Bombay High Court
S. Rajneet Tara Singh Nandrajog vs The State Of Maharashtra on 5 May, 2021
Author: Prakash D. Naik
Bench: Prakash D. Naik
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL BAIL APPLICATION NO. 1620 OF 2020
WITH
INTERIM APPLICATION NO. 264 OF 2021
Dr.Trupti Suhas Bane ...Applicant
Versus
The State of Maharashtra ...Respondent
ALONG WITH
CRIMINAL BAIL APPLICATION NO. 778 OF 2021
Mukti Bavisi ...Applicant
Versus
The State of Maharashtra ...Respondent
ALONG WITH
CRIMINAL BAIL APPLICATION NO. 213 OF 2021
S. Rajneet Tara Singh Nandrajog ...Applicant
Versus
The State of Maharashtra ...Respondent
.....
Mr. Niteen Pradhan a/w. Adv. Rahul Gaikwad, Ritika Bharadia, Gauri
Govilkar and Nikita Abhyankar i/b. Gravitas Legal Advocate for the
Applicant in B.A. No.1620 of 2020.
Mr. Ashok P. Mundargi, Senior Advocate with Mr. Bhavesh Parmar,
Rahul Gaikwad, Ritika Bharadia, Gauri Govilkar, Nikita Abhyankar i/
b. Gravitas Legal for Applicant in B.A. No. 778 of 2021.
Mr. Shrinivas Bobade a/w. Mr. Wesley Menezes, Sushroot Desai,
Waqar Nazir Pathan for the Applicant in B.A. No. 213 of 2021.
Mr. Aamir Malik and Mr. Dube Patil for Intervenor.
Mrs. P. P. Shinde, APP for the State.
.....
CORAM : PRAKASH D. NAIK, J.
ORDER RESERVED ON : 25th MARCH, 2021.
ORDER PRONOUNCED ON : 5th MAY, 2021.
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PC :
1. The applicants have preferred these applications for bail
under Section 439 of Cr.PC in connection with C.R. No. 375 of 2019
registered with Bhandup Police Station, Mumbai for the offences
punishable under Sections 406, 409, 420, 465, 467, 471 r/w. 120(B)
of Indian Penal Code, 1860 (IPC). The First Information Report (FIR)
was registered on 30th September, 2019. The investigation was then
transferred to E.O.W. Banking II vide C.R. No. 86 of 2019.
2. The brief facts of prosecution case are as under:
(a) The FIR was lodged by Jasbir Singh Matta,
Manager of Recovery Cell, Punjab and Maharashtra Co-
operative Bank Limited (PMC Bank) being authorised by
the Administrator appointed by Reserve Bank of India
(RBI).
(b) The PMC Bank is registered under the provisions
of Maharashtra Co-operative Societies Act, 1960. The bank
was granted license to carry on banking business by RBI in
1984. The bank received scheduled status in 2000 and
became Multi-State Co-operative Bank in 2004. The
conduct of banking business by the PMC Bank is subject to
the provisions of Banking Regulation Act, 1949 and the
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directions/ guidelines issued by RBI.
(c) It was learnt from the records that, the Managing
Director of the bank Mr.Joy Thomas and other
functionaries including Board of Directors executives of the
bank and promoter of HDIL have connived to commit
illegal acts/offences. Some of the loans mainly belonging
to HDIL group companies were intentionally given to cause
wrongful gain to HDIL and its promoters, at the cost of
wrongful loss to the bank and its depositors. The records
were fabricated/falsified to conceal irregularities. Wrongful
acts of the management/bank have resulted in risk of
depositors losing their money.
(d) The bank in their regulatory reporting had
understated the actual exposure of certain bad loan
accounts/ which in the normal course should have been
disclosed and classified as Non-performing Assets (NPA's)
as per RBI norms. The bank was reporting to RBI as
suppressed information of actual loans accounts with huge
exposure and deliberately replaced them with fictitious
accounts. The borrowers in this loan accounts and the
functionaries of the bank, were suspected beneficiaries.
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(e) In the advances master indent for the year ended
31st March, 2018 submitted to RBI, the bank had replaced
44 loan accounts during individual balance outstanding
was higher with 21049 fictitious loan account, whose
individual outstanding was comparatively lower.
(f) Preliminary assessment by interim RBI inspection
conducted by RBI revealed that, 10 out of 44 borrowers
accounts of HDIL group companies revealed that balance
outstanding on 31st March, 2019 was Rs.4355.46 Crores
and the balance outstanding as on 31 st August, 2019 was
Rs.4635.62 Crores. The actual financial position of the
bank was camouflaged and the bank dis-actively shows its
rosy pictures of its financial parameters, thus encouraging
more depositors to open account with bank to their
detriment and also the fabrication /falsification affected
the depositor's interest adversely.
(g) The perpetrators of the fraud viz. Manager, other
functionaries, Board of Directors of HDIL and PMC Bank
connived with each other. In furtherance of criminal
conspiracy facilitated huge lending to HDIL group
companies and other entities which were concealed from
RBI and depositors to dupe the regulators, depositors and
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others. The management and persons responsible for
conduct of the business of the bank, are liable to be
prosecuted for conspiracy, criminal breach of trust,
cheating, forgery, falsification of records etc.
(h) In terms of provisions of Banking Regulation Act,
1949 every Chairman, Managing Director, Director,
Auditor, Manager and any other employee of the bank
were liable to be prosecuted for preparing incorrect
documents with intent to cause damage to the interest of
depositors.
(i) During the period from 2008 to 2019 the accused
committed act of criminal conspiracy, cheating, criminal
breach of trust, forgery and falsification of records. Mr. Joy
Thomas, Managing Director of PMC Bank alongwith
Waryam Singh and other Board of Directors of PMC Bank,
other bank officials and Mr. Sarang Wadhwan, Rakesh
Wadhwan, Kuldeep Singh Wadhwan and other person of
HDIL, executives of Somerset Constructions Pvt. Ltd.,
Serveall Construction Pvt. Ltd., Sapphire Land Developer
Pvt Ltd. Emeralds Realtors Pvt. Ltd. Awas Developers and
Constructions Pvt. Ltd., Prithvi Realtors and Hoteld Pvt. Ltd
and other executives affiliated bank and related person
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caused wrongful loss prima-facie to the tune of Rs.4355
Crores to PMC Bank.
(j) About 15 persons were arrested. The arrested
accused includes Rakeshkumar Wadhwan, Sarang
Wadhwan (Executives HDIL) Joy Thomas, MD, PMC Bank,
Waryam Singh Chairman PMC Bank. Surjeetsingh Arora,
Director of PMC Bank, Ketan Lakadawalla (Auditor PMC
Bank) Jayesh Singhani, Auditor PMC Bank, Anita Kirdat,
Auditor PMC Bank, Rajneet Singh, Director PMC Bank,
Mukti Bavisi, Director PMC Bank, Dr. Trupti Suhas Bane,
Director PMC Bank, Jasvindar Singh Banwait, Director of
PMC Bank, Vishwanath Prabhu, Shripad Jere (Valuers of
PMC Bank), Surjeet Singh Narang, Brij Bhushan Handa,
Omprakash Utpal, Director of PMC Bank.
(k) Statement of witnesses were recorded. Charge-
sheets were filed.
3. The applicants have preferred three separate
applications for bail and urged various submissions in support of
bail. Considering the fact that common issues are involved, in these
applications, the same are heard and disposed of by common order.
The submissions of learned advocates appearing for applicants are
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reproduced separately.
Bail Application No. 1620 of 2020:
4. Learned Advocate Mr. Niteen Pradhan appearing for
applicant Dr.Trupti Suhas Bane has advanced following submissions:
i. The applicant is an MBBS Doctor. She is serving as
Senior Medical Officer at Bhabha Hospital run by
Mumbai Municipal Corporation. She is a shareholder
and deposit holder in PMC Bank. By virtue of being
shareholder and a deposit holder, the applicant was
requested to become a Director in the women reserved
category by shareholders and accordingly, the applicant
has been an elected Director as a women representative
on the board. She is a member of loan committee since
2015. She was elected as an independent non-executive
Director and hence not involved in the day to day affairs
and operations of the PMC Bank. She was arrested on
3rd December, 2019.
ii. The Managing Director of the Bank Mr. Joy Thomas
addressed a letter to RBI on 21 st September, 2019. The
said letter is confession of all sorts of concealment of
fact that HDIL group accounts which constituted a
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substantial parts of the advances of the bank, had
become NPA's. The RBI acted upon the said letter and
took immediate measures. The Board of Directors of the
bank was suspended and in its place an officer of
RBI Mr.Jaybhagwan Bhoria was appointed as an
Administrator.
iii. The FIR was primarily based on the letter dated
21st September, 2019. The allegations in the FIR, were
exaggerated.
iv. The Board of Directors merely represents the
shareholders. The Board of Director meet once in a
month for macro level evaluation for the performance of
the bank and for formulating and approving macro level
policies. The Directors on the board of Directors comes
from different walks of life, having their independent
occupation and not involved in day to day affairs and
operations of the bank. The affairs of the bank are
conducted by professional management team headed by
Managing Director, who is under service agreement with
the bank. General Manager, Joint General Manager,
Deputy General Manager, Assistant General Manager
and other employees work under the instructions of the
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Managing Director for conducting the affairs of the
bank. The entire micro level management of the bank is
handled by professional management team headed by
Managing Director and other employees.
v. There are broadly four committees namely loan
committee, recovery committee, Audit Committee and
Executive Committee. Each committee comprises the
Chairman and Managing Director and 2/3 Directors and
2/3 employees as members. The committee meet once a
month or once in two months to evaluate aspects at
macro level. Audit are undertaken in respect of the
affairs and operation of the bank. The internal audit,
statutory audit and audit by RBI. The bank has vigilance
department to handle cases of fraud and corruption.
vi. Since the Board of Directors are not involved in day to
day affairs and operations of the bank and since they do
not have access to record, the knowledge of Directors
about the affairs and operations of the bank, are
restricted to inputs from the professional management
team and the audit report. They have knowledge what is
brought before them and do not have knowledge of
what is brought before them.
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vii. In PIL No. 791 of 2019, affidavit was filed by Reserve
Bank of India before this Court, wherein the RBI had
stated that HDIL loans were sanctioned by Managing
Director of the bank and the same was concealed from
the Board of Directors and all the committees, which
had no reference in the Minutes of Meeting of the board
or any committee. The search of the residence of the
applicant was conducted on 18th October, 2019 by EOW
and the applicant has co-operated with the search. On
27th December, 2019 EOW filed the charge-sheet against
accused. Rakesh Kumar Wadhwan, Sarang Wadhwan,
Mr. Joy thomas, Mr. Waryam Singh and Surjitsingh
Arora. In the summary of charge-sheet, there is no
whisper against the applicant or Board of Directors.
Thereafter, supplementary charge-sheet was filed on 5 th
February, 2020. The accused were charged under
Section 401, 406, 420, 465, 467, 468, 471, 477-A of IPC
r/w. 120(B) of IPC and Section 46(1) and 47(A) of
Banking Regulation Act. There is no iota of evidence and
no specific allegation against the applicant. The specific
role of the applicant has not been laid down in charge-
sheet. The only allegations against the Board of
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Directors is that the acts or omission or commission by
the Board of Directors. However the EOW did not get
specific evidence against the applicant to substantiate
the act of omission or commission. Thereafter, charge-
sheet was filed on 5th June, 2020 against the co-accused.
There is no iota of evidence against the applicant.
viii. Ever since the applicant has been a Director on Board of
Directors of the Bank and Member of Loan Committee,
not a single loan proposal of HDIL and its associated
companies was brought before her. No issues relating to
recoveries as regards the HDIL and its associated
companies accounts were brought before her. She is an
independent non-executive Director. She is not involved
in day to day affairs and operations of the bank. She is a
Senior Medical Officer. The essence of the offence is
concealment of information by falsification of records.
By no stretch of imagination can it be said that the
applicant was involved in said acts of falsification of
records and concealment of information. It is merely a
presumption.
ix. The allegations against the applicant is that, by virtue of
being Director she is vicariously liable in the alleged
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fraud of the bank. Giving loan may be a regulation
lacuna. The applicant did not receive any illegal
gratification by sanctioning loan. The charge-sheet does
not disclose any kickback / gratification received by the
applicant as a Director of the bank. She was merely
serving as an independent non-executive Director of the
bank.
x. As per the master circular No UBD.CO.BPD.MC No.
8/12.05.2001/2012-2013 dated 2nd July, 2010 the Board
of Director should not involve themselves in the routine
or everyday business and managerial functions of the
bank.
xi. As per circular on Board of Directors dated 2nd July,
2012, the Board should not interfere in the day to day
functioning of the bank and should not involve
themselves in the routine business and managerial
functions.
xii. The applicant is in custody from 3rd December, 2019.
The applicant is a lady. The investigation is completed
and the charge-sheet is filed. The applicant is under
incarceration for about 17 months. She is a permanent
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residence of Mumbai. There is no likelihood that the
applicant would not be available for trial. Further
detention of the applicant is not necessary. Learned
counsel for the applicant tendered compilations of
statements of witnesses and submitted that no specific
overtact has been attributed to applicant being involved
in the fraudulent transactions. It is submitted that
statements of witnesses do not attribute any overtact to
the applicant. The applicant is being incarcerated in
custody, on the basis of inferences that, there were
alleged fraudulent transaction. There is nothing on
record to establish that the applicant was beneficiary of
the loan sanctioned to the prime accused. There is
nothing on record that the applicant had conspired with
the co-accused. The document on record do not suggest
any overtact to the applicant. Merely on inferences, the
applicant need not be detained in custody. There is
variation in the minutes of meeting of the board of
director, as provided to the applicant by the bank and
those relied upon by EOW.
xiii. The real conspirators are listed as witnesses in this case.
5. Learned APP submitted that the prosecution would reply
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after the advocate appearing for the applicant in all the applications,
conclude their submissions.
Bail Application No. 778 of 2021.
6. Learned Senior Advocate Mr. A. P. Mundargi appearing
for the applicant Mukti Bavisi submitted as follows:
i. It is submitted that there is no specific allegation against
the applicant. She is independent non-executive director
of the bank. She was arrested on 3rd December, 2019.
ii. The Board of Directors represent shareholders. The
affairs of the bank are conducted by professional
management team headed by Managing Director.
iii. The applicant is non-practicing Chartered Accountant
she was inducted as expert Director.
iv. The forensic auditor was appointed by PMC Bank to
conduct audit of the bank. They furnished three interim
report on 24th October, 2019, 11th November, 2019 and
25th November, 2019. They furnished summary of the
interim report on 20th December, 2019. The final report
was not submitted. There is no iota of evidence against
the applicant in any of the interim reports, submitted by
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forensic auditor.
v. There is no specific allegations against the applicant. No
specific role is attributed to the applicant in charge-
sheet. The only allegations against the Board of
Directors is that of act of omission or commission. The
EOW do not have any specific evidence against the
applicant to substantiate the act of omission and
commission by the applicant.
vi. Investigation is completed. All the documents are
recovered. Statements of witnesses are recorded.
vii. The applicant has been a Director and member of loan
committee from 2011. Not a single loan proposal of
HDIL group and its associated companies brought before
her. No issues relating to recoveries as regards HDIL
group and its associated companies accounts were
brought before her.
viii. The applicant is not involved in day to day affairs and
operations of the bank. The applicant is not involved in
falsification of accounts. The applicant is being involved
on the basis of the principle of vicarious liability without
any cogent evidence in respect thereof.
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ix. Advancing loan would not constitute any offences.
There is no evidence that applicant has received any
illegal gratification by sanctioning loan. The prosecution
has failed to show specific role of the applicant as
director in the alleged fraud.
x. The applicant is in custody for a period of about 17
months. She is a female. She is an independent non-
executive director of the bank. She was not even aware
of the loan advances made by the HDIL. There is
nothing on record to warrant a prima-facie conclusion
that she was connected with alleged act of falsification
of records and concealment of the information regarding
turning of HDIL group accounts into NPA's. The
prosecution has no evidence to charge the applicant
under 406, 409, 420, 465, 467 and 471 of IPC.
xi. Search panchanama was conducted in the house of the
applicant on 18th October, 2019. Nothing incriminating
was recovered from the applicant. Learned counsel for
the applicant pointed out statements of witnesses and
submitted that except vague allegations, there is no
evidence to show involvement of the applicant in the
crime. The directors were kept in dark. Those who
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were involved, were listed as witnesses. None of the
witnesses state that applicant has participated in alleged
acts. Reference was made to statement of Manbir Singh,
Smt. Rupali Raut, Kamaljit Banwait, Smt. Manjit Kaur.
The summary in the charge-sheet alleges willful
omission or commission by the board of Directors. It is
alleged that, during review of the Minutes of Board of
Directors meetings, it is noted that, temporary adhoc
overdraft limits were being sanctioned by executives of
PMC Bank to customers. The said Adhoc sanctions were
noted in multiple board meetings dated 10 th December,
2004, 10th June, 2005, 13th March, 2006 and 8th
December, 2007. The meetings were silent about
executives who sanctioned these limits as well as
customers who received the benefits on account of these
overdrafts. There was lack of transparency in overdraft
limits sanctioned by executives and BoD were aware of
sanctions and failed to take appropriate actions. In
2007-2008, RBI had levied fine. The applicant was
inducted as expert director in 2011-15 and 2015-2019.
The charge is omission to take action.
xii. The question of absconding does not arise. The applicant
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is in custody for substantial period of time. The case
involves huge documents and there are number of
witnesses. Trial would not be concluded within short
span of time.
Bail Application No. 213 of 2021:
7. Learned Advocate Sriniwas Bobade appearing for
applicant Rajneet Singh submitted as under:
i. The applicant is arrested on 12th March, 2020. He is in
custody for more than a year. Investigation is completed
and charge-sheet is filed. Further detention of the
applicant is not necessary. There is no evidence to
show involvement of the applicant in offences. The
prosecution case is based on inferences. The applicant is
non-executive director of the PMC Bank. The bank's
bylaws stipulate that its Board of Directors shall consist
of 15 Directors. The Board of Directors are to be elected
by the members of general body, out of which atleast
two directors shall be women and one director from
reserved category and two directors with suitable
professional qualification. The term of Board of Director
shall be 5 years. The applicant being a member of Sikh
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community and businessman was appointed as a co-
opted Director in 1999 for a period of two years on the
Board of Directors of PMC Bank vide clause 29(ii) of the
bye-laws of the bank. He was elected to the Board of
PMC Bank in 2001, 2006, 2011 and 2016. He was
appointed in the recovery committee. The recovery
committee comprised of Mr.Waryam Singh (Chairman)
Mr. Joy Thomas (Managing Director) Mr. G. S. Hoti
(Member) Ms.Kriti Bani (Member) and the applicant as
member. Responsibilities and powers of Directors of
PMC Bank are regulated by RBI Master Circular dated
2nd July, 2012. The applicant had no power and role in
day to day affairs of managerial decisions or
transactions of bank.
ii. The aforesaid RBI Circular elaborates the role of
Directors which indicate that,
I. The directors shall not:
a) Interference in the day to day functioning of the
bank.
b) Involve themselves in the routine or everyday
business and in the management functions.
c) Send instructions / directions to any individual
officer/employee of the bank in any manner.
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II. The directors should not
a) Sponsor any loan proposal, buildings and sites for
bank's premises, enlistment or empanelment of
contractors, architects, doctors, lawyers etc.
b) Approach or influence for sanction of any kind of
facility.
c) Participate in the Board discussions, if a proposal
in which they are directly or indirectly interested,
comes up for discussions. They should disclose
their interest, well in advance, to the Chief
Executive Officer and the Board.
d) Sponsor any candidate for recruitment or
promotion or interfere in the process of selection/
appointment or in transfers of staff.
e) Do anything which will interfere with and /or be
subversive of maintenance of discipline, good
conduct and integrity of the staff.
f) Involve themselves in any matter relating to
personnel administration - whether it is
appointment, transfer, posting or a promotion or a
redessal of individual grievances of any employee.
g) Encourage the individual officer/ employee or
unions approaching them in any matter.
III. The Directors should not
a) reveal any information relating to any constituent
of the bank to anyone as, he is under oath of
secrecy and fidelity.
b) The directors are expected to ensure
confidentiality of the bank's agenda papers/ notes.
The board papers may ordinarily be returned to
the bank after the meeting.
c) The directors should not directly call for
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papers/files/notes recorded by various
departments for scrutiny etc. In respect of agenda
items to be discussed in the meetings. All
information/clarification that they may require for
taking a decision should be made available by the
executive.
d) A director may indicate his directorship of the
bank on his visiting card or letter head, but the
logos of distinctive design of the bank should not
be displayed on the visiting card/ letter head.
e) The directors should ensure that the bank's funds
are utilized in a proper and judicious manner for
the benefit of general members.
iii. The applicant has not visited any branches of the bank
for any managerial role or otherwise. He attended board
meeting 4 times a year.
iv. Voluminous charge-sheet filed by the officers of E.O.W. reveals
that the major part of the conspiracy that is opening of fictitious
bank accounts and creating fake documents for fictitious accounts
was conspired and effectuated at various branches of PMC bank,
under the instructions and surveillance of Managing Director Joy
Thomas.
V. The statement of bank officials recorded by the investigating
officer makes it clear that none of the statement prima-facie
disclosed any case for commission for offences under Sections
406,409, 420, 465, 467, 471 r/w. 120(B) of IPC against the
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applicant.
Vi. The RBI master circular dated 2nd July, 2012 restricts the
power of the applicant as a director and leaving him no option but to
trust the bank management to supply the Board of Directors with full
and truthful picture of the bank business. The applicant could not
control what documents of PMC and Chairperson of the banks would
show him, nor the advice of the applicant is binding on them.
Vii. The bylaws of prescribed procedure for conduct of meeting of
Board of Directors meeting were presided by chairperson and vice
chairperson. The applicant never had position of chairperson and
vice chairperson of the board. The applicant had not played any role,
nor he had any powers to direct or supervise the manner of
sanctioning of loans and business development, opening of account.
The applicant was proceeding on the basis of limited information
presented to him. Most of documentation relating to creatting
fraudulent accounts involved in extending loan to HDIL and its group
companies were created at different branches of PMC Bank. The
applicant had no access to these branches and no power to call for
records. All document pertaining to sanction of loans to HDIL as well
as fraudulent filings made by bank to RBI to conceal loans were
created by officials of bank who were conducting the affairs of the
bank under instructions of managing director and chairperson.
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Viii. The applicant was a member of loan recovery committee
which could execute its functions only once, a loan was declared as
NPA. The account of HDIL and its group companies were never
declared as NPA by Managing Director, Chairperson, Deputy General
Manager and personnel involved in day to day working of the bank,
till the scam was actually brought to light. The issues regarding HDIL
borrowings were never tabled before loan recovery committee. The
complainant Jasbirsingh Matta was the loan recovery manager in
PMC Bank. He did not raise any internal complaint informing Board
of Directors about anomalies in HDIL's borrowings. The applicant as
Director, had no access to core banking solution system used by PMC
Bank.
ix. Reading the charge-sheet and statements of individuals who
have been named as witnesses, it is ex-facie apparent that none of
the witnesses have either directly or indirectly named the applicant
or even narrated any sort of role that the applicant might have
played in giving fraudulent loans to HDIL.
X. Learned advocate adverted to statement of witness Jasbirsingh
Matta, Manbeer Singh, Kamaljeet Kaur Banwait, Suraj Dalvi, Sunil
Karpe, Rupali Raut, Siddhi Padwe, Mangesh Sawant, Santosh Gurav,
Kunal Oberoi, Yogesh Kokate, Subhash Gholap and Satnam Matta.
Sanjay Kumar, Anand Pushparaj, Rajesh R. N. Sandip Kachare, Anita
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Utpal and other witnesses. It is submitted that, reading the statement
of these witnesses, it is apparent that there are no allegations or even
whisper made against the applicant. There is no allegation that the
applicant as a member of the board, played any role in facilitating
loan to HDIL and its group companies or that he was involved in
preparing any fraudulent documentation. The statements would
indicate that the applicant was not even aware that the loans were
fraudulently extended to HDIL. The applicant had no access the
document prepared and submitted to Board of Directors by Waryam
Singh and Joy Thomas, who were involved in issuing fraudulent loan
to HDIL.
Xi. The supplementary charge-sheet dated 6th February, 2020
refers to name of the applicant as accused No. 9. None of the
witnesses have directly or indirectly named the applicant or narrated
any sort of role to the applicant, being participant in fraudulent
transactions with HDIL.
Xii. The statements of various witnesses do not establish prima-
facie case for commission of offence under Section 406, 409, 420,
465, 467, 471 r/w. 120(B) of the IPC against the applicant. All
instructions of effectuate the fraudulent transactions were given by
chairperson and Managing Director to managerial personnel of PMC
Bank.
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Xiii. Mr.Joy Thomas has addressed a letter dated 21 st September,
2019 which indicate that the concealment of information from
board, auditors and regulators due to fear of reputational loss. The
investigating agency did not find single instance of meeting or
communication between the applicant and HDIL group. The bank
dealings with HDIL and Chairperson, Managing Director to the
exclusion of Board of Directors. The applicant has not personally
benefited in any transaction. The actual role of the applicant, was at
the most advisory and helping his community. He has not obtained
any loan from the bank. He did not receive salary from the bank.
Xiv. Learned advocate for the applicant placed on record
compilation of list of documents, such as bylaws of PMC, master
circular of RBI letter dated 21st September, 2019 and statement of
prosecution witnesses.
Xv. Learned counsel for the applicant has relied upon several
decisions viz:
a. Prabhakar Tiwari v/s. State of Uttar Pradesh, 2011
SCC 648.
b. P. Chidambaram v/s. Directorate of Enforcement
delivered in Appeal No. 1831 of 2019.
c. P. Chidambaram v/s. CBI, 2019 SCC Online SC 1380.
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d. Sanjay Chandra v/s. CBI 2012 (i) SCC 40.
e. Husainara Khatoon v/s. State of Bihar, AIR 1979 SC
1369.
f. Babu Singh and others v/s. State of Uttar Pradesh,
1978 (1) SCC 579.
g. Motiram and others v/s. State of Madhya Pradesh,
1978 (4) SCC 47.
h. Navendu Babbat v/s. State of NCT of Delhi, decided
by Delhi High Court dated 18th June, 2020.
i. Dr. Shivender Mohan Singh v/s. Directorate of
Enforcement, 2020 SCC online DEL 766.
j. Anil Saxena v/s. State of NCT of Delhi delivered by
Delhi High Court dated 17th June, 2020.
8. Learned APP Mrs. Prajakta Shinde opposed the
applications for bail on several grounds. She relied upon the
compilation of statements of witnesses written submissions, and
affidavit in reply filed by Investigating Officer. It is submitted on
30th September, 2019 an application came to be submitted by
Jasbirsingh Matta, Manager, Recovery Cell of PMC Bank against Mr.
Joy Thomas, Managing Director of the PMC Bank and other officials
of PMC Bank, Directors of HDIL and its group companies, causing
huge loss to the bank and hence C.R. No. 375 of 2019 was registered
with Bhandup Police Station, Mumbai. The investigation was
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transferred to EOW. And CR No. 86 of 2019 was registered. First
charge-sheet vide CC No. 882/PW/19 was filed on 27 th December,
2019 against accused No. 1 Rakesh Wadhwan, Accused No. 2 Sarang
Wadhwan, Accused No. 3 Joy Thomas, Accused No. 4 Waryam Singh
and Accused No. 5 Surjeet Arora. Second charge-sheet vide CC No.
106/PW/20 dated 5th February, 2020 was filed against the accused
No. 6 Ketan Lakadwala, Accused No. 7 Jayesh Sanghani, Accused No.
8 Anita Kirdat, Accused No. 9 Rajneet Singh, Accused No. 10 Jagdish
Mukhi, Accused No. 11 Mukti Bavisi and Accused No. 12 Dr. Trupti
Bane. Third Charge-sheet vide CC NO. 296/PW/2020 dated 5 th June,
2020 was filed against the accused No. 13 Jasvindarsingh Banwait,
accused No.14 Vishwanath Prabhu, accused No.15 Shripad Jere,
accused No.16 Balbirsingh Kochar, accused No.17 Surjitsingh
Narang, accused No.18 Brijbhushan Handa and accused No.19
Omprakash Uppal.
9. It is further submitted that the applicant in B.A. No.
1620 of 2020 Dr. Trupti Bane is one of the Director of the board of
PMC Bank since 2005. She is a member of recovery committee for a
period 2010 to 2015 and 2015 to 2020. She was on the board of
loans and advance committee of PMC Bank and her service in both
the committees are enough to describe her experience in recovery of
loans and sanctioning of loans in PMC Bank, where HDIL group
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companies have always remained common factor in both the
committees. During her tenure in recovery committee, most of the
loan facilities of HDIL group companies were overdue or overdrawn
and during her tenure in loans and advances department, most of the
overdue or overdrawn facilities of HDIL group companies were
replenished with new funding. It is the willful omission on the part of
applicant with other accused to act diligently in respect of fraudulent
loan account of HDIL group companies and others in PMC Bank
during the period of alleged offence.
10. The applicant in B.A. No. 778 of 2021 Smt. Mukti Bavisi
is the Director on the board of PMC Bank and member of loans and
advances committee of PMC Bank from 2011 to 2015 and 2015 to
2020. The fraud is the outcome of irregularities in the loan account
of HDIL group companies and loan committee of PMC Bank has
always remained the gateway for account of HDIL group companies.
During investigation it was revealed, that inspite of overdrawn, most
of the loan facilities of HDIL fresh loan facilities were advanced to
HDIL. The members of loans and advances committee have never
kept the track of loan facilities of HDIL group companies and their
loan account were given more funding during the period of alleged
offences.
11. The applicant in B.A. No. 213 of 2021 Mr. Rajneet Singh
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is long serving Director and the Member of recovery committee in
PMC Bank from 1999 to 2019. Several loan facilities of HDIL group
companies were availed during period of alleged offence and most of
these facilitires have remained unpaid. The applicant and the other
members of the recovery committee never made efforts to recover
the long pending dues. It is deliberate inaction on the part of
recovery committee, that unrecovered loan facilities of HDIL group
companies remained under cover and moreover, functionaries of
PMC Bank have sanctioned additional facilities to loan accounts with
heavy outstanding to convert their heavy dues into part of loan
facilities.
12. It is submitted that various discrepancies were noticed
by forensic auditor in their interim report, which is as follows:
i. Minutes of multiple board meetings are not available.
ii. Pages from minute books are missing.
iii. Pages were manually added in the minute books and
was not serially numbered.
iv. Notices issued to the Board of Director were unsigned.
v. Directors present in the meeting as per the minutes,
were shown absent in the attendance register and vice-
versa.
vi. There was discrepancies between details mentioned on
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sanctioned letter of HDIL and minutes.
13. Learned APP further submitted that inspection
conducted by RBI on 31st March, 2018 noted financial irregularities /
negligence/ lack of diligence on the part of the Board of Directors.
There were deficiencies in the functioning of Board of Directors
During the investigation, complicity of Board of Directors was
examined. Statement of concerned officers of PMC Bank were
examined and the findings corroborate with forensic audit report.
Loan availed by the associated companies of HDIL with overdraft
facilities, were intentionally overlooked by Directors of the board.
Their omission caused loss to the bank. There were falsification of
accounts, forgery in electronic records. During the investigation, it
was revealed that there were lack of due diligence in functioning of
the directors of the board and various acts of commission and
omission being committed by them. The Board of Directors were
elected by shareholders and appointed by committees for functioning
of portfolios of bank. They have not functioned as per the bylaws of
PMC Bank and RBI guidelines and did not adhere to principle of Do's
and Don'ts and master circular of Board of Director dated 1 st July,
2010 and 2nd July, 2012.
14. The prosecution relied upon the following Judgments:
i. Y. S. Jaganmohan Reddy 2013 7 SCC 439.
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ii. Serious Fraud Investigation v/s. Nitish Johari,
2019 9 SCC 165.
15. Learned APP has relied upon the statement of some of
the witnesses recorded under Section 164 of Cr.PC. Learned APP also
relied upon the statement of various witnesses recorded under
Section 161 of Cr.PC more particularly statement of Jasbir Singh
Matta, Manjeet Kaur, Rijesh R. N. Kamlajeet Banwait, Sameer
Paranjape. Reliance is also placed on statement of Kamaljeet
Banwait, Manbeer Singh, Jaspal Singh recorded under Section 164 of
Cr.PC. Reliance is also placed on the bylaws of the bank, extract of
forensic audit report, RBI circular dated 2nd July, 2012.
16. The investigating officer had filed an affidavit in reply
and opposing the grant of bail. The affidavit indicate that the PMC
Bank holds large funds of depositors. The offence is serious.
Magnitude of the amount involved is huge. Some of the accused are
absconding. The nexus between the HDIL and some of the accused is
made out. Possibility of pressurizing the prosecution witnesses,
cannot be ruled out. Investigation is still in progress under Section
173(8) of Cr.PC. Forensic audit is in process.
17. Learned counsel for the intervener opposed the
application for bail. He reiterated the submissions of learned APP. It
is submitted that all the applicants have played vital role in causing
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loss to the bank. The offences are of serious. Huge amount is
involved. There is no classification as a non-executive director. The
witnesses have attributed role to the applicants. Their acts and
omission have caused loss to the bank. Forensic audit is in progress.
PMC Bank is multi state co-operative bank. Gravity of the offence has
to be considered. Loss is caused to the depositors of the bank. The
accused is likely to tamper with the evidence.
18. The applicant in B.A. No. 1620 of 2020 had preferred an
application for bail before the Court of learned Magistrate. The said
application was rejected by Order dated 30th December, 2019. The
applicant preferred an application for bail before the Sessions Court.
The said application was rejected on 2nd May, 2020.
19. The applicant in B. A. No. 778 of 2021 had preferred an
application for bail before the learned Metropolitan Magistrate. The
said application was rejected by Order dated 30 th September, 2019.
The said applicant preferred an application for bail before the
Sessions Court, which was rejected by Order dated 2nd May, 2020.
20. The applicant in B.A. No. 213 of 2021 had preferred an
application for bail before the Court of Sessions Court, which was
rejected by Order dated 2nd May, 2020.
21. The applicants in these applications were directors of
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PMC Bank. Applicant Dr. Trupti Bane and Mukti Bavisi were arrested
on 3rd December, 2019 and the applicant Rajneet Singh was arrested
on 16th November, 2019. During the course of investigation, it was
revealed that accused Rakesh Wadhwan, Sarang Wadhwan, Joy
Thomas and Waryam Singh and Surjitsingh Arora had conspired to
commit fraud and they were assisted by other accused. The accused
committed acts of forgery, falsification of account, misrepresentation,
suppression of facts, criminal breach of trust etc. In the summary of
the charge-sheet, it is stated that Forensic audit was conducted.
Various anomalies were revealed in the functioning of statutory
auditors. There were willfully omission or commission by Board of
Directors. The minutes of the meeting indicate that temporary
overdraft limit were sanctioned by executives of PMC bank to
customers.
22. The Managing Director of the bank Mr.Joy Thomas
forwarded a letter to RBI on 21st September, 2019. The gist of the
said letter addressed to RBI, mentioned that PMC Bank had
commenced its operation in February, 1984. Board was reconstituted
in 1986. Apprehending closure of bank, the companies of Diwan
family came to the rescue of bank. They infused capital and helped
the bank to bring networth of the bank. In 1986 to 1987 they infused
capital of Rs.13 Lakhs and huge deposits for revival of the bank.
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They started banking with the PMC bank as depositor. Loan and
advances relation started in 1990. The advances were mostly in the
form of overdrawals. The Directors of HDIL started banking with the
PMC Bank. The said company was dealing with the purchase of land
and developing them. Their accounts used to get overdrawn. The
Wadhwan group's exposure was around Rs.500 Crores. The funding
of HDIL became huge. The HDIL expanded their operations. The
bank continued to earn high interest from the funding of the HDIL
group. The HDIL groups started facing liquidity crunch and defaulted
with dues of bank. The loans were huge and if they were classified as
NPA, it would have affected the profitability of the bank and the
bank would have faced regulatory action from RBI. This could have
reputational risk for a bank. The bank continued to report all the
HDIL accounts as standard accounts. Though accounts of HDIL were
not performing well, it was not brought to the notice of the board.
The subsequent overdue of various loans were also not reported to
the board of directors, Auditors or RBI. The subsequent overdues of
various loans were also not reported. They were running many
projects and were in the business of taking over the companies and
open separate accounts for different project. The concealment of
information from board, auditors, and regulators was due to fear of
reputational loss. The volume in the accounts were huge as the major
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business of the company, were to acquire small pieces of land from
the farmers and then developing the land and creating infrastructure
after getting necessary approvals from the authorities. Till 2019,
some of the accounts were reported and shown, but many legacy
accounts were not reported to the board. Since the Bank was
growing to the statutory auditors, due to their time constraints were
taking only the incremental advances and not entire operations in all
the accounts. They validated the incremental loans and advances and
scrutinize the accounts, which were shown by them. In the RBI
inspection prior to 2015 officers, used to check mostly top few
borrowers accounts reported by the bank branch wise,therefore,
these accounts did not come into picture and it was around 2017 on
wards when the RBI started asking for indent for advances master.
The stressed legacy accounts belonging to this group were replaced
with dummy accounts to match the outstanding balances in the
balance sheet. The exposure of HDIL group was Rs.1026 Crores. If
they had classified them as NPA, they were required to stop charging
interest on these accounts, which could have resulted in losses. HDIL
group promised to clear the dues and gave adequate security. The
letter also indicated the roadmap plan for the action implementation.
The letter further state that every year during the course of RBI
inspection, the bank used to be under stress due to concealment of
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information from RBI. The six staff members were fully aware of the
situation and they decided to the bring it to the notices to the higher
authority in RBI. All the decisions for granting of overdrawls to
accounts, was as per his instructions. The executives has no role in
allowing overdrawals and they were doing it as per his instructions,
as they had faith in him and as part of system.
23. The FIR was registered on 30 th September, 2019 on the
basis of letter dated 30th September, 2019 forwarded by the
complainant to the crime branch. The complainant Jasbirsingh Matta
was the Manager (Recovery Cell of PMC Bank, Bhandup West). In
the FIR, it was alleged that actual financial position of the bank was
camouflaged by giving rosy picture about financial status and
encouraging depositors to open account with the bank. The
management and persons are responsible for the conduct of the bank
are liable to the criminal breach of trust, cheating, forgery etc. In
pursuant to that the investigation was transferred to EOW, Crime
Branch.
24. The contentions of the applicants is that the affairs of
the bank are conducted by professional management team headed by
Managing Director. There is no evidence to show that the applicants
are part of conspiracy to cause wrongful loss to PMC Bank and
wrongful gain to them.
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25. I have perused the statements of witnesses recorded
during the investigation. Mr.Manbeer Singh was working with PMC
Bank as Chief Manager. In statement dated 23 rd November, 2019 he
stated that Manjeet Kaur was a Joint General Manager. She was
taking instructions from Joy Thomas, Managing Director of PMC
Bank. Manjeet Kaur had told him and others to prepare/renew
documents of entities of HDIL. When he asked for relevant files to
check if loan account are processed as per RBI guidelines, the same
were not provided by Manjeet Kaur and she insisted them to prepare
the documents without referring to those files. He further stated that
credit proposal of HDIL and its entities were sanctioned violating all
rules and regulations of PMC Bank and RBI guidelines by Manjeet
Kaur on instructions of Mr. Joy Thomas with common intention to
facilitate M/s.HDIL, Mr. Rakesh Wadhwan and Mr. Sarang Wadhwan
to cause wrongful gain to them. Anita Kirdatt was told by Manjeet
Kaur to prepare desirable financial statement, which would conceal
vital borrowals unshown accounts. These witness also referred to RBI
Circular dated 2nd July, 2012 about Do's and Don'ts by Directors and
Board of Directors. It is further stated that, if the Board of Directors
had followed the circular and shown due diligence, the bank could
have been saved. Further statement of this witness was recorded on
25th November, 2019. In the said statement, it was stated that Mr.
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Waryam Singh, Mr. Joy Thomas, Manjeet Kaur were aware about
default account of Ravi Development Pvt. Ltd. And Guru Ashish
Constructions Pvt. Ltd. Both subsidiaries of HDIL has not attributed
any overtact to the applicants. The statement Suraj Dalvi was
recorded on 27th November, 2019. He was working as Manager with
PMC Bank. He stated that as per the instructions of Joy Thomas,
Smt. Manjeet Kaur during 2013 to 2019 he alongwith Sunil Karpe,
Mr. Subhash Gholap paid cash to Mr. Rakesh Wadhwan. Director of
HDIL, Mr. Waryam Singh and Mr. Joy Thomas cash was paid from the
centralised cash vault of the bank. They were instructed not to make
any formal entry in the records of the vault. Separate book was used
to maintain date wise records of cash paid to those persons on
instructions of Mr. Joy Thomas and Manjeet Kaur. During 2013 to
2015 cash paid to HDIL for projects majestic Tower and whispering
tower was returned as stated by him. No role has been attributed to
applicants in these violations. Statement of Sunil Karpe was recorded
on 27th November, 2019. He was Sr. Manager in account department.
He referred to fraudulent cash payment made to HDIL and its
associates. Statement of Smt. Rupali Ashish Raut were recorded on
20th October, 2019, 25th November, 2019 and 11th December, 2019.
She stated that she was working with PMC Bank. She has referred to
the role of Manjeet Kaur and other persons from the bank. Data was
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prepared by Audit Department for submitting it to RBI. Thereafter,
this work was assigned to credit department. Head of credit
department were Manjeet Kaur, Aarti Desai and Karmen Rebello. She
stated that access of code was given to account of HDIL group
companies. As per the instructions of Manjeet Kaur and others, the
amount outstanding of HDIL was not shown to RBI and that was
distributed randomly in fictitious accounts. She furnished the details
of account of HDIL and outstanding amount. In credit department of
PMC Bank there was practice of inclusion of loan proposals which
were not actually placed before loan committee and Board of
Directors meeting. As per the instructions of Smt. Aarti Desai and
Manjeet Kaur, she had compiled the list of minutes of loan proposals
alongwith xerox copies of loan process notes for records which she
used to receive from several officials of credit department through
email or by sharing files in staging area. Soime of the proposals were
never discussed in any meeting yet the same were shown as placed
and discussed in a loan committee/board meeting. Some of the loan
committee meetings shown as held, had never been held actually
and only records were prepared to show it as conducted. Smt.Siddhi
Padave in her statements stated that there was practice of converting
overdraft accounts of HDIL into current accounts for concealing their
credit exposure during RBI inspection. She was instructed to check
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the entries of charging interest etc. I have also perused statement of
Kushaldeep Chahal, Santosh Gurav, Kunal Oberoi, Yogesh Kokate,
Deepak Gawade, Subhash Gholap. All these witnesses has referred to
the working of PMC Bank, handling of accounts of HDIL group
companies, acts of concealment on the instructions of Senior Officers
of the Bank, suppression of facts from RBI etc. Smt.Ranjana Bisen
was working as Chief Manager with PMC Bank. Her statements were
recorded on 30th November, 2019, 12th December, 2019 and 14th
December, 2019. Her statement reveals how PMC officials Ms.
Karmen Rebello, Ms. Manjeet Kaur, Mr. Joy Thomas and Mr. Waryam
Singh with Mr. Rakesh Wadhwan entities privilege Airway Pvt. Ltd.
And privilege Industrial fabricated documents. Statements of Anita
Rupesh Koli were recorded on 30 th November, 2019 on 12th
December, 2019 and 17th December, 2019 also refers to the
procedure followed sanctioning and disbursement of loan. She
stated that the bank officers Karmen Rebello, Manjeet Kaur, Joy
Thomas, Waryam Singh were responsible for preparing false
documents acting in connivance with borrower company owned by
Rakeshkumar Wadhwan and Sarang Wadhwan without taking
appropriate security for loan and that during 7 th June, 2011 to
7th February, 2013 facility of Rs.50 Crores was given to them.
Statement of Kamaljeet Kaur Banwait was recorded on 22 nd
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November, 2019 23rd November, 2019 and 25th November, 2019. She
was working in MD secretariat Department headed by Mr. Joy
Thomas. She has stated that the bank had central loan processing
cell at Bhandup, which was headed by P. N. Karanth who was
reporting to Mr. Joy Thomas. She also stated that Karmen Rebello,
Deputy General Manger, Aarti Desai, Deputy General Manager were
working in Credit Department and reporting to Manjeet Kaur. She
also stated that loan proposals sanctioned under the power of
Managing Director, above his delegation were placed before loan
committee and Board of Directors for ratification. The regular loans
were placed before the committee. The loan proposal of HDIL were
also placed before the Board of Directors. The proposals were
sanctioned by Board of Directors of PMC Bank inspite of
discrepancies. She referred to circular dated 2 nd July, 2012. Prior to
2017, PMC Bank has not secured mortgage properties from H?DIL. In
May, 2017, Sarang Wadhwan and Rakesh Wadhwan approached
Mr.Joy Thomas for financing their project. Sarang Wadhwan and
Rakesh Wadhwan, Waryam Singh used to meet Mr. Thomas and have
discussion. Statement of this witness was also recorded under
Section 164 Cr.PC. On 26 th December, 2019. She stated that in 2008,
loans were brought under the central office purview. Ms. Karmen
was transferred to central office. The proposals received for fresh
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credit, renewals, additional requirements etc. were discussed by
senior officers with Ms. Manjeet Kaur and Mr. Joy Thomas and that it
was decided whether to be placed before committee. The committee
formed of the members, chairman and managing director as the ex-
officio and department heads of credit and investment with Joint
General Manager and Manager and Dy. Managers. She referred to
discrepancies in minutes of Board meeting. Anita Kirdatt was
assigned to audit. She was providing assistance to Mr.Manbeer Singh
and Manjeet Kaur. No specific overtact has been attributed to the
applicants. Mr. Rijesh R. N. in the statement dated 21 st November,
2019 have stated that the bank had not disclosed restructured
account. The performance of Board of Director were not considered
as satisfactory, as the Chairman had not ensured adherence to RBI
Do's and Don'ts prescribed for the Board of Directors. The Audit
committee did not review the implementation of the guidelines and
did not submit the note to the board at quarterly intervals.
26. Statement of Manjeet Kaur was recorded on 12 th
February, 2020. She was Jt. General Manager. This witness has
referred to the procedure to process loan proposal in PMC Bank.
According to her, she recommend the loan of HDIL group companies
which came to her on the instructions of Joy Thomas then Managing
Director of PMC Bank, Mr.Waryam Singh the Chairman of PMC Bank
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was also aware of all the loan sanctioned to HDIL group. Mr. Waryam
Singh and Joy Thomas used to monitor particularly the loan
sanctioned to HDIL group personally and in this connection, they
used to have frequent meeting with Rakeshkumar Wadhwan and
Sarang Wadhwan. She had objected on several occasions at the time
of recommending new sanctions to Joy Thomas. She has blamed
Mr.Joy Thomas and Mr.Waryam Singh. She has not attributed any
overtact to applicants in the alleged fraudulent transactions.
27. Statement of Raju Sinha dated 13th November, 2019,
referred to procedure followed for sanctioning loans and role of
Board of Directors. Statement of Manbeer Singh was recorded on
26th December, 2019 under Section 164 of Cr.PC. He stated that,
Manjeet Kaur used to call him for reporting to central office to check
discrepancies in mortgage deeds of HDIL and its entities. She was
taking instructions from Joy Thomas. The relevant files were not
shown to him by Manjeet Kaur. Legal documents of properties and
property valuation was not provided. He referred to RBI circulars. It
was not implemented. Bank could have been saved if diligence was
shown by Directors. Specific role has been attributed to officers of
Bank referred to therein. Except alleging that circular of RBI was not
followed, there is no specific allegation about involvement of
applicants. Statement of Samir Paranjape was recorded on 14 th
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December, 2019. He is partner in Grant Thorton India. They
conducted Forensic Audit. They prepared interim report. They noted
irregularities in advances, inadequate collateral, lapses in
documentation, end use of loan, purchase of fixed assets, summary
of financial transactions, relatives of Board of Directors, Minutes of
Board Meeting, resolutions, lapses in internal control etc. The
summary of transactions with relatives of Board of Directors, refers
to amount of Rs.36,065/- paid to Hitesh Shah, allgedly brother in
law of applicant Mukti Bavisi. The said applicant has submitted that,
Hitesh Shah referred to in the said entry is not the brother in-law of
applicant. The brother in law of applicant Mukti Bavisi has filed
affidavit stating that he is not the Hitesh Shah mentioned in the
report and there is mistake of identity. He never had any account
with Union Bank of India. The interim Forensic Audit report contains
a note that, they have not received the KYC and can confirm if the
payments are actually made to relatives of directors. He did
not receive amount from HDIL or its affiliates i.e. Sunshine
Communications Pvt. Ltd. There is no evdidence that applicants had
applied for loan for themselves or to any of their close relatives.
28. On perusal of the statements and the voluminous
charge-sheet indicate that the major part of conspiracy about
opening of fictitious account, creating false document for fictitious
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account was conspired effectuated under the instructions of the co-
accused. The statements do not attribute specific overtact to the
applicants. The bank's bylaws prescribe procedure for conduct of the
meetings of the Board of Directors. Specific role of the applicant has
not been enumerated in the charge-sheet. The primary allegation is
that, there were omission and commission, which resulted in loss to
the bank. However, there is no evidence against the applicants to
substantiate acts of omission or commission. Investigation is
completed. Charge-sheet is filed. There is no evidence to show that
the applicants were a part of any conspiracy with prime accused in
causing loss to the PMC Bank. In fact the first charge-sheet
proceeded on the basis that the co-accused were arrested. They had
conspired with each other, while disbursing loans to the prime
accused and did not take steps to recover the same. There is nothing
on record to show that the applicants at any point of time had met
accused No. 1 to 2 or there were any meetings with the Directors of
HDIL group. There is no evidence that the applicants have received
any kickback/ gratification as Board of Directors of the bank. There
is no evidence that the applicants have misused their position as
Director of the bank in sanctioning loan to themselves or to their
relatives or any other person known to them. The applicants are in
custody for more than a year. Further custody of the applicants is not
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necessary. There are several statements of witnesses recorded during
the investigation. The case relates to voluminous documents. The
statements of witnesses indicate that some of them are accomplices
the affairs of the bank are conducted by them. They were acting on
the instructions of senior officers of Bank. Primarily the applicants
are charged for non-diligence or omissions. There is no cogent
evidence, prima-facie for conspiracy against applicants. There is no
evidence that applicants were involved in fabrication of documents,
discrepancies in minutes of Board meetings, resolutions. The
statements of witnesses attribute specific overtact to persons named
therein for sanctioning loan, concealing documents, fabrication of
documents, pressurising witnesses, holding meetings with prime
accused, suppressing vital information from RBI, opening fictitious
accounts, visiting branches, advancing loan witnesses collateral
security. The RBI Circular lays down certain embargo for interfering
in day to day activities of bank. Considering nature of evidence
further detention of applicants is not necessary. There are no criminal
antecedents against applicants.
29. In the case of P. Chidambaram (Criminal Appeal No.
1831/2019 dated 4.12.2019 the Apex Court has observed that the
accused has not influenced any person while he was at large, the
allegation of tampering while in custody is not acceptable. When
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there is no document to indicate that the accused is involved, the
mere allegation that, the accused is co-conspirator cannot be the
basis to indicate that an economic offence has been committed by
accused. The accused therein, is not in political power, nor holding
any post of the Government so has to be in position to interfere. It
was further observed that the availability of the accused for further
investigation, interrogation and facing trial, is not jeopardized, as he
is held to be not a flight risk and there is no possibility of tampering
evidence or influencing /intimating the witnesses.
30. In the case of Sanjay Chandra (Supra) it was observed
that the object of bail is to secure the appearance of the accused, it is
neither punitive, nor preventive deprivation of the liberty must be
considered a punishment, unless it can be required to ensure that an
accused person who will stand his trial when called upon. The grant
or refusal to grant bail lies with the discretion of the Court. Bail
ought not to be denied, to teach a lesson to the person whose offence
is yet to be proved.
31. In the case of Y. S. Jaganmohan Reddy (Supra) wherein
it was observed that nature of acquisition and evidence, severity of
punishment which conviction will entail the character and
circumstances, which are peculiar to the accused, reasonable
possibility of securing persons of the accused at the trial, larger
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interest of the public / state, and other similar considerations are
required to be taken into account.
32. In the case of Serious Fraud Investigation offence
(Supra) it was observed that specifically heed must be paid to
stringent view taken by the Supreme Court towards grant of bail
with respect to the economic offences.
33. In view of observations made here-in-above and
considering the fact that the applicant here-in-above are in custody
for about 17 months. Further detention of the applicants is not
necessary. Bail can be granted to them.
34. Hence, I pass the following order:
ORDER
i) Bail Application No. 1620 of 2020, Bail Application No. 778 of 2021 and Bail Application No. 213 of 2021, are allowed;
ii) The applicants are directed to be released on bail in connection with C.R. No. 375 of 2019, registered with Bhandup Police Station, Mumbai and investigated by EOW Banking II vide C.R. No.86/2019 on executing P.R. bond in the sum of Rs.1,00,000/-(Rupees One Lakh Only) each with ::: Uploaded on - 06/05/2021 ::: Downloaded on - 10/09/2021 08:22:23 ::: Ganesh Lokhande 49 of 50 ba-1260-20 w-ba-788-21-w-ba-213-21.doc one or more sureties in the like amount;
iii) The applicant shall report E.O.W. Crime Branch once in a month on first Saturday of the month between 11:00 a.m. to 1:00 p.m. for a period of six months and thereafter, once in three months on first Saturday of the month between 11:00 a.m. to 1:00 p.m till further order;
iv) The applicants shall not tamper with the evidence;
v) The applicants shall deposit their passports before trial Court;
vi) The applicants shall not leave India without prior permission of trail Court;
vii) In the event the applicants do not have passport, they shall file affidavit stating so before the Trial Court;
viii) The applicants shall attend Trial Court regularly on the date of hearing of the case unless exempted by the Court;
ix) The applicants are permitted to furnish provisional Cash Bail Security in the sum of Rs.1,00,000/- for a period of eight weeks in lieu ::: Uploaded on - 06/05/2021 ::: Downloaded on - 10/09/2021 08:22:23 ::: Ganesh Lokhande 50 of 50 ba-1260-20 w-ba-788-21-w-ba-213-21.doc of surety;
X) The observation made herein are prima-facie for considering application for bail and the trial court shall not be influenced by them during trial; Xi) Bail Applications and interim applications, stands disposed of accordingly.
(PRAKASH D. NAIK, J.) ::: Uploaded on - 06/05/2021 ::: Downloaded on - 10/09/2021 08:22:23 :::