CVC told to vet PNB write-off

CVC told to vet PNB write-off
AGENCIES

NEW DELHI, FEB 20: The Delhi High Court today directed the CBI to send to the Central Vigilance Commission its investigation report on the alleged writing off of the loan of a company by Punjab National Bank’s former chairman and managing director Rashid Jilani and some other officials that caused a loss of Rs 40 core to the bank.

A Bench comprising Justice Anil Dev Singh and Justice O P Dwivedi also directed CBI to expedite probe into another case of alleged writing off of loans amounting to Rs 13 crore to two Bajoria group companies by Jilani in 1994.CBI’s Anti-Corruption branch had sent its first report on the matter to CVC after securing the opinion of the Advisory Board on Bank Fraud (ABBF) in Union Finance Ministry, but the second report prepared by the agency’s Banking Cell was not sent to the Commission, CBI counsel A K Dutt told the court. Both anti-corruption branch and Banking Cell of CBI had come to the conclusion that “prima facie” no case was made out in the first matter, while the agency had registered an FIR against Jilani in the second case related to Bajoria group, Dutt told the court. However, this was strongly opposed by counsel for All India Lawyers Forum for Civil Liberties, which had filed a petition seeking thorough probe into the case saying that PNB had been put to losses worth several crores rupees by certain decisions of Jilani allegedly providing pecuniary benefits to these companies at the cost of bank’s assets.

AILFCL counsel Pradeep Nandrajog contended that CBI had closed the case in the first matter only after ABBF’s opinion, which, he said, was “politically influenced”. The court after perusing CBI’s status report on progress of the investigation, said the banking cell of the agency had come to the conclusion that no FIR could be registered in the first case, but the matter was not forwarded to CVC.

According to AILFCL petition, PNB had to recover Rs 50 crore from a company of Ajay Poddar in Mumbai and had filed a suit against it in 1994. Poddar had mortgaged with the bank a property worth Rs 79.76 crore as security against the due amount and in February 1994 offered to settle the dispute by making a payment of Rs 10.69 crore, the peition said.

The company subsequently issued a cheque for the same amount, while the bank revised the offer and sought to settle the matter for payment of Rs 13.01 crore. The company later issued a further cheque to make up the amount, it said. Jilani and some other bank officials subsequently took a decision to release the property to Poddar and thus settled the Rs 50 crore dues on payment of Rs 13.01 crore, it alleged.

It said in the second case, Rs 3 crore liability of Bajoria’s company Solarsons Industries Ltd were allegedly written off by Jilani in February, 1994, while Rs 10 crore dues from the group’s another company Willard India Ltd were written off in December, the same year. Loans worth Rs 24 crore to both the group companies were given by the bank on personal guarantee of K K Bajoria, AILFCL counsel claimed.