Delhi District Court
Cbi vs . K. G. Dhanjayan & Anr on 14 October, 2016
IN THE COURT OF SHRI NARESH KUMAR LAKA
CHIEF METROPOLITAN MAGISTRATE
EAST DISTRICT, KARKARDOOMA COURTS, DELHI
RC-3/E/95/EOW-I
CBI Vs. K. G. Dhanjayan & Anr
(a) Sr. No. of the case 11/2016 (new)
(b) Date of offence During the year 1993-1994
(c) Complainant A. K. M. Chakankar
(d) Accused, parentage and (1) Mr. K.G. Dhananjayan S/o late
address Sh. Ganeshan, R/o 9/71, Amarath,
Trichur District, Kerala
(2) Mr. E. V. Jothi S/o Sh. Vijayan,
R/o 88, Arcot Road, G-B, Block No.
5, Santhi Towers, Vadepalani,
Cheenai.
(e) Offence complained of Sections 120B r/w 420, 468 & 471
IPC
(f) Plea of accused persons Pleaded not guilty
(g) Final Order Both accused persons convicted
(h) Date of institution 03.07.1999
(i) Date when judgment was 06.10.2016
reserved
(j) Date of judgment 14.10.2016
J U D G M E N T
Brief facts: A complaint was filed by one Sh. A.K.M. Chakankar, Deputy Director General of Foreign Trade (DGFT) to the CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 1 of 37effect that two persons, namely, Shri K. G. Dhananjayan and E. V. Jothi entered into a criminal conspiracy during the year 1993-94 to cheat M/s Saleh Brothers, Zahedan, Iran [in short, the "exporter"] by importing 2138 MTs of wet dates (khajoor) from the exporter on the basis of a forged amended partnership deed dated 21.10.1993 and after receiving the delivery of the imported wets, they did not intentionally make payment to the exporter.
2. It was alleged that in pursuance of the said criminal conspiracy, accused K. G. Dhananjayan and E. V. Jothi had fraudulently shown themselves as partners of a firm, namely, M/s Maximax Impex, B-86, Lajpat Nagar, New Delhi alongwith two original partners, namely, Smt. Sagira Khatoon & Sh. C.A. Majeed, after dropping the two original partners, namely, Sh. K. P. Naeem and Smt. Noor Jahan. The earlier original partnership deed dated 13.09.1991 shows names of four partners, viz. Sh. K. P. Naeem, Smt. Noor Jahan, Smt. Sagira Khatoon & Sh. C. A. Majeed. However, the amended partnership deed dated 21.10.1993 showed the names of only two original partners i.e. Smt. Sagira Khatoon & Sh. C. A. Majeed and two other partners as accused no.1 and 2 respectively.
3. In pursuance to the said criminal conspiracy, both accused persons on the strength of the said fraudulent amended partnership deed dated 21.10.1993 entered into an agreement dated CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 2 of 3722.03.1994 with Sh. Nabi Baksh Salehji, one of the partners of M/s Saleh Brothers, Zahidan (Iran). Consequently, an FIR was registered on 07.09.1995 and the matter was investigated by the Central Bureau of Investigation (CBI).
4. After completion of investigation, a final report (charge sheet) was filed alleging offences under Section 120B read with Section 420 & 465 IPC and substantive offences under Section 420 and 465 IPC against aforesaid two accused persons. After taking cognizance, copy of the chargesheets were supplied to them in accordance with Section 207 Cr.P.C.
5. On the basis of material on record, a charge was framed against both accused persons, namely, K. G. Dhananjayan and E. V. Jothi for the offence under Section 120B read with substantive offences under Section 420, 468 & 471 and Section 120 IPC individually, (in various different heads with the substantive offences thereof), to which they pleaded not guilty and claimed trial.
6. In order to prove its case, the prosecution examined as many as 26 witnesses and their short descriptions are as under:
1. PW-1 Rameshwar Singh Sanghu
2. PW-2 Smt. Sagira Khatun
3. PW-3 A. K. M. Chakankar CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 3 of 37
4. PW-4 Ms. Nupur Arora, Assistant Manager
5. PW-5 Ms. Neeraj Mahajan, Officer, ICICI Bank
6. PW-6 J. D. Raimane, Officer, Bank of India
7. PW-7 S.P. Kanan, Regional Manager, ICICI Bank
8. PW-8 Dr. C. A. Majeed
9. PW-9 S. C. Garg, Value Added Tax Officer
10. PW-10 N. Chockalingam, Chief Manager, ICICI.
11. PW-11 M. C. Joshi
12. PW-12 Ekeshwar Kutty, A. Commissioner, Excise
13. PW-13 Sabu
14. PW-14 Atmaram
15. PW-15 Smt. Lajshyam Sunder Peshwani
16. PW-16 Chandu Ramchand Hirani
17. PW-17 Haji Ahmed Juneja
18. PW-18 Paul Kurian
19. PW-19 Mohd. Saqhy
20. PW-20 Narender Ashar
21. PW-21 Jai Parkash Tulsi Ram Lahoti
22. PW-22 Ashok Shinde
23. PW-23 Anurag Bakshi
24. PW-24 R. K. Tiwari
25. PW-25 Ms. Rekha Sangwan, Insp. CBI SC-II
26. PW-26 Rajender Prasad
7. At the time of examination of aforesaid witnesses, large number of documents were exhibited/marked but their details are not being mentioned herein for the shake of brevity and the relevant document will be referred to by its description and/or exhibit marks in subsequent paragraphs wherever it is felt necessary.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 4 of 378. The detailed statements of accused persons were recorded under Section 313 Cr.P.C. after putting all incriminating evidence to them. The accused persons also examined one witness, namely, Shri Gopal Krishnan as DW-1 in their defence.
9. I have heard arguments at length addressed by Sh. Sagar Shankar, Ld. Assistant Public Prosecutor for CBI and Sh. Deepak Prakash and Ms. Swati Ghiliyal, Ld. counsel for both accused persons. Both the parties also filed on record written arguments. File perused. I have carefully gone through the entire record.
REASONS FOR DECISION
10. At the outset, learned counsel for accused persons contended that in this case, the most important witnesses of the prosecution, namely, Shri Nabibaksh Salehzi and Hazi Mohd. Afzal, (the partners of M/s Saleh Brothers (Iran)) have not been examined and as such, the present case is full of doubts and the accused persons deserve to be acquitted. Per contra, Ld. APP for the State explained that only one of the two partners (who made complaints to the Indian Embassy and played major role) was only made a witness but he could not be examined as he expired during the course of trial as per information received after issuance of summons (the prove of CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 5 of 37issuance of summons was filed along with written arguments). Ld. APP for the State further stressed that the case of the prosecution stands proved in view of examination of many other important witnesses and the documentary evidence produced on record.
11. In the instant case, the important issues are as under:
(i) Whether the accused persons forged the amended partnership deed and showed themselves parters fraudulently.
(ii) Whether accused persons cheated M/s Saleh Brothers (Iran) and its partners/exporters.
(i) Whether the accused persons forged the amended partnership deed and showed themselves parters fraudulently.
12. Before discussing the merits of the case, it is appropriate to quote precedent to refresh the understanding as to what constitutes "forgery". In this context, reliance can be placed on the famous case of Md. Ibrahim & ors vs. State Of Bihar & Anr [Cril. Appeal No.1695/2009 decided on 4 September, 2009 by Honble Supreme Court of India], wherein Hon'ble Mr. Justice R.V. Raveendran very lucidly elaborated the concept of forgery as under:
CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 6 of 37
"The condition precedent for forgery is making a false document (or false electronic record or part thereof).
10. An analysis of section 464 of Penal Code shows that it divides false documents into three categories: 10.1) The first is where a person dishonestly or fraudulently makes or executes a document with the intention of causing it to be believed that such document was made or executed by some other person, or by the authority of some other person, by whom or by whose authority he knows it was not made or executed.
10.2) The second is where a person dishonestly or fraudulently, by cancellation or otherwise, alters a document in any material part, without lawful authority, after it has been made or executed by either himself or any other person. 10.3) The third is where a person dishonestly or fraudulently causes any person to sign, execute or alter a document knowing that such person could not by reason of (a) unsoundness of mind; or (b) intoxication; or (c) deception practised upon him, know the contents of the document or the nature of the alteration.
11. In short, a person is said to have made a `false document', if (i) he made or executed a document claiming to be someone else or authorised by someone else; or (ii) he altered or tampered a document; or (iii) he obtained a document by practicing deception, or from a person not in control of his senses."
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 7 of 3713. In the instant case, it is the plea of the prosecution that there was a firm namely, M/s Maximax Impex having address as C- 103, Dayanand Colony, Lajpat Nagar Phase-IV, New Delhi which was constituted vide a partnership deed dated 07.09.1991 (Ex.PW2/A) and in the said firm, there were four partners, namely, (1) Smt. Sagira Khatoon, (2) Sh. C. A. Majeed (3) Sh. K. P. Naeem & (4) Smt. K.A. Noorjehan. It is claimed by prosecution that the accused persons forged a partnership deed which is referred to as "amended partnership deed" dated 21.10.1993 and that in the said forged partnership deed, accused persons had shown themselves as partner no.3 and 4 by removing the names of original two partners, namely, Sh. K. P. Naeem and Smt. K.A. Noorjehan.
14. On the other hand, both learned counsel for accused persons vehemently argued that the prosecution failed to prove that said amended partnership deed was a forged document. In this regard, they advanced arguments on following four points as under:
(i) The questioned signatures numbered as Q1 to Q5 in the FSL report were not found matched with the alleged signatures of the other two partners and the notary public.
(ii) The witness PW2 Smt Sagira Khatoon was only a sleeping parter and she is not a reliable witness.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 8 of 37(iii) The witness PW8 C.A. Majeed was a hostile witness and he did not give any reliable evidence.
(iv) The witness PW1 Shri Rameshwar Singh (Notary Public) is not a reliable witness.
15. The marks Q1 to Q4 are the questioned signatures of four parters and Q5 is the questioned signature of the notary public on the amended partnership deed. The same is a photocopy. Ld. APP for CBI argued that although there is no opinion on the said questioned signatures but the FSL report gave other favourable opinion in support of the case of prosecution. In the FSL report, with regard to aforesaid questioned signatures it is opined that it is not possible to give any opinion on the aforesaid signatures. The said reason is not specific but it is seen in many cases that the FSL experts do not give any opinion on the photocopy of a document.
16. No doubt in the FSL report, no opinion has been given as regards the questioned signatures i.e. Q1 to Q5 but it is the settled preposition of law that a fact can be proved by oral statement of a person or through a documentary evidence (Ref. Section 3 of the Indian Evidence Act, 1872). The FSL reports are only expert opinion and are aids to the evidence and they are not the wholesome evidence. In order to arrive at a decision, this court has to keep in mind the overall testimonies of the witnesses, oral or documentary and the circumstantial evidence.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 9 of 3717. In the entire examination of PW-11 M. C. Joshi, FSL Examiner, there is no clear mention as to why opinion of questioned signatures vis. Q1 to Q5 was not given. Even in his cross- examination, no suggestion was put to him. The FSL report is also silent on the said aspect. But the prosecution succeeded to examine two of the original partners, namely, Smt. Sagira Khatoon & Sh. C. A. Majeed.
18. PW2 Smt. Sagira Khatoon categorically deposed that the signature on the amended partnership deed does not belong to her. She further deposed that the original partnership deed was never amended nor any new partners were added or excluded at any point of time.
19. Counsel for the accused persons however argued that PW2 Smt. Sagira Khatoon was only a sleeping partner and she was not aware of any transaction or the business of the said firm and, as such, she is not in reliable witness.
20. No doubt from the testimony of PW2 Smt. Sagira Khatoon, it is clear that she was only a sleeping partner and her husband used to manage the affairs of the firm but there is no presumption under law that a sleeping partner does not know anything. A partner at least knows as to who are or were the partners CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 10 of 37of a firm. Moreover, this court has to keep in mind the purpose of examination of the witness. This witness was examined for the purpose of identification of her signatures and not for confronting the business transactions of the firm. In my considered opinion the slightest discrepancies or inconsistencies in the deposition of witnesses after lapse of considerable time cannot be a ground for discarding the entire testimony of a witness. This court has to appreciate the substantial evidence of the witnesses on the material aspects of the case and not to analysis the facts to check/test the memory capacity of a witness. The witnesses are the human beings and not the pre-programmed computers.
21. This witness categorically identified her signature on the original partnership deed and denied the signature of the amended partnership deed (in question). This court does not find any infirmity and contradiction on the statement of PW Smt. Sagira Khatoon on the point of identification of her signature and the same is trustworthy.
22. Even, in exercise of powers conferred under Section 73 of Indian Evidence Act, this court examined and compared the signatures of the partners on the original partnership deed and the amended partnership deed and on such comparison, this Court find that there is huge difference in the manner and style of both the signatures looking by naked eyes. Accordingly, this court is of the firm CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 11 of 37opinion that the amended partnership deed does not bear the signature of the original partner Smt. Sagira Khatoon.
23. It is the third argument that the PW Sh. C. A. Majeed, (one of the original partners) was declared a hostile witness and he was also not fit to depose at the time of recording his examination in court and as such his evidence is not reliable. It is also specifically pointed out by learned counsel for the accused persons at the end of his deposition that he was not even aware as to where his evidence was being recorded.
24. The law of appreciation of evidence of a witness on this point is quite different in India than the law in England. If a witness does not support the case of the prosecution on some points, it does not mean that the entire testimony of the witness shall not be read in evidence. It is a settled law that the principle falsus in uno falsus in omnibus does not apply to criminal trials in India and it is the duty of the court to disengage the truth from falsehood, to sift the grain from the chaff instead of taking an easy course of rejecting the prosecution case in its entirely merely on the basis of a few infirmities (Ref:
Keshoram Bora v. State of Assam, AIR 1978 SC 1096).
25. At the time of recording the deposition of PW C.A. Majeed, he was 70 years of age. Needless to say that at that age, persons suffer from various ailments. No doubt, on certain important CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 12 of 37aspects, he did not support the case of prosecution e.g. identification of his specimen signatures (D-39 - which were taken by CBI during investigation) but this witness gave very glaring evidence as under:
• He admitted his name and address on the document Ex.PW2/A i.e. original partnership deed. • He said that signature on Ex.PW/2C is like his signature. • He stated that the name "Chiranmal Abdul Majood" as written at fourth line of first page of amended partnership deed (MarkA1/PW1) is not of him.
• He also stated that the signature at point C on the amended partnership deed (MarkA1/PW1) is not of him.
26. The Ld. Counsel for the accused persons further argued with great force that PW C.A. Majeed did not identify his specimen signatures on D39 and the account opening form of American Express Bank and, therefore, a question was raised as how testimony of PW C.A. Majeed relating to identification or non- identification of signatures on other documents can be believed. On this argument, this court gives following reasons:
• The specimen signatures are only an aid to the substantial evidence and not the substantial evidence in entirety. So its weightage is not at par with other substantial documents.
CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 13 of 37
• A person can make a hundred mistakes or errors, but it is highly improbable that one person will sign on a document having written his name wrongly as "Majood" whereas the real name is "Majeed".
• This witness gave very alarming evidence in support of prosecution by denying his signature on the amended partnership deed (MarkA1/PW1) but this witness was not at all cross-examined on this point by the counsel for the accused persons.
• Even, in exercise of powers conferred under Section 73 of Indian Evidence Act, this court examined and compared the signatures of the partners on the original partnership deed and the amended partnership deed and on such comparison, this Court finds that there is huge difference in the manner and style of both the signatures looking by naked eyes. Accordingly, this court is of the firm opinion that the amended partnership deed does not bear the signature of the original partner Sh. C.A. Majeed.
27. As regards the competency of the witness, the Ld.ACMM who recorded the statement of C.A. Majeed as a Commissioner already recorded his observation that the said witness was competent.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 14 of 3728. As regards the testimony of PW1 Shri Rameshwar Singh (Notary Public), it is argued that he is not a reliable witness since he deposed that only important documents are required to be entered in his register. It is further argued that partnership business can be done without any partnership deed registered or notorised. On the contrary, it is seen that this witness deposed that the amended partnership deed neither bears his signature nor his seal. He also admitted that his register was also seized by the CBI and it did not contain any entry of registering the said amended partnership deed. The learned counsel for the accused persons further contended that the said witness admitted in his cross-examination that his seal was stolen and some indecent persons duplicated his seal and do the attestation work. It is also argued that his signature was not proved in FSL report. But at the same time, this court finds credence in the testimony of this witness since he deposed that his register was never lost and the signature on the amended partnership deed does not belong to him. The reason of non-examination of signature (Q5) by FSL are the same as stated above.
29. Besides the aforesaid direct evidence on record, this court also wants to highlight some of the important points relating to the issue of forgery of amended partnership deed (MarkA1/PW1) as under:
CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 15 of 37
➢ In the amended partnership deed (MarkA1/PW1), it is recorded that since two of its partners have resigned, the earlier partnership deed dated 07.09.1991 stands cancelled. But the accused persons did not lead any evidence either to produce any record of resignation of the alleged two partners nor examined the said two partners nor any witness to prove said assertion.
➢ The accused persons also did not bring on record any single document which was signed, issued, received or relate to all the four partners of alleged newly constituted firm (namely, Smt. Sagira Khatoon, Shri C.A Majeed, K.G. Dhananjayan and E.V. Jothi).
➢ There is also no single document having any signature or belongingness of two partners, namely, Smt. Sagira Khatoon and C.A. Majeed.
➢ On careful perusal of the entire conspectus of facts, it is evident that the motive of creation of this forged document was to have international transactions done by using the name of the firm as "Maximax Impex" on which name the said firm was having import and export licence.
30. In the light of aforesaid direct as well as circumstantial evidence, I hold that the prosecution duly proved that the accused persons forged amended partnership deed, CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 16 of 37fraudulently shown themselves as partners of M/s Maximax Impex and fraudulently and dishonestly used said forged document as genuine for doing all international transactions of importing wet dates in the instant case.
(ii) Whether accused persons cheated M/s Saleh Brothers (Iran) and its partners/exporters.
31. At the outset, it is argued by learned counsel for accused persons that the Hon'ble Apex Court in the case of Takhaji Hiraji Vs. Thakore Kubersing Chamansing and Ors. (2001) 6 SCC 145 held that the material witness is one who would unfold the genesis of the incident or an essential part of the prosecution case and by examining such witnesses the gaps or infirmities in the case of the prosecution could be supplied. If such a witness, without justification, is not examined, inference against the prosecution can be drawn by the court. The fact that the witnesses who were necessary to unfold the narrative of the incident and though not examined, but were cited by the prosecution, certainly raises a suspicion and in the instant case on account of non-examination of exporter Nabi Baksh, benefit of doubt should be given to the accused persons.
32. It is the case of the prosecution that a deal was finalized vide agreement dated 22.03.1994 (Ex.PW11/A1) to the effect that M/s Saleh Brothers, Iran will sell 2240 MTs of wet dates (khajoor) @ CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 17 of 37U.S. dollar 500/- per MT. The said agreement has been duly proved on record by PW-11 and even not disputed by the accused persons. As per said agreement, the goods i.e. wet dates have to be delivered at Bombay and Calicut ports and in this regard the prosecution duly proved on record various bills of lading and bills of entries. The signatures of accused Jothi have also been duly proved through FSL report in this regard.
33. In the said agreement dated 22.03.1994, it was agreed that goods would be delivered within two months and the payment to be made within 15 days of delivery of consignment. There was also a stipulation that although the transactions were to be conducted in the name of Jothi but the firm i.e. M/s. Maximax Impex as well as its partners will be liable for all transactions. Although the accused persons denied receiving of goods but during the course of arguments, it is admitted that the accused persons had received the goods. Moreover the DW-1 deposed in support of prosecution that the said goods were delivered. Even otherwise, there is a FSL report which duly proved signatures of Jothi on various bills of entry acknowledging receiving of imported wet dates.
34. Ld. APP for the CBI argued that on the basis of the forged partnership deed, the accused persons dishonestly and fraudulently entered into transactions with M/s Saleh Brothers, CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 18 of 37Zahidan (Iran) and thereby induced the exporters to part with their valuable goods i.e. wet dates in huge quantity and, after receiving the said goods under deception, they did not pay any single penny and even the three cheques given in discharge of liability by accused persons were got dishonored.
35. On the contrary, Ld. Counsel for accused persons vehemently argued that the prosecution failed to prove the said three cheques in question and they are only photocopies. It is specifically pointed out that returning memo of only one cheque dated 10.08.1994 has been proved and there is no returning memo of two other cheques dated 10.05.1994 and 01.07.1994.
36. It is further argued by counsel for accused that cheque bearing no. 95334 dated 10.05.1994 for Rs. 2,39,00,000/-, cheque bearing no. 637766 dated 01.07.1994 for Rs. 3,74,22,000/-, issued by accused no. 2 on the behalf of Maximax Implex and cheque bearing no. 407911 dated 10.08.1994 for Rs. 3,56,00,000/- issued by accused no. 1 on behalf of Federation of Indian Farmers Association were given as a security towards advance payments for future business transaction between the complainant and the accused persons and not towards any payment for the import of wet dates.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 19 of 3737. It is further argued by counsel for accused that both the accused persons in their statements given under Section 313 Cr.P.C in their response to question no.13 have stated that "the cheque was given blank as security which was misused by Sh. Nabi Baksh Saleh Zehi". It is further argued by counsel for accused that by no stretch of imagination it can be presumed that the said three cheques for Rs. 9,69,22,000/- could have been issued towards the payment of import of wet dates, when even considering the allegations, the accused persons were to pay only 3.74 crores. The complainant though in the complaint Ex.PW3/A mentioned that the said cheques were issued towards the payment of wet dates, however, later on the prosecution with the objective to fill in the said lacuna, pleaded that out of the said cheques, only the cheque bearing no. 637766 dated 01.07.1994 for Rs. 3,74,22,000/-, issued by accused no. 2 was towards the payment of wet dates, whereas the other two cheques were towards advance payments for future business.
38. In rebuttal, Ld. APP for CBI specifically argued that the returning memo of one cheque has been duly proved and the statement of account of one of the other cheques also proved that it was returned unpaid.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 20 of 3739. It is not the stand of the accused persons that the aforesaid cheques do not belong to them. But it is argued that the said cheques were given as advance payment as security in different capacity and not in the name of firm M/s. Maximax Impex. When the accused persons did not raise any dispute with regard to belongingness of said cheques, it hardly matters whether they were given in the capacity of M/s. Maximax Impex or otherwise. What is important is the fact that the cheques were given to M/s. Saleh Brothers by the accused persons which is not a disputed fact.
40. Moreover, there is presumption of law about existence of "consideration" whenever any bill of exchange (which includes a cheque as per definition given in Section 5 and 6 of the Negotiable Instruments, 1882) is issued, endorsed, transferred and accepted in the Negotiable Instruments Act as well as Indian Evidence Act, 1872. The relevant provisions are extracted as under:
Sec. 118. Presumptions as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made:
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
Section 114 (c) of the Indian Evidence Act, 1872 provides a presumption as under:
The court may presume that a bill of exchange, accepted or endorsed was accepted or endorsed for good consideration.
CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 21 of 37
41. When the prosecution duly proved the delivery of the imported wets, which is even admitted by the accused persons, then the onus was upon the accused persons to prove as to how they paid the amount of imported wets.
42. The accused persons took a defence that the said cheques were given as security or for future business transaction. But no such term/covenant has been proved by accused persons since they did not examine any witness in this regard nor themselves. The DW1 did not depose on the said aspect. On the other hand, the prosecution duly proved that one of such cheques was given for sale consideration of the wet dates. The onus was upon the accused persons in view of aforesaid presumptions of law and fact but the accused persons failed to prove that there was any other transaction with M/s. Saleh Brothers than the one as alleged in this case. In the case of Moideen v. Johny [IV (2007) BC 528], it was held that even if cheque is issued as a security, the person in possession of the blank cheque can enter the amount of the liability and present it to the bank. When a blank cheque is issued by one to another, it gives an authority on the person, to whom it is issued, to fill it up at the appropriate stage with the necessary entries regarding the liability and to present it to the bank. In the light of this, the accused persons cannot be absolved of the liability.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 22 of 3743. It is further argued by ld. Counsel for accused persons that the goods were delivered to the accused persons during long duration between 1993-1994 but there was a condition in the agreement that the goods will be delivered within 2 months and the amount will be paid within 15 days of the delivery of the goods and, as such, the counsel for accused asserted that the supplier of the said goods, namely, Nabi Baksh Salehzi was in India only and he was doing all the transactions of receiving of goods himself and he had even sold the goods in the open market. On the same line, the DW-1 deposed that all the amount was paid in cash to the partner of M/s Saleh Brothers (Iran) in India. It is also argued that Nabi Baksh stayed in India for a long period.
44. As regards the duration of supply of goods, the record reveals that the same were made during the period from January, 1994 to May, 1994 i.e. total period of 5 months which is not unreasonable from any stretch of imagination for supply of large scale of goods. Moreover, the Ld. APP for the CBI argued that the exporters were made to believe that the payments will be made soon after and even cheques of huge amount were given to induce complainant to supply goods.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 23 of 3745. Although Mr. Nabi Baksh has not been examined by the prosecution on account of his death but in his statement recorded under Section 161 Cr.P.C., he claimed that he kept on supplying the goods since the same were perishable in nature and he was induced to supply the goods on the pretext that if the same are not supplied in time, they will perish and will create hurdles in clearance of payments from the buyers. Although the said statement under Section 161 Cr.P.C. is not admissible in evidence without examination of the complainant but this court can take judicial notice of the fact that Khajoor (dates) are by nature perishable products and as such they were supplied incessantly (Ref. Section 56 of Indian Evidence Act, 1872). It is also to be kept in mind that the complainant company i.e. M/s Saleh Brothers, Zahhidan (Iran) was already having three cheques in its custody and in view thereof, it can be inferred that the goods were supplied continuously without any interruption on the security of said cheques.
46. It is further evident that the CBI has placed on record various invoices/receipts of the subsequent buyers of the imported wets which clearly proved that huge quantity of wets received by the accused persons were sold by them to different companies, namely, Enam Trade Company; Mithu and Company; Arun Kumar and Brothers, etc. at the relevant time without any loss of time. The CBI also examined various office bearers of the said companies on CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 24 of 37record e.g. PW12, PW14 and PW17 who also deposed that they received goods from accused persons. Some of the buyers and even the shipment agents also identified the accused persons as the receiver and sellers of goods. There are large number of invoices/receipts/bills pertaining to the said companies bearing signatures of Jothi which are marked as Q22 to Q36 and the same have been duly proved on record through FSL report belonging to accused Jothi.
47. The accused persons did not produce on record any receipt or any independent witness to prove that all the payment or any part of payment was made to Nabi Baksh in India as claimed by DW1. He has also not disclosed any specific amount, date, mode of payment, etc. His statement is vague and unreliable on this point. Moreover, it is highly improbable that huge amount in cash would have been given to Nabi Baksh without obtaining any written receipt. Moreover, had the said amount been paid to him, he would not have filed any complaint for non-payment of amount. The exporter filed various complaints but accused persons did not take a plea nor proved that they had ever filed any counter-complaint to any authority or serve any legal notice to counter such complaint.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 25 of 3748. Further the presence of Nabi Baksh Salehzi has been shown in India during the relevant time but the said presence cannot be attached to the plea/stands taken by the accused persons and rather this Court draws an inference that he was present in India since he was not made payment of due amount in time and that is why he made complaints. I find substance in the argument advanced by Ld. APP for CBI that since Nabi Baksh was a foreigner and, therefore his complaints were not entertained seriously and ultimately he had to file a complaint through the concerned Embassy at Iran.
49. Further, Ld. APP for CBI also pointed out that one bank account of Nabi Baksh Salehzi was also got opened in India in which accused K. G. Dhananjayan stood as introducer, only to gain faith of the latter but it was also a trick on the part of accused persons only.
50. It is argued by counsel for accused persons that CBI failed to take cognizance of the most material fact that as per invoices (Document no. 13) M/s Saleh Brothers supplied only 747 MTs of wet dates to the accused persons in seven shipments (through D-13/a, D-13/b, D-13/d, D-13/e, D-13/f, D-13/h and D-13/p) and apart from the complainant, there were two more exporters namely, one Jalal Shahnvazi Taj and Haji Afzal Shahbaghsh (exporters from Karachi, Pakistan), who supplied a quantity of 564 MTs and 802 MTs of wet dates, respectively. It is also stated CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 26 of 37that the said two exporters have neither filed any complaint against the accused persons, nor they have been examined by the prosecution to check the veracity of the said sale invoices. It is pertinent to mention that the agreement dated 22.03.1994 (Ex.PW- 11/A1) only provided that the complainant's firm would supply 350- 2000 MTs of wet dates to the accused persons and does not mention any specific quantity of wet dates to be supplied to the accused persons.
51. It is further argued on behalf of accused persons that - though said agreement was executed on 22.03.1994, as per the invoices (Document No. 13) 300 MTs of wet dates had been supplied much before on 18.01.1994. The M/s. Saleh Brothers supplied only 447 MTs of wet dates to the accused persons under the agreement dated 22.03.1994 (Ex.PW-11/A1) and not 2138 MTs as claimed and the prosecution has absolutely failed to adduce any evidence to prove either through Bill of entry (Document no. 12) or Sale Invoice (Document No. 13), that the alleged quantity of 2138 MTs of wet dates were supplied to the accused persons by M/s Saleh Brothers alone.
52. On the contrary, Ld. APP for CBI contended that all the goods were supplied by M/s Saleh Brothers and other partners or associates, namely, Jalal Shahnvazi Taj and Haji Afzal CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 27 of 37Shahbaghsh on behalf of M/s. Saleh Brothers only. But the Ld. Defence counsel further urged that in the absence of examination of Mr. Nabi Baksh Salehzi or the aforesaid two persons, namely, Jalal Shahnvazi Taj and Haji Afzal Shahbaghsh or their representatives, the said facts are not proved. But the record reveals that DW1 Shri Gopal Krishnan (examined by both the accused persons as a defence witness) categorically admitted that dates were supplied by Saleh. He further stated that Shri Nabi Baksh Saleh had himself come to India and started selling the dates and had taken the money which was with the accused persons. The plea of the accused persons to the effect that they had received goods from three different exporters is not believable because - if the goods were received from three different exporters, as claimed, then as to why Mr. Nabi Baksh Saleh alone was allowed to sell the goods which were received in India. Thus I hold that the said argument of three exporters is only an afterthought and beyond the plea of accused and thus rejected.
53. As regards doing of business before execution of agreement, I do not find any illegality since two persons can do business without execution of any written agreement also. Be that as it may, if the argument of the learned counsel for the accused persons on the point of three exporters is assumed to be correct for CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 28 of 37the sake of argument, then also it is evident that M/s Saleh Brothers had supplied 747 MTs of wet dates (by excluding the supplies of other two exporters, namely, Jalal Shahnvazi Taj and Haji Afzal Shahbaghsh) but the accused persons did not lead any evidence to prove that they had ever paid the consideration amount of the said quantity.
54. Ld. Counsel for accused persons also raised a question as to how it is possible that for the said supply of goods, cheques of more than Rs.9 crores would have been given whereas the goods were of less value, and in any case not more than Rs.4 crores. It is asserted that there is no correlation with the amount of the goods supplied and the amount of the three cheques.
55. No doubt, there is a difference of amount of aforesaid two cheques and the amount of goods but this court is not oblivious of the fact that cheques are given in advance to gain confidence of the other side for entering into some kind of transaction. If any party gives a cheque of a particular sum which is more than the amount of value of goods, it does not mean that the said cheque or the transaction becomes invalid. In the instant case, the prosecution did not claim that all the cheques were given in discharge of liability but it is claimed that only one cheque was given for Rs.3 plus crores which was equivalent to the payment of the goods supplied.
CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 29 of 3756. Moreover, the factum of giving 3 cheques of huge amount in crores of rupees without correlating to the value of the goods supplied, rather supports the case of the prosecution to the effect that the accused persons were not serious in conducting transactions and they gave cheques to fraudulently win confidence of partners of M/s Saleh Brothers without intending to pay their amount. The said situation qualify the illustrations (d) (f) & (g) appended to Section 415 of IPC. The said Section and relevant illustrations are reproduced as under:
Section 415 IPC - Illustrations (d), (f) and (g):
"(d) A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonoured, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
"(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats."
"(g). A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contact and does not deliver it, he CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 30 of 37
does not cheat, but is liable only to a civil action for breach of contract."
57. It is next argued by the learned counsel for the accused persons that the transactions in question were only civil in nature and it was given colour of criminal offence and, therefore, accused persons are not liable for any criminal offence which is punishable upto 7 years.
58. The essential ingredients of the offence of 'cheating' are :
(i) Deception of a person either by making a false or misleading representation or by other action or omission.
(ii) Fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.
59. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct. In this regard, reliance can be placed on the CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 31 of 37case of M/s Indian Oil Corporation vs M/s NEPC India Ltd., & Ors decided on 20 July, 2006 wherein the Hon'ble Mr. Justice R.V. Raveendran & H. K. Sema [Appeal (crl.) 834 of 2002] elaborated as under:
A given set of facts may make out : (a) purely a civil wrong; or
(b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.
60. In view of aforesaid position of law and the fact that the present case fulfills the essential ingredients of criminal offences, the aforesaid argument is rejected.
61. It is also argued that complainant Nabi Bakash himself conspired to commit criminal offence of evading customs duties by agreeing to show less rate of amount on the bills than the actual one and this way, he caused revenue loss to Government of India. Even if it is presumed to be correct in that case, the criminal offence committed by accused persons cannot be overlooked. If there is any CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 32 of 37violation of evading customs duties, the said matter is not the part of this charge-sheet and trial. The concerned custom authority is the appropriate forum where such issues can be raised or dealt with.
62. It is strongly argued on behalf of the accused persons that prosecution did not intentionally examine Shri K.P. Naeem (original partner), Shri Hari Nindoor and Shri E.N. Soman and, therefore, the accused persons are entitled for benefit of doubt. In my considered opinion, it is the prerogative of the prosecution to see as to how it has to prove its case and in this regard, neither this court nor the accused persons can dictate to prosecution as to how it has to prove its case. Moreover, on account of oldness of the case, large number of cases pending in court room and the issue of traceability of witnesses, mostly a few witnesses are generally left to be examined by the prosecution. If the accused persons think that said witnesses were important to bring out truth, they could have filed an application for summoning them as prosecution or defence witnesses. But no such steps were taken by them. Accordingly this argument is without any substance and rejected.
63. It is argued by the counsel for the accused persons that the dishonest intention, if any, is required to be proved at the inception of transaction and not subsequently for making out a case of cheating. It is the settled preposition of law that intention or mens CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 33 of 37rea is a mental state of affairs and it is not possible to see it physically and accordingly it is required to be gathered from the circumstances in which a particular person acts. In the case of Shivanarayan Kabra v. State of Madras, AIR (1967) SC 986, the Hon'ble Apex Court held that - "It is not necessary that a false pretence should be made in express words by the accused. It may be inferred from all the circumstances including the conduct of the accused in obtaining the property. In the true nature of things it is not always possible to prove dishonest intention by any direct evidence. It can be proved by number of circumstances from which a reasonable inference can be drawn." In the instant case, there are many direct as well as circumstantial evidence which proved that the conduct of the accused persons was not fair and transparent while dealing with M/s Saleh Brothers. The said circumstances and conducts are displayed as under:
a) The bank account was opened in Bank of India by accused Jothi only one day before entering into the agreement deed dated 22.03.1994.
b) The accused Jothi opened the account in the Bank of India in the name of Maximax Impex as a "proprietor" and not as partner.
c) The PW-14 Sh. Atma Ram also denied that he ever stood as guarantor/introducer of the said account of Bank of CBI vs. K.G. Dhananjayan & Anr.RC 3/E/95/EOW-I Page 34 of 37
India and he deposed that his stamp was forged and used on the account opening form of the said bank.
d) The address given in the said account was also not found correct in view of the evidence of concerned bank official, namely, PW-6 J. D. Raimane.
e) Accused persons dealt with large scale of transactions in the year 1994 in crores of rupees but surprisingly they did not maintain any permanent office.
f) Various addresses given by the accused persons pertain to other persons e.g. C103, Dayanand Colony, Lajpat Nagar, New Delhi and 3 Meena Bagh, Maulana Azad Road, New Delhi.
g) Although there is no requirement under law that a partnership firm should compulsorily be registered yet this court can take into account the fact that in ordinary course of business when a firm deals in business of crores of rupees and that too with foreign party, it should run its business in more transparent manner by doing proper documentation which includes registration of firm.
h) The amended partnership deed has already been held a forged document and this fact strengthens the case of the prosecution for proving cheating.
i) As per Smt. Khatoon, the business of the firm M/s Maximax Impex was of meat products but the accused persons dealt CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 35 of 37with wet dates and they did not ever inform the other original partners of the firm.
j) Even the original partner Smt. Sagira Khatoon specifically denied execution of amended partnership deed or inclusion or exclusion of any partner or any amendment of the said deed.
k) The agreement dated 22.03.1994 was entered in the name of only two partners, i.e. accused persons without including or informing the two other patterns.
l) It is also a dishonest act on the part of the accused persons that they had incorporated a clause in the agreement dated 22.03.1994 that the firm M/s. Maximax Impex will be liable for all acts without even taking consent of other two partners.
m) The accused persons were not fair in their dealings with the exporters since the cheques were given under different capacity and not as partners of M/s Maximax Impex company.
n) The accused K. G. Dhananjayan also used different addresses of different persons on the letter head of M/s Maximax Impex Company.
o) The accused Jothi also used different status as partner or proprietor of Maximex Impex on various places and invoices.
64. In conclusion, I reject all the arguments addressed on behalf of accused persons and hold that the prosecution duly proved the charges as levelled against the accused persons for the CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 36 of 37substantive offences. So far as the offence of conspiracy is concerned, generally it is difficult to have direct evidence but in the instant case, there are abundance of evidence to prove common intention and conspiracy between both the accused persons in view of the fact that cheques were given by both of them, they were identified by many witnesses as the receivers of wet dates and that they both signed/used the forged partnership deed. Accordingly I also hold that the offence of conspiracy also stands proved in conjunction with other substantive offences as well as individually.
Conclusion
65. In the light of aforesaid direct as well as circumstantial evidence, as discussed above, both the accused persons are convicted for the offences under Section 420, 468 and 471 IPC individually and with the aid of Section 120-B/34 IPC as well. They are also convicted for the offence under Section 120B IPC. Copy of the judgment be supplied to the convicts or their counsel today itself free of cost.
66. Put up for arguments on the point of sentence on 15.10.2016 at 02.00 p.m. Announced in open court (Naresh Kumar Laka) on 14.10.2016. Chief Metropolitan Magistrate (East) Karkardooma Courts: Delhi CBI vs. K.G. Dhananjayan & Anr.
RC 3/E/95/EOW-I Page 37 of 37