The Madras High Court has acquitted a 90-year-old former Chief Manager of the Bank of Baroda, VR Narayanan, in a corruption case initiated by the Central Bureau of Investigation (CBI) nearly thirty years ago. The court concluded that the prosecution was unable to establish its case beyond a reasonable doubt. This ruling, delivered by Justice M. Nirmal Kumar, overturns a previous conviction by a Chennai CBI court in 2015, where Narayanan was sentenced to one year of simple imprisonment and fined ₹5,000 under the Prevention of Corruption Act.
Background of the Case
The legal proceedings stemmed from credit facilities extended to M/s Corium Crafts Private Limited from 1991 to 1994. The company had received packing credit and foreign bills purchase facilities from the Bank of Baroda’s Industrial Finance Branch in Chennai. The prosecution accused the company and its directors of misappropriating funds by fabricating stock records of tobacco and leather. Narayanan, who was the bank’s Chief Manager at the time, was accused of submitting a falsified inspection report following a visit to godowns in Gujarat.
The CBI alleged that while large quantities of tobacco were reported to be stored in godowns around Anand and Baroda, subsequent inspections revealed the absence of such stocks. It was further claimed that some listed addresses were fraudulent, including one location that was actually a potato field.
Defense and Appeal
In his defense, Narayanan argued that the loan had been approved before his tenure at the branch began in November 1991. He explained that the credit facilities were sanctioned and overseen by the Zonal Office, with the branch merely handling the procedural processing and disbursement of funds.
The trial court’s conviction of Narayanan was largely based on the finding that his inspection report inaccurately certified the existence of stocks at the Gujarat godowns. However, Narayanan appealed this decision to the High Court in 2015.
High Court’s Findings
The High Court observed that the loan application was made on April 15, 1991, and sanctioned on July 6, 1991, before Narayanan began his assignment at the branch. It was noted that the previous Chief Manager, who had recommended the loan, was neither charged nor called as a witness.
Further, the court recognized that bank officials confirmed the loan processing was managed by the Zonal Office, with the branch acting under direct instructions from higher authorities. Narayanan had earlier refused to release certain amounts and acted only upon receiving directives from the Zonal Office.
The prosecution’s argument depended heavily on the discrepancies between Narayanan’s February 1993 inspection report and another report submitted 22 months later in December 1994. The court ruled that such discrepancies alone could not substantiate a conviction.
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Moreover, the investigating officer admitted that Narayanan did not derive any personal gain from the transaction and that the loan amount was eventually repaid. The High Court allowed the appeal, declared Narayanan’s conviction unsustainable, and acquitted him of all charges.
Advocate R. Amizhdhu represented Narayanan, while Special Public Prosecutor R. Mohan appeared for the CBI. The judgment is a significant development in a case that has spanned decades, reflecting the complexities inherent in legal proceedings involving financial transactions.
