Cooperative Corruption Federation of MP
Posted December 10, 2009on:
Mahatma Gandhi said: hate the sin, love the sinner. Shivraj Singh Chauhan’s philosophy is: hate the corruption (and talk loudly against it) but love the corrupt, particularly if he is useful to the chief minister’s coterie.
Chauhan has put his doctrine into practice by rewarding some and consenting to the prosecution of some others for misappropriating crores of rupees in the cooperative sector.
According to a government statement in the November session of the Assembly, the State Economic Offences Bureau (SEOB) has put up challans in the court against a few employees of the Madhya Pradesh Cooperative Housing Federation Limited, along with the office-bearers of the housing cooperative societies, for misappropriating the public money amounting to crores of rupees but has left out the big guns of the Federation, even though their complicity in the bungling was found no less by an extensive SEOB investigation.
A special audit of the accounts of the Federation for the 1994-2000 period had found colossus financial irregularities, amounting to Rs 60 crore, and recommended recovery of these amounts under appropriate sections of the Madhya Pradesh Cooperative Societies Act but those who were supposed to act did not.
Series of FIRs
After the BJP formed government in the State with Uma Bharati as the chief minister, the matter was entrusted to the SEOB. The investigators of the SEOB seized two truckloads of the records of the Federation. After perusing these records, the SEOB registered a series of FIRs against the office-bearers of the Federation, as well as the office-bearers of the cooperative housing societies, under various sections of the Cooperative Act and IPC. The SEOB case was that the officials of the Federation had misappropriated the public money in connivance with the office-bearers of the cooperative housing societies.
The modus operandi for siphoning off the money, culled up from Dr Govind Singh’s petition in the Madhya Pradesh High Court, was as follows: the Federation, being a financial institution and Apex Cooperative Society under section 9 of the MP Cooperative Societies Act, has one of its objectives to provide loans to cooperative housing societies.
On May 25, 2002, one Padma Housing Society applied to the Federation for a loan of Rs 50 lakh. Assistant Engineer C.P.Sharma, after perusing the necessary documents, recommended a loan of Rs 40 lakh. This was endorsed by the finance committee and technical experts of the Federation and approved by managing director R.C.Ghiya. Padma Housing Society was, though, registered as a member of the Federation (a must for sanctioning loans) only on January 4,2003.
The loan amount was released in instalments and C.P.Sharma periodically submitted inspection reports about the material purchased and the progress of the work which the SEOB later found fictitious. The entire hierarchy of the Federation was involved in perpetuating this fraud.
Dr Govind Singh, the petitioner in the case, was the chairman of the Federation and had thus presided over the meetings of the board of directors of the Federation when the loans were sanctioned. The High Court quashed the FIR against Singh on the ground that he merely relied on the reports submitted by the officials of the Federation and “there was no reason for him to suspect the correctness” of the reports submitted to him and that there was no material to show that any irregularities were brought to his notice.
High Court go-ahead
The FIR against Dr Govind Singh was thus quashed on March 18,2005 but the High Court had allowed the prosecution to proceed against the other accused. It did not. The deputy inspector-general of SEOB, Dr Vijay Kumar, had, though, written to the appropriate authorities in the government about the culpability of the managing director, general manager and loan and technical officers of the Federation in misappropriation of the funds separately in each of the cases investigated by the SEOB.
In reply to a calling-attention notice of a Congress MLA, the government informed the Assembly last month that the SEOB has put up challans in the special court in respect of two housing cooperative societies in December 2008 and February 2009 against the “corrupt persons” and has also dissolved the boards of directors of the two societies.
According to the SEOB records, the challans have been put up against the office-bearers of the two housing cooperative societies (all private persons) but only three of the office-bearers of the Federation: Arun Kumar Mehra, who was the regional officer, and Rekha Mathur and Sudarshan Kumar Chaudhary, who were in-charge of the loan cell. All three have since been removed from service. The managing directors, general managers, loan officers, technical officers and other high-ups of the Federation do not figure in the challans.
Not only the others have been left out of the challans but some of them have been even better placed. They include Anil Sharma, G.C.Kewalramani and R.C.Ghiya, who were managing directors, and Pradip Neekhra and B.L.Chauhan, who were the general managers of the Federation during the period investigated by the SEOB. Some of them have even been absorbed in the regular government service and posted on the personal staff of an important minister and the Assembly Speaker — after the SEOB had recommended their prosecution for the massive cooperative corruption.