ABDUL MALIK H TEJANI Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) AS soon as the petitioner was arrested on 21.10.1996 in connection with CR No.95 of 1996 registered at General Branch, Crime Branch CID, Mumbai and was produced before the Additional Chief Metropolitan Magistrate, 37th Court, Esplanade, Mumbai, on 22.10.1996, he moved application for bail. It came to be rejected on 23.10.1996. On the same day he moved Sessions Court, Greater Bombay, for bail but that was also rejected on 25.10.1996. Thereafter twice petitioner was remanded to police custody and on each occasion he moved for grant of bail but those applications also came to be rejected by the Additional Chief Metropolitan Magistrate, 37th Court, Esplanade, Mumbai. The last application was rejected on 21.11.1996 and on that day the petitioner came to be remanded to judicial custody till 3rd December 1996. On 26th November 1996 this application is filed in the High Court for grant of bail. The offences which are alleged to be committed by the petitioner and others are stated to be under Ss.120(B) read with Ss.465, 468, 471, 403 and 423 IPC. Perhaps on the basis of news item published in Mid Day that some leather co-operative societies which were formed with a view to help the poor cobblers in their business were found indulging in malpractice, the General Branch, Crime Branch, CID, Mumbai, took cognizance. Thereafter, the Registrar of Co-operative Societies was asked to conduct enquiry and report about irregularities and the offences disclosed. I in that behalf following societies were referred to:

(2.) THE malpractices adopted by the societies are in the following ways: A financial institution styled as the Small Industrial Development Bank of India (SIDBI) is an wholly owned subsidiary of Industrial Development Bank of India (IDBI) established under the Small Industries Development Bank of India Act, 1989. The subsidiary commenced its operation from 2nd April 1990 as the principal financial institution for promoting, financing and developing industrial concerns in small scale sector and to co-ordinate functions of the institutions engaged in promoting, financing and developing industrial concerns in small scale sectors and for matters connected therewith. Under the aforesaid Act, the subsidiary is authorised to grant loans and advances to State Financial Corporation, State Industrial Development Corporation, Scheduled Banks, Co-operative Banks etc. by way of refinancing assistance provided to Public Lending Institutions (PLIs) against term loan sanctioned by them to the eligible borrowers to satisfy parameters laid down under the Automatic Refinance Scheme (ARS).

(3.) DURING the course of investigation, it was revealed that leading shoe companies in Mumbai such as Dawood Shoes & Co., Metro Shoes & Co., Milano Shoes and others have exploited the benefit which was made available to poor cobblers under the above mentioned schemes. In that, owners/directors of the leading shoe companies were found to have taken over the control of the existing co-operative societies of cobblers and with the help of their associates, enrolled many bogus/non-existent members on the records of the societies and filled in loan application forms in the names of such bogus members by affixing photographs of unconcerned persons and submitted there applications to PLIs and obtained crores of rupees by way of loans. The owners/directors of the aforesaid companies and business groups and their associates stood as guarantors for all these fake/bogus applicants and obtained loans which were siphoned for their own use and nothing has gone to the share of poor cobblers for whom the schemes were floated by the Government.