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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M.I.ARUN
Prashanth B. Hegde, S/o. Rathnakarhegde – Appellant
Versus
Superintendent Of Police, CBI, BS and FC, Bengaluru – Respondent
ORDER :
M.I.ARUN, J.
Petitioner No.3 is a private limited company and petitioner Nos.1 and 2 are its directors. Petitioner No.3 borrowed a loan from a consortium of banks headed by the State Bank of India (for short, 'the SBI'). It has committed default in repayment of the said loan. The loan account has been declared as a Non-Performing Asset (NPA). The banks have initiated recovery proceedings. In the process, they discovered that they have been defrauded by petitioner No.3-private limited company, its directors and some of its employees. Hence, the SBI lodged a complaint with respondent No.1-Central Bureau of Investigation (for short, 'the CBI') on 16.10.2017, wherein they have made allegations on the petitioners, their auditors and their employees. However, in the complaint, they have categorically stated that they do not suspect any of their employees being involved in the said offences. Paragraph No.13 of the complaint reads as under:
"13. Subsequent to the account becoming a NPA, staff accountability exercise had been conducted by the Bank, which did not reveal any malafide discernible on the part of any of the bank officials, who dealt with the account during the material time
The Reserve Bank of India's guidelines do not confer jurisdiction upon the CBI to investigate bank fraud without prior state consent as mandated by the Delhi Special Police Establishment Act.
Criminal conspiracy in terms of Section 120-B of the Code is an independent offence. It is punishable separately.
Section 35A of the Banking Regulation Act does not empower banks to request the transfer of investigations to the CBI, as this would violate the provisions of the DSPE Act.
The court clarified that the CBI had jurisdiction to investigate the case without specific consent under Section 6 of the DSPE Act and that the lack of specific consent did not result in a miscarriag....
The ACB in Rajasthan can investigate and file charges against Central Government employees for corruption if committed within state jurisdiction, despite CBI’s authority.
The High Court can direct the CBI to investigate cognizable offences without state consent, especially in cases involving significant public interest and international ramifications.
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