CBI court acquits bank officials, firm partners in fraud case

Mumbai: When the bank itself had settled the loan account and issued no due certificate, it cannot claim that it suffered wrongful loss for non-payment of credit facilities, the special Central Bureau of Investigation (CBI) court said while acquitting three Bank of Maharashtra officials and six partners of a firm in an alleged fraud case.

The CBI had booked bank officials Vilas Vinayak Karandikar, Bhalchandra Tukaram Gawade and Ramesh Yashwant Khade, and six partners of M/s Jiwani group namely Kishore Jiwani, his wife Kalawati, Nitin Jiwani, his wife Surekha and Jaswant Jiwani and his wife Vinita. However, Gawade and Khade died during the trial in 2022 and in 2020, respectively and the case against them was abated.

The CBI had alleged that the bank officials in connivance with the accused firm’s partners had caused wrongful loss to the bank to the tune of ₹14.65 crore. It was alleged that the bank had granted several credit facilities for import and export of timber between 1998 and 2002. However, their account was declared NPA (non-performing assets). Later, in July 2004 on the complaint of the bank, a case was registered by the CBI.

During the trial, the CBI examined 61 witnesses and relied upon 265 documents to prove the case. However, the court noted that there was no sufficient evidence brought on record against the accused proving that they impersonated the bank officials as stated by the prosecution.

Besides this, the court also observed, “The present case at hand, is based on allegations against the accused that are specifically based on the procedural lapses that means irregularities in the accounts of accused persons. However, none of the prosecution witnesses could establish as to what irregularities or illegality in the performance of the account.”

The court also noted that the CBI referred to various documents to prove the case, but they all appeared to be photocopies and no original documents were submitted before the court. Hence, those documents could not be relied on.

The court said the bank itself had initiated recovery proceedings against the accused firm whereby they had settled the loan account in 2013 for ₹6.36 crore. After receipt of payment ‘no due certificate’ was also given by the bank to Jiwani group.

“When there are no dues and the bank itself settled the proceeding before the DRT by accepting consent terms, in such circumstances, the question of wrongful loss to bank and corresponding wrongful gain to the accused does not exist,” the court held.

Moreover, the court criticised the bank for naming the three officials in the case, whereas as per their own internal report various other officials were also found involved. “In the same report when involvement of the many officers was shown then how some of the bank officers got clean chit and some of the officers like respondent number 1 to 3 (the accused bank officials) held responsible for the said irregularities having regard that there is no satisfactory explanation on the part of the prosecution. The said analogy adopted by the bank remains a mystery on the part of the bank,” the court observed.