Nagpur Firms Lose Rs 5 Crore In Infrastructure Contract Scam
Two construction and infrastructure firms operating in Nagpur have been embroiled in a Rs 5 crore fraud case linked to bogus road development contracts, underscoring persistent governance and market-integrity challenges for contractors and the urban build-out economy. Local police at the Sitabuldi station registered a first information report (FIR) after senior officials of the affected companies alleged they were misled into making substantial advance payments by individuals claiming to represent a purported Delhi-based infrastructure firm.
The complaint lodged by an authorised representative of one of the firms, alongside a parallel complaint from Sarla Project Works Pvt Ltd, describes how three men from Uttar Pradesh impersonated directors of an ostensibly credible construction company and promised access to high-value road works in Maharashtra with an estimated contract value of ₹1,000 crore. Between late 2024 and early 2025, each firm was induced to pay ₹2.5 crore as advance consideration for project awards that were never formalised or delivered. Despite repeated demands, the funds have not been returned.The FIR was filed under multiple sections of the Bharatiya Nyaya Sanhita (BNS) pertaining to cheating and fraud, and the Economic Offences Wing of the Nagpur police is now leading the probe. Investigators are working to trace the financial trail, assess documentation used to support the scheme, and determine whether additional victims are involved.
For urban developers and mid-tier contracting firms, the case lays bare the vulnerabilities smaller players face in a rapidly expanding construction ecosystem. Maharashtra’s urban infrastructure pipeline has been buoyed by initiatives such as city road widening, arterial expansion and rural connectivity programmes, attracting both large and small promoters. Yet, weak due-diligence mechanisms and over-reliance on informal assurances can expose companies to sophisticated financial misrepresentation, undermining confidence and liquidity in the sector.Legal analysts emphasise that fraudulent inducements based on promised government or quasi-government contracts can distort competitive dynamics, particularly when the perpetrators exploit the reputational cachet of state-level infrastructure opportunities. Such schemes can siphon working capital away from legitimate project execution, affecting employment and supply chain stability in the region. This dynamic also raises red flags for lenders and insurers that underwrite performance bonds or working capital lines for contractors.
Urban planners and civic officials highlight that infrastructure expansion — whether for mobility, water networks or sanitation — needs not only robust financing but also transparent, enforceable procurement processes. While Maharashtra has advanced e-tendering and contractor prequalification systems in many jurisdictions, gaps persist in monitoring unsolicited pre-contract negotiations and private sector outreach, especially in high-growth nodes such as Nagpur. Strengthening these oversight mechanisms could reduce exposure to similar schemes.Social and business networks within Nagpur’s construction community indicate that cases of financial fraud erode trust and discourage smaller firms from participating in infrastructure bidding. For an industry already navigating supply chain pressures and rising input costs, protecting capital against fraudulent inducements is essential to sustain equitable growth. Observers say that rapid urban expansion policies should be matched with heightened governance protocols to safeguard investments and uphold market integrity.
As the Economic Offences Wing advances its investigation, authorities will need to clarify whether the perpetrators operated through an organised network and if additional advance payments were solicited from other firms. The outcome could shape future regulatory and policing responses to fraud risks tied to public and private infrastructure contracting in India’s emerging urban corridors.
