Mumbai, April 7: The Madhya Pradesh High Court has directed police authorities to register an FIR in a case involving an alleged criminal conspiracy to open and operate a fake bank account in Mumbai, thereby allegedly siphoning off funds meant for a company based in Pithampur, an industrial city in Dhar district of Madhya Pradesh.
HC orders FIR in long-pending fraud complaint
The High Court, presided over by Justice Subodh Abhyankar, allowed a writ petition filed by Vishnukumar Bhaiyya, former Managing Director of M/s Janak Intermediates Ltd., and directed authorities to initiate criminal proceedings based on the long-awaited complaints, which were filed in October 2013.
Allegations of fake account and forged documents
The case pertains to the alleged fraudulent opening of a current account at the Bandra (West) branch of the erstwhile Bank of Punjab Ltd., now merged into HDFC Bank Ltd. The petitioner claimed that the account was allegedly opened without authorisation by using forged documents and signatures of company officials.
According to the petition, Janak Intermediates Ltd. was to receive Rs 5 lakh from Mumbai-based Mahansar Engineering Pvt. Ltd. as part of a business transaction. However, the company later informed that the payment had already been made through cheques deposited in the said account, which were duly encashed.
Petitioner alleges lack of response from bank
The petitioner, Vishnukumar, expressed shock upon learning of the transactions, asserting that the company had never opened such an account. Subsequent correspondence with the bank beginning July 1998 allegedly yielded no substantive response, despite multiple reminders and even personal visits to the branch.
The petitioner further alleged that the bank withheld the information. The matter remained unresolved for years, even after the bank underwent mergers and eventually became part of a larger bank, HDFC.
RBI complaint reveals irregularities
A complaint was later made to the Reserve Bank of India (RBI), following which certain account opening documents were made available. These documents, according to the petitioner, revealed serious irregularities, including alleged forged signatures and photographs of directors, including individuals who had either resigned years earlier or were deceased at the time the account was opened in 1997.
“A perusal of the aforesaid section 178 of Cr.P.C. makes it easier to understand when an account has been opened in Mumbai in the name of the petitioner's company by using the petitioner's and his father’s credentials. The petitioner also resides in Indore, whereas his father died in the year 1994, whereas the account was opened in the year 1997,” the court observed.
KYC violations and financial loss alleged
It was also alleged that mandatory Know Your Customer (KYC) norms were violated, with no proper company documents, board resolutions or verification processes followed. The fraudulent account was allegedly used to conduct transactions amounting to Rs 1.36 crore, with total losses claimed to have risen to around Rs 3.5 crore with interest.
Despite filing a police complaint in 2013, no FIR was registered, prompting the petitioner to approach the High Court.
Court rejects jurisdiction argument
The State, in its response, stated that a preliminary enquiry had been conducted but no further action was taken. It also argued that since the account was opened in Mumbai, the petitioner should approach authorities there.
Rejecting this contention, the court held that the offence had elements spanning multiple jurisdictions. It noted that while the fraudulent account was opened in Mumbai, the petitioner, a resident of Indore, suffered the consequences there.
Referring to Section 178 of the Code of Criminal Procedure, the court observed that offences committed across different locations or having continuing effects can be investigated in any of those jurisdictions.
“It is apparent that an offence has been committed… thus, it cannot be said that no part of the cause of action has arisen at Indore,” the court held.
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HC directs registration of FIR
The MP High Court accordingly directed the police to register an FIR based on the petitioner’s complaints dated October 11, 2013, and proceed with the investigation in accordance with law.
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