IMPORTANT POINT
The court emphasized that a trial judge must assess prosecution materials to determine if there are sufficient grounds for proceeding against the accused, particularly in cases of alleged financial misconduct.

ORDER :

1. The 4^th accused in C.C.No.5/2017 on the files of the Special Judge (SPE/CBI)-I, Ernakulam, has filed this criminal revision petition under Sections 397 and 401 of the Code of Criminal Procedure, 1973 (hereinafter referred to as ‘Cr.P.C’ for short), challenging order in Crl.M.P.No.43/2021 in the above case, dated 10.12.2021, whereby the learned Special Judge (CBI) dismissed the application filed by the revision petitioner under Section 239 of Cr.P.C. seeking discharge.

2. Heard the learned senior counsel for the revision petitioner/4^th accused and the learned Standing Counsel for the CBI. Perused the relevant documents and the order impugned.

3. In this matter, the prosecution alleges commission of offences punishable under Sections 120B, 409 and 420 of the Indian Penal Code (hereinafter referred to as ‘IPC’ for short) as well as under Section 13(2) r/w 13(1) (c) and (d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘the PC Act’ for short). Tracing the genesis of the prosecution case, it is discernible that, when a complaint filed by the Regional Manager, State Bank of India (SBI), Regional Business Office (RBO), Shornur, Kerala, in the year 2016, against six accused persons and after completing the investigation, final report was filed against five accused persons after treating the other accused person as an ‘approver’.

4. The allegation in brief, as per the charge, is that, Shri.M.M.Shoukkathali (A1), Proprietor of M/s.M.M. Traders, approached State Bank of India, Kunnamkulam branch on 20.01.2015, for an Asset Based Loan (ABL) facility of Rs.7.00 Crores (Rupees Seven Crores only) for the purpose of business of dealing in ‘areca-nut and pepper’ on the security of a property with a residential building in 13.63 Ares of land in Survey No.333/1H of Vadanappilly Village, Chavakkad Taluk, Thrissur District. The loan was processed by the Medium Enterprises Hub of SBI, Thrissur, since the applied loan amount limit falls under its purview. The Medium Enterprises Hub, Thrissur, obtained an inflated valuation report from their two valuers, namely, Shri.Sanoj.P.Vincent (2^nd accused) and Shri.A.M.Shereef (3^rd accused) for Rs.15.11 Crores and 16.00 Crores respectively. On the basis of this inflated valuation report, the bank has sanctioned a loan amount of Rs.7.00 Crores to Shri.M.M.Shoukkathali (1^st accused) and loan documents were executed by the borrower on 21.03.2015. The loan amount was disbursed by the bank and was withdrawn by the borrower on the same day. At the time of sanctioning the loan, all property documents like mutation certificate, title deed, etc., were not obtained by the bank. The collateral security property was purchased by the borrower on 20.03.2015. The loan agreement and documents were executed by M/s.M.M.Traders on 21.03.2015. Loan amount was sanctioned and disbursed on the same day. But the borrower created an equitable mortgage of the property offered as a security only on 28.03.2015. These facts revealed that the public servants showed undue haste in the sanctioning and disbursement of loan, that too, even before creation of equitable mortgage. The property was purchased by the borrower for Rs.1.00 Crore, but the very next day, the Bank sanctioned loan for Rs.7.00 Crores by accepting the said property as collateral security. Subsequently, on the request of the borrower, the bank sanctioned two more ad-hoc loans of Rs.50 lakhs each on 01.06.2015 and 10.08.2015. The loan became NPA on 27.09.2015 and even then, another ad-hoc loan of Rs.22 lakhs were sanctioned on 30.09.2015. The above acts of these persons caused a huge wrongful loss to the bank and corresponding gain to the accused persons.

5. The petitioner