IN THE HIGH COURT OF JUDICATURE AT PATNA Cr. Misc. No. 4528 of 2010 DHARAM CHAND JAIN Son of Shri Ghamandi Lal Jain, R/o 2/511 Aravali Vihar (Kalakua Housing Board), District and P.S. Alwar, State- Rajasthan. . . . . Petitioner. Versus 1. THE UNION OF INDIA through C.B.I. 2. The Zonal Manager, UCO Bank, Zonal Office, Maurya Lok Complex, Patna. . . . . Opposite parties. with Cr. Misc. No. 13411 of 2010 J.C.NANDI, Son of Late Narsingh Chandra Nandi, Resident of Shivpuri Colony, P.O. + P.S.- Ishaquechak, Bhagalpur. . . . . Petitioner. Versus THE STATE OF BIHAR THRU. CBI. ----------- 4/ 28.04.2010 Heard learned counsel for the petitioners and the C.B.I. The petitioners apprehend their arrest in Special Case No. 14 of 2008, arising out of RC No. 19(A) of 2008 registered for the offence under Sections 120 B, 420, 467, 468 and 471 of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. The prosecution case in short as made out in the written report, dated 21.08.2008 of Rakesh Kumar Sharma, Zonal Manager, Zonal Office, UCO Bank, Patna addressed to Superintendent of Police, C.B.I. is as follows: The informant alleged that J.C. Nandi and D.C. Jain, the successive Senior Managers of Patliputra Industrial Area Branch, Patna in conspiracy with Directors of M/s Shivam Planners and Construction Private Limited, lawyer of the Bank and approved valuers, enhanced the cash credit limit to Rs. 2.80 crores on fake and inadequate security. It is the prosecution case that J.C. Nandi recommended for sanctioning of Rs. 80 lacs of cash credit limit in - 2 - favour of M/s Shivam Planners and Construction Private Limited on collateral security, which later on, in scrutiny in 2007, was found to be fake. The prosecution case is that J.C. Nandi despite making spot inspection had reported that property to be realistic. It was further alleged that the retained lawyer S.K. Ghosarvey and the approved valuer Sri Ram Balak Prasad also made incorrect reports regarding title and valuation. Informant alleged that J.C. Nandi further recommended for enhancement of cash credit limit from 80 lacs to 2 crores on 31.03.2005, on fake and false collateral security in conspiracy with the aforesaid persons to bestow undue favour to the Company. Meanwhile one Mr. D.C. Jain, succeeded J.C. Nandi, as Senior Manager of the Branch. He too made recommendation for enhancement of working capital limit from Rs. 2 Crores to Rs. 2.80 Crores on the basis of additional security of 33 kathas of land in village Badarbali and Daulatpur within Chandi police station, which though genuine was inadequate in value. It is alleged that approved valuer M/s S.P. Singh and Associates and retained lawyer made collusive report regarding correctness of title and valuation. Furthermore, D.C. Jain after spot inspection too had, reported that security is realistic. On the basis of the aforesaid report, A.G.M., Zonal Office sanctioned enhancement of limit from Rs. 2 Crores to Rs. 2.80 Crores. On verification, the property was found to be agricultural in nature in place of commercial and valued at Rs. 4.82 lacs by M/s Bhartia & Associates on 22.12.2007. - 3 - The prosecution alleged that on account of fraudulent act of these persons, the bank sustained a loss of Rs. 3 Crores. The petitioner, D.C. Jain, in Cr. Misc. No. 4528 of 2010 submits that he joined the Bank on 23.12.1971 and had unblemished record. On the verge of retirement, he was for a very short period posted at Patliputra Industrial Area Branch from July, 2005 to August, 2006. He is an outsider belonging to State of Rajasthan. Even prior to his joining, the Company M/s Shivam Planners and Construction Ltd. was already enjoying an enhancement of cash credit limit from 80 lacs to 2 crores. He recommended enhancement on the basis of additional collateral security and valuation report of the approved valuer M/s S.P. Singh and Associates, who valued the property at Rs. 1,49,07,500/-. The approved valuer classified the locality as commercial-cum-residential. The approved valuer further opined that development is going on and civic amenities are available in the area. The petitioner inspected the site and found the land to be realistic. The empanelled lawyer also certified the right and title of the land holders. Thus, on the basis of site inspection and certification of approved valuer and retained lawyer, the petitioner recommended for enhancement. Learned counsel further submits that Manoj Kumar, Assistant General Manager, Zonal Office, Patna, who sanctioned the amount, has not been made an accused. Learned counsel has filed supplementary affidavit stating that subsequently another empanelled valuer M/s Bhartia and Associates mischievously valued the collateral - 4 - security at Rs. 4.82 lacs. The valuation report of M/s Bhartia and Associates is contradictory in itself, as it too stated that the site is developing and that civic amenities like School, Hospital, Bus-stop, Marketing etc. are within 2 to 3 KM. thereof. Furthermore, M/s Bhartia & Associates have been removed from the panel of approved valuers. Moreover M/s Shivam Planners and Construction Ltd. has deposited a sum of Rs. 3,36,42,538.50 between 02.01.2006 to 27.03.2008, a copy of account has been annexed as Annexure-5 to the supplementary affidavit. Counsel for the C.B.I. opposed the bail application and submitted that the petitioner D.C. Jain in connivance with other accused persons knowingly enhanced the cash credit limit from Rs 2 crores to Rs. 2.80 crores on inadequate security. He states that despite inspection the petitioner had endorsed higher valuation of the security. The C.B.I. does not deny that the collateral security is genuine and the approved valuer had valued it at 1.49 crores and odd. The empanelled lawyer too certified the correctness of the title. It is not the case of the C.B.I. that the land available on the spot was fake or was different or less than available on the papers. Furthermore, M/s Shivam Planners and Construction Ltd. had deposited a sum of Rs. 3,36,42,538.50 between 02.01.2006 to 27.03.2008. In view of the above, I direct that in the event of arrest or surrender within six weeks from today before the court below in connection with Special Case no. 14 of 2008, arising out of RC No. 19(A) of 2008, the petitioner, Dharam Chand Jain, of Cr. Misc. No. - 5 - 4528 of 2010 would be released on bail on furnishing bail bond of Rs. 20,000/- (Twenty thousand) with two sureties of the like amount each to the satisfaction of Special Judge, C.B.I., South Bihar, Patna, subject to the conditions as laid down under Section 438(2) of the Code of Criminal Procedure with the condition that petitioner would cooperate and make himself available as and when required in the proceeding. The petitioner (J.C. Nandi) in Cr. Misc. No. 13411 of 2010 was the senior Manager of the Branch before joining of D.C.Jain as manager. He had first recommended a cash credit limit of Rs. 80 lacs and thereafter further recommended for an enhancement of limit to Rs. 2 crores. On his recommendation, the Zonal Manager has sanctioned the aforesaid amount in favour of M/s Shivam Planners and Construction Ltd. Learned counsel for petitioner J.C. Nandi submits that he made the recommendations on the basis of the report of the approved valuer as well as certification of title by the empanelled lawyer. He submits that neither the approved valuer Ram Balak Prasad nor the Manager, who sanctioned the credit limit have been charge-sheeted. Learned counsel submits that petitioner had made recommendation after following the procedure as per the manual and instructions of the Bank. He accepted the collateral security for mortgage only when the empanelled lawyer of the Bank gave a specific legal opinion about the genuineness of the property. The non-encumbrance certificate was also issued by the authorities with regard to the land. He submits that there is no material in the charge-sheet to suggest that it was in the - 6 - knowledge of the petitioner that the mortgaged property was a fake and invalid property. He further submits that the recommendation is not always meant for sanctioning the same, as on earlier occasions, recommendations have been turned down by the sanctioning authority. Furthermore, the manual of instruction of the Bank (1999) with regard to acceptance of title deeds for mortgage has totally been followed by the petitioner and then only the recommendation was made. He submits that the Bank circular says that if the officials have taken standard care expected from a person of normal prudence in the given circumstances in normal course, they do not see any reason for having fear of getting involved in any criminal accountability. Learned counsel submits that the manual of instruction 1999 was amended in December, 2006 and then came the provision of cross verification of title deeds by the officers of the Bank. Learned counsel has relied upon submissions made in case of D.C. Jain that M/s Shivam Planners and Construction Ltd. had deposited a sum of Rs. 3,36,42,538.50 between 02.01.2006 to 27.03.2008. Counsel for the C.B.I. submits that the collateral security on the basis of which petitioner J.C. Nandi recommended for sanction of cash credit limit of Rs. 80 lacs and subsequent enhancement to Rs. 2 crores, were made on fake securities and documents. In fact, the land, which was provided as collateral security belonged to the State of Bihar and a Samudayik Bhawan was under construction on the plot. Learned counsel submits that the petitioner has made spot inspection and still reported that the land is genuine and valid. He further submits - 7 - that the petitioner does not deserve anticipatory bail. Having heard the counsel for the parties, this Court finds that the collateral security on the basis of which petitioner J.C. Nandi made recommendations were found to be fake and non-existent, rather the same belonged to the State of Bihar. Thus, I find prima facie substance in the submission of the counsel for the C.B.I. that in spite of inspection, the petitioner made recommendation of enhancement of cash credit limit to 80 lacs and later on to 2 crores on fake securities, as such I am not inclined to grant him anticipatory bail. Thus, the prayer for anticipatory bail of petitioner J.C. Nandi is rejected. Uday/ (Samarendra Pratap Singh, J.)