NDCC bank scam | Misappropriation of bank funds a well-planned strategy: Court convicts Cong MLA, 4 others

NDCC Bank operated as a co-operative in Nagpur, governed by provisions of Maharashtra Cooperative Societies Act, with directives issued by Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD).

Kedar was its chairman between 1999 to 2002. The bank’s general manager Ashok Chaudhary and chief accountant Suresh Peshkar were also pronounced guilty. Allegations against them were related to irregularities in transactions of the bank, which came to light during an audit first by NABARD, and then another audit on directions of the Cooperative Commissioner in 2002.

“The object and purpose of the cooperative sector is to enhance the status of the economically marginalised sector of society. District central cooperative banks are established to support the marginalised and the farmers, to assist them with finances. Therefore, the money in the bank belongs to all of them. The bank holds the same in a public trust. Accused no. 1 (Kedar) and 2 (Chaudhary) were entrusted to invest this amount in the manner prescribed by law,” the court said, adding that they breached this trust. The court said that people holding higher and responsible posts are vested with the responsibility to manage financial affairs to ensure not a rupee is wasted.

“Therefore, breach of trust by such responsible persons invites this Court to deal with the accused persons with steel hands,” it said.

The prosecution had alleged that an amount of Rs 153.04 crore was invested on behalf of NDCC Bank towards purchase of government securities but without approval sought from the Board of Directors. The audits also expressed doubts on whether they were purchased as no original receipts were submitted. The court said that evidence showed these transactions to be false and caused ‘complete erosion of funds’ of the bank.

A loan of Rs 40 crore given to a corporate entity was also under probe as no permission was taken, and it was passed showing urgency based on approval of Kedar. The accused had claimed no wrongdoing, stating that there could have been unintentional irregularities as there were no financial experts appointed by NABARD despite requests on behalf of NDCC Bank. The court refused to accept this contention stating that Kedar had the power to appoint such experts. The court said that facts showed it was a ‘well-planned strategy’.

“If a person gambling wins money on one or two occasions does not mean gambling is legal. Likewise, the question herein is whether the accused were acting within their jurisdiction and if they had authority to make the alleged investment, and whether it was done in accordance with law. Definitely, the answer is ‘No’,” the court said.rt said.