Delhi District Court
Cb I vs . 1 O P Bhatia S/O Sh. Chunni Lal Bhatia on 30 October, 2009
1
IN THE COURT OF V .K .MAHESHWARI
SPECIAL JUDGE: (P C Act)-03 CBI DELHI
Corruption Case No.120/93
CB I Vs. 1 O P Bhatia s/o Sh. Chunni Lal Bhatia
r/o 250-A, Pocket-I, Mayur Vihar-I, Delhi
2 O P Kedia s/o Late Sh. Madan Lal Kedia,
r/o M-50, Saket, New Delhi.
Date of Institution 10.8.1993
R.C No. 2(S)/92/CBI/SCB/N.D
Under Section U/s 120 B r/w 477A IPC and Sec.13
( 2) r/w 13 (i) ( d) of P C Act, of
1988.
Arguments concluded 13.10.2009
on
Date of order 30.10.2009
JUDGMENT:
FACTS OF THE CASE .
1 Briefly the facts of this case according to prosecution are that accused O P Bhatia at the relevant time was Manager of Scale-II posted at New Bank of India, East of Kailash, New Delhi. Branch Manager, Scale -II as per rules has discretionary powers to sanction an advance against security of LIC Policy to the 1/44 2 extent of Rs.50,000/- to a single party However, the said discretionary powers of accused O P Bhatia had been withdrawn vide Head Office Circular No. LD/116/89 dated 27.11.89 and the letter of Assistant General manager, Regional Office, Delhi is No. ROD/I/2441 dated 1.12.09. So all the discretionary powers of accused O P Bhatia for sanction of fresh credit facility except in respect of 5 exempted categories had been withdrawn and advances against LIC policies was not in the exempted categories.
2 Accused O P Bhatia entered in a criminal conspiracy with accused O P Kedia with the object to defraud the bank and advanced him a sum of Rs.1 lakh without obtaining collateral securities. In furtherance of conspiracy, accused O P Bhatia abused his official position and sanctioned and disbursed the advance of Rs.1 lakh to accused O P Kedia without obtaining any collateral security and that too despite of fact that his discretionary powers for sanctioning said advance had been withdrawn. In furtherance of conspiracy, while advancing and disbursing aforesaid loan to accused O P Kedia, accused O P Bhatia made false entries in the ledger sheet pertaining to the aforesaid term loan given to accused O P Kedia and made entry in column of security to suggest that advance was given against Indira Vikas Patra and subsequently he altered that entry by an overwriting and cutting Indra Vikas Patra and converting into LIC Policies. However, accused O P Kedia had not submitted any LIC Policy as collateral security. Aforesaid loan was disbursed without any loan application from accused O P Kedia and even the loan documents taken in the case were not complete.
2/44 3Only Form L-57 and L-36, L-13 and L-36A were on record. Accused O P Bhatia had written on the back of Form L-36 and L- 36A details of LIP recorded in LIP register and he had also written a false note on the file cover of loan file that "policies handed over to the borrower for assignment from LIC" Form L-13 which is office copy of alleged notice to LIC of India from New Bank of India signed by O P Bhatia for registration of assignment in favour of bank, by LIC of India does not contain the details of the policies to be assigned and its address to Unit No.110. Whereas as per investigation, there is no unit No.110 of LIC in Delhi, when the inquiry was made from LIC Unit No.11-D it was revealed that no LIC policies were received in the said unit for registration of assignment in favour of New Bank of India.
CHARGE 3 Copies as required U/S 207 Cr P C supplied to accused. My Ld. Predecessor after hearing both the parties vide his order dt. 11.8.99 had framed a charge against the accused for the offences punishable U/s120 B IPC r/w Sections 477 A IPC & Sec. 13( 2) r/w 13 (1) ( d) of P C Act, of 1988 & substantive offence against accused O P Bhatia U/s 477 A IPC and Sec. 13( 2) r/w 13 (1) ( d) of P C Act, of 1988. Both the accused pleaded not guilty to the charge and claimed trial. Hence, this trial.
PROSECUTION EVIDENCE.
3/44 44 Prosecution, in order to prove its case, has produced following witnesses:
PW1 Smt. Rama Madan has stated that in April, May,90 she was posted as clerk with New Bank of India, East of Kailash Branch, New Delhi where O.P.Bhatia was Branch Manager. She was assigned the duty in the loan sanction of the branch and her duty was to fill the relevant documents such as loan forms etc. and to make the posting of the loans in the ledger. On seeing loan file Ex.PW1/A she has stated that a loan of Rs.1 lakh was sanctioned by Sh. O.P. Bhatia in favour of Sh. O.P. Kedia but none of the vouchers in the file are in her hand writing. The vouchers Ex.PW1/B and Ex.PW1/C in the loan file Ex.PW1/A are filled in the hand writing of O.P. Bhatia, similarly carbon copies of the letter Ex.PW1/D and Ex.PW-1/E contain impression of the handwriting O.P. Bhatia, form I/F is filled in the handwriting of O.P. Bhatia and encircled endorsement A on the said form is also in the handwriting of O.P. Bhatia. Endorsement B on the cover file Ex.PW1/A is also in the handwriting of O.P. Bhatia. The encircled writing A.B. C on the ledger sheet ExPW1/G are in the handwriting of O.P. Bhatia.
5 PW2 Sh. Gurbax Singh has stated that during Apri-90 he was working as head cashier in New Bank of India, East of Kailash Branch, New Delhi where O.P. Bhatia was the manager. Vouchers, Ex.pw1/B and 1/C in the loan file Ex.PW-1/1 of O. P. 4/44 5 Kedia are in the handwriting of O.P. Bhatia. Encircled writing and signatures at point B on the file cover of Loan file is in the handwriting of O.P. Bhatia, Loan application form Ex.PW-1/F encircled portion 'A' is in the handwriting of O.P. Bhatia Ex.PW- 1/D & E, PW-1/E are in the handwriting of O.P. Bhatia.
6 PW3 Sh. K K Uppal has stated that during July, 1987 till January 1991 he was posted as an accountant in New Bank of India, East of Kailash Branch, New Delhi, carbon copies of the letters addressed to LIC unit No.110 New Delhi Ex.PW1/D and 1/E are in the handwriting of O.P. Bhatia encircled portion A to C on the ledger sheet Ex. PW 1/G is in the hand writing of O.P. Bhatia.
7 PW4 Sh. Haridas has stated that from the year 1984 to 1990 he was posted as a clerk in New Bank of India, East of Kailash Branch, New Delhi. He has corroborated the statement of other witnesses that encircled endorsement B on the file cover Ex.PW 1/A the vouchers Ex.PW1/B and Ex.PW1/C are the carbon copies of the letters Ex.PW1/D and EX.PW1/E. are in the handwriting of Sh. O.P. Bhatia.
8 PW-5 Shri V. P. Gupta has stated that procedure for sanctioning loan against the security of LIC Policy is that party has to submit loan application alongwith the financial papers mentioning the purpose for which the loan to be raised, in case of LIC, party also has to submit LIC policies and their values, premium receipts, purpose is to be entered in loan proposal, 5/44 6 department has to process the same, credit investigation is to be made in respect of financial asset and purpose of loan, if found viable branch manager can sanction the loan subject to his distinguish power. In case of LIC policies, bonds are to be sent to insurance company for assignment in bank's favour, after receiving the assignment, documentation is to be got done from the customer and thereafter the loan can be released. On seeing the loan file of O P Kedia, he has stated that loan application is not in the file; financial papers are not in the file, processing note is not in the file; credit investigation report is not in the file; LIC policy is not in the file; the latest premium receipt is not in the file; assignment of LIC is not in the file; file is incomplete. He has also identified writing and signature of O.P. Bhatia on the documents in loan file Ex.PW- 1/A, after going through the loan file he has stated that it is incomplete and loan was sanctioned in an irregular manner. He has also identified signatures of O.P. Bhatia on loan documents in file Ex.PW-1/A i.e. Ex.PW 2/A Ex.PW1/B, Ex.PW-1/C, EX.PW-1/D and Ex.PW1/E. 9 PW-6 SHRI R. Mahadevan has stated that he was working as Manager Vigilance New Bank of India, East of Kailash Branch, New Delhi. He had conducted surprise check in New Bank of India, East of Kailash Branch, New Delhi in August, 1990, O.P. Bhatia was the manager at that time. This loan was sanctioned against the pledge of LIC policies that the details of same were not mentioned in the LIC policy register even the LIC policy register was not maintained. LIC policies were not available in the loan file.
6/44 7Nine LIC policies were taken as security but there is no mention of LIC policy numbers. Policies were not on record. A loan of Rs.1 lakh was sanctioned when discretionary powers of the manager were only upto 50,000/-. Loan amount was paid in cash. Loan was sanctioned after suspension of his loaning powers. LIC Policies reported to have been pledged with bank were not got registered and assigned with LIC.
10 PW-7 Sh. O. P. Chopra was working as assistant General Manager regional office New Bank of India, East of Kailash Branch, New Delhi. He has stated the procedure for sanctioning loan against the security of LIC policies. On seeking file Ex.PW1/A he hasstated that it was an incomplete file in which there is no LIC policy, which is main security. O. P. Bhatia had no power to sanction any loan because he had suspended the discretionary powers of the O. P. Bhatia. He had told O. P. Bhatia on telephone as well as by personally calling him about the said fact. He has identified signatures of O.P. Bhatia on the vouchers Ex.PW- 1/B, 1/C and the letter Ex.PW-1/F. Restriction was also placed by Head office against the sanctioning of any advance against LIC policy as per circular Ex.PW13/A. 11 PW-8 SHRI A. K. Singhal has stated that during the period 87-91 he was posted as Assistant in New Bank of India, East of Kailash Branch, New Delhi, where O. P. Bhatia was working as manager of the said branch, accused had handed over the key and the documents to him on 11--05-90 and the same were handed over 7/44 8 to A. K. Jain when he had taken over as manager on 23-05-90.
12 PW9 Shri Ashok Oberoi has stated that during the April-May, 1990 he was posted in Loan department as cashier cum clerk New Bank of India, East of Kailash Branch, New Delhi, his duty was to fill up loan documents. He has stated that when a party approaches for loan on the basis of LIC policies, same were to be submitted in the branch, the branch had to send same to the LIC for assignment. He has identified handwriting of O.P. Bhatia. and signatures of O.P. Bhatia on the documents Ex.1/B 1/C 1/D/ 1/E and Ex.PW1/F in file Ex.PW1/A. On seeking Ex.PW1/F he has stated that document mentions "9 policies of Unit No.110". Ex.PW1/E notice for assignment of LIC in favour of bank is signed by O.P. Bhatia.
13 PW 10 Sh. O N Tuli has stated that he had taken the charge of New Bank of India, East of Kailash Branch, New Delhi w.e.f. 25-5-92. He has stated the procedure for sanction of loan against LIC Policy. He has stated that term loan is repayable by installments whereas cash credit is a continuing facility. On seeing the loan file he has stated that loan application was not obtained; loan was sanctioned against the security of Pledge of LIC policies but the details of the same were not mentioned in the LIC register even the LIC registered was not maintained. LIC policies were not available in the loan file, last premium receipts were not available in the loan file.
8/44 914 PW-11 Shri A. K. Jain has stated that he was working as manager New Bank of India East of Kailash, New Delhi. He had taken over the charge from Ashok Singhal. He has stated the procedure for the sanction of loan against the security of LIC policies. He has stated that manager Scale-II could advance loan upto Rs.50,000/- only and that too subject to restrictions by way various circulars of Head Office. He has identified the signatures of O.P.Bhatia on the payment vouchers Ex.PW1/B and 1/C. There was no LIC policy in the loan file of O.P. Kedia.
15 PW-12 Shri R. K. Batra has stated that he was posted as branch manager Unit No.114 LIC. In case of loan against the security of LIC Policies borrower has to deliver the original policy bonds to the bank; the borrower has to execute absolute assignments in favour of the bank; bank has to serve a notice of assignment on LIC; bank has to send policies to LIC for assignments; after assignments LIC had to return the policies to bank; the same remain in the bank till the liquidation of loan. Assignor /policyholder has to give policy number on the notice. Without correct policy no. assignment could not be registered. Assignment could not be registered on the basis of Ex.PW-1/D and Ex.PW 1/E because no policy number is mentioned on the assignment letter or forwarding letter.
16 PW-13 Shri Ajay Malhotra, manager Punjab National Bank has stated that he had brought the circular register of New Bank of India East of Kailash, New Delhi. in which all the circulars 9/44 10 issued by the bank during the year are maintained in a bound form, after seeing original circular dated 27-11-89, the copy of the circular was exhibited as Ex.PW13/A. 17 PW14Shri Rajesh Kumar Khanna has stated that he remain posted as branch manager unit 11D LIC. On seeing Ex.PW1/D and 1/E he has stated that no assignment could be done on the basis of these notices because they do not bear policy no. and the surrender value. On seeing assignment register of the branch 11- D he has stated that no assignment could be entered in this register on the basis of Ex.PW-1/D and Ex.PW-1/E. He has stated that every notice for assignment should enclose original policy. Policy could not be assigned even if original policy is received unless the notice is complete.
18 PW-15 Shri A. S. Chhabra has stated that in July, 1992 he was posted as Jr. Manager-I, New Bank of India, East of Kailash, New Delhi he had prepared the balances as per ledger sheet.
19 PW-16 Shri Hari Krishan Jhand has proved the specimen writings of the accused taken in his presence.
20 PW-17 Shri R. P. Dangwal has stated that in the month April 90, he was posted as Accountant in New Bank of India, East of Kailash, New Delhi where O.P. Bhatia was the manager. He was working in the loan section. He used to process loan applications and take follow up action. He has explained the procedure adopted 10/44 11 for the sanction of loan against the security of LIC Policies. He has identified the handwriting and signatures of O.P. Bhatia on Ex.PW- 1/A encircled B on Ex.PW1/B, Ex.PW1/C, EX.PW1/E and Ex.PW- 1/F Sh. O. P. Bhatia has mentioned on the Back of Ex.PW1/F that details of LIP is recorded in LIP register and Ex.PW 2/A contains that policies handed over to the borrower for assignment from LIC.
21 Examination in chief of PW-18 Shri R. K. Jain has been recorded but his cross-examination could not be conducted as he died.
22 PW-19 Shri Satyabir Singh has stated that investigation of this case was transferred to him. He had recorded the statement of witnesses collected the documents and filed charge-sheet.
DEFENCE OF ACCUSED U/S 313 CR P C 23 Statement of accused were recorded U/s 313 Cr. PC, wherein accused O P Bhatia has admitted that at the relevant time he was posted as Manager Scale II, in New Bank of India, East of Kailash branch. He had sanctioned the loan in dispute according to rules and as per guidelines of RBI after completing all the necessary formalities. He has denied all other allegations made against him and the evidence produced by prosecution against him. He has stated that he is innocent and has been falsely implicated in this case.
24 Accused O P Kedia has stated that he had taken a loan 11/44 12 of Rs. one lakh which was sanctioned by O P Bhatia, the then Manager, NBI, East of Kailash Branch on 6.4.90. Amount was also received by him after executing all the necessary documents and fulfilling the requirements thereto. He has stated that he has paid the whole loan amount totaling Rs.2,03,000/- with penal interest. Bank has already issued No Dues Certificate to him after settling the matter. He has denied all other allegations made against him and the evidence produced by prosecution against him. He has stated that he is innocent and has been falsely implicated in this case.
DEFENCE EVIDENCE .
25 In their defence accused have examined five witnesses.
DW1 Naresh Batra has proved the register Ex DW1/1. DW2 Sh. Devender Chaudhary has proved the ledger Ex DW2/A, and policy No. 23426419 which commenced on 16.2.1969 and matured on February, 1994, Ex DW2B. Dw3 Sh. Dharampal, DW4 B S Kataria, and DW5 P K Sinha have deposed that the summoned record is not traceable despite of their best efforts to trace out the same.
ARGUMENT OF LD S P P 26 It is argued by Ld. SPP that Sh. O. P. Bhatia on 06-04- 90 while working as manger New Bank of India, East of Kailash Branch, New Delhi being a public servant entered in a criminal conspiracy with co-accused O.P. Kedia, abused his official position and by corrupt and illegal means sanctioned and disbursed a loan of 12/44 13 Rs.1 lakh against the non-existing securities i.e. LIC policies without obtaining the said policies and placing the same on record and also by making false entries in the records. Loan was advanced suggesting that it was against IVP these entries were later on converted to LIP by deleting the words IVP and putting the word LIP.
27 Ld. SPP argued that O.P. Bhatia was scale-II manager, his discretionary powers for sanction of loan during April-May, 1990 were only upto 50,000. He had no power to sanction any loan on that day in view of Head Office circular dated 27-11-89 and regional office circular dated 01-12-89.
28 It is argued that for sanctioning of loan against the security of LIC Policy, the borrower has to make an absolute assignment in favour of the bank; surrender policy bond alongwith last premium paid receipt and give notice to LIC u/s 38 of Insurance Act, 1938. Bank has to send the notice and policy bond to LIC for registration of assignment in favour of the bank. LIC after registration has to return the policy bond to the bank and only then the loan can be sanctioned and disbursed. In case of default bank can encash the policy. Policy bond can be returned and reassigned after the liquidation of loan and not before that. Unique policies numbers are to be mentioned on the notice under section 38 of Insurance Act as well as on the forwarding letter.
29 It is argued that on 06-04-90 Sh. O. P. Bhatia had no power to sanction any loans because all his powers with regard to 13/44 14 sanction of loan were suspended as per the evidence of Sh. O. P. Chopra and circular issued by GM New Bank of India, East of Kailash, New Delhi and also by AGM, New Bank of India, New Delhi. Scale-II officer Mr. Bhatia could sanction loan only to the extent 50,000 and not more than that. Sh. Bhatia has taken the plea that circular of suspension of power was not received by him , therefore he could sanction the loan beyond fifty thousand statement of which was to be sent to the head office. However, he has not produced any evidence in this respect nor any question put to any of the prosecution witnesses. As far as the giving of LIC Policy as security is concerned defence is also false because nine policies were neither taken on record nor got absolutely assigned in favour of the bank nor the assignment was registered rather a false record was created showing to have sent the notice to LIC Unit No.11D when said unit never received the notice.
30 It is argued that according to procedure, policy holder has to make absolute assignment in favour of the bank, send a notice u/s 38 of Insurance Act, 1938 to LIC, get the assignment registered and only then loan could be sanctioned. LIC unit no.11D did not receive at all any policy for registration of assignment in favour of the bank. The register maintained by the said branch do not contain any entry of assignment and without entry, assignment could not be registered. It proves the conspiracy of creating false record in the bank by A1 in connivance/conspiracy with A-2. Carbon copy of notice signed by A2 as well as forwarding letter on the bank's letter head are in the handwriting of accused and the forwarding letter is 14/44 15 signed by A-1.
31 It is argued that plea of the accused that policies were there, is an afterthought defence. A-1 and A-2 have also taken contradictory pleas. A-2 is showing three policies in his name, is an afterthought and false plea because the said policies are not of unit No.11D but of Rajpura Unit and the policies have been matured and paid before the liquidation of loan, which is not permissible. The policies can be returned only after re-assignment and after liquidation of loan. It is argued that accused may be convicted.
ARGUMENTS OF A-1 32 It is argued on behalf of A-1 that initially RC 40 (A)/90 dated 06.09.2009 was registered by ACB/CBI, Delhi on source information. During investigation of that case, accused O P Bhatia was granted anticipatory bail by the Court even though that order was served upon CBI but accused O P Bhatia was deliberately arrested by Inspector R S Jaggi on 25.9.90. Accused was malafidely arrested just to harass and humiliate. He was bailed out on 1.10.90. Thereafter, the case was transferred to SCB, Delhi which registered a fresh case vide RC 2(S)/92. Registration of fresh RC was illegal and arbitrary. During the investigation of RC 40 (A)/DLI, some documents were collected by IO but all those documents were not subsequently handed over to the IO of RC 2 (S)/92-SCB. Various documents including Document Index Register containing complete details of various LIC policies and 15/44 16 connected documents, which were in favour of accused were deliberately concealed. Document Index Register has been deliberately concealed by the prosecution because it was an important defence document. No LIP register has been produced by the CBI during the trial. Hon'ble Supreme Court in S. D.Koli Vs. State of Maharashtra 2009 I AD (SC) 160 has held that prosecution cannot suppress any vital document from the court only because it would support the case of accused.
33 It is argued that O P Bhatia on 11.5.90 was asked to hand over the charge of the branch to next Senior Officer available vide letter No. AOO:PERS: 512. Accordingly, he had handed over the keys of his almirahas to Sh. A K Singhal. No handing over/taking over memo of the files was made at that time.
34 It is argued that PW12 Sh. A K Jain has deposed in his cross examination that all loan documents, including the file of case in hand, were handed over to him by Sh. A K Singhal, which shows that after the departure of accused O P Bhatia his almirahas were opened and various files were taken out but O P Bhatia was not called in the branch to witness the same or for preparation of list relating to such files. It was a deliberate and calculated move on the part of bank management to falsely implicate Accused O P Bhatia in this case, who was the then Vice President of Officers Union of Bank.
35 It is argued that PW 6 R P Dangwal in C C No.120/93 16/44 17 has deposed that when accused O P Bhatia was in custody of CBI, a bundle of files was recovered in the branch which shows that large number of files were available in the branch even after relieving of O P Bhatia.
36 It is argued that all the details relating to LIC policies pledged by the borrowers in various cases alongwith the connected papers were available in the document Index Register and LIC Register etc. in the branch but the same were deliberately withheld by the prosecution.
37 It is argued that loan against LIC polices was considered as secured advance. In all such loans necessary applications were obtained from the borrowers. Notices for assignment etc. were also signed by the borrowers. Such loan could be paid in cash. In this case Borrower has admitted the receipt of loan by him.
38 It is argued that though the prosecution has alleged that Circular No. LD/Cr. No. 116/89 dt. 27.11.89 was issued by Sh. A R Sethi, G M putting restriction on the credit facility to be sanctioned by all functionaries of the bank was general circular addressed to all the branches. Its receipt in the East of Kailash Branch or by accused O P Bhatia has not been proved by the prosecution, hence the same cannot be read against accused O P Bhatia 39 It is argued that Sh. O P Chopra, the then AGM has 17/44 18 stated about the letter dt. 1.12.89 issued by him regarding withdrawal of discretionary power of Branch Manager, O P Bhatia. According to him, he had personally and telephonically advised/informed accused O P Bhatia not to sanction any loan but he had not stated about his personally advising O P Bhatia in his statement recorded U/s 161 Cr PC. Dispatch of this letter has not been proved by the prosecution. Its receipt by accused O P Bhatia has also not been proved. Oral statement about telephonically advising/personally informing accused is a feeble evidence to be acted upon by the court, particularly when loan in question was sanctioned much after the issuing of purported letter. As per procedure fortnight statements were sent by the branch to the Regional Office. Internal/external/statutory Auditors have periodically have inspected the branch and were in knowledge of sanction of loan in question by the accused. No lapse on the part of accused was pointed out by those inspecting officers.
40 According to prevalent procedure Bank Manager could have exceeded his powers but in all such cases the same was to be reflected in the statements sent to Senior Officers. It was accordingly done in this case also by accused O P Bhatia. Branch Manager, as an officer of the bank, can fill up the forms and even authenticate the cuttings. Conversion of IVP to LIP was duly authenticated by accused on ledger sheet in some cases. No adverse inference can be drawn against accused as he had authenticated the same. PW O P Chopra has stated that security in respect of any loan can be changed by the sanctioning authority or by the competent 18/44 19 authority. Thus, accused could change the security if it was felt proper by him. Had there been no LIC policy and accused wanted to sanction the loan to the borrowers he could very well done so by sanctioning personal loans to them which did not require pledging of security. Many PWs have stated that loan were sanctioned by accused in an irregular manner. The alleged irregularities are curable, the Branch Manager could be proceeded departmentally for such lapses. Such irregularities cannot be termed as illegal, therefore, no criminal offence can be attributed to accused.
41 It is argued that PW R K Batra of LIC has stated in his cross examination that assignment has to be executed by the person who takes the loan. The papers of assignment, policy bonds etc. were to be sent to LIC either by the assignor or by the assignee, therefore, the action of accused in giving the LIC polices and connected papers to the borrowers for assignment of policies was bonafide. In this case borrower has repaid the entire amount alongwith interest. Bank has not suffered any financial loss. It was only a civil/ commercial transaction. No criminal case made out against accused.
ARGUMENT OF A-2.
42 It is argued on behalf of A-2, O P Kedia that he has been charged in this case for obtaining loan against LIC policies as security allegedly without submitting the same. Accused has proved by producing defence evidence that LIC policies were submitted 19/44 20 while obtaining the loan. Besides, the LIC policies proved by the accused other polices were also in existence at the time of taking of loan.
43 It is argued by Ld. defence Counsel on behalf of A-2 that all the witnesses have submitted that it was mere an irregularity. Ld. Defence Counsel referring the statements of PW5 Sh. V P Gupta, PW6 Sh. R Madhvan and PW7 Sh. O P Chopra argued that all these witnesses in their statements, have stated that it was an irregularity. It is argued that PW12 Sh. R K Batra has stated that papers for assignment i.e. policy bonds etc. were to be sent to LIC by the assignors or assignees. In case of bank normally papers were forwarded to LIC by the bank as absolute assignee of the policy.
44 It is argued that A-2 has paid entire amount. DW1 has stated that accused had taken a loan of Rs. one lac and has repaid an amount of Rs.2,03,261/- (Ex.DW1/1). It was purely a civil dispute. No criminal offence made out. Accused may be acquitted.
FACTUAL AND LEGAL ANALYSIS OF THE ARGUMENTS 45 It is admitted case of both the parties that accused O P Bhatia was posted as Manager, Scale II, in the erstwhile New Bank of India, East of Kailash Branch, New Delhi at the relevant time. Accused O P Kedia had applied for Rs. 1,00,000/- which was sanctioned by accused O P Bhatia on 6.4.90.
20/44 2146 According to prosecution discretionary power to sanction a loan of a Scale II Manager was upto Rs. 50,000/- but in this case O P Bhatia had sanctioned loans of more than Rs.50,000/- in favour of A-2. PW6 Sh R Mahadevan , PW7 O P Chopra , PW11 A K Jain and PW10 O N Tuli have specifically deposed that Power of O P Bhatia as Manager Scale -II for sanctioning loan was upto Rs.50,000/- . These witnesses have not been cross examined on behalf of A-1 on this aspect. Even during the course of argument this aspect has not been disputed. In these circumstances, this Court is of opinion that prosecution has proved this fact beyond reasonable doubts.
47 According to prosecution even this power of accused O P Bhatia was withdrawn vide circular dt. 27.11.89 Ex PW13/A and letter dt. 1.12.89. Thus, A-1 was not competent to grant any loan however, the fact of withdrawal of power has been denied by A-1. According to him, he had sanctioned this loans as per rules after keeping 9 LIC Policies as security.
48 It is argued on behalf of A-1 that he had not received any such letter suspending his powers. PW7 O P Chopra has specifically deposed that he had suspended the discretionary powers of O P Bhatia vide letter dated 1.12.89. This letter was sent by regd post to the concerned branch, as per law, it can be presumed that a regd letter must have reached to its destination within 30 days. In this case loans were sanctioned by A-1 on 6.4.90 i e after about four 21/44 22 months of issuing of this letter. Even otherwise PW5 has categorically stated, as quoted below, that he had telephonically conveyed this fact to A-1. He had also conveyed it to A-1 by calling him personally. This witness has been cross examined at length, however nothing such has come on record to disbelieve him on this aspect.
49 PW7 Sh O P Chopra has specifically deposed that he had suspended the discretionary powers of O P Bhatia for sanctioning loan and had conveyed it to him on telephone as well as by calling him personally and vide letter dt. 1.12.89 . In this regard, relevant portion of his statement is as under:
" I had suspended the discretionary power of accused O P Bhatia in the matter of issuing of LICs for sanctioning the loan on 1.12.89 . I had told accused O P Bhatia on telephone as well as personally calling him about this fact. The security in respect of any loan can be changed by sanctioning authority or by any competent authority."
In these circumstances, this Court is of opinion that prosecution has proved the fact of suspension of discretionary power of A-1 of sanctioning of loan.
50 According to prosecution A-1 had sanctioned a loan of Rs.1,00,000/- in favour of A-2 against the security of non existing 9 LIC policies. Initially he had written on Ex PW1/G "against pledging of IVP" but later on A-1 had converted it in "LIP" by 22/44 23 cutting/ over writing . No IVP or LIC policies were actually taken on record. This fact has been denied on behalf of A-1 and A-2. According to them loan was sanctioned as per rules after obtaining LIC policies.
51 PW6 R Mahadevan, who was posted as Manager Vigilance Section in the Head office of the then New Bank of India during the year 1990, has stated that he had conducted surprise check in the East of Kailash Branch in August 1990 and found various irregularities. Relevant portion of his statement in this regard is as under :
" I conducted surprise check in East of Kailash Branch in August 1990 . On the first day, I checked the loan sanctioned against securities of pledged of LIC policies in 45 cases."
He has further stated as follows:
" Mr O P Bhatia was the Manager of New Bank of India East of Kailash Branch New Delhi. I identify him who is present in Court today. Loan application form was not obtained in this case. Since the loan was sanctioned against the security of pledge of LIC policies the details of the same were not mentioned in the LIC policy register. Even the LIC policy was not maintained in the said branch. The LIC policy was not available in the loan file. In this file was loan was sanctioned against LIC policy on 6.4.90. Mr O P Bhatia was the Branch Manager at that time. In 23/44 24 form No L-36 Ex PW1/F surrender value of Rs.1.11 lacs was mentioned of the LIC policies pledged with the branch. However the face value of the policy was not known, premium paid receipt were not available. Nine LICs policies were taken as security, but there is no mention of LIC policy Numbers. The policies against which loan was given, are not on the record. Loan was sanctioned in this case for Rs.1,00,000/- whereas the discretionary powers of Manager was Rs.50,000/- during the period. Loan was sanctioned and paid to Sh O P Kedia and the amount was paid in cash. I have seen seizure memo Ex PW6/A ( Photocopy) . The document as per seizure memo Ex PW6/A are marked 1 to Mark A-10, The loan against security of pledge of LIC policies were sanctioned and released by Sh O P Bhatia even after suspension of his loaning power by the competent authorities. The LIC policies reported to have been pledge with the bank in this case were not got regd and assigned with Life Insurance Corporation of India. There was no record at the Branch level to confirm that the LICs policies were ever received and sent to LIC of India for the purpose of registration and assignment. There is mention on the back side of file cover Ex PW1/A in encircled portion that the policies handed over to borrower for assignment from LIC . Said encircled portion is Ex PW2/A which is in the hand writing and signatures of O P Bhatia which I identify."
52 In this regard PW 11 A K Jain has stated as follows:
" The loan sanctioning Manager was the scale-II 24/44 25 Manager and had no powers to grant loan beyond Rs.50,000/- . There was circular placing restrictions against grant of loan on the basis of LICs policies with five exceptions . Photocopy of the said circular is marked 'A'. This case did not fall under the exceptions. I have seen payment voucher Ex PW1/C and Ex PW1/B. Vide this payment voucher loan of Rs 1,00,000/- was disbursed to accused O P Kedia against LIC policy. The signatures of Mr Kedia at point A on Ex PW1/C in token of receipt of loan amount. In the loan file, there are only payment vouchers and the ledger sheet and no other document is on the loan file. There is no LIC policy on the said file.
53 In this regard PW10 Sh. O N Tuli has stated as follows:
"I have seen loan file Ex PW1/Aof Shri O P Kedia . In this file, loan application form was not obtained. Since the loan was sanctioned against the security of pledge of LIC Police , the details of the same was not mentioned in the LIC policies Register. Even the LIC policy was not obtained in this case. The LIC policy was not available in the loan file. Mr O P Bhatia accused was the branch Manager at that time . In this file , last premium receipt and undertaking from the borrower to repay loan are also not there .
Duly assigned LIC policy in favour of bank are kept alongwith the loan document "25/44 26
54 Ex PW1/G is the ledger sheets, of aforesaid loan account in the column of details of security, A-1intially had written " pledge of dep. of IVP " showing that advance was made against the security of IVPs but later on he had altered it by cutting / over writing LIP over IVP, suggesting that loan was sanctioned against the security of LIC policy.
55 It is argued on behalf of A-1 that being Manager he had power to change the security. He had also put his signatures on the cutting authenticating the same hence no adverse inference can be drawn against him. There is no merit in this argument firstly because there is no evidence that A-1 had initially taken on record IVP before the sanctioning of loan, secondly A-1 has not mentioned any reason for change of security from IVP to LIP.
56 Here it is worth important to mention that five more cases are pending against A-1 in this Court beside the present one, all titled CBI Vs O P Bhatia, Vide CC No.115/93, 119/93, CC No.118/93, CC No.116/93 and CC No.121/93, having similar allegations. In all these cases A-1 had altered IVP to LIP by making cutting and over writing. There can be similar mistake in one case or two how in all these cases it has been done, has not been explained on behalf of A-1. In all these cases loan was sanctioned in first week of April 1990. This Court can take judicial notice of this fact. The sanctioning of loan in these cases in a span of a week also reflects men era of abuse of official position of A-1 to favour private person.
26/44 2757 There is no evidence that 9 LIPs were obtained by A-1 . No unique Number of LIP has been mentioned . There is no reliable explanation on behalf of A-1, if the LIPs were taken why the same were not kept in the file after getting the same assigned from LIC office. A-1 was the Branch Manager, his duty was to maintained LIP Register and document index Register but he had not maintained the same as deposed by various witnesses.
58 According to the accused 9 LIPs had been deposited in the bank but there was not even a single LIP either available on the file or was in the bank assigned in favour of bank by borrower O P Kedia or was sent for assignment to LIC Office or was received back from LIC office.
59 In case of loan against the security of LIP borrower had to make an absolute assignment in favour of bank. He had to surrender the policy bond alongwith the last premium paid receipt and to give a notice to LIC U/s 38 of Insurance Act. Unique policies numbers were to be mentioned in the notice U/s 38 of Insurance Act as well as on the forwarding letter. Bank had to send the notice and policy bond to LIC for registration of assignment in favour of bank. LIC after registration of assignment had to return the policy bond to the bank, only then the loan can be sanctioned and disbursed, so that in case of default bank can encash the policy. Policy bond cannot be returned before the liquidation of loan but in this case loan had been disbursed without the compliance of all these conditions.
27/44 2860 In this regard PW9 Ashok Kumar Oberai has stated as follows:
" I have seen file Ex PW1/A of accused O P Kedia I identify the hand writing and signatures of OP Bhatia on documents Ex PW1/B, Ex PW1/C, Ex PW1/D, Ex PW1/E and Ex PW1/F in file Ex PW1/A . I have seen him writing and signing during the course of official duty. This loan file does not contained any LIC policy. However the loan was sanction against LIC policy. The loan amount was disbursed in cash to O P Kedia. Who has signed on payment voucher Ex PW1/C. I have seen Ex PW1/F. It is signed by the party i e policy holder and Rs 1 lac was sanctioned against the policy. This document mentioned 9 policies of unit No.110. I have seen Ex PW1/E which is a notice for assignment of LIC policy in favour of bank which is signed by accused O P Bhatia. I have seen Ex PW1/D, which is a notice to LIC given by party who signed it. I have seen ledger sheet Ex PW1/G the name of party O P Kedia is written by me under the instructions of accused O P Bhatia . This is in encircled portion. I also written the date 6.4.90 and amount 1 lac and rate of interest, date 6.4.90 and amount of loan under the instructions of accused O P Bhatia in his cabin."
61 With regard to filing of LIPs deposited in the bank stand taken by both the accused in their statement U/S 313 Cr P C is conflicting and contradictory. A-1 in reply to the question No.16 in his statement U/S 313 Cr PC has stated that policies were handed 28/44 29 over to borrower for getting the same assigned in favour of bank. Question No;16 of the statement of A-1 and its answer recorded U/S 313 Cr PC is as under :
Q-16. This is further in evidence against you that LIC policies reported to have been pledged with the bank in this case were not got registered and assigned with LIC of India. What you have to say?
Ans; The policies were handed over to borrower for the purpose of getting the same assigned in favour of the bank and thereafter the same might have not been received back."
62 A-2 in his statement recorded U/S 313 Cr P C in reply to question No.3 has stated that policies were with him it was for the bank to take the policies . He will produce the same in his defence. Question NO.3 of the statement of A-2 and its answer recorded U/S 313 Cr P C is as under :
Q.3 This is further in evidence against you that you did not delivery any policy in the bank, did not get any policy assigned in favour of the bank, did not give any notice to LIC for assignment and did not get any policy assigned in favor of the bank , did not give any premium receipt in the bank and received the loan without proper documentation . What you have to say?
Ans This was for bank to take the policies . I had the policies with me which I will produce in my defence.29/44 30
It shows that at least one of the two accused with regard to deposition of LIPs in the bank is telling lie.
63 Accused O P Bhatia has made following endorsement on the file cover Ex PW2/A ( D-3) and put his signatures underneath the same.
" Policies handed over to the borrower for assignment from LIC"
sd/-
( O P BHATIA ) There is no corresponding endorsement with regard to receipt of LIPs by A-2 , which again proves that A-1 had manipulated bank record to show that he had taken the policies and returned the same to borrower.
64 A-2 has produced DW2 Devender Choudhary to prove that he was having LIC policies in his name. A-2 has deposed as follows:
" I am working as Higher Grade Assistant LIC Rajpura Distt Patiala. There were three LIC policies in the name of O P Kedia. First policy is 23415193 this policy commenced on 19.10.1968 and matured on October 1993. I have brought the original ledger, photocopy of the same is Ex PW2/A. Second policy No. 23426419 this policy commenced on 16.2.1969 and matured on February 1994 , the photocopy of the same is Ex DW2/B. Third policy No. 2374869 this policy commenced from 27.10.1972 and 30/44 31 matured on October 1992 .
XXXXXXXX Payment with regard to aforesaid policies have been received by the insured on maturity. Rajpura Unit N0.315 coming under Chandigarh Division. Unit No.315 of LIC has no concerned with Unit No.11-D. The policies have never been assigned to the bank."
65 A-1 on form No. L-36 and L-36-A which is Ex PW1/F has given following note:
" Nine policies of Unit No.10"
Reflecting as if he had taken nine policies belonging to Unit No.110 LIC. Similarly A-1 on covering letter of notice U/S 38 of Insurance Act Ex PW1/E has addressed / written unit No.110 N Delhi. A-1 has also signed this covering letter at point Q-180A.
66 According to both the accused loan was advanced against the security of nine LIC policies of Unit No.110 of LIC. But DW.2 has proved only three policies in the name of A-2 of Rajpura Unit No.315 LIC. All these policies were matured prior to the liquidation of loan in question and encashed by A-2. Thus even the defence of accused belied his case.
67 Had any LIP were taken on record numbers of same would have been mentioned on the notices U/s 38 of Insurance Act.
31/44 32ExPW1/D is the carbon copy of notice signed by accused O P Kedia and Ex PW1/E is the carbon copy of forwarding letter signed by accused O P Bhatia vide which notices U/S 38 of Insurance Act was allegedly sent to LIC office addressed to Unit No.110 N Delhi of LIC wherein no unique numbers of nine policies have been mentioned . From the above discussion it is clear that in this case no LIP was taken on record as security while sanctioning and disbursing of loan.
68 It is argued on behalf of A-2 that he had applied for a loan which was sanctioned to him as per rules against the security of 9 LIC policies pledged by him with the bank. He had executed various necessary documents . Prosecution has not produced any evidence to prove that there was agreement between A-1 and A-2 to conspire.
69 Conspiracy consists in a combination or agreement between two or more person do an unlawful act or to do a lawful act by unlawful mean. A conspiracy is an inference drawn from the circumstances. There cannot always be much direct evidence about it. Conspiracy can be inferred even from the circumstances giving rise to a conclusive or irresistible inference of an agreement between two or more persons to commit an offence. Since Conspiracy is often hatched up in utmost secrecy, it is most impossible to prove conspiracy by direct evidence. It has to be inferred from the acts, statements and conduct of parties to the 32/44 33 conspiracy. Thus, if it is proved that the accused pursued, by their acts, the same object often by the same means, one performing one part of the act and the other another part of the same act so as to complete it with a view to attainment of the object which they were pursuing, the court is at liberty to draw the inference that they conspired together to effect that object. Conspiracy has to be treated as a continuing offence and whosoever is a party to the conspiracy, during the period for which he is charged, is liable under this section.
70 It is not an ingredient of the offence under this section that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. The entire agreement must be viewed as a whole and it has to be ascertain as to what in fact the conspirators intended to do or the object they want to achieve. It is not necessary that each member of conspiracy must know each other or all the details of the conspiracy. It is also not necessary that every conspirator must have taken place in each and every act done in pursuance of a conspiracy.
71 Though to establish the charge of conspiracy there must be agreement, there need not be proof of direct meeting or combination , nor need the parties be brought into each other's presence; the agreement may be inferred from the circumstances raising presumption of a common concerted plan to carry out the unlawful design. So again it is not necessary that all should have 33/44 34 joined in the scheme from the first; those who come in at a later stage are equally guilty.
72 Conspiracy hatched in secrecy and executed in darkness. In a case of conspiracy, it is not expected from the prosecution that it will produce evidence to show that conspirators executed agreement to commit crime before the witnesses to prove the existence of conspiracy. Conspirators take all precautions to keep their plan secret hence prosecution cannot produce direct evidence to prove agreement to commit conspiracy.
73 The agreement to conspire may be inferred from circumstances, which raised a presumption of a concerted plan to carryout an unlawful design / act . Conspiracy need not be established by proof which actually brings the party together; but may be shown like any other fact, by circumstantial evidence.
74 In Kher Singh Vs State AIR 1988 SC 1883 it is observed as follows:
" Generally, a conspiracy is hitched in secrecy and it may be difficult to adduce direct evidence of the same. The prosecution will often rely on th evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon the circumstantial evidence. The conspiracy can be undoubtedly proved by such 34/44 35 evidence direct or circumstantial. But the Court must require whether the two persons are independently pursuing the same end or they have come together to the pursuit of the unlawful object. The former does not render them conspirators, but the later does. It is however, essential that the offence of conspiracy required some kind of physical manifestation or agreement the express agreement however need not be proved. Nor mutual meetings of the two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient. Conspiracy can be proved by circumstances and other material."
75 It is also argued on behalf of both the accused that loan transaction was a civil transaction at the most leading to a breach of contract, no criminal offence made out against them.
76 The distinction between mere breach of contract and a criminal offence is a fine one. It depends upon the intention of the accused at the beginning which may be judged by his subsequent conduct also. Mere breach of contract cannot give rise to criminal offence, unless fraudulent or dishonest intention is shown right at the beginning of the transaction i.e. the time when the offence is said to have been committed.
77 Criminal intention means the purpose or design of doing an act forbidden by the criminal law . Intention of the 35/44 36 accused to produce a particular consequences shows his intention to do that act. An act is intentional if it exists in idea before it exists in fact . Usually intention is inferred from the conduct of a person . As a General rule every sain man presumed to know the necessary or the natural and probable consequences of his acts, this presumption of law will prevail unless from a consideration of all the evidence the Court entertains a reasonable doubt whether such intention existed.
78 Intention is an internal state of mind. Sometime it may be expressed sometime it may be implied. Implied intention is to be inferred from the acts and conducts of the parties . Sometimes the intention is imputed from the act or the consequences. If a particular act has been done, the law will presume that the person doing it has the intention to do it without the enquiry as to whether actually he had the intention or not.
79 It can be well inferred from the evidence produced by the prosecution on the judicial file that A-1 and A-2 were involved in a criminal conspiracy and having dishonest intention from the very beginning. From the above discussion it is proved beyond reasonable doubts that a loan of Rs One lac was sanctioned by A-1 in favour of A-2 against the security of 9 non existing LIC policies. A-1 had made endorsements on the file covers stating that policies were handed over to borrower for assignment from LIC under his signatures. A-2 has stated that he was having LIC policies with him and it was for the bank to receive the same . A-2 in is defence can 36/44 37 only proved three LIC policies in his name pertaining to Rajpura Unit No.315 of LIC. He could not produced or proved any LIC policy of Unit 110 N Delhi.
80 A-2 could only prove three LIC policies purchase by him which are of Rajpura Unit No.315 . These policies were matured in the year 1993, 1994 and 1992 respectively. Payments of all these policies were also received by A-2 on maturity in the year 1993, 1994 and 1992 , i e much before the liquidation of loan in this case. According to rules LIP bond cannot be returned before the liquidation of loan. A-2 could not proved even a single policy of Unit No.11-D of Delhi . According to A-2 loan was sanction to him by A-1 against the security of 9 LIC policies, how can it was possible when A-2 was not having even a single LIP of Delhi Unit. This very fact proves beyond reasonable doubt that A-1 and A-2 were involved in a criminal conspiracy with a dishonest / criminal intention from the very beginning i e at the time of sanctioning of loan in question.
81 It is also proved on the file beyond reasonable doubt that all the documents with regard to sanctioning of this loan were in the hand writing of A-1 and not in the hand writing of concerned clerks who were appointed for doing that job. It is argued that being Manager A-1 can fill up the documents. In the peculiar facts and circumstances of this case wherein A-1 had sanction loan against the security of non existing 9 LIPs inspite of withdrawal of his discretionary powers to sanction a loan upto 50,000/- , the fact of 37/44 38 executing all the documents by A-1 with regard to aforesaid loan also proves the existence of conspiracy between A-1 and A-2. Not mentioning of Unique Nos of LIC policies in Notices U/S 38 of Insurance Act having signatures of A-1 and forwarding letter having signatures of A-2 also proves that they were acting in furtherance of a criminal conspiracy. These facts also proves beyond reasonable doubt that it was not merely a civil transaction resulting in the breach of contract but a criminal offence. It is also proved that A-1 being the Branch Manager had not maintained LIP Register and document index register . A-1 at the back of Ex PW1/F has written that details of LIPs recorded in LIP register and signed underneath the same. Inspite of having knowledge of the fact that no LIP register was maintained he had written on the back of document that particular of LIPs recorded in LIP Register, also proves his malafide and dishonest intention from the very beginning.
82 It is correct that A-2 has ultimately compromise the matter with the bank and paid an amount of Rs.2,03,000/- alongwith penal interest. Mere payment of loan amount with interest does not wash away the criminal offence committed by A-1 and A-
2. There is substantive evidence against both the accused that they were conspired with each other, in furtherance of criminal conspiracy A-1 had sanctioned loan of Rs.1,00,000/- in favour of A-2 by abusing his official position and by falsifying the bank record against the security of 9 non existing LIC policies and A-2 had also facilitated A-1 in this conspiracy as discussed above. A-1 has also filed a criminal Crl M.C No. 559/2009 & Crl M .A 38/44 39 2150/2009 titled O P Bhatia Vs CBI & Ors for quashing the present proceeding on the ground that A-2 has repaid the entire amount along with interest but the same was dismissed by Our Hon'ble High Court vide order dated 3.8.2009.
83 Hon'ble Supreme Court in Inspector of Police, CBI Vs B. Raja Gopal 2003 SCC- 1238 in this regard has held as follows:
" Criminal Procedure Code, 1973- S.482 - Quashing of criminal proceedings - Accused charged under Ss.420, 468, 471 IPC for defrauding bank- Merely for the reason that a compromise had been reached between the bank officials and the accused and accused paid the disputed amount found due to the bank, held , High Court was not justified in quashing the trial which had reached almost the pen ultimate stage"
84 Hon'ble High Court of Delhi in Dhanpat Bothra Vs State of Delhi Govt of NCT of Delhi & Ans. 2008 IX AD ( Delhi) 495 has observed as follows:
" Merely because the accused has made good the complainant's loss after he was caught, does not automatically wipe out the offence committed- Existence of yet another FIR filed by an independent complainant- Within a period of seven days, two FIRs came to be lodged against the petitioner, with similar allegations, by different complainants with whom the petitioner was working on a commission basis- This raises more than a suspicion against the 39/44 40 conduct of the petitioner- Also, both the FIRs are under investigation - Although dispute can be termed as, 'private' in nature but offences, which are non- compoundable, are treated as crimes against society and, therefore, normally the consent of the victim to compound those offences may not be of any use- Petition dismissed ."
85 Hon'ble Delhi High Court in Shyam Babu Gupta & Ans Vs State ( Govt of NCT) Delhi & Ans 2008 Crl L J 951 has observed as follows:
" Criminal P C ( 2 of 1974) S. 482 - Quashing of FIR- Petitioner alleged to have forcibly seized vehicles of complainant - Act of petitioner in illegally taking possession of three-wheeler was nothing but sheer display of muscle power which cannot be tolerated - It is an offence against society- Merely because parties have reached a settlement and money has been paid to complainant- Cannot be a ground for quashing FIR."
86 It is correct that while deposing in the Court various witnesses have stated that loan was sanctioned irregularly. It is argued on behalf of accused hence there is no illegality committed by accused while sanctioning of loan in view of above statement of witnesses. It is argued that irregularity is curable. Bank should have taken steps to get the irregularity cured. There is no merits in this argument because witnesses are not legal expert, they hardly understand difference between irregularity and illegality.There is no 40/44 41 estopple against statue . If a witness innocently has used a particular word while deposing in the Court without understanding the legal meaning of the same, accused cannot be allowed to take advantage of the ignorance of such witness. From the above discussion of the facts of this case and the evidence produced by the prosecution it is well proved that both the accused in connivance and conspiracy with each other had obtained pecuniary advantage illegally and by corrupt means. Thus they cannot avoid the legal consequences only because the witnesses have used word irregularly.
87 Hon'ble Supreme Court in Inder Singh Vs State ( Delhi Administration) AIR 1978 Supreme Court 1091 has held as follows:
"Credibility of testimony, oral circumstantial depends considerably on a judicial evaluation of the totality, not isolated scrutiny. While it is necessary that proof beyond reasonable doubt should be adduced in all criminal cases, it is not necessary that it should be perfect, If a case is proved too perfectly, it is argued that it is artificial; if a case has some flaws, inevitable because human beings are prone to err, it is argued that it is too imperfect. One wonders whether in the meticulous hypersensitivity to eliminate a rare innocent from being punished, many guilty men must be callously allowed to escape. Proof beyond reasonable 41/44 42 doubt is a guideline, not a fetish and guilty man cannot get away with it because truth suffers some infirmity when projected through human processes. Judicial quest for perfect proof often accounts for police presentation of fool-proof concoction. Why fake up? Because the Court asks for manufacture to make truth look true? No, we must be realistic".
88 Prevention of Corruption Act is a social legislation enacted with the object to curb illegal activities of public servants, in these circumstances according to the law of interpretation of Statute, its provision should be interpreted so as to achieve its object. Our Hon'ble Supreme Court in Ram Singh Vs. State of MP (2000) 5 Supreme Court Cases-88 has held as follows:
"Prevention of Corruption Act, 1988 - Nature and interpretation of -Held is a social legislation to curb illegal activities of public servant and should be liberally construed so as to advance its object and not liberally in favour of the accused - interpretation of Statutes -Particular statutes or provisions - Penal statute - Social Legislation - Interpretation of".
89 Our Hon'ble Supreme Court in State of Punjab Vs. Pohla Singh, 2003 (3) CCC 75 has held as follows:
"Appreciation of evidence - The prosecution is not supposed to meet every hypothetical question raised by the defence -If crime is to be punished in a glosseme way niceities must yield to realistic appraisal."42/44 43
90 In case U/S 13 (1) (d) of P C Act 1988 prosecution has to prove that :
i) That accused should be a public servant.
ii) That he should used some corrupt or illegal means or otherwise abused his position as a public servant,
iii) That the accused should have thereby obtained a valuable thing or pecuniary advantage.
iv) Such benefit for himself or for any other person.
91 In case U/S 477-A of IPC prosecution has to prove that :-
1 The person coming within its purview must be a clerk, an officer, or a servant, or acting in the capacity of a clerk, an officer, or a servant.
2 He must wilfully and with intent to defraud ----
i) destroy, alter, mutilate, or falsify, any book, electronic record, paper, writing, valuable security, or account which
(a)belongs to or is in the possession of his employer; or
(b)has been received by him for or on behalf of his employer;
ii) make or abet the making of any false entry in or omit or alter or abet the omission or alteration of any material particular from or in any such book, paper, writing, valuable security or account.
92 All that is necessary to bring a person within the 43/44 44 purview of this section is that he would have altered or falsified any book or paper, etc., wilfully and with intent to defraud. If the intention with which a false document is made is to conceal a fraudulent or dishonest act which had been previously committed, the intention cannot be other than an intention to defraud.
93 In view of above discussion it is proved beyond reasonable doubt from the evidence produced by the prosecution that accused O P Bhatia, who was working as Branch Manager Scale-II in the erstwhile New Bank of India, was a public servant, who by abusing his official position, in connivance and conspiracy, of his co-accused obtained pecuniary advantage illegally or by corrupt means to O P Kedia , by illegally sanctioning loan of Rs.1,00,000/- against the security of 9 non existing LIC policies by falsifying the bank record / account. Therefore accused O P Bhatia is convicted for the offences punishable U/s 13 (2) r/w 13 (1 )(d) of P C Act, 1988 and U/S 477 -A IPC and U/S 120-B of IPC and Section 13 (2) r/w Section 13 (1 )(d) of P C Act and Section 477-A of IPC .
94 Accused O P Kedia is convicted U/S 120-B of IPC r/w Section 13 (2), 13 (1 )(d) of P C Act, 1988 , U/S 477-A IPC.
Announced in open court ( V. K. Maheshwari) ON 30TH DAY OF,OCT . 2009 S PECIAL JUDGE: (P C ACT)-
03 CBI: DELHI 44/44 45 45/44