Author: Ritika Singh; College: Jaipur National University
ABSTRACT
In India’s political and administrative history, the fodder issue is considered to be among the most important corruption instance. It involved the systematic siphoning off of around ₹950 crore from the Bihar state treasury, specifically from funds allocated to the Animal Husbandry Department for purchasing cattle fodder, medicines, and veterinary supplies. Over the years, government officials, businessmen, and politicians colluded to forge documents and create false supply records to withdraw vast amounts of money illegally. Lalu Prasad Yadav, who was serving as the Chief Minister of Bihar during the peak of the scam, was later convicted for his active involvement in this large-scale fraud and for conspiring with others to misuse public funds. This article offers an in-depth examination of how the scam unfolded, the legal principles and charges involved, the critical evidence presented during the trial, and how this case compares with other high-profile corruption scandals in India. It also discusses the broader consequences of the scam on public trust, political accountability, and the functioning of democratic institutions.
INTRODUCTION
The Fodder Scam came into the national spotlight during the mid-1990 revealing a deeply entrenched network of corruption within the Bihar state administration. The scam centered on the illegal diversion of public funds that were meant for the care of livestock—specifically intended for buying fodder, veterinary medicines, and other necessary items for animals managed by the state’s Animal Husbandry Department.
Instead of being used for their intended purpose, these funds were systematically looted over several years by a nexus of bureaucrats, politicians, and suppliers through the creation of forged invoices, inflated bills, and fraudulent documentation. The scale of the scam was staggering, amounting to nearly ₹950 crore.
The issue drew national outrage and led to widespread criticism of the governance system in Bihar. In response to mounting public pressure and media attention, the Central Bureau of Investigation (CBI) was brought in to take charge of the investigation in 1996. The agency eventually uncovered multiple layers of corruption and filed numerous charge sheets implicating senior officials and political leaders, including Lalu Prasad Yadav, the then Chief Minister of Bihar.
The scam not only resulted in several convictions over the years but also highlighted the vulnerabilities of public financial management and the ease with which official systems could be manipulated for personal and political enrichment. It became a landmark case in India’s anti-corruption narrative and marked a turning point in public demand for accountability and transparency in governance.
How the Fodder Scam Case Started
The Fodder Scam began as small-scale financial fraud, where government officials submitted fake bills for cattle fodder and veterinary supplies. What started as localized corruption in the 1970s soon evolved into a large, organized embezzlement scheme involving bureaucrats, suppliers, and politicians. One of the earliest political figures linked to the scam was Jagannath Mishra, Bihar’s Chief Minister in the late 1970s.
The scam originated in 1977 in southern Bihar (now Jharkhand). Though Lalu Prasad Yadav, a follower of Jayaprakash Narayan’s anti-corruption movement, was initially unrelated, he became Chief Minister in 1990—by which time the scam was already operational. Allegations later surfaced that instead of stopping the fraud, Yadav allowed it to grow, benefiting from it personally. Most of the ₹950 crore embezzled was withdrawn during his tenure (1990–1996).
Concerns about missing funds were first flagged in 1985 by then CAG T.N. Chaturvedi, who noticed delayed financial reporting. Despite repeated warnings, no action was taken by successive governments. IN 1992, Bidhu Bhushan Dwivedi, an officer from the internal vigilance department, filed a report suggesting the possible involvement of senior officials in the scam.
The turning point came in 1996 when Amit Khare, a senior officer, ordered a raid that uncovered documents proving massive financial fraud. This led to public outrage, the formation of state commissions (one of which collapsed due to the involvement of its head), and multiple FIRs. Public interest litigation is filed in Patna High Court led to the directive on the March 11, 1996 instructing the CBI to probe the scam covering the period of 1977 to 1996.
Following this, the CBI launched a comprehensive inquiry and began questioning senior political leaders, including Lalu Prasad Yadav and Jagannath Mishra, marking the beginning of a landmark corruption investigation in India.
CBI Investigation and Trials
After the Patna High Court’s directive in 1996, the CBI began probing 64 fodder scam-related cases—41 based on FIRs filed by Bihar Police and 23 from complaints and intelligence inputs. On March 27,1997, the CBI, the first formal complaint was filed in the Chaibasa Tresury matter. By June 1997, the CBI sought the Bihar Governor’s permission to prosecute then-Chief Minister Lalu Prasad Yadav and filed a chargesheet against him and 55 others under IPC Sections 420 (cheating), 120B (criminal conspiracy), and Section 13 of the Prevention of Corruption Act.
Facing political backlash within the Janata Dal, Lalu broke away and formed the Rashtriya Janata Dal (RJD) in July 1997. Rabri Devi , his wife, was named as successor after he resigned as Chief Minister of Bihar After Jharkhand was carved out of Bihar in 2001, many cases were shifted there. The CBI described the scam as a coordinated effort to make fraudulent treasury withdrawals using fake documents and bogus supply orders, often without delivering goods.
Major Fodder Scam Cases
1. First Conviction (Chaibasa Treasury – Rs 37.7 crore):
The first trial began in 2002. Lalu and others were charged in 2012 with embezzing money from the tresuries of Chaibasa and Bhagalpur. In 2013, Lalu was convicted for siphoning off ₹37.7 crore from the Chaibasa treasury. He received a five-year jail term but was granted bail by the Supreme Court the same year. The conviction led to his disqualification from the Lok Sabha.
2. Second Conviction (Deoghar Treasury – Rs 89.27 lakh):
Lalu Prasad Yadav was found guilty in December 2017 of illegally taking 89.27 lakh rupees out of the Deoghar treasury. He received a 3.5-year prison sentence along with a ₹10 lakh fine. After serving part of his term, he was granted bail in July 2021. In the same case, former Chief Minister Jagannath Mishra was not found guilty.
3. Third Conviction (Chaibasa Treasury – Rs 33.13 crore):
Lalu received another five-year term in January 2018 after being found guilty in a different Chaibasa treasury case involving ₹33.13 crore.
Fourth Conviction (Dumka Treasury – ₹3.76 crore)
In March 2018, Lalu Prasad Yadav was convicted for illegally withdrawing ₹3.76 crore from the Dumka treasury between December 1995 and January 1996. A Special CBI Court sentenced him to 14 years in jail and imposed a ₹60 lakh fine. In April 2022, however, the Jharkhand High Court granted him bail.
Fifth Conviction (Doranda Treasury – ₹139.35 crore)
The final conviction came in the Doranda treasury case, where Lalu was found guilty of embezzling ₹139.35 crore. Lalu Prasad Yadav was sentenced to five years in prison and fined ₹60 lakh in February 2022. This was the largest scam amount among all the fodder cases.
LEGAL JARGON
The Fodder Scam case involved the application of several important provisions of Indian criminal and anti-corruption law. One of the primary allegations involved criminal conspiracy under Section 120B of the Indian Penal Code (IPC).This legal provision addresses situations where two or more people come together with a mutual understanding to carry out an illegal act, or to accomplish a legal act through illegal methods. In the scam, a group of politicians, bureaucrats, and suppliers colluded over several years to defraud the government treasury, making this section a central part of the legal proceedings.
Another major charge was cheating under Section 420 of the IPC, which penalizes dishonest acts intended to deceive a person or institution in order to gain a wrongful benefit. In the Fodder Scam, government officials submitted forged documents and false claims to withdraw large sums of money, effectively cheating the government.
Forgery, as defined under Sections 468 and 471 of the IPC, also played a critical role in the case. Section 468 punishes the creation of false documents with the intent to commit fraud, while Section 471 deals with using such forged documents as genuine. The scam involved hundreds of fake bills, receipts, and vouchers for fodder and medicines that were never actually supplied, but were used to siphon off money from the state treasury.
Additionally, the accused, including Lalu Prasad Yadav, were charged under the Prevention of Corruption Act, 1988, which is a specialized law to address corruption among public servants. This law criminalizes the abuse of official position for personal gain, acceptance of bribes, and misuse of public office. The prosecution argued that Lalu abused his position as Chief Minister by allowing and facilitating the fraudulent withdrawal of funds, thereby violating multiple provisions of this Act.
A central issue in the case was misappropriation of public funds, which refers to the illegal or unauthorized use of government money for private gain. Funds that were meant for the welfare of livestock were diverted through fraudulent accounting and corrupt practices.
Other relevant legal concepts include breach of trust by a public servant (Section 409, IPC), which deals with public officials who dishonestly misappropriate property entrusted to them. In this case, public servants entrusted with financial oversight violated their duty by actively participating in the scam. Charges under Section 477A of the IPC, related to the falsification of accounts, were also invoked as the scam depended on tampered and inaccurate government records.
These legal provisions collectively formed the basis of the prosecution’s case, highlighting the layered and systemic nature of the fraud and the active involvement of individuals in positions of power.
CASE LAWS
1. Telgi Stamp Paper Scam (2003)
Abdul Karim Telgi ran a massive fake stamp paper racket across several Indian states, involving corrupt officials and printing fake government documents worth over ₹30,000 crore. It exposed loopholes in India’s security printing and law enforcement systems.
2. Sukh Ram Telecom Scam (1996)
Then Union Telecom Minister Sukh Ram was found guilty of taking bribes and misusing his office to award telecom contracts. Crores of rupees in cash were found hidden in his home, revealing deep-rooted corruption in the telecom sector.
3. NRHM Scam in Uttar Pradesh (2011)
Ministers and officials in Uttar Pradesh embezzled cash from the National Rural Health Mission intended to enhance healthcare in rural areas. The scam involved fake bills, inflated prices, and ghost employees, leading to losses of over ₹10,000 crore.
4. Public Distribution System (PDS) Scam, Assam (2010)
Under the PDS program, officials and businesspeople embezzled food grains intended for low-income families. The scam involved fake records and unauthorized sales in the open market, causing severe food insecurity for many.
5. Cash-for-Jobs Scam, Haryana (2013)
Under the Hooda government, several posts in government departments were allegedly sold for bribes. Investigations revealed tampered recruitment lists and forged eligibility criteria, resulting in multiple arrests.
CONCLUSION
The Fodder Scam, spanning nearly two decades, stands as one of India’s most notorious cases of political and bureaucratic corruption. It exposed how systemic loopholes, forged documents, and political influence enabled the embezzlement of nearly ₹950 crore from the Bihar animal husbandry department. Lalu Prasad Yadav, once a prominent political leader and former Chief Minister of Bihar, was convicted in multiple cases linked to the scam. Despite initial denials and political maneuvering, including appointing his wife Rabri Devi as his successor, the judicial process held him accountable through multiple CBI investigations and court trials. The case not only led to his disqualification from Parliament but also damaged public trust in governance. Ultimately, the Fodder Scam underscored the critical need for transparency, vigilance, and strong institutional checks in public financial management.
FAQS
1. What is the Fodder Scam?
The Fodder Scam refers to a massive corruption scandal involving the fraudulent withdrawal of around ₹950 crore from the Bihar government treasury, under the guise of purchasing animal fodder and medicines for the state’s animal husbandry department.
2. Who was the main accused in the Fodder Scam?
Lalu Prasad Yadav, former Chief Minister of Bihar and RJD leader, was the primary accused.He was convicted in multiple cases related to the scam. Other prominent accused included former CM Jagannath Mishra and various bureaucrats and suppliers.
3. When did the scam come to light?
Although the scam began as early as 1977, it was officially uncovered in 1996 when a raid was conducted by Deputy Commissioner Amit Khare in the Animal Husbandry Department.
4. What role did Lalu Prasad Yadav play?
Lalu Prasad Yadav was found guilty of facilitating and benefiting from the scam during his tenure as Chief Minister of Bihar (1990–1997). He faced multiple convictions for illegal withdrawals from various treasuries.
5. What were the main charges under which Lalu was convicted?
He was convicted under sections of the Indian Penal Code for criminal conspiracy (120B), cheating (420), forgery (468 & 471), and provisions of the Prevention of Corruption Act.
6. In what number of cases was Lalu Yadav found guilty?
He was convicted in five separate cases related to fraudulent withdrawals from treasuries such as Chaibasa, Dumka, Deoghar, and Doranda.
7. What was the punishment of Lalu Prasad Yadav?
Lalu received various sentences ranging from 3.5 years to 14 years in prison in different cases, along with hefty fines.
8. Was Lalu Prasad Yadav granted bail?
Yes, he was granted bail in multiple cases after serving part of his sentences. Most recently, he secured bail in April 2022.
9. Did the scam impact Lalu Prasad Yadav’s political career?
Yes, Lalu Yadav was prohibited from running for office and disqualified from Parliament following his conviction in 2013. after that, his political clout drastically decreased.
10. What is the current status of the Fodder Scam cases?
Most of the major trials have concluded with convictions. Lalu Prasad Yadav has been granted bail but remains legally barred from holding public office unless his convictions are overturned.
