1994 LIC loan fraud case: HC finds no evidence, acquits two accused

Bilaspur | Correspondent: In a significant ruling, the Chhattisgarh High Court has clarified that mere suspicion cannot substitute for evidence in the eyes of the law. A single bench of Justice Rajni Dubey delivered a significant verdict in a loan fraud case involving approximately ₹1 lakh at the Bilaspur branch of the Life Insurance Corporation of India, acquitting two accused, Avinash Pandit and Arun Vasant Bapat.

The decision came on an appeal filed against the 2005 convictions by the special trial court. The court stated in its order that the prosecution had completely failed to present substantial and legally admissible evidence regarding the conspiracy and the active role of the accused, and in the absence of such evidence, the convictions cannot be upheld.

This entire case dates back to 1994-95 and was investigated by the CBI. The CBI alleged that Arun Vasant Bapat, then an assistant, along with other accused, fraudulently obtained a loan sanctioned in favor of a woman named Anju Pandit on the basis of a deceased or defunct policy.

The allegation was that the accused prepared fake policy transfer documents from Ambikapur to the Bilaspur branch and caused financial loss to LIC through forged signatures. Based on the evidence, the trial court sentenced them to one year of rigorous imprisonment and a fine, which the High Court has now completely overturned.

During the hearing, the court found that the CBI failed to prove how the accused evaded LIC's multi-layered security checks and verification procedures. The accused's lawyer, D.N. Prajapati, argued that the handwriting expert's opinion was also inaccurate and the trial court had based its convictions solely on conjecture, ignoring the facts.

On the other hand, the CBI lawyer argued that the accused had fraudulently obtained payments using lapsed policies. However, the High Court held that the evidence on record was insufficient to prove the charges against the accused, and they were honorably acquitted of all charges.