Offence

no it cannot be counted as an offence..

Non-compliance of a procedural sanction condition, may not amount to an offence, per se, i.e., merely by itself, when considered in isolation. However, if such non-compliance was with a motive or intention to cause wrongful gain to some person OR was done by taking a bribe from the concerned person OR was a deliberate concealment to avoid its detection by superiors OR with some other types of criminal intention, then it may definitely amount to an offence. So, the answer depends upon the full facts and circumstances. However, in the absence of any such accompanying circumstances that show the presence of mens rea (guilty mind or some sort of criminal intent), such non-compliance by itself may not amount to an offence but even in that situation it may amount to be an irregularity.

Now a days It is common practice for CBI to approach the banks in search of failed loans to book the bank officers. In the given case, tin year 2000 he borrower company approached the SBI capital Markets Pvt.Ltd.  for preparing of their project report and help them to find banks which could give them loans. The SBI Caps prepared the project report and invited the head of banks in a five star hotel to give them the presentation and book the loan. Ten banks came and shared the loan to company. All banks processed the loan as per their rules and sanctioned the same. Each bank took its own documents and security. It was agreed between the banks to form a consortium and the loan amount was released though one bank. One condition of release was that the  bank shall obtain credit report of suppliers before releasing the amount to suppliers of goods which may be in hundreds in number.   No bank obtained the report on ground of impracticability of meeting the the condition. The borrower company was regular in loan and interest payments. It led to further loans in 2003, 2004, 2005, 2006, 2007 and 2009. The loan accounts were continued to  classified as A=1 performing assets till 2011. The  compliance of sanction conditions and performance of the account was monitored by the Bank's independent chartered accountant on monthly basis, by Bank's inspectors and Central auditors on annual basis. No one  pointed out the non obtaining of credit report on suppliers as a lapse or violation of sanction conditions. For successive  enhancement of credit limits every year, the banks Regional Office  and Central Office had processed the loan applications  and the non obtaining of credit report on suppliers was not  viewed as adverse .  

In year 2011,, the company defaulted in payments.   The CBI took over and charged the officers at branch for dishonestly releasing the credit facility without obtaining the credit report on suppliers. CBI found that the supplier's invoices were forged / bogus and in fact were created by the borrower company by putting in bogus firms  and the amount was diverted.  The case of the bank officers at branch level was that  in the loans  which are to the tune of hundreds of crores, the successive sanction was made by Head Office and  they never had a knowledge of the massive diversion of funds by borrower. The borrower is a highly connected person having direct accesses to CMD of banks and the branch  level officers had no guts to refuse releasing the loans. The amount is fully covered by the securities. But they are now facing the  prosecution u/s 13(1)D) PC ACt r/w 120B, 467, 468,471 along with the borrower company.  

There is no charge of disproportionate assets or illegal gratification against the branch level officers. The lapse of branch level officers appear to be  procedural which was not considered serious at any time by the superiors during monitoring or at the time of sanction of further loans to borrower. Can it be an offence to prosecute them?

I seek the expert opinion  as it concerns only the officers in present case but is worry of many others  who are booked by CBI even after their retirement when a loan has failed  and head hunting begins to find the scapegoats.

SEWA RAM ADV.