The central bureau of investigation (CBI) has arrested a senior Indian Administrative Services (IAS) officer from Haryana cadre, Pankaj Agarwal, in connection with the alleged diversion of more than ₹60 crore from government accounts maintained with IDFC First Bank, marking a significant escalation in the agency's probe into what has emerged as a major public-funds embezzlement case.
According to officials, the 2000-batch IAS officer was arrested on Tuesday for his alleged role in the diversion of funds belonging to the Haryana School Shiksha Pariyojana Parishad (HSSPP) and the Haryana State Agriculture Marketing Board (HSAMB).
CBI alleged that fraudulent transactions carried out through accounts maintained at IDFC First Bank's Sector-32 branch in Chandigarh resulted in a loss of ₹60.54 crore to the Haryana government.
Mr Agarwal, who is currently serving as principal secretary in Haryana's architecture department, is expected to be produced before a court.
Investigators claim the irregularities occurred when Mr Agarwal was serving as principal secretary in the education and agriculture departments.
According to CBI, accounts of HSSPP and HSAMB were opened and operated at the Chandigarh branch of IDFC First Bank in violation of Haryana finance department guidelines.
The agency alleged that government funds exceeding prescribed limits were transferred into these accounts and subsequently used for fraudulent transactions.
Evidence collected during the investigation allegedly points to Mr Agarwal's involvement in the irregularities, the agency said.
The HSSPP-HSAMB case forms part of a wider investigation into the alleged diversion of government funds through accounts maintained at the same bank branch.
According to CBI, nearly ₹504 crore belonging to eight Haryana government departments was allegedly diverted through a network of shell entities after being routed through accounts at the Sector-32 branch of IDFC First Bank.
Some media reports have placed the overall scam amount under investigation at about ₹590 crore, while others have estimated the total exposure at around ₹661 crore, reflecting different stages and components of the ongoing probe.
The investigation was transferred to CBI following a reference from the Haryana government.
Mr Agarwal's arrest comes less than a week after the agency arrested senior IAS officer RK Singh in a related case involving the alleged diversion of government funds linked to the municipal corporation of Panchkula.
With the latest action, Mr Agarwal becomes the second serving or former IAS officer to be arrested in connection with the broader IDFC First Bank-linked fund-diversion investigations.
Investigators are examining the role of senior government officials, banking personnel and private entities in the alleged misuse of public funds.
CBI said it has already filed charge sheets against 17 accused in the Haryana-linked cases.
Those named include six officials of IDFC First Bank and AU Small Finance Bank, three government officials, two companies and six private individuals.
The probe has also expanded beyond Haryana government departments.
In separate cases relating to Chandigarh Smart City Ltd and the Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST), the agency has filed chargesheets against multiple bankers, government officials, private individuals and companies.
A senior officer from the Indian Forest Service has also been arrested in connection with one of the related investigations.
Mr Agarwal had earlier found himself at the centre of a political controversy following the Rajya Sabha elections in Haryana earlier this year, when he was serving as the state's chief electoral officer.
Senior Congress leaders, including former chief minister Bhupinder Singh Hooda, had questioned his conduct as returning officer during the elections and submitted a representation to the governor seeking action against him.
The Congress had alleged irregularities in the handling of votes and counting procedures. Mr Agarwal rejected the allegations and maintained that all actions were carried out strictly in accordance with Election Commission guidelines.
The Bharatiya Janata Party (BJP) government in Haryana defended the conduct of the election process and dismissed the opposition's allegations.
Mr Agarwal hails from Dhanbad, Jharkhand, and has held several key administrative positions under both Congress and BJP governments in Haryana.
Over a career spanning more than two decades, he has served as deputy commissioner of Kurukshetra and Sonipat, labour commissioner, transport commissioner and director general of food and civil supplies.
Ahead of the Haryana Assembly elections in 2024, he was appointed the state's chief electoral officer and subsequently held important portfolios, including school education, agriculture, mines and irrigation, before being transferred to the architecture department in April this year.
The Haryana government had earlier granted CBI permission under Section 17A of the Prevention of Corruption Act to investigate the alleged role of several senior IAS officers, including Mr Agarwal, in the fund-diversion cases.
The agency said further investigation is underway to determine the complete trail of funds and identify all individuals involved in the alleged fraud.
