Bail denied, prima facie materials showing involvement in deep-rooted conspiracy to cause such a huge loss to the Bank: Orissa High Court

IN THE HIGH COURT OF ORISSA CUTTACK BLAPL No.2121 In the matter of an application under section 439 of the Code of Criminal Procedure in connection with R.C. Case No.09(A) of 2019 pending in the Court of Special Judge CBI Court No.I Ashwini Kumar Patra Petitioner Mr. Devashis Panda versus Republic of India Opposite Party Mr. Sarthak Nayak Special Public ProsecutorS.K. SAHOO J. JUSTICE S.K. SAHOO Date of Hearing : 23.04.2021 Date of Judgment: 26.04.2021 The petitioner Ashwini Kumar Patra has filed this application under section 439 of Cr.P.C. for grant of bail in connection with R.C. Case No.09(A) of 2019 pending in the Court of learned Special Judge CBI Court No.I Bhubaneswar in which charge sheet has been submitted under sections 409 420 and 471 read with section 120 B of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act 1988 namely Shri Bhubaneswar Mohapatra the then Chief Manager Shri Ashwini Kumar Patra the then Marketing Officer and Shri Rajesh Kumar Patanga the then Manager entered into a criminal conspiracy with three private builders seven borrowers of housing loan and some unknown bank officials in the year 2017 and by abusing their respective official positions housing loans were sanctioned in favour of the borrowers on the basis of false fictitious documents information including fake fictitious ITRs defective KYC 3 documents information and without verifying the documents by violating the guidelines of the Bank. It is also alleged that the petitioner along with other accused Bank officials without obtaining approved plan legal scrutiny search report etc. released the entire loan amounts in favour of the accused builders on behalf of the borrowers without ensuring completion of construction of the houses BJB Nagar 02 Suryanagar 02 & Jaydeb Vihar 03 in Bhubaneswar reportedly sold by builders GDS Builders Pvt. Ltd. Surnag Builders Pvt. Ltd. and Mrs. Puspanjali Patro). It is also alleged that the disbursed loan amounts were allegedly diverted by the accused builders for other purposes and such act on the part of the petitioner along with others have caused undue wrongful loss to the tune of Rs.5 19 16 340 as on 31.05.2019 to the Bank and corresponding wrongful gain to themselves. The Superintendent of Police CBI ACB Bhubaneswar on receipt of the written complaint and on prima facie finding that the complaint disclosed commission of cognizable offence punishable 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 1988 registered the same as R.C. No. 09(A) 2019 BBS dated 01.07.2019 and on getting prior approval from the competent authority of the Bank as per section 17 A of the Prevention of Corruption Act 1988 for initiating CBI investigation against the bank officials into the alleged matter 4 proceeded with the investigation. In course of investigation the investigating officer recorded the statements of the witnesses seized the incriminating documents and arrested the petitioner along with others and submitted charge sheet against the petitioner for commission of offences under sections 409 420 and 471 read with section 120 B of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act 1988 and the allegation that the petitioner conspired with the then Chief Manager of the Bank builder Uma Shankar Patro three other private builders and seven borrowers of housing loans and misappropriated Rs.5 19 16 340 and that all the loans were processed recommended and inspected by the petitioner is not at all correct. He further submitted that out of 6 twenty five charge sheet witnesses who are officials of the Bank I.T.Os Insurance officials GEQD and CBI I.O. only one private charge sheet witness i.e. C.S.W. No.19 namely Aswin Kumar Patro is related to the co accused Uma Shankar Patro who is to prove that all borrowers are either workers known persons relatives of the workers in GDS Builders Pvt. Ltd. or Dwaraka Jewellers in which the builder co accused is a partner. It is further submitted that since investigation has been completed and the petitioner is a local man and he has been dismissed from the services of the Bank there is no chance of his absconding or tampering with the evidence therefore the bail application may be sympathetically considered. Mr. Sarthak Nayak learned Special Public Prosecutor CBI on the other hand filed his written note of argument along with copy of chargesheet and vehemently opposed the prayer for bail and argued that the petitioner had sourced processed and recommended the housing loan accounts in the names of ten borrowers on the basis of fake documents being in conspiracy with other co accused persons. The petitioner initiated the disbursement of the loan amounts from the respective housing loan accounts of the accused borrowers to the bank accounts of the accused builders without obtaining the consent of the borrowers and flouting the bank norms prescribed in respect of disbursement of the loans. It is further contended that the petitioner had made recommendations for the sanction of the loans mentioning the false net worth of the accused borrowers without obtaining 7 supporting documents of assets and liabilities misleading the sanctioning authority for which the Bank suffered a loss to the tune of Rs.2 33 71 963 and much work was pending at the construction site on date. Learned counsel further submitted that the Bank initiated disciplinary action against the petitioner and dismissed him from services of the Bank on finding his complicity and involvement in the alleged act of conspiracy. It is further submitted that though as per the Bank’s circular instructions it is mandatory to forward all the loans involving the mortgage of the property to a Centralized Processing Centre which is functioning in the premises of the Regional Office of the Bank but the petitioner processed the loans and recommended for sanction which was ultimately sanctioned and disbursed directly in the branch thereby entering into a criminal conspiracy. It is contended that the Bank’s Master Circular of Home Loans reveals that all the documents submitted by the borrowers need to be scrutinized verified and checked for their genuineness by the officers of the Bank 8 who will collect and process the loan proposals but in the case in hand all the loan proposals were processed by the petitioner himself in his user name through the Bank’s loan processing software and thus it is obvious that he should collect all the required documents check for their genuineness either directly or logically as per the Bank’s circular before making recommendation for sanction. It is further contended that the petitioner has not even obtained any such documentary proofs towards the assets and liabilities of the borrowers but had mentioned false or fictitious statements while processing the credit information and net worth assessment of the borrowers in the loan proposals which clearly reflects his malafide intention of concealing the facts and deviating the procedures of the Bank. Learned counsel for the CBI further urged that the quantum of misappropriation amount being very high and the petitioner being a local person he is very likely to influence and gain over the witnesses in case he is enlarged on bail and therefore the bail application should be rejected. four flats were in ready to occupy condition but three flats in the names of borrowers namely Smt. Swapna Sikha Shri Manoj Kumar Patra and Shri Ajay Kumar Parida were partially constructed but full loan amounts to the builder from the three loan accounts of the aforesaid borrowers were disbursed by the accused Bank officials. The that 9 further revealed that the aforesaid post sanction inspection reports in the case of three flats located at B. K. Sastry Enclave IRC Village and Jayadev Vihar Bhubaneswar are invalid false as the completed buildings mentioned in the said inspection reports had not yet completed and that full amount of the sanctioned limits in the loan accounts of the borrowers was disbursed by the Bank to the bank account of the company M s. GDS Builders Pvt. Ltd. through transfer mode. The investigation further revealed that Sri Bhubaneswar Mohapatra the then Chief Manager of the Bank had full knowledge of all the disbursements made in the alleged housing loan accounts of the accused borrowers to the bank accounts of the accused builders sellers as he along with the petitioner had signed initialed the respective disbursement vouchers and the signatures initials of Sri Bhubaneswar Mohapatra and the petitioner have been duly identified by the other bank officials who were acquainted with the same and are the chargesheet witnesses in the case. The investigation further revealed that no consent of the borrowers was obtained before debiting from their loan accounts and all the seven housing loan proposals were processed by the petitioner being the Asst. Manager of the Bank and Sri Bhubaneswar Mohapatra the then Chief Manager had sanctioned the loan in the capacity of Branch Manager basing on the recommendations of the petitioner. In the chargesheet it is mentioned that the Bank suffered a total loss of Rs.2 33 71 963 in such 10 act of conspiracy and cheating with a corresponding wrongful gain to the accused persons. So far as the accusation against the petitioner is concerned in the chargesheet it has been summarized as under: a) Non observance of due diligence: amount payments. The petitioner has not observed due diligence mandated by the circular instruction of the Bank) in respect of margin money KYC occupation net worth of the borrower property being purchased as well as income source of the borrower. The petitioner has not obtained any such document to show the payment of the margin money by the borrower. The bank account statements of the borrowers at no point of time has an amount more than Rs.10 000 which shows that they could not afford for such high b) Preparation of actually conducting the inspection: inspection reports without The petitioner has not followed the guidelines of the Bank while conducting the inspections. The pre sanction inspection reports are prepared sitting at the branch itself as admitted by the processing officer during investigation) without actually conducting the inspection. Further the details of occupation and net worth of the borrowers mentioned in the inspection reports are found false. The statements mentioned in the post sanction inspection reports are also found false as no such building structures are found at the site on date. c) Non forwarding of the loan proposals to ULP and sanction at the branch itself: 11 As per the circular instructions of the Bank issued during 2015 the petitioner should forward the loan proposals involving mortgage of property to a special designated loan processing centre Union Loan Pointand should not sanction at the branch without specific permission of the Regional Head. The petitioner has sanctioned all the loans at the branch itself ignoring the instructions of the Bank as specific permission of the Regional Head to sanction the loans is not held on record. Further the ULP is functioning in the premises adjacent to the branch in the same compound. The branch has to conduct due diligence part and submit all the relevant documents to ULP for necessary processing and sanction of the loans. This shows the willful ignorance towards the guidelines of the Bank and involvement of the petitioner in the criminal conspiracy with the builders and others. d) Disbursement of the loans without ensuring the progress of the constructions: The petitioner has not ensured the progress of the constructions and authorized for disbursement of the loan amounts violating the Bank’s instructions in respect of the disbursement of the loans. Further no such documents like consent of the borrower request of the builder are held on record. All the post sanction reports are found false. The processing officer has mentioned in the post sanction reports that a two storied building structure is completed in the project site and finishing work is going on but actually no such structures are found at the site as on date and the statements mentioned in the inspection reports are all false. The petitioner in spite of ensuring the 12 correctness of the reports and progress of the work has authorized for disbursal of the loans. The petitioner has also ignored to apply his mind while disbursing the loans because logically it is not possible to complete the construction within a period of three to eight weeks. But the loans are all disbursed within a period of three or eight weeks from the date of sanction. e) Processing of loans based on false income and net worth of the borrowers: The circular instructions of the Bank mandates the branch officers officials to ensure the genuineness of the income and net worth of the borrowers by supporting documents like Bank statements salary slips income computations balance sheets profit and loss statements documents related to the assets and liabilities and credit information bureau reports etc. The petitioner has not obtained any such documents from the borrowers in the instant case and relied upon the data submitted by the borrowers during the processing stage which is otherwise in violation of the laid down norms. The accusation against the petitioner commission of economic offences which are considered to be grave offences and are to be viewed seriously. Such offences affect the economy of the country as a whole and it involves deep rooted conspiracy and huge loss of public fund. It is committed with cool calculation and deliberate design solely with an eye on personal profit regardless of the consequence to the community. In such type of 13 offences while granting bail the Court has to keep in mind inter alia the larger interest of public and State. The nature and seriousness of an economic offence and its impact on the society are always important considerations in such a case and those aspects must squarely be dealt with by the Court while passing an order on bail applications. 7 Supreme Court Cases 439 State of Gujarat Vrs. MohanLal Jitamalji Porwal reported in 2 Supreme Court Cases 364). held as follows: In the case of Y.S. Jagan Mohan Reddy it is “34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 35. While granting bail the Court has to keep in mind the nature of accusations the nature of evidence in support thereof the severity of the punishment which conviction will entail the character of the accused circumstances which are peculiar to the accused reasonable possibility of securing the presence of the accused at the trial reasonable apprehension of the witnesses being tampered with the larger interests of public State and other similar considerations.” In case of Mohan Lal Jitamalji Porwalit is held as follows: 14 “5.......The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white colour crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest”. Law is well settled that detailed examination of evidence and elaborate discussion on merits of the case need not be undertaken for grant of bail. The Court has to indicate in the bail order reasons for prima facie conclusion why bail was being granted particularly when the accused is charged of having committed a serious offence. In the case of Kalyan Chandra Sarkar Vrs. Rajesh Ranjan alias Pappu Yadav reported in 2004 Supreme Court Cases1977 it is held as follows: “11....The Court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merit of the case need not be undertaken there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence. Any order devoid 15 of such reasons would suffer from non application of mind. It is also necessary for the Court to consider among other circumstances the following factors also before granting bail: a) The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence. b) Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant. c) Prima facie satisfaction of the Court in support of the charge.” the case of Ram Govind Upadhyay Vrs. Sudarshan Singh reported in 2002 Supreme Court Cases Criminal) 688 it is held as follows: “3. Grant of bail though being a discretionary order but however calls for exercise of such discretion in a judicious manner and not as a matter of course. Order of bail bereft of any cogent reason cannot be sustained. Needless to record however that the grant of bail is depended upon the contextual facts of the matter being dealt with by the court and facts however do always vary from case to case. While placement of the accused in the society though may be considered but that by itself cannot be a guiding factor in the matter of grant of bail and the same should and ought always to be coupled with other circumstances warranting the grant of bail. The nature of the basic considerations for the grant of bail. More heinous is the crime the greater is the chance of rejection of the bail though however depended on the factual matrix of the matter.” the offence is one of 16 In the case of Prahalad Singh Bhati Vrs. NCT Delhi reported in 2001 Supreme Court Cases674 it is held as follows: conviction will entail “8.....While granting the bail the Court has to keep in mind the nature of accusations the nature of evidence in support thereof the severity of the punishment which character behaviour means and standing of the accused circumstances which are peculiar to the accused reasonable possibility of securing presence of the accused at the trial reasonable apprehension of the witnesses being tampered with the larger interests of the public or state and similar other considerations”. In the case of Sanjay Chandra Vrs. CBI reported in A.I.R. 2012 S.C. 830 it is held as follows: “25 …It is no doubt true that the nature of the charge may be relevant but at the same time the punishment to which the party may be liable if convicted also bears upon the issue. Therefore in determining whether to grant bail both seriousness of the charge and the severity of the punishment should be taken into consideration. The grant or refusal to grant bail lies within the discretion of the Court. The grant or denial is regulated to a large extent by the facts and circumstances of each particular case. But at the same time right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment to relieve the State of the 17 burden of keeping him pending the trial and at the same time to keep the accused constructively in the custody of the Court whether before or after conviction to assure that he will submit to the jurisdiction of the Court and be in attendance thereon whenever his presence is required”. Adverting carefully tactical and enthralling contentions raised at the Bar by the learned counsel for the respective parties and looking at the oral as well as documentary evidence available on record I find that there is no dispute to the fact that the petitioner was working as Assistant Manager of the Bank at the relevant point of time. The accusation against him is very serious as it prima facie appears that he has not observed due diligence as mandated by the circular instructions of the Bank in respect of margin money KYC occupation the genuineness of the income and net worth of the borrowers i.e. assets and liabilities with supporting documents etc. status of their properties as well as income source of the borrowers. He has not ensured the progress of the constructions and authorized for disbursement of the loan amounts violating the Bank’s in respect of disbursement of the loans. He appears to have submitted pre sanction inspection reports without actually conducting the inspection and stated that construction of the site has been completed even though no such construction was undertaken. Further the details of the occupation and net worth of the borrowers mentioned in the 18 inspection reports are found to be false. He has sanctioned the loans ignoring the instructions of the Bank without specific permission of the Regional Head in that respect. He has relied upon the data submitted by the borrowers during the processing stage which was in violation of the norms of the Bank. The loans were disbursed within a period of three or eight weeks from the date of sanction. The willful ignorance towards the guidelines of the Bank prima facie indicates the criminal conspiracy of the petitioner with the builders and others. The Bank suffered a total wrongful loss of Rs. 2 33 71 963 excluding applicable interest as per the chargesheet. The contentions raised by the learned counsel for the petitioner for grant of bail to the petitioner are not at all convincing rather I find sufficient force in the argument of the learned counsel for CBI. In view of the foregoing discussions it appears that the crime was committed in a cool calculated and organized manner causing wrongful loss of crores to the Bank. There are prima facie materials showing involvement of the petitioner in the deep rooted conspiracy with other co accused persons to cause such a huge loss to the Bank. In my humble opinion granting bail to the petitioner in economic offences of this nature would be against the larger interest of public and State as it involves criminal misappropriation and cheating of huge amount of public money and there is also reasonable 19 apprehension of tampering with the witnesses. Accordingly the bail application sans merit and hence stands rejected. Before parting I would like to place it on record by way of abundant caution that whatever has been stated hereinabove in this order has been so said only for the purpose of disposing of the prayer for bail made by the petitioner. Nothing contained in this order shall be construed as expression of a final opinion on any of the issues of fact or law arising for decision in the case which shall naturally have to be done by the trial Court at the appropriate stage of the trial. As the restrictions due to resurgence of COVID 19 situation are continuing learned counsel for the parties may utilize a printout of the order available in the High Court’s website at par with certified copy subject to attestation by the concerned advocate in the manner prescribed vide Court’s Notice No. 4587 dated 25th March 2020 as modified by Court’s Notice No. 4798 dated 15th April 2021. S.K. Sahoo Judge Orissa High Court Cuttack The 26th April 2021 PKSahoo 

Summary: Granting bail to the petitioner in economic offences of this nature would be against the larger interest of public and State as it involves criminal misappropriation and cheating of huge amount of public money and there is also reasonable apprehension of tampering with the witnesses. This was said in the case of Ashwini Kumar Patra vs Republic Of India [BLAPL No.214 of 2021] by Justice S.K. Sahoo in the High Court of Orissa.  The facts of the case date back to  07.01.2021 when the petitioners application for bail in the Court of learned Special Judge, CBI was rejected mainly on the ground that prima facie the petitioner appears not only to have illegally processed the housing loans in favour of the borrowers by abusing their official positions but also submitted invalid/ false post- sanction inspection reports in the Bank and that if the petitioner is enlarged on bail, there would be every chance of his influencing the prosecution witnesses and tampering with the prosecution evidence. Assailing the order of the Special Judge, the petitioners filed an application under Section 439 of Cr.P.C. for grant of bail. Petitioner contended that the petitioner’s job in the capacity of Assistant Marketing Manager was not to verify the documents provided by the builders rather it was the duty of the Manager, Advance and Chief Manager of the Bank to scrutinize such documents and to obtain prior approval of plan before disbursing the loan amounts. Secondly, it was contended that since investigation has been completed and the petitioner is a local man and he has been dismissed from the services of the Bank, there is no chance of his absconding or tampering with the evidence, therefore, the bail application may be sympathetically considered. Learned Special Public Prosecutor contended that the petitioner has mentioned false or fictitious statements while processing the credit information and net-worth assessment of the borrowers in the loan proposals, which clearly reflects his malafide intention of concealing the facts and deviating the procedures of the Bank. Secondly, it was contended that the quantum of misappropriation amount being very high and the petitioner being a local person, he is very likely to influence and gain over the witnesses in case he is enlarged on bail and therefore, the bail application should be rejected. The Court referred to the case of Prahalad Singh Bhati -Vrs.- NCT, Delhi [(2001) SCC 674] wherein it was said that “While granting the bail, the Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character, behaviour, means and standing of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public or state and similar other considerations”