Delhi High Court quashes proceedings against former ED of Canara Bank in Loan Fraud Case of OSPL

The Delhi High Court has given relief to Ashok Kumar Gupta, a former Executive Director of Canara Bank, by quashing criminal proceedings filed against him by the CBI. Gupta, who retired in 2014, was accused of causing loss to the bank by sanctioning a loan of ₹68 crore to a jewellery trading company – Occasion Silver Pvt. Ltd. (OSPL). CBI alleged that the company secured the money fraudulently in 2013 by misrepresenting its financial records.

Gupta’s name was not mentioned in the original CBI FIR of 2016 but appeared later in a 2018 chargesheet, which accused nine people of conspiracy, cheating, and corruption. He was added because he was a member of the Executive Director-Credit Approval Committee (ED-CAC) that collectively sanctioned the loan proposal.

The agency had filed a case in January 2016 against Delhi based private company – M/s Occasion Silver Pvt Ltd (OSPL) and its directors Kapil Gupta and Raj Kumar Gupta for cheating, forgery, criminal conspiracy and prevention of corruption act.

“It was alleged that OSPL, dealing in wholesale & retail trading of silver jewellery and articles, diamond, gold jewellery, imitation jewellery, gift items, crockery items etc had cheated Canara Bank to the tune of Rs 68.38 crore through its accounts at Kamla Nagar, New Delhi branch of the Canara Bank,” said CBI Spokesperson Abhishek Dayal.

The loan was sanctioned to the company in December 2013, disbursed within the next three months.

It turned Non-Performing Asset (NPA) in September 2014, within one year of its opening, and the funds were siphoned off through a chain of alleged bogus transactions facilitated by fake sister concerns, family members and bank officials including the top executives, said Abhishek Dayal.

CBI alleged that Guptas knew R K Dubey and used the connection in getting loans. CBI said it had messages from the CMD directing subordinate officers to favour the company.

Chargesheet was filed against R K Dubey, Ashok Kumar Gupta, V S Krishna Kumar, a former DGM of Canara Bank Mukesh Ranjan, then chief general manager – T Sreekanthan, an assistant general manager Upendra Dubey and the private persons Kapil and Rajkumar Gupta.

Justice Amit Mahajan, while passing the order on August 14, highlighted that there was no direct or specific evidence against Gupta to show he personally benefited from the loan decision. The court also stressed that the decision was taken collectively by a nine-member committee and had already gone through several layers of scrutiny inside the bank. Considering only Gupta for criminal liability, while not proceeding against other members of the committee or the Board, was found unjustified.

The court further observed that the allegations were vague, lacked supporting material, and seemed to be based on assumptions rather than concrete evidence.

High Court concluded that Gupta, as just one of many committee members, could not be held criminally responsible for a collective decision.