Delhi District Court
Cbi vs . Jaswant Bir Singh Bedi & Ors. Page No. 1 ... on 30 August, 2014
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IN THE COURT OF MS. POONAM A. BAMBA,
SPECIAL JUDGE (PC ACT)/ CBI - 03,
NEW DELHI DISTRICT, PATIALA HOUSE COURT,
NEW DELHI
In re :
CC No. 05/13
Case ID No. 02403R0019492012
RC No. SI8/2011/E0002/CBI/EOU-IV/ND
U/s 120B r/w Sec. 420, 471 r/w Sec. 468, 419 of IPC
& 13(2) r/w Section 13(1)(d) of PC Act, 1988
Central Bureau of Investigation
Vs.
1. Jaswant Bir Singh Bedi
S/o Late Sh. Bakshish Singh Bedi
Assistant General Manager
Punjab & Sind Bank
New Delhi
R/o: H. No. 102, Building No. 104,
Silver Oak Apartments
DLF, Phase-I, Gurgaon, Haryana.
2. Pramod Vijay Khullar
S/o Late Sh. Krishan Kumar Khullar
R/o H. No. A-22, Sector-51, Noida, UP
3. Vinay Kumar Dutt @ Vinay Kumar
S/o Late Sh. Khema Nand
R/o H. No. 25/21, IV Floor
East Patel Nagar
New Delhi - 110 008
CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND
CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 1 of 103
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4. Raj Kumar Sharma
S/o Sh. Nand Kishore Sharma
R/o H. No. K-3/54A, DLF, Phase-II
Gurgaon, Haryana.
Date on which charge sheet was filed : 02.04.2012
Date on which charge was framed : 26.07.2013
Date on which charge was amended : 23.09.2013
Date on which arguments concluded : 26.08.2014
Date on which judgment pronounced : 30.08.2014
APPEARANCES:-
Sh. S. C. Sharma, learned Sr. PP for CBI.
Sh. Rajan K. Chourasia, Advocate for A-1 J.B.S. Bedi.
Sh. Vijay Aggarwal, Advocate for A-2 P.V. Khullar.
Sh. Saraswata Mohapatra, Advocate for A-3 Vinay Kumar Dutt
and A-4 Raj Kumar Sharma.
JUDGMENT
1.0 This case was registered on 25.02.2011 against M/s Pragya Overseas Pvt. Ltd. (POPL), having its registered office at 141, DDA, Commercial Complex, Jhandewalan Extension, New Delhi, Sh. Raj Kumar Sharma, Sh. Vinay Kumar, Sh. Sanjay Mahajan, all directors of M/s POPL and Smt. Madhu Khullar, guarantor, on the basis of a complaint made CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 2 of 103 :: 3 ::
by Sh. Gurcharan Singh, Zonal Manager, Punjab & Sind Bank (P&SB), Zonal Office-I, Ashram Chowk, Siddarth Enclave, New Delhi-110014. It was alleged in the said complaint that M/s POPL alongwith their directors/ guarantors and other unknown persons, in conspiracy with one another obtained various credit facilities to the tune of Rs.175 lacs from Punjab & Sind Bank, International Banking Division, BO: Scindia House, New Delhi (in short "IBD branch") in 1995; for securing the same, M/s POPL mortgaged property located at Plot No. 2/65, New Rohtak Road, New Delhi (in short "the said property"), in favour of IBD Branch on 02.11.1995, showing the same to be owned by Sh. R.S. Raghunath Dass (in short "Raghunath Dass"); they impersonated as Raghunath Dass, who had actually expired long back. 1.1 Charge-sheet mentions that the investigation revealed that M/s POPL was incorporated vide Memorandum of Association and Articles of Association dated 06.03.1995, having Sh. Vinay Kumar (A-3), Sh. Vijay Kumar Bajaj and Sh.
Vishal Arora, as Directors. Two of the directors, namely Sh. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 3 of 103 :: 4 ::
Vijay Kumar Bajaj and Sh. Vishal Arora resigned and in their place, Sh. Pramod Vijay Khullar (A-2), was appointed as a Director; subsequently, A-2 Pramod Vijay Khullar also resigned as Director on 09.10.1995 and in his place, A-4 Raj Kumar Sharma was inducted as Director.
1.2 Charge-sheet also mentions that it was revealed during investigation that the legal opinion about the status of the said property and its Valuation Report alongwith Inspection Report, were obtained by IBD branch prior to making of loan application by M/s POPL on 12.10.1995; at the time, when the legal opinion and Valuation Report were obtained by the bank, A-2 Pramod Vijay Khullar and A-3 Vinay Kumar were the Directors of M/s POPL.
1.3 Charge-sheet further mentions that an application dated 12.10.1995 of M/s POPL was submitted to AGM, P&SB, IBD, Scindia House, New Delhi under the signatures of A-3 Vinay Kumar, Director, M/s POPL vide covering letter dated 14.10.1995; vide said application, M/s POPL had applied for CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 4 of 103 :: 5 ::
various credit limits, cash incentive, Bank Guarantee etc. for Rs.155 lacs approximately; in the said application, name of Sh. Raghunath Dass was mentioned as Guarantor, showing a property measuring 400 sq. yards at 7, New Rohtak Road, Delhi of the value of Rs.125 lacs, in his name. On the basis of the information furnished in the said application, Sh. Vipan Ghai prepared an Appraisal Note for sanction of loan alongwith office note; the same were put up to Sh. S.P.S. Kalsi, the then Manager, who put up to AGM/ A-1 J.B.S. Bedi, a note dated 30.10.1995 observing that sanction of the credit facilities as mentioned in the said note, may be considered for approval; the same was approved by A-1 J.B.S. Bedi on 31.10.1995; on the basis of the approval of A-1 J.B.S. Bedi, M/s POPL was sanctioned (1) PC - Rs.35 lac with 25% margin, (2) FOBLC/ FOUBLC - Rs.50 lac with Nil margin, (3) DDB Advance - Rs.10 lac with 25% margin, (4) BP (supply bills) -
Rs.10 lac with 40% margin, (5) BG- Rs.20 lac with with 10% margin, and (6) Import LC (I) DA- Rs. 20 lac with 25% margin
(ii) DP - Rs.30 lac with 25% margin, subject to special terms and conditions, which included submission of original CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 5 of 103 :: 6 ::
property documents.
1.4 Charge-sheet also mentions that A-3 Vinay Kumar as Director of M/s POPL submitted original Title Deeds of the mortgaged property as collateral security, vide letter dated 01.11.1995 addressed to A-1 J.B.S. Bedi, who was functioning as the Branch Head.
1.5 Charge-sheet further mentions that pursuant to sanction of loan/ credit limits to M/s POPL, the documentation work was got done by Sh. Vipan Ghai on behalf of the bank from A-3 Vinay Kumar and A-4 Raj Kumar Sharma, in their capacity as Directors, on behalf of M/s POPL. Both A-3 Vinay Kumar, A-4 Raj Kumar Sharma and Sh. Raghunath Dass & Smt. Madhu Khullar also executed personal guarantee, in their individual capacities by signing Form No. 255 of P&SB. 1.6 Charge-sheet also mentions that M/s POPL defaulted in payments and the loan/ credit account of M/s POPL subsequently became Non Performing Asset (NPA). The bank had filed an application before learned Debt Recovery CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 6 of 103 :: 7 ::
Tribunal (DRT) in 2008, to appoint a local Commissioner for taking possession of the said property, mortgaged with the bank. DRT allowed the said application and appointed an Advocate as local Commissioner to take possession of the mortgaged property. But, the said property could not be possessed, as it was revealed that Sh. Raghunath Dass was not the owner of the said property at the time of it being mortgaged with the bank. As per DDA records, the owner of the said property for the period 1972 - 1973 to 22.09.2009, were found to be (i) Sh. Jagat Singh, (ii) Sh. Darbari Lal & Smt. Shanti Devi, (iii) Sh. Ravinder Kumar Nanda, (iv) Smt. Lajwanti Kawarta, (v) Sh. Sarup Parkash Nayyar & Smt. Kumkum Nayyar and (vi) Sh. Jagiri Lal. Name of Sh. Raghunath Dass as owner of the said property did not appear in DDA records. 1.7 Charge-sheet also mentions that it was also revealed during investigation that the first floor of the mortgaged property was occupied by one of the friends of A-2 Pramod Vijay Khullar; the said friend had provided to A-2 Pramod Vijay Khullar, some space in that property, for CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 7 of 103 :: 8 ::
running his (A-2's) office, in token of his friendship; an old man namely Sh. Dhani Ram, a distant relative of A-2 Pramod Vijay Khullar used to visit the said office and was produced before the bank, as the owner of the said property. It was revealed that Sh. Dhani Ram, S/o Late Sh. Nathu Mal had expired on 10.06.1998 at the age of 85 years. 1.8 Charge-sheet further mentions that as per Circular No. 1390 dated 26.06.1993 (wrongly mentioned as 28.10.1994) issued by P&SB, the property proposed to be mortgaged with the bank was required to be physically verified by bank officials; but, no such verification was carried out. Despite that A-1 J.B.S. Bedi sanctioned the loan to M/s POPL. It also mentions that the loan account of M/s POPL was to be treated as "group account" of M/s Morgan Tectronics Limited, in terms of Circular No. 1434 dated 28.10.1994, Smt. Madhu Khullar being guarantor in both the loans/ credit limits. As per the said circular, the loan proposal of M/s POPL was to be forwarded to the controlling office for consideration, as A-1 J.B.S. Bedi, in his capacity as Branch CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 8 of 103 :: 9 ::
Head of IBD Branch had no authority to sanction the same. But, A-1 J.B.S. Bedi still sanctioned the credit facilities to M/s POPL.
1.9 Charge-sheet was filed in the court on 02.04.2012, under Section 120-B read with Sections 420, 471 IPC & Section 13(2) read with Section 13(1)(d) PC Act, against accused persons 1 to 4; under substantive offences punishable under Section 13(2) read with Section 13(1)(d) PC Act against A-1 J.B.S. Bedi; and under Section 420 and 471 IPC against A-2 Pramod Vijay Khullar, A-3 Vinay Kumar and A-4 Raj Kumar Sharma.
2.0 Vide order dated 20.07.2013, charge was framed against the accused persons on 26.07.2013. All the accused persons were charged under Section 120-B IPC read with Section 420, 468, 471, 419 IPC and Section 13(2) read with Section 13(1)(d) PC Act; charge under Section 420 IPC read with Section 468, 471 IPC was separately framed against A-2 Pramod Vijay Khullar, A-3 Vinay Kumar and A-4 Raj Kumar CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 9 of 103 :: 10 ::
Sharma; and charge under Section 13(2) read with Section 13(1)(d) PC Act was framed against A-1 J.B.S. Bedi. Subsequently, vide order dated 21.09.2013, charge was amended; and the amended charge was framed on 23.09.2013. The charge was amended to the effect that Section 468 IPC would be read with Section 471 IPC instead of "Section 468 & Section 471 IPC"; it also clarified the false information/ documents furnished by the accused persons. All the accused persons pleaded not guilty and claimed trial.
3.0 In support of its case, CBI examined 19 witnesses. PW-1 Mrs. Veena Dutta, daughter of Sh. Dhani Ram, who was allegedly produced before the bank as R.S. Raghuanth Dass at the time of execution of documents pertaining to loan. 4.0 PW-2 Sh. Gurucharan Singh, Zonal Manager, PW-3 Sh. Vipan Ghai, Manager, PW-6 Sh. S.P.S. Kalsi, Principal, Staff Training College, PW-7 Sh. Kulvinder Singh Jasuja, Chief Manager, PW-8 Sh. Harish Wadhwa, Chief Manager, PW-13 Sh. Manjit Singh, Chief Manager, PW-14 Sh. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 10 of 103 :: 11 ::
Vijay Kumar Marwah, General Manager (retired), the successor of A-1, PW-15 Sh. Amarjit Diwan, AGM, PW-16 Sh. Harbhajan Singh, Manager (retired) are witnesses from Punjab & Sind Bank.
4.1 PW-9 Sh. R.K. Chauhan, Manager, Punjab National Bank, witness to taking of specimen signatures of A-3 & A-4. 4.2 PW-4 Sh. Anup Kumar Gumbar and PW-5 Sh.
Arun Kumar Jain are the purchasers of the said property. PW-17 is Sh. Mahesh Chandra Mahajan, who was in possession of first floor of the said property from 1994 to 1999.
4.3 PW-10 Sh. Sanjiv Pandey, Dy. Director (Archives), who had forwarded the certified copy of Perpetual Lease Deed pertaining to the said property.
4.4 PW-12 Sh. Vivek Kohli, Advocate had furnished legal opinion about the status of the said property to Punjab & Sind Bank.
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4.5 PW-11 Sh. Deepak Raj Handa, HOD (Documents), SSO-I, CFSL, New Delhi is the handwriting expert, who furnished his opinion (Ex.PW11/A) about the questioned handwriting/ signatures of A-3 Vinay Kumar and A-4 Raj Kumar Sharma.
4.6 PW-18 Sh. P.K. Jha, Dy. SP and PW-19 Sh.
Himanshu Bahuguna, Inspector are the investigating officers. 5.0 Statements of A-1 J.B.S. Bedi. A-3 Vinay Kumar Dutt and A-4 Raj Kumar Sharma under Section 313 Cr.PC, were recorded on 14.07.2014 and 18.07.2014. Statement of A-2 P.V. Khullar under Section 313 Cr.PC, was recorded on 22.07.2014.
5.1 A-1 J.B.S. Bedi also filed statement under Section 313(5) Cr.PC.
5.2 All the accused persons opted to lead evidence in their defence.
6.0 DW-1 Sh. Tejinder Singh from RTI Cell, Punjab & CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 12 of 103 :: 13 ::
Sind Bank and DW-2 Sh. Amarjeet Singh, retired from P&SB, were examined on behalf of A-1 J.B.S. Bedi. 6.1 DW-3 Sh. Radhey Shyam Sharma, DW-4 Sh. Ravi Verma and DW-7 Smt. Madhu Khullar were examined on behalf of A-2 Pramod Vijay Khullar.
6.2 A-3 Vinay Kumar and A-4 Raj Kumar Sharma themselves stepped into the witness box, in their defence as DW-5 and DW-6, respectively.
7.0 I have heard Sh. S.C. Sharma, learned Sr. PP for CBI. I have also heard Sh. Rajan K. Chourasia, Advocate for A-1 J.B.S Bedi, Sh. Vijay Aggarwal, Advocate for A-2 Pramod Vijay Khullar and Sh. Saraswata Mohapatra, Advocate for A-3 Vinay Kumar and A-4 Raj Kumar Sharma and have perused the record carefully.
8.0 Following facts/ documents as have come in the testimony of PW-3 Sh. Vipan Ghai and PW-6 Sh. S.P.S. Kalsi have remained unchallenged, as nothing to the contrary was CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 13 of 103 :: 14 ::
put to these witnesses in cross-examination. Further, A-3 Vinay Kumar and A-4 Raj Kumar Sharma have admitted signing of loan application and execution of various documents; A-1 J.B.S. Bedi has also not disputed the same; although, in his statement under Section 313 Cr.PC, he has stated that the documents were not put up to him after execution. It is therefore, not in dispute that:
(i) M/s POPL applied for various credit facilities vide application dated 12.10.1995 (Ex.PW3/1), which was submitted to the IBD Branch vide Ex.PW3/2, covering Letter dated 14.10.1995, signed by A-3 Vinay Kumar, as Director, M/s POPL and the said covering letter was addressed to the Assistant General Manager (AGM), IBD Branch;
(ii) A-1 J.B.S. Bedi was the AGM at IBD Branch at that time.
In fact, it has come in A-1 J.B.S. Bedi's statement under Section 313(5) Cr. PC, that he joined IBD Branch on 23.01.1993 as Chief Manager and was promoted as AGM on 25.10.1995 and remained in the Branch as such, till CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 14 of 103 :: 15 ::
13.11.1996;
(iii) Along with the aforesaid loan application, documents inter alia, Ex.PW3/4 to Ex.PW3/12 were filed by M/s POPL, which included Projected Balance-Sheet, Statement of Assets & Liabilities of all the directors, Memorandum & Articles of Association, photocopy of Perpetual Lease Deed of the said property dated 04.05.1943 in favour of Sh. Raghunath Dass etc.;
(iv) After filing of the aforesaid loan application dated 12.10.1995, the directors of M/s POPL also submitted other documents including Assets & Liability, Statement of Raghunath Dass (Ex.PW3/14);
(v) A-3 Vinay Kumar and A-4 Raj Kumar Sharma were the Directors of M/s POPL, at that time.
8.1 It is also not in dispute that thereafter, PW-3 Sh. Vipan Ghai prepared Ex.PW3/16, Appraisal Form - 241-R dated 19.10.1995, along with Office Note dated 19.10.1995 CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 15 of 103 :: 16 ::
(Ex.PW3/17) for sanction of various credit facilities and put up the same to PW-6 Sh. S.P.S. Kalsi. On which, PW-6 Sh. S.P.S. Kalsi vide his note Ex.PW3/18, had raised certain queries/ required to call for further information from M/s POPL w.r.t. share holding pattern, to apply for conversion of the said property from leasehold to freehold, transfer of LC, schedule of loan/ advance, experience of directors, basis of projections, shipment schedule for execution of LC etc. 8.1.1 Pursuant to the said queries, M/s POPL provided clarification/ documents vide Ex.PW3/19, letter dated 25.10.1995 signed by A-4 Raj Kumar Sharma. 8.1.2 On receipt of further information, PW-3 again prepared Ex.PW3/23, Appraisal Form dated 27.10.1995 along with Office Note. The same was put up to Loan Manager, Sh.
S.P.S. Kalsi (PW-6); PW-6 put up the same to A-1 with his (PW-6's) comments dated 30.10.1995; same was approved by A-1 J.B.S. Bedi on 31.10.1995; on the basis of A-1's approval, M/s POPL was sanctioned various credit facilities, as CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 16 of 103 :: 17 ::
mentioned in para-1.3 (supra).
8.1.3 Thereafter, the original Perpetual Lease Deed Ex.PW1/DA of the said property was submitted to the IBD Branch vide Ex.PW3/24, letter dated 01.11.1995 of A-3 Vinay Kumar addressed to A-1/ AGM, IBD Branch. A-3 Vinay Kumar in his statement as DW-5 has admitted having signed the said letter Ex.PW3/24, but has denied the enclosure being there when he signed the letter. But, no such suggestion was put to PW-3 in his cross-examination.
8.1.4 On 02.11.1995, various loan documents inter alia, Ex.PW3/25 to Ex.PW3/39 were executed by directors, A-3 Vinay Kumar and A-4 Raj Kumar Sharma; they also signed guarantee bond Ex.PW3/40 (by A-3) and Ex.PW3/41 (by A-4);
and the guarantee bonds Ex.PW3/42 and Ex.PW3/43 were also executed by impersonator as Sh. Raghunath Dass (as has come on record and discussed in subsequent paras) and Smt. Madhu Khullar. An Affidavit Ex.PW3/44 was also given by impersonator as Raghunath Dass. Besides these documents, CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 17 of 103 :: 18 ::
Certificate of Execution of Documents - Draft-B Ex.PW3/46 was also signed by A-3 Vinay Kumar, A-4 Raj Kumar Sharma, impersonator as Raghunath Dass and Smt. Madhu Khullar. Impersonator also signed Mortgage Deed Form 84AA, Ex.PW3/47, as Raghunath Dass .
8.2 It is further not in dispute that M/s POPL defaulted in payments and the loan became irregular and was subsequently, declared as NPA. It has come in the testimony of PW-16 that the bank filed a suit for recovery - OA No. 181/2000 against M/s POPL, its directors and guarantors, in DRT-II, Delhi for recovery of Rs.1,71,99,882.47, which is Ex.PW16/A; during the pendency of the said suit, on the application of the bank for appointment of Local Commissioner for taking possession of the said property/ mortgaged property. DRT appointed Sh. D.N. Rao, Advocate as the Local Commissioner for taking possession of the said property. Local Commissioner submitted Report Ex.PW16/B dated 20.12.2008, to the Chief Manager, Assets & Recovery Branch, P&SB vide letter dated 22.12.2008, Ex.PW16/C; vide CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 18 of 103 :: 19 ::
said report, PW-16 apprised that Sh. Raghunath Dass was not the owner of the said property; and that the occupants namely Smt. Usha Jain, Sh. Arun Kumar Jain, Smt. Sarita Jain, Sh. Anup Kumar Gumbar, Smt. Santosh etc. claimed to be the owners of the portion of the said property, in their possession and submitted copy of their property documents. Along with his Report, the Local Commissioner enclosed the objections/ letters of the aforesaid persons and copy of property documents in their favour, as furnished by them; letter dated 20.12.2008 of Smt. Usha Jain is Ex.PW16/D and Sale Deed/ Chain of Documents, as submitted by her is Ex.PW16/E; objections of Sh. Arun Kumar Jain and Smt. Sarita Jain are Ex.PW16/F and the copy of Sale Deed/ documents submitted by them is Ex.PW16/G. 8.2.1 PW-16 has further testified that thereafter, enquiries with DDA were made by the Punjab & Sind bank; as information was not supplied by DDA, PW-16 was deputed to DDA to obtain the information about ownership/ mutation/ transfer of the said property; PW-16 personally visited DDA CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 19 of 103 :: 20 ::
office and obtained Ex.PW16/N Sakni Jamabandi, Mauja Bagh Raoji, Tehsil & Zila, Delhi, Saal 1972 - 1973, (issued on 17.09.2009), from Patwari, DDA. In his cross-examination, PW-16 has stated that the Patwari had prepared Sakni Jamabandi Ex.PW16/N from DDA's record in his presence; he also stated that the Patwari, DDA had expressed his inability to provide details prior to 1972 - 1973. Sakni Jamabandi Ex.PW16/N has not been disputed, as no suggestion to the contrary was put to PW-16 in cross-examination. Rather, learned counsel for A-2 himself suggested to PW-16 in cross-
examination that the information about the owners, as revealed in Ex.PW16/N, was not available with the bank (at the time of sanction of loan);
8.2.1.1 In the said Jamabandi, Ex.PW16/N, the name of Sh. Raghunath Dass did not appear as the owner of the said property; the said property stood mutated/ transferred in favour of different persons from time to time. Learned counsel for A-1 J.B.S. Bedi himself referred to Ex.PW16/DA-1, AGM, P&SB, Asset Recovery Branch-I's Letter dated CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 20 of 103 :: 21 ::
14.05.2010, addressed to the DGM, P&SB, HO, whereby the aforesaid information obtained from DDA was recorded/ conveyed. The said letter also mentions that after the death of Sh. Raghunath Dass, the said property was mutated in favour of his two sons, on 13.01.1951; and in the said farad names of (i) Sh. Jagat Singh, (ii) Sh. Darbari Lal & Smt. Shanti Devi, (iii) Sh. Ravinder Kumar Nanda, (iv) Smt. Lajwanti Kawarta, (v) Sh. Sarup Parkash Nayyar & Smt. Kumkum Nayyar and (vi) Sh. Jagiri Lal, appear as the owners of the said property during 1972 - 1973 till 22.09.2009.Same is borne out from Ex.PW16/N;
8.2.2 The fact that the said property was mutated in the names of sons of Raghunath Dass in the year 1951, has also come on record vide testimony of PW-5 Sh. Arun Kumar Jain, who along with his wife purchased portion of the said property from Sh. Jagiri Lal, in the year 2005. He testified that he had obtained under RTI Act, the ownership details of the said property from PIO/ Dy. Director (Lands); PIO (Lands) vide Ex.PW5/B, that is, reply dated 05.02.2008 (signed on CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 21 of 103 :: 22 ::
09.02.2008), informed that mutation vide Intekal No. 3763, Virasat Min Janib Rai Saheb, Sri Raghunath Dass, S/o Sh. Shankar Dass, Caste Vaish, Banam Jyoti Swarup Gupta and Bishnu Swarup Gupta, S/o Sh. Raghunath Dass, Vaish, dated 13.01.1951 was approved and accepted; although, application for mutation and the death certificate of Sh. Raghunath Dass could not be traced.
Ex.PW5/B further mentions that "As per records, nine mutations have been accepted/ approved on this khasra no. 964/ 153 till date, copies of which may be obtained...". The testimony of PW-5 as well as the document Ex.PW5/B have remained unchallenged, as PW-5 was not cross-examined by A-1 J.B.S. Bedi and A-4 Raj Kumar Sharma. A-2 P.V. Khullar as well as A-3 Vinay Kumar also did not cross-examine this witness, challenging the factum of mutation of the said property in the names of Raghunath Dass's sons, after his death. Rather, in response to a query by A-3 in cross- examination, PW-5 produced the chain of documents Ex.PW5/DA, obtained by him from DDA. The said documents are not challenged, as PW-5 was not cross-examined in this CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 22 of 103 :: 23 ::
regard. Ex.PW5/DA shows the details of mutation of the said property carried out in favour of different persons by the DDA, from time to time.
8.2.3 The fact that the said property had changed number of hands after the death of Raghunath Dass, has also come on record vide testimony of PW-4, the owner of portion of the said property and Ex.PW4/A - chain of documents of ownership of the said property from 06.02.1943 when Perpetual Lease Deed was executed in favour of Raghunath Dass by Delhi Improvement Trust till 12.08.2005, when the portion of the said property was purchased by PW-4 vide Sale Deed dated 12.08.2005. PW-4 was not cross-examined by A-1 and A-4; A-2 did not dispute the genuineness of chain of documents produced by PW-4. Nor was anything worthwhile extracted in his cross-examination by A-3 Vinay Kumar. As per Ex.PW4/A (colly.), the said property was sold by the sons of Raghunath Dass namely Joti Sarup Gupta and Vishnu Swarup Gupta to Sh. Amar Nath vide Sale Deed dated 27.11.1953;
and it was thereafter, sold from time to time; CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 23 of 103 :: 24 ::
8.2.4 The facts that the said property was not owned by Sh. R.S. Raghunath Dass at the time of making of Loan Application to the bank by M/s POPL; there was no ownership documents pertaining to the said property in favour of Sh.
Raghunath Dass; and the documents of the said property were organized and Sh. Dhani Ram was presented as Raghunath Dass before the bank, as the legal owner of the said property, are admitted by A-2 P.V. Khullar in view of his own suggestions to PW-3 Sh. Vipan Ghai and to PW-17 Sh. Mahesh Chandra Mahajan, in their cross-examination; 8.2.4.1 PW-3 Sh. Vipan Ghai replied to A-2's suggestion that "It is wrong to suggest that it was in my knowledge that there was no proof of the aforesaid property, bearing Plot No. 2, Block No. 65, Western Extension Scheme, New Rohtak Road, Delhi, being in the name of Sh. Raghunath Dass". PW-3 was even confronted with his statement under Section 161 Cr.PC, Ex.PW3/DA, in this regard. 8.2.4.2 PW-17 replied to A-2 P.V. Khullar's suggestion as CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 24 of 103 :: 25 ::
"It is wrong to suggest that by virtue of my being in DDA, Sh. Antar Yami, S/o Sh. Dhani Ram being in DDA, Smt. Veena Rani, D/0 Sh. Dhani Ram being in DDA, being very well known to me, I knew about there being no claimant of the property in question and as my brother late Sh. Sanjay Mahajan was associated with M/s POPL, hence I organized the documents in collusion with my brother and got presented Sh. Dhani Ram as its legal owner, so that my brother's company could get the loan from the bank...".
8.2.4.3 Nothing has been placed on record by A-2 to show Sanjay Mahajan's association with M/s POPL at the time when the credit facilities were applied for/ sanctioned in October 1995.
8.2.5 It would also not be out of place to mention here that objections were filed before DRT-II by the aforesaid occupiers/ purchasers of the said property; but, the bank did not file any response. As per certified true copy of order dated 13.10.2009 (part of D-7), DRT-II had accepted the CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 25 of 103 :: 26 ::
factum of death of Sh. Raghunath Dass prior to 1951, (that is, much prior to creation of mortgage of the said property in favour of the bank), in bank's application/ suit for recovery of its dues from M/s POPL and others.
8.2.6 In view of the above, it is established that Sh.
Raghunath Dass was not alive in the year 1995. Admittedly, he was not the owner of the said property in 1995, when the said property was offered by M/s POPL to IBD Branch, as collateral security and was mortgaged in favour of the bank; and that the property document/ Perpetual Lease Deed was organized; Sh. Dhani Ram was presented in the bank as Raghunath Dass/ the legal owner of the said property. In view of the same, I need not deliberate on the argument of learned defence counsel for A-1 J.B.S. Bedi and A-2 P.V. Khullar that CBI has failed to place on record any evidence in proof of death/ death certificate of Raghunath Dass and that Dhani Ram was produced as Raghunath Dass.
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9.0 In the backdrop of above undisputed/ established facts, let me now consider the allegations against accused persons. It is the case of CBI that it was the duty of A-1 J.B.S. Bedi/ AGM, the Branch Head, in terms of Circular No. 1390 dated 26.06.1993, (Ex.PW6/DC) to get the property (proposed to be mortgaged with the bank) physically verified by bank officials. But, A-1 J.B.S. Bedi in conspiracy with other accused persons, sanctioned various credit facilities, without any physical verification of the mortgaged property by the bank officials. It is further alleged that as per Bank Circular No. 1434 dated 28.10.1994, Ex.PW7/B, M/s POPL was a "group account" of M/s Morgan Tectronics Limited, in view of Smt. Madhu Khullar being the guarantor in both the loans/ credit limits. In terms of the said Circular, the loan proposal of M/s POPL was required to be forwarded to the Controlling Office, which had sanctioned the proposal of M/s Morgan Tectronics. But, A-1 J.B.S. Bedi, mala fide sanctioned the loan to M/s POPL, although, it was not within his power. It is further alleged that A-1 in league with other accused persons, got the guarantee/ other documents signed by the impersonator CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 27 of 103 :: 28 ::
as Raghunath Dass, who was already dead.
9.1 It was argued by learned defence counsel for A-1 J.B.S. Bedi that as per Ex.PW6/DC - circular dated 26.06.1993, the physical verification of the said property was to be carried out by the Manager/ concerned officer, that is, either by Sh.
S.P.S. Kalsi (PW-6) or by Sh. Vipan Ghai (PW-3). A-1 J.B.S. Bedi bona fide proceeded on the basis of the Appraisal/ Note dated 27.10.1995/ 30.10.1995 and recommendation made therein, by PW-3, Loan Officer and PW-6, Loan Manager, who were responsible for ensuring all the compliances; they had mentioned in Appraisal/ Note that the said property was free from encumbrances as per the legal opinion of empanelled Advocate, index inspection and that the valuation was also carried out by the empanelled Valuer. Thus, A-1 did not digress any rule or regulations of the bank. But, the real culprits, that is, PW-6 Sh. S.P.S. Kalsi, Manager (Loan) and PW-3 Sh. Vipan Ghai, Officer, have been let off and A-1 has been falsely roped in.
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9.2 Let met refer at the outset, to Ex.PW6/DC, Circular No. 1390 dated 26.06.1993. Vide this circular, the Head Office, P&SB while expressing its concern about number of advances turning bad and sticky reiterated previous guidelines. The relevant portion of the said circular is reproduced hereunder:-:
"....
Reg: Appraisal and sanction of Loan Proposals Of late there is a steep increase in the number and amount involved in the non-
performing accounts in the advance portfolio .... on account of non adherence to lending norms, inadequate pre-sanction appraisal of loan proposals, defective documents and laxity in post- supervision etc. .....
We reiterate some basic points to be kept in view and to be followed strictly by branches/ controlling offices while appraising and sanctioning loan proposals.
....
(1) Where property is offered as security, it should be ensured that it is free of CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 29 of 103 :: 30 ::
encumbrances and of sufficient value to cover the credit facilities. Efforts should be made to obtain urban properties as primary securities. Legal opinion, Index Inspection and valuation certificate with regard to property be obtained from banks' Counsel and valuer. All the requirements of legal opinion/ index inspection be completed.
(ii) ....
(iii) ....
(iv) Property proposed to be mortgaged
with the Bank be physically verified by the Manager/ concerned officer and visit report put up record.
...."
9.2.1 In view of the above Circular Ex.PW6/DC, the physical verification by the bank officials of the said property, (offered as collateral security by M/s POPL), was must. From the careful reading of the aforesaid circular it is also evident that the said requirement was to be strictly adhered to not only while appraising, but also at the time of "sanctioning" the loan. It has come in the cross-
examination of PW-3 Sh. Vipan Ghai that he had prepared the CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 30 of 103 :: 31 ::
Appraisal and Note Ex.PW3/23, on the basis of legal opinion (Ex.PW6/DD) and Valuation Report (Ex.PW6/DE). PW-6 Sh. S.P.S. Kalsi in his cross-examination has stated that the Branch In-charge (A-1) never asked them to carry out physical verification of said property; and therefore, the same was not carried out by anyone from the Branch; had they been directed by A-1, they would have carried out physical inspection of the said property. He has also stated that he did not put up for physical verification, as the said property had already been physically inspected by the empanelled valuer and advocate.
9.2.2 Admittedly, neither PW-3 nor PW-6 suggested for physical verification of the said property, nor A-1 directed them to do so. Physical verification of the said property was not carried out. No doubt, it was the duty of Officer (PW-3) and Loan Manager (PW-6) to ensure all the compliances at the time of Appraisal; they were expected to suggest physical verification of the said property, at the time of putting up the Loan Appraisal/ Note in terms of the above CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 31 of 103 :: 32 ::
circular but, the same was not done. The question is, does that absolve A-1 J.B.S. Bedi of his responsibility? A-1 was the sanctioning authority; before sanctioning the credit facilities, that too, to the tune of Rs.175 lacs, he was required to see whether the officer/ Manager have ensured all the compliances, more particularly, the crucial ones like, physical verification of the said property, as the same was offered as collateral security. It was therefore, the duty/ responsibility of A-1 J.B.S. Bedi to see at the time of sanctioning of credit facilities to M/s POPL, whether the physical verification by Manager/ concerned officer had been carried out or not. 9.2.3 Undisputdely, as argued by A-1 J.B.S. Bedi, as per the aforesaid circular, the physical verification was to be carried out by the officer/ Manager and not by the Branch In-
charge, that is, A-1 J.B.S. Bedi; but, if the same had not been done, A-1 should have directed the same. Merely because PW-3 and PW-6 vide their note/ Appraisal did not suggest physical verification of the said property does not absolve A-1 of his duty to ensure the same.
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9.3 It was pleaded that A-1 was heading IBD Branch, which was exceptionally large branch; there were various Sections & Departments, which were headed by Sectional Heads/ Managers numbering 10 to 11 approximately, who were looking after their respective Sections/ Departments; it was not possible for A-1 to keep track of day to day happenings/ operations in various Sections and to personally supervise, all the operations of such a large branch, as he was burdened with various administrative responsibilities; he was only concerned with business development etc. Thus, it was the duty of PW-3 Sh. Vipan Ghai and PW-6 Sh. S.P.S. Kalsi, to ensure various compliances. In support, A-1 J.B.S. Bedi placed on record Ex.DW1/C (colly.), that is, List Of Classification of Branches as on 31.03.1994 and Role Specifications of Important Branch Functionaries as on 31.03.1994/ 31.03.1995 (which is already Ex.PW8/DB); A-1 made specific reference to Clause 7 of "Role of Sectional In-
Charge - Loans". A-1 J.B.S. Bedi also produced DW-2 Sh. Amarjeet Singh, who retired as Branch In-charge, P&SB, BO Janpath, New Delhi, a large branch.
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9.3.1 No doubt, as per Ex.PW1/DC (colly). IBD Branch was classified as exceptionally large branch. Further, the Role Specifications of Important Banking Functionaries, mentions that it is not feasible for the In-charge to personally supervise all the operations of such a big branch; certain important parameters of branch working will have to be identified, which will be monitored by him. For the rest of the tasks, the second man (whether one or two) will be responsible and report to the In-charge about the working. It also mentions that the main thrust of the In-charge's functioning will be on business development, customer contact (existing and potential) and public relations, follow-up of advances, monitoring of critical areas. Let me refer to the relevant portion of Role of Loan In-charge in Ex.DW1/C (colly), particularly Clauses - 7, 9 & 10, which read as under:-
"ROLE OF SECTIONAL INCHARGE - LOANS At every level in the bank today, there is an urgent need to approach the whole process of lending the pre-lending appraisal stage, the disbursement and documentation CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 34 of 103 :: 35 ::
stage and the post lending follow up and recovery stage in a systematic and scientific manner so that the bank's interest are safeguarded and maximum revenue is earned through an effective deployment of the bank's funds.
The emphasis that need for the section in charge and the staff of this section to consciously understand their responsibilities, follow the laid down procedures and make all efforts in ensuring that the advances remain viable and a continuing source of income to the bank.
In this context the following is to be noted:
.....
. The role details given below constitute only the broad parameters and would be supplemented by the instructions of the branch incharge and guidelines of the controlling offices from time to time.
A. Operations :
a) Pre Lending Appraisal and
Disbursement :
....
7.The sectional head will check the title and CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 35 of 103 :: 36 ::
all the aspects related to the goods/ property offered as security in the advance.
8. ....
9(a) The final proposal, complete in all respects, be put up to the incharge for his consideration and decision.
9(b) ....
10. The loan/ limit should not be released unless the documents are executed properly in all respects and the indispensable/ special requirements as stipulated by H.O. from time to time are complied with. The documents be got verified from bank's legal counsel, where required."
9.3.2 As per the above Role Specifications, undoubtedly, primarily, it was the duty of PW-3 and PW-6 to ensure all compliances including physical verification of the said property. Even if it was not directed, they could have suggested physical verification in their note. But, the question is, if the officer/ Manager did not comply with any of the CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 36 of 103 :: 37 ::
crucial requirements, was there any duty caste on A-1 J.B.S. Bedi. A-1 J.B.S. Bedi was not merely acting as a rubber stamp, so as to sign on whatever was put up to him. The aforesaid Role Specification as placed on record by A-1 himself, emphasised urgent need to have a systematic approach "at every level" in order to safeguard bank's interest. Further, as per Clause 9(a), A-1 was to "consider" the proposal and take "decision". A-1 J.B.S. Bedi, being a sanctioning authority was duty bound to satisfy himself about the compliances of the aforesaid requirements including physical verification by bank officials of the said property (proposed to be mortgaged), before taking the decision/ sanctioning the loan. 9.3.2.1 A-1's argument that he was not required to personally supervise day to day functioning of such a big branch, is misplaced. Sanction of credit facilities for a huge amount of Rs.175, (value of which about 20 years back in 1995) can very well be visualized) was not a "day to day affair". A-1 was dealing with public funds/ hard earned money of tax payers and the same called for application of mind and CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 37 of 103 :: 38 ::
close supervision as to crucial requisite compliances before sanction/ disbursal of loan. More so, as M/s POPL as per Appraisal/ Note, Ex.PW3/23 was a new company incorporated on 06.03.1995, and A-1 J.B.S. Bedi, as per his own admission did not know that it was a "group account"/ associate of M/s Morgan Tectronics, having account with IBD Branch. Further, the copy of perpetual lease deed (Ex.PW3/11 placed on record along with loan application) was of the year 1943 and the same should have also alerted A-1 J.B.S. Bedi, an officer of rank of AGM, having vast experience in banking. Higher responsibility was bestowed by the bank upon A-1 J.B.S. Bedi, by promoting him as Assistant General Manager and making him the head of exceptionally large branch. 9.3.3 It is intriguing as to how in view of the above, A-1 J.B.S. Bedi, the Branch Head, an officer of AGM level proceeded to sanction such a huge amount on 31.10.1995, on the basis of legal opinion/ valuation report dated 06.10.1995 and 08.10.1995, respectively, when the bank was not even in possession of the original property document, CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 38 of 103 :: 39 ::
which was submitted only after sanction vide letter dated 01.11.1995 and received by PW-3 on 02.11.1995.
10.0 It is further alleged that M/s POPL being an associate/ a group account of M/s Morgan Tectronics Limited, it was not in A-1's power and was in the domain of controlling office, still A-1 mala fide and in utter disregard of Ex.PW7/B, Ciruclar No. 1434 dated 28.10.1994, sanctioned loan to M/s POPL. Let me refer here to the relevant portion of Circular Ex.PW7/B, which reads as under:
"...Reg:
Discretionary power on advances ....
1. Disc. powers should be used judiciously by the sanctioning authority and loans/ advances should be sanctioned within the powers delegated to them after proper appraisal of loan proposals as per HO guidelines.
....
5. Please carefully note the instructions regarding exercise of powers, abuse of powers... All other terms and conditions - lending CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 39 of 103 :: 40 ::
power & guidelines and provision annexed to the circular be strictly observed for exercising the above schedule of powers.
...........
35. For sanctioning authorities from CM/ RM and above in case of group Advances, total exposure would be twice the powers mentioned in each category of revised chart. For the purpose of loaning Powers, concerns shall be allied/ associate of another, if any.
i) Two concerns have one or more common partners/ proprietors, Guarantee, OR
ii) Any of the directors of the private limited company is director of another private limited company OR
(iii).....
(iv).... In spite of the above broad based definitions of associate/ allied concerns, if the sanctioning authority still feels that two firms/ companies are suspected to be connected by not covered under the above definition, he should ask specific instructions from the Head Office.
36. Where a higher authority sanction a CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 40 of 103 :: 41 ::
particular facility to a borrower who subsequently requires another/ additional limit which falls within the delegated powers of a lower authority, the lower authority shall not exercise, its powers, but forward the same proposal to the same authority for its consideration (except in Item No. 27)...." 10.1 It has come in the testimony of PW-6 that M/s POPL was a group company of M/s Morgan Tectronics, because Smt. Madhu Khullar was the major shareholder in both the companies; she was also a guarantor in the loan account of both the companies. Even otherwise, it is not in dispute that M/s POPL was the associate/ group company of M/s Morgan Tectronics, Smt. Madhu Khullar being the guarantor in both the accounts. But, it was argued on behalf of A-1 J.B.S. Bedi that this fact was not brought to his notice by the officer, Sh. Vipan Ghai (PW-3) and the Manager, Sh. S.P.S. Kalsi (PW-6); the Appraisal and the office note (Ex.PW3/23) put up before him was completely silent about this fact. Rather, it mentioned that the present sanction (to M/s POPL) was under the powers of AGM; going by the said CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 41 of 103 :: 42 ::
note, he bona fide approved the proposal/ sanctioned credit facilities to M/s POPL.
10.1.1 On the other hand, Learned Sr. PP argued that dishonest intention of A-1 J.B.S. Bedi in sanctioning of said credit facilities to M/s POPL in connivance with A-2 Pramod Vijay Khullar, A-3 Vinay Kumar and A-4 Raj Kumar Sharma, is also evident from the fact that he (A-1) introduced impersonator as Sh. Raghunath Dass to PW-3 Sh. Vipan Ghai, for taking his signatures on loan documents/ guarantee etc. 10.2 Perusal of the Appraisal Form/ Office Note dated 27.10.1995, Ex.PW3/23 reveals that the factum of M/s POPL being a group company of M/s Morgan Tectronics, is not mentioned therein and PW-3 in his cross-examination has also admitted that the said fact was not mentioned in the Appraisal Form/ Note dated 27.10.1995 put up by him and also in the note of Sh. S.P.S. Kalsi (PW-6) dated 30.10.1995.
No doubt, PW-3 & PW-6 were required to mention this fact in Appraisal/ Office Note. PW-3 in cross-examination has simply CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 42 of 103 :: 43 ::
stated that he had not mentioned the said fact in Appraisal/ Note Ex.PW3/23, as he was not aware. But, the duty caste on A-1 was more onerous, he being sanctioning authority. Different financial powers are vested in officers of different levels. If the higher officer was merely to go by what was put up to him (as pleaded by A-1) then the very purpose of conferment of higher powers on such officers of AGM level, is defeated; then the loan could have very well been sanctioned by the Loan Manager; there was no purpose of putting it to A-1 J.B.S. Bedi. The aforesaid circular Ex.PW7/B required judicious exercise of the discretionary powers by the sanctioning authority; A-1 was required to sanction loan only within his delegated powers after proper consideration of loan proposal put up to him.
10.2.1 Let me mention here that, A-1 himself has pleaded that being the Branch In-charge, main thrust of his duties was business development, customer contact, public relations, etc. Development of banking business significantly includes lending, to generate revenue/ profits for CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 43 of 103 :: 44 ::
the bank. It was A-1's foremost duty to ensure effective deployment of bank's funds for generating maximum revenue.
10.2.2 A-1 as per his own admission (as stated in his statement under Section 315 Cr. PC) was posted in IBD Branch since 23.01.1993 in the capacity of Chief Manager and was subsequently promoted as AGM on 25.10.1995; he must therefore, be fairly conversant with the borrowers/ customers of the branch including M/s Morgan Tectronics.
More so, for the reasons that loan proposal of M/s Morgan Tectronics was considered and recommended for sanction by A-1 J.B.S. Bedi just two months back, that is, in August 1995. 10.2.3 Perusal of Mark A (PW-8) (colly.), Proposal for Renewal-cum-Enhancement of credit facilities to M/s Morgan Tectronics Limited (which is not disputed, as PW-8 was not cross-examined by any of the accused) reveals that it was put up by Manager on 28.07.1995/ 06.08.1995, signed by Senior Manager on 07.08.1995 and recommended by Chief Manager; CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 44 of 103 :: 45 ::
admittedly, A-1 J.B.S. Bedi was the Chief Manager at that time. As per this Proposal, A-2 P.V. Khullar was one of the directors of M/s Morgan Tectronics; Smt. Madhu Khullar was to give her personal guarantee. Even with respect to the loan proposal of M/s POPL, personal guarantee of Smt. Madhu Khullar W/o A-2 P.V. Khullar was proposed. Not only this, even reference to M/s Morgan Tectronics Limited, had come in the Loan Appraisal/ Note Ex.PW3/23 of M/s POPL put up on 30.10.1995. It mentions that M/s POPL would be getting an export LC (Right) for US$446250 (Rs.140.00 lacs approximately) transferred in its name from M/s Morgan Tectronics Limited. These facts should have rung the bell in the mind of A-1 J.B.S. Bedi, a seasoned officer of the rank of AGM, heading the Branch for almost three years; and under whose signatures the proposal of M/s Morgan Tectronics for Renewal-cum-Enhancement for credit facilities, was recommended to higher office, just about less than 3 months back. In view of these facts and circumstances, it is difficult to believe that A-1 J.B.S. Bedi was not aware about the connection between M/s POPL and M/s Morgan Tectronics CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 45 of 103 :: 46 ::
Limited.
10.2.4 As seen above, A-2 P.V. Khullar was director in M/s Morgan Tectronics; admittedly, he (along with A-3 Vinay Kumar) was also the director of M/s POPL, when the legal opinion dated 06.10.1995 Ex.PW6/DD and valuation report dated 08.10.1995 Ex.PW6/DE w.r.t. the said property were obtained from bank's empanelled advocate and valuer. It has come in cross-examination of PW-3 that the enquiry with respect to an immovable property is got made through empanelled lawyer, whenever the same is taken as security.
It is evident from the legal opinion Ex.PW6/DD that the property documents were handed over to advocate Sh. Vivek Kohli (PW-12) by the dealing hand (of the bank), as finds mentioned therein. The legal opinion also refers to the query "raised by the bank" about competency of Raghunath Dass to create equitable/ any other mortgage in favour of the bank. In his cross-examination, PW-12, admitted that generally copies of title deeds used to be handed over to him by the bank officials - PW-3 and Sh. Satnam Singh, for search and CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 46 of 103 :: 47 ::
legal opinion. PW-3 as well as PW-6 themselves have stated in their cross-examination that the title deeds of the property for opinion, are handed over to the bank's advocate, sometimes by the party/ borrower and sometimes by the bank.
10.2.4.1 From the above facts and circumstances and that the legal opinion and valuation report from empanelled advocate and valuer were obtained on 06.10.1995 and 08.10.1995, respectively, that is, prior to making of loan application, shows that M/s POPL had approached the bank for loan and supplied copy of title deed for the purpose, (before applying for loan); and only after obtaining the legal opinion and valuation report, formal loan application dated 12.10.1995 was filed with bank. It has come in the cross-
examination of PW-3 that Loan Application used to be processed only when so directed by the Branch Manager (A-1 in the instant case); and that he (PW-3) never received any loan application directly. Same also finds corroboration in the testimony of PW-6. PW-6 in his cross-examination has stated CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 47 of 103 :: 48 ::
that it was the prerogative of the Branch Head to mark loan appraisal to any of the Managers in the branch. He (PW-6) also stated that it was not necessary that PW-3 put up loan application at his (PW-6) instructions; sometimes, PW-3 was directly instructed by A-1 J.B.S. Bedi to put up the loan application. PW-6 denied that the Office Note w.r.t. M/s POPL was put up by PW-3 at his (PW-6) instructions. 10.2.4.2 The above facts and circumstances coupled with the testimony of DW-6, who has stated that A-2 P.V. Khullar arranged for documents, legal opinion and valuation report, as has come in paras - 13.5 and 13.5.1 (infra)], when considered in totality, it is apparent that A-2 P.V. Khullar, whose company M/s Morgan Tectronics was already having an account with IBD Branch, with the consent of the bank obtained legal opinion and valuation report from empanelled advocate/ valuer, through bank, for the loan application to be made by M/s POPL. The loan application was made on 12.10.1995. But, before making loan application, A-2 P.V. Khullar resigned from directorship of M/s POPL on 09.10.1995;
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and loan application shows A-3 Vinay Kumar and A-4 Raj Kumar Sharma as the only directors of M/s POPL, under whose signatures the application was filed; no observation in this respect was made either by loan officer/ Loan Manager or by A-1 J.B.S. Bedi. A-2 P.V. Khullar's resignation just three days prior to loan application strongly points towards the fact that A-2 P.V. Khullar was advised by the bank that by his continuance as director in both the companies, that is, M/s Morgan Tectronics and M/s POPL, M/s POPL would fall in the definition of "associate"; and by virtue of being an associate/ group advance, loan application of M/s POPL would have to be forwarded to Head Office, in terms of circular Ex.PW7/B. It has come in the testimony of PW-6 that as the loan facility to M/s Morgan Tectronics was sanctioned by the controlling office/ head office, (which is otherwise also not in dispute), the credit facilities sought by M/s POPL would also be required to be forwarded to head office for sanction. The fact that the credit facilities to M/s Morgan Tectronics were granted under ZM sanction dated 29.06.1995, finds mention in Mark A (PW-8) (colly.). Thus, it is more than evident that A-2 P.V. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 49 of 103 :: 50 ::
Khullar resigned to circumvent the bank procedure/ and to avoid M/s POPL's loan proposal being sent to higher office/ Head Office and in order to obtain the credit facilities from IBD Branch within A-1 J.B.S. Bedi/ AGM's power. 10.3 On considering the above facts and circumstances in entirety, A-1's argument that he was not aware about M/s POPL being an "associate"/ a "group advance" and proceeded to exercise his power/ sanction credit facilities of such a huge amount to M/s POPL, merely on the basis that PW-3 and PW-6 mentioned in the Appraisal/ Note Ex.PW3/23 that sanction of credit facilities be considered under his powers can hardly be bought; complicity of A-1 J.B.S. Bedi is more than evident.
11.0 It was argued on behalf of A-1 J.B.S. Bedi that there is neither an allegation nor any material on record to suggest that the Advocate Vivek Kohli furnished a false report at A-1's instance; neither PW-12 Vivek Kohli nor any other witness including PW-3 and PW-6 have stated that the legal CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 50 of 103 :: 51 ::
opinion/ valuation report were furnished at A-1's instance; therefore, no criminality w.r.t. the sanction of loan can be imputed to him, in absence of any material; he may at the most be negligent. In support of his argument, learned counsel placed reliance upon the judgments - State of Madhya Pradesh Vs. Sheetla Sahai & Ors (2009) 8 Supreme Court Cases 617, S.P. Bhatnagar Vs. State of Maharashtra (1979) 1 Supreme Court Cases 535, Abdullah Mohammad Pagarkar Vs. State (Union Territory of Goa, Daman And Diu (1980) 3 Supreme Court Cases 110, Union of India & Anr. Vs. Major J.S. Khanna, (1972), 3 Supreme Court Cases 873, Major S.K. Kale Vs. State of Maharashtra, (1977) 2 Supreme Court Cases 394, Union of India Vs. H.C. Goel, AIR 1964 Supreme Court Cases 364.
11.1 Learned Sr. PP has argued that mala fide of A-1 J.B.S. Bedi is also evident from the fact that he had even identified impersonator as Raghunath Dass at the time of execution of documents. On the other hand, it was argued on behalf of A-1 that A-1 had nothing to do with execution of CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 51 of 103 :: 52 ::
documents; after approving the sanction of credit facilities to M/s POPL on 31.10.1995, the file was never placed before him; loan documents including guarantee etc. were got executed by Loan Officer/ PW-3.
11.2 As noted above, it has come on record that Sh.
Raghunath Dass died prior to 1951; and that he was not even the owner of the said property in the year 1995. Thus, certainly someone else appeared (impersonating as Raghunath Dass) and signed various documents including Guarantee Bond, affidavit etc. as Raghunath Dass. As discussed in para - 8.2.4 (Supra), A-2 P.V. Khullar while admitting these facts, has himself stated that the property documents were organized and Sh. Dhani Ram (since dead) was produced as Raghunath Dass. Dhani Ram having died on 10.09.1998 was thus not available to tell the happenings. PW-3 has testified that the Branch Manager - AGM/ A-1 J.B.S. Bedi had introduced Raghunath Dass to him and asked him to get signed the documents - Guarantee Bond Form No. 255 Ex.PW3/42, Certificate of Execution of Documents - Draft-B CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 52 of 103 :: 53 ::
Ex.PW3/46 and Mortgage Deed Form No. 84AA Ex.PW3/47, from Raghunath Dass. In his cross-examination, while admitting that the Mortgage Deed Form No. 84AA Ex.PW3/47 is filled in his handwriting and that he got signed the same from Raghunath Dass, PW-3 further stated that the same was got signed in the presence of A-1 J.B.S. Bedi, in his cabin. PW-3 has stood by his testimony in cross-examination and categorically denied that A-1 had not introduced the said person, who signed the Mortgage Deed, as Raghunath Dass. He also denied that the said person had not signed the documents, as Raghunath Dass in presence of A-1 in his cabin. He also denied that no direction was given to him by A-1 to get signed the aforesaid documents from the said person, who was introduced as Raghunath Dass.
11.2.1 Learned defence counsel for A-1 confronted PW-3 in cross-examination, with his letter dated 25.10.2007 Ex.PW3/DB to Head Office, to point out that he has nowhere mentioned in that letter that A-1 had introduced Raghunath Dass to him. PW-3 admitted the said letter; and that it is not CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 53 of 103 :: 54 ::
mentioned in the said letter that A-1 had introduced the impersonator as Raghunath Dass to him. But, PW-3 further stated that the said letter was written by him in response to letter dated 25.09.2007 (as is borne out from the same); and that he is unable to comment on its contents without looking at the letter dated 25.09.2007. Letter Ex.PW3/DB is thus, not of much assistance to A-1, as PW-3, even before this court, has also stated that he got signed the documents from Raghunath Dass (but, on being identified by A-1). 11.2.2 There is no denying the fact that being a loan officer, it was also the duty of PW-3 to satisfy himself about the identity/ credentials of the guarantor before execution of documents by him. But, the version of PW-3 also finds corroboration in the testimony of PW-6. PW-6 in cross-
examination has stated that the loan/ security documents were got executed by PW-3 Sh. Vipan Ghai at the direct instructions of A-1 J.B.S. Bedi. No suggestion to the contrary was put to PW-6 by A-1 J.B.S. Bedi.
11.3 Even if for a while, the argument of A-1 is CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 54 of 103 :: 55 ::
accepted that he had not introduced the person/ guarantor/ mortgager as Raghunath Dass to PW-3, the question which arises is, did A-1 look at the Financial Report/ Assets & Liabilities Statement of the guarantor Raghunath Dass (Ex.PW3/14) as filed by M/s POPL and referred to in Appraisal. Ex.PW3/23? Did A-1 ensure verification of the guarantor and his networth before sanctioning/ disbursing the credit facilities? It is preposterous that A-1 simply signed the Note/ approved the Loan Proposal, as put up to him, without going through the same and sanctioned credit facilities running into 175 lacs, without satisfying himself about various compliances.
12.0 In view of the above, it is established that A-1 J.B.S. Bedi knowingly sanctioned credit facilities to M/s POPL in utter disregard of bank's directives, as contained in the above circulars. It was not simple negligence; it was willful avoidance of bank's directives on the part of A-1 J.B.S. Bedi to wrongfully benefit the accused persons/ M/s POPL, transgressing/ abusing his powers. Thus, the case law relied CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 55 of 103 :: 56 ::
upon by A-1 J.B.S. Bedi is of no assistance to him.
13.0 So far as A-2 is concerned, it was argued on his behalf that he had resigned from the directorship of M/s POPL on 09.10.1995. He was neither a director nor had anything to do with the affairs of M/s POPL at the time, the loan was applied for (by M/s POPL) or sanctioned and even thereafter; he has been falsely implicated in the case. Further, none of the witnesses from the bank, that is, PW-3 and PW-6 have uttered a single word that A-2 visited the bank with regard to the loan and induced the bank in any manner; rather, it has come in the testimony of PW-3 and PW-6 that with respect to the said property that they solely depended upon the legal opinion/ valuation report while putting up/ recommending the loan proposal; thus they were induced by the legal opinion/ valuation report and not by A-2. A-2 was never in possession of the said property and had nothing to do with the same; the testimony of PW-17 relied upon by the prosecution to connect A-2 with the said property is ridden with contradictions and can hardly be looked into. From the testimony of DW-3, it is CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 56 of 103 :: 57 ::
evident that (late) Sanjay Mahajan, brother of PW-17 was the real person behind the whole thing.
13.1 It was further argued on behalf of A-2 that the factum of death of Raghunath Dass has neither been investigated nor proved; from the charge framed against the accused, it is not clear as to which was the false, fabricated and forged document imputed to A-2 P.V. Khullar; the fact that the original Perpetual Lease Deed on record is a genuine document, stands proved by CBI's own witness PW-10 Sanjeev Pandey; further, PW-12 Advocate Vivek Kohli, gave the opinion that Raghunath Dass had good right, title and interest in the said property and the same was unencumbered and could be equitably mortgaged. In view of these facts, CBI has failed to prove charge under Section 420, 471 r/w Section 468 IPC against A-2 P.V. Khullar. 13.2 It was further pleaded that so far as charge of conspiracy is concerned, it is settled position of law that unlawful agreement is a sine qua non for constituting an CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 57 of 103 :: 58 ::
offence under Section 120-B IPC. The prosecution must prove some physical manifestation of the said agreement; mere association or relation to lead a conspiracy is not enough. It was further argued that to prove conspiracy, the chain of incriminating circumstances connecting the accused to the crime should be complete; the circumstances must point towards the irresistible conclusion of guilt of the accused; even if one link in the chain is broken, the allegation is not proved. It requires specific proof against each of the conspirators participating in a particular design to do a particular criminal thing. Learned counsel also argued that a few bits here and a few bits there are not adequate to connect the accused to the offence of criminal conspiracy and placed reliance upon K.R. Purushottam Vs. State of Kerala (2005) 2 SCC 631, Shreya Jha Vs. CBI (2007) JCC (3) 2318, Shailender Nath Mitra VS. State 1954 Crl. L. J. 979, Ms. Arunwan Thamvaro Vs. State 119 (2205) DLT 433 and Navjot Singh Siddhu Vs. State of NCT 2005 SCC (CRI) 1715, in support.
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13.2.1 It was pleaded that CBI has failed to prove any meeting of mind between A-2 P.V. Khullar and other accused persons; A-2 P.V. Khullar had already resigned from directorship of M/s POPL on 09.10.1995 and had nothing to do with its affairs; there is no evidence that A-2 P.V. Khullar shared any gratification with A-1. Rather, from the testimony of PW-14 Vijay Kumar Marwah, it is clear that A-2 P.V. Khullar came into picture only after the loan became irregular; he stepped in for regularization of the loan; the loan was regularized and subsequently, A-2 even paid bank's dues in one time settlement. Thus, there is no evidence on record to even show that A-2 was part of conspiracy; A-2 P.V. Khullar therefore, deserve to be aquitted.
13.3 It was further argued that CBI adopted pick and choose policy; advocate Vivek Kohli, who gave the legal opinion was the accomplice; but, he has not been made an accused and was rather produced as a witness. 13.4 On the other hand, it was argued by learned CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 59 of 103 :: 60 ::
Prosecutor that A-2 P.V. Khullar was instrumental in obtaining of loan by M/s POPL from the IBD Branch on the basis of false property documents and by presenting impersonator as R.S. Raghunath Dass, which is clear from the evidence on record. 13.5 Admittedly, A-2 P.V. Khullar was the director of M/s POPL; he resigned from the directorship on 09.10.1995 and A-4 Raj Kumar Sharma was inducted as director, in his place; A-4 Raj Kumar Sharma, who stepped into the witness box as DW-6 deposed that Sh. Sharad Sharma, Managing Director of Vidhan Marbles Limited (VML), (in which A-4 Raj Kumar Sharma was also inducted as director) knew A-2 P.V. Khullar; Sh. Sharad Sharma told him that A-2 P.V. Khullar was arranging a loan from P&SB for his company M/s POPL as a group advance; but, as several of his companies were having dealings with Punjab & Sind Bank, he himself was not able to remain a director; Sh. Sharad Sharma asked him (A-4) to be a director in M/s POPL; and he was assured that there was nothing to worry as A-2 P.V. Khullar had already arranged for the property and submitted property documents to the bank;
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and that the said property has already been checked by the bank's advocate and valuation of property has also already taken place; A-4 Raj Kumar Sharma has further testified that he was also told that even wife of A-2 P.V. Khullar was standing guarantee for the said loan; on that assurance, he became the director in M/s POPL on 09.10.1995 and he continued as a director only till 20.04.1996. A-4 Raj Kumar Sharma also deposed that he had accompanied A-2 P.V. Khullar to the bank for signing of some documents, (but could not recollect the date); and on that day, he had also signed 5 or 6 cheques, in the bank.
13.5.1 In cross-examination by A-2 P.V. Khullar, DW-6 stated that both Sharad Sharma as well as A-2 P.V. Khullar told him that formalities of legal opinion and valuation report etc., of property to be mortgaged had already been completed. No suggestion to the contrary was put to DW-6 in his cross-
examination to the effect that A-2 P.V. Khullar had nothing to do with the loan to M/s POPL by P&SB and that he had no role in arranging of the said property, completion of formalities CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 61 of 103 :: 62 ::
viz. obtaining of legal opinion/ valuation of the said property. Nor was any suggestion put to DW-6 that A-2 had not requested DW-6 for joining as director, as he was not able to continue as a director, being director in his other companies; or that A-2 P.V. Khullar did not take DW-6 to P&SB, IBD for signing of various documents; and that A-2 was not present at the time of signing of loan documents. The only suggestion, which was put to DW-6 in cross-examination was that Sh. Sanjay Mahajan (since dead) instructed A-4 to make an application for loan to P&SB and that he provided the Valuation Report of the said property, which was categorically denied by DW-6/ A-4; no suggestion with respect to legal opinion was put to DW-6. DW-6 stated that he did not know any Sanjay Mahajan and therefore, there was no question of any Sanjay Mahajan instructing him and reiterated that legal opinion and valution report had already been obtained by A-2 P.V. Khullar prior to DW-6/ A-4 being inducted as director of M/s POPL. DW-6 further stated that rather, he (DW-6) was asked by A-2 P.V. Khullar to name (late) Sh. Sanjay Mahajan, before the Court, as he (A-2) has done. No suggestion to the CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 62 of 103 :: 63 ::
contrary was put to DW-6 even in this regard. 13.5.2 The fact that A-4 Raj Kumar Sharma was inducted into M/s POPL at the asking of A-2 P.V. Khullar finds support from the testimony of DW-5/ A-3 Vinay Kumar. DW-5 has deposed that M/s POPL was taken over by A-2 and his wife Smt. Madhu Khullar in August 1995; but, A-2 insisted upon A-3 Vinay Kumar to continue as authorized signatory of the company. He has further stated that after about two months, in September/ October 1995, A-2 P.V. Khullar inducted A-4 Raj Kumar Sharma, in his (A-2's) place, without disclosing this fact to him. same is not disputed as no suggestion to the contrary was put to DW-5 in cross-examination. It is interesting to note that in his statement under Section 313 Cr.
PC, A-2 stated that after he left the company, Sh. Mahajan (Sanjay) inducted new director (i.e. A-4 Raj Kumar Sharma) in the company. But, no such suggestion was put to DW-5 in cross-examination. Same exposes the falsehood of A-2 P.V. Khullar. It is a matter of record that Sanjay Mahajan was not the director of M/s POPL at the time of making of loan CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 63 of 103 :: 64 ::
application/ sanction. As already noted above, A-2 P.V. Khullar has failed to place on record any material to demonstrate late Sanjay Mahajan's association with M/s POPL. Falsity of A-2 P.V. Khullar's suggestion is also laid bare by further evidence on record, as discussed in subsequent paras. Version of DW-6 that A-2 was having many companies also finds corroboration from A-2's own suggestion to PW-17 in cross-examination, to which PW-17 replied "It is correct that A-2 P.V. Khullar had various companies.
13.5.2.1 The fact that A-2 had many companies/ was director in other companies, which had an account with IBD Branch is also evident from Ex.PW3/99, Minutes of Meeting held on 07.01.1998, at head office, P&SB, in respect of NPA accounts of Branch Office IBD. It was A-2 P.V. Khullar, who attended the said meeting as director/ representative of M/s POPL, M/s Morgan Tectronics Ltd. and Shalu Exports. As already discussed in para-10.2.3 (supra), A-2 P.V. Khullar was a director in M/s Morgan Tectronics, which had already availed loan from IBD Branch. A-2 P.V. Khullar in his statement CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 64 of 103 :: 65 ::
under Section 313 Cr.PC has admitted that he attended the meeting called by Managing Director on 07.01.1998. He has also not disputed Ex.PW3/99, the minutes of the said meeting. From Ex.PW3/99. It is apparent that other two companies of A-2 P.V. Khullar, namely M/s Morgan Tectronics and M/s Shalu Exports were already dealing with/ had availed loan facilities from IBD Branch. Same also lends credence to the version of DW-6 that he was told by A-2 that several of his companies were having dealings with Punjab & Sind Bank, and therefore, he himself was not able to remain as director, for availing of loan by M/s POPL. From Ex.PW3/99, it is also evident that in all the aforesaid accounts (that is, M/s POPL, M/s Morgan Tectronics, M/s Shalu Exports) there were overdues and the said companies defaulted in repayment of bank's dues.
13.5.2.2 It has also come in the cross-examination of PW-14 (by A-3 Vinay Kumar and A-4 Raj Kumar Sharma) that A-2 P.V. Khullar only used to attend the meetings of Bank, as he was the authorized representative of M/s POPL. In his CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 65 of 103 :: 66 ::
cross-examination by A-2 P.V. Khullar, PW-14 reiterated the same and further stated that A-2 P.V. Khullar used to attend the meetings, because, he was earlier the Director of M/s POPL and had been dealing with the bank since beginning. 13.6 From the above facts and circumstances, it also becomes evident that A-2 P.V. Khullar resigned from directorship of M/s POPL on 09.10.1995 after procuring legal opinion dated 06.10.1995 (Ex.PW6/DD) and valuation report dated 08.10.1995 (Ex.PW6/DE); he stepped down as director, only on papers, as otherwise, M/s POPL would not have got credit facilities from IBD Branch, it being an "associate"/ group company of M/s Morgan Tectronics; and the said loan application would have fallen in the domain of the higher office. The fact that A-2 P.V. Khullar had resigned from directorship only on papers to circumvent the bank procedure, is discussed in detail in subsequent paras. 14.0 It has come in the testimony of PW-17 Sh. M.C. Mahajan that he was in possession of first floor of the said CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 66 of 103 :: 67 ::
property during the period 1994 to 1999; he had taken the possession from Sh. Anil Sethi by paying him Rs.1 lac, as Sh. Anil Sethi did not have any property documents; no document in this regard was executed. PW-17 has also stated that he knew A-2 P.V. Khullar through a common friend Sh. Neelam S/o Sh. Dhani Ram. He even identified A-2 P.V. Khullar in the Court. PW-17 further testified that he had given space in the said property to A-2 P.V. Khullar for his office. It is noteworthy that A-2 P.V. Khullar has admitted in his statement under Section 313 Cr.PC that Sh. M.C. Mahajan was in possession of the said property for last ten years. Although, he further stated that Sh. M.C. Mahajan gave the property papers to Sh. Sanjay Mahajan, who furnished the same to the bank. The said suggestion when put to PW-17 Sh. M.C. Mahajan in cross-examination, was categorically denied by him. Further, as noted in para-8.2.4.3 (supra), A-2 P.V. Khullar has failed to demonstrate Sanjay Mahajan's connection with M/s POPL in 1995. Moreover, if A-2 had nothing to do with the affairs of M/s POPL, how did he know that Sanjay Mahajan had furnished said papers.
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14.1 A-2 P.V. Khullar has also not disputed that he was given space in the said property for his office purpose by PW-17, as no suggestion to the contrary was put to PW-17. The fact that A-2 P.V. Khullar was using the said property is also corroborated by Ex.PW13/C-1, certified copy of Property Deed Register of P&SB, IBD Branch, which was proved by PW-13 Sh. Manjeet Singh. Otherwise also, Ex.PW13/C-1 is not disputed as PW-13 was not cross-examined in that regard. 14.1.1 It may be noted here that as per loan proposal, Mark A (PW-8) (colly.), two properties were offered as collateral security by M/s Morgan Tectronics, a sister concern of M/s POPL, in which A-2 P.V. Khullar was the director; the said properties are entered in the Property Deed Register (Ex.PW13/C-1); the official address of M/s Morgan Tectronics Limited in that register is mentioned as "65/2, New Rohtak Road, New Delhi", that is, the said property, which was offered as collateral security by M/s POPL. Same exposes the falsehood of A-2 that he had no connection with the said property.
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14.2 As discussed above that it has come in the testimony of PW-17 that there was no property document with Anil Sethi, who gave PW-17 possession of 1st floor of the said property. As noted in paras-8.2.4, 8.2.4.1 & 8.2.4.2 (supra), A-2 P.V. Khullar himself suggested to PW-3 and PW-17 in cross-examination that the said property was not owned by Raghunath Dass; and that the property document/ Perpetual Lease Deed Ex.PW1/DA (copy of which is Ex.PW3/11), was organized and filed with the bank; and also that Sh. Dhani Ram was produced as Raghunath Dass before the bank as the legal owner of the said property and for signing of various documents.
14.2.1 It is also a matter of record that A-2 P.V. Khullar's wife, Smt. Madhu Khullar stood guarantor for credit facilities granted to M/s POPL. It is intriguing that as to how and why A-2's wife stood as guarantor for securing credit facilities to the tune of Rs.175 lacs, when A-2 P.V. Khullar had nothing to do with M/s POPL.
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15.0 A-2 P.V. Khullar produced his wife Smt. Madhu Khullar as DW-7. In her testimony as defence witness of A-2 P.V. Khullar, she stated that she became the guarantor (for loan to M/s POPL) at the request of A-3 Vinay Kumar; and that she was scolded by her husband A-2 P.V. Khullar and other family members, when they came to know about the same. Further, in her cross-examination, DW-7/ Smt. Madhu Khullar stated that she did not know whether she stood guarantee for loan facility to M/s Morgan Tectronics as well as M/s POPL. Her falsehood is exposed by Office Note Ex.PW3/23, as per which bank had required to obtain the personal guarantee of Smt. Madhu Khullar, she being the major shareholder of M/s POPL; accordingly, Smt. Madhu Khullar stood guarantee as per the requirement of the bank (for sanction of loan to M/s POPL), and not at the asking of A-3 Vinay Kumar. 15.1 It is also a matter of record that Smt. Madhu Khullar was a director of M/s POPL and had been signing cheques on behalf of M/s POPL in her capacity as director [as discussed in detail in para-15.3 (infra)]. Interestingly, in her CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 70 of 103 :: 71 ::
cross-examination as DW-7, Smt. Madhu Khullar, on one hand stated that she had no role in M/s POPL and other companies namely M/s Morgan Tectronics and M/s Shalu Exports and that she was never a director in M/s POPL. But, on the other hand, she stated that she does not know whether she was a director in M/s POPL. In her cross-examination, by learned Prosecutor w.r.t. the cheques signed by her as director of M/s POPL, DW-7/ Smt. Madhu Khullar stated that as she was never a director of M/s POPL, she could not have signed the cheques as director of M/s POPL.
15.2 From the above facts and circumstances, it appears that Smt. Madhu Khullar was the name sake director and her husband, A-2 P.V. Khullar was managing the affairs of M/s POPL.
15.3 The fact that A-2 P.V. Khullar was very much running the affairs of M/s POPL is also evident from the fact that he was signing cheques on behalf of/ the account of M/s POPL, which were passed by the bank. Same shows that he was the authorized signatory of M/s POPL. It has come on CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 71 of 103 :: 72 ::
record vide testimony of PW-3 Sh. Vipan Ghai that the following cheques by M/s POPL, were issued under the signatures of A-2 P.V. Khullar & Smt. Madhu Khullar, which were passed vide vouchers Ex.PW3/58, Ex.PW3/59, Ex.PW3/62, Ex.PW3/87 and Ex.PW3/89, respectively :-
Cheque Date Amount Signatories Issued in favour of
Ex.PW3/57 10.02.1996 Rs.1,11,851.25 A-2 P.V. M/s Key Leasing
Khullar and Finance Limited
Ms. Madhu
Khullar, as
Director
Ex.PW3/59 25.04.1996 Rs.3.50 lacs A-2 P.V. M/s Morgan
Khullar and Tectronics
Ms. Madhu
Khullar, as
Director
Ex.PW3/61 04.05.1996 Rs.4.90 lacs A-2 P.V. M/s R.J. Associates
Khullar and
Ms. Madhu
Khullar, as
Director
Ex.PW3/86 10.02.1996 Rs.1,15,834.00 A-2 P.V. M/s Goodwill India
Khullar and
Ms. Madhu
Khullar, as
Director
Ex.PW3/88 24.05.1996 Rs.1.50 lacs A-2 P.V. M/s Jai Rapid Roller
Khullar and Limited
Ms. Madhu
Khullar, as
Director
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15.3.1 Testimony of PW-3/ above cheques and vouchers, have remained unchallenged; thus, admittedly A-2 P.V. Khullar was signing cheques on behalf of M/s POL along with director/ wife Smt. Madhu Khullar. It is also noted that at the back side of the cheque, Ex.PW3/57 request under the signatures of Smt. Madhu Khullar and A-2 P.V. Khullar, as authorized signatories, is made for issuing the demand draft for an amount of Rs. 1,11,851.25 in favour of M/s Key Leasing & Finance Ltd. payable at Kanpur. Further, vide Ex.PW3/59 cheque number 697621 dated 25.04.1996, an amount of Rs. 3.50 lacs was credited in the current account no. 40 of M/s Morgan Tectronics Ltd, (in which A-2 was the Director) maintained with IBD branch. Ex.PW3/61 cheque number 697623 dated 04.05.1996, was issued for issuance of pay order in favour of R.J. Associates Ltd. for Rs. 4,90,000/-.
Ex.PW3/86, cheque no. 697595 dated 10.02.1996 was signed by A-2 P.V. Khullar and Smt. Madhu Khullar and on the back side of the said cheque, a request was made under the signatures of A-2 P.V. Khullar and Smt. Madhu Khullar to the bank to issue a pay order of Rs.1,15,834/- in favour of M/s CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 73 of 103 :: 74 ::
Goodwill India Limited, which was issued. Further, Ex.PW3/88, cheque no. 697620 dated 24.05.1996 was signed by A-2 P.V. Khullar and Smt. Madhu Khullar; at the back side of the same, request under the signatures of A-2 P.V. Khullar was made to the bank to issue pay order in favour of M/s Jai Rapid Roller Limited for an amount of Rs.1.50 lacs, which was issued. 15.3.2 It is also noted that Ex.PW3/72, cheque no.
697634 dated 09.11.1996 drawn on the current account no. 2050 of M/s POPL, for an amount of Rs. One Lac, in favour of "Self" was issued by A-3 Vinay Kumar, Director of M/s POPL; the said amount was received by A-2 P.V. Khullar, who has signed at the backside of the said cheque, in acknowledgment of receipt of the said amount. A-2 P.V. Khullar has not denied the same and has simply stated in his statement under Section 313 Cr. PC that the payment of the said amount may have been taken by him, but being an old matter, he is not able to recollect.
15.3.3 It is noteworthy that although A-2 P.V. Khullar did not dispute his signatures on the aforesaid cheques, as no CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 74 of 103 :: 75 ::
suggestion to the contrary was put to PW-3, in cross- examination. But, in his statement under Section 313 Cr.PC, A-2 P.V. Khullar denied his signatures on the cheques Ex.PW3/57, Ex.PW3/59, Ex.PW3/61, Ex.PW3/86 and Ex.PW3/88. Same exposes the falsehood of A-2 P.V. Khullar. The fact that A-2 P.V. Khullar was signing cheques on behalf of M/s POPL clearly shows that he was the authorized signatory of M/s POPL and thus, was very much involved in its affairs. It may be mentioned that during the course of arguments, the learned defence counsel for A-3 Vinay Kumar and A-4 Raj Kumar Sharma while pleading that A-2 P.V. Khullar was running the affairs of M/s POPL and was authorized signatory of M/s POPL, filed copy of board resolution/ extracts of minutes of board meeting of M/s POPL held on 03.11.1995. Whereby, it was resolved that account of M/s POPL with IBD Branch shall be operated on dual signatory basis by Smt. Madhu Khullar (Director) and anyone of either A-3 Vinay Kumar (Director), A-4 Raj Kumar Sharma (Director) OR A-2 P.V. Khullar, authorized signatory. It was further argued that the said resolution shows that A-2 P.V. Khullar was made an CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 75 of 103 :: 76 ::
authorized signatory on 03.11.1995, that is, the very next day after the formalities/ execution of documents etc. for loan were completed on 02.11.1995. Let me mention here that the said document cannot be looked into at this stage. But, it is unfortunate that the Investigating Officer did not collect the relevant details about M/s POPL from the Registrar of Companies (ROC).
15.4 The falsehood of A-2 P.V. Khullar's version in his statement under Section 313 Cr.PC that after resigning from the directorship of M/s POPL on 09.10.1995, he had nothing to do with M/s POPL; he never remained in contact with the directors/ company; that he had rejoined as director of M/s POPL only on 19.01.1997 also stands exposed by the above material on record. From the above cheques, it is evident that even after his resignation on 09.10.1995 and prior to his joining as director again in 1997, A-2 P.V. Khullar was signing the cheques along with his wife, Smt. Madhu Khullar, director of M/s POPL, in February, April and May 1996. Not only that, A-2 P.V. Khullar was signing cheques on the account of M/s CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 76 of 103 :: 77 ::
POPL, but, he also received a sum of Rs. One lac in cash from account no. 2025 of M/s POPL vide cheque Ex.PW3/72; sum of Rs.3.50 lacs was transferred to the sister concern, M/s Morgan Tectronics Limited vide cheque Ex.PW3/59, of which A-2 P.V. Khullar was director. It is also significant to note that Smt. Madhu Khullar, DW-7, during her cross-examination by learned Sr. PP, has not denied her signatures on the cheques Ex.PW3/52, Ex.PW3/57, Ex.PW3/59, Ex.PW3/61, Ex.PW3/86 & Ex.PW3/88. With respect to cheque Ex.PW3/57, DW-7 stated that the said signatures may be hers. With respect to other cheques, DW-7, simply stated that she did not remember whether the signatures on the same were hers; and that the same may be hers. As noted above, these facts also points towards the fact that A-2 P.V. Khullar was dealing with affairs of M/s POPL himself.
16.0 A-2 P.V. Khullar's interest in M/s POPL is also evident from Ex.PW3/19, letter dated 25.10.1995, of M/s POPL vide which further information was supplied to IBD Branch; as per Ex.PW3/19, M/s Morgan Tectronics Limited (in which A-2 CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 77 of 103 :: 78 ::
P.V. Khullar was the director), was one of the the sub- contractors of M/s POPL.
16.1 Further, A-2's plea in his statement under Section 313 Cr.PC that he had never been the beneficiary of loan to M/s POPL is falsified by above facts, which show that A-2 P.V. Khullar was very much part of/ had interest in M/s POPL, which availed the credit facilities. Besides, A-2 P.V. Khullar even received an amount of Rs.1 lac in cash; and a sum of Rs.3.50 lacs was received by his company M/s Morgan Tectronics, from the account of M/s POPL.
17.0 Further, it has come on record vide testimony of DW-5/ A-3 Vinay Kumar that A-2 only was looking after the bank recovery case on behalf of M/s POPL. Said fact has remained unchallenged, as no suggestion to the contrary was put to DW-5 by A-2 P.V. Khullar. It is a matter of record that A-2 was not even a party to the said recovery suit of the bank.
17.1 As per his own version, A-2 P.V. Khullar stepped in CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 78 of 103 :: 79 ::
to regularize the account of M/s POPL and had entered into One Time Settlement (OTS) with the bank and paid settled amount to the tune of Rs.2 crores. Although, in his statement under Section 313 Cr.PC, A-2 has provided justification that he adjusted the bank's dues (by selling his residential property), because his wife was a guarantor. Even other directors A-3 Vinay Kumar & A-4 Raj Kumar Sharma, were also guarantors.
17.2 Falsehood of A-2 P.V. Khullar is also exposed from the following suggestions put to A-3/ DW-5 by A-2 in cross-
examination:
(i) A-2 suggested to A-3/ DW-5 Vinay Kumar in cross-
examination, that he (A-2) resigned from M/s POPL as he did not like the working of A-3/ DW-5. Whereas, in his statement under Section 313 Cr.PC, A-2 has stated that he resigned from directorship of M/s POPL on 09.10.1995 for personal reasons;
(ii) A-2's suggestion to A-3/ DW-5 Vinay Kumar in cross- examination that at DW-5's request Smt. Madhu Khullar CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 79 of 103 :: 80 ::
became a guarantor is also contrary to record, as discussed in para - 15.0 (supra).
(iii) A-2's suggestion to A-3/ DW-5 that he agreed to become director of M/s POPL on 01.01.1997 so that his wife Smt. Madhu Khullar did not have to pay as a guarantor, is also contrary to the record; it has come on record that A-2 never disassociated from the affairs of M/s POPL, as discussed in detail in paras-15.3, 15.3.1 15.3.2 & 15.3.3 (supra). Further, DW-5 in his cross-examination stated that A-2 was heading day to day affairs of M/s POPL. No suggestion to the contrary was put to DW-5 that A-2 had nothing to do with the affairs of M/s POPL.
17.3 The fact that A-2 was involved in making arrangement of bank loan is also evident from his own statement under Section 313 Cr.PC, where he has stated that Sh. M.C. Mahajan and Sh. Sanjay Mahajan approached him in doing some import and export business for which they sought his help to get bank limits from some banks. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 80 of 103 :: 81 ::
18.0 Learned counsel for A-2 P.V. Khullar also argued that the testimony of A-3 and A-4 is unworthy of credit, particularly because, neither did they put their defence to any witness in cross-examination, nor did they state so in their statement under Section 313 Cr.PC; they set up a new story for the first time, when they stepped into the witness box in their defence; their version even remains uncorroborated; the uncorroborated testimony of the accomplice is inadmissible in law. Reliance in support was placed upon the judgment - Bhiva Doulu Patil Vs. State of Maharashtra AIR 1963 SC 599.
18.1 As discussed in preceding paras, A-3 Vinay Kumar and A-4 Raj Kumar Sharma, who stepped into witness box as DW-5 & DW-6, respectively were not cross-examined on certain aspects. Their such unchallenged testimony against A-2 P.V. Khullar also stood corroborated from evidence on record. Thus, judgment in Bhiva Doulu Patil's case (supra) does not help A-2 P.V. Khullar, in any manner. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 81 of 103 :: 82 ::
18.2 From the above facts and circumstances and evidence on record, it is established that A-2 P.V. Khullar was instrumental in doing the ground work for arranging credit facilities for M/s POPL viz. procuring property papers (which could not have passed any right, title or interest in favour of bank) and obtaining legal opinion & valuation report w.r.t. the said property; he attended the bank on 02.11.1995 and remained present at the time of execution of documents by A-3 Vinay Kumar, A-4 Raj Kumar Sharma, the impersonator as Raghunath Dass and his wife Smt. Madhu Khullar, who stood guarantee for the credit facilities; he assisted in procuring credit facilities on the basis of false/ bogus documents; and ultimately the account became irregular; bank's dues were not paid, thus, cheating the bank. A-2 P.V. Khullar, as authorized signatory had been issuing cheques on behalf of M/s POPL, during the period when he admittedly was not the director of M/s POPL and as per himself, had nothing to do with M/s POPL; he himself/ his sister concern derived benefit;
A-2 P.V. Khullar was following up recovery suit against M/s POPL, (pending before DRT) although, he was not a party to CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 82 of 103 :: 83 ::
the same; not only that, he even entered into settlement with the bank and paid a sum of Rs.2.0 crores. Thus, it is also established beyond reasonable doubt that A-2 P.V. Khullar was not only instrumental in procuring of credit facilities on the basis of false/ bogus documents, but also very much managing the affairs of M/s POPL, although he had put in his resignation on 09.10.1995. In view of these findings, argument of learned defence that CBI has failed to place on record any material to link A-2 P.V. Khullar with the alleged offences lacks merit; and therefore, the case law as relied upon by A-2 P.V. Khullar is of no assistance to him.
19.0 So far as A-3 Vinay Kumar and A-4 Raj Kumar Sharma are concerned, learned defence counsel argued that A-3 and A-4 had nothing to do with the day to day operations of M/s POPL; the affairs of M/s POPL were managed by its promoters A-2 P.V. Khullar and his wife Smt. Madhu Khullar; Madhu Khullar also stood as guarantee for loan transaction, as it was a group advance of M/s Morgan Tectronics Limited; further, A-2 P.V. Khullar as a representative of group CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 83 of 103 :: 84 ::
companies, had introduced M/s POPL's account as his other company M/s Morgan Tectronics Limited, already had an account with IBD Branch. It is pleaded that CBI has failed to demonstrate as to how A-3 and A-4 were responsible for any act of M/s POPL; and that CBI has failed to bring on record any evidence to show their involvement in placing on record the property documents, which were not genuine. A-3 & A-4 only signed/ executed the legitimate loan documents and cheques, as they were directors/ authorized signatories as per Ex.PW3/4, Board Resolution dated 09.10.1995; as per the said resolution, they were authorized for the purpose of loan transaction involved in this case; they had no role in M/s POPL except execution of the said documents and signing of cheques; even the cheques were signed by them at once and the same were used by the management of M/s POPL from time to time, by filling in the details.
19.1 It was further argued that the said property was arranged by the promoters/ management of M/s POPL, that is, Smt. Madhu Khullar and A-2 P.V. Khullar and A-3 & A-4 had no CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 84 of 103 :: 85 ::
role in the same. It was pleaded that it has come in the testimony of PW-17, that the promoters had their office at 65/2, New Rohtak Road, New Delhi, the property which was offered as collateral security to the bank; A-3 had bona fide signed, as an authorized signatory, only the covering letter dated 01.11.1995 vide which the Title Deed was submitted by the company M/s POPL to the bank; he had signed the said letter after satisfying himself about the same from the legal opinion of bank's advocate dated 06.10.1995 and valuation report dated 08.10.1995.
19.2 It was also argued that in view of the above, it is clear that A-3 and A-4 have been charged merely because they were directors of M/s POPL; the directors cannot be held vicariously liable for the acts of the company under the criminal law, except where it is specifically provided for in the Statute; even in the Statutes which provide for the vicarious liability, the liability can be fastened only on those persons, who are in-charge of day to day affairs of the management of the company. Learned defence counsel placed reliance upon CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 85 of 103 :: 86 ::
judgments titled S.K. Alagh Vs. State of Uttar Pradesh & Ors. (2008) 5 SCC 662, S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla & Anr. (2005) 8 SCC 89, Murari Lal Vs. State of Madhya Pradesh, (1980) 1 SCC 704, in support.
19.3 Learned defence counsel also argued that Sections 420/ 471 IPC contemplate dishonest intention on the part of accused from the beginning of the transaction. A-3 and A-4 acted bona fide as per the Board Resolution; they had no reason to believe that the Title Deeds were forged, in view of the legal opinion and the valuation report; the accused persons never had any dealings with the concerned property or its owners. In view of the same, no charge under Sections 420 IPC and 471 IPC is made out against them. Learned counsel placed reliance upon the judgments titled Hira Lal Hari Lal Bhagwati Vs. CBI, New Delhi (2003) 5 SCC 257, Harmanpreet Singh Ahluwalia & Ors. Vs. State of Punjab & Others, (2009) 7 SCC 712, G.V. Rao Vs. L.H.V. Prasad & Ors, (2009) 3 SCC 693, A.S. Krishnan & Ors Vs. State of Kerala (2004) 11 SCC 576, in support.
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20.0 It may be mentioned, as per A-3's own version (as DW-5), company M/s POPL was incorporated by him/ A-3 Vinay Kumar along with his friends Sh. V.K. Bajaj and Sh.Vishal Arora, in March 1995. A-3/ DW-5 Vinay Kumar has stated that subsequently, as he decided to close the company, he approached A-2 P.V. Khullar and his wife Ms. Madhu Khullar for taking over the same; they agreed to take over M/s POPL; accordingly, on 08.08.1995, he handed over to them, the documents pertaining to M/s POPL including resignations of the directors, namely, Sh. V.K. Bajaj and Sh. Vishal Arora; he also transferred shares and signed necessary documents; A-2 P.V. Khullar joined this company as a director. A-3 has further stated that A-2 P.V. Khullar requested him (A-3 Vinay Kumar) to continue as director and authorized signatory of M/s POPL for some time; he reluctantly continued to be associated with M/s POPL at A-2's insistence.
20.1 A-3 Vinay Kumar has also deposed (as DW-5) that A-2 P.V. Khullar was already having a loan account with CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 87 of 103 :: 88 ::
Punjab & Sind Bank; on 14.10.1995, A-2 sent him one board resolution dated 09.10.1995 authorizing him to sign certain bank documents and legal opinion of a bank's advocate Sh. Vivek Kohli regarding a property and also the valuation report; although, he was not interested in any such loan, but, at the insistence of A-2 P.V. Khullar and his assurance that he (A-3) would soon be relieved from M/s POPL, he signed the letter addressed to P&SB and handed the same over to A-2's representative. He has also stated that although, the said letter mentioned about some property papers being enclosed, but no such property papers were sent to him with the letter. A-3 Vinay Kumar has further stated that thereafter, A-2 informed him about the sanctioning of loan by the bank and that he (A-3) was required to visit the bank for signing of some documents; on the asking of A-2 P.V. Khullar, he visited P&SB perhaps on 30.10.1995 and signed certain documents along with A-4 Raj Kumar Sharma.
20.2 Thus, admittedly the company M/s POPL was CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 88 of 103 :: 89 ::
incorporated by A-3 Vinay Kumar; A-3 Vinay Kumar himself has stated that he approached A-2 P.V. Khullar, albeit for selling the company. The fact that A-3 Vinay Kumar approached P.V. Khullar has also come in the testimony of DW-7 Smt. Madhu Khullar, but for a different purpose. DW-7 has stated that A-3 Vinay Kumar told her that he wanted to start some business/ a company and would like to be helped by her husband A-2 P.V. Khullar, who had vast experience in the field; on which, she introduced A-3 Vinay Kumar to her husband/ A-2 P.V. Khullar; A-3 then started a company by the name of M/s POPL, which was also joined by her husband. No suggestion to the contrary was put to DW-7 in this regard; thus, her version has remained unchallenged. Further, A-3 Vinay Kumar did not put his defence to any prosecution witness; nor has he stated anything in this regard in his statement under Section 313 Cr.PC.
20.2.1 As per his own version, A-3 continued to be the director of M/s POPL at the time, the loan application was made to P&SB and thereafter.
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20.2.2 It has already come on record that Ex.PW3/1, the loan application dated 12.10.1995 was made to P&SB by A-3 Vinay Kumar along with A-4 Raj Kumar Sharma. It may be mentioned that A-3 and A-4 are the only persons named as directors of M/s POPL in the loan application.
Further, even the company's profile submitted to IBD Branch by A-4 Raj Kumar Sharma vide letter dated 17.10.1995, mentions names of A-3 Vinay Kumar and A-4 Raj Kumar Sharma as the directors/ principal contacts; the loan application was submitted to the bank vide Ex.PW3/2 - forwarding letter of A-3 dated 14.10.1995. Vide this forwarding letter, A-3 Vinay Kumar also submitted the documents detailed therein including Provisional Balance- Sheet Ex.PW3/6, signed by A-4 Raj Kumar Sharma, Credit Management Authorization Data, Ex.PW3/7 signed by A-3 Vinay Kumar, Projected Balance-Sheet of M/s POPL, Ex.PW3/8 signed by A-3 Vinay Kumar, Statement of Assets & Liabilities of its Directors A-3 Vinay Kumar and A-4 Raj Kumar Sharma, Ex.PW3/9 (colly.), filed under their signatures, certified true copy of Memorandum & Articles of Association of M/s POPL, CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 90 of 103 :: 91 ::
Ex.PW3/12, certified by A-3, Copy of Perpetual Lease Deed dated 04.05.1943 of said property in favour of Raghunath Dass, Ex.PW3/11, etc. In the Loan Application A-3 Vinay Kumar and A-4 Raj Kumar Sharma, mentioned the name of the guarantor Raghunath Dass and even gave the details of the property to be mortgaged and its value as Rs.125 lacs.
20.2.2.1 Not only this, after filing of the Loan Application, A-3 Vinay Kumar and A-4 Raj Kumar Sharma also filed Ex.PW3/13, Application Form for Allotment of IEC Code (under the signatures of A-3), Assets & Liabilities Statement of Raghunath Dass Ex.PW3/14, copies of Form 32 filed with ROC, Ex.PW3/15, with respect to change of directors, that is, induction of A-4 in place of A-2 P.V. Khullar and acceptance of resignation of A-2 P.V. Khullar.
20.2.3 As mentioned in paras - 8.1 & 8.1.1 (supra), even subsequently, during the appraisal of loan application of M/s POPL, A-4 Raj Kumar Sharma vide his letter dated 25.10.1995, Ex.PW3/19, provided further information/ clarifications; vide CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 91 of 103 :: 92 ::
said letter, A-4 Raj Kumar Sharma even informed the bank that the conversion of the said property (offered as collateral security) from lease hold to freehold shall take six months, and therefore, shall be applied for after the sanction of loan.
20.2.4 The above documents are not disputed by A-3 Vinay Kumar and A-4 Raj Kumar Sharma, as PW-3 was not cross-examined in this regard. These documents are admitted by A-3 and A-4 even in their statement under Section 313 Cr.PC. Although, both of them (A-3 and A-4) have further stated that being the authorized signatory of M/s POPL, they had submitted and signed the loan application and other documents to the bank, only after satisfying themselves from the legal opinion dated 06.10.1995, which mentioned that title deed was perfect and capable of creating equitable mortgage and also after going through the valuation report dated 08.10.1995; and that they acted bona fide. But, no such defence was put to PW-3/ any other witness. 21.0 Further, it has come in the testimony of PW-3 that CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 92 of 103 :: 93 ::
vide Ex.PW3/24, letter dated 01.11.1995, A-3 Vinay Kumar submitted the original Title Deed of the said property to the bank. No suggestion to the contrary was put to PW-3 in cross-examination. Thus, admittedly, A-3 submitted the original Title Deed of the said property to the bank. Whereas, when A-3 stepped into the witness box as DW-5, he presented a different version; he stated that the said letter (Ex.PW3/24) addressed to Punjab & Sind Bank, which mentioned about enclosing property papers was sent to him by A-2 for signatures; but, no such property papers were enclosed with the said letter; after signing the letter, he had handed it over to the representative of A-2 P.V. Khullar. To the contrary, in his statement under Section 313 Cr.PC, A-3 Vinay Kumar stated that only after being satisfied with the bank's lawyer's report as well as the valuation report, he had submitted the Title Deed to the bank. Moreover, the defence now put up by A-3 was not put to PW-3 in cross-examination. Same exposes the falsehood of A-3 Vinay Kumar.
21.1 Further, A-3 not only made an application for CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 93 of 103 :: 94 ::
loan, but, both A-3 Vinay Kumar and A-4 Raj Kumar Sharma admittedly visited the bank on 02.11.1995 and signed various loan documents, when Smt. Madhu Khullar and impersonator as Raghunath Dass also appeared and signed guarantee/ other documents. Not only that, they even gave their personal guarantees to secure loan to M/s POPL and signed Guarantee Bonds, Ex.PW3/40 (A-3) & Ex.PW3/41 (A-4). They also signed Ex.PW3/46, the Certificate of Execution of Documents along with of the impersonator, who appeared as Raghunath Dass.
21.1. 1 Further, as per the shareholding pattern, disclosed in A-4 Raj Kumar Sharma's letter dated 25.10.1995 Ex.PW3/19, A-3 Vinay Kumar and A-4 Raj Kumar Sharma, Smt. Madhu (Khullar) held shares worth 0.10 lacs, 1.00 lacs and 1.50 lacs, respectively. Same belies their version that they had no stake in M/s POPL and had only signed the loan documents at the request of A-2 P.v. Khullar. 21.1.2 It may also be mentioned that vide aforesaid letter Ex.PW3/19, A-4 Raj Kumar Sharma provided their CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 94 of 103 :: 95 ::
experience under the head "Experience of directors"; it mentioned that A-3 Vinay Kumar started his career in 1979 and was earlier engaged in export business under the name and style of M/s Neon Fab engaged in export of rice and garments; and thereafter, he started a firm M/s Saran Trading Company dealing in electrical and TV components. A-4 Raj Kumar Sharma is described as a reputed businessman, who worked as a Manager with M/s Raj Iron & Metal Udyog; he is also shown to be on the board of four companies, namely M/s VML, M/s Jumbo Chemicals & Allied Industries Private Limited, M/s Sunika Alloys Private Limited, M/s NEK Electronics Limited. It also mentions that A-4 Raj Kumar Sharma had acquired good knowledge in jewellery export business and had started his own business under the name and style of M/s Mudgal Jewellers.
22.0 A-3 Vinay Kumar admittedly, is a businessman of long standing; as per A-3 Vinay Kumar's own case, he had sold the company M/s POPL to A-2 P.V. Khullar and his wife Smt. Madhu Khullar; and that only at A-2 P.V. Khullar's CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 95 of 103 :: 96 ::
insistence, he reluctantly continued as director; he was not even interested in any loan. In view of these facts, A-3 Vinay Kumar's plea of signing the loan application, loan documents, furnishing of title deeds, standing guarantee for the loan sanctioned to M/s POPL, just at the asking of A-2 P.V. Khullar, is unfathomable. Moreover, no such defence was taken by A-3 Vinay Kumar at any stage, during trial. Nor was any evidence except his own testimony, led by him.
23.0 Same is the case with A-4 Raj Kumar Sharma. As per his own admission, A-4 Raj Kumar Sharma was on the board of four companies and had good knowledge of business of export of jewellery. As per his own version, he had reluctantly agreed to join as a director in M/s POPL on pursuation/ assurance of Sharad Sharma, that he can be a director of M/s POPL without any involvement in its affairs. Further, A-4 Raj Kumar Sharma in his statement under Section 313 Cr.PC has stated that he acted bona fide based on the legal opinion of bank's advocate and valuation report, which stated that the title was perfect and equitable CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 96 of 103 :: 97 ::
mortgage could be created; but, the said defence was not put to any witness. Further, it has come in A-4/ DW-6's own cross- examination (by A-2) that he had not personally seen the legal opinion and valuation report and has stated that he was told about the same by Sharad Sharma and A-2 P.V. Khullar. He (A-4 Raj Kumar Sharma) has further stated in cross- examination that he did not have knowledge that he needed to see all these documents. It is intriguing that A-4 Raj Kumar Sharma, a businessman and already on the board of four companies and who (as per his version) had nothing to do with M/s POPL & had joined M/s POPL not to be involved in its affairs; then where was the occasion for him (A-4) to, not only apply for loan, execute loan/ security documents, but also, stand guarantor, without even looking at the title deeds/ legal opinion.
24.0 It has come on record vide testimony of PW-3 that A-3 Vinay Kumar and A-4 Raj Kumar Sharma were also signing cheques on behalf of M/s POPL; they signed following cheques on account no. 2050 of M/s POPL:-
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Cheque Date Amount Signatories Issued in favour of Ex.PW3/48 04.11.1995 Rs.5 lacs A-3 Vinay Punjab & Sind Bank Kumar & A-4 Raj Kumar (for issuing FDR for 12 Sharma months in favour of M/s POPL) Ex.PW3/49 09.11.1995 Rs.6,00,350/- A-3 Vinay Punjab & Sind Bank Kumar & A-4 Raj Kumar (for issuing Pay Order Sharma in favour of M/s Avon Exports Pvt. Limited) Ex.PW3/50 06.11.1995 Rs.1,00,200/- A-3 Vinay Punjab & Sind Bank Kumar & A-4 Raj Kumar (for issuing Pay Order Sharma in favour of M/s Priyanka Enterprises) Ex.PW3/51 08.11.1995 Rs.3,50,175/- A-3 Vinay Punjab & Sind Bank Kumar & A-4 Raj Kumar (for issuing pay order in Sharma favour of M/s Kunj Lal Rajender Kumar) Ex.PW3/53 06.11.1995 Rs.5 lacs A-3 Vinay Kumar & A-4 M/s NEK Electronics Raj Kumar Limited Sharma Ex.PW3/52 13.11.1995 Rs.1,00,100/- Smt. Madhu Punjab & Sind Bank Khullar & A-4 Raj Kumar (for issuing Pay Order Sharma in favour of M/s Saran Trading Company) Ex.PW3/54 25.01.1996 Rs.5 lacs Smt. Madhu Punjab & Sind Bank Khullar & A-3 Vinay Kumar (in the account of M/s Morgan Tectronics Limited) CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 98 of 103 :: 99 ::
Ex.PW3/72 09.11.1996 Rs.1 lac A-3 Vinay Self Kumar (Received in cash by A-2 P.V. Khullar) Ex.PW3/94 19.11.1997 Rs.2,50,125/- Sh. Sanjay Punjab & Sind Bank Mahajan and A-3 Vinay (for issuing Pay Order Kumar in favour of M/s POPL) 24.1 PW-3 was not cross-examined in this regard. Even otherwise, A-3 Vinay Kumar and A-4 Raj Kumar Sharma have not disputed their signatures on the cheques. Although, in their statement under Section 313 Cr.PC, they have stated that they had signed number of blank cheques at once, to be used by the Management of M/s POPL from time to time; and that the said cheques were filled in later by the Management;
they had no personal knowledge about the payments made by M/s POPL. But, no such suggestion/ defence was put to PW-3, in cross-examination.
24.2 From the aforesaid cheques, admittedly issued by A-3 Vinay Kumar and A-4 Raj Kumar Sharma, it is noted that A-3 Vinay Kumar's proprietorship firm M/s Saran Trading Company received a sum of Rs.1,00,100/- vide Ex.PW3/52, CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 99 of 103 :: 100 ::
cheque dated 13.11.1995 drawn on M/s POPL's current account. It may be mentioned that A-3/ DW-5 Vinay Kumar in his cross-examination by learned Prosecutor admitted that a sum of Rs.7 lacs vide cheque dated 30.10.1995 Ex.DW5/PA was also received by M/s Saran Trading Company; and that M/s Saran Trading Company is his proprietorship concern. A-3 Vinay Kumar also admitted that cheque Ex.DW5/PA for an amount of Rs.7 lacs was issued under his signatures on behalf of M/s POPL. No explanation has come on record from A-3's side about receipt of amounts of Rs.7 lacs and Rs. 1,00,100/- by his concern from M/s POPL, when he had nothing to do with M/s POPL. This amount could not have been even towards sale consideration of M/s POPL, because, A-3 Vinay Kumar himself has stated in his cross-examination by A-2 P.V. Khullar that A-2 had to pay him (for purchase of M/s POPL) in kind (goods) and not cash.
24.3 It is noteworthy that even a payment of Rs.5 lacs vide cheque Ex.PW3/53, (issued under the signatures of A-4 Raj Kumar Sharma and A-3 Vinay Kumar) was made to M/s CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 100 of 103 :: 101 ::
NEK Electronics, on whose board, A-4 Raj Kumar Sharma was. No explanation has come from the side of A-4 Raj Kumar Sharma about the said payment.
25.0 As per A-4 Raj Kumar Sharma's own version, he joined in place of A-2, so that M/s POPL could get its loan sanctioned from IBD Branch. Thus, A-4 Raj Kumar Sharma as per his own version joined as director in place of A-2 P.V. Khullar to facilitate circumventing of bank norms and crossing the hurdle of "group advance" by virtue of common director.
26.0 In view of the above facts and circumstances and evidence on record, it is thus established beyond reasonable doubt that A-3 Vinay Kumar and A-4 Raj Kumar Sharma in league with A-2 P.V. Khullar and A-1 J.B.S. Bedi obtained credit facilities from IBD Branch to the tune of Rs.175 lacs by furnishing false information/ documents and on the basis of title deeds/ perpetual lease deed of the said property, which could not have passed any right, title or interest in favour of CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 101 of 103 :: 102 ::
the bank. A-3 Vinay Kumar and A-4 Raj Kumar Sharma even derived pecuniary benefit from the credit facilities granted to M/s POPL. In view of the same, the case law [as referred to in para - 19.2 (supra)] as relied upon by A-3 Vinay Kumar and A-4 Raj Kumar Sharma, is of no assistance to them. It is established that A-3 Vinay Kumar and A-4 Raj Kumar Sharma have not been implicated merely by extending the vicarious liability by virtue of the accused persons being directors of M/s POPL.
27.0 In view of the above findings, I hold:-
(i) all the accused persons guilty of offence punishable under Section 120B IPC read with Section 420, 471 read with Section 468 & 419 IPC and Sections 13(2) read with Section 13(1)(d) of PC Act;
(ii) A-1 J.B.S. Bedi guilty of offence punishable under Section 13(2) read with Section 13(1)(d) PC Act;
(iii) Further, A-2 P.V. Khullar, A-3 Vinay Kumar CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 102 of 103 :: 103 ::
and A-4 Raj Kumar Sharma guilty of substantive offences punishable under Section 420 IPC and under Section 471 read with Section 468 IPC.
The accused persons are convicted accordingly. Announced in the open Court on 30th August, 2014. (POONAM A. BAMBA) Special Judge (PC Act):
CBI-03 :PHC :New Delhi CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 103 of 103 :: 104 ::
IN THE COURT OF MS. POONAM A. BAMBA :
SPECIAL JUDGE (PC Act)-CBI(03):
PATIALA HOUSE COURT: NEW DELHI CC No. 05/13 Case ID No. 02403R001942012 RC No. SI8/2011/E0002/CBI/EOU-IV/ND U/s 120B r/w Sec. 420, 471 r/w Sec. 468, 419 of IPC & 13(2) r/w Sec. 13(1) (d) of P. C. Act, 1988 Central Bureau of Investigation Vs.
1. Jaswant Bir Singh Bedi S/o Late Sh. Bakshish Singh Bedi Assistant General Manager Punjab & Sind Bank New Delhi R/o: H. No. 102, Building No. 104, Silver Oak Apartments DLF, Phase-I, Gurgaon, Haryana.
2. Pramod Vijay Khullar S/o Late Sh. Krishan Kumar Khullar R/o H. No. A-22, Sector-51, Noida, UP
3. Vinay Kumar Dutt @ Vinay Kumar S/o Late Sh. Khema Nand R/o H. No. 25/21, IV Floor East Patel Nagar New Delhi - 110 008
4. Raj Kumar Sharma CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 104 of 103 :: 105 ::
S/o Sh. Nand Kishore Sharma R/o H. No. K-3/54A, DLF, Phase-II Gurgaon, Haryana.
Date of pronouncement of Judgment :30.08.2014 Date of Order on Sentence :06.09.2014 Appearance : Sh. S.C. Sharma, Ld. Sr. PP for CBI.
Sh. Rajan K. Chourasia, Advocate for convict J.B.S. Bedi. Sh. Vijay Aggarwal, Advocate for convict P.V. Khullar. Sh. Saraswat Mohapatra, Advocate for convicts Vinay Kumar Dutt @ Vinay Kumar and Raj Kumar Sharma.
ORDER ON SENTENCE :
1.0 The convicts no. 1 to 4 have been convicted for offences punishable under Section 120B IPC read with Section 420, 471 r/w Section 468 & 419 IPC and Sections 13(2) read with Section 13(1)(d) of PC Act; convict J.B.S. Bedi is also convicted for offence punishable under Section 13(2) read with Section 13(1)(d) PC Act; and convicts P.V. Khullar, Vinay Kumar and Raj Kumar Sharma are further convicted for substantive offences punishable under Section 420 IPC and under Section 471 read with Section 468 IPC. 2.0 I have heard learned Sr. PP Sh. S.C. Sharma as well as Sh. Rajan K. Chourasia, Advocate for convict J.B.S. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 105 of 103 :: 106 ::
Bedi, Sh. Vijay Aggarwal, Advocate for convict P.V. Khullar and Sh. Saraswata Mohapatra, Advocate for convicts Vinay Kumar Dutt @ Vinay Kumar and Raj Kumar Sharma on the point of sentence. I have also perused the record carefully. 3.0 It was submitted on behalf of convict J.B.S. Bedi that he is a retired man of about 68 years of age; his wife is a housewife and is about 62 years of age; he had two daughters; he lost one of his daughters eight years ago; his another daughter is married and is living with her in-laws;
thus, besides convict J.B.S. Bedi, there is no one else in the family to look after his wife; he is the only bread earner in the family.
3.1 It was further submitted that the convict is not keeping good health, as he has already undergone bye-pass surgery. Ld. counsel has placed on record copies of medical record, in support. Ld. counsel also referred to judgment of Hon'ble Supreme Court, dated 14.02.2014 in Crl. Appeal No. 404/2014, tilted as V.K. Verma Vs. CBI, to bring home the point that age and ill health of the convict needs to be kept in CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 106 of 103 :: 107 ::
mind while awarding sentence. The said position of law is unassailable and this court is mindful of the same. 3.2 It was also submitted that the convict J.B.S.Bedi had unblemished career and rose up to the rank of AGM;
convict has clear antecedents.
4.0 It was submitted on behalf of convict P.V. Khullar that he is 68 years of age. He has a wife and three children; his son, though of 30 years of age, is still unemployed; his wife is a house wife; one of his daughters is divorced and her re-marriage is now fixed for 30.11.2014; other daughter is married and settled in her own house. It was also submitted that he is the only bread earner of the family. Further, his aged mother is also dependent upon him. Even his mother-in-law is his responsibility; she is staying with them. Because, his wife is the only child of her parents; and his father-in-law has already expired. 4.1 It was also submitted that the convict has to make all the arrangements for the marriage of his daughter, CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 107 of 103 :: 108 ::
which is scheduled for 30.11.2014 and the marriage ceremonies are to start from 12.10.2014. Convict has filed copy of wedding card, in support.
4.2 It is also submitted that the convict is not keeping good health; he is suffering from high blood pressure and heart ailment. Copies of medical record are filed. 4.3 Ld. counsel also submitted that the convict deserves leniency as he is a highly respectable member of society and has clean antecedents.
4.4 While praying for leniency on the above grounds, learned counsel placed reliance upon judgments titled as Dilbag Singh Vs. State of Punjab (1979) 2 SCC 103, Slok Kumar & Ors. Vs. The State 2009 (1) JCC 27, State Vs. Kaptan Singh 2008 (1) JCC 397, Brahm Singh Vs. The State 2010 (1) JCC 17 and Bharwada Bhoginbhai Hirjibhai Vs. State of Gujarat 1983 Crl. L.J. 1096, in support.
5.0 It may also be mentioned here that on behalf of convicts J.B.S.Bedi and P.V. Khullar, it was also argued that the CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 108 of 103 :: 109 ::
matter pertains to the year 1995; the convicts have been convicted after almost 20 years. It was further submitted on behalf of convict J.B.S.Bedi that he was arraigned as accused 8 years after his retirement from service; he retired in the year 2006. Such a long delay has caused them immense mental agony and trauma; and therefore, they deserve leniency. Ld. counsel for convict P.V. Khullar further submitted that this court needs to consider the conduct of the convicts during the intervening period, i.e., from 1995 till date; the convict took steps for restructuring of loan and even paid the settled amount under one time settlement; he regularly attended all the court hearings. In support of this argument, reliance was placed upon the judgement - Brahm Singh Vs. The State 2010 (1) JCC 17.
5.1 Let me mention here that the fraud played upon the bank was revealed only in the year 2009, during the pendency of bank's case for recovery before Debt Recovery Tribunal; thereafter, the complaint was filed with CBI and the present case was registered on 25.02.2011. Charge-sheet in CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 109 of 103 :: 110 ::
the case was filed on 02.04.2012; the charge against the convicts was framed on 26.07.2013 and was amended on 23.09.2013. The trial has, thus, completed within one year of framing/ amending of charge. Thus, the convicts' plea of facing the ordeal for 20 years lacks merit.
6.0 It was submitted on behalf of convicts Vinay Kumar and Raj Kumar Sharma that they are 61 years and 58 years of age, respectively. Convict Vinay Kumar has two unmarried children and his wife is a housewife. He is the only bread earner in the family. There is no one in the family to look after his wife and children, as his parents died long back. 6.1 On behalf of convict Raj Kumar Sharma, it was further submitted that he has three children. His eldest daughter is studying in first year of college and his other two children (one son and one daughter) are studying in Class - 10th and 7th. It was further submitted that his wife is a housewife, who is not keeping good health and needs to be looked after. There is no-one in the family to look after her and children.
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6.2 During the course of arguments, learned counsel placed reliance upon judgment titled State of Madhya Pradesh Vs. Babulal & Ors. (2013) 12 SCC 308, while seeking leniency.
7.0 On the other hand, it was submitted by learned Sr. PP that the convicts 2 to 4 in conspiracy/ connivance with public servant/ convict J.B.S. Bedi, fraudulently obtained from bank, credit facilities to the tune of Rs.175 lacs on the basis of forged perpetual lease-deed, thus, cheating the bank of the huge amount; the convicts enjoyed the benefit of the public funds for almost 20 years.
7.1 Ld. Sr. PP further submitted that so far as payment under one time settlement is concerned, same made after filing of recovery suit, is hardly of any significance; otherwise also, bank had no option but to accept whatever was being paid.
7.2 Ld. Sr. PP also submitted that convict J.B.S. Bedi CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 111 of 103 :: 112 ::
was a high ranking officer of the bank of the AGM level and great responsibility was entrusted to him by the bank. But, he abused his office by conniving with the co-convicts and benefited them by sanctioning credit facilities of huge amount. With respect to convict P.V. Khullar, Ld. Sr.PP submitted that convict's wife, Smt. Madhu Khullar is not a house-wife; she had been a director of M/s POPL and even stood guarantor for M/s POPL as well as M/s Morgan Tectronics. Further, as per his own admission, the son of the convict is an MBA and is of 30 years of age; it is difficult to believe that he is not gainfully employed. It was also pleaded that so far as the marriage of convict's daughter is concerned, the convict can very well seek parole. 7.3 With respect to convicts Vinay Kumar Dutt @ Vinay Kumar and Raj Kumar Sharma, Ld. Sr. PP submitted that they also deserve no leniency, as they were hand in glove in facilitating and executing the design of convict P.V. Khullar, by offering bogus property documents.
7.4 It was also submitted by Ld. Sr.PP that in view of CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 112 of 103 :: 113 ::
the seriousness of the offence, the convicts do not deserve any leniency. Rather, maximum prescribed punishment should be awarded to them, so as to send a strong message in the society that such conduct can not be tolerated.
8.0 I have given my thoughtful consideration to the submissions made by both the sides. It may be mentioned at the outset that the economic offences constitute a class apart and involve progressing at the expense of public money by the persons belonging to respectable section of the society. 8.1 In Prem Kumar Parmar Vs. State (CBI) 1989 RLR 131, the Hon'ble Court noted that these offences are worse than murders. In R. Venkatakrishnan Vs. Central Bureau of Investigation, AIR 2010 SC 1812, the Hon'ble Supreme Court observed in para 186, (though in a slightly different context) as under:-
"186. We must also make reference to the following observations of the Supreme Court in Ram Narayan Popli (AIR 2003 SC 2748: 2003 AIR SCW 3119) (supra) which was a case arising from the connected securities market scam, to bring home the point as to the impact of CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 113 of 103 :: 114 ::
the transactions:
100. The offence in these cases were not of the conventional or traditional type. The ultimate objective was to use public money in a carefully planned manner for personal use with no right to do it.
101. Funds of the public bodies were utilized as if they were private funds. There was no legitimacy in the transactions. ...Their acts had serious repercussions on the economic system of the country, and the magnitude of financial impact involved in the present appeal is only tip of the iceberg....
102. the cause of the community deserves better treatment at the hands of the Court in the discharge of its judicial functions. The Community or the State is not persona non grata whose cause may be treated with disdain. The entire community is aggrieved if economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 114 of 103 :: 115 ::
profit regardless of the
consequence to the community."
8.2 Similar views were expressed by the Hon'ble
Supreme Court in Gujarat Vs. Mohanlal Jitamalji Porwal and Anr. AIR 1987 SC 1321.
8.3 Reference here may also be made to Hon'ble Delhi High Court's recent judgment in Mukesh Jain Vs. CBI, 2010 AD (Delhi) 443. In the said case, the accused were charged with defrauding Punjab National Bank to the extent of Rs. 1,46,71,000/- and an attempt to further defraud the bank of Rs. 2,72,38,000/-, was made by using forged cheques. In those facts, the Hon'ble Court while rejecting the bail application of the accused noted in para-9 as under:-
"9. ....The economic offences having deep rooted conspiracies and involving huge loss of public funds whether of nationalized banks or of the State and its instrumentalities need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of our country. Therefore, the persons involved in such offences ...do not deserve any indulgence and any CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 115 of 103 :: 116 ::
sympathy to them would not only be entirely misplaced but also against the larger interest of the society... If a person knows that even after misappropriating huge public funds, he can come out on bail after spending a few months in jail and thereafter ... that would only encourage many others to commit similar crimes ... A strong message therefore, needs to be sent to these white collared criminals and those who are waiting in the wings, that in the long run, it does not pay to be on the wrong side of the law".
8.4 From the above, it is evident that the Hon'ble Supreme Court/ High Court, has distinguished economic offences from other offences like murder etc. Hon'ble Courts have observed that white collar criminals do not deserve any indulgence of the court.
8.5 Let me now refer to the case law relied upon by the Ld. counsel for the convict P. V. Khullar. In Dilbagh Singh's case (supra), the Hon'ble Supreme Court held that during sentencing, family background and history, past, social behaviour and present situation of the offender must be considered. In Slok Kumar's case (supra), the Hon'ble Delhi CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 116 of 103 :: 117 ::
High Court observed that sentencing is a sensitive exercise of discretion and not a routine or mechanical prescription acting on hunch; the social background and personal factors of the crime doer are very relevant. In Kaptan Singh's case (supra), the Hon'ble High Court after referring to various cases noted three attributes of sentence. The court noted that the first facet is that the accused must realise that he has committed the act which is not only harmful to the society of which he forms an integral part but, is also harmful to his own future, both as an individual and as a member of the society. The second facet highlights the punitive deterrent aspect of sentence. The third facet highlights the reformatory aspect of a sentence. Ld. counsel argued that this court has to balance various interests, that is, of the society, deterrence to the convict and also the reformatory aspect. Reference was also made to Bharwada Bhoginbhai Hirjibhai's case (supra) by convict P.V. Khullar to buttress his plea for minimum punishment, as otherwise, the prospects of his daughter's marriage would be jeopardized.
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8.5.1 Ld. counsel for convict J.B.S.Bedi referred to Rajeev Kumar Goyal's case (supra), in support of his argument that minimum punishment be awarded to the convict, pleading that in that case the Hon'ble High Court had reduced the sentence on similar charges, to 18 months. 8.5.2 On behalf of convicts Vinay Kumar and Raj Kumar Sharma, reference was made to Babu Lal's case (supra), in support of the argument that this court should keep in mind the social interest and consciousness of the society for award of appropriate sentence. He also argued that criminal history of the accused is very relevant for determining the quantum of sentence. The convicts are respectable businessmen and do not have any prior criminal history. 9.0 Let me mention here that convict P.V. Khullar was the mastermind of entire conspiracy, which was executed with the help of convicts J.B.S. Bedi, Vinay Kumar and Raj Kumar Sharma. Convict J.B.S. Bedi transgressed his powers and sanctioned credit facilities to the tune of Rs.175 lacs, in utter abuse/ misuse of his powers, causing loss to the bank.
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Convicts benefited at the cost of public money; convict P.V. Khullar derived maximum benefit out of the cheated amount.
9.1 I am mindful of the guidelines laid down by the Hon'ble Supreme Court and High Courts, as laid down in cases relied upon by the convicts. Taking into account the facts & circumstances of this case in entirety and keeping in mind the above guidelines, considering the aggravating as well as mitigating factors, viz., social background of the convicts, their clean antecedents, their roots in society, their family responsibilities and age of the convicts; and also the health condition of convicts J.B.S. Bedi and P.V. Khullar, I am of the considered opinion that the following punishment shall meet the ends of justice.
9.2 I hereby sentence as under :
(1) Convict J.B.S. Bedi :
(i) he shall undergo rigorous imprisonment for a
period of 03 years u/Sec. 120B IPC read with Section 420, 471 read with Section 468 & 419 IPC and Sections 13 (2) read with Section 13 (1) (d) of PC Act. He shall pay a fine of Rs. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 119 of 103 :: 120 ::
25,000/- (Rs. Twenty Five Thousand only); and in default, to further undergo SI for a period of 03 months.
(ii) he shall undergo rigorous imprisonment for a period of 03 years u/Sec. 13 (2) read with Section 13 (1) (d) of PC Act. He shall pay a fine of Rs.25,000/- (Rs. Twenty Five Thousand only); and in default, to further undergo SI for a period of 03 months.
(2) Convict P.V. Khullar :
(i) he shall undergo rigorous imprisonment for a period of 04 years u/Sec. 120B IPC read with Section 420, 471 read with Section 468 & 419 IPC and Sections 13 (2) read with Section 13 (1) (d) of PC Act. He shall pay a fine of Rs.
50,000/- (Rs. Fifty Thousand only); and in default, to further undergo SI for a period of 03 months.
(ii) he shall undergo rigorous imprisonment for a period of 04 years u/Sec. 420 IPC . He shall pay a fine of Rs. 50,000/- (Rs. Fifty Thousand only); and in default, to further undergo SI for a period of 03 months. CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 120 of 103 :: 121 ::
(iii) he shall undergo rigorous imprisonment for a period of 04 years u/Sec. 471 read with Section 468 IPC. He shall pay a fine of Rs.50,000/- (Rs. Fifty Thousand only);
and in default, to further undergo SI for a period of 03 months.
(3) Convict Vinay Kumar Dutt @ Vinay Kumar :
(i) he shall undergo rigorous imprisonment for a period of 02 years u/Sec. 120B IPC read with Section 420, 471 read with Section 468 & 419 IPC and Sections 13 (2) read with Section 13 (1) (d) of PC Act. He shall pay a fine of Rs.
10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 months.
(ii) he shall undergo rigorous imprisonment for a period of 02 years u/Sec. 420 IPC. He shall pay a fine of Rs. 10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 months.
(iii) he shall undergo rigorous imprisonment for a period of 02 years u/Sec.471 read with Section 468 IPC. He CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 121 of 103 :: 122 ::
shall pay a fine of Rs.10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 months.
(4) Convict Raj Kumar Sharma :
(i) he shall undergo rigorous imprisonment for a
period of 02 years u/Sec. 120B IPC read with Section 420, 471 read with Section 468 & 419 IPC and Sections 13 (2) read with Section 13 (1) (d) of PC Act. He shall pay a fine of Rs.
10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 months.
(ii) he shall undergo rigorous imprisonment for a period of 02 years u/Sec. 420 IPC. He shall pay a fine of Rs. 10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 months.
(iii) he shall undergo rigorous imprisonment for a period of 02 years u/Sec.471 read with Section 468 IPC. He shall pay a fine of Rs.10,000/- (Rs. Ten Thousand only); and in default, to further undergo SI for a period of 03 CC No. 05/13: RC No. SI8/2011/E0002/CBI/EOU-IV/ND CBI Vs. Jaswant Bir Singh Bedi & Ors. Page No. 122 of 103 :: 123 ::
months.
The above sentences shall run concurrently. Benefit of Section 428 Cr.PC be given to the convicts. 10.0 Copy of the judgment dated 30.08.2014 as well as order on sentence passed today be supplied to the convicts free of cost.
File be consigned to Record Room.
Announced in the open Court on this 6th September 2014. (POONAM A. BAMBA) Special Judge (PC Act):
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