Lalu was Rail Minister in 2006, when 2 IRCTC hotels went to a private firm
In June 2017, the CBI’s Economic Offences Division had pressed for an FIR against RJD leader Lalu Prasad saying that as Railway Minister in 2006, he allegedly facilitated the transfer of two railway hotels to a private firm in exchange for prime land in Patna. But the probe agency’s legal wing opposed it, saying there was no evidence to show that Prasad influenced officials or that the land transfer was a quid pro quo.
The Indian Express has learnt that verification by the Economic Offences Division concluded, on June 2, 2017, that Prasad handed over the running of IRCTC hotels in Ranchi and Puri to Sujata Hotels Private Ltd after allegedly receiving prime land in Patna through a ‘benami’ company.
Seeking registration of a regular case (akin to an FIR) against Prasad, the Economic Offences Division said the latter entered into “a criminal conspiracy” with Vijay Kochhar and Vinay Kochhar of Sujata Hotels Pvt Ltd, IRCTC officials, his RJD associate Prem Chand Gupta and family members to award the contracts to the Kochhars.
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“In lieu thereof, prime properties owned by the Kochhars were sold to Delight Marketing Co Ltd (owned by Gupta’s associates) at rates much below the prevailing circle as well as market rates. Subsequently, the ownership of Delight Marketing was transferred to the family members of Lalu Prasad Yadav for nominal consideration,” it claimed.
However, the Directorate of Prosecution, the CBI’s legal wing, pressed only for a preliminary enquiry (PE), saying there was no evidence to show that Prasad had influenced railway officials nor was there sufficient proof to establish that the land transfer was a quid quo pro from the contract winner.
On June 21, the legal adviser said the Economic Offences Division verification report had itself claimed that due to its limited scope, “it could not lay hands to any material specifying any act which can be termed as ‘overt act to take it as a criminal misconduct’ on part of Prasad being the Minister of Railways”.
Seeking further investigation in the form of a PE, it said:
* “There is no direct material to show that Railway Minister has influenced officials of IRCTC in the grant of lease to Sujata Hotels.”
* “The alleged transfer of land (by the Kochhars to Delight Marketing) has taken place in February 2005, that is one and a half years ago of the alleged favours of grant of lease of hotels (December 2006).”
* “It is alleged that the composition of Delight Marketing was totally changed and in place of its original directors, family members of Railway Minister was brought in over the period 2011-14, which is much after alleged favours done.”
* “It is pertinent to mention that the favour given is grant of long term lease for the running of two hotels against which the alleged reward given is two acres of prime land which is much higher than favour done.”
However, the PE report, prepared by the Economic Offences Division, subsequently alleged that Prasad was “influencing the affairs of the IRCTC” and a “careful perusal of evidence in the form of communications between Railway Board and the IRCTC prove that significant decisions were being taken by these officials during 2004-06”.
“It is clear that the Minister was not only aware about the issue of privatisation of Railway properties but was keeping a watch on the tender process initiated by IRCTC which is not expected at his level unless he has specific interest in the matter,” the report stated.
It said that in acts of conspiracy, the accused always tend to mask their overt acts. “Thus, it would be naive to expect a public servant of the rank of Railway Minister or any other high ranking officials to directly involve himself in tweaking of tender conditions.”
Their role in the conspiracy, the investigation wing said, needed to be analysed or assessed through “holistic and comprehensive analysis of the available oral, documentary and circumstantial evidence”.
“Selling of land by a private party at lesser than circle rate to a benami of the then minister; giving contract of lease of railway property by tweaking bid conditions to that private party; and transfer of those benami properties to the family members of the minister after he demits office warrants a criminal investigation,” concluded the PE dated June 30.
Prior to the PE, the Income Tax department had established that the two acres finally transferred to Prasad’s wife and son were benami and had issued an attachment order confiscating them.
This finally convinced the CBI to register a corruption case on July 5 against Prasad, his wife Rabri Devi, son Tejashwi Yadav, Sarla Gupta (wife of Prem Chand Gupta), Vijay Kochhar and Vinay Kochhar (directors of Sujata Hotels), the then IRCTC managing director P K Goel.
The Enforcement Directorate, too, took cognizance of the CBI FIR and registered a money laundering case against Prasad and his family members under provisions of the Prevention of Money Laundering Act (PMLA).