FIR alleging bank loan fraud quashed absent prima facie dishonest intention at inception, forensic audits/bank decisions confirming no diversion, recoveries/repayments evidencing bona fides, preventing roving inquiry.

JUDGMENT :

Shree Chandrashekhar, CJ.

The GTL Limited represented through its authorized representative is seeking quashing of the First Information Report registered by the Central Bureau of Investigation (in short, CBI) on 21^st January 2023 against the GTL Limited, unknown directors of the GTL Limited, unknown bank officers and unknown private persons including the vendors and beneficiary group of the GTL Limited.

2. A Preliminary Enquiry vide PE 2192022E0001 was conducted into the allegation made in the complaint dated 14^th July 2021 submitted to the CBI. After the inquiry, the CBI registered a crime vide RC2192023E0003 on 21^st January 2023 under section 120-B read with section 420 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988. This was the allegation against the GTL Ltd. that it fraudulently obtained various credit facilities from the consortium of banks and diverted/siphoned off major part of the loan amount to various vendor-companies which were created and operated with the mala fide intention in conspiracy with such vendors.

3. In brief, on conclusion of the Preliminary Enquiry a written complaint dated 16^th January 2023 was submitted by the Inspector, CBI, EO-I, New Delhi and on that basis a First Information Report was registered. The allegation against the petitioner-company is that it generated Rs.1400 crores from capital non-convertible debentures and availed credit facilities from a consortium of 24 banks to the tune of Rs.4760.01 crores. A short-term loan was availed by the petitioner-company on a misrepresentation that the loan amount shall be utilized for the business activities. However, the petitioner-company cheated the lender banks and misappropriated the funds by providing advances to the purported vendors. A substantial part of such advances remained outstanding and a part of it was routed back to the petitioner-company by the vendor-entities. The petitioner- company utilized the working capital funds availed from the bank to acquire fixed assets from the vendors and investments were made by it in other companies through purchase of shares. According to the CBI, the inquiries revealed that the petitioner- company provided advances to the vendors year after year and without supply of materials and eventually those advances were provisioned. The vendor-companies were not supplying the goods commensurate with the advances given to them and none of the vendor-companies supplied goods more than 16% of the advances given to it. There was supply of materials worth only Rs. 347.32 crores by M/s. Acuity Trading Pvt. Ltd., M/s. Lenity Trading Pvt. Ltd., M/s. Venerate Trading Pvt. Ltd. and M/s. Vinamra Multitrading Pvt. Ltd. but they were provided Rs.1213.97 crores as in advance. It is further alleged that the vendor-companies were incorporated within a short span of less than three months. The account of the petitioner-company was red-flagged by the IDBI Bank Ltd. pursuant to the advice received from the RBI for a Forensic Audit Report and M/s. NBS & Co. was appointed to conduct the forensic audit of the petitioner-company. In the complaint, there is a mention of part of the Forensic Audit Report to the effect that no material was received by the petitioner- company against the advance of Rs.1141.84 crores given to the vendors in FY 20