Court reserves orders on CBI plea for custody of Deccan Chronicle promoters

CBI counsel says also suspect the role of bank officials in the alleged loan fraud

A court on Thursday reserved its order for Saturday in a petition by the Central Bureau of Investigation (CBI) seeking the custody of Deccan Chronicle Holdings Ltd (DCHL) promoters.

The CBI had sought for a 14-day custody of DCHL’s chairman, T Venkattram Reddy, and vice-chairman and managing director, T Vinayaka Ravi Reddy, following their arrests last Saturday in an alleged bank loan fraud case registered in July 2013.

The public persecutor said an interrogation of the accused was necessary to conclude the probe since they were not cooperating with authorities.

“The CBI had issued 10 notices to the accused, first one on August 28, 2014, and the last notice on February 4, 2015. They had appeared only twice before the agency, first time on September 25, 2014 and requested for time. And when the second time they appeared on September 30, 2014, they did not open their mouth,” the counsel informed the court.

Further, the special public prosecutor said the accused had approached the Karnataka High Court and got interim orders on the ongoing investigation in November, 2014 after seeking time in response to one such notice from CBI. Subsequently on January 5, 2015, the high court had not only rejected the petition of the accused but also asked the CBI to continue with the investigation in the matter, he said.

Apart from the sections of cheating and forgery the case was also registered under 120 B of the Prevention of the Corruption Act as the role of the public servants(bank officials) were also suspected in the alleged irregularities, according to him. The public prosecutor also told the magistrate  the accused would be taken to Bengaluru for the interrogation as the investigative agency's Bank Security and Fraud Cell office is located in Bangalore and all the documents gathered in course of the investigate are also deposited there.

Countering the CBI's custody petition, Venkattram Reddy's lawyer E Umamaheshwar Rao questioned the very rationale behind registering a criminal case "in a simple bank loan transaction where the banks have several avenues for the recovery in case the loan becomes sticky". In this case Canara Bank and Deccan Chronicle have had a 65-year old relationship and on top of the bank had initiated recovery proceedings in the Debt Recovery Tribunal(DRT) eight months before the FIR was registered on July 5, 2005 against the DCHL promoters, he said.

Refuting the contention that their clients were not cooperating with the investigation, Rao said all the loan transactions and the utilisation of loan proceeds are independently verifiable facts and there was nothing more to expect from his clients.

While maintaining that the custody petition was filed with a malafide intention and therefore was fit to be dismissed,  Venkattram Reddy's lawyer, however, said that the CBI's  request can at best be considered granting a couple of days custody along with riders such as interrogation has to be conducted in Hyderabad and also in the presence of his lawyers.

Magistrate grants special-class treatment to the accused

While reserving his orders in the custody petition, 14th additional chief metropolitan magistrate Y V Raju, however, issued orders in a separate petition filed by the accused for treatment as special class under trial prisoners while in judicial custody. Since their arrest on Saturday both Venkattram Reddy and Vinayaka Ravi Reddy were put in a local jail treating them as normal prisoners. As the magistrate granted them the status of the special class prisoners they would be allotted a separate cell in the jail apart from providing a cook among other facilities.