CBI on weak wicket in IRCTC hotel case against Lalu Yadav

A report in The Indian Express on Friday about CBI’s case against former Railway Minister Lalu Prasad Yadav and his son Tejashwi Yadav strengthened the claim of the two that the case is politically motivated.

Both Lalu Prasad and Tejashwi were quick to tweet the report which suggested that CBI’s Legal Division (Prosecution Wing) had opposed in June, 2017 the agency’s move to lodge a Regular Case (RC) akin to an FIR on alleged corruption in the transfer of two Railway hotels in Ranchi and Puri on long lease to a private hotelier in 2006.

The legal Division in its opinion had apparently said that there was no direct evidence that the then Railway Minister had influenced Railway officials to grant the lease to the private company, Sujata Hotels. Nor was there any evidence of a quid-pro-quo. But the agency chose to ignore the legal opinion and went on to interrogate Yadav and his son and triggered a raid by Enforcement Directorate which filed a separate Money Laundering case.

The legal opinion was based on the following facts :

1. A plot of land in Patna was transferred to a company owned by Prem Chand Gupta in 2005, one and a half years before the Railways granted the lease to Sujata Hotels Pvt Ltd.
2. The ownership of this plot was transferred to family members of Lalu Yadav around 2011, five years after the lease was granted.
3. The lease was granted after inviting bids and was awarded to the highest bidder by the IRCTC which owned the hotels.
4. The valuation of the plot in 2005 was much less than the market value of ₹40 Crore or so in 2017 because in 2005 the western suburb of the state capital was not quite developed.
5. There was little sense in implicating Tejashwi Yadav in the case because he was 12 years old when the lease was granted.

But CBI went ahead with the RC and the Enforcement Directorate attached the property in December, 2017.

The lease was granted to the private hotelier on payment of licence fee of ₹15.45 Crore for the Ranchi property and ₹7.18 Crore for the hotel at Puri. The Chanakya Group of hotels, owned by the company, offered to also invest ₹10 Crore to refurbish the hotels which were in a dilapidated condition in 2006.

Both the hotels were known as BNR (Bengal Nagpur Railway) hotels. While the hotel at Puri with sea-facing rooms was built in 1902, the BNR Hotel at Ranchi came up in 1916.

Both the heritage hotels had hosted towering personalities like Jawaharlal Nehru, Indira Gandhi, celebrated economist and US ambassador to India J K Galbraith, former Orissa chief minister Biju Patnaik, filmmaker Satyajit Ray, music director S D Burman and virtually all important people visiting Puri and Ranchi during the longest part of the last century.

Following the renovation, the hotels have lost their old-world charm and emerged as high-end hotels to cater to the growing number of visitors to Jharkhand’s state capital and Odisha’s popular sea-side destination.