BUSINESS LAW

TELGI SCAM

Group 11
APOORV SINGHAL P181B11
MADHAV GOYAL P181B26
SAJAN VERMA P181B41
YASH SHARMA P181B56
 ISSUE
Abdul Karim Telgi was born in 1961 in Khanapur. He belonged to a middle class
family. His father passed away when he was very young and eventually he had to
pay for his own education. He moved to Saudi Arabia later in his life. He returned
to India after seven years, when he began duping people by printing counterfeit
stamp paper in India.
The Telgi scam or the stamp paper scam is valued at over Rs 3,000 crore
The scam had two aspects – creation of counterfeit documents, and creating a
scarcity of authentic documents.
Telgi and his team created counterfeits of stamp papers, judicial court fee stamps,
revenue stamps, special adhesive stamps, foreign bills, brokers notes, insurance
policies, share transfer certificates, insurance agency stamps, and other legal
documents.
Investigations revealed that he bribed the officials of the Indian Security Press to
obtain government printing and perforating machines, which were used to produce
the fake documents.
They also created an artificial scarcity of official documents with the help of some
officers from the Indian Security Press. Documents worth several crores were
dispatched to addresses that didn’t exist, in order to create this scarcity.

KEY PLAYERS
 Two MLAs- Anil Gote (MLA Dhule,Maharashtra) and Krishna Yadav(
Himayat Nagar,Andhra Pradesh)
 Former A.P.minister C.B.K.Yadav
 Former Mumbai Police Commissioner R.S.Sharma
 Former Joint Commissioner of Police, Crime branch,Mumbai,S.S.Vaghal
 Former Deputy Commissioner (Detection) of Mumbai Police, Pradip
Sawant.
 Kishore patil(suspended IPS officer)
 Ratan Soni (Cell mate) – Gave the idea of new scam with Stamp Papers
 Former revenue minister in Maharastra’s Congress government Vilasrao
Deshmukh – Provided License to Telgi as Stamp Vendor
 TRIGGER
It was the arrest of two men who were transporting fake stamps papers, that
snowballed into one of the biggest scams in India. These two men were arrested
from Bengaluru’s Cottonpet, on 19 August 2000, based on a tip-off. During the
interrogation, these men spilled the beans about a network supplying these fake
documents, resulting in raids across Bengaluru.

Whistle Blowers
 Shamshuddin Miyalal Mushrif, Deputy Inspector General of Police,
Mumbai
- Revealed the alleged involvement of top police officials.
- Mushrif had questioned the conduct of his boss, Pune Poilice
Commissioner Ranjit Singh Sharma and another official during his
tenure.
- Investigated and forced the scam to come to light
- Was forced to resign.

 Jayant M Tinaikar, Telgi’s childhood mate.

- Reported different frauds to police
- Wrote an official letter to the president of India regarding the violations
- Became bankrupt and received death threats as well but his courage
unfolded the scam.
 VIOLATIONS
A special Central Bureau of Investigation court framed charges against stamp
scam prime accused Abdul Karim Telgi and his associate Sanjay Gaekwad in a
case registered in 1995.

The court framed various charges including sections-

 IPC 120 (B) - Punishment of criminal conspiracy

 IPC 255 - Counterfeiting Government stamp
 IPC 256 - Having possession of instrument or material for counterfeiting
Government stamp
 IPC 258 - Sale of counterfeit Government stamp
 IPC 259 - Having possession of counterfeit Government stamp
 IPC 263 - Erasure of mark denoting that stamp has been used
 IPC 420- Cheating and dishonestly inducing delivery of property, read with
IPC 511 - Punishment for attempting to commit offences punishable with
imprisonment for life or other imprisonment.
 section 63 of the Bombay Stamp Act.

These sections pertain to conspiracy, counterfeiting government stamps,

possessing fake stamps, selling counterfeit stamps and cheating.

Judge U D Salvi, however, granted them 15 days to move the Bombay high court
for filing an appeal against the order.

Both, along with their associate Ramratan Soni, faced charges of circulating fake
stamp papers in the market.
 RESOLUTION
The Special Investigating Team (SIT) of the Maharashtra Police put the total value
of the scam at Rs.21,28,47,07,824. Later this was revised to Rs. 32,000 crores by
the Union Home Secretary. Seized fake stamps, valued at Rs.170 crores,
displayed in Bangalore.
EX-Finance Minister Jaswant Singh was Speaking in the Lok Sabha on a calling
attention motion on the stamp paper scam, the minister said the agencies had
registered 74 cases in this connection, with 15 against chief accused Abdul Karim
Telgi.
Special Investigation Team (SIT) first taken the case during 1995-2003 and then
hands over stamp scam cases to Central Bureau of Investigation (CBI) on April 13,
2004
 On 17 January 2006, Telgi and several associates were sentenced to ten
years’ rigorous imprisonment.
 On June 28, 2007 Telgi was sentenced to rigorous imprisonment for 13
years.
 Fined a whopping Rs. 202 crores on various counts in one of the main cases
of the scandal.
 Honorable Judge Chitra Bedi sentenced 42 other accused in the case, who
too had pleaded guilty, to rigorous imprisonment for up to six years and
imposed fines on them.

This major scandal made government more responsible in order to avoid such
events in the future. Few of the steps taken included:
 Government started verifying the stock of Stamp Paper with the authorized
vendors.
 Banks ensured that the purchase of stamp papers were made by its own
staff directly from the treasury.
 Bank managers ensured that further transactions were authentic and proper
 Public sector banks became more responsible.
 GROUP VIEW
With his death, Abdul Karim Telgi took his personal and professional secrets to the
grave. India’s criminal justice system could do nothing to unearth the specifics of
his financial collaboration with police officers, bureaucrats and heavyweight
political godfathers in Maharashtra and other states. Telgi, a school dropout who
sold peanuts at railways stations in the 1980s to make a living, built an elaborate
counterfeit operations network worth thousands of crores across several states
including Maharashtra, Karnataka, Andhra Pradesh, Delhi and Gujarat.

Was it possible for Telgi to build such a well-oiled crime syndicate without the
involvement – direct or indirect – of politicians, police officers and senior
bureaucrats? What happened to the money trail? Did the country become free of
counterfeit stamps and stamp papers after Telgi went to jail? These questions
should trouble India’s policy makers and educated class.
If the structural loopholes that helped Telgi and his political and police mentors and
partners in crime make a mockery of the might of the Indian state go unattended,
there will be consequences. And India’s national security will not be the only
casualty. It is time we exhume the remains of the fake stamp and stamp paper
scam and make the machinery of government more accountable.