Author: Ishita Saxena, a student of Symbiosis Law School, Noida


This research paper is aimed at exploring the fodder scam. The author has done a doctrinal method of research. The author has relied on the secondary sources of research. The research paper delves into the intricacies of the scam. It will analyze how did the whole mafia network worked in the state of Bihar. It will also help the reader to know how the whole scam came to be known to the country. The research paper is a guide to help the reader to understand the legal scam that took place in the 1980s and 1990s. It also helps the reader to explore how these networks work and what happens when the scam is broken out.


The scam of 1996, known as the Fodder Scam was a multibillion-dollar Animal Husbandry department fraud that involved large scale embezzlement of the Bihar state treasury. The scam involved high profile leaders of parties. There had been many unsuccessful attempts to hide the whole mafia network, but the CBI was able to break out the whole scam and various leaders involving the then chief minister of Bihar were sent to prison in relation to scam. The scam involved an embezzlement of Rs. 950 crores. The large-scale embezzlement due to payment to non-existent companies on paper and the involvement of high-profile leaders like Lalu Prasad Yadav was the main highlight of the case.


The scam started with small scale embezzlements of government funds when the officials at lower level were involved in it. Afterwards, when the businessmen and politicians joined the funds’ embezzlement, the amount increased significantly. In February 1985, the CAG T. N. Chaturvedi noticed delays in the monthly accounts’ submissions of the department of animal husbandry from the state of Bihar. This led to a close scrutiny on the state’s department by the PAGs and CAGs. In 1992, an inspector, namely, Bidhu Bhushan Dwivedi submitted a report indicating the fodder scam and involvement of the chief minister.

This report was essential in breaking the whole scam however, this inspector was hardly given any credit when the scam was totally out. This report also brought attention of the higher officials in the government towards the possibility of a big scam going on in the state of Bihar in the name of animal husbandry. The officials kept a close eye on the accounts of the state. In 1985 Press Conference the Bihar Veterinary Association exposed the Animal Husbandry mafia network. In June 1996, V. S. Dubey ordered the district magistrates and deputy commissioners of all districts to go into raids in their districts. Then, the June of the same year, the deputy commissioner of the district of Chaibasa conducted the raid in the animal husbandry department of the town and the documents and papers collected in this raid showed large scale embezzlement of the government’s funds from the treasury in the name of some fake companies that did not even exist.

Lalu ordered the constitution of a committee to probe the irregularities. However, due to fears of influence of state officials on the committee, the case was given to the Central Bureau of Information. A PIL was also filed in the Supreme Court and based on the decision of the court, the Patna High Court ordered that the case to be given to CBI. Some days later, the CBI informed the High Court that the officials of the state were blocking access to documents. This also indicated towards an illegal nexus between various officials and businessmen. After experiencing some hinderances during the probe, CBI was finally able to reveal the chief minister of state being involved in the fodder scam. 

On 10 May 1997, the CBI made a formal request to the federally – appointed governor of the state to prosecute the chief minister in the legal scam case. An Income Tax investigation also blamed Lalu for the scam. On 17 June, the governor gave the permission to prosecute Lalu and other officials involved in the scam. The CBI prepared a chargesheet against Lalu involving the sections 420 and 120(B) of Indian Penal Code and section 13(2) of Prevention of Corruption Act, 1988. 

Due to this accusation of Lalu Yadav in the case, his political life became very unstable. He belonged to the Janta Dal, that refused him to exercise his ministerial powers while under investigation of a scam. In July 1997, he formed Rashtriya Janta Dal and resigned from the post of chief minister and gave the post to his wife. When the state of Jharkhand was formed in 2001, all the cases were transferred there. 


The first trial in this scam took place in February 2001. In March of the same year, Lalu and Mishra were accused of falsely withdrawing money from government’s treasury. In September 2013, Lalu Prasad Yadav as first found guilty in being involved in the scam and was pronounced 5 years of prison, but in December 2013, he was granted bail. However, he was barred from contesting elections due to his conviction. 


Lalu Yadav was found involved in these activities in 2017. He was found guilty of stealing Rs. 89.27 lakhs from the Deoghar treasury in December, 2017. He was sentenced to prison for three-and-a-half-year and was also imposed a fine of Rs. 10 lakhs. He was granted bail in July 2021 and Jagannath Mishra was found not guilty.


Lalu Prasad Yadav didn’t stop. He was again found involving in the scam in January 2018. This time he fraudulently withdrew Rs. 33.13 crores from the Chaibasa treasury. In this, he was sentenced to prison for five years. 


Lalu Prasad Yadav was convicted for the fourth time in the Dumka treasury case. He was convicted in March 2018 by a special court of CBI. He withdrew Rs. 3.76 crores from the Dumka treasury in December 1995 to January1996. He was sentenced to prison for 14 years and a fine of Rs. 60 lakhs were also imposed on him. He obtained bail in April of 2021 he obtained bail from the Jharkhand High Court. 


Lalu Prasad was convicted for the fifth and the last time for embezzlement of Rs. 139.35 crore from the Doranda treasury. He was sentenced to 5 years of jail and a fine of Rs. 60 lakhs. This was his last conviction. 


Lalu Prasad Yadav was accused with various section of IPC and Prevention of Corruption Act, 1988. He was found guilty for sections 120B, 409, 420, 467, 468, 471, 477A of IPC and section 13(2) of Prevention of Corruption Act, 1988. 


Section 120B of Indian Penal Code deals with punishment for criminal conspiracy. It divided conspiracies into two categories for punishment. In the first case you mentioned, where there’s no specific provision in the legal code for punishing a conspiracy to commit a serious offense (such as one punishable by death, life imprisonment, or rigorous imprisonment for two years or more), the person involved would typically be punished as if they had abetted or aided in the commission of that offense.

However, in other situations where conspiracy is involved but the offense is not as severe, the punishment tends to be less severe as well. This could involve imprisonment for a term not exceeding six months, a fine, or both, as you mentioned. These punishments may vary depending on the specific laws and regulations of the jurisdiction in question.


Section 409 of IPC deals with criminal breach of trust by these officials. The responsibility of such officials is high and to ensure this, section 409 of IPC was provided. The punishment for the offence may extend to 10 years and a fine. 


Section 420 of IPC covers the situations when the person acts fraudulently. The punishment for such an offence is either imprisonment for up to 7 years or imposition of fine. This section was also explained in the case of Ramjas v. State of U. P. The court laid down certain essentials for holding the person guilty for the offence of cheating. 

  1. The deceived person must be persuaded, through deception, to either hand over property to someone else or agree to let someone else keep their property.
  2. The deceived person must be deliberately persuaded to take or refrain from an action they would not have taken or refrained from if they had not been deceived.

In cases covered by the second condition, the action or lack thereof should cause harm to the deceived person’s body, mind, reputation, or property, or have the potential to do so.


Section 467 of IPC provides that if anybody forges certain essential legal documents like will, valuable security, a document that is falsified to be a receipt acknowledging the payment of money, etc. shall be punished with imprisonment for 10 years and shall also be liable to a fine. 

Section 468 states the punishment for forgery for the purpose of cheating. However, it is to be noted that this section only applies to where forgery was done coupled with the intention of cheating. It is a non-bailable and non-compoundable offence. The punishment provided for this offence is for up to 7 years and the person shall also pay a fine. 

Section 471 lays down the liability of the person who uses a forged document as genuine, even after knowing that the document is forged. This section is not for the person doing the forgery but for those who know that the document is forged and still use it. The person is punished in the same manner as if he had forged the documents himself.


Section 477A deal with the falsification of accounts. It provides for two kinds of offences:

  1. Deceiving, manipulating, destroying, mutilating, or fabricating any account or electronic records; or
  2. Creating or assisting in the making of such falsified accounts.

It is to be seen that these two offences are distinct.


Section 13 of the Act punishes the involvement of a public servant in illegal activities. It provides that a public servant is said to commit criminal misconduct when he misappropriates for his own purpose, any property entrusted to him under his control as a public servant. The public servant is punished by imprisonment for a term of not less than 4 years, and shall also be liable to pay a fine.


The Fodder Scam case also known as, the Chara Ghotala, was a big mafia network running in the state of Bihar. This scam involved a scam of around Rs. 1000 crores and was exposed in the late 1990s. The scam involved mainly the officials of the animal husbandry department and also included high profile leaders like Lalu Prasad Yadav, Jagannath Mishra and many others. In the department of animal husbandry many officials were filling their pockets under the names of non-existing companies. No matter how much big the scam was, CBI was able to break out the network. The breaking of the scam, impacted the political life of Lalu Prasad Yadav in a very negative manner. 

Lalu Prasad Yadav was one of the first chief ministers to be involved in such a scam. This also brought an uproar against him in the political situation of Bihar. However, the authorities were trying to open up the network since late 1990s, they were able to finally convict the wrongdoers after a long wait of 20 years. In the meantime, many were found not guilty and many were found guilty and sent to prison and imposed different fines. An analysis of the involvement of Lalu Prasad Yadav in the scam indicates that it might be difficult for the leader to get such respect again in the political world. 

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