Nagarwala Corruption Scandal

The 1971 Nagarwala scandal was a fraudulent act in which Rustom Sohrab Nagarwala convinced Ved Prakash Malhotra to withdraw 6 million rupees from the branch of the State Bank of India where he was the head cashier.

Crime

On 21 May 1971, Nagarwala called Malhotra at the State Bank of India, and imitated then Prime Minister Indira Gandhi. Nagarwala claimed that the Prime Minister immediately needed Rs 6 million. Some sources report that the money was needed for a "secret mission to Bangladesh", while others report more simply that the money was requested for a "man from Bangladesh". In his later confession, Nagarwala stated that he described it as a "matter of great national importance".Nagarwala further told Malhotra to contact that he should contact the Prime Minister's office at a later date to get a receipt. Malhotra agreed to get the money and later delivered it to Nagarwala (who claimed to be a courier working for the Prime Minister) in a taxi later that day.

Arrest And Trial

Later, Malhotra went to the Prime Minister's residence to get a receipt as requested, but was informed that no such request for funds had been made by the Prime Minister. Malhotra informed the police of the fraud. Within less than one day, Nagarwala was found and arrested, and the majority of the money was recovered. Malhotra allegedly confessed to the crime on 26 May, and was convicted in a ten-minute court trial. In his book on investigative journalism, S.K. Aggarwal called the speed of this trial "unique in legal history".Nagarwala was sentenced to four years imprisonment and died while in custody.

Reddy Commission Report And Aftermath

In 1977, after a change in government, P Jagan Mohan Reddy was appointed to inquire into the event. In 1978 the Commission issued an 820-page report on the matter. Most notably, the report found that the confession should have been rejected and that it was unsubstantiated by any evidence. They also found that Nagarwala's death was caused by amyocardial infarction and thus there was no reason to suspect foul play. S.K. Aggarwal said that a 1986 article in The Statesman described a series of letters by Nagarwala that imply a relationship between himself and Indhira Gandhi, though Gandhi herself could not specifically recall meeting Nagarwala. In letters written while he was jailed, Nagarwala claimed that he wanted to reveal the truth behind the crime and that it would be a "great eye opener for the nation".