India's ruling class' indifference to its strategic concerns. And note the indifference has been there from independence till date. Sitting in Delhi, places like Andaman and Arunachal seem too far to them to bother.
My inference from wiki and this article is that both Burma and India were under the Britishers. For Andamans, they had made divisions between Brisith India and British Burma as per their convenience. When they left, there was an obvious confusion on who gets what. Some of these islands were totally uninhabited making the job worse.
And there is no denying that defence was not Nehru's strong point. He was too much into his pacifist world view to think about defence in a strategic way. Could he have dealt with Andaman Islands in a better way? Of course yes! Did he cede Indian sovereignity over an island knowingly to a foreign power. Of course not!
Coming to Fernandes, I have full respect for him for his tenure as defence minister. He was the first minister who genuinely felt for the defence forces and had a defence policy to speak of (travelled to Siachen and lots of other forward posts, fired 2 officials who were not clearing snow scooters for Siachen troops, gave a fresh impetus to India's defence strategy and correctly pointed out the #1 threat as China). But you have to keep in mind that he is a politician, and one deeply opposed to Congress from way back in 70s. In this case, he just displayed foot in the mouth syndrome.
except our first ever romantic PM. (most of our contemporty PM’s look diabatic 
) He was Ladies man.. and ladies cant be wrong….
(His notorious act of inseminating notwithstanding.)