The former Bihar CM’s conviction in the fodder scam is based on the flimsiest, distorted and even non-existent evidence. Shockingly, the CBI failed to pursue real leads begging to be probed, and instead protected bureaucrats, auditors and embezzlers who should have been nailed for the crime. Inexplicably, the courts failed to push it to the correct path, says Ajit Sahi
It is better that 10 guilty persons escape than one innocent suffer
Sir William Blackstone,
British jurist, writing in 1765
If only politicians had the patience for details. There has been much hand-wringing among them since the Supreme Court ruled in July that an MP or an MLA/MLC would be unseated immediately upon conviction in a criminal case. Infamous attempts have been made by the men in white to write a new law and even bring an ordinance to restore status quo ante that allowed an elected representative to continue in office until an appeal against his conviction was disposed off.
The parliamentarians can, however, spare themselves the embarrassment of such clumsy acts if only they take the pains to read a 30 September ruling by a trial judge in faraway
Jharkhand, who has found former Bihar chief minister
Lalu Prasad Yadavguilty of patronising an intricate scheme of corruption that ran unchecked for years. As television news flashed those findings without bothering to dive into the 568-page judgment, millions of citizens wearied from decades of corruption felt vindicated by Lalu’s comeuppance.
Lalu’s conviction in one of the 54 cases of the ‘fodder scam’, the popular name given to widespread embezzlement of government funds in the early-to-mid-1990s in the purchase of medicines and fodder for the livestock of the poor, is no small irony for him. His rule of Bihar for 15 years is remembered less for the immense and irreversible empowerment his socialist politics brought to the backward castes and more for the utter lawlessness and crime it spawned, allowed and even patronised. That assessment only grew starker in comparison with the reign of his arch-rival, Chief Minister Nitish Kumar, who has ruled the state since 2005 and is credited with having vastly improved the state’s law and order.
Be that as it may, the imperatives of justice are clear beyond doubt, as the ‘Blackstone Ratio’, quoted above, enumerates. It is not this correspondent’s claim that Lalu bears no culpability in the massive fodder scam, for that can be revealed only by a thorough investigation of thousands of documents and the questioning of hundreds, which India’s premier sleuthing agency, the Central Bureau of Investigation (
CBI), failed to carry out.
But the devil in the details of the judgment is revealed by its in-depth reading as well as of courtroom testimonies, cross-examinations of prosecution and defence witnesses, and, not the least, the documents brought to the court. It leads to but one inference, that the case against Lalu is untenable. In times to come, this ruling would certainly bolster the politicians who make their case against unseating legislators immediately upon conviction in a criminal case by pointing at the record of trial courts in delivering justice.
Following are the ‘facts’ of the fodder scam as argued by the
CBI and accepted by Pravas Kumar Singh, Special Judge IV,
CBI cases (AHD), who heard the case. (The AHD stands for the Animal Husbandry Department from where crores of rupees were siphoned off.)
In the telling of the
CBI, it all began in January 1996 when Amit Khare, an IAS officer posted as deputy commissioner of Chaibasa in the then south Bihar, reported to the Finance Department bosses in state capital, Patna, about withdrawals from the AHD over the budget during November- December 1995. (Chaibasa is the headquarters of the West Singhbhum district, now in
Jharkhand.) Following orders from Patna, Khare raided AHD offices and seized documents that helped unearth a web of corruption based on fake purchase orders and receipts, for medicines and fodder never purchased. For the financial year of April 1994-March 1995, the scam was estimated at Rs 37.7 crore in Chaibasa.
This spurred further investigation across Bihar. Within days, it was found that as much as nearly 250 crore rupees may have been stolen from the AHD in 1994-95 in six districts, including Chaibasa.
In February 1996, Bihar Police filed 41 FIRs for the fraud. Arrests of AHD officials and the suppliers were ordered. But on a public lawsuit by Opposition leader Sushil Kumar Modi of the BJP, the Patna High Court quashed the FIRs and ordered the
CBI to exclusively investigate the fodder scam. When the Bihar government appealed, the SC restored the 41 FIRs but said the
CBI and not the police would hold the probe.
Eventually, the
CBI filed 13 more FIRs. It was estimated that as much as Rs 900 crore had been stolen from the AHD since 1977. The agency identified Shyam Bihari Sinha, then the AHD regional director at Ranchi, as the scam’s ‘kingpin’. It said Sinha crafted the elaborate scheme and co-opted the others by sharing the spoils. (Sinha passed away in 1998.)
On 24 July 1997, the
CBI filed its chargesheet in the Chaibasa case. The most sensational name in that list was that of Lalu, who quit as CM the next day and dramatically installed his homemaker wife,
Rabri Devi, in the job. The
CBI also named several other politicians, their hangers-on, bureaucrats and businessmen, and even some of their wives, as accused. Lalu, Bihar’s CM since 1990, was accused of being the patron of the ‘AHD mafia’, as Judge Singh describes them in his ruling of 30 September last.
Lalu moved the Patna HC against his implication in the case. He lost the plea. The SC upheld the HC order. Denied relief, the self-acclaimed messiah of social justice surrendered on charges of corruption five days later, on 30 July 1997. He would spend nearly four months in prison before being bailed. (Lalu would later be arrested twice again in two other AHD cases, and then bailed in both.) The trial began in 2000 and was moved to
Jharkhand after that state was carved out from south Bihar in November of that year.
• The People vs Lalu Yadav •
Stressing that it is impossible to get direct evidence of the involvement of bigwigs in such crimes, Judge Singh said circumstantial evidence proved Lalu’s complicity in the fraud beyond doubt. The judge cited the following as clinchers:
• Lalu did not allow the
CBI to probe an earlier AHD scam from the 1980s wherein fake receipts were used to claim money spent on allegedly transporting animals as well as in the purchase of microscopes and other items. This, the judge held, emboldened the scammers to later mount the audacious fodder scam
• Lalu extended the service of ‘kingpin’ Sinha by a year shortly before his retirement in 1993. This allowed Sinha to continue with the embezzlement plan, leading to the fraudulent withdrawal of Rs 37.7 crore from Chaibasa during 1994-95
• Lalu also extended the service of RK Das, then administrative officer at Chaibasa, before his retirement. (The HC later overturned that extension.) Das later confessed to his involvement in the scam and turned an approver. In court, Das testified he saw Lalu leave Sinha’s bedroom in 1990 carrying bundles of cash. Das is the only witness to claim he saw Lalu with money
• Lalu flouted established service norms in staying the transfer in 1993 of BN Sharma, then the district animal husbandry officer in Chaibasa, who was later directly responsible for fraudulent withdrawals. And Lalu did that despite being informed that Sharma was transferred because he had withdrawn 50.56 lakh on a single day. The judge said Lalu’s action allowed Sharma to carry out further embezzlement. Sharma was accused No 1 in the Chaibasa case
• Lalu repeatedly ignored communication from officials of the
Comptroller and Auditor General (CAG), the autonomous statutory body tasked with auditing Central and state government accounts with regional offices in every state, about “excessive withdrawals”
• When a top bureaucrat informed Lalu of the scam on 31 January 1996, he tried to delay action by asking for a week-long inquiry. Only when the bureaucrat insisted that no more inquiry was needed and action should be ordered immediately did Lalu reluctantly order the seizures and arrests
• The Faux Whistleblower •
Whistleblower? Former
Chaibasa DC Amit Khare
Let’s start with Khare, the “crusading” IAS officer who is credited with exposing the scam. After Judge Singh found Lalu guilty, reporters scurried to Khare to hear him say that justice had at last been done. But who had tipped Khare in the first place to raid the AHD offices? Appearing as a prosecution witness, Khare (PW No 105) admitted in his cross-examination by Lalu’s lawyers that a fax from the Finance Department sent to him on 19 January 1996 first alerted him to excess withdrawals from the AHD in the district.
Khare’s admission is stunning, given that as the Chaibasa DC, he was signing off on departmental expenses, including the AHD’s. As per established norms, Khare was duty-bound to send under his signature the detailed expense statements for every department to the CAG every month. So, did he ever inquire into the excess AHD withdrawal before receiving that fax? Incredibly, neither the
CBI nor the judge thought it fit to ask him.
Not that the judge needed the defence to get Khare to confess. The court had in its possession a letter that Khare wrote admitting as much. Writing to Bihar’s Finance Commissioner on 27 January 1996, Khare wrote: “… I am to state that a Fax Message No 3/AFC(E) dated 19/1/96 was received from the Additional Finance Commissioner asking for details of drawals (sic) relating to Animal Husbandry, Dairy and Fisheries during November ’95 and December ’95.” The letter goes on to say that in just those two months alone, as much as nearly Rs 20 crore had been withdrawn, which was far in excess of the budgeted allocation for the entire year.
Khare further wrote: “In view of the extraordinary heavy drawals by the AHD… an enquiry was started by me today 27.1.96 morning in which it was revealed that… there has been a drawal of Rs 59.23 crore from 1.4.95 to 31.12.95.” He wrote that “a sample check of bills of December ’95” revealed that many of the companies that had supplied the goods against those purchases, “do not seem to be registered under sales tax”, which is a mandatory pre-requisite for any government department to do business with a private entity.
“In almost all the cases,” wrote Khare, “the bills of heavy amount have been drawn by the District Animal Husbandry Officer, Chaibasa… From the perusal of the bills, it appears that knowingly the bill amounts have been kept below 10 lac, though these bills were passed the same date… Most of the supplies appear to be bogus as nowhere the truck no. is entered on the supplier’s bills.” A subordinate he sent to the office of the District Animal Husbandry Officer found that “all the officers have fled and the Head Assistant and Nazir are also missing”. According to the details he furnished, as much as Rs 16.3 crore had been withdrawn in September 1996 and Rs 13.2 crore in October 1996 from AHD Chaibasa.
As the first gatekeeper, Khare should have been the first to act. But he woke up to it only after the HQ alerted him. Indeed, Khare admitted in his cross-examination that he filed the FIR in the Chaibasa case only after the Finance Department bosses in Patna asked him to do so on 31 January 1996 (the instruction, as we see later, had emerged from the CM’s order). Khare filed the FIR only on 20 February after repeated reminders — a delay of 20 days that remains unexplained. Ordinarily, that would have placed Khare in the list of suspects. Instead, he was hailed as a whistleblower and turned into a star witness.
Interestingly, although the fodder scam was splashed in newspapers across the country right after the CM ordered the arrests, and hogged the headlines for weeks, Khare claimed in his cross-examination that he didn’t know Lalu had ordered the filing of the cases. So much for the sharp officer who unearthed the scam.
Indeed, it wasn’t just Khare who slept through years of embezzlement. The deputy commissioner of Gumla, an IAS officer named Deepak Kumar Singh, wrote on 30 January to the finance commissioner’s office that “it appears that financial irregularities have been certainly committed in withdrawals in 1994-95… On just one day, 30 September 1995, an amount of Rs 98,00,000 had been withdrawn,” he wrote. Similar findings were reported from the deputy commissioner in Ranchi district.
Who was the Finance Department officer in Patna who sent the fax to Khare alerting him first? It was an IAS officer named S Vijayaraghavan, who was then posted as additional finance commissioner (Expenditure). According to a detailed note he later prepared, an unnamed official of the AG’s office, an autonomous constitutional body that vets the government’s account, telephoned him about excess withdrawals from the AHD in Chaibasa in November-December 1995.
Already, for the past few months, the AG’s office had been sending to the state government details of the withdrawals from the AHD during that current financial year. (Such efficient behaviour from the AG was not borne out of a duty well performed but because, with a view to plugging runaway expenditure, the state’s Finance Department had asked the AG to keep supplying it with expenditure details of the various districts so that it could keep a watch.)
Strangely, the
CBI chose not to submit that fax to the court. It was left to Lalu’s lawyers to do so. Indeed, Vijayaraghavan’s fax had gone out not just to Khare but to all deputy commissioners across Bihar. On the same day, Vijayaraghavan had also written to AHD secretary saying that as much as Rs 116.5 crore had been withdrawn over and above the budgeted allocation from April to November 1995 across Bihar. That letter sought detailed accounts for November-December 1995 from the AHD before 22 January.
Confirmation of seemingly fraudulent excessive AHD withdrawals now poured in from deputy commissioners of more areas. The matter was then put up before then finance commissioner Vijay Shankar Dubey on 22 January. Two days later, Dubey wrote to his boss, Bihar’s then chief secretary AK Basak. On 25 January, Basak wrote back to Dubey saying that he had discussed the matter with the CM, who had asked him to constitute teams to probe the excess AHD withdrawals not just in Chaibasa but all across Bihar.
On the same day, the chief secretary constituted a team of Dubey, another additional finance commissioner, Shankar Prasad, and Bihar’s then development commissioner, Phoolchand Singh, who did a three-day preliminary investigation and found a massive scam in operation. On 31 January, their preliminary findings were brought before Lalu, who ordered the inquiry be completed in a week. When Dubey turned up at the CM’s office that afternoon and said it was time to act already, Lalu scratched out his instruction on the file and ordered that FIRs be filed immediately and the guilty arrested. In his testimony at the trial, Dubey claimed that for three days, Lalu pressed him for quick action and feedback.
Thus armed with Lalu’s directive, Dubey immediately wrote to deputy commissioners of Ranchi, Gumla, Lohardagga, Chaibasa, Jamshedpur and Dumka saying that it is “hoped that FIRs have been already filed” in the embezzlement of AHD monies. As seen above, Khare had not filed the FIR until 20 February.
So here’s a recap. An official in Patna is alerted to excess withdrawals from district offices of a government department across Bihar. He seeks a report from local officials who until then had no clue that funds were being embezzled right under their noses. Within six days of being told of it, the CM orders the police to file cases and make arrests. A year later, though, the CM ends up being a conspirator and an accused in the case he opened.
• What Lalu Actually Did •
Contrary to the conspiracy theory, literally, that Judge Singh has propounded, the
CBIproduced no sustainable evidence in court to prove the then CM’s involvement in the fodder scam. Instead, Lalu’s defence supplied evidence and testimonies that overwhelmingly suggest he acted swiftly and firmly against the evildoers as soon as their misdeeds were brought to his notice.
In a note that he sent to finance commissioner Dubey on 30 January 1996, additional finance commissioner Vijayaraghavan wrote (translating from Hindi): “It must be mentioned that the directions issued on how to deal with allotment letters hereon has been sent under instructions from the chief minister, and the order to stop further payments was sent after deliberations in the office of the development commissioner and on his instructions.” (For all his alacrity in responding to the scam, then development commissioner Phoolchand Singh, too, has been found guilty in the fodder scam and packed off to prison.)
Lalu’s role in ordering the probes and arrests is even clearer from a letter that AFC Shankar Prasad wrote on 1 February 1996. He wrote (translating from Hindi): “Excessive withdrawals have been made from the treasuries in Ranchi, Chaibasa, Jamshedpur, Gumla, Dumka and Lohardagga. In this respect, the following was presented before the CM through the chief secretary: that all treasury officers in the district concerned be immediately transferred because such a huge scam could not have been effected without their connivance. And when facts have been collected on how such huge amounts were withdrawn from the treasuries, the treasury officers be suspended.”
“On this proposal, the chief minister’s orders are appended.” And what did Lalu order? That the inquiry be completed as soon as possible and the guilty brought to the book. This letter by Prasad was written only a day after he and finance commissioner Dubey had met with the CM. The same day, Prasad also wrote to then Additional Secretary in the AHD, Indra Bhushan Pathak, asking him to immediately suspend seven officers of the AHD across the districts concerned, “and carry it out today as ordered by the CM”. Eventually, some 28 AHD officials would be suspended over the next two days.
A detailed six-page note that finance commissioner Dubey had written earlier on 24 February noted that in the three months of November-December 1995 and January 1996, Rs 30 crore had been withdrawn from just the Ranchi treasury for the purchase of medicines and fodder for animals whereas the budget for all of Bihar was Rs 3 crore. In that note, which he sent to the then chief secretary, AK Basak, Dubey specifically asked that Basak inform the CM about the entire story and seek his orders for an inquiry.
Writing back on this on 27 January, Basak wrote (translating from Hindi): “Discussed it with the CM. He wanted to know whether his order constituting an inquiry headed by the development commissioner and including the finance commissioner had been carried out or not. He has decided that this committee be given all the facts and all departments be ordered to extend their support to it. He has also said the recommendations of the committee should be submitted as soon as possible so that necessary action can be taken.”
“Accepting the finance commissioner’s recommendations, the CM has also ordered that excess withdrawals in other departments should also be probed. The CM has also said that he should have been informed right then about the finance department’s concerns of excess withdrawals.
“The CM has also ordered that every treasury be directed to send their full accounts to the AG’s office on time and that the finance secretary should himself probe every expenditure, and inform me of the findings through the chief secretary.”
“The CM recalled that in March 1993, there had been a discussion on excess withdrawals. It was also discussed upon in the Legislative Assembly. A test probe was also carried out on district and treasury officials. The wanted to know what follow-up action had been taken. He also said that in March 1995 he had ordered an analysis of the last-minute withdrawals. The Finance Department had probably collected some facts. He wanted to know if his orders had been carried out and what action was subsequently taken.”
Some enthusiasm to find the truth from someone who was allegedly involved in the crime he was ordering to investigate. Lalu’s lawyers asked a most important question both in the trial court and at the
Jharkhand HC, which last week rejected his plea for bail. If Lalu was neck-deep in the scam as the court has found, would he not have alerted the scammers and told them to destroy all the documents and other evidences instead of ordering widespread seizures and arrests of the accused? It is on record that the Bihar government handed over all the documents pertaining to the case to the
CBIwithin 24 hours of receiving its requisition. Why would it show such swiftness if Lalu was guilty?
• The Other Gatekeepers •
The
CBI claimed in the court that the CAG’s Bihar officials, who were based out of Ranchi at the time in undivided Bihar, had regularly alerted the state government about the excessive withdrawals. Judge Singh accepted that plea in ruling Lalu guilty. But the CAG records submitted in the court tell a different story.
