MOHAMMAD ALI PIRBHAI DODHIA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Rule. Learned Public Prosecutor, Mr.Arun D. Oza, waived service for the respondent-State.

(2.) These applications for regular bail under section 439 of the Code of Criminal Procedure are filed by the members of the board of directors and some of the persons in the management of the bank on whose behalf the F.I.R. dated 23.10.2000 was filed and which was registered as C.R. No.I-64 of 2002 in D.C.B. Police Station, Surat City. That F.I.R. alleged against 18 persons named therein the offences punishable under sections 408, 409, 420, 467, 471, read with sections 34, 114 and 120-B of the Indian Penal Code ('the I.P.C.' for short) and the relevant provisions of the Gujarat Co-operative Societies Act. Out of them, accused Nos.17 and 18 have been released on bail by the Sessions Court as being civil engineer and advocate, and that part of the order is under challenge in this Court. Accused Nos.13 to 16 are borrowers, loans to whom led the complainant-bank into such financial mess that thousands and thousands of depositors and shareholders of the bank had to see the cessation of the bank's normal operations.

(3.) Broad outlines of the allegations made against the accused persons are such that granting of huge loans to accused Nos.13 to 16 in complete disregard of banking regulations and guidelines of the Reserve Bank of India practically amounted to conspiracy to loot the bank and the acts of commission and omission revealed criminal breach of trust by office-bearers and officers of the bank. One group of borrowers to whom not more than 5.80 crores of rupees could have been advanced in accordance with the R.B.I. guidelines, even under the best of circumstances, was given away more than 39 crores of rupees even without proper security and verification of documents and jeopardising the liquidity of the bank. Such transactions in favour of the borrowers, who are accused Nos.13 to 16 or their companies, are alleged to have been entered into and carried out consciously, irregularly and illegally by the officers and office-bearers of the bank who could not have been unaware of the consequences. Not only that, but such officers and directors are alleged to have participated in passing of the necessary resolutions for disbursing the amounts even without the necessary formalities being followed and banking regulations being observed.