Chandigarh Smart City Scam: Ex-CFO Nalini Becomes Government Witness in ₹116.84 Crore Case

May 22, 2026

Nalini Malik, the former Chief Financial Officer (CFO) arrested in the ₹116.84 crore Chandigarh Smart City Limited scam, is now preparing to become a government witness. Nalini, who is lodged in Burail Jail, has expressed her desire to participate in the investigation by submitting an application to the CBI court through her warder.

In her petition, Nalini stated that if she is made a government witness, she could make several important revelations related to the Smart City scam. According to sources, she is also willing to provide information on the role of several senior officials involved in the Municipal Corporation and the Smart City project.

The CBI court has sought a response from the investigating agency on this petition. All eyes are now on whether the CBI will agree to make Nalini Malik a government witness.

Bail application filed on medical grounds

After an investigation revealed Nalini Malik’s role in the scam, which surfaced nearly two months ago, Chandigarh police arrested her on April 2. She has been in jail since then.

Meanwhile, Nalini has filed a bail application on medical grounds, which is scheduled to be heard on May 26. Several bank employees have also been arrested in the case.

Although the initial investigation revealed the names of several senior municipal officials, the Chandigarh police were unable to reach them. Now that the case has been transferred to the CBI, the problems of many officials may increase.

The case was handed over to the CBI on the orders of the Home Ministry.

Chandigarh Police had unearthed irregularities worth Rs 116.84 crore in Smart City Limited and about Rs 83 crore in Chandigarh Renewable Energy and Science and Technology Promotion Society (CREST).

The investigation revealed that significant funds belonging to Smart City and CREST were deposited in fixed deposits with IDFC First Bank. It is alleged that, through collusion between bank officials and government officials, this money was invested in real estate through shell companies. In return, the bank officials paid substantial bribes.

The Chandigarh Police had registered separate FIRs in both cases, but the cases were later transferred to the CBI on orders from the Home Ministry. The CBI is now investigating the entire matter.

Making fake FDs and circulating money

According to the investigation, the funds deposited in the bank account were to be transferred to the municipal corporation’s account after the Smart City project was completed. However, it is alleged that bank officials withdrew the funds and invested them in real estate through shell companies.

While crores of rupees were supposed to be transferred to the municipal corporation’s account, only 81.20 rupees were transferred. The remaining amount was allegedly divided among the accused.

The CBI investigation also revealed that Nalini Malik, along with other officials and bank employees, had colluded to create 11 fake FDs to avoid suspicion of any irregularities. The money was subsequently invested in various companies using these FDs.