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MC seeks CBI probe into ₹116.84-crore fake FD scam linked to Smart City funds
According to officials, the issue surfaced after the Haryana government flagged mismanagement in funds invested in IDFC First Bank and AU Small Finance Bank
In a show of unanimity cutting across party lines, the Chandigarh municipal corporation (MC) House on Wednesday passed a resolution seeking a Central Bureau of Investigation (CBI) probe into the alleged ₹116.84-crore fake fixed deposit receipt (FDR) scam linked to the Chandigarh Smart City Limited (CSCL) funds, uncovered last month. The proposal will now be forwarded to the Chandigarh administration for necessary approvals.
During the General House meeting, MC officials presented a ‘white paper’ detailing the suspected financial irregularities. According to officials, the issue surfaced after the Haryana government flagged mismanagement in funds invested in IDFC First Bank and AU Small Finance Bank. Acting on the inputs, MC authorities approached IDFC First Bank in Sector 32, seeking encashment of FDRs and relevant bank statements for verification.
However, scrutiny of the documents revealed that FDRs worth approximately ₹116.84 crore – shown as active assets in the official handover records – did not exist in the bank statements obtained on February 24. Further examination flagged three payment entries from 2025 amounting to ₹8.22 crore, which had no corresponding entries in MC records, raising suspicion of unauthorised transactions.
Officials informed the House that on February 25, senior bank authorities indicated that the FDRs appeared to be fake and fraudulent. Subsequently, the bank remitted ₹121.14 crore to the MC. The civic body, however, clarified that the amount remains subject to reconciliation and audit and cannot be treated as a final settlement. The MC also pushed for registration of an FIR, stating that the involvement of both bank and Smart City officials could not be ruled out.
In the wake of the revelations, the MC has already terminated an outsourced accountant and placed several officials, including an accountant and a superintendent, under suspension. Disciplinary action has also been proposed against a section officer of the UT finance department. These officials were responsible for handling records during the closure of CSCL.
Additionally, the MC has approached the Director General of Audit (Central) to conduct a special audit of CSCL, both before and after its closure, to ascertain financial losses and fix accountability.
Despite the detailed presentation, councillors expressed dissatisfaction, questioning how such a large sum was handled by a contractual employee and demanding accountability of senior officials. Congress councillor Taruna Mehta, said, “How can one contractual employee be given full authority to manage the ₹116 crore FD related funds. Who assigned him this task? Also, Smart City funds have been routed to other people through different channels, which officers are not revealing. Hence, detailed investigation is required and action is required on those involved.”
Following this, mayor Saurabh Joshi requested MC commissioner Amit Kumar to present a comprehensive white paper on all Smart City expenditures, project-wise, in the next House meeting. Following the discussion, the House unanimously resolved to seek a CBI inquiry to ensure a thorough and impartial investigation into the alleged scam.
Otther agendas approved/heated debate
The municipal corporation (MC) house on Wednesday witnessed heated exchanges between councillors and officials over multiple civic issues, including fire safety clearances, sanitation facilities, and parking policies.
A major controversy erupted over the issue of fire No Objection Certificates (NOCs), with councillor Ram Chander Yadav alleging that the MC, which issues fire NOCs across the city, does not have a fire-safe building of its own.
Councillor Gurpreet Gabi raised the long-pending issue of the Sahaj Safai Kendra (SSK) in Sector 45, stating that he has been demanding its removal for over four years. Despite repeated assurances, no action has been taken so far, he said. Gabi levelled serious allegations against officials, including the joint commissioner and the Medical Officer of Health (MOH), accusing them of collusion with waste contractors and corruption.
The MC is set to introduce a new system to boost parking pass adoption. Commissioner Amit Kumar informed the house that data of around 9 lakh vehicles has been procured from the Registering and Licensing Authority (RLA). Messages will be sent to vehicle owners, encouraging them to opt for monthly, quarterly, half-yearly, or annual parking passes. Sharing revenue details, the commissioner said the MC earned ₹1.1 crore from parking passes last year, which has increased to ₹1.3 crore this year. On the demand for a 15-minute free pick-and-drop facility, the commissioner said it is not feasible at present as it would double operational costs and require additional manpower. MC meanwhile approved a monthly parking pass on discounted rate, if bought for six months or annual.
Amid debate over sanitation tenders, the MC House decided to award the cleaning contract for southern sectors (31 to 56, 61 and 63) to Lions Company once again. The civic body had proposed either undertaking the work itself or splitting sectors into smaller pockets for fresh tenders. However, councillor Gurbaksh Rawat opposed the move, pointing out flaws in the tender and questioning the intent of some officials. Following support from other councillors, the House resolved to award the contract to Lions for ₹71 crore. The MC will pay the firm approximately ₹6 crore per month for sanitation services.
