SCANDAL

Slow progress on the Telgi trail

RAVI SHARMA
in Bangalore

The Stamp Investigation Team in Karnataka has arrested two officials of the Prisons Department, but in the absence of information from whistle-blowers it is making slow progress.

"I CHALLENGE you, you can't stamp out fake stamp paper, it has been going on since pre-Independence days. Mine is only one of the gangs and it is not the biggest," said Abdul Kareem Telgi, the prime accused in the multi-crore fake stamp paper scam, to his interrogators of the Stamp Investigation Team (Stampit) at the Central Prison in Bangalore. Investigators trying to unravel the case in Karnataka may be inclined to agree, given the extent of the scam.

GAUTAM SINGH/AFP

Nanjappa, Assistant Superintendent of the Bangalore Central Prison, being taken to a court in Bangalore on December 10 following their arrest in the stamp paper scam.

Telgi, they believe, could not have run his empire without the active support of police officers and politicians and the use of the printing press. Although Telgi has refused to speak about the four Ps - police officers, politicians, printing press and the property amassed by him - so far, informed sources said several Karnataka politicians, both in the ruling Congress(I) and in the Janata Dal, along with a number of police officers, have helped him. Though no police official or politician in Karnataka has been arrested in the scam so far, a number of them have been identified by the investigative agency and some have been called in for questioning.

On December 9, two senior officers of the Prisons Department, P.N. Jayasimha, a former Superintendent of the Bangalore Central Prison, and Nanjappa, an Assistant Superintendent at the prison, became the first Karnataka government officials to be arrested in connection with the scam. They were charged with "colluding and conspiring" with Telgi in running his business from the Central Prison. Telgi was said to have been allowed free use of mobile phones and laptops in his cell.

It was by coincidence that Telgi's involvement in the stamp paper scam in Karnataka came to light. In August 2000 a posse from the Bangalore City police arrested two persons in Bangalore on the charge of being in possession of fake stamps and stamp paper. A case was registered in Bangalore's Upparpet police station and investigations led to the seizure of fake stamps and stamp paper and embossing and franking material valued at Rs.9.92 crores. Interrogation of the accused revealed the involvement of a network of scamsters. Seven charge-sheets were filed against 28 persons, eight of whom, including Telgi, were then absconding.

Telgi was arrested in Ajmer, Rajasthan, in November 2001 by a Bangalore City Police team and lodged in the Bangalore Central Prison. The Karnataka High Court and the Supreme Court turned down his pleas for bail. According to informed sources, with the help of prison staff, Telgi continued to meet his associates and monitor the sale and circulation of fake stamps around the country. He is said to have even disposed of property worth crores and collected huge sums of money.

The Bharatiya Janata Party and the Janata Dal (Secular) released copies of a letter written by Rehan Baig, brother of Karnataka Cabinet Minister Roshan Baig, to the Commercial Tax Officer on March 6, 2000, which stated that he was giving a portion of his premises on Brigade Road in Bangalore "to his family friend Abdul Kareem Telgi of Metro Corporation for marketing purposes without any rent and security deposit".

INDRANIL MUKHERJEE/AFP

P.N. Jayasimha, former Superintendent.

Given the inter-State ramifications of the case and the allegations of the involvement of police officials and politicians, the then Bangalore City Police Commissioner, H.T. Sangliana, had initially favoured a probe by the Central Bureau of Investigation (CBI). But in January 2002, the S.M. Krishna government constituted the Stampit, headed by R. Sri Kumar, Additional Director-General of Police who has worked for the CBI for 11 years. This decision came despite a three-day logjam in the State legislature over the Opposition's demand for a CBI probe.

The Stampit is investigating three cases against Telgi and his associates in Karnataka. So far 11 charge-sheets have been filed, more than 600 people have been questioned and 54 of a total of 70 accused are in custody. The Stampit has recovered stamp paper and stamps worth Rs.204 crores from Chennai, Hyderabad, Tiruchi, Coimbatore and Madurai, while other police outfits have recovered Rs.240 crores worth of stamp paper based on information provided by Stampit.

The first of Stampit's cases relates to the one registered at the Upparpet police station. In the second, registered at the Madiwala police station in Bangalore, Telgi and 19 others have been charged with continuing their criminal acts from the prison. Nine mobile phones, six SIM cards, four computers, books of accounts, applications for stamp vendor licence, and Rs.2.75 lakhs in cash were recovered. The third case, registered at the Vidyanagar police station in Hubli, relates to the arrest of two close relatives and confidants of Telgi and the seizure of Rs.50 lakhs.

According to Sri Kumar, Telgi and his associates first mastered the process of printing and developing fake revenue stamps, adhesive stamps, court fee stamps and non-judicial stamp paper. They also established a well-organised network of sales outlets involving unemployed youth and unskilled persons, and identified the main users/source of purchase of these security documents. They included commercial banks, financial institutions, insurance companies, industrial houses, corporate offices and stock brokers. They approached these potential customers with fraudulently obtained stamp vending licences to show that they were suppliers of genuine stamps and stamp paper issued by the government. Even when there was a shortage of genuine stamp paper, they were a source of ready supply. In the process, they sold several documents worth hundreds of crores of rupees for over a decade.

Very early in the investigations, the Stampit set up a web site in English, Kannada and Marathi giving details of the scam such as thumb sketches of the team members, the cases that had been booked and their status, photographs of the accused, press releases and it also sought comments from the public. Said Sri Kumar: "The idea was primarily to get local people to give us information in confidence. We also wanted to make our investigations as transparent as possible since the case is a sensitive one and has inter-State ramifications." While the web site has been useful in disseminating news on the status of the investigation, confidential information from whistle-blowers has been hard to come by.

The Stampit has also ensured that all searches and statements of the accused are videographed and documented. The Stampit has also been able to retrieve crucial information - details of business transactions, telephone lists, and names of people working in various cities and towns - from computers seized from the accused. The use of technology has also allowed the Stampit to prove from where the printing positives had been stolen. But the cutting edge of the Stampit's techno-savvy investigation is its real-time electronic surveillance operations and telephone interception.

Telgi's teenage daughter provided the investigators with a lucky break when they questioned her in Mumbai. She let slip that she had spoken to her father "last night" over the telephone. While this confirmed the suspicion of officers that Telgi was continuing his operations from prison, the problem was one of tracing the calls.

Said Sri Kumar: "Every time he changed his SIM card our source went dry. We had to start all over again. But we were able to outsmart him. We had to identify the voice of the person being called and establish his identity, decipher the content, then trace him down... . They also got suspicious and started talking in monosyllables or saying things just to put us off track. Also, telephonic interception is not evidence by itself. We have to do the ground investigation and link the two to prove our case. This is taking time."

Many of the accused have been put through a lie-detector test, but Telgi is yet to take one. The Stampit has sought a court order to permit it to conduct the P300 brain fingerprinting, and the nacro-analysis lie-detector and voice recording tests on Telgi. But these tests are only indicative and their evidential values are debatable.

The interception of telephone calls - 1,300 calls in Urdu, Hindi, English, Kannada and Marathi - has provided the Stampit with over hundred hours of recorded conversation on 54 tapes. The Bombay High Court has called for the tapes to be produced before it.

Stampit officials are reluctant to confirm whether policemen were involved in aiding and abetting Telgi's business. Said an informed source: "Telgi had the help of so many people. Some policemen may have helped him by not conducting a proper investigation in cases where Telgi was an accused. Charge-sheets could have been filed only cursorily and all the evidence may not have been collected. But it is the people in the India Security Press (ISP), Nashik, who are most responsible. Their involvement has been established. They actively collaborated with Telgi, provided him with the know-how, designs, speciality paper, ink and production schedules."

Sources also said that even the dandy roll, a security feature used for the production of the watermark, was "given" to Telgi and his associates. Ten perforating machines used for the manufacture of stamp paper had been clandestinely removed from the ISP. A retired Chief Engineer at the ISP has been arrested in this connection. The ISP also failed to stick to its obligation to supply the indented quantity of stamp paper. Telgi and others used the opportunity to sell their fake papers.

The Karnataka Revenue Department, despite falling revenues, was just a silent spectator. For example, the total number of non-judicial stamps indented by Karnataka from the ISP in 1997-98 was around 563 crores and the corresponding value of stamp duty registered was Rs.538 crores. In 1998-99, the number declined to 537 crores and the value of stamp duty registered was down to Rs.477 crores. In 1999-2000, 433 crore stamps were indented for from the ISP, but the value of stamp duty that was registered was Rs.583 crores. In 2000-01, though the number of stamps requisitioned was only 386 crores, the value of stamp duty registered was Rs.741.46 crores. In other words, though the Karnataka government had registered Rs.741.46 crores on paper, the beneficiary was not the ISP but sellers of fake stamps. The following year, after the scam was exposed, the indent was for 766 crore stamp papers and the stamp duty registered was a more satisfying Rs.799 crores.

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