Prayagraj, Dec 17 : The Allahabad High Court has directed the CBI to probe how seven banks sanctioned multiple loans to a company despite knowing that it had defaulted in the payment of its previous loans. "Simbhaoli Sugars, the company based in Uttar Pradesh, was knowingly allowed to siphon off almost Rs 1,300 crore of the public money," the court said on Saturday. Disposing of a writ petition filed by the company, a bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar observed, "Banks had advanced hundreds crores of rupees to the petitioner company knowing that it has already defaulted with the loans taken from other banks previously and had been declared non-profitable asset (NPA), but still the banks went ahead and approved loans running into several hundred crores and the entire loan was disbursed without following the mandatory procedures." The court added that the company had adopted the same modus operandi again and again with seven banks. The bench said the banks extended the loan facilities to the company without following the RBI guidelines and also without adequate security and in few of the cases a personal guarantee was given by the promoters to many banks. The banks shockingly, even after declaring the company's account Non-Performing Asset (NPA), did not take any effective steps to recover the amount, the court added. The seven banks are the State Bank of India, UCO Bank, ICICI Bank, Oriental Bank of Commerce, Punjab National Bank, Bank of India and Bank of Baroda. The court took note of the loans while hearing Simbhaoli Sugars' writ petition seeking quashing of SBI's decision to reject its settlement offer. It also found that the company had not paid sugarcane dues to the farmers and even today has an outstanding of Rs 279 crore for the previous crushing season. "The petitioner has just not defrauded the banks but has also taken the cane growers for a ride by not paying them the cane dues and still continues to take sugar cane from them," the court observed. Though banks are required to report fraud cases of more than Rs 5 crore to the Banking Security and Fraud Cell of CBI, the court noted there was no "recital or whisper in this regard in any of the affidavits filed by the banks". The high court has directed the CBI to investigate every bank on how the loans were sanctioned in violation of the RBI guidelines and circulars. It particularly said the officers of the banks, who accorded the approval and those who did not take effective steps to recover the amount, be probed. "In case, the CBI finds that there is a case of money laundering as per the provisions of Prevention of Money Laundering Act, 2002 they may also refer the matter to the Enforcement Directorate and take help to recover the said amount," the court ordered. The bench also directed the petitioner company to cooperate in the probe. The authorities should find out the money trail, where it has been siphoned off and parked, the high court ordered in its judgment. /IANS