Delhi District Court
Substantive Piece Of Evidence. (Mani ... vs State Air 1993 on 6 November, 2012
IN THE COURT OF SHRI L.K. GAUR, SPECIAL JUDGE
P.C. ACT (CBI09), CENTRAL DISTRICT,
TIS HAZARI: DELHI
CC No. 35/11
R.C. No. 30(A)/97/CBI/ACB/ND
Central Bureau of Investigation
Versus
1. Shri Satnam Singh
S/o Shri Sardul Singh,
Chief Manager, Andhra Bank
20, Visakhapatnam,
Andhra Pradesh. (Expired)
2. M/s Raj Exports
Sundra Place, Jwalaheri Market,
Paschim Vihar,
Delhi.
3. Shri Ashok Kumar Singhal
S/o Late Shri O.P. Singhal,
R/o 222, Star Light Apartment,
Sector14, Rohini
Delhi110085.
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4. Shri V.P Chhabra (Expired)
No. 6, Community Centre,
IInd Floor, Naraina, PhaseI,
New Delhi.
Date of Institution : 03.07.2000
Date of reserving Judgment : 18.08.2012
Date of Pronouncement : 06.11.2012
JUDGEMENT
Preliminary :
1. The accused was sent for trial for the offences punishable under Section 120B read with Section 420 IPC and under Section 13(2) read with Section 13(d) of the Prevention of Corruption Act and substantive offences thereof.
2. Accused no.1 is the erstwhile Chief Manager of Andhra Bank, Janakpuri branch who according to allegations of the prosecution had abused his position as public servant to cause pecuniary advantage to the Accused no.3 Sh. Ashok Kumar Singhal proprietor of M/s Raj Exports (India). Accused no.3 as CC No. 35/2011 2 of 61 the proprietor of accused no.2 M/s Raj Exports (India) who had opened a current account with the Andhra Bank, Janakpuri branch, Delhi and availed a Packing Credit Limit (PCL) against a Letter of Credit in favour of M/s Raj Exports (India) and allegedly dishonestly and fradulently misused the funds released under the said Letter of Credit to cause wrongful gain to himself and corresponding wrongful loss to the Andhra Bank.
Accused no.4 Sh. V.P Chhabra is the valuer who had given an inflated value of the land offered as security for availing the Packing Credit Limit in order to benefit the Accused no.3. As per the allegations all the accused had entered into a conspiracy for commiting the offence under Section 420 IPC and under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 and in pursuance thereof accused no.1 Sh. Satnam Singh had committed the offence punishable under Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act and the accused no.3 Sh. Ashok Kumar Singhal, proprietor of accused no.2 M/s Raj Exports (India) had committed the offence under Section 420 IPC.
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3. During the course of the trial Accused no.1 Sh. Satnam Singh and Accused no.4 Sh. V.P Chhabra had passed away on 31.08.2010 and 21.11.2005 respectively. The proceedings against them stand abated. The Accused no.2 is nothing but a proprietorship firm of Accused no.3 Sh. Ashok Kumar Singhal. Since the accused no.2 is only a proprietorship firm and has no identity of its own beyond the identity of Accused no.3, it cannot be stand alone convicted or acquitted. Thus, practically this judgment is only with reference to Accused no.3 Sh. Ashok Kumar Singhal.
Facts :
4. M/s Raj Exports a proprietorship firm had opened a current account no.1578 with Andhra Bank, Janakpuri branch, Delhi on 03.03.1994 though its proprietor Sh. Ashok Kumar Singhal, Accused no.3. The opening of this account was authorized by Accused no.1 Sh. Satnam Singh the then Chief Manager of Andhra Bank. The Accused no.3 Sh. Ashok Kumar Singhal had submitted an application dated 07.04.1994 seeking CC No. 35/2011 4 of 61 Packing Credit Limit of Rs.10 lakhs against irrevocable Letter of Credit in favour of M/s Raj Exports dated 28.03.1994 issued by Mushreq Bank, Dubai for US$ 45,500 valid till 25.06.1994 for the supply of 5500 pieces of printed shirts of different sizes and 4500 pieces of shirts of different sizes.
5. The loan application was processed by Sh. J.V Ratnam the then Manager working at the Janakpuri branch of Andhra Bank by note dated 08.05.1994 wherein he had noted certain objections. It is alleged that the accused Sh. Satnam Singh had inspite of the said objections had sanctioned the Packing Credit Limit of Rs.10 lakhs in favour of M/s Raj Exports on 08.05.1994.
6. It is alleged that for security the Accused no.1 himself had obtained the documents relating to 2 bighas of land in village Sham Sher, Jalalabad, District Ghaziabad, U.P and he had got it valued by Sh. V.P Chhabra, Accused no.4 the Bank's approved Valuer. It is further alleged that Sh. V.P Chhabra had valued this land on higher side at Rs.13 lakhs . During investigation CC No. 35/2011 5 of 61 this property was valued by one R/R & Co. And M/s National Architects and Engineers who valued this property at Rs.
54,000/ and Rs.1,85,000/ respectively. There is another allegation which is made that though the opinion with regard to the valuation of the property is dated 13.03.1994 but even before the receipt of the said valuation the Accused no.1 had sanctioned the limit on 08.05.1994 itself.
7. Under the said Packing Credit Limit a total disbursement of Rs.6.7 lakhs was made in three installments of Rs.2.25 lakhs which were credit in the current account of M/s Raj Exports.
8. On the request of Accused no.3, three pay orders were issued of Rs.3 lakhs each on 10.05.1994, 17.05.1994 and 28.05.1994. The pay orders dated 10.05.1994 and 28.05.1994 were issued in favour of M/s Pal Singh Kartar Singh which were negotiated through Federal Bank, Chandni Chowk Account No. 2397. The pay order dated 1705.1994 was issued in favour of M/s Guru Kripa Textiles which was negotiated through Allahabad Bank, Chandni Chowk, Delhi.
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9. It is further alleged that the Letter of Credit expired on 25.06.1994 without being negotiated and no export was made under the said Letter of Credit. The funds released under the Packing Credit Limit were misutilized which was made available to the Accused no.3 at a lower rate of interest meant specifically for the purpose of export.
10. As per the charge sheet M/s Raj Export (India) had cheated the Bank to the tune of Rs.10,11,300/ including the other charges as claimed in the civil suit filed by Bank. Charge :
11. On the basis of the allegations charges were framed against the accused Sh. Satnam Singh and Sh. Ashok Kumar Singhal under Section 120B IPC read with Section 420 IPC and 13(1)(d) punishable under Section 13(2) of the Prevention of Corruption Act, 1988. Separately there were also charges framed against accused no.3 Sh. Ashok Kumar Singhal under Section 420 IPC and against the accused no.1 Sh. Satnam CC No. 35/2011 7 of 61 Singh under Section 13(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. The accused had pleaded not guilty and claimed trial.
Evidence :
PW1
12. During the course of the trial the prosecution had examined witness PW1 Sh. Gurcharan Dass Bhalla who was posted as Chief Inspector Andhra Bank, Zonal Office, New Delhi in the year 1994 had deposed that as a part of his duty to carry out investigations in respect of irregularities conducted in the branch/branches of the Bank, he had carried out inspection of Janakpuri branch of the Bank in respect of four firms namely M/s Simran Exports, M/s Raj Exports (India), M/s Bharti Exports and M/s Jay Kay Impex Corporation. In the investigation he was assisted by Sh. M.M Tyagi, Vigilance Officer of the Delhi Zone. The investigation relating to M/s Raj Exports (India) was conducted between 23.12.1994 to 24.12.1994. The role of M/s Raj Exports (India) was given in detail in his detailed report CC No. 35/2011 8 of 61 Ex.PW1/1. He had also prepared a separate report Ex.PW1/2 in respect of the role of the accused Sh. Satnam Singh, the then Chief Manager, Janakpuri Branch, Andhra Bank, New Delhi. He had further prepared another report Ex.PW1/3 referring to the role of Sh. J.V Ratnam posted as Manager in the Janakpuri branch.
13. He had sent the said reports along with the Staff Accountability Report dated 26.12.1994 Ex.PW1/4 to the Dy. General Manager, Hyderabad. In his reports Ex.PW1/1 to Ex.PW1/3 he had highlighted the shortcming/irregularities committed in the conduct of the Bank account of M/s Raj Exports (India).
PW2
14. Witness PW2 Sh. M.M Tyagi is the Vigilance Officer referred to in the testimony of the witness PW1 Sh. Gurcharan Dass Bhalla. This witness had deposed about the same facts as deposed by the witness PW1 Sh. Gurcharan Dass Bhalla.
CC No. 35/2011 9 of 61 He had stated that he had assisted Sh. Gurcharan Dass Bhalla in the preparation of the reports Ex.PW1/1 to Ex.PW1/4. PW3
15. Witness PW3 Sh. Arvind Tiwari had deposed that he was the proprietor of M/s R.R & Company and he was practising as a Chartered Engineer and Valuer. He had been on the panel of Andhra Bank during the period 19951996 as a Valuer. According to him, he had prepared the valuation report Ex.PW3/1 dated 31.03.1998 related to the property Khasra no. 14, Village Shamsher, Pargana, Jalalabad, Tehsil & District ghaziabad, U.P and submitted the same to the Andhra Bank, Janakpuri branch, New Delhi.
PW4
16. Witness PW4 Sh. R.C Jain who is an architect by profession and is an approved Valuer of Andhra Bank, Ghaziabad, U.P in the year 1999 had deposed that he had prepared the valuation report Ex.PW4/2 in respect of the CC No. 35/2011 10 of 61 property bearing Khasra No.14 in the name of Sh. Ashok Kumar Singhal and Sh. Ram Saran Dass after visiting the property along with its owner and Sh. V.K Sharma, Sub Manager of Andhra Bank. As per the valuation report he had prepared, the value of the land was Rs.1,85,000/ as on 19.07.1999.
PW5
17. Witness PW5 who was a cloth merchant and running his establishment in the name and style of M/s Pal Singh Kartaar Singh had deposed that he knew Sh. Naresh Sikri who was present in the Court (Apparently in connection with another case as Naresh Sikri is not an accused in this case) since he was in the business of readymade garments. He had identified Production Memo Ex.PW5/1 dated 18.06.1999 by which he had produced the dublicate copies of the bills mentioned in the said memo. He had also referred to the Statement of Account Ex.PW5/2 prepared by his Accountant Mr. Mukesh Manchanda.
CC No. 35/2011 11 of 61 As per his testimoney the two pay orders dated 12.05.1994 and 30.05.1994 mentioned in the Statement of Account at points A and B were handed over to him by Naresh Sikri. He had identified twelve bills collectively Ex.PW5/3 in the handwriting of the Accountant of the firm Sh. Mukesh Manchanda related to M/s Pal Singh Kartaar Singh. As per this witness the goods had been supplied to M/s Raj Exports (India) as against the said bill. According to this witness it was Naresh Sikri who had brought the proprietor of m/s Raj Exports (India) to him. In the cross examination by Ld. PP for CBI he had denied the suggestions made by the Ld. PP for the CBI that the orders on behalf of M/s Raj Exports (India) had been directly placed by the accused Sh. Ashok Kumar Singhal and he had handed over the pay orders to him on behalf of M/s Raj Exports (India). This witness had even not identified Sh. Ashok Kumar Singhal in the Court by saying that he is not in a position to identify Sh. Ashok Kumar Singhal as he had visited him only once or twice along with Sh. Naresh Sikri.
CC No. 35/2011 12 of 61 PW6
18. Witness PW6 is Sh. Devi Dass had deposed that he was posted as Officer in Chandni Chowk branch of Allahabad Bank in the year 1999. He had proved the documents related to the current account no.102192 of M/s Guru Kirpa Textiles. According to him as per the Account opening Form Ex.PW6/1 and Specimen Signature Card Ex.PW6/2 Sh. Devender Kumar was the proprietor of M/s Guru Kripa Testiles who had opened the account on 21.04.1994.
19. As per payinslip dated 18.05.1994 Ex.PW6/3 Rs.3 lakhs had been deposited vide cheque no.438087 issued by Andhra Bank, Janakpuri branch. He had further identified the cheques Ex.PW6/4 to Ex.PW6/7 dated 20.05.1994, 27.04.1994 and 21.05.1994 by which Rs. 1 lakh, Rs.50,000/, Rs.1,45,000/ and Rs.1,336/ had been withdrawn by M/s Guru Kripa Textiles. He had identified the Statement of Account Ex.PW6/8 of above account of M/s Guru Kripa Textiles by identifying the signatures CC No. 35/2011 13 of 61 of Sh. R.C Aggarwal who had signed the same. As per this witness this account was closed on 18.01.1995. PW7
20. Witness PW7 Sh. Rakesh Krishan Gupta was dropped by the prosection being not necessary.
PW8
21. Witness PW8 Sh. K. Sriram murthy who was posted as Sub Manager between 1991 to 1994 in Andhra Bank, Janakpuri branch had deposed that he had handled the loan file of M/s Raj Exports (India) during his tenure. He had identified the application for advance signed by Sh. Ashok Kumar Singhal as proprietor of M/s Raj Exports (India) for grant of Packing Credit Limit (PCL) to the tune of Rs.10 lakhs and primary security offered by him was of hypothecation of stocks of goods in process. He had also given the collateral security relating to the land in the name of Sh. Ashok Kumar Singhal at Ghaziabad CC No. 35/2011 14 of 61 valued by the deceased accused Sh. V.P Chhabra at Rs.13 lakhs as per report Ex.PW8/2.
22. He had further identified the application dated 03.03.1994 submitted by Sh. Ashok Kumar Singhal proprietor of M/s Raj Exports (India) for opening of current account which was permitted by the deceased accoused no.1 Sh. Satnam Singh on 04.03.1994.
23. In his testimony he had referred to process note dated 08.05.1994 Ex.PW8/4 running into four pages which Sh. J.V Ratnam had prepared and submitted to Sh. Satnam Singh on which the deceased accused Sh. Satnam Singh had given the sanction with regard to the Packing Credit limit Ex.PW8/5.
24. This witness had further identified the legal opinion dated 13.03.1994 given by Sh. P. Krishna Rao, Advocate with regard to the property in District Ghaziabad Ex.PW8/6, Demand Promissory Note dated 08.05.1994 executed by accused Sh.
CC No. 35/2011 15 of 61 Ashok Kumar Singhal for Rs.10 lakhs Ex.PW8/7, Packing Credit Agreement Ex.PW8/8 executed by Sh. Ashok kumar Singhal proprietor of M/s Raj Exports (India), document Ex.PW8/9 relating to security for advance and loans executed by accused Sh. Ashok Kumar Singhal as proprietor of M/s Raj Exports (India), Bills Discounting Agreement Ex.PW8/10 running into four pages executed by Sh. Ashok Kumar Singhal, document RF - 298 Ex.PW8/11 executed by Sh. Ashok Kumar Singhal as proprietor of M/s Raj Exports (India), application dated 25.08.1994 Ex.PW8/12 bearing the signatures of Sh. Ashok Kumar Singhal submitted on behalf of M/s Raj Exports (India) for release of Packing Credit Limit of Rs.5 lakhs, letter dated 17.05.1994 signed by Sh. Ashok Kumar Singhal on behalf of M/s Raj Exports (India) Ex.PW8/13 for issuance of pay order of Rs.3 lakhs in favour of M/s Guru Kripa Textiles, Property statement Ex.PW8/14 submitted by accused Sh. Ashok Kumar Singhal, Offer of Security letter dated 07.04.1994 submitted by accused Sh. Ashok Kumar Singhal Ex.PW8/15, Pay order dated 10.05.1994 for Rs.3 lakhs Ex.PW8/16 issued in favour of M/s CC No. 35/2011 16 of 61 Pal Singh Kartaar Singh, Pay order dated 17.05.1994 for Rs.3 lakhs Ex.PW8/17 issued in favour of M/s Guru Kripa Textiles, Pay order dated 28.05.1994 for Rs.3 lakhs Ex.PW8/18 issued in favour of M/s Pal Singh Kartaar Singh, Cheque dated 17.05.1994 drawn on Andhra Bank, Janakpuri branch issued by Ashok Kumar Singhal Ex.PW8/19 submitted along with application Ex.PW8/12 by Sh. Ashok Kumar Singhal for the issuance of a pay order of Rs.3 lakhs in pursuance whereof pay order Ex.PW8/17 was issued, Cheque dated 28.05.1994 drawn on Andhra Bank, Janakpuri branch issued by Sh. Ashok Kumar Singhal Ex.PW8/21 submitted along with the application Ex.PW8/22 bearing the signatures of Sh. Ashok Kumar Singhal for issuance of pay order of Rs.3 lakhs and in pursuance whereof the pay order Ex.PW8/16 was issued, certified copy of current account no.1578 of M/s Raj Exports (India) Ex.PW8/23 certified by Sh. P.K Dass the then Chief Manager of Andhra Bank, Janakpuri branch, New Delhi, certified copy of Packing Credit Limit Account of M/s Raj Exports Ex.PW8/24 certified under the signatures by Sh. P.K Dass the then Chief Manager of CC No. 35/2011 17 of 61 the Bank and certified copy of the Pay Order Issue Register Ex.PW8/25 certified under the signatures by Sh. P.K Dass the then Chief Manager.
PW9
25. Witness PW9 Sh. J. Venkatarathnam had deposed that he had remained posted as Manager in Andhra Bank, Janakpuri branch during the period 1992 to May, 1994. His deposition is similar to that of the witness PW8. He had stated in his testimony that after the application of Packing Credit Limit Ex.PW8/1 proprietor of M/s Raj Exports (India) was received in the Bank by the Accused no.1 vide paper slip Ex.PW9/1, he was instructed to process the said application by the deceased Accused no.1 Sh. Satnam Singh. It was also mentioned in the paper slip Ex.PW9/1 that the proprietor of M/s Raj Exports (India) had commited to get a FDR of Rs.10 lakhs in the said week to the Bank and more in the days to come. Further, at that time the LC and Collateral Security were available as per the instructions given by Accused no.1 Sh. Satnam Singh.
CC No. 35/2011 18 of 61 26. According to this witness he had prepared the note
Ex.PW8/4 and submitted the same to the Accused no.1 Sh. Satnam Singh pointing out interalia that the account of M/s Raj Exports (India) had not been properly introduced as per banks rules, M/s Raj Exports (India) was new in the export business, though it was claimed that firm had an office at Paschim, all the correspondence was routed to the residential address, in some papers the name of the accused had been mentioned as "Ashok Singhal" and in some places as "Ashok Kumar Singhal" in the documents submitted by the Accused no.3 and in the valuation report the property was shown as residential cum agricultural property and on inquiry that agricultural property cannot be taken as collateral security, Valuer had simply removed the word 'agricultural'.
27. He had further stated in the report that M/s Raj Exports (India) was the sole proprietor and since he himself was not in the fabrication work, he must submit full addresses of the fabricators, he should submit the stock statement with CC No. 35/2011 19 of 61 addresses and letter of access signed by the fabricators for the inspection by the branch and to also submit progress report every month.
28. As per the note Ex.PW8/4 he had recommended sanction of Rs.10 lakhs as the limit with the above terms and conditions to be fulfilled and submitted as note for instructions. The Accused no.1 Sh. Satnam Singh, however, vide note Ex.PW8/5 had sanctioned the Packing Credit Limit of Rs.10 lakhs at the terms and conditions stated above without any further instructions. The accused, however, had not got rectified the irregularities mentioned in the report.
29. He had pointed out that as per the Bank's rules the person introducing the account must atleast have six months old account with the Bank but in this case the introducer who had introduced the account M/s Sai Electronics itself had opened the account on 25.09.1993 where as M/s Raj Exports (India) had opened the account on 03.03.1994. As per the Bank's rules the CC No. 35/2011 20 of 61 valuation report of collateral security and legal opinion are sought after sanction of advance/loan but in this case the sanction was made on 08.05.1994 but the valuation report Ex.PW8/2 dated 11.04.1994 and the legal opinion Ex.PW8/6 dated 13.0.3.1994 were already available with Accused no.1. PW10
30. Witness PW10 Sh. Surendra Dhillon had deposed that in the year 1997 he was posted as Inspector in CBI, ACB, New Delhi. Sh. R.K Prasad was S.P, CBI, ACBI at that time. He had registered the FIR Ex.PW10/A and entrusted the same to him for investigation. During the course of the investigation he had searched the house of Accused no.1 on 29.04.1997 and prepared the Seizure Memo Ex.PW10/B. Thereafter the investigation was transferred to Inspector P. Balachandaran. PW11
31. Witness PW11 Sh. P.K Sharma had deposed that in the year 1999 he was posted as Sub Manager, Ghaziabad branch CC No. 35/2011 21 of 61 of the Bank. He knew Sh. R.C Jain. He was the approved valuer of the Bank. On 19.07.1999 he had visited the villages Noor Nagar and Shamsher, Ghaziabad for revaluation of two properties in the said villages which had been mortgaged with the Janakpuri branch of Andhra Bank. He had helped him in locating the properties in the said villages. PW12
32. Witness PW12 Sh. P. Balachandran had deposed that after the initial investigation by Sh. Surendra Dhillon he had further investigated the case. He had seized the documents i.e Bills Ex.PW5/2, Ex.PW5/3, Ex.PW12/A1 to Ex.PW12/A11 vide the Production Memo Ex.PW5/1 from Sh. Inder Pal Singh.
33. He had further seized the documents Ex.PW8/1 to Ex.PW8/15, Ex.PW12/C1 to Ex.PW12/C13, Ex.PW3/1 and Ex.PW9/1 vide Seizure Memo Ex.PW12/B from Sh. P.K Dass Chief Manager Andhra Bank, Janakpuri.
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34. He had also seized the documents Ex.PW12/D1 to Ex.PW12/D4 from one Sh. C.D Simon, Sr. Manager, Federal Bank Ltd., Chandni Chowk, Delhi through letter dated 15.05.1999 Ex.PW12/D.
35. He had also identified the certified copy of the register of title deeds for the account of Sh. Ashok Kumar Singhal Ex.PW12/E. As per the valuation report Ex.PW4/2 the valuation of this property was found to be Rs.1,85,000/ and it was not found mortgaged to any of the Bank. He had also identified the letter of the Andhra Bank addressed to him Ex.PW12/F by which the valuation report Ex.PW4/2 was forwarded to him.
36. Lastly he had submitted that after getting the sanction for the prosecution of the deceased accused no.1 Sh. Satnam Singh Ex.PW12/G, he had filed the charge sheet in the Court. PW13
37. Witness PW13 Sh. Yogeshwar Kumar is the Sanctioning CC No. 35/2011 23 of 61 Authority who had deposed that he had accorded the sanction for the prosecution of the accused Sh. Satnam Singh Ex.PW12/G after having gone through the relevant material and satisfying himself on this account.
Statement of Accused under Section 313 Cr.P.C :
38. All the increminating evidence which had come on record in the evidence was put to the accused and his statement under Section 313 Cr.P.C was recorded.
Hearing of Submissions :
39. I have gone through the record of this case as well as the written submissions submitted on behalf of accused Sh. Ashok Kumar Singhal. I have also heard Ld. PP for CBI as well as Ld. Defence Counsel.
CC No. 35/2011 24 of 61 Findings and discussion
40. To begin with one may state here that as far as the offence committed under Section 13 (1) (d) and punishable under Section 13(2) of Prevention of Corruption Act, 1988 is concerned, the same does not survive as the only public servant in this case accused no.1 Satnam Singh has expired. It may still, however, be possible to convict the accused Ashok Kumar Singhal under Section 120B IPC read with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 for an offence under Section 120B is an independent offence provided there is sufficient evidence to prove the same.
41. The facts in this case can be divided into two parts; one related to the sanction of the Packing Credit Limit and the proceedings related thereto and the other related to the utilization of the packing credit release pursuant to the said sanction of Packing Credit Limit.
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Part I of allegations
Irregularities committed in the sanctioning of limit :
Over valuation of the property of land offered as security
42. One of the allegations in this case is, that the property offered as security by the accused Ashok Kumar Singhal for securing the Packing Credit Limit was over valued. This was done purposely by the Valuer deceased accused Sh. V.P Chhabra, to favour the accused Sh. Ashok Kumar Singhal. (It has already been noted above that Sh. V.P Chhabra expired during the course of the trial and the proceedings against him stood abated on 14.5.2006 even before the charge has been framed.)
43. The allegation of over valuation of the property was mainly directed against the deceased accused Sh. V.P Chhabra. He was the best person to have defended his valuation report. It would be a bit unfair to ask the accused Sh. Ashok Kumar Singhal to defend the said report allegedly over valuing the property offered as security. I have, however, still examined the CC No. 35/2011 26 of 61 entire material which has come on record to get to the bottom of this issue on the basis of the material which has come on record in evidence.
44. It may be noted that the valuation of property is an opinion evidence of an expert and is hardly decisive. It is not a substantive piece of evidence. (Mani Ram Vs State AIR 1993 SC 2453). Here there is one opinion of deceased accused Sh. V.P Chhabra which is pitted against the opinions with regard to the land in question, which was offered as security, taken subsequently to say that the property had been overvalued. It may be noted that the question in the context of this case is not which of the two opinion should be accepted but as to whether the opinion evidence of witness PW4 Sh. R.C Jain examined by the prosecution is reliable and enough to reach the conclusion that the report furnished by Sh. V.P Chhabra is not just incorrect but is so incorrect that it can be concluded that it was dishonest and given purposely to favour the accused Ashok Kumar Singhal.
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45. I am of the view that the best way to evaluate value of a piece of land is the way such properties are evaluated in the cases of land acquisition. It was laid down by the Hon'ble Supreme Court in the case of Ranbir Singh & Other Vs. Union of India Appeal (Civil) 1428 of 2004, Date of Decision 07.09.2005 "It is well settled that sale deeds pertaining to portion of lands which are subject to acquisition would be the most relevant piece of evidence for assessing the market value of the acquired lands". At the same time it may also be noted that the circle or sector rates may have some corroborative value to determine the value of land but the same can never be conclusive. It was observed in Thakur Kuldep Singh (D) Thr. L.R & Ors. V/s Union of India & Ors. (Civil Appeal 8636 date of decision March 08, 2010) "We accept that in view of the purpose for which the 'circle rates' have been notified by the Ministry of Urban Affairs and Employment, market value of a plot cannot be determined solely on the basis of the circle rates. On the other hand, it cannot be ignored in toto. If other materials are available, Government rates can also be CC No. 35/2011 28 of 61 considered as corroborative evidence. The nature of the land plays an important role. Likewise, market conditions prevailing as on the date of notification are also relevant." It may further be added here that the circle rates or sector rates are area specific whereas market value of a land is location specific.
46. Though in his examination in chief witness PW4 has deposed "As per the valuation, which I had prepared on the basis of the market value of the land and also the prevalent circle rates, the value this land was valued by me at Rs. 1,85,000/ " but the same is completely untrue as is evident from the following.
47. From the column no.38 of the valuation report Ex.PW4/2 prepared by the witness PW4 it is clear that the witness PW4 did not check the instances of sale of property in the locality. He even did not contact any property dealer to determine as to what was the market value of the property. There was no basis for him to have said that he had prepared the valuation report on the basis of the market value of the land. The same reads as under :
CC No. 35/2011 29 of 61 "38. Give instances of sales of : Not in my immovable property in the Knowledge.
locality on a separate sheet indicating the name and address of the property, registration No. sale price and area of land sold."
48. It is also clear from the report that the only basis for reaching the value of the land was Government approved rates of the Sector. The relevant column 40 of the valuation report reads as under :
"40 If sale instances are not : DM approved sector rate available or not relied upon 3,50,000/ per bighas the bases of arriving at the i.e. 115.70 per sqyds. land rate."
49. In conclusion one may say that the value of the land based on just sector rates as stated in the valuation report Ex.PW4/2 can hardly be said to be good basis to determine the value of the land.
50. There is a far more greater issue involved here which even makes it suspect that if the valuer PW4 had actually visited the land in question for its valuation.
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51. In his examination in chief this witness had deposed "this is the valuation report Ex.PW4/2 prepared by me in connection with the property Khasra No.14 in the name of Ashok Kumar Singhal and Ram Saran Dass, after visiting the site along with the owner of the property and Sh. V.K Sharma Sub Manager of Andhra Bank" thus insisting that he had visited the land with the owner of the land i.e the accused herein Sh. Ashok Kumar Singhal. Part 2 of his report with regard to the identification of the land reads as under :
"I have try (sic tried) to locate the exact site with Mr. V.K Sharma, Sub Manager of Andhra Bank, Ghaziabad. we have locate the village area and some persons of that area told us about the approximate location. It is a open land which is used for Agriculture."
52. It is, therefore, absolutely clear that Ashok Kumar Singhal had not accompanied the valuer PW4. The way it has been mentioned in the report as to how valuer had reached the property, makes it extremely doubtful that he had actually visited the property in question or he had seen some other property.
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53. As already noted above, the witness PW4 in his report in column no.40 had mentioned "DM approved sector rate 3,50,000/ per bighas". It is not clear how he arrived at this figure. Along with the report he has filed one list of rates of land. It starts with page no.2. At the beginning the first entry starts with Sr. no.4. At Sr. no.9 is the name of the village "Jalalabad" is mentioned (it has been underlined in the list), which is the village in question. As against this name in the second column there is figure of "650" mentioned and in the third column figure "500" is mentioned. On this page there is no figure of Rs. 3,50,000/. It is apparent that this list is not complete. This mystery gets resolved when one looks at other report exhibited in this case by the same witness Ex.PW4/1, though inadvertently as it is not related to this case. This report relates to one another connected case of similar nature involving the same question. Along with the report also the same list has been filed. Though it also does not appear to be complete, but it has the first page of this list. In this list there is one figure of Rs. 3,50,000/ mentioned, but it is not mentioned as against the CC No. 35/2011 32 of 61 village "Jalalabad" but one another village "Noornagar" which infact is the subject matter of the report Ex.PW4/1. It appears that PW4 without cross checking mentioned the same figure in the report Ex.PW4/2 as is mentioned in the report Ex.PW4/1.
54. Further reading of this list would show that there are three kinds of rates mentioned in the list. One is with regard to agriculture land. The other two relate to the land in the populated area - one referring to the land on the main road and other related to the interior of the village. These rates for village Jalalabad per sq metre are "650" and "500" respectively. If one looks at the report Ex.PW4/2, one would find the description of this property as "residential area agriculture land" (Column 8 of report). Interestingly this report is vague as to the answer given to the question at Sr. no.3 "roads, streets of lanes of which the land is abutting". It merely says "No", making no sense as to what it means, though it gives credence to the preposition that the valuer had himself was not sure about the location of the land.
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55. In contrast if one looks at the report of Late Sh. V.P Chhabra who has been accused of over valuing the land, one would find that he has used the same format as witness PW4. As against the column no.3 it is specifically stated in the report "front facing the road, sides abutting other properties". If this property is to be considered on the road side then as per the rates mentioned of the land per square metre as mentioned in the list referred above the value of the land would come to Rs. 33,49,728.85 [5153.429 Sq. Mtr (equal to 6.45 Sq. Yards as given PW4//2) X 650 (value of land per Sq. Mtr.)]. Even if the worst situation is taken that the property was in the interior of the village it would still be Rs.25,76,71 (approx.) [5153.429 Sq. Mtr (equal to 6163.45 Sq Yards as given PW4/3) x 500 (value of land per Sq. Mtr)].
56. The value given by PW4 is just Rs. 1,85,000/. It may further be noted that this report is of the year 1999 where the sector rates applied were of the year 1997. Witness PW4 did not even take into account the escalation in the land price which may have occurred in the pace of two years.
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57. Having examined the matter closely, I find that the report of deceased accused V.P Chhabra to be much closer to the truth than the report of the prosecution witness PW4. Firstly as noted above, he had specially noted that it was a road side property. He has also noted like witness PW4 that the land in the residential area. Secondly, while giving the value of the property as Rs.650 per sq yard he has stated "The above land rate is based on its size, its location adjoining Hastinapuram coming up of G.D.A and its being freehold in nature. The land rate is further confirmed from the local property brokers" That is to say the report of deceased accused V.P Chhabra is more precise and based on various factors having been taken into account unlike the report of witness PW4 which is just based on sector rates.
58. I would, therefore, conclude that the report of PW4 as to the valuation of property is completely unreliable. On the other hand the valuation of the property by the deceased accused V.P chhabra cannot be dismissed as wrong much less dishonest or malafide.
CC No. 35/2011 35 of 61 M/s Raj Exports was new to business
59. There are allegations both in the charge sheet and also in the report of Sh. J.V Ratnam who has processed the application of the accused Ashok Kumar Singhal which forms the basis of all the allegations against him that there had been irregularities committed in the sanction of the limit as the deceased accused Sh. Satnam Singh had ignored the objections of Sh. J.V Ratnam and had gone ahead with the sanctioning of the Packing Credit Limit.
60. At the cost of repetition it may be made clear here that these allegations are primarily against deceased accused Satnam Singh who has passed away and the proceedings against him stand abated and he was the best person to have defended these allegations. I have, however, still examined this issue in the light of the evidence which has come on record just to notice as to whether the fact that M/s Raj Export was new to business could have been a reason to decline the Packing CC No. 35/2011 36 of 61 Credit Limit to him so as to say that deceased accused Satnam Singh had acted dishonestly to favour the accused herein Sh. Ashok Kumar Singhal.
61. M/s Raj Exports is nothing but a Proprietorship Firm which has no existence beyond the existence of Ashok Kumar Singhal. Therefore, to say that M/s Raj Exports had no experience in the line of exports has no meaning. The real question is, did Ashok Kumar Singhal had any experience in exports? The relevant part of the report of Sh. J.V Ratnam Ex.PW8/4 reads as under: "M/s Raj Exports is new to the business but apparently he has experience in the line of ready made garments." It is further stated at another stage "During the discussion party seems to have working knowledge of ready made garments."
62. Thus without probing too much it is evident from the note Ex.PW8/4 itself that this allegation is not true.
CC No. 35/2011 37 of 61 No proper introduction of account of M/s Raj Exports
63. It is alleged that there was no proper introduction of account of M/s Raj Export. It is noted in Ex.PW8/4 "Raj Exports have opened account on 3.3.1994 and introduced a/c is also not older than six months as per our Bank requirement we may better take proper introduction."
64. The account opening form Ex.PW8/3 shows that it was introduced by the proprietor of M/s Sai Electronics. If the prosecution wanted this as the fact to be used against the accused Sh. Ashok Kumar Singhal then just saying this was not enough. The investigating officer should have collected the record relating to the opening of the account of M/s Sai Electronics to show that it was not older than six months as a fact and he should have further placed on record some rule or some circular to say that it was so necessary. In any case it may be seen that M/s Sai Electronics had opened the account as per the report on 25.9.93 and the account in the name of M/s CC No. 35/2011 38 of 61 Raj Export was opened on 3.3.94. That is to say that it was just short by twenty two days in completing the six months. It may further be noted that the application for limit was filed on 7.4.94. The defect, if any, with regard to opening of the account for this reason stood cured by that date. Thus, there was no such defect in operation on the day i.e 8.5.94 when this application came to be considered for processing by Sh. J.V Ratnam. I am of the view that this objection was just for the sake of it. It is not the case of the prosecution that the account of M/s Sai Electronics was fake.
Difference of name of accused on different accounts
65. It is alleged in the charge sheet that as per the note of Sh. J.V Ratnam there was discrepancy in the name of accused Ashok Kumar Singhal and despite that deceased accused Sh. Satnam Singh had sanctioned the limit. It is stated in the processing note Ex.PW8/4 "when we see the application, valuation report, legal opinion, it can be observed that CC No. 35/2011 39 of 61 application shows proprietor as Ashok Singhal and all other paper show as Ashok Kumar Singhal. We may have to verify and get it rectified."
66. I have seen the record. Except for document, the application for Packing Credit Limit, on all the documents including the loan documents such as promissory notes etc. and also the application for the opening the account the name of the accused has been given as "Ashok Kumar Singhal". It appears to me, it would be completely unjustified, if on the basis of just one document, one were to conclude that the accused had given different names in different documents. And what is the difference in the name, in one of the documents his name has been given as "Ashok Singhal" and not "Ashok Kumar Singhal"
It is hard to imagine if the deceased accused Satnam Singh had sanctioned Packing Credit Limit by over looking it, he had committed criminal conspiracy with the accused Ashok Kumar Singhal to cheat the Bank.
CC No. 35/2011 40 of 61 Difference in address of M/s Raj Exports (India)
67. There is an allegation in the charge sheet that the deceased accused no.1 Satnam Singh had sanctioned the limit ignoring the objection that there had been difference in the addresses given. First of all what has been stated in the report of Sh. J.V Ratnam Ex.PW8/4 is not the difference in the addresses given, but the objection that the accused had given address of M/s Raj Exports (India) of Paschim Vihar, but he had been corresponding from his residential address. The report reads "Firm has an office at Paschim Vihar, but all the correspondence is rooted to residential address". To say the least this objection was equally frivolous as the previous one. As pointed out by the Ld. Defence Counsel that there was no illegality in it, this objection would have assumed significance if the allegation had been that M/s Raj Exports had no office at all at Paschim Vihar or that the address of Paschim Vihar was fake and therefore, the accused Ashok Kumar Singhal had been corresponding from his residence. But there is no such CC No. 35/2011 41 of 61 allegation. This again could not have been a reason to decline the request of Packing Credit Limit or to say there was a criminal conspiracy between Ashok Kumar Sighal or deceased accused Sh. Satnam Singh to commit any offence.
Part II of the allegations
68. It is alleged in the charge sheet that the funds had been misutilized by the accused. In other words, the funds had not been used for fabrication of garments or procuring material for the same or any such purpose. Let us examine the allegations in this respect one by one.
Release of Packing Credit to make payment to M/s Pal Singh Kartar Singh and issuance pay orders in its favour
69. There are two pay orders issued in favour of M/s Pal Singh Kartar Singh one is dated 10.5.94 and other is dated 28.5.94. Both the pay orders had been issued for Rs.3 lakhs after the accused Ashok Kumar Singh had deposited Rs.
CC No. 35/2011 42 of 61 75,000/ as the margin money each time. In other words, for making payment to M/s Pal Singh Kartar Singh the Bank had released Packing Credit of Rs.4.5 lakhs, after the accused no.3 Sh. Ashok Kumar Singhal had deposited the margin money of Rs.1.50 lakhs.
70. Sh. Inder Singh owner of M/s Pal Kartar Singh was examined as PW5 by the prosecution. He had deposed that "he was doing business of cloth since 1978 under the name and style of M/s Pal Singh and Kartar Singh". He had identified twelve bills (collectively Ex.PW5/3) by which the supplies had been made to M/s Raj Exports (India). He had admitted the receipts of the said pay orders. He had identified the statement of account prepared by his accountant related to the supplies made to M/s Raj Exports (India) and the payments received from M/s Raj Exports (India).
71. It is neither the case of the prosecution nor there is any thing in the testimony of this witness which may create any CC No. 35/2011 43 of 61 doubt as to the testimony of this witness or bills he had proved related to the supplies of cloth to M/s Raj Exports and also the statement of account. In fact, these are the documents relied upon by the prosecution itself. The only blemish which could be pointed out about his testimony was that he did not identify the accused in the Court thereby making a bit of diversion from his statement made to CBI under Section 161 Cr.P.C. He was crossexamined by the Ld. PP for CBI wherein he had deposed that the pay orders had been handed over to him by one Naresh Sikri (accused in one another case of similar nature who appears to have been present in the Court on that day). He had deposed "I cannot identify the said Ashok Kumar Singhal of M/s Raj Exports, since he came to me along with accused Naresh Sikri only once or twice." This, however, does not change anything. From the suggestions made in the crossexamination from the side of the prosecution it is clear that the prosecution wanted this court to believe that it was none but the accused Ashok Kumar Singhal who had made the payment to M/s Pal Singh Kartar Singh. So, to say the least this assertion only CC No. 35/2011 44 of 61 strengthens the case of the accused Ashok Kumar Singh that the transaction related to the supply of material to M/s Raj Exports (India) and the payment made by Sh. Ashok Kumar Singhal to M/s Pal Singh Kartar Singh was for a genuine transaction.
72. I would like to further point out that the bills produced in the Court and the statement of account of M/s Pal Kartar Singh shown that the supplies as against the said bills were for Rs. 7,50,000/ out of which only Rs.5,50,000/ was the Packing Credit and rest of the money came from the pocket of the accused Ashok Kumar Singhal. I am of the view that the fact that accused spent money from his pocket to get the supplies from M/s Pal Singh Kartar Singh goes a step further to establish that accused Ashok Kumar Singhal did not have intention to cheat the Bank.
73. Ld. Public Prosecutor had submitted "in the case of M/s Pal Singh Kartar Singh even if the bills are filed (by the CC No. 35/2011 45 of 61 prosecution), they would only show that the said bills had been issued but it was for the defence to have establish that it had actually received the delivery of goods by them for producing its records". He had further continued in his submissions "the bills themselves do not show that the supplies were obtained from M/s Pal Singh Kartar Singh as neither the repayment has been made to the Bank nor the lien of goods offered to the Bank nor the value of scrap as being claimed now during the arguments was offered to the Bank."
74. First of all, it may be understood, it is trite law, the accused is innocent till proved guilty is a presumption of law. It can only be rebuttal by leading a positive evidence, direct or indirect, to establish beyond reasonable doubt that the accused is guilty. To say that it was for the accused to have establish that he had received the goods as against the bills and since he did not lead evidence to this effect, it should be inferred that the bills were fake and no supplies had been made against them to the accused is completely against all Canons of criminal law. Even CC No. 35/2011 46 of 61 if it was to be proved that as against the bills no supplies had been received by the accused, it was not to be proved by the accused, but by the prosecution. I would like to also point out that the witness PW5 owner of M/s Pal Singh Kartar Singh was before the Court, there was no question put to him that though he had received the money but had made no supplies to M/s 1 Raj Exports (India). One may refer to here Section 315(1) of the Code of Criminal Procedure which provides that though accused is a competent witness for the defence but his failure to give evidence cannot be subject to any comment by any of the parties or give rise to any presumption against him.
75. It was submitted further by Ld. Public Prosecutor that "the evidence of PW5 Sh. Inder Singh shows that the supplies
1. 315. Accused person to be competent witness; (1) Any person accused of an offence before a Criminal Court shall be a competent witness for the defence and may given evidence on oath in disproof of the charges made against him or any person charged together with him at the same trial:
Provided That
(a) he shall not be called as a witness except on his own request in writing.
(b) his failure to give evidence shall not be made the subject of any comment by any of the parties or the Court or give rise to any presumption against himself or any person charged together with him at the same trial.
CC No. 35/2011 47 of 61 against the said bills were made only to one Sh. Naresh Sikri in the name of the firm of the accused M/s Raj Exports. The inference of this would only be that if at all the supplies were made by M/s Pal Singh Kartar Singh, the same were made to Naresh Sikri and the accused herein settled some liability with Sh. Naresh Sikri and did not try to procure something in the advancement of the loan".
76. It may be stated here that the stand taken by the Ld. Prosecutor is against the case of prosecution itself. As far as the case of the prosecution is concerned, Sh. Naresh Sikri is not at all in the picture in this case. In fact when the witness PW5 deposed in the Court that he knew only Mr. Sikri and not the proprietor of M/s Raj Exports and it was Mr. Sikri who had brought the proprietor of M/s Raj Exports along with him, he was crossexamined by the Ld. Prosecutor at that time to insist that witness PW5 knew the accused Ashok Kumar Singhal and it was the accused Ashok Kumar Singhal who had handed over the pay order to him. It may further be noted that none of the CC No. 35/2011 48 of 61 prosecution witnesses have stated that as against the said bills no supplies had been made. On the other hand prosecution witness PW5 had stated "in respect of said bills, goods had been supplied to M/s Raj Exports. Accused Naresh Sikri present in the Court had brought the proprietor of M/s Raj Exports to our firm". There was no crossexamination of this witness from the side of the prosecution that he had made no supplies to M/s Raj Exports. The submission that the supplies if at all made,had been made to Naresh Sikri and accused Ashok Kumar Singhal had settled some personal liability with Sh. Naresh Sikri is nothing but baseless and in fact contrary to the evidence lead by the prosecution.
1
77. One may also refer to Section 114 of the Evidence Act which provides that the Court may presume the existence of any fact which it thinks likely to have happened regard being had to the common course of natural events, human conduct and 1 114. Court may presume existence of certain facts. The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.
CC No. 35/2011 49 of 61 public and private businesses in their relation to the facts of a particular case. In the given facts of the case once the payments had been received by M/s Pal Singh Kartar Singh bills had been issued mentioning the details of the clothes supplied, supported by the statement of account submitted by the prosecution itself, it can be safely presumed that in the normal course of business practices the supply of clothes had been made as against the said bills by M/s Pal Singh Kartar Singh to M/s Raj Exports (India).
78. In the end one may also refer to the statement of Investigating Officer himself where he had stated "it is correct that during the investigation I had found that the accused had purchased cloths from one Sh. Inder Singh PW5 for Rs.6 lakhs". After this statement had been made it is hard to understand how could prosecution take the position that no supply had been made to M/s Raj Exports (India) against the said bills.
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79. I, therefore, conclude that the Packing Credit Limit released to procure material from M/s Pal Singh Kartar Singh had not been mis utilized.
Release of Packing Credit to make payment to M/s Guru Kripa Textiles and issuance of pay order in its favour.
80. There is a letter of request on record dated 17.5.1994 Ex.PW8/13. There is a request made for issuance of a pay order of Rs.3 lakhs in favour of M/s Guru Kripa Textiles wherein it has also been stated that the accused Ashok Kumar Singhal had deposited Rs.75,000 as the margin.
81. The prosecution had examined witness PW6 an Officer who was posted as Officer in the Chandni Chowk branch of Allahabad Bank. He had deposed as per the record he had handed over to the CBI documents relating to the current account of M/s Guru Kripa Textiles which was opened on 11.4.1994. From his testimony it is evident on 18.5.1994 there CC No. 35/2011 51 of 61 was a pay order of Rs.3 lakhs deposited in this account. As per his testimony from his account Rs.50,000/ had been withdrawn on 27.4.1994, Rs.1 lakh on 20.4.1994, Rs.1,45,000/ on 21.5.1994 and Rs.1336/ on 18.1.1995 by different cheques. I have seen the said cheques. The cheque of Rs.1 lakh of 20.5.1994 was a cheque drawn on self. It was paid on the same day. The signatures on the back side of this cheque appear to be that of person issuing the cheque. On comparison with the signature card relating to the said current account Ex.PW6/2, the same appear to be that of the account holder. Similarly cheque of Rs.1,45,000/ dated 21.5.1994 is also a self cheque against which the payment had been received on the same day in cash. The cheque of Rs.50,000/ of 27.4.1994 is not a self cheque. It is a cross cheque drawn in favour of M/s Ajay Fabrics who had presented this cheque first on 17.4.1994 and again on 19.5.1994. Lastly, the cheque of Rs.1336/ dated 18.1.1995 is a self cheque by which this money was withdrawn at the time of closing of this account, which becomes clear from the statement of account filed on record.
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82. At first sight it may appear that this account was opened to corner the money of the Bank as this account was opened on 21.4.1993 and closed on 18.1.1995 and though there are many entries there in the statement of account except for the entries with regard to deposit of Rs.3 lakhs and withdrawal of Rs.1 lakh, Rs.1,50,000/ and Rs.50,000/ rest of the entries are of very small amounts but it would not be possible to say so with full conviction.
83. First of all, all the cash payment had been withdrawn not by the accused or anyone on his behalf. If the bearer cheques had been issued in favour of the accused Sh. Ashok Kumar Singhal or M/s Raj Exports (India) and the money had been received by the accused Sh. Ashok Kumar Singhal or there had been some evidence to that effect leading to such a conclusion that the money had been siphoned off by the issuance of the said cheques and had reached the accused Ashok Kumar Singhal without being actually utilized for procuring any material etc., it would have clinched the issue. Secondly, there are three CC No. 35/2011 53 of 61 crucial payments which seem to have set off the payment of Rs. 3 lakh made to M/s Guru Kripa Textiles by way of pay order issued by the Bank. Two withdrawals of Rs.1 lakhs and Rs. 1,45,000/ are of 20.5.1994 and 21.5.1994 made close on the heels of the encashment of payment of Rs.3 lakhs on 18.5.1994 but the third cheque of Rs.50,000/ predates 18.5.1994. It is of 17.4.1994 issued in favour of one Ajay Fabrics. This cheque appears to have been made, without any doubt, relating to some business transaction as this cheque was presented on 27.4.1994 and again on 19.5.1994 after the cheque had bounced on 18.4.1994, which is evident from an entry of 18.4.1994 for having deducted Rs.10/ on account of bouncing of cheque. Meaning thereby there could not have anything like 'not genuine' about this transaction. Thus make you questioned should all the entries in the statement be looked with suspicion.
84. What makes things further difficult is the absence of any supporting material to convert the suspicion which arises by looking at the statement of account relating to M/s Guru Kirpa CC No. 35/2011 54 of 61 Textiles into a strong belief or irresistible inference that the payment made to M/s Guru Kripa Textiles was for any other reason but not for supply of raw material.
85. There is one thing more one may notice. Like in the case of M/s Pal Singh Kartar Singh the Investigating Officer made no attempt whatsoever to find out if at all there was any supply made or not by M/s Guru Kripa Textile to M/s Raj Exports (India). The Investigating Officer could not have let it to be speculated by the Court as to whether or not any supply had been made of raw material by M/s Guru Kripa Textile or as to whether supply made, if any, related to the manufacturing of goods under the Letter of Credit. It was for him to have collected evidence one way or the other. In fact the testimony of the Investigating Officer is absolutely silent on this account if at all he had tried to get in touch Sh. Devender Kumar proprietor of M/s Guru Kripa Textile or question him or take the records of M/s Guru Kripa Textile in possession so as to establish as to what was done with the money which M/s Guru Kripa Textile CC No. 35/2011 55 of 61 had received. Sh. Devender Kumar was the best person who could have informed as to whether he had made supplies to M/s Raj Exports (India) or he had settled some other kind of dues with the accused Sh. Ashok Kumar Singhal by the receipt of the said pay order. Like he had cited Sh. Inder Pal of M/s Pal Singh Kartar Singh as a witness he could have cited Sh. Devender Kumar also as a witness in this case. I am of the view that it is a fit case where an adverse inference should be 1 drawn against the prosecution under Section 114(g) of the Indian Evidence Act, that if Sh. Devender Kumar had been examined as a witness in this case he would have deposed in favour of the accused Sh. Ashok Kumar Singhal.
86. The submission of Ld. Prosecutor that it was for accused to have establish that he had actually received the material by producing the relevant record. The question, however, can be asked as to what prevented the Investigating Officer to have 1 114 (g) : Nonexamination of witness. Only because the prosecution after examining the witness who was injured in the incident dropped other witnesses, it cannot be said that it can be presumed that the prosecution did it with oblique motive.
CC No. 35/2011 56 of 61 gone and seized the record of the accused Sh. Ashok Kumar Singhal to show that he had not received any goods from M/s Guru Kripa Textiles. In any case, at the cost of repetition, it may be stated that the innocence of the accused is a presumption of law, accused is not required to establish the same by adducing any evidence. Therefore, in the context of this case it can be assumed that he had received the delivery of goods in terms of the payment he had made by way of pay order of Rs.3 lakhs as raw material for manufacturing of garments as required under the Letter of Credit. It was for the prosecution to have proved otherwise. It would not be correct to say, once the prosecution has proved that Packing Credit had been released and pay order had been issued as per the request made, it would be then for the accused to prove that he had not mis utilized the funds.
87. I am of the firm opinion that the prosecution has failed to discharge its burden to establish that accused Sh. Ashok Kumar Singhal had mis utilized the funds released to the accused for making payment to M/s Guru Kripa Textiles.
CC No. 35/2011 57 of 61 Neither returning money nor exporting goods
88. These facts are not in dispute. It may be noted that mere failure to return the loan or failure to make exports under the Letter of Credit is not a criminal offence. This fact, however, would have assumed some significance if the prosecution had established any other fact which would have made the Court to believe that this was as a result of any conspiracy to cheat the Bank. As has been noted above, the prosecution has failed to establish any such other fact.
89. Ld. Defence Counsel had submitted that Packing Credit yLimit sanctioned was of Rs.10 lakhs, but only an amount of Rs.6.7 lakhs had been released. The result was because of shortage of capital accused Ashok Kumar Singhal could not meet his commitments under the Letter of Credit. He had submitted during the course of the arguments that accused "had to sell all the finished/semi finished raw material as scrap because he could not make the export under the said LC, for CC No. 35/2011 58 of 61 about Rs.1 lakh". He had added "the accused had offered to pay the said money but did not deposit the same because the Bank had already filed a recovery suit claiming penal and higher interest charges due to default." He had informed that the said recovery suit is still pending before Debt Recovery Tribunal.
90. Let this be made clear here that these are the submissions made during the course of the arguments which do not form part of evidence which has come on record. Such new facts in my view cannot be taken into account either to support the case of the prosecution or the defence of the accused for the simple reason that these facts could have been considered only after the accused had appeared as a witness in the Court that too after making a request in writing in accordance with Section 315 of the Code of Criminal Procedure. Section 315 of the Code of Criminal Procedure is based on the salutary principle that an accused cannot be forced to be a witness against himself, even if an accused wants to depose in the Court in his own favour, law would ensure that he does so after making a proper request CC No. 35/2011 59 of 61 in writing. To accept an oral submission on his behalf, which can be held against him, would surely be a far cry.
91. Thus, the submission that the accused had sold off the unfinished goods for Rs. 1 lakh cannot be taken into account neither from the side of the accused or the related submission made from the side of the prosecution that the accused to be fair should have deposited the said money with the Bank.
92. It is settled law to attract Section 415 IPC the intention to deceive should appear at the very beginning. This deception should be the reason for the person to deceived to deliver the property. To illustrate one may refer to illustration (g) of Section 415 IPC which reads as under :
"(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intent to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract."
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93. I would, therefore, conclude that just on the basis of the fact that the accused had not returned the money to the Bank or not exported the goods would it cannot be concluded that the accused had cheated the Bank.
Conclusion :
94. In view of the forgoing discussion and the facts and circumstances of the case, I conclude that the prosecution has failed to prove that the accused Sh. Ashok Kumar Singhal had committed an offence punishable under Section 120B IPC read with Section 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 420 IPC or under section 420 IPC, as charged.
95. I am accordingly acquitting the accused. His bail bond is cancelled. Surety discharged.
File be consigned to record room.
Announced in the Open Court ( L. K. GAUR )
on 6th of November, 2012 Special Judge (CBI)9
Central District, Delhi.
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