Mumbai businessman sentenced to 5 years in jail for cheating bank of ₹9 crore
The businessman approached Dena Bank for $2 million in APG and Rs2.5 crore in FBN on the basis of the contract between SVFAPL and the foreign buyer Paragon Global Trade (PGT).mumbai Updated: Dec 13, 2017 23:33 IST
A special CBI magistrate court sentenced a 55-year-old businessman to five years rigorous imprisonment for cheating Dena Bank of Rs9 crore between 2002 and 2005 .
Hanumantrao Kharat, director of Shree Venkateshwara Foods & Agrotech Pvt. Ltd (SVFAPL), entered into a $6-million contract with a foreign company for cashew supply on June 30, 2002. He received advance payment guarantee (APG) and foreign bills negotiation (FBN).
On August 8, 2002, Kharat approached Dena Bank for $2 million in APG and Rs2.5 crorein FBN on the basis of the contract between SVFAPL and the foreign buyer Paragon Global Trade (PGT).
PGT had agreed to advance a payment of $ 2 million on condition that the bank for SVFAPL guarantees this amount.
After Dena Bank sanctioned the request, PGT deposited $2 million (₹9.63 crore as per the then exchange rate) favouring SVFAPL in the bank. The amount was received by SVFAPL on November 5, 2002.
Soon after receipt of the amount Kharat approached the bank to release Rs4.29 crores to procure export material. The bank released Rs4.29 crore soon. He again asked the bank Rs1.6 crore for the same reason.
It was later revealed of the total amount released, only Rs1.29 crore was used for procure cashew and the and the rest was diverted to his personal accounts.
Meanwhile, PGT was not in a position to utilise imported cashew and asked SVFAPL to export iron ore instead under the Exim policy. Kharat failed to export iron ore too.
Till 2005, Kharat had already sought extension for ADG several times. But on expiry of last extension in March 2005, the bank for PGT sought repayment of up to $1.87 million. Dena Bank had to repay the amount.
As Kharat failed to repay Rs9 crore, the bank lodged a complaint with the CBI in 2005.
The investigation revealed that Kharat had made false records showing his transaction with the other companies to get the payment released from the bank. It was said that the funds were diverted and was used for his personal use. However, the prosecution failed to prove the charges of forgery against Kharat.
Kharat in his defense had told the court that it was a civil dispute and he is booked for political agenda. Kharat said that all the transactions were legal and he is still making payment to Dena Bank. The court discarded his defence and convicted him for cheating.