Delhi District Court
Cc No. 532265/16 Cbi vs . R.K. Viz Etc. Page 1 Of 46 on 24 September, 2016
IN THE COURT OF SANJAY GARG-I:
SPECIAL JUDGE-IV, (PC ACT) CBI: DELHI
CC No. 532265/2016
Central Bureau of Investigation (CBI)
Versus
1. R.K. Viz,
S/o Sh. Brij Lal Viz,
R/o A-6, 58, Triveni Apartment,
Paschim Vihar,
Delhi.
2. M.V. Prabhakar
S/o Sh. M.S. Vardharajan,
R/o L-3, MIG DDA Flat,
Prasad Nagar,
New Delhi
3. Kimti Lal Jain,
S/o Sh. Chanan Lal Jain,
R/o F-10, Sarabha Nagar,
Ludhiana (Punjab)
4. Rajan Gugnani,
S/o Sh. Maharaj Krishan Gugnani,
R/o H.No. 581, Sector - 17,
Faridabad (Haryana)
5. M/s Arihant Cotsyn Ltd.,
Ludhiana (Punjab)
(Convicted vide order dated 18.03.2016
passed by this Court.) .....Accused
Case arising out of FIR No. RC-DA1-1998-A-0034
Date of FIR : 15.06.1996
Date of Institution : 11.12.2000
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 1 of 46
Date of conclusion of Final
Arguments : 05.09.2016
Date of Judgment : 24.09.2016
(Case is more than 15 years old)
JUDGMENT
FACTS 1.0. The brief facts of the case are that this case was registered by CBI on the basis of source information that during 1995 R.K. Viz, Regional Marketing Manager (hereinafter mentioned as A-1), M.V. Prabhakar, Dy. Finance Manager (hereinafter mentioned as A-2), Delhi Regional Office, Bonaigaon Refinery & Petrochemical Ltd., New Delhi (hereinafter mentioned as BRPL) entered into a criminal conspiracy with M/s Arihant Cotsyn Ltd (hereinafter mentioned as A-5, was summoned as additional accused by this court) by allowing him to lift polyester staple fiber (hereinafter mentioned as PSF) from the store of BRPL worth Rs. 67 lacs without securing credit in the shape of letter of credit / bank guarantee causing pecuniary advantage to A-5 and wrongful loss to BRPL.
1.1. Investigation revealed that as per guidelines of the pricing committee of the management of BRPL no unsecured credit was permitted and all the sales were to be made on the basis of letter of credit / bank guarantee. Only in special cases and that too after proper evaluation of the standing of the customer and with prior approval of the committee of Directors, unsecured credit could be allowed. In the case of A-5 no such norms were even CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 2 of 46 adopted. The requisition for supplies to the parties are raised and thereafter supplies are to be made against LC / bank guarantee / advance payment with the concurrence of the Finance Division and thereafter the delivery / invoice is issued and material is transported. The transport could be rail or road and the railway receipt or the lorry receipts concerning the dispatch, after the receipts of the goods are acknowledged and thereafter submitted along with the other papers to the bank for the payment of the bills for supplies against LC. But in case of A-5 no such guidelines were adopted and unsecured supplies were made with connivance with A-1.
1.2. It has further come in evidence that about Rs. 4 crore was outstanding against A-5. Three letters of credit bearing no. 37/95, 46/95 & 52/95 submitted by A-5 with BRPL were false and forged copies of the LCs prepared by changing the date of opening, LC amount, period of validity and name of party. These LCs were actually opened in favour of M/s Grasim Industries Nagda and M/s Indian Organics Ltd., Chennai and not in favour of BRPL. The letter along with which these forged LCs were submitted to BRPL were typed at the factory premises of A-5 and the writings on the letters were of Rajan Guglani (hereinafter mentioned as A-4), the then General Manager / employee of A-3 and MD of A-5.
1.3. It has further come in investigation that A-1 & A-2 from the Marketing Division & Finance Division of BRPL respectively have been obliging A-5 by supplying the material without insisting for LC / bank guarantee / demand draft against the CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 3 of 46 supplier. This fact is clear from the issue of delivery order and lorry receipt before the opening of LCs and also non mentioning of LC numbers on the requisition signed and written by A-1. There is evidence on record which clearly shows misuse of official position by A-1 & A-2 to show undue favours fraudulently and dishonestly to A-5 in pursuance of criminal conspiracy among themselves.
1.4. In the background of these allegations charge sheet for the commission of offences punishable u/s 120B/420/467/468/471 IPC and section 13(2) R/w section 13(1)
(d) of P.C. Act was filed against A-1 to A-4.
1.5. Vide order dated 08.09.2008 A-5 was summoned as additional accused.
Charge 2.0. A-1 was given a separate charge u/s 13(1)(d) R/w 13(2) of P.C. Act to which he pleaded not guilty and claimed trial.
2.1. A-2 was also given a separate charge u/s 13(1)(d) R/w 13(2) of P.C. Act to which he pleaded not guilty and claimed trial.
2.2. A-4 was given charge u/s 468 & 471 IPC to which he pleaded not guilty and claimed trial.
2.3. All the accused persons were charged for the offence u/s 120B IPC and 420/468/471 IPC R/w 120B IPC, to which they pleaded not guilty and claimed trial.
2.4. A-5 was given charge u/s 120B R/w 420/468/471 IPC and 13(1)(d) R/w 13(2) of P.C. Act through authorized representative CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 4 of 46 of Official Liquidator, to which he pleaded guilty and does not claim trial. Accordingly, vide order dated 18.03.2016 on sentence, A-5 was sentenced to fine of Rs. 10,000/- for all the offences. This fine was paid by Authorized Representative of official liquidator on 03.06.2016.
Prosecution Evidence 3.0. Prosecution examined 12 witnesses to support its case.
3.1. PW-1 Sh. Tarsem Lal, Manager with PNB, Basti Danish Manda, Jullandhar Branch. He had been posted from 1993 to 1997 in the Industrial Area Branch, Ludhiana as Officer. He has proved Letter of Credit as Ex. PW-1/A, a letter vide which intimation in respect of the LC sent to the Manager, SBI, Nagda as Ex. PW-1/B, LC No. 46/95 as Ex. PW-1/C, intimation sent to the Manager, SBI, Nagda as Ex. PW-1/D and LC No. 59/95 as Ex.PW-1/E. 3.2. PW-2 Sh. Utpal Basak, Senior Manager, Indian Oil Corporation. He was earlier working with Bongaigaon Refinery & Petrochemical Ltd. He has proved requisition form Sl. No. 53 as Ex. PW-2/1, requisition form Sl. No.100 (303) as Ex. PW-2/2, requisition form dated 09.05.1995 as Ex. PW-2/3, requisition form dated 17.05.1995 as Ex. PW-2/4, requisition form Sl. No. 31 as Ex. PW-2/5, requisition form Sl. No. 26 as Ex. PW-2/6, requisition form Sl. No. 59 as Ex. PW-2/7, requisition form Sl. No. 21 dated 13.06.1995 as Ex. PW-2/8, requisition forms Sl. No. 40 & 33 as Ex. PW-2/9 & Ex. PW-2/10 respectively, delivery advise no. 57/107 dated 19.07.1995 as Ex. PW-2/11, delivery advise no. 57/169 dated 19.07.1995 as Ex. PW-2/12, delivery CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 5 of 46 advise no. 57/168 dated 18.07.1995 as Ex. PW-2/13, delivery advise no. 57/159 dated 12.07.1995 as Ex. PW-2/14, delivery advise no. 57/158 dated 12.07.1995 as Ex. PW-2/15, delivery advise no. 57/138 dated 22.06.1995 as Ex. PW-2/16, delivery advise no. 57/130 dated 19.06.1995 as Ex. PW-2/17, delivery advise no. 57/129 dated 19.06.1995 as Ex. PW-2/18, delivery advise no. 57/128 dated 19.06.1995 as Ex. PW-2/19, delivery advise no. 57/127 dated 19.06.1995 as Ex. PW-2/20, delivery advise no. 57/140 dated 15.06.1995 as Ex. PW-2/21, delivery advise no. 57/142 dated 13.06.1995 as Ex. PW-2/22, delivery advise no. 57/112 dated 13.06.1995 as Ex. PW-2/23 and specimen handwriting of L.K. Mahajan as Ex. PW-2/24.
3.3. PW-3 Sh. Ashok Kumar Bhandari from Indian Oil Corporation. He was earlier employed with BRPL. He has proved letter to ACL as Ex. PW-3/A, copy of his visit report as Ex. PW-3/B, report regarding enquiry made from PNB, Ludhiana as Ex. PW-3/C, statement of M/s ACL during 1995 - 96 as Ex. PW-3/D, statement for 1994 - 95 as Ex. PW-3/D1, report regarding visit on 03.11.1995 to Ludhiana as Mark P-3/D2. He has further proved minutes of the meeting as Ex. PW-3/E, letter dated 07.08.1995 bearing signature of A-1 as Ex. PW-3/G, copy of the letter signed by him on behalf of A-1 and sent to ACL as mark PF1. He has proved seizure memos Ex. PW-3/H, Ex. PW- 3/H1 & Ex. PW-3/H2 vide which he hand handed over documents to the CBI officials. He has proved seizure memo Ex. PW-3/J vide which he had handed over requisition forms of BRPL to CBI officials. He further proved sheets as Ex. PW-3/K1 CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 6 of 46 to Ex. PW-3/K20 containing specimen handwriting of A-4 and copy of his report dated 19.08.1995 as Mark P-3/L. He has further proved report which is in the handwriting of A-2 as Ex. PW-3/N and photocopy of his visit report dated 8th & 9th November, 1995 as Mark P-3/N. 3.4. PW-4 Sh. Pradeep Kumar, Sr. Manager, PNB, Circle Office, Ludhiana was posted in PNB, Industrial Area Branch, Ludhiana in October, 1999. He has deposed that due to lapse of time, he do not remember about number of units functioning in ACL or regarding details thereof. He do not remember regarding extension of credit limit to ACL by PNB. He has further deposed that due to lapse of time, he cannot say as to which representative of the company (ACL) used to visit PNB in respect of the credit limit. However, its representative used to visit them.
3.5. PW-5 Sh. Anand Prakash Sharma, Chief Finance Manager, Indian Oil Corporation. He had joined BRPL as Sr. Accounts Officer. He has proved documents D-18 to D-21 signed by A-2 as Ex. PW-5/1 to Ex. PW-5/4, documents D-24 to D-29 signed by A-1 as Ex. PW-5/5 to Ex. PW-5/10, documents D-32 to D-37 signed by A-1 as Ex. PW-5/11 to Ex. PW-5/16, party ledger for the period 01.04.1995 to 31.03.1996 in respect of ACL as Ex. PW-5/17 and details of outstanding balance with M/s ACL as Ex. PW-5/18 (Colly).
3.6. PW-6 Sh. Raman Kumar who had been working with M/s ACL from 1990 to 1999 as Assistant Accounts Officer has deposed that A-4 was posted in ACL as General Manager, CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 7 of 46 Works. Account office of the factory was situated in Dhuri. On every Saturday a boy used to come from the Dhuri office to Ludhiana and used to take from him all the work which he had done over the week in my office at Ludhiana. Punjab National Bank was the Banker of ACL in Ludhiana. The job of collecting letter of Credit in respect of the company from the Bank was being done by him. Application in that regard used to be prepared by some other employee and after being signed by the authorized signatory, he used to take the same to the Bank for getting letter of credit. The letter of credit used to be got issued from the bank after debiting the amount from the account of ACL being maintained in the bank. Sh. B.S. Arora, Sh. Lavkesh Mahajan, A-3 and A-4 were the authorized signatories of ACL. Any of them could have signed the application for issuance of letter of credit. Three copies of letter of credit used to be prepared by the Bank. Two copies used to be sent to the party concerned in favour of whom letter of credit was got issued and the non negotiable copy used to be retained by him in office. He used to hand it over to Satish Jain in the office who used to keep it on record.
3.7. PW-7 Sh. Manjit Singh started working as Typist with M/s Arihant Cotsyn at Dhuri in the year 1990. He has not supported the case of prosecution and rather resiled from his statement despite he being cross examined at length by Ld. SPP for CBI.
3.8. PW-8 Sh. S.N. Subramaniam was posted as an Inspector with CBI, ACB, Delhi during 1998 and proved FIR as Ex. PW- 8/1, seizure memos Ex. PW-8/2 to Ex. PW-8/6, Ex. PW-3/J, Ex.
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 8 of 46PW-8/7, Ex. PW-3/H2, Ex. PW-3/H1, Ex. PW-8/8, Ex. PW-8/9, specimen writings of A-4 as Ex. PW-3/K, specimen writings of L.K. Mahajan as Ex. PW-2/24, specimen type impression of typewriter no. 28592, 27839, 16738 & L-1791 as Ex. PW-8/10 to Ex. PW-8/13 respectively, letter vide which documents sent for comparison to CFSL as Ex. PW-8/14 and annexures thereto as Ex. PW-8/14A & B, letter dated 22.11.1999 as Ex. PW-8/15 vide which specimen writings of A-4 had been sent for comparison with the questioned documents and annexures thereto as Ex. PW-8/15A, letter dated 13.12.1999 as Ex. PW-16 vide which specimen type impressions had been forwarded to CFSL for comparison with the questioned document and annexures thereto as Ex. PW-8/16A & B. 3.9. PW-9 Sh. S.K. Mukhi, Retd. Principal Scientific Officer, CFSL has proved his CFSL report as Ex. PW-9/1.
3.10. PW-10 Sh. R.N. Dass, Director (Finance) BRPL has proved sanction order Ex. PW-10/A. 3.11 PW-11 Sh. A.K. Malik was posted as Inspector in CBI, ACB, New Delhi. He has deposed that investigation of this case was assigned to him on 06.03.2000 under orders of the S.P. concerned. After investigation was marked to him, he went through the records of the earlier investigation conducted. He called all the four accused persons i.e. R.K. Viz., M.V. Prabhakar, Keemti Lal Jain & Rajan Gugnani in his Office. While R.K. Viz and M.V. Prabhakar co-operated the investigation, the other two accused persons never turned up at that time. As nothing incriminating had transpired till that time, CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 9 of 46 after seeking permission from the Court, he conducted search of residential premises of all the four accused persons. He once received a telephone call from A-3 who claimed that he wanted to co-operate with the investigation and hence, he called him to his Office. However, he never turned up. He accordingly arrested A-1 & A-2. The other two accused persons got anticipatory bail protection from Hon'ble High Court of Punjab & Haryana. A prima-facie case appeared to be made out for offences U/s 420, 467, 468, 471 & 120 B IPC besides offences under PC Act. He put up his investigation report before the S.P. through the S.P. concerned, he also initiated proceedings regarding grant of sanction for prosecution of A-1 & A-2. He has further deposed that after completing investigation and after receipt of sanction, charge aheet was filed in the court under his signature against four accused persons.
3.12. PW-12 Sh. Shree Ram Aggarwal was working as Executive Director DHTC (India) Ltd., in September, 1999 which was a transport company has proved bill no. 007005 dated 17.04.1995, bill no. 008469 dated 03.08.1995, bill no. 008524 dated 08.08.1995. bill no. 007351 dated 19.05.1995 and bill no. 007350 dated 19.05.1995 as Ex. PW-12/1 to Ex. PW-12/5.
STATEMENTS OF ACCUSED PERSONS 4.0. On the basis of incriminating evidence against the accused persons their statements were recorded u/s 313 Cr.P.C in which they denied the entire evidence against them and took the defence of false implications.
4.1. A-1 has stated that he has been falsely implicated in this CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 10 of 46 case. He had joined BRPL in March, 1987 and left it in December, 1995. He had joined as Dy. Manager and got four promotions within a period of 7 years. He has not caused any pecuniary loss to BRPL in any manner and had not taken any pecuniary advantage from A-5. Dealings of BRPL with A-5 were of 7 crores. A-5 had paid all the due amount to BRPL and nothing was due. Finance department was the authority to approve any requisition and to reject any requisition raised by the marketing department and the finance department can change the payment terms as mentioned in the requisition time to time, based on the guidelines of BRPL.
4.2. A-2 has stated that IOCL after taking over BRPL assigned various important assignments to him. Audit report of BRPL was not discussed with him and no queries were asked by BRPL management and no internal enquiry was conducted by the management and no departmental proceeding was initiated against him. He had followed the laid down policies / guidelines issued from head office of BRPL and at no point of time made any loss to BRPL. He had not given any pecuniary benefit to any customer and in particular to A-5 and no loss was made to BRPL.
4.3. A-3 has stated that it is a false case and he has been falsely implicated in this case. A-5 had not taken any pecuniary advantage with the help of any officer or officials of BRPL at any point of time. He never participated in day to day business of A- 5 at any point of time and was not authorised for the business of A-5. All the business of A-5 was conducted by the CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 11 of 46 employees/officers of the A-5 as authorised by the company. BRPL was maintaining the running account of A-5 in regard to the business transactions between them and also to maintain the amount received by LCs, Cheques and Drafts and also Credit Notes of BRPL.
4.4. A-4 has taken the defence that he has been falsely implicated in this case and has suffered since 1999. He never gain any pecuniary advantage from A-5 and also not caused any loss to his company. He was only looking after the works department of the company as he is a technical person and has no knowledge of finance / accounts of the company as he had never dealt in other departments of the company except the work department being a technical person.
DEFENCE EVIDENCE 5.0. All the accused have opted to lead defence evidence, however, A-1 has examined one witness DW-1 Sh. M. Chinnakkan who was working with BRPL as Additional Regional Manager in 1987. He was looking after the sales of Polyester Staple Fiber (PSF) and other petrochemical products from Southern Region. In 2006 he was posted as DGM (Vigilance) at BRPL Dhaligaon (HQ). After registration of this FIR it was found that entire payment was received on the date of sanction and there was no pending amount. At the instance of HR, a letter was written to SP, ACB, CBI, New Delhi on 16.08.2006 informing that entire payment was received and no payment was pending on the date of sanction. He proved copy of letter as Ex. DW-1/A and he identified impression of his signature on it at point A. CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 12 of 46 ARGUMENTS 6.0. Heard and considered the arguments of Sh. Anil Tanwar, Ld. PP for CBI, Sh. H.K. Aneja, Ld. Counsel for A-1, Sh. Kuldeep Mansukhani, Ld. Counsel for A-2, Sh. P.S. Singhal, Ld. Counsel for A-3 and Sh. K.K. Patra, Ld. Counsel for A-4. Also perused the written synopsis filed by Ld. PP for CBI and Ld. Counsels for A-1 to A-4.
6.1. Ld. PP for CBI has stated that PW-2 was the then Senior Manager in IOC has proved the procedure for sending the goods. He has also proved the postings of A-1 & A-2. It has been stated that this witness has stated that A-1 after assigned any customer to any marketing officer and he alongwith other marketing officer only used to report to A-1. This witness has specifically denied that the requisitions used to be prepared by marketing officer on the basis of telephonic requisition placed by the customer. It has been stated that A-1 being Regional Manager was responsible for compliance of observation of the Finance Department and he only used to sign and followed the instruction of A-1. It has been stated that similarly PW-3 who was working as Deputy Manager Marketing at the relevant time and looking after the Delhi Zone has stated that he used to prepare requisition for material on behalf of the parties under the directions of A-1 and thereafter he used to follow the requisition with the Finance Department and also with the Distribution Department and warehouse. It has been stated that from the statements of these witnesses it stands proved that A-1 and A-2 during the period 1995 in conspiracy with A-3, A-4 & A-5 allowed CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 13 of 46 supply of polyester staple fiber worth Rs. 67 lacs without securing credit in the form of LC/bank guarantee. It has been stated that it further stands established that Rs. 4 crores were outstanding against A-5 and A-3 had forged three LCs No. 37/95, 46/95 & 52/95 which were submitted to BRPL. It has been stated that these three LCs were sent with letter dated 17.08.1995 (D-
43) and the question handwriting Q3 on it is the hand of A-4 the then General Manager of the company and employee of A-3 as per expert opinion Ex. PW-9/1. It has been stated that PW-3 has never seen the letter D-43 through which LCs were purportedly sent to BRPL. Had this letter along with photocopies being official arrived in BRPL then this witness being responsible official in marketing section have come across these LCs. It has been stated that plea of the accused persons that it was a mere commercial transaction and there was a running account of A-5, is not tenable in view of the fact that outstanding balance sheet of each month shows that balance against A-5 was increasing each month from May, 1994 onwards which should have restrained A-1 & A-2 from further unsecured supply of goods to A-5. It has been stated that circular dated 24.12.1994 heavily relied by the accused persons, is not applicable to the present case, in view of the fact that there were already huge unsecured supplies to A-5. Regarding sanction of prosecution of A-2, it has been stated that Ex. PW-10/A reflects that competent authority for granting sanction had gone through relevant record before issuing the sanction order. It has been stated that this witness is turned hostile but has admitted that he must have examined the material but he does not remember the same now.
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 14 of 466.2. Ld. Counsel for A-1 has submitted that FIR in this case was lodged on the basis of source information and no preliminary enquiry was conducted before registration of the FIR. It has been stated that BRPL was not the complainant of the FIR. It has been stated that at the time of the FIR due amount against A-5 was Rs. 43.13 lacs, at the time of sanction order due amount from A-5 was Rs. 16.33 lacs and at the time of filing the charge sheet, the balance amount was Nil. It has been stated that as per prosecution case BRPL was a public sector company and A-1 was a public servant but prosecution has failed to produce any evidence whether BRPL was holding 51% shareholding as per section 617 of Companies Act. It has been stated that prosecution has failed to prove that BRPL was a public sector company and accordingly A-1 was a public servant. It has been stated that PW-1 has nowhere stated that BRPL has ever presented the alleged photocopies of the LCs to PNB, Ludhiana through their bank for encashment. It has been stated that PW-3 has deposed that A-1 used to send him for reconciliation and has asked him in July, 1995 to visit A-5 for account reconciliation and has immediately stopped all the supplies until outstandings are cleared and thereafter no supply was made from July, 1995 onwards. It has been stated that PW-3 has not stated anything regarding conspiracy between the accused persons. It has been stated that A-1 was transferred to Mumbai in September, 1995 and had no knowledge of all communications between PW-3, BRPL and A-1 or about receipt of letter with photocopy of LCs. It has been stated that PW-3 has specifically stated that no special procedure was changed for the supply of goods to ACL at any CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 15 of 46 time, all the payments made to ACL as stated in the requisition slip and same has been reflected in D-73. It has been stated that PW-3 has nowhere stated whether BRPL lost anything or A- 5 gained anything or wrong supplies were made by misusing any policy / guidelines or supplies were made on behalf of photocopies of alleged LCs or any special favour or process was followed for A-5. It has been stated that PW-8 the Investigating Officer has admitted that these three LCs were never presented to State Bank of Hyderabad for encashment being fake LCs. It has been stated that IO has further admitted that during his investigation had had not seized any document from BRPL showing it to be government company and he had not seized any document in respect of shareholding of BRPL. It has been further stated that IO has failed to prove if goods worth Rs. 67 lacs were given by A-1 without securing payments. It has been stated that PW-11 the IO who has filed charge sheet has admitted that nothing has transpired during course of investigation conducted by him as to whether or not any supplies had been made on the basis of three LCs mentioned in the FIR. He has further admitted that nothing incriminating specifically was noted during the course of investigation done by him. It has been stated that RC No. 33/98 showing A-1 & A-2 as accused under similar allegations was registered but in that case Sh. Dinesh Dayal, Ld. Spl. Judge CBI had discharged the accused vide order dated 02.08.2004. It has been stated that this witness has not proved the pricing policy / guidelines of BRPL as mentioned in the charge sheet. It has been stated that BRPL has a long standing business relationship with A-5 since 1991 and carried out CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 16 of 46 business in crores. There was no departmental enquiry by BRPL against A-1, rather due to his hard work, frequent promotions and appreciations were awarded to him. In support of his submissions, Ld. Counsel has invited attention of the court to the following judgments:-
State of Karnataka Vs. M. Muniswamy [VIII (2000) SLT 646]; Jibrial Diwan Vs. State of Maharashtra (CA No. 545/1993 decided by Hon'ble Supreme Court of India on 24.07.1997); S.P. Bhatnagar & Anr. Vs. The State of Maharashtra (1979 Crl. L.J. 566); Shreya Jha Vs. CBI [III (2007) DLT (CRL.) 259]; S.K. Kale Vs. State of Maharashtra (AIR 1977 Supreme Court
822); Sumativijay Jain Vs. The State of M.P. & Ors. (1992 Crl.
L.J. 97); State of Rajasthan Vs. Govind Ram Bagdiya & Ors. (2003 Crl. L.J. 1169); State Vs. Dharmender Singh Mehra & Anr. [2012 V AD (Delhi) 108]; Abdulla Mohammed Pagarkar etc. Vs. State (Union Territory of Goa, Daman and Diu), (1980 Crl. L.J. 220); Kali Ram Vs. State of Himachal Pradesh (1973 AIR 2773); The State Vs. Sheikh Kadher Sheikh Buden (1991 Crl. L.J. 3208); Mohd. Iqbal Ahmed Vs. State of Andhra Pradesh (AIR 1979 SC 677).
6.3. On behalf of A-2 it has been contended that the sanctioning authority i.e. PW-10 has not supported the CBI and appears to be suffering from selective amnesia. This witness has confirmed that request received from CBI by Vigilance Department of BRPL was never put up before him for sanction. He even does not remember if documents had been put up before him when he signed the sanction order Ex. PW-10/A. He CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 17 of 46 further denied that there was any pricing policy and he is also not aware if as per the pricing policy the marketing section was allowed to give credit to the extent of 4 trucks to their buyers as per circular Mark P-5/DA. It has been stated that Vigilance Department has given clean chit to this accused on 16.08.2006. It has been stated that none of the PWs including the sanctioning authority has even whispered as to conspiracy amongst the accused persons. It has been stated that PW-3 was working as Marketing Executive, has not supported the case and has confirmed that no supplies were made against the alleged forged LCs as these LCs were never given by BRPL to their bankers. It has been stated that CBI had conducted a sketchy investigation based more on their perceptions than on any evidence. It has been stated that this accused is working as Manager Finance in IOC and is handling very sensitive and important assignments. It has been urged that defence witness DW-1 has very fairly conceded that the organization was marketing its products both on secured credit and without securing credit, as part of the marketing policy of the organization which depended upon the dynamics of the market.
6.4. On behalf of A-3 it has been contended that he is neither named in the FIR nor any role has been attributed to him. As Managing Director, his operations were carried out from the registered office situated at Ludhiana. A-4 who was Incharge of the company unit which was based at Dhuri and all operations with BRPL were handled by A-4. It has been stated that there was running account between BRPL and A-5 and there used to CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 18 of 46 be balances in this running account. BRPL had filed a winding up petition before Hon'ble Punjab & Haryana High Court for non- payment of Rs. 43.5 lacs, A-5 was paying Rs. 3 lacs a month and there was no balance left to be paid by A-5 when sanction for prosecution was granted. It has been stated that in commercial transactions the right course available to a creditor is to approach appropriate civil court if there is any grievance in respect of outstanding payments. But in this case, CBI has registered an FIR. It has been stated that as per the allegations the alleged forged letter of credit was typed at the factory premise at Dhuri,but no aspersions can be caused on this accused as he was based at Ludhiana. The last supplies were made on 24.07.1995 and they were not in pursuance to any alleged LC. It has been stated that this accused has been arraigned in this case only on the basis of vicarious liability and no willful act has been attributed to him. It has been stated that this is not the prosecution case that this accused has forged the LCs or the LCs were forged at his instance.
6.5. On behalf of A-4 it has been stated that CBI has failed to establish that LCs no. 37, 46 and 52 were used by A-5 after getting supply from BRPL and there is no evidence about any conspiracy between the officials of BRPL and ACL. It has been stated that from the statement of PW-3 it stands proved that no undue advantage was given by officials of BRPL to ACL(A-5). The procedure followed qua other companies was followed in relation to A-5 and LCs No. 37, 46 & 52 were not considered by BRPL while supplying goods to A-5. It has been stated that only CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 19 of 46 allegation against this accused is that letter dated 17.08.1995 (D-43) bears his handwriting but no witness examined by CBI has supported its case against this accused. PW-6 employee of ACL has failed to identify signatures of this accused. It has been stated that PW-7 another official of A-5 has also not supported the case of CBI. It has been stated that law is settled that taking of specimen signatures and handwriting of a person accused of an offence during investigation without permission of the court is not permissible under law. It has been stated that opinion given by handwriting expert is weak evidence and same needs to be duly corroborated. It has been further urged that to establish the ingredients of offence u/s 420 IPC CBI was required to establish that delivery of goods has taken place in lieu of alleged forged LCs but there is no such evidence on record. To attract section 468 IPC prosecution has to establish that the forged documents were prepared for the purpose of cheating. In the absence of cheating charge u/s 468 & 471 IPC is not made out. It has been stated that as per the evidence on record A-5 had 6 to 7 officials who were authorised signatories of the company but IO had not tried to find out who had signed the alleged letter i.e. D-43. It has been stated that there is neither wrongful gain to A-5 nor wrongful loss to BRPL and the covering letter i.e. D-43 is not recovered from the office of A-5. To support his submissions, Ld. Counsel has drawn attention of the court to the following judgments:-
Sukhvinder Singh & Ors. Vs. State of Punjab [(1994) 5 Supreme Court Cases 152]; Sapan Haldar & Anr. Vs. State CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 20 of 46 [191 (2012) Delhi Law Times 225 FB)]; Magan Bihari Lal Vs. The State of Punjab [(1977) 2 Supreme Court Cases 210]; Chatt Ram Vs. State of Haryana [(1980) 1 Supreme Court Cases 460] APPRECIATION OF EVIDENCE 7.0. One of the charge being faced by all the accused persons is of entering into conspiracy to cause pecuniary advantage to A- 5 and wrongful loss to BRPL by allowing A-5 to lift Polyester Staple Fibre (PSF) worth Rs. 67 lacs without securing credit in the shape of letter of credit / bank guarantee in violation of the pricing policy of BRPL. As mentioned in the charge sheet, as per guidelines of the Pricing Committee of the management of BRPL no unsecured credit was permitted and all the sales were to be made on the basis of letter of credit / bank guarantee. In special case and that too after proper evaluation of the standing of the customer and with prior approval of Committee of Directors unsecured credit could be allowed. In case of A-5, no such norms were even adopted.
7.1. The prosecution has failed to prove any guidelines of the Pricing Committee of the management of BRPL.
7.2. It is the admitted case of all the accused that A-5 was having running account with BRPL for supply of PSF. As per Ex.
PW-5/18 which is details of outstanding balance of M/s ACL (A-
5) at the end of each month the account was running since 1991 till July 1995. The last invoice was raised on 24.07.1995 and thereafter accused made various outstanding payments till the year 2000.
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 21 of 467.3. One of the contention raised on behalf of prosecution is that PSF worth Rs. 67 lacs was supplied to A-5 between April, 1995 to July, 1995 when there was outstanding of Rs. 4 crores against ACL by A-1 & A-2 who were Regional Marketing Manager and Dy. Finance Manager respectively of BRPL in connivance with A-3 & A-4. PW-2 Sh. Sh. Utpal Basak was posted in marketing / distribution section under A-1, he has proved the various requisition forms and delivery advises in favour of A-5. To understand procedure of raising requisition and issuance of delivery advise, let's see what PW-2 and PW-3 has to say.
7.4. As per A-2, as per procedure, indent used to be raised from the marketing section as per advise of Regional Manager i.e. A-1. Thereafter, the same was concurred by the Finance Department. Then it was put up before them for delivery advise / delivery order. After issuance of delivery advise matter used to go to various warehouses for lifting / delivering of material to various customers. Delivery advise / delivery order is signed by Marketing Department as well as Finance Department officials.
7.5. PW-3 Sh. Ashok Kumar Bhandari during his cross examination has further elaborated the procedure. As deposed by him, the parties used to telephonically inform their department about their requirements. Thereafter, requisition was prepared. The quantity, quality of goods and mode of payment were mentioned in the requisition prepared. Invoice rates were also mentioned therein. Thereafter, the requisition used to be forwarded to the Finance Department for concurrence. After CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 22 of 46 concurrence from the Finance Department, the requisition was forwarded to the Distribution Department which was part of the Marketing Department. The said letter was then prepared by the Marketing Distribution Department. The said letter is then presented to the Finance Department. The letter is then checked in the Finance Department and after being signed by the concerned officer, it is forwarded to the dispatch section for delivery of goods. He has further deposed that running account of all the parties was maintained in the Finance Department, a ledger was also being maintained in the Finance Department in respect of A-5. Value of goods supplied, credit note, debit note, payment receipts were all reflected in the party ledger. This procedure was being followed right from the beginning.
STATUS OF LCs NO. 37/95, 46/95 & 52/95 8.0. A-4 has been charged for wrongfully and falsely incorporating the words "already opened in your favour" in the letter Mark P-8/DA3 (D-43) allegedly sent to BRPL along with forged photocopies of LCs No. 37/95, 46/95 & 52/95 for the purpose of cheating BRPL. All the accused persons are also facing charges of forging these three LCs and using the same for the benefit of A-5 in furtherance of conspiracy.
8.1. From the evidence led by prosecution it stands established beyond any doubt that these three LCs were got issued by A-5 but BRPL was not a beneficiary of these LCs. PW-1 Sh. Tarsem Lal, Manager, Punjab National Bank was posted at the relevant time in the Industrial Area Branch Ludhiana. He has proved LC no. 37/95 as Ex. PW-1/A, LC No. 46/95 as Ex. PW-1/C and Ex. PW-52/95 as Ex. PW-1/E. As per him beneficiaries of these LCs were M/s Grasim Industries Ltd. and M/s Indian Organic Chemicals Ltd. As per him CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 23 of 46 intimation in respect of LC No. 37/95 and 46/95 was sent to Manager, SBI Nagda. Ex. PW-1/B and Ex. PW-1/C are the two letters sent by Punjab National Bank, Industrial Area, Ludhiana to SBI Nagda sending LC No. 37/95 dated 23.05.1995 for sum of Rs. 25 lacs and LC No. 46/95 dated 17.06.1995 respectively.
8.2. These three LCs were received vide letter dated 17.08.1995 stated to have been sent by A-5 to BRPL, which is marked P-8/DA3. IO (P-8) had seized these documents and just for the purpose of identification only these documents have been marked as Mark P- 8/DA3. As per the prosecution case vide this letter photocopies of these three LCs having no. 37/95 dated 23.05.1995 for a sum of Rs. 23 lacs, LC No. 46/95 for sum of Rs. 23 lacs and LC No. 52/95 for sum of Rs. 24 lacs were sent by A-5 through its authorised signatory to BRPL.
8.3. Who had sent this letter from the office of A-5 situated at Dhuri, District Sangrur, Punjab, vide which mode and when it was received in the office of BRPL, no evidence in this regard has come on record. However, as per Ex. PW-8/6 photocopies of these three LCs are stated to have been seized by IO (PW-8) from Sh. Anand Prakash Sharma, Officer of BRPL. IO (PW-8) has admitted during his cross examination that photocopy of LC cannot be presented in the bank for encashment and as per his investigation fake LCs had never been got encashed with PNB. Moreover, PW-3 who was working as Dy. Manager (Marketing) in BRPL at the relevant time during his cross examination has stated that he had not received these LCs, he had not received any intimation in respect of these LCs and he had not made any supply against any of these LCs. He has further deposed that even it had not come to his knowledge subsequently if anyone else had made supply against these LCs. As CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 24 of 46 per the record checked by him there had been no requisition against these LCs.
STATUS OF LETTER EX.MARK P-8/DA-3 9.0. It is very relevant to mention here that as per the prosecution case PSF worth Rs. 67 lacs was supplied to A-5 by BRPL between April, 1995 to July, 1995 whereas these LCs are stated to have been received by BRPL vide forwarding letter Mark P-8/DA3 dated 17.08.1995.
9.1. To establish that this letter was prepared in the office of A-5 and questioned handwriting Q3 was written by A-4 the then General Manager and employee of A-3 of company A-5, prosecution has relied upon report of the handwriting expert Ex. PW-9/1. As per IO (PW-8) he had taken specimen handwriting of A-4 which are Ex. PW- 3/K and he has taken specimen type impression of 4 typewriters belonging to A-5. Ex. PW-3/K is containing specimen handwriting of A-4 on pages S-1a to S-20a. As per report of PW-9 standard writings marked S-1a to S-20a being the person responsible for writing the questioned writings Mark Q3. Regarding the questioned typed scripts Mark Q6 on Mark P-8/DA3 it is mentioned in the report that it has not been possible to express any opinion regarding its basis of origin.
9.2. One of the main contentions raised on behalf of A-4 is that law is settled that taking of specimen signatures and handwriting of a person accused of an offence during investigation without permission of the court is not permitted by law and the evidence is inadmissible. In support of his submissions, Ld. Counsel has relied upon the observations made by Hon'ble High Court of Delhi in Sapan Haldar & Anr. (Supra).
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 25 of 469.3. In Sapan Haldar & Anr. (Supra) the relevant para of this judgment reads as follows:-
" 31. We answer the reference as follows:-
(I) Handwriting and signature are not measurement as defined under Clause (a) of Section 2 of the Identification of Prisoners Act, 1920. Therefore, Section 4 & 5 of the Identification of Prisoners Act, 1920 will not apply to a handwriting sample or a sample signature. Thus, an investigation officer, during investigation, cannot obtain a handwriting sample or a signature sample from a person accused of having committed an offence. (II) Prior to June 23, 2006, when Act No. 25 of 2005 was notified, inter alia, inserting Section 311A in the Code of Criminal Procedure, 1973, even a Magistrate could not direct a person accused to give specimen signatures or hand writing samples. In cases where Magistrates have directed so, the evidence was held to be inadmissible as per the decision of the Supreme Court in Ram Babu Mishra's case (supra).
According to Section 73 of the Indian Evidence Act, 1972, only the Court concerned can direct a person appearing before it to submit samples of his handwriting and/or signature for purposes of comparison."
9.4. The issue regarding handwriting and signatures specimen was recently dealt with by our Hon'ble High Court in Rekha Sharma & ors Vs. CBI [2015 (218) DLT 1]. The court has observed that investigating officer in a criminal case is empowered under Section 2(h) Cr.P.C. to collect evidence and undertake various steps in that endeavor. The Supreme Court in Selvi V. State of Karnataka [(2010) 7 SCC 263] has endorsed this view and held that term "investigation" includes steps which are not exhaustively and expressly enumerated. Even CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 26 of 46 otherwise, experience suggests that every crime requires its own tailor made investigation which may be peculiar to the circumstances of the case. It would not be prudent and neither possible to exhaustively catalogue such steps taken during investigation. Thus, absence of a specific provision enabling a particular step under investigation does no imply that the investigation agency is disabled from taking that step under its power/duty to conduct investigation. The relevant para 448 and 449 are as follows:-
"448. The decision in Sapan Haldar (supra) again has considered the question whether handwriting and signature specimens are obtainable under Section 4 & 5 of the Identification of Prisoners Act, 1920 and the Court observed that since both handwriting and signature of a person are not a mark of identification, the same cannot be 'measurement' as defined under Section 2(a) of the Identification of Prisoners Act. However, the very next line which declares that an investigation officer, during investigation, cannot obtain a handwriting sample or a signature sample from a person accused of having committed an offence is in teeth with the view adopted by the Supreme court in Navjot Sandhu (supra)* [(2005) 11 SCC 600] and Dara Singh (supra)* [(2011) 2 SCC 490].
449. In view of the aforesaid discussion, I am of the opinion that the report of the expert and analysis of handwriting and signature specimens of the accused persons cannot be rendered inadmissible on the ground that it was obtained in violation of prescribed procure."
9.5. In view of the aforesaid observation, the contention raised by Ld. counsels for the accused persons that handwriting and CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 27 of 46 signature specimen cannot be considered, is not sustainable.
9.6. Accordingly, in view of the handwriting expert report Ex. PW-9/1 it stands established that Mark P-8/DA3 bears handwriting of A-4 at Q3. This letter is signed by authorised signatory of A-5 at point Q1 but prosecution has failed to establish that who has signed this letter as authorised signatory of A-5.
9.7. Ld. PP for CBI has drawn attention of this court to letters Ex. PW-5/1, Ex. PW-5/5 & Ex. PW-5/11 all dated 18.08.1995 written by A-2 on behalf of BRPL to Branch Manager, State Bank of Hyderabad bank of BRPL seeking negotiations of sales documents under letter of credit. It has been contended that under conspiracy amongst the accused persons, A-2 had submitted these LCs for negotiations against the supplies of PSF made by BRPL to A-5 on their three requisitions Ex. PW-2/1 (D-
11), Ex. PW-2/2 (D-12) & Mark P-8/DA2 (D-56) dated 12.07.1995, 25.04.1995 & 29.03.1995 respectively.
WHETHER PSF WAS SUPPLIED ON THE BASIS OF REQUISITION EX. PW-2/1, EX. PW-2/2 & EX. PW-2/3 UNDER A CRIMINAL CONSPIRACY 10.0. It is not disputed by the accused persons that on the basis of these three requisitions no material i.e. PSF was supplied by the BRPL to A-5. To prove supply of material against requisition Mark P-8/DA3, prosecution has relied upon invoice order Ex. PW-5/7 & Ex. PW-5/8. It has also relied upon the bill for transportation issued by DHTC (India) Ltd. Ex. PW- 12/1. To prove supply of material against requisition Ex. PW- 2/2, prosecution has relied upon invoice Ex. PW-5/3 & Ex. PW-
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 28 of 465/4. It has also relied upon the bill raised by DHTC (India) Ltd. dated 19.05.1995 for transportation of the goods from Jaipur to Dhuri, Punjab. Similarly, to establish supply of goods against requisition form Ex. PW-2/1, prosecution has relied upon the invoice Ex. PW-5/13 & Ex. PW-5/14. It has also relied upon the two bills raised by DHTC (India) Ltd. Ex. PW-12/2 & Ex. PW- 12/3 dated 03.08.1995 and 08.08.1995 for supply of material from Jaipur to Dhuri. Perusal of these documents establish that against these three requisition forms, PSF was supplied by BRPL from Jaipur to Dhuri, Punjabi i.e. at the factory premises of A-5. As per the bills, the total cost of the material comes out to be Rs. 2162574 (as per Ex. PW-5/1) + Rs. 21,83,753/- (as per Ex. PW-5/5) + Rs. 23,58,851/- (as per Ex. PW-5/11) = Rs. 67,05,178/-. However, it is relevant to mention here that in none of these three requisition forms Ex. PW-2/1, Ex. PW-2/2 & Mark P-8/DA2 there is mention of any of these three fake LCs i.e. 37/95, 46/95 & 52/95.
10.1. Now coming back to the letters Ex. PW-5/1, Ex. PW-5/5 & Ex. PW-5/11 submitted by A-2 (as signatures of A-2 are identified on these documents by PW-5) ,vide these letters, these three fake LCs i.e. 37/95, 46/95 & 52/95 along with sales invoice raised on the basis of PSF worth Rs. 67 lacs supplied by BRPL to A-5 are purported to be sent for negotiations to the Branch Manager of its bank i.e. State Bank of Hyderabad on 18.08.1995. What happened with to these LCs and if any response was received from State Bank of Hyderabad, Kasturba Gandhi Branch, New Delhi, no evidence in this regard has come CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 29 of 46 on record.
10.2. There is no doubt that these three LCs were fake but point to be considered is if and A-2 by sending these three LCs for negotiations to its bank on the basis of PSF supplied against three requisition forms Ex. PW-2/1, Ex. PW-2/2 & Ex. PW-2/3 was acting under conspiracy.
10.3. It is also well settled that criminal conspiracy is often hatched in secrecy and for proving the offence, substantial direct evidence may not be available. An offence of criminal conspiracy can also be proved by circumstantial evidence. However, it cannot be deemed to have been established on mere suspicion and surmises or inferences which are not supported by cogent evidence. Where the prosecution case rests merely on circumstantial evidence, the fact established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty. However, on the basis of evidence led by prosecution, if two views are possible, one pointing to the guilt of the accused and other to his innocence, the one in favour of the accused must be accepted. In this regard, reference can be made to Saju Vs. State of Kerala, (2001) 1 SCC 378, Sherimon Vs. State of Kerala, (2001) 10 SCC 768, P. K. Narayanan Vs. State of Kerala, (1995) 1 SCC 142, State of M.P. Vs. Sheetla Sahai, 2009 Cr. L. J. 4436.
10.4. The essence of conspiracy is unlawful combination and the complicity of the accused has to be decided after considering CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 30 of 46 all the circumstances proved, before during and after occurrence. Agreement between the conspirators may also be proved by necessary implication. It is not necessary that each member of a conspiracy must know all the details of the conspiracy. Facts established should be consistent only with the hypothesis of guilt of the accused. It does not mean that each and every hypothesis suggested by accused must be excluded by proved facts. In this regard, reference can be made to Chaman Lal Vs. State of Punjab, AIR 2009 SC 2972, R. K. Dalmia Vs. The Delhi Administration, AIR 1962 SC 1821, Muriappan Vs. State of Tamil Nadu, AIR 2010 SC 3718 and Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC
596. 10.5. Other evidence led by prosecution is being evaluated ahead, let see what more evidence prosecution has been able to prove to establish its main allegation of conspiracy amongst the accused persons.
STATUS OF ACCOUNT OF A-5 WITH BRPL 11.0. The other most important aspect of this case, strongly argued by accused persons is that A-5 was having running account with BRPL since 1991 when last invoice was raised by BRPL against A-5 on 24.07.1995 and thereafter whatever outstanding dues against A-5 were cleared. It has also been urged that BRPL had filed Winding Up Petition before Hon'ble Punjab & Haryana High Court against A-5 in which A-5 entered into settlement and by year 2000, there was no balance outstanding. It has also been submitted that at the relevant time CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 31 of 46 BRPL was having huge stocks of PSF and market position was very tight and to promote sales, BRPL had opted to give unsecured credits to customers. In support of his submissions, Ld. Counsel has relied upon Mark P-5/DA which part of D-124. The PSF Price Policy File of BRPL seized by the IO during the investigation.
11.1. For better appreciation of facts the contents of this letter are reproduced here as follows:-
"Continuation of Note dated Dt. 23.12.94 Date : Dec. 24, 1994 Discussed with Dir (Commercial) the latest recommendation given by Marketing (placed in the file). The PSF sale is not picking up despite giving Quantity linked discount. The stock of PSF as on date is about 4000 MT which is worth about Rs. 35 crores. The money position in the market is understood to be very tight which is affecting PSF sales. Our cash position also to be improved by increasing the sales.
We may consider giving following incentive to boost up PSF sale.
i) Trade discount Rs. 2/Kg. for payment made within 48 hours from date of despatch.
ii) Despatch against L/C with 30/60 days interest with trade discount of Rs. 1.50/Kg.
iii) Payment within 15 days with trade discount of Rs. 1/Kg.
iv) 30 days interest free credit with no trade discount.
A customer has to take 50% of the total lifting in a month against mode of payment (I) and / or (ii) mentioned above, to avail the benefit under (iii) and / or (iv). However, total unsecured credit to a CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 32 of 46 customer will be limited to maximum of 4 Truck loads of PSF supply.
Sale against LC mentioned under (ii) above may be implemented with immediate effect and sale against (i), (ii) and (iv) should be started from January, 1995.
May kindly approve.
(R.N. DAS) DY. GENERAL MGR (FIN)"
11.2. On the bottom of this letter, there is approval of Director (Finance) mentioning that the proposal as mentioned above may be made effective with immediate effect prospectively (i.e. without opening up earlier contract) subject to....... (words not readable).
11.3. Contention raised on behalf accused persons primarily on behalf of A-1 & A-2 is that this office order was in operation at that time and BRPL used to give unsecured credits to its customers. It has been contended that prosecution has failed to file and proved any guidelines of the Pricing Committee of Management and any rules or office order mandating officials of BRPL not to supply PSF on unsecured credit.
11.4. Perusal of this letter Mark P-5/DA reveals that at the relevant time there were huge stocks to the tune of 4000 MT worth Rs. 35 crores, money position in market was very tight and same was affecting PSF sales. To boost sales, various incentives were given by BRPL to the customers. I agree with the contention raised by accused persons that since prosecution has failed to bring on record any guidelines of the Pricing CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 33 of 46 Committee of Management of BRPL or any rules / guidelines of BRPL managing its financial relations with the customers, Mark P-5/DA being part of D-124 i.e. Pricing Policy File, being seized by CBI during investigation from the office of BRPL, was in operation at the relevant time when these questioned supplies worth Rs. 67 lacs were made by BRPL to A-5.
11.5. DW-1 Sh. M. Chinnakkan who had joined BRPL in 1987 as Addl. Regional Manager was examined by A-1 & A-2. He has deposed that during the relevant time he was looking after the sales of PSF and other petrochemical products. The sales of PSF and pricing terms were dynamic in nature and there were secured and unsecured sale of PSF. In 2006 he was posted as DGM at BRPL at Dhaligaon (HQ). During his review of various cases with Human Resources & Finance Department it was found that no departmental case was pending. It was also found that the entire payment was received on the date of sanction and there was no pending amount. At the instance of HR Department a letter dated 16.08.2006 Ex. DW-1/A was sent to SP, ACB, CBI informing that entire payment was received. No payment was pending on the date of sanction. This witness was cross examined by Ld. PP, CBI at length but nothing has come on record to discredit his testimony. During his cross examination he has explained dynamic nature of pricing term. As per him this means that some time market becomes very tight in money supply, then it becomes difficult to sell the product in the market and because of this reason, surplus stock remains in the warehouse of the company. The manufacturing activity has to CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 34 of 46 continue. Because of the surplus goods, company has to sell the goods on additional credit, both secured and unsecured and at discounted prices. Ex. DW-1/A is a letter written by DW-1 to SP, CBI in this case mentioning that entire amount has been received by BRPL as on date of sanction i.e. 06.10.2000.
11.6. Ex. PW-5/18 is the details of outstanding balance with ACL of each month in the records of BRPL Ltd. which was filed as a support paper with Winding Up Petition. This shows the account of A-5 with BRPL was running since August, 1991 and last invoice was raised on 24.07.1995. The outstanding balance against A-5 was throughout there but the amount kept on varying. In October, 1992 the outstanding balance with A-5 was Rs. 205.95 lacs. It kept on increasing thereafter and again in June, 1994 it reached to Rs. 221.65 lacs. In September, 1994 the balance amount was Rs. 394.66 lacs and in October, 1994 it touched to Rs. 401.03 lacs. It touched the peak in June, 1995 as it swelled to Rs. 508.48 lacs. In the month of July, 1995 when the last invoice was raised on 24.07.1995 it was Rs. 428.7 lacs. Thereafter, it kept on decreasing and ultimately outstanding balance became NIL. PW-3 who was Dy. Manager (Marketing) of BRPL has admitted during his cross examination that as per his knowledge and finance statement of BRPL complete payment in respect of the outstanding principal amount had been made by ACL (A-5) by 03.10.2000.
11.7. From the evidence discussed above, it is abundantly clear that it was not for the first time that outstanding balance of BRPL with A-5 swelled to more than Rs. 4 crores. Absolutely no CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 35 of 46 evidence has been adduced by prosecution to support its allegation that unsecured supplies were not made by BRPL to any other customer during the relevant time. Perusal of Ex. PW- 5/18 reveals that since August, 1991 outstanding balance was there against A-5 of different amounts and it continued till July, 1995.
11.8. Statement of A-3 is very relevant to understand the continuity of the account of A-5 with BRPL and receipt of payments by BRPL against the supplies made on the basis of requisitions Ex. PW-2/1 to Ex. PW-2/3. The relevant portion of his statement is reproduced as follows:-
"Q. Is it correct that BRPL had received the amount of requisition mentioned in D-11 (Ex. PW-2/1), D-12 (Ex. PW-2/2) & D-56 from Arihant Cotsyn as per terms mentioned in the requisition form? A. As per D-11 (Ex. PW-2/1), payment had been received in respect of LC No. 55/95 & 56/95 but I cannot say as to when the payment had been received by BRPL. Payments had also been received in respect of D-12 (Ex. PW-2/2) but I cannot say as to when the payment had been received. As regards D-56, the cheques mentioned therein had been realized but I cannot say as to when the payment had been received by BRPL.
It is correct that payments in respect of D-11 & D-12 are reflected in my statement of account D-79 which is already Ex. PW-3/D. (Vol. As per my statement of account, at that time only LC was in hand and payment had not been received by that time.) It is correct that the LCs mentioned in Ex. PW-3/D were in hand with BRPL at that time. All the LCs were subsequently realized but I cannot say if the same had been realized within time or not. I have seen D- 73 which is already Ex. PW-5/17. It is party ledger of CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 36 of 46 Arihant Cotsyn. The payments in respect of cheques mentioned in D-56 find reflected in this party ledger.
I cannot say if the last invoice prepared by BRPL in respect of Arihant Cotsyn had been prepared on 24.07.1995. It is correct that as per party ledger (D-
73) which is already Ex. PW-5/17, the last dispatch to Arihant Cotsyn from BRPL is dated 24.07.1995.
It is correct that dealings of BRPL with Arihant Cotsyn were similar to those with other parties. It is correct that even other parties had outstandings due to BRPL. No undue advantage had been given to Arihant Cotsyn by Officers of Marketing Department of BRPL."
11.9. Ex. PW-3/D & Ex. PW-3/D1 prepared by PW-3 further clarifies the composition of outstanding balance of A-5 with BRPL. Ex. PW-3/D pertains to the statement of A-5 during the year 1995 - 1996 (April to July). It contain details of the material dispatched during this period, the payments received through LC and cheque. The LC in hand (secured), as per this letter unsecured payment during this period is Rs. 14.4 lacs. Though letter Ex. PW-3/D1 is not pertaining to the relevant period of this case but it is immediately prior to the relevant period and is for the F.Y. 1994 - 1995. As per this letter the unsecured payment due against A-5 was found to be Rs. 23 lacs. Accordingly, the entire outstanding balance reflected in Ex. PW-5/18 from August, 1991 till July, 1995 when last invoice was raised against A-5 was not unsecured. As is evident from Ex. PW-3/D, only Rs. 14.4 lacs was unsecured payment against A-5 during April to July, 1996. From the statement of PW-3 it stands further established that accounts of both the companies were being reconciled in routine. He has specifically deposed that during 25/26.07.1995 CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 37 of 46 he was sent by A-1 to Dhuri for reconciliation of accounts for the period April, May and June, 1995. As per accounts of BRPL there was an outstanding amount of Rs. 3.16 crores which was due to BRPL from A-5 but as per books of A-5, the outstanding was Rs. 2.56 crores. On being asked in this regard officials of A- 5 informed him that some LCs and credit notes were due for adjustment. As deposed by this witness, he had discussed the matter with A-1 & A-2 regarding the outstanding balance and various correspondence were done by him on behalf of BRPL with A-5 to ascertain the outstanding balance due. He has proved letter Ex. PW-3/E as per which he alongwith Sh. Hari Aggarwal and one another officer of BRPL sat in reconciliation of the account with Sh. LK. Mahajan, Manager (Finance) of A-5. During reconciliation proceedings, officials of A-5 agreed that outstanding amount of Rs. 143 lacs being payable by A-5 to BRPL.
11.10. He has also proved his reply Ex. PW-3/C on the FAX message stated to have been received from A-5. As per him in the month of November, 1995 a FAX message was received in the office of BRPL from A-5. The said FAX message was forwarded by Shri Sen Gupta to him for checking the contents from the customer's bank. Accordingly, he made enquiry from PNB, Ludhiana and furnished his report which is Ex. PW-3/C. As per this FAX, A-5 is stated to have mentioned that they had checked up with their bank that BRPL pending LC No. 37/95 & 52/95 are debited in their account, Ludhiana. In his reply, PW-3 has mentioned that "you may refer my visit 17.08.1995, 03.11.1995 & 09.11.1995 also account statement of ACL CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 38 of 46 prepared by undersigned on 26.10.1995, does not show the presence of above LC No. 37/95 & 53/95." The said FAX is stated to have been signed by Finance Manager, Sh. L. Mahajan of A-5. This questioned signature on the FAX message i.e. Q5 was sent for comparison with the CFSL with the specimen signatures but the report Ex. PW-9/1 is negative. No other evidence has come on record regarding receipt of this FAX message by BRPL from A-5. The only inference which can be drawn from these documents and details of the outstanding balance with A-5 Ex. PW-5/18 is that BRPL and A-5 were having a running account, during the business transactions, materials were supplied against LCs, against cheques and also unsecured supplies used to be made. Officials of BRPL used to visit office of A-5 at Dhuri & Ludhiana, Punjab to reconcile the accounts. As already discussed as per Mark P-5/DA after the approval of Director (Finance) of BRPL because of the tightening of the money position in the market and pendency of huge stocks unsecured credit to a customer limited to maximum four truck loads of PSF supply was also permitted. This negate one of the main prosecution allegation that as per the guidelines of the Pricing Committee of the Management of BRPL, no unsecured credit was permitted and all the sales were to be made on the basis of letter of credit / bank guarantee.
CONCLUSION 12.0. Having discussed the evidence led by prosecution in above paras, now lets see if on the strength of this proved evidence, prosecution has been able to prove the charges CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 39 of 46 levelled against the accused persons. Broadly speaking the charges against accused are two fold:-
(i) A-1 & A-2 being senior officials of Marketing Division and Finance Division of BRPL flouted the guidelines of the Pricing Committee of Management of BRPL. The unsecured credit was permitted and all the sales were to be made on the basis of letter of credit / bank guarantee, permitted sales of Rs. 67 lacs on the basis of requisition forms Ex. PW-2/1, Ex. PW-2/2 and Ex. PW-
2/3.
(ii) A-4 in conspiracy with other accused persons fabricated a letter Mark P-8/DA3 and along with it had sent forged photocopies of the LCs 37/95, 46/95 & 52/95 for the purpose of cheating BRPL.
12.1. Regarding the first allegation, prosecution has failed to prove if there existed any guidelines of the Pricing Committee of the Management of BRPL prohibiting unsecured credit and mandating that all sales were to be made either on the basis of LCs or on bank guarantee. Prosecution has also failed to prove if there existed any mandatory rule at the relevant time that unsecured credit could be permitted only in special cases and that too after evaluation of the standing of the customer and with prior approval of the Committee of Directors. Rather, from the letter Mark P-5/DA dated 24.12.1994 duly approved by Director (Finance) of BRPL, it stands established that to promote sale and to cope-up with the tight money position and due to huge backlog of PSF, unsecured credit limited to maximum four truck loads was permitted.
CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 40 of 4612.2. Prosecution has been able to prove that PSF was supplied on the basis of three requisition forms Ex. PW-2/1 to Ex. PW-2/3 worth around Rs. 67 lacs during the relevant period of April, 1995 to August, 1995 to A-5. But it stands established on record that in none of these three requisition forms there was mention of either of the three forged LCs i.e. 37/95, 46/95 & 52/95. PW-3 who was senior officer working in Marketing Division of BRPL has categorically admitted that payments against requisition forms Ex. PW-2/1 & Ex. PW-2/2 though not received but LCs were in hand with BRPL and regarding requisition form Ex. PW-2/3, the cheques issued by A-3 were in hand with BRPL.Therefore, prosecution has failed to prove that supply of PSF against these three requisition forms was unsecured.
12.3. Regarding the three LCs i.e. 37/95, 46/95 & 52/95 there is no doubt that these LCs were fake and their fabricated photocopies were submitted vide letter Mark P-8/DA3 with BRPL. There is absolutely no evidence that when this letter was received in BRPL but photocopies of these three LCs were recovered by IO (PW-8) on 17.08.1999 vide seizure memo Ex. PW-8/6. What was the contents of these three LCs, prosecution has failed to prove as same were not exhibited during evidence by any of the prosecution witness. It is also abundantly clear from the evidence led by prosecution that these LCs were not used and no material was supplied on the basis of these three fabricated LCs.
12.4. The point to be pondered is that why these three fake CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 41 of 46 LCs were submitted on behalf of A-5 with BRPL vide letter Mark P-8/DA3. If these fake LCs were submitted under the criminal conspiracy amongst the accused persons to do or justify any undue favours done by A-1 & A-2 to A-5. It is relevant to mention here that A-3 has been impleaded as one of the accused being Managing Director of A-5 the ultimate beneficiary of any revenue generated legally or illegally. Prosecution has failed to adduce any direct evidence to show his involvement in any way in this entire incident. However, against A-4 the only evidence which prosecution has been able to prove is that in letter Mark P-8/DA3 words "already opened in your favour" are found to be written in his handwriting. A-4 has nowhere specifically denied of having written these words but prosecution has failed to establish that who was the author of this letter who has signed as authorised representative of A-5. What was the motive of sending this letter on letter head of A-5 alongwith fake LCs to BRPL, prosecution has failed to unearth. IO (PW-8) who has done the main investigation has stated that he had not written statement of any witness in respect of handwriting now encircled green Mark H on document Mark P-8/DA3. He has further admitted that as regards the remaining handwritten portion i.e. P1, P2 & P3, he had not recorded statement of any witness qua identification of author of the same. He had also not recorded statement of any witness regarding identification of the typed portion in the letter. He has specifically admitted that he did not make any effort to know about the author of handwritten portions from office of ACL. He also did not make any enquiry as to who had written the letter. He has further stated that as per his investigation there CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 42 of 46 were two authorised signatories in A-5 but he had not recorded their statements u/s 161 Cr.P.C. In view of this court here investigation is lacking as the authorised signatory who is author of this letter was required to be ascertained to unearth the motive behind sending this letter to BRPL. Merely because words "already opened in your favour" on this disputed letter Mark P-8/DA3 is in the handwriting of A-4, from this no presumption can be drawn that he is author of this letter and he was working under conspiracy and this letter was sent to BRPL with the motive to cheat it by favouring A-5. A-4 is also facing charges u/s 468 & 471 IPC. Prosecution having failed to prove that BRPL was cheated in any manner, the charges u/s 468 & 471 IPC also fail.
12.5. As discussed in above paras these three fake LCs appears to have been submitted with State Bank of Hyderabad, Kasturba Gandhi Branch, New Delhi, which is the bank of BRPL vide letters Ex. PW-5/1, Ex. PW-5/5 & Ex. PW-5/11 for negotiations. Were these submitted with the bank on behalf of BRPL, the reply to this question has come during cross examination of IO (PW-8). IO (PW-8) has admitted during his cross examination by A-1 that these three LCs were never presented to State Bank of Hyderabad for encashment being fake LCs. The question to be pondered here is if A-2 had prepared these letters Ex. PW-5/1, Ex. PW-5/5 & Ex. PW-5/11 to submit these three fake LCs for negotiations with its bank then why same were not sent to the bank. If to cover up the alleged undue favours given to A-5, these documents were prepared and CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 43 of 46 kept on record. These three letters appears to be original and not office copies which are in routine transaction of business are kept in the office file as there is no such endorsement on it and it bears the signatures of A-2. During his statement recorded u/s 313 Cr.P.C., A-2 has admitted his signatures on these documents i.e. Ex. PW-5/1 to Ex. PW-5/16 stating that these were invoices and document prepared by Account Assistant namely Sh. Rakesh Chauhan in anticipation of receipt of original LCs. There were to be sent to the bank after the receipt of original LCs. No accounting entries were made at this stage. He has further mentioned that these documents have not been exhibited.
12.6. The plea raised by A-2 that these documents are office copies is not tenable as the said originals were not recovered. If same would had been sent to the bank of BRPL, there must have been some record regarding that but no such evidence has come on record. Even IO has admitted that these LCs were not presented for encashment with the bank.
12.7. The other important aspect on which prosecution has failed to lead any evidence is that what is the procedure of raising the LCs and submitting the LCs against purchase / requisition form. PW-6 who was Assistant Account Officer with A-5 at the relevant time has submitted that three copies of LCs used to be prepared by the bank, two copies used to be sent to the party concerned in favour of whom letter of credit was got issued and the non negotiable copy used to be retained by him in the office. But prosecution was CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 44 of 46 required to elicit the procedure regarding submissions of LCs by customers of BRPL from the mouth of PW-5 who was Sr. Accounts Officer/ Chief Finance Manager with BRPL/ IOC.
12.8. Prosecution has failed to prove that A-1 & A-2 being senior officials of BRPL flouted any guidelines of the Pricing Committee of the Management of BRPL by permitting unsecured credit of Rs. 67 lacs to A-5. It stands established on record that account of A-5 with BRPL was running account under which sometimes huge outstanding balance used to be there against A-5. It also stands established that as per Mark P-5/DA unsecured credit was permitted to the customers during the relevant period. Prosecution is held to have failed to prove any circumstantial evidence against the accused persons from which it could be inferred that they have acted under criminal conspiracy.
12.9. Ld. Counsel for A-1 has raised the contention that prosecution has failed to establish that BRPL was a government company in view of section 617 of Companies Act and section 2(c)(iii) of P.C. Act. Prosecution having failed to prove its case beyond reasonable doubt against any of the accused persons, due to this reason this contention raised on behalf of A-1 is not being discussed. Similarly, it was contended on behalf of A-2 that sanctioning authority i.e. PW-10 has not supported the prosecution in any manner CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 45 of 46 and sanction should be held to be invalid. Again prosecution having failed to prove its case against the accused persons, this contention is also not discussed.
12.10. In view of the aforesaid reasons, it is held that prosecution has failed to prove its case beyond reasonable doubt against the accused persons. Therefore, all the accused persons are acquitted from the offences punishable u/s 120 IPC and 420/468/471 IPC R/w 120B IPC. A-1 & A-2 are acquitted from the offence punishable u/s 13(1)(d) R/w 13(2) of P.C. Act. A-4 is acquitted from the substantive offence punishable u/s 468 & 471 IPC.
12.11. All the accused persons are directed to submit PB with same surety amount for sum of Rs. 20,000/- u/s 437A Cr.P.C.
12.12. File be consigned to Record Room.
Announced in the open court on 24th September, 2016 (SANJAY GARG-I) SPECIAL JUDGE-IV, CBI (PC ACT) TIS HAZARI COURTS, DELHI CC No. 532265/16 CBI Vs. R.K. Viz etc. Page 46 of 46