CBI lodges fresh case in Rs 1,200 cr subsidy scam

The Central Bureau of Investigation (CBI) has lodged a fresh case in the alleged Rs 1,200 crore subsidy scam that took place in 2000, after the Allahabad High Court found that the investigation in the matter was not proper and it needed a comprehensive further probe.

A progress report in the matter will be filed by the federal probe agency on March 21.

In 2000, rock phosphate was supplied to Madan Mahadev Fertilizers & Chemical pvt Ltd, by Ujjawal Trading Company, Jhansi. Subsidy was obtained from the agriculture department of the UP government. However, later it was found that rock phosphate was never supplied and the whole amount was siphoned off.

The UP government detected the scam in 2000 following which the agriculture department initiated a probe and it was learned that during the financial years 1998-99 and 1999-2000, the sale and purchase of 3,396.025 MT of rock phosphate and 6080.329 MT of single super phosphate claimed by Madan Madhav Fertilizers and Chemicals Pvt Limited, was false.

An embezzlement of Rs 48,18,243 and the subsidy claimed from the government, was found to be false and frivolous transactions.

Following this, a case was lodged by the UP Police in 2004 against 20 accused including firms.

In 2019, the UP Police filed the charge sheet only against two accused. Later, a supplementary charge sheet was also filed in the matter in 2021 against three persons and the Mahadev Fertilizers and Chemical Ltd was given the clean chit. But the court was not satisfied with the probe.

"Mahadev Fertilizers and Chemical Ltd was given the clean chit in the matter but it was not shown how and under what circumstances the clean chit was given and what happened to the remaining Rs 1,152 crore. The investigation appears to be defective and the matter requires comprehensive further investigation," the Allahabad High Court had noted.

The counsel appearing for Ujjawal Trading Company, Jhansi which supplied rock materials to Madan Mahadev Fertilizers and Chemical pvt Ltd argued that actual proprietor of the company was Ashutosh Kumar Modi and not Avinash Kumar Modi (his brother). The firm had shut down in 1995 but U.N. Modi, their CA, kept the firm alive on papers and made the transaction without due permission from the actual owner, and thus the owner and his brother were innocent.

Now the federal probe agency has formed a team to prepare reply that will be filed on March 21.