Seizure of demonetised notes: Probe agencies plan to close case against Vaidyanath co-operative bank

Over a month after demonetisation, the Mumbai Crime Branch had seized a car which was carrying Rs 10 crore in old and new currency. (Representational)

THE INVESTIGATING agencies probing a few officials of the Vaidyanath Urban Co-operative Bank Limited in connection with the alleged fraudulent transport of unaccounted demonetised currency to the tune of Rs 25 crore are planning to close the case due to lack of evidence against the accused, it is learnt. Sources familiar with the development said the central agencies were likely to give a clean chit to Dr Suresh Advani, a renowned oncologist and Padma Bhushan recipient who along with Bharatiya Janata Party MP Pritam Munde controls the bank. Advani was among those booked in the case.

On December 15, 2016, over a month after Rs 500 and Rs 1,000 notes were declared illegal tender, the Mumbai Crime Branch had intercepted a car at Chedda Nagar in suburban Ghatkopar. The car was carrying Rs 10 crore in old and new currency, which was seized. The case was subsequently handed over to the CBI, which booked four people, including Advani, on December 23 for criminal conspiracy, forgery, cheating and under certain sections of the Prevention of Corruption Act. Based on the CBI case, the Enforcement Directorate (ED) later registered a case against some bank officials and certain individuals, including the oncologist, under the stringent Prevention of Money Laundering Act (PMLA).

The CBI had alleged that the accused “entered into a conspiracy and fraudulently transported” the money from the “head office of Vaidyanath Cooperative Urban Bank, Beed, Maharashtra to their Ghatkopar Branch on November 19, 2016, for changing it to legal tender”. “Out of the said amount, a sum of Rs.15 crore (approx.) was allegedly deposited with Maharashtra State Urban Co-operative Bank and the balance amount of around Rs.10 crore (i.e. Rs.10 lakh in new currency of Rs.2000/- denomination and the balance in old denomination of Rs.500/-) was being transported back to Beed, when they were intercepted by the State police, Mumbai on December 15, 2016,” CBI had said in a statement on December 23.

The agency, during the course of the probe, recorded the statement of Vaidyanath bank’s chief executive officer Maheshchandra Kavathekar. Kavathekar told the probe agency that the seized money was the demonetised notes accepted by the bank after the Rs 500 and Rs 1,000 notes were banned from the midnight of November 8, 2015. He also said the demonetised currency collected by the bank was being moved from its Ghatkopar branch to Pune as it was not able to deposit the amount of Rs 10 crore with the Maharashtra State Urban Cooperative Bank.

To verify Kavathekar’s claim, the agency recorded the statement of Maharashtra State Urban Cooperative Bank officials, who, official sources said, corroborated the CEO’s claims. “Officials from the Maharashtra State Urban Cooperative Bank have stated that the bank had turned down Vaidaynath bank’s deposits of Rs 10 crore and asked it to come later due to heavy influx of people and money at its branch after demonetisation,” said an official privy to the probe details who did not wish to be named.

“The input was of unaccounted cash in demonetised currency notes being ferried by the suspects. Based on the said information, the Mumbai crime branch seized the money. However, during the probe, it was established that the people ferrying the cash were bank officials and that they were only transporting the cash from their Ghatkopar branch to Pune,” added the official.

The official also said accounts books of the banks scrutinised by the investigators was “clean”. “The remittance, transactions and cash summaries of its three branches namely Beed, Pune and Mumbai were studied. It is difficult to make fake logs of such a huge amount. We have studied the account books and the money in question has been tabulated and accounted for,” said the official.

According to the sources, the ED too will shut the case after the CBI files a closure report. “The preliminary assessment of the documents shared with us indicates that the bank log books were in order. If the CBI files a closure report and if there is no predicate offence then the ED case under PMLA will also have to be closed,” said an ED source.
The central agencies are also likely to give a clean chit to Advani. The sources said the CBI had found that the seized money did not belong to him.
Messages sent to Advani did not elicit any response.

An official, however, said: “While more or less the statements and the accounts given by the bank officials seems to be tallying, there are no convincing replies as to why the money was being taken outside Mumbai. However, for all practical purposes we have closed the probe.”