NEW DELHI: Recognizing that financial fraud is now being perpetrated with greater finesse using technological innovations, the Supreme Court on Wednesday underscored the need for a specialized agency to deal with such cases, saying a CBI investigation into not the case in all cases is required.
During the hearing of a petition alleging that the Center and the Reserve Bank of India are not taking strict action against corporate houses and industrialists who default on public sector bank loan repayments, and a CBI investigation into They requested that a judge’s panel of judges Sanjay Kishan Kaul, Abhay S. Oka and BV Nagarathna said it was not advisable to “unleash” the CBI in all financial fraud cases, particularly in cases where multiple investors had been defrauded.
Lawyers Prashant Bhushan and Pranab Sachdeva, appearing for the applicant NGO, pushed for a CBI investigation on the grounds that a government-appointed committee had itself recommended that the CBI should be called in to investigate cases in which the amount of insolvency was more than 50 rupees crore as the local police may not be able to conduct the investigation properly in large cases. They said that according to the recommendations, the debtor’s passport should be confiscated and prosecution should be carried out by summary court.
Since the RBI claimed that it could not issue an order for expedited courts and passport seizures as the matters fell within the government’s purview, the bank asked Attorney General Tushar Mehta to look into this and submit a response.
“Some concerns need to be addressed. You have to think about it. In any event, if you unleash the CBI, consequences will follow… If someone has done wrong, they must face the consequences. But there are all cases must be investigated by the CBI? … it worries us. The CBI should focus on huge outages. If you put all the cases on the CBI, nothing will happen. Everyone would be left stranded. We have seen cases in many,” the bank said.
The bank then pointed out that financial fraud and scams were carried out using advanced technology and said that a specialized agency was needed to deal with such cases. It said law enforcement agencies must keep up with technological advances to solve such cases and expressed concern that India, despite being a software giant, is lagging behind on this front.
When Bhushan suggested that CBI investigations should be conducted into all major financial scams as PSU banks disburse loans to corporate houses on orders from ministers and government officials, the Attorney General declined. But the bench said, “He (Bhushan) seems to have great faith in the CBI.” Bhushan replied that the CBI was “relatively free”.
Thereafter, the Chamber gave the Center six weeks to submit its response to actions to be taken, including preventive actions, to deal with cases financial fraud.
The petitioner had alleged that banks were reluctant to bring criminal proceedings against defaulting corporate houses and asked the court to order banks and financial institutions to enforce the 2016 RBI circular. Even the Central Vigilance Commission issued a circular in 2018 stating that all public sector banks should report financial fraud to local/state police and the CBI, the petitioner added.
During the hearing of a petition alleging that the Center and the Reserve Bank of India are not taking strict action against corporate houses and industrialists who default on public sector bank loan repayments, and a CBI investigation into They requested that a judge’s panel of judges Sanjay Kishan Kaul, Abhay S. Oka and BV Nagarathna said it was not advisable to “unleash” the CBI in all financial fraud cases, particularly in cases where multiple investors had been defrauded.
Lawyers Prashant Bhushan and Pranab Sachdeva, appearing for the applicant NGO, pushed for a CBI investigation on the grounds that a government-appointed committee had itself recommended that the CBI should be called in to investigate cases in which the amount of insolvency was more than 50 rupees crore as the local police may not be able to conduct the investigation properly in large cases. They said that according to the recommendations, the debtor’s passport should be confiscated and prosecution should be carried out by summary court.
Since the RBI claimed that it could not issue an order for expedited courts and passport seizures as the matters fell within the government’s purview, the bank asked Attorney General Tushar Mehta to look into this and submit a response.
“Some concerns need to be addressed. You have to think about it. In any event, if you unleash the CBI, consequences will follow… If someone has done wrong, they must face the consequences. But there are all cases must be investigated by the CBI? … it worries us. The CBI should focus on huge outages. If you put all the cases on the CBI, nothing will happen. Everyone would be left stranded. We have seen cases in many,” the bank said.
The bank then pointed out that financial fraud and scams were carried out using advanced technology and said that a specialized agency was needed to deal with such cases. It said law enforcement agencies must keep up with technological advances to solve such cases and expressed concern that India, despite being a software giant, is lagging behind on this front.
When Bhushan suggested that CBI investigations should be conducted into all major financial scams as PSU banks disburse loans to corporate houses on orders from ministers and government officials, the Attorney General declined. But the bench said, “He (Bhushan) seems to have great faith in the CBI.” Bhushan replied that the CBI was “relatively free”.
Thereafter, the Chamber gave the Center six weeks to submit its response to actions to be taken, including preventive actions, to deal with cases financial fraud.
The petitioner had alleged that banks were reluctant to bring criminal proceedings against defaulting corporate houses and asked the court to order banks and financial institutions to enforce the 2016 RBI circular. Even the Central Vigilance Commission issued a circular in 2018 stating that all public sector banks should report financial fraud to local/state police and the CBI, the petitioner added.
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