Author: Mansi Singh, City Law College
To the Point
The Fodder Scam is widely
regarded as one of the gravest instances of political and administrative corruption in post-independence India. It involved the large-scale and systematic misappropriation of public funds allocated to Bihar’s Animal Husbandry Department (AHD). Between 1990 and 1996, nearly ₹950 crore was fraudulently withdrawn from government treasuries under the guise of purchasing fodder, medicines, cattle feed, and related equipment. In reality, these purchases were either grossly inflated or entirely fictitious.
At the centre of this scandal was Lalu Prasad Yadav, the then Chief Minister of Bihar, along with a network of ministers, senior bureaucrats, treasury officials, and private suppliers. The scam thrived on forged bills, fake supply orders, manipulated treasury records, and deliberate administrative silence. What distinguished the fodder scam from ordinary corruption cases was its longevity, scale, and institutional complicity.
The exposure of the scam led to investigations by the Central Bureau of Investigation (CBI) following judicial intervention by the Patna High Court. Multiple prosecutions were launched under the Indian Penal Code, particularly Sections 420 (cheating), 467, 468, and 471 (forgery), and 120B (criminal conspiracy), along with provisions of the Prevention of Corruption Act, 1988. Over the years, Lalu Prasad Yadav was convicted in several cases and sentenced to rigorous imprisonment exceeding thirteen years cumulatively. The case marked a turning point in Indian criminal jurisprudence by demonstrating that political power cannot shield individuals from legal accountability.
Use of Legal Jargon
Legally, the fodder scam prosecutions illustrate the application of criminal law principles to complex economic offences. Section 420 IPC was invoked to establish that the accused had dishonestly induced the State to release funds by falsely representing that legitimate purchases were being made. The existence of mens rea was inferred not from isolated acts, but from the repeated and coordinated pattern of fraudulent withdrawals over several years.
The charge of criminal conspiracy under Section 120B IPC was central to securing convictions. Given the layered structure of the scam, direct evidence of agreement was rare. Courts therefore relied on circumstantial evidence, such as continuity of illegal acts, coordinated approvals, and mutual benefit among accused persons, to infer a meeting of minds.
Forgery offences under Sections 467 and 468 IPC required proof of false document creation with intent to defraud. Ante-dated bills, forged supply orders, and inflated invoices were used to simulate lawful expenditure. Section 471 IPC further penalised the knowing use of these forged documents as genuine. The Prevention of Corruption Act, 1988, extended liability to public servants who abused their official position to obtain pecuniary advantage for themselves or others.
Courts consistently rejected defences based on official sanction or collective decision-making, reiterating the settled principle that fraud vitiates every administrative act. Procedurally, the transfer of cases under Section 406 of the Code of Criminal Procedure ensured fair trials and insulated the investigation from political influence.
The Proof
The evidentiary record in the fodder scam cases was extensive and multi-dimensional. Investigators uncovered millions of manipulated entries in the AHD ledgers across several districts, including Chaibasa, Doranda, and Bhagalpur. Treasury records revealed withdrawals far exceeding sanctioned limits, often without corresponding allotment orders.
Searches and raids conducted in 1996 resulted in the recovery of forged bills issued in the names of non-existent firms. Many suppliers were found to be fictitious, lacking registration, infrastructure, or capacity to deliver supplies. Handwriting experts linked signatures on fraudulent documents to specific officials, while audit reports by the Comptroller and Auditor General consistently flagged irregularities that had been ignored for years.
Witness testimonies further strengthened the prosecution’s case. Treasury clerks and departmental employees testified about pressure exerted to clear bills without verification. Bank records traced the flow of misappropriated funds into benami accounts and shell entities. Courts also relied on presumptions under the Indian Evidence Act when accused persons failed to explain glaring discrepancies in official records.
The cumulative evidence established a clear conclusion: vast sums of public money were withdrawn without any actual supply of fodder or equipment. This absence of corresponding delivery was crucial in proving both cheating and misappropriation beyond reasonable doubt.
Abstract
The fodder scam represents a profound breakdown of governance and accountability within Bihar’s administrative framework. Although irregularities in the Animal Husbandry Department had existed since the 1970s, they escalated dramatically during the 1990s due to weak oversight and political patronage. The scam came to light following a Comptroller and Auditor General audit and a consequential raid on the Chaibasa treasury in 1996, which exposed unauthorised withdrawals running into crores.
Public Interest Litigations filed before the Patna High Court led to the transfer of investigations to the CBI, marking a decisive exercise of judicial review under Article 226 of the Constitution. In total, 64 First Information Reports were registered, with trials later conducted in Ranchi after the creation of Jharkhand.
Lalu Prasad Yadav was convicted in multiple cases, including those relating to Chaibasa, Doranda, and Bhagalpur, receiving sentences ranging from four to five years in each. Courts carefully navigated constitutional safeguards such as protection against double jeopardy, treating each series of fraudulent withdrawals as a separate offence. Beyond criminal punishment, the convictions resulted in electoral disqualification under the Representation of the People Act, 1951, significantly altering Bihar’s political landscape.
Case Laws
Lalu Prasad v. State of Jharkhand (Chaibasa Case)
In this case, the Special CBI Court convicted Lalu Prasad Yadav and several co-accused for fraudulent withdrawals amounting to ₹37.70 crore. The court relied on documentary evidence proving forged bills and non-existent supplies, applying Sections 420, 467, and 120B IPC. The Jharkhand High Court upheld the conviction, emphasising the magnitude of public loss.
State v. Lalu Prasad (Doranda Case)
This case involved fraudulent withdrawals of approximately ₹11 crore. Treasury records lacking counterfoils and confirmations of fictitious suppliers formed the evidentiary basis. The court held that sustained administrative inaction by a constitutional authority could amount to criminal culpability when accompanied by knowledge of illegality.
Lalu Prasad v. CBI (Bhagalpur Case)
Here, the court addressed misappropriation of nearly ₹40 crore through inflated and forged invoices. The conviction reinforced the principle that conspiracy liability extends to those who enable fraud through deliberate silence or non-intervention.
Judgments such as Aniceto Lobo v. State and A.S. Krishnan v. State of Kerala were relied upon to clarify the scope of forgery and the mental element required for using forged documents as genuine. These precedents strengthened the jurisprudence on economic offences and public accountability.
Conclusion
The fodder scam litigation stands as a landmark in India’s anti-corruption jurisprudence. The convictions and cumulative sentences imposed on Lalu Prasad Yadav sent a clear message that political authority does not confer immunity from criminal law. Courts adopted a stringent approach to bail and sentencing, recognising the deep societal harm caused by economic offences.
Beyond individual culpability, the case triggered institutional reforms, including stricter audit mechanisms, digitisation of treasury operations, and enhanced financial oversight. Politically, it reshaped Bihar’s governance narrative by foregrounding accountability and transparency. The fodder scam thus remains a powerful reminder that sustained judicial vigilance is essential to preserving the rule of law.
FAQS
Q1: What triggered the fodder scam investigation?
The investigation began after a 1996 raid on the Chaibasa treasury revealed massive unauthorised withdrawals, supported by adverse audit findings.
Q2: How much money was involved in the scam?
Approximately ₹950 crore was misappropriated across multiple districts over several years.
Q3: Was Lalu Prasad Yadav convicted in all cases?
No. He was convicted in several major cases but acquitted in some due to insufficient direct evidence.
Q4: Which legal provisions were primarily applied?
Key provisions included IPC Sections 420, 467, 468, 471, 120B, and the Prevention of Corruption Act, 1988.
Q5: What is the broader significance of the case?
The case reinforced judicial intolerance towards high-level corruption and strengthened accountability mechanisms in public administration.
