On Monday, a special court under the Prevention of Money Laundering Act (PMLA) granted bail to Joy Thomas Kanjigrathingal, the former managing director of Punjab and Maharashtra Co-operative (PMC) Bank. Thomas is one of the main accused in the ₹4,635 crore PMC bank fraud case.
Grounds for Bail
The court granted bail based on two key factors:
- Parity: Waryam Singh, the former chairman of PMC Bank and a co-accused in the same case, had already been granted bail.
- Long Incarceration: Thomas had been in jail for an extended period without the trial starting, and there was no indication that the trial would begin anytime soon. Judge AC Daga stated that keeping Thomas in jail without trial would be unfair.
Prosecution’s Argument
Special public prosecutor Ajay Misar argued that the largest borrower of PMC Bank, Housing Development and Infrastructure Limited (HDIL), owed ₹4,335.46 crore from 2008 to 2019. Misar claimed that:
- Thomas, along with other bank officials, provided false information to the Reserve Bank of India (RBI) to cover up the true status of HDIL’s loan accounts.
- Thomas and other bank officials allowed HDIL to take loans without following banking regulations, causing a massive loss to depositors.
- The accused caused significant mental and physical trauma to depositors, many of whom are still protesting due to their losses.
The HDIL, its promoters and other co- accused and accomplices committed a fraud by causing loss of Rs 6,117.93 crore (principal Rs 2,540.92 crore and interest amounting to Rs 3,577.01 crore) against PMC Bank. The bank’s top management is accused of sanctioning around 73% of the bank’s loans to HDIL unlawfully. The bank also concealed HDIL’s non-performing assets (NPAs). Correct Data was not reported to RBI.
Defense’s Argument
Advocate Haznain Kazi, representing Thomas, argued for bail based on:
- Parity: Since Waryam Singh (ex-chairman of PMC Bank) and HDIL promoters Rakesh and Sarang Wadhawan had been granted bail by the Bombay High Court, Thomas should be treated the same.
- False Implication: Kazi insisted that Thomas was falsely implicated and was not a beneficiary of the fraudulent loans.
- Documentary Evidence: The case was based on documents already in the possession of investigating authorities, and no formal charges had been framed yet.
- Depositors’ Security: Kazi pointed out that depositors’ money had been secured after Unity Small Finance Bank took over PMC Bank’s operations, reducing any further risk.
Court’s Observation
The court agreed that Waryam Singh, who had been granted bail, held a more significant role in the fraud than Thomas. Furthermore, the judge noted that the trial was unlikely to conclude in the near future. Judge Daga stated that pre-trial punishment, by keeping Thomas in jail without a trial, was unjustified.
Conclusion
Judge AC Daga ruled that Thomas should be released on bail, citing the grounds of parity with other accused and the extended period of incarceration without trial.
Background of the PMC Bank Scam
The PMC Bank scam was exposed in 2019 after a special audit by the RBI revealed that the bank had fraudulently issued loans totaling over ₹7,457.49 crore, primarily to HDIL. To hide these fraudulent loans, the bank created 21 fake accounts. Thomas, who was managing director at the time, was accused of approving these loans without adhering to proper banking procedures, alongside Waryam Singh, who had close ties with HDIL promoters.
