Why court cleared Ajit Pawar, family in Maharashtra State Cooperative Bank case

In its findings, the court underscored that "mere irregularity or lapses cannot be converted into offences," stressing that the essential ingredient of criminal intent, mens rea, was missing. It noted that there was no evidence of dishonest or fraudulent misappropriation of property entrusted to public servants, nor any material to suggest forgery or deliberate wrongdoing.

In a significant development in the Maharashtra State Co-operative Bank (MSCB) scam case, a special court in Mumbai, in its detailed order, has held that there was an “absence of dishonest or fraudulent intention” on the part of the accused, including NCP leader Ajit Pawar and his family members.

The court had earlier accepted the closure report filed by the Economic Offences Wing (EOW) of the Mumbai Police, effectively giving a clean chit to former Maharashtra Deputy Chief Minister Ajit Pawar and others. The detailed order, made available recently, elaborates on the reasoning behind the decision, bringing substantial relief to the Pawar family.

In its findings, the court underscored that “mere irregularity or lapses cannot be converted into offences,” stressing that the essential ingredient of criminal intent, mens rea, was missing. It noted that there was no evidence of dishonest or fraudulent misappropriation of property entrusted to public servants, nor any material to suggest forgery or deliberate wrongdoing.

The case pertained to alleged financial irregularities involving loans disbursed by the MSCB to sugar factories, which were later auctioned or taken over by entities allegedly linked to Pawar and his associates. The complainants had claimed losses exceeding Rs 25,000 crore. However, the court, after examining individual transactions, found that due procedures were followed, particularly under the SARFAESI Act, during the auction of assets such as the Kannad Sugar Factory.

Rejecting allegations of conspiracy, the court observed that there was no “prior meeting of minds” among the accused to commit any illegal act. It highlighted that loan approvals followed established procedures, with files being processed and placed before the loan committee in accordance with banking norms. No document on record indicated that these procedures were bypassed with intent to deceive.

On the issue of alleged undervaluation in the sale of assets, the court clarified that market value is not the sole determinant under the SARFAESI framework. It noted that reserve prices were fixed based on due valuation processes and that factors such as prolonged closure of factories and pending litigations justified lower valuations in certain cases.