In a significant development in the Rs. 122 crore embezzlement case involving New India Cooperative Bank, the magistrate's court in Mumbai has declared former bank chairman Hiren Bhanu and his wife, Gauri Bhanu, as proclaimed offenders. This ruling comes after the Bhanu couple fled the country just days before the scam was uncovered in February 2025. The court also authorized the police to attach 21 properties worth Rs. 167.85 crore, marking a pivotal action under the new criminal laws in Mumbai.
Background of the Case
The embezzlement case surfaced when a forensic audit revealed significant discrepancies in loan accounts, many of which were classified as Non-Performing Assets (NPAs). These accounts were allegedly sold to Omkara Assets Reconstruction Company (ARC) for far less than their actual value. In one instance, the bank sold an NPA worth Rs. 30 crore for just Rs. 2 to Rs. 3 crore, raising suspicions of fraudulent activity.
As part of the investigation, the Economic Offences Wing (EOW) of the Mumbai Police arrested several key individuals, including the bank's former general manager, Hitesh Mehta and ex-CEO, Abhimanyu Bhoan. However, Hiren and Gauri Bhanu fled the country before the scam was exposed, and despite efforts to locate them, they remain out of reach. As a result, the police initiated the process to declare them proclaimed offenders.
Attachment of Properties
The court’s approval to attach 21 properties linked to the accused represents a crucial step in the legal proceedings. The properties include a Rs. 150 crore Slum Rehabilitation Project in Charkop, Mumbai, which is being developed by one of the arrested accused, builder Dharmesh Paun. Additionally, the police have moved to seize multiple properties, including flats, shops, and bungalows belonging to the accused, totaling Rs. 167.85 crore in value.
This action is the first of its kind in Mumbai since the new criminal laws, particularly Section 107 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), came into force. This section allows authorities to attach any property obtained directly or indirectly through criminal activity, significantly strengthening the state’s ability to recover assets related to crime.
Ongoing Investigation and Forensic Audit
In addition to the property attachment, the EOW is continuing its investigation into the case. A forensic audit has been initiated to assess the extent of the financial mismanagement and to identify other properties and assets involved in the scam. The EOW has also conducted polygraph and brain mapping tests on Hitesh Mehta, the former general manager, to gather further evidence regarding the fraudulent activities.
The police have issued a Blue Corner Notice for the Bhanu couple, signaling an ongoing international effort to locate them. While the exact location of the couple remains unclear, the authorities are actively pursuing leads to bring them back to face charges.
Implications of the Case
The case has highlighted significant gaps in the oversight and accountability mechanisms within financial institutions, especially cooperative banks. As the investigation continues, it may lead to further reforms in how banks handle loan transactions, particularly regarding NPAs and asset sales. Additionally, the attachment of criminal assets under the BNSS law represents a critical step in the fight against economic crimes, ensuring that perpetrators cannot retain ill-gotten gains.
For the city of Mumbai, this action underscores the judiciary's and law enforcement agencies' commitment to addressing economic crimes and holding individuals accountable, regardless of their stature. The case also serves as a reminder of the importance of vigilance and transparency in financial institutions, particularly in the banking and real estate sectors.