For more than three decades, a bank manager was made to answer for an alleged loss caused to Indian Bank by loans sanctioned in 1991-92. But when the Supreme Court finally acquitted him, it was the bank that found itself in the dock — over why it had kept more than ₹ 2.7 crore in excess auction proceeds with itself for years instead of handing the money over to the borrowers’ legal heirs.
A bench of justices JB Pardiwala and K Vinod Chandran noted that the bank received ₹ 1.175 crore from the auction of one borrower’s property against loan dues of only ₹ 16.42 lakh, while another auction fetched ₹ 2.42 crore against dues of just ₹ 5.35 lakh. A further property fetched ₹ 34.5 lakh, which was also appropriated towards the loan account.
The court said the loans had been fully satisfied, yet the excess money from the auctions was still lying with the bank. “More intriguing is the fact…that the amounts received in auction, in excess of the appropriation to the loan accounts are still remaining with the bank,” said the bench, expressing surprise that “no attempt was made to find out the legal heirs and pass on the money”.
The court has now impleaded the branch manager of Indian Bank’s Anna Nagar branch and ordered him to submit a report on the two loan accounts, their satisfaction, the auction proceeds and how the excess money was utilised. The bank has also been directed to produce the title deeds of the mortgaged properties. But the apex court found the prosecution evidence fundamentally deficient. It noted that the loans had in fact been sanctioned by the Indian Bank’s Regional Office, with official witnesses acknowledging the approvals. The bank subsequently recovered the loan amounts in full by auctioning the mortgaged properties.
The court also found that the prosecution had failed to establish that Kumaradevan had actually signed the cheques through which the loan amounts were allegedly received by him. Because they fetched substantially higher prices when auctioned in 2010 — nearly two decades later, it further rejected the inference that the properties must have been overvalued in 1991-92 simply.
