Sucheta Dalal :Collateral damage of a scam: this bank officer
Sucheta Dalal

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Collateral damage of a scam: this bank officer  

April 17, 2006

An honest SBI officer A.N Bavdekar was recently convicted in the Harshad Mehta scam for just blindly counter-signing cheques. He has been sentenced to five years rigourous imprisonment and a fine of Rs 2 lakh.


Collateral damage of a scam: this bank officer

By Sucheta Dalal



‘‘For the last 15 years we have never failed to garland Lord Ganesh, but now my daughter says we must stop. He has forgotten us,’’ says A.N. Bavdekar, reeling from the shock of being recently convicted in the Harshad Mehta scam case and being sentenced to five year rigorous imprisonment and a fine of Rs 2 lakh. ‘‘But I am not giving up hope yet,’’ says Bavdekar, although he is clueless about how to appeal to the Supreme Court to seek justice.


This case relates to the missing money of State Bank of India (SBI), which led to the unravelling of the massive Securities Scam of 1992 that snared large chunks of India’s banking system. Sixty-four-year-old Bavdekar is one of those honest officers who have been crushed by the slow wheels of justice.


Some bank officials did indeed collude with the scamsters, but many like Bavdekar have suffered collateral damage that shows no sign of ending. Interestingly, Ashwin Mehta, who had been co-accused in this case with the late Harshad was acquitted. His brother Sudhir received a shorter sentence than Bavdekar when the case was disposed of last week.


The story goes back to April 1992. A few days after I broke the first story of the Securities Scam, the Central Bureau of Investigation (CBI) ham-handedly arrested 13-odd people including Harshad Mehta, his brother Ashwin, several of their employees and a few SBI officials. A.N. Bavdekar, a manager in charge of the vault at the SBI main branch was one of them.


It is only after his 107 days in jail, that we heard his story. Bavdekar was arrested because he was officially assigned to counter-sign cheques prepared by R. Sitaraman of the Investment Cell, who had allegedly colluded with Harshad Mehta to get over Rs 700 crore illegally credited to his bank account against a non-existent Security General Ledger receipts. Why did Bavdekar not question what he was counter-signing? Did he collude with Sitaraman and Harshad Mehta? These obvious questions have to be seen in the context of how the bank and the Reserve Bank of India’s own Public Debt Office functioned in the last century.


The investment department at the Bank Head Office dealt directly with Sitaraman through a specially-allocated hotline. Sitaraman carried out the instructions, issued cheques and collected securities. These were routinely counter-signed by a few authorised officials. Bavdekar, who was stationed in front of the vault, ended up signing far more cheques than the others who were let off. Hundreds and thousands of crore worth of securities were traded by SBI everyday and it would have been impossible to cross-check each instruction with the head office. As in all banks, there is a level of trust which was violated by Sitaraman. At least 10 SBI officials have testified to this in court.


In 1992, I had checked Bavdekar’s version with Harshad Mehta and the other scam-accused, they neither knew Bavdekar nor had anything to do with him. I then asked S.G. Gadhe, the then CBI Superintendent of Police in charge of the scam investigation. He candidly admitted, “Woh bechara phas gaya” (the poor chap was unwittingly dragged in). He also said, Bavdekar’s name would be dropped while filing the charge-sheet. Gadhe died in a road-accident immediately thereafter and his conviction about Bavdekar’s role went with him. Typical of the CBI slowness, the charge-sheet in this case was filed in 1996 after the press and the public had lost interest in the scam. Officers handling the investigation also changed several times over.


By then, Bavdekar was declared a notified person along with the high-profile brokers. His wife’s little jewellery and a tiny flat at Mira Road were taken over by the custodian appointed under the Special Court’s Act. From then on, the family of five lived on the earnings of his wife who was employed by the Bombay Port Trust. (Justice Palkar ordered him to be denotified in 2002, finding no evidence of wrongful enrichment).


Meanwhile, the Joint Parliamentary Committee (JPC) began the Scam investigations. The senior SBI management admitted that only Sitaraman interacted with them. They, however, held Bavdekar responsible for counter-signing cheques issued by Sitaraman ‘‘since confirmations were ostensibly in conformity with instructions’’.


SBI terminated Bavdekar’s services only in 2000 on the day that he was to retire from service. Even the dismissal letter clearly admits that, ‘‘There is no evidence to prove that the charged officer had any knowledge regarding the malafide intentions and dishonesty on the part of Shri Sitaraman.’’ It holds him responsible for ‘blindly’ counter-signing cheques prepared under Sitaraman’s instructions.


Ironically, Bavdekar who is convicted for corruption and collusion, was so honest that when several scam-accused were moved by his plight and offered him monetary aid, he refused. ‘‘I don’t need the help, my officers’ union is strongly behind me,’’ he said. With his funds frozen, he did not even have the resources to get appropriate shoes in Delhi’s winter when he appeared before the JPC. The SBI Officers Union indeed backed Bavdekar to the best of their ability. They paid some of his legal expenses and even helped him out with cash he needed to pay his children’s school fees. But even they could not afford the lawyer’s fees.



-- Sucheta Dalal