Author- Nivedita Kori, Student at Hidayatullah National Law University
TO THE POINT
The massive Telgi scam case was started in 1992 which involved forging of judicial and non-judicial stamps papers and was recognised in 2003 . The scam was worth Rs.30,000 crore. The real mastermind behind the scam was Abdul Karim Telgi and with the help of dishonest and corrupt public officials he coordinated and implemented these unlawful practices. The scam demonstrated the failure of the regulatory mechanism and highlighted the loopholes of the Indian Stamp Act, 1899. Despite receiving imprisonment of 30 years and fine of rs.202 crore, this case revealed significant flaws and shortcoming in the accountability and enforcement frameworks of the legal and finance system of India.
USE OF LEGAL JARGONS
- Cheating (Section 420, IPC, and section 318 of now BNS) – It is basically deceiving a person to dishonesty.
- Forgery ( Section 467, 468,471 of IPC, at present section 338, 336,339 of BNS) – It is the creation of fake and false documents with the intention to harm.
- Counterfeiter – A person who is involved in the production of fake and false documents or government issued instruments with the intention of deceiving others.
- Criminal Conspiracy (Section 120B of IPC , at present section 61(1) of BNS) – It is when there is an agreement between two or more person to implement any criminal and unlawful activity. Here in this case, Telgi with other 300 officials implemented his false intentions.
- Public Duty Breach – When a public official fails to act and perform his duties in accordance to law. Here the public servants helped out Telgi making ways to reach his goal of deceiving people through the forged stamp paper documents.
- Mens Rea – It means Guilty mind or guilty intention behind a criminal Act
- Institutional Complicity – When the public institutions are involved in the unlawful and illegal activities.
- Prima facie Evidence – It is basically evidence that are sufficient to suspect the illegal activity unless disproved. Here in this case, the recovery of the fake documents was a kind of a prima facie evidence.
- Culpable negligence – Negligence that demonstrates lack of concern toward legal obligations and duties.
- Offence against public trust – Such actions which erodes the trust and faith on the government systems.
- Constructive Liability (of government officials) – When the superior authority is liable for the crimes or acts that they allow to happen or is ignored to let it happen.
- Financial Misappropriation – It is basically the unauthorized and illegal use of the funds.
- Administrative mala fide – Actions of the officials led by corruption and dishonesty.
THE PROOF
The stamp Paper case which is also known as The Telgi Scam Case, was a financial fraud that was started in 1992 and was recognised in the year 2003. It involved the selling and making of the stamp papers rackets in various states in India which further led to scam of amount over Rs.30,000cr. . Abdul Karim Telgi was the mastermind behind this scam and was arrested for this reason. He was born in Bengaluru and was a child of a railway employee. His father died when he was young and yet he managed his education and living himself and then moved to Saudi Arabia. On moving to India after seven years, he became a counterfeiter and started to create fake documents and passports. Through all such mala-fied practices , he exported Indian labours to Saudi Arabia. Later on he carried on creating fake stamp papers.
As stated under Indian Stamp Act 1899, Stamp Papers are legally valid documents that carry stamp revenue and are pre-printed.
There are two types of stamps:
- Judicial Stamps- These are the court fee stamp papers. These are used to pay court fees in the court and avoid cash transactions.
- Non-Judicial Stamps- These are used when in work of any non-judicial agreements such as gift deed, rent agreements.
The scam that was started in 1992 has dual-strategy, first is creating fake stamp paper documents and the second is creating shortage of such papers. This further led the Telgi team to take over the printing machinery and materials by bribing the officers at Indian Security Press in Maharashtra. These fake papers include both judicial and non-judicial stamps, share certificates, insurance papers and other legal documents which are in use of government and private sectors. Over 30,000cr was the amount scammed.
On August 19, 2000 , two men were caught for transporting these fake documents (stamp papers) in Cottonpet. Through their interrogation fake documents worth Rs.9cr was uncovered and it also led to raids in various cities. Despite registration of such cases, no action has been taken against Telgi. He generated a lot of income from this but some amount from it was listed as unaccounted, which in defence he stated it was from kerosene transport business , but later it was rejected on the basis of lack of evidences.
But he was arrested in Ajmer, Rajasthan (November 2001) during a pilgrimage. Following his claims it came into light that he was a small part of this scam, it further involved officials, politicians, police, STAMPIT ( Special Investigation Team), etc.
A chargesheet was filed by CBI in 2004 and Telgi was arrested. Despite being imprisoned, he continued to operate through the prison staffs, later on two of them were found guilty in 2017 for permitting his illegal activities.
Fifty-four persons and other high-ranking officials were arrested as the result of PIL (Public Interest Litigation) filed by Anna Hazare. Telgi received Rs202crore as fine and also 30 years of imprisonment in 2006 by a Special court in Pune. In 2018, Nashik court provided green chit to Telgi and other seven persons due to insufficient evidence after Telgi passed away in 2017.
Although Telgi Stamp Paper scam revealed institutional corruption and marked various legal reforms but also exposed the flaws and gaps in accountability and enforcement.
ABSTRACT
Telgi Scam was a massive counterfeiting scam and fraud that exposed an illegal chain between the dishonest government and the criminals. The mastermind behind the scam scam was Abdul Karim Telgi who carried out the production and selling of illegal and fake documents that are related to the government such as the stamp papers, passports etc. The scam was estimated worth Rs.30,000 crores which degraded the institutional framework and the accountability ,led to many convictions and also brought major important changes in the Indian Stamp Act and the rules of stamp paper. The judiciary in this case upheld the legal doctrines such as strict liability and constructive responsibility, which led the shift towards the digital and secure management systems relating to any kind of legal documents.
CASE LAWS
- State of Maharashtra Vs. Abdul Karim Telgi (2003-2007)
Telgi was prosecuted under the following provisions:
- Indian Penal Code(IPC):
- Section 420
- Section 467
- Section 468
- Section 471
- Section 120B
- Prevention of Corruption Act :
- Section 13(1)(d)
- Section 13(2)
- Indian Stamp Act, 1899
A special Pune court in 2006 imposed a fine of Rs.202 crore on him and also conviction of white collars in India and has shown a major shift in the judiciary’s trend towards strict liability in economic offences.
- CBI Vs Assistant Police Commissioner Pradeep Sawant (2004)
DCP Pradeep Sawant was arrested under MCOCA in early for providing shelter to Telgi while he was in custody, allowing him to move illegally and bring hinderance in the investigation process. The case highlighted the importance of constructive accountability for public servants who allowed the scam to occur through this kind of negligence. Even though he was later granted bail in August 2004 due to lack of sufficient evidence. His detention showed the importance to hold law enforcement officers responsible.
- CBI Vs Telgi & Others
After Telgi was arrested , the Special Investigation Team and the CBI filed forty-eight charge sheets across various states. Judiciary recognised the framework failure es majorly in the area of stamp papers and the urgent need for the digital verification systems to avoid such scams and frauds in the future.
CONCLUSION
Telgi Scam is one of the biggest institutional betrayals in the history of India, proving how fraud and cheating can erode entire legal and financial institutions when it’s aided by the public officials. Significant convictions and systematic arrangements were seen, which further brought up accountability at various levels. The scam opened up the fact that there still are deficiencies in regulatory supervision and how easily the government document can be forged. The scam further highlighted the immediate requirement for transparency in governance, digitization in governance.
In legal sense, this case established the idea of Doctrine of Institutional Liability and enhanced the use of anti-corruption laws and marked a shift in stamp duty and paper work procedures towards tamper-resistant e-governance systems.
FAQs
Q1. How was the scam exposed?
Ans.- On August 19, 2000 , two men were caught for transporting these fake documents (stamp papers) in Cottonpet. Through their interrogation fake documents worth Rs.9cr was uncovered and it also led to raids in various cities.
Q2. Who was the mastermind behind the scam?
Ans.- . The real mastermind behind the scam was Abdul Karim Telgi and with the help of dishonest and corrupt public officials he coordinated and implemented these unlawful practices.
Q3. What are stamp papers and name the two types of stamp paper?
Ans.- As per Indian Stamp Act, 1899, Stamp Papers are legally valid documents that carry stamp revenue and are pre-printed. There are two types of stamp paper:
- Judicial stamp paper
- Non-Judicial paper
Q4. What was the impact of the scam on law and institutions?
Ans.- The Telgi scam case led to the erosion to public trust ad also caused loss of Rs.30,000 crore revenue and has also increased the burden of the judiciary. It further led to life changing reforms like e-stamping and led to stringent and strict enforcement of Indian Stamp Act.
Q5. What were the actions that were taken against the mastermind behind this scam?
Ans.- A fine of rs.202 crore was imposed on him and he was also imprisoned for 30 years by the Pune Special Court.
Q6. How did the public officials help in this scam?
Ans.- The dishonest and corrupt public officials provides vast network and resources for the implementation such unlawful practices.
