Firoz.T.Totanawala The Bangalore Metro Reporter THE SBM STAMP PAPER SCAM- 5 THE SHOCKING WHITE COLLAR SCAM BY A BANK & REGISTRATION DEPARTMENT! THE 5th BLUNDER- FORGED CHALLANS & DD’S

By Firoz.T.Totanawala

The Bangalore Metro Reporter 

THE SBM STAMP PAPER SCAM-5 

THE SHOCKING WHITE COLLAR SCAM BY A BANK & REGISTRATION DEPARTMENT!

THE 5th BLUNDER- FORGED CHALLANS & DD’S 

 We continue our series of exposure on the State Bank of Mysore Stamp Paper scam. In our last issues, we revealed that the SBM had no written agreement with the Government to print and sell Stamp Papers of various denominations on its own. Further, while it did print it, the stamp papers of SBM had its own different designs with lapses in the security features as prescribed by the government. All this undertakings were based merely on a proposal letter. And further, SBM defaulted on its reconciliation duty as proposed by itself. It drastically failed to submit its daily scrolls to its attached sub registrar and monthly scroll to IGR & CS.

The SBM miserably failed in its reconciliation part and in such circumstances, the manipulations were bound to take place.

Normally about Rs. 100-150 crores worth of stamp papers of smaller denominations were sold in the state then. These papers were used for agreements, affidavits, indemnity bonds etc. which are non-registrable. As majority of these SBM sheets were not brought for registrations, there can be no exact account in this regard.

Arguably, the biggest and worst fraud in SBM Stamp Paper scam episode that had rocked the department is the Bank Challan fraud. This fraud is worst than Telgi scam. As an arrangement, as described in earlier issues, the then IGR had permitted the SBM to collect the stamp duty and issue a Receipt and the same receipt had to be produced to the Sub Registrar (SR) as proof for payment of stamp duty. Each of SBM branch was designated with an SR office and the SBM had to collect the stamp duty with respect to the designated SR office only. The branch had to send stamp duty collection scroll to the SR office every day. The receipts popularly known as Challans were issued by the SBM branch after collecting its commission.

This system created havoc especially in Bangalore as tempering of the challans became regular. Many of the bank’s staffs are not saints. There was the real danger of Bank clerks writing different amount in the challan and counter foil! If they write one thousand in the challan, they can write ten thousand in the counterfoil! As per their records one thousand has been remitted to the Bank. And the counter foil which shows ten thousand had to be submitted to the SR office as proof of stamp duty payment. So, as per government figures, ten thousand is added while it is only one thousand as per the Bank. As the Banks consolidate collections from all the branches and submits the total figure, there was no way one could check the documents or SR wise office collections. Had the Bank’s branches sent daily scrolls to the SR offices every day, such fraud could not have taken place, as the accounts in the SR office had to be reconciled with the scroll at the end of the day.

Not that only bank staff but also the Department’s staff could do this sort of tempering. This fraud by many officials of the department shall put Karimlala Telgi in to shame. This fraud was the direct outcome of the senseless abolition of the stamp papers and the total lack of control by the top brass of the department.

The fraud went unnoticed for years till few public complained of challan tampering by the Sub Registrar.

The modus operandi was very simple. There were three types of frauds.

First was the tempering of Bank challans. The bank challans counterfoil was tempered by altering the amount. If the amount paid to bank was 5 thousand, the same was altered to 55 thousand, 35 thousand etc. and the ‘altered’ counterfoils were taken as the proof for stamp duty payment. By this fraud, the government lost heavy amount. While the government accounts showed one figure, the Banks figure showed a differing amount.

The second type was that of using the same challan for another registration.The modus operandi was very simple. Once the challan was used for registration, it was again used for another registration some days later as to avoid detection. The challans submitted from 1st to 9th of every month for registration used to be used again for registration from 11th to 19th by prefixing numbers before the original date of challan. If it was not used by day between 11th to 19th due to holidays etc. the same receipts were used between 21st to 29th day by adding number ‘2’ before the date of challan.

The third type of fraud was simply simple. They just wrote some challan numbers and amounts and registered the document. In this type, there was no tempering, as there were no challans at all! The stamp duty amount so cheated used to be shared between the parties and the officials. Apart from these three type of fraud, there was yet another method of using the same challan without tempering to more than one registration!.

How this sort of fraud could can take place with all the government control over revenue collection at every stage, one may ask. But the hard reality is that the fraud had been committed for years.

There is Treasury- there is District Registrar, there is AIGR (Audit) DIGR (Audit) and IGR, a chain of officers who have to look after the revenue collection. Then there is audit by the dept and also by the Account General. The District Registrar holds meeting of the SRs every month where revenue collections and functioning of the SR offices are reviewed. The report had to be reconciled and the report had to be submitted to the District Registrar before the monthly meeting. The reconciled accounts had to be sent to the IGR office also. Moreover, the dept used computers and internet and as such there was no problem of any delays in getting the account updated.

But still the fraud went undetected. The entire fraud seems to have thrived on the failure of the entire system. At every stage, there was lack of control supervision and above all auditing by the department, by the Treasury and by the AG team. That is all!