Loan fraud: Court rejects bail of ex-Chairman J&K Cooperative Bank

The Special anti-corruption court, Friday rejected bail application of  former Chairman J&K Cooperative Bank Limited (JKCBL), Muhammad Shafi Dar, in Rs 250 crore bank loan fraud.

After hearing special public prosecutors  Ghulam Jeelani, Riaz Ahmad, and defence counsel, the special anti-corruption judge, RN Watal said it has transpired from the police report that the accused facilitated preparation of a false, fabricated and fraudulent registration certificate of so called non-existent cooperative society and fraudulently sanctioned loan of Rs 250 core to it.

The court said the allegations against the petitioner were serious in nature and were incriminating also and demonstrate his unwarranted behaviour unbecoming of a public servant with “impious eye on public money” and its siphoning off pursuant to conspiracy with others.

“The Chairman JKCBL under well-knit conspiracy with the self styled Chairman of non-existent Co-operative Society under the name and style of River Jhelum Co-operative House Building Society Limited and some unknown persons facilitated the preparation of a false, fabricated and fraudulent registration certificate of so called non-existent cooperative society,” the court observed, adding he fraudulently sanctioned Rs 250 core loan as financial assistance to it for taking over 300 kanals land.

The court said prima facie it appears rules, regulations, credit policy of the bank for sanctioning the loan were thrown to winds.

“Loan was sanctioned without obtaining tangible security and even the documents were not scrutinized to see their genuineness and without looking into balance sheet and ascertaining the performance report of the society,” it said.

The court said accused was kingpin in the scam and has played a key role in “stealing” public money from the bank.

“Prima facie culpability of petitioner (the accused) in the scam is manifest from the evidence collected by the prosecution till date as is evident from the police report and the case dairy file. There are genuine and reasonable grounds for believing that accused has prima facie committed the offences,” the court said.

It said business tycoon Vijay Maliya and Nirav Modi were the examples who after taking bank loans from nationalized banks fled the country and were enjoying at present in foreign countries at the cost of peoples’ hard earned money.

“These white collar criminals have inspired some persons at present also who with nefarious intentions and with an aim to become rich overnight, have indulged in such activities and resultantly the bank scams have become a routine nowadays,” it said.

“I am of the considerate view that the petitioner has failed to carve out a prima facie case for bail for indulgence of this court. The bail application as such is rejected,” the court said.