Seized Rs 1 crore can't be exchanged: Court

Mumbai: The magistrate’s court recently refused to allow the wife of an accused in a bank fraud case from accessing a seized locker to change notes of Rs 500 and Rs 1,000 denominations, which would become redundant after December 30 under the Centre’s demonetisation drive. While rejecting the application seeking directions to the Economic Offences Wing (EOW) — which has seized and sealed the locker — to exchange the old notes, the magistrate held that in the current situation wherein the country is faced with a cash crunch, stacking new notes worth Rs 1 crore would not be in the interests of the nation and the EOW should be concerned about the currency notes becoming redundant.

Additional chief metropolitan magistrate S.V. Sahare was hearing the miscellaneous application of Neela Bhoomreddi, the wife of Mahabaleshwar Bhoomreddi, who is at present being investigated along with 11 others for his role in a Rs 57 crore fraud.

Neela had requested the court to direct the investigating officer (IO) to exchange the soon-to-be-defunct currency notes worth Rs 1.01 crore lying in her locker, which has been seized and sealed by the EOW soon after her husband was arrested in the fraud case.

Neela’s husband Mahabaleshwar was the vice-chairman of Veershaiva Credit Cooperative Bank at Andheri (east), which had become bankrupt due to loans being sanctioned by the bank authorities without proper banking norms being followed.

The EOW arrested Mahabaleshwar and three other functionaries of the bank — namely former vice-president Malikarjun Siddhnal, former chairman Manohar Kori and former manager Basgowda Kadavli — on charges of cheating, breach of trust, criminal conspiracy and forgery. The EOW also froze the bank accounts and seized and sealed lockers belonging to the four and their spouses. Neela’s locker, numbered 598, in Janata Sahakari Bank Ltd, Panchpakahadi, Thane, was one of them.

After the seizure, when Neela’s locker was opened, an amount of Rs 1,0186,000 in denominations of Rs 500 and Rs 1,000 notes was found. Neela’s application prayed that she was neither seeking de-freezing of the locker nor seeking permission to get the currency notes exchanged herself, but was seeking directions to the EOW to get the notes changed lest they lose their value.

But magistrate Sahare noted, “If the amount is kept idle, it would definitely lose its value. But if the applicant is permitted to get the directions to the IO to exchange the currency due to demonetisation and keep it back in the locker, it would amount to money being stacked in the locker. In today’s scenario, where there is a cash crunch in the entire nation, stacking a huge amount of Rs 1.01 crore in the locker will be not in the interest of justice for the public at large.”