In a detailed order in the Maharashtra State Co-operative Bank (MSCB) case, a special court in Mumbai concluded that there was no evidence of criminal intent on the part of the accused, including NCP leader Ajit Pawar and his family members. The ruling came after the court accepted the closure report submitted by the Economic Offences Wing (EOW) of the Mumbai Police, effectively bringing the case to an end and granting relief to those named in the allegations.
The court emphasised that procedural lapses or irregularities, by themselves, do not amount to criminal offences. It noted that the essential requirement of mens rea, or criminal intent, was absent in this case. According to the findings, there was no material indicating dishonest or fraudulent misappropriation of funds entrusted to public officials, nor any evidence suggesting forgery or deliberate wrongdoing.
The case revolved around allegations of financial irregularities in loans disbursed by the MSCB to various sugar factories. These assets were later auctioned or taken over by entities allegedly linked to Ajit Pawar and his associates, with complainants claiming losses exceeding ₹25,000 crore. However, after examining the transactions in detail, the court found that due process had been followed, particularly under the SARFAESI Act, during the auction and recovery proceedings.
Rejecting the charge of conspiracy, the court observed that there was no indication of any prior agreement or coordinated plan among the accused to commit an illegal act. It noted that loan approvals were processed according to established banking procedures, with documentation placed before the appropriate committees. There was no evidence to suggest that these processes were manipulated with intent to deceive.
On allegations of undervaluation of assets, the court clarified that market value alone is not the determining factor under the SARFAESI framework. It stated that reserve prices were fixed through proper valuation methods and that factors such as factory closures, financial distress, and ongoing legal disputes could justify lower sale prices in certain cases.
The court also considered that recovery efforts were still ongoing in several instances and that the bank retained securities such as pledges, shares, and guarantees. In some cases, measures like one-time settlements or asset seizures had been undertaken to protect the bank’s interests. Based on this, the court concluded that no wrongful gain had been established for the accused and that there was no clear evidence of financial loss suffered by the bank.
While acknowledging that the complainants had the right to file protest petitions and be heard, the court found that their allegations were not supported by credible evidence. After reviewing audit reports, witness statements, and the findings of the investigation, the court determined that no cognisable offence was made out.
As a result, the court accepted the ‘C’ summary report filed by the EOW and dismissed all protest petitions, formally closing the case.
