Probe Against Former Bank Officials Likely

The Supreme Court yesterday hinted at serious action against top ex-officials of Canara Bank and the erstwhile New Bank of India for advancing loans and guarantees to the tune of Rs 11 crore to the Delhi-based Skipper Construction Company.

The division bench consisting of Justice B P Jeevan Reddy and Justice K S Paripoornan indicated that they would ask the Reserve Bank of India to fix liability on the persons concerned.

The judges were hearing the Skipper case after show cause notice to R C Suneja, former New Bank chairman.

They said they might direct a two-member body of the Reserve Bank to probe into the mismanagement of funds of the two banks.

The court had before it the report of the Justice Saharya commission holding Suneja and the former Canara Bank chairman and chief of the Fairgrowth company, B R Ratnakar (now dead) responsible for the lapses that occurred.

The court issued notices to Ratnakars two sons, Premanand Shenoy and Naveen Shenoy, and his wife Prema Ratnakar.

They have to show cause by February 11 why the advance of Rs 4 crore was not recovered from Skipper.

The court also restrained the three legal representatives of Ratnakar from either disposing or dealing with any of their properties or interests in companies in which they are directors.

It also put a ceiling of Rs 10,000 on the amount they are allowed to draw from their bank accounts. The bar will operate till Tuesday when the case will be heard again.

The Saharya commission had found that Suneja had fraudulently committed funds of the bank and extended the facility to Skipper company in clear violation of the norms.

In the case of Ratnakar, the commission found that he had violated norms to benefit the company. It further said that there was no proper supervision by the RBI.

The court has asked the nominees of the RBI who were on the board of the two banks at the relevant time to file their affidavits before the next hearing. The nominees, Tajwar Rehman Sawhney, Sudershan Lal and S S Ranade were present in the court.