MUMBAI: A special CBI court convicted a retired bank manager and nine others in a loan fraud case from 2004 on Tuesday, sentencing them to prison terms ranging from one to five years.
The masterminds, Kashinath and Ganesh Pandurang Jadhav, received five years in prison, while former bank official Metha Sastry was given a one-year sentence under the Prevention of Corruption Act.
Sastry, the senior manager at the Central Bank’s Prabhadevi branch in Mumbai, neglected essential pre- and post-sanction inspections. The court noted that these checks would have revealed the fraudulent nature of the buyers and their documents.
Charges against former chief manager Narain Mathur were dismissed posthumously as he died during the prolonged 20-year trial.
According to the prosecution, several accused utilized 17 forged sale agreements to secure housing loans from the Central Bank, falsely claiming to purchase flats from Shreeram Sthapatya Construction at Spring Field Apartment in Vasai, without actually buying any flats.
The Jadhav brothers opened fake bank accounts in the name of the construction firm at Punjab National Bank. When the Central Bank of India approved the loans, the disbursal cheques meant for the real builder were diverted to the Jadhavs’ accounts and promptly withdrawn.
The CBI stated that the implicated bank officials failed to verify the validity of loan applications or security offered before disbursing loans totaling Rs 67,70,000, of which Rs 48,63,039 remained unpaid.
The owner of the construction company testified that the signatures on the loan agreements were forged, and the flats were sold to different genuine buyers.
The court sentenced the fraudulent purchasers to one year in prison.
