Contractors booked over Rs 13-cr 'fake' bank guarantees

Bengaluru: Police have booked three contractors for allegedly providing 23 “fake” bank guarantees worth over Rs 13 crore to the Karnataka Residential Educational Institutions Society (KREIS).

The incident came to light after a complaint was filed on April 12.

According to the complainant, as part of the project to construct residential schools/hostels in Bengaluru, KREIS had obtained bank guarantees from three contractors — Basavananda K, Ashraya Constructions and T G Arun Kumar.

KREIS received the bank guarantees per KW-4 Clause 29 (security deposit), the FIR seen by DH noted.

On Dec 7, 2023, KREIS sent a letter to the Nagarbhavi branch of the Kotak Mahindra bank, named as the issuer, for renewal of a bank guarantee provided by Basavananda worth Rs 2 crore and bore the serial number KMBL477552384/2020.

The complainant said the bank responded by denying issuing such a bank guarantee and called it fake. Subsequently, the KREIS sought details on other bank guarantees provided by the contractors. 

“The 23 bank guarantees worth Rs 13,62,30,355 provided by the three contractors were found to be fake when checked with the banks,” the complainant alleged. “Basavananda K, Ashraya Constructions and T G Arun Kumar created the guarantees for cheating and submitted them.”

Following the complaint, the High Grounds police registered a case and booked the three contractors under Sections 420 (cheating and dishonestly inducing delivery of property), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record) and 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code (IPC).

Police sources said that when the trio were contacted over the phone, they were unresponsive. “They were also not present at their residences. They are being traced and relevant documentation is also being obtained,” a police officer told DH.