S. Muruganandham vs Indian Bank on 13 October, 2021

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Central Information Commission

S. Muruganandham vs Indian Bank on 13 October, 2021

1. The issues under consideration arising out of the second appeal dated Nil include non-receipt of the following information raised by the appellant through his RTI application dated 29.11.2018 and first appeal dated 02.02..2019:-

A1 . Does the 10 tranches of loans sanctioned by Indian Bank, M G Road Branch to M/s Chicko Foods Pvt. Ltd. as detailed above meet the loan sanctioning guidelines/policy of Indian Bank with respect to i. Debt/equity ratio ii. Current ratio iii. Repayment capacity Page 1 of 9 iv. Credit worthiness v. Credit appraisal parameters/criteria vi. Technical feasibility vii. Financial viability viii. Records from the registrar of companies ix. Frequency of loan sanctions of tranches of loans (whether very short gaps of 31 days, 48 days, 27 days, 36 days and 116 days meets Indian Bank lending rules/ policy) x. Eligibility and verified need of the borrower xi. Legal requirements for company lending such as company board resolution, seal and power of attorney supported by another board resolution etc. xii. Other mandatory requirements of Indian Bank to protect its interests. A2. Please provide the name and address of the Chartered Accountants who did the statutory audit of Indian Bank, 288 M G Road Branch, Pondicherry during the financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93 and 1993-94.

A3. What were the comments made by the statutory auditors on Internal Control System in the Indian Bank, 288 M G Road Branch, Pondicherry in their audit reports for financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991- 92, 1992-93 and 1993-94.

A4. Did any of the statutory auditor check/audit/verify the advances and loan granted to M/s Chicko Foods Pvt Ltd during any of the financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93 and 1993-94? If so, what were their comments?

A5 . Please provide the name and address of the Chartered Accountants or other professionals who did the concurrent audit of Indian Bank, 288 M G Road Branch, Page 2 of 9 Pondicherry during the financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93 and 1993-94.

A6. What were the comments made by the concurrent auditors on Internal Control System in the Indian Bank, 288 M G Road Branch, Pondicherry in their audit reports for financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991- 92, 1992-93 and 1993-94.

A7. Did any of the concurrent auditors check/audit/verify the advances and loan granted to M/s Chicko Foods Pvt Ltd during any of the financial years 1986-87, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93 and 1993-94? If so, what were their comments?

A8. Was legal audit done for the advances made to M/s Chicko Foods Pvt Ltd.? If so, please state the dates when they were done.

A9. Were any deficiencies found in the legal audits? If so, please state the deficiencies. A10. Were any rectifications of deficiencies done after the legal audit? If so, Please give details of rectifications carried out.

A11. What action was taken to safeguard bank's interests after the legal audit? A12. Were the loan documents and mortgage title deeds and power of attorney subjected to verifications as to their genuineness? A13. Did the bank seek reports from the local revenue authorities regarding the mortgaged title deeds? If done, please furnish copies of the same. A14. Has any concurrent auditor checked the mortgage documents and title deeds relating to Indian Bank's advances to Chicko Foods Pvt. Ltd. at any time? If so, what were their comments?

A15. Were the 10 tranches of loans sanctioned to M/s Chicko Foods Pvt. Ltd considered or discussed in the Indian Bank Audit Committee meeting or any other committee's meeting which monitors fraudulent loans/fraud within Indian Bank at Page 3 of 9 any time? If so considered, what were the decisions of the committee and what actions were taken by Indian Bank pursuant to that decision? A16. Was forensic audit of the Indian Bank's advances to M/s Chicko Foods Pvt. Ltd.

done? If so, please furnish a copy of the report.

A17. Were the Indian Bank's advances to M/s Chicko Foods Pvt. Ltd., Pondicherry been subjected to any vigilance audit at any time? If so, please furnish the dates, the outcome of the vigilance audit and a copy of the report. A18. What internal control system/procedure does Indian Bank have to check and prevent fraudulent loans given out by its branches? A19. Did Indian Bank have an internal audit or supervision department to second check/verify all the loans approved/sanctioned and disbursed by the Indian Bank branches during the period 1986 to 1994?

A19. What is the name of the internal auditors/supervisors/senior officials of the Indian Bank who checked the sanction and disbursement of the 10 tranches of loans sanctioned and disbursed by Indian Bank, M G Road branch to M/s Chicko Foods Pvt. Ltd.?

A20. Will these 10 tranches of lonas sanctioned by Indian Bank, M G Road Branch to M/s Chicko Foods Pvt Ltd be approved by Indian Bank's internal auditor/ supervision department/concurrent auditors/ statutory auditors/ vigilance department/ legal auditors/ forensic auditors, if checked/ audited today? A21. When and for what financial year did M/s Chicko Foods Pvt Ltd. submit the last audited profit and loss account and balance to the Indian Bank, M G Road Branch, Pondicherry? Please furnish a copy of the same.

2. Succinctly facts of the case are that the appellant filed an application dated 29.11.2018 under the Right to Information Act, 2005 (RTI Act) before the Central Public Information Officer (CPIO), Indian Bank, Rajaji Salai, Chennai, seeking aforesaid information. The CPIO vide letter dated 31.12.2018 replied to the appellant. Dissatisfied Page 4 of 9 with the CPIO's reply, the appellant filed first appeal dated 02.02.2019. The First Appellate Authority vide order dated 12.02.2019 disposed of the first appeal. Aggrieved by that, the appellant filed a second appeal dated Nil before this Commission which is under consideration.

3. The appellant has filed the instant appeal dated Nil inter alia on the grounds that the CPIO has failed to provide the information within 30 days and has grossly violated Section 7(1) of the RTI Act, 2005. The appellant requested the Commission to direct the CPIO to provide the complete information and take necessary action as per Section 20 (1) of the RTI Act.

4. The CPIO vide letter dated 31.12.2018 gave point-wise reply to each and every points of the RTI application wherein he stated that information sought on point nos. A1 to A21 (Except query Nos. A18, A19 and A21) was not available with the concerned Branch. Further, the reply given by the CPIO against point Nos. A18, A19 and A21 were reproduced as under:-

       Your Query                          Our Reply

A18    What        internal     control    Inspection of branches of the Bank is being
       system/procedure does Indian        conducted by Inspectors from respective
       Bank have to check and prevent      Inspection Centres of the branch. Periodically

fraudulent loans given out by its of inspection will be from 12 months to 18 branches? months based on the risk rating of the branch.

A19 Did Indian Bank have an internal Inspection of branches was conducted by audit or supervision department designed Inspector of branches during the to second check/verify all the period 1986 to 1994.

loans approved/sanctioned and disbursed by the Indian Bank branches during the period 1986 to 1994?

A19 What is the name of the internal No information available with the branch.

       auditors/supervisors/senior
       officials of the Indian Bank who
       checked the sanction and
       disbursement of the 10 tranches
       of    loans     sanctioned   and
       disbursed by Indian Bank, M G
                                                                                Page 5 of 9
         Road branch to M/s Chicko
        Foods Pvt. Ltd.?


A21     When and for what financial       No information available with the branch with
        year did M/s Chicko Foods Pvt     regard to last audited Profit and Loss and
        Ltd. submit the last audited      Balance sheet submitted by M/s Chicko Foods
        profit and loss account and       Pvt. Ltd. to our M G Road Branch.
        balance to the Indian Bank, M
        G Road Branch, Pondicherry?
        Please furnish a copy of the
        same.

The FAA vide his order dated 12.02.2019 agreed with the views taken by the CPIO.

5. The appellant and on behalf of the respondent Shri Sandeep Kumar Ghosal, Deputy General Manager, Indian Bank, Chennai, attended the hearing through video conference.

5.1. The appellant inter alia submitted that M/s. Chicko Foods Private Limited (hereinafter called "the company") was a company registered with the Registrar of Companies, Pondicherry on 05.12.1984. He further submitted that the company had filed last Annual Returns and Audited Accounts for the year 1986-87 on 2nd May 1988 and that the said company had not filed any Annual Returns or Audited Accounts thereafter for 30 years from 1987-88 till date and that the company had also not been wound up. The appellant is an unpaid creditor of the borrowing company. He never had any shares or any other interest in this company. However, recovery notices were sent to the appellant. The appellant stated that the alleged borrower in this case was a defunct company which according to the public record available with the Registrar of Companies and the borrowing company has not filed any annual accounts or annual returns during the entire loan period. He questioned as to how the respondent bank granted loans to dormant said companies. He further submitted that being aggrieved with the actions of the respondent bank he sought aforesaid information. However, the CPIO had denied the request for copies of critical loan documents/information (such as statement of accounts, loan applications, loan sanction tickets, borrowing company's board resolution for Page 6 of 9 borrowing etc) which he needed to defend himself as alleged guarantor in the case filed by respondent bank in the DRT. He argued that documents/information requested was not filed in the DRT by the respondent bank. Accordingly, he requested the Commission to look into the case and direct the respondent to provide complete information.

5.2. The respondent while defending their case inter alia submitted that the company availed various credit facilities from Indian Bank vide its Pondicherry Main branch of the respondent bank since 1986. The appellant stood as a guarantor to the facilities enjoyed by the Company. The Appellant was also a director of the Company. Subsequently, the Company and the Appellant committed default in repayment of loan to the Bank and the accounts of the Company were classified as Non Performing Asset (NPA) on 31.03.1993. The Bank thereon instituted O.S. No.37 of 1994 against the said Company and the appellant for recovery of monies. This was on the file of Sub-court, Tiruvallur as on 21.06.1993. Later, the suit was transferred to the DRT, Chennai, renumbered as T.A. No.966 of 1997. Later this was again transferred to DRT - Ill, Chennai and renumbered as T.A. No.03 of 2015. In the meanwhile the NPA account of the Company was transferred to the bad loan recovery specialized branch viz. Stressed Asset Management, Chennai for recovery follow up. Respondent submitted that they had filed all original documents in the recovery suit before Hon'ble DRT- III, Chennai in 2015 and these were marked as exhibits. All necessary documents evidencing the loan requirements towards the loan sanctioned and availed by the Company were marked as exhibits in the said trial. They stated that the appellant could also obtain the copies of the relevant records from the DRT-III as he was party to the case. In respect of the information sought by the appellant in this case, the respondent informed that point-wise reply was given as per the records available with them. Moreover, they informed that the appellant was allowed to inspect the relevant records/documents on 10.04.2019 and 19.07.2019. However, the appellant failed to turn up for the inspection for the reasons best know to him. It was also submitted that information/documents sought was more than 30 years old and complete records was not traceable at this stage. They argued that the issue raised by the appellant in this case had already been discussed before the DRT- III and the same was rejected.

Page 7 of 9

6. The Commission after adverting to the facts and circumstances of the case, hearing both the parties and perusal of records, observed that the respondent had provided incomplete point-wise reply/information to the appellant vide their letter dated 31.12.2018. The appellant's hunch was that in connivance with the company, bank officials, committed improprieties and extended loan in contravention with extant rules, guidelines and norms consequently entangling the appellant for no fault attributable to him. The respondent further stated that information sought against point nos. A1 to A21 (Except query Nos. A18, A19 and A21) was not available with the concerned Branch. However, most of the information sought by the appellant was in the form of query/question and seeking explanation which may not fall within the definition of "information" as defined under section 2 (f) of the RTI Act. Further, in the interest of justice, the respondent is directed to search the records once again and provide revised point-wise information/reply to the appellant. In case, the respondents are unable to trace certain relevant documents/records they may file an affidavit with the Commission deposing that no records relating to the specific document sought for in the RTI application are available with them. A copy of the affidavit shall also be provided to the appellant. The above directions of the Commission shall be complied with, within a period of four weeks from the date of receipt of a copy of this order. With the above directions, the appeal is disposed of.

Copy of the decision be provided free of cost to the parties.

Sd/-

                                                                            सुरेश चं ा)
                                                         (Suresh Chandra) (सु        ा
                                                                         सूचना आयु )
                                              Information Commissioner (सू
                                                               दनांक/Date: 12.10.2021
Authenticated true copy

R. Sitarama Murthy (आर. सीताराम मूत )
Dy. Registrar (उप पंजीयक)
011-26181927(०११-२६१८१९२७)




                                                                                 Page 8 of 9
 Addresses of the parties:

CPIO :
1. INDIAN BANK
HEAD OFFICE, RTI
DEPARTMENT, 5th FLOOR, 66,
RAJAJI SALAI, CHENNAI - 600001


THE FIRST APPELLATE AUTHORITY,
INDIAN BANK, HEAD OFFICE,
RTI DEPARTMENT,
5th FLOOR, 66,
RAJAJI SALAI,
CHENNAI - 600 001

S. MURUGANANDHAM




                                 Page 9 of 9

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