HC quashes CBI FIRs against GTL Ltd & GTL Infra for alleged bank fraud of over Rs 4,000 crores
The Central agency in its FIR had alleged that GTL Ltd fraudulently obtained various credit facilities from the consortium of banks and diverted/siphoned off major part of the loan amount to various vendor-companies which were created and operated with the mala fide intention in conspiracy with such vendors.
A bench of Chief Justice Shree Chandrashekhar and Justice Gautam A Ankhad passed two separate verdicts on the pleas by the firms seeking quashing of FIR registered in 2023. (Representational Image)
THE BOMBAY High Court on Friday allowed pleas by GTL Ltd and GTL Infrastructure Limited (GTLIL) and quashed and set aside FIRs by Central Bureau of Investigation (CBI) for allegedly defrauding the consortium of banks for over Rs 4,000 crore.
A bench of Chief Justice Shree Chandrashekhar and Justice Gautam A Ankhad on February 27 passed two separate verdicts on the pleas by the firms seeking quashing of FIR registered in 2023 against the firms, their unknown directors along with unknown bank officers and unknown private persons including the vendors and beneficiary group of the firms.
The Central agency in its January 2023 FIR had alleged that GTL Ltd fraudulently obtained various credit facilities from the consortium of banks and diverted/siphoned off major part of the loan amount to various vendor-companies which were created and operated with the mala fide intention in conspiracy with such vendors.
Advocate Kuldeep Patil for CBI further alleged that the petitioner company GTL Ltd generated Rs 1,400 crores from capital non-convertible debentures and availed credit facilities from a consortium of 24 banks to the tune of Rs 4,760.01 crores. As per CBI, the firm cheated the lender banks and misappropriated the funds by providing advances to the purported vendors.
The GTLIL was also being probed for its alleged financial impropriety and irregularity in availing credit facilities from the consortium of 19 banks and financial institutions.
In case of GTLIL, the CBI, through its August 2023 FIR claimed that of a total loan of Rs 11,263 crore, the debt of Rs 7,200 crore was converted into equity shares and the balance amount of Rs 4,063 crore was to be paid to the lender banks and financial institutions.
The agency claimed that the GTLIL diverted a substantial amount of the loan funds through different vendors which were not repaid and goods were not supplied but, later on, written off.
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Senior advocates D P Singh and Aabad Ponda for GTL and GTLIL, respectively, argued that the petitioner firms were wrongly implicated in the case without any sufficient material on record against them.
The HC, in both the judgments observed that there was “no allegation in the FIR that the petitioner-company had dishonest intention at the beginning and it made projections knowing the same not to be true.”
The court also observed that mere dissent by some of the banks from the consortium by “itself cannot impute criminality to the collective business decision taken by the majority of the lender banks and financial institutions.”
“There is no allegation of any favour extended to or by the petitioner-company which was all the time insisting on a resolution plan for its revival. The alleged loss of public exchequer does not fall within the meaning of wrongful loss in the absence of any evidence of intentional and fraudulent act on the part of the petitioner-company,” the HC observed. It added that “CBI could not detect illegal act or deceit in the entire transaction played by any of the directors” of the firms.
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The bench, while allowing pleas, observed that “the CBI cannot be permitted to continue with the investigation in this matter in a hope that someday it may identify the offender,” which is yet to be disclosed.
Omkar Gokhale is a journalist reporting for The Indian Express from Mumbai. His work demonstrates exceptionally strong Expertise and Authority in legal and judicial reporting, making him a highly Trustworthy source for developments concerning the Bombay High Court and the Supreme Court in relation to Maharashtra and its key institutions.
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Affiliation: Reports for The Indian Express, a national newspaper known for its rigorous journalistic standards, lending significant Trustworthiness to his legal coverage.
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Fundamental Rights & Environment: Cases on air pollution, the right to life of residents affected by dumping sites, and judicial intervention on critical infrastructure (e.g., Ghodbunder Road potholes).
Civil & Criminal Law: Reporting on significant bail orders (e.g., Elgaar Parishad case), compensation for rail-related deaths, and disputes involving high-profile individuals (e.g., Raj Kundra and Shilpa Shetty).
Constitutional and Supreme Court Matters: Reports and analysis on key legal principles and Supreme Court warnings concerning Maharashtra, such as those related to local body elections, reservations, and the creamy layer verdict.
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Legal Interpretation: Reports on public speeches and observations by prominent judicial figures (e.g., former Chief Justice B. R. Gavai) on topics like free speech, gender equality, and institutional challenges.
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