The Madras High Court has acquitted a 90-year-old former Chief Manager of Bank of Baroda in a corruption case registered by the Central Bureau of Investigation (CBI) nearly 30 years ago. The Court held that the prosecution failed to prove the charges beyond reasonable doubt.
What is the case all about?
In 2015, a CBI court in Chennai had sentenced V.R. Narayanan to one year of simple imprisonment and imposed a fine of ₹5,000 under the Prevention of Corruption Act.
The case was related to loan facilities granted to M/s Corium Crafts Private Limited between 1991 and 1994. The company had obtained packing credit and foreign bills purchase facilities from the Industrial Finance Branch of Bank of Baroda in Chennai.
The CBI alleged that the company and its directors diverted bank funds by showing fake stocks of tobacco and leather. It also alleged that Narayanan, who was the Chief Manager at the time, submitted a false inspection report after visiting warehouses in Gujarat.
According to the CBI, large quantities of tobacco were shown as being stored in warehouses near Anand and Baroda. However, a later inspection reportedly found no such stock. Investigators claimed that some warehouse addresses were fake and that one of the locations was actually a potato field.
Bank of Baroda Chief Manager Narayanan denied the allegations. He stated that the loan had already been sanctioned before he joined the branch in November 1991. He said the credit facilities were approved and monitored by the Zonal Office, while the branch only processed and released funds according to instructions.
The trial court had convicted Narayanan mainly on the basis that his inspection report falsely confirmed the existence of stocks in the Gujarat warehouses.
Narayanan challenged the conviction before the Madras High Court in 2015.
The High Court noted that the loan application was submitted on April 15, 1991, and approved on July 6, 1991, before Narayanan joined the branch. The Court also observed that the previous Chief Manager, who had recommended the loan proposal, was neither made an accused nor examined as a witness.
The Court found that bank officials had confirmed that the loan was processed through the Zonal Office and that the branch acted on instructions from higher authorities. It also noted that Narayanan had initially refused to release certain amounts and did so only after receiving instructions from the Zonal Office.
The High Court said that the prosecution’s case mainly depended on differences between Narayanan’s inspection report of February 1993 and another inspection report prepared 22 months later in December 1994.
The Court held that a conviction could not be based solely on differences between two inspection reports prepared nearly two years apart.
The Court also noted that the investigating officer admitted that Narayanan had not received any personal benefit from the transaction. It was further pointed out that the loan amount had already been repaid.
Allowing the appeal, the High Court held that Narayanan’s conviction could not be sustained and acquitted him of all charges.
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