New Delhi, Oct 16 (PTI) The Supreme Court on Wednesday dismissed the CBI’s plea challenging an order of the Gujarat High Court which discharged former chairman and managing director of the Central Bank of India in a case relating to Rs 436.76 crore loan scam.
A bench of Justices Abhay S Oka and Ujjal Bhuyan said there is no material placed in the charge sheets to show that Srinivas Sridhar has played any role in sanction of ‘standby letter of credit’.
A standby letter of credit is a bank’s commitment of payment to a third party in the event that the bank’s client defaults on an agreement.
“After perusing the entire material and taking it as correct, perhaps the only material that creates suspicion is the speed with which the proposal of the Company was sanctioned.
“As far as the respondent (Sridhar) is concerned, considering his position and the role ascribed to him in the grant of sanction to the loan proposal of the Company, mere suspicion against him is not enough to frame a charge against him,” the bench said.
The top court said the proposal had passed through the Loan Advisory Committee which recommended the same and the proposal was placed before Sridhar on August 10, 2010.
“As the credit proposal was beyond the sanctioning authority of the respondent, it was directed to be placed before the Management Committee. Apart from the Loan Clearance Committee, the proposal was approved by the Bank’s Chief General Manager (Credit),” the bench said.
The apex court said Sridhar’s role started with signing the memorandum after it was approved by the chief general manager (credit) and the executive director.
The respondent’s role was confined to signing the memorandum prepared by the senior officers and participating in the management committee meeting, which approved the proposal, it said.
“No material is placed on record to show that any of the accused other than bank officials ever met the respondent before the sanction of the proposal by the Management Committee. Only because the entire proposal was processed and cleared within a short span of time, no offence is made out against the respondent. Taking the material in the charge sheet as it is, complicity of the respondent is not made out,” the bench said.
A total of seven persons, including Sridhar, were charge sheeted in 2014 with corruption, criminal conspiracy and cheating by extending a huge loan to Electrotherm India Ltd to set up a steel plant in Tanzania.
The company claimed that it was awarded a contract by Kamal Alloys Ltd., Tanzania, for the execution/setting up of a steel plant in Tanzania on a turnkey basis.
During 2010-2011, the bank sanctioned short-term loan of Rs 50 crore, letter of credit having a limit of Rs 100 crore; and export packing credit (EPC) facilities of Rs 330 crore to the company.
The bank disbursed a sum of Rs 247.50 crore against EPC on various dates.
The allegation is that instead of using Rs 247.50 crore for procuring raw material for the project, the amounts were transferred by the company to its accounts with various other banks as well as to builders. PTI PKS PKS KVK KVK
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