Supreme Court Pushes for Closure in Long-Pending Lalu Prasad Yadav Fodder Scam Case

A Bench of Justice M.M. Sundresh and Justice N. Kotiswar Singh made the remark while hearing appeals filed by the Central Bureau of Investigation challenging a Jharkhand High Court order that granted bail to Yadav and suspended his sentence in the Deoghar treasury case.

Appearing for the CBI, Additional Solicitor General S.V. Raju argued that the High Court had misapplied settled law while suspending the sentence. He maintained that suspension of sentence after conviction, in the absence of any change in circumstances, was impermissible.

“This is post-conviction bail. The sentence has been suspended illegally. It cannot be done,” Raju submitted, insisting that the High Court order was contrary to law.

Senior Advocate Kapil Sibal, appearing for Yadav, urged the Court not to rush the matter. He pointed out that there were multiple accused in the case and that several of them had either not been served or had not yet filed their replies to the CBI’s appeals.

“There is no need for such excitement. There are other accused, some haven’t even filed replies,” Sibal said.

Responding to the submissions, the Bench remarked that all sides were well aware of the nature of the case and the legal issue involved. “Both of us know what this special leave petition is. We think both of you also know what the result is. You do your job, we do our job,” the Court observed, adding that the accused persons were now elderly.

“They are all illegally out,” the ASG countered, reiterating that the bail was granted after conviction.

The Court, however, chose not to enter into the merits at this stage and adjourned the matter for final hearing in April. It also directed that cases where the respondent-accused had died be formally closed, noting that the files had been pending for years.

Notably, in July 2025, the Jharkhand High Court had admitted the Central Bureau of Investigation's appeal seeking an increase in the sentence awarded to Lalu Prasad Yadav in connection with the Deoghar Treasury Scam. The Deoghar Treasury Scam is part of the larger Fodder Scam, which occurred when Lalu was in charge of the Animal Husbandry Department. In the instant case, he had fraudulently withdrawn INR 89.27 lakh from the Deoghar treasury between 1990 and 1994.

Lalu Prasad Yadav was convicted in December 2017 by a special CBI court in Ranchi for offences under various provisions of the Indian Penal Code and the Prevention of Corruption Act. He was sentenced to seven years’ imprisonment for his role in the fraudulent withdrawal of ₹89 lakh from the Deoghar treasury between 1991 and 1994, when he was the Chief Minister of Bihar.

Before the High Court, the CBI had filed an appeal against the trial court's sentence order, arguing that the punishment awarded to Lalu was not enough, as the offence is of a serious nature. The CBI also stated that when the alleged offence occurred, Jharkhand was part of Bihar. The investigative agency is now seeking an increased sentence, noting that it is an economic offence committed by a public servant who was then in charge of the office. The agency has further added that the investigation into the offence revealed that the RJD chief was aware of the defalcation in the Deoghar treasury. Despite this, the CBI contended that the trial court awarded a sentence of only three and a half years, whereas the offence itself carries a maximum sentence of seven years.