Former PNB executive director discharged in multi-crore fraud case

Mumbai, Sep 9 (PTI) A special court here has discharged a former executive director of the Punjab National Bank in the multi-crore fraud at the bank, saying the mere fact that it is a serious economic offence cannot be a ground to "drag everyone" into the case.

Absconding businessmen Nirav Modi and his uncle Mehul Choksi are the prime accused in the alleged scam, being probed by both the CBI and Enforcement Directorate (ED).

Special CBI judge A V Gujarathi on Monday allowed the discharge plea of K V Brahmaji Rao.

In the reasoned order available on Tuesday, the court said the CBI charge-sheet failed to disclose the role played by the accused which would constitute the offences for criminal conspiracy and cheating, among others.

The prosecution failed to establish a prima facie case against Rao, it added.

"The mere fact that the offence is a serious economic offence and a huge amount, thousands of crores of rupees, is involved in the offence is no ground to drag everyone into the prosecution, even not remotely connected with the crime," the court said.

The allegations against Rao were "vague and unsupported by material evidence", the judge said.

"Permitting the proceedings to continue against the accused would serve no useful purpose and would subject him to unwarranted harassment, contrary to the constitutional guarantee of fair procedure," the court ruled.

The prosecution's case against Rao centered on alleged administrative inaction and failure to implement crucial directives from the Reserve Bank of India (RBI).

According to the CBI, Rao was aware of RBI caution notices regarding similar SWIFT-related frauds at other banks but failed to take timely action.

The court noted that Rao's role as an executive director was focused on policy framing and implementation, not the day-to-day operations of individual branches.

It pointed out that more than 7,000 branches were under his control.

Under these circumstances, it is humanly impossible to keep eye on the transactions taking place in each and every branch, the court said.

The special judge also noted that Rao had not obtained any illegal gratification out of the said fraudulent transactions.

The CBI filed a case in 2018 following a complaint by PNB about alleged large-scale fraud involving the fraudulent issuance of 1,214 Letters of Undertaking (LOUs) between 2011 and 2017, amounting to approximately USD 3.73 billion. Both Nirav Modi and Choksi had left the country before PNB filed the complaint with the CBI. PTI AVI KRK