Authority: Madras High Court, Chennai (Justice G.K. Ilanthiraiyan)

Order Date: 07.08.2026

Case Overview

  • Petitioners: M.V. Ganesan (and other employees, numbered 10, 12‑16) of Zylog Systems Ltd filed criminal revision petitions (Crl.R.C.No.2412 of 2024 & related numbers) seeking conditional pardon under Section 306 of the Code of Criminal Procedure.
  • Respondent: State represented by the Inspector of Police, CBI/BS & FC, Bangalore.
  • Underlying trial case (C.C.No.41 of 2015) involved allegations that Zylog Systems Ltd, through its Chairman‑CEO and MD‑COO, fraudulently obtained a Rs 100 crore term loan from Dena Bank by submitting false documents and fictitious invoices for e‑governance projects (RTO projects in Gujarat and Karnataka, RSBY scheme).
  • The loan was disbursed between April‑September 2012 directly to alleged vendors; the company failed to repay, resulting in a Non‑Performing Asset of Rs 97.42 crore.
  • Shell companies – Woodbridge Technologies Pvt. Ltd., Effica Systems Pvt. Ltd., and Azhvas Infotech (promoted by the MD‑COO’s brother) – were allegedly created, with junior employees of Zylog appointed as nominal directors to generate fake invoices and divert funds.
  • Funds were allegedly transferred to sister concerns, remitted abroad, used to repay other entities, paid as illegal gratification, and employed as margin for further loans.
  • The prosecution’s case relied on 409 documentary pieces and statements of 75 witnesses, establishing a strong evidentiary base.
  • Petitioners argued they were merely junior employees, unaware of the fraud, and that the principal accused had fled to the United States after obtaining travel permission.
  • The trial court had dismissed the petitioners’ applications for conditional pardon; the petitioners appealed via criminal revision.

Final Outcome

  • The Madras High Court, after reviewing the counter‑affidavit and the extensive evidence, held that there is sufficient documentary and oral evidence to frame charges against all petitioners; therefore, the purpose of Section 306 (to secure approver testimony when evidence is lacking) does not arise.
  • The Court found no infirmity or illegality in the trial court’s dismissal of the pardon petitions.
  • Consequently, all criminal revision cases (Crl.R.C.No.2412 of 2024 & related numbers) are dismissed, and the connected miscellaneous petitions are closed.
  • The order directs the registry to incorporate cause titles for all cases and issue order copies.

Topics: Banking Fraud, Corporate Crime