FIR against ICICI, JM unit quashed in alleged fraud case

The Bombay High Court on Monday quashed a first information report filed by a hotelier and subsequent investigation by the Economic Offences Wing (EOW) of the Mumbai Police against ICICI Bank, some of its senior executives and JM Financial Asset Reconstruction Company, a lawyer who represented the bank said.

The bank and the executives, including four former bankers, had approached the court to quash the FIR, registered in 2021, and the proceedings initiated by the police.

"The court saw through the complaint and concluded that it was sans merit and allowed our petition, thereby quashing the frivolous complaint registered by the EOW. This order could set a precedent especially in cases where frivolous cases are being filed by defaulters to implicate senior most banking officials to settle scores," said Zulfiquar Memon of MZM Legal. He appeared along with senior advocates Ashok Mundargi and Abad Ponda for the bank and its former employees.


Details on the order weren't immediately available. The complainant against the bank, Vishal Sharma, a director of Hotel Horizon Pvt Ltd in Suburban Mumbai, could not be reached immediately for comment.

Sharma had accused ICICI Bank as well as four former and two current employees of the lender of duping his company into mortgaging property worth ₹1,200 crore by promising loans totalling ₹351 crore in 2011, to build a luxury hotel.

According to him, even before an agreement was signed or the loan sanctioned, the executives recognised the loan amount in the bank's books to show a profit, as ET reported last November citing the FIR.

While Sharma made a request of ₹65 crore to be disbursed as the first instalment of the loan, the bankers who were part of the management committee submitted a "false proposal note" before the credit committee for an immediate disbursement of ₹25 crore, the FIR claimed. The bank deducted ₹15.5 crore from this towards processing fees and Sharma received ₹9.5 crore, it said.

Sharma alleged that he was later coaxed by the bank executives to pay ₹47.37 crore as dues. "In the event this amount isn't paid, then the processing fee amount and interest won't be returned," he was told, as per the FIR.

In September 2016, he had said, the loan was sold to the ARC. The ARC then raised a demand of ₹120 crore from the complainant, the FIR said.

“They also told us that from the recovered amount, 80% would be paid to ICICI bank. While the bank disbursed Rs 9.5 crore, it was demanding Rs 120 crore,” the FIR had claimed.
He filed the complaint at the BKC police station from where it was transferred in 2021 to the EOW and the FIR was filed. The bank then moved the court.

Senior counsel Ravi Kadam and Amit Jajoo of Indus Law appeared for JM Financial ARC, which had acquired the hotel operator’s loan account from ICICI Bank.