A special Prevention of Money Laundering Act (PMLA) court in Mumbai has denied bail to 64-year-old businessman Ramchand Issrani from Kutch, Gujarat, who stands accused of orchestrating a ₹149.89 crore fraud against Union Bank of India.
Background of the Case
The Enforcement Directorate (ED) arrested Issrani in August 2023 following allegations that his company, Associate High Pressure Technologies Pvt Ltd (AHPTPL), defaulted on substantial loan repayments. The Central Bureau of Investigation (CBI) had previously registered a case against Issrani in 2021, accusing him of misappropriating funds and cheating Union Bank of India. Investigations revealed that AHPTPL’s loan account was declared a non-performing asset (NPA) in January 2016 and classified as fraudulent in December 2019, with over ₹90.46 crore outstanding.
Modus Operandi
The ED’s probe uncovered that AHPTPL allegedly secured four fictitious letters of credit totaling ₹7.5 crore in favor of Induja Traders Pvt Ltd by fabricating invoices. The illicit proceeds were then funneled into AHPTPL’s bank account. Further, the company is accused of withdrawing unsecured loans and diverting funds through accounts in State Bank of India and UCO Bank, actions that contravened the terms of the loan agreements.
Arguments for Bail
Issrani’s defense sought bail on grounds of parity and prolonged incarceration, noting that co-accused Manoharlal Agicha had been granted bail by the Bombay High Court. They contended that Issrani’s arrest was discriminatory, especially since Agicha was charge-sheeted without arrest. Additionally, they highlighted Issrani’s 14-month detention and the unlikelihood of a prompt trial commencement as justification for bail.
Prosecution’s Stand
The prosecution opposed the bail plea, asserting that Issrani, along with other directors, managed the company’s daily operations and was a principal architect of the fraudulent activities. They emphasized the gravity of the offense and the substantial financial loss inflicted on the bank.
Court’s Decision
Special Judge A.C. Daga rejected Issrani’s bail application, distinguishing his situation from that of Agicha, who was granted bail due to health concerns. The court noted that Issrani had sought a stay in the predicate offense from the Gujarat High Court, which he then cited as a reason for trial delays. The judge remarked, “Considering the fact that Hon’ble Gujarat High Court has stayed trial of predicate offence at the instance of the applicant/accused then it does not lie in the mouth of the applicant/accused to say that, because of stay granted by the Hon’ble Gujarat High Court, there is delay in trial in this matter and therefore, he be released on bail.” Consequently, the court concluded that Issrani was not entitled to bail.
Implications
This case underscores the judiciary’s stringent stance on financial crimes and the challenges faced by individuals seeking bail in serious economic offenses. The denial of bail to Issrani reflects the court’s commitment to addressing large-scale financial frauds that undermine the banking sector’s integrity.
Conclusion
As the legal proceedings continue, the focus remains on unraveling the complexities of the fraud and ensuring accountability for those involved. The case serves as a cautionary tale for corporate entities about the severe repercussions of engaging in fraudulent financial activities.
