Scam 2003: Who was Abdul Karim Telgi, and what was the Stamp Paper Scam?

Everything you need to know about the Rs 30,000 crore stamp paper scam and the mastermind behind it

The Stamp Paper Scam, also known as the Telgi Scam, was a financial scandal that started in 1992 and came to light in 2003. The scam involved a sophisticated counterfeit stamp paper racket that spanned several states in India and was valued at over Rs 30,000 crore. It led to the conviction of Abdul Karim Telgi, the mastermind behind the scam.

Following the success of the 2020 web series Scam 1992: The Harshad Mehta Story, Sony LIV released the trailer for Scam 2003 – The Telgi Story on August 4. This time, the series will delve into the high-profile financial fraud committed by Abdul Karim Telgi.

 

Who was Abdul Karim Telgi?

Abdul Karim Telgi was born in Belgaum, Karnataka, on July 29, 1961. His father was an employee at the Indian railways and passed away when Telgi was young. Telgi supported his own education by selling fruits and vegetables on trains and eventually moved to Saudi Arabia. He began his career as a counterfeiter upon returning to India after seven years. He created fake passports and documents to export labour from India to Saudi Arabia through his company, Arabian Metro Travels. He eventually moved on to counterfeiting stamp papers.

 

What is stamp paper?

Stamp papers are documents that are pre-printed carrying stamp revenue that is legally validated through the Indian Stamp Act 1899.

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There are two types of stamps – Judicial and Non-Judicial stamps. When one is required to pay court fees in civil cases, this is done in the form of judicial stamps, as cash and cheques are not acceptable forms of payment.
 

Non-judicial stamps, on the other hand, are used when drafting any agreement, such as a rent agreement, gift deed, etc.
 

Stamp papers are sold by the government and carry various denominations, including Rs 10, Rs 100, and Rs 500, with the corresponding fee paid to the state governments.

 

What was the Stamp Paper Scam?

Beginning in 1992, Telgi's scam had two aspects. One was to produce counterfeit stamp documents. The second was to generate a shortage of stamp paper that would create the right opportunity for Telgi to supply the counterfeit.
 

According to investigations, Telgi's team bribed officials of the Indian Security Press in Maharashtra to help create an artificial scarcity of documents and obtain machinery and printing material to create the fake papers.

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The fake documents included stamp papers, judicial court fee stamps, revenue stamps, special adhesive stamps, foreign bills, broker's notes, insurance policies, share transfer certificates, insurance agencies, and many other legal documents. The entire scam was reportedly valued at over Rs 30,000 crore.

 

How was the scam uncovered?

On August 19, 2000, two men transporting counterfeit stamp papers were arrested in Cottonpet, Bengaluru, according to a report by the Quint. During the interrogation, the men exposed the scam, which led to raids across Bengaluru that uncovered counterfeit stamp paper and other legal documents that amounted to more than Rs 9 crore. However, at this time, Abdul Karim Telgi was just one of the suspects who had absconded.

 

Arresting the mastermind behind the scam

According to a report by The Financial Times in 2003, between 1992 and 2002, at least 12 cases relating to these stamps were registered against Telgi in Maharashtra alone and an additional 15 cases from other states. Cases were registered against him as early as 1991. However, no serious action was taken against Telgi.
 

A report by The Indian Express stated that the tax department assessment for the financial year 1996-97 pegged Telgi's annual income at Rs 4.54 crore, with nearly half of the income (Rs 2.29 crore) labelled as "unaccounted." Later, Telgi's legal team attempted to attribute this wealth to a kerosene transportation business. However, the claim was debunked due to a lack of supporting documentation.
 

Telgi was finally arrested in November 2001 after the police received a tip that he was travelling to Ajmer, Rajasthan, on a pilgrimage. Telgi's arrest would slowly reveal the true scale of the scam.
 

He initially told the police that he was a small part of a scam that involved many high-ranking officials, including police and politicians. Upon hearing this, the Special Investigation Team's (SIT) formed "STAMPIT", led by IPS Officer Sri Kumar, as a dedicated team to investigate the scam.

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Once a charge sheet against Telgi was filed by the Central Bureau of Investigation (CBI) in 2004, he was moved to prison, and the SIT was not able to interrogate him properly. Telgi reportedly continued his operations from prison, and in 2017, the High Court convicted two prison officials for supplying mobile phones to Telgi, according to the Quint.

 

High-ranking officials in the case

Telgi's scam spanned throughout the 1990s through the support of government officers and officials.
 

The Special Investigation Team (SIT) conducted an enquiry report, also known as the Jaiswal report, in November 2002, looking into Telgi's connection. However, no issue was raised.
 

It was not until social activist Anna Hazare filed a public interest litigation that the SIT went on to snag many high-ranking police officials and even some political figures in relation to the scam.
 

The SIT would go on to arrest 54 people, including Anil Gote, a Samajwadi Janata Party legislator from Dhule, Maharashtra, and MLA Krishna Yadav from the Telugu Desam Party. Commissioner Sharma was arrested one day after his retirement for allegedly protecting Telgi by the SIT in 2003.

 

Repercussions

In 2005, a tax demand of Rs 120 crore was levied against Abdul Karim Telgi by the tax department. This figure marked one of the most substantial tax liabilities imposed on an individual. Telgi also faced a sentence of 30 years behind bars and a hefty fine amounting to Rs 202 crore.
 

The Stamp Paper Scam highlighted the vulnerabilities in India's administrative and regulatory systems, prompting calls for greater transparency and stricter enforcement of rules and regulations. The case eventually went through a series of legal proceedings. The scandal also led to reforms in stamp paper issuance and the digitisation of stamp paper records to prevent such scams in the future.

 

Acquittal in the Stamp Paper Scam

Telgi passed away on October 23, 2017, after multiple organ failures at Victoria Hospital, Bengaluru. He was reportedly suffering from many long-term health problems, including hypertension and diabetes, as well as meningitis.
 

A year after his death, on December 31, 2018, the Nashik session court in Maharashtra cleared Telgi and seven others in the Stamp Paper Scam case. The court judge, first class, P R Deshmukh, ruled that there was a lack of evidence against the accused.

 

Scam 2003

When Scam 1992 based on the Harshad Mehta scam released in 2020, it was a huge success and even earned a lead position on IMDB's "Top 10 Indian Web Series List". Now, Hansal Mehta is continuing the series with "Scam 2003: The Telgi Story". 
 

The season will follow Abdul Karim Telgi and his journey to becoming the kingpin of one of the largest financial scams that spanned over 12 states in India. 
 

The show has been adapted from Hindi book "Reporter Ki Diary" by Sanjay Singh and will have Gagandev Riar in the lead role.

This series was produced by Applause Entertainment and StudioNEXT is in association with SonyLIV. The trailer for the series is already out with the show expected to release on September 2.