Bank manager denied bail in multi-crore fraud case

The Bombay High Court rejected the bail application of Nikhil Narendranath Roy, a former manager at the State Bank of India, Mazgaon Circle Branch, who is accused of planning a ₹36 crore fraud involving fixed deposit accounts of the Bombay Iron and Steel Labour Boar

Mumbai: The Bombay High Court rejected the bail application of Nikhil Narendranath Roy, a former manager at the State Bank of India, Mazgaon Circle Branch, who is accused of planning a ₹36 crore fraud involving fixed deposit accounts of the Bombay Iron and Steel Labour Board.

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Roy, aged 45, was arrested by the Economic Offences Wing (EOW) of Mumbai on May 10, 2021, after evading arrest for two years. His associates, Manish More and Sudhir Pawar were also detained shortly after, bringing the total arrests in the case to five.

The complaint, filed by Balraj Deshmukh, Chairman of the Bombay Iron and Steel Labour Board, detailed how Roy approached the Board in December 2018, promising an attractive interest rate of 6.75% per annum on their fixed deposits. Trusting Roy’s assurances, the Board transferred ₹45 crore from other banks to Roy’s branch, spread across seven fixed deposits.

In April 2019, the Board discovered ₹36 crore had been syphoned off when verifying their deposits. Despite Roy’s assurances, an internal investigation revealed the funds were prematurely withdrawn and transferred to various accounts, including Akhand Anand Cooperative Bank in Gujarat. Roy and his co-accused allegedly used fake documents for these transfers. Deepak Shah received a substantial portion of the funds, which were later frozen by authorities. Kumar Kanade, president of an NGO in Belgaum, was also implicated after ₹13.6 crore was traced to his account.

In the High Court, Justice Bharati Dangre cited the severity of the accusations and substantial evidence against Roy as reasons for denying bail. The judge noted that as branch manager, Roy had a fiduciary duty to protect the deposits, and his failure to follow bank protocols facilitated the premature withdrawal and transfer of funds to third-party accounts, indicating his involvement in the crime.

During the bail hearing, Roy’s lawyer argued for his release, citing his lack of a criminal record and the bail granted to other accused individuals. He claimed the true mastermind was someone else and noted the absence of direct evidence showing Roy received illicit funds. In contrast, the Board’s counsel and Additional Public Prosecutor emphasised Roy’s key role in the fraud, highlighting how he, as branch manager, falsely certified the safety of deposits while knowing funds had been withdrawn. They detailed the scheme, showing how funds were transferred to various accounts, including one at Akhand Anand Cooperative Bank, and then funneled through multiple transactions to evade detection.

Justice Dangre emphasised that Roy’s actions caused significant financial loss to the Board’s members, mainly laborers relying on their savings. The court cited the internal bank investigation, which found several procedural lapses and irregularities overseen or ignored by Roy. The judge highlighted that Roy’s misleading certificate on April 11, 2019, asserting the safety of the fixed deposits, was a crucial factor in the case against him.

Given the serious charges and evidence, the court decided that Roy must remain in custody to prevent tampering with evidence or influencing witnesses. His bail application was rejected, and he will stay in jail during the trial.