The residence of senior IAS officer S Malarvizhi in Chennai was raided by officers from the directorate of vigilance and anti-corruption (DVAC) on allegations of swindling public funds. An FIR has been filed against Malarvizhi for her involvement in printing tax receipts worth ?1.8 crore through private printers at inflated prices and excessive quantities during her tenure as district collector of Dharmapuri from February 2018 to October 2020. The DVAC accuses her of misappropriating ?1.3 crore in this scheme. Two private printers involved in the operation are also named in the FIR.
The DVAC officers conducted the raid at Malarvizhi’s residence in connection with a money laundering case. The charges stem from her time as district collector during the previous AIADMK regime in Tamil Nadu.
The FIR, filed on June 5 under the Prevention of Corruption Act, 1988, accuses Malarvizhi of printing 125,500 receipt books (related to house tax, professional tax, water tax, and miscellaneous tax) worth ₹1.8 crore, which were distributed to 251 Panchayats. The DVAC alleges that she misappropriated ₹1.3 crore in the process.
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“This is the first time in the last 15 years in Tamil Nadu that an IAS officer has been named in a corruption case,” says Jayaram Venkatesan, founder of the anti-corruption movement Arappor Iyakkam in Chennai. “The key here is the nexus between politicians and IAS officers, which allows such irregularities and corruption at multiple levels. So, this FIR is a welcome move to begin cracking down on that.”
Malarvizhi is identified as the primary accused (A1) in the case, while two individuals, Thageer Hussain (Proprietor of Crescent Traders) and Veeraiah Palanivelu (Proprietor of Naga Traders), who operated the private printing operations, are named as the other accused (A2, A3).
The DVAC’s investigation revealed that there is no documentary proof to support Malarvizhi’s claim that she received an instruction from the director of rural development and panchayat raj to procure tax books from private institutions during a review meeting in Dharmapuri in November 2019.
The FIR states that the public servant entered into a criminal conspiracy with A2 and A3 with the intention to commit fraud on government funds by procuring 125,500 tax receipts worth ₹18,197,500. The receipts were supplied to all village Panchayats and were paid for from the funds allocated to Panchayat unions for three months from January to March 2020, under the state finance commission. The payments to A2 and A3 were found to be exorbitant compared to the rates of the Dharmapuri district printers service industrial co-op society ltd.
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“A-1 being a public servant had performed her official functions improperly or dishonestly in anticipation of or in consequence of accepting undue advantages from A-2 and A-3,” states the DVAC. “She being entrusted with the funds of the government dishonestly/fraudulently misappropriated a sum of ₹13,177,500 and converted it for her own use with their active connivance.”
Venkatesh highlights that the cost of printing one book in government societies is ₹40, while Malarvizhi paid ₹135 per book to the printers, resulting in a loss of ₹1.3 crore to A2 and A3. The activist emphasizes that the source and extent of the money received by the IAS officer will only be known after further investigation.
Since 1991, there has been a government order in place to make purchases from the Dharmapuri district printers service society, which operates with the share capital of the Tamil Nadu government. The DVAC asserts that all books and receipts should be purchased from this society to ensure good quality at low costs throughout Tamil Nadu.
“The DVAC said there is no rule that permits A-1 to enter into these types of transactions with private firms,” states the report. “It would only arise in case of any inconvenience in procuring the books from the government co-op printing press.” Such transactions should be subject to an open tender under the Tamil Nadu Transparency in Tenders Act 1998. The DVAC accuses Malarvizhi of disregarding these procedures and proceeding with the fraud in collusion with A2 and A3.
The agency also discovered that the quantity of books purchased could last for another 15 years, but the quality would deteriorate over time. Jayaram points out that Malarvizhi supplied books that would last more than 50 years to some Panchayats, even though they would only require one or two miscellaneous tax books per year.
When contacted, Malarvizhi’s mobile phone was switched off, and the DVAC also conducted parallel searches against P Krishnan, the former block development officer of Pennagaram Panchayat Union in Dharmapuri. The DVAC believes that a deeper investigation and scrutiny of relevant documents and witnesses are necessary to uncover the larger conspiracy and involvement of other officials in defrauding government funds.