ADV-129 - aiiboa

MAIN:

ADV-129 /2013-14

SUB :

CLIST- 03 a

DT.

19-03-2014

Corporate Office: Credit

Division

FILE

M - 2 S - 215

Sub: Caution Notice No.3/2013-14

It has been brought to the notice that serious irregularities were committed in some banks, in the conduct and operations of the accounts given in the annexure. Details in regard to addresses, names of proprietors / partners / directors and the nature of irregularities are also furnished in the annexure.

The information is brought to the notice of branches in the strictest confidence. Branches are advised to make detailed and in-depth enquiries and take up with Corporate Office before processing/ renewing any facility to the parties named in the Annexure. Upon receipt of this notice, the Branch Managers are requested to verify thoroughly and to report to

their Zonal Office within a week, as to whether any credit facility is being enjoyed by the said Entities / Persons from our Bank. If the Zonal Office receives no information within a week from the date of this Circular, it will be construed that no sanction has been made to any of the listed parties, at your Branch. The Zonal Managers shall furnish a consolidated report furnishing the details of the status of the account, security details, nature of irregularities if any in our bank, vis a vis the irregularity reported in this circular etc. to

CO: Credit Division positively within two weeks from the date of this Circular as these

information are to be passed on to RBI by Corporate Office. This circular may please be kept in the personal custody of the Branch Manager and Credit Officer should make use of it, for confidential reference at all times.

Rajeevan Pillai G

General Manager (CR)

Caution Notice No.3/2013-14 CO Credit Division

01 (a) M/s. Darshan Enterprise

Address : Godhra-Dahod Highway Road,

RS No. 222, Opp. Bye-Pass-Parvadi,

Godhra – 389 001.

Directors : Shri. Bhakthiprasad Manilal Shah Plot No. 81/82/1, Krishna Nagar Bamroli Road,

Godhra – 389 001

Guarantors 1. Shri. Paresh B Shah

2. Shri. Rajesh B Shah

2. Smt. Sushilaben B Shah

Plot No. 81/82/1, Krishna Nagar Bamroli Road, Godhra – 389 001

(b) M/s. Darshan Refoil Pvt. Ltd.

Address : Godhra-Dahod Highway Road,

RS No. 222, Opp. Bye-Pass-Parvadi,

Godhra – 389 001.

Directors : 1. Shri. Bhakthiprasad Manilal Shah

2. Shri. Paresh B Shah

3. Shri. Rajesh B Shah

Nature of Irregularities: A bank had sanctioned CC limit of Rs. 25.00 mn on February 06, 2009,

WCTL limit of Rs. 35.00 mn and FITL limit of Rs. 4.58 mn, December 30, 2011 to M/s. Darshan

Enterprise for trading and repackaging of edible oils. Following adverse reports about the borrower’s financial health in early 2012, the bank decided to verify the status of documentation on respect of securities charged to the bank and it was observed that lien noting was not done in respect of mortgages created by the bank in the account. Following this, the bank engaged an empanelled advocate to ascertain the position of lien noting on the six properties mortgaged to the bank.

The advocate could not locate two properties in the name of the guarantors in the revenue records. Despite the assurance of the borrower/guarantors that they would provide copies of revenue records wherein their names existed, the assurance did not materialize. Investigations revealed that the property belonging to Shri. Paresh B. Shah, the guarantor, had been sold to third parties even before the creation of charge in favour of the bank. On January 05, 2010, the borrower sold the commercial shop, mortgaged to the bank, belonging to Shri. B M Shah without the knowledge of the bank.

The guarantor, Shri. Paresh Bhaktiprasad Shah had received a payment of compensation of Rs.

45,09,988/- on September 02, 2011 for acquisition of 2600 sq. yards of land, part of land mortgaged to the bank, from National Highways Authority of India (NHAI) by furnishing wrong

Affidavit. The amount was deposited in his account with Bank of India and was later withdrawn without depositing the proceeds in the loan account. A new Company, M/s. Darshan Refoil Pvt.

Ltd., with the same address as that of the borrower firm, was floated in which Shri. Paresh B Shah and Shri. Rajesh B Shah (guarantors of M/s. Darshan Enterprise) was directors. All the moveable assets of the firm were transferred to the new company and funds were diverted to the company through multi-layering without the knowledge of the bank. Thus, the bank was defrauded to the tune of Rs. 64.74 mn.

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02 M/s M.K.Enterprises

Address : CIB-248/5/6, GIDC Estate Umbergaon, Gujarat.

Proprietor : Shri.Arif Yusufali Divasali , 202/5, New Jamali Manzil CHS Ltd, Plot No.5, Saifee

Park, Church Road, Marol, Andheri (East), Mumbai-400 059

Associate Concern : M/S High Tech Poly Plast,

Address : Umbergaon, Dist.-Bulsar,Gujarat.

Proprietor : Shri.Arif Yusufali Divasali

202/5, New Jamali Manzil CHS Ltd, Plot No.5, Saifee Park, Church Road, Marol,

Andheri (East), Mumbai-400 059

Associate Concern : M/S High Tech Poly Plast,

Directors : 1. Shri Arif Yusufali Divasali

2. Smt. Nishrin Arif Divasali

202/5, New Jamali Manzil CHS Ltd, Plot No.5, Saifee Park, Church Road, Marol,

Andheri (East), Mumbai-400 059

Nature of Irregularities : The unit got sanctioned an Overdraft (OD) limit of Rs.25.00 lakh from a

Urban Co-op. Bank against the mortgage of residential flat on the condition that the existing loan in the name of Shri Arif Yusufali Divasali with a Housing Finance company and a Co-op. Bank should be closed from the loan amount sanctioned. Thereafter, the borrower produced loan closure letters from the Housing Finance company and the Coop.

Bank and submitted original title deeds of the property along with N.O.C. from housing society.

The Urban Co-op. Bank thereafter released entire limit of Rs.25.00 lakh on March 9, 2012. There after the customer applied loan in the name of the firm M/s M.K.Enterprises and the bank sanctioned cash credit limit of Rs.50.00 lakh on May 29, 2012 with the extension of mortgage on the residential flat obtained earlier for the OD loan. As the borrower stopped operations in both the accounts around September 2012, the Urban Co-op.Bank made discrete enquires about the entity and re-verified the documents submitted by the borrower. It was revealed to them that the factory unit is attached to a PSB as the proprietor had availed CC facility from the PSB for the firm M/s

High Tech Poly plast and also the same residential property was mortgaged to the PSB. It was further revealed that the borrower had submitted fabricated financial statements, forged loan closure letters & NOC. Thus the borrower had cheated the Urban Cooperative Bank of an amount of Rs. 7.94 mn.

03 (1)M/s. Maa Tara Engineering

Address : 487, Shashibhushab Banerjee Road,

Kokata – 700 008.

Proprietor : Shri. Chittaranjan Chakraborty

(2) M/s. B Enterprise

Address : Dr. Rajkumar Roychaudhary

Proprietor : 15/H/8, Narkeldanga North Road,

Kolkata – 700 011.

(3) M/s. Laxmi Creation

Address : Shri. Sushanta Chakraborty

Proprietor : 3rd Floor, 58 Elliot Road, Kolkata – 700 016.

(4) M/s. United Mechanical Industries

Address : 81/A, A K Mukherjee Raod,

Kolkata – 700 090.

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Proprietor : Shri. Barun Kumar Ghosh

(5) M/s. Dipkon Rubber Industries

Address : 187, Jessore Road, Kolkata – 700 055.

Proprietor : Shri. Debashish Samajpati

(6) M/s. Lakshmi Enterprise

Address : 161/1B, Baruipara Lane, Kolkata – 700 035.

Proprietor : Shri. Dulal Duttawas

(7) M/s. Raj Enterprise

Address : 2A, Motilal Basak Lane, Kolkata

Proprietor : Smt. Rajkumari Jaiswal

(8) M/s. Sreema Sarees

Address : 177/15, Picnic Garden Road, Kolkata – 700 039.

Proprietor : Smt. Bharti Roy

(9) M/s. Hindusthan Enterprise

Address : 2, Sitaram Ghosh Street, Kolkata – 700 009.

Proprietor : Shri. Amarnath Deb

(10) M/s. Maji Offset Printers

Address : 35, Surya Sen Street, Kolkata – 700 009.

Proprietor : Shri. Bikas Chandra Maji

Nature of Irregularities: A bank had sanctioned CC limits/term loans to the following ten borrowers at one of its branches during 2010-11 which were engaged in manufacturing of steel furniture, retail and wholesale medicine, designer sarees, paper and exercise book, iron rods and decorative items etc. the limits ranged from Rs. 0.60 mn to Rs. 9.00 mn to the following borrowers.

Investigations into the accounts after the accounts turned NPAs revealed that

M/s. Maa Tara Engineering: The unit did not exist at the recorded address. The mortgagor and the proprietor of the firm, Shri Chhitaranjan Chakraborty had deposited the color Zerox of the title deed.

The credit report submitted by the borrower from other lending institution was fake. The AFS submitted by the borrower was doubtful in nature.

M/s. B Enterprise: The unit did not exist at the recorded address. The title deed of the collateral and

ITRs were fake and the guarantors were impersonated. The financial papers submitted were also fake and fabricated. The borrower diverted the funds for some other purposes.

M/s. Laxmi Creation: The statements of account submitted by the borrower for current account with other lenders were fake. The figures appearing in the audited financial statements and ITRs were not reliable and were appeared to be fake documents. The entire loan amount was siphoned off by the borrower.

M/s. United Mechanical Industries: The audited financial statements and ITRs submitted by the borrower were fake. The entire loan amount was siphoned off by the borrower.

M/s. Dipkon Rubber Industries: The borrower had submitted fake audited financial statements and

ITRs. The CA firm through which the financial statements were audited was not reliable. The

Figures of proprietor's capital, value of plant and machinery given in financial statements were not comparable with the value of items found in factory premise. The factory address given in VAT registration, AFS and DIC registration were different.

M/s. Lakshmi Enterprise: The Audited financial statements and ITRs submitted by the borrower

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Caution Notice No.3/2013-14 CO Credit Division were fake. The auditing firm L.C.Beri & Co. had confirmed that they had not audited the financial statements of the borrower. The entire loan amount was siphoned off by the borrower.

M/s. Raj Enterprise: The firm submitted forged VAT registration certificate, fake statement of account of a bank and fabricated audited balance sheet and fake ITRs. Major part of funds was diverted to the sister concern M/s Amit Enterprise (prop: Shri. Harishchandra Jaiswal, husband of

Smt. Rajkumari Jaiswal).

M/s. Sreema Sarees: The unit did not exist at the address as disclosed in the loan application. The

Audited financial statements submitted by the borrower were fake. The integrity of the auditing firm was doubtful. ITRs of the borrower were fake and fabricated and the loan amount was siphoned off by the borrower.

M/s. Hindusthan Enterprise: The transactions in the account were mainly through the accounts M/s

Bajrang Paper Agencies, M/s Maa Durga Enterprise and M/s Shree Ganapati Paper Mart. The addresses of M/s Bajarang Paper Agencies and M/s Hindusthan Enterprise were same and the second address of M/s Bajrang Paper Agencies was also the address of M/s Maa Durga Enterprise to whom maximum payment was made from the account. Most of the transactions made in the account of M/s Hindusthan Enterprise were of accommodative nature and for diversion of the funds. Substantial cash withdrawals were made from the account.

M/s. Maji Offset Printers: The borrower had concealed various material facts like nondeclaration of the existing credit facility from other banks, misrepresentation about infusion of substantial capital into the business. The borrower had submitted the fake and fabricated financial statements and

ITRs at the time of initial sanction. The bank was defrauded to the tune of Rs. 42.96 mn by the borrowers.

04 Unscrupulous Persons / Entities.

Nature of Irregularities: It has come to the notice of RBI that there was an incident of data security breach in the system of a credit card service provider resulting in fraudulent withdrawals from prepaid cards issued by a bank. Two prepaid cards issued by the bank whose back end services were being managed by the credit card service provider were compromised in terms of cardholder data as well as PINs which enabled fraudulent withdrawals from these two cards. Some hackers had intruded the data security system of the credit card service provider and enhanced the

FX card limits of these two prepaid cards.

This was immediately followed by withdrawals through various ATMs in countries like Russia,

Ukraine, Italy and Tokyo to the tune of Rs. 55.89 mn. The cards had since been blocked. The banks are therefore advised to exercise utmost caution in the matter and put in place appropriate checks to ensure at regular intervals the integrity and security of the systems being maintained by third party service providers to guard against such incidences.

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05 M/s Katyayani Cards & Stationers

Address : Shop.no.283, Upper Ground Floor, Chowdhury Complex, Guing Road, Lucknow,

UP.

Proprietor : Shri Mithilesh Gupta, 6, Havelia Colony, Daliganj, Lucknow, UP.

Associate Concern : M. G.Traders

Propreitor

/Director

Shri Manish Gupta S/o of Shri Manish Gupta.

Nature of Irregularities : M/s Katyayani Cards & Stationers (Prop Mithilesh Gupta) was sanctioned cash credit limit of Rs.10 mn on March 26, 2011. A remittance of Rs.5.35 mn was made by RTGS on March 28, 201 to close the loan with the bank from whom the account was taken over and the security documents were collected. Investigations made on the advances portfolio at the branch revealed that many deficiencies including diversion of funds in this account. It subsequently transpired that the letter regarding conduct of the account issued by the first bank prior to taking over the account was fake.

It was also observed in investigation that borrower had disposed off the entire stock and closed the business. The borrower residence was found closed and the both the borrower and the guarantor were not traceable. Thus the borrower defrauded the bank to the tune of Rs. 10.12 mn.

06 M/s A.R. Educational & Charitable Trust

Address : Kadayam Tirunelveli District,Tamil Nadu.

Director/Propr ietor/Trustee details :

1) Shri A.R.Anub s/o Shri A.Rashid Reshmi, Alamcode Post, Atiingal - 695102,

Thiruvananthapuram District.

2) Shri A.Rashid s/o Abdul Salam add 1:- Chithra Bhavanam, Pattasalianvilai,

Opposite to Ramji Rose Nursery, A.R.Camp Road, Nagecoil – 2, Agasteewaram

Taluk, Kanyakumari District add 2:- Kadakkavoor Village, Chirinkeezhu Taluk,

Thiruvanthapuram District.

3) Smt Naseem w/o A.Rashid Chithra Bhavanam, Pattasalianvilai, Opposite to

Ramji Rose Nursery, A.R.Camp Road, Nagercoil – 2, Agasteeswaram Taluk,

Kanyakumari Distrcit.

4) Shri M.M.Ammanulla s/o Mohammed Mustafa Alayil House, Nilakkamukku,

Vakkam Post, Chirayinkil Taluk, Thiruvananthapuram District.

5) Smt Reshma w/o A.R.Anub Chithra Bhavanam, Pattasalianvilai, Opposite to

Ramji Rose Nursery, A.R.Camp Road, Nagercoil – 2 Agasteeswaram Taluk,

Kanyakumari District.

Nature of Irregularities: A bank sanctioned a term loan of Rs.17.00 mn on October 31, 20.08 and another term loan of Rs.5.30 mn was sanctioned on January 30, 2009 to a trust for starting a self financing Engineering college. The repayment of the loan was not regular and in September 2010, the repayment was rephased but still the repayment was not regular in the account. The account was classified as NPA as on September 30, 2011 and as a part of recovery measures, SARFAESI action was initiated and demand notices were issued to the borrowers/guarantors. In the mean time, a complaint was received from Shri Mohd.Mustafa Amanulla through email on January 19,

2012 stating that his relatives had availed bank loan by mortgaging the land documents of the complainant without the knowledge of the complainant or his wife.

On receipt of complaint the bank sent copies of Power of Attorney available with the bank to the complainant and requested him to confirm the genuineness of the same. Shri Amanulla informed that the Power of Attorney was a forged one because on the date of execution, he and his wife

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Caution Notice No.3/2013-14 CO Credit Division were abroad. On receipt of this information a detailed investigation was ordered and it was confirmed that the Power of Attorney submitted to the bank was fake since the signatures of Shri

Amanulla and Smt.Muminath Beevi appearing in the POA were not matching with the signatures available in their passports. Shri Amanulla's signature available in the statement given by him on

July 30, 2012 was also not matching with that of the POA. As per the passports, both Shri

Amanulla and Smt.Muminath were at Dubai where Shri Amanulla was employed. As per the entries in the passport, Shri Amanulla left India on August 05, 2008 and his next visit was on November

04, 2009 and Smt.Muninath Beevi on August 20, 2008 and returned to India on July 21, 2011.

Thus on October 16, 2008, the date of execution of POA, both were not in India. A per Shri

Amanulla, the documents relating to the properties which were kept in his house, were taken away by Shri Anub during his absence and he was not aware about the missing of documents till July

2011. Thus the bank was defrauded to the tune of Rs. 10.20 mn as mortgage has been created without the knowledge of the owner of the

Property by producing fake Power of Attorney.

07 1) M/s. Bhavana Exports

Address : 307, B, Mahavir Apartment,Station Road,Bhayander (W),

Dist. Thane – 401 101

Proprietor : Shri. N K Mehta

M/s. Akshat Enterprises

Address : C-102, Rajgiri Apartment,

Ashok Road, Kandivali (E)

Mumbai – 400 101

Nature of Irregularities: On April 28, 2012, a cheque for Rs. 32.50 mn was deposited in a bank through clearing for the credit of current of Pay & Accounts Officer, CGHS, New Delhi. The cheque was drawn by Indian Agriculture Research Institute and was payable at all CBS branches of the bank.

Subsequently, the Corporate Office of the bank informed the Northern Zone, Delhi about a suspicious transaction which had taken place during the month of April, 2012. On receipt of the above information, the transaction was immediately verified and it was observed that the proceeds of the abovementioned cheque were fraudulently credited on April 30, 2012 to account of M/s.

Bhavana Exports maintained with another branch of the bank. Investigations revealed that amounts of Rs. 21.72 mn and Rs. 9.45 mn were transferred from this account through RTGS on May 02,

2012 to the account in the name of M/s. Akshat Enterprises maintained with another bank. Further, on May 07, 2012 M/s. Bhavana Exports remitted an amount of Rs. 1.18 mn to another account maintained in their name with a private bank.

It was, further, observed that in the data submitted by the Clearing Hub of the bank for crediting the account of the beneficiary, the account number of the beneficiary was correctly mentioned.

However, while affording credit to the respective beneficiaries, the account of the beneficiary of the above cheque was altered. From the above, it was apparent that the account holders, i. e. M/s.

Bhavana Exports, in connivance with others, had fraudulently deprived the real beneficiary of the funds and had misappropriated the funds and cheated the bank and its customer. Thus, the bank was defrauded to the tune of Rs. 32.50 mn.

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08 M/s. D-Light Foods & Packaging Industries

Address : South Bidhangarh, Rabindranagar, Bidhangarh PO, Kolkata – 700 066.

Proprietor : Shri. Abdul Kuddas Molla South Bidhangarh, Rabindranagar, Bidhangarh PO,

Guarantors

Kolkata – 700 066.

Smt. Minara Begum W/o Shri. Abdul Kuddas Molla

Nature of Irregularities: A bank had sanctioned CC limit of Rs. 40.00 mn on February 14, 2011 to

M/s. D-Light Foods & Packaging Industries for manufacturing of ice cream cones & card board boxes. The account turned NPA due to irregularity in the account. When another bank published an auction notice in the newspaper for auction of properties mortgaged to them for securing credit facilities sanctioned to M/s. Hena Enterprise, a proprietorship firm of Smt. Minara Begum and the advance was guaranteed by Shri. Abdul Kuddas Molla, it came to light that the same properties were also mortgaged in the account of M/s. D-Light Foods & Packaging Industries The bank was, thus, defrauded to the tune of Rs. 40.00 mn by the fraudster.

09 1. M/s GP Gold.

Address : Ward No.8, Gandhi Grama Street,Gudaloore-625 518

2. M/s Muthu Gold Finance

Address : 4/34, Uttachaparampu Road,Iyerbangala, Madurai.

3. M/s Ganapathy Bankers

Address : 169, Karumariyamman Koli Street.

Nature of Irregularities : The employees of pawn brokers had availed gold loans with different branches of a NBFC by re-pledging the gold ornaments pledged by individuals who had availed loan from these pawn brokers. When the individuals sought for return of the gold ornaments after repayment of the loan, the pawn brokers could not get the gold back from NBFC for release of pledge. On complaints from these individuals the police arrested the pawn brokers and their employees and on the basis of information gathered, raided the premises of the NBFCs and seized the gold. The value of loan availed by the pawn brokers from NBFC amounted to Rs.53.88 mn.

The modus operandi is being issued to put on caution the banks / NBFCs to be careful while lending against gold and ensure that such incidents do not recur.

M/s Lehnga House

10

Delhi – 110006.

Nature of Irregularities :. A bank had sanctioned a Working Capital limit of Rs. 8.00 mn to the borrower firm on February 5, 2010 under CGFS for Micro and Small Enterprises. The limit was enhanced to Rs. 9.80 mn on February 1, 2011 based on the balance sheet as on March 31, 2010 submitted by the borrower. When the account turned irregular, during a visit to the unit, it was found closed. The balance sheet submitted by the party was also found to be fabricated one. Thus the bank was defrauded to the tune of Rs. 8.28 mn.

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11 M/s Master Trade India

Proprietor : Shri Pralay Sinha Roy 201/2/1/1, G T Road, North Salkia, Ghushuri, P S Mali

Panchaghara, District: Howrah West Bengal.

Nature Of Irregularties. A bank had sanctioned a Cash Credit limit of Rs. 5.00 mn to the firm on

June 19, 2009 for trading in grinding and drilling equipments. This facility was collaterally secured by mortgage of properties owned by two persons including the proprietor of the firm, Shri P S Roy.

The limit was enhanced to Rs. 7.50 mn on October 13, 2009 by taking additional EM of one flat owned by the proprietor of the firm. When the account turned NPA and a sale notice was published in newspapers, one Shri D K Dey approached the bank and claimed that the said flat was owned by him and he had not sold it to anyone. Title deed verification done by the advocate revealed that the purported sale deed executed by Shri Dey in favour of Shri P S Roy was fake. Thus the bank was defrauded to the tune of Rs. 7.29 mn.

12 M/s Visakha Telecommunication Services

Address : D No. 49-54-5/4, Balayyasastry Layout,Vishakapatnam, Andhra Pradesh.

Proprietor :

Shri Arikapudi Jagadeesh C-10, Surya Residency, Narasimha Nagar,

Vishakapatnam, A.P.

Guarantors : i. Smt. Lakshmi Devi ii. Shri T Ch Bhupati 43-15-5, Subbalakshmi Nagar, Vishakapatnam – 530016,

A.P.

Nature Of Irregularties : A bank had sanctioned credit facilities on March 23, 2006 to the borrower

Shri Arikapudi Jagadeesh for running a telecom business. This facility was secured by mortgage of a property owned by the guarantors. When the account turned irregular in July 2010 and investigations were done, the fresh title search report dated February 18, 2013 revealed that there was an encumbrance created in 1996 in favour of a third party on the property. Thus the bank was defrauded to the tune of Rs. 6.88 mn.

13 Smt. T. Purnima

Address : •

No. 5, Albion Street, Swindon, SNI SLJ, London, United Kingdom.

•

Plot No. 27/G-2, Sanjay Gandhi Nagar,Adambakkam, Chennai.

Seller : Shri J Velu

Address :

•

Hospital Road, Narthampoondi, Thiruvannamalai, Tamil Nadu.

•

No. 321, AGS Colony,IV Road, Velachery,Chennai – 600042.

Nature of Irregularities : A bank had sanctioned housing loan of Rs. 6.00 mn in December 2010 to the borrower for purchase of a vacant site. The mortgage in favour of the bank was registered on

December 20, 2010. Subsequently the bank received a complaint from one Shri S Madan Gopal stating that he was true owner of the said property and the original registered document of 1990 is in his possession. He also informed the bank that both the borrower and Shri J Vellu, seller (POA holder) were unknown to him and he had not given any POA to sell the said property. Second legal opinion in the matter indicated that the sale deed copy of 1990 in favour of the complainant submitted by the borrower at the time of availing the loan was fake one. Thus the bank was defrauded to the tune of Rs. 5.57 mn.

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14 1) M/s Kasturi Trading

Propreitor : Shri Angshuman Mukherjee

200A, Satin Sen Sarani,

Kolkata 700 054

2) M/s Valiant Incorporation

Address Amrapali Guest House, Holding No.254,Ward No.4, P O Taki, P S Hasnabad

District:24 – Parganas (North) (W.B)

Propreitor : Smt Mahua Mukherjee200A, Satin Sen Sarani,

Kolkata 700 054

Nature of Irregularities : M/s Kasturi Trading Co was sanctioned CC limit by a bank amounting to

Rs. 5 mn on September 23, 2009 for trading in marbles, tiles etc The other connected account of

M/s Valiant Incorporation was sanctioned term loan of Rs. 1.00 mn and Rs. 4.00 mn in September

2009. For both the accounts collateral security offered was land & building situated at 200A, Satin

Sen Sarani Kolkata – 54. The account of M/s Kasturi Trading Co. account was classified as NPA on August 24, 2011 and the account of M/s Valiant Incorporation was classified as NPA on

September 30, 2011 and subsequently recovery action was initiated. The possession of property was taken on February 01, 2012 under SARFAESIA. During the auction & other legal proceedings, it came to light that same property was already offered as collateral security to other two banks and that the bank was holding color copies of the documents Thus the borrowers had defrauded the bank to the tune of Rs. 10.29 mn.

15 Shri Banke Bihari Toys

Address : 5443, New Market, Sadar Bazar,Delhi-110 006.

Proprietor : Shri Jagmohan Mital

Nature of Irregularities : The borrower, a sole proprietary concern having banking relationship with a new private sector bank since 2007 whose cash credit limit was enhanced by a bank from

Rs.50.00 lakh in stages to Rs.1.25 crore as on March 31, 2011. The CC loan was secured by equitable mortgage of residential property of the proprietor. As the borrower defaulted from

November 2012 onwards, the bank investigated & observed that the property documents mortgaged to the bank were not genuine. Search of property details on the CERSAI site revealed that the said property had been mortgaged to several banks. It is further revealed that the borrower has submitted fabricated audited financials to the bank as the auditor purported to have signed the financial statements denied having audited the company at any point of time. Thus the borrower had cheated/misappropriated the amount by defrauding the bank to the tune of Rs. 12.49 mn.

M/s Shri Bankey Bihari Toys

Address : 4193, Gali Barna Sadar Bazar Delhi-110 006

Proprietor: Shri Jagmohan Mittal

Nature of Irregularities:- A bank had sanctioned Cash Credit facility of Rs 10.00 mn in

September 2008 to the borrower firm against collateral security of EM of a property valued at Rs

27.50 mn. When the borrower defaulted in repayment, bank initiated steps for recovery of funds by selling the mortgaged immovable property under SARFAESI Act. When the bank officials visited the property site to paste the notice issued under the said Act, they found notices pasted by three other banks also. Verification with SRO revealed that the borrower, Shri Mittal had sold the property to another person prior to availing credit facilities and mortgaging the property with the bank. Thus bank was defrauded to the tune of Rs 9.98 mn.

M/s Shri Bankey Bihari Toys

Address : FD-6, Ground Floor Pitampura Delhi-34 , Godown address : 7, Sainik Vihar,

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Pitampura Delhi-110088

Propreitor : Shri Vishal Mittal s/o Jag Mohan Mittal, 4195 Gali Barna Diputy Ganj Sadar Delhi-

110006

Nature of Irregularities:-

A bank had sanctioned a CC limit of Rs 8.40 mn in July 2009 to the borrower which was collaterally secured by EM of a shop in New Delhi. When the account turned irregular, fresh search was conducted, this revealed that the title deeds held by the bank were forged and fabricated. The mortgaged property was found to be in possession of another bank for their dues against another firm. Thus the bank was defrauded to the tune of Rs 8.42 mn.

M/s. M S Foods Pvt. Ltd. 16

Address : Village Bahadurwala, Malla Wala Road,Ferozepur

Directors : 1. Shri. Sushil Monga

2. Shri. Ranjiv Monga , Near Khanna Nursing Home,Ferozepur

3. Shri. Ajay Sachdeva ,House No. 25, PNB Complex Vikas Vihar Ferozepur

4. Shri. Raj Kumar Sachdeva,House No. 16, Galli Kummara Wali Ferozepur City.

Nature of Irregularities : A bank had sanctioned term loan of Rs. 2.35 mn, CC limit of Rs. 145.00 mn on May 01, 2010 and ad-hoc CC limit of Rs. 3.50 mn on November 29, 2012 against hypothecation of plant and machinery and stocks and receivables. Mortgage of seven immovable properties having realizable value of Rs. 101.10 mn was also taken as collaterals. The operations in the account were not satisfactory since May 2012 and the account turned NPA on January 23,

2013.

The unit was temporarily shut down for normal maintenance/cleaning of the plant. The branch officials observed, during their unit visit on January 09, 2013, that the company had defaulted to two Punjab Govt. agencies with whom the company had arrangements for procuring and storing paddy who had issued notices for recovery of Rs. 115.00 mn against the company for misappropriating the stocks delivered to the company for storing and milling. It was also observed that the company had never shown any stock held on behalf of Govt. agencies in the monthly stock statements submitted to the bank. The bank came to know that the borrower was also enjoying credit facilities with another bank. The company had disposed off the entire stocks hypothecated to the bank and the sale proceeds were not deposited in the account. Further, the directors were not available at the given addresses and their mobile numbers were not accessible. Thus, the borrowers defrauded the bank to the tune of Rs. 149.75 mn.

17 M/s Sonal Traders

Address : FD-6, Visakha Enclave, Pitampura,Delhi

GodownAddress : 7, Sainik Vihar, Rani Bagh,Delhi

Proprietor : Shri Anoop Kumar Gupta

Associate Concerns : M/s Suraj Sales Corporation

11


Nature of Irregularities : The firm which was engaged in trading of ‘Hawan Samagri’ was sanctioned an working capital limit of Rs. 2 Crore on July 24, 2012 by a bank based on the security of stock-in-trade and collateral security of a shop, in the name of the proprietor Shri Anoop Kumar

Gupta. The bank observed certain irregularities in the account, like high value transactions with four to five parties and non-routing of its transactions through the bank. During the post disbursement inspection in October 2012, it was observed that the books of accounts/ledgers were not available at firm’s premises and activity level was low which was not commensurate with the exposure of the bank. The interest in the account was not serviced and the account was classified as NPA on

January 28, 2013. On fresh re-verification of the title deed deposited with the bank, from another of the bank’s empanelled advocates, it was found that the title deed related to collateral security deposited by proprietor was a fake and forged document. Thus the bank was defrauded to the tune of Rs. 16.25 mn by the borrower.

18 M/s Padma Food Products Pvt. Ltd.

(erstwhile M/s Padma Enterprises)

Address : P-200, Jagannath Ghat Cross Road,Posta Room No.A-100, Hariram

Market,Kolkata – 700007.

Directors : (i) Shri Anup Kumar Saha, s/o Madhub Chandra Saha,

Pramod Dasgupta Sarani, Hijal Pukuria,Habra, 24 Praganas.

(ii) Sri Swapan Dutta Roy s/o Panchanan Dutta Roy,

59, E K Ford Road, P.O. Sukhchar,Kolkata.

Guarantors Smt. Puspa Naskar

Nature Of Irregularties : A bank had granted a cash credit limit of Rs. 21.38 mn to Padma

Enterprises on March 31, 2008 against hypothecation of stocks, receivables, and third party security in the form of equitable mortgage of landed property. The limit was enhanced to Rs. 35.00 mn in March 2010, following which, in accordance with the terms of sanction, the firm was converted to M/s Padma Food Products Pvt. Ltd, (a private limited company). The enhanced limit was also additionally secured by equitable mortgage of five third party collateral securities. The account became irregular and was classified as NPA in June 2011. The bank published notice U/S

13/2 of SARFAESI Act in newspapers in Dec. 2011 for disposal of the collaterals. After publication of the notice, the bank received letters / notices from several rightful owners of the land measuring

67.5 decimal offered as collateral in March 2010 by Smt. Pushpa Naskar, claiming to have purchased the land from her in the year 2003. Follo0wing this, all the collaterals were subjected to fresh verification by bank’s empanelled advocate who submitted his report confirming the fact that the land mortgaged by Smt Puspa Naskar was sold by her to third parties before creation of E.M. with the bank. Thus the bank was defrauded to the tune of Rs 38.15 mn by the borrower in connivance with the guarantor.

12


19 Sri Radheshyam Patidhar

Address : Khokhra Tah, Jhar Tahm Sandla and Other Villages,Ratlam District.

Nature of Irregularities : A bank sanctioned 37 SKCC loans amounting to Rs. 10.42 mn to the borrowers during May 2009 to April 28, 2010 who were sourced by Shri Radheshyam Patidhar and associates who was not a customer of the branch. Sri Radheshyam Patidhar had collected original land records / passbooks from gullible marginal farmers by promising them of getting huge amount of loan sanctioned to meet their financial needs, with prospects of write-off by the Government etc.

The accounts turned NPAs immediately after release following which the bank conducted investigations. Further investigations revealed that Sri Radheshyam Patidhar had fabricated passbooks by altering the extent of land and cropping pattern and in connivance with the panel advocate obtained favourable legal opinion and in some cases tampered legal opinion also. Also the photocopies of Simple Registered Mortgage deeds held in joint custody were signed by Sri

Patidhar as one of the witnesses as and there was no record to show that original deeds were obtained after their registration before/after disbursement of the loans. Most of the loan amounts were released to Sri Radheshyam Patidhar and his associates and were not paid in full to the borrowers. Subsequent online verification of land records revealed that the land records accepted by the branch at the time of arranging loans were tampered with or fabricated one. It was also revealed that there was wide variation in land holdings furnished to the branch and the latest copies of certified land records. Thus the bank was defrauded to the tune of Rs.10.42 mn.

1) M/s Sunshine International 20

Address : IX/7198 MAHAVEER GALI GANDHI NAGARDELHI 110031.

Propreitor : Shri Nitin Arora , H.NO. 5/10 KRISHNA NAGARDELHI 110051.

2) M/s V Kay International Smt.

Address : IX/7178 RATTAN GALINEAR MAHAVIR GALI GANDHI NAGAR ,DELHI –

110031

Propreitor : Smt. Ishma Arora , H. NO. 4/13 KRISHANA NAGAR NEW DELHI,DELHI.

3) M/s Srinath Synthetics

Address : IX/6052 IIND FLOOR GURU HARKISHAN,SINGH GALI GANDHI NAGAR

DELHI – 110031

Propreitor : Shri Sanjay Pandey , s/o Shri Chhedilal Pandey , B-91, SHIVALIC

APARTMENTS,RANPRASTHA GHAZIABAD U.P

4) M/s Gayatri Apparels

Address : B-91, G-2 ,SHIVALIC APPARTMENTS,,RANPRASTHA GHAZIABAD

Propreitor : Smt. Nirupama Pandey (Prop.),w/o Sanjay Pandey

Nature of Irregularities : A bank had extended an OD limit of Rs. 15.00 mn to M/s Srinath

Synthetics on Sept. 06, 2011. The firm was introduced by Shri Nitin Arora proprietor of M/s

Sunshine International which was enjoying a CC facility with the bank to the tune of Rs. 34.50 mn, sanctioned on March 31, 2011. During the course of renewal of the OD facility in March 2013 and in the process of verifying the authenticity of the audited financial statement submitted by the firm, it came to light that the CA firm ‘M/s Mukesh Sharma and Associates’ purported to have certified the statements did not exist and that the financial statements were fabricated / fake. Further on verifying the credentials of Shri Sanjay Pandey, the bank found that as per CIBIL data he had two different PAN numbers. This led the bank to investigate into the credentials of M/s Sunshine

International (proprietor : Shri Nitin Arora) which had introduced M/s Srinath Synthetics as also the credentials of M/s V Kay International where Smt. Ishma Arora w/o Shri Nitin Arora was the proprietor. The investigation revealed similar patterns of two PAN numbers / fabricated financial

13

Caution Notice No.3/2013-14 CO Credit Division statements with these accounts. Further, the original sale deeds of the collaterals of the three firms, in the possession of the bank as security, were searched again and found to be alse / fabricated.

Thus the bank was defrauded to the tune of Rs. 72.77 mn by two borrowers.

21 M/s. Nakoda India Refinery Pvt. Ltd.

Address : 78/3, SMS Complex, C T Street, Avenue Road, Bangalore – 560 002.

Directors : 1) Shri. Sanghavi D Moolchand

2) Shri. Anil Kumar M Sanghavi 78/3, SMS Complex, C T Street, Avenue Road,

Bangalore – 560 002.

Guarantors: i. Shri Shalesh Kumar M Sanghavi ii. Shri Kamlesh Kumar Sanghavi

Nature of Irregularities : A bank had sanctioned OCC limit of Rs.120.00 mn (Rs.100.00 mn + adhoc Rs.20.00 mn), a term loan of Rs.12.00 mn and a Guarantee/LC of Rs.185.00 mn against prime security of stock-in- trade (Gold and Silver) and collateral security of landed properties standing in the name of the directors of the company with total value of Rs.148.70 mn and personal guarantee of S/s. Sanghavi D Moolchand, Anil Kumar M Sanghavi, Shalesh Kumar M Sanghavi and Kamlesh

Kumar Sanghavi with a total net worth of Rs.37.97 mn. During the stock inspection conducted by the bank on December 24, 2012, it was observed that the unit was not functioning and there were no operations in the account since the second week of November 2012. When branch officials contacted the borrower, they were informed that the company had incurred sudden loss due to the fluctuation in prices of gold and silver. However, the loss on account of hedging and rate fluctuation was shown as Rs.10.30 mn and the net Loss was shown as Rs.296.50 mn. Two LCs and a

Guarantee, opened in favour of STC & MMTC in connection with purchase of gold, amounting to

Rs.185.00 mn, got devolved / invoked, during the period November 28, 2012 to January 21, 2013 and the same were paid under debit to OCC limit. As per the PBS as on February 23, 2013, there were no stocks and no sundry debtors. There was an element of suspicious and fraudulent presentation of facts and figures by the company/Shri. Anil Kumar M Singhvi. The company could not explain the reasons for absence of stock/book debt book as indicated above. Thus, the company had perpetrated the fraud on the bank by disposing off the entire stock of gold and silver ornaments without the knowledge of the bank and diverting the funds.

22 M/s. Bacchus

Address : EC-138, Sector-I, Salt Lake,Kolkata – 700 064..

Directors : 1) Shri. Avijit Bhattacharjee

Abhipsa Housing Complex,Unit No.B, Amarendra Sarani, Uttarpara,

Hooghly – 712 258.

2) Shri. Somenath Bose

13, Rajendra Avenue, Uttarpara, Hooghly – 712 258.

Nature of Irregularities : A CC limit of Rs. 70.00 mn was sanctioned to M/s. Bacchus for trading and distribution of IMFL by a bank on December 04, 2010. The loan was primarily secured by exclusive charge on the entire current assets of the firm and additionally secured by equitable mortgage of flats jointly owned by the partners with their family members. The loan was further secured by personal guarantee of the partners and co-owners of the properties. During the internal audit of the branch conducted in January 2012, many irregularities were observed in the account.

Further investigation revealed that figures furnished in the financial statement had no relevance to actual performance of the account. While ascertaining the credential of CA firm who had certified the financial statements of the company, it came to light that the CA firm was non-existent. Thus, the audited financials submitted by the firm turned out to be fake, since no such audit firms could

14

Caution Notice No.3/2013-14 CO Credit Division be located from the online data base of the Institute of Chartered Accountants. The latest audit report was purportedly issued by one T.D. Paul & Co, who denied having issued such audit certificate. It later revealed that the credit turnover in the account varied widely from the sales turnover which meant that entire sales were not routed through the account maintained with the branch. Large amounts were found to be frequently and irregularly transferred from the CC account of the company to the accounts of other companies dealing in the same business who were neither the suppliers (distributors/manufacturers) nor the regular purchasers (retailers/wholesalers) of the company. The mortgaged properties were overvalued manifold to avail higher limits and the funds were subsequently diverted. Thus, the bank was defrauded to the tune of Rs. 73.71 mn.

23 M/s Shree Siddharoodh Dairy Products

Address : R.S.No.2000, Madhabhavi Road, Athani,

Belgaum – 591 304.

Directors : 1) Shri Sidray Bharamagouda Biradar

237, Kottalagi Village, Athani Taluk, Belgaum,Distrcit, Belgaum, Karnataka.

2) Shri Avvanna Appanna Hanamapure

28D, Hosatti Village, Athani Taluk, Belgaum,District, Belgaum, Karnataka.

3) Shri Anil Somashekar Shetagar

4) Shri Somaling Bharamagonda Biradar

235, Kottalagi Village, Athani Taluk, Belgaum,Distrcit, Belgaum, Karnataka

5) Shri Shivappa Yallappa Teli

255, Kottalagi Village, Athani Taluk, Belgaum,Distrcit, Belgaum, Karnataka

Nature of Irregularities : A bank had sanctioned various credit facilities to Shree Siddaroodh Dairy

Products (SSDP) viz; Rs.5.00 mn for dairy farm, Rs.15.30 mn for milk processing & by product unit and Rs.10.00 mn for advance payment to milk suppliers. The said facilities were secured by mortgage of non agri lands and agri lands of partners and also some third parties. One of the third party mortgagors was one Shri Sangayya Channayya Matapathi as owner of property of 39 Acres

06 Guntas at Halalli Village Athani Taluk, Belgaum District; jointly held by other family members to secure the term loan of Rs.15.30 mn sanctioned on March 18, 2010. The mortgage was also extended to secure the STL of Rs.10.00 mn sanctioned on February 26, 2011. Subsequently, a person claiming himself as Shri Sangayya C Matapathi came to the branch and stated that the above mentioned properties belonged to him and his family members and he had not mortgaged the said properties to the bank at any time and he was not aware of loan availed by SSDP from the bank. Hence he demanded for release of his properties on which the bank had created its charge.

The bank officials collected a copy of the complainant’s ID card bearing no.UE11091545 and furnished the same to the revenue authority for confirming the genuiness. The bank also requested the revenue authorities to ascertain the genuiness of the voter id card no. KT/26/209/513577 submitted by the person who had actually mortgaged the properties to the bank. The Revenue

Authority in November 2012 confirmed that the card no. UE11091545 was valid and pertains to

Shri Sangayya Channayya Mathapati, the complainant. However, the voter ID Card No.KT

26/209/513577 (which was submitted to the bank by the person who was present at the time of mortgage) was not issued in their subdivision. Thus the person who posed himself as Shri

Sangayya C Matapathi before the bank and before Sub Registrar at the time of mortgage creation had produced a fake ID proof and committed fraud on the bank amounting to Rs 29.37 mn.

15


24 M/s Maruti Builders

Propreitors : Shri Y. Koteswar Rao , Flat No. 6, Gangotri Apartments, Row No.6,

Habsiguda, Hyderabad,,Andhra Pradesh.

Nature of Irregularities : A bank sanctioned 20 housing loans to the employees of BHEL in the year 2003-04 for construction of houses. The plots were purchased by the borrowers from Ms. P.

Swetha, purported to be the real owner of the land. A single construction agreement was entered between the borrowers and M/s Maruti Builders and amount of loan was disbursed by the bank to

M/s Maruti Builders in 2 - 3 installments. Ms. P. Swetha, the real owner of land filed a civil suit for cancellation of the title deeds of 15 of the borrowers claiming that she is the original owner of the land and the sale deeds which the bank was holding were got executed with the connivance of one impersonator Smt. Kampa Ushasri and Shri Y. Koteswar Rao. The remaining 5 plots were reported to have been sold by Ms. P. Swetha, the real owner, to different persons earlier and the same were again sold by Maruti builders / Smt. Kampa Ushasri to the other 5 borrowers by way of misrepresentation / impersonation. Later on the 15 borrowers, Ms. P. Swetha and the developer of her property agreed for a compromise settlement in the Lok Adalat and consent decree was passed and based on the compromise decree the IG stamps and Registrar cancelled all the 15 title deeds. Thus the bank was defrauded to the tune of Rs. 16.34 mn by the builder.

25 M/s Mittaso India Pvt. Ltd.

Address : Uklana Road, Narwana,

District - Jind 126116,

Haryana.

Directors : 1) Shri Babu Ram Mittal

2) Shri Sonu Mittal

3) Shri Monu Mittal

House No. D-60, Ward – 8,

Model Town, Narwana,

District - Jind 126116,Haryana

Nature of Irregularities : The company was initially sanctioned a cash credit limit of Rs 50.00 lakh, which was enhanced to Rs 125 mn on March 30, 2012. The account was a standard asset throughout. The credit facility was also collaterally secured by mortgage of factory land and building as well as other landed properties valued at Rs 155.80 mn in the name of the directors. During the annual statutory audit in March 2013, the auditors observed irregularities in the company’s financial statements submitted to the bank. On comparing the statements with those filed by the company with ROC discrepancies were observed. On further investigation it was revealed that the company was submitting different sets of audited balance sheets to the bank and to the ROC/Income Tax authorities. The company was showing much higher sales figures than that of the actual and reported to statutory authorities resulting in sanction of higher credit facilities than it was actually eligible for. Thus, the bank was defrauded to sanction limits far above the company was otherwise eligible for wherein the outstanding amount stood at Rs 103.90 mn.

16


26 M/s. Deccan Chronicle Holdings Ltd.

Address : 36, S D Road,Secunderabad

Directors : 1. Shri. T Venkatram Reddy

2. Shri. T Vinayak Ravi Reddy 8-2-703/A/6/C, Road No.12 Banjara Hills

Hyderabad – 500 034 3. Shri. P K Iyer 8-2-283/B/5, Plot No. 2 Road No. 3,

Banjara Hills Hyderabad – 500 034

4. Shri. N Krishnan (Since resigned)

5. Shri. M Sukumar Reddy

6. Shri. G Kumar

7. Shri. P Krishnan

8. Shri. V Suresh

Nature of Irregularities : The company was enjoying fund based and non-fund based limits from a bank under sole banking arrangements since 1950 which were last renewed on July 19, 2011 by sanction of OCC/ODBD limit of Rs. 1500.00 mn and adhoc limit of Rs. 300.00 mn. Another short term loan of Rs. 1500.00 mn was sanctioned to the company by the same bank on December 01,

2011. The limits were secured by hypothecation of stocks and book debts and collaterals of 560.00 mn and printing press equipment valued at Rs. 1328.60 mn. The account turned NPA on

September 06, 2012. In September 2012 itself, the lender bank decided to subject the account to forensic audit to ascertain the reason for turning the account NPA. On conducting forensic audit, it came to light that the company had understated the borrowings in the balance sheet as at March

31, 2010; March 31, 2011 and March 30, 2012 and the same did not correlate with the statements of bank accounts. It was also revealed that the company had borrowed large amount of money from various lenders during the last 12-18 months. The company had not taken any No Objection

Certificate from the bank while borrowing from other banks/financial institutions. The company had also approached CDR seeking restructuring of limits sanctioned by banks. It was observed from the data furnished by the company to CDR Group that figures relating to overall borrowings, outstanding under working capital limits sanctioned, outstanding term loans etc. showed wide variations vis-à-vis the report shared by the company with the bank with reference to position as on

December 31, 2011. This established the fact that financial statements furnished by the borrower to the lender bank did not represent true picture of borrower financial standing. The lender bank also observed that the borrowing company had created charge on the current assets of the company in favour of many banks. Thus, the borrower company had defrauded the bank to the tune of Rs.

3500.00 mn.

27 (A) M/s. Laxminivas Infra Projects

Address : 50-102-4, North Extension,Seethammadhara ,Vizag – 530 013

Partners : 1) Shri. P C Kali Prasad

2) Shri. Thotakura Purnachandra Rao ,50-102-4, North Extensin,

Seethammadhara , Vizag – 530 013

(B) M/s. Sri Venkateswara Infra Projects

Partners : 1) Shri Maddali Sai Ratna Sekhar

503-B, Sector-11, Ukkunagaram,Vishakhapatnam

2) Shri Koganti Srinivas

54-54-6, North Extension,Seethammadhara , Vizag – 530 013

Nature of Irregularities : A bank had sanctioned housing loans, cash credit limits and agriculture loans to certain individual borrowers which were, in fact, used by two entities viz. M/s Lakshmi

Nivas Infra Projects (LNIP) and M/s Sri Venkateswara Infra Projects (SVIP) by using the following modus operandi:-

17


Housing Loans: The Branch Manager of a bank had sanctioned 25 housing loans of Rs.1.20 mn each to the employees of M/s Lakshmi Nivas Infra Projects (LNIP) and M/s Sri Venkateswara Infra

Projects (SVIP) for the purpose of construction of house in each of the 25 separate plots in '

PORTECO' venture developed by M/s Lakshminivas Infra Projects. Equitable mortgage of property was created in all the accounts and the loans were disbursed through RTGS to M/s Lakshminivas

Infra Projects. Post disbursement inspection was also carried out by the BM who had commented in his report that all the houses, had come up to slab level. Subsequently, it was observed that the developer, M/s Lakshminivas Infra projects, did not complete the construction of the houses and the borrowers had failed to repay the installments. When the branch officials tried to contact the borrowers, they could not trace the borrowers at the given addresses. It was also observed that the partners of M/s Lakshmi Nivas Infra Projects and the other firm M/s S V Infra Projects had issued fabricated salary certificates and Form-16 to their employees for availing the housing loans from the bank. The partners of M/s SVIP had also availed housing loans from the bank. Thus, the partners of both the firms had colluded and connived with the borrowers and got the sale agreements registered for the purpose of availing loans and cheated the bank.

Cash Credit: Cash credit limits of Rs.1.50 mn each was sanctioned to 8 borrowers for trading in iron and steel and obtained collateral security of semi finished houses in the community layout of

M/s Porteco. Equitable mortgage of the plots was created in all the accounts. After availing the limits by the borrowers, the construction of the houses was not completed by the developers.

Further, it was observed that there was no shop available or operation in any of the accounts and the Cash Credit account holders had colluded with partners of M/s LNIP and created sale deeds and registered them to show that they had purchased the plots in the 'PORTECO' and cheated the bank by siphoning off the amount.

Agriculture Term loan and Cash credit A/cs: The BM had sanctioned 4 UGC loans and 4 term loans under Agriculture between November 26, 2011 and December 10, 2011 without conducting due diligence, pre-sanction inspection and without assessing the requirements of borrower. End use of the finance was also not ensured. It was observed that dairy units were not established and the funds were not utilized for crops and the funds were diverted through their connected accounts to the benefit the developer M/s Laksminivas Infra Projects. Subsequently, during the inspection by the succeeding Branch Manager for recovery of over dues in their loan accounts, it came to notice that borrowers were not available at the given addresses and their whereabouts could not be traced. Then, it was confirmed that the proceeds of loans sanctioned in the form of housing loans, cash credit limits and agriculture loans were diverted to finance the construction activity of M/s

Lakshminivas Infra Projects and all the borrowers i.e. employees of the firm and their associates colluded with M/s LNIP to cheat the bank. All the accounts were classified as NPAs i.e. Cash credit accounts on March 31, 2012 and other accounts on June 30, 2012 except four housing loan accounts. Thus, the bank was defrauded to the tune of Rs. 47.00 mn by the developer/borrowers.

18


28 M/s. Omaxe Systems

Address : 308, Red Rose Building, Nehru Place,New Delhi

Propreitor : Shri. Rajesh Kumar Chawla C-7/7, Mianwali District Co-operative Housing

Society, Mianwali Nagar, Nangloi, Delhi - 87

Nature of Irregularities : A bank had sanctioned CC limit of Rs.10.00 mn on August 14, 2010 under Easy Trade Finance which was enhanced to Rs.25.00 mn on January 08, 2011 and further enhanced to Rs.35.00 mn on February 15, 2012. The limit was secured by hypothecation of stocks and collaterally secured by house property. During regular inspection of the branch, it was observed by the bank’s auditors that the turnover in the account was less when compared to previous years. Further investigations revealed that the goods hypothecated to the bank were removed from the godown without the knowledge of the bank and the borrower was not traceable.

It was also found that the VAT Returns/PAN card submitted by the borrower were fake. Thus, the bank was defrauded to the tune of Rs. 35.42 mn.

29 1.M/s ACE Agro Industries Pvt. Ltd.,

2. M/s Deccan Florabase Ltd.

3. M/s ACE Agro Natural Sweeteners Pvt.Ltd.

Address : A/752, DE-JOSS, Ice Factory Road,Off Hill Road, Bandra, Mumbai – 400 050.

Site/Manufacturing Unit: Village:Jambhul, Taluka: Maval,

District: Pune, Maharashtra.

Directors : 1) Shri Avinash Rangnekar Add 1: 302, Le Papeyon, Mount Mary Road, Bandra

(West), Mumbai – 400 050. Add 2: C/802, Forest Castle, North Main Road,

Mundhwa, Pune, Maharashtra.

2) Shri Anirudh A. Rangnekar C/802, Forest Castle, North Main Road, Mundhwa,

Pune, Maharashtra.

Nature of Irregularities : The three companies were enjoying various credit facilities with the bank.

The borrowal accounts of the companies as well as their current accounts were being credited with funds transferred from other fictitious borrowal accounts through a circuitous route involving other bogus loan accounts by the bank officials to maintain these accounts as standard assets in bank’s books. The fictitious loan accounts were opened by one of the officials of the branch by manipulating the system and without any documents/security apparently in connivance with the promoter of the companies. To hide reflection of these bogus accounts in Irregularity/ Exception/

NPA Reports, the repayment was fed in the system as "Bullet Payment at the end of the term".

Further, the amount of interest applied in the loan accounts of these companies was not commensurate with the rate of interest and was much less than the actual interest. The interests accrued in accounts of genuine borrowers, though debited to the accounts, were also being transferred / credited to the companies’ accounts through fictitious accounts route instead of being credited to interest earned account of the bank. Thus the bank was defrauded to the tune of Rs.

429.68 mn by the fraudsters in connivance with bank’s Official.

30 M/s Garuda Vahan Pvt. Ltd.

Address : Beldhi, P S Brahmani Taranga,Rourkela-769013,Orissa.

Directors : 1) Shri Sanjib Kumar Naik

C/o Shri Gagan Bihari Mohanty

Dhalsara, Sar Gipali,Lephripada, Sundergarh-770021

2) Shri Prakash Agarwal

Madhusudan Nagar,Tulasipur, Cutack-753008

3) Ananda Prasad Mahanty

Tantara Dengala, Lahunipara, Sundergarh-770042

19


Nature of Irregularities : A NBFC had sanctioned three loans for purchase of commercial vehicles on July 31, 2012. The NBFC released the loan after completion of the documentation through cheques in favour of the dealer M/s Garuda Vahan Pvt Ltd. The dealer failed to deliver the assets funded after encasing the cheques. However the dealer furnished necessary documents to the said NBFC evidencing delivery and registration of vehicles which on verification were found to be fake. Thus the dealer had defrauded the NBFC to the tune of Rs 7.12 mn.

31 1) M/s Sai Maruthi Auto Industries

Address : S.No.302, Shed No.3, Ramireddy Nagar, Opp to FOX Sagar, Jeedimetla

Hyderabad.

Propreitor : Shri V.Surendra Babu Plot.No.11, Mithra Hills, Hydernagar, Hyderabad

2) M/s Shirdi Sai Industries & Engineering

Address : S.No.302, Shed No.7, Ramireddy Nagar, Opp to FOX Sagar, Jeedimetla

Hyderabad.

Propreitor : Shri K.Vijaya Kumar

D.No.12-6E, Srinilayam Apartments,

Adarshnagar, IDPL Colony, Hyderabad - 71

3) Smt. Velikanti Sandhya

Address : Flat No.102, Narayandri Towers, Vivekanandanagar Colony, Kukatpalli,

Hyderabad

4) M/s Shridi Sai Industries & Engineering

Address : D.No.12-6E, Srinilayam Apartments, Adarshnagar, IDPL Colony, Hyderabad – 71.

Associate

Concerns : a) M/s S.S.Food & Beverages Plot.No.11, Mithra Hills, Hydernagar, Hyderabad.

Propreitor : Shri V. Surendra Babu Plot.No.11, Mithra Hills, Hydernagar, Hyderabad

Associate

Concerns : b) Sai Vaishnavi Auto Industries


Associate

Concerns : c) M/s Sai Vaishnavi Auto Industries

Address : H.No.18/1B/5A. SVCIC, Jeedimetla, Hyderabad – 55

Associate

Concerns : d) M/s Vaishnavi Industries

Address : D-60, Phase-I, IDPL, Jeedimetla, Hyderabad – 37.

Associate e) M/s Sri Vaishnavi Auto Industries

Concerns :


Propreitor : Shri K.Vijaya Kumar D.No.12-6E, Srinilayam Apartments, Adarshnagar, IDPL

Colony, Hyderabad - 71

Associate

Concerns : f) M/s Seven Hills Traders

Address : Plot No.798, Subash Nagar, Jeedimetla, Hyderabad – 71.

Propreitor : Smt V.Sandhya Plot.No.11, Hydernagar, Nizampet Road, Hyderabad – 18.

Associate

Concerns : g) M/s S V Industries

Address : Opp to FOX Sagar, Jeedimetla Hyderabad.

Propreitor : Smt V.Sandhya Plot.No.11, Hydernagar, Nizampet Road, Hyderabad – 18.

20


Nature of Irregularities :

The borrowers of connected group had availed loans in a bank in different trade names viz., 1. M/s

Sai Maruthi Auto Industries, 2. M/s Shirdi Sai Industries & Engineering, 3. Housing Loan a/c of V.

Sandhya from March 2011 onwards. The primary security of each business were not ascertainable as they were not demarcated separately and the machinery / stocks were mixed up with that of associate concern as all business units were functioning from the same premises. Stock statements were not furnished periodically. Since some of the accounts with other branch of the same bank with similar deficiencies has already been declared as fraudulent in October 2012, the concerned bank decided to classify these accounts also as fraud Thus the borrowers and its associate concern had defrauded the bank to the tune of Rs 20.30 mn by diverting the funds to the group accounts.

32 M/s Shreeji Corporation

Address : Shop No. 23, Pathmesh Leela Apartment, New MHB Colony, Gorai Road, Borivali

West, Mumbai.

Propreitor : Shri Nilesh N Mehta 78, B Wing, Charkop Shruti Co-op. Hsg. Soc. Ltd. Plot No.

198, Charkop, Kandivali West, Mumbai – 400067.

Associate

Concerns :

1) M/s Mehta Opticians

2) M/s Udyog Enterprises

Address : Shop No. 23, Pathmesh Leela Apartment, New MHB Colony, Gorai Road, Borivali

West, Mumbai.


A bank had sanctioned a cash credit limit of `. 12.00 mn on March 18, 2013 to M/s Shreeji

Corporation, a proprietary concern of Shri Nilesh Nagindas Mehta. The above credit limit was primarily secured by hypothecation of stocks and book debts. The said facilities were also collaterally secured by equitable mortgage of flat in the name of the proprietor. The branch obtained title search report of the above residential property from panel advocate, who stated that

Shri Mehta has absolute clear and marketable title over the said property, NOC from the society dated March 17, 2013 bearing signature of Chairman and Secretary was submitted. The Equitable

Mortgage was created on March 22, 2013 by deposit of original title deeds and other documents as per list given by the advocate. Due diligence was done by the branch officials before releasing the limit by obtaining the KYC documents of the proprietor making pre-disbursement inspection of the proposed property to be mortgaged., interacting with the guarantor at the aforesaid flat and by carrying out inspection of office and go down of the Firm at Shop No 23, Prathamesh Leela

Apartment, New MHB Coloney, Gorai Road, Borivali (West), Mumgbai-400092. Etc. After complying with all the pre-disbursement terms of sanction, the limit in their cash credit account was released from March 28, 2013 by the branch. The firm utilized entire limit mostly by way of transfer through RTGS in favour of Virat Corpn, Mehta Corpn, Infinity Multy trading P Ltd. Credit transactions of Rs. 8.48 mn have also been made in the account by the firm on different occasions.

While registering the bank’s charge on the said collateral property with CERSAI, it was observed that the charges of other two banks were existing on the same property. However, the names of borrower were different and mentioned as Udyog Enterprises and Mehta Opticians respectively.Date of registration of charges with CERSAI was October 19, 2011 of 1st bank &

October 21, 2011 for the second bank.

Subsequently when the other banks were contacted, it was informed that the borrower was enjoying credit facilities since 2009 and the limit was sanctioned against stock of spectacle frames and goggles (i.e., same stock) and against collateral security of same property. Thus the bank was defrauded to the tune of Rs 11.98 mn since the proprietor/borrower obtained another PAN card for availing credit facilities from the bank and also the collateral security offered to the bank was already charged to two other banks.

21


33 M/s Subhash Shuttering & Building Material

Address : 1) Village Atta, G.T.Road, Goraya, Distt. Jalandhar.

2) Plot No. 39, Mangli Nichi, Chandigarh Road, Ludhiana

Propreitor : Proprietor:- Shri Subhash Chander s/o Shri Baij Nath Mandal Address: Plot No.

39, Mangli Nichi, near Govt.Sr Sec. School, Chandigarh Road, Ludhiana

Guarantors : Shri Harpal Singh s/o Shri Mohinder Singh Address: House No. 430, Jodhewal

Basti, Ludhiana 141001

2) M/s Pankaj Manufacturing & Trading Co.

Address : Near D A V School, Village Atta, Goraya, Dist Jalandhar

Propreitor : Proprietor:- Shri Pankaj Kumar s/o Shri Baldev Raj Sharda Address: Near D A

V School, Village Atta, Goraya, Distt. Jalandhar

Guarantors : Shri Harpal Singh s/o Shri Mohinder Singh

3) M/s Payal Enterprises

Address : Address: Krishna Colony, Near Atta river, Goraya Distt Jalandhar

Propreitor : Proprietor:- Shri Surinder Kumar Chhabra s/o Shri Amarjit Near Shani Mandir,

Village Atta, Goraya Distt.Jalandhar 2 nd address Gali No. 6, Ram Nagar, Moga

Guarantors : Shri Harpal Singh s/o Shri Mohinder Singh Address: House No. 430, Jodhewal

Basti Ludhiana 141001

4) M/s Subhash Construction Co.

Address : Village Atta, G.T.Road, Goraya, Distt.Jalandhar

Propreitor : Shri Ashok Kumar s/o Shri Subhash Chander , Plot No. 39, Mangli Nichi, near

Govt. Sr. Sec. School, Chandigarh Road, Ludhiana

Guarantors : Shri Harpal Singh s/o Shri Mohinder Singh , House No. 430, Jodhewal Basti,

Ludhiana 141001


A bank had issued four BGs of Rs. 9.00 mn each to the borrowers for procurement of raw materials from National Small Industries Corporation

Limited (NSICL), which were guaranteed by the equitable mortgage of immovable property standing in the name of guarantor Shri Harpal Singh. All the 4 BGs were invoked between

November 24, 2012 to December 4, 2012 due to default of the firms .The bank paid an amount of

Rs. 26.76 mn to the beneficiary NSICL. On January 17, 2013 the real owner of the property visited the branch and informed that he had not mortgaged his property as security in the above accounts.

On obtaining legal report from another empanelled advocate on January 29, 2013, it was revealed that the Title Deed of the property, which was in possession of the bank, was fake and nonenforceable. There were many loop holes observed in the account .The Directors of the above four firms are available but the guarantor is not traceable.

The fraud was committed by the borrower in collusion with the guarantor .Thus the bank was defrauded to the tune of Rs. 26.76 mn .

22


34 1) Shri Vishal Jaiswal

Address : H# 311, 1st floor Sector-15 A, Chandigarh-160015

2) Shri Mohan Lal

Address : House no. 14-15, Adarsh Nagar, Naya Gaon, Zirakhpur

3) Shri Gurpreet Singh

Address : H. No 166-A Green City Baltana, Zirakhpur

4) Shri Rakesh Kumar

Address : House No 1586, Dadu Majra Colony, Near Atta Chakki, Sector-38, Chandigarh

5) Shri Jaswinder Singh

Address : Flat #604-B, Ravindra Apartment Baltana-Zirakhpur Punjab

6) Shri Jagbir Singh

Address : House # 409, Sector 35 A, Chandigarh

7) Shri Rajendra Singh

Address : House No 202/5 Bank Colony, Manimajra, Chandigarh-160101

8) Shri Kamal Kumar

Address : House No 249 Phase-1, Ravindra Enclave Baltana

9) Shri Purshotam Lal Arora

Address : H# 149 B Sunny Enclave, Desu Majra Kharar

10) Shri Vijay Kumar

Address : Flat # 90, Block D, Spengle Heights, Dhakoli, Zirakhpur

11) Shri Vicky Arora

Address : House No. 15 Hem Vihar, Baltana Zirakhpur


An employee of a subsidiary of a bank in connivance with various individuals sourced home loan applications for funding purchase of plots and residential properties developed by the local builders.

The title and other documents pertaining to the properties and also KYC documents submitted by the borrowers were found to be forged and fabricated. Thus the bank was defrauded to the tune of

Rs 24.60 mn

35 M/s Ashoka Agency

Address : FD 6 Pitampura New Delhi

Propreitor : Shri Anoop Kumar Gupta Address: D 13/19 Sector 7 Rohini Delhi

M/s Hanuman Traders

Address : 4193, Gali Barna Deputy Ganj, Sadar Bazaar, New Delhi-110085

Propreitor : Shri Jagmohan Mittal ED IA Pitampura New Delhi


A Bank had sanctioned Cash Credit limit of Rs30.00 mn to Ashoka Agency on February 14, 2011 against the collateral security of two immovable properties belonging to the proprietor Shri Anoop

Kumar Gupta. Later, at the request of the borrower, the collateral security of one of the properties was released and the limit was reduced to Rs. 20.00 mn on August 25, 2011. The said limit of Rs

20.00 mn was to be liquidated in 10 months from September 1, 2011 by reducing the limit/drawing power to an extent of Rs. 2.00 mn per month, which the borrower failed to do. The bank had reported that during their Central Office inspection on February 25, 2013, it was observed that the borrower had not submitted stock statements after July 31, 2012 and there were no operations in the account. The bank had also sanctioned a cash credit limit of Rs. 30.08 mn on June 13, 2011 through another branch to M/s Hanuman Traders against collateral security of commercial property.

During the unit visit by the bank officials it was found that stocks were common and godown address was also same in both the cases of M/s Ashoka Agency and M/s Hanuman Traders. In the mean time, on April 22, 2013, another bank had reported that the collateral property was also

23

Caution Notice No.3/2013-14 CO Credit Division mortgaged to them. Thus, the borrowers did not utilise the proceeds of the Cash Credit limit for business purposes and diverted funds.

The bank was thus defrauded to the tune of Rs 50.05 mn.

36 Shri Deepraj B Chavan C/o Shankar singh G Chavan

Address : Flat No. 84

Ward No. 43

Mahabaleshwar Nagar

Belgaum, Karnataka

Shri Meghraj B Chavan

S/o Bhagavan Singh Chavan

Address : H No. 164 Third Cross

Ravi Nagar

Hubli-580025. Karnataka

Shri Sai Prasanna Tirupathy

Address : MIG 309 16th Cross

Navanagar

Hubli -580 025

Karnataka


A bank had sanctioned three vehicle loans to members of one family at two branches of the bank.

Loan proceeds were directly credited to the SB accounts of the borrowers. It was observed that one vehicle was financed twice by the branch manager. Valuer also joined hands with fraudsters by giving inflated value for the buses at both the branches of the bank. Investigations revealed that huge money was advanced for purchase of old buses and no transaction took place, no change of ownership of buses effected and no lien was noted in the RC book in favour of the bank. The borrowers in connivance with the branch manager misused the funds of the bank.

Thus the bank was defrauded to the tune of Rs 6.21 mn.

37 M/s Xact Products

Address : E-286, FF Category-III Mayur Vihar Phase-II Delhi -110 091

Propreitor : Shri Amit Chatterjee


The bank had sanctioned an OD facility of Rs 15.00 mn in November 2007 to the borrower firm against collateral security of two flats. When the account turned NPA in December, 2010 one flat was sold by the borrower (with the permission of the bank) and sale proceeds were credited to the borrowal account. In case of the second flat, the bank was informed that the borrower had availed credit facilities from three other banks also. A fresh title search report revealed that the documents submitted by the borrower while availing credit facilities were fake and fabricated. Thus the bank was defrauded to the tune of Rs 9.45 mn.

38 M/s Daga Trading Co.

Address : 2373/218 Gopinath Building II floor Behind G B Road Delhi-110 006

Propreitor : Shri Kesari Chand Daga Address: Ward No.8 Dev Gali Mohalla Shahadara Delhi

Guarantors : Smt. Prabha Daga Rsw/o Kesari Chand Daga Address: Same as Sri Kesari

Chand Daga

24



A bank ( Bank-A) had sanctioned CC limit of Rs 5.00 mn on March 26, 2011 to the borrower firm for working capital requirements against collateral security of EM of a residential building standing in the name of Smt. Prabha Daga, wife of the proprietor. When the account turned irregular, bank took physical possession of the property under SARFAESI Act and a notice to this effect was published in news papers on November 29, 2012.

On December 20, 2012, bank came to know that another bank (Bank-B) had taken possession of the same property for OD loan availed by the borrower against the EM of the same property. Bank also received a letter from one more bank (Bank-C) stating that one Shri Gajanand Daga had availed a loan of Rs 4.70 mn by mortgaging the same property.

Thus the bank was defrauded to the tune of Rs 5.00 mn

39 M/s Maa Chandi Oil Mills

Address : Flat No.11 Municipal Premises No.3/1 Jahura Bazar Lane Kolkata-700 042

Propreitor : Shri Prakash Das


A bank had sanctioned a term loan of Rs 1.40 mn to M/s Maa Chandi Oil Mills on April 26, 2010 for purchase of 6 numbers of Ghani (expeller) and other accessories. A CC limit of Rs 3.50 mn was also sanctioned towards working capital limit. Another term loan of Rs 2.05 mn was sanctioned for construction of building and machinery. When the account turned irregular and investigations were done it was revealed that the unit was 200 kms away from the branch and had no power connection to run the unit. The unit had become defunct after running for a few days with the help of a generator. Amounts were transferred to firms which were not related to the business of the firm. The purported supplier of the 6 Ghani was found to be fake. Branch had not ensured end use of funds. Thus the bank was defrauded to the tune of Rs 7.10 mn.

40 M/s Sonai Marketing

Address : 254,Nabalia Para Road Barisha Kolkata-700 008

Propreitor : Smt. Soma Chatterjee (nee Roy Choudhury) 254, Nabalia Para Road Barisha

Kolkata-700 008


A bank had sanctioned a Cash Credit limit of Rs 4.50 mn to the firm on June 19, 2009 for wholesale trading of medicines. This facility was collaterally secured by mortgage of a building standing in the name of the proprietor of the firm. When the account turned NPA and title deeds were verified, it came to light that the title deeds submitted by the borrower were not genuine.


41 M/s Bonn Net

Address : Khoo Bhalawala Gali Shiva, Video Islamabad Amritsar, (Punjab )

Propreitor : Smt. Neelam W/o Parmod Kumar Address: Gali No.10 Main Bazaar Guru Nanak

Pura Islamabad Amritsar, Punjab

25



A bank had sanctioned a CC limit of Rs 3.00 mn to the borrower firm M/s Bonn Net under CGTMSE scheme on June 22, 2009. The limit was enhanced to Rs 5.00 mn on December 18, 2010 by the branch. The borrower stopped operations in the account in the month of January 2012 and also did not submit stock statement after February 2012. During inspection on June 13, 2012, stocks were found missing. Stocks were disposed off by the borrower and proceeds were not deposited in the

CC a/c. Unit was not working and borrower was not traceable. Thus the bank was defrauded to the tune of Rs5.42 mn.

42 M/s Shree Vaishnavee Enterprises

Address : 2/212, Mandvi Navjivan Building, Masjid Bunder(W), Mumbai-3

Propreitor : Shri Amritlala Jayantilal Bava

502, Divyasrushti “c”wing, Gaurav garden, Kandivali(W)

M/s Saurav Engineering Works Trailer Manufacturer & Repairer

Address :

1 st

Address Plot No 1666, Rd No 20 Near Food Land Company Steel Market,

Kalamboli Navi Mumbai 410218 2 nd address 67/3, Chatrabhuj Khetsi Bldg. 178,

Sant Tukaram Road Masjid (E) , Mumbai 400009

Shri Tejas Lodaya

Address : Res : 701, Pranav Apartment, M G Road Mulund (West), Mumbai 400080 Off :

207, Vasudev Chamber, Opp Krishna Motors & “D”Mart, Mulund – Goregaon

Link Road Nahur (West) 400078


In Oct 2010 , one co-operative bank sanctioned term loan of Rs.19.0 millions and cash credit of

Rs.5.0 millions for purchase of 10 New Ashok Leyland Truck/Trailers to the unit. The disbursement of loan was made by pay orders favouring “Automotive Manufactures” purportedly a dealer of

Ashok Leyland vehicles (127, Bazar Ward, Kurla, Mumbai 400070; E/2/603, Highland Park, Mulund

Colony, Mulund(W), Mumbai 400082 ) whose quotations were considered while sanctioning loan.

The pay orders were handed over to the borrower. The borrower, thereafter submitted receipts issued by vendors, copies of RC/TC book, insurance certificate and photographs of vehicles as an evidence of end use which apparently were verified by branch officials and taken on record. There was regular repayment on the account for almost two years till up to September, 2012. When the repayment became irregular the branch issued notices to the borrower for making payment.

Meanwhile the account became NPA and the bank issued notices to the borrower for payment. The bank then came to know that no vehicle has been purchased using bank’s loan. On further investigations, it was revealed that borrower submitted quotations of “Automotive Manufactures” who were not the authorized dealer of Ashok Leyland but had name similar to the genuine authorized dealer “Automotive Manufactures Pvt. Ltd.” The said bogus entity had accounts in two banks with proprietors Mr Ramesh Vitthaldas Somaiya and Mr Laherchand Laxmichand Maisheri.

Thus the amount was not collected by genuine authorized dealer but an entity having similar name whose quotations were submitted. Further search with RTO revealed that none of the vehicles, whose RC books were submitted, was owned by borrower or was under HPA charge of bank. Also insurance copies submitted were found forged. Borrower also submitted fake quotations of M/s

Saurav Engineering Works, Company, for fabrications. The loan disbursed for same was collected by one Shri Tejas Lodaya through his current account maintained with another bank. Incidentally

Shri Tejas Lodaya was the introducer for the account of M/s Shree Vaishnavi Enterprises. Thus the bank was defrauded to the tune of Rs 17.50 million.

26


43 1) M/s. Puneet Fashions Pvt. Ltd.

Address : 854/2, Punjab Mata Nagar & 483/1, street no: zero Janakpuri, Ludhiana Punjab

Directors : •

Shri. Tilak Raj Bedi, S/O Swarn Singh Bedi r/o 171,The Mall Enclave Rani

Jhansi Rd Civil Lines,Ludhiana 2 nd address 854/2,Punjab Mata Nagar ,

Pakhowal Rd , Ludhiana

•

Shri. Nikhil Bedi S/o Sri Tilak Raj Bedi Address: 171,The Mall Enclave Rani

Jhansi Rd Civil Lines,Ludhiana 2 nd

Address: 854/2 Punjab Mata Nagar

Pakhowal Road,Ludhiana

2) M/s. Nikhil Exim Pvt. Ltd.

Address : 473/1, St .No: Zero Janakpuri Ludhiana.Punjab

Directors : Shri. Nikhil Bedi S/o Sri Tilak Raj Bedi Address: R/o 854/2, Punjab Mata Nagar ,

Pakhowal Rd, Ludhiana Punjab

. Neha Bedi W/o Puneet Bedi Address: R/o 854/2, Punjab Mata nagar , Pakhowal

Rd, Ludhiana

Shri. Puneet Bedi S/o Tilak Raj Bedi Address: r/o 171,The Mall Enclave Rani

Jhansi Rd Civil Lines,Ludhiana

M/s. Neha Exports INC

Address : 473/1, St No:Zero, Janakpuri Ludhiana Punjab

Proprietors: Smt. Neha Bedi W/o Puneet Bedi Address- 471/1, Street No zero Janakpuri,

Ludhiana,Punjab 2 nd address 64,-A, bearing MC No: B-23/60/42 (Anjana Tower)

Industrial Area A, Ludhiana 3 rd address 171,The Mall Enclave Rani Jhansi Rd

Civil Lines, Ludhiana

4) M/s. Rajan Trading Pvt. Ltd.

Address : 559/4,Kali sadak, Jalandhar bye pass Rd, Ludhiana, Punjab.

Directors : Shri. Navneet Bedi S/O Shri Daljeet Singh Bedi Address: 854/3 Punjab Mata

Nagar,Pakhowal Road, Ludhiana Punjab

Shri. Deptendu Giri S/o Achintya Kr.Giri (Since resigned from co.) Address: 483/1,

Street No:zero, Janakpuri ,Ludhiana 2 nd address 36, Basant Nagar, Vasant Vihar,

New Delhi 3 rd address 108-B,Street No.9 Narsirpur Colony, New Delhi-110045

5) M/s. Kapoor Exports INC

Address : 854/3, Punjab Mata Nagar, Ludhiana, Punjab.

Partners : Shri. Daljit Singh Bedi S/o Swarn Singh Bedi Address: 854/3,Punjab Mata Nagar

Pakhowal Rd. Ludhiana, Punjab.

Shri. Jivan Kumar Gupta S/o Paramjeet Gupta Address: 2563 phase I, Urban estate Dugri Rd. Ludhiana, Punjab.

6) M/s. S K Textiles

Address : 854/4, Punjab Mata Nagar, Ludhiana, Punjab.

Partners : Shri.Sumeet Bedi S/o Charanjeet Bedi Address: 854/2,Punjab Mata Nagar

Pakhowal Road Ludhiana, Punjab.

M/s. Neha Bedi w/o Puneet Bedi Address: 854/2,Punjab Mata Nagar, Pakhowal

Rd Ludhiana Punjab. 2 nd address 64-A,bearing MC No:B-23/60/42(Anjana

Towers) Industrial Area A Ludhiana 3 rd

Address 171, The Mall Enclave Rani

Jhansi Rd, Civil Lines, Ludhiana

7) M/s. Puneet Embroidery Works

27


Address : 854/2 Punjab Mata Nagar Ludhiana, Punjab.

Directors : Shri. Tilak Raj Bedi, Smt. Kalpana Bedi,. Shri. Puneet Bedi Shri. Daljit Singh


The companies mentioned from serial No: 1 to serial No: 7 were enjoying credit facilities from a bank .The bank had decided to treat them as a group and sanctioned an aggregate working capital limit of Rs. 1427.60 mn on March 18, 2010 on the condition of closure of M/s Rajan Trading P Ltd.,

M/s Kapoor Exports, M/s S.K. Textiles and M/s Puneet Embroidery Works, reduction of effective working capital limit to Rs.1200.00 mn in other three units within six months and merger of capital of those units with flagship company M/S Puneet Fashions P. Ltd. which were not fulfilled by the borrowing units and the accounts remained irregular and overdrawn. Restructuring of the accounts was done on February 23, 2012 and the accounts were declared NPAs on September 11, 2012 by the bank. About 378 overdue export bills were pending for realisation.

Subsequent investigations revealed that more than 95% of the overdue bills sent for collection and purchased by the branch pertained to three importers namely FIRST CYPHER (with Shri. Rohit

Sharma as MD of the firm), ALWASEET (with Shri. Saji Thomas George as MD of the firm) &

SOFTWIND TRADING (whose whereabouts at Dubai could not be ascertained). However, no relationship among buyers and sellers was reported in forensic audit.

The forensic audit revealed the irregular acts of the Group, such as inter-group transfer of funds and utilization of funds according to their own convenience, non-disclosure of credit facilities of Rs.

146.00 mn availed from another bank, misutilisation of funds as no stocks/very less stocks were available, high value cash transactions in the accounts of the group, diversion of funds through individual accounts with other banks, utilization of funds for adjustment of the over dues in the group accounts and issue of accommodation cheques by the borrowers on their accounts opened with other banks and insistence on the branch to purchase those cheques. Thus, the bank was defrauded to the tune of Rs. 1399.62 mn.

44 , M/s. Sun Promoters

Address : No.126, Thulasingam Street, Perambur, Chennai-600011

19/24,Jawagar Street, Ramana Nagar, Sembium, Perambur, Chennai-600011

Propreitor : Shri.R.Srinivasan s/o S Rajagopal

Nature of Irregularities : bank had sanctioned 22 housing loans aggregating to 52.88 mn to 22 borrowers during the year

2012. These borrowers were purportedly employees of M/s Sun promoters, a builder. These Home loans were sanctioned on the basis of fake Salary certificates, issued by M/s Sun Promoters.

Investigations revealed that in most of the cases the borrowers were not living in the flats mortgaged to the bank but they were leased to outsiders and lease amount was collected by Shri

R.Srinivasan, Proprietor M/s Sun Promoters. The promoter had utilized the loan amount sanctioned to the 22 borrowers.

Thus, the builder in connivance with the borrowers defrauded the bank to the tune of Rs52.88 mn

28


45 M/s Star Bazar Pvt.Ltd

Address : HS-10, Kailash Colony New Delhi

Directors : Smt.Parineeta Malhotra Smt.Neeta Prakash B-24, Kailash Colony New Delhi

M/s Star Heritage Hotels Pvt.Ltd

Address : C-5/30 SDA Opp Main IIT Gate New Delhi

Directors : Shri Naveen Malhotra Smt.Parineeta Malhotra B-24, Kailash Colony New Delhi


A bank had sanctioned various credit facilities amounting to Rs` 365.98 mn to these two borrower firms during the period 2009-2012.When the accounts turned NPA action under SARFAESI Act was taken. During the visit of the bank officials to the property mortgaged with the bank, it came to light that the said property was already sold by the borrowers to different buyers and sale transactions were done after mortgage of the property with the bank. The stock hypothecated to the bank was also hypothecated to another bank. Thus the bank was defrauded to the tune of Rs

387.67 mn.

46 M/s Shri Tirupati Warehouse Kurawar Dist Rajgarh Madhya Pradesh

Address : Kurawar-Kalapipal Road Near State Bank of India At & PO-Kurawar Tehsil-

Narsinghgarh Dist.-Rajgarh, Madhya Pradesh 465667

Propreitor : Shri Ghanshyam Das Agarwal

Smt.Geeta Devi Agarwal

Nature of Irregularities : A bank had sanctioned loan against Warehouse receipts to 121 individual borrowers on various dates from July 6, 2011 to June 30, 2012 with a total sanctioned limit of Rs 95.40 mn. These warehouse receipts were issued by M/s Shri Tirupati Warehouse, an approved private warehouse. During RBIA of the bank, auditors inspected the warehouse on March

4, 2013 and found that there were no stocks in the warehouse against which the Warehouse had issued the receipts. It was also revealed that four warehouses owned by M/s Shri Tirupati

Warehouse were leased to M.P. State Warehousing Corporation under joint venture scheme without informing the bank. Stocks against which Warehouse receipts had been issued and pledged with the bank were disposed of by the owner of the warehouse and proceeds not deposited in the loan account of the borrowers. Thus the bank was defrauded to the tune of ` Rs

59.27 mn.

47 1) M/s Sanjana Township Pvt. Ltd.

Address : Flat No. 201, Second Floor, Mohan Shradda Complex, Habsiguda Main Road,

Hyderabad 500 007.

Partners : a) Shri Goli Sridhar b) Smt. Goli Sampoorna H No. 2-4-1047/1, New Samathapuri

Colony, New Nagole, Hyderabad.

2) M/s Sunny Enclave Builders & Developers

Address :

Add 1:- 223 Flat No. 107, 1 st

Floor, Sahiti Kalamanchi Complex, Opp.

Chaithanyapuri Petrol Pump, Hyderabad.

Add 2:- Flat No. 201, Second Floor, Mohan Shradda Complex, Habsiguda Main

Road, Hyderabad 500 007

Propreitor : Shri Goli Sridhar H No. 2-4-1047/1,

New Samathapuri Colony,

New Nagole, Hyderabad

3) M/s S S Constructions

29


Address : Plot No. 53/A,

Venkataramana Colony,

Mansoorabad, L B Nagar,

Hyderabad.

Directors : i. Shri V Anandkumar ii. Shri V Janardhan iii. Shri V Suvarna

Address:

3765/21, Venkataramana Colony, Mansoorabad, L B Nagar, Hyderabad. iv. Shri K Santoshkumar

Address:

Plot No. 18, Jana Priya Enclave, Rajiv Gandhi Nagar, Hyderabad. v. Shri G Siddeshwar Rao

Address:

H No. 19-60/1/A, Teacher Colony, Uppal, Hyderabad.


A bank had sanctioned housing/personal loans to 113 borrowers aggregating to Rs.325.45 mn through five of its branches in Hyderabad. The loans were released during the year 2008, 2009 and

2010. The builders in collusion with the borrowers defrauded the bank. On verification it was revealed that:-

1) The IT returns were found to be fabricated showing higher income to avail higher loan amount.

2) The housing loans were sanctioned for purchase of site and construction of house. The estimation of houses was highly inflated for availing higher loan amounts.

3) Bank funds were misused or diverted. The constructions of houses were either not undertaken or incomplete and without the plan approval from the concerned authorities. The present market value did not cover the liabilities.

4) Some borrowers availed housing loans from two branches by suppressing the information about their outstanding liabilities.

5) The loans credited to the builder’s accounts were withdrawn in cash and in many cases utilized for repayment of loans of unrelated persons.

The builders were found to be instrumental and involved in fabricating IT Returns of the prospective borrowers for availing higher loan amounts. There was a clear nexus between the builders and the borrowers.


48 M/s Bangaru Jewels (P) Ltd.

Address : No.307,Big Bazaar Street, Coimbatore.

Directors : Sri N Balaji S/o Mr. Nagendran Res. Address: 1- J May Flower Brooke Field Apt.

Brooke Bond Road Coimbatore

Shri N Ashok Off. address 304 Jain Ratna 41 West Periyasamy Road R.S.

Puram Coimbatore 641001

Res Address No:17 May Flower Brooke Field Apt Brooke Bond Road

Coimbatore 641002

Associate Concern: M/s Lavanya Jewels

Address : Cross cut Road, Gandhipuram, Coimbatore

30


Partners : Shri N. Balaji

Shri N .Ashok


A bank had sanctioned cash credit limit of Rs.120.00 mn on September 05, 2011.The loan was sanctioned by obtaining collateral security of land and building. The property was valued at

Rs.117.90 mn vide valuation Report dated September 03, 2011. It was reported in the media/Dailies that the key promoters Shri N Balaji and N.Ashok were absconding due to their heavy outside borrowings and their shop was closed.They are under police search. Thus the bank was defrauded to the tune of Rs.141.80 mn.

49 Guarantor : Shri Pampana Gowda

Address : Shri Pampana Gowda V Police Patil, S/o Veerabhadrappa, RO Budgumpa TQ

Gangavathi

Nature of Irregularities : A bank had sanctioned 18 produce loans against the stock of paddy stored in one private godown owned by Shri Pampana Gowda, who also stood as guarantor for all

50 the loans. The loans were not repaid at the stipulated repayment period. It was found that the paddy stored in the godown was disposed off without the bank's knowledge and the proceeds were adjusted to a few accounts though the godown keys were available with the branch.

Investigation conducted in the matter revealed that almost all the borrowers were of little networth.

Further they were cultivators of leased landed properties and the only asset shown was the value of the stock of paddy that had been pledged. They were also not aware of any remittances made to their accounts. Thus the bank was defrauded to the tune of Rs. 21.34 mn

Various Car Loans

Nature of Irregularities : It has come to the notice of the Reserve Bank of India that some unscrupulous borrowers are availing vehicle loans in connivance with vehicle dealers/sub dealers and defrauding various banks There is a spurt of such vehicle loan frauds in the banking sector in

Mumbai region. The modus operandi adopted by fraudsters in these cases are as under:

1. Dealers/Sub dealers open make–shift multi car showrooms and issue fake proforma invoices.

2. Various documents submitted by the borrowers like PAN Card, address proof, Salary certificate,

Bank statements, IT returns etc were fake/ fabricated.

3. Banks issued loan proceeds in the form of DDs/Pay orders which were encashed by the said dealers /sub dealers.

4. Fake/fabricated RC card, Insurance documents etc., were submitted by the borrowers.

5. Borrowers did not create assets out of the vehicle loans availed by them.

6. In many cases, funds were diverted by the dealers/sub-dealers for other activities.

7. RTO records revealed that many vehicles shown in the RC card were registered in the names of some other persons.

8. Borrowers/dealers/sub dealers were not traceable at their given address after some time. 9.

Most of the dealers were non- existent and fictitious.

Thus these banks were defrauded to the tune of ` Rs 199.89 mn. Banks may take necessary precautions while sanctioning vehicle loans and avoid recurrence of above shown lapses while dealing with vehicle loan seekers. A List of the names and addresses of such dealers received from various banks is appended for information.

31


51 Unscrupulous persons/entities

Nature of Irregularities : It has come to the notice of the Reserve Bank of India that some unscrupulous persons remove cheque leaves from the cheque books dispatched by banks through courier/speed post to their customers’ address and present either these cheques or coloured photocopies/scanned copies of these cheques and withdraw money by presenting them in a nonhome branch through clearing. In one such case, one customer of a bank noticed shortage of cheque leaves in the cheque book sent to him by his bank and gave “stop payment’ instructions to his bank in respect of these cheque leaves which was acknowledged by the bank official but was not entered in the system which enabled the fraudsters to withdraw cash from non-home branches by presenting such stolen cheque leaves. Thus the bank was defrauded to the tune of Rs` 9.27 mn. Banks may take necessary precautions while dispatching cheque books to the customers to prevent them from falling into the hands of unscrupulous persons/entities, to record “Stop Payment” instructions properly in their system, and also ensure that the instruments present for payment are genuine instruments

52 Shri Vishal Malhotra

Address : 45, II floor Pocket 4 Block-D Sector 15 Rohini New Delhi

Smt. Anjali S w/o of Shri Vishal Malhotra

Address : 45, II floor Pocket 4 Block-D Sector 15 Rohini New Delhi


A bank had sanctioned individual housing loans to the borrowers in the year 2012 amounting to a total of ` Rs 9.50 mn. Loan was disbursed after obtaining NEC and legal opinion. During investigations, it was revealed that the title deeds were not genuine.

Thus the bank was defrauded to the tune of Rs` 9.30 mn

53 1) Shri Chekuri Vijaya Rama Varma

Address : Aarutigalapadu village Kalidindi Mandal Krishna District Andhra Pradesh

2) Shri Maji Mahesh

Address : Mulalanka village Kalidindi Mandal Krishna District Andhra Pradesh


A bank had sanctioned CC limit of Rs 5.00 mn to the borrower at serial No: 1 in October

2009 for pisciculture loan and the loan was secured by EM of two properties- agricultural land measuring 14.20 acre and one house--both standing in the name of the borrower. The bank had also sanctioned a CC limit of Rs 5.00 mn to the borrower at Serial No:2 in November 2009 for pisciculture.

The loan was secured by EM of two properties-- agricultural land measuring 15.42 acre standing in the name of the borrower and one house standing in the name of Shri Chekuri Vijaya Rama Varma.

When both the accounts turned NPA and second legal opinion was taken to ascertain the enforceability of collateral security, it was revealed that Shri Varma had obtained a loan of Rs 5.00 mn from another bank in March 2010 by creating simple mortgage of the house property. The documents relating to the agricultural lands, given as security, appeared to be forged since the details mentioned in the documents submitted to the bank did not match with the records at the

Sub Registrar's office. Thus the bank was defrauded to the tune of Rs 12.15 mn in these two cases

32


54 M/s A. S. Agency

Address : 51, D.P.Nagar, Kalicharan Ghosh Road, Sinthi, Kolkata-700051

Propreitor : Arunashish Sarkar 51, D.P.Nagar, Kalicharan Ghosh Road, Sinthi, Kolkata-

700051


A Bank had sanctioned a CC limit of Rs 8.00 mn to M/s A.S.Agency on February 15, 2010 and then enhanced the limit to Rs. 10.00 mn on May 11, 2010.on the security of mortgage of property in the name of Smt.Chhaya Sarkar. The Account became NPA. After invocation of provisions of

SARFAESI Act it came to the notice of the bank that the owner of the property had expired on

October 27, 1997 and some other person, impersonating the deceased owner, had fraudulently mortgaged the property and defrauded the bank to the tune of Rs 10.60 mn.

55 M/s.Urappa Foundations

Address : AF-5, Aspen Block,Premier Enclave, No.52/5 Pillaiyar Koil Street, Padikuppam,

Chennai-600107

Proprietor: Shri.T .S.Jayachandran Plot No.6 (New No.29) C3 Ward, A Block, No.25,Anna

Nagar, 8th Street, Nagaswamy Nagar, Tirumangalam PO,Madurai-625706

Associate Companies M/s Urappa Foodpark (P) Ltd M/s Urappa Infrastructure (P) Ltd

Directors: Shri T.S. Jeyachandran BT 1, Premier Enclave, 52/5, Ebony Block, Pillayar Koil

Street, Padikuppam, Chennai -600107

Shri N. Sakthivel W/192/A2,Jaguar Brindavan, 3 rd

Avenue, Anna Nagar West

Extn, Chennai-600102

Shri A Murugesan 1/13, Athimarapatti Post, Tuticorn-5

Shri A.Senthilnathan AF-5 Aspen Block,52/5 pillaiyar Koil street, Padikuppam,

Chennai-600107


A bank had sanctioned CC limit of Rs.30.00 mn to M/s. Urappa Foundations on November 04,

2010, secured by hypothecation of stock and book debts and equitable mortgage of three properties. The bank received summons from a competent court on a suit filed against Shri. T S

Jayachandran by one Shri. Sailanathan, POA holder on behalf of 17 alleged owners of the properties mortgaged to the bank, alleging that the title deeds mortgaged by Shri Jayachandran were fake.

On investigations, subsequent to receipt of summons, the bank found that the Corporate office was not functioning at the given address and the proprietor Shri. Jayachandran was not responding to telephone calls. When the official visited his residence in Bangalore, they learnt that he had vacated the premises and some other company was functioning at the place. It was observed that the turnover in the account was not commensurate with the sanctioned limits and possibility of diversion of funds among associates was also not ruled out by the bank. Thus, the bank was defrauded to the tune of Rs. 30.00 mn

33


56 M/s MAA Kaila Devi Sheet Grah Pvt. Ltd

Address : RO: Kukhatari Pinahat, Bah, Agra. Cold Storage Address: Khasra No. 154,

Vill.Kukhatari, Tehsil Bah, Dist. Agra

Proprietor: 1 Mr Sukhram Sharma S/o Daujiram Sharma- Vill. Kukhatari, Tehsil Bah, Dist.

Agra

2 Mr Upendra Kumar Sharma S/o Sukhram Sharma,Vill. Kukhatari, Tehsil Bah,

Dist. Agra

Guarantors : 3) Mrs Munnie Devi W/o Sukhram Sharma, Vill. Kukhatari, Tehsil Bah, Dist. Agra

) Mr. Rakesh Kumar S/o Daujiram Vill. Kukhatari, Tehsil Bah, Dist. Agra

5) Mr Abhilakh S/o Daujiram Vill. Kukhatari, Tehsil Bah, Dist. Agra

6) Mrs Shashi Devi W/o Rahul- Vill. Kukhatari, Tehsil Bah, Dist. Agra


A Bank (Bank-A) had sanctioned various credit facilities to M/s MAA Kaila Devi Sheet Grah Pvt.

Ltd., to establish cold storage unit. The account became NPA on march 31, 2011. The fraud came to light when the Chief Manager of the branch, during the course of investigation, visited another bank and found that the same unit was also financed by the other bank and it was gathered that there were two separate cold storage units. It was evident from the facts of the case that the third chamber for which Bank A had granted a Term Loan of Rs 4.00 mn, for purchase of plant & machinery, had been converted into the second unit by adding one more chamber, and it was got financed by the other bank in the name of M/s Maa kaila Devi Sheet Grah, a partnership firm. The bank was thus defrauded to the tune of Rs. 23.06 mn.

57 Shri Nasa Sanjay Kumar Rao

Address : No 37, Field House Lane, Durham DHI 4 LT United Kingdom

Other

Associates :

Shri T K Raghavendra, Address: No 198,Kumbar Street, KR Puram, Bangalore -

36


A Bank disbursed the housing loan of Rs 18.00 million to Shri Nasa Sanjay Kumar Rao for purchasing house under 8 plots. EM was created by depositing title deed and rectification deed ( both registered before Sub Registrar office X ) executed by one developer (Shri T K Raghavendra) in favour of Shri Nasa Sanjay Kumar Rao. Later the account became NPA and bank initiated recovery measures. Meanwhile, through the summons in OA filed by another bank published in news paper, the bank came to know that one of the plots was also mortgaged to the other bank for availing housing loan of Rs 2.5 million. That sale deed was registered before a different Sub

Registrar’s office.

The developer in connivance with the borrower had created and registered multiple sale deeds with different SROs and availed housing loans from different banks. Shri Nasa Sanjay Kumar Rao had also executed gift deed in favour of his father Shri Vijay Shanker Rao in respect of the mortgaged property. Thus the bank has been defrauded to the tune of Rs 11.39 mn.

34


58 Shri Nadeem Faisal S/o Sadaquat Hussain

Address : Plot No. 211, Lajpat Nagar, Near Bristo Gas Agency, Moradabad


A bank had sanctioned SOD limit of Rs 11.00 mn (including take over portion of Rs 8.00 mn cash credit limit from another bank) with collateral securities Subsequent investigation revealed the following fraudulent aspects :- i) The loan was availed on the strength of nullified title deeds

ii) Valuation Reports were defective

iii) There was no definite trace of the title deeds received from the other bank, which was part of the earlier facility iv) The irrevocable power of attorney through which title deeds were executed had already been revoked before execution of the sale deed

. v) Three of the five properties were not identifiable. Thus the bank was defrauded to the tune of

Rs 11.00 mn.

59 M/s. SVYANTRA AUTOMATION P Ltd. & M/s I - 5 Interiors (P) Ltd.

Address : 2/3 Ammaiappan Street, NT Patel Road, Senthamizh Nagar, Nerkundram,

Chennai.

Proprietor: Shri. P.N.P.Lakshmanan Address BP 1 Premier Enclave Elbony Block 52/5

Pillaiyar Koil Street, Padikuppam, Chennai-600107

Shri G.Rajkumar Address S71 -Harmony Home, Hennur Main Road, Bangalore-

560084


A bank had sanctioned Cash Credit limit of Rs 55.00 mn on March 28, 2011 to each company aggregating to Rs`112.70 mn against hypothecation of stock, collaterally secured by house property. Both the accounts slipped to NPA in June 2012 due to poor operations in the account, non-submission of stock statements and non-servicing of interest. When the bank tried to take symbolic possession of the property under SARFAESI, it was found that the proprietors in collusion with the valuers had inflated the value of collateral property at the time of sanction of loan and there was a huge difference in present value of property with the valuation obtained at the time of sanction. Thus, the bank was defrauded to the tune of Rs.112.70 mn.

60 M/s. Commercial Cargo Linkers Transport Pvt. Ltd.

Address : No. 15, Allenby Road, PO Lala Rajpat Rai Sarani, Kolkata – 700 020

Proprietor: Shri Pramod Ozha

Smt. Sushma Ozha

Shri Bhaskar Ozha No. 15, Allenby Road, PO Lala Rajpat Rai Sarani, Kolkata –

700 020


A bank had sanctioned a limit of Rs. 40.00 mn on November 05, 2008 and OCC limit of Rs. 45.00 mn on February 05, 2010 to M/s. Commercial Cargo Linkers Transport Pvt. Ltd. against primary security of stock-in-trade and book debts and collaterals of EMT of two landed properties valued at

Rs 107.70 mn. The account turned NPA on May 14, 2011. In the wake of slackness in the business

(movement of bonded cargo), the company ventured into the business of trading of coal. The OCC

(ST) limit of Rs40.00 mn was released in three stages for the purpose of advance remittance to

M/s. Asian Minerals Pvt. Ltd., Singapore, a company floated by Shri. Bhaskar Ozha, one of the directors of the borrower company. The status report of the seller company, i.e. M/s. Asian Minerals

Pvt. Ltd., obtained subsequently, from M/s. D & B indicated unsatisfactory position. However,

35

Caution Notice No.3/2013-14 CO Credit Division shipment of coal did not materialize for which advance payment was made by the bank.

Further, LC issuing bank had amended the terms restricting the availability of credit and in the process, taken away the right of negotiation, which was freely available with any bank as per the terms of original LC. This amendment pointed to the intention of the borrower to divert the funds.

The ultimate buyer, M/s. Knowledge Infrastructure Pvt. Ltd., Delhi also initiated arbitration proceedings indicating non completion of import leg of the transaction. Neither the merchandise involved i.e. coal was received/imported nor the borrower company repatriated the funds. The borrower did not utilize the advance amount remitted for importing coal. Thus, the bank was defrauded to the tune of Rs. 90.40 mn by the borrowers

61 M/s Mahadeva Spinning Mill

Address : Paliyode, Anthiyoor Konam Kollode Post Thiruvananthapuram district Kerala

Proprietor: Shri V. Babu S/o Velayutham 1928, Thoppilthunduvilaveedu 6, Venanoor Town

Balramapuram Neyyatinkara Thiruvananthapuram- 695104 Kerala


A bank had sanctioned credit facilities to M/s Mahadeva Spinning Mills in cash which facilitated purchase of second hand/obsolete machinery at lesser cost and diversion of funds by the borrower.

Primary security of stocks was not available and the unit did not commence operations even though the loan was released in 2010. Thus the bank was defrauded to the tune of Rs. 9.78 mn.

62 1) M/s S .R. Industries

Address : S -711, Amman Nagar, Denkanikota Road, Next to Efforge Industries, .Hosur –

635109

2) M/s Sri Ram Agency

Proprietor: Shri K R Sriram 49/23,Saroja Nilayam, New Telephone Exchange Road, Hosur

Guarantors : 1) Shri K R Sathi s/o Late K M Radhakrishnan

2) Smt K S Veena w/o Shri K R Sriram

3) Shri K R Balaji s/o Late K M Radhakrishnan 4) Shri K R Murali s/o Late K M Radhakrishnan

D. No. 49/23 , Saroja Nilayam, Near New Telephone Exchange Road, Indra

Nagar, Hosur - 635109


M/s S R Industries and M/s Sri Ram Agency (dealing in manufacturing of school notebooks, stationeries and trading of all kinds of stationeries, notebooks, papers ,wedding cards etc. respectively ) were enjoying various credit facilities with bank A, against securities of hypothecation of goods and machineries, equitable mortgage of properties standing in name of borrower and guarantors. The borrower & one of the guarantors entered into sale agreement, in respect of mortgaged properties along with machineries hypothecated in favour of bank, to another party without the knowledge of the bank The bank was thus defrauded to the tune of Rs 27.94 million

36


63 M/s Sakshi Garments & Group accounts

Address : SCF-97, Leakwala Talab, Batala

Partners i) Shri Rajesh Kumar Nanda s/o Yash Pal B/39-140-150, Kot Kuljas Rai Batala

ii) Shri Amit kumar Nanda s/o Shri Yash Pal B/39-140-150, Kot Kuljas Rai Batala

Associate Concerns i) M/s Nanda Garments

Proprietor: Shri Pardeep Kumar Nanda B/39-140-150, Kot Kuljas Rai Batala

Address : 80, Leakwala, Talab Batala

Associate Concerns ii) M/s Dhupper Garments

Address : Circular Road, Near Hasli Bridge, Batala

Propreitors : Shri Sulakhan Lal, S/o Tej Pal Village: Kandial Tehsil : Batala Distt: Gurdaspur

Associate Concerns iii ) Smt Sudesh Kumari Pardeep Kumar & Rajesh Kumar

Address : B/39-140-150, Kot Kuljas Rai Batala

Associate Concerns iv) Shri Sanjiv Kumar

Address : House No. 56, Ward No. 32, Roshan Vihar Batala

Associate Concerns v) Shri Amit Kumar Nanda

Address : B/39-140-150, Kot Kuljas Rai Batala

Associate Concerns vi) Shri Rajesh Kumar Nanda & Anita Nanda

Address : B/39-140-150, Kot Kuljas Rai Batala


A bank had sanctioned various credit facilities, totalling to Rs 18.65 mn, to the party and its group concerns. Accounts were declared NPA on July 01, 2012 and notices under SARFAESI Act.2002 were issued. It was then found that the borrower had defrauded the bank by disposing of the stocks illegally and not routing the sales through the bank accounts. Thus the bank was defrauded to the tune of Rs. 20.79 mn.

64 a) M/s S. K. & Co.

Address : GB-65, Bharat Vihar, Lakkar Pur, Faridabad, Haryana b) M/s S R Choudhary

Address : GB-65, Bharat Vihar, Lakkar Pur, Faridabad, Haryana

Propreitors : Mrs Anju Choudhary W/o Sunil Choudhary, F-130/A, Gautam Nagar, New Delhi


A bank had sanctioned CC limit of Rs. 14.00 mn to M/s S.K. & Co, for manufacturing of garments on June 14, 2011. Also, a car loan of Rs. 1.13 mn was sanctioned to Smt. Anju Choudhary on

August 23, 2011.The facility was collaterally secured by EM of immovable property situated at 1st &

2nd floor, F-130 A, Gautam Nagar, Delhi, owned by Mrs Bansho Devi, guarantor and mother in law of Mrs Anju Chaudhary.

The bank later came to know that the party was also availing CC limit of Rs. 5.00 mn on the same security from another branch of the same bank in the name of M/S S.R. Chaudhary & Co. with the same proprietor. Stocks of the same unit were inspected by both the branches. Surprise visit made by the bank revealed that the party had closed the business and sold the machines clandestinely.

Action under SARFAESI Act was initiated by the bank. On December 28, 2012 two ladies visited the branch and informed that they had purchased a portion each from the mortgaged building way back in the year 1999 and 2001 respectively on the basis of a registered Power of Attorney followed by will in their favour. They also submitted death certificate of Smt. Bansho Devi (property owner) certifying that she had expired on August 24, 2004.

37


Scrutiny done by the bank revealed that Smt. Anju Chaudhary had obtained two PAN cards for availing facility from two different branches so that previous indebtedness may not reflect in CIBIL, while availing second facility. Second legal opinion on the properties revealed that though title deeds were original, these were deposited/ executed by impersonating the original owner. Thus the bank was defrauded to the tune of Rs 17.55 mn.

65 1. M/s. Amar Trading Co. Pvt. Ltd.

Address : Kanak Building, 1st Floor, 41,Chowringhee Road, Kolkata-700001

Partners : Shri Ujjal Kumar Das 17/1, Old Ballygunge 2nd Lane, Kolkata – 700 019

Shri. Nikhil Kumar Das Madhumita Housing Complex, 2nd Floor, Flat No. 8,

Sodepur, Kolkata – 700 130.

2) M/s. Gaur Trading Pvt. Ltd.

Address : Kanak Building, 1st Floor, 41,Chowringhee Road, Kolkata-700001

Partners : Shri Ujjal Kumar Das ,

Shri Nikhil Kumar Das

3) M/s. Ventex Vinimay Pvt. Ltd.

Partners : Shri Ujjal Kumar Das

Address: (Same as given at SL No.1)

Shri Santosh Kumar Das 4, Sankari Pukur Dhamrai, Bardhaman – 713 103.

4) M/s. Incab Commodeal pvt. Ltd.

Partners : Shri. Ujjal Kumar Das

Shri. Nikhil Kumar Das

5) M/s Orbit Commodities (P) Ltd

Directors : Shri Ujjal Kumar Das

Shri Santhosh Kumar Das


The bank had also sanctioned WCTL of Rs.100.00 mn on December 12, 2009 to M/s. Gaur

Trading Pvt. Ltd., an associate concern of M/s. Amar Trading Company (P) Ltd.,which was later, at the request of the borrower for restructuring, converted to WCTL of Rs 100.00 mn and FITL of Rs

15.00 mn of Rs 97.50 mn on November 24, 2009 to M/s Amar Trading Company (P) Ltd., and the same was converted to FITL of Rs`14.40 mn and WCTL of Rs`97.50 mn.

These accounts started showing sign of stress during FY 2011-12 due to delay in payment of interest. When the bank officials visited the company’s factory address on September 03, 2012, it was observed that the factory was closed and there was no operation. A special investigation carried out on March 07, 2013, revealed that:-

1. The borrower firms had submitted fake/fabricated balance sheet for the FY2007, 2008 and 2009 by overstating/inflating financial positions, higher paid up capital etc.

2. Companies Godown premises was owned by another group firm which fact was not revealed to the bank earlier. The borrower firms had suppressed details about the ownership of the godown, and did not disclose details of all groups companies at the time of availing loan from the bank.

3. Both the companies had submitted fake/fabricated current account statement purportedly issued by another bank

4. Borrower companies had transferred major portion of the credit facilities to third parties not

38

Caution Notice No.3/2013-14 CO Credit Division related to the business of these firms, thus diverting the bank funds for other purposes. Thus, the bank was defrauded to the tune of ` Rs .225.81 mn.

66 Shri Abhijeet Baburao Kavitkar & Smt.Poonam Kavitkar

Address : Flat No.8 Indralok Hsg Society Vadagaon Bk Sr.No.14/5 Anand Nagar Pune- 411

051


A bank had sanctioned a housing loan of Rs 6.66 mn on November 23, 2011 to the borrowers for purchase of a row house. The loan amount was credited to the account of M/s Transfab Electricals

(Prop: Shri Nissar Shikalgar) maintained at one co-operative Bank. During investigations, subsequent to the account turning irregular, the real owner of the property Shri Nissar Shikalgar informed the bank that he had not entered into any transaction of sale with any person including these borrowers. Investigations also revealed that the borrowers had submitted fake/forged KYC documents and property documents. Borrower opened an account impersonating the seller in the name of the seller’s firm and siphoned off the money post disbursement. Thus the bank was defrauded to the tune of Rs` 7.27 mn.

67 M/s Durga Construction

Address : Omkara Nilaya No.54, Kaveriyappa Layout Hoody Cross Near Sunny Layout

Partners:

Varanasi,Jinke Thimmanahalli P O Bangalore-560 030

Shri A.Narendra

Smt.C Kalpana

Smt. Asara Lavanya No.23, Sri Nilaya T C Palya Main Road Near Gas Godown

Ramamurthy Nagar Bangalore

Shri Asara Balakishan

Smt .A. Lalitha

H NO.1-1-49/22/1 Vinayak Nagar Nizamabad, A P Shri Golla Narayana Post

Lachapet Dubbak Mandal Medak District, A P


A bank had sanctioned overdraft facility of Rs 5.00 mn on May 29, 2010 to the borrower firm. This facility was collaterally secured by EM of a property standing in the name of one of the partners,

Smt. C.Kalpana, (who was the wife of managing partner Shri A.Narendra). The account turned irregular and notices sent under SARFAESI Act were either returned back or received by other persons. During investigations it came to light that the property actually belonged to another lady by the same name. This lady, (Smt. C.Kalpana w/o Shri D.Mahadeva Prasad) denied having availed any loan against the mortgage of property or having deposited the title deed with the bank.

Handwriting experts opined that signature appearing on mortgage papers and appearing on the title deed are of different persons. Smt. C.Kalpana w/o Shri A. Narendra had impersonated the original property owner and created mortgage by impersonation. Thus the bank was defrauded to the tune, of Rs 5.93 mn.

68 1)M/s Shivam Plastics

Address : C-11, Rasack Garden, Main Road, Arumbakkam, Chennai-600106

Propreitor: Mr. Manickavasaga Muthukrishnan, S/o Mr. A.K.Sankar No. 2A, 3rd Street,

Kumaran Colony, Vadapalani, Chennai:- 600026

39


Guarantor.

Mr.A.K.Shankar, No.2A, 3 rd street ,Kumaran colony, Vadapalani, Chennai 600026


. The columns showing debits and credits were not matching with the original transactions conducted in the account. The figures were unduly inflated to show higher transactions and turnover. The Audited Balance sheet and the certified book debts statements were forged. The IT returns submitted were also found to be fabricated. Thus the bank was defrauded to the tune of `

Rs 15.04 mn. A Bank had sanctioned cash credit limit of Rs. 15.00 mn to M/s Shivam Plastics on

May 25, 2012. The Risk Based Internal Audit conducted at the branch subsequently had pointed out that the borrower had submitted fabricated account statements of an account they had maintained with a previous bank

69 Shri Suleman Mohammad ,

Address : D No.39-33-14/4 Phase-1,MIG-320 Madhavadhara VUDA Layout

Vishakhapatnam 530 018, AP

Co Applicant: Shri Ahmedullah Khan, DNo:57-8-87 Gowri Nagar Kancharpalem

Vishakhapatnam 530 008, AP


A bank (Bank-A) had sanctioned a housing loan of Rs 4.81 mn to the borrower in July 2009 for purchase of two flats. When the account turned NPA, symbolic possession of the property was taken. A civil suit was also filed in DRT, Vishakapatnam for recovery of Rs 5.60 mn.

Bank noticed in the meanwhile that another bank (bank-B) had published an Auction notice for sale of flat No.402 (one of the flats financed by bank-A) claiming that their borrower one Shri Sushil

Kumar Chowdary had defaulted the loan. Bank-A obtained a second legal opinion from one of its panel advocates and the title search report indicated that the borrower, Shri Suleman Mohammad had sold both the flats financed by Bank-A on December 31, 2010 to Shri Sushil Kumar Chowdary without informing bank-A. Thus bank-A was defrauded to the tune of Rs 5.64 mn.

70 A. M/s Ramuwal Farm & Cold Store

Address : Village Ramuwal, P.O. Mehatpur Tehsil – Nakodar, District – Jalandhar

Partners 1. Shri Sarbvijay Singh

2. Smt. Rajinder Kaur w/o late Shri Harvinder Singh

3. Shri Ranvijay Singh

B. M/s Ramuwal Kissan Sewa Kendra

Address : Village Ramuwal, P.O. Mehatpur Tehsil – Nakodar, District – Jalandhar

Propreitor : Shri Ranvijay Singh

C.M/s Ramuwal Indane Service

Address : Village Malri, P.O. & Tehsil - Nakodar District – Jalandhar

Propreitor : Dr. Ramandeep Kaur w/o Shri Sarbvijay Singh

Address res: Village Ramuwal, P.O. Mehatpur Tehsil: Nakodar, Dist.: Jalandhar

40



A bank had sanctioned various credit limits to the firm mentioned at A above for cultivation of potato and construction of cold storage. An investigation based on a complaint that the lease deeds submitted were fake revealed that the lessors were self-cultivating the land or had given the land on lease to someone else and not to M/s Ramuwal Farm & Cold Store or its partners. Besides the properties mortgaged by the firm were found to have already been mortgaged to several banks or sold without the knowledge of the bank. The deeds/ documents submitted by the firm were fake/ forged/ fabricated. Thus the bank was defrauded to the tune of Rs144.57 mn.

71 1) M/s Victory Electricals Ltd.

Address : 850/64B, T. H. Road, Near Royal Enfield, Thiruvotriyur, Chennai TAMIL NADU

Plot No. 8, Sy. No. 855, Industrial Estate, Medchal - 501401, Ranga Reddy

District, AP

Directors : Shri Mahendra Kumar Vaddineni

Plot No.15, Saptagiri Apartments 13, Srinivasa Nagar Hyderabad-500 016 same as above-

Shri Manoj Vaddineni S-4, Saptagiri Apartments Srinivasa Nagar(West) Vengala

Rao Nagar Hyderabad-500 038

2. M/s. Victory Transformers & Switchgears Ltd.

Propreitor : Plot No. 8, Sy. No. 855, Industrial Estate, Medchal - 501401, Ranga Reddy

District, AP

850/64B, T. H. Road, Near Royal Enfield, Thiruvotriyur, Chennai

Address res: 1.Shri Mahendra Kumar Vaddineni

2. Shri Vaddineni Venkatappa Naidu

3.Shri Manoj Vaddineni

4.Shri Manish Chhajed

29,Adarsh Nagar, Rohtak-124 001 Haryana


Bills discounted under inland LCs: Victory Electricals and Victory Transformers &Switchgears ltd were enjoying various credit facitities with bank -A

Victory Electricals Ltd. (VEL) had submitted two inland LCs amounting to Rs.52.90 mn purported to have been issued by another Bank (Bank-B) in Kolkata, and requested Bank-A to discount bills under the LCs. On receipt of the LCs, Bank-A sent the bills drawn on M/s. Apurba Impex Pvt. Ltd. for collection through the representative of VEL. The bank discounted the said bills before receipt of confirmation letter from the LC issuing bank. When the bank did not receive the payment for the bills on the respective due dates from Bank-B, it took up the matter with Bank-B, who informed that the LCs, the letters confirming the due dates and the signatures on the LCs were forged and rejected any liability on their part in the matter.

Bills discounted under (Transferred) foreign LCs: The bank had also discounted two transferable Foreign LCs amounting to USD 5.00 mn advised by Bank-C, Kolkata on February 16,

2012, the second beneficiary of the LCs being VEL. The LCs were on the letter head of Bank-C,

Kolkata. However, the name of the Opening Bank at whose request the LCs were transferred was not disclosed. When the bank did not receive the payments for the bills drawn under LCs and contacted Bank-C Kolkata, it was revealed that the issuing bank of the original LC was one City

Commercial Bank Ltd. located in the Union of Comoros and not Bank-C at Singapore, as was wrongly interpreted by the bank while discounting the bills. City Commercial Bank Ltd, LC opening bank, refused to honour its commitment under the LC as per UCPDC guidelines.

41


M/s. Victory Transformers & Switchgears Ltd. (VTSL): Victory Transformers & Switchgears Ltd.

(VTSL) had submitted two bills for Rs. 49.65 and Rs. 49.75 drawn under LCs on M/s. Ravi Solar

Energy purported to have been issued by Bank-D Chennai with a request to discount them.

Another bill for Rs.51.22 was drawn on M/s. RM Trading Corporation P. Ltd. purported to have been issued by Bank-B, Kolkata. On receipt of the LCs, the bank discounted the above three bills without verifying through independent sources the genuineness of either the LCs or the confirmation letters received through VTSL's representative. While two of the bills were paid by one rd

M/s Vasutti Holdings.as regards the 3 bill, Bank- B, Kolkatta denied having issued or confirmed the issuance of such LC. Thus the Bank was defrauded to the tune of Rs 466.18 mn

42

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