Greater Bombay, July 24, 2017 – The Special Court for CBI at Greater Bombay, presided over by His Honour the Special Judge (CBI) Shri P. S. Tarare (In-charge of C.R.No.47), has granted bail to Shri Arvind Sethi, the then Assistant General Manager (AGM) of Central Bank of India, Mumbai Main Office. Sethi was an accused in crime no. RC 02/E/2017-EOW, Mumbai, pertaining to a loan fraud case involving M/s. Swiss Brainstore Systems (India) Private Limited and others, causing an alleged wrongful loss of ₹20,95,89,378 to the Central Bank of India. The order for bail in Bail Application No. 416 of 2017 was passed on July 21, 2017, and the certified copy was uploaded on July 24, 2017.

Advocate Mr. Nagarseth appeared for the Applicant/accused, while PP Mr. Nandode represented the CBI.

Prosecution’s Case:

The case originated from a complaint dated April 1, 2017, filed by Shri M.M.Panda, AGM of Central Bank of India, Mumbai Main Office, against several entities and individuals, including M/s. Swiss Brainstore Systems (India) Private Limited and its directors, a valuer, chartered accountants, and bank officials, including the present applicant, Shri Arvind Sethi. The allegations involved fraud, forgery, and diversion of funds sanctioned and disbursed to M/s. Swiss Brainstore Systems (India) Private Ltd., leading to a significant financial loss for the bank.

During the investigation, it was revealed that the accused Shri Arvind Sethi, along with another bank official, Shri S.K.Roy, allegedly prepared a Process Note dated September 18, 2012, and recommended the sanction of a Working Capital Limit of ₹15 Crore and ODBD of ₹9 Crore to the Regional Office of Central Bank of India, Mumbai. This recommendation was allegedly made without ensuring that the collateral property had even been acquired by M/s. Swiss Brainstore System (India) Pvt. Ltd. by that date.

Further investigation suggested that the Valuer, Shri Hitendra Gangwar, overvalued the property at ₹25.60 Crore, allegedly at the instance of the present accused, Shri Arvind Sethi.

Applicant’s Arguments for Bail:

The Ld. Counsel for the accused submitted that Shri Arvind Sethi was arrested on July 4, 2017, and was in police custody until July 14, 2017, after which he was in judicial custody. The counsel emphasized that the applicant had cooperated with the CBI investigation and was ready to continue doing so if required. He also stated that the applicant was willing to abide by any conditions imposed for the grant of bail. Furthermore, the counsel pointed out that the accused was a resident of Borivali, owned property, had family there, and there was no likelihood of him absconding.

The Ld. Counsel for the accused relied on the case of Sanjay Chandra Vs. Central Bureau of Investigation (AIR 2012 Supreme Court 830), which discusses the object of bail.

Court’s Reasoning for Granting Bail:

Upon perusal of the case papers and considering the submissions, the Special Judge noted that the FIR was registered on April 1, 2017, and the applicant was arrested on July 4, 2017. He was in police custody for ten days and subsequently in judicial custody.

Crucially, the Court observed that the FIR did not specifically assign a direct role to the present applicant/accused in the alleged fraudulent activities. It was noted that the applicant was working as AGM (Branch head MMO Branch) and had since been removed from service, implying he no longer had access to bank documents. Furthermore, it appeared that nothing incriminating was recovered from the accused. The Court also took into account the applicant’s willingness to cooperate with the CBI investigation and his residence within the court’s jurisdiction, mitigating the risk of absconding.

The Special Judge opined that keeping the applicant/accused behind bars would not serve any purpose, especially considering his cooperation and lack of access to bank documents post-removal from service. The Court believed that the prosecution’s objectives could be met by directing the applicant/accused to attend the CBI office for investigation purposes.

Considering the above facts and circumstances, the Special Judge deemed it proper to release the applicant/accused on bail with certain conditions.

Order of the Court:

Special Judge (CBI) Shri P. S. Tarare passed the following order:

1. Bail Application No. 416 of 2017 is allowed.
2. Applicant/accused Shri Arvind Sethi shall be released on bail on his executing a Personal Bond (PB) of ₹50,000/- (Rupees Fifty Thousand only) with one solvent surety in the like amount, on the condition that: (a) He shall attend the CBI office every Monday in between 10:00 a.m. to 5:00 p.m. till the filing of the chargesheet. (b) He shall not tamper with the prosecution witnesses in any manner.
3. In case of any breach of condition, the prosecution is at liberty to file an application for cancellation of bail.
4. The Investigating Officer is to be informed accordingly.
5. Bail Application No. 416/2017 is disposed of accordingly.

The granting of bail to the bank AGM in this significant loan fraud case highlights the court’s consideration of the specific role attributed to the accused in the FIR, the lack of recovery from him, his cooperation with the investigation, and his roots in the community. The conditions imposed aim to ensure his continued cooperation with the CBI without the need for his continued incarceration during the investigation phase.