Justice K. Lakshman of Telangana High Court dismissed a batch of criminal petitions filed by three persons seeking to quash First Information Report (FIR) and Enforcement Case Information Report (ECIR) issued by CBI and ED respectively against them in a bank loan fraud involving ₹182.99 crore.
Delivering the verdict, the judge observed the petitioner Ishoo Narang, Chandulal Patel, Rudra Raju Srinivas Shah and M/s Kyori Oremin Limited represented by its managing director Ishoo Narang prima facie appeared to be economic offenders. The Supreme Court in different judgements categorically held that it was not proper for the High Court to exercise power to quash FIRs in economic offences.
‘It is nothing but stalling investigation/enquiry initiated by the authorised officer under the provisions of Prevention of Money Laundering Act, the verdict said. Referring to this verdict, Justice K. Lakshman noted that the apex court had also ruled that ‘quashing the criminal proceedings is called for only a case where the complaint does not disclose any offence, or is frivolous’.
The payments made by the petitioners under One Time Settlement (OTS) was only a fraction of the total dues they owed to different banks. “The said money ultimately belongs to the public and tax payers. Thus, prima facie, the petitioners have committed fraud only against one or two banks, but against the public in general,” the judgement said. The company’s managing director and two directors availed credit facilities under multiple banking arrangements for coal trade primarily from Central Bank of India, State Bank of India, Bank of Maharashtra, Bank of Baroda and ICICI bank.
While the total principal amounts was ₹134.18 crore, with interests the petitioners owed ₹241.93 crore to the banks. Out of this total dues, they paid ₹61.94 crore as part of OTS. Still, they owe ₹182.99 crore to the banks. As the petitioners defaulted payments, the banks approached the CBI which issued a FIR against them. Based on CBI report, the ED authorities issued an ECIR.
The bankers contended that the petitioners purposefully defaulted repayment of loan and tried to get away by paying a small percentage of the total dues under OTS. Such economic frauds adversely affect the financial and economic well-being of the nation and have implications which lie beyond the domain of a mere dispute between the petitioners and the banks, the judge observed.
