CBI busts Rail Neer Scam in Railways; seizes Rs.27 Crore from Suppliers

IRCTC incurred losses due to alleged corruption in supply of packaged water on trains

CBI officials with cash amounting to more than 20 crores recovered during search of seven private firms that allegedly supplying cheap packaged drinking water (PDW) other than mandatory “Rail Neer” in premium trains
CBI officials with cash amounting to more than 20 crores recovered during search of seven private firms that allegedly supplying cheap packaged drinking water (PDW) other than mandatory “Rail Neer” in premium trains

New Delhi: The CBI on Saturday recovered Rs 27 Crore in cash during searches at 13 locations against two former Northern Railways officials and seven private firms in connection with alleged corruption in supply of packaged drinking water other than mandatory ‘Rail Neer’ in premium trains.

CBI sources said a case has been registered against the then Chief Commercial Managers (PS and Catering) of Northern Railways M S Chalia and Sandeep Silas. The Ministry of Railways announced earlier that two officials whose homes were raided by the CBI stand suspended.

CBI also recovered fake currency of Rs 4 lakh among Rs 27 crore recovered from Railway caterers during its searches.

Sources said, the agency stumbled upon unaccounted cash which was so huge that it took 15 hours of counting the currency with the help of three counting machines and five officials of the agency.

The agency has also booked private companies RK Associates Pvt Ltd, Satyam Caterers Pvt Ltd, Ambuj Hotel and Real Estate, PK Associates Pvt Ltd, Sunsine Pvt Ltd, Brandavan Food Product and Food World under Prevention of Corruption Act provisions. Silas has served as the private secretary of a former Union Minister.

They said cash recovery of Rs 20 crore was made from the residence of Shyam Bihari Agrawal, his sons Abhishek Agrawal and Rahul Agarwal who own RK Associates and Brandavan Food Product.

irctc railneer racket cbiAgrawal, who hails from Durg in Chhattisgarh, started as a small time caterer somewhere in 2004 and slowly increased the business taking the turnover of his company to around Rs 500 crore catering in almost all the Shatabdi and Rajdhani trains, the sources said.

They said cash of Rs 1 crore was recovered from the office of his firms while Rs 52 lakh was recovered from the residence of his Chief Executive Officer.

The sources said CBI may slap charges of fake currency on Agrawal.

Counting mountains of cash isn’t an easy task. But for the good folks at the Central Bureau of Investigation (CBI), it’s just part of the job description
Counting mountains of cash isn’t an easy task. But for the good folks at the Central Bureau of Investigation (CBI), it’s just part of the job description

They said Agrawal, who was allegedly carrying on with fraud of selling cheap water in place of Rail Neer since 2012 in the trains, had purchased lot of land in the national capital region and owns luxury hotels in Noida, Ghaziabad, Navi Mumbai, Raipur.

They said he used his connections with the Railway officials to allegedly grab lucrative contracts of restaurants on Railway premises.

The two former Chief Commercial Managers Northern Railways (Catering division) were suspended in the wee hours of Saturday morning after CBI registered a case against them for allegedly showing favour to private firms which provided cheap packaged drinking water (PDW) to premium trains instead of the mandatory “Rail Neer”. The agency on October 16 carried out searches at 13 locations in NCR which included premises of two Chief Commercial Managers of Railways and private companies which included the two firms run by Agrawal.

CBI officials piling up the bundles of cash being counted
CBI officials piling up the bundles of cash being counted

It is alleged that the accused Railway officials had shown favour to private firms in supply of cheap packaged drinking water (PDW) other than mandatory ‘Rail Neer’ in premium trains including Rajdhani and Shatabdi Express.

The officers identified as Sandeep Silas and MS Chalia, posted as Chief Project Manager (FOIS) and Chief Claims officer, respectively, now might be facing arrest if the probe agency deems it necessary to question them. Silas has served as the private secretary to three former Union ministers including Oscar Fernandes, Mallikarjun Kharge and Ambika Soni.

CBI spokesperson Devpreet Singh said it was further alleged that the Railway Board had prescribed that IRCTC shall provide Rail Neer at a rate of Rs 10.50 (approx) per bottle to the private caterers and the private caterers will be paid Rs 15 (approx) per bottle for supplying the same to passengers in premium trains.

According to sources the probe into their role has further widened after CBI recovered incriminating documents from the premises of private firms which were allegedly shown favour by the two officials. According to a CBI source, the probe agency is not only looking into the supply of bottled water, but also into restaurants located at railway stations that belonged to the catering firms which were in the good books of the officials. The agency is also looking into the catering products and food served in premium trains including Shatabdi and Rajdhani express. However, the private suppliers in order to obtain undue gain, were allegedly supplying cheap packaged water, other than “Rail Neer”, available in the market at a rate of Rs 5.70 to Rs 7 (approx) per bottle, thereby causing gain to themselves and loss to the exchequer, the official said.

Searches are being conducted today at 13 places in Delhi and Noida which led to recovery of cash amount of more than Rs 20 crore (approx) and a large number of incriminating documents — Devpreet Singh, Spokesperson, CBI

“The accused public servants allegedly did not take any action against the private parties providing catering services in the premium trains despite repeated requests of IRCTC for non-picking of allotted quota of ‘Rail Neer’ by Private Caterers,” the spokesperson said.

Piles and Piles of Cash - Searches conducted today at 13 places in Delhi and Noida which led to recovery of cash amount of more than Rs 20 crore (approx) and a large number of incriminating documents
Piles and Piles of Cash – Searches conducted today at 13 places in Delhi and Noida which led to recovery of cash amount of more than Rs 20 crore (approx) and a large number of incriminating documents

CBI said directions of Railway Board to ensure supply of “Rail Neer” in premium trains were also ignored by the officials thereby causing undue pecuniary advantage to the private parties and corresponding loss to IRCTC.

“The accused public servants allegedly did not take any action against the private parties providing catering services in the premium trains despite repeated requests of IRCTC for non-picking of allotted quota of “Rail Neer” by private caterers and directions of Railway Board to ensure supply of “Rail Neer” PDW in premium trains, thereby causing undue pecuniary advantage to the private parties and corresponding loss to IRCTC,” said Devpreet Singh, CBI spokesperson.

On Friday the probe agency conducted searches on premises of at least seven private firms based in Delhi and recovered Rs20 crores in cash. CBI officials told that the amount that has been recovered has increased to a whopping Rs28 crores. “The money was stuffed in 27 large bags and hidden in various locations raided by the agency,” said a CBI official.

Bundles of seized Cash in Rail Neer scam lie in ordered piles at an undisclosed location of CBI
Bundles of seized Cash in Rail Neer scam lie in ordered piles at an undisclosed location of CBI

The companies booked by CBI are RK Associates Pvt Ltd, Satyam Caterers Pvt Ltd, Ambuj Hotel and Real Estate, PK Associates Pvt Ltd, Sunsine Pvt Ltd, Brandavan Food Product and Food World, under Prevention of Corruption Act.

“A large number of incriminating documents have also been recovered,” said the CBI spokesperson.

Officials told that the most of the money was recovered from the residence of Shyam Bihari Agrawal, his sons Abhishek Agrawal and Rahul Agarwal, who own RK Associates and Brandavan Food Product World.

“Mr Agarwal was a small-time businessman in Chhattisgarh nearly two decades ago. Examination of accounts of one his firms shows that he has a turnover of more than Rs500 crore,” said a CBI official privy to the investigation. According to the official, the close relations Agarwal shared with senior officials of the railways had helped him to accumulate vast sums of money.

According to officials, the Railway Board had prescribed that IRCTC shall provide “Rail Neer” at a rate of rupees 10.50 per bottle to the private caterers who in return would be paid rupees 15 per bottle for supplying the same to the passengers in premium trains . The private caterers however in order to obtain undue gain were allegedly supplying cheap PDW brands, instead of “Rail Neer”, which were available in the market at a rate Rs5.70 to Rs7 per bottle. The agency said the total amount of loss to the exchequer is yet to be calculated

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