Bombay High Court
Dr. Vishwanath Sridhar Prabhu vs The State Of Maharashtra on 5 May, 2021
Bench: Prakash Deu Naik
Ethape 1 BAst-4957-2020
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
BAIL APPLICATION (St.) NO. 4957 OF 2020
WITH
INTERIM APPLICATION NO.26 OF 2021
Dr. Vishwanatha Shridhar Prabhu .. Applicant
Vs.
The State Of Maharashtra .. Respondent
-----------------------------------------------------------------------------
Mr.Ashok Mundargi, Senior Counsel a/w. Mr. Mithilesh
Mishra i/b. Law Competere Consultus, Advocate for Applicant.
Smt. P.P. Shinde, A.P.P. for the State-Respondent.
-----------------------------------------------------------------------------
CORAM : PRAKASH D. NAIK, J.
DATE OF RESERVED : 25th MARCH, 2021
DATE FO PRONOUNCED : 05TH MAY, 2021
PC.
1. The applicant had preferred this application for bail
under Section 439 of Cr.P.C. in connection with C.R. No. 375
of 2019 registered with Bhandup Police Station, Mumbai for
the offence punishable under Sections 201, 406, 409, 420,
465, 467, 471 and 477-A read with 120-B of Indian Penal
Code (for short "IPC") and Section 46(1), 47(A) of Banking
Regulation Act, 1949. The investigation was then to EOW
banking (ii) vide C.R. No. 86 of 2019. The applicant was
arrested on 12.03.2020.
2. The brief facts of prosecution case are as under:
(a) The FIR was lodged by Jasbir Singh Matta, Manager
of Recovery Cell, Punjab and Maharashtra Co-operative
Ethape 2 BAst-4957-2020
Bank Limited (PMC Bank) being authorised by the
Administrator appointed by Reserve Bank of India (RBI).
(b) The PMC Bank is registered under the provisions of
Maharashtra Co-operative Societies Act, 1960. The bank
was granted license to carry on banking business by RBI
in 1984. The bank received scheduled status in 2000 and
became Multi-State Co-operative Bank in 2004. The
conduct of banking business by the PMC Bank is subject
to the provisions of Banking Regulation Act, 1949 and the
directions/ guidelines issued by RBI.
(c) It was learnt from the records that, the Managing
Director of the bank Mr.Joy Thomas and other
functionaries including Board of Directors executives of
the bank and promoter of HDIL have connived to commit
illegal acts/offences. Some of the loans mainly belonging
to HDIL group companies were intentionally given to cause
wrongful gain to HDIL and its promoters, at the cost of
wrongful loss to the bank and its depositors. The records
were fabricated/falsified to conceal irregularities. Wrongful
acts of the management/bank have resulted in risk of
depositors losing their money.
(d) The bank in their regulatory reporting had
understated the actual exposure of certain bad loan
accounts/ which in the normal course should have been
Ethape 3 BAst-4957-2020
disclosed and classified as Non-performing Assets (NPA's)
as per RBI norms. The bank was reporting to RBI as
suppressed information of actual loans accounts with
huge exposure and deliberately replaced them with
fictitious accounts. The borrowers in this loan accounts
and the functionaries of the bank, were suspected
beneficiaries.
(e) In the advances master indent for the year ended
31st March, 2018 submitted to RBI, the bank had replaced
44 loan accounts during individual balance outstanding
was higher with 21049 fictitious loan account, whose
individual outstanding was comparatively lower.
(f) Preliminary assessment by interim RBI inspection
conducted by RBI revealed that, 10 out of 44 borrowers
accounts of HDIL group companies revealed that balance
outstanding on 31st March, 2019 was Rs.4355.46 Crores
and the balance outstanding as on 31st August, 2019 was
Rs.4635.62 Crores. The actual financial position of the
bank was camouflaged and the bank dis-actively shows its
rosy pictures of its financial parameters, thus encouraging
more depositors to open account with bank to their
detriment and also the fabrication /falsification affected
the depositor's interest adversely.
Ethape 4 BAst-4957-2020
(g) The perpetrators of the fraud viz. Manager, other
functionaries, Board of Directors of HDIL and PMC Bank
connived with each other. In furtherance of criminal
conspiracy facilitated huge lending to HDIL group
companies and other entities which were concealed from
RBI and depositors to dupe the regulators, depositors and
others. The management and persons responsible for
conduct of the business of the bank, are liable to be
prosecuted for conspiracy, criminal breach of trust,
cheating, forgery, falsification of records etc.
(h) In terms of provisions of Banking Regulation Act,
1949 every Chairman, Managing Director, Director,
Auditor, Manager and any other employee of the bank
were liable to be prosecuted for preparing incorrect
documents with intent to cause damage to the interest of
depositors.
(i) During the period from 2008 to 2019 the accused
committed act of criminal conspiracy, cheating, criminal
breach of trust, forgery and falsification of records. Mr. Joy
Thomas, Managing Director of PMC Bank alongwith
Waryam Singh and other Board of Directors of PMC Bank,
other bank officials and Mr. Sarang Wadhwan, Rakesh
Wadhwan, Kuldeep Singh Wadhwan and other person of
HDIL, executives of Somerset Constructions Pvt. Ltd.,
Serveall Construction Pvt. Ltd., Sapphire Land Developer
Ethape 5 BAst-4957-2020
Pvt Ltd. Emeralds Realtors Pvt. Ltd. Awas Developers and
Constructions Pvt. Ltd., Prithvi Realtors and Hoteld Pvt.
Ltd and other executives affiliated bank and related person
caused wrongful loss prima-facie to the tune of Rs.4355
Crores to PMC Bank.
(j) About 15 persons were arrested. The arrested
accused includes Rakeshkumar Wadhwan, Sarang
Wadhwan (Executives HDIL) Joy Thomas, MD, PMC Bank,
Waryam Singh Chairman PMC Bank. Surjeetsingh Arora,
Director of PMC Bank, Ketan Lakadawalla (Auditor PMC
Bank) Jayesh Singhani, Auditor PMC Bank, Anita Kirdat,
Auditor PMC Bank, Rajneet Singh, Director PMC Bank,
Mukti Bavisi, Director PMC Bank, Dr. Trupti Suhas Bane,
Director PMC Bank, Jasvindar Singh Banwait, Director of
PMC Bank, Vishwanath Prabhu, Shripad Jere (Valuers of
PMC Bank), Surjeet Singh Narang, Brij Bhushan Handa,
Omprakash Utpal, Director of PMC Bank.
(k) Statement of witnesses were recorded. Charge-
sheets were filed.
3. The applicant preferred an application for bail before the
Sessions Court which was rejected by order dated 30.04.2020.
Applicant thereafter preferred an application for bail before the
Additional Chief Metropolitan Magistrate. The said application
was rejected by order dated 19.06.2020. The applicant
Ethape 6 BAst-4957-2020
thereafter preferred another application for bail before the
Sessions Court which was rejected on 25.09.2020.
4. Learned Senior Advocate Mr. Ashok P. Mundargi urged as
follows:-
(i) The applicant is one of the Director of M/s.Yardi Prabhu
Consultants and Valuers Pvt. Ltd. The said company was
acting as consultants and property valuers for their
clients. The applicant being a Chartered Accountant was
assigned the job of secretarial practice, since he was not
qualified for valuation of properties. He is not qualified
civil/mechanical engineer. Other Directors were assigned
job of conducting valuation of property. The applicant
was not assigned work of valuation of immovable
property. At no point of time he has carried out valuation
of any immovable property of Punjab and Maharashtra
Co-operative Bank (for short "PMC") or its borrowers. He
has not signed any valuation report.
(ii) Even if the allegation of prosecution are accepted, that is,
false valuation reports were issued by company in favour
of main accused to conceal their illegalities or to show
credibility of PMC Bank, it cannot be said that the
applicant has conspired with main accused for
defrauding PMC Bank. There is no evidence to show that
the applicant has received any share from defrauded
amount.
Ethape 7 BAst-4957-2020
(iii) The allegation against the applicants are vague. It is
alleged that the company of applicant was entrusted with
task of valuation of properties of PMC Bank and its
borrowers and it has revalued the property of PMC Bank
and over valued the properties.
(iv) One of the allegation is that flat No.603 situated at
Chembur was valued at Rs.69.02 lakhs on 15.10.2011
and it was revalued on 18.09.2017 showing value of
Rs.134 lakhs and further revalued for Rs.163 lakhs. The
valuation of 2011 in respect to the said flat was based on
48% completion. The valuation of 2017 was based on full
completion but still on lower end due to demonetization
effect. The valuation of 2019 was based on market price
nearly two years after previous valuation and considering
parking and since flat was well equipped and maintained
the value was substantially increased. The Investigating
officer does not understand the technicality of the
valuation report.
(v) Mrs. Jyotsna Srivastav from PMC Bank had enquired
about value of property over e-mail dated 31.07.2018
with Mr. Jeevan Yerulkar to know the value of property
and did not ask for revaluation report and hence Value of
Rs.163 lakhs was informed to the Bank as per valuation
report dated 28.06.2018 but signed copy of the report
was not provided in 2018 and latter based on the request
Ethape 8 BAst-4957-2020
through e-mail of May 2019, the report was sent on
12.06.2019 with a submission acknowledgement of
July/August 2018. It is not back dated report. The
valuation of 2018 was submitted in 2019.
(vi) Co-accused Shripad Jere has received desktop valuation
report of the property in question at Rs. 7.76 Crores. The
applicant has no role in issuing desktop valuation report.
It was an unsigned and unstamped draft report.
(vii) The desktop valuation report cannot be considered as
valuation report since it is merely a draft forwarded on e-
mail dated 03.04.2019 to PMC Bank for their
confirmation. The said report was neither finalised nor
signed by any authorized signatory of Yardi Prabhu
Consultants & Valuers Pvt. Ltd. and it was not submitted
to PMC Bank.
(viii) It is not alleged that the applicant or its company is the
beneficiary of the fraud committed by co-accused.
(ix) Section 120-B cannot be invoked against the applicant.
There is no evidence to substantiate the charge under
Sections 406, 409 of IPC against the applicant. Sections
467, 468 are not attracted against the applicant.
(x) The applicant is Chartered Accountant and Financial
Analyst of the balance sheet and intangible assets, while
Ethape 9 BAst-4957-2020
valuation reports were created by Jeevan Yerulkar who is
property valuer for tangible assets.
(xi) Valuation was carried out by M/s. Suvishwa Valuers &
Consultants Pvt. Ltd. which is an associate concern and
of which Mr.Jeevan Yerulkar was Director from
22.10.2007 and based on valuation conducted by him,
M/s.Yardi Prabhu Consultants issued valuation report.
The applicant is not Director of PMC Bank. He has no
connection with the Bank. He has not given valuation
report. He is not responsible for any act committed by the
employee of his company.
(xii) FIR is silent on the role of applicant. The applicant
cannot be held responsible for the valuation submitted to
PMC Bank.
(xiii) The valuation was based on fair market value. The
valuation reports are required to be contradicted by
authorized person. There is no such material on record to
show that the valuation reports are incorrect. The
Investigating Agency has drawn adverse inference without
any basis.
(xiv) Learned counsel for the applicant pointed out the
statements of Smt. Manjeet Kaur recorded on 12.02.2020
and 20.02.2020, statement of Jeevan Yerulkar dated
23.01.2020 and statement of Rajesh Mehta recorded on
Ethape 10 BAst-4957-2020
03.06.2020. It is submitted that statements of these
witnesses are not sufficient to substantiate the case of
the prosecution against the applicant. The applicant
cannot be said to be conspired with the main accused.
The case of the prosecution itself is that the report was
submitted subsequently after the loan was sanctioned.
(xv) The applicant is in custody for a period of about one year.
Further detention of the applicant is not necessary.
There is no evidence against the applicant as beneficiary
of transactions. He is not likely to abscond. Charge-
sheet is filed. Reliance is placed judgment of Supreme
Court in the case of P. Chidambaram Vs. Directorate of
Enforcement AIR (2020) SC 1699.
(xvi) Learned counsel relied upon the documents forming part
of charge-sheet relating to the valuation reports and
contended that the applicant is not signatory to the said
documents. The statement of Kamal Banwait mentions
that on allocation of any assignment valuation of
property, the officials of M/s. Yardi Prabhu Consultants
and Valuers Pvt. Ltd. (point of contact for PMC Bank) was
Mr.Jeevan Yerulkar and after him Mr. Shripad Jere
became the point of contact. They would discus the
valuation with concerned officials of PMC Bank before
finalization and only if the valuations are in line with the
loan proposal, the final valuation reports were submitted.
Ethape 11 BAst-4957-2020
The witness has referred to transaction of M/s. Sapphire
Land and Development Pvt. Ltd. which shows he has
spoken to Jeevan Yerulkar from M/s.Yardi Prabhu
Consultants for revision in the valuation of property and
report dated 22.03.2018 depicting value of Rs.3 Crores
which they received. It is submitted that the statement of
said witness indicates that point of contact was
Mr.Jeevan Yerulkar who is witness in this case and
Shripad Jere who is implicated as an accused in this
case. The statement of witness does not substantiate the
charge that the applicant has with co-accused.
5. Learned APP Ms. Prajakta Shinde submitted as follows:-
(i) On 20.09.2019 application was submitted by
Sukhbir Singh Mehta, Manager, Recovery Cell of PMC
Bank against Joy Thomas and other officials of PMC
Bank alongwith Directors of Housing Development
Infrastructure Ltd. (for short "HDIL") and its group
companies causing loss of Rs.4355 Crores to PMC Bank.
FIR was registered with Bhandup Police Station and the
investigation was transferred to Economic Offences Wing
(for short "EOW").
(ii) Three charge-sheets are filed against the accused.
The applicant (accused No.14) was the Director and
owner of M/s.Yardi Prabhu Consultants and Valuers Pvt.
Ethape 12 BAst-4957-2020
Ltd. The applicant in connivance with Managing Director
Joy Thomas of PMC Bank willfully raised the actual value
of properties mortgaged by various borrowers. The
borrowers procured desired credit facility from PMC
Bank. The actual value of property was less compared to
its market value. Such act of concealment/suppression
of fact by applicant and furnishing false value of such
mortgaged property caused contributory wrongful loss to
PMC Bank as owner could not realize actual cost of
mortgaged properties when the credit account of
borrowers became Non Performing Assets (NPA).
(iii) The applicant in connivance with main accused Joy
Thomas of PMC Bank created false valuation of property
owned by PMC Bank. This inability of accused Joy
Thomas to patch the balance sheet of PMC Bank and to
provide substantial capital adequacy ratio as desired by
banking controlling authority i.e. RBI. Due to false
valuation reports in respect of the properties of PMC
Bank, accused Joy Thomas concealed bona-fide financial
status of PMC Bank from RBI.
(iv) Reliance is placed on the statements of Smt.Manjeet
Kaur Ishwar Singh, Jeevan Baliram Yerulkar, Rajesh
Madhubhai Mehta, Sameer Abhay Paranjape and extract
of financial audit by Grant Thortan.
Ethape 13 BAst-4957-2020
(v) Learned APP relied upon contents of affidavit-in-
reply filed by the Investigating Officer.
(vi) The valuations submitted by M/s.Yardi Prabhu were
inadequate to form required reserve and arrive at the
desired capital adequacy, Mr. Joy Thomas asked the
applicant to increase the value of certain properties i.e.
Carnac Bunder, Bhadup Dreams Mall and the premises
which the bank had acquired through merger of banks
like Kolhapur Janta Sahakari Bank, Chetna Sahakari
Bank. The applicant accordingly preferred revised
valuation report with inflated value and submitted to
PMC Bank.
(vii) During investigation it was revealed that there was
nexus between Managing Director Joy Thomas and
Vishwanath Prabhu (Applicant). It establishes the mala-
fide intention of Joy Thomas who utilized false and
exuberated valuation of PMC Bank's owned properties
and suppressed bona-fide financial position of PMC Bank
from the scanner of banking regulation authority i.e. RBI.
During the course of investigation, one of the employees
of PMC Bank and erstwhile secretary Joy Thomas i.e. Ms.
Kamaljit Banwait was examined in respect of role of
accused Vishwanath Prabhu and Shripad Jere, Ms.
Kamal Banwait, Chief Manager and Secretary to Joy
Ethape 14 BAst-4957-2020
Thomas elaborated complicity of Vishwanath Prabhu and
Shripad Jere in this case.
(viii) Learned APP relied upon the following decisions of
the Supreme Court:-
(a) YS Jagan Mohan Reddy Vs. CBI (2013) 7 SCC 439.
(b) Serious Fraud Investigation Office Vs. Nitin Johari
and Anr. (2019) 9 SCC page 165.
6. Learned counsel for intervenor supported the
submissions of learned APP. It is submitted that the
applicant has played vital role in causing loss to the bank.
Several depositors were put to loss. The applicant is Director
of M/s.Yardi Prabhu Consultants and Valuers Pvt. Ltd.
There were notified valuers of PMC Bank. It was his duty to
impartially valuate the properties and provide reports. The
applicant provided false valuation reports of the property.
7. PMC Bank is the multi-state Co-operative Bank. HDIL, a
group of companies, was the largest borrower of PMC Bank.
According to prosecution, officials of PMC Bank including
Joy Thomas, Managing Director, Mr. Wariyan Singh,
Directors and the main accused Sarang Wadhawan and
Rakesh Wadhawan have played role in causing loss to the
bank.
Ethape 15 BAst-4957-2020
8. The applicant is Director of M/s.Yardi Prabhu
Consultants and Valuers Pvt. Ltd. It is the case of the
prosecution that during the course of investigation, it was
revealed that on 29.10.2016 and 01.11.2016 request was
received from Chairman of HDIL Mr. Rakeshkumar
Wadhawan through Managing Director Mr.Joy Thomas
(Accused No.3) for remittance of Rs.10 Crores. Thereafter
PMC Bank had remitted an amount of Rs.10 Crores on
29.10.2016 and Rs. 5 Crores on 01.11.2016 to the account
of M/s. Sapphire Land and Development Pvt. Ltd. Having
their account in Kotak Mahindra Bank, this amount was
remitted from advance account i.e. Sundry receivable
account of the bank without taking any collateral security
from M/s. HDIL and it remained overdue for a long period.
As the Sundry account has to be reconciled and reported to
RBI with reason for long pending advances, the amount was
to be reversed. The said amount was pending for long time.
The PMC Bank decided to purchase the premises of M/s.
Sapphire Land and Development Pvt. Ltd. at Hanuman
Nagar, Akurli Road, Kandivali (E). Mumbai to secure up the
loan account of M/s. Sapphire Land and Development Pvt.
Ltd. This decision was taken after discussion between Mr.
Waryam Singh and Mr. Joy Thomas at Central Office,
Bhandup in the month of February 2018. The property was
in possession of PMC Bank on rented basis since the year
1996-97. Accordingly, sale agreement dated 31.03.2018
Ethape 16 BAst-4957-2020
between PMC Bank and M/s. Sapphire Land Development
Pvt. Ltd. was registered for sum of Rs.10,10,11,000/-. The
sale agreement was fixed by Joy Thomas to settle the loan
amount given to M/s. Sapphire Land Development Pvt. Ltd.
The investigation revealed that as instructed by Joy Thomas,
M/s. Yardi Prabhu Consultants and Valuers Pvt. Ltd. were
deputed for valuation of the above property. Accordingly,
PMC Bank received valuation report from M/s. Yardi Prabhu
Consultants and Valuers Pvt. Ltd. in which fair market
valuation was Rs.3 Crores. As the valuation was less than
the amount given to M/s.Sapphire Land Development Pvt.
Ltd. The transaction of purchase of property was withheld.
During the statutory audit for 2017-18 after verifying the
'files of premises purchased' the partner of Lakdawala and
Company pointed lower valuation of the premises purchased
by the PMC bank from M/s.Sapphire Land Development Pvt.
Ltd. The said company was owning the sum of Rs.10 Crores,
however the valuation of property was Rs.3 Crores. Mr. Joy
Thomas instructed to take fresh valuation of the property
from M/s.Yardi Prabhu Consultants with the value of
property as Rs.10,10,11,000/-. Mr. Shripad Jere from M/s.
Yardi Prabhu Consultants and Valuers Pvt. Ltd. was
contacted for revision in the valuation of property for
justification of purchase cost in line with settlement of
amount owed by M/s. Sapphire Land Development Pvt. Ltd.,
for which sale agreement was registered on 31.03.2018. As
Ethape 17 BAst-4957-2020
requested by Mr. Shripad Jere, the applicant forwarded copy
of the registered agreement dated 31.03.2018 to him and
PMC Bank received Revised Desktop Valuation Report dated
04.03.2019 from M/s.Yardi Prabhu Consultants and Valuers
Pvt. Ltd., wherein fair market value was inflated from
Rs.3.00 Crores to Rs.7.76 Crores.
9. The investigation revealed that in July 2018 Mr. Tejander
Singh Bal approached PMC Bank and requested for single
mortgage loan of Rs.130 lakhs of his property at 6th floor, flat
No.603 Bholenath Residency, Village Wadhavli, Chembur Tq.
Kurla, Mumbai which was already mortgaged with PMC
Bank. He applied for mortgage loan, instead of two loans i.e.
cash credit limit and Housing loan so that the loan
repayment would be easier and faster. On his request of
Smt.Manjeet Kaur discussed the loan proposal with Mr. Joy
Thomas and it was decided to grant him single mortgage
loan of Rs.130 lakhs on his property already mortgaged with
PMC Bank. As per bank policy, for granting loan of Rs.130
lakhs, value of property was required to be mortgaged was
Rs.163 lakhs.
10. Tejinder Singh Bal had availed housing loan of Rs.41
lakhs on which outstanding amount was Rs.30.29 lakhs on
14.08.2018 and cash credit facility of Rs.70 lakhs on
Ethape 18 BAst-4957-2020
28.09.2017 and outstanding amount was Rs.67.57 lakhs.
Thus, the total loan was Rs.111.00 lakhs and outstanding
amount was 97.86 lakhs. As per the banking norms, while
granting loan amount maximum 80% of the property value
can be considered under the power of Managing Director.
Mr.Tejinder Singh Bal required additionally loan of Rs.32
lakhs for which security of Rs.163 lakhs was required. Smt.
Manjeet Kaur requested Mr. Jeevan Yerulkar of M/s.Yardi
Prabhu Consultants and Valuers Pvt. Ltd. to provide the
value of the properties and said request was made through
e-mail dated 01.08.2018. Considering tentative value of
property as Rs.162.60, the fresh mortgage loan proposal of
Rs.130 lakhs was sanctioned to Mr.Tejinder Bal. Valuation
report was not received on 14.08.2018 but the loan amount
was sanctioned. E-mail was sent by official of PMC Bank on
16.05.2019 to M/s.Yardi Prabhu Consultants calling for
valuation report. The valuation report of property of Tejinder
Singh Bal from M/s.Yardi Prabhu Consultants was
forwarded to PMC Bank on 12.06.2019. The report was
received on 12.06.2019 as per desired value of Rs.162.60
lakhs as quoted PMC Bank official with invoice
No.822/2019-20 dated 12.06.2019 for Rs.2360.00.
11. According to the prosecution Vishwanath Prabhu
(applicant) and co-accused Shripad Jere have prepared and
certified the adulterated valuation reports for PMC Bank as
Ethape 19 BAst-4957-2020
true and authentic. Both have not verified the bona-fide a
value/cost of the properties of PMC Bank and other
mortgaged properties of borrowers of bank by following due
diligence.
12. During investigation it was revealed that the applicant
was in contact with Mr. Joy Thomas for valuation of property
of PMC Bank, Mr. Joy Thomas asked him to get revaluation
of properties owned by PMC Bank. When the draft valuation
reports were submitted to Mr.Joy Thomas, he called the
applicant for discussion to finalize the valuation reports.
The applicant went to Central office of PMC Bank at
Bhandup for discussion on the valuation with Mr.Joy
Thomas. The valuations submitted were inadequate to form
the required reserve and arrive at the desired capital
adequacy, Mr.Joy Thomas asked the applicant to increase
the value of certain properties i.e. Carnac Bunder, Bhandup
DREAMS MALL and the premises which the bank had
acquired through merger of banks like Kolhapur Janta
Sahakari Bank Ltd., Chetna Shakara Bank. M/s.Yardi
Prabhu Consultants and Valuers Pvt. Ltd. are at the panel of
PMC Bank since 2004-05. Major assignments pertaining to
big borrowers were awarded to M/s.Yardi Prabhu
Consultants was assigned with the Fixed Assets Audit of the
bank. Out of all the above valuers, 60% of the valuation job
was allotted to M/s.Yardi Prabhu Consultants and according
Ethape 20 BAst-4957-2020
to prosecution in return, they were provided valuation report
with adjustable and desirable amount of property in
question. During investigation, it was revealed that the
accused were deputed at the behest of masterminds of the
fraud i.e. Mr.Joy Thomas and M/s.Warayam Singh,
Chairman of PMC Bank.
13. The case of the prosecution is that the applicant is one of
the main Director of M/s.Yardi Prabhu Consultants and
Valuers Pvt. Ltd. He was instrumental in conducting
valuation of various properties of borrowers and mostly HDIL
and their associate companies who availed overdraft facilities
from PMC Bank by furnishing less valued properties. The
applicant has directly contributed in furthering and
facilitating the conspiracy hatched by accused. If the
accused were not involved in the mala-fide act of overvaluing
less valued properties of borrower, other accused would not
have sanctioned and disbursed the loan to the borrowers
causing loss to the bank. The actual value of several
mortgaged properties with PMC Bank is too less and the
bank is not any in a position to liquidate such less valued
properties.
14. The applicant has tried to shift the onus of his acts on his
employee Jeevan Yerulkar who was working with M/s.Yardi
Ethape 21 BAst-4957-2020
Prabhu Consultants and Valuers Pvt. Ltd. The statement of
Jeevan Yerulkar has been recorded. He has stated that he
was working with M/s.Yardi Prabhu Consultants and
Valuers Pvt. Ltd. from 2007 to February 2019. Thereafter he
resigned. During his tenure with M/s.Yardi Prabhu
Consultants, he was contact point for the valuers. PMC is
major client of M/s.Yardi Prabhu Consultants and Valuers.
All the proposal from PMC Bank for valuations were issued
to Yardi Prabhu Consultants and Valuers Pvt. Ltd. through
him. After submissions of 'valuation report' if any correction
or changes were required. He used to get call from Smt.
Banwait and he would convey the message to applicant.
Applicant was authorized to make alteration in report and
make it final. Statement of Kamal Banwait was recorded
under Section 161 and 164 of Cr.P.C. She has established
the role of the applicant.
15. During the course of investigation, it was revealed that
the appointment letter to Shripad Jere was issued under the
signature of applicant. Letter establishes understanding
between both the accused for the purpose of preparing
valuation of properties and signing the valuation reports. It
is alleged that the report signed by co-accused Shripad Jere
are consented and agreed upon by the applicant. The reports
prepared by the applicant with the assistance of the co-
accused does not require mandatorily to be signed or
Ethape 22 BAst-4957-2020
certified by applicant. There existed consensual agreement
between PMC Bank and the applicant whereby allegedly on
demand, he used to send valuation report to PMC Bank.
16. Statements of several witnesses were recorded. It was
revealed that M/s.Yardi Prabhu Consultants were
functioning as major valuers of PMC Bank. Mr. Joy Thomas
availed services of M/s.Yardi Prabhu Consultants for several
years. It was revealed that services of valuation of the firm
were utilized in obtaining desired valuation reports of
properties provided by borrowers and mainly HDIL to avail
credit/loan facilities from PMC Bank. The applicant was in
proximity with Joy Thomas.
17. Statement of Rajesh Madhubhai Mehta, an independent
valuer, was recorded. He has stated that there were
irregularities in the valuation report of M/s.Yardi Prabhu
Consultants. The valuation given by them is inflated and
exaggerated and not as per Annual Statement Rates
published by the Government. Mr. Mehta has given findings
about irregularities in respect to the valuation reports.
18. During the course of investigation statement of Ms.
Jyotsna Srivastav was recorded and she was shown e-mail
sent by her on 16.05.2019 to M/s.Yardi Prabhu Consultants
calling for the valuation report of one customer of PMC Bank
Ethape 23 BAst-4957-2020
Mr. Tejinder Sing Bal. The e-mail indicates that the request
was made to provide the valuation report July/August 2018
with the value approximately at Rs.162.20 lakhs. The earlier
valuation report is enclosed for perusal. Smt.Jyotsna
Srivastav sent email to Yardi Prabhu Valuers on instructions
of Smt. Manjeet Kaur to process the proposal for sanction of
loan to Mr.Tejinder Singh Bal considering the value of
property at Rs.162.20 Crores approximately. In June 2018,
Mr.Tejinder Singh met Smt.Manjeet Kaur Ishwar Singh and
requested for single mortgage loan of Rs.1.30 Crores instead
of two loans. Statement of Kamal Banwait mentions that
PMC Bank had 20 valuers for valuation of properties.
19. Ms.Kamal Banwait in her statement dated 17.02.2020
has stated that M/s. Yardi Prabhu Consultants were
handling 60% of the valuation of the PMC Bank. Major
assignments pertaining to big borrowers were awarded to
M/s. Yardi Prabhu Consultants and Valuers Pvt. Ltd. Since
2008 as per instructions of Joy Thomas and Ms. Manjeet
Kaur all the valuations for purchase of properties were done
by M/s.Yardi Prabhu Consultants and Valuers Pvt. Ltd. All
the valuations for properties mortgaged by M/s. HDIL was
done by M/s. Yardi Prabhu Consultants and Valuers Pvt.
Ltd. She also stated that the bank had carried out
revaluation of its owned premises in 2012 & 15 for patching
up the balance sheet of the bank which was again done by
Ethape 24 BAst-4957-2020
M/s.Yardi Prabhu Consultants and Valuers Pvt. Ltd. To give
a desired valuation of properties for arriving at profit goal by
PMC Bank Mr. Joy Thomas had a meeting in his cabin in
PMC Bank in the month of April 2012 with applicant and he
was asked to value the premises of DREAMS MALL at
enhanced rate although, the Mall was not operational. M/s.
Yardi Prabhu Consultants are on the panel PMC Bank since
2004-05. There were many other valuers on the panel of
PMC Bank, however, major assignments pertaining to big
borrowers were awarded to M/s.Yardi Prabhu Consultants
and Valuers Pvt. Ltd. Smt. Manjeet Kaur in her statement
dated 12.02.2020 has stated that Joy Thomas had told her
to convey M/s. Yardi Prabhu Valuers to prepare valuation
report of properties of Tejinder Sing Bal, 17% more than its
actual value. She called Mr. Jeevan Yerulkar and asked him
to submit valuation of property. She also told Jyotsna
Srivastav to forward the mail to that effect to M/s. Yardi
Prabhu Valuers. On instructions from Joy Thomas loan was
disbursed to Tejinder Singh Bal before receipt of valuation
report. Subsequently, Joy Thomas requested to send e-mail
and call for the back dated report of June 2018 for
Rs.163.00 lakhs was received. Her subsequent statement
dated 20.02.2020 shows that the applicant was in contact
with Mr.Joy Thomas for valuation of property of PMC Bank
and she was asked by Mr.Joy Thomas to get revaluation of
properties owned by PMC Bank from Yardi Prabhu
Ethape 25 BAst-4957-2020
Consultants. When the draft valuation reports were
submitted, Mr. Thomas asked her to call the applicant for
discussion to finalize the valuation report. Accordingly, she
contacted the applicant and called him to central office at
Bhandup for discussion on the valuation with Mr.Joy
Thomas. As the valuations submitted were inadequate to
form required reserve and arrive at the desired capital
adequacy, Mr. Thomas asked the applicant to increase the
value of certain properties i.e. Carnac Bunder, Bhandup
Dreams Mall and premises which had acquired through
merger of banks like Kolhapur Janta Sahakari Bank,
Chetana Shakara Bank. Statement of Smt.Jyotsna Srivastav
was recorded on 15.02.2020 shows that the Manjeetsing
Kaur had requested to Mr.Jeevan Yerulkar to provide the
latest value of properties. She proceeded with fresh
mortgage loan on instructions from Manjeet Kaur. The
contention of the applicant is however that neither Shripad
Jere nor Jeevan Yerulkar were responsible for the alleged
acts. The contention deserves to be rejected. The applicant
has been assigned actual role in submitting the tainted
reports as stated above. The statement of Rajesh Mehta was
recorded on 03.06.2020. He has stated that he was shown
valuation reports prepared by M/s.Yardi Prabhu
Consultants and Valuers Pvt. Ltd. He has pointed out
irregularities and has stated that the valuation report does
not reflect ready reckoner rates published by Government,
Ethape 26 BAst-4957-2020
depreciation for the period since construction, sales
instances in the close vicinity and area clarification for
conversation of carpet area into builtup area. Several other
anomalies were referred by him in his statement.
20. The evidence on record clearly indicates that the
applicant was acting in connivance with Joy Thomas, the
then Managing Director of PMC Bank and the prime accused
in this case. The nexus between Mr. Joy Thomas and the
applicant is revealed. It establishes mala fide intention of Joy
Thomas who utilized value of PMC Bank properties from the
scanner authority i.e. RBI, merely on the ground that the
Jeevan Yerulkar or Mr. Shripad Jere was contacted by the
applicant, cannot be absolved from his liabilities. Thus,
there is voluminous evidence showing involvement of the
applicant in the offences. The judgment relied by applicant is
not applicable to the facts of this case.
21. Considering the aforesaid circumstances and the nature
of evidence collected during the investigation as reflected in
the charge-sheet, statements which contained the statement
of witnesses connivance of applicant is writ large. Hence no
case for grant of bail is made out.
ORDER
(i) Bail Application (St.) No.4957 of 2020 is rejected.
(ii) In the event the trial is not concluded within a
Ethape 27 BAst-4957-2020
period of one year, the applicant will be at liberty to
file fresh application for bail.
(iii) Application stands disposed of.
(PRAKASH D. NAIK J.)
