The Bombay High Court on Thursday directed the Economic Offences Wing to register a FIR against former Deputy Chief Minister of Maharashtra Ajit Pawar and other state politicians for their alleged involvement in the State Co-operative bank scam within 5 days.
Division bench of Justice SC Dharmadhikari and Justice SK Shinde were hearing a PIL filed by one Surinder Mohan Arora alleging rampant corruption in the Co-operative bank sector, wherein public exchequers' money was looted by committing various irregularities and fraud by the bank.
Petitioner sought directions against all Directors and top executives of the Maharashtra State Co-operative Bank. Also, action erring office bearers of the DCCB, Pen Urban Co-op Bank who had taken large amount of loans fraudulently for offences committed by them of cheating, fraud, forgery, criminal breach of trust by bankers who are public servants, and under the relevant provisions of SARFAESI Act and Prevention of Corruption Act.
Statement of the petitioner was recorded on January 29, 2018, and on July 31, 2019, Shrikant Paropkari, Deputy Commissioner of Police (Economic Offences Wing) was present in the Court as directed. Public Prosecutor raja Thakare, on instructions from Paropkari stated that, scrutiny of the statement of the petitioner and his complaint dated January 29, 2018 does not provide reasons to suspect commission of any cognizable offence and therefore the FIR has not been lodged.
The bench noted-
"The State in this case has neither produced station diary, nor filed a counter-reply, for satisfying our judicial conscience that a preliminary enquiry was held before reaching a conclusion that the complaint of the petitioner and report of NABARD has not disclosed commission of cognizable offence. Thus, apart from the oral assertion of Shri. Paropkari, there is nothing on record to justify the conclusion."
Further, Court referred to the judgement of Lalita Kumari V/s. Government of Uttar Pradesh and Others and said-
"It may be stated that the result of an enquiry and the opinion formed by the Police Officer is not evidence in the eyes of law, as it is settled law that the findings of the trial Judge cannot be based solely on the result of investigation. This is for the simple reason that such an opinion or result of an investigation is not the evidence in terms of Section 3 of the Evidence Act."
Petition relied upon the report of inspection conducted by National Board for Agricultural and Rural Development (NABARD), the enquiry conducted under the Maharashtra Cooperative Societies Act, 1960. Based on this report, two separate complaints were filed before EOW, Mumbai. Following irregularities were found in the said report-
(i) Sanctioned credit limits to those units having negative net worth/NDR and short margins without ensuring irrevocable unconditional default guarantee from State Govt.
(ii) Sanctioned loans/credit limits without obtaining credit authorisation from NABARD for financing of Infrastructure Projects and CC limits to Cotton Marketing Federations and St Loans to MSEDCL in violation of extant CMA (Credit Monitoring Arrangements) guidelines.
(iii) Sold properties of borrowing units acquired under SARFAESI Act, 2002 below the reserve price.
(iv) Distributed incentive to co-operative societies/bank towards Centenary year celebration despite the fact that the bank had not declared dividend for the past several years.
(v) Sanctioned loan/additional loans contrary to Department's recommendations in violation of CMA guidelines.
(vi) Waived/allowed interest rebate without provision in bye laws/ MCS Act/ Rules.
(vii) Extended due date of repayments to conceal NPAs.
Involvement of Ajit Pawar and Others
Ajit Pawar, former Deputy Chief Minister of Maharashtra was one of the Directors in Maharashtra Co-Operative Bank at the time of the alleged irregularities. Various instances were cited in the report regarding loans sanctioned for relatives of various top executives of the said bank, many of whom were politicians from NCP, Congress Party, Shiv Sena and BJP. In many instances, these loans were written off as NPAs. The accused allegedly caused losses of over Rs 1,000 cr to the said bank between 2007 and 2011.
One of the examples of such irregularity being-
An amount of Rs. 1.94 cr was illegally sanctioned in favour of Aditya Fresh Food Natural Pvt. Ltd., whose director Prabhavati Patil was the wife of Manik Patil- Chairman of the Bank, under the scheme Micro/Small Scale Aatmanirbhar Yojana, despite the fact that the Unit was not eligible to avail loans under the said scheme. Ajit Pawar and many other accused were members of the Board of Directors at the time.
Finally, after perusing all the material on record, Court concluded -
"The Loan Committee disposed away the amount held by it in trust of the Bank so as to avail wrongful gains to the borrowers who were either directors of the Board or were political bigwigs and thereby caused wrongful loss to the Bank, details of the which are found in the reports enclosed herewith.
The Inspection Report therefore not only points out the discrepancies or irregularities committed by the respondent Bank and its Directors but also point out that the trust reposed in the Bank and its officers has been brazenly breached. The report, prima-facie discloses that the bank records were forged and the profits were wrongly shown by abusing the Income Recognition and Asset Clarification (IRAC) Norms. The report, further discloses that the NPA Accounts were intentionally camouflaged, in as much as, the amount sanctioned and disbursed to the units wherein the Directors were having interest were not shown in the periodical reports of the Bank with a view to safeguard the interest of the Directors."
The bench referred to the judgement of Supreme Court in State of Madhya Pradesh V/s. Shri. Ram Singh. In the said judgement, apex court emphasized that-"Corruption is a disease. Though it has pervaded our public and social life, yet, by strong legislative measures it can be controlled. The need of the hour is to enforce such measures strictly by bringing to book the mighty, rich, influential and powerful. As the norm is "Be you ever so high the law is above you"."
Court recorded that the report prima-facie, discloses the commission of cognizable offences punishable under the Indian Penal Code and other penal laws –
"Therefore, we direct the Economic Offences Wing, Mumbai to register the First Information Report within five (5) days from today. Thereafter, all steps in accordance with law be taken uninfluenced by the oral assertions of Shri. Paropkari."
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