Jail for retd bank manager, 9 others in 2004 loan fraud case

Mumbai: A special CBI court on Tuesday convicted 10 persons, including a 77-year-old retired senior bank manager, for diverting housing loans of Rs 67.7 lakh from Central Bank of India's Prabhadevi branch to fictitious accounts in 2001-04 through sham profiles and forged documents.The mastermind, Jacob Circle resident Kashinath Jadhav (65), was sentenced to five years of imprisonment and fined Rs 20 lakh. His brother, Ganesh Jadhav (63), also received a five-year sentence, along with a fine of Rs 15 lakh for his involvement in the criminal conspiracy. Dismissing their pleas for leniency due to their advanced age, special judge Amit V Kharkhar said, "Considering the nature of the offence, including forging documents, opening bank accounts in fictitious names and siphoning of money, a lenient view cannot be taken." The court sentenced eight others, including then senior bank manager Metha Sastry, to one year in jail and fined each Rs 5,000. "[Sastry] abused his official position as a public servant and did not observe the mandatory guidelines while sanctioning the loan and helped other accused obtain pecuniary advantage without any public interest," it said. Seven of the eight who got a one-year jail term acted as "flat purchasers" to obtain the fraudulent loans. The judge noted that their claims of being "bona fide purchasers" lacked merit as they never sought possession of the flats or protested when those were not handed over. Sandeep Singh, special public prosecutor for CBI, cited the evidence of almost 60 witnesses to seek the conviction of the accused. He sought severe punishment, saying the offence was a fraud on the nation's economy. The trial saw proceedings abate against then chief manager Narain Mathur, clerk Junaid Muallim, and borrowers Sunil Paladia and Rasiklal Shah due to their deaths. Cases against three other alleged conspirators—Sajjad Ghandlawala, Dinesh Sharma and Ketan Kantibhai—remain separated as they haven't been traced. The case was lodged in 2004. While the bank did not report the incident, CBI registered it based on information received by the superintendent. The information alleged a chief manager at Central Bank of India with a Rs 1-lakh sanctioning limit conspired with many persons to defraud the institution. The prosecution detailed how 17 fabricated agreements for flats in Vasai were used to induce the bank into sanctioning loans. The Jadhav brothers opened fictitious accounts in the name of a builder's firm, and along with Ghandlawala, they set up more loan accounts at the bank's Prabhadevi branch. Sastry and Muallim facilitated the fraud by failing to verify applicant identities, loan purposes or securities, and neglected both pre- and post-sanction inspections. Ultimately, Rs 67.7 lakh was disbursed, leaving an outstanding balance of Rs 48.6 lakh.