Claims ₹100.57 cr had been transferred to a current account opened by an impostor
The Chennai Port Trust (CPT) has moved the Madras High Court in connection with a case of ₹100.57 crore deposited by it in Indian Bank’s Koyambedu branch, Chennai, last year getting locked because the fixed deposits were closed and the money had been transferred to a current account opened by an impostor posing as Deputy Director (Finance).
Justice R. Mahadevan wondered how banks could allow such frauds to take place and ordered notice to the bank. He permitted CPT to issue private notice to the bank besides filing a petition to implead Central Bureau of Investigation (CBI) to the writ petition since it appeared that both the port trust as well as the bank had lodged complaints with the bureau over the fraud.
In an affidavit filed on behalf of the CPT, its Financial Advisor and Chief Accounts Officer D. Ramana Murthy said it was a body constituted under the Major Port Trusts Act of 1963 and governed by a Board of Trustees appointed by the Centre. The CPT received large sums of money by virtue of its commercial operations and credits it to a fund called as General Account of the port. The excess funds were parked in fixed deposits.
The general practice was to receive quotes from various nationalised banks with respect to the best interest rate they could offer and then deposit the money. Accordingly, quotes were received in March 2020 for depositing ₹100.57 crore and the money was deposited in Indian Bank’s Koyambedu branch in 14 tranches between March 7 and May 4, 2020 with a lock-in period of one year on non-callable basis.
Though the fixed deposits could not be encashed at all until the date of their maturity, the port trust received an e-mail on May 14, 2020 stating that the last tranche of ₹62.08 crore was foreclosed on May 8. Immediately, the CPT wrote to the bank questioning how could the deposits be foreclosed in violation of the negative covenant in the contract and when the FD receipts were in possession of the port trust.
Making things worse, CPT received a cheque book from the bank on May 15, 2020 bearing a current account number in the name of Chennai Port Trust General Insurance Fund. Alarmed at this, since the port trust had not opened any such account, the CPT returned the cheque book to the bank and the matter was escalated to the level of the Managing Director and Chief Executive Officer of the Indian Bank.
On May 20, 2020, the bank, on its part, informed CPT about an internal inquiry having been ordered and the port trust, in turn, chose to lodge a complaint with the CBI on May 21, 2020. All the fixed deposit receipts and other documents were handed over to a Deputy Superintendent of Police attached to the Anti-Corruption Branch of CBI in Chennai on August 6, 2020 and the port trust continued to impress upon the bank to return the deposits with interest.
The Executive Director of Indian Bank wrote to CPT on June 23, 2020 stating that the fixed deposit receipts for ₹100.57 crore had been surrendered, the deposits had been closed and the money had been credited to the current account standing in the name of Chennai Port Trust General Insurance Fund. Subsequently, the bank claimed to have lodged a complaint with the CBI and stated that any further action could be taken only based on the outcome of the investigation, the petitioner said.
Contending that the criminal investigation had nothing to do with return of money, CPT sought a direction to the bank to return ₹107.16 crore along with interest which worked out to ₹6.59 crore.
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