The CBI Friday registered an FIR against Lalu Prasad, his wife Rabri Devi, their son and Bihar Deputy Chief Minister Tejashwi Yadav, and five others in a case of alleged corruption linked to the award of a tender for the maintenance of two railway hotels in Ranchi and Puri in 2006 when the RJD chief was union railway minister.
The agency also conducted raids in connection with the case at 12 locations, including the Patna residence of Prasad at 10, Circular Road, and other locations in Delhi, Ranchi, Puri and Gurgaon.
The CBI action triggered a political firestorm with Prasad accusing the agency of “targeting” his family and the Congress claiming that “central law-enforcing agencies” had become “captive puppets of the BJP government” at the Centre.
“They want me to surrender…but I will finish them off,” said Prasad in Ranchi, where he attended a court hearing linked to a fodder scam case in which he is an accused.
Senior BJP leader and Union Minister M Venkaiah Naidu denied any “political vendetta” in the raids and said that the “CBI is doing its duty”.
Bihar Chief Minister Nitish Kumar, who also heads the JD(U), which is in a ruling alliance with RJD, did not react publicly to the raids. Officials said he had left for Rajgir in Nalanda on Thursday night due to “health reasons” and had called for a meeting with senior officials.
According to CBI, in 2006, Prasad allegedly favoured Sujata Hotels Pvt Ltd, a company owned by two Patna-based businessmen Vijay Kochhar and Vinay Kochhar, while granting the tender for the maintenance of the two hotels. In return, the CBI alleged, Rabri Devi and Tejashwi Yadav were given prime property in Patna at throwaway prices.
“The case is of criminal conspiracy (section 120-B) and cheating (section 420) under the Indian Penal Code, and corruption,” said Rakesh Asthana, additional director, CBI, who is supervising the case.
Asthana said the agency registered the FIR on July 5, after it was convinced of the veracity of the allegations during a preliminary enquiry.
The accused named in the FIR are: Lalu Prasad; Rabri Devi; Tejashwi Yadav; Sarla Gupta, wife of Prem Chand Gupta, RJD MP and a close aide of Prasad; Vijay Kochhar and Vinay Kochhar, directors of Sujata Hotels and owners of Chanakya Hotel in Patna; Delight Marketing Company Ltd, now known as Lara Projects; and the then IRCTC managing director P K Goel.
Asthana said a conspiracy was allegedly hatched between 2004 and 2014, following which the Railway-run BNR hotels in Puri and Ranchi were transferred to IRCTC and later given on lease to Sujata Hotels for operations, maintenance and upkeep.
“The allegation is that… the tender process was rigged and manipulated, and conditions were tweaked to help the private party. In return, a three-acre land in western Patna was given to Delight Marketing, which is known to the family of Prasad, at a very low cost. Subsequently, between 2010 and 2014, this land was further transferred to another company, Lara Projects, owned by the family members of Lalu Prasad,” he said.
According to CBI, this land transfer, which was done through purchase of shares, was allegedly sealed at “a very low price”.
The CBI has alleged that Delight owned the land valued at a market price of over Rs 94 crore and a circle rate of over Rs 32 crore, before the company was sold to Lara Projects, owned by Tejashwi and Rabri, for Rs 65 lakh.
Referring to the hotel tender, the CBI’s FIR states that in 2001, a decision was taken to hand over management of catering services of Indian Railways, including its hotels, to IRCTC. Following this, the FIR states, an MoU was signed between the Railways and IRCTC on March 19, 2004.
The CBI FIR alleges that Prasad, the then railway minister, allegedly entered into a “criminal conspiracy” with the owners of Sujata Hotels, Sarla Gupta and IRCTC officials to obtain “undue pecuniary advantage to himself and others”.
It alleged that on February 25, 2005, Vinay Kochhar sold the three acres of land in Patna through 10 sale deeds for Rs 1.47 crore to Delight Marketing in which Sarla was a director as a “front benami holder for and on behalf of Lalu Prasad Yadav”.
The FIR alleged that the “commercial property” was sold at a price far below the circle and market rates, and was falsely shown as agriculture land to evade stamp duty.
It was also claimed that payment for the land sold by Kochhar was arranged “surreptitiously” by Delight in the form of an investment in their company through Ahluwalis Contractors and its promoter Bikramjeet Singh Ahluwalia.
“On the day the sale deeds were executed by the Kochhars in favour of DMCL on February 25, 2005, the Railway Board… informed IRCTC about its decision for transfer of BNR hotels to IRCTC on ‘as is where is basis’,” the FIR alleged.
According to CBI, the two hotels were transferred to Sujata Hotels allegedly through a “rigged and manipulated” tender process “managed” by Goel, the then MD of IRCTC. The Railway had first sought bids for developing, operating and maintaining these hotels on September 16, 2006, it said.
To “restrict” competition for the hotels in Ranchi and Puri, IRCTC officials acted in a “peculiar” manner, the FIR alleged.
Instead of issuing a fresh Notice Inviting Tender (NIT) for maintenance, the officials allegedly issued a corrigendum with regard to an earlier NIT for Rail Ratna hotels issued on September 16, 2006, the CBI alleged.
Through another “misleading” corrigendum in November the same year, the eligibility criteria for the bids were tweaked so that Sujata Hotels would qualify, the CBI alleged. It was after this corrigendum that Sujata Hotels bid for the tender, it alleged.
The CBI claimed that its probe also found that while around 17 bid documents were sold for the Ranchi and Puri hotels, IRCTC did not have details of any bidders or documents except of Sujata Hotels.
It has also alleged that to “render undue pecuniary gains” to Sujata Hotels, another bid for the other hotel in Puri was “deliberately and unreasonably” given low marks under the technical evaluation. “As a result, Sujata Hotels remained the only bidder in financial evaluation,” it alleged.
After the tender was awarded to Sujata Hotels, the ownership of Delight also changed hands from Sarla Gupta to Rabri and Tejashwi, between 2010 and 2014, the CBI claimed.
According to the CBI, the value of property sold by the Kochhars to Delight at 1.47 crore in 2005 spiralled to Rs 32.5 crore as per circle rate and Rs 94 crore as per market rate. “The shares of a company having a net worth of Rs 32.5 crore was transferred by the family member of P C Gupta to the family members of Lalu Prasad for a nominal amount of Rs 64 lakh,” it alleged.
In its FIR, the CBI has alleged that Prasad was aware of details of the tendering process and was hence culpable. “The enquiry has revealed that official communication of Railway Board marked to Minister of Railways and the instructions given by the Minister to Chairman, Railway Board during the period 2004-06, indicate that Lalu Prasad Yadav as Railway Minister was aware about the whole matter and was keeping a track of the tender proceedings initiated by IRCTC,” the FIR states.
Apart from Prasad’s residence and other locations in Patna, the CBI also conducted raids at New Friends Colony in Delhi and at Chanakya BNR Hotel in Puri.