MAIN : ADV - 139 / 2012-13 DT. 15-02-2013

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SUB : CLIST - 08 Corporate Office, Credit Division

FILE M-2 S-215

Sub : Caution Notice No. 08 / 2012-13

It has been brought to the notice that serious irregularities were committed in some

banks, in the conduct and operations of the accounts given in the annexure.

Details in regard to addresses, names of proprietors / partners / directors and the

nature of irregularities are also furnished in the annexure.

The information is brought to the notice of branches in the strictest confidence.

Branches are advised to make detailed and in-depth enquiries and take up with

Head Office before processing/ renewing any facility to the parties named in the

Annexure. Upon receipt of this notice, Branch Managers are requested to

verify thoroughly and to report to their Zonal Office within a week, as to

whether any credit facility is being enjoyed by the said Entities / Persons from our

Bank. If the Zonal Office receives no information from the branches, within a week

from the date of this Circular, it will be construed that no sanction has been made

to any of the listed parties. The Zonal Managers shall furnish a consolidated

report furnishing the details of the status of the account, security details,

nature of irregularities, if any, in our Bank, vis-a-vis the irregularity reported

in this circular, etc., to HO: Credit Division positively within two weeks from

the date of this Circular, as these information are to be passed on to RBI by

Head Office. This circular may please be kept in the personal custody of the

Branch Manager and Credit Officer should make use of it, for confidential

reference at all times.

G V Balasubramanian Deputy General Manager (DC)

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Annexure to Caution Notice No. 08 / 2012-13

M/s Anil Engineers Address W-175 A,S Block, MIDC Bhosari Pune-411026 Proprietor Shri Anil Dhamande Address 68/4, Madhur CHS Indrayani Nagar Bhosari Pune-411 026 M/s Charika Industries Proprietor Shri Bipin Acharlal Desai Address Ist floor, Room No.3 Jethabai Building Bomanji Patit Road Mumbai-400026

1

Nature of Irregularities A financial institution (FI) had sanctioned a term loan of Rs. 8.30 mn on July 11, 2008 to the borrower firm for purchase of machines. Disbursement of Rs. 7.39 mn was made directly to the machinery supplier. The unit was visited on October 23, 2010 and it was observed that all the machines were installed and project was implemented. In March 2011 the borrower informed the FI that he has shifted the machines to another location at Chinchwad, Pune and given the machines on rent to M/s Press Fab Engineers India Pvt Ltd. All the machines acquired under the project were not available at the new site also but the borrower failed to give details regarding whereabouts of the machines. Enquiries with the supplier of the machines at Ludhiana revealed that the invoices submitted by the borrower to the FI were not issued by them and they also denied having any bank account with the bank in Mumbai in which the proceeds of the disbursements were credited by the said FI. It turned out that the borrower in connivance with a fictitious machinery supplier (M/s Charika Industries) siphoned of the loan amount by submitting fake / forged invoices. Thus the FI was defrauded to the tune of Rs. 9.97 mn.

M/s Gokul Mega Stores Address Shop No. 14-A, Ashoka Ratan Shankar Nagar, Raipur – 492 001,

Chattisgarh State. Proprietor Shri Vijay Garg Address Flat. No. 22, Block-21, Ashika Ratna Complex, Vidhan Sabha Road,

Khamardih, Raipur – 492 001, Chattisgarh State.

2

Nature of Irregularities A bank (Bank-A) had sanctioned a Cash Credit limit of Rs. 9.00 mn on September 3, 2011 to the borrower firm. This was a takeover loan from another bank (Bank-B) in Raipur. The firm was a dealer of M/s Hindustan Unilever Ltd., and the limit was proposed to be secured by EM of two properties standing in the name of the proprietor of the firm, Shri Vijay Garg (these properties were already charged to Bank-B). Bank-A remitted a sum of Rs. 5.99 mn through RTGS to bank-B for credit to the CC account of M/s Gokul Mega Stores. Three letters addressed to Bank-B between October 11, 2011 to November 21, 2011 advising them about the remittance of funds for takeover of advance were given to the borrower for onward delivery to Bank-B. The borrower did not hand over these letters to Bank-B. Bank-A vide their letter dated December 22, 2011 again asked Bank-B to issue a 'No due Certificate' and handover the title deeds of properties mortgaged to them by the borrower. Bank-B in turn advised bank-A that they were not aware of the sanction of credit facilities by Bank-A to the borrower. RTGS received in usual course was credited to the account of the beneficiary and funds were withdrawn by the borrower. Borrower and his family members were not traceable. Thus the bank was defrauded to the tune of Rs. 7.92 mn.

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M/s Patra Enterprises Address Naya Bazar Balasore Orissa Proprietor Shri Bijan Kumar Patra Address Arad Bazar Balasore Orissa Rural Marketing Agent Shri R.S. Sharma Address M/s Utkal Syndicate, Ist floor, Brit Market Complex O. T.

Road, Station Square Balasore-756001

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Nature of Irregularities A bank had sanctioned an Overdraft limit of Rs. 1.60 mn to the borrower in August 2004 which was later enhanced to Rs. 2.30 mn. This facility was secured by mortgage of two properties. When the account turned NPA in December 2007, bank took action under SARFAESI Act. When possession of the first property was taken by the bank, father of the borrower, Shri Rajkishore Patra filed a civil suit claiming that the property possessed by the bank was never mortgaged to the bank. Investigations revealed that the property did not belong to the borrower and documents submitted were fake and fabricated. In case of the second property, it was revealed that the borrower had sold the property to a third party, one Shri Gopal Krushna Saw in October 2009. Investigations also revealed that the borrower had perpetrated the fraud in connivance with the Rural Marketing Agent (RMA) of the bank. Thus the bank was defrauded to the tune of Rs. 5.68 mn.

M/s Sai Creation Proprietor Shri Bhavesh Ratilal Ranpriya Address Flat No.1003, 10th floor Tapan Building, Rajhans Swapn

High Rise Sarthana, Jakat Naka Surat Machinery Supplier M/s Pal Impex Proprietor Shri Hiteshbhai Khimjibhai Virani Address A/4, Ishwar Palace, Near Dairy Donhira Baug Varacha

Road Surat-395006

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Nature of Irregularities A bank had sanctioned a term loan of Rs. 8.60 mn on September 8, 2011 to the borrower for purchase of imported water jet looms from China. Disbursement was made directly to the machinery supplier. The unit was visited during December 2011 and it was observed that some machines had arrived and were being installed. Since the account turned irregular in August 2012, unit was visited on August 29, 2012, but the visiting team could not locate the factory site. Promoter contacted the bank next day and informed that due to some problem with the landlord he had shifted the machines to a new location. The new site belonged to two other units financed by the bank. Borrower subsequently visited the branch in September, 2012 and informed that he had sold off the machines and till date failed to clear the dues. The bank officials visited the address of the machinery supplier (as per invoice) and found that no such firm existed at the given address. The bank, where the proceeds of the loan were credited, informed that the account in the name of M/s. Pal Impex, the purported supplier, was opened by one Shri H K Virani as proprietor. An amount of Rs. 1.62 mn was withdrawn in cash and Rs. 2.00 mn was credited to the account of the borrower and his wife. The Invoices submitted by the borrower were fictitious / fake. Thus the bank was defrauded to the tune of Rs. 7.88 mn

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M/s Shaan Foods Address Gudda Village, Rohtak Road Jhajjar District Haryana Proprietor Shri Ajay Nehra Address Flat No.106-107, No. 877, East Park Road Karol Bagh, New Delhi-110 008

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Nature of Irregularities A bank had sanctioned an overdraft limit of Rs. 7.50 mn to the firm on March 3, 2010. This facility was secured by EM of a property. When the account was classified as NPA on September 30, 2011, bank initiated recovery steps under SARFAESI Act. During investigations it came to light that the borrower had availed loans from two more banks against the security of the same property. A fresh Search Report indicated that the title deeds deposited with the bank were not genuine. Two other banks who had financed the borrower had lodged a complaint with the police in the matter. Thus the bank was defrauded to the tune of Rs. 7.50 mn.

Shri Patnam Amruth Prasad Address Plot No.58 & 59, Dhanlakshmi Society Road No.8, Mahendra Hills,

Secunderabad

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Nature of Irregularities A bank had sanctioned a loan against property of Rs. 11.00 mn to the borrower against a commercial property (shop) on August 23, 2008. During surprise asset verification in June 2012 by the bank it came to light that the borrower had entered into an agreement of sale, in respect of this property, on August 30, 2008 in favour of three persons. This was an effort by the borrower to sell the funded property without bank's permission. Thus the bank was defrauded to the tune of Rs. 6.12 mn.

Shri Pradeep Chintaman Ghose Address Flat No.1, Yashomati Society, Shakti Nagar, Hirawadi, Nashik

422003.

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Nature of Irregularities The party had submitted 33 housing loan proposals on behalf of various persons from February 24, 2010 to July 20, 2011 to an Urban Co-operative bank. These 33 borrowers had applied for housing loans/overdrafts against the security of mortgage of properties. All the loans were processed and disbursed after completing necessary documentation formalities. During routine scrutiny of overdue of branches, Zonal Office found that 19 accounts (out of 33 proposals given by Shri Pradeep Chintaman Ghose) required further probing. On enquiry with the Sub-Registrar Office about registration of “Sale Agreements” revealed that all the Government stamps put on Sale agreements were not done by them and were forged. The bank’s branches also informed that franking on “Sale Agreements” was not done by them and was forged. The bank was defrauded to the tune of Rs.21.31 mn in these 19 loan accounts.

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(1) M/s. Sidhhi Graphics Address 206, Kemp Plaza, Mind Space, Next to Evershine Mall,

Malad (West), Mumbai. Proprietor Shri. Sameer N Shah Address Excellency Tower, Flat No. 601, E-Wing Inderlok, Phase VI,

Bhayander (E), Thane. Per. Address 14 B, Ram Mandir Road, Vadaj, Ahmedabad, Gujarat. (2) M/s. Parmar Trading Company Address 206, Kemp Plaza, Mind Space, Next to Evershine Mall,

Malad (West), Mumbai. Proprietor Shri. Chandrakant Desai Address Vaishnav Heights, Flat No. 305, 3rd Floor Near Fatima

Church, Majiwada, Thane. (3) M/s. Madhav Enterprises Address 206, Kemp Plaza, Mind Space, Next to Evershine Mall,

Malad (West), Mumbai. Proprietor Shri. Nikhil Girish Patt Address Om Dwarakanath Co-op. Housing Society Ltd., Row House

No. 8, Sector 19/A, Plot No. 11, Nerul, Navi, Mumbai.

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Nature of Irregularities Shri. Himanshu R.Bhatt and Shri. Ilesh Shah, the representatives of M/s. Sidhhi Graphics, M/s. Parmar Trading Company and M/s. Madhav Enterprises approached a bank for negotiation of bills under ILCs opened by another bank. Branch received full set of bills/documents along with original ILCs for the purpose of negotiation. The branch had sent the original LCs for verification and also to ascertain the genuineness of the LCs to the LC opening bank by deputing an official alongwith pay orders towards applicable charges. An official of LC opening bank had apparently verified the signatures on the original LCs and thereafter, the bank’s official had submitted the original documents for acceptance to LC opening bank. On receipt of acceptance of documents by the drawee and due date confirmation advice from LC opening bank, four bills amounting to Rs. 101.80 mn were negotiated. After deducting the charges/interest, the funds were credited to the current accounts of M/s. Sidhhi Graphics& M/s. Parmar Trading Company and the amount was remitted through RTGS to a third bank for the credit of M/s. Madhav Enterprises (beneficiaries). On July 05, 2012, a representative of M/s. Madhav Enterprises approached the bank and stated that they were having one more LC of the above bank which they wanted to negotiate. In order to confirm the status of the LC, the bank contacted the above LC opening bank on July 05, 2012 over phone who denied having issued any such LC. The branch received a letter dated July 07, 2012 by fax on July 10, 2012 from LC opening bank denying having issued any such LCs and confirmation letters for payment of bills under LCs on due dates . Thus, the fraud amounting to Rs. 101.80 mn perpetrated by the outsiders on the bank came to light.

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(A) M/s VTR Freight Forwarders Proprietor Smt. Mane Amita Datta Address Bldg.-57/1854, Nehru Nagar, Gurukrupa Co-op Housing Society Ltd.

Kurla East, Mumbai – 400080. Associate Concerns

(1) M/s V.Tej Container Movers

Proprietor Smt. Lodaya Damayanti Valji Associate Concerns

(2) M/s Shree Jalaram Roadways

Proprietor Shri Lodaya Vijay Valji Associate Concerns

(3) M/s V.Tej Roadlines

Proprietor Shri Lodaya Tejas Valji Address D/2, Om Riddhi Sidhi Apartments, S.N.Road, Mulund (W), Mumbai-400 080 Associate Concerns

(4) M/s Tej Logistics

Proprietor Shri Maisheri Laherchand Laxmichand Address 701, Pranav Apartment, M.G.Road, Mulund (West), Mumbai-400 080. Nature of Irregularities The borrowers applied for loan for purchase of trailers to an urban co-operative bank submitting quotations. Bank sanctioned her term loan of Rs.5.92 mn on November 30, 2011 and disbursed the loan on December 17, 2011 routing the proceeds through the borrowers account. The borrower submitted the bills, Insurance policies and RTO Certification which were subsequently found to be fabricated. The borrower defrauded the bank to the tune of Rs.5.07 mn Again the same borrower applied for loan for purchase of trailers submitting quotations. The bank sanctioned her term loan of Rs.17.7 mn on November 30, 2011 and disbursed the loan on December 27, 2011 routing the proceeds through the borrower’s account. The borrower submitted the bills, Insurance policies and RTO Certification which were also found to be fabricated. The borrower defrauded the bank to the tune of Rs.15.05 mn. (B) M/s V.Tej Roadlines Proprietor Mr Lodaya Tejas Valji Address 67/3 C.K.Building, 178 Sant Tukaram Road, Mumbai-400 009.

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Nature of Irregularities The borrowers applied for loan for purchase of trailors to an urban co-operative bank submitting quotations. Bank sanctioned him term loan of Rs.20.00 mn on October 20, 2009 and disbursed the loan on October 26, 2009 routing the proceeds through the borrowers account. The borrower submitted the bills, Insurance policies and RTO Certification which subsequently found to be fabricated. The borrower defrauded the bank to the tune of Rs.7.56 mn. Again the same borrower applied for loan for expansion of business, by giving property as primary security & the above trailors as collateral security. The bank sanctioned him term loan of Rs.10.0 mn on November 04, 2010 and disbursed the loan routing the proceeds through the borrowers account. Since the collateral furnished by the borrower was not genuine the borrower defrauded the bank to the tune of Rs.8.09 mn.

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1) Shri Abhishek Kumar Sinha / Singh S/o Shri Brijnandan Prasad Address VII – Karampur, PO Bhandari, Nalanda District. 2) Shri Daroga Prasad Ray Proprietor M/s Kisan Tractors Address Kargil Chowk, NH – 31, Bihaesherif, Nalanda District.

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Nature of Irregularities The Branch Manager of a bank, in collusion with fraudsters, sanctioned seventy eight loans to various borrowers against securities like fixed deposits, NSCs, LIC policies which were, in some cases, fictitious and in other cases against the deposits of third parties without their knowledge and consent. The charge was created in the system by marking hold (lien) on the deposits of other customers; the proceeds of which were credited to unrelated accounts and then withdrawn. The loans were sanctioned for the benefit of Shri Abhishek Kumar Singh, Shri Daroga Prasad Ray and their family members. The loan proceeds were transferred to their accounts and from these accounts the funds were transferred to their accounts maintained with other banks through RTGS. Thus, the bank was defrauded to the tune of Rs. 20.13 mn.

M/s. Sal Marketing Address F-24, Kalkaji New Delhi – 110 019 Directors

1. Shri, Manoj Tandon 2. Smt. Manju Tandon

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Nature of Irregularities A bank had sanctioned an OCC limit of Rs. 4.00 mn & supply bills discounting facility of Rs. 23.60 mn to M/s. Sal Marketing, a partnership firm of Shri, Manoj Tandon and Smt. Manju Tandon in January 2006. The bank had made payment for the supply bills drawn on M/s. Hyundai Motors India Ltd and M/s. Maruti Udyog Ltd., which were discounted by the party on January 27, 2006. The bank had filed an application before DRT on July 09, 2008 for recovery of dues in which the above automobile companies were also incorporated in the suit and notices were issued to them. The above companies in their written statement before the DRT in response to OA filed by the bank against M/s Sal marketing in DRT Delhi, had affirmed that no items or spare parts had ever been ordered or purchased by them from M/s Sal Marketing. It, thus, emerged that bills/ delivery challans tendered to the bank for discounting were forged and fictitious. Thus, the bank was defrauded to the tune of Rs. 20.90 mn.

M/s. Bhole Flour Mills Address Mauza:Pachwa, Jasrana Road Jasrana Dist: Firozabad Uttar Pradesh Partners 1. Shri. Manoj Kumar S/o. Shri. Kamta Prasad Sharma Address C L Road, Himaunpur Tehsil Firozabad District, UP Partners 2. Shri. Vipin Kumar S/o. Shri. Sushil Babu

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Address Indra Nagar, Jalesar Road Firozabad District

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Partners 3. Shri. Brij Mohan Sharma S/o. Shri. Satya Narayaan Sharma Address Jain Nagar Firozabad District Guarantors 1) Shri. Ram Sevak S/o. Babu Ram Address Jay Nagar, Vibhav Nagar Firozabad District Guarantors 2) Smt. Rammurti Devi W/o. Late Rajan Lal Address Indira Nagar, Firozabad District Guarantors 3) Smt. Ram Beti W/o. Shri. Kamta Prasad Bashistha Address Katrai Jasrana, Firozabad District Guarantors 4) Shri. Ram Mohan S/o. Shri. Brij Mohan Address C L Road, Himayupur Firozabad Guarantors 5) Smt. Vineeta W/o. Shri. Krishna Pal singh Address C L Road, Himayupur Firozabad Guarantors 6) Shri Uma Shanker S/o. Shri. Shyam Lal Address Indira Nagar, Firozabad District Guarantors 7) Shri. Grijesh Dixit S/o. Shri. Avadh Bihari Lal Address Indira Nagar, Firozabad District Guarantors 8) Smt. Vimla Devi W/o. Shri. Jawahar Lal Address 39/3, Vibhav Nagar, Jalesar Road Firozabad Guarantors 9) Smt. Radha Rani W/o. Shri. Ramji Lal Sharma Address Shankerpuri, Shikohabad, UP Guarantors 10) Shri. Bhimsen S/o. Shri. Gangaram Address 22, Karbala, Firozabad Guarantors 11) Shri. Kamal singh S/o. Bheem Sen Address 22, Karbala, Firozabad

Nature of Irregularities A bank had sanctioned a Cash Credit limit of Rs. 6.00 mn and a term loan of Rs. 25.00 mn on June 15, 2009 to M/s. Bhole Flour Mills, Shikohabad (a partnership concern) for construction of factory building and installation / purchase of plant and machinery. The credit facilities were secured by equitable mortgage of factory land valued at Rs. 1.78 mn (purchase price Rs. 0.39 mn) as primary security and equitable mortgage of 10 properties in names of partners & guarantors, valued at Rs. 27.05 mn as collateral security. The accounts were classified as NPA on March 31, 2011. For recovery of dues, SARFAESI Action was initiated on May 13, 2011. During the course of SARFAESI action for symbolic possession of the properties against the borrowers / guarantors on September 26/27, 2011, it was observed that out of the 11 properties mortgaged to the bank, 4 properties were not traceable. Later on, from fresh NECs of these properties, it was found that the title deeds of 3 properties were fake and 2 properties were sold/occupied by other persons. Thus the bank was defrauded to the tune of Rs. 32.13 mn.

M/s Dhanunjaya Tug & Boats Partnership Firm Address 4-3-140/A, Yetimoga Kakinada 1. Shri Ponnada Satyanarayana MANAGING PARTNER, Address 47-3-140/A PINAPOTHUVARI ST. YETIMOGA ,Kakinada 2. Shri Malladi Yedukondalu PARTNER,

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Address 47-2-79 RAMALAYAM ST. YETIMOGA, Kakinada

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3. Smt. Ponnada Vinay Kumari (Partner) W/O SATYANARAYANA, Address 47-3-140/A PINAPOTHUVARI ST. YETIMOGA, Kakinada 4. Smt. Malladi Veera Veni (Partner) W/O SRI YEDUKONDALU, Address 47-2-79 RAMALAYAM ST. YETIMOGA, Kakinada

Nature of Irregularities The firm was sanctioned a loan of Rs. 19.00 mn by a bank on October 04, 2010 to purchase / procure a Tugboat. The borrower was initially repaying installments of the loan and interest thereof regularly. Since the borrower was not inclined to show the primary & collateral securities, the availability of the same came under suspicion. Upon inquiries by the bank, it was revealed that, M/s V.K Enterprises (prop: Sri Chitti Nageswara Rao), the fabricator/ contractor of the tugboat to whom funds were released was a non-existent firm. The address of the firm and their claim as specialist in boat & ship building and the letterheads/invoices, quotations were all fake. The KYC verification of Sri Chitti Nageswara Rao’s account at another bank, where an amount of Rs. 68 lakh, the part disbursal of the loan was credited, revealed that the VAT copy submitted by Sri Rao was forged. The same firm, M/s V.K Enterprises, with a different proprietor name i.e. Sri C Narayan Rao, had also supplied fake quotations and invoices to one M/s Harish Boat Suppliers, which had availed a loan against the same from the bank’s another branch. The technical evaluation report for the term loan, carried out by M/s Team Industrial Consultancy Services Pvt. Ltd., Visakhapatnam, had certified that M/s V.K. Enterprises, Kakinada is one of the qualified and experienced Tug manufacturers in the area. The bank had credited the remaining loan amount to the current account of the borrower which was allowed to be withdrawn. As per the terms of sanction, the boat has to be leased to M/s Esskay shipping (P) Ltd. Before release of the loan, a stipulation was made, for entering into a tripartite agreement between the bank, applicant and beneficiary (M/s Esskay Shipping P Ltd). This agreement was not obtained by the bank. On physical inspection of the Tugboat (primary security) it was found that a tugboat was in semi finished condition painted with hypothecation information mentioning the name of the bank but without mentioning name of the branch. Both the branches of the bank were claiming the "asset" (boat / Tug) to be financed by their branch. As per records of Traffic Manager Shipping & Traffic Manager Cargo, Visakhapatnam Port, there was no tug registered in the name of M/s V.K Enterprises. It was also reported that partners of M/s Dhanunjaya Tug Boats and M/s Harsh Boats Suppliers are from the same family and related to each other. Thus it was clear that the borrower had cheated both the branches by showing the same boat / Tug as security. The bank also could not identify collateral security of 2 Acres of land at Nidigutta village Visakhapatnam mortgaged by the borrower to the bank. The property could not be identified as details of boundaries were not mentioned in the sale deed. The revenue records did not indicate the ownership of the property of the mortgagor. In the title clearance report, the advocate had given opinion based on Xerox copies of title deeds. The certificate of inspection & valuation of the property, given by the valuer was also found to be false. It was later confirmed from a second legal opinion that the title deeds were not genuine thus invalidating the mortgage created in favour of the bank. Thus the bank was defrauded to the tune of Rs. 20.93 mn. .

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(1) M/s. Hi Grade Shoes (2) M/s. Hi Design Shoes Address Factory S.F. No. 33/3, NH-46, MC Road, Jameen Kulithigai, Vadapudupet, Ambur,

Vellore Partners 1. SHRI K S SIVAKUMAR S/o V. Shanmugam, Address 49/24 Gudiyattam Road, Pallikonda, Vellore Partners 2. SHRI S GANDHI B/o SHRI K S SIVAKUMAR

3. SMT S KANCHANA W/o SHRI K S SIVAKUMAR Address 49/24 Gudiyattam Road, Pallikonda, Vellore

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Nature of Irregularities M/s. Hi Grade Shoes & M/s. Hi Design Shoes were enjoying CC and TL limits from a bank which were increased from time to time on their request. Both the firms were also enjoying LC facilities which devolved on the bank upon non-payment by them and had to be debited to the existing CC limits with the bank. On January 02 2012, Shri K S Sivakumar Managing Partner informed the bank that the firm had incurred an estimated loss of Rs. 18.00 crore due to wastage of raw materials and bad debts etc. supported by an unaudited balance sheet. The bank then filed a DRT suit and obtained an injunction restraining the promoter from removing/alienating the movables and immovable in the factory premises. While the recovery process was on another Bangalore based leather/shoe exports company put its claim on the entire stock lying with both the firms as well as a part of the machinery there at and also claimed that they were operating the manufacturing facility of both the firms on a job work basis. This fact was not reported to the bank by the promoter and the limits were used as if the firm units were being operated on their own turnover, which established that statements of stocks and receivables being furnished by the borrower were false and fabricated. Thus the bank was defrauded to the tune of Rs.240 mn

M/s K P Packaging Ltd. Address Plot No. 32, Lane No. 13, Kamathipura, Opposite Vira Sadan,

Nagpada, Mumbai – 400 008. Directors

1) Shri Madhukant K Vira 2) Shri Ketan M Vira

Address 602, Ashish Tirupati Apartments, Bhulabhai Desai Marg, Mumbai – 400 008. Directors 3) Shri Ritesh Pravin Gala Address 109/B, Kashibhai Cottage, Worli Village, Opposite Kamat Stores, B D

Road, Mumbai – 400 013.

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Nature of Irregularities 1 On May 28, 2012 an Urban Co-op Bank discounted LC amounting to Rs. 25 mn purportedly issued by a schedule Commercial bank, Khar branch on receipt of their confirmation. On due date the payment was not made by the issuing bank on the pretext of the LC appears to have not been issued by their Khar branch. Thus the bank was defrauded to the tune of Rs.25 .00 mn. Nature of Irregularities 2 A bank had sanctioned two Inland Letter of Credit (ILCs) limits of Rs. 39.93 mn each to M/s K P Packaging Ltd. against three immovable properties valued at Rs. 88.00 mn. Since the payment was not received, the bank had carried out investigations in the matter and the officials of the bank visited LC issuing bank for reconfirming the genuineness of the signatures of the officials on the LC who informed that they had not signed the LC verification letter and that their branch was not authorised to confirm or verify the LC. Then, officials of the bank visited branch which was authorised to verify the LC who informed that signatures on the LC were not in their system and confirmed that they had not issued LCs from their branch. Further, the branch which purportedly issued LC had also denied having issued those LCs vide their letter dated October 19, 2012. The borrower had also availed bill discounting facility of Rs. 25.00 mn from another Urban Co-op bank but on due date, the bank which had allegedly issued the LC denied having issued any such LC which established that the LC presented in two cases were also fake and fabricated. Thus, the banks were defrauded to the tune of Rs. 104.87 mn

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M/s. Luxmi Overseas Address Shop No. 5, New Grain Market Indri, Karnal District Haryana. Proprietor Shri. Mukesh Kumar House No. 62, Ward No. 2 Indri, Haryana – 132 041.

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Nature of Irregularities In November 2005, a bank had sanctioned an Over Draft (OD) facility to M/s. Luxmi Overseas, Karnal, Haryana under Agri Credit Line (ACL) against four properties owned by the borrower, Shri. Mukesh Kumar. The borrower serviced interest regularly after which certain irregularities in repayment were observed. Later, in March 2007 the account was classified as a Non Performing Asset (NPA).Despite regular follow up by the bank, there was no response from the borrower, the bank had served a Loan Recall Notice (LRN) in September 2007 and sent a notice under SARFAESI Act on January 4, 2008.Subsequently, the bank moved an application to the Tehsildar in respect of the property, as most part of the property was agricultural land with no clear demarcations, which hampered the process of recovery. There were small shops constructed on a part of the vacant land measuring around 693 square feet. A proposal was made to the revenue officials to declare the part of land as commercial land wherein shops were constructed. The proposal was accepted by the revenue officials in June 2011 following which the bank published a sale cum auction notice for their possessed property. To this advertisement, another bank put a stay on the auction as the same property was mortgaged to that bank by the borrower while availing a facility in September 2007. Market feedback indicated that the same land was also sold to a third party before availing the facility from the bank. Investigations confirmed that the borrower had submitted fabricated land documents to the bank claiming to be the sole owner of the properties mortgaged. The jamabandhi was forged and copies of mutation and jamabandhi did not match with the records of the Revenue Record Office. Thus, the bank was defrauded to the tune of Rs. 47.80 mn

M/s. Swastik Enterprises Address 47, IV Floor, Rishikesh Apartment 75/38 G N Chetty Street T Nagar,

Chennai - 600 017 Proprietor Shri. Samraj S/o. Shri. Shreyan Kumar (Srayankumar) Address Flat No. 1, D-204, Arunodaya Apartment Choolimedu High Road

Choolimedu, Chennai

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Nature of Irregularities A bank had taken over the FB limits of the borrowers at of Rs. 90.00 mn from another bank by sanctioning FB Limits totaling Rs. 115.00 mn (OCC limit of Rs. 80.00 mn + FDB of Rs. 30.00 mn+ TL limit of Rs. 3.50 mn) in March 2010.Following the account turning NPA as on March 31, 2011, an investigation was carried out which revealed that three (3) FBE's discounted amounting to Rs.29.74 mn were delinked due to non-realization of export bills. The exports were consigned in favour of M/s KPNR Steels and Metals, address of which was found to be non-existent. Heavy cash withdrawals were made in the OCC account and the account stood overdrawn on several occasions. Transactions were not routed through the account. Investigation further revealed that two properties stipulated as collateral security were disposed off prior to take over of limits from other bank and two properties were standing in the name of the father of the proprietor who was the guarantor to the limits had expired, before disbursement of the loan. The borrower had concealed the fact that the properties standing in the name of his father had already been disposed off. Thus, the bank was defrauded to the tune of Rs.114.08 mn

12

M/s P C Enterprises Proprietor Shri Prashant Kumar Singh Addresses 34, Balaji Nagar, Chotta Govind Pur, Jamshedpur 831015

18

Nature of Irregularities A combined CC(H) & CC(Book Debt) limit of Rs.17.5 mn was sanctioned to the borrower firm by a bank for trading in iron ore & fines against the EM of 4 IPs (Open Land) situated at Mouza Asabani, Thana 325, PS - Chandil, Distt. Sareikela, Kharswan, having market value of Rs. 18.815 mn. The conduct of account was not satisfactory since inception and the borrower stopped operations in the account since July 19, .2011. However, as a result of continuous follow up, borrower submitted a cheque for Rs. 1.268 mn, drawn on M/s RK Enterprises which was dishonored due to insufficiency of funds. The bank had issued a legal notice to the borrower in this regard. The party submitted list of debtors and stock statement. It was observed that borrower was avoiding verification of stocks lying open at distant locations (Haldia & Jamda in West Bengal), as there was no proper identity of stocks. Party did not cooperate indicating non availability of stocks and misutilization of funds. During follow up with debtors, one of the debtors M/s Ambo Exports (P) Ltd. Against whom a debt of Rs. 4.28 mn was shown, informed that full and final payment had been made to M/s PC Enterprises upto March 31,2011. Thus, the list of debtors submitted by the borrower proved to be fake and fabricated one. It was also gathered that the borrower & his brother Pankaj Kumar were availing credit facilities in the name of M/s PC Enterprises from another bank depositing the same title deeds. Thus the bank was defrauded to the tune of Rs.17.50 mn.

M/s Pushap Agro Tech Pvt. Ltd. Address Hayat Nagar, Hardochhani Road Gurdaspur Punjab – 143 521. Directors 1. Shri. Rachit Bansal S/o. Kamal Bansal Address 443, Sangal Pura Road Gurdaspur. Directors 2. Shri. Kamal Bansal S/o. Shri. Parkash Chand Address House no. 247, Ward No. 9 Sangal Pura Road Gurdaspur.

19

Nature of Irregularities M/s. Pushap Agro Tech Pvt. Ltd dealing in rice shelling activities was sanctioned various credit facilities on April 10, 2008 with total exposure of Rs. 45.10 mn by a bank which were enhanced to Rs. 89.00 mn. The above facilities were further enhanced on November 24, 2009 to Rs. 128.50 mn. It was observed during investigation that the borrower firm had illegally disposed off the whole stock hypothecated with bank and the borrowers were absconding. An FIR had also been lodged by PUNSUP (Punjab State Civil Supplies Corp. Ltd) on August 23, 2011 against the directors/partners of the firm for embezzlement of their (PUNSUP) paddy/rice stock worth Rs.148.60 mn which PUNSUP had given to the firm for shelling. The PUNSUP had also written letter dated January 02, 2012 to the bank regarding their claim on the stock lying with the firm. Thus, the bank was defrauded to the tune of Rs. 110.70 mn.

13

M/s Riya Trading Proprietor Shri Bimal Kundu Address 1 Shyam Shree Market, 48, Sir Hariram Goneka Street, Kolkata – 700 007 Address 2 27/B, South End Park, Kolkata 700 0029.

20

Nature of Irregularities A bank had sanctioned a cash credit limit of Rs..9.5 mn to M/s. Riya Trading (Prop. Shri Bimal Kundu), a firm engaged in trading of garments. Collateral security of landed property situated at Plot No.27 RS No.151 worth Rs..12.471 mn belonging to the proprietor and guarantee of Smt. Krishna Kundu, wife of the proprietor was stipulated. Since the turnover in the account was very poor, the account was categorized as NPA on April 16, .2011 and notice under SARFAESI Act was issued on October 10, 2011. When branch initiated steps for sale of the property, it came to the notice of the branch that the property was mortgaged to two other banks towards credit facilities availed from them. Thus the bank was defrauded to the tune of Rs. 11.01 mn.

M/s Sarvottam Overseas Pvt. Ltd. Registered Office

C-184, III Floor, Rastogi Chamber Madhuban, Vikas Marg, Delhi - 110 096.

Directors i. Shri Varun Sahgal S/o. Shri. Sarvottam Mukesh Sahgal Address Flat No. 660, Sector-29 NOIDA, UP – 201 301 Directors ii. Shri. Sarvottam Mukesh Sahgal Address C-184, III Floor, Rastogi Chamber Madhban, Vikas Marg, Delhi - 110 096 Directors iii. Shri R Kannan Address 4- Solai Iyer Street, International Trade Tower Nehru Place, New Delhi Guarantor Smt. Usha Johri Address C1/125 , Janakpuri, New –Delhi. Associate concerns

(1) M/s. Jemini Exports

Address C-184, III Floor, Rastogi Chamber Madhban, Vikas Marg, Delhi - 110 096 Directors

1. Shri. Sarvottam Mukesh Sahgal 2. Shri Varun Sahgal

Associate concerns

(2) M/s. Sarvottam Metals Pvt. Ltd.

Address C-184, III Floor, Rastogi Chamber Madhban, Vikas Marg, Delhi - 110 096 Directors 1. Shri Varun Sahgal Address Flat No. 660, Sector-29 NOIDA, UP – 201 301. Directors 2. Shri. Raj Kumar Address 246-1, Ganesh Avenue 8th Cross Street. Porur, Chennai – 6000 116. Directors 3. Shri. Pattabhiraman

21

Address 34, Sri Chakra Nagar Dr. Murthy Road Kumbakonam – 612 001.

14

Nature of Irregularities

The company was sanctioned working capital limits of Rs. 45.00 mn on January 22, 2008 by a bank. The account was reviewed with enhancement in the limit from existing Rs 45.00 mn to Aggregate limit of Rs 80.00 mn in July 2009. During the enhancement review, the existing collateral securities were substituted by the new free hold property at in the name of new guarantor Smt. Usha Johri valued at Rs. 87.00 mn and the mortgage was created on August 04, 2009. In March 2011, the police advised the bank that a complaint by M/s Dev Kripa Developers Pvt. Ltd, Janakpuri, New -Delhi, was registered under Case No. FIR-242/10 u/s 420/34 of IPC against Dr. Yashi Johri and Smt. Usha Johri from whom the developers purchased the property in the year 2008 and whereas said property was mortgaged to bank in the year 2009. It was reported that Smt. Usha Johri and her son Shri. Yash Johari were arrested by the police. The police also informed the bank that a case was filed before DRT under SA 153 of 2010 against Smt. Usha Johri for Rs. 20.00 mn by another bank. Meanwhile, the company inducted one Shri. R. Kannan as director / guarantor, who was reportedly the owner of an open plot of land in Tamil Nadu. Following the account turning NPA on March 31, 2011 due to devolvement of LCs and overdue EPC, the bank sought fresh report from another panel advocate Shri who pointed out in the report dated March 31, 2011 that original conveyance deed was not presented for registration on July 13, 1993 (the date mentioned on the conveyance deed). He further informed that there were many requests from the advocates (during period 2009-2011) for certified copy of conveyance deed which were not provided since no such document existed with the Sub-Registrar. The investigation by the bank revealed that the address of the guarantor Shri. R Kannan, was fake as the street name mentioned in the address i.e. Solai Iyer Street did not exist in Chrompet Area of Chennai. Copies of the ration card of Shri. Kannan and Election Card which were submitted to the bank were forged and fabricated. The new address furnished by Shri. Kannan was also found to be wrong. As regards the status of immovable property at Pallavpuram, Tamil Nadu, only a part of said property belonged to Shri. Radhakrishnan Iyer (Father of Shri. Kannan) and remaining part of the property belonged to other persons. Thus, the bank was defrauded to the tune of Rs. 80.00 mn.

M/s. Sri Lakshmi Ganapathi Modern Rice Mill (SLGMRM) Address 16/114, Denduluru Mandal West Godavari, Andhra Pradesh. Partners

1. Shri. Budharaju Venu Gopala Krishnam Raju (MD) 2. Smt. B Padmavathi 3. Shri. Ravindra Verma 4. Smt. B Radha

Address Door No:24-26-7B, Yerrapragada Street Ashok Nagar, Eluru, West Godavari Dist.

Associate concern

1) M/s. Naga Hanuman Agro Oils Pvt. Ltd.

Address 7B/15/45, Maruthi Nilayam, Vuppuvari Veedhi, Eluru - 534 001. Director Shri. BVG Krishnam Raju

22

Address 1/92, Pothunuru PO, Denduluru Mandal West Godavari, Andhra Pradesh.

15

Nature of Irregularities

A bank had sanctioned an OCC limit of Rs. 25.0 mn and two term loans of Rs. 16.50 mn and two STPCC limit of Rs. 4.90 mn to Shri. B.V.G.Krishna Raju, Managing Partner of the above firm and Rs. 16.00 mn to Shri. Ravidra Verma (son of Shri. B.V.G.Krishna Raju). The activity of rice mill came to a halt during last quarter of 2010 and the account turned NPA in March 2011. During the course of obtaining ECs for the properties in March 2011, the bank came to know the alienation of the three (3) EM properties prior to creation of mortgage with the bank. 2.08 cents of land valued at Rs. 1.04 mn and 1.43 cents valued at Rs. 0.7.2 mn belonging to Sri BVG. Krishna Raju, alienated in favour of M/s. Naga Hanuman Solvent Oils Pvt. Ltd. Further, 5.00 cents (out of 5.82 cents) of land valued at Rs. 3.00 mn belonging to Shri Raju was also alienated to Shri Sankar Gunin. Subsequently, while taking recovery action, the bank detected alienation of three (3) more properties prior to creation of mortgage and one more of property of 70 acres of fish tank could not be attached due to statutory bar under Kolleru Wild Life Protection Act. Thus, the bank was defrauded to the tune of Rs. 48.39 mn.

M/s Victoria Agro Food Processing Pvt. Ltd. Address Nilangekar Bungalow, LIC Colony Dyaneshwar Road Latur – 413 512. Directors

1. Shri. Ashish Marwaha 2. Smt. Prajakta Marwaha

Address A-295, Sarita Vihar New Delhi Directors 3. Shri. Mahendra Jajoo

4. Shri. Varun Jajoo Address W-10/14, Western Avenue Sainik Farm New Delhi.

23

Nature of Irregularities A bank had sanctioned a term loan of Rs.167.70 mn and Cash Credit limit of Rs.32.30 mn on June 20, 2009 to the borrower under consortium with another bank for setting up grain based distillery for manufacturing of extra neutral alcohol for rectified spirit/absolute alcohol. The account became irregular due to nonpayment of installments and interest and the account was classified as NPA in July 2011. There was no stock at the unit and only maintenance work was being carried out at the time of inspection on August 02, 2011. When the company failed to regularize the account, action was initiated under SARFAESIA and demand notice was issued on September 12, 2011. The possession notice was issued on December 30, 2011, but the borrower refused to hand over the possession of secured assets. On February 02, 2012, an application was filed before the District Magistrate seeking assistance in taking possession of the secured assets. The hearing was adjourned from time to time on the request of the borrower on the pretext of settlement and the matter was finally listed for hearing on July 07, 2012. On the date of hearing, advocate for the borrower submitted a copy of the certified copy dated July 03, 2012 obtained from the Sub-Registrar in respect of the mortgage deed dated July 30, 2009 in favour of the bank and claimed that the property in question was not mortgaged to the bank. At the time of availment of credit facilities, the simple mortgage was executed on July 30, 2009 since the computerization was under process at Sub-Registrar's Office who, then, provided certified copy stating that original would be given after computerization. The officials of the bank visited the Sub Registrar's Office and scrutinized the mortgage deed at the Sub Registrar's Office and found anomalies in some of the pages in number, rubber stamp and seal of the Sub-Registrar. Subsequently, the branch obtained latest 7/12 extracts and property extracts from revenue authorities and Municipal Corporation on November 22, 2012 and compared with the 7/12 extracts and property card submitted by the borrower to the bank. It was, then, found that there was no noting of charges in favour of the bank in the above extracts and in the property card, charges of a Co-operative Bank were mentioned. Thus, the borrower had tampered with the original mortgage deed by replacing the relevant pages and inserted the details of another property having lesser value in the records of Sub-Registrar's office and also submitted fabricated 7/12 and property extracts and cheated the bank. Thus, the bank was defrauded to the tune of Rs. 205.06 mn.

16

M/s Subramanya Enterprises Proprietor Shri K N B Sharma Address 24, 3rd Cross, Vidyaranyapura Bangalore-560 092

24

Nature of Irregularities A bank had sanctioned various credit facilities to the borrower in the year 2011 aggregating to an amount of Rs. 5.02 mn. These facilities were collaterally secured by EM of a property owned by one Smt. Sumathi. The accounts turned irregular within a year and bank served a notice under SARFAESI Act 2002 to Smt. Sumathi for recovery of dues of the bank. In response to this notice the bank received letter from Smt. Sumathi claiming to be the owner of the property mortgaged to the bank and that she had neither stood as guarantor nor mortgaged any property to the bank. She also informed the bank that the said property was sold by her on September 12, 2011. The present whereabouts of both the borrower and the person who had impersonated as Smt. Sumathi are not known. Thus the bank was defrauded to the tune of Rs. 5.16 mn.

M/s SRM Tex Director / Proprietor details Shri S. Ramanathan Address 112C, SABARI Garden, Annupparalayam, Pudur 641 652

25

Nature of Irregularities In May, the borrower was sanctioned a term loan of Rs. 2.46 mn by the bank for construction of factory building and also Packing Credit in Foreign Currency amounting to Rs.. 4.00 mn and term loan for import / purchase of machineries, DG sets for Rs. 3.00 mn. The limits were collaterally secured by immovable properties comprising of land of 34.135 cents with RCC factory building in the name of the proprietor valued at Rs.11.00 mn. The account was classified as NPA on March 31, 2011. During recovery action under SARFAESI when the bank took physical possession of the property on March 09, 2012 it came to light that the machineries were removed by the borrower without the knowledge of the bank. Thus the bank was defrauded by the borrower to the tune of Rs. 10.67 mn.

M/s. DVP Exim Pvt. Ltd. Address 21, FD Block, DDA Market, Pitampura New Delhi – 110 088. Directors 1. Shri. Ramesh Kumar Address B-747, Shushat Loak 1 Gurgaon, Haryana Directors 2. Shri. Deepak Pahwa Address QD 68, Pitampura, New Delhi – 110 088. Associate concern

M/s. RGR Impex Pvt. Ltd.

26

Address E-513, Gupta Plaza, III Floor, Sector 7 Near Ramphal Chowk Dwaraka New Delhi- 110 075.

17

Directors i. Shri. Gurkirat Singh Address Village Khaper Kheri, PO Chhehera District Amritsar Punjab. Directors ii. Shri. Ramesh Kumar Address B-747, Shushat Loak 1 Gurgaon, Haryana Directors iii. Shri. Deepak Pahwa Address QD 68, Pitampura, New Delhi – 110 088.

Nature of Irregularities A bank had sanctioned a term loan of Rs.1.20 million, PC limit of Rs. 45.00 million FBPF/UBDF of Rs. 45.00 million and Sub-Limit (LCI /LCF) of Rs. 10.00 million to M/s.DVP Exim Pvt. Ltd. The bank had also sanctioned Cash Credit facility of Rs.80.00 million (with sub-limits under LC/BC/LG) and Bill discounting facility to M/s. RGR Impex Pvt. Ltd., an associate of M/s. DVP Exim Pvt. Ltd. on October 08, 2011.There were 15 export bills overdue amounting to Rs.209.10 million, a major portion of which related to Bills under LCs opened by a foreign bank on behalf of M/s. Finance Asia Ltd. wherein the LCs were advised through an Indian bank. Two bills for Rs.25.77 million were due for payment since April 2012.It was observed during preliminary investigation that the LC opening bank was not responding to various reminders sent by the bank through the LC advising bank. On August 31, 2012, the LC opening bank replied to LC advising bank that their party was not forthcoming for payment on the due date as per acceptance given to the bank. The bank pointed out to the LC opening bank that they were liable for making payment of the L/C amount on the due date even if the applicant was not making payment. Further, seven more bills drawn under LCs, which were opened by the same bank on behalf of Finance Asia Ltd., were also outstanding to the extent of Rs.114.23 million where the due dates were over and the bills were crystallized. The bank conducted godown inspection on September 06, 2012 and no stocks were found. However, the two directors of the company promised to provide funds by September 08, 2012, they did not turn up and subsequent personal meetings with one of the directors by branch officials did not yield the desired result. The account of the associate viz. M/s.RGR Impex Pvt. Ltd was also irregular with outstanding exposure of Rs.99.76 million including Rs.17.20 million overdue since May21, 2012. The drawees of the bills were Finance Asia Ltd. and the LC was issued by the same foreign bank (as in the case of M/s.DVP Exim Pvt. Ltd.).It was observed that the borrowers had filed a complaint with the police against some overseas suppliers for non-supply of goods for which advance payment was made. The bank received a letter dated June 14, 2012 from the police asking the branch to provide details of the complaint made by M/s.RGR Impex Pvt. Ltd against the overseas supplier. The branch also received a letter dated May 13, 2012 from Office of the Commissioner of Customs(Preventive) asking for information in respect of M/s.RGR Impex as they filed a case against the overseas supplier since they made advance payment for import of electronic goods, but the overseas suppliers failed to supply the goods. Thus, the bank was defrauded to the tune of Rs. 358.80 mn.

18

M/s D.P.Mundhara & Co Address Above Kubera Hotel Station Road, Vasai West, Thane – 401 303. Director Shri Gopikishan C.Mundhara Address Flat No.403, Vrindavan Town CHSL Evershine City, Vasai East, Thane. Associate Concern Director details M/s Maheshwari Saroj Steels Address Flat No.402, fourth floor, A wing, Dattatray Tower Phase II, C.H.S.L.

Dewan Kuldeep Singh Nagar, Evershine City, Vasai.

27

Nature of Irregularities A bank sanctioned Cash Credit limit of Rs. 4.90mn on July 13, 2009 to the borrower, engaged in trading of Iron and Steel and obtained collateral security of shop and flat no.401 in the building of Shree Chintamani Co-Op Housing Society Ltd, Dombivali (West) valued Rs. 5.60 mn. Equitable mortgage of the properties was created on August 11, .2009.Cash Credit limit was enhanced to Rs. 9.00 mn while reviewing the account on July 08, .2010 after obtaining another flat no.203 in the same Chintamani Society valuing Rs.. 3.69 mn (Total value of properties Rs..9.29 mn). Again on September 16, 2011, limit was enhanced from Rs..9.00 mn to Rs.14.50 mn and taken additional security of flat no.403, Vrindavan Tower at Vasai (east) valued Rs.3.00 mn (Total value of our properties Rs. 12.092 mn) Extension of equitable mortgage has been created on July16, 2010 and September 27, 2011. The operations in the account were satisfactory till December - 2011.Subsequently on March 02, 2012, Income Tax attachment order was received in the account and thereafter there were no operations in the account. The borrower failed to regularise the account despite follow up by the branch officials. The account was then classified as NPA on September 30, 2012 due to overdues in the account. Notice under SARFAESI was issued to the borrower on October 08, .2012.During the inspection of the properties by the branch officials, it was found that the three mortgaged properties in Chintamani Society were occupied by someone other than the borrower and the Secretary informed that the borrower is not the member of the society. Subsequently the branch referred the documents for verification to another panel advocate M/s Interjuris for ascertaining the genuineness of the title deeds. The advocate in their opinion report stated that out of the four properties, title deeds of three properties(I shop and 2 flats) in Chintamani Society, Dombivali (West) had anomalies and reported that the title deeds were sham and fictitious. When the officials contacted the borrower, he admitted about the forged properties. Thus the borrower had cheated the bank by submitting fabricated title deeds for mortgage to the tune of Rs. 14.50 mn.

M/s Need Dairy Farms Pvt Ltd Office 79/2, Latouch Road, Kanpur (UP) Factory Arazi No.27/M, Khata No.361, Gram – Baghara, Tech & Dist: Kanpur Nagar Directors

1. Shri Rafat Bashir 2. Shri Arshad Bashir

Address 231D, Defence Colony, Jajmau, Kanpur Associate Concern Director / Proprietor details 1) M/s Creazy Wear Inc (Director Shri Rafat Bashir) Address 3rd Floor, Hamraz Complex, Cooper Ganj, Kanpur (UP) 2) M/s Hoesens Export (Director Shri Arshad Bashir)

28

Address 231D, Defence Colony, Jajmau, Kanpur

19

Nature of Irregularities

In April 2010, a bank had granted agriculture term loan for Rs. 13.2 mn for the purpose of construction of building on the existing land in the name of Smt. Sufia Arshad w/o the borrower, .purchase of machinery/equipment at an estimated cost of Rs..3.6 mn and purchase of 200 buffaloes at an estimated cost of Rs..9.0 mn. Agriculture Cash Credit limits (AGCC) for Rs.1.0 mn was also sanctioned for the purpose of working capital requirement. The borrower company subsequently informed the bank that as miscreants restricted movement of buffaloes in the area, they had shifted all the buffaloes to 11 different places. Subsequently the company also shifted the machinery/equipments without notifying the bank. Moreover, during investigation, one of the directors of the company failed to show neither the assets supposed to have been shifted to different locations nor committed for repayment of the loan. Thus the borrower company had cheated / misappropriated the amount by defrauding the bank to the tune of Rs. 13.089 mn.

Shri Sardar Harpal Ahuja Address M-65, Guru Harkishan Nagar, Paschim Vihar, New Delhi 110084

29

Nature of Irregularities The liability of Rs. 8.74 mn under the home loan of the borrower was taken over by the bank in August 2006 from another bank besides sanctioning a topup loan of Rs. 4.00 mn. The security for the loans was a two storeyed residential building. The borrowers had a valid and marketable title to the property. On account of default, the accounts were classified as NPA in June 2009 and recovery action was initiated under SARFAESI Act. While taking symbolic possession of the property, it was learnt that the property was set to be auctioned by another bank and another bank raised objection on the ground that the borrower had created a valid equitable mortgage of the property in favour of that bank. Further, it was found that the borrower had sold the first floor of the property and it became evident that the title deed deposited by the borrower with the bank was forged and fabricated. He in fact was not even the actual owner of the property. Thus the borrower had defrauded the bank to the tune of Rs. 18.4 mn.

Sri Vasavi Cold Storage Address Pusapadu Adda Road, Inkollu Mandal, Prakasam District, Andhra Pradesh. Directors

1. Shri Gurram Brahmanandam 2. Shri Gurram Venkata Rajyam 3. Shri Gurram Venkata Naga Siva Prasad 4. Shri Gurram Sujatha

Address Idupulapadu, Inkollu Mandal, Prakasam District, Andhra Pradesh.

30

Nature of Irregularities A bank branch had extended 421 pledge loan accounts which were outstanding with a balance of Rs..94.6 mn as on September 21, 2012. All these loans were arranged against stock of black gram, maize, red chillies and bengal gram preserved in five different cold storages nearer to the said branch .Following news of frauds in the stock held by cold storages in respect of pledge loans in another branch of the same bank, during the month of October 2012, Inspecting Officials of the bank conducted verification of stock held as security for the said pledge loans and it was observed that no stock was available in case of 66 Pledge Loan Accounts. Thus the borrower has committed breach of trust, played fraud and intentionally cheated the bank to the tune of Rs.24.47 mn.

20

M/s Western Garments Address Masjid Para Road, Santoshpur, P.O.Mahesh Tala, Kolkata 700 141 Shri Jahangir Mondal Address Memanpur Vivekanandapaaly, Maheshtala, Kolkata 700 139

31

Nature of Irregularities On March 2010, a bank had sanctioned Cash Credit limit of Rs..1.00 mn and Bank Guarantee limit of Rs. 4.00 mn to a firm engaged in manufacturing of readymade garments March 2010. Later in November 2010, the cash credit limit was enhanced to Rs..7.00 mn by converting the BG limit as fund based which was enhanced to Rs. 12.50 mn in December 2011. Collateral security of 4 landed properties in the names of the borrowers valued Rs...11.20 mn and plant & machinery valued Rs..1.412 mn was stipulated besides primary security of hypothecation of stock of cloths, readymade garments, stores, spares and book-debts. Legal opinion furnished by the panel advocate before sanction of limits stated that the owners of the properties had clear and marketable title and can create a valid mortgage in favor of the bank. The entire limit of Rs..12.50 mn was availed by the borrower firm and funds were remitted to another firm, whose account was maintained at another bank, for which also the proprietor was same. During investigation, after the account turned NPA in June 2012, it was observed that financial statements furnished by the firm at the time of sanction / enhancement of limits were fabricated as the Chartered Accountants, who are said to have certified the financial statements stated that they had never certified the financial statements of the firm. Thus, the borrower siphoned-off the funds and cheated the bank to the tune of Rs. 16.22 mn by diverting the funds.

M/s Karishma Enterprises Address HO-21 &22, Alankarplaza, 2nd Floor, A-10, Centralspine,

Vidyadharnagar, Jaipur 302021. Proprietor Shri Ajay Kumar Luharwula Address 9F-2, G683, V.K.I Area, Jaipur, Address 9/12, Lal Bazar Street, Mercantile Building, Block ‘E’, Kolkatta

32

Nature of Irregularities In September 2007, a bank sanctioned cash credit limit of Rs.15.00 mn to the borrower for the trading in metal scrap, bottles and corrugated boxes. Since beginning the operation & conduct of the account was not satisfactory and account turned NPA in January 2010 The bank initiated action under SARFAESI Act and it transpired that the proprietor had sold the entire property to different persons. The son of the proprietor, who got the title of the property by way of gift deed executed by his father had mortgaged the property to the bank. Advocate report obtained subsequently revealed that mortgaged property was already sold to different persons by the son of proprietor before creation of mortgage. This was possible only because of the branch failed to collect the chain of documents subsequent to the creation of gift deed. Thus the bank was defrauded by the borrower to the tune of Rs.14.4 mn.

21

M/s Laxmi Mill Address Plot No. 1130, Nehru Bagh, Magarwara, Unnao, Uttar Pradesh. Proprietor Smt. Beena Tiwari Address Flat No. 303, Plot No. 670, Vinobha Nagar, Kanpur Uttar Pradesh.

33

Nature of Irregularities A bank had sanctioned a term loan of Rs. 2.40 mn and Cash Credit limit of Rs. 4.05 mn on May 2, 2011 to the firm for installation of edible oil mill. The firm was given term loan facility for purchase of machinery and CC limit for working capital requirements. Funds disbursed under term loan were not utilized for the purchase of plant and machinery. The quotations, bills and advance receipts pertaining to the machinery were found fake. These documents were issued by M/s Vinayak Enterprises, 2/66, Sector – H, LDA Colony, Lucknow. Thus the bank was defrauded to the tune of Rs. 6.18 mn.

M/s Mahalaxmi Syndicate Address RZ-87, A – Block, Gali No. 2, Dabri Extension, New Delhi – 110045. Proprietor Shri Ram Saran Address F-25, Mahavir Enclave, Part III, Gali No. 80, Uttam Nagar, Delhi – 59.

34

Nature of Irregularities A bank had sanctioned a CC limit of Rs. 10.00 mn to the firm in the year 2008. The account turned NPA and action under SARFAESI Act was initiated and a suit was filed for recovery in DRT. A notice appeared in the Times of India on July 9, 2012 wherein the property mortgaged to the bank was put to auction by another bank in respect of finance granted by them to M/s Nikita Exim. Enquiries with the other bank revealed that they had filed a case with CBI and one of the guarantors was under detention. This is a case of defrauding the bank by creating multiple title deeds of the property and availing limits from different institutions. Thus the bank was defrauded to the tune of Rs. 5.50 mn.

M/s Rohini Mobiles Proprietor Shri Sanjay Kumar Sah Address Tower Chowk, Deoghar, Jharkhand.

35

Nature of Irregularities A bank had sanctioned a Cash Credit limit of Rs. 6.00 mn to the borrower on December 7, 2009. This was a takeover loan from another bank and the loan facility was secured by EM of three properties owned by the guarantors. When the account became irregular and investigations were done, it was revealed that one of the mortgaged properties had been sold by the mortgager prior to the creation of mortgage with the bank. Thus the bank was defrauded to the tune of Rs. 6.86 mn.

22

1) Smt. Swati Shukla Address No. 402, Coronation Apartment, Bijwa Estate, 28, Park Road,

Lucknow – 226016. 2) Shri Rahul Mehrotra Address House No. 5/265, Vikram Khand, Gomti Nagar, Lucknow, Uttar Pradesh. 3) Shri Vishal Srivatava Address House No. 89, Jagriti Vihar, Kalyanpur, Lucknow, Uttar Pradesh. 4) Shri Atul Shukla Address 133, Shekhupura Aliganj, Lucknow, Uttar Pradesh.

36

Nature of Irregularities A bank had sanctioned Suvidha Loan of Rs. 2.50 mn to Smt. Swati Shukla on November 4, 2009 against EM of two properties standing in the name of Shri Ashish Shukla, husband of the borrower (since deceased). Subsequently bank sanctioned three credit facilities to different borrowers (with no direct relationship to the first borrower / guarantor) against extension of mortgage of the above properties. At the time of taking second legal opinion, search at the SRO revealed that the documents submitted by the borrower / guarantor were fabricated and no property existed under these registration numbers. Thus the bank was defrauded to the tune of Rs. 6.03 mn.

M/s Vaishali Transport Limited Proprietor Smt. Renu Jaiswal Address G-68, Ground Floor, Lajpat Nagar II, Delhi – 110 024.

37

Nature of Irregularities A bank had sanctioned six vehicle loans amounting to Rs. 6.39 mn to the borrower firm on August 23, 2010. When the account became delinquent and investigations were done, it came to light that the borrower had submitted fabricated IT returns for the year 2009-10 for availing the loan. The customer was not traceable at the address furnished while availing the loan. Thus the bank was defrauded to the tune of Rs. 6.17 mn.

M/s Yash Distributors Proprietor Shri Pritam Hore Address 176, Sankalp Bungalow Shikshak Colony, Bhekari Nagar Farsungi, Pune

38

Nature of Irregularities A bank had sanctioned various credit facilities in the year 2009 amounting to Rs. 9.50 mn to the firm which was a wholesale distributor of ITC products in Pune area. These facilities were collaterally secured by mortgage of eight properties owned by the proprietor of the firm. When the account became irregular, bank took action under SARFAESI Act. When second legal opinion was obtained in respect of the properties mortgaged to the bank by the borrower, it was found that documents relating to three properties were not genuine and the borrower had concealed prior charges in respect of some other properties. Thus the bank was defrauded to the tune of Rs. 9.50 mn.

23

1.Ms. Kathija Thaseen 2.Mohammed Aneesuddin Address #6-1-67/2, Ground Floor, Sangam Building, Lakadi Ka Pool,

Saifabad, Hyderabad-560 004

39

Nature of Irregularities Ms.Kathija Thaseen was sanctioned three loans and Mohammed Aneesuddin was sanctioned one loan against equitable mortgage of four different properties (flats) in the same building amounting to Rs.15.82 mn during the period of 2006 to 2008 by a foreign bank. The loan accounts were declared NPAs during April & May 2011 and when bank initiated action under SARFAESI, it came to know that the customers had executed sale cum- Irrevocable General Power of Attorney (GPA) with four other parties in January 2009 and the borrower had received part sale consideration and the balance was agreed to be paid to the bank by other parties towards the closure of the loans with the bank. However, neither the customer nor the vendees of the agreement had approached the bank to clear the dues nor intimated about the agreement in any manner. Auction was slated to be conducted on June 6, 2012 but the same could not materialize as the customer obtained a stay from High Court. Thus the bank was defrauded to the tune of Rs.18.64 mn.

M/s Super Fibres Ltd. Address Plot No. 57, Industrial Area, NIT, Faridabad. Regd. Office K-19 A, 2nd floor, Lajpat Nagar-II, New-Delhi – 110024. 1) M/s. Rexor India Ltd (Associate concern) Address Unit No. 99 and 107, Sector 24, Faridabad Regd. Office Bldg. No. 16-C, 1st floor, Flat No.1 A-B, Brij Dham, Housing Complex,

637, Dakshin Dyori Road, Kolkata – 700048 2) M/s. Freewheel India Ltd (Associate concern) Address Plot No. 57, Industrial Area, NIT, Faridabad Directors

1.Shri Mal Chand Somani s/o Sh. S.M. Somani 2.Shri Sunil Somani s/o Sh. Mal Chand Somani

Address House No. 1120, Sector – 15, Faridabad-121007 3.Shri Radhe Shyam Lakhotia s/o Shri Sita Ram Address 155, Lenin Sarani, P.S.Bow Bazar, Kolkata – 700013, WB

40

Nature of Irregularities M/s Super Fibres Ltd. and its associated concern M/s. Rexor India Ltd. were enjoying various credit facilities from a public sector bank and one state finance corporation on the security of equitable mortgage of land and building as well as charge on plant, machinery and other fixed assets since September 2004. The accounts of the company became irregular and were declared as NPA in September 2009. During the course of recovery, the bank came to know of the exclusive charge created in favour of the state finance corporation on the said collateralized property. A fresh search report confirmed that the company had fraudulently created the second charge with the Registrar of Companies (ROC) by submitting forged letter ceding pari passu charge purportedly issued by the bank. The signatures on these letters purported to have been issued by the bank were forged. Further, the borrowers had informed the bank of having liquidated the loan with the financing body and submitted audited balance sheets without showing any liability towards the body, which were later found out to be fudged. Thus the bank was defrauded to the tune of Rs. 835.55 mn.

24

Shri Raj Surya Medith Address Flat No.8, Building No. 124, Street No. 10, Block No. 15, JLEB

Shyouk Area, Kuwait.

41

Nature of Irregularities A bank had sanctioned housing loan of Rs. 5.91 mn to Shri Ray Surya Medith, an NRI, in the year 2009. The account showed slippage and became NPA in September 2011. During recovery proceedings, it came to light that the title deeds furnished by the borrower to the bank were fake. Thus the bank was defrauded to the tune of Rs. 5.60 mn.

M/s High Value Stone Crafts Address 700, Ramnagar, Bodhithimman Palayam, Kupperpalayam, S. S.

Kulam, Coimbatore, Tamilnadu Proprietor Shri C. Sundaramoorthy Address No.5, Shanmugapriya Apartments, Thirumalaisamy Road, New

Sidhapudur, Coimbatore - 641107.

42

Nature of Irregularities A bank had sanctioned a term loan of Rs 10.64 mn to the firm for purchase of machinery and construction of buildings. It was observed that the borrower purchased old/second hand machinery and construction of the building was not done as per disbursements made. Stage completion certificates furnished by the borrower were found to be false. Disbursements were made without ensuring end use of funds. Thus the bank was defrauded to the tune of Rs. 8.54 mn.

M/s Vedant Exports Address 9, Radhey Industrial Estate National Highway, Bavla Gujarat Partners

Shri Bhavin Mistry Ms. Beena Mistry

Address B/32, Parvati Nandan Flats Near Ujala Circle Sarkhej Ahmedabad - 382210. Associate Concern

M/s Bhagyodaya Rice Mills

Partners

1) Shri Bhavin Mistry 2) Ms. Beena Mistry

Address 9, Radhey Industrial Estate, National Highway, Bavla – 382220.

43

Nature of Irregularities A bank (Bank-A) had sanctioned credit facilities amounting to Rs.8.00 mn on December 5, 2011 to the firm for setting up a groundnut processing unit under CGTSME. On October 11, 2012 officials of another bank (Bank-B) informed the bank that they had financed M/s Bhagyodaya Rice Mills (the borrower firm was set up in the compound of this mill) and the mill was taken over by the partners, Shri Bhavin Mistry and Ms. Beena Mistry from the outgoing partners and the said groundnut processing unit was also covered by them in the project and Bank-B had the charge over shed and machineries of M/s Vedant Exports also. The partners of the borrower firm agreed availing facilities from both the banks by concealing the facts. Thus the bank (Bank-A) was defrauded to the tune of Rs. 7.80 mn.

25

1) M/s Himalayan Bee Keeping Marketing Co-operative Ltd. (Unit I & II) Shri. Manzoor Hussain (MD) Address Vidhata Nagar, Narwal Bala, Jammu-Bhatindi Road, Sunjwan. Shri. Manjoor Hussain S/o Abdul Rashid 2) M/s Hilly Bee Keeping Marketing Co operative Ltd. Smt. Shakeela Begum (MD)

Smt. Shakeela Begum W/o Manzoor Hussain Address 61, Vidhata Nagar, Narwal Bala, Jammu-Bhatindi Road, Sunjwan. 3) M/s Peer Panchal Honey Bee Keeping Marketing Co-Operative Ltd. Shri. Said Mohd. Address Jhiri Road, Mishriwala Jammu. 4) M/s Peer Panchal Honey Bee Keeping Marketing Corporation Ltd. Shri. Said Mohd.

Shri. Ramesh Kumat Raina Address Porkhu-Akhnoor Road, Jammu. 5) Shri. Said Mohd. Address Jhiri Road, Mishriwala Jammu

44

Nature of Irregularities A bank had sanctioned various credit facilities to the tune of Rs. 33.49 mn during 2007-2009 to M/s Himalayan Bee Keeping Marketing Cooperative Ltd, M/s Hilly Bee Keeping Marketing Co operative Ltd., M/s Peer Panchal Honey Bee Keeping Marketing Co- Operative Ltd. and others. Central Bureau of Investigation vide their letter dated May 22, 2012 informed the bank that they had received reliable information that the borrowers had obtained credit facilities from the bank in the form of term loans and Working Capital facilities on different occasions during the period between 2007 and 2009 on the basis of highly overvalued primary/collaterals, forged/false revenue documents of non-existing properties in connivance with bank officials and officials of KVIC. Investigations by the bank revealed that the borrowers had submitted highly inflated valuation certificates and misled the bank by showing different properties and also submitted title deeds of non-existing properties. Endorsements of Revenue Authority for having noted bank's lien on the properties were forged/fake. Smt. Shakeela Begum sold the property in her name after mortgaging the same to the bank. Thus, the bank was defrauded to the tune of Rs. 32.43 mn.

M/s Indus Travels and Logistics Partners

Shri Harpreet Singh Cheema Shri Ravinder Singh Paul

45

Address 1126, Sector 8-C Chandigarh

26

Nature of Irregularities A bank (Bank-A) had sanctioned a term loan of Rs. 5.00 mn to the borrower firm for purchase of 25 cars (5 Baleno cars and 20 Esteem cars) from M/s Berkley Automobiles Ltd., at an estimated cost of Rs. 12.55 mn. The entire loan amount was disbursed through a Pay Order for Rs. 5.00 mn on May 1, 2006. The branch did not have any Cash receipt or sale invoice from the dealer firm for having received the amount. At a later date the borrower firm produced notarized copies of bills/invoices, and RC books purportedly containing bank's lien on all 25 cars. Original invoices, RC books and other original documents were not made available to the bank by the borrowers. A confirmation from the State Transport Authority, UT Chandigarh indicated that only 10 cars were hypothecated to this bank (Bank-A) and 9 Petra cars were hypothecated to another bank (Bank-B), 5 Esteem cars to a different bank (Bank-C). The borrowers diverted a part of bank funds and furnished fabricated RC books. Reportedly the borrowers had sold all the ten cars hypothecated to the bank. At the business address furnished to the bank, no firm by such name was functioning. Thus the bank (Bank-A) was defrauded to the tune of Rs. 5.00 mn.

Supplementary Caution Advice In continuation of our circular ADV 56 / 2011-12 dt. 06.07.2011, Caution Notice no. 6 / 2011-12, Item No. 8 and our circular ADV 83 / 2011-12 dt. 03.08.2011, Caution Notice no. 7 / 2010-11, Item Nos. 6 and 14, regarding serious irregularities in the conduct and operations of the accounts relating to M/s Lifeline Industries Ltd and associate concerns, we furnish herewith some more information reported in connection with another fraud committed by the group.

M/s Lifeline Industries Ltd. Address A-401, 4th Floor, Mastermind-III, Royal Palms Estate, Aarey Milk

Colony, Goregoan (E), Mumbai-400 065 Directors

1. Mr.Nikunja Kanakia 2. Mr.Kirti M Kanakia

Address 701 / 702, Quarter Deck Co-op Housing Soc, J.P.Road, Versova, Andheri (W), Mumbai-400061

Associate Concern Director / Proprietor details 1. M/s Lifeline Drugs & Pharma Ltd Address A-401, Master Mind-III, Royal Palms Estate, Aarey Milk Colony,

Goregoan (E), Mumbai-400 065 2. M/s Prominent Holidays Pvt Ltd Address 11/13, Ruturaj, Juhu Road, Near Lido Cinema, Santacruz (W),

Mumbai-400 049 3. M/s T.J.Travel Services Pvt Ltd Address 113, Dheeraj Heritage, 1st Floor, Near Santacruz Bus Depot,

S.V.Road, Santacruz (W), Mumbai-400 054 4. M/s Prominent Leasefin Pvt Ltd

5. M/s N.K.Exim Pvt.Ltd

46

Address A-102, Jayant Apartment, Sahara Road, Opp.Cargo Complex, Andheri(E), Mumbai-400 099.

27

Nature of Irregularities Please refer to above mentioned caution advices circulating the modus operandi of the fraud perpetrated by M/s Lifeline Industries Ltd. and its sister concerns and their directors / partners / guarantors. On March 19, 2010 a Financial Institution sanctioned an export credit limit of Rs.150 mn to the party secured by collateral security of charge over third party guarantors’ property at A-20, Padma Vilas Enclave, Sr.No.799, Wanowarie, Cantonment, Pune. Accordingly the FI disbursed USD equivalent of Rs.9.02 crore on April 04, 2010 and USD equivalent of Rs.2.09 crores on June 01, 2010. As the monies due under the facility were not received, the account was classified as NPA on December 31, 2010. The loan was recalled on April 25, 2011 and the promoters were declared wilful defaulters by the FI. When the FI initiated action under SARFAESI act and published the possession notice in daily newspapers, Canara bank, Khar West Mumbai branch wrote to the FI claiming charge on the property. Also one of the guarantors and joint owner of the property, Mrs. Jayashree Kankia filed securitization application u/s 17 of securitization act denying creation of any charge in favour of the FI. Investigations were taken up which revealed that the title deed mortgaged by these borrowers with the FI did not match with the certified copy obtained from Sub-Registrar’s office. Thus the FI was defrauded to the tune of Rs.41.00 mn.

Supplementary Caution Advice In continuation of our circular ADV 56 / 2011-12 dt. 06.07.2011, Caution Notice no. 6 / 2011-12, Item No. 27 and our circular ADV 132 / 2011-12 dt. 21.12.2011, Caution Notice no. 16 / 2011-12, Item no. 31, regarding serious irregularities in the conduct and operations of the accounts relating to M/s Tauras Earth Movers Ltd. and associate concerns, we furnish herewith some more information reported in connection with another fraud committed by the group.

M/s. Taurus Earth Movers Ltd Address 34, Embassy Diamante Vittal Maliya Road Bangalore – 560 001.

Firms that had issued fake invoices 1. M/s. Montreal Trading Co. Pvt. Ltd.

2. M/s. Starview Mercantile Co. Pvt. Ltd. 3. M/s. Asha Multitrade Pvt. Ltd.

Address H-157, Dr. Baba Saheb Ambedkar Nagar. S M Road, Kokari Agar, Sion, Koliwada, Mumbai.

4. M/s. Superfine Trading Co. Pvt. Ltd. 5. M/s. Everfame Trading Co. Pvt. Ltd. 6. M/s. Geonet Trading Co. Pvt. Ltd. 7. M/s. Topcare Trading Co. Pvt. Ltd.

Address C-002-20, Chandresh Hill, C-19, 20, 21, Co-operative Housing Society, Achole Road, Nalasopara (E), Thane.

8. M/s. Realstar Trading Co. Pvt. Ltd.

47

Address 4/402, Sai Shyam, C-Wing, Mamvelpada Road, Virar (E), Thane.

28

Nature of Irregularities Please refer to above mentioned caution advices circulating the modus operandi of the fraud perpetrated by M/s. Taurus Earth Movers Ltd. and its sister concerns and their directors/partners/guarantor. The banks may also take into account the names of eight companies that had issued fake and accommodative invoices without actually supplying any materials to M/s. Taurus Earth Movers Ltd. which facilitated such large value fraud involving Rs. 128.88 crore by /s. Taurus Earth Movers Ltd. on a bank.

Supplementary Caution Advice In continuation of our circular ADV 164 / 2011-12 dt. 30.03.2012, Caution Notice no. 20 / 2011-12, Item No. 7, regarding serious irregularities in the conduct and operations of the accounts relating to M/s Trisakthi Publications Pvt. Ltd and associate concerns, we furnish herewith some more information reported in connection with another fraud committed by the group.

(1) M/s G J Multimedia India Pvt. Ltd. Address 56/21, Shastry Nagar 1st Avenue, Adayar Chennai – 600 020 Directors

1. Shri. S Sundara Raman 2. Smt. Nalini Sundara Raman 3. Shri. Madan Chandar

Address 7/4, 4th Main Road Indira Nagar, Adayar Chennai – 600 020. Directors 4. Shri. Vijaya Venkat Romanan

5. Smt. Madumitha Address

A4, Sri Vatsa Krishna Apartments, 20, 2nd Main Road, Kasturba Nagar, Adyar, Chennai – 600 020.

Directors 6. Shri. P Srinivasan Address Plot No. 7-8, 1st Cross Street, Bharathnagar, Madipakkam,

Chennai – 600 091. (2) M/s. Giriguja Publications Pvt. Ltd. Directors

1. Shri. S Sundara Raman 2. Smt. Nalini Sundara Raman 3. Shri. Madan Chandar

48

Associate concerns

i. M/s. G J Printing Solutions - Shri. Madan Chandar ii. M/s. Trisakti Media - Shri. P Srinivasan iii. M/s. G J Transport - Shri. P Srinivasan

29

Nature of Irregularities A term loan of Rs. 336.00 mn and CC limit of Rs. 10.00 mn on September 18, 2009 was sanctioned to the borrowers by a bank for Preview and Sound mixing theatre and purchase of equipments. A term loan of Rs. 84.10 mn and CC limit of Rs. 2.50 mn were also sanctioned to M/s. Giriguja Publications Pvt. Ltd., a sister concern of M/s G J Multimedia India Pvt. Ltd. on September 10, 2008 for construction of building and purchase of machinery. M/s G J Multimedia India Pvt. Ltd.: Vigilance investigation conducted by the bank after the account turned NPA revealed that the borrower had paid Rs. 11.00 mn to M/s. Modarchs Consultants Chennai Pvt. Ltd. On April 08, 2010 for doing post production film facility. But, MCCPL returned the amount on April 15, 2010 to GJMIPL as they could not undertake the work. However, the amount was not credited to the loan account and the borrower siphoned off the amount. The officials of MCCPL informed the bank that the receipts/invoices purportedly issued by them were fabricated which confirmed that the borrower submitted forged bills/invoices. Further, the borrower paid an advance payment of Rs. 17.00 mn to M/s. Home Theatre Solutions from TL account on April 09, 2010 for turnkey project. But, Shri. S Sundara Raman informed Shri. Rajesh of M/s. Home Theatre Solutions that the project was dropped by the company and requested to return the entire amount to the credit of SB account of Shri. Sundara Raman with another bank. The entire amount was returned on April 10, 2010. It was observed that the bills/invoices purportedly issued by M/s. Home Theatre Solutions were fake and thus, the amount was siphoned off by the borrower. The bills/receipts issued by M/s. Vetrivel Videos for Rs. 1.98 mn and M/s. Real Image for Rs. 4.08 mn was also found to be fake. Thus, the borrowers diverted and siphoned off Rs. 40.10 mn. M/s. Giriguja Publications Pvt. Ltd.: Investigations revealed that the company did not route entire transaction through CC account and continued to maintain and operate account with ICICI Bank. Turnover in the account was not satisfactory and there were no operations in CC account since June 01, 2011. The account turned NPA on August 30, 2011. The company upgraded the account in October 2011 which was again classified as NPA on June 30, 2012. It was observed during investigations that three Pos for Rs. 9.00 lakh, Rs. 5.39 lakh and Rs. 4.50 lakh favouring the machinery supplier M/s. Safire Traders and a cheque for Rs. 7.46 lakh were encashed through another bank by the borrower. When the officials of the bank contacted MD of M/s. Safire Traders, he informed that he had complained against Shri. S Sundara Raman for defrauding TMB by using firm’s name. The bills/invoices of M/s. Safire Traders submitted by the borrower were also fake. Thus, the bank was defrauded to the tune of Rs. 42.70 mn.