Karnataka High Court Mulls Roping In CBI To Probe Digital Arrest Case Where Bank Allegedly Cleared ₹50 Lakh Loan In Two Hours

While hearing a case wherein an ICICI Bank customer was allegedly sanctioned a Rs. 50 Lakh loan while she was under digital arrest for 10 hours, the Karnataka High Court on Friday (February 20) orally remarked that it will ask the CBI to investigate as the case involved misuse of public money. Justice M Nagaprasanna was hearing a woman's plea challenging an FIR registered for offence punishable under Section 25(Dishonour of electronic funds transfer for insufficiency, etc., of funds in the account) of the Payment and Settlement Systems Act, 2007. The court had in an interim order earlier stayed the proceedings and had also directed the bank not to take any coercive steps against the petitioner. The provision states that where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground of insufficient balance to honour the transfer or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence punishable with jail terms extendable to two years, or with fine which may extend to twice the amount of the electronic funds transfer, or both. During the hearing today, the counsel for ICICI bank submitted, "We followed RBI guideline. As per RBI guideline they applied for loan, we verified it...She herself called customer care to add beneficiary. According to her request we added beneficiary. Then she requested to transfer the money". At this stage the court orally said:"If Bank officials who deal with public money so casually, I will direct criminal case to be registered against all of them. In two hours you clear the loan? How much loan you cleared? 50 Lakhs? Whatever it is...in two Hours how will you sanction 50 Lakhs?...This is why frauds have become more. How does the bank official clear the loan of Rs 50 Lakh? He is dealing with public money. How does bank official clear Rs. 50 Lakh loan in 2 hours? In 10 hours, seek first instalment to be paid. Not paid...proceedings initiated? This cyber fraud taking place. Bank Officials without them, prima facie, conniving with these cannot...you created beneficiary without looking into any document. In minutes you do it? So that 50 lakhs goes into somebody's account. Tell me where loans are granted in 2 hours. In 2 hours you scrutinize all documents? Im directing investigation to be handed to CBI...Public money you straightaway sanction in two hours".For context, the petitioner had claimed that while she was subjected to digital arrest for 10 hours, the Bank had sanctioned a loan of Rs.50,00,000 without any documentation saying it is a pre-approved loan. On the ground that the petitioner has not paid Rs.50,00,000 loan that was deposited into her account without any documentation, proceedings were initiated against her.Meanwhile the bank's counsel said that money does not go directly to the beneficiary. To which the court thereafter orally said, "Im telling you, whatever you want to place you place, but these players I will not spare. You are dealing with public money...This can't be countenanced at all...In these cases of bank loans being transferred cannot happen without bank officials conniving...We will ask CBI to intervene in this. This is high time CBI intervenes and take stalk of situation. All of you are dealing with public money". The counsel for the Bank submitted that he shall file detailed objections and also demonstrate the process. With respect to petitioner's request to travel and the argument that her passport had been impounded the court orally said, "We will permit you to travel...The issue is now between State, Bank and Union of India. We will rope in CBI into this...Without connivance of the bank officials...this requires investigation. Not from the State. Because it has country wide ramifications. We will definitely direct the CBI to come in...Public money will vanish and tomorrow chaos". The court thereafter in its order dictated, "Counsel for the bank seeks time to file objections, place all material on record with regard to issue in the lis and role of the bank officials as to how they have within minutes or hours transferred Rs 50 Lakh of public money into an account indicated at the time when the petitioner was claims to be under digital arrest". The petitioner's counsel submitted that the passport of the petitioner is kept with the passport authority. The counsel for UOI said that it was surrendered and is awaiting police clearance certificate. The counsel for the State submitted that the clearance certificate would be issued in accordance with law notwithstanding pendency of the petition. "In the event police clearance certificate is with passport authorities, the authorities shall return the passport to petitioner. Petitioner shall file affidavit of undertaking with regard to travel itinerary and her return," the court said. The matter is listed on March 6. Case title: MRS SRIVIDYA BHASKAR v/s ...

Karnataka High Court Mulls Roping In CBI To Probe Digital Arrest Case Where Bank Allegedly Cleared ₹50 Lakh Loan In Two Hours

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