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Judgment
N. Ananda, J.—The petitioner is arrayed as accused No. 3 in Spl.C.C. No.65/2011 registered for offences punishable under Sections 120-B r/w 420, 467, 468 and 471 IPC and also for offences punishable under Sections 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988.
I have heard Sri. Kiran S. Javali, learned counsel for petitioner and Sri. P.M. Nawaz, learned counsel for first respondent.
The substance of allegations made in the final report against petitioner arrayed as accused No. 3 before the court below is as follows:
"6 (i) Shri R. Paul Raj (A-1) was working as Manager (Technical), Union Bank of India, SSI Finance Branch, Bangalore and Shri Maruthi Kumble (A-2), was working as Asst. General Manager and Branch Head, SSI Finance Branch, Yeshwantpur Industrial Suburb, Bangalore, had entered into a criminal conspiracy with Smt. Padmaa K Bhat (A-3), Proprietor, M/s. Neo Sharp Engineering Technologies, No. 204/5, 1st Cross, Muthachari Industrial Estate, Mysore Road, Bangalore in the matter of sanction and disbursal of Mortgage Loan, Housing Loan, Term Loan and Cash Credit (Hypothecation).
(ii) In furtherance of the aforesaid conspiracy, Smt. Padmaa K. Bhat (A-3) had availed Union Mortgage Loan of Rs. 40 lakhs against the collateral security of the property held at No. 13, Survey No. 40/1, Nagadevanahalli, Kengeri Hobli, Bangalore. The housing loan of Rs. 27.28 lakhs held in the name of Smt. Padmma K. Bhat (A-3), Proprietor of M/s. Neo Sharp Engineering Technologies, Bangalore, at Vijaya Bank, Residency Road Branch, Bangalore was taken over against the security of the property held at No. 488, 4th Cross, RR Layout, Nagadevanahalli, Jnanabharathi Post, Bangalore.
(iii) Smt. Padmma K. Bhat (A-3), Proprietor of M/s. Neo Sharp Engineering Technologies, No. 204/5, 1st Cross, Muthachari Industrial Estate, Mysore Road, Bangalore had submitted another application Rs. 192 lakhs for taking over of the existing liabilities of M/s. Neo Sharp Engg. Technologies held at Bank of India, Bidadi Branch, Bangalore and additional Term Loan of Rs. 320 lakhs and Cash Credit of Rs. 210 lakhs for the purchase of machineries/equipments for the setting up of a manufacturing unit. Shri R. Paul Raj (A-1), Manager (Technical), Union Bank of India, SSI Branch, Bangalore and Shri Maruthi Kumble (A-2), Asst. General Manager and Branch Head, Union Bank of India, SSI Branch, Bangalore had recommended for sanctioning of loan without carrying out due diligence. A total of Rs. 622 lakhs was sanctioned on 22.12.2008 against the primary security of raw materials and collateral security of residential property held at No. 488, 4th Cross, RR Layout, Nagadevanahalli, Jnanabharathi Post, Bangalore and 2-other properties.
(iv) Smt. Padmma K. Bhat (A-3) had availed loans in the name of M/s. New Sharp Engineering Technologies, No. 204/5, 1st Cross, Muthachari Industrial Estate, Mysore Road, Bangalore and M/s. Need Concept Marketing Pvt. Ltd., No. 11/4, 80 ft. Ring Road, RR Layout, Jnanabharathi Post, Bangalore from M/s. Bharat Co-op. Bank Ltd., KH Road, Bangalore; M/s. Karnataka Bank Ltd., Vijayanagar Branch, Bangalore; Vijaya Bank, Moodalapalaya Branch, Bangalore; M/s. Mahila Coop. Bank Ltd., J.P. Nagar, Bangalore; M/s. Karnataka State Finance Corporation, Jayanagar Branch, Bangalore; Corporation Bank, RPC Layout Branch, Bangalore and M/s. HDFC Bank Ltd., Kasturba Road Branch, Bangalore. Smt. Padmma K. Bhat (A-3) had concealed her existing liabilities and had fraudulently availed loan from Union Bank of India, SSI Branch, Bangalore and had offered properties with the existing liabilities as collateral security.
(v) Smt. Padmma K. Bhat (A-3) had fraudulently submitted fake/fabricated bills from M/s. Sri Devi Machine Tools, No. 5, 1st Floor, Sachin Complex, Maruti Nagar, Opp. Garden Villas, Nagarbhavi Main Road, Bangalore and M/s. Maruti Engineering Industries, No. 4, 100 ft. Road, Maruthi Nagar, Jnanabharati Post, Bangalore without having purchased machineries/equipments reflected therein. These were fictitious/non-existing firms and they had not supplied machineries/equipments as reflected in the bills/invoices/quotations. Smt. Padmma K. Bhat (A-3) and others had diverted the load amount thereby causing a loss of Rs. 536 lakhs to Union Bank of India, SSI Branch, Yeshwanthpur, Bangalore and corresponding gain for themselves.
That, Smt. Padmma K. Bhat (A-3) had borrowed from M/s. Bharat Co-op. Bank (Mumbai) Ltd., KH Road, Bangalore; Vijaya Bank, Moodalapalaya Branch, Bangalore; M/s. Karnataka State Finance Corporation, Jayanagar Branch, Bangalore; M/s. HDFC Bank Ltd., Kasturba Road Branch, Bangalore; M/s. Karnataka State Khadi and Village Industries Board, Bangalore and M/s. Karnataka Bank Ltd., Vijaya Nagar Branch, Bangalore and had fraudulently concealed the said information from Union Bank of India, SSI Finance Branch, Yeshwantpur, Bangalore. The aforesaid accounts were regular/irregular on the date of submission of application on 08.09.2008. 2-officials of Union Bank of India, SSI Finance Branch, Bangalore had not collected credit information from all the banks/financial institutions for assessing the existing liabilities.
That, Shri R. Paul Raj (A-1) had carried out the pre-sanction inspection of the manufacturing premises of M/s. New Sharp Engg. Technologies, No. 204/5, 1st Cross, Muthachari Industrial Area, Panthrapalya, Mysore Road, Bangalore and had submitted a report dated 27.09.2008. He had wrongly mentioned in his inspection report that M/s. Neo Sharp Engineering Technologies has installed power connection of 65 HP and an additional connection of 25 HP is being obtained from M/s. Bangalore Electricity Supplies Co., Bangalore and the same is sufficient for meeting additional power requirements. However, there was a power connection of 35 HP as on 27.09.2008 and additional power connection for 30 HP was installed later on 28.04.2009 and the available power supply were not sufficient for the manufacturing activity. 2-quotations submitted along with the loan applications were for supply of PLC Control Systems. However, he had reported that the firm is proposing to install CMC High Speed Power Press 63, CMC High Speed Power Press 100 and CMC High Speed Power Press 160. He had submitted the pre-sanction inspection report favourable to the borrower while concealing true picture on the ground. He had falsely reported that Shri Venkataramana Bhat, Proprietor, M/s. Nikhara Electronix and Allied Technics, No. 140, Vinayaka Layout, Ullal Main Road, Jnanabharathi Post, Bangalore, has offered to transfer purchase orders on his hands to M/s. Neo Sharp Engg. Technologies because of his inability to meet the production requirements. He has wrongly mentioned in his due diligence report that he had carried out verification of statement of account of the loan accounts of M/s. Neo Sharp Engg. Technologies held at Bank of India, Bidadi Branch, Bangalore and the same are satisfactory. He had simply relied on false/fabricated statement of account of loan A/c submitted by Smt. Padmaa K. Bhat (A-3) without carrying out physical verification of the records of Bank of India, Bidadi Branch, Bangalore.
Thus, Shri R.Paul Raj (A-1), the then Manager (Technical), Union Bank of India, SSI Finance Branch, Bangalore and Shri Maruthi Kumble (A-2), the then Asst. General Manager and Branch Head, Union Bank of India, SSI Finance Branch, Bangalore had entered into a criminal conspiracy with Smt. Padmaa K. Bhat (A-3), Proprietor, M/s. Neo Sharp Engineering Technologies, Bangalore; Shri Pape Gowda (A-4), Proprietor, M/s. Sri Maruthi Engineering Industries, Bangalore (Rural); Shri Prasanna Kumar (A-5), Proprietor, M/s. Sridevi Machine Tools, Bangalore and Shri K Ravi Kumar Bhat (A-6), Proprietor, M/s. Chandra Electronics, Bangalore in the matter of sanction and disbursal of various credit facilities. In furtherance of the said criminal conspiracy, Smt. Padmaa K. Bhat (A-3) had availed Mortgage Loan, Housing Loan, Term Loan and Cash Credit (Hyp) in her name and in the name of M/s. Neo Sharp Engg. Technologies, Bangalore. She had submitted fake/fabricated bills/invoices regarding purchase of machineries/equipments and had diverted the loan amount released against the same with the help of Shri K. Ravi Kumar Bhat (A-6), Proprietor, M/s. Chandra Electronics, Bangalore; Shri Pape Gowda (A-4), Proprietor, M/s. Sri Maruthi Engineering Industries, Bangalore (Rural); Shri Prasanna Kumar (A-5), Proprietor, M/s. Sridevi Machine Tools, Bangalore thereby causing loss of Rs. 536.70 lakhs (as on 30.06.2009) to Union Bank of India, SSI Finance Branch, Bangalore and corresponding gain for themselves. The aforesaid acts of Shri R.Paul Raj (A-1), the then Manager (Technical), Union Bank of India, SSI Branch, Bangalore and others, constitute offences punishable u/s. 120-B r/w 420, 467, 468 and 471 IPC and Sec. 13(2) r/w 13(1)(d) of the PC Act, 1988 and substantive offences thereof."
Sri. Kiran S. Javali, learned counsel for petitioner would submit that, if there was no verification of documents by the officials of Union Bank of India before the loan was taken over by Union Bank of India, petitioner cannot be held responsible for the lapses committed by the officials of the bank. The loan availed by the petitioner has been fully secured and one of the properties of petitioner was brought to sale to satisfy part of the debt adjudicated by the Debt Recovery Tribunal. In the circumstances, allegations made in the final report that petitioner has committed aforestated offences cannot be accepted.
The law is fairly well settled, while considering the petition under Section 482 Cr.P.C., this court will have to accept the contents of investigation records on their face value. If the court finds that allegations made in the final report are inherently improbable, absurd or no prudent man would believe the contents of investigation records, the final report may be quashed.
In the case on hand, the allegations made against petitioner are supported by documents. At this stage, they cannot be called as absurd or inherently improbable.
There are no reasons to quash the final report. The petition is dismissed. However, it is made clear that dismissal of this petition will not come in the way of petitioner to plead for discharge if the charges are not yet framed.