Lata Jagdish Mistry vs. State Of Maharashtra, Through Central Bureau Of Investigation, Anti Corruption Branch, Pune

Held

The Court held that there was sufficient prima facie material to proceed against the applicant, Lata Jagdish Mistry, and therefore, refused her discharge. The Court found that the applicant, in her capacity as Branch Manager, failed to perform her duties diligently. Specifically, she signed the Preliminary Information Memorandum (PIM) without verifying the credentials of the borrowers, which contained false facts and projections. The Court noted that the proposal had initially been rejected by the Head Office but was dishonestly considered at a lower level. The applicant also permitted the opening of the borrower company's current account without proper KYC documents and without verifying the personal information of the Directors. Furthermore, she failed to oversee the proper utilization of funds, did not collect proper tax invoices or quotations with GST/VAT numbers, and disbursed the loan before the utilization of the term loan for machinery installation, even disbursing the cash credit facility before the term loan was utilized. The Court concluded that the applicant actively played a role in the entire episode, facilitating the misutilization of funds by the borrower company and that the charge-sheet contained sufficient material, including various documents, to support the accusations. Therefore, the impugned order refusing discharge was rightly passed, and the revision application had no merit.

Facts

The applicant, Lata Jagdish Mistry, was the Branch Head of Bank of Maharashtra, Sahakar Nagar Branch, Pune, from 2012 to 2015. The prosecution alleges that during 2012-2013, she conspired with other accused to fraudulently sanction a term loan of Rs. 7.8 crores and a cash credit limit of Rs. 2 crores to M/s. Vishnu Gayatri Biocoal and Agro Products Pvt. Ltd. The loan amounts were allegedly diverted by the borrowers, causing wrongful loss to the bank. An FIR was registered on 07/04/2017 for offences under the IPC and the Prevention of Corruption Act. After investigation, a charge-sheet was filed on 30/03/2019. The applicant's application for discharge under Section 227 of the Cr.P.C. was rejected by the Special Judge, CBI ACB, Pune, on 12/12/2022, leading to the present revision application before the High Court.

Key Issues

1. Whether there is sufficient prima facie material to proceed against the applicant, Accused No. 1, for offences under Section 120-B read with Section 420 of the IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, thus warranting refusal of discharge? Petitioner's Contention: The applicant argued that the prosecution is based on conjectures and surmises and that she should be discharged. (Implicitly, the applicant contended that the material against her was insufficient for trial). Respondent's Contention (CBI/State): The respondent contended that the applicant, as Branch Head, failed in her duties by not scrutinizing documents, not verifying borrower credentials, and not ensuring the proper utilization of funds, thereby facilitating the alleged fraud. They relied on witness statements and bank guidelines regarding the processing of declined proposals. The respondent argued that the applicant played a significant role in the disbursement of credit facilities and that the material compiled in the charge-sheet, including various documents, falsifies the contention that the accusations are general in nature.