Photo: Tehelka Archives
Photo: Tehelka Archives

It starts with seemingly innocuous acts such as an official charging ‘speed money’ for doing what is supposed to be his duty in service of the public. Or a traffic cop taking a small bribe from a motorist who jumped a red light, instead of serving him a proper challan. It gradually becomes a habit, with newer ways of making a dishonest living opening up. Like in the case of Abdul Karim Telgi, a fruit seller who kept cheating the system till the time the Stamp Paper Scam became public knowledge. In India, which is going to cross the 69-year mark of independence, corruption seems to be an integral part of freedom. No wonder then that in its 2014 report, graft watchdog Transparency International ranked India as 85th among 175 countries on the corruption scale. Corruption and development in India seem to go hand-in-hand, the two seemingly inseparable. TEHELKA recalls some of the known and lesser known scams which took place in the country since its independence. Read and reflect, who is to be blamed for these cases: politicians, bureaucrats, judiciary, business houses, police machinery or the common man. And whether there is any way out of the morass.

Cheap jeeps Sub-standard vehicles were procured for the Indian Army in 1948
Cheap jeeps Sub-standard vehicles were procured for the Indian Army in 1948

1. JEEP|1948

Though corruption was not an unknown phenomenon under colonial rule, the country was buoyed by newfound optimism after half a century of struggle. The people of India expected to be ushered into a new era where probity in public life and transparency in governance would be a given. No wonder the country was shocked when just a year later, in 1948, the first case of corruption came under the spotlight. In what became known as “Jeep Scandal”, the then Indian high commissioner to Britain VK Krishna Menon, bending the rules, signed a Rs 80 lakh contract for the purchase of army jeeps with a UK-based firm. Though payment was made upfront for 1,500 jeeps, only 155 were delivered. The vehicles were sub-standard and immediately rejected by the Indian Army. Despite the furore over the scandal, then home minister Govind Ballabh Pant announced on 30 September 1955 that the jeep case was closed, ignoring a suggestion to the contrary by the inquiry committee. Soon after on 3 February 1956, Menon was inducted into the Nehru cabinet as a minister without portfolio, to be promoted as defence minister later.


This scam has the distinction of resulting in the first bureaucrat to be jailed in independent India. The then union industries and commerce secretary SA Venkataraman was arrested and jailed for receiving bribe in lieu of granting permission to a foreign company for supplying bicycle parts to India.


In independent India, the first scam to reach the corridors of educational institutes occurred at Banaras Hindu University, where money meant for higher education was misappropriated. Officials of the university were accused of siphoning off grants worth Rs 50 lakh. Several heads rolled after the scam hit the headlines. Though it was the first scam to be reported from the university, it was not to be the last.


Famously known as Mundhra scandal, it is known primarily for two things. First, it showed how financial brokers could use their clout in political circles for duping supposedly autonomous bodies — establishing what was to become an inglorious tradition. Second, it brought out in the open the rift between Jawaharlal Nehru and his son-in-law Feroze Gandhi.

Kolkata-based industrialist and stock broker Haridas Mundhra was arrested from his luxury suite at the Claridges hotel in New Delhi. He was found guilty and imprisoned in the first big financial scandal of free India. The scam revealed how Mundhra used his political connections to pressurise Life Insurance Corporation (LIC) to invest Rs 1.24 crore in the shares of loss-making and nondescript companies belonging to him. Such was the clout of Mundhra that the investment even bypassed the scrutiny of LIC’s investment committee. Inevitably, the LIC suffered a huge loss due to this investment.

Young Feroze Gandhi was at the forefront of raising the issue in Parliament. He procured the confidential correspondence between the then Finance Minister TT Krishnamachari and his principal finance secretary, and raised a question in Parliament on the sale of ‘fraudulent’ shares to LIC by Mundhra. A one-man commission headed by Justice MC Chagla concluded that Mundhra had sold fictitious shares to LIC, thereby defrauding the insurance behemoth. TTK, in his testimony, tried to distance himself from the LIC’s decision, implying that it may have been taken by the finance secretary acting on his own. However, Justice Chagla held that the minister is constitutionally responsible for the action taken by his secretary. Eventually, Krishanamachari had to resign.


In the swinging sixties in India’s capital, one couple who was the talk of the town, was Dharma Jayanti Teja and his glamorous wife. Teja was projected as a successful NRI who had worked his way up from scratch in a typical rags-to-riches story. The Teja couple were known for throwing lavish parties, with the list of guests including bigwigs from political, bureaucratic and business circles. The couple soon gained access to Jawaharlal Nehru which, in turn, raised their stock in the eyes of high society.

Teja, in the garb of a nationalist, projected his desire to do something for the motherland. He undertook to expand India’s maritime fleet with finance from the government. With a recommendation from Nehru, Teja was granted loans worth Rs 22 crore to establish the Jayanti Shipping Company. In 1960, the authorities discovered that he was actually siphoning off money to his own account, after which he fled the country. The investigations revealed that Teja’s financial empire was a mirage. The public sector Shipping Corporation of India took over and assimilated Jayanti Shipping. Teja was tried for massive fraud and sentenced to seven years imprisonment.


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