Point of Law : custodial interrogation is also necessary not only for protecting the interests of the bank but in the interest of public at large who deposit their hard earned money in the banks.

ORDER :

These petitions under Sections 438 of Code of Criminal Procedure are in relation to FIR no.7/2021 dated 10.12.2021 under Sections 409, 420, 467, 468, 471, 120B of the Indian Penal Code and Section 13(1) of the Prevention of Corruption Act, registered at Police Station State Vigilance & Anti Corruption Bureau, Una, Himachal Pradesh.

2. The FIR emanates from an inquiry conducted by the State Vigilance Department on a complaint received through the office of ADGP/SV&ACB HP Shimla vide letter dated 20.12.2018 enclosing therein a letter dated 5.12.2018 of the Principal Secretary (Vigilance) to the Government of HP conveying approval of the Government to conduct detailed inquiry into the allegations that a loan of Rs. 19.50 Crores was disbursed to a bogus firm M/S UR Sinter Pvt. Ltd. Amb District Una (hereinafter referred to as the Company) by the Kangra Central Cooperative Bank (KCCB for short).

The FIR has been registered against ;- (i) the loan committee members of KCCB namely S/Sh. Karnail Singh Rana [petitioner in Cr.MP(M) No. 398/22], Lekh Raj Kanwar [petitioner in Cr. MP(M) No. 399/22], Yog Raj[ petitioner in Cr.MP(M) No. 397/22], Prakash Chand Rana [petitioner in Cr.MP(M) No. 396/22] (ii) the then MD of KCCB Ms Rakhil Kahlon (iii) the directors of the Company M/S UR Sinter Pvt. Ltd namely S/Sh. Shivam Seth [petitioner in Cr.MP(M) No. 317/22], Bhuvnesh Uppal, Chetan Negi [petitioner in Cr.MP(M) No. 361/22], Pradeep Jamwal (iv) owners of concerned firms namely M/S Maa Chintpurni, M/S Madan Foundry, M/S Supra Enterprises, M/S V.S. Traders & (v) valuers S/Sh. Rajinder Dhiman and Narinder Paul Saini.

In the first set of petitions bearing no. Cr.M.P.(M) Nos. 317 & 361, the petitioners are the directors/promoters of the Company and in petition No. Cr.MP(M) No. 362/22, petitioner Sunita Seth is a beneficiary of the loan amount and is mother of Shivam Seth [petitioner in Cr.MP(M) No. 317/22].

In the second set of four petitions bearing Cr.MP(M) Nos. 396-399 of 2022, petitioners are members of the Loan Committee of Kangra Central Cooperative Bank (KCCB) and also the elected directors of KCCB, a cooperative society with Dharamshala as its Head Office.

Being interconnected, with interwoven facts and arising out of same FIR, these petitions have been taken up together for adjudication.

3. Based upon the inquiry conducted thus far, the prosecution case is that;-

3.i) Stage A (Loan applied for by the Company for the first time)

3.i) a) M/S UR Sinter Pvt. Ltd (the Company) was registered with the Registrar of Companies Punjab, HP and Chandigarh on 19.10.2012. The registered office of the Company is situated at village Bambloo, Tehsil Amb District Una. It had four directors namely S/Sh. Shivam Seth, Bhuvnesh Uppal, Pradeep Jamwal and Chetan Negi.

3.i)b) On 25.1.2014, the Company applied for a composite loan of Rs. 19.50 Crores [ Term Loan(TL) of Rs. 4.50 Crore & Cash Credit Limit(CCL) of Rs. 15 Crores] to the KCCB Amb, Una. Loan was applied for installation of a unit for sintering and manufacture of grass cutting machines at village Bambloo, Teshil Amb, District Una H.P.

3.i)c) The loan application was turned down by the Loan Committee of KCCB on 26.2.2014 for the reason that majority of the promoters of Company were from Punjab and the immovable properties offered as collateral were also situated outside Himachal. The Loan Committee reasoned that the KCCB had a very restricted area of operation therefore it was not possible to keep a close watch on such securities situated outside the State.

3.ii) Stage B (Company applied for loan the second time)

3.ii)a) Within two months of rejecting the loan application of the Company, the loan committee on 23.4.2014 resolved to refer the Company’s proposal for appraisal to NABCONS (NABARD Consultancy Service Pvt. Ltd.).

3.ii)b) NABCONS concluded that the project was technically feasible and financially viable. Based on this report, the Loan Committee in its meeting on 27.3.2015, accorded in principle approval