PNB’s Rupee 45 million fraud claim dismissed by English court

Zaiwalla & Co, the London-based international law firm representing eight of the defendants, argued that the bank had not made out an arguable case in deceit, that England was not the appropriate forum for the claim, that the Bank misled the court on a number of key issues, and that the Bank failed to properly effect service of the claim which was agreed to by the court.

The claim made by PNB against the nine defendants concerned loans made by the bank totalling $45 million for oil re-refining and wind energy generating projects in the US. The Bank had claimed that it had been misled and defrauded by the actions of the defendants following the grant of loans amounting to $45 million to companies in the US and India controlled by the individual defendants.

It also alleged that money had been siphoned off and payments due had not been made under the loan facilities and guarantees. The eight defendants were Ravi Srinivasan, Trishe Resources INC (USA), Vathsala Ranganathan, Pesco Beam Environmental Solutions INC (USA), Pesco Beam Environmental Solutions Pvt Ltd, Anantharaman Shankar, Luke Staengl and Anantharam Subramamium.

All the individual defendants (some of whom have guaranteed loans) are resident in India with the exception of the 8th defendant who is resident in the US. The bank had lent the money from England and operated the loan accounts from London. The bank, at an ex-parte hearing, obtained permission to serve the proceedings commenced before the English Court and served the proceedings by email on various defendants in India and the US.