CBI Court Sentenced Chief Manager of Union Bank to 5 years Jail in Rs 3.10 Crore Bank Fraud Case

The Rouse Avenue Court in Delhi has delivered a significant verdict in a bank fraud case, sentencing five individuals to rigorous imprisonment. Among the convicted is Pawan Arya, the former Chief Manager of Corporation Bank (now merged with Union Bank of India). The court imposed sentences ranging from four to five years, along with a total fine of ₹7.5 lakh.

Details of the Sentences

• Pawan Arya: Received a sentence of 5 years rigorous imprisonment and a fine of ₹2.5 lakh.
• Birendra Prasad Singh (B.P. Singh): A valuer, sentenced to 4 years rigorous imprisonment with a fine of ₹1.5 lakh.
• Sudhir Kumar Arora: The borrower and owner of M/s Supreme Steel, also sentenced to 5 years rigorous imprisonment and a fine of ₹2 lakh.
• Chakradhar Muduli: Sentenced to 4 years rigorous imprisonment with a fine of ₹75,000.
• Shiv Kumar Verma: A middleman, sentenced to 4 years rigorous imprisonment and a fine of ₹75,000.

Background of the Case

The case began after a complaint from the then Deputy General Manager of Corporation Bank, Zonal Office Delhi (South), on June 1, 2017. The complaint detailed the alleged misconduct of the accused, which occurred in 2013.

Here’s what happened:

1. Loan Application: Sudhir Kumar Arora and others approached Corporation Bank’s Aali Branch in New Delhi for a working capital loan of ₹3.10 crore.
2. Sanctioning the Loan: The Zonal Level Credit Committee approved this loan, requiring collateral that included stock in trade and property located in Ghaziabad, U.P.
3. Disbursement: On March 1, 2013, the loan was disbursed to Arora’s business.

Allegations of Fraud

The investigation revealed serious discrepancies in the loan approval process. It was alleged that the bank officials, in collusion with the borrowers, sanctioned the loan based on:

• False Net Worth Statements: These documents misrepresented the borrowers’ financial health.
• Overvalued Collateral: The assets pledged as security were worth far less than stated.

As a result, the sanctioned funds were misappropriated and transferred to the accounts of the borrowers’ sister companies, leading to a significant financial loss of ₹3.10 crore for the bank.

Conclusion

Following a thorough investigation, the Central Bureau of Investigation (CBI) filed a chargesheet on September 26, 2019, against the accused individuals. After a trial, the court found them guilty and imposed the aforementioned sentences. This case serves as a reminder of the serious consequences of fraud in the banking sector, highlighting the importance of integrity and accountability in financial institutions.