Indore EOW Exposes Major Banking Fraud Involving Rs 40 Lakh Loan Against Forged Property
The Economic Offences Wing (EOW) in Indore has made a significant breakthrough in uncovering a sophisticated banking fraud case involving a Rs 40 lakh loan that was sanctioned against forged property documents. This revelation has sent shockwaves through the financial sector and raised serious questions about banking security protocols.
FIR Registered Against Bank Officials and Private Firm Proprietor
On Saturday, the agency took decisive action by registering a First Information Report (FIR) against multiple individuals, including bank officials and a private marketing firm proprietor. The charges leveled against them are severe and comprehensive, encompassing cheating, forgery, and corruption under various sections of the Indian Penal Code and the Prevention of Corruption Act.
The case came to light following a formal complaint filed by Anand Shivanand Totad, the deputy general manager of Canara Bank's Indore regional office. His alertness and diligence in reporting suspicious activities initiated what would become a thorough investigation into financial malpractice.
Detailed Timeline of the Fraudulent Loan Scheme
The investigation revealed a carefully orchestrated scheme that began on April 12, 2018, when Chandrashekhar Pachori, operating under the firm M/s Jai Shiv & Company, applied for a Rs 40 lakh term loan. The stated purpose of the loan was the purchase of machinery, which seemed legitimate on the surface.
To secure this substantial loan amount, Rammohan Agarwal was presented as a co-obligant, essentially serving as a guarantor for the transaction. The collateral offered was Plot No 277 in Usha Nagar Extension, which was presented as valuable security for the loan agreement.
Systemic Failures in Banking Verification Processes
The legal and valuation reports submitted to Canara Bank's Nanda Nagar branch explicitly claimed that the plot was undisputed and entirely suitable for securing the loan. Based on these apparently credible reports and the recommendation of bank staff, the loan was formally sanctioned on May 8, 2018.
However, the EOW's forensic investigation uncovered shocking truths that had been completely overlooked during the bank's internal verification processes. Investigators discovered that long before the loan application was even submitted, a multi-storey building containing both flats and shops had already been constructed on the supposedly vacant plot.
Even more damning was the revelation that the property had been sold to third parties as early as 2009-10, nearly a decade before the loan application. By the time Chandrashekhar Pachori applied for the loan in 2018, the co-obligant Rammohan Agarwal was no longer the legal owner of the property being offered as collateral.
Intentional Negligence and Possible Collusion
The investigation suggests that the bank's internal verification and due diligence processes failed completely, despite these glaring and easily verifiable facts. This failure points toward either intentional negligence or active collusion between the applicants and bank officials.
The fraud remained successfully concealed for years until the loan account turned into a non-performing asset on May 1, 2023, after the accused stopped paying their instalments. It was only at this point that subsequent internal audits by Canara Bank finally unmasked the elaborate forgery that had been perpetrated.
Legal Charges and Accused Individuals
The EOW has registered cases under multiple serious sections of the Indian Penal Code, including:
- Section 420 (Cheating)
- Section 467 (Forgery of valuable security)
- Section 468 (Forgery for purpose of cheating)
- Section 471 (Using forged document as genuine)
- Section 120-B (Criminal conspiracy)
Additionally, charges have been filed under Section 7 of the Prevention of Corruption (Amendment) Act 2018, indicating the involvement of public servants in the fraudulent scheme.
The accused named in the FIR include Chandrashekhar Pachori as the main borrower, Rammohan Agarwal as the co-obligant, Jatin Gupta who served as the then branch manager, Kamlesh Diwani who was the then credit manager, and the proprietor of a private marketing firm involved in the transaction.
This case highlights significant vulnerabilities in banking security systems and raises important questions about the effectiveness of internal controls within financial institutions. The Economic Offences Wing continues its investigation to determine the full extent of the fraud and identify any additional individuals who may have been involved in this elaborate scheme.
