Dahod (Gujarat): There are a handful of small unassuming shops with their boards saying ‘Shree Raj Traders’ or ‘Shree Raj Trading Company’ at Piperao Village in the Dhanbad Taluka of Gujarat’s Dahod district. On a Wednesday afternoon, most had their shutters down, while one or two had trucks parked outside, loading and unloading cement sacks.
By the looks of it, there is nothing unusual about these outlets. But, Piperao residents were unwilling to give directions to any shop or office of Shree Raj Traders, or even talk about what the company does.
The company is at the heart of an alleged Rs 71-crore corruption related to works sanctioned under the Mahatma Gandhi National Rural Employment Guarantee Act. And its proprietor, Kiran Khabad, is none other than the son of Gujarat’s Minister of State for Panchayat and Agriculture, Bachubhai Khabad. The Dahod Police arrested Kiran Khabad on Monday.
According to documents accessed by ThePrint, Shree Raj Traders is among 35 agencies that have been accused of defrauding the state by taking full payment for supplying material for works under the rural employment guarantee scheme. The works were either never initiated or left incomplete. The phone number on one of the shops of Shree Raj Traders at Piperao was switched off.
Shree Raj Construction, another company related to the Khabads, is also among the list of the infamous 35. And MoS Khabad’s elder son, Balvant Khabad, who is associated with the business, was arrested two days before his brother Kiran.
According to an FIR dated 24 April, which ThePrint has seen, these agencies, many of which had not even participated in the tender process or were not the lowest bidders, colluded with government officials to supply material for works sanctioned under MGNREGA. The FIR says they worked hand-in-glove with government officials and caused losses to the state exchequer by taking full payment for works left incomplete.
All of this happened over three years from 1 January, 2021 to 31 December, 2024, in MoS Khabad’s constituency, Dahod’s Devgadh Baria, which comprises the talukas of Devgadh Baria as well as Dhanpur.
As per the investigation so far, bills to the tune of Rs 60.9 crore were received over the three years to supply materials for works under MGNREGA in the Devgadh Baria taluka by agencies that were not the lowest bidders in the tender process and were not authorised to supply.
Of these, bill totalling Rs 22.35 crore, or more than a third of the total amount of the alleged amount, came from Shree Raj Traders.
Similarly, in the Dhanpur taluka, bills worth Rs 10.1 crore were received from agencies that were not the lowest bidders for the supply of construction material for MGNREGA schemes in those three years.
Seventy-six percent of the total amount, that is Rs 7.69 crore out of the Rs 10.1 crore, were in bills put up by Shree Raj Traders.
“We have arrested 14 persons in the case so far. Of these 14, 10 are government employees or people outsourced by the government for monitoring the functioning of MGNREGA schemes. Broadly, we are focusing our probe on whether there is a larger conspiracy, the extent of financial gains, the possible role of any more government officials, and the nexus between private companies and government employees,” Jagdish Bhandari, the deputy superintendent of the Dahod police, told ThePrint.
With regards to the two companies linked to the two sons of MoS Khabad, one did participate in the tender process and was the authorised lowest bidder, while the other wasn’t.
For instance, in the Dhanpur taluka, Shree Raj Construction had received work orders as the lowest bidder for the period of 1 April, 2020 to 31 March, 2021.
“However, there are a total of 120 works that were left incomplete for which materials were supplied by 35 agencies, including these two. Some were the authorised lowest bidders, while some weren’t,” Bhandari said.
The senior Khabad first won the Devgadh Baria constituency in 2002. The BJP dropped him in 2007 and lost the seat to the Congress. Khabad was brought back in 2012 and has been representing the Devgadh Baria constituency since then. He was a minister of state from 2014 to 2016 too, handling a bunch of portfolios such as fisheries, environment and forests, energy and petrochemicals, and science & technology.
The Opposition has been demanding Khabad’s resignation, but neither he himself nor any other minister in the Gujarat government has indicated anything of that sort is going to happen.
ThePrint reached the minister through calls and messages, but he did not respond. The report will be updated if and when a response is received.
Speaking to reporters in Gujarat on Wednesday, Khabad said he has not been proven guilty. He said people should wait for the investigation to be completed.
“My two sons legally do the work of supplying construction material. We are people who work. I have been working since 2002, I have been working with the party, I have worked as a minister. I am also handling the panchayat department. My voters are with me, the Dahod district is with me. People have full faith in me and we have full faith in the government. Let the government machinery investigate,” he said.
“If anything comes out of the investigation, only then I can be proven guilty and the government and the court can take a decision. Both my sons and I will cooperate. I don’t want to say anything more,” he added.
How the case unfolded
In March this year, the Dahod District Rural Development Agency (DDRA) got an email from the Gujarat government about a complaint from Seemamoi village in the Dhanpur taluka about works under MGNREGA being allegedly left incomplete. The complainant, a village resident, alleged that the agencies that had supplied material benefitted by getting paid in full for incomplete work.
“The complaint had been registered on the state government’s portal and was forwarded to us. We were asked to look into the issue,” a government official involved in the initial investigation said, requesting anonymity since it has turned into a sensitive case.
“Similarly, the Opposition Congress had raised similar complaints about works in the Kuva and Redhana villages of the Devgadh Baria taluka and the state government had promised an investigation. So, we decided to take these three villages as a sample and conducted field visits to find that many works were indeed left incomplete,” he added.
In January this year, the Gujarat Congress alleged corruption in MGNREGA schemes in the Devgadh Baria taluka. Congress MLA Amit Chavda said the residents of the taluka told party leaders Rs 100 crore has been misappropriated under this scheme. Chavda had also named some agencies, including Shree Raj Traders and Shree Raj Construction, saying they were close to a local minister.
The party then also set up a fact-finding committee of its four leaders who visited the Kuva and Redhana villages to physically check the status of infrastructure works sanctioned. They compiled a 10-page report, a copy of which is with ThePrint. The report flagged “serious irregularities” in works related to drainage, Pradhan Mantri Awas Yojana, streetlights, water tanks and roads.
The report claimed tenders were issued without following rules with most bids awarded to a select group of contractors. It alleged bills were paid to agencies without them completing the work, with there being some cases where mere marking was done on the ground, but payment was released in full.
There was no monitoring of work, no site inspections or quality checks, according to the report.
After taking up the investigation into the three sample villages—Redhana, Kuva and Seemamoi—and physically verifying the status of works, the Dahod District Rural Development Agency (DRDA) looked at the accounts for these works, and pulled out details of the payments that had been released and the agencies these payments were made to.
“Under MGNREGA, everything is supposed to be transparent, because geo-tagged pictures of the completed works have to be uploaded for payments to be made. All these photographs were in place, we don’t know how. But works on the ground were not complete,” the official quoted earlier said.
After conducting field visits, poring over the receipts and scrutinising the payments made to different agencies, the DRDA had a concrete case and proceeded to file a police complaint on 24 April.
B.M. Patel, who was then the director of the DRDA, filed the complaint that became the basis for the FIR. While the FIR details the roles of different agencies involved in supplying material by naming them, in the ‘accused’ section, it doesn’t particularly mention specific companies, their proprietors or the government officials involved.
On 3 May, the Gujarat government transferred Patel as the regional commissioner of municipalities under the state urban development department.
“The person registering the complaint involving the minister’s sons was transferred within days of the FIR being registered. It can’t be a coincidence,” Gujarat Congress spokesperson Parthivraj Kathawadiya told ThePrint.
However, the DRDA official ThePrint spoke to said Patel had been posted at the DRDA for over two years. He had been promoted to the IAS cadre on 20 February, 2025, and was due for a promotion in terms of his assignment.
Patel declined comment to ThePrint.
While the current probe is limited to the three villages—Kuva, Redhana and Seemamoi—in the Devgadh Baria and Dhanpur talukas, DRDA officials say there could be similar instances of alleged graft in other villages of Dahod too.
For instance, in October last year, a similar case had come to the fore at Lavariya village in the Devgadh Baria taluka where the DRDA found that Rs 18.41 lakh were allegedly siphoned off for 21 bogus projects. The DRDA had suspended two contractual employees. There is, however, no official order on record to expand the current probe to other villages in the district, DRDA officials said.
Aam Aadmi Party’s Gujarat state president Isudan Gadhvi said in a statement to ThePrint, “This scam has occurred within the minister’s own department, yet the BJP has taken no action. He remains in office, untouched by CBI or ED scrutiny. If the police has arrested the minister’s sons, why is the minister still in power? The BJP’s silence suggests a wider cover up.”
He added, “A full probe would likely uncover a scam spanning multiple talukas and running into thousands of crores.”
Incomplete works, complete payments
The Seemamoi village in Dhanpur, set in the midst of lush trees, is a canvas of incomplete works—stone-pecked roads, cattle sheds, poultry sheds, stone bunds and so on.
As per DRDA’s complaint, there were 38 community works sanctioned in Seemamoi under MGNREGA as of 29 January, 2025. These included building a road length of 19.2 km. Of this, only 3.5 km was actually built.
Meanwhile, Shree Raj Construction Company was paid Rs 5.28 crore for different works, the complaint said.
Similarly, in Kuva village, different agencies were paid Rs 3.37 crore for supply of material for works such as roads and checkdams between April 2021 and March 2024.
Of this amount, Rs 1.80 crore ended up with agencies that were not the lowest bidders and were not authorised to supply construction material. These include agencies such as NJ Enterprise, Royal Hardware, Shree Vrajesh Steel Traders and Shree Raj Traders, as per the complaint.
Of the Rs 1.80 crore, Shree Raj Traders was paid Rs 1.31 crore during this period for works in Kuva village. The works included check walls, group walls, drain plugs, new anganwadis, stone bunds and so on, according to the complaint.
The complaint says, as part of 41 works in Kuva village, 25.06 kilometres of road had to be built of which only 15.17 km was actually completed.
In the Redhana village, between April 2021 and March 2024, 33 different works were approved for which agencies were paid Rs 3.18 crore for supply of material, of which Rs 1.8 crore went to agencies that were ineligible to supply. Again, Shree Raj Traders accounted for most of this sum at Rs 1.04 crore, as per the complaint.
Shree Raj Construction was paid Rs 32 lakh, while payments were also made to companies such as Pramukh Cement Depot, Royal Hardware and Shree Vrajesh Steel Traders, which as per the complaint, were not eligible to supply material for these works.
In Redhana, a road length of 16.8 kilometres had to be built under MGNREGA, of which 6.7 kilometres was left incomplete as of 29 January this year.
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The arrests
Other than Kiran and Balvant Khabad, and other private individuals, the Dahod police has also arrested government officials such as deputy district development officer Rasik Rathwa, taluka panchayat officers Dilip Chauhan, Bhavesh Rathod and Parth Baria, and the former taluka development officer Darshan Patel, among others.
Baria is also a proprietor of one of the firms that the Dahod police is probing for supplying construction materials for MGNREGA works left incomplete, a source in the Dahod Police told ThePrint.
Chauhan is reportedly Kiran Khabad’s nephew.
As per police sources, Kiran and Balvant Khabad filed for anticipatory bail in a Dahod court, but later withdrew their petitions, preparing to abscond and evade arrest.
At the taluka panchayat office in Devgadh Baria, the rooms for MGNREGA staff were completely empty and locked from outside. The record room, which stores all files related to MGNREGA works, were also sealed so that nobody can tamper with them while the investigation is underway.
“We have almost no staff left in the Devgadh Baria and Dhanbad talukas now for any MGNREGA related works. Almost all of them have been arrested or are being investigated in this case,” a DRDA official who did not wish to be named said.
As he spoke, he showed real time reports with the status of work at different places under MGNREGA.
Among the nine talukas of Dahod, the columns of Dhanpur and Devgadh Baria had a consistent ‘0’ written in red in the column for the percentage of work completed for the past few days.
(Edited by Ajeet Tiwari)
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