Over 300 mule account passbooks seized in ED raids linked to Delhi classroom 'scam'

The ED registered an Enforcement Case Information Report (ECIR), which is equivalent to a police FIR, under criminal provisions of the Prevention of Money Laundering Act (PMLA).
ED has seized more than 300 bank passbooks linked to mule accounts opened in the names of labourers.
ED has seized more than 300 bank passbooks linked to mule accounts opened in the names of labourers.(File Photo | ANI)
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NEW DELHI: The Enforcement Directorate (ED) has seized more than 300 bank passbooks linked to mule accounts opened in the names of labourers, allegedly used for diverting Delhi government funds sourced from the classroom-construction “scam” during the previous AAP regime, officials said on Friday.

It is to be noted here that ED officials conducted searches in connection with the case at 37 locations across Delhi on June 18. The AAP termed the move a “desperate” attempt to divert public attention and asserted that the allegations against its leaders were “politically motivated”.

The ED registered an Enforcement Case Information Report (ECIR), which is equivalent to a police FIR, under criminal provisions of the Prevention of Money Laundering Act (PMLA).

This was based on an FIR registered by the Anti-Corruption Branch (ACB) of Delhi on 30 April against AAP leaders and former ministers in the cabinet of Chief Minister Arvind Kejriwal, including Manish Sisodia, Satyendar Jain, and a few others.

Later, in a statement, a copy of which is with this newspaper, the ED said its officials had “unearthed substantial incriminating evidence from the premises of a private contractor”.

It said, “Among the materials seized were original departmental files belonging to the Government of National Capital Territory of Delhi, as well as rubber stamps bearing the names and designations of officials from the Public Works Department (PWD).”

Officials also found that “322 bank passbooks linked to mule accounts (used for transacting illicit funds) opened in the names of labourers [were] used to divert government funds under the guise of legitimate transactions,” the agency said in the statement.

Some “forged” letterheads of private contractors and shell entities, which were used to generate fake procurement records and fictitious purchase bills, were also seized during the raids, it added.

The ED said the case pertains to financial “misappropriation” exceeding ₹2,000 crore in the construction of 12,748 additional classrooms by the PWD between 2015 and 2023.

Despite an initial requirement for 2,405 classrooms, the project scope was “arbitrarily” increased to 7,180 equivalent classrooms and, subsequently, to 12,748 rooms “without” proper sanction or approvals.

This resulted in “massive” cost escalations, the agency alleged, while noting that there was an “unjustified” adoption of richer specifications proposed by the executing company, Babbar and Babbar Associates, and execution of duplicate and inflated works. “Cost escalations of up to 49.03 percent were observed across priority-I and priority-II phases,” it further said.

The agency also claimed to have found “several dummy firms during the searches, which had no real infrastructure, documentation or operational legitimacy, but were shown to have received substantial payments for construction activities relating to the additional classrooms”.

In connection with this case, the ACB has already questioned Sisodia and Jain after registering the case, following the Central Vigilance Commission (CVC) flagging alleged lapses.

Bharatiya Janata Party (BJP) leaders including Kapil Mishra, Harish Khurana, and Neelkant Bakshi had, in 2019, filed a complaint with the ACB alleging serious financial irregularities in the construction of classrooms across three zones of Delhi.

The ACB, in its FIR, alleged that the total expenditure incurred on the project amounted to Rs 2,892 crore, pushing the per-classroom cost to Rs 24.86 lakh, compared to the estimated Rs 5 lakh under standard norms. It also claimed that the project was awarded to 34 contractors, most of whom were allegedly linked to the AAP.

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