Breach of trust by bank personnel
manish mundra
(Querist) 10 August 2012
This query is : Resolved
Synopsis of Kotak Mahindra Bank Ltd
• X Ltd got a loan sanctioned for Rs 85,06,800/- on 30-03-2010. The repayment was through EMI starting from 01-05-2010 for Rs 2,77,100 for 35 months. The loan was to be repaid by 01-05-2013.
• All the EMI was regular till August 2011. Thereafter there was delay in repayment.
• The company then approached Kotak Mahindra Bank ltd through its consultant CA AB, a practicing Chartered Accountant to formulate a policy in consultation with Kotak Bank Ltd so that the loan tenor gets increased and EMI is reduced.
• There was several round of discussion with 3 persons of kotak bank ltd namely.
 Mr M
 Mr N
 Mr O
• It was then conveyed by the above 3 employees of Kotak Mahindra Bank Ltd that Bank would refinance the loan to some other group co. X ltd accordingly submitted the proposal in name of Y. in May 2012.
• As discussed with people of Kotak Mahindra Bank, a letter of Consent for loan amounting to Rs 36 lac was issued in favour of Y. The 3 people then fraudulently, with a malafide intention tried to convince the Director of X Ltd that the co has to clear the pending EMI dues and then the loan can be disbursed in favour of Y. The director then took the advice of their consultant , CA AB and on his personal Guarantee paid the overdue 3 EMI. This amount of Rs 8,31,300/-was paid through RTGS on 5-07-2012.
• The company then followed with the employees of Kotak Bank but they did not have any reply to the reminders of X ltd.
• The director of X ltd ltd then made his Consultant CA AB liable to pay of Rs 8.31 lacs to company as on his advice and guarantee the payment was made.
• CA AB wrote an E-mail DT 23-07-2012 to Mr O of Kotak Mahindra Bank explaining his position and demanding a solution to this problem.
• An email from Mr N of Kotak Mahindra Bank ltd was received by CA AB on 27-07-2012 where they declined to refinance.
• This whole episode has brought lot of bad name and personal liability to CA AB because of Breach of Trust, fraudulent activities of the above named 3 employees.
Now What action can be initiated against these # persons by Ca AB??
Devajyoti Barman
(Expert) 10 August 2012
This is typical case of breach of promise prevalent in money market especially in collection of EMI scenario.
Unfortunately the case is too weak to do anything against the officials of the Bank . Similarly the CA AB is also not personally liable.
It is the subsequent company which is in fix.
Guest
(Expert) 11 August 2012
Discussions, if without any record, would not help in any way. The bank has been able to recover its amount by applying trick becoming confidence trickesters. Refusal to refinance by the bank is the discretion of the bank.
Neither the company X, nor Y, nor CA AB can do any harm to the bank or its employees M, N, O. Any legal action requires substantial evidence, written assurance to refinance, in this case.
Rather, the three employees of the bank would have got a feather each in their cap from the bank management for effecting recovery successfully from the defaulting company.
