Delhi District Court
State Through Central Bureau Of ... vs . on 10 February, 2016
Unique ID No. 02401R019082001
IN THE COURT OF SPECIAL JUDGE, CBI (P C Act)-06,
CENTRAL DISTRICT, TIS HAZARI, DELHI.
Unique ID No. 02401R019082001
CC No.: 40/12
RC No.40(A)/1997/CBI/ACB/ND
State through Central Bureau of Investigation.
Vs.
1. Sh. Surender Singh Wadhwa (Proclaimed Offender)
S/o Late Sh. Jodh Singh,
R/o F-122, Saidulajab, MB Road, New Delhi ....Accused No.1
2. Sh. Ghan Shyam Dass Buttan
S/o Sh. Fateh Chand Buttan
R/o M-55, Chitranjan Park, New Delhi ....Accused No.2
3. Sh. Anil Aggarwal (Proclaimed Offender)
S/o Late Amar Nath
R/o 66, Banarasi Dass Estate,
Timarpur, New Delhi ....Accused No.3
4. Sh. Vijay Gupta
S/o Late Sh. Amar Nath,
R/o 66, Banarasi Dass Estate,
Timarpur, New Delhi ....Accused No.4
5. M/s Iyer & Sons (P) Ltd.
20-F, Connaught Place,
New Delhi. ....Accused No.5
6. M/s Anil Steels (P) Ltd.
66, Banarasi Dass Estate,
Timarpur, New Delhi ....Accused No.6
7. M/s Haryana Gears,
66, Banarasi Dass Estate,
Timarpur, New Delhi ....Accused No.7
Date of Institution : 4th April, 2000
Arguments concluded : 5th February, 2016
Judgment Delivered : 10th February, 2016
JUDGMENT
1. Guilty mind of the director of a company will render the company guilty. In the present case, Chief Manager (A-1) of a public sector bank, entered into a conspiracy with director (A-3) of companies (A-5) & (A-6) to cheat the bank. He committed CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 1 out of 58 Unique ID No. 02401R019082001 criminal misconduct by abusing his position in obtaining pecuniary advantage for accused companies.
Facts
2. On 30th May, 1997 Sh.S.S. Mehra, Chief Vigilance Officer, Oriental Bank of Commerce, New Delhi, lodged FIR with the Superintendent of Police, CBI Anti Corruption Branch, New Delhi. On conclusion of investigation, accused persons (A-1 to A7) were charge-sheeted by CBI and sent up for trial for commission of offence punishable u/s 120B IPC r/w Section 420, 467, 468, 471, 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988 (hereinafter referred to as 'POC Act'). Sh. S.S. Wadhwa (A1) was Chief Manager, Saket Branch of Oriental Bank of Commerce (OBC), Delhi. Ghanshyam Dass Buttan (A2) was Manager, State Bank of India (SBI) at Bathain Kalan Branch, Mathura (UP). Anil Aggarwal (A3) and Vijay Gupta (A-4) were Directors of M/s Iyer and Sons (P) Ltd (A-5) and M/s Anil Steels Pvt. Ltd. (A-6). Anil Aggarwal (A-3) and Shashi Gupta were partner of the firm M/s Haryana Gears (A-7).
3. In brief, allegations are that accused persons committed conspiracy to cheat the bank. During the period 1994 to 1996 in furtherance of criminal conspiracy accused S.S. Wadhwa (A-1) while working as Branch Incharge, OBC, Saket, New Delhi with the intention of providing wrongful gain to M/s Iyer & Sons (P) Ltd. and to the detriment of bank interest allegedly allowed cash credit and unauthorized purchase of cheques in transgression of discretionary powers vested in him and without following the prescribed procedure. Due to series of unauthorized acts of accused S.S. Wadhwa (A-1), a sum of Rs.104.46 lacs was allegedly struck up in various accounts belonging to M/s Iyer & Sons (P) Ltd.(A-5), M/s Anil Steels (P) Ltd.
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(A-6), M/s Haryana Gears (A-7) and M/s Ram Kumar and Brothers and M/s A. Kumar and Co.
4. Case projected by the prosecution in the charge-sheet is that on 07.12.1992 accused S.S. Wadhwa (A-1) Chief Manager, OBC, Saket Branch, New Delhi, allowed opening of Current Account No.1436 in the name of M/s. Iyer & Sons (P) Ltd. (A-5), having business of air tickets. Accused Anil Aggarwal (A-3) and Vijay Gupta (A-4) Directors were authorized signatories in the account of the firm. Overdraft limit was fixed in the said account by accused S.S. Wadhwa (A-1) against deposit of the firm but proper documentation was not done by him and overdraft limit was allowed to exceed on several occasions.
5. On 18th June 1995, M/s Iyer & Sons (P) Ltd.(A-5), was sanctioned cash credit limit of Rs.5.00 lacs by accused S.S. Wadhwa and cash credit account No.77 was opened in the name of the firm and action of the accused S.S. Wadhwa was confirmed by Regional Office on 11.08.1995. It is further the case of prosecution that Contrary to the Banking practice, accused S.S. Wadhwa unauthorizedly allowed to run both the Current Account No. 1436 & Cash Credit Account No.77 of the firm simultaneously and allowed issue of drafts to Air Lines, from Current Account when the firm was having Cash Credit account as well. On 24.06.1995, draft for Rs.18,54,096/- was issued to Indian Airlines from Current Account. It is alleged that S.S.Wadhwa (A-1) unauthorizedly allowed transfer of a sum of Rs.4,95,000/- from Cash Credit Account to Current Account as the Cash Credit was to be used strictly for working capital purpose. Accused S.S. Wadhwa unauthorizedly allowed the Cash Credit Limit to be exceeded beyond 5 lacs on several occasions overlooking the instruction of Regional Office. It is alleged that as per the Circular No.HO/ADV/28/91-
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92/85 dated 11.7.1992 (D-16), applicable during the relevant period, accused S.S. Wadhwa was empowered to purchase third party cheques only up to Rs.7.5 lacs but as per "Advance Manual Vol-1 i.e. Chapt-2.13", accused S.S. Wadhwa was not empowered to exercise it's loaning powers in respect of M/s Iyer & Sons (P) Ltd. (A-
5), and its group concern. He in conspiracy with the firm, unauthorizedly purchased in the account of M/s Iyer & Sons (P) Ltd (A-5) two cheques i.e. (i) Cheque No. 756555 dated 26.07.1995 for Rs.6.25 lacs drawn on SBI, Bathain Kalan, Mathura, (UP) purchased on 27.07.1995 and (ii) Cheque No.756556 dated 22.08.1995 for Rs.5,28,375/- drawn on SBI, Bathain Kalan, Mathura, (UP) purchased on 24.08.1995.
6. It is alleged that accused S.S. Wadhwa (A-1) allowed opening of Current Account No. 1455 in the name of M/s Haryana Gears (A-7) on 15.11.1993 and in conspiracy with accused Anil Aggarwal (A-3) in this account unauthorizedly purchased two cheques i.e. (ii) Cheque No.756580 dated 27.04.1995 for Rs.10,60,000/- drawn on SBI, Bathain Kalan, Mathura, (UP) purchased on 24.07.1995 and (ii) Cheque No. 756582 dated 24.08.1995 for Rs.5,92,710/- drawn on SBI, Bathain Kalan, (UP) purchased on 24.08.1995. It is alleged that Current Account No. 1454 in the name of M/s Anil Steels (P) Ltd. (A-6), was opened at OBC, Saket, New Delhi on 15th January, 1993 through its Directors accused Anil Aggarwal (A-3) and Vijay Gupta (A-4) . Accused S.S. Wadhwa (A-1) on 27.07.1995 unauthorizedly and illegally purchased cheque No.756581 dated 27.07.1995 for Rs.6,15,502/- drawn on SBI, Bathain Kalan, Mathura, U.P. Accused S.S. Wadhwa (A-
1) did not seek permission of Regional Office to purchase the cheques discounted by him, as he was not empowered to purchase these cheques and Four cheques were not sent to SBI, Bathain Kalan, Mathura, (U.P) for collection and those cheques were CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 4 out of 58 Unique ID No. 02401R019082001 not received at SBI, Bathain Kalan, Mathura, U.P. Case of the prosecution is that Current Account No. 22027 in the name of a fictitious firm M/s Temple Tours, F-20, Cannaught Place, New Delhi was allowed on 21.01.1995 by accused G.D. Buttan, Branch Manager, SBI Bathain Kalan, Mathura, U.P., in conspiracy with accused Anil Aggarwal and accused Vijay Gupta and Sh. Shyam Lal, Proprietor of the said firm is alleged to be a non-existent person and address of the firm is the same as that of M/s Iyer & Sons (P) Ltd. It is alleged that the said firm had no business activities and was opened on paper by accused Anil Aggarwal in order to misuse the cheque book issued in the account. The cheque No.756555 and 756556 discounted by accused S.S. Wadhwa in the accounts of M/s Iyer and Sons (P) Ltd. at Oriental Bank of Commerce, Saket, New Delhi were issued from the cheque book issued in this account.
7. It is further alleged that Current Account No.22028 was introduced and allowed by accused Ghan Shyam Dass Buttan (A-2) in conspiracy with accused Anil Aggarwal (A-3) on 21.01.1995 at SBI, Bathain Kalan, Mathura, U.P., in the name of a fictitious firm M/s Kosi Iron and Steel Works at the address of M/s Haryana Gears. This firm has no business activities and the account was opened by accused Anil Aggarwal in order to misuse it for the purpose of discounting its cheque. The cheque No.756581 discounting in the account of M/s Anil Steels (P) Ltd. and cheque No.756580 and cheque No.756582 discounted in the account of M/s Haryana Gears were from the cheque book issued in the account. The proprietor of the firm Sh. Dharam Pal alleged to be a non-existent person. It is further the case of the prosecution that Current Account No.1405 was allowed by accused S.S. Wadhwa on 28.09.1992 in the name of M/s A. Kumar and Co. at Oriental Bank of Commerce, CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 5 out of 58 Unique ID No. 02401R019082001 Saket, New Delhi and one Anil Kumar (PW-16) Proprietor of the said firm handed over unsigned cheque book to accused Anil Aggarwal (A-3). On 15.11.1995 accused S.S. Wadhwa (A-1) without the knowledge of the Proprietor purchased Saving Bank Cheque No.984645 dated 13.11.1995 for Rs.5,42,835/- drawn on Canara Bank, Ayyampet, Tamilnadu. A sum of Rs.5,35,000/- was withdrawn from the said account by cheque No.565605 dated 13.11.1995 on the basis of forged signatures which was allowed by accused S.S. Wadhwa and out of which a sum of Rs.5 lacs was transferred to CC A/c No. 77 of M/s Iyer and Sons (P) Ltd.
8. It is alleged that Current Account No.1406 in the name of fictitious firm M/s Ram Kumar & Brothers, 20- F Cannaught Place, New Delhi was allowed by accused S.S. Wadhwa on 28.09.1992. Sh. Sidhartha, Proprietor of the said firm was found to be a non-existent person and address of the firm is same as that of M/s Iyer & Sons (P) Ltd. On 17.11.1995, i.e. after a gap of three years, all of a sudden, accused S.S. Wadhwa (A-1) in conspiracy with accused Anil Aggarwal and Vijay Gupta purchased Saving Bank Cheque No.984644 dated 11.11.1995 for Rs.3,72,750/- drawn on Canara Bank, Ayyampet, Tamilnadu. An amount of Rs.3,65,000- was withdrawn form the account vide cheque No.565629 dated 13.11.1995, on the basis of forged signatures and the said amount was transferred to CC A/c No. 77 of M/s Iyer & Sons (P) Ltd. on 18.11.1995. Further accusations are that Saving Bank Account No.6058 (10058) was opened at Canara Bank, Ayyampet, Tanjavur (Tamilnadu) on 5.7.1977 in the name of Ms. M. Vijayan Rao (PW-18), 33, South North, New Street, Ayyampet, who is family friend of T. Mathuraman (PW-19), an employee of M/s Iyer & Sons (P) Ltd. (A-5). It is alleged that accused Anil Aggarwal (A-3) asked T. Mathuraman (PW-
19) to arrange two bank cheques from his native place in lieu of which he was told to CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 6 out of 58 Unique ID No. 02401R019082001 grant promotion in the company. Subsequently, Sh. Mathuraman (PW-19) arranged cheque No. 984644 and 984645 from Smt M. Vijayan Rao through his father, which were got discounted in accounts of M/s Ram Kumar & Brothers and M/s A. Kumar and Company at Oriental Bank of Commerce, Saket, New Delhi, by accused Anil Aggarwal (A-3). Next allegation is that on 26.09.1995 accused S.S. Wadhwa (A-1) unauthorizedly debited a sum of Rs.10 lacs from Current Account No.1754 of another company M/s Intergest International Limited and credited the same to the Current Account No.1436 of M/s Iyer & Sons (P) Ltd. (A-5).
9. Prosecution version is that accused S.S. Wadhwa (A-1) in conspiracy with accused Anil Aggarwal (A-3) and Vijay Gupta (A-4) unauthorizedly purchased various cheques of huge amount which were not out of genuine trade transactions, in order to accommodate the private firms A5, A-6 & A-7 and as a result, a sum of Rs.43,37,172/- of the Oriental Bank of Commerce was defrauded.
10. On conclusion of the investigation, charge sheet was filed in the court on 4 th April, 2000. Cognizance was taken by the Ld Predecessor of this court on 29 th April, 2000. Anil Aggarwal (A-3) failed to appear since 13th July, 2006 before charges were framed . Charges were framed on 18 th February, 2009 against the remaining accused persons namely Surender Singh Wadhwa (A-1), Ghanshyam Dass Buttan (A-2), Vijay Gupta (A-4) and companies M/s Iyer & Sons (P) Ltd. (A-5), M/s Anil Steels (P) Ltd. (A-6) & M/s Haryana Gears (A-7) u/s 120-B r/w Sections 420, 477A IPC & 13 (2) r/w 13 (1) (d) of POC Act and substantive offence U/S 420 IPC against Vijay Gupta (A-4) as well as against companies M/s Iyer & Sons (P) Ltd. (A-5), M/s Anil Steels (P) Ltd. (A-6) & M/s Haryana Gears (A-7), U/S 477A IPC and 13 (2) r/w U/S 13(1)(d) of POC Act against Surender Singh Wadhwa (A-1), U/S 13(1)(d) r/w 13 CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 7 out of 58 Unique ID No. 02401R019082001 (2) of PC Act against Ghanshyam Dass Buttan (A-2). These accused persons pleaded not guilty and claimed trial. Anil Aggarwal (A-3) was declared Proclaimed offender on 06.07.2010. Surender Singh Wadhwa (A-1) also failed to appear during trial since 15th March, 2012 and was declared Proclaimed offender on 21 st September 2013.
Charges
11. Charge was framed against all the accused persons that during the period 1992 to 1994, they entered into a criminal conspiracy with each other to cheat Oriental Bank of Commerce, Saket, New Delhi. As per charges, specific acts allegedly committed by accused persons may be noted which are as under:-
Acts/omissions of Ghanshyam Dass Buttan (A-2) a(i.) On 21st January, 1995 Ghanshyam Dass Buttan (A-2) dishonestly and fraudulently allowed Anil Aggarwal (PO) (A-3) to open current accounts No.22027 & 22028 in State Bank of India, Baithan Kalan, Mathura, UP with respect to fictitious firms M/s. Temple Tours, F-20, Cannuaght Place, New Delhi (under the proprietorship of Shyam Lal alleged non-existing person) and M/s Kosi Iron and Steels Works, Z-236 Loha Mandi, Naraina, New Delhi. (under the proprietorship of Dharam Pal alleged non-existing person) and issued cheque books to Anil Aggarwal (A-3) (P.O.) (containing cheques No.756551 to 756575 w.r.t M/s Temple Tours) and (containing cheques No.756576 to 756600 w.r.t M/s Kosi Iron and Steels Works).
Substantive charges against Ghanshyam Dass Buttan (A-2) b (i) Whether Ghanshyam Dass Buttan (A-2) by corrupt or illegal means or by abusing his official position as such obtained pecuniary advantage to the tune of Rs.34,21,587/- for co-accused Anil Aggarwal (A-3) (PO) and Vijay Gupta (A-4)?
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Acts/omissions allegedly committed by Anil Aggarwal (A-3) & Vijay Gupta (A-4) are as under :
D (i.) Vijay Gupta (A-4) and Anil Aggarwal (P.O) procured two signed blank cheques No.984644 & Cheque No.984645 both drawn o Canara Bank, Ayyampat, Tanjavur, Tamil Nadu from the account No,.6058 of Ms. M. Vijayan through D.T. Tulsi Raman, father of their employee Sh. T. Muthuraman on the premise of his promotion in your company M/s Iyer and Sons (P) Ltd. and that;
D (ii.) Vijay Gupta (A-4) along with Anil Aggarwal (A-3) submitted two cheques No.984644 & Cheque No.984645 to S.S. Wadhwa (A-1) for discount/purchase. S.S.Wadhwa (A-1) dishonestly and fraudulently purchased cheque No.984645 dated 13.11.1995 for Rs.5,42,835/- and credited the amount in Current Account No.1405 of M/s A.Kumar & Company and purchased cheque No.984644 dated 11.11.1995 for Rs.3,72,750/- in Current Account No.1406 of M/s Ram Kumar & Brothers and credited the amount in account No.1406. Vijay Gupta (A-4) and Anil Aggarwal (A-3) (PO) have withdrawn the amount of Rs.5,35,000/- and Rs.3,65,000/- from these accounts on 13.11.1995. D (iii.) Substantive charges against Anil Aggarwal (A-3), Vijay Gupta (A-4) and companies M/s Iyer and Sons (P) Ltd.(A-5), M/s Anil Steels (P) Ltd. (A-6) and M/s Haryana Gears D (iv.) C (i). Whether Vijay Gupta (A-4), M/s Iyer and Sons (P) Ltd.(A-5), M/s Anil Steels (P) Ltd. (A-6) and M/s Haryana Gears along with Anil Aggarwal (A-3) (PO) during the aforesaid period and place cheated Oriental Bank of Commerce, Saket, New Delhi by dishonestly inducing it to deliver property of the bank i.e. an amount of Rs.43,37,172/-, which was the property of the Bank?
Alleged acts/omissions committed by S.S.Wadhwa (A-1) (PO) E (i.) S.S. Wadhwa (A-1), Chief Manager, Oriental Bank of Commerce, Saket, New Delhi allowed opening of Current Account No.1436 in respect of M/s Iyer and Sons CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 9 out of 58 Unique ID No. 02401R019082001 (P) Ltd. on 07.12.1992 and S.S. Wadhwa (A-1) fixed overdraft limit beyond his financial powers of Rs.50,000/- without paper documentation and allowed M/s Iyer and Sons (P) Ltd. and its director-cum-authorized signatories to avail exceeded overdraft limit as against the fixed limit fixed by S.S.Wadhwa (A-1) on several occasions as under:
Date OD Limit fixed OD Limit availed.
24.04.1993 Rs.7.5 lacs Rs.35,65,057/-
17.06.1993 Rs.41.25lacs Rs.49,81,248/-
10.09.1993 Rs.30 lacs Rs.48,67,955/-
19.11.1993 Rs.30.lacs Rs.60,51,803/-
13.03.1994 Rs.45 lacs Rs.91,07,188/-
30.01.1995 NIL Rs.1,58,035/-
04.03.1995 NIL RS.1,67,819/-
08.05.1995 25.8 LACS RS.34,87,710/-
E (ii.) S.S. Wadhwa (A-1) in conspiracy with co-accused dishonestly and fraudulently allowed to avail overdraft facility in Current Account No.1436 and cash credit account No,.77 in respect of M/s Iyer and Sons (P) Ltd. beyond his discretionary power.
E (iii.) S.S. Wadhwa (A-1) allowed co-accused to avail cash credit limit in Cash Credit Account No.77 beyond sanctioned limit of Rs.5.00 lacs which was sanctioned by Regional Office of the Bank for three months. Facility availed by M/s Iyer and Sons (P) Ltd., which exceeded the sanction limit as Rs.15,24,351/- as on 28th July 1995 and Rs.21,53,406/- as on 30th October 1995.
E (iv.) S.S. Wadhwa (A-1) fraudulently and dishonestly allowed CC Account No.77 to operate M/s Iyer and Sons (P) Ltd. beyond its expiry date i.e. 17.09.1995 and continued to allow it till 25.02.1996.
E (v.) S.S. Wadhwa (A-1) dishonestly and fraudulently purchased/discounted,
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Cheque No.756555 dated 26.07.1995 for Rs.6.25 lacs and Cheque No.756556 dated 22.08.1995 for Rs.5,28,375/- both drawn on SBI, Bathain Kalan, Mathura (UP) in the account of M/s Iyer and Sons (P) Ltd. against provisions of Advance Manual of the Bank illegally and unauthrizedly, and dishonestly credited the amount of aforesaid both cheques in account of M/s Iyer and Sons (P) Ltd. and A1 had not send the aforesaid cheques for realization to SBI, Bathain Kalan, Mathura (UP). E (vi.) S.S.Wadhwa (A-1) allowed opening of current account No.1455 in respect of M/s Haryana Gears with Anil Aggarwal (A-3) as partner and current account No.1454 in respect of Anil Steels (P) Ltd. on 15.01.1993 in OBC, Saket, New Delhi. E (vii.) S.S. Wadhwa (A-1) dishonestly and fraudulently without any authority discounted/purchased cheque No.756580 dated 27.04.1995 for Rs.10,60,000/- and cheque No.,756582 dated 24.08.1995 for Rs.5,92,710/- all drawn on SBI, Bathain Kalan, Mathura (UP) against the provisions of Advance Manual and without permission of Regional Office of Bank from Anil Aggarwal (A-3) in the account of M/s Haryana Gears and dishonestly credited the amount in its account. S.S.Wadhwa (A-
1) did not send the aforesaid cheques for realization to SBI, Bathain Kalan, Mathura (UP) dishonestly and fraudulently.
E (viii.) S.S.Wadhwa (A-1) dishonestly and fraudulently without any authority discounted/purchased cheque No.756581 dated 27.07.1995 for Rs.6,15,502/- drawn on Syndicate Bank of India, Bathain Kalan, Mathura (UP) against the provisions of Advance Manual and without permission of Regional Office of Bank in the account of M/s Iyer and Sons (P) Ltd. and dishonestly credited the amount in its account. S.S.Wadhwa (A-1) did not send the aforesaid cheques for realization to SBI, Bathain Kalan, Mathura (UP) dishonestly and fraudulently.
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E (ix.) S.S. Wadhwa allowed opening of current Account No.1405 & 1406 in respect of fictitious firms M/s A. Kumar & Co., & M/s. Ram Kumar & Brothers, in Oriental Bank of Commerce, Saket, New Delhi and purported proprietor of M/s Ram Kumar & Brothers namely Siddhartha was a non-existent persons.
E (x.) S.S. Wadhwa (A-1) dishonestly and fraudulently debited a sum of Rs.10.00 lacs from Current Account No.1754 of M/s Intergest International Limited and credited the same to Current Account No.1436 of M/s Iyer and Sons (P) Ltd. and prepared false account willfully.
Substantive charges against S.S.Wadhwa (A-1) F (i.) Whether S.S. Wadhwa (A-1) by corrupt or illegal means or by abusing his official position, obtained pecuniary advantage to the tune of Rs.43,37,172/- for co- accused M/s Iyer and Sons (P) Ltd., M/s Anil Steels (P) Ltd., M/s Haryana Gears and Vijay Gupta (A-4) and Anil Aggarwal (A-3) (PO)?
F (ii.) Whether S.S. Wadhwa (A-1) fraudulently, dishonestly and willfully with intent to cause damage or injury to OBC, Saket, New Delhi made false entries in books of Bank (OBC, Saket) and thereby committed an offence punishable u/s 477-A IPC. Prosecution witnesses
12. In order to establish aforenoted accusations prosecution examined 23 witnesses. Outline of evidence adduced by these witnesses may be noted:
12.1. Prosecution Witnesses pertaining to Oriental Bank of Commerce
a) PW-2 Dinesh Kumar Bhaskar, Assistant Regional Manager in Regional Office, Karol Bagh proved two letter Ex.PW-2/A & Ex.PW-2/B.
b) PW-6 L.M.Soni, Senior Manager, Oriental Bank of Commerce, Saket, New Delhi was branch head during the period 1996 to 2001. He identified accused S.S. Wadhwa, the CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 12 out of 58 Unique ID No. 02401R019082001 branch head, in the court. He placed on record DD dispatch register, Saket Branch (Ex.PW-6/B) and explained about cheque discounting facility.
c) PW-9 S.K.Gauba, Manager in Oriental Bank of Commerce testified about the powers of branch manager in sanctioning the facility to group concerned firm up to 7.5 lacs and also discretionary power of branch managers.
d) PW-13 Arun Seth, Officer, OBC, Saket Branch after seeing account opening form Ex.PW-9/1 of current account no. 1436 of M/s Iyer and Son Pvt. Ltd opened in their bank deposed that account was not introduced by anyone.
e) PW-15 S.S.Mehra, Complainant, Chief Vigilance Officer of OBC, Delhi proved his complaint (Ex.PW-15/A) written to Superintendent of Police CBI ACB.
f) PW-23 O.P. Sharma, Chief Manager, OBC (HQ) on seeing photocopy of circular no.
HO/ADV/28/91-92 dated 1.07.1991 mark PW-23/A(D-16) stated that discretionary power of Incharge of Large Branch in relation to Cash Credit Limit (CCL) was Rs. 7.50 lacs, in relation to Bill Discounting was Rs. 1.50 lacs and for Draft/ Cheque Discounting was Rs. 1.50 lacs. PW -23 deposed that for exercising the above discretionary powers, Group/ Sister/ Associate concern shall be treated as single entity.
g) PW-4 Rakesh Kumar Nanda, Manager Scale-II, OBC, Saket Branch, New Delhi, worked on different seats including current account seat and placed on record account opening form (Ex.PW-4/A) pertaining to current account No.1405 in the name of M/s. A.Kumar & Company under the proprietorship of Anil Kumar (A-3) and his Specimen Signatures Card (Ex.PW-4/B) and Cheque No.565605 dated 13th November 1995 for Rs.5,35,000/- (Ex.PW-4/C).
h) PW-8 Manoj Wal, Loan Officer explained duties of a loan officer and proved debit transfer voucher for a sum of Rs33,00,502/- (Ex.PW-8/1), credit transfer voucher for a sum of Rs.21,60,585/- both dated 27.07.1995 in the name of CC Account M/s Iyer & Sons P. Ltd (Ex.PW-8/2), credit transfer voucher for a sum of Rs.34.533/- (Ex.PW-8/4) CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 13 out of 58 Unique ID No. 02401R019082001 & credit transfer voucher for a sum of Rs.9,63,473/- both dated 24.8.1995 (Ex.PW-8/6).
i) PW-10 Kamal Kishore Abbi worked as Manager in OBC, Saket since 1990 to June 1996 remained as Senior Manager w.e.f.June 1995 to 2008 at OBC Panchsheel Park Branch deposed that there was no entry of cheque no.756580 and 756582 in dispatch dated 24th August 1995.
12.2. Witnesses to prove the fact that cheques in question were not dispatched from the OBC.
a) PW-1 Mukesh Chawla, Manager, M/s Madhur Courier Services, Nehru Place, was providing services to the Oriental Bank of Commerce. They used to collect from OBC Saket post including draft, cheques, letters etc. for delivery.
b) PW-21 Sanjeev Kumar, employee of M/s Madhur Courier having the job to distribute the Dak and to collect Dak from various institutions likes Banks etc. He used to make entry of Dak in the register maintained in the Branch. PW 21 deposed that there was no entry of dispatch DD No. 50/95 dated 27.7.1995 for Rs.6,25,000/- of M/s. Iyer Sons to be dispatch to SBI, Bathain Kalan, Kausi Kala, Mathura;DD No. 53/95 dated 27.07.1995 for Rs.6,15,502/- of M/s. Anil Steels Pvt. Ltd., to be dispatch to SBI, Bathain Kalan, Kosi Kala, Mathura; DD No. 68/95 dated 27.07.1995 for Rs.5,28,375/- of M/s. Iyer & Sons, to be dispatch to SBI, Bathain Kalan, Kausi Kala, Mathura;DD No. 69/95 dated 27.07.1995 for Rs.5,92,710/- of M/s. Haryana Gears, to be dispatch to SBI, Bathain Kalan, Kausi Kala, Mathura.
12.3. Witnesses from SBI, Bathain Kalan, Mathura (UP).
a) PW-5 M.P. Gupta, General Manager, SBI, New Delhi competent authority granted sanction for prosecution of accused G.D. Buttan (A-2) vide sanction order dated 27th November 1999 (Ex.PW-5/A).
b) PW-12, Sanjay Mehta, posted in Bathain Kalan, Kosi Kalan Branch of SBI as Branch Manager with effect from December 1988 to June 2001, handed over relevant documents i.e. Ex.PW-12/A to Ex.PW-12/F to the CBI official.
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c) PW14 Jagdish Lal, Clerk in SBI Branch, Village Bathain Kala, Dist. Mathura from
1989 to 1995 deposed that he had opened the account No.22027 in the name of M/s Temple Tours and Account No. 22028 in the name of M/s Kosi Iron and Steels Works but he could not identify by whom the said form had been signed and Account holder was known to branch manager Sh. Buttan.
12.4. Employees and Persons concerned with the Companies involved in the offence
a) PW-3 Deepak Babbar, Accountant, M/s Intergest India International Ltd. used to deal with bank work. He deposed that Rajiv Gosain was the president of that firm, who had signed account opening form (Ex.PW-3/A). He placed on record letter dated 1st June 1996 (Ex.PW-3/B) signed by him, whereby clarification was sought from OBC Saket as regards unauthorized debit entry of Rs.10.00 lakhs on 29 th June, 1995 in their bank account.
b) PW-7 M.M. Sharma, Account Assistant in M/s Iyer & Sons P. Ltd. since 1976 used to maintain ledger account and sale register and check the airlines payments. He filled several account opening formsand pay-in-slips at the instance of Anil Aggarwal.
c) PW-11 Varun Gupta son of Vijay Gupta (A-4) and nephew of Anil Aggarwal were directors of M/s Iyer & Sons Pvt. Ltd. (A-5) admitted that cheque bearing no. 5605 dated 13th November 1995 for Rs.5,35,000/- drawn on OBC, Saket Branch, New Delhi is in his handwriting (Ex.PW-4/C). He deposed that he had signed on the back side of the cheque at the instance of Sh. M.M. Sharma, accountant of firm M/s Iyer & Sons Pvt. Ltd.
d) PW-16 Anil Kasturia had a travel agency in the name of M/s Iyer & Sons, Connaught Place, New Delhi and he knew Mr.Anil as both of them were members of Roshnara Club. He deposed that he had visited Kathmandu 2/4 times alongwith Mr. Anil in 1992, 1993 and 1994. He deposed that Iyer & Sons dealt in tours and travels.
e) PW-18 M.Vijaya, Teacher posted in Ayyampet, Tanjore gave two blank cheques to Mr.
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D.T. Tulsiraman, family friend since her childhood. She identified her signatures on Mark PW-18/3 for opening an account.
f) PW-19 T.Muthu Raman, employee of M/s Iyer and Sons. He worked there till 1997.
He testified that on the asking of M.M. Sharma (PW-7), any other employee of M/s Iyer and Sons (P) Ltd. he ha handed over 2/3 blank cheques to him, which he had brought from his father from the village. In lieu of giving cheque he was assured promotion & flight tickets.
12.5. Expert from CFSL.
a) PW-17 V.K.Khanna Principal Scientific Officer, CFSL, CBI, New Delhi deposed that there were number of opinions given by him in the report Ex.PW-17/1. 12.6. Investigation Officers
a) PW-20 V.M. Mittal Inspector CBI in April, 1998, investigated the case. He identified signatures of Mr. Anil Kumar, the then SP/CBI on Ex.PW-20/1 i.e. FIR in RC 40(A)/97/DLI.
b) PW-22 K. Subramaniam Inspector, CBI/ACB/ND to whom in the year 1998-99 case pertaining to Tamilnadu State was entrusted to him. He placed on record seizure memo Ex.PW-22/A and receipt memo dated 02.09.1998 Ex.PW-22/B. PW-22 deposed that his investigation was confined to two cheques bearing No.984644 and 984645 issued by Ms. M. Vijaya in blank and gave them to Mr. D.T. Tulsiram as his son required these two blank signed cheques.
Statement of accused
13. In his statement U/s 313 of the Cr.P.C. 1973 Vijay Kumar Gupta (A-4) admitted that during the year 1995 he was posted and working as Director of M/s Iyer and Sons and Anil Steals Pvt. Ltd. Accused admitted that M/s Iyer & Sons Pvt. Ltd had a current account which was being handled by Anil Aggarwal his co-accused, though he was also an authorized signatory and that he and co-accused Anil CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 16 out of 58 Unique ID No. 02401R019082001 Aggarwal, being Directors of M/s Iyer and Sons (P) Ltd. were having a cash credit account number 77 in Oriental Bank of Commerce, Saket, New Delhi. Accused stated that cheque no. 756555 of Rs. 6.25 lacs issued from account no. 1436, State Bank of India, Bathain Kalan, Mathura (U.P) was deposited in cash credit account no. 77 in the name of M/s. Iyer & Sons Limited vide pay-in-slip dated 27.07.1995 Ex. PW-6/A1 (D-19) was not deposited by him but was deposited by Sh. M.M.Sharma. Vijay Kumar Gupta (A-4) stated that he was innocent and was only an employee was getting salary of Rs.25,000/- per month plus 1 ½ % commission. He was stated to be only controlling the sales part of M/s Iyer and Sons and other aspects was being taken care of by Mr. Anil Aggarwal, the other director. He stated that he has been falsely implicated and had not made any application for seeking any financial assistance or facility from the bank at any stage.
14. In this Statement U/s 313 of the Cr.P.C. 1973 Ghanshyam Dass Buttan (A-2) admitted that during the year 1995 he was posted and working as Manager, State Bank of India, Bathain Kalan, Mathura (U.P). He denied that he had dishonestly and fraudulently allowed co-accused Anil Aggarwal on 21.01.1995 to open current account no. 22027 in the name of fictitious firm M/s. Temple Tours, F-20, Cannaught Place, New Delhi under proprietorship of non existing person Shyam Lal, in State Bank of India, Bathain Kalan, Mathura (U.P). He admitted that account opening form pertaining to current account No. 22027 in name of M/s Temple Tours is (Ex.PW- 12/A) (D-47) bears his signatures and ledger sheet pertaining to aforesaid account Number is (Ex.PW-12/B and 12/C) (D-49) bears his initials. Ghanshyam Dass Buttan also admitted that he had issued a cheque book containing cheques no. 756551 to 756575 which was received by co-accused Anil Aggarwal vide letter Ex. PW-7/4 (D-
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48) and stated that However, he have issued it in his official capacity being Manager of the Bank on the request of the customer. He admitted that R.N. Buttan is his brother. He denied that in January, 1995 R. N. Buttan along-with Anil Aggarwal and M. M. Sharma visited your bank/ branch at Bethan Kalan District Mathura for opening of account and that account opening form Ex. PW12/A and Ex. PW12/B were handed over by Sanjay Mehta PW12 in his presence. He denied that in February, 1995 Anil Aggarwal visited the bank branch at Bethan Kalan and deposited funds of Rs. 3 lacs in current account no. 22028 pertaining to M/s Kosi Iron & Steel Works and Rs. 4 lacs in current account no 22027 pertaining to M/s Temple Tours vide pay in slips Ex. PW14/A and Ex. PW14/B. Ghanshyam Dass Buttan further stated that he is innocent and has been falsely implicated. He as a branch manager of SBI, Kosikalan, had issued two cheque books to the two customers namely M/s Kosi Iron and Steel Works and M/s Temple Tools which was within his power as the customers were maintaining the amount in the account. He stated that at that time there was no requirement of getting the photograph and the verification of the identity and address furnished by the new customers. Dharampal and Shyam Lal had represented to him that M/s Iyer and Sons Pvt. Ltd. was their sister concern having a good business at Delhi and that the money collected by their firms from the Kosikalan and the nearby area would be deposited in their branch. He was persuaded by the said representatives and as that his branch was a very small branch and there was paucity of funds and to fulfill the target, therefore, he had introduced the new customer in the hope that funds would be generated and no facility in the nature of loan or credit or overdraft was provided by me to the aforesaid customers. He stated that his acts were bonafide.
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Submissions advanced
15. Sh. Surender Sinha, ld. Special Public Prosecutor argued that Ghanshyam Dass Buttan (A-2) allowed opening of two fictitious bank accounts in the name of M/s Temple Tours, F-20, Connaught Place, New Delhi and M/s Kosi Iron and Steels in SBI, Bathain Kala, Mathura without verifying particulars of the account holder and without taking any introduction and issued cheque books. It is submitted A-2 Branch Manager SBI Baithan Kalan, District Mathura entered into conspiracy with Anil Aggarwal (A-3) and allowed opening of Current Account No. 22027 in the name of M/s Tample Tour under the proprietor ship of Shyam Lal, a non-existing person and CA No. 22028 on 21.06.1995 in respect of M/s Kosi Iron and Steel Works under the proprietorship of Dharam Pal non existing person and issued cheque books having cheque No. 756575 to 756600 and cheque Leafs No.756551 to 756575 got issued by co-accused Anil Aggarwal. It is submitted that PW-7 Sh. M.M. Sharma, account assistant working with M/s Iyer and Sons, Naraina wrote request letter Ex.PW-7/3 and Ex.7/4 dated 21.01.1995 for issuance of cheque books. Learned Spl. PP submits that PW-7 was the employee of Anil Aggarwal (A-3) and Vijay Gupta (A-4), directors of M/s Iyer and Sons Pvt. Ltd. Jagdish Lal (PW-14) who worked at Bathain kala Branch, District Mathura as clerk deposed that an application Ex.PW-7/3 for opening the account in the name of M/s Kosi Iron and Steel Works. was submitted by one Dharam Pal for issuance of a cheque book with respect of Currant Account No. 22028 and a cheque book with cheque No. 756576 to 756600 was issued and the said cheque numbers were written by PW-14. PW-14 deposed that the account holder was introduced by Sh. G.D. Buttan. Learned Prosecutor argued that Vijay Gupta (A-4) director of M/s Iyer and Sons, was beneficiary of defrauded amount as CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 19 out of 58 Unique ID No. 02401R019082001 cheques were presented on behalf of companies. It is contended that S.S. Wadhwa (A-1) allowed Anil Aggarwal, P.O (A-3) and Vijay Gupta, (A-4) to open current account No. 1436, in the name of M/s. Iyer and Sons Pvt. Ltd on 07.12.1992. Accused Anil Aggarwal (A-3) and accused Vijay Gupta (A-4) being directors of M/s Iyer and Sons were authorized to operate the aforesaid account. PW-6 Sh. L.M. Soni testified that accused S.S. Wadhwa was having discretionary power of Rs.50,000/- as chief manager of OBC Saket during the relevant period, but he exceeded his discretionary power on various occasions by giving OD facility in the account of M/s Iyer and sons. Pvt. Ltd. as reflected in ledger sheet (Ex.PW-9/3) of M/s Iyer and Sons. It is argued that PW-2 Sh. Dinesh Kumar Bhaskar deposed that vide letter dated 11.08.1995 Ex.PW-2/A Regional Office confirmed the action of branch for having released BC (Book Debt) facility of Rs.5.00 lakhs for a period of three months only from the date of release, in the account of M/s Iyer and Sons. This limit was not enhanced and was subsequently nor renewed. Accused S.S. Wadhwa, on 28.07.1995 granted CC Limit of Rs.15,34,351 and on 30.10.1995 granted Cash Credit Limit of Rs.21,53,000/-. CC Limit was confirmed by Regional Office up to 17.09.1995, but it was allowed to continued up till 25.02.1996 as reflected in ledger sheet Ex.PW-6/A, (D-12) pertaining to CC account No. 77 of M/s Iyer and Sons.
16. It is argued that S.S. Wadhwa (A-1) purchased/discounted cheque bearing numbers 756555 dated 26.07.1995 for Rs.6.25 lakhs & cheque No. 756556 dated 22.08.1995 for Rs.5,28,375/- both drawn on State Bank of India, Bathain Kalan, in the account of M/s Iyer and Sons and credited the aforesaid amount in the said account. Credit entries of both cheques are reflected in ledger sheet Ex.PW-6/A and PW-6 L.M. Soni has deposed that four cheques 756555, 756556, 756581, 756582 CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 20 out of 58 Unique ID No. 02401R019082001 were discounted by accused S.S. Wadhwa (a-1), who was not authorized to discount these cheques and beneficiary M/s Iyer and Sons Pvt. Ltd. had not been sanctioned any cheque discounting facility in their accounts and regional office had not confirmed the act of discounting of cheques by OBC Saket Branch in the account of M/s Iyer and Sons and other firms and was advised to stop discounting of the cheques, vide letter dated 05.09.1995 of Regional Office. Accused S.S. Wadhwa (A-
1) did not send cheques for realization to the concerned bank after giving credit in the account of M/s Iyer and Sons. PW-1 Sh. Mukesh Chawla of M/s Madhur Courier Service and PW-21 Sanjeev Kumar have deposed that there was no entry of dispatch dated 27.07.1995 and 24.08.1995 in the dispatch register Ex.PW-1/A:
I. DD NO. 50/95 dated 27.07.1995 (cheque No. 756555 dated 21.07.1995) of Rs.6.25lakhs of M/s. Iyer and Sons to be dispatched to SBI, Bathain Kalan, Kausi Kala Mathura;
ii. DD No. 68/95 dated 27.07.1995 (cheque No.756556 dated 21.07.1995) of Rs.5,28,375/- of M/s. Iyer and Sons, to be dispatched to SBI, Bathain Kalan, Kausi Kala, Mathura;
Iii. DD No. 53/95 dated 27.07.1995 (cheque No.756581 dated 27.07.1995) of Rs.6,15,502/- of M/s. Anil Steal Pvt. Ltd., to be dispatched to SBI, Bathain Kalan, Kausi Kala, Mathura.
iv. DD No. 69/95 dated 27.07.1995 (Cheque No.756582 dated 27.07.1995) of Rs.5,92,710/ of M/s. Haryana Gears to be dispatched to SBI, Bathain Kalan, Kausi Kala, Mathura.
17. Per contra, Sh. J.C. Mahindro, learned counsel appearing for A-4 argued the entire case is coined due to the alleged illegal acts and omissions of Shri S.S.Wadhwa (A-1) Manager of the Bank who is alleged to have misused his authority to sanction cheque discounting facilities to cause loss to the Bank which fact though is neither proved and cannot be even alleged when such a facility is a Banking CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 21 out of 58 Unique ID No. 02401R019082001 practice duly recognized and from where the Bank generates its big and proportionately higher income. It is submitted that admittedly fact that there is no such document brought forth on record which could show that Vijay Kumar Gupta had ever requested for any such facilities under his own handwriting or by his conduct and as such he cannot be accused of any such act of having been committed by him or being in conspiracy with the said Manager who is the Principal Accused in this case. It is contended that it is a matter of record that Shri S.S.Wadhwa (A-1) for his own interest had created a fraudulent entry of Rs.
10,60,000/- in the Account of M/s. Haryana Gears which amount was thereafter fraudulently and illegally transferred by him in the Account of M/s. Wadhwa Pharmaceuticals with which concern M/s. Haryana Gears with which Shri Vijay Kumar Gupta was associated were never doing any business transaction . It is argued that admittedly the sending or non sending of the cheque cannot be within the domain or with the consent of any other person except the Bank Employees and if there was any such act , omission or default the same could not be attributed to the Vijay Gupta (A-4) by any stretch of imagination and more so when the benefit which was achieved was by the Accused Shri S.S.Wadhwa or his associate M/s. Wadhwa Pharmaceuticals in whose favour the said fictitious transfer was made. It is urged that even for this illegal act M/s. Haryana Gears and its partners were made to pay the said amount of Rs.10,00,000/- along with penal interest etc. for no fault or any offence committed by them and in any case there cannot be any conspiracy being made out where the benefit has flowed to Shri S.S.Wadhwa exclusively. It is submitted that in any case there cannot be any connection or concern even brought on record between the Accused No.4 in respect of the Bank Accounts opened at SBI, CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 22 out of 58 Unique ID No. 02401R019082001 Baithan Kalan, Mathura District either in the opening of the said Accounts or getting the alleged cheques discounted or not being sent in clearing and as such the entire foundation of this prosecution case falls flat. Sh. Mahindru argued that admittedly a Circular No. HO/ADV/28/91-92/85 dated 17-11-1992 which was applicable during the transactions in question when the Accused Shri S.S.Wadhwa was heading the Branch within his domain and beyond the knowledge of any Bank customers and that it is a matter of record that the family of Vijay Kumar Gupta had deposits of more than One and a Half Crore with the said branch in the names of various family members through Iyer & Sons Group itself so granting any such facility could not be faulted with by any stretch of imagination when this facility was duly recognized in Banking practice and was reaping good returns to the Bank and was never put to challenge in any Audit of the Bank for the last three years which itself clearly showed the silent approval of the higher Authorities and even after the FIR was registered there were fresh credit facilities granted to the tune of Rs.10 Lacs clearly showed the reputation and financial credibility of Iyer & Sons Group. It is argued that even otherwise the said Financial liabilities had already been settled and a No Dues Certificate stands submitted before this Court in all the aforesaid Accounts so no offence could have been committed in this respect. Learned counsel submitted that even otherwise the Bank had been provided the Second Charge of the immovable Property no. 66, Banarsi Dass Estate, Delhi -110007 as a collateral Security which was sufficient Security for the clearance of the Debt alleged to be due at any time from the aforesaid Debtors of the Bank. It is argued that grant of temporary credit facility was as per practice being sought by the Manager from the Regional Manager on phone which was being allowed as per routine and the problem only started when there was CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 23 out of 58 Unique ID No. 02401R019082001 dishonor of cheques after discounting of cheques in which the Accused No.4 had no involvement in either getting the said cheques discounted or for availing any such credit facility.
18. Sh. S.C. Buttan, Ld. Counsel appearing for Ghanshyam Dass Buttan (A-2) argued that G.D. Buttan, Manger, SBI, (A-2) was falsely implicated in this case. It is submitted that Document D-48 (Ex.PW-7/4) letter is purported to have been signed by Shyam Lal for M/s Tample Tours dated 21.06.1995, having signatures of Shyam Lal at Q-41 and D-51 (Ex.PW-7/3), similar request to the branch manager SBI Kosi Kalan is purported to be signed by Dharam Pal of M/s Kosi Iron and Steel Works. Account opening form D-47(Ex.PW-12/A) is in the name of M/s Temple Tours and the signatory is purported to be Shyam Lal. It is submitted that account opening form Ex.PW-12/D (D-50) in the name of M/s Kosi Iron and Steels Works and the signatories is purported to be Dharam Pal. It is argued that PW-7 M.M. Sharma has stated that both these letters were the request letters written by him to the bank manager for issuance of cheque book and were in his handwriting. It is submitted that A-2 was the manager of the bank and whatever acts were done by him were in discharge of his duties and admittedly, none of the cheques were sent to the SBI Bathain Kala, Branch. As manager, he counter signed the account opening form and issued the cheque books on behalf of persons whose signatures on the request letter tallied with the account opening form (Ex.PW7/3 & Ex.PW-7/4). Legal Position
19. Before discussion of evidence, it may be noted that cardinal principle which has always to be kept in view in our system of administration of justice for criminal cases is that a person arrayed as an accused is presumed to be innocent unless that CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 24 out of 58 Unique ID No. 02401R019082001 presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. Another golden thread which runs through the web of the administration of justice in criminal cases is that, if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favourable to the accused should be adopted. This principle has a special relevance in cases wherein the guilt of the accused is sought to be established by circumstantial evidence. Rule has accordingly been laid down that unless the evidence adduced in the case is consistent only with the hypothesis of the guilt of the accused and is inconsistent with that of his innocence, the court should refrain from recording a finding of guilt of the accused. It is also an accepted rule that in case, the court entertains reasonable doubt regarding the guilt of the accused, the accused must have the benefit of that doubt.
20. To find out, whether prosecution has proved whether G.S.Buttan (A-2) & Vijay Gupta (A-4), director of M/s. Iyer and Sons (P) Ltd. and M/s. Anil Steels accused who at present are facing trial before this court entered into a conspiracy with other accused persons S.S.Wadhwa (A-1) & Anil Aggarwal (A-3) (Proclaimed Offender), to cheat Oriental Bank of Commerce, Saket, relevant legal position as regards, what constitutes conspiracy may be noted at the inception.
21. Section 120-A defines criminal conspiracy as under:-
"Definition of criminal conspiracy-When two or more person agree to do, or cause to be done, (1)An illegal act, or (2)An act which is not illegal by illegal means, CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 25 out of 58 Unique ID No. 02401R019082001 such an agreement is designated a criminal conspiracy:Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof Explanation:-It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object."
22. Section 10 of the Indian Evidence Act reads as under:-
"10. Things said or done by conspirator in reference to common design:-
Where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to so conspiring, as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it."
23. Thus, Section 120-A adumbrated thereon Section 10 of the Indian Evidence Act gives legislative provisions applicable to conspiracy and its proof. An agreement, partnership, concert or league is the crux, of the offence. Conspiracy requires an act (actus reas) and an accompanying mental state (mens rea). From the definition of conspiracy in Section 120-A, it is evident that the agreement constitutes the 'act' and the intention to achieve unlawful object constitutes the 'mental state'. Then only all conspirators are liable for the crime committed in furtherance of the conspiracy besides being liable for committing an offence of conspiracy itself.
24. In a decision reported as State of Maharashtra & Ors. v. Som Nath Thapa & CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 26 out of 58 Unique ID No. 02401R019082001 Ors1. Supreme Court observed that for a person to conspire with another, he must have knowledge, but the law require something more. It is well settled that the offence of conspiracy requires 'some physical manifestation of agreement'. The law does not require that the act of agreement take any particular form and the fact of agreement may be communicated by words or conduct. The relative acts or conduct of the parties must be conscientious and clear to mark their concurrence as to what should be done. The concurrence cannot be inferred by a group of irrelevant facts artfully arranged so as to give an appearance of coherence. The innocuous, innocent or inadvertent events and incidents cannot be allowed to enter the judicial verdict. The court must thus be strictly on its guard.
Four fundamental requirements for proving conspiracy by way of circumstantial evidence which are well known are (I.) That the circumstances from which the conclusion is drawn be fully established; (II.) That all the facts should be consistent with the hypothesis of guilt; (III).That the circumstances should be of a conclusive nature and tendency; (IV).That the circumstances should, by a moral certainty, actually exclude every hypothesis but the one proposed to be proved;
25. In State (NCT of Delhi) v Navjot Sandhu 2, it was observed that "A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused in the offence of criminal conspiracy. Discussion of evidence.
26. Now, on the touchstone of the position of law noted above relevant portion of evidence brought on record by the parties is required to be considered to determine 1 (1996) 4 SCC 659
2. AIR 2005 SC 3820 CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 27 out of 58 Unique ID No. 02401R019082001 whether the alleged acts have been committed by the accused A-2 & A-4.
27. There is no dispute that Vijay Gupta (A-4) and Anil Aggarwal (A-3) were Directors of M/s Iyer and Sons (P) Ltd.(A-5) and Anil Steels Pvt. Ltd.(A-6) and M/s Iyer and Sons (P) Ltd. was having Current Account No1436 at Oriental Bank of Commerce, Saket, New Delhi which was allowed to be opened by S.S. Wadhwa (A-
1). There is also no dispute that M/s Iyer and Sons (P) Ltd.(A-5) was having cash credit account No.77 allowed by S.S. Wadhwa (A-1).
28. Allegations are that S.S.Wadhwa(A-1) fixed overdraft limit beyond his financial power of Rs.50,000/- in account No. 1436 without proper documentation. In his deposition, Sh.L.M.Soni (PW-6) deposed that in a case where Head Office or Regional Office already sanctioned the limit, the branch manager could not exercise his discretionary powers and Branch Manager could not provide advance facility beyond the facility sanctioned by the Regional Office/Head Office. PW-6 categorically deposed that the discretionary powers of the branch head at that time was Rs.50,000/- which could be utilized for day to day functioning of the bank including purchase of such cheque. After seeing ledger sheet of current account no. 1455 of M/s Haryana Gears (Ex.PW-6/D) and current account no. 1454 of M/s Anil Steel Pvt. Ltd. (Ex.PW6/C), PW-6 deposed that no advance facility was sanctioned in these account by the Regional Office/Head Office. PW-6 deposed that S.S.Wadhwa (A-1) was having discretionary power of Rs.50,000/- as Chief Manager of Saket Branch of OBC during the relevant period but he by exceeding his discretionary powers on various occasions by giving OD facility to the tune of Rs.8,36,075/- on 24th January 1993, Rs.9,13,842/- on 19th February 1993, Rs.23,57,618/- on 13th March, 1993, Rs.20,16,284/- on 19th March 1993. PW-6 deposed that in cash credit account CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 28 out of 58 Unique ID No. 02401R019082001 no.77 of M/s Iyer & Sons P. Ltd. cash credit facility of Rs.5 lacs sanctioned by accused S.S. Wadhwa which was confirmed by the Regional Office of the Bank for a period of three months vide letter dated 1st August 1995 (Ex.PW-2/A), vide letter dated 5th September 1995 sent by Regional Office to accused S.S. Wahwa, Chief Manager, Saket Branch of OBC it was informed to stop discounting of cheques in account of M/s Iyer and Sons P. Ltd. as the CC limit of Rs.5 lacs was sanctioned only for three months.
29. No prosecution witness has proved that there was no proper documentation. Sh.L.M.Soni PW-6 witness from OBC, Saket testified that S.S.Wadhwa (A-1) was having discretionary power of Rs.50,000/- during the relevant time, but he exceeded his discretionary power on various occasion by giving OD facilities in cash credit account No.77 of M/s Iyer and Sons (P) Ltd. Acts were allegedly committed by S.S. Wadhwa (A-1) and it appears that the remaining accused had no role to play in this act. There existed an equitable mortgage of immovable property no. 36 at Shyam Industrial Estate, Village and Pargana Loni, Distt. Ghaziabad, UP standing in the name of Shashi Gupta w/o Vijay Gupta and Ms. Vinki Gupta (Aggarwal) W/o Anil Aggarwal and value of the said property as per valuation report was Rs.36.00 lakhs. Letters dated 05.04.1995 (D-8) and 23.03.1995 were written by Chief Manager S.S.Wadhwa (A-1) to DGM. Prosecution witnesses have deposed that S.S.Wadhwa (A-1) exceeded his discretionary limit of Rs.50,000/-, that by itself would not, make other accused i.e. Vijay Gupta (A-4) and Ghanshyam Dass Buttan (A-2) a conspirator. Admittedly, Ghanshyam Dass Buttan (A-2), was not even in the picture at that time. In cross-examination, L.M.Soni (PW6) could not admit or deny the suggestion that security of M/s Iyer and Sons (P) Ltd. was kept in bank. In any case, CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 29 out of 58 Unique ID No. 02401R019082001 there is no other incriminating material on record to show role of other accused persons in the act of S.S. Wadhwa (A-1) exceeding his limit and power.
30. Next issue to be addressed is that whether S.S.Wadhwa (A-1) 'fraudulently and dishonestly' allowed co-accused to avail Over draft Facility in Current Account No.1436 and cash credit account No.77 in respect of M/s Iyer and Sons (P) Ltd. beyond his discretionary power and permitted them to transfer from Cash Credit account to Current Account. M/s Iyer and Sons (P) Ltd. was permitted to transfer amount from cash credit account to current account by S.S. Wadhwa (A-1). Accused other than (A-1) cannot be faulted on this count. S.S. Wadhwa (A-1) allowed co- accused to avail cash credit limit in Cash Credit Account No.77 beyond sanctioned limit of Rs.5.00 lacs sanctioned by Regional Office of the Bank for three months. Facility availed by M/s Iyer and Sons (P) Ltd., which exceeded the sanction limit and as on 28.07.1995 it was Rs.15,24,351/- and as on 30.10.1995 it was Rs.21,53,406/-.
31. On behalf of Vijay Gupta (A-4) as well as companies A-5, A-6 & A-7 who are being represented by A-4, it was submitted that bank had sufficient coverage in the form of deposit by way of FDs and equitable mortgage so there is no apprehension of causing loss to the Government Exchequer at any stage. No doubt, the bank manager had exceeded his authorities and as per letter dated 25 th May 1995, acts of the branch manager of extending the unauthorized credit facilities to accused persons were ratified by the bank. As per charge sheet as well as charges framed by this court, overdraft limits which were fixed were specified for instance as on 17.6.93 was Rs.41.25 lacs, as on 13.03.94 it was Rs.45 lacs and as on 8.5.95 it was Rs.25.8 lacs which imply with the overdraft limits being fixed by the bank were varying and were in proportion to the fixed deposit receipt. It was urged that it would show that the CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 30 out of 58 Unique ID No. 02401R019082001 firms M/s Iyer and Sons (P) Ltd. (A-5), had not gained any pecuniary advantage in grant of limits/credits and there was no loss to bank and Ex.PW-6/A would show that large sums of amount is being credited in the account of M/s Iyer and Sons (P) Ltd. in due course of business in the relevant year 1995-96 and as per the bank statement, itself as on 27.03.1996, debit balance was Rs.19,76,273.53p and on 31.03.1996 the account of the company was declared as NPA and even at that time equitable mortgaged with respect to the property Shyam Industrial Estate amounting to Rs.36.00 lakh of the said property with the bank, to secure the said due amount.
32. PW-9 S.K.Gauba, has testified about the power of branch manager for sanctioning cash credit limits and cheque discounting facility. It is submitted that PW- 9 S.K. Gauba testified that board of directors used to ratify/sanction the facility as and when the regional head and GM from Head Office exceed the power. It is submitted that STM 41 i.e. monthly reports giving the details of loans and advances of each month were regularly sent by S.S. Wadhwa (A-1) and there is nothing on record to show any objection thereto till receipt of letter dated 5.9.95 (Ex.PW-6/E) by regional office to accused S.S. Wadhwa (A-1). PW-9 denied knowledge regarding loan sanctioning power of Regional Office/Head Office to the group concerned firm. He deposed that branch manager had sanctioning power of term loan for the sum of Rs.10/15 lacs agaisnt the higher purchase of machinery etc. He deposed that cash credit limits was sanctioned by the Head Office to M/s Iyer & Sons and the branch manager had the power to sanction the cheque discounting facility up to 7.5 lacs.
33. PW-6 deposed in his cross-examination that collateral security means to mortgage some land or property or any assets of the borrower for securing the loan/advance. He could not admit or deny whether the collateral security of M/s Iyer CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 31 out of 58 Unique ID No. 02401R019082001 & Sons was kept in the bank or not. He denied the suggestion that sanction for loan cannot be obtained over telephone by some manager or Chief Manager. He further deposed in his cross-examination that he could not tell exact amount of loss which the bank has suffered on account of S.S. Wadhwa's act in this case. He deposed that he had no knowledge at this stage, if the dues of the borrowers have been settled by the bank or not in this case.
34. It is found that S.S. Wadhwa (A-1) allowed CC Account No.77 to be operated by Directors of M/s Iyer and Sons (P) Ltd. beyond its expiry date i.e. 17.09.1995 and continued to allow it till 25.02.1996. It is significant to note that these acts were apparently against and on the part of S.S.Wadhwa (A-1) only and no role is alleged on the part of Vijay Gupta (A-4) and Anil Aggarwal (A-3) and as far as the role of Ghanshyam Dass Buttan (A-2) is concerned, at that time, he was not remotely connected with the fact situation and had no role to play in Oriental Bank of Commerce, Saket.
35. PW-9 admitted that the permission of Manager was necessary to open a fresh account. S.S.Wadhwa, (A-1), branch manager, allowed opening of the Current Account No.1436 in respect of M/s Iyer and Sons (P) Ltd. on 7th December, 1992, [whose authorized signatories were (Vijay Gupta (A-4) and Anil Aggarwal (A-3)] No fault can be found by allowing M/s Iyer and Sons (P) Ltd. to open a current account by the branch manager and no illegality can be said to be committed by merely allowing opening of the current account in the branch by the branch manager.
36. On scrutiny of the material on record, this court finds no incriminating evidence against the accused persons to indicate any false entry in any books of bank/accounts maintained at Oriental Bank of Commerce, Saket Branch, Delhi. Thus, CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 32 out of 58 Unique ID No. 02401R019082001 the alleged falsification of accounts or ingredients of Section 477A are not attracted against any of the accused person.
37. Next fact-in-issue is whether on 21 st January, 1995 Ghanshyam Dass Buttan (A-2) dishonestly and fraudulently allowed Anil Aggarwal (PO) (A-3) to open current accounts No.22027 & 22028 in State Bank of India, Baithan Kalan, Mathura, UP with respect to fictitious firms M/s. Temple Tours, F-20, Cannuaght Place, New Delhi (under the proprietorship of Shyam Lal alleged non-existing person) and M/s Kosi Iron and Steels Works (under the proprietorship of Dharam Pal alleged non-existing person) and issued cheque books to Anil Aggarwal (A-3) (P.O.) containing cheques No.756551 to 756575 w.r.t M/s Temple Tours and containing cheques No.756576 to 756600 w.r.t M/s Kosi Iron and Steels Works.
38. This fact is not disputed by Ghanshyam Dass Buttan (A-2), that in the year 1995, he was posted and working as Manager, State Bank of India, Bathain Kalan, Mathura, UP. Evidence on record proves the fact that two current accounts i.e. account No.22027 in the name of M/s Temple Tours and account No.22028 in the name of M/s Kosi Iron and Steels Works were opened at State Bank of India Bathain Kalan, Mathura, UP on 21.01.1995 vide account opening form Ex.PW-12/A (D-47) and Ex.PW12/B (D-50). These accounts were opened by Jagdish Lal (PW14) clerk, in the said branch of the SBI, who testified that account opening forms bear signatures of Ghanshyam Dass Buttan (A-2). In his statement u/s 313 Cr.P.C., Ghanshyam Dass Buttan (A-2) has not disputed this fact. Address of M/s Temple Tours mentioned in the Current Account opening form Ex.PW-12/A is F-20, Cannuaght Place New Delhi, which bears signatures of Shyam Lal as Proprietor of the said firm and address of M/s Kosi Iron and Steels Works mentioned in the current CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 33 out of 58 Unique ID No. 02401R019082001 account opening form Ex.PW-12/D is Z-236 Loha Mandi, Naraina, New Delhi, which bears signatures of Dharam Pal as proprietor of the said firm.
39. In this context, Jagdish Lal (PW-14) official of SBI Bathain Kalan Mathura Branch deposed that he did not know name of the person who opened the account in the name of M/s Kosi Iron & Steel Works in Bathain kala Branch, Dist. Mathura of SBI. He deposed that an application Ex.PW-7/3 for opening an account in the name of M/s Kosi Iron & Steel Works had come before him and as per application, it was submitted by one Dharampal, for issuance of a cheque book. Cheque book bearing serial no. 756576 to 756600 was issued. In his deposition, PW-14 stated that cheque book in relation to these cheques was issued for current account no. 22028, in relation to application to Ex.PW-7/3. PW-14 deposed that this account holder of current account no. 22028 was introduced by the Bank Manager Mr. G.D. Buttan (A-
2) who had verified the signatures of account holder as per Ex.PW-12/D. In the cross-examination, PW-14 Jagdish Lal stated that if, branch manager knew the person who come for opening an account, he might introduce the person for opening the account. PW-14 admitted that he was posted at Baithan Kala Branch before the posting of Ghanshyam Dass Buttan (A-2) there. PW-14 further categorically admitted that because the said branch was in a village, there was a pressure from Zonal Office for maximum deposits and opening of accounts and branch manager used to make efforts for getting accounts opened even from persons residing outside Baithan Kala.
40. Testimony of M.M. Sharma (PW-7) who in the year 1995 was the account assistant with M/s Iyer and Sons (P) Ltd. shows that he (PW-7) had filled up the name of the company, address and date in both the account opening forms Ex.PW- 12/A & EX.PW-12/B and the same was in handwriting and written at the instance of CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 34 out of 58 Unique ID No. 02401R019082001 Anil Aggarwal along with whom, he had visited Bathain Kalan Branch, District Mathura of SBI. PW-7 M.M. Sharma had written request letters Ex.PW-7/3 & Ex.PW- 7/4 for issuance of cheque book pertaining to the aforesaid two current account Nos.22027 & 22028 as instructed by Anil Aggarwal. In his deposition, M.M. Sharma (PW-7) stated that In the month of January, 1995 he visited Bathain Kalan Dist. Mathura with Anil Aggarwal as he had to open bank account there in State Bank of India branch. When they reached in the bank, he was provided two bank account opening forms by Anil Aggarwal. PW-7 filled up the forms and gave back the same to Anil Aggarwal. On seeing account opening forms (Ex. PW12/A and PW12/B), PW-7 testified that on both the forms name of the company, address and date were in his handwriting. On seeing (Ex.PW7/3 and PW7/4) letters for issuance of cheque books, PW-7 stated that letters were in his handwriting and were written by him as instructed by Anil Aggarwal (A-3) director of A-5 did not know who had put signatures there on as proprietor. PW-7 stated that signature were not put in his presence.
41. On asking, M.M. Sharma (PW-7) did not know if Anil Aggarwal (A-3) already knew branch manager Bethan Kalan Dist. Mathura or not. This witness was put questions in the nature of cross-examination under section 154 Indian Evidence Act by learned prosecutor. PW-7 stated that one former chief accountant of Iyer & Sons Ltd Mr. R. N. Buttan employee who was already working with the old management had accompanied them and Later on, he came to know that Mr. R. N. Buttan was brother of branch manager. In the cross-examination, PW-7 admitted that he had no direct or indirect dealing and interaction with the directors of M/s Kosi Iron and Steel Works as well as M/s Temple Tours. On asking, he did not know who were the directors of the above said two firms. He stated that there were two persons Anil CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 35 out of 58 Unique ID No. 02401R019082001 Aggarwal and R. N. Buttan sitting in the cabin of branch manager besides two or three other persons but he did not know them. PW-7 testified that after filling of the account opening form, he handed over the same to the Anil Aggarwal in the cabin and returned back and thereafter, he did not know what happened inside. He did not know, when Anil Aggarwal got the signatures on those applications of director of M/s Kosi Iron and Steel work or M/s Temple Tours. PW-7 testified that he used to do all the official work given to him by Anil Aggarwal. PW-7 deposed that the management of Anil Aggrawal and Vijay Gupta had taken over the charge of M/s Iyer and Sons in the year 1985 and Mr. R. N. Buttan, (who had accompanied Anil Aggarwal and M.M. Sharma to Bathain Kalan Branch SBI, in the year 1995) had left and resigned from the employment of M/s Iyer and Sons before the management thereof was taken over by Anil Aggrawal and Vijay Gupta in 1985 year and Shri R. N. Buttan was the friend of Anil Aggarwal and therefore he used to visit him.
42. Sh.V.M. Mittal (PW-20), who investigated the case, in his deposition admitted that at the time of opening of accounts of Temple Tours and Kosi Iron and Steels, addresses of these companies had been given and that addresses mentioned were in existence. After seeing Ex.PW-12/C PW-20 deposed that at the time of opening of accounts of Kosi Iron and Steels and Temple Tours, cash of Rs.5,000/- was deposited in the account. PW-20 further deposed that the persons who had opened two accounts No.22027 and 22028 could not be traced out and it was not verified whether the persons were alive or not. PW-20 deposed that these two accounts were operated by Mr. Anil Aggarwal (A-3) and his employee M.M.Sharma. PW-20 admitted that if there is a credit amount in an account, the bank would permit withdrawal of the amount available in the account or or lesser amount.PW-20 admitted that account CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 36 out of 58 Unique ID No. 02401R019082001 opening form Ex.PW-12/A for Temple Tours and Ex.PW-12/D account opening form of Kosi Iron and Steels Works were not signed by Vijay Gupta (A-4). He deposed that he did not recall whether Vijay Gupta (A-4) never went to Ghanshyam Dass (A-2) for making any request for opening any account or any transaction.
43. Dishonestly as defined in Section 24 IPC demands doing of anything with the intention of causing wrongful gain to one person or wrongful loss to another person. Similarly the word fraudulently as noted in Section 25 IPC states that a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise. What emerges from the testimony of the PW-7 and PW-14 is that Ghanshyam Dass Buttan (A-2) had introduced the account holder of current account No.22028 in the name of Kosi Iron and Steels Works and had verified the signatures of the account holder in the account opening form as per Ex.PW-12/D. Prosecution witness having clearly stated that Branch Manager could introduce any person who comes to the bank for opening an account. Meaning thereby that it was not a wrongful act on the part of G.D. Buttan (A-2). Account opening form Ex.PW-12/A and Ex.PW-12/B as well as the application for issuance of cheques for the said firms were filled in by M.M.Sharma (PW-7) at the instructions of Anil Aggarwal (A-3). Anil Aggarwal (A3) had accompanied M.M.Sharma (PW-7) at Bathain Kalan Branch and Sh.R.N. Buttan brother of Ghanshyam Dass Buttan (A-2). Anil Aggarwal was the friend of R.N. Buttan, who was the former employee of the M/s Iyer and Sons (P) Ltd. No prosecution witness has specifically deposed regarding signing of the current account opening form by Anil Aggarwal (A-3), Ghanshyam Dass Buttan (A-2) or M.M.Sharma (PW-7) or Vijay Gupta (A-4). Neither (PW-7) nor any other PW has deposed or has thrown light on the fact regarding, as to when or at what point of time Anil CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 37 out of 58 Unique ID No. 02401R019082001 Aggarwal (A-3) had obtained signature on the application of the Proprietors of M/s Kosi Iron and Steels Works and M/s Temple Tours. In his deposition as per (PW-7) there were two or three other persons who were sitting in the cabin of the branch manager apart from Anil Aggarwal (A-3) and R.N. Buttan (Brother of G.D. Buttan A-
2), whereas M.M.Sharma (PW-7) was waiting outside. Admittedly, Vijay Gupta (A-4) had not signed or filled account opening form or any other application or documents. He has been shown to have been associated in the process of opening the account or issuance of the cheque book at Bathain Kalan, Mathura, UP or having given any instructions to M.M. Sharma (PW-7).The Bathain Kalan Branch whose manager was Ghanshyam Dass Buttan (A-2) was situated in the village and there was pressure from the Zonal office for maximum deposit and opening of accounts so the branch manager used to make efforts for getting accounts opened even from person residing outside.
44. Scrutiny of testimony of M.M. Sharma (PW-7), employee of M/s Iyer and Sons (P) Ltd. reveals that there were two or three other persons sitting in the cabin of the branch manager at SBI, Bathain Kalan, Mathura (UP), apart from Anil Aggarwal and R.N.Buttan, whereas M.M. Sharma was sitting outside. PW-14 has deposed that as per application, it had been submitted by one Dharampal, for issuance of a cheque book, which was issued, bearing serial no. 756576 to 756600. In the absence of any other additional incriminating evidence, it can not be held that Dharam Pal and Shyam Lal proprietors of M/s Temple Tours and Kosi Iron and Steels Works were not present there or were non-existing person. PW-20 IO Mr.V.M. Mittal in his deposition has stated that as the person who had opened these two account No.22027 and 22028 could not be traced out, it could not be verified whether the person opened these accounts were alive or CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 38 out of 58 Unique ID No. 02401R019082001 not. It is submitted that therefore the IO himself has not emphatically and positively stated that those persons were non-existing person. In his statement u/s 313 Cr.P.C. Ghanshyam Dass Buttan (A-2) stated that at that time there was no requirement of getting the photograph and the verification of the identity and address furnished by the new customers. Dharampal and Shyam Lal had represented to him that M/s Iyer and Sons Pvt. Ltd. was their sister concern having a good business at Delhi and that the money collected by their firms from the Kosikalan and the nearby area would be deposited in their branch. He was persuaded by the said representatives and as that his branch was a very small branch and there was paucity of funds and to fulfill the target, therefore, he had introduced the new customer in the hope that funds would be generated and no facility in the nature of loan or credit or overdraft was provided by me to the aforesaid customers. He stated that his acts were bonafide.
45. As regards the contention of learned prosecutor, that the addresses mentioned in the current account opening form of M/s Temple Tours and M/s Kosi Iron and Steels Works were F-20 Cannuaght Place and Z-236 Loha Mandi Naraina, New Delhi, which were the addresses of M/s Iyer and Sons (P) Ltd. and M/s Anil Steels respectively and whose one of the director was Anil Aggarwal (A-3) and therefore, there was link between the said firms and the account was opened by Anil Aggarwal (A-3) in the name of fictitious firms, IO V.M.Mittal (PW-20) admitted that the said addresses were in existence and many firms could have one address. It is submitted that the said buildings were having many firms and offices and that no investigation has been conducted by the IO to find out whether actually the said buildings /addresses were incorrectly mentioned by the account opening firms i.e. m/s Temple Tours and M/s Kosi Iron and Steels Works. It is further submitted that CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 39 out of 58 Unique ID No. 02401R019082001 during the relevant period in the year 1995 there was no requirement of production of the proof of address or verification of the address furnished by the account holder/person who was opening the account in the bank., In this regard, V.M. Mittal PW-20 on asking, expressed ignorance about this fact and deposed that he could not say, whether in the year 1995, there was no requirement of production of proof of address for opening an account in any bank anywhere in India. It cannot be held that Ghanshyam Dass Buttan (A-2) allowed Anil Aggarwal (A-3) (PO) to open the aforesaid two accounts dishonestly and fraudulently and it cannot be held beyond the shadow reasonable doubts that Dharam Pal and Shyam Lal proprietors of the aforesaid two firms M/s Temple Tours and M/s Kosi Iron and Steels Works were non- existing persons.
46. On consideration of entire evidence on record and broader probabilities, this court finds that prosecution has failed to established beyond doubt any dishonesty or fraud on the part of Ghanshyam Dass Buttan (A-2) in opening current accounts No.22027 & 22028 in State Bank of India, Baithan Kalan, Mathura, UP. It has not been established beyond doubt that the proprietorship firms M/s Temple Tours whose proprietor was Shyam Lal and M/s Kosi Iron and Steels Works whose proprietor was Dharam Pal were fictitious firms. It cannot be held beyond reasonable doubt that Ghanshyam Dass Buttan (A-2) allowed Anil Aggarwal (A-3) opening of the aforesaid two accounts dishonestly and/or fraudulently. At best, Anil Aggarwal (A-3) facilitated opening of two accounts. Furthermore, it is the case of the prosecution itself as well as prosecution witnesses have categorically deposed that the cheques of M/s Temple Tours and M/s Kosi Iron and Steels Works, which were wrongfully discounted by S.S.Wadhwa (A-1) were neither dispatched to the SBI, Bathain Kalan, Mathura (UP) CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 40 out of 58 Unique ID No. 02401R019082001 nor had been received by Ghanshyam Dass Buttan (A-2).
47. This Court finds that it cannot be held that Ghanshyam Dass Buttan (A-2) adopted any corrupt or illegal means or abused his official position in causing any pecuniary advantage for co-accused Anil Aggarwal (A-3) (PO) and Vijay Gupta (A-4) or any of the accused companies. Thus, charge against Ghanshyam Dass Buttan (A-
2) have not been proved.
Role of Vijay Gupta (A-4)
48. In his deposition Investigating officer V.M.Mittal (PW-20) admitted that account opening form Ex.PW-12/A for Temple Tours and Ex.PW-12/D account opening form of Kosi Iron and Steels Works were not signed by Vijay Gupta (A-4). PW-20/IO or PW-7 M.M.Sharma or any other prosecution witness has not uttered that Vijay Gupta (A-4) ever met Ghanshyam Dass (A-2) or went to Bathain Kalan, Mathura with Anil Aggarwal (A-3) for making any request for opening any account or instructing M.M.Sharma (PW-7) employee of M/s Iyer and Sons (P) Ltd. in carrying on any transaction on behalf of the company. There is nothing on record to indicate any nexus of Vijay Gupta (A-4) with Shyam Lal or Dharam Pal. Furthermore, PW-19 T.Muthuraman admitted that Vijay Gupta (A-4) had never asked him for issuance of any blank cheque or any favour. No liability can be fastened on Vijay Gupta (A-4) in allowing and enhancing cash credit facilities/limits by S.S.Wadhwa (A-1) to the firms M/s Iyer and Sons (P) Ltd. and M/s Anil Steels Pvt. Ltd. only because he was the director of those firms. There is nothing on record to show that any objection was raised or brought to the notice of A-4, by any officer of the OBC regarding the acts/omissions of S.S.Wadhwa (A-1) or of any other person.
49. On appreciation of evidence on record, this court finds that prosecution has CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 41 out of 58 Unique ID No. 02401R019082001 failed to established that Vijay Gupta (A-4) procured two signed blank cheques No.984644 & Cheque No.984645 both drawn on Canara Bank, Ayyampat, Tanjavur, Tamil Nadu from the account No.6058 of Ms. M. Vijayan through D.T. Tulsi Raman, father of their employee Sh. T. Muthuraman on the premise of his promotion in M/s Iyer and Sons (P) Ltd. There is nothing on record to show that Vijay Gupta (A-4), Director of M/s Iyer and Sons (P) Ltd. and M/s Anil Steels Pvt. Ltd. played any role in submitting cheques No.984644 & Cheque No.984645 to S.S. Wadhwa (A-1) for discounting/purchasing. There is not an iota of evidence to indicate any connection of Vijay Gupta (A-4) in making effort for purchasing of cheque No.984645 dated 13.11.1995 for Rs.5,42,835/- from S.S. Wadhwa (A-1) or Oriental Bank of Commerce and/or crediting the amount in Current Account No.1405 of M/s A.Kumar & Company. There is also nothing on record to show any connection of Vijay Gupta (A-4) with M/s A. Kumar and Company and M/s Ram Kumar and Brothers or in purchasing cheque No.984644 dated 11.11.1995 for Rs.3,72,750/- in Current Account No.1406 of M/s Ram Kumar & Brothers. There is no incriminating evidence on record to show that Vijay Gupta (A-4) had withdrawn the amount of Rs.5,35,000/- and Rs.3,65,000/- from these accounts on 13.11.1995. It has not been established on record that Vijay Gupta (A-4) himself with M/s Iyer and Sons (P) Ltd.(A-5), M/s Anil Steels (P) Ltd. (A-
6) and M/s Haryana Gears along with Anil Aggarwal (A-3) (PO) during the aforesaid period and place cheated Oriental Bank of Commerce, Saket, New Delhi by dishonestly inducing it to deliver property of the bank i.e. an amount of Rs.43,37,172/-, which was the property of the Bank.
Liability of Haryana Gears, partnership firm.
50. Case of the prosecution is that Current Account No. 1455 was opened on CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 42 out of 58 Unique ID No. 02401R019082001 15.01.1993 in the name of M/s Haryana Gears on the introduction of S.S. Wadhwa (A-1) and during the year 1995-96 two cheques drawn on SBI, Bathain Kalan, Mathura (UP) were purchased on 27.04.1995 returned unpaid on 28.07.1995 with result outstanding in this account is Rs.5.93 lakhs. No fault can be found in the act of S.S.Wadhwa (A-1) allowing opening of current account No.1455 in respect of M/s Haryana Gears with Anil Aggarwal (A-3) as partner on 15.01.1993 in Oriental Bank of Commerce, Saket, New Delhi.
51. The legal position is well settled that under the Indian Partnership Act, 'firm' or 'partnership' is not a legal entity, but merely an association of persons agreed to carry on business. It is only a collective name for individuals carrying on business in partnership. The essential characteristic of a firm is, that each partner is a representative of other partner. Each of the partner is an agent as well as principal. He is an agent insofar as he can bind the other partners by his acts within the scope of the partnership agreement. He is principal to the extent that he is bound by the acts of other partners.
52. As per section 25 of Partnership Act "Every partner is liable jointly with all the other partners and also severally, -for all acts of the firm while he is a partner". Section 26 of partnership act states that Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefore to the same extent as the partner. Thus, every partner is liable for an 'act of the firm'. 'Act of a firm' has been defined to mean 'any act or omission by all the partners or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm', but this is the civil liability of the firm and its partners. There is CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 43 out of 58 Unique ID No. 02401R019082001 nothing in the partnership Act making all the partners of a firm liable for the criminal offences whether they do business or not.
53. In the instant case, this court is concerned with criminal liability of the firm M/s Haryana Gears. under penal provisions and not civil liability of the partners. There is no vicarious liability in criminal law unless the statute takes that also within its fold. At best, the partners who are incharge of the business of the firm when the alleged offence was committed, may be liable for that offence and not the other partners who are in no way connected with the business of the firm" In the present case there is nothing on record to show that any role was played by Smt. Shashi Gupta. It has come on record that she has expired on 15th December, 2013 i.e. during trial of this case. Other partner Anil Aggarwal has already been declared a Proclaimed Offender. In view of the settled legal position, no criminal liability can be fastened upon the firm M/s Haryana Gears, which is not a legal entity as well as upon Vijay Gupta (A-4) who was representing the said firm during trial of this case and is the husband of partner late Smt. Shashi Gupta.
Liability of companies.
54. In Sunil Bharti Mittal Vs. CBI 3, another case Iridium India Telecom Ltd. v. Motorola Inc4's case was referred wherein question which fell directly for consideration, was whether a company could be prosecuted for an offence which required 'mens rea' it was observed:
Lord Denning in Bolton (H.L.) (Engg.) Co. Ltd. v. T.J. Graham & Sons Ltd.: (AC p.172): observed." A company may in many ways be likened to a human body. They have a brain and a nerve centre which controls what they do. They also have hands which hold the tools and act in 3 ILC-2015-SC-CRL-Jan-6 4 (2011) 1 SCC 74 CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 44 out of 58 Unique ID No. 02401R019082001 accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will.
Others are directors and managers who represent the directing mind and will of the company, and control what they do. The state of mind of these managers is the state of mind of the company and is treated by the law as such. So you will find that in cases where the law requires personal fault as a condition of liability in tort, the fault of the manager will be the personalfault of the company. That is made clear in Lord Haldane's speech in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. (AC at pp 713, 714). So also in the criminal law, in cases where the law requires a guilty mind as a condition of a criminal offence, the guilty mind of the directors or the managers will render the company themselves guilty."
In stating the principle of corporate liability for criminal offences, Lord Reid made the following statement of law:
"I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 45 out of 58 Unique ID No. 02401R019082001 vicarious liability."
55. The legal position in India has been clearly stated by the Constitution Bench judgment of Supreme Court in Standard Chartered Bank v. Directorate of Enforcement (2005) 4 SCC 530 . On a detailed consideration of the entire body of case laws in this country as well as other jurisdictions, it was observed that there is no dispute that a company is liable to be prosecuted and punished for criminal offences. Although there are earlier authorities to the effect that corporations cannot commit a crime, the generally accepted modern rule is that except for such crimes as a corporation is held incapable of committing by reason of the fact that they involve personal malicious intent, a corporation may be subject to indictment or other criminal process, although the criminal act is committed through its agents."
"It is abundantly clear from the above that the principle which is laid down is to the effect that the criminal intent of the "alter ego"of the company, that is the personal group of persons that guide the business of the company, would be imputed to the company/corporation. The legal proposition that is laid down in the aforesaid judgment is that if the person or group of persons who control the affairs of the company commit an offence with a criminal intent, their criminality can be imputed to the company as well as they are "alter ego" of the company."
56. Perusal of the testimony of the prosecution witnesses shows that S.S. Wadhwa (A-1) was not empowered to purchase cheques in question. He did not obtain permission of the regional office to purchase the cheques. According to PW-6, vide letter dated 5th September, 1995 sent by Regional Office, S.S.Wadhwa (A-1) was informed to stop discounting of cheques. L.M. Soni PW-6 in his deposition explained the meaning of cheque discounting facility. He deposed that cheque discounting facility means that the bank purchases the cheque issued by some third party in favour of customer; the credit of the cheque amount is given to the customer immediately after deducting some service charge and thereafter the cheque is sent to CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 46 out of 58 Unique ID No. 02401R019082001 the respective branch for collection of payment. Cheque discounting is always done against a proper limit which is already sanctioned in favour of the customer on the basis of some security given by the customer. What has clearly emerged on record is that Anil Aggarwal (A-3) director of A-5 & A-6 companies was present at SBI, Bathain Kalan Branch, Mathura (UP) at the time of opening of two current accounts and the current account opening forms of account No.22027 & 22028 were filled by M.M.Sharma (PW-7). It has been established that cheque book containing cheques No.756551 to 756575 w.r.t M/s Temple Tours and cheque book containing cheques No.756576 to 756600 w.r.t M/s Kosi Iron and Steels Works was issued pursuant to the writing of the application by M.M.Sharma (PW-7) employee of M/s Iyer and Sons (P) Ltd. at the instance of Anil Aggarwal (A-3) Director of M/s Iyer and Sons (P) Ltd. and Anil Steels Pvt. Ltd. Cheques in question were not sent to SBI, Bathain Kalan, Mathura (UP), for collection and none of the cheques were received at SBI, Bathain Kalan, Mathura (UP) for collection. Although, this court has found that it cannot be held beyond reasonable doubt that Dharampal and Shyam Lal were not the fictitious persons yet It has already been noted that Anil Aggarwal (A-3) director of M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6) had gone to SBI, Bathain Kalan, Mathura (UP) at the time of opening of the accounts of M/s Temple Tours and M/s Kosi Iron and Steels Works on 21 st January, 1995 and address of M/s Temple Tours i.e. F-20 Cannaught Place, Delhi was also the address of M/s Iyer and Sons (P) Ltd.(A-5) and the address i.e. Z-236 Loha Mandi Narayana was also the address of M/s Haryana Gears (A-7), which shows some nexus of Anil Aggarwal (A-3) for himself and of the companies in which he was director. Furthermore, there is nothing on record to show that these firms had carried on any business activity or had any CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 47 out of 58 Unique ID No. 02401R019082001 business transaction with M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6). S.S. Wadhwa (A-1) unauthorizedly purchased in the account of M/s Iyer & Sons (P) Ltd (A-5) two cheques issued from the cheque book from the Current Account No.22027 of M/s Temple Tours i.e. Cheque No. 756555 dated 26.07.1995 for Rs.6.25 lacs on 27.07.1995 and Cheque No.756556 dated 22.08.1995 for Rs.5,28,375/- on 24.08.1995 both drawn on SBI, Bathain Kalan, Mathura, (UP) and three more cheques were purchased by S.S. Wadhwa (A-1) i.e. cheque No.756581 and discounted in the account of M/s Anil Steels Pvt. Ltd. (A-6) and cheque No.756580 and cheque No.756582 discounted in the account of M/s Haryana Gears were from the cheque book issued in the account No.22028 of M/s Kosi Iron and Steels Works Ltd.
57. L.M.Soni (PW-6) placed on record credit slips of M/s Iyer & Sons Pvt. Ltd Ex.PW-6/A1 and A2. He placed on record relevant statement of account of M/s Anil Steet Pvt. Ltd Ex.PW-6/C and relevant credit slip Ex.PW-6/C1, relevant statement of account of M/s Haryana Gears Pvt. Ltd. comprising two sheets Ex.PW-6/D and relevant credit slip Ex.PW-6/D1. He deposed that there is no entry in the dispatch register Ex.PW-1/A regarding sending of these four cheques for collection. He deposed that during his tenure the accounts of these three firms remained outstanding and the four cheques remained continued un-realised. On seeing Ex.PW-6/D, PW-6 deposed that there is an entry dated 27 th April 1995 as per which the cheque was discounted and a credit of Rs.10,60,000/- has been given to the party. Out of this amount, a sum of Rs.10,50,000/- was transferred on the same date to the account of M/s Wadhwa Pharma Chem and saving account of Sh. J.S. Maan Chanda. Later on that is after using the money for 71 days, the DD was reversed by CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 48 out of 58 Unique ID No. 02401R019082001 debiting the account of the party for the sum of Rs.10,60,000/-. Ultimately the amount of Rs.10,60,000/- was transferred from the account of Iyer & Sons Pvt. Ltd. without any balance on that day. The relevant entry dated 28th July 1995 is reflected in the statement of account of M/s Iyer & Sons Pvt. Ltd. Ex.PW-6/A.
58. In his deposition, M.Vijaya (PW-18) Teacher in Education Department stated that he gave two blank cheques to her family friend Mr. D.T.Tulsiraman who had retired in 1998. He identified her signatures on Mark PW-18/1 and Mark PW-18/2 but denied her signatures on Mark PW-18/3 for opening an account. She deposed that Mr. Tulsiraman had asked her for two blank cheques saying that he needed those blank cheques. PW-18 deposed that she did not asked him why he needed those blank cheues as he was a god father figured for her but he misused those two blank cheques. She deposed that she had signed those two blank cheques. PW-18 deposed that he filled in the two cheques for amounts of Rs. 3 lacs each. She deposed that clerk inquired from her and told her that there was no money in her account and why she had given blank cheques. PW-18 deposed that she did not know who filled in the amount of Rs.3 lacs each in those blank cheques i.e. whether it was filled in by Mr. Tulsiraman or by some other person. She deposed that cheque book had been issued by bank to her and had been collected by her. PW-18 deposed that she do not know any person by name Anil Kumar. PW-18 identify D-57 to be her cheque book of Canara Bank. She also identified cheque Ex.PW-18/B i.e. Cheque no. 984650 as being part of her cheque book Ex.PW-18/A and denied her signatures on Ex.PW-18/B. She deposed that she had handed over cheque book Ex.PW-18/A to CBI and she had opened her account in Canara Bank on 5 th July 1977.
59. As per record, Bank A/C No. 1405 was opened on 28.09.92 at OBC Saket in CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 49 out of 58 Unique ID No. 02401R019082001 the name of M/s A Kumar & Co. by Anil Kumar as proprietor. Anil Kasturia PW-16 Anil Kasturia deposed that he knew Anil Aggarwal who had a travel agency in the name of M/s Iyer & Sons, Connaught Place, New Delhi. He knew Mr.Anil as both of them were members of Roshnara Club and had visited Kathmandu 2/4 times along with Mr.Anil in 1992, 1993 and 1994. He deposed that Iyer & Sons dealt in tours and travels. He deposed that he had a bank account in Overseas Bank again said OBC, Saket in the name of M/s A.Kumar and Company of his own accord. He admitted his signatures on slip Ex.PW-4/B and attached account opening form Ex.PW-4/A. He deposited Rs.5 lacs in the account given to him by Mr. Anil Aggarwal and deposed that he might have given a cheque to someone to withdraw the money from this account and most probably to Mr. Anil Aggarwal. PW-16 deposed that cheque book which had been given to him when this account was opened, was misplaced or it may have been left at the office of Iyer & Sons where he used to go. He volunteered that only when CBI officials came to him and asked him whether he had issued some cheques, did he came to know that he had misplaced his cheque book and he found that the signatures on the cheques were not of him. He did not recall his account number. He deposed that he had not operated his account much and volunteered that Mr. Anil Aggarwal may have operated this account without his knowledge. As per Ex.PW-4/A the account opening form, the account no. 1405 and as per Mark PW-16/1 the account no. 1405, but addresses are different. He deposed that his connection with Mr. Anil Aggarwal ended in 1995-96. PW-16 deposed that he had never discounted any cheques received from any company. After seeing cheque Ex.PW-4/C, PW-16 denied his signatures thereon and he do not know who had signed this cheque as his signature. He deposed that signature at Q-22 on the reverse of Ex.PW-4/C were not CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 50 out of 58 Unique ID No. 02401R019082001 his. PW-6 deposed that no money was transferred into his account.
60. In his deposition PW-19 T.Muthu Raman, Ticket Reservation Operator of M/s Iyer and Sons (A-5) clearly deposed that on asking of M.M. Sharma (PW-7 another employee of M/s Iyer and Sons (P) Ltd.), he gave some blank 2/3 cheques as a consequence of which he was given promotion. PW-19 did not know for what rotation purpose those blank cheques were needed by Mr. M.M. Sharma as he did not told him amount needed nor did he tell him when he would return the money. PW-19 deposed that he called for those blank cheques from his father and told him that he had been told that he would be given a promotion and an increment on giving those blank cheques. PW-19 further testified that those cheques were issued from the account of friend of his father, M.Vijaya and those cheques were taken by Mr. M.M. Sharma when received from courier who deposited those cheques in bank for a big amount. PW-19 further deposed that his father then telephoned him and M/s Iyer and sons (A-5) that the cheques received were of very large amount but his father did not inform him the amount. PW-19 deposed that Mr.Sharma then stated that if there was a problem he would look after it and we would have no problem. PW-19 further deposed that though Mr. M.M.Sharma asked him for more cheques, he had refused to give the same. PW-19 deposed that thereafter he resigned from M/s Iyer and Sons in 1997. During cross-examination, PW-19 admitted that he was not aware of the constitution of M/s Anil Steels nor he knew when the company M/s Anil Steel started or closed nor aware as to from where it was functioning.
61. As regards the point as to whether S.S. Wadhwa (A-1) dishonestly and fraudulently debited a sum of Rs.10.00 lacs from Current Account No.1754 of M/s Intergest International Limited and credited the same to Current Account No.1436 of CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 51 out of 58 Unique ID No. 02401R019082001 M/s Iyer and Sons (P) Ltd. and prepared false account willfully, PW-3 Deepak Babbar has categorically stated that their company M/s Intergest India International Ltd. had not issued any cheque or letter for debit of Rs.10.00 lakh on 29 th June, 1995 and the said debit was unauthorized, which fact was conveyed to the OBC vide Ex.PW-3/B. PW-3 further deposed that transfer voucher dated 29 th June, 1995 Ex.PW-10/A(D-
59), vide which the amount was debited from their current account No.1754, the amount of Rs.10.00 lakhs was debited as well as the voucher Ex.PW-10/B (D-62) does not bears signatures of Rajeev Gosain, President of the Company. PW-3 specifically stated that their company M/s Intergest India International Ltd. had no transaction with M/s Iyer and Sons (P) Ltd. (A-5) at any point of time. There is nothing in the cross-examination on behalf of accused company A-5.
62. Bank Account Statement Ex.PW-6/A of M/s Iyer & Sons and credit transfer voucher Ex.PW-8/2 in the sum of Rs.21,60,587/- in the handwriting of Manoj Wal (PW-8) shows transfer of the said amount in the CC A/C No. 77 of M/s Iyer & Sons. In his deposition, PW-8 Manoj Wal has stated that debit transfer voucher dated 27 th July 1995 for a total sum of Rs.33,00,502/- was in his handwriting and in the name of DD in hand, banks head for discounting of cheques. The bank account statement Ex.PW-6/A shows the debiting of the aforesaid sum. Further more, voucher dated 24.08.95 (Ex.PW-8/6) in the sum of Rs.9,63,473/- is in the handwriting of Manoj Wal (PW-8) and the amount credited therein is by discounting of cheque by DD No. 69/95 and 70/95 and the amount was credited in favour of M/s Iyer & Sons P. Ltd. which is reflected also from Bank Account Statement (Ex.PW-6/A)(D-12). He deposed that he had seen the entries on page no.72 pertaining to cheque dated 26th July 1995 for Rs.6,25,000/- and cheque dated 27th July 1995 for Rs.6,15,502/-. Similarly he had CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 52 out of 58 Unique ID No. 02401R019082001 seen entries at page no.74 pertaining to cheque dated 22nd August 1995 for Rs.5,28,375/- and cheque dated 21st August 1995 for Rs.5,92,710/-. PW-6 deposed that all these four cheques were discounted on the orders of accused S.S. Wadhwa who was the branch head at that time. Accused S.S. Wadhwa (A-1) was not authorized to discount these cheques beneficiary of which in this case were clearly M/s Iyer & sons Pvt. Ltd and Anil Steel Pvt. Ltd in whose favour four cheques were respectively issued, did not have any cheque discounting limit.
63. Scrutiny of material on record shows that current Account No. 1454 was opened on 15.01.1993 in the name of M/s Anil Steels and A cheque for Rs.6.15 lakhs drawn on SBI, Bathain Kalan, Mathura (UP)was purchased by S.S. Wadhwa (A-1) on 27.07.1995 and said amount was outstanding as the cheque was not realised. Four cheques purchased in the account of M/s Iyer and Sons (P) Ltd. and in the account M/s Anil Steels are from the same cheque book issued by SBI, Bathain Kalan, Mathura (UP). Prosecution witnesses have clearly deposed that accused S.S. Wadhwa (A-1) did not sent these cheques for collection after giving the credit for these cheques in the respective accounts of M/s Iyer & Sons Pvt. Ltd. (A-5) Anil Steel Pvt. Ltd.(A-6) on 27th July 1995 & 24th August 1995 respectively. There is no record in the Saket Branch of OBC to show that these cheques were dispatched to SBI, Bathain Kalan, Mathura (UP) and SBI, Bathain Kalan, Mathura (UP) have not received these cheques. S.S.Wadhwa (A-1) allowed opening of current account No.1454 and PW-9 placed on record account opening form Ex.PW-9/4 and specimen signature card of M/s Anil Steels. Anil Steels (P) Ltd. having Anil Aggarwal (A-3) & Vijay Gupta (A-4) as its Director on 15.01.1993 in Oriental Bank of Commerce, Saket, New Delhi. PW-6 L.M,Soni placed on record statement of account Ex.PW-6/C of M/s CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 53 out of 58 Unique ID No. 02401R019082001 Anil Steel Pvt. Ltd and relevant credit Slip Ex.PW-6/C1. PW-6 deposed that no advance facility was sanctioned by the Regional Office in this case. PW-9 placed on record Credit transfer voucher Ex.PW-9/6 of current account No.1454 in the name of M/s Anil Steel Pvt. Ltd. dated 27.07.1995 in the sum of Rs.6,07,235/- and receipt memo dated 06.06.1997 Ex.PW-9/7. Sanjeev Kumar (PW-21) has deposed that there was no entry of dispatch DD No. 53/95 dated 27.07.1995 for Rs.6,15,502/- of M/s. Anil Steels Pvt. Ltd., for sending the same to SBI, Bathain Kalan, Kosi Kala, Mathura for clearance/realization.
64. Evidence on record clearly establishes the fact that Anil Aggarwal (A-3) director of M/s Iyer & Sons (A-1) & M/s Anil Steels Pvt. Ltd. (A-6) managed two signed blank cheques No.984644 and cheque No.984645 drawn on Canara Bank, Ayyampat, Tanjore. Tamil Nadu from account No.6058 of Ms. M. Vijayan (PW-18) through D.T. Tulsi Raman, father of T.Muthuraman (PW-19) on the premise of his promotion of his company M/s Iyer and Sons (P) Ltd. Current Account No.1405 was allowed by accused S.S. Wadhwa (A-1) on 28.09.1992 in the name of M/s A. Kumar and Co. at Oriental Bank of Commerce, Saket, New Delhi and Anil Kasturia (PW-16) Proprietor of the said firm had handed over unsigned cheque book to accused Anil Aggarwal (A-3). Said account was manipulated by Anil Aggarwal (A-3) and on 15.11.1995 accused S.S. Wadhwa (A-1) without the knowledge of the Proprietor purchased Saving Bank Cheque No.984645 dated 13 th November, 1995 for Rs.5,42,835/- drawn on Canara Bank, Ayyampet, Tamilnadu. Sum of Rs.5,35,000/- was withdrawn from the said account by cheque No.565605 dated 13.11.1995 filled by Varun Gupta (PW-11) allowed by S.S. Wadhwa (A-1) and out of which a sum of Rs.5 lacs was transferred to CC A/c No. 77 of M/s Iyer and Sons (P) Ltd. (A-5).
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Moreover, Current Account No.1406 in the name of M/s Ram Kumar & Brothers, 20-F Cannaught Place, New Delhi allowed by accused S.S. Wadhwa (A-1) on 28.09.1992, whose Proprietor is not in the picture and address of the firm is same as that of M/s Iyer & Sons (P) Ltd. The said account is manipulated by Anil Aggarwal (A-3) and on 17.11.1995 S.S. Wadhwa (A-1) in connivance with accused Anil Aggarwal (A-3) Director of M/s Iyer and Sons (P) Ltd.(A-5) as well as M/s Anil Steels Pvt. Ltd. (A-6) purchased Saving Bank Cheque No.984644 dated 11.11.1995 for Rs.3,72,750/- drawn on Canara Bank, Ayyampet, Tamilnadu. An amount of Rs.3,65,000/- was withdrawn form the account vide cheque No.565629 dated 13.11.1995, on the basis of signatures, which were not tallying with the specimen signature of the account holder as per deposition of Sh.Rakesh Kumar Nanda (PW-4) and the said amount was transferred to CC A/c No. 77 of M/s Iyer & Sons (P) Ltd. on 18.11.1995.
65. It stands established that Saving Bank Account No.6058 (10058) at Canara Bank, Ayyampet, Tanjore (Tamilnadu) on 5.7.1977 was in the name of Ms. M. Vijayan Rao (PW-18), 33, South North, New Street, Ayyampet. He was family friend of T. Mathuraman (PW-19), an employee of M/s Iyer & Sons (P) Ltd. (A-5). Accused Anil Aggarwal (A-3) had asked T. Mathuraman (PW-19) to arrange two bank cheques from his native place in lieu of which he was told and granted promotion in the company. Subsequently, Sh. Mathuraman (PW-19) arranged cheque No. 984644 and 984645 from Smt. M.Vijayan Rao through his father, which were got discounted in accounts of M/s Ram Kumar & Brothers and M/s A. Kumar and Company at Oriental Bank of Commerce, Saket, New Delhi, by accused Anil Aggarwal (A-3). Conclusion
66. On appreciation of evidence on record this court finds that S.S. Wadhwa (A-1) CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 55 out of 58 Unique ID No. 02401R019082001 and Anil Aggarwal (A-3) director of M/s Iyer and Sons (P) Ltd.(A-5) & M/s Anil Steels Pvt. Ltd. (A-6) were acting in league and Physical manifestation of their agreement is established from the role played by them. The facts and circumstances proved on record as regards the ground to believe the existence of conspiracy between A-1 and A-3 have been fully established, are of conclusive nature and tendency as well as are consistent with the hypothesis of their guilt. To sum up, S.S. Wadhwa (A-1) allowed M/s Iyer and Sons (P) Ltd.(A-5) the sanction/overdraft limit, beyond CC Limit confirmed by Regional Office up to 17.09.1995 and beyond his discretionary power and cheque discounting facility was allowed to M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6) with the intention of causing wrongful gain to the said companies and wrongful loss to Oriental Bank of Commerce.
67. There is nothing on record to indicate any business transaction worth the name between M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6) and other companies/firms involved in this case and whose cheques were discounted i.e. M/s Temple Tours, M/s Kosi Iron and Steels Works, M/s A.Kumar & Company and M/s Ram Kumar & Brothers and M/s Intergest India International. S.S. Wadhwa (A-1) unauthorizedly purchased in the account of M/s Iyer & Sons (P) Ltd (A-5) two cheques issued from the cheque book from the Current Account No.22027 of M/s Temple Tours i.e. Cheque No. 756555 dated 26.07.1995 for Rs.6.25 lacs on 27.07.1995 and Cheque No.756556 dated 22.08.1995 for Rs.5,28,375/- on 24.08.1995 both drawn on SBI, Bathain Kalan, Mathura, (UP). M.M. Sharma (PW-7) employee of M/s Iyer and Sons (P) Ltd.(A-5) has categorically stated that account opening form and other relevant documents were filled and prepared by him on the instructions of Anil Aggarwal (A-3).
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Unique ID No. 02401R019082001
68. Evidence on record establishes the fact that Anil Aggarwal (A-3) who was Director of A-5 & A-6 companies was managing the entire show. He procured and manipulated two signed cheques No.984644 & 984645 for Rs.5,42,835/- and Rs.3,72,750/- respectively, from the account of M. Vijayan (PW-18) through his employees T. Muthuraman (PW-19) and M.M. Sharma (PW-7) and submitted the same to S.S.Wadhwa (A-1) for discounting. Beneficiaries of these discounted cheques were M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6). Account of M/s Iyer and Sons (P) Ltd.(A-5) was declared as Non-Performing Asset (NPA). As per the statement of account Ex.PW-6/A of M/s Iyer and Sons (P) Ltd.(A-
5) a debit balance of Rs.19,76,273.53p existed as on 27.03.1996; statement of account of M/s Anil Steels Pvt. Ltd. (A-6) a debit balance of Rs.7,46,279.46p and statement of account of M/s Haryana Gears reflects a debit balance of Rs.7,06,308.76p. This court finds that after discounting of cheques in question, M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6) failed to make the payment and/or to repay the debited amount in the accounts of the companies.
69. On considering the broader probabilities and the evidence on record as a whole, this court has no hesitation in inferring that S.S. Wadhwa (A-1) in conspiracy with Anil Aggarwal (A-3) abused his position as public servant and obtained pecuniary advantage for Anil Aggarwal (A-3) and the companies (A-5) & (A-6) as well as the partnership firm (A-7) and acted without public interest and thereby committed criminal misconduct. Settlement of account of these companies with the bank later on after filing the charge-sheet in the year 2002 as submitted by learned counsel, will not absolve the accused companies from their criminal liability. This court finds that Anil Aggarwal (A-3) director of M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt.
CBI Vs. S.S. Wadhwa & Ors., CC No. 40/2012 Page 57 out of 58
Unique ID No. 02401R019082001
Ltd. (A-6) entered into conspiracy to cheat the bank and in commission of misconduct by S.S. Wadhwa (A-1) and they cheated Oriental Bank of Commerce to the tune of Rs.43,37,162/-. Due to the guilty mind of the Director i.e. (A-3) in the present case, who was actually controlling the affairs of the companies, the criminal liability has to be imputed to the accused companies (A-5) & (A-6).
70. In the result, this court finds that prosecution has failed to establish charges against Ghanshyam Dass Buttan (A-2) and Vijay Gupta (A-4). Both these accused persons are hereby acquitted from the charges framed against them. Their previous bail bonds stand canceled and sureties discharged. These accused persons Ghanshyam Dass Buttan (A-2) and Vijay Gupta (A-4) shall furnish their personal bond along with a surety bond in the sum of Rs.50,000/- each as required U/S 437A Cr.P.C. Since partnership firms M/s Haryana Gears (A-7) has no legal entity, therefore, it is not liable to be convicted. Accused S.S. Wadhwa (A-1) & Anil Aggarwal (A-3) are Proclaimed Offender. This court finds that prosecution has established beyond reasonable doubts charges for the conspiracy punishable u/s 120B r/w 420 IPC and 13 (1) (d) r/w 13 (2) POC Act as well as substantive offence punishable u/s 420 IPC against M/s Iyer and Sons (P) Ltd.(A-5) and M/s Anil Steels Pvt. Ltd. (A-6). Therefore, both these companies (A-5) & (A-6) are convicted for the offence punishable u/s 420 r/w 120B IPC as well as u/s 420 IPC.
Announced in the open court
on 10th February, 2016 (VINAY KUMAR KHANNA)
Special Judge-CBI (P.C. Act)-06,
Central, Tis Hazari, Delhi
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