Businessman sentenced to 3 years in jail for duping bank

A Delhi court has sentenced a businessman to three years in jail for cheating a nationalised bank of Rs 1.34 crore by floating various fictitious firms and diverting funds, taken from the bank as loan, to them.

Special CBI Judge Manoj Jain sentenced Mahesh Kumar, the director of Maharaja Ispat Private Limited, saying the loan given to his firm by Canara bank were "mis-utilized" by him.

"He (Kumar) alone is responsible for extraction of funds availed by the company through...Canara Bank. Various companies, on paper, were floated and bank accounts were opened. These were in the name of employees or relatives, and there was no work in such companies.

"Most of the bank accounts with respect to various such companies were opened in the Canara Bank, Uttam Nagar Branch, itself for diversion of funds," the court said while holding him guilty under section 420 (cheating) of the IPC.

The court also imposed a fine of Rs 1 lakh on Kumar and said he availed the loan and "did not even think twice before signing so many cheques most of which were high-valued cheques running in millions".

According to the CBI, Kumar, who was granted loan of Rs 2,29,61,000 from 2001 to 2005 by the bank, had cheated it and did not return it to the bank.

The CBI had alleged no actual trading transaction took place in the firm and the funds were channeled from Maharaja Ispat Private Limited to another company, Golden Rathi Star Industries Ltd with a malafide intention of "hoodwinking" the bank, causing a loss to the tune of Rs 1,34,81,000 as the sale of mortgaged properties could only fetch Rs 94.8 lakh.

The CBI said the funds received by the company were misused by Kumar for his own purpose which had nothing to do with the work of the company.

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