CBI Court Sentences 2 Retd. SBI Officials to 3-Year Jail Term in ₹5.7 Crore Bank Fraud Case from 2010

The Special CBI Court (West), Lucknow has convicted and sentenced two officials that retired from the State Bank of India (SBI) and a Lucknow-based private company in a fifteen-year old bank fraud case involving ₹5.7 crore and the availment of fraudulent term loans and diversion of funds sanctioned for machinery purchases.

The Court sentenced Subhash Chandra Aggarwal, retired Deputy Manager, SBI Main Branch, Lucknow and Joy Chakravarti, Desk Officer, CPC, SBI Local Head Office, Lucknow to three years of rigorous imprisonment and imposed a fine of ₹30,000 each.

A corporate fine of ₹10 lakh was also levied on M/s Addyapolo Projects Pvt. Ltd. - a private company involved in the conspiracy. The company’s director, Kranti Kumar Singh, who was the fourth accused, passed away during the course of trial.

The Central Bureau of Investigation (CBI) had registered the case on 26 March 2010 on the complaint of the Deputy General Manager of SBI, Main Branch, Lucknow.

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The complaint alleged that Kranti Kumar Singh, Director of M/s Addyapolo Projects Pvt. Ltd., in criminal conspiracy with the bank officials, availed a term loan of ₹5.70 crore from the bank using false and fictitious documents and induced the bank to disburse the loan amount in favour of three non-existent supplier entities, namely, M/s Zassoda Global Marketing, M/s R.K. Traders and M/s Sambhav Enterprises.

The investigation revealed that Singh himself operated the accounts of these fictitious supplier firms and diverted the loan funds for personal gain instead of utilizing them for the sanctioned purpose of purchasing machinery, causing substantial financial loss to the bank.

Following the investigation, the CBI filed a chargesheet on 29 November 2011 before the competent court against all four accused - Kranti Kumar Singh, M/s Addyapolo Projects Pvt. Ltd., Subhash Chandra Aggarwal and Joy Chakravarti under Sections 120B and 420 of the Indian Penal Code and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.

After extensive trial proceedings over 14 years, Special Judge Anil Kumar Mishra found the accused guilty of conspiracy, cheating and criminal misconduct. The Court noted that the evidence led by the prosecution established that the loan was fraudulently disbursed on the strength of fabricated documentation.

The Court reportedly observed that the public officials had “betrayed the trust reposed in them by the bank and the depositors” by failing to exercise due diligence and facilitating the fraud for personal gain.

The Court convicted and sentenced the two retired bank officials to imprisonment and imposed fines on all surviving accused. The judgment marks the culmination of a prolonged trial that began in 2010, posing yet another example of judicial intolerance towards bank fraud and abuse of official position by staff in public sector institutions.

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