Be slow in accepting bank loan on basis of stock - in case of default, criminal case by bank possible - An example
A small business man from a small village of Gujarat had come to seek my advice.
He had good relations with Branch Manager of a Private Bank.
He needed some loan. He had already taken loan against his farm and property.
He needed some more loan. Manager suggested him a way.
"Show that there is stock of Rs. 10,00,000/- in your godown. And on basis of stock, I will give you loan"
"But I have really no stock in godown"- said the businessman.
"Do not worry. We will take care. Just sign on these loan papers". - Manager suggested.
Papers were signed and loan was given.
After sometime, Manger asked him to return the whole loan or face a criminal case.
Bank proposed to file a criminal case against businessman on the ground that he had cheated the bank by "Disposing of Rs. 10 Lakh stock from his godown without permission and knowledge of Bank"
IPC 420 etc sections were proposed to be applied against businessman. The businessman show imminent danger of being arrested and jailed.
The businessman come to Delhi to seek my advice.
I gave him some suggestions.
He went back to village and met with bank manager.
He explained to manager that if Bank will file criminal case against him, he will apply to court to make Bank Manager as Co-accused. He will tell the Court that even though there was no stock, the Bank Manager prepared forged documents to show stock in Godown. Therefore, the bank manager and his staff who certified non existent stock, should also go to jail with him.
..........
After some months, I learned that problem of business man was solved. Bank did not file any criminal case on him. They sat down together and amicably settled the loan.
Haresh Raichura
27/6/13
