More than 15 years after a Punjab National Bank loan fraud involving fake firms, forged invoices and diversion of over ₹87 lakh surfaced in Faridkot, a special CBI court in Mohali convicted two directors of a cement company but released them on probation, citing full repayment of the bank dues, absence of dishonest intention at the time of availing the loan and mitigating personal circumstances.
Special judge Dinesh Kumar Wadhwa convicted Balwinder Singh and his brother-in-law Sukhwinder Singh, directors of M/s Maha Sagar Cement Co Pvt Ltd, under Sections 420, 468, 471 and 120-B of the Indian Penal Code in the case registered by the CBI’s Chandigarh branch in 2011.
According to the allegations, the accused fraudulently diverted funds from a ₹2-crore credit facility sanctioned by Punjab National Bank’s Faridkot Cantonment branch in 2009.
The prosecution stated that Balwinder Singh and his late son Satinder Pal Singh obtained a term loan and cash credit limit for setting up a cement manufacturing unit. The CBI alleged that they later diverted ₹87.29 lakh for personal use by routing payments through fictitious firms and forged bills in connivance with bank officials.
Investigators told the court that Sukhwinder Singh floated paper entities M/s Guru Nanak Building Material and M/s Guru Nanak Engineering Works which received ₹25.04 lakh and ₹45 lakh, respectively, through fake invoices despite having no genuine business operations. The money was allegedly withdrawn and diverted for personal use.
The CBI further alleged that the accused manipulated transactions with legitimate suppliers to siphon funds back through undisclosed accounts and attempted to divert another ₹50.52 lakh from the cash credit account through a purported shell entity, M/s Sharma Dealer. That transaction failed after an SBI official reportedly raised doubts over the beneficiary’s credentials.
However, the court acquitted former PNB branch manager DR Solanki and deputy manager Parkash Singh, observing that although they committed procedural irregularities and failed to exercise due diligence, the prosecution failed to establish criminal conspiracy, illegal gratification or a “meeting of minds” with the private accused.
While deciding the sentence, the court noted that there were no allegations that the accused had dishonest intentions when availing the loan, as the collateral and primary security furnished to the bank were commensurate with the sanctioned amount. The wrongdoing, the court held, occurred at the post-sanction stage when funds were diverted to non-existent firms.
The court also noted that Balwinder Singh had repaid the entire outstanding amount to the bank, resulting in no ultimate financial loss to PNB. Taking note of the prolonged trial lasting over a decade and the death by suicide of Balwinder Singh’s son during the proceedings, the court held that no useful purpose would be served by sending the convicts to jail.
Relying on provisions of the Probation of Offenders Act and Punjab and Haryana high court precedent, the court released Balwinder Singh and Sukhwinder Singh on probation upon furnishing bonds and directed them to pay litigation costs.
