The case of alleged impropriety in the disbursement of the loan had been brought before the court of ADM Pavan Jain. According to the case, Bank of Maharashtra (Jabalpur branch) had granted a loan of Rs 3 crore to an Indore-based company by mortgaging its three-hectare land (without physically checking the land or its real value). Later, bank officials petitioned the ADM court for recovery of the loan amount by taking possession of the mortgaged land.
“The loan was sanctioned by the legal branch and the director of the Bank of Maharashtra without verification of the mortgaged property. The actual value of the mortgaged property appears to be less than the loan amount. In such a situation, recovery of the loan by the bank is not possible. The amount deposited in the bank is the public amount of the common people. The legal department and the manager should have made an in-depth study on these points before granting the loan, which was not done in this case,” observed the ADM court.
The order further clarifies that, in this way, a pecuniary offense has been committed by the requesting institution. “In such a situation, the Reserve Bank of India should decide on the necessary action against the applicant financial institution in accordance with the rules. If necessary, RBI should also decide on the legal action by filing an FIR with CBI “, indicates the ordinance.
The ADM court also ordered Mhow SDM to provide possession of the mortgaged land to the bank. The ADM asked the bank that if it was necessary to auction the mortgaged land to recover the amount of its loan, it should not be sold at a rate lower than the directive of the collector of the property.