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2017 (12) TMI 1854 - HC - Indian LawsValidity and legality of dues diligence certificate based on which the housing loan was extended by bank - whether the aim of these papers were to cheat the bank or not - role of an Auditor in case of verifying credential of the proposed borrower - HELD THAT:- The perusal of the Due Diligence certificate given by the petitioner indicates at the bottom, that Bank Statement of the applicant not been submitted. Which means that, the Indian Bank which has sought the professional assistance of the petitioner had not furnished adequate document of its borrower but for sake of record had requested the petitioner to provide due diligence certificate - This observation of this Court emanates from the verification of the documents relied by the prosecution which is found in the file of the document 16. The petitioner herein has received the request from the Indian Bank for due diligence certificate on 29.08.2013. The petitioner has handed over the certificate on 22.09.2013 with information that on his verification, he has found that the applicant is a proprietor of MMM enterprise located at No.44, Alapakkam main road, Maduravoyal and dealing with old scarp materials. While the bank officials have not been prosecuted for extending the loan, despite the receipt of CIBIL report, indicating the loans availed by the borrower Murugan and his actual bank balance on date of sanctioning loan, the petitioner herein who has discharged his professional duty based on the documents given by the Bank Official cannot be suspected for being party to the crime and put to the ordeal of prosecution. In this case, the records relied by the prosecution as against the petitioner herein is the statement of LW.16 Malliga Rani, Branch Manager that she sanctioned loan to Murugan based on the due diligence certificate given by the Audit/petitioner herein. When the record indicates that they have obtained CIBIL report rating of the borrower before advancing the loan and despite adverse information they have extended loan, her statement does not appears to be correct or true. Therefore it is very clear from the statement of LW.16 that they have over looked the relevant materials which were available with them before granting loan. To make proper assessment and appraisal or to seek expert opinion the Bank should have furnished the CIBIL report to the Auditor. Without furnishing relevant documents but expecting the auditor to do the job of deductive, does not fall within the scope and ambit of Auditors profession. The material relied by the prosecution does not indicates any primafacie evidence against the petitioner to suspect that he had knowledge about the fabricated Statement of account or he had been privy to the alleged conspiracy with the builder, borrower and the Bank officials. The Due Diligence Certificate issued by the petitioner herein based on the documents given by the Bank for his perusal, does not reveal any suppression of facts or dereliction of duty or culpable state of mind to cheat the Bank. Petition allowed.
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