Madras High Court Directs CBI Enquiry against IOB Officials The Madras High Court has directed the Central Bureau of Investigation (CBI) to conduct an enquiry into allegations of bank fraud, criminal conspiracy and misconduct by officials of the Indian Overseas Bank (IOB) in connection with the

Madras High Court Directs CBI Enquiry against IOB Officials

The Madras High Court has directed the Central Bureau of Investigation (CBI) to conduct an enquiry into allegations of bank fraud, criminal conspiracy and misconduct by officials of the Indian Overseas Bank (IOB) in connection with the auction of properties belonging to PERI Educational and Charitable Trust in favour of SRM University.

The Trust had submitted a complaint before the CBI alleging that officials of Indian Overseas Bank, in collusion with the auction purchaser, SRM University, had deliberately facilitated the sale of valuable secured assets at a grossly undervalued price. According to the complaint, the Trust had availed loan facilities of about ₹48 crores and had repaid substantial amounts towards the loan account. It was alleged that despite a One-Time Settlement (OTS) having been arrived at and despite the Trust having paid ₹24 crore under the OTS, the bank proceeded with coercive measures. The complaint further alleged that properties worth about ₹252 crore were auctioned for approximately ₹45.60 crore, causing huge loss to the Trust. As no action was taken on the complaint, the Trust approached the High Court seeking a direction to the CBI to register a case and investigate the matter.

When the writ petition came up for hearing before Justice G.K. Ilanthiraiyan, Senior Counsel Hasan Mohammed Jinnah, appearing for the petitioner, submitted that despite another bank having expressed its willingness to take over the loan account and despite the Trust’s efforts to settle the dues, the bank officials proceeded with the auction of the properties in favour of SRM University at a grossly undervalued price. He contended that the auction was conducted in a manner that conferred an undue advantage on SRM University and caused substantial loss to the Trust. He further submitted that the allegations disclosed serious offences, including criminal conspiracy, abuse of official position and corruption, warranting an independent enquiry by the CBI.

Opposing the plea, the CBI submitted that the complaint had already been examined and forwarded to the Vigilance Department of Indian Overseas Bank for appropriate action.

In response, Senior Counsel Hasan Mohammed Jinnah argued that an enquiry by the Vigilance Department of the very same bank would not inspire confidence, as it would involve scrutiny of the conduct of its own officers. He submitted that the nature and gravity of the allegations, involving public servants and allegations of collusion between bank officials and the auction purchaser, SRM University, necessitated an independent enquiry by the CBI.

After hearing the submissions, Justice G.K. Ilanthiraiyan directed the CBI to conduct an enquiry into the allegations made by the petitioner and to proceed further in accordance with law.