A single judge bench of the Orissa High Court upheld the conviction of Congress MLA Mohammed Moquim from the Cuttack-Barabati constituency for his involvement in the Orissa Rural Housing Development Corporation (ORHDC) loan fraud. Sentenced in 2022 to three years of rigorous imprisonment by the Special Judge (Vigilance), Bhubaneswar, Moquim was found to have played a crucial role in the fraudulent loan sanctioning for M/s. Metro Builders Pvt. Ltd., establishing his criminal intent linked to the offenses.
Brief Facts:
In the present case, the Appellant, Managing Director of M/s. Metro Builders Pvt. Ltd., applied for INR 1.5 crores loan from the Orissa Rural Housing Development Corporation (ORHDC) depsire prior defaults. He alledgedly conspired with ORHDC officials, using forged documents to secure the loan. The Trial Court convicted him and his associates for forgery and cospiracy, sentencing each to 3 years of rigourous imprisonment and a RS. 50,000 fine. The Appellant preferred the present appeal against such order of the Learned Court.
Contentions of the Appellant:
It was argued that the mere inability to repay a loan does not constitute cheating and should not lead to criminal prosecution of the defaulter.
It was argued that a company's Managing Director cannot be held criminally liable for the company's actions without clear evidence of his active involvement and criminal intent.
Contentions of the Respondent:
It was contended that the sequence of events i.e., from the loan application by a known defaulter to the unauthorized sanction of a substantial loan amount, indicated a criminal conspiracy. It was further evidenced by the lack of proper security, such as an equitable mortgage or original property documents, and the use of knowingly forged documents to secure the loan from ORHDC, all pointing to an intentional scheme to defraud the corporation orchestrated by the Appellant and other accused parties.
Observations of the Court:
The Court observed that the Appellant's role as Managing Director of M/s. Metro Builders Pvt. Ltd. and the loan of Rs. 1.5 crores from ORHDC were established facts. Justice Routray highlighted testimony from the Secretary of the State Government in Housing and Urban Development and Chairman of ORHDC, who confirmed that the ORHDC MD had no authority to sanction loans as of 28.08.2000, just before the authority was granted on 31.08.2000 for loans up to only Rs. 5 lakhs.
Further, the Bench noted discrepancies such as the absence of post facto approval for the loan, lack of consultation with the financial advisor, and bypassing of proper channels in sanctioning the loan. Evidence presented also showed that the 'No Objection Certificate' for fire safety and other documents used to secure approvals from BDA were forged.
Moreover, the Court observed that no equitable mortgage was created, and the loan was disproportionately high compared to the property value of Rs. 25 lakhs, with no original documents retained on file. The Court concluded that the appellant's fraudulent intent was clear from the outset, establishing a criminal motive beyond mere inability to repay the loan.
The decision of the Court:
The Bench dismissed the appeal, considering the severity of the sentence, the nature of the offenses, and the Appellant's involvement in committing these offenses. It was held that there were no grounds to alter the original sentencing.
Case Title: Mohammed Moquim v. State of Odisha (Vigilance)
Coram: Hon’ble Justice B.P Routray
Case No. CRLA No. 880 of 2022
Advocate for the Appellant: Adv. Mr. Pitambar Acharya
Advocates for the Respondent: Advs. Mr. S. Das & Mr. S.K Das
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