Maharashtra: FIR against ex-member of bank panel quashed

The Nagpur bench of the Bombay high court (HC) recently quashed and set aside the first information report (FIR) registered against a former managing committee member of a cooperative bank in Nagpur after it was informed that the loss that the member had caused to the bank by disbursing loans without security, had occurred before the Maharashtra Protection of Investors Deposit (MPID) Act, 1999 came into force. The court also took cognisance of the fact that the loans amounting to nearly ₹145 crores disbursed with his approval, had been recovered.

On February 10, a division bench of justice Z Haq and justice Amit Borkar, while hearing the petition filed by Rajiv Mishra, was informed by advocate Shyam Dewani that his client was a managing committee member of Samata Sahakari Cooperative Bank from 1997 to December 2000. In that period he had attended several managing committee meetings wherein it was alleged that he had approved disbursal of loans without security, which had resulted in a loss to the bank.

The complaint against Mishra and other managing committee members was lodged after depositors complained that the bank had allegedly defaulted in returning their deposits on maturity without benefits. The complaint was lodged in November 2007 on the allegations that the depositors’ money had been misappropriated by the members between 1997 and 2006 to the tune of ₹145 crore.

While arguing, Dewani submitted that Mishra had attended meetings between July 1997 and January 1999 and had resigned in December 2000. However, since the complaint was lodged, the properties of Mishra had been attached under relevant provisions of the Maharashtra Cooperative Societies Act. Dewani further submitted that as per the charge sheet all the loans mentioned therein had been disbursed before the MPID Act came into force. In light of these submissions, Dewani sought quashing of the FIR and charge sheet against Mishra.

Additional public prosecutor TA Mirza, however, opposed the petition stating that the ingredients of FIR and charge sheet against Mishra were fulfilled as he had connived with other managing committee members to cause huge losses to the bank and hence the court should not interfere.

After hearing the submissions, the court observed, “The date of offences alleged against the petitioner are before coming into force of the Act of 1999 i.e. 29th April 1999. Since the alleged offences are committed before coming into force of the Act of 1999, the petitioner cannot be charged for the offences under sections 3 and 4 of the Act of 1999.”

While quashing the FIR and charge sheet against Mishra the court held, “In the facts of the present case also, there is nothing to show that Samata Sahakari Cooperative Bank i.e. the Financial Establishment committed “Fraudulent Default” in repayment of any deposit on maturity along with any benefit till March 31, 2000.” The court also noted that as the concerned officer had stated that there was no offence under the relevant sections of the Indian Penal Code against Mishra, the petition was allowed.