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Court clears Suresh Prabhu in Western India Finance fraud case

Sandesh Prabhudesai in Panaji

Union Environment Minister Suresh Prabhu has finally succeeded in getting his name dropped as the prime accused, though on technical grounds, from the infamous court case of a banking fraud of over Rs 12 million in Goa.

It came as a shock for around 100 investors two years ago when they found their cheques were being dishonoured, issued by the Western Indian Financial Services Limited, then headed by Suresh Prabhu, a reputed banker-turned-politician.

As judicial magistrates in two different courts had refused to drop Prabhu's name from the case, the Shiv Sena leader had then appealed to the district and sessions court, on the grounds that he had resigned from the non-banking financial company much before the fraud came to light.

The magistrates had refused to recall the process against Prabhu, raising serious suspicion about the date on which the Union minister claimed to have resigned. While the investors had produced certified copies from the Registrar of Companies that Prabhu had resigned in March 1997, Prabhu had produced documents from the same agency, claiming that he had resigned in May 1996.

The lower courts had however noted that the form 32 produced by the Union minister was neither dated, signed nor stamped by the Registrar of Companies, unlike the certified copy of the RoC produced by the investors. On the contrary, one letter by the RoC, produced by Prabhu, stated that "Prabhu appears to have resigned on May 7, 1996."

In fact, one of the JMFC had even agreed to apply Section 420 (cheating) of the IPC, on the grounds that Prabhu did not make any provision for honouring the cheques. Prabhu's sole contention to drop his name was based on the claim that he had resigned before the cheques got bounced in November 1996.

The district and sessions judge, Nelson Britto, while dropping his name now, observed that it was unjustifiable on the part of the magistrates in issuing proceedings against Prabhu. For the complainant had not made a statement under Section 141 of the Negotiable Instruments Act that Prabhu was the in-charge of and was responsible for the conduct of the business. It was also not substantiated on oath under Section 200.

Dropping Prabhu's name comes as a big setback for the investors, some of whom had invested their life-time earnings into it, as all the other directors are still absconding. They include Nandan Gadgil, Brijbhushan Nagpal and Narendra Kumar. The police are still unable to trace them while one investor has also approached the high court, complaining against police investigations moving at snail's pace.

The investors are planning to challenge the order in the high court. Advocate Gurudas Tamba, one of their lawyers, however wonders why these technical points, on the basis of which Prabhu's name is being dropped, were not raised by Prabhu's counsel either in the appeal or during the arguments. "At least, we could have countered them successfully," he said.

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