HC rejects bail of man who cheated Dena Bank of ₹245 cr in 2014

The court said it was not inclined to grant bail as the accused had absconded after the investigation got underway.

The Bombay high court recently refused to grant bail to a man who cheated Dena Bank of ₹245 crore in 2014. The man, while claiming to be a representative of the bank, influenced eight public entities to start fixed-term deposits with the bank to the tune of ₹259 crores and then used the KYC documents of the public entities to get loans against the deposits to the tune of ₹240 crores, officials said. He later siphoned off the amount using fake loan accounts in the name of the entities.

A view of Bombay high court. (HT Print)

The court held that as the offence was serious and the trial was likely to commence and end in a year, it was not inclined to grant bail as the accused had absconded after the investigation got underway.

The single bench of justice Sarang Kotwal, while hearing the bail application of Vimal Barot, was informed by advocate Ujjwal Gandhi that after being arrested the authorities had attached his properties under the Prevention of Money Laundering Act (PMLA) and recovered a substantial amount of the defrauded money, hence the custody of his client was not necessary and he should be released on bail.

According to the FIR in 2014, Barot had approached the manager of the Malabar Hill branch and introduced himself as a custodian of funds of government departments and corporations. He was asked to mobilise funds in the form of fixed deposits for the growth of the bank.

While the bank took him to be the financial advisor of these public entities, the respective authorities took him to be a representative of the bank and hence handed over documents for KYC to him.

Barot retained the receipts from the bank and gave the entities photocopies and then based on the KYC documents applied for loans from the bank using the receipts as surety. The bank, assuming Barot to be the financial advisor of the entities, sanctioned the loans which were deposited in fake loan accounts and later withdrawn by Barot through various other entities.

Special public prosecutor Hiten Venegaonkar for CBI opposed the application stating that Barot had gone absconding after the fraud came to light and a complaint was registered. He was nabbed after being traced to Ahmedabad.

Venegaonkar added that as the investigating officer in his affidavit had stated that the trial would start and end in a year, the presence of the accused was necessary and as he had already absconded once, allowing him bail would prejudice the trial hence his application should be rejected.

After hearing the submissions, justice Kotwal observed, “The offence indeed is very serious. The sheer audacity of the applicant in defrauding various entities including the informant’s bank shows that this is not a case where some leniency can be shown to the present applicant in granting him bail during the pendency of the trial.” The court further took note of the statements of witnesses which pointed to the involvement of a bank manager in the fraud as well.

In light of the opposition by the state and CBI and the fact that Barot had used the siphoned off amount to buy properties in his and his wife’s name, and as the trial was expected to be expedited, the bench rejected the bail application.