I-T dept pegs medical seat scam at Rs 100cr, may refer case to CBI

The department is likely to refer the case to the CBI to investigate charges of corruption against Parameshwara under the Prevention of Corruption Act, sources said. 

Published: 12th October 2019 05:49 AM  |   Last Updated: 12th October 2019 05:49 AM   |  A+A-

Photojournalists outside the house of former Dy CM G Parameshwara following the raids by I-T sleuths | NAGARAJA GADEKAL

Express News Service

BENGALURU: The medical admission scam in the three colleges in Karnataka, two of which belong to Congress leader and former deputy chief minister G Parameshwara, is estimated at around Rs 100 crore, official sources told TNIE. 

“The initial investigation by the Directorate of Income Tax (Investigation), Karnataka & Goa has unearthed gross violations under the provisions of the Income Tax Act, 1961 and the stringent Benami Transactions (Prohibition) Amendment Act of 2016,” said an I-T officer. The department is likely to refer the case to the CBI to investigate charges of corruption against Parameshwara under the Prevention of Corruption Act, sources said. 

“The I-T searches have revealed that 185 government quota seats in these medical colleges were sold at a premium ‘donation’ fee ranging between Rs 50 lakh and Rs 65 lakh. The tax authorities have so far seized unaccounted cash of Rs 8.82 crore during the searches including Rs 89 lakh from Parameshwara’s residence, which he was unable to explain,” said the officer.   

He added that collection of capitation fee is itself a criminal activity under the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984. The two colleges - Sri Siddhartha Medical College and Sri Siddhartha Institute of Medical Sciences & Research Centre, belong to the Sri Siddhartha Education Trust, of which Parameshwara is the main trustee.

On the benami transactions, the officer said, “Out of the Rs 8.82 crore cash that was seized during the raids, Rs 4.6 crore was recovered from the fixed deposits of eight employees of the Sri Siddhartha Education Trust. The employees have  told the income tax officers that the money reportedly belonged to the trustees, who had diverted it to their accounts. The trustees have also opened benami bank accounts in the names of their employees to deposit some of the capitation fee received in cash. The interest from the benami fixed deposits is being used to service the loans taken by the trustees in their personal capacity. They have also used the cash, which was collected as donation for purchase of immovable assets such as hotels and property.”

The DGIT searches that began on October 9 in Karnataka, Rajasthan and Delhi have established that seats, which were originally to be allotted by merit through counselling by the Medical Counselling Committee (MCC) were “maliciously converted into institutional quota seats through dropout system. The racket was being operated through a cross country network of commission agents, hawala operators and property dealers. 

The DGIT officials have recovered strong written and audio evidences from the searched persons. Certain students, whose names were used for conversion of MBBS and Post Graduate seats have given statements establishing the modus operandi of the racketeers,” added the officer.

The tax officers had also searched the Sri Devaraj Urs Academy of Higher Education & Research in Kolar, linked to Congress leader R L Jalappa, and found that 29 government quota seats were sold.


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