THE BOMBAY High Court on Thursday directed the Economic Offences Wing (EOW) of the Mumbai Police to file an FIR into the Maharashtra State Cooperative Bank (MSCB) scam, in which former deputy chief minister Ajit Pawar and 76 others have been accused of causing financial losses to the tune of Rs 1,000 crore to the MSCB between 2007 and 2011.
The respondents in the case included 37 directors of the bank, including NCP leader Pawar and PWP leader Jayant Patil.
In their 84-page order, Justice S C Dharmadhikari and Justice Sandeep Shinde observed that despite an inspection report of the National Bank for Agriculture and Rural Development (NABARD) for the year 2009-10 and chargesheet filed by a quasi judicial inquiry commission under the Maharashtra Cooperative Societies (MCS) Act showing “glaring irregularities”, the police had not filed an FIR in the case.
Directing the EOW to file an FIR within five days, the judges said that the “report of inquiries/inspection constitutes credible information and/or material which, prima facie, discloses the commission of cognizable offences punishable under the Indian Penal Code and other penal laws”.
Andheri resident Surinder Arora had filed a complaint with the EOW in the case in 2015. He had later filed a criminal public interest litigation in the HC, urging it to direct the police to file an FIR.
Addressing the “moot question” of whether or not the investigating officer was right in opining that the material in the case does not disclose a cognisible offence, the court said, “The state in this case has neither produced station diary, nor filed a counter reply, for satisfying our judicial conscience that a preliminary inquiry was held before reaching a conclusion that the complaint of the petitioner and report of NABARD has not disclosed commission of cognizable offence. Thus, apart from the oral assertion of Shri (Shrikant) Paropkari (deputy commissioner of police, EOW) there is nothing on record to justify the conclusion.”
In view of the deficiencies pointed out in the 2009-10 annual inspection report of NABARD, the RBI had in May 2011 directed to supersede the MSCB board of directors and appoint an administrator to look after the affairs of the bank.
“At the relevant point of time, the bank was managed by the board of directors consisting of 48 members, most of whom were MLAs and MPs of the ruling party. The petitioner alleges that due to the irregularities of the members of the board of directors, the bank had showed both, negative growth and development,” the court noted.
Relying on NABARD report and chargesheet filed under MCS Act by the authorised officer of the International Banking Division, Co-operative Societies, the court observed: “The inspection report (of NABARD), therefore, not only points out the discrepancies or irregularities committed by the respondent bank and its directors but also point out that the trust reposed in the bank and its officers has been brazenly breached. The report, prima facie discloses that the bank records were forged and the profits were wrongly shown by abusing the Income Recognition and Asset Clarification (IRAC) norms.”
“The report further discloses NPA accounts were intentionally camouflaged, in as much as, the amount sanctioned and disbursed to units wherein the directors were having interest were not shown in the periodical reports of the bank with a view to safeguard interest of the directors.”
The court also observed that then directors, while either acting as a board, committee or executive committee member, were entrusted with the funds of the banks and had in some cases “sanctioned illegal loans and in others, sold out the properties at throwaway prices…”