A retired senior official of State Bank of Patiala and a private person have been sent to five years in jail by a special court in a 31-year-old case of corruption and misappropriation of funds.
The court awarded the jail term to 74-year-old C V Madan, who was a Branch Manager in State Bank of Patiala in Janakpuri area of West Delhi, and 70-year-old H S Nageshwaran, Chief Executive Officer of Keming Tools Company Ltd, for offences of cheating, criminal conspiracy under the IPC and under the Prevention of Corruption (PC) Act.
Special CBI Judge Pitamber Dutt held the firm guilty of cheating and offences under the PC Act and sentenced it to Rs 1.01 crore fine. The court also imposed a fine of Rs three lakh and two lakh on Madan and Nageshwaran respectively.
While convicting Madan, the court said, being a public servant, it was his duty to protect the interest of bank but instead, he indulged in act of corruption and disbursed a loan of Rs 3.75 crore in favour of accused firm M/s Keming Tools Company Ltd illegally and unauthorisedly without any appraisal or sanction by higher authority.
"The said loan was disbursed by Madan in furtherance of criminal conspiracy hatched by him with convict firm and Nageshwaran, the purpose of which was to cause wrongful loss to the bank and corresponding wrongful gain to himself and co-accused persons," it said.
"When the protector of public trust becomes destroyer, then the very root of the society is affected. When a public servant who was working in a bank starts treating public money as his personal property then he not only commits criminal act but erodes the faith of citizens of a country in the banking institution," the court said.
According to CBI, a complaint was lodged by the regional manager of the bank in May 1987 against Madan, Nageshwaran, the company and others alleging that they had hatched a conspiracy, with Madan releasing Rs 3.75 crore as loan in favour of the firm without any sanction and authorisation.
It said that Madan had opened an account in the firm's name and Nageshwaran was its authorised signatory and the manager transferred Rs 3.75 crore in it in December 1986.
It further alleged that Nageshwaran had diverted Rs 357.61 lakh from the account with the help of Madan and three other accused who have now died.
During trial, the accused denied their involvement in the commission of offences and stated that they have been falsely implicated in this case.
Rejecting the claim of convicts that no pecuniary loss has been caused to the bank as the firm paid the outstanding money as per the settlement, the court said it was not sustainable as even after making payment, the bank had suffered loss of Rs 3.59 crore as per the testimony of a defence witness.
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