CBI Uncovers ₹6.50 Crore Compensation Scam in IOCL LPG Pipeline Project

The Central Bureau of Investigation (CBI) has opened a major anti-corruption probe into an alleged ₹6.50 crore compensation scam linked to a strategic LPG pipeline project of Indian Oil Corporation Limited (IOCL) in Uttar Pradesh. According to the complaint, compensation meant for genuine landowners along the pipeline route was diverted to fake or ineligible beneficiaries through manipulated records and fraudulent bank accounts across 11 districts.

The case stems from a detailed complaint filed by IOCL’s Chief Vigilance Officer, Anant Singh, IPS, who flagged large-scale irregularities in the handling of land compensation for the pipeline — a project estimated at ₹1,000 crore and executed by IHB Limited, a joint venture of IOCL, BPCL and HPCL. Stretching nearly 2,800 km across Uttar Pradesh and Madhya Pradesh, the project is a critical piece of energy infrastructure designed to carry LPG across northern India.

How the Compensation Mechanism Was Allegedly Hijacked

For Central Government pipeline projects, land acquisition and compensation processes are overseen by a Competent Authority (CA). This authority is tasked with conducting surveys, verifying land ownership, assessing damage to crops and structures, and ensuring that compensation reaches the legitimate landowners whose land or livelihoods are affected.

The complaint to the CBI alleges that this system was systematically subverted. Officials responsible for preparing and verifying compensation lists allegedly colluded with private individuals to:

• Insert names of non-entitled or fictitious beneficiaries
• Replace genuine landowners’ bank account details with fake accounts
• Block or delay payments due to real farmers and landholders

As a result, funds meant for those whose land was acquired for the pipeline were allegedly siphoned off into accounts controlled by the accused and their associates.

The largest irregularities have been identified in Prayagraj and Bhadohi, with further discrepancies detected in Unnao, Kanpur Nagar, Kanpur Dehat, Lalitpur, Raebareli, Mau, Varanasi, Pratapgarh and Azamgarh.

CBI Raids in Lucknow, Noida and Prayagraj

Acting on the complaint, a team from the CBI’s Anti-Corruption Branch, Lucknow, conducted a coordinated series of searches early Tuesday morning. Five locations were raided across three key cities, targeting residential and office premises of accused officials and alleged accomplices.

Searches were conducted at:

• Vibhuti Khand, Omaxe Heights (Lucknow) – linked to Gaurav Singh
• Sector 100, Lotus Espacia (Noida) – linked to Faisal Hasan
• Dhoomanganj, Prayagraj – linked to Sunil Kumar Ahirwar
• Additional locations tied to other suspects and intermediaries

During the raids, officials seized crucial documents, bank records, digital storage devices and files believed to be connected with the opening of suspicious bank accounts and approval of fraudulent compensation claims.

Senior IOCL and Revenue Officials Named in FIR

The preliminary inquiry has pointed to alleged collusion between project executives and revenue staff. Those named in the FIR include:

• Faisal Hasan, former General Manager (Projects), IOCL – currently serving as GM (Material) at the Ministry of Petroleum & Natural Gas
• Gaurav Singh, Senior Manager (Projects), IOCL
• Sunil Kumar Ahirwar, Manager (Projects)
• Vineet Kumar Singh, Engineer
• Surya Pratap Singh, Project Officer
• Abhishek Pandey, Revenue Assistant, Prayagraj
• Vishal Dwivedi and Ashish Kumar Singh, Revenue Assistants, Bareilly
• Other yet-unidentified individuals who may have participated in the scheme

Investigators allege that these officials played key roles in opening fake bank accounts, diverting compensation into them and obstructing payments to legitimate farmers and landowners.

District-Wise Scale: Prayagraj and Bhadohi Worst Hit

According to the complaint, the financial size of the alleged scam is unevenly distributed across districts:

• Prayagraj – about ₹4.77 crore diverted
• Bhadohi – about ₹1.35 crore diverted
• Remaining nine districts – including Mau, Varanasi, Pratapgarh, Azamgarh, Unnao, Kanpur Nagar, Kanpur Dehat, Lalitpur and Raebareli – together account for approximately ₹39.34 lakh in irregular transfers

In total, the complaint estimates that around ₹6.50 crore of compensation was transferred to ineligible or fictitious beneficiaries, rather than the lawful recipients.

For affected landowners, this means not only financial loss but also delays in receiving due compensation for land acquired for a national infrastructure project.

CBI Likely to Widen Scope of Probe

CBI officials have indicated that the investigation is still at an early stage. The current FIR is likely to be followed by deeper scrutiny of how compensation lists were prepared, vetted and approved across multiple districts and project offices.

The probe is expected to focus on:

• Roles of revenue officials in certifying beneficiary lists
• Actions of project managers and engineers overseeing land acquisition
• Conduct of data-entry operators and back-office staff who handled bank details and account updates
• Possible complicity of bank officials in opening or operating suspicious accounts used to receive diverted funds

The money trail is being tracked to identify the final recipients of the diverted compensation and to determine whether the funds were further layered or withdrawn in cash. More officers and private individuals may be summoned for questioning in the coming weeks.

Implications for Land Acquisition and Public Trust

The alleged scam strikes at the heart of land acquisition credibility in large infrastructure projects. Pipeline and road projects often face local resistance, and transparent, timely compensation is crucial for maintaining trust with communities.

If proved, the diversion of funds away from genuine landowners not only harms individual farmers but also undermines confidence in public-sector companies and the mechanisms meant to protect citizen rights in compulsory acquisition processes.

The case could prompt a relook at how compensation is disbursed — including whether stronger digital checks, cross-verification with land records and multi-layer approval workflows are needed, particularly in high-value, multi-district projects.

Shunyatax Global Editorial Note

At Shunyatax Global, we closely track cases that sit at the intersection of infrastructure, governance and public accountability. The IOCL pipeline compensation case in Uttar Pradesh is not just about one project — it highlights systemic vulnerabilities in land acquisition and benefit transfer systems.

For more analysis on anti-corruption investigations, public-sector governance and the financial architecture behind India’s infrastructure build-out, visit Shunyatax Global Services.