CBI books five construction firm officials for ₹12-crore bank fraud

MUMBAI: The Central Bureau of Investigation (CBI) has registered a case against five officials of a private construction company for allegedly cheating the Bank of India and causing a financial loss of ₹12.08 crore.

According to CBI sources, the accused misappropriated loan funds and diverted them, violating key conditions set out in the sanction terms. The complaint was filed by the Bank of India’s deputy general manager from the Asset Recovery Management Branch in Andheri West, prompting the agency to initiate a criminal investigation.

The bank alleged that the firm and its directors defrauded the city branch by failing to deposit sale proceeds from flats and shops in its Navi Mumbai real estate projects, as mandated under the loan agreement. Instead, they allegedly sold units without obtaining the required No Objection Certificates (NOCs) from the bank.

The CBI registered its case under sections of Indian Penal Code and Prevention of Corruption Act pertaining to criminal conspiracy, cheating, criminal misappropriation and diversion of funds. According to the bank’s complaint, its estimated loss as a result of the fraud till December 2021 was ₹12.08 crore. The CBI probe will examine credit transactions of the bank with the firm between July 2013 to December 2021 to finance the construction and development for its real-estate projects in and around Navi Mumbai.

The bank alleged that as per the loans’ sanction terms, the borrower firm was required to take No Objection Certificate from the bank before selling the flats/shops in the upcoming projects and to deposit the sale proceeds with the bank. “However, the sanction terms were not complied with by the borrower / developer according to the bank’s complaint,” a CBI source said.

The firm’s loan account was classified as a non-performing asset on March 31, 2016 as per the laid down procedure and a demand notice under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002, was issued. The loan account was approved to be classified as “fraud” in September 2024 by the Competent Authority, in view of a Supreme Court order of 2023, according to the CBI’s First Information Report.