Loan scam | Court rejects plea of 21 persons seeking to defreeze bank accounts

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The anti-corruption court here Friday rejected the application of 21 persons, seeking defreezing of their bank accounts by Anti Corruption Bureau (ACB).

The court clubbed the 21 applications moved by the applicants who had entered into an agreement of sale of land with the “non-existent cooperative society” allegedly involved in multi-crore bank loan scam.

After hearing special public prosecutors, Ghulam Jeelani and Riaz Ahmad, and defence counsels, the special anti-corruption judge, RN Watal said the petitioners whose defreezing of bank accounts have been sought have sale proceed transferred to these accounts, of the loan amount that was sanctioned fraudulently in favour of non-existent cooperative society.

The court observed that though some chargesheets have been laid before this court for judicial determination but the ACB was in process of collecting the evidence and laying down supplementary chargesheets against the government officers and officials of Cooperative department and some private persons involved.

“Therefore, at this stage it would not be proper and appropriate to defreeze the accounts of the petitioners,” the court said.

The court observed that portion of the amount received by petitioners was invested in mutual funds and transferred in some other accounts.

“Therefore the money in the accounts of the petitioners though being sale proceed, has been transferred to these accounts out of the loan amount fraudulently sanctioned in favour of non-existent cooperative society, as such the amount is suspected to be involved in commission of offences,” the court said.

It said that no prima facie case has been carved out by the petitioners for indulgence of the court for defreezing accounts of applicants to the extent of amounts of money that have been transferred to them out of the fraud loan. “Applications as such are dismissed,” the court said.

While referring to various provisions of law, the court said the petitioners have executed the agreement to sell their land to the management of non-existent Cooperative society.

“The Cooperative society becomes a legal person only after its registration and it is after registration that it acquires the capacity to enter into the contracts,” it said.

The court observed that the agreement between the petitioners and non-existent Cooperative society was “nullity in the eyes of law.”

“For all intents and purposes the land as such continues to be within the ownership and possession of the petitioners,” the court said.

The ACB has, in the loan scam, registered the case against former Chairman J&K State Cooperative Bank, Muhammad Shafi Dar and others for sanctioning loan of Rs 250 crore in favour of the non-existent River Jhelum Cooperative House Building Society for construction of a satellite township at ShivPora here.