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MAHESH CHANDRA TRIPATHI, PRASHANT KUMAR
Simbhaoli Sugars Limited – Appellant
Versus
State Bank Of India – Respondent
JUDGMENT :
1. Heard Shri Rohan Gupta, learned counsel for the petitioner, Shri Anurag Khanna, learned Senior Advocate assisted by Shri Sandeep Arora, learned counsel for the State Bank of India, Shri Ashok Shankar Bhatnagar, learned counsel for Punjab National Bank and Oriental Bank of Commerce, Shri R.V. Pandey, learned counsel for the Bank of India, Shri Yashwant Singh, learned counsel for the UCO Bank, Sri Manish Trivedi, learned counsel for the ICICI Bank, Sri Abhinav Mehrotra, learned counsel for Bank of Baroda and Shri Nishant Mehrotra, learned counsel appearing for one of the Directors and Shri Ravindra Singh, learned counsel for Intervening Applicants (Cane Co-operative Societies).
2. This is a shocking case of clear connivance of unscrupulous businessman and banks, wherein the bank officials have knowingly allowed the petitioner to syphon away almost Rs.1300/- crores of the public money. Here the banks had advanced hundreds crores of rupees to the petitioner company knowing the fact that they have already defaulted with the loans taken by other banks previously and been declared N.P.A., still the banks went ahead and approved loans running into several hundred crores and the
Failure to adhere to RBI guidelines in loan disbursement constitutes fraud, leading to contempt for willful defaults and necessitating CBI investigation.
The judgment establishes that banks are liable for negligence in loan sanctioning, failing to comply with RBI guidelines, and engaging in connivance with borrowers, thereby enabling fraud.
Criminal conspiracy in terms of Section 120-B of the Code is an independent offence. It is punishable separately.
The main legal point established in the judgment is that the actions of the borrower-Company, including non-repayment, diversion of funds, and disposal of assets, constituted wilful default under the....
The court established that access to forensic audit reports is essential for fair proceedings in declaring individuals as wilful defaulters, ensuring adherence to natural justice.
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