Delhi District Court
Shri Prateek Rajput vs S.F.I.O on 16 April, 2018
1
IN THE COURT OF SH.NARINDER KUMAR:SPECIAL JUDGE2
NDPS ACT:(CENTRAL DISTRICT):TIS HAZARI COURT:DELHI
Crl. Rev. No. 185/ 2018
Date of institution: 14.03.2018 Decided on: 16.04.2018
1. Shri Prateek Rajput
S/o Sh. Jagmohan Singh Rajput,
R/o Flat No.1069, SectorC1,
Vasant Kunj, New Delhi110070
2. Shri Atul Tandon,
S/o Late Sh. B.N. Tandon,
R/o 66, Sreshtha Vihar,
Delhi110092
.....Petitioners
Versus
S.F.I.O.,
Ministry of Company Affairs,
Govt. of India,
Shastri Bhawan, R.P. Road,
New Delhi ....Respondent
AND
2
Crl. Rev. No. 203/ 2018
Date of institution: 23.03.2018 Decided on: 16.04.2018
Shri Parveen Sharma
S/o Sh. R. D. Sharma,
R/o C123, Ashok Vihar,
Phase1, Delhi 110052 .....Petitioner
Versus
S.F.I.O.,
Ministry of Company Affairs,
Govt. of India,
Shastri Bhawan, R.P. Road,
New Delhi ....Respondent
JUDGMENT
This common judgment is to dispose of two revision petitions cited above as the same arise out of the same order passed in complaint case no. 293441/16 titled as S.F.I.O. v. J. K. Lim & Ors.
32. Petitioners herein are complainant before Learned Addl. Chief Metropolitan Magistrate, (Special Acts), Central District, Delhi. They are feeling aggrieved by order dated 23.12.2017 passed by Learned Addl. Chief Metropolitan Magistrate, vide which charge for offences u/s 420, 477A read with section 120B IPC has been framed against them and another (nonpetitioner).
3. The accusation of charge reproduced as under: "That you all are Senior Officials of M/s Daewoo Motors (India) Ltd. Registered with Office of ROC Delhi & Haryana and in such capacity, were responsible for daytoday affairs of the accused company with regard to financial matters and while acting so, you all hatched a criminal conspiracy to dishonestly induced State Bank of India, Tolstoy Marg, New Delhi, Canara Bank, IFB, World Trade Tower, New Delhi, Indian Overseas Bank, Parliament Street and State Bank of Patiala, Main Branch K.G. Marg, New Delhi to grant excess working capital to M/s Daewoo Motors (India) Ltd.to which the company was not entitled.
That you all willfully and with intention to 4 defraud the above said banks prepared different stock statements of aforesaid company indicating different level of eligible current assets as on 31.03.2000 by inflating value of assets for drawing excess amount of working capital.
That the value of current assets to the tune of Rs.121.41 crores shown in stock statement was false which was corroborated by the report of Stock Auditors M/s R.G.Sharma & company as did not represent the actual stock of the company.
That during June, 2001, the inventory position was shown as Rs.145.12 crores as on 30.06.2001, however, the stock statement filed with aforesaid banks shows inflates value of stock to the extent of Rs.189.12 crores. Furthermore, the stock statement as on 30.10.2001 was also inflated to the tune of Rs.56.45 Crores for drawing excess working capital That you all having committed offence punishable under Section 420/477A IPC read with 120B IPC."
4. Vide impugned order, Learned Addl. Chief Metropolitan Magistrate rejected the contention raised by Learned Counsel for accused persons that false stock 5 statements were not used in availing credit facility, while observing that it is not necessary for such offence that false document/security is used, and rather it is sufficient if any intent is gathered from the facts during investigation.
Learned Addl. Chief Metropolitan Magistrate has also taken into consideration that undisputedly, at the time of preparation of false stock statement, accused persons were employed with M/s Daewoo Motors (India) Limited on senior positions and having responsibility of managing accounts /finance department and further that no reasonable explanation has been given for preparation of such stock statements.
It has also been observed that prima facie case is made out against the accused persons from the intention to cheat and dishonestly induce the bank for sanctioning of enhanced credit facility.
65. In view of material available on record and there being no reason to disbelieve statements of the witnesses (recorded by way of pre charge evidence), charge for said offences was ordered to be framed against them.
6. Vide order dated 31.01.2018, charge has been framed against the accusedpetitioners and another.
7. By way of precharge evidence, complainant examined CW1 Sh. Preet Paul Singh, CW2 Sh. S.D.Saman, CW3 Sh. S.K.Thaper, Deputy General Manager from State Bank of India and CW4 Sh. D.K. Sharma from Canara Bank.
8. Learned Counsel for petitioners has submitted that no stock statement forms part of record and that complainant did not take any step to examine any official from the concerned banks to prove any such statement.
7As regards Ex.CW1/4, from Canara Bank to the company, Learned Counsel for petitioners has submitted that this document is dated 14.02.2000 and that no stock statement was annexed to this document by the said bank in support of the allegations levelled in the complaint.
9. On the other hand, learned Public Prosecutor representing the complainant has referred to annexures C5, C6, C7, C8, C9, C10, C12, C13 and C14 and submitted that these documents depict that sufficient material was placed before learned Trial Court to show prima facie case against petitioners and there companion Vivek Khanna (nonpetitioner) for offences under Section 420 & 477A IPC and charge of criminal conspiracy, and as such there is no merit in the contention raised by learned counsel for petitioners.
In support of his contentions, as to the factors to be considered at the time of point of charge, Learned 8 Prosecutor referred to decisions in Amit Kapoor v. Ramesh Chander and Anr. 2012 (4) CC 2885 (SC) and State of Rajasthan v. Fatehkaran Mehdu AIR 2017 SC 796.
Contrary to it, learned counsel for the petitioners submits that some of the documents, referred to are not statements but rough work and that no official having been examined from the concerned bank, no reliance could be placed by the Court on these documents.
10. Cognizance was taken on the complaint dated 15.07.2005 by Senior Assistant Director, SFIO, Ministry of Company Affairs, on the basis of report submitted by Sh. S.D. Samant, written statements of concerned persons recorded on oath and documents collected in the course of investigation.
As alleged in the complaint, Prateek Rajput was Senior Executive (Finance) of the aforesaid company during period from 21.08.1995 to 21.05.2001 and Atul Tandan 9 was Senior Manager (Finance) during the year 2000.
Case of the complainant as per averments put forth in the complaint is that investigation into the affairs of the said company revealed commission of offences with regard to preparation of various false statements by its employees with intent to draw excess working capital from the following banks:
1. State Bank of India, Overseas Branch, Jawahar Vyapar Bhavan, Tolstoy Marg, New Delhi110 001;
2. Canara Bank, Industrial Finance Branch, World Trade Tower, 2nd Floor, Barakhamba lane, New Delhi110 001;
3. Indian Overseas Bank, 10, Parliament Street Branch, New Delhi and State Bank of Patiala, Main Branch, 28, Kasturba Gandhi Marg, New Delhi110 001.
11. Credit facilities sanctioned by the banks to the said Company for a period of 12 months was subject to conditions; including the condition that credit facility was subject to margin of 20% to 25% amount of the stock and receivables. The stocks shown in the stock statements were 10 also subject to hypothecation with the banks for the purpose of availing credit facility. One sanction order was annexed to the complaint as Annexure C5.
12. One of the specific allegations levelled against the accused persons is that they prepared nine stock statements of the said Company indicating different levels of eligible current assets, as on 31.10.2000, by inflating the value of current assets for drawing excess amount of working capital, to which the company was not entitled.
13. In the complaint, it has been explained that three stock statements mentioning different values of current assets ranging between Rs.121.41 crores (Annexure C6) and Rs.222.08 crores (Annexure C7), as on 31.10.2000, were signed by the two accusedpetitioners and another. One of the unsigned stock statement showing the lowest inventory position prepared by the company officials, was of 11 the value of the current assets at Rs.70.72 crores (Annexure C8) as on 31.10.2000. Stock statement showing the value of current assets at Rs.121.41 crores was submitted to the banks viz. State Bank of India, Overseas Branch, New Delhi, Canara Bank Industrial Finance Branch New Delhi, State Bank of Patiala, K.G. Marg, New Delhi and Indian Overseas Bank Parliament Branch, new Delhi.
14. As further alleged by the complainant, value of the current assets to the tune of Rs.121.41 crores shown in the stock statement and submitted to the aforesaid bank was false, the reason being that same did not reflect the actual stock of the company. In this regard, the complainant relied on report dated 31.08.2002 given by Stock Auditors M/s R.G. Sharma and Company appointed by State Bank of India, Overseas Branch, New Delhi and also the report submitted by M/s Rachna Gupta and Associate, Cost Accountant appointed as Stock Auditors of 12 Indian Overseas Bank.
15. As regards Parveen Sharma accusedpetitioner, it was alleged in the complaint that he used to give inventory valuation on higher side.
16. Ex.CW1/5, Ex.CW1/6 and Ex.CW1/7 are drawing power calculations as on 31.10.2000. Ex.CW1/12 is drawing power calculations as on 30.01.2001.
17. Annexure - 67B/Ex CW1/4/C5 is letter dated 14.02.2000. Vide this document Canara bank, apprised Daewoo Motors India Ltd. that higher authorities had sanctioned limit (under Multiple Banking Arrangement) valid till 16.12.2000, on terms and conditions set out therein. One of the limits was of margin stock and book debts for 20%.
1318. Annexure 67C/C6 is dated 28.12.1999 from State Bank of India to Director, Daewood Motor India Ltd. Vide this document this bank advised sanctioned existing limits to the company had been renewed for further period of one year payable on demand i.e. Fund based limits to Rs.62.50 crores and Nonfund Limits to Rs.100.00 crores. All other existing terms and conditions and other covenants were as per earlier letter dated 24.03.1998.
19. Annexure69/C6 (Ex PW1/5), Annexure68/C7 (Ex PW1/6), Annexure71/C8 (Ex PW1/7) depicting stock in progress Raw Material, Stock in progress, Finished Goods, spare parts and Book debts. Even though these pertains to the same period, some of the data reflected therein is inconsistent so far as raw material and stock in progress are concerned.
1420. Annexure78/C9/Ex CW1/8, Annexure77/C 10/Ex PW1/9 are reports from the Auditors relied on by the complainant in support of the allegations levelled against petitioners.
Ex.CW1/8 is the stock/receivbles reports in respect of company, issued by M/s R.G.Sharma and Company (Chartered Accountants).
Ex.CW1/9 is the report from Rachna Gupta and Associates to the Chief Manager Indian Overseas bank.
21. As observed by the Auditors in Ex PW1/8, the drawing powers was being not calculated as per norms stipulated by the bank. The relevant data has been tabulated by the Auditor at page 11 of this document.
As per other report Ex CW1/9, audit was conducted based on 31.12.2000 and that the audit could not be commenced as company was reluctant to get stock audit done. Audit could commence on 26.12.2000 and for 15 the reasons given therein, it took three months time to submit the report.
As per this report, discrepancies were found in the physical verification of "raw material" as compared to books balances. (Annexure 5 of the report) and the value of shortage of raw material worked out to Rs.36.76 lac which worked out to be 0.15% of the closed raw material stock.
In para 16 of the report, auditor reflected data in respect of details of stock. As per audit balance sheet and as submitted in the monthly stock statement, furnished to the bank.
22. In the course of arguments, learned Public Prosecutor explained that even though credit limit was sanctioned by Canara Bank in February 2000 by State Bank of India in December, 1999, the condition regarding reflection of actual stock was one of the terms and conditions for release of the amount as per renewed Credit 16 Limit and for the purpose of withdrawal of the amount under Renewed Credit Limit, discrepant statements regarding actual stocks were submitted by these officers of the company to the respective bank.
This submission finds support from the above material available on record.
23. Annexure C11/Ex CW1/10, Ex CW1/2 is Drawing Power Calculation as on 30.06.2001; Annexure C 14 Ex CW1/13 is financial statement for the month of October 2001. These support the contention raised by learned counsel for complainant - respondent that true statements were not submitted to the bank.
24. In view of the above material, Court does not find any merit in the contention raised by learned counsel for the petitioners that the above record is of no help to the complainant on account of nonwithdrawal of any amount 17 by the company after 07.10.2000.
25. In the course of arguments, learned counsel for petitioner referred to statements of CW1 and CW2 recorded by way of crossexamination to point out certain admissions made by them on suggestion on certain aspects. But, keeping in view the documentary evidence in the form of the annexures C5 to C14, (except C11), reports submitted by two auditors, list of Directors, reports submitted by the IO and the averments put forth in the complaint, Court finds that sentences including certain admissions of some suggestion in crossexamination of the two witnesses CW1 and CW2, cannot be read in isolation and that when the same are read together with the documentary evidence, Court find that same do not help the accused petitioners at this stage.
26. Another contention raised by learned counsel for the petitioners is that charge has been framed against the 18 petitioners for the offence under Section 477A IPC without any order or prosecution for the said offence by the Government of India. In this regard reference has been made to document dated 01.06.2005 Ex PW1/14 and Ex CW1/2 i.e. order dated 30.06.2005.
27. Vide Ex CW1/12, Director, SFIO, Ministry of Companies Affairs authorized SFIO to file complaints against said company in respect of offences under IPC and in this regard Sr. Assistant Director was authorized to file complaint and to peruse the same. But vide order dated 01.06.2005 Ex PW1/14, Joint Secretary to the Government of India had already apprised Director, SFIO of examination of the report submitted and that it was decided that complaints were to be filed under Section 190 of CrPC for all violations reported with regard to IPC Sections.
In para no. 2 Director was specifically apprised of the decision that the complaint was to be filed for 19 offences under Section 34, 420, 465, 468, 471 "etc". of Indian Penal code.
28. In view of the above two documents, it cannot be said that no order was passed for launching of prosecution against officer of the company or for offence under Section 477A IPC.
29. Reference has been made to Section 235 of Companies Act to raise contention on behalf of the petitioners Atul Tandon and Parteek Rajput that these two officers of the company cannot be said to be liable for Commission of any such offence, keeping in view their designation and posting at the relevant time.
Ex PW2/DA is the list of Directors of the company, during the relevant period.
2030. As is the case of the complainant on the basis of investigation report names of three petitioners herein appear in the concluding paragraph of this report as persons liable to be prosecuted for falsification of accounts, forgery of the accounts, that they resorted to deception by fudging of stock and accounts, and induced the lending bank to deliver Rs.149.00 crores in excess of what was due and thereby cheated the banks.
31. In the petition of Parveen Sharma, learned counsel for petitioner also submitted that he having resigned in July, 2000, no prima facie case is made out against him.
Learned Prosecutor representing the complainant has rightly submitted that resignation having been accepted from 23.11.2000, he was prima facie liable for the acts done prior thereto.
21Keeping in view the accounts submitted to the by two banks, even if his resignation was given in July, 2000, it cannot be said that no prima facie case was made out against Parveen Sharma accused petitioner.
32. At this stage, court does not find merit in the contention raised by learned counsel for petitioners that no prima facie case is made out against any of the petitioners, for the reasons that it is not clear if they were serving either with Finance or Accounts Department of the said company.
33. While framing charge learned Trial Court has also referred to hatching of criminal conspiracy to dishonestly induced Indian Overseas Bank and State Bank of Patiala.
Undisputely, no material was placed before the Trial Court regarding these two banks. So no charge could be framed regarding these banks.
2234. A perusal of the charge dated 31.01.2018 framed by learned Additional Chief Metropolitan Magistrate would reveal that it is not in consonance with the law and requires to be framed afresh.
Section 211 CrPC provides that every charge under this Code shall state the offence with with the accused is charged.
Section 218 provides that for every distinct offence of which any person is accused, there shall be a separate charge.
Herein, Learned Additional Chief Metropolitan Magistrate has framed charge for three offences under one head. Separate charge is required to be framed for offence of criminal conspiracy and falsification of accounts and cheating.
In view of the above discussion, all three revision petitions are hereby dismissed, but learned Additional Chief 23 Metropolitan Magistrate is directed to frame charge afresh in view of the above observations.
35. Petitioners to appear before learned Trial Court on 24.04.2018. Copy of the judgment & Trial Court Record be sent to Learned Trial Court. File of revision petition be consigned to record room.
36. Reader to prepare one copy of this judgment, attest the same and place in the other revision petition.
Announced in the open Court Digitally signed by NARINDER KUMAR on this 16th day of April, 2018 NARINDER Date:
KUMAR 2018.04.18
16:22:18
+0530
(NAR INDER KUMAR)
SPECIAL JUDGE, NDPS02 (CENTRAL)
TIS HAZARI COURTS, DELHI