Srinagar, May 15: The High Court has refused to quash FIR registered in connection with the J&K Bank-IFFCO Tokio insurance deal, observing that the allegations disclose cognizable offences and require a deeper investigation.

Justice Sanjay Dhar while passing the judgment upheld the FIR under challenge while hearing Senior Additional Advocate General Mohsin S. Qadri who appeared on behalf of the Anti-Corruption Bureau.

The court said that the role of the petitioners, who were members of the evaluation committee constituted by J&K Bank for selecting an insurance partner, still requires a detailed probe by the investigating agency.

“It is only after the final report is filed by the Investigating Agency that things would become clear and it can be ascertained with certainty whether or not there was a conspiracy between the petitioners herein and the main accused/the beneficiary. Scuttling the investigation at this stage would amount to quashing a genuine prosecution, which is impermissible in law”, Justice Dhar said.

According to the FIR registered by the ACB in 2019, allegations surfaced that J&K Bank entered into an insurance agreement with IFFCO Tokio General Insurance Company in alleged violation of norms, following which a close relative of former J&K Bank Chairman Parvez Ahmad Nengroo was appointed in the company on a substantially higher salary package.

Upon verification, it was found that prior to execution of agreement between the J&K Bank Ltd. and M/S IFFCO TOKIO General Insurance Company Ltd, Asif Manzoor Beigh, was working as Deputy Manager in Bajaj Allianz General Insurance Company Ltd on an annual salary package of Rs.8.75 lakhs only.

It was found that relative of the then Chairman, in order to obtain undue favour and pecuniary advantage under a pre-planned conspiracy hatched with the Chairman, resigned from Bajaj Allianz General Insurance Company Ltd. on 13.03.2019, a day after the execution of agreement between the two companies, whereafter he was appointed in IFFCO Tokio General Insurance Company Ltd on an annual salary package of Rs.19,28,886 which is two and a half times higher than his previous package.

This, according to the impugned FIR, established connivance of Parvez Ahmad, the then Chairman of the J&K Bank Ltd and others with IFFCO Tokio General Insurance Company Ltd., as a result of which beneficiary Asif Manzoor Beigh came to be appointed in IFFCO Tokio General Insurance Company Ltd. in lieu of the agreement executed between the two companies. It was also found that the deal between the Insurance Company and the Bank was approved by the Board of Directors post-facto.

The ACB counsel contended that the then chairman-Nengroo and officials of the insurance company conspired to confer undue benefit upon Beigh, while the bank allegedly suffered financial losses in commission earnings after shifting insurance business from Bajaj Allianz to IFFCO Tokio.

The petitioners, who were senior officials of J&K Bank at the relevant time, argued before the court that their role was limited to evaluation of bids submitted by insurance companies and that they had no role in the appointment of Asif Manzoor Beigh.

They further contended that the financial loss assessment made by the investigating agency was “imaginary” and not based on proper insurance business calculations.

During the proceedings, the court observed that there appeared to be prima facie merit in the petitioners’ contention that differing evaluations by expert committees could not automatically establish criminal conspiracy. The court also noted that the alleged commission loss calculations appeared uncertain and dependent upon several business-related factors.

The Court further stated that the investigating agency still needs to examine whether the presence and influence of the then chairman during the bid evaluation process had any impact on the committee’s decision-making.

Refusing to interfere at the present stage, the court said that quashing the proceedings at this point would amount to “scuttling a genuine prosecution,” which is impermissible in law.

The court dismissed the petition with liberty to the petitioners to approach the court again after the filing of the final report or seek discharge before the court below in case a chargesheet is filed.