Kolkata: The Calcutta High Court has ruled that negligence or procedural lapses by a bank officer cannot amount to criminal conspiracy in a loan fraud unless there is clear evidence of intent or personal gain.
Upholding a trial court order discharging a former Canara Bank branch manager accused in a Rs 9.14-crore loan fraud case, the court said criminal responsibility cannot be imposed for mere administrative failures.
Justice Chaitali Chatterjee Das, while dismissing the CBI’s plea, observed that although the branch manager may have failed to detect forged balance sheets and inflated turnover figures submitted by the borrower company, “negligence in processing or verifying loan papers cannot by itself constitute conspiracy unless there is material showing intent or benefit accrued to the officer.”
The court noted that the chargesheet had alleged diversion of funds to related concerns and manipulation of financial documents, which were later confirmed to be forged by the Government Examiner of Questioned Documents. However, the loan proposal had moved through multiple levels of scrutiny before sanction — including evaluation by a technical field officer, review by the bank’s core credit group and final approval by the General Manager. Justice Das pointed out that despite these records, the CBI named only the branch manager as an accused and excluded other officials involved in the sanctioning process. The trial court had therefore directed the agency to conduct further inquiry into the role of senior officers, but that direction was not carried out. The High Court agreed that this omission “reflected poorly on the credibility of the probe.”
The court also reiterated that when evidence on record supports two possible interpretations, the court may frame charges. But when only one reasonable view indicates an incomplete or one-sided investigation, an accused should not be forced to stand trial.
Dismissing the CBI’s revision, the High Court ordered that the trial records be returned to the Special Judge, directed that a copy of the judgment be sent to the lower court and allowed the parties to obtain urgent certified copies if applied for.