The Central Bureau of Investigation (CBI) – India’s premier investigative agency was established in 1963 based on the recommendations of the Santhanam Committee on Prevention of Corruption.
Prior to that the CBI – as we know today, did not exist and an agency called Special Police Establishment (SPE) was created in 1941 primarily to investigate rampant corruption in defence deals particularly during World War II. In 1946 the Special Police Establishment (SPE) was replaced by the Delhi Special Police Establishment Act.
The Central Bureau of Investigation (CBI) was created by a resolution passed by the Ministry of Home Affairs (MHA) in 1963 and initially functioned under it from 1963 to 1965.
In 1965 the CBI was transferred from the Home Ministry to the Department of Personnel and Administrative Reforms, which falls under the Ministry of Personnel, Public Grievances and Pensions.
This was the way in which CBI was formed.
But, the tragedy is that even today the CBI is a non‑statutory body without a “CBI Act” passed by an Act of Parliament and draws its powers from the Delhi Special Police Establishment (DSPE) Act, 1946, which replaced the original Special Police Establishment (SPE) 1941.
This is primarily the reason why the CBI cannot – even today start investigating a case – howsoever serious — without the consent of the State Government under Section 6 of the DSPE Act. The only way it can investigate cases without state Government’s consent is when asked to do so by the Supreme Court or High Courts.
Today though it is still under the Ministry of Personnel, Public Grievances and Pensions CBI reports to the Prime Minister’s Office through the ministry, while the corruption cases are supervised by the Central Vigilance Commission.
It is headed by a Director (IPS officer, DGP rank) who is supported by Special/Additional Directors, Joint Directors, DIGs, and other staff recruited via SSC or on deputation from other government departments.
The Director CBI is appointed for a minimum period of two‑years by a high‑powered committee which includes the PM, Leader of Opposition and Chief Justice of India.
From the Jeep Scandal in 1948 to the Sharma case in 2025, corruption in defence deals remains one of CBI’s main workload – with over 1,800 cases being recorded between 2000–2023.
Here’s a chronological timeline of major defence corruption scandals investigated by the CBI, starting from independence up to the recent Lt Col Deepak Sharma case:
Major defence corruption cases probed by CBI (1947–2025)
1940s–1950s
1948 Jeep Scandal: In what is described as independent India’s first big defence-procurement scam V.K. Krishna Menon (then High Commissioner to the UK) signed an emergency contract in London for 2,000 refurbished jeeps worth ₹80 lakh from a relatively lesser-known British firm called Anti-Mistantes without following proper procedure during the 1947–48 Indo-Pak war. Of these, only 155 jeeps arrived (widely called reconditioned/substandard). The remaining order was never fulfilled, and the contract was eventually cancelled by the Deputy High Commissioner in London. A parliamentary inquiry also flagged the lapses, but the case closed on 30 September 1955 with no criminal charges were levied against anyone – including Menon who formally joined Nehru’s cabinet in Feb 1956 and was made Defence Minister on 17 Apr 1957.
1980s–1990s
1986 Bofors Scandal – In one of India’s most infamous defence scandals CBI filed an FIR in 1990 against Win Chadha (Bofors’ India agent), S.K. Bhatnagar (then Defence Secretary), and officials of AB Bofors (Sweden) in the ₹1,437 crore howitzer deal with Sweden’s Bofors. The FIR mentioned kickbacks worth about $64 million to politicians, defence officials, and middlemen in the deal. While the FIR did not directly name Prime Minister Rajiv Gandhi, his image was so badly tarnished that he lost the 1989 elections. The Bofors scam left a lasting imprint on Indian politics and defence deals for years. Subsequent governments became wary of signing major arms contracts, slowing modernization of India’s armed forces.
1987 HDW Submarine Scam: In 1987, India signed a ₹200 crore contract with the German firm HDW (Howaldtswerke-Deutsche Werft) to supply two Shishumar-class submarines and technology transfer for two more to be built at Mazagon Dock, Mumbai. It was alleged that commissions worth ₹20 crore were paid to middlemen to secure the sensitive defence procurement contract. The CBI launched a probe and HDW was blacklisted by the Indian government. The case eroded public trust in the Rajiv Gandhi government and raised questions about defence procurement transparency.
Also Read: CBI and Corruption in Armed Forces # 1
2000–2025
2000 Tehelka case: A sting operation conducted by Tehelka journalists who created a fictitious London‑based arms company called West End International and posed as arms dealers in 2000–2001 exposed many politicians, middlemen, and Army officers. The tapes revealed a network of middlemen and politicians including Bangaru Laxman (then BJP President), Jaya Jaitly (Samata Party leader) and Maj Gen S.P. Shekhawat accepting bribes for manipulating defence deals. George Fernandes resigned as Defence Minister following the uproar.
2001 Kargil Coffin Scam: After the Kargil War, the Indian Army urgently needed coffins for soldiers killed in action. Accordingly, a contract was signed with a U.S. supplier (Buitron Inc., based in the U.S.) to import 500 aluminium caskets coffins. These coffins at $2,500 (₹12,000 approx.) each were reportedly found to be grossly overpriced nearly 13 times higher than the prevailing market rate. The Comptroller and Auditor General (CAG) pointed out the irregularities based on which the CBI registered a case against Army and Defence Ministry officials for profiteering at the cost of fallen soldiers. The CBI closed the case in 2014 citing lack of evidence, but the case continues to remind us of corruption in defence deals.
2003 Denel Rifles Scam: In 2003, India signed a contract worth about ₹21 crore with Denel (South Africa’s state‑owned arms manufacturer) for the supply of anti‑materiel rifles (AMRs) to strengthen the Army’s long‑range strike capability. However, there were allegations that Denel allegedly paid illegal commissions to middlemen to secure the ₹21 crore rifle deal. The CBI registered a case and started investigation which led to blacklisting of the company by the Indian government in 2005. The scandal highlighted the persistent problem of middlemen and commissions in defence deals and added to the series of defence procurement controversies that undermined trust in the system during the 2000s.
2009 Adarsh Housing Scam: The Adarsh Housing Society was originally conceived to provide affordable flats for Kargil War heroes, widows, and defence personnel in Mumbai’s Colaba. Over time, the project was hijacked by vested interests who illegally misused land belonging to the Defence Ministry, as well as building by-laws and allotted flats to politicians, bureaucrats, and senior Army officers bypassing eligibility norms. The case was referred to the CBI in 2011 which charged two former Army Chiefs and several other officials for illegally selling flats meant for Kargil war heroes in Mumbai.
2010 Tatra Truck Scam: The Tatra Truck Scam (2010) involved procurement of substandard heavy-duty trucks at inflated prices through a complex chain of intermediaries rather than direct purchase from the original manufacturer. Gen V.K. Singh, the then Army Chief alleged that he was offered a bribe of ₹14 crore. The scandal exposed deep irregularities in defence procurement and the role of middlemen despite official ban. The CBI registered a case in 2012 which revealed glaring irregularities and flaws in the procurement process by BEML officials, intermediaries, and suppliers. The investigation focused on whether trucks were deliberately routed through middlemen to inflate costs.
2012–2013 AgustaWestland VVIP Chopper Scam: In 2010, India signed a ₹3,600 crore contract with AgustaWestland (a subsidiary of Italian defence giant Finmeccanica) to procure 12 AW101 helicopters to replace ageing Mi‑8 helicopters used by the Indian Air Force for VVIP travel (President, Prime Minister, and other dignitaries). In 2012–2013, Italian investigators revealed that 10% of the contract value was allegedly routed via shell companies and offshore accounts to bribe Indian politicians, bureaucrats, and defence officials through middlemen to secure the deal. The CBI registered a case in 2013, naming former IAF Chief S.P. Tyagi, his cousins, and several middlemen. Tyagi was arrested in 2016, becoming the first service chief to face such charges. The Enforcement Directorate (ED) also investigated money‑laundering aspects. The Indian government cancelled the contract in 2014 and blacklisted AgustaWestland.
2013 INSAS Rifle Probe: In early 2000s Indian soldiers started observed that the INSAS (Indian Small Arms System) rifles introduced as standard‑issue assault rifle for the Army were repeatedly leading to operational failures like —rifles jamming, magazines cracking, and oil spraying into soldiers’ eyes during firing. In 2013, the CBI started investigating the reasons behind the rifles’ poor performance in combat zones like Kashmir and Kargil. The aim was to uncover irregularities and quality lapses and find out whether Ordnance Factory Board (OFB) officials and suppliers had compromised manufacturing and testing standards. The probe underscored the systemic weaknesses in indigenous arms production and accelerated the replacement of INSAS rifles with AK‑203 rifles from Russia.
2018 MES/BRO Graft: In 2018, CBI investigations revealed rampant bribery and contract manipulation in Military Engineering Services (MES) and the Border Roads Organisation (BRO) responsible for vital defence infrastructure. The scandal reinforced concerns that corruption was not limited to weapons procurement but extended to everyday logistics and infrastructure like housing, roads, bridges, and logistics facilities. At least 23 cases of corruption were identified, involving officials who accepted bribes from contractors to secure or inflate project deals. Kickbacks were linked to contracts for construction, supply, and maintenance works critical to defence operations.
2021 SSB Recruitment Racket: In 2021, a major racket was uncovered involving manipulation of recruitment results at Selection Board (SSB) centres where interviews and tests are conducted for entry of officers into the Indian Army. Seven Army officers and 23 others were charged with taking bribes to influence selections at over 30 SSB centres. The CBI registered a case and arrested many serving and retired Lt Col and Major‑rank officers.
2021 Ration Scam: In 2021, investigations revealed that expired and substandard food supplies were being distributed to soldiers. L̥t Gen S.K. Sahni, was accused of approving and facilitating contracts that supplied expired rations to Army personnel. The CBI investigated the case, uncovering irregularities in procurement and supply chains. In 2021, Lt Gen S.K. Sahni was convicted by a military court, making him one of the highest‑ranking officers punished for corruption in ration supplies.
2023 Submarine Retrofit Scam: In 2023, corruption allegations surfaced during retrofit of a Kilo‑class submarine, many of which require periodic retrofitting and upgrades to extend service life. A Navy Commander was arrested for accepting ₹2.4 crore in bribes during Kilo‑class submarine upgrades. The officer allegedly manipulated the procurement process and favoured certain vendors in exchange for kickbacks. The CBI registered a case, raided premises, and recovered incriminating evidence. The scam exposed vulnerabilities in high‑value naval contracts, where technical secrecy and urgency often reduce oversight.
2025 Nashik Pay Office Fraud: The Army Pay Office in Nashik handles allowances, pensions, and financial disbursements for personnel. In 2025, a major fraud was uncovered involving systematic bribery in processing soldiers’ pay and allowances. Fifteen Defence Ministry officers were convicted in 11 linked cases for demanding bribes from Army personnel to process routine financial entitlements such as allowances and arrears. The scam revealed exploitation of soldiers’ financial vulnerabilities by officials entrusted with their welfare. It turned out to be one of the largest collective convictions in a defence corruption case.
2025 Bikaner Supply Scam: The scam involved manipulation of Government e‑Marketplace (GeM) contracts designed to ensure transparency and competitive bidding in procurement of defence supplies in Bikaner. Army and Indian Defence Accounts Service (IDAS) officers were found to be colluding with vendors to rig supply contracts in return for bribes to favour certain suppliers and undermine fair competition. The CBI registered cases in 2025, charging serving Army and IDAS officials. The scandal exposed vulnerabilities in India’s e‑procurement reforms to eliminate middlemen and corruption.
2025 Sharma Bribery Case: Lt Col Deepak Kumar Sharma was arrested for accepting a ₹3 lakh bribe from a Dubai‑based defence firm. Raids recovered ₹2.23 crore in cash from his residence in Delhi. Sharma was arrested and charged under Prevention of Corruption Act. His wife Col Kajal Bali was also named co‑accused.
Conclusion:
While investigations and occasional convictions demonstrate that accountability is possible, systemic weaknesses persist in oversight, procurement transparency, and financial controls. Meaningful reform requires stronger e‑procurement safeguards, independent audits, and swift disciplinary action to deter abuse. Only sustained transparency and institutional change will restore public trust and protect the armed forces from future exploitation
