Regulations issued under Section 35A of the Banking Regulation Act mandate that financial frauds involving more than three crores rupees be investigated by either branch of CBI depending on staff involvement.

JUDGMENT :

First petitioner is a Public Sector Bank. It alleges that Crime No.780/2022 of Kozhikode Town Police Station was registered at the instance of the second petitioner, alleging offences punishable under Sections 409 and 420 of the Indian Penal Code, 1860. The gist of the allegations as evident from Exhibit P1 is that, between the period 12.10.2022 and 25.11.2022, the accused who was the former senior Manager of the bank had cheated and defrauded the Punjab National Bank as well as the Kozhikode Corporation for an amount more than Rs.98,00,000/- (Rupees ninety eight lakhs) and thereby committed the offences alleged.

2. Subsequently, during the course of investigation by the local police, it was realised that the amount involved had swelled upto more than twelve and a half crores of rupees.

3. It is in such circumstances that the petitioner has approached this Court relying upon the Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and Select FIs) Directions, 2016 issued under Section 35A of the Banking Regulation Act, 1949. As per clause 6.1 of the said Regulation, the financial frauds involving more than three crores rupees and above has to be investigated by the Anti Corruption Branch of the CBI, if the involvement of the banking staff is evident and by the Economic Wing of the CBI if staff involvement is prima facie not evident.

4. Admittedly the crime was registered against the former senior Manager of the 1st petitioner. The learned Government Pleader has submitted, pursuant to the instructions from the 5th respondent that the amount involved in the offence alleged has swelled up to Rs.12,81,39,000/- (Rupees twelve crores eighty one lakhs and thirty nine thousand only).

5. I have heard Sri. K.P Sudheer, the learned counsel for the petitioner, Sri. Sreelal N Warrier, the Standing Counsel for the 1st respondent and Sri. K.A Noushad, the learned Public Prosecutor on behalf of respondents 3 to 5.

6. It is evident from a perusal of Exhibit P3 regulations that if the amount of fraud or cheating involved is more than three crores rupees, complaint has to be investigated by the CBI.

7. Admittedly, investigation conducted so far by the local police has revealed that the accused had cheated the 1st petitioner of an amount of more than twelve and a half crores of rupees. In view of the above circumstances and the regulations mentioned earlier, it is evident that Crime No.780/2022 of Kozhikode Town Police Station is required to be investigated by the Central Bureau of Investigation.

8. Therefore, the 5th respondent is bound to inform the crime to the 1st respondent who shall thereafter, take over investigation of the aforementioned crime and complete the investigation as early as possible.

The writ petition is disposed as above.