Abdul Karim Telgi, the brain behind the multi-crore stamp paper scam, is convicted. But a lot of facts about the scam, including the names of his political associates, have not yet been revealed.
ABDUL KARIM TELGI, mastermind of perhaps the biggest ever scam the country witnessed in recent history, has finally been convicted. The judgment was really no surprise. Obviously, a man who defrauded the exchequer of thousands of crores of rupees by selling fake stamp paper could not possibly be allowed to walk free. However, the severity of the punishment seems hardly the issue in the Telgi case.
Investigations, which began two years ago, could have revealed the role of several prominent politicians and possibly some bureaucrats in the scam. More important, some observers say, this was a perfect opportunity for lawmakers to replace an archaic procedure with a foolproof system using modern technology. But neither has that happened.
On January 17, 2006, almost 11 years after the first case against Telgi was registered, special Central Bureau of Investigation (CBI) Judge U.S. Salvi pronounced the scamster guilty on seven counts: criminal conspiracy, counterfeiting government stamps and cheating, among others. He sentenced Telgi to 10 years of rigorous imprisonment (RI) and imposed a fine of Rs.1.4 lakhs. Two associates of Telgi, Sanjay Gaikwad and Ramratan Soni, were also convicted to 10 years' RI. It was the latter who introduced Telgi to the art of counterfeiting when they shared a prison cell in 1991. At that time, Telgi was serving time in a cheating case.
Telgi was convicted in a case, which was filed in 1995 by a solicitor firm, Poornanand and Company. The firm bought Rs.16 lakhs worth of special adhesive stamps from one of Telgi's vendors but were not given a receipt. This prompted it to complain to the General Stamp Office, which could not trace the stamps, which essentially meant the stamps were fake. This case is one of the 15 pending against Telgi.
During the court hearing, Telgi pleaded his case from the Yerawada jail in Pune via videoconferencing. Clean-shaven but looking gaunt, he claimed that he was innocent on many of the charges. With folded hands he pleaded leniency because he had been diagnosed "HIV positive, a diabetic and was dying". In fact, the defence asked the court to give Telgi minimum sentence because of his illness but prosecutors argued that he was being given adequate medical attention.
With Telgi's health deteriorating rapidly, the prosecution has been pressuring the court to expedite the other cases against him. In his present state of health, it believes he can reveal the extent of the scam and, more important, name some of those involved in the scam. Special Public Prosecutor Raja Thakare told the media that Telgi was deliberately delaying the trial by promising to produce evidence that would implicate prominent people in the scam. When it was time to do so he used all sorts of stalling tactics, he said. Telgi once claimed that he had documents that would expose some big names. The Judge postponed the hearings until Telgi produced the papers. At the last minute Telgi refused to hand over the documents, which made the prosecution wonder if there were any such papers and whether he was just trying to delay the trial. The other obstruction in completing the trial was that the CBI and the Special Investigation Team (SIT) probing the scam were locked in a legal battle over issues relating to jurisdiction.
THE money involved in the Telgi scam has been pegged at anywhere between Rs.3,000 crores and Rs.30,000 crores. Investigations are still to reveal the total amount. The scam involved the printing and selling of thousands of crores worth of counterfeit stamps and stamp paper. Telgi's operations extended across seven States through a network built since 1995. Maharashtra, Karnataka and Andhra Pradesh were his hubs but the scam eventually spread through Delhi, West Bengal, Rajasthan, Gujarat, Haryana and Madhya Pradesh.
Telgi's modus operandi involved washing cancelled stamp papers with chemicals, which would make them look as good as new. He would sell them through his network of front men. Additionally, he cultivated officials at the Security Press in Nashik, where stamp papers are printed. With their connivance he used government machinery to print stamp paper. He eventually bought some of the machinery and started counterfeiting on his own.
His "executives" would approach big corporations such as Indian Oil or the Life Insurance Corporation and offer them discounts of up to 5 per cent - a substantial amount given that most stamp vendors give discounts up to 2.5 per cent.
In 1995, Telgi was jailed in a cheating case. But he managed to get released even though anticipatory bail could not be granted for his crime. Once out, his business flourished. The probe has revealed that Telgi colluded with top police officials and politicians to expand his operations. Investigators would later find that Telgi had entertained several prominent police officials in his South Mumbai apartment.
Apparently, Telgi established contact with politicians through their henchmen. He never entered into too many deals. Once he reached an agreement for the circulation of stamps, he would offer them a Statewide and, in some cases, countrywide contract on the deal. Clearly, he was clever enough to protect himself as he regularly recorded all his conversations. According to Public Prosecutor Thakare, he recorded them with the introduction by the person he spoke to so he had enough evidence to blackmail. There are almost 100 hours of taped conversations in the hands of the SIT. Owing to the court case, this valuable evidence remains locked. "Some top names will come out and many heads could roll once the tapes are transcribed," Thakare told Frontline.
The law caught up with Telgi in 2001. The Karnataka Police, who were tracing a stamp paper fraud, found that the evidence led to Telgi. They caught him in Bangalore. Even in jail, Telgi is reported to have continued his operations. In 2002, the Pune Police seized a car carrying fake stamp papers in Bund Garden and once again all evidence led to Telgi. The investigations following this seizure unravelled an elaborate network of fraud spanning the entire country.
As politicians and bureaucrats soft-pedalled the issue, investigators were never given complete freedom to probe the scam. Finally, in November 2003, with public pressure mounting along with social and anti-corruption activist Anna Hazare filing a public interest petition in the Bombay High Court, the court appointed the SIT to investigate the scam. The next few months saw a once-tough Mumbai Police force crumble. Upwards of 50 police officials were arrested. Among them was Inspector-General of Police Sridhar Vagal, who was the first to be caught, for accepting Rs.72 lakhs from Telgi. In addition, Vagal had reportedly amassed property worth Rs.50 crores, which was completely disproportionate to his known sources of income.
The most shameful involvement was that of Mumbai Police Commissioner R.S. Sharma. The SIT presented to the court evidence of Sharma's links to Telgi and his repeated failure to arrest the conman in spite of being presented with an opportunity to do so several times. It also exposed the extent of political interference in the functioning of the police. At that time Deputy Chief Minister and Home Minister Chuggan Bhujbal was criticised for supporting Sharma and for keeping up the constant refrain that Sharma was clean. Bhujbal later had to retract his statement and offer his resignation. It was not accepted but he quit his party post in order to avoid embarrassing the Nationalist Congress Party (NCP).
Stamp paper and special stamps have to be used for every legal transaction. It is a form of revenue for the government. A certain percentage of the deal is given to the exchequer as a sort of fees. Anyone can apply for a stamp vendor permit and be given a licence. Telgi secured a licence through a politician friend in Dhule.
"The scam was possible because of a faulty system which involved private vendors," says Amit Gulati, a real estate lawyer. Stamp papers must be sold through all nationalised and private banks and probably the post offices. They could be given a commission on sales. This way there is some accountability. "Or better still, just abolish the whole system," he says. Why not just charge a fee and computerise all records? Why should we need stamp paper? There are other alternatives to certify that a document is legal and valid should a dispute occur, he says.
What is the point of improving the authenticity and quality of paper? In any case people underdeclare the value of the transaction so that they do not have to pay the government heavy amounts. This encourages black money transactions. "It is completely archaic and not needed in today's times," says Gulati.
Telgi began his career as a fruit seller on the railway platform of Khanapur in his native Belgaum district in Karnataka. He moved to Mumbai in search of work. For a while he worked in the visa section of a travel agency. He went to West Asia in search of work. When he returned he met a gang that removed the seal from postage stamps and resold them. Once he learnt the art he moved on to bigger things.
