Mumbai, March 31: The Bombay High Court has dismissed a plea seeking to make Punjab National Bank (PNB) an accused in the multi-crore fraud case involving the Gitanjali Group, observing that the bank is itself a victim of the alleged scam.
Justice Shivkumar Dige, while rejecting the application filed by accused Nitin Shahi, held that the alleged fraud was committed against PNB by certain bank officials in connivance with members of the Gitanjali Group of Companies. “In fact, PNB is a victim, so PNB cannot be added as an accused,” the court noted.
Court imposes costs on accused
The court also imposed costs of Rs 10,000 on Shahi, directing the amount to be paid to the Legal Services Authority of the High Court.
Shahi, who is accused number eight in the case, had approached the HC, challenging the 2020 order of the special CBI court rejecting his similar plea seeking to add PNB as an additional accused.
His advocate argued that since the chargesheet alleged a conspiracy involving bank officials and Gitanjali Group staff, the bank itself should also be held accountable and not merely its employees.
CBI opposes plea, cites losses
Opposing the plea, the Central Bureau of Investigation (CBI) submitted that PNB had suffered a wrongful loss exceeding Rs 7,000 crore in the Gitanjali Group transactions alone.
The agency argued that the bank and the Gitanjali Group could not be treated on the same footing, as the latter was the beneficiary of the fraudulent transactions while the bank incurred losses.
The CBI further clarified that its chargesheet names individual bank officials who allegedly conspired with Gitanjali Group employees to defraud the bank, while senior management personnel of the company have also been arraigned for their role in the conspiracy.
Court agrees with probe agency
The court agreed with the CBI and noted: “Admittedly, fraud is committed with PNB by the officials of PNB and Gitanjali Group of Companies.”
Fraud details and case status
On February 15, 2018, the CBI registered an FIR based on a complaint by a deputy general manager of PNB in Mumbai. The complaint alleged that certain bank officials, along with others, cheated the bank by fraudulently issuing Letters of Undertaking (LOUs) and Letters of Credit (LCs), causing losses initially estimated at over Rs 5,000 crore. Subsequent complaints revealed additional frauds amounting to over Rs 2,000 crore between 2013 and 2017.
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The trial in the case is currently pending before the special CBI court. The High Court’s order was passed on March 18 and made available on March 30.
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