New Delhi: The Supreme Court on Tuesday strongly criticised banks for their "active collusion" with borrowers in bank fraud cases leading to the misappropriation of public funds.
A division bench of Justices Surya Kant and N Kotiswar Singh also questioned the CBI for not investigating banks in corruption cases. Justice Kant asked the CBI's counsel why banks weren't being investigated despite their alleged involvement in various corrupt practices, suggesting the agency only acts on written complaints from banks. These observations were made during the hearing of the CBI's appeal against a Karnataka High Court order that had quashed criminal proceedings in a ₹30 crore bank fraud case involving a steel company. Justice Kant stated that banks merely aim to "save their skin" and emphasized the need to send a strong message to them.
The Bench disapproved of the HC's decision to quash the criminal proceedings, setting aside the order and restoring the case before the trial court. Justice Kant remarked on the HC's "excessive application of mind," noting that it had assumed the role of a trial court.
The SC refused to solely rely on an auditor's report that purportedly cleared the company, stating it would avoid the HC's mistake. While restoring the criminal proceedings against M/s Aradhya Steel Pvt. Ltd., the apex court allowed the company to file a discharge plea before the trial court. The prosecution's case alleges a criminal conspiracy by the accused to cheat banks by suppressing crucial information to secure credit facilities, subsequently misusing and misappropriating the funds, causing a loss of approximately ₹30 crore to one of the banks in the consortium. The company's counsel informed the SC about a one-time settlement with the bank and argued the CBI's investigation was flawed. However, this argument found little traction with the court. Justice Kant clarified that while criminal proceedings can be quashed in cases not involving public money, it is not permissible when public funds are involved and the public has been victimised.
A division bench of Justices Surya Kant and N Kotiswar Singh also questioned the CBI for not investigating banks in corruption cases. Justice Kant asked the CBI's counsel why banks weren't being investigated despite their alleged involvement in various corrupt practices, suggesting the agency only acts on written complaints from banks. These observations were made during the hearing of the CBI's appeal against a Karnataka High Court order that had quashed criminal proceedings in a ₹30 crore bank fraud case involving a steel company. Justice Kant stated that banks merely aim to "save their skin" and emphasized the need to send a strong message to them.
The Bench disapproved of the HC's decision to quash the criminal proceedings, setting aside the order and restoring the case before the trial court. Justice Kant remarked on the HC's "excessive application of mind," noting that it had assumed the role of a trial court.
The SC refused to solely rely on an auditor's report that purportedly cleared the company, stating it would avoid the HC's mistake. While restoring the criminal proceedings against M/s Aradhya Steel Pvt. Ltd., the apex court allowed the company to file a discharge plea before the trial court. The prosecution's case alleges a criminal conspiracy by the accused to cheat banks by suppressing crucial information to secure credit facilities, subsequently misusing and misappropriating the funds, causing a loss of approximately ₹30 crore to one of the banks in the consortium. The company's counsel informed the SC about a one-time settlement with the bank and argued the CBI's investigation was flawed. However, this argument found little traction with the court. Justice Kant clarified that while criminal proceedings can be quashed in cases not involving public money, it is not permissible when public funds are involved and the public has been victimised.
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