Rc No.Bd1/2008/E/0005/Cbi/Bs&Fc/New ... vs Mukesh Jain & Ors on 6 July, 2018

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Delhi District Court

Rc No.Bd1/2008/E/0005/Cbi/Bs&Fc/New ... vs Mukesh Jain & Ors on 6 July, 2018

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        IN THE COURT OF SH. SANJIV JAIN: SPECIAL JUDGE 
         (PC ACT), CBI03, SOUTH DISTRICT, SAKET COURT, 
                             NEW DELHI

                                                                 
CNR No. DLST010001562009
CC No. 42/12 (25/2016)
RC No.  BD1/2008/E/0005/CBI/BS&FC/New Delhi
U/s 120 B r/w Section 419,420, 468, 471, 474 IPC &
substantive offences U/Sec. 419, 420, 468, 471, 474 IPC
and Section 13(2) r/w Section 13(1)(d) of P.C. Act,1988
and substantive offences U/S 13(2) r/w 13(1)(d) of PC 
Act, 1988


Central Bureau of Investigation 


           Versus 


A1  Mukesh Jain
     S/o Late Sh. Kulwant Rai Jain
     C4/145, Safdarjung Development Area,
     New Delhi - 110 016.                                                                            Accused No. 1

A2  Anil Dhall 
     S/o late Sh. Chunni Lal 
     R/o Flat No. 3/1, Lantana Street,
     Vatika City, Sector49,
     Gurgaon, HaryanA122 002.                                                                        Accused No. 2

A3  M/s Duro Marketing Pvt. Ltd.
     Through Mukesh Jain (A1)
     2646, Ballimaran,
     Delhi 110 006.                                                                                  Accused No. 3


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RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
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A4        Vinod Khanna
           S/o Late Sh. Harbans Lal Khanna,
           R/o 26/152, West Patel Nagar,
           New Delhi - 110 008.                                  Accused No. 4
           (Proceedings abated in terms of order dated 08.08.2017)

A5        Mahesh Chand Aggarwal
           S/o Sh. C.R. Aggarwal
           Branch Manager,
           Union Bank of India,
           Sadar Bazar Branch, Delhi
           R/o F1U/15, Pitampura, 
           Delhi 110 088.                                                                            Accused No. 5

A6        Ishwar Singh Mehra
           S/o late Sh. R.R. Mehra
           R/o A1/148, First Floor,
           Janakpuri, 
           New Delhi 110 058.                                                                        Accused No. 6

A7        V.S. Pillai
           S/o late Sh. B. Narayanan
           R/o R82/5, Ramesh Park,
           Laxmi Nagar,
           Delhi - 110 092.                                                                          Accused No. 7

A8        Ashok Bharti
           S/o late Sh. Matadin
           R/o. 2051, Ballimaran, 
           Delhi - 110 006.                                                                          Accused No. 8

A9        Rakesh Khurana
           S/o late Sh. Kimti Lal Khurana
           R/o C12, Parwana Road,
           Old Govindpura, 
           Krishna Nagar, Delhi.                                 Accused No. 9
           (Proceedings abated in terms of order dated18.01.2012)



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RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
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Date of FIR                                                :          27.08.2008
Date of filing of Chargesheet                             :          31.07.2009
Arguments completed on                                     :          05.06.2018
Date of judgment                                           :          06.07.2018


JUDGMENT

1. The quest in all criminal trials is to arrive at the truth and therefore, the role of the Judge is to cull out the true facts from the evidence led before him and ensure that guilty does not go Scot free and Innocent's life and liberty is not jeopardized. This role of the Judge has been explained in the case of Zahira Habibulla H. Sheikh & Anr. Vs. State of Gujarat & Ors. AIR 2004 SC 345 thus:

"A criminal trial is a judicial examination of the issues in the cases and its purpose is to arrive at judgment on an issue as a fact or relevant facts which may lead to the discovery of the fact in issue and obtain proof of such facts at which the prosecution and the accused have arrived by their pleadings, the controlling question being the guilt or innocence of the accused. Since the object is to meet out justice and to convict the guilty and protect the innocent, the trial should be a search for the truth and not a bout over technicalities, and must be conducted under such rules as will protect the innocent, and punish the guilty. The proof of charge which has to be beyond reasonable doubt must depend upon judicial evaluation of the totality of the evidence, oral and circumstantial and not be an isolated scrutiny."

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RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
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2. The present case was registered vide RC No. BD1/2008/E/0005 on the complaint of Shri S R Kaushik, Chief Manager, Union Bank of India, Sadar Bazar branch, New Delhi.

3. Briefly the facts are that Mukesh Jain (A1) and Anil Dhull (A2) were the promoter Directors of M/s Duro Marketing Pvt. Ltd (A3) which was incorporated on 06.01.2006. A3 approached State Bank of India, Hauz Qazi branch for sanction of credit facilities and the same were sanctioned by the Zonal Office of the Bank on 31.01.2006. The credit facilities were secured on equitable mortgage of the property bearing No. A52, Vasant Vihar, New Delhi which was in the name of R G Mundkur who was shown as one of the directors of the company, though as per the ROC record, he was not the director of A3. Ishwar Singh Mehra (A6) was the Branch Manager of the bank at the time of sanction of credit limits to A3. In October, 2006, he was transferred to Model Town branch of State Bank of India. The account of A3 became irregular. The company A3 did not regularize the account. Consequently, it became as Non Performing Asset (NPA) in December, 2006.

4. Mukesh Jain (A1) vide his letter No. DMPL/UBI/ LIMITS/2006/63 dated 11.12.2006 approached Union Bank of India, Sadar Bazar branch, Delhi for sanction of cash credit limit of Rs.4.0 crores and letter of credit limit of Rs.1.0 crore by taking over the account (Account of A3) maintained with State Bank of India, Hauz Qazi Branch. He offered the property bearing No. A 52, Vasant Vihar, New Delhi as collateral security against the CC No. 42/12 (25/16) 06.07.2018 4 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

credit facilities which A3 had already mortgaged with State Bank of India, Hauz Qazi branch as a collateral security against the credit facilities availed by A3 from the bank. A1 misrepresented the facts and did not disclose to Union Bank of India that the account of A3 had already been declared as NPA by State Bank of India. He made a false representation that State Bank of India is not ready to enhance the credit facilities required for the business activities of A3. A2 vide letter No. DMPL/UBI/LIMITS/ 2006/63 dated 27.12.2006 submitted the documents required for processing the request of A3 with Union Bank of India which included the copy of the Lease Deed of the property offered as collateral security. In that letter, he did not mention that the account has become NPA.

5. Mahesh Chand Aggarwal (A5), Branch Manager of Union Bank of India, Sadar Bazar Branch, processed the request and vide his proposal dated 15.01.2007, he recommended for taking over the account of A3 and sanctioning of the above credit facilities to A3 stating that the account of A3 with State Bank of India was satisfactory and that he had also visited the property bearing No. A52, Vasant Vihar, New Delhi proposed to be mortgaged as collateral security. Investigation revealed that he did not verify the genuineness and antecedents of the account of A3 from State Bank of India, Hauz Qazi Branch which was already NPA. As per the loan policy issued by the central office of Union Bank of India vide circular No. 7349 dated 01.04.2006, only the accounts which are classified as standard assets were eligible for take over. A5 CC No. 42/12 (25/16) 06.07.2018 5 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

abused his official position as public servant and recommended for taking over the account in violation of the laid down guidelines. Investigation revealed that Regional Office had sought clarifications on the proposal of A3 from the Branch Office. A5 vide his letter No. MA/SB/2007/860 dated 09.02.2007 informed the regional office that R G Mundkur is an aged man and he does not intend to do much running around and that he being a distant relative of Mukesh Jain (A1), has joined the company as an advisor on administrative matters concerning the government departments. A5 also quoted the reasons for taking over the account stating that there was no loan officer in State Bank of India, Hauz Qazi branch to prepare the proposal and forward the same to the higher authorities. A5 also mentioned that CC and LC limits sanctioned to the company were merged by the Branch of State Bank of India, though the said limits were never merged as the same were sanctioned by the Zonal Office of the State Bank of India and the Branch Office was not empowered to modify any of the terms of the sanction.

6. Investigation revealed that A5 wrote a letter No. ADV:2007 dated 25.01.2007 to State Bank of India, Hauz Qazi branch seeking opinion about the conduct of account of A3. In response to the said letter, a letter No. BM/2006/07/201 dated 25.02.2007 was received from the Branch Manager, State Bank of India Hauz Qazi branch, inter alia as under :

"with reference to your letter no. ADV:2007 dated 25.1.2007 we advice that the captioned company is enjoying fund based / non fund based working capital limit of Rs.2.00 (Rs.Two CC No. 42/12 (25/16) 06.07.2018 6 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Crores only) and the conduct of the account is satisfactory. The account is classified as Standard Asset at our Branch."

7. Investigation revealed that Ishwar Singh Mehra (A6) posing himself as Branch Manager of State Bank of India, Hauz Qazi branch issued the above letter whereas infact he was posted at Model Town Branch of State Bank of India. The account of A3 had already become NPA in December, 2006 and it was never adjusted by A3. Investigation revealed that A5 made the said letter as basis for ascertaining the genuineness of the account of the company at the subsequent stage. Investigation revealed that the copy of the letter dated 25.02.2007 written by A6 was never the part of the record of State Bank of India, Hauz Qazi Branch. Similarly, the original letter dated 25.01.2007 written by A5 seeking opinion about the account of A3 was never the part of the record of State Bank of India, Hauz Qazi Branch. Investigation revealed that A5 and A6 were party to the criminal conspiracy along with the directors of A3 and in pursuant thereto, they got the NPA account taken over by Union Bank of India, Sadar Bazar branch abusing their official positions as such public servants.

8. Investigation further revealed that A3 was sanctioned Cash Credit Limit (CC Limit) of Rs.4.0 crores and Letter of Credit limit (LC Limit) of Rs.1.0 crore by the regional office of Union Bank of India. The terms and conditions as mentioned in the sanction were accepted by A1, A2 and R G Mundkur, directors of the company (A3). They opened a current account of A3 with Union Bank of India, Sadar Bazar branch and executed various security CC No. 42/12 (25/16) 06.07.2018 7 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

documents.

9. Investigation revealed that Vinod Khanna (A4) had impersonated himself as R G Mundkur and executed the documents in Union Bank of India, Sadar Bazar Branch along with A1 and A2. They affixed their photographs on the account opening form of A3 maintained with Union Bank of India, Sadar Bazar Branch. A4 also submitted the copies of forged PAN card and Voter I Card purportedly in the name of R G Mundkur. A4 also wrote a letter to State Bank of India, Hauz Qazi branch for release of the title documents in respect of the property No. A52, Vasant Vihar, New Delhi posing as R G Mundkur before the bank official of Union Bank of India, Sadar Bazar Branch who identified A4 being the same person who had appeared as R G Mundkur in the branch and executed the documents. Investigation revealed that A5 knowingly did not ensure the true identify of the impersonator Vinod Khanna (A4).

10. Investigation further revealed that A5 made a field visit to the property A52, Vasant Vihar and gave his site visit report falsely showing the property as self occupied by R G Mundkur whereas during investigation it was found that the aforesaid property was lying vacant and no person by the name of R G Mundkur was residing therein during the relevant period.

11. Investigation further revealed that A3 was sanctioned credit facilities to the tune of Rs.2.0 crores by State Bank of India, Hauz Qazi branch but A5 made the payment of Rs.2.25 crores to the branch at the time of taking over the account of A3 and thus CC No. 42/12 (25/16) 06.07.2018 8 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

allowed excess payment of Rs.25.0 lacs over and above the sanctioned limit of Rs.2.0 crores. A5 deliberately did not obtain the Statement of Account of A3 for the last one year as stipulated in the terms of sanction and kept on record the statement of account upto 30.11.2006 as submitted by A3 by which date the account had not become NPA.

12. Investigation further revealed that the State Bank of India handed over the original perpetual sublease deed of the aforesaid property to Union Bank of India which was mortgaged as collateral security. Permission to mortgage dated 16.04.2007 purportedly issued by DDA to R G Mundkur was also submitted. On investigation, the perpetual sublease deed and permission were found to be the forged documents. Investigation revealed that A5 had obtained the legal opinion from the Advocate of the bank on the basis of photocopy of perpetual sublease deed in violation of the guidelines of the bank issued vide circular No. 003/07 dated 17.02.2007.

13. Investigation further revealed that as per the terms of the sanction, A3 was to pledge FDR of Rs.51.0 lacs as additional collateral security but A5 allowed the initial disbursal of funds to A3 without creation of the aforesaid FDR. As per the terms, A3 had to create this FDR from its own resources but it generated the FDR from the disbursal of the funds in April, 2007. A5 also allowed the remaining i.e. Rs.1.0 lakh to be met from the funds of CC Limit by excess overdrawing in violation of the terms of sanction. A5 also allowed excess overdrawing in the account of CC No. 42/12 (25/16) 06.07.2018 9 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

A3 on several occasions by exceeding his delegated powers without the approval of the competent authority.

14. Investigation revealed that as per the terms of the sanction, A5 was to ensure the end use of the funds as the inter firms transfers were prohibited but he did not do so and allowed inter firms transfers. A5 honoured cheques/demand drafts favoring M/s JainCo to the tune of Rs.48,47,750/ knowing well that the firm had ceased to exist after the incorporation of M/s Duro Marketing Pvt Ltd (A3). A5 allowed cheques/ demand drafts favoring M/s Supreme Traders to the tune of Rs.1,94,53,215/. Both the firms belonged to Mukesh Jain (A1). A5 also allowed unauthorized credits in the account of M/s Duro Marketing Pvt Ltd (A3) against uncleared cheques deposited by the company at the end of the month which subsequently returned as unpaid at the starting of the following month.

15. Investigation further revealed that Mukesh Jain (A1) did not utilize the funds of the CC Limit for genuine trade transactions rather diverted the amount through various dummy accounts and sham business transactions. Although A1 had floated M/s Duro Marketing Pvt Ltd ( A3) by taking over the entire business of M/s JainCo in January, 2006 but he did not close the bank account of M/s JainCo and utilized it for diverting the funds. A1 fraudulently opened an account of the paper concern M/s Supreme Traders on his own introduction and used it for diverting the funds. He also used other accounts i.e. M/s Kwality Enterprises of V S Pillai (A7), M/s Shiv Shakti Udyog and M/s Sharma Enterprises of CC No. 42/12 (25/16) 06.07.2018 10 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Ashok Bharti (A8) and M/s Kwality Enterprises, Okhla of Rakesh Khurana (A9) for diverting the proceeds of the credit facility without any genuine trade transactions. The accounts of the above firms were opened on the introduction of Mukesh Jain (A1) though firms did not carry out any genuine trade transactions with M/s Duro Marketing Pvt Ltd (A3) but existed on papers. A1 issued various cheques amounting to Rs.4,42,66,748/ from the account of M/s Duro Marketing Pvt Ltd favouring M/s Kwality Enterprises (A7) and thereafter V S Pillai (A7) diverted back the aforesaid amount in connivance with A1 as per details below:

 Rs.4,00,06,350/ to the account of M/s JainCo.  Rs.21,85,000/ to the account of M/s Supreme Traders  Rs.6,44,000/ to the personal savings bank account of Mukesh Jain.

 Rs.40,000/ to the personal savings bank account of Vinod Khanna.

For doing this favour, A7 received Rs.8,00,000/ as consideration which he transferred in the account of his another concern M/s Mohan Das & Co.

16. Investigation further revealed that A1 diverted Rs.25,22,000/ to his personal savings bank account, withdrew Rs.63,34,000/ in cash, Rs.11,00,000/ to the account of M/s Sharma Enterprises and Rs.2,26,000/ to the account of M/s Shiv Shakti Udyog. He also issued cheque of Rs.25,000/ to Vinod Khanna (A4) which was credited in the personal account of Vinod Khanna (A4). Investigation further revealed that A1 diverted Rs.1,78,54,500/ from the account of M/s JainCo, Rs.40,75,000/ from the account CC No. 42/12 (25/16) 06.07.2018 11 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

of M/s Kwality Enterprises and Rs.11,00,000/ from the account of M/s Supreme Traders. Ashok Bharti (A8) in connivance with Mukesh Jain (A1) diverted back Rs.2,10,92,112/ to the account of M/s Duro Marketing Pvt Ltd, Rs.6,00,000/ to the account of M/s JainCo and A8 withdrew Rs.1,85,000/ as consideration for the said favour to A1. Similarly, A1 diverted Rs.82,18,400/ to the account of M/s Shiv Shakti Udyog from the account of M/s JainCo and Rs.2,26,000/ from the account of M/s Supreme Traders. A8 diverted Rs.83,59,836/ to the account of M/s Duro Marketing Pvt Ltd and withdrew Rs.20,000/ as consideration for showing favour to A1. A1 also diverted Rs.1,20,35,277/ from the account of M/s Duro Marketing Pvt Ltd to the account of M/s Kwality Enterprises (A/c No. 5523) opened by Rakesh Khurana (A9) with Oriental Bank of Commerce (OBC), Darya Ganj branch, Delhi which amount was diverted to the accounts of M/s JainCo and M/s Sharma Enterprises by A9 without any trade transactions. A1 also withdrew Rs.1,63,77,000/ in cash from the account of M/s JainCo which ceased to exist after the incorporation of M/s Duro Marketing Pvt Ltd and Rs.63,34,000/ in cash from the account of M/s Supreme Traders. He also diverted Rs.10,80,000/ from the account of M/s JainCo and Rs.25,22,000/ from the account of M/s Supreme Traders to his personal savings account maintained with Oriental Bank of Commerce, Darya Ganj Branch, New Delhi.

17. Investigation further revealed that M/s Supreme Traders, M/s Kwality Enterprises, M/s Shiv Shakti Udyog and M/s Sharma CC No. 42/12 (25/16) 06.07.2018 12 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Enterprises were not registered with Trade and Taxes department but existed on papers and their accounts were opened with a view to facilitate diversion of funds of Union Bank of India, Sadar Bazar branch, Delhi. A1 also opened other accounts of M/s Duro Marketing Pvt Ltd with Oriental Bank of Commerce, Chawri Bazar Branch and Andhra Bank, R. K. Puram Branch in a fraudulent manner in violation of the terms of the sanction whereby banking with the other banks was prohibited. The account opening form of Oriental Bank of Commerce, Chowri Bazar had the name of Anil Dhall (A2) whereas the photograph was of another person. Similarly, the account opening form of Andhra Bank had the name of R G Mundkur whereas the photograph was of Vinod Khanna (A4).

18. Investigation further revealed that Anil Dhall (A2) was the promoter director of M/s Duro Marketing Pvt Ltd. He resigned on 30.03.2007. Initially, there were two directors i.e. Mukesh Jain (A1) and Anil Dhall (A2). Vinod Khanna (A4) who impersonated as R G Mundkur was later shown inducted as director by the above accused persons before the bank officials though ROC record was silent on this issue. A2 executed all the documents with State Bank of India, Hauz Qazi Branch and Union Bank of India, Sadar Bazar Branch along with coaccused persons i.e. with A1 and A4. He was also the part of criminal conspiracy to cheat Union Bank of India as he knew that the account of the company with State Bank of India Hauz Qazi Branch had turned NPA, yet he along with A1 approached Union Bank of India for taking over CC No. 42/12 (25/16) 06.07.2018 13 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

the account by suppressing the vital information. From the house of A2, another forged perpetual sublease deed of collateral security i.e A52 Vasant Vihar New Delhi in the name of R G Mundkur was recovered.

19. All these facts disclosed the commission of the offences by Mukesh Jain (A1), Anil Dhall (A2), M/s Duro Marketing Pvt. Ltd (A3), Vinod Khanna (A4), Mahesh Chand Aggarwal (A5), Ishwar Singh Mehra (A6), V S Pillai (A7), Ashok Bharti (A8) and Rakesh Kumar (A9) under section 120B r.w. Sections 419,420,468,471,474 IPC and 13(2) r.w 13(1)(d) of Prevention of Corruption Act, 1988 and substantive offences.

20. The Authority, competent to remove the public servants viz Mahesh Chand Aggarwal (A5) and Ishwar Singh Mehra (A6) granted the sanction for their prosecution u/s 19(1) of the Prevention of Corruption Act. No incriminating evidence was found against R G Mundkur during investigation and his name was kept in Column No. 12 of the chargesheet.

CHARGE

21. Ld Predecessor of this court vide detailed order dated 17.08.2010 reached the conclusion that a prima facie case is made out against all the accused persons. Accordingly, on 17.08.2010, accused Mukesh Jain(A1), Anil Dhall (A2) and Vinod Khanna (A4) were charged with the offences punishable u/s 120B r.w. 420 and 471 IPC and u/s 420 and 471 r.w. Section 120B IPC. M/s Duro CC No. 42/12 (25/16) 06.07.2018 14 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Marketing Pvt Ltd (A3) was charged with the offence punishable u/s 420 IPC. Accused Ishwar Singh Mehra(A6) was charged with the offences punishable u/s 420, 468, 471 IPC r.w 13 (2) r.w. 13(1)(d) of the Prevention of Corruption Act,1988. Accused Mahesh Chand Aggarwal(A5) was charged with the offence punishable u/s 13 (2) r.w. 13(1)(d) of the Prevention of Corruption Act, 1988. Accused Vinod Khanna(A4) was charged with the offences punishable u/s 419, 420, 468 and 474 IPC. Accused persons Mukesh Jain(A1), Anil Dhall(A2), M/s Duro Marketing Pvt. Ltd (A3), Vinod Khanna(A4), Mahesh Chand Aggarwal (A5), Ishwar Singh Mehra(A6), V.S. Pillai (A7), Ashok Bharti (A8) and Rakesh Khurana(A9) were also charged with the offences punishable u/s 120B r/w Section 419, 420, 468, 471, 474 IPC r/w Section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988. All the accused persons pleaded not guilty and claimed trial.

22. During the course of proceedings, accused Vinod Khanna and Rakesh Khurana expired and the proceedings against them were abated vide orders dated 18.08.2017 and 18.01.2012.

EVIDENCE

23. To substantiate its case against the accused persons, prosecution examined as many as 66 witnesses. The gist of statement of witnesses is as under:

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Witnesses from State Bank of India :

PW1 L.K. Jain was the Manager, HR RegionIV, State Bank of India, Delhi in the year 2005. He handed over the original posting /transfer order of I S Mehra, Ex. PW 1/B to the IO vide memo Ex. PW 1/A. He stated that as per the order, I S Mehra was transferred from the post of Branch Manager, Hauz Qazi Branch to the post of Customer Relation Officer, Model Town branch, Delhi. He stated that I S Mehra remained posted in Hauz Qazi branch from December 2002 to October, 2006 and after issuance of transfer order of I S Mehra, A K Fotedar joined as Branch Manager, Hauz Qazi branch.

He stated that after communication of transfer order, the officer under transfer hands over the charge to the incoming officer who issues a letter to the outgoing branch manager with reference to the transfer order relieving him from the post of Branch Manager. The information in this regard is sent to the Zonal Office in writing. He stated that he has not seen the relieving order in the record. PW2 Keshav Dutt Sharma was posted as Deputy Manager at Hauz Qazi Branch State Bank of India in the year 2005. He stated that he was looking after the day to day work of clearing, accounts, advances and other related matters assigned by the Branch Manager. He stated that M/s Duro Marketing Pvt. Ltd (A3) had submitted a request proposal for the sanction of Cash Credit Limit of Rs.2.0 crores vide CC No. 42/12 (25/16) 06.07.2018 16 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

dated 09.01.2006 Ex. PW 2/A in the Hauz Qazi branch. Mukesh Jain, A K Dhall and one Mr. Mundkur were the directors of the company. Mukesh Jain and Anil Dhall used to visit the Branch Manager I S Mehra. He stated that with the application, copy of resolution passed in the meeting of the Board of Directors held on 06.01.2006 Ex. PW 2/A12 and on 09.01.2006 Ex. PW 2/A13 besides other documents were submitted. He stated that I S Mehra called and asked him to forward the proposal to the Zonal Credit Processing Cell (ZCPC). He went through the proposal in cursory manner and signed Ex. PW 2/B in the cabin of I S Mehra. The proposal was sent with the documents to the Zonal Credit Processing Center. He stated that the application for mortgage Ex. PW 2/C was also sent along with the proposal application which had the photograph of Mukesh Jain at Point A, A K Dhall at Point B and Mundkur at Point C. He stated that assets and liability statement of Mukesh Jain Ex. PW 2/C2, A K Dhall Ex. PW 2/C3 and Mundkur Ex. PW 2/C4 were also sent to the Zonal Office along with the opinion of I S Mehra Ex. PW 2/C1. He stated that the sanction of CC Limit was communicated to his branch vide letter dated 01.02.2006 Ex. PW 2/D. The documents were executed by Mukesh Jain, A K Dhall and Mundkur at the time of disbursement of loan i.e agreement of loan cum hypothecation Ex. PW 2/F1 (D379 Page 216), guarantee agreement Ex. PW 2/G (D379 Page 1720) and CC No. 42/12 (25/16) 06.07.2018 17 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Memorandum of recording of creation of mortgage by deposit of title deed Ex. PW 2/H. He stated that letter of confirmation of extension of mortgage by deposit of title deed was signed by R Mundkur on Ex. PW 2/G. He also proved the DDA file (D134) containing the original letter Ex. PW 2/M. He stated that the account of Ms/ Duro Marketing Pvt Ltd was running overdrawn and it was taken over by Union Bank of India. He stated that vide letter dated 30.03.2007 Ex. PW 2/P, he had written a letter to Chief Manager, Union Bank of India, Sadar Bazar mentioning the details of liabilities and made endorsement on the office copy of the letter signed by Union Bank of India to State Bank of India Hauz Qazi dated 30.03.2007 regarding receipt of Banker Cheque No. 038283 dated 30.03.2007 for Rs.2.25 crores in favour of State Bank of India Duro Marketing Pvt Ltd Ex. PW 2/Q. He stated that subsequent to the realization of the bankers cheque, he handed over the original perpetual sub lease deed of the collateral security of the property at Vasant Vihar to Union Bank of India, Sadar Bazar branch vide letter dated 04.04.2007 Ex. PW 2/R (D118 Page 325). He also proved the copy of perpetual sublease deed Ex. PW 2/R1 (D118 Page 315324).

He stated that I S Mehra had written a letter Ex. PW 2/F (D37) dated 25.02.2007 mentioning that the account of Duro Marketing Pvt Ltd is satisfactory though the account CC No. 42/12 (25/16) 06.07.2018 18 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

was unsatisfactory throughout and it had already become Non Performing Assets (NPA). He stated that on 25.02.2007, I S Mehra was not working in Hauz Qazi Branch and A K Fotedar was the branch manager.

On being crossexamined, he stated that the Branch Manager was on leave when the field officer from Union Bank of India, Sadar Bazar Branch had visited the Branch and enquired about the total outstanding in the account of M/s Duro Marketing Pvt Ltd and that after consulting the Branch Manager, he had signed the letter. He stated that the bank has received the money and closed the account.

He stated that no query was received from ZCPC in respect of Duro Marketing Pvt Ltd. He stated that he had orally pointed out to I S Mehra from time to time that the amount was overdrawn but did not give anything in writing to him or the higher authority. He admitted that the Branch Managers are sometimes sent to the other branches to look after the work on the oral instructions of Zonal Office. The movement of the officers in the branch is recorded in the absentee register. He stated that account is declared as NPA if the interest is not cleared in 90 days, the account is not in operation or it is overdrawn. He stated that Mr Fotedar had joined as Branch Manager, Hauz Qazi branch in October, 2006. He stated that he cannot admit or deny that the handing over of charge had not taken place till 27.02.2007 or I S Mehra was orally directed to look after the Model Town CC No. 42/12 (25/16) 06.07.2018 19 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

branch from 16.10.2006 to 19.05.2007 or he was directed by the AGM to work in Hauz Qazi branch from 05.02.2007 to 09.02.2007 and from 12.02.2007 to 27.02.2007 or it was Sunday on 25.02.2007 and the branch was open because the inspection was going on. He denied that on 25.02.2007, I S Mehra was still the Manager and he had signed the letter dated 25.02.2007 in the normal course of his duties. He stated that he had only informed the balance in the account of M/s Duro Marketing Pvt Ltd to Union Bank of India. He admitted that in the letter dated 30.03.2007 Ex. PW 2/P, he did not mention that the account is irregular or has become NPA. He volunteered that the official of Union Bank of India had raised no query as to whether the account was overdrawn or NPA. He denied that with a view to defraud Union Bank of India, he wrote the letter Ex. PW 2/P as his bank was mainly concerned with the recovery of the outstanding.

PW3 Bishnu Dutt Joshi was the Senior Assistant in State Bank of India Hauz Qazi branch from 2004 to March, 2010. He stated that on 25.02.2007, I S Mehra Branch Manager had written the letter Ex. PW 2/S to the Chief Manager, Union Bank of India, Sadar Bazar branch although he was not posted and functioning as Branch Manager on 25.02.2007 at Hauz Qazi Branch, State Bank of India. PW4 Ashok Kumar Foteda r stated that on 13.10.2006, he took over the charge as Branch Manager, Hauz Qazi Branch, CC No. 42/12 (25/16) 06.07.2018 20 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

from I S Mehra since he was transferred to Model Town branch. He stated that when he took over the charge, he came to know that there was CC account of A3 and Mukesh Jain director of A3 was mainly operating the account although there were two other directors also. He stated that as per the record of the branch, (Page 370,371 Mark A) brief history of NPA accounts having outstanding more than Rs.25 lacs was sent to the Zonal Office, which also finds mention of Duro Marketing Pvt Ltd at Point A. He proved the statement Ex. PW 4/A. He stated that from the day he took over charge as Branch Manager, Hauz Qazi Branch, there was only one Branch Manager. He stated that letter Ex. PW 2/S dated 25.02.2007 is on the letter head of State Bank of India, Hauz Qazi branch which was signed by I S Mehra as Branch Manager, State Bank of India, Hauz Qazi branch though on that day, he (PW4) was the branch Manager and I S Mehra had no connection with that branch since he was already transferred to Model Town in October, 2006.

On being crossexamined, he stated that the account of A3 was lying NPA before he took over as Branch Manager. He stated that at that time, the bank accounts were being maintained with the help of computers (software CBS). He stated that at the time of taking over charge as Branch Manager, no specific document is prepared to be signed by the incumbent and an outgoing Manager for forwarding it to the higher authority. A relieving order is issued to the CC No. 42/12 (25/16) 06.07.2018 21 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

outgoing Branch Manager by the new Branch Manager who takes over the charge. The copy of the relieving letter is maintained in the branch and one copy of it is sent to the office of AGM. The original of the relieving letter is given to the outgoing Manager. He stated that he does not remember if relieving letter was issued to I S Mehra. He then volunteered, had relieving letter been prepared, the copy of the same would have been available in the branch and another in the AGM office. He stated that within a week of his taking over as Branch Manager, he had checked the account and come to know that the account of A3 was NPA. He stated that the software declares the account NPA automatically and it cannot be declared NPA manually. He stated that as soon as the account is declared NPA by the system, further withdrawals from the account are stopped. The interest is not debited but the entries are reversed because no income can be booked on the NPA account. The rate of interest will not change but no interest is chargeable because the same cannot be recovered. The limit is not renewed in the NPA account. He stated that if any document is sent to the Head Office or the Zonal Office or to any authority, entry is made in the dispatch register. He stated that as per Ex.PW4/A, the account of A3 was declared as NPA on 01.12.2006. He was confronted with the attested copy of statement of account of A3 mark DX to which he stated that on 26.02.2007, CC Limit of A3 was approved for CC No. 42/12 (25/16) 06.07.2018 22 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Rs.1.0 crore. He then volunteered that it was only for the purpose of account and withdrawal of the amount from the said CC limit was not permissible. He stated that such approval of CC limit in NPA account was only for technical purpose for computer operation and accounting. In case of NPA account, the computer system starts showing 000 amount whereas it should show the original limit granted to the party for the purpose of statement and accounting and therefore approval of CC Limit was granted to show the original CC limit of Rs. 1.0 crore in this case. He however admitted that as per document Mark X, interest has been debited on 28.02.2007.

On being shown the documents, he admitted that he had passed the bills on 25.02.2007 indicating that on 25.02.2007, the branch of the bank was functional and he was on duty. He however denied that on 25.02.2007, I S Mehra had come in the branch. He stated that he does not know if I S Mehra was sent to Hauz Qazi branch from 05.02.2007 to 09.02.2007 and from 12.02.2007 to 27.02.2007. He however admitted that on the oral instructions of senior officers, the officials are deputed to look after the work of another branch on temporary basis. He denied that I S Mehra was not relieved from the Hauz Qazi branch on 12th or 13th October, 2006 or till 31.03.2007 and for that reason, no such letter/document of his relieving is available in the record. He denied that I S Mehra was sent to CC No. 42/12 (25/16) 06.07.2018 23 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

look after the work of Model Town branch from the Hauz Qazi branch on oral instructions. He denied that on 25.02.2007, I S Mehra was working as Branch Manager in Hauz Qazi branch and he was never relieved from the branch or that he had issued the letter Ex. PW 2/S correctly while posted as Branch Manager, Hauz Qazi Branch.

He admitted that during his tenure, he never informed Union Bank of India that the account of A3 was NPA in his branch. He then volunteered that no such enquiry was made by Union Bank of India in his tenure. He stated that Mahesh Chand Aggarwal, the then Branch Manager of Union Bank of India, Sadar Bazar branch had personally met him in his official capacity in his office during his tenure at Hauz Qazi branch but he denied that he intentionally did not provide the information pertaining to the CC limit account of A3. He stated that when Mahesh Chand Aggarwal came in his office, he was resolving a dispute between a customer and the bank staff. He denied that Mahesh Chand Aggarwal had discussed with him the status of CC Limit and he did not provide him the correct information about the status of NPA. He stated that in public sector banks, there is a normal procedure that if a party applies for loan, banks ask for the statement of accounts for atleast one year from which it can be analysed about the conduct and business of the party as the statement reflects all the credits and debits including the debit entries of interest, charges etc. CC No. 42/12 (25/16) 06.07.2018 24 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

PW26 A K Narula was the Chief Manager, (Administration), State Bank of India in May, 2009. He handed over the documents to CBI i.e the letters dated 10.03.2006 Ex. PW 26/B (D716), Ex. PW 3/L (D717), Ex. PW 3/M (D718) and Ex. PW 3/N (D719) written by the branch office (Hauz Qazi branch) to the regional office State Bank of India seized vide memo Ex. PW 26/A (D715). CW1 Kalp Nath Saroj produced three sets of computer generated data of Hauz Qazi Branch, State Bank of India, pertaining to the loan accounts Ex.CW1/A colly. CW C.P. Singh was the Branch Manager, State Bank of India, Hauz Qazi branch. He produced the record received from Rajeev Mishra, Chief Manager (IT), State Bank of India/GITC, Sector11, CBD., Bela Pur, Navi Mumbai i.e. extract of account no. 10772013450 of M/s Duro Marketing Pvt. Ltd. from 25.05.2006 to 30.03.2007 Mark PX3 and copy of record of handing/taking over Mark PX2 along with the forwarding letter mark PX1. He stated that the copy of relieving of Ishwar Singh Mehra, the then branch Manager, State Bank of India Hauz Qazi branch is not available in the office file and he cannot say if any relieving letter was issued by the branch or not.

CW Surender Kumar was the Record Keeper in State Bank of India, Hauz Qazi Branch. He on the instructions of Kalp Nath Saroj produced the documents in the Court running into 17 pages marked K bearing the seal of State CC No. 42/12 (25/16) 06.07.2018 25 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Bank of India, Hauz Qazi branch at Point A. He stated that from the documents, he cannot tell on which date, the account in question was declared NPA by the system (Core Banking System CBS).

Witnesses from State Bank of India, Sushant Lok Branch :

PW23 Lokesh Lavania was the Branch Manager in State Bank of India, Sushant Lok branch, Gurgaon from 01.01.2005 to September, 2008. He stated that Anil Dhall and Kishtij Dhall had opened an account in the joint name bearing No. 30014992257 on 12.09.2005 vide account opening form Ex. PW 23/A (D695). They had submitted their identity proof i.e copy of their passports Ex. PW 23/C collectively. He stated that Anil Dhall also had a saving account with the bank. He proved the cheques issued by Anil Dhall Ex. PW 23/D, Ex. PW 23/D1 to Ex PW 23/D5 from that account during the period from 08.04.2006 to 12.03.2008 for small amounts.

PW31 R K Kitro was the Deputy Manager, State Bank of India, Sushant Lok branch, Gurgaon in May, 2009. He deposed on the lines of PW23 and proved his letter Ex. PW 31/A (D694) vide which he had sent the documents to CBI.

Witnesses from Union Bank of India :

PW7 Shish Ram Kaushik was the Chief Manager, Union Bank of India, Sadar Bazar Branch from 28.03.2008 to CC No. 42/12 (25/16) 06.07.2018 26 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

30.05.2008. He stated that there was an account of M/s Duro Marketing Pvt. Ltd (A3) in which outstanding balance was Rs. 4.46 crores. He came to know that a fraud had taken place in that account by mortgaging a fake property and an enquiry was conducted. He filed the FIR by making the complaint Ex.PW7/A under the guidance of the higher officers. He stated that the bank takes over the loan from the other bank after proper and due diligence. He admitted that before sanctioning of loan, panel advocate submits legal opinion in respect of the property to be mortgaged and legal opinion is one of the consideration for sanction of loan and on the basis of such opinion, recommendation is forwarded to the senior officer for sanction of loan or otherwise. He admitted that at the time of lodging of FIR, it was found that the report submitted by the panel lawyer Aditya Mohan in respect of the property was not correct and it was submitted without verifying from the office of subregistrar/DDA/other authorities. He stated that alternative surety was submitted by the party in the bank on 12.04.2008. He stated that the complaint was lodged in the last week of May, 2008. He admitted that the alternate surety in the form of property was submitted mainly due to the efforts of M.C. Aggarwal (A5).

PW20 Vijay Kumar Gupta was posted as Assistant Manager in Union Bank of India, Sadar Bazar branch, New Delhi till 2009. He stated that M.C. Aggarwal was the Chief Manager, J.B Handa was the Manager, B.S Bartwal was the CC No. 42/12 (25/16) 06.07.2018 27 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Accountant, R.K. Bangu was the Assistant Manager and D.N. Sharma was the Manager from 2006 to 2009. He stated that on the requisition of CBI, he handed over documents and record to CBI vide memo Ex.PW20/A (D49, 4 pages). He handed over the cheques/pay orders and monitoring reports as follows:

D50, cheque no.735611 dated 04.04.2007 for Rs.1,47,75,000/ issued in favour of M/S Kwality Enterprises by M/S Duro Marketing Pvt. Ltd. from its C.C account no.307505040132415 Ex.PW20/B1.

D111, cheque no.770358 dated 07.11.2007 for Rs.2,75,928/ issued in favour of yourself by M/S Duro Marketing Pvt. Ltd. from its account no.307505040132415 Ex.PW20/B2.

D469, cheque no.770339 dated 17.10.2007 for Rs.50,000/ issued in favour of Mukesh by M/S Duro Marketing Pvt. Ltd. from its account no.307505040132415 Ex.PW20/B3.

D306, cheque no.770354 dated 03.11.2007 for Rs.4,45,000/ issued in favour of Mukesh by M/S Duro Marketing Pvt. Ltd. from its account no.307505040132415 Ex.PW20/B4.

D297, pay order no.039015 dated 19.7.2007 for Rs.15,00,000/ issued in favour of Supreme Traders by Union Bank of India, Sadar Bazar Branch from account no. 307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/B5.

D296, pay order slip for issuance of pay order Ex.PW20/B5 (the pay slip is Ex.PW20/B6).

D299, pay order no.038283 dated 30.03.2007 for Rs.2,25,000,000/ issued in favour of State Bank of India A/C Duro Marketing Pvt Ltd. from Union Bank of India, CC No. 42/12 (25/16) 06.07.2018 28 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Sadar Bazar Branch from account no. 307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/B7.

D298 pay order slip for issuance of pay order Ex.PW20/B7 (the pay slip is Ex.PW20/B8).

D301 pay order no.038873 dated 30.06.2007 for Rs.65,00,000/ issued in favour of Supreme Traders by Union Bank of India, Sadar Bazar Branch from account no. 307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/B9.

D300, pay order slip for issuance of pay order Ex.PW20/B8 (the pay slip is Ex.PW20/B10).

D303, pay order no.038965 dated 12.07.2007 for Rs.15,00,000/ issued in favour of Supreme Traders by Union Bank of India, Sadar Bazar Branch from account no. 307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/B11.

D302, pay order slip for issuance of pay order Ex.PW20/B11 (the pay slip is Ex.PW20/B12).

D305, pay order no.038715 dated 09.06.2007 for Rs.13,47,850/ issued in favour of M/S JainCo. by Union Bank of India, Sadar Bazar Branch from account no. 307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/B13.

D304, pay order slip for issuance of pay order Ex.PW20/B13 (the pay slip is Ex.PW20/B14).

He stated that D197, D198, D199, D200, D201, D 204 D222 to 224 and D264 are the deposit slips of the bank Ex.PW20/C1 to Ex.PW20/C10 respectively through which different amounts were deposited in the current account no.307501010133539 of M/S Duro Marketing Pvt. Ltd.

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He proved the statement of account of M/S Duro Marketing Pvt. Ltd. Ex. PW 20/D2 in respect of current account no.307501010133539 for the period from 01.3.2007 to 11.9.2008. He proved the statement of cash credit account of A3 307505040132415 for the period from 30.3.2007 to

11.09.2008 (part of Ex.PW20/D2).

He proved the two FDRs dated 20.4.2007 and 18.4.2007 respectively in the name of M/S Duro Marketing Pvt. Ltd. for an amount of Rs.25.0 lacs each from the current account no.307501010133539 of M/S Duro Marketing Pvt Ltd. Ex.PW20/E1 and E2 respectively(D505 and D506 ).

He proved the FDR dated 30.6.2007 for Rs.1,00,000/ in favour of M/S Duro Marketing Pvt. Ltd. prepared from CC account no.307505040132415 of M/S Duro Marketing Pvt. Ltd. Ex.PW20/E3(D507).

He stated that number of cheques were deposited by M/S Duro Marketing Pvt. Ltd. in the current account and CC account which got dishonoured as reflected in statement of accounts Ex.PW20/D2. He stated that when cheque is deposited, credit entry is made and on dishonour of cheque, the debit entry of same amount is made and remark is given "insufficient amount in the account" and cheque is returned. PW34 B S Bartwal was the accountant in Union Bank of India, Sadar Bazar branch from 12.09.2005 to 18.08.2009. He stated that from May 2006 to March, 2008, Mahesh Chand Aggarwal was the Chief Manager in the branch. The CC No. 42/12 (25/16) 06.07.2018 30 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

advance department pertaining to loan used to be looked after by J B Handa, Manager and V K Gupta, Assistant Manager. M C Aggarwal was the overall Incharge. He proved the specimen signature card of the current account No. 307501010133539 in the name of M/s Duro Marketing Pvt. Ltd Ex. PW 34/A bearing the photograph of Mukesh Jain and Anil Dhall. He stated that as per Ex. PW 34/A (D

7), there were only two directors, Mukesh Jain and Anil Dhall. He had made an endorsement that the account would be operated by Mukesh Jain and Anil Dhall. He proved the account opening form Ex. PW 34/B (D7) bearing the photographs of Mukesh Jain and Anil Dhall and their signatures. He stated that the person appearing in the photograph at Point X of the account opening form Ex. PW 34/B did not appear in the bank at the time of submitting the account opening form and specimen signature card and the photograph at Point X was not affixed in his presence at the time of opening of account. He stated that as per the documents Ex. PW 34/A and Ex. PW 34/B, the name of the person appearing in the photograph at Point X has been mentioned as R G Mundkur but he does not know him as he never appeared before him in the bank. He stated that the photocopy of PAN Card of M/s Duro Marketing Pvt Ltd. Ex. PW 34/C1, Board Resolution Ex. PW 34/C2 and Memorandum and Articles of Association Ex. PW 34/C3 were submitted in his presence at the time of opening of the CC No. 42/12 (25/16) 06.07.2018 31 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

account. He stated that after 45 months, Mr. R K Bhangu, Assistant Manager had requested him to attest the photograph encircled at Point X on the specimen signature card Ex. PW 34/A. He told Mr. Bhangu that the photograph at the encircled Point X was not there at the time of opening of account and the person appearing in the photograph at Point X had nothing to do with the said account. He, then declined to attest the photograph at Point X. He informed M C Aggarwal, Chief Manager about it but he did not take cognizance of the matter. He then made endorsement at Point D of Ex. PW 34/A that the account would be operated by Mukesh Jain and Anil Dhall. He however admitted that he did not tell this fact to any other officer except M C Aggarwal. He admitted that he did not bring this fact to the notice of J B Handa and V K Gupta, the officers of the advance department who were handling the account of M/s Duro Marketing Pvt Ltd. He stated that the account of Duro Marketing Pvt Ltd was cash credit account and the documents related to that account were kept by the advance department. He stated that he never saw the accused Vinod Khanna in the bank.

PW37 Prabhat Kishore Singh was the Chief Manager, Union Bank of India, Sadar Bazar branch from June, 2008 to October, 2010. He stated that when he joined the branch, the fraud in the account of M/s Duro Marketing Pvt Ltd had already been detected. He handed over documents to CBI CC No. 42/12 (25/16) 06.07.2018 32 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

vide memo Ex. PW 37/A (D4), Ex. PW 37/B (D31), Ex. PW 37/C (D690) and Ex. PW 37/D (D587). He stated that through the memo Ex. PW 37/D, he handed over the circular Ex. PW 37/E (D588) dated 17.02.2007 qua handling recovery cases and containment of fake title deed frauds.

He stated that on 05.03.2007, a legal search report (D

18) was submitted by the panel advocate Aditya Madan to the Branch Manager. He stated that the legal search report was contrary to the guidelines laid down in the circular Ex. PW 37/E as it was neither on the prescribed proforma nor the certified copies of the title deeds were taken by the panel advocate for examination.

He stated that M C Aggarwal had violated the guidelines in the case of M/s Duro Marketing Pvt Ltd and allowed overdrawing more than Rs. 25.0 lacs in violation of the norms. He stated that the loan of M/s Duro Marketing Pvt Ltd was declared NPA probably in the last of 2008. It was already declared NPA by State Bank of India, Hauz Qazi branch but it was still taken over by the accused M C Aggarwal, the then branch manager.

On being crossexamined, he admitted that Sadar Bazar Branch of Union Bank of India was a very large branch and there were different departments to perform different duties and there was a separate department of loans and advances in the branch. He admitted that the loan of M/s Duro Marketing Pvt Ltd was sanctioned by regional office CC No. 42/12 (25/16) 06.07.2018 33 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

on the recommendations of the branch and the regional office had also done the assessment of the financial parameters of the borrower. He admitted that the loan accounts were taken over by his bank from the other banks also but he stated that there are guidelines for taking over the standard loan accounts from other banks and NPA accounts are not permitted. He admitted that the loan accounts/statement of accounts cannot be accessed by the other banks/individuals on net without the permission of the other banks.

He admitted that M C Aggarwal vide letter dated 26.03.2008 Ex. PW 37/A5/1 (D38) had informed the DGM, regional office about the detection of fraud pertaining to loan account of M/s Duro Marketing Pvt. Ltd relating to collateral securities offered by the borrower. He admitted that collateral securities of M/s Duro Marketing Pvt Ltd were changed during the tenure and efforts of accused Mahesh Chand Aggarwal. He stated that vide letter dated 20.06.2008 Ex. PW 37/A5/2 (D118), the name of Aditya Madan advocate was depanelled. He admitted that in respect of overdrawings of loan accounts, F1 statement is sent by the branch office to the regional office fortnightly and regional office is competent to accept or deny the overdrawings.

PW39 S P Goel was the Regional Manager in Union Bank of India from May, 2006 to March, 2009. He explained the CC No. 42/12 (25/16) 06.07.2018 34 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

procedure of giving credit facilities by the bank.

He stated that the proposals for credit facilities are generated by the branch. After scrutiny of application, financial statement, due diligence, documents relating to collateral securities and other security documents, and the credentials of the customers/borrowers, proposals are sent by the branch to regional office along with the comments and recommendations of the branch head. In regional office, there is a processing cell. Processing Cell scrutinizes the proposals. If there is any query, it is raised by the Cell and sent to the branch for reply. After the process, processing cell gives its noting on the proposals. The proposal is then put up before the GRID of 45 officers of different departments of the bank for consideration in the regional office. After recommendation of GRID, proposal is put up before the sanctioning authority. If it is a take over account, the sanctioning authority sends the matter to the next higher authority for concurrence. After sanction of credit facility/loan, the communication is sent to the branch along with details of the sanction and terms and conditions. The terms and conditions are required to be complied with before the disbursement of loan which is the responsibility of the branch head of the branch. After disbursement of loan, the monitoring is looked after by the regional office/Zonal Office/central office as per the size of loan amount. The reports for monitoring are sent by the branch heads to the CC No. 42/12 (25/16) 06.07.2018 35 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

authorities on monthly basis.

He stated that the file Ex. PW 39/B (D117, total 433 pages) pertaining to credit facility/loan to M/s Duro Marketing Pvt Ltd maintained in Sadar Bazar branch was put up before him in the regional office for concurrence. Vide order dated 05.03.2007 Ex. PW 39/A (D117, Page

422), he granted the concurrence to take over the account of M/s Duro Marketing Pvt Ltd maintained in State Bank of India Hauz Qazi branch by Sadar Bazar branch of Union Bank of India. He stated that cash credit limit of Rs.4.0 crores and import LC of Rs.1.0 crore were sanctioned in favour of Duro Marketing Pvt. Ltd on 05.03.2007 by Sh N N Chauhan, AGM, Regional Office vide Ex. PW 39/C (D117, Page 413). The proposal was sent to the regional office by Mahesh Chand Aggarwal on 25.01.2007 vide letter Ex. PW 39/D (D117, Page 374). The clarifications were sought by the regional office which were replied by Mahesh Chand Aggarwal vide letter dated 09.02.2007 Ex PW 39/E (D117, Page 391). M C Aggarwal vide letter dated 22.02.2007 (D 117, Page 405) had written that party is ready to submit cash security of Rs.51.0 lacs in the form of FDRs in addition to collateral securities which fact was incorporated in the terms and conditions of the sanction order. He stated that the FDRs were to be furnished by the borrower from its own funds before the disbursement of CC limit and not from the account of CC Limit. He stated that the reports of State Bank CC No. 42/12 (25/16) 06.07.2018 36 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

of India, Hauz Qazi branch were available in the file which were scrutinized by his officers below him and he did not go into the details of those documents. He admitted that the proposal was also signed by the Manager (Advances) besides M C Aggarwal and the Authorities at different levels were satisfied and thereafter the sanction was recommended and granted. He stated that everything was done by the officials at different levels in the ordinary course and he did not see anything wrong in the processing at any level. PW49 Vinod Kumar Narula was the Manager in the Regional Office, Union Bank of India from 2005 to 2009. He was looking after proposal of advances related to the branches. He also explained the procedure of sanction of proposal of advances.

He stated that in 20062007, Chief Manager of the Branch had power to allow overdraft facility upto Rs. 25.0 lacs in CC and LC limits and there was no requirement of confirmation from the higher authorities. In case of overdrawn facility beyond the delegated powers, approval was required. He handed over the record/files in respect of sanction of loan by the regional office to the IO. He stated that the case of M/s Duro Marketing Pvt. Ltd was processed in the regional office on the basis of the documents in accordance with the norms of the bank and there was no deficiency in the proposal and documents sent by the branch and the loan and credit facility proposal was sanctioned by CC No. 42/12 (25/16) 06.07.2018 37 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

the regional office in accordance with the normal procedure. PW54 Gautam Kampani was posted as Asstt. Manager in Union Bank of India, Sadar Bazar Branch from 2005 to 2007. He stated that he had cleared the cheques/vouchers in the ordinary course of business as per the details below:

SI. D Cheque No. Amount Favouring Passed by/Remarks Exhibit No. No. & Date (Rs.)

1. 736511 14,75,000/ Kwality V. K. Gupta Already 50 4.4.07 Enterprises Ex.PW20/B 1

2. 51 736516 27,80,000/ Kwality Does not bear any signature Ex.PW54/1 9.4.07 Enterprises but from computer record this cheque was passed by B. S. Bartwal.

3. 52 736517 14,00,000/ Kwality Gautam Kampani/ B. S. Ex.PW54/2 12.4.07 Enterprises Bartwal

4. 53 736518 13,75,990/ Kwality Gautam Kampani/ B. S. Ex.PW54/3 17.4.07 Enterprises Bartwal

5. 54 736519 4,24,010/ Kwality B. S. Bartwal Ex.PW54/4 18.4.07 Enterprises

6. 55 736520 20,764/ Hamesh B. S. Bartwal Ex.PW54/5 18.4.07 Madaan & Associates

7. 56 736523 8,50,000/ Kwality Gautam Kampani/ B. S. Ex.PW54/6 22.4.07 Enterprises Bartwal

8. 57 736525 10,26,536/ Kwality B. S. Bartwal Ex.PW54/7 27.04.06 Enterprises

9. 58 736528 5,24,256/ Kwality Gautam Kampani/ B. S. Ex.PW54/8 1.5.07 Enterprises Bartwal (It bears initials of M. C. Aggarwal with Yes).

10. 59 736527 4,75,750/ Kwality Gautam Kampani/ B. S. Ex.PW54/9 1.5.07 Enterprises Bartwal (It bears initials of M. C. Aggarwal with Yes).

11. 60 736529 9,54,760/ Kwality Gautam Kampani/ B. S. Ex.PW54/10 3.5.07 Enterprises Bartwal

12. 61 736530 7,48,975/ Kwality B. S. Bartwal Ex.PW54/11 4.5.07 Enterprises

13. 62 736531 6,45,833/ Kwality D. N. Sharma/ R. K. Bangu Ex.PW54/12 7.5.07 Enterprises

14. 63 736535 8,63,950/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/13 8.5.07 Enterprises

15. 64 736536 6,85,825/ Kwality B. S. Bartwal/ Ex.PW54/14 8.5.07 Enterprises

16. 65 736538 9,84,564/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/15 10.5.07 Enterprises

17. 66 736539 8,45,975/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/16 11.5.07 Enterprises CC No. 42/12 (25/16) 06.07.2018 38 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

SI. D Cheque No. Amount Favouring Passed by/Remarks Exhibit No. No. & Date (Rs.)

18. 67 736543 4,65,700/ Kwality B. S. Bartwal/ Gautam Ex.PW54/17 16.5.07 Enterprises Kampani

19. 68 736544 8,45,675/ Kwality B. S. Bartwal/Pem Chand Ex.PW54/18 16.5.07 Enterprises

20. 69 736541 2,84,700/ Mukesh B. S. Bartwal Ex.PW54/19 15.5.07 Jain

21. 70 736547 7,75,840/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/20 19.5.07 Enterprises ( It bears initials of M.C. Aggarwal)

22. 71 736549 6,85,475/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/21 21.5.07 Enterprises

23. 72 736551 7,10,640/ Kwality B. S. Bartwal/ R. K. Bangu Ex.PW54/22 22.5.07 Enterprises

24. 73 736552 8,24,950/ Kwality Gautam Kampani/ R. K. Ex.PW54/23 22.5.07 Enterprises Bangu

25. 74 736553 8,85,960/ Kwality B. S. Bartwal Ex.PW54/24 24.5.07 Enterprises

26. 75 736554 8,85,756/ Kwality Gautam Kampani Ex.PW54/25 28.5.07 Enterprises

27. 76 736557 7,92,850/ Kwality Gautam Kampani Ex.PW54/26 29.5.07 Enterprises

28. 77 736558 7,68,700/ Kwality Gautam Kampani Ex.PW54/27 29.5.07 Enterprises

29. 78 736561 12,80,745/ Kwality Gautam Kampani Ex.PW54/28 1.06.07 Enterprises

30. 79 736563 11,90,250/ Kwality Gautam Kampani Ex.PW54/29 5.06.07 Enterprises

31. 80 736566 14,75,600/ Kwality Gautam Kampani Ex.PW54/30 7.06.07 Enterprises

32. 81 736564 13,47,850/ Kwality Gautam Kampani Ex.PW54/31 7.06.07 Enterprises

33. 82 736571 15,05,850/ Kwality Gautam Kampani Ex.PW54/32 13.06.07 Enterprises

34. 83 736572 19,80,975/ Kwality Gautam Kampani Ex.PW54/33 15.06.07 Enterprises

35. 84 736574 18,45,980/ Kwality Gautam Kampani Ex.PW54/34 16.06.07 Enterprises

36. 85 736575 18,95,985/ Kwality Gautam Kampani Ex.PW54/35 18.06.07 Enterprises

37. 86 736576 19,75,680/ Kwality Gautam Kampani Ex.PW54/36 19.06.07 Enterprises

38. 87 736578 7,81,265/ Supreme Gautam Kampani Ex.PW54/37 20.06.07 Traders

39. 88 736577 8,95,675/ Kwality Gautam Kampani Ex.PW54/38 20.06.07 Enterprises

40. 89 736579 16,88,965/ Kwality Gautam Kampani Ex.PW54/39 21.06.07 Enterprises

41. 90 736582 19,35,250/ Kwality Gautam Kampani Ex.PW54/40 23.06.07 Enterprises

42. 91 736584 18,66,980/ Kwality Gautam Kampani Ex.PW54/41 23.06.07 Enterprises

43. 92 736580 18,75,980/ Kwality Gautam Kampani Ex.PW54/42 22.06.07 Enterprises CC No. 42/12 (25/16) 06.07.2018 39 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

                                                            40

  SI.     D       Cheque No.         Amount             Favouring        Passed by/Remarks                    Exhibit 
  No.     No.     & Date             (Rs.)
  44.     93        736587            18,90,240/       Kwality          Gautam Kampani                       Ex.PW54/43
                   27.06.07                             Enterprises
  45.      94       736590             65,00,000/      Yourself         J.B. Handa (It bears initials        Ex.PW54/44
                   30.06.07                                              of M.C. Aggarwal with yes)
  46.      95       736588             17,96,750/      Supreme          D.N. Sharma                          Ex.PW54/45
                   28.06.07                             Traders
  47.      96       736589             18,96,500/      Kwality          Gautam Kampani                       Ex.PW54/46
                   30.06.07                             Enterprises
  48.      97       736595             17,85,700/      Supreme          Prem Chand/ B.S. Bartwal             Ex.PW54/47
                    6.07.07                             Traders
  49.      98       736597             18,85,950/      Kwality          Gautam Kampani                       Ex.PW54/48
                     7.7.07                             Enterprises
  50.      99       736600             14,65,700/      Supreme          Gautam Kampani                       Ex.PW54/49
                    10.7.07                             Traders
  51.     100       770303             15,00,000/      Yourself         Preme Chand/ B.S. Bartwal            Ex.PW54/50
                    12.7.07                                              (It bears initials of M.C. 
                                                                         Aggarwal with Yes)
  52.     101        770306             1,16,000/      Duro             J.B. Handa/ Anil Mehra (It           Ex.PW54/51
                     17.7.07                            Marketing        bears initials of M.C. 
                                                        Pvt. Ltd.        Aggarwal with Yes)
  53.     102        770305            17,85,000/      Kwaliti          Gautam Kampani                       Ex.PW54/52
                     16.7.07                            Enterprises
  54.     103        770317            25,00,000/      Yourself         J.B. Handa/ B.S. Bartwal             Ex.PW54/53
                      1.8.07                                             (Sh. J.B.Handa has written 
                                                                         'allowed by CM' with his 
                                                                         initials)
  55.     104        770333            10,95,725/      Kwality          Gautam Kampani                       Ex.PW54/54
                     14.10.07                           Enterprises
  56.     105        770321            10,00,000/      Yourself         B.S. Bartwal /R.K. Bangu             Ex.PW54/55
                      6.8.07
  57.     106        770331             6,45,750/      Kwality          Gautam Kampani                       Ex.PW54/56
                     12.10.07                           Enterprises
  58.     107        770330             9,20,000/      Supreme          Gautam Kampani                       Ex.PW54/57
                     12.10.07                           Traders
  59.     108        770341             2,50,000/      Supreme          Gautam Kampani                       Ex.PW54/58
                     19.10.07                           Traders
  60.     109        770344             2,06,790/      Supreme          Gautam Kampani                       Ex.PW54/59
                     24.10.07                           Traders
  61.     110        770346             2,11,570/      Supreme          Gautam Kampani                       Ex.PW54/60
                     26.10.07                           Traders
  62.     111        770358             2,75,928/      Yourself         J.B. Handa/ V.K. Gupta               Already 
                     7.11.07                                             (The words 'allowed by               Ex.PW20/B
                                                                         CM' have been written by             2
                                                                         J.B. Handa)
  63.     469        770339                50,000/     Mukesh           J.B. Handa/ V.K. Gupta (It           Already 
                     17.10.07                                            bear initial of J.B. Handa           Ex.PW20/B
                                                                         with pay)                            3
  64.     470        736514                50,000/     Fayaz            B.S. Bartwal /                     Ex.PW54/6
                      7.4.07                                                                                  1
  65.     471        770301            15,45,750/      Supreme          Gautam Kampani                       Ex.PW54/6
                     11.7.07                            Traders                                               2




CC No. 42/12 (25/16)                        06.07.2018                                                       40 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            41

  SI.     D       Cheque No.         Amount             Favouring        Passed by/Remarks                    Exhibit 
  No.     No.     & Date             (Rs.)
  66.     472       736598             6,27,450/       Kwality          Gautam Kampani                       Ex.PW54/6
                     9.7.07                             Enterprises                                           3
  67.     473        736599            12,20,750/      Supreme          Gautam Kampani                       Ex.PW54/6
                      9.7.07                            Traders                                               4
  68.     474        770309            15,00,000/      Yourself         J.B. Handa/ Anil Mehra               Ex.PW54/6
                     19.7.07                                             (The words 'CM allowed'              5
                                                                         have been written by J.B. 
                                                                         Handa)
  69.     475        770314            16,00,000/      Yourself         J.B. Handa/ B.S. Bartwal             Ex.PW54/6
                     23.7.07                                                                                  6
  70.     476        770313             2,59,200/      Anil Dhall       Gautam Kampani                       Ex.PW54/6
                     16.5.07                                                                                  7
  71.     477        770316                69,209/     Yourself         B.S. Bartwal (It bear initials       Ex.PW54/6
                     24.7.07                                             of M.C. Aggarwal with yes)           8
  72.     478        770307            15,65,690/      Supreme          Gautam Kampani                       Ex.PW54/6
                     17.7.07                            Traders                                               9
  73.     306        770354             4,45,000/      Mukesh           J.B. Handa/ B.S. Bartwal/            Already 
                     3.11.07                                             V.K. Gupta (The words                Ex.PW20/
                                                                         'allowed by CM' have been            B4
                                                                         written by J.B. Handa)
  74.     307        736537             4,00,000/      Self             B.S. Bartwal / R.K. Bangu            Ex.PW54/7
                      9.5.07                                                                                  0
  75.     502        726007            25,00,000/      Yourself         B.S. Bartwal / R.K. Bangu            Ex.PW54/7
                     11.4.07                                                                                  1
  76.     503        726008            25,00,000/      Yourself         B.S. Bartwal / R.K. Bangu            Ex.PW54/7
                     20.4.07                                             (It bears initials of M.C.           2
                                                                         Aggarwal with yes)
  77.     504        726018            65,00,000/      Yourself         J.B. Handa (It bears initials        Ex.PW54/7
                     30.6.07                                             of M.C. Aggarwal with yes)           3
  78.     508         Debit             1,00,000/      For              J.B. Handa                           Ex.PW54/7
                     voucher                            issuance of                                           4
                     30.6.07                            FDR

On being shown the vouchers below, he stated that the vouchers were cleared in the ordinary course of business. He identified the vouchers as well as his signatures on the same along with the details given in following table: SI. D Vouchers Amount Favouring Passed Exhibit No. No. with (Rs.) by/Remarks cheque no.

1. 136 264760 1,95,000/ OBC, Shahadara D.N. Sharma/ Ex.PW54/75 Gautam Kampani

2. 137 632707 3,00,000/ OBC, Preet Vihar D.N. Sharma/ Ex.PW54/76 Gautam Kampani CC No. 42/12 (25/16) 06.07.2018 41 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

                                                            42

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 3.        138      673973             5,00,000/      Andhra Bank,             D.N. Sharma/               Ex.PW54/77
                                                       R.K. Puram                Prem Chand
 4.        139      264169             4,57,343/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/78
                                                                                Gautam Kampani
 5.        140      673972             5,00,000/      Andhara Bank,            Abhishek Sinha             Ex.PW54/79
                                                       R.K. Puram
 6.        141      633126             1,42,978/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/80
                                                                                Abhishek Sinha
 7.        142      633126             1,35,594/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/81
                    (633128 as                                                  Abhishek Sinha
                    per 
                    statement)
 8.        143      633127             2,17,438/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/82
                                                                                Anil Mehra
 9.        144      264770             3,39,112/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/83
                                                                                Anil Mehra
 10.       145      632707             1,33,789/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/84
                                                                                Anil Mehra
 11.       146      264771              1,98,581/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/85
                                                                                Anil Mehra
 12.       147      632708             2,37,500/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/86
                                                                                Anil Mehra
 13.       148      633130             1,35,594/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/87
                                                                                Anil Mehra
 14.       149      633132             1,43,534/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/88
                                                                                Anil Mehra
 15.       150      264774             4,73,339/      OBC, Shahadara           D.N. Sharma                Ex.PW54/89
 16.       151      632709             2,66,190/      OBC, Preet Vihar         D.N.                       Ex.PW54/90
                                                                                Sharma/Gautam 
                                                                                Kampani
 17.       152      834411             5,00,000/      UBI, Chandani            D.N. Sharma/               Ex.PW54/91
                                                       Chowk                    Gautam Kampani
 18.       153      632710             3,18,207/      OBC, Preet Vihar         Gautam Kampani             Ex.PW54/92
 19.       154      264788             4,84,375/      OBC, Shahadara           Gautam Kampani             Ex.PW54/93
 20.       155                         4,75,000/      Cash                     Gautam Kampani/            Ex.PW54/94
                                                                                Anil Mehra
 21.       156      633126             1,42,978/      OBC, Preet Vihar         D.N. Sharma/Prem           Ex.PW54/95
                                                                                Chand
 22.       157      264789             5,46,561/      OBC, Shahadara           D.N. Sharma/Prem           Ex.PW54/96
                                                                                Chand
 23.       158      633136             2,66,190/      OBC, Preet Vihar         Unsigned                   Ex.PW54/97
 24.       159      632723             6,93,870/      OBC, Preet Vihar         Unsigned                   Ex.PW54/98
 25.       160      832714             7,85,013/      OBC, Preet Vihar         Anil Mehra                 Ex.PW54/99
 26.       161      264774             4,73,339/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/100
                                                                                Abhishek Sinha
 27.       162      591617             1,05,224/      State Bank of            D.N. Sharma/               Ex.PW54/101
                                                       India, Hauz Qazi         Abhishek Sinha
 28.       163                         2,00,000/      Cash                     B.S. Bartwal/              Ex.PW54/102
                                                                                Abhishek Sinha
 29.       164      632711             8,17.971/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/103
                                                                                Abhishek Sinha


CC No. 42/12 (25/16)                        06.07.2018                                                       42 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            43

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 30.       165                         2,00,000/      Cash                     Gautam Kampani             Ex.PW54/104
 31.       166      633138             1,47,510/      OBC, Preet Vihar         D.N. Sharma                Ex.PW54/105
 32.       167      633137             1,77,710/      OBC, Preet Vihar         D.N. Shrma/                Ex.PW54/106
                                                                                Abhishek Sinha
 33.       168      633135             1,60,606/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/107
                                                                                Abhishek Sinha
 34.       169      633143             1,60,649/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/108
                                                                                Abhishek Sinha
 35.       170      633139             1,52,460/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/109
                                                                                Abhishek Sinha
 36.       171      633140             1,98,964/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/110
                                                                                Abhishek Sinha
 37.       172      633141             1,28,702/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/111
                                                                                Abhishek Sinha
 38.       173      632712             4,73,638/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/112
                                                                                Gautam Kampani
 39.       174      633146             1,48,538/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/113
                                                                                Gautam Kampani
 40.       175      633145             1,14,474/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/114
                                                                                Gautam Kampani
 41.       176      264782             6,24,662.7      OBC, Shahadara           D.N. Sharma/               Ex.PW54/115
                                              6/                               Gautam Kampani
 42.       177      264776             8,27,083/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/116
                                                                                Gauatam Kampani
 43.       178      633148             2,63,800/      OBC, Preet Vihar         Prem Chand/                Ex.PW54/117
                                                                                Abhishek Sinha
 44.       179      264777             5,99,580/      OBC, Shahadara           Prem Chand/                Ex.PW54/118
                                                                                Abhsihek Sinha
 45.       180      264780             1,60,993/      OBC, Shahadara           D.N. Sharama/              Ex.PW54/119
                                                                                Abhishek Sinha
 46.       181      264779             6,14,448/      OBC, Shahadara           D.N. Sharama/              Ex.PW54/120
                                                                                Abhishek Sinha
 47.       182      633149             5,00,000/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/121
                                                                                Anil Mehra
 48.       183      55996              7,50,000/      State Bank of            D.N. Sharma/               Ex.PW54/122
                                                       India, Hauz Qazi         Anil Mehra
 49.       184      632715             5,25,650/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/123
                                                                                Anil Mehra
 50.       185      264780             1,60,993/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/124
                                                                                Abhishek Sinha
 51.       186      264779             6,14,448/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/125
                                                                                Abhishek Sinha
 52.       187      264784             7,20,500/      OBC, Shahadara           Prem Chand/                Ex.PW54/126
                                                                                Abhishek Sinha
 53.       188      633150             3,04,999/      OBC, Preet Vihar         Prem Chand                 Ex.PW54/127
                                                                                /Abhishek Sinha
 54.       189      792102             1,42,900/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/128
                                                                                Anil Mehra
 55.       190      264781             7,15,975/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/129
                                                                                Anil Mehra




CC No. 42/12 (25/16)                        06.07.2018                                                       43 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            44

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 56.       191      792103             4,75,125/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/130
                                                                                Anil Mehra
 57.       192      633801             2,10,775/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/131
                                                                                Anil Mehra
 58.       193      264785             5,10,720/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/132
                                                                                R.K. Bangu
 59.       194      633802             5,76,992/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/133
                                                                                R.K. Bangu
 60.       195      792104             3,45,765/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/134
                                                                                R.K. Bangu
 61.       196      633803             1,75,000/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/135
                                                                                Prem Chand
 62.       197      792105             6,54,200/      OBC, Preet Vihar         Prem Chand/                Ex.PW54/136
                                                                                V.K. Gupta
 63.       198      264787             4,95,000/      OBC, Shahadara           Prem Chand/                Ex.PW54/137
                                                                                V.K. Gupta
 64.       199      633804             6,32,370/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/138
                                                                                V.K. Gupta
 65.       200      264790             6,85,995/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/139
                                                                                V.K. Gupta
 66.       201      792107             2,85,485/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/140
                                                                                V.K. Gupta
 67.       202      264791             6,95,498/      OBC, Shahadara           D.N. Sharma/               Ex.PW54/141
                                                                                B.S. Bartwal
 68.       203      633805             8,85,990/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/142
                                                                                B.S. Bartwal
 69.       204      264792             4,28,000/      OBC, Shahadara           V.K. Gupta                 Ex.PW54/143
 70.       205      792108             7,07,047/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/144
                                                                                 R.K. Bangu
 71.       206      264793             7,89,928/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/145
                                                                                 R.K. Bangu
 72.       207      264787             4,95,000/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/146
                                                                                R.K. Bangu
 73.       208      633809             2,70,838/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/147
                                                                                R.K. Bangu
 74.       209      792109             7,54,061/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/148
                                                                                R.K. Bangu
 75.       210      792110             9,87,331/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/149
                                                                                R.K. Bangu
 76.       211      264795             6,26,686/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/150
                                                                                R.K. Bangu
 77.       212      792111             7,18,512/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/151
                                                                                R.K. Bangu
 78.       213      264790             6,85,990/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/152
                                                                                R.K. Bangu
 79.       214      633805             8,85,990/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/153
                                                                                R.K. Bangu
 80.       215      792112             5,25,125/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/154
                                                                                R.K. Bangu
 81.       216      264796             5,60,380/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/156
                                                                                R.K. Bangu



CC No. 42/12 (25/16)                        06.07.2018                                                       44 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            45

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 82.       217      264800             5,35,375/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/157
                                                                                R.K. Bangu
 83.       218      264786             6,85,995/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/158
                                                                                R.K. Bangu
 84.       219      792115             9,75,830/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/159
                                                                                R.K. Bangu
 85.       220      792116             9,11,780/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/160
                                                                                R.K. Bangu
 86.       221      792110             9,87,331/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/161
                                                                                R.K. Bangu
 87.       222      673968             5,00,000/      Andhra Bank,             V.K. Gupta/                Ex.PW54/162
                                                       R.K. Puram               R.K. Bangu
 88.       223      673970             5,00,000/      Andhra Bank,             V.K. Gupta/                Ex.PW54/163
                                                       R.K. Puram               R.K. Bangu
 89.       224      264795             6,26,686/      OBC, Shahadara           V.K. Gupta/                Ex.PW54/164
                                                                                R.K. Bangu
 90.       225      673969             5,00,000/      Andhra Bank,             D.N. Sharma/               Ex.PW54/165
                                                       R.K. Puram               R.K. Bangu
 91.       226      679526           11,04,850/       Andhra Bank,             D.N. Sharma/               Ex.PW54/166
                                                       R.K. Puram               R.K. Bangu
 92.       227      679527             4,45,150/      Andhra Bank,             D.N. Sharma/               Ex.PW54/167
                                                       R.K. Puram               R.K. Bangu
 93.       228      365401             2,00,000/      OBC, Daryaganj           B.S. Bartwal/              Ex.PW54/168
                                                                                R.K. Bangu
 94.       229      792116             9,11,780/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/169
                                                                                R.K. Bangu
 95.       230      673976             5,00,000/      Andhra Bank.             B.S. Bartwal/              Ex.PW54/170
                                                       R.K. Puram               R.K. Bangu
 96.       231      691364           19,45,675/       Vijaya Bank,             B.S. Bartwal/              Ex.PW54/171
                                                       Ansari Road              R.K. Bangu
 97.       232      789024           19,75,480/       Nanital Bank,            B.S. Bartwal/              Ex.PW54/172
                                                       Jagriti Enclave          R.K. Bangu
 98.       233      365402             2,00,000/      OBC, Daryaganj           B.S. Bartwal/              Ex.PW54/173
                                                                                R.K. Bangu
 99.       234      792117             8,67,970/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/174
                                                                                D.N. Sharma
 100       235      264797             6,49,990/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/175
                                                                                D.N. Sharma
 101.      236      792118             8,84,900/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/176
                                                                                R.K. Bangu
 102.      237      264798             7,86,800/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/177
                                                                                R.K. Bangu
 103.      238      792120             3,95,890/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/178
                                                                                R.K. Bangu
 104.      239      264799             8,95,000/      OBC, Shahadara           B.S. Bartwal/              Ex.PW54/179
                                                                                R.K. Bangu
 105.      240      310721           10,00,000/       Standard                 B.S. Bartwal/              Ex.PW54/180
                                                       Chartered Bank,          R.K. Bangu
                                                       Sansad Marg
 106.      241      792121             6,85,990/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/181
                                                                                R.K. Bangu



CC No. 42/12 (25/16)                        06.07.2018                                                       45 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            46

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 107.      242      633810             5,75,620/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/182
                                                                                R.K. Bangu
 108.      243      792122             8,18,920/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/183
                                                                                R.K. Bangu
 109.      244      420484             4,30,000/      Andhra Bank,             Abhishek Sinha             Ex.PW54/184
                                                       Model Town
 110.      245      720484             5,70,000/      Andhra Bank,             Abhishek Sinha             Ex.PW54/185
                                                       Model Town
 111.      246      792123            2,25,000/       OBC, Preet Vihar         Abhishek Sinha             Ex.PW54/186
 112.      247      789024           19,75,480/       Nainital Bank,           Abhishek Sinha             Ex.PW54/187
                                                       Jagriti Enclave
 113.      248      691364           19,45,675/       Vijaya Bank,             Abhishek Sinha             Ex.PW54/188
                                                       Ansari Road
 114.      249      032851           10,00,000/       OBC, Shahadara           B.S. Bartwal/              Ex.PW54/189
                                                                                R.K. Bangu
 115.      250      792124             8,18,920/      OBC, Preet Vihar         Abhishek Sinha             Ex.PW54/190
 116.      251      720483             5,00,000/      Andhra Bank,             D.N. Sharma/               Ex.PW54/191
                                                       Model Town               R.K. Bangu
 117.      252      792126             8,95,990/      OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/192
                                                                                R.K. Bangu
 118.      253      679529             3,00,000/      Andhra Bank,             B.S. Bartwal/              Ex.PW54/193
                                                       R.K. Puram               R.K. Bangu
 119.      254      32856              4,45,750/      OBC, Shahadara           R.K. Bangu                 Ex.PW54/194
 120.      255      691371             7,00,000/      Vijaya Bank,             B.S. Bartwal/              Ex.PW54/195
                                                       Ansari Road              R.K. Bangu
 121.      256      792119            3,00,000//      OBC, Preet Vihar         R.K. Bangu                 Ex.PW54/196
 122.      257      633814             2,25,000/      OBC, Preet Vihar         B.S. Bartwal/              Ex.PW54/197
                                                                                R.K. Bangu
 123.      258                         3,00,000/      Cash                     B.S. Bartwal/              Ex.PW54/198
                                                                                R.K. Bangu
 124.      259      322660           19,50,000/       OBC, Shahadara           R.K. Bangu/                Ex.PW54/199
                                                                                Gautam Kampani
 125.      260      664303           17,45,800/       OBC, Preet Vihar         R.K. Bangu                 Ex.PW54/200
 126.      261      691356           18,95,775/       Vijaya Bank,             R.K. Bangu                 Ex.PW54/201
                                                       Ansari Road
 127.      262      633815           19,45,000/       OBC, Preet Vihar         R.K. Bangu                 Ex.PW54/202
 128.      263      365409           10,00,000/       OBC, Daryaganj           D.N. Sharma/               Ex.PW54/203
                                                                                B.S. Bartwal
 129.      264      679530           10,00,000/       Andhra Bank,             Prem Chand/ V.K.           Ex.PW54/204
                                                       R.K. Puram               Gupta
 130.      265                         1,20,000/      Cash                     D.N. Sharma/               Ex.PW54/205
                                                                                Prem Chand
 131.      266      032859           24,92,750/       OBC, Shahadara           B.S. Bartwal/              Ex.PW54/206
                                                                                Abhishek Sinha
 132.      267      664304           26,21,750/       OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/207
                                                                                B.S. Bartwal
 133.      268      633823           28,94,525/       OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/208
                                                                                B.S. Bartwal
 134       269      691354           27,85,000/       Vijaya Bank,             D.N. Sharma/               Ex.PW54/209
                                                       Ansari Road              B.S. Bartwal




CC No. 42/12 (25/16)                        06.07.2018                                                       46 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            47

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 135.      270      664305           10,00,000/       OBC, Preet Vihar         D.N. Sharma/               Ex.PW54/210
                                                                                B.S. Bartwal
 136.      271                         2,00,000/      Cash                     D.N. Sharma/               Ex.PW54/211
                                                                                B.S. Bartwal
 137.      272      664307           23,47,875/       OBC, Preet Vihar         Prem Chand/                Ex.PW54/212
                                                                                B.S. Bartwal
 138.      273      615826           38,98,995/       OBC, Laxmi               Prem Chand/                Ex.PW54/213
                                                       Nagar                    B.S. Bartwal
 139.      274      633824           26,21,750/       OBC, Preet Vihar         Prem Chand/                Ex.PW54/214
                                                                                B.S. Bartwal
 140.      275      664305           10,00,000/       OBC, Preet Vihar         Prem Chand/                Ex.PW54/215
                                                                                B.S. Bartwal
 141.      276      679556             9,15,315/      Andhra Bank,             Prem Chand/                Ex.PW54/216
                                                       R.K. Puram               B.S. Bartwal
 142.      277      365410             6,50,000/      OBC, Daryaganj           Prem Chand/                Ex.PW54/217
                                                                                B.S. Bartwal
 143.      278      679557             9,15,000/      Andhra Bank,             Prem Chand/                Ex.PW54/218
                                                       R.K. Puram               B.S. Bartwal
 144.      279      975000             9,75,000/      OBC, Daryaganj           Prem Chand/                Ex.PW54/219
                    (366135 as                                                  B.S. Bartwal
                    per 
                    statement)
 145.      280                         1,40,000/      Cash                     B.S. Bartwal/              Ex.PW54/220
                                                                                D.N. Sharma
 146.      281      399211             3,00,000/                               B.S. Bartwal/              Ex.PW54/221
                                                                                Prem Chand
 147.      282                        3,00,000/       Cash                     Prem Chand/                Ex.PW54/222
                                                                                Somprakash
 148.      283                        1,20,000/       Cash                     Somprakash                 Ex.PW54/223
 149.      284      618604           42,95,880/                                D.N. Sharma/               Ex.PW54/224
                                                                                B.S. Bartwal
 150.      285      633824           26,21,750/                                D.N. Sharma/               Ex.PW54/225
                                                                                B.S. Bartwal
 151.      286      615830           34,82,370/                                D.N. Sharma/               Ex.PW54/226
                                                                                B.S. Bartwal
 152.      287      618604           42,95,880/                                B.S. Bartwal/              Ex.PW54/227
                                                                                Somprakash
 153.      288      615826           38,98,995/                                B.S. Bartwal/              Ex.PW54/228
                                                                                Somprakash
 154.      289      664312           29,25,790/                                D.N. Sharma/               Ex.PW54/229
                                                                                B.S. Bartwal
 155.      290                         4,00,000/      Cash                     B.S. Bartwal               Ex.PW54/230
 156.      291      035022             9,00,000/                               B.S. Bartwal/              Ex.PW54/231
                                                                                Somprakash
 157.      292                         4,00,000/      Cash                     B.S. Bartwal/              Ex.PW54/232
                                                                                Somprakash
 158.      293                         3,00,000/      Cash                     R.K. Bangu/                Ex.PW54/233
                                                                                Somprakash
 159.      294                         5,00,000/      Cash                     B.S. Bartwal/              Ex.PW54/234
                                                                                Azad Singh




CC No. 42/12 (25/16)                        06.07.2018                                                       47 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            48

 SI.       D        Vouchers         Amount            Favouring                Passed                     Exhibit 
 No.       No.      with             (Rs.)                                      by/Remarks
                    cheque no.
 160.      295                         5,50,000/      Cash                     B.S. Bartwal/              Ex.PW54/235
                                                                                Azad Singh

He stated that M/s Duro Marketing Pvty. Ltd was maintaining account no. 307505040132415 in Union Bank of India, Sadar Bazar Branch. The above cheques were issued from the account of M/s Duro Marketing Pvt. Ltd which were cleared by the Bank.

PW63 J B Handa was the Manager in Union Bank of India, Sadar Bazar branch from September, 2003 to April, 2008. He stated that the loan account of M/s Duro Marketing Pvt Ltd was taken over by Union Bank of India, Sadar Bazar branch from State Bank of India, Hauz Qazi branch. Mukesh Jain, Anil Dhall and R G Mundkur were the directors of M/s Duro Marketing Pvt Ltd. Mukesh Jain had approached the bank for taking over the loan account in December, 2006 representing that he was not satisfied with the services of State Bank of India, Hauz Qazi branch, higher rate of interest was being charged and his limit was not enhanced by the bank despite assurance. He stated that M/s Duro Marketing Pvt Ltd opened a current account No. 307501010133539 in the bank vide account opening form Ex. PW 34/B and specimen signature card Ex. PW 34/A. Mukesh Jain used to visit the bank and meet M C Aggarwal, Chief Manager. He stated that the appraisal work of the loan account of M/s Duro Marketing Pvt Ltd was done by the CC No. 42/12 (25/16) 06.07.2018 48 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

accused M C Aggarwal, The proposal was submitted to the regional office by his branch. Preinspection visit of the business premises of M/s Duro Marketing Pvt Ltd was made by M C Aggarwal on 29.12.2006. M C Aggarwal also visited the property to be mortgaged i.e. A52, Vasant Marg, Vasant Vihar along with the valuer K G Saini. He had taken the documents from the borrower. The equitable mortgage was executed by R G Mundkur, owner of the property with the bank (through PW63). He stated that at the time of creation of equitable mortgage, following documents were submitted on behalf of M/s Duro Marketing Pvt. Ld along with the letter dated 04.04.2007 (D16):

i). Original perpetual sub lease deed of property no.A52, Vasant Marg, Vasant Vihar, Delhi, part of letter dated 04.04.2007 (D16) Ex.PW63/B (D16).

ii). Letter of Undertaking not to alienate hypothicated goods Ex.PW63/B1 (D22, four pages).

iii). Undertakings by the Directors of M/S Duro Marketing pvt ltd Ex.PW63/B2 (D23).

iv). Composite hypothication deed duly signed by the Directors of M/S Duro Marketing pvt ltd. Ex.PW63/B3 (D24, 16 pages).

v). Demand notes dated 28.03.2007 duly signed by the Directors of M/S Duro Marketing pvt ltd. Ex.PW63/B4 and B5 (part of D24).

vi). Letter of continuity duly executed by the Directors Ex.PW63/B6 (five page, D25).

vii). Letter of lien (deposits)executed by the Directors Ex.PW63/B7 (8 pages, D26).

CC No. 42/12 (25/16)                        06.07.2018                                                       49 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            50

viii). Letter (AD10) dated 28.03.2007 executed by the Director Anil Dhall and Mukesh Jain Ex.PW63/B8 (D 27, seven pages).

ix). Hypothecation agreement dated 28.03.2007 Ex.PW63/B9 ( page 22, D28).

x). Hypothecation agreement (SD06) dated 28.03.2007 Ex.PW63/B10 (D 29, 22 pages).

He stated that K G Saini, valuer, had given valuation report Ex. PW 15/A (D30) correctness of which was confirmed by the accused M C Aggarwal. The report formed part of site visit report and inspection of the accused M C Aggarwal Ex. PW 63/B11 (Part of D30). He stated that party had submitted house tax receipt Ex. PW 63/C (D17) in respect of the above property along with the certificates of payments to the society Ex. PW 63/D (part of D18). He stated that accused M C Aggarwal handed over him a letter of DDA regarding permission of equitable mortgage of residential plot No. A52, Vasant Marg, Vasant Vihar New Delhi Ex. PW 62/A(D19) which he had taken on record. R G Mundkur had appeared before him and filed a declaration Ex. PW 63/E (D20) in respect of the above property that the property was free from charges and encumbrances. He also filed an affidavit Ex. PW 63/F ( part of D20) and gave a letter Ex. PW 63/G (D15) in the name of the Manager, State Bank of India Hauz Qazi for handing over the perpetual sub lease deed to Union Bank of India, Sadar Bazar branch. He CC No. 42/12 (25/16) 06.07.2018 50 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

stated that he took the letter, went to State Bank of India Hauz Qazi branch, collected the perpetual sublease deed and placed it in the record of the bank. He stated that he had processed the documents and executed the equitable mortgage on behalf of the bank after getting satisfied. All the directors had appeared before him. Copies of PAN card and other documents in support of the identities of the directions were also before him along with the legal search report and valuation report. He stated that all the proceedings were conducted with the approval of M C Aggarwal, who also identified all the directors including R G Mundkur. He stated that the documents were taken in accordance with the terms and conditions of the loan sanctioned by the regional office vide sanction letter dated 05.03.2007 Ex. PW 63/H (D10). He stated that in this case, a minor penalty was imposed on him (PW63) by the bank. He proved the limit proposal Ex. PW 63/J (D32, 23 pages), documents pertaining to taking over the account from State Bank of India Ex. PW 63/J1 (D

47) & Ex. PW 63/J2 (D48), Pay Order and voucher dated 07.08.2007 in favour of JainCo Ex. PW 63/J3 (D691) and Pay Order and voucher in favour of JainCo for an amount of Rs.25 lacs Ex. PW 63/J4 (D692). He identified the accused Vinod Khanna and stated that he had appeared before him as R G Mundkur. He stated that later he came to know that his name was Vinod Khanna. He denied that accused Vinod Khanna never appeared in the bank before him or any other CC No. 42/12 (25/16) 06.07.2018 51 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

officer nor signed any document nor represented himself as R G Mundkur.

Witnesses from Vigilance Department, Union Bank of India :

PW45 Sunil Dhawan was the Senior Manager/Chief Manager, Zonal Vigilance Cell, Union Bank of India. He along with Nagesh Chaudhary, Senior Manager, on the directions of CVC of the bank had done the investigation of the account of M/s Duro Marketing Pvt. Ltd at Sadar Bazar Branch. He also inspected the property mortgaged with the bank. He submitted the inspection report dated 15.03.2008 Ex.PW45/A (D40 pages 28), report dated 24.03.2008 Ex.PW45/B (D41), report dated 27.03.2008 Ex.PW45/C (D42) and report dated 03.04.2008 Ex.PW45/D (D43) to CVO with the documents Ex.PW45/E collectively (part of D43 page 4 to 11). He also proved a letter Ex.PW45/F (D

44) which was part of the investigation.

He stated that proceedings arising out of suit no. 1960A of 1984 between Major P.S. Mehlatawat and R.G. Mudkar were pending in the High Court of Delhi in respect of property No. A52, Vasant Marg, Vasant Vihar. He proved the visit report Ex.PW45/H dated 04.04.2008 (D45), dated 11.03.2008 Ex.PW45/H1 (D45) and dated 29.02.2008 Ex.PW45/H2 (D45).

On being crossexamined, he admitted that when a loan account is taken over by another bank, original property CC No. 42/12 (25/16) 06.07.2018 52 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

documents are also taken over by the bank. He stated that Sadar Bazar Branch was a very large branch having different departments and J.B. Handa was heading the credit / advances department. In the case of Duro Marketing Pvt. Ltd, sanctioning authority was the regional office. The credit/advance proposal was processed in the regional office and it was put up before a GRID of officers at the level of regional office and Risk Officer was one of the members of the GRID who had made independent inquiry about the proposal. He stated that Sadar Bazar Branch had reported in writing to the regional office that enhancement of limits sought by M/s Duro Marketing Pvt. Ltd was not considered by the branch of State Bank of India as the delegated authority for the same did not vest with that branch. He admitted that when the loan proposal was sent to the Regional Office from the branch, statement of account upto 30.11.2006 was on record and the same was upto date. He also admitted that the regional office could have asked for the statement of account for the period after 30.11.2006 prior to sanction of loan but in this case it was not called. He however, stated that it was stipulated in the sanction order that upto date statement of account for one year be taken by the branch before disbursement. He stated in his report Ex.PW45/A, para 8.7, he had mentioned that cash collateral was arranged by diverting the receipts of the company and allowing excess over the limit in the account and FDRs were CC No. 42/12 (25/16) 06.07.2018 53 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

obtained after the amount was disbursed. He had also mentioned in para 4.36 how the FDRs were arranged i.e. by diverting the credit to current account of the firm instead of Cash Credit account which had already been disbursed and to meet the short fall of Rs. 1.0 lac, excess over limit was allowed by the branch from the cash credit account. He stated that Cash collateral security was to be arranged by the party from its own independent funds and should have been taken by the bank prior to disbursal of loan. He stated that the party did not arrange cash collateral security from its own funds but arranged from the funds diverted from the business proceeds against the loan account. The overdraft of Rs. 1 lac was allowed by the branch in favour of the party to meet the deficiency which was not permissible.

He stated that as per his investigation, accused Mahesh Chand Aggarwal had detected the fraud and written a letter to regional office Ex.PW44/C1.

PW56 Nagesh Chaudhary was the Senior Manager, Vigilance Department, Zonal Vigilance Cell. He conducted the enquiry on the directions of Central Vigilance Department along with PW45. He deposed on the lines of PW45. He stated that he did not check the record from the office of Subregistrar nor went to the MCD/NDMC nor enquired from DDA about the property no. A52, Vasant Marg, Vasant Vihar, New Delhi.

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Witnesses from Canara Bank, Munirka:

PW8 S. Firazuddin was officer in Munirka Branch, Canara Bank, New Delhi in the year 20072008. He proved the pay in slip Ex.PW8/A in the name of Vinod Khanna SB a/c no. 27323 dated 23.11.2007 of Rs. 25,000/ vide cheque no. 172010 Ex.PW8/B dated 23.11.2007. He also proved the statement of account Ex.PW8/C. PW12 Ms. Madhu Aggarwal was the Senior Manager in Canara Bank, Munirka branch. She proved the specimen signature card of Vinod Khanna pertaining to Saving Bank A/c No. 27323 Ex. PW 12/A (D121). She stated that Vinod Khanna had opened the account on 02.09.2004 in the aforesaid branch. She proved the account opening form Ex. PW 12/B (part of D121) and stated that Vinod Khanna as proprietor already had a current account number 1648 in the name of M/s Kanav Creation. She stated that the specimen signature card Ex. PW 12/A and account opening form Ex. PW 12/B bear the photograph of the account holder Vinod Khanna and she herself had tallied the photograph with the applicant and thereafter signed the same. She stated that in the account opening form, Vinod khanna had mentioned his PAN Card No. AGLPK2659M and she had also checked the original PAN card.

PW13 D. Thirupati was officer in Canara Bank, Munirka branch in 2007. He stated that as per the record, cheques bearing No. 833411 for Rs.16,000/ drawn on Oriental Bank CC No. 42/12 (25/16) 06.07.2018 55 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

of Commerce Darya Ganj branch Ex. PW 11/A (D492) and cheque No. 615821 for Rs.40,000/ drawn on Oriental Bank of Commerce, Vikas Marg branch Ex. PW 13/B (D493) were deposited in account No. 27323 of Vinod Khanna maintained at Canara Bank, Munirka branch.

PW14 Rajesh Kumar Gupta was officer in Canara Bank Munirka branch. He stated that cheques bearing No. 172021, 172022,172013, 172014, 472014 drawn on Oriental Bank of Commerce Darya Ganj branch were deposited in the account No. 27323 of Vinod Khanna maintained at Canara Bank, Munirka branch on 08.03.2008, 10.03.2008, 07.01.2008, 07.01.2008 and 10.01.2008 respectively and were sent for clearance to the respective banks. He proved the statement of accounts of the above account number for the period from 01.01.2006 to 10.01.2009 Ex. PW 8/C (D499 Page 226). PW35 S C Budhwar was Senior Manager, Canara Bank, Munirka branch. He handed over the pay in slips dated 08.03.2008 for Rs.9,000/, 10.03.2008 for Rs.9,000/, 05.01.2008 for Rs.2,000/, 07.01.2008 for Rs. 20,000/, 10.01.2008 for Rs. 20,000/ through which above amounts were deposited through cheques in the saving bank account No. 27323 by the accused Vinod Khanna Ex. PW 35/B to Ex. PW 35/B4 (D493, D495 to D498).

Witnesses from Oriental Bank of Commerce, Darya Ganj:

PW9 Sh. Anil Kumar was the Special Assistant in Oriental Bank of Commerce, Darya Ganj Branch, New Delhi. He CC No. 42/12 (25/16) 06.07.2018 56 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

stated that the cheques bearing No. 166573 dated 12.07.2007 for Rs.7,28,000/ Ex. PW 9/B (D331) and 166571 dated

11.07.2007 for Rs.6,00,000/ Ex. PW 9/C (D332) were issued from the account No. 00131011000663 of M/s Supreme Traders maintained at Oriental Bank of Commerce, Darya Ganj branch in favour of Duro Marketing Pvt Ltd. He proved Pay in Slip Ex. PW 9/D (D345) in respect of cheque No. 038965 for Rs.15,00,000/ of Union Bank in favour of M/s Supreme Traders having the above account number. He stated that the pay in slip was for the purchase of the cheque and credit of amount of Rs.15,00,000/ in the account of M/s Supreme Traders. He stated that after getting the permission from the Chief Manager, the commission/discount was deducted and the amount was credited in the account of M/s Supreme Traders.

PW41 Dinesh Goel was Passing Officer in Oriental Bank of Commerce, Darya Ganj branch in the year 2007 to 2009. He stated that vide 19 pay in slips pertaining to the firm M/s Quality Enterprises Ex. PW 41/A1 to Ex. PW 41/A19 (D 425429, D431439, D441444, D453), the cheques were deposited in the bank and the respective entries were made. He stated that 39 cheques Ex. PW 41/B1 to Ex. PW 41/B39 mentioned in the memo Ex. PW 41/B (D629) pertaining to M/s JainCo, account No. OD 5237 (00131010006610) maintained in the OBC bank, Darya Ganj branch were seized by the CBI. He stated that vide memo Ex. PW 41/C CC No. 42/12 (25/16) 06.07.2018 57 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

(D722), two cheques (D723 and D724) and two pay in slips (D723 and D724) Ex. PW 41/D1 to Ex PW 41/D4 pertaining to the above accounts were given to the CBI. PW42 Ravinder Sharma was Manager ScaleII in Oriental Bank of Commerce, Darya Ganj branch from 1988 to 2003. He stated that on 27.05.2000, M/s JainCo, proprietor Mukesh Jain, 2646, Balli Maran Delhi had opened a current account No. 5327 vide opening form Ex. PW 42/A (D126). On that form, he had written with red ink "Firm is already having a CC account with us and that the photocopy and photo of the proprietor are attached with that form". He stated that the firm already had cash credit account in their bank.

He stated that M/s Supreme Traders had a current account No. 00131011000663 in the Oriental Bank of Commerce Darya Ganj branch. He proved the account opening form Ex. PW 42/B1 and specimen signature card Ex. PW 42/B2 (D125) bearing the signature and photograph of Mukesh Jain. He stated that a current account No. 5523 in the name of Kwality Enterprises, B11/2, Okhla Industrial Area Phase II was in Oriental Bank of Commerce Darya Ganj branch. It was opened on 19.06.2003. He proved the account opening form Ex. PW 42/C (D511). He stated that Rakesh Khurana was the proprietor of M/s Kwality Enterprises. He had submitted copies of the Income Tax Returns (Saral Forms) and ration card as the proof of his CC No. 42/12 (25/16) 06.07.2018 58 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

identity.

PW50 Vijay Kumar Gujral was Manager in Oriental Bank of Commerce, Daryaganj Branch from 2006 to 2011. He identified the accused Mukesh Jain who was maintaining account in Oriental Bank of Commerce, Daryaganj Branch in the name of M/S Supreme Traders and M/S JainCo Proprietor Concerns. He identified the signatures of Mukesh Jain on the PAN Card and Passport Ex.PW50/A1 and Ex.PW50/A2 (part of D125).

He proved the statement of account of current A/c no.00131011000663 of Supreme Traders for the period from 19/06/2007 to 31/12/2007 Ex.PW50/B (D130).

He proved the statement of account of A/c no.00131010007610 of Jain Co. for the period from 01/04/2007 to 01/12/2007 Ex.PW50/C (D131).

He submitted the details of the cheques as follows:

Docu Cheque Amount Issued by Favouring Signatures of Documents ment No. (Rs.) bank official exhibited as No. who passed D313 166553 50,000/ Supreme Traders Self V.K. Gujral Ex.PW50/1 D314 166552 2,01,000/ Supreme Traders Jainco V.K. Gujral Ex.PW50/2 D315 166551 5,30,000/ Supreme Traders Mohan T.K. Chauhan Ex.PW50/3 Dass& Co.

D317 166555 9,40,000/ Supreme Traders Self M.P. Chopra Ex.PW50/4 D318 166556 4,00,000/ Supreme traders Mukesh Jain V.K. Gujral Ex.PW50/5 D319 166558 4,84,000/ Supreme Traders Self V.K. Gujral Ex.PW50/6 D320 166557 9,12,000/ Supreme Traders Mohan Dass T.K. Chauhan Ex.PW50/7 & Co.

  D322        166559         30,00,000/ Supreme Traders                Jain Co.          Rajiv Jain                Ex.PW50/8
  D323        166562         35,00,000/ Supreme Traders                Jain Co.          Rajiv Jain                Ex.PW50/9




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Docu        Cheque         Amount            Issued by                  Favouring         Signatures of            Documents
ment         No.            (Rs.)                                                          bank official            exhibited as
No.                                                                                        who passed 
  D325        166563           5,00,000/ Supreme Traders               Self              V.K. Gujral &            Ex.PW50/10
                                                                                           Rajiv Jain
  D326        166564           1,00,000/ Supreme Traders               Self              Rajiv Jain               Ex.PW50/11
  D327        166565           3,96,000/ Supreme Traders               Mohan Dass  T.K. Chauhan                   Ex.PW50/12
                                                                         & Co.
  D330        166572           8,00,000/ Supreme Traders               Jain Co.          Anil Arora and           Ex.PW50/13
                                                                                           M.P. Chopra
  D331        166573           7,28,000/ Supreme Traders               Self.             Anil Arora and           Ex.PW50/14
                                                                                           M.P. Chopra
  D332        166571           6,00,000/ Supreme Traders               Duro              Anil Arora and           Ex.PW50/15
                                                                         Marketing         M.P. Chopra
                                                                         Pvt. Ltd.
  D335        166587           5,60,000/ Supreme Traders               Self.             Anil Arora and           Ex.PW50/16
                                                                                           M.P. Chopra
  D336        166586           8,00,000/ Supreme Traders               Jain Co.          V.K. Gujral              Ex.PW50/17
  D337        876153           6,40,000/ Duro Marketing Pvt.  Supreme                    T.K. Chauhan             Ex.PW50/18
                                           Ltd.                 Traders
  D339        172003           1,65,000/ Supreme Traders               Mukesh Jain V.K. Gujral                    Ex.PW50/19
  D340        172004             85,000/ Supreme Traders               Self.             V.K. Gujral              Ex.PW50/20
  D342        172005           2,12,000/ Supreme Traders               Mukesh Jain V.K. Gujral                    Ex.PW50/21
  D344        172010             25,000/ Supreme Traders               Vinod             Officer of               Ex.PW50/22
                                                                         Khanna            clearing House of
                                                                                           OBC
  D347        166583           7,85,000/ Supreme Traders               Jain Co.          T.K. Chauhan             Ex.PW50/23
  D348        166582           4,87,980/ Supreme Traders               Duro              V.K. Gujral              Ex.PW50/24
                                                                         Marketing 
                                                                         Pvt. Ltd.
  D349        166584           2,26,000/ Supreme Traders               Shiv Shakti       T.K. Chauhan             Ex.PW50/25
                                                                         Udyog
  D351        833411             16,000/ Jain Co.                      Vinod             Clearing House           Ex.PW50/26
                                                                         Khanna
  D352        833449           6,50,000/ Jain Co.                      Sharma            T.K. Chauhan             Ex.PW50/27
                                                                         Enterprises
  D353        833448           8,78,000/ Jain Co.                      Mohan Dass  T.K. Chauhan                   Ex.PW50/28
                                                                         & Co.
  D354        833451           4,92,000/ Jain Co.                      Sharma            T.K. Chauhan             Ex.PW50/29
                                                                         Enterprises
  D355        833450           9,80,000/ Jain Co.                      Self              T.K. Chauhan             Ex.PW50/30
  D356        615810         18,96,000/ Kwality Enterprises            Jain Co.          T.K. Chauhan             Ex.PW50/31
  D357        833453           2,94,300/ Jain Co.                      Sharma            T.K. Chauhan             Ex.PW50/32
                                                                         Enterprises


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Docu        Cheque         Amount            Issued by                  Favouring         Signatures of            Documents
ment         No.            (Rs.)                                                          bank official            exhibited as
No.                                                                                        who passed 
  D358        833452           9,50,000/ Jain Co.                      Mohan Dass  T.K. Chauhan                   Ex.PW50/33
                                                                         & Co.
  D359        833455           9,90,000/ Jain Co.                      Mukesh Jain  Rajiv Jain                    Ex.PW50/34
  D360        833454           9,95,000/ Jain Co.                      Self              Mrs. Vinod Bala          Ex.PW50/35
                                                                                           Sachdeva
  D361        833456           9,80,000/ Jain Co.                      Mohan Dass  T.K. Chauhan                   Ex.PW50/36
                                                                         & Co.
  D362        833457           1,70,000/ Jain Co.                      Darshan           Mrs. Vinod Bala          Ex.PW50/37
                                                                         Mala Jain         Sachdeva
  D363        833459           4,00,000/ Jain Co.                      Self              M.P. Chopra &            Ex.PW50/38
                                                                                           V.K.Gujral
  D364        833458           4,50,000/ Jain Co.                      Duro              V.K. Gujral              Ex.PW50/39
                                                                         Marketing 
                                                                         Pvt. Ltd.
  D366        833488           1,00,000/ Jain Co.                      Self              M.P. Chopra &            Ex.PW50/40
                                                                                           V.K. Gujral
  D367        833487           8,01,000/ Jain Co.                      Shiv Shakti       T.K. Chauhan             Ex.PW50/41
                                                                         Udyog
  D368        833486           5,00,000/ Jain Co.                      Supreme           T.K. Chauhan             Ex.PW50/42
                                                                         Traders
  D369        833489         10,80,000/ Jain Co.                       Mukesh Jain T.K. Chauhan                   Ex.PW50/43


  D371        833494           9,50,000/ Jain Co.                      Self              M.P. Chopra &            Ex.PW50/44
                                                                                           V.K. Gujral
    381        612202           6,45,500/ Kwality Enterprises  Jain Co                    V.K. Gujral              Ex.PW 50/45
    382        612203           6,86,000/ Kwality Enterprises           Jain Co           Rajeev Jain             Ex. PW50/46
    383        612204           8,64,000/ Kwality Enterprises           Jain Co           T.K. Chauhan            Ex. PW50/47
    384        612206             95,000/ Kwality Enterprises           Jain Co           V.K. Gujral             Ex. PW50/48
    385        612207             7,51,000 Kwality Enterprises  Jain Co                    V.K. Gujral             Ex. PW50/49
    386        612205           9,84,000/ Kwality Enterprises           Jain Co           V.K. Gujral             Ex. PW50/50
    387        612208           4,65,000/ Kwality Enterprises           Jain Co           V.K. Gujral              Ex.PW50/51
    388        612209           8,45,500/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/52
    389        612210           7,76,000/ Kwality Enterprises  Jain Co                    Rajiv Jain              Ex. PW50/53
    390        612211           7,11,000/ Kwality Enterprises           Jain Co           V.K. Gujral             Ex. PW50/54
    391        612212           6,86,000/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/55
    392        612213           8,25,000/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/56
    393        612214           8,86,000/ Kwality Enterprises  Jain Co                    T.K. Chauhan            Ex. PW50/57
    394        612215           8,95,500/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/58
    395        612216           7,93,000/ Kwality Enterprises           Jain Co           T.K. Chauhan            Ex. PW50/59


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Docu        Cheque         Amount            Issued by                  Favouring         Signatures of            Documents
ment         No.            (Rs.)                                                          bank official            exhibited as
No.                                                                                        who passed 
    396        612217           7,69,000/ Kwality Enterprises           Jain Co           T.K. Chauhan            Ex. PW50/60
    397        615801         12,80,800/ Kwality Enterprises  Jain Co                     Rajiv Jain              Ex. PW50/61
    398        615802         10,50,000/ Kwality Enterprises            Jain Co           Rajiv Jain              Ex. PW50/62
    399        615803           1,40,000/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/63
    400        615804         13,48,000/ Kwality Enterprises            Jain Co           Rajiv Jain              Ex. PW50/64
    401        615805         14,76,000/ Kwality Enterprises  Jain Co                     T.K. Chauhan            Ex. PW50/65
    402        615806         15,05,800/ Kwality Enterprises            Jain Co           Rajiv Jain              Ex. PW50/66
    403        615807         19,80,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/67
    404        615811         18,46,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/68
    405        615812         38,72,000/ Kwality Enterprises  Jain Co                     Mrs. Vinod Bala         Ex. PW50/69
                                                                                           Sachdeva
    406        615813           8,95,000/ Kwality Enterprises           Jain Co           T.K. Chauhan            Ex. PW50/70
    407        615814         16,77,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/71
    408        615815         18,80,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/72
    409        615816           9,85,250/ Kwality Enterprises  Jain Co                    V.K. Gujral             Ex. PW50/73
    410        615817           9,50,000/ Kwality Enterprises           Supreme           V.K. Gujral             Ex. PW50/74
                                                                         Traders 
    411        615818         18,76,000/ Kwality Enterprises            Jain Co           V.K. Gujral             Ex. PW50/75
    412        615819           9,50,000/ Kwality Enterprises           Jain Co           V.K. Gujral             Ex. PW50/76
    413        615820           9,40,000/ Kwality Enterprises  Supreme                    V.K. Gujral             Ex. PW50/77
                                                                Traders
    414        615822         18,86,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/78
    415        615824           6,27,000/ Kwality Enterprises           Supreme           Rajiv Jain              Ex. PW50/79
                                                                         Traders
    416        615825         17,86,000/ Kwality Enterprises            Jain Co           T.K. Chauhan            Ex. PW50/80
    417        615829           2,95,000/ Kwality Enterprises           Supreme           V.K. Gujral             Ex. PW50/81
                                                                         Traders
    418        615827           6,44,000/ Kwality Enterprises           Mukesh Jain Mrs. Vinod Bala               Ex. PW50/82
                                                                                     Sachdeva
    419        182901         26,75,000/ Kwality Enterprises            Sharma            Rajiv Jain              Ex. PW50/83
                                                                         Enterprises 
    420        488088         25,80,000/ Kwality Enterprises  Jain Co                     Rajiv Jain              Ex. PW50/84
    421        182917         10,26,500/ Kwality Enterprises            Jain Co           V.K. Gujral             Ex. PW50/85
    422        182919           7,48,972/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/86
    423        182918         19,54,500/ Kwality Enterprises            Jain Co           Rajiv Jain              Ex. PW50/87
    424        182920           8,50,000/ Kwality Enterprises           Jain Co           Rajiv Jain              Ex. PW50/88




CC No. 42/12 (25/16)                        06.07.2018                                                       62 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            63

Docu        Cheque         Amount            Issued by                  Favouring         Signatures of            Documents
ment         No.            (Rs.)                                                          bank official            exhibited as
No.                                                                                        who passed 
    518        827616           4,58,000/ Jain Co                       Sharma            Vinod Bala              Ex. PW50/89
                                                                         Enterprises       Sachdeva 
    519        833404           6,79,000/ Jain Co                       Mohan Das         Rajiv Jain              Ex. PW50/90
                                                                         and 
                                                                         Company
    520        827949           2,66,000/ Jain Co                       Shiv Shakti       V.K. Gujral             Ex. PW50/91
                                                                         Udyag 
    521        827948           6,93,500/ Jain Co                       Mohan Das         V.K. Gujral             Ex. PW50/92
                                                                         and 
                                                                         Company
    522        833405           5,15,000/ Jain Co                       Sharma            Rajiv Jain              Ex. PW50/93
                                                                         Enterprises
    523        827917             55,000/ Jain Co                        Mohan Das  V.K. Gujral                   Ex. PW50/94
                                                                         and 
                                                                         Company
    524        827991           1,43,000/ Jain Co                       Mohan Das         Rajiv Jain              Ex. PW50/95
                                                                         and 
                                                                         Company
    525        827914             90,000/ Jain Co                       Mohan Das         Rajiv Jain              Ex. PW50/96
                                                                         and Co.
    526        827986           1,00,000/ Jain Co                       Mohan Das         Rajiv Jain              Ex. PW50/97
                                                                         and Co.
    527        827985           7,75,500/ Jain Co                       Sharma            Rajiv Jain              Ex. PW50/98
                                                                         Enterprises 
    528        172002           1,75,000/ Supreme Traders               Mukesh Jain V.K. Gujral                   Ex. PW50/99
    529        172007           3,65,000/ Supreme traders               Mukesh Jain V.K. Gujral                   Ex. PW50/100
    530        172008           3,00,000/ Supreme traders               Mukesh Jain V.K. Gujral                   Ex. PW50/101
    531        172009           1,50,000/ Supreme traders               Mukesh Jain V.K. Gujral                   Ex. PW50/102
    532        366140           3,65,000/                               Duro              V.K. Gujral             Ex. PW50/103
                                                                         Marketing 
                                                                         Pvt. Ltd.
    533        365408           9,00,000/                               Duro              V.K. Gujral             Ex. PW50/104
                                                                         Marketing 
                                                                         Pvt. Ltd
    534        366133           1,50,000/                               Duro              V.K. Gujral             Ex. PW50/105
                                                                         Marketing 
                                                                         Pvt. Ltd
    535        366136           1,75,000/                               Duro              V.K. Gujral             Ex. PW50/106
                                                                         Marketing 
                                                                         Pvt. Ltd.
    536        366137           2,55,000/                               Duro              V.K. Gujral             Ex. PW50/107
                                                                         Marketing 
                                                                         Pvt. Ltd


CC No. 42/12 (25/16)                        06.07.2018                                                       63 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            64

Docu        Cheque         Amount            Issued by                  Favouring         Signatures of            Documents
ment         No.            (Rs.)                                                          bank official            exhibited as
No.                                                                                        who passed 
    537        366132           3,75,000/                               Duro              V.K. Gujral             Ex. PW50/108
                                                                         Marketing 
                                                                         Pvt. Ltd
    538        366131           1,25,000/                               Duro              V.K. Gujral             Ex. PW50/109
                                                                         Marketing 
                                                                         Pvt. Ltd



   Doc      Date of             Amount (Rs.)         Details of vouchers            Identification of          Exhibited as
   No.      Payinslip/                             through which                  the signature / 
            Voucher                                  cheques deposited at           initials of passing 
                                                     UBI Sadar Bazar                bank officer
   430       22.04.2007              8,50,000/              736523                 V.K Gujral                 Ex.PW50/110
   440       19.05.2007              7,75,840/              736547                 Bank has cleared           Ex.PW50/111
   445       28.05.2007              8,95,756/              736554                 V.K. Gujral                Ex.PW50/112
   446       31.05.2007              7,68,700/              736555                 M.P. Chopra                Ex.PW50/113
   447       31.05.2007              7,92,850/              736557                 M.P. Chopra                Ex.PW50/114
   448       01.06.2007             12,80,745/              736561                 M.P. Chopra                Ex.PW50/115
   449       05.06.2007             11,90,250/              736563                 M.P. Chopra                Ex.PW50/116
   450       07.06.2007             14,75,600/              736566                 M.P. Chopra                Ex.PW50/117
   451       12.06.2007             13,47,850/              736564                 M.P. Chopra                Ex.PW50/118
   452       15.06.2007             19,80,975/              736572                 M.P. Chopra                Ex.PW50/119
   454       19.06.2007             19,75,680/              736576                 M.P. Chopra                Ex.PW50/120
   455       20.06.2007              8,45,675/              736577                 M.P. Chopra                Ex.PW50/121
   456       23.06.2007             19,35,250/              736583                 M.P. Chopra                Ex.PW50/122
   457       18.06.2007             18,95,985/              736573                 M.P. Chopra                Ex.PW50/123
   458       30.06.2007             18,96,500/              736587                 M.P. Chopra                Ex.PW50/124
   459       21.06.2007             16,88,965/              736579                 M.P. Chopra                Ex.PW50/125
   460       26.06.2007             18,75,980/              736580                 M.P. Chopra                Ex.PW50/126
   461       27.06.2007             18,90,240/              736587                 M.P. Chopra                Ex.PW50/127
   462       01.07.2007             18,85,950/              736597                 M.P. Chopra                Ex.PW50/128
   463       12.07.2007              6,27,450/              736598                 M.P. Chopra                Ex.PW50/129
   464       16.07.2007             17,85,675/              770305                 M.P. Chopra                Ex.PW50/130
   465       12.10.2007              6,45,750/              770331                 M.P. Chopra                Ex.PW50/131
   466       15.10.2007             10,95,725/              770333                 Mrs. Vinod Bala            Ex.PW50/132
                                                                                    Sachdeva
   312       30.6.2007               7,81,265/             736518                  M.P Chopra                 Ex.PW50/133
   314       22.06.2007              2,01,000/             166552                  V.K Gujral                 Ex.PW50/134
   315       22.06.2007              5,30,000/             166551                  T.K Chauhan                Ex.PW50/135
   316       28.06.2007             17,96,750/             736588                  M.P Chopra                 Ex.PW50/136
   318       29.06.2007              4,00,000/         Transfer entry              V.K Gujral                 Ex.PW50/137
   320       30.06.2007              9,12,000/             166557                  T.K Chauhan                Ex.PW50/138
   321        02/07/07               6,50,000/      Cheque   voucher   of          M.P Chopra                 Ex.PW50/139
                                                     UBI, Sadar Bazar 
   322         02/07/07             30,00,000/             166559                  Rajeev Jain                Ex.PW50/140
   323         04/07/07             35,00,000/             166562                  Rajeev Jain                Ex.PW50/141
   324         06/07/07             17,85,700/             736505                  M.P Chopra                 Ex.PW50/142
   327         09/07/07              3,96,000/             166565                  T.K Chauhan                Ex.PW50/143




CC No. 42/12 (25/16)                        06.07.2018                                                       64 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
                                                            65

   Doc      Date of             Amount (Rs.)         Details of vouchers            Identification of          Exhibited as
   No.      Payinslip/                             through which                  the signature / 
            Voucher                                  cheques deposited at           initials of passing 
                                                     UBI Sadar Bazar                bank officer
   328         10/07/07             14,65,700/      UBI, S. Bazar cheque           M.P Chopra                 Ex.PW50/144
                                                     voucher
   329        11/07/07              15,45,750/              770501                 M.P Chopra                 Ex.PW50/145
   333        12/07/07              12,20,750/              736599                 M.P Chopra                 Ex.PW50/146
   334       24.07.2007             15,65,690/              770307                 M.P Chopra                 Ex.PW50/147
   336       26.07.2007              8,00,000/              166586                 V.K Gujral                 Ex.PW50/148
   337       13.08.2007              6,40,000/              876153                 T.K Chauhan                Ex.PW50/149
   338       19.10.2007              2,50,000/              770341                 M.P Chopra                 Ex.PW50/150
   339       22.10.2007              1,65,000/              172003                 V.K Gujral                 Ex.PW50/151
   341       24.10.2007              2,06,790/              770344                 M.P Chopra                 Ex.PW50/152
   342       26.10.2007              2,12,000/              172005                 V.K Gujral                 Ex.PW50/153
   343       29.10.2007              2,11,570/              770346                 M.P Chopra                 Ex.PW50/154
   345        12/07/07              15,00,000/      23507   Discounted             M.P Chopra                 Ex.PW50/155
                                                     debit  voucher 
   346       19.07.2007             15,00,000/      39015 and  discounted          V.K. Gujral                Ex.PW50/156 and
                                                     voucher                                                   Ex.PW50/157
   347       19.07.2007              7,85,000/              166583                 T.K Chauhan                Ex.PW50/158
   349       21.07.2007              2,26,000/              166584                 T.K Chauhan                Ex.PW50/159
   350        09/06/07              13,47,850/      UBI,   Sadar   Bazar           V.K Gujral                 Ex.PW50/160 and
                                                     cheque   voucher   and                                    Ex.PW50/161
                                                     discounted voucher 
    352        07/07/07              6,50,000/              832449                 T.K Chauhan                Ex.PW50/162
    353          Nil                 8,78,000/              833448                 T.K Chauhan                Ex.PW50/163
    354        03/07/07              4,92,000/              833451                 T.K Chauhan                Ex.PW50/164
    356        04/07/07             18,96,000/              615810                 T.K Chauhan                Ex.PW50/165
    357        04/07/07              2,94,300/              833453                 T.K Chauhan                Ex.PW50/166
    358        04/07/07              9,50,000/              833452                 T.K Chauhan                Ex.PW50/167
    359        04/07/07              9,90,000/      Credit voucher                 Rajeev Jain                Ex.PW50/168
    361        04/07/07              9,80,000/              833456                 T.K Chauhan                Ex.PW50/169
    362        04/07/07              1,70,000/              833457                 Smt. Vinod Bala            Ex.PW50/170
                                                                                    Sachdeva
    365        01/08/07             25,00,000/      3 Discounted voucher          V.K Gujral                 Ex.PW50/171 , 
                                                     cleared, 39125                                            Ex.PW50/172 and
                                                                                                               Ex.PW50/173
    367        01/08/07              8,01,000/      Credit voucher                 T.K Chauhan                Ex.PW50/174
    368        01/08/07              5,00,000/      Credit Voucher                 T.K Chauhan                Ex.PW50/175
    369        01/08/07             10,80,000/      Credit Voucher                 T.K Chauhan                Ex.PW50/176
    370        08/08/07             10,00,000/      2          discounted          V.K Gujral                 Ex.PW50/177 and
                                                     vouchers, 39188                                           Ex.PW50/178

He stated that the above cheques and amounts referred in the vouchers were passed/cleared. He proved the memo Ex.PW50/E1 (D673) vide which he handed over the same to IO which also included statement of account of Kwality Enterprises a/c no. 00131010006610 and Mukesh Kumar CC No. 42/12 (25/16) 06.07.2018 65 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Jain a/c no. 00132151001220 maintained in Oriental Bank of Commerce, Darya Ganj Branch Ex.PW50/E2 (D682). PW61 T K Chauhan was officer ScaleI in Oriental Bank of Commerce Darya Ganj branch from 2003 to 2008. He proved the account opening form of M/s Supreme Traders, proprietor Mukesh Jain, bearing No. 00131011000663 Ex. PW 42/B2 and specimen signature card Ex. PW 2/B. He stated that the account was introduced by M/s JainCo, Account No. 5327. He stated that an account No. 00132151001220 was opened in the name of Mukesh Jain on 20.06.2007 vide account opening form Ex. PW 61/D and specimen signature card Ex. PW 61/C (D467) and at that time, Mukesh Jain had submitted copy of PAN Card, passport and customer profile Ex. PW 61/D1 to D6 (part of D467).

Witnesses from Oriental Bank of Commerce, Laxmi Nagar :

PW10 Manpal Singh was Manager in Oriental Bank of Commerce, Laxmi Nagar branch. He handed over to CBI the original account opening form Ex. PW 10/C (D309) and specimen signature card Ex. PW 10/B (D309) in respect of CA No. 04881011003206 of Kwality Enterprises R82, Ramesh Park, Laxmi Nagar, Delhi, proprietor V Sathyapalan maintained with Oriental Bank of Commerce, Laxmi Nagar branch, Delhi along with the photocopies of PAN card Ex. PW 10/C1 and electricity bill Ex. PW 10/C2 of V. CC No. 42/12 (25/16) 06.07.2018 66 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Sathyapalan along with the statement of account Ex. PW 10/E (D310). He stated that the account was opened on 04.05.2007 by the proprietor V Sathyapalan of M/s Kwality Enterprises and the applicant was introduced by JainCo OD NO. 5327, address 2646, Ballimaran, Delhi. He also proved the seizure memo dated 13.12.2008 Ex. PW 10/A (D308).

PW51 Smt. Rita Mukherjee was officiating special assistant in Oriental Bank of Commerce Laxmi Nagar Branch in 2007. She stated that M/s Kwality Enterprises had issued a cheque no. 615821 dated 03.07.2007 for Rs. 40,000/ (Ex.PW51/A) in favour of Vinod Khanna. It was presented in the Canara Bank Munirka and cleared by the bank.

Witnesses from Oriental Bank of Commerce, Service Branch :

PW11 Sandeep Shankar Bagchi was Special Assistant, OBC, service branch, New Delhi. He stated that a cheque for Rs.16,000/ vide dated 20.06.2007 Ex. PW 11/A (D351) was issued in favour of Vinod Khanna drawn on Oriental Bank of Commerce Darya Ganj branch from OD Account No. 5327 of M/s JainCo. The cheque was presented in Canara Bank, Munirka branch by the party and had come up for clearance in his branch.

PW46 Ms. Sucheta Tandon was Manager, in Oriental Bank of Commerce, Service Branch, Karol Bagh where the cheques of different branches of Oriental Bank Of CC No. 42/12 (25/16) 06.07.2018 67 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Commerce were cleared. She stated that the cheques Ex.PW40/B1 to Ex.PW40/B34 were received for clearing. They were issued from the account of M/s Shiv Shakti Udyog with Oriental Bank of Commerce, Preet Vihar Branch in favour of Duro Marketing Pvt. Ltd except the three cheques Ex.PW40/B28, Ex.PW40/B33 and Ex.PW40/B34 which were in favour of Karan Jain, JainCo and JainCo. She stated that the cheques were of the dates between 01.05.2007 to 29.08.2007.

Witness from Oriental Bank of Commerce, Chawri Bazar :

PW17 Anil Kumar Jain was working as Senior Manager, Oriental Bank of Commerce, Chawri Bazar branch from July 2005 to September, 2010. He stated that D K Bhargava was the owner of the building in which the bank was situated. M/s Duro Marketing Pvt. Ltd had opened a current account No. 00151011001439 Ex. PW 17/B (D627) in the branch on 17.10.2006. Mukesh Jain and Anil Dhall were the directors and authorized signatories of M/s Duro Marketing Pvt. Ltd.

They had signed the application form Ex. PW 17/B in his presence at the time of the opening of the account. D K Bhargava, the landlord, had introduced Mukesh Jain and Anil Dhall. D K Bhargava, proprietor of Kishori Lal agency also had a current account No. 21425 in his bank. He stated that Mukesh Jain and Anil Dhall had submitted the original copy of resolution Ex. PW 17/C at the time of opening of CC No. 42/12 (25/16) 06.07.2018 68 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

account along with the supporting documents in respect of their identities, address proof i.e. copies of telephone bill, PAN Card, driving licence of Mukesh Jain, copy of passport of Anil Dhall, customer relationship officer, memorandum and articles of association duly attested Ex. PW 17/D1 to Ex. PW 17/D9 (D627 page 838). He also proved the statement of account Ex. PW 17/F (part of D628 running into five pages). He stated that no limit/ any type of facility was given by his bank to M/s Duro Marketing Pvt Ltd and the account of M/s Duro Marketing Pvt. Ltd was closed in his tenure.

Witnesses from Oriental Bank of Commerce, Shahdara :

PW38 Harnam Singh was officer in Oriental Bank of Commerce, Shahdara branch from 2006 to November, 2009. He handed over the original account opening form and specimen signature card in respect of current account No. 02551011002265 in the name of M/s Sharma Enterprises, (Proprietor Ashok Bharti) at 2651, Balli Maran, Delhi maintained with Oriental Bank of Commerce, Shahdara branch Ex. PW 38/B collectively (D540, five pages), cheques for different amounts in favour of Duro Marketing Pvt. Ltd Ex. PW 38/C1 to Ex.PW 38/C34 (D541 to D574), in favour of Jainco Ex. PW 38/C35 (D575), in favour of Karan Jain Ex. PW 38/C36 (D576) and in favour of Madan Ex. PW 38/C37 (D577). He stated that the above cheques were issued from the account of Sharma Enterprises. He CC No. 42/12 (25/16) 06.07.2018 69 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

handed over the Statement of Account of the period from 01.04.2007 to 31.12.2007 Ex. PW 38/F (D582), four pages).

PW43 Praveen Kumar Jain was officer in Oriental Bank of Commerce, Shahdara Branch from January, 2006 to May, 2010. He deposed on the lines of PW38. He stated that vide memo dated 05.03.2009 Ex. PW 43/A (D670), the cheque issued by M/s Sharma Enterprises in favour of M/s Duro Marketing Pvt. Ltd for Rs.8,00,000/ Ex. PW 43/B (D671) and self cheque Ex. PW 43/C (D672) issued by M/s Sharma Enterprises for Rs.20,000/ passed for clearance were handed over to the IO. He stated that cheque Ex. PW 38/C1 (D577) was issued in favour of Madan who had signed on the back of the bearer cheque.

Witnesses from Oriental Bank of Commerce, Preet Vihar :

PW40 Shri Kishan Singh was posted as an officer in Oriental Bank of Commerce, Preet Vihar branch on 27.02.2009. He handed over 36 cheques Ex. PW 40/B1 to Ex. PW 40/B36 (D590 to D625) to the IO vide memo Ex.

PW 40/A. He also handed over the credit vouchers, part of cheques D624 and D625 vide memo Ex. PW 40/A exhibited as Ex. PW 40/C1 and Ex. PW 40/C2 (part of D 624 and D625).

PW 44 Mukesh Chandra was Officer in Oriental Bank of Commerce, Preet Vihar Branch from 2006 to 2009. He handed over documents to the IO vide memo Ex.PW44/A CC No. 42/12 (25/16) 06.07.2018 70 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

(D583). He proved the account opening form Ex.PW44/B (D584) and specimen signature card Ex.PW44/B1 (D584) in respect of current account no. 12001011001647 in the name of Shiv Shakti Udyog, Proprietor Ashok Bharti. He stated that the account was opened on 24.04.2007 on the introduction of M/s JainCo, A/c no. OD 5327, Ballimaran of which Mukesh Jain was the proprietor. At the time of opening of account, Ashok Bharti had submitted election I Card Ex.PW44/B2 and PAN Card Ex.PW44/B3 (D584). He correctly identified the accused Ashok Kumar @ Ashok Bharti. He also prepared the Customer Profile Sheet Ex.PW44/B4 (D584).

He proved the account opening form Ex.PW44/C (D

585) and specimen signature card Ex.PW44/C1 (D585) in respect of current account no. 12004011000092 in the name of M/s Mohan Dass and Co., Proprietor V.S. Pillai. He stated that the account was opened on the introduction of M/s Mohan Dass and Co., A/c no. 12001131001923. At the time of opening of account, V.S. Pillai had submitted PAN Card and electricity bill Ex.PW44/C2 and Ex.PW44/C3 (D585). He correctly identified the accused V.S. Pillai. He also prepared the Customer Profile Sheet Ex.PW44/C4 (D585). He stated that the above account was opened on 04.06.2007.

He also proved the account opening form Ex.PW44/D (D586) and specimen signature card Ex.PW44/D1 (D586) in respect of OD account no. 12001011000235 in the name CC No. 42/12 (25/16) 06.07.2018 71 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

of M/s Mohan Dass and Co., Proprietor V.S. Pillai. He stated that the account was opened on the introduction of M/s Mohan Dass and Co., A/c no. 12001131001923. At the time of opening of account, V.S. Pillai had submitted PAN Card and electricity bill Ex.PW44/D2 and Ex.PW44/D3 (D

586). He correctly identified the accused V.S. Pillai. He also prepared the Customer Profile Sheet Ex.PW44/D4 (D586).

He handed over the statement of accounts of M/s Shiv Shakti Udyog Ex.PW44/F (part of D731) for the period from 01.04.2007 to 31.12.2007 and M/s Mohan Dass and Co. Ex.PW44/G (part of D732) a/c no. 12004011000092 for the period from 01.04.2007 to 31.12.2007 (account closed on 23.07.2007) and of Mohan Dass and Co. Ex.PW44/H (part of D733) 12005011000235 for the period from 01.04.2007 to 31.12.2007.

He stated that cheques Ex.PW40/B35 (D624) for Rs. 1,52,000/ and Ex.PW40/B36 (D625) for Rs. 6,48,000/ were issued from the account of M/s Kwality Enterprises, OBC Laxmi Nagar in favour of M/s Mohan Dass and Co. and they were credited in the OD account of Mohan Dass and Co. vide credit vouchers Ex.PW40/C1 and Ex.PW40/C

2. He stated that the documents reflect that the cheques from the account of M/s Kwality Enterprises maintained in OBC, Laxmi Nagar were issued by the same person i.e. V.S. Pillai who had deposited the cheques in the OD account of M/s Mohan Dass and Co. maintained in OBC, Preet Vihar, Delhi.

CC No. 42/12 (25/16)                        06.07.2018                                                       72 of 272
RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi                                                          CBI vs. Mukesh Jain & Ors.
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On being crossexamined, he admitted that the account in the name of Sharma Enterprises in OBC, Shahdara was opened on 06.03.2006 vide account opening form Ex.PW38/B and the account in the name of Shiv Shakti Udyog was opened on 24.04.2007 vide account opening form Ex.PW44/B1. He denied that the photographs on Ex.PW38/B (part of D540) and on Ex.PW44/B1 (Part of D584) are the photographs of the one and the same person.

He admitted that at the time of opening of account, V.S. Pillai had given copy of PAN Card and electricity card. He admitted that Ex.PW44/C3 (Part of D585) was the electricity bill for the month of December, 2008. He then explained that there could be possibility that the bill and documents of identity proof of the account holder were taken later. He stated that CC account and OD account of Mohan Dass and Co. were the loan accounts. He admitted that with the account opening form Ex.PW44/D, the electricity bill for the month of December, 2008 Ex.PW44/D3 was given. He stated that he cannot tell if CC account in the name of Mohan Dass & Co. opened vide application Ex.PW44/C was for the personal loan of Rs. 5,00,000/. He stated that the statement of account Ex.PW44/G reflects that it was closed on 23.07.2007 and after its closure, OD account was started. He stated that it is not clear whether OD account was in continuation of closed CC account or it was a separate OD account. He stated that in the statement of account CC No. 42/12 (25/16) 06.07.2018 73 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Ex.PW44/G, none of the transaction prior to the period 03.06.2007, between 01.04.2007 to the end of May, 2007 has been shown.

Witnesses from Nainital Bank, Jagriti Enclave :

PW16 TVS Baba was Assistant Manager in Nainital Bank Ltd, Jagriti Enclave branch, Delhi. He stated that he had dealt with the opening of the current bank account No. 1008 of Shiva Sales Corporation, 68A, Kishan Kunj Extension, Laxmi Nagar, Delhi through its proprietor V S Pillai in the branch. He proved the account opening form dated 10.09.2005 Ex. PW 16/A (D579). He stated that V S Pillai himself had come in the bank and signed the account opening form bearing his photograph. He stated that V S Pillai had submitted photocopy of his election I card and PAN card at a later stage and its original were also shown to him but at the time of opening of account, he had not submitted his identity proof as the branch was newly opened. He also proved the statement of account Ex. PW 16/C (D580). He stated that the account was not introduced by any introducer since it was a new branch and no introducer was available. He identified the accused V S Pillai in the Court.

PW59 Rahul Shah was the scaleI officer in Nainital Bank, Jagriti Enclave, Vikas Marg. He handed over the documents Ex. PW 16/A to Ex. PW 16/C to the IO vide memo Ex. PW 59/A (D578).

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Witnesses from Andhra Bank, R.K. Puram :

PW47 Kotagiri Sudhagar was the Senior Manager in Andhra Bank R.K. Puram Branch from 2007 to 2008. He stated that M/s Duro Marketing Pvt. Ltd had a current account no. 23728 which was opened on 04.06.2007. The account was opened by Mukesh Jain of M/s Duro Marketing Pvt. Ltd vide account opening form Ex.PW47/B (D688 page 5). As per the account opening form Ex.PW47/B R.G. Mundkur was the other director. He had come with the accused Mukesh Jain when the account was opened. He identified the accused Vinod Khanna as R.G. Mundkur. He stated that Mukesh Jain and R.G. Mundkur had signed on the account opening form in his presence. He identified their photographs on the form Ex.PW47/B and their signatures on the specimen signature cards Ex.PW47/B1 and Ex.PW47/B2. He stated that they had submitted resolution of board of directors, Memorandum of Articles of Association, copy of passport of Mukesh Jain, copy of election I Card of R.G. Mundkur, copy of form 32 of R.G. Mundkur, copy of PAN card of Duro Marketing Pvt. Ltd Ex.PW47/B3 to Ex.PW47/B8 respectively. He also proved the statement of account of M/s Duro Marketing Pvt. Ltd for the period from 04.06.2007 to 01.10.2007 Ex.PW47/C (D

689). He denied that accused Vinod Khanna never met him nor came in the bank nor signed the account opening form nor put his signature on the specimen signature card in the CC No. 42/12 (25/16) 06.07.2018 75 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

name of R.G. Mundkur. He stated that accused Mukesh Jain had introduced Vinod Khanna as R.G. Mundkur. He stated that he does not know if Vinod Khanna was nominee in the account of his daughter and father in law being maintained in Andhra Bank, R.K. Puram Branch. He denied that Mukesh Jain never came to him nor visited the bank. He admitted that a letter was received from Union Bank of India, Sadar Bazar Branch in his branch for closure of account of M/s Duro Marketing Pvt. Ltd and the account was closed on 01.10.2007.

Witnesses of Valuation report/legal search report:

PW15 Krishan Gopal Saini was the registered valuer on the panel of Union Bank of India since 1999. He on the request of the Branch Manager Union Bank of India, Sadar Bazar branch submitted the valuation report in respect of Property No. A52, Vasant Marg, Vasant Vihar New Delhi vide dated 30.03.2007 Ex. PW 15/A (D30). He stated that he had inspected the site on 29.03.2007 in the presence of the Bank Manager M C Aggarwal and the representative of the party. He stated that the property was clearly identifiable. He stated that the Advance Manager J.B Handa Union Bank of India, Sadar Bazar branch had shown him the title documents i.e perpetual lease deed and NOC from the authority in respect of the above property before his inspection. At the time of inspection, it was a vacant built up CC No. 42/12 (25/16) 06.07.2018 76 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

residential property not occupied by anyone appeared to be dusty and dirty. He had enquired the rates of the land from the nearby property dealers and assessed the market rate at Rs.1,20,000/ per sq. yard.

PW33 Hamesh Madan was the Chartered Accountant in Hamesh Madan & Associates at Maya Puri. He handed over a file Ex. PW 33/B (D516, Page 120) maintained by them in respect of M/s Duro Marketing Pvt Ltd to CBI vide memo Ex. PW 33/A (D515). He stated that he had conducted the audit of M/s Duro Marketing Pvt Ltd on the request of Anil Dhall for the year 20062007 vide Ex. PW 33/B (Page 15 to

29). He had also signed the balance sheet at page 30 of Ex.

PW 33/B pertaining to M/s Duro Marketing Pvt Ltd which also bears the signature of Mukesh Kumar Jain and one Ram Gopal Mundkur. He however stated that they had not signed in his presence. He stated that Anil Dhall used to come and meet him in relation to the work of M/s Duro Marketing Pvt. Ltd. Anil Dhall, Ram Gopal Mundkur and Mukesh Jain were the directors of M/s Duro Marketing Pvt Ltd. He, however never met Mukesh Jain and Ram Gopal Mundkur nor knows them. He was confronted with the audit report Ex. PW 33/C (D483 five pages) of M/s Duro Marketing Pvt Ltd for the year 20062007. He stated that the report does not bear his signature nor his office seal nor it was prepared by him or his office and it appears that someone forged the said report.

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PW57 Aditya Madan was the panel advocate of Union Bank of India. He stated that on the instructions received from the accused M C Aggarwal, he collected the photocopies of the documents of the property at A52, Vasant Marg, Vasant Vihar, New Delhi. He also visited the office of SubRegistrar, made enquiry and submitted his report/legal search report Ex. PW 57/A (D18) wherein he had mentioned that permission be obtained from DDA for mortgaging the property being a leasehold property. He stated that he had checked the chain of title documents while preparing the report. He, however, stated that he did not inspect the property personally. As regards difference in the registration number in the copy of sublease deed, he stated that it might have been overlooked.

Witnesses of VAT/Sales Tax Department :

PW18 Vijay Bhardwaj was the Value Added Tax Officer. He stated that the firms/companies which have turnover more than Rs.10 lacs per annum are mandatorily required to be registered with the Trade and Tax Department and to file return as per DVAT Act, 2004. He stated that M/s JainCo, 2646 Balli Maran, Delhi registration No. 146172 was registered vide certificate Ex. PW 18/B. It had filed the returns Ex. PW18/C, D and E in the name of M/s Duro Marketing Pvt Ltd against the same PIN and same address for the period from 01.04.2007 to 31.12.2007. The CC No. 42/12 (25/16) 06.07.2018 78 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

registration of the company was cancelled w.e.f 16.02.2009 for not filing the returns. He stated that on the request of CBI, Inspector Vijay Singh Ward No. 223 Balli Maran had inspected and submitted the report about M/s Supreme Traders, 2645, Balli Maran Delhi, M/s Sharma Enterprises, 2051 Balli Maran, Delhi and M/s Shiv Shakti Udyog, 2051 Balli Maran Delhi interalia that the said firms did not exist at the given address nor the above firms were registered with Trade and Tax Department for VAT.

On being crossexamined, he stated that it is not mandatory for a firm to get registered with the department of Trade and Tax if it is dealing with nontaxable items. PW19 Sunil Kumar Gupta was UDC in Ward No. 80, Department of Trade and Taxes in the year 2006. He stated that as per the record, firms namely M/s Kwality Enterprises, R82/5 Ramesh Park Laxmi Nagar, proprietor V S Pillai/ V. Sathyanaryan and M/s Shiva Sales Corporation, 68A, Kishan Kunj Extension, Laxmi Nagar, proprietor V S Pillai were not registered in ward No. 80 of Department of Trade and Taxes.

PW21 Vijay Singh was VAT Inspector in Ward No. 23 in Trade and Tax Department in 2009. He deposed on the lines of PW 18.

Witnesses of Raid :

PW22 Pranav Jha was the officer in Canara Bank Circle office Nehru Place in August 2008. He had joined the CBI CC No. 42/12 (25/16) 06.07.2018 79 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

team which raided the house of Anil Dhall at C1/10, Ardee City, Sector56, Gurgaon on 30.08.2008. He stated that from the search of the house, some documents were recovered and seized vide memo Ex. PW 22/A (D2). He identified the documents Ex. PW 22/B (D3 internal pages 192) seized from there.

PW53 Raj Kumar was the Asstt. Manager, Indian Overseas, Rajindra Place Pusa Road in 2008. He on the instructions of the Chief Manager joined the CBI team which conducted the raid in the house of Anil Dhall at Gurgaon. He also witnessed the seizure of documents and the proceedings vide Ex.PW22/A. PW55 D.K. Goswami was the clerkcumtypist in Punjab National Bank, Bhikaji Cama Place in the year 2009. He on the instructions of Chief Manager, joined the CBI team which conducted the raid in the house of the accused Vinod Khanna from where the documents were seized as per search list Ex.PW55/A (D693). He stated that he had also signed on the seized documents i.e. letter of Income Tax Department regarding information pertaining to PAN Card of Vinod Khanna and copy of election I Card of Vinod Khanna Ex.PW55/B and Ex.PW55/C. Witnesses of PAN Card Incharge - Income Tax :

PW24 Praveen Kunj was the Assistant Director in Income Tax office (AIS) in February, 2009. He was also the CC No. 42/12 (25/16) 06.07.2018 80 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

incharge of PAN Section. He stated that PAN No. AGLPK2659M was issued to Vinod Khanna S/o Harbans Lal Khanna R/o B65 Pashchim Marg Vasant Vihar New Delhi. He proved the PAN Card Ex. PW24/A1.

Witnesses of taking specimen signature and handwritings:

PW25 Rajesh Verma was the Assistant Manager, Union Bank of India, Chandni Chowk branch. He stated that on

04.03.2009, Inspector, CBI had taken specimen signatures/ handwritings/initials of Rakesh Khurana S/o Late Sh. Kimti Lal Khurana R/o C22 Parvana Road, Old Govind Pura, Krishna Nagar, Delhi in his presence in the office of CBI vide Ex. PW 25/A (D741, 15 pages S408422).

PW27 Satnam was the Computer Operator, Punjab National Bank, Bhikaji Cama Place branch. He stated that on 19.01.2009, Inspector, CBI had taken specimen signatures/ handwritings/initials of Mukesh Jain S/o Late Sh. K R Jain R/o C4/145 Safdarjung Development Area, New Delhi in his presence in the office of CBI vide Ex. PW 27/A (D734, 13 pages S1 to S13).

PW28 Chander Prakash was the Manager, Union Bank of India, Chandni Chowk branch. He stated that in January, 2009, Inspector, CBI had taken specimen signatures of Mukesh Jain S/o Late Sh. K R Jain R/o C4/145 Safdarjung Development Area, New Delhi in his presence in the office of CBI vide Ex. PW 28/A (D734, S14 to S16, S22 to S CC No. 42/12 (25/16) 06.07.2018 81 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

26, S31 to S37, S43 to S47, S65 to S69, S108 to S

117). He stated that due to lapse of time, he cannot identify the person whose handwritings were taken in his presence. PW29 Mukesh Kumar Verma was the Assistant Manager, Union Bank of India, Chandni Chowk branch. He stated that in January, 2009, Inspector, CBI had taken the specimen signatures of Mukesh Jain S/o Late Sh. K R Jain R/o C 4/145 Safdarjung Development Area, New Delhi in his presence in the office of CBI vide Ex. PW 29/A (D734, S 17 to S21, S27 to S30, S38 to S42, S48 to S64, S72 to S107). He stated that due to lapse of time, he cannot identify the person whose handwritings were taken in his presence.

PW32 S C Malhotra was the Manager, Union Bank of India, Regional office, New Delhi. He stated that on 09.02.2009, Inspector, CBI had taken the specimen signatures/handwriting/initials of Anil Dhall in his presence in the office of CBI vide Ex. PW 32/A (D739, S371 to S

381) and Ex. PW 32/B (D736, S382 to S407).

Witnesses from DDA/Department of Archives:

PW36 Smt. Veena Bhasin had been working as Assistant Archivist, Department of Archives, Govt. of NCT in 2008. She was shown the copy of Perpetual SubLease Deed dated 09.12.1970 registered on 14.12.1970 as document no. 7643 book No. 1, Vol. 2540, page 182188 running into ten pages certified by SubRegistrar III New Delhi in respect of CC No. 42/12 (25/16) 06.07.2018 82 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

property no. A52, Vasant Marg, Vasant Vihar New Delhi Ex. PW 36/B (D128). She stated that the Lease Deed was executed by R G Mundkur S/o Late Sh. Gopal Krishan Mundkur R/o 42 Ashok Road, New Delhi. She also proved the seizure memo of the document Ex. PW 36/A (D127). PW48 Sanjay Garg deposed on the lines of PW36.

PW52 Shyam Singh Rawat was Assistant in DDA Vikas Sadan INA. He handed over file Ex.PW52/B (D134 comprising of note sheets pages 1 to 29 and correspondence pages 1 to 171) in respect of plot no. A52, Vasant Marg, Vasant Vihar maintained by DDA to the IO vide memo Ex.PW52/A (D133). He stated that as per the record, plot no. 52 Vasant Marg, Vasant Vihar measuring 1048 sq.yds was allotted to R.G. Mundkur s/o late Gopal Krishan Ram Mundkur R/o42, Ashoka Road, New Delhi on lease hold basis vide sublease dated 09.12.1970 executed between DDA society and R.G. Mundkur (internal page 311 Ex.PW52/C.) R.G. Mundkur had given an affidavit on 06.01.1968 to DDA giving his age as 61 years. (internal page no. 13 Ex.PW52/B). He stated that as per the record, a complaint was received from the society that the above plot has been sold under Power of Attorney to Major P.S. Mehalawat. He stated that since the permission was not taken for the sale of the above plot, Hon'ble Lt. Governor vide order dated 14.12.1988 determined / terminated the sublease deed of R.G. Mundkur. DDA and a notice vide CC No. 42/12 (25/16) 06.07.2018 83 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

letter dated 02.01.1989 (internal page 74) was issued to R.G. Mundkur to hand over the possession. He stated that since R.G. Mundkur did not hand over the possession, eviction notice was issued by the DDA and exparte possession was taken by DDA on 13.01.1989 (internal page 77, 78)He stated that on 16.06.1997 a notice was received by DDA from the Advocate of Major P.S. Mehalawat not to take any action in respect of the above plot since the matter was subjudice in the High Court. He stated that Major P.S. Mehalawat died on 27.07.1996 and his LRs initiated further proceedings.

He stated that the State Bank of India vide letter dated 23.02.2006 had requested DDA to give permission for mortgaging the above plot on behalf of R.G. Mundkur, Director of M/s Duro Marketing Pvt. Ltd. Along with the letter (internal page 105), copy of sublease deed was attached (internal page 93 to 102) on which the registration number of the office of SubRegistrar was mentioned as 76435 whereas as per the DDA record, the registration number was 7643. He stated that DDA vide letter dated 28.03.2006, (internal page 107 Ex.PW52/F) informed R.G. Mundkur that permission cannot be granted to mortgage the property as the sub - lease deed had already been cancelled. He stated that reminders dated 18.05.2006 and 23.08.2006 were received from State Bank of India (internal page 123 and 136) for the permission and DDA vide letter dated 26.09.2006 (Internal page 137) had informed the bank that CC No. 42/12 (25/16) 06.07.2018 84 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

sublease has already been cancelled and permission cannot be granted.

He stated that Sanjeev Kumar, Dy. Director LA DDA, never signed any letter dated 16.04.2007 (D19) in favour of R.G. Mundkur giving permission to mortgage the plot no A 52 with Union Bank Of India, Sadar Bazar Branch and it is a forged document being not on the format used by DDA.

He admitted that DDA did not lodge any complaint with the police after receiving the above mentioned forged documents.

PW62 Sanjeev Kumar was the Deputy Director, Lease Administration branch (residential) in DDA from 2005 to May, 2008. He stated that he never issued the letter dated 16.04.2007 Ex. PW 62/A (D19) nor the said letter bears his signature. He stated that someone forged this letter as the permission granted in the favour of R G Mundkur for mortgaging the property bearing No. A52, Vasant Marg, Vasant Vihar, New Delhi with Union Bank of India, Sadar Bazar branch. He stated that no such permission was ever granted by him and his official seal was also forged on that letter. He stated that R K Sharma was never the Deputy Director LA (Residential) in DDA on 30.01.2006 and the letter Ex. PW 62/B dated 30.01.2006 is also a forged letter qua the permission in favour of R G Mundkur to execute mortgage in respect of above property in favour of State Bank of India, Hauz Qazi branch, New Delhi.

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Witness of business dealings with Mukesh Jain, JainCo & Duro Marketing Pvt. Ltd:

PW30 Gyan Chand Jain has stated that since the year 1990, he has been running the business in the name and style of Panama Poly Products Pvt. Ltd at B8, UPSIDC, Ghaziabad. Sanjay Jain, his cousin and Ms Vijay Jain, his wife are the other directors. M/s JainCo was one of their consignee agents. They had been dealing with Mukesh Jain, director of Duro Marketing Pvt Ltd/JainCo. He (Gyan Chand Jain) has another company namely M/s Juhi Firm Pvt. Ltd at Punjab. He stated that M/s Duro Marketing Pvt Ltd were consignee agents of M/s Juhi Foam Pvt. Ltd for more than 15 years. The account of M/s Juhi Foam Pvt Ltd was in Andhra Bank, R K Puram branch and State Bank of India Hauz Qazi branch. Mukesh Jain had introduced their bank account in State Bank of India Hauz Qazi branch. He had issued cheques in favour of M/s Duro Marketing Pvt Ltd in the year 20072008 from the above account maintained in Andhra Bank, R K Puram branch and State Bank of India, Hauz Qazi branch on behalf of the companies. In 2008, they had settled the account of Juhi Foam Pvt. Ltd with M/s Duro Marketing Pvt Ltd.

Employees of Mukesh Jain :

PW58 Gulam Sarvar had been working in the godown of Mukesh Jain at 2646, Ballimaran, Chandni Chowk New CC No. 42/12 (25/16) 06.07.2018 86 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Delhi. He stated that Mohd. Faiyaz Alam had been working with him. He stated that Mukesh Jain had a business in the name and style of M/s Duro Marketing Pvt. Ltd dealing in foam material. There was no other firm of Mukesh Jain except the above firm at Balli Maran Chandni Chowk or nearby vicinity. He stated that he never heard about the firm M/s Supreme Traders. He stated that he knows the accused Ashok Bharti. He used to live at Balli Maran, Chandni Chowk and visit Mukesh Jain. He however does not know the names of the firms of the accused Ashok Bharti. He stated that he does not know Anil Dhall and R G Mundkur and cannot say whether they were the partners in M/s Duro Marketing Pvt. Ltd.

PW60 Mohd. Faiyaz Alam deposed on the lines of PW58. He was declared hostile by the prosecution. He denied that Mukesh Jain had given him cash Rs.3.0 - 5.0 lacs on 34 times to give to the accused Mahesh Chand Aggarwal or that after giving him cash, he used to get it confirmed telephonically from the accused Mahesh Chand Aggarwal over the phone of Mukesh Jain. He however admitted that he used to deposit cheques of M/s Supreme Traders in the bank.

Handwriting expert :

PW64 S Ahmed was the Assistant Government Examiner, GEQD, Shimla. He received the specimen signatures /handwritings of the accused Mukesh Jain (S1 to S117), CC No. 42/12 (25/16) 06.07.2018 87 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Vinod Khanna (S118 to S226), Anil Dhall (S227 to S303, S382 to S407 and A1 to A9), Mahesh Chand Aggarwal (S 304 to S316), Ishwar Singh Mehra (S317 to S337), Ashok Bharti (S338 to S353, S371 to S381), V S Pillai (S354 to S370) and Rakesh Khurana (S408 to S422) and their admitted signatures (A10 to A58). He also collected the questioned documents. He examined the questioned signatures/handwritings with the specimen/admitted signatures/handwritings of the above persons and gave his report Ex. PW 64/B (D278).

Witnesses of Sanction:

PW5 S K Gagroo was the General Manager in State Bank of India. He stated that General Manager was the appointing and removing authority of the Branch Manager. He stated that he had accorded the sanction for prosecution of I S Mehra vide order dated 13.07.2009 Ex. PW 5/A on the request of CBI which had forwarded him the statements of witnesses as well as the copies of the documents. He stated that after minutely perusing the statements and the documents, he accorded the sanction.

On being cross examined, he stated that at the time of handing over of charge, a certificate is prepared which is signed by the relieving as well as the relieved officer and it is sent to the immediate controlling office after keeping a copy of the certificate in the branch. He admitted that CC No. 42/12 (25/16) 06.07.2018 88 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

sometimes, the branches work on holidays due to audit etc. He admitted that he did not check from the Hauz Qazi Branch whether on 25.02.2007 i.e. Sunday, the branch was open due to central inspection nor checked from the branch or the regional office whether prior to 25.02.2007 I.S. Mehra had been relieved or not nor he verified personally or through official whether the account of A3 was NPA on that day or not. He denied that he signed the sanction order without considering anything.

PW6 Udai Bal Krishan Rairikar was the General Manager, Union Bank of India. He deposed on the lines of PW5 as to his competence to accord sanction for prosecution of Branch Manager. He stated that on the request received from the CBI which was supported with statements of witnesses and documents, after perusing, he accorded the sanction for prosecution of Mahesh Chand Aggarwal vide order Ex.PW6/A. On being crossexamined, he admitted that in the present case, the final authority of sanction of credit limit was the AGM. He admitted that a group of officers (GRID) had examined the proposal of the CC limits and after their examination, AGM had granted the sanction. He also admitted that Risk Management Department (RMD) had also examined the proposal. He admitted that in other cases also, the loans of other banks were taken over by their banks. He admitted that in this case, the bank had obtained alternate CC No. 42/12 (25/16) 06.07.2018 89 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

property as security but stated that he is not aware if CC loan amount was cleared subsequently after the settlement of account by the sale of the alternate property. He admitted that the officers at regional level are expected to examine the proposal and apply their minds. He denied that he accorded the sanction without applying his mind under the pressure of CBI.

IO CBI :

PW65 Suman Kumar was the Inspector, CBI BS & FC branch, New Delhi in the year 2008. He on the authorization of Inspector Vishal/IO conducted the search in the premises of the accused Anil Dhall on 30.08.2008 and recovered the documents as detailed in the search list Ex. PW 22/A (D2) including the document Ex. PW 22/B (D3).

PW66 Inspector Vishal was the investigating officer of this case. He stated that investigation of this case was entrusted to him on 27.08.2008 after the registration of this case vide FIR Ex. PW 66/A. He conducted the search at different places including at the residence of accused Mukesh Jain but did not find any incriminating material from the residence of Mukesh Jain vide his report Ex. PW 66/B. He stated that the office of M/s Duro Marketing Pvt Ltd was also searched and as per the report Ex. PW 66/C, no incriminating material was found from there. He collected the documents from the banks and the other offices including the audit report dated CC No. 42/12 (25/16) 06.07.2018 90 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

04.05.2006 from State Bank of India, Hauz Qazi branch Ex.

PW 66/Q (D702) vide memo Ex. PW 66/R (D714). He recorded the statement of witnesses and collected the specimen writings and signatures of all the accused persons in the presence of independent witnesses. He stated that the accused persons had given their specimen signatures and handwritings voluntarily. He sent the questioned documents with the admitted handwritings and signatures to GEQD Shimla and collected the report. After the investigation, he prepared the chargesheet Ex. PW 66/U. He also obtained sanction for the prosecution of accused persons Mahesh Chand Aggarwal and Ishwar Singh Mehra.

On being crossexamined, he stated that he does not remember if accused V S Pillai had told him that he had withdrawn Rs.8.0 lacs from the account of Kwality Enterprises and transferred to M/s Mohan Das & Co. or that there was loan account of M/s Mohan Das & Co. from which, loan amount of Rs.9,50,000/ was transferred to the account of Mukesh Jain. He stated that the amount of Rs.8.0 lacs was not recovered from the accused V S Pillai. He admitted that he did not take permission from the court to take the specimen signatures/handwriting of the accused persons nor conducted search at the residence or office of accused V S Pillai. He stated that he did not recover the amount of Rs.1,85,000/, Rs.2,26,000/ and Rs.20,000/ as mentioned in the chargesheet from the accused Ashok CC No. 42/12 (25/16) 06.07.2018 91 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

Bharti. He denied that Ashok Bharti did not receive any amount as consideration for showing favour to the co accused. He stated that the legal search report was obtained by the Sadar Bazar branch on the basis of photocopy of sub lease deed of mortgaged property. He admitted that during investigation, the bank had obtained equitable mortgage of another residential property at C4/145 SDA, New Delhi valued at Rs. 214.50 lacs owned by Smt. Suhash Kumari Jain, mother of Mukesh Jain and it was mortgaged on 17.04.2008. He stated that he cannot say if the above property was sold in auction and sale proceeds (Rs. 3,52,11,546/) were adjusted towards the loan account and no loss was caused to the bank. He admitted that Ashok Bharti and V S Pillai were neither the directors nor the promoters nor the subscribers in M/s Duro Marketing Pvt Ltd nor were the signatories of any of the documents submitted on behalf of M/s Duro Marketing Pvt Ltd. to the bank. He admitted that normally the legal search report of an advocate is relied upon by the bank and there was nothing in the legal search report to doubt or to find out that the advocate had overlooked the details. He admitted that at the relevant time, Core Banking System (CBS) i.e computerized system was operational and exact date about the declaration of account as NPA could be determined from the system. He admitted that he did not check the system to find the exact date of declaration of account as NPA. He stated that he did CC No. 42/12 (25/16) 06.07.2018 92 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

not collect the first quarterly statement from January, 2007 to March 2007 from State Bank of India, Hauz Qazi branch pertaining to M/s Duro Marketing Pvt. Ltd. He admitted that as and when, a bank manager is transferred, a document is prepared in respect of handing over of the charge and relieving of the officer. He also admitted that he did not collect such document showing the relieving of accused Ishwar Singh Mehra from Hauz Qazi branch nor the document showing the joining of accused Ishwar Singh Mehra in Model Town branch.

He was confronted with the photocopy of letter dated 22.01.2009 (D6) received from the State Bank of India, Model Town branch in respect of posting in the said branch as per which the accused I S Mehra was working in Hauz Qazi branch from 12.02.2007 to 27.02.2007. He stated that during investigation, he came to know that the officers were deputed to do the work in different branches on the oral instructions of the senior officers as and when required. He stated that during the investigation, he did not notice any other seal of any subordinate official except the seal of the Branch Manager. He was confronted with the photocopies of the documents (mark D6/X1 running into 13 pages) collected under RTI from the bank showing the accused Ishwar Singh Mehra and other staff members receiving traveling expenses for attending Hauz Qazi branch on 25.02.2007. He stated that the above documents were not CC No. 42/12 (25/16) 06.07.2018 93 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

received by him during the investigation. He was also confronted with the statement of accounts running into three pages bearing the seal of State Bank of India pertaining to M/s Duro Marketing Pvt Ltd at Hauz Qazi branch to which he stated that it did not come to his knowledge that the credit limit in favour of M/s Duro Marketing Pvt Ltd was renewed on 26.02.2007 (vide mark D6/X2 running into three pages).

STATEMENT OF ACCUSED U/S 313 CrPC

24. After completion of prosecution evidence, statements of all the Accused persons were recorded u/s 313 CrPC. Entire incriminating evidence was put to them. They denied all the incriminating evidence brought on record against them and pleaded their innocence.

24.1 Mukesh Jain (A1) for himself and for M/s Duro Marketing Pvt. Ltd (A3) being its authorized representative admitted that M/s Duro Marketing Pvt. Ltd had submitted request proposal/application Ex.PW2/A alongwith documents for grant of capital loan of Rs. 2.0 crores with State Bank of India, but denied that the account had become NPA and that he had met D.K. Bhagawa. He stated that the return for the period from 01.04.2007 to 31.12.2007 was filed by JainCo and thereafter M/s Duro Marketing Pvt. Ltd had filed the return. Since the firm was not dealing in taxable items so it was not got registered with the sales tax department for the purposes of VAT. He stated that Union Bank of India had taken over the account after satisfying CC No. 42/12 (25/16) 06.07.2018 94 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

its viability. He stated that he used to visit Union Bank of India only for official purpose and he did not have any personal dealing with any of the officials of Union Bank of India nor was involved in any criminal conspiracy nor he committed any offence. He further stated that as soon as he came to know about the defect in the mortgaged property, he approached the bank and offered another security/guarantee and paid the entire loan amount and as of now no loan amount is due against him or his firm/company.

24.2 A2 Anil Dhall stated that he never visited State Bank of India, Hauz Qazi Branch. He had given his assets and liability statement to Mukesh Jain on his demand. He was not dealing with the bank. He never operated the account. He never signed any document in the bank nor was the authorized signatory of the account nor had knowledge about the account. A2 further stated that he had resigned from the company on 30.03.2007. He knew that M/s JainCo was converted into M/s Duro Marketing Pvt. Ltd. He further stated that Mukesh Jain used to lookafter all the affairs related to the bank. He was not involved in the financial matters of the company. Earlier he used to visit the office of Mukesh Jain but after he resigned, he never visited the office of Mukesh Jain. He stated that he had appeared before the bank but along with Vinod Kumar or R.G. Mundkur. He was called by Mukesh Jain for helping him in the business which he wanted to do from China and for that purpose, he took his assistance to attend the meetings with the counter parts and CC No. 42/12 (25/16) 06.07.2018 95 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

support him in getting the business from China. They also visited China and got 23 offers for distribution of products in India of the Chinese Companies. He was just an employee and was not involved in the banking operations of M/s Duro Marketing Pvt. Ltd. nor in taking any credit from any bank nor he offered any security except his personal guarantee as requested by Mukesh Jain.

24.3 A4 Vinod Khanna stated that the cheques issued to him were towards the commission which he had earned for making the deals of sale and purchase of fabrics/clothes. He had applied for the PAN Card. In February 2001, he received a letter dated 19.02.2001 from the Income Tax Office wherein his PAN Card number was stated. He, however, did not receive the PAN Card till date. He stated that he never visited the bank nor signed any document with regard to the loan. He stated that he was dealing in the sale and purchase of Fabrics/clothes as a middle man for which he used to get commission from the parties in the form of cash/cheques.

24.4 A5 Mahesh Chand Aggarwal admitted that he was posted as Chief Manager in Union Bank of India, Sadar Bazar Branch. He stated that a letter dated 25.02.2007 was received from State Bank of India, Hauz Qazi Branch. He denied that he used to look after the advance department. He stated that J.P. Handa was the incharge and Manager of Advance Department. He admitted that Duro Marketing Pvt. Ltd (A3) had approached the bank in 2006 for taking over the loan account of State Bank of India, on CC No. 42/12 (25/16) 06.07.2018 96 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

the ground that the bank was not enhancing the credit limit as per the requirement and the company was not satisfied with the services provided by the Bank. He stated that the proposal was sent to the Regional Office along with preinspection report. The proposal was prepared and processed by J.B. Handa, Manager (Advances). He admitted to have visited the property which was to be mortgaged as collateral security and made preinspection visit of the business premises of A3 on 29.12.2006. He stated that after due diligence, the proposal was sent to the Regional Office along with the documents which was scrutinized by the GRID of 45 officers in the regional office and thereafter the proposal was sanctioned. He stated that there was no stipulation in the sanction letter that FDR of Rs. 51.0 lacs would be submitted by the borrower from his own funds (Question No.

47). He stated that A1 had met him once when he had come to open the account on behalf of A3. He stated that the property was already mortgaged with the State Bank of India when the loan was taken over by Union Bank of India. He stated that the legal search was not contrary to the guidelines. He stated that in respect of excess over limits upto Rs. 25.0 lacs, Chief Manager need not report to the higher authority. Beyond the delegated powers, matter is informed to the Regional Office through fortnightly statement F1. He stated that he had performed his duties with due diligence, honestly and bonafidely as per the norms, practice and procedures of the Bank. Mukesh Jain and other Directors of M/s Duro Marketing Pvt. Ltd. were not CC No. 42/12 (25/16) 06.07.2018 97 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

known to him. Ishwar Singh Mehra was also not known to him. Mukesh Jain had approached Sadar Bazar Branch in normal course of business. They recommended the proposal because it complied with the laid down policies of the Bank and the proposal was under the thrust area of lending to finance Traders under Union Trade Scheme of the Bank. He stated that Aditya Madan, Advocate, who was on the panel of Bank for many years (and also the Retainer for Delhi Region of the Bank), did not search the record at Archives Department, Sub Registrar Office. As a result, glaring differences in the lease deed held with the Bank and the lease Deed registered at Sub Registrar Office were not noticed by him and he gave a false Search Report and legal opinion in respect of the property to the Bank. Since Bankers are not the legal experts, they relied on the legal opinion of Mr Madan. As a result, Bank was exposed to the fraud committed by the Directors of the Company. He stated that they took all possible precautions before taking over the account from State Bank of India, Hauz Qazi Branch. They obtained the opinion from State Bank of India about the Account of M/s Duro Marketing Pvt Ltd which informed them that the account is Standard asset and conduct of the account is satisfactory, J.B.Handa, Manager Advances had met PW2 K.D. Sharma, Deputy Manager, State Bank of India twice who was looking after the Advances with the letters D488/1 and D488/2 but K.D. Sharma did not inform J.B. Handa verbally or in writing anything adverse about the account of M/s Duro Marketing Pvt.

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Ltd. He stated that before releasing the limit as a matter of abundant precaution, he personally went to State Bank of India, Hauz Qazi Branch and met A.K.Fotedar, Branch Manager to ensure that the Account being taken over by Union Bank of India is standard asset. A.K. Fotedar did not inform him anything adverse about the account of M/S Duro Marketing Pvt. Ltd. In fact none of the officials of State Bank of India, Hauz Qazi Branch ever informed them in writing or verbally anything adverse about the account of M/s Duro Marketing Pvt Ltd. He stated that B.S. Bartwal, Accountant, Incharge Current Department had verified the signature of introducer of the account and the documents submitted by the Company in respect of opening of the Account as per Bank's Circular AnnexureI of Book of Instructions, Volume III. After completing all the formalities in respect of opening of account, the account opening form was sent to him for authorization in normal course of business and he authorized the same. The proposal of M/s Duro Marketing Pvt. Ltd. was not processed by him. The proposal was processed by PW63 J.B. Handa, as per his duty prescribed under Bank's Circular Annexure I of Book of Instructions, Volume III, Annexures. The proposal was recommended jointly by PW63 J.B. Handa and him to the Regional Office, Delhi. As regards inspection and verification of property no. A52, Vasant Marg, Vasant Vihar, New Delhi mortgaged with the Bank by the Company, he stated that during inspection when he found that no one was living in the property, CC No. 42/12 (25/16) 06.07.2018 99 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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he inquired from the guard present in the house. He informed him that Romanian Embassy was the tenant in the property. It vacated the premises recently. They also inquired from the Govt. Servants Cooperative House Building Society Ltd. Vasant Vihar, New Delhi about the ownership of property. The society had confirmed vide letter D/118/internal page 81 that as per record of the Society, the property is in the name of R.G. Mundkur and the property continues to be under leasehold with D.D.A. The title Deeds of the property were received by J.B.Handa after verification of the identity of Mr. Mundkur from PAN Card and other documents produced by him. He stated that as per Bank's Circular Annexure I of Book of Instructions, Volume III, Annexures, "ensuring proper documentation in respect of all Advances" is the role and responsibility of Incharge of Advances and Cash Credit department who was J.B. Handa PW63 at the point of time. As such, his presence at time of signing of documents by the Directors of M/s Duro Marketing Pvt Ltd and by owner of property R.G.Mundkur was not required. He stated that he was not present when the documents were executed by the Directors of the Company. He stated that all the developments in the account were brought to knowledge of higherups from time to time through letters. The copies of letters were also sent to M/s Duro Marketing Pvt. Ltd. Monthly Monitoring reports D119/ (internal pages 89 to 118) informing the developments in the account were sent to General Manager, F.G.M.O., Delhi. He never suppressed the factual CC No. 42/12 (25/16) 06.07.2018 100 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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position of the account from his higher ups at any point of time. As soon as symptoms of irregularity in the account surfaced, he visited the office of the Company and inspected the records of the Company. During inspection, he found that the Company had opened its Current Account with Andhra Bank, R.K. Puram Branch and diverted the operations in that Account. Immediate action was taken by him by personally meeting A.G.M., Andhra Bank. He got the Account of M/S Duro Marketing Pvt. Ltd. closed at Andhra Bank and informed it and other irregularities in the Account of the Company to his Regional Office vide letter D119 (page 13 to 15). Through his efforts, he got the alternate property in name of Smt Subhash Kumari, mother of Mukesh Jain mortgaged in the account of M/s Duro Marketing Pvt Ltd. This property was sold by the Bank under SARFAESI ACT and the Account of M/s M/s Duro Marketing Pvt. Ltd. was fully adjusted with the proceeds of sale of the property in March 2013. As such, no loss was caused to the Bank. He stated that he never abused his official position nor violated any of the laid down guidelines of Bank's Loan Policy nor got any pecuniary gain nor gave any undue benefit to anybody. He stated that IO did not conduct the investigation fairly and made him a scapegoat.

24.5 A6 Ishwar Singh Mehra stated that though he was transferred to the different branches in a short span but he was never relieved from the Hauz Qazi Branch. He was asked to work at Model Town Branch on the instructions of AGM which is a CC No. 42/12 (25/16) 06.07.2018 101 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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general practice followed in the bank. He was again asked to look after the work of Hauz Qazi Branch from 05.02.2007 to 09.02.2007 and 12.02.2007 to 27.02.2007. A6 further stated that the branch was open on 25.02.2007 being Sunday as inspection was to take place. He stated that the proposal for loan was sent to the Zonal Office for sanction. It was the duty of the field officer to verify the facts and send to the Zonal Office through the branch. He stated that the loan proposal was accompanied with Form 32 showing all the concerns as directors of M/s Duro Marketing Pvt. Ltd (question no. 9) He stated that the account was running satisfactorily as reflected in the Core Banking System till 30.03.2007. He stated that A.K. Fotedar had joined the branch but formal handing over of charge had not taken place and he was working as Manager on 25.02.2007. He admitted that he had given the specimen signature to CBI official and also informed them that the letter dated 25.02.2007 was signed by him on the basis of Core Banking System. He stated that he was temporarily sent to Model Town Branch in 2006 and was again asked to work in the Hauz Qazi Branch to clear the past records as inspection of branch was to be conducted. During his posting as Manager at Hauz Qazi Branch, he cleared all the pending works and also signed the documents produced before him including the certificate to the effect that the account of M/s Duro Marketing Pvt. Ltd was "standard asset". He had signed the certificate on the basis of Core Banking System after verifying the records in accordance with CC No. 42/12 (25/16) 06.07.2018 102 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the banking practice. He signed the certificate bonafidely on the basis of the records made available to him after verifying from the Core Banking System, which was not showing the account of M/s Duro Marketing Pvt. Ltd as NPA till 30.03.2007. He stated that neither he entered into criminal conspiracy with anyone nor committed any offence. He did not take any pecuniary benefit from anyone nor gave favour to anyone. He had informed the CBI that the branch was opened on 25.02.2007 (Sunday) due to inspection. He further stated that the record of the bank pertaining to 25.02.2007 was collected by the IO but the same were concealed.

24.6 A7 V.S. Pillai stated that there was no transaction in the account of Shiva Sales Corporation through its proprietor V.S. Pillai since its opening in 20062007. The firms Kwality Enterprises and Shiva Sales Corporation were opened for dealing in fabrics / clothes and there was no requirement for registration with the Sales Tax Department. The cheque (question 118) Ex.PW51/A dated 03.07.2007 for Rs. 40,000/ from the account of M/s Kwality Enterprises was issued to the coaccused Vinod Khanna towards the commission in respect of dealing in fabrics/clothes material for which Vinod Khanna had issued a receipt dated 06.07.2007. He had business dealings of fabric/clothes with JainCo proprietor Mukesh Jain and Duro Marketing Pvt. Ltd., director Mukesh Jain. In June 2007, a personal loan account no. 12004011000092 was opened in OBC, Preet Vihar Branch, Delhi in the name of M/s Mohan Das and Co. On 04.06.2007 CC No. 42/12 (25/16) 06.07.2018 103 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Rs. 4.95 lacs were transferred and credited to JainCo. Subsequently, the above account was closed. A new account bearing no. 12005011000235 was opened in the name of Mohan Dass and Co. From this account, on 25.07.2007 and 26.07.2007, Rs. 3.0 lacs and 2.0 lacs respectively were transferred to JainCo. as there was a proposal to purchase raw material for the manufacturing of PU Foam, which was supposed to be imported from China. The above proposal was never finalized and the money remained with Mukesh Jain. It was thereafter decided that Mukesh Jain and he would deal in fabric and clothes. He stated that all the transactions occurred thereafter, are genuine and in consonance with the commercial business. He stated that Rs. 8 lacs, which were transferred from Kwality Enterprises, OBC, Laxmi Nagar branch to Mohan Dass and Co. OBC Preet Vihar, Delhi was his money, which he was supposed to get back from Mukesh Jain. Still, a balance of Rs. 1.95 lacs is to be recovered from Mukesh Jain. He stated that he was neither the signatory to any of the alleged documents nor beneficiary to any of the transactions as alleged by CBI. He had opened the CC account no. 12004011000092 in the name of Mohan Dass and Co. on the introduction of Mohan Dass and Co. having account no. 12001131001923 and at that time he had submitted the copy of PAN Card and electricity bill. He had maintained the said account in the branch. The cheques Ex.PW40/B35 and Ex.PW40/B36 of Rs. 1,52,000/ and Rs. 6,48,000/ respectively issued from the account of Kwality Enterprises, OBC Laxmi CC No. 42/12 (25/16) 06.07.2018 104 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Nagar Branch in favour of Mohan Dass and Co. were credited in the OD account of M/s Mohan Dass and Co. at OBC, Preet Vihar. He stated that this was the part amount due to be paid by Mukesh Jain against the loan of Rs. 9,75,000/ from the account of Mohan Dass and Co. to the account of JainCo maintained by Mukesh Jain.

24.7 A8 Ashok Bharti stated that all the cheques and transactions were genuine and bona fide pertaining to sale and purchase of fabric/cloth material. A8 further stated that CBI did not conduct the investigation properly and filed selective documents which do not show true factual position that he had business of fabric and clothes. He was neither the signatory to any of the documents nor was the Director/Promoter of Duro Marketing Pvt. Ltd. He was working as a Middle man in the trading of fabrics and clothes items and used to get commission for the same. He has no knowledge about any loans and finances of M/S Duro Marketing Pvt Ltd.

DEFENCE EVIDENCE:

25. In their defence, accused persons examined as many as fourteen witnesses including the accused V.S. Pillai (A7) and M.C. Aggarwal (A5) as DW4 and DW14 u/s 315 Cr.P.C.

25.1. DW1 Anil Kumar was the Value Added Tax Officer from the department of Trade and Taxes. He brought the schedule of list of exempted and taxable commodities Ex. DW 1/1. He stated that as per his knowledge, any industrial production of textile in raw form CC No. 42/12 (25/16) 06.07.2018 105 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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comes under the category of Serial No. 48. Stitched and semi stitched clothes are taxable commodities. Unstitched clothes are exempted and fall under Serial No. 43 of the First Schedule if they are not imported. If a dealer deals exclusively in exempted commodities mentioned in the first schedule, he is exempted from applying for the registration with the Sales Tax department. If he is dealing with both the commodities, he is required to get registered with the Sales Tax department, if his annual turnover is more than Rs.20 lacs. It is mandatory to file quarterly periodic tax return by the dealer. Tin Number (Tax Payer Identification Number) is issued to the every registered dealer. He cannot say if textile and handloom fabric are different items. 25.2. DW2 Ravi Bhakuni was from Oriental Bank of Commerce, Preet Vihar branch. He brought the Statement of Account of ( Cash Credit Account) bearing No. 12004011000092 for the period from 03.06.2007 to 01.06.2016 Ex.DW 2/2 of M/s Mohan Das & Co. He also brought the Statement of Account of O.D Account No. 12001011000235 for the period from 19.07.2007 to 31.12.2008 Ex. DW 2/3. He stated that the account No. 12001011000235 was merged into account No. 12004011000092 and currently it is transferred to the office of Assistant Regional Manager, Harsha Bhawan, Connaught Place. He stated that he cannot say whether the above account had become NPA or irregular. He stated that Ex. PW 44/D is the account opening form of M/s Mohan Das & Co. in respect of account No. 12001011000235 and V S Pillai was the proprietor of M/s Mohan Das & Co.

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25.3. DW3 Gulshan Satija was the Manager, Oriental Bank of Commerce, Karol Bagh Branch. He brought the account opening form of M/s Mohan Das & Co. Ex. DW 3/2, Customer relation information Ex. DW 3/3, PAN Card and Water Bills Ex. DW 3/4 and Ex. DW 3/5 and customer profile dated 13.04.2007 of Current A/c No. 12001011001548 of M/s Mohan Das & Co. Ex. DW 3/6. He also brought the statement of overdraft account (O.D) No. 12005011000235 of Mohan Das & Co. for the period from 01.04.2007 to 31.03.2008 Ex. DW 3/7 and statement of cash credit account No. 12004011000092 of Mohan Das & Co. for the period from 01.04.2007 to 31.03.2008 Ex. DW 3/8. He stated that though the customer ID remains the same but the customer can open the account as per his convenience. He stated that as per the statement of accounts Ex. DW 3/7 and Ex. DW 3/8, six cheques were issued in favour of M/s Kwality Enterprises and 18 cheques were issued in favour of M/s Duro Marketing Pvt Ltd. He stated that statement of accounts reflects that some cheques of Mohan Das & Co. were returned unpaid/dishonoured (about 21 cheques). 25.4. The accused V S Pillai examined himself as DW4 u/s 315 CrPC. He stated that he knows Mukesh Jain since 1983. He had business relations with him till 2005. Since he suffered loss, he started consultation business. He used to meet Mukesh Jain and tell him that he was not doing any business. Mukesh Jain then told him that he has a branch office in China for import of Poly Urethane foam for manufacturing of Ufoam material; if he (DW4) could introduce some money into the business, he would CC No. 42/12 (25/16) 06.07.2018 107 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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supply him the raw material directly and for that purpose, he (DW4) would be required to open an account in OBC, Laxmi Nagar. He then opened the account No. 04881011003206 in the name of Kwality Enterprises, proprietor V S Pillai on 04.05.2007 vide account opening form Ex. PW 10/C (D309). He waited for the supplies which were to come from China but they did not come. In between, he and Mukesh Jain started a business of cotton fabric which was exempted from Sales Tax. The business ran smoothly till 2007. He stated that he had another account No. 12004011000092 in the name of Mohan Das & Co, proprietor V S Pillai in OBC, Preet Vihar. He proved the statement of account Ex. DW 3/8 and stated that he had taken loan of Rs.5.0 lacs for business purpose in that account. Vide entry dated 04.06.2007 at Point X Ex. DW 3/8, he had paid Rs.4.95 lacs vide cheque No. 792101 in the account of JainCo, sole proprietor Mukesh Jain, a/c No. 12001011001548 towards receipt of supply of raw material from China to be supplied by Mukesh Jain. He, thereafter, applied for sanction of Cash Credit Limit of Rs.20 lacs. For this purpose, on the same customer ID, he opened another account No. 12005011000235 with OBC, Preet Vihar vide account opening form Ex. PW 44/D (D586). Vide statement of accounts Ex. DW 3/7, the previous transaction of Rs.5.0 lacs was amalgamated into this transaction. He paid Rs.3.0 lacs vide cheque No. 664301 to JainCo towards supply of raw material to be supplied from China vide entry dated 24.07.2007 Ex. DW 3/7 Point X. He also paid Rs.2 lacs vide cheque No. 664302 to JainCo towards supply of CC No. 42/12 (25/16) 06.07.2018 108 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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raw material to be supplied from China vide entry dated 26.07.2007 Ex. DW 3/7 Point X1. In this way, he paid Rs.9.95 lacs to Mukesh Jain for supply of raw material from China. He stated that Mukesh Jain did not supply the raw material, so he asked him either to return the money or supply the raw material but he neither returned the money nor supplied the raw material.

In the meantime, he got engaged in the supply of cotton fabrics to M/s Duro Marketing Pvt Ltd. He stated that M/s Duro Marketing Pvt Ltd was making payment to him towards the supplies made by him which he had deposited in the account of Kwality Enterprises. He started receiving cotton cloth fabrics from JainCo which he sold to Duro Marketing Pvt Ltd. Total 42 bills Ex. DW 4/1 collectively were raised in favour of Kwality Enterprises by M/s JainCo. He supplied the material to Duro Marketing Pvt Ltd from his firm M/s Kwality Enterprises vide invoices Ex. DW 4/2 collectively (35 invoices). Treating the amount received against the supply of cotton fabrics as the amount which was due to be paid by Mukesh Jain on account of non supply of raw material from China, he transferred Rs.1,52,000/ vide cheque No. 612287, Rs.6,48,000/ vide cheque No. 612261 from the account of Kwality Enterprises to his account No. 12005011000235 in the name of M/s Mohan Das & Co vide entry Ex. DW 3/7 X2 and X3. After such transfer, the balance amount payable by Mukesh Jain was Rs.1,95,000/. He proved the ledger account of JainCo Ex. DW 4/3, Mohan Das & Co. Ex. DW 4/4, Vinod Khanna Ex. DW 4/5, Purchase Register Ledger A/c of CC No. 42/12 (25/16) 06.07.2018 109 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Kwality Enterprises for the period from 01.04.2007 to 31.03.2008 Ex. DW 4/6, Sales Register Ledger A/c of Kwality Enterprises for the period from 01.04.2007 to 20.10.2007 Ex. DW 4/7, Ledger A/c of Duro Marketing Pvt Ltd for the period from 01.04.2007 to 20.10.2007 Ex DW 4/8 and Ledger A/c of Supreme Traders for the period from 01.04.2007 to 20.10.2007 Ex DW 4/9. He placed on record two bills/invoices of Supreme Traders i.e 1255 dated 20.06.2007 Ex. DW 4/11 and 1395 dated 10.10.2007 Ex. DW 4/12. He also placed on record a receipt dated 06.07.2007 Ex. DW 4/13 qua the commission of Rs.40,000/ paid to Vinod Khanna vide cheque No. 615821 dated 06.07.2007 for the purchases made through him from Supreme Traders at 2645 First Floor, Balli Maran, Delhi. He placed on record the computation of income tax of the assessment year 20082009 along with trading and profit and loss a/c as on 31.03.2008 and balance sheet as on 31.03.2008 Ex. DW 4/14 collectively. He stated that M/s Kwality Enterprises was running into losses and there was no taxable income so no ITR for the assessment year 20082009 was filed. He stated that he was not the borrower, guarantor, signatory, director, beneficiary in respect of the account of M/s Duro Marketing Pvt Ltd maintained at Union Bank of India, Sadar Bazar branch. He stated that his account at Preet Vihar branch had turned into NPA in 2009 and he closed the account of Kwality Enterprises after the CBI raid. He also has a saving a/c with OBC, Preet Vihar in which he has not been carrying out any transaction since 2010. He stated that he knows the accused Mukesh Jain since 1983 and Vinod Khanna CC No. 42/12 (25/16) 06.07.2018 110 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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since 2007. He used to meet Anil Dhall in the office of Mukesh Jain since 2007. He correctly identified the accused persons Vinod Khanna and Anil Dhall.

25.5. DW5 Satish Kumar Gupta was the Senior Assistant, State Bank of India, Model Town branch. Nothing material came in his examination.

25.6. DW6 Ravinder Kumar Kamboj was the Manager (MPST), State Bank of India, Region II, Dharam Pur, Dehradun. He was confronted with the screen shot of statement of account number 10772013450 in the name of Duro Marketing Pvt Ltd. mark D6 /X2. He stated that as per the document Ex. DW6/1 (7 pages), the account was not NPA on 25.02.2007. As per entry at Point Y1 at Page 3, cash credit /overdraft limit of M/s Duro Marketing Pvt Ltd was renewed for Rs.1.0 crore on 26.02.2007. He stated that he had taken the screen shots on the request of I S Mehra in respect of the transactions which had taken place in the account from 27.12.2006 to 30.03.2007. He was confronted with the entry dated 16.03.2007 at Point Y2 Page 4. He stated that the account turned into NPA on 14.03.2007 (Code 04 stands for NPA and Code 00 stands for standard). He stated that the entry dated 30.03.2007 at Point Y3 Page 7 reflects that an amount of Rs.2.25 crores was transferred in this account on 30.03.2007. He stated that 12 entries dated 30.03.2007 in the documents do not relate to actual transactions. There was only one transaction on 30.03.2007 qua the deposit of Rs.2.25 crores in the account.

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25.7. DW7 Pradeep Kumar was the Manager, State Bank of India, Regional Office, Region IV Parliament Street. He stated that no record is available in the branch relating to relieving of the accused Ishwar Singh Mehra on 13.10.2006 from Hauz Qazi branch.

25.8. DW8 Mukesh Gupta was the Chief Manager (GB), State Bank of India. He was confronted with the absentee cum office order Ex. DW 8/P1. He stated that as per the letter Ex. DW 8/1, it was Sunday on 25.02.2007. He denied that the employees are not permitted to work on Sundays. He admitted that the entries qua oral instructions to I S Mehra in Ex. DW 8/P1 are under the same dates on which he was to go to Hauz Qazi branch for which he was deputed. He stated that from the enquiry made by him, he came to know that no written order was issued to I S Mehra and he was orally instructed to visit Hauz Qazi branch. 25.9. DW9 Chakradhar Gunta was the Branch Manager, Union Bank of India, Sadar Bazar branch. He brought the record pertaining to Current A/c No. 307501010133539 and cash credit account No. 307505040132415 in the name of M/s Duro Marketing Pvt Ltd. He explained the meaning of F1 statement. He stated that sometimes the bank customer wants to exceed the cash credit limit in his cash credit amount or current account. In case of such request, excess or temporary overdraft facility/overdraft limits are granted to such customer subject to certain conditions and as per rules. In the case of Cash Credit account, it is called 'excess' and in the case of current account, it is called 'temporary overdraft CC No. 42/12 (25/16) 06.07.2018 112 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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facility'. F1 statement is the complete record of excess or temporary overdraft facilities granted to the customers by the bank in a calendar year. The grant of 'excess facility' or 'temporary overdraft facility' requires sanction of the competent authority. The report of the grant of such facility is sent to the Regional office.

He then explained the fate when cash credit limit, overdraft limit in cash credit account turns into NPA. He stated that f irst of all, the account is categorized as NPA. The bank then issues a recall notice to the borrower as well the guarantor calling upon to repay the entire amount advanced by the bank along with the interest. When the amount is not returned, the bank issues notice U/Sec. 13(2) of SARFAESI Act in case there is collateral security. After lapse of 60 days of the notice, another notice U/Sec. 13(4) of SARFAESI Act for taking the possession of the collateral property is issued. Simultaneously, recovery suit is filed in the Debt Recovery Tribunal. In case of Cash Credit and Overdraft facilities, if the account is a performing one, the bank earns interest on these facilities. But when the account turns into NPA, all the facilities come to stand still and the bank does not earn any interest on these facilities. The bank is required to make provision from its own profit as per the RBI directions. The bank therefore suffers double loss. The bank does not allow any operation in the Cash Credit Limit or Overdraft Limit when an account turns into NPA. In such a case, neither the limits are renewed nor enhanced. He also elaborated the conditions and rules as to exceeding of CC limits CC No. 42/12 (25/16) 06.07.2018 113 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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viz. (i) the temporary overdraft facility will be for a specific period only and it will not be for an indefinite period,

(ii) this excess facility will be limited to a specific amount only

(iii) delegation of this excess / Overdraft can be permitted by the Branch Manager depending upon the delegation power granted to him. In case request of the customer exceeds the delegation power of the Branch Manager, the matter is referred to the Regional Office. For example, if the delegation power of the Branch Manager is Rs. 25.0 lacs and if the customer requests for Rs. 40.0 lacs in excess of the CC limit already granted to him, Branch Manager refers the case to the Regional Office. However, if the customer seeks to exceed the CC limit by Rs.25 lacs, the Branch Manager can do so himself under his delegated powers. The delegation power of Branch Manager varies from Branch to Branch depending upon the size of the branch. If the account of a party turns into NPA, party will not be granted cash credit or overdraft limit. If any amount is deposited in the account of such customer, the bank may permit such customer to withdraw 7080 percent of the deposited amount from his account for the business purpose. There is no bar for the customer to approach to any other bank for grant of similar cash credit or overdraft facility. However, that bank will not grant such facility if his account in another bank has turned into NPA. He stated that F1 statement is generated fortnightly and the report to the regional office is also sent fortnightly. He stated that under the Heading ' Terms and Conditions' in Ex. PW 63/H (D10), the Branch Manager CC No. 42/12 (25/16) 06.07.2018 114 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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personally ensures that the credit facility is utilized for the purpose of the firm's trading activity. If a borrower having a current account in the other bank approaches other bank for loan, the bank considers the previous two years account statement of the borrower and other details and then grants the loan. This is the subjective satisfaction of the bank. He brought the circulars dated 21.07.2006, 17.12.2004 and 28.03.2008 along with the annexure to IC No. 7148 dated 28.03.2008 Ex. DW 9/P1 collectively (ten pages). He admitted that there is no mention in the circular that the statement of account of previous two years of the other bank is required from the borrower for grant of cash credit facility. 25.10. DW10 Rajender Kumar Bhangu was the Manager, Union Bank of India, Chandni Chowk branch. He stated that Mr. Bhartwal never informed him about the absence of one of the directors of Duro Marketing Pvt Ltd whose photographs were affixed on the specimen signature card nor he took him to the accused M C Aggarwal in respect thereof. He stated that the account opening form Ex. PW 34/B and specimen signature card Ex. DW 34/A, do not bear any date.

25.11. DW11 Amar Das Kharbanda was the AGM, State Bank of India, Delhi Zone. It is pertinent to mention that earlier he was the prosecution witness but he was dropped by the prosecution. He was then called by the accused Ishwar Singh Mehra in his defence. He stated that Hauz Qazi branch of State Bank of India was under

Delhi Zone. He stated that he had mentioned in the correspondences that the position of account was quite alarming CC No. 42/12 (25/16) 06.07.2018 115 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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since inception due to overdrawings permitted by the Branch manager without obtaining prior approval of the appropriate authority and the branch was not serious in monitoring /regularizing the position. He however admitted that in his statement to CBI Ex. DW 11/1 ( u/s 161 CrPC), he had stated that the accused I S Mehra was deputed to assist A K Fotedar Branch Manager in the smooth conduct of the inspection. He had also stated that he ( I. S. Mehra) was not deputed to attend any official work in the capacity of Branch Manager of Hauz Qazi branch as A K Fotedar was authorized to do so. He stated that he never issued instructions to I S Mehra to issue the letter dated 25.02.2007 on behalf of Hauz Qazi branch. He stated that as per the record Ex. PW 4/A, the date of NPA of account was recorded as 01.12.2006. He stated that the proposal for grant of loan to Duro Marketing Pvt Ltd was dealt by the Zonal Office. He admitted that when the account is classified as NPA, further limits are not approved. He stated that sanction of cash credit/overdraft limit is always conveyed separately by a letter and the entry dated 26.02.2007 at Point X to X of the statement of account from 05.01.2006 to 31.03.2007 ( part of mark D6/X2) in respect of Duro Marketing Pvt Ltd finds mention that CC/OD limit was approved upto Rs.1.0 crore on 26.02.2007. He stated that when Branch Manager is transferred from the branch, relieving letter is issued and one copy is sent to the Zonal Office. He stated that sometimes the higher officials direct the Branch Manager orally to take care of the work of the branches temporarily for inspection purpose. He denied that CC No. 42/12 (25/16) 06.07.2018 116 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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I S Mehra was not relieved from the Hauz Qazi branch and in February, 2007, he was again asked to look after the work of Hauz Qazi branch as Branch Manager.

25.12. DW12 Girdhar Singh Toliya was the Chief Manager, Union Bank of India, Sadar Bazar branch. He brought and produced the copy of job description of the Chief Manager/Branch Manager Ex. DW 12/2.

25.13. DW13 Ashok Nijhawan had retired from the post of Chief Manager, Zonal audit office, New Delhi in October, 2012. He stated that he had worked in audit department for about nine years. Normally every branch is audited once in a year. He also explained the duties of the officers working in the branches of the bank. He stated that the borrower submits the stock position to the branch and the Officer Incharge (advances) obtains the stock position every month. During audit, legal opinion, valuation report of the property equitably mortgaged as collateral security, cash security in the background of loan policy guidelines and bank rules are thoroughly checked.

He stated that as per the audit report Ex. DW 13/2, no irregularity regarding payment of Rs.2.25 crores to State Bank of India, Hauz Qazi branch in respect of Duro Marketing Pvt Ltd was pointed out. No irregularity in respect of mortgaged collateral security was found. No irregularity in disbursal of funds to M/s Duro Marketing Pvt Ltd before the pledge of FDR of Rs.51 lacs was pointed out. As per the sanctioned advice Ex. DW 13/3, there was no condition of obtaining collateral securities before the CC No. 42/12 (25/16) 06.07.2018 117 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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disbursal of facilities to M/s Duro Marketing Pvt. Ltd. There was no condition that only Rs.2.0 crores were to be paid to State Bank of India, Hauz Qazi branch. He stated that in the case of taking over account from another bank, it is not possible to obtain original title deeds from the previous bank where they are already lying. Legal opinion on the title of the property at the time of taking over is taken on the copy of the original deeds taken either from the borrower or from the previous bank. He stated that Aditya Madan advocate was on the panel of Union Bank of India for many years. His opinion in respect of collateral or mortgaged property was always accepted and relied upon by the bank. In case of advances/limit of Rs.50 lacs or above, close monitoring is done by submitting monthly credit monitoring report by the branches to the regional office. Qua the site visit report, he stated that inspection report dated 29.03.2007 Ex. DW 13/7 (D118, Page

172), finds mention that the building is self occupied i.e by owner and not tenant. There are two options in the column i.e owner occupied or tenanted. If the tenant is not occupying the property, it is deemed that owner is occupying the property. He admitted that the Chief Manager is the overall Incharge of the branch. On being crossexamined, he stated that he is not aware if the accused M C Aggarwal has been convicted in a bank fraud case bearing RC No. 071/2009(E)/0001/CBI/EOUIII New Delhi (Case No. 40/11) by the Special Judge, (PC Act), CBI01 Court, Dwarka (SW), Delhi vide judgment dated 03.11.2015.

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25.14. Accused M C Aggarwal examined himself as DW14 u/s 315 CrPC. He deposed on the lines of his statement u/s 313 Cr.P.C. He stated that he was promoted to ScaleIV in August, 2006. He joined the Sadar Bazar branch as ScaleIV officer i.e. Branch Manager in August 2006. There was ScaleII officer designated as Accountant. There was Advance Incharge in ScaleII. B S Bharthwal was the Incharge of Current Account, Saving Bank, Fixed Deposit and Remittances department. J B Handa was the Incharge of Advance department. Vinod Kumar Gupta was the Assistant Manager assisting the Advance department. He stated that Mukesh Jain, Director of Duro Marketing Pvt Ltd. had approached the bank and met J B Handa. He told him the proposal of his company and requested for various limits. J.B. Handa had brought Mukesh Jain in his cabin. He informed him that as on March 2006, they had crossed sales of Rs.22.0 crores. He stated that based on the turnover method of calculating cash credit limits, the company was eligible for Rs.4.40 crores limit. Finding the request of the company genuine and convincing, he asked Mukesh Jain to submit last three years audited financial statements of M/s Duro Marketing Pvt Ltd. Mukesh Jain submitted the application form along with the documents to J B Handa. The proposal was sent to the Regional Office. Five members committee of GRID vetted and evaluated the proposal. It was found to be meeting the loan policy guidelines. It was placed before the sanctioning authority which also vetted the proposal. Due diligence was conducted as per loan policy at multiple levels. The confidential CC No. 42/12 (25/16) 06.07.2018 119 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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credit information was collected. The documents were got signed from Mukesh Jain and Anil Dhall by J B Handa. J B Handa prepared the credit reports after scrutiny and independent verification of R G Mundkur, Mukesh Jain, Duro Marketing Pvt Ltd and Anil Dhall Ex. PW 64/C6, Ex.PW 64/C28, Ex. PW 64/C29 and Ex. PW 14/2. J B Handa placed the credit reports before him. After examining, he did not find anything adverse about the Directors as well as the company. He also made independent market enquiry about Duro Marketing Pvt Ltd from the two companies namely Mayur Coir Pvt. Ltd and Shri Om Enterprises Pvt. Ltd Ex. PW 39/A (D117). He also inspected the business premises cum office godown of Duro Marketing Pvt Ltd at Ballimaran along with J B Handa and visited the property 52, Vasant Marg, Vasant Vihar, New Delhi in the name of R G Mundkur offered by the company as collateral security. He signed the report dated 29.03.2007 Ex. DW 13/7 (D118, page 172). He also got the property evaluated from the panel valuer K G Saini vide his report Ex. DW 13/6 (D118, Page 116).The proposal was vetted and evaluated. It was thereafter sanctioned. The note was placed before Sh. S P Goel, DGM for seeking his take over concurrence which he also approved.

He stated that since it was take over account from State Bank of India, Hauz Qazi branch, an opinion in confidence about the account of M/s Duro Marketing Pvt Ltd was taken from the State Bank of India, Hauz Qazi branch by sending a letter dated 25.01.2007 Ex. DW 14/5 (D481) through courier as per the loan CC No. 42/12 (25/16) 06.07.2018 120 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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policy. It was replied by the State Bank of India vide letter dated 25.02.2007 Ex. PW 2/S (D37). The Branch Manager in his reply had stated (i) the conduct of the account is satisfactory (ii) the account is classified as Standard Asset at their branch (iii) the company is enjoying working capital limit of Rs.2.0 crores only. He had personally gone to meet the Branch Manager State Bank of India to verify the veracity of letter dated 25.02.2007 issued by the Branch manager, State Bank of India and met A K Fotedar in his cabin. Mr Fotedar informed him that the auditors have come in his branch and he is busy with them. He waited for him for about half an hour but he did not come and thereafter he returned to his branch. He then deputed J B Handa with the letter to meet the Branch manager, State Bank of India. J B Handa also went there but on that day A K Fotedar was on leave. J B Handa met the second man K D Sharma who was looking after the advance department in the branch. K D Sharma informed J.B. Handa that the account of M/s Duro Marketing Pvt Ltd was standard and the conduct of the account was satisfactory. K.D. Sharma also talked to A.K. Fotedar on phone and thereafter issued the letter dated 30.03.2007 Ex. PW 2/P (D488) stating that total liabilities in the account of the captioned party are Rs.2.25 crores as on date. In the letter, K D Sharma nowhere stated that the account of M/s Duro Marketing Pvt Ltd was NPA or unsatisfactory. He stated that A.K. Fotedar, K D Sharma and I S Mehra knew the true status of the account of M/s Duro Marketing Pvt Ltd but all of them concealed it from Union Bank of India, both in writing and during his CC No. 42/12 (25/16) 06.07.2018 121 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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personal visit and the visit of J.B. Handa to State Bank of India, Hauz Qazi branch.

He stated that they had obtained the statement of account of Duro Marketing Pvt Ltd for the period from 01.04.2006 to 30.11.2006 which was the uptodate statement, they had sought in December, 2006. Mukesh Jain had introduced R G Mundkur as non working Director in the application Ex. PW 39/B (D117) w.e.f 14.01.2006 and the owner of the property A52 Vasant Vihar. Mukesh Jain had also submitted a brief profile of R G Mundkur Ex PW 39/B (D117, Page 388) which stated that R G Mundkur is a retired government officer and owner of big residential property in the prime area of Delhi having reasonably good income. Being aged, he does not intend to do much running around, and being his distant relative he joined the company as an advisor on administrative matters concerning the department. He stated that he had visited the property where he had met the guard who informed him that R G Mundkur is the owner of the property. Since no one had been living in the property, he had enquired from the guard who told him that earlier the property was rented to Romanian Embassy and it has been vacated.

He stated that the account of Duro Marketing pvt Ltd with Union Bank of India started getting irregular and its operation also started reducing from July 2007 onwards. This trend gave them signal that the company has started operating its account with some other bank. They inspected the office of the company and found a cheque book of account of M/s Duro Marketing Pvt Ltd CC No. 42/12 (25/16) 06.07.2018 122 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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with Andhra Bank, R K Puram branch. He went to Andhra Bank, R K Puram branch, met the AGM and got the account of company closed at Andhra Bank. He stated that since the account was not running satisfactorily and the company was not adjusting the excess, they prevailed upon the company to either adjust the excess or the account completely. They issued a notice to the company and R G Mundkur that if the company fails to regularize the account, they would be constrained to get the account adjusted by sale of property mortgaged to the bank. He stated that the company failed to adjust the excess. A meeting of Mukesh Jain with DGM, regional office was got arranged. Search of prospective buyers of the property was made. One Pawan Garg showed his interest to buy the property. He with Pawan Garg went to the property. From the guard, they came to know that R G Mundkur had already expired. He then searched the details of R G Mundkur in the bank record, got his telephone number and full address i.e. B/252, Safdarjung Enclave, New Delhi. He visited that address. There he met Vinay Sakhuja, showed him the specimen signature card and photograph of R G Mundkur. Vinay Sakhuja told him that the person shown in the photograph was his tenant Vinod Khanna who lived on the ground floor. Vinay Sakhuja also told him that this person had mortgaged the ground floor of his residence to Punjab National Bank posing as Sakhuja. He stated that as soon as he came to know that Vinod Khanna impersonated himself as R G Mundkur, he promptly reported the matter to his superior officers on phone i.e on 18.03.2008 and submitted a CC No. 42/12 (25/16) 06.07.2018 123 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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complete report dated 24.03.2008 Ex. PW 49/8 (D118, Page 275 and 276). He stated that the FDRs of Rs.50.0 lacs were made by the company from the funds in its current account. No funds were transferred from the Cash Credit account of M/s Duro Marketing Pvt Ltd for preparing the FDRs of Rs.50.0 lacs. By mistake J.B. Handa made FDRs of Rs.50.0 lacs instead of Rs.51.0 lacs which came to their notice through Auditor. J.B. Handa immediately debited the cash credit account of the party by Rs.1.0 lakh and made FDR of Rs.1.0 Lakh in the name of Duro Marketing Pvt Ltd. He stated that as Chief Manager, he was given delegated powers to allow excess upto 10 per cent of the limit of the party. Bank Managers are permitted to allow excesses beyond the delegated powers but such excesses are reported to the next higher authorities. He stated that he had reported all such excesses to the next higher authority through the fortnightly F1 statements and no special favour was given to Duro Marketing Pvt. Ltd. He stated that they had also obtained legal opinion of J S Rawat, advocate of State Bank of India and sent it along with the proposal to the sanctioning authority. J S Rawat had given legal opinion Ex. PW 39/D (D117) which categorically stated that the title documents are genuine. He stated that Mukesh Jain had introduced R.G. Mundkur to J.B. Handa when he came with Mukesh Jain and Anil Dhall to sign the security documents. J.B. Handa had verified the identity of R G Mundkur through PAN card and voter I Card of R G Mundkur. R G Mundkur had also obtained NOC from DDA Ex. PW 62/A (D19) and handed over to J.B. Handa in terms of the CC No. 42/12 (25/16) 06.07.2018 124 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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report of the panel lawyer. He stated that the main purpose of obtaining statement of one year as stated in the sanction advice was to ensure that the account of Duro Marketing Pvt Ltd is satisfactory. This was done more strongly through his personal visit in State Bank of India when he met A.K. Fotedar and K D Sharma.

He stated that no loss was caused to the bank as reflected in statement of account of Duro Marketing Pvt Ltd Ex. DW 9/1. The account was adjusted through the sale proceeds of the residential property of Smt. Subhash Kumari, mother of Mukesh Jain which was got mortgaged by his effort after it was revealed that the title deeds of the property of R G Mundkur were fake.

He stated that the account of Duro Marketing Pvt Ltd was taken by Union Bank of India either on 30 th or 31 st March 2007. The limits were sanctioned in favour of Duro Marketing Pvt Ltd on 05.03.2007 and the account became NPA in March 2008. On being cross examined, he admitted that in a bank fraud case tried at Dwarka Courts, he was convicted. He stated that the statement of account after November 2006 was inadvertently not obtained by the Manager, (Advances) from State Bank of India Hauz Qazi branch however to ascertain the latest status of the account after November 2006, he had personally contacted A K Fotedar Branch Manager. His Manager (Advances) J B Handa had personally contacted K D Sharma Officer (Advances) State Bank of India Hauz Qazi branch to verify the veracity of the letter dated 25.02.2007 issued by the Branch Manager, State Bank of India CC No. 42/12 (25/16) 06.07.2018 125 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Hauz Qazi branch. K D Sharma had verbally informed that the conduct of the account was satisfactory as stated in the letter dated 25.02.2007.

26. I have heard the ld. PP for CBI and Ld. counsels for accused persons. I have carefully perused the record. I have also considered the written submissions submitted by the prosecution as well as the accused persons.

Arguments on behalf of CBI

27. Sh. Vipin Kumar, Ld. PP for CBI vehemently argued that Mukesh Jain (A1) and Anil Dhall (A2) were the promoter directors of M/s Duro Marketing Pvt. Ltd. (A3) which was incorporated on 06.01.2006. A3 had approached State Bank of India, Hauz Qazi Branch, Delhi for sanction of credit facilities of Rs.2.0 crores which were sanctioned by the Zonal Office on 31.01.2006. The property bearing no. A52, Vasant Marg, Vasant Vihar, New Delhi in the name of R.G. Mundkur, who was shown as one of the directors of the Company was equitably mortgaged, although, as per the ROC record, R. G. Mundkur was never the director of A3. The account of A3 became NPA in December, 2006. Ishwar Singh Mehra (A6) was the Branch Manager at that time. In October, 2006, A6 was transferred to Model Town Branch.

28. Ld. PP argued that Mukesh Jain (A1) being the director of (A3) vide his letter dated 11.12.2006 dishonestly approached Union Bank of India, Sadar Bazar Branch, Delhi for sanction of cash credit limit of Rs.4.0 crores and letter of credit limit of Rs.1.0 CC No. 42/12 (25/16) 06.07.2018 126 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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crore by taking over the account maintained with State Bank of India Hauz Qazi Branch which was already NPA with State Bank of India. He offered the above property as collateral security showing R.G. Mundkur as director of the Company. A1 not only misrepresented but also suppressed the material facts and did not disclose the classification of account which had already turned into NPA. He made a false submission that the State Bank of India is not ready to enhance the credit facilities required for the business activities of A3. A2 vide letter dated 27.12.2006 submitted the documents required for processing which included the copy of forged lease deed of the property offered as collateral security.

29. Ld. PP contended that Mahesh Chand Aggarwal (A5), the then Branch Manager, Union Bank of India, in violation of laid down guidelines of the bank, vide proposal dated 15.01.2007 recommended for take over of the account of A3 and sanction of enhanced credit facilities without verifying the genuineness and antecedents of the account of A3 with State Bank of India stating that the account of the company A3 with State Bank of India Hauz Qazi Branch was satisfactory though not satisfactory. Ld. PP contended that as per the loan policy of the bank vide circular no. 7349 dated 01.04.2006, only the accounts which are classified as standard were eligible for take over. Since, the account of A3 was NPA account, it was not eligible for take over by Union Bank of India. Ld. PP argued that A5 used forged letter dated 30.01.2006 Ex.PW62/B (D19) as NOC from DDA for creating equitable CC No. 42/12 (25/16) 06.07.2018 127 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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mortgage for sanction of the credit facility to A3 and initiated the proposal for such facility on 29.12.2006 much before obtaining the report on the conduct of the account from State Bank of India. A5 on the clarification sought by the Regional Office, replied vide letter dated 09.02.2007 giving different reason for take over of the account that there was no loan officer in State Bank of India, Hauz Qazi Branch to prepare the proposal and forward to the higher authorities. He falsely mentioned that CC and LC limit sanctioned to the company were merged by State Bank of India, Hauz Qazi Branch. He wrote a letter dated 25.01.2007 to State Bank of India seeking opinion about the conduct of account of A3. In response to the above letter, Ishwar Singh Mehra (A6) by posing himself as the Branch Manager of State Bank of India, Hauz Qazi Branch, issued a letter dated 25.02.2007 that the conduct of the account is satisfactory and the account is standard asset. Ld. PP argued that on 25.02.2007, A6 was posted in Model Town Branch and he dishonestly gave the false information in the letter dated 25.02.2007 which A5 made the basis for ascertaining the genuineness of the account of the company at the subsequent stage. GEQD opinion confirmed the handwriting and signature of A6 on the letter dated 25.02.2007 Ex.PW2/S (D37). Ld. PP further argued that the copy of the letter dated 25.02.2007 written by A6 and original letter dated 25.01.2007 written by A5 were never the part of the record of State Bank of India, Hauz Qazi Branch which fact is confirmed by PW4 in his testimony who has stated that on 25.02.2007, A6 did not come to the Bank and A6 CC No. 42/12 (25/16) 06.07.2018 128 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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was relieved from the Branch on 12.10.2006.

30. Ld. PP further argued that Vinod Khanna (A4) impersonated as R.G. Mundkur as owner of the property at Vasant Vihar and executed all the documents with Union Bank of India, Sadar Bazar Branch along with A1 and A2. A4 also submitted copy of forged PAN and Voter ID Card purportedly in the name of R. G. Mundkur. GEQD confirmed the handwritings and signatures of A1, A2 and A4 on the documents executed by them with Union Bank of India. They also affixed their photographs on the account opening form of A3 maintained with Union Bank of India.

31. Ld. PP argued that A5 made a field visit to the above property and gave a false report showing the property as self occupied by RG Mundkur whereas the property was lying vacant and no person by the name of R.G. Mundkur was residing therein at the relevant time.

32. Ld. PP argued that A3 was sanctioned credit facilities of Rs.2.0 crore by State Bank of India, however, A5 paid Rs.2.25 Crore to State Bank of India at the time of taking over the account, thus allowed excess payment of Rs.25.0 lacs. He deliberately did not obtain the statement of account of A3 for the last one year as stipulated in the sanction letter and kept the statement upto 30.11.2006 filed by the company on which date the account was not NPA. Ld. PP argued that A5 did it purposely to suppress the factual position of the account. Ld. PP stated that the original perpetual sublease deed of the above property was handed over by State Bank of India to Union Bank of India and it was CC No. 42/12 (25/16) 06.07.2018 129 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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mortgaged as collateral security along with the permission to mortgage dated 16.04.2007 purportedly issued by DDA to R. G. Mundkuar but the said perpetual sublease deed and permission to mortgage dated 16.04.2007 were the forged documents. Ld. PP argued that A5 obtained legal opinion on the photocopy of perpetual of sublease deed in violation of guidelines of the Bank issued vide circular no.00307 dated 17.02.2007.

33. Ld. PP further argued that as per the terms of sanction, A3 was to pledge FDR of Rs.51.0 lacs as additional collateral security but A5 allowed initial disbursal of funds to A3 without creation of FDR. Further, A3 was to create the FDR from its own resources but A3 generated the FDR of Rs.50.0 lacs in April, 2007 and the remaining Rs.1.0 lakh was allowed to be met from the funds of CC limit by excess overdrawing in violation of the terms of sanction. A5 also allowed excess overdrawings in the account of A3 on several occasions by exceeding his delegated power without the approval of the competent authority. A5 did not ensure the end use of the funds and allowed inter firm transfers. He allowed cheques and demand drafts favoring M/s JainCo. to the tune of Rs.48,47,750/ knowing fully well that M/s JainCo. had ceased to exist after the incorporation of M/s Duro Marketing Pvt. Ltd. (A3). A5 also allowed cheques issued by A1 and demand drafts favoring M/s Supreme Traders to the tune of Rs.1,94,53,215/ and exceeded his delegated power. The firms namely M/s JainCo. and M/s Supreme Traders belonged to Mukesh Jain (A1). A5 also allowed unauthorized credits in the CC No. 42/12 (25/16) 06.07.2018 130 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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account of A3 against uncleared cheques deposited by the company at the end of the month which were subsequently returned unpaid at the start of the following month.

34. Ld. PP argued that A1 did not utilize the funds of the CC limit for genuine trade transactions. He dishonestly and fraudulently utilized the bank accounts of M/s Jain Co, M/s Supreme Traders and M/s Kwality Enterprises of V.S. Pillai (A7), M/s Shiv Shakti and M/s Sharma Enterprises of Ashok Bharti (A8) and M/s Kwality Enterprises of Rakesh Khurana (A9) for diverting the proceeds of the credit facilities without any genuine trade transactions. Ld. PP contended that A1 also opened other accounts in the name of A3 with Oriental Bank of Commerce, Chawri Bazar Branch and Andhra Bank, R.K. Puram Branch by fraudulent means. The account opening form of A3 at Oriental Bank of Commerce, Chawri Bazar Branch bears the name of Anil Dhall (A2) whereas the photograph was of some other person whose identity could not be established. Similarly, account opened with Andhra Bank, R. K. Puram Branch bears the name of R.G. Mundkur but the photograph of Vinod Khanna (A4) was affixed on the form. Ld. PP argued that A1 opened the aforesaid accounts by fraudulent means in violation of the terms of sanction whereby banking with other banks was prohibited.

35. Ld. PP argued that facts and circumstances clearly prove that all the accused persons hatched a criminal conspiracy with the object to cheat Union Bank of India, Sadar Bazar Branch, got the NPA account of A3 maintained with State Bank of India, taken over by CC No. 42/12 (25/16) 06.07.2018 131 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Union Bank of India, by misrepresenting the facts, submitted the false / forged documents relating to collateral security and made A4 to impersonate as R.G. Mundkur, director of A3 and owner of the property to create equitable mortgage of the property as collateral security. A7, A8 and A9 in connivance with A1, facilitated illegal diversion of funds to the accounts of their firms. Ld. PP further argued that M/s Supreme Traders of Mukesh Jain (A1), M/s Kwality Enterprises of V. S. Pillai (A7), M/s Shiv Shakhti Udyog and M/s Sharma Enterprises of Ashok Bharti (A8) were not registered with the trade and taxes department and were only on papers and their accounts were opened with a view to facilitate diversion of funds of Union Bank of India, Sadar Bazar Branch, and thus, all the accused persons caused wrongful loss of Rs.4,46,89,558.22 to Union Bank of India, Sadar Bazar Branch, and corresponding wrongful gain to themselves.

36. Ld. PP contended that Mukesh Jain (A1), Proprietor of M/s JainCo., Director of M/s Duro Marketing Pvt. Ltd. (A3) and Proprietor of M/s Supreme Traders was the main beneficiary of the defrauded amount. Oral and documentary evidence clearly prove beyond reasonable doubt the complicity of all the accused persons in the commission of the above offences. In support of his contentions, Ld. PP placed reliance on the case of R. Venkatakrishnan Vs. CBI Crl. Appeal no.76/2004 decided on 09.08.2009; R. Gopalakrishnan, Appellant Vs. The State, Respondent 2002 Crl. L.J. 47; CBI vs. Jagjit Singh, Crl Appeal no.1580 of 2013 decided on 01.10.2013; N.V. Subba Rao Vs. CC No. 42/12 (25/16) 06.07.2018 132 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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State through Inspector of Police, CBI/SPE, Visakhapatnam 2013 Crl. L.J. 953; Badri Rai & Anr Vs. The State of Bihar 1958 AIR 953; State of Gujarat Vs. Mohanlal Jitamalijiporwal & Anr. 1987 AIR 1321 and Bhe Ram Appellant Vs. State of Haryana AIR 1980 Supreme Court 957 to contend that it is not necessary for the prosecution to prove that the accused persons or the bank officials/ A5 and A6 got some pecuniary benefit from the said transactions. Even giving pecuniary benefits to the other abusing their official position would amount to criminal misconduct. Ld. PP submitted that although the amount was subsequently realized by the auction of the property but the very act committed by the accused persons cannot be compounded as the accused persons, A1, A2, A3, A4, A7, A8 and A9 obtained the pecuniary benefits from the above fraudulent transactions which is to be viewed seriously.

Arguments on behalf of Mukesh Jain (A1) and M/s Duro Marketing Pvt. Ltd. (A3)

37. Ld. Counsel Sh. Dhirender Singh, per contra argued that initially there were two directors namely Mukesh Jain (A1) and Anil Dhall (A2) in the Company M/s Duro Marketing Pvt. Ltd. (A3). R. G. Mundkur met Mukesh Jain (A1) and showed his interest to join the company (A3). With a common understanding, R.G. Mundkur mortgaged his property as collateral security with the bank to facilitate the business. Ld. Counsel argued that A1 neither created any document as forged nor mortgaged the above property to the bank. When R.G. Mundkur joined the company, his identity was CC No. 42/12 (25/16) 06.07.2018 133 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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not in the knowledge of A1. He came to know of this fact at a later stage. He immediately contacted the bank and proposed to replace the collateral security which fact is also evident from the testimonies of PW6 and PW7. A1 mortgaged his residential house in place of the above property which was enough to recover the amount. A1 also gave no objection as to the sale of the replaced property to settle the account of the bank. The bank kept him in dark after getting the original papers of his residential property and disposed of the property in auction. Ld. Counsel argued that A1 never intended to defraud the bank and he always acted honestly and bonafidely. Ld. Counsel stated that A1 has now been living in a tenanted house with his family in a hand to mouth existence and suffering from paralysis of complete body. A1 and A3 never cheated the bank nor created any forged document nor used fake or forged documents as genuine nor misappropriated the amount for their own use nor did any sham transactions.

Arguments on behalf of A2 Anil Dhall.

38. Ld. counsel Sh. Santosh Chaurasiya for the accused Anil Dhall (A2) contended that A2 had told CBI that sometime in November December, 2005, he was introduced to Mukesh Jain (A1) proprietor of M/s JainCo. for supervising the accounts of the firm which A1 used to prepare himself on his computer. A1 informed A2 that he intended to take loan of Rs.2.0 crore from State Bank of India for doing import business from China. He wanted the CC No. 42/12 (25/16) 06.07.2018 134 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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assistance of A2 in negotiating with the Chinese company in the financing matters and to supervise the import business. A1 approached State Bank of India for sanction of limit of Rs.2.0 crore sometime in the beginning of 2006. A1 informed (A2) that the officers of the Bank have told him that the bank cannot sanction the loan to M/s JainCo. a proprietorship firm and the loan could only be granted to a Company. A1 proposed the name of the company as M/s Duro Marketing Pvt. Ltd. (A3) and formed A3 without his knowledge. A2 never signed any document nor was the signatory to the application to the Registrar of Companies. A1 informed A2 only after the registration of the company that he has been shown as one of the directors of the Company. Ld. Counsel contended that at the time of signing of loan documents, A1 had introduced R.G. Mundkur as the third director of A3 and the owner of collateral security to avail the credit facility. A1 had mentioned in the profile that R.G. Mundkur is his relative so A2 did not suspect A1. After the loan was sanctioned, A1 entered into negotiations with the two companies. In April, 2006, A1 and A2 visited China and after negotiations, they finalized the deal with the two leading manufacturers of consumer durables. A3 was to represent as the sole selling distributor of the Chinese companies for a period of five years. For four months, A1 did not place any order to the Chinese companies. On inquiry, A1 told A2 that he did not have money to send advance. He required Rs.22 lakhs. This made A2 suspicious as about 4 months before, State Bank of India had sanctioned credit facility of Rs.2.0 crores to A3. When CC No. 42/12 (25/16) 06.07.2018 135 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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nothing fruitful came, A2 proposed to resign but A1 refused to accept his resignation stating that after Diwali, they would start the business with the Chinese Companies. A2 thereafter stopped going to the office of A3.

39. Ld. Counsel argued that in March, 2007, A1 called A2 on phone and asked him to come to his office. There A1 told A2 that he has negotiated with Union Bank of India, Sadar Bazar Branch which has agreed to take over the account of A3 from State Bank of India giving an enhanced limit of Rs.5.0 crores. A2 again asked A1 to relieve him but he told him that the loan proposal is at the advance stage, and the bank would not agree for change in the management. He told him that his resignation would be accepted on the same day when the loan documents with Union Bank of India would be signed. A2 accepted this suggestion of A1.

40. Ld. Counsel argued that the documents were signed on 30.03.2007. On the same day, he (A1) submitted his resignation. It was sent to the Registrar of Companies on 31.03.2007. The loan was disbursed to A3 on 05.04.2007. By that time, A2 was not the director of A3. Ld. Counsel argued that throughout the period of 14 months, when A3 was operating the account with State Bank of India, not a single negotiable instrument or bank correspondence was signed by A2. He never negotiated with Union Bank of India nor visited the branch regarding the loan. On the contrary, he was made a victim by A1 as he used his identity. A1 with the help of Rakesh Khurana (since expired) also opened an account in the name of A3 in Oriental Bank of Commerce, CC No. 42/12 (25/16) 06.07.2018 136 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Chawri Bazar Branch by using the copy of his passport and presented Rakesh Khurana as Anil Dhall. Ld. Counsel argued that there is no evidence which remotely suggests that A2 has been benefited in any manner out of the loan granted by State Bank of India to A3. The search at the residence of accused A2 was made by CBI, 14 documents were seized but the documents do not incriminate him. The cheque no.770313 dated 16.05.2007 for Rs.2,59,200/ Ex.PW54/67 in his name was towards his salary, given to him after statutory deductions.

Arguments on behalf of A6 Ishwar Singh Mehra:

41. Ld. counsel Sh. V.K. Ohri for the accused Ishwar Singh Mehra (A6) contended that the charges against A6 are not proved.

Testimony of PW2 reveals that A6 had been working in the Branch from 05.02.2007 to 09.02.2007 and 12.02.2007 to 22.02.2007. His letter dated 30.03.2007 Ex.PW2/Q (D488) shows that the account of A3 was taken over by Union Bank of India on 30.03.2007. CW C.P. Singh, the then Branch Manager has stated that copy of the relieving letter of A6 is not available in the office file. Ld. Counsel stated that there is no relieving letter to state that A6 was not the branch Manager at Hauz Qazi Branch in February 2007. Therefore, he could sign the letter dated 25.02.2007 as Manager of State Bank of India, Hauz Qazi Branch. Ld. Counsel contended that the loan of M/s Duro Marketing Pvt. Ltd A3 was sanctioned by the Zonal Office which fact has been stated by PW4. He has deposed that once the account is declared as NPA, CC No. 42/12 (25/16) 06.07.2018 137 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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no drawings are allowed, interest is not applied and cash credit limit of the borrower is not renewed but the statement mark DX i.e. DW6/1 shows that on 26.02.2007 cash credit limit of A3 was renewed for Rs. 1 crore. This shows that the account was not NPA even on 26.02.2007. PW4 has admitted that relieving order is issued to the outgoing branch Manager by the new Branch Manager, copy of the relieving letter is kept in the branch and one copy is sent to the office of AGM but in the present case, no relieving letter has been produced by the prosecution to substantiate its claim that A6 was relieved from the Hauz Qazi Branch. PW4 has stated that the bank account was being maintained with the help of computers using the software Core Banking System (CBS). PW4 has admitted that on 25.02.2007, he had passed the bills indicating that on 25.02.2007, the branch of the bank was open and he was on duty.

42. Ld. counsel contended that PW5 who had granted sanction has stated that he did not check from the branch whether on 25.02.2007 the branch was open for central inspection. He did not verify personally or through some official whether the account of A3 was NPA on that day or not, though he had source to verify from the record. He has stated that he had acted on the note put up before him along with the documents sent by CBI. The draft of sanction order Ex.PW5/A was submitted to him by the vigilance branch of the Bank. This shows that the sanction was granted in a mechanical manner without verifying the facts.

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43. Ld. Counsel argued that PW5 has admitted that there was only one rubber seal in the branch which was being used by the officials on behalf of the branch Manager. CW Surender Kumar has stated that from the documents, he cannot tell on which date, the account was declared as NPA by the CBS system. Ld. Counsel contended that since no relieving letter was given to A6, he signed the letter Ex.PW2/S as Manager on the date of issue of letter. Testimony of DW6 shows that as per the document Ex.DW6/1, the account was not NPA on 25.02.2007 and it was declared NPA only on 16.03.2007. Ld. Counsel argued that the contents of the letter dated 25.02.2007 issued by A6 are correct in material details. In support of his contentions, ld. counsel placed reliance on the case of Upender Pradhan vs. State of Orissa, (2015) 11 SCC 124, and Basappa vs. State of Karnataka, (2014) 5 SCC 154 to contend that if two views are possible, the view which favours the accused should be taken. Ld. Counsel argued that DW8 identified the letter Ex.DW8/1 inter alia that I.S. Mehra was deputed in State Bank of India, Hauz Qazi branch from 05.02.2007 to 09.02.2007 and 12.02.2007 to 27.02.2007. He has stated that on Sundays, the banks are closed for public but employees of the banks sometimes come and do their work. DW11 has deposed that transfer of Bank Manager would be completed only when the relieving letter is issued to the transferee Manager. He has deposed that the Core Banking System was in place in February, 2007. Ld. Counsel contended that there is not even whisper of evidence to show that A6 had in any way interacted or conspired with the coaccused CC No. 42/12 (25/16) 06.07.2018 139 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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persons to cause wrongful loss to Union Bank of India.

Arguments on behalf of A7 V.S. Pillai:

44. Ld. counsel Sh. R.K. Pillai for V.S. Pillai (A7) vehemently argued that A7 was neither the director nor the promoter nor the subscriber to the incorporation of M/s Duro Marketing Pvt. Ltd (A3). He never signed any document even remotely connecting him to the entire story of the prosecution. There is not even a single document to fasten criminal liability on A7 to rope him under the ambit of section 120B IPC. He was made a scapegoat by the prosecution to connect him with the entire chain of events.

Ld. Counsel argued that there was another entity by the same name i.e. M/s Kwality Enterprises, It was the firm of accused Rakesh Khurana who has since then expired. The depositions of PW10, PW19, PW38, PW40, PW44, PW51, PW59, PW61, PW66, DW1, DW2, DW3 and DW4 are relevant qua the accused A7. Ld. Counsel argued that the accused has rebutted all the charges and been able to prove that he had genuine business dealings with M/s JainCo and M/s Duro Marketing Pvt. Ltd in exempted items for which there was no need of sales tax registration. He had done genuine sales, purchases and maintained ledger accounts with respect to the transactions and furnished the bank statements showing the transactions. Ld. Counsel argued that DW4 has proved the defence taken by him and this witness was not crossexamined on any fact/aspect. Ld counsel contended that accused has proved that Rs. 8.0 lacs was the amount / loan due CC No. 42/12 (25/16) 06.07.2018 140 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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and payable by the accused Mukesh Jain (A1) which was transferred/taken by A7. The statement of accounts Ex.DW3/8 also reflects the same.

Arguments on behalf of A8 Ashok Bharti:

45. Ld. counsel for the accused Ashok Bharti contended that all the cheques and transactions were genuine and bona fide. CBI did not conduct the investigation fairly and filed the selected documents which do not show the true factual position. The accused was neither the signatory nor was the director/promoter of A3. He was a middle man in the trading of fabric and clothes items. He used to get commission for the same. He did not know about the loans/finances of A3. Ld. Counsel submitted that the accused is innocent and it is a case of false implication of the accused (A8).

Arguments on behalf of A5 Mahesh Chand Aggarwal:

46. Ld. counsel Sh. Manoj Chaudhary for the accused Mahesh Chand Aggarwal (A5) contended that PW2 never disclosed in his letter dated 30.03.2007 Ex.PW2/P that the account of M/s Duro Marketing Pvt. Ltd was already NPA or unsatisfactory being overdrawn. PW2 has admitted that A6 had written to the Chief Manager, Union Bank of India that the conduct of the account of A3 was satisfactory and it was a standard asset. PW4 did not tell the correct date when the account of M/s Duro Marketing Pvt.

Ltd. (A3) was declared as NPA. He has stated that as per the record Ex.PW4/A, the account was declared NPA on 01.12.2006.

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He has also stated that if an account is declared NPA, CC limit of borrower is not renewed but in the same breath, he has admitted that on 26.02.2007 CC limit of A3 was renewed for Rs. 1 crore. He has stated that in NPA account, interest is not debited but has admitted that as per Mark DX, the interest was debited on 28.02.2007. PW4 has also admitted that A5 had met him in the branch. Ld. Counsel contended that PW4 failed to disclose any reason why he did not forward the status of the account of A3 being NPA to A5. Ld counsel stated that inspite of specific visit of A5, none of the officials of State Bank of India including the Branch Manager revealed the status of the account of A3 rather they chose to conceal the same on one pretext or the other.

47. Ld. counsel argued that GRID and RMD had examined the proposal and the sanction was granted by the AGM. Loan of A3 was taken over after carrying out possible due diligence at that time. PW7 has admitted that intention of the accused (A5) was good enough to replace the disputed property with the appropriate property to secure the loan taken from the bank. Testimony of PW15 shows that the property was vacant and it was not occupied by anyone. He was also shown the title documents by the Manager (Advances) J.B. Handa including NOC from DDA. Ld. Counsel argued that it was J.B. Handa not A5 who had processed the proposal. PW20 has admitted that J.B. Handa was the incharge of the advances department and had recommended the proposal. PW20 has stated that after the loan was sanctioned, the disbursement and other functions were carried out by the advances CC No. 42/12 (25/16) 06.07.2018 142 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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department and A5 did not have any role to play. Surprisingly, J.B. Handa was made as witness and A5 was arrayed as an accused. PW39 has stated that he did not see anything wrong in the processing at any level. PW49 has admitted that there was no deficiency in the proposal and the documents sent with the proposal. PW49 has stated that whenever overdrawl facility is granted beyond the delegated powers of the branch, fortnightly statement is sent to the higher authorities. PW57, the panel advocate has submitted the legal search report Ex.PW57/A in respect of the property as per which there was no encumbrance on the property. He had verified the record of the SubRegistrar and found the property registered in the name of R.G. Mundkur. He has taken a wrong excuse of overlooking the Sr. Number 76435 in place of 7463 on the copy of the perpetual lease deed. Surprisingly, he was made as witness and A5 was arrayed as an accused. PW58 and PW60 never stated that A1 had sent them to give bribe/money to A5. Ld. Counsel stated that it was because of efforts of A5, the fraud was detected. He himself brought it to the notice of the higher authorities and due to his tireless efforts, another property was mortgaged which was finally sold by the bank and no loss was caused to the bank as the disbursed amount was fully recovered. The defence witnesses have substantiated the defence of the accused. Ld. Counsel contended that the account was audited by the audit branch and no irregularity was noticed by the team. The accused while deposing as DW14 has explained all the circumstances and successfully proved his defence.

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48. Ld. Counsel argued that the facts & circumstances make it clear that Mr. Kharbanda (DW11) wanted to transfer the account of A3 from State Bank of India by all means to some other bank as it had become irregular. On his directions, accused I.S. Mehra temporarily worked in Hauz Qazi Branch to prepare the reply of the letter dated 25.01.2007. Correct status of account from Union Bank of India was concealed. Mr. Kharbanda (DW11), A.K. Fotedar (PW4), K.D. Sharma (PW2) and I.S. Mehra (A6) had connived with the accused Mukesh Jain (A1) to facilitate the taking over of the account of A3 from State Bank of India by Union Bank of India.

49. Ld. Counsel contended that the prosecution failed to establish that A5 was having knowledge that account of A3 with State Bank of India was not satisfactory. He was kept in dark by the officials of State Bank of India. It was never brought to his knowledge that the account was NPA. He was misled by the letter sent by I.S. Mehra (A6) confirming the account being satisfactory. The prosecution is uncertain about the date when the account was declared NPA by the State Bank of India. Ld. Counsel contended that A5 never met I.S. Mehra. He, after receipt of that letter, became satisfied regarding the status of the account. Ld. Counsel argued that there is no evidence which could establish that A5 had prior meeting either with A1 or A6 before forwarding the proposal of taking over of the account of A3. Qua the allegations of sending wrong information about R.G. Mundkur, giving different CC No. 42/12 (25/16) 06.07.2018 144 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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reasons for taking over of the account and merger of CC Limit and LC Limit, ld. Counsel submitted that A5 relied upon the information given by A1. He had no reason to doubt his credentials. Further, A1 had given a letter dated 03.04.2006 that the request of merger of LC Limit with CC Limit was approved by the State Bank of India. It was A5 who had blown the whistle by informing the higher authorities but he was made scapegoat in whole of the process and a false case was slapped on him. In support of his contentions, ld counsel referred the circular classifying the rules of NPA and relied upon the cases viz. Arunwan Thamvaro vs. State 119 (2005) DLT 433 Delhi High Court, S.V.IL. Murthy vs. State rep. by CBI, Criminal Appeal No. 942 of 2009 Supreme Court of India and Ani Maheshwari Vs. CBI, Crl. A. 1455 of 2012 Delhi High Court.

50. I have bestowed my thoughtful consideration on the contentions raised by the parties and gone through the statements of witnesses and the documents on record and also the case laws referred during the course of arguments.

The accused persons have been charged for committing the offence of criminal conspiracy, cheating, making forged documents, using forged documents as genuine and resorting to corrupt practics. Before adverting to the merits of the rival contentions, brief review of the offences invoked against accused persons would be necessary and relevant:

Section 120B IPC provides punishment for criminal conspiracy. Criminal conspiracy is defined u/s 120A IPC. To CC No. 42/12 (25/16) 06.07.2018 145 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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constitute the offence of criminal conspiracy, following ingredients must exist:

(1) There should be an agreement between two or more persons who are alleged to conspire;

(2) The agreement should be to do or cause to be done:

(i) an illegal act, or

(ii) an act which may not itself be illegal by illegal means.

Section 419 IPC defines punishable for cheating by personation __ whoever cheats by personation shall be punished with imprisonment........ A person is said to "cheat by personation" if he cheats by pretending to be some other person, or by knowingly substituting one person for another, or representing that he or any other person is a person other than he or such other person really is.

Section 420 IPC defines 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".

To constitute the offence of cheating, following ingredients must exist:

1. That the representation made by the accused was false;

2. That the accused knew that the representation was false at the very time when he made it;

3. That the accused made the false representation with the dishonest intention of deceiving the person to whom it was made; and CC No. 42/12 (25/16) 06.07.2018 146 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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4. That the accused thereby induced that person to deliver any property or to do or to omit to do something which he would otherwise not have done or omitted.

Section 468 IPC defines forgery for purpose of cheating. To invoke this section, following ingredients must exist:

1. The documents or electronic record is forged;

2. The accused forged the documents or electronic record;

3. The accused forged the document or electronic record intending that the forged document would be used for the purpose of cheating.

Whoever makes any false documents or false electronic record with intend to cause damage or injury to the public or to a person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intend to commit fraud or that fraud may be committed, commits forgery. A person is said to make a false document or electronic record who dishonestly or fraudulently makes, signs, seals or executes a document or part of a document ........ with the intention of causing it to be believed that such document or part of document....... was made, sign, sealed, executed, transmitted or affix by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; ........

Section 471 IPC defines using any document or record as genuine fraudulently and dishonestly. To invoke this section, following ingredients must exist:

1. The document or electronic record is a forged one;

2. The accused used the document or electronic record as genuine;

3. The accused knew or had reason to believe that it was a forged document or electronic record;

4. The accused used it fraudulently or dishonestly, knowing or having reason to believe that it was a forged document or electronic record.

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Section 474 IPC prescribes punishment for having possession of documents described in Section 466 or 467 IPC knowing it to be forged and intending to use it as genuine. Whoever has in his possession any document or electronic record, knowing the same to be forged and intending that the same shall be fraudulently or dishonestly be used as genuine, shall, if the document or electronic record is one of the description mentioned in section 466 of this Code be punished.....; and if the document is one of the description mention in Section 467, shall be punished......

Section 466 IPC defines punishment for forgery of record of Court or of public register, etc. Section 467 IPC defines punishment for forgery of valuable security, will, etc. Section 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988 reads as follows:

13 Criminal misconduct by a public servant: (1) A public servant is said to commit the offence of criminal misconduct

(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;

(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment ..........

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51. To appreciate the evidence in a better perspective, it is important to reproduce the following data / evidence:

(a) Details of the accounts opened / maintained by the parties at the relevant time with different Banks/ Branches.

(i) M/s JainCo, Proprietor Mukesh Jain (A1), 2646, Ballimaran, Delhi had opened a current account no. 5327 on 27.05.2000 with Oriental Bank of Commerce, Darya Ganj Branch vide Ex.PW42/A (D126). The account was converted into account no. 0013101007610 consequent upon the computerization of branch (CBS system) vide Ex.PW50/D dated 04.12.2008 (D

132). M/s JainCo was registered with the Sale Tax Department on 06.11.1989 (D379 page 113). The statement of account for the period from 01.04.2007 to 31.12.2007 is Ex.PW50/C (D131).

(ii) Mukesh Jain (A1) r/o C4/145, SDA, New Delhi, had opened a saving bank account no. 00132151001220 on 20.06.2007 Ex.PW61/D (D467) with Oriental Bank of Commerce, Darya Ganj Branch. At the time of opening of account, he had submitted application form, specimen signature, photocopy of PAN Card, Passport and customer profile. The account was introduced by Gautam Gupta of Vinayak Traders. The statement of account for the period from 20.06.2007 to 31.03.2008 is part of Ex.PW50/E2 (D682).

(iii) M/s Kwality Enterprises, Proprietor V.S. Pillai (A7), R82, CC No. 42/12 (25/16) 06.07.2018 149 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Ramesh Park, Laxmi Nagar, Delhi had opened a current account no. 04881011003206 on 04.05.2007 Ex.PW10/C (D309). He had submitted his specimen signature, photocopy of PAN Card AAYPS1094E and electricity bill. The account was introduced by JainCo, proprietor Mukesh Jain A/c No. OD 5327. The statement of account for the period from 06.05.2007 to 31.12.2007 is Ex.PW10/E (D310).

(iv) Rakesh Khurana (A9), proprietor Kwality Enterprises at B11/2, Okhla, New Delhi had opened account no. 5523 on 18.06.2003 with Oriental Bank of Commerce, Darya Ganj Branch vide Ex.PW42/C (D511). The account was introduced by Aggrolios and Co. PA No. 1568. At the time of opening of account, he had submitted photocopy of Saral and Ration Card. The statement of account for the period from 01.01.2007 to 31.03.2008 is Ex.PW50/E2 (D682).

(v) M/s Sharma Enterprises, proprietor Ashok Bharti (A8) 2651, Ballimaran, Delhi had opened a current account no. 02551011002265 on 06.03.2006 with Oriental Bank of Commerce, Shahdara vide Ex.PW38/B (D540). The account was introduced by Balvikapraku Pvt. Ltd, CC no. 610. At the time of opening of account, he had submitted photocopy of PAN card of Sharma Enterprises and Election Card of Ashok Bharti. The statement of account for the period from 01.04.2007 to 31.12.2007 is Ex.PW38/F (D582).

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(vi) M/s Shiv Shakti Udyog, proprietor Ashok Bharti (A8), 2651, Ballimaran, Delhi, had opened current account no. 12001011001647 with Oriental Bank of Commerce, Preet Vihar, Delhi on 24.04.2007 Ex.PW44/B (D584). At the time of opening of account, he had submitted copy of election card and PAN Card of Ashok Bharti. The account was introduced by JainCo. The statement of account for the period from 23.04.2007 to 31.12.2007 is Ex.PW44/F (D731).

(vii) M/s Shiva Sales Corporation, Proprietor V.S. Pillai (A7) 68A , Krishan Kunj, Laxmi Nagar, Delhi, had opened a saving fund account no. 1008 Ex.PW16/A (D579) on 10.09.2005. The statement of account for the period from 01.06.2007 to 31.07.2007 is Ex.PW16/C (D580).

(viii) M/s Mohan Dass and Co, Proprietor V.S. Pillai (A7), R 82/5, Ramesh Park, Laxmi Nagar, Delhi had opened Cash credit account (CC account) No. 12004011000092 with Oriental Bank of Commerce, Preet Vihar on 04.06.2007 vide Ex.PW44/C (D

585). Copy of PAN Card and Electricity bill of V. Satyapalan were submitted at the time of opening of account. The account was introduced by Mohan Dass and Co. Account no. 12001131001923. The statement of account for the period from 03.06.2007 to 31.12.2007 is Ex.PW44/G (D732)

(ix) M/s Mohan Dass and Co., Proprietor, V.S.Pillai (A7) R CC No. 42/12 (25/16) 06.07.2018 151 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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82/5, Ramesh Park, Laxmi Nagar, Delhi had opened OD account no. 12005011000235 on 20.07.2007 with Oriental Bank of Commerce, Preet Vihar Branch vide Ex.PW44/D (D586). It was introduced by Mohan Dass and Co. account no. 12001131001923. Copy of PAN Card and Electricity bill of V. Satyapalan were submitted at the time of opening of account. The statement of account for the period from 19.07.2007 to 31.12.2007 is Ex.PW44/H (D733).

(x) Vinod Khanna (A4) B2/52, Ground Floor, Safdarjung Enclave, New Delhi, had opened a saving bank account no. 1305101027323 on 02.09.2004 with Canara Bank, Munirka, New Delhi vide Ex.PW12/B (D121). At the time of opening of account he had given his PAN no. AGLPK2659N. The account was introduced by Kanav Creation, B65, Paschmi Marg, Vasant Vihar, New Delhi (current account no. 1648. At the time of opening of account, he had mentioned his occupation as 'business' and date of birth as 12.07.1952. The statement of account for the period from 01.01.2006 to 10.01.2009 is Ex.PW8/C (D499).

(xi) Anil Dhall (A2) 493, Ground floor, Sector31, Gurgaon, had opened a joint saving bank account no. 30014992257 with State Bank of India, Sushant Lok Branch, Gurgaon on 12.09.2005 vide Ex.PW23/A (D695). At the time of opening of account, he had submitted photocopy of his passport and that of his son Kshitiz Dhall and Form 16 of Kshitiz Dhall.

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(xii) M/s Duro Marketing Pvt. Ltd (A3), Directors Mukesh Jain, Anil Dhall and R.G. Mundkur 2646, Ballimaran, Delhi, had opened a current account no. 01600005687 on 06.02.2006 with State Bank of India, Hauz Qazi Branch vide Ex.DW11/P1A page 405 of D379. In the account opening form photos of all the three directors were affixed. It was signed by Mukesh Jain, Anil Dhall and R.G. Mundkur. As per the account opening form, the account was to be operated by Mukesh Jain and Anil Dhall jointly or severely.

(xiii) M/s Duro Marketing Pvt. Ltd (A3), Directors Mukesh Jain, Anil Dhall and R.G. Mundkur 2646, Ballimaran, Delhi, had opened current account no. 307501010133539 with Union Bank of India on 27.12.2006. The account was to be operated by Mukesh Jain and Anil Dhall. The form Ex.PW34/B (D7) and specimen signature card Ex.PW34/A bear the photographs and signatures of all the three directors. Alongwith the form, copy of PAN card of M/s Duro Marketing Pvt. Ltd dated 06.01.2006 no. AACCD2962K, copy of resolution dated 29.12.2006 Ex.PW34/C2 (incorporating M/s JainCo w.e.f 01.01.2006), Memorandum of Articles of Association Ex.PW34/C3 showing Mukesh Jain and Anil Dhall as directors, brief profile of Mukesh Jain, Anil Dhall, R.G. Mundkur were submitted. The statement of account for the period from 01.03.2007 to 11.09.2008 is Ex.PW20/D2 (D34 page 17 ).

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(xiv) M/s Duro Marketing Pvt. Ltd (A3), Directors Mukesh Jain, Anil Dhall and R.G. Mundkur 2646, Ballimaran, Delhi, had opened cash credit account no. 307505040132415 with Union Bank of India, Sadar Bazar Branch on 30.03.2007. The statement of account for the period from 30.03.2007 to 11.09.2008 is Ex.PW2/D2 (D34 page 18 ).

(xv) M/s Duro Marketing Pvt. Ltd (A3), Directors Mukesh Jain and Anil Dhall 2646, Ballimaran, Delhi, had opened current account no. 00151011001439 with Oriental Bank of Commerce, Chawri Bazar Branch on 17.10.2006 vide Ex.PW17/B (D627). In the account opening form, photos of two directors were affixed. The account was introduced by Kishori Lal Agency, Prop. D.K. Srivastva, CA no. 21425. In the account opening form, the address of Anil Dhall was mentioned as 886, Vikas Kunj, Vikas Puri, New Delhi. With the account opening form, copy of resolution dated 16.10.2006 Ex.PW17/C, copy of telephone bill of Duro Marketing Pvt. Ltd Ex.PW17/D1, PAN Card of Duro Marketing Pvt. Ltd dated 06.01.2006, AACCD2962K Ex.PW17/D2, copy of driving licence of Mukesh Jain Ex.PW17/D3, photocopy of passport of Anil Dhall Ex.PW17/D1 showing the above address, customer relationship information Ex.PW17/D7, Memorandum of Articles of Association Ex.PW17/D9 were submitted. It is pertinent to mention that the photograph and the documents submitted with the account opening form were not of Anil Dhall and someone CC No. 42/12 (25/16) 06.07.2018 154 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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had impersonated himself as Anil Kumar Dhall. The statement of account for the period from 01.01.2007 to 31.12.2007 is Ex.PW17/F (D628). The account was closed on 12.02.2008.

(xvi) M/s Duro Marketing Pvt. Ltd (A3), Directors Mukesh Jain and R.G. Mundkur 2646, Ballimaran, Delhi, had opened current account no. 23728 on 04.06.2007 Ex.PW47/B (D688) with Andhra Bank, R.K. Puram, New Delhi. The account opening form and the signature card had the photos of Mukesh Jain and R.G. Mundkur. A resolution dated 01.06.2007 was also enclosed along with the Memorandum of Articles of Association of Duro Marketing Pvt Ltd, photocopy of passport of Mukesh Jain, Election Card of R.G. Mundkur showing his age as 54 years as on 01.01.1996, particulars of the directors in form 32 Ex.PW47/B7 as per which Ram Gopal Mundkur (R.G. Mundkur) was appointed as director in the company on 18.01.2006. The statement of account for the period from 04.06.2007 to 29.12.2008 is Ex.PW47/C (D689). The account was closed on 20.09.2007.

(xvii) M/s Supreme Traders, Prop. Mukesh Jain (A1) 2645, First Floor, Ballimaran, Delhi, had opened current account no. 00131011000663 with Oriental Bank of Commerce, Darya Ganj Branch on 20.06.2007 vide Ex.PW42/B2 (D125). Along with the account opening form, Mukesh Jain had given copy of PAN Card AAHPJ4980D in his name Ex.PW50/A1, copy of passport Ex.PW50/A2 and customer relationship information Ex.PW61/A. CC No. 42/12 (25/16) 06.07.2018 155 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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The statement of account for the period from 19.06.2007 to 31.12.2007 is Ex.PW50/B (D130).

(xviii) Letter from Union Bank of India to State Bank of India for knowing the status of the account of M/s Duro Marketing Pvt. Ltd., dated 25.01.2007 Ex.DW14/5 (D481) ADV: 2007 RC.5/E/08 Dt. 25.1.2007 MR 33/09 To, B. Manager, State Bank of India Hauz Qazi, Delhi Private & Confidential Sir, M/s Duro Marketing Pvt. Ltd.

We shall be obliged, if you will favour with your opinion in confidence as the means standing and responsibility of M/s Duro Marketing Pvt. Ltd.

2646 - Ballimaran, Delhi.

Please also give us a ....... of your experience with the party. Any information you will give to us will of course be treated as private & confidential.

Thanking you, Yours faithfully, sd/ Chief Manager

(xiv) Reply by State Bank of India in response to the letter of Union Bank of India by I.S. Mehra (A6) on 25.02.2007 Ex.PW2/S (D37) No. BM/2006/07/201 Q494 Dt. 25.2.2007 To, Chief Manager, Union Bank of India 6117, Qutab Road Corner Sadar Bazar, Delhi110006 Dear sir, M/s Duro Marketing Pvt. Ltd.

With reference to your letter no. Adv:2007 dated 25.01.2007 we advise that the captioned company is enjoying Fund base/ Non CC No. 42/12 (25/16) 06.07.2018 156 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Fund base working capital limit of Rs. 2.00 (Rs. Two Crores only), and the conduct of the account is satisfactory. The account is classified as standard Asset at out branch. Yours faithfully, Sd/ Branch Manager Hauz Qazi Delhi

(xv) Letter by Union Bank of India to State Bank of India regarding payment of loan amount of Rs. 2.25 crores to State Bank of India and for return of property documents dated 30.03.2007 Ex.PW2/Q (D488) ADV No. 2007 Dt. 30.03.2007 To, Branch Manager, State Bank of India Hauz Qazi Delhi110006 Sir, M/s Duro Marketing Pvt. Ltd.

We are enclosing herewith one pay order No. 38283 dt. 30.3.2007 for Rs. 2,25,00,000/ (Two Crores Twenty Five Lacs only) was the outstanding with aforesaid account. Since we have sanctioned the credit facilities to the aforesaid firm. You are requested to hand over the property paper and other documents to this branch of the letter with signature is attested below. Letter of the property owner is also enclosed. Thanking you Yours faithfully, Sd/ Branch Manager Sadar Bazar Delhi (xvi) Letter by Duro Marketing Pvt. Ltd to State Bank of India for conversion of sanction LC limit of Rs. 50.0 lacs into CC limit dated 03.04.2006 Ex.PW39/B (D117 page 378).

                                                                                          Dt. 03.04.2006
                       To,
                       The Manager, 


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                       State Bank of India
                       Hauz Qazi Branch
                       Delhi110006
                       Dear sir, 
                       Sub:      Conversion of our sanctioned LC Limit of Rs. 50.00  
                       Lacs into CC limit.

First of all let us thank you for making us a part of the State Bank family. It is indeed a privilege to be interacting with such an organisation on daytoday basis.

In our proposal papers, submitted to you in January 2006, we had given an estimated turnover of Rs. 2500.00 Lacs. But we are proud in announcing to you that we have achieved a total turnover of Rs. 2704.90 Lacs, an increase of 8.20% over and above the estimates. We have earned Net Profit (Provisional) of Rs. 10.48 Lacs against the estimated Net profit of Rs. 9.50 Lacs, thereby making a jump of nearly 10.32%.

We are sure Sir, that you shall feel proud of these achievements, which any way would not have been possible without your support and help.

Taking into consideration the fact that we can make stupendous increase in our business by our undaunted hard work and determination, provided it is backed by your financial help, we are making this request of letting us make use of the Letter of Credit Limit as a regular C C Limit, which shall help us in consolidating our financial position in the market. We are sure Sir, that our request shall find a favorable and just response from your end.

Thanking you, Yours faithfully, Sd/ For Duro Marketing Pvt. Ltd.

Director (xvii) Letter by State Bank of India to Union Bank of India regarding no dues outstanding and for acknowledging the original documents of the property dated 04.04.2007 Ex.PW63/B (D16) No. 2007/044 Dt. 04.04.2007 To, Chief Manager, Union Bank of India Sadar Bazar, Delhi CC No. 42/12 (25/16) 06.07.2018 158 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Dear sir, M/s Duro Marketing Pvt. Ltd., Ballimaran, Delhi. With reference to the above we have to advise that M/s Duro Marketing P. Ltd. was sanctioned a ck Limit for Rupees Two Crores Only. Now the account has been taken over by you, and presently there is no dues outstanding on behalf of the above firm as on date.

Yours faithfully, Sd/ Branch Manager Hauz Qazi Delhi Original perpetual sub lease deed dated 9.12.1970 favoring Mr. R G Mudkar Reg. No. 76435 dated 14.12.19701 of property no. A52, Vasant Marg, New Delhi is enclosed.

Sd/ Branch Manager (A) Formation of M/s Duro Marketing Pvt. Ltd (DMPL A3)

52. A bare perusal of the documents would reveal that Mukesh Jain (A1) was the distributor / trader of foam Products, adhesives, accessories and cotton fabric in North India. He was a commerce graduate and was engaged in this activity since 1989. He was the proprietor of M/s JainCo having his office at 2646, Ballimaran, Delhi. M/s JainCo had a current account with Oriental Bank of Commerce at Darya Ganj Branch, Delhi which was opened on 27.05.2000 vide account opening form Ex.PW42/A (D126). M/s JainCo had another account with Andhra Bank, R.K. Puram, New Delhi. Mukesh Jain (A1) had prior acquaintance with Anil Dhall (A2) who claimed to be a Cost Accountant having an expertise of more than 20 years dealing with various aspects of business. Mukesh Jain (A1) wanted to expand his business. Mukesh Jain (A1) and Anil Dhall (A2) formed a company namely M/s Duro Marketing Pvt. Ltd (M/s DMPL A3). It was incorporated on CC No. 42/12 (25/16) 06.07.2018 159 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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06.01.2006 with two Directors namely Mukesh Jain and Anil Dhall vide Certificate of Incorporation dated 06.01.2006. The authorized capital of the company was Rs. 1.0 lac which was proposed to be increased to Rs. 100.0 lacs. The proprietory firm of Mukesh Jain i.e. M/s JainCo entered into an agreement on 07.01.2006 with M/s DMPL (A3) having its registered office at 2646, Ballimaran, New Delhi (D117 page 302) whereby A3 agreed to purchase the business of M/s JainCo with movable, fixed assets, benefits of subsisting contracts, stock in trade, book debt, cash in hand and at the bank and all other assets of M/s JainCo relating to the business as on 31.12.2005 for a consideration of Rs. 74,99,216/ (in addition to the debts and liabilities) to be satisfied by the allotment to M/s JainCo/ Mukesh Jain in equal proportion of ordinary shares of Rs. 10/ each in the capital of the company credited as fully paid up. It was agreed upon that M/s DMPL (A3) shall purchase the business subject to all the debts and liabilities of the vendor in respect thereof as on 31.12.2005. It was also undertaken by M/s JainCo/Mukesh Jain not to carry on the business of trading, manufacturing, import, export of foam products, clothes, readymade garments and electronic goods in its / his own name or in the name of any person or otherwise for a period of three years from the date thereof. It was also agreed that the Sales Tax, TIN number of M/s DMPL (A3) would be the same as that of M/s JainCo for all purposes.

53. M/s DMPL (A3) applied to the Registrar of Companies for CC No. 42/12 (25/16) 06.07.2018 160 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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inclusion of R.G. Mundkur as its third Director and for increase of its authorized capital. R.G. Mundkur had retired from a Govt. Job. He was the owner of the premises/building situated on the plot bearing no. A52, Vasant Marg, Vasant Vihar, New Delhi which was a lease hold property. A Perpetual SubLease Deed Ex.PW52/C (D134) dated 09.12.1970 was registered in his favour on 14.12.1970 vide document no. 7643 Book No. 1 Volume no. 2540 pages 182188 by the SubRegistrarIII which fact is also proved by PW36 and PW48 in their testimonies. He stated that a complaint was received from the Secretary of the Society that the above property has been sold under Power of Attorney to Major P.S. Mehalawat. Since the permission was not taken for the sale of the above plot, with the orders of the Hon'ble Lt. Governor Delhi, the SubLease Deed in his favour was determined/terminated vide order dated 14.12.1988. Major P.S. Mehalawat took up the matter before the High Court where matter is subjudice. As per the record of DDA, the property is still in the name of R.G. Mundkur.

54. In view of the above fact, it is clear that M/s Duro Marketing Pvt.

Ltd (A3) was formed on 06.01.2006. Mukesh Jain (A1) and Anil Dhall (A2) were the promoter directors of A3. A3 took over the assets and liabilities of M/s JainCo, a proprietorship firm of Mukesh Jain (A1). R G Mundkur, the owner of the property bearing No. A52, Vasant Vihar, New Delhi, was inducted as the third director in the company M/s Duro Marketing Pvt Ltd. (A3) on 18.01.2006.

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(B) Sanction of Cash Credit Limit of Rs. 100.0 lacs; Book Debt limit of Rs. 50.0 lacs; Letter of Credit (inland and foreign) of Rs. 50.0 lacs by State Bank of India, Hauz Qazi branch, New Delhi.

55. On a perusal of testimony of PW2 and the loan application Ex.PW2/A (D379 page 189), I find that M/s DMPL (A3) had requested the branch manager Ishwar Singh Mehra (A6), State Bank of India, Hauz Qazi Branch, Delhi for sanction of working capital loan of Rs. 200.0 lacs (CC Limit of Rs. 100.0 lacs; book debt limit of Rs. 50.0 lacs; letter of credit (inland and foreign): Rs. 50.0 lacs) introducing itself as one of the leading distributors of foam products in North India and in trade for the last 16 years. With the application, Mukesh Jain (A1), had enclosed the financial credentials documents Ex.PW2/A1 to Ex.PW2/A10 and offered the above built up residential property owned by R.G. Mundkur as collateral security. He also enclosed photocopy of the above Perpetual SubLease Deed. Board resolutions dated 06.01.2006 Ex.PW2/A12 and dated 09.01.2016 Ex.PW2/A13 were also submitted as per which Mukesh Jain and Anil Dhall were authorized to sign the documents and do all the formalities. A board resolution dated 13.01.2006 Ex.PW2/A11 was submitted whereby it was resolved that the share capital of the company has been increased from Rs. 1.0 lac to Rs. 100.0 lacs. The proposal was processed by A6 and PW2 vide Ex.PW2/B and sent to the Zonal Office Credit Committee. It was mentioned in the proposal that the Unit is the distributor of M/s R.P. Foam Home Pvt. Ltd, CC No. 42/12 (25/16) 06.07.2018 162 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Bulandshahar, UP, M/s Freedom Foams Pvt. Ltd, Bulandshahar, UP, M/s Panama Poly Products Pvt. Ltd, Ghaziabad, UP and M/s Shakti Foam Udyog, Ballabhgargh, Haryana. The market value of the property was got assessed through the valuer M/s A. Khanna & Associates at Rs.1335.89 lacs. A certificate from the Advocate Sh. J.S. Rawat was taken as per which the property was free from encumbrances. It was mentioned that the Branch Manager had visited the site of the property and NOC to mortgage the property is being obtained from the authority. The proposal was processed and sanctioned by the Committee vide sanction letter dated 01.02.2006 Ex.PW2/D for fund based C.C.(Hyp.) for Rs. 1.00 crore, C.C. (B.D) for Rs. 0.50 crores. (total fund based working capital of Rs.1.50 crore) and non fund based L.C for Rs. 0.50 crore. (Total FB+NFB Rs. 2.00 crore). It was stipulated "Branch to ensure registration of charge with ROC in respect of induction of the third director Sh. R G Mundkur as also increase of authorized capital to Rs. 100.0 lacs before disbursement of the loan".

56. It is relevant to mention that as per the Memorandum and Articles of Association of M/s DMPL (A3), there were two directors, namely, Mukesh Jain and Anil Dhall. R.G. Mundkur was inducted as third director on 18.01.2006. Form 32 Ex.PW47/B7 (D688) in this respect was claimed to have been submitted, but, there is no record to indicate that the name of R.G. Mundkur as third director was approved by the Registrar of Companies or the authorized capital to Rs. 100.0 lacs was increased. Nevertheless, there is a CC No. 42/12 (25/16) 06.07.2018 163 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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certificate of M/s Hamesh Madan and Associates, Chartered Accountant dated 20.05.2006 (page 160 D117) as per which the authorized share capital of M/s DMPL (A3) was Rs. 100.0 lacs with following shareholders:

1. Ganesh Ji Maharaj 11,000.00

2. Mukesh Jain 89,99,000.00

3. Anil Dhall 9,00,000.00

4. Ram Gopal Mundkur 90,000.00

57. It was stipulated in the terms & conditions of sanction letter that all the immovable properties offered as a collateral security shall be inspected by the field staff once before the disbursement and the cash credit renewal would be done on annual basis on the basis of level of activity, credit summations in the account, interest serviced upon previous quarter end.

58. M/s DMPL (A3) opened an account No. 01600005687 with the State Bank of India on 06.02.2006 Ex.DW11/P1A (D379 page

304). In the account opening form, photos of all the three directors were affixed. All the directors had given their specimen signatures. The account was introduced by Mukesh Jain (A1). Letter of arrangement Ex.PW2/E1 (D372), terms & conditions Ex.PW2/E2 & Ex.PW2/E3, Agreement of loan cum hypothecation Ex.PW2/F1 (D374), Guarantee Agreement Ex.PW2/G(D375), Memorandum of recording of creation of mortgage by deposit of title deeds Ex.PW2/H (D376), letter of confirmation for creation of mortgage by deposit of Title Deeds Ex.PW64/C30 (D377), letter of confirmation for extension of CC No. 42/12 (25/16) 06.07.2018 164 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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mortgage by deposit of title deed Ex.PW2/J (D378) were executed. The documents were signed by all the directors including R.G. Mundkur and their photographs on Ex.PW2/E3 were also affixed. The documents were also signed by I.S. Mehra A6.

59. Testimony of PW2 and the document Ex.PW2/K (D379 page

190) dated 28.01.2006 would show that A6 had written a letter to Dy. Director (Housing), DDA seeking 'No Objection' qua the mortgage of the property at Vasant Vihar by R.G. Mundkur. Reminders dated 23.02.2006 Ex.PW2/L (page 210 D379), dated 20.07.2006 Ex.PW2/M etc were also sent to DDA. PW52 has stated that the letter dated 23.02.2006 was received in DDA. Along with the letter, copy of Perpetual SubLease Deed was also received wherein registration number of the property was shown as 76435 but as per the DDA record, the registration number was 7643. Thus, the copy of the sublease deed received alongwith the letter was different from the original sublease deed in respect of the particulars and the registration number. He stated that vide letter dated 28.03.2006 Ex.PW2/F (D134), DDA had informed R.G. Mundkur that the permission cannot be granted to mortgage the property as the perpetual sublease deed has already been cancelled. He stated that a reminder dated 18.05.2006 was received from the bank vide Ex.PW2/N and vide letter dated 26.09.2006 Ex.PW2/O, DDA had informed the bank that the permission cannot be granted to mortgage the above property.

60. It is pertinent to mention that a letter dated 30.01.2006 CC No. 42/12 (25/16) 06.07.2018 165 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Ex.PW62/B (D19) was submitted on behalf of M/s DMPL (A3) purportedly issued by Dy. Director L.A (Residential) Sh. R.K. Sharma. Testimony of PW62 reveals that on 30.01.2006, R.K. Sharma was never the Dy. Director, L.A. Rather on that day, he (PW62) was posted there. He has stated that no person in the name of R.K. Sharma was posted as Dy. Director, L.A. (Residential) prior to him and the said letter was forged by someone granting permission to R.G. Mundkur to execute the equitable mortgage in favour of State Bank of India, Hauz Qazi Branch.

61. Record shows that State Bank of India had written number of letters to DDA seeking 'No objection' to mortgage the property even after the so called letter dated 30.01.2006 Ex.PW62/B. Though PW52 has stated that the letters were replied by DDA declining 'No objection' but the same never remained part of the State Bank of India official record. I fail to understand when no such permission had been coming from DDA despite reminders, why A6 or his official not visited the DDA office to verify the status of the property and to know why 'No objection' was not being given. No explanation came from the side of A6 though it was stipulated in the legal search report of the Panel advocate and the sanction letter that before releasing the loan, 'No objection' be obtained from DDA but in the instant case, without obtaining the 'No objection' as evident from the correspondence and the record, the limits were released.

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62. From the above, it is clear that CC Limits of Rs.100.0 lacs, book debts limit of Rs.50.0 lacs and LC limit of Rs.50.0 lacs were sanctioned in favour of M/s Duro Marketing Pvt Ltd (A3) by State Bank of India, Hauz Qazi branch, New Delhi. R G Mundkur mortgaged the property bearing No. A52, Vasant Vihar New Delhi as collateral security. Forged/false sublease deed of the above property was deposited as collateral security. Ishwar Singh Mehra A6, Branch Manager, State Bank of India released the limits relying upon the 'No objection' submitted by A3 claiming to have been received from DDA qua the permission to mortgage the property without verifying from DDA which infact had declined to grant 'No objection' to R G Mundkur to mortgage the above property.

(C) Proposal for taking over the loan account of M/s Duro Marketing Pvt. Ltd. (A3) by Union Bank of India, Sadar Bazar Branch from State Bank of India, Hauz Qazi Branch, Delhi and sanction of enhanced credit limits by Union Bank of India, Sadar Bazar Branch, Delhi.

63. PW3 J.B. Handa, Manager (Advances) Union Bank of India has stated that in December, 2006, Mukesh Jain (A1) had approached the Bank for taking over the loan account of DMPL (A3) interalia stating that he is not satisfied with the services of State Bank of India, Hauz Qazi Branch, higher rate of interest is being charged and the limit is not enhanced by the Bank despite assurance. PW3 has stated that M/s DMPL (A3) opened a current account no. 307501010133539 on 27.12.2006 vide account opening form CC No. 42/12 (25/16) 06.07.2018 167 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Ex.PW34/B (D7). He proved the specimen signature card Ex.PW34/A (D7) bearing the signatures and photographs of all the three directors. He stated that the accused Mukesh Jain used to visit the bank and meet the accused M.C. Aggarwal, Chief Manager.

64. Perusal of the documents would reveal that the copy of PAN card of M/s DMPL (A3) dated 06.01.2006, copy of resolution dated 29.12.2006 Ex.PW34/C2, Memorandum & Articles of Association Ex.PW34/C3 and brief profiles of all the three directors were submitted with the proposal. PW63 has stated that the appraisal work of the loan account was done by the accused M.C. Aggarwal (A5). Preinspection visit of the premises of M/s DMPL (A3) was made by A5 on 29.12.2006. A5 also visited the property which was offered to be mortgaged i.e. A52, Vasant Marg, Vasant Vihar along with the valuer K.G. Saini and collected the documents from the borrower.

65. Perusal of the request letter Ex.PW564/C1C2 (D5) dated 11.12.2016 would reveal that M/s DMPL (A3) had introduced itself as one of the leading distributors of PU Foam products for whole of India. It was stated that the results for the financial year 20052006 are satisfactory. They have set higher goals for themselves. They have also started import and trading of other commodities from China. They have entered into import agreement with the manufacturers in China for supply of napkin dispenser machines etc. and increased the authorized capital to Rs. 1.0 crore. It was stated that the company since its inception has CC No. 42/12 (25/16) 06.07.2018 168 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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done a turn over of Rs. 1069.53 lacs in the period from 01.01.2006 to 31.03.2006 earning a gross profit of Rs.21.10 lacs. Combining the total turn over of JainCo and M/s DMPL (A3), it comes out to Rs. 2704.90 lacs with gross profit of Rs.52.57 lacs. It has taken over the business activity of M/s JainCo. The promoter directors had undertaken an extensive tour of China in April 2006 and the company was able to enter into agreements with Chinese companies for distribution of Napkin Dispenser machines under the brand name 'DURO'. The company was successful in taking working capital loan of Rs. 150 lacs and LC limit of Rs. 50 lacs from Hauz Qazi Branch of State Bank of India by mortgaging the Vasant Vihar property. The amount disbursed to the company was utilized to pay off the higher interest of short term market loan which M/s JainCo had taken in previous years. It was stated that State Bank of India had given an assurance to the company to enhance the working capital and LC limit to Rs. 350.0 lacs and Rs. 150.0 lacs respectively but when the promoters returned from China tour, they were shocked to know that the bank was not in a position to grant them any enhancement till completion of one year of operations resulting into the advances given to the company struck up and the orders put under suspension.

66. The proposal of M/s DMPL (A3) was processed for sanction vide Ex.PW63/J on 15.01.2007 by the Branch bearing the signature of A5 and J.B. Handa (PW63) giving all the details. It was confirmed by the Branch that the proposal complied with the takeover norms CC No. 42/12 (25/16) 06.07.2018 169 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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of the bank for working capital finance. Due diligence certificate was also submitted. It was commented that the account of M/s DMPL (A3) was being operated satisfactorily with State Bank of India. Excesses were allowed for genuine business needs which were adjusted by the company from time to time. Valuation report of A. Khanna, approved valuer of State Bank of India, was submitted. The reason as stated by M/s DMPL (A3) for shifting the bank in the request letter was mentioned. The recommendations were made for take over of the account from State Bank of India and for in principle approval of limit in favour of M/s DMPL (A3) i.e. C.C (Hyp.) Rs.400.00 lacs and LC (Import/inland) 100.00 lacs on collateral security of the mortgage of the house at Vasant Vihar and on the personal guarantee of the directors.

67. On a query raised by the DGM, Regional office vide letter dated 06.02.2007 Ex.PW14/3 (D117 page 367), A5 sent a reply dated 09.02.2007 Ex.PW39/B (D117 page 393) interalia stating that A1 has informed that R.G. Mundkur is a retired government officer and a distant relative of Mukesh Jain. He has been appointed in the company as an advisor on administrative matters concerning the government departments. He has offered his property as a collateral security against credit facility availed by the company from State Bank of India. A5 also submitted the audit report of the company (A3). A5 clarified that M/s DMPL (A3) has informed that the agreement between M/s Shenzhen Bens Intelligent Electric Appliance Co Ltd has been kept open by the company to CC No. 42/12 (25/16) 06.07.2018 170 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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avoid the penalties for the purchase of the machines. The company has the exclusive right to promote and sell the dispensers of the supplier under the brand name 'DURO'. Though they had entered into the agreement on 15.06.2006 but they have not imported any machine till date. The purchase order of 300 machines was to be placed which required investment of Rs. 33.0 lacs. The request for enhancement of limit was placed with State Bank of India but the same was not looked into by the local management. It was stated in the letter dated 09.02.20007 Ex.PW39/B (D117 Page 393) that on making detailed inquiry from Mukesh Jain about the reason of not sanctioning of the request for enhancement of limits by State Bank of India, A1 informed that the Hauz Qazi branch of State Bank of India has no powers to sanction the enhanced limit (Branch Manager being in Scale III) and there is no loan officer in the branch to prepare the proposal and forward to the higher authorities. The lackadaisical attitude of State Bank of India since last many months has forced the company to switch over its account from State Bank of India.

68. It is pertinent to mention that there is no such correspondence/record to indicate that Mukesh Jain at any time had informed A5 or his officials that the Hauz Qazi branch of State Bank of India has no powers to sanction the enhanced limit (Branch Manager being in Scale III) or there is no loan officer in the branch to prepare the proposal and forward it to the higher authorities. It is strange that A5 believed on the statement of Mukesh Jain (A1) and did not verify it from the branch of State CC No. 42/12 (25/16) 06.07.2018 171 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Bank of India.

69. It was also stated in the letter dated 09.02.2007 Ex.PW39/B (D 117 page 393) that on scrutiny of the bank statement, it is observed that the outstanding in the account are over and above the sanctioned limit of Rs. 100.0 lacs on many occasions after 03.04.2006. On enquiry, A1 informed that w.e.f 03.04.2006, the company's request for conversion of non fund based limit of Rs. 50.0 lacs into working capital limit was allowed by the bank, resultantly, the company availed the working capital of Rs. 150.0 lacs after 03.04.2006 and as such no excesses were availed by the company in their working capital amount. It was also stated in the letter dated 09.02.2007 Ex.PW39/B (D117 page 393) that the company did not ever avail non fund based limit of Rs. 50.0 lacs. The monthly breakup of sales from January, 2006 to December, 2006 was also submitted showing the total sales as Rs. 30,59,29,218/. It was stated that Mukesh Jain (A1) is a seasoned businessman. He has given demonstration of dispenser machines in hotels and other places and received a good response. The projection of sales of dispenser and diapers of Rs. 10 crores in the year 200708 is likely to be achieved by the company.

70. It is pertinent to mention that the working capital limits and LC limit of M/s DMPL (A3) were sanctioned by the Zonal Credit Committee of State Bank of India. The approval as to the request vide letter dated 03.04.2006 Ex.PW39/B for conversion of loan fund based limit of Rs. 50 lacs into working capital limit by the branch, was not within the competence of the Branch. There is no CC No. 42/12 (25/16) 06.07.2018 172 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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record to show that such approval was taken from the Zonal Office as there is no evidence in this regard. Further, statement of accounts in respect of the above loan do not show conversion of the above limit. I fail to understand how this letter was issued/believed as the record speaks contrary to it.

71. It is also relevant to refer a letter dated 16.06.2006 Ex.DW11/P1 C (D379 page 317) written by the Regional Manager, State Bank of India to the Branch Manager wherein it was pointed out:

"........since inception, the account started running irregular due to overdrawings permitted by you (A6) without obtaining prior approval of the appropriate authority. Now, they have made a request for interchangeability of LC limit with CC limit and you (A6) have also recommended without any examination/review of the position of account. In this regard, you (A6) have already been apprised that credit decisions cannot be taken without reviewing the position of the account in detail, which has not been done in this case. Even certain terms & conditions stipulated in the sanction are yet to be complied with. Therefore, you have to examine the conduct of the account thoroughly before taking any decision in the matter so as to ensure that the same has remained satisfactory and the funds lent to the borrowers have been used for the purpose these are lent. As such we do not concur with your observations in this regard.

..........

iii. We observe that the irregularity in the borrowers Cash Credit account is still persisting and as per IRAC norms, if the irregularity continues over 90 days, the account will become NPA. Though, you have been asked to regularize the position of the account but this has not been done so far. Therefore, take up the matter with the borrowers strongly and ensure that the irregularity is adjusted immediately.

iv. The overdrawings allowed have not been reported so far. You have submitted the irregularity report of Feb. & CC No. 42/12 (25/16) 06.07.2018 173 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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March only in June, 06. The Irregularity Report of April & May are yet to be received. We are unable to understand why the reporting has been delayed despite reminding you continuously? Hence, you are again instructed to submit the Irregularity Reports of April & May as well as present position of the account within 2 days. Also explain why the reporting has been delayed?

v. Our connection with the captioned borrowers are new and, therefore, you have been advised to scrutinize the transactions made through the account carefully so as to ensure that these are business/commercial related, connected with the activity of the unit. The end use of funds need to be ensured by the Branch. The confirmation thereof has not been received by us.

2. In view of the above facts, it is noticed that the position of the account is quite alarming and the Branch is not serious in monitoring/regularizing the position. This is highly irregular. Therefore, the Branch has to initiate immediate corrective steps to regularize the position. You are also advised that before submitting such recommendations in future, all pros & cons of the proposal should be examined carefully so that Bank's interests do not get jeopardized at a later stage.

3. In view of the above observations, advise us the present state of affairs of the account in detail urgently.

72. This letter makes it crystal clear that the company's request of conversion of non fund based limit of Rs. 50.0 lacs into working capital limit as recommended by the Branch was never sanctioned by the Zonal Office. Although, the letter Ex.PW39/B bears the endorsement 'approved' but the letter Ex.DW11/P1C completely rules out the sanction/approval of the said conversion of limit.

73. Facts and circumstances show that it was a false letter placed by A3 with the proposal to obtain credit facilities from Union Bank of India.

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74. It is pertinent to mention that after submitting the proposal to the Regional Office, A5 vide letter dated 22.02.2007 informed the Regional Office that the possibility of furnishing Cash Collateral security was discussed with the party and A3 has agreed to offer a fixed deposit of Rs. 51.0 lacs to the bank in addition to the collateral security. A5 accordingly prepared a revised rating model giving additional marks.

75. The proposal was scrutinized by the officers of the GRID and the Risk Management Officer on 03.03.2007 and it was sanctioned vide sanction advice dated 05.03.2007 by the AGM, Regional Office of the Union Bank of India, Credit Department. The concurrence of takeover was given by the Dy. General Manager vide dated 05.03.2007 Ex.DW13/3 (D117 page 425). As per the sanction advice, following limits were sanctioned on the following terms and conditions: CC (Stock & 400.00 lacs 20% Hyp. Of fully paid and duly BD) insured stock and Hyp of Book Debts arising out of genuine sale transactions.

                Import/   inland 100.00 lacs                  25%   cash Pledge   of   FDR   and
                LC (DP)                                       margin     documents under LC
                              Total 500.00 lacs

76. The sanction letter finds mention that the company was sanctioned import/ inland LC facility of Rs. 50.0 lacs. However the company has not availed this facility and requested the Bank to permit them to avail working capital facility in lieu of non fund based facility. The company was permitted excess in the account after CC No. 42/12 (25/16) 06.07.2018 175 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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03.04.2006 over sanctioned limit of Rs. 100.0 lacs as they have availed cash credit hyp facility upto Rs. 150.0 lacs in lieu of LC facility of Rs. 50.0 lacs sanctioned in favour of the company. It was mentioned in the sanction letter that as per the search report dated 17.02.2007, the company's charge dated 06.02.2006 for availment of fund based facility of Rs. 150.0 lacs and non fund based facility of Rs. 50.0 lacs in favour of State Bank of India was registered with ROC on 13.04.2006.

77. Besides other conditions, following relevant terms and conditions were stipulated:

                 ➢     Party to deal exclusively with us.
                 ➢     Import LC to be opened for Import of Wet Towel Dispensing
                       machine.
                 ➢     Book debts and stock older than 90 days will not be eligible
                       for Drawing Power.
                 ➢     Stocks   &   Book   Debts   statement   to   be   submitted   monthly,

Drawing Power to be worked out based on "Total stocks plus book debts minus trade creditors"

➢ Regular inspection must be carried out as per asset classification M6/Q4 & Monitoring Reports should be submitted as per norms.

➢ Inter firm transfer of funds in no case be permitted in the group accounts of the Company/ firm.

➢ Branch Manager to personally ensure that the credit facility is utilised for the purpose of firms trading activity only. ➢ Branch to ensure that turnover commensurate with sales. ➢ Interest charged in the account should be recovered promptly.

                 ➢     Branch to ensure end use of the funds.
                 ➢     Limit   to   be   released   only   after   take   over   concurrence   is
                       obtained from Competent Authority.
                 ➢     Branch to follow R.O. Circular No. RO:LEGAL:158:986:98

dtd. 06.11.98 on verification of documents including mortgage of property/ies existing/ offered in respect of accounts having loan assets sanction of Rs. 10.00 lacs and above by Bank's advocate no penal and send certificate thereof to R.O. ➢ Documents under LC to be retired on due date.

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                 ➢     Terms   and   conditions   of   sanction   to   be   conveyed   and

borrower's/ guarantor's acceptance to be obtained. ➢ Branch should confirm compliance of sanction stipulation through separate letter.

➢ Branch to ensure that charge of State Bank of India is vacated. ➢ The limits to be released only after satisfactory credit report is received from State Bank of India Hauz Qazi Delhi. ➢ Branch to obtain statement of account of the party for the last one year and ensure that the account with the existing Banker is standards assets.' ➢ Post disbursal inspection to be carried out. ➢ Branch Manager to personally visit the property and confirm that the valuation report submitted by the valuer approx. tallies with the market position and situation of the property as advised vide R.O. letter no. RO:CMRD:98:543 dated 17.08.99. Copy of the report to be held on record.

➢ Branch to ensure that the advances are covered by collaterals with clear title and legal opinion/ non encumbrance certificate should be obtained from advocates on Bank's panel. Branch to also ensure that valid and enforceable EM is created before release of advances.

➢ Terms and conditions of sanction to be conveyed and borrower's acceptance to be obtained.

➢ Branch should confirm compliance of sanction stipulations through separate letter.

78. The sanction was communicated to M/s DMPL (A3) vide letter dated 07.03.2007 which was acknowledged by M/s DMPL (A3).

79. Fresh NEC was obtained by A5 from the Bank's Advocate Aditya Madan on 05.03.2007. In the NEC, the branch was asked to get the charge registered with DDA. Valuation Report dated 30.03.2007 was also obtained from the Valuer K.G. Saini. A5 also inspected the property on 29.03.2007.

80. In the instant case, M/s DMPL (A3) had submitted the permission letter dated 16.04.2007 Ex.PW62/A (D79) purportedly issued by CC No. 42/12 (25/16) 06.07.2018 177 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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DDA to mortgage the above property bearing the signature of PW62 and his seal. PW62 has stated that the said letter does not bear his signature and it appears that someone forged his signatures. Even the seal on the said letter is not genuine and it appears that someone prepared a false official seal in his name and used its impressions on the said documents. He has stated that no such permission was ever granted by him and the said letter was forged by using his name and forged official seal. This shows that false permission letter was submitted by the company A3 to the bank showing that the DDA has granted permission to mortgage the property which was never granted by DDA.

81. From the above, it is clear that A3 had approached Union Bank of India for taking over the loan account of A3 from State Bank of India and for sanction of enhanced credit limits ( CC ( Stock and BD) Rs.400.0 lacs and import/inland/LC(DP) Rs.100.0 lacs which were sanctioned by the Regional Office vide sanction advise dated 05.03.2007 with certain conditions. The property bearing No. A 52, Vasant Vihar, New Delhi was mortgaged as collateral security. Mahesh Chand Aggarwal (A5) Branch Manager, Union Bank of India released the limits relying upon 'No objection' submitted by A3 claiming to have been issued by DDA qua the permission to mortgage the property without verifying from DDA which infact had declined to grant 'No objection' to R G Mundkur to mortgage the above property.

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(D) Vinod Khanna impersonated himself as R.G. Mundkur and signed on the documents including the documents regarding creation of equitable mortgage of the property bearing no. A52, Vasant Marg, Vasant Vihar, New Delhi for availing Cash Credit limits from State Bank of India and Union Bank of India.

82. Indisputably, R.G. Mundkur was the owner of the property bearing no. A52, Vasant Marg, Vasant Vihar, New Delhi. Testimonies of PW36, PW48 and PW52 show that a Perpetual SubLease Deed Ex.PW36/B (D128) was executed in favour of R.G. Mundkur and it was registered on 14.12.1970 vide document no. 7643 book no. 1, volume 2540 page 182188 by the Sub Registrar, Delhi. The record would evident that R.G. Mundkur had died much before the opening of accounts by M/s DMPL (A3) with State Bank of India and Union Bank of India from which the credit facilities were availed against the mortgage of the above property.

The question arises who impersonated as R.G. Mundkur.

83. PW52 has stated that R.G. Mundkur had given an affidavit Ex.PW52/B (D134 page 13) on 06.01.1968 to DDA giving his age as 61 years. It is not in dispute that in 1968 or 1970, the photographs of the parties were not required to be affixed on the documents. In the instant case, at the time of opening of account with State Bank of India, all the Directors had affixed their photographs on the account opening form and signed on the documents. At the time of mortgage of the above property, the documents Ex.PW2/E1 to Ex.PW2/J (D373 to D378) were CC No. 42/12 (25/16) 06.07.2018 179 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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executed and signed in the name of R.G. Mundkur. In the similar manner, the documents were executed on behalf of M/s DMPL (A3) with Union Bank of India and signed in the name of R.G. Mundkur vide memo Ex.PW37/A (D4). So called original Perpetual SubLease Deed, which was received from State Bank of India vide letter dated 04.04.2007 Ex.PW63/B (D16), was also deposited with Union Bank of India. The copy of PAN no. AGLPK2659N in the name of Ram Gopal Mundkur son of Krishan Gopal Mundkur showing his date of birth as 08.07.1942 and election I card no. DL/02/009/012843 issued on 28.10.1997 bearing the address A52, Vasant Vihar, New Delhi and his age as 54 years as on 01.01.1996 Ex.PW45/E colly (D43) were submitted. Testimony of PW24 reveals that the PAN number AGLPK2659N was issued to the accused Vinod Khanna S/o Harbans Lal Khanna R/o B65, Paschim Marg, Vasant Vihar, New Delhi. He proved the print out of the PAN card Ex.PW24/A1. PW12 proved the specimen signature of Vinod Khanna on the account opening form Ex.PW12/B (D121) and specimen signature card Ex.PW12/A bearing the photograph of the account holder and stated that in the account opening form, Vinod Khanna had mentioned his PAN card No. AGLPK2659N. PW12 has stated that she had tallied the photograph on the account opening form with the account holder Vinod Khanna and thereafter she signed the same. Testimonies of PW13 and PW14 would show that Vinod Khanna used to deal with the accused Mukesh Jain (A1). PW63 correctly identified the accused Vinod CC No. 42/12 (25/16) 06.07.2018 180 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Khanna and stated that he (Vinod Khanna) had appeared before him as R.G. Mundkur. Later, he came to know that his name was Vinod Khanna. He categorically denied that the accused Vinod Khanna never appeared before him nor signed any document nor represented himself as R.G. Mundkur. PW54, who was witness to the raid in the house of accused Vinod Khanna, has stated that some documents were seized from his house vide search list Ex.PW55/A (D693) which also included a letter of Income Tax Department regarding the information qua the PAN Card of Vinod Khanna Ex.PW55/B and copy of election I Card Ex.PW55/C.

84. In the instant case, as evident from the testimony of PW66/IO, the specimen handwriting and signatures of the accused Vinod Khanna were taken. His specimen handwritings and signatures were sent to the laboratory along with the questioned documents for GEQD. As per the report of the GEQD expert Ex.PW64/B (D

278), the questioned documents bearing the signature of the accused Vinod Khanna as R.G. Mundkur and his handwritings matched with the specimen signatures and handwriting of the accused Vinod Khanna (S118 to S126). There was no material crossexamination on the report of the handwriting expert opinion. It has also been proved that the original SubLease Deed submitted with State Bank of India which was later on handed over to Union Bank of India was also the forged SubLease Deed which was used as genuine for obtaining the credit facilities from the above banks. It is to be mentioned that one original copy of forged sublease deed was also recovered from the house of the CC No. 42/12 (25/16) 06.07.2018 181 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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accused Anil Dhall at Gurgaon. It was sent to the laboratory for GEQD opinion and it was found to be false and forged sublease deed. Even 'No objection certificates' as to the mortgage of the above property with the banks were found forged and fabricated which according to PW52 and PW62 were never issued by DDA.

85. From the facts and circumstances, it is clear that a forged sub lease deed was prepared in respect of the above property which was used as genuine by the directors of M/s DMPL (A3) which they knew or had reason to believe that it was a forged sublease deed, on the basis of which, M/s DMPL (A3) availed the credit facilities from the above banks. Accused Vinod Khanna (A4) impersonated as R.G. Mundkur and executed the documents with the banks in respect of the aforesaid property on the strength of false and fabricated PAN Card and Election I Card in the name of R.G. Mundkur bearing the photograph of the accused Vinod Khanna.

(E) Tenure of the accused Ishwar Singh Mehra (A6) in State Bank of India, Hauz Qazi Branch, Delhi.

Whether the account of M/s DMPL (A3) with State Bank of India, Hauz Qazi Branch had turned NPA, if so, when and its effect thereof?

86. PW1 has stated that the accused I.S. Mehra worked in the Hauz Qazi Branch, State Bank of India from December, 2002 to October, 2006. He was transferred vide transfer order Ex.PW1/B to Model Town Branch as Customer Relation Officer. In his CC No. 42/12 (25/16) 06.07.2018 182 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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place, A.K. Fotedar, PW4 joined as Branch Manager. He stated that after communication of transfer order, the officer under transfer hands over charge to the incoming officer who issues a letter to the outgoing officer. The information is also sent to the Zonal Office in writing. He, however, admitted that there is no relieving on record. PW2 has stated that sometimes the branch managers are sent to the other branches to look after the work on oral instructions from the Zonal Office. He stated that he cannot admit or deny that handing over of charge had not taken place till 27.02.2007 or that the accused I.S. Mehra was orally directed to look after the Model Town Branch from 16.10.2006 to 19.05.2007 and work in Hauz Qazi Branch from 05.02.2007 to 09.02.2007 or 12.02.2007 to 27.02.2007 or it was Sunday on 25.02.2007 or the branch was opened because of the inspection. He, however, denied that on 25.02.2007, the accused I.S. Mehra was working as Manager and he had signed the letter dated 25.02.2007 Ex.PW2/S in the normal course of his duties. PW3 has stated that the accused I.S. Mehra had issued the letter Ex.PW2/S but he was not posted and functioning as Branch Manager on 25.02.2007 at Hauz Qazi Branch. PW4 has stated that on 13.10.2006 he had taken the charge of the branch as Branch Manager from the accused I.S. Mehra since he was transferred to Model Town branch. He has stated that there was only one Branch Manager in the Branch. He admitted that the letter Ex.PW2/S was issued on the letter head of the bank but he stated that by that day, the accused I.S. Mehra had already been transferred. He stated that at the time of taking over CC No. 42/12 (25/16) 06.07.2018 183 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the charge, no specific document was prepared by the incumbent or the outgoing Manager for forwarding to the Higher Authority. He stated that he does not remember if any relieving letter was issued to the accused I.S. Mehra. He then volunteered that had any letter been prepared, the copy of the same would have been in the Branch or the AGM Office. He deposed on the lines of PW2 and stated that he cannot admit or deny if the accused I.S. Mehra had attended the work of Hauz Qazi Branch from 05.02.2007 to 09.02.2007 and 12.02.2007 to 27.02.2007. He, however, denied that I.S. Mehra was not relieved from the Hauz Qazi Branch on 12/13.10.2006 or till 31.03.2007 and for that reason no such relieving is available in the record. He also denied that the accused I.S. Mehra was sent to look after the work of Model Town Branch on oral instructions and on 25.02.2007 he was working as Branch Manager in Hauz Qazi Branch and had rightly issued the letter Ex.PW2/S in the capacity of the Branch Manager, Hauz Qazi Branch. PW5 who had accorded the sanction for prosecution of the accused I.S. Mehra has stated that at the time of handing over of charge, a certificate is prepared which is signed by the relieving and the relieved officer and sent to the immediate controlling officer after keeping a copy of the same in the branch. He admitted that sometimes the branch works on Holidays due to audit etc. DW8 has stated that as per the letter Ex.DW8/1, it was Sunday on 25.02.2007. He denied that the employees are not allowed to work on Sundays. He stated that on inquiry, he came to know that the accused I.S. Mehra was directed to visit Hauz Qazi CC No. 42/12 (25/16) 06.07.2018 184 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Branch on oral instructions. DW11 who was AGM has stated that the accused was deputed to assist PW4 in the smooth conduct of the inspection but was not deputed to attend any official work in the capacity of the Branch Manager as PW4 was only authorized to do so nor he had instructed the accused I.S. Mehra to issue the letter dated 25.02.2007 Ex.PW2/S.

87. On a careful perusal of the testimonies of the above witnesses and the transfer order Ex.PW1/B (D513), I find that the accused I.S. Mehra, who was the Branch Manager in the Hauz Qazi Branch of State Bank of India, had been transferred from the branch in October, 2006 to join as Customer Relation Officer, Model Town Branch, Delhi. The accused never denied of his transfer order or his joining at Model Town Branch. Question arises whether he was relieved from the Branch? if so, when and whether he was called in the Branch for the purposes of inspection? Although the witnesses have stated that if any officer is transferred, relieving letter is prepared and one copy is sent to the Zonal/Regional Office and no such relieving letter is on record but it cannot be inferred that he was not transferred and relieved. The suggestion given by the accused that he was directed by the AGM to work in Hauz Qazi Branch from 05.02.2007 to 09.02.2007 and from 12.02.2007 to 27.02.2007 itself shows that he was transferred and relieved from the Hauz Qazi Branch in October, 2006. So, it cannot be said that he was never relieved from the Hauz Qazi Branch or till 31.03.2007, he was the Branch Manager in the Hauz Qazi Branch. PW4 has categorically deposed that he had joined CC No. 42/12 (25/16) 06.07.2018 185 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the branch on 13.10.2006 pursuant to the transfer order and he was the only Branch Manager in the Bank.

88. There is no dispute on this fact that during inspections, the branches are opened on Sundays or Holidays which was also done in this case but on these days, no public dealings are made and only official work is done. Though it is proved that on 25.02.2007 i.e. Sunday, the branch was opened and the accused I.S. Mehra was called in the Branch in relation to the inspection of the branch but nothing can be inferred from the record and the testimonies of the above witnesses that the accused was never relieved from the branch or he was the Branch Manager when the letter dated 25.02.2007 Ex.PW2/S was issued by the accused I.S. Mehra. Had he not been relieved, question of him calling by AGM to work in the branch from 05.02.2007 to 09.02.2007 and from 12.02.2007 to 27.02.2007 would have not been there. It is true that the relieving letter of the accused I.S. Mehra is not on record but from this it cannot be presumed that he was never transferred or relieved from the Branch and on 25.02.2007 he was working as Branch Manager in Hauz Qazi Branch.

89. From the facts & circumstances, it is clear that I.S. Mehra (A6), who was posted as Branch Manager in State Bank of India, Hauz Qazi Branch, was relieved from the Branch in October, 2006. PW4 A.K. Fotedar had taken the charge as Branch Manager. On 25.02.2007 i.e. Sunday he was called in the Branch to assist PW4 in the smooth conduct of inspection and not for any other official work in the capacity of the Branch Manager.

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Now the question arises whether the account of M/s DMPL(A3) at any time was classified as NPA by State Bank of India, Hauz Qazi Branch? if so, when it was classified as NPA?

90. As per Master Circular of State Bank of India Corp.Cen/A&C/A&A/412 dated 07.02.2007, vide item 2.1, an asset becomes non performing when it ceases to generate income for bank. A non performing asset (NPA) is a loan or advance where interest and / or installment of principal remains 'overdue' for a period of more than 90 days in respect of a term loan, the account remains 'out of order' for a period of more than 90 days, in respect of over draft/cash credit (OD/CC), the bill remains 'overdue' for a period of 90 days in the case of bill purchase and discounting. As per 2.2, an account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit / drawing power. As per 2.3, an amount due to the bank under any credit facility is overdue if it is not paid on the due date fixed by the Bank. As per 3.1, the interest should not be charged and taken to income account on any NPA, however, interest on advances against term deposits etc may be taken to income account on the due date, provided adequate margin is available in the accounts. As per 3.2, if an advance becomes NPA at the close of the year, interest accrued and credited to income account in the corresponding previous year should be reversed or provided for if the same is not realized. As per 4.1, if a borrower enjoys several facilities and one of them becomes non performing, all the other facilities too should be classified as NPA. As per CC No. 42/12 (25/16) 06.07.2018 187 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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4.2.1, a standard asset is one which does not disclose any problem and which does not carry more than normal risk attached to the business. Such an asset is not a NPA. As per 4.3.3, the classification of an asset as NPA should be based on the record of the recovery. An advance should not be classified as NPA merely due to the existence of some deficiencies which are temporary in nature such as non availability of adequate drawing power based on the latest available stock statement, balance outstanding exceeding the limit temporarily, non submissions of stock statements and non renewal of the limits on the due date, etc. A working capital borrower account will become NPA if such irregular drawings are permitted in the account for a continuous period of 90 days even though the unit may be working or the borrower's financial position is satisfactory. As per 4.3.4, if arrears of interest and principal are paid by the borrower in the case of loan accounts classified as NPA, the account should no longer be treated as non performing and may be classified as standard.

91. PW2 has stated that an account is classified as NPA if the interest in 90 days is not cleared or the account is not in operation or is overdrawn. PW4 has stated that as soon as the account is declared NPA by the system, further withdrawals are stopped, interest to be charged is not debited and limit is not renewed. DW9 also deposed on the lines of PW4 and stated that when the account becomes NPA, all the facilities come to a stand still and the Bank does not earn interest. It does not allow any operation in CC limit CC No. 42/12 (25/16) 06.07.2018 188 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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or overdraft limit. Neither the limits are renewed nor enhanced. PW37 has stated that the NPA account cannot be taken over.

92. From the above, it is clear that a CC account becomes NPA when the interest debited in the account remains unrealized continuously for a period of 90 days or irregular drawings continue in the account for a continuous period of 90 days. If the party is desirous to convert the NPA account into standard account, the bank may do it after following certain stipulated guidelines however bank shall necessarily recover the entire overdue interest as debited in shadow account. The bank can lay down further conditions at that time.

93. It is also clear that in case, the account is classified as NPA, no more debits are permitted and immediately a statement is sent to the Controlling Office/Regional Office/Zonal Office depending upon the size of the borrower. The information of NPA account is also shared with CIBIL (Credit Information Bureau India Limited). In case, the NPA is secured by way of equitable mortgage of property, the necessary action under SARFAESI is initiated.

94. PW4 has stated that he had sent a brief history of NPA accounts having outstanding more than Rs. 50.0 lacs maintained in the Branch to the Zonal Office. He proved the statement Ex.PW4/A as per which, the account of M/s DMPL(A3) had become NPA on 01.12.2006. He stated that as per Ex.PW4/A, the overdrawings were permitted in the account by the then Branch Manager (A6) which were not repaid/adjusted by the borrower. The conduct of CC No. 42/12 (25/16) 06.07.2018 189 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the account remained unsatisfactory. Ultimately, the borrower stopped the transactions in the account and, therefore, the account was classified as NPA. He denied that the account was never classified as NPA. He, however, admitted that the CBS system was in place at that time and it could alone declare the account NPA. He stated that as soon as the account is declared NPA by the system, further withdrawals are stopped, interest to be charged is not debited to the account but the entires are reversed and the limit is not renewed. He was then confronted with the statement of account Mark DX to which he stated that on 26.02.2007, CC limit of M/s DMPL(A3) was renewed for Rs. 1.0 crore. He explained that it was only for the purpose of accounting and withdrawal of amount from the CC limit was not permissible. He stated that such renewal was made only for computer operation and accounting. In NPA account, computer system shows 000 amount whereas it should show the original limit granted to the party. He, however, admitted that as per document Mark X, the interest was debited on 28.02.2007. He volunteered that previously they were debiting the interest in NPA accounts also and in case of such debit entries, they were reversing the entries showing unrecovered interest.

95. PW2 has stated that the account of M/s DMPL(A3) was running overdrawn. He stated that the account is classified as NPA if interest is not cleared in 90 days or the account is continuously overdrawn.

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96. It is relevant to refer a letter dated 26.10.2006 Ex.DW11/P1B wherein the Regional Manager, State Bank of India had pointed out to the Branch Manager that number of cheques lodged in clearing have returned unpaid. It is not understood why the branch has been relodging the cheques repeatedly in clearing which were returned unpaid frequently. It was observed that the cheques were lodged in clearing near to the month end and last date in July, August and September, 2006, resultantly the outstandings were brought down within the limit but in real sense, the outstandings have been more than the limit/DP. This shows that the account remained overdrawn with hidden irregularity which is a misleading information. The statement for the period from 01.07.2006 to 30.09.2006 shows that there have been 27 transactions amounting to Rs. 40.11 lacs other than the cheques returned. It shows that the sale transactions are not routed through the account.

97. It is also important to refer a file 'marked as A' and document D 379, at page 382 dated 22.12.2006 wherein it was pointed out by the AGM that the borrower is not routing his sales through the account. There are no genuine transactions in the account since 01.10.2006 and the account is likely to be categorized as NPA on 31.12.2006. There are lots of overdues in the account and the stocks are not sufficient to cover the outstanding. The attitude of borrower is evasive.

98. In the instant case, the accused had also called DW6, Manager, MPST in the witness box. He was confronted with the screen shot CC No. 42/12 (25/16) 06.07.2018 191 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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of the account of M/s DMPL(A3) Mark DW6/X2. He has stated that as per the document Ex.DW6/1, the account was not NPA as on 25.02.2007. Vide entry at point Y1 on page3 CC/overdraft limit of M/s DMPL(A3) was renewed for Rs. 1.0 crore on 26.02.2007. He was also confronted with the entry dated 16.03.2007 at point Y to page 4. He stated that the account turned into NPA on 14.03.2007.

99. DW11 has stated that he had mentioned in his observation "position of the account was quite alarming since inception due to the overdrawings permitted by the Branch Manager without obtaining the prior approval of the appropriate authority. The branch was not serious in monitoring and regularizing the position". He was also confronted with the statement of account of the period from 05.01.2006 to 31.03.2007 (part of Mark D6/X2) and he stated that the entry dated 26.02.2007 at point X to X relates to the renewal of the CC/OD limit upto Rs. 1.0 crore on 26.02.2007.

100. In the instant case, Ld counsel for A5 referred only the entries dated 26.02.2007 and 28.02.2007 regarding renewal of CC limit and debit of interest post the letter Ex. PW 2/S dated 25.02.2007 but he did not offer any satisfactory reply as to the absence of any credits in the account between the period from 13.10.2006 to 25.02.2007. The RBI guidelines and State Bank of India circular clearly provide that if no payment towards interest is made nor any amount is remitted and the CC limits remain overdrawn for more than 90 days, the account shall automatically become NPA.

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It is further pertinent to state that DW6 in his evidence has stated that the account of A3 was classified as NPA on 14.03.2007. This court fails to understand that how it is possible that an account which according to A6 was a standard asset as on 25.02.2007 and was renewed on 26.02.2007 and interest was debited on 28.02.2007 could have been classified as NPA on 14.03.2007 i.e within a period of 17 days of it being claimed as standard asset.

101. The RBI guidelines applicable to all the banks during the relevant period for classification of assets are contained in the RBI Master Circular dated 01.07.2006. The clause 2.1.2 (ii) defines NPA "the account remains 'out of order' as indicated at paragraph 2.2 below, in respect of an overdraft/cash credit (OD/SS). 2.2 'out of order' status "An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of balance sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as 'out of order'.

102. The statement of CC account of A3 clearly shows that the account was continuously overdrawn and in fact the last credit entry in the CC account before it was taken over by Union Bank of India was on 05.10.2006. The same was also not against the payment of interest due but in respect of the overdrawings. The overdrawings were permitted in gross violation of the guidelines issued by the CC No. 42/12 (25/16) 06.07.2018 193 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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State Bank of India. A6 being the Branch Manager was very well aware about the health of the loan account of A3 but inspite of that, he allowed the overdrawings in the various accounts beyond his delegated power.

103. Notwithstanding the evidence of DW6, I am not convinced with the date of the account being classified as NPA on 14.03.2007. This could have been done by manipulating the same due to hyper technicalities involved in such classifications. It is pertinent to state that DW11 in his deposition has admitted that position of the account was quite alarming since inception due to the overdrawings permitted by the Branch Manager without obtaining the prior approval of the appropriate authority. The branch was not serious in monitoring and regularizing the position which proves that as per State Bank of India circular and RBI guidelines in vogue, the account was very much NPA as on 25.02.2007. It is immaterial whether the account was classified as NPA on 01.12.2006 or 31.12.2006.

104. In view of the above irrefutable facts, it can be said that the account of A3 with State Bank of India was an NPA account on 25.02.2007. The statement of account shows that the accounts of the company always remained overdrawn even in March/April, 2006 and it was never brought within the sanctioned limits. As per the information received from State Bank of India after applying uptodate interest upto 30.03.2007, CC(H) outstanding was Rs. 160.18 and CC/BD (BS) OS was Rs. 63.60 lacs. Moreover, there was no operation in any of the party's account with State Bank of CC No. 42/12 (25/16) 06.07.2018 194 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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India after 30.11.2006.

105. For the sake of arguments, even if it is assumed that on 25.02.2007, the account of A3 with State Bank of India was not classified as NPA as claimed by the accused I.S. Mehra and the account was standard asset and satisfactory, question arises whether A6 was authorized to issue the letter Ex.PW2/S?

106. Testimony of DW11 would show that the accused was sent to Hauz Qazi Branch to assist PW4 in the smooth conduct of the inspection and he was not deputed to attend any official work in the capacity of Branch Manager. Only PW4 was the authorized to do so nor he had instructed A6 to issue the letter dated 25.02.2007 Ex.PW2/S. In the instant case, PW4 had already taken the charge of the Branch so what made A6 issue the said letter.

107. It is manifest from the record that the original letter of Union Bank of India dated 25.01.2007 calling for the status of the account of M/s DMPL(A3) from State Bank of India and the copy of the letter issued by the accused A6 dated 25.02.2007 never remained part of the record of the branch nor any entry in the dispatch/receipt register of the branch was found. It is also not understood why the accused A6 chose the day of Sunday i.e. 25.02.007 to issue the letter Ex.PW2/S though he had been allegedly coming in the branch earlier and the letter dated 25.01.2007 was allegedly received one month before 25.02.2007.

108. Facts and circumstances rather show that the accounts of the M/s DMPL(A3) had become irregular. They were excess overdrawings. There was pressure on A6 to get the excess CC No. 42/12 (25/16) 06.07.2018 195 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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overdrawings regularized. The bank did not want to give more facilities to M/s DMPL(A3). This made A1 contact the Sadar Bazar Branch of Union Bank of India for taking over the account and giving additional working capital facilities. A6 in order to fraudulently assist A1 and A3 unauthorizedly issued the letter Ex. PW 2/S and falsely stated therein that the account of A3 was a standard asset which information he knew to be false.

(F) Inspection report submitted by the accused M.C. Aggarwal (A5) in respect of the above property and the report of the Advocate Mr. Aditya Madan (PW57)

109. In the instant case, inspection, at the premises at A52, Vasant Marg, Vasant Vihar, New Delhi which was offered as a collateral security for securing the CC limits by A3, was made by A5, A6 and the Panel Advocates of both the Banks as well as the valuer K.G. Saini (PW15). PW15 has stated that he had inspected the site on 29.03.2007 in the presence of A5 and the representative of M/s DMPL(A3). The property was clearly identifiable. The Manager (Advances) PW63 had shown him (PW15) the title documents of the perpetual sublease deed and NOC from the authority in respect of the above property before the inspection. On inspection, he noticed that it was a vacant built up residential property not occupied by anyone, which appeared to be dusty and dirty. PW57 has stated that on the instructions of A5, he had collected the photocopies of the documents of the above property, visited the office of the SubRegistrar, made enquiry and CC No. 42/12 (25/16) 06.07.2018 196 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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submitted his legal search report Ex.PW57/A (D8). He had checked the chain of title documents but the difference in registration number could not be noticed by him.

110. It was alleged by the prosecution that A5 had given a false report that the property was self occupied by the owner though it was lying vacant. Perusal of the inspection report dated 29.03.2007 Ex.DW13/7 (D118, Page 172) would show that it was on a printed format. There was a column about the property " is the building owner occupied or tenanted". I agree with the explanation given by A5 that since at the time of inspection, the property was found to be vacant and it was not let out to any tenant, he ticked it as 'self occupied'. A5 has stated that he had also talked to the guard and the guard had told him that R.G. Mundkur was the owner of the property. DW13 has stated that in the inspection report dated 29.03.2007 Ex.DW13/7 (D118 page

172), it was mentioned by A5 that the building is self occupied by the owner and not tenant. Since there are two options in the column i.e. owner occupied or tenant, and if the tenant is not occupying the property, it is deemed that the owner is occupying the property.

111. That being the position, no fault can be found on the inspection report Ex.DW13/7 conducted by A5.

112. It is to be mentioned that it was a take over account by Union Bank of India from State Bank of India. State Bank of India had sanctioned the CC and other limits in favour of M/s DMPL(A3) against the creation of the equitable mortgage of the above CC No. 42/12 (25/16) 06.07.2018 197 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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property. The party had submitted NOC from DDA. The original sublease deed from the State Bank of India was received on 04.04.2007 after release of Rs. 2.25 crores to State Bank of India. Since in the sanction letter, it was mentioned that the status of the property be verified, A5 verified the status. It cannot be said that he did not visit the property to verify the status.

(G) Legal opinion on the photocopies of the title deed

113. As regards taking legal opinion on the photocopies of the title deed is concerned, it has come in the testimony of DW13 that in a case of taking over of account from another bank, it is not possible to obtain original legal title deeds from the previous bank. Legal opinion on the title of the property is taken on the copy of the original deeds taken from the borrower. He has stated that PW57 was on the panel of the bank for many years. His opinion was always accepted and relied upon by the bank. DW13 had retired from the post of the Chief Manager, Zonal Audit Office. I do not find any reason to disbelieve him or reject his testimony on this aspect. Although, he was called in defence but it is well settled law that the defence witness also deserves equal respect and command and his testimony cannot be disbelieved on the ground that he is called in defence. It was held in the case of Dudh Nath Pandey Vs. State of UP AIR 1981 SC 911 that defence witnesses are entitled to equal treatment with those of the prosecution and the Court ought to overcome their traditional instinctive disbelief in defence witnesses. Quite often, they tell CC No. 42/12 (25/16) 06.07.2018 198 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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lies but so do the prosecution witnesses.

114. That being the position, I am in agreement with the contention of the defence counsel that in a case of taking over of an account from another bank, it is not possible to obtain original legal title deeds from the previous bank for seeking legal opinion till the liability of previous bank is cleared.

(H) Taking of statement of accounts of M/s DMPL(A3) of previous one year as stipulated in the sanction letter before releasing the CC limit.

115. It is evident from the record that A5 and PW63, while forwarding the proposal of M/s DMPL(A3) for taking over the account from State Bank of India and enhancing its limits, had taken the statement of accounts of A3 with State Bank of India upto 30.11.2006. The reason for taking the statement upto 30.11.2006 was that M/s DMPL(A3) had approached Union Bank of India in December 2006. It is relevant to mention that three limits were sanctioned in favour of M/s DMPL(A3) by State Bank of India but surprisingly while forwarding the proposal, statement of only CC limit was taken and statements of other limits were not taken. Even Zonal committee or the Regional Manager before sanctioning the limit did not call for the statements of other limits sanctioned in favour of M/s DMPL(A3). Although Regional Office, had mentioned in the sanction letter to obtain the statement of complete one year before releasing the facility but even then no such statement was taken by the branch office (A5 or CC No. 42/12 (25/16) 06.07.2018 199 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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PW63) before releasing the limits.

116. Admittedly, it was the duty of the Branch Manager to ensure the compliance of the terms & conditions of the sanction letter but PW63 being Manager (advances) could point out that the statement of complete one year was required for releasing the facility which was not done by PW63. Admittedly, PW63 was not made an accused but departmental inquiry was conducted against him. After enquiry, penalty was recommended against him. This does not mean that A5 was not liable for criminal prosecution. Facts and circumstances show that his role was far serious/grave than that of PW63.

117. I am of the view that had the complete one year statement been taken by A5 before releasing the limits, different picture would have emerged and the limits would not have been released to A3 since the account of A3 with State Bank of India had already become NPA.

(I) Inter firms transfers, unauthorized credits in the account of M/s DMPL (A3) against uncleared cheques deposited in the account of A3 at the end of the month which subsequently returned unpaid at the starting of the following month, non utilization of funds of CC limit for genuine trade transactions, diversion of amount through dummy accounts and Sham business transactions without ensuring the end use of funds as stipulated in the sanction letter dated 05.03.2007.

118. It is evident from the record that earlier the accused Mukesh Jain (A1) had been doing the business in the name of M/s JainCo., CC No. 42/12 (25/16) 06.07.2018 200 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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having its office at 2646, Ballimaran, Delhi. M/s JainCo which had an account with Oriental Bank of Commerce at Darya Ganj Branch. The account was in operation since 27.05.2000. M/s DMPL (A3) was incorporated on 06.01.2006 having its office at 2646, Ballimaran, Delhi. A3 took over the assets and liabilities of M/s JainCo. As per the agreement between A3 and M/s JainCo, A3 was not to carry on the business of trading, manufacturing, export of foam products, clothes, readymade garments and electronic goods in its / his own name or in the name of any person or otherwise for a period of three years from 07.01.2006. A3 also started using the same TIN Number and the Sales Tax Number issued to M/s JainCo.

119. It is also evident from the record that M/s DMPL (A3) opened an account with State Bank of India on 06.02.2006 and availed fund based and non fund based limits from the Bank. Mukesh Jain (A1) who was the proprietor of JainCo, Anil Dhall (A2) and R.G. Mundkur @ Vinod Khanna (A4) were the directors of M/s DMPL (A3). On the request of M/s DMPL (A3), Union Bank of India, Sadar Bazar, Delhi took over the account of M/s DMPL (A3) w.e.f. 30.03.2007. Anil Dhall resigned from M/s DMPL (A3) on 30.03.2007 and his resignation was accepted by M/s DMPL (A3) on 31.03.2007. He was thereafter no more the director of M/s DMPL (A3). M/s DMPL (A3), availed the CC facility of Rs. 4.0 crores and LC(Import/Inland) facility of Rs. 1.0 crore vide sanction letter dated 05.03.2007. As per the terms & conditions of sanction letter, M/s DMPL (A3) was to deal exclusively with CC No. 42/12 (25/16) 06.07.2018 201 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Union Bank of India, Sadar Bazar Branch, import LC was to be opened for import of wet towel dispensing machines, Inter firms transfer of funds in no case were permitted in the group accounts of the company/firm, credit facility was to be utilized for the purpose of firms trading activity. Branch head had to ensure the end use of the funds. The documents under LC were to be retired on due date, the charge of State Bank of India was to be vacated, the branch had to obtain statement of account of M/s DMPL (A3) for the last one year and to ensure that the account with the existing banker is standard asset and post disbursal inspection was to be carried out.

120. In the instant case, when the accounts were taken over from State Bank of India, there was a liability of Rs. 2.25 crores of M/s DMPL (A3). Union Bank of India, issued the bankers' cheque of Rs.2.25 crores in favour of State Bank of India to clear the liabilities of M/s DMPL (A3) and thereafter on 04.04.2007, the documents of M/s DMPL (A3) were released by State Bank of India and deposited in Union Bank of India as a security.

121. The record shows that M/s JainCo did not close its account with Oriental Bank of Commerce, Darya Ganj Branch and it continued its operations through Mukesh Jain (A1) Proprietor of M/s JainCo and Director of M/s DMPL (A3). Mukesh Jain also opened saving bank account with Oriental Bank of Commerce, Daryaganj Branch on 20.06.2007. M/s JainCo also had an account with Andhra Bank, R.K. Puram Branch, operation of which also continued. M/s DMPL (A3) also opened a current account with CC No. 42/12 (25/16) 06.07.2018 202 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Andhra Bank, R.K. Puram Branch on 04.06.2007 and did the operation of the company from that branch till 01.10.2007. Mukesh Jain also formed a proprietorship firm in the name of M/s Supreme Traders at 2645, Ballimaran, Delhi and opened a current account with Oriental Bank of Commerce, Daryaganj Branch on 20.06.2007. M/s DMPL (A3) through its directors Mukesh Jain (A1) and someone impersonated as Anil Dhall also opened a current account with Oriental Bank of Commerce, Chawri Bazar Branch on 17.10.2006.

122. Record further shows that the accused Mukesh Jain knew the accused Ashok Bharti (A8) from before. Ashok Bharti as proprietor of M/s Shiv Shakti Udyog having its office 2651, Ballimaran, Delhi opened a current account on 24.04.2007 with Union Bank of India. Ashok Bharti as a proprietor of M/s Sharma Enterprises having its office at 2651, Ballimaran, Delhi already had an account with Oriental Bank of Commerce, Shahdara, Delhi which he had opened on 06.03.2006. His associate / known V.S.Pillai, opened a current account as proprietor of M/s Kwality Enterprises having its office at R82, Ramesh Park, Laxmi Nagar on 04.05.2007. He was also the proprietor of Shiva Sales Corporation having its office at 68A, Krishan Kunj, Laxmi Nagar. M/s Shiva Sales had an account with Nainital Bank, Vikas Marg which was opened on 10.09.2005. V.S. Pillai also opened two accounts i.e. current account no. 12001011000235 and cash credit account no. 12004011000092 as proprietor of M/s Mohan Dass and Co. with Oriental Bank of Commerce, Preet Vihar CC No. 42/12 (25/16) 06.07.2018 203 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Branch on 04.06.2007.

123. Record shows that accused Rakesh Khurana (since died) had a firm in the name of M/s Kwality Enterprises at B11/2, Okhla, Delhi. He had opened an account with Oriental Bank of Commerce, Daryaganj Branch on 18.06.2003. Anil Dhall, Director of M/s DMPL (A3) had a saving bank account with State Bank of India, Sushant Lok, Gurgaon which he had opened on 12.09.2005. Vinod Khanna who had impersonated as R.G. Mundkur had a saving bank account with Canara Bank, Munirka Branch which he had opened on 02.09.2004.

124. On an analysis of the statements of accounts of the above firms, individuals and the companies, I find that most of the accounts were opened after the opening of CC account of M/s Duro Marketing Pvt. Ltd with Union Bank of India. The operations of all the accounts continued though as per the agreement of M/s JainCo with M/s DMPL (A3), M/s JainCo ceased to exist w.e.f. 07.01.2006 and as per the sanction letter dated 05.03.2007, M/s DMPL (A3) was not allowed to deal with the other banks.

125. PW18 has stated that M/s JainCo was registered with the Trade and Tax Department. From 01.04.2007 to 31.12.2007, M/s JainCo had filed the returns in the name of M/s DMPL (A3) against the said TIN number. He has stated that his Inspector Vijay Singh (PW21) had reported after inspection that M/s Supreme Traders, M/s Sharma Enterprises, M/s Shiv Shakti Udyog did not exist at the address at Ballimaran, Delhi nor the said firms were registered with the trade and tax department for VAT which fact has also CC No. 42/12 (25/16) 06.07.2018 204 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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come in the testimony of PW21. PW19 has stated that the firms M/s Kwality Enterprises, R82/5, Ramesh Nagar, Laxmi Nagar, M/s Shiva Sales Corporation were not registered with the department of Trade and Taxes. DW1 has stated that if a dealer deals with exempted and taxable commodities, he is required to get registered if his turn over is more than Rs. 20.0 lacs. PW58 who used to work in the godown of the accused Mukesh Jain A1 at 2646, Ballimaran, Delhi has stated that Mukesh Jain used to do business in the name of M/s DMPL (A3) and there was no other firm of Mukesh Jain except the above firm at Ballimaran, Chandni Chowk or nearby vicinity. He never heard about the firm M/s Supreme Traders. He has stated that he knows the accused Ashok Bharti who used to live at Ballimaran, Chandni Chowk and visit Mukesh Jain. He, however, does not know the names of the firms of Ashok Bharti. PW60 has stated that from 2006 to 2008 he had worked in three firms namely M/s DMPL (A3), M/s JainCo and M/s M.K. Foam Pvt.Ltd which were the firms of the accused Mukesh Jain (A1) at Ballimaran, Delhi. There was no firm in the name of M/s Supreme Traders at Ballimaran, Chandni Chowk, Delhi or in its nearby vicinity.

126. On a further analysis of the statements of accounts and the testimonies of the witnesses, I find that the cheques/transfers were issued/made from the account of M/s DMPL (A3), CC account no. 307505040132415 with Union Bank of India, Sadar Bazar Branch in favour of the followings:

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                       1. M/s Kwality Enterprises        Rs. 5,63,02,019.00
                       2. Anil Dhall                     Rs.      2,59,200.00
                       3. M/s Supreme Traders            Rs. 1,23,89,965.00
                       4. Self/Mukesh Jain               Rs.    15,05,628.00
                       5. Yourself (Bank)                Rs. 1,46,69,209.00
                       6. Fayaz                          Rs.         50,000.00
                       7. M/s Duro Marketing Pvt. Ltd    Rs.      1,16,000.00

127. From the current account of M/s Duro Marketing Pvt. Ltd, A/c no.

307501010133539 with Sadar Bazar Branch, following cheques/transfers were made in favour of yourself, through which following cheques and pay orders in the name of M/s Supreme Tradres were got prepared:

Ch. No. 726007 dated 11.04.2007 Rs.25,00,000.00 Ch. No. 726008 dated 20.04.2007 Rs.25,00,000.00 Ch. No. 726018 dated 30.06.2007 Rs.65,00,000.00

128. From the account of M/s Shiv Shakti Udyog A/c no.

12001011001647 with Oriental Bank of Commerce, Preet Vihar, following cheques/transfers were made in favour of/to :

1. M/s Duro Marketing Pvt. Ltd. Rs.72,65,836.50

2. M/s JainCo Rs. 9,00,000.00

3. Karan Jain Rs. 2,00,000.00

4. M/s Mohan Dass & Co. Rs. 1,52,000.00

129. From the account of M/s Sharma Enterprises A/c no.02551011002265 with Oriental Bank of Commerce, Shadara Branch, following cheques/transfers were made in favour of/to:

1. M/s Duro Marketing Pvt. Ltd Rs.2,02,92,112.76

2. M/s JainCo Rs. 5,00,000.00

3. Karan Jain Rs. 10,00,000.00

4. Madan Rs. 20,000.00 CC No. 42/12 (25/16) 06.07.2018 206 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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130. From the account of M/s JainCo A/c no. 5327 with Oriental Bank of Commerce, Darya Ganj, Delhi, following cheques/transfers were made in favour of/to:

1. Vinod Khanna Rs. 16,000.00

2. M/s Shiv Shakti Udyog Rs. 10,67,000.00

3. M/s Sharma Enterprises Rs. 36,42,800.00

4. M/s Duro Marketing Pvt. Ltd. Rs. 4,50,000.00

5. M/s Supreme Traders Rs. 5,00,000.00

6. M/s Mohan Dass and Co. Rs. 45,68,000.00

7. Self (Mukesh Jain) Rs.1,50,97,000.00

131. From the account of M/s Supreme Traders A/c no.

00131011000663 with Oriental Bank of Commerce, Daryaganj Branch, following cheques/transfers were made in favour of/to:

1. JainCo Rs. 90,86,000.00

2. Vinod Khanna Rs. 25,000.00

3. Self (Mukesh Jain) Rs. 79,26,000.00

4. M/s Duro Marketing Pvt. Ltd Rs. 10,87,980.00

5. M/s Mohan Dass & Co. Rs. 18,38,000.00

6. M/s Shiv Shakti Udyog Rs. 2,26,000.00

132. From the account of M/s Kwality Enterprises, proprietor V.S. Pillai A/c no. 04881011003206 with Oriental Bank of Commerce, Laxmi Nagar, following cheques/transfers were made in favour of/to:

1. JainCo Rs. 4,82,82,422.00

2. Supreme Traders Rs. 28,12,000.00

3. Mukesh Jain Rs. 6,44,000.00

4. Vinod Khanna Rs. 40,000.00

5. Sharma Enterprises Rs. 40,75,000.00

133. From the account of M/s Kwality Enterprises, Proprietor Rakesh Khurana A/c no. 5523 with Oriental Bank of Commerce, Okhla CC No. 42/12 (25/16) 06.07.2018 207 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Industrial Area, PhaseII Branch, following cheques were made in favour of Sharma Enterprises:

1. Ch. No. 182901 dated 09.04.2007 Rs.26,75,000.00

2. Ch. No. 182915 dated 16.04.2007 Rs.14,00,000.00

134. From the personal account of Mukesh Jain A/c no.

00132151001220 with Oriental Bank of Commerce, Darya Ganj Branch, following cheques were made in favour of Duro Marketing Pvt. Ltd:

1. Ch. No. 366140 dated 31.10.2007 Rs.3,65,000.00

2. Ch. No. 365408 dated 02.08.2007 Rs.9,00,000.00

3. Ch. No. 366133 dated 19.09.2007 Rs.1,50,000.00

4. Ch. No. 366136 dated 18.10.2007 Rs.1,75,000.00

5. Ch. No. 366137 dated 22.10.2007 Rs.2,55,000.00

6. Ch. No. 366132 dated 31.08.2007 Rs.3,75,000.00

7. Ch. No. 366131 dated 30.08.2007 Rs.1,25,000.00

135. The detailed analysis shows that the operation from the account of M/s JainCo continued though as per the agreement dated 07.01.2006 of M/s JainCo with M/s Duro Marketing Pvt. Ltd (A3) Ex.PW39/B (page 300 to 302 D117), M/s JainCo ceased to exist and all the assets and liabilities of M/s JainCo were taken over by M/s Duro Marketing Pvt. Ltd (A3). In the sanctions/proposals and approvals by both the banks i.e. State Bank of India and Union Bank of India, it was clearly mentioned that M/s Duro Marketing Pvt. Ltd (A3) has taken over the assets and liabilities of M/s JainCo. Surprisingly, the operations in the account of M/s JainCo were allowed to be continued by both the banks/their officials. Substantial transactions were made from/to the account of M/s CC No. 42/12 (25/16) 06.07.2018 208 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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JainCo. Similarly, the operations were made in the company M/s Supreme Traders of which Mukesh Jain was the proprietor. Testimonies of the PW18, PW21, PW58 and PW60 would show that no firm in the name of M/s Supreme Traders existed at the address 2645, First Floor, Ballimaran, Delhi. Record shows that the firm was only on papers and no business was being carried out by the said firm. Statements of accounts show that substantial transactions were made from/on the said firm. The accounts of the above firm were used to divert the funds which were later on misappropriated by the accused Mukesh Jain (A1). The supplies were shown to have been made by the firms M/s JainCo and M/s Supreme Traders to the companies owned by Ashok Bharti and V.S. Pillai. Similarly, supplies were shown to have been made from the firms/companies owned by Ashok Bharti and V.S. Pillai to M/s Duro Marketing Pvt. Ltd (A3), though in fact there were no such supplies and those supplies were only on papers. The above companies of Ashok Bharti and V.S. Pillai were not even registered with the Sales Tax/VAT department. PW18 and PW21 have stated that the firms M/s Supreme Traders, M/s Sharma Enterprises, M/s Shiv Shakti Udyog did not exist at the given address nor the above firms were registered with the Trade and Tax Department for VAT. PW19 has stated that the firm M/s Kwality Enterprises and M/s Shiv Sales Corporation were not registered with the Department of Trade and Taxes. Testimony of DW1 shows that if a company is dealing with taxable and non taxable commodities, it is required to be registered and if its CC No. 42/12 (25/16) 06.07.2018 209 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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turnover is more than Rs.20.0 lacs, it is mandatory for it to file quarterly periodic tax return. In the instant case, the statement of accounts shows that the annual turnover of the above companies was more than Rs. 20.0 lacs but none of the above firms were registered with the Trade and Tax Department for VAT.

136. Facts and circumstances show that all these transactions were shown on papers though in actual there were no such transactions. It is significant to note that M/s Duro Marketing Pvt. Ltd (A3) purchased the commodities from M/s JainCo through the companies owned by Ashok Bharti and V.S. Pillai without making direct purchase from M/s JainCo though both the firms were owned and managed by the accused Mukesh Jain (A1). The testimonies of the witnesses show that for the above transactions, accused Ashok Bharti, V.S. Pillai, Rakesh Khurana and Vinod Khanna were paid commission which fact is also evident from the statement of accounts.

137. In the instant case, the payments from the accounts of M/s Duro Marketing Pvt. Ltd were made to the individuals i.e. Anil Dhall, Mukesh Jain and Fayaz. Substantial payment of about Rs. 1.47 crores was made in 'yourself account' from which the pay orders in the name of the firm M/s Supreme Traders and others were got prepared from the Bank. From the account of M/s JainCo, amount of about Rs. 1.51 crore was transferred in the individual account of Mukesh Jain. Similarly, from the account of M/s Supreme Traders, about Rs. 91.0 lacs were transferred in the account of M/s JainCo and Rs. 79.0 lacs were transferred in the individual CC No. 42/12 (25/16) 06.07.2018 210 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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account of Mukesh Jain. From the account of Kwality Enterprises of V.S. Pillai, substantial transactions of about Rs. 4.83 crores were made to M/s JainCo, about Rs. 28.0 lacs to M/s Supreme Traders, about Rs. 41.0 lacs to Sharma Enterprises and about Rs. 6.4 lacs in the personal account of Mukesh Jain. It has also come in the testimony of V.S. Pillai/DW4 that accused Mukesh Jain had got opened the account of M/s Kwality Enterprises on 04.05.2007 for doing the business from China. Two accounts in the name of Mohan Dass & Co. were also got opened in 2007. He had paid Rs. 4.95 lacs to M/s JainCo. He had also taken loan of Rs. 5.0 lacs from the bank. He received the cotton cloth fabric from M/s JainCo. He used to sell the said fabric to M/s Duro Marketing Pvt. Ltd (A3). The question arises when both the firms were owned by Mukesh Jain, what made Mukesh Jain purchase material through M/s Kwality Enterprises. The accounts statements also create suspicion as to the veracity of the transactions amongst the above firms.

138. Facts and circumstances rather show that the transactions were fictitious/sham transactions with an intent to defraud the bank to avail the maximum credit facilities / overdrawals.

139. Testimonies of the witnesses also show that the cheques of major amounts were passed with the approval of the accused A5. I do not agree with the submissions of A5 that the bank had no control over the clearing of cheques or that the bank did not check/monitor the operation of accounts even on monthly basis or that the cheques were cleared by the clearing house officials CC No. 42/12 (25/16) 06.07.2018 211 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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depending upon the value of stocks and book debts as informed by the party or that on the request of the party, cheques in the name of yourself were taken or that the bank did not know if Mukesh Jain was the proprietor of M/s Supreme Traders. The terms and conditions of the sanction letter dated 05.03.2007 clearly stipulated that interfirm transfers of funds in no case would be permitted in the group accounts of the company/firm and the branch would ensure the end use of the funds but in the instant case no proper control was exercised by A5 or his officers which was clearly in violation of the terms & condition of the sanction letter. The record shows that interfirm transfers were allowed and A5 honoured the cheques/demand drafts favouring M/s JainCo knowing fully well that the firms had ceased to exist after the incorporation of M/s Duro Marketing Pvt. Ltd (A3). A5 also allowed cheques/demand drafts favouring M/s Supreme Traders. Both these firms belonged to the accused Mukesh Jain. It is also reflected from the statement of accounts that A5 allowed credits in the accounts of M/s Duro Marketing Pvt. Ltd (A3) against uncleared cheques deposited by the company at the end of the month which subsequently returned as unpaid at the starting of the following month. The funds were diverted through dummy accounts and sham business transactions and CC limit was not utilized for the genuine trade transactions. Even M/s Duro Marketing Pvt. Ltd (A3) opened accounts with Oriental Bank of Commerce, Chawri Bazar and Andhra Bank, R.K. Puram which was in clear violation of the terms of sanction advice whereby CC No. 42/12 (25/16) 06.07.2018 212 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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banking with the other banks was prohibited.

140. From the above, it is clear that inter firms transfers and unauthorized credits in the account of M/s DMPL (A3) against uncleared cheques deposited by A3 at the end of the month which subsequently returned unpaid at the starting of the following month were made/allowed. The funds were not utilized by A3 for genuine trade transactions. The funds were diverted/ siphoned off through dummy accounts and Sham business transactions by A3 through A1 in active connivance with A7, A8 and A9 (deceased). A5 or his officials did not ensure the end use of the funds as stipulated in the sanction letter dated 05.03.2007.

(J) Additional Collateral security in the form of FDR:

141. As per the terms of sanction, A3 was to pledge FDR of Rs. 51.0 lacs as additional collateral security. It was alleged by the prosecution that M/s Duro Marketing Pvt. Ltd (A3) had to create the FDR from its own resources but it generated the FDRs from the disbursal of the funds in April, 2007. A5 also allowed the remaining Rs. 1.0 lac from the funds of CC limits by excess overdrawing without the approval of the competent authority. Perusal of the current account and cash credit account of M/s Duro Marketing Pvt. Ltd (A3) with Union Bank of India, Sadar Bazar Branch and the sanction letter dated 05.03.2007 would reveal that the CC and other limits were sanctioned on 05.03.2007. The current account was opened in December, 2006. The CC account was opened on 30.03.2007. Rs. 2.25 crores were CC No. 42/12 (25/16) 06.07.2018 213 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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released to State Bank of India on 30.03.2007. The FDRs were got prepared on 18.04.2007 and 20.04.2007 from the current account which were pledged as additional collateral security. Additional FDR of Rs. 1.0 lac was got prepared on 30.06.2007. I am in agreement with the submissions of accused A5 that the FDRs of Rs. 50.0 lacs were made by A3 from the funds in its current account and not from the funds which were released from the CC account. He has explained that by mistake J.B. Handa (PW63) had made the FDR of Rs. 50.0 lacs instead of Rs. 51.0 lacs and when this fact came to their notice through auditor, J.B. Handa immediately diverted the cash credit entry of the party by Rs. 1.0 lacs and made the FDR of Rs.1.0 lacs in the name of A3.

142. I am of the view that it is an inadvertent omission and it cannot be said to be intentional. It is also relevant to mention that as per the terms of sanction vide Ex.PW49/1 (D9), the additional collateral security in the form of FDR was required for import/inland LC facility. In the instant case, Union Bank of India never released the import/Inland LC facility to M/s Duro Marketing Pvt. Ltd (A3). For the said reason, A5 cannot be faulted on this count.

(K) Excess withdrawals by M/s Duro Marketing Pvt. Ltd (A3):

143. It is evident from the record and the statement of accounts that CC limit was sanctioned on 05.03.2007. Upto June, 2007 extensive withdrawals were made. The withdrawals were in excess of the sanctioned limit. The outstanding as on 29.06.2007 was Rs. 449.24 lacs meaning thereby that the account was already running CC No. 42/12 (25/16) 06.07.2018 214 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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in excess by Rs. 49.24 lacs The branch further transferred Rs. 60.0 lacs on 30.06.2007. After application of interest for June, 2007, total clear balance reached to Rs. 520.0 lacs taking the total amount of exceeding in OD to Rs. 120.0 lacs against the Branch Manager's delegation of Rs. 25.0 lacs only. A5 allowed the excess in the account beyond his delegated power and without verifying the genuineness of the business requirement. Though the accused has claimed that fortnightly statements in the form of F1 used to be sent to the Regional Office but the inquiry and investigation revealed that the F1 statements or excess reports from the Branch were not timely generated and there was no timely reporting of excesses to the Regional Office through F1 statements. The letters of Regional Office for excesses from September, 2007 to December, 2007 were issued in January 2008 only, which were never replied by the branch. The statement of account also shows that large number of cheques deposited by the party were returned unpaid. A brief comparison of turnover and returning of cheque is as under:

                 Month                                Credit turnover                      Cheques 
                                                      (Rs. In lacs)                        returned
                                                                                           (Rs. In lacs)
                  July,2007                           228.51                               163.00
                 August, 2007                         40.48                                136.00
                 September, 2007                      6.00                                 216.00
                 October 2007                         61.30                                41.55
                 November 2007                        12.16                                107.00
                 December 2007                        NIL                                  121.00



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144. The statement of account further shows that on most of the instances, the party had deposited the cheques in clearing on the last days of the month in order to bring the outstanding below the sanctioned limit which cheques were returned unpaid in the first week of the next month. Thus, the possibility of these transactions being of accommodative nature cannot be ruled out. The operation in the account was not satisfactory. The cheques deposited by the borrower were returned unpaid due to the reason 'insufficient funds'. The turnover in the account was poor. Although the books of accounts revealed that the customer was doing regular sales in crores every month but there was virtually no realization of debts since July/August, 2007 even the sales made in April/May 2007 were not realized. The sales tax returns showed Nil.

145. It is relevant to mention that in the proposal submitted to the Regional Office, enhancement of CC limit from Rs. 2 crore to Rs. 4 crore was considered to fund the existing activities as well as the new activity of import and selling of wet napkin dispenser machines. For carrying out import of these machines, party was sanctioned LC limit of Rs. 100 lacs. In the instant case, this import LC limit was never utilized by the party. The statement of account shows that the Branch released the entire CC limit of Rs. 4 crores and allowed excesses as on 30.06.2007 even though there was no activity of import and sale of wet Napkin dispenser machines. While submitting the proposal, it was strenuously harped by the party / borrower that the company intends to import CC No. 42/12 (25/16) 06.07.2018 216 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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wet towel machines, it has given demonstration of dispenser machines in hotels and other public places and has received a good response and the projected sales of dispenser and diapers was pegged at Rs. 10.0 crores in the year 20072008 which was likely to be achieved by the company. This was made the basis when the proposal was recommended but surprisingly while allowing the overdrawals, A5 never asked from A3 about the import of the dispenser machines and its business nor at any time status of the business was called though it was incumbent upon A5 to know what business the party has been doing or whether the sales as projected or targeted are being achieved by the company as proposed but in this case no such monitoring was done by A5. It appears that the scheme was made only on papers just to avail the cash credit facilities without intending to do any business of wet towel dispenser machines.

146. From the facts & circumstances, it emerges that withdrawals exceeding the sanctioned limits were allowed by A5 beyond his delegated power and without verifying the genuineness of the business requirement. There was no timely reporting of the excesses to the Regional Office through F1 statements. A3 deposited the cheques in clearing on the last days of the month in order to bring down the outstanding within the sanctioned limit which cheques were returned unpaid in the first week of the next month. The turnover in the account was very poor. There was virtually no realization of the debts since July/August, 2007. Even the sales made in April/May, 2007 were not realized. A5 never CC No. 42/12 (25/16) 06.07.2018 217 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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enquired from A3 about the import of the dispenser machines. A3 never availed the LC limit.

(L) Handwriting and Specimen signatures

147. In the instant case, the questioned documents and specimen signatures and handwritings were sent for GEQD. The documents were examined by PW64 who in his report Ex.PW64/B (D278) opined that the signature and the writings on the questioned documents matched with the signatures and handwritings of the accused persons. It has come in the testimony of PW25, PW27, PW28, PW29 that in their presence the specimen handwritings and signatures of the accused Mukesh Jain were taken. PW66 IO has stated that he had taken the specimen signatures and handwritings of the accused persons in the office of CBI and they had voluntarily given their specimen signatures and handwritings. The accused persons did not dispute as to their handwriting and specimen signatures to the investigating officer/PW66.

148. Section 45 of Indian Evidence Act lays down that when the Court has to form an opinion as to the identity of handwriting or finger impression, the opinions of an expert in that science is a relevant fact. If in the opinion of an expert, the two handwritings match with each other, this per se attains the color of conclusive evidence as per the Indian Evidence Act. To say it differently, the matching of two handwritings is itself a conclusive evidence u/s 45 of Indian Evidence Act if the Court is convinced from the report of an expert in this regard and the opinion of the CC No. 42/12 (25/16) 06.07.2018 218 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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handwriting expert is sought only to facilitate the Court to form an opinion on this point. The appropriate interpretation of Section 45 of Indian Evidence Act coupled with section 73 of the Evidence Act is that court is competent to form its own opinion on the point of identity of handwriting and for that purpose the court may call for the report of an handwriting expert. Therefore, the relevant fact before this court is the matching or non matching of the handwriting. The Supreme Court in Murari Lal v. State of M.P., AIR 1980 SC 531 has held that handwriting expert is not an accomplice and there is no justification for condemning his opinion evidence. It was held that if the Court is convinced from the report of an expert that the questioned handwriting was of the accused, there is no difficulty in relying upon the expert's opinion without any corroboration.

149. Although, in the instant case, the specimen writings/signatures of accused persons were obtained during the investigation by the IO in the office of CBI and it were not taken under the orders of the Court but the accused persons never stated that their signatures were taken under duress. It was held in the case of Rekha Sharma v. CBI Crl. Appeal No. 124 of 2013 and others decided on 05.03.2015 that the report of the expert and analysis of handwriting and signatures specimens of the accused persons cannot be rendered in admissible on the ground that it was obtained in violation of prescribed procedure.

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(M) Sanction for prosecution of accused Mahesh Chand Aggarwal (A5) and I S Mehra (A6) u/s 19 of the Prevention of Corruption Act, 1988.

150. In the instant case after the investigation, CBI requested the competent authority to accord sanction for prosecution against the bank officials namely I.S. Mehra (A6) and M.C. Aggarwal (A5). The sanctions were accorded by PW5 and PW6 vide Ex.PW5/A and Ex.PW6/A respectively. Both PWs have stated that they being the General Managers were the appointing and removing authority of the accused persons who were the branch managers in State Bank of India and Union Bank of India at the time of the alleged fraud. They have stated that they had minutely perused the statements and the documents and thereafter accorded the sanction. Although PW5 has admitted that he did not check from the Hauz Qazi Branch whether on 25.02.2007 being Sunday branch was open or not or prior to 25.02.2007 accused A5 had been relieved from the Hauz Qazi Branch or whether the account of A3 was NPA or not but from this nothing can be inferred that PW5 did not apply his mind and he accorded the sanction in a mechanical manner as alleged by the defence. He had seen all the records and the documents. Further, the testimonies of the bank officials particularly the officials of the State Bank would show that the accused I.S. Mehra was no more the Branch Manager in Hauz Qazi Branch when he issued the letter dated 25.02.2007 giving the report on the position of the account of A3 and A.K. Fotedar was the Branch Manager at that time. The statement CC No. 42/12 (25/16) 06.07.2018 220 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Ex.PW4/A and the testimonies of the witnesses also show that the account had become sub standard. Though the computer was not showing that the account was sub standard or NPA but it had become NPA. There was no realization of interest for more than 90 days in the account as provided under the circular. It is not in dispute that on 25.02.2007 it was Sunday and the branch was opened but on that day the accused was not called in the capacity of the Branch Manager. Rather, he was called for central inspection to be carried out in the Bank. None of the witnesses stated that accused I.S. Mehra was not relieved from the branch or he was the Branch Manager at the relevant time. The statement of accused u/s 313 Cr.P.C would also show that he had attended the bank on the instructions of the senior officers for inspection purpose only.

151. It is true that PW6 in his crossexamination has admitted that the final authority to sanction the loan in this case was the AGM and the proposal was examined by the officers of GRID and Risk Management Department and they did not point out any deficiency in the proposal but looking into the facts as stated above which is also mentioned in the sanction order Ex.PW6/A, it cannot be said that PW6 acted mechanically. He has mentioned in the order that the accused did not obtain the statement of account of the company for the last one year though it was stipulated, he did not ensure compliance of predisbursal and post disbursal conditions of the CC limit. He allowed excess overdrawings beyond his delegated power on several occasions. He CC No. 42/12 (25/16) 06.07.2018 221 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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accommodated the borrower to the extent that he allowed credit of high value cheques in the account of M/s Duro Marketing Pvt. Ltd without clearance which was subsequently returned unpaid. He also allowed diversion of funds by the borrower to its sister concerns and other fictitious accounts. All these facts show that he had applied his mind before according the sanction.

152. Purpose to give sanction for prosecution is to apprise the Court to take cognizance of the offence against the public servant. It is an administrative order not passed under any quasi judicial proceedings. It has no effect on the merit of the case. The sanctioning authority has not to act as a Court. It has to form a satisfaction after applying its mind whether the sanction for prosecution should be granted or not. Section 465(2) Cr.P.C that the objection as to the sanction should have taken at the earliest opportunity which was not done in the present case. Once the order of cognizance is passed, the Court cannot review its own order in the absence of any specific provision. In the case of R. Venkatakakrishnan Vs. CBI, Crl. Appeal no. 76 of 2004 decided on 07.08.2009, it was held that as per the section, a finding or a sentence shall not be reversed by a Court of appeal on the ground of any error, omission or irregularity in the sanction order unless a failure of justice has been occasioned thereby. The sanctioning authority had nothing to do with the recovery even if it was effected after the sanction. In the case of Gurbachan Singh vs. Satpal Singh and Ors. 1990 AIR 2009, it was held that the Court must strictly be satisfied that no innocent person, (innocent in the CC No. 42/12 (25/16) 06.07.2018 222 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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sense of not being guilty of the offence of which he is charged) is convicted even at the risk of letting of some guilty persons. Exaggerated devotion to the rule of benefit of doubt must not nurture fanciful doubts or lingering suspicions and thereby destroy social defence. Justice cannot be made sterile on the plea that it is better to let hundred guilty escape than punish an innocent. Letting guilty escape is not doing justice, according to law.

153. In the case of CBI vs. Ashok Kumar Aggarwal, 2014 Crl.LJ 930, it was held that the order of sanction should make it evident that the authority had been aware of all or relevant facts/materials and had applied its mind to all the relevant material. 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.

154. In State of Maharashtra through CBI vs. Mahesh G. Jain, (2013) 8 SCC 119, it was held by the Supreme Court that while sanctity attached to an order of sanction should never be forgotten but simultaneously the rampant corruption in society has to be kept in view. The Supreme Court considered various case laws on this issue and crystallized the following principles "14.1. 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.

14.2. The sanction order may expressly show that the sanctioning authority has perused the material placed before it and, after consideration of the circumstances has granted sanction of prosecution.

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that the material was placed before the sanctioning authority and its satisfaction was arrived at upon perusal of the material placed before it.

14.4. 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 offence.

14.5. 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. 14.6. If the sanctioning authority has perused all the materials placed before it and some of them have not been proved that would not vitiate the order of sanction. 4.7. The order of sanction is a prerequisite as it is intended to provide a safeguard to a 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 hypertechnical approach to test its validity".

155. In the instant case the prosecution has placed the original sanction orders before this Court and has also examined the sanctioning authorities as the witnesses. In view of the above discussions as well as the principles reiterated by the Supreme Court in Mahesh G. Jain's case supra, a hypertechnical view of the sanction order cannot be taken. It should also not be lost sight of that the sanctioning authority is not required to conduct a parallel investigation into the offences at the time of grant of sanction. I am of the view that the sanction orders vide Ex. PW 5/A and Ex.PW6/A to prosecute A5 and A6 were the valid sanction orders.

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(N) Sale proceeds effected through DRT towards the realization of amount.

156. It was contended by ld. counsel for A5 that there was no loss to the bank as the alternate property was sold in auction and the sale proceeds were appropriated towards the loss of the bank.

157. Ld. PP on the contrary argued that suffering of loss is not sine qua non for recording the conviction.

158. I have considered the submissions.

159. In the case of CBI vs. Jagjit Singh, Crl. Appeal no. 1580 of 2013 decided on 01.10.2013 it was held:

"The debt which was due to the bank was recovered by the Bank pursuant to an order passed by Debt Recovery Tribunal. Therefore, it cannot be said that there is compromise between the offender and the victim. The offences when committed in relation with banking activities including offences u/s 420/471 IPC have harmful effect on the public and threaten the well being of the society. These offences fall under the category of offences involving Moral Turpitude committed by Public Servant while working in that capacity. Prima facie, one may state that the bank as the victim in such cases but in fact the society in general including customers of the bank is the sufferer".

160. In the case of R. Gopalakrishnan vs. The State, 2002 Crl.L.J 47, it was held that the mere fact that the bank did not lose any money or the company was able to recover the money from A3 through the court proceedings, would not absolve the appellant of his criminal liability.

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161. In the case of R. Venkatakrishnan Vs. CBI, Crl. Appeal no. 76 of 2004 decided on 07.08.2009, it was held that the submission of the ld. Counsel that the banks have not initiated any proceedings and suffered any loss and thus the judgment of conviction and sentence of criminal breach of trust is wholly unsustainable cannot be accepted. It is not the law that suffering of loss is a sine qua non for recording the judgment of conviction.

162. It is true that in the recovery proceedings initiated by the bank, the amount was realized by sale of the property but it cannot be lost sight of the fact that this offence was committed in relation of the banking activities and this offence falls under the category of offences involving moral turpitude. Relying on the cases as referred above, I am of the view that although the bank did not lose any money or the bank was able to recover the money from A3 through the recovery proceedings but this would not absolve the accused persons of their criminal liability. That being the position, no benefit can be given to the accused persons on this count.

(O) Criminal Conspiracy

163. An agreement to commit an offence or an illegal act between two persons or more is the essence of conspiracy. Such an agreement is designated as criminal conspiracy. In Kehar Singh v. State (Delhi Administration) AIR 1988 SC 1883 (known as Indira Gandhi murder case) it was held:

Generally, a conspiracy is hatched in secrecy and it may be CC No. 42/12 (25/16) 06.07.2018 226 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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difficult to adduce direct evidence of the same. The prosecution often relies on evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon circumstantial evidence. The conspiracy can undoubtedly be proved by such evidence direct or circumstantial. But the Court must enquire whether the two persons are independently pursuing the same end or they have come together in the pursuit of the unlawful object. The former does not render them conspirators, but the latter does. It is, however, essential that the offence of conspiracy requires some kind of physical manifestation of agreement. The express agreement, however, need not be proved. Nor actual meeting of two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient.

It is unnecessary to prove that the parties "actually came together and agreed in terms" to pursue the unlawful object; their need never have been an express verbal agreement, it being sufficient that there was a "tacit understanding between the conspirators as to what should be done".

164. In the case of State of Maharashtra & ors v. Somnath Thapa & Ors. (1996) 4 SCC 659, the Supreme Court observed that for a person to conspire with another, he must have knowledge of what the conspirators wanted to achieve and thereafter having the intent to further the illegal act takes recourse to a course of conduct to achieve end or facilitate its accomplishment.

165. In the case of Baliya vs. State of MP (2012) 9 SCC 696, it was held:

15..........The foundation of the offence of criminal conspiracy is an agreement between two or more persons to cooperate for the accomplishment/ performance of an illegal act or an act which is not illegal by itself, through illegal means. Such agreement or meeting of minds create CC No. 42/12 (25/16) 06.07.2018 227 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the offence of criminal conspiracy and regardless of proof or otherwise of the main offence to commit which the conspiracy may have been hatched once the unlawful combination of minds is complete, the offence of criminal conspiracy stands committed....

17. The offence of criminal conspiracy has its foundation in an agreement to commit an offence or to achieve a lawful object through unlawful means. Such a conspiracy would rarely be hatched in the open and, therefore, direct evidence to establish the same may not be always forthcoming. Proof or otherwise of such conspiracy is a matter of inference and the court in drawing such an inference must consider whether the basic facts i.e. circumstances from which the inference is to be drawn have been proved beyond all reasonable doubt, and thereafter, whether from such proved and established circumstances no other conclusion except that the accused had agreed to commit an offence can be drawn. Naturally, in evaluating the proved circumstances for the purposes of drawing any inference adverse to the accused, the benefit of any doubt that may creep in must go to the accused.

166. In the case of CBI vs. K. Narayana Rao (2012)9 Scale 25), it was held:

24. The ingredients of the offence of criminal conspiracy are that there should be an agreement between the persons who are alleged to conspire and the said agreement should be for doing of an illegal act or for doing, by illegal means, an act which by itself may not be illegal. In other words, the essence of criminal conspiracy is an agreement to do an illegal act and such an agreement can be proved either by direct evidence or by circumstantial evidence or by both and in the matter of common experience that direct evidence to prove conspiracy is rarely available.

Accordingly, the circumstances proved before and after the occurrence have to be considered to decide about the complicity of the accused. Even if some acts are proved to have been committed, it must be clear that they were so committed in pursuance of an agreement made between CC No. 42/12 (25/16) 06.07.2018 228 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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the accused persons who were parties to the alleged conspiracy. Inferences from such proved circumstances regarding the guilt may be drawn only when such circumstances are incapable of any other reasonable explanation. In other words, an offence of conspiracy cannot be deemed to have been established on mere suspicion and surmises or inference which are not supported by cogent and acceptable evidence.

167. From the proposition of law laid down in the aforesaid judgments, it comes out that in order to prove the conspiracy, prosecution is not required to prove the agreement and to adduce the direct evidence of conspiracy that the parties came together, agreed to pursue the unlawful object. It is not necessary to prove that there was an express verbal agreement but what is necessary to show is that there was some sort of tacit understanding between the conspirators as to what should be done.

(P) Role of Mukesh Jain (A1) and M/S Duro Marketing Pvt Ltd. (A3)

168. Ld. counsel for the accused A1 and A3 vehemently argued that A1 neither created any forged document nor mortgaged the property at Vasant Vihar to the Bank. When R.G. Mundkur joined A3, his identity was not known to A1. He came to know of this fact later. He immediately contacted the bank and replaced the collateral property by mortgaging his residential house which was enough to recover the amount. A1 never intended to defraud the bank and always acted honestly and bonafidely.

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169. Ld. PP per contra argued that facts & circumstances brought on record clearly establish the complicity of the accused A1 and A3 in the alleged offences.

170. I have considered the submissions.

171. It is settled principle of law that the acts of an individual, who is in control of the affairs of the company and is a directing mind, are attributed to the company, in as much as whenever such a person, who is controlling the affairs of the company, is made an accused, on the application of the principle "alter ego", the company can also be implicated as accused person. It is on the well recognized principle that company does not act of its own but through its directors/officers and when such directors/officers act on behalf of the company, the company is also liable for those acts on the application of "principal agent" principle.

172. In the case of Sunil Bharti Mittal vs. CBI (2015) 4 SCC 609, the cases of Keki Hormusji Gharda & ors v. Mehervan Rustom Irani & Anr AIR 2009 SC 2584, S K Alagh v. State of U.P & Ors AIR 2008 SC 1731 were discussed and it was held:

"No doubt, a corporate entity is an artificial person which acts through its officers directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused along with the company, if there is sufficient evidence of his active role coupled with CC No. 42/12 (25/16) 06.07.2018 230 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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criminal intent."

173. On a closer scrutiny of documents and testimonies of the witnesses, I find that A1 was the distributor/trader of foam products etc. He was the proprietor of M/s JainCo which had an account with Oriental Bank of Commerce, Darya Ganj and Andhra Bank, R.K. Puram. Mukesh Jain also opened a saving bank account in Oriental Bank of Commerce, Darya Ganj on 20.06.2007. He knew A2 from before. A2 used to advise him in his business. A1 formed a company in the name of A3 to expand his business. He inducted A2 as a director in the company A3. M/s JainCo entered into an agreement with A3 and it was decided that all the assets and liabilities of M/s JainCo would be taken over by A3. A3 would also use the same TIN and Sales Tax Number which was being used by M/s JainCo. A1 hatched a criminal conspiracy with A2 to avail credit facilities from the bank. He introduced the accused Vinod Khanna (A4) (deceased) as R.G. Mundkur, owner of the property bearing No. A52, Vasant Vihar, New Delhi. In pursuant to the criminal conspiracy, false / forged PAN Card and election card were got prepared in the name of R.G. Mundkur. The photograph on I Card was that of Vinod Khanna. A1 very well knew that A4 was not the owner of the property. He was doing a small business and had an account in Canara Bank, Munirka. He introduced Vinod Khanna as R.G. Mundkur as his distant relative in State Bank of India and Union Bank of India at the time of submitting the loan proposal with the above banks. He got prepared the false documents/sublease deed CC No. 42/12 (25/16) 06.07.2018 231 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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of the property at Vasant Vihar in the name of R.G. Mundkur and submitted to the banks as Collateral Security for availing the Cash Credit Facilities. He also submitted the false/forged 'No objection certificates' purportedly issued by DDA qua the permission to mortgage the property which were never issued by DDA.

174. A2 Anil Dhall knew that the documents of the property submitted with the banks were the false/forged documents and DDA never issued the NOC in favour of R.G. Mundkur to mortgage the property. When the accounts were opened and the documents were executed with the bank at the time of availing the CC facilities, A2 appeared with Mukesh Jain and Vinod Khanna @ R.G. Mundkur. A2 never brought this fact to the knowledge of the Bank that the documents were false and fabricated. He was party to all the transactions made by A3 with State Bank of India till the sanction of loan by Union Bank of India. A2 resigned from the company only on 30.03.2007. He never tried to find out whether his name was deleted from the list of directors. From the account of A3, money was transferred in the account of A2.

175. A1 falsely mentioned in the proposal that Vinod Khanna @ R.G. Mundkur has established himself into garment export and trading of clothes. A1 and A2 made the bank officials believe that the documents of the property offered for mortgage were the genuine documents. A1 for himself and on behalf of A3 started making excess withdrawals after conniving with A6. The account of A3 very soon turned into NPA. A1 then approached Union Bank of India and met A5 for taking over the account of A3. He falsely CC No. 42/12 (25/16) 06.07.2018 232 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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represented to Union Bank of India that State Bank of India is not in a position to grant them any enhancement till the completion of one year at the time of submitting the loan proposal. He later misrepresented that A3 was unable to get enhanced limit sanctioned from State Bank of India as the Manager of State Bank of India was only of ScaleIII and there was no loan officer in the Bank to process the loan and moreover the attitude of the Branch Manager was lackadaisical. He never revealed the factual position of the account which had become substandard. He falsely represented to the bank that the company was expecting a spurt in its turnover as they were planning to market wet napkin dispenser machines. He got sanctioned the enhanced limits from Union Bank of India but never imported any machine during the entire period of account. He made Union Bank of India take over the NPA account by getting issued a letter from A6 dated 25.02.2007 that the account was standard asset though it was already NPA. He started making excess overdrawals within a span of three months from the date of release of the CC limit. He falsely submitted a letter dated 03.04.2006 purportedly issued by State Bank of India that the LC limit was merged with CC limit though it was never merged. He exhausted the entire limit by diverting/siphoning off the funds to his own/associate companies by indulging in kite flying operations by transferring to the fictitious accounts whereas one of the conditions of the sanction of the enhanced limit by Union Bank Of India was that the branch shall ensure the end use of funds. He formed the company M/s CC No. 42/12 (25/16) 06.07.2018 233 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Supreme Traders on papers for siphoning off the funds. He got opened the accounts of M/s Kwality Enterprises, M/s Shiv Shakti Udyog, M/s Mohandas & Co., through the accused persons Ashok Bharti (A8) and V.S. Pillai (A7) to facilitate inter firms transfers of funds by paying them commission though in actual the above firms had not been doing any business as evident from the record. He diverted the funds in his personal saving accounts and made substantial withdrawals. He after conniving with the bank officials deposited high value cheques on the last day / last but one day of the month and got the same dishonoured on the opening of the month. The record revealed that there were no genuine trade transactions and all these accounts were operated to siphon off/ misappropriate the funds. The testimonies of the witnesses and the documents show that A7, A8 and A9 (deceased) were the commission agents and all the transactions in the accounts were made/shown at the behest of A1. His intention since inception was to defraud the bank which he succeeded as huge amount of funds were transferred/siphoned off in the personal account of A1 or his associate companies/firms which he later misappropriated and converted for his own use.

176. I am not in agreement with the contention of ld. counsel for the accused that the accused did not know the identity of R.G. Mundkur when he joined the company. Facts & circumstances show that he knew the accused Vinod Khanna from before. He also knew that he had an account with Canara Bank, Munirka Branch. He was the person who had introduced Vinod Khanna as CC No. 42/12 (25/16) 06.07.2018 234 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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R.G. Mundkur. He knew that the documents which were being used as collateral security were the false/forged documents which he used as genuine at the time of taking the credit facilities from the banks introducing Vinod Khanna as R.G. Mundkur. He also represented that Vinod Khanna is his distant relative while submitting his profile. The recovery of forged sublease deed of the property from the house of Anil Dhall during house search and the letter of DDA declining the permission to mortgage the property prove the complicity of accused Mukesh Jain in the commission of the alleged offence. He opened the account with Andhra Bank in violation of the terms of sanction and made inter firms transfers to siphon off/ misappropriate the funds thus, defrauded the bank.

177. Admittedly, the bank could succeed in getting the original papers of his residential property to realize the amount but the accused A1 had left no stone unturned to defraud the bank. He was in the knowledge of the forged documents which he used as genuine. He introduced someone else as Anil Dhall when he opened the account in Oriental Bank of Commerce, Chawri Bazar though at that time, Anil Dhall was very much the director of the company.

178. Facts & circumstances show that A1 was the main conspirator and beneficiary of whole of the transactions. He continued the operations in M/s JainCo though as per the agreement M/s JainCo had ceased to exist. The substantial transactions were made in the account of M/s JainCo. Admittedly, the amount was realized by auctioning the property but on account of this recovery, A1 for CC No. 42/12 (25/16) 06.07.2018 235 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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himself and for A3 cannot be absolved of the criminal liability.

179. I am of the view that A1 was party to the criminal conspiracy to defraud the bank and in pursuant thereto, he cheated the bank by dishonestly inducing the bank to release the CC limits which he misappropriated and converted to his own use. He also used the forged documents as genuine fully knowing that the documents were forged. A1 and A2 in furtherance of this criminal conspiracy induced Vinod Khanna A4 (deceased) as the third director in A3 impersonating as R.G. Mundkur. They fraudulently introduced Vinod Khanna (A4) as R.G. Mundkur as the owner of the property bearing no. A52, Vasant Vihar, New Delhi. A1 got prepared the false documents of the above property which were capable of converting into valuable security. Forged documents were recovered from the possession of the accused A2 which A1 knew or had reasons to believe that it were the forged documents which he intended to use as genuine. He also connived with the officials of Union Bank of India and State Bank of India i.e. A5 and A6 who facilitated A1 in the said transactions. A5 and A6 being the public servants abused their official position and gave pecuniary advantage to the accused A1.

(Q). Role of Anil Dhall (A2)

180. Facts & circumstances of the present case show that Anil Dhall (A2) had prior acquittance with A1. He had claimed to be a Cost Accountant having an expertise in accounting. A2 used to advise Mukesh Jain (A1) in his business. He joined the hands with A1 CC No. 42/12 (25/16) 06.07.2018 236 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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and became the director of A3. A3 then entered into an agreement with M/s JainCo, the firm owned by A1. The assets and liabilities of M/s JainCo were taken over by A3. A2 also assisted A1 in negotiating with the Chinese company in the financing matters and to finalize the proposed import business. He alongwith A1 approached State Bank of India for sanction of Rs. 2.0 crores limits in the beginning of 2006. He was signatory to all the documents at the time of proposal and sanction of the limits by State Bank of India.

181. The documents placed on record belie the contention of the accused that the company (A3) was formed without the knowledge of A2 or he never signed any document or was not the signatory to the application. He was very well present in the bank when Vinod Khanna was introduced as R.G. Mundkur, as owner of the property at Vasant Vihar which was used as collateral security to avail the credit facility. He had signed all the loan documents. He had visited China alongwith A1 and participated in the negotiations in the deal with the manufactures of consumer durables. He knew that excess withdrawals were being made by A3 without any business which he never objected nor he reported it to the bank. He had equally participated at the time of taking over the account from State Bank of India by Union Bank of India. He had signed all the relevant documents as a director of the company. He had also submitted his profile and negotiated with the bank. As per the resolution, he could operate the account of A3 jointly or severely with A1. He was the director when the CC No. 42/12 (25/16) 06.07.2018 237 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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limits were sanctioned by Union Bank of India and the loan documents were executed and the cheque of Rs. 2.25 crores was released in favour of State Bank of India. He had resigned from A3 only on 30.03.2007. His resignation was accepted on 31.03.2007. He did not try to know whether his resignation was incorporated in the record of Registrar of Companies or the Bank.

182. From the house search of accused Anil Dhall, on 20.08.2008, vide memo Ex. PW 22/A (D2), 92 documents Ex. PW 22/B collectively were recovered which included forged original Perpetual Sublease Deed in respect of property A52 Vasant Marg, Vasant Vihar, New Delhi and other documents relating to the aforesaid property i.e copy of Will, Agreement to Sell, MOU and the correspondence with DDA etc. As per the documents, R G Mundkur had an Agreement to Sell with P S Mehlawat. As per the documents, one PAN card was issued to R G Mundkur in which his date of birth has been shown as 08.07.1942. There was a voter I card in the name of R G Mundkur issued on 28.10.97. The documents seized from the accused Anil Dhall (Page 75) also included a letter dated 28.03.2006 issued by DDA whereby the permission to mortgage the above property with State Bank of India was declined by DDA. It implies that Anil Dhall was very well aware that DDA had declined the permission to mortgage the property but he concealed this fact from State Bank of India when the above CC facilities were availed. Further the record of the State Bank of India would show that a false no objection letter purportedly of the date 30.01.2006 (Page 432 D379) was CC No. 42/12 (25/16) 06.07.2018 238 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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submitted showing the permission of DDA to mortgage the property.

183. Admittedly in the instant case, he did not sign any cheque but from this, no inference can be drawn that he was not involved in day to day affairs of the company A3. I am not in agreement with the contention of the accused that he never negotiated with the Union Bank of India nor visited the branch regarding the loan or he was made a victim by A1. Facts & circumstances show that he had gone to the bank when the documents were executed. The documents recovered from his house clearly prove his complicity in the commission of the alleged offences. He had received Rs. 2,59,200/ from A3. Though he has claimed that it was his salary but there is no document to substantiate this fact.

184. I am of the view that A2 was party to the criminal conspiracy with A1 and A4 and in pursuant thereto, A1 defrauded the bank and availed the cash credit limits using the forged documents as genuine. A2 very well knew that Vinod Khanna was not R.G. Mundkur whom the accused A1 introduced as R.G. Mundkur. A2 never told the bank officials that the person signing the collateral security documents was not R.G. Mundkur but it was Vinod Khanna who had been impersonated as R.G. Mundkur. From his possession forged sublease deed was recovered. One forged sub lease deed was used as genuine while availing the cash credit facilities from the bank which was converted into a valuable security. He had also interacted with A5 and A6 who by misusing their official positions caused wrongful gain to A3 and A1 by CC No. 42/12 (25/16) 06.07.2018 239 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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indulging in the various acts of criminal misconduct.

(R) Role of V.S. Pillai (A7) and Ashok Bharti (A8):

185. Facts and circumstances show that V.S. Pillai (A7) knew A1 since 1983. He had relations with him. He had suffered huge loss in his business and started doing consultancy. He used to meet Mukesh Jain A1 and tell him that he was not doing any business. He then joined the hands of Mukesh Jain. At the instance f A1, he opened an account in Oriental Bank of Commerce, Laxmi Nagar, Delhi on 04.05.2007 by forming a firm M/s Kwality Enterprises. He started one more firm in the name of M/s Mohan Dass and Co. and opened two accounts in June/July, 2007. Although, the testimonies of the witnesses and statement of accounts of the above firms and A3 show that substantial transactions were made but on a closer scrutiny, I find that the transactions were mainly on papers and there were no genuine transactions. The transactions were routed through the company of Mukesh Jain (A1) i.e M/s JainCo and the funds were diverted for which he was paid commission. This is also evident from the fact that he (A7) received the supply/material from M/s JainCo vide invoices Ex.DW4/1 collectively and sold the material to M/s Duro Marketing Pvt. Ltd A3 vide bills ExDW4/2 collectively which A3 could do directly with M/s JainCo since both the firms were owned and controlled by A1. Further, when M/s JainCo ceased to exist after the incorporation of A3, how could there be the above transactions as claimed by A7.

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186. Facts and circumstances show that he did not have any substantial dealings with A1. Rather, his firms were used by A1 to facilitate the transactions through the other firms owned/controlled by A1. He issued the false bills / invoices. None of the firms of A7 were registered with the Sales Tax/VAT department though huge transactions were shown to have been made from the firms owned by A7. Even the account of M/s Kwality Enterprises also turned NPA and A7 closed the account after the CBI raid. A7 has also admitted to have received the commission from A1 in respect of the above transactions.

187. As regards the role of Ashok Bharti A8, testimonies of PW58 and PW60 would show that Ashok Bharti used to come to meet Mukesh Jain A1. According to them, no firms in the names of M/s Sharma Enterprises, M/s Shiv Shakti Udyog were being run from the address at Ballimaran, Delhi. Testimonies of the officials of VAT Department PW18 and PW21 would also show that no firms in the name of M/s Sharma Enterprises, M/s Shiv Shakti Udyog or M/s Supreme Traders were operating from Ballimaran, Delhi. The statement of accounts and the record show that the transactions shown in the account were only on papers to facilitate the diversion of funds and there were no genuine transactions. A1 used A8 to facilitate those transactions for which A8 was paid commission.

188. Facts & circumstances show that the accused V.S. Pillai A7 and Ashok Bharti A8 were party to the criminal conspiracy with A1 and others who in pursuant thereto committed cheating, forgery CC No. 42/12 (25/16) 06.07.2018 241 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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and used the forged documents as genuine. The above firms were formed by them at the behest of A1 to facilitate the inter firms transactions to divert and misappropriate the funds by A1 for which A7 and A8 were paid commission by A1.

189. Admittedly, neither A7 nor A8 were the directors or the promoters or the subscribers of A3 but they had actively participated in the transactions made by A3 which were routed through them. Admittedly, there was separate entity in the name of M/s Kwality Enterprises of which Rakesh Khurana (A9) (deceased) was the proprietor and from that account some transactions were also made but the statement of accounts and the testimonies of the witnesses clearly establish that A7 and A8 had facilitated sham transactions and for these, they charged commission from A1. This clearly proves their complicity in the commission of the alleged offences.

(S). Role of Ishwar Singh Mehra (A6)

190. Facts and circumstances of the case show that A6, who was the recommending authority of various credit facilities sanctioned by the Zonal Credit Committee of State Bank of India to A3, was very well aware about the various irregularities in the C.C. and other loan accounts of A3. This is evident from the following letters written by the Zonal Office to the Branch:

(a) Letter dated 16.06.2006 Ex. DW11/P1C, in response to Branch letter recommending interchanging of LC Limit of Rs. 50 lacs to CC Limit, wherein the Zonal Office has stated that "since inception the account CC No. 42/12 (25/16) 06.07.2018 242 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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started running irregular due to overdrawings permitted by you without obtaining prior approval of the appropriate authority. Now they have made a request for interchanging of LC Limit with CC Limit and you have also recommended without examination/review of the account. We do not concur with your recommendations." It is pertinent to state that in the same letter at point (iii) the Z.O. wrote "If the irregularity continues over 90 days the account will become NPA";

(b) Letter dated 22.07.2006 Ex. DW11/P1A (D372 to

379) reprimanding Branch for conveying false information apart from pointing out numerous deficiencies and irregularities in the operation of the CC account of A3.

191. On a scrutiny of the statement of account of CC of A3 with State Bank of India (D117) it is evident that the account was continuously overdrawn and such overdrawings were unauthorizedly permitted by A6 in gross violation of the various guidelines issued by State Bank of India. A6 being the Branch Manager of the Branch was very well aware about the health of the various loan accounts of A3 and inspite of that he allowed the overdrawals in various accounts beyond his delegated powers.

192. Although PW4 has stated that the account of A3 was classified as NPA by the State Bank of India on 01.12.2006 (Mark DX/X2 page 371 of D372 to 379) but A6 in his defence has produced the bank statement of CC account of A3 from 30.09.2006 to 31.03.2007 to demonstrate that the account was a standard asset as on 25.02.2007 and the same was not classified as NPA.

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193. As per RBI guidelines applicable to all the Banks, during the relevant period, for classification of assets -"an account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as 'out of order'.

194. The statement of CC account of A3 clearly shows that the account was continuously overdrawn and had become out of order since June,2006. Thereafter, there was no material/significant transaction in the account and the operation was extremely slow/poor. In fact, the last credit entry in the CC account before it was taken over by Union Bank of India was on 5 th Oct. 2006. Moreover the Zonal Office vide letter dated 16.06.2006 Ex. DW 11/P1C stated that "If the irregularity continues over 90 days, the account will become NPA"

195. The entries of 26.02.2007 regarding renewal of CC account as reflected from the statement Ex.DX appears to be made to camouflage the smooth taking over the account from State Bank of India to Union Bank India since State Bank of India was well aware that the proposal was in active consideration with the Union Bank of India and further A6 vide his letter dated 25.02.2007 had CC No. 42/12 (25/16) 06.07.2018 244 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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written to the Union Bank of India that the account is a standard asset so as to facilitate the smooth taking over the account so as to avoid any accountability of the officers of State Bank of India including himself as to the overdrawls.

196. This Court also takes judicial notice of the fact that no separate accounting entry is required to be passed by the Bank at the time when the Loan account is classified as NPA. The classification of loans into standard asset and NPA is mainly based on the criteria to generate income for the Bank. The RBI's circular at point 2.1.1 states that "An asset, including a leased asset, becomes non performing when it ceases to generate income for the bank." The same circular at point 4.2.2 states that "Banks should establish appropriate internal systems to eliminate the tendency to delay or postpone the identification of NPAs ...... The classification of loan accounts by the Bank into standard asset, substandard, doubtful and lost asset is mainly done to know the real position of the health of the loan account and to intensify the recovery efforts in respect of loans other than the standard assets. It is an admitted fact that since 5th October, 2006, there were no credits in the CC account of A3 coupled with the fact that the account was continuously overdrawn.

197. Therefore, in view of the above said irrefutable facts the account of A3 with State Bank of India was NPA account as on 25.02.2007.

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198. It is an admitted fact that A6 was transferred from Hauz Qazi Branch to Model Town Branch vide order dated 09.10.2006. It has come in evidence that A6 was called for official work at Hauz Qazi Branch from 05.02.2007 to 09.02.2007 and from 12.02.2007 to 27.02.2007. The official work could have been only to assist the Hauz Qazi Branch in some old matter to which A6 could have been familiar with. It has nowhere come in evidence that A6 was given the charge of the Hauz Qazi Branch as Branch Manager after his joining at Model Town Branch.

199. In view of the above said proven facts, it can be concluded that A6, posing himself as Branch Manager of Hauz Qazi Branch, unauthorisedly and falsely issued the letter dated 25.02.2007 (D

37) stating that the conduct of the account was satisfactory and the account was classified as standard asset at the Branch knowing fully well that this statement was false and issuing of this letter facilitated taking over NPA account of A3 by Union Bank of India, Sadar Bazar Branch, Delhi.

200. The culpability of A6 is palpable and his malafide intention behind unauthorisedly giving the letter dated 25.02.2007 to Union Bank of India becomes obvious since A6 was very well aware that the account of A3 was already classified as NPA account and hence the staff accountability was likely to be fixed against him and therefore to avoid the same, A6 under a criminal conspiracy with A3 and A5 issued the letter dated 25.02.2007 which facilitated the taking over of the NPA account of A3 by Union CC No. 42/12 (25/16) 06.07.2018 246 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Bank of India.

201. It is thus proved that A6 forged the letter dated 25.02.2007 and misrepresented that he was the Branch Manager of Hauz Qazi Branch and further falsely stated that the account of A3 was an standard asset whereas he was fully aware that the account had already been classified as NPA. This forged letter dated 25.02.2007 issued by A6 was used as a genuine document by A3 in connivance with A5 to facilitate the taking over of the loan from State Bank of India and sanction of enhanced limits from Union Bank of India. He committed the act of criminal misconduct by misusing his official position as such public servant.

(T). Role of Mahesh Chand Aggarwal (A5)

202. Facts and circumstances of the case show that the various credit facilities extended by Union Bank of India to A3 were recommended by A5 during his tenure as Chief Manager of Union Bank of India, Sadar Bazar Branch, New Delhi.

203. After appreciating the entire evidence on record, the following acts of omission and commission with malafide intention on the part of A5 are proved:

(i) A3 while approaching the Union Bank of India, Sadar Bazar Branch for taking over the existing liabilities from State Bank of India and requesting for enhancement of various limits vide its letter dated 11.12.2006 (D5) Ex. PW/64/C1&2 had stated that State Bank of India is not in a CC No. 42/12 (25/16) 06.07.2018 247 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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position to grant them any enhancement till completion of one year. A5 while recommending the proposal of A3 to the Zonal Office vide proposal dated 15.01.2007 Ex. PW63/J (D32) also stated the same reasons. Whereas A5 vide his letter dated 09.02.2007 to Regional Office, Union Bank of India (Page no. 394 of D117) Ex. PW39/E further stated that A3 is unable to get enhanced limits sanctioned from State Bank of India as the Manager at State Bank of India is only of ScaleIII and there is no loan officer in the bank to process the loan and moreover the attitude of the Branch Manager is lackadaisical. Thus, in the changed scenario, it was incumbent upon A5 to know from State Bank of India about the actual position which was not done before sending the letter dated 09.02.2007 to the Regional Office. This proves that from the very inception of recommending the credit proposal of A3 to the higher authorities, A5 misrepresented the facts to his superiors with a malafide intention.

(ii) A3 while approaching the Union Bank of India, Sadar Bazar Branch for taking over the existing liabilities from State Bank of India and requesting for enhancement of various credit limits had vide their letter dated 11.12.2006 (D5) Ex. PW/64/C1&2 specifically stated that the Company (A3) was expecting a spurt in their turnover mainly on the ground that A3 was planning to market Bens wet napkin dispenser machines by importing the same and installing it at various CC No. 42/12 (25/16) 06.07.2018 248 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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outlets. The enhanced CC Limit and the LC limit of Rs. 5.0 crore were sanctioned to A3 on this premise. Whereas it is an undisputed fact that A3 did not import any machine during its entire period of account operating at the Sadar Bazar Branch. A5 being the Chief Manager of the Sadar Bazar Branch at the relevant period who himself had recommended the loan of A3 ought to have made enquiries from A3 about the fate of importing the wet napkin dispenser machines and further he should have been alarmed by the sudden surge in the stocks/turnover of A3 even in the absence of import of the machines as was projected by A3 at the time of submitting the application for availing and taking over of the credit facilities. Moreover A5 vide his letter dated 09.02.2007 to Regional Office, Union Bank of India (Page no. 394 of D117) Ex. PW39/E had described in great detail about the reason of A3 being unable to import the wet napkin dispenser machine due to funds shortage of Rs. 33 lacs calculated @ Rs. 11,000/ per machine for 300 machines. This intentional act on the part of A5 proves that from the very inception he was well aware that A3 shall not be importing any machine as requested and the same was done to mislead the Zonal Office to sanction the loan to A3.

(iii) A5 being the recommending authority for the takeover of the liabilities of A3 from State Bank of India and for recommending the sanction of enhanced CC limit of Rs. 4.0 crores and LC Limit of Rs. 1.0 crore vide letter dated CC No. 42/12 (25/16) 06.07.2018 249 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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09.02.2007 Ex. PW39/E (page No. 394 of D117) was duty bound to obtain the statements of all the loan accounts of A3 from State Bank of India for the last one year. As against this, A5 selectively obtained only the CC statement of A3 from State Bank of India upto November, 2006 and no statement was obtained for the Book Debts & LC Limit of A3 as was subsisting with State Bank of India at that time. Moreover A5 falsely stated that A3 has not ever availed non fund based limit of Rs. 50 lacs, which statement he knew to be false. Thus, the involvement of A5 in the criminal conspiracy to cheat Union Bank of India along with other accused persons is proved.

(iv) On 11.12.2006, A3 wrote a letter to A5 requesting for enhanced credit facilities and to take over of the loan from State Bank of India. On 15.01.2007, A5 without ascertaining the position of the account of A3 from State Bank of India recommended the proposal of A3 to the Regional Office vide Ex. PW 63/J. It was only on 25.01.2007 i.e after 1 ½ months of request of A3, A5 wrote a letter to State Bank of India, Hauz Qazi branch, Delhi enquiring about the conduct of the account of A3. It is pertinent to state that A5 without waiting for any reply from State Bank of India about the conduct of the conduct of A3 replied to certain clarifications sought by the Regional Office on 09.02.2007 vide letter Ex. PW 39/E. Therefore, it is clear as crystal that A5, under a criminal conspiracy, before forwarding the credit proposal of CC No. 42/12 (25/16) 06.07.2018 250 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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A3 to the Regional Office on 15.01.2007 had decided to recommend the loan to A3 and had acted accordingly by submitting false and manipulated information to the Regional Office without ascertaining the conduct of the account from State Bank of India, which conduct was highly unsatisfactory and he was very well aware that the account was being continuously overdrawn.

(v) As per rules of the Union Bank of India which were in vogue at the relevant period, the equitable mortgage of all corporate accounts was to be done at the Equitable Mortgage Cell at the Industrial Finance Branch of Union Bank of India (Page No. 1 of D41) Ex. PW45/A, which was evidently not done and the equitable mortgage was created in Sadar Bazar Branch itself.

(vi) A5 failed to exercise due diligence and took the letter of State Bank of India dated 25.02.2007, Ex. PW2/5 (D37) at its face value and did not verify the authenticity of the same. It is pertinent to state that the letter itself is very cryptic and is bereft of the essential details of the various loan accounts of A3, e.g., the bifurcation of various credit limits and the present outstanding balance was not given, the position of over dues and the reason thereof was also not given and moreover since the letter was issued on a Sunday, which fact should have raised suspicion in the mind of A5, being a seasoned Banker. This proves that A1, A2, A5 and A6 were CC No. 42/12 (25/16) 06.07.2018 251 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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acting in concert and all of them actively contributed in the criminal conspiracy to defraud and cheat Union Bank of India.

(vii) A5 while recommending the takeover of the loans from State Bank of India falsely stated that the A3 had not availed the LC Limit from State Bank of India. Whereas it is an admitted fact that a sum of Rs. 7,99,993/ was outstanding with State Bank of India in the LC Limit of A3 as on 31.12.2006 (Mark XXI in D31 to 115) and the same amount was adjusted by State Bank of India out of the proceeds received from Union Bank of India on 30.03.2007 when the liabilities of A3 were taken over by Union Bank of India.

(viii) A5 vide his letter dated 09.02.2007 to Regional Office, Union Bank of India (Page no. 394 of D117) Ex. PW39/E had stated that A3 has informed him that State Bank of India w.e.f 03.04.2006, at their request, has converted nonfund based limit of Rs. 50.0 lacs into working capital and consequently State Bank of India has increased their CC Limit to Rs. 150.0 lacs. In support of this A3 had annexed a copy of their letter dated 03.04.2006 written to State Bank of India making such request and on the same letter someone has written 'Approved' and affixed rubber stamp of State Bank of India(page No. 378 of D117). It is an admitted fact that A5, while recommending the take over and enhancement of various limits of A3, has recommended the CC No. 42/12 (25/16) 06.07.2018 252 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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credit proposal of A3 Ex. PW63/J (D32) in which he had interalia in reply to one query "Exposure details from Banking system" at 25 (a) (page no. 152) stated "State Bank of India Fund Based = Rs. 150.0 lacs; Non Fund Based = Rs. 50.0 lacs. Both the statements are contradictory and definitely prove the complicity of A5 in misrepresenting the facts. It is pertinent to state that A5 being an experienced executive of the Bank being of the rank of Chief Manager was very well aware that since the limit of A3 in State Bank of India was sanctioned by the Zonal Credit Committee and therefore the Branch was not empowered to merge the limits. Moreover merging of nonfund based limit to fund based limit entails reassessing the credit risk which exercise was not undertaken by State Bank of India and by no stretch of imagination the same could have been done on the same day itself and that too by casually writing 'Approved' on the request letter of A3. This proves beyond any doubt that A5 in concert with other accused persons cheated Union Bank of India.

(ix) A5 sought opinion of State Bank of India regarding the conduct of the account of A3 with State Bank of India. A6 vide letter dated 25.02.2007 Ex. PW2/S (D37) stated that "Fund Based/Non fund based working capital limit of Rs. 2.0 crores............." thereby falsifies the contention of A3, which was intentionally believed by A5, that the LC Limit (non fund based) of Rs. 50.0 lacs had been merged with the CC No. 42/12 (25/16) 06.07.2018 253 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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Fund Based Limit by State Bank of India. If the nonfund based limit was merged, State Bank of India would not have used words "Fund based/Nonfund based".

(x) A5, while recommending the taking over and enhancement of various limits of A3, while recommending the credit proposal of A3 Ex. PW63/J (D32) had inter alia in the proposal while answering to one query "Comments on operations/overdues" at 18 (b) (page no. 155) falsely stated "Account operated satisfactorily at State Bank of India. Excesses allowed for genuine business needs adjusted by the Company from time to time." Whereas the statement of CC account of A3 with State Bank of India tells another story that the overdrawals were given continuously. This false statement by A5 was made to justify the frequent overdrawals at State Bank of India, which false statement facilitated in sanction of enhanced limits by Union Bank of India.

(xi) A5 at the time of takeover of the loans from State Bank of India, paid a sum of Rs. 2.25 Crores to State Bank of India to clear all the outstanding liabilities of A3. This itself proves that A5 was very well aware about the fact that all the limits sanctioned to A3 were overdrawn.

(xii) Within 34 months of the release of the CC Limit of Rs. 4 crores by the Union Bank of India, A3 had exhausted the entire limit by diverting funds to its own/associate firms by CC No. 42/12 (25/16) 06.07.2018 254 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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indulging in kite flying operations by transferring money to fictitious accounts, whereas one of the conditions of the sanction of the enhanced limits by Union Bank of India, was that the Branch shall ensure end use of the funds which was not done by A5 who was Incharge of the branch during the relevant period.

(xiii) A3, in order to escape from the various controlling measures of supervisory authorities, at the behest of A5, was indulging in Kite Flying operations in its CC account by depositing high value cheques on the last day/last but one day of the month so that he is able to escape from the reporting/monitoring process of the Union Bank of India and later on all these high value cheques used to be returned unpaid. This has been observed by the DGM, Union Bank of India while fixing staff accountability in respect of the liabilities of A3, Ex. PW49/8 (Page No. 70 of D118).

                        Following are the details of such cheques:

             Deposited on           Returned on                        Amount(Rs.)     Cheque no.            Reason
             31.05.07                   01.06.07                      6,14,448         264779                I.Funds
             30.06.07                   02.07.07                      19,45,675        691364                Do
             Do                         Do                            19,75,480         789024               Do
             31.07.07                   01.08.07                      19,50,000         32860                *
             Do                         Do                            17,45,000        664303               *
             Do                         Do                            18,95,775        691356                *
             Do                         Do                            19,45,000        633815                *
             01.09.07                   01.09.07                      17,45,000        664303               I.Funds*
             Do                         Do                            19,45,000        633815                Do  *
             Do                         Do                            19,50,000        32860                 Do *
             Do                         Do                            18,95,775        691356                Do *
             Do                         Do                            24,92,750        32859                 Do
             28.09.07                   01.10.07                      23,47,875        664307                Do
             Do                         Do                            38,98,995        615826                Do*



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             Do                                Do                     26,21,750               633824                  Do*
             Do                                Do                     10,00,000               664305                  Do
             30.11.07                          01.12.07               42,95,880               18604                   Do *
             Do                                Do                     26,21,750               633824                  Do*
             Do                                Do                     34,82,370               615830                  Do
             31.12.07                          01.01.08               42,95,880               18604                   Do
             Do                                Do                     38,98,995               615826                  Do*
             Do                                Do                     29,25,790               664312                  Do

(* These cheques were presented more than once) In view of such large manipulations spanning over 7 months, complicity of A5 along with that of A1 to evade reporting under a well thought of conspiracy is proved beyond doubt.

(xiv) In the instant case, large number of cheques deposited by A3 in his CC account were returned unpaid thereby indicating that these were accommodation cheques and not genuine trade cheques. Inspite of unsatisfactory operation in the CC account of A3, A5 permitted heavy overdrawals upto Rs. 121.0 lacs beyond the sanctioned limit in the CC account of A3, thereby fortifying the conspiracy between all the accused persons.

(xv) The letter of Deputy General Manager dated 15.04.2008 Ex.PW49/A (D118 page 260261 page 9) finds mentioned that the accused A5 had admitted that he had started reporting the overdrawals in CC account of A3 from Nov. 2007 onwards in the EAS/SMA statements of the Union Bank of India whereas the overdrawals had been permitted from May, 2007 onwards.

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204. Ld. counsel for A5 vehemently argued that these shortcomings/deficiencies can at the most be regarded as procedural lapses and no criminal liability can be fastened on A5 on account of these. He has further argued that it was A5 who alerted the higher authorities regarding the critical condition of CC account of A3 and was instrumental in getting an alternative property of A3 mortgaged.

205. I have bestowed my thoughtful consideration to the submissions of the Ld. counsel of A5 vis the submissions of the Ld. PP of CBI and have also considered the entire facts and circumstances of the case.

206. I am of the view that the various gross irregularities committed by A5 while discharging his duties as a public servant cannot be brushed aside by labelling them as merely procedural irregularities. The criminal intent of A5 all throughout, i.e., from taking over the account from State Bank of India to supervising the conduct of the CC account is writ large in view of the irrefutable evidence on the record. A5 being a public servant and custodian of public funds was duty bound to protect the interest of the Bank which he not only omitted to do but rather in connivance with other accused persons had been able to defraud the Union Bank of India. It is not the law that suffering of loss is a sinequa non for recording a judgment for conviction. A Bank or financial institution may not suffer ultimate loss but if the money had been allowed to be used by another person for illegal purposes, it would CC No. 42/12 (25/16) 06.07.2018 257 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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amount to criminal misconduct. The ultimate objective is to use public money in a carefully planned manner. Every benefit obtained by a public servant for himself or for any other person by abusing his position as a public servant falls within the mischief of section 13(1)(d) of the P.C. Act. In the case of CBI vs. Jagjit Singh, Criminal Appeal no. 1580 of 2013 decided on 01.10.2013, it was held that the offence when committed in relation with banking activities including offences u/s 420/471 IPC have harmful effect on the public and threaten the well being of the society. These offences fall under the category of offence involving moral turpitude by public servant while working in that capacity. One may say that the bank is the victim in such cases but in fact the society in general including customers of the bank is the sufferer. In the case of M. Narayanan Nambiar Vs. State of Kerala, AIR 1963 SC 116, it was held that this Act was brought in to purify the public administration. In the case of Runu Ghosh vs. CBI, Crl. A. 482/2002. Vide judgment dated 21.12.2011, it was held : "...It would be sufficient if the prosecution proves that the public servant "obtains" by his act, pecuniary advantage or valuable thing, to another, without public interest. The inclusion of public interest, in the opinion of the Court, tips the scale in favour of a construction which does not require proof of mens rea...

(Para 74) Having now settled the true interpretation of whether the offence U/Sec. 13(1)(d)(iii) requires proof of mens rea, it would now be vital to settle what CC No. 42/12 (25/16) 06.07.2018 258 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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really the prosecution would have to establish to say that the public servants actions or decisions, which results in a third party obtaining a pecuniary advantage or valuable thing, without public interest...

(Para 81)...a decision is said to be without public interest, (if the other requirements of the provision, i.e. Section 13(1)(d)(iii) are fulfilled) if that action of the public servant is the consequence of his or her manifest failure to observe those reasonable safeguards against detriment to the public interest, which having regard to all circumstances, it was his or her duty to have adopted".

It was also held that the public servant acts without public interest, if his action or decision is by manifestly failing to exercise reasonable precautions to guard against injury to public interest, which he was bound at all times to do resulting in injury to public interest.

207. Considering the totality of the circumstances and the entire evidence on record, it is clear that A5 being party to criminal conspiracy with the coaccused persons committed the act of criminal misconduct. He abused his position as a public servant and acted without public interest and caused pecuniary advantage to A1 and others.

208. As regards, release of Rs. 2.25 crores as against Rs. 2.0 crores, I somehow agree that before taking over the account, the liability was to be cleared but it was equally important for A5 to know how Rs. 2.25 crore became due as against Rs. 2.00 crores though as per the letter dated 25.02.2007 Ex.PW2/S issued by A6, the CC No. 42/12 (25/16) 06.07.2018 259 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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conduct of the account was satisfactory and the account was classified as standard asset. How this account could be satisfactory and standard asset when the bank had to pay Rs. 2.25 crore as against the Rs. 2.0 crores which was the total loan sanctioned to A3.

209. As regards seeking legal opinion on the original documents of the property is concerned, I agree with the submissions of the accused M C Aggarwal that since the original documents of the property were with State Bank of India and it was a case of take over account and same property was offered as collateral security and the CC limit given by State Bank of India was not cleared, the party was not in a position to submit original documents of the property for legal opinion. In the instant case, immediately after the sanction of loan and release of CC limit, the original documents of the property lying with State Bank of India were collected from State Bank of India and kept in Union Bank of India. For the said reasons, I do not find any illegality/irregularity on the part of the accused M C Aggarwal to call for the original documents of the property before releasing the CC limit or seeking the legal opinion from the panel advocate.

210. A5 in his defence has stated that GRID of officers including the risk management officers had also scrutinized the Statement of Accounts of M/s Duro Marketing Pvt Ltd with State Bank of India upto 30.11.2006. They did not find any deficiency or adversity in the said proposal and recommended for approval. The matter was CC No. 42/12 (25/16) 06.07.2018 260 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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placed before the Regional Office and thereafter the concurrence was given by the Regional Manager. It was never pointed out by the above team or the sanctioning authority or the person or the officials of the Union Bank of India who forwarded the proposal that the account of M/s Duro Marketing Pvt Ltd with State Bank of India was irregular and there always remained overwithdrawals in the account of the company.

211. I am of the view that this submission is sans merit. A5 being the recommending authority was duty bound to make extensive enquiries about the health/conduct of the account from the Bank i.e. State Bank of India. A5 not only failed to do so but was also instrumental in misleading his superiors about the reason for non enhancement of the credit facilities extended to A3 by the State Bank of India. A5 ought to have satisfied himself as a prudent lender before exposing the Union Bank of India to a credit risk of Rs. 5.0 crores. He not only miserably failed to do so but rather was in a hurry to oblige A3 and get the credit facilities sanctioned for them. Though the superiors of A5 did not make certain inquiries about A3 but in the absence of any direct evidence, they cannot be held to be culpable.

212. I am also not convinced with the explanation offered by A5 M C Aggarwal that despite his and his officials visits and correspondence, State Bank of India never told them that the account of M/s DMPL (A3) had become substandard. They always avoided to give clear position of the account.

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213. It is pertinent to state that State Bank of India and Union Bank of India both being public sector banks were required to lend with caution and A5 being the Chief Manager of the branch being the custodian of the public money was required to follow due diligence before recommending the taking over and enhancement of various credit facilities proposed to be extended to A3. A5 ought to have been on guard why State Bank of India being another public sector bank would allow a good credit account to be taken over by Union Bank of India. The onus was on A5 to satisfy himself fully before recommending the take over and enhancement of credit facilities to A3. However, it is proved from the facts and circumstances of the case and the evidence available on record that A5 was in a hurry and was predetermined to take over the account of A3 from State Bank of India and accordingly he not only took over the liabilities of A3 from State Bank of India but also recommended enhanced limits.

214. I am also not convinced with the defence of A5 that when he could not get any response from State Bank of India, he sent PW63 to inquire this fact. According to his own admission, it was done only on 30.03.2007 i.e the day A5 had released the loan and issued the Pay Orders in favour of State Bank of India. If A5 was really serious about getting proper information from State Bank of India about A3, he in the absence of response from the Hauz Qazi branch of SBI could have written to the Zonal Office/Controlling Office of State Bank of India which was never done.

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215. Therefore, the defence offered by A5 is not plausible and his overall conduct definitely proves beyond doubt that all his acts were preplanned and the entire exercise undertaken by him was a sham in concert with the other accused persons.

Conclusion

216. On a careful consideration of evidence adduced by the prosecution and my aforesaid discussions, I am of the considered opinion that the prosecution has proved that Mukesh Jain (A1) was the distributor/trader of foam products since 1989. He was the proprietor of M/s JainCo. Anil Dhall (A2) used to advise A1 in his business. They formed a company, namely, M/s Duro Marketing Pvt. Ltd. (A3) on 06.01.2006 and became the promoter directors. A3 took over the assets and liabilities of M/s JainCo. A1 and A2 then hatched a criminal conspiracy to avail credit facilities from the Bank by fraudulent means. A3 through A1 and A2 approached State Bank of India, Hauz Qazi Branch for sanction of limits of Rs. 2.0 crores. A1 and A2 in furtherance of criminal conspiracy inducted Vinod Khanna A4 (deceased) known to A1, as the third director in A3 impersonating as R.G. Mundkur. They got prepared a false/forged sublease deed of the property bearing no. A52, Vasant Marg, Vasant Vihar, New Delhi which was in the name of R.G. Mundkur. They got prepared false/forged PAN card and Election I Card in the name of R.G. Mundkur bearing the photograph of Vinod Khanna (A4). A1 CC No. 42/12 (25/16) 06.07.2018 263 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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introduced A4 as R.G. Mundkur as his distant relative. They also got prepared false/forged noobjection certificates purportedly issued by DDA qua the permission to mortgage the property which were never issued by DDA. One more forged sublease deed of the property bearing no. A52, Vasant Vihar, New Delhi was recovered from the house of A2. A4 signed all the documents in the bank as R.G. Mundkur when the credit facilities were availed from the bank. They mortgaged the above property as a collateral security for availing the CC limits of Rs. 100.0 lacs, Book Debt limit of Rs. 50.0 lacs and LC limit of Rs. 50.0 lacs from State Bank of India. A1 and A2 also connived with Ishwar Singh Mehra A6, Branch Manager, who permitted excess withdrawals from the CC account exceeding his delegated power without ensuring the end use of the funds. Very soon the account of A3 started running overdrawn. A3 did not regularize the account. After the first week of October, 2006, there were no credits in the account of A3. The account of A3 with State Bank of India became NPA. The funds were siphoned off by A3 through A1.

217. It has further been proved on the basis of my appreciation of evidence that has come on record that A1 being one of the directors of A3 along with A2 then approached Union Bank of India vide letter dated 11.12.2006 to sanction cash credit limit of Rs. 4.0 crore and letter of credit limit of Rs. 1.0 crore by enhancing and taking over their accounts maintained with State Bank of India, Hauz Qazi Branch and offered the property situated CC No. 42/12 (25/16) 06.07.2018 264 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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at A52, Vasant Marg, Vasant Vihar, New Delhi, in the name of R.G. Mundkur, shown as director of the company, as collateral security without disclosing that the account was classified as NPA by State Bank of India. They instead falsely stated that the account was being transferred to Union Bank of India as State Bank of India was not ready to enhance the credit facilities required for the business activities of A3. Mahesh Chand Aggarwal A5 who was posted as Branch Manager, Union Bank of India processed the request of Mukesh Jain A1 and vide proposal note dated 15.01.2007, he recommended for the take over of the account of A3 and sanction of credit facilities to it i.e. CC limit of Rs. 4.0 crores and LC limit of Rs. 1.0 crore stating that the account of the company with State Bank of India, Hauz Quazi Branch was satisfactory, without verifying the genuineness and antecedents of the account of the company from State Bank of India, Hauz Qazi Branch. He recommended the loan knowing fully well that only the accounts which are classified as standard assets were eligible for take over and the account of A3 was not eligible for take over. This was done by him fraudulently and dishonestly abusing his position as such public servant. He also misinformed and misrepresented the Regional Office by giving manipulated reasons for taking over the account, stating that there was no loan officer in State Bank of India to prepare the proposal and forward the same to their higher authority. A5 also wrote a letter dated 25.01.2007 to State Bank of India, Hauz Qazi Branch, Delhi seeking opinion about the conduct of account of A3 and in CC No. 42/12 (25/16) 06.07.2018 265 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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response to that, Ishwar Singh Mehra A6 in pursuant to the criminal conspiracy with the accused persons, by posing himself as Branch Manager, State Bank of India, Hauz Qazi Branch issued a letter dated 25.02.2007 wherein he wrote that the company was enjoying fund based / non fund based working capital limit of Rs. 2.0 crores and the conduct of account was satisfactory and it was classified as standard asset, knowing fully well that on that day he was not working as Branch Manager at State Bank of India, Hauz Qazi Branch and was in fact, working at Model Town Branch, Delhi since October, 2006. This false/forged letter dated 25.02.2007 facilitated taking over NPA account of A3 by Union Bank of India, Sadar Bazar Branch which sanctioned to A3, the enhanced credit facilities. The said letter was a forged letter which was used for the purposes of cheating in facilitating for taking over the account which A6 issued by misusing his official position as a public servant by corrupt or illegal means or by otherwise abusing his position to obtain pecuniary advantage for A3 and other accused persons. The letter dated 25.02.2007 written by A6 was not the part of the record of State Bank of India, Hauz Qazi Branch. A1 intentionally submitted the incomplete statement of only CC account of A3 for the period upto 30.11.2006 at the time of submitting request for sanction of limits. He also submitted a false letter dated 03.04.2006 purportedly issued by State Bank of India that nonfund based limit of Rs. 50.0 lacs had been merged with CC limit which was in fact never sanctioned by the Bank. A5 fully knowing that the CC No. 42/12 (25/16) 06.07.2018 266 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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account of A3 was not running smoothly with State Bank of India, did not verify from the bank and recommended for taking over and enhancement of CC limit and other limits. He did not verify the authenticity of the letter dated 25.02.2007. Cash credit limit of Rs. 4.0 crores and letter of credit of Rs. 1.0 crore were sanctioned to A3 by the Regional Office of Union Bank of India which were accepted by A1, A2 and R.G. Mundkur as impersonated by Vinod Khanna (A4), directors of A3. A current account was opened in Union Bank of India, Sadar Bazar Branch and various documents were executed and during that period, Vinod Khanna A4 impersonating as R.G. Mundkur, owner of A 52, Vasant Vihar, New Delhi, along with A1 and A2 executed all the documents in favour of Union Bank of India including creation of equitable mortgage of the above property as collateral security. A4 also wrote a letter to State Bank of India, Hauz Qazi Branch for return of documents in respect of above property posing as R.G. Mundkur. A5 did not take the statements of all the accounts of A3 for complete one year from State Bank of India as stipulated in the sanction letter before releasing the said limits. A 5 allowed excess payment of Rs. 25.0 lacs to State Bank of India at the time of take over of the liabilities of A3 knowing fully well that A3 had been sanctioned total credit limits consisting of fund based/non fund based to the tune of Rs. 2.0 crores. A5 allowed overdrawing of account of A3 on several occasions by exceeding his delegated power and also failed to ensure the end use of the funds. A5 allowed inter firms transfers of funds in violation of CC No. 42/12 (25/16) 06.07.2018 267 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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terms of sanction. A5 also allowed passing of cheques and making of demand drafts favouring M/s JainCo knowing fully well that M/s JainCo had ceased to exist after the incorporation of A3. A5 also allowed unauthorized credits in the account of A3 against the uncleared cheques deposited by A3 at the end of the month which were subsequently returned unpaid at the start of the following month. A1 did not close the operation of the account from M/s JainCo and also made a fictitious firm in the name of M/s Supreme Traders. A1 for himself and for A3 did not utilize the funds and CC limits for genuine trade transactions and diverted/siphoned off the funds as discussed in the preceding paras through dummy accounts and sham business transactions and for this, A1 utilized the account of M/s JainCo, his proprietory concern which was taken over by A3 and of M/s Supreme Traders and the accounts of M/s Kwality Enterprises and M/s Mohan Dass and Co. of V.S. Pillai A7, M/s Shiv Shakti Udyog and M/s Sharma Enterprises of Ashok Bharti A8 and M/s Kwality Enterprises of A9 (deceased) for diverting the proceeds of credit facility without any genuine transactions. These accounts were opened just to facilitate the diversion of funds and not for any business purposes, though M/s JainCo, M/s Supreme Traders, M/s Sharma Enterprises, M/s Kwality Enterprises and M/s Shiv Shakti Udyog were existing on papers only without doing any bonafide business. For doing the favour, A7, A8 and A9 (deceased) received the commission/consideration which they transferred in the account of their firms. All this was done in CC No. 42/12 (25/16) 06.07.2018 268 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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pursuance of the criminal conspiracy for the purposes of cheating which was facilitated by various acts of misconduct committed by the accused persons Mahesh Chand Aggarwal A5 and Ishwar Singh Mehra A6, being the public servants who abused their official position with a view to obtain pecuniary gain for Mukesh Jain (A1) and others. Due to this, Union Bank of India suffered wrongful loss of Rs. 4,46,89,558.22.

218. A5 and A6 being the Branch Manager of Union Bank of India and State Bank of India respectively were the custodian of the public money. As Senior Officers of the Banks, they were entrusted with the responsibility of managing the affairs of their respective branches. They were required to supervise the entire functioning of their branches diligently and with prudence and utmost honesty. On the contrary, A5 and A6, in criminal conspiracy with other accused persons abused their positions as public servants and obtained pecuniary advantage for A1, A2 and A3 and other accused persons without any public interest by indulging in the various acts of criminal misconduct.

219. Though A7, A8 and A9 (deceased) did not play any active role in approaching the banks for getting the credit facilities sanctioned for A3 but nevertheless these accused persons in connivance with A1 facilitated illegal diversion and siphoning off funds by A1 by representing as the proprietors / owners of various firms which were existing only on papers. A7, A8 and A9 (deceased) were also responsible for making forged bills/invoices which were used by the other accused persons as CC No. 42/12 (25/16) 06.07.2018 269 of 272 RC No.BD1/2008/E/0005/CBI/BS&FC/New Delhi CBI vs. Mukesh Jain & Ors.

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genuine.

220. Oral and documentary evidence brought on record by the prosecution show that there was a deep rooted criminal conspiracy amongst all the accused persons to defraud the bank for the wrongful gain. Although with the effort of A5, the bank could realize the loan amount through DRT by auction of the property located at Safdarjung Development Area which belonged to the mother of A1 which A1 had mortgaged in lieu of the property at Vasant Vihar, New Delhi, since the documents of the Vasant Vihar property were found false and fabricated but the offence of cheating and forgery cannot be compounded merely because the amount has been realized by the bank.

221. Upon consideration of all the facts & circumstances of the case enumerated hereinabove, this Court is of the considered opinion that the prosecution has proved its case to the hilt against the accused persons Mukesh Jain (A1), Anil Dhall (A2), M/s Duro Marketing Pvt. Ltd (A3), Mahesh Chand Aggarwal (A5), Ishwar Singh Mehra (A6), V.S. Pillai (A7) and Ashok Bharti (A8).

i. Mukesh Jain (A1) is accordingly held guilty for his having committed the offence punishable u/s 120B r/w 419/420/468/471/474 IPC r/w section 13(2) r/w section 13(1)(d) of the PC Act, 1988 and substantive offences punishable u/s 420 and 471 r/w section 120B IPC.

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ii. Accused Anil Dhall (A2) is held guilty for his having committed the offence punishable u/s 120B r/w 419/420/468/471/474 IPC r/w section 13(2) r/w section 13(1)(d) of the PC Act, 1988 and substantive offences punishable u/s 420 and 471 r/w section 120B IPC.

iii. M/s Duro Marketing Pvt. Ltd. (A3) through Mukesh Jain (A1) is held guilty for its having committed the offence punishable u/s 420 IPC.

iv. Mahesh Chand Aggarwal (A5) is held guilty for the offence punishable u/s 120B r/w section 420/471 IPC r/w section 13(2) r/w section 13(1)(d) of the PC Act, 1988 and substantive offence punishable u/s 13(2) r/w section 13(1)

(d) of the PC Act, 1988.

v. Ishwar Singh Mehra (A6) is held guilty for the offence punishable u/s 120B r/w section 420/468/471 IPC r/w section 13(2) r/w section 13(1)(d) of the PC Act, 1988 and substantive offences punishable u/s 420 and 468 IPC and section 13(2) r/w section 13(1)(d) of the PC Act, 1988.

vi. V.S. Pillai (A7) and Ashok Bharti (A8) are held guilty for the offence punishable u/s 120B r/w section 420/468/471IPC.

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222. The offence punishable u/s 120B r/w section 419/468/474 IPC is not proved against the accused Mahesh Chand Aggarwal (A5). The offence punishable u/s 120B r/w section 419/474 IPC is not proved against the accused Ishwar Singh Mehra (A6). The offence punishable u/s 120B r/w section 419/474 IPC r/w 13(2) r/w 13(1)(d) of the PC Act, 1988 is not proved against the accused persons V.S. Pillai (A7) and Ashok Bharti (A8) as they were not party to the criminal conspiracy to impersonation and criminal misconduct by the accused persons.

223. The accused persons namely Mukesh Jain (A1), Anil Dhall (A2), M/s Duro Marketing Pvt. Ltd (A3), Mahesh Chand Aggarwal (A5), Ishwar Singh Mehra (A6), V.S. Pillai (A7) and Ashok Bharti (A8) are accordingly convicted of the above offences.

Announced in the Open Court.

06.07.2018


                             Digitally                         (Sanjiv Jain)
                             signed by                 Special Judge (PC Act)
                             SANJIV              (CBI3), South, Saket Court  
    SANJIV                   JAIN
                                                          New Delhi 06.07.2018
    JAIN                     Date:
                             2018.07.07
                             17:04:00
                             +0530




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Rc No.Bd1/2008/E/0005/Cbi/Bs&Fc/New ... vs Mukesh Jain & Ors on 6 July, 2018