Could The PNB Fraud Have Been Averted? No, Because Our Judicial Dictum Is, “Let 99 (out of 100) Criminals Escape…”

The PNB fraud makes one wonder if the justice system should change to "Guilty till proved Innocent"

The PNB fraud makes one wonder if the justice system should change to
The PNB fraud makes one wonder if the justice system should change to "Guilty till proved Innocent"

Punjab National Bank (PNB) Fraud makes us wonder how so many checks and balances in the banking system have been subverted by someone successfully for so many years, without being detected. There are the necessary checks on the PNB side, checks at the International SWIFT Banking side, periodic and annual reviews of payments and securities, internal audit (by the bank), statutory audit (by auditors of the banks), concurrent audit (by external auditors at the branch), and inspection by RBI,”.  It is very unlikely that all the above involved are in collusion. We will hopefully know soon.

Place the onus of proving innocence on the accused, and you will find that the fraudsters will be a lot more scared to carry out their brazen frauds. The number of frauds will come down by more than 90%. Just the fear of being caught and jailed will do the trick.

We need to look at fixing all ends of the problem. However, in my opinion, the weakest link in the system is the judiciary, and it is easiest to fix it. Strange though my assertion may seem, our archaic legal system places such an onerous responsibility on the prosecution that scamsters feel bold to defraud our Governments and PSUs with impunity.

I have been calling for many changes in our justice delivery system, the most important one being, “once prima facie guilt is established on anyone by a court, placing the burden of proof of innocence on the accused.”

We have made the task of proving every case so very difficult for the investigating officials that they end up spending enormous amounts of time gathering evidence, giving the high and mighty the chance to get all inside information from the Government (which is so very easy), giving all the time on earth for the culprits to erase the evidence, and finding just one little loophole in the case and getting the benefit of doubt, and if all this is not possible, fly away at leisure, even bidding goodbye to their friends and relatives.

Place the onus of proving innocence on the accused, and you will find that the fraudsters will be a lot more scared to carry out their brazen frauds. The number of frauds will come down by more than 90%. Just the fear of being caught and jailed will do the trick.

For example, in this case, if Nirav Modi or the bank officials thought that once any of the investigating agencies found a prima facie case that he had faked documents, they could have arrested him and his accomplices and proved prima facie in this case that he had faked documents through officials; they won’t have to prove their entire case to the hilt.

And the culprits would have had to implicate themselves if they had to try to defend their cases. So, they dared not have attempted such a brazen fraud. Same with Lalit Modi, Vijay Mallya and others of their ilk. And such cases would be over in just a few months. We won’t need to increase the number of courts or judges.

So, the Government and Judiciary should seriously consider this suggestion that once a prima facie case is established, the onus of proving innocence should be on the accused. Incidentally, this suggestion itself has come from a reputed Retired High Court Judge of Chennai. He says many legal luminaries are in agreement.

All other solutions of increasing the checks and balances in the system won’t work much, as they will only make the already inefficient judicial system even more inefficient. They will only make the lawyers richer.

As long as we continue with the current system where the ostensible goal is “let 99 criminals escape, no innocent should be punished” (but the result on the ground is letting almost all criminals escape and not ensuring an innocent is not punished anyway), we will only have many more such scams.


  1. How To Improve The Quality & Speed Of Justice Delivery System? A Retired Judge Provides Solution Nov 13, 2017,
  2. Jail For Very Corrupt VIP Politicians & Babus: Now A Distinct Possibility? Feb 14, 2017,
  3. How Justice Delivery System Can Be Improved 1000%, At No Extra Cost: Dec 15, 2017,
  4. 2G Verdict: 1991 Moment For Judicial Reforms: Dec 24, 2017,
  5. 4 SC Judges: Missed The Woods For The Trees? Jan 13, 2018,
An Engineer-entrepreneur and Africa Business Consultant, Ganesan has many suggestions for the Government and sees the need for the Govt to tap the ideas of its people to perform to its potential.


  1. Your solution is more dangerous than the problem at hand. I think better solution is to increase budget of judiciary by 1000 percent. In fact i would say hire all retired judges and senior lawyers as judges, remove concept of retirement for judges, give incentives to judges to work in three shifts like call centers. Many peiple will be happy if their cases are scheduled in night since it will save them their bread and butter. Let economy as a whole also operate 24 x 7. The increase in economic activity at night time will give government additional revenue to compesate this additional budget for judiciary and police.

  2. The point that an erroneous dictum of our legal system (of allowing criminals escape so as not to punish one innocent) is at the core of many ills including political and white collar crimes is not my invention, nor have I propounded it after this scam.

    This suggestion from me is very old as you can read from the references I’ve given at the end of this article.

    This suggestion has been made by many legal luminaries including a retired Madras High Court Judge, and retired CBI Director Raghavsn. I’m only trying to popularize it because I’ve always been against this dictum.

    Nowhere in this article have I held a brief for BJP, nor have I criticised Congress for having been in power when this scam started. My article has been party-politics-neutral.

    My suggestion has been addressed to both the Government and the judiciary. Either of them can initiate steps to rectify our dictum. All the advocates for this change (including me) believe this will transform politics, judiciary, business and the life of the common man phenomenally.

    Many appear to like the idea. Some don’t agree with it, which is fine. A few seem to think I’m making this suggestion to shield the Government. My explanations above are to correct their mistaken impression. Whether they want to look at the issue from an unbiased perspective or through their own prisms is up to them.

  3. Modiji does not have that capcity to bring these desired changes, so we decided cong is far better than Modiji and BJP, because none of the senior ministers, leaders like sishma, nitin katkari, advaniji, MM joshi, POarikkar, Ila Ganesan also silent about AJ. Hence I will vote ofr Cong in May 2019

    • Sushma Swaraj , Advani & Jaitley have aaalways been anti Modi . Covertly. Quite pally with congressis. This is one incurable malady afflicting many Indians- ego hassles. They are incapable of subsuming their ego for well being of Bharath.

      Congress has only one advantage compared to BJP. All are slaves of sonia dynasty. Call it nehru dynasty if you prefer it. Take away nehru family. Congress would be in total disarray & disintegrate altogether. The congressis would not be averse to nominating & empowering Priyanka Vadhera’s child. Indian journos also would approve .

      All these decades lackadaisical Indians have been blissfully repeating ” let the law take its own course”. Just because no nonsense Modi of BJP is in power his detractors are in a tearing hurry to blame Modi.

      Should GOD WILLING , Modi give orders to Firing Squad to eliminate all the corrupt the same detractors would scream ‘fascism’.

      The very constitution of India is by anti Vedic scum called ambedkar who was very close to EVR the selective atheist & demented ‘rationalist’. Whatever the british dictated to ambedkar came to be called constitution. For which the slave was given a bungalow in uk. Recently it was fadnavis gorement of Maharashtra that spent several millions of Indian tax payers’ money in repairing that bungalow in uk. uk is very smart. Far far smarter than idiots of India.
      It is uk that auctioned the spectacles etc of long dead CADAVER appeaser of mk.gandhi.
      Some idiot of India paid a huge amount for them.

  4. author is peddling a lame excuse for abject skulduggery and crookedness of the people in power.modi knew many of jokers manning our bureaucracy are corrupt time wasters but then for reasons best known to him he first appointed a first rate bungler as FM and then ensured all the jokers who have track record of conniving with crooks in previous govt. are not touched.First let modi do what he should have done and then if the judiciary scuttles corruption cases, then ,the author has every right to point finger at our laws.I think our so called opinion makers are confused specimens running around in circles.

  5. Hi Ganeshan sir,
    The executive goverment lack will power and dont want to punish the corrupt , how can we blame judicial system ? The goverment outside court to public says we will take stern action and inside dont share simplest simple proofs to the court !!! What will a judge do? Should he work like Khap panchayat?

    Unfortunately for last 20 years India is ruled by Hizda rats at the top PM posts. Every ordinary Indian
    whether corrupt or honest hopes that he will get a Real man to rule this country but only to be disappointed . See how Vinod rai like daring honest people are hounded now. Imagine the ordinary peoples fate. For current Indians Storing money by hook or crook is imortant even if they dont live to use that money !!! We have became a nation of billion plus piranahas !!! No morality when it comes to making money . Even now a days parents measure their kids by how much the kids earning not how…..

  6. This dictum of let 100 criminals go free but one innocent should not be punished is the reason so many corrupt officials are still roaming free. These expert corrupts, SG/RG, Chiddu and his family etc. were not born yesterday. When they created scams and scandals, they must have made sure that some “Reasonable Doubt” exists. For that all they have to do is destroy one or two key documents. That is all. And we wonder why Modi Sarkar has not done anything. If Modi Sarkar cannot come up with an air tight case, it should not go to court and give these corrupt officials advantage of publicity if and when they are given clean chits.

  7. Against your head lines the answer is NO. Any one in power can manipulate nationalised banks as they are controlled by finance ministry and RBI only issues guidelines.
    The less we speak of judicial system the better it is. Take the case of Rajat Gupta, richest American Indian, who was convicted for insider trading in US, paid a fine of 200 million Dollars and spent 2 years in jail. The case was cracked by FBI thru phone tapping and courts cleared case in 3 years.

    We have a case now of Lalu Yadav, after 20 years, cases are going on with HC and SC yet to hear cases. Even if God becomes our PM, will he give a solution. All high profile cases in India are linked to politicians. You touch one there will be chorus VENDETTA. Take case of NDTV, Curbing freedom of press.

    The only solution is elect a honest PM who runs a transparent govnt and evolve a system where frauds are not committed.Let us not be surprised if many cases like PNB are exposed.

  8. I have always held & told so to many ( much before Internet came) let the onus of proving their innocence fall on the guilty / accused.

    When congress was in power one of their own ministers in aviation ministry had taken loans amounting to several crores from PNB all of which was written off as bad debts. Add to that loan melas & irresponsible lendings by pchidambaram , janardhan pujarys ( close to VP Singh )…no wonder Raghuram Rajan to my knowledge was the first person to alert us all openly that Indian banks are speeding towards total bankruptcy….that the Emperor was sans clothes.

    Subsequently Sri.Narendra Modi HAD to resort to demonetization to avert catastrophe.

  9. All banks have a system of rotating role responsibilities assigned to each official/staff. How for more than 6 years the same set of staff were allowed to handle a desk responsibility is surprising. Incidentally, if press reports are to be believed, because one of the officials superannuated recently the fraud got noticed. This appears to be a case of total negligence if not connivance on the part of those responsible for managing Branch Banking.

  10. The conviction rate is low in India, that embolden many to commit frauds and illegal acts, who otherwise wouldn’t dare. There is an urgent need to reform evidence act, and criminal and judicial procedures. The current govt is handicapped in this respect due to lack of majority in RS. Politicians and parties developed vested interests in the in continuing with incompetent judiciary.

  11. Scam apart this is a sham on the part of the govt for the following reasons. 1). That it has been going on for six years undetected what was RBI insp wing doing and fin ministry banking deptt doing. 2). Press is reporting he was part of PM Davos delegation.3) that he and his family were allowed to slip out of India. public anger against the incompetence of govt is building up. Unless some drastic recovery and arrest of this criminal is brought up in a quick manner modi govt will face flak

    • This is how Goebels propaganda is done by MSM to throw mud on Modis face, all sponsered by UPA chelas and idiotic educated indians get fooled. LOU is a non fund based limit enjoyed by jewellers to import rough diamonds and reexport polished diamonds in 90 days. Against these LOUs, mostly indian banks operating overseas, lend dollar loans to the customer who operates in India and overseas. Technically to overcome Foreign exchange rules, the party takes LOU from indian Co and take dollar loan from overseas against LOU ( bank gaurantee ) Without this facility, india would not have become worlds largest gem and jewellery exporter.

      These LOU have a time period and only in case the party defaults loan, the overseas lender encashes the LOU. As per reports 150 LOUs are in place and no one clear as to how much loan is raised against these LOUs. First the overseas lender has to file recovery case against party and balance if any PNB has to pay. With the amount of wealth the party has, he can clear the loans if he wants to and close the issue.

      One thing is clear, being a non fund based limit, it must have been sanctioned orally under pressure from Finance ministry in 2011 and only few top officials may be aware of it. The chidambara rahasyam will definitely be known to political masters. After all, the MD of nationalised bank is appointed by finance ministry. It is case of ringa ringa roses and buck stopped at Mr. Shetty. Similar cases will tumble out from infra Cos in future and we have to thank Chowkidar PM Modi for cleaning up banks.

      • Thanks for these clarifications. I think all of us are groping in the dark. Complete details are yet to come out.

        But one thing is clear: Since Nirav Modi has chosen to flee, this is a fraud and he has much to hide. We’ll know details only over time. Regardless of the details, our legal system needs an overhaul.

        • Nirav Modi has not fled but i put it as retreated. Only a thief fleds and hides where as Nirav has no place to hide as he has massive assets abroad and running businesses. If he stays in India , he would be in jail like Roy of Sahaar and his global business empire would collapse and so is PNB money. Now at least PNB can sue Nirav foreign Cos and recover money.Doing diamond business is not a joke and is an art. I believe the words of PNB chairman who is confident of getting money back.
          Can our legal system be overhauled ? By whom and when ? It will happen when south pole will become north pole.


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