1200-Crore Fertilizer Subsidy Scam: Allahabad High Court Hands Over Probe To CBI To 'Unveil Dolphins Accused'

The Allahabad High Court on Wednesday handed over the probe into an alleged scam of Rs. 1200/- crores in the subsidy to the manufacturers of fertilizers, without the actual supply of fertilizers by the manufacturers to the distributors.

The Bench of Justice Gautam Chowdhary ordered thus in a 482 CrPC plea filed by one of the accused in the scam, Avinash Kumar Modi who sought for quashing the entire criminal proceedings in the case against him under Sections 409, 420, 467, 468, 471, 120-I.P.C.

It was the contention of the petitioner that the Economic Offenses Wing, which is probing the case, made him a scapegoat by leaving big fishes aside. It was the specific plea of the applicant that high government officials were involved in the scam and the company which actually received the benefit of the scam by claiming the subsidy, had been exonerated.

Lastly, it was prayed that the proceedings pending before the Chief Judicial Magistrate, Farrukhabad as well as to charge sheet of November 2019 and the summoning order of September 2021 be quashed.

The case in brief

In the year 2000, the Government of U.P. issued a letter regarding a scam of Rs. 1200/- crores in the subsidy to the manufacturers of fertilizers, without actual supply of fertilizers by the manufacturers to the distributors.

It was alleged in the letter that wrongful loss had been caused to the State Exchequer and in compliance to an order passed by Additional Chief Secretary, Agricultural Commissioner, an investigation was carried on in this alleged scam.

In the investigation, it was revealed that during the financial years 1998-99 and 1999-2000, the sale and purchase of 3,396.025 mt. tonnes of rock phosphate and 6080.329 mt. tonnes of single super phosphate claimed by M/s Madan Madhav Fertilizers and Chemicals Pvt. Limited, Fatehgarh, was found to be false and thus embezzlement of Rs. 48,18,243.04 had been calculated and the subsidy claimed from the Government on false and frivolous transactions.

In the aforesaid scam, M/s Ujjwal Trading Company, was also found to be involved, of which the applicant (Avinash Modi) is stated to be the proprietor. However, he denied the charges and said that the Company was already closed due to losses but his uncle continue the operations of the company on paper 

Court's observations 

At the outset, the Court noted that several high officials were prima facie involved in the scam, however, there was not even a whisper against them and they were neither interrogated nor any charge sheet has been filed against them.

Further, the Court took a serious note that F.I.R. was lodged against as many as 20 accused persons but the charge sheet which is under challenge in the instant plea, had been filed against two accused persons and another charge sheet of April 2021 had been filed against three accused persons.

Significantly, observing that the remaining 15 Dolphins accused persons have been exonerated by the Investigating Agency, the Court further remarked thus:

"Since the scam is of 1200 crores, whereas the allegation of mis-appropriation of Rs. 48,18,234.04/- has been levelled against the applicant but there is nothing on record to show, as to how and under what circumstances, M/s Madan Madhav Fertillizers and Chemical Ltd. has been given clean chit and what has happened with regard to remaining Rs. 1152 crores and thus it appears that the same has been misappropriated. The investigation appears to be defective and to unveil the Dolphins accused, who are untrapped and keeping in mind the mis-appropriation of huge amount of public money, the Court is of the opinion, that the matter requires comprehensive further investigation."

Accordingly, the Court directed that the matter be further investigated by Central Bureau of Investigation (C.B.I.) against the named accused persons in the F.I.R., as well as charge-sheet under the scrutiny of this Court and a progress report with regard to the same shall be placed before this Court on March 21, 2022.

Also, till the next date of hearing, the applicant was granted interim protection.

Case title - Avinash Kumar Modi v. State of U.P. and Another

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