High Court
Legal Reasoning
10 BA.1273-24 & anr.odtappreciation of evidence. The relevant observations against theapplicant do not show that he was the beneficiary of theborrowers granting them loans. Prima facie, it also appearsthat the assets of the bank are more than the liability and thetotal deposits as of 19.02.2019 were more than the balance tobe paid. The bank has repaid the amount of Rs.9,29.27 croresto depositors in five years from 2019 to 2024. It appears thatthe applicant has supported the investigating agency. He is asenior citizen suffering from various ailments. There are a largenumber of witnesses. Therefore, it may be presumed that thetrial will take its time. The material investigation against theapplicant has been completed. Therefore, his further detentionwould serve no purpose. However, to protect the interest ofthe bank as well as the depositor, certain conditions may beimposed. Hence, the following order :O R D E R(i)Bail Application is allowed.(ii)Applicant Anil Chandulal Kothari be released onbail on furnishing P.B. and S.B. of Rs.50,000/-(Rupees Fifty Thousand only) with one solventsurety of like amount, on the followingconditions :
Arguments
1 BA.1273-24 & anr.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADBAIL APPLICATION NO.1273 OF 2024Anil Chandulal Kothari,Age : 65 years, Occu. Business,R/o Manik Nagar, Ahmednagar,Tq. and Dist. Ahmednagar.… Applicant. VersusThe State of Maharashtra… Respondent.WITHCRIMINAL APPLICATION NO.2973 OF 2024 IN BA/1273/2024(Dhondopant s/o Mohiniraj Kulkarni and another Vs. AnilChandulal Kothari and another)...Advocate for Applicant : Mr. R. R. Karpe.APP for Respondent-State : Mr. S. P. Sonpawale.Advocate for Depositor to assist APP : Mr. Gholap A. M.…CORAM : S. G. MEHARE, J.RESERVED ON : 09.10.2024PRONOUNCED ON : 18.10.2024O RDER :- 1.Heard the learned counsel for the applicant, learned APPfor the respondent-State and learned counsel for the depositor.2.The applicant seeks bail in Crime No.121 of 2022,registered with Police Station Kotwali, District Ahmednagar, forthe offences punishable under Sections 409, 420, 467, 468, 2 BA.1273-24 & anr.odt471 and 120-B read with Section 34 of the IPC and Sections 3,4, 5 of the M.P.I.D. Act.3.The complainant was the Director of the AhmednagarUrban Multi-State Co-operative Bank. His panel lost theelection in 2014. He was the account holder and a member ofthe bank. He being the Director of the bank had knowledgeabout the relevant laws and rules applicable to the banks. Hecollects the statutory audit reports and the inspection report ofthe Reserve Bank from 2015 to 2021. He studied it and foundthat the Chairman, Director, Senior Officers, a few borrowersand other related persons had misappropriated crores ofrupees and caused the loss to the bank. He did correspondencewith the Central Registrar, New Delhi, Reserve Bank, Bombayand superintendent of Police from time to time. He had filed aWrit Petition No.1224 of 2020 in the High Court for directionto the Superintendent of Police for taking action against theChairman, Director and other persons. He has given a big listof illegalities and misuse of the powers with the crimesregistered against them. In sum and substance, he has acomplaint that all the persons responsible for the bank businesshave benefited by granting loans to the persons, who are closeto them and they had interest in such loan transactions. They 3 BA.1273-24 & anr.odthave exceeded their powers and jurisdiction. He has alsoreferred to the statutory audit reports and gave the list of thepersons, who benefited by illegal acts affecting the interest ofthe depositors and the bank. He alleged that a fraud of Rs.100to 150 crores has been played and that amount was withdrawnand used for different purposes. On his report, the above crimeis registered. The Investigating Officer filed the charge sheetand summarized the role attributed to each accused. He hassummarized the allegations against the applicant that for theperiod of misappropriation, the applicant was the Director ofthe bank. From 2014 to 2018, he was a member of the loanand investment committee. He in conspiracy with the thenChairman, Director, Officers and other accusedmisappropriated the money of the bank for his own as well astheir benefit. The documents required for granting a loan werealso incorrect. The valuation report of the mortgaged propertyand financial statement of the so-called borrowers were forgedand the valuation of those properties was increased. Hedeliberately sanctioned the loan to those persons, who werenot able to repay the loan. He is responsible for the loss ofRs.291,25,61,000/- to the bank. 4 BA.1273-24 & anr.odt4.Learned counsel for the applicant sought the bail on thegrounds that the applicant was not involved in any suchillegalities. It’s the outcome of the political rivalry. Since thecomplainant had defeated the election, he dug into the pastand made a detailed investigation on his own. He neverobjected to the acts of the applicant when he was Director withhim also. He would submit that not a single depositor has acomplaint that their deposited money was not returned.However, the complainant is instrumental in sinking such areputed old bank running for more than 100 years. Thestatutory auditor never raised any objection as such. The bankwas running smoothly with the confidence of the depositors.The documents placed before the committee were satisfactory.There is no evidence, prima facie, to believe the prosecutioncase that out of granting the loan to the borrowers hebenefited. He was not named in the FIR. The FIR wasregistered in 2022 and for two years he was never called uponby the Investigating Officer. He has been arrested on26.01.2024. His Rs.25,00,000/- (Twenty-Five Lacs) is still lyingwith the bank. No depositor had complained about nonreceiving the dividends. The insurance company hasreimbursed rupees Sixty-Three Crores for protecting theinterest of the depositors. The FIR has a personal vendetta 5 BA.1273-24 & anr.odtagainst the complainant. There was about four-year delay intaking action against the applicant. The applicant is sufferingfrom various ailments and running 65. 5.He also argued that the financial condition of the bank isstill sound. The assets of the bank are more than the liabilityor the loan disbursed to the borrowers. Against some of thedefaulters, legal actions were initiated. The forensic auditreport has exonerated him. He placed the relevant pages ofthe audit report and argued that he had given the details of hisfamily, bank accounts and relevant investments to support theauditor to find out his involvement. He would submit that hehad raised the objection to the loan granted to Mr. Jaishankar.He has expressed a negative opinion. Therefore, he cannot beblamed for disbursing the loan to the said firm. He alsoreferred to clause (7) from page No.523 of the forensic auditabout forgery which reflects that the applicant was not heldresponsible for the forgery of the documents and with the cashmanagement department. He would submit that so far as theobservations regarding conspiracy are concerned, the applicantcannot be blamed for such conspiracy because there is nosubstantial material before the auditor. It is also observed inthe forensic laboratory report that no forged documents were 6 BA.1273-24 & anr.odtused to avail better credit facility. The recovery proceedingsare taken and the ITAT has not rejected any claim for want ofproper documentation. The bylaws of the bank were notviolated. No bogus loan was identified.6.So far as the conspiracy is concerned, it is just an opinionof the auditor. So, it does not bind the applicant at thisjuncture. So far as sanctioning the financial facility or treatingthe asset as genuine for primary/collateral security has noconcern with the applicant. The observations recorded in theforensic audit report blamed especially the then Chairman ofthe bank for not accepting the negative reports. The auditor ofthe forensic audit has also specifically recorded that no suchbogus loans were identified. He also specifically observed thatthe applicant has no financial transactions with the borroweraccount nor his family was found to have any financialtransactions with the borrowers. When no such material wasthere to believe that the applicant had a financial transactionwith the borrower, the opinion of the forensic auditor ofcriminal breach of trust is unfounded. Even after having suchspecific findings of the auditor in the forensic audit report, theInvestigating Officer incorrectly opined that the applicant wasthe beneficiary of granting a loan without following due 7 BA.1273-24 & anr.odtprocedure of law and accepted the forged document. Referringto the financial position of the bank, he would submit thatthere was absolutely no reason for any of the bankingauthorities to appoint the liquidator.7.In the sum and substance, he would submit that the caseis based upon the forensic audit report. However, there was nomaterial before it to believe that the loan documents wereforged and the applicant benefited by granting the loan to suchpersons. He prayed for a grant of bail. 8.Per contra, learned counsel Mr. Gholap for the depositorhas vehemently argued that the applicant has antecedents. Onecrime was registered against him when he was the Chairman ofthe loan committee. Another crime was registered against himfor the offences punishable under the Petroleum Act. Hewould submit that he has a tendency to commit the crimeagain and again. He also argued that the applicant with otherDirectors and the Chairman had manipulated the bank recordsto hide the illegalities. Due to their acts, the NP level of thebank went to such an extent which resulted in the cancellationof the bank license. Due to the acts of the applicant, a largenumber of depositors have had financial setbacks. The age-oldpersons who are the depositors have lost hope of their 8 BA.1273-24 & anr.odtlivelihood. The illegal entries were taken in the bank accounts.They disbursed the loan to the fake borrowers. They havereceived the money from such borrowers as a gratification. Theamount was illegally credited to the accounts of the relatives ofthe Chairman and it was used for purchasing immovableproperties and for clearing dues of another bank. He furtherargued that the hard-earned money of the depositors had beensunk due to the acts of the applicant and his associates. Hiscustodial interrogation is necessary as the crime is serious. Heis the prime accused. If he is granted bail, he will dispose ofthe evidence and may abscond. He would vehemently arguethat the modus operandi of the applicant with his antecedentsis relevant to show the gravity of the offence. If he is releasedon bail, it would cause serious prejudice to the victim of thecrime in question. He would submit that this MPID Act wasmeant to protect the interest of the depositors. Though heargued that except for one of the depositors huge amount oflakhs of rupees was deposited with the bank, no pleading assuch in his application. The liquidator even did not return adeposit of Rs.500/- to one of the depositors. The liquidator didnot give the money towards the insurance. Hence, hisapplication may be rejected. 9 BA.1273-24 & anr.odt9.The marathon arguments of the respective learnedcounsels reveal that after the detailed investigative report ofthe EX-Director of the bank, the crime was registered.Considering the allegations levelled against the persons namedin the FIR, the forensic audit was done and based on thatreport, various persons have been arraigned as accused. It hasbeen alleged against the applicant that sanctioned the loan topersons who were not eligible and accepted the forgeddocuments. However, the forensic audit report reveals that hehad objected to the loan application. But his objection wasnegatived by the then Chairman of the bank and the financialfacility was granted treating the assets of the borrower asgenuine/primary/collateral security. As far as the forgery isconcerned, a forensic audit report shows that the documentswere not forged. He did not find the financial involvement/transactions in/with any of the borrower accounts during theperiod of assignment. No funds movement was observed whichmight have been received from borrowers MUCBL. The bankdetails of the applicant and his family members were alsofurnished. The auditor did not find anything adverse. However,the auditor recorded the observations that a conspiracy wasplotted by all the office bearers and employees. Was theapplicant a member of the conspiracy is the matter of
Decision
11 BA.1273-24 & anr.odt(a)The applicant should not interfere with thebusiness of the liquidator.(b)He should not leave the place of hisresidence without the leave of the Court.(c)He should surrender his passport with theCourt, if any.(d)He should not contact the other officebearers, Chairman, Directors and any of thebank officials, till the trial is concluded,unless he is entitled to.(iii)Criminal application No.2973 of 2024 standsdisposed of. (S. G. MEHARE, J.)...vmk/-