Himachal High Court Upholds Fraud Charges in ₹27 Crore Scam: Cooperative Society Members Face Trial for Fictitious Loans

Himachal Pradesh High Court rejected the petition filed by Sharwan Singh and another member of a cooperative society to discharge them from fraud and conspiracy charges under Sections 420 and 120B of the Indian Penal Code. The charges stem from a fraudulent loan disbursal case involving ₹27 crore, in which the petitioners were accused of signing fictitious resolutions as members of the managing committee.

The case arose from allegations of financial irregularities in Tillai Gram Sewa Sehkari Sabha Samiti, where loans totaling ₹27 crores were fraudulently disbursed to fictitious loanees. The cooperative’s secretary and certain members of the managing committee were accused of facilitating the disbursal without following proper procedures. Investigations revealed that fraudulent promissory notes were used, and large sums were transferred to the secretary's personal account.

The petitioners contended that they were not involved in the fraudulent transactions and were not members when the fraudulent loans were sanctioned. However, the court noted that prima facie evidence, including their signatures on the resolution, indicated their involvement in the conspiracy. The court cited:

“The learned Trial Court had rightly held that the petitioners could not be discharged based on the material placed before the Court.”

The court also emphasized that it was not the stage to assess the evidence fully but to determine if there were sufficient grounds for framing charges.

The court upheld the trial court's decision to frame charges against the petitioners, noting that the allegations were serious and involved a large sum of unrecovered money. The court referred to multiple precedents, stating that at the stage of framing charges, the evidence must be assumed to be true. The petitioners' defense, claiming they were not part of the resolutions, was deemed a matter for trial.

The petition to quash the charges was dismissed, and the court ordered the petitioners to appear before the trial court on October 23, 2024, to proceed with the trial.

Sharwan Singh & Anr. vs. State of Himachal Pradesh & Ors.

Date of Decision: September 30, 2024