Delhi High Court clears way for brothers’ trial in Telgi scam: How 1% discount unravelled fake stamp paper empire

Court’s reasoning: More than mere employees

• The main ground for seeking discharge is that other marketing executives have been discharged.
• They were discharged as it was found that they were not aware that they were doing marketing in respect of stamp papers, etc, which were forged.
• The case of the prosecution shows that there was a huge scam of sale of fake stamp papers, of which Abdul Karim Telgi, along with Abdul Hafiz, was the kingpin.
• They spread the network through their companies to sell counterfeit stamp papers by projecting them to have been purchased from the government treasury.
• The case against the petitioners is specific, wherein there are allegations of a proprietorship firm in the name of “Capital Services” having been opened by Ramneek Kanwar, which was supplying counterfeit stamp papers and Dheeraj Kanwanr, the brother of Ramneek Kanwar, was equally involved in this business.
• Ramneek Kanwar has been found to be running his own firm by the name of “Capital Services” and supplying counterfeit stamp papers by claiming that he had obtained them from the government treasury.
• His brother Dheeraj Kanwar was a co-conspirator and was involved with him in the sale of counterfeit stamp papers.
• The investigations revealed that they had sold the counterfeit stamp papers to various companies, including foreign companies, and had received money from them, which was credited to their account.
• The entire money was withdrawn and the account closed in the year 2001.
• The trial court has rightly directed the framing of charge against the petitioners.
• Unless there is any fundamental error or impropriety leading to miscarriage of justice, the order of the trial court cannot be disturbed
• There is no infirmity in the trial court order.
• The revision petition is accordingly dismissed.

Scam that refuses to fade

• The fake stamp paper scandal, which came to light in the late 1990s and early 2000s, was one of the country’s largest financial frauds, spanning multiple states and involving massive losses to the exchequer.
• Though Telgi himself was convicted in several cases, investigations in connected matters have continued for decades – a reminder of the scale and complexity of the alleged conspiracy.
• For the Kanwar brothers, the high court’s ruling means that the long-pending criminal trial will now proceed bringing back into focus a case that began with a marginal 1 per cent discount and exposed a nationwide counterfeit empire.

Small discount, massive fraud

• In August 2001, a seemingly harmless 1 per cent discount on non-judicial stamp papers set off a chain of events that would unravel a counterfeit racket linked to one of India’s most notorious financial scandals.
• The case began with a complaint lodged on August 20, 2001, by Vikas Gupta, a property consultant operating out of Daryaganj in Delhi.
• Gupta told police that he and his father had received a call from a woman claiming to represent a company called “Capital Services”, offering non-judicial stamp papers at a 1 per cent discount.
• The company claimed to be sourcing stamps from the government treasury.
• Gupta placed an order for stamp papers worth Rs 26,000.
• The delivery was made the same evening, and payment of Rs 25,740 was made after deducting the discount.
• It was only when Gupta’s father closely examined the stamps that doubts arose.
• The next day, they took the papers to the Tis Hazari Treasury and were informed that the serial numbers had never been issued by the treasury.
• Realising they may have stumbled upon a fraud, the complainant alerted the police and placed another order worth Rs 16,000 as part of a planned trap. When the delivery agent arrived, he was apprehended, and a First Information Report (FIR) was registered at Daryaganj police station.

Raids, recoveries wider network

• What followed were raids that uncovered a larger operation.
• Police recovered counterfeit stamps worth over Rs 8.35 lakh from premises in Connaught Circus.
• At another location in R K Puram, individuals were allegedly found affixing stamps onto booklets of finance companies.
• Rubber stamps of Delhi Treasury, SBI Pune Treasury, and even seals of a notary public were seized during the investigation.
• Given the scale of the operation, the case was transferred to the Central Bureau of Investigation (CBI) on December 11, 2003.
• The CBI re-registered the case on January 9, 2004.
• Forensic examination by the India Security Press, Nashik, later confirmed that many of the seized share transfer stamps, foreign bill stamps, revenue stamps and non-judicial stamps were forged.
• Investigators concluded that the racket was linked to a larger counterfeit stamp paper syndicate allegedly run by Telgi and his associates, who had floated entities such as “Capital Services” in Delhi in the mid-1990s to circulate fake government stamps.

Role attributed to Kanwar brothers

• According to the CBI, Ramneek Kanwar introduced himself in July 1999 as a marketing executive of Capital Services.
• He supplied foreign bills and share transfer stamps to several companies, claiming they had been purchased from the Tis Hazari Treasury.
• According to the investigation, foreign bill stamps worth approximately Rs 34 lakh were allegedly supplied to M/s Denso Haryana Private Limited between September 1999 and October 2000.
• Share transfer stamps worth Rs 1.18 crore were reportedly delivered in connection with Yamaha Motor Company transactions.
• Investigations revealed that no such stamps had been issued by the treasury in favour of these companies.
• The CBI alleged that “Capital Services” was a sole proprietorship concern of Dheeraj Kanwar, who had opened a current account in a cooperative bank in April 2000.
• Over Rs 21 lakh was credited into the account before it was closed in 2001, and the entire amount was withdrawn.
• Three cheques issued by corporate entities were allegedly deposited into the firm’s account, which the prosecution claims were proceeds from the sale of counterfeit stamps.
• The brothers were arrested on June 22, 2004, and later released on bail in May 2006.
• They were named in a supplementary chargesheet filed on August 20, 2004.

Legal challenge: Plea for parity

• The trial court had directed framing of charges on February 26, 2008, under Sections 120B (criminal conspiracy), 258 (Sale of counterfeit Government stamp), 259 (Having possession of counterfeit Government stamp), 260 (Using as genuine a Government stamp known to be a counterfeit), 471 (Using as genuine a forged document or electronic record) and 420 (cheating) of the Indian Penal Code (IPC).
• Challenging this order, the Kanwar brothers argued before the high court that other similarly placed marketing executives had been discharged.
• They contended that there was no evidence of any agreement with Telgi or others to commit illegal acts, and no proof that they had knowledge that the stamps were forged.