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Bihar Govt: Officials accepted ‘inadequate’ securities from millers

The Bihar government had, last week, informed the SC that as per the agreement between state and rice millers, the latter were to furnish bank guarantees or pledge unencumbered immovable properties in lieu of paddy procurement.

, ET Bureau|
Nov 07, 2019, 07.52 AM IST
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Admonishing the Nitish Kumar government for trying to save its own officials instead of taking action against them, the Supreme Court has asked the state to “put its house in order and proceed accordingly”.
NEW DELHI: The investigation into the Rs 1,500-crore paddy scam has taken a curious turn with the Bihar government conceding that its own officials colluded with mill owners by accepting “incomplete and inadequate” securities furnished in lieu of the paddy procured from the state.

Admonishing the Nitish Kumar government for trying to save its own officials instead of taking action against them, the Supreme Court has asked the state to “put its house in order and proceed accordingly”. It has also sought the details of 300 FIRs registered by the Bihar police to issue notices to the accused.

Faulty guarantees
The Bihar government had, last week, informed the SC that as per the agreement between state and rice millers, the latter were to furnish bank guarantees or pledge unencumbered immovable properties in lieu of paddy procurement. “The deed of pledge so furnished by millers were in gross violation of clause 3 of the agreement which provided that the immovable property subject matter of pledge must be in the name of the millers. However, it has been found that in most cases, the property mentioned in the deed of pledge was not in the name of the millers but in the name of some other person,” the Bihar government has stated in its affidavit. “Therefore, such a deed of pledge cannot be used to secure the interest of the corporation in view of the fact that in case of default, such property which is not in the name of millers cannot be put to auction,” it added.

The state has told the SC that in most cases the “deed of pledge was not even registered” and in most cases, millers, in collusion with the officers, provided inflated value of the property in the deed of the pledge. Last August, the apex court had directed all the accused to furnish bank guarantees of the defalcated amount or submit pledge of deeds of the unencumbered properties. The Bihar government, last week, sought to modify the apex court’s order as the pledged securities “would not subserve public interest” as they are found to be “inadequate” or have been furnished in connection with “more than one contractual obligation and/or the securities by themselves are encumbered or the concerned properties are jointly held”.

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