In a major legal development, the Madras High Court has cancelled the CBI’s case against a company linked to Tamil Nadu cabinet minister K.N. Nehru’s family. The case was related to the misuse of a Rs 30 crore bank loan. However, the court decided to quash the case because the company and the Indian Overseas Bank had already settled the issue peacefully.
Who Filed the Petitions?
The petitions were filed by N. Ravichandran, who is K.N. Nehru’s younger brother. He filed the case along with his companies:
- True Value Homes India Pvt Ltd
- TVH Energy Resource
- Truedome EPC India Pvt Ltd
They asked the court to cancel the CBI’s FIR and chargesheet, which were based on allegations of cheating and criminal conspiracy.
What Was the CBI’s Case?
The CBI (Central Bureau of Investigation) alleged that Truedome EPC India took a Rs 30 crore loan from Indian Overseas Bank in 2013 to build a 100.80 MW wind energy project in Tiruppur district. But instead of using the money for the project, the firm transferred the entire amount to its sister companies like:
- Ecodom Power – Rs 13.50 crore
- Mark Green Developers – Rs 12.50 crore
- Balaji Traders – Rs 4 crore
Eventually, all the money landed in the bank account of True Value Homes, which used it to repay a loan from Punjab National Bank on the same day the loan was disbursed.
Why Did the Court Cancel the Case?
The court noted that even though there was some deception in how the loan was used, the bank officials were aware from the beginning that the loan would be used to pay off another bank loan. Because of this, the court felt that the matter was more of a commercial transaction rather than a serious criminal offence.
Justice D. Bharatha Chakravarthy, who passed the judgment, observed:
“Since the entire loan amount was used to repay another loan, and bank officials knew about it, it seems more like a business decision and not a crime against society.”
What Was the Penalty?
Even though the case was cancelled, the court imposed a fine of Rs 30 lakh on the petitioners. This amount must be paid within eight weeks. The money will be divided between:
- CBI – to cover investigation and legal costs
- Courts – to buy stationery and improve infrastructure at district and taluk-level courts
CBI and ED Investigations
Despite the bank reaching a settlement, the CBI had registered a case in December 2021, under Section 420 (cheating), Section 120-B (criminal conspiracy) of the IPC and Provisions of the Prevention of Corruption Act.
Later, the Enforcement Directorate (ED) also registered its own complaint and even conducted raids at 12 locations related to K.N. Nehru and his MP son, Arun Nehru, in April 2024.
Loan Recovery Timeline
- March 2013: Loan of Rs 30 crore sanctioned to Truedome EPC India
- Same day: Amount diverted and used to repay PNB loan
- November 2019: Bank asked for repayment in two parts (Rs 21.5 crore and Rs 10 crore)
- September 2021: Bank offered a one-time settlement of Rs 33.42 crore
- May 2022: Truedome paid Rs 25.08 crore
- February 2023: Additional Rs 37 lakh paid as interest
- Bank issued No Objection Certificate (NOC) stating loan was fully cleared
Court’s Final Judgement
The judge concluded that since the loan was completely settled and the bank did not file a complaint against its own officers, the case didn’t involve any major wrongdoing. Therefore, it was appropriate to quash the case.
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