Kashmir Indepth

ACB registers case in loan fraud worth crores of rupees

Srinagar, June 28: Anti-Corruption Bureau (ACB) Jammu on Friday formally booked the management, officers and officials of the J&K Bank along with illegal beneficiaries involved in financial irregularities/loan fraud worth crores of rupees. It also conducted searches at various premises.

According to ACB statement issued , a joint surprise check was conducted by ACB Jammu on account of the allegations of financial irregularities committed by the officers and officials of the J&K Bank, wherein it was revealed that various loan facilities were extended to proprietors of a partnership firm M/s Paradise Avenue during the period 2012 to 2017 in contravention to the laid down norms and procedures of the Bank and resultantly the loan accounts turned into NPA.

During the surprise check, it was found that the proprietors of the firm approached J&K Bank, Branch New University Campus Jammu, for availing of loan facility of Rs 74.27 crore for setting up a residential township complex under the name and style of ‘Paradise Avenue’ at Narwal, Jammu consisting of 52 flats in each of the towers named Eden & Zion. The loan amount was sanctioned on 30.01.2012 with one of the prerequisite conditions that loan has to be disbursed in a phased manner after securing margin of Rs 22.09 crore including unsecured loan of Rs 2  crore from the borrowers on pro-rata basis.

On scrutiny of records of the branch, it surfaced that the loan amount was in fact sanctioned by the Bank in January 2012 which paved way for the firm to purchase 30 kanals of land from different land owners through registered sale deeds in July 2012 after a gap of six months from sanctioning of loan in favour of the firm meaning thereby that the loanee firm had no title of land in its name when the loan was sanctioned in Jan 2012 which had to be mortgaged to the bank, ACB said.

“Under a well-knit and pre-designed conspiracy hatched by the loanee firm with the bank officials, the amount of sale consideration reflected in the sale deed was shown paid through cheques to the land owners fraudulently and dishonestly with inflated cost of the land whereas those cheques were actually taken back from the land owners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with objective and purpose to buy the land in question out of the loan amount alone sanctioned by the bank,” it said.

Since, the proprietors of the firm and the bank officials were fully aware about the rules/norms governing the subject that the loan amount cannot be sanctioned against purchase of land for raising of residential township which is a commercial activity, they in league with the bank officials of the branch in order to seek release of the loan amount had also issued letters addressed to the bank indicating therein that the land owners had supplied construction material to the firm whereas in actual no such material had been in fact purchased by the firm from the suppliers, ACB said adding that these were in fact sham transactions with motive to siphoning off the bank money.

On further scrutiny of the bank records, it also surfaced that as per the terms and conditions, the bank was to release the amount in phased manner, however, by March 2014, the Bank had instead made 100% disbursement in first phase only thereby conferring undue pecuniary advantage upon the beneficiary firm. The firm borrowed three additional loans worth Rs 68.91 crore, Rs 20.00 crore and Rs 14.5 crore. Hence in total the proprietors of the firm managed to obtain Rs 177.68 crore loan illegally and fraudulently in connivance with the bank management and its officials.

The repayment of the loan amounts was to start from September 2017 with a quarterly installment of Rs 11.27 crore, however, the proprietors turned wilful defaulters by not making repayment of loan with sole objective to get their loan account declared into NPA and consequently they succeeded in their goal wherein on 31.12.2017 loan account was declared NPA by the bank management, the Bureau said.

ACB said “the deep-rooted conspiracy between the bank management and the beneficiary firm is evident from the fact that the Principal Loan Amount of Rs 177.68 crore was settled at Rs 130 crore under One Time Settlement (OTS) illegally and against the bank norms thereby the bank management by abuse of their authority waived off Rs 50 crore on the principal amount which has inflicted a huge loss to the bank”. Even in response to OTS, the cheque issued by the borrower for an amount of Rs 40.00 crore towards OTS has bounced.

“As the facts and the circumstances which emerged during the JSC vis-à-vis scrutiny of records of the bank disclosed commission of criminal misconduct by bank management/officers/officials of J&K Bank and the partners of the beneficiary firms and others, which constituted offence U/s 5(1) (d) of the J&K PC Act Svt. 2006 r/w 120-B RPC punishable u/s 5(2) of the Act. Consequently a formal case FIR No. 13/2019 was registered in P/S ACB Jammu for investigation,” ACB said.

After the registration of the case, searches were conducted at various premises of individual and companies connected with the firm after obtaining search warrants from the court. During search, “incriminating material” such as laptops/ documents etc were seized, ACB said adding that the investigation of the case is going on. (GNS)

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