For greater than three many years, a financial institution supervisor was made to reply for an alleged loss brought on to Indian Financial institution by loans sanctioned in 1991-92. However when the Supreme Court docket lastly acquitted him, it was the financial institution that discovered itself within the dock — over why it had stored greater than ₹2.7 crore in extra public sale proceeds with itself for years as an alternative of handing the cash over to the debtors’ authorized heirs.
In a placing flip within the 35-year-old case, the Supreme Court docket has not solely overturned the conviction of V Balakrishnan, then department supervisor of Indian Financial institution’s Anna Nagar department, but additionally summoned the financial institution to clarify what it did with the excess cash left after auctioning mortgaged properties to get better the loans.
A bench of justices JB Pardiwala and Okay Vinod Chandran famous that the financial institution acquired ₹1.175 crore from the public sale of 1 borrower’s property in opposition to mortgage dues of solely ₹16.42 lakh, whereas one other public sale fetched ₹2.42 crore in opposition to dues of simply ₹5.35 lakh. An additional property fetched ₹34.5 lakh, which was additionally appropriated in direction of the mortgage account.
The courtroom stated the loans had been totally happy, but the surplus cash from the auctions was nonetheless mendacity with the financial institution. “Extra intriguing is the actual fact…that the quantities acquired in public sale, in extra of the appropriation to the mortgage accounts are nonetheless remaining with the financial institution,” stated the bench, expressing shock that “no try was made to search out out the authorized heirs and move on the cash”.
The courtroom has now impleaded the department supervisor of Indian Financial institution’s Anna Nagar department and ordered him to submit a report on the 2 mortgage accounts, their satisfaction, the public sale proceeds and the way the surplus cash was utilised. The financial institution has additionally been directed to provide the title deeds of the mortgaged properties.
The case will return earlier than the Supreme Court docket on October 5, particularly to determine the standing of the surplus public sale cash and guarantee its due disbursal.
Balakrishnan had been working as department supervisor in 1991 when CBI alleged that he conspired with P Kumaradevan, a retired Indian Abroad Financial institution officer, to sanction loans to 2 debtors who had been allegedly Kumaradevan’s home helps. The prosecution case was that inflated property valuations had been used to safe the loans and that Kumaradevan finally appropriated the cash.
A CBI courtroom convicted Balakrishnan in 2016 and sentenced him to at least one yr’s rigorous imprisonment, greater than twenty years after the alleged irregularities. The excessive courtroom upheld the conviction, bringing the matter to the Supreme Court docket.
However the apex courtroom discovered the prosecution proof essentially poor. It famous that the loans had the truth is been sanctioned by the Indian Financial institution’s Regional Workplace, with official witnesses acknowledging the approvals. The financial institution subsequently recovered the mortgage quantities in full by auctioning the mortgaged properties.
The courtroom additionally discovered that the prosecution had failed to determine that Kumaradevan had really signed the cheques by means of which the mortgage quantities had been allegedly acquired by him. It additional rejected the inference that the properties will need to have been overvalued in 1991-92 just because they fetched considerably greater costs when auctioned in 2010 — practically twenty years later.
The Supreme Court docket held that the prosecution’s case was “fabricated” and had “no legs to face”, holding that CBI had failed not solely to show its case but additionally to correctly body it. The courtroom granted Balakrishnan a clear acquittal, setting apart each the trial courtroom and excessive courtroom judgments.
However the last twist got here after the acquittal. Having spent years prosecuting a financial institution supervisor for allegedly inflicting a loss to the financial institution, the document earlier than the Supreme Court docket confirmed that the financial institution had finally recovered the loans, and was nonetheless holding a considerable surplus from the auctions.
The courtroom has now turned its scrutiny on that cash, making the 35-year-old prosecution finish with an altogether totally different query: what occurred to the cash that remained after Indian Financial institution had recovered each rupee it was owed?