Fodder Scam
Encyclopedia
: चारा घोटाला, chārā ghoṭālā) was a corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
scandal that involved the embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....
of about from the government treasury
Treasury
A treasury is either*A government department related to finance and taxation.*A place where currency or precious items is/are kept....
of the eastern India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n state of Bihar
Bihar
Bihar is a state in eastern India. It is the 12th largest state in terms of geographical size at and 3rd largest by population. Almost 58% of Biharis are below the age of 25, which is the highest proportion in India....
. Among those implicated in the theft and arrested were then Chief Minister of Bihar, Laloo Prasad Yadav, as well as former Chief Minister, Jagannath Mishra
Jagannath Mishra
Dr. Jagannath Mishra is an Indian politician and a former Chief Minister of Bihar.-Early life:Jagannath Mishra was born in 1937 in Bihar. He was a professor Economics and had done PhD in the same field...
. The scandal led to the end of Laloo's reign as Chief Minister.
The theft spanned many years, and allegedly involved numerous Bihar state's administrative and elected officials across multiple administrations of the Indian National Congress
Indian National Congress
The Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
and the Janata Dal
Janata Dal
Janata Dal is an Indian political party which was formed through the merger of Janata Party factions, the Lok Dal, Congress, and the Jan Morcha led by V. P...
parties. The corruption scheme involved the fabrication of "vast herds of fictitious livestock" for which fodder, medicines and animal husbandry
Animal husbandry
Animal husbandry is the agricultural practice of breeding and raising livestock.- History :Animal husbandry has been practiced for thousands of years, since the first domestication of animals....
equipment was supposedly procured. Although the scandal broke in 1996, the theft had been in progress, and increased in size, for over two decades. Besides the magnitude and duration of the theft, the scam was and continues to be covered in Indian media due to the extensive nexus between tenured bureaucrats, elected politicians and businesspeople that it revealed, and as an example of the mafia raj
Mafia Raj
Mafia Raj refers to an economic and political situation in India where public goods, property and funds are controlled and systematically embezzled by a criminalized nexus of government officials, elected politicians, business interests and other entities Mafia Raj (Hindi-Urdu: माफ़िया राज, مافیا...
that has penetrated several state-run economic sectors in the country.
The scam
The scam had its origins in small-scale embezzlement by some government employees submitting false expense reports, which grew in magnitude and drew additional elements, such as politicians and businesses, over time, until a full-fledged mafia had formed. Jagannath MishraJagannath Mishra
Dr. Jagannath Mishra is an Indian politician and a former Chief Minister of Bihar.-Early life:Jagannath Mishra was born in 1937 in Bihar. He was a professor Economics and had done PhD in the same field...
, who served his first stint as the chief minister of Bihar in the mid-1970s, was the earliest chief minister
Chief Minister
A Chief Minister is the elected head of government of a sub-national state, provinces of Sri Lanka, Pakistan, notably a state of India, a territory of Australia or a British Overseas Territory that has attained self-government...
to be accused of knowing involvement in the scam.
In February 1985, the then Comptroller and Auditor General
Comptroller and Auditor General
Comptroller and auditor-general is the abbreviated title of a government official in a number of jurisdictions, including the UK, the Republic of Ireland, India, and China....
of India, T.N. Chaturvedi, took notice of delayed monthly account submissions by the Bihar state treasury and departments and wrote to the then Bihar chief minister, Chandrashekhar Singh, warning him that this could be indicative of temporary embezzlement. This initiated a continuous chain of closer scrutiny and warnings by Principal Accountant Generals (PAGs) and CAGs to the Bihar government across the tenures of multiple chief ministers (cutting across party affiliations), but the warnings were ignored in a manner that was suggestive of a pattern by extremely senior political and bureaucratic officials in the Bihar government. In 1992, Bidhu Bhushan Dvivedi, a police inspector with the state's anti-corruption vigilance unit submitted a report outlining the fodder scam and likely involvement at the chief ministerial level to the director general of the same vigilance unit, G. Narayan. In alleged reprisal, Dvivedi was transferred out of the vigilance unit to a different branch of the administration, and then suspended from his position. He was later to be a witness as corruption cases relating to the scam went to trial, and reinstated by order of the Jharkhand High Court
Jharkhand High Court
The Jharkhand High Court is one of the newest High Courts in India. It was established in 2000 under the Bihar Reorganisation Act, 2000, after the state of Jharkhand was carved out of the state of Bihar. The court has jurisdiction over Jharkhand state....
.
Exposure and investigation
Deputy Commissioner (India)
The deputy commissioner or district magistrate or district collector or district magistrate and collector is the head of the revenue administration of an Indian district. The DC is required to be an Indian Administrative Service officer who is in charge of governmental assets in his district of...
of West Singhbhum
West Singhbhum
West Singhbhum or Pashchimi Singhbhum is one of the 24 districts of Jharkhand state, India. It came into being in 1990, when the old Singhbhum district was bifurcated...
district, Amit Khare, acted on information to conduct a raid on the offices of the animal husbandry department in the town of Chaibasa
Chaibasa
Chaibasa is a city and a municipality in West Singhbhum district in the state of Jharkhand, India. Chaibsa is district headquarter of West Singhbhum district.- Geography :Chaibasa is located at...
in the district under his authority. The documents his team seized, and went public with, conclusively indicated large-scale embezzlement by an organized mafia of officials and businesspeople. Laloo ordered the constitution of a committee to probe the irregularities.
There were fears that state police, which is accountable to the state administration, and the probe committee would not investigate the case vigorously, and demands were raised to transfer the case to the Central Bureau of Investigation
Central Bureau of Investigation
The Central Bureau of Investigation is a government agency of India that serves as a criminal investigation body, national security agency and intelligence agency. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941...
(CBI), which is under federal rather than state jurisdiction. Allegations were also made that several of the probe committee members were themselves complicit in the scam. A public interest litigation
Public interest litigation
In Indian law, Public Interest Litigation OR जनहित याचिका means litigation for the protection of the public interest. It is litigation introduced in a court of law, not by the aggrieved party but by the court itself or by any other private party...
was filed with the Supreme Court of India
Supreme Court of India
The Supreme Court of India is the highest judicial forum and final court of appeal as established by Part V, Chapter IV of the Constitution of India...
, which led to the court's involvement, and based on the ultimate directions issued by the supreme court, on March 1996, the Bihar High Court ordered that the case be handed over to the CBI.
An inquiry by the CBI began and, within days, the CBI filed a submission to the High Court that Bihar officials and legislators were blocking access to documents that could reveal the existence of a politician-official-business mafia nexus at work. Some legislators of the Bihar Legislative Council
Vidhan Parishad
The Vidhan Parishad is the upper house in those states of India that have a bicameral legislature. , six states have a Legislative Council: Andhra Pradesh, Bihar, Jammu and Kashmir, Karnataka, Maharashtra, and Uttar Pradesh...
responded by claiming the court had been misinformed by the CBI and initiating a privilege motion
Privileged motion
A privileged motion is a motion in parliamentary procedure that is granted precedence over ordinary business because it concerns matters of great importance or urgency...
to discuss possible action against senior figures in the regional headquarters of the CBI, which could proceed similar to a contempt of court
Contempt of court
Contempt of court is a court order which, in the context of a court trial or hearing, declares a person or organization to have disobeyed or been disrespectful of the court's authority...
proceeding and result in stalling the investigation or even prosecution of the named CBI officials. However, U N Biswas, the regional CBI director, and the other officials tendered an unqualified apology to the Legislative Council, the privilege motion was dropped, and the CBI probe continued. As the investigation proceeded, the CBI unearthed linkages to the serving chief minister of Bihar, Laloo Prasad Yadav and, on May 10, 1997, made a formal request to the federally-appointed governor
Governor
A governor is a governing official, usually the executive of a non-sovereign level of government, ranking under the head of state...
of Bihar to prosecute Laloo (who is often referred by his first name in Indian media). On the same day, a businessman, Harish Khandelwal, who was one of the accused was found dead on train tracks with a note that stated that he was being coerced by the CBI to turn witness for the prosecution. The CBI rejected the charge and its local director, U N Biswas, kept the appeal to the governor in place.
Path to prosecution
A few days of uncertainty followed the CBI's request to the state governor to prosecute the chief minister. The governor, A. R. Kidwai, was accountable to the federal government, and had already stated that he would need to be satisfied that strong evidence against Laloo existed before he would permit a formal indictment to proceed. The federal government, led by newly appointed prime ministerPrime Minister of India
The Prime Minister of India , as addressed to in the Constitution of India — Prime Minister for the Union, is the chief of government, head of the Council of Ministers and the leader of the majority party in parliament...
Inder Kumar Gujral
Inder Kumar Gujral
Inder Kumar Gujral served as the 12th Prime Minister of India. Gujral was the first PM to govern exclusively from the Rajya Sabha; , only he and Manmohan Singh have done so.-Early life:...
who had just succeeded the short-lived government of the previous prime minister HD Deve Gowda, consisted of a coalition
Coalition government
A coalition government is a cabinet of a parliamentary government in which several political parties cooperate. The usual reason given for this arrangement is that no party on its own can achieve a majority in the parliament...
that depended on support from federal legislators affiliated with Laloo for its survival. It was also unclear why the CBI had sought the governor's consent in the first place and, when the High Court demanded to know why it was being sought, the CBI stated that it was a "precautionary measure." The High Court, questioning the tactic, warned that it would allow some time for the permission to transpire, but if it sensed a delay, it would force a prosecution on its own authority.
On June 17, the governor gave permission for Laloo and others to be prosecuted. Five senior Bihar government officials (Mahesh Prasad, science and technology secretary; K. Arumugam, labour secretary; Beck Julius, animal husbandry department secretary; Phoolchand Singh, former finance secretary; Ramraj Ram, former AHD director), the first 4 of whom were IAS
Indian Administrative Service
The Indian Administrative Service is the administrative civil service of the Government of India. It is one of the three All India Services....
officers, were taken into judicial custody on the same day. The CBI also began preparing a chargesheet
Chargesheet
A Chargesheet is a formal document of accusation prepared by a law-enforcement agency in India. It is distinct from the First Information Report , usually refers to one or more FIRs, and charges an individual or organization for the crimes specified in those FIR...
against Laloo to be filed in a special court. Expecting to be accused and imprisoned, Laloo filed an anticipatory bail
Anticipatory bail
Under Indian criminal law, there is a provision for anticipatory bail under Section 438 of the Criminal Procedure Code. This provision allows a person to seek bail in anticipation of an arrest on accusation of having committed a non-bailable offence....
petition, which the CBI opposed in a deposition to the court, listing the evidence against Laloo. Also, on June 21, fearing that evidence and documentation that might prove essential in further exposing the scam were being destroyed, the CBI conducted raids on Laloo's residence and those of some relatives suspected of complicity.
On June 23, the CBI filed chargesheets against Laloo and 55 other co-accused, including Chandradeo Prasad Verma (a former union minister), Jagannath Mishra (former Bihar chief minister), two members of Laloo's cabinet
Cabinet (government)
A Cabinet is a body of high ranking government officials, typically representing the executive branch. It can also sometimes be referred to as the Council of Ministers, an Executive Council, or an Executive Committee.- Overview :...
(Bhola Ram Toofani and Vidya Sagar Nishad), three Bihar state assembly legislators (RK Rana of the Janata Dal, Jagdish Sharma of the Congress party, and Dhruv Bhagat of the Bharatiya Janata Party
Bharatiya Janata Party
The Bharatiya Janata Party ,; translation: Indian People's Party) is one of the two major political parties in India, the other being the Indian National Congress. Established in 1980, it is India's second largest political party in terms of representation in the parliament...
) and some current and former IAS officers (including the 4 who were already in custody). Mishra was granted anticipatory bail by the Bihar state High Court. Laloo's anticipatory bail petition, however, was rejected by the same court, and he appealed to the Supreme Court
Supreme Court of India
The Supreme Court of India is the highest judicial forum and final court of appeal as established by Part V, Chapter IV of the Constitution of India...
, which resulted in a final denial of bail on July 29. On the same day, Bihar state police were ordered to arrest him. The next day, he was jailed. Later, the Bihar Director General of Police
Director General of Police
In India the director general of police or inspector general of police is a three-star rank and the highest ranking police officer in Indian States & Union Territories. All DGPs/IGPs are Indian Police Service officers. The DGP/IGP is usually the head of the state police force in every Indian state...
, SK Saxena, justified the one-delay delay in arresting Laloo by stating in court that "any precipitate action would have led to police firing and killing of a large number of people."
End of Laloo's chief ministership
As it became evident that Laloo would be engulfed in the scandal and its prosecution, demands for him to be removed from the chief ministership had gained momentum both from other parties, as well as within Laloo's own party, the Janata DalJanata Dal
Janata Dal is an Indian political party which was formed through the merger of Janata Party factions, the Lok Dal, Congress, and the Jan Morcha led by V. P...
. On July 5, Laloo formally parted ways with the Janata Dal and formed his own party, the Rashtriya Janata Dal
Rashtriya Janata Dal
The Rashtriya Janata Dal is a political party in India, based in the state of Bihar. The party was founded in 1997 by Laloo Prasad Yadav. The party came about as a result of Lalu Prasad Yadav, ex-president of Janata Dal, being evicted by Sharad Yadav, the then president, on corruption charges ...
(or RJD), taking with him virtually all the Janata Dal legislators in the Bihar state assembly, and winning a vote of confidence in the state assembly a few days later. The RJD continued to support the coalition federal government, however. With demands for his resignation continuing to mount, on July 25, Laloo resigned from his position, but was able to install his wife, Rabri Devi
Rabri Devi
Rabri Devi served three terms as the Chief Minister, of Bihar, India, as a member of the Rashtriya Janata Dal political party, between 1997 and 2005...
as the new chief minister on the same day. On July 28, Rabri's new government successfully won another trust vote in the Bihar legislature by a 194-110 vote, thanks to the Congress
Indian National Congress
The Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
and Jharkhand Mukti Morcha
Jharkhand Mukti Morcha
Jharkhand Mukti Morcha is a state political party in the state Jharkhand, India. It has a strength of 2 in the 15th Lok Sabha. Shibu Soren is the president of JMM...
parties voting in alignment with the RJD.
Laloo claimed he had been instrumental in helping HD Deve Gowda become the prime minister. However, there was press speculation that Gowda held a grudge against Laloo for insisting that Gowda step down when Gowda's fledgling government ran into internal coalition squabbles, and this motivated him to push CBI Director Joginder Singh for Laloo's prosecution. Much later, in 2008, Laloo also claimed that Deve Gowda confessed, and "wept and fainted," when Laloo confronted him on inciting the CBI to pursue the prosecution. Looking retrospectively, Laloo has said that the scam had a lasting negative impact on his political career, and may have ended his prospects to one day be prime minister of India.
There were reports that Joginder Singh had violated norms in keeping the new prime minister, IK Gujral, in the dark as he pursued the prosecution. Gujral's own new government also depended on Laloo for support in parliament, and Joginder Singh later alleged that Gujral had attempted to block the scam investigation from proceeding. On June 30, the federal government issued orders to transfer Singh out of the CBI and into the Home Ministry as a Special Secretary, which was technically a promotion but also had the effect of removing him from the investigation. There was also an alleged follow-on move to transfer UN Biswas, the regional CBI director, which led to the High Court warning that it would act to disallow any such transfer.
Prosecution
As the CBI discovered further evidence over the following years, it filed additional cases related to fraud and criminal conspiracy based on specific criminal acts of illegal withdrawals from the Bihar treasury. Most new cases filed after the division of Bihar state (into the new Bihar and JharkhandJharkhand
Jharkhand is a state in eastern India. It was carved out of the southern part of Bihar on 15 November 2000. Jharkhand shares its border with the states of Bihar to the north, Uttar Pradesh and Chhattisgarh to the west, Orissa to the south, and West Bengal to the east...
states) in November 2000 were filed in the new Jharkhand High Court located in Ranchi, and several cases previously filed in the Bihar High Court in Patna were also transferred to Ranchi. Of the 63 cases that the agency had filed by May 2007, the majority were being litigated in the Ranchi High Court.
Laloo's initial chargesheet, filed by the CBI on 27 April 1996, was against case RC 20-A/96, relating to fraudulent withdrawals of from the Chaibasa treasury of the (then) Bihar government, and was based on statutes including Indian Penal Code
Indian Penal Code
Indian Penal Code is the main criminal code of India. It is a comprehensive code, intended to cover all substantive aspects of criminal law. It was drafted in 1860 and came into force in colonial India during the British Raj in 1862...
sections 420 (cheating) and 120(B) (criminal conspiracy), as well as section 13(2) of the Prevention of Corruption Act, 1988
Prevention of Corruption Act, 1988
The Prevention of Corruption Act, 1988 is a federal law enacted by the Parliament of India to combat corruption in government agencies and public sector businesses in India...
. Even though he had been jailed, he was kept in relative comfort at the Bihar Military Police guest house. After 135 days in judicial custody, Laloo was released on bail on December 12, 1997. The next year, on 28 October 1998, he was rearrested on a different conspiracy case relating to the fodder scam, at first being kept in the same guest house, but then being moved to Patna's Beur jail when the Supreme Court objected. After being granted bail, he was rearrested yet again in a disproportionate assets
Disproportionate Assets
Disproportionate Assets is a term used in India to describe a situation where an individual's net economic assets significantly exceed the assets he or she should possess after accounting for the assets that he or she previously held and all legal sources of income...
case on 5 April 2000. His wife and then Chief Minister Rabri Devi was also asked to surrender on that date, but then immediately granted bail. This stint in prison lasted 11 days for Laloo, followed by a one-day imprisonment in another fodder scam case on 28 November 2000.
Jagannath Mishra had been permitted bail in June 1997, and avoided judicial remand when Laloo was first detained in July 1997. However, he was taken into custody on 16 September of the same year. He was freed on bail on 13 October but then remanded again, at the same time as Laloo, on October 28, 1998, when he was kept at the same guest house as Laloo, and later shifted to Beur jail along with him. Mishra was freed on bail on December 18, but then rearrested in a different fodder scam case on 7 June 2000.
Due to the multiplicity of cases, Laloo Yadav, Jagannath Mishra, and the other accused have been remanded several times in the years since 2000. In 2007, 58 former officials and suppliers were convicted, and given terms of 5 to 6 years each. As of May 2007, about 200 people had been punished with jail terms of between 2 and 7 years. A 2005 litigation of one of the cases (RC 68-A/96) in the Ranchi High Court involved over 20 truckloads of documents.
Impact
Since it broke into public light, the fodder scam has become symbolic of bureaucratic corruption and the criminalization of politics in India generally, and in Bihar in particular. It has been called a symptom of the "deep and chronic malady afflicting theBihar government and quite a few other state governments as well." In the Indian parliament
Parliament of India
The Parliament of India is the supreme legislative body in India. Founded in 1919, the Parliament alone possesses legislative supremacy and thereby ultimate power over all political bodies in India. The Parliament of India comprises the President and the two Houses, Lok Sabha and Rajya Sabha...
, it was cited as an important indicator of the deep inroads made by mafia raj
Mafia Raj
Mafia Raj refers to an economic and political situation in India where public goods, property and funds are controlled and systematically embezzled by a criminalized nexus of government officials, elected politicians, business interests and other entities Mafia Raj (Hindi-Urdu: माफ़िया राज, مافیا...
in the politics and economics of the country. Reference has also been made to the anarchic nature of governance (the "withering away of the state") that occurs when a mafia develops in a state-controlled sector of the economy.
Laloo Prasad Yadav is the only person on whom the Lok Sabha
Lok Sabha
The Lok Sabha or House of the People is the lower house of the Parliament of India. Members of the Lok Sabha are elected by direct election under universal adult suffrage. As of 2009, there have been fifteen Lok Sabhas elected by the people of India...
debated for a complete session as the official agenda.