16 July 2025 Corruption >> Criminal Law  

A criminal revision petition filed by the 4th accused, Shri. Radhakrishnan Nair.P, who served as the Regional Manager of State Bank of India (SBI), challenging the Special Judge (CBI)'s decision to dismiss his application for discharge in a criminal case. The case, C.C.No.5/2017, involves allegations of criminal conspiracy, criminal breach of trust, cheating, and offences under the Prevention of Corruption Act.

The prosecution's case stems from a complaint by SBI in 2016. It alleges that Shri. M.M.Shoukkathali (A1) obtained an Asset Based Loan (ABL) of Rs. 7.00 Crores in January 2015 for an "areca-nut and pepper" business. The loan was sanctioned based on inflated valuation reports of a property, procured from two valuers (A2 and A3), showing values of Rs. 15.11 Crores and 16.00 Crores, respectively. Crucially, the property, purchased by the borrower for only Rs. 1.00 Crore the day before the loan sanction, was accepted as collateral. The loan was sanctioned and disbursed with "undue haste" on March 21, 2015, even before the equitable mortgage was created on March 28, 2015. Subsequent ad-hoc loans were also sanctioned, and the account became a Non-Performing Asset (NPA) by September 27, 2015, resulting in a wrongful loss of Rs. 2.78 Crores to the bank.

The 4th accused (petitioner) and 5th accused (Shri. Appu Mathew Jose), both public servants, are accused of abusing their official positions, entering into a criminal conspiracy, and dishonestly processing, sanctioning, and disbursing the loan by violating banking principles.

The petitioner argued for discharge on two main grounds:

1. The trial court's order mistakenly referred to him as 'A5' instead of 'A4', suggesting a lack of application of mind.
2. Violation of loan processing guidelines alone should not constitute criminal offenses, and this was the sole allegation against him.

The CBI, however, countered that the misidentification of the accused number was a minor error and that the trial court had indeed applied its mind. The CBI highlighted that the 4th accused, as the Regional Manager and head of the Regional Credit Committee (RCC), failed to convene a mandatory RCC meeting for the loan proposal. Witnesses (CW10 and CW15), who were RCC members, stated they never participated in such a meeting, and the loan was nevertheless forwarded to the Zonal Credit Committee (ZCC) and disbursed with undue haste. This, coupled with the highly inflated property valuation, prima facie indicated the 4th accused's involvement in the conspiracy.

The Court, referencing established legal principles for discharge applications, concluded that there was sufficient prima facie material to show the 4th accused's involvement in the crime as part of a conspiracy. The inflated valuation and the irregular loan sanctioning process, without a proper RCC meeting, demonstrated his role in granting undue pecuniary advantage to the 1st accused. Therefore, the revision petition was dismissed, upholding the trial court's decision that the petitioner must face trial.

Prevention of Corruption Act, 1988