Chapter-1 Research Proposal

1.01- Review of Literature

(Telgi Scam, 2003)The tentacles of the fake stamp and stamp paper scam, better known as the Telgi
scam, has penetrated 12 states and is estimated at a whopping Rs 20,000 crore plus. Between
1992 and 2002, 12 cases were registered against Telgi relating to counterfeit stamps in
Maharashtra alone and 15 cases in other parts of the country, but the lack of serious action
suggests that the scamster had mastered the technique of corrupting the system. The Telgi scam
is by no means a case of police corruption and political connivance helping an ingenious crook to
set up a fast-growing dubious business. Telgi clearly had a lot of support from other departments
and institutions of government that are responsible for the production and sale of high security
stamps. But questions about their involvement are just beginning to be asked. Even more
shocking is the fact that the Special Investigation Team is enquiry report, better known as the
Jaiswal report, had already asked these questions in November 2002, but no action has been
initiated on the wider issues raised in the report.

(Telgi pleads guilty in fake stamp scam, 2007) PUNE: Abdul Karim Telgi, kingpin in the multi-crore
fake stamp scam, on Thursday pleaded guilty before the Maharashtra Control of Organised
Crime Act (MCOCA) court here. The case relates to printing, circulation and sale of counterfeit
government stamps and stamp papers by an organized crime syndicate headed by Telgi, currently
in judicial custody in Yerawada Jail here. Of the 68 charge sheeted, accused 42 have already
confessed to their role in the scam, which came to light here in mid-2002, before Special Judge
Chitra Bhedi.
 Telgi Scam

1.02 -Research Objective

The major points of recent study is to know the loopholes in the system of stamp duty act and
about the scam:

 Our main objective of Research is to know the in depth knowledge of the scam.
 How this scam is being done and how it comes possible?
 What are the Loop-whole in stamp paper industry?

1.03- Research Design

Descriptive research is used in this study because it will ensure minimization of bias and
maximization of reliability of data collected. As a researchers we had to use fact and
information already available through various sources like past research, past data,
journals, and magazines and analyze these to make critical evaluation of the available
material. Hence by making the type of the research conducted to be the descriptive and
analytical in nature.

1.04- Research study

The information is collected through secondary sources during the project. That information
was utilized for gaining knowledge, evaluation and based on that, interpretations were
made.
The data is collected through secondary data:
 Magazines
 Journals
 Through various sites
 Interaction with parents etc.

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1.05- Problem statement:

The problem of the study is basic loophole in the whole system talking from pin to plane
i.e. from the stamp act to the persons involved in this scam, mastermind of this scam,
various cops, politicians etc. Also the study have hurdles of the how this scam is being
possible and become the huge scenario in the history of the stamp paper industry.

1.06- Important of study:

 This study has great significance and provides benefits to various parties whom
directly or indirectly interact with this project report.
 It is beneficial to the various parties to whom want to research on this scam by
providing the true facts and judgment of this scam.
 It also create awareness and pore knowledge about the various scams, loopholes in
system, about stamp duty act etc.

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Chapter-2 Industry Overview

2.01- About Stamp Duty

Stamp duty is a kind of tax, just like sales/income tax etc. and justifiably its basic purpose is to
raise revenue for the Government. Thus, like any other tax, stamp duty must be paid in full and
on time to the Government, with delays attracting penalties. Broadly speaking, stamp duty is
levied on an instrument (and not on a transaction); stamp duty is payable on property (whether
immovable/ movable or tangible/intangible) either on a fixed basis or on the basis of the
consideration mentioned in the instrument as the case may be. In case of immovable property,
there is an additional concept of valuation of the property, which is also taken into account while
determining the stamp duty payable. An infrastructure project involves, besides the actual project
documents, finance documents, security documents etc. Dealing with land plays a critical role in
most projects. The role of a legal counsel includes preparing, executing, vetting of these
documents and structuring a wholesome transaction. As the costs of these projects are enormous
so are the resultant implications on stamp duty. Since, the ISA, BSA (both defined later) and
other stamp acts have diverse classifications of instruments under which each of them are
covered, it is necessary for legal counsel to understand the background and nature of the stamp
duty and its effects/impact on the entire project.

2.02- Indian Stamp Act, 1899

The Indian Stamp Act, 1899 is a fiscal statute laying down the law relating to tax levied in the
form of stamps on instruments recording transactions & Stamp duties on instruments specified in
Entry 91 of the Union List (viz. Bills of Exchange, cheques, promissory notes, bills of lading,
letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts) is
levied by the Union. Stamp duties on all the instruments are collected and kept by the Concerned
States. In India, the Indian Stamp Act, 1899 (ISA) is the Central Legislation while the States
have their own local stamp acts to deal with issues arising within that particular State. The
Bombay Stamp Act, 1958 which came into force on 16th February 1969 (BSA) is the law for
stamp duty within the State of Maharashtra. Constitution of India empowers both the Parliament
and the State Legislature to make provisions and laws for stamp duty within its ambit. Often the

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phrase 'duly stamped' is used in relation to an instrument. It connotes that an instrument bears an
adhesive/impressed stamp of not less than the proper amount. Stamp papers can be validly
purchased from the State 'authorized vendors' and in cases of high denomination, stamp duty can
also be paid by way of franking the instrument again through the State authorized channels. A
duly stamped document can be admitted as evidence in any lawful transaction or in a court of
law with few exceptions under the criminal proceedings.

In Maharashtra, prior to 1st May, 1994 stamp papers could be purchased in the names of
advocates or in any other name. However, thereafter stamp papers are to be purchased in the
name of one of the parties to the instrument. Furthermore, the validity of stamp papers are
restricted to a period of 6 months and if the stamp paper is used thereafter then it is deemed that
the document is executed on ordinary paper without a stamp.

2.03- e-Stamp paper era

The Department of Registration and Stamps, Government of Maharashtra, the 2nd highest
revenue earning department, had a vast presence with over 400 offices managed by 2500
employees and generates various job opportunities. It undertook an ambitious IT project called
SARITA (Stamps and Registration Information Technology Based Administration) whereby all
the sub registrar/district level/division level offices as well as the Head Quarters at Pune have
been computerized and automated. SARITA has been operational since January 2001 and has
registered more than 2 million documents with the estimated revenues exceeding Rs. 5000
crores.

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Chapter 3 - About the Telgi Scam

Stamp Paper Scam – a racket that flourished on loopholes in the system.

3.01- INTRODUCTION

The Telgi stamp scam can be dubbed as the mother of all scams and many cannot resist saying it
happens only in India. Its ramifications run deep and cover over 12 states with Maharashtra
leading the way. It has left its stamp of shame on the top police brass, politicians and
bureaucrats. Today a number of them, including the ex-police commissioner of police, Mumbai
are languishing in jails along with the kingpin, and state’s strong man resigned as cries to boot
him out reached a crescendo.

3.02- SUMMARY

The tentacles of the fake stamp and stamp paper scam, better known as the Telgi scam, has
penetrated 12 states and is estimated at a whopping Rs 20,000 crore plus. Between 1992 and
2002, 12 cases were registered against Telgi relating to counterfeit stamps in Maharashtra alone
and 15 cases in other parts of the country, but the lack of serious action suggests that the
scamster had mastered the technique of corrupting the system. The Telgi scam is by no means a
case of police corruption and political connivance helping an ingenious crook to set up a fast-
growing dubious business. Telgi clearly had a lot of support from other departments and
institutions of government that are responsible for the production and sale of high security
stamps. But questions about their involvement are just beginning to be asked. Even more
shocking is the fact that the Special Investigation Team’s enquiry report, better known as the
Jaiswal report, had already asked these questions in November 2002, but no action has been
initiated on the wider issues raised in the report. For instance, it has asked why such a sensational
economic crime with national and interstate ramifications should not have been entrusted to a
specialized agency such as the CID (crime), the CBI, or at least to a dedicated team of officers
with personal integrity and excellent record. It was only due to the public interest litigation filed

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by social activist Anna Hazare that the SIT investigation is now on course and has trapped
several high ranking police officials, some inconsequential politicians and is soon likely to
ensnare a couple of big political names.
Meanwhile, many questions remain unasked and counterfeit stamps probably continue to be sold
across the country, because the distribution network is untouched. The Jaiswal report has
indicated clear cut connivance of officials of the India Security Press at Nasik in the transfer of
appropriate technology, including transfer of stamp designs and from original negatives; that the
Security Press was completely infiltrated by unscrupulous elements. Yet, no heads have rolled at
the Press, nor has any urgent action been initiated to overhaul its systems and procedures.
Similarly, the failure of treasury department officials to notice the large-scale use of counterfeit
stamps in Maharashtra has also to be investigated. What has been revealed so far is just the tip of
the iceberg.

3.03- AMOUNT SWINDLED

The amount swindled in Telgi scam is Rs. 172 crores according to the investigations carried out
by the team of CBI, Income tax, Directorate of Revenue Intelligence, Enforcement Directorate
and the Reserve bank of India.

3.04- FRAMEWORK

Abdul Karim Telgi, the mastermind of the multi-crore counterfeiting, printed fake stamp papers
worth thousands of crores of rupees using printing machines purchased illegally with the help of
some conniving officials of the Central Govt.’s Security Printing Press (India Security Press)
located in Nasik. These fake stamp papers penetrated in more than 12 states through a
widespread network of vendors who sold the counterfeits without any fear and earned hefty
commissions. The scam broke in late 90s and the Special Investigation Team was assigned the
probe job. The investigations led the SIT to the kingpin Telgi and his partners in crime which
largely included policemen and high ranking police officials, politicians and govt. officials. In
one of the sensational disclosures during a Narco test in Bangalore, Telgi named the then NCP
(National Congress Party) leader Sharad Pawar and former Deputy Chief Minister Chhagan
Bhujbal (NCP) to be involved in the scam and that he paid money to them. However, the

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allegations made by Telgi were refuted by both the politicians. Some serious concerns and
questions were also raised against SM Krishna Govt. of Karnataka (who appointed SIT to
investigate the case), as to why such sensitive economic crime with inter-state ramifications was
only handed over to SIT and not entrusted to specialized agencies like CBI for investigation.

3.05- SCAMSTER INVOLVED IN THIS SCAM

The persons involved in Telgi scam are:-

 Abdul Karim Telgi – the mastermind of the scam

 Former Samajwadi Janata Party MLA Anil Gote.
 Former Mumbai Police Commissioner RS Sharma.
 Several others including policemen, politicians and govt. officials.

1) Abdul Karim Telgi – the mastermind of the scam

Abdul Kareem Telgi is the second son of Ladsab Telgi and Sharifa Bi Ladsab Telgi. He was
born in Miraj, Maharashtra on 16.08.1954.His elder brother Abdul Rahim Telgi he is an accused
in City Market Police Station, Cr. No.109/97 Bangalore city and Younger one is Abdul Azeem
Telgi accused in Bund Garden Police Station Cr.No.135/2002 of Pune city. Ladsab Telgi was an
employee of Indian Railways. He worked in different capacities and retired from service at
Gadag. At the time of retirement all his children were very young. After the death of her husband
Sharifa shifted her family to Khanapur, Belgaum dist. in search of lively hood close to Khanapur
Railway station. Sharifa Bi Ladsab Telgi was getting Rs.60/- per month as family pension. Telgi
is a small village in Bijapur Dist. of Karnataka. Abdul Kareem Telgi studied in Sarvodaya
Vidyalaya English Medium School in Khanapur up to 10th standard and joined the Gogte
College of Commerce, Belgaum. He completed his B.Com from that College in the year1984.His

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brother Abdul Rahim Telgi is a B.Sc. Graduate and his younger brother Azeem is PUC drop out
and at the time of his arrest he was Vice-President of Town Municipal Corporation, Khanapur.

After the completion of graduation Abdul Kareem Telgi went to Mumbai in search of
a job and stayed with his friends for 6-7 months. He worked as a sales executive in a company
M/s Filix India Ltd., dealing in office furniture at M.G. Road, in Mumbai, for a salary
ofRs.3800/- P.M. After working there for some time, he took up a job in Kishan Guest House as
a Manager under one Mr. Yusuf Ismail Turk on Walton Road, Colaba for a salary of Rs.4500/-
per month and worked there for about two and a half year from 1984 to 1986. He married one
Shahida Begum Resident of Shivajinagar, Bangalore and sister–in-law of Mr.YusufIsmail Turk on
19th April 1987.It was an arranged marriage.

Abdul Kareem Telgi went to the Kingdom of Saudi Arabia for employment and worked
there for about one and a half year. There after he returned to India and set up his own manpower
consultancy office and started sending people to Gulf Countries. During this period, he got in to
trouble connected with a job racket and a case was registered against him in GB CB CID
MumbaiCr.No.91/93 U/s 465, 467, 471, 420 IPC for cheating innocent people from whom
several lakhs of rupees were collected falsely promising to send them abroad for employment.
Abdul Kareem Telgi was arrested in December 1993in the above said case and while he was in
the custody of GB CB CID he met one Ram Ratan Soni a Share broker of Mumbai in the lock-up
who had been arrested in a different case. It was here that Abdul Kareem Telgi is said to have
learnt the idea of starting fake stamp business and thus started his empire of fake stamp racket
across the country.
Abdul Kareem Telgi obtained a Stamp Vending license at Mumbai during March 1994.He
was for the first time arrested in June 1995 by MRA Marg Police station, Mumbai in
Cr.No.355/95 case along with Ram Ratan Soni in fake stamp case. Details of the cases against
Abdul Kareem Telgi and his associates are given in the link as Telgi cases.

2) Anil Gote

Anil Gote is an Indian politician and Members of Legislative Assembly (India), elected

from Dhule City (Vidhan Sabha constituency). According to SIT (Special Investigation team),

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report claimed that Telgi donated a 'large sum of money' to Samajwadi Janata Party MLA Anil
Gote's Kisan Trust. In return, Gote helped Telgi sell fake stamp papers. In connection with stamp
paper scam, Gote was under magisterial custody at the Yerawada Jail. He was then released on
bail under a surety of Rs 10 lakh while the other accused Suryavanshi on surety of Rs 50,000.

3) RS Sharma

RS Sharma, who was removed as Mumbai's police commissioner less than a month ago, was
arrested on Monday for his alleged role in shielding Abdul Karim Telgi, the kingpin in the over-
Rs 3,000- crore fake stamp paper scam. Telgi described former Mumbai police commissioner R
S Sharma as a friend who helped him. Sharma was paid Rs 22 lakh through Manoj Mehta. The
arrest took place a day after Mr. Sharma's retirement from service; he has been charged under the
non-bailable provisions of the Maharashtra Control of Organized Crime Act (MCOCA). Mr.
Sharma is the first police commissioner, serving or retired, to be ever arrested anywhere in the
country under such a draconian Act.

According to police sources, the clinching evidence against Mr. Sharma may have
surfaced in the transcripts of the telephonic conversations recorded in the tapes. These tapes
believed to have contained conversations Telgi had with his associates and those police officers
who helped him run the fake stamp paper network.

It is also quite curious that Mr. Sharma's arrest came close on the heels of the revelations
made in the court on November 27 that Telgi's diary contains the phone numbers of 19 ministers.
Mr. Sharma's lawyer mentioned this to the court while arguing for transfer of the case from the
SIT to CBI which is investigating the case in many other states.

3.06- GOVERNMENT REACTIONS

EX-Finance Minister Jaswant Singh said the value of the fake stamp papers recovered by various
investigative agencies was Rs 3,376 crores. 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

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connection, with 15 against chief accused Abdul Karim Telgi. Singh said while several figures
had been given out on the value of the scam, they were all speculative. He added since most of
the stamp duties were payable to state governments, the loss of revenue for the Center had been
very little. He said the government would recognize as genuine all transactions executed on
stamp papers within the country. He said, “There will be no legal infirmity on any such
documents and, if necessary, the government will introduce a Bill in the House. “Singh said the
new stamp papers with improved security features would be available across the country by July
2004. The minister said the government was committed to find a remedy to the problem and said
a number of measures were under way “to eliminate the virus”. The minister acknowledged that
the full contours of the scam were not visible to him when Karnataka Chief Minister S M
Krishna wrote to him last year. But by March 2003, the finance ministry had written to all the
chief ministers asking them to name officials who could be involved in circulating fake stamp
paper.

3.07- INVESTIGATION & TIMELINE

August 2000: Bangalore police arrested 2 possessing fake stamp and stamp paper. Abdul Karim
Telgi’s name surfaces in the investigation.
November 2001: Bangalore city police arrests Telgi from Ajmer and is sent to Bangalore central
prison. However, Telgi continued to run his businesses from the jail.
January 2002: SM Krishna Govt. of Karnataka constitutes STAMPIT, the special investigation
team to probe the stamp paper scam.
2003 to 2004: Police comes into action all over making series of arrests in the case as directed by
SIT. Telgi and several others who were involved in the case as Telgi’s aide or otherwise were
arrested. Those who were arrested included the following among many others:
 Abdul Karim Telgi, the key accused and mastermind of the scam, and his associates

 Telgi’s lawyer Rasheed Kulkarni

 MLA of Dhule district (Maharashtra) Anil Gote

 Former labor minister of Andhra Pradesh Krishna Yadav

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 A number of high rank policemen like Senior Inspector of Mumbai Crime Branch; former
Mumbai Police Commissioner RS Sharma; the likes of ACP, DCP, DSP; Joint Commissioner
of State Intelligence etc.

 Govt. officials like Deputy superintendent and superintendent of stamps and jail
superintendents

 And a bunch of police officials including inspectors and sub inspectors among others.

December 2003: Maharashtra govt. decides to hand over the case to CBI

February 2004: SIT claimed Telgi paid kickback of Rs. 22 lakhs to former Mumbai Police
Commissioner RS Sharma
May 2004: CBI seize fake stamp papers worth 1.5 crore rupees after custodial interrogation of
Telgi
August 2004: SC gave CBI 3 months to complete the probe in the scam. CBI arrested Telgi in
another case pertaining to seizure of fake stamps
March 2005: CBI filed charge sheet against top police officials
July 2005: CBI filed charge sheet against 66 people including the prime accused Telgi, his wife,
former Mumbai Police Commissioner RS Sharma and 2 politicians
January 2006: Special court convicted Telgi in a 1995 case of selling fake stamps; gets 10 years
of rigorous imprisonment and a fine of Rs. 50,000
March 2006: Telgi expresses willingness to confess in all stamp paper cases
April 2006: As per an investigation report, the actual magnitude of the stamp paper scam
amounts to Rs. 172 crores and not Rs. 30,000 crores as initially speculated
May 2006: Telgi informs the special court of his will to make another confessional statement
alleging involvement of politicians, businessmen, doctors and police.
September 2006: Telgi, in a Narco test, names Sharad Pawar and Chhagan Bhujbal in the scam.
June 2007: Telgi gets a 13 years rigorous imprisonment with a fine of crores of rupees in one of
the major cases under the scam filed by Pune Police. While, 42 other accused get rigorous
imprisonment for up to 6 years and a fine.

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June 2011: The special Maharashtra Control of Organized Crime Act court in Pune convicted 5
people including the kingpin of the scam Telgi and sentenced them to 10 more years of rigorous
imprisonment in one of the stamp paper scam cases filed against him in Mumbai in 2005.

3.08- INVESTIGATION BY CBI

CBI had constituted a seven-member team to analyse the financial magnitude and bank
transactions of people involved in the scam, including Telgi. During the investigations, the
committee looked into aspects like account-wise tabulation and analysis of debits from the bank
accounts, worked out the end use of funds which includes whether the funds have been used
towards creation of assets or for laundering in other business areas. The team also analysed
credits into the bank accounts, with the view to link them with the supply of fake stamps and also
the income tax returns filed by Telgi and his henchmen.

3.09- CONVICTION BY COURT

The first conviction in the multi-crore fake stamp paper scandal, a special court today
sentenced alleged kingpin rigorous imprisonment and also fined them Rs 50,000 Abdul Karim
Telgi and his two associates to ten years’ each for their role in selling counterfeit stamps of Rs
17lakh face value to a legal firm here in 1995.This is the first conviction of Telgi, who is lodged
in Pune’s Yerawada jail. This is also the first case in which trial was conducted through video
conferencing by CBI.

In the fake stamp scandal of nearly Rs 30,000 crore, Telgi faces a string of 48 cases
registered against him in various places in the country, including Maharashtra and Karnataka.

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All the accused—Telgi and his associates Sanjay Gaikwad and Ram Ratan Soni—were awarded
ten years RI and fined Rs 50,000 each on the charges of conspiracy (Section 120-B IPC). The
court also sentenced Telgi to undergo ten years’ RI under Section 255 IPC (for counterfeiting
government stamps) and asked him to pay Rs 50,000 fine.

Besides, Telgi was sentenced to five years’ RI and Rs 20,000 fine under Sections 258 IPC
(selling counterfeit stamps) and 259 IPC (possessing counterfeit stamps). Under Section 420 IPC
(cheating) read with Section 511 IPC, he was awarded three years. All the sentences would run
concurrently. Telgi did not appear before the court but pleaded, through video conferencing, for
leniency as he was suffering from HIV/AIDS and also because his wife was admitted to hospital.

3.10- FUTHER INVESTIGATION BY CBI

CASE 1:-CONNECTION OF TELGI WITH VEERAPPAN

BANGALORE, FEBRUARY 16: The highest-ranking police officer arrested in Karnataka in

connection with the fake stamp paper racket, former Assistant Commissioner of Police T G
Sangaram Singh, was granted bail by the Supreme Court.

Sangaram Singh had created a sensation in Bangalore in July 2004, when following his
arrest he alleged that the S M Krishna-led Congress government in 2001 used Abdul Kareem
Telgi’s money to pay a ransom to the late forest brigand Veerappan for the release of film star
Rajkumar. Singh claimed to have helped transport Rs 20 crore to Veerappan. The CBI arrested
Singh on 8 July 2004 in connection with a 1997 fake stamp paper case registered in Bangalore.
He was accused of accepting a bribe to set free Telgi’s brother Abdul Raheem Telgi despite
initially detaining him along with four others while they were in possession of fake stamp papers.

The CBI has charged Singh with facilitating the fake stamp paper racket and under the
Prevention of Corruption Act. After his arrest, Singh made a confessional statement to a court in
Bangalore where he alleged that he was being made a scapegoat to protect senior police officers
and ministers. Singh, a relative of former chief minister Dharam Singh, is the first of the five
Karnataka police officers arrested in the fake stamp paper case to be granted bail.

CASE 2:- CONFESSION BY TELGI

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MUMBAI, JAN 31:

 The stage is set for Abdul Karim Telgi to make a confession in a 1995 seizure case with a
special court today directing a magistrate in Pune to record his statement on February 4, in
connection with the fake stamp paper scam. Special judge U D Salvi here passed the order after
Telgi told him through video conferencing that he wanted to confess in the case in which he was
charged with attempting to sell fake stamp papers.

Other accused, including suspended police officer Ganpatyadav, said they had no
objection to Telgi making a confession as the trial was yet to begin in the 1995 case registered by
cid.The judge asked Telgi whether he wished to confess and he said yes. The judge asked the
first class Judicial Magistrate in Puneto record the statement of Telgi who is lodged in Yerawada
prison and expeditiously sent the confession to the court.

CASE 3:-CONFESSION BY SHAHIDA TELGI

{WIFE OF ABDUL KARIM TELGI}

PUNE, NOVEMBER 15:

  Appearing in a wheelchair before the Maharashtra Control of Organised Crime Act court
today, Shahida Telgi, the wife of the alleged ringleader of the multi-crore fake stamp racket
Abdul Karim Telgi, has moved a bail application on grounds of illness. Shahida is said to be HIV
positive and suffering from other ailments. Deferring the order on the plea until tomorrow,
special judge B.N. Sardespande however ordered the jail authorities to admit Shahida to Sassoon
hospital. He also permitted Shahida’s daughter Sana and nephew Irfan to stay with her in
hospital.

Judge Sardespande had issued process against Shahida on September 16 after she failed to
appear before the court on two earlier occasions. Making his submission to the court, defense
lawyer Harshad Nimbalkar said Shahida was virtually on her death bed. Pointing out that four of
the accused have already been granted bail, he demanded that Shahida too be released on bail.
He also observed had there been enough evidence against her, she would have already been
arrested.

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Meanwhile, the MCOCA court extended the judicial custody of 60 accused, including Telgi, till
December 13.

Former joint commissioner of police from Mumbai, Sridhar Vagal, one of the arrested, was
produced before the court via video-conferencing from Arthur Road Jail in Mumbai.
Former Mumbai and Pune Police Commissioner R.S. Sharma and former deputy commissioner
of Mumbai police crime branch Pradeep Sawant have been granted bail. During video
conferencing, Telgi complained that the jail authorities were not following the court’s orders. He
said they did not allow his lawyer Milind Pawar to meet him on Saturday last. He said he was not
allowed to meet his relatives, and when such permission was granted, the meeting lasted a couple
of minutes.
Telgi said whenever he was giving instructions to his lawyer, the jail authorities surrounded them

CASE 4:-MONDAY, NOVEMBER 21, 2005 AT 0110 HOURS IST

MUMBAI:

  The special court here has framed charges in two cases against Abdul Karim Telgi, prime
accused in multi-crore fake stamp-paper racket. Judge U D Salvi on Saturday framed the charges
against Telgi and nine others, including two former cops, in the cases registered at Cuffe Parade
and Colaba police stations. Both the cases involve selling of fake stamp papers.

3.11- OUTCOME & IMPACT:

The scam was unprecedented and so was its trial. The scam and Telgi went through fast
moving, eventful investigation and legal actions after the scam broke. Nearly 50 cases were filed
against Telgi, most of them went under trial. Telgi and all others involved were put behind bars
and convicted by 2011. This was a rare thing in the history of slow moving litigation processes in
such scams. Telgi is in jail serving his 13 plus 10 years term.

The biggest loser in the entire scenario was the nation who lost crores of rupees of revenue
from stamp duty on account of sale of fake stamp papers. Besides, it affected the legal and

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financial transactions (in sectors like banking, insurance etc.) made during the scam period. The
Telgi scam was not the scam of clear cut political corruption or connivance. But one cannot
neglect the tacit involvement of various govt. departments and institutions without the support of
which the scam of high security stamps was never possible. That’s where the Congress govt.
failed; it failed to keep a close check on the system such that it leaves no scope for any wrong
doing.

3.12- TRUE FACTS ABOUT THE SCAM:

 NEW DELHI: After nearly two years of probe into what was once touted as the 'mother-
of-all-scams', money involved in the entire fake stamp paper case masterminded by
Abdul Karim Telgi amounted to only Rs 172 crore and not to Rs 30,000 crore as
speculated when the case first came to light.
 Investigations carried out by a team of the CBI, Income Tax, Directorate of Revenue
Intelligence, Enforcement Directorate and the Reserve Bank of India have revealed that
the financial magnitude of the entire scam was only Rs 172 crore.
 This was conveyed to the Union Home Ministry in a report submitted by the various
agencies here this week giving an update on the status of the 48 cases which were
registered in 2004 based on directions from the Supreme Court.
 It was earlier speculated that the scam amounted to nearly Rs 30,000 crore.
 The period calculated by the team was from 1993 and 2002 during which it found that the
financial magnitude of the entire case rose sharply only after 1998 when Telgi began his
own manufacturing unit, sources in the Home ministry said.
 During the investigations the team found that the alleged scamster had 36 properties
across the country and 123 bank accounts in 18 cities including Delhi, Mumbai,
Bangalore, Chennai and Indore, the sources said.

 Out of the 48 cases, 46 had either been sent for trial or were in the process of being
charge sheeted, a rare feat for the CBI to finalize such a large number of cases within a
period less than two years.
 The financial implications also included payment of bribe by Telgi of Rs 12.38 crore to
government officials, investment of Rs 2.98 crore in dance bars and Rs two crore in film-
making.

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 Telgi, who had been convicted in one of the stamp paper scam case and was lodged in a
Pune jail, had also made a donation of Rs 14 crore for social causes including purchase of
ambulances, building small hospitals and contribution to celebration of festivals of all
religions, the report said. Telgi also had a taste for expensive watches and diamond
jewelry.

3.13- CASES AND EVIDENCES AGAINST SENIOR COPS

R S Sharma Nine cases lapses reported by the SIT. Sharma should seek solace in the fact
that the SIT does not have anything on record, which indicts Sharma of pecuniary advantage.
Sharma is heavily censured for being supportive of ACP C Mulani and dismissive of additional
commissioner, S Mushrif, hinting at weak supervision of the case. Certain confessions of
accused and statement of witnesses against Sharma have influenced SIT’s viewpoint towards
Sharma. Sridhar Vagal.

Strong evidence of pecuniary advantage to the tune of Rs 76 lakh. Damning confessions

from his subordinates like Dilip Kamat, Dattatray Dhal and Vashist Andhale. Recorded evidence
of showing ‘extreme interest’ in the case beyond brief. For instance, Vagal got all five cases
registered by various police stations to the Crime Branch Unit V through an order passed under
his signature. An order that could have been passed by an officer of the rank of an ACP was
emphatically executed by the joint commissioner. Obviously, it was done to gain bargaining
power with Telgi. The seizure of Rs 837 crore fake stamp paper should have been transferred to
the Economic Offences Wing (EOW) and not the DCB unit.

Pradip Sawant- Once again, the SIT does not have anything on record that indicts Sawantas
having gained pecuniary advantage in the case. However, there are other issues that project him
in critical manner: Sawant was negligent in the investigation of the fake stamp case on the
pretext of it not being the crime branch’s priority. Sawant was ignorant of his officers like
Kamat, Dhal and Andhale’s dubious dealings and leniency towards Telgi while he was in the
crime branch custody0. No further progress in the investigation was made in the Rs 837 crore
fake stamp seizure case despite it happening on January 11, 2003.

3.14- PENALTIES AND IMPRISONMENT TO SCAMSTER:

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Now Telgi has been convicted and sentences are being pronounced in the cases in Bangalore.
Here is the quantum of justice, as reported by Deccan Herald:

A special court awarded seven years imprisonment to multi-crore stamp paper scam
kingpin Abdul Karim Telgi on Saturday. The court has also ordered him to pay a fine of Rs one
lakh failing which to serve four more years in jail. With the sentence, the Special Court
completes the hearing of all the nine cases registered in Karnataka related to the scam.

Telgi and 16 of his associates – Badruddin, Rafi Ahmed, Sadashiva, Abdul Wahid, Abdul
Khuddus, Sachin Kalage, Sarfaraz Nawaz, Illiyas Ahmed, Sadiq Ibrahim Hudli, Nizamuddin,
Siddu, Mohammed Asif, Mansoor, Suleman, Deepak and Jacob Chacko were convicted on
September 14 under section 259 of the IPC for possessing material necessary for counterfeiting
stamp papers. In his 1056-page judgment, the Judge has ordered that each of the Telgi’s 16
accomplices will have to undergo imprisonment of five years and a fine of Rs 20,000.

 March 24, 2007: Telgi, Badruddin, Irfan Ahmed, Wazir Ahmed Salik and Pradeep Kumar
were sentenced for 10 years RI and fine of Rs 42.75 lakh for cheating government and
Peenya-based Sami Labs.
 April 23, 2007: Telgi, Badruddin, Anees Khan, Mohammed Illiyas, Wazir Ahmed Salik
awarded 10 years of RI and fine of Rs 4.94 lakh for cheating the Government and a
private company.
 June 21, 2007: Telgi and two doctors from Victoria Hospital sentenced to seven years RI.
Telgi had bribed the two doctors to avaial false medical certificates to get bail.
 December 15, 2007: Telgi, Badruddin, Wazir Ahmed Salik, Pradeep Kumar awarded five
years RI.
 March 29, 2008: Telgi, police inspector Wali Pasha and Sub Inspector V A Khan
acquitted in a case accusing police officers of subverting a case related to stamp paper
scam.
 April 17, 2009: Telgi and seven others were sentenced to undergo seven years RI for
preparing and selling fake stamp papers in Bangalore’s City Market police station limits.
 February 17, 2010: Telgi to undergo 10 years RI and 18 others to undergo seven years RI.

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 September 14, 2010: Telgi and 16 others convicted for possessing counterfeit stamp
papers and the materials used for preparing them. They were acquitted of charges under
the Karnataka Control of Organised Crime Act, Karnataka Stamp Act and Prevention of
Corruption Act.

3.15-PRINTER’S DEVIL

The Swindler’s Story began when Abdul Karim Telgi started printing and distributing fake
stamp papers in Mumbai in 1995. He bought a secondhand printing machine from the Nashik
Security Press at an auction. He then reportedly stole original dies used for manufacturing
stamps and stamp papers. His excellent political connections helped him procure imported paper
and organized that his fakes couldn’t be distinguished from the originals. This printing and sales
of fake stamp duty paper spread losses worth crores of rupees to the Indian government. The
fake stamp papers were then sold in the market through Telgi’s distribution agents – most of
these agents included several authorized stamp vendors. Telgi paid hefty commissions to buy
their silence. As a result nobody leaked information about the racket to the enforcement
authorities. He bought politicians too. These politicians, who were on Telgi’s regular payroll
deliberately created a shortage in supply of stamp papers in Mumbai. It was then that Telgi’s
marketing agents sold the fakes for a premium outside the government stamp office in fort area.
When finally the Mumbai police got wind of the scam and registered cases against Telgi at 12
police stations, Telgi simply bribed his way out of the hole he suddenly found himself in. He
managed to escape from Mumbai despite the court rejecting is bail application. The Bangalore
police suddenly arrested him in Ajmer in august 2000. By then his scam had spread across 12
states.

3.16- GENERAL OPINIONS

By Lawyers- The lawyers say that this scam has ‘Rocked’ the economy of India and different
States Police. We visited the Santacruz Police Station and the Bandra Police Station and spoke
with L.B. Shaikh (I.S.P) and Arun Sarwe (Head Constable).According to them the scam started
in the year 1991 and the main people involved were Abdul Karim .L. Telgi and everyone who
supported him including all the police and politicians. They said that stern action was taken by
the government by arresting most of the players who helped Telgi in his multi crore scam. When

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asked what the role of the police was and if the Mumbai Police is still the second best in the
world, Inspector Shaikh agreed and replied “The Maharashtra Police Force has themselves strict
action against their Colleagues and Superiors by arresting them. Hence this proves that the
Maharashtra Police Force is still the second best as who the defaulter is has to be punished – on
this principle the morale of the police force is high” No one, even the police knows where all the
money has gone. It seems as if it has vanished into thin air. When asked for their comments the
said that they should always take action against the defaulters and put them behind bars.

By Public- The general public opinion about the Telgi Scam is that they are least bothered about
the whole scam. The public is outraged as they feel cheated and they are surprised on the hypes
at which corruption can reach and feel the accused should be punished. The declaration of the
government that all the dealings on the fake scam paper are valid has enlightened the public to a
certain extent. Whatever little trust the public had on the Police Department has evaporated after
the whole scam came into light. The anger and the distrust in the hearts of the people against the
government has grown even more after the whole incident. Overall, the Telgi scam has not
affected the public directly so they are least bothered about what is happening right now.

3.17- ABDUL KARIM TELGI'S HEALTH DETERIORATES

The 11 years he spent in jail has also ruined the 61-year-old's health. Today he has to
depend on a fellow inmate to eat and take his medications. With age catching up, he has also lost
weight. According to a report from the state Health Board, released in 2011, Telgi had been
suffering from diabetes and hypertension for over 20 years, besides AIDS and hypothyroidism
since 2001. Telgi's movements were hindered due to weakness and joint pains, and he has been
restricted to a wheel chair.

Besides these ailments, Telgi had also complained of pain in the left chest including
difficulty in passing urine when he had applied for a bail last year. According to jail authorities,
Telgi is currently undergoing different treatments for various ailments including that of diabetes.
He sleeps for most of the day and has lost a lot of weight. Telgi's movements are crippled. He
can barely walk. He takes support of an inmate on one side and the walls of the Central Prison to
go to the bathroom. According to jail authorities, Telgi takes a lot of medicines for his ailments.
He has lost a lot of weight as he eats less due to sugar problem. Jail doctors are constantly

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monitoring his health. Crippled and sick, Telgi is a loner today. He hardly gets any visitors to see
him. His wife, who used to visit him regularly, is also down with illness and has stopped visiting
him.

3.18- ANALYSIS OF THE SCAM IN OUR WORDS….

According to the study done by us through various research papers, newspaper articles,
magazines, periodicals, SIT and CBI reports we analyzed that Telgi scam was one of the biggest
scam in India.

This type of scam are caused very now and then destroys the roots of our country. So we need
to give-up make different agencies to check corruption and make the existing agencies active in
such a way that they can stop this corruption. And if we these resources in correct and proper
way we can surely can stop and reduce this type of scandals in our country and thus make a clear
path to become a developed nation in very short tenure of period.

Chapter-4 Conclusion

The conclusion come by doing this study is that Investigations into the stamp paper scam, which
involves several States, have been seriously delayed with the governments soft-pedalling on the
issue fearing the political fallout. By the descriptive study, Telgi employed a simple method to
expand his illegal business. His agents would first talk to the henchmen of politicians. It is said
that he never entered into too many deals; he preferred to reach an agreement with an influential
politician for the circulation of the stamps initially. He would not contact others without the
knowledge of the first contact and would leave to the latter the decision of expanding the trade.
As the next step he would build a chain of `reliable contacts' through the first contact and deals
were struck in his presence. Telgi would then offer them a statewide contract. And the further
loopholes in the act get benefited by the way of different payments for direct sale, protection,
trouble-shooting and so on. Telgi floated several companies, including a film distribution
agency, to facilitate his activity. He recruited unemployed youth to sell counterfeit stamps at 2

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per cent discount. Chit companies, along with courts and real estate agencies, were his prime
targets. A smart operator, Telgi knew how to protect his interests in the event of trouble. He
regularly recorded his telephonic conversations with politicians and officials after duly making
them announce their designations and names by way of casual questions. Thus by the lack of
records this is one reason why all those people who were arrested are in real trouble. We have to
conclude our probe at some point or the other. There is no use allowing it to meander in the
pursuit of all scamster. We believe that Telgi is just one of the major players in the scam. We
could do with some more assistance from the governments," a SIT officer said. 

Thus study concludes that the main objectives are satisfied by doing detailed research.

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Chapter-5 Webliography

2004 scam. (n.d.). Retrieved from www.rediff.com:

http://www.rediff.com/news/2004/feb/09stamp.htm

Abdul Karim Telgi. (n.d.). Retrieved from www.wikipedia.org:

http://en.wikipedia.org/wiki/Abdul_Karim_Telgi

Anil Gote. (n.d.). Retrieved from www.wikipedia.org: http://en.wikipedia.org/wiki/Anil_Gote

Fake Stamp paper article. (n.d.). 5. Retrieved from ww:

http://articles.economictimes.indiatimes.com/2003-12-02/news/27542495_1_fake-stamp-
paper-abdul-karim-telgi-rs-sharma

Scam Summary. (n.d.). Retrieved from www.dnaindia.com:

http://www.dnaindia.com/mumbai/report-7-high-profile-scams-that-rocked-maharashtra-
and-their-net-worth-2003438

Stamp Duty Act, 1899. (n.d.). Retrieved from www.mondaq.com:

http://www.mondaq.com/india/x/112368/Stamp+Duty+A+Brief+Overview+In+The+Stat
e+Of+Maharashtra

Telgi news. (n.d.). Retrieved from www.rediff.com:

http://www.rediff.com/news/2007/jun/28telgi.htm

Telgi pleads guilty in fake stamp scam. (2007). The Economic Times, 3.

Telgi Scam. (2003). Thefinancialexpress, 1.

Telgi scam news 2003. (n.d.). Retrieved from www.midday.com:

http://archive.mid-day.com/news/2003/nov/68914.htm

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