Following raids, ACB registers case in a bank loan


Anti-Corruption Bureau, Jammu Thursday booked management, officers and officials of J&K Bank along with illegal beneficiaries involved in financial irregularities/loan fraud worth crores of rupees and conducted searches at various premises, an official statement said.

The statement said a joint surprise check was conducted by ACB on account of allegations of financial irregularities committed by officers and officials of J&K Bank, wherein it was revealed that various loan facilities were extended to proprietors of a partnership firm M/s Paradise Avenue during 2012 to 2017, in contravention to laid down procedures and resultantly the loan accounts turned into NPA.

“During checking it was found that proprietors of the firm approached J&K Bank, Branch New University Campus Jammu for availing of loan facility of Rs 74.27 crore for setting up a residential township complex under the name and style of ‘Paradise Avenue’ at Narwal, Jammu consisting of 52 flats in each of the towers named Eden & Zion. The loan amount was sanctioned on 30.01.2012 with one of the prerequisite conditions that it has to be disbursed in a phased manner after securing margin of Rs 22.09 core including the unsecured loan of Rs 2 core from borrowers on pro-rata basis,” the statement said.

“On scrutiny of records it surfaced that loan was in fact  sanctioned by the Bank in January 2012 which paved way for the firm to purchase 30 kanals of land from different land owners through registered sale deeds in July 2012 after a gap of six months from sanctioning of loan in favour of the firm meaning thereby that the loanee firm had no title of land in its name when the loan was sanctioned which had to be mortgaged to the bank, the statement said, adding under a pre designed conspiracy hatched by the loanee firm with the bank officials, the amount of sale consideration reflected in the sale deed was shown paid through cheques to the land owners fraudulently and dishonestly with inflated cost of the land whereas, those cheques were actually taken back from the land owners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with objective to buy land in question out of the loan amount alone sanctioned by the bank,” it said.

“Since, the proprietors of the firm and the bank officials were fully aware about the rules/norms governing the subject that the loan amount cannot be sanctioned against purchase of land for raising of residential township which is a commercial activity, they in league with the bank officials of the branch in order to seek release of the loan amount had also issued letters addressed to the bank indicating therein that the landowners had supplied construction material to the firm whereas in actual no such material had been in fact purchased by the firm from the suppliers. These were, in fact, sham transactions with a motive to siphoning off the bank money,” the statement said.

It said on further scrutiny of bank records it surfaced that as per terms and conditions the bank was to release the amount in a phased manner, however, by March 2014, it had instead made 100% disbursement in first phase only thereby conferring an undue pecuniary advantage upon the beneficiary firm. The statement said the firm borrowed three additional loans worth 68.91 crores, 20 crores and 14.5 crores.

“Hence in total, the proprietors of the firm managed to obtain Rs 177.68 crore loan illegally and fraudulently in connivance with bank management.  The repayment of the loan was to start from September 2017 with a quarterly installment of Rs 11.27 crore, however, the proprietors turned willful defaulters by not making repayment with sole objective to get their loan account declared into NPA and consequently they succeeded in their goal wherein on 31.12.2017 loan account was declared NPA by the bank management,” the statement said.

“The deep-rooted conspiracy between bank management and beneficiary firm is evident from the fact that the principal loan of Rs 177.68 crore was settled at Rs 130 crore under One Time Settlement (OTS) illegally and against the bank norms thereby the bank management by abuse of their authority waived off Rs 50 crore on principal amount which has inflicted a huge loss to the bank. Even in response to OTS, the cheque issued by the borrower for Rs 40 crore towards OTS has bounced,” said the statement.

“As the facts and the circumstances which emerged during the JSC vis-à-vis scrutiny of records of the bank disclosed commission of criminal misconduct by bank management/officers/officials of J&K Bank and the partners of the beneficiary firms and others, which constituted offence U/s 5(1) (d) of the J&K PC Act Svt. 2006 r/w 120-B RPC punishable u/s 5(2) of the Act. Consequently, a formal case FIR No. 13/2019 was registered in P/S ACB Jammu for investigation,” it said.

“After the registration of the case searches were conducted at various premises of individual and companies connected with the firm after obtaining search warrants from the court. During the search, incriminating material such as laptops/ documents etc were seized. The investigation of the case is going on,” said the statement.


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