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
The AG in Bihar, who represents the CAG in the state, indeed put on record excessive withdrawals from time to time in the AHD (apart from a whole lot of other departments) in its reports for 1990-91, 1991-92, 1992-93 and 1993-94, submitted to the Bihar Assembly during May-September 1995.
But instead of flagging them for fraud, the AG’s reports recommended that the government ‘regularise’ those excess withdrawals. Evidently, spending more than what’s budgeted is quite common with all state governments. More shockingly, even in its audit reports for 1994-95 and 1995- 96, submitted after the AHD scam had come to light, the AG recommended yet again that the excess withdrawals be regularised.
Appearing as a prosecution witness, the then principal accountant general Pramod Kumar Singh (pw No 211) admitted that the AG had never pointed out that the excess withdrawals could be fraudulent or unauthorised, but had instead recommended that they be regularised under Article 205 of the Constitution.
Who else could have raised an alarm? For one, the Public Accounts Committee (PAC) of the Bihar Assembly. A constitutional body headed always by an Opposition leader, the PAC must scrutinise, critique and, if found okay, endorse every CAG report. But for all the years that Judge Singh said Lalu was presiding over a scam, not once did the PAC suggest that the excess withdrawals need to be investigated for likely fraud. And as a member of the PAC, the AG had a second chance with every report to flag the fraud. Which he never did.
Additional finance commissioner Prasad, too, told the trial judge that it was only in January 1996 that the Finance Department first came to suspect fraud in the excess AHD withdrawal in Chaibasa. So here’s the question. If Khare and the Finance Department discovered the ongoing embezzlement that late, if neither the CAG nor the PAC ever wised up to the fraud, and if there is no paper trail to show it was brought to the CM’s attention before 25 January 1996, how is Lalu guilty of scuttling a probe?
Did the CBI ask AG officials why they never flagged the fraud over the years? Did it ask the MLAs who had been members of the PAC from time to time why they did not detect the fraud despite poring over the AG’s reports? Did it grill Khare and other deputy commissioners on why they slept through the fraud? Did the trial judge ever suggest to the CBI that these questions need to be asked? The answer is no for all the above.
Why weren’t the successive deputy commissioners or AG officials made accused in the case? During his cross-examination, Prasad stunned the courtroom by disclosing that when the probe team (constituted on the then chief secretary’s order) visited the AG’s office at Ranchi (then in Bihar) on 29 January, a “senior AG official” asked him to tell Dubey to back off the case. Yet, the CBI did not investigate that very serious allegation. Dubey testified that the CBI did not ask him the name of that official.
• What about the Money? •
So if Lalu connived with the scammers who looted the AHD for years, wasn’t he paid off in return for his protection? Let’s go back to the Patna HC order of March 1996 that had asked the CBI to inquire into the frauds. That order, given on a petition by BJP leader Sushil Modi, also ordered the income-tax department to investigate the wealth of all those involved in the graft. This would later include Lalu.
Accordingly, a case was brought against Lalu on 19 August 1998 under the Prevention of Corruption Act for owning assets disproportionate to his known income, known in short as the ‘DA case’. In that case, the CBI claimed that Lalu had accumulated unaccounted wealth of 46 lakh. Even though Rabri, who had by then become CM, had never been accused in the AHD cases, the CBI chargesheeted her, too, in the case.
Over the next few months, sleuths fine-combed property deeds at registration offices around the country looking for benami (indirect) property purchases in the name of Rabri, her daughters and a son-in-law. None was found. They hunted, unsuccessfully, for purchases of corporate shares Lalu and his family may have made on the sly.
When an MP from a rival party sensationally claimed in Parliament that Lalu had stashed away his dirty money in Swiss bank accounts, the Interpol was pressed into service. That netted nothing. Rabri’s official residence at Patna was raided. Land at their ancestral house in Saran district was dug up. Zilch again. The DA case was based on an FIR by a CBI DSP, who was said to be its first informant. But when he was called to testify, he said he had no idea how the case arose.
The Yadavs won that case in 2006. By this time, Lalu’s arch-rival, Nitish Kumar, had become CM. Nitish’s government approached the Patna HC against Lalu’s acquittal in the DA case. But the HC dismissed its plea saying it had no locus standi in the case. The one with the locus, the CBI, chose not to contest the acquittal.
And with good reason. Patna District Judge Munni Lal Paswan, who ruled in Lalu’s favour, slammed the CBI and the income-tax authorities for targeting him. The judge said the CBI was evidently biased against Lalu. In his judgment, he wrote that the inception of the DA case was “shrouded in mystery”. Why would the judge say that?
• Agency with a Vengeance? •
Bloodhound Former CBI
lead investigator UN BiswasAllegations of the CBI’s bias against Lalu emerged at the time he was first arrested as an accused. At 5 pm on 29 July 1997, the apex court vacated a stay it had granted four days earlier on Lalu’s arrest. With his last option exhausted, Lalu announced he would surrender before a judge the next day at 11 am. Lalu’s lawyers would later allege both in the DA and the Chaibasa AHD trials that the CBI had other designs as its main investigator, an official named UN Biswas, wanted to humiliate Lalu.
According to the facts admitted in the DA trial, on 30 July 1997, a top CBI official in Patna approached one of the two HC judges who had been monitoring the CBI’s probe of the AHD cases. He sought the judge’s permission to seek the army’s help in arresting Lalu later that day. Three hours later, the official turned up at the army’s Bihar Regimental Centre (BRC) at Danapur, 14 km from Patna, claiming he had “oral orders” from the HC judge to requisition a platoon.
Brig RP Nautiyal was in charge at the BRC. He telephoned the HC judge and asked if he had indeed given such an oral order. The judge said no. Nautiyal then phoned his headquarters in New Delhi and was told the army would not be involved in Lalu’s arrest. Nautiyal deposed as a defence witness in both the DA and the AHD trials, and testified that the CBI officials had indeed lied to him about the HC judge’s order. CBI SP VS Kaumudi was identified as the officer who gave Nautiyal the written request.
After this came to light, there was an uproar in Parliament. The then Union home minister Indrajit Gupta, the late communist leader, ordered an inquiry. It was led by an IPS officer named AP Durai, who was then the CRPF DG. Durai found that on the evening of 29 July, UN Biswas had sent a fax from New Delhi to the CBI’s AHD wing in Patna, informing them that a CBI official named Rakesh Asthana was being sent to Patna the next morning to arrest Lalu.
Shortly, he sent a second fax saying that CBI DSP DN Biswas should arrest Lalu as Asthana’s flight would land only after 11 am. Lalu’s lawyers contended that UN Biswas wanted to make a show of Lalu’s arrest — why else would he want to fly in an officer from New Delhi for the arrest? The ‘Durai Report’ indicted UN Biswas for his bias against Lalu and recommended that the government take action against the CBI officer.
The government then issued UN Biswas a showcause notice. The Central Administrative Tribunal (CAT), which adjudicates on service matters, dismissed Biswas’ plea against the government notice. Eventually, the Calcutta HC gave him relief on the technical ground that Durai had not heard him before arriving at his findings.
On 26 May 1998, N Srinivasan, an official of the Centre’s Department of Personnel, recommended that the government move the SC against the Calcutta HC order. The file went to the then prime minister Atal Bihari Vajpayee, whose government’s survival depended on the backing of Lalu’s arch-rival Nitish. The matter was buried. Durai, too, testified at the AHD trial claiming he had found the CBI attitude towards Lalu vindictive. But in his judgment of 30 September 2013, Judge Singh refused to consider the possibility that the CBI may have been biased against Lalu.
• The King and the Kingpin •
In 1993, the year he was to retire, AHD regional director at Ranchi, SB Sinha — the ‘kingpin’ — applied for an extension of his service. In December, Congress leader Jagannath Mishra wrote to Lalu requesting a two-year extension for Sinha in view of his record and the fact that a number of the top posts in AHD were vacant. Lalu asked that letter to be placed on a file. Subsequently, four AHD officials and two ministers endorsed the proposal. A report by the Vigilance Department said it had no cases against Sinha. When the file was brought to him, Lalu extended Sinha’s employment by a year.
The CBI cited that grant of extension as evidence of Lalu’s involvement in the scam. Last week, on 25 October, Lalu’s lawyer Surendra Singh asked a Jharkhand HC judge hearing Lalu’s bail plea: “Why would my client reduce the extension sought to one year if he was Sinha’s co-conspirator?” At the trial, the defence team claimed Lalu had extended the service of at least 100 officials about to retire during that time.
The CBI could have still made that argument fly had it found other evidence to show Sinha and Lalu had been thick for years. But the only evidence it offered were testimonies of two of the accused who had turned approvers. One of them was RK Das, then the administrative head of AHD at Chaibasa. Das claimed that in 1990, Sinha called him to his house and, after he had waited in the drawing room for a few minutes, he saw Lalu emerge from Sinha’s bedroom with a confidant, a veterinary doctor-turned-MLA named RK Rana. Both Lalu and Rana carried plastic packets containing money, Das said. Sinha, too, came out behind them and saw them off. When he returned to the drawing room, Das claimed, Sinha told him that he had just given Lalu Rs 5 lakh.
But the law says that in order for an approver’s claim to be accepted, it must be verified by an independent witness or evidence. This is not a mere technicality. After all, if an approver were to be pardoned by levelling charges against the co-accused, then there would be no stopping an accused from quickly turning an approver to save his skin. But the CBI could bring no independent witness to support Das’ claim. And Sinha has been dead.
Interestingly, Das had been made approver in all but one of a dozen-odd cases. After he told the AHD trial court he saw Lalu with Sinha’s money, the CBI made him an approver in the last case, too. The other testimony about Sinha paying off Lalu comes from another approver, a man named Dipesh Chandak, a private supplier for AHD who connived in siphoning off the money by providing fake receipts.
But even Chandak is on record at the trial testifying that he had never met Lalu in his life and had, therefore, never seen Sinha pay the CM. Chandak claimed that Sinha had told him that he (Sinha) was paying Lalu money from the embezzled sums. Once again, there is no independent verification of this claim, not even from someone who may have overheard Sinha thus confessing to Chandak.
Indeed, it is shocking that the CBI sought to make Chandak an approver and the court allowed it. In the Chaibasa case, Chandak is held responsible for extracting Rs 30 crore of the Rs 37 crore. As noted above, not a single rupee of that has been found with Lalu, who is now in prison. As an approver in the case, Chandak stands pardoned, as does Das.
Oh, wait. The CBI offered a piece of sensational evidence to show Sinha had indeed been very close to Lalu. In 1992, five daughters of Lalu and Rabri were accepted as hostellers at the Bishop Westcott Girls School at Ranchi. The CBI filed their admission forms that Lalu had signed as the girls’ father. On it, he named two people who would visit his daughters from time to time to check on their wellbeing. One of them was Sinha.
But the defence blasted a hole through that evidence. Sinha’s name was written after scratching out another name. The CBI’s investigating officer admitted during the cross-examination that he had not ascertained if the handwriting in which Sinha’s name had been added was indeed Lalu’s. Lalu’s lawyers also requisitioned the visitors’ register at the school. It was proved that not once had Sinha visited the girls there. Those who indeed visited the schoolgirls at their hostel were two of Lalu’s family associates named Poonam Sinha and Sanjay Kumar, who both appeared as defence witnesses.
Was the admission form with Sinha’s name a forgery? Or did Lalu indeed write Sinha’s name on it but lied in the court about it? We would never know. Perplexingly, the trial judge did not order that the admission form be sent for forensic examination to establish which of the two — the CBI or Lalu — was lying. A chance to punish perjury was thus lost.
• The Case of the Main Accused •
Another evidence accepted as proof of Lalu’s involvement in the conspiracy relates to his decision to stay the transfer of accused No 1, BN Sharma, who was the animal husbandry officer at Chaibasa. Sharma had withdrawn Rs 50.56 lakh on a single day in March 1993. Because this sum was large, he was transferred in July on “administrative grounds”. But on 16 July, an Opposition MLA, Rajo Singh, wrote to Lalu seeking a stay on the transfer. Lalu complied the next day.
In his order convicting Lalu, Judge Singh accepted the CBI’s argument that at a meeting with officials on 7 June 1993, Lalu had been informed of the excess withdrawal by Sharma in March. But that claim, too, was contradicted by the testimony of the then treasury director, Anjani Kumar Singh (pw No 109). This officer testified that, among others, various ministers, departmental secretaries, district collectors and the finance commissioner attended the day long meeting that discussed excess withdrawals by all departments in March, the last month of the financial year 1992-93.
Lalu instructed the bureaucracy to investigate if all the excess withdrawals of March were in line with established procedures that permit such last-minute rush to use up the yearly budget. Singh also testified that the excess withdrawal by Sharma was not discussed and the likelihood of fraudulence never came up at the meeting.
Surprisingly, there are no minutes of such an important meeting. Even then, the CBIcould have spoken to numerous other participants to find out if the CM (and the treasury director, too) was lying that he wasn’t informed of the excess withdrawal made by Sharma. But the CBI made no such effort.
• The trial and errors •
Interestingly, the trial judge did not even seek to directly establish Lalu’s culpability in the specific crime of fraudulent withdrawal of Rs 37.7 crore, for which the CBI brought forward no evidence. The judge instead held, as noted earlier, that circumstantial evidence suggested Lalu had been thick with the scammers for years. That was why, the judge held, that soon after becoming CM in 1990, Lalu had rejected the then AHD minister’s suggestion for a CBI inquiry into an earlier scam.
That case related to 1988, two years before Lalu became the CM, and involved a payment of Rs 26,000 towards transportation of cattle to faraway villages. An inquiry had revealed the registration numbers of the trucks that supposedly ferried the animals actually belonged to scooters, jeeps and tankers. The CBI says that soon after he became CM, Lalu refused to hand the case over to the CBI as his then AHD minister demanded. This, the CBI said, proves he was hand-in- glove with the fraudsters. But then, state officials already investigating that case subsequently closed it. Did Lalu influence that probe? Hard to say now, since the CBI did not investigate if that probe was compromised or not.
In yet another case from 1986-87, the AHD was accused of having bought overpriced microscopes and generators. After Lalu became CM, he ordered an FIR in the case. Congress leader Jagannath Mishra then wrote to him asking that only those officials who had been members of the AHD’s purchase committee be probed and not the others. Lalu forwarded that letter to the Vigilance Commission that led the probe. The CBI claimed that by forwarding Mishra’s letter, Lalu sought to scuttle that probe.
But the then Vigilance DG Gajendra Narayan, IG DN Ojha and SP Kamlesh Kumar testified that Lalu never sought to influence that probe. Still, the AHD trial court held Lalu culpable in that case as the Vigilance Commission sought an opinion on Mishra’s letter directly from the state’s AG and not through proper channels. Ironically, the inquiry resulted into the filing of criminal charges against nine alleged conspirators, including IAS officers. That case is still under trial.
The strangest charge against Lalu relates to the discovery of six fake letters from Dumka district authorising withdrawals of Rs 10 lakh each. It was claimed that the letters, which had been intercepted before they could be put to illegal use, had been sent by a secret source. But the then Vigilance DG DN Sahay told the trial judge that Lalu had given him those fake letters and asked him to investigate. Why would the CM do that if he was a conspirator is a question the trial court neither asked nor answered.
Shockingly, the CBI never bothered to go deeper into the fodder scam, which had admittedly been run since the late 1970s. As early as 3 February 1996, the then finance commissioner, Dubey, wrote in a letter to all deputy commissioners that an analysis had found that such excess withdrawals had been carried out from 1980-81. “So it is necessary that detailed accounts be prepared from 1980-81 till January 1996 listing the excess withdrawals in the districts concerned.” Even the Patna HC order of March 1996, which entrusted the investigation to the CBI, directed the agency to probe the AHD accounts from the early 1980s to unearth the fodder scam.
• Charge against the Judge •
Earlier this year, Lalu approached the Jharkhand HC seeking that the case be moved out of Judge Singh’s court. He cited the fact that Singh’s sister was married to a man whose cousin, PK Shahi, is a leader of Nitish’s party, the JD(U) and is Bihar’s education minister. Lalu even submitted a picture of Nitish with Singh’s sister and her mother-in-law. After the HC turned down his plea, so did the SC. At first though, CJI P Sathasivam, who headed the three-judge Bench hearing that petition, asked both Lalu and the prosecution to suggest an alternative judge’s name.
A rival politician from Bihar named Rajiv Ranjan aka Lallan Singh, also of the JD(U), deployed veteran SC lawyer Shanti Bhushan to argue against changing the judge. In May, Shahi had suffered a huge defeat at the hands of Prabhunath Singh of Lalu’s RJD in a bypoll to the Maharajganj Lok Sabha seat. Lalu sought to argue that Judge Singh might, therefore, be biased against him.
• Is Lalu Innocent Then? •
Lalu is at his weakest in arguing that he had never heard of financial wrongdoings in the AHD until the last week of January 1996, whereupon he promptly ordered criminal cases to be filed and the guilty to be arrested. From before he had become CM, questions about excess withdrawals and other suspicious activities at AHD were being constantly raised in the Bihar Assembly as well as in Parliament. Newspapers had for years reported on the continuing malfunctions in the AHD. So how could he have not known of them?
Judge Singh himself notes at length the innumerable times that the state government under Lalu, and on occasion, he directly, was questioned on or informed of possible wrongdoings. That is why it is astounding that the CBI did such a shoddy investigation and, instead of meticulously probing Lalu’s everyday role, sought to rely on the dubious testimonies of other accused by making them approvers.
It may well be that a professional and painstaking inquiry would have found enough material to indict the CM of the time. But to hang a man on ill-argued evidence is certainly bad for law, even if it may bring a political windfall for his rivals as one of the unintended consequences.
ajit@tehelka.com
