Bangalore District Court
State By Cbi/Bsfc vs ) Sri. K. Sadananda Shetty on 17 February, 2018
IN THE COURT OF XXI ADDL. CITY CIVIL AND
SESSIONS JUDGE AND PRINCIPAL SPECIAL JUDGE
FOR CBI CASES, BENGALURU (CCH-4).
Spl. C.C. No.183/2000
DATED THIS THE 17TH DAY OF FEBRUARY, 2018
PRESENT : Sri. SADASHIVA S. SULTANPURI,
B.Com., LL.B., (Spl.)
XXI Addl. City Civil and Sessions Judge and
Prl. Special Judge for CBI Cases, Bengaluru.
Complainant: State by CBI/BSFC, Bengaluru
(By Special Public Prosecutor)
V/s
Accused: 1) Sri. K. Sadananda Shetty
S/o Late Sh. Dogu Shetty
Former Chairman & Managing
Director, Vijaya Bank,
Head Office, Bengaluru.
R/o: No.16, Sahasra Sri. 16,
1st Block, 3rd Lane, RMV Extension
2nd Stage, Bengaluru-34.
2) Sri. K. Shivarama Shetty,
S/o Sh. K. Babu Shetty,
Retired Chairman & Managing
Director, Vijaya Bank, Head Office,
Bengaluru.
R/o: No.1154, HAL 2nd Stage,
Indiranagar, Bengaluru-560 038.
3) Sri. J.S. Kajekar,
S/o Sh. Shivaiah V. Kajekar,
Former Zonal Manager,
2 Spl.C.C.No.183/2000 J
Vijaya Bank, Mumbai and
General Manager, Vijaya Bank,
Bengaluru.
R/o: No.3399, Flat 117 Pant Nagar,
Ghatkopar (E), Near Railway
Station, Mumbai 400 075.
4) Sri. R.S. Narayanan,
S/o Sh. K.M. Narayanan Nair,
Dy. General Manager,
Vijaya Bank, Calcutta.
R/o: No.410, 5th Block,
Natasha Golf View, Domlur,
Bengaluru-560 071.
5) Sri. A.B.S. Shetty,
S/o Sh. Shesha Shetty,
Asst. General Manager,
Vijaya Bank, Bengaluru.
R/o: No.2589, 18th Main,
2nd Cross, HAL IInd Stage,
Bengaluru-560 038.
6) Sri. Ramesh A. Shetty,
S/o Sh. Achanna Shetty,
Asst. General Manager,
Vijaya Bank, Delhi.
R/o: No.106, Kailash Part,
Chirag Nagar, Ghatkopar (W)
Mumbai 400 086
R/o: Skyline Apartments,
No.504, 1st Block, Nagarabhavi,
Bengaluru-560 072.
7) Sri. B.J. Vora (Dead),
S/o Sri. Late Jayantilal Vora,
Managing Director,
M/s. P.J. Pipes & Vessels Ltd.,
Mumbai.
3 Spl.C.C.No.183/2000 J
R/o: No.27/5, Swastic Society,
North Road, No.2, Juhu Scheme Vile
Parle (W), Mumbai-56.
8) Smt. Geetha Vora,
W/o Sri. B.J. Vora,
Director,
M/s. P.J. Pipes & Vessels Ltd.,
Mumbai.
R/o: No.27/5, Swastic Society,
North Road, No.2, Juhu Scheme Vile
Parle (W), Mumbai-56.
9) Sri. Yashpal Kumar,
S/o Sri. K.K. Kumar,
Director,
M/s. P.J. Pipes & Vessels Ltd.,
Mumbai.
R/o: Flat No.1201, Whispering
Palms Building, No.3B,
Lokhandwala Complex,
Mumbai-400 101.
10) Sri. V. Rama Rao,
S/o Sri. Veera Vengaiah ,
Director,
M/s. P.J. Pipes & Vessels Ltd.,
Mumbai.
R/o: Flat No.4, 2nd Bloor, Janak Co-
op. Hsg. Society Wadala (E), S.M.
Road, Mumbai-400 037.
(By Sri. George Joseph, Adv. for A1,
Sri. R. Nagendra Naik. Adv. for A2,
Sri. S.G. Bhagawan for A3,
Sri. Sandesh J. Chowta, for A4 to A6,
Sri. P.V. Gunjal for A8,
Sri. B.S. Venkataramana for A9,
Sri. Kiran S. Javali for A10)
4 Spl.C.C.No.183/2000 J
JUDGMENT
This is a charge sheet filed by the CBI/BS & FC., Bengaluru against the accused for the offences punishable under Sec. 120B r/w 420 of IPC and Section 5(2) r/w 5(1)(d) of PC Act of 1947 and Sec.13(2) r/w 13(1)
(d) of the Prevention of Corruption Act, 1988 and substantive offences u/s 420 IPC and Section 5(1)(d) of PC Act 1947 and 13(1)(d) of PC Act 1988 against accused No.1 to 10.
2. The brief facts of the prosecution case are that: -
(a) The Accused No.1 K. Sadananda Shetty was functioning as a Chairman & Managing Director of Vijaya Bank, Head Office, Bengaluru. Accused No.2 K. Shivarama Shetty, Chairman & Managing Director of Vijaya Bank, Head Office, Bengaluru. Accused No.3 J.S. Kajekar, Zonal Manager, Vijaya Bank, Mumbai and General Manager of Vijaya Bank, Bengaluru. Accused No.4 Deputy General Manager, Vijaya Bank, Calcutta.
Accused No.5 A.B.S. Shetty Asst. General Manager, 5 Spl.C.C.No.183/2000 J Vijaya Bank, Bengaluru. Accused No.6 Ramesh A. Shetty, Asst. General Manager, Vijaya Bank. All the said accused are being public servants. Accused No.7 B.J. Vora, Managing Director of M/s. P.J. Pipes & Vessels Ltd., Mumbai. Accused No.8 Smt. Geetha Vora, the wife of accused No.7, Director of M/s. P.J. Pipes & Vessels Ltd., Mumbai. Accused No.9 Yashpal Kumar, Director of M/s. P.J. Pipes & Vessels Ltd., Mumbai. Accused No.10 B. Rama Rao, Director of M/s. P.J. Pipes & Vessels Ltd., Mumbai.
(b) Further the said P.J. Pipes & Vessels Ltd., is a private limited company incorporated under the Companies Act, 1956 at Mumbai, during the period 1987 to 1992, the accused No.7 to 10 were the Directors of the said company and the said company wound up on 6.11.1996.
(c) Further, it is also the case of the prosecution that accused No.1 to 6 being public servants, officers of the bank as referred above entered into criminal 6 Spl.C.C.No.183/2000 J conspiracy with the accused No.7 to 10 at Mumbai and Bengaluru during the period of 1987 to 1992 to cheat the Vijaya Bank dishonestly and fraudulently by misrepresenting the facts to Vijaya Bank, Excelsior Branch, Mumbai in the matter of sanctioning/availing Foreign Letters of Credit facilities, Inland letters of Credit facilities, Bank Guarantee facilities, Overdraft facilities and Term Loan facilities etc., as a result of such misrepresentation and with the active connivance, accused No.1 to 10 induced Vijaya Bank, Excelsior Branch, Mumbai to part with the aforesaid loan facilities in favour of M/s. P.J. Pipes & Vessels Ltd., and Accused No.1 to 6 being public servants abusing their official position as public servants by corrupt or illegal means, released the entire loan amount to M/s. P.J. Pipes & Vessels Ltd., floated by accused No.7 to 10 and obtained pecuniary advantage for themselves and for accused No. 7 to 10 or others causing huge wrongful loss to the extent of Rs.29.35 crores as on 31.3.1993 (excluding interest) to Vijaya Bank, Excelsior Branch, Mumbai 7 Spl.C.C.No.183/2000 J
(d) Further, it is the case of the prosecution that the accused No.7 to 10 in furtherance of the said criminal conspiracy have diverted the funds sanctioned/ released by accused No.1 to 6 to the sister concerns of M/s. P.J. Pipes & Vessels Ltd., viz., M/s. Boiler Tube Company, Mumbai and M/s. P. Jayantilal and Company Private Limited, Mumbai to the tune of Rs.48.80 lakhs and Rs.71.16 lakhs respectively and also diverted funds to M/s. Arunodaya Exports, Mumbai, M/s. Gaurav Containers Limited, Mumbai, M/s. Golden Fertilizers, Mumbai and M/s. Hindusthan Agro Products Limited, Mumbai to the tune of Rs.90.46 lakhs, Rs.90 lakhs, Rs.17.50 lakhs and Rs.30 lakhs respectively.
(e) Further, it is the case of the prosecution that M/s. P.J. Pipes & Vessels Ltd., was incorporated on 6.10.1982 with its registered office at No.432, Vyapar Bhavan, No.49, P D'Mellow Road, Mumbai-400 009. It was promoted by its parent company, M/s. Jayantilal and Company Private Limited. M/s. Boiler Tube Company was the sister concern of M/s. P.J. Pipes & 8 Spl.C.C.No.183/2000 J Vessels Ltd., Accused No.7 was the Managing Director of M/s. P.J. Pipes & Vessels Ltd., and Accused No.8 to 10 were the Directors of M/s. P.J. Pipes & Vessels Ltd., during the relevant period. M/s. P Jayantilal and Company Private Limited, m/s. Boiler Tube Company and M/s. P.J. Pipes & Vessels Ltd., were already banking with Union Bank of India, Princes Street, Mumbai Branch.
(f) Further, it is the case of the prosecution that M/s. P.J. Pipes & Vessels Ltd., during 1987, had proposed to set up threading, welding, bucking unit at Taloja, Mumbai for import of pipes. Further, after threading, welding, etc., supplying them to ONGC, Oil India Limited etc., as per their requirements for their oil exploration programmes and the total cost of the project was Rs.160 lakhs including term Loan of Rs.90 lakhs and Working Capital Limit of Rs.50 lakhs and the balance of Rs.20 lakhs as unsecured loans. The supplies made to ONGC, Oil India Limited for their exploration programmes were treated as deemed exports, and the 9 Spl.C.C.No.183/2000 J Company was entitled for various export incentives from JCCI&E.
(g) Further, it is the case of the prosecution that Accused No.9, one of the Directors of M/s. P.J. Pipes & Vessels Ltd., in furtherance of criminal conspiracy had brought a letter dated 13.4.1987 from Maharashtra State Financial Corporation, Mumbai to the General Manager, Vijaya Bank, Bengaluru, requesting for Term Loan of Rs.35 lakhs from Vijaya Bank. Since Maharashtra State Financial Corporation was considering sanctioning of the Term Loan of Rs.55 lakhs and requested Vijaya Bank to indicate whether Vijaya Bank was agreeable in principle to consider for the sanction of Term Loan of Rs.35 lakhs for the project. Maharashtra State Financial Corporation had also requested the Vijaya Bank to confirm whether the appraisal of the project scheme, made by Maharashtra State Financial Corporation, was acceptable to Vijaya Bank for the consideration of Term Loan of Rs.35 lakhs. The said letter of Maharashtra State Financial Corporation was given to Accused No.1 in 10 Spl.C.C.No.183/2000 J person, by Accused No.9 at Vijaya Bank Head Office, Bengaluru. Accused no.1 had given his approval on 30.4.1987 for the in principle sanction of the Term Loan of Rs.35 lakhs. The said need based working capital facilities to M/s. P.J. Pipes & Vessels Ltd. Further based on the said letter of Maharashtra State Financial Corporation, without even a request letter or application from M/s. P.J. Pipes & Vessels Ltd., to Vijaya Bank, a reply was sent on 6.5.1987 to Maharashtra State Financial Corporation by Vijaya Bank informing that Vijaya Bank was agreeable in principle to extend to M/s. P.J. Pipes & Vessels Ltd., the Term Loan not exceeding Rs.35 lakhs and also need based Working Capital Facilities.
(h) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.3 and Accused No.6 officers of Vijaya Bank, Excelsior Branch, Mumbai had obtained oral permission from Accused no.2, which was later approved by Accused No.1 and released Rs.15 lakhs as Bridge Loan to M/s. P.J. 11 Spl.C.C.No.183/2000 J Pipes & Vessels Limited, on 29.6.1987 and out of which, Rs.14 lakhs was utilized for payment of Railway Freight charges for the transportation of pipes to Assam from Mumbai, in respect of the contracts awarded to the sister concern, M/s. P Jayantilal and Company Private Limited by Oil India Limited. The Bridge Loan, being part of the Term Loan, was meant for the utilization of the project of M/s. P.J. Pipes & Vessels Limited, and not for the transportation of pipes by the sister concern of M/s. P.J. Pipes & Vessels Limited. Moreover, the release of Rs.15 lakhs, as Bridge Loan when the regular proposal was pending, was without any security and putting the Bank in total jeopardy. Only the Board of Directors of Vijaya Bank had the powers to sanction any facilities to M/s. P.J. Pipes & Vessels Limited.
(i) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused no.1 had sanctioned on 21.7.1987, the Bank Guarantee of Rs.13.53 lakhs to M/s. P.J. Pipes & Vessels Limited, without waiting for the approval of the Board of Directors 12 Spl.C.C.No.183/2000 J of Vijaya Bank, which was competent to sanction any facility to M/s. P.J. Pipes & Vessels Limited. At that time the regular proposal of M/s. P.J. Pipes & Vessels Limited, was then pending with the Head Office of Vijaya Bank.
(j) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.1 to Accused No.6 had violated the terms of sanction of the facilities to M/s. P.J. Pipes & Vessels Limited, stipulated by the Board of Directors of Vijaya Bank, and did not get the General Power of Attorney of M/s. P.J. Pipes & Vessels Limited, registered in ONGC/Oil India Limited/JCCI & E for getting the payments directly to Vijaya Bank from those Government organization and thereby, Accused No.1 to Accused no.6 had by abusing their official position as public servants, allowed Accused No.7 to Accused No.10 to receive the payments directly from those Government bodies to the tune of Rs.17.52 crores from ONGC, Mumbai, Rs.19.21 crores from ONGC, Dehradun, Rs.13.60 crores from JCCI&E and Rs.1.51 13 Spl.C.C.No.183/2000 J crores from Oil India Limited and to divert the same for their own use putting Vijaya Bank's funds in jeopardy.
(k) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, accused No.7 to 10 had by dishonest and fraudulent intention, obtained 144 Import LCs from 1987 to 1992 from Excelsior Branch, Vijaya Bank, Mumbai. All the 144 LCs were devolved and in spite of the repeated devolvement of LCs for several crores of rupees, Accused no.1 to Accused no.6, by abusing their official position as public servants, went on sanctioning/releasing further Import LCs to M/s. PJ Pipes & Vessels Limited. The outstanding in respect of the Import LCs which were not subsequently adjusted at all was, to the tune of Rs.4,644.82 lakhs as on 31.3.1993 including interest. Such action on the part of accused No.1 to 6 (being public servants) was not in public interest, in violation of existing bank norms, against prudential banking norms, only with a view to cause undue favour to Accused No.7 to 10 and corresponding loss to the Vijaya Bank. 14 Spl.C.C.No.183/2000 J
(l) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.3 and 4 used to get spot sanction during the visits of Accused No.1 to Mumbai, in favour of M/s. PJ Pipes & Vessels Limited, and some of the sanctions, like, enhancement of Import LC facility limit from Rs.600 lakhs to Rs.900 lakhs and Bank Guarantee facility limit from Rs.250 lakhs to Rs.301.46 lakhs, were not even reported to the Board at all for ratification, even though, the Board of Directors of Vijaya Bank was the only competent authority to sanction any facility to M/s. PJ Pipes & Vessels Limited.
(m) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused no.1 to 4 by abusing their official position as public servants, had released/renewed Bank Guarantee of Rs.1,01,91,500-00 in favour of the sister concern of M/s. PJ Pipes & Vessels Limited namely, M/s. Boiler Tube Company from the funds sanctioned to M/s. PJ Pipes & Vessels Limited, by the Board, on 10.2.1990. The said 15 Spl.C.C.No.183/2000 J matter was not even informed to the Board of Directors of Vijaya Bank for quite a long time. Ultimately, the matter was put up before the Board only in the Board Meeting held on 12.8.1992, after the retirement of Accused no.2, and the Board had expressed/recorded its "displeasure".
(n) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused no.2 to 5, by abusing their official positions as public servants, had sanctioned/released Inland LC facilities of Rs.8.25 crores to M/s. PJ Pipes & Vessels Limited, on 20.3.1992 for the payment of customs duty in the name of a financial intermediary, M/s. Lodestar Investments Private Limited, which was run by none other than Accused No.9, one of the Directors of M/s. PJ Pipes & Vessels Limited. Further, the fact that the financial intermediary M/s. Lodestar Investments Private Limited was run by Accused no.9 was willfully concealed from the Board of Directors of Vijaya Bank, which resulted in the wrongful loss of Rs.6.60 crores to Vijaya Bank including 16 Spl.C.C.No.183/2000 J interest due to non-payment of the LC amounts by Accused no.7 to 10.
(o) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.2, by abusing his official position as a public servant, had, on the day of his retirement on 30.6.1992 had sanctioned to M/s. PJ Pipes & Vessels Limited, Import LC of Rs.651.83 lakhs and OD of Rs.164 lakhs by holding a meeting of the General Managers and Deputy General Managers of Vijaya Bank in his chamber. There by Accused No.2 has violated the terms of sanction of the Board of Directors of Vijaya Bank stipulated on 27.6.1992, to the effect that, the Bank should obtain a Comfort Letter from M/s. Saw Pipes Limited for effecting the payment of Rs.34 lakhs as arrears of the margin amount in respect of the Import LC. The Board of Directors, had expressed/recorded its displeasure when the matter was put up before them on 12.8.1992. 17 Spl.C.C.No.183/2000 J
(p) Further, it is the case of the prosecution that the Indian Bank, Fort Branch, Mumbai had joined the consortium with Vijaya Bank, Excelsior Branch, Mumbai in financing, M/s. PJ Pipes & Vessels Limited, as per the discussions in the consortium meeting held on 4.2.1989, at the ratio of 60:40 by Vijaya Bank and Indian Bank.
(q) In furtherance of the said criminal conspiracy, Accused No.7 to 10 had in connivance with Accused No.1 to 6, had obtained aforesaid credit facilities, during the period from 1987 to 1992, by dishonestly and fraudulently misrepresenting the facts to Vijaya Bank, Excelsior Branch, Mumbai and caused to Vijaya Bank a wrongful loss to the extent of Rs.29.35 crores excluding interest, as on 31.3.1993, i.e., Bank Guarantee of Rs.1500 lakhs, OD/CC of Rs.1555 lakhs, Term Loan of Rs.80 lakhs, Import LC of Rs.3645 lakhs, Inland L/C of Rs.8.25 lakhs; and DPG of Rs.43.68 lakhs.
(r) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused no.1 18 Spl.C.C.No.183/2000 J to 5 and Accused no.6 Sri. Ramesh A. Shetty, by abusing their official position as public servants with dishonest intention by corrupt and illegal means and Accused No.7 to 10, Directors of M/s. PJ Pipes & Vessels Limited, dishonestly and fraudulently, had obtained payments directly from ONGC/JCCI&E, and deposited the same in the accounts of M/s. PJ Pipes & Vessels Limited, in Central Bank of India, Juhu Branch, Mumbai, and in the Kapoli Co-operative Bank Ltd., Mumbai, to the tune of Rs.12.49 crores and Rs.5.03 crores respectively, and utilized the diverted funds for their own use.
(s) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.1 to 6, by abusing their official position as public servants with dishonest intention by corrupt and illegal means and Accused No.7 to 10, dishonestly and fraudulently, had diverted the funds to the sister concerns, viz., M/s. Boiler Tube Company, M/s. P. Jayanthilal & Company Private Limited, to the tune of Rs.48.80 lakhs and Rs.71.16 lakhs respectively. 19 Spl.C.C.No.183/2000 J
(t) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.1 to 6, by abusing their official position as public servants with dishonest intention by corrupt and illegal means and Accused No.7 to 10, dishonestly and fraudulently, had diverted funds to M/s. Arunodaya Exports, M/s. Gaurav Containers Limited, M/s. Hindusthan Agro Chemicals Limited, and M/s. Golden Fertilizers Limited, to the tune of Rs.90.46 lakhs, Rs.90 lakhs, Rs.30 lakhs and Rs.17.50 lakhs respectively.
(u) Further, it is the case of the prosecution that in furtherance of the said criminal conspiracy, Accused No.2 to 4, by corrupt or by illegal means, or by abusing their official position as public servants, allowed Accused No.7 to 10 to unauthorisedly sell the imported and Bank's hypothecated SS plates which were imported under duty free scheme and under the Import LCs opened by Vijaya Bank in the open market for Rs.2.07 crores and allowed the Company, M/s. PJ Pipes & Vessels Limited, to utilize the sale proceeds without 20 Spl.C.C.No.183/2000 J crediting the same to Vijaya Bank. Further as a result of the aforesaid unauthorized sale of the duty free imported SS plates, DRI conducted a raid on the factory and office of M/s. PJ Pipes & Vessels Limited, on 3.11.1990 and seized the balance quantity of the SS plates and thereby, Accused No.2 to 4 and Accused No.7 to 10 had put the Bank's funds in jeopardy.
(v) In this regard, on the basis of the complaint lodged by Banarasi Das Kakkar, (CW.110/PW40) Registrar of Chief Vigilance official Vijaya Bank, Head Office, Bengaluru as per the complaint dated 23.12.1996, the CBI/BS & FC., Bengaluru have registered an FIR against the accused.
(w) The Investigating Officer during the process of investigation has collected as many as 449 documents and examined 120 witnesses and has filed charge sheet against the accused alleging that accused No.1 to 6 being public servants in collusion with the accused No.7 to 10 have entered into criminal conspiracy during the period 21 Spl.C.C.No.183/2000 J 1987 to 1992 at Mumbai and Bengaluru and in furtherance of the criminal conspiracy accused No.7 to 10 have cheated Vijaya Bank, Excelsior Branch, Mumbai and by abuse of the official position of the accused No.1, to 6 by corrupt or illegal means by abusing their official position as a public servants had pecuniary advantage for themselves or for accused No.7 to 10 and thereby caused wrongful loss to the extent of Rs.29.37 crores as on 3.3.1993 excluding interest to Vijaya Bank and thus accused have committed offence punishable u/s 120B IPC r/w 420 IPC and Sec. 5(2) r/w 5(1)(d) of PC Act 1947 and 13(2) r/w 13(1)(d) of PC Act of 1988 and substantive offences punishable u/s 420 IPC by Accused no,1 to 10 and further substantive offences punishable u/s 5(2) r/w 5(1)(d) of PC Act 1947 and u/s 13(2) r/w 13(1)(d) of PC Act of 1988 by Accused No.1 to 6.
(x) The Investigating Officer has also secured sanction as required u/s 19 of the PC Act, 1988 against accused No.4 to 6. Further, accused No.1 to 3 have retired at the time of the filling charge sheet as such he 22 Spl.C.C.No.183/2000 J has not got sanction against them as required under the law. This court after taking cognizance, has issued summons to the accused.
3. Accused No.1 to 10 appeared before this court through their councils. The prosecution supplied copy of documents along with the charge sheet to the Accused as required u/s 207 of Cr.P.C. Accused No.1 to 10 were enlarged on bail on the date of appearance it self. It was reported that accused No.7 died on 6-8-2003, as such as per the order of the court dated 10.9.2003, the case as against accused No.7 stands abated.
4. My predecessor in office has framed the charges, The charges were read over to the accused No.1 to 6 and 8 to 10. Accused denied the charges leveled against them and claims to be tried.
5. In support of their case, the prosecution out of the 120 witness examined 68 witnesses as PWs.1 to 68 and out of 449 documents got marked only 89 documents as Ex.P.1 to Ex.P.89. During the cross- examination of wittiness, the advocate for the accused 23 Spl.C.C.No.183/2000 J got marked Ex.D1 to D17. The statements of Accused as required U/s 313 Cr.P.C., were recorded. The accused submitted that they have no oral defence evidence. However, the accused have submitted their written statements as required u/s 313(5) of Cr.P.C.,
6. I have heard the both the sides.
7. In view of the above allegations, the points that would arise for my consideration are:
(1) Whether the accused No.10 proves that he is entitled for an acquittal on the ground of principle of double jeopardy, as he has been acquitted by the court at chennai in respect complaint filed by Indian bank on the same allegation as alleged in this case?
(2) Whether the accused prove that this court is not having jurisdiction to try and entertain the present case as such they are entitled for acquittal?
(3) Whether the accused No.8 to 10 proves that they are entitled for acquittal in view of the fact that the company i.e., M/s. P.J. Pipes & Vessels Pvt., Ltd., Mumbai is not being planted as accused in this case?
(4) Whether the prosecution proves beyond all reasonable doubts that the sanction order Ex.P.44, 45 & Ex.P.82 issued by PW.43 and 24 Spl.C.C.No.183/2000 J PW.64 to prosecute against Accused No.4 to 6, the public servants are in accordance with law?
(5) Whether the accused No.4 to 6 prove that they are entitled for acquittal without going into the merits of this case as they have already exonerated in the Domestic enquiry held against accused No.4 to 6 vide Domestic Enquiry report dated 7.8.1988 as per Ex.D 2, Domestic Enquiry report dated 24-5-1999 per Ex.D 4, Domestic Enquiry report dated 22-9-1998 as per Ex.D 6 respectively?
(6) Whether the prosecution proves beyond all reasonable doubt that during the period 3-
07-1987 to 30-061992 at Mumbai and at Bangalore, accused No.1 being the Chairman & Managing Director of the Vijaya Bank for the period 1984 to 1990, accused No.2 being the General Manager (Operation) and subsequently Chairman & Managing Director of the Vijaya Bank for the period September 1990 to 30.6.1992, accused No.3 being the Zonal Manager of Vijaya Bank, Mumbai and also General Manager of Vijaya Bank, Bengaluru, accused No.4 being the Chief Manager of Vijaya Bank, Excelsior Branch of Mumbai, accused No.5 being the Asst. General Manager of Vijaya Bank, Excelsior Branch, Mumbai, accused No.6 being the Chief Manager of Excelsior Branch, Mumbai have formed into an illegal criminal conspiracy with the accused No.7 (who is dead and the case against him is abated) being the Managing Director of M/s. 25 Spl.C.C.No.183/2000 J P.J. Pipes & Vessels Ltd., Mumbai accused No.8 to 10 being the Directors of the said M/s. P.J. Pipes & Vessels Ltd., Mumbai to cause loss to Vijaya Bank to the tune of Rs.29.35 crores by sanctioning the loan and other credit facilities by borrowing illegal means with regard to the mode and manner of sanction and release of loan and other credit facilities to the tune of Rs.29.35 crores thereby the accused No.1 to 6 and 8 to 10 have caused pecuniary loss to the Vijaya Bank, Excelsior Branch, Mumbai to the tune of Rs.29.35 crores as on 31.3.1993 thereby accused No.1 to 6 and 8 to 10 have committed an offence of criminal conspiracy along with accused No.7 (who is dead and the case against him stands abated) have committed an offence punishable U/Sec. 120 (B) of IPC?
(7)Whether the prosecution further proves beyond all reasonable doubt that accused No.1 to 6 including accused No.7 (who is dead and the case against him stands abated) along with accused No.8 to 10 during the said period and in the above said places in furtherance of criminal conspiracy, to commit the offence of cheating cheated Vijaya Bank, Excelsior Branch, Mumbai by dishonestly inducing the said Vijaya Bank, Mumbai to deliver the property i.e., loans and other credit facilities belonging to the Vijaya Bank, Excelsior Branch in the form of delivery of cash amount to the tune of Rs.29.35 crores by way of sanction of loan and other credit facilities to M/s. P.J. Pipes & Vessels Ltd., and thereby accused No.1 to 6 and 8 to 10 along with accused No.7 (who 26 Spl.C.C.No.183/2000 J is dead and the case against him stands abated) have committed an offence punishable u/s 420 IPC r/w Sec.120(B) of IPC?
(8)Whether the prosecution further proves beyond all reasonable doubt that, Accused 1 to 6 during the above said period and the place referred above, being a public servants in the employment of Vijaya Bank, Bengaluru, and in such a capacity being entrusted with the dominion over certain properties of the Vijaya Bank i.e., custodian of the books of accounts and cash credit facilities of the said bank entrusted with the power of sanction of loans and other credit facilities to the customers of the bank, committed criminal breach of trust in respect of the said property referred above and malafidely and dishonestly sanctioned and released loans and other credit facilities like foreign letters of credit facilities, Inland letters of credit facilities, Bank guarantee facilities, over draft facilities and Term loan facilities, totally to the tune of Rs.29.35 crores as on 31.3.1993 and thereby have committed an offence punishable u/s 409 r/w 120B of IPC?
(9)Whether prosecution proves beyond all reasonable doubt that accused No.1 to 6 during the above said period and above said place being the public officers and the officials of Vijaya Bank as referred above working in different designation as referred above by use of corrupt or illegal means with a malafide intention to cheat the Vijaya 27 Spl.C.C.No.183/2000 J Bank and caused financial loss to the Vijaya Bank by cheating and violating norms, rules and circulars issued by the Vijaya Bank with regard to the sanction of loans and other credit facilities like foreign letters of credit facilities, Inland letters of credit facilities, Bank guarantee facilities, over draft facilities and Term loan facilities, totally to the tune of Rs.29.35 crores to the M/s.P.J.Pipes & Vessals Ltd and obtained pecuniary advantage to the tune of Rs.29.35 crores in favour of M/s. P.J. Pipes & Vessels Ltd., of which accused No.7 to 10 are the Directors of the said company thereby have caused loss to the bank and obtained pecuniary advantage for themselves or for any other persons to the tune of Rs.29.35 crores and thereby have committed offence of criminal misconduct punishable u/s 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988?
(10)What Order?
8. My findings on the above points are as follows:
POINT No.1: In the Negative POINT No.2: In the Negative POINT No.3: In the Negative POINT No.4: In the Negative POINT No.5: In the Negative POINT No.6: In the Negative POINT No.7: In the Negative POINT No.8: In the Negative 28 Spl.C.C.No.183/2000 J POINT No.9: In the Negative POINT No.10: As per final order, for the following REASONS
9. Before discussing the merits of this case, I would like to reproduce the provisions of law relating to this case as under: -
Indian Penal Code. Sec. 409. Criminal breach of trust by public servant, or by banker, merchant or agent: - Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Indian Penal Code. Sec. 415. Cheating: -
Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage 29 Spl.C.C.No.183/2000 J or harm to that person in body, mind, reputation or property, is said to 'cheat'.
Explanation: - A dishonest concealment of facts is a deception within the meaning of this section.
Indian Penal Code. Sec. 420. Cheating and dishonestly inducing delivery of property: -
Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Indian Penal Code. Sec.120B. Punishment of criminal conspiracy: - (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(1) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.
Prevention of corruption Act,1988.
Sec.13. Criminal misconduct by a public 30 Spl.C.C.No.183/2000 J servant: - (1) A public servant is said to commit the offence of criminal misconduct: -
(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in section 7; or
(b) ...
(c) ....
(d) If he: -
(i) by corrupt or illegal means, obtains for
himself or for any other person any
valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine.
Prevention of corruption Act,1988.
Section.19. Previous sanction necessary for prosecution: - (1) No court shall take cognizance of an offence punishable under sections 7, 10, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction [save as otherwise 31 Spl.C.C.No.183/2000 J provided in the Lokpal and Lokayuktas Act, 2013.
(a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government;
(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government;
Keeping in view of the above provision of law, I would like to discuss the merits of this case.
10. POINT No.1: - It is an undisputed fact that in respect of the above facts alleged in the charge sheet earlier the FIR was registered by the CBI in RC No.10(E)/96 Bengaluru on 24.12.1996 and a separate FIR was also registered in RC No.5(E)/97/ BS&FC, Bengaluru on 29.11.1997. The matter was investigated in both the cases by the same CBI Officers. One final report was filed before this court and another final report was filed at Chennai court. The final report filed before the Chennai Court, the matter was tried and on merits accused No.10 has been acquitted. Since the facts and 32 Spl.C.C.No.183/2000 J allegation being the common and same having been with respect to the company M/s. P.J. Pipes & Vessels Pvt., Ltd., a civil suit was also filed for recovery of the dues by the Indian Bank as well as Vijaya Bank. It is the specific case of the accused No.10 that as the case filed by the Indian Bank before the Chennai court has been tried in accordance with law and he has been acquitted. As such once again this court cannot try this case in view of the principle of double jeopardy. In this regard, without going into the merits of the case made out by the accused No.10, I would like to bring on record that my predecessor in office has already answered and given a finding on this point as per detailed order dated 24.11.2015 by virtue of the application filed by the accused No.10 u/s 300 of Cr.P.C., read with Article 20 of Constitution of India. Accordingly his application was rejected by this court. Therefore, this court has already expressed its opinion that the present case will not amount to double jeopardy even though the accused 33 Spl.C.C.No.183/2000 J No.10 was acquitted in the case filed by the CBI before Chennai Court.
11. Further, admittedly earlier to filing of the said application by the accused No. 10 before this court, the accused no.1 to 10 have filed an application for claiming discharge from framing charge against them for the offence alleged in the charge sheet. On receiving the objections from learned Public Prosecutor and on hearing the said applications filed by the accused, this court as per the order dated 26.5.2007 has rejected the said applications filed by the accused and ordered to frame charge against the accused No.1 to 10 for the offence punishable u/s 120B, 409 and 420 r/w Sec. 120B of IPC, as against accused No.1 to 6. for the offence punishable u/s 409 r/w Sec. 120B of IPC and 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988 and also Sec. 5 of the Prevention of Corruption Act, 1947. Being aggrieved by the said order, of rejection of the application for discharge, the accused have preferred a Criminal Revision Petitions in Crl. R.P. No.925/2007, 34 Spl.C.C.No.183/2000 J 984/2007, 840/2007, 1100/2007 and 801/2007 before the Hon'ble High Court of Karnataka, the said revision petitions were dismissed by a common order dated 16.4.2014 by the Hon'ble High Court of Karnataka by confirming the order of this court to frame charge against accused No.1 to 10. Again the accused being aggrieved by the orders passed by the Hon'ble High Court of Karnataka have preferred SLP (Cri.) No.5896/2014 with Crl. Mis. No.15224/2014 before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India dismissed the said SLP and Crl. Mis. Petition as per order dated 19.1.2015. Thereby it fortifies the fact that the Hon'ble High Court of Karnataka including Hon'ble Supreme Court of India have confirmed the order of this court to frame charge against the accused No.1 to 10, thereby it indirectly expressed their opinion that the accused No.10 including other accused are not entitled for acquittal/discharge on ground of double jeopardy. As such this court can try this case against the accused No.10 including other accused even though the Chennai 35 Spl.C.C.No.183/2000 J Court has already disposed of the criminal case against accused No.10 and other accused. Therefore, in view of the above discussion, I am of the considered opinion that accused No.10 has failed to prove that he is entitled for an acquittal in this case on the ground of principle of double jeopardy as claimed. Accordingly, I answer the above Point No.1 in the Negative.
12. POINT No.2: - It is the case of the accused No.1 to 10 as per the prosecution allegation made in the FIR and the charge sheet, the loan applications were been filed by M/s. P.J. Pipes & Vessels Pvt., Ltd., Vijay bank at Mumbai and the said loan applications were admittedly been sanctioned at the Head Office of the Vijaya Bank, Bengaluru. Further, admittedly M/s. P.J. Pipes & Vessels Pvt., Ltd., is registered at Mumbai. No transaction has been carried out at Bangalore. Hence they claim no offence said to have been committed at Bengaluru. Further, as per the charge sheet, the offence alleged against the accused are said to have been committed at Mumbai even it is proved with regard to the 36 Spl.C.C.No.183/2000 J filing of the charge sheet. Further, it is also the case of the accused that the accused No.8 to 10 are residents of Mumbai and they are residing at Mumbai. As such this court cannot try and entertain this case against the accused No. 8 to 10. Hence, it is vehemently argued by the learned advocate for accused that this court is not having jurisdiction to try & entertain the charges leveled against the accused including the accused No.8 to 10 as alleged.
13. In this regard, before going to discuss the merits on this point, I would like to reproduce Sec.177, 178, 179 and 180 of Cr.P.C.
177. Ordinary place of inquiry and trial: -
Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed.
178. Place of inquiry or trial: - (a) When it is uncertain in which of several local areas an offence was committed, or
(b) Where an offence is committed partly in one local area and partly in another, or
(c) Where an offence is continuing one, and continues to be committed in more local areas than one, or
(d) Where it consists of several acts done in different local areas, 37 Spl.C.C.No.183/2000 J It may be inquired into or tried by a Court having jurisdiction over any of such local areas.
179. Offence triable where act is done or consequence ensues: - When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensured.
180. Place of trial where act is an offence by reason of relation to other offence: -
When an act is an offence by reasons of its relation to any other act which is also an offence, the first-mentioned offence may be inquired into or tried by a Court within whose local jurisdiction either act was done.
14. Admittedly, the accused No.1 to 10 have been charge sheeted for the offences punishable u/s 120B, 420 of IPC., and Sec. 5(2) r/w Sec. 5(1)(d) of PC Act and also Sec. 13(1)(d) of PC Act, 1988. Further, it has been alleged in the charge sheet that accused No.1 to 6 are the public servants and accused No.7 to 10 are the private persons and the Directors of M/s. P.J. Pipes & Vessels Pvt., Ltd. Further, it is the allegation of the prosecution that during the period 1987 to 1992, the accused No.1 to 38 Spl.C.C.No.183/2000 J 10 entered into a criminal conspiracy to cheat the Vijaya Bank with regard to the sanction as well as release of the loan facilities like Foreign Letter of Credit, Inland Letter of Credit, Bank Guarantee facility and term loan facility to be available from Vijaya Bank, Excelsior Branch, Mumbai for M/s. P.J. Pipes & Vessels Pvt., Ltd. Further, it is also alleged by the prosecution that this conspiracy was entered into between the accused in Bombay as well as in Head Office of Vijaya Bank at Bengaluru.
Therefore, as per the said allegations, the accused have entered into criminal conspiracy in order to get the loan sanctioned and also they have cheated the Vijaya Bank by suppressing the material facts and by diversion of the funds for the purpose other than for which the said loans were granted to them. Therefore, ongoing through the said allegations prima facie it goes to show that the said conspiracy which was said to have been started from Mumbai, Excelsior Branch, it extends to and continue not only till the said loan has been sanctioned at Bengaluru, it has been continued even after sanction of 39 Spl.C.C.No.183/2000 J the loan i.e. as the accused have intend to cheat the Vijaya Bank by misusing the said funds at Mumbai. In other words, by diverting the said funds for the purpose other than for which the said loan has been sanctioned. Therefore, in furtherance of the criminal conspiracy, the acts of the accused continues from Mumbai where they have filed application for loan and continued till its the head office, Bengaluru and further it is continued till the said fund has been used for diversion for the purpose other than for which it has been sanctioned. Further, admittedly as per the provision of law of Cr.P.C., referred above, the criminal conspiracy is in act which is continuing offence. In this regard, I would like to rely on the ruling reported in AIR 1964 Bombay 133 in Abdul Kadar Saleh Mohomed and others vs. State wherein their Lordships have held as under: -
"(a) Penal Code (1860), Sec. 120B -
Conspiracy outside India - Jurisdiction to try offence of conspiracy by Indian Courts - Offences being objects of conspiracy committed in India - Conspiracy being continuous - Parties to conspiracy continue to be liable. 40 Spl.C.C.No.183/2000 J Before Ss. 120A and 120B were added to the Penal Code conspiracy to commit offences was not punishable. On the amendment of the Penal Code, by addition of Ss. 120A and 120B the legislature brought the law in India in line with the English law and made conspiracy itself punishable as a distinct offence apart from the object of conspiracy which, if carried out, would itself amount to an offence.
It is no doubt true that the offence of criminal conspiracy is complete as soon as an agreement is made between the conspiracy but S. 120B does not limit its operation to those who are parties to the agreement at the moment of its formation but is also applicable to those who continue to be parties during the entire period during which the conspiracy continues. By its very language S. 120B must apply to those who are members of the conspiracy during its continuance. It is intended to be treated as a continuous offence.
It is not that merely because the objects with which the conspiracy was entered into were achieved and actual offences committed, there could be no prosecution for conspiracy itself.
From S. 120B it is clear that if the persons were parties to a conspiracy during its continuance when all of them were in India, they committed the offence in Indian territory the Courts in India have jurisdiction to try the offence under the section. (1909) 218 US 601:
54 Law Ed 1168 and AIR 1958 SC 119 and (S) AIR 1957 SC 340 and (S) AIR 1957 SC 857 and ILR 36 Bom 524 and AIR 1936 Mad 317 Referred. 7 Bom HC (Cri) 89 (FB) and 10 Bom HC 356 and AIR 1933 Sind 333, Doubted."41 Spl.C.C.No.183/2000 J
Further, admittedly in the present case on hand, there is an allegation that accused No.7 to 10 have cheated the Vijaya Bank and he accused No.1 to 6 have abused their official capacity as a public servants and in view of the further criminal conspiracy they have forced accused No.1 to 7 and caused loss to the Vijaya Bank by gaining for themselves. In this regard, admittedly the effect of the said criminal conspiracy said to have been committed by the accused No.1 to 6 more particularly when the accused No.7 to 10 being the Directors of M/s. P.J. Pipes & Vessels Pvt., Ltd., have filed applications at Mumbai in Excelsior Branch Vijaya Bank even if the said loan has been sanctioned at Head Office of Vijaya Bank, Bengaluru, the said conspiracy said to have been continued and the said sanction of the loan is result of the said conspiracy which also lead to cheating of the Vijaya Bank thereby accused who have diverted the said fund for the purpose other than the purpose for which it has been sanctioned. Therefore, it goes to show that it is continuing offence of criminal conspiracy and also 42 Spl.C.C.No.183/2000 J cheating which has affected not only at Bombay even at Bengaluru also. Therefore, when the effect of the said offence spread over in two different places under such circumstances, both the courts will have jurisdiction to try and entertain the said offence.
Further, in AIR 1961 SC 1589, in the case of Purushottamdas Dalmia v. State of West Bengal, their Lordships have held as under: -
"(a) Criminal P.C. 1898), Ss. 177, 235, 239 -
Criminal conspiracy and offences in pursuance of conspiracy committed in different local limits
- Joint trial - Court having jurisdiction to try offence of conspiracy has also jurisdiction to try offences committed in pursuance of conspiracy outside its jurisdiction - 63 Cal WN 628 : AIR 1959 Cal 500 : 1959 Cri LJ 965 (FB) , Overruled.
The court having jurisdiction to try the offence of conspiracy, has also jurisdiction to try an offence constituted by the overt acts which are committed in pursuance of the conspiracy beyond its jurisdiction. 63 Cal WN 628: AIR 1959 Cal 500: 1959 Cri LJ 965 (FB), Overruled (Para 12)."
Therefore, when the offences is spread over in two different places or when the consequence of the said offence is spread over in different place all the places of 43 Spl.C.C.No.183/2000 J courts will have jurisdiction to try and entertain the said case. Further I would like to discuss as per Sec. 180 referred above read with the findings of the reported rulings in AIR 1960 SC 266 in K. Satwant Singh vs. State of Punjab wherein their Lordships have held that:
-
(c) Criminal P.C. (1898), S. 239(b) -
"Offence" - Persons accused of several offences and persons accused of abetment thereof can be tried together.
The entire tenor of the provisions of S. 239 indicates that several persons could be tried together for several offences committed in the circumstances mentioned therein. Under S. 239
(b) persons accused of several offences and persons accused of abetment thereof could be tried together at one trial. So construed framing of three charges under S. 420, Penal Code against a person and three charges of abetment against another in the same trial did not infringe the provisions of cl. (b).
(d) Criminal P.C. (1898), Ss. 179, 180 -
Misrepresentation by A at X - Property delivered at Y - A can be tried for offence of cheating either at X or at Y - B being abettor can also be tried either at X or at Y. The misrepresentation by the accused was at Simla and the consequence was at Lahore as the Government of Burma was induced by the misrepresentation to deliver property (money) at Lahore.
44 Spl.C.C.No.183/2000 JHeld that the offence of cheating by the accused could have been tried for the abetment of that offence either at Lahore or at Simla." Further, as per Sec. 182 of Cr.P.C., which I would like to reproduce as under: -
182. Offences committed by letters, etc: - (1) Any offence which includes cheating may, if the deception is practiced by means of letters or telecommunication messages, be inquired into or tried by any Court within whose local jurisdiction such letters or messages were sent or were received ; and any offences of cheating and dishonestly inducing delivery of property may be inquired into or tried by a Court within whose local jurisdiction the property was delivered by the person delivered or was received by the accused person.
Further The Supreme Court, however, in the case of Mobarik Ali Ahmad v. State of Bombay, AIR 1957 SC 857 : 1958 SCR 328 :
1958 SCJ 111 : 1957 Cri LJ 1346, has decided the question entirely under Sec. 177 of the Code and analysed the position as follows:
"The offence of cheating under Section 420 of the Penal Code as defined in Section 415 of the Code has two essential ingredients, viz., (1) deceit i.e., dishonest or fraudulent misrepresentation to a person and (2) the inducing of that person thereby to deliver property. In the present case, the volume of evidence set out above and the facts found to be true show that the appellant though at Karachi was making representation to the complainant, 45 Spl.C.C.No.183/2000 J through letters, telegrams and sometimes through Jasawalla, that he had ready stock of rice, that he had reserved shipping space and that on receipt of money he would be in a position to shift the rice forthwith.
These representations were made to the complainant at Bombay, notwithstanding that the appellant was making the representations from Karachi. The position is quite clear where the representations were made through the trunk phone. The statement of the appellant at the Karachtatend of the telephone becomes a representation to the complainant only when it reaches cognition of the complainant at the Bombay-end. This indeed has not been disputed.
"It makes no difference in principle if the representation has in some stages been conveyed by telegrams or by letters to the complainant directly or to some one of the appellants agents including Jasawalla in that category. There is also no question that it is a result of these representations that the complainant parted with his money to the tune of about Rs.5 ½ lakhs on three different dates.
"On these facts it is clear that all the ingredients necessary for finding the offence of cheating under Section 420 read with Section 415 have occurred at Bombay, and not merely the consequence, viz., delivery of money, which was one of the ingredient of the offence."46 Spl.C.C.No.183/2000 J
Thereby it can be said that if the offence of cheating said to have been committed through documents as in the present case on hand, the accused have taken the benefit of the said misrepresentation or of cheating the bank not only at the Vijaya Bank, Excelsior Branch, Bombay but even at the Head Office, Vijaya Bank, Bengaluru, as such both the courts i.e. Bombay and Bengaluru will have jurisdiction to try and entertain the this case. Therefore, in view of the above provision of law discussed above, admittedly in the present case on hand, there is an allegation against the accused No.1 to 6 that they are being public servants have abused their official capacity and allowed the accused No.7 to 10 by inducing the said accused to get the loan sanctioned from Vijaya Bank Head Office at Bengaluru thereby the accused have cheated the Vijaya Bank and the benefit of the same has been taken by the accused No.1 to 10.
15. However, at the cost of repetition, I repeat that such consequences of the said criminal conspiracy which lead the accused to cheat the Vijaya Bank by inducing 47 Spl.C.C.No.183/2000 J the Vijaya Bank to get loan sanctioned by Head Office, Bengaluru. Hence, in view of the above discussion, I am of the considered opinion that the accused has failed to prove that this court is not having jurisdiction to try and entertain the present complaint. It is held that the Bengaluru Court i.e. this court is having jurisdiction to try and entertain the case against the accused. Accordingly, I answer Point No.2 in the Negative.
16. POINT No.3: - In this regard, the learned advocate for accused No.8 to 10 argued that admittedly the accused No.7 is the Managing Director and accused No.8 to 10 are the Directors of the M/s. P.J. Pipes & Vessels Pvt., Ltd., company is said to have been involved in the commission of the offences. It is argued that the concept of vicarious liability is not applicable to criminal cases. No where there is allegation that the accused No.8 to 10 in person have participated, involved in the criminal conspiracy and cheated Vijaya Bank. Therefore, when the personal involvement of the accused No.8 to 10 is not there in the allegations made in the charge sheet. 48 Spl.C.C.No.183/2000 J Further, there is an allegation that the M/s. P.J. Pipes & Vessels Pvt., Ltd., has involved in conspiracy with the accused No.1 to 6. Therefore, when they have specifically alleged that the company is involved in the commission of the offence unless and unless the said M/s. P.J. Pipes & Vessels Pvt., Ltd., is planted as accused, the accused No.8 to 10 are entitled for acquittal without going into the merits of the case. In support their arguments the advocate for accused relied upon rulings reported in 2015(4) SCC 609 in Sunil Bharati Mittal vs. CBI, (2011)1 SCC 74 in Iridium India Telecom Ltd., vs. Motorola Incorporated and others, (2012) 5 SCC 661 in Aneeta Hada vs. God Father Travels and Tours Ltd., and other related cases. I have gone through the findings given by their Lordships in the said judgments. Admittedly their Lordships have discussed about the criminal intent of the "Altra Go" of the Company but nowhere their Lordships have laid down principle that if the company is not planted as an accused the Directors are entitled for discharge or acquittal. Further, keeping 49 Spl.C.C.No.183/2000 J in view the provisions of law laid down in the above said judgments. Admittedly, in the present case on hand, there are accusations against the accused that they have not only formed into criminal conspiracy, they have also cheated the Vijaya Bank in getting the loan sanctioned and in diverting the said fund for the purpose other than purpose for which the said loan has been lent. Therefore, there is an allegation that cheating has been committed by the accused No.7 to 10. It is obvious that a company is body corporate it cannot be seen, touch or sensed. But it is a legal entity in the eyes of law. Further admittedly as per charge sheet the said company is wound up since 6-11-1996. As such when the said company is not in existence as on the date of taking cognizance, obviously the company cannot be planted as an accused. Therefore, when there is allegation of cheating, it cannot be said that the company itself has involved in the cheating but obviously the Directors who are having dominant role and the Directors who are involved in the control of the affairs of the company 50 Spl.C.C.No.183/2000 J definitely said to have been involved personally in the commission of offence of cheating and criminal conspiracy. Therefore, when the said persons or Directors who are having control over the affairs of the company are involved in cheating Vijaya Bank even though the company is not planted as an accused, the Directors i.e., accused No.8 to 10 in person cannot escape the liability or allegation made by the prosecution without going into the merits of the said case. Therefore, in view of the above discussions, I am of the considered opinion that the accused No.8 to 10 have failed to prove that as prosecution has not planted M/s. P.J. Pipes & Vessels Pvt., Ltd., as accused, as such they are entitled for discharge or acquittal as the case may be as claimed. Accordingly, I answer the Point No.3 in the negative.
17. POINT No.4 & 5: - For the sake of convenience and in order to avoid repetition of facts, I have taken point No.3 and 4 together for discussion.
18. It is undisputed fact that accused No.1 was the Chairman and Managing Director of the Vijaya Bank 51 Spl.C.C.No.183/2000 J from 1984 to September 1990 and retired by the time charge sheet was filed. So also accused No.2, who succeeded accused no1, was working as Chairman and Managing Director of the said bank from September 1990 to 30.6.1992 i.e. till his retirement. So also accused No.3 has worked as a Deputy General Manager of Zonal Office, Mumbai of Vijaya Bank from 1986 to May 1991. Admittedly he is also retired before the charge sheet is filed against him. Further, As per the Section 19 of the PC Act referred above, no sanction is required against public servant if he is retired or is not in service at the time of taking cognizance by the court. Therefore, admittedly in the present case on hand, the Investigating Officer has not taken sanction to prosecute against accused No.1 to 3 as they were retired by time charge sheet is filed.
19. Further, admittedly accused No.4 worked as Deputy General Manager of Vijaya Bank and accused No.5 has served as an Assistant General Manager, Vijaya Bank and accused No.6 served as Assistant general 52 Spl.C.C.No.183/2000 J Manager, Vijaya Bank, Delhi and admittedly these accused No.4 to 6 were in service at the time of filing of this charge sheet. Therefore, the prosecution has taken sanction against accused No.4 to 6 to prosecute against them.
20. In this regard, I would like to discuss the object of the getting sanction to prosecute against the public servants;
Object: Section provides protection to public servant so that they are not to be prosecuted for anything done in discharge of their official duties except with previous sanction of the Govt. Policy of legislature is to afford adequate protection to responsible public servant and if sanction is granted, to confer on Govt., if they choose to exercise it, complete control of the prosecution. This protection has certain limits and is available only when the alleged act done by public servant is reasonably connected with discharge of official duty and not merely a cloak for doing objectionable acts.
The object of the provision is to prevent a public servant from undue harassment. The authority must therefore act with due application of mind.
Sanction is in the nature of a safeguard provided to public servant of his being illegally and falsely being harassed, implicated and then prosecuted.
53 Spl.C.C.No.183/2000 JTherefore, the prosecution has to secure sanction against the public servant to prosecute them. In this regard, further I would like to discuss the procedures to be followed for passing sanction order, the ingredients of the said sanction order, and how the sanctioning authority has to grant a sanction order.
At this stage, I would like to lay my hands on the observations made in 2013 Crl. Law Journal page 3095 Supreme Court in State of Maharashtra through CBI vs. Mahesh G.Jain. Wherein para-13 of the judgment, their Lordship have laid down the guidelines and principles to be followed for granting sanction.
13. From the aforesaid authorities the following principles can be culled out: -
(a) It is incumbent on the prosecution to prove that the valid sanction has been granted by the sanctioning authority after being satisfied that a case for sanction has been made out.
(b) The sanction order may expressly show that the sanctioning authority has perused the material placed before him and, after consideration of the circumstances, has granted sanction for prosecution.
(c) The prosecution may prove by adducing the evidence that the material was placed before the sanctioning authority and his 54 Spl.C.C.No.183/2000 J satisfaction was arrived at upon perusal of the material placed before him.
(d) The Grant of sanction is only an administrative function and the sanctioning authority is required to prima facie reach the satisfaction that relevant facts would constitute the offense.
(e) The adequacy of material placed before the sanctioning authority cannot be gone into by the court as it does not sit in appeal over the sanction order.
(f) If the sanctioning authority has perused all the materials placed before him and some of them have not been proved that would not vitiate the order of sanction.
(g) The order of sanction is a pre-requisite as it is intended to provide a safeguard to public servant against frivolous and vexatious litigants, but simultaneously an order of sanction should not be construed in a pedantic manner and there should not be a hyper-
technical approach to test its validity. Therefore, in view of the principles of law laid down by the Apex Court of India and the object of the sanction order, I would like to discuss further.
21. It is the case of the prosecution that accused have committed offences as alleged in the charge sheet and in this regard, as accused No.1 to 6 being the public servants, accused No.1 to 3 retired by the time charge sheet is filed. Accused No.4 to 6 were in service as such 55 Spl.C.C.No.183/2000 J the prosecution has taken sanction order against the accused No.4 to 6 to prosecute against them. In this regard, the PW.43 the sanction authority i.e., Sri. Sridhar Shetty, General Manager, Personnel Department at Head Office, Vijaya Bank, Bengaluru has issued sanction order as per Ex.P.44 and 45 against accused No.5 and 6 dated 22.12.2000 and so also PW.64 Michael Bastin, Executive Director of Vijaya Bank has issued a sanction order against accused No.4 R.S. Narayanan to prosecute against him as per EX.P.82 the sanction order dated 22- 12-2000. It is argued by the learned Public Prosecutor that the said authorities have issued sanction order in accordance with law. Further, it is also argued and demonstrate that as per the Ex.P.44, 45 and P82, it goes to show that the said sanctioning authority have applied their mind and have scrutinized the documents submitted by the prosecution at time of according sanction. As such, the sanction order issued by the sanctioning authority is in accordance with law. 56 Spl.C.C.No.183/2000 J
22. On the contrary, the learned advocate for accused No.4 to 6 argued that the sanctioning authorities have not applied their mind at the time of issue of the sanction orders. The said sanction orders were not in accordance with law. The sanctioning authorities in order to help the prosecution have issued the sanction orders without complying and without considering the documents on record and earlier documents in respect of the above said accused. In this regard, it is admitted fact that PW.43 Sridhar Shetty while working as General Manager, Personnel Department, Head Office, Vijaya Bank, Bengaluru has issued a sanction order as per Ex.P.44 and 45. Further, the said witness also admits during cross-examination that disciplinary enquiry was held against 12 officials of the Vijaya Bank. It is also admitted fact that an internal inspection conducted by the bank headed by Sri.Sripathi Rao, Asst. General Manager, Vijaya Bank and the said Sri.Sripathi Rao has submitted report dated 9.12.1992 as per Ex.D12. The 57 Spl.C.C.No.183/2000 J report submitted by Sri.Sripathi Rao, it is observed as under:
"In view of the facts narrated above, and as discussed in the tabular format, the investigation could not establish any staff lapses in complying with the directions of the Board from time to time over a period of 1 year or so."
23. Further, PW.43, even though initially he deposed that he do not remember whether there is another investigation report submitted by CW-39, 57 and
59. However, during the further cross-examination he admits that the accused No.4 to 6 were subjected to Disciplinary Enquiry held by the Central Vigilance Commission. Further, he admits during cross- examination that as per the report submitted by the Central Vigilance Commission as per Ex.P.D4 dated 24.5.1999, the accused No.5 has been exonerated by the said Departmental Enquiry. He also further admits that as per another report submitted by the Central Vigilance Commission as per Ex.D.6 dated 22.9.1998 the accused No.6 also exonerated by the said Departmental Enquiry. 58 Spl.C.C.No.183/2000 J He admits Ex.D4 and D6 are the said enquiry reports submitted by the CVC. Further, admittedly in the present case on hand, the PW.40 Banarasi Das Kakkar has filed a complaint as per Ex.P.42. During the cross- examination, PW.40 has admitted in page No.16 at para- 24 of his evidence as under: -
"It is true the document now shown to me is the internal investigation report dt: 9.10.1992 submitted by M.V. Srinivas Rao, Senior Manager and Sri. A. Sripathi Rao, Assistant General Manager by the Inspection Department. It is marked as Ex.D12. It is true; it is reported in internal inspection report, that there are no staff lapses in following the instructions of the board. It is true the CVC conducted Departmental Enquiry against 12 officers including A-4, A-5 and A-6 of the bank based on this internal inspection report. It is true, 7 Officers were exonerated by CVC and A-4, 5 and 6 are the officers who have been exonerated by the CVC. It is true, the charges faced by the officers in the Departmental Enquiry and the charges now the A-4 to 6 are facing are the same. It is true; the exoneration by CVC has been accepted by the disciplinary authority as per the documents marked at Ex.D3 to Ex.D7".
Further, he admits that:
"It is true, there are no allegations against accused No.4 to 6 in my complaint."59 Spl.C.C.No.183/2000 J
Therefore, as per the evidence of PW.40 complainant, it goes to show that even prior to filing of the complaint there was an internal investigation conducted by the bank as per the Ex.P.89. It is also admitted by PW.40 complainant that he has also referred copy of the said Internal Investigation Report as per Ex.P.89 to the CVC to conduct the enquiry. Further, this witness has already admitted as referred above, in the said enquiry out of the 12 officers, 7 officers have been exonerated including accused No.4 to 6.
Further, PW.43 who has issued sanction against accused No.5 and 6 in his cross-examination at page No.5 admits at para-6 that:
"It is true my sanction order does not reveal what are the documents placed before me for perusal."
Further, he admits in the same paragraph that:
"The sanction order was prepared by the Department and I have gone through it and signed."
Further, in the same paragraph he tried to give an evasive answer during the cross-examination that: 60 Spl.C.C.No.183/2000 J
"I do not remember whether the materials submitted by CBI seeking my sanction included the internal inspection report and the report of CVC".
Here, even though this witness deposed that he do not remember whether the internal investigation report as per Ex.P.89 and the report submitted by CVC were not been placed before him. As per the evidence of P.W.40 he admitted that he has also submitted internal investigation report (Ex.P.89) to the CBI. Therefore, it indirectly goes to show that the PW-43 must have also aware of the internal investigation report (Ex.P.89) submitted to the CBI. Further, another sanctioning authority i.e., PW.64 Sri. Michael Bastian who has issued a sanction order against the accused No.4 as per Ex.P.82 has deposed that as an Executive Director of Vijaya Bank and Disciplinary Authority he has issued sanction order against the accused No.4. During cross-examination, he admits at page No.3 in the beginning lines:
"I am aware that the internal investigation report (Ex.P.89) was submitted in the year 1993. On the basis of the internal investigation report, a charge sheet was filed on 30th May 61 Spl.C.C.No.183/2000 J 1997 for a domestic enquiry against accused No.4 containing 7 articles of charge."
Further, at para-4 of his cross-examination he admits that:
"After going through the articles of charge and the sanction order, the witness stated that substratum of both the charges are same. It is true to suggest that the Departmental Inquiry was conducted by the Commissioner, Departmental Inquiry, Central Vigilance Cell. It is true to suggest that in the Departmental inquiry, none of the articles of charge framed against accused No.4 had been proved."
Further, he admits that:
"It is true to suggest that accused No.4 has been exonerated in the Departmental Inquiry."
Therefore, PW.64 the sanctioning authority was also aware of the fact that before issue of the sanction order as per Ex.P.82 against the accused No.4, he was aware of the fact that accused No.4 was exonerated by the Departmental Enquiry held by the Central Vigilance Commission. Therefore, ongoing through the evidence of PW.43 and PW.64, the sanctioning authority who have issued sanction order goes to show that they were having the knowledge that the accused No.4 to 6 were 62 Spl.C.C.No.183/2000 J exonerated by the Departmental Enquiry reported by the Central Vigilance Commission prior to issue of sanction order against accused No.4 to 6. Further, they were also aware of the fact that the Disciplinary authority as per Ex.D3, D5 and D7 has accepted the said enquiry report. As such the said findings reached finality. Further, these two witnesses have admitted during the course cross- examination even including PW.40 Sri. Banarasi Das Kakkar that Articles of charges framed against accused No.4 to 6 in the said Departmental Enquiry held by the Central Vigilance Commission are the same as regards the charges leveled against accused No.4 to 6 in the present case on hand filed by the CBI. Therefore, when the articles of charge faced by the Accused No.4 to 6 are the same with regard to charges made out by the CBI against the accused in the present case are the same. Admittedly, the said accused were already exonerated, and the said findings are accepted by the department. More particularly the PW.43 and PW.64, the sanctioning authorities were aware of these facts, they have not 63 Spl.C.C.No.183/2000 J mentioned about the said Departmental enquiry reports, acceptance of the said reports, in their sanction order. Further PW.43.Sri.Sridhar Shetty has singed Ex.D.5 letter issued by disciplinary Authority in respect of acceptance of report of CVC report dated 31-5-1997. Thereby PW43 cannot deny the fact that accused no.5 has been exonerated in said departmental enquiry. Further, PW.64 during cross-examination at page No.3 last line admits that "The Vigilance Department has prepared the sanction order. I have questioned the Vigilance Department. As accused No.4 has been exonerated in the Departmental Enquiry..." This goes to show that PW.64 Michael Bastin had idea in his mind that when the accused No.4 has already exonerated in the Departmental Enquiry, there is no need to issue sanction to prosecute against accused No.4, once again in respect of the same charges. This goes to show that PW.64 Michael Bastin must not have applied his mind at the time of issue of sanction order as per 64 Spl.C.C.No.183/2000 J Ex.P.82. Further, he during the cross-examination at page No.4, para-5 admits that "I do not remember whether the exoneration report given by the Departmental Inquiry., of CVC report, recommended by the CVC and acceptance by the Disciplinary authority of the Vijay bank were placed before me or not at the time of sanction. If at all the accused No.4 was exonerated by the bank by accepting the exoneration report, the bank would not have proceeded against accused No.4."
Therefore, as per his opinion expressed at para-5 of his cross-examination PW.64 admits that had the prosecution has placed before him the internal investigation report, the report of the CVC and acceptance of the said report by the sanctioning authority he could not have issued sanction against accused No.4. As discussed earlier, PW.64 was aware that accused No.4 was exonerated in the Departmental Enquiry. Therefore, it goes to show that the sanctioning authority i.e., PW.64 has not applied his proper mind before issue of the sanction order. In this regard, at this stage, I would like to rely upon the judgment reported in 65 Spl.C.C.No.183/2000 J AIR 2014 SC Page No.827 in CBI vs. Ashok Kumar Agarwal wherein their Lordships have held as under: -
(A) Prevention of Corruption Act (49 of 1988), S.19 - Criminal P.C. (2 of 1974), S. 197 - Sanction to prosecute - Grant of -
Sanctioning authority has to do complete and conscious scrutiny of whole record placed before it - Sanction order should to show that authority has considered all relevant facts and applied its mind - Prosecution is under obligation to place entire record before sanctioning authority and satisfy Court that authority has applied its mind.
Sanction lifts the bar for prosecution. Therefore, it is not an acrimonious exercise but a solemn and sacrosanct act, which affords protection to the Government servant against frivolous prosecution. Further, it is a weapon to discourage vexatious prosecution and is a safeguard for the innocent, though not a shield for the guilty. There is an obligation on the sanctioning authority to discharge its duty to give or withhold sanction only after having full knowledge of the material facts of the case. The prosecution must therefore send the entire relevant record to the sanctioning authority including the FIR, disclosure statements, statements of witnesses, recovery memos; draft charge-sheet and all other relevant material. The record so sent should also contain the material/document, if any, which may tilt the balance in favour of the accused and on the basis of which, the competent authority may refuse sanction. The authority itself has to do complete and conscious scrutiny of the whole record so produced by the prosecution 66 Spl.C.C.No.183/2000 J independently applying its mind and taking into consideration all the relevant facts before grant of sanction while discharging its duty to give or withhold the sanction. The power to grant sanction is to be exercised strictly keeping in mind the public interest and the protection available to the accused against whom the sanction is sought. The order of sanction should make it evident that the authority had been aware of all relevant facts/ materials and had applied its mind to all the relevant material. In every individual case, the prosecution has to establish and satisfy the Court by leading evidence that the entire relevant facts had been placed before the sanctioning authority and the authority had applied its mind on the same and that the sanction had been granted in accordance with law."
In view of the above findings of the Hon'ble Supreme Court of India, the sanctioning authorities have to apply their mind before issue of sanction order. Further, on perusal of the evidence of the PW.43 it is surprising to note that even though he is aware of the exoneration of the accused No.5 and 6 as per the report submitted by the CVC and it is also admitted fact that PW.43 Sridhar Shetty has signed Ex.D5 the letter of communication to the accused No.5 of his exoneration and acceptance of the said enquiry report submitted by the CVC. It 67 Spl.C.C.No.183/2000 J presupposes the fact that the PW.43 Sridhar Shetty was aware of the fact that accused No.5 exonerate in his departmental enquiry by the CVC and he himself has communicated the acceptance of said report to the accused, thereby it goes to show that this sanctioning authority i.e., PW.43 who was aware of the fact that the articles of charge framed against accused No.5 and the charges made out by the CBI against accused No.5 are the same, as such once again he should not have issued sanction order to prosecute against accused No.5. Therefore, prosecution has failed to prove that PW.43 has applied his mind before issue of sanction order against accused No.5. So this witness was also aware of the fact that the CVC has also submitted enquiry report against accused No.6 as per Ex.D6, wherein accused No.6 has been exonerated in the said Departmental Enquiry and the said report has been accepted by the disciplinary authority. Therefore, on going through the evidence of PW.43 and 64, it goes to show that both the sanctioning authorities were aware of the fact that the accused No.4 68 Spl.C.C.No.183/2000 J to 6 were exonerated in the Departmental Inquiry and the said report has been accepted by the disciplinary authority. As such at the cost of repetition I held that both the sanctioning authorities were aware that the charges leveled against accused No.4 to 6 in the present charge sheet submitted by the CBI and the articles of charge framed by accused No.4 to 6 in the departmental enquiry are the same. Further, PW.64 has admitted that he would not have issued the sanction, in view of the said CVC report and its acceptance of the said report by disciplinary authority. In all by considering the overall evidence of PW.43, PW.64 read with Ex.D2 to D7 it goes to show that these sanctioning authorities without considering the exoneration order of the accused No.4 to 6 in Departmental Inquiry and acceptance of the said report by the Disciplinary authority have issued the sanction order without applying their mind. In view of the findings of the Hon'ble Supreme Court of India referred above, a public servant should be protected in discharging of his normal official duty. He should not be 69 Spl.C.C.No.183/2000 J unnecessarily made to prosecuted by the prosecution that when he is already been exonerated in the Departmental Inquiry. Further, ongoing through the Ex.P.44, the sanction order issued by Sri. Sridhar Shetty, it is stated that the said officer (accused) has served as a Chief Manager from 5.5.1986 to 20.10.1987. Whereas, the allegation has been made against the said officer, that he has conspired with the PJ Pipes & Vessels along with its Directors between 1986 to 1992 at Bombay and Bengaluru. In this regard, when the sanctioning authority were aware that the said officer has served up to 20.10.1987, then how could it be possible that he has said to have been committed offence of conspiracy from 1986 to 1992. Further, ongoing through Ex.P.45, the sanction order issued in respect of Sri. A.B.S. Shetty, who said to have been served as Asst. General Manager between 15.4.1991 to 30.6.1993. Further, ongoing through the allegations pleaded in the said Ex.P.45, it is alleged that the said accused has conspired with the PJ Pipes & Vessels Ltd., and it's Director from 1986 to 70 Spl.C.C.No.183/2000 J 1992. Here also, when the said Officer was not at all served from 1986 to 15.4.1991, it cannot be said that he has involved in the criminal conspiracy as alleged in the said document at Ex.P.45. So also, Ex.P.64, the sanction order issued in respect of R.S. Narayan, who said to have been served as a Chief Manager from 20.10.1987 to 14.4.1991. The allegations made against the said officer are that he has criminally conspired with the PJ Pipes & Vessels Ltd., along with its Directors for the period 1986 to 1992. Here also, when the said Officer is not said to been in service of the said post from 14.4.1991 to 1992, it cannot be said he has involved in the criminal conspiracy as alleged. On careful perusal of the first paragraph is said to be typed in the all three sanction orders i.e., Ex.P.44, 45 & Ex.P.82 appears to be stereographically typed. In other words, when the said officers were worked in different period, the allegations cannot be said to be for the same period against all the three officers. This itself goes to show that the sanctioning authority without application of proper mind 71 Spl.C.C.No.183/2000 J stereographically must have issued the sanction order as prayed by the CBI. Therefore, it goes to show that the said sanction authorities have not applied their mind and they have issued sanction order mechanically without considering the said reports.
24. Further, I would like to reproduce Chapter-III, Sec.8 and 12 of the Central Vigilance Commission Act, 2003: -
8. Functions and powers of Central Vigilance Commission: - (1) The functions and powers of the Commission shall be to: -
(a) exercise superintendence over the functioning of the Delhi Special Police Establishment insofar as it relates to the investigation of offences alleged to have been committed under the Prevention of Corruption Act, 1988 (49 of 1988), or an offence with which a public servant specified in sub-section (2) may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial;
(b) give directions to the Delhi Special Police Establishment for the purpose of discharging the responsibility entrusted to it under sub-
section (1) of Section 4 of the Delhi Special Police Establishment Act, 1946 (25 of 1946):
Section 12. Proceedings before Commission to be judicial proceedings: - The Commission shall be deemed to be a civil court 72 Spl.C.C.No.183/2000 J for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974) and every proceeding before the Commission shall be deemed to be a judicial proceeding within the meaning of Section 193 and 228 and for the purpose of Section 196 of the Indian Penal Code (45 of 1860).
Ongoing through the above provision of law, it can be seen that the functions of the CVC are having supervisory powers over the Delhi Special Police Establishment Unit. In other words, when the Delhi Special Police Establishment have filed a charge sheet in the present case on hand, and admittedly they were aware of the fact that earlier a disciplinary enquiry was held against accused No.4 to 6, the sanctioning authority has ignored the said findings of the departmental enquiry as per Ex.D4 to D7. Further, admittedly as per Sec.12 referred above of the proceedings before the Central Vigilance Commission are considered as judicial proceedings. Therefore, the findings given by the Central Vigilance Commission as per Ex.D3 to D7 are considered as judicial proceedings and as such the PW.43 and PW64 were given sanction order against the accused No.4 to 6 73 Spl.C.C.No.183/2000 J without considering the said findings of the CVC goes to show that they have not properly applied their mind. As such the sanction orders as per Ex.P.44, 45 and Ex.P.82 issued by P.W.43 and P.W.64 to prosecute Accused no.4 to 6 are not said to be in accordance with law. Hence, the cognizance taken against them cannot be said to in accordance with law .Therefore, accused no.4 to 6 entitled for acquittal even without going to consider merits of this case.
25. It is admitted fact that accused No.4 to 6 were exonerated in the Departmental Enquiry held against them. In this regard, the learned advocate for accused argued that when the accused No.4 to 6 have exonerated in the Departmental Inquiry more particularly the articles of charge leveled against the said accused in the Departmental Inquiry are the same with regard to the charges framed in the present case on hand. Therefore, the accused are entitled for acquittal without going into the merits of this case. In this regard, the learned advocate for accused relied upon the ruling report in 74 Spl.C.C.No.183/2000 J (1996) 9 SCC page-1 in P.S. Rajya vs. State of Bihar wherein their Lordships have held "Criminal Procedure Code, 1973 - S.482 - Quashing of complaint/FIR - Grounds -
Exoneration in departmental proceeding on identical charge - Charge of acquisition of assets disproportionate to income - Appellate exonerated in departmental proceedings in the light of report of the Central Vigilance Commission and concurred by the Union Public Service commission - Basis of criminal charge being valuation of the appellant's house which the CBI fixed at Rs.7,69,300 as against the earlier valuation by the Income Tax Department at Rs.4.67 lakhs - Both the reports given by the same engineers - Allegation of overwriting and alteration in subsequent report submitted by the CBI for which the appellant filing complaint under S. 340 Cr.P.C., for taking cognizance against officer concerned - Held, appellant's case falls in more than one head of guidelines laid down in Bhajan Lal vase for quashing of a complaint/FIR - Hence prosecution of the appellant under S. 5(2) read with S. 5(1)(e) of the Prevention of Corruption Act, 1947 is liable to be quashed - Conduct of the CBI deprecated
- Constitution of India, Arts. 136 and 226 - Prevention of Corruption Act, 1947, S.5(2) read with S. 5(1)(e)."
Further, it is brought to the notice of this court, the observation made by their Lordships in the said judgment wherein it is held that:
75 Spl.C.C.No.183/2000 J
"The standard of proof required to establish the guilt in a criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. In the instant case the charge in the departmental proceedings and in the criminal proceedings is one and the same. If the charge which is identical could not be established in a departmental proceedings and in view of the admitted discrepancies in the reports submitted by the valuers one wonders what is there further to proceed against the appellant in criminal proceedings."
Hence, it is argued by the Advocate for the Accused that accused No.4 to 6 are entitled for acquittal even without going for trial. Further, the learned advocate for accused has also fairly brought to the notice of this court the two more rulings reported in (2007)14 SCC 667 (by two Judges) in SPE & CBI, Andhra Pradesh vs. M. Krishna Mohan and another wherein it is held that:
"B. Criminal Trial - Exoneration in departmental proceedings - Whether would entitle accused to acquittal in criminal proceedings - Charge against Respondent 2, Field Officer on probation of Gramin Bank, of conspiring with Respondent 1 Manager of the Bank by preparing appraisal report on the basis of which Respondent 1 sanctioned crop loans in the names of fictitious persons and misappropriated the loan amount - Plea of Respondent 2 that since in departmental 76 Spl.C.C.No.183/2000 J enquiry held against him, he was exonerated, he would be entitled to acquittal in the criminal proceedings on that ground - But according to Investigating Officer the departmental enquiry was initiated before commencement of investigation - Held, plea of exoneration in departmental proceedings having been raised by way of defence, Respondent 2 was obliged to bring on record all the relevant documents relating to departmental proceedings - Enquiry officer in departmental proceedings could not get benefit of all the materials considered by IO
- Hence exoneration in departmental proceedings - Penal Code, 1860 - Ss. 409, 420, 467, 477-A r/w S. 120-B - Prevention of Corruption Act, 1947 - S. 5(2) proviso - Service Law - Departmental enquiry - Criminal proceedings."
Another judgment reported (2012)9 SCC 685 (by three Judges) in State (NCT of Delhi) vs. Ajay Kumar Tyagi, wherein their Lordships have held:
"B. Service Law - Departmental Enquiry - Enquiry officer's report - Not final and decisive
- Disciplinary authority entitled to take a different view and punish delinquent if found guilty - After enquiry officer's report exonerating delinquent, disciplinary proceeding kept in abeyance without disciplinary authority taking any decision till criminal proceedings were pending based on same charge as involved in disciplinary proceeding - Held, High Court erred in quashing criminal proceedings on premise that accused delinquent had been exonerated in departmental proceeding, as he could still have been punished by disciplinary authority -77 Spl.C.C.No.183/2000 J
Criminal Procedure Code, 1973 - S.482 - Constitution of India, Art.226."
Therefore, Advocate for the accused argued that even though in the said two judgments of Hon'ble Supreme Court of India, their Lordships have deviated from the earlier judgment, their Lordships have not considered the judgment of P.S. Rajya vs. State of Bihar in the said judgments. Therefore, the later judgments cannot be made applicable to the present case on hand. Further Advocate for the Accused relied upon ruling reported in 2011 Crl.L.J. 1747 Supreme Court in Radheshyam Kejriwal vs. State of West Bengal and another. Hence, it is argued that accused no.4 to 6 are entitled for acquittal.
26. In this regard, as already discussed in the above said paragraphs even the PW.40, PW.43, PW.64, PW.65 have admitted the fact that the articles of charge framed against the accused No.4 to 6 in the Departmental Inquiry are the same in comparing with the charges framed in the present case on hand. Further, 78 Spl.C.C.No.183/2000 J even though the Hon'ble Supreme Court of India in the judgment of 1996 supra i.e., P.S. Rajya vs. State of Bihar have opined that the accused who have been exonerated in the Departmental Inquiry are entitled for acquittal in the criminal case, but in the later judgment of the Hon'ble Supreme Court of India their Lordships have taken a different view. Further, admittedly in the later judgment also their Lordships have considered the fact that the standard of proof required to establish the guilt in criminal case is far higher than the standard of proof required to establish the guilt in the departmental proceedings. The Lordships in the later judgment of 2007 SCC have opined that when the Investigating Officer collected expert opinion and has considered the other materials. Under such circumstances, the accused should not be given the benefit of acquittal merely on the fact that the accused are exonerated in the Departmental Enquiry. Therefore, on going through the judgment of the Supreme Court 2007 and 2012 referred above wherein their Lordships have not considered the findings 79 Spl.C.C.No.183/2000 J as referred P.S.Rajays case referred above. It is well settled principle of jurisprudence that findings of the latest judgment should be considered. Further, in the ruling reported 2011 Crl. L.J. 1747 Supreme Court (supra), it is the case of three judges of Supreme Court i.e., Hon'ble Justice H.S. Bedi, Justice P. Sathasivam and Justice Chandramauli KR. Prasad. In the said judgment, the Hon'ble Judges of Supreme Court differ in their views. The majority view is taken by Justice Harjith Singh Bedi and Justice Chandramauli KR. Prasad and the minority view is by Justice P. Sathasivam. The learned advocate for the accused relied upon the findings given in the said judgment. In this regard, admittedly, Justice P. Sathashivam has differed his opinion with the opinion of other two judges. The view taken by the majority judges is in favour of accused, But their Lordship have not laid any ratio on the said point. Hence, I am of the considered opinion that the accused No.4 to 6 are not entitled for an acquittal without going into the merits of this case merely on the ground that 80 Spl.C.C.No.183/2000 J they have been exonerated in the departmental enquiry held against them.
27. In view of the above discussions, the prosecution has failed to prove that the sanctioning authority i.e., PW.43 and PW.64 have applied their mind at the time of issue of sanction order as require in accordance with law. The prosecution also failed to prove that the PW.43 and 64 have properly scrutinized the documents furnished to them. Further, the prosecution has also failed to prove that PW.43 and PW.64 the sanctioning authorities have considered the fact that the accused No.4 to 6 against whom the departmental enquiry was held in respect of the same charges as they are in the present charge sheet. Further, the said sanctioning authority has also failed to consider that the accused No.4 to 6 have exonerated in the departmental enquiry even then without mentioning or considering the above said fact and without proper appreciating the said facts, the PW.43 and 64 without proper application of mind issued sanction orders against the accused No.4 to 81 Spl.C.C.No.183/2000 J 6 being public servants. Therefore, in view of the judgment and principles of law that have been discussed above, I am of the considered opinion that the prosecution has failed to prove that PW.43 and 64 have issued sanction order in accordance with law. Further, the accused No.4 to 6 have failed to prove that they are entitled for acquittal without going into the merits of the case as they have been exonerated in the departmental enquiry. Accordingly I answer Point No.4 and 5 in the Negative.
28. POINT No.6 TO 9: Without prejudice to my findings and opinion on the above said points, I would like to discuss the fact of this case on merits against the accused No.1 to 6 and 8 to 10. Further, in order to avoid repetition of facts and question of law point no.6 to 9 are taken together for discussion.
29. Before going to discuss the merits of this case, I would like to discuss the fact that the prosecution has failed to secure and produce the some valid documents as required under law in order to prove their case. It is 82 Spl.C.C.No.183/2000 J well settled principle of law that in order to prove any facts, the primary documents have to be produced. All the facts except the contents of the documents may be proved by oral evidence. Further, the oral evidence must be in all the cases be direct. The well settled principle of law that as per Evidence Act documents must be proved by primary evidence except in cases mentioned in Sec.65 of the Evidence Act.
65. Cases which secondary evidence relating to documents may be given: -
Secondary evidence may be given of the existence, condition or contents of a document in the following cases: -
(a) when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved, or of any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it,
(b) When the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;
(c) when the original has been destroyed or lost, or when the party offering evidence of its contents cannot, for any other reason not arising from his own default or neglect, produce it in reasonable time;
(d) when the original is of such a nature as not to be easily movable;83 Spl.C.C.No.183/2000 J
(e) when the original is a public document within the meaning of Section 74;
(f) when the original is a document of which a certified copy is permitted by this Act, or by any other law in force in [India], to be given in evidence;
(g) When the originals consist of numerous accounts or other documents which cannot conveniently be examined in Court, and the fact to be proved is the general result of the whole collection.
In cases (a), (c) and (d), any secondary evidence of the contents of the document is admissible.
In case (b), the written admission is admissible.
In case (e) or (f), a certified copy of the document, but no other kind of secondary evidence, is admissible.
In case (g), evidence may be given as to the general result of the documents by any person who has examined them, and who is skilled in the examination of such documents.
In this regard, I would like to reproduce the provision of law in respect of Sec.65-A, 65-B of the Evidence Act which reads as under: -
65-A. Special provisions as to evidence relating to electronic record: - The contents of electronic records may be proved in accordance with the provisions of Section 65-B. 65-B. Admissibility of electronic records:
- (1) Notwithstanding anything contained in this Act, any information contained in an electronic record which is printed on a paper, stored, 84 Spl.C.C.No.183/2000 J recorded or copies in optical or magnetic media produced by a computer (hereinafter referred to as the computer output) shall be deemed to be also a document, if the conditions mentioned in this section are satisfied in relation to the information and computer in question and shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible.
Further, I would like to reproduce some of the provisons of Bankers' Books Evidence Act, 1891;
Section 2(8) "certified copy" means when the books of a bank: -
(a) are maintained in written form, a copy of any entry in such books together with a certificate written at the foot of such copy that it is a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business and that such book is still in the custody of the bank, and where the copy was obtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the bank's business after the date on which the copy had been so prepared, a further certificate to that effect, each such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title; and
(b) consist of printouts of data stored in a floppy, disc, tape or any other electro-magnetic 85 Spl.C.C.No.183/2000 J data storage device, a printout of such entry or a copy of such printout together with such statements certified in accordance with the provisions of section 2-A;
(c) a printout of any entry in the books of a bank stored in a micro film, magnetic tape or in any other form of mechanical or electronic data retrieval mechanism obtained by a mechanical or other process which in itself ensures the accuracy of such printout as a copy of such entry and such printout contains the certificate in accordance with the provisions of section 2-A. 2-A. Conditions in the printout: - A printout of entry or a copy of printout referred to in sub-section (8) of section 2 shall be accompanied by the following, namely: -
(a) a certificate to the effect that it is a printout of such entry or a copy of such printout by the principal accountant or branch manager; and
(b) a certificate by a person in-charge of computer system containing a brief description of the computer system and the particulars of - (A) the safeguards adopted by the system to ensure that data is entered or any other operation performed only by authorized persons;
(B) the safeguards adopted to prevent and detect unauthorized change of data; (C) the safeguards available to retrieve data that is lost due to systemic failure or any other reasons;
(D) the manner in which data is transferred from the system to removable media like floppies, discs, tapes or other electro-magnetic data storage devices;86 Spl.C.C.No.183/2000 J
(E) the mode of verification in order to ensure that data has been accurately transferred to such removable media;
(F) the mode of identification of such data storage devices;
(G) the arrangements for the storage and custody of such storage devices; (H) the safeguards to prevent and detect any tampering with the system; and (I) any other factors which will vouch for the integrity and accuracy of the system.
(c) a further certificate from the person in-
charge of the computer system to the effect that to the best of his knowledge and belief, such computer system operated properly at the material time, he was provided with all the relevant data and the printout in question represents correctly, or is appropriately derived from, the relevant data.]
3. Power to extend provisions of Act: -
The State Government may, from time to time, by notification in the Official Gazette, extend the provisions of this Act to the books of any partnership or individual carrying on business of bankers within the territories under its administration, and keeping a set of not less than three ordinary account-books, namely, a cash-book, a day-book or journal, and a ledger, and may in like manner rescind any such notification.
4. Mode of proof of entries in bankers' books: - Subject to the provisions of this Act, a certified copy of any entry in a bankers' book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same 87 Spl.C.C.No.183/2000 J extent as, the original entry itself is now by law admissible, but not further or otherwise. Further, at this stage, I would also reproduce Sec.3(2) of Indian Evidence Act "Proved": - A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
"Disproved": - A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.
"Not proved": - A fact is said not to be proved when it is neither proved nor disproved.
30. The prosecution has produced following Xerox copies of the documents without attestation or without certification as required under law, in respect of which I would like to narrate as under: -
Sl. Exhibit Description of the documents Remarks No. No.
1. Ex.P.4 Xerox copy of the plaint filed Xerox copy before the Hon'ble High Court is not of Mumbai by Vijaya Bank and attested or Indian Bank against M/s. P.J. certified as Pipes & Vessels Pvt., Ltd., for required recovery of dues. under law.88 Spl.C.C.No.183/2000 J
2. Ex.P.9 Xerox copy of Memorandum Purely for Board of Directors Xerox copy is not attested or certified as required under law.
3. Ex.P11 Xerox copy of the office Xerox copy memorandum dt. 28.2.1994 is not issued from the Ministry of attested or Petroleum & Natural Gases, certified as Under Secretary to the Govt. of required India. under law.
4. Ex.P12 Xerox copies of statement All the 37 showing payments made by sheets are ONGC to M/s. P.J. Pipes purely against order dt. 21.3.1989 Xerox containing 37 sheets copies.
5. Ex.P20 Xerox copy of the All the Memorandum of Board of documents Directors dt. 29.10.90 and including copy of the resolution of the 18 sheets board meeting held on are Xerox 30.10.1990 containing 18 copies not sheets. attested by the competent authority.
6. Ex.P23 Xerox copy of the loan All the 6 application filed by the P.J. sheets are Pipes & Vessels Pvt., Ltd., dt. Xerox 10.3.1987 submitted to Chief/ copies are Branch Manager, Excelsior not attested Branch, Mumbai containing 6 by the 89 Spl.C.C.No.183/2000 J sheets. competent authority.
7. Ex.P28 Xerox copy of the office note All the 2 dated 18.7.1987 containing 2 sheets are sheets. Xerox copies are not attested by the competent authority.
8. Ex.P37 Xerox copy of the minutes of All the 4 meeting held on 30.6.1992 sheets are with regard to the account of Xerox M/s. P.J. Pipes & Vessels Pvt., copies are Ltd., Excelsior Branch not attested containing 4 sheets. by the competent authority.
9. Ex.P52 Xerox copy of the letter dated Both the 18.11.1990 issued by the sheets are Controller of Imports & not attested Exports Joint/Controller of and purely Imports & Exports and xerox Industries of Commerce, Govt. copies.
of India in respect of reduction bond containing two sheets.
10. Ex.P54 Xerox copy of the letter dt. One sheet is 11.12.1990 issued by the not attested Controller of Imports & and purely Exports, Ministry of Commerce xerox copy. Govt. of India containing one sheet.
11. Ex.P61 Xerox copy of the Debit Note -do-
dt. 20.12.1991 for Rs.30 lakhs 90 Spl.C.C.No.183/2000 J issued to P.J. Pipes & Vessels Ltd., in the letter head of Hindustan Agro Chemicals Ltd., containing one sheet.
12. Ex.P62 Xerox copy of the All the 3 Memorandum of sheets are Understanding between P.J. not attested Pipes & Vessels Ltd., Bombay and purely and Hindustan Agro xerox Chemicals Ltd., Bombay copies.
containing 3 sheets.
13. Ex.P67 Copy of the letter dt. 20.12.94 All the 4 of M/s. P.J. Pipes & Vessels sheets are Ltd., issued in favour of the not attested Deputy Commissioner of and purely Income Tax, Bombay Xerox containing 4 sheets of Xerox copies.
copies.
14. Ex.P69 Xerox copy of the letter dt. All the 9 13.4.1987 issued by the P.J. sheets are Pipes & Vessels Ltd., in favour not attested of Chief Manager, Vijaya Bank, and purely Excelsior Branch, Mumbai Xerox along with annexure copies.
containing 9 sheets.
15. Ex.P76 Xerox copy of the reply letter One sheet is dt. 15.7.1988 issued by the not attested Credit Agrocole Indosuez and purely Mumbai Branch in favour of Xerox copy.
the Chief Manager, Vijaya Bank, Excelsior Branch, Mumbai containing one sheet.
16. Ex.P80 Copy of the Appraisal Note dt. All the 10 6.2.1989 of Vijaya Bank, Zonal sheets are 91 Spl.C.C.No.183/2000 J office, Mumbai in respect of not attested M/s. P.J. Pipes & Vessels Pvt., and purely Ltd., containing 10 sheets. Xerox copies.
17. Ex.P81 Copy of the Appraisal Note All the 7 dated 9.9.1987 of Vijaya Bank, sheets are Zonal Office, Mumbai in not attested respect of M/s. P.J. Pipes & and purely Vessels Pvt., Ltd., containing 7 xerox sheets copies.
18. Ex.P88 Xerox copy of the One sheet is Memorandum of Board of not attested Directors dt. 1.8.1992 of and purely Vijaya Bank, Head Office, Xerox copy.
Bengaluru containing one
sheet.
Secondary Evidence is admissible only in the absence of primary evidence, if it is complied with provisions of section 65 of evidence act. In order to enable a party to produce secondary evidence, it is necessary for the party to prove the existence and execution of the original documents. It is well settled principle of law that in case of civil proceedings if party admits and does not object to mark even the Xerox copy of the documents which are not properly attested and certified by competent authority such a document can be accepted and read in evidence. But in criminal proceedings even if the other 92 Spl.C.C.No.183/2000 J party has not objected to mark the documents during the evidence, it is the court shall have to consider the admissibility of such documents. If documents which are not attested by the competent authority or not certified as required under law and purely Xerox copies, such documents cannot be looked into and appreciated as having evidential value. In other words in a criminal case even if accused do not raise objections to mark the secondary evidence which is not properly attested or certified by the competent authority such documents cannot be considered and read in evidence. Therefore, in view of the above principle of law, I am of the considered opinion that in the present case on hand all the documents listed above are admittedly Xerox copies and not attested or certified by the competent authority as required under law. Therefore, they cannot be considered as secondary evidence as per Sec. 65 of the Evidence Act. Hence, these documents cannot be read in evidence and appreciated even if they were marked during the trial.
93 Spl.C.C.No.183/2000 J
31. Without prejudice to above my opinion and findings with regard to the above said documents, further I would like to discuss with regard to the evidential value of the other documents.
(i) Ex.P.42 is the original complaint on the basis of which the present FIR came to be registered. In this regard PW.40, the complainant, Sri. Banarasi Das Kakkar has deposed in the examination-in-chief itself at page No.2 beginning the line "On 23.12.1996 I have lodged complaint before the CBI, Bengaluru. In the meanwhile, I have submitted report to the CBI Vigilance Commission, New Delhi."
Further, this witness during the cross-examination at page No.11 at para-16 after three lines admits as under: -
"Now, I do not find in the annexures along with Ex.P.42. Witness volunteers he had submitted many annexures along with the complaint."
Further, during the further cross-examination at page No.15, PW.40 at the end of para-22 admits that "I have lodged complaint with approval from CMD."
94 Spl.C.C.No.183/2000 JTherefore, ongoing through the cross-examination of the PW.40, it goes to show that the PW.40 complainant must have filed the complaint along with its Annexures. Surprisingly for the best reasons known to the Investigating Officer, he has not produced the said Annexures along with the complaint. It is fatal to case of prosecution.
(ii) Further, Ex.P.68 the Analysis Report, it is a file containing analysis of the transactions in different accounts of M/s. P.J. Pipes and Vessels Pvt., Ltd., and associated/sister concern viz., M/s. P. Jayanthi Lal & Co., & Boiler Tubes Company. (evidential value of this document is also discussed at the time of discussing diveration of funds) In this regard, PW.38 V.K. Gopinath Nayar, Senior Manager and Credit, PW.39 K. Jagadish, Vigilance Department, Vijaya Bank, PW.59 Narasimhamurthy, Senior Manager, Credit Department has deposed to that effect.
95 Spl.C.C.No.183/2000 JPW.59 During the cross-examination admits in page No.9 at the end of the para-10 that "It is true to suggest that mainly we have analysed the debit and credit vouchers. It is true to suggest that Ex.P.68 do not contain the single debit vouchers scrutinized by us". Further, this witness admits at page No.10 two lines after para-13 that "We have made out list of transactions culled out from the said accounts to show that diversion of funds. It is true to suggest that the said list of transaction is not found in Ex.P.68." Further, this witness admits during cross-examination at page No.11 at the end of the para-14 that "It is true to suggest that Charge No.6 deposed by me in the examination in chief is not found enclosed to my report in the court". Therefore, on considering the cross-examination of this witness, it goes to show that the documents scrutinized by the PW.59 along with PW.38 and PW.39 i.e., debit vouchers and their notes prepared at the time of analyzing the accounts of P.J. Pipes are not produced, which should have been part and parcel of the Ex.P.68 Analysis Report. It goes to show that the prosecution in 96 Spl.C.C.No.183/2000 J order to suppress the material facts or for the best reasons known to them have not produced or failed to produce such documents along with Ex.P.68 Analysis Report. Therefore, the said documents Ex.P.68 Analysis Report cannot be said to be a complete document.
(iii) Ex.P.89 Internal Investigation Report, PW.65 G.R. Krishnan, the then Senior Inspector of the Branches from 1988 to 1994 in Vijaya Bank Head Office, Bengaluru has deposed that he along with team head by Ramachandra Rao consisting of Vittal P. Setty, T. Chandrashekaran, have investigated the loan account of P.J. Pipes & Vessels Pvt., Ltd., and prepared the said internal investigation report as per Ex.P.89. Admittedly, at the time of marking of the said document itself, it has brought to the notice of this court that the Ex.P.89 contains 135 pages, admittedly the page No.23 and 24 of the said document (one sheet) is purely Xerox copy. Therefore, when the said Ex.P.89 is said to have been containing page No.23 and 24 xerox copies, which is not properly attested or certified as required under law. More 97 Spl.C.C.No.183/2000 J particularly, as I have discussed in the above said paragraphs, the Xerox copy of the document cannot be considered as a secondary evidence as per Sec. 65 of the Evidence Act. As such page No.23 and 24 cannot be read in evidence and appreciated in accordance with law. Therefore, the said document at Ex.P.89 cannot be said to be a complete document. Therefore, Ex.P.89 the whole document cannot be said to be complete document.
(iv) Ex.P.72 a letter written by the P.J. Pipes & Vessels Pvt., Ltd., in favour of the Chief Manager, Vijaya Bank, Excelsior Branch, Bombay dated 11.6.1987. The said letter is not a complete one. In other words, only the first sheet of the said letter has been produced, the subsequent continuance of the said letter is not produced. Therefore, Ex.P.72 is incomplete document. Therefore, here also the prosecution has failed to explain as to why the continuation of the said letter as per Ex.P.72 is not forthcoming. Therefore, Ex.P.72 incomplete document cannot be read in evidence. 98 Spl.C.C.No.183/2000 J
32. Without prejudice to the above said my findings and opinion, I would like to discuss further. Admittedly the PW.40 Banarasi Das Kakkar, the Chief Vigilance Officer of Vijaya Bank has filed a complaint as per Ex.42 with specific allegation that there are fraud committed in the P.J. Pipes & Vessels Pvt., Ltd., by Directors in connivance with the CMD of the bank for the period 13.4.1987 to 30.6.1992. It is the specific case of the accused that earlier the same Banarasi Das Kakkar has filed complaint to the CBI on 4.8.1995 alleging irregularities in the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., at Excelsior Branch, Mumbai making allegation that the Directors of the P.J. Pipes & Vessels Pvt., Ltd., malafide intention of conducting the said accounts. For the best reason known to CBI or to the Vijaya Bank more particularly to the PW.40, the Chief Vigilance Officer, the said complaint was not registered and FIR was not drawn. There is a serious laps on the part of prosecution in not registering the said earliest compliant.
99 Spl.C.C.No.183/2000 J
(vi) There is no reason as to why the complaint lodged on 23.12.1996 making allegation with regard to the commission of the same offences by the officials of the bank including M/s. P.J. Pipes & Vessels Pvt., Ltd., restricted the period of the commission of the offence from 3.7.1987 to 30.6.1992 even though the said complaint is filed during 1996. Therefore, this also raises one of the doubts with regard to the malafide intention on the part of the complainant to involve the present accused in this case.
33. Further, in this case, by the time, the trial is concluded the Investigating Officer reported to be dead. As such the Investigating Officer has not been examined in the present case. Further, some important witnesses also were not examined due to death, or non-availability of the proper address of the said witness. Therefore, when the Investigating Officer and other important witnesses are not been examined, it is fatal to the case of the prosecution.
100 Spl.C.C.No.183/2000 J
34. Non-examination of the Investigating Officer resulted in following flaws (1) The accused have lost opportunity to elicit the irregularities, reason for non-securing of the important documents, laps of non-examination of the important documents, the contradictions, omissions of the witness through the Investigating Officer.
(2) Further, the accused also lost the opportunity to cross-examine the Investigating Officer in spite of the failure to secure the consolidated statutory internal auditor report, failed to consider the report of the Sri.Sripathi Rao as per Ex.D12 dated 9.10.1992, and reason for restricting charge sheet against the accused No.1 to 6 only leaving other persons who have been also charge sheeted in the internal investigation report as per Ex.P.89.
(3) Further, the accused also lost opportunity to cross-examine the Investigating Officer in respect of the fact that the Investigating Officer has restricting his investigation in respect of the irregularities, diversion of 101 Spl.C.C.No.183/2000 J funds and other irregularities in respect of the M/s. P.J. Pipes & Vessels Pvt., Ltd., for the period 3.7.1987 to 30.6.1992 only.
(4) Further, the accused have also lost opportunity to elicit the fact through the Investigating Officer about the fact as to why the subsequent Chairman and Managing Director of the Vijaya Bank Sri.B.B.Shetty has not been implanted as accused even though there were continuous transactions by the Vijaya Bank with the said M/s. P.J. Pipes & Vessels Pvt., Ltd., and in respect of lending loan such as extending letter of credit and other credit facilities.
(5) The accused has also lost opportunity to cross- examine and elicit the fact through Investigating Officer as to why he has not chosen to independently collect the evidence instead of merely relying and restricting his investigation only on the basis of Ex.P.68 Analysis Report and Ex.P.89 Internal Investigation Report.
(6) Further the accused have also last opportunity of cross-examine the Investigating Officer as to why he has 102 Spl.C.C.No.183/2000 J not considered the findings of departmental enquiry conducted by CVC and the fact that accused No.4 to 6 were exonerated in the said departmental enquiry.
(7) Further, the accused have also lost opportunity to cross-examine and elicit through the Investigating Officer that even though there is an allegation in the complaint that 141 foreign letters of credit were devolved but admittedly as per the evidence of the PW.1 only 21 foreign letters of credit amounting to Rs.46 Crores become over due. In other words even though the Investigating Officer has filed charge sheet in respect of the devolving of the 141 foreign letters of credit, as per the admitted fact by PW.1, only 21 foreign letters of credit were devolved. This fact has not been considered by I.O. So also the Investigating Officer has not considered Ex.P.16, 17, 23, 69 to 71.
(8) Further, the accused have also lost opportunity to cross-examine and elicit from the Investigating Officer with regard to the fact that the bridge loan of Rs.15 lakhs which was sanctioned in accordance with law by 103 Spl.C.C.No.183/2000 J following norms of the bank and which has been repaid with interest was not considered by him.
(9) Further, the accused have also lost opportunity to elicit the facts from the Investigating Officer with regard to the fact that many of the credits granted in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd., were approved by the board of Directors in their meeting or rectified by them in board meeting was not considered by him.
(10) Further, the accused have also lost opportunity to cross-examine and elicit from the Investigating Officer with regard to the fact that the failure of the M/s. P.J. Pipes & Vessels Pvt., Ltd., was due to the adverse interest fluctuations, change in the Government policy, delay in receipt of the import of the raw material, delay on the part of the ONGC in lifting the finished products and consolidate, getting of the cash flow and interest rate levied by the letters, leave to high financial cause and erosion of the security. 104 Spl.C.C.No.183/2000 J
(11) Further, the accused has also opportunity to cross-examine the Investigating Officer and elicit the fact that at the consortion meeting held at Madras, the decision to the extent Inland letter of credit facility and demand of custom duty was taken up for discussion and agreed also and the fact that the said decision was taken in the interest of Vijaya Bank.
(12) Further, the accused has also lost opportunity to cross-examine and elicit from the said witness the fact that the said M/s. P.J. Pipes & Vessels Pvt., Ltd., is a feasible and vital unit for lending loan as the Branch Office and Zonal Office had also of the same opinion.
(13) Further, admittedly, in the present case on hand, even though the prosecution has produced number of documents relating to the bank transaction of M/s. P.J. Pipes & Vessels Pvt., Ltd., copy of the agenda of the board meetings, copy of the resolutions. There is no any evidence to show that how the said documents produced by the prosecution have been secured by the Investigating Officer. There is no any seizure of the said 105 Spl.C.C.No.183/2000 J documents in accordance with law. Further, there is no any document to show that the said documents produced in this case are secured through the bank officials. In other words no witnesses have stated that they have handed over the documents as per the request of the Investigating Officer. Therefore, the accused have also lost opportunity to cross-examine and elicit the fact that how the Investigating Officer has secured all the documents produced in this case.
(14) The accused has also lost opportunity to cross- examine and elicit the fact that as to why the Investigating Officer has not produced the account statements of letter of credit, bridge loan, inland letter of credit, foreign letter of credit and other loan accounts of M/s. P.J. Pipes & Vessels Ltd.
(15) Further, the accused have also lost an opportunity to cross-examine and elicit the fact that why the Investigating Officer has not stated the details of each of the loan transaction, i.e. loss caused to the bank by the M/s. P.J. Pipes & Vessels in respect of bridge loan, 106 Spl.C.C.No.183/2000 J bank guarantee, term loan, overdraft facility, import LC and Inland LC.
(16) Further, the accused have also lost an opportunity to cross-examine and elicit that what is the exact amount of diversion of the loan transaction granted in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., as alleged.
(17) Further the accused have lost opportunity to cross examine and elicit how the investing officer has arrived the loss of Rs.29.35 crores caused to the bank by said illegal act of the accused.
(18) In charge it is alleged that accused have caused total loss of 29.35 crores. Further, accused have lost opportunity to cross examine and elicit exactly what amount of loss caused by each of the accused by alleged illegal act.
Therefore, in view of the above facts, the non- examination of the Investigating Officer is not only fatal to the case of the prosecution, the accused have also lost an opportunity to elicit the above said facts from the 107 Spl.C.C.No.183/2000 J Investigating Officer which could have been helped the accused to get favorable response in their favour.
35. Without prejudice to above, my opinion, I would like to discuss further. With regard to the evidential value of documentary and oral evidence produced by the prosecution to prove guilt of the accused.
36. It is the case of the prosecution that PW.40 Banarasi Das Kakkar, Chief Vigilance Officer of Vijaya Bank has lodged a complaint on 23.12.1996 as per Ex.P.42. In this regard, to make a clear about the allegation made by the complainant, I would like to appreciate the contents of the complaint with the evidence of the witness. The complainant has alleged in his complaint that "M/s. P.J. Pipes & Vessels Pvt., Ltd., was incorporated on 6.10.1982 with its registered office at 433, Vyapar Bhavan, 49, P D Mellow Road, Mumbai - 400009. It was promoted by its parent Company M/s. P. Jayanthilal and Co., Pvt. Ld., M/s. Boiler Tube Co., was its sister concern. M/s. P Jayanthilal and Co. Pvt., Ltd., and M/s. Boiler Tube Co., were enjoying large credit facilities with Union Bank of India, 108 Spl.C.C.No.183/2000 J Princes Street, Mumbai and Banque Indo Suez, Mumbai. During 1987 M/s. P.J. Pipes & Vessels Pvt., Ltd., set up threading, Welding and Bucking project at Taloja, Mumbai for importing pipes and after Threading, Welding, Casing etc., supplied them to ONGC/Oil India Ltd., etc., as per their requirements. The Directors of M/s. P.J. Pipes & Vessels Pvt. Ltd., are Sri. Bharath Jayanthilal Vora, Smt. Geetha Vora, and Sri. Yashpal Kumar."
Further, it is alleged in the complaint that:
"At the instigation of the Directors of M/s. P.J. Pipes & Vessels Pvt., Ltd., Maharashtra State Financial Corporation (MSFC), Mumbai addressed a letter dt. 13.4.87 to the General Manager, Vijaya Bank Bangalore informing that M/s. P.J. Pipes & Vessels Pvt., Ltd., proposed to engage in production of finished Casings and Tubings required for Oil & Gas exploration programmes and the end users of the products being ONGC/Oil India Ltd., MSFC wanted to know from our Bank whether our Bank was agreeable to consider in principle a term loan of Rs.35 lakhs to the company for the project. The estimated cost of the project was to the tune of Rs.160 lakhs consisting of Working capital of rs.50 lakhs, term loan from MSFC of Rs.55 lakhs, term loan from our Bank of Rs.50 lakhs, term loan from MSFC of Rs.55 lakhs, term loan from our Bank of Rs.35 lakhs and unsecured loan of Rs.20 lakhs. The General Manager of our Bank, Bangalore at that time was K. Sivarama Shetty. Sri K Sadananda Shetty, then Chairman & Managing Director of our Bank had approved in principle to grant Rs.35 lakhs as term loan and also need based working capital facility to M/s. P.J. Pipes & 109 Spl.C.C.No.183/2000 J Vessels Pvt., Ltd., and informed the same to MSFC vide our Bank letter dt. 6.5.87. The actions of the Chairman & Managing Director was purely based on the letter dt. 13.4.87 of MSFC, received at Head Office directly without any written application or letter from M/s. P.J. Pipes & Vessels Pvt., Ltd., or perusal of appraisal note prepared by MSFC in this regard. In other words, contrary to the laid down procedure, and practice of banking system that the borrowers should approach the concerned branch of the bank for getting credit facilities, the proposal of the captioned company was originated from HO of the bank and Sri. K. Sadananda Shetty agreed to grant the facilities to M/s. P.J. Pipes & Vessels Pvt., Ltd., directly."
37. Thereafter on reading the above said complaint, there is a specific allegation against accused No.1 and 2 only to the effect that on the basis of the letter issued by M/s. P.J. Pipes & Vessels Pvt., Ltd., MSFC., and accused No.1 has sanctioned directly a term loan of Rs.35 lakhs without following the due procedures of the Bank. In this regard, the learned advocate for accused No.1 vehemently argued that even though there is allegation against accused No.1 about the not following norms of the sanction of loan, the prosecution has not produced sufficient documents to prove the said fact. In 110 Spl.C.C.No.183/2000 J this regard, the learned advocate for accused No.1 brought to the notice of this court the evidence of the PW.12. PW.12 Sri.M. Balachandran, the then Chief Manager, Credit Operations, Vijaya Bank, Head Office, Bengaluru from 1986 to December 1991 has deposed in his examination in chief at page No.2, para-2 that:
"Now I see the letter dt: 13.04.1987 addressed to the Vijaya Bank by Maharastra State Financial Corporation requesting us to indicate whether we would be agreeable in principle to consider the term loan of Rs.35 lakhs on account of M/s. P.J. Pipes & Vessels Pvt., Ltd. The letter was brought to the bank by Mr. Yespal Kumar, Director of M/s. P.J. Pipes & Vessels Pvt., Ltd. The same is marked at Ex.P.15. Ex.P.15 and copy of the letter received from IDBI was handed over to me by our Chairman, Vijaya Bank Mr. Sadananda Shetty (A-1) with a direction to process the matter and put up to him for disposal."
By reading the above said evidence of the PW.12, it goes to show that on receipt of the letter from one of the Director of M/s. P.J. Pipes & Vessels Pvt., Ltd., as per Ex.P.16 accused No.1 Sadananda Shetty, Chairman of Vijaya Bank has put up note and directed to process the matter, thereby it goes to show that accused No.1 himself 111 Spl.C.C.No.183/2000 J has not taken suo moto any decision without following due process of the bank. Therefore, the allegation made by the complainant about the fact that the accused No.1 without following the due process as required by the bank procedures will gets falsified. Further, PW.40, the complainant during the course of cross-examination admits in page No.9, para-14 that:
"I am not aware what were the discussions between Directors of M/s. P.J. Pipes & Vessels Pvt., Ltd., and Officers of MSFC. I have not seen Ex.P.15 received by Vijaya Bank from MSFC. I have not seen Ex.P.15 received by Vijaya Bank from MSFC. I have not seen the notes put up by the Zonal Manager and Head Office after receipt of letter Ex.P.15 from MSFC."
In this regard, I would like to look into the contents of Ex.P.15 the letter addressed to the Manager, MSFC, to the General Manager, Vijaya Bank dated 13.4.1987. In the said letter, the Manager of MSFC., has specifically stated and requested to intimate Vijaya Bank, whether their bank is agreeable in principle term loan and also to term loan. Further whether the appraisal of the project scheme made by the Corporation would be acceptable by 112 Spl.C.C.No.183/2000 J the bank. Therefore, in the said letter Ex.P.15 it is a mere request letter written by the MSFC., to Vijaya Bank to considered in principle the grant of loan of Rs.35 lakhs. Further, PW.12 further deposed in his examination in chief itself at page No.2 para-3 that:
"As per the instructions of Chairman, I put up a note dt. 30.4.1987 and submitted the same to the Chairman (A1). Now I see the note put up by me and it is marked at Ex.P.16. I have put my signature as a Divisional Manager (Acting) and my signature is marked at Ex.P.16(a). I have mentioned in the note about the M/s. P.J. Pipes & Vessels Pvt., Ltd., their address, their directors, their bankers, about their projects, cost of the projects and indicated means of finance and what credit facility they need to put up their project and MSFC letter requesting us to indicate whether we will join hands with them and extent to the company a term loan under IDBI refinance scheme, the security ranking paripasu between two lenders."
Further, he has deposed that "I also indicated in my note that if this is acceptable, we may convey to MSFC that we are agreeable in principle to entertain the proposal subject to regular proposal by the company being submitted through proper channel and the said proposal being found support worthy by all concerned in the Bank.
The Chairman (A-1) agreed with my
recommendation."
113 Spl.C.C.No.183/2000 J
Thereafter, the PW.12 the Chief Manager of the Vijaya Bank, Bengaluru has specifically deposed in examination-in-chief itself that he has processed the said application to MSFC., in respect of the grant of loan to M/s. P.J. Pipes & Vessels Pvt., Ltd., and his recommendation was accepted by the accused No.1. Therefore, it goes to show that accused No.1 has not at his suo moto has granted the said loan without following the due procedures as required by the bank. Further, on perusal of Ex.P.16 the note for the Chairman & Managing Director prepared by PW.12 it fortify the fact that PW.12 has put up a note for recommendation for said term loan in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd. In other words, when PW.12 has specifically deposed that he has recommended and put up the note to the Chairman (A1) for sanction of the said loan. This itself goes to show that PW.12 has not made any allegations or made any case against accused No.1. In Ex.P.16, he has specifically stated in the remarks and recommendation clause of recommending the said loan.
114 Spl.C.C.No.183/2000 J
38. Further, PW.12 has deposed in page No.3, para-5 that: -
"Thereafter, by a letter dt: 06.05.1987, I communicated the decision to MSFC and marked the copy of that letter to the Branch Manager of Excelsior Branch and head of Zonal Office at Bombay. Now I see my letter and it is marked at Ex.P.17. My signature is marked at Ex.P.17(a)."
Thereby, this witness has deposed that he has communicated the decision to MSFC and marked the same to the Branch Manager, Excelsior Branch. In this regard, PW.12 does not make any allegation against accused No.1 thereby it fortifies the fact that the said proposal was processed through PW.12 in accordance with the banking norms.
39. Further, PW.14 Sri.Sridhar K. Shetty, the then Senior Manager, Vijaya Bank, Mumbai from 1994 to 1999 has deposed that the application dated 10.3.1987 marked as Ex.P.23, the said application proposal was prepared by him and sent the same to the Zonal Office, Mumbai. In this regard, I persuade Ex.P.23 the proposal made by PW.14. PW.14 has worked out the proposal by 115 Spl.C.C.No.183/2000 J pencil (appears to have made working notes) and thereafter he has submitted the fair copy to the Zonal Office. Therefore, the allegation made in the complaint as per Ex.P.42 that without submitting any application, the accused No.1 has sanctioned the said loan get falsified. Further, PW.40 during the cross-examination at page No.9, para-14 above two lines from the bottom admitted that:
"I have not seen the loan application marked at Ex.P.23 submitted by M/s. P.J. Pipes & Vessels Pvt., Ltd., for loan. I have not seen Ex.P.6, Ex.P.8, Ex.P.16 and Ex.P.17 before lodging the complaint. The prosecution document at Sl. No.17 now shown to me has not been seen by me before lodging complaint."
Thereby PW.40 the Chief Vigilance Officer, a responsible Officer should have been taken utmost care and caution and be vigilant before lodging the complaint appears to be not verified the required documents. As such in the complaint he specifically alleges that the accused No.1 without any application or letter from M/s. P.J. Pipes & Vessels Pvt., Ltd., or without any appraisal sanctioned the loan gets falsified by the above referred evidence. 116 Spl.C.C.No.183/2000 J Further, admittedly the Bridge loan of Rs.15 lakhs has been sanctioned by the Vijaya Bank. Admittedly the said loan was sanctioned in accordance with due process of the Bank and it is also repaid. In this regard, PW.12 during the cross-examination at page No.7, para-15 after about four lines has admitted that: -
"It is true to suggest that sanction of bridge loan was as per normal banking practice in the banking business. It is true to suggest that the bridge loan was promptly repaid within time by M/s. P.J. Pipes & Vessels Pvt., Ltd."
Further, it is also alleged in the said complaint that 144 Foreign Letters of Credit were devolved. In this regard, on perusal of the evidence of PW.1 Manjayya Shetty, the then Chief Manager in Vijaya Bank, Excelsior Branch, Mumbai from 1996 to 2000 who in examination-in-chief itself at page No.2, para No.3 that:
"M/s. P.J. Pipes & Vessels Pvt., Ltd., Mumbai had opened 144 foreign letters of credit, out of which 21 foreign letters of credit amount into 46 crores became over due. During the same period the said company had opened inland letters of credit, out of which an amount of Rs.6.60 crores becomes over due."117 Spl.C.C.No.183/2000 J
Therefore, even though there is an allegation in the complaint that 144 foreign letters of credit were devolved, by the evidence of PW.1 himself only 21 foreign letters of credit were devolved. Admittedly, the prosecution has not produced any document to show which are 21 foreign letters of credit were exactly devolved, when they were devolved, and whether they were devolved during the regime of accused No.2. In this regard, I would discuss further about those foreign letters of credit at the later part of this judgment. Further, even though the complainant has stated that bridge loan of Rs.15 lakhs has been sanctioned without following due process and appraisal note, the complainant or the Investigating Officer has not produced the statement of account of the said bridge loan of Rs.15 lakhs. Further, PW.5 Smt. Leela Menon, the then DGM, Vijaya Bank, head Office, Bengaluru from 1995 to 2002 has deposed in examination-in-chief at page No.2 that:
"Now, I see the Office Note dt: 30.06.1987 for sanction of Bridge Loan of Rs.15 lakhs in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., and the 118 Spl.C.C.No.183/2000 J same is now marked at Ex.P.5. The said loan was sanctioned by the then Chairman, Sadananda Shetty accused No.1. The Divisional Manager Sri. Maindan put up the note to the DGM, K.K. Shetty, then to the then GM, K. Shivarama Shetty and then to Chairman."
PW.5 in her cross-examination at page No.3 after three lines admitted that:
"It is true to suggest that the Bridge Loan was duly approved by the Credit Dept., in Head Office, Vijaya Bank after due appraisal. It is true to suggest that the Bridge Loan was finally sanctioned by the Chairman on 3.7.1987."
PW.6. Sri. J. Pandiyan, the then AGM, Credit Department, Vijaya Bank, Head Office from September 1996 to February 2002 has deposed in his examination in chief at para-2 that:
"The First facility was sanctioned in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., as a Bridge Loan of Rs.15 lakhs on 30.6.1987 by the Branch and approved by CMD on 2.7.1987. On the oral request of M/s. P.J. Pipes & Vessels Pvt., Ltd., the then Chairman-accused No.1 sanctioned the Bridge Loan. Now, I see Ex.P.5, the office note put up for sanction of Bridge Loan."
PW.17 K. Krishnappa Shetty, the then General Manager, Vijaya Bank, Head Office, Bengaluru from 1989 to 1992 119 Spl.C.C.No.183/2000 J and worked as DGM, in Head Office from 1984 to 1989 deposed in the examination-in-chief itself at page No.3 para-5 that:
"Now I see Ex.P.5, note for the Chairman and Managing Director in respect of the credit facilities to M/s. P.J. Pipes & Vessels Pvt., Ltd., and I have also signed as a DGM and my signature is marked as Ex.P.5(a). I identified the signature of Accused No.1 as Chairman and Managing Director and his signature is marked at Ex.P.5(b). I identified the note and signature of accused No.2 and note signature are marked at Ex.P.5(c)."
Further, PW.2 Sri. O.S. Ramamurthy, the then General Manager, Vijaya Bank, Central Accounts Department, H.O., Bengaluru from 1.2.1996 to 30.6.2001 and also served as Deputy General Manager, Credit Department, Vijaya Bank, H.O., Bengaluru from 26.7.1992 to 30.6.1995 has deposed during the cross-examination in page No.4 after about 4 lines at para-2 and admitted as under: -
"It is true that Bridge Loan of Rs.15 lakhs released by the accused No.6 was repaid by the borrower in the prescribed manner. I am not aware whether formal Chairman of Vijaya Bank Sri. M.S. Kapoor had written a letter to CBI to 120 Spl.C.C.No.183/2000 J drop the charge of bridge loan against accused No.6."
Admittedly the said Bridge loan was sanctioned in accordance with due process of the Bank and it is also repaid. In this regard, PW.12 during the cross- examination at page No.7, para-15 after about four lines has admitted that: -
"It is true to suggest that sanction of bridge loan was as per normal banking practice in the banking business. It is true to suggest that the bridge loan was promptly repaid within time by M/s. P.J. Pipes & Vessels Pvt., Ltd."
Further, on perusal of Ex.P.5 the note for the Chairman and Managing Director dated 30.6.1987 in respect of the credit facility to the M/s. P.J. Pipes & Vessels Pvt., Ltd., at Excelsior Branch, Bombay, it can be seen at page No.2 at para-2 that:
"Since MSFC has certified the viability of the unit which is advanced stage of implementation and also in view of the expected deposit of Rs.50 lakhs, we may approve the sanction loan of a Bridge loan of Rs.15.00 lakhs."
Further, the General Manager and Managing Director have also acknowledged by putting their signature in 121 Spl.C.C.No.183/2000 J sanctioning of the proposal. Thereby it goes to show that the accused No.1 and 2 and the bank officials have sanctioned the said bridge loan as they were expecting Rs.50 lakhs fixed deposed from M/s. P.J. Pipes & Vessels Pvt., Ltd., and therefore, it cannot be said the bridge loan was sanctioned without any security or guarantee as alleged by the Director.
40. Admittedly, as per the Ex.P.89 the Internal Investigation Report at page No.7 wherein the details of the credit limits/facility sanctioned, extended to the M/s. P.J. Pipes & Vessels Pvt., Ltd., from 1984 to 1992 are furnished. Ongoing through the said statement read with the evidence of PW.12 the then Manager, Credit Operation, Vijaya Bank, Head Office, Bengaluru the following information can be gathered. The bridge loan of Rs.15 lakhs.
Sanction Ref. No. Nature Amount (Rs. In
& date of sanctioned lakhs)
facility Remarks
Chairman's Bridge 15.00 (within C &
sanction No. Loan MDs
122 Spl.C.C.No.183/2000 J
278/87, dt. powers)
3.7.1987
41. Further, Ex.P.18 the Telex Message sent by the DGM, Bombay Zone, DGM, Domestic Credit Department, Bengaluru also goes to show that there was a request made by the M/s. P.J. Pipes & Vessels Pvt., Ltd., for release of Rs.15 lakhs of bridge loan. Therefore on going through the evidence referred above, it clearly goes to show that the bridge loan of Rs.15 lakhs was sanctioned by the accused No.1 through their officers in due process as required by the Banking Practice and the said loan of Rs.15 lakhs has been repaid thereby the prosecution has failed to make out a case against the accused that they have sanctioned the said bridge loan without any security or guarantee and without following the due process of banking practice as alleged.
42. Now, I would like to discuss about the Bank Guarantees and letter of credit sanctioned by the bank. Admittedly, even though there is an allegation that 144 Bank Guarantees are devolved but evidence of PW.1 123 Spl.C.C.No.183/2000 J himself goes to show that only 21 Foreign Letters of Credit were devolved as per Ex.P.83 note for the Chairman and Managing Director dated 29.2.1988, it goes to show that the Bank Guarantees were sanctioned by the board in respect of the following Bank guarantees in favour of the said M/s. P.J. Pipes & Vessels Pvt., Ltd.,
(a) Bank Guarantee Rs.28.34 lakhs for due performance of the contract towards 5% of the order value.
(b) Bank Guarantee for Rs.113.36 lakhs towards the advance pay at 20% of the order value.
(c) Bank Guarantee for Rs.5.50 lakhs towards the bid bond guarantee in the name of M/s. P. Jayanthi Lal & Co., Pvt., Ltd.,
(d) Bank Guarantee for Rs.26.51 lakhs covering due performance of the contract at 10% of the contract value.
(ii) Bank Guarantee for Rs.39.77 lakhs towards 15% of the advance payment on the direct value.
43. In this regard, PW.67 Sri. B. Prakash Chandra Shetty, the then Senior Manager in Vijaya Bank, Excelsior Branch, Mumbai from 1989 to 1992 has 124 Spl.C.C.No.183/2000 J deposed in his examination-in-chief that Accused No.4 Sri. R.S. Narayan, accused No.5 Sri. A.B.S. Shetty were the Divisional Manager and Assistant General Manager in Excelsior Branch during his tenure and he identify the note of the Chairman and MD as per Ex.P.83 and he also identifies the signature of accused No.1 Sadananda Shetty in the said note. Further, as per Ex.P.84 the note placed before the Chairman and Managing Director of Vijaya Bank, Excelsior Branch goes to show that the Deputy General Manager has permitted to issue the Bank Guarantee of 460.55 lakhs and letter of credit for Rs.308.35 lakhs over and above the existing limits. Further, the PW.67 identifies his signature and signature of the accused No.1, the then Chairman and MD in respect of the permission accorded for issue of Bank Guarantee. Further, Ex.P.85 is in respect of sanction of Bank Guarantee in favour of M/s. Boiler Tube Company, which is a sister concern of M/s. P.J. Pipes & Vessels Pvt., Ltd., to the limit of Rs.101.92 lakhs earmarking the limit sanctioned to M/s. P.J. Pipes & Vessels Pvt., Ltd., 125 Spl.C.C.No.183/2000 J PW.67 admit the signature of the accused No.1 and notes by the General Manager for recommending the said Bank Guarantee. Further, Ex.P.86 is the letter dated 14.2.1990 which revealed the action for issue of Bank Guarantee for Rs.101.92 lakhs on account of the party through M/s. Boiler Tube has been ratified by the Board of Directors. Thereby, it goes to show that the said Bank Guarantees were sanctioned in accordance with Banking Practice. Further, PW.67 admitted during the cross- examination at para No.10 at page No.4 which reads as under: -
"Ex.P.85 is prepared in Head office. Ex.P.86 is also letter prepared in Head office. It is true to suggest that Ex.P.87 is prepared in the branch by concerned Department and I have placed it before the Divisional Manager seeking ratification after I have satisfied with the said note. It is true to suggest that there is no separate document which bears the signature of CMD for approval of extension of Bank Guarantee to M/s. Boiler Tube Company. Witness volunteers that in the memorandum placed before Board of Directors Ex.P.88 the fact of permitting the extension of bank guarantee to M/s. Boiler Tube Company by CMD has been mentioned."126 Spl.C.C.No.183/2000 J
Further, this witness during the further cross- examination at para-11 in page No.5 admits that:
"It is true to suggest that we collect commission on the amount of bank guarantee. It is true to suggest that as per the memorandum dt. 3.11.1992 placed before the Board of Director, which is part of Ex.P.35, it is mentioned that the bank guarantee issued by the Excelsior Branch in the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., on behalf of M/s. Boiler Tube Company Pvt. Ltd., is reported to have been cancelled and original received back and proceeds of contract are being routed through the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., and that portion is marked at Ex.D14."
Further, he has admitted that:
"It is true to suggest that on account of bank guarantee extended to M/s. Boiler Tube Company, the bank has not suffered loss since it was cancelled."
Further, he admits that:
"It is true to suggest that the Bank Guarantee has been issued on 10.2.1990 and the same was ratified on 13.2.1990 by the Chairman."
Further, he admits that:
"It is true to suggest that extension of bank guarantee to the sister company within the limit of the bank guarantee permissible under our banking rules and regulations."127 Spl.C.C.No.183/2000 J
44. This witness admits that even though the said Bank Guarantee was also granted in favour of sister concern of the M/s. P.J. Pipes & Vessels Pvt., Ltd., the Vijaya Bank was well aware even at the time of filing application by the M/s. P.J. Pipes & Vessels Pvt., Ltd., the said company is having sister company by name M/s. Boiler Tube Company and it is admitted that there is banking rules and regulations to extended bank guarantee even in the name of the sister concern of the main company. Therefore, the allegation made by the complainant in Ex.P.42 that the Bank guarantee has been extended in favour of the sister company without following the banking regulations and practice gets is not proved by the prosecution.
45. Further, PW.18 Sri. U. Gurunandan, the then Manager, Staff Loan and issue of Bank Guarantee Section in Vijaya Bank, Excelsior Branch, Mumbai from 1989 to 1993 has deposed that Sri. R.S. Narayanan (A4) was the Chief Manager of Excelsior Branch, Mumbai at that time accused No.1 was the Chairman and Managing 128 Spl.C.C.No.183/2000 J Director submitted request for issue of Bank Guarantee of Vijaya Bank, Excelsior Branch, Mumbai when Chief Manager has endorsed on the said letter stating that limit is already expired and we cannot issue further bank guarantee to M/s. P.J. Pipes & Vessels Pvt., Ltd. In para- 2 of his examination-in-chief this witness express his ignorance and deposed that:
"I do not know whether the Chairman and M.D., accused No.1 had come to Zonal Office, Mumbai for any official work and at that time, whether he has sanctioned any Bank Guarantee to M/s. P.J. Pipes & Vessels Pvt., Ltd., I do not know whether the party used to meet Chairman and M.D., directly in connection with any credit facility."
Further, this witness was recalled and further examined, which I would like to reproduce at page No.4, para-4 that:
"I served as Manager in Excelsior Branch, Mumbai from 1989 to 1993. During that tenure, I have worked in Bank Guarantee Section. Now I see Ex.P.41, it is the document containing the details of Bank Guarantee issued to M/s. P.J. Pipes & Vessels Pvt., Ltd., which were invoked and paid by the bank and are outstanding. The bank guarantees mentioned in Ex.P.41 were given during my tenure."129 Spl.C.C.No.183/2000 J
This witness during the cross-examination admits as under:
"Now I do not remember the total quantum of 107 Bank Guarantees were given to M/s. P.J. Pipes & Vessels Pvt., Ltd., As per Ex.P.41, I do not know how many Bank Guarantees were given to M/s. P.J. Pipes & Vessels Pvt., Ltd.,"
Further, he admits during the cross-examination that:
"I do not know when the said Bank Guarantees mentioned in Ex.P.41 were invoked and paid by the bank."
PW.19 K. Mohan Shetty, the then Senior Manager, Vijaya Bank, Zonal Office, Mumbai from 1986 to 1991 has deposed in examination-in-chief at para-2 that:
"In the Zonal Office, Mumbai pertaining to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., one Mr. Krishna Murthy, Senior Manager was handling Corporate and Industrial Accounts and during his absence, I was asked by AGM and DGM, on the basis of the recommendations made by the Branch, Excelsior for issue of Bank Guarantee in favour of ONGC for getting release of Customs Duty already paid by the Company and from the proposed release of the money, the Branch has stated that they will regularize irregularity in the account of the company by short collecting of cash margin while opening LCs from the proceeds to be received from ONGC."
Further, he has deposed in para-3 that: 130 Spl.C.C.No.183/2000 J
"Accordingly, I have put up detail note mentioning all the aspects of the AGM and after his approval placed before DGM who was the Zonal Head for his approval. Chairman and MD in urgent cases used to make spot sanction in Mumbai and relative approved note would be sent to Head Office in Bengaluru."
Further, during the cross-examination he admits that:
"I recommended for sanction since it was urgent in nature and going to regularize the irregular account. There is nothing like spot sanction in the Banking procedure. As I know, in the present case, all sanctions have been made by following due procedure and Rules of the Bank."
PW.33 Sri. Mahesh M Doshi, the then Senior Manager, Vijaya Bank, Excelsior Branch, Mumbai from January 1990 to 1993 has deposed that he was deputed to Divisional Accounts Office, Bombay from August 1990 to December 1991. In excelsior Branch, he was working in Bank Guarantee Issue Department from January 1993 to July 1993. M/s. P.J. Pipes & Vessels Pvt., Ltd., had the facility of various loan accounts including Bank Guarantee Facilities. Further, this witness identifies the details of Bank guarantee statement issued by him as per 131 Spl.C.C.No.183/2000 J Ex.P.41. At this stage, I would like to look into Ex.P.41 the list of Bank Guarantees. Admittedly even though it is the allegation by the complainant that 107 Bank Guarantees were given to M/s. P.J. Pipes & Vessels Pvt., Ltd., by the Excelsior Branch without following due procedures as required by the bank. But admittedly only 9 bank guarantees were invoked out of 107 bank guarantees. Further, admittedly the prosecution has not produced any document to show which are said the 107 bank guarantees, what was the said amount, the period of issue of the said bank guarantees and whether the said bank guarantees were issued illegally as alleged. Admittedly, as per Ex.P.41 the list of 9 bank guarantees are only said to have been pending as on 3.5.1997. On perusal of the said list, the Sl. No.1 of Bank Guarantee i.e., 12/91 the issue date is 14.2.1991 and as per the said statement claim paid by the bank on 1.6.1994. In other words generally, the Bank Guarantee will be issued only for a period of one year. Therefore, if it is said to have been paid on 1-6-1994. It goes to show that it must 132 Spl.C.C.No.183/2000 J have been extended for the next period also. If the said bank guarantee is said to be extended it goes to show that the M/s. P.J. Pipes & Vessels Pvt., Ltd., must have been complied all the conditions of the said bank guarantees. Therefore, the said bank guarantee extended till 1994. Therefore, it cannot be said that the bank officers including the accused have sanctioned and extended said bank guarantee without following due process laid down by the bank. So, also the 2nd item of the bank guarantee as per Ex.P.41 bearing No.13/91 said to have been issued on 14.2.91. The beneficiaries are ONGC, item No.3 bears bank guarantee No.14/91 said to have been issued on 14.2.91, in the bank guarantee bearing No.15/91 said to have been issued on 14.2.91, another bearing No.56/90 said to have been dated 11.4.90. The item No.2 to 5 does not show when the said bank guarantees were invoked or paid by the bank. During the cross-examination PW.33 admits the bank guarantees will be invoked when the party commits default in performing the contract. Further, he admits 133 Spl.C.C.No.183/2000 J that it is true to suggest that only 9 Bank Guarantees were invoked out of 107 Bank Guarantees given to M/s. P.J. Pipes & Vessels Pvt., Ltd. It is true to suggest that the margin money was adjusted while invoking the Bank guarantees as shown in Ex.P.41. Further, he admits "I do not remember whether any of the bank guarantees were invoked during my tenure out of the nine Bank Guarantees mentioned in Ex.P.41". Therefore, as per the evidence of PW.33, the then Senior Manager of the Vijaya Bank, Mumbai goes to show that out of 107 bank guarantees only 9 bank guarantees have been invoked and he has not spoken about the details of the invoking of said bank guarantees. Even Ex.P.41 also does not disclose when the said bank guarantees were invoked, PW.33 also not spoken that in fact there is a loss caused to the Vijaya Bank due to the issue of said bank guarantee in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd. PW.67 Sri. B.Praksh Chandra Shetty, the then Senior Manager of the Vijaya Bank, Excelsior Branch, 134 Spl.C.C.No.183/2000 J Mumbai from 1989 to 1992 has deposed in examination- chief at page No.2 at para-2 that:
"Now, I see the note fore the Chairman and MD dt. 29.2.1988 which reveal various credit facilities and bank guarantees extended to M/s. P.J. Pipes & Vessels Pvt., Ltd. It bears the signature of Asst. General Manager, Deputy General Manager and the signature of K. Sadananda Shetty (A1), Chairman and MD. The said note is marked as Ex.P.83."
Now, I would like to go through the Ex.P.83 note for the Chairman and Managing Director dated 29.2.1998. On going through the contents of said document, it speaks "As approved by the Board of Directors vide BDR:A:60:88 dated 15/16.2.88, the following credit facilities have been sanctioned to M/s. P.J. Pipes & Vessels Pvt., Ltd., for executing orders to the tune of Rs.925.45 lakhs secured from ONGC covering supply of special quality pipes."
Thereafter, the note itself speaks that the said credit facilities are extended to M/s. P.J. Pipes & Vessels Pvt., Ltd., as per the approval of the Board of Directors. In the 2nd page of the said document, bank guarantees given in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., were shown. The said document is signed by the Assistant 135 Spl.C.C.No.183/2000 J General Manager, Deputy General Manager, Chairman and Managing Director and also countersigned by the PW.67. Therefore, in view above discussion the prosecution has failed prove that the Bank Guarantees sanctioned in favour of P J Pipes and Vessels Pvt., Ltd., done without following the due process of banking norms.
46. Now, I would like to discuss about the allegations made by the prosecution that the accused No.2 hurriedly without complying the Banking norms and practice has sanctioned Bank Guarantee & Import letter of credit of Rs.651.83 lakhs and OD of Rs.164 lakhs by holding meeting on 30.6.1992 of the General Managers and Deputy General Managers of Vijaya Bank in his chamber violating terms of sanction of the Board of Directors of Vijaya Bank stipulated on 27.6.1992. In this regard, ongoing through the evidence of PW.27, the then Workmen Director of Board of Directors of Vijaya Bank from November 1991 to August 1995 has admitted in 136 Spl.C.C.No.183/2000 J page No.2 of his chief-examination at para-5 deposed as under:
"3 days prior to the retirement of Sri. K.S. Shetty, as Chairman and Managing Director of Vijaya Bank, there was a Board meeting and in the said meeting, some facilities were sanctioned and approved in favour of account of M/s. P.J. Pipes & Vessels Pvt., Ltd., subject to fulfillment of conditions. Without fulfilling those conditions by the said account holder on 30.6.1992, Sri. K.S. Shetty on the date of his retirement took decision for release of some credit facilities in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., I came to know that in the meeting dt: 30.6.1992 Sri. K.S. Shetty called some General Managers and Directors and took decision in respect of account of M/s. P.J. Pipes & Vessels Pvt., Ltd.
In the board meeting dt. 27.6.1992, decision was taken in respect of approval for opening an import letter of credit of Rs.651.83 lakhs subject to certain conditions pertaining to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd. Now I see the minutes of meeting recorded on that day and the same is at item No.A- 125/92 and the same is now marked at Ex.P.34(d). In the said minutes my displeasure expressed in respect of the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., is also recorded and the same is now marked at Ex.P.34(e). In every board meeting, the directors expressed displeasure about the performance of M/s. P.J. Pipes & Vessels Pvt., Ltd., account and approval and ratification sought."137 Spl.C.C.No.183/2000 J
During the cross-examination of this witness admits at para-9 that:
"I came to know that in the meeting dt:
30.06.1992, it was discussed by the letter of comfort was not obtained from M/s. P.J. Pipes & Vessels Pvt., Ltd. It is true that after the retirement of accused No.2, incoming Chairman Sri. B.B. Shetty sanctioned another Rs.9 crores in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd.
Witness volunteers that inspite of my objection Sri. B.B. Shetty, CMD sanctioned funds to M/s. P.J. Pipes & Vessels Pvt., Ltd.,"
This itself goes to show that accused No.2 was not on a wrong footing as he has taken decision in the best interest of the bank and in order to continue dealings with the M/s. P.J. Pipes & Vessels Pvt., Ltd. Further, PW.24, the then General Manager, Vijaya Bank, Head Office, Bengaluru from 1987 to 1995 has deposed during the cross-examination at page No.2, para-3 that:
"The urgent meeting of General Managers was conveyed on 30.06.1992 for release of some urgent funds to M/s. P.J. Pipes & Vessels Pvt., Ltd. It is true that the urgency in calling the meeting was the request made by Branch through Regional Office through telegraphic message for immediate action. It is true that if there was no immediate payment of customs duty and release of funds by Vijaya Bank to pay the same, the Custom Dept., would have 138 Spl.C.C.No.183/2000 J auctioned the entire material and would have claimed demurrages.
It is true that in view of that urgency and in the interest of the Bank, the urgent meeting was conveyed on 30.06.1992 and decision was taken. I have not expressed any reservation about the minutes of meeting prepared at that time. I had not expressed any reservations in the meeting also. It is true that the decision taken in the meeting was in the best interest of the Bank."
PW.20 the then General Manager (Services), Vijaya Bank, Head Office, Bengaluru from 1991 to December 1997 has deposed in para-2 that:
"On 30.6.1992, meeting of Top Management Committee was conveyed in the head office for the purpose of considering the request of M/s. P.J. Pipes & Vessels Pvt., Ltd., for extension of time for complying two conditions namely one is comfort letter and another condition was margin money of Rs.34 lakhs.
Now I see the Telex Message received from Excelsior Mumbai Branch dt: 29.06.1992 and it is marked at Ex.P36. In the said Telex message, permission was requested for the following two items as per the request made by M/s. P.J. Pipes & Vessels Pvt., Ltd.,
i) to open 2nd lot of import L/c for Rs.660 lakhs with a cash margin of 36 lakhs, balance cash margin of Rs.34 lakhs will be brought by the company as promised on or before 15th July 139 Spl.C.C.No.183/2000 J 1992 without obtaining comfort letter from saw pipes ltd., at this stage.
ii) to release of custom duty, but charges, ocean freight, charges etc., amounting to Rs.164.36 lakhs for consignments already arrived under import l/c directly to customs to avoid recurrence of demurrages which we understand from the company is about Rs.50000/- per day."
In para-5 of the examination-in-chief he has further deposed that "On 30.6.1992, Chairman and M.D. K. Shivaram Shetty and Sri. Kagekar (A-3) were retiring, therefore, in view of urgency, the management committee meeting was held. The Chairman informed that 5 Board Directors have orally consented for releasing of those two conditions and to extend the time to the account holder."
This witness during the cross-examination admitted that "I have not reported to Vigilance Dept., of Vijaya Bank regarding any misconduct or violation of Rules and Regulations pertaining to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd. Witness volunteers that as per the Chairman's Order, I have directed for conducting inspection of the account." PW.17 the then General Manager, Vijaya Bank, Head Office, Bengaluru from 1989 to 1992 has admitted during the cross-examination at page No.7 para-15 that: 140 Spl.C.C.No.183/2000 J
"Now I see the supplementary memorandum for the Board of Directors dt: 26.6.1992 in Ex.P.35 and it is marked at Ex.D11. It is true that as per Ex.D11, approval was accorded by the Board of Directors for opening the balance import LC of Rs.651.83 lakhs subject to party providing immediately a cash margin of Rs.36 lakhs and the balance of Rs.35 lakhs by 15.7.1992 in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd. It is true that on said amount for payment of custom duty in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd as per the resolution of the Board of Directors."
Thereby, ongoing through the above said evidence, it clearly goes to show that accused No.2 in the best interest of the bank and to gain profit to the bank and to make survival of the M/s. P.J. Pipes & Vessels Pvt., Ltd., has sanctioned said import LC in accordance with procedures laid down by the bank. Therefore, the allegations against accused No.2 that he has sanctioned the said import letter of credit without following the banking rules and practice is not proved.
47. Further, it is also the allegation of the prosecution that the accused No.2 has not placed the letter written by Mistress Gowri Shankar as per Ex.P.38 before the board and it was placed belatedly,as such it is 141 Spl.C.C.No.183/2000 J also allegation of the prosecution that the accused No.2 has not complied the contents of Ex.P.38. In this regard, I would like to elicit the evidence of the PW.21 Hariprakash Shetty the then AGM., Board Secretariat, Vijaya Bank, Head Office, Bengaluru from February 1996 to 1998 has deposed in page No.2, para-3 that:
"During investigation, CBI officer shown me letter dated 4.3.1992 of Smt. Gowri Kumar, Dy. Secretary, Ministry of Finance, GOI and Director of the Vijaya Bank written to the then Chairman and M.D., of Vijaya Bank and it is marked at Ex.P.38. In the said letter, it was informed that M/s. P.J. Pipes & Vessels Pvt., Ltd., had evaded customs duties to the tune of Rs.7.19 crores and such evasions cannot be ruled out in future. She also mentioned that the information contained in the letter may be passed on to other Financial Institutions/ Banks, who have financed to M/s. P.J. Pipes & Vessels Pvt., Ltd."
During the cross-examination this witness admitted in page No.3, para-5 that:
"It is true that Smt. Gowri Kumar was Director of Vijaya Bank when the letter was written. I do not know how many Board meetings she attended. For Ex.P.34(a) and (b), Smt. Gowri Kumar was present in the meeting. It is that after 04.03.1992, several meetings of Board were conducted and in those meetings Smt. Gowri Kumar was present and attended those meetings. It is true that any displeasure 142 Spl.C.C.No.183/2000 J expressed by the Director in the Board meeting will be noted in resolution, if insisted by the Director. I have not come across any displeasure expressed by Smt. Gowri Kumar in any of the Board Meeting because I was not present."
Therefore, even if it is to be accepted that the said letter as per Ex.P.38 written by Mrs. Gowri Kumar was not placed before the board at the earliest and the direction of said letter was not complied. In this regard, the Mrs. Gowri Kumar who has also participated in the subsequent Board meeting after 4.3.1992, she also has not raised any objection for not placing the said letter before the board. Further, PW.25 the then Deputy General Manager, Vijaya Bank, Head Office, Bengaluru from 7.7.1992 to May 1994 has deposed in page No.2 after four lines from the top that:
"Now I perused the letter of Smt. Gowri Kumar dt. 4.3.1992 and it is already marked at Ex.P.38 and it was received by our Chairman Sri. K.S. Shetty on 5.3.1992. I received the said letter on my table on 7.8.1992."
PW.25 is the officer who is working in the DGM (Credit), Western Region and he was asked to prepare a board 143 Spl.C.C.No.183/2000 J memorandum by the General Manager Sri. K.K. Shetty. In this regard, admittedly accused No.2 has received the said letter as per Ex.P.38 written by the Gowri Kumar dated 4.3.1992 and he has made a note on the said letter as "Please discuss" and it is directed to General Manager Credit i.e., PW.25 himself. Admittedly, PW.25 also made endorsement on the said letter as "Discussed". Therefore, when the matter was discussed by the accused No.2 with the concerned officers, it has not come on record i.e., in the computer system. In this regard, PW.25 admitted during the cross-examination that:
"It is true to suggest that Ex.P.38 was received by the Chairman on 5.3.1992 and marked to General Manager Sri. K.K. Shetty. On the letter, it is not forthcoming that I received the same on 7.8.92. I cannot say who brought the letter to my table on 7.8.92. I cannot say in whose custody the letter Ex.P.38 was from 5.3.1992 to 7.8.1992. It is true that Smt. Gowri Kumar attended the meeting on 12.8.1992. Further, it is true that Smt. Gowri Kumar has not raised objection that there was delay in placing the letter before the board."
Further, in para-6 of his cross-examination it is admitted that:
144 Spl.C.C.No.183/2000 J
"It is true that as per the noting of the then CMD on Ex.P.38, he has taken immediate action and there was no delay on his part."
So also PW.28, the then Officers' Nominee Director on the board of Vijaya Bank from January 1992 to January 1995 deposed in page No.2, para-3 that:
"There was board meeting on 12.8.1992, in which Smt. Gowri Kumar informed the board that she had not given the consent and she also expressed her displeasure about the delay in placing her letter before the board for consideration."
PW.35 the then Clerk, Vijaya Bank, head Office, Bengaluru from 1982 to 1992 has deposed that:
"He was entrusted with the work of receiving calls, receiving letters and other correspondence in respect of K. Shivaram Shetty, who was General Manager, later on who become Executive Director and thereafter as a Managing Director.
Para-2 of his examination stated that:
"I am conversant with the handwritings of K. Shivaram Shetty. Now I see the document marked at Ex.P.38, shown to me. I saw this document for the first time in the year 1998 when I was called by the CBI Police for investigation at Bangalore Head Office."145 Spl.C.C.No.183/2000 J
During the cross-examination, this witness admits at para-3 that:
"The letter might have received by me while I was working in the head office and I might have placed it before K. Shivaram Shetty, the Executive Director, who in turn put an endorsement and his initial and forwarded to the concerned branch. It is true that K. Shivaram Shetty, the Executive Director has marked the said letter to General Manager, Credit on 5.3.2016. The word "discussed"
written on the letter Ex.P.38 is not in the hand writing of K. Shivaram Shetty. I do not know who has written it. I am not aware what action was taken on the said letter."
Further, PW.36 the Stenographer in the office of CMD Office, Vijaya Bank, Bengaluru from 1983 to 1996 has deposed in his examination chief that:
"My nature of work was to enter the contents of the letter received from CMD's Chamber into the computer system and to send the same letter to the concerned Departments as per the endorsement made by CMD on the said letter."
Further, during the cross-examination, this witness answers a question as under: -
Question: If CMD discuss with General Manager and hand over any letter to him personally, whether the General Manager will come to you to get the gist of the letter entered into the system.146 Spl.C.C.No.183/2000 J
Answer: - I have not come across such a situation.
PW.37, the Stenographer admits the handwriting and signature of K. Shivaram Shetty at Ex.P.38. Thereby, on reading of the evidence of PW.25, 28, 35, 36 and 37 referred above, it goes to show that the said Ex.P.38 letter was placed before the accused No.2 on 5.3.1992 he has called for the General Manager to discuss the said matter and accordingly after discussing the same, the said letter was handed over to the General Manager as such the said General Manager did took the said letter and did not made attempt to enter the contents of letter Ex.P.38 in computer system. Therefore, it cannot be said that it is the negligent or intentional act of the accused No.2 in not placing Ex.P.38 before the board. Admittedly the Gowri Kumar who has attended the subsequent meeting on 4.3.1992 has not raised any objections in respect of the said letter. Therefore, it cannot be said that the accused No.2 with the malafide intention and by abusing his official position has not placed the said letter 147 Spl.C.C.No.183/2000 J as per Ex.P.38 before the board as alleged, as such prosecution has failed to prove the said fact beyond all reasonable doubt by leading cogent, convincing and corroborative evidence.
48. Now, I would like to discuss the allegations of the prosecution against the accused in respect of the diversion of funds by the PJ Pipes & Vessels Pvt., Ltd. to its sister concerns and other firms. In this regard, the prosecution rely on Ex.P.68 analyses report to show and establish that the PJ Pipes & Vessels Pvt., Ltd., has diverted its funds. Therefore, I would like to appreciate the evidential value of the Ex.P.68 with regard to the diversion of the funds by the PJ Pipes & Vessels Ltd. The Ex.P.68 is containing big file wherein the account of the PJ Pipes & Vessels Pvt., Ltd. With Vijay bank, and other bank accounts has been analyzed by the three officers of the bank as per the instructions of their higher officers at the request of the Investigating Officer of the CBI. 148 Spl.C.C.No.183/2000 J
49. PW.38 V.K. Gopinath Nair, retired Senior Manager (Credit), Vijaya Bank has deposed in his examination in chief that: -
"In the year 1998 the CBI police came to our Head Office, our Chairman and MD deputed me to assist the CBI police for verification of the accounts pertaining to M/s. P.J. Pipes & Vessels Pvt., Ltd., Mumbai. I have verified the accounts pertaining to M/s. P.J. Pipes & Vessels Pvt., Ltd., with Vijaya Bank and various banks. Myself, Jagesh Rai (PW.39) and K.L.N. Murthy (PW.59) together have verified the accounts. We have analysed the accounts pertaining to M/s. P.J. Pipes & Vessels Pvt., Ltd., pertaining to Vijaya Bank and various banks and found that the funds were transferred from M/s. P.J. Pipes & Vessels Pvt., Ltd., accounts to various accounts. The other accounts to which the funds were transferred are M/s. Jayanthilal and Co., M/s. Boiler Tubes, M/s. India Gums and M/s. Arunodaya Exports and to few more accounts. The approximate amount transferred to various accounts was to the tune of Rs.10 crores."
Further, he has deposed at para-2 that:
"Indian Oil and ONGC are the companies which have credited the amount to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., and also exports incentives were credited to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd. The total amount credited to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., was approximately Rs.150 Crores."149 Spl.C.C.No.183/2000 J
Further, admittedly even though as per the case of the prosecution PW.38, 39 and 59 have analysed the said accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd. During the examination of this witness the learned PP has not shown the Ex.P.68 file to PW.38 and PW.39 the witness. Therefore, without confronting the Ex.P.68, more particularly the witness has not identified his report and analysis that has been made by him in Ex.P.68. Their by prosecution has failed to prove the analyses made by PW.38and PW.39 in EX.P, 68. It is fatal to the case of the prosecution.
Further, PW.39 K. Jagesh Rai who was working in Vigilance Department of Head office during 1998 has deposed as under: -
"The CBI police asked us to verify the some of the statement of accounts and bundles of debit vouchers pertaining to Vijaya Bank and few other banks. On the said statement of accounts and debit vouchers, we have prepared list of transfer of fund from M/s. P.J. Pipes & Vessels Pvt., Ltd., to various companies and firms. We have noticed transfer of fund to P. Jayanthilal and Co., Indian Gum and few other companies from M/s. P.J. Pipes & Vessels Pvt., Ltd. About Rs.10 Crores was transferred from M/s. P.J. 150 Spl.C.C.No.183/2000 J Pipes & Vessels Pvt., Ltd., to various accounts. The credit was coming to M/s. P.J. Pipes & Vessels Pvt., Ltd., mainly from ONGC."
Further, in para-2 he has deposed that: -
"On the basis of statement of accounts and vouchers made available, we have verified the accounts and prepared the list. Statement of accounts spreading over a period of 5 to 6 years has been verified by us. I am not sure whether the said statement of account was for a complete period of 5 to 6 years. We have prepared a statement and given to CBI officer and the CBI officer has recorded my statement."
Further, admittedly the learned PP has also not shown PW.39 the analysis report as per Ex.P.68, as such it has not served the purpose. More particularly, this witness also not spoken that M/s. P.J. Pipes & Vessels Pvt., Ltd., has diverted the funds for the purpose other than for which the said loan was granted.
50. Further, PW.59 K.L. Narasimha Murthy, the then Senior Manager, Credit Department, Vijaya Bank, Head Office, Bengaluru during 1992 to 1998 has deposed before this court at para-2 of his chief examination that:
"While analyzing the transactions in the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., 151 Spl.C.C.No.183/2000 J and its sister concerns, me and other two members have verified the sanction letters, statement of accounts, drafts, cheques and honoured cheques. Now I see the report of the Analysis of the transactions in the different accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., submitted by me and other two members along with enclosures. It bears my signature and signatures of other two members named above. The entire file is marked at Ex.P.68."
Further, in para-6 at page No.5 of his examination-in- chief, the said witness has deposed that:
"I have mentioned in my report regarding the diversion of funds from M/s. P.J. Pipes & Vessels Pvt., Ltd., to different companies. I have shown the diversion of funds in Chart VI enclosed to my report. I have mentioned in my report that CMD had allowed on 30.06.1992 opening of import Letter of Credit of Rs.652 lakhs by waiving obtaining of comfort letter from M/s. Saw Pipes Ltd., this action was ratified by the CMD in the meeting held on 12.8.1992 with displeasure."
Therefore, now, I would like to discuss about the admissions of this witness during the cross-examination in order to see that how the prosecution has failed to prove the said charge against the accused. Admittedly at the cost of repetition, I repeat that even though the said Ex.P.68 the Analysis Report was produced along with the 152 Spl.C.C.No.183/2000 J charge sheet, the learned PP has not got it exhibited and shown the said document to the PW.38 and 39 who are admittedly have analysed and given report contained in Ex.P.68. Further, PW.38 V.K. Gopinathan Nair has during the cross-examination admitted that at the time of the analyzing and inspection of M/s. P.J. Pipes & Vessels Pvt., Ltd., he has been provided with the Vijaya Bank various vouchers and other related documents to be compared with the M/s. P.J. Pipes & Vessels Pvt., Ltd., account to arrive at the findings of diversion of fund. Even Ex.P.39 in examination-in-chief itself has deposed that at the time of said inspection he has based his statement of account and vouchers made available to him. PW.59 also during the cross-examination in page No.10 at para-13 has admitted that:
"We have arrived at the figures shown in para No.3 of our report on the basis of scrutiny of cheques and payments and account statements. We have made out a list of transactions culled out from the said accounts to show the diversion of funds. It is true to suggest that the said list of transactions is not found in Ex.P.68. It is true to suggest that in order to arrive at the conclusion shown at para 153 Spl.C.C.No.183/2000 J No.3, one has to see the debit and credit vouchers. We have arrived at the figures shown in the tabular form in para No.5 and 6 shown in roman numerical on ink page no.2330, on the basis of scrutiny of cheques, debit and credit vouchers. It is true to suggest that the said debit and credit vouchers are not part of the records and the list of relevant entries in the account statements is not enclosed to our report."
Therefore, in view of the admission of the three officers it goes to show that the said officers even though analysed and given report as per Ex.P.68 on the basis of the debit vouchers and credit vouchers and cheques, the said documents have not been produced before this court. Therefore, accused have been deprived of right to scrutinize the said documents and cross-examine the said witness in respect of the said documents at Ex.P.68. Further, it is admitted fact that the said report was joint report prepared by all three persons. Further, admittedly the PW.38 and 39 are officers who have studied up to PUC only, But on the basis of their service experience, they have been asked to analyse and verify the transaction of the P M/s. P.J. Pipes & Vessels Pvt., Ltd. 154 Spl.C.C.No.183/2000 J In other words, they are not having any specialized qualification in analyzing the transaction of M/s. P.J. Pipes & Vessels Pvt., Ltd., to arrive at figures of diversion of funds as alleged by the prosecution. Admittedly, PW.38, 39 and 59 are not having personal knowledge of the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., and further it is also admitted by the said witness that during the cross-examination that only as per the instructions of the CBI and their higher officers they have been asked to prepare the said analysis report basing on the M/s. P.J. Pipes & Vessels Pvt., Ltd., debit, credit vouchers and cheques. Further, admittedly the PW.38 during the course of cross-examination admits at page No.4 that:
"It may be possible that funds from M/s. P.J. Pipes & Vessels Pvt., Ltd., might have been transferred from various account for supplies made and services rendered by them to M/s. P.J. Pipes & Vessels Pvt., Ltd.,"
On this admission, when the M/s. P.J. Pipes & Vessels Pvt., Ltd., have transferred or given funds to its sister concern or any other concern for getting any service benefit in connection with transaction of getting the 155 Spl.C.C.No.183/2000 J purpose for which the loan has been sanctioned. As such it cannot be said there is the diversion of funds.
51. Further, PW.59 during cross-examination at page No.8 para-9 admits that:
"The Investigating Officer gave us cheques, vouchers and account statements and asked us to analyse the transactions in the said accounts in respect of transaction of more than Rs.1 lakh from M/s. P.J. Pipes & Vessels Pvt., Ltd., and its sister concerns and to report where the money has come to M/s. P.J. Pipes & Vessels Pvt., Ltd., and its sister concerns and where the money has gone. The Investigating Officer did not ask us to report as to diversion of fund."
Further, he admits in para-10 that:
"It is true to suggest that mainly we have analysed the debit and credit voucher. It is true to suggest that Ex.P.68 report do not contain a single debit or credit voucher scrutinized by us."
Further, in the cross-examination at para-11 this witness admits that:
"I am not aware where the print out of the said account statements enclosed to my report were taken out. It is true to suggest that the account statements enclosed to my report do not bear the signature of the officer to show that it is the true copy of the print out taken out from the system. It is true to suggest that the account statement enclosed to my report cannot be said to be authenticate and complete since they do 156 Spl.C.C.No.183/2000 J not bear the attestation by the officer of the bank."
Therefore, this witness admits the account statement enclosed to said Ex.P.68 is not authenticate one. Further, in para-12 of his cross-examination he admits that:
"We three have divided the work amongst us since there were voluminous documents were to be scrutinized. I cannot say period of the accounts, I have analysed so also I cannot say the period of the accounts which have been analysed by the other two officers. It is true to suggest that I have not analysed the entire statement of accounts pertaining to M/s. P.J. Pipes & Vessels Pvt., Ltd., and its sister concerns but I have done only part of it."
Thereby, this witness admits he has analysed only part of the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., and whereas the others PW.38 and PW.39 have analysed the remaining part of it. Admittedly, PW.38 and PW.39 have not been shown of the Ex.P.68 and they have not specifically deposed that which part of the account statement of M/s. P.J. Pipes & Vessels Pvt., Ltd., have been analysed and scrutinized by them. Further, PW.59 157 Spl.C.C.No.183/2000 J admits in the cross-examination in page Np.10 at para-3 that:
"We have made out a list of transactions culled out from the said accounts to show the diversion of funds. It is true to suggest that the said list of transactions is not found in Ex.P.68. It is true to suggest that in order to arrive at the conclusion shown at para No.3, one has to see the debit and credit vouchers. We have arrived at the figures shown in the tabular form in para No.5 and 6 shown in roman numerical on ink page no.2330, on the basis of scrutiny of cheques, debit and credit vouchers are not part of the records and the list of relevant entries in the account statements is not enclosed to our report."
Thereby, this witness admits that vital documents which have been scrutinized by them at the time of analyzing the account statement of M/s. P.J. Pipes & Vessels Pvt., Ltd., are not produced along with Ex.P.68. Therefore, the accused have lost an opportunity to scrutinize and verify the said documents in order to defend their case. It is fatal to the case of the prosecution.
52. Admittedly, on going through the contents of Ex.P.68, the computer sheets of the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., and its ancillary unit, it is 158 Spl.C.C.No.183/2000 J brought to the notice of this court by the learned advocate for accused that from page No.2358 to 2369, the dates of the said entries has been shown as 26-1-19. (it does not disclose for which year it belongs). In other words, it does not disclose for which year the said entries belong. In other words from page No.2358 to 2369, the entries cannot be made out for which year they belong to. Admittedly the said account statements are computer statements taken out from the computer. In this regard, when a statement or document or version is taken out from the computer in order to ascertain veracity of the said statement or document, it is necessary that the said documents should be annexed with the certificate u/s 65B of the Evidence Act or admittedly the said statements are taken out from the bank account. Therefore, atleast they should have been suffixed with the certificate u/s 4 of the Banker's books of Evidence Act. Admittedly the said statements in Ex.P.68 are neither certified copies or self attested copy or certified u/s 65 B of the Evidence Act or u/s 4 of the Banker's 159 Spl.C.C.No.183/2000 J Book of Evidence Act. Further, PW.59 the then Senior Manager of Credit Department, Vijaya Bank, Head Office, Bengaluru who is one of the officers who has prepared the said analysis statement admitted during cross- examination at page No.14 at para-20 as under:
"It is true to suggest that in the extract of the account pertaining to OD a/c. No. 249 of M/s. P.J. Pipes & Vessels Pvt., Ltd., at ink page no.2370 till 2383 consisting of 402 transactions, there are no details provided in respect of 125 transactions amounting to Rs.44,05,00,000/-. It is true to suggest that in the extract pertaining to CC A/c. No.129 of M/s. P.J. Pipes & Vessels Pvt., Ltd., at ink page No.2407 till 2417 consisting of 330 transactions, there are no details provided in respect of 40 transactions amounting to Rs.26,06,00,000/-."
Further, in para-21 he has admitted that:
"It is true to suggest that in the extract pertaining to Current A/c. No. 16162 of M/s. P.J. Pipes & Vessels Pvt., Ltd., at ink page no.2439 till 2440 consisting of 54 transactions, there are no details provided in respect of transactions amounting to Rs.20,98,00,000/-.
In para-22, he admits that:
"It is true to suggest that in respect of 188 transactions of more than Rs.1 lakh, there were no details provided, which amounted to Rs.69,18,00,000/-. It is true to suggest that the 160 Spl.C.C.No.183/2000 J amount received from ONGC, Oil India Ltd., and JCCI&E might have been included in the said amount of Rs.69,18,00,000/-. It is true to suggest that in the absence of details, it is not possible to analyse the transactions accurately from where the money has come and to whom the money has gone."
Therefore, ongoing through the admission of PW.59, the said computer sheets contained in the Ex.P.68, wherein many transactions does not disclose details and as such as PW.59 himself admitted that unless and until the said transactions are clearly shown in the said analysis statement, it is not possible to accurately say from where the said money has been received and to whom the said money has been paid. Therefore, in view of the above discussion, I am of the considered opinion that the prosecution has utterly failed to prove the Ex.P.68 as a complete and acceptable document in accordance with law.
53. Further, PW.59 admits during the cross- examination what is meant by Diversion of fund:
"Diversion of fund means, the utilization of loan amount for the purpose other than for the purpose for which it was sanctioned."161 Spl.C.C.No.183/2000 J
Further, this witness admits that:
"The purpose of the loan in this case was to execute the work order placed by ONGC. It is true to suggest that the payment made to service providers and vendors in relation to the execution of the work order placed by ONGC and Oil India."
Further, he admits that "I cannot say the payment made by M/s. P.J. Pipes & Vessels Pvt., Ltd., in other banks shown in para No.6 of the transactions part - B at ink page no.2330, is not a diversion of fund. It is true that any payment made by the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., shown in para-5 of the analysis of transactions part-B at ink page no.2330 is not a diversion of fund".
Further, this witness during the cross-examination in para-15 at page No.11 admits that:
"I cannot say whether payments have come back to M/s. P.J. Pipes & Vessels Pvt., Ltd., from various companies since we have not analysed the transactions in the accounts less than for Rs.1 lakh. It is true to suggest that as per the summary of credit entries in accounts with various banks of M/s. P.J. Pipes & Vessels Pvt., Ltd., a sum of Rs.2,03,22,55,144/- was in the credit of four accounts Vijaya Bank as could be seen from the document at ink page no.2331 of Ex.P.68. I cannot say how a sum of Rs.101 crores came to be credited into various accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., of Vijaya 162 Spl.C.C.No.183/2000 J Bank since many transactions under both credits and debits, could not be identified as the details of these transactions were not furnished in the statement of account or in the relative portions."
Further, he admits in the said paragraph that:
"It is true to suggest that M/s. P.J. Pipes & Vessels Pvt., Ltd., might have received the amounts from different entities like that of M/s. Jayanthilal and company which I have shown in my report marked at Ex.P.68(A) at ink page No.2337, which I was unable to analyse since as the details of these transactions were not furnished in the statement of accounts or the relative portions."
Further, this witness finally admits in page No.12 at para-16 that:
"It is true to suggest that it is not mentioned in my report that there is a diversion of funds from M/s. P.J. Pipes & Vessels Pvt., Ltd., to different companies."
Further, during the cross-examination at page No.13, para-18 this witness admits that:
"It is true to suggest that it was not within my purview of inspection whether the decision taken by the board on 30.6.1992 chaired by Accused No.2 was right or wrong."
Further, this witness admits in para-19 as under: - 163 Spl.C.C.No.183/2000 J
"It is true to suggest that by looking to the vouchers and account extract, it is not possible to say there is diversion of fund."
Thereby this witness admits that he has been provided the vouchers and bank cheques to analyse the transaction of M/s. P.J. Pipes & Vessels Pvt., Ltd. Further on bare verification of Ex.P.68 it is seen that in many transactions it is stated as no details. Admittedly all these three officers were not having personal knowledge of the M/s. P.J. Pipes & Vessels Pvt., Ltd., and therefore only on the basis of vouchers furnished to them they cannot analyse and say that there is a diversion of funds of M/s. P.J. Pipes & Vessels Pvt., Ltd. Further, admittedly in order to analyse the fact that there is a diversion of fund by M/s. P.J. Pipes & Vessels Pvt., Ltd., in respect of the loans granted to them, It is the duty of the analyzing officers to verify even the audit report of M/s. P.J. Pipes & Vessels Pvt., Ltd. It is admitted by PW.59 that audit report of the M/s. P.J. Pipes & Vessels Pvt., Ltd., was not made available to them at the 164 Spl.C.C.No.183/2000 J analyzing of the said transaction. Further, in page No.15, at para-22, this witness admits that:
"It is true to suggest that in respect of 188 transactions of more than Rs.1 lakh, there were no details provided, which amounted to Rs.69,18,00,000/-. It is true to suggest that the amount received from ONGC, Oil India Ltd., and JCCI&E might have been included in the said amount of Rs.69,18,00,000/-. It is true to suggest that in the absence of details, it is not possible to analyse the transactions accurately from where the money has come and to whom the money has gone.
Therefore, on reading the evidence of PW.38, 39 and 59, the three officers who have analysed the accounts of M/s.
P.J. Pipes & Vessels Pvt., Ltd., and submitted report as per Ex.P.68 with regard to the diversion of funds of M/s.
P.J. Pipes & Vessels Pvt., Ltd., is said to be not proved beyond all reasonable doubt. Further admittedly in the present case on hand, the Investigating Officer has not been examined in this case.
Further PW.59 the then Senior Manager, Credit Dept., Vijaya Bank who is also one of the team of the officers involved in analyzing the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., and other allied companies as per 165 Spl.C.C.No.183/2000 J Ex.P.68 has deposed in his cross-examination at page No.11 para-15 that:
"I cannot say whether payments have come back to M/s. P.J. Pipes & Vessels Pvt., Ltd from various companies since we have not analyzed the transactions in the accounts less than for Rs.1 lakh. It is true to suggest that as per the summary of credit entries in accounts with various banks of M/s. P.J. Pipes & Vessels Pvt., Ltd, a sum of Rs.2,03,22,55,144/- was in the credit of four accounts Vijaya Bank as could be seen from the document at ink page no.2331 of Ex.P.68. I cannot say how a sum of more than Rs.101 Crores came to be credited into the various accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd of Vijaya Bank since many transactions under both credits and debits, could not be identified as the details of these transactions were not furnished in the statement of account or in the relative portions. It is true to suggested that M/s. P.J. Pipes & Vessels Pvt., Ltd might have received the amounts from different entities like that of M/s. Jayanthilal and company which I have shown in my report marked at Ex.P.68(A) at details of these transactions were not furnished in the statement of accounts or the relative portions."
Further, PW.60 the then Manager of Bank of Indosuez has deposed in examination-in-chief at page No.3 para-4 that:
"After some years, Bank Indosuez received a letter from Vijaya Bank, Excelsior Branch, Mumbai dt: 3.07.1998 asking our bank the 166 Spl.C.C.No.183/2000 J details of the payment made to Vijaya Bank. We have given reply to the said letter. Now I see the said reply letter dt: 15.07.19998, it bears my signature. It is marked at Ex.P.76. Now I see the statement of account of M/s. P.J. Pipes & Vessels Pvt., Ltd., M/s. Boiler Tube Co., and M/s. P. Jayanthilal and Co., maintained in our bank with covering letter. The said statement of accounts are together marked at Ex.P.77."
During the cross-examination, this witness stated that:
"It is true to suggest that the entire discounted amount of the letter of credit was paid to Vijaya Bank and no account is paid to the beneficiary. It is true to suggest that the letter of credit was issued for payment of charges of customs clearance. As per the terms and conditions of the Letter of Credit, we have discounted the document and made payment to Vijaya Bank through a banker's cheque. There was no diversion of the funds by Bank Indosuez."
So also PW.61 the then Chief Manager, State Bank of India, during the chief-examination at page No.2 has admitted para-3 that:
"From the said two collection accounts maintained by M/s. P.J. Pipes & Vessels Pvt., Ltd in our branch, we never allowed the M/s. P.J. Pipes & Vessels Pvt., Ltd to draw the amount from the said accounts. The entire amount received from ONGC to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd will be remitted to the account of M/s. P.J. Pipes & Vessels Pvt., Ltd maintained in Vijaya Bank as 167 Spl.C.C.No.183/2000 J per the request letter of Vijaya Bank. Witness volunteers that the collection accounts were also opened at the request of Vijaya Bank."
Thereby this witness also fortifies the fact that the said amount was used for the purpose for which the said loan was granted. So also PW.62 the Sales Executive of M/s. Gaurav Containers Ltd., during the cross-examination at page No.2 has admitted that:
"It is true to suggest that the Rs.90 lakhs was received by our company in the year 1993 by the cheque of Central Bank of India."
So also in para-4 he admits that:
"The debit note raised was Rs.1.05 Crores. As against the said debit note, we received the payment of Rs.90 lakhs."
PW.7, the then DGM, in Vijaya Bank, Mumbai Zone from the year 1991 to 1993, Vijaya Bank, Excelsior Mumbai under the control jurisdiction of Vijaya Bank, Mumbai Zone has deposed during the cross-examination at page No.3, para-6 admits that:
"It is true to suggest that lot of materials purchased by M/s. P.J. Pipes & Vessels Pvt., Ltd., through L.C were lying in the Customs Dept.'s godown for payment of Custom duty. It is true to suggest that those raw-materials were 168 Spl.C.C.No.183/2000 J required to perform the contractual obligations by M/s. P.J. Pipes & Vessels Pvt., Ltd in favour of ONGC. It is true to suggest that the credit facilities were required by M/s. P.J. Pipes & Vessels Pvt., Ltd to get rid of Contractual obligations in favour of ONGC. It is true to suggest that it was in the best interest of the bank also to consider the Credit proposals of M/s. P.J. Pipes & Vessels Pvt., Ltd because the Bank money was also involved at risk. Therefore, considering the position of M/s. P.J. Pipes & Vessels Pvt., Ltd., the Bank thought it fit for grant of additional credit facilities to the said company for payment of the custom duty and to meet out other obligations."
Thereby ongoing through the entire evidence referred above, even though the said credit facilities were also used for the payment of the customs duty it was in the best interest of the company and in order to get rid of Contractual obligations of M/s. P.J. Pipes & Vessels Pvt., Ltd, the said fund was made use of. Therefore, it cannot be said that the M/s. P.J. Pipes & Vessels Pvt., Ltd., has diverted the said funds for the purpose other than for which it has been used. Therefore, on reading the evidence of PW.38, 39 and 59, the three officers who have analysed the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., and submitted report as per Ex.P.68 with regard to 169 Spl.C.C.No.183/2000 J the diversion of funds of M/s. P.J. Pipes & Vessels Pvt., Ltd., and other related witness discussed above, prosecution has failed to prove beyond all reasonable doubt about diversion funds by the PJ pipes and company as alleged. Further admittedly in the present case on hand, the Investigating Officer has not been examined in this case.
54. Now, I would like to discuss about the allegations made by the prosecution that Indian Bank, Fort Road Branch, Mumbai to Vijaya Bank, Excelsior Branch, Mumbai in finance the M/s. P.J. Pipes & Vessels Pvt., Ltd., As per the discussions made in the consortium meeting held on 4.2.1989 at the ration of 60: 40 of Vijaya Bank and Indian Bank, it is the specific allegation of the prosecution that in furtherance of the criminal conspiracy accused No.7 to 10 in connivance with the accused No.1 to 6 have obtained the above said credit facilities during the period from 1987 to 30.6.1992 and dishonestly and fraudulently misrepresented the facts of the Vijaya Bank, Excelsior Branch, Mumbai caused to 170 Spl.C.C.No.183/2000 J the Vijaya Bank wrongful loss of Rs.29.35 crores excluding the interest as on 31.3.1993.
55. In this regard, even though the prosecution has alleged that total loss of Rs.29.35 crores has been caused to the Vijaya Bank, but it has not disclosed what is the extent of loss caused in respect of each loan till 30.6.1992. Because as per the allegation itself, they have been shown the figure of 29.35 crores excluding the interest as on 31.3.1993. Further, even the prosecution has not shown anywhere by way of document as to what was the part played by the each of the accused in causing loss to the bank and what was the extent of liability each of the accused in causing the said loss. Further, admittedly the complaint lodged in this case by the complainant is mainly based on the internal investigation report as per Ex.P.89. Admittedly basing on Ex.P.89 the Investigating Officer has conducted investigation and he has taken out the process of analysis report as per Ex.P.68. Further admittedly at the time of analyzing the report as per Ex.P.68 in order to 171 Spl.C.C.No.183/2000 J assess the diversion of funds by the M/s. P.J. Pipes & Vessels Pvt., Ltd., they have restricted to analyse the said accounts of the said M/s. P.J. Pipes & Vessels Pvt., Ltd., till 30.6.1992 only. Further, admittedly even though the PW.38, 39 and 59 have been asked to analyse the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd., during 1998, I do not understand why the Investigating Officer has restricted his investigation i.e. loss caused to the Vijaya Bank, Excelsior Branch only upto 30.6.1992,even though in the charge sheet it is alleged that by act of the accused it has caused loss to Vijaya Bank to the tune of 29.35 crores as on 31-3-1993 (excluding the interest.)
56. Further, admittedly the Investigating Officer has not been examined in this case. Therefore, the reason for restricting the investigation in respect of alleged loss caused to the bank up to 30.6.1992 has not been forthcoming. It was best known to the Investigating Officer. Unfortunately the Investigating Officer is no more. Even otherwise, now I would like to discuss whether in fact Vijaya Bank has incurred loss caused 172 Spl.C.C.No.183/2000 J due to the transactions made with the M/s. P.J. Pipes & Vessels Pvt., Ltd. In this regard, PW.2 O.S Ramamurthy, the then General Manager, Vijaya Bank, Central Accounts Department, H.O., Bengaluru during the examination-in-chief deposed at last para of the page No.1 of his deposition that:
"The rehabilitation proposal was not considered by the Vijaya Bank as it was not viable. The reasons assigned by the said company were very high rate of interest charged by the bank and bank not extending timely financial assistance. The main reasons for the accounts becoming overdue were high rate of interest charged by the bank and bank not extending timely financial assistance and charges in the Government policies relating to the custom duty and adverse fluctuations in the rate of exchange of US dollar."
Further, PW.12 M. Balachandran, the then Chief Manager, Credit Operations, Vijaya Bank, Head Office during his cross-examination at page No.9 in para-18 after five lines that: -
"It is true to suggest that the causes noticed by me in Ex.P.D9 adverse exchange fluctuation, change in the Government policy, delay on the part of ONGC in lifting the finished products and consequent mismatching in cash flow and the interest rate levied by the lenders leading to 173 Spl.C.C.No.183/2000 J high financial cost and erosion of security."
Further, PW.2 in the cross-examination in page No.2, above 6 lines from the bottom stated as under: -
"It is true to suggest that as per the civil suit the outstanding dues were 59.88 crores as on 31.03.1993 inclusive of interest up to that date. I do not remember the exact quantum of interest and the rate of interest was very high, some time to the order of 24% to 25% per annum. I cannot say the total interest that was paid by the company to the Vijaya Bank."
Therefore, on reading the evidence of PW.2 and PW.12, the officials of the Vijaya Bank, it can be gathered that the interest charged on the credit facility availed by M/s. P.J. Pipes & Vessels Pvt., Ltd., was paying interest up to the extent of 24% to 25% on credit borrowed by it.
57. Further the accused No.2 K. Shivarama Shetty who worked as a Chairman and Managing Director of the Vijaya Bank, Bengaluru for the period 22.6.1991 to 30.6.1992 in his statement u/s 313 of Cr.P.C., has submitted a letter dated 20.6.1992 addressed to the Chief Officer, Reserve Bank of India, Mumbai written by 174 Spl.C.C.No.183/2000 J the accused No.1 to K.Sadananda Shetty wherein in para-3 of the said letter it is stated as under: -
"Subsequent to the implementation of the project, the company had to face several problems as under: -
(a) Break down of threading machine.
(b) Labour problems.
(c) Delay in getting pipes from the foreign suppliers.
(d) Escalation in the price of imported pipes due to exchange fluctuations.
(e) Introduction of customs duty for imported pipes which was not there when the project was commenced (i.e., 110% to 140%).
(f) High interest cost due to delay in execution of contracts and development of LCs and Bank Guarantees.
(g) Delayed receipt of incentives from the Government including duty draw back.
(h) Non-lifting of finished goods by ONGC/OIL India Ltd., in time."
Therefore, considering the above facts, it goes to show that the M/s. P.J. Pipes & Vessels Pvt., Ltd., could not able to process its financial dealings with the Vijaya Bank due to the loss caused to it for the reasons stated above. In turn, it has also adversely affected Vijaya Bank also. Further, admittedly as per the evidence of the witness and the documents produced by the prosecution it 175 Spl.C.C.No.183/2000 J reveals that the Vijaya Bank has collected maximum interest on the loans, commission on the Bank Guarantees and LCs. Further, in fact as per the evidence of the witness, it also discloses that it was not the intentional act of the M/s. P.J. Pipes & Vessels Pvt., Ltd., that has been caused loss to the Vijaya Bank, it is due to the reasons which was beyond the control of M/s. P.J. Pipes & Vessels Pvt., Ltd., which has caused loss to the Vijaya Bank. Further, admittedly none of the witnesses have specifically deposed that it is the due to act of any of the accused No.1 to 6 who have misused or abused their power and have granted the loan, bank guarantees or the LCs illegally without due following process of banking practice. Therefore, it cannot be said that the accused No.1 to 6 are the cause for the loss caused to the Vijaya Bank.
58. Now, I would like to discuss Ex.P.89 the internal investigation report submitted on 15.2.1993. It is the case of the prosecution that as per the internal investigation conducted by the Vijaya Bank, they have 176 Spl.C.C.No.183/2000 J found some irregularities in sanctioning and processing the said loan in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd. Further, it is also the case of the prosecution that accused No.1 to 6 without following due procedure as required by the bank have sanctioned the said loans which have not been properly repaid and the said credit facility has been misused and diverted by the M/s. P.J. Pipes & Vessels Pvt., Ltd., for the purpose other than for which the said loan has been lent.
59. The prosecution in order prove Ex.P.89, the internal investigation report has examined PW.65 G.R. Krishnan. Now I would like to analyse and appreciate the evidence of PW.65. Admittedly, even though Ex.P.89 the internal investigation report is prepared by the joint efforts of the four officials i.e., (1) PW.65 G.R. Krishnan, (2) Vittal P. Shetty, (3) Chandrashekar, (4) Ramananda Rao. The prosecution has cited Chandrashekaran as CW- 59, Ramananda Rao as CW-39. Admittedly, at the time of trial, it is reported that Ramanda Rao CW-39 has dead. Hence he has not been examined. Further, 177 Spl.C.C.No.183/2000 J admittedly CW-69 Chandrashekaran and Vittal P. Shetty even though were alive were not examined by the prosecution. Therefore, the only witness who has spoken about Ex.P.89 is none other than PW.65 G.R. Krishnan. In the initial stage of examination-in-chief of PW.65 G.R. Krishnan, the learned P.P. has not shown Ex.P.89 to him and got it marked, but at later stage he was recalled on 19.8.2017 and the Ex.P.89 was marked. Further, during the examination-in-chief of PW.65 in page No.9 he was recalled he has deposed that "Said investigation report Ex.P.89 is containing 4 annexures. The said Ex.P.89 contains totally 163 pages. My contribution to the said consolidated investigation report is at para 19 of page No.37and it is continued till page No.40, so also, the said Ex.P.89 consolidated investigation report contains my conclusion at page 8 and 10 of page No.133." Therefore, ongoing through the evidence of PW.65, he only speaks about his investigation from para-19 in page No.37 to page No.40 i.e., even though the said Ex.P.89 report contains the 163 pages, out of them he speaks only of 3 pages. Therefore, when the prosecution has failed to examine other officers who have prepared the 178 Spl.C.C.No.183/2000 J said internal investigation report i.e., V.P. Shetty and Chandrashekaran, the prosecution has failed to prove the said report as per Ex.P.89. Further, this witness admits during the cross-examination at page No.9 three lines above from the bottom "It may be true that after conclusion of the said enquiry, the Ex.P.89 consolidated investigation report was not accepted by CVC."
Further, this witness admits in the cross-examination at page No.11 after two lines of para-13 that he being worked as a Senior Manager of Vijaya Bank was having sanctioning powers of granting loan to the maximum extent of Rs. Two lakhs. In this regard, the learned advocate for accused argued that when an officer who is having a power to sanction maximum loan of Rs. Two lakhs, how could he appreciate and gives his report with regard to the sanction of crores of rupees. In this regard, I do accept that admittedly PW.65 the Senior Manager of Vijaya Bank is not having special qualification to scrutinize and investigate and to give report as per Ex.P.89. More particularly when he does not have 179 Spl.C.C.No.183/2000 J knowledge of processing, sanctioning of loan of more than Rs. Two lakhs, it cannot be said that the said report given by the PW.65 will have some weightage under the law. Further, the said witness admits that Ex.P.89 was prepared by team head B. Ramananda Rao CW-39. Further, he also admits that at the time of conducting of the internal investigation he has prepared note to arrive at a conclusion as stated in para-8 to 10 of page No.133. But he also admits that his working notes were not found in Ex.P.89. Further, this witness also admits during the cross-examination that he has been entrusted to report about the irregularities of the accounts of M/s. P.J. Pipes & Vessels Pvt., Ltd. According to him the irregularities generally are non-compliance of the sanction order, non- monitoring of transactions in the account, Credit facilities sanction to the party, Periodical conducting of the stock inspection, exercising precautions while opening letter of credit and conduct of the parties in operating the account. Further, this witness during the cross-examination admits that at the time of preparation 180 Spl.C.C.No.183/2000 J of the said internal investigation report he has been asked to follow circulars and manuals of the bank. But during the cross-examination at page No.13 after three lines from the top he admits that:
"In fact, I have not referred the provisions of the said circulars, manuals while giving my opinion with regard to irregularities in the report at Ex.P.89. My conclusion that is referred at page No.38 of Ex.P.89 are based on the internal inspection report conducted by internal inspector. I do not know the name of the said internal inspector. Ex.P.89 is not annexed with the said internal inspection report. I have not personally enquired with the said internal inspector about the observations made in his report."
Therefore, ongoing through the said admission of PW.65 he claims that he has based his report on the basis of the report of the internal auditor and he has not produced said internal inspector report along with Ex.P.89.He has also admitted that he has not personally enquired with the said internal inspector about the observations made in his report. Thereafter, PW.65 is not having extra qualification and admittedly he was also not having much experience in following banking procedures, as he 181 Spl.C.C.No.183/2000 J without observing the inspection report of the internal auditor, he has given his report in Ex.P.89, which cannot be accepted. Further, ongoing through the Ex.P.89 at page No.135 the last par which I would like to reproduce as under: -
"Clarification has been called for from as many as 5 officials of the bank in this regard, of whom 4 officials have submitted their comments/explanation, which have been dealt with by us and enclosed to this report as Annexures 1 to 4. In respect of 9 officials, the comments are being called for and supplementary report will be submitted on receipt of the same."
60. Therefore, on going through the observations made in last para of page No.135 of Ex.P.89 it goes to show that the explanation from the 9 remaining officials have not been submitted along with Ex.P.89. As such PW.65 admits that Ex.P.89 is not a final report and complete report. Further, ongoing through the entire report nowhere the said report speaks that an illegality has been committed by the said erred officers in processing and sanctioning of the said loan. In other words the said report speaks that there are some 182 Spl.C.C.No.183/2000 J irregularities, serious omissions, commissions and lapse on the part of the officials at various levels. Admittedly, the said irregularities omissions and commissions have been discussed, accepted and ratified in the board meetings, sometimes even with the displeasure. Therefore, the said act of the accused even if accepted as per the Ex.P.89, which is even though is not considered as complete report does not amount commission of the offences as alleged by the prosecution.
61. Now, I would like to discuss about the ingredients of the offences alleged against the accused and whether the prosecution proved that the said accused have committed offences as alleged. Firstly it is the case of the prosecution that the accused No.8 to 10 have cheated the Vijaya Bank by obtaining the credit facilities through the accused No.1 to 6 and caused loss to the Vijaya Bank. In this regard, as per the ruling reported in (1996) 9 SCC 32 Abdul Fazal Siddiqui vs. Fatehchand Hirawat and another wherein their lordships have discussed that 183 Spl.C.C.No.183/2000 J "6. The expression 'dishonestly' has been defined in Section 24 IPC as "whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly':. 'Fraudulently' has been defined in Section 25 as "a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise".
Further, as per the ruling reported in (2002)1 SCC 241 in S.W. Palanitkar vs. State of Bihar & Anr., wherein their Lordships have held that:
D. Penal Code, 1860 - Ss. 420 and 415 - Cheating - Stage at which fraudulent or dishonest intention should exist in order to make out the offence of cheating - Held, such intention must be shown to exist at the time of making of the inducement - Otherwise, mere failure to keep up promise subsequently, held, cannot be presumed as an act leading to cheating.
Therefore, as per the observations held by the Hon'ble Supreme Court of India in order to prove the offence of cheating the prosecution has to prove that the accused had intention to cheat exists at the time of making of the inducement. If we consider this ingredient with the facts of this case, admittedly the PJ Pipes & Vessels Ltd., has applied for the credit facilities with the Vijaya Bank by 184 Spl.C.C.No.183/2000 J submitting loan applications through proper channel.
Further, the said applications have been processed as per the Banking Practice and the said application was allowed and thereafter due to the loss caused to the PJ Pipes & Vessels Ltd., the accused No.8 to 10 who are the Directors of the said company failed to repay the credit facilities entirely even though they have paid part of the due amount to the Vijaya Bank. Therefore, it clearly goes to show that there was no any malafide intention or dishonest intention on the part of the M/s. P.J. Pipes & Vessels Ltd., to cheat the Vijaya Bank by dishonestly obtaining credit facilities from the Vijaya Bank.
Therefore, in view of the oral and documentary evidence discussed in the earlier part of this judgment, the prosecution has nowhere proved that that there was a dishonest and malafide intention on the part of the accused to cheat the Vijaya Bank as alleged by leading cogent, convincing and corroborative evidence.
Further, the prosecution has also alleged that the accused have committed the offence of criminal breach of 185 Spl.C.C.No.183/2000 J trust. In this regard, in the ruling reported in (2002)1 SCC 241 in S.W. Palanitkar vs. State of Bihar & Anr., wherein their Lordships have held that:
A. Penal Code, 1860 - Ss. 405 and 406 - Criminal breach of trust - Ingredients of - Mens rea, held, is a necessary ingredient without which a breach of trust may not result in criminal breach of trust.
One more ruling reported in (2009) 6 SCC 77 in S.V.L. Murthy vs. State by CBI, Hyderabad that:
A. Penal Code, 1860 - Ss. 415, 420, 405, 409 and 120B - Cheating - Ingredients - Existence of an intention to cheat at the time of making initial promise or formation of contract - Importance of and need to prove - Held, complainant is required to show that accused had fraudulent or dishonest intention at the time of making promise or representation - In the absence of culpable intention at the time of making initial promise, no offence is made out under S. 420.
Therefore, in order to prove the offence of criminal breach of trust, the prosecution has proved that there exists Mens rea to commit the said offence. In this regard, in view of the facts and circumstances and the oral and documentary evidence discussed in the earlier part of this judgment, no witness or no documents have been 186 Spl.C.C.No.183/2000 J produced by the prosecution to show that accused No.1 to 6 have mens rea to cheat the Vijaya Bank dishonestly committed the offence of criminal breach of trust as alleged by leading cogent, convincing and corroborative evidence.
Further, it is also the case of the prosecution that the accused No.1 to 10 have formed into criminal conspiracy in order to cause wrongful loss to the Vijaya Bank. In this regard, as per the ruling reported in (2005) 12 SCC 631 in K.R. Purushothaman vs. State of Kerala, wherein their Lordships have held that A. Penal Code, 1860 - Ss. 120-B, 403 and 477- A - "Criminal conspiracy" - Meaning - Essential requirements to constitute the said offence - Nature of proof - Period of effectiveness of conspiracy - Held, conspiracy is an agreement between two or more persons for doing an illegal act or an act by illegal means - Unlawful agreement is a sine qua non for constituting offence under IPC and not an accomplishment - Agreement may be express or implied or partly express and partly implied - Not necessary that all the conspirators must know each and every detail of the conspiracy - All conspirators need not take active part in the commission of each and every conspiratorial act - But, mere knowledge, even discussion, of the plan would not per se constitute conspiracy - Offence 187 Spl.C.C.No.183/2000 J continues till the termination of agreement - Conspiracy can be proved by circumstantial evidence - Each one of the circumstances should be proved beyond reasonable doubt - Circumstances proved must form a chain of events from which the only irresistible conclusion is about the guilt of the accused which can be safely drawn, and no other hypothesis against the guilt is possible - On facts, it could not be said that appellant Asstt. Commissioner entered into a conspiracy with A- 3 to misappropriate gold used in making ornament golaka for temple in question - Hence, appellants conviction under S. 120-B not sustainable - No evidence to pass conviction under Ss. 403 and 477-A. Further, keeping in view the ingredients of the offence of criminal conspiracy as held by the Hon'ble Supreme Court of India referred above. Admittedly, in the present case on hand, accused No.1 the Chairman and Managing Director of the Vijaya Bank, retired on 1990 thereafter the accused No.2 succeeded in till 30.6.1992. So also accused No.6 as Chief Manager from 5.5.1996 to 20.10.1997 and thereafter accused No.4 succeeded in. in other words by considering their period of office held by the accused it cannot be said that accused No.1 to 6 formed into criminal conspiracy at one time as alleged.188 Spl.C.C.No.183/2000 J
Further, admittedly none of the witnesses or documents referred above will speak about the fact that there was a conspiracy held between the accused in order to cause loss to the Vijaya Bank or cheat Vijaya Bank as alleged. None of the witnesses have specifically deposed that the Vijaya Bank has been caused to loss by any of the act of the accused. However, there are some allegations that the credit facilities were granted to the M/s. P.J. Pipes & Vessels Pvt., Ltd., without following due procedure. In this regard, even if there are some irregularities in following the banking practice it cannot be said that it is a criminal act which ends in constitution of offence of criminal conspiracy as alleged. Further, admittedly most of the credit facilities granted to M/s. P.J. Pipes & Vessels Pvt., Ltd., have been repaid by them and even if there is non-payment of the portion of the credit facilities, it can be said to be a civil liability and admittedly the Vijaya Bank along with Indian Bank have filed a civil suit for recovery of the amount payable by the M/s. P.J. Pipes & Vessels Pvt., Ltd. Therefore, the said act of the 189 Spl.C.C.No.183/2000 J accused No.1 to 10 cannot be said to be a criminal conspiracy formed in order to cause loss to the Vijaya Bank as alleged by leading cogent and corroborative evidence.
62. Now, I would like to discuss that it is the case of the prosecution that accused No.1 to 6 have committed offence of criminal misconduct punishable u/s 13(2) r/w 13(1)(d) of PC Act. In this regard, none of the witnesses have spoken against the accused that they have been benefited or taken any illegal gratification by virtue of the sanction of credit facilities or disbursement of the said loan facility to M/s. P.J. Pipes & Vessels Pvt., Ltd. At this stage, I would like relay on ruling reported in (2005) 12 SCC 631 in K.R. Purushothaman vs. State Kerala that:
B. Prevention of Corruption Act, 1988 - S. 13(1)(d) - Conviction under - Evidence required for, restated - No evidence on record to prove that accused had obtained for himself or for any other person any valuable thing or pecuniary advantage - Held, accused could not be convicted under S.13(1)(d).190 Spl.C.C.No.183/2000 J
63. Further, at this stage I would like to discuss that admittedly in the present case on hand, M/s. P.J. Pipes & Vessels Pvt., Ltd., has availed a heavy credit facility from the Vijaya Bank. Therefore, in order to gain a good business for the bank and in order to earn profit for the Vijaya Bank the accused No.1 to 6 have acted bonafidely in discharge of their official duties. In this regard, it has already deposed in evidence that the decisions have been taken by the officers in the best interest of the bank. In this regard, I would like to rely upon the ruling reported in 2009(8) SCC 617 in State of Madhya Pradesh vs. Sheetla Sahai and others, wherein their Lordships have held that:
A. Prevention of Corruption Act, 1988 - Ss. 13(1)(d) (ii)-(iii) r/w S. 13(2) and S. 120-A of Penal Code, 1860 - Criminal misconduct - What is - Error of judgment in determining public interest when issue thrown up as part of discharging administrative duties - Need to render wrongful gain upon oneself or cause loss to State - Contractors providing stones from alternate quarry reserved for them by Department, and claiming payment of additional leads involved in ferrying stones from changed quarry located 22 km away from site (original sanctioned quarry was 12 km from 191 Spl.C.C.No.183/2000 J site) - Apprehending that contractors may put an end to contract and that calling new tenders could increase cost jeopardizing the completion of project undertaken with World Bank's assistance, respondent authorities sanctioning payment of additional leads - Culpability of, under Ss.13(1)(d)(ii)-(iii) of Act of 1988 - Held, whether completion of project within a time-
frame or sticking to terms of the contract with possibility of abandonment of work by contractors would be in public interest, was to be decided - Decision was taken collectively by various authorities which were ad idem in their view in the decision making process - Decision could be an error of judgment but there was nothing to suggest that authorities abused their position or took decision to cause any wrongful gain to themselves or to a third party or for causing wrongful loss to State or to provide pecuniary advantage to contractors without any public interest - No criminal misconduct, held, was therefore committed and hence no offence - Further held, reserving new quarry was a valid conscious decision without which further excavation was not possible unless contractors were granted licences in their favour under Mines and Minerals (Development and Regulation) Act, 1957 - Penal Code, 1860 - Ss.
120-A and 120-B - Government Contracts/Tenders - Performance of contract - Discretion available to governmental authorities to ensure due execution of contract - Contract and Specific Relief - Contractual Obligations and Rights - Administrative Law -
Administrative action - Administrative or Executive function - Public administration - Reasonableness in action - Mines and Minerals (Development and Regulation) Act, 1957 - S.4 - 192 Spl.C.C.No.183/2000 J
Words and Phrases - "Criminal misconduct" - Service Law - Misconduct.
One more ruling reported in (2005) 12 SCC 631 in K.R. Purushothaman vs. State Kerala that:
B. Prevention of Corruption Act, 1988 - S. 13(1)(d) - Conviction under - Evidence required for, restated - No evidence on record to prove that accused had obtained for himself or for any other person any valuable thing or pecuniary advantage - Held, accused could not be convicted under S.13(1)(d).
Further, at this stage, I would like to discuss with most of the witnesses have deposed that the said act of the accused No.1 to 6 in sanction of the credit facility was after following due process of Banking Practice and in the best interest of the Bank. In this regard, I would like to discuss the evidence of the witness i.e., PW.1 the then Chief Manager of Vijaya Bank, Excelsior Branch, Mumbai from 1996 to 2000 during the cross-examination at page No.3 last two line from the bottom has admitted that:
"It is true to suggest that the facilities provided to M/s. P.J. Pipes and Vessels Ltd., are permissible banking activities."193 Spl.C.C.No.183/2000 J
So also PW.2 the then General Manager, Vijaya Bank, Central Accounts Department, H.O., Bengaluru has admitted during the cross-examination at page No.3 last line that:
"It is true that all the sanctions were either with the boards approval or were rectified by the board."
Further, PW.7 has deposed in respect of the disbursement of the part of the loan for payment of customs duty has admitted during the cross-examination at page No.4 that:
"Therefore considering position of P.J. Pipes & Vessels Ltd., the Bank though it fit for grant of additional credit facilities to the said company for payment of custom duty and to meet out other obligations."
PW.12, the then Chief Manager, Credit Operations, Vijaya Bank, Head Office, Bengaluru admitted at page No.8, para-16 that:
"It is true to suggest that in many credits of M/s. P.J. Pipes and Vessels Ltd., the board directly approved sanction to the said company. It is true to suggest that to a larger exgent, the credit limits sanctioned to M/s. P.J. Pipes and Vessels Ltd., were adequately secured by tangible assets. It is true to suggest that all the 194 Spl.C.C.No.183/2000 J approvals, sanctions have been made in favour of M/s. P.J. Pipes and Vessels Ltd., are in accordance with the prescribed Rules and Regulations of the Bank from time to time."
PW.12 in his cross-examination at page No.7, para-15 after three lines.
"It is true to suggest that the sanction of bridge loan as per the normal banking practice in the banking business. It is true to suggest that the bridge loan was promptly repaid within time by M/s. P.J. Pipes and Vessels Ltd.,"
Further, the said witness during the cross-examination in page no.10 at para-19 has deposed in the last three lines that:
"It is true to suggest that the said decision was taken in the interest of Vijaya Bank. Witness volunteers that all decisions were taken in the best interest of the Bank only."
Further, PW.11 the then Chief Manager, Finance & Accounts in ONGC, Mumbai Regional Business Centre has admitted during the cross-examination at page No.4 that:
"It is true to suggest that according to my knowledge, there was no any violation in terms of payment made to M/s. P.J. Pipes and Vessels Ltd.,"195 Spl.C.C.No.183/2000 J
Further, PW.17, the then General Manager, Vijaya Bank, Head Office, Bengaluru has admitted during the cross- examination at page No.6 above four lines from para-13 that:
"It is true that in respect of loans and other credit facilities sanctioned in favour of M/s. P.J. Pipes and Vessels Ltd., all the proper procedure and norms have been followed at all levels."
Further, in para-13, this witness admits that:
"I have not come across any spot sanction of any credit facility to the account holder in Vijaya Bank."
Further, PW.19, the then Senior Manager, Vijaya Bank, Zonal Office, Mumbai has admitted during the cross- examination in respect of the spot sanction at para No.4 that:
"I do not remember the date on which I put up note to AGM. Even in my note, I recommended for sanction since it was urgent in nature and going to regularize the irregular account. There is nothing like spot sanction in the Banking procedure. As I know, in the present case, all sanctions have been made by following due procedure and Rules of the Bank."196 Spl.C.C.No.183/2000 J
Further, PW.26, the then Workman Director of the Board of Directors of Vijaya Bank during the cross-examination at page No.3 at para-6 admits that:
"According to M/s. P.J. Pipes and Vessels Ltd., was not a bad company and they were doing business and during their business they may have had over exposure."
Further, in page No.4 after four lines of the para-7 he admits that:
"It is true that all the decisions with regard to M/s. P.J. Pipes and Vessels Ltd., were approved and ratified by the Board of Directors during the tenure of accused No.1. Witness volunteers that subject to certain view and objections raised, which were discussed in the decision."
Further, in para-8 he admits that:
"It is true that the decisions were taken in the board meeting unanimously after I was convinced."
Therefore, on going through the admission of thePW.1,2,7,12,11,17and 26 above referred said witness it clearly goes to show that all the credit facilities extending and granted in favour of M/s. P.J. Pipes and Vessels Ltd., such as bank guarantees, bridge loan, cash 197 Spl.C.C.No.183/2000 J credit, import and export letter of credits were granted and extended by following due bank transactions. Further, as already discussed in the above said paragraphs even under some circumstances, the officers have followed due the procedures with a bonafide intention; admittedly such acts were rectified by the Board of Directors of the Vijaya Bank. Therefore, when the act of the officers are rectified by the board, it cannot be said that such an act of the officers amounts to any offence or illegality as alleged. Admittedly the PWs.1, 2, 7, 12, 11, 17 are the officers of the Bank, holding responsible posts, their evidence in respect of following due procedures is to be accepted. Therefore, in view of the above discussion, I am of the considered opinion that the prosecution has failed to prove that accused No.1 to 6 have not followed the due procedures of banking practice in sanctioning and extending the credit facilities and they have gained unlawfully. Thereafter the prosecution has failed to prove that the accused No.1 to 6 have committed offence of criminal misconduct as alleged beyond all 198 Spl.C.C.No.183/2000 J reasonable doubts by leading a cogent, convincing and corroborative evidence.
64. In view of the above discussion, I would like to summaries the factors which lead to total failure of the prosecution to prove the guilt of the accused beyond reasonable doubt are as under: -
Firstly, a doubt arises as to why the complaint lodged by the PW.42 dated 4.8.1995 alleging malafideness of the operation of the credit facilities granted in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., more particularly in the said complaint, there is an allegation against the Directors of the M/s. P.J. Pipes & Vessels Pvt., Ltd. The said complaint has not been registered and inquired into. Thereafter similar complaint making allegations against the accused No.1 to 10 has been registered. In this regard, the Investigating Officer has not been examined as such the question of non-
registration of the FIR on the basis of the complaint dated 4.8.1995 remains unanswered.199 Spl.C.C.No.183/2000 J
Secondly, Admittedly the accused No.1 worked as General Manager and Chairman of the Vijaya Bank from 1980 to 20.9.1990 and accused No.2 worked as General Manager and Chairman of the Vijaya Bank from 21.9.1992 to 30.6.1992 even after the retirement of the accused No.2 further credit facilities were extended to the M/s. P.J. Pipes & Vessels Pvt., Ltd., but the bank has not inquired into and restricted its allegation on the internal investigation report as per Ex.P.89 only up to 30.6.1992, this fact has not been made clear. Further, admittedly as the Investigating Officer has not been examined, this question also remains unanswered and which creates doubt giving room for involving the present accused No.1 to 6 with the malafide intention.
Thirdly, out of the 120 witnesses examined by the Investigating Officer during the investigation, for the best reasons known to the prosecution or due to the death of the some witnesses or due to non-availability of some witnesses only 68 witnesses have been examined. As such non-examination of the material witnesses 200 Spl.C.C.No.183/2000 J including Investigating Officer is fatal to the case of the prosecution.
Fourthly, out of 449 documents collected by the Investigating Officer during the investigation, only 89 documents were marked. This also leads to not proving many of the documents, in turn failed to prove the guilt of the accused beyond all reasonable doubt.
Further, most of the documents are not secured for the purpose of investigation such as letters of sanction the loans, sanction of internal and foreign letter of credits, sanction of the bank guarantees, sanction of the bridge loans and not produced. Further, the cheques, vouchers, including debit and credit and other documents relied by the witness were not secured and produced by the prosecution, which is total failure of the prosecution to prove the allegations against the accused.
Fifthly, admittedly the Vijaya Bank has directed the Chief Vigilance Officer of Vigilance Department to enquire about the irregularity and illegality in process and sanction of the credit facilities extended in favour of 201 Spl.C.C.No.183/2000 J M/s. P.J. Pipes & Vessels Pvt., Ltd., and admittedly in this regard the Chief Vigilance Officer has submitted his report as per Ex.P.89. Admittedly, the charges leveled against the bank officers in the said internal investigation report are same as found in the present charge sheet. Further, admittedly 20 bank officials have been named in the said internal investigation report as per Ex.P.89, who are the cause irregularities of the said credit facilities in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd. But surprisingly the prosecution has picked and selected 6 of such officers excluding the other 14 officers named in the said internal investigation report as per Ex.P.89. No proper reasons have been stated by any of the witnesses in picking up the accused No.1 to 6 for the said allegations made in the charge sheet. At this stage, I would like to rely upon the ruling reported in (2009) 8 SCC 617 in State of Madhya Pradesh vs. Sheetal Sahai and others wherein their Lordships have held at F. Constitution of India - Arts. 14 and 21 - Discrimination - Criminal trial - Prosecution of State Officials in pick-and-choose manner - A 202 Spl.C.C.No.183/2000 J few who held office only for short periods or who had retired before process of impugned decision-making began, proceeded against - A few others connected with impugned decision of the Department, left out - Discrimination so made, deprecated - Criminal Procedure Code, 1973 - S. 223 - Persons who may be charged jointly - Prevention of Corruption Act, 1988 - Ss. 13(1)(d)(ii)-(iii) - Criminal Trial - Prosecution - Discrimination.
Therefore the act of Investigating Officer in picking only six officers out of 20 is not explained. At the cost of repetition, I repeat as the Investigating Officer has not been examined in this case, as such the said question also remains unanswered.
Further, admittedly excluding accused No.1 to 6, out of the 14 other bank officials who are named in said the internal investigation report only 11 officers have been cited as a witness by the prosecution, unfortunately only 8 of such officers have been examined by the prosecution and all the other officers are not examined and other three officers have not at all been cited as a witness. Obviously when the erred officials as per the Ex.P.89 internal investigation report were cited as witness, 203 Spl.C.C.No.183/2000 J naturally they will not support the prosecution case, because they were also part and parcel of the erred 20 officers as per the internal investigation report at Ex.P.89. This also caused one of the grounds in failure of the prosecution to prove the allegations against the accused.
Sixthly, Admittedly, as per the evidence and documents on record, the charges made out in the internal investigation report at Ex.P.89, which is base for lodging the complaint in the present case on hand, out of the said 6 officers accused No.1 to 6, three officers i.e., accused No.4 to 6 were exonerated by the Departmental Inquiry held by the Central Vigilance Commission as per Ex.D2 to D7 and the said departmental proceedings were accepted by the disciplinary authority in accordance with law. Further, admittedly at the time of filing charge sheet and before getting sanction by the competent authorities i.e. by the PW.43 and 64, the said sanctioning authorities have not considered the said exoneration of the accused No.4 to 6 before issue of the sanction order to prosecute 204 Spl.C.C.No.183/2000 J against accused No.4 to 6, even though it was within their knowledge. Thereby it goes to show that the sanctioning authorities i.e., PW.43 and pr.64 have not applied their mind while granting the sanction against accused No.4 to 6 to prosecute them.
Seventhly, admittedly, the prosecution has not placed on record and the statement of account of the loan credit facilities extended to and sanctioned to M/s. P.J. Pipes & Vessels Pvt., Ltd., in order to prove the irregularities, diversion of the said funds by the M/s. P.J. Pipes & Vessels Pvt., Ltd., and the causes lead the M/s. P.J. Pipes & Vessels Pvt., Ltd., for diversion of the said funds as alleged. Further, admittedly as per the evidence on record, most of the credit facilities granted to M/s. P.J. Pipes & Vessels Pvt., Ltd. were processed, sanctioned in accordance with banking rules of practice. Further, even if there are some irregularities in the processing, sanction of the said credit facilities, admittedly most of the credit facilities were approved by the board meeting even if the said approval or rectification was with 205 Spl.C.C.No.183/2000 J displeasure. In other words when an act of the officers has been rectified or accepted by the board, even otherwise by the displeasure it will not amount to illegality or irregularity in processing or sanction of the said loan by the bank. Therefore, when the board by its resolution has rectified the said irregularities, the act of the present accused i.e., accused No.1 to 6 cannot be once again be questioned in accordance with law in this case. Surprisingly at the cost of repetition, I repeat that non-examination of the Investigating Officer in this case is fatal to the case of the prosecution. As such this question also remains unanswered rather wrongly answered.
Eighthly, most of the documents referred and produced in this case as discussed above are either Xerox copies or not properly certified in accordance with law or some of the documents even if produced not marked in accordance with law and some of the documents even if produced are partial documents i.e. incomplete document. As such the prosecution has 206 Spl.C.C.No.183/2000 J failed to prove the allegation against the accused by producing the relevant and necessary documents in accordance with law.
Ninthly, admittedly as per the case of the prosecution accused No.1 to 6 being the bank officers have criminally conspired in the processing, sanction and diversion of the funds of M/s. P.J. Pipes & Vessels Pvt., Ltd., in respect of the credit facilities extended to them. In this regard, admittedly as per the admitted fact, the accused No.1 Worked as Chairman and Managing Director of Vijaya Bank from1986 to 20.9.1990 at Head Office, Bengaluru. So also accused No.2 worked as a Chairman and Managing Director of Vijaya Bank, Head Office, Bengaluru from 21.9.1990 to 30.6.1992. Therefore, there is no chance of accused No.1 and 2 together conspired to process and sanction the said loan in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd as they did not worked in same post at same period. Further, admittedly the accused No.6 Chief Manager of Vijaya Bank has worked from 5.5.1996 to 20.10.1997, 207 Spl.C.C.No.183/2000 J thereafter the accused No.4 Chief Manager and Deputy General Manager worked from 1987 to 1991, accused No.5 has worked as Assistant General Manager from 15.4.1991 to 30.6.1993. If we consider the tenure of service rendered by the accused No.4 to 6 it cannot be said that the accused No.4 to 6 have served the Vijaya Bank at the same time in the same post. Therefore, it cannot be said that accused No.4 to 6 joined together along with accused No.1 to 3 in order to constitute criminal conspiracy as alleged.
Tenthly, admittedly the accused No.7 was the Managing Director of M/s. P.J. Pipes & Vessels Pvt., Ltd., Accused No.8 is the wife of the accused No.7. It is admitted fact that accused No.8 being a woman in fact she was not actively participated in any of the proceedings of M/s. P.J. Pipes & Vessels Pvt., Ltd., in fact none of the witnesses including any of the bank officers have spoken about the fact that accused No.8 was participated in the proceedings of M/s. P.J. Pipes & Vessels Pvt., Ltd. Surprisingly it appears that none of the 208 Spl.C.C.No.183/2000 J bank officials have seen the accused No.8 at any time. Therefore, it cannot be possible that accused No.8 is also involved along with other accused in criminal conspiracy as alleged. Further, it has come in the evidence that the M/s. P.J. Pipes & Vessels Pvt., Ltd., was dominated or ruled only the person of a one family i.e., accused No.7, as such accused No.9 being a Chartered Accountant appears to be a nominal Director of the M/s. P.J. Pipes & Vessels Pvt., Ltd. None of the witnesses have spoken about the fact that accused No.9 has actually participated in any of the proceedings including processing and sanction of the credit facilities and diversion of the said funds by the M/s. P.J. Pipes & Vessels Pvt., Ltd. As such this also is fatal to case of prosecution.
Last but not the least is that prosecution has produced and marked many documents, but no documents were produced to show source of securing the said documents. Whether said documents are produced by bank officials or seized by the investigating officer is 209 Spl.C.C.No.183/2000 J not been made clear. As the IO is not been examined, this question also remained unanswered.
Therefore, keeping in view the above facts and discussion, at the cost of repetition, I would like to repeat answer on the points which are considered by me as referred above.
Accused No.10 has failed to prove that he cannot be prosecuted in this case in view of the double jeopardy as alleged. As such I answer Point No.1 in the negative.
Secondly, the accused have failed to prove that this court is not having jurisdiction to try and entertain this case and failed prove the Mumbai court is having jurisdiction to try and entertain the present complaint. As such I answer point no.2 in negative.
Further, accused No.8 to 10 fails to prove that in view of non-planting of the M/s. P.J. Pipes & Vessels Pvt., Ltd., as accused they cannot be tried and are entitled for acquittal without going to the merits of the case. Further, admittedly even if the principles of vicarious liability is not applicable to the criminal case is 210 Spl.C.C.No.183/2000 J to be accepted. As already as discussed in the above said paragraphs, the prosecution is at liberty to prove the guilt of the accused No.8 to 10 even without planting M/s. P.J. Pipes & Vessels Pvt., Ltd., as accused. Accordingly, the Point No.3 is answered in the Negative.
Further, in view of the above discussion, the prosecution has failed to prove that the sanctioning authorities i.e., PW.43 and 64 have applied their mind in accordance with law before issue of sanction order against the accused No.4 to 6 to prosecute them in accordance with law. As such the prosecution has failed to prove the sanction order is in accordance with law. As such, the taking cognizance on the basis of the said sanction by this court is said to be bad in law. Hence, I answer Point No.4 in the negative.
Further, accused No.4 to 6 have failed to prove that even if they have been exonerated in the departmental enquiry they are entitled for acquittal without going to the merits of this case. Accordingly, I answer Point No.5 in the negative.
211 Spl.C.C.No.183/2000 JFurther, the prosecution has failed to prove the guilt of the accused beyond all reasonable doubt the allegation against the accused of not processing, sanctioning the credit facilities and in disbursing of the credit facilities such as bridge loan, letter of credit, internal foreign letter of credit, bank guarantees and term loan in favour of the M/s. P.J. Pipes & Vessels Pvt., Ltd., Further, the prosecution has failed to prove that the accused No.2 with a malafide intention without following due process of banking practice has sanctioned the credit facility on 30.6.1992 i.e., on the date of his retirement as alleged by leading cogent, convincing and corroborative evidence.
Further prosecution has failed to prove that accused No. 2 has intentionally failed to place before the Board meeting the letter written by Ms. Gowri Kumar on 4.3.1992.
Further, prosecution has failed to prove the accused No.1 to 6 in conspiracy with the accused No.8 to 10 have diverted the funds of the PJ Pipes & Vessels Ltd., for the 212 Spl.C.C.No.183/2000 J purpose other than for which the said loan has been sanctioned.
Further, prosecution has failed to prove beyond all reasonable doubt that the accused No.1 to 6 by abusing their official position as a public servant with dishonest intention by corrupt and illegal means have obtained payments directly from ONGC/JCCI &E and deposited the same in the Central Bank of India in Juhu Branch, Mumbai and Kapoli Co-operative Bank Ltd., Mumbai to the tune of Rs.12.49 crores and 5.03 crores respectively.
Further, prosecution has failed to prove that the accused No.1 to 6 by abusing their official position with dishonest intention by corrupt or illegal means diverted the funds to the sister concerns of M/s. P.J. Pipes & Vessels Ltd., and to M/s. Arunodaya Exports, M/s. Gaurav Containers Ltd., M/s. Hindustan Agro Chemicals Ltd., and M/s. Golden Fertilizers Ltd., to the tune of Rs.90.46 lakhs, Rs.90 lakhs, Rs.30 lakhs and Rs.17.5 lakhs respectively.
213 Spl.C.C.No.183/2000 J
Further, prosecution has failed to prove that the accused No.1 to 6 by abusing their official position along with accused No.8 to 10 unauthorisedly sold hypothecated SS plates which were imported under the duty fee scheme and under the Import LC opened by Vijaya Bank in the open market. As a result of the above said unauthorized sale of duty free imported SS plates, DRI conducted raid on factory office of the M/s. P.J. Pipes & Vessels Ltd., on 3.11.1990 and seized balance quantity of SS plates thereby, accused No.2 to 4 and 7 to 10 put bank funds in jeopardy.
Further, the prosecution has failed to prove that the accused No.3 and accused No.6 has obtained oral permission from the accused No.2 which later approved by the accused No.1 and released Rs.15 lakhs bridge loan to the M/s. P.J. Pipes & Vessels Ltd., on 29.6.1987 and out of which Rs.14 lakhs was utilized for payment of railway freight charges for transportation of pipes to Assam from Mumbai, in respect of the contracts awarded 214 Spl.C.C.No.183/2000 J to the sister concern M/s. Jayanthilal & Co., Pvt., Ltd., by the Oil India Ltd., Further, prosecution has failed to prove that the accused No.1 to 6 had violated the terms of sanction of facilities to M/s. P.J. Pipes & Vessels Ltd., stipulated by the Board of Directors of Vijaya Bank and did not get the General Power of Attorney of M/s. P.J. Pipes & Vessels Ltd., registered in ONGC/Oil India Ltd., /JCCI & E for getting the payments directly to Vijaya Bank from Government Organization.
Further, prosecution has failed to prove that accused No.3 and 4 got the spot sanctions during the visits of Accused No.1 to Mumbai and were not even reported to the board at all for rectification.
Further, the prosecution has failed to prove that accused No.1 to 5 had sanctioned/released Inland letters of credit facilities of Rs.8.25 crores to M/s. P.J. Pipes & Vessels Ltd., on 20.3.1992 for payment of the Customs duty in the name of financial intermediary, M/s. Ladestar Investments Pvt., Ltd., which is run by accused No.1 and 215 Spl.C.C.No.183/2000 J the said fact was willfully concealed by Board of Directors of Vijaya Bank which resulted in wrongful loss to the bank. Further the prosecution has also failed to prove criminal breach of trust as alleged. Further, prosecution has failed to prove that accused No.1 to 6 have committed the criminal misconduct as alleged beyond all reasonable doubts. Thereby, the prosecution has failed to prove all the charges as referred above beyond all reasonable doubts by adducing cogent, convincing and corroborative evidence. Accordingly, I answer Point No.6 to 9 in the negative.
65. POINT No.10: In view of my findings to the above points, I proceed to pass the following:
ORDER Acting under Section 235(1) of Cr.P.C., Accused No.1 to 6 and 8 to 10 are acquitted for the offences punishable u/s 120B, 409,420 of IPC and Section 5(2) r/w 5(1)(d) of PC Act of 1947 and Sec.13(2) r/w 13(1) (d) of the Prevention of Corruption Act, 1988 and substantive offences u/s 409,420 IPC and Section 5(1)(d) of PC Act 216 Spl.C.C.No.183/2000 J 1947 and 13(1)(d) r/w 13(2) of Prevention of Corruption Act, 1988.
The bail bonds executed by the accused No.1 to 6 and 8 to 10 are hereby stand cancelled.
The accused No.1 to 6 and 8 to 10 are hereby directed to appear before the appellate court on receipt of the summons from the said court in case appeal is preferred by the prosecution in accordance with law.
(Dictated to the Judgment Writer, transcribed by him, revised by me personally and incorporated additional paragraphs directly on computer, corrected and then pronounced by me in the Open Court on this the 17th day of February, 2018) (Sadashiva S. Sultanpuri) XXI Addl. City Civil and Sessions Judge And Prl. Special Judge for CBI Cases, Bengaluru City.
ANNEXURE
LIST OF WITNESSES EXAMINED FOR THE
PROSECUTION:
P.W.1 Manjaiah Shetty
P.W.2 O.S. Ramamurthy
P.W.3 H.R. Garg
217 Spl.C.C.No.183/2000 J
P.W.4 Smt. Bharathi Shetty
P.W.5 Smt. V. Leela Menon
P.W.6 J. Pandian
P.W.7 K. Diwakar Shetty
P.W.8 L.P. Tiwari
P.W.9 Somasundaram
P.W.10 M.K. Srivastava
P.W.11 C. Jayaseelan
P.W.12 M. Balachandran
P.W.13 P. Vittal Shetty
P.W.14 Sridhar K. Shetty
P.W.15 Narayana G. Mahale
P.W.16 K.Y. Hegde
P.W.17 K. Krishnappa Shetty
P.W.18 V. Gurunandan Rao
P.W.19 K. Mohan Shetty
P.W.20 A.D. Punja
P.W.21 Hariprakash Shetty
P.W.22 V.G.K. Acharyalu
P.W.23 M.C. Punjawari
P.W.24 C.H. Sridharan
P.W.25 R.L.N. Hegde
P.W.26 R. Damodaran
P.W.27 K. Muddanna Shetty
P.W.28 T. Krishnaraja Bhat
P.W.29 V.C. Mhatre
P.W.30 N.P. Gupta
P.W.31 C. Sudhakar Nambiar
P.W.32 Raghu Sanil
P.W.33 Mahesh M. Doshi
P.W.34 B. Karunakar Hegde
P.W.35 Mrs. Brenda Pavamani
P.W.36 Panduranga M. Kannan
P.W.37 P.S. Lalitha
P.W.38 V.K. Gopinathan Nair
P.W.39 K. Jaggesh Rai
P.W.40 Banarasi Das Kakkar
P.W.41 Aravind Kiran Agarwal
P.W.42 Sajjan Jindal
218 Spl.C.C.No.183/2000 J
P.W.43 Sridhar Shetty
P.W.44 M. Rathnar Shetty
P.W.45 Krishna Kumar
P.W.46 Jayaprakash N. Shah
P.W.47 Anil Kumar Singh
P.W.48 Narendra Bhalla
P.W.49 J.K. Talukdar
P.W.50 Om Prakash Agarwal
P.W.51 S.B. Khalsa
P.W.52 Hemanth Vinayak Karnik
P.W.53 H. Narayan
P.W.54 Shailesh Mandani
P.W.55 S.M. Bagde
P.W.56 Deviprasad Bagria
P.W.57 G. Krishna Kutty
P.W.58 Yogendra Takur
P.W.59 K. C. Narasimha Murthy
P.W.60 C.N. Velankar
P.W.61 Balachandra V. Kanitkar
P.W.62 Subash Berlia
P.W.63 S.Krishna Murthy
P.W.64 Michael Bastian
PW.65 G.R. Krishnan
PW.66 K. Jayarama Shetty
PW.67 B. Prakash Chandra Shetty
PW.68 Pagarveer Mehta
LIST OF WITNESS EXAMINED FOR DEFENCE:
NIL LIST OF DOCUMENTS EXHIBITED FOR THE PROSECUTION:
Ex.P.1 Original Letter dt. 14.5.1997 of Vijaya Bank, Excelsior Branch, Mumbai to CBI. (1 sheet) Ex.P.1(a) Signature of PW.1 219 Spl.C.C.No.183/2000 J Ex.P.2 Original Statement showing details of all the FLC's & ILC's opened in the account of M/s. P.J. Pipes & Vessels Pvt., Ltd., by Vijaya Bank (2 sheets).
Ex.P.2(a) Signature of PW.46 Ex.P.3 Copy of the adjudication order dated 2.1.1992 against M/s. P.J. Pipes & Vessels Pvt., Ltd., of Addl. Collector of Customs, Mumbai. (Reconstructed document) Ex.P.4 Xerox copy of plaint etc., filed before the Hon'ble High Court, Bombay against M/s.
P.J. Pipes & Vessels Pvt., Ltd., for recovery of dues of Vijaya Bank - 67 sheets.
Ex.P.5 Oriiginal Office Note dated 30.6.1987 of Vijaya Bank, H.O., for sanction of Bridge Loan of Rs.15 lakhs M/s. P.J. Pipes & Vessels Pvt., Ltd.,.
Ex.P.5(a) Signature of PW.17 Ex.P.5(b) Signature of A.1 Ex.P.5(c) Signature of A.2 Ex.P.6 Original Note dated 18.7.1987 by the Zonal Manager, Vijaya Bank, Bombay to CMD of Vijaya Bank for Rs.13.53 lakhs.
Ex.P.6(a) Recommendations of PW.12 Ex.P.6(b) Signature of PW.12 Ex.P.6(c) Signature of A.1/CMD Ex.P.7 Original Letter Dt. 7.8.1987 of M/s. P.J. Pipes & Vessels Pvt., Ltd., to Vijaya Bank Excelsior Branch, Bombay regarding Bridge Finance for payment of Customs Duty and Air Freight Ex.P.8 Original Note dated 1.9.1987 of AGM, Vijaya Bank to CMD, for sanction of OD Limits against supply bills for Rs.18.60 lakhs in favour of M/s. P.J. Pipes & Vessels Pvt., Ltd., 220 Spl.C.C.No.183/2000 J Ex.P.9 Xerox Copy of Board Memo No. A 48/91 dt.
20.3.1991. 35 sheets
Ex.P.9(a) Signature of PW.16
Ex.P.9(b) Signature of GM (O)
Ex.P.9(c) Resolution
Ex.P.9(d) Signature of Divisional Manager
Ex.P.10 Details of payments made in respect of
contract dt. 22.6.1992 (4 sheets - sheet No.2 to 4 are Xerox).
Ex.P.11 Xerox Copy of the Office Memorandum dt.
28.2.1994 of the Under Secretary, Ministry of Petroleum & Natural Gas.
Ex.P.12 Attested copy of the Statement showing payments made by ONGC to M/s. P.J. Pipes against P.O., No. IS-005 dt. 21.3.1989 with enclosures (37 sheets - sheet No. 2 to 35 and 37 are xerox) Ex.P.13 Statement showing the details of payments made by ONGC to the contractor M/s. P.J. Pipes & Vessels Pvt., Ltd., Ex.P.13(a) Signature of R.M. Agarwal (who prepared Ex.P.13) Ex.P.14 161 Cr.P.C., Statement of PW.10/CW-16 Ex.P.15 Original Letter dt. 13.4.1987 of MSFC, Mumbai addressed to GM, Vijaya Bank, Bengaluru with enclosure (2 sheets - sheet No.2 is Xerox) Ex.P.16 Original Note put up by PW.12 dt. 30.4.1997 to the Managing Director Vijaya Bank.
Ex.P.16(a) Signature of PW.12 Ex.P.17 Original Letter dt. 6.5.1987 of Vijaya Bank Head Office, BLR to MSFC.
Ex.P.17(a) Signature of PW.12 Ex.P.18 Telex Message dt. 30.6.1987 from D.G.M., Bombay Zone to D.G.M., H.O., Bengaluru - 1 sheet.
Ex.P.19 Telex Message dt. 23.1.1989 received from D.G.M., Z.O., Mumbai to C.M.D. Ex.P.19(a) Note put up by PW.12 221 Spl.C.C.No.183/2000 J Ex.P.19(b) Signature of PW.12 Ex.P.19(c) Signature of CMD/A1 Ex.P.20 Xerox copy of Memorandum dt. 29.10.1990 for the Board of Directors and the copy of the Resolution of the Board Meeting held on 30.10.1990 - 18 sheets.
Ex.P.21 Attested copy of Memorandum for the Board of Directors dt.24.5.1988 of Vijaya Bank to approve the proposal for enhancement of I.L.C. limit of Rs.900 lakhs to Rs.1500 lakhs to M/s. J.J. Pipes & Vessels Pvt., Ltd., - 3 sheets Ex.P.22 One file of ONGC contains power of attorney and other correspondences of M/s. P.J. Pipes & Vessels Pvt., Ltd., (Reconstructed document) Ex.P.22(a) Copy of letter dt. 18.6.1988 Ex.P.22(b) Copy of GPA dt, 15.6.1988 Ex.P.22(c) Copy of Postal Receipt Ex.P.22(d) Copy of Postal Acknowledgment Ex.P.22(e) Copy of the letter dt. 18.8.1993written by AGM, Vijaya Bank, Excelsior Branch, to ONGC Ex.P.22(f) Copy of Reply letter of ONGC Ex.P.23 Xerox copy of Loan application for working capital dt. 10.3.1987 of M/s. P.J. Pipes & Vessels Pvt., Ltd., to Vijaya Bank, Excelsior Branch - 6 sheets.
Ex.P.24 Vijaya Bank advance proposal dt. 27.5.1987 on Ex.P.23 - 39 sheets.
Ex.P.24(a) Signature of PW.14 Ex.P.25 Credit proposal dt. 10.2.1988 in respect of M/s. P.J. Pipes & Vessels Pvt., Ltd., submitted to Vijaya Bank, Excelsior Branch, Mumbai - 51 sheets.
Ex.P.26 Telex Message dt. 27.6.1987 from AGM, Vijaya Bank, Zonal Office, Mumbai - 1 sheet Ex.P.26(a) Signature of PW.17 222 Spl.C.C.No.183/2000 J Ex.P.27 Telex Message dt. 30.6.1987 Ex.P.27(a) Signature of Senior Manager Ex.P.28 Xerox copy of Office Note dt. 18.7.1987 for sanctioning of Bank Guarantee of Rs.13.53 lakhs to M/s. P.J. Pipes & Vessels Pvt., Ltd., Ex.P.28(a) Signature of PW.17 Ex.P.28(b) Signature of A.1 Ex.P.28(c) Signature of A.2 Ex.P.29 Board Memorandum No. A-302/87 dt.
18.9.1987 in respect of credit limit of Rs.18.60 lakhs with appraisal note - 2 sheets -sheet No.2 xerox.
Ex.P.29(a ) Signature of PW.17 [DGM (Cr.)] Ex.P.30 Original Note dt. 28.1.1988 by the Zonal Manager, Vijaya Bank, Mumbai put up before C.M.D. - 4 sheets Ex.P.30(a) Signature of PW.17 Ex.P.30(b) Signature of A1 Ex.P.31 Original Note dt. 30.1.1988 by the Zonal Manager, Vijaya Bank, Mumbai put up before C.M.D. to approve consideration of the enhancement proposal of M/s. P.J. Pipes & Vessels Pvt., Ltd., - 2 sheets Ex.P.31(a) Signature of PW.17 Ex.P.31(b) Signature of A1 Ex.P.32 Telex message dt. 12.3.1988 of Z.O., Mumbai to H.O., Vijaya Bank.
Ex.P.32(a) Signature of PW.17 Ex.P.32(b) Signature of A1 Ex.P.33 Original Letter dt. 19.6.1987 of M/s. P.J. Pipes & Vessels Pvt., Ltd., to the CMD of Vijaya Bank for credit facility - 4 sheets. Ex.P.34 Minutes of Board Meeting of the Board of Directors of Vijaya Bank, H.O., from 1987 to 1997. (Vol.I) (Reconstructed document) Ex.P.34(A) One binded book (Reconstructed document) containing Minutes of Board Meeting by consent.
Ex.P.34(a) Observation of the Board 223 Spl.C.C.No.183/2000 J Ex.P.34(b) Relevant Board Resolution Ex.P.34(c) Objections of PW.27 recorded minutes of Board Meeting dt. 8.1.1992.
Ex.P.34(d) Item No.1A-125/1992 Ex.P.34(e) Displeasure of PW.27 in Board Meeting dt.
...... in respect of Agenda A-125/92 Ex.P.35 Minutes of Board Meeting of the Board of Directors of Vijaya Bank, H.O., from 1987 to 1997. (Vol.II) (Reconstructed document) Ex.P.36 Telex Message dt. 29.6.1992 from Excelsior Branch, Vijaya Bank to DGM., RO., Vijaya Bank.
Ex.P.37 Xerox Copy of the Minutes of Meeting held on 30.6.1992 in respect of account of M/s. P.J. Pipes & Vessels Pvt., Ltd. (produced by A2) - 4 sheets.
Ex.P.37(a) Signature of PW.20 Ex.P.37(b) Signature of DGM Ex.P.37(c) Signature of A3 Ex.P.37(d) Signature of CM Sridharan, GM Ex.P.37(e) Signature of GM (O) K.K. Shetty Ex.P.37(f) Signature of A1 Ex.P.38 Original Letter dt. 4.3.92 of Smt. Gowri Kumar, Govt., Director to CMD of Vijaya Bank Ex.P.38(a) Relevant Note and Initial of A2 Ex.P.39 Original Certificate of PW.23 dt. Ex.P.39(a) Signature of PW.23 Ex.P.40 Original Certificate of PW.23 dt. Ex.P.40(a) Signature of PW.23 Ex.P.41 Original Statement dt. 3.5.1997 of Vijaya Bank, Asset Recovery Management Branch, Mumbai showing B.G's issued to u/s P.J. Pipes Ex.P.41(a) Signature of Chief Manager Ex.P.42 Original complaint dt. 23.12.1996 Ex.P.42(a) Signature of PW.40 Ex.P.43 One file pertaining to M/s. Saw Pipes Ltd., (reconstructed doct.) 224 Spl.C.C.No.183/2000 J Ex.P.43(a) Copy of letter dt. 12.11.98 of M/s. Saw Pipes page No.1 Ex.P.43(a- Signature of OM. Gupta
a) Ex.P.43(b) Memorandum of Understanding dt. 16.7.91 between M/s. P.J. Pipes & Saw Pipes Ex.P.44 Original Sanction order dt. 21.12.2000 issued against A6 - 3 sheets.
Ex.P.44(a) Signature of PW.43 Ex.P.45 Original Sanction order issued against A5 -
4 sheets.
Ex.P.45(a) Signature of PW.43 Ex.P.46 21 Import L.C's and one Inland LC opened by Vijaya Bank Extension Branch in the account of M/s. P.J. Pipes which were invoked and outstanding as on 7.5.06 Ex.P.47 8 Bank Guarantees issued by Vijaya Bank Extension Branch to M/s. P.J. Pipes in 2 volumes Ex.P.48 Original Letter dt. 22.1.1999 of Indosuez to the Investigating Officer with enclosures - 36 sheets - sheet No.1 original, enclosures true copies/Xerox copies.
Ex.P.49 Original Letter dt. 20.8.97 of Joint Director, GFT, copy marked to CBI - 1 sheet Ex.P.50 Attested copies of Statement of cheques issued to M/s. P.J. Pipes & Vessels Pvt., Ltd., 5 sheets Ex.P.51 Statement of cheques issued to M/s. P.J. Pipes & Vessels Pvt., Ltd., 3 sheets Ex.P.52 Xerox copy of Letter dt. 8.11.90 of G.O.I., Ministry of Commerce to M/s. P.J. Pipes reg. redemption of Bond - 2 sheets.
Ex.P.53 2 Abeyance Orders dt. 21.3.91 & 3.10.1991 2 sheets Xerox copies Ex.P.54 Xerox Copy of the letter dt. 3.12.90 to M/s.
P.J. Pipes reg. permission for disposal of exempt material -1 sheet Ex.P.55 Original Letter dt. 16.12.91 from Vijaya 225 Spl.C.C.No.183/2000 J Bank to Chief Controller of Imports & Exports - 2 sheets Ex.P.56 Original Letter dt. 2.9.97 of Oil India Ltd., to CBI - 1 sheet (covering letter) Ex.P.57 Original List of orders placed on M/s. Boiler Tube & Co., during 1.1.87 to 31.12.93 - 1 sheet Ex.P.58 Original List of orders placed on M/s. P.J. Pipes & Vessels during 1.1.87 to 31.12.93 from O.I.L., Duliajan, Assam - 2 sheets Ex.P.59 Original List of orders placed on M/s. P. Jayanthilal & Co., during 1.1.87 to 31.12.93 from O.I.L, Duliajan - 1 sheet Ex.P.60 Portion of 161 statement of PW.50/ CW.106 Ex.P.61 Xerox copy of Debit Note dt. 20.12.91 for Rs.30,00,000/- in the letter head of M/s. Hindustan Agro Chemicals Ltd., - 1 sheet Ex.P.62 Xerox Copy of Memorandum of Understanding between M/s. P.J. Pipes & Vessels Pvt., Ltd., and M/s. Hindustan Agro Chemicals Ltd., - 3 sheets Ex.P.63 Original Letter dt. 7.4.98 addressed to CBI by the Branch Manager, Development Credit Bank Ltd., Mumbai - 1 sheet Ex.P.64 Original Memorandum dt. 24.5.1988 for approval of enhancement of BGILC limits in respect of P.J. Pipes - 5 sheets Ex.P.65 Original Letter dt. 19.5.98 of M/s. Sonia Internation to CBI - 1 sheet Ex.P.65(a) Signature of PW.54 Ex.P.66 Original Statement of account in respect of M/s. P.J. Pipes & Vessels Ltd., from 1.4.88 to 31.3.97 - 2 sheets Ex.P.67 Xerox Copy of the letter dt. 20.12.94 of M/s.
P.J. Pipes to Deputy Commissioner of Income Tax - 4 sheets Ex.P.68 One file containing Analysis Report dt.
20.8.1998 & Enclosures Ex.P.68(A) Analysis Report 226 Spl.C.C.No.183/2000 J Ex.P.68(a) Signature of PW.59 Ex.P.68(b) Signatures of other team members & (c) Ex.P.69 Xerox copy of Letter dt. 13.4.87 given by M/s. P.J. Pipes & Vessels seeking credit facilities - 9 sheets Ex.P.70 Original Letter dt. 26.5.87 given by M/s. P.J. Pipes & Vessels Pvt., Ltd., to Vijaya Bank for credit facilities - 2 sheets Ex.P.71 Original Letter dt. 27.5.87 by Vijaya Bank Extension Branch to DGM., Bombay Zone, Vijaya Bank in respect of Term Loan and working capital - 5 sheets Ex.P.72 Original Letter by M/s. P.J. Pipes & Vessels Pvt., Ltd., dt. 11.6.1987 to Vijaya Bank for issue of advance payment guarantee -
Ex.P.73 Original Letter dt. 22.6.87 of M/s. P.J. Pipes to Vijaya Bank in respect of credit facilities - 2 sheets Ex.P.74 Original Sanction letter dt. 30.7.1987 of Vijay Bank favouring M/s. P.J. Pipes - 1 sheet Ex.P.75 Original Loan application form dt. 24.12.87 with letter dt. 17.12.87 - 6 sheets Ex.P.76 Xerox copy of Reply letter dt.15.7.98 from M/s. Credit Agrocole Indosuez to Chief Manager, Vijaya Bank, Mumbai - 1 sht Ex.P.77 Original letter dt. 1.4.98 with certified copies of statement of account in respect of M/s. P.J. Pipes, & Vessels, M/s. Boiler Tube Company & P. Jayanthilal & Co., Maintained with M/s. Credit Agrocole Indosuez - 9 sheets Ex.P.78 Appraisal Note dt. 27.10.88 of M/s. Vijaya Bank in respect of M/s. P.J. Pipes, & Vessels Pvt., Ltd., - 5 sheets - sheet no.4 & 5 xerox Ex.P.79 Original Note dt: 29.6.1988 of M/s. Vijaya Bank, Z.O., Bombay to approve the release 227 Spl.C.C.No.183/2000 J of part of the balance term loan in respect of M/s. P.J. Pipes, & Vessels Pvt., Ltd., - 1 sheet Ex.P.80 Xerox Appraisal Note dt: 6.2.89 of Vijaya Bank Z.O., Bombay in respect of M/s. P.J. Pipes, & Vessels Pvt., Ltd., - 10 sheets Ex.P.81 Xerox Appraisal Note dt. 9.7.87 of Vijaya Bank Z.O., Bombay in respect of M/s. P.J. Pipes, & Vessels Pvt., Ltd., - 7 sheets Ex.P.82 Original sanction prder dt/ 22/12/2000 pertaining to A4 R.S. Narayanan - 5 sheets Ex.P.82(a) Signature of PW.64 Ex.P.83 Original Note dt: 29.2.89 before the C.M.D. by the Zonal Office, Vijaya Bank, Mumbai - 2 sheets Ex.P.84 Original Note dt: 30.7.90 placed before C.M.D. by the Vijaya Bank Extension Branch, Mumbai - 2 sheets Ex.P.84(a) Signature of PW.67 Ex.P.85 Telex Message to Credit Dept., H.O., Vijaya Bank for sanction of B.G. in respect of M/s. Boiler Tube Company - 1 sheet Ex.P.86 Original Letter dt. 12.2.1990 of Vijaya Bank, H.O., Blr to Divisional Manager, Excelsior Bombay - 1 sheet Ex.P.87 Office Note dt. 15.2.90 for payment of Custom Duty - 1 sheet Ex.P.87(a) Signature of PW.67 Ex.P.88 Xerox copy of Vijaya Bank, H.O., Memorandum for the Board of Directors dt. 1.8.92 - 1 sheet Ex.P.89 Internal Investigation Report dt. 15.2.1993 (summoned file) (163 pages) Ex.P.89(a) Signature of PW.65 at page No.135 LIST OF EXHIBITED DOCUMENTS FOR DEFENCE:
Ex.D1 Certified copy of the order dt. 11.7.2003 passed 228 Spl.C.C.No.183/2000 J by the Customs, Excise and Service Tax Appellate Tribunal, Mumbai along with application (total 3 sheets) Ex.D2 Certified copy of the report of departmental enquiry - 11 sheets Ex.D3 Certified copy of the letter dt. 6.10.98 of disciplinary authority to A4 Ex.D4 Certified copy of the report of D.E., dt. 24.5.99 against A5 - 14 sheets Ex.D5 Certified copy of letter dt. 20.8.99 of Disciplinary Authority to A5 - 1 sheet Ex.D6 Certified copy of department enquiry report dt.
22.9.98 against A6 - 10 sheets Ex.D7 Certified copy of letter dt. 30.12.98 of disciplinary authority to A6 Ex.D8 Letter dt. 5.9.91 of Vijaya Bank Excelsior Br., Bombay to D.G.M., Zonal Office Bombay.
Ex.D9 Xerox copy of the Board Meeting dt. 10/12/91 (Agenda Item No. A/150/91 Synopsis of the credit proposal of the Vijaya Bank in respect of M/s. P.J. Pipes & Vessels Pvt., Ltd., 24 sheets Ex.D10 Endorsement with signature of Divisional Manager on Ex.P.33 Ex.D11 Supplementary Memorandum for Board Meeting dt. 26.6.92 Ex.D12 Certified copy of the Internal Investigation Report dt. 9.10.92 submitted by M.V. Srinivasa Rao and A. Sripada Rao Ex.D13 Letter dt. 18.7.98 of Vijaya Bank, Excelsior Branch to C.V.O., Vigilance Dept., Bengaluru - 1 sheet Ex.D14 Relevant para of Memorandum for the Board of Directors dt. 3.11.92 (Agenda No. A171/92) Ex.D15 Relevant column in page No.2532 of Ex.P.68 Ex.D16 Relevant column in page No.2537 of Ex.P.68 Ex.D17 Relevant column in page No.2538 of Ex.P.68 229 Spl.C.C.No.183/2000 J LIST OF MATERIAL OBJECTS EXIBITED FOR PROSECUTION NIL (Sadashiva S. Sultanpuri) XXI Addl. City Civil and Sessions Judge, and Prl. Special Judge for CBI Cases, Bengaluru.