Delhi HC judge Yashwant Varma in cash row was named in CBI FIR against sugar mill

NEW DELHI: Justice Yashwant Varma, who is in the eye of a storm due to alleged recovery of huge cash from his house, is not new to controversy as his name had figured, as non-executive director, in a CBI FIR and an Enforcement Directorate ECIR relating to alleged defrauding of banks by Simbhaoli Sugars Ltd.
Justice Varma was non-executive director of Simbhaoli Sugars, a well-known private enterprise, prior to his elevation as a judge of Allahabad HC on Oct 13, 2014. Simbhaoli Sugars' account was declared a non-performing asset in 2012.
The FIR was quoted in two judgments of Allahabad HC where other accused had moved for anticipatory bail or quashing of the FIR registered by CBI on Feb 22, 2018, for the predicate offence. Five days after CBI registered the FIR under Prevention of Corruption Act, ED filed an ECIR under Prevention of Money Laundering Act on Feb 27, 2018.
The FIR was registered based on a complaint filed by Oriental Bank of Commerce, which had given Rs 150 crore in loan to Simbhaoli Sugars. The bank complained to CBI that while it extended the financial assistance on the basis of the undertaking that it was meant to help farmers, the sugar mill acted dishonestly and fraudulently. OBC later merged with Punjab National Bank.
The SC in March last year had set aside an Allahabad HC decision to order a CBI probe into the grant of loans by an SBI-led consortium of banks, including PNB, to Simbhaoli Sugars. The SC had said the HC erred as no investigation was warranted but clarified that the authorities were not precluded from taking action for fraud in accordance with law.
It had also refused to quash the SBI-initiated insolvency proceedings against the company and had upheld the CBI's decision to reject the settlement offer by Simbhaoli, saying the bank's decision could not be faulted.