Mumbai, August 4, 2022 – Daljit Singh Gurbachan Singh Bal, a 72-year-old former director of the Punjab and Maharashtra Co-operative Bank (PMC Bank), was granted bail by the Sessions Court for Greater Bombay in connection with the multi-crore rupee fraud that rocked the financial institution. The order, issued by Additional Sessions Judge S.M. Menjoge, comes after Bal spent nearly six months in custody, having been arrested on February 12, 2022.

Bal was implicated in Crime No. 86/2019, registered by the Economic Offences Wing (EOW) of the Mumbai Police, stemming from a complaint filed by Jasbirsingh Matta, the Manager of PMC Bank. The complaint alleged a staggering loss of Rs. 4,335.46 crores due to fraudulent activities involving key bank officials, including the Managing Director Joy Thomas, Chairman Warayam Singh, and directors of Housing Development and Infrastructure Ltd. (HDIL), Sarang and Rakesh Wadhwan. The charges against Bal included sections 406, 409, 420, 465, 467, 468, 471, 477(A), 201, and 120(B) of the Indian Penal Code, relating to criminal breach of trust, cheating, forgery, and conspiracy.

Defense Argues Lack of Direct Involvement and Reliance on RBI Guidelines

Bal’s defense, led by Advocate Nitin Pradhan, argued that he was falsely implicated in the case. They asserted that Bal served as a director from 2015 to 2017 and was a member of the Executive Committee from 2017 to 2020. Crucially, they pointed to Reserve Bank of India (RBI) guidelines that restrict directors from engaging in the day-to-day operations of the bank. Bal’s legal team emphasized that he relied on the information presented to him as a director and was unaware of the alleged irregularities committed by the Managing Director and other officers.

A key point of contention was the allegation that Bal facilitated a loan to his nephew, Tejinder Singh Bal. The defense vehemently denied this claim, stating there was no proof of any familial relationship. Furthermore, they argued that as a member of the Loan and Executive Committee, Bal’s role was limited to addressing non-performing assets (NPAs), and since HDIL was never declared an NPA, the loan issues never came before the committee.

RBI Affidavit and Testimony of Key Witnesses Highlight Management Failures

The defense also highlighted an affidavit filed by the RBI in a Public Interest Litigation (PIL), which stated that HDIL loans were sanctioned by the Managing Director and concealed from the Board of Directors. This revelation, coupled with the testimony of former PMC Bank officials, including Ranjana Bisen and Anita Rupesh Koli, painted a picture of a bank where crucial decisions were made by a select few, bypassing established procedures and concealing vital information from the board.

Statements from these witnesses indicated that Joy Thomas, Warayam Singh, and other senior officers were responsible for creating false documents and disbursing loans without proper security. Manjit Kaur, a former Joint General Manager, testified that Thomas and Singh personally monitored loans sanctioned to the HDIL group.

Court Grants Bail, Citing Lack of Specific Allegations and Parity with Co-Accused

Judge Menjoge, after reviewing the voluminous chargesheet and considering the arguments presented, granted Bal bail. The court noted that no witness had specifically implicated Bal in favoring any individual during the loan sanctioning process. The court also addressed the allegation regarding the loan to Tejinder Singh Bal, stating that there was no evidence to support the claim of a familial relationship or that Bal had sponsored the loan.

Furthermore, the court took into consideration the RBI guidelines that limit the role of directors in day-to-day operations. The judge also highlighted a letter from Joy Thomas admitting that he made the decisions for granting overdrawals and concealed information from the board.

The court also pointed to the fact that bail had been granted to other co-accused, including Dr. Trupti Suhas Bane, Mukti Bavisi, and Ranjit Tarasingh Nandrajog, who were also directors of PMC Bank. Judge Menjoge stated that not only on the ground of parity, but also considering the other facts on record, he found no reason to keep Bal in custody.

Conditions of Bail and Future Proceedings

Bal was granted bail on a personal bond of Rs. 1,00,000 with one or more sureties of the same amount. He was also permitted to furnish a provisional cash security of Rs. 1,00,000 for eight weeks in lieu of surety. The court further ordered Bal not to leave India without permission and to deposit his passport with the trial court. He was also directed not to tamper with the prosecution evidence.

The granting of bail to Daljit Singh Bal marks a significant development in the ongoing investigation into the PMC Bank fraud. The case highlights the complexities of corporate governance and the challenges in holding directors accountable for alleged malfeasance when their roles are strictly defined by regulatory guidelines. The focus now shifts to the trial court, where the evidence will be thoroughly examined to determine the culpability of all the accused.