Krystal Integrated Services Fined ₹55 Lakh for Substandard Meals in Maharashtra Hostels.
The Maharashtra government has imposed a ₹55 lakh fine on Krystal Integrated Services Ltd. for supplying substandard meals at state-run hostels for marginalised students. Social Justice Minister Sanjay Shirsat confirmed the action during the Winter Session after complaints and an official inspection. The penalty follows concerns raised in the Assembly over food quality, fund diversion, and contractor accountability across hundreds of government hostels.
Maharashtra government cracks down on a major contractor following student complaints.
Social Justice Minister Sanjay Shirsat confirmed this decisive action of imposing a hefty fine on Krystal Integrated Services Ltd in the state assembly. He cited the provision of poor-quality meals at state-run hostels for marginalised students. This move underscores the state’s commitment to student welfare and contract accountability. The Sprouts News Special Investigation Team (SIT) confirms the fine followed an official inspection.
The action responds to a starred question by Shetkari Kamgar Paksha MLA Babasaheb Deshmukh. He raised serious concerns about long-standing irregularities at these hostels. Deshmukh highlighted persistent complaints of negligence and mismanagement by the contractor. Student grievances about substandard food were a primary focus of the legislative query.
Legislative Spotlight on Hostel Welfare Failures
The controversy centres on catering contracts for 449 administrative hostels across Maharashtra. Krystal Integrated Services holds the contract for food, cleanliness, and security services. The MLA alleged that funds meant for nutrition are being severely compromised.
An allocation of ₹5,000-₹6,000 per student is reportedly reduced by the time it reaches the contractor. This leaves only ₹3,000-₹4,000 for the actual meal provision. The significant fund reduction directly impacts meal quality for thousands of dependent students. This financial discrepancy formed the core of the legislative inquiry.
Minister Shirsat provided a detailed breakdown of the mandated menu during his assembly reply. Breakfast includes items like poha, upma, or sheera, plus milk, boiled eggs, and fruit. Lunch and dinner are supposed to consist of chapati, rice, vegetables, dal, and accompaniments. Non-vegetarian meals like mutton or chicken are mandated once weekly.
Government Asserts Zero-Tolerance Stance
Minister Shirsat admitted that inspections revealed quality lapses in some hostels despite the prescribed menu. The subsequent probe led directly to the punitive fine against the service provider. He asserted the government’s resolve clearly during the session.
The minister stated the administration has “no quid pro quo” with Krystal or any contractor. He emphasised a strict, non-negotiable stance on student nutrition standards. The contract, awarded for three years, now operates under enhanced scrutiny measures.
New protocols make it mandatory for hostel wardens to sample meals daily. Assistant and deputy commissioners must conduct regular, unannounced hostel inspections. These steps aim to prevent future lapses in food quality and service delivery.
Broader Context of Corporate Accountability
Krystal Integrated Services is a prominent facility management company listed on the stock exchanges. Its director, Prasad Minesh Lad, is also a known BJP leader. The company provides services to various government and corporate clients. This fine places its governmental contract management under public and investor scrutiny.
The government’s action signals tighter oversight of public service contractors. It reflects a growing trend of holding corporate service providers accountable. Welfare schemes for vulnerable sections are receiving intensified administrative focus.
The firm’s response to the penalty and its plan for service rectification remain awaited. Future compliance will be closely monitored by the Social Justice Department. The case may influence how other states manage similar catering and service contracts.
This incident highlights the critical role of legislative oversight in upholding public welfare. Vigilant lawmakers and a responsive executive can enforce accountability. The Maharashtra government’s action sets a precedent for other states to follow. Student health and nutrition in government hostels must remain an uncompromised priority.
Sprouts News has reached out to Krystal Integrated Services Ltd. for their statement on the fine and the allegations. This report will be updated with their response.
Krystal Integrated Services Ltd. and its director, BJP leader Prasad Lad, have been involved in several controversies, primarily concerning legal, labour, and governance issues.
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Legal and Police Investigations Involving Prasad Lad
Prasad Lad has been the subject of multiple police investigations and court cases over the years.
• Mithi River Desilting Scam Probe: Lad was summoned to record his statement with the Mumbai Economic Offences Wing (EOW) in late 2025 regarding an investigation into the alleged Mithi River desilting scam. He indicated he would reveal “shocking information” about the accused.
• BMC Contract & Cheating Case: An EOW case was registered against Lad in 2015 related to a 2009 Brihanmumbai Municipal Corporation (BMC) contract. The case, filed by businessman Bimal Agarwal, alleged cheating and breach of trust in a joint venture. However, after investigation, the EOW filed a closure report stating the dispute was civil in nature and there was no material to proceed against Lad. During this probe, the Bombay High Court granted Lad interim protection from arrest in 2022.
• Forgery Case Involving Letterhead: In mid-2025, Lad filed a police complaint alleging that forged letters on his official letterhead were used to push for a ₹3.60 crore fund allocation. A BJP youth worker was named as a prime suspect in this forgery and impersonation case.
Operational and Financial Issues at Krystal
Krystal Integrated Services has faced significant challenges related to its financial governance and labour practices.
• Income Tax Tribunal Case: In August 2023, the Income Tax Appellate Tribunal dismissed the company’s appeals concerning the assessment years 2017-18 and 2018-19. The authorities disallowed deductions due to delayed remittance of employees’ ESI contributions, amounting to over ₹8.3 crore and ₹5.1 crore for the respective years. The tribunal upheld the disallowance based on a Supreme Court ruling.
• Mass Termination of Contract Staff: In October 2025, Krystal terminated around 80 contract cleaning and security staff at a government hospital in Namakkal. The company stated the staff were dismissed for breach of contract, including leaving work early and taking unauthorised leave. The terminated workers staged a protest against the decision.
