Delhi District Court
State vs . Cancellation on 28 August, 2014
IN THE COURT OF SH. AKASH JAIN, MM06, PATIALA HOUSE
COURT, NEW DELHI DISTRICT, NEW DELHI
FIR No: 209/06
PS: Parliament Street
U/s 420/468/471 IPC
State vs. Cancellation
28.08.2014
ORDER
1. Vide this order this court shall decide the question as to whether cancellation report filed by IO in the present case FIR No.209/06 is to be accepted or not. While doing so, this court would also decide the protest petition filed on behalf of Hariram Hiranandani who was earlier Chairman of All India Fine Arts & Crafts Society (herein after referred to as AIFACS) and one of the signatory to the complaint in question and who is no more part of AIFACS now. It may be noted that AIFACS on whose behalf complaint in question was actually filed had given no objection for acceptance of the present cancellation report, through its present executive body and counsel.
2. Brief facts of the case are that complainant society AIFACS is reportedly a non governmental organization, working in the field of fine arts and crafts to generate resources. AIFACS leased out a portion of its property at 1, Rafi Marg, New Delhi to British Broadcasting Corporation (BBC) w.e.f. 03.11.1993. It is averred that monthly rent of Rs.1,34,940/ along with additional rent of hire maintenance charges and car parking charges to the tune of Rs.1,07,800/ per month was agreed to be paid by BBC to AIFACS. In addition to the same, BBC also gave an interest free refundable deposit of Rs.27,30,000/to AIFACS. It is alleged that records of the society had been FIR No.209/06 State vs. Cancellation 1 of 10 tampered with and were misplaced in collusion and connivance of some officials of the society.
3. It is alleged in the complaint that the then Secretary of AIFACS Sh.S.S.Bhagat without any authority vide letter dated 25.01.1996 falsely reported to BBC that AIFACS had entrusted the maintenance job and car parking to M/s Service Point at 200, Patparganj, New Delhi w.e.f. 01.01.1996 and asked them to pay the said charges directly to M/s Service Point. It is alleged that Sh. S.S. Bhagat again represented and directed AIFACS to make payment of maintenance and car parking charges to M/s Modern Maintenance Services w.e.f. September 2002. It is alleged that no such agencies were appointed by AIFACS at any point of time for maintenance work or car parking and BBC had been making monthly payments to them for the said services on the false representations of the then Secretary Sh. S.S. Bhagat.
4. It is averred that after the death of Sh. S.S. Bhagat on 17.11.2003, the factum of alleged misappropriation came to the knowledge of Sh. Hariram Hiranandani in the month of June 2004. Thereafter, AIFACS sought details of all agreements, particulars of transactions and copies of correspondences between BBC and AIFACS to unearth the truth. It is alleged that substantial funds of AIFACS were diverted to third parties by late Sh. S.S. Bhagat in collusion with other officials of AIFACS. It is further alleged that for this purpose Sh.S.S. Bhagat also forged and prepared false documents.
5. In lieu of allegations made on behalf of the complainant society, Ld. Predecessor Court vide order dated 05.09.2006 got registered FIR No.209/06, u/s 420/468/471 IPC and consequent to the same, investigation in this case commenced. During the course of investigation as reported by IO it was FIR No.209/06 State vs. Cancellation 2 of 10 revealed that AIFACS had leased out a portion of their building to BBC on rent during the year 1993 and BBC made payments for rent and other charges like maintenance and car parking separately to AIFACS. Some time later BBC started issuing cheques in favour of M/s Service Point for payment of maintenance and car parking charges w.e.f. January 1996 on the written instructions of Sh. S.S. Bhagat, the then Secretary of AIFACS. It was further revealed that on scrutiny of lease agreements between AIFACS and BBC it was revealed that Sh. S.S. Bhagat was duly authorized to enter into, sign and execute all the agreements pertaining to issue of lease/ rent/ hire to the BBC. It was further revealed during the investigation that one meeting of negotiation committee for renewal of lease with BBC was held by AIFACS on 24.07.2002 which further confirmed the authorization of Sh. S.S. Bhagat to deal with lease matters qua BBC and the lease was extended for further one year by AIFACS with the increase in rent by at least 5%. The said meeting was reportedly attended by 25 persons including Ram V. Sutar, Hariram Hiranandani, V.S. Rahi, A.S. Bhullar (i.e. complainants in the present case) and S.S. Bhagat along with others. It was reported by IO that if there had been any discrepancy regarding lease of AIFACS with BBC and in respect of payments/bifurcation of rent received from BBC, the members of council could have raised alarm but none actually did which indicates that the entire facts were in the knowledge of council members and management of complainant society. IO further reported that no evidence came on record to show criminality on the part of accused persons.
6. During further investigation, IO concerned collected details of income and expenditure of AIFACS w.e.f. 1993 to 2004, wherein amount of rents was found varying in all the years which remained unexplained, however, no objections were reportedly ever made by any officer or member of the FIR No.209/06 State vs. Cancellation 3 of 10 complainant society.
7. IO/ SI M.P. Saini further examined authorized employees of AIFACS namely Ram Dutt Joshi, Ram Pal, Ram Singh, Vicky and Satender u/s 161 Cr.P.C. who stated that maintenance and car parking work in the building of AIFACS was performed by M/s Service Point and 810 persons were always used to be there on behalf of M/s Service Point. IO also examined one Krishan Chand Dass, Vikram @ Vicky, Prem Nath Arora and some other employees who also confirmed services provided by M/s Service Point at AIFACS during the relevant period. During the course of further investigation, IO stated that he examined complainant A.S. Bhullar who stated that the complainant Ram V. Sutar and Hariram Hiranandani filed the present complaint against S.S. Bhagat to save their own skin as both of them have been functioning as acting President and Chairman of AIFACS since 15.12.1999 and claimed ignorance about the existence of M/s Service Point and M/s Modern Maintenance and made payment of maintenance and car parking charges to them. It was further revealed by IO during the investigation that statement given by A.S.Bhullar that the fact of diversion of rent came to their notice in May 2005 is not correct as the said issue was discussed in the meeting of AIFACS on 09.08.2003 and it was agreed by the members of council of AIFACS that the rent has been bifurcated into two parts, apparently to save income tax.
8. During further course of investigation IO examined one Jag Mohan Singh Chopra, Ex. President of AIFACS who stated that accountant, chairman and treasurer are responsible for accounts of the society and as per his knowledge the society accounts were audited annually and the same were disc`ussed with council members every year. He further stated that he was not aware about the services provided by any maintenance company but the FIR No.209/06 State vs. Cancellation 4 of 10 society and BBC made no such complaint. He further stated that Ram V. Sutar and Hariram Hiranandani were also the Vice Presidents of AIFACS during the year 1993 and 1996 when the alleged diversion was started but no such issue was pointed out by them at any point of time.
9. IO further investigated regarding the account of M/s Service Point in Vaishya Cooperative Bank which was opened by Mrs. Champa Sarin and Sh. Ankur Kumar. On investigation it was found that the cheques issued by BBC were deposited in this account and most of the cash withdrawals were made by Sanjay Gupta, Kailash and Dalip who were the employees of M/s Service Point which worked at AIFACS. IO further examined Sanjay Gupta u/s 161 Cr.P.C. and also confirmed details of some employees from him. IO further collected the bank records of M/s Nova Service Point from SBI, Rail Bhawan Branch whose proprietor was Mr. Janak Seth and manager was one Mrs. Meeta. Their bank account was opened on 27.10.2000 and got closed on 28.03.2002. IO further collected the bank records of M/s Modern Maintenance which revealed that one Sumit Bhasin opened the account in the name of M/s Modern Maintenance in Global Trust Bank in November 2002. On examination, Mr. Sumit Bhasin stated that he was proprietor of M/s Modern Maintenance and provided services of maintenance and car parking at site of AIFACS during September 2002 to May 2004. He further stated that his firm was forced to withdraw its services in June 2004 as they were not getting payments even after repeated reminders.
10. After that investigation of the present matter was entrusted to SI Naresh Malik who examined Smt. Bimla Negi, Jai Narayan, Dhara Singh Rampal, Ashok, Rajeev Nayar who were employees of AIFACS during the given period. They all reportedly confirmed the presence of employees of FIR No.209/06 State vs. Cancellation 5 of 10 authorized agencies as mentioned above at the premises of AIFACS. IO/SI Naresh Malik further reported that during investigation the audit reports of AIFACS w.e.f. 1994 to 2004 were scrutinized but no observation of diversion of funds had been found. IO further verified the address at 200, Patparganj, Delhi which was found to be correct. IO reported that the said premises were occupied by Sanjay Gupta who had worked as Manager for both M/s Service Point & M/s Nova Service Point. IO further collected the memorandum and articles of association of AIFACS, scrutiny of which revealed that council is defined as governing body of society and no separate responsibilities had been mentioned in constitution of AIFACS for its council members. IO further reported that most of the council members confirmed presence of employees of aforementioned agencies at AIFACS.
11. During further investigation by IO it was found that the account no.1700102294 of M/s Modern Maintenance at Global Trust Bank was opened by one Sumit Bhasin who reportedly provided services of maintenance and car parking to AIFACS from September 2002 to May 2004. The said company later on stopped providing services to AIFACS due to nonpayment of charges qua which a recovery suit was also contested between M/s Modern Maintenance and AIFACS. IO further reported that from the testimonies of employees working at AIFACS, photographs seized, documents collected and statements of council members of society, the allegations of nonexistence of M/s Modern Maintenance, M/s Nova Service Point and M/s Service Point could not be substantiated. It was further reported by the IO that there may be certain irregularities in the working of abovementioned companies, but their non existence could not be proved during the investigation. It was further reported by the IO that complainant society could not provide any documents during investigation which could be termed as forged and fabricated, as such, FIR No.209/06 State vs. Cancellation 6 of 10 allegations of offences u/s 468/471 IPC were not substantiated.
12. IO further reported that most of the members of council (during relevant period) including secretary S.S. Bhagat had already died and the scrutiny of lease agreement dated 03.11.1993, letter dated 25.01.1996, letter dated 20.03.2007 by BBC, demand letter dated 23.11.1997 by Service Point, Audit reports from 1993 to 2003, record of the society, letter dated 23.05.2008, Secretary note dated 04.01.2001 for payment to Nova Service Point, letter dated 25.01.1996 & 08.02.1996 by Subodh Sen, Reply dated 14.11.2006 of Sh. V.S. Rathi, letter dated 20.11.2003 of Sh. Hariram Hiranandani, letter dated 09.12.2005 signed by 13 council members, cheque dated 04.01.2001 signed by V.S. Rathi & Ram V. Sutar, TDS certificates issued by BBC, letter dated 27.08.1997 of Subodh Sen, Photographs & Art Magazines seized and statements of the employees of the AIFACS, confirmed the existence of above mentioned alleged companies and the fact that the same was in knowledge of the management of AIFACS. As such the IO finally reported that from the investigation in the present case no sufficient evidence had come on record to prove and substantiate the allegations made in the FIR.
13. In reply to the abovementioned cancellation report one protest petition was filed on behalf of AIFACS which was later on withdrawn by them. Thereafter, another protest petition was filed by Hariram Hiranandani who was earlier Vice President as well as Chairman of AIFACS. It was stated in the protest petition that funds of the society had been intentionally diverted from 1996 till September 2003 in the form of hire maintenance charges. It was alleged that BBC acted on false representation of S.S. Bhagat who was not authorized to entrust maintenance and car parking work to third agencies. It was further alleged that M/s Modern Maintenance, M/s Nova Service Point and FIR No.209/06 State vs. Cancellation 7 of 10 M/s Service Point do not exist and S.S. Bhagat in collusion with other officials of society misappropriated funds of the AIFACS. It was further alleged that there were substantial irregularities in the accounts of AIFACS which was willfully overlooked by members of council. It was further alleged that police has neglected the fact that there was no written contract between AIFACS and M/s Modern Maintenance, M/s Nova Service Point and M/s Service Point to provide maintenance and car parking services on monthly basis and to draw payments from BBC qua the same. It was further alleged that the police has neglected the fact that both M/s Service Point as well as M/s Nova Service Point had their accounts through the same address i.e. 200, Patparganj, New Delhi which is suspicious. It was further alleged that police failed to properly probe proprietors of M/s Service Point i.e. Champa Sarin and Ankur Kumar Proprietors of M/s Nova Service Point i.e. Janak Seth and Meeta as well as proprietor of M/s Modern Maintenance Service i.e. Sumit Bhasin. It was further alleged that investigation conducted by police is incomplete and that the police failed to collect all the relevant documents, materials relevant to the present case. Finally, it was prayed that further investigation of the present case be ordered to be handed over to Crime Branch for examining offences for reaching just decision of the case.
14. Arguments heard. Record perused.
15. At the outset, it has been brought on record by the IO that the then Secretary of Complainant Society, Sh. S.S. Bhagat was duly authorized to enter into, sign and execute all the agreements pertaining to issue of lease/rent/hire to the BBC, as such, the argument raised on behalf of protester that Sh. S.S.Bhagat was not authorized to entrust maintenance and car parking work to third agencies is without any merit. With respect to the FIR No.209/06 State vs. Cancellation 8 of 10 allegation that the agencies namely M/s Modern Maintenance, M/s Nova Service Point and M/s Service Point did not actually exist and that the funds of AIFACS were being diverted by Sh. S.S.Bhagat to some unknown sources with collusion of other officials of AIFACS, it is imperative to refer to the comprehensive investigation carried out by 2 IOs in the present case over a period of more than 2 years. Both the IOs have scrutinized the records of AIFACS and above mentioned agencies, collected various documents, letters, bills, photographs and examined number of officials, employees of AIFACS and its council members and majority of them have confirmed the existence of aforesaid agencies and the fact that its employees were working at AIFACS during the relevant period from 1996 to 2003.
16. The protester has failed to explain that if such a huge money, in the form of rent was allegedly being diverted by Sh.S.S.Bhagat to some third parties every month since 01.01.1996 till his death in the year 2003, then why no alarm was raised by any member of council of complainant society, of which even protester was a part being its Vice President and Chairman during the relevant period. Moreover, it has been brought in the investigation by the IOs that the factum of bifurcation of rent received from BBC was within the knowledge of managing committee of AIFACS in the meeting held on 09.08.2003 wherein it was noticed that rent had been bifurcated into two parts (apparently to save income tax). Further, no observation regarding alleged discrepancies in the rents received were found by IOs in the audit reports of AIFACS during 1994 to 2004. It is further argued by IO as well as Ld. APP for State that AIFACS is a private society and no public money is involved in the present case. The management of AIFACS do not want further probe in this case as no member of AIFACS is reportedly aggrieved with the investigation of police in this case.
FIR No.209/06 State vs. Cancellation 9 of 10
17. For the sake of arguments even if arguments of protester are to be believed that Sh. S.S. Bhagat diverted the funds of AIFACS since 1996 till 2003 by keeping other council members in dark, it may be noted that Sh.S.S.Bhagat had already died on 17.11.2003 and thus cannot be subjected to criminal prosecution. In the absence of any incriminating material brought against any other council members (during the relevant period) of AIFACS during investigation, mere allegation of cheating by protester who was also a key member of that management with ignored the alleged diversion of funds for almost 9 years, is of no consequence.
18. Keeping in view material on record, submissions made by the parties and investigation carried out by IOs it is concluded that allegations made in the FIR could not be substantiated and there is no sufficient ground for ordering further investigation in the present case. Cancellation report in the present matter is accordingly accepted and protest petition filed by Hariram Hiranandani is dismissed.
19. File be consigned to record room after due compliance.
(Akash Jain)
MM06/PHC/ND/28.08.2014
FIR No.209/06 State vs. Cancellation 10 of 10