Former MLA Sunil Kedar Himself Lodged FIR, Trial Court Observations Contrary To Evidence: Bombay HC While Suspending Sentence In NDCC Bank Fraud Case

The Bombay High Court recently observed that the trial court, while convicting former Congress MLA Sunil Kedar, made observations contrary to presented evidence and ignored that Kedar himself lodged the FIR.

Justice Urmila Joshi-Phalke of the Nagpur bench suspended the sentence of Kedar, convicted in a bank scam case of over Rs. 153 Crores, stating that Kedar has raised arguable points in his appeal against conviction.

“the observation of the trial court, that no step are taken to take action, is also contrary to the evidence as the applicant (Sunil Kedar) has lodged the First Information Report prior to registration of the crime. The specific admission by the investigating officer suggesting no evidence came before him showing any transactions between the applicant and HTL indicates that the observation of the trial court showing his involvement in the conspiracy is contrary to the evidence”, the court observed.

The trial court concluded that there was a conspiracy between Kedar and officers of HTL. However, the High Court pointed out that this is contrary to the investigating officer's admission that Kedar neither invested the amount for his personal gain, nor is he anyway concerned with the transfer of that amount.

Sunil Kedar, a former Congress MLA representing Saoner Assembly Constituency, was the acting Chairman of the Nagpur District Central Cooperative Bank (NDCC Bank).

The Kedar, along with six others is convicted for conspiracy to misappropriate funds of the bank. The funds were ostensibly invested in government securities through private brokers, namely Home Trade Limited (HTL), Century Dealers, Giltage Management, Indramani Merchants, and Syndicate Management Services. The National Bank for Agriculture and Rural Development (NABARD) later revealed irregularities, prompting investigations.

Kedar lodged an FIR against the brokers, alleging misappropriation of funds by supplying only photocopies of securities instead of the originals. However, subsequent investigations led to charges against Kedar himself, accusing him of breaching trust and conspiring with the brokers to defraud the NDCC Bank.

The Additional Chief Judicial Magistrate, Nagpur convicted Kedar under various section of the IPC, sentencing him to rigorous imprisonment for five years. Kedar filed an appeal challenging the conviction. He approached the high court seeking suspension of his sentence during the pendency of the appeal.

The trial court had observed that a crores of rupees were transferred to HTL under the pretext of acquiring Government of India (GOI) Physical Securities, which were never purchased for the NDCC Bank. The trial court concluded that, as no such securities were acquired, all sale transactions by Kedar and a co-accused with HTL were false and forged.

The HC pointed out that despite concluding that no purchase was made, the trial court also observed that the accused did not take steps to call for original securities from brokers or confirm whether such securities were purchased.

The trial court observed that the board of directors was kept in the dark regarding transactions involving the purchase of government securities through HTL. The HC noted that this is contrary to evidence indicating that the purchasing of government securities through HTL was brought to the notice not only of the board of directors but also to the share-holders by passing a resolution and publishing it in the annual report.

The HC noted that, at this stage, it is not required to appreciate the evidence fully but to see whether the applicant has arguable points in the appeal and chances of acquittal.

The HC expressed concern about potential irreparable damage if the sentence is executed before the appeal is decided. The court held that Kedar raised arguable points in his appeal, justifying the suspension of the sentence, and suspended the substantive jail sentence until the disposal of the appeal before the first appellate court.

Case no. – Criminal Application (APPLN) No. 01/2024

Case Title – Sunil s/o late Chhatrapal Kedar v. State of Maharashtra