HC refuses to quash CBI case against builder Kishore Avarsekar
Bombay HC refuses to strike down criminal proceedings initiated by the CBI against developer Kishore Avarsekar and his family accused of cheating SBI of ₹757.87 crore.
The Bombay high court has refused to strike down criminal proceedings initiated by the Central Bureau of Investigation (CBI) against developer Kishore Avarsekar and his family who are accused of cheating the State Bank of India (SBI) of ₹757.87 crore through fictitious transactions.
The CBI in September 2023 registered an FIR against Avarsekar, chairman and managing director of Unity Infraprojects, his wife and two sons – all of whom are on the board of directors of the firm.
The Avarsekars and the firm had got a loan from the bank. The agency alleged that they duped the bank of ₹757.87 crore of the loan amount through fraudulent LC (letter of credit) trade model, improper adjustments made to accommodate fictitious accounting entries by fudging the data, diversion of funds through non-consortium accounts, and unexplained excess payouts.
The case was registered after the bank on November 9, 2019, declared Unity Infraprojects’ account a “fraud” following a master circular issued in that regard by the Reserve Bank of India.
Last year, Avarsekar approached the high court, challenging the bank’s order. The court in September struck down the bank’s order on grounds that it was passed “in complete breach of the principles of natural justice, as no notice was issued, and no hearing was given to them before passing the order.”
Subsequently, the developer filed a petition seeking the HC’s direction to quash the FIR.
A division bench of justice Anuja Prabhudessai and justice NR Borkar, however, turned down his plea, saying in several cases the Supreme Court had held that the criminal proceedings would continue independently of the classification of the accounts as “frauds”.
“The FIR cannot be quashed on grounds that the classification of account as a ‘fraud’ has been set aside,” the bench said in its order last week. “The court cannot embark upon an enquiry as to the genuineness of the allegations and scuttle the investigation which is at the nascent stage.”
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