Corruption Is A Disease; Bombay HC Directs Registration Of FIR Against Ajit Pawar And Other Politicians In Co-operative Bank Scam [Read Judgment]

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. Case Background 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. Judgement 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...

Corruption Is A Disease; Bombay HC Directs Registration Of FIR Against Ajit Pawar And Other Politicians In Co-operative Bank Scam [Read Judgment]

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Corruption Is A Disease; Bombay HC Directs Registration Of FIR Against Ajit Pawar And Other Politicians In Co-operative Bank Scam [Read Judgment]

nitish kashyap

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