A Principal Special Judge for CBI cases here on Wednesday sentenced the former Chairman and Managing Director of the nationalised Indian Bank, M. Gopalakrishnan (77), to one year’s rigorous imprisonment (RI) and slapped a fine of Rs.1.50 lakh on him in a case relating to causing loss to the bank to the tune of Rs.3.26 crore.

The Judge, S.Malathi, also awarded one year RI to the then Zonal Manager of the bank, A.V.Shanmugasundaram, and two years RI to the Managing Director of a private construction company, S.Dhanasingh, in the case. A total fine of Rs. three lakh was imposed on the two.

The Judge suspended the jail terms for a month to enable the convicted persons to file appeals.

This is the third case in which Gopalakrishnan, against whom 20 cases were registered by the CBI in the mid-1990s, is being convicted in a corruption case. In April 2009, he was sentenced to undergo 14 years’ rigorous imprisonment by a special CBI court in Chennai. The judge awarded two seven-year terms to run one after another.

He is out on bail pending appeal.

While four cases were investigated by Anti-Corruption Branch, the others are with the Economic Offences Wing (EOW) and the Bank Security and Fraud Cell (BSFC). All the cases are charge-sheeted and pending trial, agency sources said.

Gopalakrishnan was considered close to influential political leaders during his high-profile tenure. He was prominently covered by Doordarshan almost on a daily basis in news bulletins, giving an impression to viewers that he was highly popular. However, his arrest and subsequent investigation by the CBI led to closer scrutiny of the unusually large number of high-value loans he generously sanctioned to prominent personalities.

In the latest case to end in conviction, the offence was committed between 1993 and 1995. The prosecution case was that Akilam Constructions Pvt. Ltd., Chennai, represented by its Managing Director Dhanasingh, applied to the bank’s Alwarpet branch here for a secured overdraft facility to the tune of Rs. five crore for purchasing 200 acres at Mamallapuram for developing them as farm lands and selling them. Pursuant to a conspiracy to cheat the bank, the bank branch’s Chief Manager, K. Sundaramurthy (died during course of trial), by abusing his official position forwarded the proposal to the regional office recommending sanction.

Shanmugasundaram abused his official position and sent a letter to Gopalakrishnan directly recommending the proposal the same day, August 28, 1995. The Chairman conveyed his approval for sanction without verification. Based on the sanction letter, Sundaramurthy released a temporary OD facility of Rs.3.26 crore to the construction company by accepting inadequate collateral security and disregarding the terms and conditions of sanction.

Dhanasingh, who availed himself of the credit facility of Rs.3.26 crore, diverted Rs.2.86 crore to the account of one M/s Allengar Foundation, represented by K.Anandan Pillai (who also died during the course of trial) without using the loan amount for which it was sanctioned. Pillai, in turn, used the sum to settle his dues in his account in IndBank Housing Limited.

Thus, the bank sustained a loss of Rs.3.26 crore and Dhanasingh and Anandan Pillai obtained pecuniary advantage.

The Judge held that the prosecution had established its case by adducing reliable and satisfactory evidence. As Sundaramuthy and Anandan Pillai had died, the charges against them abated.

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