Mumbai: Nine including CA get 3 years in jail for cheating bank of Rs 13 crore

A court in mumbai has sentenced eight executives of a textile firm and a chartered accountant to three years’ imprisonment for cheating a nationalised bank of more than Rs 13 crore by availing of credit facilities fraudulently.

Additional Chief Metropolitan Magistrate (Esplanade court) Jaywant C Yadav found the accused guilty of cheating, forgery and other relevant offences under the Indian Penal Code on July 31.

The detailed order became available on Saturday.

The accused were top executives of Modern Denim Limited, a company engaged in manufacturing of denim fabrics at Moraiya, Ahmedabad and having its corporate office in Mumbai.

Between 1994 and 2000, the convicted accused (besides one person who is absconding) prepared forged invoices, bills of exchange, lorry receipts, export orders/contracts and other documents and submitted them to Bank of Baroda, Bhadra Branch, Ahmedabad.

On the basis of these documents, the bank granted them export packing credit, letter of credit, foreign bill discounting and inland bill discounting facilities to the tune of Rs 13.51 crore.

The funds were never utilized for the purchase of raw material and instead drawn in favor of eight shell firms.

The Central Bureau of Investigation registered a case in the matter.

Public Prosecutor for the CBI, Sandeep Kumar, told the court that these propped-up companies set up by the accused never worked on the addresses mentioned in the letters of credit.

The accused later entered into a one-time settlement with the bank and repaid Rs 25 crore. In this settlement, the accused admitted to the outstanding liability. It itself showed that they were guilty of cheating the bank, the CBI said.

The court held that considering the nature of “white collar crime,” the one-time settlement and repayment of Rs 25 crore and the accused being senior citizens, they were liable to be sentenced to three years’ jail term under IPC sections 420 (cheating) and 467 (forgery), among others. 

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