Bengaluru court refuses to discharge accused in co-op bank scam
BENGALURU: The principal city civil and sessions court has refused to discharge VR Rajesh, a businessman, whose liability, including his firms and associates, aggregated to Rs 234.7 crore in connection with the scam in Sri Guru Raghavendra Cooperative Bank in the city. A case in this regard was registered by the Enforcement Directorate (ED). The court held that Rajesh, accused No 19, did not make any valid grounds to seek discharge from the case. There were prima facie materials and a grave suspicion regarding his involvement in the alleged offence, which must be adjudicated upon during trial. Abundant materials had been placed on record to show that a serious scam had taken place in the bank. Also, a huge portion of money was transferred to the accounts of Rajesh, his wife and their firms, said Judge M Chandrashekar Reddy. In his application, Rajesh, proprietor of M/s Dharani Enterprises and M/s Lakshmi Rice Corner, said he had availed a loan of Rs 20 crore from the bank by mortgaging his property and had repaid Rs 18.5 crore. As per the RBI internal audit report and Basavanagudi police chargesheet, he had an outstanding loan amount of Rs 40.4 crore. The CID chargesheets indicated that he had defaulted approximately Rs 20 crore. The allegation that he, along with 23 others, misappropriated Rs 234 crore is bald and baseless, he claimed. Countering it, the ED said the laundering operations continued over several years, properties acquired from such funds were still with Rajesh and the investigation was on to unearth the larger conspiracy to siphon off more than Rs 1,500 crore. Under the Prevention of Money Laundering Act (PMLA), possession of proceeds of crime was a continuing offence. Therefore, discharge at this stage would be premature and contrary to statutory mandate, the ED stated. The court said Rajesh had taken the loan as individual, proprietor, partner and through his controlled entities and associate concerns. Funds were not only received, but also utilised in business operations and for acquisition of assets, thereby establishing use and possession of proceeds of crime under Section 3 of PMLA. Statements of the co-accused and bank officials identified him as a beneficiary. His explanation lacked documentary evidence and did not reconcile the unaccounted inflow of funds. Thus, Rajesh was not a mere borrower, he knowingly handled and utilised tainted funds, the court said. It said that even assuming the transactions originated as loans and that certain repayments were made, once the source of funds was illicit, the subsequent utilisation constitutes money laundering. The SC had clarified that PMLA penalises the act of laundering and not merely the originating fraud. Therefore, repayment of the loan would not absolve criminal liability. The internal audit findings and witness statements demonstrated the sanction of loan beyond permissible limits, lack of collateral verification and violations of banking norms, evidencing criminal conspiracy in which Rajesh was an active participant, the court said.
16 C
