Mumbai, March 16: The special MP and MLA court, while accepting the closure report submitted by the Economic Offences Wing (EOW) of Mumbai police in the alleged Maharashtra State Cooperative (MSC) Bank fraud case valued at Rs 25000 crores, has said that records do not demonstrate the commission of a cognizable offence. Petitioner Surinder Mohan Arora told FPJ that he will file an appeal against the order accepting the closure report.
Court accepts EOW closure report
The relief comes months after the death of late former deputy chief minister Ajit Pawar, whose role was also under probe as being on the board of directors at a relevant time.
The special judge Mahesh K. Jadhav had, on February 27, accepted the closure reports filed by the EOW and rejected all the protest petitions filed by activist Surinder Mohan Arora, Anna Hazare and others.
In its 127-page order, which was released on Monday, the special court said, “There is no prior meeting of minds or agreement between the directors to do an illegal action by illegal means. Merely irregularity or lapses cannot be converted to offences. There is absence of dishonest or fraudulent intention on the part of the accused.”
“There is absence of dishonesty or fraudulent or misappropriation of property for own use which is entrusted with the public servant. The dishonest or fraudulent intention is missing. There is no document which is called to be a forged one,” the court further said.
Probe into loan sanction and sugar factory auctions
In 2019, the EOW had taken up a probe into the allegations of irregularities in the sanction of loans and auction of sugar factories which could not repay the loan during the period from 2007 to 2017, as per the direction of the Bombay High Court. The agency had named all the board of directors of the bank as accused in the case without mentioning any specific name. However, Pawar was one of the directors at the relevant time.
The agency, after the probe, submitted its first closure report in September 2020 claiming that the team probing the allegations did not find any evidence of criminality in the case.
Later, based on the objections raised by Arora, Anna Hazare and others, the EOW again took up the case for further investigation. However, even after the further investigation, the agency came to the conclusion that no cognizable offence has been made out.
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Court finds no evidence of criminal intent
The court has said that, “There is no evidence on record which shows that the investigation carried by the investigating agency is designed or negligent. No omissions were found in the said investigation. It does not seem to be a tempting evidence or tailored investigation.” The court emphasised that there was no criminal colour to the case.
Courts findings on the auctions of the Karkhans, which ED had probed and raised questions.
Sale of Jarandeshwar Jarandeshwar Sugar Mill Pvt Ltd to Guru commodity :
The deal was in question as late former Deputy chief minister Ajit Pawar and his wife, Sunetra Pawar, present deputy chief minister of the state were directors in the company.
The court however referred to the proceedings initiated before the local magistrate court and later the order of the high court which had held that no offence was made out.
M/s Ram Ganesh Gadakari SSK to Ms Prasad Sugars & Allied Agro Products Ltd, :
ED had questioned the auction, factory to M/s Prasad Sugar and Allied Agro Products Ltd, for a mere Rs 12.95 crores whereas the reserve price was Rs 26.32 crores. It was sold to Prasad Sugar and Allied Agro Products Ltd, firm of Prajakt Tanpure. Whereas, Prajakt's father Prasad was a member of the board of directors in the bank.
The court referring to the records noted that the Prasad Sugar and Allied Agro Products. was declared the highest and successful bidder only after following all the necessary procedure provided under the law. Record reflects that, undisputedly, till date no proceeding has been initiated under the provisions of SARFAESI Act to challenge the validity of the sell of R.G. Gadkari Sugar Factory to the Prasad Sugar and Allied Agro Products. Therefore, record reflect that no loss was caused to the Bank due to sell of R.G. Gadkari Sugar Factory.
Sale of Jalna SSK to Tapadia Construction Pvt Ltd :
ED had alleged that SSKs were fraudulently sold by the then officials & Directors of MSCB at throw-away prices to their relatives/private persons without following the due procedure. It is further revealed that MS Tapadia Construction Pvt. Ltd. have received funds from other bidders that is MS Ajit Seeds Pvt. Ltd. and Arjun Khotkar, a Shiv sena leader was one of the directors of the Maharashtra State Co-operative Bank during the period from 1998 to 2004, there was conflict of interest.
As against the allegations that Tapadia Construction even after winning the bid didnot operate the karkhana, The court has held that record reflect that, there was no pre-arrangement between the Tapadia Construction Ltd. and Arjun Sugar Industries prior to the auction Also In the entire proceedings, there was no issue raised as to any illegality involved in the auction process.
Auction of Kannad SSK to Baramati Agro Limited.
It was in this connection ED had filed a prosecution complaint against Rohit Pawar, grandnephew of Sharad Pawar and MLA from the Karjat-Jamkhed constituency. Pawar was a director in Baramati Agro which took over Kannad SSK. ED claimed that the auction process lacked transparency, was not impartial, and was manipulated.
Court's finding: The court has found that There is no credible or valid evidence in respect of any purported illegality in the process involved for the auction of Kannad Sugar Factory.
Record reflect that, undisputedly, till date no proceeding has been initiated under the provisions of SARFAESI Act to challenge the validity of the sale of Kannad Sugar Factory to the Baramati Agro Limited Company.
Courts findings on the alleged scam
On considering the function of the bank, it clearly reveals that the head office or Director of the bank has not handled the cash themselves. To the contrary, all procedure has to be complied with and thereafter, the file will be placed before the loan committee. it appears that there was no conspiracy hatched by the Directors while granting the loan.
As against the allegation that reserve price was set lower also that the factories were sold at below reserve price the court said, The reserve price is required to be fixed by the authorised officer in consultation with the secured creditor after obtaining the valuation due to writing off of the loans, bank has not seems to be suffered financial loss.
In concern with sale of factories under the SARFAESI Act, it seems that the recovery procedure was initiated only with intention to recovery of loan amount to safeguard the bank. No prior meeting of minds of Director or means rea is seen from record about sale of the said factories.
the Directors of the bank or the employees are not seems to be responsible. The Court has not only relied upon the investigation papers, but gone through the earlier audit reports, forensic reports, guidelines of NABARD, CMA guidelines, provisions under SARFAESI Act and provisions the Cooperative Court Act, statement of Nitin Majotia of Joshi Nair Associates, statement of witness which reflects that there was no conspiracy hatched by the accused as alleged in the complaint. The further investigation is warranted only in the exceptional circumstances to prevent miscarriage of justice.
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