The case (that wasn’t) against Lalu Yadav

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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 Yadav guilty 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.

• A Scam is Detected •

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 •

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.

• And How It Happened •

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 CBI produced 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 CBI within 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.
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? •

Allegations 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 CBI could 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