Both the Lokayukta and the revenue secretary blew the whistle on SBM, but the government just ignored them
Both the Lokayukta and the revenue secretary blew the whistle on SBM, but the government just ignored them
Several scandalous irregularities have come to light in the stamp paper business being conducted by the government-run State Bank of Mysore.
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The bank printed stamp papers at private presses, gave contradictory data about quantity of stamp papers printed, and kept no accounts of either printing or the sales.
SBM prints and issues issues 'document sheets' (substitute stamp papers) in denominations ranging from Rs 20 to Rs 500, even when it has no legal authority to do so.
Records obtained under the RTI Act also show that the bank is not submitting daily transaction records to the government for reconciliation, and nor is the government demanding it from them.
They also reveal serious discrepancies in figures the bank has made public, hinting at a scandal bigger than the one Telgi is accused of.
Not just that, the bank has not sent monthly records to the Inspector General of Registration & Commissioner of Stamps (IGR & CS), as required under the law.
Petitions filed over two years reveal other shocking facts.
How it all began
After the Telgi scam broke in April 2003, the state government completely banned the sale of stamp papers.
Telgi was printing and selling fake stamp papers across many states, but mainly in Karnataka.
The government temporarily authorised State Bank of Mysore and three other banks to collect stamp duty on its behalf from May 2003.
The banks started printing 'document sheets', even though it had no such written order from the government.
The law lays down that only the central government can print stamp papers, and at a high security government press.
'Misconduct'
Latha Krishna Rao, the then revenue secretary of the Karnataka government, in a letter to the Lokayukta on January 29, 2007, said the bank was guilty of misconduct.
In his reply dated February 7, 2007, calling for an enquiry, Lokayukta's Justice Santosh Hegde wrote, "...there is a reason enough to find out why the bank indulged in such printing of stamp papers which was stopped by the government after the Telgi scam."
The stamps and registrations department too had asked the bank to stop, but it carried on regardless.
Curiously, the department then failed to pursue the case despite its serious implications.
Lame cover-up
Once it became apparent that the operations were illegal, a nervous government attempted a cover-up.
It sent out a letter on May 7, 2007 called 'Order No 255', authorising SBM and three other banks to print and sell document sheets, with retrospective effect.
The letter also said the government would pay 1 per cent commission to the banks for collecting stamp duty.
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But hundreds of thousands of document sheets were issued by the SBM between April 2003 and 2007 in various denominations.
That means the bank printed and sold these sheets without any authorisation.
Curiously, the 'document sheets' printed by the bank don't have any of the security features including the silver thread mandated by the stamps and registration department, and would qualify as 'fake' by the department's own standards.
What's most startling of all is that while the bank makes daily transfers of stamp paper sales money to the treasury, it does not maintain accounts for the stamp papers printed or sold, and nor does it do daily reconciliation as mandated by the rules.u00a0u00a0
'We have no ready information'
When MiD DAY contacted SBM's assistant general manager (Government Business Department) Dinakar Kamath, he said:
"We have no ready data, and no statement, so we don't have ready information about how many sheets we sell in a month."
He said the bank had 315 branches all over Karnataka, and therefore it was difficult to say how many stamp papers were sold.
"We can inform all our branches and collect the information and provide details," he said.
He said the bank was remitting money in the government's treasury account daily.
"We are printing the papers on behalf of the government," he said.
The bank has "full authority" to print and sell stamp papers, Kamath asserted.
He also said the bank maintained good records and had not received any complaints on manipulation, fraud, or reconciliation to date.
Why it's all wrong
>>No legal authorisation: The law does not allow for banks to print stamp papers, or for stamp papers to be printed in private presses.
The stamps and registrations department claims that it has given the bank permission to print stamp papers under Section 10 (b) of the Stamp Act, but the act allows only for collection of stamp duty on behalf of the government, not printing.
>>No accounts: The bank makes daily transfers of the proceeds from stamp paper sales to the state treasury, but doesn't maintain or provide accounts or do daily reconciliation as the rules stipulate.
>>No consistency in records: Figures provided by the bank on the stamp papers sold between 2003-2006 to the stamps and registration dept, the Lokayukta, and in a response to an RTI query, don't match.
The difference could run into hundreds of crores in stamp duty that seem to have no records.
Lokayukta says
Lokayukta Justice Santosh Hegde has tried to stop the irregularity, and is waiting for the government to act.
"We received a complaint from the CBI that unauthorised agents were selling stamp papers. We went and got these papers with no names but with the managers' signatures and stamps on them," he told MiD DAY.
He is astounded the daily accounts aren't balanced. "The government has absolutely no idea about the quantity of stamp papers sold," he said.
As told to Nolan Pinto
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