7 convicted in letter of credit scam

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  • Published 12.05.14

Guwahati, May 11: Seven persons, including four state government officials, were found guilty by a CBI court here in the letter of credit (LOC) scam that rocked the state in the nineties.

The order was passed by the CBI’s special judge, Assam, Samarjit Dey, on Friday.

Among those convicted by the court were Tileswar Dutta and Jiten Hazarika — officers of the Nagaon treasury office — and veterinary department officials Jugal Chandra Saikia and Tushar Chakravarty.

The three others — Upendra Nath Gogoi, Pallab Bordoloi and Kamalesh Deka — were suppliers of medicines to the veterinary department.

All of them were sentenced to rigorous imprisonment for two years and a fine of Rs 5,000 each.

In default of payment of the fine they will have to undergo rigorous imprisonment for three more months.

The accused government officials were convicted under Sections 13(2) and 13(1) (d) of Prevention of Corruption Act, 1988, and Section 420 (cheating), 120B (criminal conspiracy) and 471 (using forged document or electronic record as genuine) of IPC.

The three suppliers were convicted under Sections 120B and 420 IPC.

The scam, which took place during the tenures of chief ministers Prafulla Kumar Mahanta and the late Hiteswar Saikia, relates to the blatant misuse of letters of credit by officials of the state veterinary department.

Dilip Saikia and Nakul Das were the veterinary ministers during the Mahanta-led AGP and Saikia-led Congress governments respectively.

The letter of credit is a regulatory mechanism devised by the state government to keep expenditure under control.

When the government earmarks a certain amount of money for a project, the entire amount is not handed over to the department concerned in one go.

It is released in phases and letters of credit are issued, which can be cashed when required.

However, it had come to light that the letter of credit facility was subverted and crores of public money was fraudulently withdrawn from treasuries under the pretext of implementing government schemes.

Another veterinary department employee, Surendra Nath Sharma, who was also an accused in the case, was, however, acquitted on benefit of doubt as the court found that the prosecution has failed to prove the allegations against him beyond reasonable doubt.

Two other veterinary department officials, A. Zaman and Debabrata Dutta, who were chargesheeted by the CBI in this case, died during the course of the trial.

According to the prosecution’s case, the accused persons hatched a conspiracy in 1992.

They prepared a false and forged letter of credit dated May 29, 1992, for around Rs 21 lakh, three false sanction orders and false bills without supply or receipt of any medicine.

On the basis of false bills, forged letter of credit and sanction orders were prepared and submitted to the Nagaon treasury for payment.

On receipt of the bills, the accountant of Nagaon treasury office, Jiten Hazarika, processed the treasury vouchers and treasury officer Tileswar Dutta passed the bills without raising any objection, causing a loss to the state government.

In the late eighties and early nineties, many such frauds were detected in the veterinary department, collectively known as the letter of credit scam .

The state government later handed over the investigation of these cases to the CBI.

The CBI had filed 15 chargesheets in March, 1996, in relation to the scandal that was spread over treasuries and veterinary offices all over the state.