The Supreme Court has brought a 35-year-old corruption case to a close by acquitting a former Indian Bank branch manager, delivering a sharp rebuke to the investigation and concluding that the allegations against him were unsupported and fundamentally flawed.
The Court said it was convinced that the case presented against V Balakrishnan had been fabricated and lacked any credible foundation.
A Bench of Justices JB Pardiwala and K Vinod Chandran examined the evidence and found that crucial allegations rested on assumptions rather than proof. The Court held that the investigation had failed not only to establish the charges but also in the very manner in which the case had been constructed.
The dispute dates back to 1991-92, when Balakrishnan was serving as the manager of Indian Bank’s Anna Nagar branch in Chennai.
He was accused of working in concert with Kumaradevan, a retired Indian Overseas Bank officer, in the sanctioning of loans to two individuals who were allegedly employed as domestic workers at Kumaradevan’s residence.
According to the allegations, one of the borrowers worked as a washerman but was presented as a real estate businessman while a loan of ₹13.50 lakh was recommended in his name. Another sum of ₹3.30 lakh was said to have been released before the loan received formal approval.
A separate loan of ₹10 lakh was sanctioned to another borrower for the purchase of 21.39 acres of land. The case also included allegations that the land offered as security had been assigned an inflated value.
It was alleged that Kumaradevan was the real beneficiary of the loans. The case relied partly on cheques carrying signatures on their reverse side, which were said to indicate that he had received the money.
The trial court accepted the allegations and convicted Balakrishnan. The High Court subsequently upheld the conviction, leading him to challenge the decision before the Supreme Court.
The Supreme Court, however, found serious weaknesses in the evidence.
One of the central problems, the Bench noted, was the failure to establish that the signatures appearing on the cheques actually belonged to Kumaradevan. No contemporaneous specimen signatures were produced for comparison. Even officers who had worked with Kumaradevan and could potentially have identified his handwriting were not asked to do so.
The Court also pointed out that the loans were not sanctioned solely by Balakrishnan. The approvals had come from Indian Bank’s Regional Office, weakening the claim that he had independently engineered the transactions.
The investigation had also attempted to rely on Kumaradevan’s real estate transactions to establish a connection between him and the disputed loans. But the Court found that these dealings did not demonstrate Balakrishnan’s involvement.
Another major allegation concerned the supposed overvaluation of the mortgaged properties. The lower courts had relied on the prices fetched by the properties at auction nearly two decades later, in 2010.
The Supreme Court found that approach unsustainable.
There was no contemporaneous material, such as sale deeds or officially determined market values, showing the actual worth of the properties at the time the loans were sanctioned. A property’s auction price many years later, the Court indicated, could not automatically establish that it had been overvalued in the early 1990s.
The Court further noted that the bank had eventually recovered its entire outstanding dues after the properties were auctioned. The auctions had also generated substantial excess amounts beyond what was required to clear the loans.
Taking note of the surplus, the Bench questioned why the money had continued to remain with the bank instead of being traced and returned to the legal heirs of those entitled to it.
The Court expressed surprise that no meaningful effort had been made to identify the legal heirs and distribute the remaining funds.
Balakrishnan was ultimately granted what the Supreme Court described as a clean acquittal, ending a prosecution that had continued for more than three decades.
The Court has also directed Indian Bank to submit a report detailing the excess amount remaining after the auction of the mortgaged properties.
The matter is scheduled to come up again on October 5 for consideration of that report.
