Mumbai, March 24 A special CBI court here on Tuesday convicted a retired bank manager and nine others in a 2004 loan fraud case, and sentenced them to prison terms ranging from one year to five years.
The masterminds of the crime, brothers Kashinath Jadhav and Ganesh Pandurang Jadhav, were sentenced to five years' imprisonment, while former bank official Metha Sastry was sentenced to one year's imprisonment under the Prevention of Corruption Act.
Sastry, then a senior manager at the Central Bank's Prabhadevi branch in Mumbai, failed to conduct the mandatory pre-sanction and post-sanction inspections. The court said that if these inspections had taken place, the bank would have discovered that the so-called buyers did not actually own the flats and that the documents were fraudulent.
Narain Mathur, then the chief manager, died during the 20-year-long trial, leading to the dropping of charges against him.
According to the prosecution, some of the accused used 17 forged sale agreements to apply for housing loans from the Central Bank, claiming to be purchasing flats from Shreeram Sthapatya Construction in Spring Field Apartment in Vasai. They did not actually buy the flats.
Kashinath Jadhav and Ganesh Pandurang Jadhav opened bogus bank accounts in the name of the construction firm at Punjab National Bank.
Once the Central Bank of India sanctioned the loans, the disbursement cheques, which should have gone to the actual builder, were instead deposited into the Jadhavs' accounts and the money was immediately withdrawn.
The CBI claimed that the accused bank officials did not verify the genuineness of the applicants, the purpose of the loan, and the security offered before disbursing loans of Rs 67,70,000, of which Rs 48,63,039 was outstanding.
The owner of the construction firm testified that the signatures on the loan agreements were not his, and that the flats in question had actually been sold to entirely different, genuine buyers.
The court sentenced the fake purchasers to one year's imprisonment.
