Banks duped of Rs 13 lakh, LIC agent arrested

Muddaraja, said  to be the influential agent of LIC, had issued as many as 27 cheques for a total sum of Rs 13.15 lakh towards the premium. However, the bank account on which the self-cheques were drawn, had no funds.

Moreover, according to rules, the LIC agents are forbidden from issuing self cheques towards the premium amount of their clients. The LIC officers have to reject such cheques, if any issued.

However, in this case the rule has not been followed in toto. The officers concerned, who have accepted the cheques, sent the instruments to Canara bank for realisation.
It is alleged that K N Prashant and Nanjundappa, two bank employees, were hand-in-glove with Muddaraja and cleared the cheques, though there were no funds in the bank account. These transactions have taken place from the end of February 2007 up to 14th May 2009. A sum of Rs 13.15 lakh has been paid through 27 cheques.

The Head Office of the Corporation, alerted by the audit report and other turn of events, had conducted an inquiry by its vigilance team. Muddaraja and his accomplices even managed to “misplace” the cheques.

Following an inquiry by Canara Bank manager Nandeeshwara, the two employees and Muddaraja have confessed to the fraud played and have undertaken to repay the amount hoodwinked.

Acting on the complaint lodged by Nandeeshwara and the documents furnished, town police, in a swift operation, arrested Mudduraja and produced him before the court. He has been remanded to judicial custody.

It is being suspected that Muddaraju might have adopted similar modus operandi at Vysya Bank in Patapalya and State Bank of Mysore, Yallampalli branch in the taluk.