12 years on,court says it can’t try ex-staff of private bank for graft

The court of Special CBI Judge V K Maheshwari last Thursday passed an order transferring cases filed by the CBI in 1995 to the Chief Metropolitan Magistrate’s court against H S Harnotia,the former chairman of Parishad Cooperative Bank in Karol Bagh,and R P Nagar,the bank’s former manager,and several other individuals.

The cases were based on two FIRs lodged on the basis of complaints against Harnotia and Nagar. It was alleged that they had connived with several others to cheat the bank and misuse funds for their personal gain,causing a loss of over Rs 1 crore to the bank between 1992-93.

The two bank employees were accused of causing a loss of over Rs 41 lakh and more than Rs 67 lakh in separate cases of fraud.

The FIRs were filed in 1995,while the court twice framed charges against the accused in August 2000 and August 2002.

Last week,the court declined to “go into the merits of the case” since the accused were not “public servants”,they could not be tried in accordance with the Prevention of Corruption Act.

The CBI had charged Harnotia and Nagar with criminal conspiracy,cheating and forgery — provisions in the Indian Penal Code (IPC) and the Prevention of Corruption Act.

The prosecution had alleged that the bank officials could be tried by the special anti-corruption court because they were “public servants” when they allegedly committed the fraud.

After 56 witnesses were examined in the twin cases over the past decade,the Special Judge said there was no averment made by the CBI chargesheet whether the cooperative bank had received government aid or had been under government control or had discharged a “public duty”.

“These are necessary to claim that an organisation is a ‘public organisation’ and its employees are ‘public servants’ liable to be prosecuted under the anti-corruption laws for any fraud. It was a private bank in which only the members of the cooperative can open accounts or obtain loans,” the court said.

In 2009,the Special Judge said,the court relied on the Banking Regulations Act and ruled that Harnotia was not a “public servant”.

“It has been held that Harnotia and Nagar are not public servants. This court of Special Judge has no jurisdiction to try this case under the provisions of the Prevention of Corruption Act,1988,” he said.