Court orders CBI to conduct detailed investigation in Rs.91 crore fraud in Bank of India

Principal Sessions Judge Jammu, Sanjay Parihar, has returned the challan in a highly publicized multi-crore bank scam case and directed the CBI Special Task Branch (Banking-Fraud Zone) to conduct further investigation. The court was dealing with three charge-sheets based on FIRs registered with the CBI Special Task Branch in New Delhi against Jhelum Industries, Jhelum Infra Project India Pvt. Ltd, and New Jammu Flour Mills.

After hearing the case, Principal Sessions Judge Jammu Sanjay Parihar said that it appeared that the investigation was not conducted properly as the investigating officer did not investigate deeply to find out the truth. On one hand, CBI is alleging that it has kept the issue open for further investigation, but at the same time it has not investigated the role of bank officials. It appears that the investigation has been conducted in a misguided manner and the investigating officer should have been impartial and conscious enough to rule out any possibility of fabrication of evidence.

What is the case all about?

The FIRs were registered due to alleged illegal transactions in the loan accounts of the accused and the diversion of funds to other sister concerns that also had loan accounts in the same bank, Bank of India. The accused are being prosecuted for deflection and diversion of funds, falsification of balance sheets, and other offenses under Section 420/467/468/471/120-B of the Ranbir Penal Code.

The accused, Raj Kumar Gupta, who is alleged to be the promoter of all three companies, had business accounts with Punjab and Sind Bank. In 2013, the complainant bank, Bank of India, took over these accounts and sanctioned credit facilities for the accused companies.

The court observed that the investigating officer did not provide a reasonable opportunity for the accused companies to be heard before classifying their accounts as fraudulent. The court also questioned the basis for the complainant bank to claim that the accounts had become fraud and un-operational.

Furthermore, the court noted that there was a one-time settlement between the parties in 2018, but the investigating officer failed to consider the impact of this settlement on the merits of the case. The court emphasized the need for a thorough investigation to discover the truth and criticized the investigating officer for not conducting an in-depth investigation.

The court also highlighted that the investigating officer had not investigated the role of bank officials and had taken refuge under a section of the Central Act that was not applicable to the case. The court emphasized the importance of further investigation before the accused can be tried on substantial evidence.